Doherty v. Washington Federal Bank for Savings et al
Filing
104
MEMORANDUM Opinion and Order Signed by the Honorable Joan B. Gottschall on 3/25/2022. Mailed notice(mjc, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
Patrick J. Doherty,
Plaintiff,
v.
Federal Deposit Insurance Corporation, as
Receiver for Washington Federal Bank for
Savings, et al.,
Defendants.
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Case No. 18-cv-0703
Judge Joan B. Gottschall
MEMORANDUM OPINION AND ORDER
Defendant Federal Deposit Insurance Corporation, as receiver for Washington Federal
Bank for Savings (“the FDIC”), moves for summary judgment on plaintiff Patrick J. Doherty’s
(“Doherty”) fraud claims under the Illinois Consumer Fraud and Deceptive Business Practices
Act (“ICFA”), 815 Ill. Comp. Stat. § 505/1 et seq., alleged in Counts III and IV of his second
amended complaint. The FDIC seeks summary judgment on the damages and proximate
causation elements of these claims. Doherty filed a memorandum of law opposing the motion,
ECF No. 98, but no response to the FDIC’s Local Rule 56.1(a)(3) statement of undisputed
material facts. For the reasons that follow, the court grants the motion in part and denies it in
part.
I. Summary Judgment Standard and Evidence
A. Rule 56 Standard
Doherty recites the Illinois summary judgment standard in his response to the FDIC’s
motion. ECF No. 98 at 2. “Under the Erie doctrine, federal courts in diversity cases (and any
other cases in which state law supplies the rule of decision) apply state ‘substantive’ law but
federal ‘procedural’ law.” Gacek v. Am. Airlines, Inc., 614 F.3d 298, 301 (7th Cir. 2010) (citing
Gasperini v. Center for Humans., 518 U.S. 415, 427 (1996)) (other citations omitted).
Consistent with the Erie doctrine, “Federal courts may grant summary judgment under Rule 56
on concluding that no reasonable jury could return a verdict for the party opposing the motion,
even if the state would require the judge to submit an identical case to the jury.” Mayer v. Gary
Partners & Co., Ltd., 29 F.3d 330, 334 (7th Cir. 1994) (quoting McEwen v. Delta Air Lines, Inc.,
919 F.2d 58, 60 (7th Cir. 1990)); see also Whitlock Corp. v. Deloitte & Touche, L.L.P., 233 F.3d
1063, 1065 (7th Cir. 2000); but see Gacek, 614 F.3d at 301–03 (holding state summary judgment
rule was substantive under Erie). As Doherty provides no argument that the state summary
judgment cases he cites articulate a substantive rule under Erie such that they defeat application
of the federal summary judgment standard, see Resp. 2, ECF No. 98, this court applies Rule 56.
Rule 56 provides that summary judgment must be entered “if the movant shows that there
is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). “In making that determination, a court must view the evidence ‘in
the light most favorable to the opposing party.’ ” Tolan v. Cotton, 572 U.S. 650, 657 (2014)
(quoting Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970)) (other citation omitted). A
genuine dispute exists if “the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “The underlying
substantive law governs whether a factual dispute is material: ‘irrelevant or unnecessary’ factual
disputes do not preclude summary judgment.” Carroll v. Lynch, 698 F.3d 561, 564 (7th Cir.
2012) (quoting Anderson, 477 U.S. at 248). Hence, summary judgment is warranted when the
nonmoving party cannot establish an essential element of its case on which it will bear the
burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citation omitted).
2
The party seeking summary judgment has the burden of establishing that there is no
genuine dispute as to any material fact. See id. at 323; Modrowski v. Pigatto, 712 F.3d 1166,
1168 (7th Cir. 2013) (explaining that Rule 56 “imposes an initial burden of production on the
party moving for summary judgment to inform the district court why a trial is not necessary”
(citation omitted)). After “a properly supported motion for summary judgment is made, the
adverse party must” go beyond the pleadings and “set forth specific facts showing that there is a
genuine issue for trial.” Anderson, 477 U.S. at 250 (quotation omitted); see also Modrowski,
712 F.3d at 1169 (stating party opposing summary judgment “must go beyond the pleadings
(e.g., produce affidavits, depositions, answers to interrogatories, or admissions on file), to
demonstrate that there is evidence upon which a jury could properly proceed to find a verdict in
her favor” (citations and quotations omitted)).
