Darwinian in its pitilessness, is the cornerstone of our highly
successful economic system. Competition is not a tort.” Id. A
competitor is ineligible for the competition defense only if its
conduct is motivated solely by spite or ill will. Id.

In the present case, Defendant Mayster asserts the defense of
competition. (Defs.’ Mot. Dismiss at 12.) Plaintiff fails to make
any allegations that Defendant Mayster was motivated by spite or
ill will and thus, he fails to counteract the defense. Id. at 732
(dismissing a claim of tortious interference with business
relations based on the defense of competition when plaintiff did
not counteract defense by pleading allegations of ill will or
spite).

Accordingly, Plaintiff has failed to state a claim for
tortious interference against Defendant Mayster in his individual
capacity under either a contractual or business relations theory.

Count IV: Quantum Meruit

In Count IV, Plaintiff requests relief under a quantum meruit
theory. Plaintiff's only factual assertion to support this claim
ig “Plaintiff Lefkowitz did not sign the Agreement.” (Pls.’ Reply
Br. at 8.) In response, Defendants’ argue Count IV should be
dismissed because a contract dictates the terms of the parties
deal.

Illinois law does not authorize recovery on a theory of quasi-

19


signatories or named parties to the Agreement and Plaintiff fails
to sufficiently state a case for piercing the corporate veil;
therefore, Count I against the Individual Drew Defendants must be
dismissed with prejudice. Additionally, Plaintiff Lefkowitz is
dismissed as a party to these proceedings because he is not a
signatory or a named party in his individual capacity to the
Agreement.

Count II: Breach of Third Party Beneficiary Agreement

In Count II, Plaintiffs Essex and Lefkowitz assert they are
third-party beneficiaries of the River Works-UBS Agreement, thereby
entitling Plaintiffs relief as a result of Developer Defendants
alleged contractual breach of the River Works-UBS Agreement.
Developer Defendants, without conceding as such, do not presently
take issue with whether a breach actually occurred; rather, they
argue Plaintiffs are not third party beneficiaries in any event.

It remains undisputed that on the face of the River Works-UBS
Agreement there is no express mention of Plaintiffs. Accordingly,
the Court’s analysis must shift to whether in the absence of
express language, Plaintiffs are nevertheless third party
beneficiaries. For a third party to have a right to sue, the
contract must be for the plaintiff’s direct benefit and the
contract must affirmatively make this clear. E.B. Harper & Co. v.

Nortek, Inc., 104 F.3d 913, 920 n.4 (7% Cir. 1997) (noting a broker

13


sufficiency of the complaint, not to determine the merits of the
case. Triad Assocs., Inc. v. Chicago Hous. Authority, 892 F.2d
583, 586 (7 Cir. 1989). In evaluating the sufficiency of a
complaint, the court accepts all well-pleaded factual allegations
as true and draws all reasonable inferences in favor of the
plaintiff. Gibson v. City of Chicago, 910 F.2d 1510, 1520-1521 (7%
Cir. 1990). This Court must sustain a complaint unless it
determines beyond a doubt the plaintiff can prove no set of facts
in support of the claims that would entitle him to relief. Conley
v. Gibson, 355 U.S. 41, 45-46 (1957). However, a complaint “must
allege sufficient facts to outline a cause of action.” Ellsworth
v. City of Racine, 774 F.2d 182, 184 (7 Cir. 1985). Therefore,
merely asserting conclusions does not make the allegations in a
complaint sufficient to survive a motion to dismiss. Jones Vv.
Lampe, 845 F.2d 755, 758 (7 Cir. 1988).
Analysis

Count I: Breach of Contract

In response to Plaintiffs’ breach of contract claim,
Defendants J. Michael Drew, Daniel R. Drew, J. Michael Drew 1998
Childrens’ Trust, and Daniel R. Drew 1998 Childrens’ Trust
(“Individual Drew Defendants”) bring a motion to dismiss them from
Count I and to dismiss Plaintiff Lefkowitz as a party to this

litigation.


contract when a real contract governs the parties’ dealings.
Murray v. ABT Assoc., 18 F.3d 1376, 1379 (7 Cir. 1994). The
Agreement is the real contract that applies to the present case.
Although the parties may dispute whether a breach of the Agreement
factually occurred, what the terms of the Agreement are, or which
parties are bound to the Agreement, it is nevertheless a real
contract. Liability or non-liability flows from the Agreement at
issue.? On this point alone, Plaintiff’s quantum meruit claim
fails as a matter of law.

