Adams v. Meyers

• Decision Date: 30 July 1993
• Docket Number: No. 7,D,No. 1-92-0310,7,1-92-0310
• Citation: 250 Ill.App.3d 477,620 N.E.2d 1298,190 Ill.Dec. 37
• Parties: , 190 Ill.Dec. 37 Ware ADAMS and David DeHetre, Plaintiffs-Appellants, v. Thomas R. MEYERS and the Carl Sandburg Village Condominium Associationefendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 1298

620 N.E.2d 1298

250 Ill.App.3d 477, 190 Ill.Dec. 37

Ware ADAMS and David DeHetre, Plaintiffs-Appellants, v. Thomas R. MEYERS and the Carl Sandburg Village Condominium Association No. 7, Defendants-Appellees.

No. 1-92-0310.

Appellate Court of Illinois,

First District, Sixth Division.

July 30, 1993.

Rehearing Denied Sept. 15, 1993.

Ware Adams, Chicago, for plaintiffs-appellants.

Goldberg, Kohn, Bell, Black, Rosenbloom & Moritz, Ltd., Chicago (Michael D. Karpeles, William C. Meyers and David J. Chizewer, of counsel), for defendants-appellees.

Justice GIANNIS delivered the opinion of the court:

Plaintiffs, unit owners in an Illinois condominium association, filed a complaint attacking several association election practices. After holding multiple hearings on the issues raised, the trial court ultimately ruled that plaintiffs lacked standing and dismissed the suit. Plaintiffs now appeal.

On November 8, 1990, plaintiff, Ware Adams (Adams), filed his original, two-count complaint (Complaint) against The Carl Sandburg Village Condominium Association No. 7 (Association) and its Board of Managers (Board). The Association is formed subject to the Condominium Property Act (Ill.Rev.Stat.1991, ch. 30, par. 301 et seq.) and is incorporated pursuant to the General Not For Profit Corporation Act of 1986 (Ill.Rev.Stat.1991, ch. 32, par. 101.01 et seq.; see Ill.Rev.Stat.1991, ch. 32, par. 103.05(a)(25).) Adams was at the time, and apparently remains, a unit owner in the Association. He was also then a candidate for Board election. In count I, Adams sought to postpone the 1990 annual meeting of the Association, at which the Association's election of Board members was scheduled to occur. Specifically, Adams alleged that: (1) the notice of the 1990 annual meeting was not timely delivered to unit owners; (2) the proxy contained in the notice-mailing was defective and misleading; and, (3) one of the options suggested by the proxy, by which a unit owner could deliver his blank proxy to the president of the Board and have it voted by a majority of the Board, was deceptive, fraudulent and violated Illinois law. Count II of Adams' complaint sought the production of certain Association documents. Although Adams originally sued both the Association and each of its Board members, he apparently only served the Association and Thomas Meyers, the Association's president. Adams did not bring his Complaint as a derivative action or as a class action.

On the following day, November 9, 1990, Adams brought an "Emergency Motion" seeking a court order delaying the annual meeting. Following hearing, the trial court refused to postpone the meeting, but did strike from the Board's proxy language indicating that the form could not be photocopied. The trial court also indicated to the parties that any proxy complying with Illinois law was to be accepted at the meeting and indicated that unit owners could thereby revoke any proxy previously submitted to the Board. Adams did not appeal the trial court's order and was subsequently elected to the Board for a two year term.

Approximately a year later, just prior to the 1991 election, the Board sent a letter dated October 31, 1991, to all unit owners (the October 31 Letter). The October 31 Letter and accompanying notice announced the November 12, 1991 annual meeting. The October 31 Letter was also accompanied by biographies of the candidates, by the Association's "Official Proxy," as well as a stamped self-addressed envelope. A subsequent letter, dated November 5, 1991, was also sent to all unit owners (the November 5 Letter). The November 5 Letter was apparently sent following complaints from Board-candidate David DeHetre. The November 5 Letter explained the rules regarding cumulative voting to unit owners and was accompanied by a proxy identical in form to the one which accompanied the November 5 Letter.

