1

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

Todd L. Anderson,

Plaintiff, Case No.: 1:20-cv-04794

v. Judge John Robert Blakey

Rush Street Gaming, LLC, Rush Street 

Interactive LLC, Rush Street Interactive,

LP, Neil Bluhm, and Greg Carlin, 

Defendants

MEMORANDUM OPINION AND ORDER

Plaintiff Todd L. Anderson filed a six-count amended complaint against 

Defendants (Rush Street Gaming, LLC; Rush Street Interactive LLC; Rush Street 

Interactive, LP; Neil Bluhm; and Greg Carlin), alleging breach of contract (Count I), 

breach of fiduciary duty (Count II), conversion (Count III), unjust enrichment (Count 

IV), promissory estoppel (Count V), and constructive fraud (Count VI). [19]. 

Defendants move to dismiss Plaintiff’s complaint in its entirety pursuant to Federal 

Rules of Civil Procedure 9(b) and 12(b)(6). [27]. For the reasons explained below, the 

Court grants in part and denies in part Defendants’ motion.

I. Background1

Through their partnership, All In Production, LLP, Plaintiff and his business 

partner launched and built the Heartland Poker Tour (“Heartland”), a televised poker 

1 The Court draws these facts from Plaintiff’s Amended Complaint [19]. 

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tour. [19] ¶¶ 25–27. After managing the tour for several years, Plaintiff and his 

business partner agreed to sell Heartland to Federated Sports & Gaming 

(“Federated”). Id. ¶ 36. Under the sale agreement, All In Production sold Heartland 

to Federated in exchange for $4.3 million and “tens of thousands” of shares in 

Federated. Id. ¶ 37. 

Federated subsequently formed a new, wholly owned subsidiary, Federated 

Heartland, Inc. (“Federated Heartland”), to operate Heartland. Id. ¶ 38. After the 

sale, Plaintiff and his business partner continued to run Heartland’s day-to-day 

operations. Id. ¶ 39. In late 2011, Federated failed to pay Plaintiff and his business 

partner the money it owed them from the sale, and Federated filed for chapter 11 

bankruptcy. Id. ¶¶ 56–58. 

The main investor in Federated, J.B. Pritzker, sent an email to Plaintiff, 

copying an individual named Richard Schwartz, that introduced Plaintiff to Rush 

Street, a company interested in purchasing Heartland. Id. ¶¶ 60–62. Rush Street, 

a company in the gaming industry, was founded by Defendants Bluhm and Carlin. 

Id. ¶¶ 43–44. Defendants Bluhm and Carlin subsequently partnered with Richard 

Schwartz, an individual with prior experience in the gaming industry, to launch a 

new subsidiary of Rush Street called Rush Street Interactive. Id. ¶¶ 47–48. Schwartz 

was eventually named President of Rush Street Interactive. Id. ¶ 51. 

Plaintiff declined to partner with Rush Street. Id. ¶ 67. On June 13, 2012, an 

auction took place for substantially all of Federated’s assets, including Heartland. Id. 

¶¶ 68–69. Schwartz, acting on behalf of Rush Street, unsuccessfully bid $4 million to 

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acquire Heartland. Id. ¶¶ 71–72. After another company acquired Heartland, 

Plaintiff resigned from his position as President of Heartland. Id. ¶¶ 73–75.

Rush Street Gaming, LLC; Rush Street Interactive (which Plaintiff uses to 

refer to both Rush Street Interactive LLC and the possible successor Rush Street 

Interactive, LP); and Defendants Bluhm and Carlin (collectively, the “Rush Street 

Defendants”) subsequently formed a new entity called Rush Street Productions, in 

preparation for their venture into televised poker. Id. ¶ 76. The Rush Street 

Defendants identified Plaintiff as a suitable candidate to run Rush Street 

Productions. Id. ¶ 77. 

Schwartz contacted Plaintiff and, after identifying himself a junior executive in 

the Rush Street organization, discussed Plaintiff’s ideas for televised poker. Id. 

