Redmon Construction Inc. et al v. Raymond James Bank

Filing 13

ORDER: For the reasons set forth in the Statement below, the Court grants the motion of defendant Raymond James Bank 5 to dismiss the plaintiffs' Complaint 1 . The plaintiffs are granted leave to amend on or before June 19, 2015. Absent timely amendment, judgment for defendant Raymond James Bank will be entered and the case will be terminated. Signed by the Honorable John J. Tharp, Jr on 5/22/2015. [For further details see order] Mailed notice(air, )

IN THE UNITED STATES DISTRICT COURT
FOR THENORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
MAJED MURAD and REDMON
CONSTRUCTION, INC.,
Plaintiffs,
v.
RAYMOND JAMES BANK,
Defendant.

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No. 14 CV 07593
Judge John J. Tharp, Jr.

ORDER
For the reasons set forth in the Statement below, the Court grants the motion of defendant
Raymond James Bank (“RJB”), Dkt. 5, to dismiss the plaintiffs’ Complaint, Dkt. 1. The
plaintiffs are granted leave to amend on or before June 19, 2015. Absent timely amendment,
judgment for RJB will be entered and the case will be terminated.
STATEMENT
This case concerns a piece of residential property in Bloomingdale, Illinois, which RJB
purchased in a foreclosure sale in April of 2014. See RJB Exs. 3-4, Dkts. 6-4 and 6-5. The
plaintiffs filed this two-count action against RJB on September 29, 2014, alleging that in January
and November of 2013 (after RJB obtained a Judgment for Foreclosure, but before it purchased
the property), plaintiff Murad had entered into lease and purchase agreements with the former
owner of the property, Samir Fakhouri. Id.; Compl., Dkt. 1, ¶¶ 12-13, 20, 25-26. The Complaint
further alleges that plaintiff Redmon Construction, Inc. (“Redmon”) has been owed over $78,000
since June 30, 2014, for “labor, services, use of equipment and material used for various repair
[sic] in the subject property.” Id. at ¶¶ 2, 14, 28. Presumably (though the complaint does not so
allege), Redmon provided those repairs pursuant to an agreement with Murad. Notably, however,
the Complaint does not allege that Redmon was a party to either the lease or purchase agreement
between Murad and Fakhouri. Nevertheless, in Count I of the Complaint, both plaintiffs seek a
declaratory judgment that, pursuant to 735 ILCS 5/9-207.5, RJB “must honor the full term of the
Lease,” id. at ¶ 22; and in Count II, seek “specific performance” of the purchase agreement, or
alternatively, “should Defendant not be required to comply with the terms of the purchase
contract,” Redmon “requests a Judgment for $78,619.42, plus interest at 18% per annum,” for
the foregoing repairs. Id. at ¶ 28. Jurisdiction is based on diversity pursuant to 28 U.S.C. § 1332.
Id. at ¶¶ 6, 10.
RJB now seeks dismissal of the plaintiffs’ Complaint on three grounds: (1) that Count II
was adjudicated in the prior foreclosure action and is now barred by res judicata, and that its
resulting dismissal (says RJB) would deprive the Court of diversity jurisdiction, requiring “the
entire action” to be dismissed pursuant to Fed. R. Civ. P. 12(b)(1); (2) that “Plaintiffs have failed

to join a necessary party,” whose joinder would again “deprive the Court of diversity
jurisdiction,” requiring dismissal pursuant to Fed. R. Civ. P. 12(b)(7); and (3) that both Counts of
the Complaint “are substantially insufficient under Federal Rule of Civil Procedure 8,” requiring
dismissal pursuant to Fed. R. Civ. P. 12(b)(6). See RJB Mem., Dkt. 6, at 1-2, 5-6. As explained
below, the Court agrees that the Complaint fails to allege a cognizable claim and should
therefore be dismissed in its entirety. Because the Complaint is confusingly drafted, however,
and because the plaintiffs have altered their theories of liability, the Court’s route to this
conclusion differs substantially from that taken by RJB.
I.

