The opinion of the court was delivered by: Judge Robert M. Dow, Jr.
MEMORANDUM OPINION AND ORDER
Before the Court is Defendants' motion  to dismiss Plaintiffs' complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons stated below, Defendants' motion is granted, and Plaintiffs' claims are dismissed without prejudice.
Plaintiff John Hoffman ("Hoffman") is an Illinois resident who is the sole owner and president of Plaintiff Hoffman Financial Services, Inc., an Illinois corporation. Plaintiffs and Defendant Nationwide Mutual Insurance Company, Inc. ("Nationwide Mutual") were parties to an "Agent's Agreement," effective August 1, 1998, to sell insurance and financial products that Nationwide and affiliated companies (collectively referred to in this opinion as "Nationwide") offered.*fn2 Defendant Ross Kimmey ("Kimmey") was an in-house loan consultant whom Nationwide employed.
Nationwide set a goal of becoming the "number 3 insurer by share," countrywide, by 2009. In pursuit of that goal, Nationwide decided to increase its points of distribution by adding new storefronts and providing its sales managers with bonuses based on their success in developing those additional offices and "other expansion criteria." Nationwide encouraged agents to take out Capital Access Program loans ("CAP loans") and Independent Agency Acquisition loans ("IAA loans") to capitalize the expansion effort. Nationwide and Kimmey prepared business plans and "pro formas" for agents that described the expansion initiative and set forth the business assumptions and estimates associated with the loans. The business plans and pro formas contained projected income and expenses from satellite offices, as well as performance growth requirements.
Nationwide Bank provided the CAP and IAA loans to agents and/or agencies that acquired a Nationwide book of business, merged with an existing Nationwide agency, opened a new Nationwide storefront, or purchased an independent agency with the intention of converting it into a Nationwide agency.*fn3 Agents were to put up their future earnings as collateral for the loans. When an agent took out more than one loan, each loan provided that a default on one loan would constitute a default on any other loan or credit that the agent had obtained from Nationwide Bank. Each loan was cross-collateralized with any other collateral in which Nationwide Bank had a security interest in connection with other loans or credits. Nationwide would agree to waive repayment of the loan(s) if the agent met the performance requirements set forth in the business plans and pro formas.
Plaintiffs allege that Nationwide and Kimmey induced them to take out CAP loans and/or IAA loans in order to develop additional offices and hire staff. Plaintiffs claim that Nationwide chastised Plaintiffs that they would not be "team players" if they did not engage in these expansion activities. In April 2004, Plaintiffs took out an IAA loan in order to acquire the McCabe Agency in Peoria, Illinois. The acquisition was governed by a business plan and pro forma that Nationwide and Kimmey had prepared. In 2006, Plaintiffs decided to open a satellite office in Plano, Texas. Plaintiffs took out a CAP loan to finance the Plano expansion effort. The CAP loan was governed by a pro forma and a Performance Agreement that Plaintiffs and Nationwide entered into in February 2006.
Plaintiffs allege that the pro formas associated with the CAP and IAA loans contained knowingly false projected incomes and expenses that painted a rosier picture of the financial viability of the expansion efforts than was actually possible. Plaintiffs further allege that the performance growth requirements set forth in the loan-related documents were not reasonable or achievable. As a result, Plaintiffs allege, Nationwide "knowingly misrepresented to the agents hope." [19, at ¶ 20.] Plaintiffs claim that Nationwide intentionally included these misrepresentations in order to induce agents to enter into various loans, to the agents' detriment. Plaintiffs allege that they in fact relied on these misrepresentations when they took out the CAP and IAA loans. After taking out the CAP and IAA loans, Plaintiffs claim that Nationwide changed the rules, goals, and requirements for agents, and competed with its agents by selling insurance through Allied Insurance, an affiliate agency. Plaintiffs allege that as a result of the purported misrepresentations and post-agreement changes in agent performance growth requirements, they were deprived of compensation, incurred expenses, lost time and effort that they could have devoted to other enterprises, became personally indebted for the CAP and IAA loans, and accrued interest on those loans when the performance growth requirements were not met. Plaintiffs allege that Nationwide, meanwhile, profited by receiving interest from Plaintiffs that was payable to Nationwide Bank.
In their first amended complaint , Plaintiffs seek to recover damages: from Defendants Nationwide and Kimmey for fraudulent inducement and intentional misrepresentation with respect to the 2006 Texas CAP loan (Count I); from Nationwide and Kimmey for fraudulent inducement / intentional misrepresentation of the Illinois IAA loan (Count II);*fn4 from Nationwide for breach of contract (Count III); and from Nationwide for fraudulent inducement (Count IV). Defendants have filed a motion to dismiss Plaintiff's first amended complaint in its entirety .
II. Legal Standard on a Rule 12(b)(6) Motion
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the complaint, not the merits of the suit. See Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990) (citations omitted). A complaint must satisfy the several requirements of Rule 8 to survive a 12(b)(6) motion to dismiss. FED. R. CIV. P. 8. First, the complaint must provide "a short and plain statement of the claim showing that the pleader is entitled to relief," FED. R. CIV. P. 8(a)(2), such that the defendant is given "fair notice of what the * * * claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Second, the factual allegations in the complaint must be sufficient to raise the possibility of relief above the "speculative level," assuming that all of the allegations in the complaint are true. E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Bell Atlantic, 550 U.S. at 555, 569 n.14). "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Bell Atlantic, 550 U.S. at 579-80. The Court accepts as true all of the well-pleaded facts alleged by Plaintiffs and all reasonable inferences that can be drawn therefrom. See Barnes v. Briley, 420 F.3d 673, 677 (7th Cir. 2005).
When a complaint sounds in fraud, the allegations of fraud must satisfy the heightened pleading requirements of Rule 9(b). FED. R. CIV. P. 9(b); see also Borsellino v. Goldman Sachs Group, Inc., 477 F.3d 502, 507 (7th Cir. 2007) (citing Rombach v. Chang, 355 F.3d 164, 170-71 (2d Cir. 2004)). Rule 9(b) states that for "all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." FED. R. CIV. P. 9(b). A complaint satisfies Rule 9(b) when it alleges "the who, what, when, where, and how: the first paragraph of a newspaper story." Borsellino, 477 F.3d at 507 (quoting DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990)). Rule 9(b), read in conjunction with Rule 8, requires that Plaintiffs plead "the time, place and contents" of the purported fraud. Fujisawa Pharm. Co., Ltd. v. Kapoor, 814 F. Supp. 720, 726 (N.D. Ill. 1993). "The purpose of this heightened pleading requirement is to 'force the plaintiff to do more than the usual investigation before filing his complaint.'" Amakua Dev. LLC v. H. Ty Warner, 411 F. Supp. 2d 941, 953 (N.D. Ill. 2006) (citations and internal quotation marks omitted).
A. Whether the Court May Consider Exhibits to Defendants' ...