2024 IL App (2d) 230425-U No. 2-23-0425 Order filed June 3, 2024
NOTICE: This order was filed under Supreme Court Rule 23(b) and is not precedent except in the limited circumstances allowed under Rule 23(e)(l). ______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT ______________________________________________________________________________
BOULDER HILL CONDOMINIUM ) Appeal from the Circuit Court ASSOCIATION, ) of Kendall County. ) Plaintiff-Appellee, ) ) v. ) No. 19-CH-117 ) CHRISTOPHER COPE, ) Honorable ) Stephen L. Krentz, Defendant-Appellant. ) Judge, Presiding. ______________________________________________________________________________
JUSTICE BIRKETT delivered the judgment of the court. Presiding Justice McLaren and Justice Mullen concurred in the judgment.
ORDER
Held: Defendant sufficiently alleged that plaintiff breached its fiduciary duty thereby precluding summary judgment.
¶1 In this interlocutory appeal under Illinois Supreme Court Rule 307(a)(4) (eff. Nov. 1,
2017), defendant, Christopher Cope, appeals the trial court’s order granting partial summary
judgment in favor of plaintiff, Boulder Hill Condominium Association. We vacate and remand.
¶2 I. BACKGROUND
¶3 Plaintiff is “an Illinois condominium association” that is primarily located in
Montgomery. Defendant owns one of the units falling under the Association’s purview. On March 2024 IL App (2d) 230425-U
27, 2019, the Association filed its three-count complaint against defendant, seeking: (1) a
mandatory injunction requiring defendant to effectuate a sale of his unit; (2) a declaratory judgment
stating that defendant violated the Illinois Condominium Property Act (Act) (765 ILCS 605/1 et
seq. (West 2018)), making him liable for reasonable attorney fees and court costs; and (3) a finding
that defendant tortiously interfered with plaintiff’s agreement to sell the units.
¶4 By way of background, the complaint generally alleged that, on April 19, 2017, plaintiff
sent to all unit owners a notice of a May 4, 2017, meeting to ascertain whether the owners wished
to accept an offer to sell all of the Association’s units for a sum of $1,591,800. On May 4, 2017,
plaintiff conducted the meeting, at which more than 75% of the condominium owners voted in
favor of selling the property. Plaintiff’s attorneys began preparing and collecting the requisite
closing documents from each of its owners, but defendant failed to return the completed documents
to plaintiff’s counsel. Instead, upon the plaintiff’s “information and belief,” defendant “contacted
multiple other members of the Association,” advising them not to return any closing documents to
plaintiff. Since then, defendant has shown “an unwillingness to execute the documents necessary
to effectuate the sale of [his] Unit, as required by the Act.”
¶5 On February 6, 2020, plaintiff filed its first motion for summary judgment, arguing that
defendant was in violation of the Act by failing to execute the relevant closing documents
associated with his unit. On June 3, 2020, defendant was given leave to file his response to the
motion. In his response, defendant argued that Ruben Ybarra, who was on the Association’s board
as an agent of Boulder Hill Apartments, LLC, the majority owner of the association’s units, was
attempting to “force a sale of all of the condominium units from the current unit owners back to
the Association at a sales price unilaterally chosen by the Association/Ruben, to then do with the
units as the Association/Ruben pleases.” Pertinently, defendant also argued that summary
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judgment was not appropriate because he disputed many of the material facts outlined in plaintiff’s
complaint—such as whether he in fact had failed to turn over any executed closing documents—
and because plaintiff’s allegations in the complaint were “largely conclusory in nature” and relied
on an outdated version of the Act to defendant’s detriment. On August 4, 2020, the trial court
denied plaintiff’s motion for summary judgment, finding that there were “material questions of
fact that preclude[d] summary judgment.”
