Real Estate Law & Practice MCLE Meeting Attorney Resource ... · IL, Presentation: Association Governance After P.A. 99-0567: What Every Board ... • Head Soccer Coach: Winfield

Real Estate Law & Practice MCLE Meeting Attorney Resource Center

October 10, 2019

11:45 AM – Noon Welcome/Introductions Christopher Iaria, Section Chair

A few words from City Wide Title Corporation – Today’s Lunch Sponsor

Noon – 1:00 PM Program

Association Governance After P.A. 99-0567

James P. Arrigo and Scott Pointner - Rathje Woodward LLC

Speakers’ Bio are attached

In 2014, the First District Illinois Appellate Court sent a seismic wave through the community of condominium/HOA attorneys, managers, and boards in Palm v. 2800 Lake Shore Drive Condominium Association (“Palm II”). In it, the Court all but outlawed informal communications among board members on association matters and blocked many board efforts to delegate authority to property managers. The presenters will explain the issues the court faced, detail how it interpreted portions of the Illinois Condominium Property Act to address them, and outline how association attorneys, managers, and board members have been forced to adapt. They will also discuss how legislation has begun to change state law to counter some of the most drastic effects of the ruling, and provide best practices for navigating them. Finally, they will identify issues still looming, and potential legal and practical responses.

Next Meeting: 11/14/2019 – TBD

DCBA Events: October 11th – Mentoring Program Orientation – ARC

October 17th – DCBA Unwind–Sogno Ristorante, Wheaton

October 26th-Member Appreciation Family Day–Morton Arboretum

November 15th & 16th – GAL Training – 421 Building -Auditorium

Earn CLE Online!

DCBA OnDemand CLE is Now Powered by IICLE The Illinois Institute for Continuing Legal Education (IICLE®) and the DuPage County Bar Association (DCBA) are excited to offer a new IICLE®Share collaboration to provide DCBA members a high quality and reliable online learning experience. Members can find the link to The Illinois Institute for Continuing Legal Education (IICLE) on the DCBA website under “Legal Community”OnDemand CLE Online CLE Catalog

View & Print All CLE Certificates through the DCBA Website:

Manage Profile -> Professional Development (under content & features) and choose the icon to the left of each meeting to print your certificate directly or choose to have them emailed to you to save to your computer (you MUST be logged in to view this feature)

James P. Arrigo concentrates his practice in Condominium and Common Interest Community

Association law and litigation. He works with association boards and their managers to

recognize and address legal issues before they become problems, drafts and amends

governing instruments and represents associations in all types of cases, including collecting

common expenses to appeals. Jim is a presenter at numerous association-related seminars,

conferences and in-house programs for clients and has been an author and contributor to

association-related publications.

Practice Areas

• Condominium/Homeowners Association Law

• Litigation

Education

• DePaul University College of Law (J.D. Cum Laude, 1994)

• University of Illinois (B.A., 1982)

Bar Admissions

• 1994 State of Illinois

• 1995 U.S. District Court for the Northern District of Illinois

• 1998 U.S. District Court for the Central District of Illinois

Memberships

• DuPage County Bar Association

• Community Association Institute

• Association of Condominium Townhouse and Homeowner Association

Seminars & Presentations

• Association of Condominium Townhouse and Homeowner Association – July 27, 2017

(ACTHA Education Seminar) Presentation: Up In Smoke: Dealing With Air Nuisances

• Association of Condominium, Townhouse and Homeowners Associations -September

24, 2016 (ACTHA South Expo) Presentation: Collecting Assessments: Money Matters

• Association of Condominium, Townhouse and Homeowners Associations –April 18,

2015 (ACTHA Spring Conference) Panel Presentation: Breach of Fiduciary Duty- Until

it Happens to You

James P. Arrigo Phone: (630) 668.8500 Email: [email protected]

mailto:[email protected]

• Association of Condominium, Townhouse and Homeowners Associations –September,

2015 (ACTHA South Expo) FCC/OTARD Regulations (Satellite Dishes and Antennas)

for Associations

• Association of Condominium, Townhouse and Homeowners Associations –June 11,

2013 Oak Park, IL, Presentation: Collections and Foreclosures – Issues for

Associations

• Romeoville, IL, September 15, 2016 In-House Management Presentation: Navigating

Electronic Notice and Voting

• Palos Heights, IL, March 15, 2016 In-House Manager/Board-member Presentation:

Board Basics for Associations

• Community Association Institute Illinois 2019 Legal Forum, April 12, 2019, Glen Ellyn,

IL, Presentation: Association Governance After P.A. 99-0567: What Every Board

Member Needs to Know About Palm II

Scott E. Pointner is a Member at Rathje Woodward LLC, DuPage County's oldest law firm, and

has earned an AV-rating (the highest possible distinction) in the Martindale-Hubbell Law

Directory. After three years of litigation experience in Cook and DuPage Counties, he joined

the firm in 1999 and became a partner in 2002. Scott has concentrated his practice in three

broad categories: commercial real estate, general corporate and finance, and commercial

litigation, with homeowners and condominium association law having become more than half

of his practice since 2010. In 2016, he was awarded the Leading Lawyer designation for Real

Estate Law: Associations & Condominiums. Although his commercial real estate, zoning,

landlord/tenant, and general corporate practices have been his transactional focus, Scott's

careful attention to detail is shaped in large part by his extensive litigation experience, which

helps insulate his documents and transactions from traps too many purely-transactional

attorneys often miss. With Scott having litigated cases in fourteen different counties

throughout Northern Illinois and having handled a broad range of clients in real estate, zoning,

contract, litigation, and corporate matters, Scott’s mix of small and medium-sized businesses

and non-profits in general, and homeowners and condo associations in particular, benefit from

his integrated approach whereby he effectively leverages his real estate, corporate and

finance, and commercial litigation experience to find the best resolutions for his clients.

Scott currently represents a variety of homeowner and condominium associations, from large

city-sized lake associations to small one building condo associations and everything in

between. Utilizing his extensive homeowners and condominium association experience, he

also represents association members, builders, and developers with regard to association

issues, including litigation. Finally, his practice also includes collections litigation and other

common association cases.

Practice Areas

• Banking, Loans and Finance

• Business & Corporate

• General Counsel

• Homeowners and Condominium Association

• Litigation

• Municipal Law

• Real Estate, Land Use & Development

Education

• Southwestern University School of Law (J.D., 1996) Top 20%

• Indiana University (B.S., 1990)

Scott E. Pointner Phone: (630) 510.4902 Email: [email protected]


Fraternities & Sororities

• Sigma Alpha Epsilon

Bar Admissions

• 1996-current Illinois Supreme Court-State Bar

• 1997-current United States District Court for the Northern District of Illinois

• 2001-current United States Supreme Court

• 2002-current Trial Bar for the Northern District of Illinois

• 2016-current Wisconsin Supreme Court-State Bar

Memberships & Awards

• AV Rating, Martindale-Hubbell: Highest possible rating by the most-trusted entity for

rating attorneys in the United States.

• Chicago’s Top Rated Lawyers (www.law.com): Real Estate (2012); Zoning, Planning,

and Land Use (2012); Business and Commercial Law (2014); General Practice (2014).

• Leading Lawyers Award Designation (2016): Real Estate Law: Associations &

Condominiums.

• Member: Community Associations Institute; Illinois Association of Lake Communities;

Association of Condominium, Townhouse, and Homeowners Associations.

• Member: American Inns of Court, DuPage County Chapter (2009-present); Member,

Board of Directors (2014-2015); Team Leader (2011-2012, and 2012-2013); Vice-

Chair, Mentoring Committee (2013-2014); Chair, Mentoring Committee, (2014-2015).

• Member: DuPage County and Illinois State Bar Associations. Active Member, Lawyers

Lending a Hand Committee (2006-present).

• Chair: DuPage County Bar Association Professional Responsibility Section 2015-2016.

• Advisory Committee Member: DuPage County Bar Association Planning Committee

(2015-16, 2016-17).

• Member, Business Advisory Board: Illinois Chamber of Commerce (2011-2016).

• General Counsel: Wheaton Chamber of Commerce (2010-present).

• Member of Board of Directors: Wheaton Chamber of Commerce (2010-present).

• Recipient: Wheaton Chamber of Commerce, Outstanding Leadership Award (2009),

Executive Award (2012). DuPage County Bar Association Board of Directors

Distinguished Service Award winner (2015-2016).

• Secretary: Rathje Woodward LLC (2002-present).

