MI Dismiss

Case 1:18-cv-02797-WTL-DML Document 25 Filed 02/28/19 Page 1 of 2 PageID #: 169
IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
LARRY AND LESLIE KAY MCLESKEY; )

DEEPAK NEELAGIRI AND REENA )
GADAGOTTU; ALANANN PROPERTIES, )
LLC; CARLOS HUERTA HOMES IN, LLC; )
LEJ MANAGEMENT, LLC; BN INVEST, )
LLC; GALVESTON, LLC; BKS IN )
PROPERTIES, LLC; DL3 PROPERTIES, )
LLC IN1801; COVENANTAL CORP.; )
1446 MOUNT, LLC; 300 REAL ESTATE )
INVESTMENTS, LLC; FINNLEY INVEST, )
LLC; and AR FINANCIALS, LLC )
)
Plaintiffs, )
)
v. ) Case No. 1:18-cv-02797-WTL-DML
)
MORRIS INVEST and CLAYTON MORRIS, )
)
Defendants. )
MORRIS INVEST’S AND CLAYTON MORRIS’S PARTIAL

MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT
PURSUANT TO RULES 12(B)(6) AND 9(B)
Defendants Morris Invest and Clayton Morris (collectively “Morris
Defendants”) by counsel, pursuant to Rules 12(b)(6) and 9(b) of the Federal Rules of
Civil Procedure and Rule 7.1 of the Local Rules of the Court for the United States
District Court for the Southern District of Indiana, respectfully move this Court to
dismiss the Plaintiffs’ Amended Complaint. Defendants seek dismissal of Counts II,
III, IV, V, and VI in their entirety, and portions of Count I of the Plaintiffs’ Amended
Complaint. The grounds for this motion are set forth in the Brief in Support of Morris
Invest’s and Clayton’s Morris’s Partial Motion to Dismiss Plaintiffs’ Amended

Complaint, filed contemporaneously herewith.
WHEREFORE, the Morris Defendants respectfully move this Court to dismiss,
with prejudice, the entirety of Counts II, III, IV, V, and VI, and portions of Count I
premised on expired Purchase Agreements or terms not in the written contracts, as
follows:
 Claims premised on an expired Purchase Agreement: Deepak Neelagiri and
Reena Gadagottu, Carlos Huerta Homes IN, LLC, and 300 Real Estate In-
vestments, LLC (1117 W. Roache St. property);
 All Plaintiffs’ claims premised on alleged Tenant Services or alleged Prop-
erty-Management Services; and
 Claims premised on a failure to complete Rehab Services when they are not
terms in the contracts: Deepak Neelagiri and Reena Gadagottu, Carlos
Huerta Homes IN, LLC, BN Invest, LLC (2371 North Gale Street property),
BKS IN Properties, LLC, Covenantal Corp., 300 Real Estate Investments,
LLC (4631 E. 34th Street property), and AR Financials, LLC (3001 East
Michigan Street property).
Respectfully submitted,
/s David J. Hensel
David J. Hensel, #15455-49
Amanda L.B. Mulroony, #30051-53
Timothy W. Walters, #35401-79
HOOVER HULL TURNER LLP
111 Monument Circle, Suite 4400
PO Box 44989
Indianapolis, IN 46244-0989
Tel: (317) 822-4400
Fax: (317) 822-0234
Counsel for Morris Invest and Clayton Morris
2


)
Plaintiffs, )
)
)
)
Defendants. )
BRIEF IN SUPPORT OF MORRIS INVEST’S AND CLAYTON MORRIS’S

PARTIAL MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT
PURSUANT TO RULES 12(B)(6) AND 9(B)
Defendants Morris Invest and Clayton Morris (collectively “Morris Defend-
ants”), by counsel, pursuant to Rules 12(b)(6) and 9(b) of the Federal Rules of Civil
Procedure and Rule 7.1 of the Local Rules of the Court for the Southern District of
Indiana, move this Court to dismiss Plaintiffs’ Amended Complaint for failure to state
a claim upon which relief can granted. Plaintiffs’ Amended Complaint should be dis-
missed for the following reasons:
 the breach-of-contract claims fails because (i) a condition subsequent was vio-
lated in 8 of the Plaintiffs’ contracts, rendering them non-actionable and (ii)

the agreements show the Morris Defendants had no tenant- or property-man-
agement-related contractual obligations and some agreements have no refer-
ence to rehabilitation at all;
 the promissory-estoppel claims sound in fraud but were not pleaded with par-
ticularity, and contracts are alleged to exist that cover the express subject mat-
ter;
 the fraud/deception claims were not pleaded with the particularity required by
Rule 9(b), involve non-actionable statements of future conduct or opinion, and
the alleged injury for the fraud is not distinct from the alleged injury for the
breach of contract;
 Indiana does not allow conversion claims alongside breaches of contract, and
the money at issue does not qualify as a special chattel;
 the Morris Defendants did not owe the Plaintiffs any duties, and the negligence
claims are barred by the economic-loss doctrine; and
 the facts and conduct alleged by Plaintiffs does not fit within the scope of the
Indiana Deceptive Consumer Sales Act.
Because of these failures, this Court should dismiss the entirety of Counts II, III, IV,
V, VI, and portions of Count I of Plaintiffs’ Amended Complaint with prejudice.
2
INTRODUCTION1
Clayton Morris is a co-founder of Morris Invest, a company that offers real-
estate investment information with the goal of individuals earning passive income.
Am. Compl. ¶¶22-23. The Plaintiffs, 20 individuals separated into 14 distinct owner-
ship groups, entered into 23 separate and distinct Purchase Agreements to buy 23
different properties for investment purposes over a more than one-year time period.2
See Am. Compl. ¶¶ 2, 52-65. Although Clayton Morris signed each Purchase Agree-
ment, neither he nor Morris Invest owned or sold any property to the Plaintiffs. See
Am. Compl. ¶32 and Exh. 1. Clayton Morris and Morris Invest were marketers and
finders, connecting interested buyers to interested sellers and property managers.
See generally id. at ¶30. After the Plaintiffs purchased their respective properties
from Oceanpointe Investments Limited, Indy Jax Wealth Holdings, LLC, or Indy Jax
Properties, LLC, one of those entities was supposed to renovate the properties, but
did not. Id. at ¶¶37, 45, 47. The Plaintiffs now allege Oceanpointe’s or Indy Jax’s
failure to rehab the properties, properly find and secure tenants, and other property-
management issues can serve as the basis for claiming that Clayton Morris breached
his contract with them3 and that the Morris Defendants committed various frauds.
1The Morris Defendants dispute the allegations and characterizations in Plaintiffs’ Amended Com-
plaint and deny all liability. But, for purposes of this Motion only, they are taken as true.
2 Defendants’ motion to dismiss for improper joinder of plaintiffs is forthcoming.
3 Defendant Morris Invest is not party or signatory to any Purchase Agreement.
3
See, e.g., id. at ¶¶4, 47, 49. The Morris Defendants are not owners, members, manag-
ers, employers, or employees of Oceanpointe Investments Limited, Indy Jax Wealth
Holdings, LLC, or Indy Jax Properties, LLC.
Plaintiffs initially filed their Complaint against the Morris Defendants on Sep-
tember 11, 2018, and amended their pleading on January 4, 2019 to remove and add
Plaintiffs, and to add paragraphs containing allegations unique to each Plaintiff. The
Amended Complaint is the second attempt to plead cognizable claims against Defend-
ants. Plaintiffs fail to do so and their claims should be dismissed with prejudice for
the reasons stated herein.
STANDARD OF REVIEW
To survive a motion to dismiss, a “complaint must contain allegations that
‘state a claim to relief that is plausible on its face.’” McCauley v. City of Chicago, 671
F.3d 611, 615 (7th Cir. 2011) (citing Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)).
“‘A claim has facial plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the mis-
conduct alleged.’” Id. (quoting Iqbal, 129 S. Ct. at 1949). Courts “accept the well-
pleaded facts in the complaint as true, but legal conclusions and conclusory allega-
tions merely reciting the elements of the claim are not entitled to this presumption
of truth.” Id. at 616 (citing Iqbal, 129 S. Ct. at 1951). After “excising” legal conclusions
and conclusory allegations, the court must determine “whether the remaining factual
allegations ‘plausibly suggest an entitlement to relief.’” Id. (quoting Iqbal, 129 S. Ct.
at 1951).
4
To be plausible, the remaining factual allegations must “raise a right to relief
above the speculative level.” Bell Atl. Co. v. Twombly, 550 U.S. 544, 555 (2007). Alle-
gations “giv[ing] rise to an ‘obvious alternative explanation,’” McCauley, 671 F.3d at
616 (quoting Iqbal, 129 S. Ct. at 1951; Twombly, 550 U.S. at 567), “may ‘stop[] short
of the line between possibility and plausibility,’” id. (alteration in original) (quoting
Twombly, 550 U.S. at 567). A court necessarily relies on “judicial experience and com-
mon sense” to determine plausibility in context. Id. (quoting Iqbal, 556 U.S. at 679).
More complex cases require more detailed pleading. Id. The point of the notice re-
quirement “is less to give the defendant enough information to begin to prepare a
defense . . . than to allow the court to determine at the outset of the litigation, before
costly discovery is undertaken, whether the plaintiff has any tenable theory or basis
of suit, so that if he does not the case can be got rid of immediately without clogging
the court’s docket and imposing needless expense on the defendant.” Ryan v. Mary
Immaculate Queen Ctr., 188 F.3d 857, 860 (7th Cir. 1999).
Rule 9(b) imposes an even higher pleading standard on plaintiffs who have
claims in fraud or that “sound in fraud.” See Pirelli Armstrong Tire Corp. Retiree Med.
Benefits Tr. v. Walgreen Co., 631 F.3d 436, 441 (7th Cir. 2011) (“[A] party who alleges
fraud or mistake ‘must state with particularity the circumstances constituting fraud
or mistake.’” (quoting Fed. R. Civ. P. 9(b))); see also Borsellino v. Goldman Sachs Grp,
Inc., 477 F.3d 502, 507 (7th Cir. 2007). “A plaintiff ordinarily must describe the ‘who,
what, when, where, and how’ of the fraud—‘the first paragraph of any newspaper
story.’” Pirelli, 631 F.3d at 441-42 (quoting United States ex rel. Lusby v. Rolls-Royce
Corp., 570 F.3d 849, 854 (7th Cir. 2009)). Courts require heightened pleading for
5
fraud allegations “to discourage a ‘sue first, ask questions later’ philosophy,” id. at
441, and “in part because of the potential stigmatic injury that comes with alleging
fraud and the concomitant desire to ensure that such fraught allegations are not
lightly leveled.” Id. at 442.
ARGUMENT
1. Plaintiffs’ Count I for breach of contract should be dismissed because

(i) various Purchase Agreements expired by their own terms and (ii)
there are no contractual obligations supporting breaches alleged by
Plaintiffs.
Plaintiffs’ breach-of-contract claims allege that each Plaintiff “entered into
Agreements with Defendants providing that, for the purchase price of each Rental
Property, Defendants would sell the Rental Properties to Plaintiffs, rehabilitate the
properties, identify tenants, screen tenants, secure tenants, manage the Rental Prop-
erties, and provide rent checks to Plaintiffs.” Am. Compl. ¶67. See also id. at ¶¶ 6, 8-
21, 38, 52-65. Rather than attach the Agreements, the Plaintiffs merely provided an
“exemplar” for one property purchased by Plaintiff “300 Real Estate Investments,
LLC.” Id. at ¶68 and Exh. 1 to Am. Compl. The Morris Defendants hereby attach and
incorporate into the pleadings the rest of the Purchase Agreements with named
Plaintiffs. See Exhibits 1-23.4
4 It is “well-settled in this circuit that 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.” Mueller
v. Apple Leisure Corp., 880 F.3d 890, 895 (7th Cir. 2018); see also Brownmark Films, LLC v. Comedy
Partners, 682 F.3d 687, 690 (7th Cir. 2012) (noting that the incorporation-by-reference doctrine allows
defendants to attach documents on a motion to dismiss that are referred to and central to a plaintiff’s
complaint without converting the motion to one for summary judgment). The incorporation-by-refer-
ence doctrine applies “where a claim arises from a contract or other written agreement between the
parties, but the plaintiff neglected to attach all or certain relevant parts of that writing to the com-
plaint, and where the complaint repeatedly refers to that writing.” Truhlar v. John Grace Branch No.
825 of the Nat’l Ass’n of Letter Carriers, No. 06 C 2232, 2007 WL 1030237, at *8 (N.D. Ill. Mar. 30.
2007).
6
The Purchase Agreements directly contradict Plaintiffs’ allegations of (i) the
existence of a contract and/or (ii) alleged contractual obligations of the Morris De-
fendants. These Agreements show that the vast majority of the Plaintiffs’ breach of
contract claims fail because (i) 8 of the Purchase Agreements expired by their own
terms; (ii) 12 Purchase Agreements lack any of the terms the Morris Defendants al-
legedly breached; and (iii) 9 Purchase Agreements contain only language related to
property rehabilitation, and not any tenant-related and property management is-
sues.5
a. Eight Purchase Agreements expired and terminated by their

own Terms.
Each Purchase Agreement has a clause stating that “[t]he closing of the sale .
. . shall be on or before [a date], or with[in] 10 [days] after title commitment, which-
ever is later or this Agreement shall terminate unless an extension of time is mutu-
ally agreed to in writing.” See Exh. 1, ¶7 (“Closing Deadline”).6 This Closing Deadline
is a condition subsequent, which “if performed or violated, as the case may be, defeats
the contract.” Dvorak v. Christ, 692 N.E.2d 920, 924 (Ind. Ct. App. 1998) (holding that
5 Furthermore, Morris Invest is not a party or signatory to any Purchase Agreement. It is axiomatic
that a defendant to a breach-of-contract claim is necessarily a party to a contract. Corry v. Jahn, 972
N.E.2d 907, 913 (Ind. Ct. App. 2012) (noting that homeowners had no cause of action for breach of
contract against a company with whom the homeowners had no contract); Columbia Club v. Am.
Fletcher Realty Corp., 720 N.E.2d 411, 417 (Ind. Ct. App. 1999) (“A person typically cannot be held
liable for breach of contract unless it is shown that he was a party to the contract.”); see also E.E.O.C.
v. Waffle House, Inc., 534 U.S. 279, 294 (2002) (“It goes without saying that a contract cannot bind a
nonparty.”); Northbound Grp. v. Norvax Inc., 795 F.3d 647, 650 (7th Cir. 2015) (“[A] party to a contract
[cannot] sue a non-party for breach of the contract simply because the non-party has a close relation-
ship with the other party to the contract who has breached.”) (emphasis in original). Therefore, any
purported breach-of-contract claim leveled against Morris Invest fails to state a legally recognizable
claim.
6 Nine of the Purchase Agreements identify the Closing Deadline in ¶6 rather than ¶7.
7
the failure to obtain necessary financing by a specified date violated a condition sub-
sequent so that the purchase agreement terminated by its own terms). Here, 8 prop-
erties did not close within the time required:
Closing-Date Citation for Required Citation for

Buyer Property Address Deadline Closing Date Pleaded Closing Date Pleaded Closing
Deepak Neelagiri and
Reena Gadagottu 4024 Eastern Avenue 1/31/2018 Exh. 2, ¶7 2/27/2018 Amended Compl. ¶53
Reena Gadagottu 3605 North Riley Avenue 1/31/2018 Exh. 3, ¶7 2/27/2018 Amended Compl. ¶53
Reena Gadagottu 1530 South Centennial Street 2/7/2018 Exh. 4, ¶7 2/27/2018 Amended Compl. ¶53
Reena Gadagottu 3702 Forest Manor Avenue 2/7/2018 Exh. 5, ¶7 2/27/2018 Amended Compl. ¶53
Reena Gadagottu 3417 North Drexel Avenue 2/14/2018 Exh. 6, ¶7 2/27/2018 Amended Compl. ¶53
Reena Gadagottu 2516 East 18th Street 2/21/2018 Exh. 7, ¶7 2/27/2018 Amended Compl. ¶53
Carolos Huerta Homes
IN, LLC (Carlos Huerta) 871 W. 25th Street 12/6/2017 Exh. 9, ¶7 12/17/2017 Amended Compl. ¶55
300 Real Estate
Investments, LLC (Jeffrey
Lemon) 1117 W. Roache St. 3/14/2018 Exh. 20, ¶6 5/4/2018 Amended Compl. ¶63
Because these properties were not sold on or before the expressed closing deadlines,
these Purchase Agreements expired by their own terms and any breach of contract
claim premised on them fails to state a claim upon which relief can be granted.
b. The Purchase Agreements contradict the alleged bases for

