Markou et al v. Equestrien Estates Homeowners Association et al

Filing 121

MEMORANDUM Opinion and Order Signed by the Honorable Edmond E. Chang on 6/18/2018. For the reasons stated in the Opinion, Defendants' motion 85 to dismiss is granted. The dismissal is for lack of subject matter jurisdiction as to certain claim s brought by Evmorfia Markou and Keith Schuth, and with prejudice as to the remaining claims. All other motions 119 are terminated as moot in light of the dismissal. A separate AO-450 judgment shall be entered. The motion hearing of 06/19/2018 is vacated. Civil case terminated. Mailed notice.(ym, )

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UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JOHN MARKOU, EVMORFIA MARKOU,
DEMETRI MARKOU, PATRICIA
HATABURDA, and KEITH SCHUTH,
Plaintiffs,
v.
EQUESTRIEN ESTATES
HOMEOWNERS ASSOCIATION,
STATE FARM, REMO TURANO,
MARRY ANN BACHELOR, DANIEL
NOONAN, CHARLES ENGLUND,
JOHN BERNACCHI, GREG
GILBERTSON, MARSHA HUNTER,
JAMES SCHULTE, ARNSTEIN AND
LEHR, O’HAGAN MEYER, ALLEN
GOLDBERG, JENIFER H.
CARCACCIOLO, DANIEL J. NOLAN,
and LUKE P. SHERIDAN,

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No. 17 C 04917
Judge Edmond E. Chang

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Defendants.

MEMORANDUM OPINION AND ORDER
The Plaintiffs in this case—all residents of the Equestrian Estates
subdivision of Lemont, Illinois—ask the Court to invalidate their homeowners’
association agreement and to award damages based on allegations that the
agreement was obtained by fraud in violation of their civil rights.1 See generally R.
65, Second Amended Complaint.2 The problem is that the Plaintiffs (or their
associates) already asked for similar relief in state court, and lost. The Defendants
1This

Court has subject matter jurisdiction over the case under 28 U.S.C. § 1331.
to the record are noted as “R.” followed by the docket number and the
page or paragraph number.
2Citations

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spotted this problem, and collectively moved to dismiss. R. 85, Mot. Dismiss. The
motion is granted. The Rooker-Feldman and claim-preclusion doctrines prevent the
Plaintiffs from re-litigating their unsuccessful state court claims in federal court.
And, even if these doctrines did not bar the Plaintiffs’ claims, the Second Amended
Complaint largely fails to state a claim upon which relief could be granted. So the
Second Amended Complaint must be dismissed. Because the Plaintiffs have already
had three tries at producing a viable complaint (each attempt producing a tangle of
allegations and legal citations), further amendment will not be allowed. The
dismissal is for lack of subject matter jurisdiction (and thus technically without
prejudice) insofar as the complaint asks the Court to review the decision of the state
court, and with prejudice as to all other claims. See Lennon v. City of Carmel, Ind.,
865 F.3d 503, 509 (7th Cir. 2017).
I. Background
The 300-plus allegations in the Second Amended Complaint are not easy to
understand. The complaint lacks any apparent chronological or thematic
organization, and frequently mixes factual allegations with difficult-to-follow legal
citations and argument. See, e.g., Second Am. Compl. ¶¶ 12-25, 40-45, 166-69, 26265. The factual allegations are confusingly worded, making it at times difficult or
impossible to understand what actual events are being described. See, e.g., id. ¶ 14
(“We claim Allan Goldberg uttered a forged instrument”), ¶ 27 (“We claimed in
Patricia’s affidavit from 2015 Tab F Exhibit U, page 2 sec 2, case number 11 CH
21124, shows Arnstein and Lehr’s response in part to State Farm.”), ¶ 84 (“It was

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claimed in Evmorfia’s affidavit, a contract was not disclosed to her.”). To make
matters worse, the Plaintiffs appended hundreds of pages of supporting
documentation to the complaint. This documentation comprised affidavits from the
Plaintiffs and others (which contained their own factual allegations and legal
arguments), and various documents purporting to prove the Plaintiffs’ claims of
fraud (often without context or explanation). But, as far as it is possible to discern
the factual allegations, the Court takes them as true. See Erickson v. Pardus, 551
U.S. 89, 94 (2007).
A. The Parties
Before diving into the facts, it is worth giving a quick overview of the cast of
characters. The Plaintiffs are all residents of the Equestrian Estates subdivision in
Lemont, Illinois. See Second Am. Compl. Tab D ¶ 1, Tab E ¶ 1;3 R. 92, Defs.’ Br.
Exh. K. Plaintiffs John and Evmorfia Markou are married, and Plaintiff Demetri
Markou4 is their son. Second Am. Compl. Tab C ¶¶ 2-3. All three reside at 6 Surrey
Lane (also referred to as “6 Surrey Court”) in Lemont, Illinois. Id. ¶ 1, Tab D ¶ 1,
Tab J ¶ 1 at 1. Plaintiff Patricia Hataburda lives at 75 Horseshoe Lane in Lemont,
Illinois. See id. Tab A Exhs. O, Q. Patricia is married to Richard Hataburda (not a
party to the present case), who also lives at 75 Horseshoe Lane. Id. ¶ 132, Tab A
3The

Plaintiffs attached extensive supporting exhibits to the Second Amended
Complaint. These are organized into “tabs,” and most tabs contain both affidavits and
exhibits, which are identified by letters. Citations to these supporting materials will refer to
them by tab number and exhibit number for the exhibits (for example, “Tab A Exh. A”), or
tab number and page or paragraph number for the affidavits (for example, Tab C ¶ 1).
4This individual’s name is spelled “Demetri Markou” in the case caption. In other
places in the complaint and supporting exhibits, it is rendered “Demetrio’s,” see, e.g.,
Second Am. Compl. ¶¶ 182, 240, or “Demetrios,” id. at p. 74, ¶ 297. The opinion will use the
spelling in the caption.

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Exh. Q. Finally, Plaintiff Keith Schuth resides at 35 Horseshoe Lane in Lemont,
Illinois. Id. Tab E.
The Plaintiffs have sued a number of different defendants. (Many of these
defendants’ names are misspelled in the Second Amended Complaint and the case
caption, so the spelling of the defendants’ names is taken from the Defendants’
brief. See Defs.’ Br. at 1.) The first group of defendants is associated with the
Equestrian Estates Homeowners Association (“the HOA” for short). These include
the HOA itself and a group of individuals who appear to be current or former HOA
board members: Greg Gilbertson, Remo Turano, Mary Ann Bachelor, Daniel
Noonan, Marsha Hunter, Charles Englund, James Schulte, and John Bernacchi. See
id. State Farm Fire and Casualty Company, the HOA’s insurer, is also a defendant.
Id.; see also Second Am. Compl. at p. 2-3.5 The Plaintiffs also sued State Farm’s
former law firm, O’Hagan Meyer, and two O’Hagan Meyer attorneys, Daniel Nolan
and Luke Sheridan. Defs.’ Br. at 1; see Second Am. Compl. at p. 3-4. Finally, the
HOA’s law firm, Arnstein & Lehr, LLP, and two Arnstein attorneys, Allan Goldberg
and Jenifer Caracciolo, are also named as defendants. Defs.’ Br. at 1; see Second
Am. Compl. at p. 1-2, ¶ 2.
B. Adoption of the Amended Declaration
The major thrust of the Second Amended Complaint is that the Equestrian
Estates Homeowners Association improperly amended its governing declaration to

5The

Second Amended Complaint contains both numbered paragraphs and several
pages of non-numbered text. Citations to the numbered paragraphs will be identified with a
“¶” symbol; citations to the non-paragraph-numbered text will be by page number, with the
abbreviation “p.” to differentiate the page numbers from the paragraph numbers.

