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Law Offices of Colleen M. Mclaughlin v. First Star Financial Corporation

December 22, 2011

LAW OFFICES OF COLLEEN M. MCLAUGHLIN, PLAINTIFF-APPELLEE,
v.
FIRST STAR FINANCIAL CORPORATION, DAMON DUMAS, AND DAVID JOHNSON,
DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Cook County. 09 M1 177349 The Honorable Anthony L. Burrell, Judge Presiding.

The opinion of the court was delivered by: Justice Pucinski

JUSTICE PUCINSKI delivered the judgment of the court, with opinion. Presiding Justice Lavin and Justice Sterba concurred in the judgment and opinion.

OPINION

¶1 Plaintiff, the Law Offices of Colleen M. McLaughlin, filed the instant suit seeking payment of its attorney fees under a settlement agreement reached between it, its client Alexandria Kondenar, and defendants, First Star Financial Corp., David Johnson, and Damon Dumas. Defendants were to pay plaintiff in two installments under the settlement, each in the amount of $12,500. Defendants paid the first installment in full. However, defendants only paid $6,000 for the second installment. Plaintiff filed a small claims complaint for breach of contract to collect the remaining $6,500, attaching a copy of the settlement agreement to the complaint. The circuit court denied defendants' motion to dismiss pursuant to section 2-619 of the Illinois Code of Civil Procedure (735 ILCS 5/2-619 (West 2008)) based on lack of standing, denied defendants' motion for directed finding, and after trial of the matter, entered judgment in favor of plaintiff. During the trial, the court admitted the copy of the settlement agreement into evidence. On appeal, defendants argue: (1) the court erred in denying their section 2-619 motion; (2) the court should not have admitted the copy of the settlement agreement into evidence under the best evidence rule; (3) the court's denial of defendants' motion for a directed finding was against the manifest weight of the evidence; and (4) the entry of judgment in favor of plaintiff was against the manifest weight of the evidence.

¶2 We affirm the court's denial of defendants' motions and its judgment. We hold the following: (1) a review of the plain language of the settlement agreement attached to the complaint reveals the plaintiff was a party to the settlement agreement and, therefore, had standing to maintain the action; (2) admission of the copy of the settlement agreement into evidence was proper under our common law evidentiary rules and pursuant to section 2-606 of the Illinois Code of Civil Procedure (735 ILCS 5/2-606 (West 2008)) and Illinois Supreme Court Rule 286(b) (eff. Aug. 1, 1992); (3) the court's denial of defendants' motion for a directed finding was not against the manifest weight of the evidence where plaintiff presented sufficient proof of all the necessary elements for breach of contract; and (4) entry of judgment in favor of plaintiff was not against the manifest weight of the evidence where defendants did not present any evidence to contradict the clear language of the settlement agreement. However, because the settlement agreement specified that payment must be made to both the law office and the client, we remand the matter to the circuit court with instructions to correct the order to reflect that payment be made to plaintiff and Kondenar jointly.

¶3 BACKGROUND

¶4 The following facts are from the record and the agreed report of proceedings. Pursuant to Illinois Supreme Court Rule 323 (Ill. S. Ct. R. 323 (eff. Dec. 13, 2005)), defendants filed an agreed report of proceedings for the trial.

¶5 Plaintiff, the Law Offices of Colleen M. McLaughlin, represented Alexandria Kondenar in her discrimination suit against the defendants, First Star Financial Corp., David Johnson, and Damon Dumas. The parties came to an agreement and settled the case. First Star Financial Corp., Johnson, and Dumas executed the settlement agreement on February 18, 2008, and Kondenar and her attorney both executed the agreement on February 22, 2008.

¶6 Defendants were to pay plaintiff and Kondenar in two installments under the settlement, each in the amount of $12,500. Defendants only paid $6,000 for the second installment. Individual defendants Johnson and Dumas refused to make any further payment under the settlement agreement and plaintiff filed suit on September 16, 2009, attaching a copy of the settlement agreement to its verified complaint. Defendants initially did not answer the complaint and were defaulted, whereupon they moved to vacate the default. The court granted the motion and gave defendants leave to file a responsive pleading. Defendants subsequently moved to dismiss pursuant to section 2-619 of the Illinois Code of Civil Procedure (735 ILCS 5/2-619(a)(9) (West 2008)), arguing that plaintiff did not have standing to bring the action. According to defendants, the only proper plaintiff would be Kondenar, because she was the person entitled to receive payments under the settlement agreement. The trial court denied the motion and the matter proceeded to trial.

¶7 At the bench trial, plaintiff moved to admit the copy of the settlement agreement into evidence, and defendants objected based upon lack of foundation and the best evidence rule. Plaintiff responded that no witness was necessary to lay a foundation as the complaint was verified and the copy of the settlement agreement was attached to the complaint. The court overruled defendants' objections and entered the copy of the agreement into evidence. Plaintiff asked for a judgment of $6,500 in plaintiff's favor and for $1,900 in attorney fees and costs.

¶8 Defendants also moved for a directed finding in their favor, again based on the alleged lack of standing of plaintiff. Plaintiff argued that article I of the settlement agreement provided:

"This payment will be made payable to 'Alexandria Kondenar' and 'The Law Offices of Colleen M. McLaughlin' in two checks each in the amount of $12,500, the first on February 25, 2008 and the second on April 24, 2008." (Emphasis added.)

The court held that plaintiff had standing to sue under the agreement.

