Preview
FILED
9/30/2020 3:28 PM
IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS DOROTHY BROWN
CIRCUIT CLERK
COUNTY DEPARTMENT, LAW DIVISION
COOK COUNTY, IL
FILED DATE: 9/30/2020 3:28 PM 2020L007058
2020L007058
7500 Shore A LLC; 7500 Shore B LLC ) 10630154
7038 Chappel A LLC; 7038 Chappel B )
LLC; 6916 Clyde A LLC; 6916 Clyde B )
LLC, all Wisconsin Limited Liability )
Companies. )
Plaintiffs, )
v. ) No. 2020 L 007058
7500 SS Drive LLC; 6916 CP1 LLC; and )
7038 CP1 LLC, all Illinois Limited )
Liability companies; DAX Real Estate LLC, )
A New York limited liability company; )
Daniel Hedaya; Noah Birk, Aaron Sklar; )
And Kiser Group Realty, Inc., an Illinois )
Corporation, )
Defendants. )
NOAH BIRK AND KISER GROUP REALTY, INC.’S MOTION TO DISMISS
PLAINTIFFS’ COMPLAINT
NOW COME Defendants, Noah Birk (“Birk”) and Kiser Group Realty, Inc. (“KGR”), by
and through their attorneys, Karbal, Cohen, Economou, Silk & Dunne, LLC, and move to dismiss
with prejudice Plaintiffs’ Complaint pursuant to 735 ILCS 5/2-615. In support thereof, Birk and
KGR state as follows:
INTRODUCTION
Plaintiffs attempt to hold real estate brokers, Birk and KGR, responsible for the poor rental
performance of their properties because certain information provided by the Sellers prior to
purchase was purportedly incorrect. However, Plaintiffs fail to allege any facts from which it can
be inferred that the brokers knew that any of their alleged statements were false. The facts alleged
in the Complaint reflect that Birk and KGR simply passed along information obtained from the
Sellers; Birk and KGR have no duty under Illinois law to independently corroborate
representations of the Sellers. Finally, Plaintiffs fail to allege any facts to support the existence of
the required nexus between Birk and KGR’s actions and consumer protection concerns necessary
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to support a cause of action under the Consumer Fraud Act. Therefore, Plaintiffs’ Complaint
should be dismissed pursuant to 735 ILCS 5/2-615.
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FACTS ALLEGED
Plaintiffs are purchasers and owners of certain real property located at 7500 South Shore
Drive, 7038 South Chappel Avenue, and 6916 South Clyde Avenue, all in Chicago, Illinois
(collectively, the “Properties”), which together consist of 208 residential units in the Jackson Park
neighborhood. (Compl. ¶¶ 1-3, 15). Plaintiffs allege that Birk, Aaron Sklar (“Sklar”), and KGR
(collectively, the “Kiser Defendants”) acted as real estate brokers and dual agents for the Sellers
and Plaintiffs with respect to the transaction. (Compl. ¶¶ 17-18, 20, 159).
The Complaint claims that KGR provided an offering memorandum (not attached as an
exhibit to the Complaint) for the sale of the Properties indicating that the Properties have been
completely renovated and equipped with new kitchens and new baths. (Compl. ¶ 17). Plaintiffs
allege that on September 11, 2019, Trinity Flood (“Flood”), who would later form the limited
liability companies that are Plaintiffs, reviewed the offering memorandum and contacted Birk and
Sklar, who were identified as the KGR brokers on the offering memorandum. (Compl. ¶¶ 19-20).
Plaintiffs allege that Birk and Sklar told Flood that the Properties were 98% occupied and had been
fully renovated. (Compl. ¶ 21).
Plaintiffs allege that on September 11-12, 2019, Sklar provided Flood with T-12 reports,
prepared by the Sellers, for the Properties through June and July 2019, which omitted certain
categories of expenses, underreported certain categories of expenses, and misrepresented income
in order to make the Properties more attractive to potential buyers. (Compl. ¶¶ 25-31, 35-42).
