Angell v. Santefort Family Holdings LLC

2020 IL App (3d) 180724

179 N.E.3d 255

449 Ill.Dec. 336

Diana ANGELL, Plaintiff-Appellant,

v.SANTEFORT FAMILY HOLDINGS LLC, d/b/a Tri-star Estates, Defendant-Appellee.

Appeal No. 3-18-0724

Appellate Court of Illinois, Third District.

Opinion filed March 17, 2020

Modified Upon Denial of Rehearing June 12, 2020

Ronald E. Harvey, of Briones, Harvey & Trevino, of Homewood, for appellant.

Steven Johnson and Bart R. Zimmer, of Langhenry, Gillen, Lundquist & Johnson, LLC, of Joliet, for appellee.

JUSTICE McDADE delivered the judgment of the court, with opinion.

¶ 1 Plaintiff Diana Angell fell and was injured while touring a mobile home located at Tri-Star Estates in Bourbonnais, Illinois. She filed suit against Santefort Family Holdings, LLC (defendant), which owned the real-estate property where Tri-Star Estates is located. Defendant filed a motion for summary judgment, arguing that it did not own the mobile home at issue. The trial court granted defendant's motion, and Angell filed a motion to reconsider, requesting leave to file an amended complaint. The trial court denied the motion to reconsider. Angell appealed, arguing the trial court erred (1) in granting defendant's motion for summary judgment, (2) in denying her leave to file an amended complaint, and (3) in failing to pierce defendant's corporate veil. We reverse and remand for further proceeding.

¶ 2 I. BACKGROUND

¶ 3 On April 21, 2014, Diana Angell and her mother toured the inside of a mobile home at 38 St. Michaels Drive, in Tri-Star Estates, a mobile home park in Bourbonnais, Illinois. Angell was interested in buying or renting it. She walked into an unlit bathroom and stepped into an uncovered vent hole. As a result, Angell was seriously injured.

¶ 4 Angell obtained a title search for Tri-Star Estates, determined that defendant was its owner, and filed suit against that entity. In her complaint, she alleged that defendant carelessly and negligently removed a vent cover from the floor of the bathroom of the mobile home and neither replaced it nor warned her of the open hole. She also alleged that defendant was negligent in that its agent showed her the bathroom of the mobile home without turning on the light.

¶ 5 In its answer, defendant objected to the question regarding whether it owned, occupied, leased, managed, or controlled the mobile home at the time of Angell's injury. Defendant contended that the question called for a legal conclusion or was otherwise vague. But, without waiving its objection, defendant denied owning the property. Defendant also objected to the question asking it to identify the entity that owned the mobile home, if Defendant was not the owner. Instead, defendant stated: "Santefort Family Homes, LLC did not own, manage, occupy, or lease the unit * * *." Defendant also denied that it had any "leases, contracts or similar agreements * * * with regard to the" mobile home.

¶ 6 Defendant listed Brian Gallagher as its Chief Operating Officer and Chief Financial Officer. At his deposition, Gallagher testified that the Santefort Family 2012 Irrevocable Trust (irrevocable trust) owned Santefort Real Estate Group, LLC, which in turn owned and operated defendant. Gallagher was also the chief operating officer of Santefort Real Estate Group, LLC. There were at least 11 companies related to the irrevocable trust, each set up as a separate legal entity and managing a specific home community or apartment building.

¶ 7 Gallagher explained that the separate entities exist to facilitate the operations of the irrevocable trust. He believed this structure was "very common in residential real estate," as a lending industry requirement, stating:

"Much of it is driven by lenders, and it's industry standard practice that lenders would want to have single-purpose entities and not multiple types of businesses regarding commercial or residential real estate. And so the lenders who provide mortgages to the property, that allow us to acquire properties with debt instead of all equity, expect the owner of that property to be a single-purpose entity for purposes of knowing that they can pursue that collateral directly without any other businesses being involved.

As a result, we are required, and they expect us to have a separate management company, and they expect us to have a separate sales company, because they don't want, in the event of default, bankruptcy laws provide a simpler path to recovering their collateral than if there are other businesses involved in the single-purpose entity."

¶ 8 Gallagher was also the chief operating officer of Santefort Property Management, Inc. (SPMI), whom defendant hired under this structure to manage properties within the umbrella of the irrevocable trust. He admitted that it was "hard to keep track of" all the various entities and managing companies. Therefore, Santefort Services, LLC was created on January 1, 2016 to centrally pay the employees of the entire organization through a single entity, Santefort Services, LLC. Gallagher explained that Santefort Services, LLC is "really dedicated to processing the payroll for the entire organization * * *. So, everyone in the company is now paid by Santefort Services, LLC."

