Harris v. US Bank

Filing 60

ORDER DISMISSING CASE granting 39 MOTION to Dismiss Second Amended Complaint filed by US Bank; denying 59 MOTION to Amend/Correct; and denying as moot 30 MOTION to Compel, 57 MOTION to Supplement, and 51 MOTION for Summary Judgment filed by Christopher L. Harris. This matter is DISMISSED with prejudice. The Clerk is directed to enter judgmentaccordingly.Signed by Judge David R. Herndon on 9/18/2017. (lmp)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
CHRISTOPHER L. HARRIS
Plaintiff,
v.
U.S. BANK,

No. 16-cv-1204-DRH-SCW
Defendant.
MEMORANDUM and ORDER

HERNDON, District Judge:
I.

Introduction

Now before the Court is defendant U.S. Bank’s motion to dismiss plaintiff’s
second amended complaint (Doc. 39) pursuant to FEDERAL RULES

OF

CIVIL

PROCEDURE 12(b)(6). Plaintiff concedes to several of U.S. Bank’s arguments, but
still ultimately opposes the motion (Doc. 44). For the reasons explained below, the
Court GRANTS defendant’s motion to dismiss (Doc 39).
II.

Background

Plaintiff Christopher L. Harris initially filed his complaint in the Circuit
Court of Madison County, Illinois, on September 27, 2016 (Doc. 1-1). Thereafter,
on November 2, 2016, this case was removed to the United States District Court for
the Southern District of Illinois by Defendant U.S. Bank National Association
(improperly identified as “US Bank, 3303 Nameoki Road, Granite City, IL 62040”)
(hereafter “U.S. Bank”), (Doc. 1). Subsequent to removal, on December 30, 2016,
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Harris filed his amended complaint (Doc. 13). Plaintiff’s amended complaint
alleges that “this is a suit for conversion of a negotiable instrument pursuant to
Universal Commercial Code (“U.C.C.”) § 3-419(1), unjust enrichment and breach of
simple contract.” (Doc. 13). Plaintiff alleges that he executed and delivered a
Purchase Agreement and Credit Order to U.S Bank “extending the amount of
$797,588.00 in Plaintiff’s credit upon acceptance and presentment at the Federal
Reserve discount or acceptance window or open market desk.” (Doc. 13). Thus, he
claims that he “acted in the capacity of a lending or banking institution, and the
issued instrument at Document 1-1, ID #14 is similar or equivalent to money,
which may be treated as a deposit of money when received and accepted by U.S.
Bank.” (Id. at (¶8).
The aforementioned Purchase Agreement listed “special conditions” that
stated: “If Seller chooses to refuse payment, Seller MUST, dishonor payment under
days of grace, 72 hours, by returning the original instrument with its Certificate of
Dishonor made under the hand and seal of the United States Consul or notary
public or other person authorized to certify dishonor by the law of the place where
dishonor occurs stating the reasons given for refusal.” (Doc. 39-1, pg.2).1 Thus,
plaintiff argues that based on the fact that U.S. Bank received his offer to purchase
and did not dishonor and return the original instrument, then a valid agreement
1 Plaintiff failed to attach the Purchase Agreement and Credit Order that are referenced in his
amended complaint. The exhibits were, however, included in his previously filed state court
complaint (Doc. 1-1). As a result, Defendant U.S. Bank attached the Purchase Agreement and Credit
Order to their pending motion to dismiss (Doc. 39-1) in order to provide the Court with a complete
picture of plaintiff’s allegations and defendant’s defenses. See Venture Assocs. Corp. v. Zenith Data
Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993) (“Documents that a defendant attaches to a motion to
dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and
are central to her claim.”).
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was formed between the two parties. The amended complaint specifically sets forth
claims for breach of contract, unjust enrichment, theft of property mislaid
pursuant to Model Penal Code § 223.5, and constitutional tort all based on the
Purchase Agreement.
Defendant filed the pending motion to dismiss pursuant to FEDERAL RULE OF
CIVIL PROCEDURE 12(b)(6) on January 25, 2017 (Doc. 39). In the motion, defendant
contends that plaintiff’s breach of contract, unjust enrichment, theft, and
constitutional tort claims all fail as a matter of law (Doc. 39). Naturally, plaintiff
disagrees with defendant’s assertions (Doc. 44) and has since moved to amend his
complaint (Doc. 59). The Court will address each count of the complaint
individually.
III.