Plaintiffs’ breach-of-contract claims.
The Purchase Agreements also contradict the Plaintiffs’ allegations that the
Morris Defendants were contractually obligated to perform various services that form
the bases for Plaintiffs’ breach-of-contract claims against the Morris Defendants. The
Plaintiffs allege that the Morris Defendants contracted to sell the Properties, “reha-
bilitate the properties, identify tenants, screen tenants, secure tenants, manage the
Rental Properties, and provide rent checks to Plaintiffs.” Am. Compl. ¶67. The Plain-
tiffs then allege three breaches: (i) that “Defendants breached the Agreements with
8
Plaintiffs by accepting the funds from Plaintiffs intended to purchase and rehabilitate
the properties, then failing to rehabilitate the properties” (“Rehab Services”); (ii) that
“Defendants breached the Agreements with Plaintiffs by failing to identify, screen,
and secure tenants for the Rental Properties” (“Tenant Services”); and (iii) that “De-
fendants breached the Agreements with Plaintiffs by failing to fulfill their property
management obligations with respect to the Rental Properties” (“Property-Manage-
ment Services”). Am. Compl. ¶¶70-72. But a thorough review of the Purchase Agree-
ments shows no terms relating to Tenant Services and Property-Management Ser-
vices. And 12 of the 23 Purchase Agreements contain no terms relating to Rehab Ser-
vices. While this Court is to accept well-pleaded allegations as true, that requirement
no longer holds when an allegation is contradicted by an exhibit. Bogie v. Rosenberg,
705 F.3d 603, 609 (7th Cir. 2013) (“When an exhibit incontrovertibly contradicts the
allegations in the complaint, the exhibit ordinarily controls, even when considering a
motion to dismiss.”). The Purchase Agreements do not contain terms or obligations
for which the Morris Defendants are alleged to have breached. These Purchase Agree-
ments show no contractual obligation for either Morris Defendant to perform most of
the alleged services:
9
Breach-of-Contract Claims and Allegations That Fail (contract obligations)
Exhibit Num. Buyer Property Address Contractual Obligations
Property-
Tenant
Rehab Services Management
Services
Services
Exhibit 1 Larry and Leslie McLeskey 866 W. 29th Street See ¶22 None None

Exhibit 2 4024 Eastern Avenue None None None
Reena Gadagottu

Exhibit 3 3605 North Riley Avenue None None None
Reena Gadagottu

Exhibit 4 1530 South Centennial Street None None None
Reena Gadagottu

Exhibit 5 3702 Forest Manor Avenue None None None
Reena Gadagottu

Exhibit 6 3417 North Drexel Avenue None None None
Reena Gadagottu

Exhibit 7 2516 East 18th Street None None None
Reena Gadagottu
Alanann Properties, LLC

Exhibit 8 2327 Columbia Avenue See ¶12 None None
(Jeffrey & Laura Rolerat)
Carlos Huerta Homes IN,

Exhibit 9 871 W. 25th Street None None None
LLC (Carlos Huerta)
LEJ Management, LLC

Exhibit 10 2432 & 2434 N. Kitley Ave See ¶12 None None
(Edwin Reina)
BN Invest, LLC (Cole

Exhibit 11 1266 W. 26th Street See ¶12 None None
Peterson)
BN Invest, LLC (Cole

Exhibit 12 2371 North Gale Street None None None
Peterson)
Galveston, LLC (Debra and

Exhibit 13 3415 Brouse Avenue See ¶12 None None
Christopher Thomas)
BKS IN Properties, LLC

Exhibit 14 1342 North Ewing Street None None None
(Brian Sidaway)
DL3 Properties, LLC
Exhibit 15 IN1801 (Lilli and Dean 325/327 N. Beville Ave. See ¶12 None None
Thorsell)
DL3 Properties, LLC
Exhibit 16 IN1801 (Lilli and Dean 1322 W. 30th Street See ¶12 None None
Thorsell)
Covenantal Corporation
Exhibit 17 2902 N. Gladstone Avenue None None None
(Anthony Kulczak)
1446 Mount, LLC (Cesar De

Exhibit 18 1446 N. Mount St. See ¶12 None None
La Guardia)
300 Real Estate

Exhibit 19 Investments, LLC (Jeffrey 4631 E. 34th Street None None None
Lemon)
300 Real Estate
Exhibit 20 Investments, LLC (Jeffrey 1117 W. Roache St. See ¶12 None None
Lemon)
Finnley Invest, LLC (Dawn
Exhibit 21 3239 Elmira St. See ¶12 None None
and Steve Vanderhill)
AR Financials, LLC (Adam

Exhibit 22 3001 East Michigan Street None None None
Rahilly)
AR Financials, LLC (Adam

Exhibit 23 6237 E. 26th Street See ¶22 None None
Rahilly)
10
As a result, because 8 Purchase Agreements expired by their own terms, and because
the Morris Defendants were not contractually obligated to perform most of the ser-
vices the Plaintiffs alleged were breached, any breach-of-contract claim premised on
these propositions fails to state a claim upon which relief can be granted.
This Court should dismiss all portions of Count I premised on an expired Pur-
chase Agreement,7 on alleged Tenant Services or alleged Property-Management Ser-
vices,8 and on a failure to complete Rehab Services when they are not terms in the
contracts.9
2. The Plaintiffs’ Count II for promissory estoppel fails because (i) the
claims sounds in fraud but is not pleaded with the necessary particu-
larity; and (ii) a written contract exists that covers the identical sub-
ject matter which forms the basis of the promissory-estoppel claim.
When a “course of fraudulent conduct,” Borsellino v. Goldman Sachs Grp., Inc.,
477 F.3d 502, 507 (7th Cir. 2007), undergirds a claim’s allegations, Rule 9(b)’s height-
ened pleading standard applies. Cincinnati Life Ins. Co. v. Beyrer, 722 F.3d 939, 949-
50 (7th Cir. 2013) (holding that unjust-enrichment and promissory estoppel claims
sounding in fraud are subject to 9(b)). This means “a plaintiff ordinarily must describe
the ‘who, what, when, where, and how’ of the fraud—‘the first paragraph of any news-
paper story.’” Pirelli Armstrong Tire Corp. Retiree Med. Benefits Tr. v. Walgreen Co.,
7Deepak Neelagiri and Reena Gadagottu; Carlos Huerta Homes IN, LLC; 300 Real Estate Invest-
ments, LLC (1117 W. Roache St. property).
8All Plaintiffs: Larry and Leslie Kay McLesky; Deepak Neelagiri and Reena Gadagottu; Alanann
Properties, LLC; Carlos Huerta Homes IN, LLC; LEJ Management, LLC; BN Invest, LLC; Galveston,
LLC; BKS IN Properties, LLC; DL3 Properties, LLC IN 1801; Covenantal Corp.; 1446 Mount, LLC;
300 Real Estate Investments, LLC; Finnley Invest, LLC; and AR Financials, LLC.
9Deepak Neelagiri and Reena Gadagottu; Carlos Huerta Homes IN, LLC; BN Invest, LLC (2371 North
Gale Street property); BKS IN Properties, LLC; Covenantal Corp.; 300 Real Estate Investments, LLC
(4631 E. 34th Street property); and AR Financials, LLC (3001 East Michigan Street property).
11
631 F.3d 436, 441 (7th Cir. 2011) (quoting United States ex rel. Lusby v. Rolls-Royce
Corp., 570 F.3d 849, 854 (7th Cir. 2009)).
Here, the heart of Plaintiffs’ promissory-estoppel claim is that the Morris De-
fendants “made a clear and unambiguous promise to Plaintiffs that Defendants would
sell the Rental Properties to Plaintiffs, rehabilitate the properties, identify tenants,
screen tenants, secure tenants, manage the Rental Properties, and provide rent
checks to Plaintiffs.” Am. Compl. ¶76. Inherent in Plaintiffs’ claims is an alleged
course of fraudulent conduct. Not only do the Plaintiffs allege that they have been
“damaged by the fraud . . . [of] Defendants,” but they also allege that the Morris De-
fendants made misrepresentations about who would “actually identify, sell, rehabili-
tate, locate tenants for, and manage the Rental properties[.]” Am. Compl. ¶¶7, 29; see
generally id. at ¶¶29-32. Given that an alleged course of fraudulent conduct runs
through Plaintiffs’ Complaint, the Plaintiffs’ promissory estoppel claim must meet
9(b)’s standard. See Cincinnati Life Ins. Co., 722 F.3d at 950.
It is clear the Plaintiffs’ do not plead with particularity what 9(b) requires—
the who, what, when, where, and how of the elements, as the complaint must contain
“direct or inferential allegations regarding all the material elements necessary to sus-
tain recovery.” Precision Cam, Inc. v. Fox & Fox, No 1:14-cv-00452, 2015 WL 803552,
at *6 (S.D. Ind. Feb. 24, 2015) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 562
(2007)). To recover under a promissory estoppel theory in Indiana, a plaintiff must
show: (1) “a promise by the promissor; (2) made with the expectation that the promi-
see will rely thereon; (3) which induces reasonable reliance by the promise; (4) of a
definite and substantial nature; and (5) injustice can be avoided only by enforcement
12
of the promise.” Turner v. Nationstar Mortg., LLC, 45 N.E.3d 1257, 1265 (Ind. Ct.
App. 2015).
The Plaintiffs here have not pleaded these elements with any specificity. Alt-
hough the Plaintiffs generally mention a few purported promises, the Plaintiffs have
not pleaded the particularities and substance of those promises. And the Plaintiffs
have not particularly pleaded the details surrounding the Morris Defendants’ alleged
promises to each Plaintiff. Even without 9(b), the Plaintiffs have failed to allege the
required elements, instead relying on threadbare and conclusory allegations.
Besides the Plaintiffs’ failure to particularly plead promissory estoppel, the
conduct at the heart of the promissory-estoppel claim is near verbatim the conduct
that forms the basis for the Plaintiffs’ breach of contract claims. See Am. Compl. ¶67
(discussing the Plaintiffs’ breach of contract claim and alleging that “Plaintiffs en-
tered into Agreements with Defendants providing that . . . Defendants would sell the
Rental Properties, rehabilitate the properties, identify tenants, screen tenants, se-
cure tenants, manage the Rental Properties, and provide rent checks to Plaintiffs.”).
Because the Plaintiffs allege a contract covers this conduct, they are barred from re-
covering for promissory estoppel.
Separately, Indiana will permit promissory estoppel “only where no contract
in fact exists.” CoMentis, Inc. v. Purdue Research Found., 765 F.Supp.2d 1092 (N.D.
Ind. 2011) (citing Indiana Bureau of Motor Vehicles v. Ash, Inc., 895 N.E.2d 359, 367
(Ind. Ct. App. 2008)). This means that “if the promises . . . are founded on a valid
written contract between the parties, then the promissory estoppel claim becomes
unwarranted surplusage.” Decatur Ventures, LLC v. Stapleton Ventures, Inc., 373
13
F.Supp.2d 829, 848-49 (S.D. Ind. 2005) (citing Meisenhelder v. Zipp Exp., Inc., 788
N.E.2d 924, 932 (Ind. Ct. App. 2003)) (granting motion to dismiss); see also Wabash
Nat’l Corp. v. Fleet Equipment, LLC, No. 4:11cv62, 2012 WL 13071524, at *12 (N.D.
Ind. June 13, 2012) (dismissing a promissory estoppel claim because a written con-
tract covered the same subject matter). Because the Plaintiffs allege written contracts
covering the exact subject matter of their promissory-estoppel claim, the Plaintiffs
are barred from recovery. This Court should dismiss Count II for failure to state a
claim upon which relief can be granted.
3. Plaintiffs’ Count III fails to sufficiently plead fraud / deception.
Plaintiffs do not allege any fraud or deception by the Morris Defendants with
the specificity required by Rule 9(b). Separately, Plaintiffs claims are almost exclu-
sively premised on vaguely-alleged statements of future conduct or opinion, which
are non-actionable. Finally, Plaintiffs’ fraud claims are merely a repackaged version
of their breach-of-contract claims. For these reasons, the Plaintiffs’ fraud claims fail
to state claims upon which relief may be granted and should be dismissed with prej-
udice.
a. Plaintiffs do not allege fraud / deception with the specificity re-

quired by Rule 9(b).
Rule 9(b) requires plaintiffs alleging fraud or deception to do so with particu-
larity in its complaint and subjects a claim to dismissal for failure to do so.10 The
10Deception requires that a person “knowingly or intentionally makes a false or misleading written
statement with intent to obtain property.” Ind. Code § 35-43-5-3(a)(2). [T]he elements of criminal de-
ception under Indiana Code 35–43–5–3(a)(2) are the same as the elements of fraud[.]” Valley Forge
Renaissance, L.P. v. Greystone Servicing Corp. Inc., No. 109CV131WTLJMS, 2010 WL 76455, at *4
(S.D. Ind. Jan. 6, 2010)
14
requirement that the plaintiff “describe the ‘who, what, when, where, and how’ of the
fraud,”” Pirelli Armstrong Tire Corp. Retiree Med. Benefits Tr., 631 F.3d at 441, com-
pels the plaintiff to plead “the identity of the person making the misrepresentation,
and the method by which the misrepresentation was communicated to the plaintiff.”
U.S. ex rel. Grenadyor v. Ukrainian Vill. Pharmacy, Inc., 772 F.3d 1102, 1106 (7th
Cir. 2014).11 The party must specifically identify a misrepresentation of existing fact.
Valley Forge Renaissance, L.P. v. Greystone Servicing Corp. Inc., No.
109CV131WTLJMS, 2010 WL 76455, at *4 (S.D. Ind. Jan. 6, 2010). The party alleging
fraud must also allege how or “in what respect [the statements] were false.” McKinney
v. State, 693 N.E.2d 65, 73 (Ind. 1998).
The Plaintiffs have failed to identify with specificity any alleged fraud. Alt-
hough the Plaintiffs allege that “Defendants Morris Invest and Clayton Morris” made
false statements, and while paragraphs 52-65 of the Amended Complaint set forth
Claims of deception are subject to 9(b)’s heightened pleading requirements. See United States v. Wag-
oner, No. 2:17-CV-478, 2018 WL 4539819, at *4 (N.D. Ind. Sept. 20, 2018) (“Similarly, claims under
Indiana’s deception statute . . . ‘are subject to the particularity requirements of Rule 9(b),’” . . .); ABN
Amro Mortg. Group, Inc. v. Maximum Mortg., Inc., 429 F.Supp.2d 1031, 1042 (N.D. Ind. 2006) (“Both
the bank fraud statute and the deception statute are, on their face, anti-fraud statutes and, therefore,
claims based on the violation of the statutes are subject to the particularity requirements of Rule
9(b).”); Dillinger, LLC v. Elec. Arts, Inc., 795 F.Supp.2d 829, 840 n.14 (S.D. Ind. 2011) (noting that both
parties agreed with the proposition that deception claims must meet 9(b)’s requirements).
11 To succeed on a fraud claim under Indiana law, a plaintiff must prove:
(1) a material misrepresentation of past or existing fact which (2) was untrue, (3) was
made with knowledge of or in reckless ignorance of its falsity, (4) was made with the
intent to deceive, (5) was rightfully relied upon by the complaining party, and (6) which
proximately caused the injury or damage complained of.
Lycan v. Walters, 904 F.Supp. 884, 897 (S.D. Ind. 1995) (quoting Lawyers Title Ins. Corp. v. Pokranka,
595 N.E.2d 244, 249 (Ind. 1992)).
15
narrative allegations specific to each Plaintiff, the pleaded allegations fail to ade-
quately allege the elements of fraud, or identify the who, how, what, when, and where
of any alleged misrepresentations, or how any representation was false. Examples
include:
 “the Rolerats were contacted by a representative of Defendants (Glenn Rad-
ford), who told them that there were “turnkey” properties available in Indi-
anapolis.” Am. Compl. ¶ 54.
 “a representative of Defendant (James Federico) . . . told [Edwin Reina] via
email and phone calls about Morris Invest’s ‘turnkey’ investment opportu-
nities and the full-service capabilities.” Am. Compl. ¶ 56.
 “representative (Larry) told Cole about the “turnkey” investment opportu-
nities offered by Morris Invest and even directed Cole on how to be ready to
purchase (have the money in the bank, set up an LLC, etc.). The representa-
tive of Defendants then called Larry with “hot” properties that required
same-day action.” Am. Compl. ¶ 57.
 “a representative of Defendants (Glenn Redford) made representations to
the Thomas’s that Defendants were offering ‘turnkey’ real estate invest-
ment opportunities.” Am. Compl. ¶ 58.
 “a representative of Defendant (James Federico) made representations to
Brian via phone calls and emails that Defendants were offering ‘turnkey’
real estate investment opportunities.” Am. Compl. ¶ 59.
16
 “a representative of Defendants (Glenn Radford) made representations via
phone calls and emails that Defendants were offering ‘turnkey’ real estate
investment opportunities.” Am. Compl. ¶ 60.
 “a representative of Defendants (James Federico) . . . told Anthony about
the ‘turnkey’ real estate investment opportunities that Morris Invest was
offering. Anthony was told that the properties go very quick and that all
purchases required cash at closing.” Am. Compl. ¶ 61.
 “representatives of Defendants (Larry Blessman and Clayton Morris) made
representations to Adam via phone calls and emails that Defendants were
offering ‘turnkey’ real estate investment opportunities.” Am. Compl. ¶ 65.
The Plaintiffs’ conclusory allegations and broad narratives lack substance and
do not meet Rule 9(b)’s requirements. See, e.g. Baehl v. Bank of Am., N.A., No. 3:12-
cv-00029, 2013 WL 1319635, at *8 (S.D. Ind. Mar. 29, 2013) (holding that the ‘what’
component of the fraud claim was not satisfied by bare-bones, conclusory allegations
that defendant had misled them, as such claims do not put the defendant on notice
“of the substance of the alleged misrepresentations”); Winforge, Inc. v. Coachmen In-
dus., Inc., No. 1:06-cv-619, 2007 WL 854025, at *1 (S.D. Ind. 2007) (dismissing fraud
claims where plaintiffs alleged that defendants had made “numerous representations
and warranties” and that these representations happened “on numerous occasion in
person and over the phone” and the complaint lacked specific dates, names, and rep-
resentations which Plaintiffs maintained were fraudulent). Plaintiffs fail to meet the
heightened pleading requirements of Rule 9(b) and accordingly fail to state fraud
17
claims upon which relief can be granted. Plaintiffs’ fraud claims should be dismissed
in their entirety.
b. Plaintiffs’ allegations of misrepresentations of future conduct

