Otto Baum Co. v. Süd Family Ltd. P'ship

2020 IL App (3d) 190054

159 N.E.3d 444

442 Ill.Dec. 265

OTTO BAUM COMPANY, INC., an Illinois Corporation, Plaintiff-Appellee,

v.SÜD FAMILY LIMITED PARTNERSHIP, a Wisconsin Limited Partnership; Methodist Services, Inc., an Illinois Not-for-Profit Corporation; Unknown Owners; and Unknown Necessary Parties, Defendants

(Süd Family Limited Partnership, Defendant-Appellant; Methodist Services, Inc., Defendant-Appellee).

Otto Baum Company, Inc., an Illinois Corporation, Plaintiff-Appellee,

v.Süd Family Limited Partnership, a Wisconsin Limited Partnership; Commerce Bank National Association, a National Banking Association; Methodist Services, Inc., an Illinois Not-for-Profit Corporation; Regions Bank, an Alabama Banking Corporation; Busey Bank, an Illinois Banking Corporation; Peoria Mob Owners, LLC, a Delaware Limited Liability Company; Süd's of Peoria, Inc., an Illinois Corporation; The Dasco Companies, LLC, a Florida Corporation; Methodist Medical Center of Illinois, an Illinois Not-for-Profit Corporation; Methodist Health Services Corporation, an Illinois Not-for-Profit Corporation; Farnsworth Group, Inc., an Illinois Corporation; P.J. Hoerr, Inc., an Illinois Corporation; The City of Peoria; Unknown Owners; and Unknown Necessary Parties, Defendants

(Süd Family Limited Partnership, Defendant-Appellant; Methodist Services, Inc., Defendant-Appellee).

Süd Family Limited Partnership, Nancy A. Süd, and Gian C. Süd, Plaintiffs-Appellants,

v.Otto Baum Company, Inc.; Attorneys' Title Guaranty Fund, Inc.; and Methodist Services, Inc., Defendants-Appellees.

Appeal No. 3-19-0054

Appellate Court of Illinois, Third District.

Opinion filed March 10, 2020

Modified Upon Denial of Rehearing May 18, 2020

PRESIDING JUSTICE LYTTON delivered the judgment of the court, with opinion.

¶ 1 This appeal involves three separate cases consolidated by the trial court. In the first two cases (09-CH-310 and 09-CH-311), Otto Baum Company, Inc. (Otto Baum), filed suit against Süd Family Limited Partnership (Süd), Methodist Services, Inc. (Methodist), and other owners of property upon which Otto Baum made improvements. The trial court ruled in favor of Otto Baum and entered judgments against Süd and Methodist, which appealed. While that appeal was pending, Methodist's insurer, Attorney Title Guaranty Inc. (ATG) entered into a settlement agreement with Otto Baum. After ATG and Süd had paid Otto Baum nearly the full amount of the judgments, Süd filed a petition for release of judgments. Soon thereafter, Süd was required to pay postjudgment attorney fees, which it did. After Otto Baum was paid its judgments in full, ATG, pursuant to an assignment from Otto Baum, obtained additional funds from Süd through a letter of credit Süd posted on appeal. Süd then filed an action (17-L-105), which is the third consolidated case, against Otto Baum, ATG, and Methodist alleging conversion, fraud, conspiracy to commit fraud, slander of title, quiet title and breach of UCC warranty. ATG, Otto Baum, and Methodist filed a motion for summary judgment on Süd's petition for release of judgments and Süd's complaint against them. The trial court granted that motion. On appeal, Süd argues that the trial court erred in (1) denying its petition for release of judgments, (2) granting ATG, Otto Baum and Methodist's motion for summary judgment, and (3) denying its motion to compel discovery. We vacate the trial court's order denying Süd's petition for release of judgments and granting summary judgment to ATG, Otto Baum, and Methodist with respect to Süd's claims against them. We lack jurisdiction to rule on the trial court's denial of Süd's motion to compel discovery.

¶ 2 I. BACKGROUND

¶ 3 In 2004, Süd purchased 40 acres of land in Peoria consisting of five lots, which became known as the Süd Plaza Subdivision. Süd planned to build an automobile dealership primarily on one lot, Lot 3. In April 2006, Süd entered a contract with Otto Baum to perform grading work on Lots 1 through 3. Later in 2006, Süd authorized Otto Baum to construct a roadway to provide ingress and egress to the entire subdivision and to perform grading work on Lot 5. On May 5, 2007, Methodist purchased Lots 2 and 5 from Süd. In connection with that sale, Methodist obtained title insurance from ATG. Otto Baum continued to perform work on Lot 5 until October 2007. That month the roadway was complete, and Süd opened its dealership.

