## I L L I N O I S 

## O F F I C I A L 

## RE P O R T S Appellate Court

Happy R Securities, LLC v. Agri-Sources, LLC , 2013 IL App (3d) 120509

Appellate Court Caption HAPPY R SECURI T I ES, L L C, an I llinois L imited L iability Corporation, Assigne e of First State Ba nk of I llinois
, Plaintiff and CounterdefendantAppellant, v. AGRI -SOURCES, L L C; THE I NT E RNAL REVENUE SERVI CE, The Department of t h e Treasury
, United S tates of Americ a; THE DEPARTMENT OF REVENUE OF T HE STATE OF I L L I NOI S; J E F F E RS O N RI

V E R T E RMI

NAL
, a Division of Consolidated Gra in and Ba rg e Comp an y , a Missouri Corporation; OQUAWKA RI VER TERMI NAL
, L L C; RYCO DIS T RI BU TI NG, I NC.; COUNTRY MUTUAL I

NSURANCE COMPANY; and UNKNO WN OWNERS a nd NONRECORD CL AI MANTS, Def endants (Oqua wka River Terminal, L L C, an I llinois L imited L iability Company ; and ROB ERT W. R YAN, J R., J EFF REY BU TL ER, and DA VID C

. J OB E, Individually and as Members of Oquawka River T e r mi n a l, L L C, Co u

n te rplaintiffs-A

ppellees

a n d C r o s s

- P l a i n t i f

f s

- A p p e l l e e s ; v

. K u r t D

. M c C h e s n e y , Counterdef

endant; Ag ri-Source s, L L C, Counterdef endant and CrossDef endant)

.

District & N o. Third District Docke t No. 3-12-0509

Filed Marc h 28, 2013

Held (Note : Thi s syl lab u s

con st it ut e s no par t of the opi nio n of the cour t but has bee n pre

par ed b y the Repo rt er of D e c i s i o n s f

o r t h e

c o n v e n i e n c e o

f t h e

rea der

. ) In an action arisin g fr o m the fore closure of a mortg ag e on a 20-ac re parc el of commerc ial proper ty , the lessee and contra ct purcha ser of an 8-

acr e parc el within the 20-ac re parc el was proper ly g rante d a preliminary injuncti o n s ta

y ing the fore closure action and prohibiting the owner s of the 20-ac re parc el from taking possession of the 8-ac re parc el, since the
contra ct purcha ser of the 8-ac re parc el satisfied the require ments for the issuance of a preliminary injunction to prese rve the status quo pending a decision on the merits of it s cl ai m s for specific perf ormanc e of the
contra ct for sa le and br eac h of fiducia ry duty

.Dec ision Under

Review Appea l from the Circuit Court of Hende rson County
, No. 11-CH-13; the Hon. Paul L . Mang ieri, Judge, pr esiding

.

J udg ment Affir med.

Counsel on Appea l Timothy J

. Howar d (ar g ued) and J eff rey G. Sorenson, both of Howar d & Howar d Attorney s PL L C, of Peoria, for appellant.

Patrick M. Griff

in (ar g ued) and Richard L

. Wil liams, both of Griff in Villa Wil liams L L P, of Gene va, for appellee s.

Panel J USTI CE CARTER delivered the judg ment of the c ourt, with opinion.
J ustices O’B rien a

nd Schmidt concurre d in the judgme nt and opinion.

OP INION

¶ 1 First State Ba

nk of I llinois (F SBI ) filed a fore closure action ag ainst numerous def endants
reg arding a 20-ac re parc el of commerc ial proper ty in Gladstone, I llinois

. FSB I later assig ned its rig hts under the mortg ag e to Happy R Securities, L L C (HRS). Oquawka River Terminal, L L C (ORT), filed counter claims and cross-c laims for specific p er fo rmanc e, brea ch of fiduciar y duty
, and injunctive relief ag ainst HRS, Kurt D. McChesney
, and Ag ri-Source s, L L C. After a

hearing, the circ uit court g rante d ORT’s motion f or a pre liminary

injunction, which, inter alia
, stay ed the fore closure action and prohibited HRS, McChesney
, and Ag riSources from seeking or taking possession of an 8-ac re parc el of land used by ORT that was contained within the afor ementioned 20-ac re parc el. HRS filed an interlocutory appea l,
arguing that the circ u it court err ed when it g rante d ORT’s motion for a preliminary injunction. W e af

firm.

¶ 2 FACTS ¶ 3 Th i s ca s e o ri gi n at ed i n t h e circ uit court on September 9, 2011, when FSB I filed a fore closure action ag ainst Agri-Source s reg arding a 20-ac re parc el of commerc ial proper ty in Gladstone, I llinois

. Numerous other defe ndants wer e adde d to the case , including O RT, and FSB I later assig ned i t s ri gh ts under the mortg ag e to HRS. Subsequently
, ORT filed
counter claims and cross-c laims f or specific perf

ormanc e (ag ainst Ag ri-Source s), brea ch of fiduciar y duty to ORT (ag ainst McChesney ), and injunctive relie f ( a g ainst McChesney
, Ag ri-

