v.
Rosalind Franklin University of Medicine and Science
2015 IL App (2d) 140952 No. 2-14-0952 Opinion filed June 29, 2015 ______________________________________________________________________________
IN THE APPELLATE COURT OF ILLINOIS
SECOND DISTRICT ______________________________________________________________________________
ARMIN ABAZARI, ) Appeal from the Circuit Court ) of Lake County. Plaintiff-Appellant, ) ) v. ) No. 13-L-856 ) ROSALIND FRANKLIN UNIVERSITY OF ) MEDICINE AND SCIENCE, DR. WILLIAM ) M. SCHOLL COLLEGE OF PODIATRIC ) MEDICINE, and ROSALIND FRANKLIN ) UNIVERSITY HEALTH SYSTEM, ) Honorable ) Diane E. Winter, Defendants-Appellees. ) Judge, Presiding. ______________________________________________________________________________
PRESIDING JUSTICE SCHOSTOK delivered the judgment of the court, with opinion. Justice McLaren specially concurred, with opinion. Justice Birkett concurred in part and dissented in part, with opinion.
OPINION
¶1 After the plaintiff, Armin Abazari, graduated from the Dr. William M. Scholl College of Podiatric Medicine (Scholl College) of the Rosalind Franklin University of Medicine and Science (RFUMS), he was unable to obtain a placement in any of the residency programs to
which he applied. Frustrated by the shortage of residency slots available compared to the number of podiatry school graduates, he filed suit against Scholl College, RFUMS, and the Rosalind Franklin University Health System. The circuit court of Lake County dismissed his amended complaint with prejudice pursuant to section 2-615 of the Code of Civil Procedure
(Code) (735 ILCS 5/2-615 (West 2012)) for failure to state a claim. The plaintiff, acting pro se, 2015 IL App (2d) 140952 appeals the dismissal. We affirm the judgment but modify it to reflect that the dismissal of part of count II is without prejudice, and remand.
¶2 BACKGROUND
¶3 The following facts are drawn primarily from the allegations of the amended complaint which, at this point in the proceedings, must be taken as true unless contradicted by other allegations or by the contents of an exhibit attached to the complaint. Kolegas v. Heftel
Broadcasting Corp., 154 Ill. 2d 1, 8-9 (1992); Farmers Automobile Insurance Ass’n v. Danner, 394 Ill. App. 3d 403, 412 (2009). The following is a summary; additional facts are discussed in the context of particular legal arguments.
¶4 In 2003, RFUMS applied to the Illinois Board of Higher Education (IBHE) for permission to operate a program (Scholl College) offering the degree of “Doctor of Podiatric
Medicine” (DPM). In its description of the proposed program, RFUMS included the statement that “[a]fter graduation Scholl College places its graduates in 24[-] and 36[-]month residency training programs.” The application also stated that Scholl College expected to enroll about 90 students each year, for a total of 360 in the 4-year program. The IBHE approved the application for the DPM program.
¶5 The plaintiff alleges that, beginning no later than 2006, there was a nationwide shortage of residency placements for DPM graduates. That is, the schools granting DPM degrees were graduating more students than the number of available residency placements. This shortage was
the subject of various resolutions passed by the American Podiatric Medical Association in 2005, 2006, and 2009, calling on the podiatry schools to limit class size to the number of residencies available. Nevertheless, according to the plaintiff, the gap between the number of residencies and the number of graduating students continued to grow because the number of residencies remained constant while the number of graduates increased. The plaintiff alleges that the gap
140953
2015 IL App (2d) 140952 was relatively small in 2009 (the year he enrolled at Scholl College): there were 496 residencies available nationwide and the graduating class of 2010 was 505, a discrepancy of only 9.
However, by the 2013 (the year he graduated), there were 687 DPM graduates nationwide, with the result that, by the plaintiff’s estimate, 191 graduates would be unable to obtain placements.
¶6 In 2008, the plaintiff applied to Scholl College. He was offered admission, and enrolled in the fall of 2009. His class was 103 students. The plaintiff alleges that, in deciding to enroll at
Scholl College, he relied on the 2009-10 Scholl College catalog, which included the statement that there was “unprecedented opportunity for new doctors of podiatric medicine.” The catalog did not mention the shortage of available residency placements, and the plaintiff alleges that he could not reasonably have discovered that shortage prior to enrollment.
