UIRC-GSA Holdings, LLC v. Rainier GSA Portfolio I, LLC

Filing 142

MEMORANDUM Opinion and Order Signed by the Honorable Amy J. St. Eve on 8/25/2017:Mailed notice(kef, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
UIRC-GSA Holdings Inc.,
Plaintiff,

)
)
)
v.
)
)
William Blair & Company, L.L.C.,
)
And Michael Kalt,
)
Defendants,
)
____________________________________)
William Blair & Company, L.L.C.,
)
Counter-Plaintiff,
)
)
v.
)
)
UIRC-GSA Holdings, Inc. and
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Urban Investment Research Corp.,
)
Counter-Defendants,
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____________________________________)
William Blair & Company, L.L.C.,
)
Third-Party Plaintiff,
)
)
v.
)
)
Rainier Realty Acquisition Gp., L.L.C., and )
Rainier GSA Portfolio I, L.L.C.,
)
Third-Party Defendants.
)

Case No. 15-CV-9518
Hon. Amy J. St. Eve

MEMORANDUM OPINION AND ORDER
AMY J. ST. EVE, District Court Judge:
On April 12, 2016, Plaintiff UIRC-GSA Holdings, Inc. (“UIRC”) brought its Fourth
Amended Complaint against Defendants William Blair & Company (“Blair”) and Michael Kalt,
collectively, “Defendants,” alleging copyright infringement in violation of 17 U.S.C. § 101 et
seq. and professional negligence. Blair has since filed a third-party complaint against Rainer
Realty Acquisition (“RRA”) and Rainer GSA Portfolio (“Rainer GSA”), collectively, “Third-

1

Party Defendants” or “Rainier,”1 alleging that Rainier has a duty to indemnify Blair against
UIRC’s claims in this litigation and a breach of contract claim. RRA moved to dismiss Blair’s
equitable indemnity (Count III) and contribution (Count IV) claims and Rainier collectively
moved to dismiss Blair’s remaining claims—Count I and Count II—all pursuant to Rule
12(b)(6). For the following reasons, the Court grants Rainier’s motion to dismiss.
BACKGROUND
Blair was UIRC’s investment banker and placement agent in connection with Plaintiff’s
bond offering, the proceeds of which were used to acquire a portfolio of real estate properties.
(R. 89, Fourth Am. Compl. ¶ 6.) This case arises from Blair’s alleged copyright infringement of
UIRC’s bond documents and use of those documents to solicit other clients, including Rainier.
(Id. ¶¶ 13-16.) In considering this motion, the Court presumes familiarity with the background
of this action as set forth in the Court’s previous orders and does not recite a detailed background
here. The Court will, however, provide a brief factual background, particularly as it pertains to
the new allegations in Blair’s Counterclaim and Third-Party Complaint.
RRA is a Texas specialty real estate investment company that provides preferred equity,
mezzanine, and mortgage debt to quality commercial properties in growth markets throughout
the United States, and specifically it is in the business of acquiring and operating GSA buildings,
some of which are financed through the sale of GSA revenue bonds. (Third-Party Compl. ¶ 2.)
On or about February 5, 2015, Blair entered into an engagement letter agreement with RRA to
render financial advisory and investment banking services (the “Rainier Engagement Letter”).
(Id. ¶ 7.) Under the Rainier Engagement Agreement, Blair was tasked with assisting RRA with

1
In its Third-Party Complaint, Blair refers to RRA and Rainier GSA as “Rainier” without distinction
between the two entities. Rainier GSA and RRA are in fact different corporate entities, and accordingly,
when the Court refers to RRA or Rainier GSA in this opinion, it is referring to that specific entity, and
when it refers to Rainier, it is referring to the two entities collectively.
2

