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Michigan Indiana Condominium Association v. Michigan Place, LLC

Court of Appeals of Illinois, First District, Fourth Division

April 24, 2014

MICHIGAN INDIANA CONDOMINIUM ASSOCIATION, an Illinois Not-for-Profit Corporation and THE BOARD OF DIRECTORS OF THE MICHIGAN INDIANA CONDOMINIUM ASSOCIATION, Plaintiffs,
v.
MICHIGAN PLACE, LLC, an Illinois Limited Liability Company; SHOREBANK DEVELOPMENT CORPORATION CHICAGO, a Delaware Corporation; BANK OF AMERICA COMMUNITY DEVELOPMENT CORPORATION; OPTIMA INC., an Illinois Corporation; HELEN DUNLAP; TIMOTHY HANSEN; JAMES BELL; and SUSAN MCLANN, Defendants (Optima, Inc., an Illinois Corporation, Third-Party Plaintiff-Appellant; Paul Holzman, d/b/a Jenni, Inc.; and Loucon, Inc., Third-Party Defendants-Appellees, and RSR Holding Corporation, f/k/a Republic Windows, Third-Party Defendant)

Page 1247

Appeal from the Circuit Court of Cook County. No. 11 M1 157148 (Transferred to Law Division). Honorable Thomas R. Mulroy, Jr., Judge Presiding.

Affirmed.

SYLLABUS

Third-party plaintiff's action against third-party defendants for breach of contract and breach of implied warranties based on masonry services they provided in connection with the construction of a condominium complex was properly dismissed on the ground that the action was filed more than five years after the corporations under which third-party defendants did business were dissolved, and pursuant to section 12.80 of the Business Corporation Act, an action against a corporation must be commenced within five years of its dissolution.

For OPTIMA, INC., THIRD-PARTY PLAINTIFF-APPELLANT: Robert Marc Chemers, Matthew J. Egan, Scott L. Howie, Matthew J. Ligda, Richard M. Burgland, Pretzel & Stouffer, Chartered.

For JENNI, INC. AND LOUCON, INC., THIRD-PARTY DEFENDANTS-APPELLEES: Cathleen M. Hobson, Patrick H. Norris, Law Offices of Meachum, Starck, Boyle & Trafman.

JUSTICE EPSTEIN delivered the judgment of the court, with opinion. Presiding Justice Howse and Justice Fitzgerald Smith concurred in the judgment and opinion.

OPINION

EPSTEIN, JUSTICE.

Page 1248

[¶1] Third-party plaintiff, Optima, Inc. (Optima), appeals from the dismissal, pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West

Page 1249

2010)), of its third-party complaint against third-party defendants, Paul Holzman, d/b/a Jenni, Inc. (Jenni), and Loucon, Inc. (Loucon). We affirm the judgment of the circuit court of Cook County.

[¶2] BACKGROUND

[¶3] The underlying case arose out of the construction of a 119-unit residential condominium complex (the Complex). Optima was the general contractor and selected subcontractors to perform the construction work, including Jenni and Loucon, each of which provided masonry services. Construction was completed in June 2002. On September 2, 2003, Loucon was dissolved. Jenni was dissolved on January 1, 2006.

[¶4] In the spring of 2010, plaintiffs, Michigan Indiana Condominium Association and the board of directors of the Michigan Indiana Condominium Association, allegedly discovered latent defects in the Complex. On August 29, 2011, plaintiffs filed a complaint for damages against Optima and other defendants. A first amended complaint was filed on or about March 12, 2012. Plaintiffs asserted four counts against Optima and alleged that the Complex was not constructed in a watertight manner, and without the necessary flashing, weather barriers, caulking, and other weatherproofing components. Plaintiffs sought damages under breach of the implied warranty of habitability and breach of the implied warranty of good workmanship.

[¶5] On May 2, 2012, Optima filed its third-party complaint against Jenni and Loucon, as well as third-party defendant, RSR Holding Corporation, f/k/a Republic Windows, which is not a party to this appeal. Optima alleged breach of contract and breach of implied warranties against both Jenni and Loucon. Optima sought both indemnification and contribution. Because both corporations had been dissolved, Optima served its notice upon the Secretary of State pursuant to section 5.25 of the Business Corporation Act of 1983 (805 ILCS 5/1.01 et seq . (West 2010)) (the Act).

[¶6] Jenni and Loucon moved jointly to dismiss Optima's third-party complaint pursuant to sections 2-619(a)(5) and (a)(9) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(5), (a)(9) (West 2010)). Jenni and Loucon argued that, since the action against them was instituted more than five years after their dissolution (six years and three months after Jenni's dissolution; eight years and eight months after Loucon's dissolution), the Secretary of State was not authorized to act as the dissolved corporations' agent under the Act, service was therefore improper, and the court lacked personal jurisdiction.

[¶7] On November 29, 2012, the circuit court granted Jenni and Loucon's joint motion to dismiss and dismissed them with prejudice. The court also ordered that there was no just reason to delay enforcement or appeal pursuant to Supreme Court Rule 304(a). Ill. S.Ct. R. 304(a) (eff. Feb. 26, 2010). Optima now appeals.

[¶8] STANDARD OF REVIEW

[¶9] Our standard of review of the trial court's ruling on a section 2-619 motion to dismiss is de novo. Hamilton v. Conley, 356 Ill.App.3d 1048, 1053, 827 N.E.2d 949, 293 Ill.Dec. 68 (2005). De novo review is also appropriate where the outcome of a case turns on the construction of provisions of the Act, a matter that presents a question of ...


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