Goldberg v. Astor Plaza Condo. Ass'n

• Decision Date: 04 May 2012
• Docket Number: No. 1–11–0620.,1–11–0620.
• Citation: 361 Ill.Dec. 346,971 N.E.2d 1,2012 IL App (1st) 110620
• Parties: Margaret GOLDBERG, Plaintiff–Appellant, v. ASTOR PLAZA CONDOMINIUM ASSOCIATION, Daniel G. Mohen, Travis W. Cochran, Geeta Krishnamurthi, and William S. Loder, Defendants–Appellees.
• Court: United States Appellate Court of Illinois

2012 IL App (1st) 110620

971 N.E.2d 1

361 Ill.Dec. 346

Margaret GOLDBERG, Plaintiff–Appellant,

v.ASTOR PLAZA CONDOMINIUM ASSOCIATION, Daniel G. Mohen, Travis W. Cochran, Geeta Krishnamurthi, and William S. Loder, Defendants–Appellees.

No. 1–11–0620.

Appellate Court of Illinois, First District, Sixth Division.

March 23, 2012.

As Modified upon denial of rehearing May 4, 2012.

Ted A. Donner, Donner & Company Law Offices LLC, Wheaton, for Appellant.

Arthur W. Aufmann, Jacob L. V. Armstrong, The Law Offices of Edward T. Joyce & Assoc., P.C., Chicago, for Appellees.

OPINION

Presiding Justice R. GORDON delivered the judgment of the court, with opinion.

[361 Ill.Dec. 350]¶ 1 This appeal arises from a dispute between plaintiff Margaret Goldberg (Margaret) and defendants Astor Plaza Condominium Association (Association) and its board of directors in their individual capacities: Daniel Mohen, Travis Cochran, Geeta Krishnamurthi, and William Loder (collectively, the board).

¶ 2 BACKGROUND

¶ 3 I. Events Prior to Lawsuit

¶ 4 We begin by relating the background of the parties, which is set out in each party's brief and is uncontradicted by the other party. In her brief, Margaret states the following. Astor Plaza is an eight-unit condominium building located in Chicago. Margaret owns one of the units, and four of the others are owned by defendants Mohen, Cochran, Krishnamurthi, and Loder; the remaining three units are owned by Paula Krasny, Mark Karno, and David Drew. Margaret first moved into the building in 1983.

¶ 5 In 2005, Margaret expressed a number of concerns about the operation of the Association. As she testified at trial, she was concerned about a lack of communication among the unit owners and about problems with the internal and external structure of the units that needed to be addressed, including problems with windows and balconies, a lack of maintenance in the common areas, and the absence of reserves for the Association. Margaret was also concerned because board meetings were occurring but she was not provided notice or minutes of the meetings. The unit owners met to discuss Margaret's concerns and afterward, the manager came to inspect her windows.

¶ 6 In March 2006, a meeting was scheduled to elect a new board of directors, and the new board consisted of the individuals named as defendants in the instant case. The board had a few informal gatherings shortly after the election but did not hold another meeting until September 2006, when a meeting was scheduled to discuss proposed improvements. The project was expected to cost approximately $450,000. Since the Association did not have sufficient funds in its reserves, the material distributed to the unit owners proposed that the Association seek a bank loan to fund the project which would be guaranteed by the unit owners. The other unit owners approved the financing, but Margaret was concerned that she could end up responsible for other unit owners' shares of the cost, so she filed a complaint on November 14, 2006.

¶ 7 In its brief, the Association adds the following facts. At the beginning of 2005, the board consisted of three unit owners but during 2005, the three board members resigned from the board or moved, leaving a period with no board management until the March 2006 election of the new board. Prior to the disintegration of the old board, Margaret had expressed a number of concerns before the board, and she renewed her grievances after the election of the new board.

¶ 8 One of the grievances raised by Margaret involved the replacement of her bay window, which she asked the Association to pay for. In response, the new board considered adopting a policy in which the Association would pay for bay windows while the unit owners would remain responsible for all other windows. However, prior to making a final decision, the board consulted with its attorneys, Keough & Moody, P.C. (K & M). In September 2006, K & M informed the board that article XIV, section 2( l ), of the Association's declaration required all unit owners to maintain, repair, and replace all of the windows in their units. Consequently, the board informed Margaret that she would have to pay for the replacement of her bay window.

¶ 9 Margaret did not accept the board's decision and also objected to the board's renovation project. Margaret's attorney argued that article V, section 2, of the declaration prohibited the board from financing the renovation with an Association loan. In response, K & M opined that article V, section 2, applied only to unit owner loans and not to Association loans.

