2021 IL App (1st) 201189-U

 SIXTH DIVISION

 July 23, 2021

No. 1-20-1189 

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the 

limited circumstances allowed under Rule 23(e)(1). 

 

IN THE

APPELLATE COURT OF ILLINOIS

FIRST JUDICIAL DISTRICT

THE CITY OF CHICAGO, a Municipal ) 

Corporation, ) Circuit Court of

 ) Cook County.

 Plaintiff-Appellant, ) 

 ) 

v. ) No. 17 M1 401501

 ) 

JEWELLERY TOWER, LLC; GLOBAL ) 

DISASTER RECOVERY, INC.; USA WATER ) 

AND FIRE RESTORATION, INC.; PD LENDER, ) 

LLC; ADAM DAVID PARTNERS 1, LLC; ) 

LAWRENCE A. BRADI; VALERIO DEWALT ) 

TRAIN ASSOCIATES, INC.; and UNKNOWN ) 

OWNERS AND NONRECORD CLAIMANTS, ) Honorable 

 ) Patrice Ball Reed,

Defendants, ) Judge Presiding.

 ) 

(MRR 55 Washington Owner LLC, ) 

Defendant-Appellant; Courtney Jones, ) 

Jones Receiverships, LLC, Court Appointed ) 

Receiver, Appellee). ) 

 

JUSTICE CONNORS delivered the judgment of the court.

Justices Harris and Oden Johnson concurred in the judgment. 

¶ 1 Held: The circuit court abused its discretion when it denied appellant’s motion to 

compel the receiver to immediately obtain insurance; reversed.

ORDER
No. 1-20-1189 

2 

¶ 2 Defendant, MRR 55 Washington Owner LLC (MRR), appeals from the circuit court’s 

interlocutory order that denied its motion to compel the court appointed receiver, Jones 

Receiverships, LLC, to immediately obtain insurance. On appeal, MRR contends that the court 

erred when it denied MRR’s motion to compel the receiver to immediately obtain insurance and 

concluded that the receiver, as a general receiver, did not stand in the owner Jewellery Tower’s 

shoes such that the receiver was not subject to Jewellery Tower’s insurance requirements set 

forth in the governing documents for the building at issue. 

¶ 3 Initially, we note that the receiver did not file a response brief in this appeal. In May 

2021, we entered an order that stated that we were taking the case on appellant’s brief only. The 

City of Chicago filed a letter with the clerk of the Appellate Court, First District, that stated that 

the City would not be filing a brief in this appeal. No other parties in this action have filed 

anything with this court in this appeal.

¶ 4 We also note that in case No. 1-20-1352, MRR appealed from the circuit court’s 

interlocutory order that denied its motion to remove Jones Receiverships, LLC, as receiver based 

on an undisclosed and improper conflict of interest. On July 16, 2021, we issued an opinion in 

City of Chicago v. Jewellery Tower, LLC, 2021 IL App (1st) 201352, that reversed the circuit 

court’s order that denied MRR’s motion to remove the receiver and ordered the court to appoint 

a new receiver. 

¶ 5 I. BACKGROUND

¶ 6 As previously stated, we issued an opinion in a related case, City of Chicago v. 

Jewellery Tower, LLC, 2021 IL App (1st) 201352. We will repeat the facts from that opinion that 

are necessary for an understanding of the background and issues in this appeal.
No. 1-20-1189 

3 

¶ 7 This action arises out of a complaint filed in 2017 by the City of Chicago (City) 

against the owners of a building located at 55 East Washington Street in Chicago (Pittsfield 

Building) for building code violations. The defendant-owners related to this appeal are MRR and 

Jewellery Tower. According to MRR’s brief on appeal, MRR owns floors 13-21, which are 

residential in nature, as well as portions of the lobby and certain elevators. Jewellery Tower 

owns portions of the lobby and floors 1-12 and 22-43. Other than some retail space on the first 

floor, the sections owned by Jewellery Tower are vacant. The exterior of the building consists 

largely of terra cotta masonry. 

¶ 8 The City’s allegations of building code violations related to the interior and exterior 

of the Building and included allegations that the defendant-owners failed to, inter alia, maintain 

the building or structure in a structurally safe and stable condition, failed to maintain the exterior 

walls that have washed out terra cotta, and failed to maintain the exterior walls of the building or 

structure free from holes, breaks, rotting timbers, and any other conditions that might admit rain 

or dampness to the walls. Pursuant to a recorded declaration of covenants, conditions, restrictions 

and easements for the Pittsfield Building (Declaration), MRR is responsible for paying a certain 

percentage of various costs that Jewellery Tower must pay for services for the Building, 

including maintaining the façade. 

