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request for summary judgment on this point, Rivercross has made a different, and better,
argument. From the parties’ Rule 56.1 statements, it is undisputed that ail of the funds
Thornbrook deposited with Rivercross came from other persons or entities; in other words, none
of it was Thombrook’s own money. See Thornbrook LR 56.1 Resp. {{ 15-16. That being the
case, the trust res would not have been available for Thornbrook to reinvest even had it been
returned. Thornbrook may be saying that it hoped for profits from its pie-in-the-sky Letter of
Understanding with Rivercross and could have reinvested those profits, but it has not sued for
breach of that contract.

Finally, defendants are entitled to summary judgment regarding the claim of lost profits
because Thornbrook was unable, due to defendants’ breach, to make a capital payment on a golf
course development in which it was an investor. A Thornbrook representative has stated by
affidavit that if Rivercross had returned the trust res, Thornbrook would have been able to make
the payment. Gordon Steele Affid. 93. But this statement flies in the face of Thornbrook’s
admission that the trust res all belonged to other parties and thus is insufficient to create a
genuine issue of fact.

Conclusion

For the reasons stated above, the motion of defendants Rivercross, Mahany and
Maslowski for summary judgment [docket # 124-1, 140-1] is granted in part and denied in part.
The motion is granted as to plaintiff's claims for damages for loss of reputation, lost clients,
mitigation/overhead expenses, post-revocation interest, and lost profits on investment in a golf
course, but is otherwise denied. Roberts’ motion for summary judgment has been ruled upon and

is therefore terminated [docket # 85-1]. The case is set for a status hearing on August 9, 2004 at



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clients. The only evidence it offers is testimony from certain of its representatives who feel that
Thornbrook has gotten a “black eye” and that it is likely that past investors will not return in the
future. This evidence is entirely speculative and unsupported, and thus it is insufficient to
support a claim for damages in this regard. See, e.g., Thornhill v. Midwest Physician Center of
Orland Park, 337 Ill. App. 3d 1034, 1051, 787 N.E.2d 247, 261 (2003) (damages are speculative
and thus non-recoverable when uncertainty exists as to the fact of their existence).

Defendants are not entitled to summary judgment on the claim of damages resulting from
lawsuits against Thornbrook by joint venture partners who had contributed part of the res and
from an inquiry by Canadian regulators claimed to have resulted from the loss of the trust res.
Thornbrook has offered evidence that it incurred expenses in these matters. It is not clear
whether Thornbrook can, as it argues, recover its anticipated losses in one still-pending lawsuit,
those damages might be non-recoverable, or Thornbrook may be able to file a second lawsuit if
and when the losses accrue, See generally Myers v. Mundelein College, 331 Ill. App. 3d 710,
713-14, 771 N.E.2d 1113, 1115-16 (2002). But because the parties have not addressed these
points adequately, the Court defers resolution of the issue until trial.

Defendants are entitled to summary judgment on the claim for “mitigation expenses.”
From Thornbrook’s response and Rule 56.1 submission, it is clear that there is no evidence that it
incurred any increased consulting expenses due to defendants’ wrongs; rather it simply was
unable to pay certain expenses that it regularly incurred. See Thornbrook Resp. at 13-14;
Thornbrook LR 56.1 Resp. {J 42; Gordon Steele Dep. 72-74.

Defendants are entitled to summary judgment on the claim for “post-revocation interest,”

i.€., lost income from inability to invest the trust property. Although the Court denied Roberts’


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9:30 a.m. to discuss the upcoming trial and the possibility that the trial date may need to be

adjusted slightly. Trial counsel for all parties are ordered to appear.

Date: July 30, 2004



Minute Order Form (0697) lee) am)
United States District Court, Northern Districi of Minois
sino Magierntetuage | ___Matthew F. Kennelly “Than Aired Judge

CASE NUMBER 03 C 1113 DATE 7130/04

CASE Thornbrook International vs. Rivercross Foundation

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:
a oa Filed motion of [ use listing in “Motion” box above.]
Q) Oo Brief in support of motion due
g Oo Answer brief to motion due . Reply to answer brief due__
(4) Oo Ruling/Hearingon___—setfor__—_—_at
(5) im Status hearing[held/continued to] [set for/re-set for]on__set for at
(6) oO Pretrial conference[held/continued to] [set for/re-set for]on___ set for ato.
(7) a Trial[set for/re-set for] on at
(8) a [Bench/Jury trial] [Hearing] held/continued to__—_at
(9) o This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OFRCP4(m) OLocal Rule 41.1 COFRCP41(a)(1) (FRCP41(a)(2).

