First American Bank v. Northampton Group Ltd.

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

FIRST AMERICAN BANK,

Plaintiff and

Counter-Defendant,

No. 23 CV 1168

v.

Judge Manish S. Shah

NORTHAMPTON GROUP LTD.,

Defendant and

Counter-Plaintiff.

MEMORANDUM OPINION AND ORDER

This dispute arises from years-long litigation in state court over a

condominium property that was plagued by water leaks. That litigation finally

concluded with First American Bank, who sold the property to Northampton Group,

prevailing over the condominium association’s claims for fraud and breach of

fiduciary duty. While that case remained pending on appeal, the Bank brought suit

in this court against Northampton seeking indemnification for the costs of defending

the state-court lawsuit. Northampton brings a counterclaim against the Bank for

breach of contract, and the Bank moves for judgment on the pleadings under Federal

Rule of Civil Procedure 12(c). For the reasons discussed below, that motion is granted.

I. Legal Standard

Federal Rule of Civil Procedure 12(c) permits any party to move for judgment

on the pleadings after the pleadings are closed. Fed. R. Civ. P. 12(c). A party can move

under Rule 12(c) “to dispose of the case on the basis of the underlying substantive

merits” or to raise a Rule 12(b) defense. Wolf v. Riverport Ins. Co., 132 F.4th 515, 518

(7th Cir. 2025) (quoting Alexander v. City of Chicago, 994 F.2d 333, 336 (7th Cir.

1993)). When a moving party challenges the sufficiency of a complaint under Rule

12(c), the same plausibility standard under Rule 12(b)(6) applies. Id. at 518–19. When

ruling on a Rule 12(c) motion, I may consider the pleadings, any exhibits attached to

the complaint, and matters of public record that are not subject to reasonable dispute.

See id. and South Branch LLC v. Commonwealth Edison Co., 46 F.4th 646, 648 (7th

Cir. 2022).

II. Background

I assume familiarity with the earlier order denying Northampton’s motion to

dismiss. See First Am. Bank v. Northampton Grp. Ltd., No. 23-CV-1168, 2024 WL

1302788 (N.D. Ill. Mar. 27, 2024). First American Bank sold the Fountain Square on

the River Condominiums to Northampton Group in 2014. [1] ¶ 11.1 Three years later,

the Fountain Square on the River Condominium Association brought claims for fraud

and breach of fiduciary duty against the Bank, several of its board members, the

developer, and the general contractor in the Circuit Court of Kane County. [52-2].

The Bank filed a third-party complaint against Northampton seeking indemnification

under the contract for sale. [25-1]. The trial court dismissed the Bank’s complaint

without prejudice, to be maintained until “the whole thing is final.” [17-2] at 17. The

1 Bracketed numbers refer to entries on the district court docket. Referenced page numbers

are taken from the CM/ECF header placed at the top of filings. This court has jurisdiction

because First American Bank, as trustee, and First American Bank are citizens of Illinois,

Northampton Group is a citizen of Canada, and the amount in controversy exceeds $75,000.

[1] ¶¶ 3–7, 26–27; 28 U.S.C. § 1332(a). The parties apply Illinois law. See generally [52], [60],

[61]; Paulsen v. Abbott Lab’ys, 39 F.4th 473, 477 (7th Cir. 2022) (citations omitted). For sake

of simplicity, I refer to First American Bank as one entity. [1] ¶¶ 3–4.

state court ultimately dismissed the underlying fraud claims with prejudice, [1-3],

and the Association appealed the judgment, [17-3].

The litigation in this court concerns the Bank’s breach of contract claim against

Northampton to enforce the indemnification clause. [1]. After I denied Northampton’s

motion to dismiss, Northampton answered the complaint and filed a counterclaim for

breach of contract against the Bank. [32]. Northampton alleges that the Bank

breached the contract for sale by failing to disclose information related to defects that

caused the water leaks. [32] ¶¶ 117–29. Northampton alleges that Bank-appointed

members of the Condominium Association “facilitated the adoption of assessments

and reserves they knew (or should have known) would be inadequate” and “knowingly

enabled [the Bank] to present financial statements on the rental operations… which

contained no provision for major work to permanently correct the causes of the water

infiltration problems.” [32] ¶ 117. These financial statements and the failure to

disclose “latent defects” induced Northampton to purchase condominium units at a

higher price. [32] ¶ 118. Northampton alleges that the Bank was obligated to disclose

certain documents containing information related to: (1) defects; (2) “the Bank’s band-

aid approach to correcting the defects”; (3) constructions reports; or (4) “anticipated

costs of properly correcting the causes of the water filtration problems.” [32] ¶ 118.