• Member, Secretary: Executive Board of Directors, Grand Theater Corporation,

501(c)(3) non-profit committed to restoring the Wheaton Grand Theater, Wheaton,

Illinois. Elected 2001 (2001-present).

• Chair: Wheaton Leadership Prayer Breakfast. Member of the committee that presents

an annual prayer breakfast for leaders in Wheaton (2013-present), (Chair 2015-

present).

• Head Soccer Coach: Winfield in Action/Winfield Park District (2003-2011) (15 teams).

• Parishioner: St. Irene’s Catholic Church, Warrenville, Illinois (1996-present); Baptism

Mentor (2003-present); Music ministry leader for Children’s Liturgy of the Word (2006-

present); Lector (2008-present).

Classes, Seminars & Presentations

• 2002-Present: Guest Lecturer: Civil Litigation, Midwestern University. • February, 2003: Featured Lecturer: (First of three presenters). Zoning and Land Use

in Illinois, Lorman Education Services for Continuing Legal Education. • January, 2008: Featured Lecturer: (First of five presenters). Plat and Subdivision Law

in Illinois, 2008, Lorman Education Services for Continuing Legal Education. • January, 2009: Featured Lecturer: (First of five presenters). Plat and Subdivision Law

in Illinois, 2009, Lorman Education Services for Continuing Legal Education. • February, 2010: Featured Lecturer: How to Negotiate A Commercial Lease, EAI Annual

Meeting. • September, 2010: Featured Lecturer: (First of three presenters). Illinois Professional

Land Surveying Practice, Half Moon Seminars for Continuing Legal Education. • November, 2010: Featured Lecturer: (Last of six presenters). Real Estate Law and

Practice, DuPage County Bar Association Basic Skills Seminar. • January, 2011: Featured Lecturer: Homeowners Association Law, Mentor CLE

Continuing Legal Education webinar. • September, 2011: Sole Lecturer: How to Negotiate A Commercial Lease In The Post-

Recession Economy, Illinois Chamber of Commerce. • November, 2011: Featured Lecturer: (Last of six presenters). Real Estate Law and

Practice, DuPage County Bar Association Basic Skills Seminar. • October, 2012: Featured Lecturer: (One of two presenters). Illinois Professional Land

Surveying Practice, Half Moon Seminars for Continuing Legal Education. • February, 2013: Featured Lecturer: After the Economic Apocalypse: Zoning Hearings

After the Recession, DuPage County Bar Association, Continuing Legal Education Seminar.

• February, 2014: Featured Lecturer: Commercial Leasing, Illinois Chamber of Commerce.

• January, 2015: Moderator: How To Stand Out To The Partners, DuPage County Bar Association Professional Responsibility Continuing Legal Education Lecture (Approved by the Illinois Supreme Court's MCLE Board for 1 credit hour of Professionalism Credit).

• October, 2015: Featured Lecturer: Surviving The First Year/Expectations of a First Year Associate, DuPage County Bar Association, Continuing Legal Education Seminar.

• June, 2016: Moderator: DuPage County Bar Association Fee Dispute Resolution Program, DuPage County Bar Association Professional Responsibility Continuing Legal Education Lecture (Approved by the Illinois Supreme Court's MCLE Board for 1 credit hour of Professionalism Credit).

• April, 2019: Featured Lecturer: (First of two presenters). Association Governance After P.A. 99-0567: What Every Board Member Needs to Know About Palm II, Community Association Institute Illinois 2019 Legal Forum.

Articles & Publications

• Author: Zoning and Land Use in Illinois, Lorman Education Services, Illinois Continuing Legal Education, February, 2003.

• Author: Plat and Subdivision Law, Section 1: Understanding the Land Development

Process, Lorman Education Services, Illinois Continuing Legal Education, January, 2008; revised/re-published January, 2009.

• Author: How to Negotiate a Commercial Lease, EAI Annual Meeting Handout, February, 2010.

• Author: An Introduction to Illinois Land Surveyor Practice, and Illinois Surveyor Liability, Half Moon Seminars, Continuing Legal Education manual for CLE lecture, September, 2010.

• Author: Basic Real Estate Skills for Newly-Licensed Attorneys, DuPage County Bar

Association Basic Skills Seminar, Real Estate, November, 2010; November, 2011.

• Co-Author: An Introduction To Illinois’ Newly-Penned Common Interest Community Association (“CICA”) Act, The Journal of the DuPage County Bar Association, Volume 23, Issue 3, December, 2010, http://www.dcbabrief.org/vol231210art2.html.

• Author: Homeowners Association Law, Mentor CLE Handout, January, 2011.

• Guest Newspaper Writer: The Challenges of Navigating The Economy As A Small Business, The Wheaton Leader Newspaper, September 18, 2013 (Part 1 of 2), http://m.mysuburbanlife.com/2013/09/11/pointner-the-challenges-of-navigating-the-economy-as-a-small-business/af96wn5/?page=1, and February 5, 2014 (Part 2) http://www.mysuburbanlife.com/2014/01/26/pointner-the-sea-of-mediocrity-in-which-small-businesses-are-sailing/arspg1j/.

Representative Cases

• Co-Counsel: For Appellees, People ex rel. Robert J. Klaeren II et al. v. Village of Lisle

et al., 316 Ill.App.3d 770, 737 N.E.2d 1099 (2nd Dist., 2000) (Result: affirmed); 202

Ill.2d 164, 781 N.E.2d 223 (2002) (Result: affirmed).

• Counsel: For Appellees, Paul J. Salce v. Young Sil Saracco a/k/a Youngsil Cho, John

Lackos and Euro World Wines, Inc., 409 Ill. App. 3d 977, 949 N.E.2d 284 (2d Dist.

2011). (Result: affirmed).

• Counsel: For Appellant, Didier Builders, Inc. et al v. American National Bank & Trust

Co. of Chicago, et al, Appellate Court Case No: 2-00-0786. (Result: reversed) Rule 23

Order.

• Counsel: For Appellant, Christy L. Lee v. Village of Lisle, et al, Appellate Court Case

No: 02-99-1169. (Result: reversed). Rule 23 Order.

• Co-Counsel: For Appellees, Markwick v. Homeward Glen Homeowners Association,

Appellate Court Case No: 2-12-0624. (Result: affirmed) Rule 23 Order.

http://www.mysuburbanlife.com/2014/01/26/pointner-the-sea-of-mediocrity-in-which-small-


$200 for DCBA Members $400 Non-MembersRegister online at: www.dcba.orgSend payments to: DuPage County Bar Association 126 S. County Farm Road, Wheaton, IL 60187

Session One: Friday November 15, 2019 from Noon - 5:30pm (Registration 11:30am) - GAL Appointment 101

- Substance Abuse/Mental Health Issues and Restrictions on Parenting Time

- Domestic Violence and Family Center Services

- DCFS/Children’s Advocacy Center/VSIs

- Special Needs Children

- 604 Evaluations

- Working with High Conflict Parents

Session Two: Saturday, November 16, 2019 from 8:00am-1:00pm (Registration 7:30am)- Children’s Panel

- Ethics-related Matters

- Gender Identity Issues

- Drafting Allocation Judgments/Facilitating Settlement

- Probate Matters

- Relocation

Program Location: DuPage County Administration Building Auditorium 421 N. County Farm Road in Wheaton, IL

By attending both sessions, you can earn up to 10 hours of CLE credit (PRMCLE awarded

based on final agenda). Attendance at both sessions is required to be placed or remain on

the approved GAL list used in 18th Circuit Domestic Relations Division.

The DuPage County Bar Association and the 18th Judicial Circuit Domestic Relations Division

Guardian Ad Litem Training Program

8/10/2019

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DuPage County Bar AssociationReal Estate Law & Practice MCLE Meeting

October 10, 2019 – DuPage County Judicial Center

ASSOCIATION GOVERNANCE AFTER P.A. 99-0567:

WHAT EVERY ATTORNEY NEEDS TO KNOW ABOUT PALM II

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Presenters:Scott E. Pointner, Esq.James P. Arrigo, Esq.