Res Judicata and Subject Matter Jurisdiction

The Court begins with RJB’s res judicata defense against Count II of the plaintiffs’
Complaint because, according to RJB, this defense implicates jurisdictional concerns. This
defense relies on the May 13, 2014 “Order Confirming Sale” which concluded RJB’s foreclosure
action regarding the Bloomingdale property. See Def. Ex. 4, Dkt. 6-4. 1 RJB argues that this
Order bars any claims in Count II that predated May 13, 2014, because they were “adjudicated”
at that time by the foregoing Order. See RJB Mem., Dkt. 6, at 4-5; RJB Reply, Dkt. 11, at 2.
From there, RJB reasons that “the entire action would also need to be dismissed pursuant to Rule
12(b)(1), as the Court would no longer have diversity jurisdiction” in the “absence” of Count II,
which “contains the only claim for monetary damages in the amount required by 28 U.S.C.
§ 1332.” RJB Mem., Dkt. 6, at 5. But the argument relies on a faulty premise—namely, that the
dismissal of Count II would deprive the Court of diversity jurisdiction.
“It is well established that the requirements for diversity jurisdiction must be satisfied
only at the time a suit is filed.” Grinnell Mut. Reinsurance Co. v. Shierk, 121 F.3d 1114, 1116
(7th Cir. 1997). So, “if the amount in controversy exceeds the jurisdictional amount when a suit
is filed in federal court, the fact that subsequent events reduce the total amount in controversy
will not divest the court of diversity jurisdiction.” Id. Subsequent dismissal of the only claim
supporting the jurisdictional amount (here, Count II), based on the successful assertion of an
affirmative defense (such as res judicata), therefore has no jurisdictional effect. Cf. Tropp v.
Western-Southern Life Ins. Co., 381 F.3d 591, 595 and n.2. (7th Cir. 2004) (jurisdictional amount
in controversy was established by claim for injunctive relief in original complaint that plaintiff
“subsequently chose not to purse” in amended complaint).
1

Consistent with the standard required under Rule 12(b)(6), the Court assumes the truth
of the “well-pleaded factual allegations” in the plaintiffs’ Complaint, as well as “documents
attached to the complaint, documents that are critical to the complaint and referred to in it, and
information that is subject to proper judicial notice.” Phillips v. Prudential Ins. Co. of Am., 714
F.3d 1017, 1019-20 (7th Cir. 2013) (quoting Geinosky v. City of Chi., 675 F.3d 743, 745 n.1 (7th
Cir. 2012)). Public court records—such as those filed in the prior foreclosure action at issue here
and now attached to RJB’s Memorandum, see RJB Exs. 1-4, Dkts. 6-1 to 6-4—are common
candidates for such judicial notice. See Ennenga v. Starns, 677 F.3d 766, 773–74 (7th Cir. 2012)
(court took proper judicial notice of “the dates on which certain actions were taken or were
required to be taken in the earlier state-court litigation–facts readily ascertainable from the public
court record and not subject to reasonable dispute”). As these documents are not subject to
reasonable dispute (indeed, the plaintiffs’ do not dispute them), the Court considers them also.

