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LATHROP v. JUNEAU & ASSOCIATES

February 11, 2004.

STEPHEN LATHROP, Plaintiff
v.
JUNEAU & ASSOCIATES, INC. P.C., JOE JUNEAU, individually and in his official capacity as City Engineer of Granite City, Illinois, ED JUNEAU, CHARLIE JUNEAU, DAN BROWN, individually and in his official capacity as Economic Director of Granite City, Illinois, RONALD SELPH, individually and in his official capacity as Mayor of Granite City, Illinois, MARK SPENGLER, individually and in his official capacity as City Attorney of Granite City, Illinois, GRANITE CITY OF ILLINOIS, and OTHER UNNAMED PERSONS Defendants



The opinion of the court was delivered by: DAVID HERNDON, District Judge

MEMORANDUM AND ORDER

I. Introduction

Before the Court is the motion to dismiss plaintiff's complaint submitted by Dan Brown, Ronald Selph, Mark Spengler and the City of Granite City, Illinois (Doc. 11, 15). Pro se Plaintiff Stephen Lathrop is a contractor who apparently had a construction project approved by Granite City's Aldermen and has brought a claim alleging that Defendants wrongfully prevented the completion of his agreement Page 2 because it would have interfered with another construction project in which all named Defendants had a legal or illegal interest.

  II. Background

  Plaintiff alleges that Juneau & Associates and its owners, Joe Juneau, Ed Juneau, and Charlie Juneau, overpriced Granite City for construction projects that they obtained by bribing city officials with kickbacks (Complaint ¶¶ 30-31). Plaintiff claims that Defendants' kickback scheme injured him when Defendants purposefully undermined his pending Dobrey Slough construction agreement with Granite City because of its conflicts with one of Juneau & Associates' construction projects.

  The following are the main individuals (parties) in this suit:
1. Plaintiff Stephen Lathrop is a contractor in Granite City, Illinois. 2. Defendant Juneau & Associates is a private engineering firm contracted to serve as city engineer for several municipalities. 3. Defendant Joe Juneau is Granite City's civil engineer and an owner of Juneau & Associates. 4. Defendants Ed Juneau and Charlie Juneau are owners of Juneau & Associates. 5. Defendant Dan Brown is Economic Advisor for Granite City. 6. Defendant Ronald Selph is Mayor of Granite City. 7. Defendant Mark Spengler is City Attorney for Granite City.
For the sake of clarity, the Defendants Juneau & Associates, Joe Juneau, Ed Juneau, and Charlie Juneau will be referred to collectively as the "Juneau Defendants." The Defendants the City of Granite City, Dan Brown, Ronald Selph, and Mark Spengler will be referred to collectively as the "Granite City Defendants." Page 3
  Lathrop's complaint brings these claims against Defendants (Doc. 1):
1. RICO violation of 18 U.S.C. § 1962(c)-premised on federal predicate acts of bribery, wire fraud, mail fraud, and other federal laws; also premised on state predicate acts of bribery, defamation, and other Illinois laws (¶¶ 83-88); 2. RICO violation of 18 U.S.C. § 1962(c) and (d) — same predicate acts as above (¶¶ 89-94); 3. RICO violation of 18 U.S.C. § 1962(a) and (d) — same predicate acts as above (¶¶ 95-100); 4. RICO violation of 18 U.S.C. § 1962(b) and (d) — same predicate acts as above plus fraud under 18 U.S.C. § 1342 and "related fraudulent defamatory under U.S.C. § 1961(1), 1961(5), and 1962(b)"(¶¶ 101-106); 5. Tortious interference with prospective business relations (¶¶ 107-109); 6. Civil Conspiracy (¶¶ 111-117); 7. Violation of state and federal freedom of information acts (¶¶ 118-120); and 8. Violation of state and federal anti-trust laws (¶¶ 121-126).
  Plaintiff proposed a construction project that would have provided flood control measures and a housing development for the Dobrey Slough area in Granite City, Illinois (Complaint 11 32). During several meetings from 1998 until the spring of 2000, Plaintiff met with Alderman Kim Hess and Defendants Dan Brown (Economic Advisor) and Joe Juneau (City Engineer) to discuss the need for implementing his flood control measures for Dobrey Slough (Complaint ¶ 32, 33). At the meeting, Plaintiff also explained that Juneau & Associates' construction project at the nearby DonnaLynne subdivision would worsen Dobrey Slough's flooding problems (Complaint ¶ 33). Plaintiff notes in his complaint that the US-Army Corps of Engineers eventually determined that the drainage plan of Juneau & Associates' DonnaLynne project was inadequate when it eventually forced Granite City to construct a $1.8 million drainpipe to Horseshoe Lake from the DonnaLynne Page 4 subdivision (Complaint ¶ 75).