the issuance of GSA revenue bonds for the acquisition of a portfolio of properties leased to the
GSA. (Id. ¶ 8.) Blair was required to assist in the preparation of any solicitation materials, the
private placement memorandum used for the deal, and other offering materials. (Id.) In the
Agreement, RRA acknowledged that “Blair is not and will not be construed as a fiduciary of
[RRA] and will have no duties or liability to . . . [RRA] . . . by virtue of this agreement, and the
retention of Blair hereunder, all of which duties and liabilities are hereby expressly waived.” (Id.
¶ 9.) RRA also agreed to rely on its own counsel and advisors for “legal, accounting, tax, and
similar advice.” (Id.) Blair alleges that RRA understood and agreed that it was solely
responsible for the documents prepared in connection with its own GSA revenue bond offering
and that Blair was not offering RRA legal advice under the Agreement. (Id. ¶ 10.)
On or about January 30, 2015, Blair and RRA separately entered into an indemnity
agreement (the “Rainier Indemnity Agreement”), which they incorporated by reference into the
Rainier Engagement Agreement. (Id. ¶ 11.) In the Indemnity Agreement, RRA agreed to
indemnify and hold harmless Blair “from and against any and all losses, claims, damages, or
liabilities (collectively, ‘Losses’) and reasonable expenses incurred by them (including all fees
and expenses of Blair’s . . . incurred at [RRA’s] request or otherwise incurred and reasonably
required in connection with the investigation of any pending or threatened claims or preparation
for any pending or threatened litigation or other proceedings) . . . arising out of or relating to
Blair’s engagement under such letter agreement.” (Id. ¶ 12.) The Indemnity Agreement also
states that RRA “will not, without the prior written consent of Blair, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder . . . unless such
settlement . . . includes an unconditional release of Blair . . . from all liability arising out of such

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claim, action, suit, or proceeding.” (Id. ¶ 13.) The Indemnity Agreement also indemnifies
“Other Identified Parties” including “the respective members, principals, partners, directors,
officers, and employees of Blair and its affiliates.” (Id. ¶ 14.) In connection with Blair’s
engagement with RRA, Blair worked with RRA and counsel on certain deal documents
governing the creation and issuance of GSA revenue bonds on behalf of RRA. (Id. ¶ 15.)
Blair also separately represented UIRC on unrelated deals and worked with UIRC on
placement memoranda relating to the creation and issuance of revenue bonds relating to different
GSA properties. (Id. ¶ 16.) UIRC filed a copyright infringement lawsuit against Rainier GSA
and served a subpoena on Blair seeking certain documents, and, after responding to the
subpoena, Blair sent a letter to RRA’s counsel notifying RRA of its costs and expenses incurred
in relation to the subpoena and reserving the right to seek reimbursement pursuant to the Rainier
Indemnity Agreement. (Id. ¶¶ 16-20.) Blair did not receive a response from RRA. (Id.) On
October 11, 2016, UIRC settled with Rainier GSA, but Blair never received any notice from
RRA of the settlement as required by the Indemnity Agreement, nor did RRA request Blair’s
consent to settle the underlying action with UIRC or obtain an unconditional release from UIRC
of Blair relating to any claims in this case. (Id. ¶¶ 21-22.) Also on October 11, 2016, UIRC filed
an amended complaint against Blair and Kalt, relating to their work on the RRA engagement.
(Id. ¶ 24.) On November 4, 2016, Blair’s counsel sent RRA a renewed demand for
indemnification and defense and notified RRA of its breach of the Indemnity Agreement, but on
December 13, 2016, RRA declined Blair’s request for indemnification. (Id. ¶¶ 25-26.) Since the
filing of the complaint against Blair, Blair has incurred significant legal costs and expenses
defending itself against UIRC’s claims, which arise from RRA’s engagement. (Id. ¶ 28.)