are non-actionable and fail as a matter of law.
Plaintiffs’ fraud/deception claims not only fail to meet the specificity required
by Rule 9(b), but the nature of alleged statements almost exclusively relate to future
conduct or opinion which are non-actionable in Indiana. Indiana does not allow fraud
claims “based on representations regarding future conduct, or on broken promises,
unfulfilled predictions, or statements of existing intent which are not executed.” Com-
fax Corp. v. N. Am. Van Lines, Inc., 587 N.E.2d 118, 125 (Ind. Ct. App. 1992).
The Plaintiffs have alleged that the Morris Defendants made statements that
they “would sell the Rental Properties to Plaintiffs, rehabilitate the properties, iden-
tify tenants, screen tenants, secure tenants, manage the Rental Properties, and pro-
vide rent checks to Plaintiffs.” Am. Compl. ¶82. But what a person would or should
have done is not properly within a fraud claim. See, e.g., Maynard v. 84 Lumber Co.,
657 N.E.2d 406, 409 (Ind. Ct. App. 1995) (holding that a person’s representation that
“he would submit the credit application for approval was one regarding future con-
duct and therefore not a representation of a past of existing fact”); Schott v. Hunting-
ton Nat’l Bank, 914 F.Supp.2d 933, 942-43 (S.D. Ind. 2012) (“We also note that, to the
extent such expressions can be deemed promises of what Defendant ‘would’ do or di-
rectives as to what Plaintiff ‘should’ do, they do not properly frame a fraud claim.”).
Examples of such non-actionable future conduct or opinion alleged by Plaintiffs in-
clude:
18
 Properties offered by Morris Invest “would be appraised for at least what the
McKleskey’s [sic] would pay for the property and rehab.” Am. Compl. ¶ 52 (em-
phasis added).
 “Morris Invest was offering ‘turnkey’ rental properties which would all have a
return-on-investment over 11%. Deepak was also told that the properties, once
rehabbed, would have guaranteed tenants for at least a year.” Am. Compl. ¶
54 (emphasis added).
 “Defendants guaranteed that within 60 days the rehab work on the property
would be done and it would be rented out.” Am. Compl. ¶ 55 (emphasis added).
 “Defendants told Cesar that Morris Invest would handle rehab and property
management, and he would be informed of ‘turnkey’ properties.” Am. Compl.
¶ 62 (emphasis added).
 “A representative of Defendants (Glenn Radford) represented . . . that a house
. . . could be purchased and renovated for $50,000 . . . then rented for $775 per
month. . . . Defendants [represented] that, once built, [a] property would gen-
erate monthly rent of $875 to $925.” Am. Compl. ¶ 63 (emphasis added).
Indiana simply does not allow fraud claims based on representations regarding
future conduct, or on broken promises, unfulfilled predictions, valuation, or state-
ments of existing intent which are not executed. Sachs v. Blewett, 185 N.E. 856, 858
(Ind. 1933) (“This court has repeatedly said that actionable fraud cannot be predi-
cated upon a promise to do a thing in the future although there may be no intention
of fulfilling the promise.”); see also Kopis v. Savage, 498 N.E.2d 1266, 1272 (Ind. Ct.
19
App. 1986) (reversing judgment in favor of buyer; holding that seller’s promise to as-
sist buyer arrange financing and subsequent instruction to mortgage company to
cease all efforts to assist buyer with financing, was a representation of future action
and not actionable as fraud); Wheatcraft v. Wheatcraft, 825 N.E.2d 23, 31 (Ind. Ct.
App. 2005) (“The general rule is that statements of value are regarded as mere ex-
pressions of opinion.”) (finding that a husband’s representation regarding his com-
pany’s valuation was not actionable fraud); Pugh’s IGA, Inc. v. Super Food Services,
Inc., 531 N.E.2d 1194, 1198 (Ind. Ct. App. 1988) (“[P]rojections [are] mere statements
of opinion as to future profits rather than past or existing facts. Expressions of opin-
ion are not actionable.”). “Such allegations paint a scenario of broken promises, which
sound in contract, not fraud.” Ello v. Brinton, No. 2:14-CV-299-TLS, 2015 WL
2340754, at *5 (N.D. Ind. May 13, 2015) (dismissing fraud claims premised on false
representations during lease negotiations of what defendants “would” do).
Plaintiffs fraud claims premised on future conduct or opinion are not represen-
tations of a past or existing fact and should be dismissed for failure to state a claim
upon which relief may be granted.
c. Plaintiffs’ fraud claims are not distinct or independent from

their breach of contract claims.
Ultimately, the Plaintiffs’ fraud claims are merely a repackaged version of
their breach-of-contract claims. Plaintiffs are trying to recover damages for work or
services that they allege were to be performed by Defendants pursuant to Agreements
which allegedly weren’t performed or completed. Indiana courts have stated that “a
claimant who brings both a breach of contract and a fraud claim must prove that (1)
20
the breaching party committed the separate and independent tort of fraud; and (2)
the fraud resulted in injury distinct from that resulting from the breach.” Tobin v.
Ruman, 819 N.E.2d 78, 86 (Ind. Ct. App. 2004). Here, the Plaintiffs have pleaded
identical injuries stemming from the alleged fraud and the alleged breach of contract:
damages for failure to provide services related to tenants, property-management ser-
vices, and property rehabilitation. Compare Am. Compl. ¶¶70-72 with Am. Compl.
¶87. This bars the Plaintiffs’ fraud claims. Fritzinger v. Angie’s List, Inc., No. 1:12-
cv-01118, 2013 WL 772864, at *2-4 (S.D. Ind. Feb. 28, 2013) (dismissing the plaintiff’s
deception claim for failure to allege a separate and independent tort with a distinct
injury); Dunlap v. Switchboard Apparatus, Inc., No. 1:12-cv-0020, 2012 WL 1712554,
at *9 (S.D. Ind. May 12, 2012) (fraud claim premised on the same core conduct and
resulting in the same injury as a breach-of-contract claim is not plausible as a matter
of law). See also Ello, 2015 WL 2340754, at *5 (N.D. Ind. May 13, 2015)
“Such allegations paint a scenario of broken promises, which sound in contract,
not fraud.” Ello v. Brinton, No. 2:14-CV-299-TLS, 2015 WL 2340754, at *5 (N.D. Ind.
May 13, 2015) (dismissing fraud claims premised on false representations during
lease negotiations of what defendants “would” do).
For all these reasons, Plaintiffs’ fraud claims (Count III) should be dismissed
in its entirety for failure to state a claim upon which relief may be granted.
21
4. The Plaintiffs’ Count IV for conversion fails to state a claim upon

which relief may be granted.
Plaintiffs’ conversion claims fail because Indiana does not allow claims for con-
version alongside breach of contract actions, and the money here is not a special chat-
tel. The Plaintiffs’ conversion allegations claim that Plaintiffs paid money to Defend-
ants, and that “Defendants did not use the Funds as directed by and promised to
Plaintiffs. The Rental Properties were not rehabilitated.” Id. at ¶95.12 These allega-
tions mirror Plaintiffs’ breach of contract allegations. Compare id. at ¶95 with id. at
¶67. “Indiana courts [] do not allow claims for conversion in the context of contract
disputes[,]” Clark-Silberman v. Silberman, 78 N.E.3d 708, 715 (Ind. Ct. App. 2017),
because the criminal-conversion statute was not “intended to cover” situations like “a
breach of contract [claim] or failure to pay a debt[.]” JET Credit Union v. Loudermilk,
879 N.E.2d 594, 597 (Ind. Ct. App. 2008); see also NationsCredit Corp. v. Grauel En-
ters., Inc., 703 N.E.2d 1072, 1079 (Ind. Ct. App. 1998) (noting that the “legislature did
not intend to criminalize bona fide contract disputes”). Because the Plaintiffs’ conver-
sion claim mirrors their breach of contract claim, the Plaintiffs are barred from bring-
ing it and Count IV fails to state a claim upon which relief may be granted.
Even if Indiana allowed conversion claims alongside contract disputes, these
claims fail because none of the factual allegations reflects the existence of any special
12 The Plaintiffs allege threadbare and conclusory allegations generally setting forth the elements of
conversion: that the Morris Defendants “knowingly or intentionally exerted unauthorized control over
Plaintiffs’ property for Defendants’ own benefit, in exclusion and defiance of Plaintiffs’ ownership
rights[;] . . . converted the funds provided by Plaintiffs to Defendants specifically and expressly for the
purpose of rehabilitation of the Rental Properties[;]” that these funds were “entrusted to apply the
funds provided by Plaintiffs for the specific purpose of rehabilitation of the Rental Properties[;]” and
that these “were a determinate sum . . . and are a special chattel.” Am. Compl. ¶¶91-95.
22
chattel. For money to be the subject of a conversion action, it “must be capable of
being identified as a special chattel. . . . It must be a determinate sum with which the
defendant was entrusted to apply to apply to a certain purpose.” Kopis v. Savage, 498
N.E.2d 1266, 1270 (Ind. Ct. App. 1986). The Plaintiffs have failed to plead any factual
basis supporting this special-chattel requirement; all they have done is make a con-
clusory allegation setting forth the requisite element of a special chattel. See Am.
Compl. ¶¶91-96. Here, 12 of the Purchase Agreements are silent about any rehabili-
tation obligations or applying any of the purchase price towards rehabilitating the
property. See Exhs. 2-7, 9, 12, 14, 17, 19, and 22. The remaining Purchase Agree-
ments, which contain a clause related to property rehabilitation, do not identify de-
terminate sums entrusted to the Morris Defendants for the certain purpose of reha-
bilitating the properties. Those Purchase Agreements give no specific amounts and
merely state that “[t]he purchase price listed above includes the rehab of this prop-
erty.”13 See Exh. 1, ¶22 and Exh. 23, ¶22. A vague, unspecified amount like that can-
not be a specific, determinate sum for special chattel purposes. See Kopis v. Savage,
498 N.E.2d at 1270 (finding no special chattel when the defendant was not under an
obligation to return the exact, specific funds, and when the parties did not exhibit an
intent to separate the funds in some other manner).
13The other iteration of this clause (see Exhs. 8, 10, 11, 13, 15, 16, 18, 20, and 21) provides that “[t]he
purchase price above includes the rehabilitation of this property should the property require any ren-
ovations to achieve the rentable conditions as per the scope of work.” See, e.g., Exh. 8, ¶12. Like the
arguments related to the other clause, this language does not delineate a specific and determinate sum
for rehab. And to the extent it could be read to provide for one, it still does not make the money a
special chattel, as the Morris Defendants would have had no obligation to return the specific funds
included for rehab. See Kopis v. Savage, 498 N.E.2d at 1270 (finding no special chattel when the de-
fendant was not under an obligation to return the exact, specific funds, and when the parties did not
exhibit an intent to separate the funds in some other manner).
23
Accordingly, this Court should dismiss Count IV for failure to state a claim.
5. The Plaintiffs’ Count V for negligence fails because (i) the Morris De-
fendants owed no duties to Plaintiffs, and (ii) because the Plaintiffs
only allege economic loss.
Although the Plaintiffs style this count as one alleging negligence, it appears
the Plaintiffs are alleging negligent retention and supervision. See Am. Compl. ¶100
(alleging that the Morris Defendants “owed a duty to the Plaintiffs to properly screen,
hire, retain, and supervise the company it engaged to perform the services it promised
Plaintiffs”). In Indiana, to succeed on a claim for negligent retention and supervision,
a plaintiff must plead “1) a duty of care owed by an employer to a third person; 2) a
breach of that duty; and 3) injury to the third person proximately caused by the em-
ployer’s breach.” Scott v. Retz, 916 N.E.2d 252, 257 (Ind. Ct. App. 2009). When exam-
ining duty in this context, Indiana Courts apply the test from Restatement (Second)
of Torts. Sims v. Humane Soc. of St. Joseph County Indiana Inc., 758 F.Supp.2d 737,
750 (N.D. Ind. 2010). A fundamental component of that test is the existence of a mas-
ter (employer)/servant (employee) relationship. See id. No duty of any kind exists or
is alleged to exist between the Morris Defendants and any Plaintiff, whether under a
general negligence or negligent retention/supervision theory. Here, the Plaintiffs
have a conclusory allegation that the Morris Defendants owed them a duty, but they
have not alleged the existence of an employer-employee relationship between the
Morris Defendants and Oceanpointe such that the Morris Defendants could assume
that type of duty. Absent any duty, the Plaintiffs’ negligence claims fail as a matter
of law.
24
Separate and apart from the lack of duty owed by the Morris Defendants to
any Plaintiff, Plaintiffs’ negligence claims are barred by the economic-loss doctrine.
In Indiana, “a party may not restyle a breach of contract claim as a tort claim simply
to obtain additional damages.” JPMCC 2006 CIBC14 Eads Parkway, LLC v. DBL
Axel, LLC, 977 N.E.2d 354, 364 (Ind. Ct. App. 2012) (citing French-Tex Cleaners, Inc.
v. Cafaro Co., 893 N.E.2d 1156, 1167 (Ind. Ct. App. 2008)). The Indiana Supreme
Court has held that the tort of negligence applies only where a defendant’s conduct
“causes personal injury or damage to other property[;] . . . contract law governs dam-
age to the product or service itself and purely economic loss arising from the failure
of the product or service to perform as expected.” Gunkel v. Renovations, Inc., 822
N.E.2d 150, 153 (Ind. 2005). Although the Plaintiffs have conclusory allegations that
the Morris Defendants owed them duties about screening, hiring, retaining, and su-
pervising certain companies, there is no allegation that these alleged failures caused
any person physical injury or damage to other properties. Because the Plaintiffs’ al-
leged injuries are solely economic, contract law governs and the Plaintiffs are barred
from recovering under a negligence theory. Thus, Plaintiffs’ negligence claims fail
and this Court should dismiss Count V of Plaintiffs’ Amended Complaint in its en-
tirety.
6. The Plaintiffs fail to state claims for relief under the Indiana Decep-
tive Consumer Sales Act.
Plaintiffs’ claims under the Indiana Deceptive Consumer Sales Act (Count VI)
fail because the alleged sales are not within the definition of a consumer transaction
and separately, real property transactions are excluded from an individual’s private
25
right of action.14 Indiana Code §24-5-0.5 et seq. provides the statutory scheme gov-
erning Deceptive Consumer Sales. The statute defines a consumer transaction to in-
clude the “sale, lease, assignment, award by change, or other disposition of an item
of personal property, real property, a service, or an intangible . . . to a person for
purposes that are primarily personal, familial, charitable, agricultural, or household,
or a solicitation to supply any of these things.” IC 24-5-0.5(2)(1) (emphasis added).
Plaintiffs recite in Count VI the existence of consumer transactions “within the mean-
ing of the Indiana Deceptive Consumer Sales Act,” Am. Compl. ¶106, but elsewhere
their pleading shows otherwise: Plaintiffs allege that they each purchased property
“to be used as investment rental properties.” Am. Compl. ¶2. For transactions to come
into the statute’s grasp, they must be “for purposes that are primarily personal, fa-
milial, charitable, agricultural, or household.” Ind. Code § 24-5-0.5-2. Because the
transaction was not for the purposes of one of the enumerated categories, this statu-
tory scheme does not—and cannot—apply to the alleged conduct here.
Not only are the transactions excluded by definition from consumer transac-
tions, but real property transactions are expressly exempted from the statutory
scheme permitting individuals to proceed with a private right of action. Indiana Code
§ 24-5-0.5-5 limits private right of action to claims “expressly authorized in section
4(a), 4(b), or 4(c) of this chapter.”15 IC 24-5-0.5-4(a) sets forth a right of action for
14 Indiana Deceptive Consumer Sales Act claims are subject to a heightened Rule 9(b) pleading stand-
ard, see McKinney v. State, 693 N.E.2d 65, 73 (Ind. 1998), and Plaintiffs claims are subject to dismissal
for the reasons stated in Part 3, supra.
15 IC 24-5-0.5-4(b) and (c) do not apply here. 4(b) relates to class action lawsuits and 4(c) addresses
suits undertaken by the Attorney General.
26
wronged individuals to seek damages. But this subsection “does not apply to a con-
sumer transaction in real property . . . except for purchases of time shares and camp-
ing club memberships.” Id. Consumer transactions involving real property are carved
out and removed from the private right of action. Thus, because the allegations here
center on consumer transactions about real estate, the statutory framework under
which the Plaintiffs seek relief clearly does not apply.
Thus, because the conduct is by definition outside the statute’s scope and the
legislature has specifically exempted consumer transactions in real property from a
private right of action, this Court should dismiss Count VI in its entirety.
CONCLUSION
For all the above reasons, this Court should dismiss with prejudice the en-
tirety of Counts II, III, IV, V, and VI, and portions of Count I based on expired Pur-
chase Agreements or terms not in the written contracts, as follows:
 Claims premised on an expired Purchase Agreement: Deepak Neelagiri and
Reena Gadagottu, Carlos Huerta Homes IN, LLC, and 300 Real Estate In-
vestments, LLC (1117 W. Roache St. property);
 All Plaintiffs’ claims premised on alleged Tenant Services or alleged Prop-
erty-Management Services; and
 Claims premised on a failure to complete Rehab Services when they are not
terms in the contracts: Deepak Neelagiri and Reena Gadagottu, Carlos
Huerta Homes IN, LLC, BN Invest, LLC (2371 North Gale Street property),
BKS IN Properties, LLC, Covenantal Corp., 300 Real Estate Investments,
27
LLC (4631 E. 34th Street property), and AR Financials, LLC (3001 East
Michigan Street property).
/s David J. Hensel
PO Box 44989
Tel: (317) 822-4400
Fax: (317) 822-0234
dhensel@hooverhullturner.com
amulroony@hooverhullturner.com
twalters@hooverhullturner.com
Counsel for Defendants Morris Invest

and Clayton Morris
28
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF INDIANA
LARRY AND LESLIE KAY MCLESKEY;