Further, Illinois law does not allow quasi-contract recovery
when a plaintiff seeks such recovery just because a specific
subject matter is not covered in the express contract. Borowski v.
DePuy, Inc., 850 F.2d 297, 301 (7% Cir. 1988). In the present
case, Plaintiff cannot recover under a quantum meruit theory
because Plaintiff does so only to redress an area not discussed in
the Agreement: breach of the Agreement by “shopping” the terms of
the loan and the damages resulting from such a _ breach.
Accordingly, the Court dismisses Count IV in its entirety with
prejudice.

Conclusion

For the above stated reasons, the Court GRANTS Defendants’

* As an initial matter this Court determined Plaintiff Lefkowitz and the Individual Drew Defendants are not parties to
the Agreement and therefore no relief flows to Plaintiff Lefkowitz and no liability attaches to the Individual Drew
Defendants.

20


harm was unrelated to the interests of corporation. Id. Here,
Plaintiff pleads no facts to suggest Defendant Mayster acted
without justification, with actual malice, and contrary to the
interests of Defendant Dwinn; therefore, Plaintiff fails to
overcome the qualified privilege. Accordingly, this Court
dismisses Defendant Mayster in his individual capacity from these
proceedings.

In addition, Plaintiff fails to state a claim for tortious
interference under either a contractual or business relations
theory. The Court notes Plaintiff’s complaint alleges both
interference with contract and interference with business
relations. (Pls.’ Compl. at 6.) “Interference with contract and
interference with business relations (sometimes called prospective
economic advantage) are related torts.” Int’l Mktg., Ltd. v.
Archer~Daniels-Midland Co., 192 F.3d 724, 731 (7 Cir. 1999).

To state a claim for tortious interference with contract,
Plaintiff must plead: (1) a valid and enforceable contract existed
between the plaintiff and a third party; (2) the defendant’s
awareness of the contractual relationship; (3) the defendant’s
intentional and unjustified inducement of a breach of the contract;
(4) a breach by the third party, caused by the defendant’s wrongful
conduct; and (5) damages as a result of the breach by the third

party. Id.

17


2001). The court noted “these statements could probably be made
about most single-owner corporations . . . as the closely-held
corporation is run very much like an individual proprietorship.
But the law nonetheless recognizes the separate corporate entity.”
Id. Determining the allegations were conclusionary and
insufficient, the court granted defendant’s motion to dismiss him
from the proceedings. Id. at *3.

In Classic Fire & Marine Ins. Co. v. Illinois Ins. Exchange,
No. 97 € 1256 , 1997 WL 767290 (N.D. Ill. Dec. 3, 1997), counter-
plaintiff Illinois Insurance Exchange (“Exchange”) alleged
Defendant Lobo Claims Management, Inc. (“Lobo”) was liable for
failing to indemnify them and in turn, Lobo moved to dismiss on the
grounds that it was not a party to the agreements forming the basis
of the Exchange’s counterclaim. 1997 WL 767290, at *2-3. Since
Lobo was a not a signatory to the agreements, the court considered
whether an alter ego theory would apply, and thus allow the claim
to survive. Id. at *5. The court granted Lobo’s motion to dismiss
and determined: (1) Exchange’s pleadings were conclusionary; (2)
they failed to allege Lobo was a mere instrumentality of the other
corporations; and (3) they failed to show how the recognition of
Lobo as a separate entity would sanction a fraud or promote
injustice. Id.

In Bright, the court considered whether a former employee’s


Furthermore, no language in the content of the Agreement
suggests the Individual Drew Defendants are liable to Plaintiffs or
that Plaintiff Lefkowitz is entitled to payment individually. If
the Individual Drew Defendants are a party to the agreement, their
acceptance would be a prerequisite to the formation of a valid
contract and should be evidenced by their signatures. Smith v.
Clark Equipment Co., 136 Ill. App. 3d 800, 804 (I11l. App. Ct.
1985). Therefore, Plaintiffs’ allegations must shift to another
basis for liability because under a standard contract analysis,
neither Plaintiff Lefkowitz nor the Individual Drew Defendants are
signatories or named parties to the Agreement. Id. (finding
plaintiff is not a party to the agreement because plaintiff is not
a signatory to the agreement and proceeded to consider the claim
under a third party beneficiary theory) .*

