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Aspen Ridge Estates, LLC v. United City of Yorkville

February 11, 2009


The opinion of the court was delivered by: Charles P. Kocoras, District Judge


This matter comes before the court on the motion of Defendant United City of Yorkville ("Yorkville") to dismiss the complaint of Aspen Ridge Estates, LLC ("Aspen Ridge") pursuant to Federal Rules of Civil Procedure 12(b)(6). For the following reasons, Yorkville's motion is denied.


According to the allegations of the complaint, which we must accept as true for purposes of this motion, Yorkville officials created an annexation corridor that would extend Yorkville's boundaries to touch the Hamman Farm Property ("Hamman Farm") so that the Hamman Farm could be annexed to Yorkville. Donald Hamman owned Hamman Farm and allegedly gained control of it to develop a landfill on the property.

Yorkville wanted a new landfill and Hamman had land he was willing to have them use as a landfill. However, his land was not located in Yorkville. Yorkville came up with a plan to annex his land but could only do so if it annexed between current city limits at the time and the Hamman Farm.

After completing its initial negotiations with Hamman, Yorkville approached Paul Dresden, Aspen Ridge's representative, and induced him into acquiring land for residential development. Yorkville did not indicate its intent to annex the Hamman Farm to use as a landfill. Consequently, Aspen Ridge agreed to acquire roughly 126 acres located in what was in 2004 the southwestern edge of Yorkville.

Between 2004 and 2006, Aspen Ridge alleges that it met with Yorkville officials numerous times to negotiate the terms of annexation. Aspen Ridge further asserts that in May 2006, Dresden inquired of Yorkville officials whether there was a plan to site a landfill on the Hamman Farm. Yorkville denied having any knowledge of such a plan. As a result, Aspen Ridge finalized the annexation agreement.

The final agreement contained terms requiring Aspen Ridge to pay substantial fees and deposits for annexation, development, and consulting as well as the costs of surveys, plats, city's attorney fees, recording fees, and engineering services. Aspen Ridge was required to install robust water and other infrastructure with capacity in excess of that needed for the development of Aspen Ridge's property and the five other properties within the annexation corridor. Aspen Ridge alleges that by having these six owners finance the infrastructure costs, Yorkville planned to fund the infrastructure that the landfill would require.

Next, Yorkville expedited the annexation of two additional properties ("Extended Annexation Corridor"). Like the Aspen Ridge property, the Extended Annexation Corridor properties were used for farming at that time. In return for quick annexation, Yorkville waived several of the fees and other related costs that it had required in earlier annexation agreements, including that for Aspen Ridge's parcel. Furthermore, it allegedly offered the Extended Annexation Corridor extensive concessions and city services at no cost. Eventually, Yorkville annexed the Extended Annexation Corridor. Shortly thereafter, on September 26, 2006, Yorkville annexed the Hamman Farm.

On November 4, 2008, Aspen Ridge filed the present six-count amended complaint. Count I alleges that Yorkville violated the Equal Protection Clause of the Fourteenth Amendment and Counts II and III assert relief pursuant to the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c), (d). As these claims arise under the laws of the United States, their jurisdictional basis is 28 U.S.C. § 1331. Aspen Ridge asserts that we have jurisdiction over the remaining state law claims consisting of fraudulent misrepresentation, fraudulent concealment, and conspiracy because they form part of the same case or controversy and should be considered through our supplemental jurisdiction. See 28 U.S.C. § 1367(a).

In response to Aspen Ridge's complaint, Yorkville filed the instant motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) on the basis that Counts I-III fail to state a cognizable claim and request that we decline to exercise supplemental jurisdiction over the three state law claims.


A Rule 12(b)(6) motion to dismiss is used to test the legal sufficiency of a complaint. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In ruling on a motion to dismiss, a court must draw all reasonable inferences in favor of the plaintiff, construe allegations of a complaint in the light most favorable to the plaintiff, and accept as true all well-pleaded facts and allegations in the complaint. Bontkowski v. First Nat'l Bank of Cicero, 998 F.2d 459, 461 (7th Cir. 1993); Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991). To be cognizable, the factual allegations contained within a complaint must raise a claim for relief "above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1965 (2007). However, a pleading need only convey enough information to allow the defendant to understand the gravamen of the complaint. Payton v. Rush-Presbyterian-St. Luke's Med. Ctr., 184 F.3d 623, 627 (7th Cir. 1999).

Fed. R. Civ. P. 9(b) creates exceptions to the federal regime of notice pleading and specifies that, for "all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." Fed. R. Civ. P. 9(b). "Read together, Rule 9(b) and Rule 8 require that the complaint include the time, place and contents of the alleged fraud, but the complainant need not plead evidence." Amakua Development LLC v. Warner, 411 F. Supp. 2d 941, 947 (N.D. Ill. 2006). To put in another way, the complaint must allege "the who, what, when, where, and how: the first paragraph of a newspaper story." ...

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