DEEPAK NEELAGIRI AND REENA
GADAGOTTU; ALANANN PROPERTIES, Case No.: 1:18-cv-02797-WTL-DML
LLC; CARLOS HUERTA HOMES IN, LLC;
LEJ MANAGEMENT, LLC; BN
INVEST, LLC; GALVESTON, LLC; BKS IN
PROPERTIES, LLC; DL3 Plaintiffs’ Response in
PROPERTIES, LLC IN1801;
COVENANTAL CORP.; 1446 MOUNT, LLC; Opposition to Defendants’
300 REAL ESTATE INVESTMENTS, LLC; Motion to Dismiss
FINNLEY INVEST, LLC; and
AR FINANCIALS, LLC,
vs.
MORRIS INVEST and CLAYTON MORRIS,
Defendants.
Plaintiffs, Larry and Lesley Kay McLeskey; Deepak Neelagiri and Reena
Gadagottu; Alanann Properties, LLC; Carlos Huerta Homes IN, LLC; LEJ
Management, LLC; BN Invest, LLC; Galveston, LLC; BKS IN Properties, LLC; DL3
Properties, LLC IN1801; Covenantal Corp.; 1446 Mount, LLC; 300 Real Estate
Investments, LLC; Finnley Invest, LLC; and AR Financials, LLC (collectively,
“Plaintiffs”), by counsel, hereby submit their opposition to Morris Invest’s and
Clayton Morris’s (collectively, “Defendants”) Rule 12(b)(6) Motion to Dismiss the
Amended Complaint.
I. INTRODUCTION
Plaintiffs brought this action against Defendants after Defendants
fraudulently induced Plaintiffs to buy into an investment program involving rental
properties that Defendants knew would actually never be rentable or occupied by
tenants. Defendants have moved to dismiss Plaintiffs’ Amended Complaint in its
entirety. If Defendants’ arguments are given credence, no one could ever be held
liable for carrying out a Ponzi scheme. Fortunately, each of Defendants’ arguments
fails:
(1) Fraud/Promissory Estoppel. Plaintiffs’ fraud claims meet and exceed the
specificity requirements of Rule 9(b) and, surely, Defendants are on notice of
the gravamen of Plaintiffs fraud claims–Defendants made intentionally false
promises to Plaintiffs with the goal of getting them to invest in the Ponzi
scheme. Defendants’ sales pitch was not a promise of future performance; it
was an outright lie.
(2) Breach of Contract. It makes little difference that some of the agreements
between the Plaintiffs and Clayton Morris contained deadlines that passed
prior to the real estate sale closing. The fact that the sales were
consummated for the contractually contemplated price is evidence of an
implied contract, the existence of which is a jury question. The quasi-contract
question of Defendants responsibility to provide property management
services is also a jury question.
(3) Conversion. Plaintiffs allege that the precise amount of money each paid to
Defendants for the rehabilitation of the properties is a “special chattel”
because those precise amounts were not used as directed. And money
entrusted to Defendants for a specific purpose can be the basis of a
conversion claim when that specific amount of money is not used for the
intended purpose.
(4) Negligence. Defendants argue that Plaintiffs’ negligence claims (along with
the fraud and conversion claims) cannot remain because Plaintiffs also plead
breach of contract, but it is well-settled that plaintiffs can plead in the
2
alternative. Further, Plaintiffs’ breach of contract claims do not cover the

entirety of this dispute because Defendants owed a duty to the Plaintiff
investors to ensure they received all that was part of the purchase promise.
(5) Indiana Deceptive Consumer Sales Act. Although true that the purchase of a
rental house only does not fall within the purview of the Act, that is not
Plaintiffs’ claim here—Plaintiffs allege that they purchased an investment
product, the value in which was mainly the property management “expertise”
of Defendants. Investors certainly have a right to recover under the IDCSA
when they have been defrauded.
As elucidated more fully below, each of the claims in Plaintiffs’ Complaint
meets and exceeds the pleading standards. There is no reason to dismiss any of
Plaintiffs’ claims and so Defendants’ motion should be denied in its entirety.
II. FACTUAL BACKGROUND
Defendant Clayton Morris holds himself out to be a successful real estate
investor. Amended Complaint at ¶ 22. He and his company, Defendant Morris
Invest, claim that they help investors buy and renovate investment properties, find
tenants, and manage the properties. Id. at ¶ 23. Unfortunately for their investors,
all they receive for their investments is a run-down, uninhabitable, and essentially
worthless property.
Morris Invest lures in potential investors with podcasts, YouTube videos, and
blog posts pitching a three-part “wealth-building” plan: (1) Morris Invest claims, it
consults with the investor to learn about his or her investment goals; (2) then it
offers a selection of its properties to the prospective investor and, (3) once the
investor has selected one of Morris Invest’s properties, Morris Invest sells that
3
property to the investor, rehabilitates it to make it suitable for tenants, and finds
and secures tenants. Id. at ¶¶ 23, 28-29. All the investor needs to do, declares
Morris Invest, is pay Morris Invest the purchase price for the property, which
includes the costs for rehabilitation, and collect rent checks. Id. at ¶ 29. According
to Morris Invest, the investor works exclusively with Morris Invest, and Morris
Invest has the expertise and resources to handle everything. Id. at ¶ 31.
Unfortunately for Morris Invest’s investors, however, its claims are designed
to cleverly disguise a Ponzi scheme. Id. at ¶ 30. Morris Invest and Clayton Morris
are, in fact, nothing but marketers. Id. They use affiliates to identify, sell,
rehabilitate, locate tenants for, and manage the rental properties they convince
their investors, including the Plaintiffs, to purchase. Id. at ¶ 30.
The affiliates used in Indiana by Morris Invest were Oceanpointe
Investments Limited (“Oceanpointe”), Indy Jax Wealth Holdings, LLC, and/or Indy
Jax Properties, LLC (collectively, “Indy Jax”). Amended Compl. ¶ 32. Defendants
now disclaim any affiliation with Oceanpointe or Indy Jax, but have told Plaintiffs
otherwise:
4
Id. at ¶33.
The Plaintiffs in this case are victims of Defendants’ Ponzi scheme. They are
a handful of inexperienced investors Defendants persuaded to purchase rental
properties in Marion County in 2017 and 2018. Id. at ¶¶ 34-35. Plaintiffs were
targeted by Defendants because of that inexperience and were persuaded to give up
huge portions of their savings and retirement. Id.
Each of the Plaintiffs purchased one or more single family homes, from and
through Defendants, to be used as rental properties to generate “passive” rental
income. Amended Compl. ¶ 38. Each Plaintiff was told by Defendants that the
purchase funds paid to Morris Invest was earmarked for both the purchase of the
property and its rehabilitation. Id. at ¶¶ 39, 42. Each Plaintiff was told that
Defendants were responsible for finding, screening, and securing tenants for the
“turnkey” rental properties. Id. at ¶¶ 40-41. Some of the Plaintiffs did temporarily
receive checks for “rent” for several months. These checks, in actuality, came not
from rental income paid by tenants but from funds paid to Defendants by new
5
investors, making Defendants’ program a textbook Ponzi scheme. Amended Compl.
¶ 49. Other Plaintiffs never received any rent checks. Id. at ¶¶ 43-44. All Plaintiffs
ended up with properties that had not been rehabilitated, were not being rented,
were sitting vacant, and were essentially worthless. Id. at ¶¶ 45-46.
Plaintiffs eventually learned that Defendants had set up a scheme whereby
Oceanpointe purchased hundreds of dilapidated homes in the Indianapolis area,
many from tax sales. The properties Clayton Morris and Morris Invest matched
with their investors, unbeknownst to Plaintiffs, were actually owned by
Oceanpointe and Oceanpointe was the entity tasked with rehabilitating the
properties, securing tenants, and managing the properties. Id. at ¶¶ 36-37. When
the Ponzi scheme fell apart, Clayton Morris and Morris Invest denied responsibility
for the failure of their program, and instead pointed the finger at Oceanpointe. Id.
at ¶ 47-48. After receiving complaints from Plaintiffs and other victims of
Defendants’ scheme, the Indiana Attorney General opened an investigation into
Defendants. Id. at ¶ 51.
An example of Defendants’ Ponzi scheme in action: In March 2017, after
listening to Clayton Morris’s podcast, Cole Peterson, owner of Plaintiff BN Invest,
LLC, was directed to the Morris Invest website to set up an appointment with a
representative of Defendants, Larry Blessman. Id. at ¶ 57. Blessman described to
Cole the “turnkey” investment opportunities offered by Morris Invest and even
instructed him on how to be ready to purchase (have the money in the bank, set up
an LLC, etc.). Id. After Blessman called Cole about “hot” properties that required
6
same-day action, Cole purchased two properties, one on April 18, 2017 for $48,500
(inclusive of rehab costs), and the second on May 25, 2017 for $45,500 (inclusive of
rehab costs). Id.
Cole received rent payments from the first property for 7 to 8 months. Id.
When those stopped and he never received any rent payments from the second
property, Cole tried to contact Defendants, but was told that he needed to speak
with Oceanpointe. Id. Cole ultimately contacted a new property management
company, which captured photographs of his properties showing that no rehab was
ever completed and the properties were not occupied. Id.
Indeed, each of the Plaintiffs paid tens of thousands of dollars out of their
savings or retirement accounts for worthless properties and, now, owe additional
thousands of dollars for rehabilitation work, code violations, and/or tax liens. Id. at
¶ 50.
III. LEGAL STANDARD
A complaint survives a Rule 12(b)(6) motion to dismiss when it contains
“enough facts to state a claim [for] relief that is plausible on its face.” Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007). Detailed factual allegations are not required,
and “[a] claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A court must
accept all well-pleaded facts as true, construing them in the light most favorable to
7
the nonmoving party, and drawing all reasonable inferences in that party’s favor.
Bell v. City of Chicago, 835 F.3d 736, 738 (7th Cir. 2016).
IV. ARGUMENT
A. Plaintiffs identified the who, what, when, where, and how of the fraud, and
therefore satisfied the Rule 9(b) standard with regard to their fraud claim.
Under Rule 9(b), a plaintiff must “state with particularity the circumstances
constituting fraud[.]” Fed. R. Civ. P. 9(b). The primary purpose of this Rule is to give
a defendant “fair notice” of a plaintiff’s claim. Vicom, Inc. v. Harbridge Merch.
Servs., Inc., 20 F.3d 771, 777 (7th Cir. 1994). A plaintiff must therefore typically
allege “the identity of the person who made the misrepresentation, the time, place
and content of the misrepresentation, and the method by which the
misrepresentation was communicated to the plaintiff.” Windy City Metal
Fabricators & Supply, Inc. v. CIT Technology Financing Serves, Inc., 536 F.3d 663,
668 (7th Cir. 2008) (citations omitted). A plaintiff, in other words, must plead the
“who, what, when, where, and how” of the fraud. Id. Plaintiffs are not required to
plead “any magic words to bring its fraud claim, but must plead at least ‘the first
paragraph of any newspaper story.’” DNET Servs., LLC v. Dig. Intelligence Sys.
Corp., No. 1:08-cv-0252-DFH-JMS, 2009 U.S. Dist. LEXIS 38147, at *14 (S.D. Ind.
May 5, 2009) (quoting DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990);
see also Gandhi v. Sitara Capital Mgmt., LLC, 721 F.3d 865, 870 (7th Cir. 2013)
(“The degree of particularity required will necessarily vary depending on the
circumstances under which the plaintiff filed its complaint.”).
8
Defendants argue that, with regard to Plaintiffs’ fraud and promissory
estoppel claims, the Plaintiffs “have not particularly pleaded the details
surrounding the Morris Defendants’ alleged promises to each Plaintiff.”
Defendants’ Brief in Support of Motion to Dismiss (“Def. Br.”) at 13.
Here, given the procedural stage of this case, the Amended Complaint puts
the Defendants on sufficient notice as to the circumstances constituting the alleged
fraud, and in turn, allows the Court to ensure that such allegations are “not lightly
leveled.” Pirelli Armstrong Tire Corp. Retiree Med. Benefits Tr. v. Walgreen Co.,
631 F.3d 436, 441 (7th Cir. 2011).
As demonstrated in the table below, the Amended Complaint identifies with
abundant particularity the who, the what and the how, the when, and the where of
Defendants’ violative conduct
Plaintiff Who What / How When Where

McLeskey Clayton Morris told Plaintiffs via Oct. or 866 W. 29th
Morris podcast, Facebook posts, Nov. Street,
emails, and phone that 2017 Indianapolis,
Defendants were offering Indiana
“turnkey” properties that
would be handled
exclusively by Morris Invest.
Later told Plaintiffs that
rehab on property was
complete and property was
ready to rent. No rehab
work was ever done.
Amended Compl. ¶ 52.
Neelagiri Clayton Defendants told Plaintiff via Jan. 1530 S.
Morris, email and phone that Morris 2018 Centennial
Dave Invest was offering Street,
Koehn “turnkey” rental properties Indianapolis,
which would all have a Indiana;
9
return-on-investment over 2516 E. 18th

11%. Plaintiff was also told Street,
that the properties, once Indianapolis,
rehabbed, would have Indiana;
guaranteed tenants for at 3417 N.
least a year. Plaintiff was Drexel
told repeatedly by Morris Avenue,
Invest that rehab work was Indianapolis,
started and that tenants Indiana;
were already in some of the 3605 N.
properties. Plaintiff later Riley Ave.,
learned that no rehab was Indianapolis,
being done and no tenants Indiana;
were in his properties. 3702 Forest
Amended Compl. ¶ 53. Manor Ave.,
Indianapolis,
Indiana;
4024
Eastern
Avenue,
Indianapolis,
Indiana
Alanann Glenn Radford, a representative of March 2327
Properties Radford Defendants, contacted 2018 Columbia
Plaintiffs directly and told Avenue,
them that there were Indianapolis,
“turnkey” properties Indiana
available in Indianapolis.
Plaintiffs purchased a
property, but the rehabs
were never performed.
Carlos James Plaintiff was contacted via Late 871 W. 25th
Huerta Frederico, email and phone by 2017 Street,
Homes IN Clayton Defendants, who Indianapolis,
Morris, guaranteed that within 60 Indiana
and days the rehab work on the
Nicole investment property would
Morris be done and it would be
rented out. After trying to
get updates from
Defendants, Plaintiff finally
drove to Indianapolis in late
November 2018, only to find
10
that the rehab work was not

done; but a tenant was in
the property paying $600
per month, none of which
Carlos received. Amended
Compl. ¶ 55.
LEJ James Plaintiff was contacted by April 2432/2434
Management Federico email and phone calls about 2018 N. Kitley
Morris Invest’s “turnkey” Avenue,
investment opportunities Indianapolis,
and the full-service Indiana
capabilities. After his
purchase, no one from
Morris Invest would call
Plaintiff back, and Plaintiff
eventually discovered that
the rehab work was never
done. Amended Compl. ¶ 56.
BN Invest Larry Defendants told Plaintiff March 1266 W.
Blessman about the “turnkey” 2017 26th Street,
from investment opportunities Indianapolis,
Morris offered by Morris Invest and Indiana and
Invest even directed Plaintiff on 3271 N. Gale
how to be ready to purchase Street,
(have the money in the Indianapolis,
bank, set up an LLC, etc.). Indiana
The representative of
Defendants then called
Plaintiff with “hot”
properties that required
same-day action. Based on
these representations,
Plaintiff purchased two
properties. Plaintiff received
rent payments from the first
property for 7-8 months, but
those stopped, and he failed
to receive any rent
payments from the second
property. Amended Compl.
¶ 57.
Galveston Glenn Glenn Redford made March 3415 Brouse
Redford representations to the 2018 Avenue,
Plaintiffs that Defendants
11
were offering “turnkey” real Indianapolis,

estate investment Indiana
opportunities. Defendants
also sent the Plaintiffs
YouTube videos promoting
how safe the program
offered by Morris Invest
was. Plaintiffs purchased a
property and were told by
Defendants that the rehab
was ongoing and the
property would be ready for
rental in 3 months. The
rehab work was never
performed, and the property
was never rented. Amended
Compl. ¶ 58.
BKS IN James James Federico made January 1342 N.
Properties Federico representations to Plaintiff 2018 Ewing
via phone calls and emails Street,
that Defendants were Indianapolis,
offering “turnkey” real Indiana
estate investment
opportunities. Based on
those representations, on
January 17, 2018, Plaintiff
purchased a property
offered by Defendants.
Almost one year later, there
is still no renter in the
property, and the rehab was
never done. Amended
Compl. ¶ 59.
DL3 Glenn Glenn Radford made February 325/327
Properties Radford representations via phone 2018 Bellville
calls and emails that Avenue and
Defendants were offering 1322 W.
“turnkey” real estate 30th Street,
investment opportunities. Indianapolis,
Over the course of two Indiana
months, the Plaintiff
received over 40 emails from
Defendants offering
properties. Based on the
12
representations made by
Defendants, Plaintiff
purchased two of these
properties offered by
Defendants. Plaintiff was
told, and believed, that
everything – the purchase,
the rehab, securing renters
– was being done by Morris
Invest. Rehab work was not
performed, and renters were
not secured. Amended
Compl. ¶ 60.
Covenantal James During a scheduled phone February 2902 N.
Corp. Federico conversation with a 2018 Gladstone
representative of Avenue,
Defendants, James Indianapolis,
Federico, told Plaintiff about Indiana
the “turnkey” real estate
investment opportunities
that Morris Invest was
offering. Plaintiff was told
that the properties go very
quick and that all purchases
required cash at closing.
Plaintiff purchased a
property offered by
Defendants. No rehab work
was ever done. Amended
Compl. ¶ 61.
1446 Mount Hayley Representatives (Hayley March 1446 N.
Neeley Neeley and James Federico) 2018 Mount
and of Defendants told Plaintiff Street,
James that Morris Invest would Indianapolis,
Federico handle rehab and property Indiana
management, and he would
be informed of “turnkey”
properties. Based on
Defendants representations,
Plaintiff purchased a
property. The rehab was
never completed. Amended
Compl. ¶ 62.
13
300 Real Glenn Plaintiff began receiving January 4631 E. 34th

