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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