Markou v. Equestrien Estates Homeowners Ass'n
| Decision Date | 18 June 2018 |
| Docket Number | No. 17 C 04917,17 C 04917 |
| Parties | JOHN MARKOU, EVMORFIA MARKOU, DEMETRI MARKOU, PATRICIA HATABURDA, and KEITH SCHUTH, Plaintiffs, v. EQUESTRIEN ESTATES HOMEOWNERS ASSOCIATION, STATE FARM, REMO TURANO, MARRY ANN BACHELOR, DANIEL NOONAN, CHARLES ENGLUND, JOHN BERNACCHI, GREG GILBERTSON, MARSHA HUNTER, JAMES SCHULTE, ARNSTEIN AND LEHR, O'HAGAN MEYER, ALLEN GOLDBERG, JENIFER H. CARCACCIOLO, DANIEL J. NOLAN, and LUKE P. SHERIDAN, Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
The Plaintiffs in this case—all residents of the Equestrian Estates subdivision of Lemont, Illinois—ask the Court to invalidate their homeowners' association agreement and to award damages based on allegations that the agreement was obtained by fraud in violation of their civil rights.1 See generally R. 65, Second Amended Complaint.2 The problem is that the Plaintiffs (or their associates) already asked for similar relief in state court, and lost. The Defendantsspotted this problem, and collectively moved to dismiss. R. 85, Mot. Dismiss. The motion is granted. The Rooker-Feldman and claim-preclusion doctrines prevent the Plaintiffs from re-litigating their unsuccessful state court claims in federal court. And, even if these doctrines did not bar the Plaintiffs' claims, the Second Amended Complaint largely fails to state a claim upon which relief could be granted. So the Second Amended Complaint must be dismissed. Because the Plaintiffs have already had three tries at producing a viable complaint (each attempt producing a tangle of allegations and legal citations), further amendment will not be allowed. The dismissal is for lack of subject matter jurisdiction (and thus technically without prejudice) insofar as the complaint asks the Court to review the decision of the state court, and with prejudice as to all other claims. See Lennon v. City of Carmel, Ind., 865 F.3d 503, 509 (7th Cir. 2017).
The 300-plus allegations in the Second Amended Complaint are not easy to understand. The complaint lacks any apparent chronological or thematic organization, and frequently mixes factual allegations with difficult-to-follow legal citations and argument. See, e.g., Second Am. Compl. ¶¶ 12-25, 40-45, 166-69, 262-65. The factual allegations are confusingly worded, making it at times difficult or impossible to understand what actual events are being described. See, e.g., id. ¶ 14 (), ¶ 27 (), ¶ 84 (). To make matters worse, the Plaintiffs appended hundreds of pages of supporting documentation to the complaint. This documentation comprised affidavits from the Plaintiffs and others (which contained their own factual allegations and legal arguments), and various documents purporting to prove the Plaintiffs' claims of fraud (often without context or explanation). But, as far as it is possible to discern the factual allegations, the Court takes them as true. See Erickson v. Pardus, 551 U.S. 89, 94 (2007).
Before diving into the facts, it is worth giving a quick overview of the cast of characters. The Plaintiffs are all residents of the Equestrian Estates subdivision in Lemont, Illinois. See Second Am. Compl. Tab D ¶ 1, Tab E ¶ 1;3 R. 92, Defs.' Br. Exh. K. Plaintiffs John and Evmorfia Markou are married, and Plaintiff Demetri Markou4 is their son. Second Am. Compl. Tab C ¶¶ 2-3. All three reside at 6 Surrey Lane (also referred to as "6 Surrey Court") in Lemont, Illinois. Id. ¶ 1, Tab D ¶ 1, Tab J ¶ 1 at 1. Plaintiff Patricia Hataburda lives at 75 Horseshoe Lane in Lemont, Illinois. See id. Tab A Exhs. O, Q. Patricia is married to Richard Hataburda (not a party to the present case), who also lives at 75 Horseshoe Lane. Id. ¶ 132, Tab AExh. Q. Finally, Plaintiff Keith Schuth resides at 35 Horseshoe Lane in Lemont, Illinois. Id. Tab E.
The Plaintiffs have sued a number of different defendants. .) The first group of defendants is associated with the Equestrian Estates Homeowners Association ("the HOA" for short). These include the HOA itself and a group of individuals who appear to be current or former HOA board members: Greg Gilbertson, Remo Turano, Mary Ann Bachelor, Daniel Noonan, Marsha Hunter, Charles Englund, James Schulte, and John Bernacchi. See id. State Farm Fire and Casualty Company, the HOA's insurer, is also a defendant. Id.; see also Second Am. Compl. at p. 2-3.5 The Plaintiffs also sued State Farm's former law firm, O'Hagan Meyer, and two O'Hagan Meyer attorneys, Daniel Nolan and Luke Sheridan. Defs.' Br. at 1; see Second Am. Compl. at p. 3-4. Finally, the HOA's law firm, Arnstein & Lehr, LLP, and two Arnstein attorneys, Allan Goldberg and Jenifer Caracciolo, are also named as defendants. Defs.' Br. at 1; see Second Am. Compl. at p. 1-2, ¶ 2.
