Opinion
Cause No. 1:04-CV-443-TS.
April 1, 2005
MEMORANDUM OF DECISION AND ORDER
This matter is before the Court on Defendant Medical Capital Corporation, Inc.'s Motion to Dismiss [DE 34], filed on January 27, 2005. Medical Capital seeks dismissal under Federal Rules of Civil Procedure 12(b)(2) for lack of personal jurisdiction and 12(b)(6) for failure to state a claim upon which relief may be granted.
BACKGROUND
On November 23, 2004, the Plaintiff, Employee Benefit Managers Incorporated of America (EBM), filed a Complaint in this Court against A Medex Transition Company Ltd. (AMTAC) and its officers, Darren Thomas, Mary Rae Armacolla, and Margaret Towey (AMTAC Defendants). The Plaintiff also named General Mediterranean Holdings SA (Gen Med) and its officers, Nadhmi S. Auchi and Mohamed Bayoumi and an affiliate, GMISS SA (Gen Med Defendants). The Plaintiff sued Tower Risk Management Holdings Limited, Tower Risk Management Limited and their principal, Paul Towey, and representative, Susan Hampson (Tower Defendants). The Plaintiff also asserted claims against Reliance Partners, Reliance Partners LLC, Christopher Haskins (Reliance Defendants), Medical Capital Corporation, Inc., (Medical Capital) and U.S. Capital, Inc. The Plaintiff submitted that the Court had jurisdiction pursuant to 28 U.S.C. § 1332.
In its Complaint, the Plaintiff asserts that the AMTAC and Gen Med Defendants fraudulently induced the Plaintiff to enter into the contract, that AMTAC breached a contract, that the Plaintiff relied on material misrepresentations made by all the Defendants, and that all the Defendants committed fraud against EBM. The Plaintiff seeks damages and declaratory relief.
On December 22, 2004, the Reliance Defendants filed their Answer. On January 11, 2005, the Plaintiff moved for an entry of default against AMTAC and Tower Risk Management Holdings Limited and the Clerk made an entry of default. On February 3, 2005, the entry of default was set aside upon a joint motion of the parties.
On January 27, 2005, Medical Capital moved to dismiss the Complaint against it for failure to state a claim and for lack of personal jurisdiction. Medical Capital filed an Affidavit in support of its argument that the Court did not have jurisdiction over it. The Plaintiff responded on February 18, 2005, providing its own affidavit in support of personal jurisdiction. On February 24, 2005, Medical Capital replied.
STANDARD OF REVIEW
A. Personal Jurisdiction
A complaint need not allege facts establishing personal jurisdiction. Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). If a defendant moves to dismiss for lack of personal jurisdiction, however, the plaintiff bears the burden of establishing jurisdiction. Id. Where the parties have not requested an evidentiary hearing, but have filed written submissions and affidavits, as they have here, the plaintiff is only required to make out a prima facie case of personal jurisdiction. Id.; Nelson by Carson v. Park Indus., Inc., 717 F.2d 1120, 1123 (7th Cir. 1983). The Court accepts all factual conflicts in favor of the Plaintiff. Purdue Research Found., 338 F.3d at 782; Hyatt v. Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002).
B. Failure to State a Claim
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the complaint and not the merits of the suit. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). The court presumes all well-pleaded allegations to be true and views them in the light most favorable to the plaintiff, and accepts as true all reasonable inferences to be drawn from the allegations. Whirlpool Fin. Corp. v. GN Holdings, Inc., 67 F.3d 605, 608 (7th Cir. 1995). In order to prevail, the defendant must demonstrate that "the plaintiff's claim, as set forth by the complaint, is without legal consequence." Gomez v. Ill. State Bd. of Educ., 811 F.2d 1030, 1039 (7th Cir. 1987). A complaint should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief. Doherty v. City of Chicago, 75 F.3d 318, 322 (7th Cir. 1996). Under the Federal Rules of Civil Procedure the plaintiff need only "set out in [his] complaint a short and plain statement of the claim that will provide the defendant with fair notice of the claim." Scott v. City of Chicago, 195 F.3d 950, 951 (7th Cir. 1999); Fed.R.Civ.P. 8(a). However, a plaintiff may not avoid dismissal simply by attaching bare legal conclusions to narrated facts that fail to support his claims. Strauss v. City of Chicago, 760 F.2d 765, 767-68 (7th Cir. 1984); Sutliff, Inc. v. Donavan Cos., 727 F.2d 648, 654 (7th Cir. 1984); see also Gray v. County of Dane, 854 F.2d 179, 182 (7th Cir. 1988) (holding that the federal rules require that a complaint allege facts that, if proven, would provide an adequate basis for each claim).