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the Plaintiffs’ detriment. See Second Am. Compl. at p. 1-3. According to the
Plaintiffs, the HOA and its associates engaged in all kinds of shady conduct to
secure approval of the Amended Declaration. For example, in order to get the
homeowner signatures needed to approve the amendment, HOA members allegedly
lied to homeowners about what they were signing. See, e.g., id. ¶¶ 67, 91-92, 277.
Evmorfia Markou was told that the card she was signing was “for a gift” when it
was actually a consent to modify the HOA declaration. Id. ¶¶ 82, 84. Keith Schuth
was similarly deceived. HOA board member James Schulte allegedly got Keith
drunk and got him to sign a consent card by telling Keith that it was “to have his
information on file.” Id. ¶¶ 97-98. The complaint also alleges that Evmorfia Markou
was “coerced” to sign John Markou’s name without his knowledge or consent, but
does not explain the nature of the coercion. Id. ¶ 85. There are also allegations that
some signatures were forged, but without many details. See id. ¶¶ 78, 92.
The Plaintiffs also argue that the adoption of the Amended Declaration was
procedurally improper. It is difficult to fully understand these allegations, but the
gist is that the Original Declaration governing Equestrian Estates6 set out certain
procedures for amendments, which were not followed during the adoption of the
Amended Declaration. The complaint alleges that, per the Original Declaration, no
amendment was allowed to take effect unless homeowners were given 90 days’
written notice of the proposed change. Id. ¶ 55. At that point, the “committee” had a
year to get the then-owners of two-thirds of the lots to sign a “fully disclosed dated

6The

Plaintiffs call the Original Declaration the “organic declaration,” see id. at p. 3.

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notarized contract/instrument with verifiable witnesses.” Id. (emphasis omitted).
Instead of following these procedures, Defendants Mary Ann Bachelor and James
Schulte falsely certified that the homeowners received 90 days’ notice and that the
required percentage of homeowners had voluntarily consented to the amendment.
See id. ¶¶ 64-66, 69. The HOA’s lawyer, Defendant Allan Goldberg of Arnstein &
Lehr, was the “princip[al] author” of the improper Amended Declaration, id. at p. 1,
and allegedly knew that the Amended Declaration was not consistent with the
Original Declaration, id. ¶ 10.
C. State Court Litigation
In 2011, litigation commenced over the Amended Declaration. The Second
Amended Complaint is not especially clear on what happened, when it happened, or
who was involved. But the Defendants included certain pleadings and opinions from
the various state court cases surrounding the Declaration in the exhibits to their
brief. The Court takes judicial notice of these state court documents because they
are a matter of public record. See, e.g., Milwaukee Police Ass’n v. Flynn, 863 F.3d
636, 640 (7th Cir. 2017) (citation omitted). It is also fair to consider these documents
because they are incorporated by reference in the Second Amended Complaint. Id.
These pleadings and opinions provide a clearer picture of what happened in the
various state court cases.
1. The 2011 Chancery Litigation and the 2011 Law Litigation
In 2011, Patricia Hataburda brought a lawsuit in Cook County Chancery
Court, Patricia Hataburda v. Equestrian Estates Homeowners Association, 11 CH

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09468. Hataburda sought a judgment that the Amended Declaration was “a nullity
and unenforceable” for more or less the same reasons outlined in the Second
Amended Complaint, plus some additional arguments. See Defs.’ Br. Exh. B, 2011
Chancery Complaint ¶¶ 4, 10-18, 28-30, 54(A). That same year, Hataburda filed
another lawsuit, this time in the Law Division, captioned Patricia Hataburda v.
Daniel Noonan, 11-L-65043. This lawsuit alleged that then-HOA board member
Daniel Noonan had breached his fiduciary duties by failing to disclose 2011
Chancery litigation to HOA members, and claimed malicious prosecution based on a
forcible entry and detainer action filed against Patricia Hataburda. Defs.’ Br. Exh.
D, 2011 Law Complaint ¶¶ 2, 7, 36. Eventually, Patricia Hataburda entered into a
settlement agreement releasing her claims in both cases. Defs.’ Br. Exh. C, Patricia
Hataburda Settlement Agreement.
The Second Amended Complaint alleges that this settlement agreement was
obtained through underhanded conduct by the HOA, its board members,
Hataburda’s then-attorney Thomas Murphy, and the judge in the case. The
Plaintiffs allege that when the Hataburdas arrived at the courthouse to try to
negotiate a settlement, two Arnstein & Lehr attorneys, Defendant Jenifer
Caracciolo7 and Mary Cannon Veed (not a defendant in this case) were meeting
with the judge in the jury room. Id. ¶ 132. Several HOA members were also present
in the jury room, including Defendants Daniel Noonan, Greg Gilbertson, and
Marsha Hunter. Id. ¶ 133. The Hataburdas’ attorney was called into the room, but

7Her

name is misspelled as “Jenifer H. Carcacciolo” in the Second Amended
Complaint. See Mot. Dismiss at 1.

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the Hataburdas were told to stay outside. Id. ¶ 134. When the Hataburdas were
finally allowed into the room, they were told that they had to sign the settlement
agreement or pay Arnstein & Lehr’s court costs. Id. ¶ 136. Someone (the complaint
does not say who) told the Hataburdas “you can’t win against such a prestigious law
firm.” Id. ¶ 136 (emphasis omitted). The judge and Veed then “grilled” the
Hataburdas, and the judge told them that the HOA was “mandatory” and that they
were members “like it or not.” Id. ¶ 138 (emphasis omitted). During this
conversation, Murphy was silent and unhelpful. Id. ¶ 137. The Plaintiffs allege that
the HOA bribed Murphy to “take a DIVE” and not object to this “aggressive
coercion.” Id. ¶ 148 (capitalization in the original). Patricia eventually signed the
settlement agreement, but her husband refused. Id. ¶¶ 139, 141.
Patricia regretted her decision, and sent the presiding judge a letter titled
“Agreement under Duress.” Id. ¶ 161; see also Second Am. Compl. Tab A Exh. N. In
this letter, Patricia explained that she felt that she had signed the agreement under
duress and asked to “continue my lawsuit.” Second Am. Compl. Tab A Exh. N. One
of the judge’s staff attorneys responded, stating that they had received the letter,
but that they would not read it due to concerns over improper ex parte
communication. Id. Tab A Exh. O. The letter recommended that Patricia speak to
her attorney to resolve her issues, and also advised her that she could file
appropriate motions before the judge with notice to the other side. Id. Patricia’s
attorney was copied on the letter. Id.

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2. The State Farm Declaratory Judgment Litigation
Also in 2011, State Farm, the HOA’s insurer filed an action in Cook County
Chancery Court seeking a declaratory judgment that State Farm was not
responsible for the costs of the Hataburda litigation. See Defs.’ Br. Exh. E, State
Farm Complaint. This case was captioned State Farm Fire & Casualty Co. v.
Equestrian Estates Homeowners Association and Patricia Hataburda, 11 CH 21124.
The state court held that State Farm had a duty to insure the HOA for the
Hataburda lawsuit. Defs.’ Br. Exh. F, State Farm Opinion.
The plaintiffs in this federal case were only peripherally involved in the State
Farm litigation (Patricia Hataburda was a nominal defendant; the rest were not
parties at all). The Second Amended complaint contains, however, a number of
allegations related to the State Farm litigation. The Plaintiffs argue that the State
Farm Declaratory Judgment Litigation demonstrates State Farm’s knowledge of the
fraud underlying the Amended Declaration, because the basis of State Farm’s
complaint was that it did not have a duty to insure fraud. Second Am. Compl. at p.
2. This appears to be a misreading of State Farm’s lawsuit, which asserted only that
Patricia’s allegations fell outside the scope of State Farm’s coverage. See generally
Mot. Defs.’ Br. Exh. E, State Farm Complaint. State Farm did not argue that the
Amended Declaration itself was fraudulent. Id.
The Plaintiffs also allege that Arnstein & Lehr attorneys falsely claimed
during the State Farm declaratory judgment litigation that the Equestrian Estates
Association did not own a common area. Second Am. Compl. at p. 2-3, Tab A Exh. L