In terms of Plaintiff Lefkowitz, the failure to be a signatory
or a named party in his individual capacity requires the Court
dismiss him as a party. In Continental Illinois National Bank &
Trust Co. of Chicago v. Stanley, Continental brought suit against
Stanley to recover on Stanley’s personal guaranty of loans made to
companies controlled by Stanley. 585 F.Supp. 1385 (N.D. Ill.
1984). In Stanley’s various common-law counterclaims, he argued

the same factual situation that gave rise to a cause of action for

> This Court analyzes Plaintiffs’ third party beneficiary claims separately in Count II.

6


In order for a breach of contract claim to survive a Rule
12(b) (6) motion, the plaintiff must allege that: (1) a contract
existed; (2) plaintiff sufficiently performed its contractual
obligations; (3) defendant breached its contractual obligations;
and (4) as a result of defendant’s breach the plaintiff suffered
damages. McClellan v. Banc Midwest, McLean County, 517 N.E.2d 762,
764 (Ill.App.Ct. 1997); see also Carl v. Galuska, 785 F.Supp. 1283,
1289 (N.D.I1l1. 1992). In the present motion to dismiss, the
Individual Drew Defendants take issue with element one, i.e., they
contend a contract never existed between the Individual Drew
Defendants and Plaintiffs.

It is undisputed the Individual Drew Defendants and Plaintiff
Lefkowitz are not signatories or named parties to the Agreement.
Although Defendant J. Michael Drew’s signature appears on the
Agreement, he signed only in his official capacity as President of
the Drew Group, which manages River Works, and thus not in his
individual capacity.? (Compl. Ex. A.) Likewise, Plaintiff
Lefkowitz signed the Agreement in his official capacity as
President of Essex Real Estate Group, Ltd. and not in his

individual capacity.? (Compl. Ex. A.)

' Immediately above the Defendants’ signature line, the Agreement lists Riverworks, L.L.C. and then below that
indicates “By: the Drew Group, Inc., Its Manager.” Furthermore, below Defendant Michael Drew’s signature is “J.
Michael Drew, President.”

2 Immediately above the Plaintiffs’ signature line, the Agreement indicates “Essex Real Estate Group” and below
Plaintiff Lefkowitz signature is “James E. Lefkowitz, President.”

5


Plaintiff fails to allege Defendant Mayster’s conduct of
introducing Defendant Column to Defendant River Works caused River
Works to breach the Agreement.® Plaintiff merely asserts Broker
Defendants engaged the Developer Defendants to “shop” the loan.
(Compl. 7 21.) However, that paragraph refers to the River Works-
UBS Agreement and not Plaintiff’s Agreement to which Plaintiff
applies the tortious interference with contract claim. Plaintiff
also fails to allege Defendant Mayster’s conduct was unjustified.

When the plaintiff’s economic expectancy has not been reduced
to a contract yet, one can still recover under the theory of
tortious interference with business relations. Int’l Mktg., Ltd.,
192 F.3d at 731. Under this theory, Plaintiff must plead: (1) his
reasonable expectation of entering into a valid business
relationship; (2) the defendant’s knowledge of plaintiff's
expectancy; (3) purposeful interference by the defendant which
prevents the legitimate expectancy from solidifying into a valid
business relationship; and (4) damages to plaintiff as a result of
defendant’s interference. Id.

Competition is a complete defense against tortious
interference with business relations claims. Id. “Competition,

which though painful, fierce, frequently ruthless, sometimes

8 As discussed above, Plaintiff is not a third-party beneficiary to the River Works-UBS Agreement and therefore any
tortious interference claims regarding the River Works-UBS Agreement do not entitle Plaintiff to relief. For purposes
of Count Il, the remaining allegations involve the Agreement only.

18


565, 569 (7 Cir. 1985). Although exceptions exist, the courts
disfavor piercing the corporate veil and stringently apply its
requirements. Bright v. Roadway Servs., Inc., 846 F.Supp. 693, 700
(N.D. Ill. 1994). Here, Plaintiff must pierce the corporate veil
to state a claim against the Individual Drew Defendants. To pierce
the corporate veil, Plaintiff must plead: (1) such a unity of
interest and ownership that the separate personalities of the
corporation and the individual no longer exist; and (2) the
circumstances are such that adherence to the fiction of a separate
corporate existence would sanction a fraud or promote injustice.
Sea-Land Servs. v. Pepper Source, 941 F.2d 519, 520 (7 Cir. 1991).