B. The Parties’ Local Rule 56.1 Fact Statements and Summary Judgment Evidence
This court’s Local Rule (LR) 56.1 specifies the procedure for presenting facts a party
contends are undisputed and material. The formal requirements of LR 56.1 aid the just, speedy,
and inexpensive resolution of litigation by ensuring that “the facts material to the issues in the
case and the evidence supporting such facts are clearly organized and presented for the court's
summary judgment determination.” Curtis v. Costco Wholesale Corp., 807 F.3d 215, 219
(7th Cir. 2015). The Seventh Circuit has therefore “routinely upheld the district court's
discretion in requiring parties to comply strictly with local rule requirements.” Id. (quoting
Cracco v. Vitran Express, Inc., 559 F.3d 625, 632 (7th Cir. 2009)). The Supreme Court and the
Seventh Circuit have “made clear that even pro se litigants must follow” the Federal Rules of
Civil Procedure and this court’s LR 56.1. Cady v. Sheahan, 467 F.3d 1057, 1061 (7th Cir. 2006)
(citing McNeil v. United States, 508 U.S. 106, 113 (1993) (affirming decision to enforce LR 56.1
strictly against a pro se plaintiff)); accord Wilson v. Kautex, Inc., 371 F. App’x 663, 664 (7th Cir.
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2010) (“[S]trictly enforcing Local Rule 56.1 was well within the district court’s discretion, even
though Wilson is a pro se litigant.” (citations omitted)).
Doherty, a licensed attorney, represents himself. See Def.’s Statement of Material Facts
(“SOF”) ¶ 24, ECF No. 93. The FDIC served him with the notice to pro se parties regarding
summary judgment procedure required by this court’s LR 56.2. ECF No. 96. The notice warned
Doherty of the consequences of failing to respond to the FDIC’s LR 56.1(a)(3) statement of
undisputed material facts: “If you do not respond to a fact asserted by the defendant, the judge
may decide that you have admitted that the fact is true.” ECF No. 96 at 2. Yet Doherty filed no
response to the FDIC’s LR 56.1(a)(3) fact statement and no statement of additional facts allowed
by LR 56.1(b)(3). Consequently, the facts set forth in the FDIC’s LR 56.1(a)(3) statement of
undisputed material facts are “deemed to be admitted” for summary judgment purposes, though
the court continues to view those facts in the light most favorable to Doherty. LR 56.1(b)(3)(C);
see also, e.g., Kreg Therapeutics, Inc. v. VitalGo, Inc., 919 F.3d 405, 411, 414–15 (7th Cir.
2019); Cracco, 559 F.3d at 632 (citing Smith v. Lamz, 321 F.3d 680, 683 (7th Cir. 2003)).
Doherty attached seven exhibits to his memorandum of law opposing summary judgment.
ECF No. 98-1 through 98-7. He cites them directly throughout the memorandum. See ECF
No. 98. The exhibits consist primarily of loan documents and court filings, plus Doherty’s
purported affidavit and a handwriting expert’s report. See ECF Nos. 98-1 thru 98-7.
A “district court is entitled to limit its analysis of the facts on summary judgment to
evidence that is properly identified and supported in the parties’ statements” of undisputed
material fact. Bordelon v. Chi. Sch. Reform Bd. of Trs., 233 F.3d 524, 529 (7th Cir. 2000)
(citations omitted). This court also has discretion to disregard all of Doherty’s citations
bypassing the LR 56.1 statements and directly citing the summary judgment exhibits. “The rule
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in this district that summary judgment memoranda must cite the Local Rule 56.1 fact statements
is well settled and need not be belabored.” Magee v. McDonald’s Corp., 2019 WL 10447014,
at *4 (N.D. Ill. Mar. 28, 2019) (citing Mervyn v. Nelson Westerberg, Inc., 142 F. Supp. 3d 663,
664–65 (N.D. Ill. 2015), which collects over 20 cases for this proposition).
