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People Ex Rel. Fahner v. Colo. Lot Owners





Appeal from the Circuit Court of Cook County; the Hon. Richard L. Curry, Judge, presiding.


Rehearing denied August 25, 1982.

Defendant, Mark P. Binstein, appeals the decision of the trial court holding him in contempt of court for violation of a consent decree and fining him $4,500. He raises the following issues for review: (1) whether his activities constituted contempt; (2) whether the trial court erred in finding that he could not purge himself of contempt; (3) whether plaintiff's conduct constituted estoppel or waiver of its rights under the consent decree; and (4) whether plaintiff's conduct constituted bad faith, thus, precluding a finding of contempt.

We affirm and modify.

On December 20, 1978, the Illinois Attorney General filed a complaint for injunctive and other relief against the Colorado City Lot Owners and Taxpayers Association (Colorado City Lot Owners), Myron R. Luchshyn and Mark P. Binstein under the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1977, ch. 1211/2, par. 261 et seq.). On February 2, 1979, a consent decree was entered between the Attorney General and Binstein. Findings in the decree were as follows:

(1) Binstein advertised, solicited and enrolled property owners of land located in Colorado City, Colorado, residing in the Chicago area, for the purpose of conducting litigation against Great Western Cities, the owner and developer of Colorado City;

(2) On November 22, 1978, Binstein mailed a "Notice of Urgent Meeting" to about 3,000 Chicago area lot owners;

(3) At a November 30, 1978, meeting, Binstein represented to lot owners that he had won large sums of money from land developers in similar circumstances when in fact those cases were still pending;

(4) Binstein represented himself to be a land sales and land fraud expert when in fact he specialized in organizing lawsuits against land developers; in 1971 he had been fined $1,000 for violating Federal securities laws;

(5) Binstein represented that large sums of money were necessary for research and legal fees, and that he received only a consultation fee when in fact he had been accused in Indiana of misappropriating most of the funds collected and not paying the attorneys retained by the lot owners' association;

(6) Binstein represented to lot owners that he performed valuable research into alleged land sale frauds of Great Western Cities, but it has not been proved whether his research has value in proving such frauds;

(7) Binstein claimed that he had negotiated with the Chicago Bar Association and various law firms to represent the lot owners, but in fact no representation agreements had been completed and no local attorneys retained;

(8) Binstein represented that past actions have been very successful when in fact no actions have been concluded and no money has been refunded to lot owners;

(9) Binstein represented that no other avenue of recovery was open to lot owners except to join the association organized by Binstein;

(10) Binstein failed to disclose that in June 1978 he executed a stipulation amounting to an assurance of voluntary compliance preventing him from soliciting funds in Wisconsin as agent for lot owners;

(11) Binstein imparts a sense of urgency when none may be necessary since most owners purchased their lots around 1970.

The decree provided the following:

(1) Binstein was permanently injoined from controlling the management, affairs and conduct of Colorado City Lot Owners;

(2) Binstein was permanently enjoined from organizing any business entity for the purpose of soliciting litigants for a lawsuit against Great Western Cities or any other business entity without entering into an assurance of voluntary compliance with the Attorney General;

(3) Binstein was permanently enjoined from any organizational role in a lot owners' association "where he might solicit, collect, negotiate, disburse, or deposit funds," on behalf of a lot owners' association "as opposed to his acting as an agent or employee of that entity";

(4) Binstein was enjoined from taking any action of any nature whatsoever relating to any Colorado City Lot Owners' funds.

On January 30, 1981, the Attorney General filed a petition for a rule to show cause why Binstein should not be held in contempt of court and a petition for emergency supplemental relief. The first petition alleged that Binstein violated the terms of the February 2, 1979, consent decree by the following acts:

(1) The Rotonda Lot Purchasers Association mailed a letter to Illinois residents who owned lots in Rotonda subdivisions in Florida. According to the letter:

(a) Lot owners were urged to attend a meeting on January 24, 1981;

(b) Lot owners were victims of a massive land fraud scheme perpetrated by the Rotonda ...

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