¶ 9 In December 2017, Xiao Hua Gong (a.k.a. Edward Gong), who owned Jewellery 

Tower, was charged with fraud and money laundering in Canada. In October 2018, the United 

States District Court for the District of Columbia entered an order that stated that criminal 

proceedings were pending against Gong in the Ontario Superior Court of Justice, which had 

issued three restraining orders on December 19, 2017, providing that certain properties owned by 

Gong in the United States, including the Pittsfield Building, were subject to forfeiture under 
No. 1-20-1189 

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Canadian law. Pursuant to an international treaty, the United States District Court’s order 

enforced the restraining orders issued by the Ontario Superior Court of Justice and restrained 

Gong’s portion of the Building and other properties owned by Gong in the United States. 

¶ 10 A. Circuit Court’s Appointment of a Receiver

¶ 11 In January 2020, the circuit court granted the City’s motion to appoint a receiver 

pursuant to section 11-31-2 of the Illinois Municipal Code (65 ILCS 5/11-31-2) (West 2018)) 

and requested that the parties submit recommendations for the receiver. Jewellery Tower 

objected to appointing a receiver, asserting that the City failed to establish that there were 

dangerous and hazardous conditions at the Building. Jewellery Tower also stated that if the court 

appointed a receiver, then its requested receiver was “Courtney Jones.” 

¶ 12 On January 23, 2020, the court entered an order appointing “Jones Enterprises” as 

general receiver for Jewellery Tower’s portion of the Pittsfield Building. On March 5, 2020, the 

court entered an order clarifying its January 23, 2020, order that appointed the receiver, and 

stating as follows. Dangerous and hazardous conditions existed at the Pittsfield Building that 

jeopardized the health and safety of the public and citizens of the City due to, inter alia, leaking 

water pipes and cracked and broken windows throughout the upper floors of the Building that 

could fall, strike, and impale pedestrians. Due to these conditions, the Pittsfield Building failed to 

meet the minimum standards of health and safety required by the City’s municipal code and the 

threat of harm would continue without the appointment of a receiver. The court’s order also 

clarified the receiver’s name and stated that all authority previously granted to Jones Enterprises 

would be granted to Jones Receiverships, LLC. 

¶ 13 In this same March 5, 2020, order, the court authorized the receiver to, inter alia, 

maintain possession, custody, and control of the Building to prevent any further damage and 
No. 1-20-1189 

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stated that the receiver’s powers and duties to repair and stabilize the building would maintain 

the status quo of the Building. The order stated that the receivership included “all floors and 

improvements listed on the deed, erected or standing on the real property, and all appurtenances, 

liens, easements, personal property, equipment, *** licenses and rights attached or being to the 

real property, and with all rents, issues, income and rights attached or belonging to the real 

property, and with all rents, issues income and profits of the foregoing for the units owned by 

Jewellery Tower, LLC.” The order also stated that the receiver was authorized to “obtain 

insurance, if needed, in such amounts, with such companies and to insure against such risks, as 

Receiver deems necessary.” It ordered Jewellery Tower to turn over to the receiver “insurance of 

all types of the Property” and “insurance of all types for Owner or other related to the Property.”

¶ 14 On June 2, 2020, the Ontario Superior Court of Justice entered an order that modified 

its previous restraining order on the Pittsfield Building to permit the receiver to take over the 

management of Gong’s interest in the Pittsfield Building to the limited extent necessary to do 

work on it. The order stated that the restraining order did not affect the ability of any receiver, 

including Jones Receiverships, LLC, to discharge its court approved duties, including collecting 

rent and issuing receiver certifications and liens for repair or improvements to the Pittsfield 

Building. 

¶ 15 On July 9, 2020, the circuit court entered an order that stated that the receiver was 

authorized to “[s]ecure appropriate building insurance” and that the receiver’s “previous 

authority to secure insurance is increased up to $650,000.” 

¶ 16 MRR’s Motion to Compel Receiver to Immediately Obtain Insurance 

¶ 17 In August 2020, MRR filed a motion to compel the receiver to immediately obtain 

insurance. It asserted that the Pittsfield Building was vertically subdivided into two parcels, with 
No. 1-20-1189 

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Jewellery Tower owning the retail/office property on floors 1-12 and 22-38 and MRR owning 

the residential property on floors 13-31 as well as certain common areas and elevators. MRR 

argued that when the court appointed the receiver, it appointed the receiver as a general receiver 

and that, therefore, the receiver stepped in the shoes of the owner, Jewellery Tower, and took 

control over the retail/office property of the Pittsfield Building subject to all preexisting liens and 

encumbrances, including the Building’s Declaration of Covenants, Conditions, Restrictions and 

Easements of the Pittsfield Building (Declaration), which governed the respective rights and 

obligations of the owners of the Pittsfield Building. The Declaration states that “Retail/Office 

Parcel” includes floors 2-12 and floors 22-38, which are owned by Jewellery Tower. MRR

asserted that pursuant to the court’s July 9, 2020, order, the receiver was required to “[s]ecure 

appropriate building insurance” and was authorized to spend up to $650,000 to secure it. MRR 

contended that the receiver did not procure adequate insurance to protect the Building nor the 

receivership or MRR’s interest in the Building and that, therefore, the receiver did not comply 

with the intent of the court’s July 9, 2020, order or the Pittsfield Building’s Declaration. 

