Gold Coast Sellers Settle Lawsuit Over $7.4 Million Mansion

Jack McGinley knew he was going to lose the lawsuit over his Gold Coast Chicago mansion.

That’s according to texts sent by his broker, as the former pharmaceutical executive and his wife, Julie McGinley, faced a lawsuit over their decision to back out of a $7.4 million deal to sell their home, days before it was set to close in May. The McGinleys reached a settlement in December with the buyers, Jason and Courtney Kuhn, who took them to court last year to enforce the sale. The terms of the agreement are not public in court records.

In texts surfaced in court filings, the McGinleys’ broker, Jameson Sotheby’s Tim Salm, said Jack McGinley knew that he would eventually lose the lawsuit, but the litigation would give him time to stay there.

“Jack said the litigators said it will take 2-3 years for them to win, and he’s 78 and will give him that time to live in the house which is worth it,” Salm wrote in a text message to the lawyer who worked with the McGinleys on the sale.

In another text, Salm said the buyers will “win the lawsuit and ultimately get the house. He knows it.” Salm did not respond to a request for comment.

The lawsuit centered on the botched deal over the 9,000-square-foot home at 1336 North State Parkway, which fell apart after Julie McGinley grew more and more uncertain with the decision to sell the house, according to deposition testimony from the McGinleys.

It’s not the first time the McGinleys were accused of treating contracts as optional. The Harold B. Smith Foundation is suing the McGinleys for canceling a $37.5 million offer to buy Aloha Lodge in Lake Geneva, Wisconsin.

According to that lawsuit, the McGinleys canceled a pending contract to buy a Palm Beach, Florida home from the same foundation just a few days before the agreed-upon closing date in 2023. In a separate incident with different sellers, according to the foundation’s complaint, the McGinleys pulled out of a contract to buy a Lake Geneva home before closing. The couple entered into a contract to buy the same property two years later, then terminated it again, prompting a Wisconsin lawsuit in 2020, according to the foundation’s complaint.

The Harold B. Smith Foundation said in the filing the McGinleys have a “pattern of signing binding contracts and then not closing the transactions.”

Beyond the Gold Coast home, the McGinleys own houses in Lake Forest; Santa Ynez, California, and South Dartmouth, Massachusetts, according to court documents.

The McGinleys, Courtney Kuhn, and their attorneys did not respond to requests for comment.

Since the terms of the settlement are private, it’s not clear if the McGinleys ended up handing over the Gold Coast property to the Kuhns. No property record showing the transfer of the property is available. However, in September, when the suit was ongoing, a record was filed indicating the McGinleys paid off a $6 million mortgage they had taken out on the house in 2020.

The signature

During negotiations over the Gold Coast house, the McGinleys’ lawyer, Julie Moltz-Matgous, requested an extension to the original contract that allowed the McGinleys to pull out of the deal by May 21. The original contract, signed March 22, had a 14-day window for either party to cancel. In response, the Kuhns requested that the change allow either party to cancel the contract by the new date.

Moltz-Matgous sent a subsequent letter denying that request and withdrawing the request to change the contract. But on May 21, after the deadline to cancel the contract, Moltz-Matgous sent a letter to the Kuhns’ attorney notifying them that the closing, which was scheduled for June 2, was canceled.

To back up their legal right to cancel the contract, the McGinleys argued in court that Jack McGinley, who signed the contract, was not authorized to make decisions for JJR Holdings, the LLC that owned the home. The sole member of JJR Holdings is JCM Trust, and the McGinleys argued Julie McGinley was the only beneficiary of that trust.

But the plaintiffs produced a 2013 document in discovery that lists Jack McGinley as a trustee of JCM Trust. The McGinleys argued that joint ownership was only temporary, and the trust was transferred back to Julie McGinley later. In a court filing, the McGinleys’ attorneys pointed to Secretary of State records that show Julie McGinley is the “sole member” of JCM Trust.

The plaintiffs argued that Jack McGinley had previously signed documents for JJR Holdings, and even if he technically lacked authority to sign, the contract was still valid because Julie McGinley agreed through her conduct. They noted that she allowed inspections to occur, permitted her attorney to negotiate contract modifications and accepted the earnest money deposit without objection, thereby validating the contract after the fact.

Seller’s remorse

The McGinleys’ deposition testimony paints Jack McGinley as the hard-driving dealmaker and Julie McGinley as a reluctant participant who had never fully agreed to the sale.

Jack McGinley said when the Kuhns’ offer came in, Julie McGinley wasn’t happy with the offer. Jack McGinley said he told his wife “we can always get out” and pushed her to move forward with the deal, according to court documents.

“As I’ve done with every property we own, I coerced, I pushed,” Jack McGinley said. “I usually get my way, so I drove hard to get this deal done.”

Julie McGinley said she was never on board, and wanted to sell the house for a higher price. The McGinleys paid $7.1 million for the house in 2013, property records show, and she said in her testimony they had made close to $4 million in renovations. But she said she never told her broker or attorney that she objected to his signature on the contract, according to court documents.

“I won’t say I went along with it. I disagreed with it vehemently,” she said in deposition testimony. ”I just knew the deal wasn’t done, and I was trying to convince him we’re getting out of this.”

Jack McGinley said in the deposition he told Moltz-Matgous to cancel the contract after a conversation with his wife where she refused to sell the house.

“She was the most upset I’ve ever seen her,” he said. “And I thought up until that point I could convince her to sell the property.”