The opinion of the court was delivered by: Jeanne E. Scott, U.S. District Judge
This cause is before the Court on the Third Party Defendants' Motion to Dismiss and Motion for a More Definite Statement (d/e 68) filed by Third Party Defendants BLP Lincoln Properties, LLC, C. Eugene Burwell, and Burwell Management Company (collectively, the Burwell Third Parties), and Third-Party Defendants' Thomas Ashley and Ashley Investments, Inc. Rule 12(b)(1) and (6) Motion to Dismiss (d/e 71). For the reasons stated below, the Burwell Third Parties' Motion is allowed in part and denied in part, and the Motion filed by Thomas Ashley and Ashley Investments (collectively, the Ashley Third Parties) is denied.
According to the Complaint (d/e 1), on March 26, 2002, Plaintiff Thorntons, Inc. entered into an Amended and Restated Lease Agreement (the Thorntons Lease) with Third Party Defendant Burwell Management Co. for two contiguous tracts of land in Lincoln, Illinois (Tracts 1 and 2). Burwell Management Co. was acting on behalf of Third Party Defendant BLP Lincoln Properties (BLP).
Thorntons uses Tract 1 for a store. Tract 2 is a vacant lot that lies between Thorntons' store on Tract 1 and a Wendy's restaurant; currently it is used as a parking lot.*fn1 The Thorntons Lease provided Thorntons the option to purchase Tracts 1 and 2 during the first 13 years of the lease term. On April 5, 2002, Thorntons obtained a title insurance policy for Tracts 1 and 2 from Defendant Chicago Title Insurance Co. (Chicago Title).
In January of 2006, Thorntons exercised its right to purchase Tracts 1 and 2. On January 16, 2006, Burwell Management Co. informed Thorntons for the first time that the Wendy's next to Tract 2 had previously entered into a lease agreement (the Wendy's Lease) allowing it to use Tract 2 as a parking lot. The parties to the Wendy's Lease were Third Party Defendant C. Eugene Burwell, the former owner of Tract 2, and Third Party Defendant Thomas Ashley, the former owner of the Wendy's franchise. (Third Party Defendant Ashley Investments, Inc. now owns the franchise.) The Wendy's Lease predated the Thorntons Lease; it was recorded in the Logan County Recorder's Office in September of 1996. The Wendy's Lease provided for a lease term of 30 years and two 5-year options to renew. Chicago Title never disclosed the Wendy's Lease as a pre-existing encumbrance on Tract 2.
Thorntons subsequently filed a claim with Chicago Title under the title insurance policy, and when Chicago Title failed to resolve the claim, Thorntons filed this suit in Kentucky state court. Chicago Title removed to federal court, and the case was transferred to the Central District of Illinois. Thorntons' Complaint raises four counts against Chicago Title. In Count I, it alleges that by failing to satisfy the claim or pay Thorntons for its loss as a result of the unmarketability of the title to Tract 2, Chicago Title committed a breach of contract. In Count II, Thorntons alleges that by failing to satisfy the claim or pay Thorntons for its loss as a result of the unmarketability of the title to Tract 2, Chicago Title breached its duty of good faith and fair dealing. In Count III, Thorntons alleges that by failing to resolve its claim within 30 days, Chicago Title violated Kentucky's unfair claims settlement practices statute. In Count IV, Thorntons alleges that Chicago Title's failure to discover the Wendy's Lease in its search of the public records constituted negligence.
On April 21, 2008, Chicago Title filed a Third Party Complaint (d/e 47) against the Burwell Third Parties and the Ashley Third Parties; it also termed its Third Party Complaint a Counterclaim against Thorntons. In Count I of the Third Party Complaint, Chicago Title alleges that a dispute exists between Thomas Ashley and "the other parties" regarding whether and to what extent he has a lease involving Tract 2. Chicago Title Insurance Company's Third Party Complaint and Counterclaim (d/e 47), ¶ 29. Chicago Title asks for a declaration of the rights to occupy Tract 2. According to Chicago Title, if Thomas Ashley has no lease involving the property, or if the lease is void, invalid, or abandoned, Thorntons has no viable claim against Chicago Title. In Count II of the Third Party Complaint, Chicago Title alleges that BLP and Burwell Management Co. misrepresented the nature and extent of Thorntons' rights under the Thorntons Lease and option to purchase. It also alleges that the Wendy's Lease breached the covenant of quiet enjoyment set forth in the Thorntons Lease. Chicago Title claims that these alleged misrepresentations and this alleged breach make BLP and Burwell Management Co. liable to Chicago Title for any damages it owes to Thorntons. Count II also requests a declaration of the rights of the parties and the public to Tract 2.
The Ashley Third Parties and the Burwell Third Parties have both moved to dismiss the Third Party Complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The Burwell Third Parties also argue that, in the alternative, the Court should order Chicago Title to provide a more definite statement under Federal Rule of Civil Procedure 12(e).
In their briefs, the parties raise numerous arguments for dismissal. As discussed below, the Court finds that Chicago Title has standing to bring its claims for a declaration of rights. Chicago Title lacks standing, however, on its claims against BLP and Burwell Management Co. on the Count II claim for damages. Additionally, the claims against C. Eugene Burwell are not redundant, and Chicago Title's Third Party Complaint adequately pleads a claim on which relief can be granted.
The Third Party Defendants all assert that Chicago Title lacks standing to bring its Third Party Complaint. Under Federal Rule of Civil Procedure 12(b)(1), a party may challenge subject matter jurisdiction, including standing. RWB Svs, LLC v. Hartford Computer Group, Inc., 539 F.3d 681, 686 (7th Cir. 2008). The Court must accept as true all well-pleaded factual allegations and draw reasonable inferences in favor of the party who filed the complaint. Ezekiel v. Michel, 66 F.3d 894, 897 (7th Cir. 1995). The Court may consider evidence outside the complaint in deciding a 12(b)(1) issue. Capitol Leasing Co. v. FDIC, 999 F.2d 188, 191 (7th Cir. 1993). Where a party questions the jurisdictional allegations, the party who filed the complaint must prove that the jurisdictional requirements have been met. Kontos v. United States Dept. of Labor, 826 F.2d 573, 576 (7th Cir. 1987).
Determining whether Chicago Title has standing to bring its claims here requires two distinct analyses. First, in Counts I and II, Chicago Title requests a declaration of the rights of the parties and the public to Tract 2. Second, in Count II, Chicago Title also alleges that any damages Thorntons suffered result from alleged lease breaches and misrepresentations by Burwell Management and BLP. Chicago Title argues that in the event Thorntons is awarded damages in the original suit, Chicago Title is entitled to recover those damages from Burwell Management and BLP. ...