On November 12, 1991, Adams amended his Complaint by adding a third count and joining plaintiff David DeHetre. In Count III, Plaintiffs complained that: (1) the 1991 proxy and proxy solicitation materials failed to adequately inform unit owners of their right to cumulate their votes; (2) the notice of the annual meeting included with the October 31 Letter discriminated against non-resident unit owners by arbitrarily setting November 5, 1991, as a deadline for nominating candidates for Board election; (3) defendant Meyers improperly incurred costs to the Association by including a self-addressed stamped envelope with the October 31 Letter and by mailing the November 5 Letter without receiving proper authorization from the Board; (4) the biographical information forms of candidates included in the proxy materials discriminated in favor of incumbent Board members and violated the Condominium Property Act (Ill.Rev.Stat.1991, ch. 30, par. 318(a)(17)); and, (5) the practice of the Board in voting blank proxies following the Association's annual meeting violated certain open meeting provisions of the Condominium Property Act (Ill.Rev.Stat.1991, ch. 30, par. 318(a)(9)). Count III of plaintiffs' complaint did not, however, challenge the timeliness of the 1991 annual meeting notice as Adams had done the previous year.

To put plaintiffs' claims in context, a brief review of the procedures used in the 1991 election is helpful. In order to vote at the 1991 election, a unit owner could choose any one of four methods as described by the materials included with the October 31 Letter. First, a unit owner could appear at the annual meeting in person and cast a ballot in favor of any of the candidates. Second, the unit owner could vote by what the parties have referred to as a "restricted" proxy. Use of the restricted proxy simply involved the unit owner indicating in writing a preference for a particular candidate or candidates, including any write-in candidates, and such proxies would then be counted in strict accordance with the unit owner's wishes. Third, a unit owner could vote by "unrestricted" proxy, wherein the proxy would be given to a particular unit owner who would vote it as the proxy holder saw fit. Finally, a unit owner could designate the president as his proxy who would then vote such proxy in conformance with the wishes of the majority of the Board members present at the meeting, in accordance with a standing Board resolution (the Proxy Resolution). The proxies sent to all unit owners in both 1990 and 1991 indicated that proxies returned signed, but blank, would be voted in this way.

That same day, the day of the annual meeting, November 12, 1991, plaintiff Adams, along with plaintiff DeHetre, again brought an emergency motion seeking a temporary restraining order. In their motion, plaintiffs principally argued that the proxies were invalid because they failed to adequately inform unit owners of their right to cumulate their votes, and because certain proxies were to be voted pursuant to the Proxy Resolution. Believing that the disputed proxies might not substantively affect the outcome of the election and that the plaintiffs' arguments might then be moot, the trial judge ordered that the election could proceed, but restrained the Board from declaring any official results until he had the opportunity to review the results.

Two days later, on November 14, 1991, the trial court was presented with the results of the election. At the hearing, the trial court held that "as a matter of law," the proxies which were restricted were valid, regardless of when they were dated. The court then ordered defendants to tabulate the election results, excluding unrestricted proxies dated prior to November 7, 1991, the date on which the trial court held that the November 5 Letter would have been received, to determine if such an exclusion would have any impact upon the election results.

On November 18, 1991, the parties returned to court. From a recounting it was discovered that plaintiff DeHetre placed fifth and had won a full two year term on the Board. In the original count he had lost. The fact that plaintiff DeHetre won a seat on the Board prompted the court to ask the following:

THE COURT: "All right. Let me ask you this question, since the two plaintiffs in this case both won election, if we count all the votes, what is their interest in pursuing this case?"

The hearing adjourned with the court requesting additional briefing from the parties on standing and mootness issues.

After hearing on November 27, 1991, the trial court denied plaintiffs' motion in its entirety, and ordered that the Association's 1991 election results could be released as official elections results with full force and effect. The court also found that the Association's notice regarding the election was legally sufficient, and that the challenged Proxy Resolution complied with applicable law. Plaintiffs did not appeal this order. However, the issues raised by count II of plaintiffs' Complaint, the document production demand, remained unresolved.

At a status hearing on December 9, 1991, plaintiff Adams indicated that progress was being made on count II, the document production demands, but that questions remained as to the applicability in future elections of section 18(a)(17) of the Condominium Property Act (Ill.Rev.Stat.1991, ch. 30, par. 318(a)(17)). Section 18(a)(17) had recently been passed into law and plaintiffs contended that the application of this newly enacted section might become an issue in the 1992 elections. The court suggested that plaintiffs might wish to proceed under the Declaratory Judgment Act (Ill.Rev.Stat.1991, ch. 110, par. 2-701) and granted leave to file a motion and supporting memorandum on this issue. On December 20, 1991, plaintiffs filed their Motion and Memorandum. Instead of limiting their motion to the issue discussed on December 9, 1991, however, plaintiffs sought to raise three issues: (1) whether section 18(a)(17) of the Condominium Property Act (Ill.Rev.Stat.1991, ch. 30, par....