Vega v. Harroun

2020 IL App (3d) 180659-U

• Court: Appellate Court of Illinois
• Decided: April 17, 2020
• Docket: 3-18-0659
• Status: Unpublished

Opinion

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).

2020 IL App (3d) 180659-U

Order filed April 17, 2020 ____________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

FIDEL VEGA, ) Appeal from the Circuit Court ) of the 21st Judicial Circuit, Plaintiff-Appellant, ) Iroquois County, Illinois. ) v. ) Appeal No. 3-18-0659 ) Circuit No. 12-CH-87 ) MICHAEL J. HARROUN, ) Honorable ) James B. Kinzer, Defendant-Appellee. ) Judge, Presiding. ____________________________________________________________________________

JUSTICE O’BRIEN delivered the judgment of the court. Justices Holdridge and Schmidt concurred in the judgment. ____________________________________________________________________________

ORDER

¶1 Held: The dismissal of plaintiff’s complaint alleging a joint venture to purchase and renovate houses with the defendant was reversed because the plaintiff sufficiently alleged the joint venture pursuant to an oral agreement.

¶2 The plaintiff appealed from the dismissal of his complaint seeking a declaration of a joint

venture, an accounting, and a declaration of ouster by the defendant.

¶3 FACTS ¶4 The plaintiff, Fidel Vega, filed a complaint against the defendant, Michael Harroun,

alleging that they jointly owned 51 properties and seeking a partition and accounting of the

properties. Thereafter, the plaintiff filed an amended complaint and, after some discovery, a second

amended complaint. The second amended complaint alleged that the plaintiff and the defendant

had engaged in a joint venture since 1991 whereby they orally agreed to purchase various

residential properties for the purpose of investment. The plaintiff sought a declaration as to the

parties’ rights regarding 40 listed properties and an accounting of the net profits.

¶5 The second amended complaint was dismissed on the defendant’s motion, on the basis that

a joint venture was not sufficiently pled. The plaintiff filed a third amended complaint, which

contained two counts. The first count alleged a joint venture and sought declaratory relief, alleging

that the plaintiff and the defendant had entered into an oral agreement to purchase properties for

the purpose of investment starting in January 1991. The parties worked together to locate and

finance properties and had agreed to share the net profits equally and to reinvest the income to

purchase additional properties. The plaintiff listed 36 properties that were purchased pursuant to

the agreement between 1991 and July 2003. As of October 30, 2004, all but nine of the properties

had been sold. The plaintiff alleged that on October 30, 2004, the plaintiff and the defendant

entered into a written agreement regarding eight of those properties; that agreement was attached

to the second amended complaint. The October 30 agreement states that the parties equally owned

the eight properties. The third amended complaint further alleged that the plaintiff and the

defendant purchased an additional property on November 2, 2005, which was sold on January 17,

2008. The plaintiff alleged that the joint venture was continuing because two of the properties had

not been sold—one was a rental property and the buyer on the other had defaulted on the

installment contract. Further, the plaintiff alleged that the defendant had paid him profits but

2 refused to account to the plaintiff for the plaintiff’s just share and interest in the rents and profits

of the properties described in the third amended complaint. The plaintiff sought a declaratory

judgment that the plaintiff and the defendant owned the two remaining properties equally and an

accounting for the net profits on all the listed properties. The second count of the third amended

complaint sought a declaration of ouster, contending that the defendant ousted the plaintiff from

the storage unit that was on one of the properties subject to the October 30 agreement.

¶6 The defendant filed a motion to dismiss pursuant to section 2-615 of the Code of Civil

Procedure (the Code) (735 ILCS 5/2-615 (West 2016)), which was denied. The defendant then

filed another motion to dismiss, seeking to dismiss count I pursuant to section 2-619 of the Code

(735 ILCS 5/2-619 (West 2016)), contending that the allegations of the complaint did not support

the existence of a joint venture, the oral agreement for a joint venture was barred by the statute of

frauds, a prior lawsuit acted as res judicata, and the parties’ 2004 written agreement acted as an

estoppel. The defendant stated in his affidavit that he had paid the plaintiff his share of the net

proceeds with regard to both properties. The plaintiff’s affidavit stated that the October 30

agreement only concerned the properties that the joint venture had not yet sold, since those

properties were still titled only in the defendant’s name. The defendant also sought summary

judgment on count II pursuant to section 2-1005 of the Code (735 ILCS 5/2-1005 (West 2016)),

contending that the locks in the parties’ jointly-owned building at 206 E. Grant had never been

changed and that the key remained in the business that used to be their partnership office for their

auto business.

¶7 The trial court entered an order that dismissed the third amended complaint in its entirety,

with prejudice. The court found that the third amended complaint was neither plain nor concise

and failed to plead facts sufficient to support a claim for the existence of an oral agreement for a

3 joint venture. The trial court found that the October 2004 agreement did not support the plaintiff’s

claim of an oral agreement, but rather supported the concept of estoppel and the statute of

limitations. The court denied the plaintiff’s oral motion to amend his complaint. The trial court did

not specifically rule on the defendant’s motion for summary judgment. The plaintiff appealed.

