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Calzaretta v. Rezny

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

April 23, 2018

DAVID CALZARETTA and AABO, LLC, Plaintiffs/ Counter-Defendants,
v.
NICHOLAS E. REZNY; ACRDGROUP, LLC; ACRD2, LLC; ACRD4, LLC; ACRD5, LLC, Defendants

          MEMORANDUM OPINION AND ORDER

          HON. MARIA VALDEZ, UNITED STATES MAGISTRATE JUDGE.

         This matter is before the Court on Counter-Defendants' Motion to Dismiss the Counter-Complaint [Doc. No. 39]. For the reasons that follow, the motion is granted.

         BACKGROUND[1]

         Plaintiff David Calzaretta filed a complaint alleging various federal and state claims related to Defendant Nicholas E. Rezny's alleged failure to return $50, 000 Plaintiff had given him to invest in real estate. The primary claims in the case are described more fully in Calzaretta v. Rezny, No. 17 C 2408, 2017 WL 6039965 (N.D. Ill.Dec. 6, 2017).

         On October 1, 2017, Defendant filed a two-count counterclaim on behalf of himself and intervenor/Counter-Plaintiffs ACRDGroup, LLC; ACRD2, LLC; ACRD4, LLC; and ACRD5, LLC (collectively, the “ACRD Parties”) against Calzaretta and AABO, LLC (“AABO”).[2] The ACRD Parties are Wisconsin limited liability companies whose sole member is Rezny. The ACRD Parties owned the real estate expected to be purchased by Plaintiff in the transaction at issue in the complaint.

         AABO is a Wisconsin limited liability company organized by Rezny whose sole members are Plaintiff Calzaretta and Defendant's father Gerald Rezny (hereinafter “Gerald”). AABO was organized in order to purchase and/or manage the real estate at issue in the complaint. The counterclaim alleges that Gerald was listed as a member due to a non-compete agreement between Rezny's banker and the banker's former employer. The AABO operating agreement provided that Calzaretta had an 81% ownership share, and Gerald had a 19% share.

         According to the counterclaim, on or about November 21, 2016, Calzaretta, on behalf of AABO, signed separate Offers to Purchase (“Offers”) seven parcels of real estate from the ACRD Parties. Rezny accepted the Offers around November 28, 2016. Calzaretta received tentative bank financing for the purchase in late November 2016.

         Each of the seven Offers included a line item on which the parties could fill in the amount of and delivery date of earnest money accompanying the offer. The section was blank on each Offer. Calzaretta allegedly agreed to pay Rezny a total of $150, 000 in earnest money for all seven properties, and on December 12, 2016, Rezny emailed Calzaretta a Down Payment Agreement (“DPA”) referencing the $150, 000; Calzaretta never returned the DPA to Rezny. Rezny believes Calzaretta actually read and reviewed the agreement, however, because Calzaretta wired him $150, 000 on December 13, 2016, and the email attaching the DPA included a separate attachment giving wire instructions.

         Immediately after the wire transfer on December 13, Calzaretta asked that the funds be returned, and Rezny sent back a total of $100, 000. The counterclaim alleges that Calzaretta falsely told Rezny that he needed the money returned because the transfer had triggered a taxable event, and he would repay the $100, 000 to Rezny the following day. He never sent the money, however, and instead sued Rezny for the return of the remaining $50, 000, which is the subject of the present complaint. Calzaretta ultimately refused to close on the property sales, and to date, Rezny has been unable to refinance or sell any of the properties.

         Count I of the counterclaim alleges that Calzaretta and AABO breached the Offers by failing to close on the properties, resulting in damages to Counter-Plaintiffs in the form of maintenance costs, taxes, debt service, and other expenses. Counter-Plaintiffs seek an award of the $100, 000 earnest money as liquidated damages pursuant to the default provisions of the Offers and an order requiring strict performance of the Offers by Counter-defendants. Count II of the counterclaim, entitled “Equitable Estoppel, ” alleges that Counter-Defendants made false representations to induce Rezny to return the earnest money; it would thus be inequitable to allowing Calzaretta to proceed on his claim for the $50, 000.[3]Accordingly, Counter-Plaintiffs seek a declaration that Calzaretta is equitably estopped from asserting facts and claims to recover the $50, 000 in this litigation.

         DISCUSSION

         I. JUDICIAL STANDARD

         The purpose of a motion to dismiss under Rule 12(b)(6) is to test the sufficiency of a complaint, not to decide the merits of a case. Gibson v. City of Chi., 910 F.2d 1510, 1520 (7th Cir. 1990). In determining whether to grant a Rule 12(b)(6) motion to dismiss, the Court accepts all well-pleaded allegations in the complaint as true and draws all reasonable inferences in the light most favorable to the plaintiff. Killingsworth v. HSBC Bank, 507 F.3d 614, 618 (7th Cir. 2007). The complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “Specific facts are not necessary; the statement need only ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.' ” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

         However, “a plaintiff's obligation to provide the grounds for entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. “Factual allegations must be enough to raise a right to relief above the speculative level.” Id. The Seventh Circuit has read the Twombly decision as imposing “two easy-to-clear hurdles. First, the complaint must describe the claim in sufficient detail to give the defendant fair notice of what the claim is and the grounds upon which it rests. Second, its allegations must plausibly suggest that the plaintiff has a right to relief, raising that possibility above a speculative level; if they do not, the plaintiff pleads itself out of court.” E.E.O.C. v. Concerta Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (internal citations and quotations omitted). In determining what “plausibly” means, the Seventh Circuit has explained that “the ...


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