As a matter of discretion, the court declines to consider exhibits A, B, and G (ECF
Nos. 98-1, 98-2, and 98-7) to Doherty’s memorandum. Exhibits C and E (ECF Nos. 98-3 and
98-5) will be considered because they duplicate exhibits cited by the FDIC in its LR 56.1(a)(3)
statement of undisputed material facts. See SOF ¶ 9 (citing ECF No. 36 at 12–19).
Exhibit D is a copy of the third superseding indictment in United States v. Kowalski, et
al., No. 19-CR-226 (N.D. Ill. Feb. 25, 2021). ECF No. 98-4. A fourth superseding indictment
has since been returned. Kowalski, No. 19-CR-226, ECF No. 534 (N.D. Ill. Dec. 7, 2021). The
court may take judicial notice of an indictment’s accusations. See, e.g., Indep. Tr. Corp. v.
Stewart Info. Servs. Corp., 665 F.3d 930, 943 (7th Cir. 2012). Although the court takes judicial
notice of the fourth superseding indictment, the court does not rely on it as evidence of the facts
it alleges or the truth of any of the accusations therein.1 See id. (explaining that it was proper to
take judicial notice of an indictment and other documents for “the indisputable facts that those
documents exist, they say what they say, and they have had legal consequences. The district
court did not rely on the documents as proof of disputed facts in any other sense.”).
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1
The indictment has no effect on the summary judgment analysis, however. Doherty submits it
because he believes it shows that the FDIC’s position here is inconsistent with the government’s
accusations in criminal litigation involving fraud allegations against former Washington Federal
personnel. See Resp. 6, ECF No. 98. There is no inconsistency, however. The FDIC seeks summary
judgment here not on a theory that no fraud occurred, but because Doherty cannot prove damages and
proximate causation. See Mem. Supp. of Mot. Summ. J. 5–10, ECF No. 95.
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Doherty’s affidavit (Pl.’s Ex. F, ECF No. 98-6) cannot be considered for a more
fundamental reason: “an affidavit is admissible in a summary judgment proceeding only if it is
sworn to before an officer authorized to administer an oath, such as a notary public.” Trapaga v.
Cent. States Joint Bd. Loc. 10, 2007 WL 1017855, at *2 (N.D. Ill. Mar. 30, 2007) (citing Pfeil v.
Rogers, 757 F.2d 850, 859 (7th Cir. 1985)). Alternatively, an unsworn declaration signed by the
declarant may be considered provided that it contains a statement subjecting the declarant to the
penalties of perjury substantially in the form provided in 28 U.S.C. § 1746. See DeBruyne v.
Equitable Life Assur. Soc'y, 920 F.2d 457, 491 (7th Cir. 1990). Doherty’s affidavit qualifies
neither as an affidavit nor an unsworn declaration because it lacks both a notary’s seal and a
statement (a.k.a., jurat) subjecting Doherty to the penalties of perjury.2 See ECF No. 98-6 at 1.
II. Facts at Summary Judgment
The following facts are not in dispute. In 2014, Washington Federal Bank for Savings
(“Washington Federal”) filed three lawsuits in the Circuit Court of Cook County, Illinois,
including claims against Worth Conversion, LLC (“Worth”); John Farano, Jr. (“Farano”); and
Doherty for breach of various promissory notes and guaranty agreements in connection with real
estate loans issued by Washington Federal. See SOF ¶¶ 11–18. Washington Federal named
Worth and F&D Services, Inc. (“F&D”), as defendants in all three cases. See id. ¶¶ 11–17.
