Gilmore v. Carey
2017 IL App (1st) 153263
| Ill. App. Ct. | 2017Background
- Christopher Gilmore, a trader, agreed in 2009 to join Henning-Carey Proprietary Trading, LLC; he made a $250,000 capital contribution to become a Class B member and signed the LLC operating agreement.
- Parties also executed a Services Agreement providing Gilmore a one-year salaried role ($15,000/month) and separate profit-sharing as an independent contractor for some proprietary trading.
- Gilmore suffered large trading losses beginning October 2009; Henning-Carey imposed risk controls, allocated losses to Gilmore’s account under 80/20 Class B terms, and terminated him in February 2010 with a remaining capital account balance of $36,757.
- Gilmore sued on multiple counts (Wage Payment Act, breach of services agreement, breach of operating agreement, fiduciary duty, fraud, etc.). The court entered judgment for Gilmore on the Wage Payment Act claim; a jury awarded $128,219.03 on the breach of the services agreement but found for defendants on breach of the operating agreement. Trial court denied JNOV/new trial and denied attorney fees under the Wage Payment Acts.
- On appeal, the court affirmed most rulings but held that, as a matter of law, Gilmore was entitled to return of the undisputed $36,757 remaining in his capital account and remanded with directions to enter judgment for that amount.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Characterization of trading capacity: services agreement (firm bears losses) vs. operating agreement (member bears losses) | Gilmore: services agreement required Henning-Carey to absorb trading losses | Henning-Carey: Gilmore traded as a Class B member under operating agreement and bore 80% of losses | Court: affirmed jury—ample evidence Gilmore traded as Class B member; services agreement did not govern his member trading |
| Return of capital account on exit (operating agreement) | Gilmore: entitled to full return of capital contribution | Henning-Carey: could offset trading losses/expenses; asserted remaining balance was $36,757 | Court: jury correctly denied full return, but trial court should have entered JNOV awarding the undisputed remaining $36,757 to Gilmore |
| Evidentiary/discovery rulings on other traders’ arrangements | Gilmore: exclusion of his discovery but admission of defendants’ evidence was prejudicial and unfair | Henning-Carey: Gilmore opened the door by alleging a scheme; evidence showed consistent treatment of Class B traders | Court: no abuse of discretion—defendants’ evidence competent and Gilmore was not unfairly prejudiced |
| Attorney fees under Wage Payment Act / Attorneys Fees in Wage Actions Act (retroactivity) | Gilmore: entitled to attorney fees under the amended Wage Payment Act (argued retroactive application) | Henning-Carey: amendment took effect Jan 1, 2011 and applies prospectively; Gilmore did not comply with pre-suit demand rule | Court: held amendment applies prospectively only; fees under the Attorneys Fees in Wage Actions Act not available because demand exceeded recovery; no attorney fees awarded |
Key Cases Cited
- McClure v. Owens Corning Fiberglas Corp., 188 Ill. 2d 102 (standard for judgment notwithstanding the verdict)
- Addis v. Exelon Generation Co., 378 Ill. App. 3d 781 (standard for JNOV and review)
- Jackson v. Pellerano, 210 Ill. App. 3d 464 (abuse-of-discretion review for evidentiary rulings)
- Gillen v. State Farm Mut. Auto. Ins. Co., 215 Ill. 2d 381 (authority on not following a conflicting panel decision)
- People ex rel. Alvarez v. Howard, 2016 IL 120729 (delayed implementation date indicates prospective application)
- General Motors Corp. v. Pappas, 242 Ill. 2d 163 (statutory enactments with express effective dates apply prospectively)