RELEVANT FACTS
A. Facts Alleged in Complaint
The Plaintiff is an Indiana corporation, with its principal place of business in Fort Wayne, Indiana. (Comp., ¶ 1.) The Plaintiff markets and administers self-funded employer medical expense programs. (Comp., ¶ 1.) The Plaintiff specializes in helping employers create self-funded medical expense plans that are preempted from state insurance regulations by the Employee Retirement Income Security Act. (Comp., ¶¶ 25-26.) Each employer in a self-funded plan must keep its funds separate from the other employers' funds and cannot borrow funds from another employer in the group. (Comp., ¶¶ 26-27.) Therefore, independent funding sources are needed for each employer in the event that the employer needs to temporarily borrow money to meet claims in excess of the available prefunded amount. (Comp., ¶ 28.)
The Plaintiff made arrangements with AMTAC, a Delaware corporation, to provide this independent funding. (Comp., ¶¶ 2, 28.) Before entering an agreement with AMTAC regarding funding, the Plaintiff was provided a letter indicating that the Gen Med Defendants, who are residents of Luxembourg or the United Kingdom, intended to provide AMTAC with a letter of credit for $1.5 million to use as funding for the Plaintiff's business. (Comp., ¶ 29, Ex. 1.) The Plaintiff relied on the representations of the Gen Med Defendants contained in this letter, was induced into entering into an operating agreement with AMTAC, and began sending funds to AMTAC pursuant to the agreement. (Comp., ¶¶ 30-31.)
Some time later, it became apparent to the Plaintiff that AMTAC had not obtained the line of credit and independent funding for the employers' self-funded plans sponsored by the Plaintiff. AMTAC continually represented, untruthfully, that it had, or was about to procure, the letter of credit and the funding necessary to perform its commitments under the operating agreement. (Comp., ¶¶ 33-39.) AMTAC eventually represented to the Plaintiff that it had secured independent funding from Reliance Partners, who is a resident of California. (Comp., ¶¶ 17, 40.) Medical Capital, also a California resident, agreed to provide funding to Reliance Partners. (Comp., ¶ 20.) Reliance Partners represented that, through Medical Capital, it had secured financing for AMTAC. (Comp., ¶ 41, Exs. 9,10.) Reliance Partners specifically provided,
Reliance Partners, LLC has secured financing for A Medex Transition Administration Company, LTD. (AMTAC) through Medical Capital Corporation, Inc. The purchase facility is up to $25,000,000.00 with the initial funding up to $5,000,000 which would be advanced for the purchase of an 80% senior position in a portfolio of medical claim loans. The maturity on this line of credit is 5 years from purchase. The use of proceeds allows for the purchase of eligible loans to self insured companies to pay for medical claims as defined in the master purchase documents.
(Comp., ¶ 42, Ex. 10, Feb. 26, 2004, Letter.)
The Plaintiff alleges that misrepresentations regarding funding, including those made by Medical Capital, proximately caused the damages set forth in the Complaint. (Comp., ¶ 46; Prayer for Relief, ¶ 4.) The Plaintiff contends that the Defendants, including Medical Capital, committed fraud. (Prayer for Relief, ¶ 5.)
B. Facts Asserted in Affidavits
In support of its Motion to Dismiss for lack of personal jurisdiction, Medical Capital submitted the Affidavit of Joseph L. Lampariello, Medical Capital's President and Chief Operating Officer. Lampariello states that Medical Capital is incorporated under the laws of Nevada and its principal places of business are California and Nevada. (Lampariello Aff., ¶¶ 3.) Lampariello contends that Medical Capital does not have offices or employees in Indiana and does not own real property, or have an interest in real property, in Indiana. (Lampariello Aff., ¶¶ 4-5.) His Affidavit also provides that Medical Capital "does not do business within the State of Indiana," nor does it have "contacts in the State of Indiana with regard to any issues raised in this lawsuit." (Lampariello Aff., ¶¶ 6-7.)
