JOHN COLT LANDRETH, аn Illinois Citizen, Plaintiff-Appellee, v. RAYMOND P. FABRICIUS, P.C.; KEITH R. LEIGH, an Illinois Citizen; ANITA L. KOPKO, an Illinois Citizen; POOL, LEIGH & KOPKO, P.C., an Illinois Professional Corporation; POOL, LEIGH & FABRICIUS, an Illinois Professional Corporation; THE CITY OF OTTAWA, an Illinois Municipal Corporation, Defendants (Raymond P. Fabricius, P.C., Defendant-Appellant).
No. 3-15-0760
Appellate Court of Illinois, Third District
May 29, 2018
2018 IL App (3d) 150760
Appeal from the Circuit Court of La Salle County, Nos. 09-L-13, 09-L-27; the Hon. William S. McNeal, Judge, presiding. Affirmed.
James R. Lindig, of Fabricius & Lindig, of Ottawa, for appellant.
Drew G. Peel and Michael Rachlis, of Rachlis Duff Adler Peel & Kaplan, LLC, of Chicago, for appellee.
OPINION
¶ 1 The plaintiff, John Colt Landreth sued the defendant, the law firm of Pool, Leigh, and Fabricius (PLF), for professional negligence, fraud, and other claims arising out of PLF‘s alleged legal representation of Landreth. Landreth later added a claim for derivative liability against Raymond P. Fabricius, P.C. (Fabricius), alleging that, as a former partner of PLF, Fabricius was jointly and severally liable for any judgment entered against PLF for рrofessional negligence and negligent misrepresentation. Fabricius moved to dismiss certain counts of Landreth‘s second amended complaint as untimely under
¶ 2 More than one year later, Fabricius moved for summary judgment as to liability, arguing that Landreth‘s claims against Fabricius were untimely under
¶ 3 In this appeal, Fabricius argues that the trial court erred by (1) denying Fabricius‘s motion to dismiss Landreth‘s claims against Fabricius on statute of limitations grounds, (2) summarily determining that Fabricius is jointly and severally liable for the professional negligence and negligent misrepresentations of PLF, and (3) granting Landreth‘s motion for summary judgment against Fabricius as to liability. Fabricius also argues that the trial court abused its discretion by striking Fabricius‘s motion for summary judgment.
FACTS
¶ 5 On August 5, 2003, Landreth and the City of Ottawa (City) executed a consulting agreement wherein the City engaged Landreth to provide real estate consulting, marketing, and development services. The agreement was drafted by Keith R. Leigh, an attorney who Landreth alleged was with PLF. The agreement stated that the parties had “jointly utilized the law firm of [PLF] with respect to this Agreement.” The agreement provided that it was binding on both parties and that it did not violate any presently existing provision of law. Both parties performed under the agreement for approximately two years. Thereafter, the City stopped paying Landreth commissions and refused to pay him certain development fees he had earned pursuant to the agreement.
¶ 6 In February 2007, Landreth sued the City for breaching the consulting agreement. On or about April 4, 2007, the City moved to dismiss Landreth‘s suit, arguing for the first time that the agreement was void ab initio because there was no prior appropriation for the agreement, as required by the
¶ 7 In January and February 2009, Landreth filed two lawsuits in the circuit court of La Salle County which gave rise to the instant appeal. On January 27, 2009, Landreth filed a tort lawsuit (Case No. 09-L-13) against various defendants, including the City, Leigh, and Pool, Leigh, & Kopko, P.C., which Landreth alleged was formerly known as “Pool & Leigh, P.C.” The complaint asserted claims of fraud against all the defendants, negligence against the City, and negligent misrepresentation against Leigh and Pool & Leigh, P.C. In February 2009, Landreth filed a legal malpractice lawsuit (Case No. 09-L-27) against Leigh and Pool, Leigh, & Kopko, P.C., which Landreth alleged was formerly known as “Pool & Leigh, P.C.” In that lawsuit, Landreth alleged “on information and belief” that, prior to February 1, 2006, Pool & Leigh, P.C. “was associated with
¶ 8 Upon Landreth‘s request, the trial court consolidated Landreth‘s tort and legal malpractice lawsuits on November 10, 2011. That same day, Landreth filed a second amended complaint, which combined all of his prior claims. In the second amended complaint, Landreth named Fabricius as a defendant for the first time. He asserted claims for fraudulent misrepresentation and fraudulent concealment against the City and the attorney defendants. He further asserted claims for breach of fiduciary duty, professional negligence, negligent misrepresentation, and “owner and successor liability” against the attorney defendants. The second amended complaint did not allege that Fabricius ever personally represented Landreth. Nor did it allege any specific fraudulent or negligent statements, concealments, or misrepresentations made by Fabricius, nor any specific acts of professional negligence committed by Fabricius. Landreth‘s claims against Fabricius were entirely derivative; i.e., Landreth claimed that Fabricius was liable solely because of Fabricius‘s status as a member or partner of PLF, which, Landreth alleged, was either a partnership or an unincorporated association organized for pecuniary profit.
