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05/09/89 John Rokacz, v. John Rokacz

May 9, 1989

APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SECOND DIVISION IRIS SHERMAN, PLAINTIFF-APPELLANT

v.

JOHN ROKACZ, DEFENDANT-APPELLEE



Before the scheduled closing the plaintiff and her attorney, Leonard Blum, learned that the sale of the property would not generate sufficient funds to satisfy all the payments and the attorney fees owed to her and to McDermott for which she was responsible. Rokacz became aware of this deficiency from the plaintiff's attorney, Blum, the night before the scheduled closing.

538 N.E.2d 898, 182 Ill. App. 3d 1037, 131 Ill. Dec. 523 1989.IL.700

Appeal from the Circuit Court of Cook County; the Hon. Virgil W. Timpe and the Hon. Sidney Jones III, Judges, presiding.

As Amended September 9, 1989.

APPELLATE Judges:

JUSTICE EGAN* delivered the opinion of the court. HARTMAN and SCARIANO, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE EGAN

The plaintiff, Iris Sherman, sued the defendant, John Rokacz (Rokacz) and Aaron Spiezer (Spiezer) for monies due on a contract. The case was dismissed as to Spiezer, who had been adjudicated bankrupt. The trial between Sherman and Rokacz was heard by Judge Virgil Timpe, who entered judgment for Rokacz at the close of the plaintiff's case. Judge Timpe retired, and the plaintiff's post-trial motion was denied by Judge Sidney Jones.

In late 1979, the plaintiff contracted to purchase an apartment building in Oak Park owned by Mr. and Mrs. McDermott. The plaintiff managed the apartment building for roughly two years. In November 1981 she entered into an agreement with Spiezer in which she assigned to him her interest in the contract with the McDermotts. Although Rokacz was not a party to that contract, the plaintiff testified that by February 1982, when the closing took place, she had learned of his involvement with Spiezer.

Spiezer and Rokacz set up a general partnership, the sole purpose of which was to manage the apartment building. Rokacz acquired his interest in the installment contract when Spiezer assigned it to the partnership. The interest the partnership held on the property was subject to the plaintiff's obligations to the McDermotts and to the partnership's obligations to the plaintiff. Rokacz paid $13,000 for his interest. Spiezer was the managing partner who handled the day-to-day operations of the building, because Rokacz had put up a disproportionate share of the purchase funds.

Later in 1984, the McDermotts assented to the plaintiff's assignment to Spiezer and Rokacz. Spiezer continued to manage the property during the two years following the purchase. Rokacz had no involvement in the management. The plaintiff was required to hire attorneys on several occasions because Spiezer and Rokacz, both attorneys, failed to fulfill their various obligations under the agreements and to make timely payments. The plaintiff would receive notices from Mr. McDermott informing her that he in turn had received notices from the bank that the first and second mortgages had not been paid. She would then contact Spiezer, and he would follow up by making payments at the bank. The plaintiff was forced to pay the attorney fees for McDermott pursuant to the 1984 agreement. The amount of attorney fees she paid was not disputed at the trial.

The plaintiff said that in July 1983 she first made mortgage payouts and that she did not receive any payments from Spiezer and the defendant from June 1, 1983, to June 1, 1984. In March 1984 Spiezer told her that he had a buyer interested in the property. He also promised Rokacz that, upon closing the deal, he would pay him a total of $16,000 which consisted of $13,000 of Rokacz's initial investment and $3,000 in appreciation. Spiezer also said that he would hold Rokacz harmless for any claims made against the partnership after the closing which was set for June 1, 1984.

Rokacz went to the closing the following day to assure that he received the $16,000 he had been promised and that the deficiency would be paid. The plaintiff, Blum, Rokacz, Spiezer, a representative of McDermott and the buyers all met at Safeco Title Company. Spiezer revealed that the scheduled sale would still result in a $15,000 shortfall. Blum and Spiezer went into a conference room without Rokacz to determine how Spiezer could come up with the shortfall in order that the closing could go forward the following day. The plaintiff claimed that a total of approximately $38,000 was owed to her including the attorney fees that she had advanced and which she owed to McDermott.

After negotiations between Blum and Spiezer were concluded, Spiezer agreed that the plaintiff would receive approximately $24,000 from the sale; he also signed a $10,000 promissory note drawn up by Blum; and he orally promised to deliver $4,000 or $5,000 to the plaintiff on June 4, the new day set for the closing. According to Blum, Rokacz said that he wished to incur no further interest expenses and that he would like the note discounted if it were paid the first week of July rather than September 1. The plaintiff agreed to this. Rokacz refused to sign the note until he was paid the money Spiezer owed him. Spiezer told Rokacz that he would take care of him and promised to pay him on June 4.

On that date, the plaintiff and Blum arrived at the title company office in the morning. Rokacz and Spiezer were not present, and attempts to reach them by phone at their offices proved unsuccessful. The plaintiff left at approximately 1 p.m., but before she left she instructed Blum to do whatever was necessary to close the sale that day. Two hours later the title company personnel informed Blum that a 3 p.m. deadline existed for transactions to be concluded that day. Although Rokacz and Spiezer still had not arrived, Blum took those steps necessary to close the deal including the preparation of a quitclaim deed that the plaintiff had signed earlier and the purchase of revenue stamps from the registrar's office. Later he took the deed to the registrar's office for filing purposes.

The next day the defendant contacted Blum and asked what had occurred the day before. Blum explained that the closing had gone through despite the fact that Spiezer never appeared and that the plaintiff was forced to conclude the deal without receiving all the money due her. Neither Rokacz nor Spiezer ever attempted to block the sale. In August 1984 Rokacz and Spiezer entered into a settlement ...


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