2020 IL App (1st) 190603-U No. 1-19-0603
SECOND DIVISION June 16, 2020
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 ______________________________________________________________________________
MICHAEL C. KIM, doing business as MICHAEL ) Appeal from the Circuit Court C. KIM & ASSOCIATES, ) of Cook County. ) Plaintiff and Counterdefendant-Appellee, ) ) No. 13 M1 131645 v. ) ) HEMINGWAY HOUSE CONDOMINIUM ) The Honorable ASSOCIATION, an Illinois not-for-profit ) Daniel J. Kubasiak, corporation, ) Judge Presiding. ) Defendant and Counterplaintiff-Appellant, ) ) (Klein & Hoffman, Inc., Counterdefendant). ) ______________________________________________________________________________
JUSTICE PUCINSKI delivered the judgment of the court. Presiding Justice Fitzgerald Smith and Justice Lavin concurred in the judgment.
ORDER
¶1 Held: The trial court’s grant of summary judgment in favor of the plaintiff on defendant’s counterclaim was reversed where there existed a genuine issue of material fact regarding whether the defendant’s board of directors properly voted to authorize the defendant’s participation in the litigation. The trial court did not abuse its discretion in allowing the plaintiff to amend his affirmative defenses where the defendant failed to present a sufficient record demonstrating error, but the trial court did err when it refused to reopen discovery after it permitted the addition of a new affirmative defense after discovery closed. 1-19-0603
¶2 Defendant and counterplaintiff, Hemingway House Condominium Association
(“HHCA”), appeals from the trial court’s grant of summary judgment in favor of plaintiff and
counterdefendant, Michael C. Kim, doing business as Michael C. Kim & Associates, on HHCA’s
counterclaim. For the reasons that follow, we affirm in part, reverse in part, and remand for
further proceedings.
¶3 BACKGROUND
¶4 The record in this matter is voluminous, but only a small portion is relevant to the
disposition of issues on appeal. Accordingly, we recite only those facts that are necessary for an
understanding and disposition of the issues raised on appeal.
¶5 The Hemingway House Condominiums are comprised of 280 units in a 28-story, high-
rise building located at 1850 N. Clark in Chicago. HHCA is charged with the operation and
management of the units, with the Board of Directors (“Board”) acting as the governing entity.
¶6 Starting in approximately 2002 or 2003, some units began to experience water intrusion.
Additional units experienced similar water intrusion over the years. This water intrusion was
ultimately determined to be a result of design and construction defects in the exterior wall of the
building. Beginning in 2011, a dispute arose between some of the unit owners and some of the
then-Board members (“Prior Board”) over the type, extent, and cost of repairs necessary to
resolve the water intrusion issue. Boiled down to its most basic form, the dispute centered
around whether Repair Option 1 or Repair Option 2 of a report prepared by counterdefendant
Klein & Hoffman, Inc. (“K&H”) should be implemented. Repair Option 1 called for traditional
tuckpointing and brick repair, while Repair Option 2 involved completely replacing the exterior
brick façade for the entire building. Many of the unit owners desired the less costly Repair
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Option 1, while many members of the Prior Board preferred the more expensive Repair Option
2.
¶7 After much back and forth between the opposing sides, including allegations of
misconduct by the Prior Board in handling the dispute and adopting a special assessment to pay
for the repairs, a case was instituted in housing court, which resulted in an order requiring HHCA
to proceed in conformance with Repair Option 2. Thereafter, the Prior Board entered into a
construction contract for the repairs, which contained a provision that any termination of the
contract by a subsequent Board would result in a $500,000 penalty. Throughout this dispute,
Kim represented HHCA and the Prior Board.
¶8 In September 2012, Board elections resulted in all Prior Board members who supported
the adoption of Repair Option 2 being removed from office and some of the unit owners who
opposed Repair Option 2 being elected. The new Board then terminated Kim as counsel for
HHCA.
¶9 In May 2013, Kim instituted the present suit seeking to recover unpaid legal fees. In
March 2017, HHCA filed its third amended counterclaim against Kim and K&H. In that
counterclaim, HHCA alleged that Kim breached his fiduciary duty, aided and abetted the Prior
Board in breaching its fiduciary duty, aided and abetted the Prior Board’s scheme to defraud, and
engaged in a civil conspiracy with the Prior Board. HHCA also alleged that K&H breached its
contract, committed professional negligence, aided and abetted the Prior Board’s breach of
fiduciary duty, aided and abetted the Prior Board’s scheme to defraud, and engaged in a civil
conspiracy with the Prior Board. HHCA’s claims against K&H were eventually settled and
dismissed with prejudice in October 2018. All of HHCA’s allegations related to the dispute over
and special assessment for the water intrusion repairs.