RATHJE WOODWARD LLC 300 E. Roosevelt Road, Suite 300, Wheaton, IL 60187(630) 668-8500

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HANDOUT: TABLE OF CONTENTSPresentation Outline........................................................................................................................ 1Missing the Heart of Palm - Article................................................................................................ 6Palm v. 2800 Lake Shore Drive Condo Assn, 10 N.E.3d 307, 2014 IL App (1st) 111290 (2014).. 8House of Representatives Legislative History – May 18, 1993, Pages 1, 30 and 31 ................... 36Palm II – Key Portions of Palm II with commentary ................................................................... 39Samples of Other States’ Provisions............................................................................................. 42Post-Palm II Statutory Amendments .............................................................................................44Biographies for Scott E. Pointner, Esq. and James P. Arrigo, Esq............................................... 51

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Association Governance After P.A. 99-0567: What Every Attorney Needs to Know About Palm IIPrepared for and presented at the Real Estate Law & Practice MCLE Meeting October 10, 2019, Wheaton, Illinois

I. Introduction

II. Foundational IssuesA. Condominium versus CICA’s: What laws control eachB. How Boards Really Work?

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Board actions typically fall into three general categories:

1) Fact finding and/or gathering information;

2) Discussing and/or analyzing the facts and information; and

3) Making a decision and/or voting.

Boards often discuss association issues that require no formal vote, or that are so trivial, formalities should not be required.

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“Discussion”

¶ 42 of Robert’s Rules of Order: “In a deliberative assembly,this term applies to discussion on the merits of a pendingquestion-that is, whether the proposal under considerationshould, or should not, be agreed to.”

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The problem with Palm II is that the ruling makes all Board communicationsregarding association issues with a quorum “present”, subject to formalities,regardless of how trivial.A manager informally polling a Board via email to see if they think the temperatureof the swimming pool is too cold?A president texting a Board to see who is in town for an upcoming meeting?Under Palm II, these, and a myriad of other communications now require notice, anagenda, and a meeting open to unit owners before they can legally be discussed.From a practical standpoint, Palm II will likely drive two undesirable trends.1. First, emails will be sent to just one Board member (to avoid a quorum), and

then members will eventually string together the emails to individual membersin an inefficient splintering of communications to avoid triggering a quorum.

2. Second, Boards may give too much power to property managers to avoidcumbersome procedures. This holding of Palm II defies logic, is overly-formalistic, and fortunately, is not what the legislature intended.

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Section 2(w) of the Condominium Property Act defines “meeting of board ofmanagers” as “any gathering of a quorum of the members of the Board ofManagers *** held for the purpose of conducting board business.” 765 ILCS605/2(w) (West 2004)(Emphasis added.) Section 18(a)(9) of the Act requires thatan association's bylaws provide, in relevant part:“[M ]eetings of the board of managers shall be open to any unit owner, except forthe portion of any meeting held (i) to discuss litigation when an action against oron behalf of the particular association has been filed and is pending in a court oradministrative tribunal, or when the board of managers finds that such an actionis probable or imminent, (ii) to consider information regarding appointment,employment or dismissal of an employee, or (iii) to discuss violations of rulesand regulations of the association or a unit owner’s unpaid share of commonexpenses; that any vote on these matters shall be taken at a meeting or portionthereof open to any unit owner [.]” (Emphasis added.)

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¶ 54 After applying the rules of statutory construction andexamining the plain language of the statute, we hold that“conducting board business,” as used in the section 2(w)definition of board “meeting” in the Condominium Property Act,encompasses the activities by the board in the workshop andexecutive sessions.

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There are only three exceptions to the open meeting requirement:the board may meet in closed meetings to (1) “discuss” pendingor potential litigation involving the association, (2) “consider”information regarding the hiring and firing of employees and (3)“discuss” rules violations or unpaid assessments. 765 ILCS605/18(a)(9) (West 2004). Although the board may “discuss” and“consider” the three excepted subjects in closed meetings, it isstill required to “vote on these matters * * * at a meeting orportion thereof open to any unit owner.”

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If it was the legislature's intent that board discussion and consideration ofall association issues can occur in closed meeting, there would be no needfor the legislature to specifically provide that discussion and/orconsideration of issues regarding litigation, employee hiring and rulesviolations can occur in closed meetings. Discussion and consideration ofthose three issues would already be encompassed by the general ruleasserted by defendants that discussion and consideration without vote of allassociation matters can occur in closed meetings. From the fact that thelegislature deemed it necessary to create these three exceptions to the openmeeting **240 *325 requirement, we can assume that such a general ruledoes not exist.

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¶ 57 Prior to January 1, 1994, section 2(x) of the Act defined “Meeting ofBoard of Managers” as “any gathering of a majority of a quorum of themembers of the Board of Managers * * * held for the purpose of discussingboard business.” (Emphasis added.) 765 ILCS 605/2(x) (West 1992). In1993, the legislature amended section 2(x), now section 2(w), and changedthe definition of a board “meeting” to “any gathering of a quorum of themembers of the Board of Managers * * * held for the purpose ofconducting board business.” (Emphasis added.) 765 ILCS 605/2(w) (West2004); Pub. Act 88–417, eff. Jan. 1, 1994.

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“Conducting board business,” therefore, means directing or takingpart in the operation or management of the association. Nothing inthe wording of the statute leads us to conclude that the phrase“conducting board business” should be interpreted to mean only“voting on board business,” as defendants assert.

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¶ 59 As the above definitions show, “to conduct” does not mean“to vote.” […] One cannot direct or take part in the operation ormanagement of a business unless one also discusses and considersthat business before making decisions/voting on that business.Indeed, board members cannot conduct (“direct or take part in theoperation or management”) board business unless they alsodiscuss (“investigate by reason or argument,” “talk about” and“present in detail for examination and consideration”) the issuesinvolved in that business.

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Accordingly, when the legislature amended the statute in1993, it expanded the definition of board “meeting” toencompass more than just “discussion.” Nothing suggeststhat it intended to limit the definition of “meeting” tomean only those gatherings where a board votes onbusiness matters.

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The Question We Should Ask: Did the legislature intend theword “discussing” to apply to all conversations, or only thosediscussions contemplated in Robert’s Rules of Order that relateto “debate” wherein the discussion occurs only after a motionis made before a vote is taken?

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STATE OF ILLINOIS

88th GENERAL ASSEMBLY

HOUSE OF REPRESENTATIVES

TRANSCRIPTION DEBATE

60th Legislative Day May 18, 1993

Wennlund: "Can you tell us exactly what this Bill does do, then?"

Erwin: "Representative, there are about five key sections of this Act that the Chicago Bar Association worked on forthe past year to try and clean up some inconsistencies in the Act and where for instance...certain requirements do notsimply work in condominium boards, for instance, and since where a quorum might constitute three people, so thereare several provisions which I can assure you, the Judiciary Committee examined quite well that none of which, Ibelieve, removes rights and privileges of any member. I serve on a Condominium Board or have myself, although Iam not currently, I think that you will find that it will discourage litigation that is currently clogging up the CookCounty court system, that is unnecessary, and frankly, people that live in condominiums, like the rest of us, need to learn to live together a little easier, as opposed to filing lawsuits every time a neighbor has a barking dog orsomething. So I would urge…”

Wennlund: “Well, I guess the base question is, ‘does this eliminate any rights with respect to voting rights that condominium unit owners have currently?' Does it eliminate any of those rights?“

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STATE OF ILLINOIS

88th GENERAL ASSEMBLY

HOUSE OF REPRESENTATIVES

TRANSCRIPTION DEBATE

60th Legislative Day May 18, 1993

Erwin: "I think I will defer to the House Sponsor in response to that. It is not my understanding, RepresentativeWennlund, that this takes away any rights and privileges. It…what the Act is trying to do is to make the Condominium Act more applicable to this...to particularly situations where you have very small boards; and there areprotections in this for assessments and I think there are no rights and privileges that will be denied."

Wennlund: "Have…have the title companies signed off on this piece of legislation, that you are aware of?"

Erwin: "It does not...I am assured, by the Chicago Bar Association, that this Bill does not eliminate any voting rightscurrently in the Act.•

Wennlund: "Thank you very much."

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Thus, the change from “discussing” to “conducting” was intendedto take away NO voting rights, and was intended to makegovernance easier and less procedural, especially for smallboards, by eliminating some notice and procedural requirementsfor discussions that do not require a vote.

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California:

Section 4090: "Board meeting" means either of the following:

(a) A congregation, at the same time and place, of a sufficientnumber of directors to establish a quorum of the board, to hear, discuss, or deliberate upon any item of business that is within the authority of the board.

COMMENTARY: THIS IS VERY BROAD, BUT PRECISE,AND CLEAR

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Florida:

Section 718.112(c): Board of administration meetings.—Meetings of the board of administration at which a quorum of the members is present are open to all unit owners.

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Florida cont:

3. Notwithstanding any other law, the requirement that board meetings andcommittee meetings be open to the unit owners does not apply to:

a. Meetings between the board or a committee and the association’s attorney,with respect to proposed or pending litigation, if the meeting is held for thepurpose of seeking or rendering legal advice; or

b. Board meetings held for the purpose of discussing personnel matters.