Northampton requested “structural and engineering reports” as part of its due

diligence process but only received an engineering report from a third-party firm

dated December 22, 2009, indicating that “to the best of [the firm’s] knowledge, all

active leaks have been addressed.” [32] ¶ 122. Northampton claims that the Bank

failed to disclose at least eight other engineering reports (all predating the December

22, 2009 report) dealing with leakage issues; the Bank and its board members were

the only people with knowledge of “latent defects” and the information in those third-

party reports; and the Bank concealed these reports to induce Northampton’s

purchase. [32] ¶ 120–23.

After attempting settlement, the parties requested a stay of the proceedings

pending the outcome of the appeal. [46]. I granted the stay. [47]. The appellate court

has since affirmed the trial court’s dismissal of the condominium association’s claims

for fraud and breach of fiduciary duty against the Bank, and the Illinois Supreme

Court denied the Association’s petition for leave to appeal. See Fountain Square on

the River Condo. Ass’n, Ltd. v. First Am. Bank, 2024 IL App (2d) 230076-U, appeal

denied, No. 131333, 2025 WL 951934 (Ill. Mar. 26, 2025).

III. Analysis

First American Bank argues that the doctrine of res judicata bars

Northampton’s counterclaim for breach of contract. [52] at 5, 15–18. In the

alternative, the Bank argues that (1) Northampton’s breach of contract counterclaim

rests on allegations of fraud and concealment that do not satisfy Rule 9(b)’s pleading

requirements and (2) specific terms in the contract for sale preclude reliance on any

representations or omissions by the Bank. [52] at 6, 9–15.

Illinois law applies. See Allen v. McCurry, 449 U.S. 90, 96 (1980). I am required

to give the same preclusive effect to a state court judgment as any Illinois court

rendering judgment would grant it. 28 U.S.C. § 1738; Matsushita Elec. Indus. Co. v.

Epstein, 516 U.S. 367, 373 (1996). Claim preclusion, or res judicata, promotes judicial

economy by barring “multiple lawsuits between the same parties where the facts and

issues are the same.” Lutkauskas v. Ricker, 2015 IL 117090, ¶ 44; River Park, Inc. v.

City of Highland Park, 184 Ill.2d 290, 319 (1998). Claim preclusion requires: (1) a

final judgment on the merits; (2) an identity of cause of action; and (3) identity of the

parties or their privities. Lutkauskas, 2015 IL 117090, ¶ 44. If those requirements

are satisfied, a party is barred from relitigating matters actually decided in the first

proceeding or matters that could have been decided in the first proceeding. Id.

The finality requirement is satisfied. The state court’s judgment dismissing the

Association’s fraud claims against the Bank constitutes a final judgment on the

merits. See Richter v. Prairie Farms Dairy, Inc., 2016 IL 119518, ¶ 24 (a final

judgment “terminate[s] the litigation and fix[es] absolutely the parties’ rights, leaving

only enforcement of the judgment”). The appellate court affirmed the dismissal, and

the Supreme Court denied the petition for leave to appeal. See Fountain Square on

the River Condo. Ass’n, Ltd. v. First Am. Bank, 2024 IL App (2d) 230076-U, appeal

denied, No. 131333, 2025 WL 951934 (Ill. Mar. 26, 2025); Dookeran v. Cnty. of Cook,

2013 IL App (1st) 111095, ¶ 18 (a judgment becomes final when the possibility of

appellate review has been exhausted).

Under Illinois law, different claims are considered the same cause of action “if

they arise from a single group of operative facts, regardless of whether they assert

different theories of relief.” River Park, Inc., 184 Ill.2d at 311. “[T]he dismissal of a

single theory of recovery against a particular defendant operates as a final

adjudication of all claims based on other theories of recovery that could have been

brought as part of the initial action, as long as they arise from the same core of

operative facts.” Lutkauskas, 2015 IL 117090, ¶ 47. Relevant factors include “whether

the facts are related in time, space, origin, or motivation, whether they form a

convenient trial unit, and whether their treatment as a unit conforms to the parties’

expectations or business understanding or usage.” River Park, 184 Ill.2d at 312

(quoting Restatement (Second) of Judgments § 24 (1982)).