(0) {Other docket entry} For the reasons set forth on the attached Memorandum Opinion and Order, the

motion of defendants Rivercross, Mahany and Maslowski for summary judgment (124-1, 140-1) is granted in part
and denied in part. The motion is granted as to plaintiffs claims for damages for loss of reputation, lost clients,
mitigation/overhead expenses, post-revocation interest, and lost profits on investment in a golf course, but is
otherwise denied. Roberts’ motion for summary judgment has been ruled upon and is therefore terminated (85-1).
The case is set for status hearing on 8/9/04 at 9:30 a.m.

(i) @ [For further detail see order attached to the original minute order.]
No notices required, advised in open court. Document
No notices required. vember ove Number
Notices mailed by judge's staff.
Notified counsel by telephone. AUG 04 2904

eo | Docketing to mail notices. 4
Mail AO 450 form. _ id 4
Copy to judge/magistrate judge. yunod 19 11810 sa

date mailed notice

courtroom
deputy's
initials

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6135 Kd e- ane hd
Date/time received ny I

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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

DOCKETED

THORNBROOK INTERNATIONAL, INC., AUG 04 2004

Plaintiff,
vs. Case No. 03 C 1113
RIVERCROSS FOUNDATION; DAVID P.

MAHANY; WALTER MASLOWSKI,; and
MARJORIE RAWLS ROBERTS, P.C.,

www wry were we ww

Defendants.

MEMORANDUM OPINION AND ORDER

MATTHEW F. KENNELLY, District Judge:

In this ruling, the Court addresses the motion of Rivercross Foundation, David Mahany,
and Walter Maslowski for summary judgment. Having recently issued a Memorandum Opinion
that discussed the facts of the case in some detail, see Thornbrook Int'l, Inc. v. Rivercross
Foundation, No. 03 C 1113, 2004 WL 1497762 (N.D. Ill. July 6, 2004), we will forego further
discussion of the facts except as necessary to rule on the particular points raised in the pending
motion.

Liability of Mahany and Maslowski

Defendants Mahany and Maslowski moved for entry of summary judgment on the claims
they are “personally liable for [Rivercross’] debts.” See Rivercross, et al. Mot. for Summ. Judg.
| 3(O; Rivercross Summ. Judg. Mem. 14. This appears to address only certain of the claims
against Mahany and Maslowski; the corporate obligations on which they are claimed to have

individual liability are the claims for breach of Thornbrook’s contract with Rivercross and for

14


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breach of Rivercross’ fiduciary duty — namely Counts 1 and 3 of the complaint. Mahany and
Maslowski have been sued individually for conversion, fraud, and civil conspiracy — Counts 2, 4,
and 5 — and, fairly read, their opening summary judgment memorandum (which included only a
single paragraph addressing the claims against them) did not attack these individual-liability
claims.

On Count 1, Mahany and Maslowski can be held liable only a theory of piercing
Rivercross’ corporate veil; on Count 3, they can we held liable either by way of veil-piercing or,
as suggested in the Court’s July 6 memorandum opinion, on a theory of collusion in Rivercross’
fiduciary breach. See Thornbrook Int'l, Ine. y. Rivercross Foundation, 2004 WL 1497762, at *8,
9. There is sufficient evidence of the defendants’ failure to observe corporate formalities, use of
the corporate entity as a facade, and use of the corporation to commit a fraud or injustice to
require a trial on the veil-piercing claims. In addition, with regard to Maslowski, there is
evidence sufficient to permit Thornbrook to pursue him at trial individually on the fiduciary duty
claim. See id. at 9. Inexplicably, Thornbrook has failed to address the possibility of a similar
claim against Mahany, and its failure to do so means that it has conceded the point and will be
unable to pursue such a claim at trial. Mahany’s individual liability on Counts 1 and 3 will
depend on Thornbrook’s ability to prove its claim of veil piercing.

Damages

Defendants also seek summary judgment on various aspects of Thornbrook’s claim for
consequential damages.

Defendants are entitled to summary judgment on the claim for damages for loss of

reputation and lost clients. Thornbrook has produced no evidence of actual loss of reputation or