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¶ 10 Kim filed his answer and affirmative defenses to the third amended counterclaim in
October 2017. In April 2018, Kim issued requests for admission to HHCA, centering around the
question of whether the Board properly voted to approve HHCA’s participation in the present
and other litigation related to the repair dispute. HHCA objected to the requests on the basis,
among others, that they were irrelevant to the issues involved in the present litigation.
Thereafter, Kim filed a “Motion to Strike Objections, Deem Facts Admitted and Motion for
Sanctions” (“motion to strike”).
¶ 11 While Kim’s motion to strike was pending, on May 31, 2018, shortly after all discovery
had closed, Kim filed a motion for leave to file amended affirmative defenses. In it, he sought
leave to add an affirmative defense alleging that HHCA’s participation in the current suit was
precluded by the Board’s failure to properly vote, in accordance with the Illinois Condominium
Property Act (“Act”) (765 ILCS 605/1 et seq. (West 2012)), on whether to defend against Kim’s
complaint and file a counterclaim.
¶ 12 Following an evidentiary hearing on Kim’s motion to strike, the trial court granted Kim’s
motion to strike and deemed the requests admitted. It also granted Kim leave to amend his
affirmative defenses. HHCA filed a motion to reconsider the grant of the motion to strike and a
motion to reopen discovery. In the latter, HHCA argued that it should be afforded the
opportunity to conduct discovery on Kim’s new affirmative defense. The trial court ultimately
granted HHCA’s motion to reconsider but denied its motion to reopen discovery. With respect
to the motion to reconsider, the trial court found that because the vote issue had not been pled as
an affirmative defense at the time HHCA filed its objections to Kim’s requests for admission,
HHCA had some grounds on which to object based on relevance. As for the motion to reopen
discovery, the trial court based its denial on the fact that the parties had been given multiple
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extensions of discovery over the course of the litigation and had the opportunity to present and
examine witnesses at the evidentiary hearing. In addition, the trial court concluded that the
voting issue “should be apparent” to HHCA, because it was required under the Act (765 ILCS
605/19(a)(4) (West 2012)) to keep and maintain minutes of all its meetings for the preceding
seven years.
¶ 13 Shortly thereafter, Kim filed a motion for summary judgment in which he argued, among
other things, that HHCA’s defense and counterclaim were precluded by the Board’s failure to
authorize HHCA’s participation in the present suit by way of a vote at an open meeting.
According to Kim, the holding in Palm v. 2800 Lake Shore Drive Condominium Association,
2014 IL App (1st) 111290, ¶ 87, makes clear that the Act requires that the Board vote on any
litigation matter at a meeting open to all unit owners. He then argued that there was no evidence
that the Board conducted any such vote at an open meeting, because none of the Board’s meeting
minutes reflected such a vote.
¶ 14 In response, HHCA argued that the Board did vote to approve HHCA’s participation in
the present litigation at an open meeting. In support, HHCA submitted a transcript of the
testimony of Ben Beiler, the Board’s president, given at the evidentiary meeting on Kim’s
motion to strike. Beiler testified that at the July 9, 2013, meeting, the Board discussed the suit
filed by Kim and potential counterclaims during a closed executive session. Because some
Board members were considering filing a counterclaim against other adverse Board members,
those adverse Board members were asked to excuse themselves from the executive session.
They were advised, however, that the meeting would subsequently be reopened to all unit
owners. No vote was taken during that executive session. Following that executive session, the
meeting was reopened to all unit owners. It was during the open meeting that a vote was taken
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approving HHCA’s participation in the present litigation, filing a suit against Kim, and possibly
filing suit against adverse Board members. Beiler was also granted authority to run and oversee
the litigation. The vote approving these actions was unanimous among the Board members who
voted. The Board members who had been excused from the executive session did not return to
participate in the open meeting, and thus did not vote. Beiler acknowledged that the minutes of
the July 9, 2013, 1 meeting did not reflect a vote on the present litigation. Beiler also testified
that at some point in 2013, prior to the meeting at which the vote was taken, there was an
informal meeting of the Board members at someone’s home at which the Board discussed Kim’s
lawsuit at great length. He denied, however, that any vote took place at that meeting.
