F.H. Paschen/S.N. Nielson v. Burnham Station

SUPREME COURT CASES

Laws-info.com » Cases » Illinois » 1st District Appellate » 2007 » F.H. Paschen/S.N. Nielson v. Burnham Station

State: Illinois

Court: 1st District Appellate

Docket No: 1-06-1064 Rel

Case Date: 03/20/2007

Preview:SECOND DIVISION March 20, 2007

No. 1-06-1064 F.H. PASCHEN/S.N. NIELSEN, INC., Plaintiff-Appellant, v. BURNHAM STATION, L.L.C., JAMES D. ) LETCHINGER, JDL DEVELOPMENT CORPORATION, COHEN FINANCIAL CORPORATION, TIGERMAN MCCURRY ARCHITECTS and CROWN CONSTRUCTION COMPANY, Defendants-Appellees. ) ) ) ) ) ) ) ) ) ) ) ) Appeal from the Circuit Court of Cook County.

Honorable Stuart E. Palmer, Judge Presiding.

JUSTICE SOUTH delivered the opinion of the court: This appeal arises out of two orders of the circuit court of Cook County, one of which granted defendant Tigerman McCurry Architects' motion for summary judgment as to counts VI and VII of the second amended complaint and one of which denied plaintiff F.H. Paschen/S.N. Nielsen, Inc.'s (FHP/SNN) motion to strike an affidavit that was filed in support thereof. The Burnham Station, L.L.C. (Burnham) is an Illinois limited liability company that was formed on September 18, 1997, by James Letchinger and JDL Development to acquire and develop certain real estate located at 15th and Clark Streets in Chicago, Illinois, for the design, construction, and sale of condominiums and town homes. Plaintiff, FHP/SNN, was an investor of Burnham Station and executed a subscription agreement to purchase six membership interests

1-06-1064 in Burnham for $600,000. JDL managed Burnham Station, and Letchinger is its president. Defendant Tigerman McCurry Architects (TMA) is an Illinois architectural firm that drew up the architectural and design drawings, plans and specifications of all of the underground and aboveground structures at the Burnham Station project, and Stanley Tigerman is its president. The project did not go as planned, and plaintiff eventually lost its $600,000 investment. Plaintiff demanded the return of its investment monies, but such demand was refused by JDL, Letchinger, and Burnham. On March 20, 2002, plaintiff filed a seven-count complaint against Burnham, James D. Letchinger, JDL Development, Cohen Financial Corporation, TMA, and Crown Construction Company. Plaintiff raised the following claims: a statutory breach of good faith and fair dealing against Letchinger, JDL, and Burnham; a common law breach of fiduciary duties against Letchinger, JDL, and Burnham; a request for an accounting as to Letchinger, JDL, and Burnham; fraud and fraudulent concealment against Letchinger, JDL, and Burnham; and fraud and a scheme to defraud as to Letchinger, Cohen, JDL, and Burnham. The remaining two counts, VI and VII, which are the subjects of this appeal, relate solely to defendant TMA. Specifically, count VI alleges a claim for derivative breach of contract in that TMA failed to provide adequate drawings, plans, and specifications for the development of the Burnham project, and count VII alleges derivative professional negligence in that as a direct result of the breach, plaintiff suffered "losses of many millions of dollars," which caused "costly delays, extra costs, the permanent loss of substantial and valuable parking and of a substantial number of valuable dwelling units and other improvements to the development as well as many

