Mohamed v. Reinhart Boerner Van Deuren SC et al

Filing 29

ORDER signed by Judge Rudolph T Randa on 05/09/2011 denying 18 Motion to Dismiss and converting to a motion for summary judgment; denying 21 Motion to Dismiss and converting to a motion for summary judgment; granting 24 to the extent that the D efendants' motions for dismissal are denied and are converted into summary judgment motions; and the parties will be allowed to conduct discovery on the statute of limitations issue before supplementing their filings. Setting telephonic Scheduling Conference for 5/26/2011 02:00 PM before Judge Rudolph T Randa. The Court will initiate the call. (cc: all counsel) (Koll, J)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

TIMUR MOHAMED,
Plaintiff,
v.

Case No. 10-C-0753

REINHART BOERNER VAN DEUREN S.C.,
and CHICAGO TITLE INSURANCE COMPANY,
Defendants.

DECISION AND ORDER

On September 1, 2010, the Plaintiff, Timur Mohamed (“Mohamed”), filed an
action against the Defendants, Reinhart Boerner Van Deuren (“Reinhart”) and Chicago Title
Insurance Company (“Chicago Title”), seeking over one million dollars in damages because
of their alleged failure to record Mohamed’s interest in the California residence owned by Carl
Freer (“Freer”), a corporate officer of Blowfish Works, Inc. (“Blowfish”) (Compl. ¶¶ 1-2.)
Freer personally guaranteed a million dollar loan that Mohamed extended to Blowfish,
providing his residence as a security interest for the loan. The Complaint alleges that Reinhart
engaged in legal malpractice/professional negligence, and that Chicago Title was negligent.
(Id. ¶¶ 1-2, 33, 38.)
Jurisdiction is afforded by 28 U.S.C. § 1332 because there is complete diversity
of the parties and the amount in controversy, exclusive of interest and costs, exceeds $75,000.
Venue is proper in this District under 28 U.S.C. § 1361(a). This Decision and Order addresses

the Defendants’ motions to dismiss and Mohamed’s motions to deny the Defendants’ motions
for dismissal; convert them into summary judgment motions; or, in the alternative, defer ruling
upon the Defendants’ motions and allow Mohamed to conduct discovery, and to stay.
MOTIONS
By their motions to dismiss, Reinhart and Chicago Title assert that Mohamed’s
claims are time-barred. (Reinhart Mot. Dismiss 1, 3-4, 9; Chi. Title Mot. Dismiss 4-6.)
Chicago Title also maintains that Mohamed’s Complaint does not allege sufficient facts to
state a claim for negligence and should be dismissed pursuant to Rule 12(b)(6) of the Federal
Rules of Civil Procedure. (Chi. Title Mot. Dismiss 7.) Each Defendant has proffered papers
outside the pleadings in support of its motion to dismiss.
Mohamed filed a motion contending that the Defendants’ motions should be
denied because they rely on matters outside of the pleadings or, alternatively, converted to
summary judgment motions and that additional discovery should be allowed before requiring
him to respond. Furthermore, with respect to the timeliness of his claims, he maintains that
the controlling statutes of limitations are those of Wisconsin; the claims are still timely under
California law; and, the doctrine of equitable estoppel precludes the dismissal of his claim
against Reinhart. He also maintains that his Complaint states a cause of action against
Chicago Title. Attached to Mohamed’s memorandum is the affidavit of his current counsel,
Elliot R. Schiff (“Schiff”), which proffers an e-mail dated April 2, 2010, from Carolyn G.
Azzaline (“Azzaline”) and a letter dated May 2, 2008, from Allyn Emery (“Emery”).

