United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
SHARON JOHNSON COLEMAN, District Judge.
Plaintiff Superkite PTY Limited ("Superkite") brought this action to collect a $900, 000 debt allegedly owed by defendant Ross Glickman ("Glickman"). Glickman filed counterclaims against Superkite and numerous corporations and individuals associated with Superkite alleging that they devised a scheme to defraud him of large amounts of money associated with the parties' attempts to form a joint venture. Counter defendant Superkite and the third-party defendants John Stammers, Ronald Husner a/k/a Ronald Frank Bleyer ("Husner"), Robert Masud, Christopher Dieterick, Andrew Bacik, Hayman Private Equity, LLC ("HPE"), and Hayman Private Equity Australia PTY ("HPE Australia") (collectively "the third-party defendants") move to dismiss Glickman's counterclaims for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6), failure to plead with the requisite particularity pursuant to Fed.R.Civ.P. 9(b), and for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2). For the following reasons, all claims against third-party defendant Masud are dismissed with prejudice. All claims against third-party defendant Husner are dismissed without prejudice. All remaining motions to dismiss are denied.
Superkite is an Australian company involved in private equity capital funding. Third-party defendant Stammers is an attorney and current director of Superkite. Defendant and counter plaintiff Glickman is an Illinois resident and Chief Executive Officer and Chairman of Urban Retail Properties, LLC ("Urban Retail"). Urban Retail is a property management company that oversees the management of regional malls, strip centers, and big box centers across the United States. Third-party defendant HPE is a limited liability company organized under the laws of Delaware with its principal place of business in Massachusetts. HPE consists of five members: Bacik as President, Dieterich as Secretary, Napoli, Becon International, Inc., and Hayman Corporation. HPE Australia is an Australian proprietary limited liability company with its principal place of business in Sydney. The sole member of HPE Australia is Hayman Corporation, which is a Delaware corporation owned by Hayman Management, LLC. Husner is the Chairman of the HPE Finance Committee and is purported to be the ultimate decision maker for all HPE and HPE Australia related business. Masud served as outside counsel to HPE.
On March 21, 2011, Superkite lent Glickman $900, 000.00 and the parties entered into a Note Agreement detailing the terms of the loan. On February 19, 2013, Superkite filed this instant action to collect on the debt allegedly owed by Glickman. In his answer to Superkite's complaint, Glickman filed several counterclaims alleging that Superkite is nothing more than a sham entity and alter ego of the third-party defendants. In his counterclaims, Glickman does not deny entering into the loan agreement with Superkite, but argues that the loan was "fictitious" and that the parties never intended that Glickman would actually have to repay the loan. Glickman details an alleged scheme whereby Superkite and the third-party defendants attempted to use the loan to defraud him during the parties' attempts to form a joint venture.
Specifically, Glickman alleges that in 2009 he was first approached by Napoli, an experienced real estate executive and officer of HPE, concerning the potential of forming a joint venture between Glickman's company, Urban Retail, and the Hayman Group, which included HPE and HPE Australia. Glickman alleges that Napoli represented to him that Husner would be able to secure hundreds of millions of dollars to invest in retail property. Glickman claims that Napoli proposed that HPE and HPE Australia work together with Urban Retail to form a successful joint venture utilizing Urban Retail's management expertise and reputation in the United States with HPE's financial backing.
Glickman had previously formed a successful joint venture called UrbanCal with the California State Teachers' Retirement System ("CalSTRS"). Because of his involvement with UrbanCal, Glickman was aware that CalSTRS was interested in selling UrbanCal properties at lower prices than their initial acquisition price. According to Glickman, the new joint venture with HPE would identify and acquire distressed properties, such as the UrbanCal properties, that could provide substantial returns with added development and professional management. Indeed, the purchasing of the UrbanCal properties was eventually included in the joint venture agreement between Urban Retail and HPE as a pre-approved transaction.
