Cardinal Fitness of Peoria, LLC v. Anne Larson Real Estate, LLC

2020 IL App (1st) 191034-U

• Court: Appellate Court of Illinois
• Decided: February 14, 2020
• Docket: 1-19-1034
• Status: Unpublished

Opinion

2020 IL App (1st) 191034-U Order filed: February 14, 2020

FIRST DISTRICT Fifth Division

No. 1-19-1034

NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1). ______________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT ______________________________________________________________________________

CARDINAL FITNESS OF PEORIA, LLC, an Illinois ) ) limited liability company, now known as Charter Fitness of Peoria, LLC ) ) Plaintiff, ) ) v. ) ) ANNE LARSON REAL ESTATE, LLC, SERIES 4314 ) SHERIDAN ROAD, an Illinois limited liability company, ) and LARSON REAL ESTATE, LLC, SERIES 4314 ) Appeal from the SHERIDAN ROAD, LLC, an Illinois limited liability ) Circuit Court of company, ) Cook County. ) Defendants. ) ______________________________________________ ) Nos. 2016 L 8603 and ) 2017 CH 1952 ANNE LARSON REAL ESTATE, LLC SERIES 4314 ) (consolidated) SHERIDAN ROAD, an Illinois limited liability company; ) LARSON REAL ESTATE, LLC, SERIES 4314 ) SHERIDAN ROAD, LLC, an Illinois limited liability ) Honorable company; ANNE LARSON REAL ESTATE, LLC, ) Brigid Mary McGrath, GINGER CREEK SERIES, an Illinois limited liability ) Judge, presiding. company; and LARSON REAL ESTATE, LLC, GINGER ) CREEK SERIES, an Illinois limited liability company, ) ) Plaintiffs-Appellees, ) ) v. ) ) PETER J. VRDOLYAK, III, ) ) Defendant-Appellant. ) ) No. 1-19-1034

______________________________________________________________________________

JUSTICE ROCHFORD delivered the judgment of the court. Presiding Justice Hoffman and Justice Delort concurred in the judgment.

ORDER

¶1 Held: We affirm the order granting partial summary judgment and entering a monetary judgment in favor of plaintiffs, where defendant failed to demonstrate the existence of a genuine issue of material fact, and the monetary judgment awarding plaintiffs partial relief did not bar remaining claims for relief under the doctrine of res judicata.

¶2 Defendant-appellant, Peter J. Vrdolyak, III (defendant), appeals from an order granting

partial summary judgment and entering a monetary judgment against him. For the following

reasons, we affirm. 1

¶3 I. BACKGROUND

¶4 In July 2016, plaintiff, Cardinal Fitness of Peoria, LLC, an Illinois limited liability

company, now known as Charter Fitness of Peoria, LLC (CFP), filed a complaint in the law

division of the Circuit Court of Cook County (case No. 2016 L 8603) against defendants, Anne

Larson Real Estate, LLC, Series 4314 Sheridan Road, an Illinois limited liability company, and

Larson Real Estate, LLC, Series 4314 Sheridan Road, LLC, an Illinois limited liability company

(Sheridan Road defendants). Therein, CFP generally alleged that in December 2006 it had leased

property from the Sheridan Road defendants in Peoria, Illinois, for the purpose of operating a

fitness center. After alleging that the Sheridan Road defendants had improperly raised the rent and

otherwise failed to fulfill other obligations under the lease—causing CFP to cease operations and

vacate the premises in April 2016—CFP’s complaint asked for a declaratory judgment as to the

1 In adherence with the requirements of Illinois Supreme Court Rule 352(a) (eff. July 1, 2018), this appeal has been resolved without oral argument upon the entry of a separate written order stating with specificity why no substantial question is presented.

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amounts due and owing between the parties under the lease, and also sought damages for breach

of contract.

¶5 Thereafter, in February 2017, a separate lawsuit was filed against defendant in the chancery

division (2017 CH 1952) by plaintiffs-appellees, a group of entities including the Sheridan Road

defendants (hereafter referred to as the Sheridan Road plaintiffs with respect to the chancery

complaint) as well as Anne Larson Real Estate, LLC, Ginger Creek Series, an Illinois limited

liability company, and Larson Real Estate, LLC, Ginger Creek Series, an Illinois limited liability

company (Ginger Creek plaintiffs). These two lawsuits were consolidated in the circuit court on

August 15, 2017.