The Plaintiff, in opposition to Medical Capital's statements regarding its contact with the State of Indiana, provides the Affidavit of Charles H. Belch, the president of EBM. Belch maintains that performance of Medical Capital's commitment to provide funding for the purchase of an eighty percent senior position in a portfolio of medical claims was "an obligation which necessarily has to be performed in Indiana." (Belch Aff., ¶ 13.) He avers that more than eighty percent of the employer healthcare plans were for employers based in Indiana and that all of the employer healthcare plan trust accounts were maintained at Tower Bank in Fort Wayne, Indiana. (Belch Aff., ¶¶ 14-15.) Belch submits that the interest Medical Capital committed to purchase consisted of assets that were located in Indiana and which could only be moved from Tower Bank by the employers. (Belch Aff., ¶ 16.)
In his Affidavit, Belch states that before Reliance Partners issued the letter regarding its commitment to provide funding, Medical Capital sent an employee of Medical Capital, Bill Noll, to the Plaintiff's Fort Wayne office to conduct an audit of the portfolio of medical claim loans. (Belch Aff., ¶ 20-21.) Belch attached to his Affidavit a printout of an e-mail that AMTAC's Darren Thomas received from Reliance Partner and forwarded to the Plaintiff. The e-mail outlines the items that Noll would be reviewing during his Fort Wayne visit. (Belch Aff., ¶ 20, Ex. A.) Belch notes that the audit went well, with Noll commenting that he saw no problem in providing the requested funding, and that he "could see no reason why it would not go through." (Belch Aff., ¶ 23.) He also noted that the February 26, 2004, commitment letter was prepared six days after the on-site audit. (Belch Aff., ¶ 24.)
Belch also states that on March 3, 2004, Bill Noll and another individual participated in a conference call with Belch in Fort Wayne to discuss implementing the commitment to provide funding. (Belch Aff., ¶ 25.) AMTAC's Thomas again corresponded with the Plaintiff via e-mail regarding scheduling the conference call with Noll and another employee from Medical Capital. (Belch Aff., ¶ 26, Ex. B.) Finally, Belch provided that all of the profits that "would have been made by Medical Capital . . . would have come from loans made in Indiana to employers, more than 80 percent of which were based in Indiana, with security for the loans based upon the deposits in trust accounts at Tower Bank located in Fort Wayne, Allen County, Indiana." (Belch Aff., ¶ 27.)
DISCUSSION
A. Personal JurisdictionMedical Capital contends that the Plaintiff cannot make out a prima facie showing that personal jurisdiction, either general or specific, exists. Medical Capital argues that the only thing the Plaintiff has established is that Medical Capital investigated a prospective business opportunity in Indiana, which was never consummated. Medical Capital maintains that the Plaintiff has not established any contractual relationship between Medical Capital and the Plaintiff, and that any commitment it made to Reliance Partners, a California corporation, does not confer jurisdiction to Indiana. Medical Capital further argues that the Plaintiff's claim against Medical Capital is for misrepresentation and fraud and that the auditor's due diligence visit to Fort Wayne is not relevant to this claim such that the suit arises out of, or is related to, this contact.
The Plaintiff argues that, in light of the evidence provided in Belch's Affidavit, there was an agency relationship between Reliance Partners and Medical Capital regarding the commitment for funding. The Plaintiff asserts that the activities of Medical Capital and its agents in committing to provide funding satisfies Indiana's long-arm statute.
In diversity cases, a federal district court has personal jurisdiction over a nonresident "only if a court in which it sits would have such jurisdiction." Steel Warehouse of Wis., Inc. v. Leach, 154 F.3d 712, 714 (7th Cir. 1998); Wilson v. Humphreys Ltd., 916 F.2d 1239, 1243 (7th Cir. 1990). In Anthem Ins. Cos. v. Tenet Healthcare Corp., the Indiana Supreme Court held that determining personal jurisdiction under Indiana law required a two-step approach: "First, the court must determine if the defendant's contacts with the forum state fall under the long-arm statute, [Indiana Trial Rule 4.4(A)]. Second, if they do, the court must then determine whether the defendant's contacts satisfy federal due process analysis." 730 N.E.2d 1227, 1232 (Ind. 2000). However, Indiana's long arm statute was amended effective January 1, 2003, to include the following language: "In addition [to the factors], a court of this state may exercise jurisdiction on any basis not inconsistent with the Constitutions of this state or the United States." Ind. Tr. R. 4.4(A). With the addition of this language, the inquiry regarding the eight categories of actions is collapsed into a federal due process analysis. Thus, an Indiana state court would have personal jurisdiction over a defendant if the exercise of jurisdiction comports with federal due process. Huber v. House, ___ F. Supp. 2d ___, 2004 WL 3130618, at *2 (S.D. Ind. Dec. 7, 2004); Litmer v. PDQUSA.com, 2004 WL 1661043, at *2 (N.D. Ind. July 27, 2004); Richards v. O'Neil, LLP v. Conk, 774 N.E.2d 540, 550 n. 6 (Ind.Ct.App. 2002) (Najam, j. concurring).