¶¶ 81–83. On July 16, 2012, Plaintiff met with Defendant Carlin, Schwartz, and 

another Rush Street officer to discuss prospects for a televised poker tour. Id. ¶¶ 87, 

89. Later that month, Schwartz provided Plaintiff with a non-binding proposal (the 

“Term Sheet”) to form a new joint venture entity that included an offer to provide 

Plaintiff with 1% of the common equity in Rush Street Interactive, vesting over four 

years. Id. ¶¶ 105–109. On July 27, 2012, Plaintiff responded with a counteroffer that 

increased his equity interest in Rush Street Interactive LLC to 3%, vesting over three 

years. Id. ¶¶ 113–114. After further discussions with a Rush Street officer, Plaintiff 

decided to accept the Rush Street Defendants’ initial offer providing Plaintiff with a 

1% equity interest. Id. ¶¶ 117–119.

In late July, Plaintiff contacted Schwartz by phone, and the two reached an 

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oral agreement regarding Plaintiff’s employment and Plaintiff and Rush Street’s joint 

venture. Id. ¶ 120. In the agreement, Plaintiff and the Rush Street Defendants 

agreed to the terms in Plaintiff’s counteroffer, with two changes:

• Rush Street Interactive LLC would invest $1.25 million in the new Rush 

Street entity, a mid-point between the Term Sheet and the counteroffer; 

• Plaintiff would have a 1% equity interest in Rush Street Interactive LLC, 

vesting over four years and subject to accelerated vesting in the case of a 

liquidity event or change of control.

Id. ¶ 125. The parties also agreed that Plaintiff would manage the new Rush Street 

entity and would be responsible for developing and launching a new poker tour, Poker 

Night in America. Id. ¶ 128. The agreement included all the material terms for the 

joint venture. Id. ¶ 129. 

After Plaintiff and the Rush Street Defendants entered into the agreement, 

Defendant Carlin and another Rush Street officer sent welcome emails to Plaintiff. 

Id. ¶¶ 134–137. Schwartz later told Plaintiff that the Rush Street Defendants would 

prepare additional documentation memorializing the agreement. Id. ¶ 145. 

On August 8, 2012, Plaintiff received a formal, written document, which 

provided that:

• Plaintiff would be employed as the president of a new Rush Street and 

Rush Street Interactive LLC subsidiary, Rush Street Productions; 

• Plaintiff’s employment would start on an agreed-upon date; 

• Rush Street Interactive LLC would invest $1.25 million to fund Rush 

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Street Productions’ growth; 

• Plaintiff would own 33% of Rush Street Productions’ common equity;

• Plaintiff would own a 1% equity interest in Rush Street Interactive, 

which would vest in four equal installments of 0.25% beginning on the 

one-year anniversary of Plaintiff’s start date and, assuming Plaintiff’s 

continued employment, on each anniversary thereafter; 

• The vesting schedule for that 1% equity interest would accelerate so that 

Plaintiff’s 1% equity interest would immediately and fully vest if Rush 

Street Interactive LLC went through a liquidity event or a change of 

control.

Id. ¶¶ 148–150. The agreement letter also stated that Plaintiff’s equity interest 

remained subject to additional terms and conditions to be set forth in the Rush Street 

Interactive LLC and Rush Street Productions operating agreements. Id. ¶ 151. 

On August 13, 2012, Plaintiff told Schwartz that he would need to see the 

operating agreements referenced in the agreement letter before signing. Id. ¶ 155. 

After Rush Street failed to provide the operating agreements, Schwartz told Plaintiff 

that he would receive a new letter memorializing the agreement. Id. ¶¶ 156–160. On 

August 21, 2012, after speaking to Defendant Carlin and Schwartz, Plaintiff officially 

started working with the Rush Street Defendants at his agreed upon annual salary 

of $200,000. Id. ¶ 162. Plaintiff began work without waiting for the operating 

agreement or for a revised agreement letter to be drafted. Id. ¶ 161. Plaintiff 

subsequently agreed to reduce his salary in 2017 based, in part, on his belief that he 

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would receive the promised 1% equity interest in Rush Street Interactive. Id. ¶ 200. 

