Sianis v. Sayeed

2020 IL App (1st) 191777-U
CourtAppellate Court of Illinois
DecidedDecember 22, 2020
Docket1-19-1777
StatusUnpublished
Cited by1 cases

This text of 2020 IL App (1st) 191777-U (Sianis v. Sayeed) 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
Sianis v. Sayeed, 2020 IL App (1st) 191777-U (Ill. Ct. App. 2020).

Opinion

2020 IL App (1st) 191777-U No. 1-19-1777 Second Division December 22, 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 DISTRICT ____________________________________________________________________________

GEORGE SIANIS and SPYRIDON ) Appeal from the THEODORAKIS, ) Circuit Court of ) Cook County. Plaintiffs-Appellants, ) ) v. ) No. 14 CH 09961 ) ASIF SAYEED, Individually and as President ) of Vital Home & Healthcare Incorporated, an ) Illinois Corporation, ) Honorable ) Patrick J. Sherlock Defendant-Appellee. ) Judge, presiding. ____________________________________________________________________________

JUSTICE COBBS delivered the judgment of the court. Presiding Justice Fitzgerald Smith and Justice Lavin concurred in the judgment.

ORDER

¶1 Held: Reversed and remanded. The circuit court erred in granting summary judgment where defendant waived his statute of limitations defense by filing a counterclaim.

¶2 Plaintiffs, George Sianis and Spyridon Theodorakis, appeal from the circuit court’s orders

granting summary judgment in favor of defendant, Asif Sayeed and denying their motion to

reconsider and leave to file a fourth amended complaint. On appeal, plaintiffs argue that the circuit No. 1-19-1777

court erred in granting summary judgment for defendant on the basis that their claim for dilution

of shares was barred by the statute of limitations. Plaintiffs also contend that defendant waived the

statute of limitations defense by filing a counterclaim. Plaintiffs further assert that the circuit court

improperly denied their motion to reconsider and for leave to file a fourth amended complaint. For

the reasons that follow, we reverse and remand.

¶3 I. BACKGROUND

¶4 Plaintiffs own stock in Vital Home & Healthcare, Inc. (Vital), an Illinois corporation that

provides home healthcare services. On or about November 1, 1997, pursuant to a stock purchase

agreement, plaintiffs sold 90% of their shares in Vital to First American Group, Inc. (First

American), a corporation wholly-owned by defendant. As a result of the sale, defendant became a

majority shareholder in Vital. 1 Plaintiffs became minority shareholders, with each plaintiff

retaining 5% ownership of Vital’s shares.

¶5 On June 19, 2003, Donald J. Kindwald, counsel for Vital, sent a notice to plaintiffs

informing them that defendant had made a cash infusion of $942,907 to Vital. Plaintiffs received

the letter on or around that date. The letter stated that defendant “was forced to make [this] capital

contribution” so that Vital “could remain as a viable and functioning entity” during the previous

business year. Given that Vital was “unable to reimburse [defendant],” Kindwald instructed that

plaintiffs had two options. The first option was for plaintiffs to each reimburse “$47,145.35 for a

total of $94,290.70” to defendant. The second option was to hold a special shareholders’ meeting

for the purpose of issuing additional shares of stock to defendant to compensate him for the capital

contribution, thereby diluting plaintiffs’ ownership interests.

1 Along with being Vital’s majority shareholder, defendant also served as its President.

-2- No. 1-19-1777

¶6 On September 4, 2003, a special meeting of shareholders was held. Minutes from the

meeting showed that plaintiffs were not present in person, but “notice was given to them on August

22, 2003 by both regular and certified mail.” By vote of the shareholders present, an additional

235,727 shares of the corporation were issued to the defendant in return for his capital contribution.

On September 27, 2004, Vital filed its “Articles of Amendment” with the Illinois Secretary of

State, which reflected issuance of these additional shares and a “paid-in capital” increase from

$1,000 to $943,907. A “Cumulative Report of Changes in Issued Shares and in Paid-In Capital”

was also filed with the Illinois Secretary of State and reflected the same changes as the Articles of

Amendment.

¶7 On June 13, 2014, plaintiffs filed a complaint (First Complaint) against defendant and Vital

seeking to “compel examination of corporate records and equitable accounting.” Plaintiffs alleged

that they “made this request because they have not seen any corporate records for [Vital] or been

provided with any notices from [defendant] since the original date of sale [of the stocks]” and

because of “[d]efendant’s claim that [plaintiffs] own a fraction of a percent rather than their

combined 10% (5% respectively) of the shares that they actually own in the corporation.”

Additionally, plaintiffs sought an “equitable accounting,” arguing that such relief was necessary

as defendant and Vital refused plaintiffs’ requests for access to the corporate financial records and

because defendant “breached his fiduciary duties towards the [plaintiffs] by failing to distribute

monies[,] *** paying their share of those monies to him or others not entitled to the shares, and

purportedly diluting their ownership interest without notice or justification.”

¶8 Relevant to this appeal, however, is plaintiff’s third amended complaint which was filed

on March 7, 2017 and sought judgment against defendant in the amount of $50,000, plus punitive

damages and costs. Unlike the first complaint, the third amended complaint solely alleged breaches

-3- No. 1-19-1777

of fiduciary duty by defendant, 2 including, inter alia, failing to fully account for Vital’s profits,

failing to distribute profits, paying “excessive and unreasonable salaries, bonuses, rents[,]” and

management fees to himself and others, unilaterally modifying or diluting plaintiffs’ ownership

interests without notice, creating various competing entities, and misappropriating corporate

opportunities.

¶9 On May 11, 2017, defendant answered the complaint. On November 14, 2018, the circuit

court granted defendant’s motion for leave to file affirmative defenses and a counterclaim. That

same day, defendant filed his affirmative defenses asserting that plaintiffs’ claims were barred

under the doctrine of laches and the statute of limitations. Defendant also filed a counterclaim,

asserting that he was entitled to a “set-off of all monies he contributed, whether as a capital

contribution or as a loan to Vital in excess of monies contributed by the [p]laintiffs, individually

or in the aggregate, to Vital since [defendant] became a shareholder.” Plaintiffs moved to dismiss

defendant’s affirmative defenses and counterclaim.

¶ 10 On March 5, 2019, the circuit court entered an order: (1) denying plaintiffs’ motion to

dismiss the affirmative defense of statute of limitations pursuant to section 2-619 of the Illinois

Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2018)); (2) granting plaintiffs’ motion

to dismiss the affirmative defense of laches pursuant to section 2-619 of the Code, with leave to

replead; and (3) granting plaintiffs’ motion to dismiss the counterclaim for a set-off pursuant to

section 2-615 of the Code (735 ILCS 5/2-615 (West 2018)). That same day, the circuit court

entered a case management order providing a completion date for discovery and depositions.

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