Dan Joint Venture Iii, L.P. v. Touris

598 B.R. 430

DAN JOINT VENTURE III, L.P., Plaintiff,

v.Doretha TOURIS, et al., Defendants.

Case No. 18-cv-349

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

Signed March 19, 2019

F. Dean Armstrong, Armstrong Law Firm, Frankfort, IL, for Plaintiff.

Nicholas George Grapsas, Nicholas G. Grapsas, Ltd., Inverness, IL, Jennifer Marie Schwartz, John Chen, Chen Roberts Ltd., Martin John O'Hara, Much Shelist Denenberg Ament & Rubenstein, PC, Scott Andrew Nehls, Fuchs & Roselli, Ltd., Richard H. Fimoff, Robert J. Trizna, Robbins, Salomon & Patt, Ltd., John Joseph Emmett Zummo, John E. Zummo Law, John James Kakacek, Michael T. Trucco, Stamos & Trucco LLP, Howard A. London, Beermann, Pritikin & Mirabelli, Kimberly Elizabeth Blair, Joseph J. Stafford, Wilson Elser Moskowitz Edelman & Dicker LLP, Matthew David Elster, Beermann LLP, Chicago, IL, Ryan A. Biller, Rolewick & Gutzke, P.C., Wheaton, IL, Defendants.

MEMORANDUM OPINION AND ORDER

Robert M. Dow, Jr., United States District Judge

For the reasons set forth below, the motion to dismiss filed by Defendant James Paul [30] is granted; the motion to dismiss filed by Defendant George Strat [46] is denied; the motion to dismiss or, in the alternative, the motion for a more definite statement filed by Defendant Paul Jones [61] is granted in part and denied in part; the motion to dismiss filed by Defendant Natel Matschulat [68] is denied; and the motion to dismiss filed by Defendant Dorothea Touris [79] is granted in part and denied in part. Plaintiff is given until April 19, 2019 to file a second amended complaint. This case is set for further status hearing set for April 24, 2019 at 9:00 a.m.

I. Background¹

Plaintiff D.A.N. Joint Venture III, L.P. ("DJV" or "Plaintiff") contends that Nicholas S. Gouletas ("Gouletas" or the "Debtor") engaged in a complicated scheme to hide, transfer, and otherwise shield his assets from the claims of certain of his judgment creditors by transferring more than $ 2,000,000 in cash and other assets to his friends, relatives, and a select group of creditors. [11, at ¶ 1.] Plaintiff brings state-law claims of (i) avoidance of fraudulent transfers pursuant to 740 ILCS 160/5(a)(1) ; (ii) avoidance of fraudulent transfers pursuant to 740 ILCS 160/6(a) ; (iii) civil conspiracy to commit fraud; (iv) aiding and abetting fraud; (v) tortious interference with expectancy of collection upon judgments; and (vi) reimbursement of funds owed to Gouletas prior to the time that he filed for bankruptcy.

Gouletas is the owner and control person of a large group of companies generally referred to as "American Invsco" that were involved in condominium conversions and various other real estate developments in more than 40 cities throughout the United States. [11, at ¶ 7.] On December 19, 2013, citations to discover assets were issued against Gouletas in connection with two lawsuits against him. [Id. at ¶ 16.] As of late December 2013, Gouletas was prohibited from transferring his assets by virtue of the citations issued against him. [Id. ] In another citation to discover assets dated June 5, 2014, Gouletas was instructed:

YOU ARE PROHIBITED from making or allowing any transfer or other disposition of * * * any property not exempt from execution * * * belonging to the judgment debtor [Gouletas] or to which the judgment debtor may be entitled or which may be acquired by or become due to the judgment debtor * * *, until further order of Court or termination of the proceedings.

[Id. at ¶ 18.] Plaintiff challenges numerous actions Gouletas allegedly took to improperly transfer assets after these citations were issued against him.

A. Transfers to Touris Checking Accounts

In January 2015, Gouletas requested that his close friend of over 40 years Defendant Dorothea Touris deposit funds belonging to Gouletas into her checking accounts for the payment of Gouletas's expenses. [Id. at ¶¶ 6.1, 20-22.] Pursuant to Gouletas's plan, Touris would take the funds that he had provided to her, put the money into her checking accounts, and then pay Gouletas's bills out of her checking accounts. [Id. at ¶ 22.] The funds that Gouletas deposited into Touris's checking accounts belonged to Gouletas. [Id. ] In late January of 2015, Touris met with Gouletas at his office in Chicago with Gouletas's attorney Howard Teplinsky, an attorney at Beermann Pritikin Mirabelli Swerdlove LLP ("BPMS"). [Id. at ¶ 23.] At that meeting, Gouletas presented Touris with a check in the amount of $ 396,218.84. [Id. ] Gouletas told Touris to deposit the check into her account and to pay $ 195,000 to Steven Gouletas (Gouletas's son) and $ 50,000 to George Spanos (Gouletas's friend), with the balance of $ 150,000 to be kept by Touris as compensation in the form of a purported reimbursement on a Gouletas investment.² [Id. ] On February 6, 2015, Touris paid $ 195,000 to Gouletas's son and $ 50,000 to George Spanos, as directed by Gouletas. [Id. at ¶ 24.]

