The opinion of the court was delivered by: Bucklo, United States Magistrate Judge.
MEMORANDUM OPINION AND ORDER
Like many conscientious Americans, Dean Pappas, a citizen of
Illinois, wanted to plan for retirement. His broker Douglas Asad
contacted Hartford Life Insurance Company ("Hartford"), a
Connecticut firm, where insurance agent Wold suggested that
Pappas purchase a "last survivor interest sensitive policy." He
expected to pay $60,000 in out-of-pocket annual premiums for ten
years. Thereafter, dividends and interest would accumulate to
cover the premium payments, a feature known as a "vanishing
premium." But after Pappas paid the premiums for eight years,
Hartford contacted him and explained that his premium payments
would not vanish; in fact, it estimated that Pappas would need to
make premium payments for seventeen more years. Pappas sued and
Hartford removed to federal court. His first complaint was
dismissed because the policy was owned by the Pappas Trust rather
than Mr. Pappas personally. Asad now brings this complaint as
trustee of the Pappas' irrevocable life insurance trust and
alleges: (1) a violation of the Illinois Consumer Fraud Act, 815
ILCS 202/2 et seq.; (2) common law fraud; (3) fraudulent
inducement; (4) unjust enrichment; (5) negligent
misrepresentation; (6) breach of contract; (7) anticipatory
breach of contract (8) breach of fiduciary duty; (9) and breach
of the implied duty of good faith and fair dealing. Hartford
moves to dismiss, and I grant the motion in part and deny it in
On a motion to dismiss, I construe the complaint's allegations
in the light most favorable to the plaintiff. Fries v. Helsper,
146 F.3d 452, 457 (7th Cir. 1998). I take as true all
well-pleaded allegations in plaintiff's complaint, and grant a
motion to dismiss only if it is clear that the plaintiff cannot
prove any set of facts that would
entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78
S.Ct. 99, 2 L.Ed.2d 80 (1957).
II. Standing and Ripeness
Hartford argues that Mr. Asad lacks standing because the
complaint is not ripe. A claim is not ripe if it rests upon
contingent future events that may not occur as anticipated or may
not occur at all. Thomas v. Union Carbide Agricultural
Products, 473 U.S. 568, 581, 105 S.Ct. 3325, 87 L.Ed.2d 409
(1985). Hartford says that Mr. Asad cannot allege injury on
behalf of the trust until an out-of-pocket premium payment is
made, citing Frith v. Guardian Life Insurance Co. of America,
9 F. Supp.2d 734, 738 (S.D.Tex. 1998); Solomon v. Guardian Life
Insurance Co. of America, No. 96-1597, 1997 WL 611586, at *2
(E.D.Pa. Sept. 26, 1997). It argues that Mr. Asad's claim rests
upon contingent future events that may not occur as anticipated
or may not occur at all. Thomas, 473 U.S. at 581, 105 S.Ct.
3325. Perhaps dividend payments and interest rates will make a
However, in another similar case the Northern District of
Mississippi found actual harm occurred when the plaintiff
purchased the policy. Myers v. Guardian Life Insurance Co.,
5 F. Supp.2d 423, 429 (N.D.Miss. 1998). I find Myers persuasive.
The harm alleged is that the policy was not what Hartford
represented at the policy's inception, not that the plaintiff is
out money he will have to pay. Furthermore, the general rule for
the statute of limitations on fraud is that it begins to run at
the time the wrong was committed or the time when the fraud was
discovered or could have been discovered through due diligence.
United States v. Rita, 487 F. Supp. 75, 77 (N.D.Ill. 1980).
Asad's fraud claims are ripe.
Mr. Asad's contract claims are also ripe under an anticipatory
repudiation theory. An anticipatory breach occurs when "a party
to a contract manifests a definite intent prior to the time fixed
in the contract that it will not render its performance under the
contract when that time arrives." Leazzo v. Dunham, 95 Ill. App.3d 847,
848, 51 Ill.Dec. 437, 420 N.E.2d 851, 854 (1981). In
such cases, the nonbreaching party may treat the contract as
ended and act accordingly. Id. Mr. Asad was told orally by
Hartford that he would have to pay premiums for seventeen years
longer. He alleges such action amounts to a breach and entitles
him to act as if the contract has ended. Therefore, his contract
claim is ripe.
