                           NONPRECEDENTIAL DISPOSITION
                   To be cited only in accordance with Fed. R. App. P. 32.1




               United States Court of Appeals
                               For the Seventh Circuit
                               Chicago, Illinois 60604

                              Argued February 13, 2020
                              Decided February 18, 2020

                                         Before

                           JOEL M. FLAUM, Circuit Judge

                           DANIEL A. MANION, Circuit Judge

                           AMY C. BARRETT, Circuit Judge

No. 19‐2264

 THOMAS J. JUZA,                                   Appeal from the United States
    Plaintiff‐Appellant,                           District Court for the
                                                   Eastern District of Wisconsin.
         v.
                                                   No. 1:19‐cv‐36
 WELLS FARGO BANK, N.A.,
    Defendant‐Appellee.
                                                   William C. Griesbach,
                                                   Judge.




                                       ORDER

       Thomas Juza alleges two breach of contract claims and two tort claims
against the defendant, Wells Fargo Bank, N.A. (the “Trust”). The Trust owned
the interests in a loan given to Juza Investments II, an entity owned by Thomas
Juza. In 2008, Thomas Juza attempted to transfer his interests in Juza II to a third
party, but the Trust delayed its approval and the transfer fell through. Thomas
Juza alleges that by withholding its approval, the Trust breached its contractual
No. 19‐2264                                                                  Page 2

obligations under the Mortgage Agreement—an agreement between the Trust
and Juza II. He also alleges that the delay constituted tortious interference with
contract and tortious interference with prospective economic advantage.

       The district court dismissed all four of Thomas Juza’s claims. As for his
breach of contract claims, the district court dismissed one as superfluous and the
other for lack of standing since Thomas Juza was not a party to the Mortgage
Agreement and the Agreement barred him from bringing a claim as a third‐party
beneficiary. The district court dismissed both of Thomas Juza’s tort claims as
untimely.

        We AFFIRM the judgment of the district court for the reasons stated in the
district court’s order of June 5, 2019, which is attached.
                     UNITED STATES DISTRICT COURT
                     EASTERN DISTRICT OF WISCONSIN

THOMAS J. JUZA,

                       Plaintiff,

       v.                                                     Case No. 19-C-36

WELLS FARGO BANK, N.A.,
as Trustee for The Registered Holders of Credit
Suisse First Boston Mortgage Securities Corp.,
Commercial Mortgage Pass-Through Certificates,
Series 2006-C4 Trust,

THE REGISTERED HOLDERS OF CREDIT SUISSE
FIRST BOSTON MORTGAGE SECURITIES CORP.,
COMMERCIAL MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 2006-C4 TRUST,

KEYBANK NATIONAL ASSOCIATION, and

KEYCORP,

                       Defendants.


              DECISION AND ORDER GRANTING MOTION TO DISMISS


       On November 26, 2018, Plaintiff Thomas J. Juza filed a complaint against Defendants Wells

Fargo Bank, N.A. (Wells Fargo), as Trustee for The Registered Holders of Credit Suisse First

Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2006-

C4 Trust (Trust), the Trust, KeyCorp Real Estate Capital Markets, Inc. (KRECM),1 and KeyCorp

in Brown County Circuit Court, alleging breach of contract and breach of duty of good faith and fair

dealing claims against the Trust as well as tortious interference with contract and tortious

       1
        KeyBank National Association (KeyBank), the successor by merger of KRECM, Dkt. No.
11-1, was later substituted as a defendant for KRECM. Dkt. No. 22.



   Case 1:19-cv-00036-WCG Filed 06/05/19 Page 1 of 20 Document 28
interference with prospective economic advantage claims against the Trust, KRECM (now

KeyBank), and KeyCorp. The defendants removed the case to this court on January 4, 2019. The

court has jurisdiction under 28 U.S.C. § 1332. Before the court is the defendants’ motion to dismiss

the complaint. For the reasons stated below, the defendants’ motion will be granted.

                                       LEGAL STANDARD

        “A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the

viability of a complaint by arguing that it fails to state a claim upon which relief may be granted.”

Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014); Fed. R. Civ. P. 12(b)(6).

Surviving such a challenge requires that the plaintiff allege “enough facts to state a claim to relief

that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “Factual

allegations must be enough to raise a right to relief about the speculative level.” Id. at 555. When

reviewing a motion to dismiss for failure to state a claim or for lack of standing, a court must accept

all well-pleaded facts as true and draw all reasonable inferences therefrom in the plaintiff’s favor.

Doe v. Vill. of Arlington Heights, 782 F.3d 911, 914–15 (7th Cir. 2015); Reid L. v. Ill. State Bd. of

Educ., 358 F.3d 511, 515 (7th Cir. 2004). “[W]hen the allegations of the complaint reveal that relief

is barred by the applicable statute of limitations, the complaint is subject to dismissal for failure to

state a claim.” Logan v. Wilkins, 644 F.3d 577, 582 (7th Cir. 2011) (citations omitted).

                            ALLEGATIONS OF THE COMPLAINT

        In April 2006, LaSalle National Bank (LaSalle), as lender, made a loan (the Loan) to Juza

Investments II, LLC (Juza II or Borrower), as mortgager, for $17.575 million. The Loan was

secured by mortgages (collectively, the Mortgage) upon six commercial properties (the Properties).




