Meryl Squires-Cannon v. Forest Preserve District of C ( 2018 )


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  •                                In the
    United States Court of Appeals
    For the Seventh Circuit
    ____________________
    No. 16-3131
    MERYL SQUIRES-CANNON, et al.,
    Plaintiffs-Appellants,
    v.
    FOREST PRESERVE DISTRICT OF COOK COUNTY, et al.,
    Defendants-Appellees.
    ____________________
    Appeal from the United States District Court for the
    Northern District of Illinois, Eastern Division.
    No. 14-CV-5611 — Sara L. Ellis, Judge.
    ____________________
    ARGUED SEPTEMBER 28, 2017 — DECIDED JULY 26, 2018
    ____________________
    Before BAUER, MANION, and HAMILTON, Circuit Judges
    HAMILTON, Circuit Judge. The Forest Preserve District of
    Cook County, Illinois, has been trying to acquire a 400-acre
    estate in Barrington after the owners defaulted on a mortgage
    and note held by the Forest Preserve. The Forest Preserve
    foreclosed and then bought the property at the foreclosure
    auction. The original owners have expressed their opposition
    by filing five lawsuits of their own, in addition to raising af-
    firmative defenses and counterclaims in the still-pending
    2                                                   No. 16-3131
    foreclosure action. This appeal arises in the owners’ third fed-
    eral lawsuit, in which they have alleged unconstitutional tak-
    ings, fraud, and derivative claims for conspiracy and aiding
    and abetting. The district court dismissed the suit for failure
    to state a claim. We affirm.
    I. Factual and Procedural Background
    A. Underlying Transactions
    In 2006, plaintiffs Meryl Squires-Cannon and Richard Kirk
    Cannon purchased a 400-acre estate and horse farm in Bar-
    rington. The Cannons bought the property through two
    wholly-owned limited liability companies, Royalty Proper-
    ties, LLC and Cannon Squires Properties, LLC, which are also
    plaintiffs in this lawsuit. The LLCs executed a one-year, $14.5
    million note and mortgage loan agreement with Amcore
    Bank, N.A. The Cannons allege that Amcore committed to
    modify the loan to a longer term before the end of the initial
    one-year term. But the financial crisis intervened, and Amcore
    reneged. Under financial distress itself, Amcore called the
    loan and when, we assume, the Cannons were unable to re-
    finance in the financial environment of the time, Amcore filed
    for foreclosure in an Illinois state court. Amcore then failed in
    2009, and the FDIC became its receiver. BMO Harris Bank,
    N.A. bought Amcore’s loan assets at a discount from the
    FDIC, became the owner of the Cannons’ note, and took over
    as the plaintiff in the foreclosure action.
    When the value of the estate fell in the midst of the finan-
    cial crisis, BMO faced a risk that the note was worth more than
    the property securing it. And the FDIC had agreed to pay
    BMO 80% of any Amcore loan that BMO could not recover
    No. 16-3131                                                                 3
    directly from the borrowers. To cut their losses on the Can-
    nons’ loan, the FDIC and BMO had incentives to find a buyer
    for the note. Enter the Forest Preserve. The Cannons allege
    that the FDIC, BMO, Bayview Loan Servicing, LLC, and Does
    1–15 secretly agreed to assign the note to the Forest Preserve
    for $14 million. After the Forest Preserve’s board approved
    the purchase, BMO assigned the note to the Forest Preserve,
    which became the plaintiff in the foreclosure action.
    In 2013, the foreclosure court granted summary judgment
    for the Forest Preserve. The Forest Preserve then obtained
    board approval to offer a credit bid for the estate at the fore-
    closure sale. The Forest Preserve made the (winning) credit
    bid of about $14.5 million at the foreclosure sale. The foreclo-
    sure court also entered a deficiency judgment against the Can-
    nons for over $6 million. See BMO Harris Bank, N.A. v. Royalty
    Properties, LLC, No. 1–15–1338, 
    2016 WL 6269967
    , at *3 (Ill.
    App. May 17, 2016). The Illinois Appellate Court later re-
    versed the foreclosure judgments. Id. at *14. On remand, the
    foreclosure court reinstated its order making the Forest Pre-
    serve a mortgagee in possession, but the Illinois Appellate
    Court also vacated that order in an interlocutory appeal. For-
    est Preserve District of Cook County v. Royalty Properties, LLC,
    No. 1–17–1564, 
    2017 WL 3758758
     (Ill. App. Aug. 29, 2017). As
    far as we know, there is at this time no judgment in the fore-
    closure action. The Cannons told us at oral argument that the
    foreclosure action is “starting from scratch.” 1
    1 The lack of a final judgment in the foreclosure action could create a
    ripeness issue for a takings claim. Usually, a plaintiff “must try to obtain
    compensation under state law before litigating a takings suit.” Kolton v.
    Frerichs, 
    869 F.3d 532
    , 533 (7th Cir. 2017), citing Williamson County Regional
    4                                                             No. 16-3131
    B. Lawsuits
    There have now been six separate lawsuits relating to the
    Cannons’ default on the note—three state and three federal.
    The three state lawsuits are:
    (1) the foreclosure action, which is still pending;
    (2) the Cannons’ lawsuit against the Forest Preserve and
