Palm v. 2800 Lake Shore Drive Condo. Ass'n, an Ill. Not-For-Profit Corp.

• Decision Date: 02 May 2014
• Docket Number: No. 1–11–1290.,1–11–1290.
• Citation: 2014 IL App (1st) 111290,10 N.E.3d 307,381 Ill.Dec. 222
• Parties: Gary PALM, Plaintiff–Appellee, v. 2800 LAKE SHORE DRIVE CONDOMINIUM ASSOCIATION, an Illinois Not–for–Profit Corporation; Board of Directors of the 2800 Lake Shore Drive Condominium Association; and Kay Grossman, Individually and as President of the Board, Defendants–Appellants.
• Court: United States Appellate Court of Illinois

2014 IL App (1st) 111290

10 N.E.3d 307

381 Ill.Dec. 222

Gary PALM, Plaintiff–Appellee,

v.2800 LAKE SHORE DRIVE CONDOMINIUM ASSOCIATION, an Illinois Not–for–Profit Corporation; Board of Directors of the 2800 Lake Shore Drive Condominium Association; and Kay Grossman, Individually and as President of the Board, Defendants–Appellants.

No. 1–11–1290.

Appellate Court of Illinois, First District, Fifth Division.

May 2, 2014.

Orum & Roth, LLC, of Chicago (Mark D. Roth, of counsel), for appellants.

Gary Palm, of Chicago, appellee pro se.

OPINION

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

¶ 1 Plaintiff Gary Palm filed an action against defendants the 2800 Lake Shore Drive Condominium Association (the association), the board of directors of the association (the board) and Kay Grossman (Grossman), individually and as board president (collectively, defendants) seeking declaratory and injunctive relief for assorted violations of the association's declaration and bylaws, the Illinois Condominium Property Act (the Condominium Property Act) (765 ILCS 605/1 et seq. (West 2004)) and the General Not for Profit Corporation Act of 1986 (the Not for Profit Act) (805 ILCS 105/101.01 et seq. (West 2004)). The court granted partial summary judgment to Palm on several issues and issued declaratory and injunctive orders. After a hearing, it found for Palm on various remaining issues and again entered declaratory and injunctive relief. Defendants raise 12 issues on appeal. We affirm.

¶ 2 BACKGROUND

¶ 3 Palm owns a condominium unit in the 2800 Lake Shore Drive condominium building in Chicago and has for many years.¹ He served on the board of directors of the condominium association from 1992 to 1998. The association is a not-for-profit corporation formed pursuant to the Not for Profit Act ( 805 ILCS 105/101.01 et seq. (West 2004)). It is governed by the Condominium Property Act ( 765 ILCS 605/1 et seq.) (West 2004). The governing document for the association is the “Declaration of Condominium Ownership and of Easements, Restrictions, Covenants and By–Laws of 2800 Lake Shore Drive Condominium Association” (the declaration).

¶ 4 In 1999, Palm requested that the board produce documents related to the building's management. In 2000, when the board refused to produce the documents, Palm filed a complaint against defendants in the circuit court of Cook County seeking to examine and copy the documents. The court dismissed the complaint without prejudice.

¶ 5 Palm then filed a four-count first amended complaint. In count I, he asserted that the board violated section 18(a)(9) of the Condominium Property Act (765 ILCS 605/18(a)(9) (West 2000)) by having discussions of condominium business and taking action on matters at meetings closed to unit owners, making decisions by mail vote, and failing to vote in open meetings on issues discussed and actions taken in executive sessions. He cited no specific instances demonstrating the board's alleged violations. Palm requested a declaration that the board cannot take any action without a vote at a board meeting open to attendance by unit owners and that all discussion of association business, except for the three matters specifically excepted in section 18(a)(9), must be conducted by the board at open meetings.

¶ 6 In count II, again without factual support, Palm asserted the association violated the Condominium Property Act when the board president exceeded her authority, failed to call sufficient meetings of the board to conduct all necessary business and exceeded “her powers” at open board meetings and dominated the discussion. He requested a declaration that Grossman exceeded her authority by taking actions without board approval and improperly imposed her views on the board at meetings.

¶ 7 In count III, without factual support, Palm asserted that the board president and association counsel improperly limited board member's access to all documents and records of the association and these limitations interfered with the board members' performance of their fiduciary duties to the association and its members. He requested a declaration that board members are entitled to access all records and documents of the association upon request within a reasonable period of time without the need to state a purpose or pay costs or fees associated with such requests.

