United States District Court, N.D. Illinois, Eastern Division
DENVER R. GRAYSON and DENVER, INC., Plaintiffs,
DANIEL SHANAHAN, MICHAEL J. KORST, P.C., and MICHAEL J. KORST, Defendants.
MEMORANDUM OPINION AND ORDER
Z. Lee United States District Judge
case arises out of a dispute between two business partners
regarding the distribution of proceeds from the sale of a
Domino's Pizza franchise. Plaintiff Denver Grayson, the
sole shareholder of Plaintiff Denver, Inc., has filed a
two-count complaint against his former partner, Defendant
Daniel Shanahan, as well as the attorney who represented both
partners in the sale and his professional corporation,
Defendants Michael Korst and Michael J. Korst, P.C.
(collectively, “Korst”). In Count I, Plaintiffs
allege legal malpractice and breach of fiduciary duty against
Korst. In Count II, Plaintiffs claim unjust enrichment
against Shanahan. Shanahan filed a motion to dismiss Count II
of Plaintiffs' complaint  pursuant to Federal Rule of
Civil Procedure 12(b)(6) for failure to state a claim. For
the reasons given below, the Court grants Shanahan's
Denver Grayson is a Wisconsin citizen and the sole officer
and shareholder of Plaintiff Denver, Inc., a Wisconsin
corporation (“Denver”). Compl. ¶¶ 3-4,
ECF No. 1. Defendant Daniel Shanahan is an Illinois
citizen. Id. ¶ 5. He conducted business as
D.D.S. Pizza Enterprises, Inc. (“DDS”), a
dissolved Illinois corporation. Id.; Def.'s Mem.
Supp. Mot. Dismiss, Ex. 2, at 8, ECF No. 20.
October of 2006, Grayson, through Denver, and Shanahan,
through DDS, formed DJ's Pizza, LLC, for the purpose of
operating a franchised Domino's Pizza restaurant in
Milwaukee, Wisconsin. Compl. ¶ 7; Compl., Ex. A,
Operating Agreement of DJ's Pizza Art. 2, Sec. 1. Denver
and DDS were the sole owners of DJ's Pizza. Compl. ¶
November 2014, Grayson and Shanahan, through their respective
entities, sold substantially all of the restaurant's
assets to a third party. Id. ¶¶ 8, 10.
Defendant Michael Korst, a licensed Illinois attorney,
represented Grayson and Shanahan in the sale of DJ's
Pizza. Id. ¶¶ 6, 10. Under the negotiated
Sale of Assets Agreement, authorized by Grayson and signed by
both Grayson and Shanahan, the buyer agreed to distribute
$340, 550 of the purchase price to DDS. Def.'s Mem., Ex.
1, Sale of Assets Agreement § III(A)(1); see
also Compl., Ex. B, Seller's Closing Statement.
Grayson and Denver received no proceeds from the sale. Compl.
now bring this lawsuit against Shanahan and Korst. With
respect to Shanahan, they allege in Count II of their
complaint that Shanahan was unjustly enriched at closing in
the amount of $304, 203, because those funds should have been
given to Grayson and Denver under the terms of the Operating
Agreement. Id. ¶¶ 17-18.
Korst, Plaintiffs assert that Korst breached his fiduciary
duty to them by failing to explain that they were entitled to
receive certain funds as a result of the sale under the
operating agreement of DJ's Pizza. See Id.
¶ 11; Pls.' Mem. Opp'n Mot. Dismiss, Ex. F, Aff.
of Denver Grayson ¶ 4, ECF No. 25. Plaintiffs claim
that, because of Korst's alleged dereliction, they
entered into the sale agreement believing that all of the
sale proceeds belonged to Shanahan. Id. As a result,
Plaintiffs seek a judgment against Korst for $304, 203.
Shanahan has moved to dismiss Plaintiffs' unjust
enrichment claim pursuant to Federal Rule of Civil Procedure
12(b)(6) for failure to state a claim. Def.'s Mem. 1.
Specifically, Shanahan argues that Plaintiffs cannot assert
an unjust enrichment claim under either Illinois or Wisconsin
law because they entered into an express contract regarding
the allocation of the proceeds from the sale of DJ's
Pizza. Id. at 5.
survive a motion to dismiss pursuant to Rule 12(b)(6), a
complaint must “state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). “A claim has
facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The
Court must accept “all well-pleaded factual allegations
as true and view them in the light most favorable to the
plaintiff.” Lavalais v. Vill. of Melrose Park,
734 F.3d 629, 632 (7th Cir. 2013) (citing Luevano v.
Wal-Mart Stores, Inc., 722 F.3d 1014, 1027 (7th Cir.
2013)). Mere legal conclusions, however, “are
insufficient to survive a Rule 12(b)(6) motion.”
McReynolds v. Merrill Lynch & Co., Inc., 694
F.3d 873, 885 (7th Cir. 2012) (citing Iqbal, 556
U.S. at 678). In addition to the complaint itself, on a
motion to dismiss the Court may consider “documents
attached to the complaint, documents that are critical to the
complaint and referred to in it, and information that is
subject to proper judicial notice.” Geinosky v.
City of Chi., 675 F.3d 743, 745 n.1 (7th Cir. 2012).
Plaintiffs' Unjust Enrichment Claim Against Shanahan Is
Barred by the Existence of an Express
Count II, Plaintiffs allege an unjust enrichment claim
against Shanahan for taking and retaining the distribution he
received from the sale of DJ's Pizza. Compl. ¶¶
17-20. Shanahan argues that Count II should be dismissed
under both Illinois and Wisconsin law, because Plaintiffs
cannot assert the existence of an express ...