2

Similarly misguided is the argument in RJB’s Reply that “the Complaint in its current
form is factually insufficient and fails to demonstrate that this Court has subject-matter
jurisdiction” because Count II fails to plead facts “necessary to determine if any amounts accrued
prior to May 13, 2014, as those amounts would have been adjudicated in the foreclosure action
and would not be recoverable in this matter.” See RJB Reply, Dkt. 11, at 2. According to RJB,
the plaintiffs must allege “the dates on which specific repairs were made and the monetary
values that attached to each repair” in order to demonstrate that such amounts are not barred by
res judicata and thus support the jurisdictional “amount in controversy.” Id. But again, even a
proper dismissal of Count II as barred by res judicata would not negate the diversity jurisdiction
with which this Court is already vested.
Nor is it a plaintiff’s burden to plead facts necessary to overcome a res judicata defense,
as RJB argues here. See Sidney Hillman Health Ctr. of Rochester v. Abbott Labs, Inc., 782 F.3d
922, 928 (7th Cir. 2015) (“a complaint need not anticipate and overcome affirmative defenses”).
While it is true that a res judicata defense “provides a proper basis for a Rule 12(b)(6) motion”
where the defense “is disclosed in the complaint,” Muhammad v. Oliver, 547 F.3d 874, 878 (7th
Cir. 2008), as RJB concedes, its res judicata defense is not so disclosed here, because the
plaintiffs’ Complaint lacks the dates “necessary to determine if any amounts accrued prior to”
the May 13, 2014 Order on which RJB relies. See RJB Reply, Dkt. 11, at 2. 2 In such a case, the
proper course is to assert the defense in an answer, not a motion to dismiss under Rule 12(b)(6).
See Oliver, 547 F.3d at 878 (“res judicata is not one of the affirmative defenses that Rule 12(b)
permits to be made by motion rather than in the answer to the complaint”); Sidney Hillman, 782
F.3d at 928 (“we have cautioned that this ‘irregular’ approach [of a Rule 12(b)(6) dismissal
based on an affirmative defense] is appropriate ‘only where the allegations of the complaint itself
set forth everything necessary to satisfy the affirmative defense’” (quoting Chi Bldg. Design,
P.C. v. Mongolian House, Inc., 770 F.3d 610, 613-14 (7th Cir. 2014)). RJB’s argument that the
Complaint here fails to provide the detail necessary to substantiate its res judicata defense thus
demonstrates a deficiency not in the Complaint, but in RJB’s Rule 12(b)(6) motion.
There are substantive flaws in RJB’s res judicata defense as well. The defense posits that
“Murad’s non-record interest was adjudicated when the Property was sold at the foreclosure
sale” that was ordered in the foreclosure action. See RJB Reply, Dkt. 11, at 1. The plaintiffs have
made clear, however, that they no longer assert a “non-record interest” in the property. 3 Instead,
they contend that the “issue in this case is whether the new owner of the subject house,
Defendant herein, should honor the existing Lease” and “be responsible for the repairs performed
2

RJB presumably makes this concession because “Illinois courts consider the facts ‘as
they exist at the time of judgment to determine whether res judicata bars a subsequent action.’”
Arlin-Golf, LLC v. Village of Arlington Heights, 631 F.3d 818, 822 (7th Cir. 2011) (brackets
omitted, quoting Altair Corp. v. Grand Premier Tr. & Inv., Inc., 318 Ill. App. 3d 57, 62, 742
N.E.2d 351, 355 (2d Dist. 2000)).
3

To the extent RJB’s res judicata defense attacks “Murad’s attempt to enforce a purchase
agreement relative to the Property,” RJB Reply, Dkt. 11, at 1, as RJB acknowledges, Murad’s
Opposition made no attempt to support this claim for “specific performance,” see Compl., Dkt. 1
¶ 27, and thus appears to have “conceded that point.” See RJB Reply, Dkt. 11, at 1.