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at 2. The Second Amended Complaint does not explain what impact this false
statement had on the State Farm litigation or on the Plaintiffs.
3. The 2012 Chancery Litigation
In 2012, a group of Equestrian Estates homeowners brought a case in Cook
County Court alleging that the Amended Declaration was unlawful (case number 12
CH 19220). The original plaintiffs were Patricia Hataburda, Eve Markou,8 Susan
Hamdan, and Keith Schuth. Defs.’ Br. Exh. G, 2012 Chancery Complaint. The
complaint named the HOA as a defendant, along with several board members, some
of whom are now defendants in the federal case. The plaintiffs later amended their
complaint, substituting Richard Hataburda for Patricia Hataburda, and dropping
all the defendants except the HOA, Remo Turano, Mary Ann Bachelor, and Daniel
Noonan. See Mot. Dismiss Exh. H, 2012 Chancery Amended Complaint. The
amended complaint was confusingly drafted, but generally alleged that the
Amended Declaration was invalid. See generally id. The amended complaint in the
2012 Chancery Litigation made substantially the same factual allegations in
support of this argument as the Second Amended Complaint does in the current
federal case. Specifically, the amended complaint alleged that homeowners had
been tricked or intimidated into signing signature cards, id. ¶ 11; the amendment
had not been approved by the “then owners of two thirds of the Lots,” id.; the HOA
failed to provide the required notice, id.; and the defendants later falsely
represented that the Amended Declaration was properly adopted, id. ¶ 12. It

8“Eve”

is apparently Evmorfia Markou’s nickname. See Second Am. Compl. p. iii,
Tab A Exhs. T-V; id. ¶¶ 82, 84, 87.

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further alleged that the defendants had attempted to collect “unlawful assessments”
based on the Second Amended Declaration, and that when the homeowners would
not pay the assessments, the defendants filed liens and collection lawsuits against
them. Id. ¶¶ 14-15.
The defendants moved to dismiss the amended complaint. See Second Am.
Compl. Tab P. The Cook County Circuit Court granted the motion and dismissed
the amended complaint with prejudice. Defs.’ Br. Exh. I, Appellate Court Opinion,
case no. 1-14-0431 at 1. In 2015, the Illinois Appellate Court issued a written order
affirming the dismissal. Id.
D. Other Allegations
1. Debt Collection Efforts
Apart from the factual allegations related to the adoption of the Amended
Declaration and the resulting litigation, there are a number of allegations about the
defendants’ efforts to collect “unlawful debt,” accompanied by citations to the
Second Amended Complaint’s attached exhibits. See, e.g., Second Am. Compl.
¶¶ 167, 176, 191, 216-226. Although the references to “unlawful debt” are vague on
their own, the citations to the accompanying documents make clear that the
plaintiffs are referring to efforts to enforce HOA rules and collect HOA fees. See
Second Am. Compl. Tab O Exh. J (Hataburda HOA account statements); Tab A
Exh. Y (John and Evmorfia Markou HOA account statements); Tab B Exh. I (letter
to Markou family regarding HOA fines); Tab A Exh. Z, Tab E Exh. I (Schuth HOA

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account statements and eviction documents). The Plaintiffs characterize these debt
collection efforts as “extortion.” See, e.g., Second Am. Compl. ¶¶ 167, 217, 284, 295.
2. Defendants’ Receipt of Evidence of Fraud
Many of the allegations and exhibits in the Second Amended Complaint are
dedicated to showing that various defendants were made aware of the supposed
fraud surrounding the Amended Declaration. See, e.g., Second Am. Compl. Tab K,
Tab N. For example, the complaint alleges that State Farm knew or should have
known at the time of the declaratory judgment action that the Amended
Declaration was fraudulent. Id. at p. 2-3. It also states that “notice was brought
directly home to State Farm at the end of the appellate case of systemic fraud.” Id.
at p. 3. Although these accusations are difficult to understand, it seems that in 2015
(around the time of the issuance of the Appellate Court opinion in the 2012
Chancery lawsuit), the Plaintiffs sent a number of affidavits with supporting
documentation to State Farm and/or State Farm’s attorneys at O’Hagan Meyer. See
Second Am. Compl. ¶¶ 108-118. State Farm did not respond to these documents,
and continued to insure the HOA. Id. ¶¶ 118, 125, p. 3. The Plaintiffs apparently
sent similar documents to Arnstein & Lehr in 2015. See id. ¶¶ 241-42. Arnstein &
Lehr and the HOA continued to “assault” the plaintiffs with “bills of unlawful debt”
even after receiving these documents. Id. ¶ 243.
II. Legal Standard
“A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to
state a claim upon which relief may be granted.” Hallinan v. Fraternal Order of

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Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). “[A] complaint must
contain 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 Twombly,
550 U.S. at 570). These allegations “must be enough to raise a right to relief above
the speculative level.” Twombly, 550 U.S. at 555. The allegations that are entitled to
the assumption of truth are those that are factual, rather than mere legal
conclusions. Iqbal, 556 U.S. at 678-79.
On the other hand, a Rule 12(b)(1) motion tests whether the Court has subject
matter jurisdiction, Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570
F.3d 811, 820 (7th Cir. 2009); Long v. ShoreBank Dev. Corp., 182 F.3d 548, 554 (7th
Cir. 1999). When evaluating a motion to dismiss under Rule 12(b)(1), if there are no
factual disputes, then the Court accepts the allegations in the complaint as true,
and draws all reasonable inferences in the plaintiff’s favor. See Bultasa Buddhist
Temple of Chi. v. Nielsen, 878 F.3d 570, 573 (7th. Cir. 2017). That said, “a
plaintiff faced with a 12(b)(1) motion to dismiss bears the burden of establishing
that the jurisdictional requirements have been met.” Ctr. for Dermatology and Skin
Cancer, Ltd. v. Burwell, 770 F.3d 586, 588-89 (7th Cir. 2014).
III. Analysis
A. Rooker-Feldman
The Defendants move to dismiss the Second Amended Complaint based on
the Rooker-Feldman doctrine. See Rooker v. Fidelity Trust Co., 263 U.S. 413
(1923); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983). The

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idea behind Rooker-Feldman is that the Supreme Court is the only federal court
with jurisdiction to review the decisions of state courts in civil cases. Johnson v.
Orr, 551 F.3d 564, 567 (7th Cir. 2008). This means that any request for “a remedy
for an injury caused by [a state court] judgment” cannot be granted. Id. at 568 (7th
Cir. 2008) (citing Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284
(2005)). The “vital question” for application of Rooker-Feldman is “is whether the
federal plaintiff seeks the alteration of a state court's judgment.” Milchtein v.
Chisholm, 880 F.3d 895, 898 (7th Cir. 2018). If there is “no way for the injury
complained of by a plaintiff to be separated from a state court judgment,” then
Rooker-Feldman applies. Mains v. Citibank, 852 F.3d 669, 675 (7th Cir. 2017)
(quoting Sykes v. Cook Cty. Cir. Ct. Prob. Div., 837 F.3d 736, 742 (7th Cir. 2016)).
In this case, only the 2012 Chancery Litigation plausibly triggers RookerFeldman. Although Patricia Hataburda brought two lawsuits in 2011 raising
similar issues, those lawsuits both ended in a settlement agreement, and there is no
reason to think that any state court adopted the settlement or incorporated it into a
judgment. See Crestview Village Apartments v. United States Dept. of Housing and
Urban Development, 383 F.3d 552, 556 (7th Cir. 2004) (“For Rooker-Feldman
purposes, a state court approved settlement agreement is a judgment or decision.”)
(cleaned up).9 And, although the state court did enter a judgment in the State Farm
declaratory judgment litigation, the defendants do not argue that that judgment
has any preclusive effect in this case (rightly so, because the declaratory judgment
9This

opinion uses (cleaned up) to indicate that internal quotation marks,
alterations, and citations have been omitted from quotations. See, e.g., United States v.
Reyes, 866 F.3d 316, 321 (5th Cir. 2017).