¶6 After numerous continuances, on November 21, 2022, defendant filed a motion for leave
to file his affirmative defenses and counterclaim. As his affirmative defenses, defendant sought to
argue that Ruben utilized the plaintiff corporation as an alter ego to: (1) breach a fiduciary duty he
owed to each member of the association by drafting and promoting a sales contract that benefited
himself and his wife, Yolanda, to the detriment of the association; and (2) initiate the instant case
with unclean hands. In short, defendant wished to argue that the proposed bulk purchaser of the
units, Boulder Hill Apartments, LLC, was owned by YRY Holdings, LLC, which in turn was
solely managed by Yolanda Ybarra, Ruben Ybarra’s wife. 1 Given this relationship, defendant
concluded that Ruben was a “de facto owner” of YRY Holdings, LLC, and that he was attempting
to induce a sale of the units solely to benefit his family’s corporation to the detriment of the unit
1 Specifically, defendant alleges that “[t]he only member of Boulder Hill Apartments, LLC
is YRY Holdings, LLC,” and the “manager of YRY Holdings, LLC is Yolonda Ybarra.”
According to defendant, “[t]he members of YRY Holdings, LLC are the Yolanda Rosemarie
Ybarra Living Trust, the Ybarra Children’s Trust, and the Ruben Ybarra Jr. Insurance Trust.”
Either Ruben or his wife, Yolanda, “are the trustees of those trusts.” We note that plaintiff concedes
that Yolanda “has a limited ownership interest” in Boulder Hill Apartments, LLC.
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owners. In his proposed affirmative defenses, defendant also referenced an Association meeting
that purportedly took place in March 2017 “for the purpose of voting on whether to accept the ***
purchase proposal.” According to defendant, “formal voting was tabled [on that date] because
Ruben determined that there was an insufficient number of votes in favor of the proposal.”
¶7 On February 17, 2023, plaintiff responded to the motion for leave. In the response, plaintiff
argued that, as a corporation, it could not hold any fiduciary duties towards defendant. On May
10, 2023, the court entered an order granting defendant leave to file his affirmative defenses and a
counterclaim. On May 11, 2023, defendant filed his aforementioned affirmative defenses, as well
as counterclaims for breach of fiduciary duty and constructive fraud.
¶8 On June 13, 2024, plaintiff filed its motion for partial summary judgment. Plaintiff
reiterated that defendant failed to dispute that 75% of the Association’s unit owners voted to
approve the sale, and that, as a result of this approval, defendant’s refusal to turn over any closing
documents to effectuate the sale was unlawful. Plaintiff also argued that defendant’s refusal to
execute the closing documents was not a result of any legitimate concerns he had concerning the
sale, but rather, was driven from spite, as plaintiff was currently engaged in a lawsuit against
defendant’s father, Jay Cope. As a result, plaintiff requested a “mandatory injunction *** requiring
[d]efendant to execute the [c]losing [d]ocuments within three days of entry of judgment,” as well
as a second injunction “granting the Association a limited power of attorney for purposes of
executing the [c]losing [d]ocuments on [d]efendant’s behalf in the event that [d]efendant fails to
do so within three days of entry of judgment.” Last, plaintiff requested that the matter be continued
thereafter “for purposes of filing a petition for attorneys’ fees.”
¶9 On June 14, 2023, plaintiff answered defendant’s affirmative defenses.
¶ 10 On August 3, 2023, defendant responded to the partial motion for summary judgment,
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asserting that material questions of fact remained concerning the unpaid balance of his mortgage
that precluded summary judgment. Defendant further argued that plaintiff breached several
fiduciary duties owed to defendant, which meant that plaintiff was not entitled to complete the sale
of the units as a matter of law.
¶ 11 On October 5, 2023, the trial court granted plaintiff’s motion for partial summary
judgment. As a threshold matter, the trial court first noted in the order that, pursuant to the Act,
plaintiff received the requisite number of approval votes from its unit owners in order to lawfully
effectuate the sale. Next, the court analyzed defendant’s arguments concerning any questions of
his mortgage, finding the contentions moot, as plaintiff had specified during oral argument that it
would satisfy defendant’s mortgage with the sale proceeds.
¶ 12 Thereafter, the court acknowledged that, pursuant to Kai v. Board of Directors of Spring
Hill Condominium Ass’n, 2020 IL App (2d) 190642, an association’s breach of fiduciary duties to
its individual property owners “can constitute a sufficient basis to prevent a [bulk] sale.” However,
the court rejected defendant’s various arguments concerning plaintiff’s breaches of fiduciary duty.
