Vite v. Vargason

2022 IL App (2d) 220143No. 2-22-0143
Opinion filed July 21, 2022
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
______________________________________________________________________________
MICHAEL VITE, ) Appeal from the Circuit Court
) of Kane County.
Plaintiff-Appellee, )
)
v. ) No. 19-CH-932
)
FRED VARGASON and ST. CHARLES )
PONTIAC, INC., d/b/a Nissan of St. Charles, )
)
Defendants ) Honorable
) Kevin T. Busch,
(Fred Vargason, Defendant-Appellant). ) Judge, Presiding.
______________________________________________________________________________
MICHAEL VITE, ) Appeal from the Circuit Court
) of Kane County
Plaintiff-Appellee, )
)
v. ) No. 20-CH-306
)
FRED VARGASON; ST. CHARLES )
INVESTMENTS, LLC; NISSAN OF ST. )
CHARLES INSURANCE AGENCY, LLC; )
MILL CREEK INVESTMENTS, INC.; )
ROYAL HAWK REINSURANCE )
COMPANY; CKD INVESTMENT, INC.; )
and POLSINELLI, P.C., )
)
Defendants ) Honorable
) Kevin T. Busch
(Fred Vargason, Defendant-Appellant). ) Judge, Presiding.
______________________________________________________________________________
2022 IL App (2d) 220143JUSTICE JORGENSEN delivered the judgment of the court, with opinion.
Presiding Justice Bridges and Justice Schostok concurred in the judgment and opinion.
OPINION
¶1 Defendant Fred Vargason appeals from the circuit court’s April 1, 2022, order denying his
motion to modify the receivership order that was entered on October 13, 2020. We conclude we
lack jurisdiction and, therefore, dismiss the appeal.
¶2 I. BACKGROUND
¶3 This case involves two separate actions, case Nos. 19-CH-932 and 20-CH-306, initiated by
plaintiff, Michael Vite, which were consolidated for discovery on October 7, 2020, against
Vargason; St. Charles Pontiac, Inc., doing business as Nissan of St. Charles (dealership); St.
Charles Investments, LLC; Mill Creek Investments, Inc.; Royal Hawk Reinsurance Company;
CKD Investment, Inc.; and Polsinelli, P.C. We have previously generally described the actions.
See Vite v. Vargason, 2020 IL App (2d) 200487-U (dismissing Vargason’s appeal from a
temporary restraining order). In the actions, Vite alleged in part that he had made a “Commissions
Loan” to the dealership, which was owned by Vargason. The commissions loan consisted of
deferred commissions to which Vite was entitled. He asserted, among other claims, a breach-of-
contract claim based on the dealership’s failure to repay the commissions loan and sought money
damages.
¶4 Before filing the actions, however, in 2019, Vite filed a wage claim with the Department
of Labor (Department) under the Illinois Wage Payment and Collection Act (820 ILCS 115/1
et seq. (West 2018)). The wage claim was duplicative of the breach-of-contract claim, in that it
sought payment of unpaid commissions.
¶5 On October 13, 2020, the circuit court appointed Thomas Springer as receiver for all
defendants in both actions (the receivership defendants), except Polsinelli, P.C., a law firm that
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2022 IL App (2d) 220143represented Vargason. In a written order, the court defined the scope of Springer’s appointment.
Springer had the sole authority to “[p]rosecute or defend any actions, suits, claims, or other
proceedings before any *** administrative body *** on behalf and in the name of the Receivership
Defendants,” except that Springer had “no rights, powers, authorities, duties, responsibilities, or
obligations with respect to any defense of *** Vargason, individually or personally.” The order
also required Vargason to immediately cease acting as an employee or agent of the receivership
defendants and prohibited him from “attempt[ing] to exercise any corporate governance or
management control over” the receivership defendants.
¶6 On October 21, 2021, an administrative law judge (ALJ) heard Vite’s wage claim. Neither
a representative of the dealership nor Vargason appeared. After hearing testimony, the ALJ found
in Vite’s favor and also determined Vargason was personally liable. See id. § 2; 56 Ill. Adm. Code
300.620 (2014) (providing for personal liability of corporate officers for wages and final
compensation).
¶7 On December 13, 2021, Vargason moved to reconsider the ALJ’s decision, asking the ALJ
to vacate his decision and reset the hearing, so Vargason could attend and “defend our company
position.” On December 20, 2021, the Department’s chief ALJ vacated the decision.
¶8 On December 29, 2021, Vite petitioned for a rule to show cause against Vargason, alleging
Vargason violated the receivership order by representing to the Department that he had the
authority to act for the dealership. On February 9, 2022, the circuit court issued the rule to show
cause and ordered Vargason to appear on March 30, 2022, to show why he should not be held in
contempt.
