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Davis v. Haas & Haas Inc.

April 27, 1998

VADONNA DAVIS, PLAINTIFF-APPELLANT,
v.
HAAS & HAAS INCORPORATED, FRED HAAS, SR.; AND DIVERSIFIED COMPOSITE CORPORATION, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court for the 14th Judicial Circuit, Whiteside County, Illinois No. 96--L--62 Honorable Daniel A. Dunagan Judge, Presiding

The opinion of the court was delivered by: Justice Breslin

This case arises out of an action to enforce a Human Rights Commission (Commission) order. The central question on appeal is whether a trial court has jurisdiction to determine the validity of a Commission decision when the order was entered on a charge of marital status discrimination based on the identity of one's spouse. Plaintiff VaDonna Davis (Davis) contends that the trial court erroneously reviewed the validity of the underlying order. For the following reasons, we disagree and affirm.

BACKGROUND

Roy Davis and VaDonna Davis were husband and wife. In 1983 both became employed by Haas and Haas, Inc., a manufacturer of fiberglass products. In October of 1989 Haas & Haas terminated Roy Davis. Within a year, it dismissed VaDonna also. She filed a charge of marital discrimination with the Illinois Department of Human Rights.

In January 1995, Fred Haas, acting on behalf of Haas & Haas, sold all the corporate assets and liabilities of the company to Diversified Composite Corporation (Diversified). Six months later, the Commission entered an order against Haas & Haas, finding that it committed a civil rights violation against VaDonna Davis because it terminated her solely based on the identity of her spouse, Roy. The Commission awarded Davis damages, injunctive relief by way of reinstatement, and fees and costs.

Within a year, Davis filed a complaint in the circuit court for the enforcement of the Commission's order against Haas & Haas, and Fred Haas and Diversified as its officers, servants, agents, successors and assigns. Diversified settled the claim with Davis. Fred Haas and Haas & Haas declined to settle and instead filed motions to dismiss the complaint. Fred Haas argued that he was not a named party to the Commission case and thus was not ordered to compensate Davis. The court agreed and granted his motion in an individual capacity. But the order was entered without prejudice to any right Davis had to seek deliverance of corporate assets. The court denied Haas & Haas's motion. Thereafter, Haas & Haas filed a motion for summary judgment, claiming that the Commission's order was an invalid order and could not be enforced based on Boaden v. Department of Law Enforcement, 171 Ill. 2d 230, 664 N.E.2d 61 (1996). Relying on Boaden, the court entered summary judgment on behalf of Haas & Haas and Davis appeals.

DISCUSSION

First we are asked to determine whether the trial court erred in granting Fred Haas's motion to dismiss because he was not a party to the underlying case.

The relevant portion of the Human Rights Act (Act) provides: "When the Commission, at the instance of the Department or an aggrieved party, concludes that any person has violated a valid order of the Commission issued pursuant to this Act, *** the Commission *** shall order the Department to commence an action in the name of the People of the State of Illinois by complaint, alleging the violation *** and praying for the issuance of an order directing such person, his or her or its officers, agents, servants, successors and assigns to comply with the order of the Commission." (emphasis added) 775 ILCS 5/8-111(B)(1)(West 1996).

A corporation is a legal entity which exists separate and distinct from its shareholders, directors and officers. Fentress v. Triple Mining, Inc., 261 Ill. App. 3d 930, 635 N.E.2d 102 (1994). Accordingly, shareholders, directors and officers are generally not liable for a corporation's obligations. Jacobson v. Buffalo Rock Shooters Supply Inc., 278 Ill. App. 3d 1084, 664 N.E.2d 328 (1996). On appeal from an order dismissing a complaint, this court applies the de novo standard of review. Benbenek v. Chicago Park District, 279 Ill. App. 3d 930, 665 N.E.2d 500 (1996).

Neither party disputes that Fred Haas was an officer and agent of Haas & Haas. Under the Act, he could be ordered to fulfill the Commission order. But Fred Haas cannot be held personally liable for the judgment entered against Haas & Haas. See Jacobson, 278 Ill. App. 3d at __, 664 N.E.2d at __ (1996)(absent evidence of fraud or wrongdoing, an officer of a corporation is not personally liable for its obligations). Accordingly, the trial court properly dismissed him in an individual capacity.

Turning to the primary issue, did the court err in awarding Haas & Haas summary judgment based on its Conclusion that the Commission order was invalid?

Summary judgment should be awarded when the pleadings, depositions, admissions and affidavits on file show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1105(c)(West 1996); Johnson v. Owens-Corning Fiberglass Corp., 284 Ill. App. 3d 669, 672 N.E.2d 885 (1996). An order granting summary judgment is reviewed de novo. Armstrong v. Washington, 289 Ill. App. 3d 306, 682 N.E.2d 761 (1997).

An erroneous decree is one in which the court entered an order as a result of a mistake in judgment or an incorrect decision based upon the facts or law. Ward v. Sampson, 395 Ill. 353, 70 N.E.2d 324 (1946). An erroneous order is immune from collateral attack once the time ...


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