Doherty and his business partner, Farano, were named as additional defendants in just one case,
Case No. 14 L 2411. See id. ¶ 18. The court adopts the parties’ practice of referring to this case
as the “guaranty action.” “Counts I-XXIV in Case No. 14 L 2411 involved loans that F&D
Services, Inc. obtained and Doherty and Farano guaranteed. The remaining counts were for
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2
The FDIC pointed out the problems with Doherty’s affidavit in its reply brief, but Doherty has not
sought leave to file an amended affidavit. See ECF No. 102 at 5.
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breach of the Note against Worth Conversion (Count XXV), breach of the guaranty against
Farano (Count XXVI), and breach of the guaranty against Doherty (Count XXVII).” SOF ¶ 19
(citation omitted).
While the guaranty action was pending, Doherty obtained a preliminary handwriting
expert’s report stating that his signature on the 2010 loan extension was forged. ECF No. 98-5
at 2. The state court entered default judgment against Farano approximately two months later
(id. ¶ 21), and Washington Federal voluntarily dismissed its claims against Doherty and Worth
(id. ¶ 22).
Doherty then filed this suit in state court against Washington Federal, as well as the
attorneys and law firm who represented it, alleging, among others, fraud claims premised on the
defendants filing suit against him using the allegedly forged 2010 extension agreement. See
Second Am. Compl. (“SAC”) 3–4, ECF No. 36.
The Office of the Comptroller of the Currency subsequently closed Washington Federal.
The Federal Deposit Insurance Corporation stepped into its shoes as receiver and removed this
case to federal court. SOF ¶ 26; Notice of Removal, ECF No. 1. This court dismissed Counts I,
II, V, and VI of Doherty’s second amended complaint for failure to state a claim in 2020, leaving
the fraud claims in Counts III and IV pending.3 2020 WL 8339216, at *7 (N.D. Ill. May 1,
2020). Those fraud claims are the subject of the FDIC’s motion for summary judgment.
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3
The recitation of the history of this case and prior state court litigation has been abbreviated to the
facts most pertinent at summary judgment. Doherty characterizes the full procedural history as
“tortured,” Resp. 4, and the court has no reason to disagree. For details, see 2021 WL 291314, at *1
(N.D. Ill. Jan. 12, 2021); 2020 WL 8339216, at *1–2; Doherty v. F.D.I.C., 932 F.3d 978, 980–82
(7th Cir. 2019).
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III. Analysis
Count IV of Doherty’s second amended complaint asserts a fraud claim under the Illinois
Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. § 505/1 et seq. The
second amended complaint labels Count III as a claim for “excessive fees,” SAC 3, ECF No. 36,
but at the motion to dismiss stage, Doherty recharacterized Count III as a fraud claim based on
the alleged forgery (he did not specify whether he intended a common law or statutory fraud
claim). Doherty, 2020 WL 8339216, at *5. The court accepted Doherty’s recharacterization
because the FDIC “could not have truly been surprised by it.” Id. The court stated that it
construed the fraud claim in Count III as “duplicative of the fraud claim alleged in Count IV,
with the exception that Count III specifically pleads a specific category of damages (excessive
fees).” Id. Thus, Counts III and IV allege different categories of damages, but they “rise and fall
together to the extent they rely on overlapping facts and legal theories.” Id. The FDIC analyzes
Counts III and IV as ICFA, rather than common law, fraud claims at summary judgment. See
ECF No. 95 at 8–10. Doherty does not contest this analysis or argue that he is bringing a
common law fraud claim in response. See ECF No. 98. The court therefore analyzes Counts III
and IV together under the ICFA.
An ICFA claim brought by a private party has five elements: “(1) a deceptive [or unfair]
act or practice by the defendant; (2) the defendant intended that the plaintiff rely on the
[deceptive or unfair practice]; (3) the deceptive [or unfair] act[s] occurred during a course of
conduct involving trade or commerce; and (4) actual damage to the plaintiff; (5) proximately
caused by the deceptive [or unfair] act[s].” Phila. Indem. Ins. Co. v. Chi. Title Ins. Co., 771 F.3d
391, 402 (7th Cir. 2014) (citing De Bouse v. Bayer AG, 922 N.E.2d 309, 313 (Ill. 2009)). The
FDIC moves for summary judgment on the actual damages and proximate causation elements of
Doherty’s claims. ECF No. 95 at 5–10.
