Two law firms seeking money owed by a real estate  management company following a class action complaint are chasing the $845,000 settlement in Cook County Circuit Court, demanding Northern Trust Company be held liable for the sum for allegedly providing a letter purportedly verifying the real estate management group had the required cash on hand, when it actually did not.

In a complaint filed Nov. 15, the Law Offices of Edward T. Joyce & Associates joined the Law Offices of Jeffrey S. Sobek and the unpaid class members they represented in the case of Amanda Bonnen v. Horizon Realty Group, also a Cook County action, in trying to get money from Northern Trust. 

The Bonnen action involved a complaint Bonnen filed against Horizon, accusing it of violating the Chicago Residential Landlord Tenant Ordinance. A judge denied Horizon’s motion for summary judgment and granted class action certification, which led to settlement negotiations. 

As part of the settlement, the new complaint states, Horizon purportedly said it could pay the amount owed to class members, as well as court-determined legal fees. The lawyers say they would not have accepted the settlement offer without proof of ability to pay. When the lawyers requested Horizon provide a letter of credit, what they got was a credit reference from Northern Trust stating Horizon could pay $845,000 — “via liquid assets or lines of credit to quickly satisfy matters” — and that “Northern Trust understood that the purpose of the letter was ‘verification’ of that fact.” 

According to the complaint, the Northern Trust credit reference — dated Dec. 4, 2013, and signed by Northern Trust Senior Vice President Martin Babbo — was false as “the assets and lines of credit” the letter referenced were held by a Horizon principal and not the Realty Group itself. 

The complaint formally accuses Northern Trust of negligent misrepresentation. It says the company “was, at the very least, careless and negligent in ascertaining the truth of the statements it made in its credit letter.” When Babbo signed the letter, the complaint continued, he wasn’t aware of Horizon’s assets, hadn’t asked to see its balance sheet, had never seen any of its profit-and-loss or income statements showing any net revenues and hadn’t reviewed Horizon’s “operating agreement to determine if anyone had the obligation to capitalize.” 

The law firms say they relied on Northern Trust’s letter “without any further independent inquiry or investigation … due to the credibility that accompanies such a specific statement from a major, well-regarded, financial institution about one of its ‘established clients.’ ” They noted Northern Trust’s letter was addressed to the Cook County Circuit Court Clerk; indicated the letter should be given to anyone needing similar verification; and ‘was being issued in support of ‘judgments or settlements involving’ ” Horizon. 

In addition to a jury trial, the plaintiffs are requesting damages of at least $1 million as well as reimbursement for the costs of the complaint.

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Organizations in this Story

The Law Offices of Edward T. Joyce & Associates PC
135 S LaSalle St Ste 2200
Chicago, IL 60604

Northern Trust Corporation
50 S La salle St
Chicago, IL 60603

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