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United States District Court,E.D. Wisconsin.

SJ PROPERTIES SUITES, Buyco, EHF.,SJ–Fasteignir, EHF, and, Askar Capital,

HF, Plaintiffs,v.

SPECIALTY FINANCE GROUP, LLC,Defendant.

No. 10–CV–00198.March 30, 2012.

Anthony K. Murdock, Joshua J. Roever,Scott R. Halloin, Halloin & Murdock SC,Milwaukee, WI, for Plaintiffs.

Christopher M. Meuler, S. Todd Farris,Friebert Finerty & St John SC, Milwaukee,WI, J. Ben Vitale, Lewis E. Hassett, MorrisManning & Martin LLP, Altanta, GA, forDefendant.

DECISION AND ORDERRUDOLPH T. RANDA, District Judge.

*1 This Decision and Order addressesDefendant Specialty Finance Group, LLC's(“SFG”) motion to dismiss the AmendedComplaint (the “Complaint”) pursuant toRule 12(b)(6) of the Federal Rules of CivilProcedure. Problems related to an ill-timedconstruction loan agreement for a 14–storymixed-use real estate development projectlocated at 1150 North Water Street, indowntown Milwaukee, Wisconsin (the“Project”) are at the core of this litigationcommenced by the Plaintiffs, SJ PropertiesSuites; BuyCo, ehf (“BuyCo”);SJ–Fasteignir, ehf (“Fasteignir”); and As-kar Capital, hf, (“Askar”) (collectively the“Icelandic Entities” or the “Plaintiffs”).

The 49–page, 239–paragraph Com-plaint asserts claims for unjust enrichment(Count I), promissory estoppel (Count II),violations of Subchapter III of WisconsinStatutes Chapter 224 (Count III), uncleanhands (Count IV), a declaration of rightsunder Wisconsin Statutes § 840.03 (CountV), a declaration of rights under WisconsinStatutes § 841.01 (Count VI), and interfer-ence with interest and physical injury toreal property (Count VII).

The factual allegations underlying thisaction span a four-year period and involvea number of entities and contracts.However, in a nutshell, the claims arebased on allegations that SFG failed tofully fund its construction loan for theProject and SFG subsequently coerced theIcelandic Entities to advance monies forthe Project. The Icelandic Entities maintainthat SFG notified them of events of defaultdue to cost overruns, caused them toprovide emergency cash to the Project, andthat, when the Project eventually collapsed,SFG refused to allow them to continuemaking payments on the loan.

Motion to DismissSFG seeks dismissal of the entire Com-

plaint. SFG contends that the Icelandic En-tities' claims for unjust enrichment (CountI), promissory estoppel (Count II), andmost of the claim alleging violations ofSubchapter III of Wisconsin StatutesChapter 224 (Count III) are barred, andthat all counts fail to state a cause of ac-tion.

For purposes of the pending motion todismiss, the Court accepts the factual alleg-ations in Icelandic Entities' Complaint astrue and draws all reasonable inferences infavor of the Plaintiffs. See Ray v. City of

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Chicago, 629 F.3d 660, 662 (7th Cir.) cert.denied, ––– U.S. ––––, 132 S.Ct. 100(2011). To survive a 12(b)(6) motion todismiss, “a complaint must contain suffi-cient factual material, accepted as true, to‘state a claim to relief that is plausible onits face.’ “ Ashcroft v. Iqbal, 556 U.S. 662,129 S.Ct. 1937, 1949 (2009) (quoting BellAtl. Corp. v. Twombly, 550 U.S. 544, 570(2007)). “A claim has facial plausibilitywhen the plaintiff pleads factual contentthat allows the court to draw the reasonableinference that the defendant is liable for themisconduct alleged.” Id. As the court ofappeals for this circuit has stated “theplaintiff must give enough details about thesubject-matter of the case to present a storythat holds together.” Swanson v. Citibank,N.A., 614 F.3d 400, 404 (7th Cir.2010).

*2 “Determining whether a complaintstates a plausible claim for relief ... [is] acontext-specific task that requires the re-viewing court to draw on its judicial exper-ience and common sense.” Iqbal, 129 S.Ct.at 1950. In performing this analysis, courtsneed not accept as true any legal conclu-sions or conclusory statements included inthe complaint. Id. at 1949–50. The Courtwill, however, accept as true all well-pleaded factual allegations, and will drawall reasonable inferences in the plaintiff'sfavor. Ray, 629 F.3d at 662. If the allega-tions of the complaint “fail[ ] to state aclaim upon which relief can be granted,”the complaint will be dismissed.Fed.R.Civ.P. 12(b).

BackgroundFN1

FN1. The facts are derived from theallegations of the Complaint. SFGhas not filed an answer to the Com-plaint. However, by its motion todismiss pursuant to Federal Rule ofCivil Procedure 12(b)(6), SFG dis-

putes many of the allegations of theComplaint.

BuyCo and Fasteignir are Icelandicprivate limited companies, referred to as aneinkahlutafélag (“ehf”), whose principaloffices are located in Reykjavík, Iceland.(Compl.¶¶ 1–3.) (ECF No. 44.) Askar is anIcelandic limited company, referred to as ahlutafélag (“hf”), whose principal office isalso located in Reykjavík, Iceland. (Id. at ¶3.) BuyCo and Fasteignir advanced fundsfor the Project. (Id. at ¶¶ 1–2.) Askarprovided “mezzanine financing” for theloan. (Id. at ¶ 3.)

SFG is a Georgia unchartered limitedliability company whose principal office islocated in Atlanta, Georgia. (Id. at ¶¶ 4,23.) SFG was, and is, a wholly owned sub-sidiary of Silverton Bank N.A(“Silverton”).FN2 (Id. at ¶ 23.) SFG wascreated to target the financing needs of thehospitality industry. (Id.)

FN2. Silverton began as GeorgiaBanker's Bank which was originallycharted as a commercial bank withthe State of Georgia. (Compl.¶ 22.)In 1994, the bank changed its nameto The Banker's Bank, but itscharter remained with the State ofGeorgia. (Id.) In 2007, The Banker'sBank changed its name to Silverton.(Id.) For purposes of this Decisionand Order, each iteration of TheBanker's Bank and Silverton Bank,N.A., is referred to as “Silverton.” (Id.)

Neither Silverton nor SFG ever submit-ted to any type of regulation by the State ofWisconsin, including, without limitation,regulation by the Wisconsin Department ofFinancial Institutions (“DFI”), Division ofBanking, as of the date SFG issued the loan

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commitment or at any other time. (Id. at ¶36.) SFG has not registered as a mortgagebanker or broker in Georgia or any state. (Id. at ¶ 35.) In Specialty Finance GroupLLC v. DOC Milwaukee LP et al., No.10–C–315 (E.D.Wis.) (the “315 action”),SFG alleged that it is a “mortgage banker”under Wisconsin Statutes §§ 706.11(1)(f)and 224.71(3). (See id. at ¶ 41 (citing the315 action Compl. (ECF No. 1), ¶¶ 39 &50).)

On approximately November 9, 2006,DOC Milwaukee, LP (“DOC Milwaukee”)was created to acquire and develop theproperty located at 1150 North WaterStreet (the “Property”). (Id. at ¶ 26.) WhenDOC Milwaukee was formed, its partnerswere as follows: (1) DOC Milwaukee II,LLC, as the initial general partner; (2) De-velopment Opportunity Corp., as a limitedpartner; (3) EP Milwaukee, LLC, as a lim-ited partner; and (4) BuyCo, as a limitedpartner. (Id.)

DOC Milwaukee received a loan com-mitment on March 29, 2007, from SFG toadvance a $20,900,000 loan for the Project.(Id. at ¶ 37.) Under the terms of the loancommitment, SFG was to fund a loanamount “Not to Exceed $20,900,000.00,”provided that DOC Milwaukee madeequity contributions equal to 25% of theProject's cost, with a minimum equity con-tribution of $6,993,302.00. (Id. at ¶ 32.)The minimum equity contribution however,established a 33.4% loan to value ratio. (Id.) When the loan commitment was issued,the loan to value ratio exceeded the 20%loan to value ratio for commercial con-struction required under the InteragencyGuidelines for Real Estate LendingPolicies (“Interagency Guidelines”) by13.4%. (Id. at ¶ 33.) At the time of the loancommitment's execution, it was contem-

plated that the loan documents would beimmediately forthcoming and that the loanwould close on or before April 6, 2007. (Id.at ¶ 34.)

*3 On April 2, 2007, three days afterthe issuance of the loan commitment, Sil-verton submitted an application to the Of-fice of the Comptroller of the Currency(the “OCC”) requesting permission to con-vert from a Georgia chartered commercialbank to a national association. (Id. at ¶ 56.)Silverton's conversion application dis-closed SFG as its wholly owned subsidiary.(Id.) It did not identify SFG as a registeredor licensed mortgage banker in any juris-diction, including Georgia or Wisconsin. (Id.)

Silverton's subsequent periodic regulat-ory disclosures made to the OCC did notidentify SFG as a registered or licensedmortgage banker in any jurisdiction, in-cluding Georgia or Wisconsin. (Id. at ¶ 59.)As a result of Silverton's attempt to convertto a national association, it was required tosubmit to the OCC's jurisdiction and rules,as the OCC was Silverton's primary regu-lator. (Id.) National Banks and NationalAssociations also must be members of theFederal Reserve System (“Federal Re-serve”) and the FDIC. (Id. at ¶ 10.)

By submitting to the OCC's regulation,Silverton and its subsidiaries, includingSFG, also agreed to submit to the internalloan to value ratio established by 12 C.F.R.§ 34, including the Interagency Guidelinesthat are incorporated by reference, 12U.S.C. § 1828(o), and the Comptroller'sCommercial Real Estate and ConstructionLending Handbook (the “Comptroller'sHandbook”). (Id. at ¶ 60.) Regulation bythe OCC also prohibits insolvent banksfrom using federal foreclosure proceduresif a receiver is appointed to administer as-

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sets of an insolvent national association. (Id. at ¶ 61.) The loan to value ratio estab-lished by the loan commitment exceededthose established by the InteragencyGuidelines by 13.4%. (Id. at ¶ 62.) FN3

FN3. The Interagency Guidelinesestablish exemptions from this rule,one of the exemptions applies toloans issued by the bank in a juris-diction in which the bank has spe-cifically consented to state regulat-ory requirements and jurisdiction.(Compl.¶ 63.) Neither Silverton norSFG ever disclosed the loan madefor the Project as an excluded loanfrom the supervisory loan to valuelimits, or an excepted loan underthe Exceptions to the General Lend-ing Policy. (Id. at ¶ 64.)

On May 14, 2007, the OCC began itspre-conversion evaluation. (Id. at ¶ 65.) OnJune 5, 2007, in an internal memorandum,OCC examiners expressed concerns withSilverton's credit risk management pro-cesses, strategic planning, and capital plan-ning. (Id. at ¶ 68.) At about the same time,the OCC determined that there were signi-ficant weaknesses in Silverton's bankingpractices, including compliance with regu-latory capital requirements and statutoryloan criteria. (Id. at ¶ 69.)

On June 18, and June 26, 2007, theOCC officials met with Silverton's man-agement to discuss their concerns. (Id. at ¶70.) The OCC reported to Silverton that itsinvestigation noted unsafe and unsound un-derwriting and credit administration prac-tices, including inadequate capitalization ofloans, construction draw monitoring, and alack of compliance with loan to value ra-tios. (Id. at ¶ 71.) The OCC examiner's re-view reported significant weaknesses inSilverton's portfolio and requested that Sil-

verton review its business plan to reducethe risk, particularly of its constructionloans. (Id. at ¶ 72.) The concerns expressedin the June 2007, meetings were later me-morialized in a July 26, 2007, letter that,among other matters, recommendedchanges to Silverton's lending practices. (Id. at ¶ 70.)

*4 On August 7, 2007, the OCC ap-proved Silverton's application for conver-sion to a national association, conditionedupon Silverton's agreement to address theconcerns in the OCC's July 26, 2007, letter.(Id. at ¶ 73.) Silverton was formally con-verted to a national association on August17, 2007. (Id. at ¶ 74.) As of August 17,2007, the OCC reassigned Silverton fromits Birmingham office to the Atlanta officefor supervision. (Id. at ¶ 79.) From August17, 2007, until late November 2007, therewas a gap of about 90 days in the supervi-sion of Silverton. (Id. at ¶ 79.)

Silverton disclosed SFG as a whollyowned and operated subsidiary, establishedas a limited liability company that madedirect commercial loans to the hospitalityindustry. (Id. at ¶ 76.) This list was notamended and at no time did Silverton ad-vise the OCC that either it or its subsidiar-ies or branches maintained offices withinWisconsin. (Id.) Silverton also did notamend its disclosures to indicate that SFGwas engaged in the business of mortgagebanking or serving as a mortgage banker inany state, including Wisconsin. (Id.) A sig-nificant benefit of having SFG operate as alimited liability company that was thewholly owned subsidiary of a national as-sociation is that SFG could avoid having toregister or obtain a license from state lend-ing and banking regulators when SFGmade loans for projects outside of Georgia.(Id. at ¶ 77.)

