*1 Illinois Official Reports
Appellate Court
Armagan v. Pesha
,
Appellate Court OSEP ARMAGAN, M.D., Plaintiff-Appellee, v. MICHAEL PESHA, KATHY PESHA, and STEPHEN PESHA, Individually and as Agents Caption
for Gold Dust Coins, Defendants-Appellants. First District, Second Division
District & No.
Docket Nos. 1-12-1840, 1-12-2783 cons. Filed March 4, 2014
Held In an action for conversion, breach of bailment, and a violation of the Illinois Bailment Insurance Act arising from plaintiff’s tender of 253 ( Note: This syllabus gold coins to defendant and his coin business, the appellate court constitutes no part of the vacated the trial court’s order deeming that the facts plaintiff opinion of the court but has been prepared by the requested to be admitted by defendant pursuant to Supreme Court Reporter of Decisions Rule 216 were admitted due to defendant’s untimely response to the for the convenience of request, since defendant’s response to the request to admit was timely the reader. ) served on plaintiff when it wаs mailed to plaintiff within 28 days after
the request to admit was served on defendant; therefore, the cause was remanded to the trial court with directions to allow defendant’s responses to the request to admit to stand, the order granting summary judgment for plaintiff was vacated, and plaintiff’s amended verified complaint was reinstated for further proceedings.
Decision Under Appeal from the Circuit Court of Cook County, No. 10-CH-13571; the Hon. Carolyn Quinn, Judge, presiding. Review Affirmed in part and reversed in part; cause remanded.
Judgment *2 Counsel on Naughton Law Office, of Tinley Park (Gino P. Naughton, of counsel), for appellants. Appeal
Kerkonian Law Firm PC, of Evanston (Karnig S. Kerkonian, of counsel), for appellee. JUSTICE PIERCE delivered the judgment of the court, with opinion.
Panel
Presiding Justice Harris and Justice Simon concurred in the judgment and opinion.
OPINION ¶ 1 Defendants bring this appeal arguing the circuit court erred in denying their motion to
dismiss plaintiff’s verified complaint; in granting plaintiff’s motion to deem facts admitted; and in granting summary judgment on two counts in favor of plaintiff. For the following reasons, we affirm in part and reverse in part and remand to the circuit court for further proceedings consistent with this opinion.
¶ 2 BACKGROUND Plaintiff’s verified complaint alleged he tendered 253 gold coins to defendant Michael
Pesha (Michael) and his business, defendant Gold Dust Coins, for safekeeping and when plaintiff lаter demanded the return of those coins, defendants refused. All three Pesha defendants are alleged to have an interest in Gold Dust Coins. Attached to plaintiff’s verified complaint is Exhibit E, a purported receipt for the deposit of the gold coins. The verified complaint alleged eight causes of action sounding in conversion, breach of bailment, violation of the Illinois Bailment Insurance Act (765 ILCS 1015/0.01 et seq . (West 2008)), violation of section 7-204(a) of the Illinois Uniform Commercial Code (UCC) (810 ILCS 5/7-204(a) (West 2008)), common law fraud, consumer fraud, unjust enrichment and constructive trust. Defendants filed a motion to strike and dismiss the verified complaint pursuant to section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2010)). After hearing, the circuit court denied the motion to dismiss. Defendants then filed a verified answer wherein they denied all material facts alleged. Plaintiff later served Michael with a request to admit facts on November 18, 2010. Michael
filed his response to these requests with the circuit court clerk and mailed the response to plaintiff’s counsel on December 17, 2010. On December 30, 2010, plaintiff filed a motion to deem all requests admitted because the
