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Jacksonville Savings Bank v. Kovack

January 14, 2002

JACKSONVILLE SAVINGS BANK, AN ILLINOIS BANKING CORPORATION, PLAINTIFF-APPELLEE,
v.
MARK KOVACK, DEFENDANT-APPELLANT.



Appeal from Circuit Court of Morgan County No. 01L31 Honorable Ronald F. Robinson, Judge Presiding.

The opinion of the court was delivered by: Justice Steigmann

UNPUBLISHED

In July 2001, plaintiff, Jacksonville Savings Bank (Bank), filed a complaint against defendant, Mark Kovack, alleging that he had illegally received funds belonging to the Bank while employed there. Later that month, Kovack filed a motion to stay the civil proceedings until a pending federal criminal investigation involving the same wrongful conduct was resolved. Following an August 2001 hearing, the trial court denied Kovack's motion to stay the proceedings.

Kovack appeals, arguing only that the trial court abused its discretion by denying his motion to stay the civil proceedings. We affirm.

I. BACKGROUND

In July 2001, the Bank filed a four-count complaint against Kovack, the Bank's former assistant vice president, alleging that from 1995 through April 2001, Kovack engaged in several wrongful activities to his personal benefit, including the following: (1) repeated diversions of checks and cash from the Bank's customers; (2) misapplication of loan proceeds; and (3) creation of "dummy" loans without the knowledge or consent of the affected customers.

Later during July 2001, Kovack filed a motion to stay the civil proceedings, asserting that he was a suspect in a Federal Bureau of Investigation (FBI) criminal investigation involving the same wrongful conduct. Kovack also filed an affidavit of his attorney, in which his attorney averred that (1) he had spoken with an assistant United States Attorney on several occasions, and based on those conversations, he believed that criminal charges were going to be filed against Kovack; and (2) Kovack intended to invoke his fifth amendment privilege against self-incrimination in the civil proceedings.

In August 2001, the Bank filed a response to Kovack's motion to stay the proceedings, asserting, in pertinent part, that (1) federal prosecutors had not yet filed criminal charges against Kovack; (2) Kovack had not claimed that criminal charges were pending; (3) the Bank had suffered a financial loss between $2 and $3 million due to Kovack's wrongful conduct; and (4) if the trial court stayed the civil proceedings, Kovack might dissipate his assets, making the Bank's recovery of its lost funds impossible.

Later during August 2001, the trial court conducted a hearing on Kovack's motion to stay the proceedings. After considering counsel's arguments, the court denied the motion and stated, in pertinent part, as follows:

"[T]his [c]court does have authority to stay the proceedings in this case upon proper showing, and as I understand[,] that ruling is discretionary with the [c]court. *** It is a fact, as I understand it, that no criminal action is pending in this case. None has been filed in any jurisdiction to my knowledge. The affidavit indicates none has been filed. [Kovack's counsel] did file [an] affidavit that it was his belief that charges would be filed. That really doesn't help the [c]court. *** The fact is there are none filed and this [c]court must take that fact into consideration. The [c]court is also concerned with the fact that [Kovack] has not asserted his fifth amendment right against self[-]incrimination to any specific request in this case. All the affidavit, and that's all I have in the file, *** is an affidavit, again, [Kovack's counsel] indicating that his client intends at sometime to invoke his fifth amendment right to a privilege against self[-]incrimination. That may well be. But it is not asserted yet. *** There is a [c]omplaint on file and I understand that [Kovack] must at sometime choose how he wishes to respond to that [c]omplaint. That can be in a variety of ways. It can be a [m]otion to [d]ismiss. It can be a denial. There are any number of ways to answer a [c]omplaint. But I think we need to proceed to that stage. *** [Kovack's counsel has indicated] that his client intends at sometime to invoke that privilege. *** I am not sure when, if ever, he is going to invoke it. So, I think we need to find out. *** I think until we see some facts a little closer to the case at hand, then I see no reason to prevent the plaintiff from pursuing [its] civil remedies and in trying to locate and recover [its] funds. *** [Kovack's] right against self[-]incrimination is paramount. And I can assure you *** that upon proper assertion of that right, it will be supported and guaranteed. But I think we need to look at, I think, it's a right and privilege he is going to have to affirmatively assert when he feels it's necessary. *** But I am not going to second[-]guess him as to when he is ever going to assert that, when he has not asserted that in the past and he had a perfect opportunity to. He may not. Let's find out down the road when there are specific requests and so forth as to when he wishes to assert that privilege. I will review it and if it's properly asserted and he shows a reasonable nexus between a potential criminal conviction and the information requested, I will certainly back him up in his assertion of his fifth amendment rights ***. But it's the [c]court's order and discretionary at this time to deny the [m]otion to [s]tay of these proceedings."

This interlocutory appeal followed.

II. THE TRIAL COURT'S DENIAL OF KOVACK'S MOTION TO STAY THE PROCEEDINGS

Kovack argues that the trial court abused its discretion by denying his motion to stay the civil proceedings against him. Specifically, he contends that the court should have granted the stay because "he is unable to adequately defend himself in the pending civil proceeding while the criminal investigation is hanging over his head." We disagree.

The fifth amendment to the United States Constitution provides that no person "shall be compelled in any criminal case to be a witness against himself." U.S. Const., amend. V. The fifth amendment does not, however, mandate a stay of civil proceedings pending the outcome of similar or parallel criminal proceedings. See People ex rel. Hartigan v. Kafka & Sons Building & Supply Co., 252 Ill. App. 3d 115, 119, 625 N.E.2d 16, 19 (1993) ("Where a criminal action is simultaneously pending with a civil action, courts may stay the civil proceeding based on the fifth amendment until the resolution of the criminal matter" (emphasis added)); Keating v. Office of Thrift Supervision, 45 F.3d 322, 324 (9th Cir. 1995) (the Constitution does not require a stay of civil proceedings pending the outcome of criminal proceedings); Nowaczyk v. Matingas, 146 F.R.D. ...


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