Estate Radford emails from Defendants 2018 Street,
Investments about their “turnkey” real Indianapolis,
estate investment Indiana and
opportunities. A 1117 W.
representative of Roach
Defendants (Glenn Radford) Street,
represented to Plaintiff that Indianapolis,
a house at 4631 E. 34th Indiana
Street in Indianapolis could
be purchased and renovated
for $50,000 (inclusive of
rehab costs), then rented for
$775 per month. Based on
Defendants’
representations, Plaintiff
purchased the property.
However, the rehab on the
first property was never
done and no house was ever
built on the second property.
Finnley Glenn Glenn Radford and Clayton February 3239 Elmira
Invest Radford Morris made 2018 Street,
and representations via phone Indianapolis,
Clayton calls, emails and podcasts to Indiana
Morris Plaintiff that Defendants
were offering “turnkey” real
estate investment
opportunities. Plaintiff was
also told that the properties
they were offered were all in
“C” and better
neighborhoods, and they
were encouraged to act
quickly because the
properties offered by
Defendants would be gone
in hours. Based on the
representations of
Defendants, on April 4,
2018, Plaintiff purchased a
property offered by
Defendants. Plaintiff was
14
assured by Defendants that

they would handle the rehab
and rent collection. The
rehab work was never
performed. Amended Compl.
¶ 64.
AR Larry Larry Blessman and June 3001 E.
Financials Blessman Clayton Morris made 2017 Michigan
and representations to Plaintiff Street,
Clayton via phone calls and emails Indianapolis,
Morris that Defendants were Indiana and
offering “turnkey” real 6237 E. 26th
estate investment Street,
opportunities. Based on Indianapolis,
these representations, on Indiana
July 12, 2017, Plaintiff
purchased a property
offered by Defendants.
Plaintiff was told by
Defendants that the rehab
on the properties was
complete and he began
receiving rent checks, but
the rent checks stopped
coming after a couple
months and when Plaintiff
investigated, he found that
the rehab work had not
actually been done.
As demonstrated above, the facts pled in the Amended Complaint specify
with ample detail the who, what, when, where, and how of the misconduct charged
by each Plaintiff and put Defendants on notice of the representations at issue in
this case. Windy City Metal Fabricators & Supply, Inc., 536 F.3d at 668. These facts
raise the inference beyond a speculative level that Defendants knowingly made
false statements of existing fact to Plaintiffs with the intent to cause Plaintiffs to
act on those statements, and Plaintiffs did act on those false statements. They
15
therefore provide sufficient particularity to meet the heightened pleading
requirements of Rule 9(b), and Defendants’ motion to dismiss Plaintiffs’ fraud and
promissory estoppel claims on this basis should be denied. See Ind. Bell Tel. Co. v.
Ward, No. IP 02-170-C H/K, 2002 U.S. Dist. LEXIS 26013, at *13-15 (S.D. Ind. Dec.
6, 2002) (holding that the complaint satisfies Rule 9(b)’s heightened pleading
standard where referencing agreement between parties “adequately demonstrates a
basis for plaintiffs’ allegations against TCI [and] sufficiently notifies TCI of its role
in the alleged fraud.”); Cox v. Sherman Capital LLC, No. 1:12-cv-01654-TWP-MJD,
2015 U.S. Dist. LEXIS 72080, at *11-12 (S.D. Ind. June 3, 2015) (“Plaintiffs have
adequately pled which Defendants made the alleged misrepresentations, as well as
when, where and how. This satisfies the “who, what, when, where, and how”
requirement of Rule 9(b).”) (internal citations omitted); Lincoln Nat’l Life Ins. Co. v.
Donaldson, Lufkin & Jenrette Sec. Corp., 9 F. Supp. 2d 994, 1006 (N.D. Ind. 1998)
(denying motion to dismiss for failure to satisfy Rule 9(b) where defendant “has not
established that it has been hindered in any way in preparing a defense to the
claims asserted by” plaintiffs); DNET Servs., LLC v. Dig. Intelligence Sys. Corp.,
No. 1:08-cv-0252-DFH-JMS, 2009 U.S. Dist. LEXIS 38147, at *13 (S.D. Ind. May 5,
2009) (denying motion to dismiss and rejecting defendant’s argument that Rule 9(b)
requires plaintiff to specifically indicate that any allegedly fraudulent
communications amounted to an intentional misrepresentation relied upon by
plaintiff).
16
B. Defendants’ fraudulent statements were not promises of future conduct, but,

instead, were statements about the nature of the investment product
Defendants sold to Plaintiffs.
Defendants next argue that Plaintiffs’ fraud claims should be dismissed
because Plaintiffs have failed to identify a misrepresentation of past or existing fact
versus a promise of future conduct. Def. Br. at 15.
Defendants are correct that, in Indiana, one of the elements of a fraud claim
is that the defendant must have made a material misrepresentation of a past or
existing fact for the purpose of inducing the plaintiff to enter into some type of
agreement. Siegel v. Williams, 818 N.E.2d 510, 515 (Ind. Ct. App. 2004). Here,
though, Defendants’ argument is simply one of semantics. Plaintiffs have not, as
Defendants suggest, merely alleged that Defendants made statements promising
future conduct. Def. Br. at 18. Instead, Plaintiffs allege that Defendants made
statements that Defendants knew to be false at the time they were made.
The Amended Complaint alleges that Defendants, in an effort to persuade
the Plaintiffs to give Defendants tens of thousands of dollars for virtually worthless
properties, sold Plaintiffs a “passive income” program that Defendants knew was
not what it was portrayed it to be—a means for Plaintiffs to invest in “turnkey”
rental properties generating immediate income. Amended Compl. ¶¶ 82-87. In other
words, Plaintiffs accuse Defendants of intentionally and materially misrepresenting
the nature of the program offered by Defendants and the nature of the investment
products sold to Plaintiffs. See id.
17
This, combined with Plaintiffs’ allegations that Defendants knew, at the time
it made these statements, that its program provided none of the above, is sufficient
to survive Defendants’ motion to dismiss. Amended Compl. ¶ 83. See IOM Grain,
LLC v. Ill. Crop Improvement Ass’n, Inc., Cause No. 1:10-CV-337-TLS, 2015 U.S.
Dist. LEXIS 4259, 2015 WL 195988, at *7 (N.D. Ind. Jan. 14, 2015) (finding
actionable fraud when plaintiff alleged that the defendant’s representative “offered
unqualified guarantees that [the defendant] was able to perform the contract,”
including an assurance that the defendant could obtain financing); Reginald Martin
Agency, Inc. v. Conseco Med. Ins. Co., 478 F. Supp. 2d 1076, 1089 (S.D. Ind. 2007)
(finding actionable fraud when the plaintiff alleged that the defendant insurance
company made statements that it was “financially stable” and “profitable” when in
fact “it was hemorrhaging millions of dollars”); Ello v. Brinton, No. 2:14-CV-299-
TLS, 2015 U.S. Dist. LEXIS 152897, at *8-9 (N.D. Ind. Nov. 10, 2015) (finding
actionable fraud where plaintiff alleged that defendant made misrepresentations
about its financial condition and business credentials at the time of contract
negotiations and noting that “further discovery may eventually show that the
Defendants’ alleged misrepresentations were merely false promises as to future
acts, which cannot serve as the basis of a common law fraud claim. Nevertheless,
the Plaintiffs are not required to prove a misrepresentation of past or existing fact
at the pleading stage.”).
18
C. The eight purchase agreements did not expire and, even if they did, an
implied contract existed between the parties.
Defendants next argue that eight purchase agreements entered into by three
of the Plaintiffs involved sales that did not close within the time required by the
purchase agreements and, thus, those agreements expired by their own terms and
are unenforceable. Def. Br. at 7-8.
Defendants’ contention that Plaintiffs fail to allege a colorable breach of
purchase agreement claim because some of the purchases closed one week to a few
weeks after the purported closing deadline is without merit. To state a viable
breach of contract claim, Plaintiffs simply must allege a contractual obligation, a
breach of that obligation and damages resulting from that breach. Gatto v. St.
Richard Sch., Inc., 774 N.E.2d 914, 920 (Ind. Ct. App. 2002). These familiar
elements are set forth clearly, concisely and sufficiently in the Amended Complaint.
Specifically, Plaintiffs allege that they entered into agreements with Defendants for
the purchase of the rental properties, that Plaintiffs fulfilled all of their obligations
under those agreements, that Defendants breached the agreements by failing to
rehabilitate the properties, and that Plaintiffs suffered damages as a result of
Defendants’ breaches. Amended Compl. ¶¶ 67-73.
Plaintiffs also allege that, notwithstanding any termination clause or closing
deadline, the parties went forward with the real estate purchases. Amended Compl.
at ¶¶ 38, 52-65. In Indiana, “[w]here the parties have been operating under an
express contract, and continue to conduct themselves after the expiration of that
contract as if it were still in force, an implied contract with the same terms as the
19
express contract exists between them.” See 6 Ind. Law Encyc. Contracts § 5 (Jan.
2016). See also 17 C.J.S. Contracts § 6 (2015) (“Where, without more, an agreement
expires by its terms and the parties continue to perform as before, an implication
arises that they have mutually assented to a new contract containing the same
provisions as the old.”); JKL Components Corp. v. Insul-Reps, Inc., 596 N.E.2d 945,
951 (Ind. Ct. App. 1992) (where “the parties . . . acted as if the written contract was
still in effect,” even if the parties’ express contract expired, an implied contract
existed between the parties, one which contained “all of the provisions of the
written contract”).
Even accepting as correct Defendants’ argument that eight of the purchase
agreements terminated prior to the properties’ closing, in light of Plaintiffs’ factual
allegations, and making all inferences in Plaintiffs’ favor, it is apparent that the
parties “acted as if the written contract was still in effect.” Id. While Defendants
may dispute that such an implied contract existed, that is a question for the jury
and not one to be resolved on this motion.
Therefore, Defendants’ motion to dismiss the breach of contract claims
arising from these eight purchase agreements should be denied.
D. Plaintiffs adequately pleaded that Defendants are liable for their failure to
provide rehabilitation and tenant-related and property management services.
Defendants also contend that Plaintiffs’ breach of contract claims fail because
the purchase agreements at issue do not contain express terms providing that
20
Defendants would provide services related to tenants or property management. Def.
Br. at 7.
Plaintiffs concede that the purchase agreements do not contain language
directly relating to Defendants’ provision of tenant-related and property
management services and that some of the purchase agreements omit the parties’
agreement that the purchase price includes rehabilitation of the properties to make
them suitable for rental. This is, of course, beside the point. As is made clear in the
Amended Complaint, Plaintiffs’ breach of contract claims stem from Defendants’
contractual obligations to sell Plaintiffs “turnkey” rental properties. Amended
Compl. ¶¶ 67-72. The fact that some of the purchase agreements do not include
express terms regarding rehabilitation, securing of tenants, or property
management “does not negate the possibility that the parties entered into a valid
agreement [related to these matters] at some point.” Neurology & Pain Mgmt.
Assocs., P.C. v. Bunin, No. 3:17-CV-035 JD, 2018 U.S. Dist. LEXIS 135896, at *7-8
(N.D. Ind. Aug. 13, 2018) (denying motion to dismiss breach of contract claim,
where agreement containing alleged terms “may have been signed at a later date,
and there may be other documents or memorializations indicating as much. There
may also be evidence that Bunin accepted the agreement through his conduct.
[T]hese facts may be ascertained through discovery and Defendants’ argument is
better suited for summary judgment.”). See also McVay v. Store House Co., No.
1:16-cv-00644, 2016 U.S. Dist. LEXIS 184394, 2016 WL 9461331, at *3 (S.D. Ind.
21
Oct. 24, 2016) (“Whether the [unsigned] Amendment constitutes a valid contract is
not to be decided at the motion to dismiss stage of the litigation.”).
Furthermore, Plaintiffs’ claims related to Defendants’ obligations to provide
tenant-related and property management services sound in quasi-contract and tort
(promissory estoppel, fraud, conversion, and negligence) theories in addition to
contract theories. Plaintiffs have pleaded factual allegations showing that
Defendants told each Plaintiff that they were purchasing “turnkey” rental
properties, with rehabs completed and tenants in place. While Defendants may
dispute that any such promises or agreements exist, that is a question for the jury
and not one to be resolved on this motion. See Sanjuan v. Am. Bd. of Psychiatry &
Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994) (on a motion to dismiss, “the
plaintiff receives the benefit of imagination, so long as the hypotheses are consistent
with the complaint.”).
Defendants’ motion to dismiss Plaintiffs’ breach of contract claims should be
denied.
E. Plaintiffs properly raised both contract-based and tort claims, since it is well-
settled that claims may be brought in the alternative.
Defendants argue that Plaintiffs cannot bring tort claims for promissory
estoppel, fraud, conversion, and negligence alongside their contract claims. Def. Br.
at 21-22. This argument is baseless, since it is well-settled that a plaintiff has the
right to plead in the alternative, and that all that is mandated by the Federal Rules
of Civil Procedure is a short and plain statement of the claim showing that the
22
pleader is entitled to relief. See Alper v. Altheimer & Gray, 257 F.3d 680, 687-88
(7th Cir. 2001); Fed. R. Civ. P. 8(a). Indeed, Rule 8(d) expressly allows “a claim or
defense alternatively,” and “separate claims or defenses . . . regardless of
consistency.” Thus, Defendants’ argument that Plaintiffs cannot bring contract-
based claims and tort-based claims related to the same underlying conduct is
meritless and should be rejected.
Because parties may plead claims in the alternative, and Plaintiffs have pled
factual allegations sufficient to support claims for promissory estoppel, fraud, and
negligence, Defendants’ motion to dismiss these claims should be denied. See DNET
Servs., LLC v. Dig. Intelligence Sys. Corp., No. 1:08-cv-0252-DFH-JMS, 2009 U.S.
Dist. LEXIS 38147, at *14 (S.D. Ind. May 5, 2009) (denying motion to dismiss and
rejecting defendant’s argument that plaintiff’s fraud claim should be dismissed as
“no more than an impermissible repackaging of its breach of contract claims.”).
F. Plaintiffs specifically pleaded in their conversion claim that the funds at

issue are a “special chattel,” and the inferences raised by Plaintiffs’ factual
pleadings support this allegation.
Defendants argue that Plaintiffs’ conversion claim must fail because the
factual allegations in the Amended Complaint fail to show the existence of a specific
chattel, since some of the Purchase Agreements do not provide specific purchase
amounts. Def. Br. at 22-23.
It is well settled that money can be the subject of a conversion action,
however “it must be capable of being identified as a special chattel” and in the form
of “a determinate sum with which the defendant was entrusted to apply to a certain
23
purpose.” Stevens v. Butler, 639 N.E.2d 662, 666 (Ind. Ct. App. 1994) (citation
omitted) (emphasis added).
In their Amended Complaint, Plaintiffs pleaded that they provided funds to
Defendants specifically and expressly for the purpose of rehabilitation of the rental
properties, that the funds were a determinate sum provided by each Plaintiff, that
Defendants were entrusted to apply the funds provided by Plaintiffs for the specific
purpose of rehabilitation of the rental properties, and that Defendants did not use
the funds as directed by Plaintiffs, because the Rental Properties were not
rehabilitated. Amended Compl. ¶¶ 92-95. Plaintiffs also pleaded the precise dollar
amount converted by Defendants. See id. at ¶¶ 52-65. This is adequate to survive
Defendants’ motion to dismiss. See Dayton v. Fox Rest. Venture, LLC, No. 1:16-cv-
02109-LJM-MJD, 2017 U.S. Dist. LEXIS 8755, at *11 (S.D. Ind. Jan. 23, 2017)
(denying defendant’s motion to dismiss conversion claim where plaintiff alleged that
defendant received plaintiff’s tip money and, rather than liquidate the money for
plaintiff’s benefit, utilized the tips to support defendant’s own Refund Policy);
Desert Buy Palm Springs, Inc. v. DirectBuy, Inc., No. 2:11-CV-132 RLM, 2012 U.S.
Dist. LEXIS 81116, at *12 (N.D. Ind. June 12, 2012) (denying defendant’s motion to
dismiss conversion claims, where plaintiff alleged “conversion of membership fees in
the sum of $129,293.01, renewal balance fees in the sum of $13,464.52, handling
fees in the sum of $22,258.53, and a specific sum of determinable subsequent
renewal fees that can and will be identified through discovery.”).
24
Plaintiffs pleaded factual allegations sufficient to show that Plaintiffs gave a
specific and agreed-upon sum of money directly to Defendants to be used for a
particular purpose, and that the money at issue was capable of being identified as a
determinate sum. Defendants’ motion to dismiss Plaintiffs’ conversion claim should
be denied.
G. The Court should reject Defendants’ attempt to disclaim their duties to

