Court of Appeals of Illinois, First District, Third Division
Appeal from the Circuit Court of Cook County. 11 CH 5620 . Honorable Franklin U. Valderrama, Judge Presiding.
The trial court erred in granting plaintiffs partial summary judgment on their complaint seeking the inspection of defendant condominium association's records, since plaintiffs failed to satisfy the requirement tat their request be made for a proper purpose, and in view of the reversal of the partial summary judgment for plaintiffs, the award of attorney fees to plaintiffs was vacated and the denial of defendants' motion for sanctions under Supreme Court Rule 137 was also vacated; however, the cause was remanded to allow the trial court to reconsider defendants' request for sanctions in light of the questions as to the bona fides of plaintiffs' request for inspection.
For APPELLANTS: The Law Office of Jefferey M. Hagen, Chicago, IL (Jeffery M. Hagen, of counsel).
For APPELLEES: Luis Oviedo, Chicago, IL (Luis Oviedo, of counsel).
JUSTICE MASON delivered the judgment of the court, with opinion. Justices Neville and Pucinski concurred in the judgment and opinion.
[¶1] Plaintiffs-appellees Luis Oviedo and his wholly owned limited liability company, VMO Properties, LLC (VMO), filed a six-count complaint against defendants-appellants, 1270 S. Blue Island Condominium Association (Association) and Michelle Osorio. The complaint alleged, inter alia, breach of fiduciary duty and violations of municipal codes and statutes related to the inspection of Association records. The parties filed cross-motions for summary judgment. The circuit court granted, in part, Oviedo and VMO's motion on the two counts relating to the inspection of Association records. The circuit court also denied the Association's motion for sanctions and awarded VMO $27,104 in attorney fees and costs.
[¶2] On appeal, the Association contends that the circuit court erred in granting partial summary judgment where (1) Oviedo's request was made only after the Association filed a forcible entry and detainer action against Oviedo and VMO for
failure to pay assessments, (2) Oviedo's request was not to inspect the records but for the Association to produce copies of them, something that is not required by ordinance or statute, and (3) the Association did not deny Oviedo's request, but responded by sending copies of scanned bank statements and offering to make the records available for inspection. The Association also contests the circuit court's award of attorney fees to VMO. Finally, the Association contends that the circuit court erred in denying its motion for sanctions where the allegations in the complaint were based on unsupported and frivolous claims and the lawsuit was retaliatory.
[¶3] We find that the trial court erred in granting summary judgment in favor of Oviedo and VMO because Oviedo's demand was neither proper in form nor for a proper purpose. Further, the Association did not deny Oviedo and VMO the opportunity to inspect the records. We vacate the award of attorney fees to VMO and also vacate the denial of the Association's motion for Rule 137 sanctions (Ill. S.Ct. R. 137 (eff. Feb. 1, 1994)). Therefore, we reverse in part, vacate in part and remand for further proceedings.
[¶5] The Association was established to administer a three-unit condominium building located at 1270 South Blue Island in Chicago. The management of the Association was turned over to the unit owners by the developer in June 2006. Osorio, the only unit owner to attend the turnover meeting, was elected president.
[¶6] In March 2007, the first annual meeting was held and was attended by all three unit owners. Although Osorio sent out a notice for an annual meeting in March 2008 and the other two unit owners agreed to the date and time, neither of them attended.
[¶7] Osorio subsequently sent an email dated March 18, 2008, informing the other two owners of the items she wanted to discuss at the meeting that they failed to attend, including the fact that Oviedo was currently in arrears on the payment of monthly assessments, and asking them to take over the responsibilities of managing the Association. Oviedo, a licensed Illinois attorney, and the other unit owner ignored Osorio's request and she continued to act as president of the Association.
[¶8] The Association's declaration provides that a board member must be a unit owner who resides on the property. In instances where the unit owner is a corporation or other legal entity other than a natural person, an officer, director or other designated agent of the entity is eligible to be a board member, provided that person resides on the property. In the event that a board member fails to meet these qualifications, his place on the board shall be deemed vacant. In 2006, Osorio was the only unit owner who resided in her unit.
[¶9] In April 2009, the third unit owner stopped paying assessments and that unit subsequently went into foreclosure. The current owners of the third unit did not purchase the unit until December 2011. Therefore, from April 2009 until December 2011, the Association did not receive monthly assessments for the third unit.
[¶10] As far back as 2006, Oviedo's payment of assessments was sporadic. When he received notification from Osorio in December 2006 that he was two months in arrears, Oviedo responded that he was unilaterally electing to make quarterly payments because it was more convenient for him. But the record reveals ...