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   Case 1:19-cv-00036-WCG Filed 06/05/19 Page 2 of 20 Document 28
Juza executed a personal guaranty (the Guaranty) for the benefit of La Salle, pursuant to which he

personally guaranteed the obligations of the Borrower under the Loan in certain circumstances.

       In September 2006, La Salle assigned the Loan, Mortgage, and other loan documents to

Wells Fargo, as Trustee for the Trust. The Trust is a special purpose investment vehicle utilized to

pool commercial mortgage loans and to issue mortgage-backed securities therein on a tax-

advantaged basis. A Pooling and Servicing Agreement (PSA) dated September 1, 2006, governed

and continues to govern the actions of Trust participants, including Wells Fargo and KeyBank, the

Trust’s master servicer. As master servicer, KeyBank was charged with diligently administering

and servicing the Trust’s loans and defending any litigation against the Trust. KeyCorp is a bank

holding company that controlled and directed the actions of KeyBank with respect to the

administration and servicing of the Loan.

       In February 2008, Juza and Juza Investments III, LLC (Juza III)—an entity wholly owned

by Juza, which, together with Juza II, owned the Properties collateralizing the Loan—entered into

a Membership Interests Purchase Agreement (the Purchase Agreement) with Daniel A. Schmidt

Properties, LLC (Schmidt LLC). The Purchase Agreement called for Schmidt LLC to pay

$23 million, or $5,739,205 in excess of Juza II’s then-current balance of the Loan, to acquire Juza’s

equity interests in Juza II. The purchase price was to be paid in three components: (1) Schmidt LLC

agreed to assume the balance of the Loan ($17,260,795), (2) pay Juza $4,739,205 in cash, and (3)

execute a promissory note to Juza for the balance of the purchase price. At all relevant times,

Daniel A. Schmidt (Schmidt), the principal of Schmidt LLC, had a net worth far exceeding Juza’s.

       Section 15 of the Mortgage contained a “due on sale” clause, which restricted the right of

Juza II to transfer the Properties while the Loan was outstanding and contained limitations on the


                                                 3



   Case 1:19-cv-00036-WCG Filed 06/05/19 Page 3 of 20 Document 28
transfer of equity interests in Juza II to a third-party purchaser. Section 15(c) of the Mortgage

provided that a sale of the Properties and assumption of the Loan “may be permitted during the term

of the Note to any entity, subject to Lender’s prior written consent, which shall not be unreasonably

withheld or delayed,” provided that certain terms and conditions were satisfied. Dkt. No. 1-2 at

¶ 14. On March 6, 2008, in an effort to comply with Section 15(c) of the Mortgage, Juza sent a

letter to KeyBank with the Purchase Agreement as an attachment, requesting on an expedited basis

that KeyBank, on behalf of the Trust, consent to Juza’s assignment of his equity interests in Juza II

to Schmidt LLC.

       On April 2, 2008, through a series of emails, KeyBank responded, informing Juza that his

request would be reviewed and that KeyBank required various information from Juza and Schmidt

LLC related to the request. On April 21st and 22nd, respectively, Juza and Schmidt LLC, through

counsel, provided all of the requested information. KeyBank continued to make “unending

requests” for further information, and despite Juza and Schmidt LLC providing the requested

information, KeyBank, on May 21st and via a different representative than was previously involved

in the approval process, sent an “intentionally dilatory, obfuscatory and purposely deceptive” email

to Schmidt LLC’s counsel communicating KeyBank’s concern that Schmidt LLC was “not putting

any cash into the deal, he’s simply assuming all of Mr. Juza’s debts.” Id. at ¶¶ 30–31.

       Despite believing that their initial Purchase Agreement addressed KeyBank’s concern, Juza

and Schmidt LLC entered into an Amendment to the Purchase Agreement (Amended Purchase

Agreement) in an attempt to meet KeyBank’s “illusory, bad faith demands.” Id. at ¶ 34. The

Amended Purchase Agreement provided that Schmidt LLC would put $5,739,205 in cash into the

deal, part of which would be used to satisfy outstanding obligations of Juza II and Juza III, and the


                                                 4



   Case 1:19-cv-00036-WCG Filed 06/05/19 Page 4 of 20 Document 28
remainder of which would be paid directly to Juza. In email exchanges between KeyBank and

Schmidt LLC’s counsel from May 28th to June 4th, KeyBank demanded to know how Schmidt LLC

intended to pay the cash amount, counsel indicated that Schmidt’s employer would arrange to pay

him a bonus sufficient to cover the down payment, and KeyBank stated “KeyBank’s approval will

be conditioned upon the payment of the bonus.” Id. at ¶ 40.

       KeyBank then demanded further information from Juza and Schmidt LLC and, for the first

time, informed them that “[i]f and when KeyBank approves the case it will go to the Special

Servicer” and the “Directing Certificateholder,” who would have twenty business days to review

the case and make their recommendation on consent. Id. at ¶ 41. In a June 16th email to Schmidt’s

counsel, KeyBank warned that the transaction would be rescinded if KeyBank did not receive the

requested information by June 20th. On June 23rd, KeyBank issued a termination letter to Juza and

Schmidt LLC, stating that their request for consent was rescinded and that they could resubmit their

request in the future if they choose. As a result of KeyBank’s delay and eventual rescission,

Schmidt terminated the Amended Purchase Agreement, causing Juza to suffer millions of dollars

of damages.

