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Sobilo v. Seleman

June 27, 2006

DENISE SOBILO F/K/A IMAN SELEMAN, PLAINTIFF,
v.
HAMED SELEMAN, A. SAMI M. JUDGE VIRGINIA M. KENDALL RAGEB, A/K/A SANI ROJEB, JOSEPH S. RAVAGO, MOHAMMED MAHMUTOVIC, INDIVIDUALLY AND D/B/A ILLINOIS HEATING AND COOLING, CARMELO ROMAN, INDIVIDUALLY AND D/B/A FINAL TOUCH REMODELING SERVICE, INC., DEFENDANTS.



The opinion of the court was delivered by: Virginia M. Kendall, United States District Judge Northern District of Illinois

MEMORANDUM OPINION AND ORDER

Plaintiff Denise Sobilo ("Plaintiff") filed suit against her exhusband, Hamed Seleman ("Seleman"), A. Sami M. Rageb, Joseph S. Ravago, Mohammed Mahmutovic, Carmelo Roman, and Kamal Ibrahim (collectively "Defendants") for selling off pieces of her marital property, profiting from those sales, and concealing that profit from her. Specifically, Sobilo alleges that she and her exhusband owned two pieces of real estate while they were married and Defendants orchestrated a scheme to make it appear that the sale of those properties resulted in little or no profit, when in truth, the Defendants split proceeds in excess of three quarters of a million dollars. For reasons excused by this Court, Plaintiff only has been able to serve two Defendants -- Joseph S. Ravago ("Ravago") and Sami M. Rageb ("Rageb") (collectively, "the Moving Defendants"). The Moving Defendants seek to have the Complaint dismissed for failing to allege fraud with the requisite particularity of Fed. R. Civ. Pro. 9(b).

Because Plaintiff has pled the alleged fraud with the particularity required by Rule 9(b) and has stated a claim under Rule 12(b)(6), Defendants Ravago's and Rageb's motions to dismiss are denied.

Plaintiff's Allegations

Count I of the Complaint alleges that in 2004 Seleman sold property located at 5140 South King Drive in Chicago, Illinois for an amount in excess of $400,000, though the closing statement of the sale showed net proceeds of only $7,000. (Compl., Count I ¶¶ 12, 16). Seleman held legal title to the multi-unit building during his marriage with Plaintiff and the building therefore was a marital asset subject to division by the parties in their divorce proceedings. (Compl., Count I ¶ 11). The other defendants aided Seleman in obscuring the $400,000 profit from Plaintiff through a scheme involving false lien waivers. (Compl., Count I ¶¶ 12-16). The other defendants, through Seleman's attorney, Ravago, submitted false lien waivers to the title company which handled the disbursements for the sale of the King Drive property. (Compl., Count I ¶ 15). After receiving the false lien waivers, the title company disbursed funds to the other defendants. In turn, the other defendants kicked back the money they received from the title company to Seleman. (Compl., Count I ¶ 16). The Complaint lists the specific amount each defendant kicked back to Seleman. (Compl., Count I ¶ 17). As a result of the kickbacks, Seleman profited in excess of $400,000 from the sale of the King Drive property but concealed that profit in order to deprive Plaintiff of her fair marital share of the proceeds. (Compl., Count I ¶ 12).

Count II of the Complaint alleges that in 2004 Seleman and Rageb conspired to and did perpetrate a fraud against Plaintiff whereby Seleman transferred real property located at 3553 W. Irving Park in Chicago, Illinois to Rageb through a quitclaim deed. (Compl., Count II ¶ 11-18). This property was also owned by Seleman during his marriage to Plaintiff and therefore also constituted a marital asset. On September 14, 2004, Seleman executed a quitclaim deed in favor of Rageb, which was recorded on September 20, 2004. (Compl., Count II ¶ 12). Rageb had obtained a mortgage on the Irving Park property from Citizens Bank and Trust Co. of Chicago four months before the execution of the quitclaim deed and used that mortgage to pay off $124,000 of the first mortgage on the property. (Compl., Count II ¶¶ 13-15). The title company handling the closing of the Irving Park property then disbursed $209,000 to Citizens Bank for the benefit of Seleman without Plaintiff's knowledge. (Compl., Count II ¶¶ 15-16).

Count III of the Complaint alleges that Seleman and the other defendants conspired together to deprive Plaintiff her share of the marital assets described in Counts I and II. (Compl., Count III ¶ 20).

