Mann v. Bales

Jack Mann, Plaintiff, v. Heather Bales, et al., Defendants.

Case No. 16-cv-09623

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

September 29, 2017

Judge Sharon Johnson Coleman

MEMORANDUM OPINION AND ORDER

Plaintiff Jack Mann ("Mr. Mann") originally brought this action in the Middle District of Pennsylvania. In his amended complaint, Mr. Mann asserts 19 claims — two federal and 17 state law claims — against Defendants. (Dkt. 14). Judge Matthew W. Brann of the Middle District of Pennsylvania dismissed this case for lack of personal jurisdiction and transferred it to the Northern District of Illinois. Defendants George F. Mann III, Julia A. Mann, Judson H. Mann, G.F. Mann Agency, Ltd. (the "GMA"), and Global Risk Services ("GRS") (collectively, the "Mann Defendants") filed a motion to dismiss. (Dkt. 128). Defendants Heather Bales ("Ms. Bales") and Mann Insurance Agency, Inc. ("MIA") (collectively, the "Bales Defendants") also filed a motion to dismiss. (Dkt. 130). For the following reasons, the Mann Defendants' motion [128] is granted and the Bales Defendants' motion [130] is granted.

Background

In April 2005, Mr. Mann and his then wife, Ms. Bales, participated in estate planning. (Dkt. 14 ¶ 63). As part of the planning process, Mr. Mann assigned Ms. Bales power of attorney which permitted her to convert Mr. Mann's assets, among other things, if he were ever incapacitated. (Id. ¶ 63).

Mr. Mann and Ms. Bales jointly owned MIA, an insurance agency. Mr. Mann claims that he had a contract with MIA pursuant to which he permitted his book of business ("BOB") to be "housed" at MIA which, in turn, allowed MIA to receive residual commissions. (Id. ¶ 25). Under this purported contract, MIA was to pay Mr. Mann 50% of the income from the residual commissions after it paid the company's expenses. (Id. ¶ 15). Strangely, he claims that this "implied contract" provided that MIA could purchase the BOB from him for 1.5 times the total annual commissions from the 12-month period preceding the date of the sale, (Id. ¶ 27), even though he admits that the contract has no specific items relating to the sale of the BOB. (Id. ¶ 29). Mr. Mann does not provide this Court with a copy of this contract.

In 2008, MIA and GFM entered into a reorganization agreement. (Id. ¶ 20; Dkt. 140 at PDF pp. 135-147). The Agreement listed the BOB as "Jack Mann's Book of Business." (Dkt. 14 ¶ 20; Dkt. 140 at PDF pp. 149-185).

Mr. Mann was incarcerated in 2010 for a crime that is completely unrelated to the instant matter; Ms. Bales initiated divorce proceedings shortly thereafter. (Dkt. 14 ¶ 63). The marital settlement agreement (the "settlement agreement"), which was signed on August 30, 2010, and incorporated in a September 24, 2010, judgment of dissolution of marriage (the "dissolution judgment"), awarded Ms. Bales sole ownership of MIA and all of its assets. (Dkt. 128-2 at PDF p. 14, Marital Settlement Agreement, Article X, Section 10.1.C). The settlement agreement and the dissolution judgment do not specify whether the BOB is Mr. Mann's personal property or MIA's asset. In or around April 2014, Ms. Bales sold MIA to Judson Mann, George Mann, Julia Mann, GMA, and GRS. (Dkt. 14 ¶ 15). The BOB was included in this sale. (Id. ¶ 15).

Mr. Mann asserts that Ms. Bales sold several of his personal items using the power of attorney and justified said sales by claiming that Mr. Mann was incapacitated due to his incarceration. (Id. ¶¶ 63, 64). Mr. Mann claims that Ms. Bales deprived him of the opportunity toauction the BOB on the insurance market by selling it without his involvement. (Id. ¶ 15). He also claims that the Defendants intended for the sale of the BOB to result in his indigency as a consequence. (Id. ¶ 49).

Prior to Mr. Mann's incarceration, Defendants allegedly reached out to clients in the BOB. The communications purportedly discussed Mr. Mann's inability to provide adequate service to the customers. (Id. ¶ 56). The communications also discussed fees that the customers were paying above and beyond normal premiums. (Id. ¶ 61).