In determining whether a corporation is so controlled by
another to justify disregarding their separate identities, the
Court considers: (1) the failure to maintain adequate corporate
records or to comply with corporate formalities; (2) the
commingling of funds or assets; (3) undercapitalization; and (4)
one corporation treating the assets of another corporation as its
own. Sea-Land Servs., 941 F.2d at 521.

In Laborers’ Pension Fund v. Paragon Pool Construction Inc.,
the plaintiff attempted to hold the defendant personally liable
and alleged the defendant acted as the chief operating officer of
the company and owned and operated the company for his exclusive

benefit. No. 00 C 2408, 2001 WL 218642, at *2, (N.D. Ill. Jan. 16,


Minute Order Form (06/97)

United States District Court, Northern District of Winois

Name of Assigned Judj ili i Oth
rar Magistrate Judge William J. Hibbler “than Araipned Judge

CASE NUMBER 01 C 5285 DATE 8/02/2002
CASE TITLE The Essex Real Estate Group, etal v. River Works, LLC., et al.

[in the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented.]

di)

MOTION:
Defendant’s Partial Motion to Dismiss (#23-1)
DOCKET ENTRY:
(1) Oo Filed motion of [ use listing in “Motion” box above.]
(2) Q Brief in support of motion due____.
(3) im Answer brief to motion due___. Reply to answer briefdue___.
(4) o Ruling/Hearing on setfor_ at
(5) oO Status hearing [held/continued to] [set for/re-set for] on setfor_____at
(6) 0 Pretrial conference [held/continued to] [set for/re-set for]on__setfor_—at__—
(7) Oo Trial (set for/re-set for]on__ at
(8) im} [Bench/Jury trial] [Hearing] held/continued toa
(9) ia) This case is dismissed [with/without] prejudice and without costs [by/agreement/pursuant to]
OFRCP4(m) (OGeneral Rule 21 CIFRCP41(a)(1) © FRCP41(a)(2).
ao) =o {Other docket entry] For the attached reasons, Defendant’s Partial Motion to Dismiss (#23-1) is

GRANTED. Enter Memorandum Opinion and Order, Status hearing set for 8/29/02
at 9:15 a.m.

[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 : WAUG 07: 2002
Notified counsel by telephone. -

wv | Docketing to mail notices,

Mail AO 450 form.

Copy to judge/magistrate judge.

number of notices

Ke

AYAOD LOULSIA “SN
courtroom Me date mailed notice
deputy’s

initials 2 is

>“ Dateltime ceived in
central Clerk’s Office mailing deputy initials

2s



of the Drew Group and exercise such control over the Drew Group,
River Works and the Trusts as to be and constitute alter egos,
without actual separate corporate identity” (Compl. 9 7) and (2)
“the Individual Drew Defendants were the managers of the property
receiving substantial compensation; and acted as the developer of
the property receiving substantial compensation and in all other
facts acted as if they were running the property for their own
benefit.” (Pls.’ Reply Br. at 3.) Plaintiff’s conclusionary
allegations do not suggest any of the four factors are present to
establish River Works or the Drew Group are mere instrumentalities
of the Individual Drew Defendants. Moreover, Plaintiff's
allegations are significantly less defined than those outlined in
Hornsby and even then the court found those allegations
insufficient as matter of law and subsequently granted the motion
to dismiss. Therefore, Plaintiff fails to meet his pleading
requirement with regard to element one.

Plaintiff similarly fails to establish how upholding River
Works as a separate corporate entity will sanction a fraud or
promote injustice. See Sea-Land Servs., 941 F.2d at 522~24 (after
extensively analyzing relevant Illinois case law, the court found
the inability to collect a debt is not sufficient to pierce the
corporate veil; rather, a “wrong” beyond intentional asset and

liability~shifting is required).

11


parent corporation is liable for discrimination alleged to have
occurred while the former employee was employed by its subsidiary.
Bright, 846 F.Supp. at 695. The former employee argued the
corporate veil should be pierced and the parent corporation held
liable because it “owns and operates” its subsidiary and it
“ratified and affirmed” all acts listed in the complaint. Id. The
Bright court determined the plaintiff's conclusionary allegations
were insufficient as a matter of law and therefore dismissed the
parent corporation from the lawsuit. Id. at 701.

