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10/26/94 SANDY CREEK CONDOMINIUM ASSOCIATION v.

October 26, 1994

SANDY CREEK CONDOMINIUM ASSOCIATION, PLAINTIFF-APPELLEE,
v.
STOLT & EGNER, INC.; ALLEN L. EGNER AND JOHN G. STOLT, PERSONALLY AND INDIV., DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Kane County. No. 91-L-0729. Honorable Patrick J. Dixon, Judge, Presiding.

Released for Publication December 2, 1994.

PECCARELLI, Inglis, McLAREN

The opinion of the court was delivered by: PECCARELLI

JUSTICE PECCARELLI delivered the opinion of the court:

The defendants, Stolt & Egner, Inc., and John Stolt and Allen Egner, individually, appeal from the trial court's order which denied their post-trial motion for a judgment n.o.v. For the following reasons, we reverse.

In 1979, the defendant, Stolt & Egner, Inc., built the Sandy Creek Apartments in Elgin, Illinois. The complex was converted to condominiums and was managed by Stolt & Egner, Inc., from 1980 to 1990. John Stolt and Allen Egner were the sole shareholders of Stolt & Egner, Inc., and directors of the board of the Sandy Creek Condominium Association (Association). In 1990, Stolt & Egner, Inc., turned over management of the Association to the plaintiff, the Sandy Creek Condominium Association, Inc., a not-for-profit corporation organized pursuant to the Condominium Property Act (Act) (765 ILCS 605/1 et seq. (West 1992)) for the purpose of representing the interests of the owners of condominium units in the Sandy Creek Condominium development.

On March 22, 1993, plaintiff filed a third amended complaint in 13 counts against Stolt & Egner, Inc., and against John Stolt and Allen Egner, individually. Count III of the complaint, relevant to this appeal, alleged that the defendants converted assets of the Association during the time the defendants managed the condominium association. Specifically, plaintiff alleged that the defendants (1) retained revenue from the laundry room facility; (2) used the laundry facility for its office without paying rent to the association; (3) failed to collect assessments on garages belonging to the Association; (4) charged the Association a greater sum of money for maintenance than was actually performed; and (5) sold property belonging to the Association without obtaining approval from the members. Count VII of the complaint, relevant to this appeal, alleged that the defendants committed fraud in making the following misrepresentations knowing them to be false or with reckless disregard of their truth or; falsity: (1) the buildings were constructed in compliance with condominium plans and specifications; and (2) the buildings were constructed in a good and workmanlike manner, free from defects, and in compliance with applicable standards.

The cause proceeded to trial. On count III, which alleged conversion of assets, the jury returned a verdict in favor of plaintiff and against John Stolt and Allen Egner in the amount of $2,500. On Count VII, which alleged fraud, the jury returned a verdict in favor of plaintiff and against Stolt & Egner, Inc., John Stolt, and Allen Egner, in the total amount of $120,000; $115,000 represented compensatory damages and $5,000 represented punitive damages.

The defendants filed a post-trial motion for a judgment notwithstanding the verdict or, alternatively, for a new trial with respect to counts III and VII of the complaint. The motion was denied and the defendants appealed.

Defendants first contend that the judgment n.o.v. on count III should have been granted because the complaint which alleged conversion is "legally and factually defective." Curiously, the defendants also state in their brief that no issue is raised on the pleadings. Since the defendants appeal the denial of their post-trial motion for a judgment n.o.v., the sufficiency of the complaint is not at issue. In reviewing the propriety of a trial court's decision to deny a motion for a judgment n.o.v., the appellate court must consider whether all of the evidence, when viewed in the light most favorable to the nonmoving party, so overwhelmingly favors the moving party that no contrary verdict based on the evidence could ever stand. ( Pedrick v. Peoria & Eastern R.R. Co. (1967), 37 Ill. 2d 494, 510, 229 N.E.2d 504.) The defendants in this case also seek a new trial on count III. A trial court should set aside a verdict and grant a new trial only if the verdict is contrary to the manifest weight of the evidence. ( Pedrick, 37 Ill. 2d at 509.) A verdict will be deemed to be against the manifest weight of the evidence if it is palpably erroneous and wholly unwarranted, the result of passion or prejudice, or appears to be arbitrary, unreasonable, and not based on the evidence. Doyle v. White Metal Rolling & Stamping Corp. (1993), 249 Ill. App. 3d 370, 380, 188 Ill. Dec. 339, 618 N.E.2d 909.

Defendants contend that the motion for a judgment n.o.v. should have been granted because the evidence presented in support of the allegations of conversion do not relate to personal property, which is an essential element of the cause of action of conversion. Thus, the defendants' contention on appeal, if properly phrased, is that the evidence presented in support of the plaintiff's claim for conversion so overwhelmingly favors the movant that no contrary verdict based on the evidence could ever stand. Alternatively, the defendants assert that the verdict in favor of the plaintiff on count III of the complaint which alleged conversion is against the manifest weight of the evidence.

Conversion is the unauthorized deprivation of property from the person entitled to its possession. ( In re Rosin (1993), 156 Ill. 2d 202, 206, 189 Ill. Dec. 400, 620 N.E.2d 368.) To sustain a cause of action for conversion of funds, the plaintiff must establish by a preponderance of the evidence: (1) the unauthorized and wrongful assumption of control, dominion, or ownership by defendant over the personal property of another; (2) the plaintiff's right in the property; (3) the plaintiff's absolute and unconditional right to immediate possession of the property; and (4) a demand for possession of the property. ( Seymour v. Williams (1993), 249 Ill. App. 3d 264, 272, 188 Ill. Dec. 396, 618 N.E.2d 966; Rasmussen v. LaMagdelaine (1991), 208 Ill. App. 3d 95, 102, 153 Ill. Dec. 14, 566 N.E.2d 864.) Money may be the subject of conversion if the sum of money is capable of being described as a specific chattel. ( In re Thebus (1985), 108 Ill. 2d 255, 260, 91 Ill. Dec. 623, 483 N.E.2d 1258.) However, an action for the conversion of funds may not be maintained to satisfy an obligation to pay an indeterminate sum of money. If such is the case, the cause of action lies in debt, rather than conversion. Sutherland v. O'Malley (7th Cir. 1989), 882 F.2d 1196.

In Thebus, the Attorney Registration and Disciplinary Commission (ARDC) charged the respondent with conversion in that he allegedly withheld funds from his employees' wages to pay their FICA and failed to remit the amount to the IRS. While the respondent was censured for his conduct, our supreme court ruled that the ARDC failed to show that the defendant's conduct constituted a conversion of government funds. The amount that accrued with each pay period was not a specific and identifiable fund capable of being the subject of conversion. Rather, the defendant's obligation was a debt to the government. Thebus, 108 Ill. 2d at 262-63.

In the instant case, plaintiff alleged that the defendants converted funds belonging to the Association. Francis J. Jara, a professional community association manager and certified public accountant, reviewed the Association records. Mr. Jara testified that the defendants owed the Association various sums of money for garage assessments, maintenance fees, laundry revenues, rent for utilizing the laundry room as an office, and for real property sold belonging to the ...


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