                               In the

    United States Court of Appeals
                 For the Seventh Circuit
No. 14-2990

RESERVE HOTELS PTY LIMITED, et al.,
                                                Plaintiffs-Appellants,

                                  v.


THEODORE MAVRAKIS,
                                                 Defendant-Appellee.

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
         No. 1:13-cv-07475— Harry D. Leinenweber, Judge.


       ARGUED MAY 19, 2015 — DECIDED JUNE 23, 2015


   Before POSNER, EASTERBROOK, and MANION, Circuit Judges.
    MANION, Circuit Judge. Nicolas Balagiannis and his com-
pany, Reserve Hotel PTY Limited, sued Theodore Mavrakis in
the district court and in Greece for breach of contract arising
from a failed business venture involving a casino. When
Balagiannis failed to confirm his compliance with the terms of
the settlement agreement, Mavrakis ceased making payments
under the agreement, so Balagiannis sued to enforce it. The
district court dismissed the suit for failure to state a claim. We
affirm.
2                                                   No. 14-2990

                        I. Background
     In the aftermath of a casino investment venture gone awry,
Balagiannis and Mavrakis entered into a settlement agreement.
Under the agreement, Mavrakis would pay Balagiannis $1.225
million; in exchange, Balagiannis would dismiss pending
litigation in the district court with prejudice and “withdraw the
Complaint he ha[d] filed against Mavrakis” in the Greek legal
system no later than September 28, 2012. Mavrakis made three
of five agreed payments, and in March 2012, Balagiannis sent
a three-page letter to a district attorney in Athens. The letter
did not expressly or generally reference withdrawal of the
complaint against Mavrakis. Instead, it only requested
“completion of the ongoing preliminary investigation.” After
Balagiannis refused to confirm that he had withdrawn the
Greek complaint, Mavrakis declined to make the final two
payments amounting to $925,000. In October 2013, Balagiannis
filed this suit alleging that Mavrakis breached the settlement
agreement. Mavrakis moved to dismiss on grounds that
Balagiannis failed to allege that he had satisfied his own
obligation to withdraw the Greek complaint. Three months
later (and nineteen months after the September 28, 2012, date
that withdrawal of the complaint was required under the
settlement agreement), Balagiannis filed a declaration with the
district court (dated March 4, 2014, and filed in Greece), which
may (or may not) have withdrawn the complaint in Greece.
The district court held that Balagiannis failed to allege plausi-
bly his compliance with the settlement agreement, and dis-
missed the suit. Balagiannis timely appealed.
No. 14-2990                                                     3

                            II. Analysis
    We will treat the district court’s order as a judgment on the
pleadings, which we review de novo. Northern Indiana Gun &
Outdoor Shows, Inc. v. City of South Bend, 163 F.3d 449, 452 (7th
Cir. 1998). Because settlement agreements are contracts, we
look to state law for the rule of decision. Newkirk v. Village of
Steger, 536 F.3d 771, 774 (7th Cir. 2008).
A. Plausibility
Under Illinois law, a “party cannot sue for breach of contract
without alleging … that he has himself substantially complied
with all the material terms of the agreement.” George F. Mueller
& Sons, Inc. v. N. Ill. Gas Co., 336 N.E.2d 185, 189 (Ill. App.
1975). Balagiannis argues that he substantially performed the
terms of the settlement agreement because he did all that he
could do to implement them. He points out that he dismissed
the suit pending in the district court (over which there is no
disagreement) but concedes that he was unable to provide
assurance to Mavrakis that the Greek complaint was dismissed
because the Greek legal system is inquisitorial (a critical fact
here because it means that Greek authorities have no obligation
to dismiss Balagiannis’s suit, even if he sought to do so).
Building on his concession, he contends that Mavrakis has not
suffered any injury because he has not been subjected to any
criminal or civil liability by any Greek court. For these reasons,
Balagiannis argues that he has provided substantial perfor-
mance under the settlement agreement and that Mavrakis
should be required to continue making payments consistent
with its terms.
There are two distinct problems with Balagiannis’s argument.
First, here at the pleadings stage, the issue is not whether
Balagiannis substantially performed, but whether he has
4                                                      No. 14-2990