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Applicable Standards
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955 (2007), and
Ashcroft v. Iqbal, ––– U.S. ––––, 129 S.Ct. 1937, 1953 (2009), require that a complaint be
dismissed if the allegations do not state a plausible claim. “[T]he plausibility standard is not
akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a
defendant has acted unlawfully.” Iqbal, 129 S. Ct. at 1949. After Twombly and Iqbal a
plaintiff to survive dismissal “must plead some facts that suggest a right to relief that is beyond
the ‘speculative level.’ ” Atkins v. City of Chicago, 631 F.3d 823, 832 (7th Cir. 2011) (quoting
In re marchFIRST Inc., 589 F.3d 901, 905 (7th Cir. 2009)). And (another rule that antedates
Twombly and Iqbal ) he can plead himself out of court by pleading facts that show that he has
no legal claim. Atkins, 631 F.3d at 832 (citing Hecker v. Deere & Co., 556 F.3d 575, 588 (7th
Cir. 2009); Tamayo v. Blagojevich, 526 F.3d 1074, 1086 (7th Cir. 2008); EEOC v. Concentra
Health Servs., Inc., 496 F.3d 773, 777 (7th Cir. 2007); Orthmann v. Apple River Campground,
757 F.2d 909, 915 (7th Cir. 1985); Trudeau v. FTC, 456 F.3d 178, 193 (D.C. Cir. 2006)).
When analyzing the sufficiency of a complaint, the Court construes it in the light most
favorable to the plaintiff, accepts well-pleaded facts as true, and draws all inferences in the
plaintiff’s favor. Estate of Davis v. Wells Fargo Bank, 633 F.3d 529, 533 (7th Cir. 2011).
In addition to the Complaint, the parties to this action have presented papers
outside the pleadings in support of, and in opposition to the motion to dismiss. Thus, the
threshold question is how to treat those materials. See Fed. R. Civ. P. 12(d). The Court

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begins by summarizing the salient facts as alleged in the Complaint and then the papers
proffered outside the pleadings.
Background Facts
On January 15, 2007, Mohamed, a citizen of Barbados, entered into a million
dollar loan agreement with Blowfish. (Compl. ¶ 8.) Freer, a corporate officer of Blowfish,
personally guaranteed the loan. (Compl. ¶ 12.) The loan agreement provided Mohamed a
security interest, in the form of a short form deed of trust, on Freer’s California home.
(Compl. ¶¶ 14-15.)
Mohamed retained Reinhart, a Milwaukee law firm, to perform all the legal
work for the transaction. (Compl. ¶ 17.) By the end of January 2007, Reinhart possessed all
the necessary documents relating to the loan agreement and a request that Mohamed’s interest
in Freer’s California home be recorded. (Compl. ¶ 19.) Reinhart then contacted Chicago
Title, instructing it to record the short form deed of trust. (Compl. ¶ 20.)
Freer’s residence was sold “on or about August 10, 2007.” (Compl. ¶ 21.) The
funds from the sale of the residence would have satisfied Mohamed’s interest. The documents
that would have established Mohamed’s interest in the home were not recorded prior to August
10, 2007. (Compl. ¶ 22.)
On or about September 7, 2007, Mohamed provided written notice, through his
attorneys, to Blowfish that it was in default of their loan agreement and demanded immediate
payment of the unpaid principal and accrued unpaid interest. (Compl. ¶ 23.) Mohamed has