Plaintiffs allege that before Flood signed the Letter of Intent on September 17, 2019, Sklar
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informed Flood that utility expenses were extremely high at 7500 South Shore due to the recent
rehab and renovation work, which was not completed until Spring 2019. (Compl. ¶ 32, 43).
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On September 20, 2019, Flood visited the Properties but allegedly Birk and Sklar chose
two units in each of the Properties to show Flood. (Compl. ¶ 48). Plaintiffs allege that Birk and
Sklar discouraged Flood from viewing additional units and stated that it would be difficult to view
all of the units at the Properties because many of them were occupied by tenants. (Compl. ¶ 49).
Plaintiffs allege that Birk and Sklar told Flood that all of the units in the Properties were similar to
and had been renovated and rehabbed like the six units visited on September 20, 2019. (Compl.
¶¶ 50-51).
Plaintiffs also allege that Flood asked Birk and Sklar why the financial statements for the
Properties did not show legal costs for evictions and that Sklar told Flood that the management
company handles the evictions and that the costs are included in their fee. (Compl. ¶¶ 52-53).
Plaintiffs allege that on September 30, 2019, Birk and Sklar provided Flood with a spreadsheet, or
delinquency report, obtained from the Sellers, showing tenant delinquencies for the Properties,
omitting tenants with the status of “evict” and underreporting the total amount of delinquent rent
statements. (Compl. ¶¶ 55-62). On October 2, 2019, Flood purportedly formed each of the LLCs
that make up Plaintiffs. (Compl. ¶ 63). On October 10, 2019, Plaintiffs and the Sellers executed
a Purchase and Sale Agreement for the purchase and sale of the Properties. (Compl. ¶ 64, Exhibit
B).
On October 29, 2019, Plaintiffs allegedly requested a breakdown of all repair and
maintenance costs and sought confirmation that there were no additional payroll or labor expenses
that were not captured on the T-12 reports, or financial reports. (Compl. ¶ 73). Plaintiffs allege
that Sklar stated that there were no additional payroll/labor expenses, but that the Sellers never
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provided a breakdown of all repair and maintenance costs. (Compl. ¶¶ 74-75). Plaintiffs closed
their purchase of the Properties for $18,400,000 on January 8, 2020 (Compl. ¶ 90), three months
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after executing the Purchase and Sale Agreement and almost four months after sending the letter
of intent.
After the closing, Plaintiffs contend they discovered: (1) 21 of 130 units at 7500 South
Shore (which means 21 out to the total 208 units) had not been renovated; (2) the City of Chicago
Department of Public Health had issued a Notice of Lead Hazards at 7038 Chappel; (3) the Initial
and Second T-12 reports provided by the Sellers omitted certain categories of expenses and
misrepresented and inflated the income; (4) the delinquency report underreported overdue rent
payments by omitting tenants with the status of evict; (5) there were evictions pending at the time
of the closing; and (6) the Sellers failed to pay certain expenses for work performed on the
Properties prior to the closing. (Compl. ¶ 91).
Plaintiffs also allege that they learned after closing that Sklar’s statement about utility
expenses at 7500 South Shore was not true as the cost of the utilities was not unusually high due
to the rehab and renovation work, but rather the cost of the utilities on the Initial T-12 report was
significantly lower than the cost of the utilities in the period immediately after Plaintiffs’ purchase,
which was well after the rehab and renovation work was completed. (Compl. ¶ 33). Plaintiffs also
claim that they learned after closing that eviction costs were not included in the management
company’s fee. (Compl. ¶ 53).
Plaintiffs’ causes of action against Birk and KGR purportedly sound in: Count V for
common law fraud, Count VI for negligent misrepresentation, Count VII for violation of the
Consumer Fraud Act, and Count VIII for violation of the Real Estate License Act. (Compl. Counts
Six-Eight).
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LEGAL STANDARD
FILED DATE: 9/30/2020 3:28 PM 2020L007058
A section 2-615 motion attacks the legal sufficiency of the complaint, and an inquiry under
this section is limited to whether the allegations of the complaint are sufficient to state a cause of
action upon which relief can be granted. Shaper v. Bryan, 371 Ill. App. 3d 1079, 1086 (1st Dist.