¶9 In the meantime, on February 18, 2022, Vargason filed a “Motion for Leave to Represent
Corporation Before the Department of Labor,” which is the subject of this appeal. In the motion,
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2022 IL App (2d) 220143Vargason asked the circuit court to modify the receivership order, specifically, by granting him
the authority to defend the dealership in the proceedings before the Department and requiring
Springer to cooperate with him in preparing and presenting such defense. He asserted Springer had
denied any prior knowledge of the wage claim and, even after learning of it, refused to defend the
dealership. Vargason “believe[d] there [was] a good defense to the [w]age [c]laim that [Springer]
was failing to assert,” and, because Vargason was subject to personal liability for the claim, he
would be prejudiced by Springer’s failure to defend the claim on the dealership’s behalf.
¶ 10 On April 1, 2022, after a hearing, the circuit court found Vargason in contempt and also
denied Vargason’s motion to modify the receivership order. 1 The written contempt order required
Vargason to take various actions to purge the contempt, including to inform the Department by
letter that he was not authorized to represent the interests of the dealership.
¶ 11 On May 2, 2022, Vargason filed a notice of appeal. In the notice, Vargason asked this court
to reverse “the [circuit] court’s order entered April 1, 2022[,] denying [his] Motion for Leave to
Represent Corporation before Department of Labor and ordering [him] to inform [the Department]
that he is not authorized to represent the interests of [the dealership].”
¶ 12 II. ANALYSIS
¶ 13 On appeal, Vargason contends the circuit court abused its discretion in denying his motion
to modify the receivership order. Though Vargason’s notice of appeal states he was seeking
reversal of the portion of the order compelling him to inform the Department that he was not
1
We note Vargason filed a separate appeal from the order holding him in contempt, which
has been docketed in this court as appeal No. 2-22-0147.
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2022 IL App (2d) 220143authorized to represent the dealership, he offers no argument in his briefs as to that portion of the
order.
¶ 14 Vite initially argues we lack jurisdiction over the appeal. He asserts Vargason’s motion
was, essentially, a motion to reconsider the October 13, 2020, receivership order. He notes that
orders appointing a receiver may be appealed as of right within 30 days of their entry and motions
to reconsider such orders do not toll the time to appeal. Thus, Vite argues, Vargason’s notice of
appeal, which was filed almost 19 months after the receiver was appointed, was not timely and
must be dismissed.
¶ 15 We agree with Vite that we lack jurisdiction, but we do so on a slightly different basis. The
order from which Vargason appeals was, in effect, an order refusing to modify an order appointing
a receiver. As we will explain below, the order was not appealable as of right under Illinois
Supreme Court Rule 307 (eff. Nov. 1, 2017).
¶ 16 Rule 307(a) permits a party to appeal certain types of interlocutory orders as of right,
provided the party files a notice of appeal no later than 30 days after the order’s entry. Ill. S. Ct.
R. 307(a) (eff. Nov. 1, 2017). Such orders include those
“(1) granting, modifying, refusing, dissolving, or refusing to dissolve or modify an
injunction;
(2) appointing or refusing to appoint a receiver or sequestrator; [and]
(3) giving or refusing to give other or further powers or property to a receiver or
sequestrator already appointed.” Ill. S. Ct. R. 307(a)(1), (2), (3) (eff. Nov. 1, 2017).
We review de novo whether this court has jurisdiction to entertain an appeal. In re Marriage of
Demaret, 2012 IL App (1st) 111916, ¶ 25. When determining whether an order is appealable under
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2022 IL App (2d) 220143Rule 307, we construe broadly the term “injunction” by looking at the substance of the order, not
its form. In re A Minor, 127 Ill. 2d 247, 260 (1989).
¶ 17 Vargason first asserts this court has jurisdiction under Rule 307(a)(1). He contends the
receivership order prohibited him from acting as an employee or agent of the dealership. Thus, he
argues, the order was injunctive in nature. And because the motion at issue requested a
modification of that injunction, the order denying it was appealable under the rule.
¶ 18 We conclude that the order from which Vargason appeals, the April 1, 2022, order, did not
refuse to modify an injunction and was not appealable under Rule 307(a)(1). The October 13,
2020, order appointed Springer as receiver of the dealership and defined the scope of his
appointment. As relevant here, the scope of Springer’s appointment included the sole authority to
prosecute and defend claims before any tribunal. In effect, the order stated the receiver, but not
Vargason, could defend claims on behalf of the receivership defendants, which included Vargason,
except that Vargason was responsible for his own personal defense in such claims.