       At some point after Juza and Schmidt LLC’s proposed deal fell through, Juza II defaulted

on the Loan, which resulted in Wells Fargo instituting an action in Wisconsin state court, Brown

County Circuit Court Case No. 10-CV-2340 (the Prior Action), against Juza II for foreclosure on

the Properties that collateralized the Mortgage and against Juza for a money judgment pursuant to

his Guaranty. Juza filed a counterclaim against Wells Fargo in the Prior Action, alleging that Wells

Fargo and the Trust, through KeyBank, unreasonably delayed and failed to approve the assignment




                                                 5



   Case 1:19-cv-00036-WCG Filed 06/05/19 Page 5 of 20 Document 28
of his equity interests in Juza II to Schmidt LLC, in breach of its loan agreement with him and Juza II.

          On November 29, 2010, Wells Fargo moved for summary judgment. By orders filed on

November 10 and 22, 2011, the state court granted summary judgment to Wells Fargo on the

foreclosure claims against Juza II but denied summary judgment against Juza. Following the denial

of summary judgment, Wells Fargo and Juza entered into a Stipulation to Dismiss Certain Claims

Without Prejudice (Stipulation), which was filed on June 12, 2012. On November 28, 2012, based

on the Stipulation, the court filed an Order Dismissing Certain Claims and Thomas J. Juza Without

Prejudice (Dismissal Order). The Dismissal Order dismissed without prejudice “Mr. Juza’s

counterclaim against [Wells Fargo]” and ordered that “[a]ll applicable statutes of limitations shall

be extended to and shall expire on the date that is 6 years after the date of this Order.” Dkt. No. 13-

4 at 2.

          In the present case, based on the foregoing allegations, Juza raises six causes of action.

Against the Trust, he asserts breach of contract (Count I), breach of duty of good faith and fair

dealing (Count II), tortious interference with contract (Count III), and tortious interference with

prospective economic advantage (Count V) claims. Against KeyBank and KeyCorp, he asserts

tortious interference with contract (Count IV) and tortious interference with prospective economic

advantage (Count VI) claims.

                                             ANALYSIS

          Several of Juza’s claims are untimely and barred by statutes of limitations. Juza’s tort

claims against KeyBank and KeyCorp (collectively, the Key defendants) are barred because the

events relevant to the claims against the Key defendants occurred from March to June 2008, and

Juza filed this action in November 2018. The parties dispute whether Wisconsin’s three-year or


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   Case 1:19-cv-00036-WCG Filed 06/05/19 Page 6 of 20 Document 28
Illinois’ five-year statute of limitations applies, but either way, the claims are untimely. See

Mirbeau of Geneva Lake, LLC v. City of Lake Geneva, 746 F. Supp. 2d 1000, 1015 (E.D. Wis.

2010) (“[A]ll of the relevant case law indicates that the Wisconsin Supreme Court would find that

§ 893.57 provides the limitations period for a tortious interference with contractual relations

claim . . . .”; Wis. Stat. § 893.57 (2017–18) (three-year limitations period); Poulos v. Lutheran Soc.

Servs. of Ill., Inc., 728 N.E.2d 547, 559 (Ill. Ct. App. 2000) (“An action for tortious interference

with a contractual relation has a five-year statute of limitations.”). The Dismissal Order in the Prior

Action, which stated that “[a]ll applicable statutes of limitations shall be extended to and shall

expire on the date that is 6 years after [November 28, 2012],” Dkt. No. 13-4 at 2, did not serve to

extend the statutes of limitations for Juza’s tort claims against the Key defendants. Not only were

the Key defendants not parties to the Prior Action and therefore not bound by the state court decree,

see Taylor v. Sturgell, 553 U.S. 880, 898 (2008), but also the state court’s order tolled only a breach

of contract claim against Wells Fargo, not tort claims against the Key defendants. See Dkt. No. 13-2

at 6 (“As a result of the plaintiff’s breach of its agreement with the defendants, defendant Juza has

suffered or will suffer damages in an amount to be determined at trial, for which the plaintiff is

liable.”) (emphasis added); Dkt. No. 13-4 at 2 (ordering that, “[b]ased upon the stipulation,” see

Dkt. No. 13-3, “Mr. Juza’s counterclaim against Plaintiff is hereby dismissed without prejudice”

and that “[a]ll applicable statutes of limitations shall be extended to and shall expire on the date that

is 6 years after the date of this Order”) (emphasis added).

        Juza’s arguments to the contrary are unconvincing. Juza reads the Dismissal Order to mean

that all statutes of limitations for claims that may arise from the facts underlying the events at issue,

whether asserted in the Prior Action or not, were extended. But such a reading contravenes the plain


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   Case 1:19-cv-00036-WCG Filed 06/05/19 Page 7 of 20 Document 28
language of the parties’ Stipulation and Dismissal Order. Both the Stipulation and Dismissal Order

called for dismissal of “Certain Claims” without prejudice, and each claim was specifically

identified. Dkt. Nos. 13-3, 13-4. Wells Fargo’s Count III “as to Mr. Juza” and “Mr. Juza’s

counterclaim against Plaintiff” were dismissed without prejudice. Dkt. No. 13-4. Rather than set

forth and then extend the specific statutes of limitations for Count III and Juza’s counterclaim, the