3

on its house,” either contractually under the foregoing lease or under a theory of quantum meruit.
See Pltfs. Opp., Dkt. 10, at 5-7. Neither of these claims is barred by the prior foreclosure action.
As to the first (the claim that RJB must honor the lease Murad executed with the former
property owner), as RJB acknowledges, this claim is preserved (within certain constraints
discussed below) by Illinois statute. See 735 ILCS 5/9-207.5(a) (“the purchaser at a judicial sale .
. . may terminate a bona fide lease, as defined in Section 15-1224 of this Code, only . . . at the
end of the term of the bona fide lease”); RJB Mem., Dkt. 6, at 8-9 (citing 735 ILCS 5/9-207.5(a)
and 5/15-1224). The question as to this claim, therefore, is not whether it is barred by res judicata
as a result of the prior adjudication, but whether the lease Murad entered into with the former
property owner meets the requirements of a “bona fide lease” under 735 ILCS 5/15-1224.
As to the plaintiffs’ claims for amounts allegedly due under this lease, or alternatively
under an “unjust enrichment” or “quantum meruit” theory, both the Seventh Circuit and Illinois
courts have repeatedly recognized that a mortgage foreclosure action does not bar subsequent
claims related to the foreclosed property that nevertheless rest on an agreement distinct from, or
upon facts unrelated to the default of, the mortgage that prompted the prior foreclosure action. 4
Such courts have thus sustained over res judicata defenses claims for breach of an agreement
separate from the foreclosed mortgage, and for unjust enrichment, such as the plaintiffs have
attempted (albeit unsuccessfully, as discussed below) to allege here. See supra note 4.
II.

Declaratory Judgment (Count I)

Having disposed of RJB’s jurisdictional and res judicata arguments, the Court turns to the
merits of the plaintiffs’ claims, beginning with their request in Count I for a declaratory
judgment that RJB “is legally obligated to abide by the terms of the Lease.” See Compl., Dkt. 1,
at ¶¶ 20-23. As will be seen, the lease has expired, but the plaintiffs’ claim to enforce the lease in
Count I is not moot because the plaintiffs premise their demand for reimbursement for repairs to
the Bloomingdale property (set forth, confusingly, in Count II of the Complaint) on provisions of
the lease agreement (or, alternatively, on quantum meruit). See Pltfs. Opp., Dkt. 10, at 5-6.
4

See, e.g., Freedom Mort. Corp. v. Burnham Mort., Inc. 569 F.3d 667, 672 (7th Cir.
2009) (observing that the “questions litigated in a mortgage foreclosure action are (a) did the
borrower make the promised payments?, and, if not, then (b) how much is the collateral worth?”
and holding that “distinct” questions are not barred); ABN AMRO Mort. Grp., Inc. v. McGahan,
237 Ill. 2d 526, 537, 931 N.E.2d 1190, 1197 (2010) (“a mortgage foreclosure proceeding does
not bind the whole world”) (citing cases); LSREF2 Nova Invs. III, LLC v. Coleman, 2014 IL App
(1st) 140184, ¶¶ 13-15, --- N.E.3d ---, 2014 WL 7243264, *5 (Dec. 19, 2014) (“the circuit court
entered only an in rem deficiency” which “adjudicated only the rights and interest in the property
that was the subject of the mortgage”) (citing Turczak v. First Am. Bank, 2013 IL App (1st)
12964, ¶¶ 31-33, 997 N.E.2d 996, 1001-002; LP XXVI, LLC v. Goldstein, 349 Ill. App. 3d 237,
241-42, 811 N.E.2d 286, 289-90 (2d Dist. 2004)); Eighteen Invs,, Inc. v. NationsCredit Fin.
Servs. Corp., 376 Ill. App. 3d 527, 876 N.E.2d 1096 (1st Dist. 2007) (claims seeking rescission
and declaratory judgment relating to judicial sale ordered in prior foreclosure action were barred
by res judicata, whereas unjust enrichment claim regarding defendant’s retention of proceeds
from that sale was instead resolved on the merits).

