Damaschke v. Mick

2021 IL App (1st) 210101-U
Appellate Court of Illinois·Decided December 22, 2021·No. 1-21-0101·Unpublished

Opinion

2021 IL App (1st) 210101-U

THIRD DIVISION

December 22, 2021

No. 1-21-0101

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 JUDICIAL DISTRICT

DANIEL J. DAMASCHKE, Individually and on behalf of ) Illinois Hospitality Partners, LLC, an Illinois Corporation, ) Appeal from ) the Circuit Court

Plaintiff-Appellant-Cross-Appellee, ) of Cook County )

v. ) 2000-CH-005549 )

DONNA J. MICK, and Illinois Hospitality Partners, LLC, ) Honorable an Illinois Corporation, ) Caroline Kate Moreland, ) Judge Presiding

Defendants-Appellees-Cross-Appellants. )

JUSTICE McBRIDE delivered the judgment of the court.

Presiding Justice Gordon and Justice Burke concurred in the judgment.

ORDER

¶1 Held: Circuit court erred by not performing an analysis before granting defendant’s motion to dismiss plaintiff’s complaint on grounds that there was another action pending between the same parties for the same cause. Defendant’s cross-appeal arguing that forum non conveniens is an alternative basis for dismissing the complaint was rejected because the circuit court had not sufficiently analyzed this ground.

¶2 Daniel J. Damaschke’s complaint against his business partner, Donna J. Mick, in which he alleged she would neither help manage and fund their company, Illinois Hospitality Partners, LLC, (IHP) nor agree to sever their relationship, was dismissed by the circuit court of Cook County pursuant to section 2-619(a)(3) of the Code of Civil Procedure (735 ILCS 2-619(a)(3)

(West 2020)) (Code), because “there was an existing case [in Madison County, Illinois] between these parties relating to the same issues when this case was filed.” Damaschke argues that by denying Mick’s alternative dismissal argument of forum non conveniens, the court acknowledged that Damaschke’s suit has a legitimate and substantial connection to Cook County, which enhanced Mick’s burden to show facts justifying dismissal under section 2-619(a)(3), and that Mick failed to meet her burden. 735 ILCS 5/2-619(a)(3) (West 2020). Mick responds that dismissal was warranted because her Madison County pleading and the two affidavits she tendered were clear and convincing proof that both suits concern the same parties and the singular issue of her partner’s mismanagement of IHP. On cross-appeal, she contends that the circuit court should not have rejected her forum non conveniens argument because all of the relevant factors weigh in favor of transfer. Damaschke counters that her argument relies on unsupported conclusions rather than facts.

¶3 The dismissal order was entered on January 4, 2021. In the circuit court, Damaschke filed a notice of appeal 28 days later, on February 1, 2021, and Mick filed a notice of cross-appeal two days after that, on February 3, 2021. We have jurisdiction over the appeal and cross-appeal. See Ill. S. Ct. R. 301 (eff. Feb. 1, 1994); Ill. S. Ct. R. 303 (eff. Jan. 1, 2015).

¶4 Damaschke alleged the following in the eight-page, four-count complaint that he filed individually and on behalf of IHP against Mick and IHP on August 25, 2020. Damaschke and Mick are 50/50 partners who each contributed $60,000 to form IHP in 2019. IHP is in the business of operating five video gaming parlors in Illinois through five respective subsidiary corporations. None of the six limited liability companies has an operating agreement. The principal office of IHP and its five subsidiaries is located in Summit, Cook County, Illinois. The

registered agent of IHP and its five subsidiaries is located in Bridgeview, Cook County, Illinois. Four of the five gaming parlors are located in Cook County and the other one is located to the north, in Winnebago County, Illinois. Damaschke resides in Bridgeview, Cook County, Illinois. Mick resides to the south, in Edwardsville, Madison County, Illinois. IHP’s subsidiaries have not generated sufficient revenue to cover their expenses since 2019, Mick has not cooperated with Damaschke’s requests to manage and fund the business, and the partners have been unsuccessful in negotiating an end to their business relationship. Since 2019, Damaschke has lent more than $100,000 to the subsidiaries to meet business expenses and avoid defaulting on lease payments which he personally guaranteed. Consequently, he has agreed “to sell the assets of four of the IHP Subsidiaries for a cash payment.” (Damaschke did not disclose details about the asset sale, such as which four of the five subsidiaries it concerned, the buyer’s name, or the sales price.) Damaschke further alleged that Mick refuses to cooperate with the sale of assets for the benefit of IHP’s members. In Count I of his complaint, Damaschke seeks a declaratory judgment that Mick must cooperate as necessary to effectuate the asset sale. In Count II, Damaschke claims Mick’s conduct is in breach of her fiduciary duties, which entitles him to compensatory and punitive damages. In Count III, Damaschke seeks dissociation of Mick from IHP pursuant to the judicial authority granted by the Limited Liability Company Act. See 805 ILCS 180/35-45(6) (West 2020) (setting out three grounds for a member's expulsion by judicial determination). In the alternative, in Count IV, Damaschke seeks judicial dissolution of IHP and equitable winding up of its affairs. See 805 ILCS 180/35-1(A)(4)(c) (West 2020).

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