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CITICORP VENDOR FINANCE, INC. v. ISA PHARMACY

March 2, 2004.

CITICORP VENDOR FINANCE, INC., Plaintiff,
v.
ISA PHARMACY, INC.; DANIEL ZURAWSKI; and FRANK ROSENBAUM, Defendants FRANK ROSENBAUM, Third-Party Plaintiff, v. ISA PHARMACY, LLC, Third-Party Defendant DANIEL ZURAWSKI, Third-Party Plaintiff, v. ISA PHARMACY, LLC., Third-Party Defendant



The opinion of the court was delivered by: JOHN W. DARRAH, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff, Citicorp. Vendor Finance, Inc., as Successor-in-Interest by Acquisition and Merger to Copelco. Capital, Inc. ("Citicorp"), filed suit against Defendants, ISA Pharmacy, Inc. ("ISA Inc."), Daniel Zurawski ("Zurawski"), and Frank Rosenbaum ("Rosenbaum"), alleging breach of lease, breach of Guaranty I (breach by Zurawski) and breach of Guaranty II (breach by Rosenbaum). Page 2

Defendant/Third-Party Plaintiffs Zurawski and Rosenbaum filed Third-Party Complaints against Third-Party Defendant, ISA Pharmacy LLC ("ISA LLC"). Zurawski demanded judgment against ISA LLC for any or all amounts for which he might be found liable to Plaintiff, plus any other or further damages or losses he may suffer or incur, including costs and counsel fees. Rosenbaum also demanded judgment against ISA LLC for contribution and indemnification for any and all liability of Rosenbaum to the Plaintiff, including attorney's fees, costs of suit and interest, and any other appropriate relief.

  Presently before the Court is ISA Pharmacy, LLC's Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). ISA LLC seeks dismissal of Zurawski's and Rosenbaum's Third-Party Complaints. Zurawski and Rosenbaum did not file a response to the Motion to Dismiss.

  LEGAL STANDARD

  In reviewing a motion to dismiss, the court reviews all facts alleged in the complaint and any reasonable inferences drawn therefrom in the light most favorable to the plaintiff. See Marshall-Mosby v. Corporate Receivables, Inc., 205 F.3d 323, 326 (7th Cir. 2000). A plaintiff is not required to plead the facts or the elements of a claim, with the exceptions found in Federal Rules of Civil Procedure 9. See Swierkiewicz v. Sorema, 534 U.S. 506, 511 (2002); Walker v. Thompson, 288 F.3d 1005, 1007 (7th Cir. 2002) (Walker). Dismissal is warranted only if "it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The "suit should not be dismissed if it is possible to hypothesize facts, consistent with the complaint, that would make out a claim." Graehling v. Vill. of Lombard, III., 58 F.3d 295, 297 (7th Cir. 1995). Page 3

  When reviewing a motion to dismiss, the Court may consider exhibits attached to the complaint as part of the pleadings. Beam v. IPCO Corp., 838 F.2d 242, 244 (7th Cir. 1988) (Beam). Furthermore, "[W]here the allegations of a pleading are inconsistent with the terms of a written contract attached as an exhibit, the terms of the latter, fairly construed, must prevail over the averments differing therefrom." Foshee v. Daoust Constr. Co., 185 F.2d 23, 25 (7th Cir. 1950); see also Bell v. Lane, 657 F. Supp. 815, 817 (N.D.Ill.1987) (where exhibits attached to complaint negate its allegations, a court is not required to credit unsupported allegations). Graue Mill Dev. Corp. v. Colonial Bank & Trust Co., 927 F.2d 988, 991 (7th Cir. 1991).

  BACKGROUND

  A reading of the Complaint and the Third-Party Complaints, including the exhibits attached to the Third-Party Complaints, support the following summary of the alleged operative conduct of the parties.

  On or about December 16, 1999, ISA Inc. and Copelco. Capital, Inc. ("Copelco") entered into a commercial Master Lease Agreement (the "Lease"), which provided for the lease and hire of certain items of equipment (the "Equipment"). In order to induce Copelco. to enter into the Lease, Zurawski and Rosenbaum each made, executed and delivered a Personal Guaranty (respectively, "Guaranty I" and "Guaranty II") to Copelco. wherein Zurawski and Rosenbaum each individually agreed to personally guaranty to Copelco, its successors and assigns, all payments and other obligations owed to Copelco. under the Lease. The Lease required Zurawski and Rosenbaum to make forty-eight (48) consecutive monthly payments in the amount of $3,781.47 each, plus applicable taxes, until the entire obligation was paid in full. In July 2001, ISA breached the Lease; Zurawski breached Guaranty I, and Rosenbaum breached Guaranty II and became in default through Page 4 failure to make the monthly payment as required by the Lease for July 2001 and all payments due thereafter.

  Citicorp. is the Successor-In-Interest to Copelco. and currently holds all of Copelco's rights, title and interest in and to the Lease, Guaranty I, Guaranty II, and the Equipment, including the right to institute legal proceedings to exercise the rights and remedies of Lessor pursuant to the Lease, Guaranty I and Guaranty II. ISA Inc., Zurawski and Rosenbaum have failed and refused to pay the full balance due and owing to Citicorp under the Lease, Guaranty I and Guaranty II, That balance is in the amount of $120,962.70. To date, Citicorp. has also incurred attorney's fees and expenses under the Lease in the amount of $632.50, thereby increasing the total amount due Citicorp. to $121,595.20. Citicorp. filed suit against ISA Inc. and the Defendants/Third-Party Plaintiffs for breach of the Lease, Guaranty I and Guaranty II in New Jersey state court. That action was removed to the District Court of New Jersey and subsequently transferred to this Court.

  On or about March 28, 2002, ISA Inc. filed a Chapter 11 proceeding in the United States Bankruptcy Court for the Northern District of Illinois which was converted to a Chapter 7 proceeding on November 25, 2002. On June 11, 2002, Horizon Pharmaceuticals, LLC and ISA Pharmacy, Inc. entered into an Asset Purchase Agreement. On July 23, 2002, as a result of the bankruptcy proceeding, a Sale Order was entered approving an asset sale of ISA Inc. to Horizon Pharmaceuticals, LLC, which is the parent corporation for Horizon/ISA Merger Sub, LLC, which renamed ISA Inc. to ISA LLC.

  On June 10, 2003, Zurawski filed his Third-Party Complaint against ISA LLC, alleging that ISA LLC assumed liability for the Citicorp. debt and that ISA LLC failed to satisfy that assumed obligation. Therefore, as a direct and proximate result of such breach, failure and refusal to perform Page 5 by ISA LLC, Zurawski alleges that he incurred expense to defend the Plaintiff's suit against him and will continue to incur such expense and, therefore, demanded contribution and indemnification for any liability that might be found by the Court and any costs or expenses incurred by him as a result of the action.

  On May 19, 2003, Rosenbaum filed his Third-Party Complaint against ISA LLC, alleging that ISA LLC acquired all leases and liabilities, including the Lease, via the Asset Purchase Agreement and the Bill of Sale. Therefore, as a result of that alleged breach, Rosenbaum demands judgment against ISA LLC for contribution and indemnification for any and all liability of Rosenbaum to ...


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