Ind. Tr. R. 4.4(A) has been adopted and incorporated into the Indiana Code. Ind. Code § 34-8-2-2. Although technically a trial rule, it performs the same function as a long-arm statute.
The Due Process Clause of the Fourteenth Amendment limits when a state may exert personal jurisdiction over a nonresident corporation. RAR, Inc., v. Turner Diesel, Ltd., 107 F.3d 1272, 1277 (7th Cir. 1997). How this standard is applied depends on whether the forum state asserts "specific" or "general" jurisdiction. Specific jurisdiction exists when the suit arises out of, or is related to, the defendant's minimum contacts with the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8 (1984). However, where the defendant's contacts with the forum state are "continuous and systematic general business contacts," and the basis of the suit does not arise out and is unrelated to these contacts, general jurisdiction exists. Id. at 416.
Even if the Court finds that specific or general jurisdiction exists under the Due Process Clause, the Court must decide if exercising jurisdiction over the Defendant will "offend traditional notions of fair play and substantial justice." Int'l. Shoe Co. v. State of Wash., Office of Unemployment, 326 U.S. 310, 316 (1945) (citations and internal quotations omitted). In order to determine this, the Court must balance five factors: (1) the burden on the Defendant; (2) Indiana's interest in adjudicating the dispute; (3) the Plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and, (5) the shared interest of the several States in furthering fundamental substantive social policies. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-77 (1985).
1. Specific Jurisdiction
The Plaintiff argues that Indiana has specific jurisdiction over Medical Capital. An analysis of specific jurisdiction begins with the minimum contacts test annunciated by the Supreme Court in International Shoe. Purdue Research Found., 338 F.3d at 780. In order for certain contacts to be sufficient in maintaining jurisdiction by a forum state, the maintenance of the suit must not offend "traditional notions of fair play and substantial justice." Int.'l Shoe, 326 U.S. at 316. "[T]he defendant's conduct and connection with the forum state [must be] such that he should reasonably anticipate being haled into court there to answer for his conduct." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). The acts must be purposeful, not a "random or fortuitous or attenuated contacts, or the unilateral activity of another party or a third person." Burger King Corp., 471 U.S. at 475 (internal quotations and citations omitted). A single contact with a forum state may be enough to establish specific personal jurisdiction as long as the contact creates a "substantial connection" with the state and is the basis of the suit. McGee v. Int'l Life Ins. Co., 355 U.S. 220 (1957); Snyder v. Smith, 736 F.2d 409, 416 (7th Cir. 1984). To determine whether specific jurisdiction exists, the court must assess the relationship among the defendant, the forum, and the litigation. NUCOR v. Aceros Y Maquilas de Occidente, S.A. de C.V., 28 F.3d 572, 580 (7th Cir. 1994).
2. The Plaintiff's Claims Against Medical Capital
The Plaintiff's claims against Medical Capital are based in tort. (Comp., ¶¶ 4, 5) (alleging material misrepresentations and fraud). The Plaintiff claims that Reliance Partners represented to AMTAC that Medical Capital had committed to provide funding. In turn, AMTAC represented to the Plaintiff that it had secured independent funding from Reliance Partners. The Plaintiff asserts that Reliance Partner's representations were not true and that it relied upon these misrepresentations to continue to send money to AMTAC under the Plaintiff's operating agreement with AMTAC.
The Plaintiff's Complaint also alleges breach of contract, but only against AMTAC. (Comp., ¶¶ 44, 45; Prayer for Relief, ¶ 1.) In its Brief in Opposition to Motion to Dismiss, the Plaintiff contends that its claims against Medical Capital for failure to keep its commitment for funding sound in tort and contract. To support this claim, the Plaintiff asserts that Medical Capital and the other Defendants "could be viewed as agents for AMTAC [with whom the Plaintiff had a contract] and vice versa." While the Plaintiff asserts that this agency relationship is "clear," the Plaintiff presents no legal support for its position that any of the other Defendants had the authority to act on behalf of Medical Capital or vice versa.
