Suites v. Stj

• Decision Date: 17 December 2010
• Docket Number: Case Nos. 09–C–0533, 09–C–0569.
• Citation: 759 F.Supp.2d 1032
• Parties: SJ PROPERTIES SUITES, BuyCo, EHF; SJ Fasteignir, EHF; and, Askar Capital, HF, Plaintiffs,andSeth E. Dizard, Court–Appointed Receiver of DOC Milwaukee LP, Intervenor Plaintiff,v.STJ, P.C., d/b/a Economou Partners; EP Milwaukee, LLC; Economou Partners Construction, Inc.; John W. Economou; Steve J. Economou; and, Thomas V. Economou, Defendants.EP Milwaukee, LLC, Counterclaimant,v.SJ Properties Suites, BuyCo, EHF, Counterclaim Defendant.SJ Properties Suites, BuyCo, EHF, Plaintiff–Counterclaim Defendant,andSeth E. Dizard, Court–Appointed Receiver of DOC Milwaukee LP, Intervenor Plaintiff,v.EP Milwaukee, LLC, Defendant–Counterclaimant.
• Court: U.S. District Court — Eastern District of Wisconsin

759 F.Supp.2d 1032

SJ PROPERTIES SUITES, BuyCo, EHF; SJ Fasteignir, EHF; and, Askar Capital, HF, Plaintiffs,andSeth E. Dizard, Court–Appointed Receiver of DOC Milwaukee LP, Intervenor Plaintiff,

v.STJ, P.C., d/b/a Economou Partners; EP Milwaukee, LLC; Economou Partners Construction, Inc.; John W. Economou; Steve J. Economou; and, Thomas

v. Economou, Defendants.EP Milwaukee, LLC, Counterclaimant,

v.SJ Properties Suites, BuyCo, EHF, Counterclaim Defendant.SJ Properties Suites, BuyCo, EHF, Plaintiff–Counterclaim Defendant,andSeth E. Dizard, Court–Appointed Receiver of DOC Milwaukee LP, Intervenor Plaintiff,

v.EP Milwaukee, LLC, Defendant–Counterclaimant.

Case Nos. 09–C–0533, 09–C–0569.

United States District Court, E.D. Wisconsin.

Dec. 17, 2010.

Anthony K. Murdock, Scott R. Halloin, Joshua J. Roever, Halloin & Murdock SC, Milwaukee, WI, for Plaintiffs.Gregory J. Cook, Greg Cook Law Offices SC, Milwaukee, WI, for Defendants.Timothy B. Caprez, Gregory W. Lyons, Steven J. Slawinski, O'Neil Cannon Hollman Dejong & Laing SC, Milwaukee, WI, for Intervenor Plaintiff.

DECISION AND ORDER

RUDOLPH T. RANDA, District Judge.

This Decision and Order address three motions for summary judgment that are pending in this consolidated action. The action arises from a hotel and condominium real estate development construction project located at 1150 North Water Street, in downtown Milwaukee, Wisconsin (the “Milwaukee Project” or the “Project”). There are two separate Complaints—one setting forth the damages claims (Docket No. 84) and another setting forth the declaratory judgment claims (Docket No. 157). There are also counterclaims to each Complaint.

STANDARDS APPLICABLE TO SUMMARY JUDGMENT

In deciding the pending motions for summary judgment, the Court applies the following standards. When considering a motion for summary judgment, summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c); see also, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A party “opposing a properly supported motion for summary judgment may not rest upon the mere allegations or denials of his pleading, but ... must set forth specific facts showing that there is a genuine issue for trial.” Doe v. Cunningham, 30 F.3d 879, 883 (7th Cir.1994) (quoting Anderson, 477 U.S. at 248, 106 S.Ct. 2505; also citing Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548; Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); United States v. Rode Corp., 996 F.2d 174, 178 (7th Cir.1993)).

“Material facts” are those facts that under the applicable substantive law “might affect the outcome of the suit.” See Anderson, 477 U.S. at 248, 106 S.Ct. 2505. A dispute over “material facts” is “genuine” if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. The burden of showing the needlessness of a trial—(1) the absence of a genuine issue of material fact and (2) an entitlement to judgment as a matter of law—is upon the movant. In determining whether a genuine issue of material fact exists, the Court must consider the evidence in the light most favorable to the nonmoving party. See Matsushita Elec. Indus. Co., Ltd., 475 U.S. at 587, 106 S.Ct. 1348.

Rule 56(e)(1) addresses the opposing party's obligation to respond stating “[w]hen a motion for summary judgment is properly made and supported, an opposing party may not rely merely on allegations or denials in its own pleading; rather, its response must—by affidavits or as otherwise provided in this rule—set out specific facts showing a genuine issue for trial.” Furthermore, in determining the material and undisputed facts, the Court has disregarded those proposed findings of fact and responses that constituted legal conclusions, were argumentative or irrelevant, were not supported by the cited evidence, or were not supported by citations specific enough to alert the Court to the source for the proposal.

