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Dvorak v. Granite Creek GP Flexcap I, L.L.C.

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

March 26, 2018

Peter T. Dvorak, Plaintiff,
v.
Granite Creek GP Flexcap I, LLC; Mark A. Radzik; and Peter Lehman, Defendants.

          MEMORANDUM OPINION AND ORDER

          Honorable Thomas M. Durkin, United States District Judge.

         Peter Dvorak alleges that Defendants improperly sold and declared to be forfeited Dvorak's partnership interest in Granite Creek Flexcap I LP (the “Partnership”). Previously, the Court dismissed five of the six counts in the complaint as barred by the Illinois “one refiling rule, ” 735 ILCS 5/13-217. See R. 29 (Dvorak v. Granite Creek, 2017 WL 714159 (N.D. Ill. Feb. 23, 2017)). The remaining Count V alleges negligence against Mark Radzik, the managing partner of the LLC that is the general partner of the Partnership. Radzik moves to dismiss Count V as untimely. R. 31. For the following reasons, that motion is granted.

         Background

         Dvorak became a limited partner in the Partnership on August 25, 2005. R. 11 ¶ 11. Pursuant to the Partnership agreement, he contributed $1.05 million of capital beginning in about June 2006 and continuing through September 2007. Id. ¶ 12. At the same time, on June 29, 2006, Dvorak borrowed $558, 041.10 from Radzik, memorialized by two promissory notes. Id. ¶¶ 70-71.

         About two years later, on July 29, 2008, Radzik sent Dvorak a letter notifying him of an additional capital contribution requirement by the Partnership of $750, 000 that was due by August 19, 2008. Id. ¶ 74. About a week after that on August 8, 2008, Dvorak executed promissory note, amending and consolidating the promissory notes from 2006, promising to pay Radzik personally $750, 000 three days later on August 11, 2018. Id. ¶¶ 72-73.

         Radzik also advised Dvorak that if he could only pay one of these two $750, 000 obligations, he should pay on the note to Radzik rather than the contribution required by the Partnership. Id. ¶ 78. Dvorak alleges that this advice was “negligent” because it “served the best interest of Radzik, individually, and failed to serve the best interest of Mr. Dvorak, as a limited partner of [the Partnership].” Id. ¶ 80. Dvorak alleges further that Radzik's advice violated his “duty to act in good faith and in the best interest of Mr. Dvorak.” Id. ¶ 76.

         Dvorak's failure to pay the contribution to the Partnership caused him to be in default under the Partnership agreement. Count V also alleges that Dvorak's default led Radzik (as Managing Partner of the Partnership) to take the following “wrongful” actions:

• offering Dvorak's shares for sale to other limited partners on December 19, 2008;
• distributing and re-allocating funds from Dvorak's capital account to other limited partners on or about February 24, 2009; August 19, 2010; and October 23, 2011;
• declaring forfeited Dvorak's partnership interest, including his capital account on May 20, 2015; and
• thereafter removing Dvorak as a limited partner.

Id. ¶¶ 82-83.

         Dvorak filed this complaint on October 24, 2016, see R. 1, with the following counts: Count I for breach of contract against the LLC (that is the General Partner of the Partnership) and Radzik; Count II for breach of fiduciary duty against the LLC; Count III for a declaratory judgment that any obligations Dvorak had to the Partnership were discharged in bankruptcy; Count IV for a declaratory judgment that Dvorak's partnership interest has not been diminished or forfeited; Count V for negligence against Radzik; and Count VI for negligent misrepresentation against the LLC and Peter Lehman (another member of the LLC). See R. 11. The Court dismissed Counts I, II, III, IV, and VI as precluded by the Illinois “one filing rule.” See R. 29 (Dvorak, 2017 WL 714159). In other words, because Dvorak had twice previously filed and voluntarily dismissed those claims, he is now barred from pursuing them in a third complaint. Specifically, the Court held that the “one filing rule” worked to bar Dvorak's claims for breaches of contractual and fiduciary duties related to Dvorak's relationship with the Partnership. See R. 29 at 12-14 (Dvorak, 2017 WL 714159, at *5-6). The Court also held, however, that to the extent Dvorak's negligence claim against Radzik (Count V) alleged ...


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