In Hornsby v. Hornsby’s Stores, Inc., the court contemplated
whether the defendant Stores was the alter ego of two other
corporations, thereby justifying the piercing of the corporate veil
and making the other two corporations liable to the plaintiffs for
the Store’s breach of a lease agreement. 734 F.Supp. 302, 306-07
(N.D. Ill. 1990). Specifically, the plaintiffs alleged the Store
and the other two companies shared the same office space, the same
office staff, and the same telephone number. Id. at 306. The
court held these allegations were insufficient to state a cause of
action because Plaintiffs failed to allege any facts suggesting the
Store was a mere instrumentality of the other companies. Id. at
308.

In the case at bar, Plaintiff asserts only two relevant

allegations: (1) “(t]he Individual Drew Defendants. . . are owners

10


the corporation can also give rise to separate causes of action on
his behalf. Id. at 1388. The court found Stanley’s allegations
were the result of injuries suffered by the company and not based
on any independent contractual relationship he had with plaintiff
Continental. Id. Following the well-established rule that an
alleged injury to a corporation accrues a cause of action to the
corporation and not the individual stockholders, the court granted
the plaintiff's motion to dismiss when it determined Stanley had no
standing in his individual capacity. Id.

Similarly, the cause of action for the alleged breach of
contract in the present case accrues only to Plaintiff Essex not to
Plaintiff Lefkowitz in his individual capacity. Plaintiff
Lefkowitz attempts to rely on the same factual allegations giving
rise to Plaintiff Essex’s presumed injury and likewise presents no
evidence of an independent contractual relationship with any of the
Defendants named in the complaint. Therefore, the Court must
dismiss Plaintiff Lefkowitz as a party to this lawsuit. ‘

The Individual Drew Defendants, however, are not so easily
dismissed from the present lawsuit. A corporation is a separate
and distinct legal entity from its shareholders, directors, and
officers, and generally from other corporations with which it may

be affiliated. Van Dorn Co. v. Future Chem. & Oil Corp., 753 F.2d

* Because Plaintiff Lefkowitz is not entitled to relief in his individual capacity, this Court when referencing the Plaintiff
from this point forward in the opinion will only be referring to Plaintiff Essex unless otherwise indicated.

7


motion to dismiss in the following areas: (1) the Individual Drew
Defendants are dismissed from Count I; (2) Count II is dismissed
with prejudice; (3) the tortious interference claims in Count III
are dismissed with respect to Defendant Mayster; (4) Count IV is
dismissed with prejudice; and (5) Plaintiff Lefkowitz is dismissed
as a party to these proceedings.

IT IS SO ORDERED.
DATE: August 2, 2002

tig L. Mabe)

Hon. WilYgam J. Hibbler
United States Be ick Court Judge

21


agreement with acceptable terms for mortgage financing.
Subsequently, River Works maintains Defendant Lance Mayster, a
mortgage broker employed by Defendant Dwinn, Shaffer & Company
(“Defendant Dwinn”), obtained suitable financing for the Project
from a different lender, Defendant Column Financial, Inc.
(“Defendant Column”). Plaintiffs maintain not only that UBS terms
were suitable, but also that Defendants Mayster, Dwinn, and Column
tortiously interfered with Plaintiffs’ contractual and business
relationships.

More specifically, in Count I Plaintiffs bring a breach of contract
claim against Defendants River Works, Drew Group, J. Michael Drew,
Daniel R. Drew, J. Michael Drew 1998 Childrens’ Trust, and Daniel
R. Drew 1998 Childrens’ Trust (“Developer Defendants”) for breach
of the Agreement. In Count II, Plaintiffs assert a third party
beneficiary claim against Developer Defendants for breach of the
River Works-UBS Agreement. In Count III, Plaintiffs allege
Defendants Mayster, Dwinn, and Column tortiously interfered with
Plaintiffs’ contractual and business relations when they
alternatively secured financing for the Project. In Count IV,
Plaintiffs request this Court grant relief based on a quantum
meruit (also known as quasi-contract) theory.

