Kim v. Hemingway House Condominium Assoc. , 2023 IL App (1st) 211115-U ( 2023 )

2023 IL App (1st) 211115-UNo. 1-21-1115
FIRST DIVISION
May 1, 2023
NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the
limited circumstances allowed under Rule 23(e)(1).
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
______________________________________________________________________________
MICHAEL C. KIM, doing business as MICHAEL C. ) Appeal from the
KIM & ASSOCIATES, ) Circuit Court of
) Cook County.
Plaintiff and Counterdefendant Appellee, )
)
v. )
) No. 13 M1 131645
HEMINGWAY HOUSE CONDOMINIUM )
ASSOCIATION, an Illinois not-for-profit corporation, )
)
Defendant and Counterplaintiff-Appellant. ) Honorable
) Daniel J. Kubasiak,
(Klein & Hoffman, Inc., Counterdefendant) ) Judge, presiding.
JUSTICE PUCINSKI delivered the judgment of the court.
Presiding Justice Lavin and Justice Coghlan concurred in the judgment.
ORDER
¶1 Held: The trial court properly granted summary judgment to a condominium association’s
former attorney dismissing all counterclaims against the attorney. The
condominium association could not establish that it was injured merely because the
former attorney assisted the association’s prior board of directors in implementing
a façade repair option that was more expensive than the option preferred by the
current board, where it is undisputed that the more expensive repair program was
more comprehensive and expected to last longer than the cheaper option.
No. 1-21-1115
¶2 Defendant-appellant and counterplaintiff Hemingway House Condominium Association
(HHCA) appeals from the trial court’s entry summary judgment in favor of plaintiff and
counterdefendant Michael C. Kim, doing business as Michael C. Kim & Associates (Kim),
dismissing each of the counts contained HHCA’s counterclaim against Kim. HHCA also appeals
from the denial of its motion for partial summary judgment against Kim.
¶3 For the reasons that follow, we affirm the entry of summary judgment for Kim because
HHCA cannot establish an injury to support any of the counts of its counterclaim against Kim. In
light of that determination, we need not reach the merits of HHCA’s motion for partial summary
judgment against Kim.
¶4 BACKGROUND
¶5 This appeal arises from a dispute among condominium owners as to how to remedy water
intrusion at the Hemingway House Condominiums, a 29-story building in Chicago. 1 HHCA is
charged with the operation and management of the 280 units in the building. HHCA is governed
by a board of directors (the Board), pursuant to the HHCA’s “Declaration of Condominium
Ownership, Easements, Restrictions, Covenants, and Bylaws” (Declaration). Significantly, the
Board membership changed substantially as of 2012, apparently due to the dispute herein
regarding which option should be implemented to address the water intrusion.
¶6 Plaintiff-appellee Kim, an attorney, formerly served as HHCA’s attorney and worked with
the Board with respect to efforts to remediate the water intrusion and related litigation matters. As
alleged by HHCA, Kim assisted former members of the Board (the Prior Board) in causing the
1
The instant dispute was the subject of a prior order of this court issued in June 2020. Kim v.
Hemingway House Condominium Ass’n, 2020 IL App (1st) 190603-U (June 16, 2020).
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HHCA to adopt a costly repair program and a related special assessment, contrary to the interests
and wishes of the HHCA and unit owners. After the membership of the Board changed in 2012,
the New Board terminated Kim’s representation of HHCA.
¶7 The Water Intrusion Problem and the 2011 BTC Report
¶8 The record reflects that the building was constructed in 1969 and that its exterior consists
of exposed concrete, brick masonry, and aluminum frame windows. Beginning in the 2000s,
certain units began to experience water intrusion, apparently resulting from defects in the
building’s exterior walls.
¶9 The record reflects that HHCA contracted with Building Technology Consultants, PC
(BTC) to perform a “water leakage and façade evaluation”, resulting in a report issued in January
2011. That report described cracking in numerous bricks, cracked and deteriorated mortar joints,
cracking concrete beneath windows. BTC’s report described a number of “alternative repair
options.” BTC stated that the “long-term and most robust solution would be to remove the existing
brick veneer in its entirety *** and re-construct the veneer with new brick, new TWF [through-
wall-flashing], and a proper water management system.” BTC noted that this was “likely to be
one of the most long-term solutions” but would “by far have the highest initial cost,” with an
estimated cost of $6 million. However, BTC stated that the most expensive option will result in
“lower future maintenance and repair requirements.” BTC indicated that less expensive options
would include “conventional masonry and concrete repairs” or, “localized” repairs at areas with
water leakage.
¶ 10 Kim Advises the Association Regarding Implementation of a Special Assessment
¶ 11 The record reflects that the Prior Board requested Kim’s legal advice as to the steps the
Board could take to address the water intrusion problem and a related special assessment. The
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record contains an August 2011 letter from Kim addressed to the building property manager,
advising that “the Board of Directors alone can make the decision to repair [the] building face
and to replace the windows.” In that letter, Kim noted that the adoption of a special assessment
“is governed by Section 18(a)(8) of the [Condominium Property] Act” and that there are “three
situations regarding special assessments:
(1) If the special assessment is required due to an emergency ***
or due to a legal mandate (for example, to correct a building
code violation), then the Board alone has the authority to adopt
the special assessment in any amount required, without any
approval of the unit owners;
(2) If the assessment is for additions or alterations to common
elements which are not included in the current annual budget,
then that special assessment requires approval of at least two-
thirds of the unit owners in accordance with their percentages
of ownership interest; and
(3) In all other circumstances, if the adoption of the special
assessment will result in the sum of all regular and special
assessments payable in the current fiscal year exceeding 115%
of the sum of all regular and special assessments payable
during the preceding fiscal year, then upon delivery of a
written petition signed by unit owners *** the Board must call
a meeting of the unit owners within 30 days at which the unit
owners will vote on that special assessment (and unless a
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majority of the total votes of all unit owns is cast to reject the
special assessment, the special assessment will be deemed
ratified).”
¶ 12 Kim further advised in the same letter to the property manager:
“In our prior discussion, you indicated that Situation 1 would not
apply because there are no emergency or legal violations currently
presented by this situation. It would seem that Situation 2 can and
should be avoided if there are no additions or alterations being made
to the common elements, but instead the project involves only
façade repair and window replacement (that is, work on existing
common elements). Thus, Situation 3 would be applicable.
Assuming that the special assessment (estimated to be in the range
of $6 to $7 million dollars) will result in a greater than 15% increase
in the current total assessments *** then there is a potential for a
referendum vote being called *** however, if a majority of the unit
owners (by percentage of ownership interest) would support the
special assessment, then ultimately that special assessment will be
ratified.”
¶ 13 Engagement of K&H and the 2012 K&H Report
¶ 14 The Prior Board separately engaged an engineering firm, Klein & Hoffman, Inc. (K&H),
regarding to the water intrusion. On November 30, 2011, K&H submitted to HCAA a proposal to
inspect the building, suggest options to address the water infiltration, and discuss the various
advantages and disadvantages of each option. K&H inspected the building and issued a
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corresponding report dated February 28, 2012, K&H’s report set forth five repair options, although
the instant appeal focuses on whether the less expensive “Option 1” or the more costly “Option 2”
should have been implemented.
¶ 15 As described by K&H, “Option 1” involved “Conventional Masonry Repairs” including
repair of the existing brick masonry and deteriorated concrete. K&H’s report explained:
“This option has the lowest initial cost and will help to alleviate
some of the current water infiltration issues. It will not eliminate the
water infiltration problems. Water infiltration will reoccur in the
future. Additional maintenance and water infiltration repairs are
anticipated in the future.”
