River Breeze, LLC v. Granholm

2022 IL App (2d) 210704, 224 N.E.3d 233

• Court: Appellate Court of Illinois
• Decided: December 1, 2022
• Docket: 2-21-0704
• Status: Published

Opinion

2022 IL App (2d) 210704 No. 2-21-0704 Opinion filed December 1, 2022 ______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT ______________________________________________________________________________

RIVER BREEZE, LLC, In Its Individual ) Appeal from the Circuit Court Capacity and Derivatively on Behalf of Aurora ) of Kane County. Downtown, ) ) Plaintiff-Appellant, ) ) v. ) No. 20-CH-376 ) KIM GRANHOLM, GINA SALAMONE, ) and AURORA DOWNTOWN, ) Honorable ) Kevin T. Busch, Defendants-Appellees. ) Judge, Presiding. ______________________________________________________________________________

JUSTICE SCHOSTOK delivered the judgment of the court, with opinion. Presiding Justice Brennan and Justice Hudson concurred in the judgment and opinion.

OPINION

¶1 The plaintiff, River Breeze, LLC, brought suit both on its own behalf and on behalf of

Aurora Downtown, a not-for-profit organization of which it is a member, against the defendants

Kim Granholm and Gina Salamone, who are directors of Aurora Downtown, and against Aurora

Downtown itself. Counts I and II of the amended complaint sought the removal of Granholm and

Salamone from the board pursuant to the General Not for Profit Corporation Act of 1986 (Act)

(805 ILCS 105/108.35 (West 2016)). Count III alleged that Aurora Downtown violated the

Freedom of Information Act (FOIA) (5 ILCS 140/11 (West 2016)). The trial court dismissed the

complaint, and the plaintiff appeals that dismissal. We vacate the trial court’s dismissal and remand

for further proceedings. 2022 IL App (2d) 210704

¶2 I. BACKGROUND

¶3 The following facts are drawn largely from the amended complaint’s allegations, which

we accept as true to consider whether the trial court correctly dismissed the complaint. See Bryson

v. News America Publications, Inc., 174 Ill. 2d 77, 86 (1996).

¶4 The City of Aurora created Special Service Area Number One (SSA No. 1), permitting it

to levy taxes on property owners within that area to provide for the economic benefit of the area,

a business district in Aurora. Aurora Downtown is a not-for-profit corporation organized under the

Act. The complaint alleges that “Aurora Downtown was created pursuant to the SSA No. 1 and,

through its elected Board of Directors, *** is charged with utilizing the SSA No. 1 tax revenue in

order to advise the City of Aurora” on combatting community deterioration, improving and

redeveloping the SSA, and aiding businesses within the SSA. The complaint further alleges that

“SSA No. 1 specifically identifies Aurora Downtown as an agency of the City of Aurora,” that

Aurora Downtown has openly acknowledged that it serves as an advisory body to the city, and that

Aurora Downtown derives all of its powers from the city and must seek the city’s approval for its

projects and actions. Aurora Downtown has an appointed FOIA officer to respond to FOIA

requests and has previously responded to such requests. The plaintiff is a limited liability company

that owns three parcels within the SSA. As a property owner of such parcels, the plaintiff is

required to pay special taxes and is a member of Aurora Downtown.

¶5 During the relevant time, Granholm served as a director on the board of Aurora Downtown

and as the board chair. Salamone was another director. The organization’s by-laws required it to

hold an annual meeting and choose directors in December. Although some directors were required

to be drawn from designated organizations (e.g., the public library, the convention and visitors’

bureau), members could nominate and vote upon the other directors. The board chair was charged

with preparing ballots for the election and making them available to members before the annual

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meeting. Members were required to return their completed ballots to the chair five days before the

annual meeting. Under section 5.8 of the by-laws, the chair could appoint one or more inspectors

to

“ascertain and report the number of votes represented at the meeting, based on their

determination of the validity and effect of proxies; count all votes and report the results;

and do such other acts as are proper to conduct the election and voting with impartiality

and fairness to all the Members.”

The report of the votes and election results was required to be in writing and signed either by the

inspector or, if there was more than one, by a majority of them.

