Reed Yates Farms, Inc. v. Yates

• Court: Appellate Court of Illinois
• Writing for the Court: KNECHT
• Citation: Reed Yates Farms, Inc. v. Yates, 172 Ill.App.3d 519, 526 N.E.2d 1115, 122 Ill.Dec. 576 (Ill. App. 1988)
• Decision Date: 14 July 1988
• Docket Number: No. 4-88-0002,4-88-0002
• Parties: , 122 Ill.Dec. 576 REED YATES FARMS, INC., Plaintiff, v. G. Robert YATES, Defendant and Counterplaintiff and Appellant and Third Party Plaintiff and Counter-Counter Defendant (Don YATES, et al., Counterdefendants and Counter-Counter Plaintiffs; Mabel Yates, Third Party Defendant and Counter-Plaintiff; Jack C. Vieley, Petitioner-Appellee).

Page 1115

526 N.E.2d 1115

172 Ill.App.3d 519, 122 Ill.Dec. 576

REED YATES FARMS, INC., Plaintiff, v. G. Robert YATES, Defendant and Counterplaintiff and Appellant and Third Party Plaintiff and Counter-Counter Defendant (Don YATES, et al., Counterdefendants and Counter-Counter Plaintiffs; Mabel Yates, Third Party Defendant and Counter-Plaintiff; Jack C. Vieley Petitioner-Appellee).

No. 4-88-0002.

Appellate Court of Illinois Fourth District.

July 14, 1988.

G. Robert Yates, M.D., Fort Lauderdale, Fla., pro se.

Jack C. Vieley, Peoria, pro se. Justice KNECHT delivered the opinion of the court:

Defendant G. Robert Yates (G. Robert) appeals an order which enforced a lien for attorney fees. The order was entered following protracted and hotly contested proceedings which resulted in a family-owned horse farm being placed in receivership for the purpose of liquidation.

The initial complaint in this cause was filed on June 19, 1983, by Reed Yates Farms, Inc. (Reed Yates), and named G. Robert as defendant. Among the relief sought in counts I through V was money damages for the boarding of G. Robert's horses and an injunction requiring G. Robert to endorse and return to the court for distribution a check payable jointly to him and Reed Yates, which represented proceeds from the sale of a horse jointly owned by those parties. Count VI was premised on an alleged joint venture agreement between Reed Yates and G. Robert under which the parties owned as tenants in common certain breeding stock and other horses. Reed Yates requested the court order an accounting of the affairs of the joint venture, order a partition thereof, and determine the equitable portion of the liquidation proceeds to be delivered to G. Robert and Reed Yates. In an additional count filed August 10, 1984, Reed Yates requested dissolution of the joint venture and liquidation of the joint venture assets.

In a counterclaim filed August 16, 1984, G. Robert asserted that since 1972, he and Don Yates (Don) engaged in a joint venture known as Reed Yates Farm Partnership (the partnership) for the purpose of boarding, breeding and selling race horses. The counterclaim further alleged, inter alia, Don misappropriated partnership assets and failed to provide G. Robert with adequate reports concerning partnership affairs. G. Robert stated he was informed and believed an independent audit of his, Don's, Mabel Yates', Reed Yates' and the partnership's assets would establish, inter alia, he is the owner of and entitled to all of the Reed Yates assets, and the other parties owe him substantial sums of money.

On the basis of the above allegations, G. Robert requested (1) the court appoint an independent auditor to audit the books and records of Don, Reed Yates, and the partnership and determine the balances due by the parties to each other; (2) Don be ordered to turn over to such auditor all books and records of himself, the partnership and Reed Yates; (3) upon completion of the audit, the court determine the interests of G. Robert and Don in the partnership and the balances or assets due to or from the partnership by any party; and (4) after the above determinations, the court dissolve the partnership and distribute its assets to G. Robert and Don on the basis of the results of the audit.

On October 2, 1985, G. Robert filed an amendment to his counterclaim, which added counts II through V. Count II repeated the allegations of Robert's initial counterclaim, and on the basis thereof requested money damages in excess of $15,000 for the counterdefendants' alleged unlawful and tortuous conversion of G. Robert's property. Count III alleged that in December 1977, Don and G. Robert entered into a joint venture by terms of which they agreed to purchase a horse named Rorty Hanover, which was to be used for stud purposes and was to be jointly titled in both of their names. G. Robert stated, however, Don took delivery of Rorty Hanover in his own name without authorization from G. Robert to do so, thereby converting G. Robert's property to his own use. On the basis of the above allegations, Robert requested money damages. Counts IV and V essentially requested punitive damages on the basis of the alleged wilful, wanton and fraudulent character of the acts alleged in the initial counterclaim and in count III, respectively.

