Fed. Dist Court in IL Dismisses Claims Arising From Alleged Inducement of Alderman Through a Company’s Campaign Contribution

This post was authored by Matthew Loescher, Esq.

Pittsfield Development, LLC purchased a historic building, and later entered into a contract to sell their properties in the building for $36,000,000 to Adam David Partners I, LLC, which was owned by Lynd and organized for this purpose. The parties failed to close on the contract, and Partners forfeited a deposit to the Plaintiffs. Partners then filed a complaint against Plaintiffs in the Circuit Court of Cook County and filed a lis pendens against the roperties, creating a cloud on title. The Circuit Court dismissed four counts of the complaint with prejudice, and Partners voluntarily dismissed the remaining counts.

On December 22, 2015, Lynd’s company made a $1,500 campaign contribution to Alderman Reilly. Three days later, Lynd’s attorney corresponded with Lynd regarding a possible zoning change, including whether there was “anything the Alderman can do to stop someone from converting floors 2–9 to a hotel.” Shortly following this, Alderman Reilly publicly expressed that he would oppose a hotel in the building. Alderman Reilly wrote a letter to the Chairman of the Committee on Zoning, Landmarks and Building Structures, stating that he “introduced this ordinance as a temporary measure to halt a building program that I believe is incompatible with this landmark structure.” According to plaintiffs, DR-10 zoning restricted the number of allowed residential units in the Building in a manner that prevented new construction. Additionally, DR-10 zoning prohibited hotel use, effectively revoking the hotel permit. Plaintiffs assert Illinois common-law claims for “intentional interference with prospective contractual relationships” and “intentional interference with contractual relationship,” and “willful and malicious injury to property.”

 Lynd contended that Plaintiffs’ allegations did not plausibly suggest a “reasonable expectation” of entering any valid business relationships with any third party. Conversely, Plaintiffs claimed that Lynd took steps to induce Alderman Reilly and the Chicago City Council to enact the Downsizing Ordinance and that Lynd caused Partners to file a frivolous lawsuit against the Plaintiffs and a lis pendens against the properties. The court rejected this claim, however, as the Amended Complaint did not suggest that Lynd took action directed towards third party business partners.

 Plaintiffs next made an Illinois common-law claim for “intentional interference with contractual relationship.” This claim was centered around an agreement plaintiffs allegedly had with Chicago Hotel Partners (“CHP”), a hotel operator, to purchase an interest the hotel. While plaintiffs alleged that Lynd donated $1,500 to Reilly through the Lynd Company, and that Lynd’s attorney corresponded with Lynd about possible action from Alderman Reilly about the Building’s zoning, plaintiffs did not specify whether Lynd actively persuaded Alderman Reilly to take action to downzone the Building. The record reflected that Alderman Reilly’s letter in support of the ordinance simply stated that “potential buyers…sought my counsel on what uses I considered compatible.” Thus, plaintiffs’ claim for intentional interference with contractual relationship was dismissed. Since plaintiffs did not allege any civil wrongs that could support this claim, plaintiffs’ claim for willful and malicious injury to property was also dismissed.

Pittsfield Development, LLC v Adam David Lynd, 2020 WL 6701104 (ND IL 11/13/2020)