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Chaudry v. Musleh

United States District Court, N.D. Illinois, Eastern Division

September 5, 2017

Bashir Chaudry, and Zafar Sheikh, Plaintiffs,
v.
Nasser Musleh, Feras Musleh, Mohammad Hammadah Musleh, George Ivancevich, and Johnson, Stracci & Ivancevich, LLP, Defendants.

          MEMORANDUM OPINION AND ORDER

          Hon. Thomas M. Durkin United States District Judge

         In the fall of 2014, plaintiff Bashir Chaudry received a “cold call” from defendant Naser Musleh, who, at the time, owned a supermarket called Central Market in Lake Station, Indiana along with his sons Feras and Mohammad Musleh, who are co-defendants in this case (“the Musleh defendants”). Naser had heard, allegedly from an Illinois-based brokerage firm, that Chaudry and co-plaintiff Zafar Sheikh (“plaintiffs”) were looking to buy a grocery business. Naser Musleh informed Chaudry on this call that he was selling Central Market because of his declining health and desire to spend more time with his family. According to the complaint, this turned out to be the first of many lies the Musleh defendants told the plaintiffs.

         The plaintiffs were skeptical of purchasing a business so far from their home in the Chicago area, but after hearing Naser describe Central Market as a flourishing grocery enterprise, they drove the approximately 55 miles from Lincolnwood, Illinois to Lake Station, Indiana to see it. Naser and his sons showed the plaintiffs around the store and talked them through the “ins and outs” of the business. Several more meetings, in person and by phone followed, as did “hundreds” of emails. The plaintiffs allege that the business “described by the [Musleh] Defendants seemed too good to be true and the Plaintiffs didn't want to wait [any] further” to purchase what they believed to be a thriving grocery store.

         During the closing process, the Musleh defendants, along with their attorney and co-defendant Ivancevich (together with his law firm, Johnson, Stracci & Ivancevich, LLP, “the attorney defendants”), made the following representations, upon which the plaintiffs allege to have relied:

• That the roof on the Central Market was new and in excellent condition;
• That a substantial amount of income could be earned by redeeming customer coupons;
• That on a going-forward basis, union employees would pay their own health insurance premiums; • That the merchandise markup was 35%-38%; and
• That the refrigeration rack system was in proper working order.

         None of these things were true, but the plaintiffs did not discover that they were false until after the sale closed.

         The plaintiffs assert various common law and statutory claims for fraud, unjust enrichment and deceptive business practices.[1] They do not expressly assert a breach of contract claim, as the actual purchasing entity was an LLC. The contract for sale is nevertheless the central basis of their alleged damages. The plaintiffs also assert a claim under the Racketeer Influenced and Corrupt Organizations Act, (“RICO”), 18 U.S.C. § 1961, et seq., alleging that prior to the sale of Central Market, the defendants used the United States mail and telephone lines to “tender[ ] Coupons illegitimately and pad[ ] their scanning sales items.” The Musleh defendants move to dismiss for lack of personal jurisdiction and on the ground that the plaintiffs lack standing as non-signatories to the contract for the sale of Central Market. The attorney defendants argue that venue is improper in this district and move to dismiss the case or transfer it to the Northern District of Indiana. They also seek, in their reply brief, to add the argument that the Court lacks personal jurisdiction over them.[2]

         Discussion

         A. Subject Matter Jurisdiction

         A federal district court is required to independently examine whether it has jurisdiction before reaching the merits of any claim. Hammes v. AAMCO Transmissions, 33 F.3d 774, 778 (7th Cir. 1994). The plaintiffs assert that the Court has federal question jurisdiction in light of the RICO claim, as well as diversity jurisdiction, because the plaintiffs are from Illinois, the defendants are from Indiana, and the amount in controversy exceeds $75, 000.

         1. Federal ...


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