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litigation involved the very different insurance-coverage issues). See R. 92, Defs’ Br.
at 9-12. That leaves the 2012 Chancery litigation.
1. Which Plaintiffs?
The Supreme Court has cautioned that Rooker-Feldman “is a narrow
doctrine, confined to cases brought by state-court losers complaining of injuries
caused by state-court judgments.” Lance v. Dennis, 546 U.S. 459, 465 (2006)
(quoting Exxon Mobil, 544 U.S. at 284) (cleaned up). Rooker-Feldman does not bar
actions by nonparties to the earlier state-court judgment simply because those
parties could be considered to be in privity with a party to the judgment under
state-law preclusion rules. Id. at 466.
Only two of the federal court plaintiffs in this case—Evmorfia Markou and
Keith Schuth—were also parties to the 2012 Chancery Litigation. Patricia
Hataburda was a named plaintiff in the original complaint, but she dropped out
when the complaint was amended, and the amended complaint was the operative
complaint as of the state court judgment, see Defs.’ Br. Exh. I at 1. John and
Demetri Markou were never parties to the litigation. Rooker-Feldman therefore
bars any claims by Evmorfia or Keith that seek to alter the 2012 Chancery
judgment, but does not block claims by John, Demetri, or Patricia.
The Defendants assert that the reach of Rooker-Feldman is much broader,
and argue that Rooker-Feldman applies to all of the plaintiffs, even those who were
not party to the prior lawsuit. This is the case, the Defendants assert, because the
new federal plaintiffs are “functionally identical” to the plaintiffs in the 2012

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Chancery Litigation. That argument stretches Rooker-Feldman too far. Lance
explicitly held that courts cannot import state law concepts of privity into the
Rooker-Feldman doctrine. 546 U.S. at 466. It is true that the Supreme Court hinted
that there might be some circumstances where Rooker-Feldman might be applied
against a nonparty to a state court proceeding—for example, “where an estate takes
a de facto appeal in a district court of an earlier state decision involving the
decedent.” Id. at 466 n.2. But the Seventh Circuit has not developed the boundaries
of this possible exception to the general rule stated in Lance. And the expansion
that Defendants propose is dramatic: the nonparties that Defendants seek to bar in
this case are the spouses and child of the state-court litigants. Even assuming that
all the family members live together, they are still distinct individuals with distinct
legal interests, unlike a decedent and the decedent’s estate. Holding that RookerFeldman would bar a state court loser’s spouse and children from asserting claims
simply because they have similar legal interests risks doing exactly what the
Supreme Court forbade in Lance: “erroneously conflat[ing] preclusion law with
Rooker-Feldman.” Id. So here, Evmorfia and Keith are the only plaintiffs against
which Rooker-Feldman applies.
2. Which Claims?
The next question is which, if any, of Evmorfia and Keith’s claims are barred
by Rooker-Feldman. Again, the crucial question is whether the claims seek, in
effect, to alter a state court judgment. Milchtein, 880 F.3d at 898. Although it is
difficult to trace the Plaintiffs’ legal theories with precision, it appears that most or

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all of the claims in the Second Amended Complaint are efforts to attack the state
court’s judgment. The allegations that the Amended Declaration was improper
because it was obtained using fraudulent signature cards, or because the
amendment was inconsistent with the Original Declaration, were presented to and
rejected by the Illinois courts. The Plaintiffs do not explain how these allegations
might be connected to some other injury independent of the state court judgment
upholding the Amended Declaration. Similarly, the allegations that the Arnstein &
Lehr attorneys presented false evidence to the Illinois courts during the 2012
Chancery Litigation are transparent efforts to attack the state court judgment. See
Second Am. Compl. at p. 1, ¶¶ 1-2, 22. Even if the state court judgment was
obtained by fraud, as the Second Amended Complaint alleges, this Court cannot
overturn the state court’s decision. Iqbal v. Patel, 780 F.3d 728, 729 (7th Cir. 2015).
The same goes for the claims arising from the Defendants’ efforts to collect
HOA fees from Keith and Evmorfia. Even if the fee-collection attempts happened
after the state court judgment, they still are purported injuries caused by the state
court’s decision that the Amended Declaration is valid. The complaint does not
allege that these fees were wrongful in some way independent of the state court
judgment—for example, that the HOA was trying to collect fees that were not
actually imposed by the Amended Declaration, or that that the HOA was falsely
contending that the plaintiffs were breaking HOA rules. Asking the Court to find
that the fee collection efforts were fraudulent or extortionate based on the fraud
underlying the Amended Declaration is just another way of asking the federal

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district court to deprive the state court ruling of effect. See, e.g., Mains v. Citibank,
N.A., 852 F.3d 669, 677 (7th Cir. 2017) (dismissing FDCPA claims because “the debt
that [the Defendants] tried to collect was the one authorized by the state foreclosure
judgment,” so the injuries “are therefore not independent of nor extricable from the
state-court judgment.”); Harold v. Steel, 773 F.3d 884, 886-87 (7th Cir. 2014)
(Plaintiff’s claim against creditor was barred by Rooker-Feldman because the source
of Plaintiff’s injury was the underlying state court decision that Plaintiff owed the
debt). Rooker-Feldman bars these claims as well.
It does not matter that Evmorfia and Keith have added some new defendants
who were not parties to the state court case. Of course, if Evmorfia and Keith had
some claims against these new defendants that did not stem from the state court
judgment, those claims would not fall within the reach of Rooker-Feldman. But all
Evmorfia and Keith allege is that the new defendants contributed in various ways
to procuring the state court judgment, or to enforcing the judgment after it was
issued. That means that awarding relief against these defendants for the actions
described in the Second Amended Complaint would require altering the state court
judgment. Adding new defendants does not change the fact that the plaintiffs are
effectively trying to appeal a state court judgment in federal district court. The
Rooker-Feldman doctrine “cannot be gotten around by changing the dramatis
personae.” Newman v. State of Indiana, 129 F.3d 937, 942 (7th Cir. 1997); see also
Pletos v. Makower Abatte Guerra Wegner Vollmer, PLLC, 2018 WL 1870380, at *3
(6th Cir. Apr. 19, 2018) (non-precedential disposition) (holding that state-court

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losers who had sued their homeowners’ association in state court could not dodge
Rooker-Feldman merely by adding homeowners’ association board members as
defendants).
Nor does it matter that the Plaintiffs’ efforts to attack the state court
judgment are framed as RICO or civil rights claims. It is well established in the
Seventh Circuit that litigants cannot “circumvent the Rooker-Feldman doctrine by
recasting a request for the district court to review state-court rulings as a complaint
about civil rights, due process, conspiracy, or RICO violations.” Wallis v. Fifth Third
Bank, 443 F. App’x 202, 204-205 (7th Cir. 2011) (non-precedential disposition); see
also, e.g., Holt v. Lake Cty. Bd. of Comm’rs, 408 F.3d 335, 336 (7th Cir. 2005); Taylor
v. Fed. Nat’l Mortg. Ass'n, 374 F.3d 529, 534 (7th Cir. 2004). No matter the
packaging, the factual allegations and legal claims in this federal case are clearly
attempts to undo the adverse state court judgment, and so are barred by RookerFeldman.
Finally, although there are some allegations that do not appear to be directly
connected to the judgment in the 2012 Chancery case—allegations of unfair conduct
during the Hataburda settlement negotiations, for example, and the allegedly false
statements made by Arnstein & Lehr lawyers in other litigation—none of those
events are connected to injuries suffered by Keith Schuth or Evmorfia Markou
independent of the state court judgment. So, in the end, all of Keith and Evmorfia’s
claims are barred by Rooker-Feldman.

