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A.P. Properties, Inc v. Mitchell Rattner and Mariann

October 27, 2011


Appeal from the Circuit Court of Lake County. No. 10-L-111 Honorable David M. Hall, Judge, Presiding.

The opinion of the court was delivered by: Justice McLAREN

JUSTICE McLAREN delivered the judgment of the court, with opinion. Justices Hutchinson and Burke concurred in the judgment and opinion.


¶ 1 Plaintiff, A. P. Properties, Inc., filed a complaint against defendants, Mitchell Rattner and Mariann Weiss, for tortious interference with prospective economic advantage (tortious interference). The trial court dismissed the complaint, without prejudice, for failure to state a cause of action (see 735 ILCS 5/2-615 (West 2010)). Plaintiff then filed an amended complaint that alleged the same facts as did the original complaint but sounded in unjust enrichment. The trial court dismissed the complaint, with prejudice, for failure to state a cause of action. Plaintiff appeals, arguing that the trial court erred in (1) dismissing the original complaint; and (2) dismissing the amended complaint. We affirm.

¶ 2 Plaintiff's original complaint alleged as follows. Plaintiff has long participated in annual tax-sale auctions, at which it competes with other "tax buyers" to acquire tax-sale certificates. In a few cases, the owner does not pay the delinquent taxes, and the tax buyer obtains a tax deed to the property. Plaintiff acquires only a few such tax deeds each year despite purchasing hundreds of certificates. Defendants regularly purchase tax-delinquent properties just before the expiration of the period of redemption so that they can obtain real estate at less than fair-market value from owners who are in imminent danger of losing title.

¶ 3 The complaint continued as follows. In August 2007, defendants purchased real property in Gurnee less than 48 hours before the redemption period expired; in April 2008, defendants purchased real property in Ingleside and paid the delinquent taxes about two weeks before the redemption period expired. At the time of each purchase, plaintiff had held a tax-sale certificate to the property and had petitioned for a tax deed. Defendants' actions were the sole reason that plaintiff did not obtain a tax deed to either property. The public policy of Illinois is to protect the rights of those who purchase real estate that is sold for delinquent taxes, and the legislature has created an indemnity fund to compensate those who lose their interests in real property that is sold for delinquent taxes (see 35 ILCS 200/21-295 et seq. (West 2010)). The fund is supported by tax buyers such as plaintiff and benefits the public and the governmental bodies that receive revenues from the tax-sale process.

¶ 4 Plaintiff's complaint alleged that plaintiff had had valid business relationships with Lake County and with the owners of the Gurnee and Ingleside properties; that plaintiff had had a reasonable expectancy that these relationships could provide plaintiff substantial profits on its investments; that defendants had known of these relationships and expectancies; and that defendants, instead of participating in the tax-sale process, had deprived plaintiff of the tax deeds that it otherwise would have obtained, thus interfering with plaintiff's business relationships and denying plaintiff its prospective economic advantage.

¶ 5 Defendants moved to dismiss the complaint, contending (as pertinent here) that it was legally insufficient because it failed to allege any facts to show that plaintiff had ever had a valid business relationship with either the county or a property owner. The trial court granted the motion but allowed plaintiff to file an amended complaint. Plaintiff filed an amended complaint that realleged the facts in the original complaint but sought recovery for unjust enrichment. The amended complaint did not seek recovery for tortious interference and did not refer to the original complaint. Defendants moved to dismiss the amended complaint for failing to state a cause of action. The trial court granted the motion. Defendants moved for sanctions (see Ill. S. Ct. R. 137 (eff. Feb. 1, 1994)). The trial court denied the motion. Plaintiff appealed.

¶ 6 On appeal, plaintiff argues first that the trial court erred in holding that its original complaint failed to state a claim for tortious interference. Defendants respond in part that plaintiff forfeited its claim by filing an amended complaint that did not replead the claim for tortious interference-and, indeed, did not refer to the original complaint at all. We agree with defendants.

