Chi. Title Ins. Co. v. Sinikovic

• Decision Date: 28 August 2015
• Docket Number: No. 11 C 2504,11 C 2504
• Citation: 125 F.Supp.3d 769
• Parties: Chicago Title Insurance Company, a Nebraska Corporation, Plaintiff, v. Elvir Sinikovic, Individually; Dennis Quijano, Individually; Larisa Spirtovic a/k/a Larisa Sinikovic, Individually; M & M Flooring and Construction, Inc.; Rainbow as, Inc., an Illinois Corporation; Adnan Spirtovic, Individually; DC & L, LLC, an Illinois Limited Liability Company; and Prestige of Chicago, Inc., an Illinois Corporation, Defendants.
• Court: U.S. District Court — Northern District of Illinois

125 F.Supp.3d 769

Chicago Title Insurance Company, a Nebraska Corporation, Plaintiff,

v.Elvir Sinikovic, Individually; Dennis Quijano, Individually; Larisa Spirtovic a/k/a Larisa Sinikovic, Individually; M & M Flooring and Construction, Inc.; Rainbow as, Inc., an Illinois Corporation; Adnan Spirtovic, Individually; DC & L, LLC, an Illinois Limited Liability Company; and Prestige of Chicago, Inc., an Illinois Corporation, Defendants.

No. 11 C 2504

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

Signed August 28, 2015

Joseph R. Marconi, Peter R. Ryndak, Johnson & Bell, Ltd., Stephen Michael Brandenburg, Cameli & Hoag, Chicago, IL, for Plaintiff.

Stephen L. Richards, Stephen L. Richards, David W. Daudell, Law Office of David W. Daudell, Chicago, IL, Jeffrey P. Guzak, Law Offices of Jeffrey Patrick Guzak, Inverness, IL, Michael S. Loeffler, Todd H. Thomas, Mark Victor Paulis, Loeffler Thomas P.C., Northbrook, IL, for Defendants.

OPINION AND ORDER

SARA L. ELLIS, United States District Judge

Elvir Sinikovic ("Elvir") masterminded a scheme in which he misappropriated over $1.6 million over the course of four years from his employer, Plaintiff Chicago Title Insurance Company ("Chicago Title"), involving the other Defendants in this action—Dennis Quijano ("Dennis"), Larisa Spirtovic ("Larisa"), M & M Flooring and Construction, Inc. ("M & M"), Rainbow AS, Inc. ("Rainbow AS"), Adnan Spirtovic ("Adnan"), DC & L, LLC ("DC & L), and Prestige of Chicago, Inc. ("Prestige")—to varying degrees. Chicago Title filed suit against Defendants seeking to recover the misappropriated funds. M & M filed a cross-claim against Elvir, alleging that to the extent it is held liable to Chicago Title, Elvir should be required to pay those amounts instead.¹ The case is now before the Court on Chicago Title's motion for summary judgment [134]. The Court finds that the evidence of record, combined with the negative inference that can be drawn from Elvir's invocation of the Fifth Amendment privilege, warrant granting summary judgment on Chicago Title's breach of fiduciary duty and accounting claims and the award of punitive damages against Elvir, although the amount of punitive damages must be determined by a jury. The undisputed evidence also demonstrates that Chicago Title is entitled to summary judgment on its unjust enrichment claim against all Defendants but Adnan, who has raised a question as to whether he received any money from Elvir's scheme. Because DC & L's purchase of property is the only fund or property identified by Chicago Title over which a constructive trust may be imposed, that is the only portion of Chicago Title's request for a constructive trust that the Court will grant at this time. The Court also finds that there is a question of fact or insufficient evidence to establish that Elvir entered into a conspiracy with Adnan and Rainbow AS, M & M, or Quijano, leaving those claims to be resolved by a jury. Finally, because Chicago Title has not carried its burden to establish why its request for permanent injunctive relief is appropriate and there are remaining liability issues that must be resolved first, the Court defers ruling on that request at this time.

BACKGROUND²

Elvir was hired by Chicago Title in August 2004 as a receptionist and mechanic's lien examiner at its Park Ridge, Illinois office. In July 2005, Elvir was transferred to Chicago Title's Westchester, Illinois location and trained as a title examiner. At the Westchester office, he became the sole construction escrow administrator, responsible for the control, management, and supervision of all construction escrow files held there. This involved collecting and maintaining necessary documentation from contractors seeking payment from specific construction escrow files, and approving and issuing payments from those files to the contractors. In some cases, Elvir was the sole person responsible for verifying the propriety of disbursements.

