Complaint is dismissed without prejudice. LaSalle is given leave to file an Amended Complaint,
ifany, within thirty days of this order if it can do so consistent with its obligations under Fed. R. Civ.

Proc. 11. \

Dated: Quausl 25; 200 Deke Lut
J \voun) w. DARRAH

United States District Judge



appointment of a receiver, the rents from the Premises would be paid to the receiver. In order to
deprive the receiver and, concomitantly, LaSalle, of the rents to which it would be entitled upon the
commencement of a foreclosure and appointment of a receiver, in November 2001, without
LaSalle’s knowledge or consent and contrary to the express terms of the Mortgage, Mudd induced
two tenants of the Premises to pay their rents to Container in advance. The rent paid in advanced
totaled $1,280,116.55.

Container has failed to make any payments on the Note and the Mortgage since its receipt
of the above rents. Instead, Container or Mudd used the prepaid rents to purchase speculative stock
investments and for payment of other obligations contrary to the requirement of the Mortgage to hold
the rents “in trust for the benefit of Mortgagee”.

LaSalle commenced an action to foreclose the Mortgage and obtained the appointment of a
receiver. Container has failed and refused to turn over to the receiver any of the rents which it
collected in advance.

Mudd contends that LaSalle’s Complaint should be dismissed because LaSalle failed to
comply with the notice and cure provision of the Guaranty. The Guaranty provides, in pertinent part:
Remedies: If Guarantor fails to perform its obligations under this
Agreement, Lender may, after giving Guarantor written notice ofsuch
default (given in the manner prescribed in the Mortgage) and ten (10)
days to cure same, from time to time, and without first requiring
performance by Borrower or exhausting any and all security for the
Loan, bring any action at law or in equity or both to compel

Guarantor to perform its obligations hereunder...
LaSalle did not plead that it gave Mudd the required notice and time to cure. LaSalle

concedes that it failed to give Mudd notice or the ten days to cure as required in the Guaranty in its

response to the instant motion. Therefore, Mudd’s Motion to Dismiss is granted. LaSalle’s



‘Minute Ordee Form (06/97)

TWN (Raited States District Court, Northern District of Illinois
a

Name of Assigned Jud; Sitting Judge if Other
or Magistrate Judge John W. Darrah than Assigned Judge
CASE NUMBER 03 C 1785 DATE 8/28/2003
CASE LASALLE BANK NATIONAL vs. THOMAS O. MUDD, Ii
TITLE
[In the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

MOTION: of the motion being presented.]

DOCKET ENTRY:

(0) oO Filed motion of [ use listing in “Motion” box above.]

(2) im) Brief in support of motion due

(3) Oo Answer brief to motion due. . Reply to answer brief due.

(4) 0 Ruling/Hearing on set for at

(5) im} Status hearing[held/continued to] [set for/re-set for] on set for at

(6) QO Pretrial conference[held/continued to] [set for/re-set for] on set for at

(7) oO Trial[set for/re-set for] on at

(8) im [Bench/Jury trial] [Hearing] held/continued to at

(9) oO This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OOFRCP4(m) CLocal Rule 41.1 COFRCP41(a)(1) 1 FRCP41(a)(2).

(10) Ml [Otherdocketentry] Status hearing held. Enter Memorandum Opinion And Order. Mudd’s motion
to dismiss is granted. LaSalle’s complaint is dismissed without prejudice. LaSalle is given leave to file
an amended complaint, if any, within thirty days of this order if it can do so consistent with its obligations
under Fed.R.Civ. Proc.11.

(ail) ff [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required.

Notices mailed by judge’s staff.

Notified counsel by telephone.

vo | Docketing to mail notices.

Mail AO 450 form.

Copy to judge/magistrate judge.

courtroom
deputy's
initials

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62:9 Hd 82 9N¥ €0
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number of notices

AUG 29 2003

date dockete

7

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date mailed nptice

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central Clerk's Office

mailing deputy initials



UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

LASALLE BANK NATIONAL ASSOCIATION,
as Trustee for the registered holders of Commercial
Mortgage Asset Trust, Commercial Mortgage
Pass-Through Certificates, Series 1999-CI,

79
No. 03 C 1785 “C3

)
)
)
)
)
Plaintiff, )
v. ) Judge John W. Darrah
)
THOMAS O. MUDD, III, )
)
Defendant. )
MEMORANDUM OPINION AND ORDER
Plaintiff, LaSalle Bank National Association, as Trustee for the registered holders of
Commercial Mortgage Asset Trust, Commercial Mortgage Pass-Through Certificates, Series 1999-
CI (“LaSalle”), filed suit against Defendant, Thomas O. Mudd, IH (“Mudd”), alleging Mudd
defaulted on a fraud guaranty. Presently before the Court is Mudd’s Motion to Dismiss.
Inreviewing a motion to dismiss, the court reviews all facts alleged in the complaint and any
reasonable inferences drawn therefrom in the light most favorable to the plaintiff. See Marshall-
Mosby v. Corporate Receivables, Inc., 205 F.3d 323, 326 (7th Cir. 2000). A plaintiff is not required
to plead the facts or the elements of a claim, with the exceptions found in Federal Rules of Civil
Procedure 9. See Swierkiewicz v. Sorema, 534 U.S. 506, 511 (2002); Walker v. Thompson, 288 F.3d
1005, 1007 (7th Cir. 2002) (Walker), Dismissal is warranted only if “it appears beyond a doubt that
the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”
Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The “suit should not be dismissed if it is possible to

hypothesize facts, consistent with the complaint, that would make outa claim.” Graehling v. Village

of Lombard, Ill., 58 F.3d 295, 297 (7th Cir. 1995).



Areading of the Complaint supports the following summary of the alleged operative conduct
of the parties.

In August 1998, Container Corporation (“Container”) executed and delivered to the Capital
Company of America, LLC (“CCA”) a mortgage note (“the Note”)in the original principal amount
of $3,250,000 for a Joan in that amount. As security for the Note and the loan, Container executed
and delivered to CCA a Mortgage, Assignment of Leases and Rents and Security Agreement
(“Mortgage”) of the premises located at and commonly known as 1524 Walnut Street, Streator,
Illinois (“the Premises”). At the same time, Mudd executed and delivered to CCA a fraud guaranty
(“the Guaranty”) in which Mudd guaranteed and agreed that he would be liable to CCA for fraud by
himself or Container in connection with the loan.

In the Mortgage, Container assigned to CCA as mortgagee all of Container’s rights in and
to the leases of and rents from the Premises and agreed to hold the rents in an amount sufficient to
discharge all current sums due to the mortgagee “in trust for the benefit of Mortgagee”. Mudd
executed the Mortgage on Container’s behalf; accordingly, he had knowledge of its terms and
provisions.

In early December 1998, CCA assigned the Mortgage and the Note to LaSalle, pursuant to
an Assignment of Mortgage, Assignment of Leases and Rents and Security Agreement.

Container defaulted on the Note and the Mortgage by failing to make the monthly payment
due under the Note on Novmeber 1, 2001. As a result of the default, the Note became immediately
due and payable. Since that time, Container has not made any payments on the Note.

Mudd knew that, by reason of Container’s default under the Note and Mortgage, LaSalle was

entitled to foreclose the Mortgage and obtain the appointment of a receiver and that, upon the