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07/27/88 Carriage Way Apartments, v. Helen S. Pojman Et Al.

July 27, 1988





527 N.E.2d 89, 172 Ill. App. 3d 827, 122 Ill. Dec. 717 1988.IL.1157

Appeal from the Circuit Court of Du Page County; the Hon. John S. Teschner, Judge, presiding.


JUSTICE INGLIS delivered the opinion of the court. LINDBERG, P.J., and DUNN, J., concur.


This is an interlocutory appeal pursuant to Supreme Court Rule 307(a)(1) taken from a preliminary injunction entered against plaintiffs. We reverse.

On appeal, plaintiffs contend (1) that the trial court's summary award of a mandatory injunction was tantamount to a prejudgment attachment and violated due process; (2) that plaintiffs failed to demonstrate the lack of an adequate monetary remedy at law; (3) that the trial court abused its discretion in summarily granting a preliminary mandatory injunction without proper pleading or proof, and without bond; (4) that the trial court was divested of jurisdiction to modify its January 25, 1988, order due to the pendency of defendants' notice of appeal; (5) that the preliminary injunction order should be dissolved because the record is insufficient to sustain its issuance without bond; and (6) that the preliminary mandatory injunction alters the status quo and therefore requires reversal.

The entitled litigation involves a real estate partnership entered into between plaintiffs, James J. Avgeris, Margaret P. Rathje, S. Louis Rathje, Allen Koranda, Kenneth Koranda, and defendants, Helen S. and H. Steven Pojman.

The partnership agreement provided for the purchase, lease, development, and sale of an apartment complex in Burr Ridge, Illinois, commonly known as Carriage Way Apartments. Pursuant to the partnership agreement, defendants each owned 8.33% of the partnership assets, profits, and losses. The partnership agreement also provided that when a partner retired from the partnership the remaining partners were to buy out the retiring partner's interest.

The above litigation originated when the partnership, pursuant to the partnership agreement, filed an action seeking the appointment of an appraiser to determine the value of the partnership real estate. The complaint alleged that defendants had given notice to the partners that they intended to withdraw from the partnership and requested that, since the appraisers retained by defendants and the remaining parties could not agree upon the value of the property or the appointment of a third appraiser, the court determine and appoint a third appraiser whose opinion concerning the value of the real estate would be final. The complaint was later amended to include James P. Avgeris, Margaret P. Rathje, S. Louis Rathje, Allen Koranda, and Kenneth Koranda, individually and d/b/a Carriage Way Apartments, a partnership, as plaintiffs.

On May 14, 1985, the court appointed Thomas Collins to conduct an appraisal of the partnership real estate and to report his determination of value to the court.

Collins filed two appraisals with the court. On June 13, 1985, defendants filed a motion for leave to file a counterclaim against the partnership and a third-party complaint against the remaining plaintiffs. It is unclear as to why defendants filed a third-party complaint when the alleged third-party defendants had already been named as plaintiffs.

The trial court, on plaintiffs' motion, struck and dismissed counts I, II, and III of the counterclaim but denied plaintiffs' motion to strike

Defendants claim that they subsequently served written notice upon all of the remaining partners that Mrs. Pojman was withdrawing her notice to withdraw from the partnership since the withdrawal was not perfected, and H. Steven Pojman, her son, served notice on the remaining partners that he had never tendered a withdrawal, and if he had tendered a withdrawal, that he was withdrawing that notice because the withdrawal was not perfected. However, in their answer to the complaint the Pojmans admitted paragraph 6 of the complaint, which stated "that on June 25, 1984, Defendants caused written notification to be served upon all other partners that Defendants were retiring from the partnership."

The Pojmans requested, and were granted, leave to file an amended counterclaim and third-party complaint in which they sought an accounting, a declaratory judgment to declare that they were still partners of the partnership and entitled to all of the rights as partners, and a temporary and permanent injunction to restrain the partners and the partnership from disbursing defendants' interest in the proceeds of any sale of the partnership property., Plaintiffs filed an answer and motion to dismiss defendants' counterclaim and third-party complaint, which motion to dismiss has not been heard.

