In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 17-1276

PAIN CENTER OF SE INDIANA LLC,

THE PAIN MEDICINE AND 

REHABILITATION CENTER P.C., and

ANTHONY ALEXANDER, M.D.,

Plaintiffs-Appellants,

v.

ORIGIN HEALTHCARE SOLUTIONS LLC,

SSIMED LLC, ORIGIN HOLDINGS, INC.,

JOHN DOES (1–50) inclusive, and 

JOHN DOES (1–100) inclusive,

Defendants-Appellees.

____________________

Appeal from the United States District Court

for the Southern District of Indiana, Indianapolis Division.

No. 1:13-cv-00133-RLY-DKL — Richard L. Young, Judge.

____________________

ARGUED SEPTEMBER 6, 2017 — DECIDED JUNE 20, 2018

____________________

Before WOOD, Chief Judge, and ROVNER and SYKES, Circuit 

Judges.
2 No. 17-1276

SYKES, Circuit Judge. In June 2003 Pain Center of SE 

Indiana contracted with a company called SSIMED LLC for 

medical-billing software and related services. In June 2006 

the parties entered into a second contract, this time for 

records-management software and related services. Almost 

seven years later—in January 2013—Pain Center sued

SSIMED raising multiple claims for relief, including breach 

of contract, breach of warranty, breach of the implied duty of 

good faith, and four tort claims, all arising out of alleged 

shortcomings in SSIMED’s software and services.

The district judge found the entire suit untimely and entered summary judgment for SSIMED. We affirm on all but 

the claims for breach of contract. The judge applied the fouryear statute of limitations under Indiana’s Uniform Commercial Code (“UCC”), holding that the two agreements are

mixed contracts for goods and services, but the goods (i.e., 

the software) predominate. We disagree. Under Indiana’s 

“predominant thrust” test for mixed contracts, the agreements in question fall on the “services” side of the line, so 

the UCC does not apply. The breach-of-contract claims are 

subject to Indiana’s ten-year statute of limitations for written 

contracts and are timely. The suit may go forward only on 

those claims. 

I. Background

The plaintiffs are Pain Center of SE Indiana LLC, a clinic 

serving patients who suffer from chronic pain; its founder

and sole member, Dr. Anthony Alexander; and its corporate 

successor, The Pain Medicine and Rehabilitation Center P.C. 

We refer to the plaintiffs collectively as “Pain Center.” The 

defendants are SSIMED LLC; Origin Healthcare Solutions 

LLC, the corporation that acquired SSIMED LLC in 2005;
No. 17-1276 3

and Origin Holdings, Inc., its indirect parent corporation. 

We refer to them collectively as “SSIMED.” The suit also 

names 150 John Does as defendants, but as we explain later, 

these nominal placeholders can be disregarded.

SSIMED provides billing services to healthcare providers 

through proprietary billing and records-management software. Its software line includes Practice Manager, a billing 

program that functions as a platform for submitting claims

to SSIMED for transmission to insurers, and EMRge, a 

records-management software that works in conjunction 

with Practice Manager. On June 18, 2003, Pain Center entered into an agreement with SSIMED to purchase the

Practice Manager software and related services, including 

ongoing billing services, IT support and electronic claimsubmission services, and five days of initial training in how 

to use the software.

Filing claims using SSIMED’s billing system involves

several steps. First, at the end of each day, the healthcare 

provider enters into the Practice Manager program the 

relevant claim information for all reimbursable healthcare 

services performed that day. The software then transmits the 

daily closing files to SSIMED in a zip file, and SSIMED 

generates claim files from the daily closing information and 

sends claims to insurers for payment.

Claim processing can fail at any step of this process. Certain data-entry errors by the healthcare provider may prevent successful transmission of daily closing files to 

SSIMED. Other errors would not impede transmission to the 

insurer but can result in nonpayment of the claim. The 

healthcare provider can track the status of its claims using a 

software tool called the Client Center. Claims with errors at 
4 No. 17-1276

any step of the process remain in the Client Center until 

corrected and resubmitted.