¶ 10 In order to respond to Margaret's complaints, the board authorized K & M to share its legal opinions with Margaret's attorney and K & M sent Margaret's attorney a letter on October 10, 2006, in which it explained its understanding that the Association had the authority to borrow money and that Margaret was responsible for maintaining, repairing, and replacing her own windows pursuant to the declaration. Margaret continued to object, and K & M sent another letter to Margaret's counsel on November 1, 2006, again stating the board's position. On November 6, 2006, a motion to increase the monthly assessments for the building renovation project was passed by a vote of all of the Association membership 7 to 1, with Margaret providing the only vote against the project. On November 14, 2006, Margaret filed her initial complaint.

¶ 11 II. Complaint

¶ 12 Margaret's complaint was amended several times during the pendency of the instant action, with the final complaint being the third amended complaint, filed on June 6, 2008. That complaint, including an amendment adding three additional counts that was filed on April 20, 2009, contained a total of 14 counts. The complaint included a “prefatory” section stating that counts I, II, IV, and VI of the complaint had been dismissed either due to mootness or pursuant to section 2–615 of the Code of Civil Procedure (Code) (735 ILCS 5/2–615 (West 2008)) but that Margaret was including them “solely for purposes of preserving her objections for appeal.” The prefatory section also noted that Margaret had named Karno, Krasny, and Drew as defendants solely for purposes of count XI.

¶ 13 The counts at issue in the case at bar are counts VII, VIII, X, and XIII, so we relate only the allegations relevant to those counts.

¶ 14 Count VII was against the Association and concerned failure to maintain common elements. The complaint alleges that Margaret “has a balcony which is substantially rusted, a deteriorating window frame in the front bay window, and side window frames which are badly deteriorated in [Margaret's] apartment.” The complaint further alleges that “[n]otwithstanding a long history of discussion with regard to these elements, however, and assurances from both the current and prior boards, [the Association] has sought to avoid any responsibility for [Margaret's] balcony and window frames by summarily excluding them from the building's historical and published definition of what constitutes a common element.”

¶ 15 According to the complaint, the Association based its determination on article XIV, section 2, of the declaration, which provided that the duties of the board included paying for

“tuckpointing, maintenance, decorating, repair, and replacement of the Common Elements (but not including the windows and glass doors appurtenant to the Unit, if any, * * * which the Unit owners shall * * * maintain and repair, except if necessitated by repairs to the Common Elements).”

The complaint alleges that the declaration did not exclude the Association's responsibility to maintain the window frames, as opposed to the windows themselves, and that the problem arose from structural defects in the building itself and not from the windows.

¶ 16 The complaint further alleges that the board has paid for correcting such problems in the past when they occurred in the units of board members and that the Association had assessed all of the unit owners previously in order to pay for repairs to balconies. Furthermore, the complaint alleges that board member Loder, purportedly on behalf of the board, had repeatedly promised Margaret that the window frame would be repaired.

¶ 17 Count VIII of the complaint is against the Association for relief pursuant to section 112.50 of the General Not For Profit Corporation Act of 1986 (Not For Profit Act) (805 ILCS 105/112.50 (West 2008)). The complaint alleges that based on all of the conduct set forth in the complaint, “the defendants have acted in a manner that is oppressive with regard to [Margaret's] interest in the building, in dereliction of the obligations imposed upon them by the governing documents, in bad faith and in an arbitrary, overbearing and heavy-handed manner, and in a manner likely to result in unnecessary waste, gross over-reaching, and expense that will need to be wrongfully borne by [Margaret].” Specifically, Margaret pointed to (1) the segregation of classes of unit ownership based on whether the unit owner was a board member, (2) the refusal of the board to complete the work required on Margaret's windows and balcony, and (3) the board's invalid and unenforceable procurement of financing for the renovation project. Accordingly, Margaret sought the appointment of a receiver to manage the business and affairs of the Association.

¶ 18 Count X was against the Association and sought relief under section 19 of the Condominium Property Act (Condominium Act) (765 ILCS 605/19 (West 2008)) for failure to keep, maintain, and produce minutes of meetings. The complaint alleges that the board has never produced minutes of meetings held in 2005 and that the board has met a number of times without notice to the unit owners and without producing minutes of those meetings.

¶ 19 Count XIII was directed at the individual defendants and sought relief pursuant to section 103.20 of the Not For Profit Act (805 ILCS 105/103.20 (West 2008))....