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Shelter Management XIX v. Denenberg

December 31, 1998

SHELTER MANAGEMENT XIX, AN ILLINOIS LIMITED PARTNERSHIP, PLAINTIFF,
v.
MUCH SHELIST FREED DENENBERG AND AMENT P.C., A PROFESSIONAL CORPORATION; MORRIE MUCH, JAMES E. MATANKY, KATHLEEN A. RUSNARCZYK AND MARY BALL, DEFENDANTS. MUCH SHELIST FREED DENENBERG AND AMENT P.C., A PROFESSIONAL CORPORATION; MORRIE MUCH, JAMES E. MATANKY AND KATHLEEN A. RUSNARCZYK, THIRD-PARTY PLAINTIFFS-APPELLANTS,
v.
LAWRENCE J. STARKMAN, ALLAN E. LEVING, RALPH WEISCHELBAUM AND LESLIE LEVIN, THIRD-PARTY DEFENDANTS-APPELLEES.



The opinion of the court was delivered by: Justice Buckley

Modified Upon Denial of Rehearing

Appeal from the Circuit Court of Cook County.

The Honorable Paddy McNamara, Judge Presiding.

These consolidated appeals are based on the same underlying action initiated by plaintiff Shelter Management XIX (Shelter), against defendants Much Shelist Freed Denenberg & Ament, P.C., Morrie Much, James Matanky, Kathleen A. Rusnarczyk and Mary Ball (Shelter defendants). Shelter defendants, excluding Ball, then brought a third-party complaint against third-party defendants Lawrence J. Starkman, Allan E. Leving, Ralph Weischelbaum and Leslie Levin seeking to recover damages for third-party defendants' conduct which caused Shelter defendants to notarize third-party defendants' forged personal guaranties, inducing Shelter to accept them.

Third-party defendants moved for summary judgment on the pleadings pursuant to section 2-615 of the Illinois Code of Civil Procedure. 735 ILCS 5/2-615 (West 1996). The circuit court granted the motion and entered judgment for third-party defendants. Third-party plaintiffs appeal.

Third-party plaintiffs now raise the following issues: (1) whether the circuit court erred in dismissing count V of the third-party complaint which sought recovery from all third-party defen-dants pursuant to sections 13 and 15 of the Illinois Uniform Part-nership Act (the Act) (805 ILCS 205/13, 15 (West 1996)); (2) whether the circuit court erred in failing to consider well-pleaded allegations in the third-party complaint which alleged that the guaranties were not forged; and (3) whether the circuit court erred in dismissing the contribution and implied indemnity claims asserted against third-party defendants.

At all times relevant, Shelter, an Illinois limited partner-ship, was the holder of a promissory note in the principal amount of $215,000. The note was made and executed by the 6926 North Wayne Street Partnership (the partnership).

The partnership was formed by third-party defendants, Lawrence J. Starkman, Allan E. Leving, Ralph Weischelbaum and Leslie Levin. The partnership made and executed the note securing a purchase money mortgage to buy a piece of real estate located at 6926 North Wayne Street in Chicago, Illinois. In order to secure the note, third-party defendants agreed to execute and deliver individual personal guaranties to Shelter. The partnership's attorneys, James E. Matanky and Morrie Much, attorneys with the law firm of Much Shelist Freed Denenberg & Ament, P.C. (Much Shelist), prepared the guaranties. Much Shelist sent the guaranties to Starkman for execution by third-party defendants. Starkman thereafter returned the executed guaranties to Much Shelist and directed that they be notarized. Kathleen A. Rusnarczyk, an employee of Much Shelist and a notary, notarized the guaranties of Leving and Weischelbaum.

The guaranty of Levin was notarized by Mary Ball. At all relevant times, Ms. Ball was an employee of a currency exchange owned by third-party defendants Leving and Levin. Levin was Ball's supervisor.

After the partnership defaulted on the note, Shelter initiated an action against third-party defendants to enforce payment under the personal guaranties. Starkman settled with Shelter. Leving, Weischelbaum and Levin raised as a defense that the signatures on their guaranties were forged. The claims against Leving, Weischelbaum and Levin were ultimately dismissed.

On July 25, 1995, Shelter filed a complaint against Much Shelist Freed Denenberg & Ament, P.C., Morrie Much, James Matanky, Kathleen A. Rusnarczyk and Mary Ball for allegedly notarizing the guaranties outside the presence of the guarantors. Shelter alleged that Rusnarczyk and Ball violated the Illinois Notary Public Act (5 ILCS 312/6-102 (West 1996)) by swearing under oath that they witnessed the signing of the guaranties when, in fact, they did not; that Matanky, Much and Much Shelist violated the Notary Public Act as the employers of Rusnarczyk; and that the currency exchange violated the Notary Public Act as the employer of Ball.

Much, Matanky, Rusnarczyk and Much Shelist (third-party plaintiffs) then filed a third-party complaint against third-party defendants, claiming that it was third-party defendants' misconduct that rendered third-party plaintiffs potentially liable to Shelter. In their complaint, third-party plaintiffs allege that, if they are found liable to Shelter, then they would have a right to indemnity and contribution against all third-party defendants.

Third-party defendants moved to dismiss the third-party complaint pursuant to section 2-615 of the Illinois Code of Civil Procedure. 735 ILCS 5/2-615 (West 1996). Third-party defendants argued that third-party plaintiffs could not seek indemnity because (1) there was no contractual indemnity, and (2) implied indemnity was unavailable because each of Shelter's claims against third-party plaintiffs was fault-based, and parties at fault to any extent are barred from obtaining equitable indemnity. Third-party defendants also argued that contribution was unavailable because all of Shelter's claims against third-party plaintiffs were based on either intentional acts or nontort theories of liability; contribution is only available for non-intentional tort liability.

On December 11, 1996, the circuit court dismissed the third-party complaint with prejudice against all third-party defendants, finding that Shelter's complaint against third-party plaintiffs alleged intentional acts rather than negligence. Thus, third-party plaintiffs ...


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