Plaintiffs.
Defendants argue, without basis, that Plaintiffs have merely pleaded a
negligent supervision, retention, and hiring claim and such claim should be
dismissed because Plaintiffs have not alleged the existence of an employer-employee
relationship between the Defendants and Oceanpointe. Def. Br. at 24. This
argument, of course, ignores the fact that Plaintiffs also pleaded that Defendants
owed Plaintiffs a duty to “take appropriate steps and implement appropriate
measures and policies to learn of and correct Oceanpointe’s and other entities’
failure to rehabilitate the Properties, locate tenants for the Properties, [and]
manage the Properties[.]” Amended Compl. ¶27. Defendants’ argument that they
(the people and entities who employed deceptive tactics to persuade naïve investors
to buy into their sham real estate investment program) owe no duty to those
investors, is not well taken and should be rejected by this Court.
The facts alleged by Plaintiffs support an inference that Defendants owed a
duty to Plaintiffs to take steps to ensure that Plaintiffs received that which they
purchased from Defendants and, in failing to do so, breached their duty to Plaintiffs
and caused them to suffer damages. Defendants wholly failed to deliver to Plaintiffs
25
the benefit of their bargain. On these allegations, Defendants cannot reasonably
assert that they owed Plaintiffs no duty whatsoever. Tri-Professional Realty v.
Hillenburg, 669 N.E.2d 1064, 1068 (Ind. Ct. App. 1996) (holding that a realty
company owed a duty to a buyer to identify correctly the property it claimed
authority to sell, the buyer incurred damages, and the remedy in which the realty
company was to pay the buyer for the other lot was proper); Harmon v. Fisher, 56
N.E.3d 95, 99-100 (Ind. Ct. App. 2016) (“Where there is a buyer and a seller, one
party may possess some knowledge not possessed by the other.”). Defendants’
motion to dismiss Plaintiffs’ negligence claim should be denied.
H. Plaintiffs’ negligence claims are not barred by the economic loss doctrine.
Defendants next argue that the economic loss doctrine bars Plaintiffs’
negligence claims, since their Amended Complaint also contains a breach of
contract count. Def. Br. at 25.
Generally, the economic loss rule states:
damage from a defective product or service may be

recoverable under a tort theory if the defect causes
personal injury or damage to other property, but contract
law governs damage to the product or service itself and
purely economic loss arising from the failure of the product
or service to perform as expected.
Indianapolis-Marion Cnty. Pub. Library v. Charlier Clark & Linard, P.C., 929
N.E.2d 722, 728 (Ind. 2010) (citation omitted).
26
Defendants acknowledge that the express contracts at issue—the Purchase
Agreements—do not on their faces cover the entirety of the dispute between the
parties. Def. Br. at 8-11. In their breach of contract claims, Plaintiffs allege
Defendants were contractually obligated to sell the rental properties to Plaintiffs,
rehabilitate the properties, identify tenants, screen tenants, secure tenants, manage
the rental properties, and provide rent checks to Plaintiffs. See Amended
Complaint, ¶ 67. In response, the Defendants argue that they had no contractual
obligation to Plaintiffs related to finding and securing tenants, property
management and, for some plaintiffs, rehabilitation. Def. Br. at 8-11.
The obligations which the Defendants contend, earlier in their brief, are not
covered by the purchase agreements are the same obligations at the heart of the
Plaintiffs’ negligence claims. See Amended Complaint, ¶¶ 102-103. Thus,
Defendants are estopped from arguing on one hand that the purchase agreements
control the entire subject matter of the parties’ dispute and on the other hand that
the purchase agreements cover only part of the subject matter of the parties’
dispute. Ogden Martin Systems of Indianapolis, Inc. v. Whiting Corp., 179 F.3d 523,
527 (7th Cir. 1999) (judicial estoppel doctrine protects the courts from being
“manipulated by chameleonic litigants who seek to prevail, twice, on opposite
theories.”) (quotations omitted).
The contract claims are not fatal to the negligence, fraud, or promissory
estoppel claims, and Plaintiffs have properly pursued these claims in the
alternative. See KB Home Ind., Inc. v. Rockville TBD Corp., 928 N.E.2d 297, 305
27
(Ind. Ct. App. 2010) (“if the plaintiff is not seeking damages involving the benefit of
the bargain or other matters governed by contract and/or related principles, the
economic loss doctrine does not bar a negligence action.”); Magic Circle Corp. v.
Crowe Horwath, LLP, 72 N.E.3d 919, 924 (Ind. Ct. App. 2017) (holding that trial
court erred in dismissing an amended complaint for negligence through accountant
malpractice because the economic loss rule did not have the effect of barring an
accountant malpractice claim at tort). Defendants’ motion to dismiss should be
denied.
I. Defendants’ deceptive conduct is actionable under Indiana’s Deceptive

Consumer Sales Act.
1. The sales at issue fall within the statutory definition of a consumer

transaction.
Defendants argue that the transactions giving rise to Plaintiffs’ Deceptive
Consumer Sales Act (“IDCSA”) claims were “not for the purposes of one of the
[IDCSA’s] enumerated categories,” and so the IDSCA does not apply. Def. Br. at 26.
As Defendants themselves note, the IDSCA defines a consumer transaction
as the “sale, lease, assignment, award by change, or other disposition of an item of
personal property, real property, a service, or an intangible . . . to a person for
purposes that are primarily personal, familial, charitable, agricultural, or
household, or a solicitation to supply any of these things.” Indiana Code section 24-
5-0.5(2)(1); Def. Br. at 26. Defendants have not pointed this Court to any authority
providing that the purchaser of an investment property or investment program is
not a consumer, as defined by the statute.
28
In fact, in Watkins v. Alvey, 549 N.E.2d 74, 78 (Ind. Ct. App. 1990), the
Indiana Court of Appeals held that the plaintiffs, who had been persuaded by
defendants to invest in what later turned out to be a pyramid scheme, could
properly bring suit under the IDCSA. The court noted, in particular, that
defendants “held meetings at their home to present information about the operation
of the pyramid scheme and the amount of investment required” and “talked in
glowing terms of the money they had made in the scheme and encouraged people at
the meetings to become participating investors.” Id.
The same is true here. Like the defendants in Watkins, Defendants here
intentionally and materially misrepresented the nature of the program offered by
Defendants and the nature of the investment products sold to Plaintiffs. In light of
the Court of Appeals’ holding in Watkins, and in light of the absence of any
authority presented by Defendants providing that the purchaser of an investment
program may not pursue a private cause of action under the IDCSA, Defendants’
motion to dismiss should be denied.
2. The transactions at issue are not excluded from a private right of

action under the IDSCA.
Finally, Defendants argue that Plaintiffs’ IDSCA claims should be dismissed
because real estate sales transactions are excluded from a private right of action
under the IDSCA.
Defendants misunderstand the nature of Plaintiffs’ IDCSA claims. The
deceptive act at issue under this claim is not the sale of the property itself.
29
Plaintiffs do not allege that Defendants did not actually transfer ownership of the
properties to Plaintiffs. Instead, the alleged deceptive act is Defendants’ sale to
Plaintiff of a “turnkey” investment product. Amended Compl. ¶ 41. In other words,
Defendants caused Plaintiffs to believe that they were purchasing a rental property,
along with Defendants’ services in rehabilitating the properties, securing tenants,
and managing the properties. Put simply, the deceptive sale in this case is
Defendants’ sale to Plaintiff of the rehabilitation of their properties, screening and
securing of tenants, and management of the properties.
Defendants’ transactions with Plaintiffs for the rehabilitation of the
properties, location of tenants, and provision of property management services are
more akin to the construction contracts at issue in McKinney v. State, 693 N.E.2d
65, 1998 Ind. LEXIS 29 (Ind. 1998). In that case, the Indiana Supreme Court held
that construction contracts are not transactions in real property for purposes of the
IDSCA because, unlike the sale of existing structures, a promise to build a structure
forces consumers to rely on representations the builder is more capable than the
consumer of evaluating. See also Pierce v. Drees, 607 N.E.2d 726 (Ind. Ct. App.
1993) (holding that a construction contract to demolish an existing garage, build a
new garage on the same site, and pour a concrete patio next to the home involved
both the sale of goods and the performance of services, and thus, the trial court
could award reasonable attorney fees under the IDCSA); Captain & Co. v. Stenberg,
505 N.E.2d 88 (Ind. Ct. App. 1987) (holding that there was sufficient evidence to
prove a violation of IDCSA, where defendant’s agent knew reconstruction of
30
plaintiffs’ fire-damaged house was not feasible but convinced plaintiffs that it was
feasible in order to induce them to transact further business). Likewise, here,
Defendants made representations to Plaintiffs about the nature of the investment
products Plaintiffs were buying, which Defendants were more capable than
Plaintiffs of evaluating. The purposes of the IDCSA would not be served, then, by
dismissing Plaintiffs’ claims.
For these reasons, Plaintiffs have sufficiently pleaded a cause of action under
the IDCSA. Defendants’ motion to dismiss should be denied.
V. CONCLUSION
For all of these reasons, Defendants’ Rule 12(b)(6) motion to dismiss should
be denied.
Date: March 21, 2019 Respectfully submitted:
RILEY WILLIAMS & PIATT, LLC
/s/ James A. Piatt

James A. Piatt (#28320-49)
Anne Medlin Lowe (#31402-49)
301 Massachusetts Avenue, Suite 300
Indianapolis, Indiana 46204
(317) 633-5270 / (317) 426-3348 Fax
jpiatt@rwp-law.com
alowe@rwp-law.com
Counsel for Plaintiffs
31
Certificate of Service
I hereby certify that on the 21st day of March, 2019, a copy of the foregoing
Plaintiffs’ Response in Opposition to Defendants’ Motion to Dismiss was filed
electronically. Service of this filing will be made on all ECF-registered counsel by
operation of the Court’s electronic filing system. Parties may access this filing
through the Court’s system.
/s/ James A. Piatt

James A. Piatt
32


)
Plaintiffs, )
)
)
)
Defendants. )
MORRIS INVEST’S AND CLAYTON MORRIS’S MOTION

TO SEVER OR DISMISS AMENDED COMPLAINT
FOR MISJOINDER OF PLAINTIFFS
Defendants Morris Invest and Clayton Morris (collectively “Morris
Defendants”), by counsel, move this Court to dismiss or sever improperly joined
Plaintiffs from the first-named Plaintiff in this action pursuant to Rules 20 and 21 of
the Federal Rules of Civil Procedure. Plaintiffs’ claims in the Amended Complaint are
not properly joined, and any Plaintiff whose claim(s) survives this Court’s ruling on
the Morris Defendants’ Partial Motion to Dismiss Pursuant to 12(b)(6) and 9(b) (Dkt.
25) should be severed or dismissed without prejudice and ordered to file individual
complaints for any remaining claim(s). The grounds for this motion are set forth in
the Brief in Support of Morris Invest’s and Clayton Morris’s Motion to Sever or Dismiss
Amended Complaint for Misjoinder of Plaintiffs, filed contemporaneously herewith.
WHEREFORE, the Morris Defendants respectfully move this Court to sever or
dismiss, without prejudice, all claims but those of the first-named McLesky plaintiffs,
to the extent any Plaintiff’s claim(s) survive the Morris Defendants’ Motion to Dis-
miss Pursuant to Rule 12(b)(6) and 9(b).
/s David J. Hensel
PO Box 44989
Tel: (317) 822-4400
Fax: (317) 822-0234
Counsel for Morris Invest and Clayton Morris
CERTIFCATE OF SERVICE
I hereby certify that on March 7, 2019, a copy of the above was filed electroni-
cally. Service of this filing will be made on all ECF-registered counsel by operation
of the Court’s electronic-filing system. Parties may access this filing through the
Court’s system.
/s David J. Hensel
David J. Hensel
Amanda L.B. Mulroony
Timothy W. Walters
2


)
Plaintiffs, )
)
)
)
Defendants. )
BRIEF IN SUPPORT OF MORRIS INVEST’S AND CLAYTON MORRIS’S

MOTION TO SEVER OR DISMISS AMENDED COMPLAINT
FOR MISJOINDER OF PLAINTIFFS
Defendants Morris Invest and Clayton Morris (collectively “Morris Defend-
ants”), by counsel, move this Court to dismiss or sever improperly joined Plaintiffs
from the first-named Plaintiff in this action pursuant to Rules 20 and 21 of the Fed-
eral Rules of Civil Procedure. Plaintiffs’ claims in the Amended Complaint are not
properly joined, and any Plaintiff whose claim(s) survives this Court’s ruling on the
Morris Defendants’ Partial Motion to Dismiss Pursuant to 12(b)(6) and 9(b) (Dkt. 25)
should be severed or dismissed without prejudice and ordered to file individual com-
plaints for any remaining claim(s).1
INTRODUCTION AND PROCEDURAL STATUS
Twenty-two individuals banded together and invoked diversity jurisdiction to
file this lawsuit in September 2018, alleging various state-law claims.2 The Morris
Defendants filed a Motion to Dismiss for Lack of Subject-Matter Jurisdiction on No-
vember 5, 2018 after Plaintiffs failed to allege complete diversity. (Dkt. 11). Then, a
similar-but-different group of Plaintiffs3 filed an Amended Complaint4 alleging the
same legal theories as before. (Dkt. 20). At the heart of these theories is the negotia-
tion, interpretation, execution, and obligations related to 23 separate contracts for 23
separate real-estate transactions. The now-sixteen Plaintiffs can be separated in 14
discrete ownership groups, alleging breaches of their respective contracts, frauds,
negligence, statutory, and equitable theories revolving around the conduct of six par-
ties – four of whom are not named as defendants.5 The following table shows the
1 Defendants’ Partial Motion to Dismiss Pursuant to 12(b)(6) and 9(b) seeks dismissal with prejudice
of the entirety of Counts II, III, IV, V, and VI , and portions of Count I related to expired contracts and
terms not in the contracts.
2The Original Complaint contained 6 counts: i) breach of contract; ii) promissory estoppel; iii) fraud/de-
ception; iv) conversion; v) negligence; and vi) violations of the Indiana Deceptive Consumer Sales Act.
The Amended Complain contains the same 6 counts, but with several different plaintiffs.
3 The Amended Complaint replaced individual plaintiffs with corporate plaintiffs, e.g. Alanann Prop-
erties, LLC owned by previously-named plaintiffs Laura and Jeffrey Rolerat. Of the original 22 named
individual plaintiffs, 18 are individuals suing in the Amended Complaint either individually or
through a corporate entity. The Amended Complaint dropped Victor DeJesus, Michael DeJesus, and
Jihua Liu and Li Wang and added AR Financials, LLC (Adam Rahilly) and Reena Gadagottu.
4 The Amended Complaint was filed on December 28, 2018.
5In the Amended Complaint, the Plaintiffs allege wrongdoing by the following parties: i) Clayton Mor-
ris, ii) Morris Invest, iii) Oceanpointe Investments Limited, iv) Indy Jax Wealth Holdings, v) Indy Jax
2
discrete ownership groups, the distinct properties at issue, and the separate dates
when Plaintiffs entered into their respective Purchase Agreements:
Exhibit Property Ad-

Buyer Date on Each Purchase Agreement
Number dress
BN Invest, LLC (Cole 2371 North Gale
Exhibit 12 May 17, 2017 - Exh. 12, ln. 1.
Peterson) Street
AR Financials, LLC 3001 East Michi-
Exhibit 22 July 5, 2017 - Exh. 22, ln. 1.
(Adam Rahilly) gan Street
AR Financials, LLC 6237 E. 26th
Exhibit 23 October 25, 2017 - Exh. 23, ln. 1.
(Adam Rahilly) Street
Larry and Leslie 866 W. 29th
Exhibit 1 November 18, 2017 - Exh. 1, ln. 1.
McLeskey Street
Carlos Huerta Homes 871 W. 25th
Exhibit 9 November 28, 2017 - Exh. 9, ln. 1.
IN, LLC (Carlos Huerta) Street
BKS IN Properties, LLC 1342 North
Exhibit 14 January 8, 2018 - Exh. 14, ln. 1.
(Brian Sidaway) Ewing Street
Deepak Neelagiri and 4024 Eastern
Reena Gadagottu Avenue
300 Real Estate Invest-
4631 E. 34th
Exhibit 19 ments, LLC (Jeffrey January 20, 2018 - Exh. 19, ln. 1.
Street
Lemon)
Deepak Neelagiri and 3605 North Ri-
Reena Gadagottu ley Avenue
Deepak Neelagiri and 1530 South Cen-
Reena Gadagottu tennial Street
Deepak Neelagiri and 3702 Forest
Reena Gadagottu Manor Avenue
Deepak Neelagiri and 3417 North
Exhibit 6 February 7, 2018 - Exh. 6, ln. 1.
Reena Gadagottu Drexel Avenue
Deepak Neelagiri and 2516 East 18th
Reena Gadagottu Street
Covenantal Corporation 2902 N. Glad-
(Anthony Kulczak) stone Avenue
DL3 Properties, LLC
325/327 N.
Exhibit 15 IN1801 (Lilli and Dean February 24, 2018 - Exh. 15.
Beville Ave.
Thorsell)
300 Real Estate Invest-
1117 W. Roache
Exhibit 20 ments, LLC (Jeffrey March 7, 2018 - Exh. 20.
St.
Lemon)
1446 Mount, LLC (Cesar 1446 N. Mount
Exhibit 18 March 12, 2018 - Exh. 18.
De La Guardia) St.
Alanann Properties,
2327 Columbia
Exhibit 8 LLC (Jeffrey & Laura March 13, 2018 - Exh. 8.
Avenue
Rolerat)
Properties, vi) Oceanpoint Holdings. The Plaintiffs have not named the last four entities as Defendants
here.
3
Finnley Invest, LLC

