Court Opinion

ID: 3148444
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:49:15.498932+00
Date Added: 2024-06-11T09:48:59.639696
License: Public Domain

ILLINOIS OFFICIAL REPORTS
                                         Appellate Court

              A Plus Janitorial Co. v. Group Fox, Inc., 2013 IL App (1st) 120245

Appellate Court            A PLUS JANITORIAL COMPANY, INC., n/k/a A + Janitorial and
Caption                    Supply, Inc., an Illinois Corporation, Plaintiff-Appellant, v. GROUP
                           FOX, INC., an Illinois Corporation, and WOJCIECH RUSIN, an
                           Individual, Defendants-Appellees.

District & No.             First District, Sixth Division
                           Docket No. 1-12-0245

Filed                      March 29, 2013

Held                       The dismissal of a dissolved corporation’s complaint alleging breach of
(Note: This syllabus       contract, breach of an employment agreement and tortious interference
constitutes no part of     with an employment agreement was upheld, notwithstanding the fact that
the opinion of the court   the trial court based its decision on plaintiff’s lack of standing, since the
but has been prepared      dismissal was proper as a matter of law and was upheld on the basis of
by the Reporter of         existing precedent that a dissolved corporation lacks the capacity to sue
Decisions for the          for claims arising after the dissolution.
convenience of the
reader.)

Decision Under             Appeal from the Circuit Court of Cook County, No. 11-L-3501; the Hon.
Review                     Daniel J. Pierce, Judge, presiding.

Judgment                   Affirmed.
Counsel on                  Lucas M. Fuksa and Nathaniel T. Cutler, both of Fuksa Khorshid LLC,
Appeal                      of Chicago, for appellant.

                            Stephen A. Gorman, of Law Offices of Stephen A. Gorman, of Chicago,
                            for appellee Group Fox, Inc.

                            Anthony DeBlasio and David M. Gower, both of DeBlasio & Donnell
                            LLC, of Oak Brook, for appellee Wojciech Rusin.

Panel                       JUSTICE REYES delivered the judgment of the court, with opinion.
                            Presiding Justice Lampkin and Justice Gordon concurred in the judgment
                            and opinion.

                                              OPINION

¶1          Following the dismissal of its complaint with prejudice, plaintiff A Plus Janitorial
        Company (A Plus) now appeals the decision of the trial court. The trial court granted the
        motions to dismiss of the defendants, Group Fox, Inc. (Group Fox), and Wojciech Rusin
        (Rusin), pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West
        2010)). The trial court found that A Plus lacked standing as a dissolved corporation pursuing
        claims that accrued postdissolution. On appeal, A Plus argues even though its claims accrued
        postdissolution, it still has standing to pursue the claims because the rights to the claims
        existed prior to the dissolution. For the reasons that follow, we affirm the decision of the trial
        court.

¶2                                       BACKGROUND
¶3          This case involves the alleged breach of two contracts: (1) a maintenance agreement
        between A Plus and Group Fox, Inc.; and (2) an employment agreement between A Plus and
        Wojciech Rusin. A Plus was an Illinois corporation engaged in the business of providing
        professional cleaning services. Group Fox is an Illinois corporation engaged in real estate
        property management. Rusin is a former employee of A Plus who was subsequently hired by
        Group Fox in 2009.
¶4          Effective December 1, 2004, A Plus entered into a maintenance agreement with Group
        Fox to perform cleaning services for a building located in Oak Brook, Illinois. Pursuant to
        a provision in the contract, the maintenance agreement “automatically extended and
        renewed” every two years on December 1. Either party, however, could prevent automatic
        renewal of the maintenance agreement by providing written notice to the other party 30 days

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       prior to the December 1 renewal date. The maintenance agreement also provided that Group
       Fox “may at no time during or for one year after termination of this Agreement hire, retain
       or employ *** any individual that is or has been employed by [A Plus].”
¶5         On July 5, 2005, A Plus entered into a written employment agreement with Rusin. In the
       employment agreement, Rusin agreed not to apply to or be hired by a “company (which is
       contracted with A Plus Janitorial for cleaning service) to perform the job instead of A Plus.”
       Pursuant to this employment agreement, Rusin performed cleaning services as an employee
       of A Plus at the Oak Brook property managed by Group Fox.
¶6         Effective March 8, 2008, A Plus voluntarily dissolved as a corporation after filing articles
       of dissolution with the Illinois Secretary of State. Nine months after A Plus’s dissolution, the
       maintenance agreement’s December 1, 2008 renewal date passed without either party
       providing 30 days’ written notice of termination. Subsequently, in or about June 2009, Group
       Fox terminated the maintenance agreement with A Plus and then employed Rusin to perform
       cleaning and janitorial services.