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not been able to collect any amount due and owning from Blowfish or from Freer, who has
apparently fled the country. (Compl. ¶¶ 24, 26.)
Mohamed alleges professional negligence by Reinhart, in its capacity as his
counsel, for failing to record the deed and for failing to advise Mohamed of that failure prior
to the sale of the subject property which foreclosed the opportunity for Mohamed to obtain
other forms of security for the million dollar loan or otherwise collect the amount owed to him.
(Compl. ¶¶ 29-30, 32-33.) Mohamed alleges negligence by Chicago Title for failing to record
the deed as instructed by Reinhart, including the failure to timely inform the Reinhart firm of
Chicago Title’s failure or inability to record the short form deed to trust prior to the sale of the
subject property foreclosed the opportunity for Mohamed to obtain other forms of security for
the million dollar loan or otherwise collect the amount owed to him. (Compl. ¶¶ 35, 37-38.)
In support of its motion to dismiss, Reinhart has attached a September 7, 2007,
letter (“September letter”) from Reinhart to Freer stating:
Mohamed further demands that, under the Deed of Trust made on
January 12, 2007 between Carl Freer and Anneli Freer, First
American Title Insurance Company, and Timur Mohamed, you
hold in constructive trust for the benefit of . . . Mohamed
$1,045,712.22 from the proceeds of the sale of the property
described therein.
(Reinhart’s Mot. Dismiss, Attach. 1.) The September letter was not attached to the Complaint.
The September 2007 letter does not contain any indication that a copy of the letter was sent
to Mohamed.
In support of its motion to dismiss, Chicago Title proffers the affidavit of
counsel, David M. Potteiger (“Potteiger Aff.”), with an attached letter dated August 29, 2007,
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(“August letter”) from Reinhart to Chicago Title. (Potteiger Aff. ¶ 4, Ex. A.) Chicago Title
asserts the letter establishes that Mohamad should have known of the failed recording as of
August 29, 2007, and hence his claim against it is time-barred. (Chi. Title Mem. 6).
In opposition to the parties’ motions to dismiss, Mohamed proffers the Schiff
affidavit, wherein counsel avers that on or about May 18, 2010, he informed Reinhart that it
was being discharged from further representation of Mohamed. The April 2010, Azzaline email and the May 2008, letter from Emery, counsel for Chicago Title, relate to Chicago Title’s
actions with respect to a claim Reinhart filed on behalf of Mohamed, in connection with Freer.
Matters Outside the Pleadings
Reinhart and Chicago Title’s contentions that Mohamed’s claims are time-barred
rely on letters that each has submitted with their respective motions to dismiss. Mohamed’s
opposition to the motions to dismiss also relies on matters outside the pleadings – an affidavit,
an email and a letter. The Court begins with consideration of the letters attached to the
motions to dismiss.
“If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are
presented to and not excluded by the court, the motion must be treated as one for summary
judgment under Rule 56.” Fed. R. Civ. P. 12(d); see also Washicheck v. The Ultimate Ltd.,
231 F.R.D. 550, 553 (W.D. Wis. 2005). Courts have converted motions to dismiss to motions
for summary judgment because attached affidavits further explained matters. See Washicheck,
231 F.R.D. at 552-53. “The consideration of outside matter without converting the motion

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may result in reversible error.” Gen. Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d
1074, 1080 (7th Cir. 1997).
However, under certain circumstances, the submission of matters outside the
pleadings upon a motion to dismiss does not require conversion of the motion to one for
summary judgment. The Court has the option of excluding documents that are outside the
pleadings. Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998); see also Alioto v.
Marshall Field’s & Co., 77 F.3d 934, 936 n.3 (7th Cir. 1996) (citing R.J.R. Servs., Inc. v.
Aetna Cas. & Surety Co., 895 F.2d 279, 281 (7th Cir. 1989)) (suggesting that courts need not
always consider certain extrinsic materials that are attached because “a dismissal that follows
from the consideration of extrinsic materials may be affirmed if [a] Rule 12(b)(6) dismissal
would have been appropriate without reference to those materials”); Menominee Indian Tribe
of Wis. v. Thompson, 161 F.3d 449, 456 (7th Cir. 1998). In Levenstein, 164 F.3d at 347, the
defendants attached numerous documents to their motion to dismiss that were not part of the
complaint. The court excluded the documents, treated the motion to dismiss as such, and
denied the plaintiff’s request for further discovery. Id. at 348, 353 (denying the motion to
dismiss on other grounds). Reinhart and Chicago Title’s contentions that Mohamed’s claims
are time-barred may not be resolved, without consideration of the letters attached to the
motions to dismiss. Therefore, excluding the letters is not a viable option.
“A court may [also] consider judicially noticed documents without converting
a motion to dismiss into a motion for summary judgment.” Thompson, 161 F.3d at 456
(holding that it is proper to consider matters not in the plaintiff’s complaint but that are