4

Both sides acknowledge that the plaintiffs’ claim to enforce the lease looks to 735 ILCS
5/15-1224 to determine whether the lease agreement between Murad and the former property
owner was a “bona fide lease,” such that 735 ILCS 5/9-207.5 would allow it to be terminated
only “at the end of the term” and “by no less than 90 days’ written notice.” See RJB Mem., Dkt.
6, at 8-9; Pltfs. Opp., Dkt. 10, at 6. Both sides also agree that under § 5/15-1224(b), a bona fide
lease “for a term exceeding one year that is entered into or renewed after the date of the filing of
the lis pendens . . . and before the date of the judicial sale of the residential real estate” (as here)
“shall be deemed to be a bona fide lease for a term of one year.” See Pltfs. Opp., Dkt. 10, at 6;
RJB Reply, Dkt. 11, at 3. And both sides also agree (or at least no one challenges for purposes of
this motion) that the lease between Murad and the former property owner meets these
requirements, and is therefore “deemed to be a bona fide lease for a term of one year.” Id. The
parties’ only disagreement is when that one-year term runs.
The plaintiffs argue that the lease between Murad and the former property owner—a
three-year lease expiring in January 2016—should be deemed a one-year lease expiring a year
after the May 13, 2014, Order approving the judicial sale of the Bloomingdale property, thus
expiring on May 12, 2015. See Pltfs. Opp., Dkt. 10, at 6. RJB, on the other hand, argues that “the
clear language of the statute establishes that the lease is only considered a bona fide lease for one
year from the date that it is entered into, which, in the case at bar, would mean that it expired on
January 2, 2014.” RJB Reply, Dkt. 11, at 4. In fact, the lease attached as Exhibit A to the
Complaint provides for a term “beginning February 1, 2013 and ending January 31, 2016,” Pltfs.
Ex. A, Dkt. 1-1, 5 which if deemed a one-year term, would expire in January of 2014 (it is
unnecessary to decide here whether § 5/15-1224(b) requires the one-year term to run from the
execution date, as RJB argues, or the start of the lease term). But RJB’s argument overlooks that
735 ILCS 5/9-207.5 allows for termination of a bona fide lease “by no less than 90 days’ written
notice.” While no party has addressed this “90 day notice requirement” of § 5/9-207.5, the
Complaint suggests that such notice came no earlier than July 8, 2014, meaning that the lease
could be terminated no earlier than October 6, 2014. 6
Thus, according to all parties’ calculations, Murad’s lease on the Bloomingdale property
has now expired, see Pltfs. Opp, Dkt. 10, at 6; RJB Reply, Dkt. 11, at 4, rendering moot his
request for a declaration that RJB “must honor the full term of the Lease,” Compl., Dkt. 1, ¶ 22,
at least to the extent that the claim asserts a right to continued occupancy of the premises. But
that is only one possible remedy available under the lease. To the extent the plaintiffs also seek a
5

“To the extent that an exhibit attached to or referenced by the complaint contradicts the
complaint’s allegations, the exhibit takes precedence.” Phillips, 714 F.3d at 1020.
6

The Court notes the following allegations bearing on this 90-day notice requirement:
(1) on July 8, 2014, RJB “sent a letter to Plaintiff explaining that it is now the owner of the
property and sought possession of it,” Dkt. 1, ¶ 15; (2) the plaintiff was then served on August 8,
2014, with “a 30-day Notice of Eviction,” id. at ¶ 16; and (3) the plaintiff was then “served with
a Notice seeking eviction by October 1, 2014.” Id. The Court concludes based on these
allegations that the 90-day notice requirement of § 5/9-207.5 was met no earlier than July 8,
2014, allowing for termination of the lease no earlier than October 6, 2014 (which is largely
consistent with RJB’s alleged “Notice seeking eviction by October 1, 2014,” see Dkt. 1, ¶ 16).

