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Isringhausen Imports, Inc. v. Union Pacific Railroad Co.

United States District Court, C.D. Illinois, Springfield Division

September 20, 2016

ISRINGHAUSEN IMPORTS, INC., Plaintiff,
v.
UNION PACIFIC RAILROAD CO., Defendant.

          OPINION

          SUE E. MYERSCOUGH, UNITED STATES DISTRICT JUDGE.

         This cause is before the Court on the Motion to Dismiss or for More Definite Statement (d/e 4) filed by Defendant Union Pacific Railroad Company. The Motion is GRANTED IN PART and DENIED IN PART. Plaintiff has sufficiently pleaded a claim for mutual mistake. Plaintiff's fraud claim is DISMISSED without prejudice and with leave to replead.

         I. BACKGROUND

         In April 2016, Plaintiff Isringhausen Imports, Inc. filed a Complaint in the Circuit Court of the Seventh Judicial Circuit, Sangamon County, Illinois. Defendant was served with the Complaint on May 9, 2016. On June 8, 2016, Defendant timely filed a Notice of Removal (d/e 1). Plaintiff did not object to removal. See Pl.'s Consent to Removal (d/e 6).

         The following facts come from Plaintiff's Complaint and are accepted as true at the motion to dismiss stage. Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008).

         Plaintiff operates a business at 229 East Jefferson, Springfield, Illinois. Defendant operates a railroad along Third Street in Springfield.

         On March 11, 2004, the parties entered into a lease of a 7, 500 square foot parcel of Third Street between Washington and Jefferson Streets, adjacent to Plaintiff's facility. Compl. ¶ 3. The purpose of the lease was to allow Plaintiff to park vehicles on the parcel and use the parcel for ingress and egress to Plaintiff's facility.

         When the lease was entered, Defendant asserted it owned the parcel or otherwise had the exclusive right to possession of the parcel. Consequently, Defendant required Plaintiff to pay rent to use the parcel. The initial rent under the lease was $750 per month. Between March 11, 2004 and September 30, 2015, Plaintiff paid rent to the Defendant in increasing monthly amounts, totaling $123, 116 in rent during that time.

         On September 15, 2015, Defendant sent Plaintiff a proposed new lease agreement for $1, 385 per month. In October 2015, Plaintiff learned that Defendant did not own or otherwise have the exclusive right to possession of the parcel and had no right to charge Plaintiff rent. Specifically, Plaintiff investigated the original 1851 City of Springfield grant of right of way to the railroad and learned that the right of way excluded a strip of land 10 feet wide on each side of Third Street. In addition, subsequent ordinances first passed in 1865 provided that all railroads making use of the streets in the City of Springfield were required to leave open and unobstructed for public access those parts of the street on either side of the railroad tracks. Plaintiff contacted Defendant with this information, but Defendant has been unwilling to reimburse Plaintiff for the rent previously paid.

         Plaintiff asserts that the lease is voidable because of the parties' mutual mistake that Defendant owned or otherwise had the right to exclusive possession of the parcel and was entitled to rent for Plaintiff's use of the parcel. Alternatively, Plaintiff alleges that, if Defendant was not mistaken, the lease is voidable because Defendant fraudulently induced Plaintiff to pay rent. Plaintiff alleges that Defendant falsely represented it owned or otherwise had the right to exclusive possession of the parcel and was entitled to rent for Plaintiff's use of the parcel, knew such representation was false, that such representation was intended to induce and did induce Plaintiff to pay rent, and that Plaintiff was damaged by paying rent to Defendant that Defendant was not entitled to receive. Compl. ¶ 12. Plaintiff seeks judgment against Defendant in the amount of $123, 116 plus interest.

         On June 8, 2016, Defendant filed its Motion to Dismiss or for More Definite Statement.

         II. JURISDICTION

         This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a). Specifically, complete diversity exists between the parties. Plaintiff is an Illinois corporation with its principal place of business in Springfield, Illinois. Compl. ¶ 1. Defendant is incorporated under the laws of the State of Delaware and has its principal place of business in Omaha, Nebraska. Notice of Removal ¶ 2(b). In addition, the amount in controversy exceeds $75, 000 exclusive of interest and costs. In the Complaint, Plaintiff seeks the amount of rent payments at issue, which totals $123, 116. Compl. ¶ 7, Prayer for Relief.

         Venue is proper in this district because a substantial part of the events or omissions giving rise to the claim occurred in this judicial district or a substantial part of the property that is the subject of the action is situated in this district. 28 U.S.C. § 1391(b)(2). Moreover, removal to this Court was proper because it is “the district and ...


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