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Bank of America, N.A. v. Oberman, Tivoli & Pickert, Inc.

United States District Court, N.D. Illinois, Eastern Division

January 22, 2014

BANK OF AMERICA, N.A., Plaintiff,
v.
OBERMAN, TIVOLI & PICKERT, INC., Defendant

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For Bank of America, N.A., Plaintiff: Randall Marc Lending, LEAD ATTORNEY, Rebecca Lynn Dandy, Timothy Matthew Schank, Vedder Price P.C., Chicago, IL.

For Oberman, Tivoli & Pickert, Inc., Defendant: Andre Ordeanu, Zane D. Smith & Associates, Ltd., Chicago, IL.

OPINION

Page 1096

MEMORANDUM OPINION AND ORDER

Rubén Castillo, Chief Judge United States District Court.

Plaintiff Bank of America, N.A. (" BOA" ) brings this action for breach of contract against Defendant Oberman, Tivoli & Pickert, Inc. (" OTP" ). Presently before the Court is OTP's motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons stated below, this motion is denied.

RELEVANT FACTS

BOA is a national banking association organized in Delaware with its principal place of business in Charlotte, North Carolina. (R. 1, Compl. ¶ 1.) OTP is a California corporation with its principal place of business in Los Angeles, California. ( Id. ¶ 4.) On or around May 6, 2003, Merrill Lynch Business Financial Services, Inc. (" MLBFS" ) and OTP entered into a WCMA [1] Loan and Security Agreement (the " Loan Agreement" ). ( Id. ¶ 5.) As relevant here, Section 3.7(d) of the Loan Agreement states:

Customer shall pay or reimburse MLBFS for . . . (iii) all fees and out-of-pocket expenses (including attorneys' fees and legal expenses) incurred by MLBFS in connection with the preparation, execution, administration, collection, enforcement, protection, waiver or amendment of this Loan Agreement, the other Loan Documents and such other instruments or documents, and the rights and remedies of MLBFS thereunder and all other matters in connection therewith.

(R. 1-1, Ex. A, Loan Agreement at 11, § 3.7(d).) " Customer" is defined as OTP's predecessor, Oberman, Tivoli, Miller & Pickert, Inc. (R. 1-1, Ex. A, Loan Agreement at 1.) Following the October 1, 2010 merger between BOA and Merrill Lynch Commercial Finance Corp., BOA became the successor in interest to all of MLBFS's rights and remedies under the Loan Agreement. (R. 1, Compl. ¶ ¶ 2, 6.) The line of credit in the Loan Agreement was renewed after the first year and subsequently renewed again, with the new maturity date set to June 30, 2006. ( Id. ¶ ¶ 11-12.) In June 2006, BOA decided not to renew the line of credit pursuant to a provision in the Loan Agreement giving BOA sole discretion to renew. ( Id. ¶ 13-14.)

On or around December 31, 2007, OTP filed a complaint in California state court against BOA and Merrill Lynch Pierce Fenner & Smith, Inc. (" Merrill Lynch" ) asserting claims arising out of the Loan Agreement. ( Id. ¶ 15.) BOA moved to dismiss the case based on the forum selection clause in the Loan Agreement; the California court granted the motion on March 2, 2009. ( Id. ¶ ¶ 16-17.) Around August 15, 2009, OTP filed a substantially identical suit against BOA and Merrill Lynch in the Circuit Court of Cook County, Illinois asserting breach of contract, fraud, and breach of fiduciary duty. ( Id.

Page 1097

¶ 18.) BOA and Merrill Lynch moved to dismiss the complaint pursuant to 735 Ill. Comp. Stat. 5/2-619.1.[2] ( Id. ¶ 19.) On January 27, 2010, the Illinois court granted the motion and dismissed the complaint in its entirety, granting OTP leave to file an amended complaint. ( Id. ) On April 23, 2010, OTP filed a nearly identical amended complaint, and BOA and Merrill Lynch filed a motion to dismiss the complaint for failure to state a claim pursuant to 735 Ill Comp. Stat. 5/2-615. ( Id. ¶ ¶ 20-21.) The court again dismissed the complaint in its entirety, dismissing all but the fraud claims with prejudice. ( Id. ¶ 22.) On October 4, 2010, OTP filed a second amended complaint, reasserting its fraud claims in addition to its breach of fiduciary duty claims and breach of contract claims that had previously been dismissed with prejudice. ( Id. ¶ ¶ 23-25.) The Illinois court yet again granted BOA's and Merrill Lynch's motion to dismiss the complaint, emphasizing that OTP's breach of fiduciary duty and breach of contract claims had previously been dismissed with prejudice, and granted OTP another chance to adequately allege its fraud claims. ( Id. ...


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