United States District Court, C.D. Illinois, Peoria Division
SPECIALISTS IN MEDICAL IMAGING, INC. Plaintiff,
ZOTEC PARTNERS, LLC, Defendant/Third-Party Plaintiff
JAMES MCKAY AND HEALTHCARE BUSINESS CONSULTANTS, INC. Third-Party Defendants.
ORDER AND OPINION
Michael M. Mihm U.S. District Court Judge
matter is now before the Court on the Third-Party
Defendants' James M. McKay(“McKay”) and
Healthcare Business Consultants (“HBC”) Motion to
Dismiss for Failure to State a Claim pursuant to Federal Rule
of Civil Procedure 12(b)(6). (ECF No. 17). For the reasons
stated herein, the Motion to Dismiss is GRANTED and Counts I,
II and III of Defendant/Third-Party Plaintiff Zotec Partners,
LLC's (“Zotec”) Amended Third-Party Complaint
(ECF No. 16) are DISMISSED WITHOUT PREJUDICE. Zotec is given
21 days to file an amended complaint correcting the
deficiencies as to Counts I, II and III. This matter is again
referred to the Magistrate Judge for further handling.
March 2015, Specialists in Medical Imaging
(“SMI”) and Zotec entered into a Billing Services
Agreement (“Agreement”). (ECF No. 17 at 2).
Illinois law governs the Agreement. (ECF. No. 17-1 at 14).
Pursuant to the Agreement, Zotec was required to obtain
reimbursement for medical services provided by SMI.
Id. at 3. SMI agreed to provide to Zotec “all
information necessary” that would enable Zotec to
“bill and obtain reimbursement” for SMI's
services. (ECF No. 16-1 at 1). SMI delegated the
responsibility of providing Zotec with information to HBC.
(ECF No. 16 at 2). Although the relationship between SMI and
HBC is not clearly defined, in the Amended Third-Party
Complaint Zotec alleges that HBC “served as
administrators for SMI.” Id.
February 24, 2015, McKay sent Zotec an email attaching a
letter the Internal Revenue Service (IRS) had sent to
(ECF No. 17 at 3). The email explained “attached is the
IRS letter you will need for credentialing and other contact
information, ” and that letter also listed the group
name and federal employer tax Id. (ECF No. 17-3 at
3-4). The IRS letter contained the incorrect address for
Id. When submitting the billing reimbursement, Zotec
provided Blue Cross/Blue Shield (“BC/BS”) with
the address contained in the IRS letter Zotec received from
McKay instead of SMI's actual address. (ECF No. 16 at 3).
The incorrect address resulted in BC/BS reimbursing SMI at a
lower rate. Id.
March 14, 2016, HBC, through McKay, stated via email that it
would “try to identify an alternative route, ”
while Zotec pursued all avenues of appeals for BC/BS's
previous incorrect reimbursement of SMI. Id. at 4.
On the same day, Zotec alleges that HBC, through McKay, also
verbally promised it would correct the mistake with BC/BS so
that BC/BS would no longer reimburse SMI using the incorrect
24, 2017, SMI filed its Complaint in the Illinois Tenth
Circuit Court against Zotec alleging a breach of the
Agreement. (ECF No.1-2). On August 30, 2017, Zotec removed
the case to this Court on the basis of diversity
jurisdiction. (ECF No. 1). On March 3, 2018, Zotec filed an
Amended Third-Party Complaint against HBC and McKay alleging
promissory estoppel and negligent misrepresentation. (ECF No.
16). On March 19, 2018, HBC and McKay filed the Motion to
Dismiss. (ECF No. 17). On April 13, 2018, Zotec filed its
Response. (ECF No. 20). HBC and McKay filed a reply. (ECF No.
21). On May 9, 2018, Zotec filed its objection to the Reply.
(ECF No. 22). This Order follows.
Court has jurisdiction over this action pursuant to 28 U.S.C.
§1332, based on diversity of citizenship between the
parties and the amount of controversy exceeds seventy-five
thousand dollars. SMI is both incorporated in and has its
principal place of business in Illinois. (ECF No. 17 at 2).
According to the Notice of Appeal, Zotec is an Indiana
limited liability company and none of its members are
citizens of Illinois. (ECF No. 1 at 2); Belleville
Catering Co. v. Champaign Market Place, L.L.C., 350 F.3d
691, 692 (7th Cir. 2003) (“Limited liability companies
are citizens of every state of which any member is a
citizen”). SMI has alleged that in breaching the
Agreement, Zotec caused separate losses in the amounts of
$262, 368, $42, 852, and $201, 698. (ECF No. 1). Zotec
brought a claim against HBC and McKay, both residents of
Illinois, for two counts of promissory estoppel and one count
of negligent misrepresentation. (ECF No. 16 at 2); (ECF No.
1). Zotec alleges that HBC and McKay are responsible for the
damages that SMI incurred. (ECF No. 16).
fact that SMI, the Plaintiff, and HBC/McKay, Third-Party
Defendants are all citizens of Illinois does not destroy this
Court's jurisdiction over this action. “Once
federal subject matter jurisdiction is established over the
underlying case between [plaintiff] and [defendant], the
jurisdictional propriety of each additional claim is to be
assessed individually.” Caterpillar Inc. v.
Lewis, 519 U.S. 61, 78 n.1 (1996) (quoting J.
Moore, Moore's Federal Practice ¶ 14.26, p. 14-116
(2d ed. 1996)). Thus, the Court's focus is not
on the relationship between the Plaintiff and Third-Party but
rather, whether there is a jurisdictional basis for the claim
by defendant against third-party defendant. Id. The
fact that SMI and HBC may be co-citizens is completely
irrelevant. Id. Solely examining Zotec's claims
against HBC and McKay, the Court finds it has diversity of
jurisdiction. SMI resides within the Central District of
Illinois, and therefore, venue in this District is proper.
under Federal Rule of Civil Procedure 12(b)(6) is proper if a
complaint fails to state a claim upon which relief can be
granted. Fed.R.Civ.P. 12(b)(6). To survive a motion to
dismiss, a complaint must contain sufficient factual matter,
which when accepted as true, states a claim for relief that
is plausible on its face. Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged. Id. (citing Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A
plaintiff's claim must “give enough details about
the subject matter of the case to present a story that holds
together” to be plausible. Swanson v. Citibank,
N.A., 614 F.3d 400, 404 (7th Cir. 2010). A
court must draw all inferences in favor of the non-moving
party. Bontkowski v. First Nat'l Bank of Cicero,
998 F.2d 459, 461 (7th Cir. 1993).
in the complaint must be sufficient to provide the defendant
with “fair notice” of the claim and its basis.
Appert v. Morgan Stanley Dean Witter, Inc., 673 F.3d
609, 622 (7th Cir. 2012). This means that (1)
“the complaint must describe the claim in sufficient
detail to give the defendant ‘fair notice of what the
… claim is and the grounds upon which it
rests'” and (2) its allegations must plausibly
suggest that the plaintiff has a right to relief, raising
that possibility above a “speculative level.”
EEOC v. Concentra Health Services, Inc., 496 F.3d
773, 776 (7th Cir. 2007).
evaluating a motion to dismiss, the Court must accept as true
all factual allegations in the complaint. Ashcroft,
556 U.S. at 678. However, the Court need not accept as true
the complaint's legal conclusions; “[t]hreadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.”
Id. (citing Bell Atlantic Corp., 550 U.S.
at 555). Conclusory allegations are ...