                               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 en-
tered summary judgment for SSIMED. We affirm on all but
the claims for breach of contract. The judge applied the four-
year statute of limitations under Indiana’s Uniform Com-
mercial 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 agree-
ments 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 soft-
ware. 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 en-
tered into an agreement with SSIMED to purchase the
Practice Manager software and related services, including
ongoing billing services, IT support and electronic claim-
submission 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. Cer-
tain data-entry errors by the healthcare provider may pre-
vent 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 ex-
perienced 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. Alexan-
der 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 cash-
flow 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 manage-
ment 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 pay-
ment 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 con-
cluded 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 agree-
ments 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 limita-
tions, 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 contract-
based 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 rul-
ings, we pause to address a lingering doubt about subject-
matter jurisdiction. As we’ve explained, the operative com-
plaint 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 citizen-
ship, 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 disre-
garded 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 con-
tract depends on whether the contracts fall within the UCC.
If the contracts are for the sale of goods and the UCC ap-
plies, 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 peri-
od 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 “pre-
existing, 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 con-
tract 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 some-
thing 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 preex-
isting, standardized software. SSIMED’s sales representative
Joy Deckard testified in deposition that the licensing agree-
ments involved “standardized,” “out-of-the-box-type soft-
ware.” 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 popu-
late in the software. Setting up field auto-population and
adding a single survey question to a preexisting, standard-
ized 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 contem-
plating 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 classi-
fied 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 con-
tract for both goods and services, Indiana uses the “predom-
inant 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 inci-
dentally involved or the sale of goods with services inci-
dentally 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 fac-
tor, 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 sup-
port,” 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 con-
clusion 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 pri-
mary 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 over-
looks 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 pur-
chased 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 generat-
ed 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 mere-
ly 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 one-
time 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 rein-
forces 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 con-
tracts 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 damag-
es—hence, the contract claims fail.
    But the breach-of-contract claims do not hinge on a con-
tention that a software defect caused the losses. Pain Center
asserts that SSIMED failed to satisfy its contractual obliga-
tions and caused losses in a number of respects: it (1) inade-
quately 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 ex-
pert’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: some-
where 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 de-
clined to create a common-law equivalent of the UCC’s
implied-warranty cause of action in cases between mer-
chants 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. Be-
cause 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 fiduci-
ary relationship exists.” Del Vecchio v. Conseco, Inc.,
788 N.E.2d 446, 451 (Ind. Ct. App. 2003). No fiduciary rela-
tionship 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 estab-
lishes that Dr. Alexander was well aware soon after imple-
menting 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 misrepresenta-
tions. But one of the essential elements of Indiana common-
law 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 inade-
quate 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.




3Pain Center asks us to reassign the case to a different judge pursuant to
Circuit Rule 36. We see no reason to do so.