5

declaration that RJB is liable under the lease for the costs of repairs made to the Bloomingdale
property (because RJB is “legally obligated to abide by the terms of the Lease,” Compl., Dkt. 1,
¶ 23), the declaratory judgment claim in Count I is not moot; rather, it is indistinguishable from
the “breach of contract” claim in Count II. See Compl. Dkt 1, ¶ 28. This is because, in their
Opposition to RJB’s motion, the plaintiffs premise RJB’s liability for the cost of such repairs not
on a breach of the purchase agreement but on the lease agreement (or, alternatively, quantum
meruit). See Opp., Dkt. 10, at 5 (“Defendant herein, should honor the existing Lease, Exhibit A,
and be responsible for the repairs performed on its house via contractual obligation or quantum
meruit.”); id. at 6 (“Section #21 of the Lease requires the Landlord to do all repairs.”). 7
The plaintiffs’ “breach of contract” claim in Count II is thus a claim under the lease
agreement as well, and indistinguishable from their “declaratory judgment” claim in Count I.
Both “Counts” are premised on the same legal theory—namely, that RJB “is legally obligated to
abide by the terms of the Lease,” see Dkt. 1, ¶ 23—and the question of when that lease expired
therefore applies equally to both Counts. As the Court has concluded above that the lease expired
(for purposes of RJB’s motion to dismiss) no earlier than October 6, 2014, the Court now
considers whether, assuming that expiration date, the plaintiffs have adequately alleged in Count
II that RJB breached the lease by not paying for the repairs to the Bloomingdale property.
III.

Breach of Contract/Quantum Meruit (Count II)

Other than the jurisdictional and res judicata arguments addressed above, RJB mounts
two additional challenges to Count II of the plaintiffs’ Complaint: (1) that it fails to join a
necessary party—Fakhouri, the former property owner—who would (again) “deprive the Court
of diversity jurisdiction,” RJB Mem., Dkt. 6, at 5-7; and (2) that it fails to allege a cognizable
claim. Id. at 10-11; RJB Reply, Dkt. 11, at 4. The Court agrees with the second argument.
As to the first—that the plaintiffs failed to join a necessary party who would, if joined,
destroy diversity and thus deprive the Court of jurisdiction—the argument wrongly reasons that
the former owner of the Bloomingdale property is a necessary party because he was “assumedly”
the counterpart to any agreement sought to be enforced in Count II. See RJB Mem., Dkt. 6, at 3,
5; RJB Reply, Dkt. 11, at 2-3. Again, although Count II originally sought “specific performance”
of the purchase agreement between Murad and the former property owner, see Compl., Dkt. 1,
¶ 27, the plaintiffs have since abandoned that claim. See supra notes 3 and 7. And to the extent
RJB assumes that the plaintiffs’ breach of contract claim in Count II is similarly predicated on an
agreement between Murad and/or Redmon and the former property owner, see RJB Mem., Dkt.
6, at 3, 5, the plaintiffs’ Opposition makes clear that this claim is instead based upon the lease
agreement in which RJB became Murad’s counterpart, pursuant to Illinois statute, when it
purchased the property in May of 2014. See Pltfs. Opp., Dkt. 10, at 6. The former property
owner, Fakhouri, is therefore not a necessary party here.
7

Although Count II alternatively “seeks specific performance” of Murad’s “purchase
agreement” with the former owner of the Bloomingdale property, as noted above, the plaintiffs
have abandoned that claim. See supra note 3. The Court discerns no obvious basis on which RJB
could be liable to the plaintiffs under the purchase agreement between Murad and the former
property owner, but regardless, the plaintiffs have forfeited any argument in that regard.