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In October 2007, SFG presented a loanagreement for DOC Milwaukee to signbased upon the terms of the loan commit-ment, which contemplated a $20,900,000loan with a minimum 25% equity require-ment. (Id. at ¶ 84.) Days later, SFG advisedthat it would be unable to sign the docu-ment. (Id.)

In October 2007, SFG also retainedBroadlands Financial Group, LLC(“Broadlands”) to serve as a lender ser-vices agent for the Project. (Id. at ¶ 85.) ByOctober 2007, SFG was aware that a num-ber of subcontractors had visibly com-menced work at the Project. (Id. at ¶ 86.)

By the end of November 2007, the su-pervisory gap at the OCC was filled, andthe OCC ordered a full-scope examinationof Silverton and SFG. (Id. at ¶ 87.) TheOCC began reviewing new loans and prob-lem loans, assessing lending area risk, andconducting a targeted examination of lend-ing risk and asset quality. (Id.) Particularattention was given by the OCC to loan tovalue ratios and asset quality. (Id.) As partof the evaluation process, the OCC identi-fied Silverton and SFG loans that poten-tially fell outside of its commitments madeto the OCC pre-conversion. (Id.)

As a result of pressures from regulat-ors, and to stem its own losses, Silvertonand its wholly owned subsidiary, SFG,began to “aggressively restrict” its loans tocomply with federal lending guidelines,and attempted to obtain additional equitycontributions from its borrowers to bringits total portfolio loan to value numbers in-to line. (Id. at ¶ 88.)

*5 In November 2007, SFG advisedDOC Milwaukee that it could not sign theloan agreement because its parent com-pany, Silverton, was unwilling to provide

funding for the loan. (Id. at ¶ 89.) SFGoffered to issue a loan for a lower dollaramount and promised that it would issue anew loan based upon the original loancommitment promptly after Silverton's is-sues were worked out. (Id.) When SFG soadvised DOC Milwaukee, SFG was awarethat the Project was already under con-struction. (Id. at ¶ 90.) To keep the Projectgoing, the Icelandic Entities stepped in andadvanced additional emergency cash. (Id.)

On January 9, 2008, SFG and DOCMilwaukee entered into a new loan agree-ment for a lower amount—$14,900,000.00(the “SFG loan agreement”). (Id. at ¶ 91.)The SFG loan agreement contemplated thatDOC Milwaukee would make a borrower'sequity contribution of $12,993,302 or 25%of the total cost of the Project. (Id. at ¶ 95.)Under the SFG loan agreement, Broadlandswas to provide construction risk manage-ment services including Project oversightand contract funds administration. (Id. at ¶100.)

By January 2008, immediately prior tothe execution of the SFG loan agreement,the OCC was reporting significant con-cerns over Silverton's viability. (Id. at ¶107.) Despite the fact that the loan hadclosed, the mortgage had been recorded,and the Project was over 60% complete,SFG failed to fund the first draw request. (Id.) By April 24, 2008, the OCC's targetexamination reported that Silverton's assetquality had significantly deteriorated, andfor the first time, expressed concerns aboutSilverton's continued viability. (Id. at ¶110.)

About the same time in April 2008,SFG informed DOC Milwaukee that DOCMilwaukee was in default of the SFG loanagreement citing “unauthorized cost over-runs.” (Id. at ¶ 111.) None of the alleged

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“cost overruns” were unknown events and,before the loan closed, they had been fullydisclosed by HMS Victory, LLC FN4

(“Victory”) to SFG and Broadlands. (Id.)In addition, the purported cost overrun re-flected an amount to complete that was lessthan the “Cost Breakdown” contained inthe SFG loan agreement. (Id.)

FN4. Victory performed an evalu-ation of the Project's contractor,Economou Partners Construction,Inc. (“Economou Partners Con-struction”) and the Project.

At the time of the first default notice inApril 2008, SFG had advanced$7,605,866.98 (Id. at ¶ 113.) DOC Milwau-kee was not in default of the SFG loanagreement due to any delinquencies in pay-ments on the interest or principal that SFGhad advanced. (Id. at ¶ 114.) SFG thenthreatened the Plaintiffs that if they did notadvance additional funds to DOC Milwau-kee for the Project, SFG would wipe outtheir interest in the Project. (Id.)

On June 2, 2008, the OCC ordered afull-scope safety and soundness evaluationof Silverton and SFG. (Id. at ¶ 116.) TheFDIC and OCC pressured Silverton—andthe FDIC, OCC and Silverton pressuredSFG—to improve its loan to value ratiosfor its overall portfolio. (Id.) Despite addi-tional cash advances to buttress its equitycushion, Silverton and SFG continued toexperience sagging loan to value ratios forits portfolio and continued to demand addi-tional cash be infused into the Project. (Id.at ¶ 117.)

*6 In September 2008, SFG demandedthat DOC Milwaukee or its partners orlenders advance yet another $4,000,000.00of additional equity into the Project in or-der to obtain SFG's agreement not to fore-

close. (Id. at ¶ 118) At the time, DOC Mil-waukee was current on principal and in-terest payments, the Project was 80% com-plete and was still operating under thebudget that had been disclosed to SFG pri-or to the execution of the SFG loan agree-ment. SFG promised that if the IcelandicEntities advanced additional emergencyfunds, SFG would forbear and also fundthe remaining principal balance of the SFGloan agreement. (Id.) These demands werenot made in good faith and the IcelandicEntities “were forced to manifest assent tothe transaction out of fear of their entire in-vestment in the Project being wiped out.” (Id.)

On October 8, 2008, SFG and DOCMilwaukee entered into a forbearanceagreement. (Id. at ¶ 119.) The first forbear-ance agreement was also signed by theguarantors, Phil Hugh (“Hugh”), John Eco-nomou (“J.Economou”), and Steve Eco-nomou (“S.Economou”). (Id.) The Iceland-ic Entities were not parties to the first for-bearance agreement. (Id.)

On October 24, 2008, Silverton Finan-cial Services, Inc., Silverton's holding com-pany, filed an application for$77,300,000.00 under the Troubled AssetRelief Program (“TARP”). (Id. at ¶ 120.)As of that date, the OCC began evaluatingSilverton for a possible Federal Deposit In-surance Corporation (“FDIC”) receiver-ship. (Id.) On November 24, 2008, theOCC advised of its decision not to recom-mend approval of the TARP application. (Id. at ¶ 121.) However, on December 12,2008, the OCC determined that Silvertonshould be deemed in a troubled condition,and transferred supervision of the bank tothe OCC's Special Supervision Division inWashington, D.C. (Id.)

On February 2, 2009, the OCC began a

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targeted examination of all loans, includingthose made by SFG. (Id.) On about Febru-ary 10, 2009, SFG again informed DOCMilwaukee that it was in default on theSFG loan agreement, once more citing thefailure to infuse additional equity into theProject. (Id. at ¶ 123.) As of that date, SFGhad advanced $13,431,373.42 on the SFGloan agreement while the Icelandic Entitieshad advanced $17,419,807.75 throughequity contributions and loans to DOC Mil-waukee to complete the Project, or a 57%cushion. (Id. at ¶ 124.) At the time, theloan to value ratio was less than 43%, wellinside the 80% established in the Inter-agency Guidelines. (Id. at ¶ 125.) In Febru-ary 2009, when SFG declared the loan indefault, DOC Milwaukee was not delin-quent in any payments on the principal orinterest on the SFG loan agreement. (Id. at¶ 126.)

Despite having adequate protection,SFG again threatened to accelerate the SFGloan agreement, which would have re-quired DOC Milwaukee to advance$13,431,373.42 within days or face fore-closure. (Id. at ¶ 127.) Without justifica-tion, officers of SFG threatened anew theIcelandic Entities that if they did not ad-vance additional emergency funds to DOCMilwaukee for the Project, SFG would“wipe out their interests in the Project.” (Id. at ¶ 128.) The Icelandic Entities wereforced to assent to advancing emergencyfunds out of fear of losing their over $17million investment in the Project. (Id.)SFG's threats did not constitute good faithaction, and SFG made the threats eventhough the Icelandic Entities are neitherparties to, nor guaranteed the SFG loanagreement. (Id. at ¶ 129.) However, SFGwas aware that the Icelandic Entities werefunding the borrower equity contributionunder the SFG loan agreement and provid-

ing additional monies for the Projectthrough loans and mezzanine financing,among other ways. As a result, SFG owedthe Icelandic Entities an obligation to con-strue the provisions of the SFG loan agree-ment, including § 3.25, in good faith. (Id.)

*7 SFG also promised that if theIcelandic Entities advanced additionalemergency funds, SFG would fund the re-maining principal balance of the SFG loanagreement. (Id. at ¶ 130.) It is believed thatSFG's fully funding the loan, along withthe funding from the Icelandic Entities,would have been sufficient to completeconstruction at the Project. (Id.)

To avoid acceleration and foreclosure,and to obtain the remaining loan proceeds,SFG again required DOC Milwaukee toenter into a forbearance agreement. (Id. at¶ 131.) The Icelandic Entities advancedemergency cash to facilitate the forbear-ance agreement even though the demandwas not made in good faith. (Id.) Basedupon information and belief, SFG wasaware of issues with Silverton's viabilitythat would eliminate its ability to use fed-eral foreclosure laws if the OCC appointeda receiver to administer Silverton's andSFG's assets. (Id. at ¶ 132.)

DOC Milwaukee entered into a secondforbearance agreement with SFG on orabout April 3, 2009 (the “second forbear-ance agreement”). (Id. at ¶ 133.) The guar-antors, Hugh, J. Economou, and S. Eco-nomou also signed the second forbearanceagreement. (Id ). As with the first forbear-ance agreement, the Icelandic Entities werenot parties to the second forbearance agree-ment. (Id.) The loan commitment, the SFGloan agreement, and the first and secondforbearance agreements are collectively re-ferred to as the “loan documents.” (Id.)

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Based on information and belief, DOCMilwaukee entered into the second forbear-ance agreement because, at that time, ac-celeration and foreclosure would havewiped out millions of dollars of DOC Mil-waukee's and its investors' equity, andwould have permanently stopped work onthe Project. (Id. at ¶ 135.) During such pro-cess, SFG engaged in additional abusivelending practices, and it repeatedlythreatened to sell the SFG loan agreement,including a specific threat to “sell the loanto a loan shark,” if the Icelandic Entitiesdid not take immediate steps to completethe Project using their own funds. (Id.) TheIcelandic Entities were forced to assent toSFG's abusive lending practices becausethey were fearful of losing their entire in-vestment. (Id.)

On May 1, 2009, Silverton was closedby the OCC. (Id. at ¶ 136.) Subsequently, itwas placed into a receivership, and the FD-IC was appointed as the receiver. (Id.) Onthe date Silverton was closed, an entityknown as Silverton Bridge Bank waschartered by the OCC to take over opera-tions as a new national bank and controlledby the FDIC in accordance with 28 U.S.C.§ 1821(n). (Id.) As a result, Silvertonceased legal existence on May 1, 2009. (Id.)

A bridge bank allows a failed bank tobe liquidated in an orderly fashion, and itsduration is limited to the time reasonablynecessary to complete the liquidation pro-cess. (Id.) Silverton Bridge Bank was ex-pressly chartered to accomplish these pur-poses. (Id. at ¶ 137.) Silverton Bridge Bankwas empowered by the FDIC, as the re-ceiver, to administer Silverton's assets, in-cluding its wholly owned subsidiary, SFG.(Id.)

*8 A receiver was appointed by the

Comptroller of the Currency to administerthe assets of Silverton, including SFG. (Id.at ¶ 138.) Even though the Icelandic Entit-ies are not parties to, or a guarantor of theloan documents, they made loans, cash ad-vances, and payments on the loan docu-ments to keep work progressing at theProject, and to avoid having their interestsdestroyed by SFG's threatened foreclosure.(Id. at ¶ 139.) Despite the Icelandic Entit-ies' advancing additional funds by theIcelandic Entities, SFG failed to advancethe remaining principal balance due underthe loan documents. (Id. at ¶ 140.) Becauseof SFG's breach of its promises to fund, anumber of unpaid subcontractors have filedliens against the Project, with the total liensin excess of $4,500,000.00. (Id.)

On June 5, 2009, the FDIC announcedthat the Silverton receivership would bediscontinued on June 29, 2009, due to thereceiver's inability to sell Silverton's loanportfolios. (Id. at ¶ 141.) The Icelandic En-tities continued to advance funds to SFG tokeep payments on the loan documents cur-rent through June 30, 2009. (Id. at ¶ 142.)The Icelandic Entities were the only partieswho were willing or able to advance fundsfor the Project at that time. (Id.)

