McGrath v. Botsford

938 N.E.2d 589, 405 Ill. App. 3d 781, 345 Ill. Dec. 150, 2010 Ill. App. LEXIS 1185
CourtAppellate Court of Illinois
DecidedNovember 5, 2010
Docket2-09-0235
StatusPublished
Cited by8 cases

This text of 938 N.E.2d 589 (McGrath v. Botsford) 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
McGrath v. Botsford, 938 N.E.2d 589, 405 Ill. App. 3d 781, 345 Ill. Dec. 150, 2010 Ill. App. LEXIS 1185 (Ill. Ct. App. 2010).

Opinion

JUSTICE SCHOSTOK

delivered the opinion of the court:

This case involves a lawsuit between two people who once sought to do business together. During the pendency of the suit, the defendant, Stephen F. Botsford, served the plaintiff, Christopher J. McGrath, with a request for admissions of fact pursuant to Supreme Court Rule 216 (134 Ill. 2d R. 216). McGrath failed to respond within 28 days. Six months later, McGrath sought, and the trial granted, leave to file late responses to the request for admissions. McGrath then denied all of the facts set forth in the request for admissions. In deposition and at trial years later, however, McGrath admitted many of these facts. Ultimately, following a bench trial, the trial court ruled in Botsford’s favor. Botsford then filed a motion pursuant to Supreme Court Rule 219(b) (210 Ill. 2d R. 219(b)) for an award of reasonable expenses, including attorney fees, in connection with McGrath’s wrongful denials of facts contained in the request for admissions. The trial court denied the motion and, after McGrath appealed the judgment, Botsford cross-appealed the denial of his Rule 219(b) motion. McGrath’s appeal was dismissed for want of prosecution, and thus, the cross-appeal is the sole issue before us. Botsford argues that the trial court abused its discretion when it denied his motion for reasonable expenses, including attorney fees. We reverse and remand.

The events giving rise to this appeal are as follows. In February 2001, McGrath, while employed by Insurance Auto Auctions (IAA), referred a potential land acquisition, the Laurel Canyon Project (the Project), to Botsford. In April 2001, McGrath and Botsford met in Botsford’s home to discuss the possibility of a joint venture to explore various real estate opportunities in California, including the Project. There were no specific terms of agreement discussed at this meeting. Between April 2001 and October 2001, McGrath and Botsford made three trips together to California. During this time, no written partnership agreement was demanded or drafted by either party. In July 2001, Turnberry Financial Group, Ltd., a company wholly owned by Botsford, executed a letter agreement with the owner of the Laurel Canyon property in regard to the proposed acquisition of the property. The letter agreement allowed Turnberry to assign its rights under the agreement to a newly formed limited liability corporation to be named Laurel Canyon Holdings (LCH). As of October 2001, Botsford was the only member of LCH.

In October 2001, Botsford prepared a draft operating agreement for LCH, which proposed a 51% ownership interest for Botsford and a 49% interest for McGrath. On November 28, 2001, McGrath expressly rejected the terms of the proposed agreement and countered with a proposal for 50%-50% ownership. On December 5, 2001, the parties met at a restaurant to discuss the terms of the operating agreement, and both agreed to accept a 51%-49% ownership structure. They memorialized their agreement on a loose piece of paper with notes on it, signed by both. Thereafter, the parties continued to communicate in their efforts to write up their agreement. Botsford wrote McGrath, and McGrath struck out portions of the letter and made additions. On December 9, 2001, Botsford instructed his attorney to make revisions to the proposed operating agreement. On January 2, 2002, Botsford sent a letter to McGrath with another draft of the operating agreement, retaining the 51%-49% ownership distribution and including other terms. Although McGrath forwarded this draft to his attorney and Botsford then incorporated the changes into a revised draft, on January 12, 2002, McGrath rejected the revised draft and proposed his own changes. The parties subsequently had a telephone conversation in which McGrath advised Botsford that he did not agree with the final language proposed by Botsford. Botsford responded by advising McGrath that negotiations regarding the operating agreement were at an end and that any future relationship with McGrath would be in the form of a consulting agreement. McGrath rejected such a consulting role, and there were no further attempted agreements.

On March 6, 2002, McGrath filed suit against Botsford in the circuit court of Cook County, seeking a declaration that a contract existed between Botsford and McGrath with respect to the Project and that Botsford and McGrath had agreed to form a partnership pursuant to which each would own 50% of the Project. On February 21, 2003, the action was transferred to the circuit court of Du Page County.

On October 6, 2003, Botsford served McGrath with various items of written discovery, including a request to admit facts pursuant to Rule 216, which contained 29 statements (the Request). The statements that are relevant to this appeal include the following:

“3. That discussions regarding the Laurel Canyon Project were initiated in or before February of 2001.

4. That discussions regarding the Laurel Canyon Project were initiated before the formation of the alleged partnership between you and Botsford.

# # #

9. That you were employed by Insurance Auto Auctions at the time that Defendant was negotiating for the purchase of the property constituting the Laurel Canyon Project.

***

11. That your consulting job with Insurance Auto Auctions was terminated in September of 2001.

12. That the first drafts of Operating Agreements for Laurel Canyon Holdings, LLC and Sun Valley Holdings, LLC were first drafted in late October of 2001.

13. That such first drafts of the Operating Agreements proposed a 51% ownership interest by Defendant Botsford and 49% ownership interest by you.

14. That you sent a letter via e-mail to Defendant Botsford on November 28, 2001 wherein you rejected the terms of the first drafts of the Operating Agreements, proposing instead that you be given a 50% ownership interest.

15. That Defendant Botsford sent you a letter dated December 5, 2001 wherein Defendant Botsford rejected your proposal of a 50% ownership interest and restated that you were being offered only a 49% ownership interest.

16. That Defendant Botsford sent a second draft of the proposed Operating Agreement for Laurel Canyon Holdings, LLC to you via e-mail on January 2, 2002.

17. That such second draft of the Operating Agreement for Laurel Canyon, LLC again proposed a 51% ownership interest by Defendant Botsford and 49% ownership interest by you.

18. That you sent a letter to Defendant Botsford via e-mail on January 12, 2002 rejecting the second draft of the Operating Agreement for Laurel Canyon Holdings, LLC and proposing instead the terms set forth in the draft Operating Agreement attached to your e-mail.

19. That Defendant Botsford informed you via telephone on January 16, 2002 that he was no longer interested in negotiating the Operating Agreements pursuant to which you would be a member of Sun Valley Holdings, LLC and Laurel Canyon Holdings, LLC and that any relationship with you would be in the form of a consulting agreement.

* * *

25.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Grudecki v. Young
2025 IL App (2d) 240551-U (Appellate Court of Illinois, 2025)
Victoria Entertainment Properties, LLC v. Phoenix Steps, LLC
2024 IL App (1st) 231916-U (Appellate Court of Illinois, 2024)
Cassavoy v. Haayer
2021 IL App (2d) 190809-U (Appellate Court of Illinois, 2021)
Cavitt v. Repel
2015 IL App (1st) 133382 (Appellate Court of Illinois, 2015)
Fraser v. Jackson
2014 IL App (2d) 130283 (Appellate Court of Illinois, 2014)

Cite This Page — Counsel Stack

Bluebook (online)
938 N.E.2d 589, 405 Ill. App. 3d 781, 345 Ill. Dec. 150, 2010 Ill. App. LEXIS 1185, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcgrath-v-botsford-illappct-2010.