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B. Claim Preclusion
Next up is the Defendants’ argument that the Plaintiffs’ claims are barred by
claim preclusion. The doctrine of claim preclusion (also known as res judicata)
provides that a final judgment on the merits by a court of competent jurisdiction is
conclusive as to the rights of the parties and their privies. Agolf, LLC v. Vill. of
Arlington Heights, 946 N.E.2d 1123, 1130 (Ill. App. Ct. 2011). Claim preclusion is
an absolute bar to a later action between the same parties or their privies involving
the same claim, demand, or cause of action. Id. Because an Illinois court rendered
the relevant final judgment (the judgment in the 2012 Chancery Litigation), Illinois
preclusion law applies. Arlin-Golf, LLC v. Vill. of Arlington Heights, 631 F.3d 818,
821 (7th Cir. 2011).
For claim preclusion to apply, three things must be true. First, there must be
a final judgment on the merits rendered by a court of competent jurisdiction.
Second, there must be an identity of cause of action. Third, there must be an
identity of the parties or their privies. Nowak v. St. Rita High School, 757 N.E.2d
471, 477 (Ill. 2001). There is no question in this case that the Circuit Court had
jurisdiction and entered a final judgment on the merits, or that the Illinois
Appellate Court had jurisdiction to consider and affirm the judgment. That leaves
only the second and third elements.
1. Identity of Cause of Action
Under Illinois law, separate claims are considered the same cause of action if
they arise from a single group of operative facts. Agolf, 946 N.E.2d at 1131. Claim

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preclusion bars any claim that could have been raised and decided in the first suit,
regardless of whether the claim was actually decided. La Salle Nat. Bank v. Cty. Bd.
of School Trustees of Du Page Cty., 337 N.E.2d 19, 22 (Ill. 1975). So, even if different
legal theories are asserted in the later action, the requirement of identity of cause of
action is satisfied if the claims arise from the same set of facts. Agolf, 946 N.E.2d at
1131. This also means that claim preclusion applies even to claims against newly
named defendants, provided the claims arise out of the same set of operative facts.
Watkins v. Ingalls Memorial Hospital, — N.E.3d —, 2018 WL 2089265, at *12 (Ill.
App. Ct. 2018); see also Muhammad v. Oliver, 547 F.3d 874, 877 (7th Cir. 2008)
(applying Illinois law).
As discussed above in the Rooker-Feldman context, the vast majority of the
factual allegations in the present complaint were already presented to the Illinois
courts in the 2012 Chancery litigation. The 2012 case alleged the same series of
facts that are alleged now: the HOA and its board members obtained signature
cards by deceit and fraud, the HOA passed the Amended Declaration without the
proper notice or votes, the Amended Declaration is inconsistent with the Original
Declaration, and the HOA attempted to collect fees based on the Amended
Declaration. See Mot. Dismiss Exh. H. This means that any claims arising out of
these operative facts are barred by claim preclusion (so long as the third element,
identity of parties, is satisfied). It does not matter that these claims are now framed
as RICO or civil rights claims. What’s more, to the extent that some of the claims
about debt collection arose after the final state court judgment, those are still

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barred because, as discussed, they are simply attempts to re-litigate the prior
judgment.
2. Identity of Parties
Claim preclusion applies only to parties to the prior action, or those who were
in privity with a party to the prior lawsuit. Agolf, 946 N.E.2d at 1131-32. “Privity” is
the idea that “as to certain matters and in certain circumstances persons who are
not parties to an action but who are connected with it in their interests are affected
by the judgment with reference to interests involved in the action, as if they were
parties.” City of Chi. v. St. John’s United Church of Christ, 935 N.E.2d 1158, 116768 (Ill. App. Ct. 2010) (quoting Purmal v. Robert N. Wadington & Assocs., 820
N.E.2d 86, 94 (Ill. App. Ct. 2004)). Privity exists between a party to the prior suit
and a nonparty when the party to the prior suit adequately represented the same
legal interests as the nonparty. Agolf, 946 N.E.2d at 1132. More specifically, Illinois
courts have held that privity exists “between parties who share a mutual or
successive relationship in property rights that were the subject of an earlier action.”
Id.
As discussed above, only two of the plaintiffs in this case (Keith Schuth and
Evmorfia Markou) were also named plaintiffs in the 2012 Chancery Litigation.
Patricia Hataburda’s husband, Richard Hataburda, was a plaintiff in the 2012
Chancery Litigation, but is not a party to this case. Patricia Hataburda, John
Markou, and Demetri Markou are all plaintiffs in the current federal case, but were
not parties to the prior state court case. But, because Patricia, John, and Demetri

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are in privity with the parties to the 2012 Chancery Litigation, the judgment in that
case is binding on them as well.
The property deed for the Markou property shows that John and Evmorfia
Markou (who are husband and wife) are co-owners and tenants-in-common of their
property.10 Mot. Dismiss Exh. J. A record search of documents stored by the Cook
County Recorder of Deeds reveals that Richard and Patricia Hataburda are both
listed on mortgage documents and liens related to the property located at 75
Horseshoe Lane, Lemont, IL (property identification number 22-24-302-007-0000).11
Indeed, the Plaintiffs’ own complaint and supporting documentation confirm that
the John and Evmorfia Markou and Richard and Patricia Hataburda are co-owners
of their respective properties. For example, the HOA invoices that the Plaintiffs
attached to the complaint are addressed to “Richard & Pat Hataburda, 75
Horseshoe Lane” and to “John and Eva Markou, 6 Surrey Court.” Second Am.
Compl. Tab A Exhs. Q, Y. Patricia refers in her affidavit to “our property” (in
reference to herself and her husband Richard). Id. Tab F at p. 4. John and Evmorfia
Markou both state that they reside at the same property, 6 Surrey Court, in
Lemont, IL. Id. Tab C ¶ 10, Tab D ¶1.
Demetri Makou’s status is the most complicated, because he is not a co-owner
of either property. At the very least, however, he is (per his own allegations), his

10The

Court takes judicial notice of this document and the Hataburdas’ property

records.
11The

Defendants attached a document purporting to be the Hataburda’s property
deed to their brief. See Defs.’ Br. Exh. K. It is not clear how this document alone would
prove that the Hataburdas are joint tenants of 75 Horseshoe Lane, because the deed itself
does not seem to list the Hataburdas’ names.

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parents’ tenant. In his affidavit, Demetri states that he also lives at 6 Surrey Court
in Lemont, IL. Id. Tab J at 1. He also states that he is “on trust” for the home, id.,
and the complaint refers to the home of the “Markou family,” id. ¶ 298. Whatever
“on trust” means, it is clear that Demetri Markou resides at his parents’ home at 6
Surrey Court.
For purposes of a dispute over homeowner fees, that is enough for privity
under Illinois law. Patricia Hataburda is in privity with her husband Richard, who
was a party in the prior lawsuit, because they are co-owners and co-tenants of the
property at issue in this lawsuit. John and Demetri Markou are both in privity with
Evmorfia Markou because John is a co-owner of the property that was the subject of
the lawsuit, and because all three are tenants of that same property. Indeed, the
Illinois courts have found parties to be in privity based on more attenuated
relationships. In Agolf, for example, the Illinois Appellate Court held that the owner
of a shopping center was bound by a decision rendered against one of its tenants.
Agolf, 946 N.E.2d at 220-21. The court in Agolf reasoned that the parties were in
privity because they shared the same legal interest and because the tenant
adequately represented that interest in the first lawsuit. Id. at 221. The court
rejected the argument that the parties had differing interests because one was a
mere tenant with “only a finite interest” in the property. Id. The court noted that
any potential differences in the parties’ interests were “nothing more than
conjecture and speculation,” and concluded that the interests of landlord and tenant
were “so closely aligned” as to be in privity. Id. at 222.

