OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTIONS TO STRIKE AND DISMISS, AND SCHEDULING CASE MANAGEMENT CONFERENCE
The plaintiffs, all foreign nationals, have filed a complaint against a variety of defendants alleging that they were fraudulently induced into investing in rental properties in the City of Detroit with false promises that the homes were refurbished, approved under a federal housing program standard, already tenanted, and would yield a specific rate of return each year. Presently before the Court are motions by four groups of defendants to dismiss and to strike certain irrelevant and inflammatory allegations from the complaint. For reasons discussed in detail below, the motions to dismiss will be granted in part and denied in part. The motions to strike will be granted.
I.
According to the complaint, the plaintiffs are citizens of the United Kingdom, the Republic of Yemen, or Australia. The institutional defendants — Metro Property Group, LLC, Metro Property Management, LLC, Apex Equities, LLC and Global Power Equities, LLC — are all Michigan limited liability companies with their primary place of business in Dearborn, Michigan. The individual defendants are all Michigan citizens. The plaintiffs allege that the institutional defendants are the single largest purchasers of foreclosed Detroit homes.
Defendant Sameer Beydoun is a Dear-born resident and the chief executive officer of Metro Property Group, LLC, Metro Property Management, LLC, Global Power Equities, LLC, and Apex Equities, LLC. The plaintiffs allege that defendant Ali Beydoun is a Dearborn resident and also the chief operating officer and executive director of Metro Property Group, LLC. Defendant Mike Alaweih is the vice president of construction services for Metro Property Group, LLC and a member of Apex Equities, LLC. Defendant David Makki is the vice president of real estate services for Metro Property Group and a Dearborn resident. Defendant Chris Picc-iurro was the chief financial officer of Metro Property Group, LLC, and a resident of Harrison Township. Defendant Kathy Messics is the client care director of Metro Property Group and a resident of West-land. Defendant George Vanderburg was the director of tenant relations of defendant Metro Property Group and a Fern-dale resident. Defendant Tarek Mahmoud Baydoun is an attorney and was the general counsel for defendants Metro Property Group, LLC, Metro Property Management, LLC, Global Power Equities, LLC, and Apex Equities, LLC, and was “of counsel” to defendant Allen Brothers, Attorneys and Counselors, Professional Liability Company. Baydoun is also a political pollster and is often featured on Fox 2 News television. Defendant Baydoun Law Group, PLLC is a Michigan limited liability company that does business under the assumed name of the Meridian Law Group. Defendant Allen Brothers Attorneys and Counselors Professional Liability Company (PLLC) is a limited liability company with an office in Detroit; defendants James and John Allen were members of the firm.
The complaint itself is a prolix document consisting of 371 paragraphs separated into thirteen counts, spanning 116 pages. It makes reference to dozens of exhibits, but none are attached to the complaint on file with the Court. The plaintiffs allege generally that the defendants engaged in a scheme that defrauded the plaintiffs of their retirement funds and pensions; they characterize the scheme as a Ponzi scheme, although the means of the fraud alleged suggest that the characterization is inaccurate. The plaintiffs contend that the defendants have purchased thousands of foreclosed homes in Detroit for prices ranging from $500 to $5,000 and make profits by defrauding investors, including the plaintiffs, into buying those homes for prices ranging from $40,000 to $50,000. The plaintiffs allege that the defendants knew that the homes, even if refurbished, are nearly unrentable; those that are rented cannot cover the costs of repairs.
The plaintiffs allege that the defendants did not refurbish the homes or make any attempt to bring them up to building code requirements for a certificate of occupancy or to the requirements for habitability under federal housing programs. The plaintiffs accuse defendant Mike Alaweih, the construction project manager for the LLC defendants, of deliberately failing to refurbish their homes, leading to thousands of dollars of fines and repair costs. And they contend that even if refurbished, the homes generally were not tenanted.
The plaintiffs believe that part of* the defendants’ scheme is to market the homes to third parties — primarily foreign investors — that are unable or unlikely to view the properties prior to purchase. They say that on the few occasions that foreign investors visit Detroit, the defendants show the investors, including the plaintiffs, properties that have been refurbished, but are staged fraud. The defendants have, on occasion, sent the plaintiffs photographs of the insides of homes that the plaintiffs allegedly purchased, but the plaintiffs say the photos are fraudulent: they are not of the same hоmes; or promised repairs were never made.
The defendants marketed homes to overseas buyers, including the plaintiffs, as refurbished, already tenanted, and up to federal housing standards. But the plaintiffs allege that the defendants falsely guaranteed verbally and in -writing that the homes were “turnkey properties,” told prospective buyers that the homes provide immediate cash flow, described the tenants to prospective buyers, and provided potential buyers, including the plaintiffs, with the renters’ financial information and financial status. The plaintiffs say that all of that information was false.
After selling the • properties to the plaintiffs, the defendants were to manage, repair, and prosecute evictions for the properties. But, the plaintiffs allege, the repairs were never done, fraudulent evictions of non-existent, fictional tenants were conducted, and the defendants billed
One of the plaintiffs says that when he challenged some of the defendants, Tarek Baydoun, another defendant, threatened the plaintiff with criminal proceedings, citing his experience as a Wayne County Prosecutor’s office intern. The plaintiffs allege that defendant Tarek Baydoun fraudulently engaged in the pretense of evicting the non-existing tenant from the property. Baydoun also supposedly evicted the paying tenant as a trespasser in order to conceal the fact that the actual tenants were paying much lower rents than were represented in the fraudulent leases. The plaintiffs allege that defendant Tarek Baydoun alsо knowingly participated in marketing and selling the fraudulent scheme and appears on video at a marketing session.
The plaintiffs contend that the scheme worked initially because the defendants typically paid the home buyers, including the plaintiffs, higher rent for several months, even though there was no tenant or a different tenant than the person named on the fraudulent lease. After several months, the defendants allegedly told the homeowners, including the plaintiffs, that the tenant stopped paying rent and had to be evicted or that the tenant moved out and no rent is forthcoming. In most cases, the defendants never sought a new tenant and the property became worthless, according to the investor-plaintiffs. Defendants Sameer Beydoun, Ali Beydoun, David Makki, and Kathy Messics are accused of supplying fraudulent, forged lease documents for non-existent tenants to prospective buyers and current homeowners to whom they sold the homes and now manage. Defendants Sammer Beydoun, Kathy Messics, and George Vanderburg supposedly forged the fraudulent lease documents. The plaintiffs say that defendants Sameer Beydoun, Ali Beydoun, David Makki, and Kathy Messics lied about tenants and the conditions of properties. And the role of defendant Chris Picciurro was to supply false information routinely about rental payments and amounts. The plaintiffs contend that when they looked into the matter, they often discovered that the homes were in severe disrepair, never had a tenant, or had a tenant that was paying less rent than what the defendants represented and was different than the individual named on the lease.
