law firms. Notwithstanding his continuing protest, Lewis has not set forth any newly discovered evidence that would warrant reconsideration.
Accordingly, Lewis' motion for reconsideration is denied.
II. Motion for Leave
In order to remedy defects in the first-amended complaint, Lewis now requests leave to file a second amended complaint. The standard governing this motion is undisputed: A plaintiff should not be denied the opportunity to amend its complaint unless it is clear that the amended complaint cannot state a claim. Textor v. Board of Regents, 711 F.2d 1387, 1391 (7th Cir. 1983); Rohler v. TRW, Inc., 576 F.2d 1260, 1266 (7th Cir. 1978); Universal Mfg. Co. v. Douglas Press, Inc., 770 F. Supp. 434, 435 (N.D. Ill. 1991); Hagstrom v. Breutman, 580 F. Supp. 773, 775 (N.D. Ill. 1984). Because the proposed second amended complaint fails to cure any of the defects found by this court, we deny Lewis' motion for leave.
On September 13, 1991, this court dismissed as untimely filed Counts III, VI, and VII as they related to the La Villita and Metro Partners investments, Count IV as it related to La Villita, Metro Partners, Houston Land, and Pueblo Villas, and Count V as it related to La Villita, Metro Partners, Houston Land, and Pueblo Villas. Lewis, slip op. at 13-17. The dismissal of these counts turned in part on Lewis' failure to plead fraudulent concealment. In paragraphs 41(a)-(b),
48(a)-(b), 53(a)-(b), 59(a)-(b), and 63(a)-(b) of the second-amended complaint, Lewis attempts to set forth allegations of fraudulent concealment. Specifically, Lewis alleges that he had received many oral and written assurances from Hermann and Richards indicating that each investment "was a good investment" and was "on track and going well." With regard to Richards, however, plaintiffs bear an affirmative duty of due diligence. Lewis, slip op. at 14. The due diligence requirement compels more than the mere assertion that: (1) "the earliest date that Dr. Lewis could have known, through the exercise of reasonable diligence, of the fact that the Metro Partners investment was in trouble was on April 29, 1988, when Metro Partners filed for bankruptcy" (Second Amended Complaint at P48(b)); and (2) "the first notice that Dr. Lewis received that contained any information that the Houston Land investment was in trouble was Houston Land's bankruptcy filing on September 2, 1988." Id. at P53(a).
Due diligence, if it is to retain any significance, must entail active inquiry by the plaintiff. See Davenport v. A. C. Davenport & Son Co., 903 F.2d 1139, 1142 (7th Cir. 1990). In the absence of allegations that Lewis made such inquiries or otherwise exercised due diligence to determine the true financial status of each investment, the second amended complaint fails to cure the defects in Counts III-VII that resulted in the partial dismissal of these claims against Richards. Furthermore, even assuming Richards may be a fiduciary of Lewis, the second amended complaint fails to plead active concealment on the part of any of the defendants. Active concealment demands more than mere assurances that the investments are "going well," or are "good investments." Lewis has not plead any facts indicating that, for instance, either Hermann, Lewis or any other fiduciary misrepresented material information after the purported fraudulent sale. That Lewis may have been lulled into a sense of security by his fiduciaries is insufficient to invoke the doctrine of fraudulent concealment. See Davenport, 903 F.2d at 1139; Hupp v. Gray, 500 F.2d 993, 997 (7th Cir. 1974).
In paragraph 63(c) of the second amended complaint, Lewis attempts to allege loss causation in order to cure the defect that resulted in the partial dismissal of Counts I-VII as they related to La Villita, Houston Land, and Pueblos Villas. Paragraph 63(c) states:
With regard to LaVillita, Pueblo Villas and Houston Land, the undisclosed commissions and conflicts of interest previously described robbed each investment of the upfront funds necessary [sic] to meet its financial commitments and investment objectives, and therefore, each investment did not have a realistic chance of success or profit from its inception.
However, as noted in our September 13, 1991 order, "allegations concerning undisclosed commissions and conflicts of interest bear only upon the issue of transaction causation." Lewis, slip op. at 19 n.12. Accordingly, the additional allegations contained in paragraph 63(c) are insufficient to state the essential element of loss causation.
Respecting Count XI, the second amended complaint substitutes two new theories of liability against Long Grove Trading Co.: Section 20(a) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78t, and respondeat superior. These new theories, however, are deficient. First, insofar as Lewis' § 20(a) claim is premised entirely on the Houston Land investment, such claim, like Lewis' § 10(b) and § 15(c) claims, is barred by the 1-and-3-year statute of repose. See Lewis, slip op. at 20 n.13 (applying the Lampf and Short limitations rule to § 15(c) actions). Moreover, Lewis' failure to allege a primary violation of the federal securities law precludes a claim against Long Grove as a "controlling person" under § 20(a). FMC Corp. v. Boesky, 727 F. Supp. 1182 (N.D. Ill. 1989). Likewise, Lewis' claim under the theory of respondeat superior fails to state a cause of action upon which relief may be granted. Recovery under this theory requires a showing that the agents had actual or apparent authority to engage in the wrongful acts. Harrison v. Dean Witter Reynolds, Inc., 715 F. Supp. 1425, 1429-32 (N.D. Ill. 1989). There is no dispute that the second amended complaint is devoid of such allegations.
Finally, Lewis attempts to buttress his aiding and abetting claims against Much Shelist and S & F.
On September, 13, 1991, we dismissed these claims, concluding that each firms' "liability must ultimately rest on a duty to disclose." Lewis, slip op. at 23. Lewis' new allegations, see Second Amended Complaint PP124, 125(a), 127(a) and 131, are unrelated to the issue of whether each firm owed Lewis a duty of disclosure, and therefore, do not change the fact that neither Count XII nor Count XIII state a cognizable claim.
Accordingly, we deny Lewis' motion for leave to file the submitted second-amended complaint.
There being no manifest errors of law or fact, Lewis' motion for reconsideration of our September 13, 1991 order is denied. Furthermore, as the proposed second amended complaint fails to cure any of the defects found by this court, we deny Lewis' motion for leave. It is so ordered.
MARVIN E. ASPEN, United States District Judge
Dated December 19, 1991