COMMENTARY: DO YOU SEE THE PROBLEM WITH THIS LANGUAGE?

ANSWER: A BOARD MEETING MUST BE IN THE OPEN TO DISCUSS,BUT IT DOES NOT ANSWER THE QUESTION: IS IT A MEETING?

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Florida cont:

Section 718.112(e): Budget meeting.—

1. Any meeting at which a proposed annual budget of an association will be considered by the board or unit owners shallbe open to all unit owners.

COMMENTARY: THIS INJECTS A THIRDELEMENT…DISCUSSING, CONDUCTING, AND NOWCONSIDERING. IS CONSIDERING A COMBINATION OFDISCUSSING AND CONDUCTING?

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Florida cont:

FLORIDA COMMENTARY: From Becker and Poliakoff, Legaland Business Strategies

One of the most frequently debated topics is what constitutes the"conduct" of business. We have seen many associations whosedirectors meet under the auspices of "executive sessions","planning meetings", or "agenda development workshops", arguethat a quorum of the board could gather out of the sunshine aslong as no binding votes were being taken.

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Florida cont:

However, this is not what the law says, and is certainly not what it means.Although we are not aware of any reported appellate court cases in theassociation context, there are a number of cases in the public arena that have held that any interaction contributing to the development of ideas constitutes a "meeting", without regard to whether or not a formal vote has been taken.

Otherwise, association boards could make decisions in "executive session",with the "public meeting" being simply a rubber-stamp event. While manyassociations legitimately desire to avoid certain topics in open meetings, itis simply the price that is paid for the owners' right to remain informed.

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Florida cont:

To do otherwise defeats the statutory requirements that board meetings beopen and that the owners have the right to participate.

Reference link: http://www.beckerpoliakoff.com/Files/7165_sunshine_law_2013.pdf

COMMENTARY: DOES THIS HELP? ARGUE IT BOTH WAYS.

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Presenter: James Arrigo, Esq.

III. Palm II

IV. Changes to the Law in response to Palm II

V. Best Practices

VI. Anticipated/Emerging Issues and What Still Needs to be done

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DuPage County Bar AssociationReal Estate Law & Practice MCLE Meeting


ASSOCIATION GOVERNANCE AFTER P.A. 99-0567:

WHAT EVERY ATTORNEY NEEDS TO KNOW ABOUT PALM II

Question & Answer

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DuPage County Bar Association Real Estate Law & Practice MCLE Meeting


ASSOCIATION GOVERNANCE AFTER P.A. 99-0567: WHAT EVERY ATTORNEY NEEDS TO KNOW

ABOUT PALM II

Presenters:

Scott E. Pointner, Esq. James P. Arrigo, Esq. RATHJE WOODWARD LLC 300 E. Roosevelt Road, Suite 300 (630) [email protected]@rathjewoodward.com





HANDOUT: TABLE OF CONTENTS

Presentation Outline ........................................................................................................................ 1

Missing the Heart of Palm - Article ................................................................................................ 6

Palm v. 2800 Lake Shore Drive Condo Assn, 10 N.E.3d 307, 2014 IL App (1st) 111290 (2014) .. 8

House of Representatives Legislative History – May 18, 1993, Pages 1, 30 and 31 ................... 36

Palm II – Key Portions of The Heart of Palm II with commentary .............................................. 39

Samples of Other States’ Provisions ............................................................................................. 42

Post-Palm II Statutory Amendments .............................................................................................44

Biographies for Scott E. Pointner and James P. Arrigo ................................................................ 51

Association Governance After P.A. 99-0567: What Every Attorney Needs to Know About Palm II

Prepared for and presented at the DuPage County Bar Association's Real Estate Law & Practice

MCLE Meeting October 10, 2019 Wheaton, Illinois

I. Introduction

A. Presenters Scott E. Pointner/James P. Arrigo (See bios at the end)B. Palm II is one of the most important condominium (and common interest

community associations (“CICA’s”)) cases in the last thirty years given how muchits holding impacts most associations.

C. Outline of presentation

II. Foundational Issues-In order to understand the nuances of what Palm II means in theday-to-day governance of condominium and common interest community associations,it is worthwhile to ensure that we all have a foundational understanding of certain topics,definitions, and relationships between various statutes and types of entities.

A. Condominium versus CICA’s: What laws control each1. Condominium Property Act 765 ILCS 6052. Common Interest Community Association Act 765 ILCS 1603. General Not For Profit Corporation Act 805 ILCS 105

B. How Boards Really Work?1. From Robert’s Rules of Order, Section 1: A deliberative assembly-the

kind of gathering to which parliamentary law is generally understood toapply-has the following distinguishing characteristics:a. It is an independent or autonomous group of people meeting to

determine, in full and free discussion, courses of action to be takenin the name of the entire group.

b. The group is of such size-usually any number of persons more thanabout a dozen-that a degree of formality is necessary in itsproceedings.

c. Persons having the right to participate-tat is, the members-areordinarily free to act within the assembly according to their ownjudgment.

d. In any decision made, the opinion of each member present hasequal weight as expressed by vote-through which the votingmember joins in assuming direct personal responsibility for thedecision, should his or her vote be on the prevailing side.

2. Robert’s Rules of Order continues: The basic principle of decision in adeliberative assembly is that, to become the act or choice of the body, aproposition must be adopted by a majority vote; that is, direct approval-

1

implying assumption of responsibility for the act-must be registered by more than half of the members present and voting on the particular mater, in a regular or properly called meeting at which the necessary minimum number of members, known as the quorum, is present.

3. Communication: Unlike boards from thirty years ago, modern board communicate via social media, emails, and text, all in addition to the good old-fashioned phone.

4. How do most bodies like condo and CICA boards govern? a. Gather the facts and analysis of the facts/obtain opinions b. Motion c. Discussion d. Vote

C. Does the analogy of public body governance (i.e. Open Meetings Act, Freedom of

Information Act) apply to condo and CICA boards? Is “sunshine the best antiseptic”?

D. Query: If a vote must take place in an open meeting, does the board need to take action in the form of a formal vote? What decisions require a vote? 1. Sometimes a vote MUST be taken by statute, such as the Board filling a

vacancy on the board under Section 18(a)(13). 2. Sometimes a vote is required by the General Not For Profit Corporation

Act, such as a vote to remove a director under Section 108.35(c)(1). 3. However, for the most part, there are surprisingly few statutory

requirements for a formal vote.

E. Before Palm II 1. What did the statute say is a “Board Meeting”? Section 2(w) of the

Condominium Property Act defines “meeting of board of managers” as “any gathering of a quorum of the members of the Board of Managers… held for the purpose of conducting board business.” 765 ILCS 605/2(w) (West 2004). (Emphasis added).

2. Workshops 3. Closed Sessions 4. On/off switch or a dimmer switch? 5. Playing the quorum game/Canvassing 6. Communications/Emails

F. Why is it so important? Agenda, Notice, Voting

III. Palm II

A. Summary of background facts B. Summary of holdings C. Analysis of key holdings

1. P.A. 88-417: Discussion versus Conducting:

2

a. Prior to January 1, 1994, section 2(x) of the Act defined “Meeting of Board of Managers” as “any gathering of a majority of a quorum of the members of the Board of Managers held for the purpose of discussing board business.” (Emphasis added.) 765 ILCS 605/2(x) (West 1992). (Emphasis added).

2. Implications of holding: Before Palm II, a discussion required advance notice and an agenda, but not a voice vote without discussion!

