2021 IL App (1st) 192323-U
SIXTH DIVISION July 23, 2021
No. 1-19-2323
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 ______________________________________________________________________________
EXPEDITED, INC., an Illinois Corporation, ) Appeal from the ) Circuit Court of Plaintiff-Appellee, ) Cook County. ) v. ) No. 16 L 012164 ) DRAGAN KORUNOVSKI and KATERINA ) The Honorable KORUNOVSKI, ) Ann Collins-Dole, ) Judge Presiding. Defendants-Appellants. )
PRESIDING JUSTICE MIKVA delivered the judgment of the court. Justices Connors and Oden Johnson concurred in the judgment.
ORDER
¶1 Held: The trial court’s judgment—finding in the plaintiff’s favor on claims of breach of fiduciary duty, fraud, civil conspiracy, and unjust enrichment—is affirmed where (1) the court had jurisdiction over this dispute, (2) the court’s findings were supported by the evidence (3) the court did not err in admitting or relying on the plaintiff’s evidence, and (4) an award of punitive damages was not improper.
¶2 Plaintiff Expedited, Inc., filed a four-count verified complaint against defendants Dragan
and Katerina Korunovski (collectively, the Korunovskis). After a bench trial, the trial court found
in favor of Expedited on all four counts and found the Korunovskis jointly and severally liable to
Expedited for $417,744.02. The Korunovskis appeal from that judgment, raising a host of No. 1-19-2323
arguments falling into four general categories: (1) the trial court lacked jurisdiction to enter a
judgment against them, (2) the verdict was against the manifest weight of the evidence, (3) the
trial court erred in admitting certain exhibits, and (4) the trial court erred in assessing punitive
damages. We reject each of these arguments and affirm.
¶3 I. BACKGROUND
¶4 Expedited was formed in January 2011 by Nada Dragojevic and Dragan Korunovski as a
motor carrier that transported shipments for customers using drivers contracted by Expedited.
Dragan’s wife, Katerina Korunovski, was hired to work in Expedited’s billing department. By July
or August 2015, when it became clear that Expedited was in financial trouble, the Korunovskis
had both left the business.
¶5 On December 13, 2016, Expedited filed its verified complaint against the Korunovskis,
alleging claims of breach of fiduciary duty (count I), fraud (count II), civil conspiracy (count III),
and unjust enrichment (count IV). Expedited sought, jointly and severally from the Korunovskis,
a combined judgment of $755,099.66, including punitive damages.
¶6 A bench trial was held over several days in February 2019. The witnesses included Nada,
Dragan, and Katerina, as well as two other Expedited employees, Nada’s daughter, Marija
Dragojevic, and Ashley Wenholtz. The evidence presented was as follows.
¶7 Nada testified that when they formed Expedited, she and Dragan were partners and shared
the profits equally, with Nada serving as the president and Dragan as the vice president, but with
Nada as the sole shareholder. Marija and Ashley also identified Dragan as the company’s vice
president. Nada described Dragan as the “financial officer” of the company—he wrote checks,
handled payroll, paid the drivers, and oversaw the billing department. Nada testified that Dragan
could fire employees, received a salary and bonuses, and that she trusted him.
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¶8 Nada explained that Expedited had approximately seven employees, including three billing
clerks: Katerina, Marija, and Ashley. Marija testified that she and her co-clerks were responsible
for creating and maintaining customer invoices. Expedited would hire a driver to pick up and
deliver a load for an Expedited customer, such as FedEx. Once a shipment was delivered,
Expedited would then receive a document confirming the delivery—generally called a bill of
lading. At that point, the clerk would close the invoice, print it, attach the bill of lading to it, and
send the invoice for payment.
¶9 Nada testified that Expedited sent most customer invoices to JD Factors—a factoring
company—to avoid the delay in payment that would occur if Expedited billed the customer
directly. JD Factors would pay an invoice within a day or two and would in turn invoice and
eventually be compensated by Expedited’s customer. JD Factors used an “aging list” showing how
long invoices had remained unpaid to keep track of what it was owed from Expedited’s customers.
Expedited employees could access the aging list with login credentials on the JD Factors website.