Defendant had first argued that plaintiff breached its fiduciary duties when prematurely adjourning
the March 2017 meeting once it became clear that the sale contract would not be approved by the
requisite number of votes. However, the court noted that defendant failed to show that plaintiff
had a duty to continue with the meeting after it became clear that the requisite number of affirming
votes would not be cast.
¶ 13 Defendant had also argued that plaintiff “breached a duty by drafting a contract favorable
to the anticipated bulk sale purchaser, Boulder Hill, LLC.” However, in contrast to defendant’s
allegations, the court found that “the anticipated purchaser drafted the agreement, not ***
[p]laintiff, and that contract was merely presented to the [unit] owners for approval or rejection.”
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Nonetheless, while defendant argued that the price of the contract was unfavorable to unit owners,
section 15 of the Act provided “a means and a method to challenge the proposed purchase price,”
in which unit owners could complete an appraisal process to prevent the sale of a unit below market
price. Because defendant had not completed this process, there was no evidence suggesting that
the purchase price offered in the contract was unfavorable to defendant. While defendant further
argued that “[p]laintiff’s appraisal methodology was unfavorable to [d]efendant,” defendant’s
refusal to obtain an appraisal resulted in a lack of “counter-evidence” in the record “to demonstrate
[p]laintiff’s methodology was unfair or prejudicial.” Therefore, the court found no issue of material
fact concerning the sale contract’s price or plaintiff’s appraisal methodology.
¶ 14 The court next disagreed with defendant’s argument that “[p]laintiff breached a fiduciary
duty simply by asking [d]efendant to authorize [p]laintiff to obtain a mortgage payoff letter on
[d]efendant’s behalf as part of the *** [s]ale.” To this end, the court noted that defendant had not
actually alleged “any impropriety on [plaintiff’s] part or any corresponding detriment to
[d]efendant.” In sum, the court ruled that, “[i]n the absence of a demonstrated detrimental impact,”
it would not “presume [p]laintiff breached a duty that hasn’t been shown to exist in the first place.”
¶ 15 Defendant had also asserted that plaintiff breached a fiduciary duty by demanding
“[d]efendant sign a proposed warranty deed in lieu of a quit-claim deed.” The court found this
argument forfeited, however, as defendant did not support his contentions by citing to pertinent
authority. Moreover, the court found the argument to be moot, as “[p]laintiff’s counsel[] recently
affirmed acquiescence at oral argument that [p]laintiff now intends to ask only for a quit-claim
deed.”
¶ 16 Lastly, the court discussed defendant’s various arguments that, given the “family
relationships and essentially non-arm’s lengths connections” between the Association and the
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presumptive purchaser, “the transaction [was] presumptively fraudulent.” Although the court
agreed with the “black letter law” providing that “a presumption of fraud arises when a fiduciary
benefits from a transaction involving the principal and that a fiduciary is prohibited from seeking
a selfish benefit because of the relationship,” it found no breach worthy of preventing the bulk
sale, as defendant failed to allege “any detriment other than his dissatisfaction with the outcome
of the vote to compel the sale of his property.” The court thus granted plaintiff’s motion for partial
summary judgment. Defendant timely appeals.
¶ 17 II. ANALYSIS
¶ 18 On appeal, defendant contends that the trial court erred in finding that plaintiff was entitled
to partial summary judgment as a matter of law, where the record shows that plaintiff breached
several fiduciary duties purportedly owed to defendant in several ways, by: (1) adjourning a certain
March 2017 meeting before voting on the proposed sale had been completed; (2) negotiating the
terms of the sale contract despite a “conflict of interest;” (3) and “insisting on negotiating for a
short sale” for defendant’s unit, “rather than paying the existing mortgage in full.” Additionally,
defendant argues that the court erred in finding that its arguments concerning his outstanding
mortgage and the quit claim deed were moot. We address these arguments in turn.2
2 Defendant also makes two separate arguments that are not specifically identified above.
First, defendant confusingly argues that “[t]he mere fact that Ruben Ybarra is not technically an
owner of the Ybarra Entities, [sic] does not absolve him or the Association of their fiduciary duties
owed to [defendant],” despite the fact that the trial court never found otherwise. In fact, while
referencing Kai, the trial court implicitly agreed with defendant that the Association, including
Ybarra, did owe defendant a fiduciary duty. Indeed, plaintiff concedes as much on appeal.
