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James Mann, An Individual, and Joseph J. Duffy Project Management Corporation, A Dissolved Illinois Corporation v. Thomas Place

August 16, 2012

JAMES MANN, AN INDIVIDUAL, AND JOSEPH J. DUFFY PROJECT MANAGEMENT CORPORATION, A DISSOLVED ILLINOIS CORPORATION, PLAINTIFFS-APPELLANTS,
v.
THOMAS PLACE, L.P., AN ILLINOIS LIMITED PARTNERSHIP, AND
THOMAS PLACE, LLC, AN ILLINOIS LIMITED LIABILITY COMPANY, DEFENDANTS-APPELLEES JAMES N. BERGMAN, AN INDIVIDUAL; THOMAS & THOMAS ASSOCIATES, INC., AN ILLINOIS CORPORATION; THOMAS MONICO, AN INDIVIDUAL; DAVID SMITH, AN INDIVIDUAL; GLENVIEW ELDERLY PROGRAMS NORTH, INC., AN ILLINOIS CORPORATION; EQUITY GROWTH GROUP RESIDENTIAL, LLC, AN IOWA LIMITED LIABILITY COMPANY; PAUL THOMAS, AN INDIVIDUAL, AND PER HANSON, AN INDIVIDUAL, DEFENDANTS).



Appeal from the Circuit Court of Cook County No. 05 CH 17539 Honorable Ronald F. Bartkowicz, Judge Presiding.

The opinion of the court was delivered by: Justice Sterba

JUSTICE STERBA delivered the judgment of the court, with opinion.

Presiding Justice Lavin and Justice Pucinski concurred in the judgment and opinion.

OPINION

¶ 1 James Mann and the Joseph J. Duffy Project Management Corporation (collectively, plaintiffs) appeal the circuit court's dismissal of their two-count complaint against Thomas Place, L.P. and Thomas Place, LLC (collectively, Thomas Place defendants). The circuit court dismissed plaintiffs' complaint as to the Thomas Place defendants pursuant to section 2-619(a)(5) of the Code of Civil Procedure (Code) on the grounds that it was barred by the statute of limitations. 735 ILCS 5/2-619(a)(5) (West 2010). On appeal, plaintiffs maintain that the court erred in its dismissal and argue that the relation-back doctrine applies to save their claims. For the reasons that follow, we affirm.

¶ 2 BACKGROUND

¶ 3 This case arises out of the development and construction of a senior living community known as Thomas Place. In a complaint filed on October 14, 2005, former plaintiff Joseph J. Duffy Company (Duffy Co.) alleged that it served as a developer of Thomas Place but was not selected as the general contractor for the facility after the necessary funding and donation of land was secured, in violation of a joint venture agreement. The complaint named as defendants Thomas & Thomas Associates, Inc. (Thomas & Thomas), Glenview Elderly Programs North, Inc. (GEPN), Equity Growth Group Residential, LLC (Equity Growth), Ryan Companies USA, Inc. (Ryan), James Bergman, Thomas Monico, David Smith, Paul Thomas, and Per Hanson (collectively, the original defendants).

¶ 4 According to the complaint, Thomas & Thomas is a real estate development and consulting company owned by Paul Thomas and Thomas Monico. It is the predecessor of GEPN, which was also known as Glenview Elderly Services North, Inc. (GESN). James Bergman and David Smith are real estate developers who are associated with the construction development company of Equity Growth. Ryan is a construction company, and Per Hanson is an attorney with whom Paul Thomas of Thomas & Thomas consulted regarding the project.

¶ 5 The initial complaint purported to state causes of action against the original defendants for breach of a joint venture agreement, breach of fiduciary duties, intentional interference with contract, conspiracy to intentionally interfere with contractual rights, quantum meruit, and fraudulent inducement. Specifically, Duffy Co. alleged that in June of 1998, it agreed to work as part of a development team with Thomas & Thomas and GEPN to develop Thomas Place. In 2002, Joseph J. Duffy Project Management Company (PMC) and Equity Growth also joined the development team. Although Duffy Co. assisted in creating construction and design plans and securing funding for the project, it was not selected as the general contractor as promised by the original defendants. Instead, Duffy Co. was offered only the right to bid on the construction contract, which it learned was ultimately awarded to Ryan on May 14, 2005.

¶ 6 The circuit court dismissed this initial complaint without prejudice for failure to state a claim pursuant to section 2-615 of the Code (735 ILCS 5/2-615 (West 2010)), which prompted Duffy Co. to file a first amended complaint joining PMC as a plaintiff and adding counts of unjust enrichment and equitable estoppel. Another round of dismissal and amendment followed, after which the circuit court issued an order dismissing the second amended complaint with prejudice. Duffy Co. and PMC then appealed to this court. On February 29, 2008, we affirmed the circuit court's dismissal of the complaint in its entirety with respect to defendant Ryan, and affirmed the dismissal of all counts except those alleging unjust enrichment and quantum meruit with respect to all other original defendants (Joseph J. Duffy Co. v. Bergman, No. 1-07-0558 (2008) (unpublished order pursuant to Supreme Court Rule 23)).

¶ 7 When the case was once again before the circuit court in April 2009, Duffy Co. and PMC filed a third amended complaint to substitute James Mann, a shareholder of Duffy Co., for Duffy Co. as plaintiff. Plaintiffs alleged Mann and Duffy Co. had previously entered into a stock redemption agreement which provided that if Duffy Co. defaulted in paying costs or attorney fees, Mann would acquire 100% of any litigation award or settlement. In February 2007, Duffy Co. indicated to Mann that it had decided to terminate its interest in the matter and had ceased paying attorney fees. Thus, according to plaintiffs, Mann acquired Duffy Co.'s interest in the litigation.

¶ 8 The third amended complaint also reflected compliance with our February 2008 order and struck all counts except those alleging unjust enrichment and quantum meruit. The allegations that remained in support of those counts detailed Duffy Co.'s nongratuitous services provided to the development team, the development team's reliance on Duffy Co.'s expertise to secure financing for Thomas Place, and the team's ultimate refusal to award Duffy Co. the construction contract or any other compensation for its work.

¶ 9 With regard to the ownership of the land on which Thomas Place was to be built, the third amended complaint alleged that at the outset of the development efforts in 1998, the property was owned by the Village of Glenview. Later, in part due to the efforts of Duffy Co., the village donated the land to be used to build Thomas Place in 2004. The complaint was silent as to whom the land was donated, but an application for tax credit submitted to the Illinois Housing Development Authority on December 15, 2003, and attached as an exhibit to the complaint, identified the owner as Thomas Place, L.P.

ΒΆ 10 Almost one year after the third amended complaint was filed, during the course of discovery, plaintiffs alleged that they learned for the first time that Thomas Place, L.P., and not GEPN, was the owner of Thomas Place. Further, plaintiffs also discovered that Thomas Place, LLC, was the managing general partner of Thomas Place, L.P. Plaintiffs sought leave to amend the complaint to add these entities as defendants on May 5, 2010, but their motion was opposed by the original defendants on the grounds that it was time-barred. Plaintiffs successfully argued that ...

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