¶ 18 MRR attached to its motion the Declaration, which was recorded with the Cook 

County Recorder of Deeds in 2008, and asserted that article nine of the Declaration governed 

insurance and the types and policy limits owners were required to obtain to protect the Pittsfield 

Building. MRR cited sections 9.1(a), 9.1(b), and 9.5 of the Declaration. 

Section 9.1(a) states: 

“Each Owner shall procure, maintain and keep, at its sole cost and expense, its 

respective portion of the Building (including without limitation the foundation) insured 

under an ‘all risk’ or ‘special form’ (whichever is broader) property policy for an amount 

not less than one hundred percent (100%) of the full insurable replacement cost thereof. 
No. 1-20-1189 

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Such policy shall include, if applicable, flood insurance and boiler and machinery 

insurance insuring against loss or damage to that portion of the Total Property owned by 

that Owner resulting from any accident covered under a standard boiler and machinery 

insurance policy.”

Section 9.1(b) states: 

“The Owner of the Retail/Office Property shall separately maintain and carry, at its 

sole costs and expense, Commercial General Liability Insurance, covering claims for 

personal and bodily injury and property damage occurring in, on, under, within, upon or 

about the Retail/Office Property***for limits of not less than $1,000,000 per occurrence 

with a general policy aggregate of $2,000,000.00 for personal and bodily injury or 

property damage with at least an additional $5,000,000 umbrella coverage. The 

Commercial General Liability Insurance policy shall be endorsed to cover cross-liability 

claims of one insured against another, and shall contain a ‘severability of interest’ 

endorsement which shall preclude the insurer from denying the claim of one insured on 

account of the negligent acts of another insured.” 

Section 9.5 states: “Certificates delineating all forms of coverage and endorsements required 

hereunder shall be delivered to each Owner.***Copies of such policies shall be delivered to each 

Owner upon request.”

¶ 19 MRR stated in its motion that on July 17, 2020, the receiver provided MRR and the 

City with a one-page Certificate of Liability Insurance as proof of insurance. The one-page 

certificate, which MRR attached to its motion, was dated July 17, 2020, and provided that 

Cincinnati Specialty Underwriter’s Insurance Company was the insurer affording coverage and 

Jones Receivership, LLC was the insured. The certificate indicated that the type of insurance was 
No. 1-20-1189 

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“Commercial General Liability,” with limits of $1 million per occurrence and $2 million general 

aggregate. 

¶ 20 MRR argued that the receiver’s certificate of insurance failed to provide an address of 

the property sought to be insured and did not provide for additional insureds. MRR argued that 

the receiver failed to comply with the Declaration because it failed to provide evidence that the 

policy fully insured 100% of the replacement costs of the Retail/Office property as well as 

evidence of boiler and machinery coverage, which was required under section 9.1. It also argued 

that the receiver failed to provide evidence of a $5 million umbrella policy, which was required 

under section 9.2. MRR asserted that general liability insurance covers third party risks for 

injuries of third parties who are injured as a result of conditions at the Pittsfield Building, but that 

it did not cover the Pittsfield Building’s owner, or the receiver, for the replacement value in the 

event that the Pittsfield Building was damaged or destroyed by casualties. MRR argued that the 

receiver breached its fiduciary duty to the court and MRR because it failed to procure sufficient 

insurance for the Pittsfield Building. 

¶ 21 The receiver did not file a written response to MRR’s motion.

¶ 22 Hearing on MRR’s Motion to Compel the Receiver to Immediately Obtain Insurance

¶ 23 At the October 7, 2020, hearing on MRR’s motion to compel the receiver to 

immediately obtain insurance, MRR’s counsel argued that the receiver stepped into the shoes of 

the owner and, therefore, was acting as an owner and bound by the owner’s insurance 

requirements set forth in the Declaration. The receiver’s counsel argued that the receiver was 

appointed for Gong’s unit of the Pittsfield Building, not as a general receiver for the entire 

Building, and that the receiver was only required to secure insurance for Gong’s portion. The

receiver’s counsel stated that the receiver “obtained a minimum level of insurance that would 
No. 1-20-1189 

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basically cover the work that the [r]eceiver is doing and would give some coverage to the area” 

and there were “never any orders***placing us in the shoes of the owner.” 

