Ovnik v. Podolskey
2017 IL App (1st) 162987
| Ill. App. Ct. | 2017Background
- In 2009 defendants leased a Chicago townhouse to Chicago Music Works, Inc. (CMW); Kimberlee Ovnik paid a $6,375 check as the 2009 security deposit though the lease named CMW as lessee. The lease required return of the security deposit with interest.
- A 2011 renewal added John Ovnik as a tenant and a supplemental $6,757.50 deposit, for a combined $13,132.50 security deposit. CMW later vacated in 2013; defendants refused to return deposits.
- Plaintiffs (John, Kimberlee, and CMW) sued under the Chicago Residential Landlord and Tenant Ordinance (RLTO) for return of deposits, interest, penalties, and fees. Numerous procedural motions followed, including defendants’ several 2-619 dismissal motions and an arbitration of CMW’s claim.
- An arbitrator awarded CMW $21,187.86; the circuit court entered judgment on that award. Kimberlee later moved for summary judgment on her claim for the 2009 deposit and interest; the court granted summary judgment for Kimberlee and awarded fees and costs.
- Defendants appealed, arguing among other points that (1) corporations lack standing under the RLTO and (2) Kimberlee’s claim was barred by res judicata because CMW’s arbitration award resolved the same claim. The appellate court reversed summary judgment and remanded, finding a genuine issue of material fact as to privity/identity for res judicata purposes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants properly waived/estopped from paying interest by plaintiff John’s text message | Plaintiffs: waiver/estoppel argument fails because RLTO rights cannot be waived as a matter of law | Defendants: John’s text message waived right to interest on the deposit | Court: Denial of 2-619 motion on waiver not reviewable separately; ultimately not resolved because merged into final judgment issues |
| Whether corporations (CMW) have standing under the RLTO | Plaintiffs: CMW has standing as lessee | Defendants: RLTO covers only natural persons, so CMW lacks standing | Court: Majority declined to decide on appeal (procedural merger); concurrence notes RLTO definitions include corporations and would allow standing |
| Whether Kimberlee’s individual claim to the 2009 deposit is barred by res judicata because of the arbitration award in favor of CMW | Kimberlee: Her claim is distinct because she paid the 2009 deposit personally and was not a lessee on the 2009 lease | Defendants: CMW litigated and obtained a final judgment on the full combined deposit; Kimberlee is in privity with CMW so res judicata bars her claim | Held: Court found identity of cause of action and that the arbitration award disposed CMW’s claims to both deposits, but concluded a genuine factual dispute exists about privity (whether Kimberlee was in privity with CMW); summary judgment for Kimberlee was improper and reversed |
| Whether denial of multiple section 2-619 motions is reviewable on appeal | Plaintiffs: Denials merged into final judgment; review should focus on final judgment issues | Defendants: Sought review of denials of their 2-619 motions | Held: Denial of 2-619 motions merges into final judgment and is not separately reviewable on appeal (majority); one justice would review standing 2-619 issue on merits and would reject defendants’ standing argument based on RLTO definitions |
Key Cases Cited
- In re Estate of Funk, 221 Ill. 2d 30 (superseding rule on merger of interlocutory motion denials)
- Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325 (merger principle for interlocutory motion rulings)
- Cruz v. Northwestern Chrysler Plymouth Sales, Inc., 179 Ill. 2d 271 (arbitration award resolves all claims and fixes defendant’s exposure)
- River Park, Inc. v. City of Highland Park, 184 Ill. 2d 290 (identity of cause of action analysis)
- Hudson v. City of Chicago, 228 Ill. 2d 462 (elements of res judicata)