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As noted above, despite the corporate distinction between RRA and Rainier GSA, all
Blair’s claims in its Third-Party Complaint are against RRA and Rainier GSA collectively,
which Blair refers to as “Rainier.” In Count I, Blair claims that Rainier, collectively, has a
contractual duty indemnify Blair pursuant to the Rainier Engagement Agreement. In Count II,
Blair claims that Rainier, collectively, breached the Rainier Engagement Agreement by failing to
defend and indemnify Blair in the UIRC litigation and by settling with UIRC without written
consent from Blair. In Count III, Blair claims that, due to Rainier’s agency relationship with
Blair, Rainier, collectively, has a common law duty to indemnify Blair for any liability resulting
from Rainier’s own acts, omissions, and/or negligence arising out of the UIRC litigation. In
Count IV, Blair claims that the damages alleged in UIRC’s complaint are the result of Rainier’s
acts, omissions, and/or negligence, and accordingly, if Blair or Kalt are found liable in any way,
Blair is entitled to a contribution from Rainier, collectively for those damages and for its legal
fees and expenses pursuant to the common law principles of contribution.
LEGAL STANDARD
“Federal Rule of Civil Procedure 12(b)(6) permits a motion to dismiss a complaint for
failure to state a claim upon which relief can be granted.” Hill v. Serv. Employees Int’l Union,
850 F.3d 861, 863 (7th Cir. 2017). Under Rule 8(a)(2), a complaint must include “a short and
plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.
8(a)(2). The short and plain statement under Rule 8(a)(2) must “give the defendant fair notice of
what the claim is and the grounds upon which it rests.” Bell Atlantic v. Twombly, 550 U.S. 544,
555 (2007) (citation omitted). Under the federal notice pleading standards, a plaintiff’s “factual
allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550
U.S. at 555. Put differently, a “complaint must contain sufficient factual matter, accepted as

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true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Twombly, 550 U.S. at 570). In determining the sufficiency of a complaint under
the plausibility standard, courts must “accept as true all of the well-pleaded facts in the complaint
and draw reasonable inferences in favor of [the] plaintiffs.” Hill, 850 F.3d at 863; see also
Roberts v. City of Chi., 817 F.3d 561, 564 (7th Cir. 2016). In ruling on a Rule 12(b)(6) motion,
district courts may also consider documents attached to the pleadings without converting the
motion into a motion for summary judgment, as long as the documents are referred to in the
complaint and central to the claims. See Runnion ex rel. Runnion v. Girl Scouts of Greater Chi.
& Nw. Indiana, 786 F.3d 510, 528 n. 8 (7th Cir. 2015).
ANALYSIS
Rainier GSA, alone, has moved to dismiss Counts I and II in Blair’s Third-Party
Complaint. RRA and Rainier GSA, collectively, have moved to dismiss Counts III and IV of
Blair’s Third-Party Complaint. The Court addresses each Count in turn.
I.

Counts I and II—Contractual Indemnity and Breach of Contract
In Count I, Blair claims that Rainier, collectively, has a contractual duty to indemnify

Blair pursuant to the Rainier Engagement Agreement. In Count II, Blair claims that Rainier,
collectively, breached the Rainier Engagement Agreement by failing to defend and indemnify
Blair in the UIRC litigation and by settling with UIRC without written consent from Blair.
Rainier GSA2 argues that only RRA and Blair were parties to the Rainier Engagement
Agreement and Rainier GSA was not a party to that agreement, thus the Court should dismiss
Blair’s contractual (contractual indemnity and breach of contract) claims against Rainier GSA.

2
Rainier GSA and RRA filed a motion to dismiss collectively, but their arguments in Counts I and II are
on behalf of Rainier GSA only, so the Court refers to the Third-Party Defendants as Rainier GSA for
purposes of these counts.
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Blair concedes that only RRA—and not Rainier GSA—was a party to the Engagement
Agreement, but argues, despite these allegations, that the Court should disregard the corporate
distinction between Rainier GSA and RRA for purposes of the Agreement because Rainier GSA
was created by RRA to serve as a subsidiary for the GSA revenue bond deals at issue in the
Agreement. Blair also argues that the Agreement itself provides that RRA’s subsidiaries were
bound by the contract. (See R. 121, Rainier’s Mot. to Dismiss, Ex. B Rainier Engagement
Agreement 2 (“If all or any portion of the business of the [RRA] is engaged in through
subsidiaries or other affiliates, the references in this paragraph to [RRA] will, when appropriate,
be deemed also to include such subsidiaries or other affiliates.”)) Rainer GSA responds that the
Court should not disregard the corporate distinction between Rainier GSA and RRA for purposes
of this contract because RRA and Rainier GSA are distinct entities, and Blair has not sufficiently
plead facts to warrant piercing the corporate veil.
Despite Blair’s arguments, the Engagement Agreement does not, by its plain language,
provide that the indemnity provision applies to RRA’s subsidiaries.3 The provision upon which
Blair relies states that the references and provisions of one specific paragraph apply to RRA’s
subsidiaries, not the agreement as a whole or the indemnity provision. (See Rainier Engagement
Agreement 2 (“the references in this paragraph to [RRA] will, when appropriate, be deemed also
to include such subsidiaries or other affiliates.”) (emphasis added)) That particular paragraph