¶ 16 K&H’s “Option 2” consisted of “Comprehensive Masonry Replacement” with “complete
rebuilding/replacement of the existing brick masonry.” K&H said that a complete brick
replacement would “allow[] for correction of all observed deficiencies as well as functional
enhancement of the brick masonry facades.” K&H also stated that with Option 2, “[s]ome
maintenance will be required in the future, however, it will be substantially less maintenance that
in Option 1.” K&H’s report recommended implementation of Option 2, stating:
“This solution most closely resembles the current brick masonry
cladding construction, requires the least amount of additional
engineering services and is most in keeping with the original design
intent of the building. This solution is better than the original
construction in that an AWRM may be readily provided, and that
deficient masonry/window details may be revised and upgraded as
part of the rebuilding effort.”
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¶ 17 The record reflects that K&H estimated that Option 1 would initially cost $6,926,208, but
would entail an “Estimated 15 year maintenance” cost of $2,653,138, for a “Total Projected Cost
for Option No. 1” of $9,579,366. K&H estimated that Option 2 would initially cost $9,392,773,
with an “Estimated 15 year maintenance” cost of $115,735, for a “Total Projected Cost for
Option No. 2” of $9,508,508.
¶ 18 Dispute Between the Prior Board and Dissenting Unit Owners As to Which Option
to Pursue
¶ 19 Many unit owners desired the less costly Option 1, while many members of the Prior Board
preferred Option 2. According to HHCA, in November 2011 (even before K&H’s report was
issued), the Prior Board informed the unit owners that it intended to levy a special assessment of
$10-12 million to implement a complete replacement of the brick façade.
¶ 20 According to HHCA, the special assessment was promoted by six of the Prior Board’s
members, who were “motivated by their own personal interest.” HHCA has alleged that the special
assessment was “vehemently opposed by a minority of the Board, who in turn had the support of
the vast majority of the unit owners.”
¶ 21 According to HHCA, the unit owners who opposed Option 2 and the special assessment
(Dissenting Unit Owners) represented a majority of the total votes of the association. HHCA
alleged that, in late February 2012, certain Dissenting Unit Owners presented the Prior Board with
a notice for a special meeting to vote on the special assessment, but the Prior Board ignored that
notice.
¶ 22 On February 28, 2012, the Prior Board voted to authorize K&H to solicit bids to perform
the Option 2 repairs. In early March 2012, the Dissenting Unit Owners sent notice of a special
meeting to occur on March 27, 2012 to vote on whether to approve or reject the special assessment
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for Option 2. At the March special meeting, 90% of the voting members voted (either in person
or by proxy) to reject the special assessment. According to HHCA, the Prior Board refused to
recognize that vote.
¶ 23 Initiation of the Housing Court Case
¶ 24 On March 13, 2012, the City of Chicago filed a complaint against HHCA relating to the
water intrusion at the building, City of Chicago v. Hemingway Associates, et al., 12 M1 400796
(“Housing Court Case.”) The Housing Court Case was initiated after the City of Chicago Building
Department received a complaint from a resident about water intrusion. According to HHCA, that
resident’s complaint to the Chicago Building Department was “at the instigation of certain of the
Prior Board Members” in order to facilitate implementation of the Option 2 repairs. Kim
represented the HHCA in the Housing Court Case.
¶ 25 The July 10, 2012 Vote on the Special Assessment for Option 2
¶ 26 While the Housing Court Case was pending, on June 29, 2012, the Prior Board sent to unit
owners a notice (drafted by Kim) stating that a special assessment to implement Option 2 would
be put “to a referendum vote of the association’s unit owners” on July 10, 2012. The notice stated
that a majority of the Board strongly supported a special assessment for Option 2 as “the best and
long-term most economical way to solve a serious problem.” The June 29, 2012 notice stated that
on July 10, 2012, the Board would vote on the special assessment to fund Option 2, immediately
followed by a special meeting of the unit owners “to hold a referendum vote on the Special
Assessment *** pursuant to Section 18(a)(8) of the Illinois Condominium Property Act.” The
June 29, 2012 notice told unit owners that in the “days leading up to the July 10th referendum
vote”, they would receive background information on the project as well as a “a proxy for the unit
owners meeting.”
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¶ 27 On July 3, 2012, (seven days before the July 10 meeting), the Prior Board mailed to the
unit owners an “official” proxy form and instructions (drafted by Kim) stating that only the
“official” proxy form would be recognized at the July 10 special meeting, and that all other proxy
forms would be rejected. HHCA alleges that, at Kim’s advice, the Prior Board delayed sending
out the “official” proxy form until just before the July 4th holiday weekend, knowing that many
unit owners would be out of town. HHCA claims this was intended to prevent unit owners from
being able to vote against the Option 2 special assessment.
¶ 28 On July 10, 2012, the Prior Board approved a $12 million special assessment for Option 2.
Shortly thereafter, the unit owners then voted on whether to accept the special assessment.
According to HCAA, approximately 62.5% of the voting members—including those voting with
either the “official” proxy or unofficial proxies—rejected the special assessment. HHCA
acknowledges that, had the unofficial proxies been accepted and counted, the Option 2 special
assessment would not have passed. However, allegedly “pursuant to the scheme devised by Kim”,
the Prior Board disregarded proxy votes that did not use the “official” form. Without counting the
unofficial proxies, less than 50% of voting members rejected the special assessment. Thus, the
Prior Board claimed that the special assessment and Option 2 had not been rejected by the unit
owners, such that the special assessment was ratified pursuant to the Act.
¶ 29 The Housing Court Orders Implementation of Option 2
¶ 30 According to HHCA, Kim also “devised a scheme” to use the Housing Court Case to thwart
the unit owners’ opposition to Option 2. HHCA alleges that Kim proposed entry of order by which
the HHCA would consent to implement Option 2 to address the building code violations alleged
by the City of Chicago. On July 25, 2012, the circuit court presiding over the Housing Court Case
(Hon. Lauretta Higgins Wolfson) entered an order directing that HHCA “must begin work to
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perform repairs described in Option 2 of Klein & Hoffman’s Engineering Report.”2 According to
HHCA, Kim and the Prior Board intended this result, so that they could claim that Option 2 was
“mandated by law.”
¶ 31 The Dissenting Unit Owners’ Unsuccessful Derivative Action in Chancery Court
¶ 32 On July 31, 2012, certain of the Dissenting Unit Owners filed a complaint styled as a
derivative action in the Chancery Division of the Circuit Court of Cook County, Beiler et al. v.
Hemingway House Condominium Association, et al., 12 CH 28179 (Chancery Court Case). The
plaintiffs sued “individually and derivatively” on behalf of themselves and other unit owners,
naming as defendants HHCA and several members of the Prior Board. Plaintiffs in that case
sought, inter alia, a declaration that all of the proxies presented at the July 10 meeting (not just the
“official” proxies) were valid and should have counted against the special assessment, and that the
results of the July 10 special meeting should be declared invalid. The complaint also sought
injunctive relief to prevent the entry of any contract in furtherance of Option 2 or collection of the
special assessment from unit owners.
