4043 S. Drexel Condominium Association v. Burke

2022 IL App (1st) 210666-U
CourtAppellate Court of Illinois
DecidedSeptember 6, 2022
Docket1-21-0666
StatusUnpublished

This text of 2022 IL App (1st) 210666-U (4043 S. Drexel Condominium Association v. Burke) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
4043 S. Drexel Condominium Association v. Burke, 2022 IL App (1st) 210666-U (Ill. Ct. App. 2022).

Opinion

2022 IL App (1st) 210666-U No. 1-21-0666 FIRST DIVISION September 6, 2022

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). ______________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ______________________________________________________________________________ 4043 S. DREXEL CONDOMINIUM ASSOCIATION, an ) Appeal from the Illinois not-for-profit corporation, ) Circuit Court of ) Cook County. Plaintiff-Appellant, ) ) v. ) ) No. 18 CH 011469 JOSEPH C. BURKE, an individual, GLOBAL ASSETS ) LLC, GLOBAL ASSETS LLC SIX, GLOBAL ASSETS ) LLC SEVEN, GLOBAL ASSETS LLC EIGHT, ) GLOBAL ASSETS LLC NINE, and DDOT4043 LLC, ) Honorable ) Anna M. Loftus, Defendants-Appellees. ) Judge, presiding.

JUSTICE PUCINSKI delivered the judgment of the court. Presiding Justice Hyman and Justice Coghlan concurred in the judgment.

ORDER

¶1 Held: The plaintiff-appellant condominium association and the defendants-appellees each filed summary judgment motions seeking declaratory relief as to (1) the validity of the plaintiff’s purported 2017 election of a board of directors, (2) the validity of the plaintiff’s purported amendment to the association’s declaration, and (3) the validity of defendants’ 2018 purported election of a different board of directors. The trial court correctly denied the plaintiff association’s motion for summary judgment, as the record demonstrated the invalidity of both the association’s 2017 election and the declaration amendment. We also affirm the grant of summary judgment for defendants due to plaintiff’s lack of standing to maintain the action, No. 1-21-0666

given the invalidity of plaintiff’s purported board. We thus affirm both appealed- from orders.

¶2 In this dispute over control of a condominium association, plaintiff 4043 S. Drexel

Condominium Association (the Association) appeals from the trial court’s order denying the

Association’s motion for summary judgment on count I of its second amended complaint, as well

as the subsequent order granting summary judgment on that count to defendants Joseph C. Burke,

Global Assets LLC, Global Assets LLC Six, Global Assets LLC Seven, Global Assets LLC Eight,

Global Assets LLC Nine, and DDOT4043 LLC. In the underlying motions for summary judgment,

the parties sought declaratory relief regarding three issues raised in count I: (1) the validity of the

Association’s purported election of board members in November 2017; (2) the validity of the

Association’s amendment to the declaration purporting to reduce the number of board members,

and (3) the validity of defendants’ purported August 2018 election of board members.

¶3 For the following reasons, we conclude that the Association’s purported board election in

November 2017 was not valid because it was not properly noticed or conducted at a meeting of

unit owners, as required by the Association’s declaration. Similarly, the Association’s purported

amendment to the declaration was invalid because it was never presented in writing to the unit

owners or subject to a vote. We thus affirm the trial court’s September 2020 order denying

summary judgment to the Association. With respect to the June 2021 order granting summary

judgment to defendants, the invalidity of the Association’s purported 2017 board election means

the Association lacks standing to maintain the instant action. We thus affirm summary judgment

for defendants on that basis, without needing to independently assess the validity of defendants’

purported 2018 election of a new board of directors. We thus affirm both appealed-from orders,

although our decision does not impact the ability of the condominium unit owners to raise similar

claims in a derivative action.

-2- No. 1-21-0666

¶4 BACKGROUND

¶5 The Association is a not-for-profit corporation whose members own residential

condominium units in the 4043 S. Drexel Condominiums, a 12-unit building in Chicago. The

Association was formed under a Declaration of Condominium Ownership and of Easements,

Restrictions, Covenants and By-Laws for the 4043 S. Drexel Condominiums (the declaration)

recorded on August 24, 2006.

¶6 Defendant Burke purchased a condominium unit in 2006. Burke serves as an officer and

agent for the remaining corporate defendants, Global Assets LLC, Global Assets LLC Six, Global

Assets LLC Seven, Global Assets LLC Eight, Global Assets LLC Nine, and DDOT4043 LLC,

which have purchased a number of other condominium units. The defendants collectively own

eight of the 12 units in the condominium. 1 At the time the instant litigation commenced in 2018,

defendants held 49.54% of the ownership interests in the condominium. After defendants acquired

an additional unit in October 2019, their collective ownership interest increased to 56.42%. Some

or all of the defendants’ units have been rented out by defendants to non-owner tenants.

¶7 Relevant Provisions of the Declaration and Bylaws Contained Therein

¶8 The declaration reflects that it was executed by Standard Bank & Trust Company

(identified as the “Declarant”) in March 2006 and was recorded with the Cook County Recorder’s

office on August 24, 2006. The declaration identifies the “Developer” as Queen Condominiums

of 4043 S. Drexel, Inc.

1 Global Assets LLC, Global Assets LLC Six, Global Assets LLC Seven, Global Assets LLC Eight, Global Assets LLC Nine are Illinois limited liability companies that own condominium units 304, 102, 201, 203, and 302, respectively. DDOT4043 LLC is an Illinois limited liability company that owns unit 303. Burke inherited unit 301 from his father Robert Burke after his death in October 2018. Burke purchased unit 103 in 2019 from its former owner, Joseph Shine.

-3- No. 1-21-0666

¶9 The declaration states that “Articles 5 and 6 hereof shall constitute the By-Laws of the

Association.” The provisions in Article 5 are particularly pertinent to this appeal.

¶ 10 Section 5.1 of the declaration provides that “The direction and administration of the

Property shall be vested in the Board of Directors (herein sometimes referred to as the ‘Board’),

which shall consist of five (5) persons who shall be elected in the manner hereinafter set forth.”

The same section specifies that the initial board of directors shall be chosen by the Declarant or

Developer, “until the initial meeting of Unit Owners.”

¶ 11 Under section 5.6, “The initial Board of Directors designated by the Declarant or Developer

pursuant to section 5.1 hereof shall consist of three (3) directors.” That “initial board” was to serve

from the execution of declaration until the election of directors “at the initial meeting held as

provided in Section 5.4(b) hereof.” The record does not reflect whether the Declarant or Developer

ever selected an initial board of directors.

¶ 12 Under section 5.4(b), the “initial meeting of the Unit Owners” “shall be held no later than

the first to happen of (i) sixty 60 (days) after the date the Declarant has sold and delivered its deed

for at least seventy-five (75%) of the Unit Ownerships or (ii) three (3) years from the date of the

recording of this Declaration.” Section 5.6(a) provides that “[a]t the initial meeting ***, the Voting

Members shall elect the Board” that shall serve until the first annual meeting.

¶ 13 Section 5.4(b) specifies that after the initial meeting, “there shall be an annual meeting of

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2022 IL App (1st) 210666-U, Counsel Stack Legal Research, https://law.counselstack.com/opinion/4043-s-drexel-condominium-association-v-burke-illappct-2022.