IN THE UNITED STATES DISTRICT COURT FOR 

THE NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

RYAN L. APRILL, an individual, and 

THOMAS S. APRILL, an individual, 

 Plaintiffs, 

vs. 

ANTHONY AQUILA, AQUILA FAMILY 

VENTURES, LLC, AFV FOUNDERS SELECT 

CAPITAL PARTNERS LLC, a/k/a AFV 

PARTNERS LLC, AFV MANAGEMENT 

ADVISORS LLC, AND AFV FSCP COINVESTMENT I LLC, a/k/a AFV PARTNERS 

CO-INVESTMENT I LLC, 

 Defendants. 

Case No. 20 cv 04657 

Hon. Martha M. Pacold 

PLAINTIFFS’ RESPONSE TO MOTION TO DISMISS PURSUANT TO RULE 12(B)(3), 

12(B)(6) AND 9(B) AND MOTION TO STRIKE PURSUANT TO 12(F) 

Dated: November 10, 2020 Peter A. Silverman (ARDC No. 6196081) 

Michael K. Desmond (ARDC No. 6208809) 

Mattison D. Enloe (ARDC No. 6329648) 

FIGLIULO & SILVERMAN, P.C. 

10 South LaSalle Street 

Suite 3600 

Chicago, Illinois 60603 

(312) 251-4600 

psilverman@fslegal.com

mdesmond@fslegal.com

menloe@fslegal.com

Attorneys for Plaintiffs 

 

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Table of Contents 

INTRODUCTION ...........................................................................................................................1 

LEGAL STANDARD ......................................................................................................................2 

ARGUMENT ...................................................................................................................................3 

 I. Defendants Have Failed To Meet Their Burden of Establishing The Existence 

 of a Valid Arbitration Agreement .....................................................................................3 

 A. There Is No Valid Arbitration Agreement with Ryan .............................................3 

 B. Any Obligation To Execute The Arbitration Agreement Was Excused 

 Or Waived ................................................................................................................6 

 II. Each Cause of Action is Properly Stated ..........................................................................8 

 A. Defendants Purposefully Ignore the Facts Alleged in the Complaint ......................8 

 B. The Plaintiffs State Valid Claims for Breach of Contract .....................................10 

 C. Out of State Employers are Subject to the Illinois Wage Payment and 

 Collection Act ........................................................................................................12 

 D. Ryan Adequately States A Claim For Breach Of Fiduciary Duty .........................14 

 E. Plaintiffs Have Adequately Stated A Claim For Unjust Enrichment. ...................15 

 F. Breach of Covenant of Good Faith and Fair Dealing is Properly Pled ..................16 

 G. Plaintiffs Have Adequately Stated A Claim For Promissory Estoppel ..................17 

 H. Plaintiffs Have Adequately Alleged a Scheme To Defraud In Support of 

 Fraudulent Inducement Claims ..............................................................................18 

 I. Facts Alleged By Tom Aprill Are More Than Sufficient To State Claims 

 For Fraudulent Inducement ....................................................................................22 

 III. Aquila Can Be Held Liable In His Individual Capacity .................................................23 

 IV. Defendants’ Motion to Strike Should be denied .............................................................25 

 CONCLUSION ........................................................................................................................27 

 

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Table of Authorities 

Cases 

AK FortySeven Records Ltd. Co. v. Bah. Ministry of Tourism, No. 4:17-cv-3750, 

 2018 U.S. Dist. LEXIS 66105 (S.D. Tex. Apr. 19, 2018) .................................................16 

Allen v. Hines Ranches of Texas, Inc., No. 03-03-00167-CV, 2003 Tex. App. LEXIS 10332 

 (Tex. App. Dec. 11, 2003) ...................................................................................................7

Ashcroft v. Iqbal, 556 U.S. 662 (2009) ............................................................................................2 

Bank of Naperville v. Holz, 86 Ill.App.3d 533 (2nd Dist. 1980). ..................................................22 

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) .................................................................2, 3 

In re Bunzl USA, Inc., 155 S.W.3d 202 (Tex. App. 2004)...............................................................5

Carlson v. CSX Transp., Inc., 758 F.3d 819 (7th Cir. 2014) ...........................................................2 

Consolidated Chassis Management LLC v. Northland Insurance Co., No. 1-19-cv-05287, 2020 

U.S. Dist. LEXIS 197520 (N.D. Ill. Oct. 23, 2020) .........................................................................2 

Contract Office Installations, Inc. v. Hollman, Inc., No. 1:17 CV 3729, 2017 U.S. Dist. LEXIS 

194863 (N.D. Ill. Nov. 28, 2017) .....................................................................................................8 

Custom Vehicles, Inc. v. Forest River, Inc., 464 F.3d 725, 727 (7th Cir. 2006)............................25 

Duran v. Bar-S Foods Co., No. H-15-0788, 2015 U.S. Dist. LEXIS 192675 

 (S.D. Tex. Oct. 27, 2015), ........................................................................................................12 

Eagle Air Transp., Inc. v. Nat'l Aerotech Aviation Delaware, Inc., 75 F. Supp. 3d 883 

 (N.D. Ill. 2014).............................................................................................................23, 24 

Entm't Merch. Tech., L.L.C. v. Houchin, 720 F. Supp. 2d 792 (N.D. Tex. 2010) .........................15 

Faulkenberg v. CB Tax Franchise Systems, LP, 637 F.3d 801 (7th Cir. 2011) ...........................6, 8

Fulcrum Credit Partners LLC v. ChipMOS Technologies Inc., No. A-10-CA-060-SS, 

 2010 U.S. Dist. LEXIS 151708 (W.D. Tex. Mar. 29, 2010) ...................................................16 

Gadsen v. Home Pres. Co., 2004 Del. Ch. LEXIS 14 (February 20, 2004) ..................................25 

Gallardo v. Scott Byron & Co., No. 12-cv-7202, 2014 U.S. Dist. LEXIS 4634 

 (N.D. Ill. Jan. 14, 2014) ...........................................................................................................14 

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General Electric Credit Auto Lease, Inc. v. Jankuski, 1988 Ill. App. LEXIS 1717 

 (1st Dist. December 12, 1988) ............................................................................................21, 22 

Grane v. Grane, 130 Ill. App. 3d 332, 473 N.E.2d 1366 (2nd Dist. 1985) ...................................21 

Graue Mill Development Corp. v. Colonial Bank & Trust Co., 927 F.2d 988 (7th Cir. 1991) .....12 

Henry Schein, Inc. v. Archer & White Sales, Inc., ___U.S.___ , ___, 139 S. Ct. 524 (2019) .........3 

Hubbert v. Dell Corp., 359 Ill. App. 3d 976, 835 N.E.2d 113 (5th Dist. 2005) ..............................3 

Johnson v. Structured Asset Services, LLC, 148 S.W.3d 711 (Tex. App. 2004) .............................7

LaScola v. US Sprint Communications, 946 F.2d 559 (7th Cir. 1991) ..........................................16 

Lee v. Hasson, 286 S.W.3d 1 (Tex. App. 2007) ............................................................................15 

Lewis v. Abernathy, 2016 U.S. Dist. LEXIS 89113 (N.D. Ind. July 11, 2016) .............................26 

Manuel v. Lucenti, No. 04-C-2531, 2004 U.S. Dist. LEXIS 23102 (N.D. Ill. Nov. 10, 2004) .....25 

Marzano v. Proficio Mortgage Ventures, LLC, 942 F. Supp. 2d 781 (N.D. Ill. 2013) ....................6 

Maxwell v. Vertical Networks, Inc., No. 03 C 5715, 2005 U.S. Dist. LEXIS 7619 

 (N.D. Ill. Mar. 18, 2005) ..........................................................................................................13 

Medline Indus. Inc. v. Maersk Med. Ltd., 230 F. Supp. 2d 857, 863 (N.D. Ill. 2002) ...................21 

Miller v. Miller, 700 S.W.2d 941 (Tex. App.—Dallas 1985, writ ref’d n.r.e.) .............................15 

Miller v. Riata Cadillac Co., 517 S.W.2d 773, 18 Tex. Sup. Ct. J. 144 (1974) ............................12 

Morris v. IBM, No. 1:18-CV-0042-LY, 2018 U.S. Dist. LEXIS 222568 

 (W.D. Tex. Nov. 29, 2018) .....................................................................................................11 

Morris v. Mergenthaler, 1980 Del. Ch. LEXIS 546 (Del. Ch. October 14, 1980) ........................25 

Mowbray v. Avery, 76 S.W.3d 663 (Tex. App. 2002) ...................................................................15 

National Union Fire Insurance Co. v. John Zink Co., No. 13-08-00589-CV, 2010 Tex. App. 