G. Robert filed yet another counterclaim on October 2, 1985. The allegations of this counterclaim were, however, basically the same as those of G. Robert's previous counterclaims, except G. Robert also accused Mabel Yates (Mabel) of converting partnership assets to her own use and failing to make proper reports to G. Robert concerning partnership affairs.

A bench trial was held on January 8, 9, and 13, 1986.

In an order filed January 22, 1986, the circuit court found that on March 16, 1978, Don, Robert, and Mabel agreed to the issuance of stock in Reed Yates Farms, Inc., in the proportion of 49% to Don, 49% to Robert, and 2% to Mabel. The court found because he signed a document agreeing to distribution of the corporate stock in this manner, and signed a document in which he applied for insurance as a vice-president of Reed Yates, G. Robert is estopped from denying the corporate existence of Reed Yates. Moreover, the court found G. Robert's allegations of fraud and conversion were not substantiated by the evidence and were not proved. The court also found G. Robert was obligated to pay all board costs for animals owned in whole or in part by him and boarded at Reed Yates, except for board with respect to two animals which he owned and which Don refused to breed on or about March 8, 1983.

The court further found it appropriate and necessary to appoint a receiver to liquidate the Reed Yates assets. After paying all debts, the receiver was to distribute the assets of the corporation to Robert, Don, and Mabel in proportion to the amount of stock in the corporation which the court found they owned. The receiver was to deduct from Robert's distributions the amount of the accumulated board bill which he owed and was to deduct from Don's distributions an amount representing board for the two horses belonging to G. Robert which Don refused to breed. Also, the receiver was ordered to pay to G. Robert any unpaid director's fees and was given discretion to pay Don an appropriate amount for work which he did in connection with the sale at auction of horses belonging to Reed Yates at Lexington, Kentucky, in December 1985, in lieu of a $5,000 bonus which the corporate directors awarded him in December 1985. Finally, the court held although the receiver was to account for all receipts and disbursements from the date of his appointment and qualification, there was to be no accounting for the past acts of the parties, since G. Robert had already conducted a review of the corporate records through his agents.

G. Robert appealed the circuit court's order, alleging (1) improper denial of his requests for a jury trial; (2) Reed Yates Farm, Inc., is not a valid corporation, or, alternatively, payments to Don for his services as a corporate director and president were illegal because his affirmative vote was necessary to carry the motions authorizing those payments; (3) the circuit court's denial of G. Robert's requests for actual and punitive damages (apparently on the basis of G. Robert's counterclaims) was against the manifest weight of the evidence; and (4) the circuit court erred in not ordering an accounting. In a Rule 23 order filed September 8, 1986 (Reed Yates Farms, Inc. v. Yates (1986), 145 Ill.App.3d 1171, 110 Ill.Dec. 447, 511 N.E.2d 282 (order under Supreme Court Rule 23)), this court rejected all of G. Roberts' arguments and affirmed the circuit court's order in toto. This court held G. Robert waived his argument that the denial of his request for actual and punitive damages was contrary to the manifest weight of the evidence, by failing to include in his opening brief references to the portions of the record which allegedly supported this argument. The supreme court denied a petition for leave to appeal from this order on February 6, 1987. Reed Yates Farms, Inc. v. Yates (1987), 113 Ill.2d 584, 106 Ill.Dec. 55, 505 N.E.2d 361.

In the meantime, G. Robert on September 26, 1986, filed with the Attorney Registration and Disciplinary Commission (ARDC) a complaint against attorney Jack C. Vieley, who had represented G. Robert in this cause since November 15, 1985. Among the charges stated in the complaint were incompetent representation in this cause, refusal to allow G. Robert input into the appellant's brief in the previous appeal in this cause, failure to advise G. Robert of the filing of this court's opinion in the previous appeal; misinformation in an effort to dissuade G. Robert from appealing; and violation of the attorney-client privilege "in sending a copy of our contract to the opposing law firm." On March 19, 1987, the ARDC advised Vieley it had concluded its investigation into G. Robert's charges and determined to proceed no further in the matter.

On October 21, 1986, attorney Vieley filed a motion to withdraw as G. Robert's counsel, which the court allowed on November 19, 1986. Also on October 21, 1986, attorney Vieley filed a petition for adjudication of a lien for attorney fees with respect to services which he rendered on behalf of G. Robert in this cause. On February 20, 1987, attorney Vieley filed a second petition to adjudicate attorney's lien. Count I of this petition requested judgment against G. Robert in the amount of $44,607.20 and payment of this amount, plus 40% of all future payments due G. Robert as a result of the liquidation of Reed Yates, from money payable to G. Robert by the Reed Yates receiver. This claim was premised on a contract for legal services entered into by G. Robert and attorney Vieley on November 13, 1985, which provides in pertinent part:

"CONTRACT TO HIRE ATTORNEY JACK C. VIELEY

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