Dismissal Order provided that all “applicable” statutes of limitation would be extended. Id. Had

the state court intended its order to be read as Juza desires, it could have stated as such. That only

the statute of limitations for Juza’s breach of contract claim against Wells Fargo was extended also

defeats his argument that the Key defendants shared an “identity of interest” with Wells Fargo

because the extension of the breach of contract statute of limitations had no impact on the

limitations periods for his tort claims. For the same reasons that Juza’s tort claims against the Key

defendants are time-barred, then, his tort claims against the Trust are also time-barred. The only

statute of limitations that was tolled in the Dismissal Order was for the breach of contract claim

against Wells Fargo. Had Juza intended to bring tort claims against the Trust, he could have done

so in 2012 or before the statutes of limitations for those claims expired.

       The defendants also assert judicial estoppel as a second, independent basis upon which to

dismiss Juza’s claims against the Key defendants. Judicial estoppel is a doctrine of discretion that

is intended to protect the integrity of the judicial process. New Hampshire v. Maine, 532 U.S. 742,

749–50 (2001); Grochocinski v. Mayer Brown Rowe & Maw, LLP, 719 F.3d 785, 795 (7th Cir.

2013). The defendants argue that Juza should be estopped from raising claims against the Key

defendants because he filed for bankruptcy in 2014 and failed to disclose potential claims against

the Key defendants in his bankruptcy schedules despite disclosing a “potential claim against Wells


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   Case 1:19-cv-00036-WCG Filed 06/05/19 Page 8 of 20 Document 28
Fargo for breach of contract.” See Dkt. No. 13-5 at 11; Cannon-Stokes v. Potter, 453 F.3d 446, 448

(7th Cir. 2006) (aligning with other appellate courts in holding that “a debtor in bankruptcy who

denies owning an asset, including a chose in action or other legal claim, cannot realize on that

concealed asset after the bankruptcy ends”); see also Rainey v. United Parcel Serv., Inc., 466 F.

App’x 542, 544 (7th Cir. 2012) (noting that a debtor “typically will be estopped from pursuing

claims for his own benefit if those claims were concealed from creditors during the bankruptcy

proceedings”). A legal claim is an asset that must be disclosed during bankruptcy so that it can be

administered along with a debtor’s other assets. See Stocks v. DoAll Co., 340 F. Supp. 3d 789, 791

(E.D. Wis. 2018). Although judicial notice may be taken of matters of public record such as Juza’s

bankruptcy schedules, General Electric Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074,

1080–81 (7th Cir. 1997), the court will decline to estop Juza from bringing his claims against the

Key defendants, which are subject to dismissal on other grounds, because the record is bare of any

evidence tending to show Juza’s intent to deceive, hide assets from, or make improper use of the

judicial process during the bankruptcy proceeding. See Thompson v. Elkhart Lake’s Road Am., Inc.,

No. 15-CV-672-JPS, 2016 WL 1558414, at *5 (E.D. Wis. Apr. 15, 2016); In re Ortiz, 477 B.R. 714,

722 (E.D. Wis. 2012).

       Juza’s breach of contract claim against the Trust concerns the Trust’s performance under

Section 15(c) of the Mortgage, which requires that the Trust, as lender, not unreasonably withhold

or delay its consent for sale of the Properties and assumption of the Loan. The Mortgage is

governed by Illinois law, and the parties agree that Illinois law also applies to the breach of the

covenant of good faith and fair dealing claim. Dkt. No. 13-6 at 44; Dkt. No. 13 at 13; Dkt. No. 23

at 30. The defendants argue that Juza’s breach of the covenant of good faith and fair dealing claim


                                                9



   Case 1:19-cv-00036-WCG Filed 06/05/19 Page 9 of 20 Document 28
must be dismissed because Illinois does not recognize such a claim as an independent basis for

relief. See Zeidler v. A & W Restaurants, Inc., 301 F.3d 572, 575 (7th Cir. 2002) (“The covenant

is only an aid to interpretation, not a source of contractual duties or liability under Illinois law.”);

Hickman v. Wells Fargo Bank N.A., 683 F. Supp. 2d 779, 793 (N.D. Ill. 2010) (“The duty of good

faith, however, does not provide Plaintiff with an independent cause of action.”). In response, Juza

argues that Illinois recognizes a breach of the covenant of good faith and fair dealing claim when

it sounds in contract rather than in tort. See Voyles v. Sandia Mortg. Corp., 751 N.E.2d 1126,

1131–32 (Ill. 2001) (describing the covenant of good faith and fair dealing as a “rule of

construction, rather than an independent source of tort liability”) (emphasis added).

        The parties are correct that the basis of the claim is important. “It is true that Illinois does

not recognize such an independent cause of action in tort, but a contractually-based claim for breach

of the implied covenant does exist.” In re Wireless Telephone 911 Calls Litig., No. MDL-1521,

03C2597, 02C8808, 2005 WL 1564978, at *13 (N.D. Ill. June 3, 2005). This claim exists where

a contract specifically vests one party with broad discretion in performing a term of the contract and

that party fails to exercise discretion “reasonably and with proper motive, not arbitrarily,

capriciously, or in a manner inconsistent with the reasonable expectations of the parties.” Slay v.