 LEXIS 9013 (Tex. App. Nov. 10, 2010)................................................................................6, 7 

Next Payment Solutions, Inc. v. CLEAResult Consulting, Inc., No. 17 C 8829, 2018 U.S. Dist. 

LEXIS 129374 (N.D. Ill. July 31, 2018)....................................................................................8, 21

Provision Group, Inc. v. Crown Toxicology, Ltd., No. 5:16-CV-1291-DAE, 2017 U.S. Dist. 

Case: 1:20-cv-04657 Document #: 31 Filed: 11/10/20 Page 4 of 34 PageID #:257
iv 

 LEXIS 226644 (W.D. Tex. Oct. 19, 2017) ..............................................................................12 

Ragan v. BP Products North America, No. 1:17 C 9208, 2020 U.S. Dist. LEXIS 4196 

 (N.D. Ill. Jan. 10, 2020) ...........................................................................................................14 

Safeco Insurance Co. of America v. Clear Vision Windshield Repair, LLC, 564 S.W.3d 913 

 (Tex. App. 2018) ........................................................................................................................7 

Salisbury v. Chapman Realty, 124 Ill. App. 3d 1057 (3d Dist. 1984) ...........................................21 

Schultz v. Sallie Mae, Inc., No. 99 C 3613, 1999 U.S. Dist. LEXIS 16870 

 (N.D. Ill. Oct. 27, 1999) .....................................................................................................11, 12 

Sembos v. Philips Components, 376 F.3d 696 (7th Cir. 2004) ................................................17, 18 

Shaw Equipment Co. v. Hoople Jordan Construction Co., 428 S.W.2d 835 

 (Tex. Civ. App. 1968) ................................................................................................................7 

Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 434-35 (Tex. 1986) .......................................21 

Stamatakis Industries, Inc. v. King, 165 Ill.App.3d 879 (1st Dist. 1987) .......................................21 

Sullivan v. Leor Energy LLC, 600 F.3d 542 (5th Cir. 2010) .........................................................16 

Suncraft Technologies, Inc. v. Zirkon Druckmaschinen GmbH, No. 99 C 1456, 2000 U.S. Dist. 

 LEXIS 3228 (N.D. Ill. Mar. 9, 2000).......................................................................................12 

Sun Life Assurance Co. of Can. v. Great Lakes Bus. Credit LLC, 968 F. Supp. 2d 898 

 (N.D. Ill. 2013).........................................................................................................................26 

Tidwell v. Toyota Auto Mart, Inc., 59 Ill. App. 3d 378, 375 N.E.2d 540 (2nd Dist. 1978) ...........12 

Tuck v. Miller, 483 S.W.2d 898 (Tex. Civ. App.—Austin 1972, writ ref’d n.r.e.) .......................15 

Vejara v. Levior Int’l LLC, No. 04-11-00595-CV, 2012 Tex. App. LEXIS 8975 

 (Tex. App.—San Antonio Oct. 31, 2012, pet. denied) ............................................................15 

VPHI, Inc. v. National Educ. Training Group, 1995 U.S. Dist. LEXIS 1365 

 (N.D. Ill. January 20, 1995) ...............................................................................................25, 26 

Wartsila Fin. OY v. Duke Capital LLC, No. H-06-3908, 2007 U.S. Dist. LEXIS 57699 

 (S.D. Tex. Aug. 8, 2007) ..........................................................................................................12 

Watts v. ADDO Management, L.L.C., 2018 IL App (1st) 170201, 97 N.E.3d 75 .........................13 

Weydert Homes, Inc. v. Kammes, 395 Ill. App. 3d 512, 917 N.E.2d 64 (2nd Dist. 2009) ............16 

Case: 1:20-cv-04657 Document #: 31 Filed: 11/10/20 Page 5 of 34 PageID #:258
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Weyent v. Vertical Networks, Inc., 2004 U.S. Dist. LEXIS 1354 (N.D. Ill. February 4, 2004) ....13 

Willis v. Donnelly, 199 S.W.3d 262 (Tex. 2006) ...........................................................................15 

Other Authorities 

Fed. R. Civ. P. 12(f). ......................................................................................................................25 

705 ILCS 225/1 ..............................................................................................................................27 

Illinois Wage Payment and Collection Act, 820 ILCS 115/1 ........................................................12 

Illinois Wage Payment and Collection Act, 820 ILCS 115/13 ......................................................24 

Illinois Wage Payment and Collection Act, 820 ILCS 115/14 ......................................................27 

56 Ill. Adm. Code 300.440(d) (2014) ............................................................................................13 

56 Ill. Adm. Code 300.450 (2014) .................................................................................................14 

Del. Code Ann. tit. 6, § 18-303 (1994) ..........................................................................................24 

Tex. Civ. Prac. & Rem. Code § 38.001 .........................................................................................27 

 

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Ryan L. Aprill (“Ryan”) and Thomas S. Aprill (“Tom”) (collectively “Plaintiffs”), by and 

through their attorneys, submit their response to the motion of Anthony Aquila (“Aquila”), Aquila 

Family Ventures, LLC, AFV Partners LLC, AFV Management Advisors LLC and AFV Partners 

Co-Investment I LLC (collectively “Defendants”), to dismiss the complaint with prejudice 

pursuant to Federal Rules of Civil procedure 12(b)(3), 12(b)(6), and 9(b), and to strike certain 

allegations pursuant to Rule 12(f). 

INTRODUCTION 

This is a case in which the Plaintiffs were actively recruited and lured by Defendant Aquila 

to leave their jobs based on false promises of compensation and benefits. As detailed in the 

Complaint (and purposefully ignored by Defendants), Aquila enticed Plaintiffs away from their 

lucrative careers to join him in developing a new private equity fund with promises of executivelevel compensation, including significant salaries, bonus payments, and equity interests in various 

investment vehicles commonly known as “carried interest.” Despite accepting the benefits of the 

Plaintiffs’ services, Aquila wrongfully and intentionally failed to pay Plaintiffs even a dime of the 

promised compensation over the course of nearly a year of employment. Moreover, after reneging 

on payment of promised compensation after Plaintiffs were lured to leave their former jobs in 

reliance on Aquila’s illusory promises, Aquila compelled Plaintiffs to enter into a series of 

Promissory Notes that were purportedly secured by equity interests; those interests were never 

awarded, and the notes were merely a scheme by Aquila to create leverage over the Plaintiffs. 

Aquila deliberately failed to pay Ryan and Tom the compensation they were owed and 

purposefully delayed finalizing and signing the carried interest documents reflecting his promises, 

instead using a variety of excuses and tactics to avoid paying the Plaintiffs the fair and promised 

compensation for their significant and valuable work. Aquila also refused to pay other employees 

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and professionals, and engaged in improper business practices, such as using investor funds on his 

private airplane. After working tirelessly for almost a year without any compensation whatsoever 

and observing Aquila’s oppressive and unscrupulous behavior, Ryan and Tom ultimately retained 

legal counsel who demanded that Aquila pay what he owed and honor his agreements. In response 

and in retaliation, Aquila fired Ryan and Tom without cause. In the end, Plaintiffs were duped by 

Aquila, who touted himself as a “dealmaker” and the founder of Solera Group, a huge success 

story. In truth, Aquila was terminated from Solera for cause. Aquila is nothing but a professional 

con man, and Plaintiffs are his latest victims. 

Plaintiffs filed this action to recover what they are owed. Defendants move to dismiss all 

of Plaintiffs’ claims, contending that Ryan’s claims must be arbitrated in Texas, and that every 

cause of action fails to state a valid claim. As discussed below, Defendants have not and cannot 

meet their burden of establishing that a valid arbitration agreement exists. Additionally, 

Defendants utterly ignore the detailed facts alleged in the Complaint which defeat their arguments. 

For the reasons set forth below, Defendants’ Motion to Dismiss should be denied in its entirety. 

LEGAL STANDARD 

A motion to dismiss should be granted only if it appears beyond doubt that the plaintiff can 

prove no set of facts that would entitle him to relief. Consolidated Chassis Management LLC v. 

Northland Insurance Co., No. 1-19-cv-05287, 2020 U.S. Dist. LEXIS 197520, at *2 (N.D. Ill. Oct. 

23, 2020). In ruling on a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the 

court must construe the plaintiff’s complaint “in the light most favorable to the plaintiff, accept 

well pleaded facts as true, and draw all inferences in the plaintiff's favor.” Carlson v. CSX Transp., 

Inc., 758 F.3d 819, 826 (7th Cir. 2014). The court must determine whether the plaintiff’s complaint 

“contain[s] sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on 

its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly,

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550 U.S. 544, 570 (2007)). A claim is plausible on its face “when the plaintiff pleads factual 

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

misconduct alleged.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556). 