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subject to judicial notice; that is, historical documents, documents contained in the public
record, and reports of administrative bodies). However, neither letter may be judicially
noticed. Therefore, they may not be considered under Thompson.
In some circumstances, “documents attached to a motion to dismiss are
considered part of the pleadings if they are referred to in the plaintiff’s complaint and are
central to his claim.” Levenstein, 164 F.3d at 347 (citation omitted); Wright v. Assoc. Ins. Co.,
29 F.3d 1244, 1248 (7th Cir. 1994). Wright determined that an agreement providing part of
the basis for the plaintiff’s § 1983 due process claim and repeatedly referred to in the
complaint was central to the plaintiff’s claim and could be considered on a motion to dismiss
without conversion to a summary judgment motion. Id. at 1248.1
Seventh Circuit case law suggests that the above exception is “a narrow
exception aimed at cases interpreting, for example, a contract,” and not meant to blur “the
distinction between motions to dismiss and motions for summary judgment.” Levenstein, 164
F.3d at 347; see also Truhlar v. John Grace Branch No. 825 of the National Association of
Letter Carriers, No. 06 C 2232, 2007 WL 1030237, at *6 (N.D. Ill. Mar. 30, 2007); but see
Tierney v. Vahle, 304 F.3d 734, 738-39 (7th Cir. 2002) (“Although this is not a contract case,

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The court of appeals has cited agreement by parties regarding the authenticity of proffered documents in
upholding the consideration of documents attached to a motion to dismiss, without conversion to a summary judgment
motion. See Hecker v. Deere & Co., 556 F.3d 575, 582 (7th. Cir.) reh’g and reh’g denied en banc, 569 F.3d 708 (7th
Cir. 2009), cert. denied,
U.S. , 130 S.Ct. 1141 (2010). The court of appeals has also upheld the consideration
of documents outside the pleadings without converting the motion to dismiss to a summary judgment motion when,
upon conversion, the plaintiff would be unable to establish a factual basis to preclude summary judgment. See Alioto,
77 F.3d at 936-38 (affirming dismissal on statute of limitations grounds based on consideration of material outside
the pleadings without providing notice of conversion and stating that “a litigant . . . who seeks to upset a judgment
because it resulted in the improper conversion of a 12(b)(6) motion into one for summary judgment must show that
notice and an opportunity to respond would have mattered”).

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the letter . . . attached to the complaint is potentially . . . dispositive of the claim . . . and so [the
defendant] could have submitted it for the court’s consideration, even if the plaintiffs had not
attached it to their complaint, without the court being obliged to convert his motion to dismiss
to a motion for summary judgment.”).
Reinhart relies on Voigt v. County of Victoria, No. V-07-101, 2008 WL 2474575
(S.D. Tex. June 13, 2008), where the defendants attached a letter to their motion to dismiss the
complaint alleging that the plaintiff, a law enforcement officer, experienced sex discrimination
and other civil rights violations. Id. at *2. The plaintiff did not file any response to the motion
to dismiss.
The Voight letter was not attached to the complaint, but the complaint alleged
that the plaintiff was forced to resign effective November 12, 2005, which the court
determined was a reference to the letter. Id. The court considered the letter and granted the
motion to dismiss the claims under 42 U.S.C. § 1983 as untimely, determining that “[the
plaintiff’s] letter is clearly central to [the plaintiff’s] claim because it documents her
resignation and is relevant to the statute of limitations.” Id. Voigt relies on Seventh Circuit
case law, as cited by the Fifth Circuit, to highlight the exception to a required 12(d)
conversion. Id. at *1 (quoting Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th
Cir. 2000)(quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.3d 429, 431 (7th
Cir. 1993) (“A court may consider documents attached to a motion to dismiss provided that
the documents ‘are referred to in the plaintiff’s complaint and are central to the [plaintiff’s]
claims.’”))

