C3017) (hereinafter the 1996 Complaint).' In this action, plaintiffs alleged that the 1996 defendants
conspired to deprive them of interest in their property, including the Alsip Trust of the present suit.
During the 1996 suit, plaintiffs’ attorney filed a Motion for Appointment of a Receiver in which he
alleged that Alexander established a lock box for his own use and benefit in collecting the rental
income and refused Demes access to such lock box.

On March 31, 1997, an order dismissing with prejudice, the 1996 Complaint was entered.
The 1997 order specifically incorporated a settlement agreement between Alexander and Demes.
The settlement agreement provided, in pertinent part, that Alexander and Demes would dismiss their
respective claims with prejudice and that Alexander would not prosecute any foreclosure, pursuant
to his rights as purchaser or assignee of the mortgages from LaSalle Bank.

Since an Hlinois court issued the prior judgment, this Court must look to Illinois law to
determine whether res judicata bars plaintiffs’ claims. 4901 Corp. v. Town of Cicero, 220 F.3d 522,
529 (7th Cir. 2000); 28 U.S.C. § 1738. In Illinois, res judicata bars relitigation of claims that could
have been or were asserted in an earlier proceeding. River Park, Inc. v. City of Highland Park, 184
Ill. 2d 290, 302 (1998) (River View). A claim is precluded if it shares three elements with an earlier
action: (1) an identity of parties or their privies, (2) an identity of the causes of action, and (3) a final
judgment on the merits. River View, 184 Ill. 2d at 302.

Regarding the identity of parties or their privies, the parties do not have to be identical.
Schnitzer v. O’Connor, 274 Ill. App. 3d 314, 318 (1995) (Schnitzer). The requirement is met where

the litigants’ interests are sufficiently similar; as such, they may differ in name or number. Schnitzer,

' Ona motion to dismiss, the court may take judicial notice of court documents which
are a matter of public record. Doherty v. City of Chicago, 75 F.3d 318, 324 n.4 (7th Cir. 1996).

4


Complaint regarding the same transactions of the present complaint.

In their amended complaint, plaintiffs allege that the statute of limitations for defendants’
conduct should be tolled because plaintiffs did not learn and could not be expected to learn of
defendants’ misrepresentations until August 1999 when plaintiffs consulted with counsel. However,
as the above illustrates, plaintiffs obviously consulted with counsel as early as September 1996,
when their 1996 Complaint was filed through the appearance of counsel. The 1996 Complaint
addresses the same transactions of the present amended ‘complaint. Accordingly, plaintiffs
reasonably knew of the injury and that the injury was wrongfully caused in September 1996, and they
cannot now rely on equitable tolling. See Chakonas v. City of Chicago, 42 F.3d 1132, 1134 (7th
Cir. 1994) (Chakonas) (dismissal of claim is proper if plaintiff admits facts showing he is not
entitled to recovery).

Claims brought pursuant to RICO must be brought within four years from the date of which
the plaintiff knew, or reasonably should have known, of his injury. Rotella v. Wood, 528 U.S. 549,
552 (2000). The TLA has a one-year statute of limitations. 15 U.S.C. § 1640(e). Equitable tolling
applies when the plaintiff, despite all due diligence, is unable to obtain vital information bearing on
the existence of his claim. See Chakonas, 42 F.3d at 1135.

As stated above, plaintiffs were aware of the defendants’ alleged misconduct in September
1996, when their attorney filed the 1996 Complaint that was based on the same transactions, fraud,
and conspiracies of the present amended complaint. Accordingly, plaintiffs may not rely on
equitable tolling, and their RICO and TLA claims are barred by the applicable statute of limitations.

Therefore, assuming plaintiffs’ claims were not barred by the res judicata doctrine, plaintiffs’

federal claims are precluded by the applicable statute of limitations. As such, all of plaintiffs’ federal


transactions were to redirect Demes’ distribution of proceeds of the sale of Alsip Bank and cause
Demes’ loans from Alsip Bank to be $122,899.77. These loans were subsequently purchased by
Alexander from the proceeds of the December 18, 1992 sale of Alsip Bank without knowledge or
consent of Demes. Pursuant to a direct deposit and pledge agreement executed on December 18,
1992, by Demes, Alexander, and LaSalle Bank, the tenants’ rents were to be deposited by LaSalle
Bank with which such funds were to be used to pay the expenses on the mortgaged property,
including the notes and mortgage.

On June 1, 1994, LaSalle Bank demanded payment of all balances due under notes,
mortgage, and guaranty from Demes and Alexander, citing an escrow deficiency of $15,000. On
June 23, 1994, LaSalle Bank commenced a foreclosure action (94 CH 5731) in the amount of
$197,837.46.