Dr. Alexander testified in deposition that Pain Center experienced problems with Practice Manager “[a]lmost from 

the beginning.” More specifically, Dr. Alexander noticed

“[p]roblems with accuracy in the amounts that were sent,” 

“[p]roblems with dates missing,” and “entire transmissions 

that had been resent [and then were] missing.” Dr. Alexander confronted SSIMED about these problems in 2003, and 

SSIMED told him that the insurers were to blame for any 

unpaid claims. Dr. Alexander testified that Pain Center 

followed up with health insurers “on numerous occasions,” 

but the insurers reported that they never received the claims. 

Soon after implementing Practice Manager, Dr. Alexander 

noticed that Pain Center was “losing money like crazy.” But 

he insists that he did not realize until much later that 

SSIMED’s software and services were to blame for his cashflow problems.

Despite these concerns, Pain Center entered into a second 

contract with SSIMED on June 28, 2006—this time for a 

software program called EMRge that worked in conjunction 

with Practice Manager to facilitate patient records management and billing reimbursement. Like the first contract, this 

one included the software, five days of initial training in its 

use, ongoing billing services, and IT support. Dr. Alexander 

thought that implementing EMRge would resolve the payment losses his clinic was suffering. But just as with Practice 

Manager, he experienced problems with EMRge “[a]lmost 

from the beginning.”

In October 2011 Pain Center hired Demetria Hilton 

Pierce, a billing specialist, and she immediately noticed that 
No. 17-1276 5

some of Pain Center’s claims were going unpaid. Pierce

asked SSIMED about the unpaid claims. SSIMED directed 

her to log in to the Client Center. When she did so, she 

discovered that the Client Center had not been opened in 

about 18 months. Thousands of unpaid claims had piled up

in the meantime. For many of these claims, the deadline for 

submission to the insurer had passed. Pain Center made an 

effort to recover payment, but the insurers refused to pay the 

stale claims. Dr. Alexander maintains this was the first time 

he learned of the Client Center and how it functioned.

On January 24, 2013, Pain Center filed suit against 

SSIMED alleging that its Practice Manager and EMRge 

software and related billing services caused these losses. As 

relevant here, the complaint raised several contract-based

claims (breach of contract, breach of warranty, and breach of 

the implied duty of good faith and fair dealing) and four tort 

claims (tortious interference with business relations, fraud, 

fraud in the inducement, and fraudulent misrepresentation). 

On cross-motions for summary judgment, the judge concluded that the statute of limitations for each claim had long 

since expired. The judge ruled that all of Pain Center’s

claims accrued soon after the execution of the two agreements in 2003 and 2006, respectively, because Dr. Alexander 

admitted that he was aware of problems with SSIMED’s

billing system “[a]lmost from the beginning.” Under Indiana 

law, fraud claims are subject to a six-year statute of limitations, so this accrual ruling meant that all three fraud-based 

claims were time-barred. The tortious-interference claim was 

likewise untimely under the applicable two-year limitations 

period. The judge also concluded that all of the contractbased claims are governed by the UCC because the agree-
6 No. 17-1276

ments in question were predominantly for the sale of 

goods—that is, the software. Indiana UCC claims are subject 

to a four-year statute of limitations, so the judge held that 

these claims too were untimely. Finally, the judge rejected 

Pain Center’s argument that equitable tolling saved its 

claims.

II. Discussion

Before turning to the merits of the judge’s timeliness rulings, we pause to address a lingering doubt about subjectmatter jurisdiction. As we’ve explained, the operative complaint names as defendants John Does 1–100 (identified only 

as shareholders, promoters, or subscribers of Origin 

Holdings, Inc.) and John Does 1–50 (identified only as 

individuals, corporations, or associations that are somehow 

responsible for Pain Center’s damages). The parties do not 

mention the John Does in their jurisdictional statements, but 

we have an independent duty to verify subject-matter

jurisdiction. Dexia Crédit Local v. Rogan, 602 F.3d 879, 883 (7th 

Cir. 2010).

