September 2024 IICLE FLASHPOINTS

The discussion below focuses on a condominium association where the owners are at odds with each other, but also where no one monitored the fact that the condominium declaration violated updated provisions of the Condominium Property Act. The unit owners are left at the end of the case with an entirely unmanageable piece of property.

Facts

The plaintiff’s limited liability company and its manager sued two owners of a condominium unit, Jorge and Juan Alvarez, to specifically enforce a contract entered into with the condominium association. Gunnison Commons, LLC v. Alvarez, 2024 IL App (1st) 232176. The trial court entered summary judgment, on cross-motions, for the two defendant unit owners, and the appellate court affirmed. 2024 IL App (1st) 232176 at ¶1. The plaintiff LLC owned 31 of the 32 units in the condominium property, with a percentage ownership interest of more than 96 percent. 2024 IL App (1st) 232176 at ¶4. None of the unit owners reside on the property. Id.

In December 2019, the manager of the association sent written notice to all unit owners of a special meeting to amend the declaration to reduce the voting requirement from the sale of the building from 100 percent to 85 percent. 2024 IL App (1st) 232176 at ¶5. The notice was addressed to only one of the defendant unit owners. The defendants did not attend the meeting, and the amendment passed with more than a 96 percent favorable vote. Id. Later that month at another special meeting, the LLC’s manager’s contract proposal to purchase the condominium building was approved with a more than 96-percent favorable vote. Id. Specific enforcement litigation ensued after the defendants refused to close on the sale of their unit. 2024 IL App (1st) 232176 at ¶7. The defendants’ affirmative defenses were as follows: (a) the special meetings held in December 2019 were invalid because notice was mailed to one of the two by regular mail, but no notice was mailed to the second unit owner; and (b) the LLC manager could not be the association’s president because the condominium declaration provided that “each member of the Board shall be one of the Unit Owners and shall reside on the Property.” 2024 IL App (1st) 232176 at ¶8.

The declaration required notices to be mailed to all voting members either personally or by registered or certified mail. 2024 IL App (1st) 232176 at ¶10. The notices of the meetings were sent by regular first-class mail to Jorge at the unit, but not to Juan. Neither Jorge nor Juan ever provided a designation to the association of who was the voting member. The trial court found the notices ineffective because the notices should have been addressed to both unit owners. 2024 IL App (1st) 232176 at ¶11.

The plaintiffs argued that the declaration prohibition against serving on the board unless the unit owner resided on the property violated §18 of the Condominium Property Act, 765 ILCS 605/18, because it created two classes of membership. Furthermore, the provision would mean that no one could sit on the board and, therefore, administer the association. 2024 IL App (1st) 232176 at ¶12. The trial court rejected this argument, stating that the Act does not prohibit an association imposing stricter requirements to serve on a board. Id. Regarding rendering management of the association impossible, the trial court held that the residency requirement did not prevent the existence of a board and the declaration could have been amended to change the residency requirement. 2024 IL App (1st) 232176 at ¶13. The trial court also found that the amendment to the declaration recorded after the special meetings was invalid because the declaration prohibited changing the voting requirements under the declaration, “except as authorized by other provisions of the declaration or the Act.” Id.

Analysis

At this point, readers knowledgeable about the Act are likely saying: “Wait! Isn’t there a provision in the Act capping at less than 100 percent the percentage of unit owners required to amend a declaration?” After all, it is unlikely an association could achieve 100-percent agreement on anything, and you would be correct. Section 27(a) of the Condominium Property Act was amended years ago to provide such a limitation on the percentage of owners required to amend a declaration. “If there is any unit owner other than the developer, and unless otherwise provided in the Act, the condominium instruments shall be amended only as follows: (i) upon the affirmative vote of 2/3 of those voting or upon the majority specified by the condominium instruments, provided that in no event shall the condominium instruments require more than a three-quarters vote of all unit owners.” 765 ILCS 605/27(a).

The appellate court began its opinion with a discussion about the appellant-plaintiff’s opening brief, which contained toward its conclusion an argument as to why the appellate court should not exercise forfeiture. The appellate court noted the difference between waiver — which is a voluntary relinquishment of a known right — and forfeiture — which is the failure to make a timely assertion of that right. 2024 IL App (1st) 232176 at ¶23. The appellate court declined to consider either of the two arguments the plaintiffs did not raise until appeal, namely (a) newly disclosed allegations as to when the plaintiffs first learned of Juan’s ownership interest in the unit, and (b) what the court calls new §27(a) legal theories. 2024 IL App (1st) 232176 at ¶22. Presumably, the new legal theories were about how the declarations voting requirements to amend the declaration violated the Act. The appellate court declined to “relax” the forfeiture rule. 2024 IL App (1st) 232176 at ¶24. The net result is that the trial court and appellate both decided at least a substantive part of this case, especially regarding §27(a) of the Act, based on a condominium declaration that was facially in violation of the Act.

Regarding the question of notice to the unit owners, the appellate court affirmed the trial court. Although notices of the special meetings were addressed to “All Unit Owners,” the notice was mailed only to Jorge. There was no dispute in the record that Juan never received notice. 2024 IL App (1st) 232176 at ¶30.

