United States District Court, S.D. Indiana, Indianapolis Division
ENTRY AND ORDER ON LOCAL INITIATIVES SUPPORT
CORPORATION'S MOTION TO DISMISS [DOC. 60]
K. LaRue United States Magistrate Judge
April 2016, Plaintiffs Victor Wakley and Julie Wakley
commenced this action against numerous defendants, including
Local Initiatives Support Corporation (LISC), alleging a
conspiracy to violate Plaintiffs' civil rights along with
numerous state law claims.
September 21, 2016, Plaintiffs moved for leave to amend their
complaint, seeking to add factual allegations of developments
that had occurred since the filing of the original complaint.
The motion was not opposed. The motion was granted and the
Amended Complaint was filed November 4, 2016.
Subsequently, LISC filed a Motion to Dismiss for Failure
to State a Claim Upon Which Relief May Be Granted [doc.
60]. Plaintiffs and LISC have stipulated to the referral of
the motion to the undersigned, and the District Judge
referred the motion to the undersigned for ruling.
Amended Complaint alleges that Victor Wakley is the
President of Save Our Veterans, Inc. and that Julie Wakley,
his spouse, is an investor in Save Our Veterans. [Am.
Compl., doc. 54, ¶¶ 14-16.] It alleges that
Save Our Veterans entered into a lease agreement with
Southeast Neighborhood Development, Inc. (SEND) to rent the
real property at 101 South Parker Avenue in Indianapolis,
Indiana. [Id. ¶ 1 & Ex. B.] The complaint
alleges that Save Our Veterans had an option to purchase the
property and that SEND breached the agreement by selling the
property to the City of Indianapolis. [Id.
¶¶ 50-51, 73.] The Amended Complaint
further alleges that the City conspired with the other
Defendants to steal the property from Save Our Veterans and
steal the Wakleys' investment in their business.
[Id. ¶¶ 5 & 46.]
Amended Complaint alleges that LISC and the other
defendants have “engaged in a pattern and practice of
using fraudulent practices to commit fraud, [and] make
negligent misrepresentations ….” [Id.
¶ 1.] LISC allegedly knew of the existence of the lease
Save Our Veterans had with Send and conspired to induce SEND
to breach its contractual obligations. [Id.
¶¶ 90, 100.] The Wakleys claim that “[LISC]
is a funding company who has offered money to the
co-conspirators and [has] provided the necessary funding for
the co-conspirators to commit a forceful wrongful eviction of
Plaintiff(s) and force Save Our Veterans out of
business.” [Id. ¶ 23.] They allege that
Defendant Mike Bowling “offered to borrow $200, 000
… via [LISC] then ‘relend' [it] to Save Our
Veterans ….” [Id. ¶ 42.]
Amended Complaint contains ten counts. The first
nine allege state law claims of fraud, negligent
misrepresentation, breach of contract, breach of
implied-in-fact contract, tortious interference with a
third-party contract, breach of implied covenant of good
faith and fair dealing, unfair business competition,
conversion, and trespass to land. The tenth count alleges
that the City and other Defendants have conspired to deprive
Plaintiffs' of their due process, civil, and
constitutional rights “by taking control of Plaintiffs
(sic) business and property without notice.”
[Id. ¶ 153.]
Rule of Civil Procedure 12(b)(6) authorizes the dismissal of
claims for “failure to state a claim upon which relief
may be granted.” Fed.R.Civ.P. 12(b)(6). A motion to
dismiss tests the legal sufficiency of the complaint.
Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 675
(7th Cir. 2001). “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.'” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). “A claim has
facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Id. “Plausibility” is not equated with
“probability”; instead, it is “more than a
sheer possibility that a defendant has acted
unlawfully.” Iqbal, 556 U.S. at 678.
complaint need not contain “detailed factual
allegations, ” but “more than labels and
conclusions” and “a formulaic recitation of the
elements of a cause of action” are required.
Twombly, 550 U.S. at 555. When deciding a motion to
dismiss, the court “accept[s] all well-pleaded factual
allegations as true and view[s] them in the light most
favorable to the plaintiff.” Lavalais v. Vill. of
Melrose Park, 734 F.3d 629, 632 (7th Cir. 2013). The
court may consider documents attached to the complaint.
Bible v. United Student Aid Funds, Inc., 799 F.3d
633, 639-40 (7th Cir. 2015); Fed.R.Civ.P. 10(c).
has moved for dismissal of all claims against it, arguing
that none of the counts state a claim against it upon which
relief may be granted. LISC notes that Plaintiffs have
already amended their complaint once. Plaintiffs have filed a
lengthy response, but for the most part, they fail to
challenge LISC's arguments for dismissal. The only claims
they attempt to argue are sufficient are the fraud and
conspiracy claims. Thus, they do not appear to challenge
LISC's motion with respect to any of the other claims.
Nonetheless, all the claims against LISC should be dismissed
for failure to state a claim.
elements of fraud are “(1) a material misrepresentation
of past or existing fact which (2) was untrue, (3) was made
with knowledge of or in reckless ignorance of its falsity,
(4) was made with the intent to deceive, (5) was rightfully
relied upon by the complaining party, and (6) which
proximately caused the injury or damage complained of.”
Kesling v. Hubler Nissan, Inc., 997 N.E.2d 327, 335
(Ind. 2013) (quoting Lawyers Title Ins. Corp. v.
Pokraka, 595 N.E.2d 244, 249 (Ind. 1992)). “[A]
party must state with particularity the circumstances
constituting fraud.” Fed.R.Civ.P. 9(b). In the Seventh
Circuit, parties “must plead the ‘who, what,
when, where, and how: the first paragraph of any newspaper
story' of the alleged fraud.” Rocha v.
Rudd, 826 F.3d 905, 911 (7th Cir. 2016) (quoting
United States ex rel. Lusby v. Rolls-Royce Corp.,
570 F.3d 849, 853 (7th Cir. 2009)). This includes
“‘the identity of the person making the
misrepresentation, the time, place, and content of the
misrepresentation, and the method by which the
misrepresentation was communicated to the
plaintiff[s].'” Id. (quoting
Uni*Quality Inc. v. Infotronx, Inc., 974 F.2d 918,
923 (7th Cir. 1992)). “[I]n a case involving multiple
defendants, ‘the complaint should inform each defendant
of the nature of his alleged participation in the
fraud.'” Id. (quoting Vicom, Inc. v.
Harbridge Merch. Servs., 20 F.3d 771, 777-78 (7th Cir.
argue that courts have recognized that it is impractical to
require specific citation to each instance of fraudulent
conduct when such conduct is repeated frequently and over a
lengthy period of time. But they cite out-of-circuit case
law, none of which are binding on this Court. Plaintiffs also
suggest that the heightened pleading standards are relaxed
where factual information is peculiarly within the
defendant's knowledge or control, but again they cite
only out-of-circuit case law. Plaintiffs' authorities are
not in line with the binding Seventh Circuit case law cited
above, which this Court must follow.
against the appropriate, heightened pleading standards, the
Amended Complaint fails to state a fraud claim
against LISC. The allegations do not satisfy Rule 9(b)'s
particularity standards. Plaintiffs do not provide specific
names, dates, times, places, or content of the
misrepresentations giving rise to alleged fraud. Even though
there are multiple defendants in this case, Plaintiffs have
not informed each ...