ARGUMENT 

I. Defendants Have Failed To Meet Their Burden of Establishing The Existence of 

a Valid Arbitration Agreement. 

Defendants initially contend that Ryan’s claims must be arbitrated in Texas, while Tom’s 

claims should be adjudicated by this Court. (Motion. at p. 6).1

 This argument is plainly wrong. 

There is no valid arbitration agreement. See Henry Schein, Inc. v. Archer & White Sales, Inc., 

___U.S.___ , ___, 139 S. Ct. 524, 530 (2019) (“[B]efore referring a dispute to an arbitrator, the 

court determines whether a valid arbitration agreement exists.”). “The party seeking to compel 

arbitration has the burden of proving that an arbitration agreement exists and that the claims raised 

are within the agreement's scope.” Hubbert v. Dell Corp., 359 Ill. App. 3d 976, 983, 835 N.E.2d 

113, 121 (5th Dist. 2005). Defendants have failed to meet their burden of proving as a matter of 

law that an agreement ever existed, and their motion to dismiss and compel arbitration can and 

should be denied for this reason alone. 

A. There Is No Valid Arbitration Agreement with Ryan.

The facts are that: (1) the parties accepted the terms of employment contained in a markedup, unsigned offer letter exchanged by email between Ryan and the AVF Ventures CFO (Compl. 

¶38) (the “Unsigned Offer Letter”); (2) the Unsigned Offer Letter states that the parties “shall 

execute” an arbitration agreement (Motion at Ex. B); (3) the Unsigned Offer Letter was never 

signed by Aquila or tendered by Defendants to Ryan for signature (Compl. ¶39); and (4) the Mutual 

Arbitration Agreement was never signed by either party. (Motion Ex. C). 

 

1 Defendants’ Motion and Memorandum of Law incorporated therein are collectively referred to as “Motion.”

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In their Motion, Defendants summarily argue in a single paragraph, without analysis or 

explanation, that the parties entered into an arbitration agreement. They conclude that “the Offer 

Letter, alleged by Ryan to be the operative contract, incorporates an arbitration agreement, which 

provides that ‘all disputes and claims’ between the parties ‘shall be determined exclusively by final 

and binding arbitration before a single, neutral arbitrator’ in Dallas, Texas.” (Motion at p. 6). 

Defendants attach to their Motion to Dismiss the unsigned Offer Letter (Exhibit B) and an unsigned 

“Mutual Arbitration Agreement” which makes no reference to the Offer Letter (Exhibit C). 

Defendants’ bald statement that there is an arbitration agreement “incorporated” into the 

Unsigned Offer Letter is simply not true. No support for that position can be found in the Unsigned 

Offer Letter or the unsigned Mutual Arbitration Agreement, as a matter of law. In fact, the only 

mention of arbitration in the Unsigned Offer Letter is that both Ryan and AFV “shall execute the 

arbitration agreement set forth in Exhibit B” (Motion Ex. B, ¶7), which was never tendered for 

signature by Defendants or executed by either party (Compl. ¶39). Quite clearly, based on the 

language in the Unsigned Offer Letter discussing “execution” of a written agreement, and on the 

unsigned “Mutual Arbitration Agreement” itself, the parties contemplated that any arbitration 

agreement would be in writing and would be distinct from the Unsigned Offer Letter itself. It is 

indisputable that there is no written arbitration agreement between the parties. 

 Defendants conspicuously avoid any mention of the terms of the Unsigned Offer Letter, 

likely because the Unsigned Offer Letter does not state or in any way suggest that the unsigned 

“arbitration agreement” is incorporated or, significantly, that Ryan’s employment was subject to 

or contingent upon execution of the arbitration agreement. Instead, the opposite is true. The 

Unsigned Offer Letter specifically identifies two conditions precedent to Ryan’s employment, and 

arbitration is not one of them. Specifically, the Unsigned Offer Letter provides that a 

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confidentiality agreement in the form of “Exhibit A” must be signed by Ryan “as a condition of 

[his] employment.” (Motion Ex. B at ¶3.). And, the terms of the confidentiality agreement are 

expressly incorporated into the Unsigned Offer Letter. (Id.) Ryan’s employment was also 

expressly “contingent upon” a background check (Id. ¶9). Unlike the confidentiality agreement 

and background check, Ryan’s employment was not conditioned upon an arbitration agreement, a 

reality plainly demonstrated by the fact that Ryan worked for almost one year, providing valuable 

services to Defendants, without an arbitration agreement ever being tendered to him and without 

it being executed by either party. The parties never actually agreed to arbitrate, either during the 

entire course of Ryan’s employment or afterwards. 

Moreover, not only does the Unsigned Offer Letter require that the parties “execute” the 

written arbitration agreement for that agreement to become effective, which never happened, the 

unsigned arbitration agreement itself also provides that it does not become effective until it is 

signed (Motion Ex. C; at ¶7) (“By signing this Agreement, Employee acknowledges that he or she 

is knowingly and voluntarily waiving the right to file a lawsuit....”). An arbitration agreement 

simply was not reached where neither party signed the document, and both the Unsigned Offer 

Letter and alleged arbitration agreement’s own language require a signed written agreement to be 

effective. In re Bunzl USA, Inc., 155 S.W.3d 202, 209 (Tex. App. 2004) (“[T]he parties may 

provide that the signature of each party is a prerequisite to a binding written contract). 

Defendants do not even attempt to explain how they get from “Point A”, evidence of an 

agreement by the parties to each execute a written arbitration agreement that was not tendered by 

Defendants or executed by either party during Ryan’s employment that on its face requires Ryan’s 

signature to be operative and was not a condition of employment, to “Point B”, their conclusion 

that there was a binding arbitration agreement. They have avoided any discussion of the facts, and 

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the law presented in their Motion is sparce and plainly inapplicable. They cite to Faulkenberg v. 

CB Tax Franchise Systems, LP, 637 F.3d 801, 808-09 (7th Cir. 2011) and Marzano v. Proficio 

Mortgage Ventures, LLC, 942 F. Supp. 2d 781, 788-89 (N.D. Ill. 2013), despite Faulkenberg

involving a signed arbitration agreement, and Marzano, too, involving circumstances where 

“plaintiffs [did] not contest the validity of the arbitration provision.” Marzano, 942 F. Supp. 2d 

781, 788-789. Neither of these cases provides any authority for this Court to find that the parties 

entered into a valid agreement to arbitrate in the first instance. To the extent that Defendants will 

argue for the first time in reply that Ryan was somehow obligated to execute the arbitration 

agreement, such an assertion is woefully untimely (see Sec. I(B), below) and would, in any event, 

merely serve as a (losing) claim that Ryan breached the Unsigned Offer Letter, not that a binding 

arbitration agreement was ever reached. Defendants have utterly failed to meet their burden of 

proving as a matter of law that a valid arbitration agreement exists between the parties. 

B. Any Obligation To Execute The Arbitration Agreement Was Excused Or 

Waived. 

Even assuming arguendo that the parties’ agreement to execute a written arbitration 

agreement was a condition of Ryan’s employment and obligated him to execute the arbitration 

agreement after his termination, which is unsupportable both as a matter of law and as-applied 

given the facts set forth above, Defendants’ Motion to Dismiss and Compel Arbitration should 

nevertheless be denied. Because Defendants did not sign the arbitration agreement and never 

tendered the agreement, Ryan was excused from any obligation to execute the arbitration 

agreement. “The failure of a condition in a contract is excused when the party for whom the 

condition was intended to benefit, with knowledge of the failure of the condition, accepts 

performance of the contract without insisting on satisfaction of the condition.” National Union 

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Fire Insurance Co. v. John Zink Co., No. 13-08-00589-CV, 2010 Tex. App. LEXIS 9013, at *44-

47 (Tex. App. Nov. 10, 2010).

Relatedly, it is well-established that contractual rights can be waived, and that “a party’s 

silence or inaction for a period of time long enough to show an intention to yield the known right 

... is enough to prove a waiver.” Johnson v. Structured Asset Services, LLC, 148 S.W.3d 711, 722 

(Tex. App. 2004). In Johnson, the court found waiver after a failure to object to an alleged violation 

of the contract for a period of 11 months. Id. at 724-725. And in Safeco Insurance Co. of America 

v. Clear Vision Windshield Repair, LLC, 564 S.W.3d 913, 921 (Tex. App. 2018), the court found 

that silence for a period of only 6 months was sufficient to demonstrate waiver. Even under the 

terms most generous to the Defendants, they had over a year between the hiring of Ryan and his 

ultimate and unjust firing to take any action in furtherance of executing the arbitration agreement. 

