Walls v. VRE Chicago Eleven, LLC et al

Filing 215

MEMORANDUM Opinion and Order: Defendants' motion for reconsideration 210 is denied. Signed by the Honorable Thomas M. Durkin on 11/1/2018:Mailed notice(srn, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
RAYMOND L. and TERRYLL ANN WALLS,
as Co-Trustees of the RAYMOND L. WALLS
AND TERRYLL ANN WALLS
DECLARATION OF TRUST
DATED MAY 30, 2002,
AS AMENDED JULY 18, 2013,
Plaintiffs,
v.
VRE CHICAGO ELEVEN, LLC,
VERDAD REAL ESTATE, INC.,
EXP REALTY ADVISORS, INC.,
TARTAN REALTY GROUP, INC.,
BAKER MONROE PLLC,
B. JASON KEEN,
ROBERT J. MOORHEAD, RUSSELL SMITH,
CHRIS BAKER, JUSTIN HUSTON,
VPC CHICAGO11, LLC,
VESTAPOINT CAPITAL II LLC,
AARON STEARNS, and MATT LANGFIELD,
Defendants.
VERDAD REAL ESTATE, INC., and
VRE CHICAGO ELEVEN, LLC,
Third-Party Plaintiffs,
v.
MARK A. REINSCH,
MARK A. REINSCH, P.A.,
DTZ AMERICAS, INC.,
CUSHMAN & WAKEFIELD, INC., and
MATTHEW MCNEILL,
Third-Party Defendants.

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No. 16-cv-4048
Judge Thomas M. Durkin

MEMORANDUM OPINION AND ORDER
Before the Court is the Baker Monroe defendants’ motion to reconsider the Court’s
ruling on their motion to dismiss, or in the alternative, to certify a question of law for an
immediate appeal. The Court has reviewed the motion (R. 210, 211) and the additional
memorandum defendants submitted pursuant to this Court’s order on October 23, 2018
(R. 214). The Court continues to find that an exercise of personal jurisdiction over the
Baker Monroe defendants comports with the due process considerations of the
Fourteenth Amendment.
A court may exercise jurisdiction over a nonresident defendant if that defendant
has “certain minimum contacts” with the state “such that the maintenance of the suit
does not offend ‘traditional notions of fair play and substantial justice.’” International
Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Since International Shoe, the Supreme
Court has provided guidelines for what constitutes “minimum contacts” for courts
exercising jurisdiction over nonresident defendants. Most recently, courts have explained
that a defendant’s “minimum contacts” with the state must arise out of contacts that the
defendant himself creates with the forum state itself, and cannot be based solely on
plaintiff’s contacts with the forum or on defendant’s contacts with persons who reside in
the forum state. See Walden v. Fiore, 571 U.S. 277, 284 (2014). The Baker Monroe
defendants compare their case to cases dismissing defendants for lack of personal
jurisdiction under Walden because defendants’ only connection to the forum was their
contact with or impact on third parties who reside in the forum. 1
But this case implicates a simpler notion of personal jurisdiction, based on the
defendant’s contacts with the forum state itself. The Supreme Court in Walden did
nothing to alter the basic principle that courts may exercise personal jurisdiction over
defendants who have “purposefully ‘reach[ed] out beyond’ their state and into another by,
for example, entering a contractual relationship that ‘envisioned continuing and widereaching contacts’ in the forum state, . . . or by circulating magazines to ‘deliberately
exploi[t]’ a market in the forum state.” Id. at 285 (citations omitted). In those cases, as
the Walden Court explained, physical entry is not a prerequisite. Id.
Physical entry into Illinois by the Baker Monroe defendants would make this an
easier case, but it is not necessary to find the exercise of personal jurisdiction appropriate
here. The crux of the jurisdictional inquiry is whether the defendant’s own actions
connect him to the forum state itself, and not simply to a plaintiff who resides there. See
id. at 290 (“The proper question is not where the plaintiff experienced a particular injury
or effect but whether the defendant’s conduct connects him to the forum in a meaningful
way.”). In Calder v. Jones, 465 U.S. 783 (1984), that conduct was writing an article with
a “California focus” “for publication in California that was read by a large number of
California citizens.” Walden, 571 U.S. at 288. The article “connected the defendants to
For this reason, both Ariel Investments, LLC v. Ariel Capital Advisors LLC, 881 F.3d
520 (7th Cir. 2018) and Monco v. Zoltek, 2018 WL 4538728 (N.D. Ill. Sept. 21, 2018),
where the only connection to Illinois were the plaintiffs, are inapplicable.

1

California, not just to the plaintiff.” Id. Like in Calder, committing fraud involving
several Illinois properties undoubtedly connects the Baker Monroe defendants to Illinois
itself, not to plaintiffs or third parties located in the state. For this reason, the motion to
reconsider is denied.
The Court notes that the Baker Monroe defendants misconstrue the portion of the
Court’s previous opinion addressing Reinsch, the attorney who represented plaintiffs in
the transaction. Unlike the Baker Monroe defendants, who plaintiffs allege were directly
involved in the fraudulent scheme, the allegations concerning Reinsch relate only to his
representation of plaintiffs. Plaintiffs were located in California, and Reinsch was located
in Florida. Reinsch is not alleged to have done anything whatsoever directed at Illinois
itself. 2 The distinction the Court drew was not between fraudulent or negligent conduct,
as the Baker Monroe defendants contend. Rather, the distinction focused on the
relationship between Reinsch, Illinois, and the litigation. See id. at 284. Simply, Reinsch
did nothing to purposefully avail himself of Illinois’s jurisdiction by allegedly negligently
representing plaintiffs.
The Court also denies the Baker Monroe defendants’ motion to certify. An order is
appropriately certified for interlocutory appeal under 28 U.S.C. § 1292(b) if: (1) the order
“involves a controlling question of law”; (2) there is “substantial ground for difference of
opinion” as to that question; and (3) “an immediate appeal from the order may materially
advance the ultimate termination of the litigation.” The Baker Monroe defendants fail to
point to any case that suggests a “substantial ground for difference of opinion” as to
whether a fraudulent scheme involving several Illinois properties subjects a defendant to
jurisdiction in Illinois, despite the opportunity to file an additional memorandum for that
very purpose. 3
The Baker Monroe defendants’ motion to reconsider or to certify a question of law
for an immediate appeal, R. 210, is denied.
ENTERED:

Dated: November 1, 2018

______________________
Honorable Thomas M. Durkin
United States District Judge

Since the Court’s opinion, the allegations regarding Reinsch have been amended, and it
remains to be seen whether Reinsch will remain in the case.
2

Ryan v. Michiana Hardwoods, Inc., 2000 WL 1648953 (N.D. Ill. Nov. 1, 2000), which
defendants cite, is inapplicable. The property at issue there was located in Michigan, not
Illinois, and thus the court properly found that Illinois could not exercise jurisdiction over
the defendants.
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