United States District Court, C.D. Illinois, Peoria Division
JOHN G. ATWATER, M.D., Plaintiff,
MCLEAN COUNTY ORTHOPEDICS, LTD., an Illinois Corporation, JOSEPH A. NOVOTNY, M.D., CRAIG W. CARMICHAEL, M.D., MARK HANSON, M.D. JEROME W. OAKEY, M.D., JOSEPH B. NORRIS, M.D., and JOSEPH NEWCOMER, M.D., Defendants.
DARROW UNITED STATES DISTRICT JUDGE.
the Court is Defendants' motion to dismiss the Second
Amended Complaint for failure to state a claim, ECF No. 26.
For the following reasons, the motion is GRANTED.
Additionally, an earlier version of Defendants' motion to
dismiss, ECF No. 18, and Plaintiff Atwater's motion for
an extension of time to respond to that motion, ECF No. 21,
are still pending. They are MOOT.
is an orthopedic surgeon and Florida citizen. He began
working for Defendant McLean County Orthopedics
(“MCO”), an Illinois corporation, on October 1,
2001. He was also a shareholder, and sat on MCO's board
of directors. Resp. Mot. Dismiss 2, ECF No. 29. On September
30, 2014, he terminated his employment with MCO. On June 16,
2016, he sued MCO and the other named defendants, all
themselves physicians and directors on MCO's board of
directors, and Illinois citizens, in this Court under the
diversity jurisdiction, alleging that he had not been paid
enough when he quit. Compl., ECF No. 2. After a motion to
dismiss followed by a voluntary amendment of the Complaint,
Defendants again moved to dismiss the second count of the new
complaint pursuant to Federal Rule of Civil Procedure
12(b)(6). This motion is now before the Court.
Legal Standard on a Motion to Dismiss Under Rule
reviewing a motion to dismiss, a court must accept as true
all well-pleaded facts in the complaint, and draw all
reasonable inferences in favor of the plaintiff. Scanlan
v. Eisenberg, 669 F.3d 838, 841 (7th Cir. 2012). A court
will dismiss a complaint if it fails to state a claim upon
which relief can be granted. Fed.R.Civ.P. 12(b)(6). In
determining whether such a claim has been stated, a court
should first identify pleadings that “because they are
no more than conclusions, are not entitled to the assumption
of truth.” Ashcroft v. Iqbal, 556 U.S. 662,
679 (2009). It should then take the remaining, well-pleaded
factual allegations, “assume their veracity[, ] and . .
. determine whether they plausibly give rise to an
entitlement to relief.” Id. This means that a
complaint must provide “allegations that raise a right
to relief above the speculative level.” Tamayo v.
Blagojevich, 526 F.3d 1074, 1084 (7th Cir. 2008).
Complaint, as currently drafted, contains two counts: (I) a
breach of contract claim against MCO only, alleging that MCO
breached two separate contracts-a stock purchase agreement
and an employment agreement-when it failed to redeem shares
he owned in MCO and failed to pay him enough when he quit,
Second Am. Compl. ¶¶ 8-13; and (II) a breach of
fiduciary duty claim against all other defendants (“the
physician defendants”) alleging that they breached
duties of loyalty, care, and fair dealing that they owed
Atwater by “among other things” deviating from
their ordinary accounting practices in failing to pay Atwater
enough and also (possibly) failing to buy his stock from him
when he quit, id. ¶¶ 14-19. Defendants now
move to dismiss the second Count, arguing that it is
duplicative of the first Count, Mem. Supp. Mot. Dismiss 4-10,
ECF No. 27, and that it fails adequately to allege a breach
of fiduciary duty, id. 10-16. Atwater responds that
the claim is not duplicative because the physician
defendants' duties to him did not arise from any
particular contractual obligation, Resp. Mot. Dismiss 4-6,
and is clearly made out, id at 2-4.
Redundancy of Count II
of a complaint that duplicate another count can be dismissed.
See DeGeer v. Gillis, 707 F.Supp.2d 784, 795 (N.D.
Ill. 2010) (collecting cases). The theory behind dismissal of
duplicative counts is not that the second, duplicative claim
cannot be brought at all; rather, that it has already been
brought in the form of the first-pleaded claim, and thus need
not be made out again under a different title. See Dahlin
v. Jenner & Block, L.L.C., No. 01 C 1725, 2001 WL
855419, at *9 (N.D. Ill. July 26, 2001) (explaining that
counts that “mirror” or “are
identical” to other claims can properly be dismissed).