Although the Icelandic Entities ad-vanced funds to keep the loan current, SFGdeclared the SFG loan agreement in defaultfor a third time and advised on June 16,2009, that it would not accept any furthercurative payments after June 30, 2009. (Id.at ¶ 143.) SFG advised that it intended toforeclose and “wipe out” the Icelandic En-tities' interests, as well as the interests ofall subcontractors. (Id.)

In June 2009, after the FDIC steppedin, Fasteignir and Askar contacted SFG re-garding arrangements to continue to ser-vice the mortgage and were informed that

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SFG would no longer accept paymentsfrom any of the Icelandic Entities to keepthe loan current. (Id. at ¶ 144.)

On June 22, 2009, BuyCo petitionedfor DOC Milwaukee to be placed into a re-ceivership, and Seth E. Dizard was appoin-ted as receiver. (Id. at ¶ 145.) See SJ Prop-erties Suites, BuyCo, ehf, v. DOC Milwau-kee County L.P., Milwaukee County CircuitCourt, No.2009CV009785, available at ht-tp:// wcca.wicourts.gov (last visited Aug.23, 2010). BuyCo petitioned for a receiverto address partnership impasse issues withEP Milwaukee, LLC, including a disputeover who had the right to be the generalpartner. (Id.) BuyCo also petitioned for thereceivership because SFG would no longeraccept payments from any of the IcelandicEntities, or other mezzanine lenders. (Id.)Dizard has the responsibility of seizing andpreserving all of DOC Milwaukee's prop-erty, including the Project, for the benefitof DOC Milwaukee's creditors.

On February 5, 2010, the FDIC an-nounced that it was placing a number ofSilverton's assets, including SFG's loansand participations, for forced auction. (Id.at ¶ 146.) The FDIC retained DeutscheBank, N.A. to auction off a total loan port-folio valued at $400,000,000.00. (Id.) Theportfolio consisted of 62 wholeloans—including $162,402,456.00 inwhole loans held by Silverton and$253,962,558.00 in 40 separate loan parti-cipations—including SFG's participation inthe loan. (Id.) The FDIC assumed SFG'sparticipation and sold the SFG participa-tion at auction in April 2010. (Id.)

*9 On May 18, 2010, SFG assigned itsinterest in the Project to the FDIC. (Id. at ¶146.) The same day, the FDIC, which hadbeen administering assets through its re-ceiver, assigned that interest to 2010–1

SFG Venture LLC (“Venture”) (Id. at ¶148.) On June 17, 2010, SFG asked theCourt to substitute in 2010–1 SFG VentureLLC as the defendant in this action. (Id. at¶ 149.) The Court denied SFG's request. (Id. (citing ECF No. 41.).)

FDIC DefensesSFG's Standing to Assert the FDIC De-

fensesSFG maintains that the Icelandic Entit-

ies' causes of action for unjust enrichment(Count I), promissory estoppel (Count II),and their cause of action under Chapter 224of the Wisconsin Statutes (Count III), ex-cept for the portions of the count broughtunder Wis. Stat. §§ 224.77(1)(l) and (k),are barred by 12 U.S.C. § 1283(e) FN5 andthe D'Oench doctrine FN6 (the “FDIC de-fenses”).FN7 (Def.'s Br. Mot. Dismiss Am.Compl. (“Def.'s Br. Mot. Dismiss”) (ECFNo. 48) 23, 25.) (See also Def.'s Br. Mot.Dismiss Compl. (ECF No. 4) 21–30.) FN8

In response, the Icelandic Entities assertthat SFG cannot present the FDIC defensesbecause it failed to identify the FDIC's in-terest, there is no diminution of any interestin the loan documents, and SFG has noright to assert the defenses. (Pls.' Resp. Br.Opp'n Mot. Dismiss Am. Compl. (“Pls.'Opp'n Mot. Dismiss”) (ECF No. 53) 8–11.)

FN5. As amended effective July 21,2011, 12 U.S.C. § 1823(e) provides:

(1) In general

No agreement which tends to di-minish or defeat the interest of the[FDIC] in any asset acquired by itunder this section or section 1821of this title, either as security for aloan or by purchase or as receiverof any insured depository institu-tion, shall be valid against the[FDIC] unless such agreement—

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(A) is in writing,

(B) was executed by the deposit-ory institution and any personclaiming an adverse interest there-under, including the obligor, con-temporaneously with the acquisi-tion of the asset by the depositoryinstitution,

(C) was approved by the board ofdirectors of the depository institu-tion or its loan committee, whichapproval shall be reflected in theminutes of said board or commit-tee, and

(D) has been, continuously, fromthe time of its execution, an offi-cial record of the depository insti-tution.

(2) Exemptions from contempor-aneous execution requirement Anagreement to provide for the law-ful collateralization of—

(A) deposits of, or other credit ex-tension by, a Federal, State, orlocal governmental entity, or ofany depositor referred to in sec-tion 1821(a)(2) of this title, in-cluding an agreement to providecollateral in lieu of a surety bond;

(B) bankruptcy estate funds pur-suant to section 345(b)(2) of Title11;

(C) extensions of credit, includingany overdraft, from a Federal re-serve bank or Federal home loanbank; or

(D) one or more qualified finan-cial contracts, as defined in sec-tion 1821(e)(8)(D) of this title,

shall not be deemed invalid pursu-ant to paragraph (1)(B) solely be-cause such agreement was not ex-ecuted contemporaneously withthe acquisition of the collateral orbecause of pledges, delivery, orsubstitution of the collateral madein accordance with such agree-ment.

FN6. The doctrine takes its namefrom D'Oench, Duhme & Co., Inc.v.. FDIC, 315 U.S. 447, 460 (1942),wherein the Supreme Court heldthat a secret agreement as to a note'senforceability could not be a de-fense because it would deceive thebanking authorities.

FN7. John v. Resolution TrustCorp., 39 F.3d 773, 776 (7thCir.1994) observed “the commonlaw D'Oench doctrine and its stat-utory counterparts are frequentlyanalyzed together and likely serveidentical aims (Justice Scalia reliedon D'Oench in his analysis of thescope of § 1823(e) in Langley v.FDIC, 484 U.S. 862 [1987].” Thecourt stated that

[t]he two, however, may not beco-extensive. The common lawdoctrine, because it is ‘based onthe concept of equitable estoppel,’is narrower than § 1823(e) which‘makes the fault of the party as-serting the unwritten agreementirrelevant.’ Du Pont v. FDIC, 32F.3d 592, 597 (D.C.Cir.1994).

John, 39 F.3d at 776.

FN8. SFG states that it incorpor-ates, by reference, into its brief insupport of its motion to dismiss the

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amended complaint both its originalbrief in support of its motion to dis-miss (30 pages) and its reply briefin support of that motion (16pages). (Def.'s Br. Mot. Dismiss 9.)However, SFG's briefs in support ofits motion to dismiss the amendedcomplaint and in reply are, respect-ively, 25 pages and 16 pages long.SFG's total briefs would far exceedthe page limits on briefs set forth inCivil Local Rule 7 (E.D.Wis.) and,thus, wholesale incorporation willnot be allowed.

The FDIC defenses work to void anyagreement with a bank under the controlof, or in the receivership of the FDIC, ifthat agreement may diminish any asset ofthe corporation, unless it meets severalconditions. See 12 U.S.C. § 1823(e).Among these conditions are that the agree-ment must be in writing, must be signed atthe time of the acquisition of the asset bythe FDIC, and must be a part of the recordof the bank. 12 U.S.C. § 1823(e)(1)(A),(B), & (D).

Before determining if the FDIC de-fenses bar the Icelandic Entities' claims,the Court must determine whether SFGmay assert those defenses. The IcelandicEntities contend that SFG has no independ-ent right to assert these defenses where theFDIC has not intervened or asserted an in-terest in the case. (Pls.' Opp'n Mot. Dismiss11.) They further state that, although thedefenses can apply to subsidiaries of na-tional banks, the subsidiary cannot assertthe defenses without the involvement ofthe FDIC with respect to an asset in whichit has an interest, and the FDIC has to bethe real party in interest for the FDIC de-fenses to be asserted. (Id.)

SFG relies on Hall v. Federal Deposit

Insurance Corp., 920 F.2d 334, 339 (6thCir.1990), indicating that there are in-stances when the FDIC may no longer havean interest in an asset but the D ‘Oenchdoctrine applies. The Icelandic Entitiescounter that Hall presented a much differ-ent situation.

Hall addressed whether the FederalSavings and Loan Insurance Corporation(“FSLIC”) FN9 could invoke the D'Oenchdoctrine as a complete bar to the plaintiffborrowers' suit for breach of an loan agree-ment by a failed savings and loan associ-ation. SFG quotes the following statementwith the significant deletion of the it-alicized sentences:

FN9. The court noted that the de-fendant in the case was the FDIC,Manager of the FSLIC ResolutionFund, which was substituted forFSLIC by the court's December 4,1989, order. Hall, 920 F.2d at 335n.2. The substitution was a result ofCongress's decision to abolishFSLIC in the Financial InstitutionsReform, Recovery, and Enforce-ment Act of 1989 (“FIRREA”). Id.However, the court stated that be-cause the FSLIC was the originalparty involved in the case, it wouldrefer to the defendant as the FSLIC.Id.

*10 The effect of an imposition on publicfunds is the same in the case where alawsuit creates a negative asset as whereit reduces the value of a positive asset.The D'Oench doctrine should protectFDIC in both cases. D'Oench is import-ant for allowing banking authorities todetermine exactly what a bank's assetsand liabilities are. The doctrine maytherefore be invoked even where FDICdoes not have ‘an interest in an asset.

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(Def's Reply Br. Mot. Dismiss Compl.(ECF No. 49) 15 (quoting Hall, 920 F.2dat 339).) (Emphasis added.)

Hall was a lawsuit commenced againstCommerce Federal Savings and Loan As-sociation, Inc. (“Commerce”) for breach ofa loan agreement based on its alleged fail-ure to fully fund a loan. 920 F.2d at 335.Four days before trial, the FSLIC, was ap-pointed as the receiver for Commerce, andbecame the defendant in the lawsuit. Id.Thereafter, a successor savings and loanacquired from the FSLIC the assets and li-abilities of Commerce, with the exceptionof the liabilities arising from the lawsuit,which were assigned to the FSLIC.

The successor savings and loan was ad-ded to the lawsuit. Id. at 336. However, itprevailed on a motion to dismiss and, onsummary judgment the FSLIC was dis-missed from the action under the D'Oenchdoctrine. See id. at 335 n.2, 336. The appel-late court did not reinstate the successorsavings and loan as a defendant because itfound that the assignment was proper andthat the FSLIC was the real party in in-terest. Id. at 337. The court expressly statedthat it did not need to address the issue ofwhether the savings and loan as a successorin interest to the FSLIC was protected bythe D'Oench doctrine. Id. at 337 n.6.

However, in Victor Hotel Corp. v. FCAMortgage Corp., the Court of Appeals forEleventh Circuit held that the FDIC de-fenses barred claims against a wholly-owned subsidiary of a failed institution.928 F.2d 1077, 1083 (11th Cir.1991). Theappeals court held the defenses were ap-plicable even though the FSLIC “was not aparty to th[e] action and the defenses asser-ted would not diminish any present or pastright, title, or interest of [the] FSLIC in[the defendant's] loan agreement” with the

plaintiff. Id; see also, People ex relHartigan v. Commonwealth Mortg. Corp.of Am., 723 F.Supp. 1258, 1261(N.D.Ill.1989). Robinowitz v.. GibraltarSav., 23 F.3d 951, 956 (5th Cir.1994);Sweeney v. Resolution Trust Corp., 16 F.3d1, 4 (1st Cir.1994); Oliver v. ResolutionTrust Corp., 955 F.2d 583, 585–86 (8thCir.1992). The Court of Appeals for theSeventh Circuit has apparently not ad-dressed the subject. However, based on theforegoing authorities, the Court concludesthat the FDIC does not need to involve it-self in this lawsuit in order for SFG to raisethe FDIC defenses.

The Icelandic Entities also contend thatthe FDIC defenses are inapplicable becauseSFG failed to identify the FDIC's interestthat is implicated by the claims. (Pls.'Opp'n Mot. Dismiss 8–10.) They furtherstate that the only evidence of a potentialinterest is the transfer of the loan docu-ments to Venture through the FDIC, andthat it is not clear what interests were trans-ferred. (Id. at 8–9.) Furthermore, theIcelandic Entities note that their claims inthis action are not dependent on the loandocuments which they indicate the Courtrecognized in a prior ruling in this case. (Id. at 9 (citing the Court's August 25, 2010,Decision and Order, 30 (ECF No. 41.).)