After Plaintiff entered into the agreement with the Rush Street Defendants, 

Schwartz repeatedly assured Plaintiff that he need not worry about the lack of formal 

documentation of the 1% equity interest, sharing that Schwartz’s own 5% equity 

interest in Rush Street Interactive similarly was not memorialized. Id. ¶¶ 203, 205, 

207–208. Schwartz told Plaintiff that the Rush Street Defendants would formalize 

Plaintiff’s agreement after formalizing Schwartz’s agreement. Id. ¶ 206. 

To Plaintiff’s knowledge, the Rush Street Defendants never prepared an 

executed operating agreement for either Rush Street Interactive LLC or Rush Street 

Productions. Id. ¶ 217. Neither the Rush Street Defendants nor Schwartz told 

Plaintiff that they had formalized their agreement with Plaintiff. Id. ¶ 218.

On or around January 1, 2019, the Rush Street Defendants converted Rush 

Street Interactive LLC into a limited partnership. Id. ¶ 220. Defendants established 

an operating agreement for Rush Street Interactive, LP, the converted entity, only. 

Id. All the issued and outstanding equity interests of Rush Street Interactive LLC 

were transferred to Rush Street Interactive, LP. Id. ¶ 221. The Rush Street 

Defendants did not provide Plaintiff with notice of the conversion or the agreement 

under which equity interests in Rush Street Interactive LLC transferred to Rush 

Street Interactive, LP; nor did they provide Plaintiff with a copy of the operating 

agreement for Rush Street Interactive, LP. Id. ¶¶ 222–223. Defendants did not 

document Plaintiff’s 1% equity position in Rush Street Interactive. Id. ¶ 224.

In June 2020, after learning of an anticipated public offering by Rush Street 

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Interactive, Plaintiff sent a series to emails to Schwartz, Defendant Bluhm, and 

Defendant Carlin regarding his 1% equity interest. Id. ¶¶ 237, 243–245. On 

August 4, 2020, Defendant Carlin finally responded, copying Schwartz and 

Defendant Bluhm, to state that the Rush Street Defendants would not provide 

Plaintiff with the 1% equity interest in Rush Street Interactive. Id. ¶ 246.

Plaintiff subsequently filed the initial complaint in this matter on August 14, 

2020. [1]. Plaintiff filed an amended complaint on September 15, 2020, alleging the 

following: breach of contract against Defendants Rush Street Gaming and Rush 

Street Interactive (Count I); breach of fiduciary duty against Defendants Bluhm and 

Carlin (Count II); and conversion (Count III), unjust enrichment (Count IV), 

promissory estoppel (Count V), and constructive fraud (Count IV) against all 

Defendants. [19]. On October 13, 2020, Defendants moved to dismiss all of Plaintiff’s 

claims pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6). [27]. 

II. Legal Standard

To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6),

a complaint must provide a “short and plain statement of the claim showing that the

pleader is entitled to relief,” so the defendant has “fair notice” of the claim “and the

grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)

(quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint must also contain

“sufficient factual matter” to state a facially plausible claim to relief—one that “allows

the court to draw the reasonable inference that the defendant is liable for the

misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly,

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550 U.S. at 570). This plausibility standard “asks for more than a sheer possibility”

that a defendant acted unlawfully. Sevugan v. Direct Energy Servs., LLC, 931 F.3d

610, 614 (7th Cir. 2019) (quoting W. Bend Mut. Ins. Co. v. Schumacher, 844 F.3d 670,

675 (7th Cir. 2016)). Thus, threadbare “recitals of the elements of a cause of action”

and mere conclusory statements “do not suffice.” United States ex rel. Berkowitz v.

Automation Aids, Inc., 896 F.3d 834, 839 (7th Cir. 2018) (quoting Iqbal, 556 U.S. at

678). 

In evaluating a complaint under Rule 12(b)(6), this Court accepts all wellpleaded allegations as true and draws all reasonable inferences in the plaintiff’s

favor. Iqbal, 556 U.S. at 678. This Court does not, however, accept a complaint’s

legal conclusions as true. Cornielsen v. Infinium Capital Mgmt., LLC, 916 F.3d 589,

603 (7th Cir. 2019).

Where a plaintiff alleges fraud, he must meet Rule 9(b)’s heightened pleading

standard. To plead “with particularity the circumstances constituting fraud,” Fed. R.