¶ 33 On July 31, 2012, HHCA (through its attorney, Kim) filed a brief in opposition to the
requested injunctive relief. That brief attached an affidavit from Peter J. Power, an architect and
principal of K&H, stating that K&H continued to recommend Option 2. Power further stated his
opinion, to a “reasonable degree of professional engineering certainty,” that the conditions of the
building constituted an “emergency” within the meaning of section 18(a)(8)(iv) of the Act. 765
ILCS 605/18(a)(8)(iv) (West 2012).
2
Although HHCA’s court submissions repeatedly refer to it as an “agreed” order, the actual order
does not state that it is an “agreed” order.
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¶ 34 The record reflects that in conjunction with the Chancery Court Case, the Dissenting Unit
Owners retained the Thornton Tomasetti engineering firm to review K&H’s proposed Option 2
and suggest alternatives. In a report dated August 28, 2012, Thornton Tomasetti offered its opinion
that K&H’s Option 2 was “overkill.” Thornton Tomasetti indicated that more limited, conventional
repairs would address the water infiltration: “[A] comprehensive facade restoration project that
includes tuckpointing 100% of the mortar joints, repairing brick and concrete deficiencies, and
replacing all of the windows provides a durable solution that will address the water infiltration
issues at Hemingway House.” Thornton Tomasetti estimated that the cost of such conventional
repairs “would be $7,000,000 (vs. over $12,000,000 for K&H’s Option 2).” However, Thornton
Tomasetti’s report did not state whether these more limited repairs would prevent water infiltration
for the same duration as the more comprehensive Option 2.
¶ 35 The record reflects that the chancery court denied the Dissenting Unit Owners’ request for
a temporary injunction, and the Chancery Court Case was abandoned.
¶ 36 The Option 2 Repairs Are Performed
¶ 37 The record indicates that the Prior Board entered into a contract with a general contractor,
Mark 1 Restoration (Mark 1), to implement Option 2. According to HHCA, the contract was
amended (at Kim’s advice) to include a provision imposing a $500,000 penalty on HHCA if it
terminated the contract. HHCA claims this provision was added because Kim and the Prior Board
recognized that the Prior Board members could be voted off the Board and replaced by persons
opposed to Option 2.
¶ 38 Option 2 was ultimately implemented on three of the four sides of the building, while the
fourth side was tuckpointed. Mark 1’s final application for payment, submitted in 2015, indicated
that the “grand total” cost for the Option 2 project amounted to $10,157,654.50.
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¶ 39 Removal of Prior Board Members and Commencement of This Litigation
¶ 40 In September 2012, new board elections resulted in the removal of each of the Prior Board
members who supported Option 2. Ben Beiler, one of the Dissenting Unit Owners, was elected
president. The newly-elected Board (New Board) terminated Kim from acting as HHCA’s counsel.
¶ 41 Following his termination, Kim unsuccessfully requested payment for legal fees incurred
in his prior representation of HHCA. In May 2013, Kim initiated this action by filing a complaint
against HHCA, seeking to recover unpaid legal fees and lates fees totaling $22,118.40. In
September 2013, HHCA filed its answer and initial counterclaim. HHCA filed its First Amended
Counterclaim against Kim in April 2014.
¶ 42 In September 2015, HHCA filed a third-party complaint against K&H. In September 2016,
HHCA filed an amended third-party complaint against K&H and a Second Amended
Counterclaim, including counts against both HHCA and K&H.
¶ 43 HHCA’s Third Amended Counterclaim
¶ 44 In March 2017, HHCA filed a third amended counterclaim, which is the focus of this
appeal. That pleading contained five counts directed to Kim: breach of fiduciary duty (count I),
aiding and abetting breach of fiduciary duty (count II), “aiding and abetting a scheme to defraud”
(count III), civil conspiracy (count IV) and accounting (count V). 3
¶ 45 Count I alleged that Kim breached fiduciary duties owed to the Board and the HHCA
through various acts, including:
• developing a “scheme” for the Board to adopt Option 2 and a special assessment when it
was opposed by a majority of unit owners;
3
HHCA’s separate claims against K&H were settled and dismissed.
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• developing a “scheme” for Prior Board members to circumvent requirements of HHCA’s
Declaration and the Condominium Property Act;
• advising the Board not to accept or count certain proxies in the vote count at the July 2012
special meeting;
• causing the entry of an “agreed order” in the Housing Court case, thereby requiring HHCA
to “repair the building based on the more costly scope of work contained in Option 2 for
the improper purpose of claiming Option 2 was ‘mandated by law’ in order to circumvent
the need to submit the Option 2 repair plan to a vote of the unit owners”;
• advising the Board to disseminate notice of the July 2012 special meeting in a manner to
prevent unit owners from voting against the special assessment by proxy.
¶ 46 In count II, HHCA alleged Kim aided and abetted the Prior Board Members in breaching
their fiduciary duties to the HHCA and unit owners, insofar as Kim advised the Prior Board
Members regarding the special assessment for Option 2. HHCA alleged that Kim “was the
architect of the scheme by which the Prior Board Members sought to place their own personal
interests and pecuniary interests in maximizing the value of their individual units over what was
in the best interests of the Association and contrary to the wishes of the majority of unit owners.”
¶ 47 Count III alleged that Kim aided and abetted a scheme to defraud. Specifically, that count
alleged that the Prior Board Members sent a letter to unit owners containing false statements
regarding the use of proxies. HHCA alleged that Kim assisted the Prior Board Members in a
“scheme to defraud unit owners into revoking the proxies given to the Dissenting Unit Owners.”
In the “Civil Conspiracy” count (count IV), HHCA alleged “Kim conspired with K&H and the
Prior Board Members to breach Kim’s and the Prior Board Members’ fiduciary duties to members
of the Association and defraud members of the Association.”
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¶ 48 The final count of HHCA’s counterclaim sought an “accounting” pertaining to Kim’s
billing statement. HHCA averred that there was a need for discovery regarding the basis of the
amounts claimed,” and that Kim would be unjustly enriched if allowed to recover fees incurred in
aiding, abetting, or conspiring with the Prior Board members.
¶ 49 Kim filed his answer and affirmative defenses in October 2017.
¶ 50 Discovery
¶ 51 The record reflects that the parties engaged in extensive discovery, including the
depositions of Kim, several prior and current Board Members, City of Chicago Building Inspector
Jose Aparacio, and the City’s attorney in the Housing Court Case.
¶ 52 Significant for this appeal, HHCA responded as follows to Kim’s interrogatory requesting
a description of “any and all damages” claimed by HHCA:
“Without waiving its prior objections, Defendant will seek
compensatory damages in an amount that will place the Defendant
in the position it would have been in had the Plaintiff not aided and
abetted the former Board members to defraud the Defendant and the
unitholders of the Property and breach their fiduciary duties. This
sum consists of the amount of the loss occasioned by the Defendant
and other unitholders at the Property as a proximate result of the
Plaintiff’s aiding and abetting the former Board members to defraud
the Defendant and unitholders and breach their fiduciary duties,
which amounts to actual out-of-pocket loss resulting from
implementation of Klein and Hoffman Option 2.
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This sum consists of the difference between the cost of
implementing Klein and Hoffman’s Option 2 (which totaled
$9,508,508 before construction began and $12,800,000 projected
after the project actually began) and the cost of implementing the
option proposed by Thornton Tomasetti, Inc. (estimated at
$6,850,000). Defendant will also seek any diminution in the value
of individual units at the Property, if any, as a result of implementing
Klein and Hoffman’s Option 2, and any increased cost incurred to
obtain financing to pay the special assessment that was imposed on
unitholders as a result of implementing Klein and Hoffman Option
2. Defendant will also seek forfeiture and disgorgement of the
attorneys’ fees paid by the Defendant to the Plaintiff as
compensation for his services during the period he aided and abetted
the breach and the scheme to defraud. Defendant will also request
an award of prejudgment interest at the statutory rate. Defendant
will further seek punitive damages in an amount up to three times
the amount of any compensatory award.”