¶ 24 In response to the receiver’s counsel’s argument that there were never any orders 

placing the receiver in the shoes of the owner, MRR’s counsel repeated his argument that the 

receiver stepped into the shoes of the owner and was bound by the Declaration. The court then 

responded as follows: “No, I would disagree with that. I’ve never had a Receiver step into the 

shoes of the owner. They’ve only been required to maintain the buildings or do repairs, and so 

they don’t step into the shoes of the owner. They have no ownership with regard to the 

property.” 

¶ 25 As for the City’s position, the City’s counsel asserted that the court appointed the 

receiver as general receiver for Gong’s property “so they step into the shoes of Gong” and the 

receiver was “not some separate entity.” The City’s counsel stated that Gong could not “act 

because the entire property is in the possession of the [g]eneral [r]eceiver” and that, as the 

general receiver, the receiver had “all the powers of the owner.” MRR’s counsel agreed and

stated that Gong was “no longer in the picture” because the receiver was appointed as general 

receiver. 

¶ 26 We note that during the hearing, Jacob Handelman, who was working to secure 

insurance for Jewellery Tower, told the court that originally the receiver had requested $600,000 

to spend on insurance but that the actual amount needed to buy insurance and to protect Gong 

was $30,000.1

 The City’s counsel requested that the receiver submit something in writing 

regarding this change in costs, after which the court ordered the receiver’s counsel to “put 

1 The report of proceedings does not specifically state Jacob Handelman’s position, but the transcript shows that he 

was working with the receiver to secure insurance for Jewellery Tower’s portion of the Building.
No. 1-20-1189 

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something in writing” within 14 days “explaining why it’s been changed from the cost would 

have been 600,000 and now 30,000.”

¶ 27 Following argument, the court denied MRR’s motion to compel the receiver to 

immediately obtain insurance. In doing so, the court concluded that it disagreed with MRR’s 

“interpretation that the [r]eceiver is now an owner.” The court stated that “in terms of what I’ve 

seen in the [D]eclaration, it is Mr. Gong’s responsibility to comply with that [D]eclaration” and 

that Gong was “still required to do so because he is still the owner.” The court ordered Gong to 

obtain the insurance set forth in the Declaration. The court also stated that the receiver acquired 

liability insurance and initially asked to spend $600,000, which was not the cost of what they 

actually needed. The court requested the receiver’s counsel to explain in writing the difference in 

the costs and what was covered by the insurance policy the receiver actually obtained.

¶ 28 The court also entered a written order following the October 7, 2020, hearing, in 

which it stated that it denied MRR’s motion, the receiver “secured some insurance”, and the 

insurance that was required under the Declaration was “the responsibility of the owner, not the 

general receiver.” The court ordered the receiver to provide the parties the entire insurance 

policy that it had secured. The court also ordered the receiver to provide within 14 days a written 

assessment of the insurance at the property and to justify the reduction of the cost of the 

insurance from the previously authorized $660,000 to $30,000.2 The court ordered Jewellery 

Tower to secure insurance required under the Declaration within 30 days. 

2 At the October 7, 2020, hearing the parties referred to $600,000 as the amount the court had originally authorized 

the receiver to spend. As previously discussed, on July 9, 2020, the court entered an order that authorized the 

receiver to “[s]ecure appropriate building insurance” and that stated that the receiver’s “previous authority to secure 

insurance is increased up to $650,000.” 
No. 1-20-1189 

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¶ 29 Pursuant to Illinois Supreme Court Rule 307(a)(1), (a)(3) (eff. Nov. 1, 2017), MRR 

filed this instant interlocutory appeal of the circuit court’s order that denied its motion to compel 

the receiver to immediately obtain insurance. 

¶ 30 MRR’s Motion to Remove Jones Receiverships, LLC as Receiver

¶ 31 We note that at the time MRR filed its notice of appeal in this case, MRR had another 

pending motion with the circuit court that requested the court to remove Jones Receiverships, 

LLC as receiver based on an undisclosed and improper conflict of interest. As previously 

discussed, MRR filed an interlocutory appeal of the circuit court’s order that denied MRR’s 

motion to remove the receiver. On July 16, 2021, we issued an opinion in that case, City of 

Chicago v. Jewellery Tower, LLC, 2021 IL App (1st) 201352. We reversed the circuit court’s 

denial of MRR’s motion to remove the receiver and ordered the circuit court to appoint a new 

receiver. 

¶ 32 Documents Included in MRR’s Appendix on Appeal 

¶ 33 We will briefly summarize certain documents included in MRR’s appendix on appeal, 

but which were not included in the record. 