Civ. P. 9(b), a plaintiff must identify the, “who, what, when, where, and how” of the

alleged fraud.” Benson v. Fannie May Confections Brands, Inc., 944 F.3d 639, 646

(7th Cir. 2019).

III. Analysis

Defendants ask this Court to dismiss Plaintiff’s first amended complaint in its

entirety. This Court considers Defendants’ arguments as to each claim below.

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A. Count I: Breach of Contract

Count I of the first amended complaint alleges breach of contract by Rush Street 

and Rush Street Interactive. To properly allege a breach of contract, “whether oral 

or written,” under Illinois law,2 a Plaintiff must show “‘the existence of a valid and 

enforceable contract, performance by the plaintiff, breach of the contract by the 

defendant, and resultant damages or injury to the plaintiff.’” Mission Measurement 

Corp. v. Blackbaud, Inc., 287 F. Supp. 3d 691, 715 (N.D. Ill. 2017) (quoting Sheth v. 

SAB Tool Supply Co., 990 N.E.2d 738, 754 (Ill. App. Ct. 2013)). The elements of a 

valid and enforceable contract under Illinois law include “offer, acceptance, and 

consideration.” LKQ Corp. v. Thrasher, 785 F. Supp. 2d 737, 742 (N.D. Ill. 2011) 

(citing Vassilkovska v. Woodfield Nissan, Inc., 830 N.E.2d 619, 624 (Ill. App. Ct. 

2005)).

Here, Plaintiff alleges that he entered into a contract with Defendants Rush 

Street and Rush Street Interactive, that he performed under the contract, that 

Defendants Rush Street and Rush Street Interactive breached the contract, and that 

he suffered damages as a direct and proximate result of this breach. [19] ¶¶ 249–

252. This Court begins its analysis by determining whether Plaintiff sufficiently 

pleads contract formation. 

Plaintiff alleges that he entered into an oral employment agreement with 

Richard Schwartz, an individual who Plaintiff alleges had proper authority to enter 

into such agreements on behalf of Rush Street and Rush Street Interactive. Id.

2 For purposes of this motion, the parties agree that Illinois law governs. See [28] at 2 n.1; [29] at 14–

15.

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¶¶ 120–124. Under the agreement, which incorporated certain terms from an earlier 

counteroffer by Plaintiff (and, by extension, the initial offer from the Rush Street 

Defendants), id. ¶¶ 114, 125, Plaintiff agreed to manage a new joint venture between 

himself and Rush Street Interactive, id. ¶ 109. As part of his management of the 

joint venture, to be majority owned by Rush Street Interactive, id., Plaintiff would be 

responsible for developing and launching a new poker tour. Id. ¶ 128. In exchange, 

the Rush Street Defendants agreed to provide Plaintiff with a base salary of $200,000 

and a 1% equity interest in Rush Street Interactive, intended to vest over four years 

and subject to accelerated vesting in the case of a change in control or a liquidity 

event. Id. ¶¶ 109, 125. 

Defendants argue that these alleged terms fail to evidence a valid and 

enforceable contract for two reasons. First, Defendants invoke the Illinois Statute of 

Frauds. At the outset this Court notes that the “Statute of Frauds . . . is an 

affirmative defense” and that courts will grant a motion to dismiss on this basis “only 

if it is plain from the face of the complaint that the defense is meritorious.” Am. 

Kitchen Delights, Inc. v. Signature Foods, LLC, No. 16-CV-08701, 2018 WL 1394032, 

at *5 (N.D. Ill. Mar. 20, 2018) (citing Hyson USA, Inc. v. Hyson 2U, Ltd., 821 F.3d 

935, 939 (7th Cir. 2016)). Under the Statue of Frauds, the law requires that “an 

agreement that cannot be fully performed within one year” must be “in writing and 

signed by the party against whom enforcement is sought (or his authorized agent).” 

Id. (citing 740 Ill. Comp. Stat. 80/1). As a result, Defendants argue, Count I fails. 

[28] at 7. Not so. 