¶ 15 The evidentiary hearing testimony of Donald O’Hara, Rosemary Corriere, and Brook
Zemlan was also taken. O’Hara testified that he was a member of the Board in 2013 and that at
the July 9, 2013, meeting he was never asked to leave the meeting and that he did not, at any
point, leave the meeting. He denied that the Board voted to defend Kim’s suit or to bring its own
suit against Kim or K&H. He also denied that the Board voted to give Beiler authority to handle
the litigation. Corriere also testified that she was a Board member in 2013 and that she was not
asked to and did not leave the July 9, 2013, meeting. She also testified that no vote was taken to
authorize the defense of Kim’s litigation, the filing of a counterclaim, or Beiler’s oversight of the
litigation. Zemler testified that she was the property manager for the Hemingway House
Condominiums in 2013 and that she took the notes that were turned into the formal meeting
minutes for the Board meetings. Although the purpose of the notes were to record any and all
votes that were taken and although she recorded as many votes as possible, it was very possible
that she missed recording a vote, because there was room for error when she was taking notes
1 The parties appear to agree that the vote on the present litigation, if it occurred at all, occurred at the July 9, 2013, Board meeting. -6- 1-19-0603
while also running the meeting. She testified that she had no recollection of a discussion of
lawsuit involving Kim, members being asked to leave the meeting, or any votes giving Beiler
authority to handle the litigation. She testified that litigation was always discussed in a closed,
executive session where no minutes were taken, but the meeting would then be reopened to all
unit owners for a vote.
¶ 16 HHCA also submitted an affidavit from Steven Ropka, who attested that he was a Board
member in 2013 and that at a July 2013 meeting, the Board voted in an open meeting to defend
the present litigation and pursue a counterclaim.
¶ 17 After Kim’s motion for summary judgment had been fully briefed, HHCA filed a motion
to supplement its response to Kim’s motion for summary judgment with the affidavit of Ian
Brodsky. Brodsky’s affidavit, in almost identical terms to Ropka’s affidavit, averred that he was
a Board member in 2013 and that in July 2013, the Board voted to defend Kim’s lawsuit and file
its counterclaim. The trial court denied HHCA’s request on the basis that the motion for
summary judgment had already been fully briefed and set for decision.
¶ 18 On October 26, 2018, the trial court issued its opinion granting Kim’s motion for
summary judgment. The trial court concluded that HHCA failed to properly authorize its
defense of Kim’s suit and the filing of its counterclaim, noting that Beiler had testified to an
informal meeting at which no votes were taken and the fact that none of the Board’s meeting
minutes reflected a vote on the litigation. Because the trial court concluded that there was no
evidence that the Board properly authorized HHCA’s litigation, it granted summary judgment in
favor of Kim on HHCA’s counterclaim. On this same basis, it also granted Kim summary
judgment on his claim of unpaid legal fees and entered judgment in favor of him in the amount
of $41,614.95.
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¶ 19 Following an unsuccessful motion to reconsider, HHCA instituted this appeal.
¶ 20 ANALYSIS
¶ 21 On appeal, HHCA raises a number of contentions: (1) the trial court erred in granting
summary judgment in favor of Kim on HHCA’s counterclaim; (2) the trial court erred in
allowing Kim to amend his affirmative defenses; (3) the trial court erred in denying HHCA’s
motion to reopen discovery; and (4) the trial court erred in denying HHCA leave to file the
Brodsky affidavit. HHCA does not raise any issue with respect to the trial court’s grant of
summary judgment on Kim’s complaint. We conclude that a genuine issue of material fact
precluded summary judgment on HHCA’s counterclaim. We also conclude that although the
trial court did not err in allowing Kim to amend his affirmative defenses, it did err in refusing to
reopen discovery after Kim’s amendment of his affirmative defenses. The issue of Brodsky’s
affidavit is moot.
¶ 22 Summary Judgment
¶ 23 HHCA’s first contention is that the trial court erred in granting Kim summary judgment
on HHCA’s counterclaim. Primarily, HHCA argues that there existed a genuine issue of
material fact that precluded summary judgment, because there was conflicting evidence of
whether a vote was taken at an open meeting authorizing the litigation. We agree.
¶ 24 Summary judgment is to be granted “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 a judgment as a matter of law.” 735 ILCS 5/2-1005(c) (West
2016). Because summary judgment is a drastic measure and should only be granted when the
moving party’s right to judgment is clear and free from doubt, we must view all evidence in the
light most favorable to the nonmovant. Bourgonje v. Machev, 362 Ill. App. 3d 984, 994 (2005).
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We review the trial court’s grant of summary judgment de novo. Valley Forge Insurance Co. v.
Swiderski Electronics, Inc., 223 Ill. 2d 352, 360 (2006).
