C.O.A.L., Inc. v. Dana Hotel, LLC
2017 IL App (1st) 161048
| Ill. App. Ct. | 2017Background
- Plaintiff COAL, Inc. and Dana Hotel, LLC are 50/50 members of Argent Restaurant LLC and entered into a management agreement for the restaurant on Oct 19, 2011.
- Argent Restaurant LLC was formed Apr 4, 2012; disputes arose over accounting, funds, and access to books and records.
- The parties entered into a Separation Agreement dated Mar 25, 2013, purporting to transfer plaintiff’s interest and terminate the management agreement, with a narrow merger clause in 9.9.
- Defendant locked plaintiff out of operations on Apr 2, 2013 and executed the separation agreement; plaintiff amended its complaint to include three counts.
- The trial court dismissed Counts I and III under 2-615, finding the separation agreement replaced the management agreement and released fiduciary claims; the appellate court later held otherwise.
- The appeal was deemed interlocutory/post-dismissal finality proper due to voluntary dismissal of remaining count, giving jurisdiction to review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the Separation Agreement supersede the Management Agreement for all prior breaches? | Separation Agreement did not fully replace the Management Agreement. | Separation Agreement superseded all prior agreements relevant to the subject matter. | No; separation superseded only related to its subject matter; prior breaches survive. |
| Was there a release of fiduciary-duty claims in the Separation Agreement? | No explicit release of fiduciary-duty claims. | Separation Agreement released all claims, including fiduciary duties. | No; no express release of fiduciary-duty claims in the Separation Agreement. |
| Did the Separation Agreement become effective and binding even if not signed by defendant before plaintiff’s withdrawal? | Separation Agreement not effective without defendant’s signature. | Agreement effective as of March 25, 2013 per contract terms; delivery not required for effectiveness. | Separation Agreement effective March 25, 2013; binding on defendant. |
Key Cases Cited
- Rein v. David A. Noyes & Co., 230 Ill. App. 3d 12 (1992) (voluntary dismissal terminates action; appeals of final orders allowed when nothing pending)
- Dubina v. Mesirow Realty Development, Inc., 178 Ill. 2d 496 (1997) (voluntary dismissal renders final orders appealable; finality after dismissal)
- Hudson v. City of Chicago, 228 Ill. 2d 462 (2008) (dissent discusses limits of Rein in voluntary dismissal context)
- Kahle v. John Deere Co., 104 Ill. 2d 302 (1984) (voluntary dismissal without prejudice generally not appealable by plaintiff; refiling rights exist)
- Richter v. Prairie Farms Dairy, Inc., 2016 IL 119518 (2016) (voluntary dismissal terminates entire action and permits appeal of final orders)