Appeal from the Circuit Court of Cook County. The Honorable Robert L. Sklodowski and Honorable Edward C. Hofert, Judges Presiding.
As Modified on Denial of Rehearing July 18, 1994. As Corrected July 27, 1994. Released for Publication August 2, 1994.
Manning, Buckley, O'connor, Jr.
The opinion of the court was delivered by: Manning
(MODIFIED ON DENIAL OF REHEARING)
JUSTICE MANNING delivered the opinion of the court:
Plaintiffs, Clarice L. McSweeney, and Donald N. Brown and Charles H.G. Kimball, individually and d/b/a WSSB Partnership, an Illinois partnership, filed suit, on December 10, 1986, against defendants, Kenneth Buti and Carl Weilding, individually and as partners of the Buti, Weidling and McSweeney Partnership, an Illinois partnership. Clarice L. McSweeney is the administrator of the estate of her husband, William J. McSweeney, who was a partner in the Buti, Weilding and McSweeney partnership. Plaintiffs Donald N. Brown and Charles H.G. Kimball, individually and d/b/a WSSB partnership are assignees of proceeds of a portion of McSweeney's partnership interest. Plaintiffs sought declaratory judgment, an accounting and damages against defendants for their unilateral sale of the partnership property to themselves. Judgment was entered in favor of plaintiffs based upon the trial court's finding that defendants had breached their fiduciary duty by selling partnership property to themselves. Following expert testimony as to the value of the partnership property at the time of the purported sale to defendants, the trial court entered judgment in the amount of $54,843.76 in favor of plaintiffs.
Defendants raise three issues on appeal: (1) Whether the trialcourt erred in finding defendants liable for breach of fiduciary duty despite theirpurchase of the property in question for approximately 85% of its fair market value or whether the sale was commercially reasonable; (2) Whether the trial court erred in failing to bar plaintiffs' claim based upon defendants' affirmative defense of laches; and (3) In the alternative, whether the court should vacate the judgment in favor of plaintiffs and enter an order directing defendants to offer the property for sale at a public sale.
On March 20, 1982, defendants, Kenneth J. Buti and Carl Weilding together with William J. McSweeney formed a partnership commonly known as, Buti, Weilding and McSweeney Partnership. Pursuant to the terms of the agreement creating the Buti, Weilding and McSweeney Partnership, Kenneth J. Buti, Carl Weilding and William J. McSweeney were each general partners. Since the formation of the Buti, Weilding and McSweeney Partnership, the partners have transacted partnership business, acquired assets and incurred liabilities in the name of the partnership, divided losses pursuant to the partnership agreement and held themselves out as partners. On May 21, 1984, William J. McSweeney died testate in Lake County, Illinois. Clarice McSweeney was appointed administrator of William's estate. Plaintiffs state that defendants became aware of William J. McSweeney's death on or shortly after that date. At all times since the death of William J. McSweeney, and up until on or about June 27, 1984, the defendants have dealt with plaintiff Clarice L. McSweeney as the successor in interest to William J. McSweeney, and have conducted partnership business with plaintiff Clarice L. McSweeney. In the interim, the following events transpired:
1) Letter of July 12, 1984, from Buti's attorney to Norman Olson, attorney for legatees or heirs inquiring of their desire to continue in the partnership.
2) Letter of August 10, 1984, from Attorney Olson to Buti's attorney advising that neither McSweeney nor her son are interested in becoming partners.
3) Partnership capital call dated January 7, 1985, mailed to executor of McSweeney's estate.
4) Letter of January 18, 1985, from Attorney Olson to Buti's attorney advising that estate will not contribute capital.
5) Letter of May 24, 1985, from Buti's attorney advising Olson that a sale will be necessary if ...