-2-

1-06-1064 other costly damages." TMA filed a motion for summary judgment, alleging that plaintiff lacked standing to sue derivatively on behalf of Burnham because the contract at the center of the controversy was entered into solely between TMA and JDL, not Burnham, and TMA never consented to an assignment of its contract. TMA also maintained in its motion that neither plaintiff nor Burnham was an intended third-party beneficiary of the contract. In support of this argument, TMA submitted the affidavit of its president, Stanley Tigerman, who averred that TMA was retained by JDL, and he on behalf of TMA never consented to an assignment of the contract to any parties. As to count VII, TMA argued that it violated the economic loss doctrine. In its response to the motion for summary judgment, plaintiff moved to strike paragraphs two, three, and four of Tigerman's affidavit on the grounds that the statements were conclusory and not facts that would be admissible at trial. Plaintiff further argued as to count VI that it had established sufficient material facts demonstrating that the agreement was entered into between TMA and Burnham whereas TMA had provided insufficient factual support for its contention that the contract was between TMA and JDL. As to count VII, plaintiff argued that the economic loss doctrine did not apply since it was seeking damages sustained to the project as a result of TMA's negligent acts in designing the plans for the project and not the costs to repair the defects caused by the defective plans. On March 13, 2006, the trial court ruled that Tigerman's affidavit was not conclusory but was based upon personal knowledge. The court noted that plaintiff failed to produce a written contract or an assignment of the contract between TMA and Burnham, while TMA had presented

-3-

1-06-1064 facts showing that all of the invoices were always sent from Tigerman to JDL, and a contractual relationship between those two companies preexisted the formation of the Burnham Station development. In summarizing its ruling, the court stated: "I find that there's no issue of material fact that precludes summary judgment, and I find that the plaintiff does not have standing to sue TMA, as no contract relationship existed between them. Summary judgment is allowed or granted with regard to Count 6. As to Count 7, I find that the professional negligence claim in Count 7 violated the Economic Loss Doctrine. And I agree that 2314 Lincoln Park West Condominium Association is on point with regard to this matter, and summary judgment is granted with regard to Count 7." The court further found there was no just reason to delay enforcement or appeal of the order pursuant to Illinois Supreme Court Rule 304(a) (210 Ill. 2d R. 304(a)). Plaintiff has raised the following issues for our review: (1) whether the trial court erred in failing to strike the affidavit of Stanley Tigerman; and (2) whether the trial court erred in granting the motion for summary judgment as to counts VI and VII of the second amended complaint. Initially, plaintiff argues the court erred in denying its motion to strike the affidavit of Stanley Tigerman. In that affidavit, Stanley Tigerman avers: "1. At all times relevant herein, I have been the president of Tigerman McCurry Architects, Let. (`TMA').

-4-

1-06-1064 2. TMA was retained by JDL Development Corporation to provide professional services for the development of the Burnham Station project. 3. TMA did not consent to an assignment of its contract with JDL to any Parties. 4. TMA was not aware of the identity of any of the investors in the LLC and, in fact, did not even know of the creation of the LLC." Supreme Court Rule 191 provides in pertinent part: "Affidavits in support of and in opposition to a motion for summary judgment under section 2-1005 of the Code of Civil Procedure *** shall be made on the personal knowledge of the affiants; shall set forth with particularity the facts upon which the claim, counterclaim, or defense is based; *** shall not consist of conclusions but of facts admissible in evidence; and shall affirmatively show that the affiant, if sworn as a witness, can testify competently thereto." (Emphasis added.) 145 Ill. 2d R. 191. "If, from the document as a whole, it appears that the affidavit is based upon the personal knowledge of the affiant and there is a reasonable inference that the affiant could competently testify to its contents at trial, Rule 191 is satisfied." Kugler v. Southmark Realty Partners III, 309 Ill. App. 3d 790, 795 (1999). "[A]ffidavits offered in support of or in opposition to a motion for

