2019 IL App (1st) 181205
Ill. App. Ct.2019Background
- Plaintiff Paul Lindblad (church organist) entrusted friend Jonathan Nelson with organizing taxes and investing inherited stocks; Jonathan promised to open two accounts (a trading account and a holding account) and to prepare tax returns.
- Jonathan purportedly operated under a sole proprietorship, "Ingrid Nelson d/b/a Illinois Agricultural and Financial Trading," with Ingrid Nelson (his mother) listed as the business owner and sole signatory on the business bank account.
- Plaintiff alleged Jonathan sold plaintiff’s holding-account securities (over $519,000) without consent, transferred proceeds into the trading account, lost most funds (~$473,000), paid himself commissions, and failed to file tax returns—leaving plaintiff nearly penniless.
- Plaintiff sued Jonathan and Ingrid; relevant to this appeal is Count III (civil conspiracy) alleging Jonathan and Ingrid agreed to form/use Illinois Agricultural to further unlawful acts, including defrauding plaintiff and misusing client funds.
- Ingrid moved for summary judgment arguing the complaint only alleged a conspiracy to operate an unregistered investment firm (which she claimed was exempt) and not a conspiracy to defraud; the trial court granted summary judgment for Ingrid. Plaintiff appealed only the dismissal of Count III.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Count III pleads a civil conspiracy to defraud (creating a triable issue) | Lindblad: complaint alleges Ingrid knowingly assisted Jonathan’s fraud by opening and controlling the Illinois Agricultural account and withdrawing client funds, supporting conspiracy-to-defraud theory | Ingrid: complaint alleges only an agreement to create/manage an unregistered investment firm (not an agreement to defraud); therefore no tortious agreement supporting conspiracy | Court: Complaint, read liberally and with supporting evidence, alleges an agreement to form Illinois Agricultural and factual material to infer Ingrid knowingly assisted fraudulent acts; summary judgment improper |
| Whether summary judgment was appropriate under 735 ILCS 5/2-1005(c) | Lindblad: disputed facts (checks, withdrawals, Ingrid’s deposition admitting she opened account, signatures on withdrawal slips) create genuine issues of material fact | Ingrid: her motion showed absence of legal claim as pled; plaintiff cannot reframe claims in response briefing | Court: Movant did not meet the heavy burden; viewing evidence in plaintiff’s favor, triable issues exist; summary judgment reversed |
Key Cases Cited
- Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90 (Ill. 1992) (summary judgment is drastic; standards for granting reviewed de novo)
- Home Insurance Co. v. Cincinnati Insurance Co., 213 Ill. 2d 307 (Ill. 2004) (court must view evidence in light most favorable to nonmoving party)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (movant may establish summary judgment by showing absence of evidence to support nonmovant)
- Adcock v. Brakegate, Ltd., 164 Ill. 2d 54 (Ill. 1994) (civil conspiracy elements: agreement plus tortious act; liability for acts committed in furtherance of conspiracy)
- Karas v. Strevell, 227 Ill. 2d 440 (Ill. 2008) (definition of civil conspiracy reaffirmed)
- McClure v. Owens Corning Fiberglas Corp., 188 Ill. 2d 102 (Ill. 1999) (civil conspiracy requires agreement and tortious act in furtherance)