¶6 The plaintiff alleged that, in preparation for the 2017 annual meeting, Granholm prepared

the ballots and distributed them with the instruction that they must be returned by 5 p.m. on

December 1, 2017. Granholm then began counting the ballots in the presence of Salamone and the

manager of Aurora Downtown. Granholm had not formally appointed the latter two as inspectors.

The plaintiff alleged that all three “shared a common hostility towards certain Members” and

“intended to ‘block’ those Members’ nominations [sic] for Director.” Thus, the plaintiff alleged,

the presence of these hostile noninspectors was improper and cast doubt on the integrity of the

election. Granholm later announced the outcome of the election. No certification of the votes was

made.

¶7 On January 31, 2018, Daniel Hites, the sole managing member of the plaintiff, submitted

a FOIA request to Aurora Downtown, seeking—among other things—copies of all nominating

petitions, the ballots (redacted as to all information except the actual vote), the voter signature and

parcel number section of each ballot (redacted as to the actual vote), and all e-mails, letters,

documents, and minutes relating to the 2017 election. In response, Granholm stated that 41 ballots

were counted and 2 rejected, and 35 ballots were unavailable for inspection. Granholm also stated

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that the ballots were counted by unnamed “appointed inspectors,” although she did not produce

any written report of such inspectors. Granholm included with her response an altered section of

the by-laws that “redacted key portions.” The plaintiff alleged that she did so with the intent to

deceive and to induce the plaintiff to rely on her false representations.

¶8 The plaintiff submitted additional FOIA requests, and Granholm responded to the second

one. No response was made to the third request. Salamone, signing herself as Aurora Downtown’s

FOIA officer, responded to the fourth and fifth requests.

¶9 The plaintiff alleged that the responses to the FOIA requests “revealed additional

irregularities in the 2017 election process.” The complaint alleged that, on information and belief,

Granholm accepted and counted invalid ballots, accepted and counted ballots after the December

1, 2017, deadline, allowed certain members to vote twice, and (either herself or with others) altered

or forged nine ballots. The complaint also alleged that Salamone participated in some or all of

Granholm’s misconduct. This misconduct constituted a breach of Granholm’s and Salamone’s

fiduciary duty as directors, and was “detrimental to Aurora Downtown because it *** damaged

the fairness, impartiality, and integrity of Aurora Downtown’s elections” as well as public

confidence in the city and its agencies. Further, on information and belief, this misconduct had

jeopardized Aurora Downtown’s financing and contract with the city.

¶ 10 Citing section 108.35(d) of the Act, count I sought the removal of Granholm from the

board, and count II sought Salamone’s removal. Section 108.35(d) provides that a circuit court

may remove directors of not-for-profit corporations

“in a proceeding commenced either by the corporation or by members entitled to vote

holding at least 10 percent of the outstanding votes of any class if the courts finds (1) the

director is engaged in fraudulent or dishonest conduct or has grossly abused his or her

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position to the detriment of the corporation, and (2) removal is in the best interest of the

corporation.” 805 ILCS 105/108.35(d) (West 2016).

Section 108.35(d) further provides that, “[i]f such a proceeding is commenced by a member

entitled to vote, such member shall make the corporation a party defendant.” Id.

¶ 11 Count III asserted that Aurora Downtown’s FOIA responses were incomplete and, in some

instances, falsified, which violated FOIA and demonstrated bad faith. The plaintiff sought the

assessment of a statutory civil penalty for this bad faith and to recover its attorney fees and costs.

¶ 12 The defendants filed a combined motion to dismiss the amended complaint pursuant to

section 2-619.1 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2020)). The

motion argued that, as to counts I and II, the complaint did not state a claim because the allegations

of fraudulent conduct by Granholm and Salamone were insufficiently pled and the complaint did

not adequately plead any actual detriment to Aurora Downtown arising from their conduct. As to

count III, the motion contended that Aurora Downtown could not be considered a “public body”

required to respond to FOIA requests because it was an “independent” body organized as a not-

for-profit corporation under the Act. As relevant here, the motion also argued that the plaintiff was

required to identify the documents it believed the defendants were wrongfully withholding.

¶ 13 The plaintiff responded that, given Granholm’s and Salamone’s fiduciary duties toward

Aurora Downtown and its members, it had adequately pled grounds for their removal under the

Act. It also argued that Aurora Downtown met the legal test to determine whether an organization

is considered a subsidiary “public body” under the Act and disputed that FOIA required the

complaint to identify the documents that the plaintiff believed still had not been produced. In their

reply, the defendants repeated their earlier arguments and added a new argument—that counts I

and II were moot because they alleged wrongdoing only in connection with the 2017 election, but

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there were three annual board elections since 2017 where Granholm and Salamone were reelected

.

