### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 17

‐ 1019

B ANCO P ANAMERICANO

, I NC

., Plaintiff

‐ Appellant

,

v.

C ITY OF P EORIA

, I LLINOIS

, et al.,

Defendants

‐ Appellees.

____________________

Appeal from the United States District Court

for the Central District of Illinois.

No. 13

‐ cv

‐ 1064

— James E. Shadid

, Chief Judge

.

____________________

A RGUED J UNE 1, 2017

— D ECIDED J ANUARY 11, 2018

____________________

Before B AUER

, P OSNER

, * and H AMILTON

, Circuit Judges

.

H AMILTON

, Circuit Judge

. The central issue in this appeal is

whether plaintiff Banco Panamericano has a better claim than

* Circuit Judge Posner retired on September 2, 2017, and did not partici

‐

pate in the decision of this case, which is being resolved by a quorum of

the panel under 28 U.S.C. § 46(d).2 No. 17

‐ 1019

the City of Peoria to the gas collection system and certain elec

‐

trical infrastructure at the Peoria landfill. We agree with the

district court that Peoria has the better claim under the terms

of the lease that governed the installation and operation of the

gas collection system and electrical connections.

By way of introduction, in 1995 Peoria signed a lease with

Resource Technology Corporation (RTC) that allowed the

company to construct and operate a gas conversion project at

the city’s landfill. The system collected the gasses generated

as byproducts by the landfill and helped convert those gasses

into electricity. The agreement provided that when the lease

terminated, the city had an absolute right to retain, at no cost,

the “structures” and “below

‐ grade installations and/or im

‐ provements” that RTC installed at the city’s landfill.

Several years later, RTC entered bankruptcy proceedings.

Banco Panamericano provided the company with postpeti

‐

tion financing secured with liens and security interests in ef

‐ fectively all of RTC’s assets. RTC later defaulted on its loan

from Banco Panamericano. Litigation ensued, and the city no

‐

tified RTC that it was terminating the lease and had elected to

retain the structures and installations as provided in the lease.

After RTC stopped operating the gas conversion project itself,

the city modified the system to stay in compliance with envi

‐

ronmental regulations for methane and other landfill gasses,

and continued to use the property.

Banco Panamericano then filed this suit against the city

(and others, but for simplicity’s sake, we refer only to the city)

for unjust enrichment. The bank alleged that it had a better

claim to the property because its loan was secured by a lien

on all of RTC’s assets and the bankruptcy court had given its

loan “superpriority” status. On cross

‐ motions for summaryNo. 17

‐ 1019 3

judgment, the district court ruled in favor of the city. We af

‐

firm. No matter the priority of the bank’s claim to RTC’s as

‐

sets, the undisputed facts show that the bank has no claim to

the city’s assets. By the terms of the lease between RTC and

the city, the disputed structures and installations are city

property. The lease gave RTC no post

‐ termination property

interest in the disputed property.

I. Factual and Procedural History

A. The Gas Conversion Project

The City of Peoria entered a lease agreement with RTC on

November 30, 1995. The lease permitted RTC as lessee to in

‐

stall and manage a gas

‐ to

‐ energy conversion project at lessor

Peoria’s landfill. The gas collection system is a network of un

‐ derground wells and pipes that collect and transport the land

‐

fill’s gas byproducts to a central point. A plant then converted

the gas into electricity, which RTC sold to the local electric

utility. The transmission of electricity between the gas conver

‐

sion project and the electric utility used three miles of utility

poles, cables, and associated infrastructure built by RTC (the

“interconnect”). The property in dispute here is the gas col

‐

lection system and the interconnect. The plant that converted

gas to electricity is not part of this case.

The lease granted RTC the exclusive right to develop the

gas conversion project. The construction, operation, and

maintenance of the project were to be at RTC’s sole expense.

In exchange, RTC agreed to pay the city a royalty of six per

‐

cent on its energy sales. The lease also allowed the city to re

‐

tain all “structures” and “below

‐ grade installations and/or

improvements” at “no cost” after the lease terminated. The4 No. 17

‐ 1019

initial term was for ten years, with various options to extend.

The lease also provided grounds for early termination.

B. RTC’s Bankruptcy and Banco Panamericano’s Financing

On November 15, 1999, RTC entered involuntary bank

‐

ruptcy proceedings under Chapter 7 of the Bankruptcy Code.

On January 18, 2000, RTC consented to convert its case to a

Chapter 11 petition. After the conversion, RTC continued to

operate its business as a debtor in possession pursuant to 11

U.S.C. §§ 1107 and 1108. At that stage, Banco Americano pro

‐

vided postpetition financing to RTC.

In March 2000, the bankruptcy court issued an order au

‐ thorizing Leon Greenblatt to provide postpetition financing

to RTC on behalf of himself, Banco Panamericano, and

Chiplease, Inc. (It appears that Leon Greenblatt is or was

Banco Panamericano’s sole officer, director, and employee.

See Wachovia Securities, LLC v. Banco Panamericano, Inc.