Northampton acknowledges that its counterclaim involves building defects at

issue in the state court lawsuit, but it says that the two cases involve different

transactions, time periods, and parties. [60] at 7. Northampton distinguishes the

state-court lawsuit as involving claims from 2009 and 2010 that the Bank and its

board members failed to “properly correct, disclose and budget for the correction of

the defects that caused the water penetration problems.” In contrast, Northampton

asserts that its counterclaim here involves the Bank’s failure to provide documents

that Northampton was entitled to receive.2 [60] at 11, 13–16.

Northampton’s allegations for breach of contract in this case significantly

overlap with the Association’s allegations of fraud in the state-court litigation. See

River Park, 184 Ill.2d at 314 (noting that the “most telling indication of identity of

cause of action” was the parallels between factual allegations in the state complaint

and federal complaint). Northampton chiefly relies on allegations of third-party

2 Northampton admits that paragraph 118 of the counterclaim mistakenly alleges that the

Bank was required to produce documents under the Illinois Condominium Act. [60] at 11 n.3.

The counterclaim also fails to allege specific contractual provisions, but Northampton asserts

in its response brief that it was entitled to documents under Sections 22(a) and 27(a) of

contract. [60] at 11–13. Section 22 covers “Condominium Disclosures and Other Matters.”

[52-1] at 17. Section 27 covers the “Inspection Period and Right of Entry.” [52-1] at 20–21.

engineering reports from 2009 and the Bank’s knowledge about defects. [32] ¶ 122.

Northampton says that its counterclaim in this case arises from a contractual right

to disclosures whereas the Association’s claim against the Bank arose in part from

the fiduciary duty owed by members of a board of a condominium association to unit

owners. [60] at 4–5, 8. The counterclaim may be stylized as a breach of contract, but

it rests on allegations that the Bank and its officers “were the only Condominium

Association persons with knowledge of the latent defects and knowledge of [third-

party engineering] reports advising that work done in 2009 would not provide a

permanent solution the water infiltration problems.” [32] ¶ 120. It also rests on the

allegation that the eight undisclosed engineering reports revealed “latent defects”

and that the Bank’s “incomplete disclosure” amounted to fraudulent concealment.

[32] ¶ 123. Those engineering reports were at issue in the state-court litigation. See

[1-3] at 7–11. The court considered the engineering firm’s final report dated December

22, 2009, that “all active leaks have been addressed.” [1-3] at 9. It also addressed the

Association’s claim that the Bank “withheld information to hide [its] ‘band-aid’

approach” for an independent inspection in 2010 evaluating property conditions and

estimating anticipated costs. [1-3] at 11–12. The court also addressed the “as-is”

provision in the 2014 contract for sale:

Northampton agreed to purchase the property in its present condition.

Furthermore, the provision stated Northampton relied on its own examination

and inspections of the property and not any of FAB’s materials or

information… FAB made no warranty or representation, express or implied

regarding the property and disclaimed any warranty, guaranty or

representation concerning the nature and condition of the property.

Additionally, Northampton “releases, discharges and forever acquits [FAB]…

all of their respective officers, directors, shareholders, employees, agents…

from all demands, claims, causes of actions, liabilities...”

[1-3] at 15 (emphasis in original). Although an “as-is” provision does not shield a seller

for liability for fraud, the court found that the contractual provision “further defeats

[the Association’s] claims” regarding the Bank’s misrepresentations. [1-3] at 16.