¶ 14 The trial court issued its ruling on November 2, 2021, after hearing oral argument. No

transcript of the hearing is included in the record on appeal, but the order entered that day contains

some of the trial court’s reasoning. Rather than ruling on the arguments raised and briefed by the

parties, the trial court dismissed counts I and II on the basis that the plaintiff lacked standing to

bring those counts because section 108.35 did not permit the plaintiff to bring a derivative claim

on behalf of the members of Aurora Downtown seeking to remove Granholm and Salamone and

the plaintiff had failed to plead that it held at least 10% of the outstanding votes of any class, “as

required by” section 108.35. Although the trial court purported to dismiss counts I and II without

prejudice, the order made clear that the trial court would again dismiss those counts unless the

plaintiff could plead that it held a voting interest equal to 10% of the outstanding votes—a fact

that the plaintiff admitted it could not plead. As to count III, the trial court dismissed it with

prejudice, finding that Aurora Downtown was not a “subsidiary body” of the City of Aurora and

thus was not subject to FOIA. This appeal followed.

¶ 15 II. ANALYSIS

¶ 16 On appeal, the plaintiff argues that the trial court erred in dismissing counts I and II because

the Act does not bar bringing a derivative suit to remove a director and those counts were

sufficiently pled. It also contends that Aurora Downtown is, in fact, a “subsidiary body” subject to

FOIA. Before addressing these arguments, we pause to consider our own jurisdiction to hear this

appeal.

¶ 17 A. Jurisdiction to Review the Dismissal of Counts I and II

¶ 18 Although none of the parties questions our jurisdiction over the issues raised in this appeal,

a reviewing court has a duty to consider sua sponte whether it has jurisdiction and to dismiss an

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appeal (or a portion of an appeal) if it lacks jurisdiction. Lebron v. Gottlieb Memorial Hospital,

237 Ill. 2d 217, 251-52 (2010). Here, the trial court’s order purported to dismiss counts I and II

“without prejudice,” allowing the plaintiff 28 days to replead those counts. A dismissal without

prejudice generally is not a reviewable final order but rather is an interim order that may become

final if the plaintiff fails to file an amended pleading or if the issue is finally resolved in some other

manner. See In re V.S., 2022 IL App (2d) 210667, ¶ 16. As the plaintiff elected to stand on its

complaint and appeal rather than replead counts I and II, the dismissal became final and we have

jurisdiction to review it. 1 Id.

¶ 19 Although the defendants do not dispute our jurisdiction to hear the appeal from the

dismissal of counts I and II, they contend that, because the plaintiff lacked standing under the Act

to seek their removal from the board, the trial court itself lacked the power to hear those claims at

all. This argument borders on the frivolous, as it is based on the concept of limited statutory

jurisdiction, which has been defunct for 20 years. As we noted in Nationstar Mortgage, LLC v.

Canale, 2014 IL App (2d) 130676, ¶ 12, the supreme court rejected this concept in Belleville

Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325 (2002). The supreme court

explained that, although this view of limited statutory jurisdiction was correct under the old

1 We note that jurisdiction would also exist because the trial court’s dismissal of counts I

and II is more properly categorized as a dismissal based on an affirmative defense under section

2-619 of the Code (735 ILCS 5/2-619 (West 2020)), not a dismissal for failure to state a claim I under section 2-615 of the Code (id. § 2-615). The trial court dismissed counts I and II on the basis

that the plaintiff lacked standing to bring them. Lack of standing to bring an action is an affirmative

defense (Lebron, 237 Ill. 2d at 252), and thus a plaintiff generally need not plead that it has

standing.

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constitution of 1870, “under our present constitution, ‘[w]ith the exception of the circuit court’s

power to review administrative action, which is conferred by statute, a circuit court’s subject matter

jurisdiction is conferred entirely by our state constitution.’ ” Canale, 2014 IL App (2d) 130676,

¶ 12 (quoting Belleville Toyota, 199 Ill. 2d at 334). Because a circuit court’s jurisdiction now

extends to all “justiciable matters” (Ill. Const. 1970, art. VI, § 9), a complaint need not demonstrate

perfect compliance with all statutory prerequisites; it need only present a justiciable matter.