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In this case, there is not even a suggestion that Richard Hataburda’s interest
in his property would be meaningfully different than Patricia’s, or that Evmorfia
Markou’s interests would be different from John or Demetri’s. Indeed, the Second
Amended Complaint does not appear to distinguish between injuries suffered by
any of the individual plaintiffs, and does not suggest that individual family
members suffered injuries not experienced by others.12 That is not surprising,
because the parties are complaining about the same alleged injury (the harm caused
by false Amended Declaration) to the same property interests (the parties’ interests
in their respective residences). So the legal interests of the Hataburdas and the
Markous are much more alike than the landlord and tenant in Agolf: all have an
almost identical interest in attempting to undo the Amended Declaration and
preventing the resulting HOA fees and assessments. There is also no reason to
think that the state-court plaintiffs failed to adequately represent those interests.
Even a cursory review of the complaints and the appellate court opinion from the
2012 case reveals that the plaintiffs in that case presented the issues at least as
well as the plaintiffs in this case have done. See Mot. Dismiss Exhs. G-I. The legal
interests of all the current plaintiffs thus were adequately represented in the 2012
Chancery Litigation.
To sum up, because all the plaintiffs in the current case were either parties to
the 2012 Chancery Litigation or in privity with parties to the 2012 Chancery
Litigation, the Plaintiffs’ claims are barred by claim preclusion insofar as they
12The

exception might be the Hataburda settlement agreement, which was signed by
Patricia but not Richard. That sequence of events, however, does not seem to be related to
the main set of allegations about the fraudulent Amended Declaration.

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assert claims that arise out of the same set of facts that was the subject of the 2012
lawsuit. That means that the claims that the Amended Declaration was falsely
adopted, that it is inconsistent with the Original Declaration, and that efforts to
enforce the Amended Declaration are unlawful, are all precluded by the prior
judgment.13
C. Failure to State a Claim
Even if the plaintiffs had managed to surmount the hurdles of RookerFeldman and claim preclusion, most of their claims would still have to be dismissed
under Rule 12(b)(6). The Plaintiffs assert that the Defendants are running a RICO
enterprise, violated the Plaintiffs’ civil rights, and violated federal criminal
statutes. See Second Am. Compl. at p. 1. But for all its sprawling accusations and
voluminous exhibits, the Second Amended Complaint fails to state any plausible
claim upon which relief can be granted.14
1. RICO
First up are the Plaintiffs’ claims that the Defendants are running an illegal
RICO enterprise. The Racketeer Influenced and Corrupt Organizations Act (RICO),

13The

Defendants argue that Patricia Hataburda’s claims are also barred by the
release contained in the settlement agreement that Patricia signed in 2011. Release of a
claim is an affirmative defense. United States v. Rogers Cartage Co., 794 F.3d 854, 860 (7th
Cir. 2015). Although dismissal based on a release might be proper “when all the facts
necessary to rule on the affirmative defense are properly before the court on the motion to
dismiss,” id., that is not the case here. Patricia alleges that the release is invalid because it
was signed under duress, which is a claim that the Court would need some factual
development to properly address. Dismissal based on the release would be improper at this
stage.
14There are some narrow exceptions—certain fraud claims might be supported by
enough factual allegations to survive a Rule 12(b)(6) motion—but as explained earlier,
those are blocked by Rooker-Feldman or claim preclusion.

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18 U.S.C. § 1961 et seq. makes it unlawful to “conduct or participate … in the
conduct of [an] enterprise’s affairs through a pattern of racketeering activity or
collection of unlawful debt.” 18 U.S.C. § 1962(c). Injured parties can bring civil
lawsuits against violators of Section 1962(c). 18 U.S.C. § 1964(c). Unfortunately for
the Plaintiffs, liability under Section 1962(c) requires a “pattern of racketeering
activity” or “collection of unlawful debt,” neither of which has been plausibly
alleged.
First, although the Plaintiffs refer many times to efforts to collect “unlawful
debt,” see, e.g., Second Am. Compl. ¶¶ 167, 176, 191, 216-226, “unlawful debt” has a
particular meaning in the RICO context. The RICO statute defines “unlawful debt”
as debt incurred in connection with illegal gambling, or in the business of lending
money at a usurious rate. 18 U.S.C. § 1961(6). There is no allegation anywhere in
the complaint or the attached documents that the debts the Defendants sought to
collect were connected in any way with gambling. Nor is there any suggestion that
those debts were incurred or contracted in the business of lending money at a
usurious rate. There is an allegation that reads: “We claim the 12% usury Keith is
being charged falls under involuntary servitude.” Second Am. Compl. ¶ 255. That
paragraph appears to be referring to interest charged on Keith Schuth’s past-due
HOA payments. The Plaintiffs do not allege that the HOA (or anyone else) was in
the business of lending Keith money or anything else of value, or that the 12% rate
was “at least twice the enforceable rate” as required by 18 U.S.C. § 1961(6).

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The Plaintiffs also claim that the Defendants engaged in a pattern of
racketeering activity by committing the RICO predicate acts of bribery and
extortion. See, e.g., Second Am. Compl. ¶¶ 150, 197, 216-22. But no act of either
bribery or extortion has been plausibly alleged. The “bribery” identified by the
complaint is the payment to Patricia Hataburda’s attorney during settlement
negotiations. See id. ¶ 150. Payments to private attorneys (that is, attorneys who
are not government officials), even for improper purposes, are not bribery as defined
by the Illinois or federal bribery statutes. See 720 ILCS 5/33-1; 18 U.S.C. § 201. The
federal bribery statute prohibits bribery of public officials, people who have been
selected to be public officials, or witnesses who testify under oath. See 18 U.S.C.
§ 201. Similarly, the Illinois statute prohibits bribery of public officers, public
employees, jurors, or witnesses. See 720 ILCS 5/33-1. The complaint does not allege
that Patricia’s attorney was a public officer, official, or employee, and he was clearly
not a juror or a witness testifying under oath. So the alleged payment to Patricia’s
attorney was not criminal bribery and cannot be a RICO predicate act.
The Plaintiffs also assert that the HOA and its associates committed dozens
of acts of extortion by sending the Plaintiffs HOA bills and account statements,
fining them for violations of HOA rules, and attempting to collect debts by filing
liens and foreclosure actions against delinquent homeowners. See Second Am.
Compl. ¶¶ 166-67, 191, 197, 212, 216-22, 258, 283-84. The Hobbs Act defines
extortion as “the obtaining of property from another, with his consent, induced by
wrongful use of actual or threatened force, violence, or fear, or under color of official

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right.” 18 U.S.C. § 1951(b)(2). Illinois has an analogous criminal statute prohibiting
“intimidation,” which can also be the basis of a RICO predicate act. Ruiz v. Kinsella,
770 F. Supp. 2d 936, 942 (N.D. Ill. 2011). Under Illinois law, the crime of
intimidation occurs when a person “communicates to another … a threat to perform
without lawful authority” a variety of wrongful acts. 720 ILCS 5/12-6. These acts
include inflicting physical harm or unlawful confinement; committing a felony or
Class A misdemeanor; accusing a person of an offense; exposing the person to
hatred, contempt, or ridicule; taking or withholding official action; or bringing about
or continuing a strike, boycott, or other collective action. Id.
The actions described in the Second Amended Complaint are simply not
extortion or intimidation. The Plaintiffs do not allege that any Defendant
threatened force or violence, or committed any of the actions enumerated in the
Illinois intimidation statute. There is also no reason to think that the Defendants
acted under color of official right in attempting to collect HOA assessments or
enforce HOA rules: no factual allegations suggest that any defendant abused a
position as a public official in order to obtain payment in return for performing
official acts. See United States v. Carter, 530 F.3d 565, 574 (7th Cir. 2008). Although
there are conclusory legal assertions that “the HOA is acting under the color of law,
and under the color of authority,” Second Am. Compl. ¶ 262, see also ¶¶ 264-65,
these assertions are not facts, and are not entitled to the presumption of truth.
Finally, there is no basis to infer that the Defendants obtained payments through
wrongful use of fear. It might be the case that the Defendants imposed some

