United States District Court, N.D. Illinois, Eastern Division
W. JAMES MAC NAUGHTON, Plaintiff,
ALDEN MANAGEMENT SERVICES, INC., et al. Defendants.
MEMORANDUM OPINION AND ORDER
ROBERT BLAKEY UNITED STATES DISTRICT JUDGE.
se Plaintiff W. James Mac Naughton (“Mac
Naughton”) alleges, inter alia, that Defendant
Alden Management Services, Inc. (“Alden”)
improperly converted various assets and was unjustly enriched
at Mac Naughton's expense.  at 1-10. Alden has moved to
dismiss Mac Naughton's claims on res judicata
grounds.  at 1-3. For the reasons explained below,
Alden's motion is denied.
2006, non-party Russian Media Group, LLC (“RMG”)
sued non-party SA Satellite & Cable, Inc. (“USA
Satellite”), in a matter captioned Russian Media
Group, LLC v. Cable America, Inc., et al., No.
06-cv-3578 (N.D. Ill.) (the “RMG Action”).  at
5. RMG and USA Satellite settled the RMG Action in April of
2011. Id. Pursuant to that settlement agreement (the
“RMG Settlement Agreement”), USA Satellite gave
RMG “a first priority perfected security
interest” in certain “Collateral” as
“security for the payment” of USA Satellite's
obligations. Id. The RMG Settlement Agreement
defined “Collateral” as “all accounts
receivable and contract rights of USA Satellite, both
existing and future and the proceeds thereof.”
Id. USA Satellite also pledged to give RMG any
revenues it stood to receive from Alden (the “Alden
August 2014, RMG assigned certain rights arising out of the
RMG Settlement Agreement to Casco Bay Holdings, LLC
(“Casco Bay”), including, without limitation,
RMG's right to collect the Alden Collateral. Id.
That same month Casco Bay sent a letter to Alden, demanding
delivery of the Collateral. Id. at 6.
ignored Casco Bay's letter, and “continued to
permit the payment” of the “Collateral to USA
Satellite until in or about December 2014.”
Id. Casco Bay later assigned its rights under the
RMG Settlement Agreement to Mac Naughton in July of 2016.
Id. at 5.
res judicata argument turns on two other cases in
this judicial district: Casco Bay Holdings, LLC v. USA
Satellite & Cable, Inc., et al., No. 14-cv-10134
(Darrah, J.) (“Case I”) and USA Satellite
& Cable, Inc. v. W. James McNaughton and Casco Bay
Holdings, LLC, No. 15-cv-6331 (St. Eve, J.) (“Case
was initiated by Casco Bay, which brought claims against
Alden, USA Satellite, Shai Harmelech (principal of USA
Satellite) and the law firm of Leydig, Voit & Mayer, Ltd.
(counsel to USA Satellite). See Case I, Dkt. 1. Case
I was voluntarily dismissed by Casco Bay in September of
2015. See Case I, Dkt. 98.
II, meanwhile, was brought by USA Satellite against Casco Bay
and Mac Naughton in the Circuit Court of Cook County.
See Case II, Dkt. 1. Casco Bay removed Case II to
this judicial district, id., and subsequently filed
cross-claims and third party claims against multiple parties,
including Alden. See Case II, Dkt. 37 at *23-25.
Alden moved to dismiss, arguing that jurisdiction was
“improper” under Federal Rule of Civil Procedure
12. See Case II, Dkt. 103. Judge Amy J. St. Eve
granted Alden's motion and dismissed the claims against
it in June of 2016. See Case II, Dkt. 133. Judge St.
Eve specifically found that there were “no claims in
[Case II] that Alden is secondarily or derivatively liable as
required under Rule 14(a), ” and the third-party claims
against Alden were dismissed “without prejudice”
in light of this same procedural defect. See Id. at
preliminary matter, the Court notes that res
judicata “is [usually] not one of the affirmative
defenses that Rule 12(b) permits . . .; rather, res
judicata is an affirmative defense which should be
raised in a motion for judgment on the pleadings under Rule
12(c).” U.S. Bank, Nat'l Ass'n v. JKM
Mundelein LLC, No. 14-cv-10048, 2015 WL 2259474, at *2
(N.D. Ill. May 12, 2015). That said, depending upon the
allegations raised and the content of the public records
subject to judicial notice, “res judicata may
provide grounds for dismissal under Rule 12(b)(6) for failure
to state a claim upon which relief can be granted.”
Id.; see also Clark & Leland Condo., LLC v.
Northside Cmty. Bank, 110 F.Supp.3d 866, 868-69 (N.D.
Ill. 2015), on reconsideration in part sub nom. 2016
WL 302102 (N.D. Ill. Jan. 25, 2016) (“res
judicata is an affirmative defense [however] the
doctrine of res judicata may properly be raised as a
basis to dismiss a complaint pursuant to Rule
Rule 12(b)(6), then, the Court must determine whether the
Complaint states “a claim to relief that is plausible
on its face.” Yeftich v. Navistar, Inc., 722
F.3d 911, 915 (7th Cir. 2013). 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.”
Id. This Court must construe the Complaint in the
light most favorable to Plaintiff, accept as true all
well-pleaded facts, and draw all reasonable inferences in its
favor. Id.; Long v. Shorebank Dev. Corp.,
182 F.3d 548, 554 (7th Cir. 1999). Statements of law,
however, need not be accepted as true. Yeftich, 722
F.3d at 915. Rule 12(b)(6) limits this Court's
consideration to “allegations set forth in the
complaint itself, documents that are attached to the
complaint, documents ...