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¶ 19 “Summary judgment ‘shall be rendered without delay if the pleadings, depositions, and
admissions on file, together with the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to judgment as a matter of law.’ ” Peregrine
Financial Group, Inc. v. TradeMaven, L.L.C., 391 Ill. App. 3d 309, 312 (2009) (quoting 735 ILCS
5/2-1005(c) (West 2006)). “In deciding a summary judgment motion, the court must construe the
pleadings, affidavits, depositions and admissions on file strictly against the moving party and
liberally in favor of the opponent.” Id. “A triable issue precluding summary judgment exists where
the material facts are disputed or where, the material facts being undisputed, reasonable persons
might draw different inferences from the undisputed facts.” Id. “Appellate review of an order
granting partial summary judgment is de novo.” Id.
¶ 20 A. March 2017 Meeting
¶ 21 First, we examine defendant’s argument that plaintiff breached its fiduciary duties when
it adjourned the March 2017 meeting prematurely. Pursuant to section 15 of the Act:
Accordingly, because no dispute exists as to this point, we do not address it. While defendant, in
his reply brief, additionally argues that Boulder Hill Apartments, LLC, the party seeking to
purchase the units, also held fiduciary duties towards defendant, this argument is forfeited as it
was not raised in defendant’s opening brief. Ill. S. Ct. R. 341(h)(7) (eff. Oct. 1., 2020). In either
event, Boulder Hill Apartments, LLC, is not a party to this case.
Defendant also generally argues that the trial court erred in “its application of the
presumption of fraud,” without referencing any one specific finding that the court reached. For
the sake of clarity, we shall address this argument not in isolation, but as it relates to defendant’s
specific fiduciary duty claims.
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“(a) Unless a greater percentage is provided for in the declaration or bylaws, * * *
not less than 75% where the property contains 4 or more units may, by affirmative vote at
a meeting of unit owners duly called for such purpose, elect to sell the property. Such action
shall be binding upon all unit owners, and it shall thereupon become the duty of every unit
owner to execute and deliver such instruments and to perform all acts as in manner and
form may be necessary to effect such sale, provided, however, that any unit owner who did
not vote in favor of such action and who has filed written objection thereto with the
manager or board of managers within 20 days after the date of the meeting at which such
sale was approved shall be entitled to receive from the proceeds of such sale an amount
equivalent to the greater of: (i) the value of his or her interest, as determined by a fair
appraisal, less the amount of any unpaid assessments or charges due and owing from such
unit owner or (ii) the outstanding balance of any bona fide debt secured by the objecting
unit owner's interest which was incurred by such unit owner in connection with the
acquisition or refinance of the unit owner's interest, less the amount of any unpaid
assessments or charges due and owing from such unit owner. The objecting unit owner is
also entitled to receive from the proceeds of a sale under this Section reimbursement for
reasonable relocation costs * * *.
(b) If there is a disagreement as to the value of the interest of a unit owner who did not
vote in favor of the sale of the property, that unit owner shall have a right to designate an
expert in appraisal or property valuation to represent him, in which case, the prospective
purchaser of the property shall designate an expert in appraisal or property valuation to
represent him, and both of these experts shall mutually designate a third expert in
appraisal or property valuation. The 3 experts shall constitute a panel to determine by
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vote of at least 2 of the members of the panel, the value of that unit owner's interest in the
property.” 765 ILCS 605/15 (West 2018).
In short, “[u]nder section 15 of the Act, if a sufficient majority of the unit owners in an association
votes in favor of a bulk sale of all of the units, the majority may force such a sale.” Kai, 2020 IL
App (2d) 190642, ¶ 6. Any minority owners are entitled to the value of their interests in the
property, with the caveat that they must sell their units as provided in the bulk sale contract. Id.
¶ 22 Furthermore, we have found that condominium associations owe fiduciary duties to their
unit owners, and that those duties “appl[y] to the bulk sale of condominiums under section 15.”