Instead, Defendants did nothing. 

The issue of whether any obligation to execute the arbitration agreement was excused or 

waived is generally a question of fact unless, as here, the facts are indisputable. Shaw Equipment 

Co. v. Hoople Jordan Construction Co., 428 S.W.2d 835, 840 (Tex. Civ. App. 1968). Notably, the 

Unsigned Offer Letter does not contain a non-waiver provision. See Allen v. Hines Ranches of 

Texas, Inc., No. 03-03-00167-CV, 2003 Tex. App. LEXIS 10332, at *5-6 (Tex. App. Dec. 11, 

2003) (finding waiver in the absence of an unambiguous non-waiver clause). Under these 

circumstances—Defendants’ failure to execute the arbitration agreement or tender the agreement 

to Ryan for his execution, Defendants’ delay for over one year (until after Ryan’s employment had 

been terminated) to take any action reflecting an intention to enforce any obligation to execute the 

arbitration agreement, and the parties’ decision to not include a non-waiver provision—any 

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obligation or right to enforce an execution of the arbitration agreement is waived as a matter of 

law. 

II. Each Cause of Action is Properly Stated.2

A. Defendants Purposefully Ignore the Facts Alleged in the Complaint. 

In arguing that each cause of action in the Complaint fails to state a claim, Defendants 

completely ignore significant allegations of fact, and at numerous times improperly seek to 

contradict the facts. For example, as it relates to Ryan, Defendants seek to perpetuate a falsehood 

that Ryan pursued Aquila because he was searching for a “golden ticket.” (Motion at p. 1). In truth, 

Aquila actively recruited Ryan for months, beginning in April 2019, and enticed him with (false) 

promises to leave his lucrative job (Compl. ¶¶23, 32-36). And, as it turns out, the relationship with 

Aquila was actually not worth a plugged nickel, as Aquila reneged on his promises and deceived 

and manipulated Ryan and Tom to work for free for almost one year while purportedly becoming 

indebteded to him. 

As to Ryan, a contract was formed on August 5, 2019 entitling him to salary, bonus, and 

carried interest. (Compl. ¶38). On October 31, 2019, Aquila specifically set the amount of salary, 

bonus, and carried interest (as evidenced by subsequent written budgets for the company), accepted 

the benefits of Plaintiffs’ valuable services, had carried interest papers drawn up reflecting the 

 

2

 The Plaintiffs do not dispute that the Offer Letter designates that Texas law shall apply to “the rights and obligations 

of the parties,” and therefore agree that Texas law governs the breach of contract claims and fiduciary duty claim in 

this dispute (Counts I, III, and IX). In Illinois, the law applicable to a contract is that which the parties intended; in 

this case, Texas law. Faulkenberg v. CB Tax Franchise Systems, LP, 637 F.3d 801, 809 (7th Cir. 2011). Moreover, 

Illinois and Texas do not differ as to their analysis of contract formation principles (Id.), and the same is true regarding 

“substantive contract law principles.” Contract Office Installations, Inc. v. Hollman, Inc., No. 1:17 CV 3729, 2017 

U.S. Dist. LEXIS 194863, at *19 (N.D. Ill. Nov. 28, 2017). As to the remaining quasi-contract, extra-contractual, and 

state law claims, (Counts II, IV, V, VI, VII, VIII, X, XI, XII, XIII, and XIV), Illinois law applies as the law of the 

forum state when neither party raises or establishes any conflict. Next Payment Solutions, Inc. v. CLEAResult 

Consulting, Inc., No. 17 C 8829, 2018 U.S. Dist. LEXIS 129374, at *17 (N.D. Ill. July 31, 2018). The Defendants do 

not dispute that Illinois law applies to these claims, and have otherwise failed to establish any conflict. Motion at p. 

16, fn 14.

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parties’ agreement (but kept pushing off signing them while reassuing Plaintiffs of his intent to do 

so), and then refused to honor his promises. Defendants’ arguments assume that time stood still on 

August 5, 2019. They completely ignore all that followed, including the parties’ course of 

performance. There is no legal basis to ignore the facts alleged in the complaint, and Defendants 

offer none. 

Defendants disregard the specific allegations establishing the agreements between the 

parties. The allegations set forth a detailed timeline demonstrating Aquila’s false promises and 

assurances and Defendants’ obligation to pay salary, bonus, and a percentage of carried interest. 

Defendants also ignore the fact that Aquila agreed to use the 2018 Heidrick & Struggles (“H&S”) 

compensation report and methodology as the basis for establishing Ryan’s total compensation, and 

that Ryan would be paid commensurate with that of a “Principal” for a fund size of $500M - 

$749M as set forth in the H&S report. Based on that report, Aquila agreed that Ryan’s annual 

salary would be set at $236,000, annual bonus at $234,000, and his carried interest allocation 

would be valued at $4,612,000, subject to future appreciation based on investment performance. 

(Compl. at ¶56). 

Defendants also ignore the other specific allegations in the complaint regarding Aqulia’s 

initial job offer to Ryan (Compl. at ¶36); the fact that Ryan was only willing to leave his 

employment at Chaifetz Group if he was granted a carried interest (Compl. at ¶36); the fact that 

Aquila promised to formalize the terms of any loans and the carried interest vehicle (Compl. ¶¶43-

44); the specific terms of the proposed Carried Interest Documents (Compl. ¶¶45-52); the fact that 

Ryan’s promised compensation and carried interest were reflected in the companies’ budgets 

(Compl. at ¶58); the fact that Ryan’s willingness to execute the Promissory Notes was based on 

representations that Aquila would execute the Carried Interest Documents and his loans would be 

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secured by his equity interest (Compl. at ¶58); the fact that Aquila promised to contribute AFV 

Partners’ interest in Sportradar and APG to FSCP Co-Investment (Compl. at ¶¶47, 61, 80, 127); 

and finally the promises by Aquila that he would satisfy the promised compensation and carried 

interests. (Compl. at ¶70). 

Defendants also completely ignore numerous factual allegations supporting Tom’s claims. 

Plaintiffs allege that Aquila offered Tom a full-time position as the head of Human Resources for 

AFV Partners and its other companies at an annual salary of $164,000, an annual bonus of 

$155,000, and a carried interest allocation with a value of approximately $1.5 million. (Compl. ¶ 

93); in reliance on Aquila’s offer of employment with AFV Partners, Tom resigned his position as 

a partner with DHR International (Compl. ¶94); Tom worked on average over 80 hours per week 

(Compl. ¶95); after starting his employment, Tom was informed that payment of his salary would 

be deferred and that he would need to sign a Promissory Note in order to receive any payment 

from AFV Partners (Compl. ¶96); Tom was assured that the loan proceeds would be treated as an 

advance on his carried interest and that “Tony would take care of [him].” Id.; between November 

25, 2019 and June 2020, Tom continued to work for AFV Partners and, despite repeated promises 

to pay owed compensation by Aquila, AFV Partners never paid any salary or bonuses to Tom and 

Aquila failed to execute the Carried Interest Documents (Compl. ¶98); on May 29, 2020, Tom sent 

a demand letter, through his attorney, to Aquila and AFV Partners for payment of cash 

compensation and his carried interest (Compl. ¶99); and in response, on June 2, 2020, Aquila 

terminated Tom’s employment without cause (Compl. ¶100). 

B. The Plaintiffs State Valid Claims for Breach of Contract. 

Defendants argue that Ryan fails to state a breach of contract claim in Count I because the 

Unsigned Offer Letter authorizes Aquila to determine the amount of Ryan’s bonus and carried 

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interest. (Motion at p. 8). While it is true that Ryan’s “Initial Compensation” is set forth in the 

Unsigned Offer Letter and allows Aquila to determine Ryan’s bonus and carried interest (Motion

Ex. B, ¶1), Defendants completely ignore the allegations stating that Aquila did in fact make those 

determinations. Plaintiffs allege that on October 31, 2019, Aquila set Ryan’s bonus and carried 

interest at a level commensurate with that of a “Principal” for a fund size of $500M - $749M as 

set forth in the H&S report which equates to an annual salary of $236,000, annual bonus at 

$234,000 and his carried interest allocation would be valued at $4,612,000, subject to future 

appreciation based on investment performance. (Compl. at ¶56). As proof of Aquila’s 

determinations, those figures are reflected in AFV’s budgets. (Compl. at ¶57). Defendants likewise 

ignore the allegations in support of Tom’s breach of contract claim in Count IX that Aquila offered 

Tom an annual salary of $164,000, an annual bonus of $155,000, and a carried interest allocation 

with a value of approximately $1.5 million. (Compl. at ¶¶93, 237). No offer letter was ever 

tendered to Tom, despite Defendants’ reference to “the draft contribution documents.” (Motion at 

p. 14). The salaries, bonuses and carried interests set by Aquila have not been paid—in breach of 

both Ryan and Tom’s employment agreements. 