The plaintiffs allege that the defendants represented to them that the homes were “Section 8 approved,” see 42 U.S.C. § 1437f; 24 C.F.R. §§ 811.101-888.115, but in almost all cases, a Section 8 audit was never done for the home and a Section 8 сontract was never entered into because the homes would not pass a Section 8 audit. In some cases, they say, after the plaintiffs demanded to see the Section 8 audit or contract, a Section 8 audit or contract was post-dated and apparently fraudulent. In other cases, the plaintiffs were fined thousands of dollars for failing Section 8 requirements, including a $5,761.80 fine levied against plaintiffs Kathryn Llewellyn-Jones and Mark Llewellyn-Jones.
The plaintiffs purchased homes from defendants Sameer Beydoun, Ali Beydoun, David Makki, and Mike Alaweih, doing business as defendants Metro Property Group, LLC, Metro Property Management, LLC, Apex Global Properties, LLC, and Global Power Equities, LLC. The plaintiffs accuse defendants Tarek Bay-doun, Chris Picciurro, Kathy Messics, and
The plaintiffs allege that when they discovered the fraudulent scheme, the defendants continued to lie to them. Plaintiff Kathryn Llewellyn-Jones discovered that the defendants were advertising lower rents in an online listing for several of the properties that she purchased. When she questioned defendants Ali Beydoun and Kathy Messics about those listings, the defendants told her that the listings were incorrect.
The plaintiffs allege that Tarek Bay-doun, who served as general counsel for the Metro Property defendants, participated and conspired with the other defendants, and billed several plaintiffs for fraudulent evictions of non-existent tenants from plaintiffs’ properties and evictions of non-existent trespassers in order to conceal the fraudulent scheme. They also allege that Tarek Baydoun threatened the plaintiffs with criminal prosecution when they asked questions about the fake evictions and fraud. The plaintiffs also allege that James Allen sent threatening messages to the plaintiffs. They also allege that James Allen, John Allen, and Allen Brothers attempted to conceal Bay-doun’s relationship with them by removing his name from the Allen Brothers’ website on- October 1, 2012, when Tarek Baydoun and the Baydoun Law Group actually remained within the Allen Brothers law office, maintained an “of counsel” relationship with the Allen Brothers, and Tarek Baydoun continued to write in the Arab American News on behalf of the Allen Brothers.
The allegations that offend many of the defendants, and are the subject of the motions to strike, are claims that Tarek Baydoun openly has praised and defended Hezbollah, which the plaintiffs note has been named a “Sрecially Designated Global Terrorist Entity” by the United States Department of Treasury; and that Tarek Baydoun is a former employee of Al-Ma-barrat Charitable Organization, a Dear-born, Michigan charity that is the United States affiliate of the Lebanon-based Hezbollah charity, Al-Mabarrat, when the charity was raided by the FBI for allegedly sending money to Hezbollah. The plaintiffs state in their complaint that on Facebook, Tarek Baydoun repeatedly promoted the Lebanon-based Hezbollah charity, Al-Mabarrat, and he asked his Face-book friends and followers to donate to the charity for his twenty-fifth birthday. The plaintiffs also say that defendants Tarek Baydoun, Sameer Beydoun, Ali Beydoun,
The plaintiffs allege that the defendants marketed a home located at 16527 Griggs Street in Detroit to plaintiffs Kathryn Llewellyn-Jones and Mark Llewellyn-Jones, using a document entitled property information. The document stated that the home is “[c]urrently rented to a pre-screened, up-to-date tenant for $900 per month” and guaranteed the buyer of the home, “[gjross yearly income [of] $10,800,” “[n]et annual rent [of] $7,820,” and “[n]et [y]ield = 17.4%.” Compl. ¶ 66. The document also noted eight significant repairs to the home that the defendants allegedly made. The defendants informed the plaintiffs that the property was occupied by a tenant that signed a lease for $900; but, it is alleged, this lease turned out to be fraudulent and forged. The defendants also informed plaintiffs Kathryn and Mark Llewellyn-Jones thаt the property was Section-8-approved and that the tenant lived there pursuant to Section 8 approval. These plaintiffs purchased the property from defendant Global Power Equities, LLC on June 15, 2011 for $42,500, they say, based on these documents and representations. The plaintiffs also signed a “Management Agreement” with defendant Metro Property Management, LLC and defendant Sameer Beydoun. But in August 2011, plaintiff Kathryn Llewellyn-Jones discovered a rental list belonging to defendant Metro Property Group, which advertised the property as available for rent at $800 even though the defendants informed the plaintiffs Kathryn and Mark Llewellyn-Jones that the property was already rented at $900. The plaintiffs soon learned that the lease they had been told about was fictional, fraudulent, and forged and there was, in fact, no tenant renting or living at the property.
Plaintiff Kathryn Llewellyn-Jones alleges that she immediately contacted defendant Ali Beydoun to inquire about the discrepancy and was told that the list belonged to another agent over whom he had no control. The plaintiffs later learned that the defendants created and posted the rental. Defendant Ali Beydoun allegedly told Llewellyn-Jones that he did not know why the properties were advertised at the lower rents, but that he had the signed lease in front of him for the property located at 16527 Griggs Street for a rental rate of $900 per month and that the tenant had moved in on May 1, 2011. After Ali Beydoun sent this response to Llewellyn-Jones, defendant Kathy Messics, the client care director of Metro Property Group, LLC, accidentally sent plaintiff Kathryn Llewellyn-Jones an email message addressed to Ali Beydoun telling him that the plaintiff had not been fooled by his false explanations of the rental listing and that they needed to make up a more credible fraudulent story to further cоver up the ongoing scheme.
Llewellyn-Jones alleges that the defendants repeatedly failed to present the lease to her despite her repeated requests. Messics finally sent a lease dated May 1, 2011 signed by defendant Sameer Beydoun and a tenant named Paula Sinclair with a monthly rental rate of $900. Defendant Messics also told Llewellyn-Jones that the tenant had paid a security deposit equivalent to one month’s rent. Plaintiffs Kathryn and Mark Llewellyn-Jones soon learned that the lease was fraudulent and forged: no tenant lived at the property
In June 2012, Kathryn Llewellyn-Jones and Mark Llewellyn-Jones received a rental statement for May 2012, showing a payment of only $750 for the property, $150 below the rental rate on the lease for the property. When Kathryn Llewellyn-Jones inquired about the lower rent, the defendants informed her that the Section-8 allowance for the property dropped to $750, which the plaintiffs allege was false.