On December 20, 1995, the obligations of the Alsip Trust in the amount of $265,000 to
LaSalle Bank, was satisfied, without notice to Demes, through an unsecured credit “facility” by a
paper transaction with delivery of the original collateral to Alexander and Steve Sarovich (Steve).
That same day, a new cash collateral account and escrow account were opened by Alexander and
LaSalle Bank without the consent or knowledge of Demes. Existing funds were transferred to these
accounts. Such funds were used for the personal expenses and investments to the benefit of LaSalle
Bank and Alexander.

The defendants first argue that plaintiffs’ claims are barred by the doctrine of res judicata.

On September 26, 1996, plaintiffs filed suit in the Circuit Court of Cook County against

Alexander, Helen Sarovich, Corie Koscovich, the Estate of Steve Sarovich, and Heritage Bank (96


274 Ill. App. 3d at 318. Privity exists between two parties who adequately represent the same legal
interests. “It is the identity of the interest that controls in determining privity, not the nominal
identity of the parties.” Schnitzer, 274 Ill. App. 3d at 326.

Here, LaSalle Bank was in privity with Alexander, LaSalle Bank is referenced throughout
the 1996 Complaint, alleging that LaSalle Bank was the creditor to co-borrowers, Alexander and
Demes; LaSalle Bank was the mortgagee on Alexander’s and Demes’ joint mortgage on certain
property; and LaSalle Bank was the assignor of Alexander with respect to LaSalle Bank’s mortgage.

Addis was also involved in the 1996 Complaint in that Addis drafted the assignment as
LaSalle Bank’s counsel. In addition, Thompson was an officer of LaSalle Bank and signed the
assignment. Accordingly, Addis and Thompson were in privity with LaSalle Bank, and their
interests were the same as LaSalle Bank.

As to Sarovich and the Dolores Sarovich Trust (Sarovich Trust), plaintiff alleges that it seeks
to hold Sarovich and the Sarovich Trust liable for the actions of Steve and Alexander, both of whom
are named defendants in the 1996 Complaint. Therefore, she and the trust’s interests were identical
to those of Steve and Alexander, and privity exists.

Illinois applies the “transactional test” when determining whether claims are part of the same
transaction. River View, 184 Ill. 2d at 310. Under this test, claims are identical “if they arise from
asingle group of operative facts, regardless of whether they assert different theories of relief.” River
View, 184 Ill. 2d at 311. Claims are considered part of the same cause of action as long as they arise
from the same transaction. River View, 184 Il. 2d at 311.

A review of the 1996 Complaint and the present amended complaint demonstrate that the

claims in both actions arise from the same transactions. Both actions are based on alleged


statutory claims are dismissed on this alternative ground, and the remaining state law claims are no
longer pendent to any federal claim and must be dismissed without further proceedings. See United
Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966); Kennedy v. Schoenberg, Fisher, & Newman, 140
F.3d 716, 727 (7th Cir. 1998).

For the reasons stated above, plaintiffs’ complaint is dismissed with prejudice.

{fy /
Dated: (uaey $60 / A Lasat

J - DARRAH
United States District Judge


Minute Order Form (06/97)

|

United States District Court, Northern District of Ilinois

a

Ly

Niwef ‘Assigned Judge John W. Darrah Sitting Judge if Other
r) lagistrate Judge . than Assigned Judge
¥
cASE NUMBER 01 C 967 DATE 1/8/2002
CASE GEORGE B. DEMES vs. ABN AMRO SERVICES CO., INC.
TITLE

[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.]

MOTION:

DOCKET ENTRY:

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

(2) a Brief in support of motion due

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

(4) Oo Ruling/Hearingon___set for___at

(5) Qa Status hearing[held/continued to] [set for/re-set for]on__—setfor___ att

(6) im 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 to___at

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

OOFRCP4(m) OGeneral Rule 21 CFRCP41(a)(1) C1 FRCP41(a)(2).

(0) =x [Other docket entry] Enter Memorandum Opinion And Order. Plaintiffs’ complaint is dismissed
with prejudice.

ad) @ [For further detail sce order attached to the original minute order.]

No notices required, advised in open court,

No notices required. number of notices

Notices mailed by judge’s staff,

4 nn
Notified counsel by telephone. ; £02
Docketing to mail notices, a

Mail AO 450 form.

Copy to judge/magistrate judge.

courtroom
LG deputy’s
initials

in.
central Clerk's Office oiling dep intals



misconduct by the same individuals through the use of the same documents, including the pledge
agreement, the Alsip Trust , and the assignment.

Plaintiffs’ argument that the two causes of action do not constitute the same cause of action
because the present claim presents federal causes of actions is without merit. As stated above,
claims are identical “if they arise from a single group of operative facts, regardless of whether they
assert different theories of relief.” River View, 184 Ill. 2d at 311.