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economic pressure—in the form of demands for payment and filing liens and
evictions and the like—but economic pressure is generally not extortion if the
defendant has a claim of right to the property. Rennell v. Rowe, 635 F.3d 1008, 1012
(7th Cir. 2011). As noted above, the Defendants allege that the demands for
payment were wrongful because they were based on the supposedly fraudulent
Amended Declaration, but do not otherwise claim that the HOA was demanding
payments to which it had no right. The application of economic pressure to collect
money due under the Amended Declaration does not constitute wrongful use of fear,
because the HOA had a claim of right to that property.
The Plaintiffs have not managed to allege any RICO predicate acts, so there
is no need to address whether they have successfully alleged the other elements of a
RICO claim (conduct of an enterprise, et cetera). Any RICO claim must be dismissed
due to the absence of predicate acts.
2. Civil Rights
Next up are the various civil rights violations claimed or hinted at
throughout the Second Amended Complaint. These are even harder to follow than
the RICO claim, but it is nevertheless clear that the Plaintiffs have no viable
claims.
The Plaintiffs cite three civil rights statutes: 42 U.S.C. § 1981, 42 U.S.C.
§ 1985, and 42 U.S.C. § 1986. Second Am. Compl. at p. i. Section 1981 guarantees
certain equal rights under the law, including the right to make contracts. Section
1985(3) deals with conspiracies to deprive others of their civil rights, and Section

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1986 deals with neglecting to prevent misconduct mentioned in Section 1985. Both
Section 1981 and Section 1985(3) deal with deprivations of civil rights based on
race. To state a Section 1981 claim, Plaintiffs would need to allege that (1) they are
members of a racial minority; (2) the Defendants had the intent to discriminate on
the basis of race; and (3) the discrimination concerned the making or enforcing of a
contract. Pourghoraishi v. Flying J, Inc., 449 F.3d 751, 756 (7th Cir. 2006).
Meanwhile, for a Section 1985(3) claim, the Plaintiffs would need to allege that the
conspiracy to deprive them of their civil rights was motivated by race- or class-based
discrimination. Thorncreek Apartments Ill., LLC v. Mick, 886 F.3d 626, 634 (7th Cir.
2018); Griffin v. Breckenridge, 403 U.S. 88, 102 (1971). The Second Amended
Complaint does not allege or even suggest that the Plaintiffs’ misfortunes were
caused by racial, class-based, or national origin discrimination.15 And, because the
Plaintiffs have not stated a claim under Section 1985, their Section 1986 claim
necessarily fails as well. Hicks v. Resolution Trust Corp., 970 F.2d 378, 382 (7th Cir.
1992) (“Of course, in the absence of a viable claim under § 1985(3), a § 1986 claim
cannot exist.”).
Finally, the Plaintiffs assert that they have been subjected to involuntary
servitude in violation of the Thirteenth Amendment to the United States

15During

a hearing on the Plaintiffs’ motion for preliminary injunction, the Court
pointed out that that Section 1981 claim was unlikely to succeed because the Second
Amended Complaint did not allege any racial discrimination. Demetri Markou responded
that he was Greek. But neither he nor any other plaintiff has asked leave to amend the
complaint to add allegations of discrimination based on national origin. Even if they had
moved to amend, the Court would not grant permission: this is the third iteration of the
complaint, so the plaintiffs have had plenty of opportunity to add supporting factual
allegations.

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Constitution. Second Am. Compl. ¶¶ 205-212, 255. The Defendants respond that
there is no private right of action directly under the Thirteenth Amendment.
Whether that is right or not, any Thirteenth Amendment claim fails because the
Plaintiffs have not alleged anything that can fairly be characterized as involuntary
servitude within the meaning of the Thirteenth Amendment. The Plaintiffs claim
that mandatory membership in the homeowners’ association, being made to sign a
settlement agreement under duress, being charged fees based on the Amended
Declaration, having liens on their homes, and being charged high interest rates
constitute “involuntary servitude.” See id. ¶¶ 205-207, 212, 255. But, as the
Supreme Court has pointed out, the Thirteenth Amendment “was intended to cover
those forms of compulsory labor akin to African slavery.” Butler v. Perry, 240 U.S.
328, 332 (1916). The Plaintiffs’ problems, however lamentable, are nothing like
compulsory slave labor.
Indeed, very early in the life of the Thirteenth Amendment, the Supreme
Court held that the Thirteenth Amendment was not intended to reach run-of-themill injuries to property: “To withdraw the mind from the contemplation of this
grand yet simple declaration of the personal freedom of all the human race within
the jurisdiction of this government—a declaration designed to establish the freedom
of four millions of slaves—and with a microscopic search endeavor to find in it a
reference to servitudes, which may have been attached to property in certain
localities, requires an effort, to say the least of it.” Slaughter-House Cases, 83 U.S.
36, 69 (1872). The Court continued: “That a personal servitude was meant is proved

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by the use of the word ‘involuntary,’ which can only apply to human beings.” Id.
(emphasis added). The Plaintiffs have not alleged that they were forced to work for
the defendants against their will in a manner akin to slavery, so the Thirteenth
Amendment has nothing to do with the conduct they allege. Cf. Edgar v. Inland
Steel Co., 744 F.2d 1276, 1278 n.4 (7th Cir. 1984) (rejecting argument that income
tax withholding is involuntary servitude); Walton v. Claybridge Homeowners Ass’n,
Inc., 433 F. App’x 477, 479 (7th Cir. 2011) (non-precedential disposition) (stating
that “[Plaintiff’s] allegation that the state-court judgment runs afoul of
the Thirteenth Amendment is preposterous.”); Deich-Keibler v. Bank One, 243 F.
App’x 164 n.1 (7th Cir. 2007) (non-precedential disposition) (dismissing claim that
contract’s no-hire provision violated the Thirteenth Amendment as “frivolous”).
3. Federal Criminal Statutes
In addition to their civil claims, the Plaintiffs cite and quote a number of
federal criminal statutes. These include 18 U.S.C. § 880 (receiving proceeds of
extortion), 18 U.S.C. § 4 (misprision), and 18 U.S.C. §§ 1621 and 1622 (perjury and
subornation of perjury). In general, private citizens may not attempt to enforce
criminal statutes in the absence of explicit provisions for private civil action. See
Chapa v. Adams, 168 F.3d 1036, 1037 (7th Cir. 1999) (noting the Supreme Court’s
reluctance to use criminal law as the basis of a private civil action); Linda R.S. v.
Richard D., 410 U.S. 614, 619 (holding that a “private citizen lacks a judicially
cognizable interest in the prosecution or nonprosecution of another.”). True to that
trend, there is no civil cause of action for violation of the federal criminal statutes

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cited by the Plaintiffs. See, e.g., Tucker v. Bank One N.A., 265 F. Supp. 2d 923, 925
(N.D. Ill. 2003) (no private right of action under 18 U.S.C. § 4); Acevedo v. Cerame,
156 F. Supp. 3d 1326, 1329 (D. N.M. 2015) (no private right of action under 18
U.S.C. § 880); Traveler v. CSX Transp., Inc., 2007 WL 1830807, at *2 (N.D. Ind.
June 22, 2007) (no private right of action under 18 U.S.C. § 1621); Zajac v. Clark,
2015 WL 179333, at *8 (M.D. Fla. Jan. 14 2015) (no private right of action under 18
U.S.C. § 1622).
4. Fraud
Throughout the Second Amended Complaint, the Plaintiffs characterize
various actions, institutions, and documents as “fraud” or “fraudulent.” See, e.g.,
Second Am. Compl. ¶¶ 45, 65, 81, 94, 99. It is not entirely clear whether the
Plaintiffs are attempting to state some kind of common-law fraud claim, but the
Court will address that argument for the sake of thoroughness.
Federal Rule of Civil Procedure 9(b) requires that “[i]n alleging fraud or
mistake, a party must state with particularity the circumstances constituting fraud
or mistake.” Fed. R. Civ. P. 9(b) (emphasis added). In other words, the complaint
“must describe the who, what, when, where, and how of the fraud.” Pirelli
Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436,
441-42 (7th Cir. 2011) (cleaned up). Most of the allegations of fraud are far too
vague to state a viable claim under the heightened Rule 9(b) standard. For example,
Paragraph 176 states that “The claims made [in 2015] showed conclusive evidence
of … fraud … against us, the good People of Equestrian Estates.” Second Am.