Thereafter, on January 19, 1988, defendants served a notice of motion and a copy of an emergency petition for injunctive relief and damages based on conversion of funds which notice called for hearing instanter on January 25, 1988, at 9:30 a.m. before the Honorable John Teschner. The emergency petition alleged that the partnership property had been sold and that all proceeds from such sale had been distributed without payment to the Pojmans of their proportional share.

Plaintiffs did not file a response to the emergency petition, but instead appeared through counsel of record and requested a continuance. Counsel for plaintiffs acknowledged that the property was sold for a price which he believed was in excess of $8.1 million. He also acknowledged that the proceeds had been distributed to all of the partners to the partnership except for the Pojmans.

After recessing to review the emergency petition, the court resumed the bench and acknowledged that there was a pending dispute existing in the matter as to the amount of funds defendants were to receive and whether they were entitled to benefits as a withdrawing partner and whether the withdrawal ever took place or had been rescinded. Plaintiffs' counsel requested seven days to find out whether the funds had been dissipated by his clients and what their intentions were. He further stated that two of his clients, the Korandas, had placed funds in an escrow account and asked that he be given seven days in which to allow the remaining plaintiffs to do something similar. He asked that in the interim the court "enter an order against the plaintiffs that there be a hold on any funds that were received by any of the plaintiffs pursuant to the closing and that they be prohibited from dissipating any of those funds."

The court entered the January 25, 1988, order which required plaintiffs to deposit into an escrow account, or several escrow accounts, the aggregate sum of $1,249,000; that plaintiffs provide defendants with a copy of the closing documents concerning the sale of the partnership property on or before January 28, 1988; and that plaintiffs appear in court on January 28, 1988, at 9:30 a.m. and show proof that the funds had been deposited. The court issued the injunction without bond.

On January 28, 1988, before the hearing set for that date, plaintiffs filed a notice of appeal from the order of January 25, 1988. When the matter came before the court at 9:30 a.m., plaintiffs' attorney presented the closing documents which pertained to the sale of the partnership real property. The closing documents apparently disclosed that the sale had occurred on June 25, 1987, for a purchase price of $8,412,000 and that the aggregate net proceeds of the sale were $6,276,210.

The court asked plaintiffs' counsel where defendants' funds were located. In response, counsel presented two passbooks from Mid America Savings and Loan Association which each showed that $98,000 had been deposited into an account by Al Koranda and Kenneth Koranda for a total of $196,000. Both accounts showed plaintiffs' counsel, Patrick Williams, as escrow agent.

Plaintiffs' counsel orally moved the court to stay further enforcement of the order of January 25, 1988. The court ordered that plaintiffs' motion to stay be reduced to writing and filed by 5 p.m. on the same day to be heard at 9:30 a.m. the following morning, January 29, 1988. The court continued the case to the following day, January 29, 1988, at 9:30 a.m. for James Avgeris, S. Louis Rathje and Margaret P. Rathje to produce the funds required to be posted in the January 25, 1988 order. The court ordered that the sum of $196,000, posted by Allen and Kenneth Koranda, remain in escrow subject to further order of the court.

On January 29, 1988, the matter came before the court pursuant to the order of January 28, 1988, for hearing on plaintiffs' motion to stay enforcement of the mandatory injunction. After hearing, the court denied plaintiffs' motion to stay enforcement.

The court granted defendants' motion to file an amended emergency petition based upon the information provided to them in the closing documents. Defendants' verified amended emergency petition modified the original petition to conform to the sums set forth in the closing documents and reduced the amount requested to be posted from $1,249,000 to $1,044,534.69. The amended petition prayed the court to enter an order requiring the immediate payment to defendants of at least $490,061.54.

On January 29, defendants also filed a verified petition for a rule to show cause why James P. Avgeris, S. Louis Rathje and Margaret P. Rathje should not be held in contempt of court for failing to comply with the court's order of January 25, 1988, by ...

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