response was not served on the plaintiff within the 28 days as provided in Illinois Supreme Court Rule 216 (eff. May 30, 2008). Plaintiff argued Illinois Supreme Court Rule 12 (eff. Dec. 29, 2009), which governs proof of service, provides that service by mаil is complete four days after mailing and, therefore, plaintiff’s service of the request to admit on defendant was *3 effective on November 22, 2010, making the response due 28 days later, or December 20, 2010. Because Michael’s response was mailed on December 17, 2010, service to plaintiff’s counsel was complete on December 21, 2010, one day past the deadline. Michael responded to the motion arguing that he timely served plaintiff with his response to the requests to admit by filing and mailing his response on December 17, 2010. Furthermore, Michael asserted that he was out of town prior to December 17, 2010 and was unable to affix his signature to the responsе prior to that date. On March 10, 2011, the circuit court granted plaintiff’s motion and entered an order deeming all requested facts admitted for failing to comply with Rule 216. Michael filed a motion to reconsider on April 8, 2011, arguing that if the court finds his service was untimely, the court has the discretion to allow the response to be filed late under Illinois Supreme Court Rule 183 for good cause shown. Plaintiff responded arguing that Michael’s service of his response to the Rule 216 requests to admit were untimely and, furthermore, even if Michael’s motion to reconsider is read as a Rule 183 request for an extension of time, the motion fails because he has not established good cause to invoke the circuit court’s discretion to allow the late service. In his reply, Michael requested the court grant him an extension of time to serve his response nunc pro tunc and allow his response. Supporting the reply was Michael’s sworn affidavit wherein he stated that he was out of state for a period of time prior to December 17 and was unable to sign the document before his return. On July 15, 2011 the court denied the motion to reconsider and found that Michael being out of town between December 13 and December 17, when he signed the requests, was not good cause to allow a late response of one day. The court noted that Michael did not explain why he did not sign the response before he left town on December 13. Based on the judicial admissions, plaintiff moved for summary judgment on all counts.
Plaintiff argued all relevant material facts had been deemed admitted and, therefore, it was undisputed that plaintiff left the coins with Michael to store and later sell upon plaintiff’s request and those coins were not returned to plaintiff when demanded. Michael responded, arguing that he had “vigorously” disputed all facts alleged by plaintiff. Michael asserted that plaintiff did not leave the gold coins with him; that he did not place them in a safe; that he did not make a notation on the receipt that referenced the gold pieces; he denied having any of plaintiff’s gold coins or money; and that he told plaintiff he could not keep the coins at the store unless plaintiff sold them to Michael. He further argued that “plaintiff’s credibility is at issue in this matter” and asserted that the disparate level of education between Michael and the plaintiff should be taken into consideration. He disputed the authenticity of the receipt attached to the verified complaint and asserted that the court should not rely on the receipt to enter summary judgment. Furthermore, he argued that questions of fact existed which defeat plaintiff’s motion for summary judgment. The response wаs supported by Michael’s own affidavit wherein he disputed plaintiff’s asserted facts and allegations. After a hearing on November 8, 2011, the circuit court, based on the facts deemed
admitted, entered a written order granting summary judgment in plaintiff’s favor on the conversion and breach of bailment counts. For his remedy, plaintiff elected the imposition of a constructive trust. On September 5, 2012, the court entered a deficiency judgment against defendants in the amount of $459,995.20 and imposed a constructive trust on defendants’ precious metal inventories and cash until satisfaction of the deficiency judgment. This appeal followed.
¶ 10 ANALYSIS
¶ 11 Defendants appeal the circuit court’s ruling that deemed facts admitted; the denial of their
section 2-615 motion to dismiss; and the entry of summary judgment in plaintiff’s favor on counts I and II. I. Motion to Deem Facts Admitted and Summary Judgment Plaintiff requested that Michael admit the following facts pertinent to this appeal:
“(6) Exhibit E is a true copy of a Gold Dust Coin receipt dated on or about June 6, 2008.
* * * (16) The gold purchased by Gold Dust Coin in the gold purchase transaction evidenced by Exhibits F and G was already in the possession of Gold Dust Coin at the time of the telephone call from Plaintiff on or about June 30, 2008.