If enough time passed and a customer did not pay an invoice, JD Factors would initiate a “charge
back,” deducting the amount of the invoice from the payments it made to Expedited. Marija
testified that Dragan was responsible for verifying payments from JD Factors. Apart from CSX
Intermodal Terminals Inc., a customer that required direct billing from Expedited, this was the
process the company used to obtain payment on customer invoices.
¶ 10 Expedited used a computer program designed for the trucking industry called PCS to create
its billing invoices. Marija testified that each employee had his or her own login and password for
the software. For each new invoice, the software automatically generated an invoice number and
one of Expedited’s billing clerks would manually enter the rest of the invoice data. PCS tracked
which employee account created each invoice.
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¶ 11 Nada testified that, as the president of Expedited, she tracked the company’s bank accounts
so she knew when payments were made or received by Expedited. According to Nada, she and
Dragan also talked about the profitability of Expedited weekly—“how much money did we bill,
how much money did we invoice to JD Factors.” Dragan would report to Nada how much profit
the company made that week, and they would split the profits equally.
¶ 12 The evidence from Expedited showed that the Korunovskis’ scheme involved three parts:
(1) sending false invoices to JD Factors and receiving payment on those invoices, (2) sending the
same loads to CSX directly and also to JD Factors, and (3) duplicating invoices to look like new
invoices.
¶ 13 Nada was first clued into a scheme existing when, at some point, JD Factors started to
deduct money as charge backs from every payment it made to Expedited. She talked about the
issue with Dragan, and Dragan said that JD Factors must be “making mistakes or stealing money”
from Expedited. Nada arranged a meeting at JD Factors, attended by herself, Dragan, and Katerina
sometime in 2015. JD Factors explained that it was charging back for CSX and FedEx invoices
that had not been paid by those customers. Nada asked Katerina to look into the FedEx invoices
and when Nada followed up, Katerina responded that she was working on them.
¶ 14 Nada testified that, sometime in the summer of 2015, Dragan first told her that Expedited
owed its drivers money. On July 18, 2015, he forwarded an email to Nada listing amounts owed
to the drivers totaling over $100,000. Dragan asked Nada to borrow money to cover the debt, and
she did, though not the full amount owed.
¶ 15 According to Nada, Dragan and Katerina left Expedited in July 2015 because Dragan said
the company was bankrupt and “they had to take care of themselves.”
¶ 16 Katerina left before the unpaid FedEx invoices had been resolved, so Nada asked Marija
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to take over investigating that issue. For 15 FedEx invoices, totaling $51,765.82, Marija found that
the drivers were not paid. She also could not find any bills of lading for those invoices. Marija e-
mailed a FedEx employee, Mike Andrejco, who advised her that he could not approve payment
for the loads she asked about because the “reference numbers listed do not match, nor do any of
the trailer numbers.”
¶ 17 Based on the e-mail from Mr. Andrejco, the fact that the drivers were not paid for loads,
and her conversation with a driver listed on one of the unpaid invoice loads who said he had never
completed that trip, Marija concluded that the 15 “unpaid” FedEx invoices were completely
fraudulent invoices for loads that never occurred. Marija testified that each of these supposed loads
had been booked by either Dragan or Katerina. Although Expedited had not yet been charged back
for those 15 FedEx invoices when Marija started investigating them, FedEx had since demanded
the money from those loads.
¶ 18 Marija also investigated why 25 CSX invoices totaling $51, 249.67 had been processed by
JD Factors even though CSX was supposed to be billed directly by Expedited. These loads
appeared to have been submitted twice, once to CSX and once to JD Factors.
¶ 19 Marija also found five other duplicated invoices during her investigation, booked by
Dragan or Katerina, where “an original invoice and all the paperwork with it was copied and
presented as a new invoice.”
¶ 20 Ashley Wenholtz, who worked as a billing clerk at Expedited from the end of 2013 through
the beginning of 2015, testified that she recalled shipments where a driver was paid only $5
between January and March of 2015. She noticed these because usually a driver was paid between
$500 and $2000 for a trip, depending on the mileage. In approximately January 2015, Ashley asked
Dragan about this, and he said that JD Factors “owed us money and it was okay.” Ashley asked
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Katerina too, and Katerina said the same—JD Factors “owed us money and so it was okay to do
it.” In addition, at Dragan’s instruction, Ashley said between January and March of 2015 she sent
invoices to JD Factors for CSX loads. She again asked Dragan and Katerina about this, and they
both said that CSX was not paying Expedited fast enough “and it was okay to put [them] through
to JD Factors.”