¶ 34 MRR asserted in its brief on appeal that there were several motions pending with the 

circuit court at the time it filed its notice of appeal, including a motion filed by the receiver

entitled “motion for approval of general liability insurance policy.” In the receiver’s motion, the 

receiver asserted that on June 11, 2020, the circuit court had authorized the receiver to spend 

$45,000 on insurance, after which the receiver contacted Jewellery Tower’s previous insurer and 

learned that all of the previous insurance policies held by Gong had been cancelled, with the 

exception of the boiler and machinery insurance. The receiver asserted that, at that time, it 

requested quotes for all of the policies previously held by Gong, which included an umbrella 
No. 1-20-1189 

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policy. The receiver stated that the quotes it received were greater than $45,000 and that at the 

July 9, 2020, court date, it informed the court that it would need additional funds to secure the 

insurance policy. The receiver stated that after the July 9, 2020, court date, it met with the 

insurance company and determined that it was not necessary for the receiver to carry all of the 

same insurance policies that Gong had. The receiver stated that “[b]ased upon recommendation,” 

the receiver purchased liability insurance through Cincinnati Specialty Property Liability for 

$23,000, which covered liability insurance in the event of an accident or injury for $1 million per 

incident and $2 million general aggregate. The receiver argued that under the Declaration there 

was no obligation for Gong, or the receiver, to purchase insurance for the entire Pittsfield

Building and the policy it procured complied with the requirements of the Declaration. The 

receiver requested the court to approve its purchase of the general liability insurance policy. To 

its motion, the receiver attached the “Certificate of Liability Insurance” for the policy it 

procured, which was included on the record on appeal and described above. 

¶ 35 In MRR’s appendix to its brief, it also included its response to the receiver’s motion 

for approval of general liability insurance that it filed in the circuit court. In MRR’s response, 

MRR argued that the receiver did not adhere to the court’s October 7, 2020, order because it only 

provided the “Certificate of Liability Insurance” document and not the entire insurance policy as 

the court had ordered. MRR also asserted that pursuant to the court’s October 7, 2020, order, the 

receiver was required to provide an analysis as to why the expected expense for insurance 

decreased from $660,000 to $30,000, but that the receiver failed to do so. MRR contended that 

the insurance the receiver procured for the Pittsfield Building was “absurdly deficient” and the 

receiver had only spent $23,000 even though the court authorized the receiver to spend 
No. 1-20-1189 

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$650,000. MRR continued to argue that the receiver had not obtained insurance required under 

the Declaration, including adequate property insurance and umbrella coverage of $5 million. 

¶ 36 Also included in MRR’s appendix on appeal, is the circuit court’s November 19, 

2020, order that, among other things, granted the receiver’s motion for approval of general 

liability insurance. The court noted that the receiver had provided the parties a link to the policy 

using the Zoom chat feature and ordered the receiver to follow up by sending the link to the 

policy to all parties via email. 

¶ 37 II. ANALYSIS

¶ 38 On appeal, MRR contends that the court erred when it found that the receiver, as a 

general receiver, did not stand in the owner’s shoes for purposes of following the insurance 

requirements set forth in the Declaration. MRR asserts that the receiver stands in the shoes of the 

owner, Jewellery Tower, and takes control over Jewellery Tower’s potion of the Pittsfield 

Building subject to all preexisting liens and encumbrances, including the Declaration. It argues 

therefore that the court erred when it did not compel the receiver to obtain the insurance required 

for owners in the recorded Declaration, including umbrella and property policies. MRR asserts 

that the court ignored established case law and did not provide any reasons or bases for requiring 

the receiver to obtain commercial general liability insurance but not umbrella or property 

insurance, which were all types of insurance required in the Declaration. 

¶ 39 MRR further argues that the circuit court’s order requiring Jewellery Tower to obtain 

the insurance required in the Declaration did not relieve the receiver of its duty to obtain the 

insurance required, including umbrella and property insurance, because as a court-appointed 

general receiver, the receiver, not Jewellery Tower, must act pursuant to the recorded 

Declaration. MRR asserts that the assets of Jewellery Tower’s owner, Gong, had been frozen 
No. 1-20-1189 

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pursuant to a restraint order in Canada that was recognized by the United States District Court 

such that Gong was unable to comply with the court’s order. MRR notes that Gong had been in 

contempt since January 23, 2020, the date the receiver was appointed, and was under indictment 

in Canada. 

