The opinion of the court was delivered by: BLANCHE MANNING, District Judge
Before the court is defendants' motion to dismiss under Rule
12(b)(6) certain counts of plaintiff's complaint for failure to
state a claim. For the reasons stated below, the defendants'
motion is denied in part and granted in part.
Plaintiff has filed a ten-count complaint seeking to enforce a
judgment he has obtained against defendants' affiliates.
Specifically, plaintiff alleges that he has a $954,728.60
judgment (excluding attorneys' fees, costs, and interest) against
Bar Louie Tempe, Inc. and a $488,604.20 judgment (again excluding
attorneys' fees, costs, and interest) against defendant
Restaurant Development Group ("RDG"). Defendants Roger D.
Greenfield and Theodore Kasemir are officers, directors, and sole
shareholders of both RDG and Bar Louis Tempe. According to the
plaintiff, Greenfield and Kasemir, in order to avoid making
payment on the judgments, caused RDG to transfer to or for the
benefit of the defendants valuable rights under certain
management agreements for no consideration and thereafter caused
RDG to cease its business operations. Plaintiff seeks to avoid RDG's alleged fraudulent transfers and
to collect the judgments from the defendants based upon their
improper conduct and failure to operate their business in
accordance with applicable law.
Defendants have moved to dismiss counts II (avoidance of
fraudulent transfers actual fraud), III (aiding and abetting
actual fraudulent transfers), IV (avoidance of fraudulent
transfers constructive fraud), VI (aiding and abetting breach
of fiduciary duties) and VIII (aiding and abetting unlawful
dividend) of the Amended Complaint*fn1 under Fed.R.Civ.P.
12(b)(6) for failure to state a claim. Specifically, defendants
contend that a cause of action for aiding and abetting does not
exist under Illinois law and that counts II and IV must be
dismissed because plaintiff has failed to plead fraud with
particularity as required by Fed.R.Civ.P. 9(b).
II. Standard for Motion to Dismiss
The Court may dismiss claims pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure if the plaintiff fails "to state
a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6).
In considering a motion to dismiss, the Court accepts as true all
well-pleaded factual allegations and draws all reasonable
inferences in the plaintiff's favor. McCullah v. Gadert,
344 F.3d 655, 657 (7th Cir. 2003). On a motion to dismiss, the "issue
is not whether a plaintiff will ultimately prevail but whether
the claimant is entitled to offer evidence to support the
claims." Cole v. U.S. Capital, Inc., 389 F.3d 719, 724 (7th
Cir. 2004) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236
III. Analysis A. Aiding and Abetting
Defendants first argue that no separate tort of aiding and
abetting law exists in Illinois. Classic Amenities, Inc. v.
Verbeke, et al., No. 00 C 3326, 2003 WL 21801021, at *2 n. 1
(N.D. Ill. August 1, 2003) ("Ready Care argues that under
Illinois law there is no separate tort of aiding and abetting. As
pointed out in Eastern Trading Co. v. Refco, Inc.,
229 F.3d 617, 623 (7th Cir. 2000), this is true.").
It is true that the Seventh Circuit stated in Eastern Trading
that "aiding and abetting is a basis for imposing liability for
the tort aided and abetted rather then being a separate tort."
Eastern Trading, 229 F.3d at 623. In so holding, however, the
Seventh Circuit acknowledged that at least two Illinois cases had
recognized aiding and abetting as a distinct claim. Id.
(stating that "a couple of cases have language (weakly)
consistent with the separate-tort idea.") (citing Carter Coal
Co. v. Human Rights Comm'n, 633 N.E.2d 202, 205 (Ill.App.Ct.
1994); Wolf v. Liberis, 505 N.E.2d 1202, 1208 (Ill.App.Ct.
1987)). Indeed, cases subsequent to Eastern Trading have
recognized a separate cause of action for aiding and abetting.
Thornwood, Inc. v. Jenner & Block, 799 N.E.2d 756, 759-762
(Ill.App.Ct. 2003) (recognizing aiding and abetting fraud and
aiding and abetting breach of fiduciary duty); Hefferman v.
Bass, No. 04 C 5748, 2005 WL 936900, at *3 (N.D. Ill. Apr. 15,
2005) (addressing defendant's motion to dismiss an aiding and
abetting claim "rooted in intentional behavior" and stating the
elements thereof) (citing Thornwood, 799 N.E.2d 756).
Moreover, the District Court for the Southern District of New
York recently had occasion to address whether such causes of
action existed as distinct and separate claims under Illinois law
in In re Parmalat Securities Litigation, 377 F. Supp. 2d 390,
412-14 (S.D.N.Y. 2005). The In re Parmalat court noted the conflict between the Seventh Circuit's
position in Eastern Trading and subsequent cases interpreting
Illinois law, such as Thornwood and Hefferman, and concluded
that "[g]iven this trend in the lower courts, the Court cannot
agree with defendants that Thornwood is an outlier unworthy of
the respect that a federal court sitting in diversity must give
to the decisions of the Illinois Court of Appeals." In re
Parmalat, 377 F. Supp. 2d at 413-14 (citations omitted).
This court agrees with the In re Parmalat court that Illinois
courts recognize separate claims for aiding and abetting. This
court acknowledges that it has previously concluded that the
"Seventh Circuit has expressly found that the tort of aiding and
abetting fraud does not exist in Illinois." W. United Life
Assurance Co. v. Fifth Third Bank, 02 C 7315, 2003 WL 21800076,
at *4 (N.D. Ill. July 29, 2003) (citing Eastern Trading,
229 F.3d at 624). However, as the defendants note in their brief, the
Thornwood case by the Illinois Appellate Court finding a cause
of action for aiding and abetting was decided after this
court's ruling in Fifth Third Bank. Further, as the In re
Parmalat court noted, "the dispute is academic" because the:
Seventh Circuit and the intermediate Illinois courts
agree that knowingly assisting another to commit
fraud gives rise to civil liability under Illinois
law. They simply disagree on whether such conduct
should be called fraud or aiding and abetting fraud.
In re Parmalat, 377 F. Supp. 2d at 414; see Eastern Trading,
229 F.3d at 623 ("There is nothing to be gained by multiplying
the number of torts, and specifically by allowing a tort of
aiding and abetting a fraud to emerge by mitosis from the tort of
fraud, since it is apparent that one who aids and abets a fraud,
in the sense of assisting the fraud and wanting it to succeed, is
himself guilty of fraud"). Because the court concludes that a
cause of action exists under Illinois law for aiding and abetting, the court denies defendants' motion to dismiss
Counts II, VI, and XIII of the amended complaint.
B. Pleading with Particularity Under Fed.R.Civ.P. 9(b).
Defendants argue that plaintiff's counts II and IV alleging
that the defendants fraudulent transfers should be dismissed
because plaintiff has failed to plead these ...