pleaded substantial performance. The Supreme Court’s
decisions in “Iqbal and Twombly hold that a complaint must be
dismissed unless it contains a plausible claim.” Bank of America,
N.A. v. Knight, 725 F.3d 815, 818 (7th Cir. 2013). The district
court concluded that Balagiannis failed to allege plausibly that
he performed both conditions of the settlement agreement that
were preconditions to its enforcement. Balagiannis v. Mavrakis,
2014 WL 3889064, at *2 (N.D. Ill., Aug. 8, 2014) (referring to the
allegations in Balagiannis’s complaint as “utterly implausible”).
The only allegation in Balagiannis’s complaint that concerns
performance of his obligation to withdraw the Greek complaint
is found at ¶ 30 and states that
    at the time the Settlement Agreement was signed, Mr.
    Balagiannis believed that he had requested that the Com-
    plaint against Mavrakis and his wife in Greece be with-
    drawn and that this in fact had occurred.
Notably, Balagiannis has not pleaded that he made an actual
request to withdraw the complaint, but merely that he believed
that he had done so. This distinction is key. One’s beliefs about
his performance in a commercial dispute are not the same as
one’s allegations about his actual performance. Rule 8 requires
a “short and plain statement of the claim showing that the
pleader is entitled to relief”—it does not sanction a statement
that the pleader believes himself entitled to relief. The civil rules
required Balagiannis to plead that he took some discrete action
to withdraw his complaint in Greece. He did not do so. The
consequence of Balagiannis’s failure to assert that he withdrew
the Greek complaint is that he failed to assert a plausible claim.
No. 14-2990                                                   5

B. Substantial performance
We conclude that Balagiannis failed to allege plausibly that he
performed under the settlement agreement. This reason is
wholly sufficient to affirm the district court. However, for the
sake of completeness, we also address his substantial perfor-
mance argument. Notwithstanding Balagiannis’s defective
pleading, he argues that he substantially performed here
because: 1) the agreement calls for him to satisfy a pair of
conditions; 2) he satisfied the first condition; and 3) he later
learned that the second condition was beyond his control
because the Greek legal system is inquisitorial.
So did Balagiannis substantially perform under the terms of
the settlement agreement? Balagiannis contends so, but our
colleague in dissent is more circumspect—his principal
contention is not that Balagiannis should win, but that dis-
missal was premature. We respectfully disagree.
A party’s enforcement action fails unless the would-be enforcer
has first satisfied his obligations under the agreement. W.E.
Erickson Constr., Inc., v. Congress-Kenilworth Corp., 503 N.E.2d
233, 236–37 (Ill. 1986) (Under the doctrine of substantial
performance, “all the essential elements necessary to the
accomplishment of the purpose of the contract” must be
alleged and proven). Based on the papers filed in this case, we
know the following about Balagiannis’s efforts towards his
underlying obligations: we know that the settlement agree-
ment required Balagiannis to withdraw his complaint against
Mavrakis, and we know that he failed to do so because the
three-page letter Balagiannis’s lawyer sent to Greek authorities
before September 28, 2012, does not mention withdrawal or
any analogous mechanism that eliminates Mavrakis from the
proceeding. See Doc. 26-3. Finally, we know that the belated
6                                                      No. 14-2990

March 4, 2014, declaration Balagiannis filed with the district
court—regardless of whether or not it withdrew the complaint
in Greece—was filed nineteen months after the September 28,
2012, deadline in the settlement agreement.
On the basis of the information discerned from these papers,
Balagiannis has not satisfied his obligations under the agree-
ment, and his enforcement action must fail. Although our
colleague in dissent contests the formalism of that determina-
tion, the district court did not need the benefit of an expert in
Greek law to reach the conclusion that a letter which fails to
mention anything about withdrawing a party from the case
will not result in that party being withdrawn from the case.
And while he faults us and the district court for failing to credit
the belated March 4, 2014, declaration, the fact remains that if
the district court had credited this declaration, it could have
granted judgment on the pleadings for Mavrakis because it
proves that Balagiannis did not substantially perform within
the time frame contemplated by the settlement agreement.
 In short, Balagiannis was required to deliver if he wanted
Mavrakis’s performance. If we were to agree with Balagiannis,
he would be entitled to all the money promised in the settle-
ment even though he admits he has not delivered (and cannot
deliver) what Mavrakis wanted in exchange: peace of mind
that no criminal prosecution in Greece would be forthcoming.
Balagiannis could have avoided this conundrum if he had
sought rescission in the district court on grounds that it was
impossible for him to terminate the proceeding in Greece. But
he did not, and it is not our responsibility to re-litigate this case
for him.
No. 14-2990                                                 7

