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06/30/89 First National Bank of v. Cort I. Lewis

June 30, 1989

FIRST NATIONAL BANK OF DEERFIELD, PLAINTIFF-APPELLANT

v.

CORT I. LEWIS, DEFENDANT-APPELLEE



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION

542 N.E.2d 124, 186 Ill. App. 3d 16, 134 Ill. Dec. 124 1989.IL.1045

Appeal from the Circuit Court of Cook County; the Hon. Charles E. Freeman, Judge, presiding.

APPELLATE Judges:

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

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LORENZ

Plaintiff, First National Bank of Deerfield, appeals from the entry of summary judgment on count I of its declaratory judgment complaint in favor of defendant, Cort I. Lewis. We affirm.

Count I of plaintiff's complaint alleged the following facts. Defendant and his father, Gerson E. Lewis (Gerson), formed a partnership under the name Gerson E. Lewis & Son (partnership) for the purpose of making investments.

Plaintiff alleged that beginning in January of 1980 until July of 1982, it "made a series of loans . . . to Gerson which were used for the partnership's investments." Because the loans were not repaid, plaintiff instituted an action against him for the unpaid balance of the loans. Plaintiff obtained a judgment against Gerson for $196,430.33 plus attorney fees, which was also not paid., Plaintiff also alleged that the partnership held a checking account with plaintiff, and in August of 1982, it was overdrawn in the amount of $8,180.98.

Defendant, in his own name, had a money market account and a certificate of deposit with plaintiff. On July 20, 1985, plaintiff transferred funds from defendant's money market account into the partnership checking account to cover the overdraft. On July 23, 1985, plaintiff notified defendant that it would also set off the remaining balance of his money market account and his certificate of deposit for the judgment that plaintiff obtained against Gerson.

Plaintiff also alleged "on information and belief" that Gerson attempted to make himself "judgment proof" by transferring funds and other property from the partnership to defendant in his name but "secretly held" for the partnership.

Plaintiff asked the court to declare that Gerson E. Lewis & Son was a partnership at the time in question; that the overdraft and the judgment against Gerson were partnership debts for which defendant was responsible; that defendant's money market account and certificate of deposit were subject to plaintiff's right of setoff; and that the setoff was proper.

Defendant answered the complaint and denied that he entered into a partnership with Gerson, denied knowledge of the loans made to Gerson, denied knowledge of the overdraft but admitted that plaintiff transferred $8,180.98 from his money market account in July of 1985. Defendant also denied that the judgment against Gerson was a partnership debt.

Defendant moved for summary judgment arguing that plaintiff did not have factual support for the allegations in its complaint, relying on the deposition testimony of Alan Meyer, who was president of plaintiff at the time in question. Defendant also argued that even if there was factual support for the allegations, as a matter of law, plaintiff could not set off a partnership debt against the individual account of a partner, relying on International Bank v. Jones (1887), 119 Ill. 407, 9 N.E. 885.

In response to the motion, plaintiff argued that although Mayer "lacked personal knowledge of some of the ultimate facts stated in the [c]omplaint, . . . [o]ther bank officers and employees will testify as to their personal knowledge" and documents would be introduced at trial to prove the allegations. Plaintiff, however, did not attach any affidavits, deposition testimony, or other evidence to support its argument that it could prove the allegations of the ...


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