Now playing in Chicago federal court: A lawsuit by a nationwide movie theater chain against a suburban environmental consultant for allegedly falsifying deeds to "extort" payment from the chain for land the company already owned at its South Barrington cinematic multiplex.

Missouri-based American Multi-Cinema, Inc., which is involved in operating 347 theaters across the U.S., filed suit iin February against environmental consultant George B. Kanagin, of suburban Gilberts, and Kanagin’s companies – Phoenix & Associates, Inc., Phoenix Environmental, Inc. and Land of Lincoln Conservation, Inc. AMC lodged the suit in U.S. District Court for Western Missouri, but Kanagin asked for venue to be moved to U.S. District Court for Northern Illinois. U.S. District Judge Dean Whipple granted Kanagin’s request in June, and the case landed June 30 in district court in Chicago.

The suit alleges Kanagin slandered property title, and Kanagin and his companies committed fraud, conspired to commit fraud, breached their fiduciary duty and breached contract. AMC also wants a declaratory judgment.

The matter began in 1996, when AMC bought 93 acres at the northwest corner of Interstate 90 and Barrington Road in South Barrington in northwest Cook County. Portions of the property were designated as “wetland areas” and subject to oversight by the U.S. Army Corps of Engineers. Wetlands are areas saturated or inundated with enough water to support kinds of vegetation that usually only grow in water-saturated soil.

To develop the land, AMC needed to satisfy Army Corps requirements, as well as those of the village of South Barrington, the Metropolitan Water Reclamation District and the Illinois Environmental Protection Agency. To that end, AMC hired Kanagin, who listed himself as managing partner of Phoenix & Associates, in October 1997. The contract was renewed in 2006, but AMC said it learned later Phoenix & Associates was not incorporated in Illinois at the time of the initial contract signing in 1997, despite defendants’ assertions at that time.

AMC paid defendants several million dollars during the course of the contracts and through easement, appointed one of Kanagin’s businesses – Land of Lincoln Conservation – as steward of the wetlands, according to the suit.

The theater chain acknowledged defendants did provide some service to the company, but asserted defendants’ ultimate intent of contracting with AMC was to exploit the relationship with AMC to “steal from and/or extort money or property from AMC.”

According to the complaint, Kanagin and his businesses allegedly forged quitclaim deeds in October 1997 purporting to transfer to Kanagin ownership of and interests in portions of AMC’s property. Specifically, AMC claimed defendants forged the signatures of AMC Realty President Charles Stilley and notary public Ellen Zellmer, with Kanagin eventually filing the deeds March 19, 2014, at the Cook County Recorder of Deeds office.

Less than three months later, Kanagin demanded AMC pay him $800,000 for the return of the properties named in the deeds, an act AMC termed “extortion.”

Defendants have denied AMC’s allegations.

AMC wants compensatory damages of more than $75,000 – the minimum required in federal cases where the parties are from different states – as well as punitive damages, expenses and attorney fees. AMC further wants a judge to declare the quitclaim deeds void and to prohibit defendants from taking any action in regard to the properties.

The law firm of Lewis, Rice & Fingersh, of Kansas City, Mo., is representing AMC. Defendants are represented by the South Barrington firm of Fuller & Berres, the North Barrington firm of Kelleher & Buckley and the Kansas City, Mo. firm of Foland, Wickens, Eisfelder, Roper and Hofer.

U.S. District Judge Ronald A. Guzman is presiding over the case. The case has a status hearing set for July 17.

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Organizations in this Story

Cook County Recorder U.S. Environmental Protection Agency (EPA)

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