¶ 53 In April 2018, Kim issued requests for admission to HHCA, relating to whether the New
Board properly voted to approve HHCA’s participation in this litigation. After HHCA objected to
those requests, Kim moved to strike HHCA’s objections and deem certain facts admitted.
¶ 54 On May 31, 2018, after discovery had closed, Kim moved for leave to file amended
affirmative defenses. He sought to add a defense that the New Board failed to vote to authorize
HHCA’s litigation against him in accordance with the Condominium Property Act (Act). At a
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related evidentiary hearing, the court heard testimony from Beiler regarding the New Board’s vote
to approve HHCA’s counterclaim against Kim. The court granted Kim’s motion to strike, deemed
the requests for admission admitted, and granted Kim leave to amend his affirmative defenses. 4
The court subsequently granted HHCA’s motion to reconsider but denied its request to reopen
discovery.
¶ 55 Kim’s Prior Motion for Summary Judgment and HHCA’s Prior Appeal
¶ 56 In August 2018, Kim moved for summary judgment. He argued, inter alia, that HHCA’s
defense and counterclaim were precluded by the Board’s failure to authorize HHCA’s participation
in the litigation. HHCA filed a response in which in maintained that the New Board properly voted
to approve the litigation at a July 2013 meeting, citing Beiler’s testimony.
¶ 57 On October 26, 2018, the trial court granted Kim’s motion for summary judgment,
concluding that HHCA failed to present “evidence that it properly voted on the filing of its
counterclaim in an open meeting” as required by the Act. The trial court found that Beiler’s
testimony indicated only an “informal meeting of the new Board” at which the litigation was
discussed, but not a proper vote. In the same order, the trial court entered judgment in Kim’s favor
with respect to his claim for unpaid legal fees, awarding him $41,614, plus interest.
¶ 58 HHCA appealed (no. 1-19-060), challenging the trial court’s entry of summary judgment
to the extent it found that HHCA’s counterclaim was not authorized by a proper vote. 5 In June
2020, this court reversed, finding a genuine issue of fact precluded summary judgment. Kim v.
4
On October 22, 2018, Kim filed his “Second Affirmative Defenses.”
5
In its prior appeal, HHCA did not challenge the portion of the 2018 summary judgment order
awarding Kim damages on his claim for unpaid legal fees. Likewise, the instant appeal concerns only the
viability of HHCA’s third amended counterclaim.
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Hemingway House Condominium Ass’n, 2020 IL App (1st) 190603-U. We noted that although the
trial court interpreted Beiler’s testimony to reflect only an “informal meeting”, Beiler repeatedly
referred to a July 9, 2013 meeting at which the litigation was discussed in a closed executive
session and then voted upon at an open meeting. As there was “conflicting evidence” regarding
the circumstances of the vote, we found a genuine issue of material fact precluded summary
judgment. Id. ¶ 35.
¶ 59 Our June 2020 order separately rejected Kim’s suggestions that we could otherwise affirm
summary judgment in his favor because the business judgment rule insulated the decisions of the
Prior Board. Id. ¶¶ 36-37. We also rejected Kim’s argument that we could independently affirm
because Option 2 was “mandated by law” due to the order in the Housing Court Case. Id. ¶ 38.
¶ 60 Elsewhere in our June 2020 order, we separately rejected HHCA’s claim that the court
erred in permitting Kim to add a new affirmative defense based on the New Board’s alleged failure
to properly authorize the litigation. Id. ¶ 40. However, we also found that the trial court erred in
denying HHCA’s motion to reopen discovery in light of the new affirmative defense. Id. ¶¶ 43-44.
Thus, we reversed the trial court’s denial of HHCA’s motion to reopen discovery and directed the
trial court to permit “reasonable discovery on Kim’s affirmative defense based on the Board’s
alleged failure to properly authorize HHCA’s participation in this litigation.” Id. ¶ 46.
¶ 61 HHCA’s Motion for Partial Summary Judgment
¶ 62 Following remand to the circuit court, in February 2021, HHCA filed a Motion for Partial
Summary Judgment, in which it sought findings that: (1) the special assessment should have been
adopted pursuant to the provision of the Act applicable to special assessments for “additions or
alterations”; (2) the Prior Board violated the Act by failing to do so; and that (3) in so doing, the
Prior Board breached its fiduciary duties to the unit owners. According to HHCA, the special
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assessment for Option 2 was governed by the provision of the Act requiring approval of at least
two-thirds of the votes of all unit owners for “additions or alterations to the common elements.”
765 ILCS 605/18(a)(8)(v) (West 2012). However, the Prior Board adopted the assessment under
the provision by which a special assessment will be ratified unless a majority of the total votes of
the unit owners are cast to reject it. 765 ILCS 605/18(a)(8)(ii) (West 2012)(“if an adopted budget
or any separate assessment adopted by the board would result in the sum of all regular and separate
assessments payable in fiscal year exceeding 115% of the sum of all regular and separate
assessments payable during the preceding fiscal year, the board of managers, upon written petition
by unit owners *** shall call a meeting of the unit owners *** to consider the budget or separate
assessment; unless a majority of the total votes of the unit owners are cast at the meeting to reject
the budget or separate assessment, it is ratified.”).
¶ 63 In his response, Kim argued the motion was improper insofar as HHCA sought findings as
to legal issues that were not appropriate for summary determination. Kim otherwise argued that
Option 2 was not an “addition or alteration” to common elements that would require approval by
a two-thirds vote under section 18(a)(8)(v) of the Act. Rather, Kim argued Option 2 and the special
assessment did not require approval of the unit owners, because there was an “emergency” within
the meaning of section 18(a)(8) of the Act and because Option 2 was legally required by the July
2012 order in the Housing Court Case.
¶ 64 Kim separately asserted that it was improper for HHCA to seek a determination that the
Prior Board Members breached their fiduciary duties, since they were not parties to this action and
lacked “an opportunity to defend themselves.” Kim otherwise argued that the business judgment
rule applied to the decisions of the Prior Board Members.
¶ 65 Kim’s Renewed Motion for Summary Judgment
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¶ 66 On March 12, 2021, Kim filed a “Renewed Motion for Summary Judgment” in which he
asserted a number of different grounds for dismissal of each of the five counts of the counterclaim.
Kim primarily asserted that there was no evidence that HHCA suffered any damages from the
implementation of Option 2. Kim pointed out that HHCA’s interrogatory response indicated its
belief that its damages consisted of the difference between the cost of Option 2 and the cost of
implementing conventional repairs. Kim argued although Option 2 was “more costly than Option
1”, it was a “far-superior, longer-lasting fix to [the] water infiltration problem” that continues to
benefit HHCA. Kim argued the evidence showed that Option 1 was merely a “stop-gap” measure,
whereas Option 2 was longer-lasting and the “best permanent fix.”
¶ 67 Kim further argued that any award of damages would result in a “windfall” for HHCA,
because it already had the benefit of Option 2. That is, if HHCA could recover damages, HHCA
“would have an upgraded, fully-repaired building and full payment for the upgrade” and would be
“better off than they were before” this litigation.
