Court Opinion

ID: 4673426
Source: CourtListenerOpinion
Date Created: 2021-03-31 22:08:07.227961+00
Date Added: 2024-06-11T08:03:13.772474
License: Public Domain

2021 IL App (1st) 200338
                                              No. 1-20-0338
                                                                      Fourth Division
                                                                      March 31, 2021
     ______________________________________________________________________________

                                         IN THE
                             APPELLATE COURT OF ILLINOIS
                                     FIRST DISTRICT
     ______________________________________________________________________________

     RAYMOND CAHNMAN,                               )
                                                    )   Appeal from the Circuit Court
            Plaintiff-Appellee,                     )   of Cook County.
                                                    )
     v.                                             )   Nos. 2013 CH 26214
                                                    )          2013 L 11973
     TIMBER COURT LLC; DAVID ZAZOVE; and            )          2014 L 9779
     BARRON DEVELOPMENT, LLC,                       )          (cons.)
                                                    )
            Defendants                              )   The Honorable
                                                    )   Sanjay Tailor,
     (David Zazove,                                 )   Judge Presiding.
            Defendant-Appellant).                   )
     ______________________________________________________________________________

                PRESIDING JUSTICE GORDON delivered the judgment of the court, with opinion.
                Justices Lampkin and Reyes concurred in the judgment and opinion.

                                               OPINION

¶1        Plaintiff Raymond Cahnman and defendant David Zazove were long-time business

       partners who had invested in multiple businesses together until plaintiff discovered that

       defendant had allegedly been engaged in self-dealing and other breaches of his fiduciary duty.

       Plaintiff filed a complaint against defendant, alleging numerous causes of action, and the

       parties engaged in extensive litigation, ultimately culminating in a seven-day bench trial with

       a 136-page opinion by the trial court, in which the court found in plaintiff’s favor on all but

       one count. The trial court entered a total judgment in favor of plaintiff and against defendant
     No. 1-20-0338

        in the amount of $7,719,877.34, which included $2,664,651.10 as punitive damages. After the

        trial court’s judgment, defendant sought to amend his pleadings to add affirmative defenses

        based on the statute of limitations and laches, which the trial court denied. Defendant now

        appeals, claiming that the trial court abused its discretion in denying him leave to amend his

        pleadings. Defendant further claims that the trial court’s judgment was against the manifest

        weight of the evidence because it was internally inconsistent and that the trial court erred in

        awarding plaintiff punitive damages. For the reasons that follow, we affirm.

¶2                                          BACKGROUND

¶3         As noted, the instant litigation was extensive, culminating in a seven-day bench trial with

        a 136-page opinion by the trial court. 1 On appeal, neither party challenges the trial court’s

        factual findings; the only challenge related to the court’s findings is a claim that the findings

        themselves were internally inconsistent. Accordingly, our discussion of the relevant facts

        comes from the trial court’s opinion, unless noted otherwise.

¶4                             I. Plaintiff and Defendant’s Relationship

¶5         Plaintiff and defendant have known each other since 1979, when defendant was assigned

        to work with plaintiff at the Chicago Board of Trade, and plaintiff became defendant’s mentor.

        In the mid- to late-1980s, defendant approached plaintiff about investing in real estate projects.

        Plaintiff was a trader and had no background in real estate, but defendant proposed that plaintiff

        would provide the funds for the various entities and developments, while defendant would

        contribute his time and effort to develop and supervise the projects in exchange for equity.

        This arrangement provided defendant with an incentive to make the projects succeed, as he

        would receive half of the profits without investing any of his personal funds. The projects were

           1
            Indeed, the record on appeal alone consists of over 31,000 pages.
                                                       2
     No. 1-20-0338

        designed to be short term, and defendant was not to receive any salary or fees. Since the 1980s,

        at defendant’s request, plaintiff has invested in at least 10 different projects that defendant, or

        an entity controlled by defendant, was involved in developing.

¶6          Additionally, defendant managed or owned a number of entities in which plaintiff owned

        an interest. Specifically, both plaintiff and defendant were shareholders, members, or partners

        of Timber Court LLC (Timber Court), Lincoln Avenue LP (Lincoln), Water Street

        Development Corp. (Water Street), Tandem Realty Corp. (Tandem), CZ Investors LP (CZ),

        and Jackson Center LLC (Jackson). Timber Court, Lincoln, and Water Street were all involved

        in developing certain parcels of real estate: (1) Timber Court developed a two-building, 72-

        unit residential condominium complex in Arlington Heights, owned and leased 48 of the units,

        and owned an adjacent parcel of land; (2) Lincoln developed and owned a four-story

        commercial building and parking lot in Chicago; and (3) Water Street developed a two-

        building, 85-unit residential condominium complex in Milwaukee, Wisconsin, and owned and

        leased five of the units and their associated boat slips and parking spots. Tandem provided real

        estate management services; when defendant obtained a broker’s license, he used it at Tandem,

        and Tandem served as property manager for Lincoln, Timber Court, and Water Street at various

        times. Jackson owned a commercial building in Chicago and operated a business center with

        an executive suites office facility.

¶7          Defendant was also the sole owner of Tandem Investments, LLC (Tandem Investments),

        Water Street Investment Corporation (Water Street Investment), and Lakeview Executive

        Suites, LLC (LES). However, plaintiff was not aware that defendant owned Tandem

        Investments, Water Street Investment, or LES until 2012.

                                                      3
       No. 1-20-0338

¶8            Defendant drafted the operating agreements for the entities he managed and was

          responsible for their finances. Defendant, who had worked as a certified public accountant at

          one point, also kept accounting records for the entities he managed. Beginning in 1998 or 2000,

          defendant used QuickBooks to keep the records of the entities, and he provided plaintiff with

          the QuickBooks records in 2012 and 2013. Defendant could not recall providing the records to

          plaintiff before 2012, and he had not told plaintiff that he kept track of the entities’ transactions

          in QuickBooks before that point. Defendant did not prepare any formal reports for plaintiff for

          the entities defendant managed, but plaintiff did not ask him to do so. Plaintiff also did not ask

          defendant for financial records on any of their joint real estate development projects.

¶9            In each of the projects developed by defendant, both parties assumed a risk—plaintiff

          risked his money, and defendant risked his time and labor. While defendant’s early projects

          were not successful, plaintiff kept investing with defendant “because he knew [defendant] was

          working hard, and he thought that [defendant] was just having bad luck and that the next project

          would work out for him with the incentive deals they had in place.” At trial, plaintiff’s expert

          calculated that plaintiff contributed at least $18.5 million to the entities managed by defendant,

          most of which was recorded by defendant as loans. Plaintiff’s expert further calculated that

          defendant received “benefits” from these entities totaling at least $3.4 million during the time

          period in which defendant maintained the QuickBooks records.

¶ 10          In 2012, plaintiff began looking into defendant’s management of the entities and related

          properties and hired Edward Reagan, president of Safe Harbor Realty (Safe Harbor), a property

          management company, to investigate. Reagan “discovered that [defendant] had mismanaged

          the entities and properties and benefitted from a number of transactions of which [plaintiff]

          had not been aware or authorized.” For instance, Reagan discovered that a number of the

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       No. 1-20-0338

          entities managed by defendant had been dissolved by the Secretary of State for failure to pay

          the required fees, that defendant had failed to pay real estate taxes or payroll taxes, and that

          there were significant deferred maintenance issues at several properties. Reagan also learned

          that defendant had leased the fourth floor of Lincoln to his solely owned entity, LES, which

          then collected rents from the fourth-floor tenants for his own personal use. He further

          discovered large unauthorized payments to defendant and to defendant’s solely owned entities,

          as well as unauthorized loans among the various entities managed by defendant.