¶7 The plaintiff completed the coursework for his degree and was awarded a DPM degree in June 2013. In addition, he took two board examinations and passed both on the first try.
However, he did not obtain a residency placement. Almost all states (46), including Illinois, require DPM graduates to complete a residency before they can be licensed to practice podiatry.
Thus, although the plaintiff has earned his DPM degree, he cannot practice podiatric medicine.
¶8 The plaintiff is not alone in this predicament. As of April 5, 2013, 110 graduating DPM students nationwide had not obtained residency placements—about 17% of the total DPM graduates. A similar percentage of Scholl College 2013 graduates had not obtained residencies.
¶9 After he failed to obtain a residency, the plaintiff contacted various Scholl College officials to complain and seek their help. Scholl College decided to offer DPM graduates who had not received residencies the opportunity to obtain a certificate in health administration— which would require an additional four courses and approximately one more year of study—at no cost. Scholl College also offered “preceptorships” (unpaid teaching assistant positions) to graduates without placements. The stated purpose of both options was to allow the graduates a
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way to “keep current” with the field while waiting to see if they could obtain placements the following year. Citing his substantial student loans and financial pressure, the plaintiff declined to participate in either option.
¶ 10 In late 2013, assisted by counsel, the plaintiff filed suit against the defendants. The defendants moved to dismiss the complaint pursuant to section 2-615 of the Code (735 ILCS
5/2-615 (West 2012)). After briefing and oral argument, the trial court dismissed the complaint but allowed the plaintiff to replead. In May 2014, the plaintiff filed a four-count amended complaint. The defendants again moved to dismiss the complaint pursuant to section 2-615.
After briefing and argument, the trial court again granted the motion, this time with prejudice.
The plaintiff filed a timely notice of appeal.
¶ 11 ANALYSIS
¶ 12 A motion to dismiss brought under section 2-615 of the Code attacks the sufficiency of the complaint, on the basis that, even assuming the allegations of the complaint to be true, the complaint does not state a cause of action that would entitle the plaintiff to relief. 735 ILCS
5/2-615 (West 2012); Kolegas, 154 Ill. 2d at 8.
“In ruling on a section 2-615 motion to dismiss, the court must accept as true all well- pleaded facts in the complaint and all reasonable inferences which can be drawn
therefrom. [Citations.] In making this determination, the court is to interpret the allegations of the complaint in the light most favorable to the plaintiff. [Citation.] The question presented by a motion to dismiss a complaint for failure to state a cause of action is whether sufficient facts are contained in the pleadings which, if established, could entitle the plaintiff to relief. [Citation.] A cause of action should not be dismissed on the pleadings unless it clearly appears that no set of facts can be proved under the 140955
2015 IL App (2d) 140952 pleadings which will entitle the plaintiff to recover.” Bryson v. News America
Publications, Inc., 174 Ill. 2d 77, 86-87 (1996).
We review the sufficiency of the complaint de novo. Wallace v. Smyth, 203 Ill. 2d 441, 447
(2002).
¶ 13 The plaintiff’s amended complaint encompasses four claims, which are labeled “fraud,”
“fraudulent concealment,” “intentional misrepresentation,” and “negligent misrepresentation.”
In order to adequately state a claim, the complaint must allege facts that, if proven, would
establish the elements of the claim asserted. Board of Education of City of Chicago v. A, C & S, Inc., 131 Ill. 2d 428, 438 (1989). When a claim sounds in fraud, a higher degree of specificity is required. Id. at 457. “Thus, a plaintiff must *** plead with sufficient particularity facts establishing the elements of fraud, including what misrepresentations were made, when they were made, who made the misrepresentations and to whom they were made.” Id. We examine each of the plaintiff’s claims to see if these standards are met.
¶ 14 Counts I and III of the amended complaint assert claims of fraud. (Although count III is titled “intentional misrepresentation,” this is simply another name for fraud. Soules v. General
Motors Corp., 79 Ill. 2d 282, 286 (1980).) The elements of a fraud claim are: (1) a false statement of fact by the defendant, (2) made with the knowledge that the statement was false; (3) the defendant intended that the statement would induce the plaintiff to act; (4) the plaintiff justifiably relied upon the statement; and (5) the plaintiff suffered damages arising from that reliance. Connick v. Suzuki Motor Co., 174 Ill. 2d 482, 496 (1996).