Motion to Dismiss

Rule 12(b)(6) permits a motion to dismiss a complaint for failure to state a
claim upon which relief can be granted. Hallinan v. Fraternal Order of Police
Chicago Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). The Supreme Court
explained in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007), that Rule
12(b)(6) dismissal is warranted if the complaint fails to set forth “enough facts to
state a claim to relief that is plausible on its face.”
Although federal pleading standards were retooled by Twombly and Ashcroft v.
Iqbal, 556 U.S. 662 (2009), notice pleading remains all that is required in a
complaint. “A plaintiff still must provide only ‘enough detail to give the defendant
fair notice of what the claim is and the grounds upon which it rests and, through
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his allegations, show that it is plausible, rather than merely speculative, that he is
entitled to relief.’” Tamayo v. Blagojevich, 526 F.3d 1074, 1083 (7th Cir. 2008)
(citation omitted).
The Seventh Circuit offers further guidance on what a complaint must do to
withstand 12(b)(6) dismissal. The Court in Pugh v. Tribune Co., 521 F.3d 686, 699
(7th Cir. 2008), reiterated the standard: “surviving a Rule 12(b)(6) motion requires
more than labels and conclusions;” the complaint’s allegations must “raise a right
to relief above the speculative level.” A plaintiff’s claim “must be plausible on its
face,” that is, “the complaint must establish a non-negligible probability that the
claim is valid.” Smith v. Medical Benefit Administrators Group, Inc., 639 F.3d
277, 281 (7th Cir.2011). With this in mind, the Court turns to plaintiff’s complaint.
IV.

Analysis

a. Plaintiff’s Unjust Enrichment and Breach of Contract Claims Fail.
In his first claim, Harris alleges that defendant breached a contract for the
sale of land. Defendant moves to dismiss this count on the basis that the agreement
is unenforceable under the Statute of Frauds. Defendant, in their motion to
dismiss, argues that plaintiff’s unjust enrichment and breach of contract claims fail
as a matter of law because plaintiff’s amended complaint fails to allege that U.S.
Bank accepted plaintiff’s purchase offer. Additionally, and in the alternative,
defendant argues that the Statute of Frauds bars recovery based on the fact that
defendant never signed plaintiff’s Purchase Agreement pertaining to the sale of
land. Ultimately, defendant argues that there was no acceptance or formation of a
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contractual agreement, thus barring plaintiff’s claims. Plaintiff claims that because
U.S. Bank received his offer to purchase, and did not dishonor and return the
original instrument, that somehow a valid agreement was formed between the two
parties.
In this Circuit, the law ordinarily treats silence as rejection, not acceptance,
of an offer. First Nat'l Bank of Chi. v. Atl. Tele–Network Co., 946 F.2d 516, 519
(7th Cir.1991). However, silence may be construed as acceptance where ‘because of
previous dealings or otherwise, it is reasonable that the offeree should notify the
offeror if he does not intend to accept.’” Bauer v. Qwest Commc'ns Co., LLC, 743
F.3d 221 (7th Cir. 2014). Here, the alleged circumstances do not make it
reasonable for plaintiff to construe silence as acceptance. Plaintiff’s complaint
contains no allegations that plaintiff had any prior relationship whatsoever with
U.S. Bank that would permit silence to be construed as acceptance. Thus, silence,
in is this case, shall not be construed as acceptance.
Moreover, defendant U.S. Bank is correct that the Statute of Frauds bars
plaintiff’s claims because U.S. Bank did not sign the Purchase Agreement sent by
the plaintiff. Illinois has codified the “Statute of Frauds” in three places requiring
certain types of agreements to be in writing to be enforceable: (1) agreements
relating to executorship, suretyship, marriage, and performance over one year (see
740 ILCS 80/1); (2) agreements for the transfer of an interest in land (see 740 ILCS
80/2); and (3) agreements for the sale of goods over $500 (see 740 ILCS 5/2-201).
Defendant argues that this case triggers the Statute of Frauds because it involves
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the transfer of an interest in real estate and the contract for sale was never signed by
a representative of the defendant.
To be enforceable, agreements that fall within the Statute of Frauds must be
in writing and signed by the party to be charged. See McInerney v. Charter Golf,
Inc., 176 Ill. 2d 482, 680 N.E.2d 1347 (1997). The writing must contain the
agreement's essential terms and “must demonstrate that there has been an
agreement as to the essential terms of the contract, evidencing a ‘meeting of the
minds.’ ” Bower v. Jones, 978 F.2d 1004, 1009 (7th Cir.1992). The purpose of
the writing requirement of the Frauds Act is not to enable parties to repudiate
contracts that they have in fact made; it is only to prevent the fraudulent
enforcement of asserted contracts that were in fact not made. Rose v. Mavrakis,
343 Ill. App. 3d 1086, 799 N.E.2d 469 (2003). Here, it is undisputed that U.S.
Bank, the party to be charged, never signed the contract. As such, defendant set
forth a statute of frauds defense based on the lack of a signature from the party to
be charged.
Once a statute-of-frauds defense is raised, a plaintiff must affirmatively show
the existence of an appropriate writing for the alleged real estate sale. Here, plaintiff
fails, given that U.S. Bank never signed the contract at issue, nor communicated
acceptance in any way. Furthermore, because it was determined that plaintiff has
an express contract for the sale of real estate that is unenforceable under the statute
of frauds, and because the circumstances are not such that plaintiff paid for the
land and received nothing in return, his claim for unjust enrichment also

