WHEATON – Chicago investor Thane Ritchie asserts in DuPage County chancery court that former Illinois Senate Majority Leader James Clayborne’s law firm filed an inaccurate and improper complaint on his behalf in Madison County last year.
Winston and Strawn of Chicago, which has replaced Clayborne’s firm as Ritchie’s counsel, admitted defects in the complaint on July 17.
Attorney Sean Wieber of Winston and Strawn wrote that the John Doe entities that sued Huizenga Managers Fund were not described correctly.
Wieber wrote that the Does were not direct parties to an operating agreement that John Sabo of Clayborne’s firm attached to the complaint, and that an affidavit Sabo submitted with the complaint did not properly relate to the Does.
“And venue may have been improper,” Wieber wrote.
He pledged to pay all fees Huizenga spent defending the action and any additional amount the court deems appropriate.
In return for confession, he asked Circuit Judge Bonnie Wheaton to protect Ritchie’s privilege over communications with Clayborne’s firm.
Huizenga had moved the previous week to waive all privilege.
Wieber wrote that Huizenga hoped to create a circular firing squad with the client impugning the judgment of the attorney and vice versa.
Clayborne and Ritchie have already turned into adversaries in St. Clair County circuit court, where Clayborne claims Ritchie owes his firm $506,537.62.
Huizenga sued Ritchie in 2007 in Cook County, seeking to rescind investment subscriptions of $6 million and $4,664,542.
Circuit Judge Peter Flynn held bench trial on 26 dates in 2010 and 2011.
In 2015, he allowed the first subscription and rescinded the second.
With interest, he awarded Huizenga $9,174,200.
Ritchie appealed and Huizenga filed a cross appeal.
In 2016, First District appellate judges ordered Flynn to rescind the first agreement and award another $6 million plus interest.
Ritchie petitioned the Illinois Supreme Court for review and didn’t get it.
In 2017, Flynn entered judgment for $12,772,529.70.
The U.S. Supreme Court denied review in January 2018.
Flynn set a post-trial hearing on Feb. 5.
Days earlier, on Jan. 31, in Madison County, Sabo and Jay Dowling of Clayborne’s firm sought a temporary order to prohibit Huizenga from disparaging Ritchie.
Circuit Judge Dave Dugan held a hearing that day without notice to Huizenga. He granted the order, set it to expire on Feb. 8, and scheduled a hearing on a preliminary injunction on Feb. 9.
Huizenga received notice and retained Russell Scott of Belleville, who filed an emergency transfer motion on Feb. 2.
Dugan set a hearing on Feb. 6.
In Flynn’s court, on Feb. 5, Huizenga’s counsel told Flynn he couldn’t argue his case without violating Dugan’s order.
Flynn delayed his case 45 days.
Next day, at Dugan’s hearing on transfer, Scott said the alleged disparagements were all documents of record in Cook County or in Delaware.
Dugan said he wasn’t aware that the remarks were limited to litigation allegations.
He transferred it to DuPage County, Huizenga’s principal place of business.
For months the action shifted to other courts.
In April 2018, in St. Clair County, Sabo sued a Ritchie entity for $20 million on behalf of a Ritchie entity.
The defendant didn’t answer, and the plaintiff moved for default judgment.
St. Clair County Associate Judge Julie Katz granted it for $20 million on June 28, and the loser filed a bankruptcy petition in Delaware on that date.
In August, a bankruptcy trustee moved to dismiss the petition for bad faith, writing that the default judgment should be closely scrutinized.
Ritchie dismissed the petition in September.
Meanwhile, Dowling apparently offended Flynn by moving to vacate his judgments as void for lack of jurisdiction.
Flynn referred the motion to state’s attorney Kimberley Foxx.
Dugan’s temporary order for the John Does expired but the action continued in DuPage County because Huizenga sought sanctions for venue abuse.
Last September, Huizenga counsel Gary Garner of Chicago argued for sanctions before Judge Wheaton in DuPage County.
“I’ve never heard a response from anyone as to how you can get a default judgment against your own client in one case by saying they didn’t appear while you also are filing things on their behalf in another court,” Garner said, according to a transcript of the hearing.
Wheaton said, “Judge Dugan was not apprised of many of the most important factors that go into the issuance of a temporary restraining order.”
She ordered sanctions but wondered against whom.
At a hearing in April, Garner said he didn’t know who authorized the suit.
“We have two entities supposedly from Bermuda, which the Bermuda government says are not even doing business,” Garner said. “They have gone to great pains to not say who they are.”
Garner said Huizenga didn’t drive a wedge between Ritchie and the firm.
“If there’s a wedge it’s because they don’t want to say who filed the false pleadings and who authorized them,” he said. “Seven months ago you said you want to know who they are. They still haven’t said.”
Ritchie counsel Dan Webb of Winston and Strawn started rattling off names.
Wheaton said to Dowling, “You look like you want to say something.”
Dowling said, “Judge Dugan had the right to either enter it as an ex parte order or -”
Wheaton said, “Let’s not go down that road.”
She said Huizenga asked for an end to serial litigation.
She compared it to whackamole, “where they have to go to several jurisdictions to fight the same fight.”
“Fourteen months after this case was originally filed, I’ve heard for the first time the identity of the plaintiffs,” Wheaton said.
The names Ritchie provided didn’t satisfy Huizenga, which moved for waiver of attorney client privilege on July 12.
Huizenga counsel Christopher Barber wrote, “They have now submitted conflicting sworn statements about who they are.”
“These irreconcilable differences, as well as other demonstrably false statements, reveal fraud and possibly perjury before this court and the Madison County court,” he wrote.
He asked how privilege exists when the Does claim they have no assets, directors, employees, or officers.
“To date, the plaintiffs have produced no discovery that bears upon their true identities,” he wrote.
Barber further wrote that the only way to get to the bottom of it was by examining documents around the time the Clayborne firm filed the action.
He wrote that a corporate representative who responded to interrogatories was hired on June 10, and that all he relied on was a transcript of Webb’s representation in April.
He wrote that the conduct of the Does constituted an attempted fraud on the court.
“Such falsities may also be punishable as perjury,” he wrote.
He wrote that power to invoke privilege rests with a corporation’s management.
“The Doe plaintiffs here have no management of their own but rather are hiring new personnel who then invoke the privilege,” he wrote.
He asked for an order compelling the Does to produce any discovery they withheld on the basis of privilege.
Ritchie’s confession and motion for a protective order followed.
Wheaton held a status conference on July 19, and it lasted about three minutes.
She said Huizenga would respond to the motion for protective order on Aug. 2, and Ritchie would reply on Aug. 16.
Arguments were set for Aug. 28.