    BMO (the “taxpayer action”), which was dismissed, Baker
    v. Forest Preserve District, 
    33 N.E.3d 745
     (Ill. App. 2015) (af-
    firming dismissal of all claims and rejecting theory that
    Forest Preserve’s purchase of note and participation in
    foreclosure auction violated Cook County Forest Preserve
    District Act), and;
    (3) a lawsuit by one of the Cannon entities against the For-
    est Preserve for breach of a purported lease after the fore-
    closure sale, which is stayed, Royalty Farms, LLC v. Forest
    Preserve District of Cook County, 
    92 N.E.3d 943
     (Ill. App.
    2017) (reversing order awarding possession of property to
    Forest Preserve and remanding and staying eviction pro-
    ceedings pending resolution of foreclosure action).
    Planning Commission v. Hamilton Bank, 
    473 U.S. 172
    , 186 (1985). That is be-
    cause a “takings claim … accrues only when the government refuses to
    pay.” Id. at 535. But we are free to proceed on the merits despite the ab-
    sence of a judgment in the foreclosure proceeding because “Williamson
    County has nothing to do with subject-matter jurisdiction.” Id. at 533. Also,
    as we discuss below, plaintiffs argue that actions other than the foreclo-
    sure amounted to takings, and we need to address those arguments. And
    on top of that, the Forest Preserve did pay in the foreclosure suit, with its
    credit bid of $14.5 million. In the swirl of legal arguments in all of this
    litigation, it is easy to lose sight of the key fact that the Cannons borrowed
    some $14 million and have not paid it back.
    No. 16-3131                                                     5
    The three federal lawsuits are:
    (1) a lawsuit with allegations similar to this one, which
    was dismissed for lack of jurisdiction, Squires Cannon v.
    Forest Preserve District of Cook County, No. 13 C 6589, 
    2014 WL 1758475
     (N.D. Ill. May 2, 2014);
    (2) a lawsuit by Meryl Squires-Cannon against several For-
    est Preserve officials and employees for false arrest and
    malicious prosecution, which was dismissed on the mer-
    its, Squires-Cannon v. White, 
    864 F.3d 515
     (7th Cir. 2017) (af-
    firming dismissal), and;
    (3) the lawsuit in this appeal, which the district court dis-
    missed, Squires Cannon v. Forest Preserve District of Cook
    County, No. 14 C 5611, 
    2016 WL 2620515
     (N.D. Ill. May 9,
    2016).
    II. Analysis
    Our review of a dismissal under Rule 12(b)(6) for failure
    to state a claim is de novo, and we may affirm on any ground
    in the record. Brooks v. Ross, 
    578 F.3d 574
    , 578 (7th Cir. 2009),
    citing Tamayo v. Blagojevich, 
    526 F.3d 1074
    , 1081 (7th Cir. 2008),
    and citing Bennett v. Spear, 
    520 U.S. 154
    , 166 (1997). We accept
    the complaint’s well-pleaded facts as true and draw all rea-
    sonable inferences from those allegations in the Cannons’ fa-
    vor. Abcarian v. McDonald, 
    617 F.3d 931
    , 933 (7th Cir. 2010),
    citing London v. RBS Citizens, N.A., 
    600 F.3d 742
    , 745 (7th Cir.
    2010). But written exhibits attached to the complaint may
    trump contradictory allegations. 
    Id.,
     citing Northern Indiana
    Gun & Outdoor Shows, Inc. v. City of South Bend, 
    163 F.3d 449
    ,
    455 (7th Cir. 1998).
    6                                                    No. 16-3131
    A. Takings Claims
    The takings clause of the Fifth Amendment provides, “nor
    shall private property be taken for public use, without just
    compensation.” U.S. Const. amend. V. The Fourteenth
    Amendment makes the takings clause applicable to the States
    and their subdivisions. See, e.g., Murr v. Wisconsin, 
    137 S. Ct. 1933
    , 1942 (2017), citing Chicago, Burlington & Quincy R.R. Co.
    v. Chicago, 
    166 U.S. 226
     (1897); cf. Dolan v. City of Tigard, 
    512 U.S. 374
    , 405–06 (1994) (Stevens, J., dissenting) (criticizing ci-
    tation of Chicago, Burlington & Quincy Railroad Co. as resurrect-
    ing substantive due process analysis identified with Lochner v.
    New York, 
    198 U.S. 45
     (1905)). The Cannons allege that the For-
    est Preserve violated the takings clause here in three ways: (1)
    by passing an ordinance converting the estate into a forest
    preserve; (2) by buying the mortgage from BMO and then tak-
    ing over as the plaintiff in the foreclosure action; and (3) by
    physically entering the estate and installing Forest Preserve
    signs at the estate entrances. All three theories fail, and the
    derivative conspiracy and aiding-and-abetting claims fall
    with them.
    1. No Taking by Ordinance
    After the Forest Preserve acquired the note from BMO, it
    passed an ordinance creating a forest preserve district for
    “lands now owned and lands to be acquired.” The “lands” in-
    cluded the Cannon estate, and the ordinance stated that the
    Forest Preserve “shall acquire” those “lands.” The ordinance
    also authorized the Forest Preserve to bid at the foreclosure
    auction and set a ceiling for the bid. Enactment of the ordi-
    nance was not a regulatory taking, and the district court
    properly rejected this theory.
    No. 16-3131                                                                   7
    A regulatory taking is “a restriction on the use of property
    that [goes] ‘too far.’” Horne v. Department of Agriculture, 
    135 S. Ct. 2419
    , 2427 (2015), quoting Pennsylvania Coal Co. v. Mahon,
    
