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Sirazi v. General Mediterranean Holding, SA

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

April 1, 2015

SEMIR D. SIRAZI, GREENSTONE CAPITAL, L.L.C., and MARDINI, INC., Plaintiffs,
v.
GENERAL MEDITERRANEAN HOLDING, SA, ORIFARM, SA, and NADHMI AUCHI, Defendants.

OPINION AND ORDER

WILLIAM T. HART, District Judge.

This case is before the Court for construction of a Settlement Agreement ("the Agreement") which is central to claims of intentional interference with contractual relations (Count I), aiding and abetting fraud (Count II), civil conspiracy (Count III), and unjust enrichment (Count V) asserted by plaintiffs Semir Sirazi, Greenstone Capital, L.L.C., and Mardini, Inc. against defendants General Mediterranean Holding, SA ("GMH"), Orifarm, SA ("Orifarm"), and Nadhmi Auchi. The parties have presented their differing interpretations of the Settlement Agreement including defendants' claim of invalidity.

Defendants' motion for summary judgment was denied and motions in limine have been considered. See Sirazi v. Gen. Mediterranean Holding, SA, 2015 WL 791159 (N.D. Ill. Feb. 24, 2015); Order dated March 5, 2015 [ECF 381]. In order to provide guidance for the presentation of evidence and for the preparation of jury instructions, it is necessary to resolve the parties' differing interpretations of certain terms of the Agreement that relate to the remaining claims.

Construction of a written contract is ordinarily a question of law for the court. When the terms of a contract are not ambiguous, the meaning of the contract is determined from the face of the document, without considering parole evidence or extrinsic aids. Cannon v. Burge, 752 F.3d 1079, 1088-89 (7th Cir. 2014). If ambiguity is found to exist in a contract, and it is necessary to resort to disputed parole evidence, the question of interpretation is for the jury based on its resolution of any disputed evidence. Harmon v. Gordon, 712 F.3d 1044, 1050 (7th Cir. 2013). However, if the pertinent extrinsic evidence is undisputed, construction of the contract is still a matter of law for the court. Id.

The Agreement was entered into by sophisticated parties who were engaged in a series of real estate and business transactions. The terms were negotiated by attorneys. A provision states that "all prior statements, agreements or representations of the parties, whether oral or written, are deemed to be merged herein."

The Settlement Agreement was entered into as of May 5, 2006 by Rezmar Corporation ("Rezmar") and Antoin S. Rezko ("Rezko"), described as the sole shareholder of Rezmar and as guarantor, referred to in the Agreement as "Borrowers." The other parties are Semir D. Sirazi, ("Sirazi"), described as collateral provider, Greenstone Capital, L.L.C. ("Greenstone"), and Mardini, Inc. ("Mardini"), referred to collectively as "Creditors." The terms of the Agreement, and a separate guaranty by Rezko made part of the Agreement, establish that Rezko is individually bound and responsible for performance of the terms of the Agreement.

The purpose for the Agreement is stated. It is recited that the Borrowers and Daniel Mahru are in default under a line of credit agreement. Also, it is stated that a $5, 000, 000 bank loan to the Borrowers from Republic Bank, for which Sirazi provided a guaranty and collateral, is due on May 17, 2006. Further, it is recited that the Borrowers and an affiliate of Rezmar are in default under a contract with Greenstone and in default under a contract with Mardini. To avoid litigation, the parties bind themselves by the Agreement.

The Agreement commits the Borrowers to pay the Republic Bank loan or pay Mutual Bank if the loan is assigned to that Bank, and to pay Sirazi all amounts paid by him in connection with his guaranty of any loan by Mutual Bank. In consideration of continuing to guaranty the Mutual Bank loan, Sirazi will be paid up to $100, 000 depending on when the loan is paid. Full payment is to be made by no later than July 17, 2006.

Next, it is agreed that the Borrowers pay to the Creditors $7, 700, 000 in respect of the other defaults specified in the Agreement. This sum is referred to as the Agreed Debt.

It is represented and warranted in the Agreement that Rezko is the owner of eighty percent of the Ownership Interests in Heritage Development Partners LLC, an Illinois limited liability company ("Heritage"). The term Ownership Interests is further defined to include all direct or indirect ownership interests in Heritage.

In support of their undertakings to pay the Agreed Debt, the Borrowers grant a "security interest" to Sirazi and the Creditors of all right and interest to all Distributions from Rezko's Ownership Interests in Heritage, defined in the Agreement as the Secured Collateral. The effect of granting a security interest was to make the Creditors (plaintiffs) secured creditors of the Borrowers with priority rights to receive Distributions from the Secured Collateral.

Also in support of their obligation to pay the Agreed Debt, the Borrowers provided an Agreed Debt Note in the sum of $3, 000, 000.

The definition of the term "Distributions" in the Agreement includes the proceeds from any direct or indirect sale by Rezko of any part of his membership interests in Heritage. (It is undisputed that, at the date of the Agreement, the Heritage interests were owned by MT Property Holding, LLC ("MT") in which Rezko was an 80% owner of Class B voting membership interests and Michael Rumman was owner of 20% of the Class B voting membership interests.)

The Agreement describes an intended offering for sale of additional interests in Heritage to obtain funds for the payment of the sums due the Creditors. Except for that offering (which never occurred), and until all sums are paid, Rezko promised not to sell any Ownership Interests in Heritage without the consent of Sirazi nor to modify Heritage company documents without prior notice to Sirazi. These are separate obligations that ...


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