  In the spring of 2000, Granite City Aldermen held an Economics and Downtown Planning Committee Meeting at which Defendant Joe Juneau presented the DonnaLynne proposal (Complaint ¶ 34). Mayor Ronald Selph informed the Aldermen that he had already made an agreement with Juneau & Associates and sought only the Aldermen's authorization to sign the agreement (Complaint ¶ 34). Plaintiff claims the Aldermen never saw the actual agreement but instead relied on the Mayor's misrepresentation that the funds for the project would be repaid within seven years (Complaint ¶¶ 34-35). According to Plaintiffs complaint, the DonnaLynne agreement actually stipulated that the project would cost $800,000 for which the city would not be reimbursed (Complaint ¶¶ 34-35). Plaintiff asserts that Keith Jensen, then city attorney, was not present at the meeting, was unaware of the DonnaLynne subdivision plan, and was denied access to the written agreement by Defendant Mark Spengler (another city attorney)(Complaint ¶ 38). Plaintiff claims several state laws and local ordinances were broken by the approval process and implementation of Juneau & Associates' DonnaLynne subdivision project (Complaint ¶ 39).*fn1

  In September of 2000, Plaintiff and his prospective backer Don Balsters Page 5 agreed to seek approval of Plaintiff's Dobrey Slough project (Complaint ¶ 40). Apparently, Plaintiff and Balsters made some progress in negotiations with the Granite City Economic Committee, but Balsters withdrew because of some statements made by Defendants Dan Brown and Joe Juneau (Complaint ¶¶ 40-41). Balsters went with Defendants Dan Brown and Joe Juneau to Plaintiff's house to tell Plaintiff of his withdrawal (Id.). Plaintiff claims that a witness heard Dan Brown state that he had just "Knocked the legs out from under Lathrop's project. We can't let him compete with our DonnaLynne subdivision" (Complaint ¶ 42). Plaintiff claims that Defendants made false and groundless statements about him to governmental representatives, agencies, business partners, and financiers to prevent Plaintiff's Dobrey Slough plan from being accepted (Complaint ¶ 36). Specifically, Plaintiff claims that Defendants referred to him as being "shady" (Complaint ¶ 37), not "know[ing] what he is doing" (Complaint ¶ 36), and being "a substandard builder"(Complaint ¶ 36).

  On September 10, 2001, Plaintiff found another financial backer, Kent Kehr (Complaint ¶ 43). Apparently, Plaintiff had formed a "pre-annexation agreement" with Granite City in January 1998. On December 4, 2001, the Granite City Economic Committee "authorize[d] the Mayor to re-sign the Agreement" (Complaint ¶ 45). The Committee "seemed fine" with Plaintiff's written proposal at their March 19, 2002, meeting at which financier Kehr requested that the city reacquire 30 acres given to N&W Railroad (Complaint ¶ 46). It appears Plaintiff's plan was approved (Complaint ¶ 47). However, on March 26, 2002, Defendant Dan Page 6 Brown as City Economic Director told Kehr by telephone that the project would not be accepted (Complaint ¶ 47). Plaintiff has failed to include the reasons that Dan Brown mentioned to Kehr for why the project would not occur. Plaintiff claims that a witness heard Dan Brown bragging about the fact that he had once again stopped Plaintiff's financial backing and protected Juneau's DonnaLynne project (Complaint ¶ 48).

  Beginning on April 9, 2001, Plaintiff began to investigate Juneau & Associates' DonnaLynne project. Plaintiff made requests of certain documents and received a copy of the contract agreement establishing Juneau & Associates' DonnaLynne project (Complaint ¶¶ 53, 54). In his complaint, Plaintiff claims he did not receive other requested documents but fails to mention which documents were not produced.

  On April 16, 2002, Plaintiff and his attorney addressed the Granite City finance committee. Plaintiff informed the committee that Defendants had blocked the agreement for the approved Dobrey Slough project (Complaint ¶ 55). Plaintiff claims that the finance committee questioned Defendant Dan Brown on his interference with the plans and then unanimously passed a resolution to have the City Attorney work out a settlement agreement with Plaintiff to avoid litigation of the matter (Complaint ¶ 56). At the same meeting, Plaintiff informed the committee that the contract agreement for Juneau & Associates' plan did not stipulate for the repayment of $700,000-800,000 even though the committee had been informed that the plan would cost nothing (Complaint ¶¶ 57, 58). Page 7

  Plaintiff also notes other facts. The title to the land for Juneau & Associates' DonnaLynne project was once held by Defendant City Attorney Spengler (Complaint ¶ 59). Plaintiff then began seeking additional information concerning the DonnaLynne project but was denied access to this information at the direction of Spengler who claimed the documents could not be released because of pending litigation although no litigation was then pending (Complaint ¶¶ 60-68).

  Plaintiff has designated two RICO enterprises based on the facts above: (1) the "Juneau-Granite City Engineering Enterprise" that is composed of all defendants; and (2) the "Juneau Enterprise" that is comprised of Juneau & Associates and its employees (Complaint ¶¶ 17-18).

  III. MOTIONS CONCERNING THE GRANITE CITY DEFENDANTS

  The Granite City Defendants, which include the City of Granite City, Dan Brown, Ronald Selph, and Mark Spengler, have set forth several arguments for dismissing Lathrop's claims based on RULE 9(b), RULE 12(b)(6), and lack of subject matter jurisdiction (Doc. 11, 15). RULE 12(b)(6) provides the basis for each of the Granite City Defendants' arguments for dismissal except when RULE 9(b) or subject matter jurisdiction is specifically referenced. The Granite City Defendants have also requested that the Court consider their motion to dismiss as a summary judgment motion based on their attached affidavits if the Court ...


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