¶ 19 Admittedly, the order also prevented Vargason from defending the dealership from the
wage claim, which could be considered injunctive in nature. See id. at 261. But not every order
that requires or prohibits action is injunctive. Id. at 261-62. To call the October 13, 2020, order,
which appointed a receiver and defined the scope of the appointment, an injunction would render
Rule 307(a)(2) superfluous, as an order appealable under that rule would also be appealable under
Rule 307(a)(1). See Babcock v. Wallace, 2012 IL App (1st) 111090, ¶ 10.
¶ 20 In any event, Vargason’s motion sought leave to represent the dealership before the
Department. In other words, Vargason sought to modify the scope of the receivership order, by
changing who was permitted to defend a certain claim. Simply put, the order before us was an
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2022 IL App (2d) 220143order refusing to modify a receivership order, not an injunction. Accordingly, we lack jurisdiction
under Rule 307(a)(1).
¶ 21 Before moving on to Vargason’s asserted alternative basis to establish this court’s
jurisdiction, we note Vargason’s notice of appeal asks us not only to reverse the circuit court’s
April 1, 2022, order denying his motion, but also to reverse the court’s order requiring him to
purge his contempt, in part, by informing the Department that he was not authorized to represent
the dealership. This portion of the court’s order was likely injunctive in nature. See A Minor, 127
Ill. 2d at 261. But that directive was included in the written contempt order, which is before us for
review in Vargason’s related appeal, No. 2-22-0147. Presumably, Vargason will challenge that
condition of the purge in that appeal, and, in any event, he abandoned that portion of this appeal
by not offering argument to support it.
¶ 22 Alternatively, Vargason contends “the order is appealable under *** Rule 307(a)(2) in that
the [circuit] court refused to modify an order appointing a receiver.” In support, he relies on Union
Federal Savings & Loan Ass’n v. Hunt, 323 Ill. App. 622 (1944), which he contends was an appeal
from the denial of a motion to modify a receivership order.
¶ 23 We disagree that Rule 307(a)(2) confers jurisdiction on this court, given the nature of the
order at issue. The plain language of the rule, by which we are bound (Babcock, 2012 IL App (1st)
111090, ¶ 10), clearly confers jurisdiction on orders that have only either “appoint[ed] or refus[ed]
to appoint a receiver.” (Emphasis added.) Ill. S. Ct. R. 307(a)(2) (eff. Nov. 1, 2017). The circuit
court’s April 1, 2022, order did not appoint or refuse to appoint a receiver. Indeed, the court
appointed Springer as receiver nearly 18 months earlier, on October 13, 2020, and the time to
appeal that order ran out 30 days later. Id.-7-
2022 IL App (2d) 220143¶ 24 Hunt provides no support for Vargason’s position. Initially, we note Hunt was decided
more than 25 years before the first effective date of Rule 307 and contains no discussion of the
reviewing court’s jurisdiction. See Ill. S. Ct. R. 307 (eff. Jan. 1, 1970). More importantly, the
plaintiff in Hunt, a senior mortgagee, appealed from a final order that required the receiver to pay
rents collected to a junior mortgagee. Hunt, 323 Ill. App. at 625. To be sure, the appellate court
held the circuit court “erred in not granting plaintiff appellant’s petition *** to modify its order
appointing the receiver.” Id. at 629. But, in any event, the plaintiff did not appeal from an
interlocutory order.
¶ 25 Nor did the circuit court’s April 1, 2022, order “giv[e] or refus[e] to give other or further
powers *** to a receiver *** already appointed.” See Ill. S. Ct. R. 307(a)(3) (eff. Nov. 1, 2017).
Rather, the order refused Vargason’s request that some other person be given powers that belonged
to a receiver already appointed. Accordingly, Rule 307(a)(3) does not confer jurisdiction to review
the court’s April 1, 2022, order.
¶ 26 In sum, we conclude the circuit court’s April 1, 2022, order, denying Vargason’s “Motion
for Leave to Represent Corporation Before the Department of Labor,” was not immediately
appealable under Rule 307(a). Accordingly, we must dismiss the appeal. See Secura Insurance
Co. v. Illinois Farmers Insurance Co., 232 Ill. 2d 209, 217-18 (2009).
¶ 27 III. CONCLUSION
¶ 28 For the reasons stated, we dismiss the appeal for lack of jurisdiction.
¶ 29 Appeal dismissed.
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2022 IL App (2d) 220143Vite v. Vargason, 2022 IL App (2d) 220143Decision Under Review: Appeal from the Circuit Court of Kane County, Nos. 19-CH-932,
20-CH-306; the Hon. Kevin T. Busch, Judge, presiding.
Attorneys Philip J. Piscopo, of Storm & Piscopo, P.C., of Geneva, for
for appellant.
Appellant:
Attorneys Scott C. Lucas, of Geneva, for appellee.
for
Appellee:
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