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Elling v. Hauck

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

September 10, 2015

JOHN ELLING and IG ASSETS, INC., Plaintiffs,


JOHN W. DARRAH, District Judge.

Plaintiffs, John Elling and IG Assets, Inc., filed suit against Defendants, Bradley Hauck and DeWitt, Ross & Stevens, S.C. ("DeWitt"), on November 8, 2013.[1] In their Complaint, Plaintiffs allege a claim of negligence against Hauck and a claim of respondeat superior against DeWitt. Defendants filed a Motion for Summary Judgment [48] pursuant to Federal Rule of Civil Procedure 56. Defendants' Motion [48] is granted.


Local Rule 56.1(a)(3) requires the moving party to provide "a statement of material facts as to which the party contends there is no genuine issue for trial." Ammons v. Aramark Uniform Servs., 368 F.3d 809, 817 (7th Cir. 2004). Local Rule 56.1(b)(3) requires that "[a]ll material facts set forth in the statement required of the moving party will be deemed to be admitted unless controverted by the statement of the opposing party." Id. Local Rule 56.1(b)(3)(C) permits the nonmovant to submit "any additional facts that require the denial of summary judgment...." To overcome summary judgment, "the nonmoving party must file a response to each numbered paragraph in the moving party's statement." Schrott v. Bristol-Myers Squibb Co., 403 F.3d 940, 944 (7th Cir. 2005). In the case of any disagreement, the nonmoving party must reference affidavits, parts of the record, and other materials that support his stance. Id. A nonmovant's "mere disagreement with the movant's asserted facts is inadequate if made without reference to specific supporting material." Smith v. Lamz, 321 F.3d 680, 683 (7th Cir. 2003). If the nonmovant's response only provides extraneous or argumentative information, the response will fail to constitute a proper denial of the fact, and the fact will be admitted. See Graziano v. Vill. of Oak Park, 401 F.Supp.2d 918, 936 (N.D. Ill. 2005). Legal conclusions or otherwise unsupported statements, including those that rely upon inadmissible hearsay, will be disregarded. See First Commodity Traders, Inc. v. Heinold Commodities, Inc., 766 F.2d 1007, 1011 (7th Cir. 1985); see also Eisenstadt v. Centel Corp., 113 F.3d 738, 742 (7th Cir. 1997).


The following facts are taken from the parties' statements of material facts submitted in accordance with Local Rule 56.1.

Elling is a resident of New Mexico. (Def's Statement of Facts ("SOF") ¶ 1; Pl's Statement of Additional Facts ("SAF") ¶ 1.) Elling was Chairman of the Board of Directors of Integrated Genomics ("Integrated"), a Delaware corporation which is qualified as a foreign corporation to do business in Illinois. (Pl's SAF ¶¶ 2, 5.) Two individuals affiliated with DEWB, a German entity, were also part of Integrated's Board of Directors and loaned funds to Integrated beginning in 2005. (Pl's SAF ¶¶ 3-4.) Jonathan Sheridan was the CEO of Integrated during the relevant times. ( Id. ¶ 2.) DeWitt is a law firm located in Wisconsin. (Def's SOF ¶ 3.) Hauck is an employee of DeWitt and a Wisconsin citizen. (Def's SOF ¶ 2.)

In January 2009, Integrated sought counsel from DeWitt in response to financial difficulties. (Def's SOF ¶ 5; Pl's SAF ¶ 5.) That spring, Integrated's Board of Directors decided to borrow funds from both DEWB and Elling in order to finance their continued operation. (Pl's SAF ¶ 8.) This plan also included obtaining a loan and grant from the State of Wisconsin for Integrated to establish a lab within the state. ( Id. ) In May 2009, Integrated borrowed $100, 000 from Elling in the form of a loan, to be paid with interest, and Elling was provided a security interest in Integrated's assets. (Def's SOF ¶ 7.) Elling and DEWB were concerned with securing their interests as superior to those of the State of Wisconsin, should Integrated receive a loan from the state. (Pl's SAF ¶ 11.)

Sheridan asked Hauck to provide legal services relating to the aforementioned loans. (Def's SOF ¶ 11; Pl's SAF ¶ 12.) Hauck worked on documentation regarding the loan from Elling to Integrated, and prepared and filed the financing statements regarding the security interest given by Integrated to Elling. (Def's SOF ¶ 10.) Hauck's point of contact at Integrated was Sheridan, and all communications between Hauck and Integrated occurred through Sheridan. (Def's SOF ¶ 9; Pl's SAF ¶ 14.) Elling never spoke directly with anyone at Dewitt, including, Hauck, regarding these transactions. (Def's SOF ¶ 23.) Instead, Elling spoke with Sheridan regarding his loan to Integrated, and asked Sheridan to forward any documents regarding this loan to Elling. (Pl's SAF ¶ 15.) Hauck prepared notes for the 2009 loans from both Elling and DEWB to Integrated. ( Id. ¶ 17.) The note included language that would place Elling's security interest on equal footing with a preexisting DEWB loan. (Pl's SAF ¶ 18.)

Throughout the time that loan documents were prepared, Elling communicated with Sheridan, who would then convey the information to or request answers from Hauck. ( Id. ¶ 19.) On at least one occasion, Sheridan forwarded a question from Elling to Hauck via email, and Hauck billed Integrated for answering the question. ( Id. ¶ 23.) As required by the loan conditions, Hauck filed UCC statements in Wisconsin and Illinois to provide notice of Elling's lien on Integrated's assets. ( Id. ¶ 25.)

After these events, Integrated defaulted on Elling's loan. ( Id. ¶ 30.) Elling alleges a claim against the DeWitt Defendants for legal malpractice, and argues that his security interest was never fully perfected, as the UCC financing statements were not filed in Delaware, the place of Integrated's incorporation. (Def's SOF ¶ 31.)


Summary judgment is granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The party seeking summary judgment has the initial burden of establishing that there is no genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party meets this burden, "[t]he nonmoving party must point to specific facts showing that there is a genuine issue for trial." Stephens v. Erickson, 569 F.3d 779, 786 (7th Cir. 2009). A genuine issue of material fact exists where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, 477 U.S. ...

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