*11 SFG argues that the FDIC has aninterest in the case, as recognized by the al-legation in the amended complaint. (Def.'sReply Br. Mot. Dismiss Am. Compl.(Def.'s Reply Dismiss) 2 (citing Compl. ¶138).) (ECF No. 56.) It further asserts thatSFG remained under FDIC control and wasnot transferred to Silverton Bridge Bank. (Id. (citing Purchase and AssumptionAgreement Among Fed. Deposit Ins. Corp.and Silverton Bridge Bank, N. A., Sched-ule 3.1(i), May 1, 2009, available at ht-

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tp://www.fdic.gov/bank/individual/failed/silverton_P_ and_A.pdf).) SFG also arguesthat, even if it had been transferred, theFDIC defenses would still apply. (Id. at 3(citing FDIC v. Greenberg, 851 F.Supp.15, 21 (D.Mass.1994).)

In Greenberg, the district court heldthat the D'Oench doctrine applied to agree-ments made either before or after the bankis rendered insolvent and that the FDIC, asthe receiver for the bridge bank,FN10 re-tained all rights, powers and privileges ofthe bridge bank when that bank was dis-solved. Greenberg, 851 F.Supp. at 21.Greenberg does not hold that FDIC de-fenses are available for a bridge bank. In-stead, Greenberg focuses on the timing ofan agreement and the applicability of thedefenses to the FDIC based on that timing.See id.

FN10. “Bridge bank” was a termused in 12 U.S.C. § 1821(n)(1)(A),prior to its amendment in 2008.Those entities now referred to as“bridge depository institutions” andmay be created “[w]hen 1 or moreinsured depository institutions arein default, or when the [FDIC] anti-cipates that 1 or more insured de-pository institutions may become indefault, the [FDIC] may, in its dis-cretion, organize, and the Office ofthe Comptroller of the Currency,with respect to 1 or more insuredbanks or 1 or more insured savingsassociations, shall charter, 1 ormore national banks or Federal sav-ings associations, as appropriate,with respect thereto with the powersand attributes of national bankingassociations or Federal savings as-sociations, as applicable, subject tothe provisions of this subsection....”

12 U.S.C. § 1821(n)(1)(A).

SFG further relies on Hall to support itsposition that the FDIC does not need tohave a current asset interest to assert theFDIC defenses. (Def.'s Reply Dismiss 3.)The Icelandic Entities argue that Hall is in-applicable because the facts are different,and because there has been no clarificationas to whether the FDIC has an interest inthis case. (Pls.' Opp'n Dismiss 9.)

Hall stated, in dicta, that where the FD-IC no longer has an interest in an asset, thelogic of D'Oench may still apply to protectthe FDIC. Hall, 920 F.2d at 339. The courtprovided examples of where the defensesare applicable, and stated that “[t]he doc-trine may therefore be invoked even whereFDIC does not have ‘an interest in an as-set.’ “ Id.

The Icelandic Entities argue that, evenif there does not need to be a specific asset,the claims can still be enforced againstSFG, just not against the FDIC, relying onFDIC v. State Bank of Virden, 893 F.2d139, 143 (7th Cir.1990). (Pls.' Opp'n Mot.Dismiss 9–10.) They also argue that theFDIC defenses are only applicable to assetsover which the FDIC has an interest, notother assets. (Id. at 10 (citing Vernon v.Resolution Trust Corp., 907 F.2d 1101,1107–08 (11th Cir.1990).)

Vernon v. Resolution Trust Corp., 907F.2d 1101, 1106–07 (11th Cir.1990), notesthat courts have applied the D'Oench doc-trine to protect entities from claims thatwere clearly contemplated in the purchaseagreement. However, the court declined toextend the D'Oench doctrine to all claimsthat would diminish the assets of a federalinsurer or its successor. Vernon, 907 F.2dat 1108.

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*12 Vernon is not completely applic-able to the situation presented by this case.Vernon declined to extend the D'Oenchdoctrine to tortious claims and dealt withstockholders, rather than borrowers. Ver-non, 907 F.2d at 1107–08. The claims inthe instant case are quasi-contractual anddo not arise in tort law. (See infra at31–36.)

Most importantly, Vernon was signific-antly narrowed by the Eleventh CircuitCourt of Appeals. In OPS Shopping Cen-ter, Inc. v. Federal Deposit Insurance Cor-poration, 992 F.2d 306, 307–08 (11thCir.1993), a bank issued a letter of credit inviolation of a cease and desist order issuedby the FDIC, in violation of bank policy,without board approval, and without mak-ing any record of its issuance. After thebank was declared insolvent and the FDICwas appointed as its receiver, OPS broughtan action against the FDIC based on theletter of credit. Id. at 308. The FDICmoved for summary judgment invoking theFDIC defenses. Id. The motion was gran-ted.

OPS appealed contending that its claimwas not barred by the FDIC defenses be-cause the secret agreement related to a liab-ility of the bank, rather than to a specificasset of the bank that the FDIC had ac-quired. Id. at 309. Responding to that argu-ment, the court clarified that Vernon meansonly that a free-standing tort claim, not re-lated to an asset acquired by the FDIC, isnot subject to the FDIC defenses. Id. at310. The court held that in contrast to thetort claims of Vernon, the claims in OPSrelated directly to ordinary banking trans-actions—the rights and obligations relatingto the issuance of a letter of credit by thebank—which should be reflected in the re-cords of regular banking transactions. Id. at

310–11. The OPS Shopping Center courtalso noted that, as of that date, every courtof appeals that had addressed the argumentthat a claim must be related to a specificasset for D'Oench to apply, had rejectedthe argument. Id. at 309–10 (collecting de-cisions of the Court of Appeals for theFirst, Fifth, Sixth, and Eighth Circuits).

The Icelandic Entities also maintainthat the FDIC defenses do not bar claimsagainst SFG's general assets in which theFDIC has no interest. (Pls.' Opp'n. Mot.Dismiss 10.) They rely on Vernon, citingthe language discussed above, and FirstFinancial Savings Bank, Inc. v. Bankers In-surance Co. of Florida, Inc., 783 F.Supp.963, 967 (E.D.N.C.1991). Although FirstFinancial agreed with Vernon about the ex-tent of protection provided by the FDIC de-fenses, First Financial presented a differ-ent factual context that is not applicablehere. First Financial also predated OPS—which emphasized the free-standing tortat issue in Vernon, rather than the specificasset language of Vernon.

SFG argues that the Icelandic Entitiesare merely rearguing the specific asset rule,and points to decisions of several federalappellate circuits that have rejected thatcontention. (Def.'s Reply Dismiss 4 (citingBufman Org. v. FDIC, 82 F.3d 1020, 1025(11th Cir.1996)). In Bufman, the Court ofAppeals for the Eleventh Circuit acknow-ledged that, subsequent to Vernon, the de-cisions of that circuit made it clear that notall tort claims escape the FDIC defensesand the key is whether the claim is unre-lated to a regular banking transaction. 82F.3d 1020, 1025 (11th Cir.1996).

*13 In addition, the Icelandic Entitiesargue that SFG cannot foreclose using fed-eral foreclosure procedures and still assertthe FDIC defenses. The federal foreclosure

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action, the 315 action, was dismissed bythis Court on December 22, 2010, based onthe doctrine of prior exclusive jurisdiction.Because SFG cannot use the federal fore-closure procedures, the argument is mootand will not be addressed.

As the above discussion indicates, theFDIC defenses are available to SFG, a sub-sidiary of the Silverton Bank, because ofthe FDIC receivership. The Icelandic Entit-ies' claims for unjust enrichment andpromissory estoppel are based on oralagreements that were not in the record re-viewed by the FDIC. However, SFG hasnot established that the statutory cause ofaction under Chapter 224 of the WisconsinStatutes falls within the ambit of the FDICdefenses. Therefore, SFG's motion to dis-miss based on the FDIC defenses is grantedas to the unjust enrichment and promissoryestoppel claims and denied as to theChapter 224 claim.

Failure to State a Cause of ActionSFG also asserts all seven counts of the

Complaint fail to state a cause of action.Despite concluding that the FDIC defensesbar the promissory estoppel and unjust en-richment counts, the Court will considerSFG's contentions as to each of the chal-lenged counts.

Choice of LawIn considering whether the common

law counts state a cause of action, thisCourt first considers what state's law gov-erns the counts. This case is a diversitycase. The Court must determine which jur-isdiction's laws apply and, then, follow theconflicts of laws rules of this state. SeeKlaxon Co. v. Stentor Elec. Mfg. Co ., 313U.S. 487, 494 (1941). SFG maintains thatthe Icelandic Entities' claims are governedby Georgia law because the loan docu-ments include provisions requiring that

they be enforced under Georgia law.(Def.'s Br. Mot. Dismiss Compl. 9.) (ECFNo. 4). Wisconsin law holds that it is ap-propriate to enforce a contractual choice oflaw provision unless it is contrary to publicpolicy. See Bush v. Nat'l Sch. Studios, Inc.,139 Wis.2d 635, 407 N.W.2d 883, 886(Wis.1987).

The Icelandic Entities argue that Wis-consin choice of law principles are irrelev-ant for two reasons. First, they contend thatbecause they are not parties to the loanagreements, the choice of law provisionhas no effect on their claims. Second, theIcelandic Entities maintain, even if thechoice of law provision binds any contrac-tual claims brought by them, their claimsare not based in contract. (Pls.' SurreplyOpp'n Mot. Dismiss Am. Compl. (Pls.' Sur-reply Opp'n Dismiss) 3–5.) (ECF No. 55.)

With respect to the Icelandic Entities'argument that the choice of law provisioncannot apply because they were not partiesto the agreement, the court of appeals forthis circuit has held that “to bind a non-party to a forum selection clause, the partymust be “ ‘closely related’ to the disputesuch that it becomes ‘foreseeable’ that itwill be bound.” Hugel v. Corp. of Lloyd's,999 F.2d 206, 209 (7th Cir.1993). Thecourts of appeal for other circuits havereached similar conclusions. See e.g.,Manetti–Farrow, Inc. v. Gucci Am., Inc.,858 F.2d 509, 514 n.5 (9th Cir.1988); Lip-con v. Underwriters at Lloyd's, London,148 F.3d 1285, 1299 (11th Cir.1998). Atleast one district court has applied suchreasoning to a choice of law clause. SeeCole v. Am. Cmty, Servs., Inc., No.04–cv–738, 2006 WL 2987815, at *3(S.D.Ohio Oct. 17, 2006).

*14 The Court of Appeals for the Sev-enth Circuit also stated that “while it may

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be true that third-party beneficiaries to acontract would, by definition, satisfy the‘closely related’ and ‘foreseeability’ re-quirements, a third-party beneficiary statusis not required.” Hugel, 999 F.2d at 209 n.7. Although Hugel is based, in part, on thefact that the third-party owned 99% of acompany that owned 100% of another, andhere it is unclear what percentage of DOCMilwaukee—the borrower—the IcelandicEntities owned, it was foreseeable that thecontract between SFG and DOC Milwau-kee would effect the Icelandic Entities.

The Icelandic Entities also point to §779.135(2) of the Wisconsin Statutes,which voids provisions in contracts for im-provements of land in Wisconsin that makethe contract subject to another state's laws.Wis. Stat. § 779.135(2) (2007–08).However, that section is part of Chapter779, is entitled “Liens,” and further part ofSubchapter 1, which is captioned“Construction Liens.” Id. The IcelandicEntities have not cited any authority hold-ing that Wis. Stat. § 779.135(2) is applic-able to a construction loan, nor has anybeen disclosed by this Court's research.Therefore, this Court concludes that Geor-gia law applies to the contracts.

The Icelandic Entities maintain that,even if they are bound to the contractualchoice of law for contract claims, theirclaims are outside of contracts and there-fore the choice of law provision is irrelev-ant. (Pls.' Surreply Opp'n Mot. DismissAm. Compl. 4–5.) They assert that theirclaims of promissory estoppel and unjustenrichment are tort, rather than contract,claims.

Contractual choice of law provisions donot control tort claims unless it is clear theparties intended them to do so. See Kuehnv. Children's Hosp., 119 F.3d 1296, 1302

(7th Cir.1997). The Icelandic Entities arguethat the loan documents between DOC Mil-waukee and SFG do not show a clear intentto require tort claims to be adjudicated inGeorgia. (Pls' Surreply Opp'n Dismiss 5.)

The elements of the equitable doctrineof promissory estoppel are that the defend-ant made a promise upon which he shouldhave reasonably expected the plaintiff torely, the plaintiff relied on the promise tohis detriment, and injustice can be avoidedonly by enforcing the promise because theplaintiff surrendered or rendered a valuableright. Pabian Outdoor–Aiken, Inc., 253Ga.App. 729, 560 S.E.2d 280, 282(Ga.Ct.App.2002). Unjust enrichment ap-plies when there is no legal contract, butwhen the party has been conferred a benefitby the party contending unjust enrichment,which the benefitted party equitably oughtto return or compensate for. Tuvim v.United Jewish Communities, Inc., 285 Ga.632, 680 S.E.2d 827, 829–30 (Ga.2009).