¶ 25 Section 18(a)(9)(A) of the Act (765 ILCS 605/18(a)(9)(A) (West 2012)) provides that
condominium bylaws must provide in relevant part as follows:
“that every meeting of the board of managers shall be open to any unit owner, except that
the board may close any portion of a noticed meeting or meet separately from a noticed
meeting to: (i) discuss litigation when an action against or on behalf of the particular
association has been filed and is pending in a court or administrative tribunal, or when the
board of managers finds that such an action is probable or imminent ***; that any vote on
these matters shall take place at a meeting of the board of managers or portion thereof
open to any unit owner.”
We have held that this language requires that any litigation matter be voted on at a meeting open
to all unit owners. See Palm, 2014 IL App (1st) 111290, ¶ 87. Moreover, the failure of a
condominium board to properly vote on litigation matters violates the Act and precludes a Board
from pursuing the litigation. See id. at ¶¶ 87-88 (where the condominium board failed to vote at
an open meeting to defend against the plaintiff’s lawsuit, the plaintiff was entitled to summary
judgment, and the trial court did not err in enjoining the Board from authorizing litigation
without a proper vote and in ordering the Board to hold an open meeting for the purpose of
voting to authorize the continued defense of the pending matter).
¶ 26 As an initial matter, we note that HHCA argues that Kim lacks standing to raise the issue
of whether the Board conducted a proper vote to authorize its participation in the present action,
because he is not an HHCA member or unit owner. HHCA contends that because the Act and
HHCA’s bylaws were not designed to protect the interests of third parties who are not HHCA
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members or unit owners, Kim has no standing on which to assert the Board’s alleged non-
compliance with the bylaws or the Act. In support of this contention, HHCA cites to two cases
from foreign jurisdictions, Lake Forest Master Community Association, Inc. v. Orlando Lake
Forest Joint Venture, 10 So. 3d 1187 (Fla. 2009), and Port Liberte II Condominium Association,
Inc. v. New Liberty Residential Urban Renewal Co., LLC, 86 A.3d. 730 (N.J. 2014). Although
these cases might support HHCA’s position, they are overcome by Illinois precedent holding that
third parties may invoke or assert violations of the Act or association bylaws in litigation where
the third party has an interest in avoiding multiple lawsuits. See River Plaza Homeowner’s
Association v. Healey, 389 Ill. App. 3d 268, 281 (2009) (the developer defendants had standing
to challenge the plaintiff Association’s standing to bring suit where the proper two-thirds vote
was not obtained under the bylaws, even though the defendants were not members of the
association, because they had an interest ascertaining the proper party to bring suit against them
and avoiding multiple suits); Board of Directors of Kennelly Square Condominium Association
v. MOB Ventures, LLC, 359 Ill. App. 3d 991 (2005) (trial court’s dismissal of individual unit
owners’ suits affirmed where third-party defendant challenged their standing to bring suit on the
basis that the Act and the association’s bylaws gave the board exclusive standing to bring the
claim, so as to avoid multiplicity of claims). Here, Kim has an interest in ensuring that HHCA’s
participation in the suit was properly authorized, so as to prevent individual unit owners from
later bringing similar claims against him on the basis that HHCA’s prior actions were invalid.
Accordingly, we conclude that Kim has standing to assert the Board’s alleged non-compliance
with the Act and HHCA’s bylaws.
¶ 27 We turn now to the question of whether the trial court properly granted summary
judgment in favor of Kim on HHCA’s counterclaim based on his affirmative defense that the
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Board did not properly authorize HHCA’s participation in the suit.2 We conclude that there
existed a genuine issue of material fact as to whether the vote was taken at an open meeting and,
thus, summary judgment should have been denied.
¶ 28 Although the trial court observed that Beiler testified that a vote was taken at a 2013
meeting, it also concluded that later in his testimony, Beiler described that meeting as informal
with no vote taken. We do not read Beiler’s testimony in the same way. We find the following
excerpts of Beiler’s testimony as representative of the whole:
“Q. So it is your position that the Board voted to defend this litigation in 2013?
A. In 2013 the vote—the Board voted not only to defend this litigation but to also file
a counterclaim against Mr. Kim at the same hearing—at the same meeting to eventually
file a lawsuit against H and H—excuse me, K and H, Klein & Hoffman and also at the
same meeting to potentially bring in directors who were adverse—who supported and
were part of the scheme that we are alleging in the complaint.
And I was given complete authority of the same meeting to run this entire litigation
from beginning to end at every phase of it without necessarily having to come to the—
back to the Board for any kind of approvals. But I did get—go back to them. But that’s
kind of what happened at that meeting.