Allstate Corp., 115 N.E.3d 941, 950–51 (Ill. App. Ct. 2018) (citations omitted). As one court

observed, however, “[t]he claim . . . boils down to breach of contract: ‘[T]he obligation to deal in

good faith is implied by Illinois law into every contract and breach of that duty is simply a breach

of the underlying contract.’” In re Wireless Telephone 911 Calls Litig., 2005 WL 1564978, at *13

(quoting Batteast Constr. Co. v. Pub. Bldg. Comm’n of Chi., 195 F. Supp. 2d 1045, 1051 (N.D. Ill.

2001)). Where a separately stated breach of contract claim renders the breach of covenant claim


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  Case 1:19-cv-00036-WCG Filed 06/05/19 Page 10 of 20 Document 28
superfluous, dismissal of the breach of covenant claim is appropriate. Id. (“Plaintiffs have already

asserted a separate breach of contract claim in Count VI. Their claim for breach of the implied

covenant of good faith and fair dealing, then, is superfluous and will be dismissed . . . .” (internal

citation omitted)); see also Miller v. Ford Motor Co., 152 F. Supp. 2d 1046, 1049–50 (N.D. Ill.

2001) (dismissing breach of covenant claim where the underlying allegations were subsumed in a

wrongful termination claim, “which is essentially a claim for breach of the employment contract,”

and failed to state an independent cause of action). Here, Juza’s allegations in support of his breach

of covenant claim are rendered superfluous in light of his breach of contract claim that complains

of the Trust’s unreasonable performance under Section 15(c) of the Mortgage. Juza’s breach of the

covenant of good faith and fair dealing claim will accordingly be dismissed.

       Juza alleges that his final claim, breach of contract against the Trust, arises under “the

Mortgage, the Guaranty and related loan documents.” Dkt. No. 1-2 at ¶ 59. The defendants

challenge Juza’s standing to raise this claim because it ultimately concerns the Trust’s alleged

breach of Section 15(c) of the Mortgage and Juza was not a party to the Mortgage; according to the

defendants, only Juza II, as Borrower, and the Trust, as successor in interest to LaSalle, the

originating lender, were parties to the Mortgage. See Kaplan v. Shure Brothers, Inc., 266 F.3d 598,

602 (7th Cir. 2001) (“Under Illinois law, a cause of action may be brought only by a party to that

contract, by someone in privity with such party, or by an intended third-party beneficiary of the

contract.” (citations omitted)). Juza argues in response that the defendants’ failure to challenge

Juza’s standing in the Prior Action precludes them from doing so here. He also argues that the

Mortgage, Guaranty, and underlying promissory note, when read together, make clear that the




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  Case 1:19-cv-00036-WCG Filed 06/05/19 Page 11 of 20 Document 28
parties to the transaction understood Juza to be the real party in interest to both the Guaranty and

the Mortgage. At the very least, Juza contends, he was a third-party beneficiary of the Mortgage.

       Juza’s preclusion argument can be rejected. The state court’s order in the Prior Action

denied summary judgment on Wells Fargo’s claim against Juza under the Guaranty due to the

existence of a dispute of material fact as to whether Juza II’s default was excused. Dkt. No. 23-2

at 10. That order fails to trigger preclusion doctrine because no final judgment was reached on the

merits. See Berry v. Wells Fargo Bank USA, N.A., 865 F.3d 880, 883 (7th Cir. 2017) (claim

preclusion requires a final judgment on the merits rendered in the prior suit); Sornberger v. City of

Knoxville, Ill., 434 F.3d 1006, 1020 (7th Cir. 2006) (same); R.R. Donnelly & Sons Co. v. F.T.C., 931

F.2d 430, 431 (7th Cir. 1991) (denial of summary judgment is not a final judgment). Moreover,

Wells Fargo’s claim against Juza under the Guaranty is a separate issue from Juza’s breach of

contract claim. The defenses Juza raised in the Prior Action, including that Juza II’s default was

excusable, directly related to whether he was liable under the Guaranty. It is therefore unsurprising

that Wells Fargo did not raise a standing challenge against a guarantor defending his obligations

under the Guaranty. When Juza raised a counterclaim for breach of contract, however, Wells Fargo

raised as an affirmative defense that Juza “lack[ed] standing to bring it.” Dkt. No. 26-4 at 2. The

standing issue is therefore not precluded.

       To argue that the Loan documents should be read together and that he has standing to

challenge the Trust’s breach of the Mortgage, Juza chiefly relies on Owen Wagener & Co. v. Kale’s

Collision, Inc., No. 89C5433, 1990 WL 106543 (N.D. Ill. July 9, 1990). In Owen, the plaintiff,

Owen Wagener & Co., entered into a five-year written lease agreement with defendant Kale’s

Collision, Inc. (Kale). Id. at *1. The two other defendants, Roscoe and Kotlarz, signed the lease


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  Case 1:19-cv-00036-WCG Filed 06/05/19 Page 12 of 20 Document 28
on Kale’s behalf and signed personal guaranties of Kale’s obligations under the lease. Id. After

Owen Wagener & Co. repossessed the premises and was subsequently unable to find other tenants,

it sued Kale for accrued rents under the lease and Roscoe and Kotlarz under their personal

guaranties. Id. Kale and Kotlarz counterclaimed for damages on lost commissions and business

opportunities. Id. Owen Wagener & Co. moved to dismiss Kotlarz’ counterclaim, which it

construed as an action on the lease, because Kotlarz was not a party or in privity with a party to the

lease. Id. at *3. Relying on the principle that different instruments executed together as part of one

transaction or agreement are to be read together and construed as constituting a single instrument,

see McDonald’s Corp. v. Butler Co., 511 N.E.2d 912, 917 (Ill. App. Ct. 1987), the Owen court

denied the motion to dismiss because Kotlarz entered into his guaranty at or around the same time

he signed the lease and, “[u]pon further factual development, Kotlarz may establish that he either

was a party to or an intended beneficiary of the lease agreement.” Owen Wagener & Co., 1990 WL

106543, at *3.