The jurisdictional basis for this suit is diversity of citizenship, see 28 U.S.C. § 1332, which requires complete diversity 

between the parties.1 All of the plaintiffs are citizens of 

Indiana, and the complaint alleges “upon information and 

belief” that the John Does are not citizens of Indiana. But 

without knowing who or what the John Does might be, their 

citizenship remains a mystery. Because the prerequisites for 

 1 The original complaint included a federal Lanham Act claim, but that 

claim dropped out early on; nothing in the record suggests that the judge 

opted to retain supplemental jurisdiction over the remaining state-law 

claims.
No. 17-1276 7

diversity jurisdiction must be proved and not presumed, 

John Doe defendants are ordinarily forbidden in federal 

diversity suits. Howell ex rel. Goerdt v. Tribune Entm’t Co., 

106 F.3d 215, 218 (7th Cir. 1997).

An exception applies when the John Does are nominal 

parties—nothing more than placeholders “in the event that 

during discovery [the plaintiff] identifie[s] any additional 

defendants he wishe[s] to add to the suit.” Moore v. Gen.

Motors Pension Plans, 91 F.3d 848, 850 (7th Cir. 1996). We’ve 

held that “the citizenship of such defendants can be disregarded for diversity jurisdiction.” Dalton v. Teva N. Am., 

No. 17-1990, 2018 WL 2470634, at *1 (7th Cir. June 4, 2018) 

(citing Moore, 91 F.3d at 850); see also Howell, 106 F.3d at 218.

The 150 John Does are mere placeholders, so we can safely 

ignore them for purposes of diversity jurisdiction. Complete 

diversity otherwise exists, so our jurisdiction is secure.

With that preliminary matter resolved, we proceed to the 

merits. We review the summary-judgment order de novo, 

construing the evidence and drawing inferences in Pain 

Center’s favor. Indianapolis Airport Auth. v. Travelers Prop.

Cas. Co. of Am., 849 F.3d 355, 361 (7th Cir. 2017).

A. Contract-Based Claims

1. Breach of Contract

The timeliness of Pain Center’s claims for breach of contract depends on whether the contracts fall within the UCC. 

If the contracts are for the sale of goods and the UCC applies, then the claims are subject to a four-year limitations

period, see IND. CODE § 26-1-2-725(1), which expired long 

before Pain Center filed suit. If the UCC does not apply, then 

the claims are subject to Indiana’s ten-year statute of limita-
8 No. 17-1276

tions for written contracts and are timely.2 See id. § 34-11-2-

11.

The judge held that the UCC’s four-year limitations period applies, reasoning that the agreements in question are

mixed contracts for goods and services in which goods 

predominate. The judge correctly identified the test used in 

Indiana for resolving a question like this but erred in its 

application. 

Where a contract involves the purchase of a “preexisting, standardized software,” Indiana courts treat it as a 

contract for the sale of goods governed by the UCC. Olcott 

Intern. & Co. v. Micro Data Base Sys., Inc., 793 N.E.2d 1063, 

1071 (Ind. Ct. App. 2003). On the other hand, where a contract calls for the design of software to meet the buyer’s 

specific needs, Indiana treats it as a services contract. Data 

Processing Servs., Inc. v. L.H. Smith Oil Corp., 492 N.E.2d 314, 

318–19 (Ind. Ct. App. 1986), rev’d on other grounds, Insul–Mark 

Midwest, Inc. v. Modern Materials, Inc., 612 N.E.2d 550, 554 

(Ind. 1993). For example, in Conwell v. Gray Loon Outdoor 

Marketing Group, Inc., 906 N.E.2d 805, 812 (Ind. 2009), the 

court held that the UCC does not apply where one party 

 

2 In an alternative ruling, the judge held that if the UCC does not apply, 

then the contract claims are subject to Indiana’s six-year statute of 

limitations for “action[s] upon promissory notes, bills of exchange, or 

other written contracts for the payment of money.” IND. CODE § 34-11-2-

9. On this alternative view, the claims are also untimely. But as SSIMED 

conceded at oral argument, the judge’s alternative ruling was incorrect. 

Indiana interprets “contracts for the payment of money” narrowly; this 

category includes only contracts that establish an obligation to pay 

money and excludes agreements to pay money in exchange for something else. Folkening v. Van Petten, 22 N.E.3d 818, 822 (Ind. Ct. App. 2014).
No. 17-1276 9

hires the other to design a custom website and provide 

webhost services. 