Northampton relies on a different theory relief, but its counterclaim implicates

the same core facts at issue in the state-court litigation: what the engineering reports

from 2009 revealed about the status of water leaks, the Bank’s (or board members’)

knowledge about the information in those reports, and the Bank’s withholding of

knowledge related to defects. [32] ¶¶ 118–22. “[S]imply alleging a new theory of

recovery is insufficient to assert a different cause of action, where multiple theories

of recovery are predicated on the same core of operative facts.” Lutkauskas, 2015 IL

117090, ¶ 47; see also Chicago Bd. of Educ. v. Chicago Tchrs. Union, Loc. No. 1, IFT-

AFT, AFL-CIO, 2024 IL App (1st) 240613, ¶ 29 (“[T]he transactional approach is

concerned with foreclosing subsequent claims arising out of the same transaction,

even if the claims are substantively different.”). Northampton’s argument on the

different time periods and transactions would be on firmer footing if the state-court

litigation didn’t also implicate the 2014 sale. But the Association raised allegations

about the Bank’s concealment of defects during the sale of the property to

Northampton. See Fountain Square on the River Condo. Ass’n, 2024 IL App (2d)

230076-U, ¶ 27 (“Plaintiff alleged that defendants concealed the defects in order to

profit from the sale of the building to Northhampton [sic] by withholding the

existence and extent of the defects.”). Because Northampton’s counterclaim involves

the same core of operative facts as the state-court litigation, identity of cause of action

is satisfied.

The condominium association brought the state-court suit, and the

counterclaim here is by Northampton. Privity exists between parties “who adequately

represent the same legal interests.” People ex rel. Burris v. Progressive Land Devs.,

Inc., 151 Ill.2d 285, 296 (1992) (citation omitted). “[T]he identity of the interest

controls, not the nominal identity of the parties.” State Farm Fire & Cas. Co. v. John

J. Rickhoff Sheet Metal Co., 394 Ill.App.3d 548, 559 (1st Dist. 2009). “There is no

generally prevailing definition of privity,” so the inquiry “requires careful

consideration of the circumstances of each case.” Apollo Real Est. Inv. Fund, IV, L.P.

v. Gelber, 403 Ill.App.3d 179, 190 (1st Dist. 2010) (internal quotation marks omitted).

“A nonparty may be bound under privity if his interests are so closely aligned to those

of a party that the party is the virtual representative of the nonparty.” City of

Rockford v. Unit Six of Policemen’s Benevolent & Protective Ass’n of Illinois, 362

Ill.App.3d 556, 563 (2d Dist. 2005).

It’s undisputed that Northampton’s sole owner is Ken Campbell and that

Campbell also served as the President of the Fountain Square on the River

Condominium Association since 2014. [32] ¶ 6. Because Campbell became majority

owner of the condominium units and President of the Association upon the Bank’s

sale of the property to Northampton, the Bank argues that this link is sufficient to

establish privity between the Association and Northampton. [52] at 17. Northampton

maintains that it does not have the same legal interests as the Association because

the Association was not a party to the 2014 sale and therefore lacked standing to

bring a breach of contract claim. [60] at 8–9.

Standing and privity are distinct concepts. Ovnik v. Podolskey, 2017 IL App

(1st) 162987, ¶ 29. “Standing refers to whether a litigant is entitled to have the court

decide the merits of a dispute or a particular issue and requires some injury in fact

to a legally recognized interest. Privity, in turn, exists when parties adequately

represent the same legal interests, irrespective of their nominal identities.” Id.

(internal quotation marks and citations omitted). Northampton relies on Mount

Mansfield Insurance Group, 372 Ill.App.3d 388 (1st Dist. 2007), to argue that the

Association’s lack of standing to bring a breach of contract claim in the state-court

lawsuit precludes a finding of privity with Northampton. [60] at 8. The court in Mount

Mansfield stated that, “where a party has no standing to bring a cause of action on

behalf of another party, either individually or derivatively, it also must be said to lack

privity with the other party because it cannot adequately represent the other party’s

legal interests.” 372 Ill.App.3d at 394. But that case arose from the specific context of

shareholder derivative suits. Id. at 393–94. The court noted “[t]he notions of standing

and privity are interrelated here” because shareholders in the previous action only

pursued individual rather than derivative rights and so could not have adequately

represented the legal interests of the non-party corporate subsidiary in a subsequent

action. Id. at 394. Mount Mansfield does not set a categorical rule on standing and

privity. The Association may have lacked standing to bring a breach of contract claim

against the Bank, but it had standing to pursue monetary relief for injury based on

the same operative facts giving rise to Northampton’s alleged injury—the Bank’s

knowledge and concealment of property defects. In applying res judicata, Illinois

courts focus on the underlying facts rather than specific claims for relief. See

Progressive Land Devs., Inc., 151 Ill.2d at 295 (“A cause of action is defined by the

facts which give the plaintiff a right to relief.”); Lutkauskas, 2015 IL 117090, ¶ 51

(privity satisfied even though plaintiff “asserted different theories of recovery,

[because] the conduct that formed the basis for his claims was the same as that

underlying the original plaintiffs’ claims, and he sought the same relief.”). The

Association may not have had standing to pursue an identical claim as Northampton,

but that does not defeat a finding of privity.

