El Samad v Shoukry

Filing 41

OPINION AND ORDER: Court GRANTS 14 Motion to Dismiss as to all remaining claims and DISMISSES the case. Signed by Senior Judge James T Moody on 9/4/2018. (tc)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
AHMAD EL SAMAD,
Plaintiff,
v.
AHMED F. SHOUKRY,
Defendants.

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No. 2:17 CV 365

OPINION and ORDER
I.

BACKGROUND
Plaintiff Ahmad El Samad (“El Samad”) brings suit against defendant Ahmed F.

Shoukry (“Shoukry”).1 (DE # 1.) Plaintiff alleges that he and defendant entered into two
agreements: a partnership agreement for the operation of a medical clinic (“Partnership
Agreement,” DE # 15-1), and an employment agreement (“Employment Agreement,”
DE # 1-1 at 5–12). (DE # 1 ¶¶ 2, 6.) According to plaintiff, defendant failed to meet the
requirements of these agreements, causing financial loss and other damages. (Id. ¶ 7.)
Based on these events, plaintiff filed a complaint against defendant on September 18,
2017, alleging “breach of contract,” “breach,” “extortion,” and “false claims.” (Id.)
Defendant moved to dismiss the complaint on October 13, 2017. (DE # 14.) That
motion was fully briefed by the parties. On July 23, 2018, this court issued an order

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What follows is an abridged summary of the case. Additional facts are outlined
in the court’s prior order at docket entry number 40.

which (1) granted defendant’s motion to dismiss in part, (2) granted plaintiff until
August 22, 2018, to move for leave to amend the complaint, and (3) reserved ruling on
all other arguments made by defendant in the motion to dismiss. (DE # 40.) The
deadline set in that order has now passed, and plaintiff has not moved for leave to
amend. For the following reasons, all of the claims in plaintiff’s complaint are
dismissed.
II.

LEGAL STANDARD
Defendant has moved to dismiss plaintiffs’ claims under Federal Rule of Civil

Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. A judge
reviewing a complaint under a Rule 12(b)(6) standard must construe it in the light most
favorable to the non-moving party, accept well-pleaded facts as true, and draw all
inferences in the non-movant’s favor. Erickson v. Pardus , 551 U.S. 89, 93 (2007); Reger
Dev., LLC v. Nat’l City Bank, 595 F.3d 759, 763 (7th Cir. 2010). Under the liberal noticepleading requirements of the Federal Rules of Civil Procedure, the complaint need only
contain “a short and plain statement of the claim showing that the pleader is entitled to
relief.” Fed. R. Civ. P. 8(a)(2). To satisfy Rule 8(a), “the statement need only ‘give the
defendant fair notice of what the . . . claim is and the grounds upon which it rests.’”
Erickson, 551 U.S. at 93 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
“While the federal pleading standard is quite forgiving, . . . the complaint must
contain sufficient factual matter, accepted as true, to state a claim to relief that is
plausible on its face.” Ray v. City of Chicago, 629 F.3d 660, 662-63 (7th Cir. 2011);

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Twombly, 550 U.S. at 555, 570. A plaintiff must plead “factual content that allows the
court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). To meet this standard, a complaint
does not need detailed factual allegations, but it must go beyond providing “labels and
conclusions” and “be enough to raise a right to relief above the speculative level.”
Twombly, 550 U.S. at 555 (citing Sanjuan v. Am. Bd. of Psychiatry & Neurology, 40 F.3d 247,
251 (7th Cir. 1994) among other authorities). As the Seventh Circuit recently explained,
a complaint must give “enough details about the subject-matter of the case to present a
story that holds together.” Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010).
III.

DISCUSSION
A.

Count I: Breach of Contract

Count I of the complaint alleges breach of the Employment Agreement (DE # 1
¶ 6.) In its prior order, the court ruled that plaintiff had not demonstrated he was the
real party in interest for claims related to the Employment Agreement. (See DE # 40 at
7.) Instead, the court found that The Institute of Foot & Ankle Reconstructive Surgery,
LLC, (the “Indiana LLC”), was the real party in interest for those claims.
Under Rule 17(a)(1) of the Federal Rules of Civil Procedure, an action must be
prosecuted in the name of the real party in interest. Pursuant to Rule 17(a)(2), the court
has given plaintiff a reasonable amount of time, 30 days, to join or substitute the
Indiana LLC into the action. (DE # 40 at 7–8.) Plaintiff failed to move for leave to amend
the complaint or otherwise join the Indiana LLC during that time period. Accordingly,

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Count I of the complaint is dismissed.
B.