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If “an oral agreement could potentially be performed within a year, regardless 

of the parties’ expectations or the actual course of events, then the [Statute of Frauds] 

will not bar its enforcement.” Church Yard Commons Ltd. P’Ship v. Podmajersky, 

Inc., 76 N.E.3d 96, 103 (Ill. App. Ct. 2017) (emphasis added). That is the case here. 

Although the agreement contemplated that Plaintiff’s equity interest in Rush Street 

Interactive would vest over a four-year period, the acceleration clause provided for 

the possibility of full performance within less than one year.

Defendants, relying upon two Illinois cases, argue that this Court should not 

treat the agreement as one that could be performed within less than one year because 

it “plainly ‘anticipates a relationship of long duration.’” [34] at 5 (quoting 

McInerney v. Charter Gold, Inc., 680 N.E.2d 1347, 1352 (Ill. 1997). But the cases 

cited by Defendants are inapposite. In McInerney v. Charter Golf, Inc., the contract 

that “[i]nherently . . . anticipate[d] a relationship of long duration . . . longer than one 

year” was a lifetime employment contract. 680 N.E.2d at 1351–52. The Illinois 

Supreme Court held that “the better view” was “to treat the contract as one ‘not to be 

performed within the space of one year from the making thereof,’” but the court’s 

holding was specific to “the context of an employment-for-life contract.” Id. (quoting 

740 Ill. Comp. Stat. Ann. 80/1 (West 1994)). The contract at issue here can in no way 

be characterized as an employment-for-life contract. 

Silvestros v. Silvestros, 563 N.E.2d 1084 (Ill App. Ct. 1990), the other authority 

Defendants rely upon, is also distinguishable. In Silvestros, the Illinois Appellate 

Court found that a contract with an acceleration clause providing for a “25-month 

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installment payment period” still fell within the scope of the state of frauds. 563 

N.E.2d at 1087. But the acceleration clause at issue in Silvestros operated quite 

differently from the one here. 

In Silvestros, the “contract” was an agreed order under which a judgment debtor 

agreed to pay off a $40,000 judgment over a period of 25 months. Id. at 1085. In the 

event the “defendant defaulted for more than 30 days in the payment of any 

installment,” the acceleration clause permitted plaintiff “to declare the entire balance 

due and execute on the judgment.” Id. at 1087. In other words, the acceleration 

served to terminate the agreement, thus making performance impossible. For this 

reason, the court held that “the acceleration clause did not serve to remove the ‘agreed 

order’ from the scope of the statute of frauds.” Id. As alleged by Plaintiff here, 

however, the acceleration clause did not terminate the contract; rather, it made it 

possible for full performance to occur in less than one year. Accordingly, the Illinois 

Statute of Frauds does not bar Plaintiff’s breach of contract claim. 

Defendants next argue that “although the offer letter from Schwartz expressly 

conditioned the terms of [Plaintiff]’s offer on his ‘agreement to timely execute’ the 

letter and accompanying agreements, . . . neither he nor Schwartz ever executed or 

signed these agreements.” [28] at 10. In other words, because “the clear intent of the 

parties” was that neither would be “legally bound until the execution and delivery of 

a formal agreement,” no contract was formed in the absence of “such execution and 

delivery.” Id. (quoting Ceres Ill., Inc. v. Ill. Scrap Processing, Inc., 500 N.E.2d 1, 5 

(Ill. 1986)). Both Schwartz’s offer to Plaintiff and Plaintiff’s counteroffer contained 

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the following as an express condition: “Parties work exclusively to negotiate definitive 

transaction documents reflecting above.” [19-1]; [19-2]. Although neither the original 

offer nor the counteroffer was accepted, the alleged oral agreement between Plaintiff 

and Schwartz incorporated this language by reference. [19] ¶¶ 114, 125. 

At this stage of the litigation, however, the Court cannot say that the “definitive 

transaction documents” language precludes any finding of contract formation. 

Although a subsequent letter from Schwartz to Plaintiff does state that the “offer is 

contingent upon your agreement to timely execute this letter, a written 

confidentiality agreement” and “an Invention and Copyright Agreement,” [19-3] at 4, 

Plaintiff alleges that he received this letter after he had reached an oral agreement 

with Schwartz, [19] ¶¶ 120, 148. And it is this oral agreement that forms the basis 

for Plaintiff’s breach of contract claim. Additionally, despite the lack of any formal 

agreement, Plaintiff officially started working with the Rush Street Defendants on 

August 21, 2012, and Defendants paid him his agreed upon annual salary of 

$200,000. Id. ¶¶ 161–162. 