¶ 15 In count I, the plaintiff identifies two statements as allegedly false. The first is RFUMS’s statement, made in its 2003 application to the IBHE for approval to offer the DPM program, that
Scholl College “places its graduates” in residency programs. Given that this statement referred to a program that was not yet in existence, it cannot be construed as describing a current or past
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state of affairs. Rather, it was at most a promise of future assistance to DPM graduates in obtaining residency placements. However, “[g]enerally, under Illinois law there is no action for promissory fraud, meaning that the alleged misrepresentations must be statements of present or preexisting facts, and not statements of future intent or conduct.” Ault v. C.C. Services, Inc., 232
Ill. App. 3d 269, 271 (1992). Moreover, the plaintiff has not alleged several other necessary elements with respect to this statement, such as that RFUMS knew that the statement was false
when it was made, that the statement was made with the intent to induce him to act, or that the plaintiff relied upon the statement in deciding to pursue a DPM degree at Scholl College.
Indeed, as to this last point, there is no allegation that the plaintiff was even aware of the statement at the time he enrolled at Scholl College. Thus, the allegations as to this statement do not state a claim of fraud.
¶ 16 The second allegedly false statement is the representation, contained in the plaintiff’s
diploma from Scholl College, that he had “honorably fulfilled all the requirements for the degree” of DPM. To begin with, there is no indication that this statement is in fact false—the plaintiff did complete the requirements to obtain the DPM degree, even if he did not obtain the residency he needed in order to qualify to practice as a DPM. There is a further fatal defect: the plaintiff has not alleged any way in which he could have relied upon this statement in deciding to enroll at Scholl College, inasmuch as the statement was made upon graduation, after he completed the program. And although he alleges that, through this statement, RFUMS intended to induce him to practice podiatry, the diploma does not state that he has obtained a license or is
fully qualified to practice podiatry in Illinois. Moreover, the complaint clearly reflects the plaintiff’s own knowledge that he cannot practice podiatry until he obtains a residency and, ultimately, a license. (For instance, the complaint cites section 11 of the Podiatric Medical
Practice Act of 1987 (225 ILCS 100/11 (West 2012)), which states that it is unlawful to practice
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podiatry in Illinois without a license except under the supervision of a licensed podiatrist.) Thus, the plaintiff cannot show that he relied to his detriment on the statement in the diploma. For all of these reasons, this statement cannot support a claim of fraud.
¶ 17 Finally, in count I the plaintiff makes reference to Scholl College’s offer, made to DPM graduates who had not obtained residencies, to enroll then in the health administration certificate program. The plaintiff alleges that this offer was made with the fraudulent intent to “buy off”
DPM graduates—toward whom the defendants had breached their duty to find residency placements—with a lesser degree. In essence, the plaintiff sketches the picture of a bait-and-
switch, in which he and other students were lured with the promise of practicing a growing and lucrative profession (podiatry) and took on years of work and many thousands of dollars in loans to obtain a DPM degree, but then were offered only a comparatively worthless professional alternative.
¶ 18 This claim rests on the plaintiff’s allegation that the defendants owed him and his fellow
DPM students a duty “under Illinois law” to obtain residency placements for them. However, the plaintiff fails to provide any support for his bare assertion that this duty exists. Nowhere in his amended complaint does the plaintiff allege facts that would give rise to such a duty, and the plaintiff has not identified any legal source of such a duty. While the resolutions adopted by the American Podiatric Medical Association strongly suggest an ethical and moral duty on the part of DPM schools to limit enrollments to the number of residency slots available to graduates, they
do not establish a legal duty to provide DPM students with residency placements. Similarly, although RFUMS’s statement in the application to the IBHE reflected a belief that Scholl
College students would obtain residencies, the plaintiff has not shown that the statement gave rise to a contractual obligation to provide or ensure such residencies for all Scholl College students. Under these circumstances, the plaintiff has not established that the defendants could
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be found legally liable for fraud based upon their conduct in offering the certificate program in health administration as an alternative for DPM graduates who did not obtain residencies.
