Armagan v. Pesha

• Decision Date: 04 March 2014
• Docket Number: 1–12–2783.,Nos. 1–12–1840,s. 1–12–1840
• Citation: 2014 IL App (1st) 121840,7 N.E.3d 148,379 Ill.Dec. 722
• Parties: Osep ARMAGAN, M.D., Plaintiff–Appellee, v. Michael PESHA, Kathy Pesha, and Stephen Pesha, Individually and as Agents for Gold Dust Coins, Defendants–Appellants.
• Court: United States Appellate Court of Illinois

2014 IL App (1st) 121840

7 N.E.3d 148

379 Ill.Dec. 722

Osep ARMAGAN, M.D., Plaintiff–Appellee,

v.Michael PESHA, Kathy Pesha, and Stephen Pesha, Individually and as Agents for Gold Dust Coins, Defendants–Appellants.

Nos. 1–12–1840, 1–12–2783.

Appellate Court of Illinois,

First District, Second Division.

March 4, 2014.

Naughton Law Office, Tinley Park (Gino P. Naughton, of counsel), for appellants.

Kerkonian Law Firm PC, Evanston (Karnig S. Kerkonian, of counsel), for appellee.

OPINION

Justice PIERCE delivered the judgment of the court, with opinion.

¶ 1 Defendants bring this appeal arguing the circuit court erred in denying their motion to dismiss plaintiff's verified complaint; in granting plaintiff's motion to deem facts admitted; and in granting summary judgment on two counts in favor of plaintiff. For the following reasons, we affirm in part and reverse in part and remand to the circuit court for further proceedings consistent with this opinion.

¶ 2 BACKGROUND

¶ 3 Plaintiff's verified complaint alleged he tendered 253 gold coins to defendant Michael Pesha (Michael) and his business, defendant Gold Dust Coins, for safekeeping and when plaintiff later demanded the return of those coins, defendants refused. All three Pesha defendants are alleged to have an interest in Gold Dust Coins. Attached to plaintiff's verified complaint is Exhibit E, a purported receipt for the deposit of the gold coins. The verified complaint alleged eight causes of action sounding in conversion, breach of bailment, violation of the Illinois Bailment Insurance Act (765 ILCS 1015/0.01 et seq. (West 2008)), violation of section 7–204(a) of the Illinois Uniform Commercial Code (UCC) (810 ILCS 5/7–204(a) (West 2008)), common law fraud, consumer fraud, unjust enrichment and constructive trust.

¶ 4 Defendants filed a motion to strike and dismiss the verified complaint pursuant to section 2–615 of the Code of Civil Procedure (Code) (735 ILCS 5/2–615 (West 2010)). After hearing, the circuit court denied the motion to dismiss. Defendants then filed a verified answer wherein they denied all material facts alleged.

¶ 5 Plaintiff later served Michael with a request to admit facts on November 18, 2010. Michael filed his response to these requests with the circuit court clerk and mailed the response to plaintiff's counsel on December 17, 2010.

¶ 6 On December 30, 2010, plaintiff filed a motion to deem all requests admitted because the response was not served on the plaintiff within the 28 days as provided in Illinois Supreme Court Rule 216 (eff. May 30, 2008). Plaintiff argued Illinois Supreme Court Rule 12 (eff. Dec. 29, 2009), which governs proof of service, provides that service by mail is complete four days after mailing and, therefore, plaintiff's service of the request to admit on defendant was effective on November 22, 2010, making the response due 28 days later, or December 20, 2010. Because Michael's response was mailed on December 17, 2010, service to plaintiff's counsel was complete on December 21, 2010, one day past the deadline. Michael responded to the motion arguing that he timely served plaintiff with his response to the requests to admit by filing and mailing his response on December 17, 2010. Furthermore, Michael asserted that he was out of town prior to December 17, 2010 and was unable to affix his signature to the response prior to that date. On March 10, 2011, the circuit court granted plaintiff's motion and entered an order deeming all requested facts admitted for failing to comply with Rule 216.

¶ 7 Michael filed a motion to reconsider on April 8, 2011, arguing that if the court finds his service was untimely, the court has the discretion to allow the response to be filed late under Illinois Supreme Court Rule 183 for good cause shown. Plaintiff responded arguing that Michael's service of his response to the Rule 216 requests to admit were untimely and, furthermore, even if Michael's motion to reconsider is read as a Rule 183 request for an extension of time, the motion fails because he has not established good cause to invoke the circuit court's discretion to allow the late service. In his reply, Michael requested the court grant him an extension of time to serve his response nunc pro tunc and allow his response. Supporting the reply was Michael's sworn affidavit wherein he stated that he was out of state for a period of time prior to December 17 and was unable to sign the document before his return. On July 15, 2011 the court denied the motion to reconsider and found that Michael being out of town between December 13 and December 17, when he signed the requests, was not good cause to allow a late response of one day. The court noted that Michael did not explain why he did not sign the response before he left town on December 13.