¶7                                    I. Verified Complaint
¶8          On April 4, 2011, A Plus filed its “Verified Complaint at Law” in the circuit court of
       Cook County, naming Group Fox and Rusin as defendants. The complaint set forth three
       counts. Count I alleged Group Fox breached its contract with A Plus when it terminated the
       maintenance agreement and employed Rusin in June 2009. Count II alleged Rusin breached
       his employment agreement with A Plus by undertaking employment with Group Fox. Count
       III alleged Group Fox tortiously interfered with the employment agreement between A Plus
       and Rusin.

¶9                       II. Group Fox’s and Rusin’s Motions to Dismiss
                                and Joint Motion for Reconsideration
¶ 10       On June 24, 2011, Rusin filed a combined motion to dismiss count II of the complaint
       pursuant to sections 2-615 and 2-619 of the Code of Civil Procedure (735 ILCS 5/2-615, 2-
       619(a)(2), (9) (West 2010)).1 Three days later, Group Fox similarly filed a motion to dismiss
       counts I and III of the complaint pursuant to section 2-619 of the Code of Civil Procedure
       (735 ILCS 5/2-619(a)(2), (9) (West 2010)). Both motions challenged A Plus’s standing and
       capacity to sue as an affirmative matter, arguing that as a dissolved entity, A Plus could not
       bring claims where the alleged breaches occurred postdissolution.
¶ 11       The trial court initially denied these motions in an order dated September 12, 2011. In
       the September 12 order, the trial court relied on an affidavit from the president of A Plus
       attesting that A Plus had merged with A+ Janitorial & Supply, Inc. (A+), prior to the

               1
                We note that Rusin failed to label each motion as required by section 2-619.1 of the Code
       of Civil Procedure. See 735 ILCS 5/2-619.1 (West 2010). Nonetheless, a motion that is incorrectly
       designated will still be deemed proper if the non-movant has not been prejudiced. Kovilic v. City of
       Chicago, 351 Ill. App. 3d 139, 143 (2004). We do not find any prejudice has resulted from this error.

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       dissolution of A Plus in March 2008. The trial court reasoned that under section 11.50 of the
       Business Corporation Act of 1983 (805 ILCS 5/11.50 (West 2010)), “the surviving
       corporation from a merger has all the rights and power” previously belonging to the
       nonsurviving corporations. Accordingly, the trial court found that the actions could still be
       brought against Group Fox and Rusin because A Plus’s apparent merger with A+ prior to the
       March 2008 dissolution raised a genuine issue of material fact sufficient to preclude
       dismissal.
¶ 12       Subsequently, Group Fox and Rusin filed “Defendants’ Joint Motion for
       Reconsideration” and reasserted their arguments for dismissal under section 2-619. In their
       joint motion, Group Fox and Rusin attached as exhibits the records of the Illinois Secretary
       of State to demonstrate no merger ever took place between A Plus and A+. Relying on this
       new information, the trial court granted the joint motion and dismissed A Plus’s complaint
       with prejudice pursuant to section 2-619. In its order granting dismissal, the trial court found
       that “A Plus did not legally merge with A+” and therefore remained “a dissolved corporation
       prior to any alleged breaches for which it seeks relief.” According to the trial court, as a
       dissolved corporation, “[A Plus] could not be party to the automatic renewal” of the
       maintenance agreement in December 2008. Thus, the trial court found that A Plus lacked
       standing to maintain the claims pled against Group Fox and Rusin in its complaint.2