¶ 8 In count IV, Palm asserted that the board had improperly denied his repeated requests to examine and copy assorted association documents and records in violation of statute, ordinance and association declaration and bylaws. He requested that the court order the association to allow him to inspect and copy the requested documents.

¶ 9 Defendants moved to dismiss. They argued that count I should be dismissed as it failed to state a claim on which relief could be granted. Defendants pointed out that Palm failed to plead actual facts regarding any matters on which the board had allegedly voted by mail or to identify any issues that the board had allegedly improperly discussed and acted on in executive sessions rather than open meetings. They asserted that Palm had not presented an actual controversy for the court's review but rather was requesting an order restating the law set forth in section 18(a)(9) of the Condominium Property Act. Defendants argued similarly with regard to count II, asserting that Palm failed to state a claim for which legal relief could be granted because he failed to set forth Grossman's alleged violations with specificity and failed to allege any law applicable to his vague allegations.

¶ 10 Defendants argued that count III should be dismissed as (a) Palm's request for a declaratory finding and injunction awarding him unfettered access to association documents and records was contrary to the Condominium Property Act and the Chicago condominium ordinance, (b) Palm failed to plead actual facts in count III, and (c), since he was asking for an opinion of the rights of board members and he was no longer a board member, his request for a declaratory judgment was moot and he was merely requesting an advisory opinion. Defendants asserted count IV should be dismissed because Palm sought relief almost identical to that raised in his previously dismissed complaint and because the relief Palm requested was contrary to the Condominium Property Act.

¶ 11 Both parties filed additional memoranda and, at the court's request, supplemental briefs related only to count IV, addressing the question of whether the board is required to produce association documents under the City of Chicago condominium ordinance. On December 11, 2000, the court issued an opinion and order stating that, after considering the parties' memoranda, exhibits, case material and oral argument, it concluded that Palm was “required to assert a proper purpose [as a board member requesting documents] and has failed to do so, and that all four counts of the First Amended Complaint should be dismissed.”

¶ 12 The court's opinion specifically addressed its dismissal of count IV in detail, finding that the Not for Profit Act required that association members must state a proper purpose in order to be allowed to inspect association records, this requirement preempted the City of Chicago ordinance or the declaration which might provide otherwise. It held that Palm failed “to allege any facts that would support that a proper purpose has been stated.” The court then stated that Palm did not “support his claim with any factual evidence, but only conclusory language. Accordingly, all four counts are deficient and the defendant is entitled to dismissal.” The court dismissed the complaint and granted Palm leave to file a second amended complaint.

¶ 13 Palm filed a motion to reconsider. He challenged the court's findings regarding his count IV claim requesting production of documents. He also pointed out that the court had “apparently concluded that the Not for Profit Act's document production provision controlled all the other issues raised in Counts I–III, although these three issues were not discussed.” He stated that the issues raised in counts I, II and III were unrelated to access to documents and had been argued and briefed on other grounds. Palm argued that the court's decision should have explained its reasons for the dismissal of counts I, II and III because “otherwise [Palm] has no idea how to amend the complaint further or whether to appeal without amending his complaint again.” He asserted that rendering a decision without giving reasons violated his “due process rights to have his claim decided in a way that makes them susceptible for judicial review.”

¶ 14 On March 21, 2001, the court held a hearing on the motion to reconsider and defendants' response thereto. The transcript of the proceeding shows that the entirety of the argument was directed to count IV, addressing conflicts between the Chicago condominium ordinance, the Condominium Property Act and the Not for Profit Act, all of which have differing provisions relating to a board's duty to produce documents. The court issued a verbal decision. It granted the motion to reconsider and stated that, upon reconsideration, it again granted the motion to dismiss.

¶ 15 The court first addressed the dismissal of count IV in detail and dismissed the count without prejudice. The court next addressed counts I and II, stating only that the counts “ask for an advisory opinion” and dismissing them with prejudice. It lastly dismissed count III with prejudice, finding that the count “asks for a declaratory judgment, but declaratory judgment need not be granted where other relief [here under count IV] will resolve the problem.” The court gave Palm leave to amended count IV, noting that Palm could “of course” replead counts I, II and III in his second amended complaint for purposes of preserving the record. It declined to make an Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010) finding that...