***
A. So we had all of that done at that meeting. Before that meeting—the meeting was
an executive session initially. Before that meeting we asked all the adverse Board
2 HHCA states in its brief that it does not contest the trial court’s grant of summary judgment in favor of Kim on Kim’s complaint, despite the fact that the trial court’s decision in that respect was also based on its conclusion that the Board did not properly authorize HHCA’s participation in this lawsuit. -11- 1-19-0603
members to excuse themselves because they were potentially defendants in that litigation.
And they did without objection.
They were told that at some point we will be going into an open meeting again after
the discussions. And they excused themselves and never showed up again. So that’s
kind of what happened there.
Q. Thank you. I want to make sure I understand this. Now, you are saying that at
one meeting in 2013 there was a vote to defend against Mr. Kim’s lawsuit, true?
A. In fact, I know you want to have a story that fits your story, but it is a more
elaborate story than that. Before that specific meeting we had a meeting very soon
after—we became the new Board at the—this is way before the [Palm] case. In fact it
was I think 1913—excuse me, 2013.
THE COURT: Yes, we are not that old.
THE WITNESS: Yes, I know. I am maybe.
In 2013 we had a meeting with all the Board members or virtually all of them at the
home of one of our Board members. And at that meeting we discussed thoroughly every
aspect of the litigation in terms of who are we going to sue, who are we are going to sue,
Kim, Klein Hoffman, potentially directors. And we kind of developed our total litigation
strategy on this matter, but we chose to kind of defer doing anything because we had
plenty of time to do that because we wanted to kind of first get into office and do our job
and kind of calm the building down—
Q. Okay, again, my question was there was a meeting of the open Board in 2013
where there was a vote to defend against Michael Kim’s lawsuit; is that your testimony?
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A. After the executive session there was an open meeting to do that. And there is
some notation about the fact that—a discussion about that—an action regarding that
litigation took place, yes.
Q. Okay. And I think you said also there was a meeting at a home I heard in your
testimony I wrote down?
A. In 2013.
Q. 2013 there was a meeting of the Board of Directors at someone’s home?
A. Well, it was kind of an informal meeting of the new Board over, you know,
cocktails and whatever. And we discussed this matter at great length.
Q. Are you claiming that that was a meeting where a vote took place to initiate this
litigation?
A. No, I didn’t say that. We didn’t take any votes. We kind of—the way we ran
our—I know I can’t narrate. But the way we ran our meetings is virtually every decision
was unanimous. And that happened not only in that tenure of my presidency but the two
prior ones.
I always operated based on developing a consensus so we always were in agreement.
If we weren’t in agreement, we’d find a way to get to an agreement. So that’s what
happened there, just the discussion.” (Emphasis added.)
¶ 29 Throughout his testimony, Beiler repeatedly stated that the issue of the pending litigation
was discussed at a closed executive session on July 9, 2013, and that immediately following the
executive session, the meeting was reopened to all of the unit owners. It was at that point that a
vote was taken approving the HHCA’s defense of Kim’s suit, the filing of a counterclaim, and
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authorization of Beiler to handle the litigation matters. The informal meeting referenced by the
trial court appears to have been a gathering, shortly after the most recent board election, of all of
the Board members—both newly elected and retained—for drinks at someone’s home. During
that gathering, the litigation was discussed but no vote was taken. It appears from Beiler’s
testimony that this informal gathering and discussion preceded and was distinct, separate from,
and in addition to the July 9, 2013, meeting at which the matter was discussed in a closed
executive session and then voted upon at an open meeting. Accordingly, we disagree with the
trial court’s conclusion that Beiler’s testimony indicated that the only discussion of the current
litigation was at an informal gathering at which no vote was taken. Instead, it appears that in
addition to the informal gathering, there was a separate executive session at which the litigation
was discussed and an open meeting at which a formal vote was taken.
¶ 30 In addition to Beiler’s testimony that a vote was taken on the litigation at an open
meeting, Ropka attested in his affidavit that a vote was taken at an open meeting. In its opinion,
the trial court noted a conflict between Beiler’s testimony and Ropka’s affidavit. According to
the trial court, Beiler testified that the Board meeting at which the litigation was discussed took
place on August 8, 2013, while Ropka averred that the vote took place in July 2013. We could
find no such inconsistency in the record. Initially, Beiler testified that he could not remember the
date on which the Board discussed and voted on the litigation, but then later agreed that it
occurred on July 9, 2013. In any case, any perceived inconsistency between Beiler and Ropka
regarding the date of the meeting is irrelevant, as the pertinent question is whether the Board
voted on the litigation at an open meeting, not when they voted on the litigation. Moreover,
whether July or August 2013, HHCA would have discussed and voted on the matter before it
filed its answer in September 2013.