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A. Actual damages
Proving actual damages under the ICFA requires evidence that the plaintiff suffered a
“pecuniary loss.” Benson v. Fannie May Confections Brands, Inc., 944 F.3d 639, 645 (7th Cir.
2019) (citing Kim v. Carter's Inc., 598 F.3d 362, 365 (7th Cir. 2010)). Doherty pleaded in his
second amended complaint that he incurred over $30,000 in costs and fees. See SAC ¶ 13.
Exhibit C to the second amended complaint summarized Doherty’s alleged costs and fees, but it
did not make clear whether Doherty, Worth, or both incurred those costs and fees. See ECF
No. 36 PageID Nos. 776–78. In his summary judgment response brief, Doherty sets out a chart
of costs and fees he claims as damages, citing his affidavit. See ECF No. 98 at 5. The chart
consists of a three-column list of dates, addresses of properties in the Chicago area, and dollar
amounts, but Doherty has not explained the significance of the addresses, dates, and dollar
figures beyond claiming them as damages. See id. at 5–6.
Neither the affidavit nor the chart in Doherty’s response brief is proper summary
judgment evidence. As explained above, Doherty’s affidavit is not admissible as summary
judgment evidence because it lacks a notary’s seal and does not qualify as an unsworn
declaration under 28 U.S.C. § 1746. See ECF No. 98-6 at 1. Nor does the affidavit include the
chart of costs or set out any specific costs incurred.4 See id. Without his affidavit, Doherty rests,
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Doherty’s unsworn affidavit reads in its entirety:
I, PATRICK DOHERTY, state as follows:
1. I am the plaintiff in the above captioned case.
2. I suffered direct damages regarding the above captioned case. I was forced to pay court
costs, travel costs, my time and effort and overcharge fees. The banks [sic] actions caused
me to incur excessive fees and a plummeting credit score with potential jeopardy to my
law license’s good standing. In addition to incurring Appellate Court filing fees in both the
State and Federal Court and coping [sic] costs. WFBS filed deceptive pleading in the
Circuit Court of Cook County that caused me direct damages in over payment of loans.
(continued on next page)
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through the unsworn chart in his response brief, on a subset of the damages alleged in exhibit C
to the second amended complaint.5 The court considered exhibit C when assessing the
sufficiency of the second amended complaint because it was attached as an exhibit and therefore
part of the SAC itself “for all purposes.” Fed. R. Civ. P. 10(c); see also Doherty, 2020 WL
8339216, at *6. The chart in Doherty’s brief and exhibit C cannot be considered at summary
judgment, however, because Doherty may not rest upon the mere allegations or denials of his
pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial.”6
Anderson, 477 U.S. at 248 (alteration in original) (quoting First Nat’l Bank of Ariz. v. Cities Serv.
Co., 391 U.S. 253, 288 (1968)). Neither the chart in Doherty’s response nor his purported
affidavit creates a fact issue on damages for excessive fees as alleged in Count III of the SAC.
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The Bank’s forgery and fraud caused the Plaintiff to suffer emotional and professional
consternation and consumed precious time from his regular practice of law that was
financial [sic] damaging and clearly unnecessary. Punitive Damages are appropriate.
ECF No. 98-6 at 1.
5
Doherty claimed approximately $30,000 in damages in his second amended complaint. SAC ¶ 13;
ECF No. 36 PageID Nos. 776–78 (Ex. C to SAC). The list of costs in Doherty’s response brief comes
to approximately $13,000. See ECF No. 98 at 5. The discrepancy has not been explained. See id.
at 5–6.
6
“In order to assert an affirmative claim against a lender, a guarantor must establish that he suffered a
direct injury as a result of the lender’s alleged breach against the principal, which is independent from
and not merely derivative of the resulting injury suffered by the principal.” Performance Elec., Inc. v.