¶ 9 On March 23, 2012, Fabricius moved to dismiss several counts of Landreth‘s second amended complaint pursuant to
¶ 10 In August 2012, Landreth sought and obtained leave to file a third amended complaint.3 The third amended complaint
¶ 11 On September 14, 2012, the trial court entered an order dismissing with prejudice Landreth‘s claims against defendants Anita L. Kopko and Pool, Leigh, & Kopko, P.C., and entering a consent judgment in favor of Landreth and against defendant Leigh.
¶ 12 On October 5, 2012, the defendant filed his answer to Landreth‘s third amended complaint. Fabricius‘s answer did not assert any аffirmative defenses. However, during a status conference approximately 10 months after Fabricius filed his answer, the trial court granted Fabricius leave to file an affirmative defense “to preserve for appeal” the issue of whether the limitations provisions prescribed by
¶ 13 After the parties had conducted discovery for several months, Landreth moved for a summary determination that Fabricius was jointly and severally liable for PLF‘s debts, including the alleged professional negligence and negligent misrepresentations of PLF. Landreth argued that there was no genuine dispute of material fact that PLF was either an unincorporated association organized for pecuniary profit, of which Fabricius was a member, or a “partnership by estoppel” pursuant to
¶ 14 Landreth also submitted various documents in support of his motion, including (1) reported decisions of the Illinois Appellate Court (Third District) from January 1998 through June 2008 identifying Fabricius as an attorney with the law firm of PLF; (2) written appearances and other documents filed with state and federal courts identifying Fabricius as an attorney and/or partner with the law firm of PLF; (3) draft easements and draft property agreements provided to Landreth in connection with his work for the City identifying PLF as the preparer of the easements and the law firm to which notices of the property agreements should be sent; and (4) admissions by Fabricius that he shared office space, a copy machine, a fax machine, a telephone system and utilities, and other unspecified expenses with Pool & Leigh, P.C., from July 1995 until February 2006.
¶ 15 Landreth also moved for a default judgment аgainst PLF as to Landreth‘s professional negligence and negligent misrepresentation claims. Landreth provided notice and copies of this motion to attorneys for defendants Leigh, Anita L. Kopko, and Fabricius. The trial court invited Fabricius to file a written opposition to Landreth‘s motion for default judgment. Fabricius did not file a response or a written objection to Landreth‘s motion. Nor did Fabricius arrange for counsel to appear on behalf of PLF to oppose the motion.
¶ 16 On October 4, 2013, Fabricius filed its response to Landreth‘s motion for summary determination. Attached to the response was the affidavit of Raymond Fabricius attesting that (1) he is the president and sole shareholder of Fabricius; (2) from July 1995 to February 6, 2006, Fabricius and Pool & Leigh, P.C., shared office space and some expenses but did not share profits, income, or clients, including the City; and (3) Fabricius never met with Landreth or the City concerning the matters raised in Landreth‘s lawsuit, nor did he participate in performing or consulting as to the legal services purportedly provided by Leigh relative to the matter complained of in Landreth‘s lawsuit. Fabricius‘s written response to Landreth‘s motion for summary determination made no mention of Landreth‘s motion for default judgment against PLF.