3. Legislative intent of P.A. 88-417 4. Comparisons to Other States 5. Implications

IV. Changes to the Law in response to Palm II

A. The General Assembly Expanded Permitted Use of Closed Sessions for

Condominiums (Sec. 18 a. (9)(A)) and CICAA Associations (Sec. 1-40 (b)(5)). 1. Board quorum may now meet separately from a noticed meeting for

specified purposes. 2. Three subjects/purposes for boards to communicate in closed session were

added: a. Prior purposes limited to:

i. Discussing litigation (filed or “imminent”); ii. Considering information on appointment, employment or

dismissal of an association employee; and iii. Discussing violations of governing instruments and/or

unpaid common expenses b. New/Added purposes: i. Consulting with the Association’s legal counsel generally; ii. To discuss appointment, employment or dismissal of a

broader range of people, including contractors and agents; iii. Interviewing potential employees, contractors, agents or

other providers of goods and services. iv. Added ways for Board members to “attend” meetings by

remote/electronic means. 3. Board votes are still limited to open meetings and canvassing is still not

permitted. 4. The recent court ruling in Boucher v. 111 East Chestnut Condominium

Association has asserted additional requirements for closed board sessions, and particularly those at which violation hearings are held. a. Minutes/Recordings b. Documents/Evidence

B. The General Assembly Provided for Certain Emergency Action Without a Prior Board Meeting.

3

1. An effect of Palm II was to discourage Board members from taking action to address emergency situations.

2. Condominium Property Act section 18(a)(21) Addresses Some Concerns. a. New provision permits board to ratify and confirm board members’

action in response to an “emergency” (as defined) after-the-fact. b. Stated purpose of the change was to empower and support boards to

act in emergencies. C. The General Assembly Expanded Means for Official Association Communications,

including Notice. 1. Condominium Property Act Section 18.8.

a. Prior language of Section 18 required notice “by mail or other means of delivery specified in the declaration, bylaws, or rule.”

b. Section 18.8 provides for more and easier technological ways to give notice of required meetings.

c. Section 18 was amended to allow notice of meetings to directors and members by these technological means.

2. Though directors could already attend meetings remotely, new sub-sections 18(a)(9)(B) expanded the means available to include “technological means.”

a. For board action, remote votes by absent directors must meet requirement that all persons in attendance be able to hear the communications -- including votes.

V. Best Practices

A. Board activity in closed sessions must still be limited to the six (6) purposes specified in Sec. 18(a)(9)(A). 1. Directors may exchange, discuss and consider information and documents

and may conduct interviews relating to the specified categories in closed session.

2. Directors may not decide matters or vote, either formally or informally, in closed session.

B. Delegation of authority to a Manager to Act/make Decisions 1. Specific delegation must be supported by board power in the governing

instruments. 2. Authority/duties delegated should be consistent with terms of the

management contract or with a revision/addition to same. 3. Delegation should be express – by written agreement, rule or policy.

C. Use of Email for communications between board and association members is still subject to limits: 1. Consent (and verified contact information) is required for official

communications under Sec. 18.8(f);

4

2. Email does not meet requirements for absent directors’ remote participation and voting at board meetings.

D. Double-check timing and diary all notice deadlines for notices and board action; E. Minutes

1. Must be kept for both regular and closed board sessions. a. Boucher case

2. Minutes should reflect compliance with corporate formalities, but not details or statements.

3. For regular/special board meetings: a. Recite notice of meeting; b. Include times of Calling to Order and Adjournment; c. Identify Attendees/Participants; d. State presence of quorum; e. Identify agenda items discussed. f. Reflect whether discussion held on each item (but do not set forth

details/points) g. Reflect each motion made/second/vote (and result). h. Maintain documents referenced in meeting.

4. For closed sessions: a. Reflect action as permitted by law on each item

(e.g., “board discussed;” “board interviewed;” “board consulted with counsel;” “hearing held”).

b. Designate items to be brought up for vote when back in open session so as not to identify members or substance on enforcement matters.

c. Avoid recording/videotaping proceedings. 5. No entry in the minutes should include detail or points made in discussions

or names of persons subject to violations or collections. F. Bus. Judgment Rule can protect Directors from personal liability.

1. Based upon directors’ exercise of fiduciary obligations. 2. Directors’ have duty to become informed through qualified professionals

before acting. 3. Recite consultation and reliance on advice/information received.

VI. Anticipated/Emerging Issues and What Still Needs to be Done

A. Boucher record-keeping and record-production issues. B. Record request issues.

1. Limited time to respond. 2. Changing requirements regarding member information.

VII. Q&A

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Legal Updates (http://www.cai-illinois.org/category/legal-updates/)06September I. Introduction: In 2014, Palm v 2800 Lake Shore Drive Condominium Association, 2014 IL App (1st) 111290 (known as “Palm II” because it was the second reported

opinion in the case) sparked a buzz of commentary and debate among condominium and common interest community association (“CICA”) attorneys (hereinaftercollectively “CICA Attorneys”), board members, and property managers. Prior to Palm II, there was a consensus among most CICA Attorneys that boards could informallydiscuss association business as long as voting occurred at a properly-noticed meeting. While Palm II addressed many issues, none have caused more consternation thanits holding that “not only must all board voting occur at meetings open to unit owners, so must all board discussion or consideration of association matters, except fordiscussion or consideration of the three specified exceptions.” Id., at ¶55. More than one article has suggested this interpretation, arguably the heart of Palm II, would bedifficult, if not impossible, to follow.

At the center of Palm II lies a simple question: In 1993, when the legislature passed P.A. 88-417 to redefine “Meeting of Board of Managers” (requiring formalities ofnotice, an agenda, and a quorum) from a meeting held for the purpose of “discussing board business” to “conducting board business”, did it intend to subject more boardactivities to the required formalities, or fewer? The record shows the legislature intended to subject fewer actions to these formalities.

II. Background: Unlike commercial and charitable corporate boards, condominium and CICA boards (hereinafter collectively “Boards”) volunteer their time to serve thecommunities in which they live, almost universally without pay. Balancing work, family, and civic obligations with Board commitments is a difficult task that is compoundedif Board members are not able to use emails or texts like most corporate boards. Answering emails in the checkout line or texting while watching a soccer game is a partof everyday life, and Palm II prohibits such communications regarding association matters if a quorum is involved.

Board actions typically fall into three general categories: 1) fact-finding and/or gathering information; 2) discussing and/or analyzing the facts and information; and 3)making a decision and/or voting. Although the categories easy to identify, slotting a specific conversation, email, or text into one category is often impossible. Moreover,Boards often discuss association issues that require no formal vote, or that are so trivial, formalities should not be required. The problem with Palm II is that all Boardcommunications regarding association issues with a quorum “present” are subject to formalities, regardless of how trivial. A manager polling a Board via email to see ifthey think the temperature of the swimming pool is too cold? A president texting a Board to see who is in town for an upcoming meeting? Under Palm II, these, and amyriad of other communications now require notice, an agenda, and a meeting open to unit owners before they can legally be discussed. From a practical standpoint,Palm II will likely drive two undesirable trends. First, emails will be sent to just one Board member (to avoid a quorum), and then members will eventually string togetherthe emails to individual members in an inefficient splintering of communications to avoid triggering a quorum. Second, Boards may give too much power to propertymanagers to avoid cumbersome procedures. This holding of Palm II defies logic, is overly-formalistic, and fortunately, is not what the legislature intended.

III. “Conducting” Versus “Discussing” Business: In determining the intent of P.A. 88-417, the Palm II court considered the definitions of “discuss” (investigate or talk about),and “conduct” (generally to direct or take part), but then focused solely on the new statute, ignoring the old. It concluded “[nothing] in the wording of the statute leads us toconclude…‘conducting board business’ should be interpreted to mean only ‘voting on board business.’” Palm II, at ¶58. While it recognized “[one] cannot direct or takepart in [i.e. conduct] the operation or management of a business unless one also discusses and considers that business before making decisions/voting on that business,”(Palm II, at ¶59), the Court concluded the change to “conducting” from “discussing” meant the legislature intended to trigger formalities earlier in the process of conductingBoard business. While discussing is a necessary precursor to conducting Board business, it is easy to conceive of a Board discussing association issues without it risingto the level of conducting business (such as surveying the Board on the temperature of the pool). By triggering formalities only when conducting Board business ratherthan simply discussing it, the legislature clearly intended the opposite of what Palm II concluded.

The legislative history of P.A. 88-417 confirms it was intended to unshackle Boards. On May 18, 1993, the Illinois House considered the underlying bill, which arose from aChicago Bar Association (“CBA”) effort to “clean up some inconsistencies” in the Condominium Property Act (the “Act”) “that do not simply work in condominium boards”especially “where a quorum might constitute three people.” See House of Representatives Transcription Debate, May 18, 1993, Page 30, Lines 22-23. The legislation wasintended to help residents “live together a little easier.” Id., Pages 31, Line 3. When asked if the bill would “eliminate” voting rights, the sponsor answered it would not, as itwas especially designed for “very small boards.” Id., Page 31, Lines 6-12. Over the past two decades, the CBA’s position has not changed, for in response to Palm II, theCBA Condominium Law Subcommittee proposed a revision to the Act (HB2645) that would have clarified that a “meeting of board of managers” would not include “merediscussion, conference, or working session at which no formal vote is taken.”

