1497, 1507 (N.D.I). 1991) (citations omitted). Having said that, if the contingency frustrates the
terms of the contract, rather than defining the terms of the contract, the contract will usually fall
within the statute of frauds. Compare id. (promise to be employed for as long as employce wished
fell outside statute of frauds because employee’s desire to remain employed defined duration of
contract) with Koch y. Tlinois Power Co., 175 Ill. App. 3d 248 (3d Dist. 1988) (oral contract for
permanent employment (cll within of statute of frauds because contingencies such as death would
have frustrated the terms of the contract),

The CVS agreement described in Count Il] of the amended counterclaim and third party
complaint was “to continue building CVS stores for so long as CVS would continue to utilize the
services of Jay Wilton.” Since CVS could have rightfully stopped using Jay Wilton’s services within
one year of the formation of the agreement, thereby allowing for full performance within one year,
the contract does not fall within the statute of frauds and thus would be enforceable. Cf, Decor
Grates, Inc. y. Fararo, No. 92 C 6395, 1994 WL $32023, at *3 (N.D.LUL Sept. 29, 1994) (agreement
intended to Jast as long as cither party wanted to be associated with the other could have been fully
performed in one year and thus fel] outside the statute of frauds).

4. Count V: Unjust Enrichment (against Jay Wilton

Jay Wilton argues that Count V (like Count IL) should be dismissed based on Gallagher's
previous denials of a business relationship with any Wilton-related entities. For the reasons
discussed above, the court concludes that any such admissions do not bar a claim against Jay Wilton

personally, His motion to dismiss Count V is therefore denied?

*The fact that Gallagher may have received payment does not compel a contrary result,
given that the identity of the alleged payor has not been disclosed to the court.

13


Gallagher alleges that counter- and third party defendants’ knowledge of Gallagher’s proposal came
from proprictary information that they stole from his computers.

The amended counterclaim and third party complaint also alleges that in June 1998,
Gallagher entered into a Memorandum of Understanding with Wilton Acquisitions Corp. (WAC”),
under which Gallagher agreed to pursue certain types of real estate development projects for WAC
and its affiliated entities, Of all the projects allegedly presented by Gallagher, Jay Wilton elected
to pursue those involving the development of stores for CVS Corporation (“CVS”).

Although the Memorandum of Understanding expired by its own terms in May of 1999 and
was not renewed, Gallagher, Jay Wilton, and the companies that Jay Wilton controls allegedly orally
agreed to continue building CVS stores “for so long as CVS would continue to wulize the services
of Jay Wilton.” Gallagher alleges that Jay Wilton was to pay him 40% of the profits derived from
all CVS tansactions pursuant to their oral agreement (the “CVS agreement”). According to
Gallagher, between 1998 and 2000, Jay Wilton and Gallagher closed on approximately 30 stores,
through which Jay Wiltort received in excess of $6,000,000, Gallagher alleges that Jay Wilton has
not paid him the sums due under the CVS agreement.

On the basis of these allegations relating to the CVS agreement, Gallagher asserts a breach
of oral contract claim against Jay Wilton (Count IJ) and, in the alternative, an unjust cnrichment
claim against Jay Wilton (Count V). Gallagher further alleges that the Wilton Companies, Jay
Wilton, and Scott Mayer breached their fiduciary duties to Gallagher by receiving and retaining sums
paid by CVS and failing to both account for and pay to Gallagher those sums that “they knew and
continue to know belong to Gallagher” (Count VJ). In Count VII, Gallagher sceks an accounting of

those sums paid by CVS to counter- and third party defendants.


would tend to exclude one ftom society; (3) those imputing an inability to perform or want of
integrity in the discharge of dutics of office or employment; (4) those stating false accusations of
fornication or adultery; or (5) those that prejudice a party in her trade or profession. Id.

Even when a statement fits into one of the five categorics of defamation per se, recovery is
precluded if the statement reasonably can be given an innocent construction, Anderson y. Vanden
Dorpel, 172 111.24 399 (ILL, 1996). “The innocent construction rule requires the court to interpret the
alleged defamation in context and give the words their natural and obvious implications and
meanings.” Skolnick v. Correctional Medical Services, Inc., 132 F. Supp. 2d 1116, 1123 (N.D.UL.
2001).