¶ 17 On November 22, 2013, the trial court conducted a hearing on Landreth‘s motions. During the hearing, the trial court again invited Fabricius to be heard on Landreth‘s default judgment motion against PLF. Counsel for Landreth responded that he “did not think [he had] a legal basis to object to the actual entry of default.” However, “given the potential legal ramifications” to Fabricius, counsel asked that the court require proof of the
¶ 18 The triаl court granted Landreth‘s motion for summary determination and ruled that Fabricius was jointly and severally liable for PLF‘s debts. In so ruling, the trial court found that there was no genuine dispute of material fact that PLF was either an unincorporated association organized for pecuniary profit, of which Fabricius was a member, or a “partnership by estoppel” under
¶ 19 The trial court also granted Landreth‘s motion for default judgment against PLF. Based on the record evidence, including a consent judgment previously entered pursuant to a settlement wherein defendant Leigh admitted his personal liability for professional negligence and negligent misrepresentation, the trial court exercised its discretion to grant the default judgment without requiring a prove-up of Landreth‘s negligence allegations against PLF. On December 23, 2013, the trial court entered a default judgment of liability in favor of Landreth and against PLF. Fabricius never moved to vacate the default judgment. Nor did it engage counsel to move to vacate the default judgment on PLF‘s behalf.
¶ 20 On January 8, 2014, Landreth moved for summary judgment as to Fabricius‘s liability to Landreth. Landreth‘s motion asserted that, because the trial court had entered a default judgment against PLF and had ruled that Fabricius was jointly and severally liable for PLF‘s debts, Landreth was entitled to summary judgment in his favor and against Fabricius as to liability. In response, Fabricius argued that it was not bound by the default judgment entered against PLF. After conducting a hearing, the trial court granted Landreth‘s motion for summary judgment and ruled that Fabricius was jointly and severally liable for the judgment against PLF. In so ruling, the trial court noted that Fabricius “certainly had the opportunity” to present personal defenses contesting that it was jointly and severally liable for PLF‘s debts.
¶ 21 More than one year later, Fabricius moved for summary judgment as to liability, arguing that Landreth‘s claims against Fabricius were untimely under
¶ 22 Landreth filed a motion for summary judgment as to damages, which the trial court granted in part. After the parties resolved their remaining disputes as to damages by agreement, the trial court entered a final judgment against Fabricius in the amount of $951,719.57.
¶ 23 This appeal followed.
ANALYSIS
¶ 25 On appeal, Fabricius argues that the trial court erred by (1) denying Fabricius‘s motion to dismiss Landreth‘s claims against Fabricius on statute of limitations grоunds, (2) summarily determining that Fabricius is jointly and severally liable for the professional negligence and negligent misrepresentations of PLF, and (3) granting Landreth‘s motion for summary judgment against Fabricius as to liability. Fabricius
1. Fabricius‘s Motion to Dismiss
¶ 27 Fabricius argues that the trial court erred in denying its
¶ 28 Fabricius did not identify any specific statute of limitations in his motion to dismiss. On appeal, Fabricius argues that Landreth‘s claims were untimely under
¶ 29 In the alternative, Fabricius argues that the six-year statute of repose prescribed by
¶ 30 These arguments fail for several reasons. As an initial matter, Fabricius forfeited any reliance on
¶ 31 However, even assuming arguendo that all of Fabricius‘s arguments under
¶ 32 In any event, even if
“If a person liable to an action fraudulently conceals the cause of such action from the knowledge of the person entitled thereto, the action may be commenced at any time within 5 years after
the person entitled to bring the same discovers that he or she has such cause of action, and not afterwards.” 735 ILCS 5/13-215 (West 2012) .
In its motion for reconsideration of the trial court‘s initial order granting Fabricius‘s motion to dismiss, Landreth argued, inter alia, that
¶ 33 Fabricius argues that
¶ 34 However, Fabricius has forfeited any reliance on the so-called “reasonable time rule” by failing to raise it before the trial court, either as an affirmative defense or as argument in support of Fabricius‘s motion to dismiss (or in opposition to Landreth‘s motions for reconsideration). Village of Roselle v. Commonwealth Edison Co., 368 Ill. App. 3d 1097, 1109, (2006) (“As a general rule, arguments for dismissal that are not raised at the trial court level are waived and cannot be raised for the first time on appeal.“); Fox, 375 Ill. App. 3d at 45 (“the expiration of a statute of limitations is an affirmative defense, which is forfeited if not timely raised in the trial court” either in an answer or a motion to dismiss); McRaith v. BDO Seidman, LLP, 391 Ill. App. 3d 565, 584 (2009) (“statutory of repose
¶ 35 Fabricius further argues that, even if the trial court correctly determined that the five-year limitations period prescribed by
¶ 36 In any event, the argument fails.