Similarly, the appellate court affirmed the trial court in holding that the amendment to the declaration changing the voting requirement for sale of the property did not satisfy the 100-percent affirmative vote required by the declaration. Furthermore, the court held that the LLC manager was precluded from serving as board president because he did not reside on the property. 2024 IL App (1st) 232176 at ¶31. As to the argument that residency requirements to serve on the board create two classes of membership, the appellate court noted that the plaintiffs cited no authority for the proposition that this provision violated the prohibition against creating more than one class of membership under §18(b)(2) of the Act. The court then went further to say that it disagreed with the contention, but it is unclear what is the court’s reasoning for its disagreement. Id. The next paragraph of the opinion references §4.1(b) of the Act which provides for resolving conflicts among the condominium instruments with the Act. 2024 IL App (1st) 232176 at ¶32. Perhaps this is the basis for the appellate court’s conclusion regarding the residency requirement.

Finally, one question that the appellate court left unresolved is that regarding the residency requirement for serving on the board, coupled with the obligation to be a unit owner, the association is left in an existential void. If no unit owner may serve on the board because of the residency requirement, then no one may fulfill the statutory obligation to administer the property and no one can call a meeting to amend the declaration to fix any problems relating to the declaration that clearly (based on the court’s opinion) violated the Act. Furthermore, no one can collect assessments, perform maintenance on the common elements, or do anything required on a regular basis to manage real property. Perhaps the trial court would have better served equity and justice by ordering a judicial sale of the property.

For more information about condominium law, see CONDOMINIUM LAW: DAILY OPERATION CHALLENGES (IICLE^®, 2024). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

Kenneth Michaels, Jr., Bauch & Michaels, LLC, Chicago

Kenneth A. Michaels, Jr. is a partner at Bauch & Michaels, LLC, with over four decades of experience in commercial litigation, transactions, and corporate governance. He represents a diverse clientele, including banks, insurance companies, and Fortune 500 businesses, specializing in asset sales, property management, and loan agreements. Ken is also a recognized Illinois “Super Lawyer” in real property law and has contributed extensively to legal education and community service. He teaches at the University of Illinois Chicago Law School and has been a public official in Illinois for nearly 30 years.

In People v. Gardner, 2024 IL App (4th) 230443, the Fourth District Appellate Court held that the state established the defendant caused his girlfriend, Terriona White, to be unavailable as a witness and as a result the state could present her hearsay statements under the forfeiture-by-wrongdoing hearsay exception.

In Gardner, the defendant was charged with possession of a stolen vehicle and unlawful use of weapons by a felon. Police responded to White’s apartment after the defendant sent her threatening messages because she had hidden his gun clip. 2024 IL App (4th) 230443 at ¶¶1, 5.

The officer’s bodycam recorded his conversation with White. White told the officer that the defendant had stolen the plates to a GMC truck that was parked outside. White said that the defendant’s aunt told her the defendant had stolen the plates and put them on the GMC truck. 2024 IL App (4th) 230443 at ¶6.

The defendant made several phone calls from jail to White asking her to recant and state that the gun belonged to her. White refused this demand on the phone calls and told the defendant that she did not want to be charged with obstruction of justice or a gun offense. 2024 IL App (4th) 230443 at ¶10.

The defendant posted bond, and the no-contact provision was removed after a hearing. The state was unable to serve White with a subpoena despite 27 attempts by the sheriff’s office. The state’s motion in limine to allow some of White’s statements to the officer was granted under the forfeiture-by-wrongdoing exception. 2024 IL App (4th) 230443 at ¶¶11 – 12.

The officer testified at trial that White told him she believed that the vehicle was stolen and had fictitious plates. 2024 IL App (4th) 230443 at ¶15. The defendant was convicted of all charges. 2024 IL App (4th) 230443 at ¶17.

The appellate court affirmed the trial court’s ruling on White’s testimony coming in under the forfeiture-by-wrongdoing exception. Illinois Rule of Evidence 804(b)(5) states that a statement is not hearsay if it is “[a] statement offered against a party that has engaged or acquiesced in wrongdoing that was intended to, and did, procure the unavailability of the declarant as a witness.” The state must prove this by a preponderance of the evidence. 2024 IL App (4th) 230443 at ¶22.

The appellate court rejected the defendant’s argument that there was no evidence that White was afraid of him and therefore the state failed to show he engaged in wrongdoing. The appellate court stated the state needed to show only that the defendant engaged in witness tampering or some type of conduct designed to thwart the judicial process. The state was not required to prove that the defendant secured the witness’s absence through threats or intimidation. 2024 IL App (4th) 230443 at ¶25.

The appellate court emphasized that the defendant repeatedly asked White to testify differently than what she believed was the truth despite bond conditions that forbade him from contacting her. The appellate court stated that “[v]iolating a bond condition to encourage a witness to perjure herself is exactly the type of conduct that the forfeiture by wrongdoing exception is intended to remedy.” 2024 IL App (4th) 230443 at ¶26.

The appellate court next rejected the defendant’s argument that the state failed to prove that his actions were intended to cause White’s unavailability. The appellate court noted that the state was required to show only that the defendant’s wrongdoing “was motivated ‘at least in part’ by an intent to prevent her from testifying.” 2024 IL App (4th) 230443 at ¶28.

The appellate court next concluded that the state circumstantially proved that the defendant caused White’s unavailability. The defendant discouraged her in the jail calls from testifying to what she believed was the truth, namely that the gun belonged to the defendant. 2024 IL App (4th) 230443 at ¶33.

The appellate court also disagreed with the defendant’s contention that there was no evidence that he explicitly instructed White to evade service because the state was not required to prove that he caused her to take any particular action to become unavailable. The state had to show merely that he procured her unavailability as a witness. 2024 IL App (4th) 230443 at ¶35.