Numerous courts in this district have applied a haec verba pleading requirement in
defamation actions under which a complainant must set forth the alleged defamatory words that were

spoken or published. See, e.2., Cozzi v. Pepsi-Cola General Bottlers, Ing., No. 96 C 7228, 1997 WI.

312048, at *5 (N.D.III. June 6, 1997); Silk v. City of Chicago, No. 95 C 0143, 1996 WI. 312074
(N.D.IlL. June 7, 1996). “The rationale of the [haec verba] requirement is that ‘general knowledge
of the exact language used is necessary to form a responsive pleading.” Cozzi, 1997 WL 312048,
at *5 (quoting Vantassell-Matin y. Nelson, 741 F. Supp. 698, 707 (N.D.LIL. 1990)). Courts applying
this requirement, however, have held that the defamatory language need not be quoted verbatim. Id.
Rather, an allegation is sufficiently specific if it allows the defendant to understand the nature of the

claim and form a responsive pleading. Socorro v. IMI Data Search, Inc., No. 02 C 8120, 2003 WL

1964269, at *3 (N.D.Ill. April 28, 2003) (citing Wynne v. Stevenson, No. 02 C 5263. 2002 WL

31804497, at *2 (N.D.IN. Dec. 13, 2002).


which include the complaint, any exhibits attached thereto, and supporting bricfs. Thompson v.
Illinois Department of Professional Regulation, 300 F.3d 750, 753 (7 Cir, 2002).

Count Il: Tortious Interference with Prospective Business Advantage

Counter- and third party defendants moved to dismiss Count II, arguing that; (1) the Wilton
parties cannot be liable for tortious interference as a result of filing and then litigating the instant
lawsuit; (2) Gallagher has not identified any third party with whom he had a reasonable cxpectation
of entering into a business relationship; and (3) Gallagher failed to allege the existence and nature
of any reasonable business expectancy, or counter- and third party defendants’ knowledge thereof.
Although the court agrees that counter- and third party defendants’ litigation-related activities, such
as the serving of subpoenas, cannot support a cause of action for tortious interference, Gallagher’s
remaining allegations of interference untclated to the instant lawsuit are sufficient to state a claim
under Illinois law.

Under IJlinois law, the elements of tortious interference with prospective economic advantage
are that: (1) the plaintiff had a reasonable expectation of entering into a valid business relationship;
(2) the defendant knew of this expectancy; (3) the defendant intentionally and unjustifiedly interfered
to prevent the expectancy from being fulfilled; and (4) damages to the plaintiff resulted from the

interference. Fredrick v. Simmons Airlines, Inc., 144 F.3d 500, 502 (7" Cir. 1998).

Counter and third party defendants correctly point out, and Gallagher does not dispute, that
“under Illinois law, the only cause of action recognized for the wrongful filing ofa lawsuit is one lor
malicious prosecution or abuse of process.” Havoco of America, T.td. v. Hollobow, 702 F.2d 643,
647 (7* Cir. 1983). Further, Ulinois law recognizes an absolute litigation privilege which protects

“anything said or written in the course of a legal procceding,” so long as the communication at issuc


In Count [V for defamation per sc, Gallagher also alleges that counter- and third party
defendants “knowingly and intentionally made false statements about Tim Gallagher and FEPC” to
third parties, including, but not limited to, CVS Corporation, the Village of Arlington Heights, CB
Richard Ellis, Trapani Companies, Leonardo Companies, Jos. Freed Associates, and Corrigan and
Clark. According to the amended counterclaim and third party complaint:

Among other things, [counter- and third party defendants] advised one or more of the

above-referenced entities that Gallagher and FEPC were engaged in illegal or

wrongful conduct; misappropriated or stole information belonging to Wilton;
misrepresented themselves in proposals to one or more of the above-referenced
entities or were otherwise lacking in business integrity.

Gallagher alleges that these statements were made orally - “telephonically and possibly in
person” - by defendants and through their representatives, and in writing by the filing of the
underlying lawsuit in the instant case.