¶6 On October 27, 2017, the operative first amended verified complaint was filed by plaintiffs

in the chancery action. That complaint alleged that in December 2006, CFP leased property from

the Sheridan Road plaintiffs in Peoria, Illinois, for the purpose of operating a fitness center.

However, the chancery complaint alleged that it was actually CFP that breached its contractual

duties under the 10-year lease, ultimately vacating the Peoria property prior to the lease expiration.

The complaint further alleged that defendant was the manager of NEV Management, LLC, which

“manages or managed CFP,” and that defendant had executed a written guaranty with respect to

CFP’s obligations under the lease, as an inducement to the Sheridan Road plaintiffs to lease the

Peoria property to CFP. Counts I and II of the complaint sought to recover from defendant for

damages resulting from CFP’s breach of the lease under, respectively, theories of breach of the

written guaranty and promissory estoppel.

¶7 The complaint contained similar contentions with respect to another lease between the

Ginger Creek plaintiffs and Charter Fitness of Springfield Peoria, LLC (CFS). Specifically, the

complaint asserted that in December 2006, CFS leased property from the Ginger Creek plaintiffs

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in Springfield, Illinois, for the purpose of operating a fitness center. CFS allegedly breached its

contractual duties under the 10-year lease by failing to pay required rents, late fees and interest

charges. Once again, the complaint alleged that defendant, the manager of NEV Management,

LLC, which also “manages or managed *** CFS,” had executed a written guaranty with respect

to CFS’s obligations under the lease, as an inducement to the Ginger Creek plaintiffs to lease the

Springfield property to CFS.

¶8 However, the complaint also alleged that the Ginger Creek plaintiffs had previously

obtained a judgment against CFS in Sangamon County, Illinois, for unpaid rent and expenses

incurred through September 24, 2015, as well as for attorney fees. That judgement explicitly did

not bar the Ginger Creek plaintiffs from asserting any claim for damages incurred after September

24, 2015. Finally, the complaint alleged that $210,050.80 of the judgment remained outstanding,

and that efforts to collect from CFS had proven unsuccessful. Thus, Counts III and IV of the

complaint sought to recover from defendant for all damages resulting from CFS’s breach of the

lease, including the outstanding $210,050.80 judgment previously entered against CFS, under

theories of breach of the written guaranty and promissory estoppel.

¶9 Defendant responded by filing an answer and affirmative defenses, as well as a

counterclaim. The circuit court ultimately dismissed the counterclaim, as well as those affirmative

defenses related to the written guaranty, making the order final and appealable pursuant the Illinois

Supreme Court Rule 304(a) (eff. March 8, 2016). Defendant filed a prior appeal from that order

(No. 1-18-1848), but this court dismissed that appeal for want of prosecution.

¶ 10 Meanwhile, plaintiffs filed a motion for partial summary judgment on count III of the

complaint, in which plaintiffs contended that because a judgment had already been entered against

CFS for some of the damages resulting from the breach of the lease of the Springfield property,

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and because the circuit had dismissed all of defendant’s defenses with respect to the written

guaranty, plaintiffs were entitled to partial summary judgment in their favor in the amount of the

outstanding balance of that judgment. Specifically, plaintiffs asked the circuit court to:

“(1) grant summary judgment against the Defendant for Count III of Plaintiffs’ First

Amended Complaint; (2) enter judgment for $210,050.80 in favor of Plaintiffs against

Defendant; (3) hold that entry of this judgment shall not bar any claim by Plaintiffs for rent

and expenses accruing after September 24, 2015; (4) find that the Order granting Plaintiffs

partial summary judgment is a final and appealable order pursuant to Rule 304(a), and that

there is no just reason for delaying either enforcement or appeal or both; and (5) grant such

other and further relief as may be just and fair under the circumstances.”