Thus, by hypothesis, dismissal of a duplicative count will
not limit the nature or extent of a plaintiff's requested
relief, or the parties against whom he may recover. Such a
dismissal bears a similarity to the court's power, sua
sponte or on motion, to strike “redundant, immaterial,
impertinent, or scandalous matter” from a pleading
under Federal Rule of Civil Procedure 12(f). Unsurprisingly,
in determining whether a count is duplicative, district
courts have looked at whether the “operative
facts” alleged to support each count are the same,
Kirkland & Ellis v. CMI Corp., No. 95 C 7457,
1996 WL 559951, at *9 (N.D.Ill. Sept. 30, 1996);
DeGeer, 707 F.Supp.2d at 795; whether the elements
of the alleged violations are the same, Freedom Mortg.
Corp. v. Burnham Mortg., Inc., 720 F.Supp.2d 978, 992
(N.D. Ill. 2010); and whether the relief sought is the same,
Lynch v. Three Hammer Const., Inc., No. 89 C 20071,
1990 WL 304248, at *3 (N.D. Ill. May 9, 1990).
argue that Atwater has alleged the same set of operative
facts in both Counts, because both Counts claim that MCO
failed to pay Atwater what he was owed under the two
contracts at issue. It is true, as Defendants argue, that
Atwater seems to allege in both counts that he was not paid
enough, and perhaps that stock was not bought from him that
MCO was contractually obligated to buy. But the operative
facts behind each claim are distinct. A breach of contract
claim under Illinois law, which governs this contract,
requires that Atwater show “(1) the existence of a
contract between himself and the [defendant]; (2) that he
performed his obligations under the contract; (3) that the
[defendant] breached the contract; and (4) that he sustained
damages as a result of the defendant['s] breach.”
DeGeer, 707 F.Supp.2d at 794. To support his breach
claim in Count I, Atwater alleges that he and MCO entered
into a stock purchase agreement and an employment agreement,
that he fulfilled the requirements of these contracts, that
MCO breached by failing to pay him what he was owed, and that
he was injured by not being paid. To make out the breach of
fiduciary duty claim in Count II, by contrast, Atwater must
allege “(1) a fiduciary duty on the part of the
defendant[s], (2) a breach of that duty, (3) an injury, and
(4) a proximate cause between the breach and the
injury.” Alpha School Bus Co., Inc. v. Wagner,
910 N.E.2d 1134, 1158 (Ill.App.Ct. 2009). The injury
allegedly suffered may well be the same, but the fiduciary
duty owed by the physician defendants, whether by virtue of
their being directors or being shareholders (for a discussion
of which distinction, see below), rests on a different set of
facts than the existence or non-existence of contracts
between Atwater and MCO. So too, the operative facts
necessary to show that MCO failed to live up to its
contractual obligations by failing to pay Atwater are
different than those necessary to show that various directors
or shareholders owed Atwater, as a director or shareholder
himself, certain obligations, of which nonpayment of
contractually-required money was a breach.
cases Defendants cite in which a duplicative count was
dismissed differ from the instant case in that the defendants
named in both counts were in all these cases identical.
See DeGeer, 707 F.Supp.2d at 795-96 (dismissing
breach of fiduciary duty claim against defendants because
duplicative of a breach of contract claim against same
defendants); Nettleton v. Stogsdill, 899 N.E.2d
1252, 1269 (Ill.App.Ct. 2008) (affirming dismissal of
duplicative breach of contract and legal malpractice claims
against same defendants); Calderon v. Sw. Bell Mobile
Sys., LLC, No. 02 C 9134, 2003 WL 22340175, at *6 (N.D.
Ill. Oct. 10, 2003) (dismissing duplicative breach of
fiduciary duty claim against single defendant);
Dahlin, 2001 WL 855419 at *9-10 (dismissing
duplicative breach of fiduciary duty claims against same
defendants). The identity of the defendants is part of what
made the claims in those cases materially identical.
Defendants' claim that the non-identity of defendants in
Atwater's two Counts is a “distinction without a
difference” is thus exactly wrong-it is one of the
distinctions that makes the difference in this case, because
Atwater alleges breach of contract against the party with
which he had a contract, MCO, and breach of fiduciary duty
against parties with whom he did not have a contract but, he
alleges, owed him duties springing from separate,
noncontractual relationships to him.
and Count II of the Second Amended Complaint are not
duplicative, and ...