CIB Bank, 864 N.E.2d 779, 782 (Ill. App. Ct. 1st Dist. 2007) (quoting N. Trust Co. v. VIII S. Mich.
Assocs., 657 N.E.2d 1095, 1101 (Ill. App. Ct. 1st Dist. 1995)). The FDIC has submitted unrebutted
summary judgment evidence it contends shows that most of the costs listed in Doherty’s charts were
incurred in connection with other lawsuits against Worth to which Doherty was not a party. See SOF
¶¶ 11–16, 30–42. The FDIC argues that Doherty lacks standing as a guarantor under Illinois law to
recover these costs. The court does not rule on standing because it has no proper summary judgment
evidence before it concerning these alleged damages and because the court cannot tell from either the
list of dates, property addresses, and dollar amounts in Doherty’s response brief or in exhibit C to the
complaint how, if at all, any of the costs and fees listed relate to Washington Federal’s alleged
deceptive acts. See ECF No. 98 at 5; ECF No. 36 PageID Nos. 776–78 (Ex. C to SAC).
10
See Fillmore v. Markham Motors Outlet, 1996 WL 238733, at *3 (N.D. Ill. May 3, 1996).
Count III must therefore be dismissed.
Nevertheless, the handwriting expert’s report attached as exhibit E to Doherty’s response
memorandum permits the reasonable inference that Doherty expended funds to obtain it. See
ECF No. 98-5. Handwriting experts do not ordinarily work for free. As the FDIC argues in
reply, Doherty has produced no receipts or evidence indicating whether he or Worth paid for the
report. See Reply 7, ECF No. 102. However, the FDIC cites no case requiring a plaintiff to
produce receipts at summary judgment. See id. At summary judgment, “The evidence of the
non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.”
Anderson, 477 U.S. at 255 (citing Adickes, supra, 398 U.S. at 158–59). An ICFA “plaintiff need
not prove the amount of damages to an absolute certainty; however, . . . evidence must include a
basis for computing damages with a fair degree of probability.” Spiegel v. EngageTel Inc.,
372 F. Supp. 3d 672, 689 (N.D. Ill. 2019) (alteration in original) (quoting Petty v. Chrysler
Corp., 799 N.E.2d 432, 439 (Ill. App. Ct. 1st Dist. 2003)). Since a reasonable jury could infer
that Doherty personally expended funds to obtain the expert report stating that his signature was
forged on the 2010 loan extension, he has produced enough evidence of a pecuniary loss to
survive summary judgment.7 His damages are limited, however, to the costs he personally
incurred to obtain the report.
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7
The cost of the handwriting expert’s report arguably qualifies as a cost associated with litigating the
guaranty action. The Illinois appellate court held in Tolve v. Ogden Chrysler Plymouth, Inc.,
755 N.E.2d 536, 541 (Ill. App. Ct. 2d Dist. 2001), that the plaintiff could not recover as ICFA
damages $400 in attorneys’ fees she spent defending a small claims suit brought against her by the
defendant. The following rule governed the issue: “While it is recognized that where the natural and
proximate consequences of a wrongful act have been to involve the plaintiff in litigation with others,
there may be recovery in damages against the author of such act, measured by the reasonable
expenses incurred in such litigation, yet the rule is equally well established that where an action based
on the same wrongful act has been prosecuted by the plaintiff against the defendant to a successful
(continued on next page)
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B. Proximate Causation/Reliance
Unlike a common law fraud claim, “the ICFA does not require a plaintiff to ‘show actual
reliance or diligence in ascertaining the accuracy of misstatements.’ ” Davis v. G.N. Mortg.
Corp., 396 F.3d 869, 883 (7th Cir. 2005) (quoting Zimmerman v. Northfield Real Est., Inc.,
510 N.E.2d 409, 417–18 (1986)); see also id. at 881–82 (elements of common law fraud). A
private ICFA plaintiff must establish proximate causation, meaning that “proof of ‘actual
damage’ and proof that the damage occurred ‘as a result of’ the [defendant’s] deceptive act or
practice.” Oshana v. Coca-Cola Co., 472 F.3d 506, 514–15 (7th Cir. 2006) (alterations omitted)
(quoting 815 Ill. Comp. Stat.§ 505/10a).