¶ 11         After Reagan’s investigation, defendant turned over control of Timber Court, Lincoln, and

          Water Street to plaintiff at the end of 2012 and resigned his position at Tandem in August

          2013. After defendant turned over control, Safe Harbor, Reagan’s company, became the

          property manager of Timber Court, Lincoln, and Water Street. In 2013, Reagan retained an

          attorney to draft a separation agreement on behalf of plaintiff and the entities previously

          managed by defendant, on the understanding that plaintiff was turning over ownership and

          control of all of the entities other than Jackson. However, the parties could not reach an

          agreement over the terms of the separation agreement, and defendant filed suit against plaintiff

          in August 2013. Defendant also retook control over Timber Court on November 11, 2013, with

          the support of Timber Court’s other two members, Barron Development LLC (Barron

          Development) and Howard Blair. Barron Development’s affiliated property management

          company became the property manager, with defendant serving as a “consultant.”

¶ 12                                           II. Litigation

¶ 13         On November 22, 2013, plaintiff filed suit against Timber Court and its members—

          defendant, Barron Development, and Howard Blair—in case No. 2013-CH-26214. This case

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       No. 1-20-0338

          is the one at issue on appeal. Two other cases were later consolidated with case No. 2013-CH-

          26214, which we discuss only briefly to explain the procedural posture of the case before us.

¶ 14          First, on September 18, 2014, Timber Court, which was controlled by defendant at the

          time, filed suit in case No. 2014-L-9779 against plaintiff, plaintiff’s wife, and Safe Harbor.

          This case was consolidated with case No. 2013-CH-26214, and the trial court later granted

          summary judgment to plaintiff in case No. 2014-L-9779, which resulted in plaintiff gaining

          control of Timber Court and the dissociation of defendant and Barron Development. 2

          Additionally, plaintiff also requested the consolidation of a third case that had previously been

          filed against Lincoln, case No. 2013-L-11973, which was granted on December 30, 2014; in

          the order currently at issue on appeal, the trial court dismissed case No. 2013-L-11973 as moot,

          and no party challenges that dismissal. Finally, on July 31, 2015, 17 owners of condominium

          units at the condominium complex developed by Timber Court were permitted to intervene,

          but they did not proceed to trial on their claims, and in the order currently at issue on appeal,

          the trial court entered judgment against them for want of prosecution.

¶ 15          Turning to case No. 2013-CH-26214, as noted, plaintiff first filed suit on November 22,

          2013. The operative complaint at the time of trial was plaintiff’s fifth amended complaint, so

          we discuss plaintiff’s prior complaints only briefly. The initial complaint contained four

          counts, all focused on Timber Court: (1) count I sought an accounting, (2) count II was for

          breach of fiduciary duty, (3) count III was for breach of contract, and (4) count IV sought an

          injunction ordering defendant to turn over possession of Timber Court’s financial records to

          plaintiff. On December 31, 2013, defendant filed an answer and affirmative defenses. Among

              2
              Plaintiff also settled with Blair on August 10, 2015, which resulted in plaintiff’s acquiring any
          ownership interest Blair had in Timber Court.
                                                           6
       No. 1-20-0338

          his affirmative defenses was the defense of laches, in which defendant claimed that, from the

          fourth quarter of 2012 until November 2013, plaintiff “had unfettered and complete control

          and access to Timber Court’s books and records” but chose to refrain from filing suit for almost

          a year, which prejudiced defendant.

¶ 16          Plaintiff filed an amended complaint on January 31, 2014, amending count IV to now seek

          foreclosure of an equitable mortgage on Timber Court. On March 25, 2014, plaintiff filed a

          second amended complaint containing 10 counts, still focusing solely on Timber Court. On

          May 28, 2014, defendant filed an answer to the second amended complaint, again raising

          laches as an affirmative defense, containing identical allegations as in his affirmative defense

          to the original complaint.

¶ 17          On October 14, 2014, plaintiff filed a third amended complaint. While the third amended

          complaint, like the previous complaints, contained allegations concerning Timber Court, the

          third amended complaint for the first time added allegations of fraud and breach of fiduciary

          duty with respect to defendant’s involvement in Lincoln, Water Street, Tandem, and CZ. As

          part of a fraud count, plaintiff alleged that defendant failed to disclose material facts to plaintiff

          about these entities, including (1) numerous unauthorized loans, disbursements, and cash

          transfers; (2) the mismanagement of Timber Court; (3) the improper diversion of funds to LES,

          defendant’s solely owned entity; (4) the unauthorized and improper diversion of funds to Water

          Street Investment; (5) defendant’s purchasing several units at Water Street at below-market

          rates; and (6) the unauthorized disbursements from CZ to defendant, while failing to make

          pro rata distributions to plaintiff. Plaintiff alleged that he reasonably relied on defendant to

          disclose to him all material facts and that defendant’s omissions and misrepresentations

          damaged him.

                                                          7
       No. 1-20-0338

¶ 18         On December 1, 2014, defendant filed an answer to the third amended complaint.

          Defendant did not assert any new defenses but merely provided: “Defendants hereby

          incorporate and stand on their previously pled affirmative defenses and counterclaims which

          [plaintiff] has answered.” Defendant, along with Timber Court, also filed a motion to dismiss

          the third amended complaint. As to the fraud count, defendant alleged that the complaint failed

          to allege sufficiently specific facts to support a claim of fraud. The motion to dismiss did not

          seek dismissal of the breach of fiduciary duty count concerning Lincoln, Water Street, Tandem,

          and CZ and only alleged that the breach of fiduciary duty count concerning Timber Court did

          not contain sufficient facts to state a cause of action. The motion to dismiss was granted in part

          and denied in part, with the court finding that plaintiff had alleged sufficient facts to support a

          cause of action for fraudulent concealment and a cause of action for breach of fiduciary duty

          based on defendant’s self-dealing.

¶ 19         On September 11, 2015, plaintiff filed a fourth amended complaint. As with the third

          amended complaint, the fourth amended complaint included counts for breach of fiduciary

          duty and fraud with respect to the entities managed by defendant. On October 30, 2015,

          defendant filed an answer, which did not allege any new affirmative defenses but again merely

          provided: “Defendants hereby incorporate and stand on their previously pled affirmative

          defenses and counterclaims which [plaintiff] has answered.” Additionally, defendant sought to

          dismiss the complaint but only claimed that the count for breach of fiduciary duty concerning

          Timber Court failed to allege sufficient facts to state a cause of action. The motion to dismiss

          did not seek dismissal of the breach of fiduciary duty counts concerning the other entities and

          did not seek dismissal of the portion of the fraud count that alleged fraudulent concealment.

          The motion to dismiss was granted in part and denied in part, with the trial court finding that

                                                        8
       No. 1-20-0338

          plaintiff had sufficiently alleged facts stating a cause of action for breach of fiduciary duty with

          respect to Timber Court.

¶ 20          On January 16, 2016, plaintiff filed a fifth amended complaint, which contained a total of

          16 counts and was the operative complaint at the time of trial. The counts that proceeded to

          trial were (1) count II, for breach of fiduciary duty against defendant and Barron Development

          with respect to Timber Court; (2) count IV, for fraudulent concealment against defendant with

          respect to Timber Court, Lincoln, Water Street, Tandem, and CZ; (3) count IX, for breach of

          fiduciary duty against defendant with respect to Tandem, Lincoln, Water Street, and CZ;

          (4) count X, for removal of defendant from Tandem; (5) count XII, for recoupment of attorney

          fees advanced to defendant and Barron Development pursuant to an indemnification provision

          in Timber Court’s operating agreement; and (6) count XV, for breach of the operating

          agreement against defendant with respect to Lincoln.