Id. ¶ 19. “Thus, each board member here has strict duties to treat the unit owners ‘with the utmost
candor, rectitude, care, loyalty, and good faith—in fact to treat [them] as well as [he] would treat
himself.’ ” Boucher v. 111 East Chestnut Condominium Ass'n, 2018 IL App (1st) 162233, ¶ 36
(quoting Burdett v. Miller, 957 F.2d 1375, 1381 (7th Cir. 1992)). Where an association breaches
its fiduciary duties in promulgating a section 15 sale, the sale may be set aside. See Kai, 2020 IL
App (2d) 190642, ¶ 35 (“Recission [of a section 15 sale] is merely one of a number of equitable
remedies that might be available when a fiduciary duty is breached”).
¶ 23 Relying on Kai, defendant argues that plaintiff breached its fiduciary duty when it
adjourned the March 2017 meeting prematurely. Specifically, according to defendant:
“In Kai ***, the Appellate Court noted that the meeting to vote on the Section 15
sale was controlled by the Defendant Board Members, and that the meeting [there] ‘was
adjourned immediately after being called to order, when the Defendant Board Members
realized that the sale did not have the support of 75% of the unit owners.’ ” (citing Kai,
2020 IL App (2d) 190642, ¶ 9).
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Thus, defendant reasons, because the court deciding Kai ultimately found that the trial court there
had erred in dismissing the plaintiffs’ claim of a breach of fiduciary duty, the court here similarly
erred in ruling that defendant failed to show a breach of its fiduciary duties when adjourning the
March 2017 meeting. We disagree.
¶ 24 It is true that the defendants comprising the condominium association in Kai did
prematurely adjourn one meeting concerning the proposed sale. There, we found:
“The July 9 meetings [pertaining to the proposed bulk sale], which were controlled
by the Defendant Board Members, were cursory. For example, the meeting for building 1
was adjourned immediately after being called to order, when the Defendant Board
Members realized that the sale did not have the support of 75% of the unit owners. The
board refused to allow any discussion of the proposed sale, hold an actual vote, or allow a
non-MSH board member to videotape the meeting.” Kai, 2020 IL App (2d) 190642, ¶ 9.
However, we did not state that the defendants breached a fiduciary duty solely by adjourning the
meeting early. In fact, we made no mention of the meeting when ruling that the trial court erred in
dismissing the plaintiffs’ claims of a breach of fiduciary duty:
“Here, the complaint alleged more than mere self-interested behavior. The plaintiffs
alleged that the dual interests of the Defendant Board Members in both the majority unit
owner *** and the buyer *** created a conflict of interest and led them to breach their
fiduciary duties toward other unit owners. The complaint further alleged that the defendants
used their control of the Defendant Boards to effectuate bulk sales to a buyer that they also
controlled, on terms that disadvantaged the plaintiffs in favor of the defendants. We have
no difficulty in concluding that, if proven, these allegations could amount to a breach of
the defendants' fiduciary duties.” Id. ¶ 26.
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Accordingly, despite defendant’s contentions to the contrary, Kai does not stand for the proposition
that a condominium association has a duty to complete a vote as to a section 15 bulk sale, even
where it has become obvious that such a proposal will not pass. Instead, Kai stands for the much
more general proposition that associations have “strict duties to treat the unit owners ‘with the
utmost candor, rectitude, care, loyalty, and good faith—in fact to treat [them] as well as [an
association member] would treat himself,’ ” and that those duties apply to the promulgation of any
section 15 sales. Id. ¶ 25 (quoting Boucher, 2018 IL App (1st) 162233, ¶ 36). Thus, it is not enough
for defendant here to simply point to Kai and assert that here, as in that case, plaintiff adjourned
the section 15 meeting before collecting every vote. Instead, to properly argue that plaintiff
breached a fiduciary duty by adjourning the meeting, defendant needed to show how prematurely
ending the meeting resulted in the type of unfairness or lack of candor prohibited by Kai. Id.