Exhibit 21 (Dawn and Steve 3239 Elmira St. March 22, 2018 - Exh. 21.
Vanderhill)
DL3 Properties, LLC
1322 W. 30th
Exhibit 16 IN1801 (Lilli and Dean March 23, 2018 - Exh. 16.
Street
Thorsell)
Galveston, LLC (Debra
3415 Brouse Av-
Exhibit 13 and Christopher March 27, 2018 - Exh. 13.
enue
Thomas)
LEJ Management, LLC 2432 & 2434 N.
Exhibit 10 April 2, 2018 - Exh. 10.
(Edwin Reina) Kitley Ave
BN Invest, LLC (Cole 1266 W. 26th
Exhibit 11 April 10, 2018 - Exh. 11.
Peterson) Street
Table 16
On February 28, 2019, the Morris Defendants filed a Partial Motion to Dismiss the
Plaintiffs’ Amended Complaint pursuant to Rules 12(b)(6) and 9(b), arguing that the
entirety of Counts II, III, IV, V, and VI, and parts of Count I should be dismissed with
prejudice. (Dkt. 25). To the extent that claims survive for breach of contract under
Count I, and alternatively to the extent that this Court does not dismiss Counts II,
III, IV, V and VI in their entirety as to all Plaintiffs with prejudice, this Court should
correct the Plaintiffs’ improper party joinder and require each Plaintiff (or discrete
ownership group) to file individual complaints for any remaining claim(s).
STANDARD OF REVIEW
Federal Rule of Civil Procedure 20(a)(1) governs the permissive joinder of
plaintiffs in one action. It provides that persons may join in one action as plaintiffs if
“they assert any right to relief . . . with respect to or arising out of the same transac-
tion, occurrence, or series of transactions or occurrences; and . . . any question of law
6The Exhibits referenced here are Exhibits 1-23 attached to the Morris Defendants’ Partial Motion
to Dismiss the Amended Complaint Pursuant to Rules 12(b)(6) and 9(b). (Dkt. 26-2 through -24).
4
or fact common to all plaintiffs will arise in the action.” Fed. R. Civ. P. 20(a)(1) (em-
phasis added). Federal Rule of Civil Procedure 21 provides that “[o]n motion or on its
own, the court may at any time, on just terms, add or drop a party.” Fed. R. Civ. Pro.
21. A district court has wide discretion relative to the misjoinder of parties “’and will
be reversed . . . only when there has been a clear abuse of that discretion.’” Intercon
Research Assocs., Ltd. v. Dresser Indus., Inc., 696 F.2d 53, 56 (7th Cir. 1982) (quoting
United States v. Elfer, 246 F.2d 941, 946 (9th Cir. 1957)). When a district court ex-
amines permissive joinder, the court should consider whether a party’s joinder com-
ports with principles of fundamental fairness and creates any potential prejudice. Id.
at 57-58; see also Coleman v. Quaker Oats Co., 232 F.3d 1271, 1296 (9th Cir. 2000)
(noting that even if Rule 20’s requirements are met, the court must examine whether
joinder serves the principles of fundamental fairness).
ARGUMENT
Plaintiffs fail to satisfy the joinder requirements of Rule 20. In order for plain-
tiffs to join in an action, they must both (1) “assert any right to relief jointly, severally,
or in the alternative with respect to or arising out of the same transaction, occurrence,
or series of transactions or occurrences” and (2) have “any question of law or fact
common to all plaintiffs [that] will arise in the action.” Fed. R. Civ. P. 20(a)(1). Plain-
tiffs have not satisfied either requirement.
A cursory analysis of Plaintiffs’ Amended Complaint shows that it fails to com-
port with Rule 20’s requirements. Each plaintiff’s individual allegations involve sep-
arate-and-distinct real-estate transactions spanning a year-long timeframe, and each
5
Plaintiff has unique facts relating to its claims and alleged damages. See Figure 1,
supra, and Am. Compl. ¶¶52-65. As reflected within the Amended Complaint:
 Sixteen Plaintiffs (14 discrete ownership groups) individually purchased 23
separate properties from three sellers: Oceanpointe Investments Limited,
Indy Jax Wealth Holdings, LLC, or Indy Jax Properties, LLC (Am. Compl.
¶ 36, ¶¶ 52-65);
 The Plaintiffs had separate, individual interactions and communications
with the Morris Defendants which form the bases for each Plaintiff’s re-
spective claims (Am. Compl. ¶¶ 52-65);
 The Plaintiffs entered into separate and distinct Purchase Agreements for
each property, with varying terms and conditions: some contain terms re-
lating to rehabilitation of the property while others do not; and none contain
terms relating to tenant or property management services (Brief in Support
of Mot. to Dismiss at p. 10; see also id. Exhs. 1-23);
 The Plaintiffs allege differing factual scenarios regarding tenant occupancy
of the properties: tenant-occupancy but non-receipt of rent payment (Am.
Compl. ¶ 55); receipt of rental payments without renter occupancy (Am.
Compl. ¶ 65); or a lack of tenant occupancy (Am. Compl. ¶ 57); and
 The Plaintiffs each allege that rehab work was not performed on each prop-
erty (Am. Compl. ¶¶ 52-65), which will necessarily require them to estab-
lish (1) what rehab work was supposed to be completed, (2) what work was
not completed, and (3) respective damages.
6
The Plaintiffs here are not properly joined in a single action because their
claims do not arise out of the same transaction, occurrence, or series of transactions
or occurrences; nor do they present any question of law or fact common to all plain-
tiffs. Each Plaintiff’s allegations involve different real-estate transactions for differ-
ent properties, purchased from different sellers, at different times, involving individ-
ual alleged communications, with different contract terms and amounts. See, e.g.,
Garner v. Bank of Am. Corp., No. 2:12-CV-02076-PMP, 2014 WL 1945142, at *2 (D.
Nev. May 13, 2014) (granting motion to dismiss for improper joinder of plaintiffs
bringing claims relating to 38 real property purchases in Nevada).
Each Plaintiff’s dealings with Defendants were necessarily varied and involved
individual communications, at different times, regarding separate purchase arrange-
ments for different pieces of real estate, with respect to each Plaintiff and respective
real-estate transactions. See Visendi v. Bank of Am., N.A., 733 F.3d 863, 870 (9th Cir.
2013) (plaintiffs’ interactions with defendants regarding alleged misconduct for dis-
tinct loan transactions secured by separate properties were not uniform and did not
arise from the same transaction, occurrence or series of transactions or occurrences);
Intercon, 696 F.2d at 57 (affirming determination of improper joinder of defendants
because separate lien claims did not constitute the same transaction or series of
transactions); Insolia v. Philip Morris Inc., 186 F.R.D. 547, 549 (W.D. Wis. 1999)
(“Rule 20 demands more than the bare allegation that all plaintiffs are victims of a
7
fraudulent scheme perpetrated by one or more defendants; there must be some indi-
cation that each plaintiff has been induced to act by the same misrepresentation.”
(emphasis added)).
Each Plaintiff’s claims – whether based in fraud, contract, tort, or statute –
require particularized factual analysis, including: the alleged individualized commu-
nications between each Plaintiff and the Morris Defendants; the terms and perfor-
mance of different contractual terms; the alleged breach or nonperformance of those
terms; and alleged damages of each Plaintiff. See Visendi, 733 F.3d at 870 (plaintiffs
alleging misconduct for separate loan transactions on separate properties did not pre-
sent any question of law or fact common to all plaintiffs sufficient to permit joinder
where, inter alia, plaintiffs’ fraud-based, contract-based and negligence claims each
required particularized factual analysis).
Each Plaintiff has distinct damages and causation issues – e.g. what rehab
work was promised but not completed and whether tenants were placed in a property
(and status of each property prior-to and following tenant occupancy). See, e.g., Inso-
lia v. Philip Morris Inc., 186 F.R.D. 547, 550 (W.D. Wis. 1999) (concluding plaintiffs’
claims did not arise from the same transaction or series of transactions where causa-
tion and damages evidence involved individualized inquiries). Neither of the two re-
quirements for permissive joinder of plaintiffs has been met, and the Court should
dismiss and/or sever the Plaintiffs in this suit.
Separate and apart from Plaintiffs’ failure to satisfy the requisite elements of
Rule 20(a) for party joinder, it would violate principles of fundamental fairness and
8
result in significant prejudice to require the Morris Defendants to defend against
claims of multiple plaintiffs in a single suit. Submitting the plaintiffs’ allegations,
each with its own unique set of facts and circumstances, will confuse the jury and
prejudice Morris and Morris Invest. See, e.g., Coleman v. Quaker Oats Co., 232 F.3d
1271, 1297 (9th Cir. 2000) (“The district court properly considered the potential prej-
udice to [defendant] created by the parade of terminated employees and the possibil-
ity of factual and legal confusion on the part of the jury.”) Insolia v. Philip Morris
Inc., 186 F.R.D. 547, 551 (W.D. Wis. 1999) (“Confusion can lead to prejudice when
there are inadequate assurances that evidence will be weighed against the appropri-
ate party and in the proper context.”). Dismissal and severance will not prejudice
Plaintiffs, as they remain free to pursue remaining claims individually. See Visendi,
733 F.3d at 871.7
CONCLUSION
For all the above reasons, this Court should sever or dismiss without preju-
dice all claims but those of the first-named McLesky plaintiffs, to the extent any
Plaintiff’s claim(s) survive the Morris Defendants’ Motion to Dismiss Pursuant to
Rule 12(b)(6) and 9(b).
7Rule 20 “does not excuse any of the joined parties from the obligation to state a claim against defend-
ant or defendants upon which relief may be granted.” 7 Wright & Miller, Federal Practice & Proce-
dure§ 1656 (3d ed.). For all the reasons stated in Defendants’ motion to dismiss pursuant to Rule
12(b)(6) and 9(b), the vast majority of plaintiffs’ claims fail to state claims upon which relief may be
granted and should be dismissed with prejudice.
9
/s David J. Hensel
PO Box 44989
Tel: (317) 822-4400
Fax: (317) 822-0234
dhensel@hooverhullturner.com
amulroony@hooverhullturner.com
twalters@hooverhullturner.com
Counsel for Defendants Morris Invest

and Clayton Morris
CERTIFCATE OF SERVICE
I hereby certify that on March 7, 2019, a copy of the above was filed electroni-
cally. Service of this filing will be made on all ECF-registered counsel by operation
of the Court’s electronic-filing system. Parties may access this filing through the
Court’s system.
/s David J. Hensel
David J. Hensel
Amanda L.B. Mulroony
Timothy W. Walters
1000225V2
10
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF INDIANA
LARRY AND LESLIE KAY MCLESKEY;

DEEPAK NEELAGIRI AND REENA
GADAGOTTU; ALANANN PROPERTIES, Case No.: 1:18-cv-02797-WTL-DML
LLC; CARLOS HUERTA HOMES IN,
LLC; LEJ MANAGEMENT, LLC; BN
INVEST, LLC; GALVESTON, LLC; BKS Plaintiffs’ Response in
IN PROPERTIES, LLC; DL3 Opposition to Defendants’
PROPERTIES, LLC IN1801;
COVENANTAL CORP.; 1446 MOUNT, Motion to Sever or Dismiss
LLC; 300 REAL ESTATE INVESTMENTS, Amended Complaint for
LLC; FINNLEY INVEST, LLC; and Misjoinder of Plaintiffs
AR FINANCIALS, LLC,
vs.
MORRIS INVEST and CLAYTON

MORRIS,
Defendants.
Plaintiffs, Larry and Lesley Kay McLeskey; Deepak Neelagiri and Reena
Gadagottu; Alanann Properties, LLC; Carlos Huerta Homes IN, LLC; LEJ
Management, LLC; BN Invest, LLC; Galveston, LLC; BKS IN Properties, LLC; DL3
Properties, LLC IN1801; Covenantal Corp.; 1446 Mount, LLC; 300 Real Estate
Investments, LLC; Finnley Invest, LLC; and AR Financials, LLC (collectively,
“Plaintiffs”), by counsel, hereby submit their opposition to Morris Invest’s and
Clayton Morris’s (collectively, “Defendants”) Motion to Sever or Dismiss Amended
Complaint for Misjoinder of Plaintiffs (“Motion”).