¶ 8 Based on the judicial admissions, plaintiff moved for summary judgment on all counts. Plaintiff argued all relevant material facts had been deemed admitted and, therefore, it was undisputed that plaintiff left the coins with Michael to store and later sell upon plaintiff's request and those coins were not returned to plaintiff when demanded. Michael responded, arguing that he had “vigorously” disputed all facts alleged by plaintiff. Michael asserted that plaintiff did not leave the gold coins with him; that he did not place them in a safe; that he did not make a notation on the receipt that referenced the gold pieces; he denied having any of plaintiff's gold coins or money; and that he told plaintiff he could not keep the coins at the store unless plaintiff sold them to Michael. He further argued that “plaintiff's credibility is at issue in this matter” and asserted that the disparate level of education between Michael and the plaintiff should be taken into consideration. He disputed the authenticity of the receipt attached to the verified complaint and asserted that the court should not rely on the receipt to enter summary judgment. Furthermore, he argued that questions of fact existed which defeat plaintiff's motion for summary judgment. The response was supported by Michael's own affidavit wherein he disputed plaintiff's asserted facts and allegations.

¶ 9 After a hearing on November 8, 2011, the circuit court, based on the facts deemed admitted, entered a written order granting summary judgment in plaintiff's favor on the conversion and breach of bailment counts. For his remedy, plaintiff elected the imposition of a constructive trust. On September 5, 2012, the court entered a deficiency judgment against defendants in the amount of $459,995.20 and imposed a constructive trust on defendants' precious metal inventories and cash until satisfaction of the deficiency judgment. This appeal followed.

¶ 10 ANALYSIS

¶ 11 Defendants appeal the circuit court's ruling that deemed facts admitted; the denial of their section 2–615 motion to dismiss; and the entry of summary judgment in plaintiff's favor on counts I and II.

¶ 12 I. Motion to Deem Facts Admitted and Summary Judgment

¶ 13 Plaintiff requested that Michael admit the following facts pertinent to this appeal:

“(6) Exhibit E is a true copy of a Gold Dust Coin receipt dated on or about June 6, 2008.

* * *

(16) The gold purchased by Gold Dust Coin in the gold purchase transaction evidenced by Exhibits F and G was already in the possession of Gold Dust Coin at the time of the telephone call from Plaintiff on or about June 30, 2008.

* * *

(21) While Plaintiff was in the Store on June 6, 2008, Defendant Pesha told Plaintiff that Plaintiff could store his gold at the Gold Dust Coin.

(22) While Plaintiff was in the store on June 6, 2008, Defendant Pesha told Plaintiff that, when Plaintiff was ready to sell the gold Plaintiff left with Defendants, Plaintiff could call Defendant Pesha and direct him to sell the gold;

(23) While Plaintiff was in the Store on June 6, 2008, Defendant Pesha told Plaintiff that Plaintiff could always come in to the store to retrieve the gold he left with Defendants.

(24) Exhibit E indicated that Plaintiff left at the store 143 Kruggerands and 110 Maple Leaf gold coins;

(25) Plaintiff left 143 Kruggerands and 110 Maple Leaf gold coins with Defendant Pesha on or about June 6, 2008.

* * *

(27) Defendant Pesha told Plaintiff, in a telephone conversation between them on October 5, 2009 that, given the amount of the sale directed by Plaintiff in Exhibit H, Defendant Pesha preferred to handle the transaction in person.

(28) Plaintiff came to the Store, in person, on or about October 8, 2009, and demanded the return of the gold coins.

(29) To date, Defendants have not returned to Plaintiff the gold coins or paid Plaintiff for the value of the gold coins.”

¶ 14 Defendants' appeal involves the question of whether Michael's response was timely served where it was mailed to plaintiff within 28 days after his receipt of plaintiff's requests to admit. To answer this question, we must construe both Rule 216 and Rule 12. Vision Point of Sale, Inc. v. Haas, 226 Ill.2d 334, 341–42, 314 Ill.Dec. 778, 875 N.E.2d 1065 (2007). We construe supreme court rules in the same method as statutes and our review is de novo. Id. at 342, 314 Ill.Dec. 778, 875 N.E.2d 1065.

¶ 15 Illinois Supreme Court Rule 216(a) (eff. May 30, 2008) provides that “[a] party may serve on any other party a written request for the admission by the latter of the truth of any specified relevant fact set forth in the request.” Rule 216(c) also provides in pertinent part:

“Each of the matters of fact and the genuineness of each document of which admission is requested is admitted unless, within 28 days after service thereof, the party to whom the request is directed serves upon the party requesting the admission either (1) a sworn statement denying specifically the matters of which admission is requested or setting forth in detail the reasons why the party cannot truthfully admit or deny those matters or (2) written objections on the ground that some or all of the...