Apex Med. Research, AMR, Inc. v. Ahmed A. Arif
| Citation | 145 F.Supp.3d 814 |
| Decision Date | 18 November 2015 |
| Docket Number | No. 15 C 2458,15 C 2458 |
| Parties | Apex Medical Research, AMR, Inc., and Apex Medical Research, MI, Inc., Plaintiffs, v. Ahmed A. Arif, AA MRC, LLC, Ahmed A. Arif, M.D., P.C., and Apex Medical Research of Flint, P.C., Defendants. Ahmed A. Arif and Ahmed A. Arif M.D., P.C., Counter-Plaintiffs, v. Apex Medical Research, AMR, Inc., Apex Medical Research, MI, Inc., and Nusrat Deen Ahmed, Counter-Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Lawrence S. Beaumont, Lawrence S. Beaumont, Matthew Farrish Prewitt, Shawna Shannon Boothe, Schiff Hardin, LLP, Megan Christine Adams, Din Law, LLC, Chicago, IL, for Plaintiffs/Counter-Defendants.
John Conroy Martin, Sharon Doherty Sirott, Martinsirott LLC, Chicago, IL, for Defendants/Counter-Plaintiffs.
Before the Court are the parties' cross-motions for summary judgment. Apex Medical Research, AMR, Inc. (“Apex AMR”), moved for partial summary judgment pursuant to Federal Rule of Civil Procedure 56
on its claims for breach of contract and breach of fiduciary duty against Defendant Ahmed A. Arif (“Dr. Arif”). (R.30.) Plaintiffs and Counter-Defendants, Apex AMR and Apex Medical Research, MI, Inc. (“Apex Michigan” or “Apex-MI”), and Counter-Defendant Nusrat Deen Ahmed (“Ms. Ahmed”) (collectively, the “Apex Parties”) also moved for summary judgment on Counter-Plaintiffs Dr. Arif and Ahmed A. Arif, M.D., P.C.'s (“Arif P.C.'s”) unjust enrichment claim (Counterclaim II). (Id. ) Defendants and Counter-Plaintiffs Dr. Arif and Arif P.C., along with Defendants AA MRC, LLC (“AA MRC”) and Apex Medical Research of Flint, P.C. (“Apex Flint”) (collectively, the “Arif Parties”) responded with a cross-motion for partial judgment on the pleadings, or in the alternative, for summary judgment as to their declaratory judgment claim (Count VII of the Counterclaim) against the Apex Parties and as to the Apex Parties' breach of fiduciary duty claim (Count IV of the Amended Compl.). (R.34.)
A brief review of the underlying state court action and the alleged claims and counterclaims in the present action provides helpful context for the disputes in this case. On February 20, 2015, Plaintiff Apex AMR, filed this action in the Circuit Court of Cook County, Illinois, against Defendant Dr. Arif. (See R.1, Notice of Removal; R.1-1, Apex Medical Research, AMR, Inc. v. Ahmed Arif , Case No. 2015–L–1799, Circuit Court of Cook County, Illinois, Law Division, Complaint.) Plaintiff Apex AMR asserted two breach of contract claims against Dr. Arif. (R.1, ¶ 1; R.1-1, ¶¶ 18-25.) According to the Cook County complaint, “Apex-AMR represented by Azauddin Ahmed and Nusrat Ahmed, entered into a contract with its subsidiary, [Apex Michigan] represented by Arif, whereby Apex-AMR assisted [Apex Michigan] in acquiring and conducting medical trials at its offices.” (R.1-1, ¶ 1; id ., Ex. 1, Contract Agreement between Apex Medical Research, AMR, Inc. & Ahmed A. Arif, MD (“the Agreement”).) Apex AMR claimed that “[i]n violation of the contract, Arif, the principal physician of [Apex Michigan], started his own research site, AAMRC (Ahmed Arif Medical Research Center) and solicited Apex-AMR's preferred vendor.” (R.1-1, ¶ 4.)
