10-Apr-17 – A Chicago condo board president’s need to keep a federal lawsuit out of the news may have led to a campaign against a reporter that ended with the reporter’s lease not being renewed and a threat of violence.

When she ran for re-election to the condo board at Marina City in 2013, Ellen Chessick (left), co-owner of 15 units at Marina City but registered to vote in Nevada, told unit owners her 24 years of business management experience included being, along with her husband, Chicago lawyer Kenneth Chessick, “among the founders of Restaurant.com and now [we] are controlling owners.”

What was left out of campaign literature was that Restaurant.com, a 350-employee company based in Arlington Heights that sells gift certificates for restaurants throughout the United States, was founded in 1999 by four people, none of whom were the Chessicks, and that Kenneth Chessick, the uncle of a friend of theirs, had bought out the founders. That Ellen Chessick, according to the founders, was on the company’s board of directors but “had very little, in fact, almost no involvement in the business.”

And that more than 500 complaints against Restaurant.com had been filed with the Better Business Bureau.

Complaints against the company included selling gift certificates and cards for restaurants that have gone out of business or had not agreed to participate.

And there were the federal lawsuits. In 2010, a customer filed a lawsuit, claiming Restaurant.com was selling gift certificates with expiration dates in violation of the Illinois Consumer Fraud and Deceptive Practices Act, which made it illegal for a business to issue a gift certificate with an expiration period of less than five years. Mariam Munsif-Toscano sued on behalf of herself and others but was unable to get the case certified as a class action. That case was dismissed and when Munsif-Toscano appealed in 2012, an appellate judge upheld the decision of the trial court.

Two residents of New Jersey would have better luck suing Restaurant.com but it would take six years and nine months. Gregory Bohus and Larissa Shelton sued over gift certificates that had fine print in violation of New Jersey law. They won just $1,100 but Restaurant.com was ordered to pay $190,000 to eleven attorneys at three law firms who worked on the case for Bohus and Shelton.

The case was argued before the United States Court of Appeals and New Jersey Supreme Court, was a class action at one time, was dismissed twice and appealed twice. It has become a cautionary tale across the U.S. for anyone selling gift certificates. One of the appellate judges said of the case, “its impact will be truly far-reaching.”

Coverage of story leads to conflict with condo board

Loop North News, then called Marina City Online, started covering Restaurant.com in 2013 after a tip led to the BBB complaints. More than 20 articles were published, mostly about the arduous progress of the New Jersey lawsuit.

At first, the pressure against Loop North News editor Steven Dahlman – this reporter, a renter at Marina City from 2005 to 2015 – was subtle, with board member Pranav Seth, for example, commenting that “class action lawsuits are a dime a dozen,” unconvinced the federal lawsuit, then a class action, was notable.

Then came the email campaign from elderly residents of Marina City, asking Dahlman to stop reporting on the lawsuit, with the content of each email all virtually identical, as if it had been pre-written for them.

Brian Muir

Mark Ulaszek

The campaign continued on a now-defunct Internet bulletin board managed by Mark Ulaszek, currently a director on the board of Marina Towers Condominium Association. Posts, approved by Ulaszek, some signed but most of them anonymous, were also critical of the news stories about the lawsuit.

Board member Brian Muir claimed on the forum, Marina Watchdog, that coverage of the Restaurant.com lawsuit was retaliation by Dahlman for not being chosen to edit the condo association newsletter.

Other posts were less kind.

Vague threats from MTCA attorney

In 2015, with coverage of the federal lawsuit against Restaurant.com not slowing, Marina Towers Condominium Association had its attorney, Kerry Bartell (left), write to Loop North News editor Steven Dahlman. In the June 1 letter, Bartell accused Loop North of publishing “false and defamatory” information about “a lawsuit involving a company that you allege is owned by one of the current board members.”

Despite numerous requests, Bartell, a principal with the law firm of Kovitz Shifrin Nesbit, would not provide any details such as what exactly was disputed and in particular, assuming she was the board member to whom Bartell was referring, what Ellen Chessick’s current relationship was to Restaurant.com. While refusing to provide any further information to Loop North News, MTCA told other news outlets that Chessick was not currently a co-owner of Restaurant.com.

However, on its Annual Franchise Tax Report, filed with the State of Delaware for tax years 2014, 2015, and 2016, Ellen Chessick is listed as one of two directors of Restaurant.com, Inc., the other director being Kenneth Chessick.

“Vague and unsubstantiated allegations can only be interpreted as an effort to intimidate and chill the exercise of press freedom,” wrote Dahlman’s attorney, Thomas Rosenwein (right), to Bartell on July 16, 2015. “The articles reflect investigative journalism on issues of public interest as disclosed in publicly available lawsuits. That a board member may feel embarrassed by such reporting does not rise to the level of falsity or defamation.”

Believing the claims in her letter were non-meritorious and a violation of rules of conduct for attorneys in Illinois, Loop North News filed a complaint against Bartell with the Illinois Supreme Court’s Attorney Registration and Disciplinary Commission. After a two-month inquiry, however, the ARDC decided it would be “unable to prove by clear and convincing evidence” that the attorney engaged in professional misconduct.

In her response to the ARDC complaint, Bartell denied her letter was an attempt to intimidate and again accused Loop North News of publishing inaccurate and incomplete information, while again declining to provide any examples.

Reporter threatened and lease not renewed

Early in the week of July 6, 2015, after the ARDC complaint was filed but before a decision was returned, Ellen Chessick asked Dahlman’s landlord, Michael Michalak, to meet with her.

Michalak, a real estate investor, broker, and RE/MAX agent, had been Loop North’s first sponsor when it was called Marina City Online and was focused on news closer to Marina City. Michalak had promoted the site so enthusiastically that many people believed, incorrectly, that it was his website. As coverage area and readership grew, he continued to pay the website to advertise his real estate listings.

“Wondering if you are in town this weekend or next week to discuss the meeting that I had with the condo association president,” wrote Michalak to Dahlman in an email on July 8.

The meeting, welcomed though it may have been, would not take place. On July 10, Michalak (left) angrily served in person a 60-day notice that he was not renewing Dahlman’s lease. Enraged, he threatened to come back and “burn the place down.”

In August 2015, Ellen Chessick denied to a reporter of Crain’s Chicago Business that she had had any meeting with Michalak.

By early November, Michalak had a new tenant in the one-bedroom condo unit he owned in Marina City’s east tower. A complaint against him, filed in December 2016 with the real estate division of Illinois Department of Financial and Professional Regulations, is still pending.

Though the federal lawsuit against Restaurant.com by the New Jersey residents appears to have wound down, a new lawsuit has been filed in United States District Court by an Illinois resident. Phil Hollingsworth claims he received spam on his mobile phone from Restaurant.com and two other defendants in violation of federal law.

The news only got worse for Restaurant.com and on February 1, 2017, its list of adversaries got longer. As widely reported by news media local and nationwide, the Chicago Better Business Bureau issued an alert to consumers and businesses about a “pattern of complaints” against Restaurant.com.