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12/09/88 Robert A. Andersen, v. Resource Economics

December 9, 1988

ROBERT A. ANDERSEN, PLAINTIFF-APPELLANT

v.

RESOURCE ECONOMICS CORPORATION ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION

532 N.E.2d 350, 177 Ill. App. 3d 358, 126 Ill. Dec. 665 1988.IL.1781

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

APPELLATE Judges:

JUSTICE PINCHAM delivered the opinion of the court. LORENZ,* P.J., and MURRAY, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE PINCHAM

Plaintiff, Robert A. Andersen, initiated this action against the defendants, Resource Economics Corporation, Thompson R. Adams and Donald E. Pollard. The trial court granted Resource Economics Corporation's motion to dismiss Andersen's second amended complaint and denied Andersen's motion for leave to file a third amended complaint. Andersen appeals.

Robert A. Andersen's second amended complaint sought damages for fraud, an injunction, an accounting and an order restraining the depletion, wasting, the paying out or the distribution of Resource Economics Corporation's profit to the defendants, Thompson R. Adams and Donald E. Pollard. Andersen's complaint alleged that in 1977, he and the defendants, Thompson R. Adams and Donald E. Pollard, formed the defendant corporation, Resource Economics Corporation, to sell caustic soda. In the incorporation of Resource Economic Corp., Andersen and the defendants, Adams and Pollard, each contributed $1,000 for one-third of the outstanding shares of Resource Economics Corporation. Andersen was employed as an officer and employee of the defendant, Resource Economics Corporation, from January 1977 to December 1979. Andersen further alleged that in December of 1979, the defendants, Adams and Pollard, who then owned two-thirds of the stock, forced him to resign. Andersen maintained that the defendants in so doing fraudulently misrepresented material facts. Andersen claimed that the defendants, Adams and Pollard, (1) misrepresented to Andersen that his shares of Resource Economics Corporation stock were worthless; (2) concealed from Andersen the fact that the value of caustic soda had substantially increased; and (3) concealed from Andersen a pending offer from Resource's supplier, Solvay Chemical, to purchase a $500,000 contract. Andersen also maintained that in reliance on defendants' misrepresentations of material facts he sold his shares of Resource Economics Corporation stock to the defendants at a nominal price on March 15, 1980.

The issue on this appeal deals with the jurisdiction of this court and the trial court. Plaintiff contends the trial court erred in its determination that it did not have jurisdiction to hear or to grant plaintiff's motion for leave to file a third amended complaint. The defendants, on the other hand, urge that this court lacks jurisdiction to consider plaintiff's instant appeal.

The record reflects that on March 28, 1985, the trial court entered an order dismissing plaintiff's second amended complaint for failure to state a cause of action for fraud. On April 26, 1985, at 2:17 p.m., plaintiff filed a notice of appeal from that dismissal order. This notice of appeal, which divested the trial court of jurisdiction and stayed the proceedings in the trial court, was filed within the 30-day period within which plaintiff was entitled to file a motion for reconsideration of the trial court's March 28, 1985, order which dismissed his second amended complaint. In the absence of the filing of the notice of appeal on April 26, 1985, plaintiff was entitled to file in the trial court (and obtain a ruling on) his motion for leave to file his third amended complaint. Although plaintiff had filed his notice of appeal, plaintiff thereafter, at 4:17 p.m. on April 26, 1985, filed in the trial court his motion for leave to file a third amended complaint. In his motion for leave to file a third amended complaint plaintiff alleged:

"1. Plaintiff intends to plead further allegations, new and distinct from the prior allegations, which have been dismissed by this Court.

2. Time is necessary to fully research and draft the said further allegations as a new theory of recovery is involved.

3. The said further allegations state a theory substantively different from the prior allegations.

4. That facts heretofore not pleaded, and unknown to plaintiff's attorney, have come to be known.

5. That the said new allegations of fact also cure any defect in the Second Amended Complaint, previously dismissed by this Court."

As previously stated, the notice of appeal from the trial court's March 28, 1985, dismissal order, which was filed at 2:17 p.m. on April 26, 1985, divested the trial court of jurisdiction and further proceedings in the trial court were thereby stayed. Plaintiff subsequently filed, at 4:17 p.m. April 26, 1985, a motion for leave to file a third amended complaint which pended unresolved in the trial court, which lacked jurisdiction to rule on the motion. ...


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