Technology Innovation Center, Inc. v. AMT

• Decision Date: 30 June 2000
• Docket Number: No. 1-99-0364.,1-99-0364.
• Citation: 732 N.E.2d 1129,247 Ill.Dec. 797,315 Ill. App.3d 238
• Parties: TECHNOLOGY INNOVATION CENTER, INC., an Illinois Corporation d/b/a Evanston Business and Technology Center, Plaintiff-Appellee (James T. Murray, individually, Respondent-Appellee), v. ADVANCED MULTIUSER TECHNOLOGIES CORPORATION, an Illinois Corporation; Carole J. Pickelsimer, individually; and Douglas R. Cannon, individually, Defendants-Appellants.
• Court: United States Appellate Court of Illinois

732 N.E.2d 1129

315 Ill. App.3d 238

247 Ill.Dec. 797

TECHNOLOGY INNOVATION CENTER, INC., an Illinois Corporation d/b/a Evanston Business and Technology Center, Plaintiff-Appellee (James T. Murray, individually, Respondent-Appellee), v. ADVANCED MULTIUSER TECHNOLOGIES CORPORATION, an Illinois Corporation; Carole J. Pickelsimer, individually; and Douglas R. Cannon, individually, Defendants-Appellants.

No. 1-99-0364.

Appellate Court of Illinois, First District, Third Division.

June 30, 2000.

Douglas R. Cannon, Skokie, for appellants.

Elliot R. Schiff, Schiff, Gorman & Krkljes, Chicago, for respondent-appellee.

Brand & Novak, Ltd., Chicago, for plaintiff-appellee.

Justice WOLFSON delivered the opinion of the court:

This started out as a forcible entry and detainer case. It turned into a rancorous Supreme Court Rule 137 sanctions proceeding that took on a life of its own. All in all, it has bounced around in our judicial system for more than seven years. Hopefully, with this opinion, we now put an end to it.

Advanced Multiuser Technologies (AMT), Carole Pickelsimer (Pickelsimer), and Douglas Cannon (Cannon) (collectively referred to as "defendants") appeal from the trial court's denial of their petition for sanctions brought pursuant to Supreme Court Rule 137 and their petition for costs brought pursuant to statute (735 ILCS 5/9-114 (West 1992)), in relation to a 1993 forcible entry and detainer action.

Defendants contend: (1) the trial court's denial of sanctions should be reversed under a de novo standard of review, (2) the trial court improperly failed to consider defendants' statutory claim for costs, (3) the trial court improperly refused to consider defendants' motion for contempt, and (4) the trial court failed to consider the entire record before making its ruling. We affirm, with a modification.

Facts

In February 1991, AMT entered into an oral lease to rent office space from Technology Innovation Center, Inc. (TIC). In March 1993, TIC, through its attorney, James T. Murray (Murray), demanded past due rent from AMT and notified AMT that its lease would be terminated, pursuant to section 9-208 of the Code of Civil Procedure (735 ILCS 5/9-208 (West 1992)), if rents owed were not paid within a 5-day period. Thereafter, on April 29, 1993, TIC filed a complaint against "Carol J. Pickelsimer and Douglas R. Cannon d/b/a Advance Multiuser Technologies," seeking possession of the premises described as office space # 104, 1840 Oak Avenue, Evanston, Illinois. TIC also sought recovery of $11,534.43 in unpaid rent and expenses. The complaint noted Pickelsimer and Cannon had previously signed personal guarantees which made them responsible for "the full and timely payment of all rent and other amounts of any kind whatsoever that may now be due and payable or that may at any time or from time to time hereafter become due and payable ..."

Cannon, the Vice President and registered agent of AMT, filed a special and limited appearance to present a motion to dismiss. Cannon did not dispute that money was owed to TIC, but contended:

"The rent claimed by plaintiff on its 5-day notice includes charges for telephone service, shared secretarial service, xerox copying, facsimile machine services, certain parking fees, interest, late charges and other miscellaneous fees which are not rent but are added to plaintiff's claimed total."

Cannon admitted he and Pickelsimer signed guarantees, but claimed they were made in reference to "an oral year-to-year lease" so that the 5-day notice was defective. Cannon also claimed he and Pickelsimer were not proper parties to a forcible entry and detainer action because AMT is a registered corporation.

On July 14, 1993, TIC served a new 5-day notice on AMT. TIC then amended its complaint on July 20, 1993, adding AMT as a party defendant. In this complaint TIC alleged in count I that AMT was unlawfully withholding possession of office space # 104 at 1840 Oak Avenue, Evanston, Illinois, after a demand was made for "$13,188.84 representing rents over six months in default." In count II, TIC added a claim against Pickelsimer and Cannon for rent and services based on their personal guarantees.

After a hearing, count II against Pickelsimer and Cannon was dismissed without prejudice on October 18, 1993. The claim against AMT was set for trial.