* * * (21) While Plaintiff was in the Store on June 6, 2008, Defendant Pesha told Plaintiff that Plaintiff could store his gold at the Gold Dust Coin.
(22) While Plaintiff was in the store on Junе 6, 2008, Defendant Pesha told Plaintiff that, when Plaintiff was ready to sell the gold Plaintiff left with Defendants, Plaintiff could call Defendant Pesha and direct him to sell the gold; (23) While Plaintiff was in the Store on June 6, 2008, Defendant Pesha told Plaintiff that Plaintiff could always come in to the store to retrieve the gold he left with Defendants.
(24) Exhibit E indicated that Plaintiff left at the store 143 Kruggerands and 110 Maple Leaf gold coins;
(25) Plaintiff left 143 Kruggerands and 110 Maple Leaf gold coins with Defendant Pesha on or about June 6, 2008.
***
(27) Defendant Pesha told Plaintiff, in a telephone conversation between them on October 5, 2009 that, given the amount of the sale directed by Plaintiff in Exhibit H, Defendant Pesha preferred to handle the transaction in person.
(28) Plaintiff came to the Store, in person, on or about October 8, 2009, and demanded the return of the gold coins.
(29) To date, Defendants have not returned to Plaintiff the gold coins or paid Plaintiff for the value of the gold coins.” Defendants’ appeal involves the question of whether Michael’s response was timely served
where it was mailed to plaintiff within 28 days after his receipt of plaintiff’s requests to admit. To answer this question, we must construe both Rule 216 and Rule 12. Vision Point of Sale, Inc. v. Haas , 226 Ill. 2d 334, 341-42 (2007). We construe supreme court rules in the same method as statutes and our review is de novo . Id . at 342. Illinois Supreme Court Rule 216(a) (eff. May 30, 2008) provides that “[a] party may serve
on any other party a written request for the admission by the latter of the truth of any specified relevant fact set forth in the request.” Rule 216(c) also provides in pertinent part:
“Each of the matters of fact and the genuineness of each document of which admission is requested is admitted unless, within 28 days after service thereof, the party to whom *5 the request is directed serves upon the party requesting the admission either (1) a sworn statement denying specifically the matters of which admission is requested or setting forth in detail the reasons why the party cannot truthfully admit or deny those matters or (2) written objections on the ground that some or all of the requested admissions are privileged or irrelevant or that the requеst is otherwise improper in whole or in part.” Ill. S. Ct. R. 216(c) (eff. May 30, 2008). The purpose of Rule 216 is to establish certain material facts as true, to narrow the issues
for trial.
P.R.S. International, Inc. v. Pax Shred Corp.
, 184 Ill. 2d 224, 238 (1998);
In re
Application of the County Treasurer & ex officio County Collector
,
response to the request to admit was untimely because it was served 1 day beyond the 28-day time limit imposed under Rule 216. We agree. The trial court reasoned that Illinois Supreme Court Rule 12(c) provides that service by
mail is complete four days after the mailing. Because plaintiff mailed the request to admit on November 18, service on Michael was complete on November 22, giving Michael until December 20 to serve plaintiff with his response, otherwise the facts would be deemed admitted under Rule 216. The trial court found that, although the response was mailed on December 17, service was complete four days later on December 21, or one day late. There are several errors with this analysis. The method or act of “service” is not the equivalent of “proof” of service. The method of service of documents, other than service of process and serving a complaint, is controlled by Illinois Supreme Court Rule 11 (eff. Dec. 29, 2009). Rule 11, entitled “Manner of Serving Documents Other Than Process and Complaint on Parties Not in Default in the Trial and Reviewing Courts,” authorizes the service of documents by various methods, including mailing. Rule 11 provides in pertinent part:
“(b) Method. Documents shall be served as follows: * * *
(3) by depositing them in a United States post office or post office box, enclosed in an envelope, plainly addressed to the attorney at the attorney’s business address, or to the party at the party’s business address or residence, with postage fully prepaid[.]” Ill. S. Ct. R. 11 (eff. Dec. 29, 2009).