-5-

1-06-1064 summary judgment that merely set forth legal conclusions or opinions without stating supporting facts are insufficient and must be stricken." Steiner Electric Co. v. NuLine Technologies, Inc., 364 Ill. App. 3d 876, 881 (2006). Furthermore, courts must accept an affidavit as true if it is uncontradicted by counteraffidavits or other evidentiary materials. Lindahl v. City of Des Plaines, 210 Ill. App. 3d 281, 299 (1991). Whether to grant a motion to strike an affidavit submitted in support of a summary judgment motion is a question within the sound discretion of the circuit court. Kugler, 309 Ill. App. 3d at 795. In his affidavit, Stanley Tigerman certified under oath that he is the president of Tigerman McCurry Architects. A reasonable inference can be drawn that as president, he would have personal knowledge of his company's transactions, including with whom it contracts. Tigerman's statements that his company was retained by JDL, that TMA never consented to an assignment of the contract to any parties, and he was unaware of the identity of any of the investors in the Burnham project or of the creation of Burnham in no way constituted opinions or legal conclusions. Rather, those simple declaratory statements were facts based upon his personal knowledge. Furthermore, at trial he could competently testify to these same facts which would be admissible into evidence. Contrary to plaintiff's argument, we find these averments are but simple statements of facts and, therefore, comport with Supreme Court Rule 191. Plaintiff notes that the affidavit failed to provide any facts surrounding the formation of the agreement between TMA and JDL, such as the actual contract, the date it was entered into, the specific parties who made it, the agreed-upon price, or the services to be rendered. However, -6-

1-06-1064 while we agree more specificity could have been provided, there was sufficient information in the affidavit nonetheless to establish its essential purpose, which was to inform the court that the contract was solely between TMA and JDL. And as the trial court noted in its decision, plaintiff never introduced a counteraffidavit or presented evidentiary facts indicating that the contract was between Burnham and TMA. Inasmuch as Stanley Tigerman's affidavit was uncontradicted, the court was required to accept it as true. See Lindahl, 210 Ill. App. 3d at 299. Therefore, we find no abuse of discretion in the denial of plaintiff's motion to strike Stanley Tigerman's affidavit. Plaintiff further contends that despite the Tigerman affidavit, there is sufficient evidence in the record to create a factual dispute, thereby precluding entry of summary judgment. Our standard of review of an order granting summary judgment is de novo. Espinoza v. Elgin, Joliet & Eastern Ry. Co., 165 Ill. 2d 107, 113 (1995). We must consider the affidavits, depositions, admissions, exhibits, and pleadings on file and construe them strictly against the movant. Espinoza, 165 Ill. 2d at 113. Summary judgment is properly granted where the pleadings, depositions, admissions, affidavits and exhibits on file, when viewed in the light most favorable to the nonmoving party, show there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Petrovich v. Share Health Plan of Illinois, Inc., 188 Ill. 2d 17, 30-31 (1999). Although summary judgment has been called a "drastic measure," it is an appropriate tool to employ in the expeditious disposition of a lawsuit in which " `the right of the moving party is clear and free from doubt.' " Morris v. Margulis, 197 Ill. 2d 28, 35 (2001), quoting Purtill v. Hess, 111 Ill. 2d 229, 240 (1986). Accordingly, the party moving for summary judgment must show, as a matter of law, that it is entitled to judgment. -7-

1-06-1064 Wright v. St. John's Hospital of the Hospital Sisters of the Third Order of St. Francis, 229 Ill. App. 3d 680 (1992). Plaintiff suggests that a factual dispute is established by the record. For example, in the confidential private placement memorandum, a document that was sent by JDL to all of the investors in the Burnham project, including plaintiff, it states that the "company," i.e., Burnham Station, L.L.C., has "engaged the architectural firm of Tigerman McCurry Architects to design the project." Furthermore, in Letchinger's deposition, he initially testified that as far as he knew, Burnham hired all of the architects to perform the services. However, later in his deposition he testified unequivocally that the agreement to design the project for Burnham was between TMA and JDL, and that all of the invoices for payment of the services rendered to the Burnham project were sent to JDL in its capacity as Burnham's manager but were paid by Burnham. He also testified that all of the lien waivers were signed by TMA in exchange for payment for the work which was performed on the Burnham project in favor of Burnham Station, L.L.C. Defendant argues that evidence of the formation of the contract between it and JDL came from the deposition testimony of Stanley Tigerman who testified that he became involved in the Burnham project when he was hired by James Letchinger: "Q. And when you said that Jim Letchinger hired you, was it Jim Letchinger or was it the entity

Download F.H. Paschen/S.N. Nielson v. Burnham Station.pdf