¶ 4 On February 8, 2008, Otto Baum recorded its mechanic's lien for the roadway against all five lots of the subdivision. On the same day, Otto Baum filed a mechanic's lien on Lot 5 for the grading work it completed. On July 2, 2009, Otto Baum filed a lawsuit (09-CH-310) against Süd and Methodist for the work it completed on Lot 5 (hereinafter, the 310 case). Count I sought foreclosure of its mechanic's lien, and count II alleged breach of contract. Otto Baum sought $225,896.78, plus interest. On the same date, Otto Baum filed a lawsuit (09-CH-311) against Süd, Methodist, Commerce Bank, and others for foreclosure of its mechanic's lien and breach of contract for the work it performed on the roadway project (hereinafter, the 311 case). In that lawsuit, Otto Baum sought $254.589, plus interest.

¶ 5 The two cases were consolidated for trial. Following a bench trial, the trial court entered judgment in favor of Otto Baum in both cases. In the 310 case, the trial court entered a monetary judgment against Süd for $492,750.06 on count I and granted Otto Baum a mechanic's lien foreclosure judgment against Lot 5 in the sum of $425,356.79. In the 311 case, the court entered a monetary judgment against Süd for $460,463.26 on count I and granted Otto Baum a mechanic's lien foreclosure judgment against lots 2 through 5, allocating $77,607.52 per lot. Süd and Methodist appealed. Süd posted a $1.3 million letter of credit as security on the judgments while on appeal.

¶ 6 While the appeal was pending, Methodist, through its insurer, ATG, agreed to pay Otto Baum $400,000 as a settlement to release its two lots from foreclosure. The agreement stated that $238,065.22 would be applied to the 310 case ("representing partial principal payment of the mechanic's lien on Lot 5 as set forth in the Judgment"), and $161,934.78 would be credited to the 311 case ("representing full principal payment of the mechanic's liens allocated in the Judgment to Lots 2 and 5"). The agreement set out the remaining amounts due on the judgments after the settlement, which were $254,684.84 in the 310 case and $305,248.22 in the 311 case. The agreement further provided: "When and if Otto Baum collects the balance due it on the entire amount of the Judgments, * * * Otto Baum will not satisfy any excess on the Judgments, but will assign the same to Methodist as Methodist's sole and separate property." On appeal, we affirmed the monetary judgments against Süd. Otto Baum Co. v. Sud Family Limited Partnership , 2016 IL App (3d) 140821-U, 2016 WL 769354.

¶ 7 In early November 2016, Otto Baum drew $686,301.10 from Süd's letter of credit to pay the balance owed on the judgments, according to a spreadsheet provided by Otto Baum's counsel. On November 17, 2016, Otto Baum filed a motion requesting postjudgment attorney fees. Attached thereto was an affidavit from Otto Baum's counsel. According to the motion and affidavit, Otto Baum had collected $1,132,776 in satisfaction of the judgments, including the $400,000 settlement. The motion and affidavit stated that the amount still owed on the judgments was $877.40. The trial court granted the motion and entered an award of $80,109,64 for attorney fees.

¶ 8 On February 16, 2017, Süd filed a petition for release of judgments. On March 3, 2017, Otto Baum made a draw on the letter of credit of $82,189.54 for postjudgment attorney fees, and Otto Baum assigned its judgments to ATG, as Methodist's representative, pursuant to the settlement agreement. Soon thereafter, ATG alleged that it was owed $466,283.57 on Otto Baum's judgments and drew the balance remaining from Süd's letter of credit: $191,158.45. ATG and Methodist claim that Süd still owes $272,152.12 on Otto Baum's judgments.

¶ 9 In April 2017, Süd, along with Nancy Süd and Gian Süd, filed a complaint (17-L-105) against Otto Baum, ATG, and Methodist alleging conversion, fraud, conspiracy to commit fraud, slander of title, quiet title and breach of UCC warranty. In November 2017, Otto Baum, ATG and Methodist filed an answer to the complaint, along with three affirmative defenses and five counterclaims. In March 2018, Süd served written discovery on Otto Baum, ATG, and Methodist. In response to requests to admit, ATG admitted that Otto Baum received $1,168,490.64 from all sources, including $400,000 from Methodist, "plus $686,301.10 owed to [Otto Baum] through November 3, 2016 and $82,189.54 owed to [Otto Baum] through March 3, 2017." However, ATG denied that the judgments in the 310 and 311 cases were satisfied on March 3, 2017, asserting that there was still a balance on the judgments of $466,283.57 as of that date. Otto Baum, ATG, and Methodist responded to Süd's request to produce documents by raising numerous claims of privilege. In May 2018, Süd filed a motion to compel Otto Baum, ATG, and Methodist to produce privilege logs, pursuant to Illinois Supreme Court Rule 201(n) (eff. July 1, 2014), describing the nature of the documents not produced and the exact privilege being claimed to support their invocations of privilege. The trial court denied the motion "with leave to renew after any 201(k) conference."

¶ 10 Süd filed motions to strike and dismiss the affirmative defenses and counterclaims filed by Otto Baum, ATG and Methodist. In May 2018, the trial court denied Süd's motion to strike and dismiss the affirmative defenses. The trial court granted the motion with respect to three counterclaims, dismissing counterclaims I through III with prejudice. The motion to dismiss was denied with respect to counterclaim V, and the parties were granted to leave to...