¶ 68 Kim separately argued that under the doctrine of judicial estoppel, HHCA was precluded
from arguing that Kim and the Prior Board acted improperly, given HHCA’s positions in prior
litigation. Kim pointed out that in the Chancery Court Case (before the change in Board
membership), HHCA defended the Prior Board’s actions. Kim averred that, in this case, HHCA
had taken conflicting positions as to whether the Prior Board breached its fiduciary duties, whether
Option 2 was a viable alternative, and whether the Prior Board “acted improperly in voting to allow
the special assessment.”
¶ 69 As a separate basis for summary judgment, Kim urged that HHCA could not overcome the
business judgment rule and “attorney judgment.” He argued that the Prior Board made a well-
reasoned decision to adopt Option 2, relying upon qualified experts. He also argued that the Prior
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Board reasonably relied on Kim’s legal advice. Kim thus suggested HHCA could not establish the
Prior Board committed a breach of fiduciary duty, and so “the allegations of conspiracy and aiding
and abetting [against Kim] must fail.” Kim similarly asserted that under the doctrine of
“judgmental immunity”, he could not be held liable for advice to the Prior Board that was the result
of his honest exercise of professional judgment.
¶ 70 Kim elsewhere urged HHCA failed to identify any evidence that any Prior Board member
breached a fiduciary duty, engaged in a conspiracy with Kim, or engaged in a scheme to defraud.
Rather, he asserted the evidence established that Prior Board members acted reasonably and relied
on professional advice. Finally, Kim asserted that HHCA failed to offer any reason why an
accounting was necessary.
¶ 71 On April 9, 2021, HHCA filed its opposition to Kim’s motion for summary judgment. In
response to Kim’s argument that HHCA had not identified any damages, HHCA cited its
interrogatory response and maintained that “its damages are the difference between the cost of
Option 2 estimated to be 12.8 million and the cost of Option 1 estimated to be $6.85 million.”
HHCA also cited evidence of the cost disparity between the two options, including “Final Payment
Certification” from Mark 1 indicating that the total cost to implement Option 2 was
$10,157,654.50. HHCA also pointed out that K&H, Thornton Tomasetti, and BTC estimated a
much lower cost for Option 1, i.e. conventional repairs. HHCA thus claimed there was “ample
evidence of HHCA’s damages.”
¶ 72 Insofar as Kim’s motion argued that Option 2 was a superior and “longer-lasting fix”,
HHCA responded that “Option 2 was “a more expensive alternative than necessary to address the
water intrusion”. HHCA cited Thornton Tomasetti’s August 2012 report stating that Option 2 was
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“overkill.” HHCA did not dispute that Option 2 was a longer-lasting solution than Option 1, but
claimed that Thornton Tomasetti’s report indicated that “Option 1 would have worked fine.”
¶ 73 With respect to Kim’s reliance on judicial estoppel, HHCA argued that even assuming the
necessary factors were present, the doctrine should not be applied if there is no “intent to mislead.”
HHCA argued application of the doctrine would be unjust, since HHCA’s inconsistent positions
were caused by the fact that the Prior Board caused it to take positions in the Housing Court Case
that were the opposite of its positions under the New Board.
¶ 74 With respect to the business judgment rule, HHCA argued that it would not shield Kim
from liability, regardless of whether Option 2 was reasonable. HHCA claimed that the business
judgment rule did not apply because the Prior Board did not take due care and acted in bad faith,
including by failing to investigate “less costly alternatives” to Option 2. HHCA also asserted that
the Prior Board acted in bad faith by, inter alia, (1) failing to adopt the special assessment under
the provision of the Act applicable to additions or alterations of common elements, (2) failing to
accept proxy votes other than the “official” proxy for the July 2012 vote on the special assessment,
and (3) unreasonably relying on Kim’s advice to reject the unofficial proxies, which resulted in
suppression of votes against the special assessment.
¶ 75 HHCA elsewhere argued that Kim could not rely on “judgmental immunity” because that
doctrine “applies only to legal malpractice cases” and to attorney conduct during litigation. HHCA
further argued that judgmental immunity would not apply because “Kim’s advice to the Prior
Board was not in good faith.”
¶ 76 HHCA otherwise argued that Kim, as movant, failed to “present any evidence or authority
that precludes HHCA from establishing an element of a cause of action.” HHCA argued it had
raised issues of fact as to whether the Prior Board breached its duties to unit owners. With respect
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to the conspiracy count, HHCA maintained that it demonstrated that “Kim and the Prior Board
collaborated to violate the Act to the detriment of the unit owners.” With respect to the count
seeking an accounting, HHCA also claimed Kim had not meet his burden on summary judgment
to “show that there is no genuine issue of material fact that there is no reason for an accounting.”
¶ 77 In his reply in further support of his renewed motion for summary judgment, Kim again
urged that there was no evidence to support any damages, as HHCA’s only alleged damage was
the cost differential between Option 1 and Option 2. Kim argued that HHCA did not address the
fact that it “benefits from the more expensive option.” Kim averred that since the building
continues to enjoy the benefit of Option 2, an award of the claimed damages would amount to a
“multi-million dollar windfall to HHCA.” Kim acknowledged that Option 2 was more expensive
than Option 1, but emphasized that this was because Option 2 was a “long-term fix” to the water
intrusion problem. Kim argued any monetary judgment would result in HHCA being “better off
than it was if Option 1 was originally implemented”, contrary to the law of compensatory damages.
¶ 78 Kim otherwise argued in his reply that the business judgment rule applied because the Prior
Board relied on the recommendations of engineers (BTC and K&H) in selecting Option 2; the
Prior Board properly relied on Kim’s legal advice; and the courts in the Chancery Court Case and
Housing Court Case agreed with implementation of Option 2. Kim also reasserted his position that
“judgmental immunity” applied, because his advice had been well-reasoned.
¶ 79 The Court Denies HHCA’s Motion for Partial Summary Judgment And Enters
Summary Judgment for Kim on Four of the Five Counts of the Counterclaim
¶ 80 On August 5, 2021, the court entered an order (1) denying HHCA’s motion for partial
summary judgment and (2) granting Kim’s motion for summary judgment with respect to four of
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HHCA’s counterclaims. That order did not reference the counterclaim’ count for breach of
fiduciary duty.
¶ 81 The court first addressed HHCA’s partial motion for summary judgment. The court found
that the motion was improper, insofar as it sought findings that the Prior Board’s actions did not
comply with the Act. The court noted that section 1005(d) of the Code of Civil Procedure only
permits a summary determination of facts that are “major issues in the case.” 735 ILCS 5/2-1005(d)
(West 2020). The court remarked that HHCA was “essentially seeking an advisory opinion that
[the Prior Board] acted improperly. These issues are not ‘facts’ and do not form essential elements
of HHCA’s claim against Kim.” The court also indicated it was improper for HHCA to seek a
finding that Prior Board members breached their fiduciary duties, when they were not parties in
this action. The court otherwise found “significant issues of fact that would preclude a finding
regarding actions of [the Prior Board]”, including evidence “supporting application of the business
judgment rule.”