“Corporations and their officers, directors, and shareholders are in a category

of relationships that may establish privity, for purposes of res judicata or collateral

estoppel.” Apollo, 403 Ill.App.3d at 191. “Where a closely held corporation is a party

to litigation, those stockholders who are in complete control of the corporation are, in

effect, in complete control of the litigation, and where no one other than the parties

to the suit have an interest in the subject matter, they are bound by the decision

regardless of the technical distinctions involved in the use of the term ‘privity.’” Id.

(cleaned up). For example, a corporation that was a party to one lawsuit was in privity

with the president of the corporation in a second lawsuit where the president owned

or controlled the corporation’s stock at the time of the prior litigation. Id.

(summarizing C.I.S., Inc. v. Kann, 76 Ill.App.3d 109 (2d Dist. 1979)). Campbell’s

ownership interest in Northampton and his role as president of the Association does

not neatly fit into this category. [60] at 9. Campbell was never a party to the state-

court proceeding in his capacity as sole owner of Northampton or as president of the

Association. Still, the privity inquiry is case-specific, and the record reveals a close

alignment between the Association’s legal interest in the state-court litigation and

Northampton’s legal interest in the condominium property in this case. Both

Northampton and the Association share the same interest in establishing the Bank’s

knowledge and failure to disclose information about property defects causing water

leaks. Cf. Agolf, LLC v. Vill. of Arlington Heights, 409 Ill.App.3d 211, 220 (1st Dist.

2011) (“[P]rivity clearly exists between parties who share a mutual or successive

relationship in property rights that were the subject of an earlier action.”).

Northampton seeks damages for purchasing units at an artificially inflated price and

for costs “remedying the defects that the Bank knew of prior to the sale and concealed

from Northampton.” [32] ¶ 128. The Association sought damages for costs and

expenses of repair work to the property in the state-court litigation. See, e.g., [52-2]

¶¶ 100, 120–21.

Particularly relevant to this case is that Campbell participated in the state-

court litigation against the Bank. The Association submitted an affidavit from

Campbell in his capacity as the President of the Board of Directors stating that the

2009 reports demonstrate the repairs were a “stop gap measure.” [1-3] at 10–11

(rejecting affidavit). In Agolf, LLC v. Village of Arlington Heights, the court found

privity between a prior party and the non-party plaintiff where the “plaintiff

undoubtedly knew about [the prior] litigation from its inception and knew the

contents of its legal assertions against defendant.” 409 Ill.App.3d at 221. There, the

plaintiff’s president and manager had testified at the prior plaintiff’s trial against the

same defendant. Id. Similarly, Campbell participated in the state-court litigation

against the Bank from the onset of litigation and proffered an affidavit on the

Association’s behalf. Cf. Restatement (Second) of Judgments § 39, cmt. a (1982) (“A

person who assumes control of litigation on behalf on another has the opportunity to

present proofs and argument on the issues litigated. Given this opportunity, he has

had his day in court and should be concluded by the result.”).3

The Association’s pleadings and arguments demonstrate that it adequately

represented Northampton’s legal interest in establishing the Bank’s liability for

knowledge and concealment of property defects. See Progressive Land Devs., Inc., 151

Ill.2d at 297 (looking to the “extensiveness of the pleadings and the briefing” to

determine whether a nonparty’s interest was adequately represented at the prior

proceeding). The Association’s allegations and assertions extended to the Bank’s

representations made in connection with the property sale. See Fountain Square on

the River Condo. Ass’n, 2024 IL App (2d) 230076-U, ¶ 27 (noting the Association’s

allegation that “defendants concealed the defects in order to profit from the sale of

the building to Northhampton [sic] by withholding the existence and extent of the

3 Section 39 of the Restatement (Second) of Judgments states: “A person who is not a party

to an action but who controls or substantially participates in the control of the presentation

on behalf of a party is bound by the determination of issues decided as though he were a

party.” This section applies to issue preclusion, see cmt. b, but the identity of interest inquiry

under Illinois law is the same under either claim or issue preclusion. See John J. Rickhoff

