United States District Court, C.D. Illinois, Springfield Division
JAMES R. HAUSMAN, Plaintiff,
TODD GREEN; JOSHUA WAGNER; THE GOLD CENTER, INC., an Illinois corporation; ILLINOIS DEPOSITORY CORPORATION, an Illinois corporation; and ILLINOIS ARMORED TRANSPORT, INC., an Illinois corporation, Defendants.
MYERSCOUGH UNITED STATES DISTRICT JUDGE
cause is before the Court on the objection (d/e 22) to U.S.
Magistrate Judge Tom Schanzle-Haskins' Report and
Recommendation (d/e 21) filed by Defendants Todd Green and
Joshua Wagoner and joined by The Gold Center, Inc., Illinois
Depository Corporation, and Illinois Armored Transport, Inc.
(the Corporate Defendants) (d/e 23). The Objection is
overruled and the Court ACCEPTS the Report and
Recommendation. The Motion to Dismiss (d/e 16) filed by
Defendants Green and Wagoner and joined by the Corporate
Defendants (d/e 17) is GRANTED IN PART and DENIED IN PART.
The Court dismisses Plaintiff's prayer for a penalty
under 805 ILCS 5/7.75(d) in Count II but otherwise denies the
Court adopts the Statement of Facts set forth in the Judge
Schanzle-Haskins' Report and Recommendation. In sum, the
Complaint alleges that, in 2013, Plaintiff entered into a
transaction to sell 80% of the stock in the Corporation
Defendants to Green. As part of the transaction, the
Corporate Defendants leased from Plaintiff the real estate on
which the corporations operated on a five-year lease, with
options to renew. The lease also gave Green an option to
purchase the property. Green transferred a 5% equitable or
beneficial interest in the Corporate Defendants to Wagoner,
who became the new manager of the Corporate Defendants.
Plaintiff, Green, and Wagoner are members of each
corporation's board of directors. Plaintiff alleges that
Green and Wagoner mismanaged the Corporate Defendants,
misappropriated assets, engaged in transactions in violations
of law, and engaged in other tortious conduct to the
detriment of the Corporate Defendants.
April 14, 2015, Green filed suit in Sangamon County Circuit
Court against Plaintiff seeking specific performance on his
option to purchase the property. Plaintiff filed an
affirmative defense and counterclaim in response. The
counterclaim alleged that Green breached various provisions
of the Shareholder's Agreement and Lease, including that
Green failed to comply with the Business Corporation Act, 805
ILCS 5/7.75, by denying Plaintiff complete access to the
books and records of the Corporate Defendants.
January 25, 2017, Green filed a motion to voluntarily dismiss
without prejudice the state court case. On March 10, 2017,
the state court granted the motion to voluntarily dismiss and
made the following docket entry:
03/10/2017 Entry regarding motion to dismiss Signed Judge:
Present the Plaintiff by Attorney Myers. Plaintiff's
Motion to Voluntarily Dismiss Complaint without prejudice is
Judge: MADONIA Clerk: N
Civil Division Case Closed
Status: Cause Stricken Report: Terminated Mar 10, 2017
Pl. Resp., Ex. 1 State Court Docket (d/e 20-1).
January 26, 2018, Plaintiff filed his Complaint in this
Court. In Count I, brought pursuant to Section 12.56 of the
Illinois Business Corporation Act, Plaintiff asks the Court
to either order dissolution of the Corporate Defendants or
order Defendants to purchase Plaintiff's stock in the
Corporate Defendants at fair market value because Green and
Wagoner are acting in a manner that is illegal, oppressive,
or fraudulent and are misapplying or wasting corporate
assets. In Count II, brought pursuant to Section 7.75 of the
Business Corporation Act, Plaintiff asks for a writ of
mandamus requiring Defendants to produce the requested
records for examination and a penalty of 10% of the value of
the shares owned by Plaintiff in the Corporate Defendants.
March 2018, Defendants Green and Wagoner filed a Motion to
Dismiss and/or Stay Proceedings (d/e 16), which the Corporate
Defendants joined (d/e 17). Defendants assert that
Plaintiff's state court counterclaim remains pending and,
therefore, this Court should abstain from exercising its
jurisdiction over Count I pursuant to the Colorado
River doctrine. See Colorado River Water
Conservation Dist. v. United States, 424 U.S. 800
(1976). Defendants further assert that ...