Appeal from the Circuit Court of the 14th Judicial Circuit, Rock Island County, Illinois No. 99-LM-440 Honorable Mark A. Vandewiele Judge, Presiding.
The opinion of the court was delivered by: Presiding Justice McDADE
Plaintiff, Turner Investors, appeals from an entry of summary judgment against it in an action for conversion of business funds. Defendant, David Van Acker cross-appeals from the trial court's denial of his motion for sanctions and motion to deem facts admitted. We affirm.
On May 18, 1999, plaintiff filed a complaint against defendants, Sharon Pirkl and David Van Acker. In its complaint, plaintiff alleged, among other things, that defendants had converted plaintiff's funds. Plaintiff specifically alleged that defendants had wrongfully exerted control over the plaintiff's business accounts by improperly distributing funds to the themselves.
Subsequent discovery revealed that plaintiff owned certain real estate located in Moline, Illinois, and operated a gymnastics business on a portion of that real estate. The gymnastics business, Moline Gymnastics and Dance Academy (the Academy), offered instructional training as well as competitive gymnastics. Pirkl served as manager of the Academy and Van Acker as a gymnastics coach.
The Academy maintained two commercial bank accounts. Funds designated for gymnastics competitions were deposited in the "competition account." Other funds and proceeds were deposited in the "general account." In her capacity as the business manager, Pirkl was responsible for the payment of business expenses and the disbursement of paychecks to Academy employees. Pirkl also consistently deducted and disbursed bonuses from the Academy's gross annual income. The bonus pool equaled the amount by which the Academy's pretax income exceeded its operating expenses. This method of determining and paying bonuses was pursuant to an arrangement adopted by the parties.
In April of 1999, plaintiff entered into a contract with Lisa and Allen Miskowiec to sell the Academy and the real estate on which it was located. Prior to that time, defendants had made several unsuccessful attempts to purchase the real estate and the Academy. Plaintiff informed defendants of the pending sale one week prior to its closing. On April 29, 1999, four days before the closing, Pirkl authorized Van Acker to disburse the funds held in the competition account. Van Acker then wrote 16 checks totaling $960 to the parents of Academy's gymnastics team members. On that same day, Pirkl withdrew funds from the general account and distributed them as bonus checks. The funds were divided equally between Pirkl and Van Acker, each receiving $9,950. These withdrawals and disbursements brought both accounts close to a zero balance.
Van Acker testified in his deposition that the funds in the competition account did not belong to the Academy:
"[T]he money that was there [competition account] actually belonged to the clientele, because it was an escrow account. That money was used to take care of coaching expenses, to go to meets, them [the parents] doing that versus using a booster club.
So instead of that group fund-raising money, they put money into that account to be used for that purpose, and so since we knew that the season was going to be--the competitive season was over, this amount was there, and we decided to give it back to them because it was their money."
When asked about the partnership's interest in the competition account, one of plaintiff's partners, Donald Carothers, testified at his deposition as follows:
"Q. And with regard to the competition account, did you have any conversation with any of the investors about the account?
Q. Did you deliver those accounts to Bruce Peterson?
Q. Did you make any comment to him with regard to whether that money belonged to the individuals that put the money into the accounts?
A. Not really because he knew about that particular account. That wasn't our money or Turner's money or anything ...