Here it’s clear that Pain Center licensed SSIMED’s preexisting, standardized software. SSIMED’s sales representative

Joy Deckard testified in deposition that the licensing agreements involved “standardized,” “out-of-the-box-type software.” She also explained that SSIMED does not design 

custom software to meet the needs of individual healthcare 

providers. She acknowledged that a healthcare provider 

could make minor changes to the standardized software, but 

she did not elaborate on the precise extent of this capability. 

In response Pain Center points to evidence that it asked 

for (and obtained) minor modifications within the confines 

of the standardized software. Dr. Alexander testified that he 

asked SSIMED to add a question to a patient survey and 

SSIMED did so. Pain Center’s billing specialist testified that 

at her request SSIMED arranged for the payment amounts 

associated with certain billing codes to automatically populate in the software. Setting up field auto-population and 

adding a single survey question to a preexisting, standardized software program does not convert it into custom 

software designed specifically for a particular purchaser. 

Pain Center also seizes on one of SSIMED’s interrogatory 

answers stating that it “created [p]laintiffs’ database from 

the ground up.” But as SSIMED explains, this meant only 

that it used its standardized software to create a database 

with Pain Center’s information: provider names, referring 

physicians, and procedure codes. That is, SSIMED used its 

preexisting, standardized software to serve Pain Center’s 

objectives; it did not design a new, customized software

program for its client.
10 No. 17-1276

Finally, Pain Center relies on contract language contemplating the possibility of purchasing custom programming

services. But there’s no evidence that Pain Center ever 

purchased these services or that SSIMED ever offered them.

In sum, because the Practice Manager and EMRge programs 

were preexisting and standardized, we agree with the 

district judge that the software should be treated as a good. 

And because the two software programs are properly classified as goods, the contracts between SSIMED and Pain 

Center are appropriately characterized as mixed contracts 

for both goods and services.

To determine whether the UCC applies to a mixed contract for both goods and services, Indiana uses the “predominant thrust test.” Insul–Mark Midwest, 612 N.E.2d at 554. 

Indiana courts ask whether the predominant thrust of the 

transaction is the performance of services with goods incidentally involved or the sale of goods with services incidentally involved. Id. To determine whether services or 

goods predominate, the test considers (1) the language of the 

contract; (2) the circumstances of the parties and the primary 

reason they entered into the contract; and (3) the relative 

costs of the goods and services. Id. at 555. 

Here the language of the contracts is largely a neutral factor, though in some limited respects it points toward a 

conclusion that services predominate. Each agreement is a 

single double-sided sheet of paper: the front is a simple

order form; the back supplies the terms and conditions of the 

agreement. The front also identifies services (e.g., “Monthly 

Services & Support,” “On-site training”) as well as software 

(“SSIMED EMRge” and “SSIMED Practice Manager Suite”).

Pain Center paid for monthly billing services and IT support 
No. 17-1276 11

for the life of the contracts; the services are described on the 

back page as including “telephone support,” “on-line support,” and “electronic claim submission.” The back of the 

Practice Manager contract also lists the various software 

modules incorporated in the Practice Manager software, 

including modules for collections, appointment scheduling, 

and electronic-claim submission, among others. In short, the 

language of the contract provides slight support for a conclusion that the predominant focus of these agreements was 

ongoing billing and IT services and that the software was a 

tool that allowed SSIMED to perform those services.

The next step in the predominant-thrust test asks us to 

examine the parties’ circumstances to determine whether 

their primary reason for entering the contract was the goods 

or the services component. Pain Center argues that its primary reason for executing these agreements was to obtain

SSIMED’s billing services and that the software was merely 

a conduit to transfer claims data to SSIMED to allow it to 

perform those services. SSIMED counters that the parties’ 

focus was software—not services—because Pain Center used 

the software day in and day out; it points out that the initial 

training on the programs lasted a total of only ten days.

Pain Center has the better of this debate. SSIMED overlooks that Pain Center received monthly billing and 

IT services for the life of both contracts. In fact, Deckard

testified that SSIMED licensed its software only when purchased in conjunction with billing and support services. Pain 

Center used the software to input its daily insurance claims 

and transmit the data via zip file to SSIMED’s billing system. 