Standard of Review

The function of a Rule 12(b)(6) motion is to test the


could not be considered a third party beneficiary of a Stock
Purchase Agreement between two businesses where the broker was only
mentioned in the contract incidentally and the sale of the business
was not for the broker’s direct benefit). If the intent is not
express on the face of the contract, then “its implication at least
must be so strong as to be practically an express declaration.”
Id. “[B]rokers are generally not third-party beneficiaries of
sales agreements to which they are not a party.” Id.; see also
Banco del Estado v. Navistar Int’l Trans. Corp., 954 F.Supp. 1275
(N.D.I11. 1997). In the present case, Plaintiff is not referenced
in the River Works-UBS Agreement from which it seeks recovery as
third-party beneficiaries and Plaintiffs’ benefit would have been
relatively incidental. Id. (the court found the plaintiff should
alternatively rely on the duties created by his own agreement and
could not avail himself as a third party beneficiary of the other
parties’ agreement).

The River Works-UBS Agreement cannot be interpreted as
explicitly or implicitly suggesting it was undertaken for
Plaintiffs’ benefit; rather, the separate and distinct agreement
benefitted River Works to secure financing and UBS to be their
chosen lender. Although the River Works-UBS Agreement contains a
paragraph representing that Defendants will work solely with UBS as

their lender, the damages for breach of that agreement expressly

14


as such he owed a duty, as an employee, to Dwinn. Plaintiff pleads
no facts to suggest otherwise.’ A component of Defendant Mayster’s
employment as a mortgage broker is introducing Developer Defendants
to Defendant Column and he was therefore acting within the proper
scope of that duty. Likewise, Developer Defendants were proper
parties on the proper occasion because they were commercial real
estate developers searching for a lender for the Project.
Plaintiff presents no facts indicating Defendant Mayster acted in
an improper manner while exercising his duty. Therefore, this
Court determines Defendant Mayster’s conduct is privileged.

A closely analogous qualified privilege exists to protect
corporate officers from liability for decisions made on behalf of
the company. 3COM Corp. v. Elec. Recovery Specialists, Inc., 104
F.Supp.2d 932, 938 (N.D. Ill. 2000). To surmount the qualified
privilege, a plaintiff must show the corporate officer’s action was
done without justification or with actual malice. MGD Inc., 230
I11l.App.3d at 920. To plead malice in the context of tortious
interference with contractual relations, Plaintiff must establish

Defendant Mayster intentionally injured Plaintiff and his desire to

7 Plaintiff's tortious interference allegations consist of the following:

Broker Defendants and Column, directly and by their respective agents, jointly and severally, have
knowingly and tortiously interfered with Plaintiffs’ contractual and advantageous business
relationships, both those directly with Defendant Developers and, indirectly between UBS-Defendant
Developers, whence Plaintiffs are third-party beneficiaries, and Broker Defendants and Column have,
jointly and severally, thus purposefully caused injury to Plaintiffs, under circumstances where they
might reasonably have expected that their conduct would cause economic injury to Plaintiffs,
damaging the Plaintiffs in the amount of One Hundred Fifty Thousand Dollars ($150,000). (Compl.
133.)

16


leased the space to Sara Lee Corporation (“Project”). River Works
is owned by two trusts, Defendants J. Michael Drew 1998 Childrens’
Trust and Daniel R. Drew 1998 Childrens’ Trust. Defendant Drew
Group is an Illinois corporation established by J. Michael Drew and
Daniel R. Drew that manages River Works.

In the summer of 2000, the Project required permanent mortgage
financing. As part of that process, Plaintiff Essex Real Estate
Group, Ltd. through Plaintiff Lefkowitz, a mortgage broker,
searched for a lender for the Project. The parties reduced the
Plaintiffs’ efforts to secure financing for the Project to a
written document (“Agreement”) on October 27, 2000. The Agreement
is a one-page letter with the relevant portion providing for a
$150,000 finder’s fee payable to Plaintiffs.

Plaintiffs maintain they produced a suitable lender, UBS Principal
Financial, L.L.C. (“UBS”) that materially met the requested
mortgage terms. Defendant J. Michael Drew signed a mortgage
application with UBS (“River Works-UBS Agreement”) for financing of
the Project. The relevant portion of the River Works-UBS Agreement
precluded River Works from “shopping” the transaction (i.e. River
Works must deal only with UBS as a lender and no one else) while
completing the process of securing financing through UBS.