¶ 21 Nada testified that she did everything she could to try to save Expedited, including using
all of her personal savings and available credit to satisfy the company’s debts. She borrowed
$100,000 personally from a relative in June or July 2015, using the money to pay some of the
drivers, pay off $69,000 worth of Expedited’s credit card debts, and pay some of JD Factors’s
unpaid invoices for Expedited customers. Nada paid other Expedited debts with her personal credit
cards. Nada also said she gave Dragan approximately $20,000 or $25,000 of the loan because he
said he wanted to pay the drivers directly and did not want Nada to be present when he did. Nada
did not know what Dragan did with that money, but she did not see it again. Nada was contacted
by a bill collector for a company that Expedited purchased fuel from who told her Expedited owed
that company $31,029.49. Nada negotiated that debt down to a lump-sum payment of $20,000.
Nada borrowed $25,000 in the spring of 2015, later negotiating to repay only $22,000. And Nada
used a personal credit card to pay $12,000 for Expedited’s insurance.
¶ 22 At the time of trial, Expedited still owed JD Factors $170,000. Expedited had also gone
out of business.
¶ 23 Dragan agreed that he worked at Expedited from January 2011 through July 2015 but
denied that he was in fact the company’s the vice president. Dragan did acknowledge, however,
that he had told people he was the vice president of Expedited, he was still telling people he had
been the vice president of Expedited at the time of trial, and his e-mail signature said he was the
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vice president of Expedited. Dragan also filled out a contract with CSX in which he was listed as
the vice president of Expedited. Dragan denied ever saying JD Factors owed Expedited money or
was shorting money to Expedited, denied duplicating invoices, and denied trying to double-charge
any entities. Although the DRAGANK83 login was used to create the false invoices, Dragan said
he did not create those documents—because everyone used his login—or commit fraud against
Expedited. Dragan testified that a separate entity, Skyway, Inc., had been created specifically to
receive his profit-sharing payments. Skyway was owned by the Korunovskis. Katerina also denied
that she created fraudulent or duplicate invoices, or that she committed fraud against Expedited.
¶ 24 The following documents were entered into evidence, largely over the Korunovskis’
objections that they either lacked foundation or were inadmissible hearsay: 14 false FedEx invoices
(exhibit 5), a dispatch and invoice from PCS for load No. 108060 (exhibit 6A), a FedEx aging
report from JD Factors (exhibit 6B), Marija’s notes on the unpaid FedEx invoices (exhibit 11), an
e-mail exchange between Marija and Mika Andrejco about the unpaid FedEx invoices (exhibit
14), the CSX customer contract (exhibit 16), a CSX aging report from JD Factors (exhibit 17A), a
PCS screenshot showing a CSX load being billed to JD Factors (exhibit 18A), a rate confirmation
from customer CH Robinson for load No. 107334 (exhibit 20A), the invoice for load No. 107334
(exhibit 20E), an e-mail about the Fleet One debt collections (exhibit 30), Dragan’s e-mail to Nada
about the debt owed to the drivers (exhibit 31), Expedited’s tax returns from 2011-2014 (exhibit
33), Expedited payroll history for Dragan, Skyway, and Katerina (exhibits 35, 36, and 37), a
promissory note for a $100,000 loan made to Nada on February 26, 2016 (exhibit 39).
¶ 25 The parties filed written memoranda in lieu of presenting closing arguments.
