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In Retail Fund Algonquin Commons v. Abercrombie & Fitch Stores

October 5, 2011

IN RETAIL FUND ALGONQUIN COMMONS, L.L.C., BY ITS MANAGER, INLAND REAL ESTATE CORPORATION, PLAINTIFF,
v.
ABERCROMBIE & FITCH STORES, INC., AND JEFFREY R. ANDERSON REAL ESTATE, INC., DEFENDANTS.
ABERCROMBIE & FITCH STORES, INC., AN OHIO CORPORATION,
COUNTER-PLAINTIFF,
v.
IN RETAIL FUND ALGONQUIN COMMONS, L.L.C., BY ITS MANAGER, INLAND REAL ESTATE ORPORATION, COUNTER-DEFENDANTS.
ABERCROMBIE & FITCH STORES, INC., THIRD-PARTY PLAINTIFF,
v.
ALGONQUIN COMMONS, LLC, THIRD-PARTY DEFENDANTS.
ALGONQUIN COMMONS, LLC, THIRD-PARTY PLAINTIFF,
v.
DUKE CONSTRUCTION LIMITED PARTNERSHIP, THIRD-PARTY DEFENDANT.
DUKE CONSTRUCTION LIMITED PARTNERSHIP, THIRD-PARTY PLAINTIFF,
v.
LEGAT ARCHITECTS, INC., JACOB & HEFNER ASSOCIATES, INC., STRUCTURES UNLIMITED,P.C., SHREMSHOCK ) ARCHITECTS, INC., PAUL J. FORD & COMPANY, INC., OLIVEWOOD CONSTRUCTION, INC. AND MVP PLUMBING, INC., THIRD-PARTY DEFENDANTS.
LEGAT ARCHITECTS, INC., THIRD-PARTY PLAINTIFF,
v.
SHREMSHOCK ARCHITECTS, INC., PAUL J. FORD & COMPANY, INC., AND OLIVEWOOD CONSTRUCTION, INC., THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: Judge Sharon Johnson Coleman

Memorandum Opinion and Order

Coming before the Court are six Motions to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Paul J. Ford & Company moves to dismiss Count X of Duke Construction LP's Amended Third-Party Complaint [179] and Count II of Legat Architects, Inc.'s Third-Party Complaint [181]. Shremshock Architects, Inc. moves to dismiss Count IX of Duke Construction's Amended Third-Party Complaint [198] and Count I of Legat Architects, Inc.'s Third-Party Complaint [198]. Olivewood Construction Inc. moves to dismiss Count XI of Duke Construction's Amended Third-Party Complaint [201] and Count III of Legat Architects, Inc.'s Third-Party Complaint [204]. Since all six motions pertain to two third-party complaints and assert the same grounds for dismissal, this Court will address all five in a single order. For the reasons stated below the motions are denied.

Background

In 2003, Abercrombie & Fitch Stores, Inc. ("Abercrombie") undertook the design and construction of a "bump-out" window display at its retail store at Algonquin Commons Shopping Center in Algonquin, Illinois. Inland Real Estate Corporation purchased Algonquin Commons Shopping Center from Algonquin Commons LLC in 2006. In March 2008, Abercrombie notified Inland of water intrusion at their store. In September 2008, Abercrombie allegedly engaged in self-help by gutting and abandoning the premises and stopped paying rent to Inland.

On April 7, 2011, Inland Real Estate Corporation, In Retail Fund Algonquin Commons LLC, and In Retail Fund LLC, In Retail Manager LLC (collectively "Inland"), filed a Second Amended Complaint against Abercrombie for negligent hiring and supervision, breach of contract for failure to pay rent and indemnify, and breach of contract for failure to procure insurance. (Dkt. 142.)

Abercrombie filed a counterclaim against Inland claiming breach of the lease agreement and constructive eviction, seeking reimbursement of the unamoritized portion of its investment in the leasehold improvements ($311,682.39), remediation and demolition costs it incurred ($284,666), and lost profits. At the same time, Abercrombie filed a third-party complaint against Algonquin Commons LLC (Inland's predecessor in interest on the lease agreement) alleging the same claims against Algonquin Commons, i.e., breach of the lease and constructive eviction. (Dkt. 27.)