Last, in Count VII for conversion, Gallagher alleges that counter- and third party defendants
locked him out of the office where he was keeping a refrigerator, office furniture, television,
computer equipment and other property. Gallagher alleges that this property remains under their
control, that they have no title, right or interest in this property, and that they have refused his
repeated requests to have these items returned.

DISCUSSION

The Wilton Companies, Jay Wilton, and Scott Mayer have moved pursuant to l'ed. R. Civ.
P. 12(b)(6) to dismiss Gallagher’s claims against them. In considering a Rule 12(b)(6) motion, the
court is obligated to accept all well-pleaded facts in the counterclaim as true and draw all reasonable

inferences in favor of the non-moving patty. Northern Trust Co. v. Peters, 69 F, 3d 123, 129 (7"

Cir, 1995). The consideration of a Rule 12(b)(6) motion is generally restricted to the pleadings,


improperly interfered with plaintiff's “ability to enter into contracts or business relationships with
third parties interested in purchasing the tights to publication of his experiences” was sufficient lo

state a claim for tortious interference with prospective economic advantage), Shah v. National

Association of Sec

Dealers, No. 98 C 5355, 1999 WL 240342, at *3 (N.D.IIl. April 9, 1999)

(quoting Sanjuan v. American Board. of Psychiatry and Neurology. Inc., 40 F.3d 247, 251 (7" Cir.

1994)) (allegations of tortious interference sufficient to state a claim in the absence of supporting
facts because “matching facts against legal elements comes later”), Counter- and third parly
defendants’ Rule 12(b)(6) motion to dismiss Count Ll is therefore denied.

2 Count TV; Defamation Per Se

Counter- and third party defendants maintain that Count IV must be dismissed because the
allegations contained therein are too vague to support a cause of action for defamation per sc.
Specifically, they argue that Gallagher fails to set forth what the alleged statements were, who made
them, and to whom they were made. Counter- and third party defendants further assert that the
statements are capable of innocent construction and thus are not actionable. In response, Gallagher
argues that his allegations of defamation are sufficiently detailed to state a claim and are not capable
of innocent construction.

Under Illinois law, “[a] statement is defamatory if it tends to cause such harm to the
reputation of another in that it lowers that person in the eyes of the community or deters third persons

from associating with him or her.” Dunlap v. Alcuin Montessori School, 298 Ill. App. 3d 329, 338

(1* Dist. 1998). A plaintiff may recover for defamation per se where the allegedly defamatory
statements fit into one of the following categories of statements: (1) those imputing the commission.

of a criminal offense; (2) those imputing infection with a communicable disease which, if true,



"Minute Order Fuenn (1x7)

United States District Court, Northern District of Mlinois

Ni of Assigned Judge © Sitting Judge if Othe
re MagitraeJudee | Obert W. Gettleman — | “hen cned Juage
CASE NUMBER 03C 1519 DATE December 2, 2003
CASE Wilton Partners v_ Tim Gallagher
TITLE

Lin the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, ard parly plaintiff, and (b) state briefly the nature
of the motion being presented]

MOTION:

DOCKET ENTRY:

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

Q oOo Brief in support of motion due

Q) o Answer bricf to motion due_____. Reply to answer brief due. _.

@ oO Hearing

(3) o Status hearing re-set to 1/21/04, at 9:00 a.m.

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

(7) oO Trial[set for/re-set for]on_ __at

(8) o [Bench/Jury trial] [Hearing] held/continued t 0 at

(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
CFRCP4(m) OC General Rule21 CO FRCP41(a)(1) OO FRCP41(a)(2).

ot) | [Other docket entry] Memorandum opinion and order entered. Accordingly,

counts VI and VII are dismissedas to the Wilton Companies and Scott Mayer, and
Count IV is dismissed with leave to replead. The motions to dismiss counts II,fland
vC are denied. Amended counterclaim and third party complaint are due by
12/29/03. Counter and third party defendants’ responses are due by 1/19/04.

di) {For further detail sce order attached to the original minute order. |

No notices required, advised in open court hoon Document

, “Number
‘No notices required,

yqiber of notices

X- ] Notices maited by judge's staff. DEC 9 52

Notitied counsel by telephone, daty dycker

Docketing to mail notices.