There is nothing ambiguous in this language and, indeed, it has been routinely followed by lawyers and unrepresented litigants to the effect that one serves a document on the opposing party by depositing the document in the mail, assuming that is the method of service selected. Nothing in Rule 11 indicates that anything further need be done in order to “serve” a document. In the present case, there is no question the defendant mailed his response to plаintiff on December 17. There was no issue of whether the response was “served” under Rule *6 216. The issue before the trial court was the timeliness of service. This issue relates to Rule 12, not Rule 11. Rule 12, entitled “Proof of Service in the Trial and Reviewing Courts; Effective Date of
Service,” in pertinent part provides:
“(b) Manner of Proof. Service is proved:
* * * (3) in case of service by mail ***, by certificate of the attorney, or affidavit of a person other than the attorney, who deposited the paper in the mail ***, stating the time and place of mailing ***, the complete address which appeared on the envelope ***, and the fact that proper postage *** was prepaid[.] ***
(c) Effective Date of Service by Mail. Servicе by mail is complete four days after mailing.” Ill. S. Ct. R. 12(c) (eff. Dec. 29, 2009). It would seem inevitable that litigants would dispute when documents were effectively
served. In this regard, the Committee Comments to Rule 12 state that “[P]aragraph (c) was
added in 1971 to establish, when service is made by mail, a definite starting point for
measuring time periods that begin to run from the date of service, as in Rules 213(c) and
216(c).” Ill. S. Ct. R. 12(c), Committee Comments (rev. July 1, 1975). Thus, in this case, the
starting point for measuring the time period for defendant to timely respond to the request to
admit was 28 days from the date that service of the plaintiff’s requests on him was completed.
Nothing in Rule 12 can reasonably be construed to mean that the time for сompliance is viewed
from the point that the requesting party is served. To accept this view, where a party elects to
serve its response by mail, the compliance period would be reduced by as much as 4 days, from
28 days to 24 days, and would needlessly encourage motion practice on the issue of timely
compliance. Rule 216 requires the response to be served within 28 days, not received within 28
days. Therefore, reading Rules 11 and 12 together, they clearly and unambiguously provide
that documents are served when placed in an envelope, properly addressed with postage
prepaid and deposited in the mail. In the event sеrvice is questioned, service is proved by
compliance with Rule 12. Because the response was timely mailed it was error to deem the
requested facts admitted.
Vision Point of Sale, Inc. v. Haas
,
served and this was “the only action required pursuant to Rule 216 and
Bright
.” . at 357-58.