The plaintiffs also requested a copy of the Housing Assistance Payments contract (HAP) from defendant David Makki, the vice president of real estate services for Metro Property Group, LLC. Makki sent the plaintiffs a partial HAP document and refused to provide the plaintiff with the full document. The portion of the lease that Makki sent recited a beginning date of November 28, 2011, much later than the lease the defendants sent the plaintiff for the property, which was May 1, 2011. Additionally, the portion of the lease that Makki sent the plaintiffs shows a rental rate of $750 per month, not $900 as specified on the original lease. In an email message, Makki told the plaintiffs that the tenant had been making a $150 per month contribution to the rent and had been told she was no longеr allowed to do so or she would lose all of her Section-8 funding. Llewellyn-Jones alleges that this was a deliberate attempt to mislead her and stop her from discovering the scheme. Kathryn Llewellyn-Jones says that a third party she asked to investigate reported that the tenant stated that she had reserved the property in August 2011 and did not move in or begin paying rent until the end of November 2011. The tenant stated that the home was not habitable when she moved in, and the rent for the property had always been $750 per month and she had never contributed $150 or been ordered to stop paying a contribution per month toward the rent.
The plaintiffs make similar allegations about several other homes that plaintiffs Kathryn and Mark Llewellyn-Jones purchased, including properties at 2938 Bur-lingame Street and 18257 Lauder Street in Detroit. Plaintiffs Caroline Jones purchased three homes, plaintiffs Peter and Lesley Green purchased a home at 19013 Indiana Street, Said Fadel purchased a home located at 14846 Washburn Street, and plaintiffs Warren Grover and Margaret Joyce Grover purchased homes located at 5290 Balfour, 18940 Sawyer, and 7666 Brace Streets, all in Detroit. They make similar allegations concerning false leases and representations about repairs, tenants, and rates of return.
The plaintiffs advance thirteen counts in their complaint: fraudulent misrepresentation as to all defendants (count I); fraudulent inducement as to all defendants (count II); breach of contract as to all defendants (count III); unjust enrichment as to all defendants (count IV); “Alter Ego” (count V); “Corporate Officer Responsibility/Liability” (count VI); “Alter Ego” as to the attorney defendants (count VII); “Corporate Officer Responsibility/Liability” as to the attorney defendants (count VIII); common law conversion as to all defendants (count IX); statutory conversion as to all defendants (count X); violation of the Michigan Uniform Trade Practices Act and Consumer Protection Act as to all defendants (count XI); violation of the Racketeer Influenced and Corrupt Organization Act (RICO) as to all defendants (count XII); and intentional infliction of emotional distress as to all defendants (count XIII). All four groups of defendants argue that counts I, II, IX, X, XI and XII must be dismissed because they
II.
The defendants also contend that paragraphs 59 through 62 of the complaint should be stricken because the allegations of the defendants’ involvement with Hezbollah have no relation to the claims, and are included to harass and embarrass the defendants. Those paragraphs allege that certain defendants support Hezbollah and openly attack Jewish people and that the defendants have laundered the plaintiffs’ money to support terrorist activities carried out by Hezbollah. Federal Rule of Civil Procedure 12(f) states that “[t]he court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). The word “scandalous” in Rule 12(f) “generally refers to any allegation that unnecessarily reflects on the moral character of an individual or states anything in repulsive language that detracts from the dignity of the court.” Pigford v. Veneman,
There are several reasons for granting a motion to strike. One is where the complaint contains immaterial allegations that have no bearing on the subject matter of the litigation. Reeves v. Wallington, 06-10326,
III.
The remaining parts of the motion are based on Federal Rule of Civil Procedure 12(b)(6). “The purpose of Rule 12(b)(6) is to allow a defendant to test whether, as a matter of law, the plaintiff is entitled to legal relief if all the facts and allegations in the complaint are taken as true.” Rippy ex rel. Rippy v. Hattaway,
To survive a motion to dismiss, [a plaintiff] must plead “enough factual matter” that, when taken as true, “state[s] a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,550 U.S. 544 , 556, 570,127 S.Ct. 1955 ,167 L.Ed.2d 929 (2007). Plausibility requires showing more than the “sheer possibility” of relief but less than a “probable]” entitlement to relief. Ashcroft v. Iqbal, [556 U.S. 662 , 678],129 S.Ct. 1937 ,173 L.Ed.2d 868 (2009).