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In Truhlar, a decision disclosed by the Court’s research, a Northern District of
Illinois district court declined to consider a letter attached to the defendants’ motions to
dismiss. Id. at *12. The court acknowledged that “there is no precise test for what makes a
document ‘central to’ a claim.” Id. at *8. Most important to the Truhlar court’s decision to
exclude the letter, was the failure of the complaint to reference the letter; rather, the letter was
merely referred to in another letter that was quoted in, and attached to the complaint. Id. at *3,
*8. The court also noted that the Truhlar letter, presented as evidence that the plaintiff's claim
was time-barred, was more central to the defendants’ defense than to the plaintiff’s claim. Id.
at *9.
The present case is somewhat different because, although not expressly referring
to the September 2007 letter, paragraph 23 of the Complaint states written notice of the default
was given to Blowfish on September 7, 2007. Thus, although it is not entirely clear, the
Complaint may refer to the September letter proffered by Reinhart. The Complaint does not
mention that the “notice” acknowledges that the California home was sold and that Mohamed
retained no interest in the home. (Reinhart’s Mot. Dismiss, Ex. 1) (demanding that a
constructive trust be held for Mohamed for “$1,045,712.22 from the proceeds of the sale of
the property”). Although Mohamed comments that the September letter is unverified, he does
not clearly dispute the authenticity of the letter.
Thus, the key question is whether the September 2007 letter is central to
Mohamed’s claim. Neither party cites any controlling Seventh Circuit precedent on the issue

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of whether a document that is relevant to a statute of limitations defense is central to the claim.
Voigt, the sole case cited by the parties regarding the question is not binding on this Court.
Moreover, the plaintiff in that action who proceeded pro se, did not respond to the motion to
dismiss, despite having been afforded an additional opportunity to do so.
It is not entirely clear from the Complaint that paragraph 23 is referring to the
September 7, letter when it states that “written notice” was given. Moreover, the Court finds
that “notice” is not central to Mohamed’s legal malpractice claim, and that, as in Truhlar, the
letter is more a basis for the Reinhart’s affirmative defense, than it is central to Mohamed’s
claim. Therefore, Mohamed’s request that Reinhart’s motion to dismiss be converted to a
motion for summary judgment is granted. Furthermore, the materials presented in opposition
to the motions to dismiss raise issues relevant to the statute of limitations, therefore,
Mohamed’s request that he be allowed to conduct discovery relative to the statute of
limitations defense will also be granted. The Defendants will also be allowed to conduct
relevant discovery on that issue.
The letter attached to Chicago Title’s motion to dismiss is not referenced in the
Complaint. Wright requires that a letter be referenced in the Complaint. No other exceptions
apply. Therefore, because the Court cannot determine, based on the pleadings, whether
Mohamed's claim against Chicago Title is time-barred, the Court will also grant Mohamed’s
request that Chicago Title’s motion to be converted to a motion for summary judgment.
While Chicago Title also seeks dismissal of the claim for failure to state a cause
of action, in the interest of judicial economy that too will be considered as a part of the Court’s

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subsequent decision on the summary judgment motion. The Court will also set a supplemental
schedule to govern the filing of additional submissions with regard to the summary judgment
motions. Civil Local Rules 7 and 56 will apply to those filings.
To set the dates for discovery regarding the statute of limitations issue and for
the filing of supplemental submissions, the Court will require the parties to participate in a
telephone scheduling conference.
NOW, THEREFORE, BASED ON THE FOREGOING, IT IS HEREBY
ORDERED THAT:
Mohamed’s motions (Docket No. 24) are GRANTED to the extent that the
Defendants’ motions for dismissal are denied and are converted into summary judgment
motions; and the parties will be allowed to conduct discovery on the statute of limitations
issue before supplementing their filings;
Reinhart’s motion to dismiss (Docket No. 21) is DENIED and it is converted
to a motion for summary judgment;
Chicago Title’s motion to dismiss (Docket No. 18) is DENIED and it is
converted to a motion for summary judgment; and

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The parties MUST participate in a telephone scheduling conference on May 26,
2011, at 2:00 p.m. The Court will initiate the call.
Dated at Milwaukee, Wisconsin this 9th day of May, 2011.
BY THE COURT
s/ Rudolph T. Randa
Hon. Rudolph T. Randa
U.S. District Judge

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