Moy v. Winsen NG ( 2007 )

SECOND DIVISION
Date Filed: February 27, 2007
No. 1-05-1330
NGAN MOY, DICK MOY, TSUN MAK ) Appeal from the
and WAI YUNG MAK, ) Circuit Court of
) Cook County.
Plaintiffs-Appellees, )
)
v. ) No. 04 L 1012
)
WINSEN NG, Individually, and )
doing business as Chicago N.A. )
Construction, Ltd., )
)
Defendants ) Honorable
) Barbara Disko,
(Shirley Leu-Tan Wong, ) Judge Presiding.
)
Defendant-Appellant). )
JUSTICE HALL delivered the opinion of the court:
The defendant, Shirley Leu-Tan Wong, appeals from a judgment
in the amount of $38,800, entered against her and in favor of the
plaintiffs, Ngan Moy, Dick Moy, Tsun Mak1 and Wai Yung Mak, by
the circuit court of Cook County. On appeal, the defendant
contends that the court erred when it denied her motion for
summary judgment and when it denied her motion for judgment on
the pleadings at the close of the plaintiffs' case.
This is the second appeal by the defendant in this case. In
Moy v. Ng, 341 Ill. App. 3d 984, 793 N.E.2d 919 (2003), the
1
The death of Tsun Mak was spread of record during the
circuit court proceedings.
No. 1-05-1330
defendant appealed from a money judgment entered against her and
in favor of the plaintiffs. This court held that the trial court
erred in denying the defendant's motion to strike the plaintiffs'
answer to her Supreme Court Rule 216 (134 Ill. 2d R. 216) request
for admission of facts, and we remanded the case for a new trial
with directions that the facts contained in the defendant's
request to admit facts be deemed admitted. Moy, 341 Ill. App. 3d
at 991-92.
On remand, the defendant filed a motion for summary judgment
predicated on the plaintiffs' admissions. The plaintiffs opposed
the motion, relying on the doctrine of judicial estoppel. The
plaintiffs alleged that during disciplinary proceedings brought
against the defendant by the Attorney Registration and
Disciplinary Commission (ARDC), the defendant made statements
under oath that contradicted the plaintiffs' admissions she
relied on in her motion for summary judgement. The trial court
denied the defendant's motion for summary judgment, finding that,
even considering the plaintiffs' admissions, the ARDC proceedings
and the statements made therein created questions of fact that
precluded summary judgment.
At the bench trial in this case, the parties presented the
transcripts of the previous trial and the ARDC proceedings for
the trial court's review. Based on those records, the trial
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No. 1-05-1330
court entered judgment in favor of the plaintiffs and against the
defendant in the amount of $38,800. The defendant filed a timely
notice of appeal.
ANALYSIS
The defendant contends that the plaintiffs' judicial
admissions entitled her to summary judgment or, in the
alternative, her motion for judgment on the pleadings at the
close of the plaintiffs' case should have been granted. The
plaintiffs respond that the doctrine of judicial estoppel applies
in this case to bar the defendant's reliance on their judicial
admissions.
As a general rule, "an order denying a motion for summary
judgment is not reviewable after an evidentiary trial, as any
error in the denial is merged in the subsequent trial." Paz v.
Commonwealth Edison, 314 Ill. App. 3d 591, 594, 732 N.E.2d 696
(2000). "The rationale for this rule is that it would be unjust
to the prevailing party, who won the judgment after the evidence
was more completely presented." Battles v. La Salle National
Bank, 240 Ill. App. 3d 550, 558, 608 N.E.2d 438 (1992). However,
where the trial does not deal with the issue in the motion for
summary judgment, the summary judgment denial does not merge into
the judgment. Battles, 240 Ill. App. 3d at 558 (ruling on issue
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No. 1-05-1330
of whether an accounting was necessary did not merge where jury
entered its verdict on the issue of whether there was a breach of
a fiduciary duty and the damages to be awarded).
