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April 22, 1998


The opinion of the court was delivered by: ASPEN


 MARVIN E. ASPEN, Chief Judge:

 Plaintiff Steadfast Insurance Co. (Steadfast) filed this suit against defendants Auto Marketing Network (AMN) and Imperial Credit Industries (Imperial) seeking a declaratory judgment and damages. Steadfast amended its complaint once, as was its right, after which the defendants each filed a motion to dismiss. Steadfast responded by moving to amend the complaint again, and its response to the motions to dismiss its first amended complaint refers only to the allegations of its (proposed) second amended complaint.

 The defendants have objected to the amendment solely on the grounds of futility, see Defs.' Opposition to Pl.'s Mot. for Leave to Amend at 3 n.4, which means that they do not believe that the proposed complaint can survive the original motions to dismiss. See Perkins v. Silverstein, 939 F.2d 463, 472 (7th Cir. 1991). In this situation we think it best to grant Steadfast's motion to amend and then to treat the motions to dismiss as attacking the second amended complaint. See generally General Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1085 (7th Cir. 1997) (noting that a review for futility involves "the same standard of legal sufficiency that applies under Rule 12(b)(6)).

 I. Background

 We take the facts from the second amended complaint but set them forth here in summary form; the details will come in the discussion, below. AMN is in the business of purchasing, repackaging, and selling loans which originate from credit-impaired individuals, and it specializes particularly in financing the purchase of new and used motor vehicles. AMN's president and its insurance broker, Uni-Ter Corp., negotiated a "Motor Vehicle Collateral Enhancement Policy" with Steadfast, which insures AMN against losses resulting from loan defaults by individual motor vehicle purchasers. During those negotiations and in the resulting insurance contract itself, AMN made a number of representations and promises about the future course of affairs between itself and Steadfast.

 Several years later, after discovering that the default rate on AMN's loans vastly exceeded projections, Steadfast audited AMN and AMN's collection agency. It discovered, inter alia, that AMN had made loans to unqualified applicants, failed to compile loan portfolios with appropriate risk profiles, took over and improperly executed the collection duties, and submitted improper claims. Steadfast filed suit against AMN, alleging common law fraud, insurance fraud, and breach of contract, and asking for declaratory judgment. The second amended complaint also names Imperial, which had acquired 100% of AMN's stock several months before the suit was filed.

 II. AMN's Motion to Dismiss

 A. Common Law Fraud

 AMN first argues that Steadfast's complaint does not state a common law fraud claim upon which relief can be granted. See FED. R. CIV. P. 12(b)(6). A claim of common law fraud in Illinois requires: (1) a false statement of material fact (2) made by a party who knew or believed the statement to be untrue (3) for the purpose of inducing another party to act (4) which was made to a party with the right to rely and (5) who actually relied, (6) leading to injury. See Siegel v. Levy Org. Dev. Co., 153 Ill. 2d 534, 607 N.E.2d 194, 198, 180 Ill. Dec. 300 (Ill. 1992).

 AMN focuses its attack on the first element, a false statement of material fact. It cites Continental Bank, N.A. v. Meyer, 10 F.3d 1293, 1298 (7th Cir. 1993), for the proposition that statements of opinion or predictions of future events are not actionable in Illinois, and it correctly points out that many of the allegations in the complaint concern ordinary predictive statements. Steadfast's allegation that during contract negotiations "AMN further represented to Steadfast, in writing, that the 'worst case scenario' default rate for the portfolios . . . would be 3 to 3 1/2% per annum" is an example. 2d Am. Compl. P 38. Allegations such as these cannot justify a claim of common law fraud. See, e.g., Ziskin v. Thrall Car Mfg. Co., 106 Ill. App. 3d 482, 435 N.E.2d 1227, 1231, 62 Ill. Dec. 255 (Ill. 1982) (representation of future profitability); Meyer, 10 F.3d at 1299.

 Illinois law also generally bars recovery for "promissory fraud," the situation in which A induces B to rely on a promise which A has no intention of keeping, see, e.g., Roda v. Berko, 401 Ill. 335, 81 N.E.2d 912, 915 (Ill. 1948); Mitchell v. Norman James Constr. Co., Inc., 291 Ill. App. 3d 927, 684 N.E.2d 872, 883, 225 Ill. Dec. 881 (Ill. App. Ct. 1997), and the complaint alleges a number of such promises. Steadfast argues, however, that those allegations state a claim under the "scheme exception" to the ban on promissory fraud claims, which requires that the false statement itself be "the scheme or device to accomplish the fraud." See Bower v. Jones, 978 F.2d 1004, 1011 (7th Cir. 1992). We recognize, of course, that this exception will apply to most promises and is therefore so broad that it mostly emasculates the general rule, see Vance Pearson, Inc. v. Alexander, 86 Ill. App. 3d 1105, 408 N.E.2d 782, 787, 42 Ill. Dec. 204 (Ill. App. Ct. 1980), but as that merely tends to bring Illinois into conformity with the majority American rule (i.e. misstatement of a present intention is a misrepresentation of a material fact), see 408 N.E.2d at 786, it is not a cause for much concern.

 The Seventh Circuit, in an attempt to give some meaning to the "scheme" requirement, held that "promissory fraud is actionable only if it either is particularly egregious or, what may amount to the same thing, it is embedded in a larger pattern of deceptions or enticements that reasonably induces reliance." Desnick v. American Broad. Cos., Inc., 44 F.3d 1345, 1354 (7th Cir. 1995). Steadfast's complaint competently pleads such a scheme. The complaint alleges a number of fraudulent promises: that AMN would strictly adhere to certain underwriting criteria and would refuse applications which did not meet those criteria, see 2d Am. Compl. PP 15-17, 22; that AMN would act so as to minimize Steadfast's liability, see id. P 19; that the insured loan portfolio would contain set percentages of each of three grades of loans, see id. P 18; and that AMN would use all reasonable efforts to collect on a loan or repossess the collateral before making a claim with Steadfast, see id. PP 26-27. A fair reading of the complaint is that these promises were false when made and were broken later, see id. P 63, and the complaint further alleges that Steadfast reasonably relied on these promises in entering into its contract with AMN, see id. P 94, and in paying money not actually due to AMN, see id. P 98. The complaint also contains other instances of fraud which seem to form a pattern of deception, including AMN's submission of claims which contained false information and which did not comply with the underwriting criteria, see id. P 95; AMN's concealment of the fact that it took over the collection and confiscation duties and failed to properly execute them, see id. PP 64-65; AMN's falsification of an endorsement which raised Steadfast's interest costs, see id. P 96; AMN's concealment of its knowledge that some of the car dealers were engaging in fraud, see id. P 58; and AMN's improper reduction of the amount of money which it paid to Steadfast after a car had been repossessed, see id. P 68.

 AMN next argues that Steadfast failed to plead its fraud allegations with particularity. See FED. R. CIV. P. 9(b). We disagree. The complaint is clear as to who made the misrepresentations (AMN, its president, or another entity at AMN's direction), what the statements misrepresented (see the above paragraph), and when the misrepresentations took place (during contract negotiations or in the contract itself). These allegations provide the defendants with "'a brief sketch of how the fraudulent scheme operated, when and where it occurred, and the participants,'" which is all that Rule 9(b) ...

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