Defendant Dr. Arif removed the case to federal court pursuant to 28 U.S.C. §§ 1441
and 1446, premising federal jurisdiction on diversity, 28 U.S.C. § 1332. (See Stmt. of Undisputed Facts, ¶ 8.)1 Plaintiffs Apex AMR and Apex Michigan have since filed their First Amended Complaint against Defendants Dr. Arif and AA MRC, related to the Agreement. (See generally , R.14, Am. Compl.) Plaintiffs allege breach of contract claims against Dr. Arif based on the Non-Compete Clause (Count I) and the Confidentiality Clause (Count II) of the Agreement, and further allege that Dr. Arif breached his fiduciary duty (Count IV). (See R.14, ¶¶ 45-50 (Count I); ¶¶ 51-56 (Count II); ¶¶ 65-70 (Count IV).) In addition, Plaintiffs allege various claims against both Dr. Arif and AA MRC, including misappropriation of trade (Count III), tortious interference with contract (Count V), tortious interference with business opportunities (Count VI), and conversion (Count VII). (See R.14, ¶¶ 57-64 (Count III); ¶¶ 71-78 (Count V); ¶¶ 79-85 (Count VI); ¶¶ 86-91 (Count VII).) Plaintiffs request injunctive relief restraining Defendants Dr. Arif and AA MRC from further breaches of the Non-Compete Clause and from disclosing or using trade secrets or confidential information. (Id. , at 17.) In addition to an award for actual damages, enhanced damages, punitive damages, and attorneys' fees and costs, Plaintiffs request an accounting of the business that Dr. Arif and AA MRC conducted in allegedly breaching their fiduciary duties and ask the Court to impose on the proceeds of that business a constructive trust for the benefit of Plaintiffs. (Id. )
Defendants Dr. Arif and AA MRC responded with their Answer, Defenses, and Counterclaims asserting affirmative defenses for: (1) setoff; (2) statute of frauds; (3) equitable forfeiture; and (4) unclean hands. (R.21, Affirmative Defenses, ¶¶ 1-9.) In addition, Counter-Plaintiffs Dr. Arif and Arif P.C. alleged counterclaims against Counter-Defendants Apex AMR, Apex Michigan, and Ms. Ahmed. Specifically, Dr. Arif and AA MRC alleged counterclaims for breach of contract against Apex AMR (Counterclaim I); breach of fiduciary duty against Counter-Defendants Apex AMR, Apex Michigan, and Ms. Ahmed (Counterclaim III); fraud (Counterclaim IV) and conversion (Counterclaim V) against Apex AMR and Ms. Ahmed; statutory accounting (Counterclaim VI) against Apex Michigan and Ms. Ahmed; and unjust enrichment (Counterclaim II) and a declaratory judgment that the Agreement did not give rise to a joint venture, that it has been properly terminated by Dr. Arif, and that any entities associated with Dr. Arif are entitled to enter into new contracts without owing compensation (Count VIII) against Apex AMR and Apex Michigan. (See R.21, Counterclaims, ¶¶ 60-93.) After Defendants and Counter-Plaintiffs answered Plaintiffs' Amended Complaint, the Court granted the parties Stipulated and Agreed Order for Joinder of Additional Defendants Arif P.C. and Apex Flint—“two additional corporate entities, of which Dr. Arif is a shareholder, that received certain payments that Plaintiffs previously had alleged were received either by Dr. Arif directly or by AA MRC.”2 (R.26, ¶ 1.)
Counter-Defendants Apex AMR, Apex Michigan and Ms. Ahmed responded with their Answer to Counter-Plaintiffs' Counterclaims and Affirmative Defenses asserting their affirmative defenses that: (1) Counter-Plaintiffs fail to state a claim upon which relief can be granted; (2) setoff; (3) waiver; (4) election; (5) unclean hands; (6) prior material breach; (7) breach preventing performance; (8) lack of privity; (9) economic loss doctrine; (10) statute of frauds; and (11) equitable forfeiture. (See generally , R.29.)
Plaintiff Apex AMR has moved for partial summary judgment pursuant to Federal Rule of Civil Procedure 56
on its claims for breach of contract and breach of fiduciary duty against Defendant Dr. Arif. (R.30.) The Apex Parties have also moved for summary judgment on Counter-Plaintiffs' unjust enrichment claim (Counterclaim II). (Id. ) The Arif Parties responded with a cross-motion for partial judgment on the pleadings, or in the alternative, for summary judgment as to Plaintiffs' breach of fiduciary duty claim (Count IV of the Am. Compl.) and the declaratory judgment claim (Count VII of the Counterclaim) against the Apex Parties. (R.34.) The Apex Parties also filed a motion to strike Defendants/Counter-Plaintiffs' Reply Memorandum in Support of their Motion for Partial Summary Judgment on the Pleadings or in the Alternative for Summary Judgment and in Further Opposition to the Apex Parties' Motion for Partial Summary Judgment. (R.42.) The Court denies the Apex Parties' motion to strike as the Arif Parties' Reply did not contain new arguments and further notes that the supplemental brief provided the Arif Parties the opportunity to respond to issues raised by the Apex Parties in their Response. The Court disregards any unsupported factual assertions raised in the Arif Parties' Reply. The Court also disregards new arguments raised and new exhibits presented for the first time in the Apex Parties' Motion to Strike.
Finally, in addition to opposing the Apex Parties' partial summary judgment, the Arif Parties moved for judgment on the pleadings, or in the alternative for summary judgment, as to Count IV of the First Amended Complaint and as to Count VII of their Counterclaim. (See R.34; R.35.) Under Rule 12(d) of the Federal Rules of Civil Procedure
, a court must treat a motion for judgment on the pleadings as a motion for summary judgment if the parties submit matters outside the pleadings. See
General Ins. Co. of America v. Clark Mall Corp. , 644 F.3d 375, 378 (7th Cir.2011) (citing Fed. R. Civ. P. 12(d) () The Court treats the present motions as ones for summary judgment based on both parties' reliance on facts outside of the pleadings and notes that the Apex Parties admit they will not suffer prejudice by this determination because they were on notice and submitted evidentiary materials in opposition to the Arif Parties' motion for partial summary judgment. (See R.35, at 3-4.)
As outlined in the extensive briefing before the Court, the crux of the dispute between the parties revolves around the relationship and enterprise formed between the parties and the parties' performance under the Agreement—namely, Apex AMR's performance in distributing payment and Dr. Arif's performance in regard to AA MRC and redistribution of payments. The dispute also highlights an issue that...
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