¶ 26 On June 28, 2019, the trial court ruled in favor of Expedited, finding the Korunovskis liable
on all four counts and awarding Expedited damages totaling $417,744.02. The court issued a 35-
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page written ruling explaining in detail its reasoning with respect to each claim. On count I (breach
of fiduciary duty), the court found that Dragan owed Expedited a fiduciary duty as a co-owner, the
CFO, and the vice president, that Dragan had breached that duty by falsely inflating Expedited’s
assumed profits to increase his share of the proceeds, and that due to Dragan’s actions, Expedited
was forced to endure financial hardship, leading to its insolvency. On count II (fraud), the court
found that the Korunovskis intentionally made knowing misrepresentations as to Expedited’s past
income in the form of “fraudulent and duplicitous invoices,” Expedited was entitled to and did rely
on those misrepresentations, as they were squarely within the Korunovskis’ knowledge, and
Expedited was damaged by its reliance. On count III (civil conspiracy), the court found that
Expedited presented compelling circumstantial evidence that the Korunovskis agreed to use false
invoices to create the appearance of greater profits, with the aim of artificially inflating the share
of profits Dragan was entitled to receive, that the couple knowingly and voluntarily participated in
that scheme, and that Expedited was harmed by their conduct. Finally, on count IV (unjust
enrichment), the court found that Expedited proved that the Korunovskis had created false invoices
to procure a benefit from JD Factors at Expedited’s expense and had unjustly retained those funds
to Expedited’s detriment. The court also found that, as Expedited had proven that the Korunovskis
were liable for both fraud and breach of fiduciary duty, punitive damages were an appropriate
means of punishing and deterring such conduct. The court found the Korunovskis liable to
Expedited, jointly and severally, as follows: $19,813.24 for count I, $238,491.06 for count II,
$19,813.24 for count III, $39,626.48 for count IV, and $100,000 in punitive damages.
¶ 27 The court denied the Korunovskis’ motion to reconsider, and this appeal followed.
¶ 28 II. JURISDICTION
¶ 29 The trial court denied the Korunovskis’ motion to reconsider its June 28 order on October
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21, 2019, and they timely filed their notice of appeal on November 13, 2019. We have jurisdiction
pursuant to Illinois Supreme Court Rule 301 (eff. Feb. 1, 1994) and Rule 303 (eff. July 1, 2017),
governing appeals from final judgments entered by the circuit court in civil cases.
¶ 30 III. ANALYSIS
¶ 31 A. The Korunovskis’ Motion to Strike
¶ 32 Before turning to the merits of the appeal, we address the Korunovskis’ motion to strike
Expedited’s response brief, which we elected to take with the case. The Korunovskis insist that
Expedited’s brief should be stricken because Expedited attached documents to its appendix that
were not part of the record on appeal, specifically documents filed with or printed from the website
of the office of the Illinois Secretary of State. Although a party generally may not supplement the
record on appeal by appending documents to its brief (Scepurek v. Board of Trustees of Northbrook
Firefighters’ Pension Fund, 2014 IL App (1st) 131066, ¶ 2), we may take judicial notice of public
records, such as these documents from the Illinois Secretary of State (Maldonado v. Creative
Woodworking Concepts, Inc., 296 Ill. App. 3d 935, 938 (1998)). In deciding this appeal, we have
thus taken judicial notice of these records to the extent that they are relevant to the issues raised.
¶ 33 The Korunovskis also argue that we should strike the statement of the issues presented and
statement of the facts from Expedited’s brief because Expedited improperly “changed” the issues
the Korunovskis raised on appeal, misstated the facts established at trial, cited facts from the
complaint that were not proven at trial, and included arguments in its statement of facts. Expedited
responds that it reframed the issues presented because it “disagree[d] with the framing of the issues
as set forth by the [Korunovskis]” and that it was permitted to include its own statement of facts.
¶ 34 Illinois Supreme Court Rule 341(i) (eff. Oct. 1, 2020) provides that an appellee’s brief need
not include a statement of the facts or the issues on appeal “except to the extent that the presentation
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by the appellant is deemed unsatisfactory.” It is absolutely proper for the appellee, in drafting its
own brief, to decide what it deems unsatisfactory and requiring supplementation. In this manner,
the appellate court can better ascertain the contours of the parties’ dispute. See U.S. Bank Trust
National Ass’n v. Junior, 2016 IL App (1st) 152109, ¶ 17 (noting that “the purpose of these rules
is to require the parties to present clear and orderly arguments *** so that the court can property
ascertain and dispose of the issues involved”). Thus, there is no reason for us to even consider the
striking of Expedited’s brief based on the fact that Expedited provided its own facts and definition
of the issues on appeal.
¶ 35 B. The Merits of the Korunovskis’ Appeal
¶ 36 As noted, the Korunovskis arguments fall into four categories: (1) the trial court lacked
jurisdiction to enter a judgment against them, (2) the evidence was insufficient to sustain the
verdict, (3) the trial court erred in admitting certain documents, and (4) the trial court erred in
assessing punitive damages. We consider each of these categories in turn.
