Los Amigos Supermarket, Inc. v. Metropolitan Bank & Trust Co.

306 Ill. App. 3d 115
CourtAppellate Court of Illinois
DecidedJune 17, 1999
DocketNo. 1-96-3118
StatusPublished
Cited by32 cases

This text of 306 Ill. App. 3d 115 (Los Amigos Supermarket, Inc. v. Metropolitan Bank & Trust Co.) 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
Los Amigos Supermarket, Inc. v. Metropolitan Bank & Trust Co., 306 Ill. App. 3d 115 (Ill. Ct. App. 1999).

Opinion

JUSTICE HALL

delivered the opinion of the court:

Following trial, the jury returned a verdict in favor of third-party plaintiff Ernesto A. Avina (Avina) and against third-party defendant Ray O. Rodriguez (Rodriguez), in Avina’s action for fraud. The jury assessed compensatory damages in the amount of $183,024 and punitive damages in the amount of $450,000. Rodriguez filed a posttrial motion seeking, alternatively, a judgment notwithstanding the verdict (judgment n.o.v.), a new trial, or a remittitur of the compensatory and punitive damages. The trial court remitted the punitive damages to $180,000 but denied the remainder of the motion. Rodriguez now appeals. Avina cross-appeals from the trial court’s order directing a finding in favor of Rodriguez on Avina’s negligence claim. We reverse the judgment of the circuit court and remand for a new trial.

This case involves the improved parcel of real estate commonly known as 117-23 North Broadway, Melrose Park, Illinois (the Property), which is held in a land trust of which the Metropolitan Bank and Trust Company (the trustee) is the trustee and Avina is the sole beneficiary. Pursuant to a lease dated August 1, 1985, Los Amigos Supermarket, Inc. (Los Amigos), operated a supermarket on the Property.

In 1990, Los Amigos filed a verified complaint for declaratory judgment and reformation in the chancery division, against the trustee and Avina, seeking to construe the terms of the lease. Avina filed a counterclaim against Los Amigos and Hector and Samuel Porras for a constructive trust and accounting. Hector and Samuel Porras are the brothers-in-law of Rodriguez and the sole shareholders of Los Amigos. Avina also filed a third-party complaint against Rodriguez alleging fraud and negligence. Avina alleged that Rodriguez, his personal attorney, had fraudulently assigned Avina’s interest in Los Amigos to one or both of the Porrases and had prepared a lease allowing Los Amigos to rent the property at a rate substantially below the fair market value. He further alleged that he had paid Rodriguez and Los Amigos sums totalling $125,000 for corporate expenses and inventory.

The chancery division dismissed two counts of Avina’s counterclaim and transferred several others to the law division. The case proceeded to trial on Los Amigos’ complaint and the remaining counts of Avina’s counterclaim. The trial court denied Los Amigos’ requested construction of the lease and denied Avina’s claims for the imposition of a constructive trust and accounting. Avina appealed the trial court’s judgment in that case, and we affirmed. Los Amigos Supermarket, Inc. v. Metropolitan Bank & Trust Co., No. 1—93—0869 (1994) (unpublished order under Supreme Court Rule 23) (hereinafter referred to as Los Amigos I).

In February 1996 the parties proceeded to trial in the law division on Avina’s third amended third-party complaint, which was directed solely against Rodriguez and sought recovery on the basis of fraud and negligence. During the jury trial, it was established that Rodriguez began representing Avina in various legal matters in the mid-1970s. He represented Avina when Avina purchased the Property in 1983 from Edward Mazzei, who was operating a grocery store on the premises. After the purchase, Mazzei continued to operate the grocery store, renting the space from Avina for $4,000 per month until July or August 1985. It is undisputed that in July 1985, Rodriguez prepared articles of incorporation for Los Amigos (the Articles), listing Avina as the corporation’s sole incorporator. It is further undisputed that, in early August 1985, Rodriguez prepared an assignment (the Assignment) transferring Avina’s interest in Los Amigos to Rodriguez’s brother-in-law Hector Porras (Porras). The remainder of the facts are in dispute.

According to Avina, Rodriguez suggested to him that they form a corporation and operate a grocery store on the Property themselves. Rodriguez was to manage the store with the help of his brother-in-law, Porras, and Avina was to provide most of the capital. Avina agreed and put Rodriguez in charge of setting up the corporation. Avina testified that he and Rodriguez were to split 50/50 the profits from Los Amigos and Porras was to receive a salary. Avina also testified that he believed that he was the sole owner of Los Amigos.

Avina denied ever telling Rodriguez that he was no longer interested in owning a grocery store and denied signing the Assignment of his interest in Los Amigos to Porras. He testified that he gave Rodriguez $125,000 in cash for the corporation’s use in three installments between July 1985 and September 1985. Sometime in 1986, Avina gave Rodriguez an additional $30,000 to pay for a sprinkler system for the Property.

Avina testified that toward the end of 1985 he asked Rodriguez for the records from Los Amigos. Rodriguez informed him that the records would not be complete until the following year. When Avina asked for the records in 1986, Rodriguez gave him copies of several inventories and informed Avina that the corporation’s profits were being used to purchase more inventory. In 1987, Avina listed both the Property and Los Amigos for sale. At that time, Avina found out that Rodriguez had listed both the Property and the corporation for sale with another realtor. Avina did not authorize Rodriguez to do so. Avina then obtained the services of another lawyer and subsequently learned that his interest in Los Amigos had been assigned to Porras.

Rodriguez testified that it was Avina’s idea to form a corporation to run a grocery store on the Property. Rodriguez neither suggested that the corporation be formed nor asked to participate in it, but he did tell Avina that Porras might be interested in joining the operation. After Rodriguez prepared and filed the Articles at Avina’s direction, Avina told Rodriguez that he no longer wanted to operate a grocery store. Avina told Rodriguez to prepare an Assignment, assigning all of. Avina’s rights in the Articles to Porras. Rodriguez prepared the Assignment, presented it to Avina for signature, and when Avina returned it, Rodriguez gave it to Porras.

In early August 1985 Rodriguez opened a checking account for Los Amigos. He was a signatory on the account, as was Porras. Rodriguez testified that Avina gave him money on several occasions and that at least some of that money was deposited in the Los Amigos account. Rodriguez testified that all of the money given to him by Avina was for repairs to the Property, which Avina had asked Rodriguez to oversee. Rodriguez testified that the total amount of money given to him by Avina for repairs was $90,000 to $97,000, rather than $125,000 as Avina had testified. Rodriguez testified that he had prepared a list summarizing the repairs made to the property using Anna’s money. According to Rodriguez, the repairs totalled $92,853.56. Rodriguez acknowledged that from the money Avina gave him, Los Amigos paid $15,000 as a membership fee to Certified Grocers. According to Rodriguez, he told Avina that he had used some of the money for that purpose and Avina told him to “help [the Forrases] out so that they could get started as soon as possible.” Avina denied this.

Rodriguez testified that sometime around August 28, 1985, he attended the first shareholders meeting of Los Amigos, at which he and the Forrases appointed themselves directors of Los Amigos. Avina was not present at the meeting.

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Bluebook (online)
306 Ill. App. 3d 115, Counsel Stack Legal Research, https://law.counselstack.com/opinion/los-amigos-supermarket-inc-v-metropolitan-bank-trust-co-illappct-1999.