Canale, 2014 IL App (2d) 130676, ¶¶ 12-15. This justiciability requirement is met so long as “the

alleged claim falls within the general class of cases that the court has the inherent power to hear

and determine.” In re Luis R., 239 Ill. 2d 295, 301 (2010).

¶ 20 Here, there is no dispute that the complaint sought the removal of directors under the Act

or that the trial court had the power to consider and resolve such claims. (The defendants argue

only that the plaintiff was not a proper party to bring such claims.) Thus, the complaint raised a

justiciable matter, and the trial court had jurisdiction over counts I and II. See Canale, 2014 IL

App (2d) 130676, ¶ 18 (foreclosure complaint raised a justiciable matter despite failing to allege

the plaintiff’s interest in the mortgage as required by the foreclosure statute). We therefore reject

the defendants’ argument that the plaintiff’s purported lack of standing under the Act affected the

trial court’s jurisdiction and turn to the substance of that standing issue.

¶ 21 B. Dismissal of Counts I and II—Standing Under the Act

¶ 22 When we review the dismissal of claims, we are guided by certain standards. Although the

defendants’ motion to dismiss raised arguments under both section 2-615 (attacking the sufficiency

of the complaint) and section 2-619 of the Code (raising certain affirmative defenses), the trial

court based its dismissal solely on the latter arguments, finding that affirmative defenses barred

the plaintiff’s claims. Further, on appeal, the defendants do not argue that the allegations of the

complaint were insufficient to state a claim. Thus, we apply the standards for evaluating a dismissal

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under section 2-619. A section 2-619 motion to dismiss assumes the allegations of the complaint

are true but asserts an affirmative defense or other matter that would defeat the plaintiff’s claim as

a matter of law. 735 ILCS 5/2-619 (West 2020); Nielsen-Massey Vanillas, Inc., v. City of

Waukegan, 276 Ill. App. 3d 146, 151 (1995). Such a motion admits well-pleaded facts but does

not admit conclusions of law and conclusory factual allegations unsupported by allegations of

specific facts alleged in the complaint. Better Government Ass’n v. Illinois High School Ass’n

[IHSA], 2017 IL 121124, ¶ 21. We review the dismissal of a complaint under section 2-619

de novo. Wallace v. Smyth, 203 Ill. 2d 441, 447 (2002).

¶ 23 The issue of whether the plaintiff had standing under the Act to seek the removal of

Granholm and Salamone as directors of Aurora Downtown requires us to interpret that statute. In

construing a statute, our task is to “ascertain and give effect to the legislature’s intent.” Lieb v.

Judges’ Retirement System, 314 Ill. App. 3d 87, 92 (2000). The best indicator of the legislature’s

intent is the plain language of the statute. Lee v. John Deere Insurance Co., 208 Ill. 2d 38, 43

(2003). “When the statute’s language is clear, it will be given effect without resort to other aids of

statutory construction.” Id. “One of the fundamental principles of statutory construction is to view

all provisions of an enactment as a whole,” and thus “words and phrases must be interpreted in

light of other relevant provisions of the statute.” J.S.A. v. M.H., 224 Ill. 2d 182, 197 (2007). “A

court may also consider the reason for the statute, the problems it seeks to remedy, the purposes to

be achieved, and the consequences of interpreting the statute one way or another.” Sperl v. Henry,

2018 IL 123132, ¶ 23.

¶ 24 Under section 108.35(d) of the Act, an action to remove the director of a not-for-profit

corporation may be brought “either by the corporation or by members entitled to vote holding at

least 10 percent of the outstanding votes of any class.” 805 ILCS 105/108.35(d) (West 2016). The

plaintiff concedes that it does not hold at least 10% of the members’ votes, so it may only proceed

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if it is suing “by the corporation.” The plaintiff posits that, by bringing a derivative suit on behalf

of all the members of Aurora Downtown, it has asserted a claim “by” the corporation. This position

is supported by the common understanding of the term “by,” as one of the definitions of that term

is “on behalf of.” Merriam-Webster Online Dictionary, https://www.merriam-

webster.com/dictionary/by (last visited Nov. 18, 2022) [https://perma.cc/QA5M-VVUJ].