Thereafter, Algonquin Commons filed two third-party complaints: one, against Duke Construction LP and the Greeby Companies, and a second, against only the Greeby Companies (Dkt. 59). Algonquin Commons voluntarily dismissed its second third-party complaint against the Greeby Companies. Three more third-party complaints followed. Two are at issue here: (1) Duke Construction's third-party complaint against Shremshock Architects, Inc., Paul J. Ford & Company, Olivewood Construction Inc. and MVP Plumbing Corporation for contribution due to their defective design and construction of the "bump out"; and (2) Legat Architects, Inc.'s ("Legat") third-party complaint for contribution against Shremshock Architects, Paul J. Ford & Company, and Olivewood Construction, Inc.

Legal Standard

A motion to dismiss pursuant to Rule 12(b)(6) challenges the sufficiency of the complaint. When evaluating the sufficiency of a complaint, the court construes the complaint in the light most favorable to the plaintiff, accepts all well-pleaded facts as true, and draws all inferences in favor of the plaintiff. Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143, 1146 (7th Cir. 2010)(citing Reger Dev. LLC v. Nat'l City Bank, 592 F.3d 759, 763 (7th Cir. 2010). "To survive a motion to dismiss, the plaintiff must do more than simply recite elements of a claim; the 'complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face."'" Reynolds, 623 F.3d at 1146 (quoting Ashcroft v. Iqbal, 129 S. Ct. 1937,1949, 173 L. Ed. 2d 868 (2009)).

Discussion

The third-party defendant movants, Paul J. Ford & Company, Shremshock Architects, and Olivewood Construction, argue in their respective motions that the allegations brought against them by Duke Construction and Legat Architects for contribution should be dismissed for three reasons. First, the complaints must fail because the "original" third-party complaint (Abercrombie v. Algonquin Commons), upon which these follow, is improper impleader under Rule 14(a) because Abercrombie's claim against Algonquin Commons is not derivative of Inland's suit against Abercrombie. Second, the movants argue that the contribution sought in the third-party complaints is improper invocation of the Illinois Contribution Act because the Abercrombie v. Algonquin Commons suit does not "sound in tort" and thus the movants are not joint tortfeasors. Lastly, the movants assert that the Moorman Economic Loss Doctrine prohibits suits sounding in tort for purely economic damages.

Rule 14(a) states that, "[a] defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it." Fed. R. Civ. P. 14(a)(1). Therefore, the plain language of Rule 14(a) distinguishes a third-party complaint as one where the defendant is attempting to transfer to the third-party defendant the liability alleged against the defendant by the original plaintiff. Forum Ins. Co. v. Ranger Ins. Co., 711 F.Supp. 909, 915 (N.D. Ill. 1989) (citing e.g., U.S. General Inc. v. Joliet, 598 F.2d 1050, 1053 (7th Cir. 1979); Parr v. Great Lakes Express Co., 484 F.2d 767, 769 (7th Cir. 1973); Leaseway Warehouses, Inc. v. Carlton, 568 F.Supp. 1041, 1043 (N.D. Ill. 1983)). "The fact that the third-party claim arose out of the same transaction or set of facts is irrelevant since impleader cannot be used as a way of combining all controversies having a common relationship." Wright & A. Miller, Federal Practice and Procedure §1442, at 208 (1971).

Here, Abercrombie's third-party complaint against Algonquin Commons is technically improper impleader under Rule 14. From the face of the third-party complaint, Abercrombie is not seeking to transfer its liability to Algonquin Commons. In fact, Abercrombie's complaint against Algonquin Commons is identical to its counterclaims against Inland. It seems that Abercrombie is attempting to use a third-party complaint to effectively bring Algonquin Commons in to the instant case as a co-defendant on Abercrombie's counterclaim against Inland. Nevertheless, since Rule 15(a) encourages granting leave to amend, even though technically improperly pleaded, this Court would allow Abercrombie to amend its third-party complaint. Accordingly, this Court declines to dismiss the Duke and Legat's third-party complaints on the basis that the initial third-party complaint is technically faulty as currently pleaded.

Next, the movants argue that the contribution claims asserted against them by Duke and Legat are not viable under the Illinois Contribution Act, 740 ILCS 100/2, because they are not joint tortfeasors and the original complaint against Algonquin Commons from which the ...


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