Fabian v. Fulmer Helmets, Inc.,
Under the new regime ushered in by Twombly and Iqbal, pleaded facts must be accepted by reviewing court's but conclusions may not be unless they are plausibly supported by the pleaded facts. “[B]are assertions,” such as those that “amount to nothing more than a ‘formulaic recitation of the elements’ ” of a claim, can provide context to the factual allegations, but are insufficient to state a claim for relief and must be disregarded. Iqbal,
A. Economic loss doctrine
The four groups of defendants each argue that the plaintiffs’ tort claims— counts I (fraudulent misrepresentation), II (fraud in the inducement), IX (common law conversion), X (statutory conversion), XI (unlawful trade practices and Michigan Consumer Protection Act), and XII (Civil Racketeering/RICO) — should be dismissed under Michigan’s economic loss doctrine. The economic-loss doctrine is a “judicially created doctrine” that prohibits a party to a contract from bringing tort claims that are factually indistinguishable from breach of contract claims. Detroit Edison Co. v. NABCO, Inc.,
The doctrine draws a line between breach of contract claims arising from commercial transactions, where commercial and contract law protect the parties’ economic expectations, and tort actions intended to remedy unanticipated injuries as a result of conduct that violates a separate legal duty apart from the contract. Neibarger v. Universal Cooperatives, Inc.,
However, Michigan courts have recognized an exception to the economic loss doctrine for the intentional tort of fraud in the inducement. “Fraud in the inducement ... addresses a situation where the claim is that one party was tricked into contracting. It is based on pre-contractual conduct which is, under the law, a recognized tort.” Huron Tool & Eng’g Co.,
To establish fraud in the inducement, a party must show that “ ‘(1) the
Here, the defendants contend that the plaintiffs’ tort claims do not fall within the fraudulent inducement exception because the alleged fraud is not “extraneous to the contract.” That is one way to read the complaint, but not the only way. The plaintiffs allege that the defendants marketed the homes primarily to foreign investors who were unable or unlikely to view the properties prior to purchase. Compl. ¶ 37. On the few occasions that foreign investors visited Detroit, the defendants showed the investors, including the plaintiffs, properties that had been refurbished, but were not actually the properties for sale. Ibid. The plaintiffs also allege that the defendants mailed the plaintiffs fraudulent photos of the insides of homes that were different than the homes for sale. Ibid. Additionally, the plaintiffs allege that the defendants supplied forged lease documents to prospective buyers, lied to prospective buyers about the conditions of properties, and supplied false information regarding rental payments and amounts. Compl. ¶ 41. These allegations of “pre-contractual” misconduct is a “recognized” tort under the law. Huron Tool,
Additionally, the complaint sets forth sufficient facts to support each element of a fraud in the inducement claim. The complaint alleges that the defendants made multiple material representations to the plaintiffs to induce them to purchase the Detroit properties, i.e., that the properties were currently tenanted, the tenants were paying a specific amount of monthly rent on executed, valid leases, the homes were Section 8 approved, the properties were newly and fully refurbished, and the properties would generate a specific amount of income and percentage rate of return on initial investment. Compl. ¶ 248. The complaint also alleges that these representations were false: the properties were either not leased or the tenant was paying a significantly lower amount of rent than represented to the plaintiffs, ibid.; the properties were not refurbished, Section 8 approved, or generating the monthly income and percentage of return fraudulently represented by the defendants, id. ¶ 249. The complaint also alleges that the defendant knew that the representations were false and made the representations to further their fraudulent scheme with the intention that the plaintiffs would act upon them. Id. ¶ 251-53. The plaintiffs allege that they acted upon the defendants’ representations: they purchased the homes marketed to them and paid for repairs, evictions, and management fees. Id. ¶ 254. Absent these false statements, the plaintiffs say they would never have purchased the properties. Id. ¶ 255. Finally, the plaintiffs allege that the fraudulent misrep-
“Fraudulent inducement involves a general duty to avoid wrongful conduct that induces a party to enter into a contract.” Onyx Envtl. Servs., LLC v. Maison,
B. Sufficiency of fraud allegations
The four groups of defendants also argue that the counts of the complaint alleging fraud are not specific enough to meet the requirements of Federal Rule of Civil Procedure 9(b). When alleging fraud in a federal complaint, a party must state “with particularity” the circumstances constituting the fraud. Fed.R.Civ.P. 9(b); see also Bennett v. MIS Corp.,
1. Group pleading
The defendants argue that the allegations of fraud are insufficient because the complaint does not identify with specificity the parties making the fraudulent statements. The defendants’ contention is well-taken. The complaint is rife with undifferentiated references to the “Defendants,” and the “Ponzi Scheme Defendants.” It is difficult to parse the allegations against each individual defendant because in many instances the complaint groups all of the defendants together.
Under Hoover v. Langston Equipment Associates, Inc.,
But “[w]hen faced with a motion to dismiss for failure to plead fraud ‘with particularity’ as required by Rule 9(b) ..., ‘a court must factor in the policy of simplicity in pleading which the drafters of the Federal Rules codified in Rule 8.’ ” Whalen v. Stryker, Corp., 783 F.Supp.2d
In their 116-page complaint, the plaintiffs exhaustively detail allegations of a scheme to defraud that involved the officers and employees of Metro Property Group, LLC, Metro Property Management, LLC, Global Power Equities, LLC and Apex Equities, LLC. The complaint describes how the plaintiffs discovered the purported scheme and each defendants’ alleged role. For instance, the plaintiffs allege that Sameer Beydoun, Ali Beydoun, David Makki, and Kathy Messics supplied fraudulent, forged lease documents for non-existent tenants to prospective buyers and current homeowners; defendants Sa-meer Beydoun, Kathy Messics, and George Vanderburg forged the leases; defendants Sameer Beydoun, Ali Beydoun, David Makki, and Kathy Messics lied to prospective buyers and homeowners about the conditions of properties; and defendant Chris Picciurro routinely supplied false information regarding rental payments and amounts. Compl. ¶ 41. Additionally, the plaintiffs allege that Tarek Baydoun covered up the fraud by billing several plaintiffs for legal work such as fraudulent evictions of non-existent tenants. ¶ 53. The complaint also describes in detail the relationship between the corporate defendants and individual defendants. ¶ 44. The plaintiffs support these general allegations of fraud through specific examples of how each defendant attempted to conceal the fraud after the plaintiffs suspected that they had been tricked into purchasing virtually worthless homes. ¶¶ 63-246. The plaintiffs also attach marketing materials, emails, and management agreements detailing communications between the plaintiffs and various defendants. ¶¶ 63-246. These allegations provide a general framework for relevant discovery and are sufficient to alert the defendants “ ‘as to the particulars of their alleged misconduct’ ” so that they may respond to the complaint. Chesbrough v. VPA, P.C.,
The complaint alleges that Metro Property Group and Sameer Beydoun created information sheets that falsely represented to the plaintiffs that the properties they purchased were currently tenanted, the tenants were paying a specific amount of monthly rent pursuant to executed valid leases, the homes were Section 8 approved, the properties were newly and fully refurbished, and the properties would generate a specific amount of income and percentage rate of return on initial investment. Compl. ¶248. The plaintiffs allege that
It is a closer call as to the remaining defendants. The plaintiffs allege that Metro Property Management, LLC, Global Power Equities, LLC, Apex Equities, LLC, Ali Beydoun, Mike Alaweih, David Makki, Chris Picciurro, Kathy Messics, George Vanderburg, and Tarek M. Bay-doun marketed the homes to the plaintiffs using the property information sheets that Sameer Baydoun and Metro Property Group created, informed the plaintiffs that the properties were either already occupied or Section 8 approved and occupied, and the plaintiffs relied on this information when they purchased the homes. ¶¶ 90, 91, 110, 111, 132, 133, 154, 155, 173, 174. These allegations do not specify what each defendant said or their role in marketing the homes. But another section of the complaint alleges that Sameer Beydoun, Ali Beydoun, David Makki, and Mike Alaweih induced the plaintiffs into purchasing the homes with promises that the homes were habitable, tenanted, turnkey properties that met Section 8 requirements. ¶ 45.