                    III. Conclusion
Balagiannis failed to allege that he complied with both condi-
tions of the settlement agreement. Additionally, his pleadings
show that he failed to substantially perform. Accordingly, we
AFFIRM the judgment of the district court.
8                                                  No. 14-2990


    POSNER, Circuit Judge, dissenting. Balagiannis sued Mav-
rakis and others and the parties settled, agreeing that Mav-
rakis would pay $1.225 million to Balagiannis, who in ex-
change would release all his claims against Mavrakis and his
wife. There were several claims, and it is uncontroverted
that Balagiannis timely settled all but one—a complaint
seemingly both criminal and civil in nature that he had filed
with Greek prosecutorial authorities, who in response to the
complaint had instituted an investigation. (Although both
parties, though ethnically Greek, are American citizens, the
fraud alleged by Balagiannis arose from transactions involv-
ing the stock of a casino located in Greece.) In 2012, after
having paid $300,000 of the $1.225 million that he owed Ba-
lagiannis, Mavrakis refused to pay the rest on the ground
that Balagiannis had not withdrawn the Greek complaint as
promised. Balagiannis had written a letter to the Greek au-
thorities in March 2012 that he says withdrew the complaint.
Actually the letter just asked the authorities to expedite their
investigation, which is the opposite of a request to dismiss.
But Balagiannis may have thought (and for all we know may
have been thinking correctly) that only when the investiga-
tion was complete would the criminal complaint be dis-
missed. He also says his Greek lawyer told him the letter
would bring about the withdrawal of the Greek proceeding
against the Mavrakises.
    In 2013 Balagiannis brought the suit that is before us
against Mavrakis for the $925,000 that remained of Bala-
giannis’s $1.225 million contract claim. The following year,
Mavrakis having moved to dismiss the suit for failure to
state a claim, Balagiannis filed in the district court a state-
ment that his (new) Greek lawyer had just submitted to the
No. 14-2990                                                       9

Greek authorities unequivocally requesting termination of
the Greek investigation of Mavrakis and his wife. The letter
did not request termination of the other defendants, but said
only that on the basis of additional information that Bala-
giannis had recently obtained he had concluded that Mav-
rakis and his wife “have no involvement and connection to
the felonies of embezzlement, fraud and forgery committed
against me” and therefore “I do not wish to legally sue The-
odore Mavrakis and [his wife] and I will not attend as plain-
tiff against them,” as distinct from four other defendants
against “whom I wish to proceed with the prosecution to
[sic] against them and [as to them] I will attend as the plain-
tiff.”
     For Balagiannis to prevail in his breach of contract suit
against Mavrakis he had only to show that he had substan-
tially performed his end of the bargain. George F. Mueller &
Sons, Inc. v. Northern Illinois Gas Co., 336 N.E.2d 185, 189 (Ill.
App. 1975), citing Christopher v. West, 98 N.E.2d 722, 725 (Ill.
1951); W.W. Vincent & Co. v. First Colony Life Ins. Co., 814
N.E.2d 960, 967 (Ill. App. 2004). The district judge neverthe-
less dismissed Balagiannis’s suit with prejudice for failure to
state a claim, primarily on the ground that the second letter
had come too late, having been filed with the court more
than four months after the complaint had been filed. The
judge also cited a Greek source, cited by Mavrakis, for the
proposition that as long as the Greek investigation continued
against the four other defendants, it could not be terminated
against any of the defendants.
     Dismissal with prejudice was improper with the suit at
such an early stage, see Fed. R. Civ. P. 15(a)(2); Foman v. Da-
vis, 371 U.S. 178, 182 (1962); cf. General Electric Capital Corp. v.
10                                                 No. 14-2990