¶ 11 After the motion for partial summary judgment was fully briefed, defendant was granted

leave to file a supplemental response raising a new issue. Specifically, defendant asserted that a

release contained in a 2010 operating agreement released him of any obligations under the written

guaranty. The operating agreement involved an entity named Charter Holdings I, LLC (Charter

Holdings), of which CFS was purportedly a subsidiary, and was executed by defendant as the

initial member and only voting member of Charter Holdings. It was also executed by Doug Larson

as a non-voting member of Charter Holdings. The release contained in the operating agreement

provided that non-voting members such as Mr. Larson, as well as the “Affiliates” of such members,

released and discharged defendant from—inter alia—all claims, demands, actions, causes of

action, and oral or written agreements.

¶ 12 The supplemental response asserted—“on information and belief”—that Mr. Larson was

the only manager of, a member of, and the owner of more than a 50% interest in and holder of

more than 50% of the voting rights in the Ginger Creek plaintiffs. Because the release in the

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operating agreement applied to Mr. Larson and his “Affiliates,” defined as those entities with

respect to which Mr. Larson had the “right to exercise, directly or indirectly, more than 50% of the

voting rights,” defendant contended he was released of any obligations under the written guaranty.

None of the documents attached to the supplemental response, including the operating agreement

itself, were supported by other evidence or affidavits as to the documents’ authenticity or as to the

foundational requirements for their admission into evidence.

¶ 13 Plaintiff filed a written response, and the circuit court took the matter under advisement.

On January 8, 2019, the circuit court entered a written order providing, in pertinent part:

“Plaintiffs’ Motion [for Partial Summary Judgment] is granted. There is no genuine

issue of material fact regarding whether the Release contained in Charter Fitness Holdings,

I Operating Agreement does not release claims against the Defendant pursuant to the

Guaranty he executed *** four years prior to the date the parties executed the Release. If

the claims were contemplated by the parties at the time of the Release, the Release would

have so stated.”

¶ 14 Plaintiffs filed a motion seeking an amended order, contending that the written order

entered by the court did not fully entail the actual relief granted by the court. Over defendant’s

objection, on April 18, 2019, the circuit court entered an order providing, in pertinent part:

“Plaintiffs’ Motion is granted. The Court finds there is no genuine issue of material

fact regarding whether the Release contained in the 2010 Amended and Restated Operating

Agreement of Charter Fitness Holding I, LLC (the “Release”) does not release claims

against the Defendant pursuant to the Guaranty he executed on December 6, 2006, four

years prior to the date the parties executed the Release. The Court further finds, if the

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parties had contemplated the claims at issue in Plaintiffs’ Motion, the Release would have

so stated. Therefore,

i) Judgment is entered for $210,050.80 in favor of Plaintiffs Ann Larson Real

Estate, LLC, Ginger Creek series and Larson Real Estate, LLC, Ginger Creek

Series against Peter J. Vrdolyak, III;

ii) Entry of this judgment shall not bar any claim by Plaintiffs for rent and expenses

accruing after September 24, 2015;

iii) The Order granting Plaintiffs partial summary judgment is a final and

appealable order pursuant to Rule 304(a), and that there is no just reason for

delaying either enforcement for appeal or both.”

¶ 15 Defendant filed a timely appeal from this order.

¶ 16 II. ANALYSIS

¶ 17 On appeal, the parties first raise a number of arguments with respect to whether the circuit

court properly granted partial summary judgment in favor of the Ginger Creek plaintiffs. We need

not address each of these arguments, as we find a single issue dispositive.

¶ 18 Summary judgment is properly granted where the pleadings, depositions, and admissions

on file, together with any affidavits, indicate there is no genuine issue of material fact and the

moving party is entitled to judgment as a matter of law. 735 ILCS 5/2–1005(c) (West 2018).

Although a drastic means of disposing of litigation, summary judgment is, nonetheless, an

appropriate measure to expeditiously dispose of a suit when the moving party's right to the

judgment is clear and free from doubt. Gaston v. City of Danville, 393 Ill. App. 3d 591, 601 (2009).

We review the grant of summary judgment de novo, and may affirm on any basis found in the

record. Rosestone Investments, LLC v. Garner, 2013 IL App (1st) 123422, ¶ 23.

