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ALCALA v. TOTARO

December 16, 2005.

JESUS ALCALA, MARIA ALCALA, JOSE HUERTA, and MICAELA MEDINA, Plaintiffs,
v.
VINCENZO TOTARO, MARIA TOTARO, ROCKY CARUSO, GARY LUNDEEN, AUDREY LIVERTON, ATTORNEYS' TITLE GUARANTY FUND, INC., MARY LYNN CHLADA and THE TOWN OF CICERO, Defendants.



The opinion of the court was delivered by: GEORGE MAROVICH, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiffs Jesus Alcala ("Mr. Alcala"), Maria Alcala ("Mrs. Alcala") (together, the "Alcalas"), Jose Huerta and Macaela Medina filed a nine-count complaint against Vincenzo Totaro ("Mr. Totaro"), Maria Totaro ("Mrs. Totaro") (together, the "Totaros"), Rocky Caruso ("Caruso"), Gary Lundeen ("Lundeen"), Audrey Liverton ("Liverton"), Attorneys' Title Guaranty Fund, Inc., Mary Lynn Chlada ("Chlada") and the Town of Cicero ("Cicero" or the "Town").

Two defendants, Chlada and Cicero, have moved pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for an order dismissing plaintiffs' four claims against them. For the reasons set forth below, the Court denies defendants' motion to dismiss.

  I. Background

  For purposes of this motion to dismiss, the Court takes as true the allegations in the complaint. The alleged facts relevant to this motion are described below. Jesus and Maria Alcala, a married couple, were looking to purchase a home with an attached apartment so that they could house Mrs. Alcala's parents, plaintiffs Jose Huerta and Micaela Medina. In February 2002, the plaintiffs made an offer for a property (the "Property") owned by the Totaros. On February 27, 2002, Mr. Alcala, Huerta, Medina and the Totaros signed a contract for the Property, which contract provided that the Totaros would convey title to the premises to Mr. Alcala, Huerta and Medina in a recordable general warranty deed.

  The Property at issue is located in the Town of Cicero. Cicero is involved in every real estate transaction within its borders by virtue of a transfer tax it imposes on real estate transfers. The payment of the transfer tax is evidenced by the adhesion of a Transfer Stamp to the face of the deed. The deed cannot be recorded without the Transfer Stamp. In order to obtain a Transfer Stamp, the seller must obtain a Certificate of Compliance from the Building Commissioner, defendant Chlada. The Building Commissioner is supposed to issue the Certificate of Compliance only after the property is inspected and found to be in full compliance with Cicero's housing code, building code, electrical code and plumbing code, among others. Alternatively, a seller can obtain a Transfer Stamp if the purchaser submits a notarized affidavit that he or she is aware of the code violations.

  According to the complaint allegations, the Property never received a Transfer Stamp. The difficulty seems to have started with the inspection. The Property was inspected on March 5, 2002 by two Cicero inspectors, Ramiro Leon ("Leon") and Abner Vazquez ("Vazquez"). The two drafted an inspection report noting such code violations as exposed wiring, an uncapped gas line, missing Ground Fault Circuit Interrupters and an illegal basement apartment. Mr. Totaro's son-in-law, defendant Caruso (who is alleged to have given campaign contributions to Cicero politicians), was present at the inspection and insisted that Leon and Vazquez write up a "clean" report that did not mention any of the code violations. When Leon refused, Caruso asked Leon if he knew who Caruso was and threatened him. When Leon continued to refuse to draft a "clean" report, Caruso telephoned Building Commissioner Chlada for assistance. Chlada spoke to Leon, asking him whether he liked his job and warning him that he needed to write a "clean" report if he wanted to retain his job. Leon declined to write a "clean" report, and plaintiffs do not know what happened to the original report. (Mr. Alcala claims that he was not allowed to attend the inspection. Instead, it was not until the fall of 2004 (when they were informed by Leon) that plaintiffs learned that Chlada threatened Leon and that Leon had found code violations at the March 2002 inspection.)

  At the closing, plaintiffs' attorney noticed that the deed did not contain a Transfer Stamp, although the closing statement stated that the seller had paid for the Transfer Stamp. The settlement agent (who also acted as the Totaros' attorney at the closing) said he would purchase the Transfer Stamp the next day. Although the settlement agent gave the Totaros the money for the Property, he never purchased a Transfer Stamp. For more than two years, the deed to the Property remained unrecorded, unbeknownst to the plaintiffs.

  In the summer of 2004, Mr. Alcala learned that deed had never been recorded. Mr. Alcala attempted to obtain a building permit from Cicero. The permit was rejected because Mr. Totaro was still the recorded owner of the Property. Mr. Alcala then learned from his attorney that the deed had never been recorded. The Property was somehow scheduled for another inspection, which the Property again failed. Despite the fact that the Property never received a Certificate of Compliance or a Transfer Stamp, another defendant somehow managed to record the deed in December 2004, allegedly in violation of state laws.

  Based on these allegations, the plaintiffs bring four claims against defendants Chlada and Cicero.*fn1 In Count I, plaintiffs allege that Chlada and Cicero violated the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution by applying to plaintiffs a Certificate of Compliance procedure that differed from the one applied to other purchasers in Cicero. Plaintiffs also allege that defendants wilfully and maliciously interfered with a building inspection. In Count II, plaintiffs allege that defendant Cicero had a systemic policy, custom or practice of utilizing and/or ignoring the building code to serve the political and pecuniary interests of Cicero's officials. In Count VI, plaintiffs allege that Cicero and Chlada conspired with the Totaros and Caruso to commit fraud against the plaintiffs by concealing from the plaintiffs the building code violations discovered by Vazquez and Leon. In Count IX, plaintiffs allege that pursuant to 745 ILCS 10/9-102 Cicero is liable to pay damages for Chlada's conduct. Cicero and Chlada have moved to dismiss these claims.

  II. Standard on a motion to dismiss

  The Court may dismiss claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure where the plaintiffs fail "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 plaintiffs' 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 (1974)).

  A claim brought under 42 U.S.C. ยง 1983 against a municipality is not subject to more stringent pleading requirements under Rules 8 and 9 of the Federal Rules of Civil Procedure than are other claims in federal court. Leatherman v. Tarrant Cty. Narcotics Intell. & Coord. Unit, 507 U.S. 163, 168-169 (1993). A plaintiff "need not plead facts; he can plead conclusions." Jackson v. Marion Cty., 66 F.3d 151, 153 (7th Cir. 1995); see also McCormich v. City of Chi., 230 F.3d 319, 324 (7th Cir. 2000) ("The smattering of phrases like `highest policymaking officers' and `widespread custom' throughout [plaintiff's] complaint is a common practice designed to ensure that the complaint will withstand scrutiny under liberal notice pleading. Some would assert that the inclusion of this language should be `enough.' Others suggest ...


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