After receiving a zip file from Pain Center, SSIMED generated claims files and submitted them to insurers. If the insurer 
12 No. 17-1276

refused to pay a claim due to an error, SSIMED placed them 

in the Client Center to be corrected. The software was merely the vehicle through which Pain Center communicated its 

claims information to SSIMED in order to access its billing 

and collection services. This second factor weighs heavily in 

favor of a conclusion that services predominate and that the 

goods were incidental. 

The third and final factor—the relative cost of the goods 

and services—also points toward that conclusion. As the 

Indiana Supreme Court has explained, “[i]f the cost of the 

goods is but a small portion of the overall contract price, 

such fact would increase the likelihood that the services 

portion predominates.” Insul–Mark Midwest, 612 N.E.2d at 

555. Under the Practice Manager agreement, Pain Center 

paid a one-time licensing fee of $8,000 for software; a onetime training fee of $2,000; and $224.95 each month for

services and support for about nine years. Thus, for the life 

of the Practice Manager agreement, the services totaled 

approximately $26,294—more than three times the $8,000 

licensing fee for the software. Under the EMRge agreement, 

Pain Center paid a one-time licensing fee of $23,275 for the 

software; a one-time training fee of $4,000; and $284 per 

month for services and support for about six years. Thus, the 

services totaled about $24,448—slightly more than the 

$23,275 software licensing fee. The relative-cost factor reinforces the conclusion that services predominate.

On balance, then, the predominant thrust of the two 

agreements is medical billing and IT services, not the sale of 

goods. So the UCC and its four-year limitations period do 

not apply. Instead, the breach-of-contract claims are subject 
No. 17-1276 13

to Indiana’s ten-year statute of limitations for written contracts and are timely.

Before moving on, we take a moment to address 

SSIMED’s argument that we should affirm on the alternative 

ground that Pain Center cannot show causation or damages. 

This requires only brief comment.

SSIMED’s argument regarding causation is as follows: 

Pain Center’s claims hinge on its assertion that a software 

defect caused its losses; expert testimony is required to show 

that a software defect caused the losses; and the judge ruled

that Pain Center’s proffered expert, Mark Anderson, can 

testify that the software’s “poor functionality or interface” 

caused Pain Center’s damages, but he is unqualified to 

testify that “software defects” caused Pain Center’s damages—hence, the contract claims fail.

But the breach-of-contract claims do not hinge on a contention that a software defect caused the losses. Pain Center 

asserts that SSIMED failed to satisfy its contractual obligations and caused losses in a number of respects: it (1) inadequately trained Pain Center employees; (2) did not reliably 

submit claims to insurers; and (3) failed to notify Pain Center 

of problems with claims. Pain Center may prevail on its 

breach-of-contract claims without proving a particular defect 

in SSIMED’s software.

Regarding damages, SSIMED argues that Pain Center’s

proffered expert testimony is entirely speculative. Because 

Pain Center has offered other evidence of damages—

including Dr. Alexander’s testimony that thousands of 

claims went unpaid by insurers—we do not need to wade 
14 No. 17-1276

into questions about the admissibility of the damages expert’s testimony.

Pain Center mounts a halfhearted effort to convince us to 

find as a matter of law that SSIMED breached the contracts 

and is liable for $15 million in damages. That’s a serious 

overreach. Many material factual disputes remain on the

questions of breach, causation, and damages. Indeed, Pain 

Center’s own expert could give only a loose range of the 

healthcare practice’s damages from unpaid claims: somewhere between $7.2 million and $15 million. We hold only 

that the breach-of-contract claims are timely. On remand 

Pain Center will have to prove its entitlement to relief. 

2. Breach of Warranty

Pain Center also raised claims for breach of the implied 

warranty of fitness for a particular purpose and the implied 

warranty of merchantability. These are UCC claims, see IND.

CODE §§ 26-1-2-315, -314, and we’ve just explained why the 

UCC does not apply. The Indiana Supreme Court has declined to create a common-law equivalent of the UCC’s 

implied-warranty cause of action in cases between merchants dealing at arm’s length. See Insul–Mark Midwest, 

612 N.E.2d at 556. Judgment for SSIMED on these claims 

was therefore appropriate, though on a different ground.