¶ 25 Defendant has not carried that burden. In his briefs, defendant asserts that, because plaintiff
adjourned the meeting early, Ruben allowed himself time to negotiate with other unit owners to
help pass the bulk sale. However, defendant offers no convincing explanation as to how it was
improper or unfair for Ruben to have subsequently negotiated with the unit owners. For this reason,
defendant has shown no unfairness resulting from the adjournment of the March 2017 meeting so
as to support his claim that plaintiff breached its fiduciary duties when it ended the meeting early.
¶ 26 Defendant also argues that adjourning the meeting early unfairly deprived the unit owners
an opportunity to “ask questions and discuss options” concerning the sale. However, defendant
overlooks the fact that the unit owners did have such an opportunity at the subsequent section 15
meeting, in which the vote ultimately passed. Defendant finally asserts that, had plaintiff held the
full March 2017 vote, the prospective buyer would have been put on notice that the terms of the
sale were unattractive to the Association, leading it to raise the sale price as a response. This highly
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speculative argument makes little sense. Regardless of the duration of the March 2017 meeting, it
was clear that the measure to approve the sale did not pass muster. Thus, regardless of when the
meeting ended, the prospective buyer’s motivation to raise the sale price, by defendant’s logic,
remained the same. For all of these reasons, defendant has shown no unfairness or prejudice
resulting from plaintiff’s early adjournment of the March 2017 meeting. Accordingly, the trial
court did not err when it found that defendant failed to show that the association breached a
fiduciary duty by adjourning the March 2017 meeting early.
¶ 27 B. Creating the Sales Contract
¶ 28 Next, we consider defendant’s arguments that the trial court improperly granted plaintiff’s
motion for partial summary judgment because a question remained as to whether plaintiff’s breach
of fiduciary duty precluded the sale. “To state a claim for breach of fiduciary, a [party] must allege
the existence of a fiduciary duty, the breach of that duty, and damages proximately caused
therefrom.” Duffy v. Orlan Brook Condominium Owners Ass’n, 2012 IL App (1st) 113577, ¶ 17.
Once more, condominium associations and the board members owe fiduciary duties to their
individual unit owners. Id. ¶ 18. “Therefore, the condominium association and its board members
are required to ‘act in a manner reasonably related to the exercise of that duty and the failure to do
so results in liability for the board and its individual members.’ ” Id.
¶ 29 Our supreme court has found that, where the principal in a fiduciary relationship benefits
from that relationship, a presumption of undue influence arises, “since the dominant party had
enjoyed a benefit due to his fiduciary status.” Franciscan Sisters Health Care Corp. v. Dean, 95
Ill. 2d 452 (1983) (citing Rizzo v. Rizzo, 3 Ill. 2d 291 (1954)). In such a situation, “the beneficiary
must produce clear and convincing evidence in order to rebut that presumption.” Id.
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¶ 30 Here, defendant argues that, by negotiating the terms of the sale agreement, determining
its price terms, and preparing the agreement, all despite the “conflict of interest of Ruben
controlling both the buyer and the seller,” plaintiff breached its fiduciary duties. Specifically, citing
Kai, defendant suggests that Ruben, both through the Association and Yolanda’s company, created
a contract that was “inherently fraudulent” because its terms “were the product of self-dealing.”
Pointing to testimony in which Ruben seemingly admits to having “come up with a purchase
price,” defendant essentially argues that Ruben prepared a sales contract that benefitted the
purchaser—thereby benefiting his wife and himself—to the detriment of the unit owners, thus
creating a presumption of fraud that plaintiff failed to rebut.
¶ 31 Plaintiff, on the other hand, argues that no presumption of fraud exists with respect to the
section 15 sale, because Ruben and the purchaser—Boulder Hill Apartments, LLC—are separate
entities. To this point, plaintiff argues that it is not even a party to the “transaction between
[d]efendant and Boulder Hill Apartments, LLC.” Plaintiff further argues that there can be no
presumption of fraud here because “the record is completely devoid of any evidence that [Ruben]
was in a position of ‘undue influence’ with respect to [d]efendant.” Similarly, plaintiff argues that
“[t]he record is devoid” of any evidence that Ruben benefitted from the proposed section 15 sale,
further precluding the presumption that the sale was fraudulent. Finally, plaintiff argues that, even
if a presumption of fraud did arise, the Association has rebutted it, as defendant had the ability to
vote against the sale, submit a written objection, and retain counsel to guide him through the sale
process. Moreover, plaintiff argues that it never hid from defendant Ruben’s status as an agent of
Boulder Hill Apartments, LLC, exemplifying how plaintiff had at all times been transparent with
defendant.