Hartford argues I should dismiss the fraud claim in Counts I,
II, and III of this complaint because Mr. Asad fails to meet the
heightened pleading requirements of Rule 9(b), that fraud be
pleaded with particularity. The Seventh Circuit requires a party
to state the "who, what, when, where, and how of the fraud."
DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990).
Therefore, Mr. Asad must set forth the time of the
representations. J.C. Whitney & Co. v. Renaissance Software
Corp., No. 99 C 3714, 2000 WL 556610, at *12 (N.D.Ill. April 19,
2000). Instead, he provides only the period of time he relied on
the representations, 1992 to present, not when the
representations were made. Mr. Asad must also set forth the place
where the representations occurred. Id. To this he responds
"Illinois," which is again not specific enough. Hartford is
entitled to know the location(s) where the misrepresentations
occurred. For example, were they made in Mr. Wold's office, his
office, Mr. Pappas' office, or somewhere else? Furthermore, Mr.
Asad must state to whom the representations were made and the
subject of the representations. Id. He merely states that
Pappas was induced to purchase the life insurance policy as a
result of the nebulous representations. The complaint generically
refers to "policy illustration," "marketing materials," and
"sales presentations" but never identifies which particular items
form the basis of Hartford's alleged fraud. Finally, Mr. Asad
must provide who made the
misrepresentations. Id. This he may have done by attaching a
copy of a letter from Mr. Wold to Mr. Pappas to the complaint,
but he has yet to address the other allegations in his complaint.
He must notify Hartford of the circumstances surrounding the
alleged misrepresentations in the "policy illustrations,"
"marketing materials," and "sales presentations." Therefore, I
grant Hartford's motion to dismiss Counts I-III but grant Mr.
Asad leave to amend his complaint to cure these defects if he can
Hartford also argues that Mr. Asad cannot bring Counts II and
III because Illinois' promissory fraud doctrine prevents a
plaintiff from recovering for misrepresentations of intention to
perform future conduct, even if they are made without a present
intention to perform. See HPI Health Care Servs., Inc. v. Mount
Vernon Hosp., Inc., 131 Ill.2d 145, 137 Ill.Dec. 19,
545 N.E.2d 672, 682 (1989). Misrepresentations regarding "existing facts"
are required for fraud. Id. Here, the plaintiff asserts that he
was induced to purchase a policy different from the one actually
purchased. Misleading the plaintiff as to the meaning of the
policy he was considering is a misrepresentation about present,
not future, facts. Nepomoceno v. Knights of Columbus, No. 96 C
4789, 1999 WL 66570, at *14 (N.D.Ill. Feb. 8, 1999). In addition,
Hartford fails to mention that the promissory fraud rule does not
bar a claim if "the false promise or representation of future
conduct is alleged to be the scheme employed to accomplish the
fraud." HPI Health Care Services, 137 Ill.Dec. 19, 545 N.E.2d
at 683. Mr. Asad alleges that "[d]efendant embarked on a
nationwide scheme to maintain or increase premium income by
encouraging its agents to engage in fraudulent sales practices."
This denotes a scheme to defraud sufficient for this exception to
Hartford next argues that I should dismiss Mr. Asad's unjust
enrichment claim (Count IV) because an express contract governs
their relationship. In First Commodity Traders, Inc. v. Heinold
Commodities, Inc., 766 F.2d 1007, 1011 (7th Cir. 1985), the
Seventh Circuit stated held that a plaintiff may not state a
claim for unjust enrichment when a contract governs the
relationship between the parties. However, First Commodities
Traders involved a motion for summary judgment, and later cases
have limited this holding to the summary judgment, not the
pleading stage where these theories may be pled alternatively.
See e.g. Quadion Corp. v. Mache, 738 F. Supp. 270, 278 (N.D.Ill.
1990); Citicorp Leasing, Inc. v. Meridian Leasing Corp., 1992
WL 211050 (N.D.Ill. 1992). Therefore, Mr. Asad may go forward
with his contract and unjust enrichment claims. Moreover, Mr.
Asad claims that he brings his unjust enrichment claim under a
tort theory, as an alternative to his fraud claims. See, e.g.,
Peddinghaus v. ...