I. INTRODUCTION
Plaintiffs brought this action against Defendants after Defendants
fraudulently induced Plaintiffs to buy into an investment program involving rental
properties Defendants knew would never be rentable or occupied by tenants.
Defendants persuaded each Plaintiff to send them tens of thousands of dollars by
describing their product or program as providing “turnkey” rental investment
properties in Indianapolis. Each Plaintiff received the same sales pitch and the
same description of the program, and each Plaintiff relied on those representations
in entering into the program. Each Plaintiff fulfilled his or her end of the bargain,
but no Plaintiff received the benefits Defendants were obligated to provide, even
though Defendants retained all the money paid them by Plaintiffs. All of this
happened within a time frame of less than a year.
In their Motion, Defendants ask this Court to “require each Plaintiff” (of
which there are sixteen) “to file individual complaints[.]” Defendant’s Brief in
Support of Motion to Sever (“Def. Br.”) at 4. In doing so, Defendants ignore that all
Plaintiffs have pleaded identical claims against Defendants. Defendants also ignore
that the claims asserted by the Plaintiffs involve virtually identical issues of law
and fact regarding Defendants’ common scheme. Under the liberal nature of Rule
20(a), dismissal or severance of the claims asserted against Defendants would be
improper. And severing Plaintiffs’ claims would waste time and resources of the
parties and judiciary by forcing the Court to consider the same legal issues sixteen
separate times. For these reasons, Defendants’ Motion should be denied.
2
II. FACTUAL BACKGROUND
Defendants Clayton Morris and Morris Invest attract would-be real estate
investors by publishing podcasts, YouTube videos, and blog posts selling “turnkey”
rental properties to generate immediate passive income for those investors.
Amended Compl. at ¶¶ 23, 28.
Unfortunately for Morris Invest’s investors, however, Defendants’ claims
about its program are false, cleverly disguising a Ponzi scheme. Id. at ¶ 30. Morris
Invest and Clayton Morris are, in fact, nothing but marketers. Id. They use
affiliates to identify, sell, rehabilitate, locate tenants for, and manage the rental
properties they convince their investors, including the Plaintiffs, to purchase. Id. at
¶ 30.
The Plaintiffs in this case are victims of Defendants’ Ponzi scheme,
inexperienced investors Defendants persuaded to purchase rental properties in
Marion County in 2017 and 2018. Id. at ¶¶ 34-35. Each of the Plaintiffs purchased
one or more single family homes, from and through Defendants, to be used as rental
properties to generate “passive” rental income. Amended Compl. ¶ 38. Each
Plaintiff was led to believe by Defendants that the purchase funds paid to Morris
Invest was earmarked for both the purchase of the property and its rehabilitation.
Id. at ¶¶ 39, 42. Each Plaintiff was led to believe that Defendants were responsible
for finding, screening, and securing tenants for the “turnkey” rental properties. Id.
at ¶¶ 40-41. Each of the Plaintiffs paid tens of thousands of dollars out of their
savings or retirement accounts for worthless properties and, now, owe additional
3
thousands of dollars for rehabilitation work, code violations, and/or tax liens. Id. at
¶ 50. Some of the Plaintiffs did temporarily receive checks for “rent” for several
months, while others never received any rent checks. Id. at ¶¶ 43-44. All Plaintiffs
ended up with properties that have not been rehabilitated, are not being rented, are
sitting vacant, and are essentially worthless. Id. at ¶¶ 45-46.
III. LEGAL STANDARD
Rule 20(a) allows permissive joinder of claims “arising out of the same
transaction, occurrence, or series of transactions or occurrences [when] … any
question of law or fact common to all these persons will arise in the action.” Fed. R.
Civ. P. 20(a). For joinder to occur, then, two requirements must be satisfied: “First,
there must be a right to relief arising out of the same transaction or occurrence, or
series of transactions or occurrences. Second, there must be a question of law or fact
common to all the plaintiffs.” Rochlin v. Cincinnati Ins. Co., No. IP 00-1898-C H/K,
2003 U.S. Dist. LEXIS 13759, at *36-38 (S.D. Ind. July 8, 2003) (quoting Barner v.
City of Harvey, 2003 U.S. Dist. LEXIS 5060, 2003 WL 1720027, *2 (N.D. Ill. 2003)).
The purpose of Rule 20 is to promote trial convenience and to expedite the
resolution of disputes, thereby preventing multiple lawsuits. Elmore v. Henderson,
227 F.3d 1009, 1012 (7th Cir. 2000); Mosley v. General Motors Corp., 497 F.2d 1330,
1332 (8th Cir. 1974). In light of this purpose, and in addition to the requirements of
Rule 20, a court may consider “other relevant factors in a case in order to determine
whether the permissive joinder of a party will comport with the principles of
fundamental fairness.” Chavez v. Illinois State Police, 251 F.3d 612, 632 (7th Cir.
4
2001), quoting Intercon Research Assoc., Ltd. v. Dresser Indus., Inc., 696 F.2d 53,
58 (7th Cir. 1982).
Federal policy favors joinder, and the district court has wide discretion when
deciding whether joinder of parties is proper. Anderson v. Montgomery Ward & Co.,
852 F.2d 1008, 1011 (7th Cir. 1988). “Joinder is encouraged because it avoids a
multiplication of lawsuits involving similar or identical issues.” Monon Tel. Co. v.
Bristol, 218 F.R.D. 614, 616 (N.D. Ind. 2003).
IV. ARGUMENT
A. Plaintiffs’ claims arise from the same series of transactions and occurrences.
Consistent with the liberal joinder standard, “[c]ourts have adopted a
flexible, case-by-case approach to determine whether a particular factual situation
constitutes a single transaction or series of transactions for purposes of Rule 20(a).
The ultimate question is whether the claims . . . are ‘logically related.’” McLernon v.
Source Int’l, Inc., 701 F. Supp. 1422, 1425 (E.D. Wis. 1988) (citing 7 CHARLES A.
WRIGHT, ARTHUR R. MILLER & MARY K. KANE, FEDERAL PRACTICE AND PROCEDURE, §
1653 p. 382 (2d ed. 1986)).
Defendants argue that, because each of the Plaintiffs entered into separate
real estate transactions with Defendants, had their own interactions with
Defendants, and suffered varying amounts of damages, Plaintiffs’ claims are
improperly joined. Def. Br. at 5-6. This court has concluded that “[a] ‘transaction’
can encompass a series of many occurrences, depending not so much upon the
5
immediateness of their connection as upon their logical relationship.” Delgado v.
DirecTV, Inc., No. 1:14-cv-01722-SEB-DML, 2016 U.S. Dist. LEXIS 33719, at *42
(S.D. Ind. Mar. 16, 2016) (quoting Rochlin, 2003 U.S. Dist. LEXIS 13759, 2003 WL
21852341, at *13). “Allegations of ‘company-wide policies’ and ‘systems of decision-
making’ can constitute a single transaction or series of transactions for Rule
20(a)purposes.” Delgado, 2016 U.S. Dist. LEXIS 33719, at *42.
The opinions cited by Defendants are not persuasive under the facts of this
case. The Ninth Circuit in Visendi v. Bank of Am., N.A., 733 F.3d 863, 870 (9th Cir.
2013), a case involving multiple plaintiffs and many different defendants, found
that joinder of the defendants was not proper since the complaint merely alleged
that “Defendants violated the same laws in comparable ways.” Likewise, Garner v.
Bank of Am. Corp., No. 2:12-CV-02076-PMP-GWF, 2014 U.S. Dist. LEXIS 66203, at
*2 (D. Nev. May 13, 2014) involved multiple defendants allegedly making unrelated
representations to the plaintiffs. In Intercon Research Assocs., Ltd. v. Dresser
Indus., Inc., 696 F.2d 53, 57 (7th Cir. 1982), the court found joinder of the
defendants to be improper because there was only an “attenuated relationship”
between the claims against the defendants. And in Insolia v. Philip Morris, Inc., 186
F.R.D. 547, 549 (W.D. Wis. 1999), the court found joinder to be improper where the
plaintiffs pleaded only a “bare allegation” that they were victims of a fraudulent
scheme.
Here, Defendants’ misrepresentations to each Plaintiff were virtually
identical and part of a company-wide scheme to defraud. Defendants contacted each
6
Plaintiff by phone and/or email and made virtually identical misrepresentations to
each Plaintiff about the nature of the real estate “investment” program offered by
Defendants. Defendants falsely portrayed to each Plaintiff the real estate properties
as “turnkey” rental properties generating immediate income. Amended Compl. ¶¶
82-87. Moreover, Defendants accepted funds from each Plaintiff without providing
any Plaintiff the benefit of his or her bargain.
Under these facts and circumstances, joinder of Plaintiffs’ claims is proper
because the Amended Complaint makes detailed “[a]llegations of ‘company-wide
policies’ and ‘systems of decision-making’” sufficient to “constitute a single
transaction or series of transactions for Rule 20(a) purposes.” Delgado, 2016 U.S.
Dist. LEXIS 33719, at *42. See also Monon Tel. Co. v. Bristol, 218 F.R.D. 614, 616
(N.D. Ind. 2003) (“The alleged actions of these Defendants, while undertaken
independently of one another, are part of a series of similar occurrences, satisfying
the first prong of Rule 20(a).”); Balkind v. Tri-Pak Development Corp., 17 Fed R
Serv 2d (Callaghan) 77 (E.D. Pa. 1973) (holding that joinder of plaintiffs is
permissible in an action alleging that defendants had made identical
misrepresentations concerning materials to be utilized in building of homes and
that defects in construction of individual homes resulted in devaluation of market
value of each of plaintiffs’ property because such claims contain common questions
of fact); Hohlbein v. Heritage Mut. Ins. Co., 106 FRD 73, 1 Fed R Serv 3d
(Callaghan) 1519 (E.D. Wis. 1985) (plaintiffs’ fraud claims against former employer
arise from same series of transactions or occurrences and implicates common
7
questions of law or fact, even though plaintiffs were employed at different times in
different positions, and were terminated at different times for what appear to be
different reasons, where each plaintiff alleges that defendant’s representatives
failed to disclose employer’s policy requiring any newly-hired executive to complete
probationary period).
B. Plaintiffs’ claims involve common questions of fact and law.
Defendants declare that Plaintiffs’ claims involve no common questions of
fact and law because the claims arise from separate agreements with Defendants,
Defendants’ communicated with Plaintiffs separately, Defendants allegedly
breached the agreements in different ways, and Plaintiffs suffered varying amounts
of damages. Def. Br. at 7-8.
The second prong of Rule 20 does not require that all questions of law and
fact raised by the dispute be common, but only that there be “at least one common
question of law or fact.” Stephens v. Kaiser Found. Health Plan of the Mid-Atlantic
States, Inc., 807 F. Supp. 2d 375, 384 (D. Md. 2011); Rochlin, 2003 U.S. Dist. LEXIS
at *41. And this Court has already held that “[t]he fact that each plaintiff may have
suffered different effects from the alleged discrimination is immaterial for the
purposes of determining the common question of law or fact.” Rochlin, 2003 U.S.
Dist. LEXIS 13759 at *41 (quoting Mosley at 1334).
Defendants cannot in good faith argue that there is not at least one common
question of law or fact among Plaintiffs’ claims. Each Plaintiff seeks redress under
identical legal theories against Defendants. Defendants made the same
8
misrepresentations to each Plaintiff, and injured each Plaintiff in the same manner.
Each Plaintiff will submit similar evidence of Defendants’ company-wide scheme to
defraud would-be investors, a scheme to which each Plaintiff fell victim. This is
sufficient to make joinder proper under Rule 20. See Rochlin, 2003 U.S. Dist. LEXIS
at *42 (joinder of plaintiffs’ claims is proper where plaintiffs have alleged a
company-wide policy of discrimination. Even though proof of the discrimination will
necessarily involve the various work records of each plaintiff, there is likely to be
“substantial overlap in the evidence presented.”) (quoting King v. Pepsi Cola
Metropolitan Bottling Co., 86 F.R.D. 4, 6 (E.D. Pa. 1979)); Bruno v. Mona Lisa At
Celebration, LLC (In re Mona Lisa at Celebration, LLC), 410 BR 710 (Bankr. M.D.
Fla. 2009) (even though proceedings involved 55 different purchasers of
condominium units from a bankruptcy debtor, most of whom signed different
purchase agreements at different times, deposited different amounts with the
debtor, and filed different claims against the debtor, joinder of the purchasers was
permissible under Fed. R. Civ. P. 20(a) since the claims arose out of the same series
of transactions and occurrences and, despite factual differences, a significant
number of questions of fact and law were common to all purchasers); Delgado v.
DirecTV, Inc., No. 1:14-cv-01722-SEB-DML, 2016 U.S. Dist. LEXIS 33719, at *44-45
(S.D. Ind. Mar. 16, 2016) (where each claim asserted by each Plaintiff presents at
least two fundamental legal issues common to each Defendant, the second prong of
Rule 20(a)(2) is satisfied and parties were properly joined).
9
C. Joinder of the claims will promote judicial efficiency.
Courts may “consider, in addition to the requirements of Rule 20, ‘other
relevant factors in a case in order to determine whether the permissive joinder of a
party will comport with the principles of fundamental fairness.’” Chavez v. Ill. State
Police, 251 F.3d 612, 632 (7th Cir. 2001) (quoting Desert Empire Bank v. Ins. Co. of
N. Am., 623 F.2d 1371, 1375 (9th Cir. 1980)). Judicial economy is a critical factor in
the Rule 20 analysis: “the transaction and common question requirements
prescribed by Rule 20(a) are to be liberally construed in the interest of convenience
and judicial economy.” King v. Ralston Purina Co., 97 F.R.D. 477, 479-80 (W.D. N.C.
1983); see also Lewis v. City of Los Angeles, 5 Fed.Appx. 717, 718 (9th Cir. 2001).
The primary objective of Rule 20 is to promote trial convenience and expedite
the adjudication of disputes, thus preventing multiple lawsuits. Elliott v. USF
Holland, Inc., CAUSE NO. NA 01-159-C H/H, 2002 U.S. Dist. LEXIS 7817, at *7
(S.D. Ind. Mar. 21, 2002). Contrary to that goal, Defendants argue for severance
and, ultimately, sixteen separate lawsuits making the same claims against the
same Defendants, alleging the same facts arising from the same fraudulent scheme,
and claiming virtually identical categories (if not amounts) of damages. Defendants
fail to acknowledge the practical reality that, if the cases are severed, Defendants
will likely receive sixteen sets of nearly identical discovery and sixteen requests for
depositions of key company witnesses. The parties will conduct sixteen separate
case management conferences, and will require intervention from the court in
sixteen cases each time a discovery dispute arises.
10
Efficiency and judicial economy will best be served by preserving joinder in
this case. Defendants’ halfhearted attempt to argue that severance would promote
judicial economy is not persuasive. A consolidated action will facilitate the
resolution of Plaintiffs’ claims, promote trial convenience, minimize costs—both for
the parties and for the judicial system—and ensure consistent rulings. Severance,
on the other hand, will force the parties and the Court to proceed with sixteen
different, but essentially identical, suits.
D. Defendants have not identified, and will not suffer, any prejudice as a result
of the joinder of Plaintiffs’ claims.
Defendants have presented no facts showing that they will be prejudiced if
Plaintiffs’ claims are not severed. They merely conclude, without grounds or citation
to facts or authority, that a consolidated action will prejudice them. Def. Br. at 9.
To the extent that Defendants contend that the joinder of Plaintiffs’ claims
will confuse the jury, any concern of Defendants in this regard could easily be
alleviated through the use of proper jury instructions. See, e.g., Duke v. Uniroyal
Inc., 928 F.2d 1413, 1421 (4th Cir. 1991) (concluding that for claims arising from the
same transaction, which raised common questions of law and fact, the “broad
variation of circumstances . . . could be easily distinguished by the jury.”); Hanley v.
First Investors Corp., 151 F.R.D. 76, 80 (E.D. Tex. 1993) (allowing Rule 20 joinder
and rejecting defendant’s concern about prejudice from juror confusion because the
court could address the concern with jury instructions, and it was “well within the
jury’s abilities to distinguish between the idiosyncrasies of each case”).
11
Furthermore, Defendants’ purported concern about potential jury confusion is
premature at this stage. See Bryant v. Provost & Umphrey Law Firm, L.L.P.,
CIV.A. 5:09CV61, 2009 WL 5216977, at *2 (N.D.W. Va. Dec. 30, 2009) (denying
motion to sever where the parties had not yet completed discovery); In fact, “the
overwhelming majority of courts have denied as premature motions to sever prior to
discovery.” First Time Videos, LLC v. Does 1-76, 276 F.R.D. 254, 258 (N.D. Ill.
2011). If Defendants truly believe they will suffer trial prejudice as a result of the
joinder of Plaintiffs’ claims, they can ask the Court to sever the cases for trial,
which Rule 20 already contemplates. Fed. R. Civ. P. 20(b).
V. CONCLUSION
For all of these reasons, Defendants’ Motion should be denied.
Date: March 21, 2019 Respectfully submitted:
RILEY WILLIAMS & PIATT, LLC
/s/ James A. Piatt

James A. Piatt (#28320-49)
Anne Medlin Lowe (#31402-49)
301 Massachusetts Avenue, Suite 300
Indianapolis, Indiana 46204
(317) 633-5270 / (317) 426-3348 Fax
jpiatt@rwp-law.com
alowe@rwp-law.com
Counsel for Plaintiffs
12
Certificate of Service
I hereby certify that on the 21st day of March, 2019, a copy of the foregoing
Plaintiffs’ Response in Opposition to Defendants’ Motion to Sever or Dismiss
Amended Complaint for Misjoinder of Plaintiffs was filed electronically. Service of
this filing will be made on all ECF-registered counsel by operation of the Court’s
electronic filing system. Parties may access this filing through the Court’s system.
/s/ James A. Piatt

James A. Piatt
13

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Case 1:18-cv-02797-WTL-DML Document 25 Filed 02/28/19 Page 1 of 2 PageID #: 169

IN THE UNITED STATES DISTRICT COURT

LARRY AND LESLIE KAY MCLESKEY; )

MORRIS INVEST’S AND CLAYTON MORRIS’S PARTIAL

Defendants Morris Invest and Clayton Morris (collectively “Morris

Invest’s and Clayton’s Morris’s Partial Motion to Dismiss Plaintiffs’ Amended

Complaint, filed contemporaneously herewith.

WHEREFORE, the Morris Defendants respectfully move this Court to dismiss,

premised on expired Purchase Agreements or terms not in the written contracts, as

 Claims premised on an expired Purchase Agreement: Deepak Neelagiri and

vestments, LLC (1117 W. Roache St. property);

 All Plaintiffs’ claims premised on alleged Tenant Services or alleged Prop-

erty-Management Services; and

terms in the contracts: Deepak Neelagiri and Reena Gadagottu, Carlos

BKS IN Properties, LLC, Covenantal Corp., 300 Real Estate Investments,

Michigan Street property).

IN THE UNITED STATES DISTRICT COURT

LARRY AND LESLIE KAY MCLESKEY; )

BRIEF IN SUPPORT OF MORRIS INVEST’S AND CLAYTON MORRIS’S

Defendants Morris Invest and Clayton Morris (collectively “Morris Defend-

missed for the following reasons:

lated in 8 of the Plaintiffs’ contracts, rendering them non-actionable and (ii)

the agreements show the Morris Defendants had no tenant- or property-man-

agement-related contractual obligations and some agreements have no refer-

ence to rehabilitation at all;

Rule 9(b), involve non-actionable statements of future conduct or opinion, and

the money at issue does not qualify as a special chattel;

claims are barred by the economic-loss doctrine; and

Indiana Deceptive Consumer Sales Act.

V, VI, and portions of Count I of Plaintiffs’ Amended Complaint with prejudice.

Clayton Morris is a co-founder of Morris Invest, a company that offers real-

finders, connecting interested buyers to interested sellers and property managers.

2 Defendants’ motion to dismiss for improper joinder of plaintiffs is forthcoming.

3 Defendant Morris Invest is not party or signatory to any Purchase Agreement.

ers, employers, or employees of Oceanpointe Investments Limited, Indy Jax Wealth

Holdings, LLC, or Indy Jax Properties, LLC.

the reasons stated herein.

To survive a motion to dismiss, a “complaint must contain allegations that

To be plausible, the remaining factual allegations must “raise a right to relief

gations “giv[ing] rise to an ‘obvious alternative explanation,’” McCauley, 671 F.3d at

lightly leveled.” Id. at 442.

1. Plaintiffs’ Count I for breach of contract should be dismissed because

Plaintiffs’ breach-of-contract claims allege that each Plaintiff “entered into

Plaintiffs. See Exhibits 1-23.4

The Purchase Agreements directly contradict Plaintiffs’ allegations of (i) the

a. Eight Purchase Agreements expired and terminated by their

. . shall be on or before [a date], or with[in] 10 [days] after title commitment, which-

erties did not close within the time required:

Closing-Date Citation for Required Citation for

b. The Purchase Agreements contradict the alleged bases for

“Defendants breached the Agreements with Plaintiffs by failing to identify, screen,

management obligations with respect to the Rental Properties” (“Property-Manage-

ments shows no terms relating to Tenant Services and Property-Management Ser-

no longer holds when an allegation is contradicted by an exhibit. Bogie v. Rosenberg,

motion to dismiss.”). The Purchase Agreements do not contain terms or obligations

the alleged services:

Breach-of-Contract Claims and Allegations That Fail (contract obligations)

Exhibit Num. Buyer Property Address Contractual Obligations

Deepak Neelagiri and

Deepak Neelagiri and

Deepak Neelagiri and

Deepak Neelagiri and

Deepak Neelagiri and

Deepak Neelagiri and

Alanann Properties, LLC

Carlos Huerta Homes IN,