For more information about criminal law, see CRIMINAL RECORDS: EXPUNGEMENT AND OTHER RELIEF (IICLE^®, 2024). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

Matthew R. Leisten, Ogle County State’s Attorney’s Office, Oregon, IL

Matthew R. Leisten serves as the First Assistant State’s Attorney for the Ogle County State’s Attorney’s Office in Oregon, Illinois. In his role, he provides essential updates on caselaw relevant to search warrants, focusing on issues such as good faith, staleness, and the impact of modern technology on legal procedures. His expertise includes handling complex warrants involving advanced technologies like geofences and Triggerfish. Additionally, Leisten contributes to legal education through publications and presentations, ensuring that attorneys stay informed about current legal trends and practices.

On August 9, 2024, House Bill 5561 was signed into law as P.A. 103-0867, which made substantive changes to the Whistleblower Act, 740 ILCS 174, et seq., beginning January 1, 2025. The Whistleblower Act first took effect on January 1, 2004, with amendments made in 2008, 2009, and 2011. The changes made by P.A. 103-0867 apply to claims arising or complaints filed on or after January 1, 2025. The key changes are summarized below.

1. P.A. 103-0867 added a definition for “adverse action” to mean “an action that a reasonable employee would find materially adverse. An action is materially adverse when it could dissuade a reasonable worker from disclosing or threatening to disclose information protected by Section 15 or from refusing under Section 20.” P.A. 103-0867, §5. Section 15 pertains to certain types of disclosures made by employees. Section 20 pertains to a refusal to participate in certain activities.

2. P.A. 103-0867 added a definition for “retaliatory action” to mean “an adverse employment action or the threat of an adverse employment action by an employer or his or her agent to penalize or any non-employment action that would dissuade a reasonable worker from disclosing information under the Act.” It further states that a "retaliatory action" includes, but is not limited to:

[a.] taking, or threatening to take, any action that would intentionally interfere with an employee’s ability to obtain future employment or post-termination retaliation to intentionally interfere with a former employee’s employment;

[b.] taking, or threatening to take, any action prohibited by subsection (G) of Section 2-102 of the Illinois Human Rights Act, which pertains to immigration related practices; or

[c.] contacting, or threatening to contact, United States immigration authorities, or otherwise reporting, or threatening to report, an employee’s suspected or actual citizenship or immigration status or the suspected or actual citizenship or immigration status of an employee’s family or household member to a federal, state, or local agency [unless the employer is otherwise required to make a report]. Id.

3. P.A. 103-0867 changed the definition of “employee” to include any individual “permitted to work” by an employer, unless the individual is what appears to be a kind of super-independent contractor:

[a.] the individual has been and will continue to be free from control and direction over the performance of his or her work, both under his or her contract of service with his or her employer and in fact;

[b.] the individual performs work which is either outside the usual course of business or is performed outside all of the places of business of the employer unless the employer is in the business of contracting with parties for the placement of employees; and

[c.] the individual is in an independently established trade, occupation, profession, or business. Id.

4. P.A. 103-0867 expanded an employee’s protected activity to include when an employee discloses or threatens to disclose information “related to an activity, policy, or practice of the employer where the employee has a good faith belief that the activity, policy, or practice (i) violates a State or federal law, rule, or regulation or (ii) poses a substantial and specific danger to employees, public health, or safety." P.A. 103-0867, §15.

The section on retaliation for protected disclosures was also expanded to include disclosures to supervisors and board members, not just courts, administrative hearings, or other legal proceedings. Id.

5. P.A. 103-0867 expanded the relief available to an employee if a violation is found to include injunctive relief, liquidated damages of up to $10,000, a civil penalty of $10,000 payable to the employee, interest on backpay at nine percent, front pay, and other compensation for costs incurred because of the violation. P.A. 103-0867, §30.

6. P.A. 103-0867 allowed the attorney general to initiate or intervene in civil actions for alleged violations and gives broad investigatory powers before initiating an action.

7. P.A. 103-0867 recognized a defense if “the retaliatory action was predicated solely upon grounds other than the employee’s exercise of any rights protected by this Act.” P.A. 103-0867, §32.

Proponents of the amendments made to the Whistleblower Act included the Office of the Illinois Attorney General and some unions. P.A 103-0867 clearly expands protections for employees and gives the attorney general, whose office is charged with upholding the rights of workers, more authority to take actions against employers. Practitioners may see an influx of claims brought under the Whistleblower Act after January 1, 2025.

For more information about employment and labor law, see CAUSES OF ACTION: EMPLOYMENT ACTIONS (IICLE^®, 2024). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

Catherine R. Locallo, Robbins Schwartz, Chicago

Catherine R. Locallo, a partner at Robbins Schwartz, specializes in labor and employment law with a focus on education and board governance. She provides guidance on employment law, collective bargaining, and compliance with various acts. Catherine started as a paralegal, joined Robbins Schwartz in 2004, and became a partner in 2017. She holds a J.D. from The John Marshall Law School and a B.S. from Southern Illinois University. Notably, she is also involved in multiple professional organizations and community activities, including the Glenview Stars Hockey Association.

In Qualizza v. Freeman, 2024 IL App (1st) 231534-U, the First District Appellate Court reaffirmed the broad scope of the absolute litigation privilege in claims arising from communications (and other conduct) related to judicial proceedings.