The most detailed allegations involve statements that these defendants made after the plaintiffs discovered that the homes fell far short of what was marketed to them. The defendants contend that those allegations of post-sale misconduct, at most, suggest that these defendants misrepresented facts to conceal a prior fraud, not to induce the plaintiffs to purchase the homes. That may be true, but it also suggests that the defendants may have played a role in conspiring to commit fraud. The allegatiоns in the complaint that those defendants fraudulently marketed the homes to the plaintiffs states enough factual matter that, when taken as true, “state[s] a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
Nonetheless, the complaint is wanting of allegations as to certain other defendants. One of them is Tarek Bay-doun. The complaint contains four allegations against Tarek Baydoun: (1) Baydoun participated in marketing the homes to potential buyers, Compl. ¶ 40; (2) Baydoun billed several plaintiffs for fraudulent evictions to cover up the defendants’ fraudulent actions, id. at ¶ 53; (3) Baydoun threatened the plaintiffs with criminal prosecution and ignored their email messages when they asked him questions about the fraudulent evictions, ibid.; and (4) Baydoun supports Hezbollah, id. at ¶ 59.
The allegations that Baydoun participated in marketing the homes to potential buyers is insufficient to state a claim for fraud for at least three reasons. First, the allegations are insufficient to demonstrate that Baydoun made any representations: the complaint only alleges that Baydoun “appears on videos,” “laughing it up.” Compl. ¶40. Second, although the complaint alleges that Baydoun participated in the fraudulent marketing scheme, the plaintiffs do not allege that Baydoun marketed the homes to the plaintiffs in this case or that the plaintiffs viewed the videos; therefore, the plaintiffs could not have relied on anything Baydoun might have said. Third, the allegations are insufficient under Rule 9(b) because the plaintiffs have not alleged which plaintiffs, if any, viewed the videos, when, or where.
Likewise, the allegations that Ta-rek Baydoun threatened the plaintiffs with criminal prosecution and ignored their email messages does not state a claim for fraud because the plaintiffs have not explained how this statement is false or how the plaintiffs relied on the representation to their detriment. Failing to return emails does not state a claim for fraud because not speaking cannot constitute a representation.
The allegation that Tarek Baydoun supports Hezbollah is unrelated to any of the plaintiffs’ causes of action and will be struck from the complaint.
The complaint fails to state a fraud claim against defendant Tarek Baydoun, and therefore counts I and II will be dismissed as to him.
The allegations against the Allen defendants are even more anemic. Those allegations consist of claims that (1) Tarek Baydoun was “Of Counsel” to the Allen Brothers, PLLC; (2) the Allen Brothers should have been aware that their “Of Counsel” attorney, Tarek Baydoun, was engaged in illegal and fraudulent behavior; (3) James Allen sent threatening messages to the plaintiffs and attempted to cover up the “Ponzi Scheme fraud;” (4) James Allen, John Allen, and Allen Brothers, PLLC attempted to conceal defendant Tarek Baydoun’s continuing relationship with them by removing his name from the Allen Brothers, PLLC’s website; (5) Tarek Bay-doun nevertheless continued to use the law firm’s resources; and (6) James Allen acted in concert with Tarek Baydoun in the “conspiracy” and to further the “Ponzi scheme fraud.” Compl. ¶¶ 52-56.
These allegations are conclusory and therefore do not satisfy Rule 9(b) on any of the fraud allegations, and they do not implicate any of the Allen defendants in any of the alleged wrongdoing of the other defendants. The Allen defendants’ “of counsel” relationship with Tarek Baydoun furnishes no basis for liability because the plaintiffs have not stated a fraud claim against Baydoun. Removing Baydoun’s name from the Allen defendants’ website fails to state a claim for fraud because that conduct cannot amount to a representation. Even if it could be considered such, the plaintiffs do not allege that they relied on it when deciding to purchase any of the properties. The allegation that James Allen sent threatening messages to the plaintiffs, acted in concert with Tarek Baydoun, and attempted to cover up the “Ponzi Scheme fraud” do not satisfy Rule 9(b) because the plaintiffs failed to allege the time, place, and content of the alleged representations. The complaint contains no detail as to what James Allen said; to whom; the medium through which the threats were communicated; or whether the plaintiffs relied on the threatening messages when they purchased the properties. Chesbrough v. VPA, P.C.,
The complaint does not allege plausibly any other wrongdoing by the Allen defendants, and they were not parties to any of the contracts. Therefore, their motion to dismiss the complaint will be granted as to them.
Under Michigan law, to state a claim of fraud the plaintiffs must plead “ ‘(1) [t]hat defendant made a material representation; (2) that it was false; (3) that when he made it he knew that it was false, or made it recklessly, without any knowledge of its truth, and as a positive assertion; (4) that he made it with the intention that it should be acted upon by plaintiff; (5) that plaintiff acted in reliance upon it; and (6) that he thereby suffered injury.’ ” Hi-Way Motor Co. v. Int’l Harvester Co.,
The defendants argue that the plaintiffs cannot plausibly allege the element of reasonable reliance because the contract contains a merger clause and declares that the properties were sold in “As Is Condition.” They rely on the notion that “[a] misrepresentation claim requires reasonable reliance on a false representation.” Nieves v. Bell Indus., Inc.,
10. Condition of Premises. All properties will be sold in As Is Condition.
12. Binding nature and final agreement. This Agreement shall be binding on and inure to the benefit of the parties and their respective heirs, personal representatives and assigns. This Agreement sets forth the entire agreement between the parties and may not be amended, modified, altered or changed except in writing signed by the parties,
[proper cite] Dkt. # 35-2 at 2.
There is some support for the idea that a merger and integration clause renders reliance on pre-contract representations unreasonable per se. In Watkins & Son Pet Supplies v. Iams Co.,
This case, then, is governed by the rule that the presence of a merger clause in a written contract will not preclude a claim for fraud in the inducement where the plaintiff can show that it would have avoided the agreement entirely had it known that the defendant’s fraudulent representations in fact were false. Custom Data Solutions, Inc. v. Preferred Capital,
[T]here is an important distinction between (a) representations of fact made by one party to another to induce that party to enter into a contract, and (b) collateral agreements or understandings between two parties that are not expressed in a written contract. It is only the latter that are eviscerated by a merger clause, even if such were the product of misrepresentation. It stretches the [KSL Recreation ] holding too far to say that any pre-contractual factual misrepresentations made by a party to a contract are wiped away by simply including a merger clause in the final contract.
