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Kopka v. Kamensky and Rubenstein

December 16, 2004

ROBERT J. KOPKA, PLAINTIFF-APPELLANT,
v.
KAMENSKY AND RUBENSTEIN, MORTON KESSEL, BARRY ROSENTHAL, AND ALTSCHULER, MELVOIN AND GLASSER, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. Honorable Paddy H. McNamara, Judge Presiding.

The opinion of the court was delivered by: Justice Quinn

Plaintiff Robert Kopka (Kopka) appeals from an order of the circuit court of Cook County dismissing his amended complaint which alleged breach of fiduciary duty, breach of retainer and negligence against defendants Kamensky & Rubenstein (K&R) a law firm, Altschuler, Melvoin & Glasser (AMG) an accounting firm, and Morton Kessel and Barry Rosenthal, partners at AMG. On appeal, Kopka contends that the circuit court erred in finding that his amended complaint failed to adequately allege that K&R and AMG owed plaintiff, personally, a duty of care or a fiduciary duty where he was neither in privity with nor an intended third-party beneficiary of the attorney-client and accountant-client relationships with K&R and AMG.

[9]     I. Background

Landau, Omahana & Kopka (LOK Illinois) was an Illinois law firm and closely held corporation. Kopka, Byron Landau and Gail Omahana were the only shareholders of the corporation. Kopka, Landau and Omahana were also the sole shareholders of a Michigan corporation (LOK Michigan) and are the general partners of an Indiana partnership (LOK Indiana). Kopka refers to all three firms jointly as "LOK." Barry Rosenthal and Morton Kessel are partners at AMG, an Illinois accounting firm. K&R is an Illinois law firm.

On December 5, 1998, Kopka tendered his 30-day written notice of resignation, effective January 4, 1999, from all three LOK firms. According to the terms of the shareholders' agreement, LOK was responsible for repurchasing Kopka's shares at the original issue price, but the corporation failed to repurchase these shares. At the time of Kopka's resignation, LOK owed a $5.5 million promissory note to the American National Bank and Trust of Chicago (American National). Kopka, Landau and Omahana had executed individual personal guarantees for the note.

On January 7, 1999, Kopka formed a new law firm in Indiana, named Kopka, Landau & Pinkus. On January 11, 1999, K&R assisted Landau and Omahana to incorporate a new firm in Illinois, named Landau & Omahana, Ltd. (LO). Kopka alleges that Landau and Omahana, with assistance from K&R, converted assets from LOK for use at their new firm. Kopka also alleges that LOK retained AMG to "provide tax and accounting services for the LOK entities," but that AMG assisted Landau and Omahana in securing financing for their new firm. Kopka maintains that AMG misrepresented LO's financial position to American National, so that this new firm was treated as a successor to LOK and was therefore allowed to use LOK's assets. Kopka alleged that LO collected accounts-receivable funds owed to LOK and did not credit the funds toward LOK's debt.

In March 1999, American National accelerated the note owed by LOK and demanded payment in full. On March 26, 1999, American National filed a complaint in the circuit court of Cook County, against LOK, Kopka, Landau, Omahana and others. Kopka claims that he personally paid $150,000 for partnership obligations of LOK Indiana during litigation with American National. In November 2000, Kopka reached a settlement with American National, paying a sum of money in exchange for a release of his personal guaranty of the LOK loan.

On September 19, 2002, Kopka filed an amended complaint alleging breach of fiduciary duty, breach of retainer, and negligence against defendants K&R, AMG, Kessel and Rosenthal. Kopka alleged that Landau and Omahana depleted the assets of LOK with the assistance of K&R and AMG, depriving him of payment for his shares upon his resignation and causing American National to file suit to recover on his personal guaranty for LOK's note.

K&R and AMG, Kessel and Rosenthal filed independent motions to dismiss Kopka's amended complaint pursuant to section 2-615 of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2002)). Both motions asserted that Kopka lacked standing to assert his claims, failed to allege the existence of a duty and failed to state actionable claims for breach of contract and negligence. Kessel and Rosenthal also moved to dismiss on the basis that Kopka failed to allege any breaches by them individually.

On April 4, 2003, the circuit court granted defendants' motions and dismissed Kopka's amended complaint pursuant to section 2-615 of the Code. The court held, inter alia, that Kopka alleged sufficient facts to establish standing to bring his claims; that Kopka failed to establish that K&R and AMG owed him, personally, a fiduciary duty and duty of care where he was neither in privity with K&R or AMG, nor an intended third-party beneficiary of K&R or AMG's relationships with LOK; and that Kopka failed to allege facts in support of his negligence claim to establish that any alleged breach of the duty of care proximately caused an injury.

On appeal, Kopka contends that the circuit court erred in finding that he failed to establish that K&R and AMG owed him a duty of care and fiduciary duty. Kopka maintains that, pursuant to current trends in case law, neither privity nor status as an intended third-party beneficiary is necessary to establish his negligence and breach-of-fiduciary-duty claims against K&R and AMG. Rather, Kopka asserts that K&R and AMG, as attorneys and accountants for LOK, owed him a duty of care and fiduciary duty because he was a shareholder in two of the LOK entities and a general partner of the other entity.

II. ANALYSIS

A. Standard of Review

This court reviews a trial court's dismissal based upon section 2-615 de novo. Hopewell v. Vitullo, 299 Ill. App. 3d 513, 516 (1998). A section 2-615 motion attacks the legal sufficiency of a complaint, and this court's inquiry is limited to whether the allegations of the complaint, when viewed in the light most favorable to the plaintiff, are sufficient to state a cause of action upon which relief can be granted. Vernon v. Schuster, 179 Ill. 2d 338, 344 (1997). In order to withstand a motion to dismiss based on section 2-615, a complaint must allege facts sufficiently setting forth the essential elements of the cause of action. Urbaitis v. Commonwealth Edison, 143 Ill. 2d 458, 475 (1991). This court must accept as true all well-pled factual allegations contained in the complaint and construe all reasonable inferences therefrom in ...


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