¶ 82 Turning to Kim’s motion for summary judgment, the court emphasized that, while HHCA
accused Kim of aiding and abetting the Prior Board’s wrongful conduct, HHCA had never directly
sued members of the Prior Board. The court noted that to prove that Kim aided and abetted a
breach of fiduciary duty, HHCA would need to show that the Prior Board breached its fiduciary
duty. However, the court found that the evidence “does not establish any breach of fiduciary duty
or fraud” by the Prior Board. The court found that, “without a proven breach of fiduciary duty or
fraud by Kim or by [the Prior Board],” HHCA’s counterclaims for aiding and abetting breach of
fiduciary duty (count I) and aiding and abetting a scheme to defraud (count II) could not be
sustained. As for the civil conspiracy count against Kim (count III), the court found “[n]o evidence
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has been presented that there existed ‘coconspirators’ who committed an ‘overt tortious or
unlawful act,” so Kim was entitled to summary judgment on that count.
¶ 83 The court proceeded to find that Kim was also entitled to summary judgment on the
counterclaim seeking an accounting. The court recited that, to sustain an action for an accounting
in equity, the complaint “must allege the absence of an adequate remedy at law and one of the
following: a breach of fiduciary relationship, a need for discovery, fraud, or the existence of mutual
accounts which are of a complex nature.” (citing Peddinghaus v. Peddinghaus, 295 Ill. App. 3d
943 (1998). The court found that HHCA had not established a “breach of [a] fiduciary relationship
between the parties or fraud.”
¶ 84 In subsequent portions of the same order, the court went on to conclude that Kim was also
entitled to summary judgment due to (1) lack of damages, (2) estoppel; and (3) application of the
business judgment rule.
¶ 85 With respect to damages, the court recognized that HHCA claimed its damages consisted
of the cost difference between Option 1 and Option 2. The court reasoned that “if the court were
to rule as a matter of law that HHCA can seek damages in this case, it would permit HHCA to
enjoy a windfall” as it already had an “upgraded, fully-repaired building.” The court noted that
HHCA did not dispute that Option 2 was successfully completed, but took the position that
“something less expensive should have been done.” The court emphasized that HHCA “does not
argue that it did not receive the complete benefit of Option 2’s $12.8 million repair, just that HHCA
would rather it have received Option 1 at a lower cost.” The court found HHCA “failed to establish
that it has been damaged by Option 2.”
¶ 86 Separately, the court agreed with Kim that HHCA was “judicially estopped” from alleging
that Kim and the Prior Board acted improperly, because HHCA defended the Prior Board’s actions
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in the Chancery Case and the Housing Court Case. The court agreed with Kim that HHCA could
not “ ‘switch positions’ in this litigation.”
¶ 87 The court further found that summary judgment was warranted by the “business judgment
and attorney judgment rules.” The court cited the proposition that if a board properly exercises its
business judgment in interpreting its own declarations, it does not breach its fiduciary duty if it
was sufficiently informed. The court found the evidence showed that in selecting with Option 2,
the Prior Board “relied on retained, qualified experts” and “chose the option recommended by the
only independent experts who recently viewed the building.” The court also noted that the decision
to proceed with Option 2 was “approved” by the Housing Court Case order requiring HHCA to
implement Option 2.
¶ 88 The court’s August 5, 2021 order thus (1) denied HHCA’s motion for partial summary
judgment and (2) granted Kim summary judgment on “HHCA’s four counterclaims.”
¶ 89 The Court Grants Summary Judgment in Kim’s Favor on the Remaining Count
¶ 90 Shortly thereafter, HHCA filed a motion pointing out that the August 5, 2021, order
referenced four of its claims against Kim but did not rule on HHCA’s remaining count for breach
of fiduciary duty (count I). On August 19, 2021, the court entered an “Order to Clarify” its prior
order, specifying that it was also entering summary judgment in Kim’s favor with respect to count
I of the counterclaim.6
¶ 91 The court noted that a claim for breach of fiduciary duty against an attorney is “essentially
a legal malpractice claim” and that “actual damages are an essential element of a claim for
6
The court acknowledged that its prior order had not separately discussed that claim, because Kim’s
motion for summary judgment had not “explicitly” sought dismissal of count I. However, the court
recognized that the prayer for relief in Kim’s motion sought summary judgment as to “all Counts” in
HHCA’s counterclaim.
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No. 1-21-1115
professional wrongdoing.” The court proceeded to find that HHCA could not establish damages
to support a beach of fiduciary duty claim against Kim, because it could not show damages
resulting from implementation of Option 2. The court noted that HHCA’s interrogatory response
indicated it sought damages to place it “in the position it would have been in” had Kim not assisted
the Prior Board in implementing Option 2. However, the court reasoned that:
“[V]iewing the matter practically, it is impossible to put HHCA in
the position it would have been in since that would require removal
of the work performed. To this day, HHCA enjoys the benefit of
Option 2, a repair that is presented to be of a longer-lasting fix to its
water infiltration problem ***. Although Option 2 was more costly
than Option 1, it carried added benefits, and HHCA does not dispute
this. HHCA is simply unable to cite any case law or legal authority
that permits speculative damages of this nature.”
The court indicated that a damages award would permit HHCA to “enjoy a windfall” and be “better
off than they were before this suit.”
¶ 92 The court concluded that “regardless of whether [the Prior Board] or Kim acted improperly,
there simply is no evidence that HHCA was damaged” by implementation of Option 2. On that
basis, the court found that Kim was also entitled to summary judgment on count I of the third
amended counterclaim.
¶ 93 HHCA filed a timely notice of appeal, specifying that it sought reversal of (1) the portion
of the August 5, 2021 order granting Kim summary judgment on four of the five counterclaims;
(2) the portion of that order denying HHCA’s motion for partial summary judgment, and (3) the
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August 19, 2021 order granting Kim summary judgment on the remaining count for breach of
fiduciary duty.
¶ 94 After HHCA’s opening brief was filed, Kim filed a motion to strike the portion of HHCA’s
opening brief challenging the denial of HHCA’s motion for partial summary judgment, claiming
this court is without jurisdiction to review that ruling. That motion was taken with the case.
¶ 95 ANALYSIS
¶ 96 On appeal, HHCA urges that the trial court erred in granting summary judgment to Kim on
each of the five counts of its counterclaim. HHCA separately argues that the court erred in denying
its motion for partial summary judgment.
¶ 97 With respect to entry of Kim’s summary judgment motion, HHCA contends that summary
judgment was erroneous on a number of bases. It asserts there was evidence that Kim aided the
Prior Board Members in breaching their fiduciary duties, including by advising the Prior Board to
adopt the special assessment for Option 2 under the incorrect provision of the Act. HHCA
maintains there is evidence showing that Option 2 was an addition or alteration to the common
elements, such that the special assessment required the vote of two-thirds of unit owners under
section 18(a)(8)(v) of the Act. 765 ILCS 605/18(a)(8)(v) (West 2012).
¶ 98 HHCA also asserts that the circuit court erred in finding no evidence that the Prior Board
members committed fraud against the unit owners, including with respect to the Prior Board’s
decision to only count those proxy votes cast with the “official” proxy form. HHCA maintains
there is evidence that the Prior Board deliberately failed to properly inform unit owners that only
“official” proxy votes would be counted in the July 2012 vote on the special assessment.
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No. 1-21-1115
¶ 99 HHCA elsewhere argues that the court erred, insofar as it granted summary judgment due
to lack of evidence of damages. HHCA maintains that it was damaged because Option 2 was
costlier than Option 1.