-2-Sources, a nd HRS). I n its pleading , ORT alleg ed, inter alia , that: “McChesne y , while a membe r of both ORT and Ag ri-Source s, eng ag ed in a ca lculated

course of conduct intended to spe cifica lly benef it his per sonal and business intere sts at the expense of t h e p ro tected business interests of the ORT Parties. Specifica lly
, McChesney brea ched his fiduciar y duty obligations to the ORT Parties by
, among other things, failing to fully disclose his persona l dealing s which wer e adver se to the business of the ORT Parties, and by suppressing and then usurping the corpor ate opportunities of ORT, including in particula r ORT’s contra ctually protec ted rig ht to purcha se rea l estate vital to ORT’s operations.” ¶ 4 The circ uit court held a hear ing over sever al day s i n M ar ch an d April 2012 on ORT’s motion for a preliminary injunction. Whil e portions of the evide n ce we re conflicting
, the fac ts of this case c an be g ener ally summarized as follows. ¶ 5 In 2007, Kurt McChesney and Mag e Fa rms, L L C (which was owned by McChesney and his mother), for

med Ag ri-Source s, L L C. At some point, Peter Rousonelos took over Mag e Fa rms’ owner ship interest in Ag ri-Source s, which sold various agricultural products and service s from a 2 0 -a cr e parce l of commercial property in Gladstone, I llinois

. This 20-ac re parc el was owned by the Gladstone Gr ai n C o mpany (GGC), which was a salvag e g rain business owned by

McChesney

and his relatives. ¶ 6 Also in 2007, Oquawka River Terminal, L L C (ORT), was formed by McChesney (25% memb er s h i p interest), Mag e Fa rms (25%; Rousonelos later took over Mag e Fa rms’

owner ship interest), J eff

rey Butler (25%)
, David J obe (121⁄2%)
, and Robert Ry an, J r. (121⁄2%)
to store, handle, and distribute ag ricultural fer tiliz er. ORT was based on an 8-ac re parc el of land (the ORT Property

) that was a p ar t o f t h e afor ementioned 20-ac re parc el owned by GGC. In 2007, ORT beg an leasing the use of two storag e buildings located on the ORT Property from GGC (the Gladstone L ease ). ¶ 7 In Dec ember 2008, Agri-Source s purcha sed the 2 0 -a cr e p ar ce l (her einaf ter the Ag riSources Prope rty

) fr om GGC, and assumed G GC’s position in t he Gladstone L ease

. ¶ 8 ORT also enter ed into three oth er lease agree ments related to its fer tiliz er business. I n 2010, ORT was assig ned Ag ri-Source s’ rig hts under a l ea s e t o u se a river dock owned by Consolidated Gra in and Ba rg e Company (the River Dock L ease ). Also in 2010, ORT beg an leasing the use of a railroa d s p u r l o ca t ed one-qua rter mile from the ORT Property (the R ai l ro ad S pur L ease ). I n 2011, ORT beg an leasing the use of another building from Ag riSources, whic h was to be use d as over flow storag e (the Hoop B uilding L ease ). ¶ 9 Acc ording to Ry an, the lease s wer e essential to ORT’s continued operation, as it r ece ived 75% of its shipments via railroa d car and two of its major customers transporte d most of their product via the Mississippi River. Ry an testified that in Mar ch 2012, ORT re ceive d notice from HRS of the termination of the Hoop Building L ease and the Gladstone L ease

. Ry an also testified that ORT had alre ady lost a customer due to this case ; the customer was approximately 10% to 15% of ORT’s business. In addition, another customer of ORT testified that he would likely pull his fer tiliz er business if ORT could not continue to operate out of its curr ent fac ility

. This customer stated that ORT provided a p ar t icular blend of fer tiliz er that he could not obtain from other fer tiliz er businesse s.

-3-¶ 10 I n m i d -2009, ORT undertook an expansion of its business. ORT soug ht an expansio n

loan in 2010 from FSB I
, which told ORT that it would not agree to fund the expansion until ORT substantially

completed the improve ments. ¶ 11 OR T u sed defe ndant RYCO Distributing, Inc. (RYCO), to install the impro v em en t s

. RYCO w as a construction business, primarily operating in the ag ricultural industry
, which

was owned by Ry an’s pare nts and which employ ed Ry an, Butler
, and J obe. ORT used RYCO
to fund the costs of the expansion. Acc ording to Ry an, RYC O (R y an , Butler
, and J obe)
ag ree d not to char g e ORT financ e char g es, and the other two members of ORT, McChesney and Rousonelos, ag ree d as t h e owner s of Ag ri-Source s not to char g e ORT rent. Ry an 1 testified that he understood this ag ree ment to last until the expansio n loan was approve d, while McChesney t es t i fi ed that he understood the agree ment to last for only six months. RYCO completed the expansion and reco rded a mecha nic’s lien on the proper ty ; the expansion alleg edly

cost over $400,000. ¶ 12 During mid-2010, FSB I chang ed it s position on the ex p an s i o n l o an and told ORT that

a traditional loan was no longe r fea sible. FSB I encour ag ed ORT to apply for a United States Small Business Administration (SBA) loan throug h FSB I