As to the other elements of Plaintiff’s breach of contract claim, this Court finds

(and Defendants do not contest) that Plaintiff has adequately pled performance, 

breach, and damages. Accordingly, this Court denies the motion to dismiss as to 

Count I of the amended complaint. 

B. Count II: Breach of Fiduciary Duty

To state a claim for breach of fiduciary duty, a plaintiff must “allege a fiduciary 

duty and a breach of that duty that caused damages.” Sanders v. JGWPT Holdings, 

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LLC, No. 14 C 9188, 2017 WL 2672300, at *2 (N.D. Ill. June 20, 2017). Absent a 

fiduciary duty “as a matter of law,” a plaintiff “must plead facts showing that one 

party placed trust and confidence in the other so that the latter gained influence and 

superiority over the former.” Lane v. Money Masters, Inc., No. 14-CV-1715, 2015 WL 

225427, at *10 (N.D. Ill. Jan. 15, 2015) (quoting Simon v. Wilson, 684 N.E.2d 791, 797 

(Ill. App. Ct. 1997)). Here, Plaintiff alleges that he was “in a fiduciary relationship” 

with Defendants Bluhm and Carlin and that these Defendants breached their 

fiduciary duties towards Plaintiff causing him damages. [19] ¶¶ 253–257. These 

conclusory allegations, however, do not suffice.

In his response to the motion to dismiss, Plaintiff argues that Defendants 

Bluhm and Carlin owed him fiduciary duties as a matter of law under two theories. 

First, Plaintiff argues that Defendants Bluhm and Carlin owed fiduciary duties 

because they were in a joint venture with Plaintiff. [29] at 18. The legal principle 

here is correct; under Illinois law, “a fiduciary relationship ‘exists as a matter of law 

between . . . members of a partnership or joint venture.’” Doherty v. Country Faire 

Conversion, LLC, 170 N.E.3d 589, 599 (Ill. App. Ct. 2020) (quoting D’Attomo v. 

Baumbeck, 36 N.E.3d 892, 913 (Ill. App. Ct. 2015)). The problem for Plaintiff is that, 

reading the facts in the light most favorable to him, nothing in the Complaint 

establishes that this rule would apply here. Nowhere in the amended complaint does 

Plaintiff allege that Defendants Bluhm and Carlin entered into a joint venture with 

Plaintiff, nor do the attached exhibits otherwise support such a conclusion. 

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Plaintiff also argues that Defendants Bluhm and Carlin owed him fiduciary 

duties as a matter of law, because he had a minority equity interest in Rush Street 

Interactive LLC, an LLC in which Defendants Bluhm and Carlin were controlling 

members. [29] at 18. But Plaintiff’s argument here turns on Delaware LLC law and 

Plaintiff’s complaint makes no mention of where the LLC in question was formed. 

Even if this Court were to assume that the LLC was formed in Delaware, this 

Court could not conclude that Defendants Bluhm and Carlin owed Plaintiff fiduciary 

duties as a matter of law. Under Delaware law, only managers and controlling 

members owe fiduciary duties to minority members, unless the LLC agreement 

provides otherwise. See Glidepath Ltd. v. Beumer Corp., No. 12220, 2019 WL 855660, 

at *18 & n.144 (Del. Ch. Feb. 21, 2019), judgment entered, (Del. Ch. 2019). Here 

Plaintiff has not pled facts that, if taken as true, would establish that Defendants 

Bluhm and Carlin were managers or controlling shareholders of Rush Street 

Interactive LLC.

Lastly, Plaintiff argues that Defendants Bluhm and Carlin owed him fiduciary 

duties as a matter of fact. Plaintiff, however, has not pled facts demonstrating a close 

relationship between himself and Defendants Bluhm and Carlin that might give rise 

to fiduciary duties. 