The allegation that Medical Capital failed to keep a commitment to Reliance Partners, who had made a commitment to AMTAC, who had a contract with the Plaintiff, does not create a contract cause of action against Medical Capital, who never negotiated or entered into a contract with the Plaintiff. Thus, the Court will analyze the jurisdictional issue using the tort theories of recovery that have been alleged in the Complaint and argued in the brief opposing dismissal.
Ignoring for a moment whether these allegations state a cause of action against Medical Capital, the Court finds that Medical Capital has purposefully established minimum contact with Indiana sufficient to justify exercising specific jurisdiction over it as to these tort claims. Employees of Medical Capital contacted the Plaintiff to discuss its funding commitment and one employee even visited Fort Wayne to conduct an audit at the Plaintiff's offices. Medical Capital downplays this contact by asserting that no contract was ever consummated. However, the claims against Medical Capital are not related to any contract Medical Capital had with the Plaintiff but to assurances it made regarding financing. Assurances that the Plaintiff claims it reasonably relied upon to its detriment. Whether the parties ever entered a contract is of no consequence to the Plaintiff's tort claims and Medical Capital's contact with the Plaintiff in Indiana.
In addition, the "effects doctrine," which has been interpreted broadly in the Seventh Circuit, allows a court to exercise personal jurisdiction over a nonresident defendant when the defendant's intentional tortious actions aimed at the forum state cause harm to a plaintiff in the forum state, and the defendant knows such harm is likely to be suffered. See Janmark, Inc. v. Reidy, 132 F.3d 1200, 1202 (7th Cir. 1997) (holding that California company that induced New Jersey customer to cease buying Illinois business's product was actionable in Illinois where the injured plaintiff did business).
Here, the Complaint alleges that Medical Capital engaged in tortious conduct and fraud, and that the Plaintiff was an Indiana corporation. Thus, the tortious injury to the Plaintiff from the fraudulent misrepresentations occurred in Indiana. There is no dispute that Medical Capital knew that the Plaintiff did business in Indiana, as Medical Capital contacted the Plaintiff by telephone in Indiana and conducted an audit at its offices in Fort Wayne. Therefore, even if Medical Capital's contacts with Indiana were not sufficiently related to its misrepresentation regarding funding, personal jurisdiction over Medical Capital is proper under the effects doctrine as broadly interpreted by the Seventh Circuit.
Moreover, the Plaintiff argues that Medical Capital's employee stated, while he was still in Indiana for the audit, that he saw no reason why the funding would not go through and that this was one of the misrepresentations upon which the Plaintiff relied.
After the plaintiff establishes that there are minimum contacts, the defendant then carries the burden of proving that asserting jurisdiction is unfair and unreasonable. See Burger King, 471 U.S. at 477 ("[W]here a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable."). In deciding whether exercising jurisdiction over the Defendant will "offend traditional notions of fair play and substantial justice," the Court must balance five factors: (1) the burden on the Defendant; (2) Indiana's interest in adjudicating the dispute; (3) the Plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and (5) the shared interest of the several States in furthering fundamental substantive social policies. Burger King Corp., 471 U.S. at 476-77.
Medical Capital does not address any of these factors and has not presented a compelling case that jurisdiction is unreasonable. This Court has specific jurisdiction over Medical Capital in this case.
B. Failure to State a Claim
Medical Capital argues that the Complaint fails to state a claim against Medical Capital upon which relief may be granted because even if all the allegations in the Complaint are taken as true, they do not show fraud or misrepresentation by Medical Capital. Medical Capital asserts that nothing in the Complaint suggest any communication, let alone misrepresentation, by Medical Capital to the Plaintiff and nothing suggests any participation by Medical Capital in any alleged misrepresentation by the Reliance Defendants.