¶ 37 1. The “Jurisdictional” Arguments
¶ 38 The Korunovskis raise seven arguments that they label as “jurisdictional”: (1) the case was
preempted by the federal Carmack Amendment (see 49 U.S.C. § 14706(a)(1) (cited by Expedited);
49 U.S.C. § 14901(e)(1) (cited by the Korunovskis) (2014)), (2) at the time of trial, Expedited had
been involuntarily dissolved and therefore had no legal capacity to sue, (3) Expedited failed to
include Nada and Skyway as necessary parties, (4) count I was not pleaded against Katerina,
(5) the trial court’s judgment was founded on theories of causation not pleaded in the complaint,
(6) the trial evidence did not support the judgment, and (7) the trial court’s judgment relied on
argument and pleadings rather than the trial evidence.
¶ 39 The last three arguments go simply to the sufficiency of the evidence, so we will address
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them separately, as sufficiency has nothing to do with jurisdiction. See Blount v. Stroud, 232 Ill.
2d 302, 316 (2009) (“a court’s jurisdiction does not depend upon the proofs at trial. Rather, the
court’s jurisdiction is dependent upon whether the plaintiff’s case, as framed by the complaint or
petition, presents a justiciable matter.”).
¶ 40 We do not agree with the Korunovskis that any of the four arguments we address in this
section really go to the trial court’s jurisdiction either. As our supreme court has explained,
“ ‘subject matter jurisdiction,’ ” which may be raised at any time, “refers to the power of a court
to hear and determine cases of the general class to which the proceeding in question belongs.”
Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325, 333-34 (2002).
Jurisdiction is conferred upon the trial court—with the exception of matters subject to
administrative review—over “all ‘justiciable matters.’ ” Id. at 334-35. The trial court’s jurisdiction
does not depend on the legal sufficiency of pleadings nor the ultimate outcome of a suit. Id. at 340.
However, since none of these arguments have any merit, we need not resolve whether any could
have deprived the circuit court of power to decide this case.
¶ 41 The Carmack Amendment did not preempt the trial court’s jurisdiction over this case
because it simply does not apply to the set of facts before us. The amendment generally provides
that motor carriers transporting goods are liable for “actual loss or injury to the property caused by
[the carrier].” Converting Systems, Inc. v. Hot-Line Freight System, Inc., 344 Ill. App. 3d 1037,
1041 (2003) (citing Opp v. Wheaton Van Lines, Inc., 231 F.3d 1060, 1063 (7th Cir. 2000)). Here,
although Expedited was an interstate carrier, its claims were not based on loss or injury to any
property it was charged with transporting, so this case would not have been preempted by the
Carmack Amendment. Even the authority cited by the Korunovskis makes clear that the purpose
of the Carmack Amendment is “to remove the uncertainty surrounding a carrier’s liability when
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damage occurs to a shipper’s interstate shipment.” (Internal quotation marks omitted.) Heniff
Transportation Systems, L.L.C. v. Trimac Transportation Services, Inc., 847 F.3d 187, 190 (5th
Cir. 2017). No such damage or liability was alleged here.
¶ 42 The Korunovskis’ claim that Expedited was unable to maintain a suit because it no longer
existed as a legal entity when this action was initiated is also wrong. The Korunovskis cite section
12.30(a) of the Business Corporation Act of 1983 for the proposition that “[d]issolution of a
corporation terminates its corporate existence.” 805 ILCS 5/12.30(a) (West 2018). While that is
true, subsection (c) of the same section specifically provides that dissolution of a corporation “does
not *** [p]revent suit by or against the corporation in its corporate name.” (Emphasis added.) Id.
§ 12.30(c)(3). And as Expedited points out, the Business Corporation Act also has provisions
explicitly noting that dissolution of a corporation “shall not take away nor impair any civil remedy
to or against such corporation” (id. § 12.80) and providing that a corporation that is reinstated
within three years of its dissolution “shall continue under its previous name without implicating
its continuous legal status” (id. § 12.43). Not only did Expedited file suit within three years of its
dissolution, but as Expedited points out in its brief, a review of the Illinois Secretary of State’s
website, which we may take judicial notice of (Maldonado, 296 Ill. App. 3d at 938), shows that
Expedited indeed has been reinstated. See https://apps.ilsos.gov/corporatellc/CorporateLlcContro
ller (last visited: June 24, 2021). It is clear that Expedited had the requisite legal status to bring
suit against the Korunovskis.