The court restated that the absolute litigation privilege protected defendants from defamation claims for statements contained in pleadings and communications, including communications to third-party non-litigants, provided that statements meet the “pertinency requirement” and that the communications would not have been made absent the non-litigant’s interest in the litigation, as articulated in O’Callaghan v. Satherlie, 2015 IL App (1st) 142152, 36 N.E.3d 999, 394 Ill.Dec. 708, which remains the controlling case on these issues. 2024 IL App (1st) 231534-U at ¶31.

Complete Summary

This case arose from underlying litigation in which a group of plaintiffs filed a complaint alleging in pertinent part that the defendants engaged in “egregious misconduct” related to a business operated through Aries Community Capital, LLC (ACC) and Urban Development Fund, LLC (UDF). 2024 IL App (1st) 231534-U at ¶4.

ACC and UDF were formed by the defendant and one of the plaintiffs to provide loans and investments to low-income communities using federal and state tax credits issued through New Market Tax Credit (NMTC) Programs. The defendant was Vice President of ACC and manager of UDF.

The federal NMTC project operated by ACC began first. The complaint alleges that ACC (the plaintiff’s company) and QSG (the defendants’ company) each held 46 percent of the membership interests in ACC. The parties involved in ACC later created UDF ST to manage the state NMTC venture. QSG and its successor, QGH, also the defendants’ company, held 80 percent of UDF’s membership interests, with ACC holding 20 percent. One of the defendants was the manager of UDF ST. 2024 IL App (1st) 231534-U at ¶¶5 – 6.

The complaint alleged that the defendants exploited their ownership interests in the NMTC businesses by directing 100 percent of all termination fees to UDF when the fees should have been split between the federal and state NMTC administrative managers (ACC and UDF). 2024 IL App (1st) 231534-U at ¶7. Specifically, UDF allegedly diverted termination fees from a project involving Big Brothers Big Sisters of Miami Institute, Inc. (BBBS).

The BBBS project involved providing $6.5 million in federal funds and $6.41 million in state funds to finance the acquisition and development of property for a BBBS community facility in Florida. 2024 IL App (1st) 231534-U at ¶8. Despite this split between federal and state NMTC, UDF collected 100 percent of the $64,171 termination fee. Id. The complaint alleged that the defendants never provided notice to the plaintiff that UDF was collecting 100 percent of the termination fees. Id. The defendant was removed as UDF’s manager, and the plaintiff discovered the termination fee diversion scheme.

The defendant filed a counterclaim against the plaintiff and a third-party complaint against Perkaus and Perkaus & Farley, LLP, alleging defamation. The defendant attached three publications as exhibits to his counterclaim and third-party complaint.

The first publication was an email chain between the CFO of BBBS Miami, Perkaus, various executives at BBBS Miami, representatives of banks and lenders involved in the BBBS project, and their attorneys regarding the BBBS funding issue. It stemmed from an email that BBBS Miami’s CFO sent to Perkhaus inquiring as to the status of UDF’s funding for the BBBS project.

Perkhaus responded to the CFO’s email by stating the following:

I have attached our complaint filed in Cook County Illinois detailing how [the defendants] through their control over the entities involved misdirected over $6 million in fees from the federal entity to the state entity UDF NMTC ST which was 80% owned and controlled by [the defendants]. As alleged in our complaint, [the plaintiff] only discovered these illegal transfers after he wrested [sic] control of UDF on August 12, 2022, from [the defendant] in his successful Delaware litigation last year. [The defendant’s] alleged illicit actions regarding BBBS Miami are detailed in the complaint in UDF 41 and 48. 2024 IL App (1st) 231534-U at ¶11.

The second publication was the complaint, which Perkhaus attached to his e-mail.

The third publication consisted of the plaintiff’s reply email in response to the first publication, in which the plaintiff replied to the same recipients and added: “[I] suggest that the courts can decide whether [the defendants] misappropriated millions of dollars without the knowledge of the majority owners of [UDF].” 2024 IL App (1st) 231534-U at ¶15.

The defendant alleged that the three publications contained defamatory statements.

The plaintiff filed a motion to dismiss the defendant’s counterclaim under §2-615 of the Illinois Code of Civil Procedure on the grounds that the absolute litigation privilege protected the publications. The defendant opposed, arguing that the privilege did not apply because the recipients were not parties to the underlying litigation and were not mentioned in the complaint.

In reply, the plaintiff argued that the defendant’s arguments were based on outdated caselaw. The plaintiff argued that under current authority, the publications were protected, citing Bedin v. Northwestern Memorial Hospital, 2021 IL App (1st) 190723, 187 N.E.3d 739, 453 Ill.Dec. 286; Scarpelli v McDermott Will & Emery LLP, 2018 IL App (1st) 170874, 117 N.E.3d 238, 426 Ill.Dec. 821; Doe v. William McCarthy, LLP, 2017 IL App (2nd) 160860, 92 N.E.3d 607, 419 Ill.Dec. 196; and O’Callaghan v. Satherlie, 2015 IL App (1st) 142152, 36 N.E.3d 999, 394 Ill.Dec. 708, as the current controlling authority on the issue.

The trial court agreed with the plaintiff, finding that the three publications were protected by the absolute litigation privilege under the controlling caselaw and that dismissing the defendant’s counterclaim and third-party complaint was proper.

The appellate court upheld the trial court’s ruling, finding that the absolute litigation privilege applied as the publications were pertinent communications. O’Callaghan, supra, 2015 IL App (1st) 142152 at ¶25; Bedin, supra, 2021 IL App (1st) 190723 at ¶40. While made to third parties, the communications were protected because the third parties had some interest in the litigation. 2017 IL App (2d) 160860 at ¶¶22 – 23 (citing O’Callaghan, supra, 2015 IL App (1st) 142152 at ¶29).