¶ 40 Following the filing of MRR’s opening brief, on February 24, 2021, MRR filed a 

motion to set case to ready status and for adjudication. MRR stated that the receiver’s response 

brief was due on December 11, 2020, but that the receiver had not yet filed an appearance or a 

response brief. MRR asserted that MRR obtained the insurance required under the Declaration 

and that Jewellery Tower’s portion of the Pittsfield Building, which is under the receiver’s 

control and management, “is completely unprotected from any type of casualty.” MRR asserted 

that because MRR shares portions of the Pittsfield Building, including the exterior, any loss to 

those shared portions will fall disproportionately on MRR. MRR stated that since the time it filed 

its opening brief, there were additional orders entered in the ancillary proceedings in Canada and 

the United States District Court for the District of Columbia. It asserted that none of those orders 

prevents the Receiver from acting and that the previous restraint order on Jewellery Tower’s 

portion of the Pittsfield Building had been lifted pursuant to a new order in the Canadian court, 

which makes it imperative that the issue of insurance be decided as soon as possible. 

¶ 41 When the receiver had still not filed a response or appearance in this court as of May 

7, 2021, this court entered an order stating that we would take the case on appellant’s brief only. 

¶ 42 As of the date of the filing of this order, the receiver has not filed an appearance or 

response. We may decide the merits of the appeal without the aid of the receiver-appellee’s brief 

because the record is simple, and we can discern the claimed errors without the aid of the 

receiver-appellee’s response brief. See First Capitol Mortgage Corp. v. Talandis Construction 
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15 

Corp., 63 Ill. 2d 128, 133 (1976) (“if the record is simple and the claimed errors are such that the 

court can easily decide them without the aid of an appellee’s brief, the court of review should 

decide the merits of the appeal”). As previously noted, as for the City’s position, the City filed a 

letter with the clerk of the Appellate Court, First District, stating that did not file a brief on the 

instant issue in the circuit court and that it would not be filing a brief in this appeal. 

¶ 43 The “appointment of a receiver is an equitable remedy not dependent upon any statute 

and rests within the discretion of the trial court.” Witters v. Hicks, 335 Ill. App. 3d 435, 446

(2002). When a circuit court is required to exercise its equitable powers with respect to a 

receiver, as here, we review a circuit court’s ruling under the abuse of discretion standard. 

REEF-PCG, LLC v. 747 Properties, LLC, 2020 IL App (2d) 200193, ¶ 32 (where the appellate 

court reviewed the trial court’s decision to issue receiver certificates and prioritize them over 

liens, the court stated it would review the issue under the abuse of discretion standard, noting the 

standard was appropriate “when a trial court is called upon to exercise its equitable powers” or 

“make a judgment call”). A court is considered to have abused its discretion “if its decision is 

arbitrary, fanciful, or unreasonable.” Mendez v. Town of Cicero, 2016 IL App (1st) 150791, ¶ 15. 

Further, a court abuses its discretion if it acted “arbitrarily without the employment of 

conscientious judgment, exceeded the bounds of reason and ignored recognized principles of law 

or if no reasonable person would take the position adopted by the court.” (Citation omitted.) 

Popko v. Continental Casualty Co., 355 Ill. App. 3d 257, 266 (2005).

¶ 44 MRR acknowledges this standard of review for the circuit court’s ruling on its motion 

to compel the receiver to immediately obtain insurance. However MRR asserts that we should 

review de novo the circuit court’s ruling because the underlying facts are not in dispute and the 

court’s decision is based on a purely legal analysis. See Cohen v. Blockbuster Entertainment, 
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16 

Inc., 351 Ill. App. 3d 772, 776 (2004) (where the circuit court based its ruling on the undisputed 

facts, the appellate court reviewed the arbitration issue de novo, noting that, where the 

underlying facts are not in dispute, the circuit court’s decision is based upon a purely legal 

analysis). MRR asserts that it does not dispute the court’s factual finding that the receiver 

obtained some insurance. It argues that the issue regarding whether the receiver steps into the 

owner’s shoes such that the receiver is required to follow the requirements set forth in the 

Building’s Declaration is purely a legal issue. Under a de novo standard of review, “we perform 

the same analysis that a trial judge would perform.” Khan v. Thomas v. Weatherguard 

Construction Co., 2015 IL App (1st) 142785, ¶ 63.

¶ 45 Although MRR asserts that we should review de novo the circuit court’s ruling 

because the facts are undisputed and the circuit court’s decision is based on a purely legal issue, 

it also asserts that the court’s decision ignored established case law and did not provide reasons 

for the decision. A circuit court’s “failure to apply correct legal principles does not preclude us 

from reviewing for an abuse of discretion.” Mendez v. Town of Cicero, 2016 IL App (1st) 

150791, ¶ 16. Further, a “circuit court abuses its discretion when it makes an error of law.” 

Cable America, Inc. v. Pace Electronics, Inc., 396 Ill. App. 3d 15, 24 (2009). 

¶ 46 We conclude that under either standard of review, the court erred when it denied 

MRR’s motion to compel the receiver to immediately obtain insurance. 