The major thrust of the Second Amended Complaint is that the Equestrian Estates Homeowners Association improperly amended its governing declaration tothe Plaintiffs' detriment. See Second Am. Compl. at p. 1-3. According to the Plaintiffs, the HOA and its associates engaged in all kinds of shady conduct to secure approval of the Amended Declaration. For example, in order to get the homeowner signatures needed to approve the amendment, HOA members allegedly lied to homeowners about what they were signing. See, e.g., id. ¶¶ 67, 91-92, 277. Evmorfia Markou was told that the card she was signing was "for a gift" when it was actually a consent to modify the HOA declaration. Id. ¶¶ 82, 84. Keith Schuth was similarly deceived. HOA board member James Schulte allegedly got Keith drunk and got him to sign a consent card by telling Keith that it was "to have his information on file." Id. ¶¶ 97-98. The complaint also alleges that Evmorfia Markou was "coerced" to sign John Markou's name without his knowledge or consent, but does not explain the nature of the coercion. Id. ¶ 85. There are also allegations that some signatures were forged, but without many details. See id. ¶¶ 78, 92.
The Plaintiffs also argue that the adoption of the Amended Declaration was procedurally improper. It is difficult to fully understand these allegations, but the gist is that the Original Declaration governing Equestrian Estates6 set out certain procedures for amendments, which were not followed during the adoption of the Amended Declaration. The complaint alleges that, per the Original Declaration, no amendment was allowed to take effect unless homeowners were given 90 days' written notice of the proposed change. Id. ¶ 55. At that point, the "committee" had a year to get the then-owners of two-thirds of the lots to sign a "fully disclosed datednotarized contract/instrument with verifiable witnesses." Id. (emphasis omitted). Instead of following these procedures, Defendants Mary Ann Bachelor and James Schulte falsely certified that the homeowners received 90 days' notice and that the required percentage of homeowners had voluntarily consented to the amendment. See id. ¶¶ 64-66, 69. The HOA's lawyer, Defendant Allan Goldberg of Arnstein & Lehr, was the "princip[al] author" of the improper Amended Declaration, id. at p. 1, and allegedly knew that the Amended Declaration was not consistent with the Original Declaration, id. ¶ 10.
In 2011, litigation commenced over the Amended Declaration. The Second Amended Complaint is not especially clear on what happened, when it happened, or who was involved. But the Defendants included certain pleadings and opinions from the various state court cases surrounding the Declaration in the exhibits to their brief. The Court takes judicial notice of these state court documents because they are a matter of public record. See, e.g., Milwaukee Police Ass'n v. Flynn, 863 F.3d 636, 640 (7th Cir. 2017) (citation omitted). It is also fair to consider these documents because they are incorporated by reference in the Second Amended Complaint. Id. These pleadings and opinions provide a clearer picture of what happened in the various state court cases.
In 2011, Patricia Hataburda brought a lawsuit in Cook County Chancery Court, Patricia Hataburda v. Equestrian Estates Homeowners Association, 11 CH09468. Hataburda sought a judgment that the Amended Declaration was "a nullity and unenforceable" for more or less the same reasons outlined in the Second Amended Complaint, plus some additional arguments. See Defs.' Br. Exh. B, 2011 Chancery Complaint ¶¶ 4, 10-18, 28-30, 54(A). That same year, Hataburda filed another lawsuit, this time in the Law Division, captioned Patricia Hataburda v. Daniel Noonan, 11-L-65043. This lawsuit alleged that then-HOA board member Daniel Noonan had breached his fiduciary duties by failing to disclose 2011 Chancery litigation to HOA members, and claimed malicious prosecution based on a forcible entry and detainer action filed against Patricia Hataburda. Defs.' Br. Exh. D, 2011 Law Complaint ¶¶ 2, 7, 36. Eventually, Patricia Hataburda entered into a settlement agreement releasing her claims in both cases. Defs.' Br. Exh. C, Patricia Hataburda Settlement Agreement.
The Second Amended Complaint alleges that this settlement agreement was obtained through underhanded conduct by the HOA, its board members, Hataburda's then-attorney Thomas Murphy, and the judge in the case. The Plaintiffs allege that when the Hataburdas arrived at the courthouse to try to negotiate a settlement, two Arnstein & Lehr...
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