Significance of Decision

This decision reinforced that the absolute litigation privilege bars claims for defamation and other alleged misconduct arising from pertinent communications made during a judicial proceeding or pleading, including communications made to third parties with an interest in the litigation.

For more information about ethics and professional responsibility, see ELEMENTS OF ILLINOIS LAW: PRACTICING ETHICALLY (IICLE®, 2023). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

Terrence P. McAvoy, Lawyers for the Profession, Hinshaw & Culbertson LLP, Chicago

Terrence McAvoy is a partner at Hinshaw & Culbertson LLP with over 35 years of experience in civil litigation. He specializes in defending attorneys and law firms in professional liability cases involving malpractice, breach of contract, fiduciary duty, fraud, and more. McAvoy has extensive trial and appellate court experience and previously served as national claims counsel for a professional liability insurance carrier. He has been recognized as a Leading Lawyer and holds the AV® Peer Review Rating for legal ability and ethics.

Katherine G. Schnake, Lawyers for the Profession, Hinshaw & Culbertson LLP, Chicago

Katherine G. Schnake is a partner at Hinshaw & Culbertson LLP, specializing in professional liability defense for lawyers and law firms. She provides counsel on ethics and legal responsibility, and her litigation experience includes civil liability cases. Schnake is also a former adjunct professor at the University of Illinois Chicago School of Law. In addition to her legal practice, she is actively involved in civic activities and has a passion for running marathons and equestrian sports.

In In re Parentage of A.C., 2024 IL App (1st) 232052, a father was held in direct civil contempt of court for a number of actions he committed in court, including but not limited to refusing to shut down his iPad, refusing to advise the court how to shut down the device once it was confiscated, and showing incivility and disrespect to the court. The trial court was concerned, among many things, that the father, who was self-represented, was using a device to improperly record the proceedings. The trial court issued ten direct contempt findings and fined him $250 per contempt for a total of $2,500. 2024 IL App (1st) 232052 at ¶26. He appealed, and the appellate court held that while the trial court labeled the contempt direct civil contempt, it was actually direct criminal contempt as it ordered ten $250 fines, which can be interpreted as criminal fines. 2024 IL App (1st) 232052 at ¶28. In dicta, the court also referenced Supreme Court Rule 44, which clearly prohibits audio recording in the court room, but cautioned against depriving self-represented litigants of the use of electronic devices in a courtroom when lawyers are regularly permitted to utilize such devices to present their cases.

Trial Court’s Order for Indirect Civil Contempt That Ordered Jail Time and a Monetary Purge Reversed

In Parentage of A.C., supra, in which a father was held in direct contempt of court (see above), the trial court entered a second order holding the father in indirect civil contempt of court and ordered the father to be committed to the Cook County Jail until such time as a $2,500 purge was paid. 2024 IL App (1st) 232052 at ¶26. He appealed, and the appellate court reversed due to the nature of the contempt actually being criminal contempt, not civil contempt. Also problematic was the fact that he was ordered to pay a $2,500 fine in the first contempt order, but in the second order it was repeatedly referred to as a purge rather than a fine. Id. While a period of jail time and a fine are valid punishments for criminal contempt, it is not acceptable to have an indefinite period of jail time subject to the payment of a purge for criminal contempt. Therefore, the appellate court reversed. The trial court also issued two further orders on the matter during the same court appearance, one a scheduling order, which was upheld, and the other a remand/commitment/release form order, which remanded the father into custody. The court reversed the incarceration order because the father was not sentenced to a valid incarceration term, and to the degree the court ordered a purge in connection with such sentence of incarceration, those portions of the orders were also reversed.

For more information about family law, see ADOPTION LAW (IICLE^®, 2024). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

Donald C. Schiller, Schiller DuCanto & Fleck LLP, Chicago, Lake Forest & Wheaton

Donald Schiller is the Chair Emeritus and Of-Counsel at Schiller DuCanto & Fleck LLP. He co-founded the firm in 1981, making it the largest family law practice in the U.S. Known for handling high-profile divorce cases, Schiller has been recognized by numerous publications and has served in significant roles within the Illinois and American Bar Associations. He has also been a lecturer at the University of Chicago Law School and is a well-published author and speaker in the field of family law.

Michelle A. Lawless, Law Office of Michelle A. Lawless LLC, Chicago

Michelle A. Lawless, founder of The Law Office of Michelle A. Lawless LLC, has over 20 years of experience in family law. After a distinguished career at a prestigious litigation firm, she started her own practice to offer a more compassionate and resolution-focused approach. Michelle specializes in collaborative law, mediation, and attorney-assisted mediation, helping clients navigate family disputes with minimal conflict. She is recognized for her thought leadership, extensive financial expertise, and dedication to creating better outcomes for families.

As practitioners are aware, most sellers of residential real property are required under Illinois law to complete a residential real property disclosure report form and present it to the buyers prior to executing a sales contract. The form requires seller disclosures on a variety of topics but does not obligate a seller to disclose conditions not specifically enumerated in one of the 24 categories listed on the form or to undertake any investigations prior to making any disclosures. While seller disclosures relating to flooding or leakage inside the residence are required, nowhere on the disclosure form is a seller asked to disclose flooding or recurring leakage that occurs outside the residence and only in the backyard. The third district, in Dunsmore v. Gallegly, 2024 IL App (3d) 3220431, recently analyzed seller disclosure obligations in a residential transaction under such a factual scenario.