The Court declines to further analyzethis line of argument, because unjust en-richment and promissory estoppel arequasi-contractual claims and as such aremore like contract, than tort, claims. Seee.g., Carroll v. Stryker Corp., 658 F.3d675, 682 (7th Cir.2011) (indicating that un-der Wisconsin law, unjust enrichment is aquasi-contractual claim); ATA Airlines, Inc.v. Fed. Exp. Corp., 665 F.3d 882, 884 (7thCir.2011)(promissory estoppel is not a tortclaim).

Unjust Enrichment–Count I*15 SFG contends that the Icelandic

Entities do not have standing to bring anunjust enrichment claim because it is basedon the loan documents at issue. TheIcelandic Entities allege that SFG was un-justly enriched by them forwarding a totalof $17,419,807.75 toward the Project so

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that SFG would fund the remaining amountof the loan, although the Project had morethan the required equity cushion specifiedby the loan documents. (Compl.¶¶152–55.) Even after these amounts wereforwarded, SFG refused to fund the rest ofthe loan. (Id. at ¶¶ 157–96.) The IcelandicEntities assert that it would be inequitableto allow SFG to retain the benefit of theprovision of these emergency monies whenit has not contributed as much as other in-vestors, including the Icelandic Entities,and SFG has taken advantage of all ofthose monies while failing to fulfill its ownfunding obligations. (Id. at ¶ 157.)

The Icelandic Entities were not partiesto the agreements that make up the loandocuments, nor do they claim to be. Whenaddressing a question of state law while sit-ting in diversity, the Court's task is to as-certain the substantive content of state lawas it either has been determined by thehighest court of the state or as it would beby that court if the present case were be-fore it now.” Thomas v. H & R Block E.Enters., 630 F.3d 659, 663 (7th Cir.2011).If the state's highest court has yet to rule onan issue, “decisions of the state appellatecourts control, unless there are persuasiveindications that the state supreme courtwould decide the issue differently.” Id.(quoting Research Sys. Corp. v. IPSOSPublicite, 276 F.3d 914, 925 (7th Cir.2002)).

The Supreme Court of Georgia heldthat “[u]njust enrichment applies when as amatter of fact there is no legal contract ...,but when the party sought to be chargedhas been conferred a benefit by the partycontending an unjust enrichment which thebenefitted party equitably ought to returnor compensate for.” Engram v. Engram,265 Ga. 804, 463 S.E.2d 12, 15 (Ga.1995)

(citation omitted .). See also Fulcrum Fin.Partners v. Meridian Leasing Corp., 230F.3d 1004, 1010 (7th Cir.2000)(stating thatunder Georgia law, “[t]he theory of unjustenrichment applies when as a matter of factthere is no legal contract.” (quoting Brownv. Cooper, 237 Ga.App. 348, 514 S.E.2d857, 860 (Ga.Ct.App.1999) and citingStowers v. Hall, 159 Ga.App. 501, 283S.E.2d 714, 716 (Ga.Ct.App.1981)). There-fore, SFG's standing argument lacks merit.

SFG also contends that, because therewas a contract, the unjust enrichment claimmust fail. (Def.'s Br. Mot. Dismiss 12–13.)This contention is based on the IcelandicEntities' reliance on the loan documents intheir Complaint. See id.) However, theIcelandic Entities clearly allege that theywere not parties to the loan agreements.SFG's contention lacks factual and legalsupport.

In order to state a claim of unjust en-richment, a plaintiff must allege that it con-ferred a benefit to the defendant for whichit should be equitably compensated. SeeEngram, 463 S.E.2d at 15; See also, City ofAtlanta v. Hotels.com, et al., 289 Ga. 323,710 S.E.2d 766, 771 (Ga.2011). Accordingto Complaint, SFG would inequitably be-nefit from the monies that were advancedby the Icelandic Entities. Specifically, theIcelandic Entities maintain that they areunsecured creditors of DOC Milwaukee.However, to protect the physical state ofthe Project they made emergency paymentsfor site security and insurance, and pro-cured engineering assessments. (Compl.¶¶163–79.) Further, SFG was aware of theseadvances, but has done nothing to protectthe Project, and instead is letting theProject deteriorate and diminish in value. (Id. at ¶¶ 178–79.) The monies advanced aremaximizing the value of the Project, which

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is collateral for the SFG loan, so SFG is re-taining the benefit of the money spent bythe Icelandic Entities without compensat-ing the Icelandic Entities. (Id. at ¶¶179–81.) SFG was aware that the IcelandicEntities were providing funds to protect theProject and prevent waste, but took nomeasures to stop the Icelandic Entities' ex-penditure of those funds. SFG has been un-justly enriched by the funds that theIcelandic Entities have advanced to protectthe Project. (Id. at ¶¶ 178–79.)

*16 Both parties rely on cases that areinapplicable, either because they are basedon non-Georgian law, or they are factuallydistinguishable. Regardless, in this case,the Icelandic Entities' Complaint allegessufficient facts to state a plausible cause ofaction for unjust enrichment. The Com-plaint alleges the Icelandic Entities' max-imized the value of the Project, which hasconferred a benefit upon SFG. The Com-plaint sufficiently details that the IcelandicEntities advanced $17,419,807.75 for theProject and made emergency payments forsite security and insurance, as well as pro-curing engineering assessments. While notall of the Icelandic Entities' contributionsare quantified, the facts alleged and thereasonable inferences from those facts suf-ficiently indicate that the contributions ofthe Icelandic Entities protected and maxim-ized the value of the Project. Since theProject collateralizes the SFG loan agree-ment, the Icelandic Entities' advancementof monies and other contributions con-ferred a benefit upon SFG. The IcelandicEntities' claim has facial plausibility be-cause they have plead factual content thatallows the Court to draw the reasonable in-ference that SFG has been unjustly en-riched. See Iqbal, 129 S .Ct. at 1949.Therefore, if the FDIC defenses were notapplicable, the unjust enrichment claim

would state a cause of action.

Promissory Estoppel–Count IISFG also maintains that the Icelandic

Entities' promissory estoppel count fails tostate a cause of action. The state of Georgiahas long recognized the doctrine of promis-sory estoppel. See Gen. Commc'ns Serv. v.Ga. Pub. Serv. Comm ‘n, 244 Ga. 855, 262S.E.2d 96, 96 (Ga.1979). The doctrine iscodified in a statute, which states “[a]promise which the promisor should reason-ably expect to induce action or forbearanceon the part of the promisee or a third per-son and which does induce such action orforbearance is binding if injustice can beavoided only by enforcement of the prom-ise. The remedy granted for breach may belimited as justice requires.” Ga.Code Ann.§ 13–3–44(a) (1981). The Georgia legis-lature also intended for promissory estop-pel to be a contractual doctrine, as evid-enced by its placement in Title 13 of theOfficial Code of Georgia, which governscontracts. See id.

Further, the Icelandic Entities havestanding to assert such a claim, because athird party, who may not be in privity ofcontract, can assert a claim for promissoryestoppel if assurances were made to thatparty and the promises were not fulfilled.See Irvin v. Lowe's of Gainesville, Inc., 165Ga.App. 828, 302 S.E.2d 734, 736(Ga.Ct.App.1983). A garden variety claimof promissory estoppel, differs from a con-ventional breach of contract claim only inbasing the enforceability of the defendant'spromise on reliance rather than on consid-eration. ATA Airlines, Inc., 665 F.3d at 884.

The Icelandic Entities have sufficientlyalleged that SFG made promises to themand they acted in reliance on those prom-ises (Compl .¶¶ 183–90). The Icelandic En-

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tities relied on SFG's promise that it wouldadvance $20,900,000.00 toward the Projectunder the SFG loan agreement and loancommitment and the oral promises ofSFG's loan officers that SFG would ad-vance additional funds over and above theamount promised in the loan agreementand loan commitment. (Id. at ¶¶ 183–84.)In reliance on these promises, the IcelandicEntities advanced $7,286,802.98 towardthe Project. (Id . at ¶ 185.) Furthermore, inreliance on SFG's promises that it wouldfully fund the SFG loan agreement andloan commitment, the Icelandic Entitiesadvanced an additional $10,419,807.75 to-ward the Project. (Id. at ¶ 187.) TheIcelandic Entities indicate that, if they hadknown that SFG did not intend to fullyfund the SFG loan agreement, they wouldnot have advanced additional funds towardProject. (Id. at ¶ 189.) They also allege thatthey suffered real and proximate harm be-cause of SFG's breach of its promises. (Id.at ¶ 190.)

*17 The Icelandic Entities' allegationsare more than the labels and conclusions,and mere recitation of the elements of thecause of action proscribed by Bell AtlanticCorp. v. Twombly, 550 U.S. 544, 555(2007). Therefore, if not for the FDIC de-fenses, the motion to dismiss would bedenied as to the promissory estoppel claim.

Violation of Subchapter III of WisconsinStatutes Chapter 224—Count III

In moving to dismiss the Icelandic En-tities' claim against it for violating ofChapter 224 of the Wisconsin Statuteswhich regulates mortgage bankers, FN11

SFG argues for dismissal of the claim as awhole. However, SFG also presents argu-ments for dismissal of components of theclaim that are premised on six statutoryprovisions within Chapter 224.

FN11. Chapter 224 was amended in2010. However, the Icelandic Entit-ies rely upon the 2007 version ofChapter 224. The 2007 version ofthe Chapter is included in the file aspart of the Appendix of UnreportedDecisions and Superseded Statutesfiled on October 21, 2010. (ECFNo. 50)

In Count III, the Icelandic Entities as-sert that SFG is a mortgage banker, relyingin part on the allegation in SFG's Com-plaint in the 315 action, that it was a mort-gage banker. (Id. at ¶ 192.) However, inseeking dismissal of the entire claim, SFGstates that the Icelandic Entities specific-ally allege that SFG is not a mortgagebroker under Wisconsin law. (Def.'s Br.Mot. Dismiss 14.) SFG contends that, re-gardless of whether it disagrees with theirallegations, the Icelandic Entities' allega-tions must be taken as true for the purposesof this motion, citing Clorox Co. v. S.C.Johnson & Son, Inc., 627 F.Supp.2d 954,968 (E.D.Wis.2009).

However, SFG has focused on only aportion of the pertinent paragraph inClorox. In fact, Clorox states, “[i]n consid-ering a motion to dismiss under Rule12(b)(6), the court accepts all factual alleg-ations of the complaint as true and drawsall reasonable inferences in favor of theplaintiff.” Id. (citing St. John's UnitedChurch of Christ v. City of Chicago, 502F.3d 616, 625 (7th Cir.2007)). Therefore,for the purposes of this motion, the Courtaccepts as true the Icelandic Entities' alleg-ation that SFG asserted itself as Wisconsinmortgage banker even though the IcelandicEntities also pled that they do not believeSFG is a Wisconsin mortgage banker. (SeeCompl. ¶¶ 35–47, 52–54.)

The next issue that SFG presents is

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whether the FDIC defenses bar the claimunder Wisconsin Statutes § 224.71(1). SFGmaintains that of the six subsection viola-tions alleged by the Icelandic Entities, all,except the claims under § 224.71(l) and(k), are barred by the FDIC defenses.(Def.'s Br. Mot. Dismiss 23–25.) SFG re-lies upon the same arguments that thisCourt has previously addressed. (See infraat 19–27.) For the reasons previouslystated, those arguments are not persuasiveand the § 224.71 claims are not subject todismissal based on the FDIC defenses.

In order to bring the § 224.71 claims,the Icelandic Entities must have standing.Under Wisconsin Statutes § 224.80(2), aprivate cause of action may be brought by“[a] person who is aggrieved by an actwhich is committed by a mortgage banker... and is described in s. 224.77(1).” Wis.Stat. § 224.80(2) (2007–08). The remediesavailable are twice the origination costs,between $100 and $2,000 per violation; or“[t]he actual damages ... sustained becauseof the violation.” Id. § 224.80(2)(a)(1)-(2).

*18 SFG contends that the language of§ 224.80 makes it clear that only a borrow-er was intended to have standing. (Def.'sBr. Mot. Dismiss 16.) The Supreme Courtof Wisconsin has explained: “The goal ofstatutory interpretation is to “ ‘faithfullygive effect to the laws enacted by the legis-lature.’ “ Warehouse II, LLC v. State Dep'tof Transp., 291 Wis.2d, 80, 715 N.W.2d213, 219 (Wis.2006) (quoting State ex rel.Kalal v. Circuit Court for Dane Cnty., 271Wis.2d 633, 681 N.W.2d 110, 123(Wis.2004)). Wisconsin courts defer to thepolicy choices of the legislature and as-sume that the legislature's intent is ex-pressed in the statutory language it chose.See id. Therefore, “[s]tatutory interpreta-tion begins with the language of the stat-

ute.” State v.. Jensen, 324 Wis.2d 586, 782N.W.2d 415, 419 (Wis.2010). If the mean-ing of the statute is plain, Wisconsin courtslook no further. Id.