        The parties dispute the import of Owen. Juza argues that Owen requires that the Guaranty,

Mortgage, and other Loan documents be read as one contract. He points to Section 1.2 of the

Guaranty, which defines “Guaranteed Obligations” to include “the unpaid balance of the Loan (as

defined in the Note) in the event of . . . (c) a breach of the terms of Paragraph 15 or 16 of any of the

Mortgages,” Dkt. No. 13-7 at 1, as well as Section 1.7, which states that “Guarantor agrees to the

provisions of the Loan Documents,” id. at 3, and Section 3.1, which states that “Guarantor is an

affiliate of Borrower or is the owner of a direct or indirect interest in Borrower, and has received,

or will receive, direct or indirect benefit from the making of this Guaranty with respect to the

Guaranteed Obligations,” id. at 7, to argue that the Guaranty manifests the Lender’s (and therefore


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  Case 1:19-cv-00036-WCG Filed 06/05/19 Page 13 of 20 Document 28
the Trust’s) intent to consider Juza a bona fide party to all of the Loan documents, including the

Mortgage. The defendants argue that the principle the Owen court relied upon is qualified in two

ways. First, to be construed as a single contract, two or more instruments must be “executed by the

same contracting parties” and, second, there must be no “evidence of contrary intention.” See

Tepfer v. Deerfield Sav. & Loan Ass’n, 454 N.E.2d 676, 679 (Ill. App. Ct. 1983). The defendants

note that Juza executed the Guaranty, Juza II executed the Mortgage, and Section 45 of the

Mortgage, a no third-party beneficiaries clause, Dkt. No. 13-6 at 99, is evidence that Juza has no

claim against the Trust under the Mortgage. The defendants also argue that the Owen court’s denial

of summary judgment due to a factual dispute as to whether the plaintiff was a third-party

beneficiary does not militate that Juza, as Guarantor, is to be treated as a party to the Mortgage.

       The facts in Owen are distinct from the facts here. The defendants’ argument that the

Guaranty and Mortgage were executed by different parties holds little weight under Owen, as the

guarantor there “signed the lease on behalf of Kale’s,” Owen Wagener & Co., 1990 WL 106543,

at *1, just as Juza signed the Mortgage on behalf of Juza II. However, as the defendants point out,

unlike in Owen, here, the Mortgage contains a provision that resolves the question of whether Juza

can maintain an action against the Trust. Section 45 of the Mortgage provides:

       No Third Party Beneficiaries. The provisions of this Mortgage and the other Loan
       Documents are for the benefit of Borrower and Lender and shall not inure to the
       benefit of any third party (other than any successor or assignee of Lender). This
       Mortgage and the other Loan Documents shall not be construed as creating any
       rights, claims or causes of action against Lender or any of its officers, directors,
       agents or employees in favor of any party other than Borrower including but not
       limited to any claims to any sums held in the Replacement Reserve or the TI and
       Leasing Reserve.




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Dkt. No. 13-6 at 99. In construing a contract, courts first look to the language of the contract to

determine the parties’ intent, and if the words are clear and unambiguous, they are given their plain,

ordinary, and popular meaning. Thompson v. Gordon, 948 N.E.2d 39, 47 (Ill. 2011). Only if

contract language is ambiguous will courts consider extrinsic evidence to determine the parties’

intent. Id.; see also 15th Place Condo. Ass’n v. S. Campus Dev. Team, LLC, 14 N.E.3d 592, 599

(Ill. App. Ct. 2014) (finding “no good reason to disturb” contractual provisions that were bargained

for and agreed upon by sophisticated parties engaged in a multi-million dollar construction project).

The language in Section 45 is clear and unambiguous. The provision makes clear that Juza II and

LaSalle intended that only Juza II may assert “rights, claims or causes of action against [the Trust]”

and that the provisions in the Mortgage inure to the benefit of Juza II and LaSalle (and the Trust,

as LaSalle’s assignee) and no other party. Dkt. No. 13-6 at 99. Juza therefore lacks standing to

raise a breach of contract claim against the Trust. The breach of contract claim will be dismissed,

as will the attendant breach of the covenant of good faith and fair dealing claim.

