Court of Appeals of Illinois, First District, Sixth Division
JOHN OVNIK, KIMBERLEE OVNIK, and CHICAGO MUSIC WORKS, INC. d/b/a Deaf Dog Music, Plaintiffs-Appellees,
GALINA PODOLSKEY and VADIM GOSHKO, Defendants-Appellants.
from the Circuit Court of Cook County No. 13 L 12989
Honorable Patrick J. Sherlock, Judge, Presiding.
HOFFMAN PRESIDING JUSTICE delivered the judgment of the
court, with opinion. Justice Rochford concurred in the
judgment and opinion. Justice Delort specially concurred,
HOFFMAN PRESIDING JUSTICE
1 The defendants, Galina Podolskey (Galina) and Vadim Goshko
(Vadim), appeal from various orders entered by the circuit
court in the instant action brought by the plaintiffs, John
Ovnik (John), Kimberlee Ovnik (Kimberlee) (collectively, the
Ovniks), and Chicago Music Works, Inc. d/b/a Deaf Dog Music
(CMW), seeking damages by reason of the defendants'
failure to return the security deposit posted with them in
connection with the rental of a townhouse plus penalties,
interest, attorney fees, and costs under the Chicago
Residential Landlord and Tenant Ordinance (RLTO) (Chicago
Municipal Code § 5-12-010 et seq. (amended Mar.
31, 2004)). On appeal, the defendants contend, inter
alia, that the circuit court erred by: denying, in whole
or in part, three motions to dismiss that they brought
pursuant to section 2-619 of the Code of Civil Procedure
(Code) (735 ILCS 5/2-619 (West 2014)); and granting summary
judgment in Kimberlee's favor. For the reasons that
follow, we reverse the summary judgment entered by the
circuit court and remand the matter for further proceedings
consistent with this opinion.
2 The following factual recitation is derived from the
pleadings and exhibits of record.
3 In May 2009, the defendants, as the lessors, entered into a
two-year lease agreement to lease a townhouse located at 1816
South Indiana Avenue in Chicago. The lease agreement stated
that it was "for a private dwelling" and included a
copy of the RLTO. The named lessee was CMW and John,
CMW's sole shareholder, was a guarantor. Although
Kimberlee paid the $6, 375 security deposit with a personal
check (the 2009 security deposit), the lease agreement stated
that "[l]essee has deposited with [l]essor the security
deposit" and that, upon termination of the lease
agreement, the security deposit "shall be returned to
[l]essee, including interest[ ] ***." In October 2010,
CMW fell behind on its rent payments due under the lease. On
November 12, 2010, John sent a text message to Galina,
stating that she could deduct October's rent from the
2009 security deposit and that he was "not concerned
with earning interest on the deposit."
4 The lease agreement was renewed for another two-year term
beginning in June 2011. The renewal lease agreement listed
both CMW and John as tenants and required an additional
security deposit of $6, 757.50, which CMW paid (the 2011
supplemental security deposit), for a total security deposit
of $13, 132.50 (the combined security deposit). In May 2013,
at the end of the two-year renewal lease term, the townhouse
was vacated, but the defendants refused to return the
combined security deposit.
5 On November 14, 2013, the Ovniks filed the instant action
seeking to recover the combined security deposit plus
penalties, interest, attorney fees, and costs under sections
5-12-080(f)(1) and 5-12-180 of the RLTO (Chicago Municipal
Code §§ 5-12-080(f)(1) (amended July 28, 2010),
5-12-180 (amended Nov. 6, 1991)).
6 On August 11, 2014, the defendants filed a motion pursuant
to section 2-619 of the Code to dismiss that portion of the
plaintiffs' complaint seeking interest, penalties,
attorney fees, and costs, alleging that John waived the
plaintiffs' right to "any interest" on the
combined security deposit. In her affidavit filed in support
of the defendants' motion, Galina attested that she did
not pay interest on the security deposit due to the text
message she received from John on November 12, 2010. The
Ovniks filed a response and attached an affidavit from John,
who claimed that Galina offered to return the combined
security deposit with interest if he and Kimberlee signed a
release agreement when they vacated the townhouse. The
circuit court denied the defendants' motion to dismiss,
finding that the plaintiffs could not, as a matter of law,
waive their right to interest and were, therefore, not
estopped from raising a claim for interest.
7 A three-count second amended complaint was subsequently
filed by John, Kimberlee, and CMW, alleging that the
defendants: (1) failed to return the combined security
deposit (count I); failed to pay interest on the security
deposit from June 1, 2011, to May 31, 2012 (count II); and
failed to pay interest on the security deposit from June 1,
2012, to May 29, 2013 (count III). The same attorney
represented both CMW and the Ovniks.
8 On April 20, 2015, the defendants filed a motion to dismiss
the second amended complaint pursuant to section 2-619 of the
Code, arguing that the RLTO does not apply to corporate
entities such as CMW, and the plaintiffs, therefore, lacked
standing to bring a claim under the RLTO. They asserted that
the Ovniks were not parties to the lease agreements and that
it was CMW that paid both security deposits. The defendants
supported their motion with copies of CMW's rent checks.
9 On June 3, 2015, the circuit court granted the
defendants' motion in part. Although the circuit court
held that the RLTO applied to all three plaintiffs, it,
nevertheless, dismissed the Ovniks as party-plaintiffs for
lack of standing based upon its finding that they had not
paid any security deposit. The circuit court denied the
motion as to CMW.
10 On June 10, 2015, the defendants filed their answer to the
second amended complaint along with their affirmative
defenses and a four-count counterclaim. In their affirmative
defenses, the defendants again asserted that the RLTO did not
apply to corporate lessees and that John had waived interest
on the security deposit in his November 12, 2010, text
11 On July 2, 2015, the Ovniks filed a motion to reconsider
the circuit court's order dismissing them as plaintiffs.
They argued that, contrary to the court's factual
determination, Kimberlee had paid the 2009 security deposit.
In support of their motion was Kimberlee's affidavit and