¶ 43 The Korunovskis next argue that the trial court’s judgment is void because Expedited failed
to include two necessary parties: Nada and Skyway. “A necessary party is an individual or entity
having a present, substantial interest in the matter being litigated, and in whose absence a complete
resolution of a matter in controversy cannot be achieved without affecting that interest.” City of
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Elgin v. Arch Insurance Co., 2015 IL App (2d) 150013, ¶ 34. A party is necessary if its presence
is required to (1) “protect an interest in the controversy that would be materially affected by a
judgment entered in its absence,” (2) “protect the interests of those who are before the court,” or
(3) “enable the court to make a complete determination of the controversy.” Caparos, 364 Ill. App.
3d at 175.
¶ 44 The Korunovskis argue that the trial court entered relief against Skyway though no claims
were asserted against it. But as Expedited points out, the Korunovskis owned 100% of Skyway,
and Dragan opened Skyway solely for the purpose of receiving his profit-share from Expedited.
Expedited did not have a claim against Skyway. Expedited’s claims were based on the
Korunovskis’ wrongful conduct. The distributions to Skyway were submitted as evidence to prove
the Korunovskis’ scheme. Skyway was not an indispensable party.
¶ 45 Nada was also not an indispensable party. The Nada argument is largely based on the
contention that if Dragan owed anyone a fiduciary duty, it was only to Nada as his business partner
and not to Expedited. But the trial court specifically found that Dragan owed a fiduciary duty to
Expedited. The Korunovskis claim that this finding lacked support, but we disagree. The evidence
was overwhelming that Dragan was an employee of Expedited who held himself out to be its vice
president. As the trial court pointed out, it was unnecessary to resolve the parties’ dispute as to
whether Dragan had ever been appointed vice president since in Illinois, “[e]mployees as well as
officers and directors owe a duty of loyalty to their employer[s].” Lawlor v. North American Corp.
of Illinois, 2012 IL 112530, ¶ 69. Dragan owed a fiduciary duty to Expedited.
¶ 46 The Korunovskis also argue that Nada was a necessary party because the trial court’s
judgments included compensation for debts that were personal to Nada. But the trial court
specifically found that damages were based on debts owed by Expedited, some of which Nada
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repaid on behalf of Expedited. These debts were damages suffered, in the first instance, by
Expedited—even if Nada paid off some of those debts personally in her efforts to rescue the
faltering company.
¶ 47 The Korunovskis next argue that the trial court erred in entering judgment against Katerina
on count I for breach of fiduciary duty because she was not specifically named as a defendant in
that count. The Korunovskis frame this argument as jurisdictional because, according to them,
“[t]he trial court adjudicated an issue that was not pled.” And it is true that “where no justiciable
issue is presented to the court through proper pleadings, the court cannot adjudicate an issue
sua sponte. Orders entered in the absence of a justiciable question properly presented to the court
by the parties are void since they result from court action exceeding its jurisdiction.” Ligon v.
Williams, 264 Ill. App. 3d 701, 707 (1991). This jurisdictional bar does not apply in this case,
however, where Expedited did plead breach of fiduciary duty in its complaint. Moreover, in
entering judgment for Expedited, the trial court found the Korunovskis jointly and severally liable
for all four counts and for punitive damages. “[A] judgment is to be construed like other written
instruments with the determinative factor being the intention of the court as gathered from all parts
of the judgment itself.” Fieldcrest Builders, Inc. v. Antonucci, 311 Ill. App. 3d 597, 605 (1999). It
is clear from the trial court’s detailed written order that it found the Korunovskis worked together
to commit the fraud against Expedited, and that Katerina was part of the conspiracy that allowed
Dragan to breach his fiduciary duty to Expedited. The breach of fiduciary duty and conspiracy to
commit fraud were plainly intertwined here. Indeed, Expedited incorporated by reference its
allegations of breach of fiduciary duty in its claim for conspiracy. The trial court’s finding that
both Korunovskis were liable as to all four counts was not error.
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¶ 48 2. The Evidence Fully Supported the Trial Court’s Judgment
¶ 49 The Korunovskis’ first sufficiency argument is that the trial court applied an incorrect
standard regarding the burden of proof. As the Korunovskis point out, the claims of fraud and
conspiracy based on circumstantial evidence must be proved by clear and convincing evidence.
