The opinion of the court was delivered by: Hon. Harry D. Leinenweber
MEMORANDUM OPINION AND ORDER
Plaintiffs Nicolas Balagiannis and Reserve Hotels Pty Limited as trustee for the NBF Trust (hereinafter, "Reserve") filed suit against Theodore Mavrakis and Costas Mavrakis. For jurisdictional reasons, Plaintiffs have voluntarily dismissed their claims against Costas Mavrakis (hereinafter, "Costas"), leaving only the breach of guaranty, promissory estoppel, and fraud claims pending against Theodore Mavrakis (hereinafter, "Ted"). Defendant now moves to dismiss these counts, pursuant to Rules 12(b)(6) and 12(b)(7). For the reasons stated herein, Defendant's Motion to Dismiss is granted in part and denied in part.
The Complaint in this case narrates a story of Greek casinos, shifting money, broken promises, and outright lies, all intended to defraud Plaintiffs of the roughly $4.5 million they desired to invest in Theros Gaming International, Inc. ("Theros"). In ruling on Defendant's Motion to Dismiss, the Court accepts the well-pleaded allegations of the complaint as true and draws all reasonable inferences in favor of the Plaintiffs. See Brown v. Budz, 398 F.3d 904, 908 (7th Cir., 2005). However, the Court need not accept legal conclusions or unsupported inferences of fact. See County of McHenry v. Insurance Co. of the West, 438 F.3d 813, 818 (7th Cir., 2006). Nor is the Court required to accept the allegations of the complaint when an attached written instrument is to the contrary. See Bucciarelli-Tieger v. Victory Records, Inc., 488 F.Supp.2d 702, 707 (N.D. Ill., 2007).
According to the Complaint, both Ted and Costas Mavrakis were shareholders in Theros, an Illinois corporation formed to own and operate a Greek casino. In 2003, Ted reached an agreement to sell his approximately 43% interest in Theros to a third party, but Costas asserted his right of first refusal to purchase the stock. In order to exercise that right of first refusal, Costas was required to deposit into escrow $4 million in cash, a promissory note for an additional $5 million, and a release of claims against Ted signed by the remaining shareholder, Mike Rose. In order to secure the necessary funds, Costas entered into an agreement with Mr. Balagiannis ("Balagiannis") (who was acting on behalf of Reserve) on June 9, 2003, whereby Balagiannis would advance to Costas the $4 million in cash needed to complete the stock purchase and lend Costas an additional $500,000 to cover legal fees in an unrelated suit involving the company. Costas, in turn, agreed to sell a 34% interest in Theros to Balagiannis for a total cost of $6,954,530, with the $4 million advance being counted toward the purchase price. In accordance with the agreement, Balagiannis and Reserve wired $3.7 million to the escrow account and the remaining $800,000 directly to Costas.
Costas never deposited the promissory note or release into escrow, however, and the stock purchase was never executed. Instead, even though they both knew that the money in escrow was a loan from Mr. Balagiannis, at sometime in late October 2003, Ted and Costas transferred the money out of escrow and into an account for Ted located in Greece. Since that time, both Ted and Costas have repeatedly told Balagiannis that the funds are being held as earnest money to insure that Costas does not waive his right to purchase the stock, even though Ted's stock was sold to a third party in 2004.
Plaintiffs also attach two (translated) letters to their Complaint. The first, sent by Ted to Mr. Balagiannis on October 22, 2003, states in its entirety:
I hereby affirm that your funds (USD 4,000,000) shall not be at risk in any case. As a seller of the stock shares, I am also giving you my personal guarantee. On the other hand, if you change your mind, for any reason, I will gladly purchase, myself, your rights at the same consideration.
The second letter, sent by Ted to Costas on March 31, 2007 and carbon copied to Balagiannis, affirms that Ted is holding money in a personal account which constitutes a down payment on a purchase of his shares and promises that Ted will accept Costas's right of purchase if the sale to the third party is voided. The letter further states that if Costas wishes to withdraw from the agreement, Costas should notify Ted of that fact in writing, and Ted will then reimburse the funds he is holding.
Plaintiffs' demand for payment from Defendant was refused, and this suit followed.
A Motion to Dismiss under Rule 12(b)(6) is designed only to test the sufficiency of the Complaint, not to decide the underlying merits of the case. See Autry v. Northwest Premium Services, Inc., 144 F.3d 1037, 1039 (7th Cir., 1998). Therefore, a plaintiff need only describe his claim in sufficient detail to "plausibly suggest that the plaintiff has a right to relief" and to give the defendant "fair notice of what the claim is and the grounds upon which it rests." E.E.O.C. v. Concentra Health Services, Inc., 496 F.3d 773, 776 (7th Cir., 2007). Although mere vagueness or lack of detail will not compel dismissal, see Strauss v. City of Chicago, 760 F.2d 765, 767 (7th Cir., 1985), the complaint must allege facts, either directly or inferentially, which set forth the essential elements of the cause of action. See Looper Maintenance Service Inc. v. City of Indianapolis, 197 F.3d 908, 911 (7th Cir., 1999).
A. Count II: Breach of Guaranty
Both parties agree on a common definition for a personal guaranty under Illinois law: "an agreement by one or more parties to answer to another for ...