¶ 21          On July 25, 2016, defendant filed an answer to the fifth amended complaint. As with his

          answers to the third and fourth amended complaints, defendant’s answer to the fifth amended

          complaint did not assert any new affirmative defenses but merely provided: “Defendants

          hereby incorporate and stand on their previously pled affirmative defenses and counterclaims

          which [plaintiff] has answered.”

¶ 22                                   III. Trial and Court’s Findings

¶ 23          A bench trial on plaintiff’s fifth amended complaint began on December 3, 2018, and

          concluded on December 12, 2018. A total of 13 witnesses testified concerning defendant’s

          management of the various entities owned and managed by defendant, and as noted, there are

          no challenges to the trial court’s factual findings, other than a claim that its findings were

          internally inconsistent. An overview of the trial court’s factual findings is set forth above, in

                                                         9
       No. 1-20-0338

          our discussion of the facts leading to the instant litigation, so we focus here on the court’s

          conclusions of law as to the counts that proceeded to trial. We discuss each count in the order

          that the trial court did, focusing on the counts relevant to the instant appeal.

¶ 24                               A. Count II: Breach of Fiduciary Duty

¶ 25         Count II was for breach of fiduciary duty against defendant and Barron Development with

          respect to Timber Court. The court found that defendant and Barron Development owed

          plaintiff fiduciary duties both pursuant to the terms of Timber Court’s operating agreement and

          under Illinois law. The court found that defendant breached his fiduciary duties to plaintiff by

          paying himself $395,000 in unauthorized development fees from Timber Court’s funds in

          2005-06. The court found that such fees were not authorized under the operating agreement

          and found that these fees had not been disclosed to plaintiff at the time. The trial court also

          found that defendant had breached his fiduciary duties to plaintiff by issuing $35,000 in

          unauthorized checks from Timber Court’s funds that he could not explain and by paying

          himself $45,153 from Timber Court’s funds that he could not explain.

¶ 26         The trial court further found that defendant and Barron Development had violated their

          fiduciary duties to plaintiff when they entered into a property management agreement with

          Barron Development’s affiliated property management company and by causing defendant to

          be hired as a consultant. The court found that the rate of payment to the property management

          company was unreasonably high and that the consulting agreement paid defendant $2500 per

          month “for little work that benefitted Timber Court.” The court further found that defendant

          and Barron Development violated their fiduciary duties to plaintiff by causing Timber Court

          to pay defendant leasing commissions because such commissions were not authorized by the

          operating agreement, there was no other written agreement providing for the payment of

                                                        10
       No. 1-20-0338

          commissions, and Timber Court’s onsite manager handled nearly all of the work of leasing

          Timber Court’s units. The court found that defendant and Barron Development had failed to

          prove that the property management fees, consulting payments, and leasing commissions were

          fair and reasonable to Timber Court and plaintiff and found that the total amount of these fees

          was $226,428. The court noted that plaintiff was especially injured by these breaches because

          Timber Court was insolvent and could not repay plaintiff’s loans and the amounts defendant

          and Barron Development wrongfully diverted were funds that should have been used to repay

          plaintiff’s loans.

¶ 27          Finally, the court found that defendant breached his fiduciary duty by mismanaging Timber

          Court, including by failing to pay bills in a timely fashion, failing to pay property and payroll

          taxes, and allowing Timber Court to be involuntarily dissolved by the Secretary of State. The

          court further found that defendant wrongfully diverted to himself or to his entities the self-

          dealing payments that we have explained in previous paragraphs.

¶ 28          As damages, the court found that defendant’s and Barron Development’s breaches of their

          fiduciary duties “were sufficiently egregious to warrant a complete forfeiture of all benefits

          that they received.” The court found that plaintiff had suffered compensatory damages in the

          total amount of $701,581.50. The court further found that Barron Development was jointly and

          severally liable for the breaches involving the property management fees and defendant’s

          leasing commissions, in the total amount of $226,428.50. The court also ordered defendant to

          disgorge all commissions and management fees paid to himself or to his solely owned entities

          from the funds of Timber Court, in the amount of $236,887. Finally, the court found that

          defendant and Barron Development had previously been dissociated from Timber Court in

          April 2018 following summary judgment on several counts of the complaint. However, the

                                                       11
       No. 1-20-0338

          court found that, “[i]f that ruling is overturned on appeal,” defendant and Barron Development

          should be expelled from Timber Court for their breaches of fiduciary duty.

¶ 29                              B. Count IX: Breach of Fiduciary Duty

¶ 30         Count IX was against defendant for breach of fiduciary duty with respect to Tandem,

          Lincoln, Water Street, and CZ. While the trial court separately discussed each entity, we

          provide an overview of the court’s findings more generally.

¶ 31         The court found that defendant owed plaintiff fiduciary duties with respect to each entity,

          pursuant to each entity’s operating agreement and under Illinois law. However, the court found

          that defendant breached these fiduciary duties in several ways.

¶ 32         First, the court found that defendant breached his fiduciary duties by paying himself fees

          that were not authorized by the entities’ operating agreements and to which plaintiff did not

          consent. Specifically, defendant distributed $60,000 from Lincoln to himself as a development

          fee and caused Water Street to pay defendant’s solely owned entities (Water Street Investment

          and Tandem Investments) development fees of $210,000 and $462,000, respectively.

          Defendant also paid himself $31,688 from Lincoln that he could not explain.

¶ 33         Next, the court found that defendant made distributions to himself in cash, without making

          those same distributions to plaintiff. With respect to Lincoln, defendant distributed $32,000 in

          cash to himself, while listing plaintiff’s $32,000 as a loan from plaintiff to Timber Court, which

          the trial court found was “involuntary and unapproved.” Similarly, defendant paid himself

          $47,500 in cash distributions from Water Street between 2006 and 2012, without paying

          plaintiff his pro rata share in cash, instead recording increases to plaintiff’s loan accounts

          without informing plaintiff. With respect to CZ, defendant distributed $54,500 in cash to

          himself from CZ and recorded a $54,500 as a loan back to CZ from plaintiff.

                                                       12
       No. 1-20-0338

¶ 34         The court also found that defendant transferred funds between the various entities without

          authorization. For instance, defendant caused CZ to pay $18,625 to Jackson and recorded that

          as a decrease in plaintiff’s loan to CZ. Additionally, defendant distributed $57,000 from

          Tandem to his solely owned entity, Tandem Investments, and recorded it as a “ ‘loan’ ” to

          Water Street.

¶ 35         Additionally, the court found that defendant engaged in conduct that personally benefited

          himself. With respect to Lincoln, the court found that defendant breached his fiduciary duties

          by secretly creating LES to siphon the rents from the fourth floor of the property owned by

          Lincoln and causing LES to pay him $554,062 in “ ‘owner draw’ ” payments between 2005

          and 2012. The court did not find credible defendant’s justification for the creation of LES,

          finding that “the evidence showed that the LES transaction was not at arm’s length because

          [defendant] was on both sides, and LES simply diverted tenants and corporate opportunities—

          and therefore rent payments—that belonged to Lincoln.” The court further found that “LES

          did not pay all the rent owed under the lease, let alone market rents, and therefore [defendant’s]

          ‘owner’s draw’ payments to himself from LES diverted funds that properly belonged to

          Lincoln.”