¶ 13                                        ANALYSIS
¶ 14        A section 2-619 motion to dismiss admits the legal sufficiency of the complaint, but
       asserts affirmative matter to otherwise defeat the claim. Patrick Engineering, Inc. v. City of
       Naperville, 2012 IL 113148, ¶ 31. In considering a section 2-619 motion to dismiss, a court
       reviews all pleadings and supporting documents in a light most favorable to the nonmoving
       party. Van Meter v. Darien Park District, 207 Ill. 2d 359, 367-68 (2003). The court must
       then consider whether the existence of a genuine issue of material fact precludes dismissal
       or, absent such an issue of fact, whether the asserted affirmative matter makes dismissal
       proper as a matter of law. Kedzie & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill. 2d
112, 116-17 (1993). A court’s disposition of a section 2-619 motion is reviewed de novo.
       Van Meter, 207 Ill. 2d at 368. De novo consideration means we review independent of the
       trial court’s judgment. Arthur v. Catour, 216 Ill. 2d 72, 78 (2005).
¶ 15        The trial court decided this case as an issue of standing and the parties have similarly
       argued this case on appeal. This case, however, does not present an issue of standing. See
       Pielet v. Pielet, 2012 IL 112064, ¶ 47 (“This case presents no issue as to standing ***.”).
       Accordingly, the proper vehicle for dismissal in this case is section 2-619(a)(2)–that is, the
       lack of “legal capacity to sue or *** be sued.” 735 ILCS 5/2-619(a)(2) (West 2010). The
       “legal capacity to sue or be sued” generally refers to the status of the party, e.g., incompetent,
       infant (Patterson Heating & Air Conditioning Corp. v. Durable Construction Co., 3 Ill. App.
3d 444, 446 (1972)), or unincorporated association (American Federation of Technical

               2
                In its written order, the trial court did not specify under which subsection of 2-619 it was
       granting dismissal.

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       Engineers, Local 144 v. La Jeunesse, 63 Ill. 2d 263, 266 (1976)). In contrast, “[t]he doctrine
       of standing requires that a party, either in an individual or representative capacity, have a real
       interest in the action brought and in its outcome.” In re Estate of Wellman, 174 Ill. 2d 335,
       344 (1996). Lack of standing represents “ ‘affirmative matter’ that is properly raised under
       section 2-619(a)(9).” Glisson v. City of Marion, 188 Ill. 2d 211, 220 (1999). Nonetheless,
       “[w]here the dismissal was proper as a matter of law, we may affirm the circuit court’s
       decision on any basis appearing in the record.” Rodriguez v. Illinois Prisoner Review Board,
       376 Ill. App. 3d 429, 433 (2007). Accordingly, we may affirm under section 2-619(a)(2).
¶ 16        On appeal, A Plus has abandoned the assertion that it merged with A+ prior to its
       dissolution. Instead, A Plus argues its corporate dissolution does not bar the filing of its
       claims against Group Fox and Rusin. A Plus relies exclusively on Pielet v. Pielet, 407 Ill.
       App. 3d 474 (2d Dist. 2010) (Pielet I), aff’d in part & rev’d in part, 2012 IL 112064, for the
       proposition that causes of action based on rights existing prior to dissolution may accrue after
       corporate dissolution. Therefore, according to A Plus, because the obligations under the
       maintenance agreement and employment agreement existed predissolution, it still may bring
       its lawsuit despite the fact that the causes of action accrued postdissolution.
¶ 17        In Pielet I, plaintiff sued defendant for breach of a 1986 consulting agreement after
       payments made to plaintiff under the agreement prematurely ceased in 1998. Pielet I, 407 Ill.
       App. 3d at 475. Defendant, however, had dissolved as a corporation in 1994, four years prior
       to the alleged breach in 1998. Id. at 476. At issue, therefore, was whether plaintiff could still
       sue defendant when the claims accrued after defendant’s 1994 dissolution, but the obligations
       had existed since 1986. Id. at 491-92.
¶ 18        To decide this question, the Second District of this court interpreted section 12.80 of the
       Business Corporation Act of 1983 (805 ILCS 5/12.80 (West 2010)). Pielet I, 407 Ill. App.
3d at 492-97. Section 12.80 reads:
            “The dissolution of a corporation *** shall not take away nor impair any civil remedy
            available to or against such corporation, its directors, or shareholders, for any right or
            claim existing, or any liability incurred, prior to such dissolution if action or other
            proceeding thereon is commenced within five years after the date of such dissolution.”
            805 ILCS 5/12.80 (West 2010).
       According to the court, the language of section 12.80 preserving “any right ‘or’ claim ‘or’
       any liability incurred prior to dissolution compels the inference that the legislature intended
       those terms to be viewed in the alternative.” Pielet I, 407 Ill. App. 3d at 492. Thus, the court
       concluded the legislature intended “to preserve corporate obligations of three distinct types:
       ‘claims,’ ‘rights,’ and ‘liabilities.’ ” Id. at 493. Moreover, section 12.80 preserved all three
       distinct corporate obligations regardless of whether the cause of action was initiated by or
       against a dissolved corporation. See id. at 495-96 (noting that dissolved corporation’s
       existing debts and obligations extend into the five-year survival period and “a corporation
       or its creditors may assert claims regarding those debts and obligations during the survival
       period” (emphasis added)).
¶ 19        The Second District recognized that other Illinois Appellate Court decisions interpreted
       section 12.80 to allow “a party to assert a cause of action against a dissolved corporation only