¶ 25 The defendants argue that a derivative action is not an action “by the corporation.”

However, the only authority they cite to support that argument is Goldberg v. Astor Plaza

Condominium Ass’n, 2012 IL App (1st) 110620, ¶ 53, which does not say anything of the kind.

Rather, Goldberg notes that a derivative suit is “ ‘one of the remedies which equity designed for

those situations where the management through fraud, neglect of duty or other cause declines to

take the proper and necessary steps to assert the rights which the corporation has’ ” (id. ¶ 52

(quoting Meyer v. Fleming, 327 U.S. 161, 167 (1946)), and that such a suit is “based upon the

corporate right that was allegedly violated” (id. ¶ 53). Goldberg supports the conclusion that, as

derivative suits are brought on behalf of the corporation to vindicate its rights, they are effectively

suits by the corporation.

¶ 26 The plaintiff’s position is also buttressed by the fact that a different provision of the Act

expressly permits the voting members of not-for-profit corporations to bring derivative suits just

as they were able to do at common law, stating that “[n]othing in this Act shall be construed to

affect any pre-existing common law right of a voting member to bring an action *** in the right

of such corporation.” 805 ILCS 105/107.80 (West 2016). The defendants argue that, by including

language in section 108.35 that members can only seek the removal of directors if they hold more

than 10% of the votes, the legislature meant to preclude members holding fewer votes from

bringing derivative suits to remove directors. Citing the maxim that when there is a conflict

between statutory provisions, the more specific provision should be applied, the defendants argue

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that, although section 107.80 protects members’ general right to bring derivative suits, section

108.35 is a more specific provision that restricts that right—or at least restricts the remedies

available in a derivative suit, which should not include the removal of directors.

¶ 27 This is a misreading of section 108.35. The legislature did not restrict the ability to sue for

removal of directors to only those members holding more than 10% of the votes, it also permitted

such actions to be brought “by the corporation”—a term that, as we have discussed, includes

derivative actions. Thus, the plain language of the statute permits the filing of such actions either

as derivative suits or by members on their own behalf, if the plaintiff members hold more than

10% of the votes. We note that the Business Corporation Act of 1983 has a similar provision stating

that suits to remove corporate directors can be brought either by the corporation or by shareholders

of a corporation holding at least 10% of the outstanding shares of any class. 805 ILCS 5/8.35(b)

(West 2016). While derivative suits by shareholders/members seeking to remove directors are rare,

they exist. See, e.g., Weis v. E.&G. Weis Farms, Inc., 2019 IL App (5th) 108503-U, ¶ 12 (minority

shareholder of for-profit corporation filed action seeking removal of directors, among other relief).

¶ 28 The plaintiff here could not bring suit to remove Granholm and Salamone on its own behalf

because it does not hold 10% of the votes. But nothing in the Act precluded it from filing a

derivative action to remove them. Accordingly, the trial court erred in concluding otherwise. 2

2 We also note that the trial court proceeded unwisely by basing its decision on an issue

that, so far as we can tell, it raised sua sponte at the hearing. Neither party had previously raised

or briefed the issue of whether the Act permits derivative suits to remove directors. Such

excursions into matters not raised or briefed by the parties run the risk of transforming a court from

an arbiter to an advocate (see People v. Rodriguez, 336 Ill. App. 3d 1, 14 (2002)), and may violate

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¶ 29 C. Dismissal of Counts I and II—Mootness

¶ 30 The defendants next argue that, even if the trial court’s determination that the Act did not

permit derivative suits was erroneous, we should uphold the trial court’s dismissal of counts I and

II because those claims are moot. They contend that, because there were three annual board

elections since 2017 as to which the plaintiff alleged no wrongdoing, and Granholm and Salamone

were reelected to the board each time, the claims seeking removal of those directors are moot. The

defendants fail to show that this is so, however.

