Court of Appeals of Illinois, First District, Six Division
MICHAEL A. DOWNS, Plaintiff-Appellant,
LESLIE ROSENTHAL; J. ROBERT COLLINS; DREADNOUGHT PARTNERS, L.L.C.; and KNOT, L.L.C., Defendants-Appellees (Rosenthal Collins Group, L.L.C., Defendant)
In an action arising from plaintiff’s claim to an ownership interest in a limited liability company where the trial court entered an order in favor of plaintiff and against the company and the individual owners of the company, but the order was reversed in the company’s appeal, the trial court properly quashed the citations to discover assets plaintiff filed against the individual nonappealing defendants, since it would be contrary to the appellate court’s finding in the company’s appeal to leave the trial court’s initial judgment standing and impose it on the nonappealing defendants and give plaintiff a windfall.
Appeal from the Circuit Court of Cook County, No. 04-CH-1129; the Hon. LeRoy K. Martin, Jr., Judge, presiding.
Sperling & Slater, P.C., of Chicago (Steven C. Florsheim and Michael G. Dickler, of counsel), for appellant.
Wolin & Rosen, Ltd., of Chicago (Jeffrey Schulman, of counsel), for appellees.
Panel Presiding Justice Rochford and Justice Hall concurred in the judgment and opinion.
¶ 1 Plaintiff, Michael A. Downs, appeals the circuit court's order barring him from recovering damages from the individual, nonappealing defendants, Leslie Rosenthal (Rosenthal), J. Robert Collins (Collins), Dreadnought Partners, L.L.C. (Dreadnought), and Knot, L.L.C. (Knot), of the underlying order. Plaintiff contends that this court's opinion reversing the circuit court's original order in favor of plaintiff was limited to the appealing defendant, Rosenthal Collins Group, L.L.C. (RCG), and does not extend to the individual, nonappealing defendants. Instead, plaintiff contends that, because the individual, nonappealing defendants chose not to file an appeal of the circuit court's original final judgment, the order is res judicata and no court had jurisdiction to overturn the order as to them. Based on the following, we affirm.
¶ 2 FACTS
¶ 3 This case appears before us a second time. See Downs v. Rosenthal Collins Group, L.L.C., 2011 IL App (1st) 090970. RCG was a limited liability company (L.L.C.) that hired plaintiff in August of 1997 and terminated plaintiff on January 5, 2004. Collins and Rosenthal were the majority owners of RCG. According to plaintiff, Collins transferred his ownership interest in RCG to Knot in 2003, and Collins owned the controlling interest in Knot. Similarly, Rosenthal transferred his ownership interest in RCG to Dreadnought in 2003, and Rosenthal owned the controlling interest in Dreadnought.
¶ 4 In his third amended complaint, plaintiff asserted five counts all essentially alleging that he had an ownership interest in his former company and was entitled to the resulting profits of the company. Specifically, in count I, plaintiff requested a declaratory judgment that he maintained an ownership interest in RCG and an injunction for an accounting and to "partition his interest from that of defendants Collins, Rosenthal, Knot, and Dreadnought; and/or [require] defendants RCG, Collins, Rosenthal, Knot, and Dreadnought to accord Downs all rights commensurate with his ownership interest including his share of profits." In count II, plaintiff alleged the individual defendants, as majority owners, breached their fiduciary duty owed to plaintiff. In count III, plaintiff alleged RCG breached his employment agreement by failing to make severance payments. In count IV, plaintiff alleged, in the alternative to counts I and II, that RCG breached his employment agreement regarding his 2.5% equity interest. In count V, plaintiff alleged, in the alternative to counts I and II, that RCG breached an oral contract under which plaintiff was to receive an additional 4% equity interest.
¶ 5 On February 6, 2009, the circuit court found that plaintiff held a 2.5% ownership interest in RCG despite not having paid the requisite "book value" for those shares as provided in his employment contract and ordered that he be paid the resulting profit/loss distributions since his termination from the company in 2004. Specifically, during its oral ruling, the circuit court stated:
"I think Mr. Downs is owed two and a half percent of whatever distributions were made for Rosenthal and Collins from January of 2004 to the present. ***
*** [T]oday's order shall direct the defendants to convey to Mr. Downs, two and a half percent ownership in the company. They are to pay him *** two and a half percent of the distributions that were made between January '04 and today, minus the $125, 000 that Mr. Downs owes to them for the acquisition of those shares.
* * *
So I think [plaintiff's] damages are whatever Rosenthal and Collins owes him from distributions that were made between January of 2004 and February 6th, 2009. Those are his damages, and he's owed those shares. So at this point, he owns them. Pursuant to my order, he owns those shares. And your client is directed to execute whatever documents are needed or necessary so that a proof of ownership is evidently shown."
On March 20, 2009, the circuit court entered a written order, finding:
"Plaintiff Michael Downs owns a 2.5% equity ownership *** in defendant RCG (the Rosenthal Collins Group LLC). Downs shall be put in the same position regarding his interest in RCG and distributions there from that he would have held had his 2.5% equity interest in RCG been recognized from January 1, 2004 through the present;*** the defendants are ordered to pay the foregoing amounts, minus $125, 000 ***. RCG shall issue the appropriate tax schedule(s) to Downs in conjunction with this payment, providing the same tax treatment to ...