Because Plaintiff has not sufficiently alleged that Defendants Bluhm and 

Carlin owed him fiduciary duties, either as a matter of law or a matter of fact, Count 

II of the amended complaint fails. Accordingly, this Court grants Defendants’ motion 

to dismiss Count II

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C. Count III: Conversion

To state a claim for conversion under Illinois law, a plaintiff must allege: (1) an 

unauthorized and wrongful assumption of control, dominion, or ownership by 

defendant over plaintiff’s property; (2) plaintiff’s right to the property; (3) plaintiff’s 

right to immediate possession of the property, absolutely and unconditionally; and (4) 

a demand for possession of the property. Desmond v. Taxi Affiliation Servs. LLC, 344 

F. Supp. 3d 915, 928 (N.D. Ill. 2018). 

In his amended complaint, Plaintiff alleges that Defendants wrongfully 

maintained control over a 1% equity interest in Rush Street Interactive LLC; that he 

was entitled to this interest by contract; and that he made a demand upon Defendants 

for this interest. [19] at ¶¶ 125, 224–225, 230–232, 237, 243, 245–246. Because these 

facts properly allege conversion, this Court denies the motion to dismiss Count III. 

D. Count IV: Unjust Enrichment

Under Illinois law, unjust enrichment is “not an independent cause of action,” 

Sheridan v. iHeartMedia, Inc., 255 F. Supp. 3d 767, 781 (N.D. Ill. 2017) (quoting 

Gagnon v. Schickel, 983 N.E.2d 1044, 1052 (Ill. App. Ct. 2012), but rather “a condition 

brought about by fraud or other unlawful conduct,” Raquet v. Allstate Corp., 348 F. 

Supp. 3d 775, 787 (N.D. Ill. 2020) (quoting Vanzant v. Hill’s Pet Nutrition, Inc., 934 

F.3d 730, 735 (7th Cir. 2019)). Accordingly, an unjust enrichment claim “will stand 

or fall” with related claims founded “on the same improper conduct.” O’Connor v. 

Ford Motor Co., 477 F. Supp. 3d 705, 720 (N.D. Ill. 2020) (quoting Krug v. Am. Family 

Mut. Ins. Co., 227 F. Supp. 3d 942, 946 (N.D. Ill. 2016)). Here, Plaintiff rests his 

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unjust enrichment claim entirely upon his allegations of breach of fiduciary duty 

(Count II) and constructive fraud (Count VI). But, as discussed herein, both claims 

fail. So too must Plaintiff’s unjust enrichment claim. This Court grants the motion 

to dismiss Count IV of the amended complaint. 

E. Count V: Promissory Estoppel

To state a claim for promissory estoppel under Illinois law, a “plaintiff must 

adequately allege that ‘(1) defendant made an unambiguous promise to plaintiff, (2) 

plaintiff relied on such promise, (3) plaintiff’s reliance was expected and foreseeable 

by defendant[], and (4) plaintiff relied on the promise to [his] detriment.” Zummo v. 

City of Chicago, 345 F. Supp. 3d 995, 1009–10 (N.D. Ill. 2018) (alterations in original) 

(quoting Newton Tractor Sales, Inc. v. Kubota Tractor Corp., 906 N.E.2d 520, 523–24 

(Ill. 2009)), aff’d, 798 F. App’x 32 (7th Cir. 2020). And it is well established that a 

plaintiff alleging breach of contract may plead promissory estoppel in the alternative. 

See Mission Measurement Corp. v. Blackbaud, Inc., 216 F. Supp. 3d 915, 922 (N.D. 

Ill. 2016) (listing cases). 

Here Plaintiff alleges that Schwartz, acting on behalf of Defendants Bluhm, 

Carlin, and Rush Street Interactive, promised him a 1% equity interest in Rush 

Street Interactive; that Schwartz made repeated assurances to Plaintiff not to worry 

about the fact that his 1% equity interest had not been memorialized; that he worked 

for Defendants, in part, due to his belief that he would receive the 1% equity interest; 

and that he voluntarily reduced his salary based, in part, on his belief that he would 

receive the 1% equity interest. [19] at ¶¶ 102, 109, 119, 132, 163, 200, 207–208. 

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Reading these facts in the light most favorable to Plaintiff, they suffice to allege the 

elements of promissory estoppel. This Court denies the motion to dismiss Count V. 