¶ 9 Neither defendant nor SPMI sold the mobile homes on defendant's property. Another entity, Midwest Home Rentals, LLC (Midwest), owned the mobile homes on the property. Midwest was "affiliated" with defendant but was solely responsible for the acquisition and sale of the mobile homes. Midwest's personnel handled the sales whereas SPMI's employees managed the property. Gallagher was also the chief operating officer of Midwest.

¶ 10 Gallagher admitted that "the operations, the revenues and expenses of operating the property [were] recorded on the books of Santefort Family Holdings," the named defendant in this case. He did not believe that defendant owned the mobile home where Angell was injured. He explained that when defendant bought the property "any home that came with it would have been assigned to" Midwest. By "assigned," he clarified, "Sold or transferred it. Not given it." He was unsure whether the assignment of each of home was memorialized "with specific paperwork or not." He believed it might have been done "with an accounting entry."

¶ 11 Gallagher testified that he investigated Angell's injuries and the circumstances of her fall. He recalled speaking with Michael Quam, a salesperson for Midwest, and Jeff Justice about their knowledge of her fall. According to Gallagher, Quam told him that he was showing Angell the mobile home when she walked away from where he was leading the tour. She then stepped into an open vent hole in the bathroom.

¶ 12 At his deposition, Michael Quam stated he was a sales assistant for Midwest and reported to Gallagher. While he was giving Angell a tour of the mobile home, she walked toward one of the bathrooms another Quam heard her scream. He found her with her leg in an uncovered vent hole. He called an ambulance because he felt that Angel was in "bad shape." He testified that he never spoke with Gallagher about this incident. Linda Quam, Michael Quam's wife, was also deposed. She worked for Midwest as a sales manager and reported to Gallagher. She said that repairs on the homes located at Tri-Star Estates, where Angell was injured, were contracted out and not done by SPMI or Midwest. Gallagher had hired both Michael and Linda Quam.

¶ 13 Defendant filed a motion for summary judgment, arguing that it did not own the mobile home at issue and, therefore, owed Angell no duty of care. Angell responded, arguing in part that defendant was liable for the tort of Midwest under the doctrine of piercing the corporate veil. Alternatively, she requested leave to amend her complaint under section 2-616(d) of the Illinois Code of Civil Procedure to add Midwest as a defendant. She did not include a proposed motion. One day before its response was due, defendant submitted a supplemental answer to discovery with three attachments: (1) a tax bill for the year of 2014 on the mobile home naming "Mary Nemitz" as owing the unpaid bill, (2) an assignment of mortgage from TCF National Bank to Midwest, dated December 31, 2013, and (3) a certificate of title last recorded on January 27, 2007, naming Janet Warhover as the owner of the mobile home. The following day, defendant filed its reply to Angell's response.

¶ 14 The trial court granted defendant's motion for summary judgment on July 24, 2018. It ordered the case dismissed with prejudice. Angell timely filed a motion for reconsideration, which the trial court denied on November 13, 2018. Angell timely filed a notice of appeal.

¶ 15 This appeal now follows.

¶ 16 II. ANALYSIS

¶ 17 On appeal, Angell argues that the trial court erred in granting defendant's motion for summary judgment. Alternatively, Angell argues that the trial court erred in denying her motion for reconsideration and denying her leave to amend her complaint.

¶ 18 We review a grant of summary judgment de novo . Jackiewicz v. Vill. of Bolingbrook , 2020 IL App (3d) 180346, ¶ 23, ––– Ill.Dec. ––––, ––– N.E.3d ––––. Summary judgment is appropriate only if "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (Internal quotation marks omitted). Id. at ¶ 22 We review the record in "strictly against the movant and liberally for the nonmovant." Id. at ¶ 23. The movant need not prove her case but, to survive the motion, she "must present a factual basis that would arguably entitle [her] to judgment." (Internal quotation marks omitted) Daniels v. Corrigan , 382 Ill. App. 3d 66, 70, 320 Ill.Dec. 124, 886 N.E.2d 1193 (2008) . Illinois courts thus should grant summary judgment only where the movant's right to it "is clear and free from doubt." Id.

¶ 19 The parties' arguments on appeal regarding defendant's motion for summary judgment...