. To do so, howeve r, FSB I told ORT that J obe could not be a party to the loan. Acc ording ly
, Ry an draf ted a new operating
ag ree ment in August 2010 for ORT (the 2010 ORT Op erating Ag ree ment), which Ry an, Butler
, McChesney
, and Rousonelos signe d. The 2010 ORT Oper ating Ag ree me nt purported
t o change ORT from a member- manag ed limit ed liability company (L L C) to a manage rmanag ed L L C, with Ry an to serve as the initial mana g er. Ry an testified that the 2010 ORT Oper ating Ag ree ment was not supposed to take eff ect until the expansion loan was approve d. McChesney

testified that he unde rstood the ag ree ment to take immediate e ffe ct. ¶ 13 On Au gu s t 1 8
, 2010, two day s afte r the 2010 ORT Oper ating Ag ree ment was sig ned, ORT enter ed int o an agr eeme nt with Ag ri-Source s to purchase the eight acr es upon which ORT operated for $225,000 (the Purchase Ag ree ment). Ry an made a capital call for ORT in the amount of $51,000. Ry an, Butler
, and Rousonelos agree d that McChesney did not have to contribute to the ca

pital call bec ause he was e x perie ncingfinanc ial difficulties. ¶ 14 T h e P u rc h as e Ag ree ment was orig inally supposed to be closed on October 15, 2 0 1 0

. Howeve r, the closing date was extended twice; first, to Marc h 25, 2011, and second, to J une 1, 2011. Appar ently
, the closing date was extended by Ag ri-Source s due in part to the inability to convey

clea r title. An FSB Ivice pr esident testified that liens and judgme nts on the Ag ri-Source s proper

ty had ar rested the expansion loan process. ¶ 15 Acc ording to Ry an, ORT was still intent on consummating the Purchase Ag ree ment by J une 1, 2011, and he understood that FSB I was still willing to g o forwa rd with financ ing the Purchase Ag ree ment at that time. Acc ording ly
, ORT deposited 10 % o f the purcha se price with a ti tle company an d p rovided noti ce to Ag ri-Source s that it was ready to close on the Purchase Agr ee m ent. Howeve r, McChesney ’s attorney sent an email to FSB I on J une 3,

Ryan al so te st if

ie d tha t Mc Ches ney and Rous one los re cei ved cr edi t in the ir sha re s of ORT 1 for the fr ee re nt. Mc Ches ney te st if ie d tha t thi s cr edi t was m er el y an opt ion he was off er ed, to whic h he n ever a greed.

-4-2011, which stated that McChesney , as a me mber of O RT, objected to closing

.

¶ 16 T h e ORT members met with FSB I in J uly 2011 to resolve their g rowing issues, an d

ever y one involved ag ree d to continue to work toward completing the Purchase Ag ree ment. Howeve r, Ry an testified that in August 2011, he was told by FSB I that the junior liens on the Ag ri-Source s proper

ty totaled approximately $160,000 and wer e “toug h to de al with” such that FSB I decide d to forec lose on Ag ri-Source s instead. ¶ 17 Whil e Ry an testified t h at M cC h es n ey wa s at al l times a member of ORT and that McChesney had an 18% share in OR T at the time of the hear ing in this case , McChesney testified that the other ORT members told him in August 2011 that he was out of ORT. Ry an testified that they never reduc ed McChesney ’s share in ORT to 0%. A fede ral Schedule K-1
tax form (form 1065) entered into evide n ce that was prepar ed for McChesney for tax y ear 2010 showed that he had a 0% share of ORT’s profit, loss, and capital for that tax y ear

. The FSB I vice pres i d en t al s o testified that Ry an told him during the J uly 2011 meeting that McChesney

was no long er a

member of

ORT. ¶ 18 Substantial testimo n y wa s al s o prese nted on McChesney ’s financ ial problems. J ohn Br ad l ey , a senior vice president of a Minnesota bank who also serve d as a consultant for FSB I
, testified t hat around mid-2011, he was a ssigne d to resolve Mc Chesney ’s “troubled” relationship with FS BI

. In total, McChesney was indebted to FSB I in the approximate
amount of $ 3 .3 to $3.4 milli on. McChesney ’s relationship with FSB I included persona l loans made to McChesney
, as well as chapte r 11 (11 U.S.C. § 101 et seq. (2006)) bankruptc y proce eding s involving M&K Fa rms Partnership, which McChesney testified was a business
venture involving him and his mother. ¶ 19 McChesney testified that the M& K Fa rms Partnership enter ed bankruptc y proce eding s in J anuar y 2011 and that the objec tive was to close the bankruptc y proce eding s by the end of 2011. As a part of t hese procee dings, the M&K Fa rms Partnership sold over $1 milli on in machiner

y , and McChesney ’s mother sold at least $ 4 milli on in rea l estate from the Charles McChe sney

trust. ¶ 20 Documents introduced into evidenc e indicated that Br adley p r o p o s e d a p la n to r e s tr u cture McChesney ’s debt with FSB I

. Part of this plan included issuing a new loan to McChesney
to retire sever al debts, including the Ag ri-Source s mortg ag e. A list of the plan’s premises contained a statement that as the “Ag ri-Source s R.E.” sells, the proce eds from that sale would reduc e the principa l o f the new loan to McChesney ; thus, “F SBI would adjust
pay ments [on the new loan] acc ording ly .” Under a list of “B enef its to Kurt,” the plan stated, “F SBI will assign Agr i -Source s note, m ortg ag e, security ag ree ments and other documents
to Kurt, so that he can enfor ce documents and exercise rig hts. This m ea n s that Kurt can exercise lender ’s defa

ult r ights ag ainst Peter Rousonelos a nd can also deal with delinquent
tenant ORT.” McChesney claimed that this assig nment was alway s supposed to be made to HRS, which was an L L C that he formed on Dec ember 30, 2011. Howeve r, Br adley testified that at “past the eleve nth hour ,” McChesney reque sted that FSB I assig n its rig hts under the Ag ri-Source s mortg ag e to HRS, rathe r than McChesney himself. Br adley also stated that at the time McChesney reque sted the assig nment be made to HRS, paper work had alre ady been drawn up in which McChesne y was the a ssigne e.