At all relevant times, Chicago Title maintained a policy that no funds were to be disbursed to a contractor from a construction escrow file unless the necessary paperwork was received and placed in the appropriate file. But during an investigation into Elvir's activities, Chicago Title learned that Elvir did not comply with this policy and instead made disbursements from various construction escrow files to family members, associates, and businesses in which he had an interest, as well as other entities to which he owed money. In total, Chicago Title's investigation revealed that Elvir took at least $1,636,155.42 to which he was not entitled from Chicago Title accounts.

Specifically, between March 21, 2007 and June 11, 2009, Elvir issued at least 121 checks totaling at least $545,189.73 to Rainbow AS. Rainbow AS was a trucking business owned by Adnan, Elvir's then future brother-in-law. Rainbow AS performed no services in connection with the receipt of the funds and none of the escrow files contained appropriate documentation for the disbursements. Adnan acknowledged that neither he nor Rainbow performed any contracting work or provided materials warranting the payments that Rainbow AS received from Chicago Title. Adnan testified that, based on Elvir's representations, he understood that the money was from Elvir's father's investments and that Elvir was asking to deposit it first in Rainbow AS's account so as to pay less in taxes. Adnan testified that he did not question the legitimacy of the transactions. Larisa, Adnan's sister who married Elvir in 2010, also understood the arrangement to be for the same purpose.

Adnan testified that after he deposited the checks he received from Elvir in Rainbow AS's account, he would withdraw the money several days later and give it to Elvir. Adnan did acknowledge that because he and Elvir had a joint interest in two trucks owned by Rainbow AS, some of the money that was deposited in Rainbow AS's account remained there and was considered to be Elvir's contribution for the trucks and other business expenses. But aside from the money used as a contribution for Elvir's portion of the trucking expenses for Rainbow AS, Adnan testified that he and Rainbow AS did not retain any money from the Chicago Title checks Elvir issued to Rainbow AS. Adnan also claimed not to have any agreement with Elvir regarding splitting or sharing the funds deposited in Rainbow AS's account.

Elvir also issued checks from Chicago Title to M & M, a flooring and construction contractor associated with Marius Moldovan. Chicago Title's investigation revealed that Elvir issued at least 91 checks from Chicago Title's accounts to M & M, totaling at least $428,997.91, between March 29, 2007 and October 29, 2010. None of the escrow files contained appropriate documentation for the disbursements and M & M did not perform any services in connection with the funds.

Similarly, between May 19, 2010 and February 14, 2011, Elvir issued at least 110 checks totaling at least $541,640.78 from Chicago Title's escrow accounts to Quijano. Again, Quijano had not performed any work to warrant the payments and none of the relevant escrow files contained appropriate documentation. Elvir also caused $50,000 to be transmitted by a wire transfer to Quijano on October 11, 2010. $40,000 of the wire transfer was then used as Larisa's contribution to purchase 2925 W. Touhy, Unit 3, Chicago, Illinois through DC & L. Larisa is one of the members of DC & L, with the remaining members being her dental business partner and his wife. The property is used for Larisa's dental practice. Larisa testified that she believed the $40,000 came from Elvir's parents.

Elvir is a 50% owner and the corporate secretary of Prestige, which operated a restaurant, Estrada, at 2639–41 W. Peterson Avenue in Chicago. Elvir diverted at least $30,000 from Chicago Title to the operation of Estrada, including for rent payments. Between May 17 and September 14, 2010, Elvir also issued 10 checks from Chicago Title totaling $22,650 to Hasim Mujic, Zaim Zolja, Sanela Ovnovich, and David Zaya.³ There was no documentation in Chicago Title's files to support these disbursements.

Elvir also used money from Chicago Title to pay for expenses associated with his wedding to Larisa on July 4, 2010. On June 29, 2010, he approved, issued, and delivered a check for $14,873 from Chicago Title to Café La Cave, the restaurant where he and Larisa held their wedding reception. That same day, he also issued and delivered a $2,804 check drawn on a Chicago Title account to Carusel Linen, which provided tablecloths and seat covers for their reception. Larisa testified that she did not know that Elvir used money from Chicago Title to pay for these wedding expenses and that she instead believed that the money was coming from Elvir's parents.

Larisa also testified that Elvir did not speak to her about the checks he received from Chicago Title and deposited into various accounts or gave to Adnan to deposit in Rainbow AS's account. She also testified that Adnan never told her to use Rainbow AS's bank account for her personal expenses nor did she ever use that account for personal expenses. She also claimed that she had not been aware that Elvir was taking money from Chicago Title.

LEGAL STANDARD

Summary judgment obviates the need for a trial where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56. To determine whether a genuine issue of fact exists, the Court must pierce the pleadings and assess the proof as presented in depositions, answers to interrogatories, admissions, and affidavits that are part of the record. Fed. R. Civ. P. 56 & advisory committee's notes. The party seeking summary judgment bears the initial burden of proving that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In response, the non-moving party cannot rest on mere pleadings alone but...