Lease Resolution Corp., 128 F.3d 1074, 1085 (7th Cir. 1997),
given the abundance of factual issues raised by the parties’
submissions to the district court—those issues could not be
sensibly resolved without proceedings that the judge impa-
tiently cut off. Whether Greek law would allow the investi-
gation to be terminated against fewer than all the persons
being investigated was an especially critical issue and surely
merited the judge’s consideration, which it did not receive.
Another ignored issue of potential consequence was whether
Balagiannis’s first letter to the Greek authorities, despite its
literal meaning—a meaning that may however have been the
product of an imperfect translation from Greek into Eng-
lish—was a bona fide effort to terminate the criminal inves-
tigation of the Mavrakises. (The statement in the majority
opinion that “the district court did not need the benefit of an
expert in Greek law to reach the conclusion that a letter
which fails to mention anything about withdrawing a party
from the case will not result in that party being withdrawn
from the case” could be thought to reflect a certain naïveté
concerning the potential loss of meaning in translations.)
And if not, the next issue requiring consideration was
whether the second letter was such an effort, even though it
reserved the right to urge that the criminal investigation of
the Mavrakises’ codefendants proceed. That issue too the
judge ignored.
     Still another ignored issue of consequence was whether,
assuming that either one or both of the letters was a bona
fide effort to call off the Greek investigatory hounds, the ef-
fort amounted to substantial performance by Balagiannis of
his obligations under the settlement agreement. He did not
promise in the settlement agreement to deliver “peace of
mind that no criminal prosecution in Greece would be forth-
No. 14-2990                                                 11

coming,” as the majority puts it; he didn’t agree to become
an insurer. But he agreed “to withdraw the Complaint he
has filed against Mavrakis and [his wife] in the Greek Ac-
tion.”
    The phrase “withdraw the Complaint” could mean ei-
ther “terminate prosecution of the complaint” or “ask the
Greek authorities not to prosecute the complaint.” If Greek
law doesn’t allow a private complainant to terminate the
prosecution of a complaint against fewer than all the de-
fendants, then a plausible interpretation of “withdraw the
Complaint” is that Balagiannis was required only to tell the
Greek authorities that he didn’t want Mavrakis and his wife
prosecuted—for he could not block the prosecution but
could only ask that it be terminated. This interpretation
would require Balagiannis to do only what Greek law al-
lowed him to do. To interpret the contract to require him to
do something the law didn’t allow him to do, such as with-
draw the complaint against all the defendants, would signify
a mutual mistake by the parties concerning the applicable
Greek law, see Schaefer v. Wunderle, 39 N.E. 623, 627 (Ill.
1895); 27 Williston on Contracts § 70:134 (4th ed., Westlaw da-
tabase updated May 2015); Restatement of Restitution § 55,
comment c; Eclavea et al., 12 Ill. Law and Practice, Contracts
§ 69 (Westlaw database updated May 2015), by agreeing to
do something the law forbade. If there was no mistake, Bala-
giannis wouldn’t have to rescind the contract for relief, as
the majority suggests, because he had done all he could do—
his performance though it might prove ineffectual had been
substantial.
   Further supporting this interpretation is Mavrakis’s
promise in the settlement agreement “to provide reasonable
12                                                    No. 14-2990