    260 U.S. 393
    , 415 (1922). To determine how far is too far, we
    consider factors that include “the economic impact of the reg-
    ulation, its interference with reasonable investment-backed
    expectations, and the character of the government action.” 
    Id.,
    citing Penn Central Transportation Co. v. New York City, 
    438 U.S. 104
    , 124 (1978).
    The character of this government action defeats the Can-
    nons’ claim. The ordinance prospectively authorized the For-
    est Preserve to acquire the estate. The ordinance did not effect
    the actual acquisition of the estate. And the estate became a
    part of the Forest Preserve only after the Forest Preserve
    bought it at the foreclosure sale, not before. (Recall, though,
    that the foreclosure sale has since been set aside by the state
    courts.)
    The Cannons argue that the ordinance was not prospec-
    tive because it also authorized condemnation. But the “mere
    enactment of legislation which authorizes condemnation of
    property cannot be a taking.” Danforth v. United States, 
    308 U.S. 271
    , 286 (1939) (addressing property owner’s claim under
    the Flood Control Act of 1928). The same principle applies to
    the ordinance designating the estate as a future forest pre-
    serve. 2 One reason for that principle is linked to the economic
    2   Illinois courts have held similarly. E.g., City of Chicago v. Loitz, 
    329 N.E.2d 208
    , 211 (Ill. 1975) (collecting cases and stating “general rule” in
    Illinois that “mere planning or plotting in anticipation of a public im-
    provement does not constitute a ‘taking’”); Stahelin v. Forest Preserve Dis-
    trict of Du Page County, 
    877 N.E.2d 1121
    , 1130–31 (Ill. App. 2007) (no taking
    where land-use regulation gave no power to regulate, limit, or control
    8                                                          No. 16-3131
    impact factor. Even if the ordinance reduced the estate’s value
    before the foreclosure sale, that reduction is not a taking be-
    cause any “impairment of the market value” of the estate
    would be “incident to otherwise legitimate government ac-
    tion.” Kirby Forest Industries, Inc. v. United States, 
    467 U.S. 1
    , 15
    (1984) (initiation of condemnation proceedings was not a tak-
    ing); see also Danforth, 
    308 U.S. at 285
     (“A reduction or in-
    crease in the value of property may occur by reason of legis-
    lation for or the beginning or completion of a project. Such
    changes in value are incidents of ownership. They cannot be
    considered as a ‘taking’ in the constitutional sense.”). In addi-
    tion, of course, there is the practical consideration. If merely
    authorizing condemnation amounted to a taking, govern-
    ment projects requiring condemnation and compensation
    would become unmanageable.
    2. No Taking via Foreclosure or Physical Entry
    The district court properly rejected the Cannons’ theory
    that the Forest Preserve took the property by buying the note,
    foreclosing on it, and then buying the estate at the foreclosure
    sale. By foreclosing on the note, the Forest Preserve exercised
    its contractual right, not a governmental prerogative. See War-
    ren v. Government Nat’l Mortgage Ass’n, 
    611 F.2d 1229
    , 1234
    (8th Cir. 1980) (“As a party to the contract, and even though it
    was a governmentally-owned and authorized entity, GNMA
    had a right to resort to its contractual remedies just as a purely
    private entity had.”), citing Atlantic Mutual Ins. Co. v. Cooney,
    