See Los Amigos Supermarket, Inc. v. Metropolitan Bank and Trust Co., 306 Ill. App. 3d 115, 127
(1999) (fraud); McClure v. Owens Corning Fiberglas Corp., 188 Ill. 2d 102, 134 (1999) (civil
conspiracy based on circumstantial evidence). As we have recognized, “[c]lear and convincing
evidence is *** more than a preponderance but less than is required to convict an individual of a
criminal offense.” In re Tiffany W., 2012 IL App (1st) 102492-B.
¶ 50 The Korunovskis insist that the trial court employed a “ ‘but for’ theory of recovery” rather
than the clear and convincing standard. But the Korunovskis are comparing apples and oranges.
The clear and convincing standard is a standard of proof whereas “but for” causation is one element
of proximate causation. See Turcios v. DeBruler Co., 2015 IL 117962, ¶ 23.
¶ 51 We have carefully reviewed the trial court’s written order and it reflects the trial court’s
understanding of the correct standard of proof. For each claim, the court set out the applicable law,
including the need for clear and convincing evidence of fraud, and discussed at length the support
for its factual and legal conclusions. The court’s consideration of but for causation does not
contradict its demanding clear and convincing proof of Expedited’s claims of fraud and civil
conspiracy.
¶ 52 The Korunovskis next argue that the evidence presented at trial did not support the trial
court’s judgment. The Korunovskis highlight various evidentiary contradictions—such as the lack
of charge backs shown on the JD Factors aging lists and the fact that Marija’s e-mail to Mike
Andrejco references 13 FedEx invoices while the complaint alleges 15 false FedEx invoices.
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¶ 53 The trial court spent 35 pages detailing each of the claims alleged against the Korunovskis
and the evidence that supported those claims. Marija testified that she investigated all the billing
irregularities from JD Factors and found 15 false FedEx invoices, 25 CSX loads that were billed
to both CSX and JD Factors, as well as other duplicate invoices. Marija testified from her
considerable firsthand knowledge and understanding of Expedited’s business operations, taking
the trial court through each step of her investigation and the supporting documents she relied on,
including invoices, aging lists, her own notes, and her e-mail exchange with Mr. Andrejco. Her
testimony, corroborated in significant part by the documentary evidence and the testimony of Nada
and Ashley, provided the trial court with a map of the Korunovskis’ fraudulent activities. None of
the relatively minor contradictions in the testimony or exhibits that the Korunovskis now focus on
convinces us that Expedited failed to prove its claims of fraud, conspiracy, breach of fiduciary
duty, and unjust enrichment against the Korunovskis.
¶ 54 Finally, the Korunovskis allege that the trial court improperly relied on pleadings and the
parties’ written closing arguments instead of exclusively on the evidence that was presented at
trial. It is true that the trial court’s written ruling cited extensively to Expedited’s complaint and
the parties’ arguments. However, the court’s analysis was also fully supported by the evidence that
was presented at trial, which the court also referenced. In sum, nothing about the trial court’s order
leads us to believe that its rulings were not firmly grounded in the extensive evidence presented.
¶ 55 3. The Trial Court Did Not Abuse Its Discretion in Admitting Certain Exhibits
¶ 56 The Korunovskis contend that three specific exhibits were erroneously admitted into
evidence and relied on by the trial court. A trial court has broad discretion in admitting evidence,
and we review those rulings for an abuse of discretion. Union Tank Car Co. v. NuDevco Partners
Holdings, LLC, 2019 IL App 91st)172858, ¶ 31. This is “the most deferential standard of review,
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and a trial court abuses its discretion only when its decision is unreasonable, arbitrary, or no
reasonable person would take the view it adopted.” Id.
¶ 57 The three challenged exhibits are (1) the JD Factors aging report for the FedEx invoices,
(2) the aging report for the CSX invoices, and (3) a rate confirmation for the load of another
customer, CH Robinson. The Korunovskis argue that these exhibits lacked foundation and were
hearsay. Expedited responds that a proper foundation was laid for each exhibit under the business
records hearsay exception. We agree with Expedited.