Facts

Peter Dunsmore and Kimberly Latour purchased a residential property from Shawn and Tea Gallegly. 2024 IL App (3d) 3220431 at ¶2. As part of the transaction, the Galleglys completed the requisite disclosure form, indicating, in part, that they were not aware of “any flooding or recurring leakage problems in the crawlspace or basement.” 2024 IL App (3d) 3220431at ¶4.

As a result of their professional inspection, Dunsmore and Latour requested repair or replacement of rotted wood at the base of the backyard deck and repair or replacement of the support posts for the deck’s steps. Id. In response, the Galleglys indicated that much of the deck had been recently replaced and that only minor issues remained. 2024 IL App (3d) 3220431 at ¶5. Ultimately, Dunsmore and Latour agreed to accept a $1,600 repair credit from the Galleglys to cover the cost of addressing the rotten portions of the deck. Id. Dunsmore and Latour closed on the property and took possession. Id.

Nearly one year after closing, Dunsmore and Latour filed their lawsuit alleging that the Galleglys had violated the Residential Real Property Disclosure Act (Disclosure Act), 765 ILCS 77/1, et seq., and committed fraud due to the sellers’ failure to disclose the backyard flooding based on three post-closing periods of “severe and prolonged inundation” of the property. 2024 IL App (3d) 3220431 at ¶6. Nowhere did Dunsmore and Latour allege any water intrusion into the residence. Id. After repeatedly and successfully moving to dismiss multiple iterations of the complaint, the Galleglys moved for summary judgment on Dunsmore and Latour’s fourth amended complaint, articulating three grounds for the motion: “(1) the Sellers did not have a duty to disclose the flooding described in the complaint, (2) the Buyers did not make sufficient inquiry into the issue of flooding, which could have been discovered upon reasonable investigation, and (3) the Buyers failed to demonstrate that they were damaged by the flooding.” 2024 IL App (3d) 3220431 at ¶8. The trial court granted the motion. Id.

Dunsmore and Latour filed a timely appeal, arguing that the trial court committed an error when it granted summary judgment on the issue of fraudulent concealment. 2024 IL App (3d) 3220431 at ¶¶8 – 10.

Appellate Court

The appellate court, in its de novo review, upheld the lower court’s decision, determining that the Galleglys did not have a duty to speak — a critical element to establish fraudulent concealment — and, therefore, summary judgment was appropriate. 2024 IL App (3d) 3220431 at ¶11. In rendering its decision, the appellate court also noted that silence alone does not give rise to fraud, but, rather, it must be accompanied by active concealment. 2024 IL App (3d) 3220431 at ¶12. In other words, evidence of an intent to deceive must be demonstrated. Id.

Here, while the Galleglys may have been silent on the adequacy or inadequacy of the property’s drainage, there was no evidence of active concealment. 2024 IL App (3d) 3220431 at ¶13. To the contrary, the Galleglys, bound by the Disclosure Act’s requirements, were not required to disclosure issues or defects not described in the Disclosure Act, such as backyard flooding. Id., citing Kalkman v. Nedved, 2013 IL App (3d) 120800, ¶23, 991 N.E.2d 889, 372 Ill.Dec. 399. Moreover, since Dunsmore and Latour had access to relevant information about the backyard flooding (i.e., the sellers disclosed replacement of the rotten deck wood prior to the sale and the buyers had a professional inspection that revealed the rotten condition of the deck and stairs), they could not claim fraud. 2024 IL App (3d) 3220431 at ¶15. As the appellate court noted, “[a] party may not enter into a transaction with its eyes closed to available information and then claim deception.” Id., citing Seefeldt v. Millikin National Bank of Decatur, 154 Ill.App.3d 715, 506 N.E.2d 1052, 1055, 107 Ill.Dec. 161 (4th Dist. 1987).

Critically, the appellate court further noted that Dunsmore and Latour never inquired about what caused the wooden deck to rot, even after the Galleglys had disclosed during attorney review both the wood rot and the fact that portions of the deck had been replaced prior to the sale. 2024 IL App (3d) 3220431 at ¶16. If they had inquired and the Galleglys had been evasive, deceptive, or false in their response, perhaps a case of fraud could have been established. Id. However, no inquiry was ever made, and the appellate court found that “[t]he Sellers’ failure to volunteer unasked-for information, particularly when such information was (1) not required by the Disclosure Act, and (2) readily observable, did not give rise to a claim of fraud or constitute concealment.” Id. Nor was any other duty created on the Galleglys vis-à-vis Dunsmore and Latour in this arms-length transaction when both parties were represented by counsel. 2024 IL App (3d) 3220431 at ¶17. Accordingly, the appellate court upheld the trial court’s decision. 2024 IL App (3d) 3220431 at ¶20.

This case reminds practitioners to understand and always keep in mind the scope and limitations of a seller’s disclosure obligations on a residential transaction and to follow up on inspection results and other pre-closing due diligence as a means to fill in the information gaps not covered by any seller disclosure obligations.

For more information about real estate law, see MORTGAGE FORECLOSURE: CORRESPONDING ISSUES (IICLE^®, 2024). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

The Workers’ Compensation Division of the Illinois Appellate Court found that the Commission’s initial decision was not against the manifest weight of the evidence in Bahler Trucking v. Illinois Workers’ Compensation Commission, 2024 IL App (5th) 231008WC-U. The case came on the employer’s appeal of the circuit court judgment confirming the Commission’s second decision on remand.

