Court of Appeals of Illinois, First District, Third Division
from the Circuit Court of Cook County. No. 16 L 11404
Honorable Patricia O. Sheahan, Judge Presiding.
Xydakis, of Chicago, for appellants.
Michael T. Trucco and Brian E. Martin, of Stamos & Trucco
LLP, of Chicago, for appellees.
PRESIDING JUSTICE ELLIS delivered the judgment of the court,
with opinion. Presiding Justice Fitzgerald Smith and Justice
Howse concurred in the judgment and opinion.
1 In November 2016, plaintiffs, Edward Shrock and Baby
Supermall, LLC (BSM), sued the law firms Ungaretti &
Harris Ltd. (Ungaretti) and Nixon Peabody LLP (Nixon Peabody)
(with whom Ungaretti merged) and two of their attorneys, John
Ruskusky and Stanton B. Miller. The crux of Shrock's
complaint was that defendants aided and abetted one of their
clients, Robert Meier, in violating an injunction that Shrock
obtained against Meier. The circuit court dismissed
Shrock's lawsuit, among other reasons, as time-barred
under the two-year statute of limitations applicable to
actions against attorneys for conduct arising from their
rendition of professional services. We affirm.
3 We draw our facts from two sources. First, the allegations
of the second amended complaint, which we take as true at the
pleading stage. See Goral v. Dart, 2019 IL App.
(1st) 181646, ¶ 6. We also judicially notice various
filings in the underlying cases that prompted this lawsuit,
as well as pleadings in this lawsuit. See People v.
Davis, 65 Ill.2d 157, 164 (1976).
4 Because of the issue involved, it is necessary to
specifically detail several acts that took place and the
dates on which they occurred.
5 I. Actions Leading Up to Shrock's Lawsuit Against Meier
6 Plaintiff BSM, an Internet retailer of baby products, is an
Illinois limited liability company that was formed in October
2003. BSM is a manager-managed limited liability company with
a single manager, Robert Meier, and three members: Meier,
plaintiff Shrock, and Baby Supermall, Inc., a corporation of
which Shrock was president.
7 Among its many provisions, BSM's operating agreement
granted extraordinarily broad powers to its manager, Meier.
Specifically, section 6.1.2 of the agreement gave Meier
"full, exclusive, and complete discretion, power, and
authority, subject in all cases to the other provisions of
this Agreement and the requirements of applicable law, to
manage, control, administer, and operate the business and
affairs of the Company for the purposes herein stated, and to
make all decisions affecting such business and affairs."
8 Eventually, Meier came to own 87.5% of BSM, and Shrock
owned the remaining 12.5% stake in BSM. According to Shrock,
at some point, Meier offered to buy Shrock's 12.5% share,
but Shrock was unwilling to sell.
9 As Shrock tells it, a campaign of retribution ensued:
First, Meier reduced Shrock's salary from $75, 000 to
$40, 000. Then Meier increased his own salary, from
$150, 000 to $300, 000. And to boot, Meier refused to let
Shrock participate in any corporate decision-making.
10 More problematically, and more pertinent to this case,
Meier created a series of agreements that he referred to as
"profit sharing" agreements. Under these
agreements, BSM, acting through Meier, in his capacity as
BSM's manager, and Meier, acting in his individual
capacity, agreed that BSM would pay Meier a higher percentage
of its profits in exchange for Meier's agreement to defer
his salary and guarantee BSM's debts and expenses.
According to Shrock, the purpose of these so-called
"profit sharing" agreements was to zero-out
BSM's balance sheet to ensure that BSM had no profits.
11 BSM then hired Meier's wife and stepson and paid them
20% and 10% of BSM's profits, respectively-actions that
Shrock alleged violated Illinois law and the operating
12 II. The 2009 Lawsuit: Shrock Sues Meier for Breach of
13 In 2009, Shrock sued Meier for breach of fiduciary duty in
the circuit court of Cook County (the 2009 Lawsuit).
Defendants Ruskusky and Stanton, attorneys at defendant
Ungaretti, represented Meier.
14 A. The 2010 Injunction Against Meier
15 On May 18, 2010, after finding a likelihood that Meier had
breached his fiduciary duty to Shrock, the circuit court
entered an injunction against Meier. Relevant here, the order
did two things: (1) it barred Meier from making any further
payments to himself, his wife, or his son under the guise of
"profit sharing, " and (2) it limited Meier from
paying himself, his wife, or his son salaries in excess of
$350, 000, $120, 000, and $110, 000, respectively.
16 About 10 months later, Shrock filed a second motion for an
injunction to enjoin Meier from paying himself "profit
sharing, " after Meier allegedly drew down BSM's
line of credit by $700, 000 to purchase a house. On March 24,
2011, attorneys with Ungaretti responded to that motion by
telling the circuit court there was "no basis for an
injunction based upon plaintiffs latest baseless
17 Then, in May 2012, Shrock filed a motion for a receiver,
in which he alleged that Meier "may be" violating
the injunction. In response, Meier (through Ruskusky) denied
that allegation and insisted that Meier had not taken any
profit sharing since the injunction was entered.
18 In August 2012, Shrock filed a petition for rule to show
cause against Meier, alleging that he was again violating the
injunction. In response, Meier (through Ruskusky) argued that
Meier was merely " 'accruing' " money, not
actually paying it out.
19 In May 2013, Shrock brought another petition for rule to
show cause against Meier. In response, Ruskusky told the
court, " 'I assure you that Mr. Meier has fully
complied with all court orders.' "
20 In June 2013, Meier filed a motion to modify the
injunction. Meier included an affidavit drafted by Ruskusky,
in which Meier swore that he had not made any payments under
the profit-sharing plans since the injunction went into
effect. Instead, he claimed that amounts owed to Meier, his
wife, and his son by virtue of the profit-sharing agreements
had merely " 'accrued.' "
21 B. Shrock's August 2, 2013, Filing
22 On August 2, 2013, Shrock filed an opposition to
Meier's request to modify the injunction. In it, Shrock
again argued that Meier had repeatedly violated the
injunction by "just reclassify[ing] the profit sharing
as 'bonuses, ' 'loans, ' and alike."
Shrock quoted statements made by Meier's attorney,
defendant Ruskusky, to the court: " 'I assure you,
' Ruskusky responded, 'Mr. Meier has fully complied
with all Court Orders.' All Mr. Meier did was 'accrue
the amounts, ' Ruskusky went on, let 'Shrock produce
documents to back up his claims.' "
23 Shrock did provide backup, he wrote in this filing, via
W-2s from Meier, his wife, and stepson, along with other
financial data on which Shrock's expert relied to
"verify [that] Meier and [his wife and stepson] pocketed
the money." In the face of that evidence, Shrock's
filing claimed, defendant Ruskusky "reversed his stance.
Yes, Meier did pay out these amounts, Ruskusky admitted, but