3
Although a court when ruling on a Rule 12(b)(6) motion is limited to a consideration of the pleadings,
“documents attached to a motion to dismiss are considered part of the pleadings if they are referred to in
the plaintiff’s complaint and are central to his claim.” Yassan v. J.P. Morgan Chase & Co., 708 F.3d 963,
975 (7th Cir. 2013) (internal quotations omitted). Here, Rainier has attached the Indemnity Agreement
and the Engagement Agreement to its Motion to Dismiss, these documents are referred to extensively in
Blair’s Third-Party Complaint, and they are central to Blair’s claims, so the Court may consider these
documents.
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does not include or reference an indemnity provision, and accordingly, the Agreement does not,
by its language, apply to RRA’s subsidiaries.
The Court’s inquiry must then focus on whether Blair has pleaded sufficient facts to
disregard Rainier GSA’s corporate form and show that Rainer GSA is an alter ego of RRA. In
Illinois,4 courts will pierce the corporate veil when (1) “there is such unity of interest and
ownership that the separate personalities of the corporation and the individual no longer exist”
and (2) “adherence to the fiction of separate corporate existence would sanction a fraud or
promote injustice.” Judson Atkinson Candies, Inc. v. Latini–Hohberger Dhimantec, 529 F.3d
371, 379 (7th Cir. 2008) (internal quotation marks omitted). Piercing the corporate veil,
however, “is a task which courts should undertake reluctantly.” Tower Inv’rs, LLC v. 111 E.
Chestnut Consultants, Inc., 317 Ill. App. 3d 1019, 1033 (1st Dist. 2007) (citing Pederson v.
Paragon Pool Enterprises, 214 Ill. App. 3d 815 (Ill. Ap. Ct. 1991); see also Hornsby v.
Hornsby’s Stores, Inc., 734 F. Supp. 302, 307-08 (N.D. Ill. 1990) (explaining that exceptions to
the rule providing that corporations have separate identities are “not favored and are stringently
applied”). Notably, in a breach of contract case, piercing the corporate veil is even more difficult
and courts often require “additional compelling facts,” such as a finding of fraud. Saletech, LLC
v. E. Balt, Inc., 20 N.E.3d 796, 806 (1st Dist. 2014) (citations omitted); see also Tower Investors,
371 Ill. App.3d at 1034 (requiring “additional compelling facts); RehabCare Grp. E., Inc. v.
Certified Health Mgmt., Inc., No. 07 C 2923, 2007 WL 3334500, at *2 (N.D. Ill. Nov. 8, 2007)
(noting it is “even more difficult” to pierce the corporate veil in a breach of contract case).
“Where there is no evidence of any misrepresentation, no attempt to conceal any facts, and the
parties possess a total understanding of all of the transactions involved, Illinois courts will not