, 674

F.3d 743, 749 (7th Cir. 2012).) The order secured Banco

Panamericano’s financing by liens and security interests in es

‐ sentially all of RTC’s assets. The order granted the bank a “su

‐ perpriority” claim pursuant to 11 U.S.C. § 364(c)(1), which

conferred a “priority in right of payment over any and all

other unsecured obligations, liabilities and indebtedness of

the Debtor” and over all administrative expenses and certain

priority claims.

On August 13, 2004, Banco Panamericano declared that

RTC had defaulted on the postpetition loan. The bankruptcy

court lifted the automatic stay on October 15, 2004, allowing

Banco Panamericano to pursue available collateral. RTC con

‐

tinued to operate the gas collection project during this time,

and in 2006 the bankruptcy court permitted an extension ofNo. 17

‐ 1019 5

its lease with Peoria. In 2008 RTC’s bankruptcy trustee sought

permission from the bankruptcy court to assume and assign

RTC’s executory contracts pursuant to 11 U.S.C. § 365(a)

and (f)(2)(B), including the gas conversion project at the Peo

‐

ria landfill. After a two

‐ day trial, the bankruptcy court denied

the trustee’s motion to assume and assign, and we affirmed

on appeal. See In re Resource Technology Corp.

, 624 F.3d 376 (7th

Cir. 2010). 1

The amount of methane gas collected at the landfill dwin

‐

dled in 2008, and by February 2009 the gas conversion opera

‐

tion had ceased entirely. On February 22, 2008, Peoria sent

RTC a formal termination letter citing RTC’s failure to cure

certain breaches of the 1995 lease. The letter also said that Pe

‐

oria elected to retain all of the “structures” and “below

‐ grade

installations and/or improvements” as outlined in paragraph

5(b) of the lease. The city asked RTC to remove any other

equipment that it wished to retain as soon as possible. Be

‐

cause RTC was no longer collecting and converting the land

‐

fill’s gas byproduct, the city pursued alternative means to stay

in compliance with various state and federal environmental

regulations. The city bought and installed a blower to with

‐

draw gasses from the landfill and then used a candlestick flare

to burn the gasses.

1 The RTC bankruptcy has generated quite a bit of litigation. See, e.g., Illi

‐

nois Investment Trust No. 92

‐ 7163 v. American Grading Co

., 562 F.3d 824 (7th

Cir. 2009); In re Resource Technology Corp

., 528 F.3d 467 (7th Cir. 2008); In re

Resource Technology Corp.

, 430 F.3d 884 (7th Cir. 2005); In re Resource Tech

‐ nology Corp

., 254 B.R. 215 (Bankr. N.D. Ill. 2000); County of Peoria v. Scattered

Corp

., No. 06 CH 88 (Ill. Cir. Ct. Feb. 10, 2006). In this appeal, the parties

have presented the issues in isolation from other cases, and that is how we

address them.6 No. 17

‐ 1019

C. Procedural History

In February 2013 Banco Panamericano filed this suit

against Peoria for unjust enrichment. The bank claimed that

Peoria unjustly enriched itself by benefiting from the struc

‐

tures and installations that it retained after termination of the

RTC lease. The bank claimed that its superpriority lien on

RTC’s assets gave it a better claim than the city to the gas col

‐

lection system and interconnect. The parties filed cross

‐ mo

‐

tions for summary judgment on a variety of issues. The dis

‐

trict court granted the city’s motion on the ground that the

language of the lease barred the bank’s unjust enrichment

claim no matter when precisely the lease had been termi

‐

nated. The court denied the bank’s motion to reconsider, em

‐ phasizing that the bank “could not have obtained any rights

greater than those held by RTC even with a superpriority in

‐

terest.”

II. Analysis

A. Legal Standards

Banco Panamericano seeks relief for alleged unjust enrich

‐

ment under Illinois law, and we have jurisdiction under 28

U.S.C. §§ 1332(a) and 1291. We review de novo a district court’s

ruling on a motion for summary judgment. Calumet River

Fleeting, Inc. v. International Union of Operating Engineers, Local

150, AFL–CIO

, 824 F.3d 645, 647 (7th Cir. 2016), citing Exelon

Generation Co. v. Local 15, International B’hood of Electrical Work

‐

ers, AFL–CIO

, 540 F.3d 640, 643 (7th Cir. 2008). Summary judg

‐

ment is appropriate if there is no genuine issue as to any ma

‐

terial fact and the moving party is entitled to a judgment as a

matter of law. Fed. R. Civ. P. 56(a). That standard has been sat

‐

isfied here.No. 17

‐ 1019 7

To state a claim for unjust enrichment under Illinois law,

“a plaintiff must allege that the defendant has unjustly re

‐

tained a benefit to the plaintiff’s detriment, and that defend

‐

ant’s retention of the benefit violates the fundamental princi

‐ ples of justice, equity, and good conscience.” HPI Health Care

Servs., Inc. v. Mt. Vernon Hospital, Inc.

, 545 N.E.2d 672, 679 (Ill.

