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Yugoslav-American Cultural Center, Inc. v. Parkway Bank and Trust Company

December 28, 2001

YUGOSLAV-AMERICAN CULTURAL CENTER, INC., PLAINTIFF-APPELLEE
v.
PARKWAY BANK AND TRUST COMPANY, INDIV. AND AS TRUSTEE UNDER TRUST NUMBER 10066, VUCKO BARJACTAREVIC AND PETAR PAVLOVIC, DEFENDANTS (BRANKO TUPANJAC, DEFENDANT-APPELLANT)



The opinion of the court was delivered by: Justice Reid

UNPUBLISHED

Appeal From The Circuit Court Of Cook County Honorable Sidney A. Jones III, Judge Presiding.

This is not the first time these parties have been before this court. A previous appeal, filed pursuant to Illinois Supreme Court Rule 304(a) (134 Ill. 2d R. 304(a)) was decided by this court on June 30, 1997. Yugoslav-American Cultural Center, Inc. v. Parkway Bank & Trust Co., 289 Ill. App. 3d 728 (1997). That opinion contains a lengthy and detailed discussion of the history of the parties. The result in the previous appeal was that the warranty deed in trust challenged by plaintiff was deemed void and the deed was ordered canceled of record. Yugoslav-American, 289 Ill. App. 3d at 740.

Subsequent to this court's ruling and following a stipulation of facts and the entry of orders of the trial court denying the right to file a third-party complaint, denying claims for a reduction of the restitution amount previously entered by the trial court and denying requests for certain discovery, the trial court entered judgment against Branko Tupanjac in the amount of $216,535.95 plus costs. It is from those orders and judgment that Tupanjac now appeals. We reverse and remand for the following reasons.

THE FACTS

This case previously proceeded to trial on the merits of counts I and IV of the Yugoslav-American Cultural Center's (YACC) amended complaint. The YACC claimed that Petar Pavlovic, YACC president, and Vucko Barjactarevic, YACC secretary, fraudulently sold a building to a corporation controlled by Barjactarevic and Branko Tupanjac. The amended complaint contained four counts, (1) to quiet title against Parkway Bank, as trustee under trust No. 10066, Parkway Bank, as mortgagee, and Tupanjac, (2) for breach of fiduciary duty against defendants Barjactarevic and Pavlovic, (3) fraud against defendants Barjactarevic and Pavlovic, and (4) conspiracy to defraud against Tupanjac, Barjactarevic, Pavlovic and Parkway Bank, as trustee.

During the pendency of the contested warranty deed in trust, Tupanjac received sums of money or other consideration as rents, tax escrow payments, and option or earnest money payments for the purchase of the property, commonly known as 3936 North Lincoln Avenue, Chicago, Illinois. Tupanjac received $277,283 and paid $60,747.05 in real estate taxes on the property. On October 10, 1991, Parkway Bank and Trust, as trustee under trust No. 10066, at the direction of Barjactarevic and Tupanjac, executed a $200,000 mortgage in favor of Parkway Bank. This mortgage was secured by real estate commonly known as 3936 N. Lincoln Avenue, Chicago, Illinois. The underlying mortgage was evidenced by a promissory note executed by Barjactarevic and Tupanjac, with the net proceeds of the loan being disbursed to the parties. The initial promissory note matured on March 12, 1995, and was replaced by a new promissory note with a maturity date of March 12, 1998, executed by Tupanjac. Of the $277,283 paid by the lessee/purchaser, $174,380.24 was disbursed at the sale of the property in 1996. That disbursement was made at Tupanjac's direction in repayment of a loan previously made to him by Parkway Bank to discharge the indebtedness represented by the promissory notes. Tupanjac sought a release of the recorded mortgage. The YACC claimed that the warranty deed in trust was void and sought restitution.

Following a trial, judgment was entered against plaintiff and in favor of Parkway Bank, as trustee and mortgagee, and Tupanjac. The trial court found the deed valid. The plaintiff appealed the judgment. The appellate court reversed the judgment, declaring the warranty deed in trust null and void and canceling it of record. Yugoslav-American, 289 Ill. App. 3d at 740. The trial court was reversed on the legal issue of lack of membership approval or ratification. Though the case was reversed, it was not remanded.

While the case was still on appeal, on March 26, 1997, the circuit court dismissed the remainder of the case for want of prosecution (DWP). Said dismissal was made as part of the trial court's call of the calendar because no party responded when the case was called. Shortly thereafter, on May 27, 1997, counsel for the YACC moved to vacate the DWP. They argued that the trial court should not have entered the order because part of the case was before the appellate court. The trial court vacated the previous order as having been entered in error, thereby reinstating the case.

Also, during the original appeal, shortly before this court issued its prior opinion, the building was sold to Chicago Title and Trust Company, as trustee under trust No. 1102416. This sale was made pursuant to a purchase option in the lease agreement. Because the corporate veil has been lifted to reveal that Tupanjac is the real party in interest, the trial court ordered restitution from him for all the rent received and the gross sale price, less the real estate taxes he paid.

By their stipulation, the parties agree that YACC, as rightful owner of the property conveyed, is entitled to restitution and that Tupanjac will have to pay. At this stage, the dispute revolves around the correct amount of restitution. Tupanjac now seeks a greater setoff. He bases his claim on the amount he spent in improving the property and, as he characterizes it, the fact that the YACC would have lost the property and a lot of money but for his participation in the events previously described.

The trial court granted YACC's motion to dismiss with prejudice count I of Tupanjac's counterclaim pursuant to section 2-615 of the Illinois Code of Civil Procedure (735 ILCS 5/2-615)(West 1998)). That count sought equitable subrogation for the monies Tupanjac spent in improving the building and facilitating the YACC keeping the building. As to count II of the counterclaim, the trial court allowed the equitable reimbursement claim to stand only as to the payment of real estate taxes.

ANALYSIS

I.

Tupanjac now argues that the trial court lacked jurisdiction to further hear the case after the reversal by this court. He claims the reversal by this court without a remand prevents the trial court from conducting further proceedings. Tupanjac also claims that, since the case was dismissed and ...


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