¶ 7 The rule is well settled that "a party who files an amended pleading waives any objection to the trial court's ruling on the former complaints." Boatmen's National Bank of Belleville v. Direct Lines, Inc., 167 Ill. 2d 88, 99 (1995); see also Foxcroft Townhome Owners Ass'n v. Hoffman Rosner Corp., 96 Ill. 2d 150, 153 (1983); Bonhomme v. St. James, 407 Ill. App. 3d 1080, 1083 (2011). To preserve review of the dismissal of the complaint, plaintiff could have stood on the complaint and obtained an order dismissing it with prejudice (see Boatmen's National Bank, 167 Ill. 2d at 99) or incorporated the claim for tortious interference into its amended complaint (see Bonhomme, 407 Ill. App. 3d at 1083). By choosing neither option, plaintiff forfeited any argument on appeal that the trial court erred in dismissing its original complaint.

¶ 8 Plaintiff contends that the forfeiture rule is inapplicable because the case never proceeded to trial and the same facts underlay both the original complaint for tortious interference and the amended complaint for unjust enrichment. However, nothing in the case law restricts the forfeiture rule in this manner. Marek v. O.B. Gyne Specialists II, S.C., 319 Ill. App. 3d 690, 702 (2001), which plaintiff cites, addresses only when an amended complaint relates back to the original complaint so as to avoid the statute of limitations (see 735 ILCS 5/2-616(b) (West 2010)). That is a separate matter entirely.

¶ 9 Zurich Insurance Co. v. Baxter International, Inc., 275 Ill. App. 3d 30 (1995), which plaintiff also cites, is also distinguishable. There, the plaintiff sought a declaratory judgment on whether it had a duty to defend or indemnify the defendant drug company against claims by numerous third parties (injured claimants). The trial court refused to entertain the complaint, explaining that the failure to join the claimants deprived it of jurisdiction. The plaintiff filed a second complaint that realleged the same facts and legal theories but attempted to solve the jurisdictional problem by invoking the doctrine of representation or proceeding as a class action. The trial court also rejected this approach. (Our opinion does not state whether the court formally dismissed either complaint without prejudice.) The plaintiff then filed a third amended complaint that attempted to address the trial court's jurisdictional concerns by joining some of the injured claimants. The defendant moved to stay the action on the ground that the defendant had filed a more comprehensive action against the plaintiff in California (see 735 ILCS 5/2-619(a)(3) (West 1994)). The trial court granted the motion. Zurich, 275 Ill. App. 3d at 33-34.

¶ 10 After various procedural vicissitudes, we entertained an appeal in which the plaintiff argued, in part, that the trial court had erred in its rulings on the jurisdictional issue and on whether a class action was permissible. The defendant argued that the plaintiff had forfeited these issues by failing to reallege them in its amended complaints. We disagreed, holding that forfeiture did not apply under the circumstances. We noted that the issues that the plaintiff sought to raise concerned only procedural matters and that the amended complaints incorporated both the factual allegations and the substantive legal theories of the original complaint. Thus, unlike in Foxcroft, the plaintiff could not have avoided forfeiture simply by phrasing its amended complaints more broadly. Also, unlike in Foxcroft, the amended complaints' omissions did not restrict the substantive points at issue or force the trial court to speculate about which legal theories or claims the plaintiff intended to advance at trial. Id. at 36. That is not the situation here. Plaintiff completely abandoned one substantive theory of recovery and chose a different one, even though it could simply have incorporated the first theory into a two-count amended complaint. Having told the trial court that it would not resuscitate its claim for tortious interference, plaintiff may not do so here. Therefore, we consider the only issue properly before us: whether the trial court erred in dismissing plaintiff's claim for unjust enrichment.

¶ 11 The trial court dismissed the amended complaint for failure to state a claim upon which relief could be granted. See 735 ILCS 5/2-615 (West 2010). Our review is de novo. Sherman v. Township High School District 214, 404 Ill. App. 3d 1101, 1107 (2010). We ask whether the complaint's well-pleaded allegations, construed in the light most favorable to plaintiff, are sufficient to state a cause of action upon which relief may be granted. Vitro v. Mihelcic, 209 Ill. 2d 76, 81 (2004). To state a claim for unjust enrichment, a complaint must allege that the defendant has unjustly retained a benefit to the plaintiff's detriment and that the defendant's retention of the benefit violates the fundamental principles of justice, equity, and good ...

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