Umrani v. Sindhi Ass'n of N. Am.

2021 IL App (1st) 200219

201 N.E.3d 40

460 Ill.Dec. 382

Arshad UMRANI, an Individual; Munwar Jatoi, an Individual; and Sindhi Association of North America, a New York Nonprofit, Plaintiffs-Appellants,

v.SINDHI ASSOCIATION OF NORTH AMERICA, a New York Nonprofit; Jamil Daudi, an Individual: Aijaz Kolachi, an Individual; Noor-u-nisa Ghanghro, an Individual; Irshad Kazi, an Individual; Zulfiqar Shaikh, an Individual; Aijazul Haque, an Individual; Safdar Panhwar, an Individual; Mansoor Samoo, an Individual; Khalid Chana, an Individual; Awais Laghari, an Individual; Khalil Memon, an Individual; Aijaz H. Turk, an Individual; and Valeed Shaikh, an Individual, Defendants-Appellees.

No. 1-20-0219

Appellate Court of Illinois, First District, FOURTH DIVISION.

Filed September 16, 2021

Thomas J. Nitschke, of Blaise & Nitschke, P.C., of Chicago, for appellants.

Lawrence S. Gosewisch and Richard C. Harris, of Adler Murphy & McQuillen LLP, of Chicago, for appellees.

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

¶ 1 Plaintiffs Arshad Umrani, Munwar Jatoi, and the Sindhi Association of North America (SANA), appeal an order of the circuit court of Cook County granting a motion to dismiss filed on behalf of SANA, Jamil Daudi, Aijaz Kolachi, Noor-u-nisa Ghanghro, Irshad Kazi, Zulfiqar Shaikh (Shaikh), Aijazul Haque, Safdar Panhwar, Mansoor Samoo, Khalid Chana, Awais Laghari, Khalil Memon, Aijaz H. Turk, and Valeed Shaikh (Valeed) (collectively, defendants). The circuit court dismissed the amended complaint on two bases: (1) lack of standing as to all of the defendants and (2) lack of personal jurisdiction over all but one defendant, Memon (a Cook County resident). On appeal, plaintiffs maintain that the circuit court erred in dismissing the amended complaint for lack of standing as to certain defendants as they waived any lack of standing defense by failing to raise it in their respective answers. Plaintiffs further contend that the circuit court has personal jurisdiction over all of the defendants and therefore dismissal on that basis was also improper. For the reasons that follow, we affirm.

¶ 2 BACKGROUND

¶ 3 On November 21, 2014, plaintiffs Umrani and Jatoi brought a derivative action in the name of SANA, a not-for-profit corporation organized under New York state law. SANA is a society of individuals living in North America who are of Sindhi descent. The defendants reside in various areas throughout the United States and Canada; only Memon is a resident of Cook County.

¶ 4 The operative amended complaint, filed on May 26, 2015, alleged there were efforts by certain SANA officeholders to maintain power within SANA by interfering with the association's election process and attempting to circumvent the bylaws of the association both during and after a SANA convention held in Chicago. The operative complaint further alleged that SANA executive council members (Daudi, Ghanghro, Kazi, Haque, and Memon) and other SANA officeholders (Kolachi, Panhwar, Samoo, Chana, Shaikh, Laghari, Turk, and Valeed) breached their fiduciary duties of care, loyalty, and obedience; committed fraud; and spoliated evidence. While plaintiffs alleged in portions of their complaint that all of the defendants engaged in the same misconduct, they also alleged specific misconduct committed by each individual defendant. In their complaint, plaintiffs also distinguished between acts committed by defendants who were members of the executive council and acts committed by all defendants. These allegations of misconduct, however, are not relevant to the issues on appeal.

¶ 5 Pertinent to this appeal, defendants were originally represented individually by two different attorneys. Certain defendants filed a motion to dismiss and the other defendants, however, failed to file their own motion or join in the filed motion to dismiss. The circuit court granted the motion to dismiss based on lack of personal jurisdiction; however, the circuit court observed that the motion did not address all of the defendants and directed the parties to specify in the draft order which defendants were to be included in the order. No such order was ever drafted and instead the order states that "defendants’ " motion to dismiss was granted and did not identify the defendants individually.

¶ 6 Plaintiffs appealed the circuit court's ruling on the motion to dismiss. We dismissed the matter for lack of jurisdiction as the circuit court's ruling was not a final judgment and as it also did not dispose of all of the defendants to the appeal. Umrani v. Sindhi Ass'n of North America , 2018 IL App (1st) 162081-U, ¶ 13, 2018 WL 3997868.