¶ 100 HHCA elsewhere asserts that the circuit court erred to the extent that it applied judicial
estoppel arising from HHCA’s earlier positions in the Housing Court Case and the Chancery Court
Case. HHCA also urges that the circuit court erred in relying on the business judgment rule. Insofar
as the circuit court repeatedly noted that HHCA did not sue any of the Prior Board members,
HHCA maintains that those individuals were not necessary parties.
¶ 101 In addition to its challenges to the entry of summary judgment in Kim’s favor, HHCA
maintains the court erred in denying its motion for partial summary judgment. HHCA contends
that the issue of whether Option 2 involved “additions or alterations” within the meaning of the
18(a)(8)(v) of the Act was a proper factual issue for summary determination.
¶ 102 As discussed below, we agree with the trial court that Kim was entitled to summary
judgment because HHCA failed to establish proof of an injury or damages to support any cause of
action in the third amended counterclaim. To be clear, we do not take a position as to whether Kim
or the Prior Board engaged in improper conduct related to Option 2 and the corresponding special
assessment. Nevertheless, even assuming that Kim and the Prior Board committed the alleged
wrongful conduct, the record does not show any cognizable resulting injury, as it is undisputed
that HHCA obtained the expected benefits of Option 2. Although Option 2 was costlier than Option
1, Option 2 was a longer-lasting solution, from which the building continues to benefit. The
absence of an actual injury or damages is dispositive in Kim’s favor, regardless of whether we
would otherwise condone his conduct.
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¶ 103 Standard of Review
¶ 104 “Summary judgment is appropriate only where ‘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.’ ” Carney v. Union
Pacific R.R. Co., 2016 IL 118984, ¶ 25 (quoting 735 ILCS 5/2-1005(c) (West 2012)). “In
determining whether a genuine issue as to any material fact exists, a court must construe the
pleadings, depositions, admission, and affidavits strictly against the movant and liberally in favor
of the opponent.” Lewis v. Lead Industries Ass’n, 2020 IL 124107, ¶ 15.
¶ 105 Insofar as Kim sought summary judgment with respect to HHCA’s counterclaim, Kim was
in the position of a defendant seeking summary judgment. “A defendant moving for summary
judgment may meet its initial burden of proof by affirmatively showing that some element of the
case must be resolved in his favor or by establishing that there is an absence of evidence to support
the nonmoving party’s case. [Citation.]” Freedberg v. Ohio Nat. Ins. Co., 2012 IL App (1st)
110938, ¶ 25. “Although a plaintiff is not required to prove his case at the summary judgment
stage, in order to survive a motion for summary judgment, the nonmoving party must present a
factual basis that would arguably entitle the party to a judgment. [Citation.]” Robidoux v. Oliphant,
201 Ill. 2d 324, 335 (2002). Put differently, “[i]f the plaintiff fails to establish any element of the
cause of action, summary judgment for the defendant is appropriate. [Citations.]” Lewis, 2020 IL
124107, ¶ 15.
¶ 106 “In appeals from summary judgment rulings, the standard of review is de novo. [Citations]”
Lewis, 2020 IL 124107, ¶ 15. We keep in mind that “we review only the court’s ultimate judgment,
not its reasoning in support of that judgment.” Jarosz v. Buona Companies, LLC, 2022 IL App
(1st) 210181, ¶ 29 (citing Makowski v. City of Naperville, 249 Ill. App. 3d 110, 115 (1993)). Thus,
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we may affirm a grant of summary judgment on any ground apparent from the record. Catom
Trucking, Inc. v. City of Chicago, 2011 IL App (1st) 101146, ¶ 9.
¶ 107 Here, although the trial court offered several reasons for granting summary judgment on
each of the five counterclaims, we need not discuss them all to affirm. The record is clear that
HHCA suffered no cognizable injury or compensable damages from the implementation of Option
2. Although that option was more expensive than the conventional repair option (Option 1), there
is no dispute that there was a legitimate reason for this: Option 2 conferred the benefit of a more
comprehensive, longer-lasting solution, corresponding to its higher cost. HHCA has never
disputed that Option 2 was superior in this respect, or claimed that Option 2 has not provided the
expected benefit. Accordingly, HHCA cannot prove an injury or damages to sustain any of the five
counts of the counterclaim.
¶ 108 HHCA Did Not Suffer an Injury Merely Because Option 2 Was Costlier Than
Option 1
¶ 109 As the circuit court recognized, the entire basis of HHCA’s claimed injury is that the Prior
Board (with Kim’s advice) adopted a comprehensive repair solution (Option 2) that was more
expensive than the conventional repair program (Option 1) that many unit owners preferred. That
is, HHCA’s theory of recovery is that the Prior Board’s solution was “overkill” and more expensive
than necessary. However, we find no basis in law for finding that the mere fact of a cost differential
equates to an actual injury or compensatory damages. Indeed, since HHCA has never claimed that
Option 2 has not performed as expected or that it was not worth its higher cost, any award of
damages would amount to a windfall for HHCA.
¶ 110 We recognize that although the counterclaim contained five separate counts, a showing of
an actual injury is a necessary component for any cause of action. Our supreme court “has
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No. 1-21-1115
repeatedly ‘observe[d] that, because a plaintiff can sustain a cause of action only where he or she
has suffered some injury to a legal right, harm caused by the defendant’s conduct is an essential
element of every cause of action.’” Lewis, 2020 IL 124107, ¶ 29 (quoting Lutkauskas v. Ricker,
2015 IL 117090, ¶ 31). “The wrongful or negligent act of the defendant, by itself, gives no right
of action to anyone. Until the defendant’s wrongful or negligent act produced injury to the
plaintiff’s interest by way of loss or damage, no cause of action accrues.” (Emphasis added).
Lewis, 2020 IL 124107, ¶ 29; see also Nettleton v. Stogsdill, 387 Ill. App. 3d 743, 748 (2008) (even
if an attorney is proven negligent, “a plaintiff cannot recover for legal malpractice unless he also
proves that the attorney’s negligence proximately caused her damages.”). Similarly, we recognize
that “[t]he purpose of compensatory tort damages is to compensate [citation]; it is not the purpose
of such damages to punish defendant or bestow a windfall upon plaintiffs.” Willis v. Foster, 229
Ill. 2d 393, 401 (2008).
¶ 111 Here, even if Kim and the Prior Board engaged in the alleged wrongful conduct, the record
shows no injury or damages. Importantly, HHCA’s sole theory of injury is that Kim’s wrongful
conduct caused the implementation of Option 2, which was more costly than Option 1. In its
interrogatory responses and in opposition to Kim’s motion for summary judgment, HHCA took
the position that “its damages are the difference between the cost of Option 2 estimated to be 12.8
million and the cost of Option 1 estimated to be 6.85 million.” On appeal, HHCA likewise
acknowledges that its theory of damages is solely premised on “the difference between the actual
cost of the Option 2 repairs and the estimated cost of the Option 1 repairs.”
¶ 112 There is no dispute that Option 2 was more expensive than Option 1. Yet, that does not
mean that HHCA suffered an injury. Significantly, the record makes apparent that Option 2 was
more expensive for good reason: it was a more comprehensive solution—complete replacement of
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No. 1-21-1115
the building’s brick masonry—that was expected to be longer-lasting and require lower future
maintenance costs than the more limited repairs under Option 1. This is made clear by K&H’s
February 2012 report to HHCA discussing the pros and cons of various options and explaining its
recommendation of Option 2. K&H explained that while Option 1 cost less, it “will not eliminate
the water infiltration problems” and would entail higher maintenance costs in the ensuing years.