¶ 36         Furthermore, with respect to Lincoln, defendant on one occasion obtained a $10,000

          personal credit toward a sectional sofa in lieu of back rent that a furniture store owed to

          Lincoln. With respect to Tandem, defendant paid himself automobile expenses in the amount

          of $68,993.60 from Tandem’s funds. Defendant also paid LES rent in the amount of $31,676

          from Tandem’s funds for an office that defendant used for personal use. With respect to Water

          Street, the court found that defendant secretly purchased four of Water Street’s units for

          himself at a discount; the court found that the discounts totaled $302,230. Defendant also paid

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       No. 1-20-0338

          himself a $16,700 commission for selling one of the units to himself; rented one of the units

          back to Water Street for use as a model apartment and pocketed the rent of $24,700 for himself;

          and used Water Street’s funds for maintenance expenses, condominium association fees, legal

          fees, and insurance fees for the units he owned personally.

¶ 37         Finally, the trial court found that defendant also breached his fiduciary duties by

          mismanaging the properties that the various entities owned or managed. With respect to

          Lincoln, the court found that defendant breached his fiduciary duties by mismanaging Lincoln,

          including by failing to pay bills on time and failing to maintain important building systems.

          The court found that defendant “caused Lincoln to under-invest in regular maintenance and

          upkeep while wrongfully diverting to himself or his entities the self-dealing payments listed

          above.” Defendant’s breaches diverted funds that were necessary for the property’s upkeep,

          requiring plaintiff to “infuse” over $444,000 in additional funds into Lincoln between 2013

          and 2017 to make necessary repairs. Similarly, with respect to Water Street, the court found

          that defendant breached his fiduciary duty by “grossly mismanaging” Water Street, including

          by causing liens to be placed on units for failing to pay assessments and by failing to pay real

          estate taxes in a timely manner. The court found that defendant “caused Water St. to miss these

          payments while wrongfully diverting to himself or his entities the self-dealing payments.”

¶ 38         As damages, the court found that defendant’s breaches of fiduciary duty with respect to

          each entity were “sufficiently egregious to warrant a complete forfeiture of all benefits that he

          received.” As to Lincoln, the court found that defendant’s breaches had cost plaintiff $687,730

          in compensatory damages diverted from Lincoln that plaintiff would not be able to recover

          from Lincoln, ordered defendant to disgorge all commissions and management fees paid to

          himself or to his solely owned entities from Lincoln’s funds, in the amount of $88,146, and

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       No. 1-20-0338

          ordered his expulsion from Lincoln. As to Water Street, the court found that defendant’s

          breaches cost plaintiff $1,063,170 in compensatory damages diverted from Water Street’s

          funds and also ordered defendant to disgorge all commissions and management fees paid to

          himself or to his solely owned entities from Water Street’s funds, in the amount of $18,070.

          As to CZ, the court found that defendant’s breaches caused plaintiff $73,125 in damages and

          also ordered that defendant be expelled as a partner in CZ. Finally, as to Tandem, the court

          found that defendant’s breaches caused plaintiff damages in the amount of $157,669.60. The

          court found that defendant had resigned his position as president of Tandem in 2012 and did

          not presently hold any officer position with Tandem but found that defendant should be

          removed as an officer and director. Finally, the court found that, “[a]s a remedy for

          [defendant’s] persistent looting of Tandem,” defendant was ordered to disgorge his 50%

          interest in the company.

¶ 39                                        C. Count IV: Fraud

¶ 40         Count IV was against defendant for fraud with respect to Timber Court, Lincoln, Water

          Street, Tandem, and CZ. In setting out the legal standard, the trial court noted that a claim for

          fraudulent concealment required the plaintiff to prove justified reliance on the defendant’s

          alleged concealment. The court found that plaintiff’s claim failed because he was unable to

          prove justified reliance, finding that “[h]ad [plaintiff] exercised ordinary diligence over the

          course of his decades-long real estate development partnership with [defendant] he would have

          easily discovered [defendant’s] wrongdoing.” However, the court found that while defendant

          had contemporaneously recorded the money he took, plaintiff “never bothered to examine the

          books and records” of the entities defendant managed. The court noted that the failure to

          inquire was particularly significant because the real estate development projects that they

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       No. 1-20-0338

          partnered on failed, and plaintiff was “highly successful and sophisticated in business.” The

          court found that “the only reason [defendant] was able to commit defalcations for more than

          two decades is because [plaintiff] did nothing to monitor his joint investments with

          [defendant].” (Emphasis in original.)

¶ 41         The court further found that plaintiff “did nothing when he learned of [defendant’s]

          defalcations,” noting that plaintiff did not request the QuickBooks records until late 2012, long

          after he learned about some of the fees that defendant was paying himself. The court also noted

          that defendant did nothing to prevent plaintiff from discovering his conduct, all of which was

          recorded. The court found that “[t]he law does not permit [plaintiff] to claim fraud when he

          failed to make reasonable inquiry into his joint investments with [defendant], and [defendant]

          did nothing to prevent [plaintiff] from ascertaining the truth of his defalcations.” Accordingly,

          the trial court entered judgment in defendant’s favor on the fraud count.

¶ 42                                       D. Punitive Damages

¶ 43         The court then considered whether punitive damages were appropriate with respect to

          counts II and IX, the counts concerning breaches of fiduciary duty. The court found that

          defendant’s self-dealing fiduciary breaches warranted punitive damages. Additionally, the

          court found that punitive damages were appropriate due to defendant’s “egregious conduct” in

          several other instances.

¶ 44         First, the court found that, in 2016, defendant gave his law firm at the time a security

          interest in the real estate owned by Timber Court as security for defendant’s outstanding legal

          bills. Defendant did so despite the fact that the parties were involved in litigation at the time

          and in violation of a January 12, 2014, “Protocol for Special Administrator” order (protocol

          order) that set forth a process that Timber Court and defendant were required to follow before

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       No. 1-20-0338

          Timber Court could pay any of Timber Court’s or defendant’s legal fees. 3 The court found that

          there was no corporate resolution or document authorizing defendant to have a mortgage

          placed on Timber Court’s real estate and that plaintiff and Barron Development did not know

          about the mortgage until they learned about it through counsel after the fact. The court found

          that the mortgage transaction “constituted an attempted end-run around the Protocol Order and

          violated that order.”

¶ 45         In support of an award of punitive damages, the court also pointed to a February 2015

          common interest agreement with Timber Court’s unit owners in which defendant purported to

          agree on behalf of Timber Court never to “ ‘deconvert’ ” the condominium units into rental

          units without the agreement of the other unit owners, despite defendant’s acknowledgment that

          deconversion made financial sense for the project. Most of these unit owners subsequently

          intervened in the instant litigation. Finally, the court pointed to “various intercompany loans

          among [the entities managed by defendant] and other entities, including Jackson” in support

          of a punitive damages award.

¶ 46         The court noted that plaintiff sought treble damages due to defendant’s “egregious self-

          dealing” but found that treble damages were excessive, given that the court had ordered

          complete forfeiture of everything defendant took during the period of his breach. The court

          noted that one purpose of punitive damages is to deter wrongful conduct and that it viewed

          forfeiture “as a type of punitive damage.” The court found that “[w]hen a fiduciary is ordered

          to forfeit all benefits he received, as [defendant] and Barron [Development] are ordered to here,

             3
               The Timber Court operating agreement contained an indemnification provision that was the basis
          for Timber Court’s payment of the attorney fees.
                                                        17
       No. 1-20-0338

          there is some element of a windfall to the beneficiary. Thus, complete forfeiture of

          management fees is already punitive.”