A judgment is deemed final for purposes of res judicata, if that judgment terminates the
litigation on the merits, SDS Partners, Inc. v. Cramer, 305 Ill. App. 3d 893, 896 (1999) (SDS). A
dismissal with prejudice is as conclusive of the rights of the parties as if the matter had proceeded
to trial and been resolved by a final judgment. SDS, 305 Ill. App. 3d at 896.

In the present case, the 1997 order dismissed the 1996 Complaint with prejudice; such
constitutes a final judgment on the merits.

Based on the above, plaintiffs’ claims are barred by the doctrine of res judicata and are
dismissed with prejudice.

Assuming argumendo, that plaintiffs’ claims were not barred by the doctrine of res judicata,
plaintiffs’ ICFA, RICO, and TLA claims are barred by the applicable statute of limitations period.

Claims brought pursuant to the ICFA must be brought within three years from the date of
which the plaintiff knew, or reasonably should have known, of the injury and that the injury was
wrongfully caused. 815 ILCS 505/10a(e); Highsmith v. Chrysler Credit Corp., 18 F.3d 434, 441 (7
Cir. 1994).

In the present case, LaSalle Bank demanded payment from plaintiffs in June 1994 and

initiated foreclosure proceedings later that same month. Subsequently, plaintiffs filed the 1996


UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

GEORGE B. DEMES and HELEN M. DEMES,

Plaintiffs,
No. 01 C 0967
v.
Judge John W. Darrah
ABN AMRO SERVICES CO., INC., as successor to
LASALLE BANK NATIONAL ASSOCIATION, as
successor to COLUMBIA BANK OF CHICAGO,
DAVID ADDIS, Esquire, JAMES D. THOMPSON,
DOLORES SAROVICH, individually and as
Trustee under Trust Agreement dated

March 8, 1990, FIRST MIDWEST TRUST CO.,
successor to HERITAGE TRUST CO.,

wwe eee ee See ewer ww

Defendants.

MEMORANDUM OPINION AND ORDER

Plaintiffs, George and Helen Demes, filed a seven-count amended complaint, pro se, against
defendants. Plaintiffs’ original complaint was previously dismissed for failure to state a claim,
pursuant to the applicable statute of limitations, and lack of pendent jurisdiction. Count I of
plaintiffs’ Amended Complaint alleges breach of contract by LaSalle Bank National Association
(LaSalle Bank). Count Il alleges deceptive trade practices by LaSalle Bank and Dolores Sarovich
(Sarovich) pursuant to the Illinois Consumer Fraud Act (ICFA) (815 ILCS § 505/1 et seg.). Count
I alleges a violation of the Truth in Lending Act, 15 U.S.C. § 1601, by LaSalle Bank. Count IV
alleges a violation of the Racketeer Influenced and Corrupt Organizations Act (RICO) against
LaSalle Bank, Sarovich, James Thompson (Thompson), and David Addis (Addis). Count V alleges

breach of fiduciary duty against LaSalle Bank, Thompson, Addis, and Sarovich. Count VI alleges


tortious interference with contractual relations against Sarovich. Count VII alleges tortious
interference with prospective advantage against the “LaSalle/Sarovich enterprise”. Jurisdiction is
based on the federal claims. Before the Court are defendants’ Motions to Dismiss.

In ruling on a motion to dismiss, the Court must accept the events as specified in the
complaint as true, and all ambiguities are construed in favor of the plaintiffs. Curtis v. Bembeneck,
48 F.3d 281, 283 (7th Cir 1995). Federal notice pleading requires that a plaintiff “set out in [the]
complaint a short and plain statement of the claim that will provide the defendant with fair notice
of the claim.” Scott v. City of Chicago, 195 F.3d 950, 951 (7th Cir. 1999). When a complaint is
prepared by a pro se litigant, the complaint may be dismissed for failure to state a claim only when
it appears “beyond doubt that the plaintiff can prove no set of facts in support of his claim which
would entitle him to relief.” Haines v. Kerner, 404 U.S. 519, 521 (1972).

The amended complaint is drafted in a vague and confusing style. A careful consideration
of the allegations generally supports the following summary of the purportedly actionable conduct.

On October 31, 1992, George Demes (Demes), Alexander Sarovich (Alexander), and LaSalle
Bank transferred cash balances from one account to the McKee Building Escrow Account.

On December 15, 1992, a “pay-off letter” from LaSalle Bank to Heritage Bank in the amount
of $1,251,138.49 was delivered to all parties. On December 17, 1992, unbeknownst to Demes, the
attorneys for Alexander proposed a reduction of approximately $230,000 for real estate taxes to that
pay-off letter. On December 18, 1992, the revised pay-off letter in the amount of $1,019,289.45 was
delivered to all parties, and a wire transfer by Heritage Bank was forwarded to LaSalle Bank. On
that same date, officers of Alsip Bank, without notice to Demes, made an assignment of some type

of interest of the Alsip Bank and Trust 1-0460 (Alsip Trust) to Alexander. The results of these