Sometime after Plaintiff introduced UBS to River Works, Defendant

River Works contends UBS and River Works were unable to reach an


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

THE ESSEX REAL ESTATE GROUP., LTD.
and JAMES E. LEFKOWITZ
Plaintiffs
NO. 01 C 5285
v.
JUDGE WILLIAM J. HIBBLER

GROUP; J. MICHAEL DREW; DANIEL J.
DREW; J. MICHAEL DREW 1998
CHILDRENS’ TRUSTS; LANCE MAYSTER;
DWINN, SHAFFER & CO. and
COLUMN FINANCIAL, INC.

Defendants

DOCKETED

)
)
)
)
)
)
RIVER WORKS, L.L.C.; THE DREW )
)
)
)
) aug 7 2002
)
)
MEMORANDUM OPINION AND ORDER
The Essex Real Estate Group, Ltd. and James E. Lefkowitz
(“Plaintiffs”) bring forth allegations against River Works, L.L.C.,
The Drew Group, J. Michael Drew, Daniel R. Drew, J. Michael Drew
1998 Childrens’ Trust, Daniel R. Drew 1998 Childrens’ Trust, Lance
Mayster, Dwinn, Shaffer & Company, and Column Financial, Inc.
(“Defendants”) in a four-count complaint stemming from a $150,000
finder’s fee Plaintiffs allege they are entitled to as a result of
securing financing for a development project.
The Court has before it Defendants’ partial motion to dismiss.
For the following reasons, Defendants’ motion is GRANTED.
Background
Defendant River Works, a real estate development company

renovated commercial space in Chicago, Illinois, and eventually


Plaintiff alleges no facts in the complaint to suggest
sustaining River Works as a corporate entity would create a fraud,
injustice or wrong. In the reply brief, Plaintiff alludes to
intentional asset-shifting when he alleges “River Works .. and the
. + . Childrens’ Trusts were formed to . . . shield and hide the
assets of the Individual Drew Defendants for an existing obligation
to the U.S. Department of Treasury for unpaid... taxes.” (Pls.’
Reply Br. at 3.) ° Plaintiff fails to demonstrate how suggestions
of asset-shifting to avoid paying unpaid corporate taxes merits
piercing the corporate veil and assigning individual liability with
regard to the finder’s fee in the Agreement at issue in the present
litigation. Further, Plaintiff does not allege River Works cannot
pay the requested remedy in the event the court determined
Plaintiff was entitled to such relief. Although such an
allegation is not by itself sufficient to justify breaching
corporate protections, an argument of a judgment proof defendant
would at least show Plaintiff sought to establish fraud or
injustice and may have provided some link to the asserted asset-
shifting theory. Rather, Plaintiff’s allegations are insufficient
because they merely involve intentional asset-shifting. See Sea-
Land Serves., 941 F.2d at 522-24,

Accordingly, the Individual Drew Defendants are not

5 Tt is not necessary for this Court to determine whether it is appropriate to make these allegations in the reply brief
because Plaintiff's allegations are nevertheless insufficient as a matter of law.

12


provide for enforcement by UBS only. The right to enforce the
River Works-UBS Agreement belongs to UBS alone; Plaintiffs’ remedy
would lie only under its own Agreement with Defendant River Works.
Accordingly, the Court dismisses Count II in its entirety with
prejudice.

Count III: Tortious Interference

Plaintiff alleges tortious interference claims against
Defendants Mayster, Dwinn, and Column.® In response to Plaintiff's
allegations, Defendant Mayster argues this Court should dismiss
Count III against him in his individual capacity because (1) he was
acting within the scope of his employment with Dwinn, Shaffer &
Company and (2) Plaintiff has failed to state a claim.

“A qualified privilege bars liability for tortious
interference.” MGD, Inc. v. Dalen Trading Co., 230 I1l.App.3d 916,
920 (Ill. App. Ct. 1992). Generally, privilege exists when the
defendant acted in good faith to protect an interest or uphold a
duty. Delloma v. Consolidation Coal Co., 996 F.2d 168, 171 (7%
Cir. 1993). Further, the defendant’s conduct must be limited in
scope to that purpose, on a proper occasion, in a proper manner,
and to the proper parties only. Id.

In the present case, an affidavit confirms Defendant Mayster

is a broker employed by Defendant Dwinn (Def. Mayster’s Aff.) and

6 This Court has granted the motion to dismiss Plaintiff Lefkowitz, as discussed in Count I, and therefore for the same
reasons he is unable to recover under Count III.

15