Defendants argue that discretionary bonuses cannot form the basis for a breach of 

employment or contract claim as a matter of law, citing Morris v. IBM, No. 1:18-CV-0042-LY, 

2018 U.S. Dist. LEXIS 222568, at *9 (W.D. Tex. Nov. 29, 2018). But in Morris, the court found 

that the plaintiff had failed to allege facts that demonstrated a mutual intent to award the bonus 

compensation. Id. Here, the Plaintiffs allege such facts – the Complaint alleges mutual assent to 

specific salaries, bonuses, and carried interest compensation. (Compl. ¶¶ 56, 93, and 237). Morris

is thus inapposite to the actual issues here, and none of the other cases cited by Defendants fare 

any better. See Schultz v. Sallie Mae, Inc., No. 99 C 3613, 1999 U.S. Dist. LEXIS 16870, at *5-7 

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(N.D. Ill. Oct. 27, 1999) (company “retained discretion to terminate the bonus plan at any time,” 

given that the company expressly retained the flexibility to “modify award calculation and 

distribution dates at any time, for any reason.”); Graue Mill Development Corp. v. Colonial Bank 

& Trust Co., 927 F.2d 988, 991 (7th Cir. 1991) (the terms of a contract offered a conditional 

kickback for which the condition was not satisfied); Provision Group, Inc. v. Crown Toxicology, 

Ltd., No. 5:16-CV-1291-DAE, 2017 U.S. Dist. LEXIS 226644, at *8 (W.D. Tex. Oct. 19, 2017) 

(pleading lacked definite terms, especially rates to be paid); Wartsila Fin. OY v. Duke Capital 

LLC, No. H-06-3908, 2007 U.S. Dist. LEXIS 57699, at *10 (S.D. Tex. Aug. 8, 2007) (crossmotions relating to the enforceability of an arbitration award; summary judgment for plaintiff 

denied as premature). 

The Defendants also assert that the Unsigned Offer Letter invalidates the Plaintiffs’ claims 

for bonus compensation because the Letter contains a merger clause. They cite Suncraft 

Technologies, Inc. v. Zirkon Druckmaschinen GmbH, No. 99 C 1456, 2000 U.S. Dist. LEXIS 3228, 

at *19-20 (N.D. Ill. Mar. 9, 2000) and Duran v. Bar-S Foods Co., No. H-15-0788, 2015 U.S. Dist. 

LEXIS 192675, at *11-13 (S.D. Tex. Oct. 27, 2015), which involved a written contract that 

superseded prior offers or agreements. However, in both Illinois and Texas, where a bonus is 

agreed upon, an employee is entitled to that bonus. See Tidwell v. Toyota Auto Mart, Inc., 59 Ill. 

App. 3d 378, 380-81, 375 N.E.2d 540, 542 (2nd Dist. 1978); Miller v. Riata Cadillac Co., 517 

S.W.2d 773, 775, 18 Tex. Sup. Ct. J. 144 (1974). While the Unsigned Offer Letter does state that 

it “supersedes all prior offers, negotiations, and agreements” (Motion, Ex. B), it does not preclude 

subsequent agreements, nor does it preclude the actual exercise of discretion alleged by both Ryan 

and Tom in the Complaint. (Compl. ¶¶ 56, 93). 

C. Out of State Employers are Subject to the Illinois Wage Payment and 

Collection Act. 

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The Defendants seek dismissal of Counts II and X on the basis that Ryan and Tom cannot 

sue under the Illinois Wage Payment and Collection Act (820 ILCS 115/1 et seq. (“IWPCA”)) 

because the Defendants were not Illinois employers, citing Maxwell v. Vertical Networks, Inc., No. 

03 C 5715, 2005 U.S. Dist. LEXIS 7619, at *30 (N.D. Ill. Mar. 18, 2005). However, the relevant 

regulations were amended in 2014, and subsequent cases have clarified that “the Wage Act's 

application is not limited to any specific quantum of work performed in Illinois but, in fact, may 

apply in certain circumstances even where all of the work is performed outside of this state.” Watts 

v. ADDO Management, L.L.C., 2018 IL App (1st) 170201, ¶¶ 20-21, 97 N.E.3d 75 (“purpose is to 

protect employees in Illinois from being stiffed by their employers.”) See also 56 Ill. Adm. Code 

300.440(d) (2014). 

The Plaintiffs allege specifically that “on August 7, 2019, Ryan commenced his formal 

employment with AFV Partners and established a home office in Chicago, Illinois, which became 

his primary workplace.” (Compl. ¶ 41). Therefore, under the 2014-amended regulations and Watts, 

the Defendants are properly designated as “employers” for purposes of claims brought under the 

IWPCA. Similarly, Plaintiffs allege Tom was an Illinois resident, and was employed full-time for 

AFV Partners. (Compl. ¶¶6, 98). Both Ryan and Tom have therefore alleged valid claims under 

the IWPCA.3

 Additionally, the question of whether Defendants are Illinois employers is a question 

of fact which cannot be decided in connection with a motion to dismiss. Weyent v. Vertical 

Networks, Inc., 2004 U.S. Dist. LEXIS 1354*7 (N.D. Ill. February 4, 2004). 

The Defendants also argue that Ryan and Tom cannot sue under the IWPCA because “the 

statute does not confer rights to compensation that are absent from the employee’s contract,” citing 

 

3

 Additionally, Plaintffs’ can easily establish that post-termination payments received by Ryan and Tom alleged in 

the complaint (Compl. ¶¶136, 266) were both subject to Illinois withholding. 

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Gallardo v. Scott Byron & Co., No. 12-cv-7202, 2014 U.S. Dist. LEXIS 4634, at *51 (N.D. Ill. 

Jan. 14, 2014). Again, the Plaintiffs’ salaries, bonuses, and carried interest allocations were 

determined (Compl. ¶¶ 56, 93), which is enforceable under the IWPCA. “An agreement is broader 

than a contract and an exchange of promises or any exchange is not required for an agreement to 

be in effect. An agreement may be reached by the parties without the formalities and accompanying 

legal protections of a contract and may be manifested by words or by any other conduct, such as 

past practice.” 56 Ill. Adm. Code 300.450. 

Ryan and Tom are entitled to the compensation they earned, including the bonuses and 

carried interest compensation. “An employee has a right to an earned bonus when there is an 

unequivocal promise by the employer and the employee has performed the requirements set forth 

in the bonus agreement between the parties and all of the required conditions for receiving the 

bonus set forth in the bonus agreement have been met. Unless one of the conditions for the bonus 

is that the employee be on the payroll at the time of the bonus payout, the bonus is due and owing 

to the employee at the time of separation.” Ragan v. BP Products North America, No. 1:17 C 9208, 

2020 U.S. Dist. LEXIS 4196, at *8-9 (N.D. Ill. Jan. 10, 2020). 

D. Ryan Adequately States A Claim For Breach Of Fiduciary Duty. 

Defendants seek dismissal of Count III and assert that a fiduciary duty is not created solely 

by an employer-employee relationship. (Motion at p. 12). However, while accurate, that is not the 

claim that Ryan has asserted, as Aquila’s informal fiduciary duty arises under Texas law. Ryan’s 

relationship with Aquila existed before the employment began, during which Aquila made false 

promises and assurances to lure Ryan to leave a lucrative job (Compl. ¶¶32-36; 144-146). Aquila 

engaged in oppressive conduct as the sole controlling owner and manager of AFV, depriving Ryan 

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of any compensation whatsoever for over ten months of employment and forcing him to take out 

three loans because Aquila held his pay without any justification (Id. ¶¶154-155). 

Texas courts recognize that an informal fiduciary duty may exist in circumstances where, 

as here, a person abuses the trust of and exerts power over another. See generally Willis v. 