The claimant was employed by Bahler Trucking as a tractor-trailer driver. On December 2, 2015, he was transporting hogs from Courtland, Virginia, to Peoria, Illinois. He reached the Indiana-Illinois border when he began to feel short of breath, so he pulled off the road and waited a few minutes. He then drove again, gasped for air, and was unable to follow the curve of the ramp. The truck went off the road and landed on its right side. The claimant used his right leg to push against the dash of the truck so he could disconnect his seatbelt. He broke the windshield with a hammer but could not fit through, so he pushed the driver’s side door open to get out. He felt a sharp pain in his hip when exiting the truck, and when the pain grew worse, an ambulance was called and took him to the hospital.

At Carle Foundation Hospital, the claimant reported his pain level as a ten out of ten. 2024 IL App (5th) 231008WC-U at ¶6. He testified that the physician only looked at a large bruise on his right buttock and that he did not receive any treatment at the emergency room. He also denied receiving medication or having X-rays taken. Four days later, he went to Harrison County Hospital with continued complaints of pain, including in his stomach area. He previously had had a hernia repair surgery. He denied receiving treatment during this visit and was referred to his primary care physician, Dr. Lisa Clunie.

The claimant saw Dr. Clunie for hernia-related concerns and mentioned having both back and hip pain. Dr. Clunie ordered X-rays for a possible hernia and referred him to Dr. John Gonzaba, a surgeon. Dr. Gonzaba told him that his hernia would be all right, and he received no further treatment for it.

The claimant then saw Jennifer Murphy, a nurse practitioner, at Dr. Clunie’s office. She ordered the claimant off work, ordered diagnostic tests, prescribed pain medication, and referred the claimant to Dr. Joseph Finizio. The claimant denied telling Dr. Finzio his pain was alternating from his right leg to his left leg. He stated his right-leg pain was constant, and he had cramping in his left leg. Dr. Finizio ordered physical therapy, which the claimant said provided some relief. Dr. Finizio ordered three epidural steroid injections, though the claimant had only one.

The records from Carle Foundation Hospital showed that the claimant complained of “back pain from being in his seatbelt” and from loading hogs into the trailer. 2024 IL App (5th) 231008WC-U at ¶12. He complained of mid-back pain radiating down his right leg as nine out of ten. The nurse’s notes showed that the claimant reported pain at rest and activity, both of which he reported as ten out of ten. The examination was negative for back pain with a normal range of motion. The claimant was given a Toradol injection and diagnosed with a right buttock contusion and a ventral incisional hernia.

The Harrison County Hospital records showed complaints of abdominal pain and right-hip pain from the accident. The pain was rated as eight out of ten. 2024 IL App (5th) 231008WC-U at ¶14.The claimant had blood work, an X-ray, and a CT scan, which revealed a hernia. He was referred to his primary care physician for hernia treatment. The X-ray revealed a “mild grade 1 spondylolisthesis of the L5 on S1.” 2024 IL App (5th) 231008WC-U at ¶15. An MRI showed multilevel degenerative disc disease and a grade 1 spondylolisthesis of L5 on S1 with a small protrusion at L4-L5. Id.

Dr. Clunie’s record for December 9, 2015, showed that the claimant complained of more pain with the hernia, which was larger since the accident. While he made no complaints about back or leg pain, Dr. Clunie’s report indicated he mentioned joint and right-hip pain after the accident. He had a normal range of motion, normal gait, and no musculoskeletal or neurological concerns. The notes from Jennifer Murphy on December 21, 2015, recorded a chief complaint of back pain with a diagnosis of acute lower back pain at the right sacroiliac joint.

Dr. Gonzaba’s records for December 15, 2015, showed complaints of umbilical pain. The doctor found no evidence of a true hernia and no treatment was prescribed. They did not contain any history of back or leg pain and showed a normal range of motion.

Dr. Finzio’s records documented complaints of low-back pain radiating down both legs at a rate of seven out of ten. 2024 IL App (5th) 231008WC-U at ¶22. Dr. Finzio referred the claimant to physical therapy, which the claimant reported did not help. Dr. Finzio ordered lumbar epidural blocks, and, after one injection, the claimant reported no relief.

The employer arranged for Dr. Morris Soriano to examine the claimant and review the medical records. The claimant’s attorney sought a second opinion from Dr. Jason Seibly. Both were neurosurgeons.

Dr. Seibly testified that the claimant’s actions to remove the seatbelt and force open the truck’s door could have strained the sacroiliac joint. He briefly reviewed the medical records and testified that the treatment to the lumbar spine did not provide relief because nerve root irritation was in fact the source of the pain. On cross-examination, he stated there was no objective abnormality to address regarding the claimant’s condition and there were no lumbar spine symptoms. He stated he would not expect left-side pain from a right-side sacroiliac joint issue. He agreed that the sacroiliac joint diagnosis was a new diagnosis and agreed with Dr. Soriano that lumbar spine surgery was not reasonable and necessary.

