The opinion of the court was delivered by: Rovner, District Judge.
MEMORANDUM OPINION AND ORDER
A. Verbena Daniels ("Daniels") filed a complaint against
defendant William L. Powell ("Powell"), William Powell and
Company, an Illinois corporation ("Powell & Co."), Westgate
Properties, Incorporated, a Kentucky corporation ("Westgate"),
and William Powell and Company, a Kentucky corporation ("Powell
Kentucky") for conversion (Count I), for fraud (Count II), for
the imposition of a constructive trust (Count III), and for
violation of the Racketeer Influenced and Corrupt Organization
Act, 18 U.S.C. § 1961 et seq. (Count IV) ("RICO"). On August 20,
1984, Judge Paul Plunkett of the United States District Court for
the Northern District of Illinois entered an order denying
defendants' motion to dismiss plaintiff's original
complaint.*fn1 That order was subsequently modified on November
20, 1984 to grant the motion to dismiss Powell & Co. only from
Count IV of the complaint.
On August 31, 1984, Daniels filed a motion pursuant to
Fed.R.Civ.P. ("Rule") 56 for partial summary judgment on Count I.
On November 1, 1984, this case was transferred to Judge Rovner.
For the reasons stated below, partial summary judgment is granted
in favor of Daniels against defendants Powell and Powell &
In order to prevail on a motion for summary judgment, a party
has the burden of establishing that there is no genuine issue of
material fact. Korf v. Ball State University, 726 F.2d 1222 (7th
Cir. 1984). Any inferences to be drawn from the underlying facts
must be viewed in the light most favorable to the non-moving
party. Hermes v. Hein, 742 F.2d 350 (7th Cir. 1984). The
existence of a factual dispute, however, only precludes summary
judgment if the disputed fact is outcome-determinative. Big O
Tire Dealers, Inc. v. Big O Warehouse, 741 F.2d 160, 163 (7th
Cir. 1984). "`A material issue of fact is one that affects the
outcome of the litigation and requires a trial to resolve the
parties' differing versions of the truth.'" Korf, 726 F.2d at
1226, quoting Admiralty Fund v. Hugh Johnson & Co.,
677 F.2d 1301, 1306 (9th Cir. 1982). In this case, the defendants have not
set forth a single fact that disputes the facts propounded by the
plaintiff. Thus, the facts set forth below are the facts as
presented by the plaintiff.
Origin and Nature of Daniels' Claim
On June 3, 1983, the Supreme Court of Bermuda, on petition of
a judgment creditor, Island Reinsurance Company Limited ("Island
Re"), placed Northern in involuntary liquidation by the issuance
of a Winding-Up Order ("Order"). The Order ended the authority of
Powell and other Northern directors and officers to manage the
company and vested all such power and authority, as well as title
to the property owned by Northern, in Daniels. Daniels' formal
title is the Official Receiver and Registrar of Company of the
Government of Bermuda.
Powell was advised of the liquidation Order by telegram on June
10, 1983 and replied by letter that he would act on instructions
of plaintiff's Bermuda counsel. Thus, defendants knew that title
to all of Northern's property had vested in Daniels and that
Powell no longer had any legal authority or power to control
Northern's affairs or to sell assets belonging to Northern.
In defiance of the Order of the Bermuda Supreme Court, Powell
determined that he would sell three parcels of land that had been
owned by Northern prior to its liquidation. When Daniels
requested deeds to the pieces of realty, Powell falsely
represented to her that he was attempting, through negotiations
with Northern's creditors, to remove Northern from liquidation.
He also assured her that he would not dispose of any of
Northern's property. Powell requested that Daniels take no action
pending completion of his negotiations, and she acquiesced in
Despite these promises to Daniels, Powell promptly proceeded to
negotiate a sale of four adjacent parcels of property he and his
corporations owned in Kentucky. Three of these parcels were owned
solely by Northern. At a closing in November of 1983, over five
months after the Order vested title in Daniels, Powell delivered
to a third party buyer, Eaglestone, Inc. ("Eaglestone"), a
resolution of the defunct Board of Directors of Northern. The
resolution purportedly authorized Powell to convey title to the
property. He also delivered to Eaglestone, along with instruments
purportedly transferring title to the buyer, a sworn affidavit
stating that Powell was authorized to act on behalf of Northern.
At no time did Powell advise the directors of Eaglestone that
Northern had been placed in liquidation by the Order of the
Bermuda Supreme Court. In return for the property, Eaglestone
delivered a check to Powell in the amount of $361,219.44 written
to the order of Northern.*fn4
Powell endorsed the check as president of Northern and
deposited the check in a Northern account. Powell then caused the
funds to be transferred from Northern's account to a Westgate
account in the same bank. After the payment of some
disbursements, the remaining funds were transferred by Powell to
a Powell & Co. account at a bank in Chicago, Illinois. The
remaining funds were used for the benefit of Powell and Powell &
Co., including the payment of an alleged loan from Powell's
father to Powell & Co. in the sum of $50,000,*fn5 as well as the
payment of a loan in the amount of $170,000 plus interest to
Powell & Co. from the Chicago bank.
Presently pending before this Court is Daniels' motion for
partial summary judgment on the conversion count (Count I).
Daniels' sole right to partial summary judgment for conversion of
the check belonging to Northern's estate derives from the Order
of the Bermuda Supreme Court. Accordingly, Daniels' claim ...