The plain language of the statute, spe-cifically states an action can be brought by“[a] person aggrieved by an act ... by amortgage banker.” Wis. Stat. § 224.80(2).SFG's contention is contrary to the stat-utory language which does not limit theremedy to borrowers and is, therefore, re-jected. The Wisconsin Supreme Court hasstated that “an ‘aggrieved party’ is definedin part as ‘one having an interest ... whichis injuriously affected.” See Liebovich v.Minn. Ins. Co., 310 Wis.2d 751, 751N.W.2d 764, 774–75 (Wis.2008) (citationomitted).

SFG argues that, even if the IcelandicEntities have standing, they are not at-tempting to recover loan origination costs,so they are limited to actual damageswhich were sustained because of the viola-tion, and the Icelandic Entities have not al-leged that they sustained damages becauseof the violation. (Def.'s Reply Mot. Dis-miss 13.) The Icelandic Entities disagree,stating that they are under no obligation toassert specific money damages at thepleading stage and that they have allegedfacts to support specific violations of §224.77. (Pls.' Opp'n Mot. Dismiss 26.)

The Icelandic Entities' allegations aresufficient to put SFG on notice that theywere damaged and provide a plausibleclaim, establishing standing. The IcelandicEntities have alleged that they suffered realand proximate harm because of SFG's viol-ations of § 224.77(1), and specify that theyhad to pay additional funds, and could loseall of the money they invested in theProject due to the violations. (See Compl.¶¶ 196–97.) This ground for dismissal is

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denied.

1. Section 224.77(1)(b) & (c)The Icelandic Entities allege that SFG

violated § 224.77(1)(b) and (c). (Id. at ¶197.) SFG argues that these allegationsmust be dismissed because § 224.77(1)(b)only applies to “parties to a transaction”and (1)(c) applies to “a client,” and theIcelandic Entities do not allege they wereclients of SFG or parties to a transactionwith SFG. (Def.'s Br. Mot. Dismiss 17–18.)The Icelandic Entities counter that SFG isseeking to artificially limit these provisionsand that the language in these subsectionsdoes not prohibit claims by other parties.(Pls.' Opp'n Mot. Dismiss 27.) However,they do not cite any authority in support oftheir contention.

*19 The plain language of the sectionsin question specifically requires the wrongsto be incurred by a party to a transaction,or a client, in (b) and (c), respectively. SeeWis. Stat. §§ 224.77(1)(b), (c) (2007–08).The Icelandic Entities' allegations regard-ing these subsections arise from loanagreements to which they were not a party,and the Icelandic Entities do not allege thatthey were SFG's client. Therefore, the por-tion of Count III that relies upon violationsof §§ 224.77(1)(b) and (c) does not state aclaim for relief (Compl.¶ 197) and is dis-missed.

2. Sections 224.77(1)(l) & 224.72(4)(a)(2)The Icelandic Entities next allege that

SFG violated § 224.77(1)(l) because SFGfailed to maintain a surety bond in viola-tion of Wisconsin Statutes § 224.72(4)(a)(2). (Id. at ¶ 198.) In seeking dismissal ofthis portion of Count III, SFG asserts thatthese allegations must fail because the pro-vision only applies to applicants for regis-tration as a mortgage banker who maintaina bona fide office in Wisconsin. (Def.'s Br.

Mot. Dismiss 18.) SFG also contends thatthe surety bond was just one of four op-tions to comply with the statute, and thatthe Icelandic Entities do not allege thatthey were aggrieved by SFG's failure tomaintain a surety bond. (Id.)

In response, the Icelandic Entitiesmaintain that SFG had apparently not ful-filled any of the four acts required to com-ply with § 224.72(4)(a)(2). They also statethat, if SFG had maintained a surety bond,they could have possibly recovered someor all of the monies they provided to theProject from that bond. (Pls.' Opp'n Mot.Dismiss 27.)

The Icelandic Entities' claim does notinclude any allegation that SFG did notmeet any of the four conditions under thestatute. It simply alleges that one of fouroptions was not satisfied. Thus, that por-tion of Count III which relies upon the al-leged violation of § 224.74(4)(a)(2)(Compl.¶ 198) does not state a claim uponwhich relief may be granted.

3. Sections 224.77(1)(k) & 224.72(4)(d)(1),224.72(5)(b), 224.79(1), 224.79(2)

Section 224.77(1)(k) states that an ap-plication to be a mortgage broker under §224.72 of the Wisconsin Statutes may bedenied, or registration may be revoked,suspended, or limited if the mortgagebanker violates any provision of Section224 Subchapter III, Chapter 138, or anyother state or federal statute or regulationrelated to practice as a mortgage banker.The Icelandic Entities allege that SFG viol-ated this provision by failing to maintain asurety bond in violation of § 224.72(4)(d)(1), not registering or obtaining a certi-ficate of registration from the WisconsinDFI under § 224.72(5)(b), issuing loandocuments that did not comply with dis-closure requirements under § 224.79(1),

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and by not providing a Consumer Disclos-ure Statement, which is required by §224.79(2). (Compl.¶¶ 199(a)-(d).)

Sections 224.77(1)(k), 224.79(1) & (2)SFG seeks dismissal contending that

such allegations lack merit. (Def.'s Br.Mot. Dismiss 19.) First, SFG states that §§224.79(1) and (2) only apply to a relation-ship between a consumer and mortgagebroker, rather than a mortgage banker. (Id.)It further states that in regard to those samestatutory provisions, the Icelandic Entitiesare not consumers. (Id. (citing Wis. Stat. §224.71 (2007–08)).

*20 The Icelandic Entities respond thatwhether they are consumers is not relevantto whether SFG violated the statutes. (Pls.'Opp'n Mot. Dismiss 27–28.) The IcelandicEntities provide no authority for this asser-tion and it is contrary to the plain languageof the statute.

The statute uses the term “consumer”multiple times in both § 224.79(1) and (2).See Wis. Stat. § 224.79(1)-(2) (2007–08).Section 224.71(1 d) defines “consumer” as“a person other than an organization ...who seeks or acquires mortgage brokerageservices for personal, family, or householdpurposes.” Wis. Stat. § 224.71(1 d)(2007–08). Under this definition, theIcelandic Entities are not consumers. Nor,do they allege that any services they re-ceived or sought were for personal, family,or household purposes. Therefore, §224.79(1) and (2) do not apply to theIcelandic Entities. Therefore, Count IIImay not rely upon alleged violations of §224.79(1) and (2), and ¶ 199(c) and (d) aredismissed. Because § 224.79(1) and (2) arenot applicable to the Icelandic Entities, theCourt declines to address SFG's remainingarguments regarding those provisions.

Sections 224.77(1)(k) & 224.72(4)(d)(1)SFG contends that the allegation that it

violated § 224.77(1)(k) because it did notmaintain a surety bond as required under §224.72(4)(d)(1), (Compl. ¶ 199(a)), shouldbe dismissed. It maintains that § 224.72(4)(d)(1) only applies to applicants who re-gister as a mortgage banker, and theIcelandic Entities assert that SFG never ap-plied for registration as a mortgage bankerin Wisconsin. (Def.'s Br. Mot. Dismiss 19.)Hence, SFG asserts that the provision is in-applicable. SFG also asserts that theIcelandic Entities have not alleged thatthey were damaged by SFG's failure tocomply with this provision. (Id.)

Contrary to SFG's contentions, theIcelandic Entities state that SFG violated §224.72(4)(d)(1), and therefore, they viol-ated § 224.77(1)(k). (Compl. ¶ 199(a).)The Icelandic Entities state that they wereinjured by the failure to maintain a suretybond because their interests may be wipedout as a result of SFG's attempts to fore-close on the Project. (Id. at ¶ 197.) TheComplaint, therefore, contains “sufficientfactual matter, accepted as true, to state aclaim to relief that is plausible on its face.”See Iqbal, 129 S.Ct. at 1949.

Sections 224.77(1)(k) & 224.72(5)(b)In addition, the Icelandic Entities allege

that “SFG never obtained a certificate ofregistration from the Wisconsin [DFI] un-der ... section 224.72(5)(b).” (Compl.¶199(b).) SFG states that the provision inquestion merely instructs the DFI when itmay issue a certificate of registration, butimposes no duty or obligation on anyoneelse. (Def.'s Br. Mot. Dismiss 19.) SFGfurther asserts that the Icelandic Entities donot allege how they were damaged by thisalleged violation. (Id.)

The Icelandic Entities respond that, to

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the extent that SFG never registered, it can-not assert status as a mortgage banker.(Pls.' Opp'n Mot. Dismiss 28.) As previ-ously stated, for the purposes of consider-ing whether Count III states a cause of ac-tion, the Court accepts as true the IcelandicEntities' allegations that SFG asserted itselfas Wisconsin mortgage banker, eventhough elsewhere in the Complaint, theIcelandic Entities also have pled that theydo not believe SFG is a Wisconsin mort-gage banker. See Clorox Co., 627F.Supp.2d at 968; (Compl.¶¶ 35–43,51–54, 192–94.) Also, it accepts as true,paragraph 199(b) of the Complaint whichstates that SFG never registered or ob-tained a certificate of registration thatcould have been issued under § 224.72(5)(b), although it acted as a mortgagebanker in violation of § 224.72(1m). SeeClorox Co., 627 F.Supp.2d at 968; Wis.Stat. § 224.72(1m) (2007–08). UnderIqbal, the Icelandic Entities have allegedfacts, which taken as true, are sufficient tosupport a plausible cause of action. (SeeCompl. ¶¶ 35–43, 51–54, 192–94, 199(b).)

*21 Therefore, SFG has establishedthat the Icelandic Entities cannot state aclaim under §§ 224.79(1) and 224.79(2)(2007). However, it has not established that§§ 224.77(1)(k), 224.72(4)(d)(1), and224.72(5)(b), cannot be relied upon to statethe Chapter 224 claim.

4. Section 224.77(1)(l) ClaimThe Icelandic Entities further allege

that SFG violated Wisconsin Statutes §224.77(1)(l) based on allegationsthroughout the Complaint that SFG failedto conform with the standard of profession-al behavior and standard of care for mort-gage bankers. (Id. at ¶ 200.) SFG arguesthat the Icelandic Entities failed to identifyany standard of professional behavior or

standard of care that SFG must follow.(Def.'s Br. Mot. Dismiss 20.) SFG statesthat the Icelandic Entities rely on theComptroller's Handbook as establishing anindustry standard of care. (Id. (citing Com-pl. ¶ 20).) However, SFG asserts that noth-ing in the Comptroller's Handbook createsa private right of action, provides that aborrower or its investors would have aprivate right of action, or indicates that it isintended to create a standard of profession-al behavior or standard of care that a bankowes to a borrower or the general public. (Id.)

SFG's contentions are not supported bythe Complaint, which are taken as true. TheIcelandic Entities allege several differentrequired standards with which SFG failedto comply. (See Compl. ¶¶ 20–21, 57–62,66–67 & 69.) These allegations are in-cluded in the § 224.77(1)(l) claim by incor-poration. (Id. at ¶ 200.)

SFG also contends that the IcelandicEntities failed to allege how SFG had aduty to the Icelandic Entities to complywith the Comptroller's Handbook or howthey were injured. (Def.'s Br. Mot. Dismiss21.) The statute allows for a private causeof action by a person aggrieved when amortgage banker engages in conduct thatviolates an established standard of profes-sional care for mortgage bankers. See Wis.Stat. §§ 224.77(1)(l) & 224.80(2). Accord-ing to the Complaint, there are establishedstandards of professional care for mortgagebankers, SFG violated those standards, andthat the Icelandic Entities were injured be-cause of this conduct, (see Compl. ¶¶57–62, 66–67, 69, 124, 136, 139–40.)Therefore, SFG's motion to dismiss thatportion of Count III which relies on Wis-consin Statutes § 224.77(1)(l) is denied.

5. Section 224.77(1)(m) Claim

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The Icelandic Entities allege that SFGviolated § 224.77(1)(m) of the WisconsinStatutes because it engaged in improperconduct and dishonest dealings. (Id. at ¶201.) SFG contends that the Icelandic En-tities have failed to allege any dealingsbetween SFG and themselves that couldconstitute dishonest dealings under the stat-ute, and that to the extent the allegationsare based on the same allegations as thepromissory estoppel and unjust enrichmentclaims, the claim must fail because it can-not be based on improper conduct or dis-honest dealings upon which reliance is notreasonable. (Def.'s Br. Mot. Dismiss 21.)SFG also asserts that other allegations con-tradict such allegations because theIcelandic Entities also allege that SFGcould not obtain funds to lend. (Id. at 22.)SFG further argues that it had the right toforeclose so that its threats to do so werenot dishonest, and that it had the right toreject payments when defaults were notcured. (Id.)

*22 In opposition, the Icelandic Entitiesargue that SFG incorrectly asserts that al-legations that are the basis for promissoryestoppel and unjust enrichment claims can-not also provide the basis for their claimunder § 224.77(1)(m). (Pls.' Opp'n Mot.Dismiss 28–29.) They further argue thatthere is no such limitation in the statute. (Id. at 29.) They also assert, regardless ofwhether SFG views the Complaint as in-cluding some evidence of fair dealings, thatdoes not bar their allegation against SFGunder the statutory provision. In addition,they maintain that, in making the claim,they are not asserting DOC Milwaukee'srights under the loan documents. (Id.)