¶ 47 A circuit court “appoints a receiver, based on its equity jurisdiction, to secure and 

preserve property for the benefit of all concerned, so that the property might be subjected to such 

an order as the court might render.” Heritage Pullman Bank v. American National Bank & Trust 

Co. of Chicago, 164 Ill. App. 3d 680, 687 (1987). “The power to appoint a receiver is most 

usually called into action either to prevent fraud, save the subject of litigation from material 
No. 1-20-1189 

17 

injury, or rescue it from threatened destruction.” Compton v. Paul K. Harding Realty Co., 6 Ill. 

App. 3d 488, 497-98 (1972). A receiver is considered an officer of the court that appointed him. 

Witters, 335 Ill. App. 3d at 446. 

¶ 48 Further, a receiver owes fiduciary duties to the parties in the litigation. See PSL 

Realty Co. v. Granite Investment Co., 76 Ill. App. 3d 978, 995-96 (1979), aff’d in part, rev’d in 

part, 86 Ill. 2d 291 (1981); City of Chicago v. Hart Building Corp., 116 Ill. App. 2d 39, 50-51 

(1969). With respect to a receiver’s duty with insurance, the Corpus Juris Secundum section on 

insurance for receivers states as follows: 

“In view of the general duty of a receiver to protect and preserve property of the 

estate coming into its hands, it cannot be doubted that under some circumstances a 

receiver would be derelict in his or her duty if the receiver did not cause property in his or 

her possession to be insured against loss or damage.” 75 C.J.S. Receivers § 170. 

In addition, under the Illinois Mortgage Foreclosure Law (IMFL), with respect to insurance, the 

receiver has the power and authority to “insure the mortgaged real estate against loss by fire or 

other casualty” and “shall maintain the existing casualty and liability insurance required in 

accordance with the mortgage or applicable to the real estate and other property subject to the 

mortgage at the time the receiver took possession.” 735 ILCS 5/15-1704(b)(3), (c)(1) (West 

2018). Further, under the IMFL, a receiver must “manage the mortgaged real estate as would a 

prudent person, taking into account the effect of the receiver’s management on the interest of the 

mortgagor.” 735 ILCS 5/15-1704(c) (West 2018). 

¶ 49 Here, based on the record before us, we cannot find that the insurance secured by the 

receiver was sufficient to protect and preserve the Pittsfield Building. On July 9, 2020, the circuit 

court ordered the receiver to “[s]ecure appropriate building insurance” and authorized the 
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receiver to spend up to $650,000 to do so. The Declaration, which governs the Pittsfield 

Building, requires owners such as Jewellery Tower to obtain commercial general liability 

insurance as well as property and umbrella insurance policies. Specifically, with respect to 

property insurance, section 9.1(a) provides that each owner shall procure and maintain, “at its 

sole cost and expense its respective portion of the Building (including without limitation the 

foundation) insured under an ‘all risk’ or ‘special form’ (whichever is broader) property policy 

for an amount not less than one hundred percent (100%) of the full insurance replacement cost 

thereof.” With respect to commercial general liability and umbrella policies, section 9.1(b) 

requires each owner of the retail/office property to separately maintain and carry “Commercial 

General Liability Insurance, covering claims for personal and bodily injury and property damage 

occurring in, on, under, within, upon or about the Retail/Office Property***for limits of not less 

than $1,000,000 per occurrence with a general policy aggregate of $2,000,000.00 for personal 

and bodily injury or property damage with at least an additional $5,000,000 umbrella coverage.” 

¶ 50 Although the Declaration requires commercial general liability, property, and 

umbrella insurance policies for owners such as Jewellery Tower, the record shows that the 

receiver only secured commercial general liability insurance. The record contains a one-page 

certificate of liability form, dated July 17, 2020, which provided that Cincinnati Specialty 

Underwriters Insurance Company was the insurer, Jones Receivership, LLC was the insured, and 

the type of insurance procured was “Commercial General Liability,” with limits of $1 million per 

occurrence and $2 million general aggregate. We note that the actual policy is not contained in 

the record on appeal and the record shows that at the hearing, the parties did not have the actual 

policy, as after the hearing the court ordered the receiver to provide the parties the entire policy. 

Further, at the hearing, the receiver informed the court that even though it had initially requested 
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to spend $600,000 on insurance, it only needed to spend $30,000. Following the hearing, the 

court ordered the receiver to provide a written explanation regarding why the requested cost of 

insurance changed from $600,000 to $30,000. The court did not have this written explanation 

when it issued its ruling, and it is not included in the record on appeal. 

¶ 51 Accordingly, based on the record, we cannot find that the receiver secured 

appropriate insurance to manage, protect, and preserve the Pittsfield Building as it was required 

to do as a court-appointed receiver. We therefore find that the court abused its discretion when it 

denied MRR’s motion to compel the receiver to immediately obtain insurance, in which it 

requested the court to order the receiver to secure the insurance required for owners set forth in 

the Declaration.