On February 17, 2015, Gouletas wire-transferred $ 15,730 into Touris's checking account at Chase Bank. [Id. at ¶ 25.] The $ 15,730 was money that belonged to Gouletas. [Id. ] However, Gouletas claimed to have "no idea" from where the $ 15,730 came. [Id. ] In March of 2015, Gouletas told Touris that a check for $ 415,000 was coming to her, which she was to deposit into her account for the payment of Gouletas's expenses. [Id. at ¶ 26.] Touris deposited the $ 415,000 check into her checking account at Chase Bank. [Id. ] According to Touris, Gouletas asked her to deposit the check into her account to pay his bills. [Id. ] Although Gouletas claimed that the $ 415,000 was a "loan" to him from Defendant Dr. Paul Jones, at some point he admitted that the $ 415,000 was his money. [Id. ] In total, Gouletas deposited more than $ 431,145 into Touris's checking account at Chase. [Id. ] As Exhibit 12 to the amended complaint, Plaintiff includes account summaries showing financial transactions that Touris admits that she handled for Gouletas with his own money. [11-1, at 38-46; 11, at ¶ 27.] All of the transactions were done at the direction of Gouletas. [11, at ¶ 27.]

B. Garvey Court Project Transfers

Gouletas was involved in a real estate development project referred to as "Garvey Court" (the "Garvey Court Project") that involved the construction of a high-rise retail/office/condominium building on properties that Gouletas owned (through entities that he owned and controlled). [Id. at ¶ 30.] Gouletas "gifted" his 25% interest in the Garvey Court Project to family members through two newly formed LLCs, SEG Garvey LLC and NKM Garvey LLC.³ [Id. at ¶ 32.] Plaintiff estimates that the value of Gouletas's interest in the Garvey Court Project at the time of these transfers exceeded $ 3,600,000. [Id. at ¶ 33.]

C. Stock Transfers

On June 9, 2014, Gouletas discovered that he had acquired a number of shares of stock in CIB Marine BankShares (the "CIB Stock"), which he held through a stock brokerage account at TD Ameritrade (the "TDA Account"). [Id. at ¶ 34.] Gouletas sold his CIB Stock through his TDA Account for just over $ 51,000 and wire-transferred $ 51,323.29 from that stock sale into a checking account held in the name of his wife, Defendant Natel Matschulat. [Id. at ¶ 35.] Gouletas then proceeded to have his wife sign checks from that account for the payment of Gouletas's expenses. [Id. at ¶ 36.]

D. HBI-Parking Lot Mortgage

Defendant 800 South Wells Phase II, LLC ("800 SWP") owned a 1.77 acre, 126-space parking lot at 800 South Wells Street in Chicago (the "Parking Lot"). [Id. at ¶ 37.] Gouletas was the manager, sole member, and control person of 800 SWP. [Id. ] As of November 1, 2009, there was only one mortgage against the Parking Lot, which was in favor of River City Investors, LLC ("RCI") in the original principal amount of $ 2,000,000.00 (the "RCI Mortgage"). [Id. at ¶ 38.] In November 2009, Gouletas had another entity he controlled—Defendant Home By Invsco, Inc. ("HBI")—place a false mortgage against the Parking Lot in the amount of $ 2,177,700 (the "HBI Second Mortgage"). [Id. ] HBI was owned and controlled by Gouletas. [Id. ] While Gouletas signed the HBI Second Mortgage on November 1, 2009, the internal financial documents of Gouletas's enterprise—American Invsco, which included 800 SWP and HBI—did not reflect any indebtedness supposedly owed to HBI on the HBI Second Mortgage. [Id. at ¶¶ 39-40.]

In late 2014, a third party offered to purchase the Parking Lot for $ 7,750,000.

[Id. at ¶ 41.] With the RCI Mortgage and other expenses of the sale totaling approximately $ 5,711,000, Gouletas (with the assistance of one or more Doe Defendants 1-10) came up with a plan to shield approximately $ 2,038,000 in profits from Gouletas's disfavored creditors. [Id. ] The plan involved the false claim that the HBI Second Mortgage was legitimate, which allowed Gouletas to distribute the approximately $ 2,038,000 in profits from the sale of the Parking Lot (that otherwise would have been paid to Gouletas) to certain preferred creditors and other friends and relatives of Gouletas, with those friends and relatives then funneling a portion of the profits from the sale of the Parking Lot back to Gouletas through Touris's checking accounts. [Id. ] The closing on the sale of the Parking Lot occurred on December 29, 2014. [Id. at ¶ 43.] The closing statement shows that from the $ 7,750,000 in sale proceeds, $ 2,038,703.84 was the balance due to the Seller 800 SWP. [Id. ] Elizabeth Friedgut, the transactional attorney who was handling the sale of the Parking Lot for Gouletas, signed the settlement statement for and on behalf of 800 SWP. [Id. ] The balance due to 800 SWP (i.e. , $ 2,038,703.84) was transferred into a trust account at BPMS to facilitate the payment of the proceeds as Gouletas directed. [Id. at ¶ 44.] On January 6, 2015, Gouletas had an additional $ 137,535 wire-transferred into the trust account at BPMS. [Id. ]

In January 2015, Mr. Teplinsky (for and on behalf of BPMS) directed how the $...