On January 14, 1994, TIC filed a Second Amended Complaint. In this complaint, TIC re-pled count I from the previous complaint. A new count II was pled in the alternative. In count II, TIC alleged 30 days had elapsed since "defendant was given notice of the termination of its tenancy of the aforesaid space pursuant to the statute thereto pertaining in the Illinois Compiled Statutes, Section 835, 9-207 (sic), on or about December 1, 1993." In count III, TIC brought an action for rents and charges against AMT.

Cannon, acting as legal counsel for AMT, moved to dismiss the second amended complaint. With regard to count II, Cannon alleged the 30-day notice was defective because he, as registered agent for AMT, had not received the notice of termination until December 3, 1993. He further alleged the letter of termination dated December 1, 1993, was deposited in AMT's mailbox without a postmark.

TIC responded to this motion. One argument advanced by TIC was that no notice to quit was required to bestow jurisdiction because AMT was a tenant at sufferance (see 735 ILCS 5/9-213 (West 1992)) and because AMT was more than 18 months in arrears (see 735 ILCS 5/9-204 (West 1992)). Several exhibits were attached to the response, including letters to AMT, dated as far back as November 1992, notifying AMT of its failure to meet its obligation to pay rent and expenses. Exhibit E to the response consisted of a copy of the letter of termination of tenancy dated December 1, 1993, and a certification, signed by James S. Currie, TIC's managing director, stating that Currie had deposited the termination letter in AMT's corporate pigeonhole mailbox on December 2, 1993.

The second amended complaint was dismissed on March 21, 1994, for lack of jurisdiction¹.

On April 20, 1994, defendants filed a petition for sanctions against TIC and Murray pursuant to Supreme Court Rule 137. Defendants also sought costs as provided by statute. (See 735 ILCS 5/9-114 (West 1992)). A supplemental petition for sanctions was filed on July 18, 1994, listing additional costs and fees.

On May 11, 1995, the trial court dismissed defendants' petitions for sanctions. Defendants appealed and we disposed of the appeal (see Technology Innovation Center, Inc. v. Advanced Multiuser Technologies, 281 Ill.App.3d 1136, 233 Ill.Dec. 773, 701 N.E.2d 838), by summary order issued pursuant to Supreme Court Rule 23(c)(2). Without suggesting any particular outcome, we remanded the case to the trial court for reconsideration because we were unable to ascertain from the record whether the trial court had given serious consideration to the issues raised in the Rule 137 petition.

After remand, defendants filed a Second Supplemental Petition for Sanctions in the trial court on January 14, 1997. Defendants asked the court to fine TIC and Murray $1,842,000 for alleged misconduct. This amount was in addition to the alleged $67,808.09 in costs and expenses defendants sought in their sanctions petition.

On February 6, 1997, TIC and Murray moved to strike and dismiss defendant's petition for sanctions and all supplements to the petition. On February 25, 1997, the trial court denied the motions to dismiss and reopened discovery. After taking depositions and obtaining answers to interrogatories, defendants sought leave on August 27, 1997, to file a First Amended Petition for Sanctions. In this amended petition defendants added a new claim of misconduct against TIC and Murray. Defendants also sought to supplement the First Amended Petition with additional "time, fee, and cost calculations."

Concurrent with their motion to amend the petition for sanctions, defendants filed two related motions: (1) a September 5, 1997, Motion for Hearing to Determine the Appropriate Action for Contempt Against Respondents and Other Parties, directed against TIC and Murray and based on their alleged failure to produce certain documents in discovery; and (2) an October 22, 1997, Motion for a Finding of Direct Criminal Contempt, directed against the attorneys then representing TIC and Murray, based on their alleged misrepresentations of fact. Both of these motions were denied on February 24, 1998. Also on this date, the trial court denied defendants' request for leave to file the first amendment to their sanctions petition.

On March 26, 1998, defendants moved to file a Revised First Amendment to Petition for Sanctions. Murray and TIC moved to strike this motion on April 23, 1998, and April 27, 1998, respectively.

On June 17, 1998, the trial court held a hearing. The court dismissed with prejudice defendants' Revised Amendment and all other petitions for sanctions. The trial court then granted Cannon leave to make an oral motion to reconsider and set the matter for hearing on July 28, 1998.

On July 22, 1998, the court issued an order stating: "All such matters to be heard and motions pertaining thereto are continued to and shall be heard on September 3, 1998."

On September 3, 1998, defendants filed a written Motion to Clarify And/Or Reinstate attached to 147 pages of exhibits. Exhibit E (116 pages) contained five offers of proof. On the same date, the court accepted these submissions to be taken under advisement and continued the matter.

On November 18, 1998, the trial court heard oral argument on defendants' offers of proof. In addition, the court allowed defendants to file, on December 2, 1998, additional written offers of proof and an Abstract of Evidence.

At a hearing on December 18, 1998, the trial court again dismissed defendants' Revised First Amendment and all other sanction petitions with prejudice. Defendants filed a Notice of...