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03/29/96 PIONEER BANK & TRUST COMPANY v. AUSTIN

March 29, 1996

PIONEER BANK & TRUST COMPANY, PLAINTIFF,
v.
AUSTIN BANK OF CHICAGO, AS TRUSTEE UNDER TRUST AGREEMENT DATED APRIL 15, 1988 AND KNOWN AS TRUST NO. 6423; S & L PARTNERSHIP, AND ILLINOIS GENERAL PARTNERSHIP; COUNTY OF COOK, A BODY POLITIC AND CORPORATE OF THE STATE OF ILLINOIS; ALLEN E. LEVING; LAWRENCE J. STARKMAN; DR. RALPH J. WEICHSELBAUM; CUSTOM PRODUCTS, A DIVISION OF HUGHES ENTERPRISES, INC., AN ILLINOIS CORPORATION; SHERWIN REAL ESTATE, INC., AN ILLINOIS CORPORATION; UNKNOWN OWNERS AND NON-RECORD CLAIMANTS; SUPPLEMENTAL DEFENDANTS ROBBINS, SALOMON & PATT, LTD., AN ILLINOIS PROFESSIONAL CORPORATION, FORMERLY KNOWN AS ROBBINS, RUBENSTEIN, SALOMON & GREENBLATT, LTD., DEFENDANTS. ROBBINS, SALOMON & PATT, LTD., COUNTERPLAINTIFF-APPELLANT, V. ALLEN E. LEVING; LAWRENCE J. STARKMAN; DR. RALPH J. WEICHSELBAUM, COLLECTIVELY D/B/A/ S & L PARTNERSHIP, AN ILLINOIS GENERAL PARTNERSHIP, COUNTERDEFENDANTS-APPELLEES.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE KENNETH J. GILLIS, JUDGE PRESIDING.

Presiding Justice Campbell delivered the opinion of the court: Buckley, J., and Wolfson, J., concur.

The opinion of the court was delivered by: Campbell

PRESIDING JUSTICE CAMPBELL delivered the opinion of the court:

Counterplaintiff Robbins, Salomon & Patt, Ltd. ("Robbins") appeals an order of the circuit court of Cook County granting judgment on the pleadings to counterdefendants Allen Leving and Dr. Ralph Weichselbaum. Plaintiff Pioneer Bank & Trust Company ("Pioneer Bank"), defendant Austin Bank of Chicago ("Austin Bank"), counterdefendant Larry Starkman. who along with Leving and Weichselbaum did business as the S & L Partnership ("S & L"), and the remaining named defendants are not parties to this appeal.

The record on appeal indicates the following facts. On December 4, 1991, Pioneer Bank filed a complaint to foreclose a mortgage on property commonly known as 12530 Fairview Avenue in Blue Island, seeking judgment in the amount of approximately 2.3 million dollars. In count I of the complaint, Pioneer Bank named defendant Austin Bank in its capacity as trustee of the land trust holding the property. Although not expressly stated in the initial complaint, a supplemental complaint alleges that S & L was the sole beneficiary of the land trust. In count II of the complaint, Pioneer Bank named Allen Leving, Dr. Ralph Weichselbaum and Larry Starkman, alleging that they had breached a personal guaranty they executed regarding the underlying note. The record also shows that Leving, Weichselbaum and Starkman are the general partners of S & L.

On September 14, 1992, the trial court entered a mortgage foreclosure decree. On January 11, 1993, the trial court entered an order confirming the sale of the property. The order shows that Pioneer was the high bidder, at approximately 2.3 million dollars, but states there is a deficiency of approximately $350,000. Pioneer Bank obtained a default judgment against Starkman for the entire deficiency on February 7, 1994.

On March 7, 1994, Leving moved for summary judgment on the ground that his signature on the personal guaranty was forged. The record also contains Pioneer Bank's response to a similar motion for summary judgment by Weichselbaum, though the parties do not indicate where that motion appears in the record on appeal. On May 24, 1994, the trial court entered an order granting summary judgment in favor of Leving and Weichselbaum.

However, on February 7, 1994, the same day Pioneer Bank obtained the deficiency judgment against Starkman, Pioneer Bank also filed a supplemental complaint against Robbins. The supplemental complaint alleges that Robbins represented S & L in obtaining the financing for the mortgage and note at issue. The supplemental complaint alleges that Pioneer Bank required the personal guaranty as a condition of providing the financing. The supplemental complaint also alleges that Pioneer Bank required that Robbins execute an opinion letter that the guaranties were duly authorized, executed and delivered, and were valid, legal and binding on the guarantors. Robbins provided such an opinion letter, a copy of which was attached to the pleading. These allegations, and Pioneer's alleged reliance on the opinion letter formed the basis for claims sounding in negligent misrepresentation and negligence.

On May 3, 1994, Robbins filed its appearance and jury demand. On May 19, 1994, Robbins filed a seven-count counterclaim against Leving, Weichselbaum and Starkman, collectively doing business as S & L. Count I of the counterclaim, which seeks implied indemnity, states in part as follows:

"10. This counterclaim is brought by Robbins against General Partners to obtain recovery against them in the event that Pioneer obtains a recovery against Robbins based upon a finding that either of the signatures is forged on the written guaranty even though Pioneer's complaint against Robbins does not allege that either signature was forged.

11. Robbins has no independent knowledge whether the signature of Leving or Weichselbaum is authentic or forged. Robbins states here upon information and belief that S & L acted at all times herein through Starkman, and that Starkman forged the signatures of Leving and Weichselbaum upon the written guaranties, or caused someone under his direction and control to forge the signatures. Robbins' allegations regarding the genuineness or lack of genuineness of the signatures on the written guaranties, and concerning S & L's acts and omissions in that regard, are made by Robbins in the alternative."

Count II of the counterclaim is brought pursuant to the Illinois Contribution Among Joint Tortfeasors Act (740 ILCS 100/1 et seq. (West 1992)). Count III seeks reimbursement for Robbins' defense costs. Count IV, alleges that S & L and Robbins entered into a verbal implied-in-fact contract and (in paragraph 16) that

"S & L breached the aforementioned agreement in August 1990 by knowingly sending forged written guaranties to Robbins, requesting Robbins to forward the forged written guaranties to Pioneer, and requesting Robbins to opine to Pioneer upon the authenticity of such signatures."

Count V alleges that the counterdefendants were negligent in providing Robbins with accurate information. Count VI sounds in negligent misrepresentation. Count VII sounds in fraud, ...


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