Glickman maintains that throughout 2009, he engaged in discussions and negotiations with Napoli, Bacik (an HPE member), and Dieterich (an HPE member and officer) concerning the potential joint venture. On October 28, 2009, Glickman and Bacik executed a letter of intent, summarizing the parties' intent and anticipated responsibilities concerning the joint venture. In November 2009, Glickman, his attorney Joel Cooper, and two Executive Vice-Presidents for Urban Retail traveled to Zurich, Switzerland to meet with Husner, Bacik, Napoli, and HPE's outside counsel, Masud, concerning the joint venture. On January 22, 2010, the joint venture agreement was eventually finalized and executed by Glickman and Bacik. The joint venture agreement was later amended on June 17, 2010, lowering HPE's funding commitment from $500 million to $400 million, among other changes. Glickman alleges that he formed Urban Hayman Management, LLC, to execute and participate in the joint venture per the parties' agreement. Glickman also alleges that throughout the parties' interactions, the third-party defendants repeatedly assured him and represented that HPE was capable and able to meet its financial funding obligations.
Glickman claims that at a joint venture board meeting held in Chicago and attended by Napoli and Bacik, the directors agreed to the continuation of the joint venture business plan. Glickman also contends that the parties agreed to the acquisition of UrbanCal properties as pre-approved transactions provided for in the amended joint venture agreement. The joint venture was required to make a $1.8 million deposit to CalSTRS in order to secure the UrbanCal property acquisition. The deposit was to be paid in two installments of $900, 000. Glickman alleges that on February 1, 2011, HPE or an affiliated company, funded $900, 000 to the parties' joint venture to be used to pay the first deposit for the UrbanCal property acquisition. Glickman alleges that he had to negotiate several extensions with CalSTRS for the second deposit payment. Glickman contends that because HPE continued to experience delays in securing its funding obligations, the joint venture was unable to pay the second deposit of $900, 000 required for the CalSTRS transaction to be completed.
According to Glickman, Superkite is a sham corporation formed by the third-party defendants in an effort to get out of their contractual financial obligations under the joint venture agreement. Glickman claims that Husner called him and made false representations that HPE had more than sufficient funds to honor its contractual obligations to fund the joint venture. Glickman also contends that Husner stated that the funds would not be immediately available due to banking issues. Glickman alleges that Husner advised him that he could make the necessary CalSTRS second deposit by taking out a "fake loan" with a fictitious interest rate from Superkite. Glickman contends that Husner told him that he would never have to repay the $900, 000 loan because the joint venture would be fully funded by HPE's $400 million before the "fake loan" matured, and that Glickman could then use the joint venture funds to repay the $900, 000 to Superkite. Glickman claims that the $900, 000 loan was actually funds provided by HPE Australia and that Superkite never existed as a separate corporation apart from the third-party defendants. Eventually, HPE never met its funding obligations and the joint venture as well as the CalSTRS transaction failed. Superkite then brought this instant action to collect the $900, 000 "loan" from Glickman.
Superkite and the third-party defendants move to dismiss Glickman's counterclaims for various reasons including: failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6); failure to plead with the requisite particularity required pursuant to Fed.R.Civ.P. 9(b); and for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2).
A motion to dismiss under Rule 12(b)(6) challenges a complaint for failure to state a claim upon which relief may be granted. Fed.R.Civ.P. 12(b)(6); General Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997). In ruling on a Rule 12(b)(6) motion, the court accepts as true all well-pleaded facts in the plaintiff's complaint and draws all reasonable inferences from those facts in the plaintiff's favor. Dixon v. Page, 291 F.3d 485, 486 (7th Cir. 2002). In order to survive a Rule 12(b)(6) motion, the complaint must provide the defendant with fair notice of the claim's basis, and also state facts which establish that the requested relief is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009).
Under Federal Rule of Civil Procedure 8(a)(2), ordinarily a complaint need only include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Claims alleging fraud, however, must also satisfy the heightened pleading requirement of Federal Rule of Civil Procedure Rule 9(b), which requires that a party "state with particularity the circumstances constituting fraud or mistake." Fed.R.Civ.P. 9(b). Fraud claims "must describe the who, what, when, where, and how of the fraud." Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436, 441-42 (7th Cir. 2011).
Under Fed.R.Civ.P. 12(b)(2), the plaintiff bears the burden of establishing personal jurisdiction, but need only make a prima facie showing of jurisdictional facts. Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). The exercise of personal jurisdiction requires "sufficient contacts or ties with the state of the forum to make [bringing suit] reasonable and just, according to our traditional conception of fair play and substantial justice" such that the defendant is not unduly ...