Mail AO 450 form. dnekouing deputy initials
Copy to judgc/magistrate judge. ynod iiwisia’ sf pa
van SHERS)

avg nid novice
courtroom .

ans deputy’s 25:6 Wd 1- J90eU

initials

Date/time received in,

contra CK CHa) A ALS railing deputy ininois



The judicial admissions to which Wilton refers were contained within Gallagher’s motion
to dismiss the Wilton Companies’ first complaint. In his memorandum in support of his motion to
dismiss, Gallagher made the following statements:

() “In any event, it is clear that Plaintiffs, themselves, never had a relationship,
contractual or otherwise, with Gallagher or FEPC, and they have not even altempled
to plead such a relationship.”

(2) “[BJecause Gallaghcr has never worked for or had any other business relationship
with either of the Plaintiffs, why would he be allowed access to [plaintifis’ trade
secrets]?”

(3) “The only relationship Gallagher ever had with any entity possibly associated with
Jay Wilton, was Wilton Acquisitions Corp., which is not a party to this lawsuit,”

Asastarting point, it is worth emphasizing that none of the admissions made in Gallagher’s
motion to dismiss can reasonably be interpreted as disclaiming a relationship, contractual or
otherwise, with Jay Wilton personally. To the contrary, those statements were all directed at the
Wilton Companies (plaintiffs) or Wilton-related cntities. ‘Thus, on their face, those statements do
not appear to preclude a breach of contract claim against Jay Wilton.

Perhaps anticipating this conclusion, Jay Wilton hones in on two particular allegations that
he maintains contradict Gallagher’s assertions that he had no relationship with any Wilton-related
entitics: (1) “Gallagher and Jay Wilton and the companies he controls orally agreed... to continue
building CVS stores for so long as CVS would continue to utilize the services of Jay Wilton,” and
(2) Gallagher’s efforts resulted in“CVS awarding Wilton Development service assignments, which
resulted in Jay Wilton and Gallagher developing and closing on approximately 30 stores.” Jay
Wilton asks the court to “remove these [allegations] from consideration,” since they are inconsistent
with Gallagher’s earlier denial of any sort of business relationship with the Wilton Companies or

other Wilton-rclated entities.


Without greater detail regarding the alleged defamatory statements, the court is unable to
determine the precise context in which the alleged statements were made and whether they are
indecd capable of innocent construction. Accordingly, Gallagher is directed to amend Count 1V to
allege more precisely the content of the allegedly defamatory statements,’ the context in which those
statements were made, as well as the identities of both the speakers and the individuals to whom the
statements were allegedly made.

3. Count JIL: Breach of Oral Contract (against Jay Wilton)

Jay Wilton has moved to dismiss Count Ill, arguing that, (1) Gallagher made judicial
admissions in his motion to dismiss plaintiffs complaint that contradict the allegations in Count Hl
of his amended counterclaim and third party complaint, and (2) the oral contract at issuc in Count
IIL, the CVS agreement, falls within the statute of frauds and thus had to be in writing in order to be
enforceable, For the reasons discussed below, the court finds neither of these arguments has merit.

A judicial admission is “a deliberate, clear, and unequivocal statement, either written or oral,
made in the course of judicial proceedings, pleadings, or stipulations, that is binding upon the party
making it.” Chow v. Aegis Mortgage Corp., 185 F. Supp. 2d 914, 916 (N.D.I. 2002) (internal

quotations and citations omitted). See also Medcom Holding Co. v. Baxter Travenol Labs.. Inc., 106

F.3d 1388, 1404 (7" Cir. 1997). A representation in a brief, although neither in a pleading nor an

affidavit, may be treated as a judicial admission. United States v. One Heckler-Koch Rifle, 629 F.2d

1250, 1253 (7" Cir. 1980). See also Chow, 185 I’. Supp. 2d at 916.

‘Mt is worth emphasizing that plaintiffs’ filing of the instant lawsuit does not support a
cause of action for defamation. See Havoco v. Hollobow, 702 1'.2d 643, 647 (7" Cir, 1982).