IV. Conclusion: Although the legislative response to Palm II (P.A. 99–0567) that expanded the exceptions to formalities was well-intentioned, it did not address theunderlying problem. A quorum is still required to follow formalities for all other communications related to association business. An approach like the CBA’s suggestedHB2645 is simple, and is consistent with a February 23, 2011 Attorney General Public Access Counselor opinion that school board members do not violate the OpenMeetings Act by engaging in a “meeting” via email, when simply sharing information or exchanging non-deliberative casual commentary or remarks. Until the legislatureclarifies its intent, associations will continue to unnecessarily struggle to balance efficient management with overly-protective unnecessary formalities.

Missing the Heart of Palm

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In general, the exceptions are: 1) discussion of litigation; 2) consideration of employment matters; and 3) discussion of violations of rules and regulations. See 765 ILCS605/18(a)(9)(A). See Palm II, at ¶59, addressing: 1) investigations; 2) discussions; and 3) voting. See also Robert’s Rules of Order, addressing: 1) reports; 2) debate and discussion; and3) voting. See Robert’s Rules of Order, 9th Edition, Sections 3, 10, 40, 42, 43, 47, and 50.

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Palm v. 2800 Lake Shore Drive Condominium Ass'n, 2014 IL App (1st) 111290 (2014)

10 N.E.3d 307, 381 Ill.Dec. 222

© 2019 Thomson Reuters. No claim to original U.S. Government Works. 1

KeyCite Yellow Flag - Negative Treatment

Declined to Extend by North Spaulding Condominium Association v.

Cavanaugh, Ill.App. 1 Dist., March 31, 2017

2014 IL App (1st) 111290Appellate Court of Illinois,

First District, Fifth Division.

Gary PALM, Plaintiff–Appellee,v.

2800 LAKE SHORE DRIVE CONDOMINIUMASSOCIATION, an Illinois Not–for–Profit

Corporation; Board of Directors of the 2800Lake Shore Drive Condominium Association;

and Kay Grossman, Individually and asPresident of the Board, Defendants–Appellants.

No.1

–11

–1290

.|

May 2, 2014.

SynopsisBackground: Condominium unit owner brought actionagainst condominium association, association's board ofdirectors, and board president seeking declaratory andinjunctive relief for assorted violations of the association'sdeclaration and bylaws, the Illinois CondominiumProperty Act, and the General Not for Profit CorporationAct. The Circuit Court, Cook County, Sophia Hall, J.,granted owner partial summary judgment and issueddeclaratory and injunctive orders. Defendants appealed.

Holdings: The Appellate Court, Palmer, J., held that:

[1] res judicata did not apply to preclude court fromconsidering unit owner's claim regarding open meetings;

[2] board members violated Condominium Property Actprovision requiring board meetings to be open to any unitowner by holding board meetings in closed working orexecutive sessions;

[3] members violated the Condominium Property Actprovision requiring board meetings to be open to anyunit owner by voting on issues through email and bycanvassing board members;

[4] management agreement provision that allowedmanagement company to consult three condominiumassociation officers and obtain approval of one officer forcontracts violated Not for Profit Act;

[5] board members violated Condominium Property Actby failing to vote on the defense of unit owner's litigationin an open meeting;

[6] trial court did not err in finding that condominiumassociation board members' breaches of fiduciary dutywere done with gross negligence;

[7] board members' breaches of fiduciary duty were notprotected by business judgment rule;

[8] association board breached its fiduciary duty by usingthe association's operating fund to pay reserve expensesand reimbursing the operating fund from the reserve fund;and

[9] association board violated condominium declarationby failing to mail all unit owners notice of board meetings.

Affirmed.

Gordon, P.J., filed opinion specially concurring.

West Headnotes (37)

[1] JudgmentNature and requisites of former recovery

as bar in general

JudgmentNature and elements of bar or estoppel

by former adjudication

Under the doctrine of “res judicata,” a finaljudgment on the merits rendered by a courtof competent jurisdiction bars any subsequent

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10 N.E.3d 307, 381 Ill.Dec. 222


actions between the same parties or theirprivies on the same cause of action.

Cases that cite this headnote

[2] JudgmentNature and elements of bar or estoppel


JudgmentMatters which might have been litigated

Doctrine of res judicata extends not onlyto what was actually decided in the originalaction, but also to matters which could havebeen decided in that suit.



as bar in general

In order for the doctrine of res judicata toapply, there must be (1) a final judgment onthe merits rendered by a court of competentjurisdiction, (2) an identity of cause of actionand (3) an identity of parties or their privies.


[4] JudgmentMerits of controversy in general

Trial court's original dismissal ofcondominium unit owner's claim requestingjudicial declaration that the condominiumassociation board could not take any actionwithout a vote at board meetings open toattendance by unit owners was not on themerits, and thus, res judicata did not applyto preclude court from considering the sameissues in owner's subsequent claim, eventhough the dismissal was with prejudice; thecourt did not examine the merits of the claimprior to dismissal, but rather dismissed theclaim because owner was seeking an advisoryopinion. S.H.A. 735 ILCS 5/2–701.

1 Cases that cite this headnote

[5] Judgment

What constitutes judgment on merits ingeneral

A case is decided on the merits for purposesof res judicata where it is decided on the realor substantial grounds of an action or defenseas distinguished from matters of practice,procedure, jurisdiction, or form.


[6] JudgmentWhat constitutes judgment on merits in

general

A judgment is on the merits in the sense thatit may be pleaded in bar of a subsequentaction where it amounts to a decision as to therespective rights and liabilities of parties basedon the ultimate facts or the state of the factsdisclosed by pleadings or evidence, or both,and on which the right of recovery dependsirrespective of formal, technical, or dilatoryobjections or contentions.


[7] Pretrial ProcedureDismissal with or without prejudice

Where there is no adjudication on themerits, a dismissal should be granted withoutprejudice, as opposed to granting dismissalwith prejudice.



Pretrial ProcedureOperation and Effect

The effect of a dismissal without prejudice isto render the proceedings a nullity and leavethe parties in the same position as if the casehad never been filed.



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10 N.E.3d 307, 381 Ill.Dec. 222


Pretrial ProcedureAdjudication on merits

A dismissal with prejudice constitutes anadjudication on the merits which bars theplaintiff from maintaining another action onthe same claim.


[10] ActionMoot, hypothetical or abstract questions

Illinois courts may rule on actualcontroversies only.


[11] Declaratory JudgmentMoot, abstract or hypothetical questions

Declaratory JudgmentAdvisory opinions

A declaratory judgment action is not intendedto permit moot or hypothetical cases, or toenable parties to secure advisory opinions orlegal advice from the court with respect toanticipated future difficulties.


[12] Declaratory JudgmentComplaint, Petition or Bill

Declaratory JudgmentStatement of controversy

Declaratory JudgmentGrounds of motion

A plaintiff seeking declaratory judgment mustspecify all facts necessary to justify theunusual relief sought; if the complaint doesnot state facts sufficient to show ripeness,dismissal is proper.


[13] Declaratory JudgmentFuture or contingent questions

If the harm that a plaintiff claims indeclaratory judgment action is merely

speculative or contingent, the claim is unripeand a court should not decide it.


[14] Common Interest CommunitiesGoverning board; members, directors,

and officers; committees

Condominium association board membersviolated the Condominium Property Actprovision requiring board meetings to be opento any unit owner by holding board meetingsin closed working or executive sessions, eventhough no voting took place in the closedsessions. S.H.A. 765 ILCS 605/2(w).




“Conducting board business” as used inprovision of the Condominium PropertyAct requiring meetings of condominiumassociation board managers to be open toany unit owner means directing or takingpart in the operation or management of theassociation. S.H.A. 765 ILCS 605/2(w).




Condominium association board membersviolated the Condominium Property Actprovision requiring board meetings to be opento any unit owner by voting on issues throughemail and by canvassing board members.S.H.A. 765 ILCS 605/2(w).




Common Interest Communities

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10 N.E.3d 307, 381 Ill.Dec. 222


Contracts in general

Condominium management agreementprovision that allowed the managementcompany to consult three condominiumassociation officers and obtain approvalof one officer for contracts violated theassociation's declarations and bylaws and theNot for Profit Act; under the declaration,the board had the authority to allow themanagement company to enter into contractson behalf of the association, but the boarddid not have the authority to authorize thatcontractual action taken by the managementcompany be approved by less than the entireboard. S.H.A. 805 ILCS 105/108.40(d).


[18] ContractsLanguage of contract

The primary goal of contract interpretation isto give effect to the intent of the parties, asshown by the language in the contract.


[19] ContractsConstruing whole contract together

In determining the intent of the parties to acontract, a court must consider the documentas a whole and not focus on isolated portionsof the document.