2007). A complaint must allege facts setting forth the essential elements of the cause of action to
withstand a motion to dismiss under section 2-615. Id. A plaintiff cannot rely on conclusions of
law that are unsupported by factual allegations. Id.
ARGUMENT
I. Count Five for Fraud Should Be Dismissed Because Plaintiffs Fail to Allege Any Facts
from which It Can Be Inferred that the KGR Defendants Knew that Any of their
Alleged Statements Were False.
In order to state a cause of action for fraud, a plaintiff must allege the following elements:
(1) a false statement of material fact; (2) intentionally made; (3) the party to whom the statement
was made had a right to rely on it and, in fact, did rely on it; (4) the statement was made for the
purpose of inducing the other party to act; and (5) the party reasonably relied on the statement to
its detriment. Connor v. Merrill Lynch Realty, Inc., 220 Ill. App. 3d 522, 528 (1st Dist. 1991).
“The facts which constitute an alleged fraud must be pleaded with specificity and particularity
including ‘what misrepresentations were made, when they were made, who made the
misrepresentations and to whom they were made.’” Prime Leasing, Inc. v. Kendig, 332 Ill. App.
3d 300, 309 (1st Dist. 2002) (quoting People ex. rel. Peters v. Murphy-Knight, 248 Ill. App. 3d
382, 387 (1st Dist. 1993)).
In order to plead common law fraud, a plaintiff must allege that the defendants intentionally
made a false statement of material fact. Fox v. Heimann, 375 Ill. App. 3d 35, 47 (1st Dist. 2007).
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Thus, the defendants’ knowledge of the falsity of the statement, or deliberate concealment, is an
essential element of common law fraud. Id.
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In Addison v. Distinctive Homes, Ltd., 359 Ill. App. 3d 997, 1003 (1st Dist. 2005), the
Appellate Court of Illinois held that vague and conclusory assertions to the effect that the
defendants knew that a statement was false or knew a material fact was omitted are insufficient to
support the knowledge element for common law fraud or violation of the Consumer Fraud Act.
The case involved claims of common law fraud and violation of the Consumer Fraud Act by
homeowners against the developers of the homeowners’ subdevelopment. Id. at 998. The
homeowners alleged that the developers made specific representations to them that there were
plans to build a golf course adjacent to the subdevelopment even though the developers were aware
that the plans for the golf course had already been abandoned. Id. at 999. The court found that in
order to adequately plead fraud or violation of the Consumer Fraud Act, the homeowners had to
allege that the defendants knew that the plans for the golf course had been abandoned at the time
the alleged misrepresentations were made and the homeowners purchased their properties. Id. at
1003. The court concluded that the homeowners’ vague and conclusory assertions of fact were
insufficient to support the element of defendants’ knowing omission or concealment necessary to
assert claims for common law fraud or consumer fraud. Id.
Applying Addison, Plaintiffs fail to allege any facts from which it can be inferred that the
KGR Defendants knew that their alleged statements were false. In each count, Plaintiffs allege
that the KGR Defendants made the following false statements: (1) that all of the units in 7500
South Shore had been renovated (all KGR Defendants); (2) that the utility cost at 7500 South Shore
was high due to the rehab and renovations (Sklar and KGR); (3) that the Initial and Second T-12
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Reports captured all expenses (none of the KGR Defendants);1 and (4) that eviction cost is included
in WPD’s management fee (Sklar and KGR). (Compl. ¶¶ 17, 21, 32-33, 50-53, 74-75, 132, 140,
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150, 160).
