In the
United States Court of Appeals
For the Seventh Circuit

Nos. 98-2841 & 99-2020

Oak Park Trust and Savings Bank, as Trustee
under Trust Agreement No. 6716,
and Radcliff Development Corporation,

Plaintiffs, Counterdefendants-Appellees,

v.

C.G. Therkildsen,

Defendant, Counterplaintiff-Appellant.



Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 96 C 2896--Charles P. Kocoras, Judge.


Argued February 9, 2000--Decided March 30, 2000



  Before Bauer, Easterbrook, and Ripple, Circuit Judges.

  Easterbrook, Circuit Judge. Illinois law provides
that a person named as a defendant in a lawsuit
sometimes may pursue a claim that otherwise would
be time-barred by asserting it as a counterclaim
against the original plaintiff. 735 ILCS 5/13-
207. When Radcliff Development Corporation/*
sued the Village of Inverness and its Trustees
for failing to provide compensation for water and
sewer facilities that the Village required
Radcliff to furnish to neighbors of a residential
development, C.G. Therkildsen, one of the
Trustees, saw this as an opening. Therkildsen had
purchased a house in one of Radcliff’s
subdivisions. According to Therkildsen, Radcliff
promised to maintain the subdivision as a gated
community, with round-the-clock security, but has
not kept this promise. By way of a counterclaim,
Therkildsen sought treble damages under state law
and the Racketeer Influenced and Corrupt
Organizations Act (RICO), 18 U.S.C. sec.sec. 1962,
1964.

  District Judge Duff, to whom Radcliff’s suit
was initially assigned, entered an order
forbidding any of the defendants to file an
answer to the complaint while the parties engaged
in settlement negotiations. The basis of this
order is not readily apparent, but it was not
appealable. Therkildsen filed his counterclaim
before Judge Duff prohibited answers. After Judge
Duff retired from active service, the case was
reassigned to Judge Kocoras, who added a
prohibition against "motions to dismiss and/or
for summary judgment". After Radcliff moved to
dismiss Therkildsen’s counterclaim (violating
Judge Kocoras’s order in the process) on the
ground that a counterclaim is supposed to
accompany the answer, see Fed. R. Civ. P. 12(b),
Therkildsen filed an answer--which Radcliff moved
to strike, asserting not only that filing an
answer violated Judge Duff’s order but also that
an answer was unnecessary because the parties
were so close to settlement. Judge Kocoras
granted this motion and struck Therkildsen’s
answer. 1997 U.S. Dist. Lexis 19516 (N.D. Ill.
Dec. 4, 1997). Observing that Therkildsen had not
answered the complaint, the judge then dismissed
the counterclaim. Until an answer has been filed,
the plaintiff has an unconditional right to
dismiss the suit. Fed. R. Civ. P. 41(a)(1). Once
the answer is on file, a judge may impose
conditions to protect the interests of other
parties. "If a counterclaim has been pleaded by
a defendant prior to the service upon the
defendant of the plaintiff’s motion to dismiss,
the action shall not be dismissed against the
defendant’s objection unless the counterclaim can
remain pending for independent adjudication by
the court." Fed. R. Civ. P. 41(a)(2). Having
struck the answer, the district court dismissed
the counterclaim without waiting for a motion
under Rule 41(a), and without inquiring under
Rule 41(a)(2) whether "the counterclaim can
remain pending for independent adjudication by
the court." Because timeliness of Therkildsen’s
action likely depended on 735 ILCS 5/13-207,
which is not available if the claim must stand on
its own, dismissal of the counterclaim prevents
its refiling as an independent suit, whether or
not it could be supported by federal
jurisdiction.

  Therkildsen asks us to hold that the district
judge should not have struck his answer, and
there is much to be said for his position. How
can a district judge strike an answer that meets
none of the conditions that Fed. R. Civ. P. 12(f)
specifies for that action? A desire to avoid the
application of Rule 41(a)(2) is not a good reason
to strike an otherwise proper answer. Moreover,
the foundation of dismissal--a motion under Rule
41(a)(1)--was missing. The district judge
dismissed the action in anticipation of
settlement. The order of December 1997 said that
because agreement was imminent, an answer was
unnecessary; because the answer had just been
vaporized, the counterclaim could be dismissed
without regard to Rule 41(a)(2). Yet the
plaintiff did not move for dismissal under Rule
41(a)(1). Instead the judge dismissed the suit on
his own some months later, "with leave to
reinstate" if a settlement were not reached by a
date certain. That date was repeatedly extended,
and the action did not come to an end (by the
expiration of time to reinstate) until March
1999. As in Otis v. Chicago, 29 F.3d 1159 (7th
Cir. 1994) (en banc), the court never did enter
a proper judgment. Extended delay embarrasses the
judge’s assertion of December 1997 that
settlement was only a few trivial details from
completion, so that the court could act as if
settlement had been consummated, as if an answer
were pointless and had not been filed, as if
there were no suit to which a counterclaim could
pend, and as if a Rule 41(a)(1) motion had been
filed. None of these "as ifs" was true.

