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CAPLAN v. INTL. FID. INS. CO.

October 27, 1995

MITCHELL H. CAPLAN, Plaintiff,
v.
INTERNATIONAL FIDELITY INSURANCE COMPANY, a corporation, Defendant.



The opinion of the court was delivered by: ALESIA

 Before the court is defendant International Fidelity Insurance Company's ("IFIC") motion to dismiss Counts I, II, III, and IV of plaintiff Mitchell H. Caplan's ("Caplan") second amended complaint pursuant to FED. R. CIV. P. 12(b)(6). As set forth fully below, the court grants in part and denies in part IFIC's motion to dismiss.

 I. BACKGROUND1

 IFIC is a New Jersey corporation with its principal place of business in New Jersey. Caplan, an Illinois resident, has owned 53,000 shares of IFIC stock since 1968. *fn2" In June 1993, IFIC offered to repurchase Caplan's stock for $ 530,000. Caplan acknowledged the offer and requested information and documents so that he could evaluate and respond to the offer.

 In October 1993, IFIC's president, Francis Mitterhoff ("Mitterhoff"), told Caplan that IFIC's chairman, Philip Konvitz ("Konvitz"), had remembered that Caplan did not own the stock, which actually had been issued as collateral for a loan made in 1968 by Irwin Weiner ("Weiner") to IFIC. Mitterhoff told Caplan that Konvitz had talked with Weiner and recalled that Weiner had the stock issued in Caplan's name but held for Weiner's benefit; that Weiner had been repaid; and that the $ 530,000 repurchase offer was a mistake.

 Caplan told Mitterhoff that what Konvitz had said was false. Mitterhoff responded that Konvitz would call Caplan directly. Konvitz called Caplan later that day, reiterated what Mitterhoff had told Caplan earlier, and said that he would further investigate his memory and get back to Caplan. Several days later, Caplan wrote to IFIC, Konvitz, and Mitterhoff, memorializing his conversations with Konvitz and Mitterhoff, restating that Weiner's claim was false, and repeating his information request. Neither IFIC, Konvitz, nor Mitterhoff responded.

 Caplan wrote another letter on November 4, 1993, to which Steven Radin ("Radin"), an attorney for IFIC, responded. Radin acknowledged Caplan's record ownership of the stock and IFIC's repurchase offer, Caplan's request for information, and IFIC's failure to respond to Caplan's information request. Radin told Caplan that Weiner had not been repaid, but wanted to be repaid and have the stock returned to IFIC. Radin told Caplan that IFIC perceived that a dispute as to who owned the stock existed and requested that Caplan provide documents, dating from 1968, to establish that he owned the stock. Radin also told Caplan that, as an attorney for IFIC, he was undertaking an investigation of the Weiner claim and its effect on Caplan's record ownership of the stock.

 In November and December 1993, Caplan corresponded with Radin, requesting evidence of the claims of Konvitz and Weiner and providing information establishing his ownership of the stock. In December 1993, IFIC filed a lawsuit in the New Jersey Superior Court against Caplan and Weiner, alleging that Weiner had loaned IFIC money in 1968, and that Caplan's stock was Weiner's collateral.

 In February 1994, Caplan sued IFIC, Konvitz, Mitterhoff, and Weiner in the Circuit Court of Cook County, seeking declaratory judgment of his ownership of the stock. In September 1994, the Illinois court granted declaratory judgment in favor of Caplan. In October 1994, the New Jersey court also granted declaratory judgment in favor of Caplan.

 Caplan then sued IFIC in this court, alleging breach of fiduciary duty (Count I), fraud (Count II), slander of title (Count III), and conspiracy (Count IV), and asserting an oppressed minority shareholder action (Count V). IFIC now moves to dismiss Counts I through IV of Caplan's second amended complaint pursuant to FED. R. CIV. P. 12(b)(6), on the ground that those counts fail to state claims for which relief can be granted.

 II. DISCUSSION

 A. Standard of Review

 When deciding a motion to dismiss under FED. R. CIV. P. 12(b)(6), the court must accept all factual allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Cromley v. Board of Educ. of Lockport, 699 F. Supp. 1283, 1285 (N.D. Ill. 1988). If, when viewed in the light most favorable to the plaintiff, the complaint fails to state a claim upon which relief can be granted, the court must dismiss the case. See FED. R. CIV. P. 12(b)(6); Gomez v. Illinois State Board of Educ., 811 F.2d 1030, 1039 (7th Cir. 1987). However, the court may dismiss the complaint only if it appears beyond doubt that the plaintiff ...


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