United States District Court, N.D. Illinois, Eastern Division
THOMAS J. STEINES, Plaintiff,
DONALD W. MENRISKY and SUSAN MENRISKY, Defendants.
MEMORANDUM OPINION AND ORDER
David Weisman, Magistrate Judge
the Court is defendants' motion to modify the temporary
standby order. The Court held an evidentiary hearing on
December 19, 2016. The motion seeks particularized relief
including bonus payments to employees of SimpleSoft, Inc., as
well as rent payments. Additionally, the motion seeks relief
related to corporate tax issues still lingering from 2015.
For the reasons stated herein, the motion is granted in part
and denied in part.
Brief summary of litigation and claims
parties are in agreement that Judge Feinerman, at a hearing
on December 14, 2016, found a deadlock under 805 Ill. Comp.
Stat. 5/12.56(a). (ECF #90 at 3.) This finding allows a court
to order various relief. The scope of that relief is
contested by the parties, and addressed below. When acting
under 5/12.56, a court's objective is to “preserve
the corporate assets and carry on the business of the
corporation until a full hearing can be had.” 805 Ill.
Comp. Stat. 5/12.60(d).
Authority to Act
Steines filed a motion contesting this Court's
jurisdiction to act on the defendants' motion for relief,
raising two issues. First, Steines argues that a magistrate
judge lacks the authority to definitively act on injunctive
relief, citing to 28 U.S.C. § 636. Second, Steines
argues that this Court lacks authority under 5/12.56 to
“create corporate action” and is limited to
enforcing or modifying action that has already been enacted
by the corporation. (ECF #90 at 6.)
the limits under 5/12.56, Steines' position is simply
wrong as a matter of statutory construction. In various ways,
the statute makes clear that a court has the authority to
order affirmative acts. As an initial matter, 5/12.56(b)
provides inter alia that a court “may order .
. . the performance, prohibition, alteration, or
setting aside of any action of the corporation.”
(emphasis added.) The inclusion of “performance”
in this context disproves the limited reading that Steines
propounds. The statute also describes a court's power as
“including but not limited to” a wide variety of
actions, including the performance of corporate act.
Id. Finally, 5/12.56(c) provides that the enumerated
powers noted in subsection (b) (supra) “shall
not be exclusive of other legal and equitable remedies which
the court may impose.” In short, Steines' argument
is wholly without statutory language support. We therefore
reject it, and find that this Court has the authority to
order corporate acts based on the deadlock found by Judge
Steines' injunctive authority argument, while not wholly
convinced that it is correct, we find the argument more
meritorious. We are not convinced that modifying an agreed
order (which was not decided by the district court on the
merits but merely adopted by the court) is necessarily
injunctive relief. Additionally, the parties contest whether
the controlling agreed order [ECF #23 & #43] is still
applicable. (See ECF #77 n. 1 (defendants
assert that the agreed order is no longer controlling because
there no longer is a preliminary injunction hearing
scheduled). Interpreting the meaning of an injunction is not
considered awarding injunctive relief. Compare American
River Transportation Co. v. Ryan, 579 F.3d 820, 824 (7th
Cir. 2009) (distinguishing between an order interpreting an
injunction and one modifying an injunction as defining
appellate jurisdiction). Finally, this Court is being asked
to direct Simplesoft to take certain action. Simplesoft is
not a party to this matter, and under Federal Rule of Civil
Procedure 65(d), injunctive relief is limited to the parties
of an action and those acting in concert with them.
United States v. Kirschenbaum, 156 F.3d 784, 794
(7th Cir. 1998) (“A district court may not enjoin
non-parties who are neither acting in concert with the
enjoined party nor are in the capacity of agents, employees,
officers, etc. of the enjoined party.”). For all of
these reasons, we have our doubts as to whether this Court is
being asked to award injunctive relief of any kind.
event, because this Court's order (irrespective of which
authority under which we act) will be reviewable,
see Federal Rule of Civil Procedure 72, we have
confined our affirmative relief to the powers vested in this
court under 5/12.56, a statutory grant of authority we are
completely comfortable exists.
seek various forms of relief, which we identify below in
ascending order of difficulty.
to Susan Menrisky
their motion, the Menriskys originally sought a $3, 000.00
bonus for Susan Menrisky. (ECF #77 at 9.) At the hearing
itself, counsel for the Menriskys withdrew the bonus request.
The request is therefore denied as moot.
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