Illinois Appellate Court Denies Recovery in Unjust Enrichment Case

In 1986, Nina Willoughby operated a small business in which she sold retail clothes in a rented store. That year, she and Louis Fideli took out a $315,000 loan and purchased the store with other properties. The store property was kept solely in Fideli’s name. However, in 2003, Willoughby missed several mortgage payments; in 2004, the bank sued and foreclosed on her shop.

Fideli made Willoughby co-owner and then sole owner of the property after which she received a loan of $577,000 from the refinancing. John Heffron helped Willoughby with the transaction. Fideli received no compensation for transferring the property to Willoughby. The property was valued at $1.2 million in a loan application.

In June 2006, Fideli filed a lawsuit against Willoughby claiming that she had promised to repay him 50% interest in the property once she had avoided the foreclosure action. He charged her with unjust enrichment.

Willoughby claimed she never agreed to give Fideli interest in the property and that he gave her the property because he could not obtain a loan given his poor credit history. Fideli admitted that he never signed a contract discussing those terms, but instead that Willoughby had promised him 50% interest nevertheless.

The trial judge ruled that although Willoughby retained the entire interest in the property, reasoning so that it was not unjust because the property was in foreclosure at the time. The court found Fideli’s testimony not to be credible, noting that he failed to memorialize his asserted agreement in writing or to seek legal counsel during that process.

Further, Fideli chose not to contact Heffron, who helped finance the transaction. Fideli claimed to have a 50% interest in Heffron’s property.

The trial judge noted that there was not “a single writing between the parties that even alludes to this so-called agreement.”

The trial court found in favor of Willoughby, and Fideli appealed.

In the appeal, Fideli maintained the trial judge was wrong in that he had met his burden of proof for showing that the court should imply a contract because Willoughby’s retention of the property without compensating him violated principles of justice, equity and good conscience. The appeals panel found that Willoughby — in obtaining Heffron as a benefactor — performed a valuable act, which is “something that Fideli could have done and was unwilling or unable to do.”

The appellate court also noted that Fideli invested no money in the property that the mortgage and taxes had always been paid by Willoughby and that Fideli had chosen not to explain why he took no steps to protect his equity in this property. The appellate court found that the evidence sufficiently supported the trial judge’s decision and affirmed the court’s order finding in favor of Willoughby and against Fideli.

Louis Fideli v. Nina Willoughby and John Heffron, 2014 IL App (1st) 133367-U (Dec. 23, 2014).

Kreisman Law Offices has been handling catastrophic injury cases, business and commercial litigation, medical malpractice lawsuits, pharmaceutical defect cases and product liability cases for individuals and families for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Sauk Village, Palatine, Skokie, South Holland, Streamwood, Markham, Lincolnwood, Justice, Kenilworth, Lansing, Hinsdale, Hillside, Harwood Heights, Hazel Crest, Tinley Park, Riverside, Frankfort, Country Club Hills, Olympia Fields, Forest Park, Elgin, Joliet, Waukegan, Romeoville, Aurora, Brookfield, Burr Ridge and Calumet Park, Ill.

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