The Plaintiff responds that its Complaint and documents attached thereto indicate that Reliance Partners made written assurances that Medical Capital had committed to providing initial funding up to $5 million, which would be advanced for the purchase of an eighty percent senior position in a portfolio of medical claim loans. The Plaintiff argues that Medical Capital defaulted on that commitment and that remedies for failure to keep the commitment "would obviously sound in contract and in tort. Furthermore, remedies would be available at law and in equity." (Pf.'s Brief at 7.) The Plaintiff goes on to assert that the allegations in the Complaint are sufficient to identify all of the Defendants as potential agents for each other. As to the claim for misrepresentation, the Plaintiff contends that the issue of its reliance on Medical Capital's assurances are not appropriate for resolution on a motion to dismiss. Even if it were appropriate, the Plaintiff argues that Belch's Affidavit identifies facts that show that Medical Capital's activities were specifically directed at the Plaintiff.
When considering a motion to dismiss under Rule 12(b)(6), the Court is limited to the pleadings. When materials outside the pleadings are considered, the motion to dismiss is converted into a motion for summary judgment. No conversion is necessary in this case because, while the Court considered the parties' affidavits for the 12(b)(2) motion, it will not consider them when deciding the 12(b)(6) motion.
Medical Capital replies that even if a commitment for funding was made to Reliance Partners as alleged, the Complaint is devoid of allegations of privity or any connection between the Plaintiff and Medical Capital. Medical Capital also stresses that no allegation of an agency relationship can be gleaned from the face of the Complaint.
1. Contract Claim
The Court finds that the Plaintiff has failed to state a claim for breach of contract against Medical Capital. The only contract the Plaintiff references in its Complaint is the one it entered with AMTAC. There is no mention of Medical Capital in this contract. The Court fails to see how AMTAC's failure to fulfill its contractual obligation to the Plaintiff to obtain a letter of credit states a cause of action in contract against Medical Capital.
2. Fraud Claim
The Plaintiff contends that Medical Capital committed fraud. To prevail in an actual fraud claim under Indiana law, the plaintiff must prove the following elements: "(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." Lawyers Title Ins. Corp. v. Pokraka, 595 N.E.2d 244, 249 (Ind. 1992). The Complaint alleges that Medical Capital "made representations, which were untrue, that certain funding would be provided." (Comp., ¶ 22.) In paragraph 20 of the Complaint, the Plaintiff clarifies that Medical Capital's representation was made to the Reliance Defendants. (Comp., ¶ 20) (alleging that Medical Capital "agreed to provide certain funding to Reliance and Reliance Partners LLC"). The Plaintiff also asserts that after it demanded from AMTAC that it perform its obligations under the contract, AMTAC represented that it had secured independent funding from Reliance Partners. (Comp., ¶ 40.)
The elements of constructive fraud are somewhat different. See, e.g., Siegel v. Williams, 818 N.E.2d 510, 515-16 (Ind.Ct.App. 2004). Although the Court does not understand the Plaintiff to be alleging constructive fraud, it notes that such a claim would fare no better than the actual fraud claim.
Even when the Complaint is deciphered most favorably to the Plaintiff, it is devoid of any representation made by Medical Capital to the Plaintiff. The Plaintiff cannot premise its fraud claim on statements that were not made to it. Lycan v. Walters, 904 F. Supp. 884, 897 (S.D. Ind. 1995) ("Simply stated, Plaintiffs cannot premise their fraud claim on statements that were not made to them."). The representation the Plaintiff relies on, from the February 26, 2004, letter, was written by Reliance Partners and indicated that Reliance Partners had secured financing through Medical Capital. If Medical Capital made any representation regarding financing (no such representations are before the Court), it did so to Reliance Partners, not to the Plaintiff.
Even if Noll's statement to the Plaintiff that he "could see no reason why it would not go through" was properly before this Court on the Motion to Dismiss, it only addressed intentions and future actions, which are not actionable in fraud. Fraud may not be based on representations regarding "future conduct, or on broken promises, unfulfilled predictions or statements of existing intent which are not executed." Doe v. Howe Military Sch., 227 F.3d 981, 990 (7th Cir. 2000) (quoting Lycan, 904 F. Supp. at 897); Biberstine v. New York Blower, Inc., 625 N.E.2d 1308, 1315 (Ind.Ct.App. 1993).
Although the Plaintiff attempts to assert that Medical Capital was an agent of AMTAC and of Reliance Partners, and vice versa, the Plaintiff did not allege this in the Complaint nor set forth facts that would support such an assertion. There is no basis in law or fact to support a contention that Medical Capital was bound by any assurances made by Reliance Partners or any of the other Defendants.
Because the Plaintiff can prove no set of facts in support of its claims that would entitle it to relief, the Plaintiff's claims against Medical Capital are dismissed under Rule 12(b)(6).