Count II: Breach

Count II of the complaint alleges breach of both the Employment Agreement and
the Partnership Agreement. (DE # 1 ¶ 7.) For the same reasons that Count I was
dismissed, the court also dismisses Count II to the extent it relates to breach of the
Employment Agreement.
As to the Partnership Agreement, the court previously ruled that—due to the
lack of relevant law and arguments provided by both parties—it could not determine
whether plaintiff was the real party in interest for claims related to the Partnership
Agreement. (See DE # 40 at 9–10.) However, for jurisdictional reasons, the court
concluded that plaintiff held the burden of demonstrating that he, and not the Institute
of Foot & Ankle Reconstructive Surgery of Illinois, LLC, (the “Illinois LLC”), is the real
party in interest for this claim.2 (Id.)
The court granted plaintiff until August 22, 2018, to meet that burden.
Specifically, the court warned plaintiff that his claim for breach of the Partnership
Agreement could not survive if he did not demonstrate that he is the real party in
interest, under Rule 17. As stated above, plaintiff has not yet responded to the court’s
order in any manner. Therefore, he has failed to meet his burden. Accordingly, Count II

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As discussed in the court’s prior order, adding the Illinois LLC to the action,
under Rule 17(a)(2), would defeat complete diversity. (See DE # 40 at 10.) Since plaintiff
has invoked federal jurisdiction, he bears the burden of demonstrating its existence.
Hart v. FedEx Ground Package Sys. Inc., 457 F.3d 675, 79 (7th Cir. 2006).
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of the complaint is dismissed in its entirety.
C.

Count III: Extortion

In his motion to dismiss, defendant also moved for dismissal of Counts III and IV
of the complaint pursuant to Rule 12(b)(6) for failure to state a claim. (DE # 15 at 11–13.)
In its prior order, the court reserved ruling on these arguments. The court will now
address defendants’ arguments regarding Counts III and IV.
In Count III of the complaint, plaintiff alleges that defendant threatened to cause
the closure of the medical clinic if plaintiff did not sign new employment and
partnership agreements. According to plaintiff, this constitutes extortion.
Defendant moves to dismiss this claim on the grounds that there is no civil claim
for extortion under Indiana law or federal law. (DE # 15 at 11 (citing Bledsoe v. Capital
One Auto Fin., 2016 WL 1270206, at *5 (S.D. Ind. Mar. 31, 2016)).) In Bledsoe, the plaintiff
failed to identify any law on which to base a civil claim for extortion. Bledsoe, 2016 WL
1270206, at *5. Since the court knew of no legal basis for the extortion claim, it dismissed
the claim. Id.
In the case at hand, plaintiff does not contend that a civil claim for extortion
exists under the current law. Instead, he argues that the court should consider the
extortion claim “under a theory of First Impression.” (DE # 27-1 at 12.) In support of
this proposition, plaintiff cites to The Hope Source v. B.T. by Troutman, 83 N.E.3d 144 (Ind.
App. 2017). However, Hope Source deals with the admissibility of evidence, not the
establishment of a new cause of action in Indiana. See id. at 145–48. Consequently,

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plaintiff has not demonstrated that extortion is a valid civil cause of action and Count
III of the complaint is dismissed.
D.

Count IV: False Claims

Plaintiff alleges defendant filed a false claim for unemployment benefits, even
though he knew he had not been terminated by plaintiff. (DE # 1 ¶ 9.) Defendant argues
that plaintiff has failed to articulate a viable private civil cause of action for “false
claims.” (DE # 15 at 11–12.) Although the complaint itself does not provide a legal basis
for this claim, defendant surmises that plaintiff seeks to bring this claim under the
Illinois Unemployment Insurance Act (the “Act”), 820 ILCS 405/100, et seq. That statue
provides for judicial review of decisions made by the Board of Review, but states that
those decisions “shall be reviewable only under and in accordance with the provisions
of the Administrative Review Law, provided that judicial review thereof shall be
permitted only after any party claiming to be aggrieved thereby has exhausted his
administrative remedies as provided by this Act.” 820 ILCS 405/1100.
Plaintiff seems to concur that his intention was to bring a claim under the Act, as
he agrees, in his response, that “the administration of unemployment requires that all
disputes be resolved administratively before any party can pursue a private cause of
action.” (DE # 27-1 at 8.) Moreover, his response provides no other basis for a private
cause of action for false claims. (See id.)
Plaintiff argues that he satisfied the exhaustion requirements when he sent a
request for resolution to the administration, and received no response. (Id. at 8.)

