Opinion
Case No. 98 C 2170
October 15, 2001
Samuel D. Brooks, [NTC], United States Attorney's Office, Chicago, IL., Karen A. Smith, [COR], Douglas W. Snoeyenbos, [COR NTC], United States Department of Justice, Tax Division, Washington, DC., Christine A. Grant, [COR LD NTC], United States Department of Justice, Washington, DC., for United States of America plaintiff.
Michael J. O'Rourke, [COR LD NTC A], Michael C. Moody, [COR], Andrew Neal Levine, [COR], Brian Michael Dougherty, [COR], O'Rourke, McCloskey Moody, Chicago, IL., Jeffrey P. White [COR LD NTC A], Attorney at Law, Barrington Il., for Myles Olsen, Jr., and Joan Olsen defendants.
Carroll Margaret Cullinan, [COR LD NTC A], Chicago Title Insurance Company, Chicago, Il., Louis Robert Schroeder, [COR LD NTC A], Attorney at Law, Chicago, Il., for Chicago Title and Trust Company, as Trustee under the Provisions of a Trust Agreement dated the 10th day of July 1992, and known as Trust # 1072725 defendant.
Louis Robert Schroeder, [COR LD NTC A], Attorney at Law, Chicago, IL., for Marengo State Bank defendant.
Louis Robert Schroeder, [COR LD NTC A], James Alan Roth, [COR], Attorneys at Law, Chicago, IL., for Supreme Finance Corporation defendant.
John Lawrence Conlon, [COR LD NTC A], Schwartz, Cooper, Greenberg Krauss, Chicago, IL., Chicago, IL., for O'Rourke, McCloskey and Moody defendant.
Richard Alan Wohlleber, [COR LD NTC A], Stacey Lee Prange, [COR], Joanna C. Kitto, Chapman Cutler, Chicago, IL., for Harris Bank Marengo movant.
Louis Robert Schroeder, [COR LD NTC A], Attorney at Law, Chicago, IL., for Marengo State Bank counter-claimant.
Samuel D. Brooks, [NTC], United States Attorney's Office, Chicago, IL., for Olsen Woodworking, Myles S. Olsen, Jr., Joan R. Olsen, Chicago Title and Trust Company, as Trustee under the Provisions of a Trust Agreement dated the 10th day of July, 1992, and known as Trust #1072725, Door Experts, a Division of Advanced Lock Systems, Inc., and United States of America, Door Systems, Inc. Fox Valley Fire and Safety Co., Security First National Bank of Sheboygan, Michael Alan Lewis Co., Inc., Unknown Owners and Non-Record Claimants, counter-defendants.
MEMORANDUM OPINION AND ORDER
Defendant, O'Rourke McCloskey Moody, brings this Motion to Dismiss Plaintiff's Amended and Supplemented Complaint pro se for (1) failure to join all necessary parties pursuant to Rule 19 and (2) failure to state a claim upon which relief can be granted with regard to Plaintiff's tortious conversion claim, Count IV, pursuant to Rule 12(b)(6).
BACKGROUND
This interlocutory motion stems from the United States' action through the Internal Revenue Service ("IRS") to (1) seek monetary judgement against Myles Olsen, Jr. for unpaid federal tax assessments; (2) foreclose liens that arose with assessments against the real property at 17816 W. Washington Street in Union, Land Title Company as trustee; (3) seek judgement against the Chicago Land Title Company for failure to honor the levy; and (4) seek judgements against Chicago Land Title Company, Supreme Finance Corporation, the Madison Corporation, and O'Rourke, McCloskey Moody for tortious conversion of property subject to those federal tax liens.