LIAC, Inc. v. Founders Ins. Co.,
In this case, the plaintiffs contend that the defendants’ misrepresentations induced them to enter into the purchase agreements for the Detroit properties. The plaintiffs’ allegations that they would not have entered into those agreements but for the misrepresentations about the properties, if true, would invalidate the entire contract, including the merger clauses. The merger clause and clause that renders the properties sold in “As in Condition” therefore do not render the рlaintiffs’ reliance on prior representations unreasonable as a matter of law.
3. Promise of future performance
The defendants also argue that the allegations of future promises do not satisfy the material misrepresentation element of a common law fraud claim. Michigan law does in fact require that actionable misrepresentations must relate to an existing or past fact; promises relating to future actions when unfulfilled do not constitute fraud. Hi-Way Motor Co.,
The complaint alleges that the defendants told the plaintiffs that the properties would provide specific gross yearly income and a specific yearly rate of return. See, e.g., Compl. ¶ 64. The complaint also alleges that the defendants knew that those representations of specific gross yearly income and annual rate of return were false, made the representations with the intent
C. Count III: Breach of contract
The defendants argue that the “As Is” and merger clauses bar the plaintiffs’ breach of contract claims. The plaintiffs allege that the defendants offered to sell and the plaintiffs agreed to purchase refurbished, tenanted, guaranteed income generating, Section-8 approved properties. Compl. ¶ 280. But the defendants point out that the purchase agreements do not contain warranties regarding renovation, tenancy, or anticipated income. The only clause that relates to the condition of the houses states that the properties would be sold in “As Is Condition.”
The law is quite clear that the parties’ intent must govern a breach of contract claim, and the Court must ascertain the intent of the parties by examining the contract language. Sheldon-Seatz, Inc. v. Coles,
The plaintiffs’ allegations that the defendants promised to refurbish the homes, and guaranteed tenancy and specific income are inadmissible to alter the terms of the contract. Id. at 492,
Star Insurance Company does not support the plaintiffs’ contention, either. In that case, the court recognized that a plaintiff may bring a separate and distinct cause of action for fraud in the inducement despite the existence of a merger clause. The court did not hold that proof of fraud would allow contract reformation. Although the plaintiffs’ cause of action for fraud in the inducement may survive the parties’ merger clause, their breach of contract claim does not.
But the allegations in the breach of contract count are somewhat obscure. The plaintiffs allege that they “purchased properties and management services” from the defendants, as if there were a single agreement. Compl. ¶ 271. It appears, however, that the agreement to manage the rental properties was separate from the purchase-and-sale contract, and established a distinct obligation to manage and maintain the properties. The complaint alleges that those services were not performed; the “As Is” and merger clauses have nothing to do with that obligation. That claim may proceed, but only as to the signatories to the management contracts.
The parties to all of the management agreements are the plaintiff signatory and Metro Property Management. It is true that some of the individual defendants signed the contracts on behalf of the corporate defendants. However, “[ujnless otherwise agreed, a person making or purporting to make a contract with another as agent for a disclosed principal does not become a party to the contract.” Riddle v. Lacey & Jones,
The plaintiffs contend that the Court should not dismiss count III against the individual defendants because the complaint alleges an alter ego theory of liability. But, as explained below in more detail, the plaintiffs have not stated sufficient factual allegations to support that theory. The complaint does allege that Sameer Beydoun, Ali Beydoun, and David Makki “exercised dominion and control over” over the corporate defendants; commingled their identifies, finances, business practices, and policies; and the companies did not maintain a separate corporate existence from the individual defendants. Compl. ¶¶282, 284.' But “[t]hese ‘naked assertions devoid of further factual enhancement’ contribute nothing to the sufficiency of the complaint.” Flagstar Bank, F.S.B.,
The breach of contract claim will be dismissed, except as to the claim that defendant Metro Property Management breached the various management agreements.
D. Count IX (common law conversion) and X (statutory conversion)
The defendants argue that the plaintiffs cannot state claims for statutory or common law conversion because the plaintiffs’ conversion claims are not separate and distinct from their breach of contract claims. The plaintiffs respond that conversion occurred when the defendants charged (and the plaintiffs paid) for repairs and evictions that never were performed.
Conversion arises from “any distinct act of domain wrongfully exerted over another’s personal property in denial of or inconsistent with the rights therein.” Foremost Ins. Co. v. Allstate Ins. Co.,
(a) Another person’s stealing or embezzling property or converting property to the other person’s own use.
(b) Another person’s buying, receiving, possessing, concealing, or aiding in the concealment of stolen, embezzled, or converted property when the person buying, receiving, possessing, concealing, or aiding in the concealment of stolen, embezzled, or converted property knew that the property was stolen, embezzled, or converted.
Mich. Comp. L. § 600.2919a. Under Michigan law, a plaintiff may sue “for the conversion of funds that were delivered to the defendant for a specified purpose, but that the defendant diverted to his or her own use.” Tooling Mfg. & Technologies Ass’n v. Tyler, No. 293987,
The defendants are correct that a conversion claim “cannot be brought where the property right alleged to have been converted arises entirely from the [plaintiffs] contractual rights.” James T. Scatuorchio Racing Stable, LLC v. Walmac Stud Mgmt., LLC,
The plaintiffs have not identified such a “separate duty.” They allege only that, in an effort to conceal the fraudulent scheme, the defendants charged the plaintiffs for repairs that were never made and court fees and eviction costs even though no one lived at the properties. Compl. ¶¶ 39, 86, 104, 106, 127, 140 — 42, 145, 211, 241. That states no more than that the defendants did not live up to their property management obligations. If it were not for the parties’ management agreement, the defendants would have had no legal obligation to make repairs or initiate legal proceedings. The gravamen of their complaint is that the defendants failed to manage the properties in conformity with the parties’ contractual agreement and charged the plaintiffs for management services that were unnecessary or never completed. That does not state a cause of action for conversion.
E. Count XI (Unlawful Trade Practices and Michigan Consumer Protection Act)
The defendants argue that the plaintiffs have failed to state a claim under the Michigan Unlawful Trade Practices Act because, by its express terms, the Act only applies to the sale of goods. Mich Comp. Laws § 445.101 (“AN ACT to define certain unlawful trade practices connected with the sale or other transfer; or with the purchase for another of goods, wares or merchandise.... ”). They also contend that the Michigan Consumer Protection Act does not apply to the plaintiffs because they are investors and purchased the properties for business purposes, not as consumers. The plaintiffs argue that they can pursue a claim under the MCPA because they are not incorporated as businesses and they did not purchase the homes as businesses. The defendants have the better argument.