The Icelandic Entities correctly indicatethat there is no limitation in § 224.77(1)(m)with regard to alleging the same acts as

they alleged in their promissory estoppeland unjust enrichment claims. The statutesimply applies to “conduct, whether of thesame or a different character than specifiedelsewhere in [Wis. Stat. § 224.77], whichconstitutes improper, fraudulent or dishon-est dealing.” Wis. Stat. § 224.77(1)(m)(2007–08). The Icelandic Entities suffi-ciently allege that SFG engaged in improp-er and dishonest dealings throughout theComplaint. Iqbal, 129 S.Ct. at 1249; (SeeCompl. ¶¶ 107–43, 191 & 201.) Therefore,SFG's motion to dismiss the portion ofCount III that relies upon § 224.77(1)(m) isdenied.

6. Section 224.77(1)(o) ClaimThe sixth portion of Icelandic Entities

claim under Chapter 224 is that SFGtreated the Icelandic Entities unequallybased on their national origin, in violationof Wisconsin Statutes § 224.77(1)(o). Asrelevant to the Icelandic Entities' claim, thesubsection prohibits a mortgage banker orbroker, in the course of practice as a mort-gage banker or mortgage broker, fromtreating “a person unequally solely becauseof,” among other things, national origin.Wis. Stat. § 224.77(1)(o) (2007–08)(emphasis added).

SFG maintains that the allegations inparagraph 202 of the Complaint are false,but even if they were true, the IcelandicEntities failed to allege that their nationalorigin was the sole basis for SFG's allegedrefusal to negotiate with them. (Def.'s Br.Mot. Dismiss 22.) It also asserts that theIcelandic Entities allege that they did notparticipate in the negotiations for, nor werethey parties to the loan documents. (Id.)This, from SFG's standpoint is a justifica-tion and reason other than national origin,for its refusal to negotiate or deal withsome or all of the Icelandic Entities. (Id. at

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22–23.)

The Icelandic Entities counter that dis-covery will be required to determinewhether their national origin was the solereason for SFG's alleged improper acts, sothat dismissal is not appropriate. (Pls.'Opp'n Mot. Dismiss 29.) The statute re-quires only that “in the course of practiceas a mortgage banker” the bank treatssomeone unequally based solely on nation-al origin. See Wis. Stat. § 224.77(1)(o)(2007–08). There is no requirement that theactual transaction was affected by this un-equal treatment.

*23 According to the Complaint, theIcelandic Entities were treated differentlybecause SFG employees subjected them todisparaging verbal comments about theirnational origin “in connection with theirbehavior during the lending process,” andinclude examples of such remarks.(Compl.¶ 202). These remarks, made bySFG officers and employees, were made“in connection with their behavior in thelending process” and were based on theIcelandic Entities' national origin. (Id.)Specific facts are alleged regarding this un-equal treatment, and accepted as true, aresufficient to “state a claim to relief that isplausible on its face.” See Iqbal, 129 S.Ct.at 1949. SFG's motion to dismiss the por-tion of Count III under § 224.77(1)(o) ofthe Wisconsin Statutes is denied.

Unclean Hands Against SFG–Count IVThe Icelandic Entities also include an

unclean hands claim against SFG.(Compl.¶¶ 203–215.) SFG moves to dis-miss this claim contending that uncleanhands does not exist as a cause of action,but as an affirmative defense. (Def.'s Br.Mot. Dismiss 23.) The Icelandic Entitiesmaintain that such a claim is appropriatewhere parties have been victims of another

lawsuit, such as in the instant situation withrespect to the foreclosure and other actionsfiled by SFG. (Pls.' Opp'n Mot. Dismiss29–30 (citing Gutierrez v. Gonzales, 458F.3d 688, 693 (7th Cir.2006).)

Gutierrez addressed an alien's petitionfor judicial review of an order denying thealien's motion to terminate removal pro-ceedings and ordering his deportation. Thealien argued that the government had com-mitted affirmative misconduct when it usedthe information in his obviously deficientapplication for adjustment of his status toinitiate removal proceedings against him.Id. Although government had not raised thedoctrine of unclean hands, the appellatecourt stated that the undisputed fact thatthe alien was violating that law was at leastrelevant in its determination of whether thegovernment had committed affirmativemisconduct in finding out about the alien.Id. That case does not support the IcelandicEntities' assertion that a cause of action ex-ists and no other authority for that proposi-tion is provided.

The Georgia Supreme Court has ex-plained the doctrine as follow:

“Unclean hands” is a shorthand referenceto OCGA § 23–1–10, which states, “Hewho would have equity must do equityand must give effect to all equitablerights of the other party respecting thesubject matter of the action.” See Dobbsv. Dobbs, 270 Ga. 887, 888, 515 S.E.2d384 [Ga.1999](noting that OCGA §23–1–10 “embodies both the ‘uncleanhands' doctrine and the concept that ‘onewill not be permitted to take advantage ofhis own wrong.’ “ (citations omitted)).However, relief is precluded only if theinequity so infects the cause of actionthat to entertain it “ ‘would be violativeof conscience.’ “ Pryor v. Pryor, 263 Ga.

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153, 153, 429 S.E.2d 676 ( [Ga.] 1993).Goodson v. Ford, No. S11A1740, –––S.E.2d ––––, 2012 WL 685802, at *4(Ga. Mar. 5, 2012). See also, S & M Ro-togravure Serv., Inc. v. Baer, 77 Wis.2d454, 252 N.W.2d 913, 919 (Wis.1977)(“before a court may deny a plaintiff re-lief in equity upon the “clean hands” doc-trine, it must clearly appear that thethings from which the plaintiff seeks re-lief are the fruit of its own wrongful orunlawful course of conduct.”) Based onthe foregoing, SFG's motion to dismiss asto the unclean hands “claim” is granted.

Claims Under Wisconsin Statutes 840.03,841.01 & 844.01–Counts V, VI & VII*24 SFG contends that the Icelandic

Entities' claims for declaratory relief incounts V, VI, and VII should be dismissed.It maintains that such claims are barred bythe law of the case doctrine. (Def.'s Br.Mot. Dismiss 10–11.) In addition, SFGalso maintains that the cited sections do notcreate substantive rights; rather, they onlydelineate the Wisconsin procedures for en-forcing other rights. (Id. at 11.) With re-spect to Count VI, SFG maintains thatChapter 844 of the Wisconsin Statutes isonly available to plaintiffs in possessionand the Icelandic Entities are the opposite.(Id.) SFG also maintains that given theIcelandic Entities' lack of a security in-terest or even a written interest, they essen-tially request an equitable lien, which failsas a matter of law due to lack of a writing.(Id. at 12.) Additionally, it asserts that acognizable claim for unjust enrichment isalso a prerequisite for an equitable lien,and that the Icelandic Entities' unjust en-richment claim fails as a matter of law. (Id).

In arguing that counts are barred by thelaw of the case, SFG relies upon this

Court's August 24, 2010, Decision and Or-der (ECF No. 41), at pages 18 through 20,which dismissed the Icelandic Entities'equitable subordination claims becausethey impermissibly sought an adjudicationof their alleged interest in the “Property.”SFG contends that Counts V, VI, and VIIare merely another way of claiming“equitable subordination,” arguing that be-cause this Court has already ruled on equit-able subordination, the law of the case doc-trine prevents the Icelandic Entities fromproceeding with these claims.

When a rule of law is decided, it shouldcontinue throughout the subsequent stagesof the case. United States v. Story, 137F.3d 518, 520 (7th Cir.1998). The Iceland-ic Entities neither have nor claim to have asecurity interest of record in the property.The allegations in the Complaint do not re-quest that the Court prioritize the interests,so the law of the case doctrine does not ap-ply. Therefore, SFG's contention does notprovide a basis for dismissal of Counts V,VI, and VII.

Section 840.03 Claim—Count VUnder Count V, the Icelandic Entities

seek a declaration of their rights underWisconsin Statutes § 840.03. SFG main-tains that the provision does not create sub-stantive rights but merely delineates Wis-consin's court procedures for enforcing oth-er substantive rights. (Def.'s Br. Mot. Dis-miss 12.)

In opposing dismissal of Count V, theIcelandic Entities assert that this is an ap-propriate cause of action, citing a list ofcases brought under § 840.03 that havebeen decided by the Wisconsin SupremeCourt and the Wisconsin Court of Appeals.(Pls.' Opp'n Mot. Dismiss 14–15.)However, none of those cited decisionshold that there is a cause of action under §

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840.03. Even in the cases where a claimwas based on § 840.03, the courts maderulings on other grounds. See e.g., Nicoletv. Vill. of Fox Point, 177 Wis.2d 80, 501N.W.2d 842, 843 (Wis.Ct.App.1993). Theparties have not cited, and the Court's re-search has not disclosed, any cases where acause of action brought under § 840.03 wasfully adjudicated under that statute.

*25 In order to determine if there is acause of action under § 840.03, the Courtmust engage in statutory interpretation, thesole purpose of which is to ascertain the in-tent of the legislature. Voss v. Middleton,162 Wis.2d 737, 470 N.W.2d 625, 629(Wis.1991) (citing Marshall–Wis. Co. v.Juneau Square Corp., 139 Wis.2d 112, 406N.W.2d 764, 772 (Wis.1987)). To that end,under Wisconsin law, statutory interpreta-tion begins with the language of the statute.State v. Dowdy, 338 Wis.2d 565, 808N.W.2d 691, 698 (Wis.2012). If the mean-ing is plain, the Court's inquiry ends. Seeid. If the statute does not unambiguouslystate the intent, the Court will look tosources outside the statute itself. Mar-shall–Wis. Co. v. Juneau Square Corp.,139 Wis.2d 112, 406 N.W.2d 764, 772(Wis.1987). The Court will then considerthe history, context, subject matter, scopeand object of the statute. In re Condemna-tion by Redev. Auth., 120 Wis.2d 402, 355N.W.2d 240, 244 (Wis.1984).

Section 840.03 of the Wisconsin Stat-utes states:

Any person having an interest in realproperty may bring an action relating tothat interest, in which the person may de-mand the following remedies singly, or inany combination, or in combination withother remedies not listed, unless the useof a remedy is denied in a specified situ-ation:

(a) Declaration of interest.

(b) Extinguishment or foreclosure of in-terest of another.

(c) Partition of interest.

(d) Enforcement of interest.

(e) Judicial rescission of contract.

(f) Specific performance of contract orcovenant.

(g) Judicial sale of property and alloca-tion of proceeds.

(h) Restitution.

(i) Judicial conveyance of interest.

(j) Possession.

(k) Immediate physical possession.

(l) Restraint of another's use of, or activ-ities on, or encroachment upon land inwhich plaintiff has an interest.

(m) Restraint of another's use of, activit-ies on, or disposition of land in whichplaintiff has no interest; but the use,activity or disposition affect plaintiff's in-terest.

(n) Restraint of interference with rightsin, on or to land.

(o) Damages.

(2) The indication of the form and kindof judgment in a chapter dealing with aparticular remedy shall not limit theavailability of any other remedies appro-priate to a particular situation.

(Emphasis added.) The plain languageof the statute indicates that a person withan interest in land may bring an action re-

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lating to that land. The intention of the le-gislature to authorize a cause of action isapparent from the statutory language.

In addition, statutory language is notinterpreted in isolation but rather in con-text, that is, in relation to the language ofsurrounding or closely-related statutes.Dowdy, 808 N.W.2d at 698. Wisconsincourts should interpret statutes to give reas-onable effect to every word, so as to avoidsurplusage or absurd results. Id. Section804.05 states that “any action proper unders [ection] 840.03 may be brought in rem orin personam....” Wis. Stat. § 840.05(2007–08). If no action could be broughtunder § 840 .03, then § 840.05 would bemeaningless. Concluding that the Wiscon-sin legislature would enact a statutewithout any meaning would lead to an ab-surd result. Therefore, this Court concludesthat the Wisconsin legislature intended tocreate a cause of action under § 840.03.

*26 The inquiry does not end with thedetermination that a cause of action existsunder § 840.03, however. The Court muststill address whether the Complaint allegessufficient facts to withstand SFG's motionto dismiss under Fed.R.Civ.P. 12(b)(6).Throughout the Complaint, the IcelandicEntities state that they forwarded largesums of money in the form of loans andequity contributions to keep the Projectmoving and to protect and maintain theproperty after the Project halted. (Compl.¶¶118, 124, 128, 219.) They also state that iftheir interests are not declared, the Iceland-ic Entities will not be able to protect theirequity interest. (Id. at ¶ 223.) As previouslystated, under Iqbal, the Complaint “mustcontain sufficient factual matter, acceptedas true, to state a claim to relief that isplausible on its face.” Iqbal, 129 S.Ct. at1949. Here, the Icelandic Entities have

pleaded sufficient factual matter, includingamounts invested in the Project, to state aclaim that is plausible on its face. There-fore, the SFG's motion to dismiss with re-spect to the § 840.03 claim (Count V) isdenied.

