Pearson v. Garrett-Evangelical Theological Seminary, Inc.

790 F. Supp. 2d 759, 2011 U.S. Dist. LEXIS 51342, 2011 WL 1838881
CourtDistrict Court, N.D. Illinois
DecidedMay 13, 2011
Docket1:11-cr-00019
StatusPublished
Cited by22 cases

This text of 790 F. Supp. 2d 759 (Pearson v. Garrett-Evangelical Theological Seminary, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pearson v. Garrett-Evangelical Theological Seminary, Inc., 790 F. Supp. 2d 759, 2011 U.S. Dist. LEXIS 51342, 2011 WL 1838881 (N.D. Ill. 2011).

Opinion

MEMORANDUM OPINION AND ORDER

JOHN W. DARRAH, District Judge.

Plaintiff, Thomas L. Pearson (“Pearson”), donated money to Defendant, GarretL-Evangelical Theological Seminary, Inc. (“Garrett”), to fund a scholarship in memory of his parents. Dissatisfied with Garrett’s subsequent administration of that fund, Pearson brought this action, asserting claims for breach of contract, fraudulent misrepresentation and concealment, negligent misrepresentation, breach of fiduciary duty, and unjust enrichment. Garrett moved to dismiss all claims, asserting that Pearson lacks standing to challenge the administration of the scholarship and that all five counts fail to state claim for relief.

BACKGROUND

The following facts are taken from Pearson’s Amended Complaint and exhibits attached thereto and are accepted as true for purposes of this Motion to Dismiss. 1 Pearson is a- citizen and resident of Oklahoma. Garrett is an Illinois not-for-profit corporation with its principal place of business in Evanston, Illinois. The amount in controversy exceeds $75,000. Subject-matter jurisdiction is premised on diversity of citizenship.

Garrett provides graduate-level education to students training to become members of the clergy affiliated with the United Methodist Church. In 2006, Pearson pledged to make a three-installment gift of $1.2 million to Garrett for purposes of funding a scholarship program (the “Pearson Scholarship”). Equal installments of $400,000 were to be paid in 2006, *762 2007, and 2008 and were, in fact, paid according to that schedule. The gift was pledged in honor of Pearson’s parents, Richard L. and Ramalee E. Pearson. Richard Pearson graduated from Garrett in 1953 and served as a pastoral minister for the United Methodist Church. He served in Iowa for over forty years.

Richard is now deceased, but he discussed and designed the scholarship at issue with his son before he died. As alleged in the Amended Complaint, the gift was conditioned on Garrett’s ability to find bright, young scholars dedicated to pursuing ministry work in Iowa:

The Pearson family agreed and determined that the Pearson Scholarship would only support upcoming generations of Garrett students who were among the brightest young scholars and who planned to undertake the same pastoral ministry work in Iowa to which Richard and Ramalee had dedicated their lives. Mr. Pearson’s gift to Garrett contemplated that if Garrett was unable to fulfill these objectives, the scholarship funds would be moved to DePauw University in Indiana to establish a scholarship fund honoring his parents at that institution rather than at Garrett.

Am. Compl. ¶ 7. Pearson alleges that, after four years, it was clear that Garrett could not meet the conditions that accompanied Pearson’s gift and that the funds should be relinquished and moved to DePauw University.

LEGAL STANDARD

A party may move to dismiss an action for lack of standing under Federal Rule of Civil Procedure 12(b)(1). See Retired Chicago Police Ass’n v. City of Chicago, 76 F.3d 856, 862 (7th Cir.1996). In considering a motion to dismiss for lack of subject-matter jurisdiction under Rule 12(b)(1), the district court must accept the complaint’s well-pleaded factual allegations as true and draw all reasonable inferences from those allegations in the plaintiffs favor. Transit Exp., Inc. v. Ettinger, 246 F.3d 1018, 1023 (7th Cir.2001). “[T]he question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or particular issues.” Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 444 (7th Cir.2009) (quoting Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)). The plaintiff carries the burden of establishing standing. Id. A court ruling on a motion to dismiss under Rule 12(b)(1) may rely upon affidavits and other materials supporting its motion. United Phosphorus Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir.2003).

When ruling on a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the court views the complaint’s allegations in a light most favorable to the plaintiff, draws all reasonable inferences in favor of the plaintiff, and takes as true all well-pleaded facts and allegations in the complaint. Reger Dev., LLC v. Nat'l City Bank, 592 F.3d 759, 764 (7th Cir.2010). Federal Rule of Civil Procedure 8(a)(2) requires “a short and plain statement of the claim showing that the pleader is entitled to relief’ in order to provide the defendant with fair notice of the plaintiffs claims and the grounds upon which they rest. Bell Atl. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955,167 L.Ed.2d 929 (2007) (Twombly). To survive a motion to dismiss, the plaintiffs claim must be plausible and the factual allegations of the complaint must be “enough to raise a right to relief above the speculative level.” Brooks v. Ross, 578 F.3d 574, 581 (7th Cir.2009) (Brooks) (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955). The court does not need to accept as true, “legal conclusions or threadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Id. Moreover, the court *763 is not bound by a plaintiffs legal characterization of the facts or required to ignore facts set forth in the complaint that undermine a plaintiffs claim. Scott v. O’Grady, 975 F.2d 366, 368 (7th Cir.1992).

ANALYSIS

Each of Pearson’s five claims involves an alleged agreement between Pearson and Garrett. Both parties seem to agree that Illinois law applies to all claims at issue, although both also cite law from other jurisdictions to support their respective arguments. Additionally, the “Gift Agreement” between Pearson and Garrett, dated October 18, 2006, which is attached as Exhibit A to Pearson’s Amended Complaint, expressly provides that it “shall be governed by the law of Illinois.” Gift Agreement ¶ 11. Illinois courts typically honor the law of the state chosen by contracting parties. Old Republic Ins. Co. v. Ace Prop. & Cas. Ins. Co., 389 Ill.App.3d 356, 329 Ill.Dec. 432, 906 N.E.2d 630, 636 (2009).

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Bluebook (online)
790 F. Supp. 2d 759, 2011 U.S. Dist. LEXIS 51342, 2011 WL 1838881, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pearson-v-garrett-evangelical-theological-seminary-inc-ilnd-2011.