Donnelly, 199 S.W.3d 262, 277 (Tex. 2006); Lee v. Hasson, 286 S.W.3d 1, 14 (Tex. App. 2007) 

(“Stated another way, a party fails to comply with his fiduciary duty ‘where influence has been 

acquired and abused, and confidence has been reposed and betrayed.’”); Miller v. Miller, 700 

S.W.2d 941, 945-46 (Tex. App.—Dallas 1985, writ ref’d n.r.e.) (stating that shareholders’ intimate 

knowledge of company’s affairs supported finding a fiduciary relationship); Tuck v. Miller, 483 

S.W.2d 898, 905 (Tex. Civ. App.—Austin 1972, writ ref’d n.r.e.) (op. on reh’g) (holding that 

superior business expertise, among other factors, supported a finding of a confidential 

relationship); Vejara v. Levior Int’l LLC, No. 04-11-00595-CV, 2012 Tex. App. LEXIS 8975, at 

*11 (Tex. App.—San Antonio Oct. 31, 2012, pet. denied) (mem. op.) (holding that “Vejara's 

control and intimate knowledge of the company's affairs and plans gave rise to the existence of an 

informal fiduciary duty to Levior”).

 The recognition of such a fiduciary relationship is “typically a question of fact.” Entm't 

Merch. Tech., L.L.C. v. Houchin, 720 F. Supp. 2d 792, 797 (N.D. Tex. 2010), which warrants 

denial of Defendants’ motion at this stage of the proceedings to allow a full development of the 

facts. 

E. Plaintiffs Have Adequately Stated A Claim For Unjust Enrichment. 

Defendants also seek dismissal of Counts VI and XII, incorrectly arguing that an unjust 

enrichment claim is not an independent cause of action under Texas law. They cite to Mowbray v. 

Avery, 76 S.W.3d 663, 679 (Tex. App. 2002), but blatantly ignore more recent case law directly to 

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the contrary, especially those cases that summarize the trends over time. “Although some Texas 

courts of appeals have held unjust enrichment is not a distinct independent cause of action but 

simply a theory of recovery, others have sharply disagreed. The Texas Supreme Court—although 

it has not definitively spoken on the issue—has suggested multiple times a cause of action for 

unjust enrichment does exist.” Fulcrum Credit Partners LLC v. ChipMOS Technologies Inc., No. 

A-10-CA-060-SS, 2010 U.S. Dist. LEXIS 151708, at *19 (W.D. Tex. Mar. 29, 2010) (internal 

citations omitted) (collecting cases). Defendants also cite to Sullivan v. Leor Energy LLC, 600 F.3d 

542, 550 (5th Cir. 2010), to argue that the Plaintiffs have not pled any facts to entitle them to relief; 

they ignore that the Complaint, as discussed above, includes detailed and specific allegations. 

These allegations are more than sufficient to plead a claim for unjust enrichment. The alleged oral 

employment agreements are sufficient to sustain these claims. See AK FortySeven Records Ltd. 

Co. v. Bah. Ministry of Tourism, No. 4:17-cv-3750, 2018 U.S. Dist. LEXIS 66105, at *7 (S.D. 

Tex. Apr. 19, 2018) (“the law does not require that plaintiffs plead affirmatively that a contract is 

written”).4

F. Breach of Covenant of Good Faith and Fair Dealing is Properly Pled. 

The Defendants argue that Ryan has failed to state a claim in Count IV for breach of the 

covenant of good faith and fair dealing, primarily asserting that no such cause of action exists, and 

alternatively that no implied covenant exists in at-will employment contracts. (Motion at p. 15). 

But while the Plaintiffs acknowledge there is no claim for good faith and dealing relating to the 

negotiation of contracts, a claim does exist – and is enforceable – where, as here, it pertains to the 

performance of contracts. “A cause of action for a breach of good faith may exist when it is 

 

4 Although the Defendants do not address whether Plaintiffs’ unjust enrichment claims can be brought under Illinois 

law, they surely can. Plaintiffs are permitted to plead unjust enrichment claims in the alternative. Weydert Homes, 

Inc. v. Kammes, 395 Ill. App. 3d 512, 522, 917 N.E.2d 64, 73 (2nd Dist. 2009). 

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predicated on a contract right with independent validity.” LaScola v. US Sprint Communications, 

946 F.2d 559, 566 (7th Cir. 1991). There can be no dispute that Plaintiffs are legally entitled to the 

performance of their contracts. 

The Defendants argue, with little explanation, that Ryan’s claims are invalid because he 

was an at-will employee and because no claim can be made under this theory if brought by an atwill employee. But the claim here is based upon the Defendants’ failure to perform the contract by 

terminating him without paying the agreed-upon salary, bonus, and carried interest allocations, not

for wrongful termination. Id. Here, based on the facts alleged in the complaint, Ryan was entitled 

to compensation that the Defendants refused to pay, and the Defendants terminated Ryan to avoid 

paying that agreed-upon compensation. Defendants’ arguments about at-will employment are 

inapposite and should be disregarded. 

Finally, any suggestion by the Defendants that Plaintiffs have alleged no damages should 

be rejected. The allegations in the Complaint are clear that the payments received by both Ryan 

and Tom after their termination were insufficient to compensate them for their earned salary, 

earned bonuses, and to compensate them for the value of their carried interest. (Compl. ¶¶136-137; 

¶¶260-261). 

G. Plaintiffs Have Adequately Stated A Claim For Promissory Estoppel. 

Counts V and XI of the complaint fully and adequately allege claims for promissory 

estoppel, in the alternative. Without citation or specificity, the Defendants assert that “Plaintiffs’ 

own allegations establish that any representation regarding an entitlement to carried interest or 

annual bonus were too indefinite, as a matter of law, to constitute unambiguous promises.” (Motion

at p. 16) (citing Sembos v. Philips Components, 376 F.3d 696, 704 (7th Cir. 2004)). Unlike in 

Sembos, where “Philips did not promise Sembos any specific position, salary, or other terms of 

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employment,” id., Plaintiffs’ Complaint specifically alleges the terms of the compensation they 

agreed to with the Defendants, including specific salaries, bonuses and carried interest. (Compl. 

¶¶56, 93, 182, 266). Defendants cannot simply ignore the well-pleaded facts that they find 

inconvenient. 

The allegations in the Complaint identify unambiguous promises and agreements to award 

the Plaintiffs specific salaries, bonuses, and carried interest. And because Plaintiffs allege that the 

parties mutually agreed to the compensation, it can hardly be argued that “reliance was not 

reasonable as a matter of law” (Motion at p. 17) as the Defendants claim. Finally, the Defendants’ 

argument that Plaintiffs have failed to plead reliance damages is baseless – the Complaint alleges 

that both Ryan and Tom relied upon promises made by Aquila over a period of months, both with 

regard to their oral employment offers, in relation to the agreed carried interest allocations, and in 

agreeing to execute the Promissory Notes. (Compl. ¶¶ 53, 56, 93, 96, 188, 270). Only by ignoring 

the well-pleaded allegations throughout the Complaint could the Defendants possibly argue that 

the Plaintiffs have failed to state a claim. 

H. Plaintiffs Have Adequately Alleged a Scheme To Defraud In Support of 

Fraudulent Inducement Claims. 

The fraudulent inducement claims in Counts VIII and XIII arise out of a series of 

intentionally false statements and misrepresentations made by Aquila as part of a scheme designed 

to wrongfully induce both Plaintiffs to leave lucrative careers and accept employment with 

Aquila’s investment fund AFV Partners. In Count VIII, Plaintiffs allege Aquila represented that 

he left Solera Group voluntarily to start up his own investment fund; that Aquila would be investing 

$100 million of his own funds to start up AFV Partners; that Ryan would be hired as a Principal, 

with a starting annual salary of $250,000 plus bonus, with an increase to $350,000 to come when 

they closed their first investment or bought their first company, and a percentage in the firms’ 

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carried interest in its investments and Aquila represented that Ryan’s carried interest would be 

valued at an estimated $15.9-$18.0 million, (Compl. at ¶220(a)-(e)). Plaintiffs allege these 

representations were false, that Aquila knew they were false when he made them, and that neither 

Aquila, nor AF Ventures, nor AFV Partners ever intended to pay Ryan his salary or bonus, or to 

grant Ryan any share of the carried interest. (Compl. at ¶¶221-222). Additionally, Aquila never 

intended to invest $100 million of his own funds to start up AFV Partners. (Compl. at ¶223). Ryan 

later learned through public filings that Aquila was terminated by Solera Group for cause. (Compl.

at ¶28). Ryan relied on Aquila’s representations in deciding to resign from his employment at 

Chaifetz Group and would not have resigned from his employment at the Chaifetz Group but for 

the representations of Aquila. (Compl. at ¶¶224-225). 