The thrust of the complaint is that the plaintiffs’ investment in rental properties in Detroit resulted in a loss to them, either because the defendants misrepresented the condition of the properties and the likely rate of return or they breached their contracts. Under Michigan law, “if an item is purchased primarily for business or commercial rather than personal purposes, the MCPA does not supply protection.” Zine v. Chrysler Corp.,
The plaintiffs have failed to state a valid claim for relief in Count XI of the complaint, which will be dismissed.
F. Count XII (RICO)
The plaintiffs allege in their complaint that the defendants all violated the Racketeer Influenced and Corrupt Organizations (RICO) Act by prosecuting their scheme to defraud individuals, including the plaintiffs, who purchased residential investment rental properties in Detroit. The defendants, in their combined arguments, contend that the RICO count is not pleaded adequately because the predicate acts of fraud are not stated with particularity, and the plaintiffs have not pleaded facts showing the existence of an “enterprise” separate from the pattern of illegal activity. They also argue that the “pattern” element is not pleaded adequately because there is no fact that shows a continuity of activity.
Subsection 1962(c) makes it “unlawful for any person employed by or associated with any enterprise engaged in” activities affecting “interstate or foreign commerce ... to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity.” 18 U.S.C. § 1962(c). To state a claim under subsection 1962(c), the plaintiff must plead “(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.” Sedima, S.P.R.L. v. Imrex Co.,
1. Allegations of fraud
When the predicate acts are based on fraud, Federal Rule of Civil Procedure 9(b)’s heightened pleading requirement applies. Brown v. Cassens Transp. Co.,
2. Enterprise
RICO defines an “enterprise” as “any individual, partnership, corporation, association, or other legal entity and any union or group of individuals associated in fact although not a legal entity.” 18 U.S.C. § 1961(4); see also United States v. Turkette,
(1) an ongoing organization with some sort of framework or superstructure for making and carrying out decisions; (2) that the members of the enterprise functioned as a continuing unit with estab*791 lished duties; and (3) that the enterprise was separate and distinct from the pattern of racketeering activity in which it engaged.
Ouwinga v. Benistar 419 Plan Servs., Inc.,
The defendants contend that the enterprise element requires a showing of facts that establish an independent structure outside of the alleged racketeering activity and evidence of a chain of command or other evidence of a hierarchy. It is true that the “enterprise” and “pattern” elements are distinct. Turkette,
In Boyle v. United States,
The plaintiffs have pleaded sufficient facts to establish an “enterprise.” They allege that the defendants have a common purpose (to defraud investors through a scheme involving the purchase, sale, and management of foreclosed properties in the Detroit area); a relationship (Sameer Beydoun, Ali Beydoun, David Makki, and Kathy Messics supply fraudulent, forged leases to prospective buyers; the fraudulent lease documents are forged by defendants Sameer Beydoun, Kathy Messics, and George Vanderburg; defendants Sa-meer Beydoun, Ali Beydoun, David Makki, and Kathy Messics lie to the tenants about the conditions of the properties; and Chris Picciurro supplies false information about rental payments and amounts; and Tarek Baydoun performed fraudulent evictions in order to perpetuate the fraud); and longevity (the complaint alleges that the mis
The allegations of an entеrprise also are sufficiently distinct from the pattern of racketeering activity. A discrete set of facts is not necessary, since “proof used to establish these separate elements may in particular cases coalesce.” Turkette,
3. Pattern of activity
The plaintiffs allege predicate acts of mail fraud and wire fraud. A person commits mail fraud if he devises a scheme to defraud, executes the scheme using the mail or causing it to be used, and acts with the intent to defraud. 18 'U.S.C. § 1341; United States v. Jones,
To plead a pattern of racketeering activity, the plaintiff must аllege at least two predicate acts within ten years of each other, although that may not necessarily be sufficient. Brown v. Cassens Transp. Co.,
“The relationship prong is satisfied by showing the predicate acts have ‘similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events.’ ” Ibid. (quoting H.J. Inc.,
“The continuity prong of the test is satisfied by demonstrating either ‘a close-ended pattern (a series of related predicate acts extending over a substantial period of time) or an open-ended pattern (a set of predicate acts that poses a threat of continuing criminal conduct extending beyond the period in which the predicate acts were performed).’ ” Ibid. (quoting Heinrich v. Waiting Angels Adoption Servs.,
The defendants contend that the allegations of a threat of continuing criminal conduct are vague and conclusory. But they have not cited the governing precedent accurately, omitting the proposition that continuity can be shown through longevity. Even if the allegations of continuing misconduct are insufficient, the plaintiffs have alleged a pattern of misconduct involving nearly a dozen properties over a long period of time. That is sufficient to satisfy the continuity element.
The RICO count is pleaded adequately as to the Metro Property defendants, the Beydoun defendants, and the Beydoun Law defendants.
G. Count IV: Breach of implied contract/quasi-contract/unjust enrichment
The defendants argue that the implied contract claim fails as a matter of law because the parties signed an express contract and cannot plead claims for both breach of contract and implied contract. That is not exactly correct. A party cannot recover under theories of quantum meruit or unjust enrichment when a transaction is governed by a valid contract. Morris Pumps v. Centerline Piping, Inc.,
Alternatively pleading an express contract and implied contract (whether styled as unjust enrichment or quantum meruit) is allowed when, for instance, there is a dispute between the parties as to whether an express agreement exists. Cascade Elec. Co. v. Rice,
That is not the case here, though. The parties do not dispute the existence of the purchase agreements. A plaintiff can only plead breach of contract and implied contract claims in the alternative if there is doubt as to the existence of a contract. Ford Motor Co. v. Ghreiwati Auto,
The plaintiffs attempt to work around this limitation by arguing that an implied contract claim is permissible because, if proven, the allegations of fraudulent misrepresentation would rеnder the parties’ contract void. But that does not render the contract doubtful or nonexistent. And by advancing this argument, it is the plaintiffs, not the defendants, who deny the existence of the contracts. Moreover, accepting the plaintiffs’ position would conflate the tort and contract claims; if the plaintiffs succeed on their fraud claims, their remedy is in tort, not in quasi contract. Michigan courts have emphasized the importance of maintaining distinct boundaries between contract and tort remedies; “contract law and tort law are separate and distinct, and the courts should maintain that separation in the allowable remedies.” Huron Tool & Eng’g Co.,
Count IV of the amended complaint will be dismissed.
