Church Yard Commons Limited Partnership v. Podmajersky, Inc.
76 N.E.3d 96
| Ill. App. Ct. | 2017Background
- John Jr. and Annelies Podmajersky (parents) allegedly made an oral 2003 agreement to make their son, John Podmajersky III, an equal partner in seven limited partnerships owning East Pilsen real estate in exchange for his managing the properties and committing his career to the neighborhood.
- The 2003 oral agreement purportedly required John III to "commitment of a lifetime of work" and included terms about forfeiture if he dissociated, distributions, unanimous consent for asset sales, and buyout rights upon the parents' deaths; no written agreement was executed.
- John III performed management services through Podmajersky, Inc., received management fees, and refrained from pursuing other opportunities in reliance on the oral agreement; a proposed part-sale/part-gift implementation plan was never reduced to writing.
- After the parents’ health declined, their daughter Lisa moved in, allegedly isolated them from John III, had estate documents redrafted under her direction, and caused litigation alleging John III breached fiduciary duties to be filed by the parents.
- After the parents died, John III asserted a 28-count counterclaim against Lisa and the partnerships; 14 counts sought declaratory relief enforcing the 2003 oral agreement or damages for its breach (one count per partnership).
- The trial court dismissed those 14 counts under section 1 of the Illinois Statute of Frauds (Frauds Act) as agreements not to be performed within one year; John III appealed. The appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2003 oral agreement is barred by the Frauds Act §1 as not to be performed within one year | John III: agreement's duration was unspecified and could have been performed within a year; not a lifetime contract | Lisa: agreement required lifetime commitment and thus must be in writing under the Frauds Act | Held: agreement required lifetime commitment and is unenforceable under the Frauds Act §1 |
| Whether partial performance takes the oral agreement out of the Frauds Act | John III: his long-term performance and compensation should preclude application of the statute | Lisa: statute bars enforcement despite performance; no written memorandum | Held: argument forfeited on appeal and, on merits (per McInerney), partial performance that is compensated does not remove statute bar |
| Whether the agreement was a contract for sale of land under Frauds Act §2 | John III: not argued here | Lisa (alternative): agreement involved transfer of real estate interests so §2 applies | Held: trial court rejected §2 because transfers were of partnership interests (personal property), so §2 not applicable; affirmed on §1 grounds |
| Applicability of McInerney precedent (lifetime employment exception) to a partnership-transfer context | John III: McInerney applies to simple employment contracts only; not analogous | Lisa: McInerney applies because the agreement contemplated lifetime service and long-term relationship | Held: McInerney applies; lifetime-service character renders the oral agreement within the Frauds Act |
Key Cases Cited
- McInerney v. Charter Golf, Inc., 176 Ill.2d 482 (Ill. 1997) (lifetime employment oral agreements are treated as not performable within one year and must be in writing)
- Robinson v. BDO Seidman, LLP, 367 Ill. App.3d 366 (Ill. App. 2006) (applies McInerney to indefinite-duration employment agreements)
- Martin v. Federal Life Ins. Co., 109 Ill. App.3d 596 (Ill. App. 1982) (earlier case holding some indefinite employment agreements not barred by statute, discussed and distinguished)
- Clampitt v. American University, 957 A.2d 23 (D.C. 2008) (oral employment agreement contemplating long-term employment is barred by statute of frauds)