Nonetheless, even if the denial of summary judgment is not
reviewable in this case, we may still review the defendant's
contentions in the context of whether the trial court's finding
in favor of the plaintiffs was against the manifest weight of the
evidence. See Paz, 314 Ill. App. 3d at 594.
"In a bench trial, a trial court's findings will not be
disturbed on review unless they are against the manifest weight
of the evidence." International Capital Corp. v. Moyer, 347 Ill.
App. 3d 116, 121, 806 N.E.2d 1166 (2004). "A judgment is against
the manifest weight of the evidence only if the opposite
conclusion is apparent or when findings appear to be arbitrary,
unreasonable, or not based on the evidence." Moyer, 347 Ill.
App. 3d at 122.
In counts V and VI of their second amended complaint, the
plaintiffs alleged that the defendant had breached her fiduciary
duty and her fiduciary duty as escrowee to them. According to
the plaintiffs, the defendant, a licensed attorney, agreed to
serve as the joint escrowee for the plaintiffs and Winsen Ng, the
contractor hired to restore the plaintiffs' building. The
plaintiffs deposited $151,000 with the defendant. The defendant
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No. 1-05-1330
breached her fiduciary duties by distributing the escrowed funds
without determining whether the work had been done, failing to
obtain lien waivers, failing to obtain independent verification
that the work was done as required by the contract, in compliance
with the architect's plans and the City of Chicago building code,
failing to issue the disbursement checks as joint payee with Mr.
Ng and his subcontractors and failing to require proof of payment
to Mr. Ng's subcontractors and for the purchase of building
materials. The plaintiffs alleged that the defendant disbursed
$151,000 as escrowee that was not used in the restoration of the
plaintiffs' building.
Where a party fails to properly respond to a Rule 216
request to admit facts, those factual matters in the request are
deemed judicial admissions which cannot later be controverted by
any contrary evidence. Robertson v. Sky Chefs, Inc., 344 Ill.
App. 3d 196, 199, 799 N.E.2d 852 (2003). Such an admission is
considered incontrovertible and has the effect of withdrawing a
fact from contention. Tires 'N Tracks v. Dominic Fiordirosa
Construction Co., 331 Ill. App. 3d 87, 91, 771 N.E.2d 612 (2002).
However, "if the request seeks the admission of a conclusion of
law, the request is improper in form and the opposing party's
failure to respond does not result in an admission." Banco
Popular v. Beneficial Systems, Inc., 335 Ill. App. 3d 196, 209,
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No. 1-05-1330
780 N.E.2d 1113 (2002).
The plaintiffs' failure to respond to the defendant's Rule
216 request resulted in their admission to the following
pertinent facts: (1) the defendant never had any agreements with
the plaintiffs; (2) the defendant did not represent the
plaintiffs; (3) the agreement for the defendant to hold certain
monies to be distributed to the contractor was between the
defendant and the New Asian Bank; (4) a representative of the New
Asian Bank inspected the building premises prior to the
distribution of the funds; and (5) all monies received by the
defendant from the New Asian Bank were properly distributed to
the contractor upon a receipt. However, the request to admit
that the defendant owed no duty to the plaintiffs sought a legal
conclusion and therefore was not an admission. See Chandler v.
Illinois Central R.R. Co., 207 Ill. 2d 331, 340, 798 N.E.2d 724
(2003) ("The existence of a duty is a question of law for the
court to decide").
In her affidavit as to discipline on consent, the defendant
agreed that the following assertions in the petition to impose
discipline on consent were true: (1) the defendant agreed to
serve as escrowee for insurance proceeds earmarked for the
restoration of the plaintiffs' building and to open a separate
escrow account; (2) the defendant deposited an insurance proceeds
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No. 1-05-1330
check in the amount of $117,000 in her existing checking account,
not a client fund account; (3) between December 3, 1996, and
December 12, 1996, the defendant distributed $78,000 to the
plaintiffs' contractor and his suppliers, which should have left
$38,800 in insurance proceeds in the account; (4) as of December
12, 1996, only $502.86 remained in the defendant's account; (5)
by December 12, 1996, the defendant had, without authority, used
$38,297.14 of the plaintiffs' insurance proceeds to pay her own
personal and business expenses; and (6) on January 31, 1997, the
defendant deposited $34,000 in additional insurance proceeds into
her existing checking account.