6

This leaves only the core question of whether Count II of the plaintiffs’ Complaint
alleges a cognizable claim for reimbursement of the costs allegedly incurred by Redmon in
repairing the Bloomingdale property. The plaintiffs advance two theories to support such a
claim—breach of contract and quantum meruit—and both are unavailing.
The plaintiffs’ breach of contract theory, as modified by their brief, argues that RJB
assumed the role of landlord under the lease it inherited, and that Section 21 of that lease
required RJB in this new capacity “to do all repairs.” See Pltfs. Opp., Dkt. 10, at 6. As an initial
matter, RJB complains that in so modifying their breach of contract theory the plaintiffs are
attempting “to depart from the allegations of the Complaint.” See RJB Reply, Dkt. 11, at 4. But
the designation of “counts” does not necessarily delimit the contours of a legal theory; and as
explained above, Count I, which is nominally predicated on the lease agreement, subsumes the
claim for reimbursement of repair costs under the lease agreement. Seventh Circuit precedent,
moreover, allows a plaintiff opposing a motion to dismiss under Rule 12(b)(6) to “elaborate on
his factual allegations so long as the new elaborations are consistent with the pleadings.”
Geinosky, 675 F.3d at 745, n.1. That the plaintiffs appear to “depart” from the allegations of
Count II, then, is both illusory and inconsequential. 8
Still, this latitude is not enough to save the plaintiffs’ breach of contract claim here,
because the lease provision on which they rely (Section 21) does not support it. Section 21 of
Murad’s Residential Lease Agreement provides: “Upon being notified by Tenants that there is
some building defect in which is [sic] hazardous to health, life, or safety, Owners shall
undertake repairs as soon as possible. . . . Owner agrees to keep Tenants informed about the
progress of work. This includes remodeling and updating of the property.” See Pltfs. Ex. A,
Dkt. 1-1, at § 21 (emphasis added). Section 20 similarly requires a tenant “to notify Landlord
immediately” of water damage and “upon first discovering any signs of serious building
problems such as foundation cracks, a tilting porch, a crack in plaster, buckling drywall or
siding, a spongy floor, a leaky water heater, etc.” Id. at § 20. Contrary to these provisions, the
plaintiffs here do not allege that they “notified” the owner of any defect, much less a “serious
building problem” or one that was “hazardous to health, life, or safety,” in order to allow the
owner to arrange for repairs (as opposed to plaintiffs performing the repairs themselves and
suing over them later). Absent the required notice, no duty to repair arose under the lease
agreement. The plaintiffs’ breach of contract claim is therefore facially deficient.
Alternatively, Redmon turns to “quantum meruit.” See Plaintiffs’ Opp., Dkt. 10, at 5;
Compl., Dkt. 1, ¶¶ 28-29. But this theory, too, is unsupported. Both quantum meruit and the
8

To the extent that the Complaint is premised on a breach of contract claim (whether that
contract is the lease agreement or the purchase agreement), there is an obvious issue as to
Redmon’s standing to assert rights conferred by a contract to which it was not a party. RJB,
however, fails to contest Redmon’s standing in this regard. And because the Court concludes that
the claim for breach of the lease agreement fails in any event, the matter is of no import at
present. But in the event the plaintiffs seek to amend their Complaint, this question may be
germane. The plaintiffs would therefore be well advised to focus attention on which plaintiff is
entitled to assert rights under the lease, which plaintiffs are seeking reimbursement for the
subject repairs, and under what theory.