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¶ 19 Here, defendant’s sole argument with respect to the propriety of the circuit court’s award

of partial summary judgment in favor of the Ginger Creek plaintiffs is that the release contained

in the 2010 operating agreement released him of his obligations under the written guaranty. As

defendant himself concedes, however, the release in the operating agreement—which was signed

by Mr. Larson—could only have also applied to the claims of the Ginger Greek plaintiffs if Mr.

Larson had the “right to exercise, directly or indirectly, more than 50% of the voting rights” of

those entities, such that they qualified as an “Affiliate” of Mr. Larson.

¶ 20 As an initial matter, we reiterate that defendant did nothing to lay a proper foundation for

the introduction of the operating agreement into evidence, and as such he has no evidence in the

record to actually support this argument. See Cordeck Sales, Inc. v. Construction Systems, Inc., -

382 Ill. App. 3d 334, 384 (2008) (in ruling on a motion for summary judgment, a court can only

consider evidence that would be admissible at trial and a party must therefore lay the proper

foundation for the introduction of a document into evidence if it wishes to rely on the document in

summary judgment proceedings by way of affidavit or testimony).

¶ 21 That aside, the only effort defendant made to establish this fact was the assertion in his

supplemental response that Mr. Larson was the holder of more than 50% of the voting rights in the

Ginger Creek plaintiffs, an assertion made “on information and belief.” No affidavit or other

evidence was submitted by defendant to substantiate this specific assertion. It is well-established

that a “party defending against summary judgment is not entitled to rely on the allegations of her

pleading to raise a genuine issue of material fact.” CitiMortgage, Inc. v. Bukowski, 2015 IL App

(1st) 140780, ¶ 19. Moreover, even if this assertion had been made in an affidavit, it is also well-

recognized that, in the context of ruling on a motion for summary judgment, “[s]tatements in an

affidavit which are based on information and belief or which are unsupported conclusions,

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opinions, or speculation are insufficient to raise a genuine issue of material fact.” Outboard Marine

Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 132 (1992). As such, we must reject

defendant’s claim that he raised a genuine issue of material fact that precluded an award of partial

summary judgment in favor of the Ginger Creek plaintiffs.

¶ 22 Defendant’s next contends that it was improper for the circuit court to enter a final and

appealable monetary judgment in favor of the Ginger Creek plaintiffs for the outstanding amount

of the Sangamon County judgment, while also providing in its order that “[e]ntry of this judgment

shall not bar any claim by Plaintiffs for rent and expenses accruing after September 24, 2015.”

Plaintiff contends that the “trial court entered a final money judgment, as such any claims which

seek damages based upon the same alleged breach of the guaranty are bared by res judicata.”

¶ 23 “Under the doctrine of res judicata, a final judgment on the merits rendered by a court of

competent jurisdiction bars any subsequent actions between the same parties or their privies on the

same cause of action. [Citation.] Res judicata is an equitable doctrine that is designed to prevent a

multiplicity of lawsuits between the same parties where the facts and issues are the same.”

Piagentini v. Ford Motor Co., 387 Ill. App. 3d 887, 890 (2009). We fail to see how this doctrine

applies here, where the circuit court’s order did not purport to allow plaintiffs to pursue its

remaining claims in some future lawsuit. Rather, it is evident that the circuit court was merely

indicating that the award of partial summary judgment in this case on a portion of plaintiffs’ claims

did not act as a bar to the remainder of plaintiffs’ claims in this case. No possibility of a multiplicity

of lawsuits is at issue here.

¶ 24 We also note that the summary judgment provision of the Code of Civil Procedure itself

specifically provides that “a plaintiff may move with or without supporting affidavits for a

summary judgment in his or her favor for all or any part of the relief sought.” (Emphasis added.)

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735 ILCS 5/2-1005 (West 2018). The circuit court’s April 18, 2019, order is in full compliance

with this provision.

¶ 25 Finally, while defendant raises additional arguments in his reply brief with respect to this

issue, we find those arguments have been forfeited due to his failure to first raise them in his

opening brief. Ill. S. Ct. R. 341(h)(7) (eff. May 28, 2018) (“Points not argued [in the opening brief]

are forfeited and shall not be raised in the reply brief, in oral argument, or on petition for

rehearing.”).

¶ 26 III. CONCLUSION

¶ 27 For the foregoing reasons, we affirm the judgment of the circuit court.

¶ 28 Affirmed.

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