¶9 The individual defendants next argued that personal liability did not attach to them because the covenant for payment under article I and article IV of the settlement agreement did not bind them but, rather, only First Star. Defendants argued that the term "First Star" was defined under the agreement as First Star Financial Corporation. Plaintiff argued that under the agreement, First Star, Johnson and Dumas were defined as "hereinafter collectively 'First Star' unless otherwise denoted." Thus, "First Star" referred to all three defendants. Defendants countered that the term "First Star" was ambiguous and, since the agreement was drafted by plaintiff, any ambiguity should be construed against plaintiff. Defendants also argued that plaintiff offered no extrinsic evidence to explain the intent of the parties regarding the meaning of the term. The court denied defendants' motion for directed finding.

¶10 Defendants argued in their case in chief that the proper plaintiff was not the Law Offices of Colleen M. McLaughlin but Alexandria Kondenar and that any attorney fee issues were between plaintiff and its client, Kondenar. Defendants argued that if judgment were entered against them, issues could arise regarding a double obligation to pay in the event Kondenar also filed suit. The court indicated that if it did enter judgment against the defendants and Kondenar filed a suit, it would not be sustained. The court entered judgment in favor of plaintiff and against all defendants jointly and severally, in the amount of $6,500 plus costs.

¶11 ANALYSIS

¶12 I. Denial of Defendants' Section 2-619 Motion to Dismiss Based on Lack of Standing

¶13 Defendants first argue that the circuit court erred in denying its motion to dismiss pursuant to section 2-619 (735 ILCS 5/2-619 (West 2008)) based on lack of standing. According to defendants, plaintiff lacked standing to maintain this cause of action to recover money based on the settlement agreement because only First Star and Kondenar were parties to the agreement. Lack of standing is generally considered an affirmative defense and it may be raised in a motion to dismiss filed pursuant to section 2-619. AIDA v. Time Warner Entertainment Co., 332 Ill. App. 3d 154, 158 (2002) (citing Glisson v. City of Marion, 188 Ill. 2d 211, 220 (1999)). "In a section 2-619 proceeding, the defendant bears the burden of proving any affirmative defense it relies upon." Advocate Health & Hospitals Corp. v. Bank One, N.A., 348 Ill. App. 3d 755, 759 (2004) (citing Streams Condominium No. 3 Ass'n v. Bosgraf, 219 Ill. App. 3d 1010, 1013 (1991)), appeal denied, 211 Ill. 2d 569 (2004).

¶14 Under section 2-619, a defendant admits to all well-pled facts in the complaint, as well as any reasonable inferences which may be drawn from those facts, but asks the court to conclude that there is no set of facts which would entitle the plaintiff to recover. Advocate Health & Hospitals Corp., 348 Ill. App. 3d at 759. " 'Where standing is challenged by way of a motion to dismiss, a court must accept as true all well-pleaded facts in the plaintiff's complaint and all inferences that can reasonably be drawn in the plaintiff's favor.' " Winnebago County Citizens for Controlled Growth v. County of Winnebago, 383 Ill. App. 3d 735, 739 (2008) (quoting International Union of Operating Engineers, Local 148 v. Illinois Department of Employment Security, 215 Ill. 2d 37, 45 (2005)). A motion to dismiss will be granted only if the plaintiff can prove no set of facts that would support a cause of action. In re Chicago Flood Litigation, 176 Ill. 2d 179, 189 (1997). A section 2-619 motion to dismiss and the issue of an affirmative defense of lack of standing both present questions of law, and thus appellate review of section 2-619 motions based on lack of standing is de novo. Wexler v. Wirtz Corp., 211 Ill. 2d 18, 23 (2004).

¶15 "In Illinois, standing is established by simply demonstrating some injury to a legally cognizable interest." Alpha School Bus Co. v. Wagner, 391 Ill. App. 3d 722, 745 (2009) (citing Village of Chatham v. County of Sangamon, 216 Ill. 2d 402, 419 (2005)). " 'The doctrine of standing is designed to preclude persons who have no interest in a controversy from bringing suit' " and " 'assures that issues are raised only by those parties with a real interest in the outcome of the controversy.' " Mortgage Electronic Registration Systems, Inc. v. Barnes, 406 Ill. App. 3d 1, 6 (2010) (quoting Glisson, 188 Ill. 2d at 221). For an injury to a legally cognizable interest to give rise to standing, the claimed injury may be actual or threatened, and it must be: (1) distinct and palpable; (2) fairly traceable to the defendant's actions; and (3) substantially likely to be prevented or redressed by the grant of the requested relief. Fitch v. McDermott, Will & Emery, LLP, 401 Ill. App. 3d 1006, 1028 (2010) (citing Glisson, 188 Ill. 2d at 221).

¶16 "Whether the plaintiff has standing to sue is to be determined from the allegations contained in the complaint." (Internal quotation marks omitted.) Barber v. City of Springfield, 406 Ill. App. 3d 1099, 1101 (2011) (quoting Martini v. Netsch, 272 Ill. App. 3d 693, 695 (1995)). However, a plaintiff need not allege facts establishing standing. Wagner, 391 Ill. App. 3d at 745 (citing County of Winnebago, 383 Ill. App. 3d at 739). A defendant has the burden to both plead and prove the plaintiff's lack of standing. Burnette v. Stroger, 389 Ill. App. 3d 321, 331 (2009) (citing Chicago Teachers Union, Local 1 v. Board of Education, 189 Ill. 2d 200, 206 (2000)). Thus, we must look to the allegations of the complaint to determine whether plaintiff had standing, and we must also determine whether defendants ...


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