Based on these facts and allegations, Mr. Mann asserts the following claims: intentional interference with prospective economic advantage (Count 1), conversion (Count 2), breach of contract (Count 3), unjust enrichment (Count 4), replevin (Count 5), breach of fiduciary duty (Count 6), tortious interference with a contract (Count 7), intentional infliction of emotional distress (Count 8), defamation (Count 9), illegal use of Illinois statutory short form power of attorney for the illegal conversion of Mann's assets (Count 10), violations of the Illinois Uniform Fraudulent Transfer Act (Count 11), constructive fraud (Count 12), actual fraud (Count 13), violation of the Illinois Trade Secrets Act (Count 14), violations of the Illinois Consumer Fraud and Deceptive Practices Act (Count 15), violations of the Telephone Consumer Practices Act ("TCPA") (Count 16), illegal use of power of attorney for illegal conversion (Count 17), fraudulent conveyance (Count 18), and a civil RICO claim (Count 19).¹

Plaintiff originally filed this action in the Middle District of Pennsylvania. Magistrate Judge Susan E. Schwab recommended that the district court dismiss this case for lack of personal jurisdiction in the Middle District of Pennsylvania and transfer it to the Northern District of Illinois. (Dkt. 85). In her recommendation, she found that Mann's amended complaint raised at least arguable TCPA and RICO claims, but she declined to rule on whether he actually stated a claimupon which relief could be granted. (Id. at 4, n. 2). District Judge Matthew W. Brann adopted Magistrate Judge Schwab's recommendation in its entirety. (Dkt. 103); see also Mann v. Bales, No. 4:15-CV-01440, 2016 WL 5864091, at *4 (M.D. Pa. Oct. 7, 2016). Judge Brann found that because Mr. Mann failed to show that he did not intend to return to Illinois after his incarceration, and because Defendants were all Illinois residents, the parties were not diverse and there was no diversity jurisdiction under 28 U.S.C. § 1332. (Dkt. 103 at 7-9). Additionally, Judge Brann concluded that Mr. Mann's TCPA and RICO claims were not so devoid of merit so as to not involve a federal controversy. (Id. at 11).

Legal Standard

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a complaint, not the merits of the allegations. A complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (citation omitted). Courts need not accept as true any legal assertions or recital of the elements of a cause of action supported by mere conclusory statements. Vesely v. Armslist LLC, 762 F.3d 661, 664-65 (7th Cir. 2014) (citation omitted).

District courts have jurisdiction over cases that raise a federal question and cases in which there is diversity of citizenship among the parties. See 28 U.S.C. §§ 1331-32; Smart v. Local 702 Int'l Bhd. of Elec. Workers, 562 F.3d 798, 802 (7th Cir. 2009). A party seeking to invoke this Court's diversity jurisdiction bears the burden of demonstrating that the requirements for diversity are met. Smart, 562 F.3d at 802-03 (citations omitted). This court must dismiss actions where there is no federal question or where there is no diversity for want of jurisdiction. Id. at 802.

Discussion

Defendants move to dismiss Mr. Mann's complaint on various grounds. They argue that resolution of the claims would require this Court to intrude on the state court divorce proceedings between Mr. Mann and Ms. Bales and should therefore dismiss this case under the Burford abstention doctrine. They also argue that the complaint should be dismissed because Mr. Mann has failed to state plausible federal claims and because there is no diversity jurisdiction. This Court first addresses Mr. Mann's federal claims.

a. TCPA and civil RICO

The TCPA prohibits individuals from making calls using automatic telephone dialing systems, 47 U.S.C. § 227(b)(1)(A), from initiating telephone calls to residential telephone lines using artificial or prerecorded voices to deliver messages, § 227(b)(1)(B), or from using fax machines, computers, or other devices to send unsolicited advertisements to fax machines, § 227(b)(1)(C), absent an emergency or consent. Under the TCPA, a plaintiff must have statutory standing to bring his claims. To determine whether Mr. Mann has statutory standing, this Court must determine whether Mr. Mann's claims fall within the zone of interests protected by the TCPA. Tel. Sci. Corp. v. Asset Recovery Sols., LLC, No. 15-CV-5182, 2016 WL 4179150, at *8 (N.D. Ill. Aug. 8, 2016) (St. Eve, J.) (citing Pennsylvania Chiropractic Ass'n v. Indep. Hosp. Indem. Plan, Inc., 802 F.3d 926, 928 (7th Cir. 2015)). The TCPA confers a private right of action on the basis of individualized violations; it does not permit a plaintiff to commence an action in the name of consumer protection. Tel. Sci. Corp., 2016 WL 4179150 at *9; see also 47 U.S.C. § 227(b)(3); Leyse v. Bank of Am. Nat. Ass'n, 804 F.3d 316, 323 (3d Cir. 2015) ("only certain plaintiffs will have suffered the particularized injury required to maintain an action in federal court for a [TCPA] violation . . . Someone with a generalized interest in punishing telemarketers, for example, would not qualify on that basis alone").

Mr. Mann alleges that Defendants used automatic dialing systems to call customers listed in the BOB on their cellular phones without their express consent. (Dkt. 14 ¶ 94). Mr. Mann cites 47 U.S.C. § 227(b)(1)(C) as the basis for his claim, but he does not allege in the complaint that Defendants reached out to the customers via fax. Therefore, Mr. Mann's claim is best treated as one brought under § 227(b)(1)(A)(iii), which prohibits calls made to cellular phones using automatic dialing systems. This...