ANALYSIS

When considering a motion under Rule 12(b)(6), a court must take as true all facts alleged in the complaint, and construe all reasonable inferences in favor of the plaintiff. See Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995). A Rule 12(b)(6) motion will not be granted "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claims which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102 (1957). In this regard, "[a]ny need to plead facts that, if true, establish each element of a 'cause of action' was abolished by the Rules of Civil Procedure in 1938." Sanjuan v. American Bd. of Psychiatry and Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994). Thus, the plaintiff need not allege all of the facts 3 involved in the claim and can plead conclusions. Higgs v. Carter, 286 F.3d 437, 439 (7th Cir. 2002); see Sanjuan, 40 F.3d at 251 (stating that "[m]atching facts against legal elements comes later"). Any conclusions pled, however, must "provide the defendant with at least minimal notice of the claim." Kyle v. Morton High School, 144 F.3d 448, 455 (7th Cir. 1998); see Sanjuan, 40 F.3d at 251 ("One pleads a 'claim for relief' by briefly describing the events").

In addition to stating a claim under Rule 12(b)(6), Plaintiff's fraud claims must further satisfy Rule 9(b), which requires that "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." Fed. R. Civ. P. 9(b). "While [Rule 9(b)] does not require a plaintiff to plead facts that if true would show that the defendant's alleged misrepresentations were indeed false, it does require the plaintiff to state 'the identity of the person making the misrepresentation, the time, place, and content of the misrepresentation, and the method by which the misrepresentation was communicated to the plaintiff.'" Uni*Quality, Inc. v. Infotronx, Inc., 974 F.2d 918, 923 (7th Cir. 1992). The heightened pleading therefore requires a complaint alleging fraud to contain more substance to survive a motion to dismiss as compared to a Rule 12(b)(6) motion based on another cause of action. See Ackerman v. Nw. Mutual Life Ins. Co., 172 F.3d 467, 469 (7th Cir. 1999) (stating that Rule 9(b) forces "the plaintiff to do more than the usual investigation before filing his complaint"); Vicom, Inc. v. Harbridge Merchant Services, Inc., 20 F.3d 771, 777 (7th Cir. 1994) (explaining that "[t]he rule is said to serve three main purposes: (1) protecting a defendant's reputation from harm; (2) minimizing 'strike suits' and 'fishing expeditions'; and (3) providing notice of the claim to the adverse party").

Ravago and Rageb move to dismiss the complaint pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6) alleging that Counts I and II fail to describe the alleged fraudulent sales of the two properties with sufficient particularity. Rageb additionally argues that Count I fails because Plaintiff improperly groups her allegations against the defendants and because she did not plead facts sufficient to establish an agency relationship between Ravago and the other defendants. As to Count III, Plaintiff's conspiracy claim, Ravago argues that it must be dismissed with Counts I and II because conspiracy may not be pled as an independent tort separate from the fraud counts. Alternatively, Rageb argues that Plaintiff's conspiracy claim must be dismissed because it also fails to satisfy Rule 9(b)'s particularity requirement.

COUNT I

Count I of the Complaint alleges that in 2004 (Compl., Count I ¶ 12) Ravago, Rageb, and others (Compl., Count I ¶ 17) submitted false lien waivers (Compl., Count I ¶ 15) to the title company handling the disbursement for the sale of the King Drive property in Chicago, Illinois (Compl., Count I ¶ 15). Further detailing the alleged misrepresentation, Plaintiff alleges that Ravago and Rageb kicked back $45,000 and $150,000 respectively to Seleman in order to cheat Plaintiff out of her share of the marital property. (Compl., Count I ¶ 17). As such, defendants are now put on detailed notice of each of the parties' actions, when those actions are alleged to have occurred, where those actions occurred and how the scheme was executed. Plaintiff is not required under Rule 9(b) to plead facts that satisfy each element of common law fraud. See Uni*Quality, Inc.,974 F.2d at 923. Instead, a plaintiff need only plead the "who, what, when, and where" of the alleged fraud sufficient to "reasonably notify the defendants of their purported role in the scheme." Vicom,20 F.3d at 777; see also DiLeo v. Ernest & Young, 901 F.2d 624, 627 (7th Cir. 1990) (stating that Rule 9(b) requires the "who, what, when, where and how: the first paragraph of any newspaper story"). Plaintiff has met her burden at this stage.

Rageb separately asserts that Count I must fail because it consistently refers to "the defendants," rather than identifying each defendant individually. (Compl., Count I ¶¶ 12-16). While group pleading often is improper, see Sears v. Likens, 912 F.2d 889, 893 (7th Cir. 1990) ("A complaint that attributes misrepresentations to all defendants, lumped together for pleading purposes, generally is insufficient"), it is not always necessary to individualize every allegation constituting the fraud. See cf. Rosenberg v. CNA Financial Corp., 2005 WL 1792191, *8 (N.D. Ill. 2005) ("[T]he need to plead specific allegations as to each defendant is unnecessary as the same allegations apply to each plaintiff"). Group pleading is prohibited when it is used ...


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