Like the plaintiff purchasers in Addison, Plaintiffs here offer nothing but vague and
conclusory assertions that the KGR Defendants knew that any of their alleged statements were
false. (Compl. ¶ 133). Further, the actual facts alleged in the Complaint suggest that the KGR
Defendants believed their alleged statements to be true since the information was obtained directly
from the Sellers. (Compl. ¶¶ 25-26, 39-42, 55-62, 64-69, 76-79). Specifically, Plaintiffs allege
that the Sellers generated and provided the T-12 reports, financial statements, delinquency report,
rent rolls, and property condition report, which contained the information that the KGR Defendants
allegedly relayed. (Compl. ¶¶ 25-26, 39-42, 55-62, 64-69, 76-77). Just as in Addison, Plaintiffs’
vague and conclusory allegations as to the KGR Defendants’ knowledge of the falsity of their
alleged statements are insufficient to assert a claim for fraud. Therefore, Count Five should be
dismissed pursuant to 735 ILCS 5/2-615 for failure to state a claim upon which relief can be
granted.
II. Count Six for Negligent Misrepresentation Should Be Dismissed Because Plaintiffs
Fail to Allege Any Facts from which It Can Be Inferred that the KGR Defendants
Were Aware that Any of their Alleged Statements Were False and the KGR
Defendants Have No Duty to Independently Corroborate the Representations of the
Sellers.
In order to plead a cause of action for negligent misrepresentation, a plaintiff must allege:
“(1) a false statement of material fact, (2) carelessness or negligence in ascertaining the truth of
the statement by the party making it, (3) an intention to induce the other party to act, (4) action by
1
The more detailed allegations in the “Facts” section indicate only that Sklar stated that there were no additional
payroll/labor expenses that were not captured on the financial statements. (Compl. ¶¶ 73-74). Plaintiffs improperly
conclude in the individual counts that the KGR Defendants made this statement but fail to support that factually with
the specificity required for a fraud or misrepresentation count.
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the other party in reliance on the truth of the statement, and (5) damage to the other party resulting
from such reliance, (6) when the party making the statement is under a duty to communicate
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accurate information.” First Midwest Bank, N.A. v. Stewart Title Guar. Co., 218 Ill. 2d 326, 334-
35 (2006).
In Lyons v. Christ Episcopal Church, 71 Ill. App. 3d, 257, 259-60 (5th Dist. 1979), the
Appellate Court of Illinois held that a real estate broker has no duty to independently corroborate
the representations of a real estate seller. The case involved a claim of negligent misrepresentation
by plaintiff purchasers of a residence against the defendant seller’s broker. Id. at 258. After being
told by the seller that the residence was connected to the city sanitary sewer system, the broker
advertised the residence as connected to the sewer system, and another broker told the plaintiff
purchasers that the residence was connected to the sewer system. Id. at 258-59. After purchase,
the plaintiff purchasers discovered that the residence was not connected to the sewer system, but
instead utilized a septic tank. Id. at 259. The court found that the real estate broker could not be
held liable where he simply acted as a conduit to pass on the seller’s inaccurate representation that
the residence was connected to the city sewer system, and concluded that a real estate broker has
no duty to corroborate the representation of a seller. Id. at 259-60.
Applying Lyons, Plaintiffs fail to allege any facts from which it can be inferred that the
KGR Defendants were careless or should have known that their alleged statements were false. As
explained above in Part I, Plaintiffs fail to allege any facts from which it can be inferred that the
KGR Defendants knew that their alleged statements were false. Further, the actual facts alleged
in the Complaint reflect that the KGR Defendants received from the Sellers the information that
they passed along to Plaintiffs. Further, there is no duty to corroborate or confirm the seller’s
representation. Id.
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Specifically, Plaintiffs allege that the Sellers generated and provided the T-12 reports, or
financial statements, delinquency report, rent rolls, and property condition report. (Compl. ¶¶ 25-
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26, 39-42, 55-62, 64-69, 76-77). Accordingly, the KGR Defendants simply obtained the
information from the Sellers and passed same along to Plaintiffs. For example, the property
condition report provided to Plaintiffs by the Sellers stated that all of units at 7500 South Shore
were renovated. (Compl. ¶¶ 76-77). Thus, it can be inferred that the Sellers provided the KGR
Defendants with the same information, which the KGR Defendants relayed to Plaintiffs. Like the
broker in Lyons, the KGR Defendants acted as a conduit passing information from the Sellers to
Plaintiffs and had no duty to independently corroborate same. Therefore, Count Six should be
dismissed pursuant to 735 ILCS 5/2-615 for failure to state a claim upon which relief can be
granted.