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¶ 31 In its order denying HHCA’s motion to reconsider, the trial court also cited Beiler’s
testimony that certain Board members were excused from the meeting as a basis for its
conclusion that a vote was not taken at an open meeting. We agree that if certain Board
members were excused and not permitted to return to participate in the vote, such actions would
necessarily defeat a conclusion that the vote occurred at an open meeting. That was not Beiler’s
testimony, however. He testified that certain Board members were excused from the executive
session, because the other Board members wished to discuss the possibility of bringing claims
against those excused Board members. Beiler further testified, however, that, upon being
excused, those members were advised that following the executive session, the open meeting
would reconvene. The excused members never returned, and the open portion of the meeting,
including the vote, proceeded without them. The excused Board members’ failure to return to
the open meeting does not render the meeting any less open, because there is no evidence that
they were not or would not have been permitted to return; rather, drawing all inferences in favor
of HHCA, as we must, it appears that they simply chose not to return and participate.
¶ 32 Finally, in reaching its decision, the trial court relied heavily on the fact that the July 9,
2013, meeting minutes did not reflect that a vote was taken on the litigation. Rather, the minutes
simply read, “The Association is filing a countersuit against the Association’s former legal
counsel, Michael C. Kim. To date, he has not been paid for some of his legal services and is
suing the Association[] as a result.” The trial court observed that the Act required the Board to
keep minutes for all meetings for the preceding seven years (765 ILCS 605/19(a)(4)) and that the
Illinois General Not for Profit Corporation Act (“NFP Act”) (805 ILCS 105/107.75(a) (West
2012)) also required the keeping of meeting minutes. On appeal, Kim has adopted this position,
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arguing that the omission of any mention of a vote in the July 9, 2013, meeting minutes is
definitive proof that no such vote was taken.
¶ 33 Although it is certainly true that the Board was required to keep minutes of all of its
meetings, we do not believe the fact that the minutes for the July 9, 2013, meeting do not reflect
that a vote was taken is dispositive. Except in specific circumstances not applicable here, neither
the Act nor the NFP Act impose requirements on the contents of the minutes, and they certainly
do not impose any requirement that all votes be recorded. Similarly, the Act’s requirement that
litigation matters be voted on during open meetings does not impose an obligation to record that
vote in the meeting minutes. Certainly, recording such votes would be in the best interests of
condominium associations, as the failure to record a vote raises the question of whether one was
ever taken. That being said, however, there is nothing in any of the applicable statutes that
makes the recordation of the votes an element of a proper vote on litigation matters.
Accordingly, the fact that the minutes do not reflect a vote is not fatal to HHCA’s position that a
proper vote was taken.
¶ 34 Kim also argues on appeal that because the minutes are the “sole record of HHCA’s
official acts,” they cannot be contradicted by parole evidence, such as Beiler’s testimony. In
support, Kim cites Western Sand & Gravel Co. v. Town of Cornwall, 2 Ill. 2d 560, 564 (1954),
and O’Malley v. Village of Palos Park, 346 Ill. App. 3d 567, 581-82 (2004), for the proposition
that “official acts of municipal corporations must be recorded and the records are the only lawful
evidence of the action to which they refer.” Kim does not cite any authority, however, for the
proposition that the same principle applies in the context of condominium associations.
Accordingly, he has waived his contention that our determination of whether there existed a
genuine issue of material fact regarding whether the Board voted on the litigation at an open
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meeting rises and falls solely on the contents of the July 9, 2013, meeting. See Ill. S. Ct. R.
341(h)(7) (eff. Nov. 1, 2017) (requiring that the argument section of appeals briefs “shall contain
the contentions of the appellant and the reasons therefor, with citation of the authorities and the
pages of the record relied on”); Sakellariadis v. Campbell, 391 Ill. App. 3d 795, 804 (2009)
(“The failure to assert a well-reasoned argument supported by legal authority is a violation of
Supreme Court Rule 341(h)(7) [citation], resulting in waiver.”); Thrall Car Manufacturing Co. v.
Lindquist, 145 Ill. App. 3d 712, 719 (1986) (“A reviewing court is entitled to have the issues on
appeal clearly defined with pertinent authority cited and a cohesive legal argument presented.
The appellate court is not a depository in which the appellant may dump the burden of argument
and research.”).