¶ 7 On remand, a single attorney was granted leave to file an appearance on behalf of all of the defendants. Defendants then filed a motion to dismiss arguing (1) plaintiffs lacked standing to bring a derivative lawsuit under the New York Not-For-Profit Corporation Law (Not-For-Profit Law) ( N.Y. Not-For-Profit Corp. Law § 720 (McKinney 2017) ) and (2) the court lacked personal jurisdiction over them. In response, plaintiffs maintained that certain defendants who answered the complaint failed to raise standing as an affirmative defense and therefore waived the issue of standing. Plaintiffs further asserted that the court had personal jurisdiction over each of the defendants due to their minimum contacts with the state.

¶ 8 The circuit court held a hearing on the motion to dismiss; however, no transcript of the hearing is included in the record on appeal. After considering the arguments of the parties, the circuit court granted defendants’ motion to dismiss for lack of standing and, in the alternative, for lack of personal jurisdiction over each of the defendants except Memon, a resident of Cook County. This appeal followed.

¶ 9 ANALYSIS

¶ 10 Jurisdiction

¶ 11 Prior to addressing plaintiffs’ claims on appeal, we address our jurisdiction. Defendants maintain that we lack jurisdiction to consider plaintiffs’ argument that certain defendants waived standing where the issue of standing was not expressly raised in the notice of appeal.

¶ 12 The notice of appeal serves the dual purpose of vesting the reviewing court with jurisdiction and informing the prevailing party that the unsuccessful litigant seeks review by a higher court. Waste Management, Inc. v. International Surplus Lines Insurance Co. , 144 Ill. 2d 178, 188, 161 Ill.Dec. 774, 579 N.E.2d 322 (1991). Illinois Supreme Court Rule 303(b)(2) (eff. July 1, 2017) provides that a notice of appeal "shall specify the judgment or part thereof or other orders appealed from." We construe notices of appeal liberally. In re Desiree O. , 381 Ill. App. 3d 854, 863, 320 Ill.Dec. 279, 887 N.E.2d 59 (2008). For example, if an order not listed in the notice of appeal was a step in the procedural progression of the case, it may be reviewed as it can be said to relate to the judgment specified in the notice of appeal. Neiman v. Economy Preferred Insurance Co. , 357 Ill. App. 3d 786, 790-91, 293 Ill.Dec. 982, 829 N.E.2d 907 (2005).

¶ 13 Here, plaintiffs stated in the notice of appeal that they were appealing from the circuit court's January 3, 2020, order dismissing the amended complaint. They also indicated in the section entitled "Relief sought from Reviewing Court" to "[r]everse the grant of dismissal to all Defendants for lack of personal jurisdiction and remand for further proceedings or a trial on the merits." Thus, while plaintiffs specified the issue of lack of jurisdiction, the notice of appeal itself indicated it was appealing from the order of January 3, 2020, which listed two bases for the dismissal, one being lack of standing. Construing the notice of appeal liberally, we find it to be sufficient to enable our review. See In re Marriage of Drewitch , 263 Ill. App. 3d 1088, 1092, 201 Ill.Dec. 620, 636 N.E.2d 1052 (1994) ("The purpose of a notice of appeal is not to specify the exact points to be relied upon for reversal, but simply to inform a party who has received a favorable judgment that the opposing party desires review of the case."). Moreover, in order for plaintiffs to obtain the relief sought (i.e. , reversal of the dismissal order and a remand for further proceedings), they would also have to challenge the alternative basis on which the circuit court dismissed the complaint, that being standing. Accordingly, we conclude we have jurisdiction to review the order denying the motion to dismiss in its entirety.

¶ 14 Lack of Standing

¶ 15 As discussed, the circuit court dismissed the complaint under two different bases. First, it dismissed the amended complaint in its entirety with prejudice due to plaintiffs’ lack of standing. In the alternative, the circuit court dismissed the amended complaint as it lacked personal jurisdiction over all but one defendant, Memon, a Cook County resident. For the following reasons, we agree with the circuit court's first basis for dismissal and find that plaintiffs lack standing to bring their causes of action. See Mullins v. Evans , 2021 IL App (1st) 191962, ¶ 25, 453 Ill.Dec. 204, 187 N.E.3d 178 ("We may affirm on any basis appearing in the record, whether or not the trial court relied on that basis or its reasoning was correct.").

¶ 16 Standard of Review

¶ 17 The purpose of a section 2-619 motion to dismiss is to dispose of issues of law and easily proved issues of fact at the outset of litigation. Zedella v. Gibson , 165 Ill. 2d 181, 185, 209 Ill.Dec. 27, 650 N.E.2d 1000 (1995). Section 2-619 of the Code of Civil Procedure (Code) provides that a "[d]efendant may, within the time for pleading, file a motion for dismissal of the action or for other appropriate relief upon any of the following grounds." 735 ILCS 5/2-619(a) (West 2020). While a motion to dismiss pursuant to section 2-619(a)(9) admits the legal sufficiency of the complaint, it raises affirmative matters either internal or external from the complaint that would defeat the cause of action. Id. § 2-619(a)(9). An ...