[20] ContractsApplication to Contracts in General

ContractsLanguage of contract

ContractsLanguage of Instrument

If the language of a contract is clear andunambiguous, the intent of the parties mustbe determined solely from the language ofthe contract itself; that language should begiven its plain and ordinary meaning and thecontract enforced as written.


[21] JudgmentContract cases in general

The interpretation of a contract is a questionof law and may, therefore, be decided on amotion for summary judgment.




Condominium association board membersviolated Condominium Property Act byfailing to vote on the defense of unit owner'slitigation in an open meeting; although the Actprovided an exception allowing the board todiscuss litigation matters in closed sessions, itspecifically provided that the board must voteon any litigation matter at meeting open to all

unit owners. S.H.A. 765 ILCS 605/18(a)(9).




Trial court did not err in finding thatcondominium association board members'breaches of fiduciary duty were done withgross negligence, even though no cause ofaction exists for negligently breaching afiduciary duty; the court held that members'conduct was grossly negligent only in thecontext of members' affirmative assertion thatthe board was not liable because, pursuantto an exculpatory clause in the declaration,board members and association officers werenot liable for any mistakes of judgment orother acts or omissions except for any extraomissions found by a court to constitute grossnegligence or fraud.


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10 N.E.3d 307, 381 Ill.Dec. 222




Because the condominium association officersand board members owe a fiduciary orquasi-fiduciary duty to the members of theassociation, they must act in a mannerreasonably related to the exercise of that duty,and the failure to do so will result in liabilitynot only for the association but also for the

individuals themselves. S.H.A. 765 ILCS605/18.4.


[25] FraudFiduciary or confidential relations

There is no cause of action in Illinoisfor negligent or grossly negligent breach offiduciary duty.


[26] Appeal and ErrorVerdict, Findings, and Sufficiency of

Evidence

Appellate court would presume that the trialcourt had a sufficient basis for addressingwhether condominium association boardmembers' conduct was grossly negligent;members failed to include a transcriptof the four-day hearing on unit owner'sthird amended complaint, counterclaim andaffirmative defenses in the record on appeal,and thus, without a report of the proceedings,appellate court could not know with certaintythe issues before the trial court during thefour-day hearing.




The fiduciary duty owed by condominiumassociation board members to unit ownersrequires that board members act in a manner

reasonably related to the exercise of that duty,and their failure to do so results in liabilityfor the board and its individual members;however, when a board properly exercisesits business judgment in interpreting its owndeclaration, court will not find the board'sinterpretation a breach of fiduciary duty.

S.H.A. 765 ILCS 605/18.4.




The business judgment rule will defeatbreach of fiduciary duty claims where thecondominium association board's actionswere not permitted under the condominium

declaration. S.H.A. 765 ILCS 605/18.4.


[29] Corporations and Business OrganizationsBusiness judgment rule in general

Under the “business judgment rule,” absentevidence of bad faith, fraud, illegality, orgross overreaching, courts are not at libertyto interfere with the exercise of businessjudgment by corporate directors.


[30] Corporations and Business OrganizationsDuty of care in general

If board members have failed to exercise duecare, then they may not use the businessjudgment rule as a shield for their conduct.


[31] Corporations and Business OrganizationsDuty to inquire; knowledge or notice

One component of due care for purposesof applying business judgment rule is thatdirectors must inform themselves of materialfacts necessary for them to properly exercisetheir business judgment; to that end, if a

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10 N.E.3d 307, 381 Ill.Dec. 222


board seeks legal advice before reaching itsdecision and relied on that advice in reachingits decision, it will be found to have properlyexercised its business judgment.


[32] Appeal and ErrorGrounds of Review

Appeal and ErrorCompleteness; partial or incomplete

record

Appellants have burden to present asufficiently complete record to support theirarguments and any inadequacies in the recordwill be held against them.



Evidence

Appellate court would presume that thetrial court properly found condominiumassociation board members failed to presentany evidence that their attorneys advisedthem to use the procedures regarding reserves,surpluses and notices regarding surplusassociation income for purposes of applyingbusiness judgment rule to members' breachof fiduciary duty; members did not include areport of proceedings of the four-day hearingon unit owner's amended complaint in therecord, and thus, the appellate court did notknow what evidence the trial court heard,let alone whether that evidence was sufficientto show that members acted on advice ofcounsel in transferring excess funds to thereserve accounts rather than reimbursing theunit owners.




Condominium association board president'sbelief that board's practice of transferring

excess association funds to association'sreserve account rather than crediting it againstunit owners future assessments as requiredby condominium declaration was based onadvice from counsel was insufficient to showthat the board received the requisite legaladvice and relied on it so as to apply thebusiness judgment rule to board's breach offiduciary duty.



Evidence

Appellate court would presume the trialcourt had a sufficient basis to find thatcondominium association board membersbreached their fiduciary duty by transferringsurplus association income to the association'sreserve account instead of crediting it againstunit owners' future assessments as required bydeclaration; members did not include a reportof proceedings of the four-day hearing on unitowner's amended complaint in the record, andthus, the appellate court did not know whatevidence the trial court heard.




Common Interest CommunitiesFunds and distributions

Condominium association board breachedits fiduciary duty by using the association'soperating fund to pay reserve expenses andreimbursing the operating fund from thereserve fund.




Condominium association board violatedcondominium declaration by failing to mail

13






























10 N.E.3d 307, 381 Ill.Dec. 222


to all unit owners notice of board meetings,even though Condominium Property Actallowed for notice of meetings to be mailedor delivered; because declaration provisiondid not conflict with other condominiuminstruments, provision in Act that statedin the event of a conflict the declarationprevailed except to the extent the declarationwas inconsistent with the Act did not apply.

S.H.A. 765 ILCS 605/4.1(b), 605/18(a)(9).


Attorneys and Law Firms

*312 Orum & Roth, LLC, of Chicago (Mark D. Roth,of counsel), for appellants.

Gary Palm, of Chicago, appellee pro se.

OPINION

Justice PALMER delivered the judgment of the court,with opinion.

**227 ¶ 1 Plaintiff Gary Palm filed an action againstdefendants the 2800 Lake Shore Drive CondominiumAssociation (the association), the board of directors of theassociation (the board) and Kay Grossman (Grossman),individually and as board president (collectively,defendants) seeking declaratory and injunctive relief forassorted violations of the association's declaration andbylaws, the Illinois Condominium Property Act (the

Condominium Property Act) ( 765 ILCS 605/1 et seq.(West 2004)) and the General Not for Profit Corporation

Act of 1986 (the Not for Profit Act) ( 805 ILCS105/101.01 et seq. (West 2004)). The court granted partialsummary judgment to Palm on several issues and issueddeclaratory and injunctive orders. After a hearing, itfound for Palm on various remaining issues and againentered declaratory and injunctive relief. Defendants raise12 issues on appeal. We affirm.

¶ 2 BACKGROUND

¶ 3 Palm owns a condominium unit in the 2800 LakeShore Drive condominium building in Chicago and

has for many years. 1 He served on the board ofdirectors of the condominium association from 1992to 1998. The association is a not-for-profit corporation

formed pursuant to the Not for Profit Act ( 805 ILCS105/101.01 et seq. (West 2004)). It is governed by the

Condominium Property Act ( 765 ILCS 605/1 et seq.)(West 2004). The governing document for the associationis the “Declaration of Condominium Ownership andof Easements, Restrictions, Covenants and By–Laws of2800 Lake Shore Drive Condominium Association” (thedeclaration).

¶ 4 In 1999, Palm requested that the board producedocuments related to the building's management. In2000, when the board refused to produce the documents,Palm filed a complaint against defendants in the circuitcourt of Cook County seeking to examine and copy thedocuments. The court dismissed the complaint withoutprejudice.

¶ 5 Palm then filed a four-count first amended complaint.In count I, he asserted **228 *313 that the boardviolated section 18(a)(9) of the Condominium Property

Act ( 765 ILCS 605/18(a)(9) (West 2000)) by havingdiscussions of condominium business and taking actionon matters at meetings closed to unit owners, makingdecisions by mail vote, and failing to vote in open meetingson issues discussed and actions taken in executive sessions.He cited no specific instances demonstrating the board'salleged violations. Palm requested a declaration that theboard cannot take any action without a vote at a boardmeeting open to attendance by unit owners and that alldiscussion of association business, except for the threematters specifically excepted in section 18(a)(9), must beconducted by the board at open meetings.