¶ 35 In sum, the record contains conflicting evidence on whether the Board voted in an open
meeting to defend against Kim’s lawsuit and to file a counterclaim. Beiler testified and Ropka
averred that the Board approved HHCA’s participation in the suit by way of a vote at an open
meeting on July 9, 2013, while O’Hara testified that no such vote took place. The minutes for
the July 9, 2013, meeting reflect that the Board decided to file a counterclaim against Kim, but
contain no indication, one way or the other, whether that decision was reached by way of a vote
at an open meeting. This conflicting evidence clearly gives rise to a genuine issue of material
fact regarding whether HHCA’s participation in the present suit was properly authorized in
accordance with the Act. Accordingly, summary judgment should have been denied.
¶ 36 Kim also argues that even if there exists an issue of fact on the voting issue, we can
nevertheless affirm on the basis that the Prior Board’s adoption of Repair Option 2 and the
accompanying special assessment was protected by the business judgment rule and mandated by
law. According to Kim, because all of HHCA’s claims against him are premised on the Prior
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Board’s adoption of Repair Option 2 and the special assessment and because that adoption is
insulated by the business judgment rule and the fact that it was mandated by law, he cannot be
held liable for any breaches based on that adoption. Kim’s contentions lack merit.
¶ 37 The business judgment rule provides that “[a]bsent evidence of bad faith, fraud, illegality,
or gross overreaching, courts are not at liberty to interfere with the exercise of business judgment
by corporate directors.” Fields v. Sax, 123 Ill. App. 3d 460, 467 (1984). The business judgment
rule does not apply, however, where the allegations do not relate to the directors’ alleged
mismanagement of the company, but instead relate to alleged violations of contracts or bylaws.
See Alliance Property Management, Ltd. v. Forest Villa of Countryside Condominium
Association, 2015 IL App (1st) 150169, ¶ 31; Richard W. McCarthy Trust Dated September 2,
2004 v. Illinois Casualty Co., 408 Ill. App. 3d 526, 536-37 (2011). Here, many of HHCA’s
allegations in the third amended counterclaim allege that the Prior Board violated HHCA’s
bylaws and the Act. Accordingly, the business judgment rule does not apply, and the grant of
summary judgment in favor of Kim cannot be affirmed on that basis. See Alliance, 2015 IL App
(1st) 150169, ¶ 31 (business judgment rule did not apply where the board’s alleged acts violated
the condominium association’s bylaws); Richard W. McCarthy Trust, 408 Ill. App. 3d at 536-37
(where the plaintiff did not seek to hold the defendant liable for mismanagement but instead to
compel its compliance with the terms of the note, the business judgment rule did not apply).
¶ 38 Kim also claims that the trial court’s grant of summary judgment in his favor on HHCA’s
counterclaim may be affirmed on the basis that the selection of Repair Option 2 was mandated
by law. Kim argues that because the Prior Board was ordered to proceed with Repair Option 2 in
the housing court case, the repairs were mandated by law, thereby releasing the Prior Board from
the requirement to put the special assessment for the repairs to a vote by the unit owners. Kim’s
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contention fails, however, because the allegations against him include allegations that are not
based on the Prior Board’s adoption of Repair Option 2 or its imposition of a special assessment
to finance Repair Option 2. For example, HHCA alleges that Kim advised the Prior Board to not
defend the claims in housing court, caused the entry of the agreed order directing repairs in
accordance with Repair Option 2 for the purpose of claiming that Repair Option 2 was
“mandated by law,” failing to defend the housing court case in accordance with HHCA’s
interests instead of the personal interests of the Prior Board’s members, and advising the Prior
Board to amend the construction contract to provide for a $500,000 penalty if the contract was
terminated by subsequent Boards. These allegations are separate and apart from the Prior
Board’s adoption of Repair Option 2 and the accompanying special assessment and are no less
wrongful even if the Prior Board’s actions were, in fact, mandated by law. Accordingly,
summary judgment in favor of Kim on HHCA’s counterclaim cannot be affirmed on this basis.
¶ 39 Motion to Amend Affirmative Defenses
¶ 40 HHCA next argues that the trial court erred in allowing Kim to amend his affirmative
defenses to include the defense that the Board did not properly authorize HHCA’s participation
in this lawsuit. It is within the trial court’s discretion whether to allow the amendment of
pleadings, and we will not reverse the trial court’s determination in that respect absent an abuse
of discretion. Romito v. City of Chicago, 2019 IL App (1st) 181152, ¶ 21. In this case, HHCA
has failed to demonstrate that the trial court abused its discretion in permitting Kim to amend his
affirmative defenses, because HHCA failed to include in the record on appeal a transcript of the
hearing on Kim’s motion for leave to amend.