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necessarily fails as a matter of law. See Prodromos v. Poulos, 202 Ill. App. 3d 1024,
560 N.E.2d 942 (1990) (plaintiff, who had express contract for sale of real estate
which was unenforceable under statute of frauds and who did not make any
payment for the land, did not have claim for unjust enrichment). Accordingly,
plaintiff’s breach of contract and unjust enrichment claims fail as a matter of law.
b. Plaintiff’s Model Penal Code § 223.5 Theft Claim Fails.
Plaintiff next alleges a claim against defendant for “theft of property mislaid
pursuant to Model Penal Code §223.5” (Doc. 13). Defendant moves to dismiss this
count on the basis that neither Model Penal Code §223.5, nor the equivalent Illinois
statute IL ST CH 720 § 5/16-2 (Theft of lost or mislaid property), provide a private
right of action in this case. Specifically, defendant argues that the Model Penal Code
is neither a federal nor Illinois law and it has no binding effect on this Court.
Rather, the Model Penal Code is merely one source of guidance upon which courts
may rely to interpret applicable criminal laws. See U.S. v. U.S. Gypsum Co., 438
U.S. 422, 444 (1978); People v. Perkins, 408 Ill.App.3d 752, 758 (1st Dist. 2011).
Also, IL ST CH 720 § 5/16-2 does not provide for civil liability or a private right of
action. See IL ST CH 720 § 5/16-1, et seq. The Court finds that defendant’s
arguments are correct. Thus, plaintiff’s claim for theft of property mislaid under
Model Penal Code §223.5 fails as a matter of law.
c. Plaintiff’s Constitutional Tort Claim Fails.
Finally, plaintiff alleges that defendant committed a constitutional tort by
“fail[ing] or refus[ing] to take reasonable measures to restore and return Plaintiff’s
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original papers…” (Doc. 13). Plaintiff’s complaint mentions violations of the Fourth
Amendment and also Article I, § 10, clause 1 of the Constitution. In its motion to
dismiss, defendant contends that plaintiff’s Fourth Amendment claim fails as a
matter of law because “[t]hat Amendment protects individual privacy against
certain kinds of governmental intrusion …” Katz v. United States, 389 U.S. 347,
350 (1967), and U.S. Bank is not a state actor nor acting under the color of state
law. Furthermore, defendant argues that plaintiff’s claim under the Contract Clause
also fails as matter of law because U.S. Bank is not a sovereign state. The Contract
Clause provides that “No State shall … pass any … Law impairing the Obligation of
Contracts …” U.S. Const. art. I, § 10, cl. 1. Defendant is correct as to plaintiff’s
constitutional tort claim, as U.S. Bank is neither a state actor, nor acting under the
color of state law. Thus, plaintiff’s constitutional tort claim fails as a matter of law.
d. Motion to Amend (Doc. 59).
After briefing on the aforementioned motion to dismiss was completed,
plaintiff then sought leave to amend his complaint (Doc. 59). In said motion,
plaintiff attempts to state a cause of action against the United States Postal Service
(Doc. 59). Courts “may refuse to entertain a proposed amendment on futility
grounds when the new pleading would not survive a motion to dismiss.” Gandhi v.
Sitara Capital Management, LLC, 721 F.3d 865, 869 (7th Cir.2013). See also
Bower v. Jones, 978 F.2d 1004, 1008 (7th Cir.1992) ( “[A]n amendment may be
futile when it fails to state a valid theory of liability or could not withstand a motion
to dismiss.”).
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Here, the Court notes the futility of the proposed amendment due to the
inadequacies of plaintiff’s claims in his proposed third amended complaint in
tandem with those alleged in his second amended complaint. Accordingly,
plaintiff’s motion to amend is denied (Doc. 59).
V.

Conclusion

Accordingly, the Court GRANTS defendant’s motion to dismiss plaintiff’s
second amended complaint (Doc. 39) and DENIES plaintiff’s motion to amend
(Doc. 59). This matter is DISMISSED with prejudice. All remaining motions
(Docs. 30, 51 & 57) are DENIED as moot. The Clerk is directed to enter judgment
accordingly.

Judge Herndon
2017.09.18
19:09:56 -05'00'

IT IS SO ORDERED.

United States District Judge

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