Manistee Apartments, LLC, individually and as class representative, Plain tiff-Appellant,
City of Chicago, a municipal corporation, Defendant-Appellee.
September 28, 2016
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 1:14-cv-06813 -
Robert W. Gettleman, Judge.
POSNER, Flaum, and Manion, Circuit Judges.
Manion, Circuit Judge.
Manistee Apartments sued the City of Chicago alleging that
the City violated their due process rights by refusing to
release judgment liens until the debtors paid attorneys'
fees and costs. The district court dismissed the
plaintiff's class action complaint, holding that the
plaintiff suffered no deprivation of a constitutionally
protected property interest. The court also denied the
plaintiff's motion for reconsideration and for leave to
file an amended complaint. For the reasons below, we affirm.
September 19, 2011, the City of Chicago obtained a default
administrative judgment of $3, 540 against Manistee
Apartments, based upon a finding of various violations of the
Chicago Municipal Code. Pursuant to Illinois state law, the
City later registered this judgment with the Circuit Court of
Cook County and imposed a lien against plaintiff's real
estate. 735ILCS 5/12-101; 65ILCS 5/1-2.1-8(d). Plaintiff
contends that it first received actual notice of this lien
(as opposed to constructive notice, which it received as soon
as the lien was recorded) during routine title insurance
review and underwriting that occurred as it was preparing to
sell its properties. Upon discovery that the title to the
property was not clean, and with a pending sale, plaintiff
sought to quickly settle its bill with the City.
January 27, 2014, and in response to inquiry, the City of
Chicago provided a "payoff letter" demanding $5,
655.16. This demand letter reflected the original, undisputed
$3, 540 lien, plus $720.34 in uncontested statutory interest.
The remainder, $1, 394.82, represents collection costs and
attorneys' fees that the City demanded, and is the sole
amount in controversy before this court, an amount better
suited for small claims court in Illinois.
after the City issued the payoff letter, January 28, 2014,
the plaintiff conveyed the property via warranty deed,
alleging to an out-of-state buyer that the title was
unencumbered. Around this time, the plaintiff also settled
with the City, paying the full amount demanded, $5, 655.16,
under protest. Eight months later, plaintiff filed a class
action complaint in federal district court, alleging
violations of the Due Process Clause of the Fourteenth
Amendment, the Illinois state constitution, and other
violations of Illinois state law.
plaintiff contends that by responding to its request for a
payoff letter with a demand for payment greater than the lien
amount, the City of Chicago was violating the plaintiff's
due process rights. What the City should have done,
apparently, is one of two things. It could have responded
with information the plaintiff already had-the publicly
available lien recorded in Cook County and the publicly
available statutory interest calculation, along with an offer
to settle for that amount or less. It also could have replied
with a lawsuit in Illinois court seeking from plaintiff the
fees and costs. What was not permissible, in the
plaintiff's view, was asking for anything more. By
refusing to release the lien immediately or take action in
Illinois state court, the plaintiff contends, the City was
depriving it of a property interest and thus needed to
provide the plaintiff due process. Since the City already had
a judgment, however, it had no incentive to settle for less.
Manistee's litigation position, it seems, was
intentionally unreasonable: more calculated to triggering a
ripe lawsuit than actually seeking quick release of a lien.
district court disagreed, granting the City's motion to
dismiss. It noted that the plaintiff failed to allege facts
that plausibly supported the assertion that it paid the
City's demand under duress. Because it was not under
duress, Manistee's payment was voluntary. And because its
payment was voluntary, Manistee was not deprived of a
constitutionally protected property interest, and therefore
failed to state a claim under 42 U.S.C. §1983.
no violation of the federal Constitution, the district court
went on to find no violation of the state constitution
("the same tests apply"), and declined to exercise
supplemental jurisdiction over the purely state law claims.
Plaintiff then moved for reconsideration and leave to amend
the class action complaint, which the court denied. Plaintiff
appeals both the dismissal of its case and the denial of its
motions for reconsideration and leave to amend.
review a district court's order granting a motion to
dismiss under Rule 12(b)(6) de novo. Andonissamy v.
Hewlett-Packard Co.,547 F.3d 841, 847 (7th Cir. 2008).
We assume all well-pleaded allegations are true and draw all
reasonable inferences in the light most favorable to the
plaintiff. To survive such a motion, a complaint must
"state a claim to relief that is plausible on its
face." Justice v. Town of Cicero,577 F.3d 768,
771 (7th Cir. 2009). We review a district court's denial
of a motion for reconsideration under Rule 59(e) and denial
of a motion for leave to amend only for abuse of ...