    303 F.2d 253
    , 259 (9th Cir. 1962), and Rex Trailer Co. v. United
    plaintiffs’ ability to use their land and where ordinance contained no en-
    forcement mechanism; noting that adoption of ordinance to acquire land
    is not a taking because ordinance does not pass an interest in the land).
    No. 16-3131                                                                 9
    States, 
    350 U.S. 148
    , 151 (1956). The Forest Preserve acted “in
    its proprietary rather than its sovereign capacity.” St. Christo-
    pher Associates, L.P. v. United States, 
    511 F.3d 1376
    , 1385 (Fed.
    Cir. 2008) (no taking where HUD entered into regulatory
    agreement with property owner and refused to consider
    owner’s rent increase request), citing Hughes Communications
    Galaxy, Inc. v. United States, 
    271 F.3d 1060
    , 1070 (Fed. Cir.
    2001); see also Southern Comfort Campgrounds v. Federal Home
    Loan Bank Bd., No. 89–4417, 
    1995 WL 63090
    , at *2 (E.D. La. Feb.
    14, 1995) (no taking where FDIC, as receiver for original
    lender, foreclosed and bought property because “a taking
    only results from the government’s exercise of its sovereign
    power to appropriate private property for public use”), citing
    DSI Corp v. United States, 
    655 F.2d 1072
     (Ct. Cl. 1981). By fore-
    closing on the note, the Forest Preserve acted like any other
    creditor with a security interest. See Klump v. United States, 
    50 Fed. Cl. 268
    , 271 (2001) (“when the government simply asserts
    its ultimate right to ownership of an interest in property
    through the same legal channels that any other individual
    would employ to assert such an interest, no taking under the
    Fifth Amendment occurs”). 3
    3  We assume it is possible for a government entity that is a party to a
    relevant contract to commit a taking by infringing a property right that
    exists independent of the contract. See Clear Creek Community Services Dis-
    trict v. United States, 
    132 Fed. Cl. 223
    , 262 (2017) (recognizing possibility
    but granting summary judgment for government on takings claim), quot-
    ing Tamerlane, Ltd. v. United States, 
    80 Fed. Cl. 724
    , 738 (2008). That is not
    this case because “when a contract between a private party and the Gov-
    ernment creates the property right subject to a Fifth Amendment claim,
    the proper remedy for infringement lies in contract, not taking.” 
    Id.,
     quot-
    ing Tamerlane, Ltd., 80 Fed. Cl. at 738.
    10                                                          No. 16-3131
    The Cannons attempt to distinguish these proprietary-
    function cases by arguing that they contracted with a private
    party, not a government entity. Nevertheless, the note they
    signed to obtain more than $14 million gave the lender the
    right to assign the note to anyone else at any time without no-
    tice to or consent from the Cannons. Buying the estate at the
    foreclosure auction was also not a taking. See, e.g., Oglethorpe
    Co. v. United States, 
    558 F.2d 590
    , 596 (Ct. Cl. 1977) (rejecting
    takings claim where plaintiff entered FHA-insured mortgages
    with Prudential, which assigned deeds to HUD, which then
    foreclosed and bought property from itself at foreclosure auc-
    tion).
    The Cannons’ physical takings theory also fails because
    the Forest Preserve was acting as a creditor. If the Forest Pre-
    serve prematurely took possession of the estate, patrolled the
    property, or put up signs at estate entrances without being a
    mortgagee in possession, the Cannons may have state-law
    remedies for those claims, but we do not see any constitu-
    tional violations in these allegations that are tied so closely to
    the state-court foreclosure action. 4
    4 The district court’s order indicates that the Cannons’ second
    amended complaint did not include this allegation. Squires Cannon, 
    2016 WL 2620515
    , at *4 n.7. But the complaint alleges that the Forest Preserve
    installed signs, and it also alleges that the Forest Preserve took physical
    possession and occupied the estate before obtaining title. Nevertheless,
    the district court considered the Cannons’ allegation that the Forest Pre-
    serve installed signs (stating the estate was Forest Preserve property) at
    estate entrances and concluded that the allegation “did not change the
    Court’s analysis of whether the ordinance at issue amounts to a regulatory
    taking.” 
    Id.
     On appeal, the Cannons maintain that the Forest Preserve in-
    stalled signs and repeatedly entered and patrolled the estate with Forest
    Preserve police vehicles. At oral argument, the parties disputed whether
    No. 16-3131                                                                    11
    The Cannons’ claims against all other defendants for con-
    spiracy and aiding and abetting a taking also fail. Without an
    underlying constitutional violation, there is no derivative lia-
    bility. Champion Parts, Inc. v. Oppenheimer & Co., 
    878 F.2d 1003
    ,
    these actions occurred before or after the effective date of the foreclosure
    court’s order making the Forest Preserve the mortgagee in possession. We
    need not remand for the district court to sort out this factual dispute,
    which is relevant only to the Cannons’ potential state-law claims.
    We affirm the dismissal of the takings claims on the merits, but claim
    preclusion (res judicata) based on the final judgment in the taxpayer action
    could provide an additional basis for affirmance. Because the judgment in
    the taxpayer action is an Illinois judgment, we would look to the law of
    Illinois to determine whether claim preclusion bars the claim. Walsh Con-
    struction Co. of Ill. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 
    153 F.3d 830
    , 832
    (7th Cir. 1998), citing Whitaker v. Ameritech Corp., 
    129 F.3d 952
    , 955 (7th Cir.
    1997), and 
    28 U.S.C. § 1738
    . In Illinois, claim preclusion requires (1) a final
    judgment on the merits, (2) identical causes of action, and (3) identical par-
    ties or their privies. River Park, Inc. v. City of Highland Park, 
    703 N.E.2d 883
    ,
    889 (Ill. 1998), citing Downing v. Chicago Transit Authority, 
    642 N.E.2d 456
    ,
    458 (Ill. 1994). To determine whether two suits present identical causes of
    action, Illinois uses a “transactional analysis.” Id. at 893 (“[S]eparate claims
    will be considered the same cause of action for purposes of res judicata if
    they arise from a single group of operative facts, regardless of whether
    they assert different theories of relief.”) (brackets added), citing Rodgers v.
    St. Mary’s Hospital of Decatur, 
    597 N.E.2d 616
    , 621 (Ill. 1992). Because the
    claims in the taxpayer action and the takings claims all arise from the For-
    est Preserve’s purchase of the note, continuation of foreclosure proceed-
    ings, and purchase of the estate at the foreclosure auction, the Cannons
    and their entities could have (and probably should have) litigated their
    constitutional claims in the taxpayer action. Cf. BMO Harris Bank, N.A.,
    
