APPEAL from the Circuit Court of Cook County; the Hon.
REGINALD J. HOLZER, Judge, presiding.
MR. PRESIDING JUSTICE GOLDBERG DELIVERED THE OPINION OF THE COURT:
Rehearing denied April 20, 1981.
Josephine D. Prassas (plaintiff) brought suit against the La Salle National Bank (trustee), Nicholas W. Prassas & Company, Nicholas W. Prassas, and Elaine Prassas, now known as Elaine Chipman (defendants), to recover management fees and to prohibit the corporation from managing a shopping center on property in which plaintiff and Elaine P. Chipman are co-beneficiaries. After a bench trial, the court denied the relief requested by plaintiff regarding management fees and ordered the shopping center sold at auction. Plaintiff filed a motion for a new trial which was denied. Plaintiff appeals from both orders. Defendants cross-appeal as to the sale of the property.
Prior to October 15, 1954, George W. Prassas and his brother, Nicholas W. Prassas, were the sole shareholders in George W. Prassas & Company (corporation), a real estate management corporation which owned a parcel of land on which a shopping center was constructed. On that date George Prassas, owning 51 percent of the stock, and Nicholas Prassas, owning 49 percent, established a land trust with the La Salle National Bank as trustee. The brothers conveyed the property to the Bank as such trustee for the benefit of the corporation. The corporation continued to manage the property, but charged no fees for this service. The trust agreement contained no express language concerning management fees.
On November 24, 1957, the corporation executed an instrument entitled "Assignment." This document transferred the beneficial interest in the trust to plaintiff, wife of George Prassas, and Elaine Prassas, now Elaine Chipman, wife of Nicholas, in equal shares. Plaintiff and Elaine Prassas (Chipman) executed an acceptance in which they accepted the assignment, but authorized two officers of the corporation to "sign all necessary documents in connection with the said real estate * * *." The corporation continued to manage the property without compensation.
In 1966 George Prassas died. For seven or eight years thereafter, the shopping center was managed by Nicholas Prassas without fee. At some point dissension occurred between the families of George and Nicholas. In 1974 Nicholas purchased all the interest held by George's heirs, became the sole shareholder of the corporation, and then changed the name to Nicholas W. Prassas & Company.
On August 7, 1974, Elaine Prassas (Chipman) executed an assignment of her interest to Nicholas. Nicholas executed an acceptance of the assignment dated November 21, 1974. On August 7, 1974, Nicholas executed a re-assignment of the property to Elaine Prassas (Chipman). Defendants contend this reconveyance was to correct an error "in record keeping which occurred in connection with a number of transfers of property between Nicholas and Elaine Prassas (Chipman) in preparation for their divorce." Nicholas and Elaine Prassas (Chipman) were divorced in April 1975.
In October 1974, the corporation submitted a document to plaintiff. This agreement would give the corporation a fee of 5 percent of the total gross rentals it collected, retroactive to January 1, 1974. Plaintiff never responded.
In January 1975, the corporation sent plaintiff the semi-annual financial statement for the period from July 1, 1974, through December 31, 1974, and plaintiff's share of the profits. The statement reflected retention by the corporation of a 5 percent management fee of $6260.29 for the preceding year.
Plaintiff demanded payment of this sum, but was refused. The process of charging and deducting the 5 percent fee continued.
Plaintiff contends the trial court should have ordered return of the fees retained by the corporation and permitted plaintiff to terminate management by the corporation. Defendants maintain the corporation is entitled to reasonable management fees and to continue its tenure as manager.
The rights of the parties are clearly defined by the land trust agreement and by the assignment executed by the corporation to plaintiff and Elaine Prassas (Chipman). The trust agreement provided the interest of the corporation as beneficiary "shall consist solely of a power of direction to deal with the title to said property and to manage and control said property as hereinafter provided, and the right to receive the proceeds from rentals and from mortgages, sales or other disposition of said premises, and that such right in the avails of said property shall be deemed to be personal property, and may be assigned and transferred as such * * *." The instrument also provided the "trustee shall have no duty in respect to such management or control * * *" and "will deal with said real estate only when authorized * * *."
In accordance with these provisions, on November 25, 1957, the corporation executed an assignment to plaintiff and Elaine Prassas (Chipman) of the entire beneficial interest in the trust. Plaintiff and Elaine Prassas (Chipman) executed ...