  We need not nail down the consequences of these
events, however, because there is a compelling
reason why Therkildsen’s counterclaim was not
properly before the court: lack of subject-matter
jurisdiction. The district court hinted at this
possibility when denying Therkildsen’s motion for
reconsideration. 1998 U.S. Dist. Lexis 9274 (N.D.
Ill. June 19, 1998). Therkildsen’s claim against
Radcliff arises from events other than those that
led to Radcliff’s claim against the Village. It
is therefore a permissive rather than a
compulsory counterclaim. Fed. R. Civ. P. 13(b).
As a permissive counterclaim, it is outside the
supplemental jurisdiction (28 U.S.C. sec.1367(a)
covers only "claims that are so related to claims
in the action within such original jurisdiction
that they form part of the same case or
controversy under Article III of the United
States Constitution") and requires an independent
basis of federal jurisdiction. By-Prod Corp. v.
Armen-Berry Co., 668 F.2d 956, 961 (7th Cir.
1982); Clark v. Universal Builders, Inc., 501
F.2d 324, 341 (7th Cir. 1974); Charles Alan
Wright, Arthur R. Miller & Mary Kay Kane, 6
Federal Practice and Procedure sec.1422 (2d ed.
1990). Because the parties are not of diverse
citizenship, jurisdiction depends on a claim
arising under federal law. All but one of
Therkildsen’s theories rests on Illinois law,
however, and the exception is insubstantial.

  The nub of Therkildsen’s grievance is, to quote
his brief: "Despite numerous written
representations by Radcliff that the Development
was a private gated community, some time after
the house was built and Therkildsen moved in,
Therkildsen came to realize that the Development
would be neither private nor gated." If these
"written representations" were sufficiently
definite, then they formed part of the parties’
contract, and Therkildsen has a simple contract
claim. If they were not definite, then
Therkildsen has no claim at all, whether
denominated contract or fraud. Eisenberg v.
Goldstein, 29 Ill. 2d 617, 195 N.E.2d 184 (1963);
Barille v. Sears, Roebuck & Co., 289 Ill. App. 3d
171, 682 N.E.2d 118 (1st Dist. 1997); see also
Vaughn v. General Foods Corp., 797 F.2d 1403 (7th
Cir. 1986) (Indiana law). RICO does not provide a
federal treble-damages action for breach of
contract. See Perlman v. Zell, 185 F.3d 850, 853
(7th Cir. 1999). Even if Radcliff’s
representations deserve the label "fraud," RICO
still does not come into play unless the
defendant conducted a pattern of racketeering.
H.J. Inc. v. Northwestern Bell Telephone Co., 492
U.S. 229 (1989); see also Sedima, S.P.R.L. v.
Imrex Co., 473 U.S. 479 (1985). Therkildsen does
not contend that Radcliff defrauded anyone other
than purchasers at a single real estate
development--one scheme at most, and well short
of the required pattern. A plaintiff’s failure to
prove his contentions does not deprive a court of
jurisdiction, Steel Co. v. Citizens for a Better
Environment, 523 U.S. 83, 89-90 (1998); Bell v.
Hood, 327 U.S. 678, 682 (1946), but Therkildsen’s
RICO theory is so feeble, so transparent an
attempt to move a state-law dispute to federal
court and avoid the state statute of limitations,
that it does not arise under federal law at all.
See Goosby v. Osser, 409 U.S. 512, 518 (1973);
Crowley Cutlery Co. v. United States, 849 F.2d
273 (7th Cir. 1988). Thus the district judge
rightly dismissed Therkildsen’s counterclaim,
though not for the reasons the judge gave.

Affirmed


/* The complaint used "Radcliffe Development
Corporation," but the firm’s brief in this court
drops the "e"--though its certificate of interest
labels the party "Radcliffe Corporation." We use
"Radcliff" because that spelling predominates in
the most recent papers.