¶ 47         The court further found that “the credible evidence shows that [plaintiff] knew about at

          least some of [defendant’s] self-help payments but did not object.” The court also found that

          plaintiff “did not deal fairly with [defendant] in at least one instance,” noting that at trial,

          plaintiff indicated that he planned to pursue a loan to defendant that had previously been

          forgiven. Consequently, the court imposed single (1:1) punitive damages against defendant as

          a result of his breaches.

¶ 48                   E. Summary of Trial Court’s Findings and Award of Damages

¶ 49         In sum, the trial court’s findings are as follows:

¶ 50         With respect to count II, for breach of fiduciary duty against defendant and Barron

          Development with respect to Timber Court, the trial court entered judgment in favor of

          plaintiff. The total judgment against defendant was in the amount of $938,468.50, and the

          judgment against Barron Development was $226,428.50.

¶ 51         With respect to count IV, for fraudulent concealment against defendant with respect to

          Timber Court, Lincoln, Water Street, Tandem, and CZ, the trial court entered judgment in

          favor of defendant.

¶ 52         With respect to count IX, for breach of fiduciary duty against defendant with respect to

          Tandem, Lincoln, Water Street, and CZ, the court entered judgment in favor of plaintiff. The

          total judgment against defendant was in the amount of $2,087,910.60. The trial court also

          ordered defendant’s expulsion from Lincoln and CZ and ordered defendant to disgorge his

          50% interest in Tandem.

                                                       18
       No. 1-20-0338

¶ 53         With respect to count X, for removal of defendant from Tandem, the court entered

          judgment in favor of plaintiff.

¶ 54         With respect to count XII, for recoupment of attorney fees advanced to defendant and

          Barron Development pursuant to the indemnification provision in Timber Court’s operating

          agreement, the court entered judgment in favor of plaintiff. The court ordered defendant to

          repay to Timber Court $562,154.54 in attorney fees paid on defendant’s behalf, and ordered

          Barron Development to repay to Timber Court $250,084.33 in attorney fees paid on Barron

          Development’s behalf.

¶ 55         With respect to count XV, for breach of the operating agreement against defendant with

          respect to Lincoln, the court entered judgment in favor of plaintiff. The court entered judgment

          against defendant in the amount of $687,730 but found that these damages were concurrent to,

          and not cumulative to, the damages awarded with respect to defendant’s breaches of fiduciary

          duty.

¶ 56         The court also awarded punitive damages in the amount of $2,664,651.10, and awarded

          prejudgment interest of 5%, which totaled $1,466,692.60.

¶ 57         The trial court entered a total judgment in favor of plaintiff and against defendant in the

          amount of $7,719,877.34.

¶ 58         The court also entered judgment in favor of plaintiff and against Barron Development in

          the amount of $476,512.83, with the $226,428.50 judgment on count II being joint and several

          with defendant.

¶ 59         Finally, the court dismissed case No. 14-L-9779 against the 17 intervening unit owners and

          dismissed as moot case No. 13-L-11973.

                                                      19
       No. 1-20-0338

¶ 60                                  IV. Motion to Amend Pleadings

¶ 61         On October 16, 2019, defendant filed a motion for reconsideration, which was amended on

          October 29, 2019. As part of his motion for reconsideration, defendant argued that the trial

          court erred because it “failed to adjudicate” defendant’s affirmative defense of laches and that

          all transactions prior to November 22, 2008, should be precluded on the basis of laches.

¶ 62         On October 29, 2019, defendant filed a motion for leave to file an affirmative defense to

          conform his pleadings to the proofs at trial pursuant to section 2-616 of the Code of Civil

          Procedure (Code) (735 ILCS 5/2-616 (West 2018)). Defendant sought to add a statute of

          limitations defense, contending that plaintiff’s claims were time-barred. Defendant claimed

          that plaintiff would not be prejudiced by such an amendment, as defendant’s laches defense

          also addressed the issue of timeliness and the dates of the allegedly wrongful transactions were

          uncontroverted.

¶ 63         On October 30, 2019, the trial court denied defendant’s motion to amend his pleadings.

¶ 64         On November 26, 2019, in response to defendant’s motion for reconsideration, plaintiff

          claimed that defendant had failed to advance his affirmative defenses at trial or in posttrial

          briefing and that, even if properly presented, his laches defense would have failed. In his reply,

          defendant contended that he had established the elements of his laches defense.

¶ 65         On January 7, 2020, defendant filed a motion for leave to amend his laches defense to

          conform to the proofs at trial pursuant to section 2-616 of the Code.

¶ 66         On January 16, 2020, the trial court denied defendant’s motion for leave to amend his

          defense.

                                                       20
       No. 1-20-0338

¶ 67         Finally, on January 21, 2020, the trial court denied defendant’s motion for reconsideration.

          Defendant filed a notice of appeal on February 18, 2020, and this appeal follows. 4

¶ 68                                              ANALYSIS

¶ 69         On appeal, defendant claims that the trial court erred in denying his motion to amend his

          pleadings to permit defendant to raise the statute of limitations and laches as defenses.

          Defendant also claims that the trial court’s opinion was internally inconsistent, and that the

          court erred in awarding punitive damages.

¶ 70                                     I. Amendment of Pleadings

¶ 71         Defendant first claims that the trial court erred in denying his motion to amend his

          pleadings. Section 2-616(c) of the Code provides that “[a] pleading may be amended at any

          time, before or after judgment, to conform the pleadings to the proofs.” 735 ILCS 5/2-616(c)

          (West 2018). Section 2-616(c) is to be liberally construed so that cases are decided on their

          merits, not on procedural technicalities. Pry v. Alton & Southern Ry. Co., 233 Ill. App. 3d 197,

          213 (1992). However, where an amendment is made to conform the pleadings to the proof, the

          amendment will not be allowed unless the evidence already produced supports the amendment.

          Pry, 233 Ill. App. 3d at 213. The decision to allow an amendment to a pleading rests within

          the sound discretion of the trial court, and we will not reverse the trial court’s decision absent

          an abuse of that discretion. Axion RMS, Ltd. v. Booth, 2019 IL App (1st) 180724, ¶ 26. “A trial

          court abuses its discretion when no reasonable person would take the view adopted by the trial

          court.” Axion RMS, 2019 IL App (1st) 180724, ¶ 26. To determine whether a trial court has

          abused its discretion, we look to the four factors set out by our supreme court: “(1) whether the

          proposed amendment would cure the defective pleading; (2) whether other parties would

             4
              Plaintiff filed a notice of cross-appeal on February 28, 2020, but later withdrew the cross-appeal.
                                                         21
       No. 1-20-0338

          sustain prejudice or surprise by virtue of the proposed amendment; (3) whether the proposed

          amendment is timely; and (4) whether previous opportunities to amend the pleading could be

          identified.” Loyola Academy v. S&S Roof Maintenance, Inc., 146 Ill. 2d 263, 273 (1992).

¶ 72         In the case at bar, we cannot find that the trial court abused its discretion in denying

          defendant leave to amend his answer to assert defenses based on the statute of limitations and

          laches. Defendant spends much of his brief focused on the first factor, whether the defenses

          would have been successful. However, we need not decide whether the defenses would have

          been successful because the other three factors weigh strongly against permitting amendment,

          so we cannot find that the trial court’s denial of defendant’s motions was an abuse of discretion.