Specifically, O'Rourke McCloskey Moody's Motion to Dismiss pertains to Defendant Joan Olsen's April 13, 2001, refinancing of the Union Property by Supreme Finance Corporation. Defendant cites too both a procedural and substantive flaw to Plaintiff's Amended and Supplemented Complaint. Defendant contends that Plaintiff's failure to join all necessary parties to the Supreme Finance Corporation's refinancing, namely Harris Bank of Marengo, violates Rule 19 of the Federal Rules of Civil Procedure. Substantively, Defendant avers that Plaintiff's claim of tortious conversion fails because the IRS did not attain the status of a true owner or title holder of the Union property, but rather attained the status of a mere lien claimant.
The United States also cites both a procedural and substantive flaws in Defendant's motion to dismiss. Procedurally, the United States questions Defendant's pro se status. As a partnership, the United States charges that Defendant O'Rourke McCloskey Moody must be represented by counsel. Substantively, Plaintiff asserts that a Rule 12(b)(6) motion can only be dismissed upon showing beyond doubt that the Plaintiff's tortious conversion claim cannot be proven by any facts consistent with the allegations of the pleading that would entitle them to relief. See Hishon v. King Spalding, 467 U.S. 69, 173 (1984), (citing Conley v. Gibson, 355 U.S. 45, 45-46 (1957)).
When Defendant's motion to dismiss was presented on June 27, 2001, this Court denied it, sua sponte, to the extent that it was based on a claim of failure to join all necessary parties, but left open the discussion of count IV of tortious conversion.
DISCUSSION
This motion is complicated by the fact that issues and parties are intertwined where they might not be appropriately linked. Thus, the court will first rule upon the procedural questions, then separate the substantive issues.
Procedural Issue
Procedurally, Defendant first argues that the Amended and Supplemented Complaint should be stricken for failure to join all necessary parties in dispute to the Supreme Finance Corporation's refinancing. It is undisputed that on June 27, 2001, this Court denied, sua sponte, the procedural portion of Defendant's motion to dismiss for failure to join all necessary parties.
Second, Plaintiff argues that Defendant O'Rourke McCloskey Moody's partnership is procedurally improper due to their pro se status, thus Defendant's motion to dismiss should be stricken.
Section 1654 of Title 28 establishes the legal standard in determining pro se litigants, "In all courts of the United States the parties may plead and conduct their own cases personally or by counsel as, by the rules of such courts, respectively, are permitted to manage and conduct causes therein." Thus, two types of representation have been interpreted by this statute, "that by an attorney admitted to practice law . . . and that by a person representing himself." See Eagle Associates v. Bank of Montreal 926 F.2d 1305, 1308 (2nd Cir. 1991) (citing Turner v. American Bar Ass'n., 407 F. Supp. 451, 477 (N.D.Tex. 1975)). The Seventh Circuit confirmed the standard for this court in First Amendment Foundation v. Vill. of Brookfield, et al, 575 F. Supp. 1207 (1983) where the court held, "Corporations must be represented in court by attorneys admitted to practice, . . . [It also] applies to partnerships and other unincorporated organizations."
Here, Defendant O'Rourke McCloskey Moody is a legal partnership, where Defendant O'Rourke is an individually licensed attorney admitted to practice law within the Northern District of Illinois. Thus, as a recognized member of this court, Defendant O'Rourke McLoskey Moody may proceed pro se.
Substantive Issue
Ironically, while Defendant argues Plaintiff failed to joint all parties, it is unclear whether the Defendant claims that Plaintiff's Count IV for tortious conversion should be dismissed individually or against the collective defendants to Supreme Finance Corporation's refinancing. Assuming Defendant represents itself and Defendants Myles and Joan Olsen, Defendants contend that pursuant to Rule 12(b)(6), the United States cannot establish the necessary elements of conversion, namely the IRS' ownership of the Union property and the Defendants' intent to exercise dominion and control adverse to the owner.
