Daniels v. Corrigan
| Decision Date | 31 March 2008 |
| Docket Number | No. 1-06-1256.,1-06-1256. |
| Parties | Erik T. DANIELS, Plaintiff-Appellant, v. Patton CORRIGAN; Yellow Cab Management, Inc., d/b/a Yellow Cab Company; Shahzad Mahlik; Yellow Cab Company; Yellow Cab Affiliation, Inc.; YellowOne, LLC; YellowTwo, LLC; CRA Cab Company, d/b/a Metro Yellow; Yellow Capital Corporation; Yellow Cab Services of America; Yellow Holdings Inc.; Transit Capital, LLC; Transit Funding Group; and Lower Cross Corporation, Defendants-Appellees (American Country Insurance Company; Stamford Capital Group; the Dorothy Corrigan Trust; Muhammed Atif; and Nana Dada, Inc., Defendants). |
| Court | United States Appellate Court of Illinois |
Plaintiff, Erik T. Daniels, was injured when the car he was driving was struck by a Yellow Cab driven by Shahzad Malik and owned by Nana Dada, Inc. Plaintiff filed a negligence suit against Malik, Nana Dada, and its owner, Muhammed Atif. He also filed suit against, inter alia, Patton Corrigan, Yellow Cab Affiliation, YellowOne, YellowTwo, CRA Cab, f/k/a Yellow Cab Company, Transit Capital, and Transit Funding Group. These defendants filed a motion for summary judgment, which the trial court granted, finding that defendants did not control Nana Dada or the operation of the cab at the time of the accident.
On July 7, 2001, plaintiff was injured in an accident with a taxicab owned by Nana Dada and driven by Malik, who leased the cab from Nana Dada. Nana Dada carried $350,000 of liability coverage, the minimum required by the City of Chicago. Plaintiff filed a complaint alleging negligence under theories of joint venture, vicarious liability, and alter ego. According to the complaint, the City of Chicago amended the Chicago Municipal Code to limit the number of taxicab licenses, or medallions, that a single entity could own to 25% of the outstanding medallions. The complaint further alleged that even though Yellow Cab Company was required to divest itself of a number of medallions as a result of this amendment, it formed a network of corporations that allowed it to maintain control over the medallions it sold, including medallion number 1222, which Nana Dada later purchased.
Defendants filed a motion for summary judgment; the evidence the parties submitted in support of their respective positions established the following.
In 1997, Yellow Cab Company sold its medallions to YellowOne and YellowTwo. It sold the name, colors, and dispatch rights to Yellow Cab Management. In 1999, Yellow Cab Company changed its name to CRA Cab Company. CRA owns a number of vehicles that are leased to Yellow Cab Management and to which a medallion owned by YellowOne or YellowTwo would be affixed.
A City of Chicago ordinance requires all medallion holders to be affiliated with an affiliation licensed by the City. Chicago Municipal Code § 9-112-080(b)(7) (amended November 15, 2000). Yellow Cab Affiliation is one of 21 such affiliations. YellowOne and YellowTwo entered into a loan servicing agreement with Yellow Cab Affiliation wherein Yellow Cab Affiliation agreed to collect loan payments owed to YellowTwo or the assignee of the note, which Yellow Affiliation would remit to the lender.
Yellow Cab Management, which was incorporated on December 8, 1997, provided a number of services to Yellow Cab Affiliation, including radio dispatching, cash-collecting services, handling of accounts, preparation of financial documents, and the use of the name and colors. Yellow Cab Management also managed a fleet of cabs with medallions owned by YellowOne or YellowTwo that were affixed to cabs owned or leased by Yellow Cab Management.
On April 6, 2001, YellowTwo entered into a transfer agreement and "Medallion Only Purchase Agreement" with Nana Dada. Atif was the president and sole shareholder of Nana Dada. Nana Dada agreed to pay YellowTwo $64,000 for medallion number 1222. Yellow Cab Management sold Nana Dada the cab to which the medallion was attached for $500.
YellowTwo financed Nana Dada's purchase of the medallion and subsequently assigned the note to Transit Funding, while Transit Capital financed $2,313 of ancillary costs. Nana Dada was not required to finance the medallion purchase through YellowTwo but, rather, could have used a third party that provides medallion financing, such as Ravenswood Bank, Elk Funding, Banco Popular, or Medallion Funding.