The FDIC cites cases holding that, to show proximate cause, the “plaintiff must actually
be deceived by a statement or omission that is made by the defendant.” Cmty. Bank of Trenton v.
Schnuck Markets, Inc., 887 F.3d 803, 822 (7th Cir. 2018) (quoting De Bouse, supra, 922 N.E.2d
at 316); accord Oshana, 472 F.3d at 513–14 (citing Oliveira v. Amoco Oil Co., 776 N.E.2d 151,
164 (Ill. 2002)); see also Avery v. State Farm Mut. Inc. Co., 835 N.E.2d 801, 863 (Ill. 2005) (“[I]t
is not possible for a plaintiff to establish proximate causation unless the plaintiff can show that
he or she was, ‘in some manner, deceived’ by the misrepresentation.” (citation omitted)).
Doherty points to no summary judgment evidence tending to show that he was actually deceived
by a statement made by Washington Federal. His entire argument on this subject reads, “Clearly
the fraud [Washington Federal] perpetuated was the proximate cause of the injuries.” Resp. 6,
ECF No. 98 (no citation). Furthermore, the limited evidence in this record and Doherty’s
pleadings establish that Doherty stated to opposing counsel in the guaranty action and the other
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issue, he can not in a subsequent action recover, as damages, his costs and expenses in the former
action.” Id. (emphasis in original) (quoting Ritter v. Ritter, 46 N.E.2d 41, 44 (Ill. 1943)). The parties
have not briefed the availability of litigation costs and attorneys’ fees as damages, including the
question of whether the same alleged wrongful acts were litigated successfully in the guaranty action.
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suits filed against Worth that the 2010 loan extension contained a forged signature.8 See, e.g.,
SAC ¶ 26; Pl.’s Ex. E (handwriting expert’s report).
Doherty’s failure to cite admissible evidence or develop a legal argument on proximate
causation is a sufficient justification for entering summary judgment. See, e.g., Scheidler v.
Indiana, 914 F.3d 535, 544 (7th Cir. 2019); Riley v. City of Kokomo, 909 F.3d 182, 190 (7th Cir.
2018) (entry of summary judgment “on the ground that [the plaintiff] failed to develop coherent
arguments” because “a party opposing a summary judgment motion must inform the district
court of the reasons why summary judgment should not be entered.” (citing Domka v. Portage
Cnty., 523 F.3d 776, 783 (7th Cir. 2008))). But “even where many or all of the material facts are
undisputed, the court still must ascertain that judgment is proper ‘as a matter of governing law.’ ”
Johnson v. Gudmundsson, 35 F.3d 1104, 1112 (7th Cir. 1994) (quoting Glass v. Dachel, 2 F.3d
733, 739 (7th Cir. 1993)) (other citations omitted).
The cases the FDIC cites requiring actual deceit are distinguishable. They reject a
“generalized market theory of causation, claiming that the defendant ‘inflate[d] the cost of its
product far above what it could have charged had the’ defendant not ‘misled consumers.’ ”
Cmty. Bank of Trenton, 887 F.3d at 822 (alteration in original) (quoting De Bouse, 922 N.E.2d
at 314–15). Doherty alleges no such theory here. Courts applying Illinois law have
distinguished the cases the FDIC cites because they involved plaintiffs who alleged that others in
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8
The FDIC’s argument that Doherty did not know about the alleged forgery when the handwriting
expert’s report was created on April 27, 2015, defies logic. ECF No. 98-5 at 1; see also Mem. Supp.
of Mot. Summ. J. 10. Granted, Doherty has failed properly to contest the fact that he did not learn of
the forgery until the guaranty action was dismissed in June 2015. SOF ¶ 23. In support, defendant
relies on one statement by Doherty in his second amended complaint, see id. (citing SAC ¶ 5). But
the SAC is not proper summary judgment evidence, and the statement the FDIC cites is contradicted
by other allegations in the SAC, e.g., ¶ 26. The date of the handwriting expert’s report is strong
evidence that Doherty suspected fraud well before the dismissal of the guaranty action two months
later.