The legal standard required to adjudicate Rule 12(b)(6) motions to dismiss calls into question whether the Plaintiff has properly stated a claim for which relief may be granted. See Bills by Bills Consol. Sch. Dist. No. 33-C, 959 F. Supp. 507, 511 (citing Triad Assocs., Inc. v. Chicago Hous. Auth., 892 F.2d 583, 586 (7th Cir. 1989)); Kubistal v. Hirsch et al, 1999 WL 90625 (N.D. Ill.). Well-pled allegations of a complaint must be accepted as true, and ambiguities in the complaint must be construed in favor of the nonmoving party. See Lachmund v. ADM Investor Services, Inc., 191 F.3d 777, 782 (7th Cir. 1999); Kelley v. Crosfield Catalysts, 135 F.3d 1202, 1205 (7th Cir. 1998). However, the court is not bound by the Plaintiff's legal characterizations of the facts, nor required to ignore facts set forth in the complaint that undermine the Plaintiff's claims. See Kubistal (citing Scott v. O'Grady, 975 F.2d 366, 368 (7th Cir. 1992), cert. denied, 508 U.S. 942 (1993)). The court can only properly dismiss a motion for failure to state a claim if it appears beyond doubt that the plaintiff cannot support the allegations which would entitle him to relief. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102 (1957)
Plaintiff asserts that Defendants' tortious conversion claim is flawed, as the IRS's allegations call into question the central tenet of where and when the federal tax liens attached to the Union property and Defendant Olsen's alleged nominees. See U.S. v. Mathews, 224 F.2d 626 (9th Cir. 1957). Based upon the underlying assumption of Plaintiff's Amended and Supplemented Complaint, the IRS contends that Chicago Title served as Defendant Myles Olsen's nominee, where the federal tax lien followed the record title from the Union property and attached to Defendant Joan Olsen's beneficiary interest under the land trust instrument. See U.S. v. State of New York, 1987 WE 9392 (W.D.N.Y. 1987); U.S. v. Paladin, 539 F. Supp. 100 (W.D.N.Y. 1982). As such, the April 13, 2001, Supreme Finance Corporation's refinancing disbursed funds to which the IRS retained a valid priority interest and right to conversion of its lien before any other junior interests. See Phelps v. U.S., 421 U.S. 330 (1975).
While the United States avers its priority rights, so too does Defendant O'Rourke McCloskey Moody. In essence, the issue pairs to one of priority. Here, though, the case is mired by the Defendants' collective grouping. Again, it is unclear whether Defendants argue Plaintiff's failed tortious conversion claim either individually against their firm or in conjunction with Defendants Myles and Joan Olsen. The court notes that if Defendants did argue the instant motion collectively, the failed tortious conversion claim retains special effects on the super priority interests of attorneys fees, as opposed to other interests. See Fritschler, Pellino, Schrank Rosen, S.C. v. U.S., 716 F. Supp. 1157 (E.D.Wis. 1988); Brightwell v. U.S., 805 F. Supp. 1464 (S.D.Ind. 1992). However, this issue is not currently before this court.
As such, the issue of whether the tax lien's attachment, priority and conversion remain uncertain; therefore, the questions of fact as to Defendants O'Rourke McCloskey Moody and Defendants Myles and Joan Olsen are still open for debate. In order to survive a motion to dismiss, Defendants must prove that Plaintiff fails beyond doubt to prove any set of facts consistent with its pleadings that would entitle it to relief. Thus, Defendant's motions to dismiss is denied both procedurally and substantively. While procedurally allowed to argue pro se, Defendants' motion to dismiss for failure to join all necessary parties pursuant to Rule 19 is denied. In addition, substantively, Defendants motion to dismiss for failure to state a claim regarding Plaintiff's tortious conversion complaint pursuant to Rule 12(b)(6) is denied.
CONCLUSION
Therefore, for the foregoing reasons, the Defendants' Motion to Dismiss pursuant to Rule 19 for failure to join all necessary parties is DENIED. Defendants' Motion to Dismiss pursuant to Rule 12(b)(6) of Plaintiff's tortious conversion complaint, Count IV, is also DENIED.
IT IS SO ORDERED.