¶ 73         As to timeliness, the amendment occurred after trial—indeed, after the trial court’s

          judgment. Moreover, defendant had numerous opportunities to amend his defenses prior to that

          point. Plaintiff filed a total of six complaints—the original complaint and five amendments—

          and defendant could have asserted his defenses at any of those times. Instead, defendant waited

          until the last possible moment to raise his defenses. This delay was also prejudicial to plaintiff

          because it deprived him of any ability to provide evidence as to these defenses.

¶ 74         Defendant claims that he could not have raised his defenses any earlier because it was not

          until the trial court entered judgment in his favor on the fraud count that he was able to raise a

          statute of limitations defense. We do not find this argument persuasive. Defendant’s argument

          is premised on the theory that “the very nature of affirmative defenses requires the court to

          view a plaintiff’s allegation as true,” so defendant was unable to raise a statute of limitations

          defense so long as there was a count for fraudulent concealment asserted by plaintiff. However,

          this argument improperly conflates the requirements of an affirmative claim of fraud with the

          requirements for tolling a statute of limitations due to fraudulent concealment.

                                                       22
       No. 1-20-0338

¶ 75          In Illinois, common law fraud includes claims of fraudulent misrepresentation. Schrager v.

          North Community Bank, 328 Ill. App. 3d 696, 703 (2002). The concealment of a fact may be

          actionable as a fraudulent misrepresentation. Schrager, 328 Ill. App. 3d at 706. In order to

          show fraudulent concealment, a plaintiff must prove “that the defendant concealed a material

          fact when he was under a duty to disclose that fact to plaintiff.” Connick v. Suzuki Motor Co.,

          174 Ill. 2d 482, 500 (1996). A duty to disclose a material fact can arise under several

          circumstances, including when plaintiff and defendant “are in a fiduciary or confidential

          relationship” or in a situation where “plaintiff places trust and confidence in defendant, thereby

          placing defendant in a position of influence and superiority over plaintiff. [Citations.] This

          position of superiority may arise by reason of friendship, agency, or experience.” Connick, 174

          Ill. 2d at 500.

¶ 76          “[I]n order for a plaintiff to prove that the concealment of a fact was a fraudulent

          misrepresentation, he must prove: ‘(1) the concealment of a material fact; (2) the concealment

          was intended to induce a false belief, under circumstances creating a duty to speak [citation];

          (3) the innocent party could not have discovered the truth through a reasonable inquiry or

          inspection, or was prevented from making a reasonable inquiry or inspection, and relied upon

          the silence as a representation that the fact did not exist; (4) the concealed information was

          such that the injured party would have acted differently had he been aware of it; and (5) that

          reliance by the person from whom the fact was concealed led to his injury.’ ” Schrager, 328

          Ill. App. 3d at 706-07 (quoting Stewart v. Thrasher, 242 Ill. App. 3d 10, 16 (1993)).

¶ 77          By contrast, fraudulent concealment in the context of the statute of limitations means that

          the statute of limitations will be tolled if the plaintiff pleads and proves that fraud prevented

          discovery of the cause of action. Henderson Square Condominium Ass’n v. LAB Townhomes,

                                                       23
       No. 1-20-0338

          LLC, 2015 IL 118139, ¶ 36. Under section 13-215 of the Code, “[i]f a person liable to an action

          fraudulently conceals the cause of such action from the knowledge of the person entitled

          thereto, the action may be commenced at any time within 5 years after the person entitled to

          bring the same discovers that he or she has such cause of action, and not afterwards.” 735 ILCS

          5/13-215 (West 2018). Generally, “the concealment necessary to toll the statute of limitations

          must consist of affirmative acts or representations calculated to lull or induce a plaintiff into

          delaying the filing of his claim or preventing him from discovering the claim.” Henderson

          Square, 2015 IL 118139, ¶ 38 (citing Orlak v. Loyola University Health System, 228 Ill. 2d 1,

          18 (2007)). In the context of the statute of limitations, the fraudulent concealment is not a cause

          of action in and of itself but is “an exception to the limitations period imposed on other,

          underlying causes of action.” Doe No. 2 v. Boy Scouts of America, 2016 IL App (1st) 152406,

          ¶ 80 (citing Cangemi v. Advocate South Suburban Hospital, 364 Ill. App. 3d 446, 459 (2006)).

¶ 78         In the case at bar, there is nothing that prevented defendant from raising a statute of

          limitations defense merely because plaintiff alleged that defendant had fraudulently concealed

          his actions in managing the various entities. Even if defendant were required to admit the truth

          of plaintiff’s factual allegations, tolling of the statute of limitations would not automatically

          follow, unless plaintiff was able to establish that defendant’s actions concealed the cause of

          action itself. See Henderson Square, 2015 IL 118139, ¶ 36. Moreover, the statute of limitations

          is not tolled under section 13-215 when the plaintiff could have discovered the concealed

          information through ordinary diligence. Dancor International, Ltd. v. Friedman, Goldberg &

          Mintz, 288 Ill. App. 3d 666, 676 (1997). Thus, even if defendant felt bound by plaintiff’s

          allegations, he nevertheless could have raised the statute of limitations defense by claiming

          that plaintiff should have discovered his causes of action earlier. We simply find no support

                                                        24
       No. 1-20-0338

          for defendant’s suggestion that plaintiff included the fraud count purposely to prevent

          defendant from asserting a statute of limitations defense, as that defense could have been raised

          earlier.

¶ 79          We are similarly unpersuaded by defendant’s contention that plaintiff could not have been

          prejudiced because defendant had, in fact, asserted a laches defense. This argument completely

          misrepresents the nature of defendant’s laches defense. The defense, which was first raised in

          response to plaintiff’s original complaint, alleged that, from the fourth quarter of 2012 until

          November 2013, plaintiff “had unfettered and complete control and access to Timber Court’s

          books and records” but chose to refrain from filing suit for almost a year, which prejudiced

          defendant. In other words, defendant’s laches defense alleged that the “clock” on the causes of

          action involving Timber Court should have started in the fourth quarter of 2012. Defendant’s

          defense contains absolutely no allegations that plaintiff should have discovered defendant’s

          self-dealing prior to 2012, as he now argues. We also note that, even though plaintiff amended

          his complaint five times, resulting in six complaints in all, defendant never updated his defense

          to address the new allegations. Indeed, in his last three answers, defendant merely provided:

          “Defendants hereby incorporate and stand on their previously pled affirmative defenses and

          counterclaims which [plaintiff] has answered.” Defendant did so despite the fact that those

          three complaints—the third, fourth, and fifth amended complaints—included for the first time

          allegations concerning entities other than Timber Court. Defendant also did not raise his laches

          defense at trial or in posttrial briefing. Defendant’s contention that plaintiff was on notice that

          the timeliness of the claims were at issue is therefore completely unsupported by the factual

          record.

                                                        25
       No. 1-20-0338

¶ 80         Finally, we find unpersuasive defendant’s reliance on cases that he claims are similar to

          the case at bar, as none of the cases cited by defendant bear any relation to the situation present

          here. For instance, in Miller v. Pinnacle Door Co., 301 Ill. App. 3d 257, 258 (1998), the

          plaintiff was injured when operating a garage door opener installed by the defendant and filed

          a lawsuit alleging negligence. During trial, and prior to the plaintiff resting her case, the

          defendant was granted leave to amend its pleadings to assert a defense of contributory

          negligence. Miller, 301 Ill. App. 3d at 258. On appeal, the appellate court agreed with the trial

          court that the plaintiff was not surprised by the amendment because it was her conduct and her

          testimony that gave rise to the contributory negligence defense. Miller, 301 Ill. App. 3d at 261.

