Appeal from the Circuit Court Cook County No. 06 CH 5431 Honorable Stuart E. Palmer, Judge Presiding.
The opinion of the court was delivered by: Justice Simon
JUSTICE SIMON delivered the judgment of the court, with opinion.
Presiding Justice Harris and Justice Quinn concurred in the judgment and opinion.
¶ 1 This matter is once again before this court following proceedings on remand from the decision in Tully v. McLean, 409 Ill. App. 3d 659 (2011) (Tully I). In Tully I, Justice Karnezis provided extensive analysis of the underlying proceedings in which plaintiffs Thomas M. Tully, as trustee of the Thomas M. Tully Trust, and F.P.A., LLC (FPA), individually and derivatively on behalf of Old Town Development Associates, LLC (OTD), filed an action against defendants Daniel E. McLean, Piper's Alley Management, Inc. (PAM), Lincoln Park Development Associates, LP (LPDA), MCL Companies of Chicago, Inc. (MCL), MCL Management Corp. (MCL Management) (collectively defendants) and nominally against OTD. Plaintiffs asserted that defendants committed fraud and breach of their fiduciary duties to plaintiffs in their management of OTD. This court affirmed the judgment against defendants and the award of $4,242,222.22 in compensatory and punitive damages for what was described as defendants' "reprehensible" actions. In addition, the Tully I court reversed the denial of defendants' counterclaim for dissolution of OTD and remanded the matter for further proceedings. Id. at 686.
¶ 2 During the course of the Tully I appeal and prior to remand, plaintiffs initiated and completed postjudgment supplementary proceedings to enforce the money judgment against defendants pursuant to the Code of Civil Procedure (735 ILCS 5/2-1402(a) (West 2010)) and the Illinois Limited Liability Company Act (805 ILCS 180/30-20 (West 2010)) (Act). The proceedings resulted in the judicial sale and transfer of defendants' ownership interest in OTD to plaintiffs for the total amount of the money judgment. On remand, defendants filed a motion for relief in light of the reversal of defendants' counterclaim for dissolution. Plaintiffs filed a motion to dismiss the case as moot pursuant to section 2-619 of the Code of Civil Procedure. 735 ILCS 5/2-619 (West 2010). The trial court denied defendants' motion for relief and dismissed the case as moot.
¶ 3 Defendants appeal that order, arguing that the trial court erred in failing to implement the dissolution of OTD as this court ordered in Tully I. Defendants also argue that plaintiffs' mootness argument was forfeited for failure to raise this issue during proceedings in Tully I, claiming that the trial court could not dismiss the case on this basis. For the following reasons we affirm the judgment of the trial court.
¶ 5 Following a seven-day bench trial on plaintiffs' complaint for breach of fiduciary duty and fraud against defendants, the trial court issued a memorandum opinion and order on January 21, 2009. The court found defendants liable to plaintiffs for common law fraud and breach of fiduciary duty by diverting millions of dollars from OTD's accounts over a six-year period to, among other things, pay defendants' debts unrelated to OTD's business. The court awarded compensatory and punitive damages totaling $4,242,222.22.
¶ 6 A separate hearing was held on plaintiffs' claim that PAM should be expelled from OTD and defendants' counterclaim seeking dissolution of OTD. On April 28, 2009, the trial court ordered PAM expelled and disassociated from OTD, but concluded that dissolution of OTD was unwarranted. Final judgment was entered on September 28, 2009, and defendants appealed these orders. Defendants did not seek a stay of the judgment before either the trial court or this court and no supersedeas bond was posted.
¶ 7 In October and November 2009 plaintiffs filed citations to determine defendants' assets. Defendants were each served with the citations and filed appearances in December 2009. Plaintiffs sought the sale of defendants' interests in OTD to satisfy the judgment. On March 26, 2010, the trial court entered an order appointing a selling agent to sell McLean's 39% interest and LPDA's 10% interest in OTD. McLean and LPDA were ordered to execute and deliver to the selling agent any forms of assignment or other documents necessary to transfer their interests to the successful bidder.
¶ 8 A judicial sale was conducted by the selling agent on May 4, 2010, and plaintiffs were the successful bidders. McLean and LPDA refused to execute and return forms to the selling agent to complete the assignment of McLean's and LPDA's interests in OTD. On June 1, 2010, the trial court granted plaintiffs' motion to authorize the selling agent to execute and deliver the assignment documents.
¶ 9 McLean moved to vacate the June 1, 2010, order, asserting that an agreement had been reached with a third party to sell defendants' interest in OTD, but plaintiffs refused to complete the agreement because they could benefit more by purchasing the interest at the judicial sale. McLean contended that this bad-faith dealing required that the court vacate that order. The motion was denied and a final order was entered. Defendants did not appeal the final order authorizing the judicial sale.
¶ 10 On April 26, 2011, the court issued the opinion in Tully I, affirming in part and reversing in part the judgment of the trial court. Defendants admitted that McLean's actions were legally improper and they were liable for losses, but challenged the trial court's judgment as " 'seriously, unfairly and unjustifiably excessive' and inequitable" and a case of "judicial overkill." Tully I, 409 Ill. App. 3d at 663. Defendants sought to: reverse the judgment against LPDA; vacate the judgment against MCL; dissolve OTD; and reverse and vacate the punitive damages award; reverse the ...