"In order to state a claim for breach of fiduciary duty, it
must be alleged that a fiduciary duty exists, that the fiduciary
duty was breached, and that such breach proximately caused the
injury of which the plaintiff complains." Moyer, 347 Ill. App.
3d at 122. "Escrowees have been found to owe a fiduciary duty
both to the party making the deposit and the party for whose
benefit it is made." Moyer, 347 Ill. App. 3d at 123. "Under
this analysis, the escrowee owes a duty to act only in accordance
with the escrow instructions." Moyer, 347 Ill. App. 3d at 123.
In the context of a cause of action for breach of fiduciary
duty, the plaintiffs' admissions established that the defendant
entered into an escrow agreement with New Asian Bank. Even
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No. 1-05-1330
though the plaintiffs admitted that the defendant did not
represent them or have an agreement with them with respect to the
escrow, since the escrow was for the plaintiffs' benefit, she
could still be found to owe a duty to them. However, the
plaintiffs' admissions contradicted their allegation that the
defendant breached her fiduciary duty to them, by admitting that
the building had been inspected prior to the distribution of the
insurance funds and that all the monies received from the New
Asian Bank were properly distributed to the contractor upon a
receipt. The question then becomes whether the plaintiffs'
judicial admissions may be overborne by the application of the
doctrine of judicial estoppel.
"Judicial estoppel provides that a party who assumes a
particular position in a legal proceeding is estopped from
assuming a contrary position in a subsequent legal proceeding."
Bidani v. Lewis, 285 Ill. App. 3d 545, 550, 675 N.E.2d 647
(1996). "'The doctrine of judicial estoppel rests upon public
policy which upholds the sanctity of the oath and its purpose is
to bar as evidence statements and declarations which would be
contrary to sworn testimony the party has given in the same or
previous judicial proceedings.'" Bidani, 285 Ill. App. 3d at
549. "[J]udicial estoppel focuses on the relationship between
the litigant and the judicial system." Bidani, 285 Ill. App. 3d
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No. 1-05-1330
at 551.
"Five elements are generally required for the doctrine of
judicial estoppel to apply: the party to be estopped must have
(1) taken two positions, (2) that are factually inconsistent, (3)
in separate judicial or quasi-judicial administrative
proceedings, (4) intending for the trier of fact to accept the
truth of the facts alleged, and (5) have succeeded in the first
proceeding and received some benefit from it." People v.
Caballero, 206 Ill. 2d 65, 80, 794 N.E.2d 251 (2002). The
application of the doctrine of judicial estoppel is reviewed
under the abuse of discretion standard. Barack Ferrazzano
Kirschbaum Perlman & Nagelberg v. Loffredi, 342 Ill. App. 3d 453,
459, 775 N.E.2d 779 (2003).
The first, third and fourth elements are satisfied in that
before the ARDC, the defendant acknowledged under oath that she
had used the plaintiffs' insurance funds to pay her own bills and
expenses, while in the circuit court, she chose to rely on the
plaintiffs' judicial admission that she had properly disbursed
the insurance funds to prevail on her motions. The third element
is satisfied in that the ARDC hearing was a quasi-judicial
administrative proceeding. See 166 Ill. 2d R. 753 (inquiry,
hearing and review boards); 155 Ill. 2d R. 754 (subpoena power);
see also Zych v. Tucker, 363 Ill. App. 3d 831, 835, 844 N.E.2d
9
No. 1-05-1330
1004 (2006) (setting forth the powers that differentiate a quasi-
judicial body from a body performing merely an administrative
function).
The defendant maintains that the fifth element cannot be
satisfied because she did not prevail in the ARDC proceeding. We
disagree. In Teledyne Industries, Inc. v. NLRB, 911 F.2d 1214,
1218 (6th Cir. 1990), the court declined to apply judicial
estoppel, in part, because the parties had entered into agreed
orders that contained no admissions or findings of law or fact.