ECONOMOU DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

The Defendants and Counterclaimants, STJ, P.C. d/b/a Economou Partners (“STJ, P.C.”); EP Milwaukee, LLC (“EP”); Economou Partners Construction, Inc. (“Economou Construction”); John W. Economou (“John Economou”); Steve J. Economou (“Steve Economou”), and Thomas V. Economou (“Thomas Economou”) (collectively the “Economou Defendants”) seek summary judgment dismissing the damages claims of the Plaintiffs, SJ Properties Suites, BuyCo, ehf (“BuyCo”); SJ Fasteignir, ehf (“Fasteignir”); and, Askar Capital, hf (“Askar”) (collectively the “Plaintiffs”). The Economou Defendants assert that the Plaintiffs' damages claims against them must be dismissed because the Plaintiffs entered into a Pierringer release ¹ in this action. The Plaintiffs maintain that the motion should be denied.

Relevant Facts ²

DOC Milwaukee, LP (the “Partnership”), is a limited partnership that is the owner of the Milwaukee Project, a partially constructed 14–story, mixed-use building at the corner of Juneau and Water Streets in downtown Milwaukee, Wisconsin. The Partnership consists of BuyCo, and Development Opportunity Corp. (“DOC”) which are limited partners, and EP, which is the general partner.

On May 1, 2006, the Partnership and STJ, P.C. entered into a Standard Form of Architect Services on AIA form B141–1997. On July 1, 2006, the Partnership and Economou Partners executed a Construction Manager Agreement on standard AIA form B801/CMa. As such, Economou Partners prepared payment applications for review by STJ, P.C. and final approval by EP.

On May 27, 2009, the Plaintiffs filed this action in this District, Case Number 09–C–0533, against various persons and entities associated with the Milwaukee Project. This case previously included allegations against DOC; DOC Development Milwaukee, LLC (“Development LLC”); DOC Ft. Myers, LLC (“DOC Ft. Myers”); Brenda Yurick (“Yurick”); and Phillip E. Hugh (“Hugh”) (collectively the “DOC Parties”). The action previously, and currently, contains allegations against STJ, P.C.; EP; Economou Construction; Steve Economou; John Economou; and Thomas Economou.

The principal of one of the DOC Parties admitted that funds intended for the Milwaukee Project had been loaned to DOC Ft. Myers for the separate project being developed in Fort Myers, Florida. Thereafter, the Plaintiffs entered into a settlement agreement and Pierringer release with all of the DOC Parties. The Pierringer release (“Release”) was signed by the Plaintiffs in the fall of 2009. ( See Ex. A to the Affidavit of Gregory J. Cook filed on February 18, 2010) (“Cook Feb. 2010 Aff.”). The Release refers to the Plaintiffs collectively as the “Releasing Persons,” and the DOC Parties as the “Released Persons.” (Cook Feb. 2010 Aff. ¶ 3 Ex. A.)

By the Release, the DOC Parties were dismissed from the lawsuit,³ and the Plaintiffs withdrew the claims against them under Wis. Stat. § 779.02(5); Wis. Stat. § 895.446; and Wis. Stat. § 943.20(1)(b). Section 779.02(5) of the Wisconsin Statutes provides for a theft by contractor claim.

Paragraph 4 of the Release states:

To permit the full effectiveness of the Pierringer provisions of this agreement for the Released Persons, without impairing the Releasing Persons' ability to pursue any non-settling parties (generally, as well as those specific entities and persons defined in this paragraph), the Released Persons, hereby fully reserve, preserve and maintain all actions, causes of actions, claims, demands, liabilities, rights, or suits of any kind or nature whatsoever (whether arising in contract, tort, or otherwise, and all damages, injuries or losses suffered or incurred to date, including all costs, expenses and attorney's fees suffered or incurred in connection with the Actions) against [STJ, P.C., EP, ECONOMOU CONSTRUCTION, JOHN ECONOMOU, STEVE ECONOMOU, THOMAS ECONOMOU], and any other entity that these entities or persons own or have an ownership interest (collectively being referred to as the “ Non–Settling Parties ”). The Released Persons hereby irrevocably and unconditionally assign, grant, convey and transfer to [BUYCO] or to the Receiver as their interests may appear, all such actions, causes of actions, claims, demands, liabilities, rights, or suits of any kind or nature whatsoever (whether arising in contract, tort, or otherwise), against all non-settling parties, including the Non–Settling Parties. This assignment is separate and independent consideration for the release of the Released Persons. In addition, to permit the full effectiveness of the Pierringer provisions of this agreement for the Released Persons, without impairing the Releasing Persons' ability to pursue non-settling parties, including the Non–Settling Parties, the Released Persons specifically assign all indemnification and contribution claims that they have against the Non–Settling Parties, and all actions, causes of actions, claims, demands, liabilities, rights, or suits of any kind or nature whatsoever (whether arising in contract, tort, or otherwise) that they have against the Non–Settling Parties, to the Releasing Persons.

(Cook Feb. 2010 Aff. ¶ 4 Ex. A.)

The Plaintiffs' Complaint ⁴ revolves around two sets of alleged wrongdoings. The Plaintiffs believe that both the DOC Parties and the Plaintiffs were the victims of § 779.02(5) violations associated with draw requests and payment applications submitted by the Economou Defendants that falsely represented the percentage of completion of the Milwaukee Project work. These are not “co-intentional tortfeasor” torts, but wrongful actions that were solely by the Economou Defendants.

The Plaintiffs also believe that the...