Section 841.01 Claim—Count VIUnder Count VI, the Icelandic Entities

seek a declaration of interest in real prop-erty under Wisconsin Statute § 841.01.(Compl.¶¶ 224–28.) SFG contends that thisclaim should be dismissed, because §841.01 is a procedural statute that does notgive rise to a cause of action. (Def.'s Br.Mot. Dismiss 12.) Although most of thedecisions cited by the Icelandic Entities inopposing SFG's contention do not address§ 841.01 other than in passing or tangen-tially, at least one decision they cite is onpoint. (See Pls' Opp'n Mot. Dismiss17–19.)

In Erickson Oil Products v. WisconsinDepartment of Transportation, the Wiscon-sin Court of Appeals, while stating thematter before them was not a dispute thatcould be resolved under Chapter 841 of theWisconsin Statutes, recognized that an ac-tion could be brought for a declaration ofinterests in real property under § 841.01.184 Wis.2d 36, 516 N.W.2d 755, 758(Wis.Ct.App.1994). Additionally, and con-trary to SFG's assertion, the WisconsinCourt of Appeals found that a plaintiff anddefendant were both seeking relief pursu-ant to § 841.01, although neither had ex-pressly invoked that statute. Schunk v.Brown, 156 Wis.2d 793, 457 N.W.2d 571,572 (Wis.Ct.App.1990) (decided on othergrounds). In addition, a review of Chapter841 as a whole shows that the legislatureintended for § 841.01 to create a cause ofaction. See In re Condemnation by Redev.Auth., 355 N.W.2d at 244.

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Having determined that there is a causeof action under Wisconsin Statute § 841.01, the Court must now address whether theComplaint sufficiently alleges a claim un-der that statute. Section 841.02 sets forthinformation that must be included in acomplaint for a declaration of interests. Itstates, “[t]he complaint shall describe thereal property, the interest of the plaintiffand how the plaintiff acquired the interest,the interest of each person claiming an in-terest known to be adverse to the plaintiff,... and demand that the interests of theplaintiff be established against adverseclaims.” Wis. Stat. § 841.02 (2007–08).

*27 The Icelandic Entities clearly statethat they have an equity interest in theproperty based on the $17,419,807.75 in-vested through contributions to the Projectand loans made to DOC Milwaukee.(Compl.¶ 124.) The Icelandic Entities alsodescribe SFG's interest throughout theComplaint. (See e.g., id. at ¶¶ 84–98.) Oth-er adverse parties are also identified as agroup as subcontractor. (Id. at ¶¶ 154,226–27.) Finally, the Icelandic Entities de-mand that their interest be establishedagainst SFG and the subcontractors. (Id. at¶¶ 226–27.) Such allegations satisfy the re-quirements § 841.02. Additionally, the al-legations, accepted as true for purposes ofthis motion, state a plausible claim of re-lief. See Iqbal, 129 S.Ct. at 1249. There-fore, SFG's motion to dismiss Count VI forfailure to state a claim is denied.

Section 844.01 Claim—Count VIIThe Icelandic Entities also allege that

SFG interfered with their interest andcaused physical injury to the real property,and seek a remedy for this harm underWisconsin Statutes § 844.01. (Compl.¶¶229–39.) In seeking dismissal of CountVII, SFG argues that § 844.01 does not

create a cause of action, primarily relyingupon two decisions. (Def.'s Br. Mot. Dis-miss 6–9.) The first decision is Shanak v.City of Waupaca, 185 Wis.2d 568, 518N.W.2d 310, 320 (Wis.Ct.App.1994),which holds that the history of § 844.01 es-tablishes its remedial nature. The court ofappeals noted that it was originally enactedas Wis. Stats. § 810.01, and the source of §810.10 was 1973 Senate Bill 116. Id. TheWisconsin Legislative Reference Bureau'sanalysis of Senate Bill 116 states that it re-codified the law on real property and “setout ‘real property remedies obtainable by alawsuit.’ “ Id. That court further stated that§ 844.01 is “remedial and procedural stat-ute” and does not create any rights or du-ties. Id .

Two years later in Menick v. City ofMenasha, 200 Wis.2d 737, 547 N.W.2d778, 782 (Wis.Ct.App.1996), the Wiscon-sin Court of Appeals sustained summaryjudgment against a claim brought under §844.01. The court reaffirmed its earlier in-terpretation of the statute, holding that thestatute does not create a cause of action. Id.

The Icelandic Entities assert that con-sideration of Shanak and Menick is onlythe first step of analysis in a rather com-plicated area of law and cite several othercases that involved § 844.01. (Pls.' Opp'nMot. Dismiss 20–21.) The first case reliedupon by the Icelandic Entities is Schultz v.Trascher, 249 Wis.2d 722, 640 N.W.2d130 (Wis.Ct.App.2001). In Schultz, theWisconsin Court of Appeals reviewed thecases involving § 844.01 and found that ofthe three published cases, there was an un-successful attempt to base a cause of actionon § 844.01. Id. at 139. However, inSchultz, the trial court used § 844.01 to“fashion an equitable remedy” for a privatenuisance. Id. Therefore, Schultz does not

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stand for the proposition that § 844.01 cre-ates a cause of action.

*28 The Icelandic Entities also rely ontwo Wisconsin Supreme Court cases. Theyrely on Kruckenberg v. Harvey, stating thecourt allowed a § 844.01 claim to proceed,reversing the Wisconsin Court of Appeals.(Pls.' Opp'n Mot. Dismiss 20–21.) Al-though Kruckenberg v. Harvey was an ac-tion brought under § 844.01, the WisconsinSupreme Court reversed the appellate de-cision based on claim preclusion, and didnot address whether § 844.01 gives rise toa cause of action. 279 Wis.2d 520, 694N.W.2d 879, 894 (Wis.2005). The Iceland-ic Entities also rely on Liebovich, 751N.W.2d at 776 n.9, which they assert statesthat a claim could have been brought under§ 844.01. (Pls.' Opp'n Mot. Dismiss 21.)However, the Wisconsin Supreme Courtstated that the plaintiffs did not bring aclaim under 844.01, but that the statutorylanguage helped illustrate that theplaintiff's complaint alleged a physical in-jury to real property. See Liebovich, 751N.W.2d at 776 n.9.

There is some authority to support theIcelandic Entities' claim that a cause of ac-tion exists under § 844.01. A 2009 Wiscon-sin Court of Appeals decision notes thatChapter 844 “ authorizes actions for inter-ference with or physical injury to an in-terest in real property” and cited § 844.01.Soma v. Zurawski, 321 Wis.2d 91, 772N.W.2d 724, 728 n.4 (Wis.Ct.App.2009)(emphasis added). The court then discussedremedies that may result from an action un-der Chapter 844. Id. The foregoing may in-dicate that at least one Wisconsin appellatecourt believes a cause of action can existunder § 844.01. FN12 Additionally, al-though Liebovich did not rule on § 844.01or expressly state that a cause of action ex-

ists, by comparing the claim to the lan-guage of § 844.01, it too seems to indicatethat a cause of action could exist. See 751N.W.2d at 776 n.9.

FN12. In Hutchens v. Simonson, theWisconsin Court of Appeals ana-lyzed whether the plaintiffs had theburden of proof to establish an own-ership claim in order to succeed intheir cause of action under section844.01. 276 Wis.2d 865, 688N.W.2d 784 (Wis.Ct.App.2004)(Table). However, the case is un-published and has no precedentialvalue. See Wis. Stat. § 809.23(2007–08).

This action is brought before the Courtunder its diversity jurisdiction. In diversityactions where the state's highest court hasnot ruled on an issue, a federal court mustpredict how that court would rule on the is-sue. See, e.g., River E. Plaza, LLC. v. Vari-able Annuity Life Ins. Co., 498 F.3d 718,721 (7th Cir.2007). Based on the dicta inLiebovich and the fact that the appellate de-cision holding that a cause of action existsunder § 844 .01 is more recent than thosedecisions that found no cause of action ex-isted, this Court predicates that the Wis-consin Supreme Court would find a causeof action to exist under § 844.01.FN13

FN13. In a March 6, 2012, decision,the Court of Appeals for SeventhCircuit concluded that Wis. Stat. §844.01 does not create an independ-ent cause of action; it is a statutethat sets forth remedies when acause of action exists. See Roundy'sv. N.R.L.B., Nos. 10–3921 &11–1292, 2012 WL 752541, at *10(7th Cir. Mar. 9, 2012). The appel-late court cited Menick, 547 N.W.2dat 782 (citing Shanak, 518 N.W.2d

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at 320) and Schultz, 640 N.W.2d at139. However, the Roundy's courtdid not cite the 2009 WisconsinCourt of Appeals decision whichnoted that the action for the forcedsale of the plaintiff's land to the de-fendant could be “treated as an ac-tion based on interference with aproperty interest under ch. 844,Wis. Stats. and that under “thischapter, the court may award thelegal or equitable relief to whichPlaintiff is entitled.” Soma, 772N.W.2d at 727–28 (citing § 844.20,Wis. Stats.). The Seventh CircuitCourt of Appeals also did not citeLiebovich, 751 N.W.2d at 764.

SFG also argues that even if there is acause of action, relief is inappropriate be-cause it is only available to plaintiffs inpossession, citing Wisconsin Statute §844.15(2). (Def.'s Reply Mot. Dismiss 11.)Section § 844.15(2) specifically states that

[a] person claiming injury or interferencewho does not have possession, may bringan action under this chapter only by al-leging that the person with the right topossession refuses to bring the action,and by alleging the efforts which havebeen made to induce the person with theright to possession to bring the action.The person with right to possession shallbe joined as a defendant.

*29 (Emphasis added.) The IcelandicEntities allege that “[w]ithout resolution ofthis dispute over the parties' interests, itwill be impossible to resolve the issue ofwho has the right to possession of theProject for purposes of Wisconsin Statutessection 844.15.” (Compl.¶ 238.) While theIcelandic Entities have attempted to pleadaround the requirement of § 844.15(2),they do not allege that the person (or en-

tity) with the right of possession refuses tobring the action, they also do not allege ef-forts that have been made to induce suchperson to bring the action and have notjoined such person as a defendant. Thus,the Icelandic Entities have failed to plead aplausible claim for relief under § 844.01 ofthe Wisconsin Statutes.

Furthermore, the Court notes thatIcelandic Entities alleges that “ WisconsinStatutes section 844.18 specifically allowsthe Icelandic Entities to resolve its propertyinterest claims and to resolve this dispute.”(Id. at ¶ 239.) However, the cited provisionstates: “Any person claiming an interest inthe property described in the complaint,and claiming that he or she has been, orwill be, injured by a defendant's activitymay intervene in the action.” The provisiondoes not support the Icelandic Entities'claim because they are are not attemptingto intervene in this action. Based on theforegoing, Count VII fails to state a causeof action. SFG's motion for dismissal isgranted as to Count VII.

SummaryIn sum, SFG's motion to dismiss is

granted as to the unjust enrichment claim(Count I); the promissory estoppel claim(Count II); part of the Wisconsin StatutesChapter 224 claim (Count III) with respectto the portions of the claim under §§224.77(1)(b) and (c), § 224.77(1)(l) relyingupon § 224.79(4)(a)(2), § 224.77(1)(k) re-lying on §§ 224.79(1) and (2); the claim forunclean hands (Count IV); and the claimfor interference with interest and physicalinjury to real property (Count VII).

The motion to dismiss is denied as tothat part of the Wisconsin Statutes Chapter224 claim (Count III) based on the allegedviolations of § 224.77(1)(k) (relying on §§224.72(4)(d)(1) and 224.72(5)(b)) and §§

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224.77(1)(l), 224.77(1)(m), and224.77(1)(o); the claim for a declaration ofrights under Wisconsin Statutes § 840 .03(Count V); and the claim for a declarationof interest in real property claim underWisconsin Statutes § 841.01 (Count VI).

NOW, THEREFORE, BASED ONTHE FOREGOING, IT IS HEREBYORDERED THAT:

SFG's motion to dismiss (ECF No. 47)is GRANTED with respect to the follow-ing portions of the Complaint: the unjustenrichment claim (Count I); the promissoryestoppel claim (Count II); part of the Wis-consin Statutes § 224 claim (Count III)with respect to the claims under §§224.77(1)(b) and (c), § 224.77(1)(l) relyingupon § 224.79(4)(a)(2), § 224.77(1)(k) re-lying on §§ 224.79(1) and (2); the claim forunclean hands (Count IV) and the claim forinterference with interest and physical in-jury to real property (Count VII); and isDENIED in all other respects.

E.D.Wis.,2012.SJ Properties Suites v. Specialty FinanceGroup, LLCSlip Copy, 2012 WL 1079902 (E.D.Wis.)

END OF DOCUMENT

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