¶8 ANALYSIS

¶9 The plaintiff contends that he sufficiently alleged facts to establish the existence of an oral

agreement to enter into a joint venture to buy and sell real estate for profit. The defendant contends

that the trial court correctly ruled that the third amended complaint failed to allege such a joint

venture. The defendant contends that his business association with the plaintiff terminated when

they entered into a settlement agreement regarding their auto business in 2009.

¶ 10 A section 2-615 motion to dismiss attacks the legal sufficiency of the complaint; it does

not raise affirmative factual defenses, but alleges only defects appearing on the face of the

complaint. Chandler v. Illinois Central R.R. Co., 207 Ill. 2d 331, 348 (2003). A motion to dismiss

pursuant to section 2-619 of the Code admits the legal sufficiency of the plaintiffs’ complaint, but

asserts an affirmative defense or other matter that avoids or defeats the plaintiffs’ claim. DeLuna

v. Burciaga, 223 Ill. 2d 49, 59 (2006). We review de novo a ruling on a motion to dismiss. Id.

¶ 11 A joint venture is an association of two or more persons to carry out a single enterprise for

profit. In re Johnson, 133 Ill. 2d 516, 526 (1989). The existence of a joint venture may be inferred

from the facts and circumstances demonstrating that the parties in fact entered into a joint venture.

O’Brien v. Cacciatore, 227 Ill. App. 3d 836, 843 (1992). In determining whether a joint venture

exists, the intent of the parties is the most significant element. Id. The elements to be considered

in determining the parties’ intent are: (1) an express or implied agreement to carry on an enterprise;

(2) a manifestation of intent by the parties to be associated as joint venturers; (3) a joint interest as

4 reflected in the contribution of property, finances, effort, skill or knowledge by each party to the

joint venture; (4) a measure of proprietorship or joint control of the enterprise; and (5) a provision

for the sharing of profits or losses. Id. In the absence of any of these elements, there is no joint

venture. Id.

¶ 12 The trial court found that the plaintiff’s third amended complaint failed to plead facts

sufficient to support the claim of an oral agreement. The trial court also noted that the October 30,

2004, written agreement supported the defendant’s claim of estoppel because it led the defendant

to believe all claims between the parties had been settled on that date. This claim was disposed of

on a motion to dismiss, not a bench trial or summary judgment. Whether or not a joint venture

exists is usually a question for the trier of fact. Ambuul v. Swanson, 162 Ill. App. 3d 1065, 1070

(1987). In Ambuul, the appellate court upheld a trial court’s judgment that two parties had entered

into a joint venture to rehabilitate an old building and share equally in the profits. Id. The court

found no abuse of discretion in the trial court’s factual determination that there was a joint venture

based on the oral agreement between the parties. Id.

¶ 13 The plaintiff’s third amended complaint sufficiently alleges an on-going joint venture to

acquire properties and split the profits for 36 properties acquired before 2004 and the additional

property purchased in 2005. The third amended complaint alleged that the parties entered into an

oral agreement in approximately January 1991 to carry on an enterprise of buying and selling real

estate for profit and the parties purchased their first property at that time. The complaint further

alleges that some profits have been distributed to the plaintiff, but the defendant has refused to

account to the plaintiff for the plaintiff’s just share and interest in the rents and profits. The plaintiff

then alleges that the parties purchased an additional property in November 2005. The October 30

written agreement provided that the eight properties were owned by the parties equally and the net

5 profits shared equally. There is at least a factual question whether the written agreement on October

30, 2004, modified the prior oral agreement. See id. at 1068 (written agreement did not modify the

terms of the oral agreement). Thus, we reverse the order granting the defendant’s motion to dismiss

count I.

¶ 14 The plaintiff contends that the trial court erred in granting summary judgment on count II,

the ouster claim, arguing that there was a genuine issue of material fact regarding whether the

defendant changed the locks to the property located at 206 E. Grant and whether the plaintiff had

access to the key. The defendant contended that the locks had never been changed and the key was

located in the former business office that the defendant had retained upon the dissolution of the

parties’ auto business. The trial court dismissed the claim without comment.

¶ 15 Summary judgment is appropriate when there are no genuine issues of material fact and

the moving party is entitled to judgment as a matter of law. Outboard Marine Corp. v. Liberty

Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992). We review de novo summary judgment rulings.

Id.

¶ 16 The plaintiff alleged in his complaint that he had been ousted from 206 E. Grant, which is

referenced in the October 30 agreement. The defendant responds with an affidavit that does not

deny that they both own the property, but states that the locks have not been changed and the key

remains in its usual place. There is at least a genuine issue of material fact whether the plaintiff

has access to that key, which is located in a property now owned solely by the defendant. Thus,

we reverse the dismissal of count II.

¶ 17 Since we have found that count I of the third amended complaint was sufficient to survive

a motion to dismiss, and count II survived the motion for summary judgment, we do not address

6 the plaintiff’s contention that the trial court abused its discretion in denying his oral motion to file

a fourth amended complaint.

¶ 18 CONCLUSION

¶ 19 The judgment of the circuit court of Iroquois County is reversed.

¶ 20 Reversed and remanded.