-5-¶ 21 On May 23, 2012, the circ uit court issued a written decision in which it g rante d ORT’s

motion for preliminary injunction. After a detailed rec itation of the fac ts, the court discussed

eac h of the four elements nece ssary to obtain a preliminary injunction. First, the court found that ORT established the possession of a clea rly asce rtainable rig ht in that it had a contra ctual righ t to obtain a proper

ty interest in the ORT Property via the Purchase Ag ree ment, in conjunction wi th the four lease ag ree ments. The court noted that the Purchase Ag ree ment was unique be cause : “it would allow ORT to: (a) secur e a perma nent base upon which to operate; (b) solidify its acc ess to the rail spur by way of perma nent ease ment; (c) allow it to rec og nize the full b en ef its of the seconda

ry lease s; and (d) allow it to rea liz e the benef its of i t s s o m e $400,000 improvements on the Ag ri-Source s proper ty .” The court also noted that an issue exists as to whether the Purc hase A g ree ment was still in eff ect, but beca

use all that was require d to obtain a preliminary injunction was a prima facie

case , the cour

t found that ORT had met its burden of proof unde r this element. ¶ 22 Second, the court found that OR T es t ab l i s h ed t h at it had no adequate reme dy at law without the prelimi nary injunct i o n

. In this reg ard, the court found that beca use t he subj ect of the Purcha se Ag ree ment was land, mone y damag es would be ina dequate

. ¶ 23 Third, the court found that ORT established that it would suffe r irrepa rable harm without the pre liminary

injunction. Specifically , the cour t found that ORT had established a prima facie case that if HRS wer e able to fore close on the Ag ri-Source s Property and require ORT
to vaca te the ORT Property
, ORT would not be able to b en ef i t from the improvements it made on the ORT Property and its business would likely cea se to exis t. The court also noted that ORT had alr eady

lost a portion of its business due to the liti g ation. ¶ 24 Four

th, the court found that ORT established that it wa s likely to suc cee d on the merits of its spec ific perf

ormanc e and brea ch of fiduciar y duty claims. Wit h reg ard to the specific perf ormanc e claim, the court found that the evidenc e established that ORT and Ag ri-Source s enter ed into the Purchase Ag ree ment, that ORT had perf ormed under the contra ct, and that but for McChesne y ’s conduc t, the deal would have close d. ¶ 25 Wit h reg ard to the brea ch of fiduciar y du t y cl ai m , the court noted that to establish a likelihood of success, OR T had to establish t hat ORT was a n L L C, that McChesney was a member of ORT at the time of the alleg ed brea ch, and that McChesney committed acts in violation of his fiduciary

duties as a membe r of ORT. ¶ 26 The court found that the evidenc e established that ORT was an L L C, althoug h the court noted that there was a question as to whether OR T wa s a member- manag ed L L C or a manag er- manag ed L L C. The court n o ted that ORT’s article s of org anization listed it as a member- manag ed L L C and that it was reg istered with the Secre tary of S t at e as such. Howeve r, the court also noted t h at the August 2010 Oper ating Ag ree ment purported to chang e ORT to a manag er- manag ed L L C, althoug h the ev i d en ce was conflicting on the eff ective date of that agree ment. In addition, the court noted that the evidenc e indicated that both Ryan and McChesney eng ag ed in a cts that wer e both c onsistent a nd inconsistent w ith ORT beingeither a

member- manag ed L L C or a mana g er- manag ed L L C. ¶ 27 The c ourt also found that ORT had raised a fair question of whether McChesney was a

-6-member of ORT at the time of the alleg ed brea ch. In this reg ard, t h e co u rt listed the

following inclusive fac tors: “[ 1 ] M cC h esney was listed as a member of ORT in ORT’s orig inal article s of
org anization; [2] he was identified and signe d the orig inal Oper ating Ag ree ment for ORT dated May 11, 2007; [3] he was identified and signe d as a member of ORT relative to the August 16, 2010, ORT Oper ating Agree ment; [4] he signe d the August 19, 2010, ORT

acc ounts payable repor

t as a member; [5] he was listed as a member of ORT, albeit with

a 0% profit/loss perc entag e in ORT’s 2010 Schedule K-1; [6] he identified himself as a member of ORT in a J une 3, 2011, e-ma il in which he objected to the ORT purcha se of the Agri-Sourc e Proper

ty ; and [7] there are judicial admissions (or mistakes of record) in which McChesne y

identifies himself as a current member of ORT as compa red to a former member of

ORT.” (Empha ses in orig inal.) ¶ 28 The court also found that OR T h ad ra i s ed a fa i r q u estion of whether McChesney brea ched his fiduciar

y duties as a me mber of O RT. Specifica lly , the cour t found t hat OR T had established that McChesney failed to fully disclose his persona l endea vors that wer e adver se to ORT’s interests–name ly
, the acquisition of the Ag ri-Source s note throug h HRS, which “usurpe d ORT’s opportunity to purcha se 8 acr es of the Ag ri-Source s proper ty .” The
court also highlig hted McChesney ’s actions in preve nting the sale from occur ring “and seeking to dispossess ORT of its place of business, conseque ntly rea pi n g t h e benef

its of ORT’s over $400,000 worth of i m p ro v em ents on the proper ty .” Acc ording ly
, the court g rante d ORT’s motion for a pr eliminary injunction, and HRS appeale d.

