PHARMERICA CHICAGO, INC. v. Meisels
772 F. Supp. 2d 938
N.D. Ill.2011Background
- PharMerica supplied pharmaceuticals to West Suburban, later litigated over unpaid goods and services in 2007 and 2008 lawsuits.
- In 2006, a Facility Transfer shifted operations to West Suburban, owned by Filippo, with Bloomingdale Terrace Realty leasing the real estate.
- West Suburban became insolvent by 2007, and PharMerica obtained a $249,373.16 default judgment in 2008 but cannot collect due to West Suburban's insolvency.
- Plaintiff alleges a scheme by Meisels, Filippo, and related entities to siphon assets via sham transfers and inflated rents, with Meisels purportedly the real party in interest.
- PharMerica asserts fraud, breach of fiduciary duty, conspiracy, inducement of fiduciary breach, fraudulent transfer, unjust enrichment, and tortious interference with contract arising from these transactions.
- Settlement in the 2007 Lawsuit allegedly included representations that the 2007 Defendants were unrelated to West Suburban, which PharMerica contends were fraudulent and induced the settlement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the fraud claims meet Rule 9(b) and survive Rule 12(b)(6) | PharMerica contends fraud allegations are stated with particularity. | Defendants contend claims are not pleaded with sufficient specificity. | Yes; fraud claims are pled with particularity and survive dismissal. |
| Whether the Settlement Agreement bars the fraud claims | Nonreliance and integration clauses do not bar claims given misrepresentations central to the Settlement. | The settlement clause forecloses extrinsic evidence and reliance on pre-existing representations. | Not barred; parol evidence and nonreliance clauses do not defeat fraud claims where misrepresentations are part of the agreement itself. |
| Whether the 2007 Lawsuit history requires the current claims to fail as pleading 'self-contradicted' | The instant fraud theory differs from 2007 Lawsuit allegations; not plead out of court. | Similarities show PharMerica plead itself out of court by alleging a sham scheme earlier. | Not plead out; The current allegations differ in structure and timing. |
| Whether Counts II–VII survive the pleadings | Counts II–VII are viable with adequately pleaded facts and theories of liability. | Some counts lack adequate pleading or involve nonparties. | Counts II, IV, V, VI, VII largely survive; Count III partially dismissed (Bloomingdale Pavilion and Meisels Family LP), others remain. |
| Whether Rule 9(b) applies to all counts and whether the pleading satisfies heightened standards | Rule 9(b) applies where fraud is alleged, including related claims. | 9(b) requirements are not satisfied for some counts or allegations. | Rule 9(b) applies to all counts sounding in fraud; the complaint meets the heightened pleading standard. |
Key Cases Cited
- Ashcroft v. Iqbal, 129 S.Ct. 1937 (U.S. 2009) (plausibility standard for stating a claim)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard; facts must support a plausible claim)
- Tamayo v. Blagojevich, 526 F.3d 1074 (7th Cir. 2008) (pleading fraud and imputation of knowledge in Seventh Circuit)
- Vigortone AG Prods., Inc. v. PM AG Prods., Inc., 316 F.3d 641 (7th Cir. 2002) (integration clause does not bar fraud claims)
- Tierney v. Vahle, 304 F.3d 734 (7th Cir. 2002) (documents referenced in complaint may be considered if central)
- Henson v. CSC Credit Svcs., 29 F.3d 280 (7th Cir. 1994) (judicial notice of public records allowed in motion to dismiss)