3. Breach of Implied Covenant of Good Faith

Pain Center’s final contract-based claim is one for breach 

of the covenant of good-faith performance, which the UCC 

implies in every contract. See IND. CODE § 26-1-1-203. Because the UCC does not apply, this claim drops out too. We 

note for completeness that this section of the UCC “does not 

support an independent cause of action for failure to per-
No. 17-1276 15

form or enforce in good faith.” Id. cmt. (West 2018). And in

Indiana a common-law duty of good faith and fair dealing 

arises “only in limited circumstances, such as when a fiduciary relationship exists.” Del Vecchio v. Conseco, Inc., 

788 N.E.2d 446, 451 (Ind. Ct. App. 2003). No fiduciary relationship exists here. Finally, and in any event, such a claim is 

subject to a two-year limitations period, id. (citing IND. CODE

§ 34-11-2-4(2)), which has long since expired. The claim fails 

for a host of reasons.

B. Tort Claims

Pain Center’s remaining claims sound in tort. The three 

fraud claims are subject to a six-year limitations period, see 

IND. CODE § 34-11-2-7(4), and here we agree with the district 

judge that they are clearly time-barred. Dr. Alexander 

testified unequivocally that (1) SSIMED’s software and 

services did not function as promised “from the beginning”; 

(2) he promptly confronted SSIMED about these failures and 

was told that the insurers were to blame; and (3) he followed 

up with the insurers “on numerous occasions” and was told 

that they never received the claims. This testimony establishes that Dr. Alexander was well aware soon after implementing SSIMED’s billing system in June 2003 and June 2006 

that the SSIMED software and services were the source of 

his billing problems—not the insurance companies—and 

thus that potential claims for misrepresentation existed. 

Pain Center contends that the fraud claims accrued anew 

each time SSIMED repeated the same alleged misrepresentations. But one of the essential elements of Indiana commonlaw fraud is that the misrepresentation “was rightfully relied 

upon by the complaining party.” Kesling v. Hubler Nissan, 

Inc., 997 N.E.2d 327, 335 (Ind. 2013). Once Pain Center was 
16 No. 17-1276

on notice that it had been bamboozled, it could not continue 

to rely on those same alleged misrepresentations when 

SSIMED repeated them. 

Pain Center also seeks recovery for tortious interference 

with business relations. The theory underlying this claim is 

hazy, but the argument seems to be that SSIMED’s inadequate software and services led to so many unpaid claims 

that Pain Center was unable to take advantage of business 

opportunities. This claim is subject to a two-year limitations 

period. IND. CODE § 34-11-2-4(a); Miller v. Danz, 36 N.E.3d 

455, 457 (Ind. 2015). Here again, because Dr. Alexander 

knew in 2003 and 2006 that SSIMED’s software and services 

were not performing as represented—and indeed, that his 

clinic was suffering obvious cash-flow problems during this 

period—this claim is plainly time-barred.

Pain Center makes a last-ditch plea for equitable tolling 

based on the doctrines of fraudulent concealment and 

“continuing wrong.” Indiana recognizes that a defendant’s

fraudulent concealment of a cause of action tolls the statute 

of limitations. IND. CODE § 34-11-5-1. Moreover, under 

Indiana’s continuing-wrong doctrine, when a wrong occurs 

outside the limitations period and closely related wrongs 

occur within the limitations period, the plaintiff can recover 

for all wrongs. Marion County v. Indiana, 888 N.E.2d 292, 299 

(Ind. Ct. App. 2008). But neither doctrine tolls the statute of 

limitations if the plaintiff obtains information that should 

lead to the discovery of the cause of action. Snyder v. Town of 

Yorktown, 20 N.E.3d 545, 551 (Ind. Ct. App. 2014); C&E Corp. 

v. Rambo Indus., Inc., 717 N.E.2d 642, 645 (Ind. Ct. App. 1999).

Pain Center had actual knowledge of potential causes of 

action in 2003 and 2006, which is outside the statutory
No. 17-1276 17

limitations period for all of the tort claims. Equitable tolling 

cannot save them.

Accordingly, we REVERSE the judgment only with respect 

to the claims for breach of contract and REMAND for further 

proceedings.3 In all other respects, the judgment is

AFFIRMED. 

 3 Pain Center asks us to reassign the case to a different judge pursuant to 

Circuit Rule 36. We see no reason to do so.