“An 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
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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). Here, the order granting Kim leave to amend
his affirmative defenses simply states that his request is granted and does not explain the trial
court’s rationale. Absent a transcript of the proceedings on the motion for leave to amend, we
are unable to evaluate the trial court’s reasoning in permitting Kim to amend his affirmative
defenses. Accordingly, we must presume that the trial court did not err. Romito, 2019 IL App
(1st) 181152, ¶ 24.
¶ 41 Motion to Reopen Discovery
¶ 42 HHCA next argues that the trial court erred in denying its motion to reopen discovery
following Kim’s amendment of his affirmative defenses. “The trial court has broad discretion in
whether or not to reopen discovery, and that decision will not be disturbed absent an abuse of
discretion.” Kic v. Bianucci, 2011 IL App (1st) 100622, ¶ 19. “The amendment of pleadings to
state a new claim after the close of discovery usually requires reopening of discovery.” Paul H.
Schwendener, Inc. v. Larrabee Commons Partners, 338 Ill. App. 3d 19, 32 (2003).
¶ 43 Here, the trial court denied HHCA’s request to reopen discovery on the basis that
multiple discovery extensions had been granted over the course of litigation, the parties had the
opportunity to present and examine witnesses at the June 2018 evidentiary hearings on Kim’s
motion to strike and deem admitted, and the voting issue should have been apparent to HHCA
since it was required to maintain meeting minutes.
¶ 44 We conclude that under the circumstances present here, the trial court abused its
discretion in denying leave to reopen discovery. The last of discovery in this case closed on May
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25, 2018. 3 On May 31, 2018, Kim filed his motion for leave to amend his affirmative defenses
to add the brand new affirmative defense based on the Board’s alleged failure to properly
authorize HHCA’s participation in the suit, and that motion was not granted until June 28, 2018.
Prior to Kim seeking to amend his affirmative defenses, the voting issue was only raised in his
requests for admission, which HHCA objected to on the basis that they were irrelevant because
the voting issue did not relate to any of the pending claims or defenses. When it granted
HHCA’s motion to reconsider the grant of Kim’s motion to strike, the trial court recognized that
the voting issue was irrelevant until the amendment of the affirmative defenses. Accordingly, it
seems fundamentally unfair to permit Kim to raise a brand new affirmative defense after
discovery had closed when HHCA had not had any opportunity or reason to conduct any
discovery on this issue prior to that point. This is especially true where none of the claims or
defenses raised prior to the amendment of the affirmative defenses related to the voting issue.
See Paul H. Schwendener, 338 Ill. App. 3d at 32 (where the trial court permitted the defendant to
add a new claim of fraud to its counterclaim after the close of discovery and the plaintiff did not
previously have the opportunity to conduct discovery on the claim, the trial court abused its
discretion in denying the plaintiff’s request to reopen discovery).
¶ 45 We acknowledge the trial court’s point that multiple extensions of discovery had been
granted during the pendency of this matter. That does not change the fact, however, that HHCA
never had a reason or opportunity to conduct discovery on the voting issue. Although the parties
were able to present and examine witnesses at the evidentiary hearings on Kim’s motion to
strike, those hearings, which occurred after the close of discovery, were no substitute for true
discovery, as HHCA could not blindly call witnesses for the purpose of ascertaining the scope of
3 HHCA contends on appeal that discovery closed on April 30, 2018. Although this was true at one point, on April 25, 2018, the trial court extended oral fact discovery to May 25, 2018. -21- 1-19-0603
their knowledge as it would have been able to do during discovery. Finally, as discussed above,
the meeting minutes are not dispositive of the issue of whether the Board properly authorized
HHCA’s participation in the present suit. Accordingly, HHCA’s ready access to the Board’s
meeting minutes did not mitigate the prejudice caused by allowing Kim to amend his affirmative
defenses without reopening discovery.
¶ 46 The trial court’s denial of HHCA’s motion to reopen discovery is reversed, and the trial
court is directed to permit the parties to conduct reasonable discovery on Kim’s affirmative
defense based on the Board’s alleged failure to properly authorize HHCA’s participation in this
litigation.
¶ 47 Brodsky Affidavit
¶ 48 Finally, HHCA contends that the trial court erred in denying it leave to supplement its
response to Kim’s motion for summary judgment with Brodsky’s affidavit. Because we reverse
the trial court’s grant of summary judgment in favor of Kim on HHCA’s counterclaim even
without the benefit of the Brodsky affidavit, this issue is now moot and we need not address it.
¶ 49 CONCLUSION
¶ 50 For the foregoing reasons, the Circuit Court of Cook County’s judgment is reversed in
part, affirmed in part, and remanded for further proceedings consistent this decision.
¶ 51 Reversed in part, affirmed in part, and remanded.
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