Sheet Metal Co., 394 Ill.App.3d at 559 (“[R]egardless of which of the two doctrines applies,

only privity is in dispute, and privity is the same under either doctrine.”).

defects”), ¶ 38 (rejecting as conclusory that defendants’ “failures and omissions were

‘implemented for the purpose of maximizing… profits in the development and sale of

the Complex and units in the Association and to avoid their share of assessment

responsibility for reserves and repairs, all to the detriment of the Association”). In

sum, Ken Campbell’s sole ownership of Northampton, his dual role as President of

the Association, his active involvement in the state-court litigation, as well as the

nature of the Association’s pleadings and arguments against the Bank are sufficient

to establish privity between Northampton and the Association. All three

requirements for claim preclusion are satisfied.

Though the doctrine of res judicata receives “liberal construction and should

be applied without technical restrictions… [it] should not be applied so rigidly as to

defeat the ends of justice.” McHenry Sav. Bank v. Moy, 2021 IL App (2d) 200099, ¶ 38.

Courts do not apply the doctrine if it would be “fundamentally unfair or would create

inequitable or unjust results,” keeping in mind the doctrine is “intended to be used

as a shield, not a sword.” Id. Here, the Bank invokes claim preclusion so that it does

not have to relitigate the state court’s judgment freeing it from accusations of fraud.

See Agolf, 409 Ill.App.3d at 227 (permitting plaintiff to pursue lawsuit would

“essentially condemn defendant to relitigate issues already decided in all potential

suits filed by anyone with a property interest”). The ends of justice favor preclusion.

Claim preclusion bars Northampton’s counterclaim for breach of contract. The

counterclaim also fails as a matter of law. Northampton’s complaint includes

allegations of fraudulent inducement, breach of implied duty of good faith and fair

dealing, and breach of contract based on a duty to disclose certain documents under

the Illinois Condominium Property Act. [32] ¶¶ 85–86, 104, 112–29. Those are all

different claims under Illinois law with claim-specific elements. Fraudulent

concealment requires a plaintiff to allege the defendant concealed a material fact that

defendant had a duty to disclose. See Connick v. Suzuki Motor Co., 174 Ill.2d 482, 500

(1996). A duty to disclose only arises under specific contexts, typically from a fiduciary

relationship. See id. It does not ordinarily extend to business transactions. Ransom

v. A.B. Dick Co., 289 Ill.App.3d 663, 672 (1st Dist. 1997) (“[O]rdinarily in a business

transaction each party guards his own interests and no fiduciary duty exists.”).

Northampton does not allege a fiduciary or other special relationship with the Bank.

Additionally, Illinois courts do not view the covenant of good faith and fair dealing as

an “independent source of duties for the parties to a contract.” Fox v. Heimann, 375

Ill.App.3d 35, 42 (1st Dist. 2007). The “duty” is “essentially used as a construction aid

in determining the intent of the parties where an instrument is susceptible of two

conflicting constructions.” Id.

In any case, Northampton clarifies in its response brief that it only alleges a

breach of contract for nondisclosure under Sections 22(a) and 27(a) of the contract.4

[60] at 11–12. “In stating a claim for breach of contract, only a duty imposed by the

terms of the contract can give rise to the breach.” Martin v. State Farm Mut. Auto.

4 Generally, a plaintiff may not amend their complaint through their response brief. Pirelli

Armstrong Tire Corp. Retiree Med. Benefits Tr. v. Walgreen Co., 631 F.3d 436, 448 (7th Cir.

2011). Because the Bank adequately responded to Northampton’s newly raised allegations in

reply, I exercise discretion to construe Northampton’s allegations in light of its response brief.

Ins. Co., 348 Ill.App.3d 846, 853 (1st Dist. 2004). Whether a contract imposes a

particular legal duty is a question of law. Fox, 375 Ill.App.3d at 44.

Section 22(a) titled “Condominium Disclosures and Other Matters” provides,

[52-1] at 17:

Seller shall not be required to comply with the disclosure requirements of

Sections 22 or 22.1 of the Illinois Condominium Property Act, and Purchaser

shall obtain whatever condominium disclosure information if [sic] may desire

through its “due diligence” during the Inspection Period.

