Eby-Brown Company, LLC v. IYS Ventures, LLC

2024 IL App (3d) 230300-U
CourtAppellate Court of Illinois
DecidedJune 24, 2024
Docket3-23-0300
StatusUnpublished

This text of 2024 IL App (3d) 230300-U (Eby-Brown Company, LLC v. IYS Ventures, LLC) 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
Eby-Brown Company, LLC v. IYS Ventures, LLC, 2024 IL App (3d) 230300-U (Ill. Ct. App. 2024).

Opinion

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).

2024 IL App (3d) 230300-U

Order filed June 24, 2024 _____________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

EBY-BROWN COMPANY, LLC, a ) Appeal from the Circuit Court Delaware Limited Liability Company, ) of the 18th Judicial Circuit, ) Du Page County, Illinois. Plaintiff-Appellee, ) ) v. ) ) IYS VENTURES, LLC, an Illinois ) Appeal No. 3-23-0300 Limited Liability Company, IMART ) Circuit No. 22-LA-217 STORES, LLC, a Minnesota Limited ) Liability Company, MUWAFAK S. ) RIZEK, and ISAM SAMARA, ) ) Defendants ) ) The Honorable (IMart Stores, LLC, and Isam Samara, ) David E. Schwartz, Defendants-Appellants). ) Judge, Presiding. _____________________________________________________________________________

JUSTICE PETERSON delivered the judgment of the court. Presiding Justice McDade and Justice Davenport concurred in the judgment. _____________________________________________________________________________

ORDER

¶1 Held: In an appeal in a civil case for breach of contract and other related causes of action pertaining to defendants’ alleged failure to pay for convenience store products that they had purchased wholesale from plaintiff to resell in their gas stations and convenience stores, the appellate court found that the sole remaining defendant on appeal failed to present a sufficient record to support his claims of error relating to the trial court’s entry of an order of default and a default judgment against him and its denial of his petition to vacate the order of default. The appellate court also found that the sole remaining defendant forfeited all but one of his claims of error on appeal as to the default judgment amount by failing to make those claims in the trial court and that the default judgment amount was properly entered. The appellate court, therefore, affirmed the trial court’s judgment.

¶2 Plaintiff, Eby-Brown Company, LLC, filed a civil lawsuit against defendants, IYS

Ventures, LLC (IYS), IMart Stores, LLC (IMart), Muwafak S. Rizek, and Isam Samara, for

breach of contract and other related causes of action pertaining to defendants’ alleged failure to

pay for convenience store products that they had purchased wholesale from plaintiff to resell in

their gas stations and convenience stores. During pretrial proceedings, the trial court entered an

order of default (default order) and a default judgment against defendants for repeatedly failing

to comply with the trial court’s orders, including the trial court’s discovery orders. Defendants

filed a petition to vacate, which the trial court denied as to the default order but granted as to the

default judgment. A second prove-up hearing was conducted, and the trial court entered a new

default judgment against the two defendants that had not filed for bankruptcy protection, IMart

and Samara. IMart and Samara appealed. After the appeal was filed, however, IMart filed for

bankruptcy protection as well and was subsequently dissolved as a limited liability company by

the federal bankruptcy court. For the reasons that follow, we affirm the trial court’s judgment as

to the sole remaining defendant on appeal, Samara.

¶3 I. BACKGROUND

¶4 Plaintiff was a wholesale distributor of convenience store products. Defendants, IYS and

IMart, were limited liability companies that owned and operated gas stations and convenience

stores in multiple states, including Illinois. Defendants, Rizek and Samara, were business

partners and the owners/members of IYS and IMart.

2 ¶5 In December 2018, IMart entered into a credit and security agreement with plaintiff so

that IMart could obtain products from plaintiff on credit to resell in IMart’s gas stations and

convenience stores. The agreement was signed by Rizek and Samara on behalf of IMart and

provided, among other things, that (1) plaintiff would provide products to IMart on credit

pursuant to the terms of the agreement; (2) IMart would pay for those products within 14 days of

delivery; (3) IMart’s liabilities under the agreement would include the liabilities of any other

customer of plaintiff in which IMart, Rizek, or Samara had an ownership interest; (4) if IMart’s

account became past due, interest would accrue on any unpaid balances at a rate of 12% per year,

compounded monthly; and (5) if IMart defaulted on the agreement, it agreed to pay all

reasonable costs and expenses, including attorney fees and court costs, that plaintiff incurred in

enforcing the agreement and collecting the amount due. IYS entered into a similar credit and

security agreement with plaintiff in July 2020. That agreement was signed by Rizek on behalf of

IYS. In addition to signing the credit agreements on behalf of IMart and IYS, Samara and Rizek

also each signed a personal guaranty individually ensuring all payments owed to plaintiff by

IMart (Samara’s personal guaranty) and IYS (Rizek’s personal guaranty).

¶6 Over the course of several months, IMart and IYS, at the direction of Samara and Rizek,

ordered, accepted, and received millions of dollars in products from plaintiff for resale in IMart’s

and IYS’s gas stations and convenience stores. At some point during that time period, however,

IMart and IYS fell behind in their payments to plaintiff. In October, November, and December

2021, IMart and/or IYS issued over $800,000 in payments to plaintiff through checks and

electronic fund transfers that were later returned by the banks because of insufficient funds or

because the checks were deemed to be altered or fictitious. Although plaintiff initially continued

to ship products to IMart and IYS in reliance upon defendants’ repeated promises to pay for the

3 products received, it eventually became concerned and stopped all shipments. In February 2022,

plaintiff notified defendants by letter that they were in default on the credit agreements (and the

personal guarantees) because of their continued failure to pay the amount that was due. IMart

and IYS’s unpaid balance at that time was over $6 million.

¶7 In March 2022, plaintiff filed the instant civil lawsuit against defendants. Plaintiff’s

complaint contained seven counts, including claims for breach of contracts (the credit and

security agreements), personal guarantees, account stated, unjust enrichment, and violation of the

Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS

505/1 et seq. (West 2018)). Plaintiff attached to its complaint copies of the credit and security

agreements and the personal guarantees that defendants had signed.

¶8 Later that same month (March 2022), plaintiff filed a motion to appoint a receiver over

defendants’ businesses and to have the trial court take certain measures to preserve defendants’

assets for plaintiff’s later possible recovery. Defendants opposed the motion and, according to

plaintiff, engaged in actions to delay the trial court proceedings. Near the end of June 2022,

defendants filed an answer to plaintiff’s complaint and admitted many of the underlying facts

that plaintiff had alleged.

¶9 In July 2022, a hearing was held on plaintiff’s motion to appoint receiver. At the

conclusion of the hearing, the trial court denied plaintiff’s request for a receiver; granted

plaintiff’s request to freeze defendants’ assets and to be allowed to retrieve its property from

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2024 IL App (3d) 230300-U, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eby-brown-company-llc-v-iys-ventures-llc-illappct-2024.