III. Count Seven for Violation of the Consumer Fraud Act Should Be Dismissed Because
Plaintiffs Fail to Allege Any Facts from which It Can Be Inferred that the KGR Defendants
Knew that Any of their Alleged Statements Were False and Plaintiffs Fail to Allege the
Required Nexus between the KGR Defendants’ Actions and Consumer Protection Concerns.
A. Plaintiffs fail to allege facts from which it can be inferred that the KGR
Defendants knew that any of their alleged statements were false.
In order to plead a private cause of action under the Consumer Fraud Act, a plaintiff must
allege: (1) a deceptive act or practice by the defendant; (2) defendant’s intent that the plaintiff rely
on the deception; (3) the occurrence of the deception in the course of conduct involving trade or
commerce; and (4) actual damage to the plaintiff (5) proximately caused by the deception. Avery
v. State Farm Mut. Auto Ins. Co., 216 Ill. 2d 100, 180 (2005). Actions asserted under the Consumer
Fraud Act must be pled with the same specificity and particularity required of common law fraud,
including what misrepresentations were made, when they were made, who made the
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representations, and to whom they were made. Persona v. Volkswagen of Am., Inc., 292 Ill. App.
3d 59, 65 (1st Dist. 1997).
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The Consumer Fraud Act adds an additional element for cases against real estate salesmen
and brokers. It reads: “Nothing in this Act shall apply to any of the following: […] The
communication of any false, misleading or deceptive information, provided by the seller of real
estate located in Illinois, by a real estate salesman or broker […] unless the salesman or broker
knows of the false, misleading or deceptive character of such information.” 815 ILCS 505/10b
(2020). Thus, a plaintiff must also allege that the broker “knows of the false, misleading or
deceptive character of such information.” Connor, 220 Ill. App. 3d at 530-31. The Consumer
Fraud Act was not intended to impose liability upon a broker for latent defects and “should not be
used to turn nondeceptive or nonfraudulent statements or omissions into actionable affirmations.”
Id. at 531.
Applying the above statutory and case law and as explained in Part I, Plaintiffs fail to
allege any facts from which it can be inferred that the KGR Defendants knew that their alleged
statements were false. Further, the KGR Defendants simply obtained from the Sellers the
information that they passed along. Specifically, Plaintiffs allege that the Sellers generated and
provided the T-12 reports, or financial statements, delinquency report, rent rolls, and property
condition report. (Compl. ¶¶ 25-26, 39-42, 55-62, 64-69, 76-77). Accordingly, the KGR
Defendants simply obtained the information relative thereto from the Sellers and passed same
along to Plaintiffs. This is the exact scenario that the legislature intended to exclude from
prosecution under the Consumer Fraud Act in 815 ILCS 505/10b(4). Therefore, Count Seven
should be dismissed pursuant to 735 ILCS 5/2-615 for failure to state a claim upon which relief
can be granted.
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B. Plaintiffs fail to allege the required nexus between the KGR Defendants’ actions
and consumer protection concerns.
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Under the Consumer Fraud Act, “consumer” is defined as “any person who purchases or
contracts for the purchase of merchandise not for resale in ordinary course of his business but for
his use or that of a member of his household.” 815 ILCS 505/1(e).2 While recovery under the
Consumer Fraud Act is not necessarily limited to consumers, recovery for non-consumers is
limited to situations where the alleged conduct implicates consumer protection concerns. Lake
County Grading Co. v. Advance Mech. Contractors, Inc., 275 Ill. App. 3d 452, 458 (2d Dist. 1995).
Therefore, the Consumer Fraud Act does not apply to every commercial transaction regardless of
the relationship between the parties. Brody v. Finch Univ. of Health Sciences/The Chicago Med.
Sch., 298 Ill. App. 3d 146, 159 (2d Dist. 1998); Lake County Grading, 275 Ill. App. 3d at 459.