A review of
Vision Point of Sale, Inc. v. Haas
,
within 28 days from the date plaintiff served the request and, under Rule 12, the clock began to
tick 4 days after the request was properly placed in the mail. This is so regardless of whether
Michael actually received the request at that time or later. See
People v. Bywater
, 223 Ill. 2d
477, 491 n.4 (2006) (Freeman, J., dissenting, joined by Burke, J.);
Commonwealth Eastern
Mortgage Co. v. Vaughn
,
party, the discretion to extend the time for doing of any act which is required by the rules to be done within a limited period, either before or after the expiration of the time. Here, the defendant brought the request for an extension of time in his motion to reconsider the earlier ruling that deemed the requests admitted. To the extent the court may have considered the motion as improper for a motion to reconsider, we find the court misapprehended the nature of the request. While it would have been better to separately request an extension of time to serve the response, the extension request was clearly brought as an alternаtive to the order previously entered. Plaintiff had notice of the requested extension and he resisted the nature and substance of the motion and the court fully considered the grounds upon which it was presented. As such, the court should have considered and granted the motion for an extension of time to serve the Rule 216 response. The record does not indicate that the trial court considered the shift from the bright-line test
employed by the post-
Bright
decisions as discussed by our supreme court when it revisited the
issue in
Vision Point of Sale, Inc. v. Haas
,
such, broad discretion is vested in the trial court in the administration of its trial docket and its supervision over the conduct of discovery. The goals are to do justice and to not allow discovery to become a “trap for the unwary” and to resolve disputes on the merits either through trial or settlement. Since Vision Point we have issued several recent unpublished orders applying these mоre
liberal standards to determine good cause under Rule 183. We refer to these cases, not as
precedent, but as examples illustrative of situations brought before the trial court that were
resolved with an appropriate exercise of discretion. See
Cooney v. Balmer
, 2012 IL App (2d)
199059-U (respondent filed her response with the clerk of the court within 28 days but failed to
serve opposing party in that time; however, petitioner’s counsel was in possession of the
response within a few days of the 28-day deadline and, therefore, the trial court permitted the
late service and did not err in granting respondent the extension and admitting the response);
In
re Marriage of Burrell
,
serving the response, Michael was out of town, because he did not explain why he did not sign
the response before going оut of town. Clearly, the response had to be prepared, reviewed and
signed before service. Had this not occurred, it is almost certain plaintiff would have moved to
have the requests deemed admitted. Given the reality of practicing law and the daily demands
of addressing most litigation matters, it is not unusual for an attorney to wait until the last
moment to finalize a document for his client. While we do not condone or encourage
noncompliance with court-imposed deadlines, trial courts must be mindful of and recognize
the wisdom of Rule 183 and exercise properly the discretion granted thereby. In any event, we
have previously affirmed a late filing because of the affiant’s unavailability as good cause for
*9
exercising discretion in allowing a late filing.
Hammond v. SBC Communications, Inc. (SBC)
,
¶ 31 We find defendant served his response when he mailed the document within 28 days after
he was served with the request to admit and that service as contemplated under Rule 216 was timely. To allow the circuit court’s order to stand would contravene the requirements of Rule 216 and the plain language of Rule 12(c), the general goals of discovery and the overall policy to resolve disputes on the merits. Therefore, we vacate the trial court order deeming facts admitted and remand this cause to the circuit court with directions to allow defendants’ original responses to plaintiff’s request fоr admission to stand.
¶ 32 Based on the foregoing, we find it unnecessary to address other arguments in support of
their appeal regarding their compliance with Rule 216. ¶ 33 Defendants also argue the trial court erred in granting plaintiff’s motion for summary
judgment. Plaintiff moved for summary judgment on all counts. The circuit court granted plaintiff’s motion as to counts I and II, alleging conversion and breach of bailment. Because we find the circuit court erred in ruling the response was untimely and deemed the requested facts admitted, we vacate the order granting summary judgment in favor of plaintiff and reinstate the amended verified complaint for further proceedings. II. Motion to Dismiss Defendants аlso contend the circuit court erred in denying their section 2-615 motion to
dismiss the verified complaint. A section 2-615 motion to dismiss challenges the legal
sufficiency of a complaint based on defects apparent on its face.
Pooh-Bah Enterprises, Inc. v.