¶ 29 ANALYSI S ¶ 30 On appea l, H RS ar gues that the circ uit c ourt err ed whe n it gr anted ORT’ s motion for a preliminary

injunction. ¶ 31 A preliminary injunction i s intended to prese rve the status quo of the parties until the circ uit court can decide the merit s o f a case

. Callis, Papa, Jack stadt & Halloran, P.C. v. Norfolk & W

estern Ry. Co.
, 195 I ll. 2d 356, 365 (20 0 1 ). A preliminary injunction is “an
extreme reme dy which should be employ ed only in situations wher e an emer g ency exis ts and serious harm would result if the injunction is not issued.” Callis , 195 I ll. 2d at 365. To obtain

a preliminary injunction, a party must establish that: (1) it posses ses a clea rly asce rtained rig ht in need of protec tion; (2) it will suffe r irrepa rable harm without the injunction; (3) its i n j u ry has no adequate reme dy at law; and (4) it is likely to succe ed on the merits o f t h ei r

case

. Callis , 195 I ll. 2d at 365-66. ¶ 32 “On appeal, a revie wing court ex am i n es o nly whether the party seeking the injunction h as d em o nstrated a prima facie case that there is a fair question as to the exis tence of the rig hts claimed.” Callis , 1 9 5 I ll. 2d at 366; see also Illinois Beta Chapter of Sigma Phi Epsilon Fraternity Alumni Board v. Illinois Institute of Technology
, 409 I ll. App. 3d 228, 231 (2011) (noting that neither controve rted fac ts nor the merits of the case are to be decide d and that “[t] he only question is whether there was a sufficie nt showing to aff irm the order of the trial court” ). A decision on a prelimin ar y injunction is a matter within the circ uit court’s discretion, and we will not disturb that decision absent an abuse of that discretion. Ca l l i s ,

-7-195 I ll. 2d at 366.

¶ 33 I . WHETHER ORT POSS ESSED A CL EARL Y ASCERTAI NED RI GHT
I N NEED O F PROTECTI ON ¶ 34 Wit h reg ard to the first element of the preliminary injunction standard, the circ uit c ourt found that “ORT has established a prima fac ie case that there is a contra ctual rig ht to obtain

an owner ship interest in th e O RT /A g ri-Source s Purchase Agree ment of August 18, 2010, and that that rig ht stil l exi sts.” HRS does not challeng e this findingon appea l and adva nces no argument that ORT lacke d a cle arly asce rtained r ight in nee d of protec tion.

¶ 35 I I . WHETHER ORT WOUL D SUFF ER I RREP ARABL E HARM AND

WHETHER THERE WAS AN ADEQUATE REMEDY AT LAW ¶ 36 The second and third elements of the preliminary injunction standard are closely related. S ee Hensley Construction, LLC v. Pulte Home Corp.
, 399 I ll. App. 3d 184, 190 (201 0 ) ( “ [t ]h e s e c o n d require ment for a preliminary injunction, irrepa rable harm, ‘occ urs only wh e r e the reme dy at law is inadequate, m ea ning that monetary damag es cannot adequately
compensate the injury and the injury cannot be measure d by pecunia ry standards’ ” (quoting Franz v. Calaco Dev elopment Corp.
, 322 I ll. App. 3d 941, 947 (2001)) ). Wit h reg ard to these
two elements, HRS argues that the circ uit court err ed when it found that ORT would suffe r irrepa rable harm without the injunction and when it found that ORT had no adequate reme dy
at law. Specifica lly
, HRS argues that monet ar y d amag es would be an appropr iate and sufficie nt remedy . HRS’s argument ignor es long -standingcase law. ¶ 37 “Where land is the subject matter of the ag ree ment, the inadequa cy of the leg al reme dy is well-settled.” Her i t a g e Standard Bank & Trust Co. v. Steel City National Bank
, 234 I ll. App. 3d 48, 56 (1992); see Giannini v. First National Bank of Des Plaines
, 136 I ll. App. 3d 971, 981 (1985). In this case , ORT enter ed into the Purchase Ag ree ment with Ag ri-Source s to purcha se the eig ht acr es of the Ag ri-Source s Property on which ORT operated its fer tiliz er business. Cumulative to noting the fac t that rea l estate was involved, the circ uit court stated that the ORT Property was uniquely suited to OR T ’s fer tiliz er operation and that an interfe r e n c e w it