When the complaint does not implicate consumer protection concerns on its face or is based
on breach of a contractual relationship between the parties (like the case at bar), the plaintiff must
establish some nexus between the complained-of conduct and consumer protection concerns. See
Brody, 298 Ill. App. 3d at 160; see also Lake County Grading, 275 Ill. App. 3d at 459-60. A
plaintiff must show that: (1) its actions were similar to a consumer’s actions to establish a link
between it and consumers; (2) how the defendant’s actions concern other consumers; (3) how the
defendant’s breach involved consumer protection concerns; and (4) how the requested relief would
serve the interests of other consumers. Brody, 298 Ill. App. 3d at 160. The sophisticated LLC
plaintiffs in our case do not even try to allege these supporting facts in the Complaint.
In Lake County Grading Co. v. Advance Mechanical Contractors, Inc., 275 Ill. App. 3d at
460, the Appellate Court of Illinois found that there was no inherent consumer interest in a
2
“Merchandise” is defined in the Act to include ”any objects, wares, goods, commodities, intangibles, real estate
situated outside the State of Illinois, or services.” 815 ILCS 505/1(b). (emphasis added).
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construction contract between a general contractor and a subcontractor. In First Magnus Financial
Corp. v. Dobrowski, 387 F. Supp. 2d 786, 794 (N.D. Ill. 2005), the court, applying Illinois law,
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found that a mortgage company was not a consumer of a title company’s services where it resold
the loan and the title insurance to a secondary mortgage company, and that there was no nexus
between the title company’s actions and injury to consumers.
Applying Lake County and First Magnus, Plaintiffs do not allege the required nexus
between the KGR Defendants and consumer protection concerns. As a matter of law, Plaintiffs
are not consumers – they are limited liability companies formed to purchase the commercial
Properties and lease the units at the Properties to tenants. (Compl. ¶¶ 1-3, 15, 43, 63-64, Exhibits
A & B). While purchasers of real estate can bring claims under the Consumer Fraud Act if they
are not consumers, the purchasers must establish that required consumer nexus. Lake County, 275
Ill. App. 3d at 458; see Breeze v. Bayco Products, Inc., Case No. 3:19-CV-00848-NJR, 2020 U.S.
Dist. LEXIS 135098, *10-11 (S.D. Ill. July 30, 2020) (applying Illinois law) (finding that to have
standing to bring a claim under the Consumer Fraud Act, a plaintiff must either be a consumer or
satisfy the consumer nexus test); see also Kmak v. Sorin Group Deutschland GmBH, Case No. 17
CV 4759, 2017 U.S. Dist. LEXIS 203939, *21 (N.D. Ill. Dec. 12, 2017) (applying Illinois law)
(finding that a non-consumer plaintiff must allege conduct that implicates consumer protection
concerns).
Plaintiffs’ actions are not similar to that of other consumers because Plaintiffs did not
intend to utilize the units in the Properties themselves, but instead intend to lease out units to others.
(Compl. ¶¶ 1-3, 15, 43, 63-64, Exhibits A & B). The KGR Defendants’ conduct does not concern
consumers because it involves an offer to sell multi-unit apartment buildings to sophisticated,
commercial investors, such as Plaintiffs, and not individual units to would-be homebuyers.
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(Compl. ¶¶ 15-17). Plaintiffs’ requested relief of monetary damages would not benefit any
consumers. (Compl. Count Seven wherefore clause); see Kmak v, 2017 U.S. Dist. LEXIS 203939
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at *21 (finding that it is not clear how a request for monetary damages would serve the interests
of consumers). As Plaintiffs do not allege the required consumer nexus, Count Seven should be
dismissed pursuant to 735 ILCS 5/2-615 for failure to state a claim upon which relief can be
granted.
IV. Count Eight for Violation of the Real Estate License Act Should Be Dismissed Because
Plaintiffs Fail to Allege Any Facts from which It Can Be Inferred that the KGR
Defendants Knew that Any of their Alleged Statements Were False and the KGR
Defendants Have No Duty to Independently Corroborate the Representations of the
Sellers.