10



pertains to the pending litigation. Steffes v. Stepan Co., No. 96 C 8225, 1997 WL 305306, at *4
(N.D.IL. May 30, 1997) (citations omitted). “The purpose of the privilege is to secure to attorneys
as officers of the court the utmost freedom in their efforts to secure justice for their clients.” Libeo
Corp. v. Adams, 100 IIL. App. 3d 314, 317 (1* Dist. 1981). Accordingly, the filing of the instant suit,
and the subpoena served upon the Village in relation to that suit, do not support a cause of action for
tortious interference.

Apparently recognizing this, Gallagher’s amended counterclaim and third party complaint
alleges that, in addition to involving the Village in litigation before this court, counter- and third
party defendants “assert[ed] to third parties that Wilton legally maintains an interest in potential
projects bid on by Gallagher” and “misrepresented Wilton’s interest in Gallagher projects so as to
interfere with Gallagher’ s prospective economic advantage from its business relations.” Specifically,
Gallagher identifies the Arlington Heights project as one particular venture for which Gallagher was
the “preferred developer,” and alleges that he lost the project to another developer after counter- and
third party defendants “asserted an interest in [Gallagher’s] Arlington Heights proposal and involved
the [Village] in litigation before the court....” Gallagher also alleges that counter- and third party
defendants learned of Gallagher's proposal to the Village through misappropriating information on
his computer.

Although Gallagher fails to identify the contours of counter- and third party defendants’
alleged “interest” in his proposal, and docs not describe how they allegedly conveyed their purported
interest in Gallagher’s proposal to the Village, these allegations are minimally sufficient, at the
pleading stage of the case, to state a claim for tortious interference with prospective business

advantage. See Cook y. Winfrey, 141 F.3d 322, 328 (7" Cir. 1998) (allegation that defendant



Specifically, Gallagher alleges that they: (1) filed a bascless lawsuit against Gallagher, (2)
communicated with Gallagher’s potential clicnts and the media to defame Gallagher's business
reputation; (3) asserted to third partics that they maintain an interest in potential projects bid on by
Gallagher; (4) misrepresented their intcrest in Gallagher projects so as to interfere with Gallagher's
prospective economic advantage; and (5) wrongfully misappropriated and converted confidential and
proprietary information belonging to Gallagher. The details of these allegations are more [ully
developed in the remaining six counts of Gallagher’s amended counterclaim and third party
complaint.

In Count II, for example, Gallagher asserts a claim of tortious interference with prospective
business advantage. According to GaJlagher, in 2002, the Village of Arlington Heights (the
Village”) issued a request for qualification/proposal for the redevelopment of property at Golf Road
and Arlington Heights Road. Gallagher alleges that he submitted a proposal and was the “preferred
developer,” and thus possessed a reasonable business expectation of entering into a valid business
relationship with the Village.

Gallagher further alleges that although the Wilton Companies did not make a proposal to the
Village, counter- and third party defendants nonethcless purposely asserted an interest in Gallagher’s
proposal and involved the Village in litigation before this court - for example, by issuing a subpoena
to the Village - for the sole purpose of interfering with Gallagher’s busincss relationship with the
Village. According to the amended counterclaim and third party complaint, the Village ultimately
awarded the Arlington [eights project to the second highest scoring proposal rather than Gallagher

«

because the selection committee was “concerned about Wilton’s claimed interest in the Arlington

Heights Proposal and how the lawsuit liled against Gallagher would or could effect |sic] the project.”


5. Count VI: Breach of Fiduciary Duty

Counter- and third party defendants have also moved to dismiss Count VJ on the basis of the
judicial admissions discussed above. As the court has noted repeatedly, however, Gallagher has
never disclaimed a relationship with Jay Wilton, Accordingly, Count VI stands insofar as it is pled
against Jay Wilton.

