Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Hausman v. Green

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

June 8, 2018

JAMES R. HAUSMAN, Plaintiff,
v.
TODD GREEN; JOSHUA WAGONER; THE GOLD CENTER, INC., an Illinois corporation; ILLINOIS DEPOSITORY CORPORATION, an Illinois corporation; and ILLINOIS ARMORED TRANSPORT, INC., an Illinois corporation, Defendants.

          REPORT AND RECOMMENDATION

          TOM SCHANZLE-HASKINS, U.S. MAGISTRATE JUDGE.

         This matter comes before the Court for a Report and Recommendation on Defendants' Todd Green and Joshua Wagoner's Motion to Dismiss and/or Stay Proceedings (d/e 16) and Defendants The Gold Center, Inc., Illinois Depository Corporation, and Illinois Armored Transport, Inc., Notice of Joinder in Motion to Dismiss and/or Stay Proceedings Filed by Defendants Todd Green and Joshua Wagoner (d/e 17) (collectively the Motions). Plaintiff James Hausman alleges that he is a minority shareholder in the corporate defendants The Gold Center, Inc. (Gold Center), Illinois Depository Corporation (Illinois Depository), and Illinois Armored Transport, Inc. (Illinois Armored) (collectively the Corporations). Hausman alleges that Defendants Todd Green and Joshua Wagoner are also shareholders in the Corporations. Hausman alleges that Green and Wagoner committed mismanagement, misappropriation of assets, and other tortious conduct involving the assets of the Corporation. He also alleges that Green and Wagoner have refused to let him inspect the books and records of the Corporations.

         Hausman asks this Court to dissolve the Corporations or order the Defendants to purchase his stock in the Corporations at fair market value (Count I); and order Green and Wagoner to let him inspect the books and records of the Corporations and impose a fine on Green and Wagoner pursuant to 805 ILCS 5/7.75 (Count II). See Verified Complaint (d/e 1) (Complaint). The Defendants move to dismiss or stay the Complaint under the Colorado River doctrine, and move to dismiss Count II for failure to state a claim. For the reasons set forth below, the Court recommends that the Motions should be ALLOWED in part and DENIED in part.

         This Court has diversity jurisdiction over this case. Hausman alleges that he is a citizen of Wisconsin, Green is a citizen of Illinois, and the Corporations are all incorporated in Illinois and have their principal places of business in Illinois; and that the amount in controversy exceeds $75, 000. Complaint ¶ 2; see 28 U.S.C. § 1332. Defendants do not challenge these allegations in the Complaint.

         The Defendants bring the Motions under Federal Rule of Civil Procedure 12(b)(1), for lack of jurisdiction, and 12(b)(6), for failure to state a claim. Defendants' Rule 12(b)(1) portion of the Motions does not challenge the accuracy of the allegations in the Complaint. For purposes of both the Rule 12(b)(1) portions of the Motions and the Rule 12(b)(6) portion of the Motions, the Court assumes the well-pleaded allegations in the Complaint to be true and draw all inferences in favor of Plaintiff James Hausman. See Franzoni v. Hartmax Corp., 300 F.3d 767, 771 (7th Cir. 2002). The parties also rely on matters of public record in a suit brought by Defendant Todd Green against Hausman in Sangamon County, Illinois Circuit Court, No. 2015-CH-170 (State Proceeding). The Court may consider matters of public record, such as records of state court proceedings, for purposes of Defendants' Rule 12(b)(6) request. Henson v. CSC Credit Services, 29 F.3d 280, 284 (7th Cir. 1994). The Court may go beyond the pleadings and consider “whatever evidence has been submitted” for purposes of Defendants' 12(b)(1) request. Capitol Leasing Co. v. F.D.I.C., 999 F.2d 188, 191 (7th Cir. 1993) (quoting Grafon Corp. v. Hausermann, 602 F.2d 781, 783 (7th Cir. 1979).

         STATEMENT OF FACTS

         For many years, Hausman owned all of the stock of the Corporations. Through the Corporations, Hausman operated a business dealing in rare coins, precious metals, and diamonds. The Gold Center operated the retail aspects of the business. Illinois Armored operated a secure transport business for precious metals and diamonds. Illinois Depository operated a secured storage business for precious metals and diamonds. Hausman owned the real estate on which the Corporations operated in Springfield, Illinois (Property).

         In 2013, Hausman entered into a transaction to sell 80 percent of the stock in the Corporations to Green (Transaction). As part of the Transaction, the Corporations leased the Property from Hausman on a 5-year lease, with options to renew (Lease). The Lease also gave Green an option to purchase the Property. The terms of the Transaction provided that the Board of Directors of the Corporations consisted of Green, Hausman, and Wagoner. The Transaction also limited the ability to sell shares in the Corporations to unrelated third parties without written permission of the other shareholders, and provided a mechanism to sell shares at an appraised fair market value. See Complaint, ¶¶ 25-41.

         The Transaction was effective January 31, 2014. Green owned 80 percent of the stock in the Corporations, Hausman owned 20 percent. Wagoner became the new manager of the Corporations. Wagoner also worked as a manager for Green's other business operation, Green Family Stores, Inc. Hausman and his wife worked for the Corporations on one-year employment contracts. Hausman alleges that Green transferred “a 5% equitable or beneficial interest” in the Corporation to Wagoner, and a “2% equitable or beneficial interests” in the Corporations to Mike Quimby. Quimby was also an employee of Green Family Stores, Inc. Complaint, ¶¶ 7-18, 37-40.

         Hausman alleges that Green and Wagoner thereafter mismanaged the Corporations, misappropriated assets, engaged in transactions in violation of law, and engaged in other tortious conduct to the detriment of the Corporation. Complaint ¶¶ 42-88, 114-21.

         On January 21, 2015, less than one year after the effective date of the Transaction, Green sent a notice to Hausman purporting to exercise the option to purchase the Property granted in the Lease. Hausman alleges that Green could only exercise the option during the last 120 days of the five-year Lease. On April 14, 2015, Green commenced the State Proceeding in Sangamon County, Illinois Circuit Court. Green sought specific performance on his option to purchase the Property. Hausman filed a counterclaim in response. On January 25, 2017, Green filed a motion to dismiss the Complaint in the State Proceeding voluntarily and without prejudice. Complaint, ¶¶ 90-104.

         On February 15, 2017, Hausman called a meeting of the Board of Directors to address resolutions he proposed regarding Green and Wagoner's improper conduct (Resolutions). In February 2017, Hausman also made a formal demand to inspect the books and records of the Corporations. Hausman alleges that Defendants have refused to comply with this demand. Complaint, ¶¶ 86-89.

         On March 10, 2017, the Sangamon County, Illinois Circuit Court ruled on Green's motion to dismiss his complaint in the State Proceeding without prejudice. Illinois Circuit Judge John ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.