    2016 WL 6269967
    , at *12 (claim preclusive effect of taxpayer action barred
    Cannons’ affirmative defense in foreclosure action that Forest Preserve
    lacked authority to pursue deficiency judgment).
    12                                                   No. 16-3131
    1008 (7th Cir. 1989) (affirming dismissal of Illinois conspiracy
    claim because plaintiff failed to allege underlying tort).
    B. Fraud Claims
    The Cannons also allege claims for fraudulent misrepre-
    sentation and fraudulent concealment: one against the Forest
    Preserve and its lawyer, Francis Keldermans, and another
    against the Forest Preserve and a neighbor, Robert McGinley,
    and McGinley Partners, LLC. For the claim against Kelder-
    mans and the Forest Preserve, the Cannons also add conspir-
    acy and aiding-and-abetting claims against all defendants ex-
    cept the United States. Although the claims differ based on
    the allegedly fraudulent misrepresentations and conceal-
    ments, both fraud claims fail for the same reasons: no dam-
    ages and no duty.
    A common-law fraud claim in Illinois requires five ele-
    ments: “(1) a false statement of material fact; (2) defendant’s
    knowledge that the statement was false; (3) defendant’s intent
    that the statement induce the plaintiff to act; (4) plaintiff’s re-
    liance upon the truth of the statement; and (5) plaintiff’s dam-
    ages resulting from reliance on the statement.” Connick v. Su-
    zuki Motor Co., 
    675 N.E.2d 584
    , 591 (Ill. 1996), citing Board of
    Education of City of Chicago v. A, C & S, Inc., 
    546 N.E.2d 580
    ,
    591 (Ill. 1989).
    Illinois also recognizes the common-law tort of fraudulent
    concealment, which requires a plaintiff to “allege that the de-
    fendant concealed a material fact when he was under a duty
    to disclose that fact to plaintiff.” 
    Id. at 593
    , citing Lidecker v.
    Kendall College, 
    550 N.E.2d 1121
    , 1124 (Ill. App. 1990). The
    duty to disclose arises only in certain situations, including
    No. 16-3131                                                     13
    where the “plaintiff and defendant are in a fiduciary or confi-
    dential relationship” and “where plaintiff places trust and
    confidence in defendant, thereby placing defendant in a posi-
    tion of influence and superiority over plaintiff.” 
    Id.,
     citing
    Kurti v. Fox Valley Radiologists, Ltd., 
    464 N.E.2d 1219
    , 1223 (Ill.
    App. 1984). Rule 9(b)’s heightened pleading standard re-
    quires plaintiffs to allege fraud with “particularity.” Fed. R.
    Civ. P. 9(b); see also Wigod v. Wells Fargo Bank, N.A., 
    673 F.3d 547
    , 569 (7th Cir. 2012), quoting Borsellino v. Goldman Sachs
    Group, Inc., 
    477 F.3d 502
    , 507 (7th Cir. 2007). Rule 9(b)’s par-
    ticular requirement also applies to fraudulent concealment
    claims. Wigod, 
    673 F.3d at 571
    .
    The Cannons allege that attorney Keldermans, on behalf
    of the Forest Preserve, attempted to negotiate with them for
    an agreement for a deed in lieu of foreclosure. Before that ne-
    gotiation began, Keldermans asked the Cannons to sign a
    “Pre-Negotiation and Confidentiality Agreement.” That con-
    fidentiality agreement identified the purchaser as “Horizon
    Farms Loan Acquisition LLC, an Illinois limited liability com-
    pany to be formed.” Keldermans also allegedly told the Can-
    nons that the purchaser was “not just one individual.” The
    Cannons allege that these statements were fraudulent because
    the real purchaser was to be the Forest Preserve, and they
    claim that Keldermans fraudulently concealed that fact. The
