Narrative Opinion Summary
In this case, plaintiffs Grace Village Health Care Facilities, Inc. and National Fellowship Brethren Retirement Homes, Inc. filed a lawsuit against Lancaster Pollard and Steven W. Kennedy, Jr., alleging breach of contract, professional negligence, misrepresentation, negligence per se, and breach of fiduciary duty related to the termination of interest-rate swap agreements. Defendants moved for partial dismissal, challenging the fraud claim under Rule 9(b) for lack of particularity, and seeking dismissal of the negligence per se claim based on unauthorized practice of law, arguing it cannot form the basis for a private action. The court granted the motion for partial dismissal, finding that the plaintiffs' fraud allegations lacked specificity and failed to meet Indiana's legal standards for actionable misrepresentations. The court also dismissed the negligence per se claim, holding that Indiana's statute does not support private civil actions, and concluded that the breach of fiduciary duty claim was redundant of the negligence allegations. Third-party defendants' motions to dismiss were denied as moot in light of recent developments, but the court left open the possibility of refiling. Consequently, the plaintiffs' fraud, negligence per se, and breach of fiduciary duty claims were dismissed, while other motions were deemed moot.
Legal Issues Addressed
Breach of Fiduciary Duty vs. Negligencesubscribe to see similar legal issues
Application: The breach of fiduciary duty claim is dismissed as it merely reformulates the negligence claims, lacking allegations of self-dealing or abuse of confidence.
Reasoning: The allegations of breaching fiduciary duties by failing to provide ordinary care and miscalculating amounts due relate back to negligence standards, making the claim redundant.
Fraud Claims and Misrepresentation of Legal Effectsubscribe to see similar legal issues
Application: The court finds that misrepresentations concerning the legal effect of termination notices for swap agreements do not constitute fraud under Indiana law.
Reasoning: The claims fail primarily due to misrepresentations concerning the legal effect of termination notices for Lehman swaps, which are deemed inactionable under Indiana law as established by the Seventh Circuit.
Negligence Per Se and Unauthorized Practice of Lawsubscribe to see similar legal issues
Application: The court holds that the unauthorized practice of law statute in Indiana cannot serve as the basis for a private civil action for negligence per se.
Reasoning: Indiana law does not allow criminal statutes against unauthorized practice of law to serve as the basis for private civil actions.
Pleading Fraud under Rule 9(b)subscribe to see similar legal issues
Application: The court applies Rule 9(b) to require that allegations of fraud be stated with particularity, ensuring the claims are substantiated rather than defamatory.
Reasoning: Rule 9(b) requires that allegations of fraud be pled with particularity to ensure they are substantiated rather than defamatory.