7

related theory of unjust enrichment “are based on a contract implied in law,” and both require the
plaintiff to show that “valuable services or materials were furnished by the plaintiff” and
“received by the defendant, under circumstances which would make it unjust for the defendant to
retain the benefit without paying.” See Stark Excavating, Inc. v. Carter Constr. Servs., Inc., 2012
IL App (4th) 110357, ¶ 37, 967 N.E.2d 465, 474 (quoting Hayes Mech., Inc. v. First Indus., L.P.,
351 Ill. App. 3d 1, 9, 812 N.E.2d 419, 426 (1st Dist. 2004)). While these theories differ in their
measure of recovery—the measure for quantum meruit “is the reasonable value of the work and
material provided,” whereas unjust enrichment “focuses on the benefit received and retained as a
result of the improvement provided by the contractor,” id.—the problem with both theories here
is their mutual requirement of “circumstances which would make it unjust for the defendant to
retain the benefit without paying.” Id.; see also Cleary v. Philip Morris Inc., 656 F.3d 511, 516
(7th Cir. 2011) (unjust enrichment claim under Illinois law requires “that defendant’s retention of
the benefit violates the fundamental principles of justice, equity, and good conscience” (quoting
HPI Health Care Servs., Inc. v. Mt. Vernon Hosp., Inc., 131 Ill. 2d 145, 160, 545 N.E.2d 672,
679 (1989)); Stevens v. Interactive Fin. Advisors, Inc., No. 11 C 2223, 2015 WL 791384, *16
(N.D. Ill. Feb. 24, 2015) (same). Redmon has made no such allegation.
Instead, Redmon alleges merely that it “completed” various repairs to the property by
June 30, 2014, and the amount “owed” for those repairs. See Compl., Dkt. 1, ¶¶ 2, 14, 28. Both
Illinois courts and courts in this district applying Illinois law have repeatedly recognized that
such allegations are insufficient to sustain a claim for quantum meruit or unjust enrichment
because “[t]he mere fact that a person benefits another is not itself sufficient to require the other
to make restitution therefore.” Spitz v. Proven Winners N. Am., LLC, 969 F. Supp. 2d 994, 1008
(N.D. Ill. 2013) (quoting Hayes, 351 Ill. App. 3d at 9, 812 N.E.2d at 426), aff’d on other
grounds, 759 F.3d 724 (7th Cir. 2014); Saletech, LLC v. East Balt, Inc., 2014 IL App (1st)
132639, ¶ 36, 20 N.E.3d 796, 808 (same). Indeed, actual “knowledge that the work is being
performed is insufficient,” C. Szabo Contracting, Inc. v. Lorig Constr. Co., 2014 IL App (2d)
131328, ¶ 33, 19 N.E.3d 638, 647, and Redmon has failed to allege even that.
Rather, Illinois law requires a plaintiff seeking recovery in quantum meruit or unjust
enrichment to allege facts demonstrating that the defendant’s retention of the conferred benefit
would be unjust, such as the defendant having requested the work and then refused to pay for it,
somehow enticed the work or suggested that it would pay for it, or demanded other work that
rendered necessary the additional work sued over. See, e.g., id. at ¶ 42, 19 N.E.3d at 649
(sustaining unjust enrichment claim where defendant “received the exact performance that it
requested and agreed to pay for, and [did] not dispute that it paid no one for the work”); Stark
Excavating, 2012 IL App (4th), at ¶ 39, 967 N.E.2d at 474 (denying summary judgment on
quantum meruit and unjust enrichment claims where there was evidence that the benefit at issue
was rendered necessary by other work demanded by the defendant). Absent any such allegations
demonstrating that RJB’s retention of the repairs to the Bloomingdale property would be unjust,
Redmon’s quantum meruit claim seeking reimbursement for that work is likewise facially
deficient. 9

9

In this regard, while non-precedential, the Court also finds persuasive a recent
unpublished Illinois decision involving facts similar to those alleged here, affirming the
dismissal of an unjust enrichment claim by a lessee who made improvements to property he
8

*

*

*

For all of the foregoing reasons, RJB’s Motion to Dismiss the plaintiffs’ Complaint, Dkt.
5, is granted. The dismissal is without prejudice; to the extent the plaintiffs can allege, consistent
with the requirements of Rule 11, facts that would plausibly establish an entitlement to
reimbursement for repair costs (either under the terms of the lease agreement or another theory,
such as quantum meruit or unjust enrichment), they have leave to do so on or before June 19,
2015.

John J. Tharp, Jr.
United States District Judge

Date: May 22, 2015

attempted to purchase, but which was subject to a superior mortgage that was later foreclosed.
See Deutsche Bank Nat’l Tr. Co. v. Mitacek, 2013 IL App (1st) 121487-U, ¶ 30, 2013 WL
1858425, *8 (May 1, 2013) (unpublished) (plaintiff “failed to plead sufficient facts supporting an
allegation that Deutsche Bank’s retention of his improvements to the property would be unjust
and violate the fundamental principles of justice, equity and good conscience”). As in Deutsche
Bank, Redmon has failed to allege sufficient facts supporting an allegation that RJB’s retention
of the improvements to the Bloomingdale property would be unjust.

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