Teledyne Industries, Inc., 911 F.2d at 1219. In contrast, as
part of the settlement of the ARDC complaint, the defendant
acknowledged, by way of affidavit, her personal use of the
plaintiffs' insurance funds.
The application of judicial estoppel in this case does not
serve to contradict the facts established by the plaintiffs'
admissions. Rather, the doctrine bars the defendant from
utilizing those facts to prevail in this case. "'[Judicial
estoppel] is to be applied where "intentional self-contradiction
is being used as a means of obtaining unfair advantage in a forum
designed for suitors seeking justice," [citation], to prevent
litigants from "playing fast and loose with the courts."'"
Loffredi, 342 Ill. App. 3d at 466, quoting In re Cassidy, 892
F.2d 637, 641 (7th Cir. 1990), quoting Scarano v. Central R. Co.
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No. 1-05-1330
of New Jersey, 203 F.2d 510, 513 (3d Cir. 1953).
Applying the doctrine of judicial estoppel, we determine
that the plaintiffs' judicial admissions were overborne by the
defendant's admissions in the ARDC proceedings. Therefore, the
trial court's judgment in favor of the plaintiffs was not against
the manifest weight of the evidence.
Likewise, judicial estoppel barred the defendant from
utilizing the plaintiffs' judicial admissions to prevail on her
motion for judgment on the pleadings.2 "'"Judgment on the
pleadings is proper only if questions of law, not of fact, exist
after the pleadings have been filed." [Citation.]'" County of
Cook v. Philip Morris, Inc., 353 Ill. App. 3d 55, 59, 817 N.E.2d
1039 (2004), quoting Chicago Title & Trust Co. v. Steinitz, 288
Ill. App. 3d 926, 934, 681 N.E.2d 669 (1997), quoting Millers
Mutual Insurance Ass'n v. Graham Oil Co., 282 Ill. App. 3d 129,
134, 668 N.E.2d 223 (1996). Because judicial estoppel applied,
2
The rule barring review of the denial of a summary judgment
motion does not bar review of the denial of motions for judgment
on the pleadings. See Elane v. St. Bernard Hospital, 284 Ill.
App. 3d 865, 869-70, 672 N.E.2d 820 (1996) (after refusing to
review the denial of summary judgment, the reviewing court
addressed the merits of the denial of the motion for judgment on
the pleadings).
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No. 1-05-1330
the trial court properly decided the case in the plaintiffs'
favor based upon the defendant's admissions in the ARDC
proceedings.
Finally, the defendant contends that the trial court erred
when it failed to incorporate properly the plaintiffs' judicial
admissions in its decision. The defendant waived this argument
by failing to support it with any citation to authority, in
violation of Supreme Court Rule 341(h)(7). 210 Ill. 2d R.
341(h)(7).
In any event, the defendant's argument lacks merit. The
necessary corollary of the doctrine of judicial estoppel is that
the trial court's role as fact finder is eliminated. Ceres
Terminals, Inc. v. Chicago City Bank & Trust Co., 259 Ill. App.
3d 836, 856, 635 N.E.2d 485 (1994). "Accordingly, courts have
warned that the doctrine of judicial estoppel is 'an
extraordinary one which should be applied with caution
[citation], because it "precludes a contradictory position
without examining the truth of either statement."'" Ceres
Terminals, Inc., 259 Ill. App. 3d at 856-57, quoting Scott v.
Land Span Motor, Inc., 781 F. Supp. 1115, 1119 (D.S.C. 1991),
quoting Teledyne Industries, Inc., 911 F.2d at 1218. The
application of judicial estoppel in this case precluded the use
of the plaintiffs' judicial admissions and, therefore, the
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No. 1-05-1330
failure to incorporate the admissions was not error.
The judgment of the circuit court is affirmed.
Affirmed.
HOFFMAN and SOUTH, JJ., concur.
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