¶ 31 “An appeal is moot if ‘no actual controversy exists or if events have occurred that make it

impossible for the reviewing court to grant the complaining party effectual relief.’ ” In re Marriage

of Eckersall, 2015 IL 117922, ¶ 9 (quoting In re Marriage of Peters-Farrell, 216 Ill. 2d 287, 291

(2005)). But the defendants have not cited a single legal authority suggesting that the passage of

time, or the fact of reelection in and of itself, makes it impossible for the court to order the removal

of directors pursuant to section 108.35. This lack of reasoned argument or pertinent legal authority

would justify our finding their argument forfeited. Ill. S. Ct. R. 341(h)(7) (eff. Jan. 1, 2016) (where

a party does not offer any argument or meaningful authority in support of that argument, the

argument is forfeited); People ex rel. Illinois Department of Labor v. E.R.H. Enterprises, Inc.,

2013 IL 115106, ¶ 56 (same). Even if it were not forfeited, though, their argument has no merit.

¶ 32 Section 108.35 of the Act provides that a court may order the removal of a board director

if the trial court finds that “(1) the director is engaged in fraudulent or dishonest conduct or has

grossly abused his or her position to the detriment of the corporation, and (2) removal is in the best

the parties’ due process rights to notice and an opportunity to be heard on the issues forming the

basis for decision (see Oak Grove Jubilee Center, Inc. v. City of Genoa, 347 Ill. App. 3d 973, 978-

79 (2004)).

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interest of the corporation.” 805 ILCS 105/108.35(d) (West 2016). Nothing in this section restricts

the court’s power to grant these remedies if the directors were reelected after their alleged

misconduct. Thus, we may not read such a limitation into the Act. J.S.A., 224 Ill. 2d at 197 (“[w]e

will not depart from the plain language of a statute by reading into it exceptions, limitations or

conditions that conflict with the express legislative intent”). Nor does a common-sense reading of

the statute require such a limitation. We can easily imagine that directors could take actions that

were such a betrayal of their fiduciary duties toward the corporation that their continuing fitness

to serve as directors could be justifiably questioned, despite their reelection by members who may

or may not have known of that misconduct.

¶ 33 For all of these reasons, we reject the defendants’ arguments regarding counts I and II. We

vacate the dismissal of counts I and II and remand for further proceedings.

¶ 34 D. Dismissal of Count III—“Subsidiary Body”

¶ 35 The trial court dismissed count III—the plaintiff’s claim that the defendants violated

FOIA—on the basis that Aurora Downtown was not a “subsidiary body” of a public body and thus

was not within the scope of FOIA. But the trial court lacked sufficient evidence at this stage for

this factual finding and its determination was premature. Accordingly, its dismissal of count III

cannot stand.

¶ 36 The legislature enacted FOIA to ensure that “[e]ach public body shall make available to

any person for inspection or copying all public records.” 5 ILCS 140/3(a) (West 2016). As defined

in FOIA, “public body” includes the following categories relevant here: “all legislative, executive,

administrative, or advisory bodies of *** cities *** and all other municipal corporations, boards,

bureaus, committees, or commissions of this State, [and] any subsidiary bodies of any of the

foregoing including but not limited to committees and subcommittees thereof.” Id. § 2(a). The

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plaintiff does not contend that Aurora Downtown falls within one of the enumerated bodies of

government, instead asserting that it is a “subsidiary body” of the City of Aurora.

¶ 37 A “subsidiary body” may be either public or private. Our supreme court has adopted the

following factors for determining whether a private entity is a “subsidiary body”: “(1) the extent

to which the entity has a legal existence independent of government resolution, (2) the degree of

government control exerted over the entity, (3) the extent to which the entity is publicly funded,

and (4) the nature of the functions performed by the entity.” IHSA, 2017 IL 121124, ¶ 26. The

supreme court continued, “We emphasize that no single factor is determinative or conclusive, but

as the definition indicates, the key distinguishing factors are government creation and control.” Id.

¶ 38 The determination of whether a particular organization is a subsidiary body turns on the

evidence presented with respect to each factor. See id. ¶ 34 (“whether a private entity could be

deemed a subsidiary body under the FOIA requires a case-by-case consideration” of the four

factors). Such a factual inquiry generally should not be resolved at the pleading stage, where the

facts alleged in the complaint and any affirmative defenses have not yet been proven. This appeal

is an example of the problems created by proceeding in the absence of sufficient evidence.