Ryan further alleges that on August 13, 2019, shortly after commencing his employment 

with AFV Partners, Aquila demanded that Ryan have “skin in the game” in order to receive his 

promised carried interest, and demanded that any money paid to Ryan and the other co-founders 

be treated as loans and not salary, at least until the parties completed their first acquisition. (Compl.

at ¶¶43-44). This was directly contrary to the terms of Ryan’s employment. After completing their 

first investment, Aquila instructed Ryan to direct their legal counsel to set up the carried interest 

vehicle which was identified as identified as Defendants FSCP Co-Investment I. Aquila insisted 

that the carried interest vehicle be the same entity making the loans to the co-founding members, 

so that the loans would be secured by their equity interests. (Compl. at ¶¶47-52; Ex.’s 1-2). In 

reliance on the representations of Aquila and the Carried Interest Documents, Ryan executed the 

first of three (3) Secured Promissory Notes with FSCP Co-Investment I in the amount of $100,000 

(“Promissory Note 1”). (Compl. at ¶53). Ryan continued to devote his full-time efforts working 

for AFV Partners as a senior-level executive in all areas of its business, and led all aspects of due 

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diligence, negotiations, and transaction execution for AFV Partners’ investment in Sportradar and 

acquisition of Aircraft Performance Group (“APG”) from Liberty Hall Capital Partners, including 

raising all of the equity and debt necessary to consummate the transaction. (Compl. at ¶54). 

Plaintiffs further allege that on or about October 31, 2019, Aquila further represented to 

Ryan that his total compensation package, including carried interest, would be commensurate with 

that of a “Principal” for a fund size of $500M - $749M, with an annual salary at $236,000, annual 

bonus at $234,000, and an allocation of carried interest valued at $4,612,000. (Compl. at ¶56). 

On January 2, 2020, Ryan executed a second Secured Promissory Note with FSCP CoInvestment I in the amount of $100,000 (“Promissory Note 2”). In connection with Promissory 

Note 2, Aquila promised and represented that AFV Partners’ carried interest in APG would also 

be contributed to FSCP Co-Investment I, increasing the value of Ryan’s and the other co-founders’ 

Class B Units. Despite Aquila’s representations, AFV Partners’ carried interest in APG was not 

contributed to FSCP Co-Investment I and is currently owned by AFV Management. (Compl. at 

¶63). 

These representations by Aquila were part of a continuous and elaborate scheme to use 

Ryan’s knowledge and expertise, as well as the relationships he established with investors, to raise 

investor funds and generate substantial investment returns for Aquila’s own personal benefit. 

Aquila never intended to pay Ryan the compensation he was promised or award him his equity 

interests. Aquila’s scheme continued even after Ryan’s employment began with false promises 

that he would contribute a portion of his investments to the carried interest vehicle, which he used 

to induce Ryan to enter into the Promissory Notes, purportedly secured by his carried interest. 

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The Defendants argue that promises to perform in the future, or so-called promissory fraud, 

are not actionable. (Motion at p. 22). 5 However, Illinois recognizes a clear exception where the 

plaintiff alleges a scheme to defraud along with an intention not to perform. This is precisely what 

Plaintiffs have alleged. See General Electric Credit Auto Lease, Inc. v. Jankuski, 1988 Ill. App. 

LEXIS 1717 *7 (1st Dist. December 12, 1988) (court reversed dismissal of promissory fraud claim 

where Plaintiff alleged a scheme to defraud); Stamatakis Industries, Inc. v. King, 165 Ill.App.3d 

879, 881 (1st Dist. 1987) (court reversed grant of summary judgment holding that existence of 

scheme was a question for the trier of fact); Salisbury v. Chapman Realty, 124 Ill. App. 3d 1057, 

1063, (3d Dist. 1984) (reversed dismissal of promissory fraud claim where promise of future 

conduct is the scheme or device used to accomplish the fraud). The Defendants also assert that the 

Promissory Notes’ arbitration clauses mandate a dismissal of all claims related to the notes. 

(Motion at p. 18). However, in Counts VII and XIV, Plaintiffs seek a declaration that the notes are 

wholly invalid, including their arbitration clause, on the grounds that Plaintiffs have alleged a 

scheme to defraud. There could not have been an agreement between the parties where there was 

not a meeting of the minds because of the malicious intent of the Defendants. “Fraud in the 

inducement vitiates the contract and renders the agreement voidable at the option of the injured 

party.” Grane v. Grane, 130 Ill. App. 3d 332, 343, 473 N.E.2d 1366, 1373 (2nd Dist. 1985). These 

arguments equally apply to Plaintiffs’ equitable estoppel claims. 

 

5

 Defendants concede there are no conflicts between Illinois and Texas substantive law on fraudulent inducement. 

(Motion, at fn 16). They contend that Texas law governs, citing Medline Indus. Inc. v. Maersk Med. Ltd., 230 F. Supp. 

2d 857, 863 (N.D. Ill. 2002). However, even under Texas law, a promise to do an act in the future is actionable fraud 

when made with the intention, design, and purpose of deceiving, and with no intention of performing. Spoljaric v. 

Percival Tours, Inc., 708 S.W.2d 432, 434-35 (Tex. 1986). This court, sitting in diversity, should apply Illinois law, 

given that Defendants have not “established an actual conflict between state laws.” Next Payment Solutions, Inc. v. 

CLEAResult Consulting, Inc., No. 17 C 8829, 2018 U.S. Dist. LEXIS 129374, at *17 (N.D. Ill. July 31, 2018). 

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Finally, Defendants argue that Ryan expressly disclaimed any reliance on statements made 

prior to the offer letter, which requires dismissal of Count VIII. (Motion at p. 21). First, Plaintiffs 

relied on numerous misrepresentations by Aquila both in connection with and subsequent to the 

offer letter. Defendants have failed to identify a single representation alleged by the Plaintiffs that 

occurred prior to the date of the contract. Secondly, Defendants overlook the fact that parole 

evidence is admissible to prove fraud in the inducement claims, as the facts and circumstances 

which induced parties to enter into a contract always go beyond the four corners of the document. 

General Electric Credit, 1988 Ill. App. LEXIS 1717 *13; Bank of Naperville v. Holz, 86 Ill.App.3d 

533, 538 (2nd Dist. 1980). Nevertheless, this case is in the early pleading stages. The only question 

before this Court is whether the facts alleged by the Plaintiffs are sufficient to state a claim. As 

discussed above, the facts alleged in the complaint are more than sufficient to state a claim for 

fraudulent inducement. These same allegations also support Plaintiffs’ equitable estoppel claims 

in Counts VII and XIV. 

I. Facts Alleged By Tom Aprill Are More Than Sufficient To State Claims For 

Fraudulent Inducement. 

With respect to Count XIII, Tom alleges that Aquila made the following false 

representations designed to induce Tom to resign from his employment at DHR International and 

began working for AFV Partners: (1) that Tom would be paid an initial salary of $164,000; (2) 

Tom would be paid an annual bonus of $155,000; and (3) Tom would receive a carried interest 

allocation with a value of at least $1.5 million. (Compl. at ¶284). Plaintiffs further allege that these 

representations were false, that Aquila knew they were false when he made them as neither Aquila 

nor AFV Partners ever intended to pay Tom his salary and bonus, and that Aquila never intended 

to grant Tom any share of the carried interest. (Compl. at ¶285). Tom relied on these 

representations in deciding to resign from his employment at DHR International and accept 

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employment with AFV Partners. (Compl. at ¶287). This was all part of a scheme by Aquila to use 

Tom’s human resource services for Aquila’s own personal benefit and for the benefit of his 

companies. (Compl. at ¶286). 

Plaintiffs further allege that shortly after starting his employment, Tom was informed by 

Renato Giger, CFO of AFV Partners, that payment of his salary would be deferred and that he 

would need to sign a Promissory Note in order to receive any payment from AFV Partners. Renato 

Giger assured Tom that the loan proceeds would be treated as an advance on his carried interest 

and that “Tony would take care of [him].” (Compl. at ¶297). Tom relied upon these representations 

in agreeing to execute the Promossory Note. (Compl. at ¶300). 

These allegations are more than sufficient to state a claim for fraudulent inducement. 

Finally, any suggestion by the Defendants that Plaintiffs have no damages as they supposedly 

admit they received payment of compensation after their termination should be rejected. The 

allegations in the complaint are clear that the payments received by Ryan and Tom after their 

termination were insufficient to compensate them for their earned salary, earned bonus, and 

compensate them for the value of their carried interest. (Compl. ¶¶136-137; ¶¶260-261). 