¶ 81         Additionally, in Mapes v. Kalva Corp., 68 Ill. App. 3d 362, 364 (1979), the plaintiff filed

          a lawsuit against the defendant for breach of an employment contract. During trial, the

          plaintiff’s evidence showed that the plaintiff did not have any proof of a written contract, and,

          at the close of the plaintiff’s case-in-chief, the defendant filed a motion to amend his answer

          to include a defense based on the statute of frauds, which the trial court denied. Mapes, 68 Ill.

          App. 3d at 365. On appeal, the appellate court reversed the trial court, finding that the trial

          court abused its discretion in denying leave to amend because the complaint that proceeded to

          trial had alleged facts to which the statute of frauds would not apply, meaning that it was not

          until after plaintiff had presented his case that the defendant was in a position to assert the

          defense. Mapes, 68 Ill. App. 3d at 366-67. The appellate court also noted that the defendant

          had raised the defense in a motion to dismiss an earlier version of the plaintiff’s complaint and

          that the plaintiff’s attorney admitted that he was not surprised that the issue was raised during

          trial. Mapes, 68 Ill. App. 3d at 367.

                                                        26
       No. 1-20-0338

¶ 82          In the case at bar, however, there was little indication prior to trial, or during trial, that the

          timeliness of plaintiff’s claims would be at issue. While defendant raised the defense of laches

          in his affirmative defenses, as explained above, that defense was narrow, concerning only the

          allegation that plaintiff should have known about defendant’s conduct with respect to Timber

          Court no later than the end of 2012. Defendant never expanded that defense to include any

          allegations that plaintiff should have known about defendant’s self-dealing prior to 2012, nor

          did he ever include allegations about any entity other than Timber Court. Defendant also did

          not raise the defense during the trial itself, presenting no evidence concerning the timeliness

          issue and making no arguments on the issue. Thus, for all intents and purposes, defendant

          abandoned the issue of timeliness. Moreover, the theory on which plaintiff proceeded to trial

          did not change during the trial, as in Mapes, meaning that defendant was well able to raise his

          defenses prior to trial. Consequently, we cannot find that defendant’s cases suggest that the

          trial court abused its discretion in the case at bar, and accordingly, we find that the trial court

          did not abuse its discretion in denying defendant leave to amend his answer to include the new

          affirmative defenses. 5

¶ 83                                        II. Inconsistent Findings

¶ 84          Defendant next claims that the trial court’s judgment was against the manifest weight of

          the evidence because its findings were inconsistent. In a bench trial, the trial court has the

          opportunity to weigh the evidence and make findings of fact, and a reviewing court will defer

          to the findings of the trial court unless they are against the manifest weight of the evidence.

          Eychaner v. Gross, 202 Ill. 2d 228, 251 (2002). “A decision is against the manifest weight of

              5
               We note that defendant also cites Luciani v. Bestor, 106 Ill. App. 3d 878 (1982). In his reply
          brief, defendant explains that he cited this case to show that amendment of the complaint could be
          made even at the appellate level. However, this case adds nothing to defendant’s argument, as no
          motion for leave to amend was even made in that case.
                                                          27
       No. 1-20-0338

          the evidence only when an opposite conclusion is apparent or when the findings appear to be

          unreasonable, arbitrary, or not based on the evidence.” Eychaner, 202 Ill. 2d at 252. “A

          reviewing court should not overturn a trial court’s findings merely because it does not agree

          with the lower court or because it might have reached a different conclusion had it been the

          fact finder.” Bazydlo v. Volant, 164 Ill. 2d 207, 214 (1995). A reviewing court has only a cold

          record in which to govern its decision-making process. See Racky v. Belfor USA Group, Inc.,

          2017 IL App (1st) 153446, ¶ 107. Accordingly, “ ‘[t]he court on review must not substitute its

          judgment for that of the trier of fact.’ ” Eychaner, 202 Ill. 2d at 252 (quoting Kalata v.

          Anheuser-Busch Cos., 144 Ill. 2d 425, 434 (1991)).

¶ 85         In the case at bar, defendant claims that the trial court’s findings as to the fraud count and

          its findings as to the breach of fiduciary duty counts were inconsistent. Specifically, he claims

          that the trial court’s findings as to plaintiff’s diligence when analyzing the fraud count mean

          that plaintiff’s breach of fiduciary duty counts should have failed, as well.

¶ 86         As noted, to prove his fraud count, plaintiff was required to prove (1) the concealment of

          a material fact; (2) the concealment was intended to induce a false belief, under circumstances

          creating a duty to speak; (3) the innocent party could not have discovered the truth through a

          reasonable inquiry or inspection, or was prevented from making a reasonable inquiry or

          inspection, and relied upon the silence as a representation that the fact did not exist; (4) the

          concealed information was such that the injured party would have acted differently had he been

          aware of it; and (5) that reliance by the person from whom the fact was concealed led to his

          injury. Schrager, 328 Ill. App. 3d at 706-07. The trial court found that plaintiff had failed to

          prove the element of justified reliance, finding that plaintiff would have been able to discover

          defendant’s wrongdoing if plaintiff had exercised ordinary diligence. The court further found

                                                       28
       No. 1-20-0338

          that “the only reason [defendant] was able to commit defalcations for more than two decades

          is because [plaintiff] did nothing to monitor his joint investments with [defendant].” (Emphasis

          in original.)

¶ 87          With respect to the breach of fiduciary duty counts, plaintiff was required to prove (1) that

          a fiduciary duty existed, (2) that the fiduciary duty was breached, and (3) that the breach caused

          the injury of which plaintiff complains. Neade v. Portes, 193 Ill. 2d 433, 444 (2000). Defendant

          contends that the trial court’s finding that “the only reason [defendant] was able to commit

          defalcations for more than two decades is because [plaintiff] did nothing to monitor his joint

          investments with [defendant]” (emphasis in original) when discussing the fraud claim means

          that plaintiff could not establish causation with respect to his fiduciary duty claims. Instead,

          defendant claims that the trial court’s finding showed that plaintiff was the intervening cause

          of his own injury. We do not find this argument persuasive.

¶ 88          First, diligence is not an element of a breach of fiduciary duty claim, so a finding that

          plaintiff was not diligent in monitoring his accounts does not preclude the fiduciary duty claim.

          Additionally, fraud claims are subjected to a heightened pleading standard, requiring proof by

          clear and convincing evidence (Schrager, 328 Ill. App. 3d at 703), meaning that the trial court’s

          findings as to the fraud count merely indicate that plaintiff’s evidence did not rise to this level.

          Most importantly, defendant’s argument misses the point of the trial court’s findings and would

          lead to an entirely absurd result if we accepted it. In its findings on the fraud count, the trial

          court was simply saying that if plaintiff had been paying attention, plaintiff could have stopped

          defendant’s wrongdoing at a much earlier point. That is a far cry from finding that plaintiff

          caused his own injury. Under defendant’s theory, it is not his egregious self-dealing that caused

                                                        29
       No. 1-20-0338

          plaintiff harm, but plaintiff’s own ignorance. This is not an argument the law can accept, and

          it has no basis in the trial court’s findings.