cooperation in connection with Balagiannis’ claims against
the remaining parties in the Greek Action.” Since Balagian-
nis is not asking that his Greek complaint be dropped
against them as well as against the Mavrakises, he did not
harm Mavrakis and so did not breach his contract; “reasona-
ble cooperation” would require Mavrakis to accept Bala-
giannis’s interpretation of Greek law as not requiring Bala-
giannis to obtain the dismissal of all the defendants in order
to obtain the dismissal of just the two Mavrakises.
     Balagiannis’s lawyer told us at oral argument that his
client would not resist being ordered to return some portion
of the damages to which Balagiannis would be entitled had
he managed to withdraw the Greek complaint early on. The
concession appears in amplified form in his brief, which
states that “Balagiannis and Reserve [his company, a
coplaintiff] are entitled to maintain their claim against Ted
[Mavrakis] for his failure to pay the $925,000 that remains
due under the Settlement Agreement, subject to any damages
that Ted [Mavrakis] can prove that were caused by Balagiannis
failing to timely withdraw the claims against Ted and his wife in
the Greek Complaint” (emphasis added).
    The majority opinion states that the delay makes Bala-
giannis’s second letter ineffectual, but doesn’t explain why
damages cannot remedy any harm that the Mavrakises suf-
fered from the delay. The Illinois courts have ruled that
“mere delay in the performance of a building contract will
not defeat the right of the contractor to collect the contract
price.” Ahmer v. Peters, 149 N.E.2d 503, 506 (Ill. App. 1958),
quoting Walsh v. North American Cold Storage Co., 103 N.E.
185, 188 (Ill. 1913); see also Israel v. National Canada Corp., 658
N.E.2d 1184, 1190 (Ill. App. 1995). Why should the result be
No. 14-2990                                                  13

any different in this case? The Mavrakises haven’t been
prosecuted yet, so even a delayed withdrawal may spare
them any consequences from Balagiannis’s delay in endeav-
oring, in his second letter, to make clear his desire that the
Greek authorities terminate their investigation of the Mav-
rakises.
     The result of a trial—even perhaps of summary judg-
ment proceedings—might well be a finding that the Greek
investigation is dead in the water. Indeed, since the Greek
authorities have not brought the Mavrakises to trial in the
six years since Balagiannis filed his Greek claims, or so far as
appears done anything else to suggest a live investigation
and expectation of an eventual trial, it is unlikely—it may in
fact be out of the question—that the couple will ever be
prosecuted in Greece. (Would Greece even request their ex-
tradition, and if so would the United States honor the re-
quest?) To determine that possibility would require evidence
from experts on Greek criminal procedure who—whether
Greek or American—are knowledgeable about the extraor-
dinary current strains on the Greek government as a result
of Greece’s dire financial straits, which have produced a bit-
ter conflict between that government and the European Un-
ion’s financial authorities plus the nation’s numerous impor-
tunate creditors.
    If indeed the investigation will not result in a prosecu-
tion, Balagiannis is entitled to the promised $925,000 minus
any damages that delay has imposed on the Mavrakises.
Should it be impossible to determine the fate of the investi-
gation or to assess damages that the investigation’s contin-
ued existence, limbo-like though it is, is imposing on the
Mavrakises, an alternative remedy might be to require them
14                                                   No. 14-2990

to place the $925,000 that they may ultimately be determined
to pay Balagiannis in escrow (where it would earn interest)
for a period of say three years. If at any time during that pe-
riod the investigation was definitely closed, the money, in-
cluding any accrued interest, would go to Balagiannis. Oth-
erwise it would stay with the Mavrakises.
    All that is clear at this stage is that the suit has been dis-
missed prematurely and therefore that the dismissal should
be reversed and the case remanded to the district court for
evidentiary proceedings.
     I want in closing to remark a general issue of federal
practice that this case illustrates. Recall that the district
judge’s main reason (mysteriously ignored in the majority
opinion) for dismissing Balagiannis’s suit was his four-
month delay in filing the second letter. The second letter is
crucial to his case. I find myself increasingly uncomfortable
with basing dismissals with prejudice on harmless proce-
dural bobbles. The only argument in favor of such summary
justice that I can imagine is that by punishing parties for
their lawyers’ mistake we improve the quality of the bar; the
lawyers who disserve their clients attract fewer new clients
and eventually perhaps are forced to leave the practice—an
example of the positive effect of competition on the quality
of goods and services that a market provides. But while this
is plausible in theory, I have to say that in more than 33
years as a federal court of appeals judge I have not noted
any improvement in the average quality of the lawyers who
appear before us. I find it difficult to believe that punishing
Balagiannis and his lawyer by in effect a “fine” of $925,000
will promote the quality of legal representation in the courts
of this circuit.