4
Both parties agree that Illinois law applies here.
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pierce the corporate veil in a breach of contract situation.” Id. (citing Tower Investors, 371 Ill.
App.3d at 1034).
Several courts have granted motions to dismiss because the party seeking to disregard a
party’s corporate form failed to adequately plead the requirements for piercing the corporate veil.
In RehabCare, WL 3334500, at *3, for example, the court dismissed a breach of contract claim
premised upon the alter ego doctrine because the plaintiff’s alter ego allegation, which stated that
the defendants “operated without respect for corporate formalities,” was too conclusory to
withstand a motion to dismiss. The court also noted that the plaintiff had completely failed to
allege that the defendants’ corporate structure would sanction a fraud or injustice. Id. Similarly,
in Classic Fire & Marine Ins. Co. v. Illinois Ins. Exchange., No. 97 C 1256, 1997 WL 767290
(N.D. Ill. Dec. 3, 1997), the plaintiff asserted that two entities were “affiliate members of the
same corporate group, and [we]re subject to common control and ownership.” The court deemed
the plaintiff’s “conclusory” pleading to be insufficient with regard to the first requirement of the
alter ego test. Id. at *5; see also Hornsby, 734 F. Supp. at 307-08 (mere allegation that
corporations shared office space, office staff and directors is insufficient to suggest fraud or
injustice or that one corporation was the alter ego of another); Trustees of Cement Masons Fund,
Local 502 v. F & V Cement Contractors, No. 02 C 3979, 2004 WL 765368, at *3 (N.D. Ill. April
7, 2004), (dismissing because “barebones, conclusory allegation . . . [was] insufficient to state an
alter ego claim even under the liberal notice pleading requirements of Federal Rule of Civil
Procedure 8(a)”).
Here, Blair’s Third-Party Complaint does not even contain conclusory allegations about
Rainier’s corporate structure—Blair has failed to allege anything about the separate structures of
RRA and Rainier GSA. Blair also has failed to allege that Rainier’s corporate structure would

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promote fraud or injustice or that Rainier attempted to conceal facts or to misrepresent its
corporate form. Accordingly, the Court grants Rainier GSA’s motion to dismiss Blair’s
contractual claims against it without prejudice because Rainer GSA was not a party to the
Engagement Agreement and because Blair has failed to allege alter ego liability.
II.

Count III—Common Law Indemnity
In Count III, as an alternative to its claim for contractual indemnity, Blair claims that, due

to Rainier’s agency relationship with Blair, Rainier, collectively, has a common law duty to
indemnify Blair for any liability resulting from Rainier’s own acts, omissions, and/or negligence
arising out of the UIRC litigation. Rainier (Rainer GSA and RRA together) responds that
implied indemnity is only available in a quasi-contractual context and if premised on vicarious
liability, which Blair has failed to plead. Rainier also argues that Blair’s allegations do not
contain sufficient detail about the qualitative differences between its conduct and Rainier’s.5
Equitable or implied indemnity based on tort principles of relative blameworthiness no
longer exists in Illinois. Truck Components, Inc. v. K-H Corp., No. 94 C 50250, 1995 WL
692541, at *11 (N.D. Ill. Nov. 22, 1995) (citing American Nat’l Bank and Trust Co. v.
Columbus–Cuneo–Cabrini Medical Ctr., 154 Ill. 2d 347 (1992)). Implied indemnity, however,
is viable in the quasi-contractual context, but only if premised on vicarious liability. Id. at 288–
89. “Implied indemnity generally rises where the parties have failed to include an indemnity
provision in an agreement and there is reason for the court to read such a provision into the