J. Aquila Can Be Held Liable In His Individual Capacity. 

Defendants move to Dismiss Counts II, III, V–VIII, and X–XIV, all of which assert claims 

against Defendant Aquila in his individual capacity. Defendants argue that a plaintiff cannot 

sustain a claim against a member or manager of a Delaware LLC in his personal capacity unless 

plaintiffs’ allegations establish that the corporation is a “sham entity designed to defraud investors 

and creditors.” Eagle Air Transp., Inc. v. Nat'l Aerotech Aviation Delaware, Inc., 75 F. Supp. 3d 

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24 

883, 896 (N.D. Ill. 2014) (applying Delaware law); Del. Code Ann. tit. 6, § 18-303 (1994). (Motion

at p. 22). These arguments lack merit and should be rejected for several reasons.6

First, the claims against Aquila individually in Counts II and X arise under Section 115/13 

of the IWPCA, which places individual liability on responsible parties and states: “any officers of 

a corporation or agents of an employer who knowingly permit such employer to violate the 

provisions of this Act, shall be deemed to be the employers of the employees of the corporation.” 

820 ILCS 115/13. As discussed above, Defendants AF Ventures and AFV Partners are deemed to 

be Illinois employers – because Ryan and Tom reside in Illinois and performed work in Illinois – 

and are therefore subject to the IWPCA. Additionally, Plaintiffs have alleged that Aquila was the 

responsible agent in control of AF Ventures and AFV Partners, and that Aquila willfully and 

deliberately refused to pay Plaintiffs all compensation due to them. (Compl. at ¶¶139, 263). As a 

result, Aquila is deemed an employer and is subject to individual liability under the IWPCA. 

Second, the claims in Count III for breach of fiduciary duty are brought directly against 

Aquila in his individual capacity and arise out of the informal fiduciary relationship alleged 

between Ryan and Aquila. (Compl. at ¶¶32-36, 144-146, 154-155). 

Third, the claims against Aquila in Counts VII and XIV (equitable estoppel) and Counts 

VIII and XIII (fraudulent inducement) all arise out of intentionally false statements and 

misrepresentations made by Aquila to the Plaintiffs as part of a scheme designed to wrongfully 

induce them to leave lucrative careers and accept employment with Aquila’s investment fund, 

AFV Partners. Aquila cannot engage in such fraudulent conduct and then hide behind the corporate 

veil as protection for his misconduct. Courts may ignore the corporate fiction where it is void as a 

 

6

 Aquila Family Ventures, LLC (“AF Ventures”) is a limited liability company formed under the laws of the State of 

Texas, not Delaware. (Compl. at ¶8; Stip. at [Dkt. No. 27]). Any arguments by Defendants that Delaware law applies 

to claims involving AF Ventures should be rejected outright. 

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cover for fraud or illegality. Morris v. Mergenthaler, 1980 Del. Ch. LEXIS 546, at *5 (Del. Ch. 

October 14, 1980); Gadsen v. Home Pres. Co., 2004 Del. Ch. LEXIS 14, at *12 (February 20, 

2004) (“a court of equity will disregard the separate legal existence of a corporation where it is 

shown that the corporate form has been used to perpetrate a fraud or other injustice”). 

III. Defendants’ Motion to Strike Should be denied. 

Defendants move under Rule 12(f) to strike a number of allegations in the complaint on the 

basis that they are “irrelevant and scandalous” and unrelated to Plaintiffs’ claims. (Motion at p. 

23). Defendants seek to strike allegations that AFV Partners breached its obligation to provide 

consulting services, (Motion Ex. D, ¶60); that AVF Partners’ employees worked on Aquila’s 

personal real estate investments (Id. at ¶66); that AFV Partners failed to pay vendors (Id. at ¶67); 

that Aquila failed to make promised investments (Id. at ¶¶153, 220(a)); that AFV Partners received 

a PPP loan (Id. at ¶45); that Aquila used investor funds to make repairs to his gulfstream jet (Id. at 

¶46, 72); and that Aquila engaged in misconduct resulting in his separation from Solera. (Id. at 

¶¶28, 220). Defendants argue that these allegations are immaterial, have no essential relationship 

to the claims for relief, and could not form the basis for admissible evidence. (Motion at p. 24). 

Under Rule 12(f), “the court may strike from a pleading an insufficient defense or any 

redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). Motions to strike 

are strongly disfavored. See generally Custom Vehicles, Inc. v. Forest River, Inc., 464 F.3d 725, 

727 (7th Cir. 2006) (Easterbrook, J., in chambers). “To prevail on a motion to strike under Rule 

12(f), defendants must demonstrate that the material at issue does not bear on the subject matter 

of the litigation and will prejudice the defendants.” Manuel v. Lucenti, No. 04-C-2531, 2004 U.S. 

Dist. LEXIS 23102, at *6 (N.D. Ill. Nov. 10, 2004). A matter should not be stricken from a pleading 

unless it is clear that it can have no possible bearing on the subject matter of the litigation. VPHI, 

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Inc. v. National Educ. Training Group, 1995 U.S. Dist. LEXIS 1365, *9 (N.D. Ill. January 20, 

1995). Prejudice is shown when the challenged pleading confuses the issues or is so lengthy or 

complex that it places an undue burden on the responding party. Sun Life Assurance Co. of Can. 

v. Great Lakes Bus. Credit LLC, 968 F. Supp. 2d 898, 903 (N.D. Ill. 2013). 

Defendants’ motion to strike should be denied. Defendants essentially complain about a 

portion of 10 paragraphs out of 305 paragraphs in the complaint. Any suggestion that these 

allegations are so lengthy or complex that they create an undue burden on the defendants to respond 

to is simply baseless. In addition, these allegations are directly relevant to the fact that Aquila held 

himself out as a wealthy and successful businessman who lured Plaintiffs away from lucrative 

careers with false promises of executive level compensation, salary, significant bonus payments, 

and equity interests in various investment vehicles. Despite having the apparent ability to pay the 

compensation promised, and despite accepting the benefits of the Plaintiffs’ services, Defendants 

wrongfully and intentionally failed to pay Plaintiffs a dime in promised compensation over the 

course of nearly a year of employment, and in fact compelled Plaintiffs to enter into a series of 

Promissory Notes purportedly secured by equity interests never awarded to them. Every allegation 

is directly relevant to Plaintiffs’ claims for breach of contract, breach of fiduciary duty, equitable 

estoppel, and fraudulent inducement. 

Finally, to the extent that Defendants believe these allegations do not form the basis for 

admissible evidence, that determination is governed by the Federal Rules of Evidence and is 

premature at this point. Lewis v. Abernathy, 2016 U.S. Dist. LEXIS 89113 at *4 (N.D. Ind. July 

11, 2016). 

With respect to Defendants’ motion to strike Plaintiffs’ claims for reimbursement of 

attorneys’ fees, Counts II and X allege claims under the Illinois Wage Payment and Collection 

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Act. See 820 ILCS 115. Section 115/14 of the Illinois Wage Payment and Collection Act 

specifically provides for recovery of attorneys’ fees. In addition to the above, section 705 ILCS 

225/1 provides for recovery of attorney’s fees in wage actions brought by employees to recover 

wages earned and due and owing pursuant to the terms of their employment. Additionally, under 

Texas law, a person may recover reasonable attorney’s fees from an individual or corporation, in 

addition to the amount of a valid claim and costs, if the claim is for services rendered; performed 

labor or pursuant to an oral or written contract. See Tex. Civ. Prac. & Rem. Code § 38.001. 

CONCLUSION 

For the reasons discussed above, Defendants’ Motion to Dismiss should be denied in its 

entirety. 

Dated: November 10, 2020 Respectfully submitted, 

 RYAN L. APRILL 

THOMAS S. APRILL, 

 By: /s/ Michael K. Desmond

 One of Their Attorneys 

Peter A. Silverman (ARDC No. 6196081) 

Michael K. Desmond (ARDC No. 6208809) 

Mattison D. Enloe (ARDC No. 6329648) 

FIGLIULO & SILVERMAN, P.C. 

10 South LaSalle Street 

Suite 3600 

Chicago, Illinois 60603 

(312) 251-4600 

psilverman@fslegal.com

mdesmond@fslegal.com

menloe@fslegal.com 

 

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CERTIFICATE OF SERVICE 

 I hereby certify that on November 10, 2020, a true and correct copy of PLAINTIFFS’ RESPONSE 

TO MOTION TO DISMISS PURSUANT TO RULE 12(B)(3), 12(B)(6) AND 9(B) AND MOTION 

TO STRIKE PURSUANT TO 12(F), was electronically filed and served upon counsel of record below 

via the Court’s CM/ECF System.

/s/ Michael K. Desmond 

 

Attorneys for Defendants 

Brian D. Sieve 

Kate Guilfoyle 

Lisa Santaniello 

Kirkland & Ellis LLP 

300 N. LaSalle St. 

Chicago, Illinois 60654 

brian.sieve@kirkland.com

kate.guilfoyle@kirkland.com

lisa.santaniello@kirkland.com

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