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Plaintiff’s “request for resolution” is a fax that he purportedly sent to the
unemployment office. (Id.) Plaintiff attached a copy of the fax to his response. (DE # 272 at 2.) However, that fax was sent after plaintiff filed this lawsuit. (Id.) Therefore,
plaintiff had not exhausted administrative remedies prior to filing his claim in Count IV
of the complaint.
More importantly, even if plaintiff had properly exhausted administrative
remedies, the Act only provides for a right to judicial review of decisions made by the
Board of Review. However, plaintiff’s claim for false claims is brought against
defendant Ahmed Shoukry. Plaintiff has provided no legal basis which would allow
him to seek judicial review by bringing a claim against an individual defendant who is not
affiliated with the Board of Review or the unemployment office.
Since plaintiff has not demonstrated that he is able to assert a private cause of
action against defendant, this claim is dismissed.
E.

Fraud Claim

The complaint does not contain a separate “count” for a fraud claim. However,
the complaint briefly states that defendant’s false unemployment claim (see prior
section) “seeks to extract funds from insurance paid for by [plaintiff] and constitutes
fraud.” (DE # 1 ¶ 9.) Defendant moves to dismiss this claim on the grounds that plaintiff
fails to state a claim.
In Indiana, adequately pleading a common-law fraud claim requires the Plaintiff
to allege: “(1) a material misrepresentation of past or existing fact which (2) was untrue,

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(3) was made with knowledge of or in reckless ignorance of its falsity, (4) was made
with the intent to deceive, (5) was rightfully relied upon by the complaining party, and
(6) which proximately caused the injury or damage complained of.” Kesling v. Hubler
Nissan, Inc., 997 N.E.2d 327, 335 (Ind. 2013). Similarly, the Illinois elements of common
law fraud are “(1) false statement of material fact; (2) defendant’s knowledge that the
statement was false; (3) defendant’s intent that the statement induce the plaintiff to act;
(4) plaintiff’s reliance on the statement; and (5) plaintiff’s damages resulting from
reliance on the statement.” Miller v. William Chevrolet/GEO, Inc., 326 Ill. App. 3d 642, 648
(Ill. App. 2001).3 When pleading these elements, plaintiff must also meet the heightened
pleading standard of Federal Rule of Civil Procedure 9(b) which requires that “[i]n
alleging fraud, a party must state with particularity the circumstances constituting
fraud.”
Plaintiff plainly fails to state a claim for fraud under either state’s law.
Specifically, in the complaint, plaintiff alleges that defendant made a misrepresentation
when he filed his unemployment insurance claim with a third party. (See DE # 1 ¶ 9.)
Plaintiff does not allege that defendant made a misrepresentation to him or that he
relied upon any such statement. (See id.) In his response, defendant states the following
regarding fraud:
Plaintiff sets forth time and place regarding fraud. Plaintiff

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Due to the lack of details in the complaint regarding fraud, it is unclear whether
Indiana law or Illinois law applies to the claim. Regardless, for the reasons stated below,
the claim fails under either state’s law.
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sets forth in his Complaint that the anticipatory breach
(COUNT I) contained both, failure to pass a particular
Medical Board Examination and (COUNT II) defendant’s
erroneous conclusion that he (defendant) had been
terminated.
(DE # 27-1 at 9.) Nothing in that statement (or in the portions of the complaint referred
to in that statement) indicates defendant made a misrepresentation to plaintiff that
plaintiff relied upon in any manner.
For these reasons, plaintiff’s fraud claim is dismissed for failure to state a claim.
IV.

CONCLUSION

For the foregoing reasons, the court GRANTS the motion to dismiss (DE # 14) as
to all remaining claims and DISMISSES the case.
SO ORDERED.
Date: September 4, 2018
s/James T. Moody
JUDGE JAMES T. MOODY
UNITED STATES DISTRICT COURT

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