1989) (citations omitted). In situations like this case, where a

plaintiff seeks a benefit that was transferred to a defendant by

a third party, a defendant’s retention of the benefit is unjust

when “(1) the benefit should have been given to the plaintiff,

but the third party mistakenly gave it to the defendant in

‐

stead, (2) the defendant procured the benefit from the third

party through some type of wrongful conduct, or (3) the

plaintiff for some other reason had a better claim to the benefit

than the defendant.” Id. (citations omitted). Banco Panameri

‐

cano pursues only the third route, arguing that it has a “better

claim” to the gas collection system than Peoria has.

B. The City’s Rights Under the Lease

The district court correctly found that undisputed facts

show that Peoria has the “better claim” to the disputed prop

‐

erty. The court analyzed separately two routes the lease pro

‐

vided for Peoria to retain the property—the 30

‐ day notice pro

‐

vision and the 90

‐ day abandonment provision. The court then

decided that the property had transferred to Peoria under the

abandonment provision. We agree with that reasoning, but

we also believe that reading paragraph 5(b) of the lease as a

whole offers an even simpler solution. The lease gave RTC no

post

‐ termination interest in the disputed property at all, only

obligations. See Dix Mutual Insurance Co. v. LaFramboise

, 597

N.E.2d 622, 625 (Ill. 1992) (“The lease between the landlord

and the tenant must be interpreted as a whole so as to give8 No. 17

‐ 1019

effect to the intent of the parties.”), citing Stein v. Yarnall

‐ Todd

Chevrolet, Inc.

, 241 N.E.2d 439 (Ill. 1968). This makes eminent

sense from a practical standpoint, since the property in ques

‐ tion—pipes, pumps, electrical lines, etc.—was being installed

on public property, the city landfill, and removal would pose

obvious practical problems, at least without the city’s consent.

The relevant portion of paragraph 5(b) of the lease reads:

(b) Within Thirty (30) days after termination of

this Lease for any reason, Peoria shall notify

RTC of any equipment, structures, and below

grade installations and/or improvements that

Peoria wishes to retain. Any structures and be

‐

low

‐ grade installations and/or improvements

that Peoria elects to retain shall become Peoria’s

property at no cost to Peoria. Peoria will pur

‐

chase any equipment that it elects to retain, and

RTC elects to sell to Peoria, at a price mutually

agreed upon by Peoria and RTC. Any equip

‐

ment, structures, and below

‐ grade installations

and/or improvements not retained by Peoria

shall be removed by RTC at its sole expense.

RTC shall restore the premises at its sole ex

‐

pense and to Peoria’s satisfaction, and each area

in and around a well shall be restored to its con

‐

dition at the time the well was installed

... . Plans for removal must be approved by Peoria

before removal is begun.

... Title to and owner

‐No. 17

‐ 1019 9

ship of any of RTC’s property which is not re

‐

moved within ninety (90) days after termination

passes to Peoria. 2

This paragraph of the lease addresses three types of prop

‐

erty: (1) the “equipment,” (2) the “structures,” and (3) the “be

‐

low

‐ grade installations and/or improvements.” The disputed

property falls into categories (2) and (3)—the structures and

installations. The gas collection system is a network of under

‐ ground wells that constitute a below

‐ grade installation. The

interconnect, which is three miles of utility poles and cables

connecting the gas collection project to the electric utility, is a

structure.

The lease gave RTC some post

‐ termination rights in the

“equipment,” but not in the structures and installations. After

the lease terminated, RTC retained a property interest in the

equipment at the gas collection project, which is why Peoria

could keep that property only if RTC “elects to sell” it and the

parties could find a “price mutually agreed upon.” The bank

made clear at oral argument that it seeks compensation for

only the structures and installations, not the “equipment,”

and the lease treated structures and installations differently.

The lease gave RTC no post

‐ termination rights in those items,

but only duties, such as the duty to “restore the premises”

around the wells “at its sole expense and to Peoria’s satisfac

‐

tion.”

Most important, as we see things, the lease gave Peoria the

right to retain the structures and installations at no cost no

matter how the lease terminated. As the district court noted,

2 For ease of reading, we have replaced references to “Lessor” with “Peo

‐

ria” and “Lessee” with “RTC.”10 No. 17

‐ 1019

the lease first provided that Peoria could retain the structures

and installations if it notified RTC within 30 days of termina

‐

tion. Even if Peoria neglected to notify RTC within 30 days of

termination, however, that property automatically passed to

Peoria 90 days after termination of the lease. One way or the

other, Peoria had the right to retain the property after termi

‐

nation, which happened years before this suit was filed. (We

need not decide exactly when.) That contract language is

plain and gives the “best indication of the parties’ intent.” Gal

‐ lagher v. Lenart

, 874 N.E.2d 43, 58 (Ill. 2007) (citations omitted).

The lease allowed for no situation in which RTC could have

kept the structures and installations without Peoria’s consent.

In sum, Banco Panamericano does not have a “better

claim” than Peoria to the disputed property because the bank

could not have greater rights to the property than originally

held by RTC. The lease between RTC and Peoria gave RTC no

post

‐ termination property interest in the installations or

structures at the Peoria landfill. The bank’s security interest

could not reach the structures and installations at Peoria’s

landfill, so the district court’s judgment in favor of Peoria is

AFFIRMED.