    Cannons allege that they relied on these statements by sign-
    ing the confidentiality agreement, divulging confidential in-
    formation to Keldermans, and refraining from learning that
    the Forest Preserve was the purchaser in time to oppose the
    Forest Preserve’s approval of the note purchase. The Cannons
    claim that they were damaged because, once the Forest Pre-
    serve had the option to buy the note, BMO could not negotiate
    14                                                 No. 16-3131
    a resolution with them—even though the Cannons offered the
    same amount for the note that the Forest Preserve had.
    The allegations against McGinley and McGinley Partners
    are similar. McGinley met with the Cannons and told them
    that a “group of neighbors” was interested in buying the es-
    tate if the Cannons would assign title to them. The Cannons
    allege that McGinley concealed from them the fact that he was
    acting on behalf of the Forest Preserve. The Cannons relied,
    they say, by disclosing their willingness to negotiate, and they
    claim they were damaged because they could have opposed
    the Forest Preserve’s efforts and successfully negotiated with
    BMO.
    Even if these statements were fraudulent, the Cannons fail
    to allege any plausible damage. We agree with the district
    court: the Cannons inflicted their own damage by defaulting
    on the note. BMO could assign the note without any apparent
    restrictions. Squires-Cannon, 
    2016 WL 2620515
    , at *7. The dam-
    age theory of both fraud claims is that the Cannons could not
    negotiate a resolution with BMO. But BMO’s inability to ne-
    gotiate did not arise from Keldermans’ or McGinley’s alleged
    fraud. The Forest Preserve signed the agreement to buy the
    note from BMO on February 4, 2013—before the Cannons’
    meeting with Keldermans on February 14, 2013, and before
    their meeting with McGinley on March 11, 2013.
    The fraudulent concealment claims also fail because Kel-
    dermans and McGinley had no duty to disclose to the Can-
    nons the Forest Preserve’s involvement in the deals they were
    trying to negotiate. The Cannons do not allege a fiduciary or
    confidential relationship. And their allegations do not indi-
    cate a special trust relationship because “the standard for
    identifying a special trust relationship is extremely similar to
    No. 16-3131                                                   15
    that of a fiduciary relationship.” Toulon v. Continental Casualty
    Co., 
    877 F.3d 725
    , 738 (7th Cir. 2017), quoting Wigod, 
    673 F.3d at 571
    . “[A]symmetric information alone does not show the
    degree of dominance needed to establish a special trust rela-
    tionship.” Wigod, 
    673 F.3d at 573
    , citing Miller v. William Chev-
    rolet/GEO, Inc., 
    762 N.E.2d 1
    , 13–14 (Ill. App. 2001).
    Without an underlying tort, the derivative claims for con-
    spiracy and aiding and abetting fail. Champion Parts, Inc. v.
    Oppenheimer & Co., 
    878 F.2d 1003
    , 1008 (7th Cir. 1989) (affirm-
    ing dismissal of Illinois conspiracy claim because plaintiff
    failed to allege underlying tort); Hefferman v. Bass, 
    467 F.3d 596
    , 601–02 (7th Cir. 2006) (reversing dismissal of Illinois aid-
    ing and abetting claim but noting that aiding and abetting
    claims require allegation of a “wrongful act” by “the party
    whom the defendant aids”), citing Thornwood, Inc. v. Jenner &
    Block, 
    799 N.E.2d 756
    , 767 (Ill. App. 2003).
    The district court correctly granted the defendants’ motion
    to dismiss, and its judgment is
    AFFIRMED.
    

