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RESOLUTION TRUST CORP. v. GALLAGHER

July 9, 1992

RESOLUTION TRUST CORPORATION, Plaintiff,
v.
FRANCIS X. GALLAGHER, VINCENT J. GAVIN, JOHN J. GILL, JOHN W. GILLULY, GORDON A. GROEBE, JOSEPH M. HEIDECKER, LAWRENCE KLINGER, LOUIS J. KOLE, GARY K. KUMMER, MATTHEW J. LAMB, H. RICHARD LANDIS, EDWARD A. LONG and MILTON MEYERS, Defendants.


Kocoras


The opinion of the court was delivered by: CHARLES P. KOCORAS

CHARLES P. KOCORAS, District Judge:

 This matter comes before the court on defendants' motions to dismiss pursuant to Rule 12(b)(6) Fed. R. Civ. P., or in the alternative for a more definite statement pursuant to Rule 12(e). For the reasons set forth below, the motions are granted in part, and denied in part.

 BACKGROUND

 Plaintiff Resolution Trust Corporation ("the Corporation") filed this action against the former officers and directors of Concordia Federal Bank for Savings ("Concordia") and its wholly owned subsidiary, Concor Financial Services, Inc. ("Concor"). On February 17, 1989, Concordia was placed into conservatorship. On May 29, 1990, Concordia was placed into receivership, and the Corporation was appointed as its Receiver. The complaint seeks to recover losses for the defendants' alleged negligence (Counts I and V), breach of fiduciary duty (Counts II and VI), gross negligence (Counts III and VII), and breach of contract (Counts IV and VIII). The Corporation essentially alleges that the defendants' conduct caused Concordia to incur substantial losses which ultimately resulted in the failure of the bank and its subsidiary.

 Each of the defendants *fn1" has filed a motion to dismiss for failure to state a claim upon which relief may be granted, pursuant to Rule 12(b)(6), or in the alternative for a more definite statement pursuant to Rule 12(e). All of the defendants were granted leave to join and adopt the arguments made in the briefs filed by their codefendants, and therefore we will rule based on the consolidated group of motions. *fn2"

 LEGAL STANDARD

 Defendants must meet a high standard in order to have a complaint dismissed for failure to state a claim upon which relief may be granted. In ruling on a motion to dismiss pursuant to Rule 12(b)(6), the court must construe the complaint's allegations in the light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 235, 94 S. Ct. 1683, 1686, 40 L. Ed. 2d 90 (1974). The allegations of a complaint should be construed liberally and a complaint should not be dismissed for failure to state a claim "unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 102, 2 L. Ed. 2d 80 (1957). See also Doe on Behalf of Doe v. St. Joseph's Hospital, 788 F.2d 411 (7th Cir. 1986); Ellsworth v. City of Racine, 774 F.2d 182 (7th Cir. 1985); Hishon v. King & Spalding, 467 U.S. 69, 104 S. Ct. 2229, 81 L. Ed. 2d 59 (1984).

 In addition, it is well-settled that federal court pleadings need only comply with the standards of "notice pleading." Williams v. Adams, 625 F. Supp. 256, 262 (N.D. Ill. 1985). Notice pleading merely requires that in order to state a claim for relief, the plaintiff must give notice to the defendant of the theory behind the claims alleged and the basic facts which support those allegations. Maclin v. Paulson, 627 F.2d 83, 86 (7th Cir. 1980). "As long as the defendant is on sufficient notice of the nature of the claim, the plaintiff has satisfied federal pleading requirements." Ganton Technologies, Inc. v. Quadion Corp., 755 F. Supp. 203, 207 (N.D. Ill. 1990). We address defendants' motions keeping these principles in mind.

 DISCUSSION

 Defendants argue that the Corporation's complaint must be dismissed based on five primary arguments: 1) that the Corporation's alleged claims are barred by the applicable statute of limitations, 2) that the Corporation improperly seeks to recover for conduct protected by the business judgment rule, 3) that pursuant to 12 U.S.C. § 1821(k), the Corporation may only assert a claim against defendants based on gross negligence, 4) that the Corporation has failed to adequately allege a cause of action for breach of contract, and 5) that the Corporation seeks recovery for alleged economic losses, which is prohibited by Illinois common law. Each of these arguments will be addressed below.

 I. Whether the Claims are Barred by the Applicable Statutes of Limitations

 The Corporation brought its complaint pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), 12 U.S.C. § 1811 et seq. Section 1821(d)(14) of FIRREA contains the statute of limitations provision for all claims brought by the Corporation, and provides in pertinent part:

 (14) STATUTE OF LIMITATIONS FOR ACTIONS BROUGHT BY CONSERVATOR OR RECEIVER--

 (A) IN GENERAL--Notwithstanding any provision of any contract, the applicable statute of limitations with respect to any action brought by the Corporation as conservator or receiver shall be--

 (i) in the case of any contract claim, the longer of--

 (I) the 6-year period beginning on the date the claim accrues; or

 (II) the period applicable under state law; and

 (ii) in the case of any tort clam, the ...


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