h th e Pu r c h a s e A gr e e me nt w o u ld h a v e e xtreme and incalcula

ble ramifications

o n ORT’s business rela

tionships. In fac t, ORT had alre ady lost a customer du e t o t h i s litigation; this customer constituted approximately 10% to 15% of ORT’s b u s iness at the time. Another customer also testified that he would likely pull his business if ORT could not operate from its curr ent fac ility
, at least in part beca use of the improvements ORT made on the proper

ty allowed this customer to obtain a particula r blend of fer

tiliz er that he could not obtain from other businesses. Under these circ umstances, we ag ree with the circ uit court that ORT met its burden on the second and third elements of the preliminary injunction standard. Acc ording ly
, we hold that the circ uit court did not err when it found that the ha rm to ORT would be irrepa

rable (see Prentice Medic al Corp. v. Todd
, 145 I ll. App. 3d 692, 701 (1986) (noting that the c o ncept of irrepa rable injury contemplates matters such as “dama g e to the
g ood will of a business which would be incalcula ble [citation] or loss of competitive position”)) and when it found that ORT had no adequate reme dy at law in the absenc e of the

-8-injunction (see Heritage Standard Bank
, 234 I ll. App. 3d at 56 (“[a]n ownership interest in

proper ty is a rig ht for which injunctive pr otection may be g rante d”))

.

¶ 38 I I I . WHETHER ORT WAS L I KELY TO SUCCEED ON THE MERI TS OF
I TS CL AI MS ¶ 39 Wit h reg ard to the fourth element of the preliminary injunction standard, HRS argues that
t h e circ uit court err ed when it found that ORT was likely to succe ed on the merits o f i t s spec if ic p e r formanc e and brea ch of fiduciar y duty claims. HRS attacks both of these finding s, and we will address these arguments in turn.

¶ 40 A. The L ikelihood of ORT Succe edingon the Merits of Its Specific Per formanc e Claim ¶ 41 First, HRS argues that ORT could not succe ed on its specific perf ormanc e claim beca

use th e Agr i -Source s mortg ag e was superior to ORT’s contra ctual rig ht to purcha se the ORT Property and beca

use corpor ate veil pierc ing does not a pply

. We be lieve HRS’s a rguments fail beca use they ask this court to adjudicate matters not proper for adjudication at this stag e of the c ase. ¶ 42 T h e reme dy of specific perf ormanc e is not available as a matter of rig ht, but ra t h er i s available as an equitable reme dy that is based on “the desire to do more perf ect and complete justice, which the reme dy at law would fail to g ive.” Daniels v. Anderson
, 162 I ll. 2d 47, 56 (1994); see Hagen v. Anderson
, 317 I ll. 173, 177 (1925) ( per curiam ) (“[c]ontracts to devise

or convey rea l estate are enfor ced by specific perf ormanc e on the g round that the law cannot do perf ect justice”); see also Dixon v. City of Monticello
, 223 I ll. App. 3d 549, 560-61 (1991) (noting that the reme dy of specific perf ormanc e is grante d to preve nt injusti ce and beca use “per fec t justi ce c annot be done at law” ).
“To s t at e a cause of action for specific perf ormanc e, the plaintiff must alleg e and
prove the following elements: (1) the exis tence of a valid, binding an d en fo rc eable
contra ct; (2) the compliance by plaintiff with the terms of his contra ct or the fac t that he is rea dy
, willing and able to perf orm his part of the contra ct; and (3) the failure or ref usal by the defe ndant to perf

orm his pa

rt of the contra ct.” McCormick Road Associates L.P. II v . Taub , 276 I ll. App. 3d 780, 783 (1995).
Be cause this c ase was befor e the circ uit court on a motion for preliminary injunction, ORT

was not require d to prove that it was en t itled to relief on the merits of its specific perf ormanc e claim. People ex rel. Sherman v. Cryns
, 203 I ll. 2d 264, 277 (2003) (“[a] preliminary injunction is not intended to deter mine controve rted rig hts or decide the merits of a case ”). Rather, ORT only had to raise a fair question of its rig ht to specific perf ormanc e such that the status quo should have been prese rve d u n t i l the merits of the case could be decide d. See Buzz Barton & Associates, Inc . v. Giannone
, 108 I ll. 2d 373, 382 (1985). We also note that a revie wing court can sustain a circ uit c ourt’s judgme nt on any basis that has

a fac tual basis in the rec ord. Estate of Johnson v. Condell Mem or i a l Ho s p i t a l
, 119 I ll. 2d 496, 502 (1988).

-9-¶ 43 In this case , the circ uit court found that the evidenc e prese nted at the hearing raised f air questions that: (1) ORT had enter ed into the Purchase Ag ree ment in August 2010 with Ag riSources to purcha se the eig ht acr es of the Ag ri-Source s Property upon which ORT operated its business; (2) ORT had perf ormed its end of the Purchase Ag ree ment; and (3) the Purchase Ag ree ment would h av e b ee n consummated but for the actions of McChesney

. Our review of the re cord r evea ls no error in these finding s. ¶ 44 Fur

ther, HRS’s argument that specific perf ormanc e was impossibl e–due to the mortg ag e

on the en t ire Ag ri-Source s Property –oversimplifies the issue and fails to rec og nize the interre lated nature of ORT’s claims. Whether the Ag ri-Source s mortg ag e would defe at any rig ht ORT had to buy the OR T Property is a matter to be deter mined when the case is d ec i d ed on the merits and not when the case is on appea l from a ruling that g ra n t ed a preliminary injunction. The determination of an y ef fect the Agri-Sourc es m ortg ag e would have nece ssarily depends on further examination of the propriety of McChesney ’s conduct i n obtaining the Ag ri-Source s note for HRS. As our supreme court has noted, ethica l principles must be car efully considere d in case s involving specific p er fo rm ance