Other than referencing the judicial admissions outlined herein, Mayer has not otherwise
challenged the adequacy of Gallagher's allegations in Count Viagainst him. Nonetheless, the court
dismisses Count V1 against Mayer sua sponte because, as Mayer points out with respect to Count
V1 (below), the oral contract which forms the basis of the allegations in Count VI was entered into
by Jay Wilton, not Mayer, and Gallagher has not advanced any theory for piercing the corporale veil

against Mayer. Sce Real Colors, Inc. v. Patel, 39 F. Supp. 2d 978, 992 (N.D.I. 1999) (“It is a well-

established principle that a corporation is separate and distinct as a legal entity from its shareholders,
directors and officers and, generally, from other corporations with which it may be affiliated.”).
Further, Gallagher’s previous denials of a business relationship with any Wilton-related
entities bar the relief sought in Count V1 against the Wilton Companies, as well. As noted above,
at three different points in his motion to dismiss the Wilton Companies’ complaint, Gallagher
specifically and unequivocally disclaimed any relationship with the Wilton Companies. Taken
together, these admissions are sufficient to bar the relief sought in Count V1 as to the Wilton

Companies. Cf. Ventre v. Datronic Rental Corp., No. 92 ©3289, 1996 WI. 66115 (N.D.IN. Feb. 13,

1996) (allegation in complaint that contradicted attorney’s judicial admissions was not “well-
pleaded” and thus the court declined to accept allegation as true for purposes of ruling on 12(b)(6)

motion).

14


CONCLUSION

For the reasons stated herein, Counts VI and VII are dismissed as to the Wilton
Companies and Scott Mayer, and Count IV is dismissed with leave to replead. The motions to
dismiss Counts II, Il, and V are denied in their entirety. Counter-plaintiffs are directed to file an
amended counterclaim and third party complaint conforming to this opinion on or before
December 29, 2003. Counter- and third party defendants shall respond thereto on or before
January 19, 2004. The parties are directed to appear for a status report on January 21, 2004, at
9:00 a.m.

ENTER: December 2, 2003

Robert W. Gettleman
United States District Judge



Gallagher and his company, First Equity Property, Inc. (“FEPC”), alleging interference with
plaintiffs’ real estate business. Gallagher and FEPC in tm filed an eight-count amended
counterclaim and third-party complaint asserting the following claims: civil conspiracy, tortious
interference with prospective economic advantage, defamation per se, breach of fiduciary duty,
accounting and conversion against the Wilton Companies, Jay Wilton and Scott Mayer (Counts L,
U, TV, VI, VII, and VIM); breach of oral contract against Jay Wilton (Count TI), and unjust
enrichment against Jay Wilton (Count V).

On August 4, 2003, the Wilton Companies filed a motion to dismiss Counts Il, IV, VI, and
VII of the amended counterclaim and third party-complaint pursuant to Fed. R. Civ. P, 12(b)(6).
On October 22, 2003, third party defendants Jay Wilton and Scott Mayer filed a separate mation to
dismiss Counts Tl, II], IV, V, VI, and VIl of the amended counterclaim and third party complaint
pursuant to Fed. R. Civ, P. 12(b)(6), which also incorporated the Wilton Companics’ arguments in
support of their motion to dismiss. For the reasons stated below, Counts V1 and VII are dismissed
as to the Wilton Companies and Scott Mayer, and Count [V is dismissed with leave to replead. ‘The
motions to dismiss Counts TI, [1I, and V are denied in their entirety.

FACTS

In Count | of their amended counterclaim and third party complaint, Gallagher and FEPC

(collectively, “Gallagher”)! allege that (he Wilton Companies and two of their officers, Scott Mayer

and Jay Wilton, entered into an agreement to destroy Gallagher's real estate development business.

'The court recognizes the potential confusion arising from defining Gallagher to include
both Tim Gallagher and FEPC, rather than distinguishing between Tim Gallagher (the individual)
and his company. Nonetheless, because the amended counterclaim and third party complaint
treats them collectively, the court will do so as well.

2


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

WILTON PARTNERS IIT LLC, a Delaware limited )
liability company, and WILTON DEVEI.OPMENT )
CORP., a Delaware corporation,

Plaintiffs,
No. 03C 1519

Judge Robert W. Gettleman
TIM GALLAGHER, an individual, PATRICIA
KELLY, an individual, FIRST EQUITY
PROPERTY, INC., an Llinois corporation, NEIL
COTHERMAN, an individual, TTF NETMEDICS
GROUP, JOHN DOFS 1-10 and ABC-XYZ
CORPORATIONS,

)

)

)

)

Vv. )
)

)

)

)

)

)
)
) 5 1
Defendants. ) we 8
)

‘JM GALLAGHER, an individual, and FIRST
EQUITY PROPERTY, INC., an Illinois
corporation,

Counter-Plaintiffs,
v.