5
In its Reply Brief, Rainier GSA also argues that Rainier GSA is not subject to Blair’s implied indemnity
claim because it did not have a pre-tort relationship with Blair and did not in fact exist when RRA agreed
to engage Blair. Rainier GSA, however, waived this argument by not including it in its opening brief in
support of its motion to dismiss. See, e.g., United States ex rel. Graziosi v. Accretive Health, Inc., No.
13-CV-1194, 2017 WL 1079190, at *10 (N.D. Ill. Mar. 22, 2017) (argument waived when raised for first
time in reply brief). Because Blair’s allegations refer to Rainier as one entity and because Rainier GSA
has waived its argument regarding corporate distinction for this Count, the Court refers to Rainier as one
entity in this Count.
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agreement.” Mizuho Corporate Bank v. Corey & Assoc., Inc., 341 F.3d 644, 652 (7th Cir. 2003)
(citations omitted). “To establish [an implied indemnity] claim, [a plaintiff] must allege a pretort relationship with [the defendant] and a qualitative difference in their conduct in the
occurrence.” Canadian Pac. Ry. Co. v. Williams-Hayward Protective Coatings, Inc., No. 02 C
8800, 2004 WL 2108413, at *4 (N.D. Ill. Sept. 21, 2004) (citing Frazer v. A.F. Munsterman,
Inc., 123 Ill. 2d 245, 255 (1988)). Importantly, “implied indemnity actions lie only where one
party is in some sense ‘at fault,’ and the other party is blameless though liable—typically
because of strict liability, respondeat superior, implied warranty, or some other legal principle
that imposed liability regardless of fault.” Mizuho, 341 F.3d at 652 (citations omitted).
Here, Blair has alleged that it did not take any actions to infringe on UIRC’s copyrights
and any damages UIRC has claimed are the result of Rainier’s “own acts, omission, and/or
negligence.” Blair also has alleged that Rainier, collectively, is liable to Blair due to the “agency
relationship” between the parties. These conclusory allegations are insufficient to support a
claim for equitable indemnity for several reasons. First, here, RRA and Blair had an indemnity
provision in the Rainier Engagement Agreement, and Blair has identified no cases in which a
court recognized an implied indemnity claim where the parties’ contract already expressly
provides for indemnity. Implied indemnity claims are appropriate where the “parties have failed
to include an indemnity provision in an agreement and there is reason for the court to read such a
provision into the agreement,” Mizuho, 341 F.3d at 652, not where, as here, the parties have
already negotiated and agreed to an indemnity provision. See, e.g., In re New Bern Riverfront
Dev., LLC, 516 B.R. 810, 827 (Bankr. E.D.N.C. 2014) (finding that it would be inappropriate to
imply indemnity where the parties’ contract already provides for indemnity because “indemnity

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implied [ ] is not a backup plan, to which a [party] may resort when flawed contractual
provisions overreach and are then curbed.”)
Second, Blair’s conclusory allegations fail to show that there is a “qualitative difference”
between its conduct and Rainier’s conduct. Blair merely alleges, in boilerplate fashion, that
UIRC’s claimed damages are the result of Rainier’s conduct and not Blair’s, but Blair’s
Complaint provides no details about Blair’s conduct or Rainier’s conduct in relation to the
allegedly copyrighted documents. Blair does not allege which party drafted the documents,
which party used the documents or how they used the documents, or any other details about the
parties’ involvement in the alleged infringing activity. Devine v. Cyprus Indus. Minerals, No. 90
C 1335, 1991 WL 76123, at *2 (N.D. Ill. May 3, 1991) (dismissing third-party implied
indemnity claim in part because plaintiff failed to sufficiently allege qualitative distinction
between parties’ conduct); Winfield Design Assocs., Inc. v. Quincy Jefferson Venture, 569 F.
Supp. 748, 749 (N.D. Ill. 1983) (dismissing implied indemnity claim because plaintiff’s
complaint alleged “no facts in support of its conclusory assertion” that there was a qualitative
difference between the parties’ conduct).
Lastly, Blair has also failed to allege vicarious liability. As noted above, implied
indemnity is only available when it is premised on vicarious liability, and as such, courts will
reject implied indemnity claims that are based entirely on conduct for which a party would be
held directly liable (as opposed to merely vicariously liable due to the nature of the parties
relationship). In Louisiana Firefighters’ Ret. Sys. v. N. Tr. Invs., N.A., No. 09 C 7203, 2012 WL
601861, at *3 (N.D. Ill. Feb. 23, 2012), for example, investment firms for pension funds brought
a third-party complaint against the pension funds’ board arguing that they were equally liable for
the investment funds’ losses at issue in the underlying lawsuit against the investment firms. The

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court rejected the investment firms’ implied indemnity claims because if the investment firms
were found liable in the underlying litigation, it would be solely due to their own misconduct, not
because of any vicarious relationship with the board. Id. The court reasoned that “[b]ecause
they cannot be both blameless and liable, they have no claim for implied indemnity.” Id. See
also Truck Components, WL 692541, at *11 (rejecting implied indemnity claim because plaintiff
claimed that third-party was “directly liable” for the damages at issue and thus failed to allege
vicarious liability).
Accordingly, the Court dismisses Blair’s common law indemnity claim without
prejudice.
III.