¶ 58 Illinois Supreme Court Rule 236(a) (eff. Aug. 1, 1992), governing the admission of
business records into evidence, provides:
“Any writing or record, *** made as a memorandum or record of any act,
transaction, occurrence, or event, shall be admissible as evidence of the act, transaction,
occurrence, or event, if made in the regular course of any business, and if it was the regular
course of the business to make such a memorandum or record at the time of such an act,
transaction, occurrence, or event or within a reasonable time thereafter.”
See also Ill. R. Evid. 803(6) (eff. April 26, 2012) (business record exception to the hearsay rule,
similar in substance to Rule 236(a)).
¶ 59 A proper foundation for a business record requires the proponent of the evidence to show
“that the record was kept in the ordinary course of business and that it was the regular practice of
the business to make the record at that time.” Union Tank, 2019 IL App (1st) 172858, ¶ 32.
“Records made by a third party may be admissible as business records so long as the person
authenticating the record was either their custodian or other person familiar with the business and
its mode of operations.” Id. The circumstances surrounding the creation of the record, including a
lack of personal knowledge, go to the weight and not to the admissibility of the record. Id.
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¶ 60 Here, the proper business records foundation was laid for these three documents. All three
records were used in the regular course of business. Marija’s testimony demonstrated her
understanding and knowledge as to what the records were and how they were used. As to the aging
lists, Dragan and Marija both testified that billing clerks relied on aging lists from the JD Factors
website every day and in the regular course of their business to track which invoices had been paid
to JD Factors by Expedited’s customers and which had yet to be paid. Marija testified that the
information on the aging lists was from the invoices Expedited would send to JD Factors.
¶ 61 With respect to the rate confirmation, Marija testified that it was a rate confirmation for
Expedited’s client, CH Robinson, and it that it was “what [Expedited] needed in order to invoice”
certain loads. Marija testified that Expedited would receive a rate confirmation either physically
or by e-mail from its dispatchers, and that a billing clerk like herself would enter it into the PCS
software when creating an invoice for that load. Marija’s testimony clearly established that the rate
confirmation was a document used in the ordinary course of Expedited’s business. There was no
abuse of discretion in admitting these records.
¶ 62 4. The Award of Punitive Damages Was Not Improper
¶ 63 Finally, the Korunovskis argue that the trial court’s award of punitive damages was
improper as a matter of law. The purpose of punitive damages is “to punish the offender and to
deter that party and others from committing similar acts of wrongdoing in the future.” Loitz v.
Remington Arms Co., 138 Ill. 2d 404, 414 (1990). Although punitive damages are disfavored, they
“may be awarded when torts are committed with fraud, actual malice, *** or when the defendant
acts willfully, or with such gross negligence as to indicate a wanton disregard of the rights of
others.” (Internal quotation marks omitted.) Id. at 414-15.
¶ 64 Whether punitive damages are available as a matter of law is a question we review de novo.
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Gambino v. Boulevard Mortgage Corp., 298 Ill. App. 3d 21, 51 (2009). A finding by the trial court
that the aggravating factors justifying the imposition of such damages has been adequately proven
is accepted unless it is against the manifest weight of the evidence. Id. The ultimate question of
whether an award of punitive damages was proper is reviewed for an abuse of discretion. Id.
¶ 65 Punitive damages were available as a matter of law in this case where Expedited proved its
claims of fraud and breach of fiduciary duty. Obermaier v. Obermaier, 128 Ill. App. 3d 602, 610
(1984). Although the trial court noted that it had found in favor of Expedited on all four claims,
including unjust enrichment, it made clear that its award of punitive damages was based only on
the claims of fraud and breach of fiduciary duty, as an “appropriate means of punishing and
deterring the [Korunovskis’] conduct.” Furthermore, the court’s necessary, although implied,
conclusion that there were aggravating factors was not against the manifest weight of the evidence.
The Korunovskis’ scheme involved months of willful deception, the misappropriation of
significant Expedited funds, and a serious breach of Nada’s trust in them. The $100,000 in punitive
damages was also significantly less than the $476,982.12 Expedited requested. Based on all the
facts of the case, we cannot find that the court’s award of punitive damages was an abuse of
discretion.
¶ 66 IV. CONCLUSION
¶ 67 For the foregoing reasons, we affirm the judgment of the trial court.
¶ 68 Affirmed.
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