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       if the cause of action accrued before the dissolution.” Id. at 493 (citing Beals v. Superior
       Welding Co., 273 Ill. App. 3d 655 (1995), and Blankenship v. Demmler Manufacturing Co.,
       89 Ill. App. 3d 569 (1980)). Nonetheless, the court distinguished these cases on the basis that
       “this case involves [the] assertion of a ‘right’ or ‘liability’ existing prior to dissolution, not
       a ‘cause of action’ existing prior to *** dissolution.” Id. Accordingly, the court concluded
       that so long as the “right” or “liability” underlying the claim existed prior to dissolution, the
       claim could still be brought even if the claim itself accrued postdissolution. Id. at 497.
¶ 20        Subsequent to the parties’ briefing in this matter, however, the Illinois Supreme Court
       reversed the decision in Pielet I on this issue. Pielet v. Pielet, 2012 IL 112064, ¶ 59 (Pielet
       II). First, the court in Pielet II found that the interpretation of section 12.80 in Pielet I was
       at odds with those of other Illinois Appellate Court districts and the Northern District of
       Illinois. Id. ¶ 32. The court then thoroughly discussed the federal decision, In re Johns-
       Manville/Asbestosis Cases, 516 F. Supp. 375 (N.D. Ill. 1981),3 and adopted its reasoning.
       Pielet II, 2012 IL 112064, ¶¶ 34-39. The court noted that the language “right or claim
       existing” had been added to an older version of the law, which previously only preserved
       claims against a dissolved corporation. Id. ¶ 36. Therefore, according to the court, this
       language had the effect of additionally preserving actions by a dissolved corporation. Id. ¶ 37
       (citing In re Johns-Manville/Asbestosis Cases, 516 F. Supp. at 377). This language did not,
       however, distinguish the existing need for any cause of action to actually accrue prior to
       dissolution. Id.
¶ 21        To be certain, the facts of Pielet and the facts of this case are not entirely analogous.
       Pielet involved claims against a dissolved corporation. This case involves claims by a
       dissolved corporation. Regardless, this distinction does not affect the outcome here. As the
       decision in Pielet II and the previously existing line of precedent indicate, any rights, claims,
       or liabilities preserved by section 12.80 still must be raised in a cause of action that actually
       accrued predissolution. Indeed, prior to the decision in Pielet I, this had always been the law
       in Illinois. See Henderson-Smith & Associates, Inc. v. Nahamani Family Service Center, Inc.,
       323 Ill. App. 3d 15, 22 (2001) (“[plaintiff] could not avail itself of the corporate survival
       statute because its cause of action did not accrue until after it was dissolved” (emphasis in
       original)); Blankenship v. Demmler Manufacturing Co., 89 Ill. App. 3d 569, 574 (1980) (“the
       rationale underlying this survival statute supports our decision that there is no basis for
       allowing a cause of action which accrues after dissolution”); Amman Food & Liquor, Inc. v.
       Heritage Insurance Co., 65 Ill. App. 3d 140, 147-49 (1978) (plaintiff could commence the
       suit as a dissolved corporation in order to stop the running of the statute of limitations, but
       plaintiff could not “maintain” the suit unless reinstated as a corporation); see also Korte
       Trucking Co. v. Broadway Ford Truck Sales, Inc., 877 S.W.2d 218, 220 (Mo. Ct. App. 1994)
       (“a dissolved corporation does not have the capacity to sue for claims arising after
       dissolution”) (applying Illinois law). In light of the Illinois Supreme Court’s decision in

               3
                The court in In re Johns-Manville/Asbestosis Cases interpreted a prior codification of
       section 12.80, section 94 of the Business Corporation Act (Ill. Rev. Stat. 1979, ch. 32, ¶ 157.94).
       Except for a shorter survival period of two years, the text of section 94 is identical to section 12.80.
       Compare Ill. Rev. Stat. 1979, ch. 32, ¶ 157.94, with 805 ILCS 5/12.80 (West 2010).

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       Pielet II and the existing line of precedent, the trial court properly dismissed this case
       pursuant to section 2-619.

¶ 22                                   CONCLUSION
¶ 23      For the foregoing reasons we affirm the decision of the circuit court of Cook County.

¶ 24      Affirmed.

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