¶ 39 In its complaint, the plaintiff alleges that “Aurora Downtown was created pursuant to the

SSA No. 1,” a special taxing district created by Aurora city ordinance, and “is charged with

utilizing the SSA No. 1 tax revenue.” The complaint further alleges that

“SSA No. 1 specifically identifies Aurora Downtown as an agency of the City of Aurora,

and at all relevant times Aurora Downtown openly acknowledged it operate[s] as an

advisory body to the City of Aurora with the purpose of implementing the projects of the

City as laid out in the SSA No. 1.”

Finally, the complaint alleges that “Aurora Downtown derives all of its powers from the City of

Aurora, must seek the City’s approval for its projects and endeavors and is ultimately controlled

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by the City.” If proven, these allegations would establish facts supporting the conclusion that

Aurora Downtown is a subsidiary body subject to FOIA.3

¶ 40 The defendants object that the plaintiff “has presented no evidence or ordinance to

demonstrate” that its allegations are true. This misconstrues the plaintiff’s burden at this point,

however. Discovery has not yet occurred in this case. The trial court dismissed the FOIA claim

pursuant to section 2-619 of the Code (735 ILCS 5/2-619 (West 2020)). When considering a

motion to dismiss brought under that section, we must assume that well-pleaded allegations of fact

in the complaint are true, although we do not make the same assumption about conclusions of law

or conclusory factual allegations unsupported by allegations of specific facts alleged in the

complaint. IHSA, 2017 IL 121124, ¶ 21. The complaint here alleges specific facts, however, and

thus—at this pleading stage of the proceedings—we must take them as true, even if the plaintiff

has not presented evidence to back them up. In line with the reality that determining whether a

private body is a subsidiary body under FOIA is fact-dependent, the relevant case law reveals that

far more evidence was considered in those cases than was presented here. See, e.g., id. ¶ 11 (parties

presented not only organization’s governing documents but also detailed affidavit testimony of its

executive director and pertinent previous legal opinions concerning the nature of the organization);

Rushton v. Department of Corrections, 2019 IL 124552 (decided on summary judgment rather

than at the pleading stage); Chicago Tribune v. College of Du Page, 2017 IL App (2d) 160274

(same); Board of Regents of the Regency University System v. Reynard, 292 Ill. App. 3d 968 (1997)

(appeal following bench trial); Hopf v. Topcorp, Inc., 256 Ill. App. 3d 887 (1993) (appeal of

summary judgment); Rockford Newspapers, Inc. v. Northern Illinois Council on Alcoholism &

Drug Dependence, 64 Ill. App. 3d 94 (1978) (appeal of summary judgment). Cf. Better

3 Of course, we are not making such a determination here.

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Government Ass’n v. Metropolitan Pier & Exposition Authority, No. 126790 (Ill. Mar. 24, 2021)

(supervisory order) (vacating the appellate court decision and directing the appellate court to

remand the case to the circuit court “to develop the evidentiary record necessary for a fact specific

inquiry” relating to coverage of a document request under FOIA). The trial court erred in

attempting to determine whether Aurora Downtown qualifies as a subsidiary body at the pleading

stage and on the sparse record presented.

¶ 41 The defendants argue that Aurora Downtown has an independent legal identity, as it is a

duly organized private not-for-profit corporation. But this fact alone cannot establish that it is not

a subsidiary body under FOIA. See, e.g., College of Du Page, 2017 IL App (2d) 160274, ¶ 50

(private not-for-profit corporation was performing a governmental function on behalf of a public

body and thus was subject to FOIA). As this fact is not dispositive, it cannot justify the trial court’s

entry of judgment on count III. The defendants also assert that the plaintiff was required to identify

the specific documents to which it was denied access, but they fail to cite any pertinent legal

authority and thus have forfeited this argument. We vacate the dismissal of count III and remand

for further proceedings.

¶ 42 III. CONCLUSION

¶ 43 The judgment of the circuit court of Kane County is vacated and the cause is remanded for

further proceedings consistent with this opinion.

¶ 44 Vacated and remanded.

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River Breeze, LLC v. Granholm, 2022 IL App (2d) 210704

Decision Under Review: Appeal from the Circuit Court of Kane County, No. 20-CH-376; the Hon. Kevin T. Busch, Judge, presiding.

Attorneys Colin W. Anderson, of Anderson & Uddin, P.C., of Aurora, for for appellant. Appellant:

Attorneys Elizabeth M. Bartolucci, of O’Hagan Meyer LLC, of Chicago, for for appellees. Appellee:

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