In contrast, K&H explained that the complete brick replacement in Option 2 would “allow[] for
correction of all observed deficiencies” and would require “substantially less maintenance” than
Option 1. K&H also recommended Option 2 because it “requires the least amount of additional
engineering services”, was “most in keeping with the original design intent of the building” and
was “better than the original construction” in that it would include an all-weather resistant barrier.
Notably, HHCA does not cite any evidence contradicting these statements.
¶ 113 We recognize that HHCA cites Thornton Tomasetti’s August 28, 2012 report as evidence
that “Option 1 and Option 2 would have accomplished the same purpose” and were “equally
effective at curing the water intrusion.” However, this mischaracterizes the document. To be sure,
Thornton Tomasetti opined that Option 2 was “overkill” and that “conventional repairs” would
address the water infiltration issues for $7 million, several million dollars less than the projected
cost of Option 2. While the Thornton Tomasetti report indicated that conventional repairs would
provide a “durable solution that will address the water infiltration issues”, contrary to HHCA’s
suggestion, it does not state that it was equal in durability to Option 2. Nor does that report support
HHCA’s suggestion that either Option 1 or 2 “would have resulted in the same ‘upgrade’ to the
building because both would have stopped the water leakage.” While both solutions may have
worked as an immediate solution to the water intrusion, there is no evidence that Option 1 and 2
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No. 1-21-1115
were equally durable or cost-effective. As the trial court recognized, HHCA has never disputed
that Option 2 offered longer-lasting protection than more limited, cheaper repairs of Option 1.
¶ 114 Furthermore, HHCA has not disputed that it has, in fact, received the full expected benefit
of Option 2. HHCA has never suggested that Option 2 has been ineffective in addressing the water
intrusion in the several years since it was implemented. Nor does it offer any evidence to dispute
that Option 2 will continue to be effective for years to come with far less required maintenance
costs than would have been required for Option 1.
¶ 115 Instead, HHCA suggests that it suffered a compensable injury because the Prior Board
(with Kim’s help) did not implement the cheapest solution to address the immediate water
intrusion problem. In other words, HHCA claims it was damaged because Option 2 was more
thorough and expensive than necessary, i.e. that it was “overkill.”
¶ 116 This theory of injury is not supported by the record or the law. HHCA does not cite to any
legal authority suggesting that a plaintiff may premise an injury on defendant electing a more
comprehensive, expensive solution than a cheaper alternative, especially where there is undisputed
evidence of a legitimate reason why the selected option was costlier.
¶ 117 We emphasize that HHCA did not identify any evidence to suggest that Option 2 has not,
or will not continue to, confer the longer-term benefit corresponding to its higher cost. That is, it
has not disputed that Option 2 was actually worth its price. In turn, HHCA has not established an
injury resulting from Kim’s allegedly wrongful conduct. Indeed, an award of damages would put
the HHCA in a better position that it was before – that is, it would continue to experience the
benefit of Option 2, plus additional damages.
¶ 118 This result would be contrary to our precedent. It is well-settled that compensatory
damages should not put plaintiff in a better position than before the wrongful conduct, as it would
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No. 1-21-1115
result in an improper windfall. See Eastman v. Messner, 188 Ill. 2d 404, 411-12 (1999) (a plaintiff
who recovers in a legal malpractice suit against a former attorney cannot be put in a better position
by suing the attorney than had the underlying action been successful, and so a plaintiff’s damage
are “limited to the actual amount the plaintiff would have received had he been successful in the
underlying case”); Nettleton, 387 Ill. App. 3d at 749 (“A successful legal malpractice claim places
the plaintiff in the same position that she would have occupied but for the attorney’s negligence”);
Arthur v. Catour, 345 Ill. App. 3d 804, 806 (2004) (the purpose of compensatory tort damages is
to compensate the plaintiff, not to punish defendants or “bestow a windfall upon plaintiffs”
(quoting Wilson v. Hoffman Group, Inc. 131 Ill. 2d 308, 321 (1989)).
¶ 119 We briefly note that HHCA suggests that, even if there are no legitimate compensatory
damages, it should be able to seek nominal damages, and in turn could seek punitive damages.
However, HHCA’s third amended counterclaim did not seek nominal or punitive damages.
Moreover, “In order to be entitled to punitive damages, one must allege outrageous conduct, acts
perpetrated by evil motive or with reckless indifference to the rights of others.” Guice v. Sentinel
Technologies, Inc. 294 Ill. App. 3d 97, 110-111 (1997). HHCA’s counterclaim does not meet
these pleading requirements.
¶ 120 Before concluding, we wish to emphasize that this decision should not be construed as a
determination as to the propriety of Kim and the Prior Board’s conduct. We specifically note we
are troubled by the allegations pertaining to the manner in which the Prior Board (with Kim’s
assistance) notified the unit owners of the July 2012 special meeting for a referendum on the
special assessment and their decision to require an “official” proxy form for that meeting. We note
that section 5.05 of the HHCA’s declaration requires notice of a special meeting to be delivered at
least 10 days before the meeting. Here, the record reflects that the notice was sent on June 29,
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2012, more than 10 days before the scheduled meeting. Yet, inexplicably, the “official” proxy form
was not sent until seven days before the meeting, July 3, 2012.7 And as HHCA emphasizes, that
was the day before the July 4th holiday, when it would be reasonable to expect that some unit
owners would be unavailable. This raises legitimate concerns as to whether this timing was
intended to preclude participation in the July 10, 2012 vote.
¶ 121 The parties dispute whether it was permissible for the Prior Board to (1) designate an
“official” proxy for the July 10, 2012 meeting and (2) distribute that form on July 3, 2012. The
parties do not identify any controlling precedent on these issues. However, even if the Prior
Board’s conduct is questionable, this is unavailing to HHCA, as it does not affect the lack of an
identifiable resulting injury. This poses an independent barrier to its claims for relief, even if we
were to otherwise find that Kim and the Prior Board’s conduct was deceptive or breached their
fiduciary duties.
¶ 122 In summary, we find that there is no evidence of an injury or damages to sustain any of the
causes of action in HHCA’s third amended counterclaim. On this basis, we affirm the entry of
summary judgment in Kim’s favor on all five causes of action. As the lack of injury or damages is
dispositive, we need not address any of the parties’ remaining arguments as to the other bases for
dismissal identified by the circuit court, such as judicial estoppel and the business judgment rule.
¶ 123 Similarly, in light of our determination that HHCA cannot sustain any portion of its
counterclaim, there is no need for us to address HHCA’s challenge to the denial of its motion for
partial summary judgment. In that motion, HHCA sought findings that the Prior Board breached
7
The parties do not identify any provision of the Declaration indicating whether the Board may
require an “official” proxy form for a particular meeting of unit owners, or when such form must be
distributed.
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No. 1-21-1115
its fiduciary duties because it adopted the special assessment for Option 2 under the wrong
provision of section 18(a) of the Act, in order to avoid the requisite approval by two-thirds of unit
owners. However, even if those claims were otherwise meritorious, HHCA has not identified any
cognizable injury resulting from the implementation of Option 2. Thus, HHCA cannot avoid
summary judgment, regardless of whether its motion for partial summary judgment had merit. 8
¶ 124 For the foregoing reasons, we affirm the judgment of the circuit court of Cook County.
¶ 125 Affirmed.
8
In light of this conclusion, Kim’s motion in this court to strike the portion of HHCA’s opening
brief regarding denial of HHCA’s motion for partial summary judgment is rendered moot.
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