Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Specialists in Medical Imaging, Inc. v. Zotec Partners, LLC

United States District Court, C.D. Illinois, Peoria Division

July 24, 2018

SPECIALISTS IN MEDICAL IMAGING, INC. Plaintiff,
v.
ZOTEC PARTNERS, LLC, Defendant/Third-Party Plaintiff
v.
JAMES MCKAY AND HEALTHCARE BUSINESS CONSULTANTS, INC. Third-Party Defendants.

          ORDER AND OPINION

          Michael M. Mihm U.S. District Court Judge

         This matter is now before the Court on the Third-Party Defendants' James M. McKay[1](“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.

         BACKGROUND[2]

         In 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.

         On February 24, 2015, McKay sent Zotec an email attaching a letter the Internal Revenue Service (IRS) had sent to HBC.[3] (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 SMI.[4] 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.

         On 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 address. Id.

         On July 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).[5] This Order follows.

         JURISDICTION

         This 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).

         The 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.

         STANDARD OF REVIEW

         Dismissal 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).

         Statements 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).

         When 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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.