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¶ 32 Here, because defendant sufficiently alleged that plaintiff breached its fiduciary duties,
plaintiff needed to show that the transaction was fair in order to rebut defendant’s claims. Id.
However, because plaintiff did not make such a demonstration after the trial court effectively
flipped this burden, it failed to show that it was entitled to summary judgment as a matter of law.
Thus, the trial court erred when granting summary judgment in plaintiff’s favor.
¶ 33 In his response to plaintiff’s motion for partial summary judgment, defendant argued that
Boulder Hills Apartments, LLC, purchased a majority of the Association’s units before appointing
Ruben as its agent to serve on the Association as majority unit owner. From there, while
representing both the Association as majority unit owner and the proposed purchaser, Ruben
found himself on both sides of the proposed section 15 sale. Plaintiff admits that Ruben did “assist
with establishing a sales price for the Sales Contract.” Defendant, citing Ruben’s deposition,
presented evidence that some units had sold in 2017 for a much higher price than reflected in
Ruben’s price determination. From these record facts, defendant outlined a scenario in which the
purchaser—which, again, was owned by Yolanda and had appointed Ruben onto the plaintiff
board—could maximize their profits by paying the unit owners an unfairly low price. While
plaintiff argues that Ruben merely came up with the sales price as “an agent of Boulder Hill
Apartments, LLC,” and “not in his capacity as Association Board President,” a fiduciary cannot
simply change hats in order to engage in self-dealing while preserving his fiduciary duties. Simply
put, this is the exact type of behavior we cautioned against in Kai:
“When there is no self-dealing involved, the majority owners and minority owners will
have the same interest—maximizing the price they will receive for their units—and
majority owners can be expected to refuse to agree to any price that is significantly lower
than the fair value of their units. In these circumstances, the market functions as it should
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to set the appropriate price, and the buyer must be given a voice to protect its interests in
that process. When the majority owners and the buyer both seek a lower sale price,
however, the market is distorted. And when the minority owners cannot refuse to sell (as
ordinarily the case in a bulk sale under section 15), that distortion can result in substantial
unfairness. In these circumstances, the availability of a cause of action for breach of
fiduciary duty is especially important.” (Emphasis added.) 2020 IL App (2d) 190642, ¶ 22.
Thus, having cited to the record to allege that the Association—through Ruben—engaged in self-
dealing, it became plaintiff’s burden to rebut the presumption of unfairness. Franciscan Sisters,
95 Ill. 2d at 464. However, the trial court effectively reversed this burden, finding that defendant
needed to obtain an appraisal in order to show that the proposed sale price was unfair. This was
error, and we therefore vacate the trial court’s grant of partial summary judgment.
¶ 34 Plaintiff’s argument that it cannot have breached a fiduciary duty because it and the
purchaser are separate entities is specious. Although the record does not show that Ruben had any
individual ownership interest in YRY Holdings, LLC, or Boulder Hill Apartments, LLC, it is
beyond dispute that his wife, Yolanda, does have an ownership interest in these entities. Plainly
then, any transaction that benefitted Yolanda would also benefit Ruben’s family unit. See In re
Estate of Burren, 2013 IL App (1st) 120996, ¶ 21 (fiduciary received benefit when agent listed
fiduciary’s children as beneficiaries in will).
¶ 35 We also reject plaintiff’s arguments that it could not have breached any fiduciary duty
because it did not hold a position of undue influence over defendant. Plaintiff reasons that its
actions cannot constitute a breach of its fiduciary duties unless it is otherwise shown that plaintiff
exerted “undue influence” over defendant. However, plaintiff is mistaken. A “presumption of fraud
or undue influence arises from the confidential relationship where the dominant party has enjoyed
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a benefit by virtue of his fiduciary status, and the burden is upon the party who has so benefited to
rebut the presumption by clear and convincing proof that he has exercised good faith.” Rizzo, 3 Ill.