¶ 37 Fabricius argues that Landreth‘s claims against PLF and Fabricius accrued when the City failed to pay Landreth‘s February 2006 invoice. However, contrary to Fabricius‘s argument, the
¶ 38 In any event, the date when Landreth knew or reasonably should have known of his injury and its wrongful cause cannot be determined as a matter of law in this case. Accordingly, the trial court did not err in denying Fabricius‘s motion to dismiss or in finding Landreth‘s claims timely under
¶ 39 Landreth argues in the alternative that his claims for derivative liability against Fabricius did not accrue until judgment was entered against PLF in December 2013. See, e.g., American Star Energy & Minerals Corp. v. Stowers, 457 S.W.3d 427, 428 (Tex. 2015) (under the Texas Partnership Act, claims against partner for debts and liabilities incurred by a partnership do not accrue until after a liability judgment is entered against the partnership); see generally Anixter Brothers, Inc. v. Central Steel & Wire Co., 123 Ill. App. 3d 947, 953 (1984) (claim for implied contractual indemnity does not accrue before primary liability is determined, although third-party claim for indemnity may be filed by indemnitee in initial action before accrual of indemnity claim to facilitate settlement). Because we find that the trial court correctly denied Fabricius‘s motion to dismiss for the reasons set forth above, we decline to address Landreth‘s alternative argument.
2. Fabricius‘s Joint and Several Liability for the Judgment Against PLF
¶ 41 Fabricius argues that the trial court erred in granting Landreth‘s motion for summary determination that Fabricius is jointly and severally liable for the default judgment entered against PLF.
¶ 42 The trial court ruled that Fabricius was jointly and severally liable for the professional negligence and negligent misrepresentations of PLF referenced in counts VI and VIII of Landreth‘s third amended complaint for two independent reasons. First, the trial court held that there was no genuine dispute of material fact that PLF was a voluntary unincorporated association organized for pecuniary profit or that Fabricius was a member of that association. Second, the trial court held that there was no genuine dispute of material fact that Fabricius was a partner of a “partnership by estoppel” (i.e., PLF) pursuant to
¶ 43 “One who permits the holding out of another as his partner is estopped to deny the partnership relationship as against third persons who rely on the existence of the apparent partnership.” Bergman & Lefkow Insurance Agency v. Flash Cab Co., 110 Ill. App. 2d 415, 430 (1969). Common law partnership by estoppel principles have been codified at
¶ 44 All three elements were met in this case. Landreth presented unrebutted evidence in the form of court filings and other public documents that showed that, from June 1998 through February 2006, Fabricius had repeatedly and publicly represented that PLF was a law firm and that Fabricius was an attorney practicing with the PLF law firm.5 It was also undisputed that PLF used stationary bearing the legend “Law Offices, POOL, LEIGH & FABRICIUS,” and used letterhead listing those attorney names and stating that PLF was “An Association Including Professional Corporations.” In addition, Landreth signed an agreement that identified PLF as counsel for Landreth and the City. (The agreement was filed for public inspection before being executed by the City.) Moreover, Landreth‘s testified that he reasonably believed that he was represented by PLF in the drafting of the agreement, that an attorney with the last name of
¶ 45 This evidence was sufficient to establish that PLF was a partnership by estoppel and that Fabricius was a partner in that partnership. See, e.g., In re Estate of Pinckard, 94 Ill. App. 3d 34, 42-43 (1980) (noting that individuals who hold themselves out to the public as а law firm partnership may be held liable on a partnership by estoppel theory); J. Huizinga Cartage Co. v. Bedrock Enterprises, 177 Ill. App. 3d 346, 348-49 (1988) (ruling that partnership by estoppel could be found where defendants cosigned land trust document, indicated that bills should be sent to one of the codefendants at the purported partnership, and cosigned stock certificates given to plaintiff); see generally Dow v. Jones, 311 F. Supp. 2d 461, 470-71 (D. Md. 2004) (partnership by estoppel could be found under District of Columbia‘s Uniform Partnership Act provisions where, inter alia, defendant‘s name was included in law firm name and plaintiff was never advised by anyone that the defendant was not a partner or that the law firm was not a partnership).
¶ 46 Fabricius argues that there was no evidence that Landreth ever met with Fabricius “regarding any of the dealings he had which are the subject of the lawsuit, nor that he discussed it with him.” However, because the unrebutted evidence established that Fabriсius publicly held itself out as a partner or member of the PLF law firm, a partnership by estoppel may be found even if Fabricius never met with Landreth and never knew that the representation of a partnership was made to Landreth.