Dr. Soriano testified that the delayed onset of the claimant’s lower extremity pain was not consistent with any aggravation of the spondylolisthesis. He felt the MRI findings were not related to the accident and testified to the treatment he considered reasonable and necessary, including physical therapy, medication, work restrictions, the single epidural injection, the emergency room evaluation, and the visits to the primary care physician and neurologist. He described inconsistencies in the claimant’s history concerning whether the hogs were actually loaded back into the trailer. He testified the claimant was faking the exam he performed, explaining that the claimant complained of back pain with the straight leg raise test in the supine position but not having any in the sitting position. He described three positive Waddell’s signs. 2024 IL App (5th) 231008WC-U at ¶39. He explained that he performed a simulated truncal rotation to the right and the left. The claimant complained of right sacroiliac joint pain on both the right and left side of testing, which was not objective because the left side should not have any effect on the “right SI joint.” 2024 IL App (5th) 231008WC-U at ¶41. He also could not find any objective signs in the medical records to support the complaints of pain at ten out of ten or seven out of ten. 2024 IL App (5th) 231008WC-U at ¶43.

The arbitrator found the claimant incredible and Dr. Soriano’s opinion persuasive over Dr. Seibly’s. The arbitrator found the claimant sustained soft tissue injuries to his lower back and right buttock that had resolved by April 13, 2016. The arbitrator found the claimant’s current condition of ill-being was not causally related to the accident. The arbitrator awarded temporary total disability benefits and medical expenses through April 13, 2016. The arbitrator denied any further benefits, including prospective medical care. The Commission affirmed and adopted the decision, but the circuit court reversed, and the case went back to the Commission.

On remand, the Commission adopted Dr. Seibly’s opinion and found the complaints of right sacroiliac joint pain were corroborated by the medical records.

The employer argued on appeal that the Commission’s initial decision was not against the manifest weight of the evidence; specifically, the determination that the claimant’s condition of ill-being was not causally related to the accident. The court agreed.

In the court’s opinion, the record and the claimant’s testimony opposed finding the Commission’s initial decision was against the manifest weight of the evidence. Initially, the claimant complained of low-back and right-leg pain. When he first saw Dr. Clunie, however, his concern was abdominal pain related to what he thought was a new hernia. After Dr. Gonzaba determined there was no hernia, the claimant returned to Dr. Clunie, focusing on lower back and right-leg pain with her nurse. The opinion notes the inconsistency of the initial complaints and goes on to point out inconsistencies with respect to whether physical therapy provided relief and conflicts between the claimant’s testimony and what was found in the medical records. A significant factor was the claimant’s denial of bilateral leg pain, which was recorded in Dr. Finizio’s records and in the therapy records.

The court held it could not ignore the Commission’s findings regarding the claimant’s credibility. The court’s role is to determine whether the record contains sufficient evidence to support the Commission’s initial decision. The Commission found the claimant’s testimony incredible and Dr. Soriano to be more credible and persuasive than Dr. Seibly. The court’s review requires that it grant substantial deference to those findings. For a decision to be against the manifest weight of the evidence, an opposite conclusion must be clearly apparent. The court could not find that to be the case based on the record. Consequently, the court reversed the circuit court’s judgment reversing the Commission’s initial decision and confirmed the Commission’s initial decision. The court vacated the Commission’s second decision and reversed the circuit court’s judgment that affirmed it.

For more information about workers’ compensation, see WORKERS’ COMPENSATION PRACTICE (IICLE^®, 2023). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

Joseph P. Basile

Joseph P. Basile, Chicago, concentrates his practice in workers’ compensation and civil litigation. He is a chair-qualified arbitrator for the Circuit Court of Cook County Mandatory Arbitration Program, has been a faculty member at annual IICLE® workers’ compensation seminars, and is the author of the monthly workers’ compensation column for IICLE®’s FLASHPOINTS™. He is a member of the Chicago and Illinois State Bar Associations. Mr. Basile received his B.S. from St. Louis University and his J.D. with distinction from the University of Illinois Chicago School of Law, where he was a member of The John Marshall Law Review.

Our September FLASHPOINTS Author Spotlight recognizes the contributions of Larry A. Davis, who most recently wrote for DEFENDING DUI: PRACTICE AND PROCEDURE (IICLE®, 2024). He has also contributed to the previous editions of DEFENDING DUI: PRACTICE AND PROCEDURE since 2016.

As a second-year law student, Davis became an intern in what is now the Department of Administrative Hearings within the Secretary of State’s Office. While there he worked as a clerk to the Chief Hearing Officer and developed a serious interest in Illinois DUI and driver’s license law. He remained with the Secretary of State’s Office as an attorney working in various positions as a prosecutor, hearing officer, and senior legal advisor for approximately five years.

After leaving the Secretary of State’s Office and entering private practice, Davis was invited by a mentor, James J. Ahern, Sr., the “dean of the traffic bar," to become involved in legislative negotiations addressing traffic laws on behalf of the Chicago Bar Association and later the Illinois State Bar Association. “Around 1989 Jim was asked to act as editor of the first IICLE® DUI book, DEFENDING DUI AND TRAFFIC CASES (IICLE®, 1989), and invited me to be a chapter author. That began a long association with IICLE® as well as speaking to numerous bar associations and other groups over the years."

Davis has now celebrated 35 years of writing for IICLE®. “My association with IICLE® has been more satisfying than I could ever have imagined. I would encourage every young attorney with a passion for a particular area of the law to seek to volunteer their time to IICLE®."

Davis is Principal at The Davis Law Group, P.C., in Northfield, where he concentrates in criminal law, DUI matters, and administrative hearings before the Secretary of State. He is a member of the ISBA Traffic Laws and Courts Section Council and Chair of the Section Council’s Legislative Subcommittee and an ISBA representative to the Illinois Department of Transportation Impaired Driving Task Force. He received his B.A. from Northwestern University and his J.D. cum laude from DePaul University College of Law.