. Lucey v. Shelton
, 24 I ll. 2d 471, 475 (1962). Some of the considera tions rele vant to this issue have been ref ere nced in ORT’s pleading s, including the brea ch of fiduciar y claim and statements related t o the equitable doctrines of merg er and unclea n hands. S ee, e.g. , Ju rado v. Simos
, 166 I ll. App. 3d 380, 382 (1988) (noting that the equitable doctrine of merg er can operate to

canc el a debt if one individual is both the obligor and the oblige e on the note). See also Donk Bros. & Co. v. Alexande r & Taussig
, 117 I ll. 330, 337 (1886) (discuss i n g an d ap ply ing
merg er) ; Forthman v. Deters
, 206 I ll. 159, 171 (1903) (noting that equity will not preve nt a merg er if such a preve ntion would sanct i o n a wrong such as fraud); State Bank of Gene va

v. Sorenson
, 167 I ll. App. 3d 674, 680 (1988) (discussing the equitable defe nse of “uncle an hands” in the f

orec losure contex t and st ating that under the doctrine, “ equitable r elief ma y be denie d if the par

ty seekingthat relief is guilty of misconduct, fr aud, or ba d faith towar d the party ag ainst whom relief is soug ht, a nd further provided that the misconduct, fra ud, or bad faith is in connec tion with the transac tion under consideration”); Restatement (Third) of Restituti on and Unjust Enr ichment § 63 (2011) (discussing restitution in the context of the unclea n hands doctrine); Hofert v. L a t o r r i
, 2 2 I ll. 2d 126, 130 (1961) (holding that once a fiduciar y relationship has been established, if the dominant party profits from any transac tion betwee n the parties, a rebuttable presumption arises that the transac tion is fra udulent); Clark

v. Clark
, 398 I ll. 592, 601 (1947) (same)

. See g ener all y 2 6 R i char d A. L ord, Wil liston on C ontrac ts § 69:23, at 590 (4th ed. 2003) (stating that when a fiduciar y relationship ex i s t s , “ther e is a posi tive duty t o d i s cl o s e materia ls fac ts, and a failure to do so is constructively fra udulen t ”) ; Restatement (Third) of Restituti on and Unjust Enrichment § 43 (2011) (discussing restitution in the context of a brea ch of fiduciar y duty ). Discover

y has not been perf ormed in this case and the merits of all of the rele vant claims have not be en addre ssed, and the prese nt appea l is neither the appropr iate place nor the appropr i at e t i m e t o decide them. ¶ 45 L i k ew i s e, wh et h er the corpor ate veil will be pierc ed in this case is a matt er n o t appropr iate for deter

mination b y this court. Given the evidenc e prese nted in this case reg arding McChesney ’s actions to block the sale of the ORT Property and to obtain, throug h

-10-HRS, the assignme nt of the Ag ri-Source s note from F SBI , we a g ree that ORT raised a fair question that the corporate veil could be pierc ed in this case

. See Gass v. Anna Hospital Corp.
, 392 I ll. App. 3d 179, 186 (2009) (“[a] party seeking to pierc e the corpor ate veil must make a substantial showing that (1) ther e is such a unity of intere st and ownership that the
separ ate persona lities of the corpor ations no longe r exis t and (2) circ umstances exis t so that adher ence to the fiction o f a separ ate corporate ex istence would sanction a fra ud, promote injusti ce, or promote inequitable conseque nces” ); see also W estmey er v. Flynn
, 382 I ll. App. 3d 952, 960 (2008) (citing section 10-10(d) of the L imited L iability Company Act (805 I L CS 180/10-10(d) (West 2008)) and stating that “while the Act provides specifical l y t hat the failure to observe the corpor ate formalities is not a g round for imposing persona l liability on the members of a limit ed liability company , it does not bar the other bases for corpor ate veil pierc ing, suc h as alter

eg o, fra ud or under capitalization”). ¶ 46 For

the af oreme ntioned rea sons, w e hold that the circ uit court did not err when it ruled that ORT had shown it was likely to succe ed on the merits of its specific perf ormanc e claim.

¶ 47 B. The L ikelihood of ORT Succe edingon the Merits of Its
Br eac h of F iduciary