Section 27 titled “Inspection Period and Right of Entry” provides, [52-1] at 20

(emphasis in original):

(A) WITHIN THREE (3) CALENDAR DAYS FROM THE DATE OF THIS

CONTRACT SELLER SHALL DIRECT ITS REPRESENTATIVES TO

PROVIDE THE FOLLOWING ITEMS TO THE BUYER: A CURRENT

RENT ROLL INCLUDING ANY DEPOSITS AND ARREARS,

MONTHLY OPERATING STATEMENTS FOR THE LAST TWO YEARS,

COPIES OF RENTAL AGREEMENTS, LEASES, INSURANCE

POLICIES, COPIES OF CONDOMINIUM DOCUMENTATION

INCLUDING MINUTES OF CONDOMINIUM MEETINGS FOR THE

LAST TWO YEARS.

(B) During the period ending on the sixtieth (60th) day following the date of

this Contract (the “Due Diligence Period”), Purchaser is granted the

opportunity to physically inspect and to cause one or more inspectors,

appraisers, engineers, employees or other contractors of Purchaser to

physically inspect the Premises…

Northampton argues that the Bank had a duty to disclose all third-party engineering

reports as: (1) “copies of condominium documentation including minutes of

condominium meetings for the last two years” and (2) “whatever condominium

disclosure information it may desire through its ‘due diligence’ during the Inspection

Period.” [60] at 11–13.

Neither provision of the contract imposed a duty on the Bank to disclose the

engineering reports at issue. Northampton acknowledges that Section 22(a) relieves

the Bank of the duty to disclose documents under the Illinois Condominium Property

Act, but it points to the second clause as mandating disclosure. The second clause of

the sentence explains that instead of through the Illinois Condominium Property Act,

“Purchaser shall obtain whatever condominium disclosure information if [sic] may

desire through its ‘due diligence’ during the Inspection Period.” [52-1] at 20. Although

there is no limitation on the type of condominium disclosure information that

Northampton could request, Section 22(a) does not impose an obligation on the Bank

to produce specific documents, like the engineering reports. The section merely

directs Northampton to do its due diligence. Northampton sought the engineering

reports and may view the Bank’s disclosure limited to the most recent December 2009

report as incomplete, but Section 22(a) does not give Northampton the relief it seeks.

Nothing in Section 22(a) required the Bank to affirmatively disclose the predecessor

reports.

Section 27(a) imposes an affirmative disclosure requirement on the Bank to

provide, among other things, “copies of condominium documentation including

minutes of condominium meetings for the last two years.” The Bank points out that

(1) engineering reports are not specified in this category of required documents and

(2) reports from 2009 would fall outside of the two-year time period. [61] at 5.

Northampton reads the two-year time limit to apply only to “minutes of condominium

meetings” rather than extending to “copies of condominium documentation.” [60] at

14. That’s an unreasonable stretch. The two-year limitation is naturally read as

applying to the whole clause, i.e. to “copies of condominium documentation including

minutes of condominium meetings.” Cf. Facebook, Inc. v. Duguid, 592 U.S. 395, 403

(2021) (when a modifier immediately follows a “concise, integrated clause,” it should

be read to apply to the whole of the cohesive preceding clause). Northampton points

out that the Bank produced the December 2009 report, so the Bank clearly believed

it was required to produce documents outside of the two-year time limitation. The

Bank’s production of the 2009 report (perhaps as part of its cooperation with

Northampton’s due diligence under Section 22(a)) doesn’t mean engineering reports

were considered “copies of condominium documentation,” and absent any indication

in the contract that they were, the Bank was not contractually required to disclose

those under Section 27(a).

Because neither section of the contract that Northampton points to created a

contractual duty for the Bank to disclose the engineering reports at issue, the Bank

did not breach the contract as a matter of law.

IV. Conclusion

First American Bank’s motion for judgment on the pleadings, [51], is granted.

Northampton’s counterclaim for breach of contract is dismissed with prejudice.®

ENTER:

Manish 8. Shah

United States District Judge

Date: May 14, 2025

5 Dismissal with prejudice is proper where the moving party raises the affirmative defense of

res judicata through a Rule 12(c) motion for dismissal on the merits. See Carr v. Tillery, 591

F.3d 909, 919 (7th Cir. 2010).

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