Count IV—Contribution
In Count IV, Blair claims that the damages alleged in UIRC’s complaint are the result of

Rainier’s acts,6 omissions, and/or negligence, and accordingly, if Blair or Kalt are found liable in
any way, Blair is entitled to a contribution from Rainier for those damages and for its legal fees
and expenses pursuant to the common law principles of contribution. Rainier argues that this
claim fails because Blair has failed to plead that Blair and Rainier had a joint financial obligation
to a third party created by an agreement or statute.
“In an action for common law contribution, the right to contribution arises due to the
compulsory payment by a joint obligor of more than his share of a common obligation.” Flynn
v. Levy, 832 F. Supp. 2d 951, 955 (N.D. Ill. 2011) (citing Ruggio v. Ditkowsky, 147 Ill. App. 3d
638 (2d Dist. 1986). To recover under a theory of common law contribution, the co-obligor must
demonstrate “that he has paid more than his just proportion of the joint indebtedness” as well as

6
 Because Blair’s allegations refer to Rainier as one entity and because Rainier GSA does not make any
arguments regarding the corporate distinction between RRA and Rainier GSA with respect to this Count,
the Court refers to Rainier as one entity in this Count. 
13

the amount of that excess. Id. In Illinois, the common law right to equitable contribution
typically arises in the context of co-insurers, but several Illinois courts have found a right to
equitable contribution outside of that context where the parties had a joint financial obligation to
a third party created by agreement or statute. See, e.g., Roe v. Estate of Farrell, 69 Ill. 2d 525,
(1978) (joint tenancy); Ruggio, 147 Ill. App. 3d 638 (co-signed promissory notes); Tembrina v.
Simos, 208 Ill. App. 3d 652 (1st Dist. 1991) (mortgage held by partnership where each partner
was jointly and severally liable for payments); Fletcher v. Marshall III, 260 Ill. App. 3d 673 (2d
Dist. 1994) (co-tenant on apartment lease); Aardema v. Fitch, 291 Ill. App. 3d 917 (1st Dist.
1997) (common corporate obligation); see also Kudlicki v. MDMA, Inc., No. 05–02589, 2006
WL 1308617, at *4–5 (N.D. Ill. May 10, 2006).
Here, Blair’s contribution claim fails. Blair does not cite to any case law, much less any
case law in which parties successfully brought contribution claims in relation to copyright
infringement lawsuits or in relation to work product an investment bank created for its client.
More importantly, unlike co-signors on a promissory note, or parties to a mortgage agreement or
apartment lease, where the parties have signed a written agreement holding them jointly liable
for a financial obligation to a third party, here, Blair has merely alleged that the damages
complained of by UIRC in the underlying litigation resulted from Rainier’s acts, omissions, or
negligence. Blair has failed to allege that Blair and Rainier had a joint obligation to UIRC
created by agreement or statute, and several court have found similarly unsupported contribution
allegations insufficient to state a claim. See, e.g., Louisiana Firefighters’ Ret. Sys. v. N. Tr.
Investments, N.A., No. 09 C 7203, 2012 WL 601861, at *4 (N.D. Ill. Feb. 23, 2012) (dismissing
contribution counterclaim brought by defendant-investment advisor against pension system
boards because “there is no statute or agreement that could create a joint obligation by the

14

[b]oards and defendants to plaintiffs.”); Flynn v. Levy, 832 F. Supp. 2d 951, 958 (N.D. Ill. 2011)
(dismissing contribution claim where plaintiff sought legal fees and payment for damages in
underlying lawsuit because plaintiff failed to allege joint obligation created by agreement or
statute and only requested money plaintiff believed defendants owed them); Canadian Pac. Ry.
Co. v. Williams-Hayward Protective Coatings, Inc., No. 02 C 8800, 2004 WL 2108413, at *3
(N.D. Ill. Sept. 21, 2004) (dismissing defendant’s contribution claim because defendant failed to
allege in counterclaim a joint obligation between it and third-party plaintiff).
Accordingly, the Court grants Rainier’s motion to dismiss Blair’s contribution claim
without prejudice.
CONCLUSION
For these reasons, the Court grants Rainier’s motion to dismiss Blair’s Third-Party
Complaint without prejudice.
Dated: August 25, 2017

ENTERED

______________________________
AMY J. ST. EVE
United States District Court Judge

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