Duty Claim ¶ 48 Second, HRS argues t hat OR T could not succe ed on its breach of fiduciary duty claim beca use McChesney was not a member of ORT and even if he was, he did not brea ch any of his fiduciar

y duties to ORT, which wer e define d by the 2010 Oper ating Agree ment. Ag ain, we be lieve that HRT’s a

rguments fail bec ause the y ask this court to adjudicate matters not proper for a djudication at this stage of the c ase. ¶ 49 Prevailing on a claim for a brea ch of fiduciar y duty require s the complainant to e stablish that: (1) a fiduciar

y duty exis ted; (2) the duty was brea ched; and (3) the brea ch proxi mately

cause d an inj ury to the complainant. Neade v. Portes
, 193 I ll. 2d 43 3
, 444 (2000). Section 15-3 o f th e L imited L iability Company Act define s g ener al standards of conduct for members and manag ers of L L C s. 805 I L CS 180/15-3 (West 2010). S tandar ds that differ slightly are

enumer ated for members of both member- manag ed and manag er- manag ed L L Cs. 805 I L CS 180/15-3(a) -(g ) (West 2010). Members of member- manag ed L L Cs owe duties of loy alty and

car e to the L L C and other members (8 0 5 I L C S 180/15-3(a) (West 2010)), which includes acting fairly with reg ard to t h e L L C’s business (805 I L CS 180/15-3(b)( 2) (West 2010)). Fur ther, members of member- manag ed L L Cs must discharg e their dut i es to the L L C and other members with obliga tions of g ood faith and fair dealing

. 805 I L CS 180/15-3(d) (West 2010). The me mbers of ma nag er- manag ed L L Cs do not ow e the same ty pe of duties to the L L C or other members, but can owe the same ty pe of duties if the member “e x er ci s es the

m an ag eria l authority vested in a manag er by [t he] Act.” 805 I L CS 180/15-3(g )(3) (West 2010). ¶ 50 As we stated above with reg ard to ORT’s specific perf ormanc e clai m , OR T wa s n o t require d to e stablish that it was entitled to judgme nt on the merits of its brea ch of fiduciar y duty claim. See Sherman
, 203 I ll. 2d at 277. At this stag e of the case , ORT only had to raise

a fair question of its rig ht to rec over on its brea ch of fiduciar y duty claim. See Buzz Barton
, 108 I ll. 2d at 382.

-11-¶ 51 In this case , the circ uit court first found that the evidenc e established ORT was an L L C,

but the evidenc e was co n fl i ct i ng on whether ORT was a member- manag ed L L C or a manag er- manag ed L L C at the time of the alleg ed brea ch of fiduciar y duty

. The court noted that afte r the new ORT Oper ating Ag ree men t wa s s i gn ed in August 2010, both Ry an and McChesney eng ag ed in acts and made statements that wer e consistent and inconsistent with ORT being a member- manag ed L L C or a manag er- manag ed L L C. Additionally
, ORT’s orig inal status as a member- manag ed L L C was never chang ed with the S ec retary of S tate. The c ourt’s finding s in this reg ard w ere not errone ous. ¶ 52 S ec o n d
, t h e ci rcuit court found that the evidenc e raised a fair question of wh et h er McChesney was a member of ORT at the time of the alleg ed brea ch of fiduciar y duty

. In this
reg ard, the court spec ifically mentioned the followingfac tors: “[1] McChesney was l i s t ed as a member of ORT in ORT’s orig inal article s of
org anization; [2] he was identified and signe d the orig inal Oper ating Ag ree ment for ORT dated May 11, 2007; [3] he was identified and signe d as a member of ORT relative to the August 16, 2010, ORT Oper ating Agree ment; [4] he signe d the August 19, 2010, ORT

acc ounts payable repor

t as a member; [5] he was listed as a member of ORT, albeit with

a 0% profit/loss perc entag e in ORT’s 2010 Schedule K-1; [6] he identified himself as a member of ORT in a J une 3, 2011, e-ma il in which he objected to the ORT purcha se of the Ag ri-Source Property ; and [ 7] there are judicial admissions (or mistakes of re cord) in which M cChesney identifies hi mself as a current member of

ORT as compa

red to a former member of

ORT.” (Empha ses in orig inal.) Given this confl i ct i n g evidenc e, we ag ree with the circ uit court that ORT raised a fair question of whether McChesney was a member of ORT at the time of the alleg ed brea ch. Be cause this case is on appea l from a g rant of a preliminary injunc tion, we decline both parties’ attempts on appea l at havingus conclusively deter mine the issue. ¶ 53 Third, the circ uit cour t fo u n d t h at t h e ev i dence raised a fair question of whe ther McChesney eng ag ed in acts that constituted a brea ch of his fiduciar y duties to ORT. As the
court noted, ORT prese nted evid en ce s u ff icient to show that McChesney failed to fully disclose his persona l matters that wer e adver se to ORT’s business interests. In particula r, a fair question was raised t hat M cChesney
, throug h HRS, obtained the Agri-Source s note at least in part to block the sa le of the ORT Property –a sale that he objec ted to “as a member of ORT” via email from his attorney

. Our revie w of the rec ord reve als no err ors in the court’s finding s on this matter. ¶ 54 “To establish a l i k el i h o o d o f s u ccess, [t he movant] need only raise a fair que stion
reg arding the ex istence of a claimed rig ht and a f air que stion that he will be entitl ed to the relief prayed for it the proof sustains the alleg ations.” Kalbfl eisch v. Columbia Community Unit School District No. 4
, 396 I ll. App. 3d 1105, 1114 (2009). Under the circ umstances of this case, we hold that the circ uit court did not err when it found that ORT had e stablished that it was likely

to succe ed on the mer its of its breach of fiduciar y duty claim.

¶ 55 CONCL USI ON ¶ 56 For the fore g oing rea sons, the judgme nt of t h e ci rc uit court of Hende rson County that

-12-g rante d ORT’s motion for a pr eliminary injunction is affirmed.

¶ 57 Affir

med.

-13-