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Compl. ¶ 176 (brackets in original; emphasis omitted). This allegation tells the
Court nothing about what the supposed fraudulent statements were, who was
involved, or when the fraud happened. To give another example, Paragraph 214
states that, “This organization has filed false fraudulent liens on every home owner
in Equestrian Estates.” Id. Again, this allegation provides none of the information
that would be needed to successfully state a claim of fraud: it does not say what
made the liens “fraudulent,” who filed the liens, or even what year any of this
happened. Most of the fraud allegations in the complaint follow this pattern, and so
fail to state a claim.
There are two possible exceptions. First, there is a set of allegations about
how the HOA procured Evmorfia’s signature consenting to the Amended
Declaration. The complaint alleges that in April 2000, the HOA induced Evmorfia
Markou to sign a signature card by falsely telling her that she was signing to
receive a housewarming gift. Second Am. Compl. ¶¶ 81-82, 87. Along the same
lines, the complaint alleges that in summer 2003, HOA board member James
Schulte had “a few shared alcoholic beverages” with Keith Schuth, and got Keith to
sign a card that Keith thought was “to have his information on file.” Id. ¶ 97. There
are enough details about these two transactions to potentially state a fraud claim.
But even if the Plaintiffs could get around the statute of limitations for these
claims—which is not at all likely—the claims are barred by Rooker-Feldman and
claim preclusion, as explained earlier. Evmorfia and Keith lost on those claims in

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the state court litigation, and cannot have a second bite at the apple. See Mot.
Dismiss Exh. I.
5. Failure to Respond to Evidence of Fraud
The Plaintiffs devote much of the Second Amended Complaint and the
attached exhibits to demonstrating that State Farm, State Farm’s law firm
O’Hagan Meyer, and O’Hagan Meyer’s employees knew about the supposed fraud
perpetrated in connection with the Second Amended Declaration. See, e.g., Second
Am. Compl. at p. 2 (“STATE FARM knew of the improperly amended declaration all
the way back in 2011”) (capitalization in original); p. 4 (“Luke P. Sheridan and
Daniel J. Nolan of O’Hagan Meyer had knowledge of a commission of a felony in
August 2014.”). The gist of the argument seems to be that the Plaintiffs sent
“conclusive evidence” of fraud and other offenses to various defendants in 2015, and
that the defendants somehow harmed the Plaintiffs by continuing to provide
services to the HOA after receiving this “evidence.” See id. ¶¶ 176, 117 (“State Farm
even paid for the appellate court case, after they received actual Notice of
introduction of fabricated evidence in the middle of august 2015”) (emphasis
omitted); id. ¶ 127 (“We claim State Farm and O’Hagan Meyer find themselves in
dishonor, that they did not act in good faith, and stayed silent by voluntary
conduct”) (emphasis omitted).
The Plaintiffs do not connect these allegations to any particular legal theory
of recovery, and it is not clear that there is any basis for granting relief based on the
facts alleged. The Plaintiffs make much of the fact that State Farm and its agents

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“stayed silent” after receiving the Plaintiffs’ mailings. See, e.g., id. at p. 3, ¶¶ 118120. But State Farm and its attorneys had no particular obligation to respond to the
series of documents sent to them by the plaintiffs outside the context of any formal
legal proceeding. Nor is there any reason to think that it was illegal for State Farm
to continue to insure the HOA after receiving the Plaintiffs’ documents. See, e.g., id.
at p. 3 (“money from State Farm went directly to fund a criminal enterprise … State
Farm paid for the appellate court case as well in 2015 … after notice was brought
directly home to State Farm … of systematic fraud”) (emphasis omitted), ¶ 121.
State Farm had a contractual duty to insure the HOA. Nothing about the
documents apparently sent by the Plaintiffs—which seem to have comprised a
hodgepodge of “affidavits,” legal arguments and disjointed evidence, see id. Tab B,
¶¶ 6-7, 31-36, 116, 191—would erase that contractual duty. And, even if the
Plaintiffs had presented ironclad evidence of “fraud” on the part of the HOA, they
have cited no legal authority (and the Court is aware of none) to support the
proposition that State Farm would somehow be liable to the HOA’s alleged victims
for continuing to insure the HOA. In short, the Plaintiffs have no claim based on the
series of allegations about State Farm’s allegedly deficient response to their
“evidence” of fraud.
6. Patricia Hataburda’s Settlement Agreement
The Plaintiffs also discuss in detail the events surrounding Patricia
Hataburda’s signing of the settlement agreement in connection with her two 2011
cases. See, e.g., Second Am. Compl. ¶¶ 201-203. It is not clear what claims, if any,

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they believe arise out of that event (apart from the already-dismissed arguments
that the supposed bribery was a RICO predicate act and that the settlement
violated the Thirteenth Amendment). Some of the allegations about the settlement
are closely followed by a lengthy quotation from 28 U.S.C. § 7102, defining “abuse or
threatened abuse of the legal process” and “involuntary servitude.” See 22 U.S.C. §
7102(1), (6). But these citations come from the Trafficking Victims Protection Act,
and the allegations in the complaint have nothing to do with human trafficking.
What’s more, most of the parties against whom Patricia might have a claim—
her lawyer, the presiding judge—are not named as defendants. Although she does
allege that some of the defendants in this case were involved in the settlement
negotiations, she does not assert that they were the ones who berated her into
settling. See Second Am. Compl. ¶¶ 133-143. Even if it is true that some of the
defendants engaged in unethical ex parte communication with the judge, it is not
clear why Patricia would have standing to bring a civil suit based on that unethical
communication. The clearest wrongful conduct alleged to have been carried out by
an actual defendant is the allegation that the HOA bribed Patricia’s attorney to
take a dive. Id. ¶ 148. But the only legal argument that the Plaintiffs make about
that action is that it is a “criminal act” which constitutes a RICO predicate offense.
Id. ¶ 150. The argument that the bribe was a RICO predicate act has already been
considered and rejected, and the Plaintiffs do not connect the bribe with any other
civil cause of action. Because the Plaintiffs have not pointed to any valid civil claim

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that could arise from this set of allegations, they have not stated a claim based on
the Hataburda settlement negotiations.
IV. Conclusion
In the end, none of the Plaintiffs’ claims survive the motion to dismiss. All of
Keith and Evmorfia’s claims are barred by Rooker-Feldman, and all of the Plaintiffs’
claims surrounding the adoption and enforcement of the Amended Declaration are
barred by claim preclusion. Even if this was not the case, none of the allegations
(with the possible exception of two very narrow fraud claims, which are barred by
Rooker-Feldman) state a claim upon which relief can be granted. There will be no
fourth chance to amend, so all the claims are dismissed, and this is the final
judgment in the case.

ENTERED:

s/Edmond E. Chang
Honorable Edmond E. Chang
United States District Judge
DATE: June 18, 2018

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