¶ 47 Fabricius did not rebut the evidence of a partnership by estoppel presented by Landreth. Nor did Fabricius suggest that it ever disclaimed such a partnership during the relevant time period. Thus, we hold that the trial court did not err in finding Fabricius liable for PLF‘s professional negligence and negligent misrepresentations under a partnership by estoppel theory.
3. Landreth‘s Motion for Summary Judgment as to Fabricius‘s Liability
¶ 49 After the trial court granted Landreth‘s motion for summary determination, Landreth moved for summary judgment as to Fabricius‘s liability. In its motion, Landreth asserted that, because the trial court had entered a default judgment against PLF and had ruled that Fabricius was jointly and severally liable for PLF‘s professional negligence, Landreth was entitled to summary judgment against Fabricius as to liability. After conducting a hearing, the trial court granted Landreth‘s motion and ruled that Fabricius was jointly and severally liable for the judgment against PLF. In so ruling, the trial court noted that Fabricius “certainly had the opportunity” to present personal defenses contesting that it was jointly and severally liable for PLF‘s debts.
¶ 51 Moreover, Fabricius participated in the litigation, asserted personal defenses to Landreth‘s motion for summary determination, and lost. The trial court repeatedly invited Fabricius to oppose the entry of a default judgment against PLF. Nevertheless, despite the evident effect that such a judgment would have against Fabricius, Fabricius did not assume PLF‘s defense, engage counsel for PLF, or oppose the entry of default judgment against PLF. Nor did Fabricius move to vacate the default judgment subsequently entered against PLF. Under these circumstances, Fabricius forfeited any defense to liability that PLF may have interposed, and Fabricius cannot reasonably contend that it is not bound by the default judgment entered against PLF.
4. The Striking of Fabricius‘s Motion for Summary Judgment
¶ 53 Fabricius further argues that the trial court abused its discretion by striking its motion for summary judgment. Fabricius‘s motion argued that Landreth‘s claims were time-barred under
¶ 54 A trial court has the inherent authority to control its docket, which includes the discretion to strike tardy pleadings. See, e.g., Bank of America, N.A. v. Land, 2013 IL App (5th) 120283, ¶¶ 4, 19-24 (holding that the trial court did not abuse its discretion by striking defendant‘s response to plaintiff‘s motion for summary judgment and defendant‘s motion for leave to amend its answer by asserting new affirmative defenses and counterclaims where defendant‘s motions were filed on the day the plaintiff‘s motion for summary judgment was scheduled for hearing). Although Fabricius‘s motion for summary judgment was filed within the trial court‘s initial deadline for dispositive motions, it was filed after a default judgment had been entered against PLF and after summary judgment had been granted against Fabricius as to liability. At that time, the only
¶ 55 Moreover, at the time Fabricius filed its motion for summary judgment, it had already forfeited the arguments it sought to raise in that motion by failing to raise those arguments in its answer6 or motion to dismiss or in opposition to Landreth‘s motions for reconsideration, summary determination, or summary judgment. Village of Roselle, 368 Ill. App. 3d at 1109 (“arguments for dismissal that are not raised at the trial court level are waived and cannot be raised for the first time on appeal“); Fox, 375 Ill. App. 3d at 45 (“the expiration of a statute of limitations is an affirmative defense, which is forfeited if not timely raised in the trial court” either in an answer or a motion to dismiss); Grainger v. Harrah‘s Casino, 2014 IL App (3d) 130029, ¶ 32 (plaintiff forfeited argument not raised in response to defendant‘s motion for summary judgment); Myoda Computer Center, Inc. v. American Family Insurance Co., 389 Ill. App. 3d 419, 423 (2009) (failure to oppose a summary judgment motion by filing counter-affidavits is fatal). Further, as noted above, by failing to oppose the default judgment entered against PLF, Fabricius forfeited the right to assert any defenses belonging to PLF as a defense to Fabricius‘s liability.
¶ 56 Accordingly, under the circumstances presented here, the trial court did not abuse its discretion in granting Landreth‘s motion to strike Fabricius‘s motion for summary judgment.
CONCLUSION
¶ 58 For the reasons set forth above, the judgment of the circuit court of La Salle County is affirmed.
¶ 59 Affirmed.