H. Count XIII: Intentional infliction of emotional distress
The defendants contend that the count alleging intentional infliction of emotional distress fails to state a claim for relief as a matter of law. Although the Michigan Supreme Court has not yet recognized the tort of intentional infliction of emotional distress, the Michigan Court of Appeals has consistently recognized it. Mroz v. Lee,
Count XIII of the complaint simply recites the elements of a claim for intentional infliction of emotional distress without any factual elaboration. One paragraph of that count incorporates by reference the earlier paragraphs in the complaint. But those allegations describe a fraud scheme that duped the plaintiffs into investing money in the Detroit residential -real estate rental market. Those allegations, if true, would establish that the defendants’ conduct was unlawful, and even criminal. But “[i]t is not enough that the defendant has acted with an intent that is tortious or even criminal, or that he has intended to inflict emotional distress, or even that his conduct has been characterized by ‘malice,’ or a degree of aggravation that would entitle the plaintiff to punitive damages for another tort.” Graham v. Ford,
I. Counts VI and VIII (Corporate Officer Responsibihty/Liability)
The individual defendants contend that the Court should dismiss count VI, “corporate officer responsibility/liability,” against defendants Sameer Beydoun, Ali Beydoun, David Makki, Mike Alaweih, and Chris Picciurro. Dkt. # 36 at 28. The same argument is made as to count VIII by defendants John Allen, James Allen, and Tarek Baydoun. The Court agrees. The plaintiffs insist that the defendants who are corporate officers may be held liable for their individual tortious conduct. That proposition is beyond debate. “Michigan law has long provided that corporate officials may.be held personally liable for their individual tortious acts done in the course of business, regardless of whether they were acting for their personal benefit or the corporation’s benefit.” Dep’t of Agric. v. Appletree Mktg., L.L.C.,
But “corporate officer responsibility/liability” is not a cause of action. It is not even a theory of liability, so stated. The individual defendants may be held accountable in tort for their personal conduct, and that conduct may render the various corporate defendants liable as well. But the complaint does not plead facts from which one might infer joint enterprise liability, in which the conduct of one defendant — corporate or individual — may be imputed to all the defendants. See McLean v. Wolverine Moving & Storage Co.,
The Court will dismiss counts VI and VIII for failure to state a claim upon which relief can be granted.
J. Count V (Alter Ego /Piercing the Corporate Veil) and Count VII: Alter Ego /Piercing the Corporate Veil (as to attorney defendants)
The individual defendants contend that count VII, “alter ego/piercing thé corporate veil,” fails as a matter of law because veil piercing is not a distinct cause of action, and the complaint pleads no facts that would support a finding that the corporate structures should not be respected. The same flaws apply to count V. An alter ego claim is based on the equitable doctrine that courts may sometimes disregard the formalities of business structures when those structures are misused for the purpose of avoiding a company’s legal obligations. See NLRB v. Allcoast Transfer, Inc.,
The plaintiffs allege that Metro Property Group, LLC, Metro Property Management, LLC, Global Power Equities, LLC, and Apex Equities, LLC were the alter egos of Sameer Beydoun, Ali Beydoun, and David Makki; and that Baydoun Law Group, PLLC and Allen Brothers, PLLC were the alter egos of John Allen, James Allen, and Tarek Baydoun. The allegations supporting those conclusions are that the individuals commingled their identities, finances, and business practices; they did not maintain separate identities; and they failed to observe internal legal formalities. The plaintiffs argue that the Court should disregard the “corporate fiction” and hold the individuals responsible for the legal obligations of the limited liability companies.
Under Michigan law, separate corporate structures are not “fictions”; instead, there is a presumption that the corporate form will be respected. Seasword v. Hilti,
A plaintiff seeking to penetrate a corporate structure and access individual shareholders’ assets must plead facts that show that (1) the corporate entity is a mere instrumentality of another entity or individual; (2) the corporate entity , was used to commit a fraud or wrong; and (3) the plaintiff suffered an unjust loss. Nogueras v. Maisel & Assocs. of Mich.,
The plaintiffs also allege that Ta-rek Baydoun is the sole member of Bay-doun Law Group; PLLC d/b/a/ The Meridian Law Group. They also allege that Sameer Beydoun, Ali Beydoun, and David Makki are the sole owners, officers, and directors of Metro Property Group, LLC, Metro Property Management, LLC, Global Power Equities, LLC, and Apex Equities, LLC. However, “Michigan courts typically consider corporations legally distinct from their shareholders, even if a single shareholder owns all the stock.” Dept. of Consumer Indus. Servs. v. Shah,
The complaint contains no facts to support an alter ego theory of liability either in count Vpr VII.
IV.
Paragraphs 59 through 62 of the complaint contain immaterial allegations that have no bearing on the subject mаtter of the litigation. Those paragraphs will be struck.
The plaintiffs have pleaded valid claims based on the allegations of fraud relating to the sale of the rental properties. However, the complaint fails to state claims of breach of contract, except with respect to the post-sale management contracts. Similarly, the plaintiffs have not successfully pleaded claims for conversion, unjust enrichment and quasi contract, violation of the Michigan Unfair Trade Practices and Michigan Consumer Protection Acts, intentional infliction of emotional distress, corporate officer responsibility, and alter ego liability.
Accordingly, it is ORDERED that the defendants motions to strike and dismiss the complaint [dkt. # 35, 36, 59, 77] are GRANTED IN PART AND DENIED IN PART.
It is further ORDERED that counts IV (breach of implied contract), V (alter ego/piercing the corporate veil), VI (corporate officer responsibility/liability), VII (alter ego/piercing the corporate veil as to the attorney defendants), VIII (corporate officer/responsibility liability as to the attorney defendants), IX (common law conversion), X (statutory conversion), and XI (Unlawful Trade Practices and Michigan Consumer Protection Act), and XIII (intentional infliction of emotional distress) of
It is further ORDERED that count III of the complaint alleging breach of the sales contracts is DISMISSED WITH PREJUDICE, but the plaintiffs may proceed under that count on their claims for breach of the management contracts as to defendant Metro Property Management, LLC, ONLY.
It is further ORDERED that all counts of the complaint are DISMISSED WITH PREJUDICE against defendants James Allen, John Allen, and Allen Brothers Attorneys and Counselors Professional Liability Company.
It is further ORDERED that counts I and II of the complaint are DISMISSED WITH PREJUDICE against defendant Tarek Baydoun.
It is further ORDERED that the motions are DENIED in all other respects.
It is further ORDERED that counsel for the parties attend a case management conference on June 4, 2014 at 3:00 p.m.