¶ 52 Moreover, we note that when the court denied MRR’s motion, it found that the 

receiver did not stand in the shoes of the owner, Jewellery Tower, such that the receiver was not 

required to secure the insurance set forth in the Declaration. At the hearing, MRR’s counsel

argued that, as a general receiver, the receiver “stood in the shoes” of the owner, Jewellery 

Tower. The receiver’s counsel disagreed, stating that there were “never any orders***placing us 

in the shoes of the owner.” During the hearing, the court expressly stated that it disagreed with 

MRR’s position and stated “I’ve never had a Receiver step into the shoes of the owner. They’ve 

only been required to maintain the buildings or do repairs, and so they don’t step into the shoes 

of the owner.” The court then denied MRR’s motion on the bases that the receiver “secured some 

insurance” and the insurance required under the Declaration was “the responsibility of the owner, 

not the general receiver.” 

¶ 53 However, the record shows that neither the receiver nor the court relied on any 

authority to support the conclusion that a receiver does not stand in the shoes of an owner with 
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respect to securing appropriate insurance for a property and complying with a property’s 

governing document. In MRR’s motion in the circuit court, it argued that the receiver stood in 

the owner’s shoes, but the receiver did not file a written response to MRR’s motion. The receiver 

has also not filed a response in this appeal. Further, at the hearing, neither the receiver nor the 

court referred to any authority or support for the conclusion that the receiver does not stand in 

the shoes of the owner for purposes of securing appropriate insurance. 

¶ 54 From our research, we did not find any definitive support for the conclusion that a 

receiver does not stand in the shoes of an owner for purposes of either securing insurance or 

complying with insurance requirements set forth in a governing document. Rather, we have 

found support for the conclusion that the receiver has the responsibility to comply with the 

owner’s insurance requirements that are set forth in the existing Declaration. For example, with 

respect to receivers appointed in mortgage foreclosure cases, the IMFL requires the appointed 

receiver to maintain the existing casualty and liability insurance and it grants receivers the power 

to “insure the mortgaged real estate against loss by fire or other casualty.” 735 ILCS 5/15-1704 

(b)(3), (c)(1) (West 2018). Section 15-1704(c)(1) of the IMFL states that the receiver “shall 

maintain the existing casualty and liability insurance required in accordance with the mortgage 

or applicable to the real estate and other property subject to the mortgage at the time the receiver 

took possession.” 735 ILCS 5/15-1704(b)(3), (c)(1) (West 2018). 

¶ 55 Moreover, applying Illinois law, the United States Bankruptcy Court for the Northern 

District of Illinois has stated that “the receiver holds possession for the court subject to all 

previously existing equities, legal interests, and liens on the property” (In re Teknek, LLC, 343 

B.R. 850, 874 (N.D. Ill. 2006)), which provides support for the conclusion that a receiver would 

also hold the possession of the property subject to any existing insurance requirements applicable 
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to the property. In addition, the Corpus Juris Secundum section on receivers states that a receiver 

stands in the shoes of the owner: 

 “Generally, a receiver is merely a custodian and in that capacity takes all the property 

of the debtor which constitutes the subject of the suit, within the jurisdiction of the court.

Thus, while a general receiver takes the rights, causes, and remedies which were 

available to those whose interests the receiver was appointed to represent, the receiver 

stands in the shoes of the entity in receivership, and has no greater right to property than 

the entity has whose property the receiver was appointed to marshal, or no greater rights 

in the property than the debtor had, and except as to liens in existence at time of 

appointment, the receiver holds the property for the benefit of general creditors under the 

court’s direction.” (Footnotes omitted.) (Emphasis added.) 75 C.J.S. Receivers § 92.

¶ 56 Accordingly, based on the foregoing, we conclude that with respect to securing 

appropriate insurance, the receiver must follow the insurance responsibilities of the owner, 

Jewellery Tower, that are set forth in the Declaration. Further, given that the record does not 

show that the court relied on any authority when it denied MRR’s motion to compel the receiver 

to immediately obtain the insurance required for owners set forth in the Declaration, we find that 

the court abused its discretion when it denied MRR’s motion on the basis that the receiver did 

not stand in the owner’s shoes for purposes of securing insurance. 

¶ 57 III. CONCLUSION

¶ 58 The circuit court abused its discretion when it denied MRR’s motion to compel the 

receiver to immediately obtain insurance. We therefore reverse the portion of the circuit court’s 

October 7, 2020, order that denied MRR’s motion to compel the receiver to immediately obtain 
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insurance. We direct the circuit court to order the receiver to comply with the insurance 

requirements for owners set forth in the Building’s Declaration. 

¶ 59 Reversed and remanded with directions.