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HENRY v. FARMER CITY STATE BANK

March 10, 1986

JOHN T. HENRY AND EVELYN I. HENRY, PLAINTIFFS,
v.
FARMER CITY STATE BANK, AN ILLINOIS BANKING CORPORATION, GEORGE E. DRAKE, DEAN BRIGHT, RICHARD K. DRAKE, ROBERT E. DRAKE, STUART B. DRAKE, F. DICK MAXWELL, ORTHELDO A. PEITHMAN, BERYL W. RUTLEDGE, JAMES E. TOBIN, WILLIAM A. RUTLEDGE, RONALD L. VANCE, CHERYL DAWSON, JOHN N. STEVENS, STEPHEN PETERS, DONALD MASSEY, JAMES W. EVANS, TERRY SCOTT, CITY OF FARMER CITY, A MUNICIPAL CORPORATION, MARVIN HAYCRAFT, JAMES RICHMOND, BILL PERHAY, BILL PERHAY CHEVROLET INC., PHILLIP R. LAMKIN, RAYMOND MOSS, OBERMEYER TRANSFER CO., DENNIS JOHNSON, OSCAR OGLE, AND THE CHAMPAIGN NATIONAL BANK, A NATIONAL BANKING ASSOCIATION, DEFENDANTS.



The opinion of the court was delivered by: Mills, District Judge.

ORDER AND OPINION

Can this Court enjoin state proceedings on the identical facts filed after a final decision in this case has been handed down and while that final decision is on appeal?

Yes.

Introduction

This case began as a common, garden variety bank foreclosure and has ended as a civil RICO action (18 U.S.C. § 1964), dismissed with prejudice by this Court.

Involved here is a bankrupt tire and service dealer who fought foreclosure in the state court and then filed a RICO action alleging that the bank, et al (FCSB) had fraudulently drawn up a letter of direction to Plaintiff's land trustees ordering them to encumber their property with a second mortgage.

Plaintiffs have appealed our dismissal to the Seventh Circuit Court of Appeals, and then — while the appeal is pending — instituted another factually identical case in the 6th Judicial Circuit Court of Illinois, alleging the same common law fraud causes of action that were the basis of the RICO action here in this Court.

I — Prior Order

On December 17, 1985, we dismissed this case on the merits by finding that no pattern of racketeering had been adequately pled, in that a single allegation of one act of forgery and fraud cannot sustain the pattern of racketeering requirement of Sedima S.P.R.L. v. Imrex Co., Inc., ___ U.S. ___, 105 S.Ct. 3275, 3285, fn. 14, 87 L.Ed.2d 346 (1985); Fleet Management Systems, Inc., d/b/a Logistic Systems v. Archer-Daniels-Midland Co., Inc., and NIMS Associates, Inc., 627 F. Supp. 550 (C.D.Ill., 1986).

It was also determined that the allegations that Defendants were collecting an illegal debt were patently false.

Thirdly, this Court found that no RICO injury, as defined by 18 U.S.C. § 1964(c), occurred because the mortgage foreclosed upon and which was alleged to have been fraudulently created was not the only encumberance on Plaintiffs' property. The Defendant Bank also held a valid assignment*fn1 of the title to the property that could only be extinguished upon full payment of all debts owed the bank by Plaintiffs. Thus, the bank had another remedy against the Plaintiffs that would have had the same effect as the alleged fraudulent mortgage. (This issue is discussed further infra.)

Now Plaintiff has sought to do an end-run around the federal judiciary which they initially invoked. They do this by filing the state court action after our final order and during the appeal to the United States Court of Appeals for the Seventh Circuit. This they cannot do.

II — Law

Lack of ...


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