       Even were the court to read the Guaranty, Mortgage, and other Loan documents together,

the result would not change. Section 1.2 of the Guaranty that includes in the definition of

“Guaranteed Obligations” the “unpaid balance of the Loan (as defined in the Note) in the event

of . . . (c) a breach of the terms of Paragraphs 15 or 16 of any of the Mortgages” merely means that

Juza is liable for the Loan balance in the event that Juza II fails to perform its obligations under

Paragraphs 15 or 16. Dkt. No. 13-7 at 1. Section 1.7 of the Guaranty, which states in part that the

“Guarantor agrees to the provisions of the Loan Documents,” is unremarkable because it concerns

Juza’s waiver of notice and does not bestow any affirmative right upon Juza. Id. at 3. Section 3.1

of the Guaranty provides that “Guarantor is an affiliate of Borrower or is the owner of a direct or


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indirect interest in Borrower, and has received, or will receive, direct or indirect benefit from the

making of this Guaranty with respect to the Guaranteed Obligations.” Id. at 7. Section 3.1 is Juza’s

representation that he holds an ownership interest in Juza II and that “induc[ing] Lender to enter into

the Loan Documents and extend credit to Borrower,” id., through execution of a Guaranty, will

either directly or indirectly benefit Juza vis-a-vis his interest in Juza II. But Juza’s representation

that his partial ownership of Juza II confers on him some benefit because Juza II is being extended

credit does not mean that the provisions of the Mortgage inure to his benefit or that he has a specific

right to bring an action against the Trust. To grant Juza such a right would be to contravene the

plain language of Section 45 of the Mortgage.

        Juza’s reliance on Falls v. Silver Cross Hospital and Medical Centers, 68 N.E.3d 890, 900

(Ill. App. Ct. 2016) (Lytton, J., concurring in part and dissenting in part) to argue that “no third party

beneficiary” clauses are not always fatal to a third-party beneficiary claim is unconvincing. Not

only does Juza rely on a dissenting opinion that heavily cites non-Illinois cases, but unlike in Falls

and the case on which Judge Lytton principally relied, Barba v. Village of Bensenville, 29 N.E.3d

1187 (Ill. App. Ct. 2015), here, Section 3.1 of the Guaranty, the provision allegedly conferring some

benefit on Juza, is Juza’s representation as to ownership rather than a provision conveying a positive

right on him. Moreover, Section 3.1 of the Guaranty is far broader than Section 45 of the Mortgage,

which specifically states that the Mortgage’s provisions benefit Juza II, LaSalle, or LaSalle’s

assignees, and no one else. Section 45 of the Mortgage also states that the “Mortgage and the other

Loan Documents shall not be construed as creating any rights, claims or causes of action against

Lender.” Dkt. No. 13-6 at 99. Juza asks this court to do precisely the opposite of Section 45’s

express language: to read the Guaranty together with the Mortgage and to construe them such that


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Juza has a right to sue the Lender or Lender’s assignees under the Mortgage. Such a reading would

not only render the Mortgage’s plain language meaningless, but would also serve to rewrite a

contract bargained for and agreed upon by sophisticated parties. See Southern Fin. Grp., LLC v.

McFarland State Bank, 763 F.3d 735, 743 (7th Cir. 2014) (“Except in the most extraordinary

circumstances, we hold sophisticated parties to the terms of their bargain.”); ConFold Pacific, Inc.

v. Polaris Indus., Inc., 433 F.3d 952, 955 (7th Cir. 2006) (“Especially when dealing with a

substantial contract between commercially sophisticated parties . . . who know how to say what they

mean and have an incentive to draft their agreement carefully, there is great merit to the rule that

the meaning of an unambiguous contract is a question of law rather than of fact, with the

consequence that unambiguous contractual language must be enforced as it is written.” (internal

citations and quotation marks omitted)); see also Mid-West Energy Consultants, Inc. v. Covenant

Home, Inc., 815 N.E.2d 911, 916 (Ill. App. Ct. 2004) (“When a contract is clear and unambiguous,

a court will not add terms in order to reach a result more equitable to one of the parties.”); Dkt. No.

26-5, Schedule F. The court declines to rewrite the Mortgage.

        Juza also argues that he had an affirmative obligation under Section 15 of the Mortgage to

obtain the Trust’s written consent before selling his equity interests in Juza II to Schmidt LLC and

that such a restriction gives him a corresponding right to hold the Trust liable for unreasonably

delaying or withholding consent. But Section 15 did not so encumber Juza. Instead, read carefully,

Section 15 rendered Juza II in default of the Loan in the event it permitted the sale or transfer of any

ownership interests in it without the Trust’s prior written consent. See Dkt. No. 13-6 at 83–86. In

other words, Juza II was responsible for seeking the Trust’s consent in the event one of its members

sought to sell its membership interest in Juza II. The complaint alleges that “Plaintiff (through his


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  Case 1:19-cv-00036-WCG Filed 06/05/19 Page 17 of 20 Document 28
counsel)” contacted KeyBank in an effort to have the sale of his individual equity interests in Juza II

to Schmidt LLC approved. Dkt. No. 1-2 at ¶ 23. That Juza rather than Juza II erroneously sought

approval under Section 15 of the Mortgage does not somehow confer upon Juza an individual right

to sue the Trust under the Mortgage.

       Wholly apart from his claim based on the Mortgage, Juza argues that he states a breach of

contract claim against the Trust under the Guaranty. Specifically, Juza cites to Section 5.6 of the

Guaranty, which provides in part that “Guarantor may not, without the prior written consent of

Lender, assign any of its rights, powers, duties or obligations hereunder.” Dkt. No. 13-7 at 11.