Accordingly, count I fails to state a claim upon which relief can be granted, and the trial court did not err in dismissing it.
¶ 19 We turn to count III, which raises a similar claim of fraud, based upon different statements. In this count the plaintiff identifies two allegedly false statements: (1) a statement
in the 2009-10 Scholl College catalog that its mission was “to educate those who will serve—the students,” and (2) a verbal statement that Dr. Martin Yorath, the surgery chair at Scholl College, made during a July 18, 2011, presentation to the class of 2013, to the effect that, if students passed the board examinations, they would “most likely match” (i.e., obtain residencies). As to
the first statement, the plaintiff alleges that he was not truly “educated” by Scholl College, because he was unable to obtain a residency and thus cannot practice (“serve”) as a podiatrist.
However, this assertion rests on a matter of opinion—whether a person who successfully completes the requirements for an advanced degree has been “educated,” even if he has not obtained the postgraduate residency needed in order to be licensed to practice his profession. As a general rule, a fraud claim cannot be based on a matter of opinion. Schrager v. North
Community Bank, 328 Ill. App. 3d 696, 704 (2002); see also Neptuno Treuhand-Und
Verwaltungsgesellschaft MBH v. Arbor, 295 Ill. App. 3d 567, 571 (1998) (citing Restatement
(Second) of Torts § 538A, Explanatory Note, at 83 (1977), which defines “opinion” in part as “a statement of the maker’s judgment as to quality, value, authenticity or similar matters as to which opinions may be expected to differ”). Here, opinions may be expected to differ as to whether the concept of “education” involves not only the successful completion of coursework and examinations, but also placement into a postgraduate residency. Accordingly, this statement cannot serve as the basis for a claim of fraud.
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¶ 20 The same problem exists with respect to the second statement identified in count III: it is a statement of opinion, not fact. Indeed, the plaintiff acknowledges that Dr. Yorath expressed a belief that students who passed the board examinations would “most likely” obtain residencies.
When the speaker expresses only his own belief about a matter, without certainty, his statement is one of opinion, not fact. Neptuno, 295 Ill. App. 3d at 571. Accordingly, neither of these
statements can support a claim of fraud, and the trial court did not err in dismissing count III for failure to state a claim.
¶ 21 We next consider count IV, the claim of negligent misrepresentation, as it is a close cousin to a fraud claim. “Negligent misrepresentation has essentially the same elements [as fraud], except that the defendant need not know that the statement is false ***.” Avon Hardware
Co. v. Ace Hardware Corp., 2013 IL App (1st) 130750, ¶ 15. Instead, it is enough if the defendant is careless or negligent in ascertaining whether the statement is true. Id. In addition, a plaintiff alleging negligent misrepresentation must allege that the defendant owed him a duty to communicate accurate information. Id.
¶ 22 In count IV, the plaintiff alleges that the defendants made two negligent misrepresentations in the 2009-10 Scholl College catalog. The first was this statement: “While not all students may choose a PM&S-36 residency program, it is the aim of this Office to insure that all students are at least aware that three years of post-graduate training in a PM&S-36 program are considered the current state of the art for post-graduate training in podiatric medicine and podiatric surgery.” In his amended complaint, the plaintiff does not take issue with the second part of this statement (the assertion that “the current state of the art” for postgraduate training in podiatry is a three-year residency program). Rather, he alleges that the defendants were negligent as to the truth of the first part of this statement—the suggestion that Scholl
College students would be able to “choose” a three-year residency program if they wished. The 140960
2015 IL App (2d) 140952 plaintiff points out that, at the time this statement appeared in the catalog, Scholl College had already over-enrolled its class of 2013 in comparison to the amount of residency placements that would be available when those students graduated. The plaintiff also alleges that the defendants had a responsibility to publish accurate information in the catalog, in light of section 1030.60(a) of Title 23 of the Illinois Administrative Code, which includes the following criterion among its requirements for new degree programs:
“The information the institution provides for students and the public shall accurately
describe the degree programs offered, program objectives, length of program, schedule of tuition, fees, and all other charges and expenses necessary for completion of the course of study, cancellation and refund policies, and such other material facts concerning the institution and the program or course of instruction as are likely to affect the decision of the student to enroll.” (Emphasis added.) 23 Ill. Adm. Code 1030.60(a)(7) (2012).
