Ovnik v. Podolskey

2017 IL App (1st) 162987
CourtAppellate Court of Illinois
DecidedSeptember 1, 2017
Docket1-16-2987
StatusUnpublished
Cited by3 cases

This text of 2017 IL App (1st) 162987 (Ovnik v. Podolskey) 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.

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Ovnik v. Podolskey, 2017 IL App (1st) 162987 (Ill. Ct. App. 2017).

Opinion

2017 IL App (1st) 162987

SIXTH DIVISION Opinion filed: September 1, 2017

No. 1-16-2987

______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

FIRST DISTRICT ______________________________________________________________________________

JOHN OVNIK, KIMBERLEE OVNIK, and ) Appeal from the CHICAGO MUSIC WORKS, INC. d/b/a Deaf Dog ) Circuit Court of Music, ) Cook County ) Plaintiffs-Appellees, ) ) v. ) No. 13 L 12989 ) GALINA PODOLSKEY and VADIM GOSHKO, ) Honorable ) Patrick J. Sherlock, Defendants-Appellants. ) Judge, Presiding. ______________________________________________________________________________

PRESIDING JUSTICE HOFFMAN delivered the judgment of the court, with opinion. Justice Rochford concurred in the judgment and opinion. Justice Delort specially concurred, with opinion.

OPINION

¶1 The defendants, Galina Podolskey (Galina) and Vadim Goshko (Vadim), appeal from

various orders entered by the circuit court in the instant action brought by the plaintiffs, John

Ovnik (John), Kimberlee Ovnik (Kimberlee) (collectively, the Ovniks), and Chicago Music

Works, Inc. d/b/a Deaf Dog Music (CMW), seeking damages by reason of the defendants’

failure to return the security deposit posted with them in connection with the rental of a

townhouse plus penalties, interest, attorney fees, and costs under the Chicago Residential No. 1-16-2987

Landlord and Tenant Ordinance (RLTO) (Chicago Municipal Code § 5-12-010 et seq. (amended

Mar. 31, 2004)). On appeal, the defendants contend, inter alia, that the circuit court erred by:

denying, in whole or in part, three motions to dismiss that they brought pursuant to section 2-619

of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2014)); and granting summary

judgment in Kimberlee’s favor. For the reasons that follow, we reverse the summary judgment

entered by the circuit court and remand the matter for further proceedings consistent with this

opinion.

¶2 The following factual recitation is derived from the pleadings and exhibits of record.

¶3 In May 2009, the defendants, as the lessors, entered into a two-year lease agreement to

lease a townhouse located at 1816 South Indiana Avenue in Chicago. The lease agreement stated

that it was “for a private dwelling” and included a copy of the RLTO. The named lessee was

CMW and John, CMW’s sole shareholder, was a guarantor. Although Kimberlee paid the

$6,375 security deposit with a personal check (the 2009 security deposit), the lease agreement

stated that “[l]essee has deposited with [l]essor the security deposit” and that, upon termination

of the lease agreement, the security deposit “shall be returned to [l]essee, including interest[ ]

***.” In October 2010, CMW fell behind on its rent payments due under the lease. On

November 12, 2010, John sent a text message to Galina, stating that she could deduct October’s

rent from the 2009 security deposit and that he was “not concerned with earning interest on the

deposit.”

¶4 The lease agreement was renewed for another two-year term beginning in June 2011.

The renewal lease agreement listed both CMW and John as tenants and required an additional

security deposit of $6,757.50, which CMW paid (the 2011 supplemental security deposit), for a

total security deposit of $13,132.50 (the combined security deposit). In May 2013, at the end of

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the two-year renewal lease term, the townhouse was vacated, but the defendants refused to return

the combined security deposit.

¶5 On November 14, 2013, the Ovniks filed the instant action seeking to recover the

combined security deposit plus penalties, interest, attorney fees, and costs under sections 5-12-

080(f)(1) and 5-12-180 of the RLTO (Chicago Municipal Code §§ 5-12-080(f)(1) (amended July

28, 2010), 5-12-180 (amended Nov. 6, 1991)).

¶6 On August 11, 2014, the defendants filed a motion pursuant to section 2-619 of the Code

to dismiss that portion of the plaintiffs’ complaint seeking interest, penalties, attorney fees, and

costs, alleging that John waived the plaintiffs’ right to “any interest” on the combined security

deposit. In her affidavit filed in support of the defendants’ motion, Galina attested that she did

not pay interest on the security deposit due to the text message she received from John on

November 12, 2010. The Ovniks filed a response and attached an affidavit from John, who

claimed that Galina offered to return the combined security deposit with interest if he and

Kimberlee signed a release agreement when they vacated the townhouse. The circuit court

denied the defendants’ motion to dismiss, finding that the plaintiffs could not, as a matter of law,

waive their right to interest and were, therefore, not estopped from raising a claim for interest.

¶7 A three-count second amended complaint was subsequently filed by John, Kimberlee,

and CMW, alleging that the defendants: (1) failed to return the combined security deposit (count

I); failed to pay interest on the security deposit from June 1, 2011, to May 31, 2012 (count II);

and failed to pay interest on the security deposit from June 1, 2012, to May 29, 2013 (count III).

The same attorney represented both CMW and the Ovniks.

¶8 On April 20, 2015, the defendants filed a motion to dismiss the second amended

complaint pursuant to section 2-619 of the Code, arguing that the RLTO does not apply to

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corporate entities such as CMW, and the plaintiffs, therefore, lacked standing to bring a claim

under the RLTO. They asserted that the Ovniks were not parties to the lease agreements and that

it was CMW that paid both security deposits. The defendants supported their motion with copies

of CMW’s rent checks.

¶9 On June 3, 2015, the circuit court granted the defendants’ motion in part. Although the

circuit court held that the RLTO applied to all three plaintiffs, it, nevertheless, dismissed the

Ovniks as party-plaintiffs for lack of standing based upon its finding that they had not paid any

security deposit. The circuit court denied the motion as to CMW.

¶ 10 On June 10, 2015, the defendants filed their answer to the second amended complaint

along with their affirmative defenses and a four-count counterclaim. In their affirmative

defenses, the defendants again asserted that the RLTO did not apply to corporate lessees and

that John had waived interest on the security deposit in his November 12, 2010, text message.

¶ 11 On July 2, 2015, the Ovniks filed a motion to reconsider the circuit court’s order

dismissing them as plaintiffs. They argued that, contrary to the court’s factual determination,

Kimberlee had paid the 2009 security deposit. In support of their motion was Kimberlee’s

affidavit and a copy of a check from her bank account in the amount of $6,375, payable to

Vadim.

¶ 12 On July 16, 2015, before the circuit court ruled on the Ovniks’ motion to reconsider, the

matter proceeded to mandatory arbitration on CMW’s claims against the defendants. In its

Statement of the Case filed in the arbitration proceeding, CMW stated that it sought “the amount

of the security deposit ($13,132[.]50),” plus penalties, interest, and attorneys fees, and it listed

Kimberlee and John as witnesses. On July 20, 2015, following the arbitration hearing, the

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Ovnik v. Podolskey
2017 IL App (1st) 162987 (Appellate Court of Illinois, 2017)

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