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Gtc Financial Services, Ltd. v. Asset Builders Associates, LLC

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

July 22, 2014

GTC FINANCIAL SERVICES, LTD., an Illinois Corporation, and CHARLES T. GRANT, individually Plaintiffs,
ASSET BUILDERS ASSOCIATES, LLC, a California limited liability company, and JAMES R. JURGENSEN, individually, Defendants.


JOHN Z. LEE, District Judge.

Plaintiffs GTC Financial Services, Ltd. ("GTC") and Charles T. Grant ("Grant") sued Defendants Asset Builders Associates, LLC ("Asset") and James. R. Jurgensen ("Jurgensen"), alleging that Defendants had defamed Plaintiffs (Counts I and II) and tortiously interfered with Plaintiffs' expected future business dealings (Count III). Defendants filed a motion to dismiss the Complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief could be granted. For the reasons set forth herein, Defendants' motion is denied with respect to Count I, but granted with respect to Counts II and III.


Asset is a California company that develops construction projects, including residential housing and energy generating facilities. Jurgensen is its managing member and principal. Compl. ¶ 3. For its part, GTC provides financial services as a "financier's agent" for developmental economic projects. Id. ¶ 2. Grant is GTC's President. Id.

In May 2013, Jurgensen reached out to Grant, seeking financing for a residential project in Hawaii. Id. ¶ 10. When this project fell through, Jurgensen sought financing from Grant for a new solar energy generating plant in Southern California. Id. ¶ 11.

On August 22, 2013, the parties signed a Conditional Loan Commitment Letter. Id. ¶ 12 & Ex. A. Under the agreement, GTC agreed to underwrite and fund a loan from a "lending source" in the amount of $32.5 million for the project. The funding was contingent upon a mandatory site visit, construction cost evaluation, renewable energy feasibility study, confirmation of collateral, as well as other activities to be performed and overseen by GTC. Id. In return for its services, Asset agreed to pay GTC a fee of $27, 500.00, $20, 000.00 of which Asset paid when it provided GTC with a copy of its business plan. Id.

That project too failed to get off the ground, and Asset submitted to GTC another proposal to finance the development of another solar energy plant in Arizona. Id. ¶ 13. Asset also paid GTC the outstanding balance of $7, 500.00 as well as a fee of $15, 000.00 to reinstate the agreement. Id.

Prior to inspecting the Arizona site, Grant requested an additional $2, 750.00 to expedite the processing of the loan; Jurgensen agreed. Id. ¶ 14. However, after Grant performed the site visit, Jurgensen refused to pay the fee and requested immediate funding of the $32.5 million loan, even though Asset had not completed its obligations under the agreement. Id. ¶ 15.

On November 29, 2012, Grant declared in a letter to Asset that the Conditional Loan Commitment letter had been breached and refused to proceed with the financing. Id. ¶ 16. Among the reasons cited by Grant were Asset's failures to satisfy a number of the conditions set forth in the agreement. The letter noted that "any binding commitment to the disbursement of loan proceeds [was] subject to the due diligence and exclusive judgment of GTC" and deemed the matter "closed." Id. Ex. B.

On November 22, 2013, Jurgensen emailed Steve Dubois, a third-party broker of large commercial loans, stating that Grant "never had a client who could provide these funds and he never intended to approve the funding in the first place." Id. ¶ 20. Jurgensen also wrote in the email to DuBois that "Mr. Grant never intended to act in good faith or to fund this project." Id. ¶ 21.

Then, on November 28, 2013, Jurgensen emailed Grant copying DuBose and his fellow loan broker Helmuth Casteneda ("Casteneda"). Id. ¶ 31. The email threatened a lawsuit against Grant and GTC for "illegal activities as following: 1) Promissory Estoppel, 2) False Pretense, 3) Fraud, 4) Liability for Tortuous (sic) fraudulent misrepresentation or deceit, 5) Misrepresentation, 6) Extortion, 7) Intimidation, 8) Larceny or Grand Larceny, 9) Extortion, and 10) Negligence." Id. This action followed.

Legal Standard

A motion brought pursuant to Fed.R.Civ.P. 12(b)(6) challenges the sufficiency of the allegations plead in the complaint. Christensen v. Cnty. of Boone, 483 F.3d 454, 457 (7th Cir. 2007). In order to avoid dismissal at this stage, a valid complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). What is more, a complaint must allege "enough facts to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). For a claim to have facial plausibility, a plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. When deciding a motion to dismiss under Rule 12(b)(6), a court must assume all well-pleaded facts ...

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