F. Count VI: Constructive Fraud

A claim of constructive fraud under Illinois law “requires the existence of a 

confidential or fiduciary relationship” between plaintiff and defendant. Mongler v. 

Knight, No. 18 C 2585, 2018 WL 5921318, at *3 (N.D. Ill. Nov. 12, 2018) (quoting 

Joyce v. Morgan Stanley & Co., 538 F.3d 797, 800 (7th Cir. 2008)). This claim does 

“not require actual dishonesty or intent to deceive.” Danley v. Zydlo, No. 16-cv-2872, 

2018 WL 5388989, at *3 (N.D. Ill. Oct. 29, 2018) (quoting LaSalle Nat’l Tr., N.A. v. 

Bd. of Dirs. of the 1100 Lake Shore Drive Condo., 677 N.E.2d 1378, 1383 (Ill. App. Ct. 

1997)). Instead, a plaintiff alleging constructive fraud need only show that “defendant 

(1) breached the fiduciary duty he owed to plaintiff and (2) knew of the breach and 

accepted the fruits of the fraud.” Joyce, 538 F.3d at 800 (quoting Prodromos v. Everen 

Secs., Inc., 793 N.E.2d 151, 158 (Ill. App. Ct. 2003)).

In the Seventh Circuit, constructive fraud claims remain subject to Rule 9(b)’s 

heightened pleading requirements. See Taylor v. Feinberg, No. 08-CV-5588, 2009 WL 

3156747, at *5 (N.D. Ill. Sept. 28, 2009) (citing Gen. Elec. Capital Corp. v. Lease 

Resolution Corp., 128 F.3d 1074, 1079 (7th Cir. 1997)). To avoid dismissal under this 

standard, “the complaint must describe the ‘who, what, when, where, and how’” of the 

alleged fraud.” Muskegan Hotels, LLC v. Patel, 986 F.3d 692 (7th Cir. 2021).

Plaintiff’s claim here fails. As discussed above in this Court’s analysis of the 

breach of fiduciary duty claim, Plaintiff has not sufficiently alleged a fiduciary or 

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confidential relationship. Absent such a relationship, Plaintiff cannot allege 

constructive fraud. Accordingly, this Court grants the motion to dismiss Count VI.

G. Notice to Defendants

In addition to challenging each of Plaintiff’s claims, Defendants Rush Street 

Gaming, Bluhm, and Carlin seek to dismiss the claims against them under Federal 

Rule of Civil Procedure 8(a) because the amended complaint “lacks sufficient detail 

to put each defendant on notice of which claims are stated against them.” [28] at 15. 

But Rule 8’s pleading standard is a “liberal” one. McNichols v. Weiss, No. 18 C 

2125, 2018 WL 5778413, at *2 (N.D. Ill. Nov. 2, 2018). A plaintiff need only allege 

facts sufficient “‘to raise a right to relief above the speculative level’ and ‘give the 

defendant fair notice’ of what the claim is, ‘and the grounds upon which it rests.’” 

Gavin/Solmonese LLC v. Kunkel, No. 16-cv-1086, 2016 WL 3612123, at *6 (N.D. Ill. 

July 6, 2016) (quoting Twombly, 550 U.S. at 555).

Plaintiffs amended complaint meets this standard, alleging facts sufficient to 

inform Defendants of the claims and their respective roles in relation to each count. 

Although the complaint does, at times, refer to Defendants collectively, Rule 8 does 

not preclude such lumping where, as here, a plaintiff alleges that multiple defendants 

“engaged in precisely the same misconduct.” Slep-Tone Entm’t Corp. v. Coyne, 41 F. 

Supp. 3d 707, 714 (N.D. Ill. 2014). 

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IV. Conclusion

This Court grants in part and denies in part Defendants’ motion to dismiss 

[27]. This Court dismisses without prejudice Counts II, IV, and VI, but denies the 

motion to dismiss Counts I, III, and V. 

Dated: September 28, 2021

Entered:

John Robert Blakey

United States District Judge

Case: 1:20-cv-04794 Document #: 48 Filed: 09/28/21 Page 20 of 20 PageID #:303