The Real Estate License Act of 2000 states, as is pertinent here:
(a) A licensee representing a client shall:
* * *
(2) Promote the best interest of the client by:
* * *
(C) Disclosing to the client material facts concerning the transaction of
which the licensee has actual knowledge, unless that information is
confidential information […]
* * *
(d) A licensee shall not be liable to a client for providing false information to the
client if the false information was provided to the licensee by the customer unless
the licensee knew or should have known the information was false.
225 ILCS 454/15-15 (2020).
The purpose of the provision of the Real Estate License Act providing for a private cause
of action is, at least in part, to codify “the relationships between licensees under this Act and
consumers of real estate brokerage services.” 225 ILCS 454/15-5(a). Therefore, the statute is
simply meant to codify traditional common law theories of liability, making the law as to those
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theories of liability particularly relevant. Under well-established Illinois law, a real estate broker
has no duty to independently corroborate the representations of a seller. Lyons, 71 Ill. App. 3d at
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259-60.
Plaintiffs fail to allege any facts from which it can be inferred that the KGR Defendants
knew that their alleged statements were false. Plaintiffs fail to allege that the KGR Defendants did
not disclose any material facts concerning the subject transaction of which they had actual
knowledge – this is required to establish liability under Section 15-15(a) of the Act. Plaintiffs only
offer vague and conclusory assertions that the KGR Defendants knew that any of their alleged
statements were false. (Compl. ¶ 133). Further, the actual facts alleged in the Complaint suggest
that the KGR Defendants believed their alleged statements to be true since the information was
obtained directly from the Sellers. (Compl. ¶¶ 25-26, 39-42, 55-62, 64-69, 76-79).
Plaintiffs also fail to allege that the KGR Defendants should have known that their
statements were false as the KGR Defendants have no duty to independently corroborate the
representation of the Sellers. Thus, Plaintiffs fail to overcome the exception from liability stated
in Section 15-15(d) of the Act. As explained above in Parts II-III, the KGR Defendants simply
obtained the subject information from the Sellers and passed same along to Plaintiffs. Specifically,
Plaintiffs allege that the Sellers generated and provided the T-12 reports, or financial statements,
delinquency report, rent rolls, and property condition report, which contained much of the
information that the KGR Defendants allegedly relayed. (Compl. ¶¶ 25-26, 39-42, 55-62, 64-69,
76-77). The KGR Defendants obtained the information relative to those documents from the
Sellers and passed same along to Plaintiffs.
Plaintiffs’ conclusory and contradictory allegations, made on information and belief, that
the KGR Defendants made false representations on their own accord without direction from the
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Sellers (Compl. ¶ 161) is not sufficient to suggest that the KGR Defendants knew that their
statements were false. And it certainly cannot overcome their more specific factual allegations
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establishing that the Sellers are the source of the information that the KGR Defendants relayed to
Plaintiffs. (Compl. ¶¶ 25-26, 39-42, 55-62, 64-69, 76-77). Therefore, Count Eight should be
dismissed pursuant to 735 ILCS 5/2-615 for failure to state a claim upon which relief can be
granted.
WHEREFORE Defendants, Noah Birk and Kiser Group Realty, Inc., ask this Court to enter
an order dismissing Plaintiffs’ Complaint pursuant to 735 ILCS 5/2-615, with prejudice, and by a
final and appealable order pursuant to Supreme Court Rule 304(a), with an express finding there
is no just reason for delaying either enforcement or appeal of its order and for any other relief this
Court deems appropriate.
Respectfully submitted,
KARBAL | COHEN | ECONOMOU | SILK | DUNNE | LLC
By: /s/ Sarah A. Johnson
One of the Attorneys for Defendants
NOAH BIRK AND KISER GROUP REALTY, INC.
NEWTON C. MARSHALL
SARAH A. JOHNSON
KARBAL COHEN ECONOMOU SILK DUNNE, LLC
150 S. Wacker Drive, Suite 1700
Chicago, Illinois 60606
Tel: (312) 431-3700
nmarshall@karballaw.com
sjohnson@karballaw.com
Firm No. 38100