The opinion of the court was delivered by: GEORGE MAROVICH, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Barry Thorpe ("Thorpe") filed a six-count complaint
against defendants Andrew W. Levenfeld ("Levenfeld"), Levenfeld &
Thorpe, LLC ("Levenfeld & Thorpe") and Andrew W. Levenfeld and
Associates, Ltd. ("Levenfeld & Associates"). In his first amended
complaint, Thorpe asserts state law claims for fraudulent
inducement, constructive fraud, breach of fiduciary duty, breach
of contract, accounting, promissory estoppel and unjust
enrichment.*fn1 Defendants move pursuant to Rules 9(b) and
12(b)(6) of the Federal Rules of Civil Procedure for an order
dismissing plaintiff's claims. For the reasons set forth below,
the Court grants in part and denies in part defendants' motion to
dismiss. I. Background
For purposes of this motion to dismiss, the Court takes as true
the allegations in the first amended complaint (the "complaint").
The Court also considers the Operating Agreement of Levenfeld &
Thorpe, LLC (the "Agreement") attached to and referred to in
plaintiff's first amended complaint. See Fed.R.Civ.P. 10(c).
As alleged in the complaint, the relevant facts are as follows.
Both defendant Levenfeld and plaintiff Thorpe are attorneys
licensed to practice in the state of Illinois. Thorpe's
specialties are securities and corporate law. Levenfeld & Thorpe
was a limited liability company that had its principal place of
business in Illinois. Levenfeld & Associates was a professional
corporation organized and with its principal place of business in
Illinois. Levenfeld & Thorpe and Levenfeld & Associates were each
formed to engage in the practice of law.
As of early 2001, Thorpe worked as an attorney at Levenfeld &
Associates, where he had worked for about three years. At about
that time, Thorpe informed Levenfeld that Thorpe had received
offers to work for other law firms. Thorpe alleges that in order
to keep Thorpe from leaving Levenfeld & Associates, Levenfeld
told Thorpe that he would make Thorpe a partner in the firm and
that Thorpe would be considered to have had an ownership interest
in Levenfeld & Associates dating back to January of 2001.
Levenfeld also told Thorpe that the ownership interest would
carry over to Levenfeld & Thorpe, a new limited liability company
that Levenfeld and Thorpe would form.
Thorpe and Levenfeld formed Levenfeld & Thorpe in June 2001,
when they signed the Agreement, which created the entity and
detailed the structure of the organization. In the three months
leading up to June 2001, Thorpe and Levenfeld discussed at the
offices of Levenfeld & Associates how Levenfeld & Thorpe would be organized. Levenfeld
represented to Thorpe that (among other things) Levenfeld would
have a 25% ownership interest, that Levenfeld would manage the
affairs of the practice in a fair and equitable manner, that
Thorpe would be paid a salary and distribution and that Thorpe
would receive benefits. They signed the Agreement in June 2001.
In early 2003, Levenfeld informed Thorpe that he was dissolving
Levenfeld & Thorpe. Thorpe alleges both 1) that Levenfeld
informed Thorpe that Levenfeld would not pay him the compensation
and distributions to which he was entitled and 2) that, in fact,
Levenfeld failed to make such payments. Thorpe alleges he was
intentionally forced out of the entities because Levenfeld knew
that they were about to receive substantial fees from which
Thorpe would have to be paid.
Based on these allegations, Thorpe asserts claims for
fraudulent inducement, breach of fiduciary duty, constructive
fraud, breach of contract, accounting, promissory estoppel and
II. Standards on a motion to dismiss
The Court may dismiss claims pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure where the plaintiff fails "to
state a claim upon which relief can be granted." Fed.R.Civ.P.
12(b)(6). The purpose of a motion to dismiss under this Rule is
to test the sufficiency of the complaint, not to rule on its
merits. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th
Cir. 1990). In considering a motion to dismiss, the Court accepts
as true all well-pleaded factual allegations and draws all
reasonable inferences in the plaintiff's favor. McCullah v.
Gadert, 344 F.3d 655, 657 (7th Cir. 2003). On a motion to
dismiss, the "issue is not whether a plaintiff will ultimately prevail but whether the claimant is
entitled to offer evidence to support the claims." Cole v. U.S.
Capital, Inc., 389 F.3d 719, 724 (7th Cir. 2004) (quoting
Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).
The Federal Rules of Civil Procedure generally require simple
notice pleading. Fed.R.Civ.P. 8(a). Certain allegations, however,
must be stated with particularity. For example, Federal Rule of
Civil Procedure 9(b) mandates that "all averments of fraud" must
be "stated with particularity." Fed.R.Civ.P. 9(b).
In this diversity action, the parties implicitly agree that
Illinois law applies to the state common-law claims. The duty of
a federal court considering a diversity case is "to predict what
the state's highest court would do if presented with the
identical issue." Taco Bell ...