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the market were deceived by the defendant’s advertising, even though they (the plaintiffs) were
not. See Pappas v. Pella Corp., 844 N.E.2d 995, 1004 (Ill. App. Ct. 1st Dist. 2006); Breeze v.
Bayco Prods. Inc., 475 F. Supp. 3d 899, 907–08 (S.D. Ill. 2020); IWOI, LLC v. Monaco Coach
Corp., 581 F. Supp. 2d 994, 1004 (N.D. Ill. 2008). In Pappas, by contrast, the plaintiffs bought
windows and later sued the manufacturer, alleging that it knew about defects in the products
plaintiffs purchased but did not tell buyers. See 844 N.E.2d at 997. Distinguishing cases
requiring actual deceit of the plaintiff, the court reasoned, “In effect, plaintiffs allege they relied
on [the manufacturer]’s concealment by silence. Requiring anything more would eviscerate the
spirit and purpose of the Consumer Fraud Act.” Id. at 1004; see also Connick v. Suzuki Motor
Co., Ltd., 675 N.E.2d 584, 594–95 (Ill. 1996). Pappas’s reasoning, which is consistent with
Connick, has been followed in cases analyzing proximate causation based on defendants’
knowing concealment of facts from buyers. See Breeze, 475 F. Supp. 3d at 907–08; Muir v.
Nature's Bounty, Inc., 2017 WL 4310650, at *5 (N.D. Ill. Sept. 28, 2017); IWOI, 581 F. Supp. 2d
at 1004.
This case involves alleged concealment of a forgery rather than a product defect, but the
reasoning of Pappas and similar cases applies here. The Illinois appellate court has held that a
person whose signature was allegedly forged as a guarantor of a loan agreement has statutory
standing to bring an ICFA fraud claim. Bank One Milwaukee v. Sanchez, 783 N.E.2d 217, 220–
22 (Ill. App. Ct. 2d Dist. 2003). As in Pappas, that holding rested in no small part on the
“remedial” nature of the ICFA. See id. at 220 (“There is a clear mandate from the Illinois
legislature that the courts of this State utilize the Act to the utmost degree in eradicating all forms
of deceptive and unfair business practices and grant appropriate remedies to injured parties.”
(alteration omitted) (quoting Duhl v. Nash Realty Inc., 429 N.E.2d 1267, 1277 (Ill. App. Ct.
14
1st Dist. 1981) (other citations omitted))). Requiring Doherty to show that he was deceived
would deny him a remedy and would deny an ICFA remedy to nearly all forgery victims. Like
the plaintiff who discovers a product defect, it is difficult to imagine how, except perhaps due to
a lapse of memory about signing a document, any plaintiff would be actually deceived by a
forgery of the plaintiff’s own signature. Accordingly, Doherty need not prove he was actually
deceived by Washington Federal’s deceptive acts. Rather, he must show that he effectively relied
on Washington Federal’s “concealment by silence” to satisfy proximate causation. Pappas,
844 N.E.2d at 1004; see also Muir, 2017 WL 4310650, at *5.
A reasonable fact finder could conclude from the undisputed evidence that Doherty was
unaware of the forgery for four years until the filing of the guaranty action prompted him to
obtain the handwriting expert’s report. See SOF ¶¶ 18–20, 22–30. From this evidence, it would
be reasonable to conclude that Doherty effectively relied on Washington Federal’s concealment
by silence of the forgery.
IV. Conclusion
For the reasons stated, the FDIC’s motion for summary judgment is granted in part and
denied in part. Count III of the second amended complaint is dismissed, and Doherty’s damages
on Count IV are limited to the costs he personally incurred to obtain the handwriting expert’s
report dated April 27, 2015, ECF No. 98-5.
Dated: March 25, 2022
/s/
Joan B. Gottschall
United States District Judge
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