¶ 23 This statement—that “not all students may choose a [three-year] residency program”—is not, in itself, a false statement of fact. Indisputably, some students who enroll in professional graduate studies eventually choose not to pursue the additional steps necessary to practice those professions. And, even viewed in the light most favorable to the plaintiff, the statement cannot
be read as promising that all students will have the ability to choose among different types of residencies. Thus, this statement cannot support a claim of negligent misrepresentation.
¶ 24 The second statement the plaintiff identifies as a negligent misrepresentation is also from
the 2009-10 Scholl College catalog, which stated that there was “unprecedented opportunity for new doctors of podiatric medicine.” (The previous year’s catalog contained a similar claim that
“the options for practice within the profession are varied and the opportunities for personal
growth and success are limitless.”) The plaintiff asserts that the defendants were negligent in presenting these statements, as they failed to convey that the opportunity to practice as a doctor - 10 -
2015 IL App (2d) 140952 of podiatric medicine was in fact limited, given that the number of residency placements was limited.
¶ 25 These statements about “unprecedented” and “limitless” opportunity in the field of podiatric medicine cannot form the basis for a negligent misrepresentation claim, however, because they are merely “puffing”—a seller’s rosy descriptions of possible outcomes from using
its product. “ ‘Puffing’ denotes the exaggerations reasonably to be expected of a seller as to the degree of quality of his or her product, the truth or falsity of which cannot be precisely determined.” Avery v. State Farm Mutual Automobile Insurance Co., 216 Ill. 2d 100, 173-74
(2005). Further, projections of future performance are generally not actionable as false statements, because they are considered opinions rather than statements of present or preexisting fact. Avon Hardware, 2013 IL App (1st) 130750, ¶ 17. Accordingly, the allegations contained in count IV do not state a valid claim of negligent misrepresentation.
¶ 26 We therefore turn to the remaining claim asserted by the plaintiff (count II), which alleges that the defendants fraudulently concealed certain material facts from him in order to
induce him to enroll in the Scholl College DPM program. First , he alleges that the defendants, in the Scholl College catalog and recruitment materials, concealed the fact that the number of residencies then available each year was insufficient to meet the needs of the likely number of DPM graduates in the class of 2013, so that some students would not obtain the residencies they would need in order to practice. Second, he alleges that the catalog made reference to “the 360 plus Scholl students” and failed to mention that RFUMS had stated, in its 2003 application, that it would enroll only 90 students per year, or mention that the Council on Podiatric Medical
Education had recommended a yearly enrollment cap of 98 students. Accordingly, he failed to realize that his entering class size of 103 represented an overenrollment by Scholl College.
Third, he alleges that, on November 23, 2008, he told Mandy Meinhardt, the director of - 11 -
2015 IL App (2d) 140952 recruitment in the admissions office of Scholl College, about his hesitation to enroll and his
desire to minimize his student loan burden so that he could graduate with the least amount of debt. Meinhardt responded by email the next day, stating that “[l]ast year, Scholl College had a
0% default rate for student loans,” and its 10-year average for loan default was only 0.3%. The plaintiff alleges that this response omitted the material fact that Scholl College’s default rate was
likely to increase as a result of its increasing enrollment each year despite the lack of commensurate growth in the number of residencies available. [1]
¶ 27 To state a claim for fraudulent concealment, a plaintiff must allege the following elements: “(1) the defendant concealed a material fact under circumstances that created a duty to speak; (2) the defendant intended to induce a false belief; (3) the plaintiff could not have discovered the truth through reasonable inquiry or inspection, or was prevented from making a reasonable inquiry or inspection, and justifiably relied upon the defendant’s silence as a representation that the fact did not exist; (4) the concealed information was such that the plaintiff would have acted differently had he or she been aware of it; and (5) the plaintiff’s reliance resulted in damages.” Bauer v. Giannis, 359 Ill. App. 3d 897, 902-03 (2005).
¶ 28 As with other claims sounding in fraud, the information at issue must be material and must relate to an existing or past state of affairs: projections of future events generally will not support a fraud-related claim. Rasgaitis v. Waterstone Financial Group, Inc., 2013 IL App (2d)