2d at 305. Accordingly, once defendant cited record evidence to allege that plaintiff had engaged
in self-dealing, it was not defendant’s burden to show undue influence, but plaintiff’s burden to
disprove it. Plaintiff did not provide any convincing evidence to dispute defendant’s argument.
Because it was plaintiff’s burden to show that it had acted honestly and fairly and it did not do so,
defendant’s allegations stood uncontroverted, meaning that plaintiff had failed to show that it was
entitled to summary judgment as a matter of law.
¶ 36 Nonetheless, plaintiff argues that it rebutted any presumption of fraud so as to be entitled
to partial summary judgment. We disagree. “Once the petitioner has shown that a fiduciary
relationship exists, the presumption is that a transaction between the dominant and servient parties
which profits the dominant party is fraudulent.” Lemp v. Hauptmann, 170 Ill. App. 3d 753, 757
(1988). “The dominant party then has the burden of proving by clear and convincing evidence that
the transaction was fair and equitable, and did not result from his undue influence over the servient
party.” Id.
“Factors significant in determining whether a particular transaction between parties
standing in a fiduciary relation is fair include a showing that the fiduciary has made a
frank disclosure of all relevant information which he had, that the consideration was
adequate, and that the other party had competent and independent advice before
completing the transaction.” Rizzo, 3 Ill. 2d at 305.
¶ 37 According to plaintiff, it overcame any presumption of fraud because:
“Defendant voted ‘no’ on the sale, submitted a written objection, retained counsel to guide
him through the Section 15 Sale process, and to this day refuses to convey his unit.
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Moreover, [d]efendant was aware of the fact that [Ruben] was an agent of Boulder Hill
Apartments, LLC[,] from the very onset of [Ruben’s] presence at the Association.”
Essentially, plaintiff takes the risible position that defendant’s actions in hampering the section 15
sale evinces the sale’s fairness. Indeed, by plaintiff’s backwards logic, hiring an attorney to bring
a claim of a breach of a fiduciary duty would actually serve as evidence of the fiduciary’s loyalty.
Furthermore, even if defendant were aware of Ruben’s involvement with both the Association and
Boulder Hill Apartments, LLC, this knowledge in and of itself would not establish that the sale
was fair if defendant did not consent to Ruben’s dual role. See In re Estate of Halas, 209 Ill. App.
3d 333, 344 (1991) (a fiduciary can lawfully occupy “conflicting positions” where the agent
knowingly consents). Accordingly, plaintiff has not rebutted the presumption of fraud arising from
the sale, meaning it did not show that it was entitled to summary judgment as a matter of law. For
this reason, the trial court wrongfully granted partial summary judgment in plaintiff’s favor.
¶ 38 C. Mortgage and Deed
¶ 39 Finally, because defendant’s arguments concerning his mortgage and deed are considered
under a similar analysis, we address both arguments together.
“[A]n appellant has the burden to present a sufficiently complete record of the proceedings
at trial to support a claim of error, and in the absence of such a record on appeal, it will be
presumed that the order entered by the trial court was in conformity with law and had a
sufficient factual basis. Any doubts which may arise from the incompleteness of the record
will be resolved against the appellant.” Foutch v. O'Bryant, 99 Ill. 2d 389, 391-92 (1984).
¶ 40 Here, defendant argues that the trial court erred when it found his arguments concerning
his unpaid mortgage balance and the execution of a quitclaim deed to be moot. However, while
defendant notes that the trial court reached these decisions due to certain statements that plaintiff
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made during oral arguments, he has not provided us with any transcripts of the arguments.
Accordingly, because the record is lacking, we presume the court followed the facts and law. Id. 3
¶ 41 III. CONCLUSION
¶ 42 For the foregoing reasons, we vacate the trial court’s grant of partial summary judgment,
and remand for further proceedings consistent with this decision.,
¶ 43 Vacated and remanded.
3 Defendant also argues that, by forcing him to negotiate for a short sale instead of paying
his mortgage in full, plaintiff has once again breached a fiduciary duty owed to defendant.
However, again, by failing to provide us with a complete record, we presume the trial court did
not err in finding the issue to be moot.
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