County of Cook
,
to dismiss the verified complaint. Defendants asserted two contradictory arguments. First, that plaintiff’s claims were based on a written instrument not attached to the complaint, which required its dismissal pursuant to section 2-606 of the Code (735 ILCS 5/2-606 (West 2010)). Second, that the nature of plaintiff’s alleged agreement with defendants was not evidenced in writing as required by the statute of frauds and the claims must be dismissed. [1] Section 2-606 of the Code provides that if a claim is based on a written instrument, it “must be attached to the pleading as an exhibit or recited therein, unless the pleader attaches to his or her pleading an affidavit stating facts showing that the instrument is not accessible to him or her.” 735 ILCS 5/2-606 (West 2010). After review of the verified complaint, it is clear that plaintiff alleged defendants orally agreed to hold, store and, if requested, return his gold coins. Plaintiff attached to the complaint Exhibit E, alleging it was a receipt prepared by defendants for leaving the gold coins with defendants. We find plaintiff’s claims, as alleged, are based on an oral agreement between the parties and are not based on Exhibit E, or any written document. Exhibit E was referenced as corroboration of the alleged agreement. Therefore, plaintiff was not required under section 2-606 of the Code to attach any writing to the complaint. Defendants next argue that because there is no writing to evidence the agreement for defendants to store the coins, plaintiff’s claims are barred by the statute of frauds found in section 2-201 of the Uniform Commercial Code (810 ILCS 5/2-201 (West 2010)). Article 2 of the UCC governs the sale of goods. . However, the “transaction” alleged, the holding of the coins, constitutes a service and not the sale of goods. See 810 ILCS 5/2-105(1) (West 2010). As such, it falls outsidе of the purview of the statute of frauds found in article 2 of the Uniform Commercial Code, which governs only the sale of goods and not the services alleged in the complaint. See 810 ILCS 5/2-102 (West 2010). Therefore, we reject defendants’ contention that plaintiff’s claims are barred by the statute of frauds. Defendants also argue that plaintiff’s claims are barred by the statute of frauds found in the
Frauds Act (Act) (740 ILCS 80/1 (West 2010)). The Act provides in pertinent part:
“No action shall be brought *** upon any agreement that is not to be performed within the space of one year from the making thereof, unless the promise or agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized.” 740 ILCS 80/1 (West 2010).
To determine whether the Act applies to a contract, the test is “whether the contract is capable of being performed within one year of its formation, not whether such occurrence is likely.”
Robinson v. BDO Seidman, LLP
, 367 Ill. App. 3d 366, 370 (2006). “If an oral agreement
possibly could be performed within one year, it does not come within the Statute of Frauds.”
Meyer v. Marilyn Miglin, Inc
.,
¶ 42 Plaintiff alleged that in June of 2008, he left the coins with defendants for safekeeping and
he also alleged he could get them back at any time and in October 2008, he was unable to retrieve them upon demand. Under the time line alleged, the agreement to store the coins was capable of, and was allegedly performed in one year. Therefore, plaintiff’s claims are not barred by the statute of frauds under the Act.
¶ 43 Defendants make additional arguments for dismissal of the verified complaint in their
appeal brief: that Exhibit E, the alleged “receipt,” is a forgery; they attack the veracity of the
allegations in the complaint; and that the “receipt” is unenforceable pursuant to section 3-401
of the UCC (810 ILCS 5/3-401 (West 2010)) (employer’s responsibility for fraudulent
endorsement by an employee). However, these arguments were not raised in the circuit court
and therefore, they will not be considered here on appeal. Ill. S. Ct. R. 341(h)(7) (eff. July 1,
2008); see
Mabry v. Boler
,
motion to dismiss the verified complaint. CONCLUSION For the reasons stated, we affirm the order of the circuit court denying defendants’ motion to dismiss. We reverse the circuit court’s order granting plaintiff’s motion to deem facts admitted and remand this cause to the circuit court with directions to allow defendants’ original responses to plaintiff’s request for admission to stand, as they are compliant with the requirements of Rule 216; and we vacate the order of summary judgment in favor of plaintiff. Affirmed in part and reversed in part; cause remanded.
Notes
[1] The statute of frauds constitutes an affirmative matter outside of the facts alleged in a complaint
and should be raised in a motion to dismiss pursuant to section 2-619(a)(7) of the Code (735 ILCS
5/2-619(a)(7) (West 2010)). Therefore, the defendants improperly raised the statute of frauds in a
section 2-615 motion to dismiss, which attacks the legal sufficiency of the complaint. 735 ILCS
5/2-615 (West 2010);
Beahringer v. Page
,