¶ 89          Moreover, “ ‘[t]he test that should be applied in all cases in determining the question of

          proximate cause is whether the first wrongdoer might have reasonably anticipated the

          intervening cause as a natural and probable result of the first party’s own [wrongdoing].’ ”

          Janowiak v. Tiesi, 402 Ill. App. 3d 997, 1011 (2010) (quoting Merlo v. Public Service Co. of

          Northern Illinois, 381 Ill. 300, 317 (1942)); see also First Springfield Bank & Trust v. Galman,

          188 Ill. 2d 252, 257 (1999) (“The test that should be applied in all proximate cause cases is

          whether the first wrongdoer reasonably might have anticipated the intervening efficient cause

          as a natural and probable result of the first party’s own negligence.”). In the case at bar,

          defendant could have reasonably anticipated that plaintiff would have relied on defendant’s

          keeping him informed as to the various entities, given the parties’ fiduciary relationship and

          the fact that the entities were under defendant’s management and plaintiff merely supplied the

          funds. Defendant—as the individual maintaining the records—also would have been aware

          that plaintiff had not requested the records, meaning that defendant would have had knowledge

          that plaintiff was not inspecting the records of the various entities and was therefore relying on

          defendant’s honesty. Accordingly, we cannot find that any lack of diligence on plaintiff’s part

          would rise to the level of being an intervening cause so as to break the chain of causation.

          Therefore, we cannot find that the trial court’s findings on the breach of fiduciary duty claims

          were against the manifest weight of the evidence.

¶ 90                                         III. Punitive Damages

¶ 91          Finally, defendant claims that the trial court erred in awarding plaintiff punitive damages.

          “[W]hen one breaches a fiduciary duty to a principal the appropriate remedy is within the

                                                           30
       No. 1-20-0338

          equitable discretion of the court.” In re Marriage of Pagano, 154 Ill. 2d 174, 190 (1992).

          Punitive damages awards are permitted for a breach of a fiduciary duty. Tully v. McLean, 409

          Ill. App. 3d 659, 670 (2011). “Punitive damages ‘are not awarded as compensation, but serve

          instead to punish the offender and to deter that party and others from committing similar acts

          of wrongdoing in the future.’ ” Slovinski v. Elliott, 237 Ill. 2d 51, 57-58 (2010) (quoting Loitz

          v. Remington Arms Co., 138 Ill. 2d 404, 414 (1990)). They may be awarded “when the

          defendant’s tortious conduct evinces a high degree of moral culpability, that is, when the tort

          is ‘committed with fraud, actual malice, deliberate violence or oppression, or when the

          defendant acts willfully, or with such gross negligence as to indicate a wanton disregard of the

          rights of others.’ ” Slovinski, 237 Ill. 2d at 58 (quoting Kelsay v. Motorola, Inc., 74 Ill. 2d 172,

          186 (1978)). “To determine whether punitive damages are appropriate, ‘the trier of fact can

          properly consider the character of the defendant’s act, the nature and extent of the harm to the

          plaintiff that the defendant caused or intended to cause and the wealth of the defendant.’ ”

          Slovinski, 237 Ill. 2d at 58 (quoting Restatement (Second) of Torts § 908(2) (1979)). However,

          because they are penal in nature, punitive damages are not favored under the law, and courts

          must take caution to ensure that they are not improperly or unwisely awarded. Slovinski, 237

          Ill. 2d at 58.

¶ 92          In the case at bar, defendant does not challenge the imposition of punitive damages in itself

          but challenges the amount of the punitive damages award. “The amount of the award should

          be a reflection of the court’s determination as to the degree of maliciousness evidenced by

          defendants’ actions.” Tully, 409 Ill. App. 3d at 673 (citing Gambino v. Boulevard Mortgage

          Corp., 398 Ill. App. 3d 21, 69 (2009)). We review the computation of the punitive damages

          award “to determine whether the amount was excessive or the result of passion, partiality, or

                                                        31
       No. 1-20-0338

          corruption.” Gambino, 398 Ill. App. 3d at 69 (citing Franz v. Calaco Development Corp., 352

          Ill. App. 3d 1129, 1138 (2004)). “In reviewing [the] determination of the amount of punitive

          damages, if any, we will reverse only if the award was so excessive [as] to indicate passion,

          partiality, or corruption.” (Internal quotation marks omitted.) Gambino, 398 Ill. App. 3d at 69.

          The assessment of punitive damages is a highly factual decision and, as noted, should be a

          reflection of the factfinder’s determination as to the degree of maliciousness evidenced by a

          defendant’s actions. Gambino, 398 Ill. App. 3d at 69.

¶ 93         In the case at bar, the trial court found that defendant’s self-dealing fiduciary breaches

          warranted punitive damages. Additionally, the court found that punitive damages were

          appropriate due to defendant’s “egregious conduct” in several other instances, including an

          unauthorized mortgage of Timber Court to pay defendant’s legal fees, entering into a common

          interest agreement with Timber Court’s unit owners, and making several intercompany loans

          between the various entities. However, the court found that the award of treble damages sought

          by plaintiff was excessive, and instead imposed “single (1:1) punitive damages.”

¶ 94         Defendant claims that the trial court’s award of punitive damages was excessive because

          the trial court did not consider defendant’s net worth in setting the amount. He claims that he

          “did not have a substantial net worth at all,” which indicated that the trial court’s award was

          the result of passion or prejudice. We do not find this argument persuasive.

¶ 95         First, defendant has forfeited this argument by failing to raise it before the trial court, either

          at trial or at any point after trial. See Susman v. North Star Trust Co., 2015 IL App (1st) 142789,

          ¶¶ 41-42 (refusing to consider argument raised for the first time on appeal). Additionally,

          defendant did not present any evidence as to his net worth; the only evidence presented at trial

          was that defendant’s early ventures with plaintiff were unsuccessful and defendant did not earn

                                                        32
       No. 1-20-0338

          significant income from that work. Finally, the trial court did, in fact, impose a lower punitive

          damages award than was sought by plaintiff, indicating that it carefully weighed the evidence

          to determine the appropriate amount of the award. Accordingly, we cannot find that the

          punitive damages award “was so excessive [as] to indicate passion, partiality, or corruption.”

          (Internal quotation marks omitted.) Gambino, 398 Ill. App. 3d at 69.

¶ 96                                          CONCLUSION

¶ 97         For the reasons set forth above, we affirm the trial court’s judgment. First, the trial court

          properly denied defendant leave to amend his answer to assert defenses based on the statute of

          limitations and laches, where defendant first attempted to raise those defenses after the trial

          court had issued its judgment. Second, the trial court’s findings were internally consistent and

          the trial court properly found that defendant had breached his fiduciary duties despite also

          finding that plaintiff had not established his fraud claim. Finally, the trial court’s award of

          punitive damages was not excessive or the result of passion or prejudice.

¶ 98         Affirmed.

                                                       33
No. 1-20-0338

                                  No. 1-20-0338

Cite as:                 Cahnman v. Timber Court LLC, 2021 IL App (1st) 200338

Decision Under Review:   Appeal from the Circuit Court of Cook County, Nos. 2013-CH-
                         26214, 2013-L-11973, 2014-L-9779; the Hon. Sanjay Tailor,
                         Judge, presiding.

Attorneys                Bruce A. Slivnick, of Deerfield, for appellant.
for
Appellant:

Attorneys                Karen L. Levine, Edward W. Feldman, and Alexandra K. Block,
for                      of Miller Shakman Levine & Feldman LLP, of Chicago, for
Appellee:                appellee.

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