YellowTwo and Transit Capital received a security interest in both the vehicle and the medallion in return for providing Nana Dada with financing. YellowTwo also held a security interest in Nana Dada's shares of stock. Atif, on behalf of Nana Dada, executed a power of attorney for Transit Capital and YellowTwo. It permits YellowTwo to enforce its rights under the security agreement and pledge agreement if Nana Dada defaults on its payment obligations to YellowTwo. Paragraph 12 of the security agreement provides that the power of attorney that Nana Dada signed is only effective upon default. In addition, paragraphs 5 and 6 of the pledge agreement provide that YellowTwo only has the right to use the stock power option upon a default by Nana Dada.
The purchase agreement required Nana Dada to become a member of the Yellow Cab Affiliation for a minimum of three years. Accordingly, Nana Dada entered into a taxicab affiliation agreement with Yellow Cab Affiliation. By joining the Yellow Cab Affiliation, Nana Dada could use Yellow Cab Affiliation's colors and dispatching services and receive other benefits. In return, Nana Dad paid a fixed weekly fee. Yellow Cab Affiliation also became the registered agent for Nana Dada. We discuss the terms of the affiliation agreement in more detail below. Nana Dada also purchased insurance in its name from American Country Insurance Company in the amount required by the Chicago ordinance.
After Nana Dada purchased the cab and medallion, Atif began driving the cab. He also leased the cab to Malik for a weekly rental fee set by Atif. Malik was driving the cab when the accident occurred.
Nana Dada, Atif, and Malik were not employed by the Yellow Cab Affiliation. It did not pay any salary to Nana Dada, Atif, or Malik, did not withhold taxes on their behalf, and had no authority to determine the hours that the cab was operated, where it was operated, and which customers were to be picked up. Neither Yellow Cab Affiliation nor the other corporate defendants had the right to share in any profits made through use of the medallion or the cab. The only money paid to Yellow Cab Affiliation by Nana Dada was the weekly affiliation payment in return for the services provided by Yellow Cab Affiliation, which Nana Dada was required to make even if the cab was not used that week. The weekly payments to Yellow Cab Affiliation included affiliation dues, insurance premiums, and loan repayment. This payment was fixed and was not contingent on the profits earned by Nana Dada.
As president of Nana Dada, Atif was responsible for storage, maintenance, and repairs, and he alone controlled where he wished to repair and maintain the car. Atif had the cab repaired at Medina Auto, which has no relationship with Yellow Cab Affiliation. He or Malik paid for the gas used during cab operations. Atif's cab was not required to pick up fares identified through the Yellow Cab Affiliation's Gandalf dispatch system.
The trial court granted defendants' motion for summary judgment and denied plaintiff's motion for reconsideration. Plaintiff filed a second motion for reconsideration, which argued for the first time that section 9-112-390 of the Chicago Municipal Code established an agency relationship between Malik and Yellow Cab Affiliation as a matter of law. Chicago Municipal Code § 9-112-390 (amended November 15, 2000). The trial court entertained the motion but denied it.1 This appeal followed.
Summary judgment is appropriate when the pleadings, depositions, and other evidence reveal that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005 (West 2004). "Although a plaintiff is not required to prove his case at the summary judgment stage, in order to survive a motion for summary judgment, the nonmoving party must present a factual basis that would arguably entitle [him] to a judgment." Robidoux v. Oliphant, 201 Ill.2d 324, 335, 266 Ill.Dec. 915, 775 N.E.2d 987 (2002). Summary judgment is a drastic means of resolving litigation and should only be allowed when the right of the moving party is clear and free from doubt. Bier v. Leanna Lakeside Property Ass'n, 305 Ill.App.3d 45, 50, 238 Ill.Dec. 386, 711 N.E.2d 773 (1999). An appellate court's review of a grant of summary judgment is de novo. Woods v. Pence, 303 Ill.App.3d 573, 576, 236 Ill.Dec. 977, 708 N.E.2d 563 (1999).
Plaintiff contends that section 9-112-390 of the Chicago Municipal Code made Nana Dada the agent of the Yellow Cab Affiliation "as a matter of law." Although plaintiff raised this argument for the first time in his second motion for reconsideration, the trial court entertained the argument and denied the motion. Therefore, while plaintiff asserts in his brief that "[t]his is an appeal from an order granting summary judgment," we find that he is appealing the denial of his second motion to reconsider.
The purpose of a motion to reconsider is to bring to the trial court's attention (1) newly discovered evidence not available at the time of the hearing, (2) changes in...
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