JAY WILTON, an individual, WILTON
PARTNERS IIL, LLC, a Delaware limited liability
company, WILTON DEVELOPMENT CORP.,

a Delaware corporation, and SCOTT MAYER,
Lsq.,

Counter-Defendants,

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
Third Party Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiffs Wilton Partners II LLC and Wilton Development Corp. (collectively, the “Wilton

Companies”) filed a ten-count second amended complaint against five defendants, including Tim


Although cognizant of the apparent inconsistencies betwcen some of the statements made
in Gallagher’s motion to dismiss and the two allegations highlighted by Jay Wilton, the court
nonetheless concludes that Gallagher has stated a claim in Count IJ. In addition to the allegations
quoted above, Gallagher further alleges in Count Ill that “upon information and belief, Jay Wilton
received in excess of $6,000,000 on CVS development projects initiated, developed, and otherwise
worked on by Gallagher pursuant to the CVS Agreement” and that “to date, Jay Wilton has failed
to remit payment of any profits to Gallagher for his contribution to these deals and pursuant to the
CVS Agreement.” These latter allegations, when taken together with Gallagher’s allegation that he
entered into an oral contract with Jay Wilton, are sufficient to state a claim for breach of oral contract
against Jay Wilton.

Although skeptical of what appears to be purposefully ambiguous pleading on Gallagher's
part (throughout the amended counterclaim and third party complaint), the court nonetheless
concludes that Gallagher has stated a claim for relief in Count IIT. Of course, it remains to be seen
whether, with the benelit of discovery, Gallagher will be able to substantiate the allegations in Count
1M] against Jay Wilton personally.

Jay Wilton’s statute of frauds argument is also unavailing, The Illinois Statute of Frauds, 740
TLCS 80/1, directs that “[nJo action shall be brought... upon any agreement that is not to be
performed within the space of one year from the making thereof, unless the promise or agreement
upon which such action shall be brought, or some memorandum or note thereof, shall be in
writing...” Any agreement that is capable of being performed within a year, whether or not that
contingency is likely, falls outside the reach of the statute of frauds. Lamaster v. Chicagy and

Northeast Ilinois District Council of Carpenters Apprentice and Trainee Program, 766 F. Supp.

12


6. Count Vi: Accounting

To state a claim for accounting under Illinois law, a plaintiff must allege the absence of an
adequate remedy at law and one of the following: (1) breach of a fiduciary relationship between the
parties; (2) anced for discovery; (3) fraud; or (4) the existence of complex mutual accounts, 3Com

Corp. v. Electronies Recovery Spec., inc., 104 F. Supp. 2d 932, 941 (N.D. TIL, 2000). Jilingis courts

will excuse the failure to allege the absence ofan adequate remedy at law, however, ifthe accounting
claim is based on a breach of fiduciary duty. Id.

Gallagher acknowledges that his accounting claim is based on breach of fiduciary duty. As
noted earlier, the court is dismissing Gallagher’s breach of fiduciary duty claim against the Wilton
Companies, Accordingly, Count VIL must be dismissed as to the Wilton Companies, since Gallagher
has not alleged an alternative basis for his accounting claim.

The court also dismisses Count VII as to Scott Mayer. As Mayer points out, the counterclaim
alleges no basis for why he should account for monies paid by CVS, Unlike Jay Wilton, Mayer is
not alleged to have made any contracts or other agreements with Gallagher with respect to the CVS
business. Moreover, Gallagher has not advanced any theory for piercing the corporate veil against

Mayer. See Real Colors, Inc., 39 F. Supp. 2d at 992 (N.D.IN. 1999) (“It is a well-established

principle that a corporation is separate and distinct as a legal entity from its shareholders, directors
and officers, and generally, from other corporations with which it may be affihated.”). Gallagher
has not responded to this argument, which appears to be meritorious. Accordingly, the court grants

Mayer’s motion to dismiss Count VI against him.

15