City of Chicago v. Concordia Evangelical Lutheran Church
69 N.E.3d 255
Ill. App. Ct.2017Background
- The City obtained an emergency receivership under 65 ILCS 5/11-31-2 and appointed CR Realty to remove a dangerous steeple from Concordia Evangelical Lutheran Church; CR Realty engaged contractors (Green, Imperial, Contractor’s Access) and completed work Nov 18–21, 2013.
- CR Realty sought reimbursement via two receiver’s certificates: "hard costs" (third-party invoices ≈ $111,312) and "soft costs" (its fees and legal expenses ≈ $20,697.50).
- Concordia submitted (apparently) a consultant J. Bradley Sargent’s report challenging ≈ $54,674 of the charges as unsubstantiated. An evidentiary hearing followed after CR Realty filed a supplemental accounting.
- The trial court admitted Sargent as an expert, held an evidentiary hearing, and reduced CR Realty’s requested award by ≈ $34,900, approving $97,108.92.
- CR Realty’s later motion for final accounting (Dec 2013–May 2015) seeking additional professional and attorney fees (~$61,090.05) was summarily denied by the trial court as not statutorily or contractually authorized; CR Realty appealed.
Issues
| Issue | Plaintiff's Argument (City/CR Realty) | Defendant's Argument (Concordia) | Held |
|---|---|---|---|
| Whether a trial court may review and reduce a receiver’s third-party "hard costs" using a reasonableness standard | CR Realty: "Hard costs" are reimbursable if paid and should not be subject to post-payment reasonableness scrutiny; Plote/Brackett apply only to receivers’ professional "soft" fees | Concordia: Plote/Brackett framework applies to all receiver expenditures; court may assess reasonableness of third-party charges | Court: Affirmed — trial court may apply the Plote burden-shifting reasonableness framework to both hard and soft costs |
| Whether an evidentiary hearing on fee reasonableness was improper because Concordia’s objections were not timely/filed | CR Realty: No valid objections filed; hearing premature; burden on Concordia to show fees unreasonable before live evidence | Concordia: Objections were treated as filed by the parties and court; Sargent’s report raised sufficient questions to warrant a hearing | Court: Affirmed — hearing permissible; parties and court proceeded as if objections filed; hearing not unfair or prejudicial |
| Admissibility of Sargent’s expert testimony (motion in limine) | CR Realty: Sargent’s methods unreliable, inconsistent data, speculative assumptions — testimony should be excluded | Concordia: Sargent is a qualified forensic accountant; his review assists the court; weaknesses go to weight not admissibility | Court: Affirmed denial of motion in limine — expert testimony admissible; credibility/weight for trial court to decide |
| Denial of CR Realty’s motion for final accounting (post-receivership attorney/fees) | CR Realty: Final accounting fees (including attorneys) are part of receiver’s fees and should be evaluated under Plote reasonableness framework | Concordia: Statute ( §11‑31‑2 ) does not authorize attorney fees; American Rule precludes award absent statutory/contractual basis | Held: Reversed — trial court erred to summarily deny; attorney and related fees may be considered part of receiver’s fees and must be evaluated under Plote framework on remand |
Key Cases Cited
- Plote, Inc. v. Minnesota Alden Corp., 95 Ill. App. 3d 5 (framework for burden-shifting on receiver fee reasonableness)
- Brackett v. Sedlacek, 116 Ill. App. 3d 978 (application of Plote reasonableness framework to receiver/attorney fee petitions)
- Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871 (de novo review applies to whether the correct legal standard was applied)
- Bazydlo v. Volant, 164 Ill. 2d 207 (manifest-weight standard when bench trial testimony conflicts)
- Rosenblatt v. Michigan Avenue National Bank, 70 Ill. App. 3d 1039 (treating attorney fees as part of receiver’s fees in appropriate circumstances)
- Richardson v. Haddon, 375 Ill. App. 3d 312 (remand required where trial court reduced fees without providing objective bases)
- Wright v. Matters, 220 Ill. App. 131 (authority supporting award of attorney time spent defending receiver’s report)