Whether Schmidt’s proposal under the Purchase Agreement to execute a personal guaranty of the

Loan “in replacement of Plaintiff’s Guaranty,” Dkt. No. 1-2 at ¶ 20, constituted an assignment of

Juza’s duties or obligations under the Guaranty is no matter because this claim fails on two

independent grounds.

       First, and most simply, Juza’s complaint fails to state such a claim. The complaint contains

no allegations regarding the Trust’s alleged breach of the Guaranty. The only allegation Juza makes

to this effect is that “[t]he Trust’s actions, conduct and inactions as herein above set forth . . .

constituted a material breach of the Mortgage, the Guaranty and related loan documents.” Id. at

¶ 58. This conclusory claim, which is devoid of supporting allegations, can be rejected outright.

See Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009). The complaint does not mention Section 5.6

of the Guaranty, much less reference any specific language in the Guaranty; does not mention the

Trust’s obligations under the Guaranty or how the Trust breached the Guaranty; and does not

mention the connection, if any, between the consent standard under Section 5.6 of the Guaranty and

the consent standard set forth in Section 15 of the Mortgage. In fact, the complaint’s allegations


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  Case 1:19-cv-00036-WCG Filed 06/05/19 Page 18 of 20 Document 28
focus exclusively on the Trust’s alleged breach of Section 15 of the Mortgage. See Dkt. No. 1-2 at

¶ 23 (“On March 6, 2008, and in accordance with Section 15(c) of the Mortgage, Plaintiff (through

his counsel) transmitted via email a letter to [KeyBank].” (emphasis added)), ¶ 47 (“On June 23,

2018, Fuller, in violation of the Mortgage – as well as in violation of KeyBank’s duties and

responsibilities pursuant to the PSA - issued a ‘Termination Letter . . . .’” (emphasis added)). Juza’s

conclusory allegation of the Trust’s breach under the Guaranty is therefore insufficient to state a

plausible claim for relief.

        Second, under the Guaranty, Juza waived this claim. Article 2 and Section 2.13 of the

Guaranty provide in pertinent part: “Guarantor hereby . . . waives any common law, equitable,

statutory or other rights (including without limitation rights to notice) which Guarantor might

otherwise have as a result of or in connection with any of the following . . . [a]ny other action taken

or omitted to be taken with respect to the Loan Documents . . . whether or not such action or

omission prejudices Guarantor.” Dkt. No. 13-7 at 5, 7. Under this language, Juza waived any right,

as Guarantor, to claim personal prejudice or to seek a remedy at law or in equity related to the

Lender’s actions or inactions under the Loan Documents between Juza II and the Lender. Therefore,

to the extent that Juza attempts to allege that the Trust was obligated to approve the assignment of

Juza’s duties and obligations to Schmidt LLC under Section 5.6 of the Guaranty according to the

consent standard in Section 15 of the Mortgage, Juza has waived that claim. Juza’s failure to state

and waiver of a breach of contract claim under the Guaranty also defeats any attendant breach of

the covenant of good faith and fair dealing claim he seeks to raise under the Guaranty.

        As a final matter, Juza’s claim that he suffered a “direct injury” for which he, as Guarantor,

can pursue individual relief fails. See First Nat’l Bank of Cicero v. Sylvester, 554 N.E.2d 1063,

1071 (Ill. App. Ct. 1990) (“[G]uarantors who suffer ‘direct injury’ have standing to ‘pursue their

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  Case 1:19-cv-00036-WCG Filed 06/05/19 Page 19 of 20 Document 28
own remedies.’” (citation omitted)). Not only does Section 45 of the Mortgage independently bar

such a right, but also Juza fails to contend that he suffered a direct, as opposed to a derivative,

injury. Juza argues that the Trust’s failure to consent to the sale of his equity interests in Juza II to

Schmidt LLC caused him direct damage, but he brings such a claim under Section 15 of the

Mortgage, which only requires that Juza II seek the Trust’s consent on such a sale. Because Juza II

and the Trust were the only parties to the Mortgage and only Juza II was restricted thereunder, any

claim Juza seeks to bring under the Mortgage would be derivative of Juza II’s injuries, and therefore

Juza lacks standing to sue directly. See Mid-State Fertilizer Co. v. Exchange Nat’l Bank of Chi.,

877 F.2d 1333, 1336 (7th Cir. 1989). In other words, a successful breach of contract suit by Juza

II based on the Trust’s failure to consent under Section 15 of the Mortgage would put Juza in the

position he would have occupied had the Trust lived up to its promises, meaning Juza’s injury is

derivative and therefore cannot be pursued directly. See id. Juza’s erroneous belief that Section 15

of the Mortgage restricted his ability to sell his equity interests in Juza II—again, that section of the

Mortgage rendered Juza II in default of the Loan in the event that it did not seek and obtain consent

from the Lender before any interests in it were sold or transferred—does not transform his derivative

injury into a direct one.

                                           CONCLUSION

        For the foregoing reasons, Juza’s motion for leave to file a sur-reply (Dkt. No. 27) is

GRANTED, the defendants’ motion to dismiss (Dkt. No. 12) is GRANTED, and Juza’s complaint

is DISMISSED with prejudice. The Clerk is instructed to enter judgment accordingly.

        SO ORDERED this 5th day of June, 2019.

                                                         s/ William C. Griesbach
                                                        William C. Griesbach, Chief Judge
                                                        United States District Court

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