Appeal from the Circuit Court of Cook County; the Hon. Joseph
Wosik, Judge, presiding.
PRESIDING JUSTICE JOHNSON DELIVERED THE OPINION OF THE COURT:
Plaintiff, Peoples Gas Light & Coke Company (Peoples Gas), appeals an order of the trial court granting attorney fees to defendant, James Flanagan, under section 41 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 41). The sole issue presented for review is whether the trial court abused its discretion in awarding attorney fees.
On March 31, 1976, Marie Fewer and Chicago Title and Trust Company, as trustee, filed a complaint against Arthur Grant to foreclose a trust deed for property located at 6726 South Oglesby Avenue in Chicago, Illinois. The subject property was a three story apartment building. On June 21, 1976, James M. Flanagan was appointed receiver. He filed his first report on July 13, 1976, stating that in his opinion "potential rental income will not offset the cost of repairs, nor cover monthly operating costs."
On May 2, 1978, Flanagan filed an interim report. The following information was listed on his time sheets: a 10-minute call to the gas company on June 28, 1976 regarding service usage and a 20-minute call to the gas company on November 9, 1976 regarding service usage. Flanagan filed his second interim report on June 30, 1979, and was discharged as receiver.
On January 26, 1978, Peoples Gas filed an amended complaint against Arthur Grant, alleging that he owed money for gas service to the building. On October 15, 1980, Peoples Gas filed a second amended complaint, adding Fewer and Flanagan as defendants. Peoples Gas filed a third amended complaint against the three defendants on April 10, 1981, stating that it had provided service to the building from November 1970 until July 22, 1977 and that $2,466.55 was due. In count II, Peoples Gas alleged the following against Flanagan:
"6. That on July 26, 1976, the Plaintiff supplied said premises with natural gas service at the request of said Receiver; that payments were made on the account, but that on July 22, 1977 all service was terminated because said Defendants had failed to pay the sum of $2,466.55 which remained due and owing at the time.
7. That Defendant, James Flanagan, breached his duty as a court appointed Receiver by doing one or more of the following:
(a) failed to inform and advise the court upon accepting said position that the property in question could not be operated in a profitable manner.
(b) operated the property in question at a loss for more than one year without advising the court or the creditors of same.
(c) failed to notify and advise the Plaintiff, as a creditor, that the property could not be operated in a profitable manner, so as to diminimize the loss sustained by Plaintiff.
(d) failed to fully and completely pay Plaintiff's bill for services rendered after having collected sufficient rents to pay for same."
On July 22, 1981, the foreclosure action and the gas company complaint were consolidated.
On July 23, 1981, Flanagan answered the complaint, stating that no funds were available from rents to pay the amount owing and that he never asked Peoples Gas to supply gas service and never paid any amount owed Peoples Gas during his receivership. He asked for costs and attorney fees under section 41 of the Civil Practice Act which provides that "[a]llegations * * * made without reasonable cause and found to be untrue, shall subject the party pleading them to the payment of reasonable expenses, actually incurred by the other party * * * together with a reasonable attorney's fee * * *." Ill. Rev. Stat. 1979, ch. 110, par. 41.
On September 18, 1981, Peoples Gas admitted that Flanagan had informed the court of the unprofitability of the building in his report filed July 13, 1976. It filed a fourth amended complaint against the same defendants on October 8, 1981, alleging that Flanagan breached his duties as receiver by failing to ...