Document Info

Docket Number: 16-3131

Judges: Hamilton

Filed Date: 7/26/2018

Precedential Status: Precedential

Modified Date: 7/26/2018

Authorities (34)

London v. RBS CITIZENS, NA , 600 F.3d 742 ( 2010 )

Brooks v. Ross , 578 F.3d 574 ( 2009 )

Tamayo v. Blagojevich , 526 F.3d 1074 ( 2008 )

Wigod v. Wells Fargo Bank, N.A. , 673 F.3d 547 ( 2012 )

Abcarian v. McDonald , 617 F.3d 931 ( 2010 )

Walsh Construction Company of Illinois, an Illinois ... , 153 F.3d 830 ( 1998 )

Hughes Communications Galaxy, Inc. v. United States, ... , 271 F.3d 1060 ( 2001 )

St. Christopher Associates, L.P. v. United States , 511 F.3d 1376 ( 2008 )

Lewis Borsellino and I.M. Acquisitions, LLC v. Goldman ... , 477 F.3d 502 ( 2007 )

Fed. Sec. L. Rep. P 94,524 Champion Parts, Inc. v. ... , 878 F.2d 1003 ( 1989 )

Vivian Warren v. Government National Mortgage Association , 611 F.2d 1229 ( 1980 )

River Park, Inc. v. City of Highland Park , 184 Ill. 2d 290 ( 1998 )

City of Chicago v. Loitz , 61 Ill. 2d 92 ( 1975 )

atlantic-mutual-insurance-company-a-corporation-v-robert-j-cooney-doing , 303 F.2d 253 ( 1962 )

Miller v. William Chevrolet/GEO, Inc. , 326 Ill. App. 3d 642 ( 2001 )

Thornwood, Inc. v. Jenner & Block , 344 Ill. App. 3d 15 ( 2003 )

Rodgers v. St. Mary's Hosp. of Decatur , 149 Ill. 2d 302 ( 1992 )

Downing v. Chicago Transit Authority , 162 Ill. 2d 70 ( 1994 )

Board of Education v. A, C and S, Inc. , 131 Ill. 2d 428 ( 1989 )

Connick v. Suzuki Motor Co., Ltd. , 174 Ill. 2d 482 ( 1996 )

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