¶ 6 In count II, again without factual support, Palmasserted the association violated the CondominiumProperty Act when the board president exceeded herauthority, failed to call sufficient meetings of the board toconduct all necessary business and exceeded “her powers”at open board meetings and dominated the discussion.He requested a declaration that Grossman exceeded herauthority by taking actions without board approval andimproperly imposed her views on the board at meetings.

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10 N.E.3d 307, 381 Ill.Dec. 222


¶ 7 In count III, without factual support, Palmasserted that the board president and associationcounsel improperly limited board member's access toall documents and records of the association andthese limitations interfered with the board members'performance of their fiduciary duties to the associationand its members. He requested a declaration that boardmembers are entitled to access all records and documentsof the association upon request within a reasonable periodof time without the need to state a purpose or pay costs orfees associated with such requests.

¶ 8 In count IV, Palm asserted that the board hadimproperly denied his repeated requests to examine andcopy assorted association documents and records inviolation of statute, ordinance and association declarationand bylaws. He requested that the court order theassociation to allow him to inspect and copy the requesteddocuments.

¶ 9 Defendants moved to dismiss. They argued that countI should be dismissed as it failed to state a claim onwhich relief could be granted. Defendants pointed out thatPalm failed to plead actual facts regarding any matterson which the board had allegedly voted by mail or toidentify any issues that the board had allegedly improperlydiscussed and acted on in executive sessions rather thanopen meetings. They asserted that Palm had not presentedan actual controversy for the court's review but rather wasrequesting an order restating the law set forth in section18(a)(9) of the Condominium Property Act. Defendantsargued similarly with regard to count II, asserting thatPalm failed to state a claim for which legal relief could begranted because he failed to set forth Grossman's allegedviolations with specificity and failed to allege any lawapplicable to his vague allegations.

¶ 10 Defendants argued that count III should be dismissedas (a) Palm's request for a declaratory finding andinjunction awarding him unfettered access to associationdocuments and records was contrary to the CondominiumProperty Act and the Chicago condominium ordinance,(b) Palm failed to plead actual facts in count III, and(c), since he was asking for an opinion of the rightsof board members and he was no longer a boardmember, his request for a declaratory judgment wasmoot and he was merely requesting an advisory opinion.Defendants asserted count IV should be dismissed becausePalm sought relief almost identical to that raised in

his previously dismissed complaint and because the**229 *314 relief Palm requested was contrary to the

Condominium Property Act.

¶ 11 Both parties filed additional memoranda and, atthe court's request, supplemental briefs related only tocount IV, addressing the question of whether the board isrequired to produce association documents under the Cityof Chicago condominium ordinance. On December 11,2000, the court issued an opinion and order stating that,after considering the parties' memoranda, exhibits, casematerial and oral argument, it concluded that Palm was“required to assert a proper purpose [as a board memberrequesting documents] and has failed to do so, and thatall four counts of the First Amended Complaint should bedismissed.”

¶ 12 The court's opinion specifically addressed its dismissalof count IV in detail, finding that the Not for ProfitAct required that association members must state aproper purpose in order to be allowed to inspectassociation records, this requirement preempted the Cityof Chicago ordinance or the declaration which mightprovide otherwise. It held that Palm failed “to allege anyfacts that would support that a proper purpose has beenstated.” The court then stated that Palm did not “supporthis claim with any factual evidence, but only conclusorylanguage. Accordingly, all four counts are deficient andthe defendant is entitled to dismissal.” The court dismissedthe complaint and granted Palm leave to file a secondamended complaint.

¶ 13 Palm filed a motion to reconsider. He challenged thecourt's findings regarding his count IV claim requestingproduction of documents. He also pointed out that thecourt had “apparently concluded that the Not for ProfitAct's document production provision controlled all theother issues raised in Counts I–III, although these threeissues were not discussed.” He stated that the issuesraised in counts I, II and III were unrelated to accessto documents and had been argued and briefed on othergrounds. Palm argued that the court's decision shouldhave explained its reasons for the dismissal of counts I,II and III because “otherwise [Palm] has no idea howto amend the complaint further or whether to appealwithout amending his complaint again.” He asserted thatrendering a decision without giving reasons violated his“due process rights to have his claim decided in a way thatmakes them susceptible for judicial review.”

15


10 N.E.3d 307, 381 Ill.Dec. 222


¶ 14 On March 21, 2001, the court held a hearing on themotion to reconsider and defendants' response thereto.The transcript of the proceeding shows that the entiretyof the argument was directed to count IV, addressingconflicts between the Chicago condominium ordinance,the Condominium Property Act and the Not for ProfitAct, all of which have differing provisions relating to aboard's duty to produce documents. The court issued averbal decision. It granted the motion to reconsider andstated that, upon reconsideration, it again granted themotion to dismiss.

¶ 15 The court first addressed the dismissal of count IVin detail and dismissed the count without prejudice. Thecourt next addressed counts I and II, stating only that thecounts “ask for an advisory opinion” and dismissing themwith prejudice. It lastly dismissed count III with prejudice,finding that the count “asks for a declaratory judgment,but declaratory judgment need not be granted where otherrelief [here under count IV] will resolve the problem.” Thecourt gave Palm leave to amended count IV, noting thatPalm could “of course” replead counts I, II and III inhis second amended complaint for purposes of preservingthe record. It declined **230 *315 to make an IllinoisSupreme Court Rule 304(a) (eff. Feb. 26, 2010) findingthat there was no just reason to delay appeal on counts I,II and III.

¶ 16 On April 3, 2001, the circuit court entered a writtendecision, “[a]fter having reconsidered its December 11,2000, order, * * * for the reasons stated in court at theMarch 21, 2001, hearing,” dismissing counts I, II and IIIof the first amended complaint with prejudice. It dismissedcount IV without prejudice and granted Palm leave to filea second amended complaint.

¶ 17 Citing new authority, Palm filed a motion toreconsider the March 21, 2001, oral and April 3, 2001,written decisions or, in the alternative, seeking an IllinoisSupreme Court Rule 304(a) finding that there was no justreason to delay appeal. The court denied the motion toreconsider as to counts I and II. It granted the motionas to counts III and IV. Upon reconsideration, the courtagain dismissed count III with prejudice, finding that Palmfailed to allege that he had standing to litigate the rightsof board members since he did not allege that he was amember of the board.

¶ 18 After a detailed examination of count IV, thecourt held that count IV stated a cause of action andvacated its earlier dismissal of count IV. The circuitcourt subsequently granted summary judgment to Palmon count IV in 2003, ordering the association to producethe requested documents and awarding Palm attorneyfees. Defendants appealed the circuit court's decision. The

decision was affirmed on appeal in Palm v. 2800 LakeShore Drive Condominium Ass'n, 2013 IL 110505, 370Ill.Dec. 299, 988 N.E.2d 75, and is not at issue here.

¶ 19 In 2004, Palm filed a second amended complaint.In count I, he claimed that the association was so poorlymanaged that it was subject to judicial dissolution undersections 112.50(a)(2), (a)(3) and (a)(4) of the Not forProfit Act (805 ILCS 105/112.50(a)(2)-(4) (West 2004)).He asserted that defendants repeatedly acted beyondthe scope of their corporate and legal authority by, inrelevant part, violating the open meeting requirementsof section 18(a)(9) of the Condominium Property Actby conducting board business in working sessions notopen to unit owners, and conducting votes by emailand telephone canvassing. He requested, under section112.55 of the Not for Profit Act, as an alternative todissolution, the appointment of a custodian or provisionaldirector of the association in order to implement reform.He additionally requested, in lieu of dissolution, anorder declaring and enjoining violations of the rightsand obligations related to open meetings, board minutes,recording of board meetings, board member access todocuments, unit owners' access to documents, frequencyof board meetings, reserve fund accounting, approvalof capital expenditures in excess of $25,000, deposit ofassociation funds in uninsured accounts, promulgation of“rules and regulations,” handicap access, audits, boardmember conflicts of interest, property manager conflictsof interest, notice of related-party transactions, actionsauthorized by less than a board quorum and boardelection activities. He also requested that Grossman beremoved from the board and that the association disclosewhy it destroyed the 1998 board election materials.

¶ 20 In count II, Palm sought the same declaratory andinjunctive relief as in count I, but pursuant to section 2–701 of the Illinois Code of Civil Procedure (735 ILCS5/2–701 (West 2004)), section 103.15 of the Not forProfit Act and the equitable powers of the court. Incount III, he sought a court order compelling immediateproduction of specific documents and a **231 *316

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10 N.E.3d 307, 381 Ill.Dec. 222


finding of contempt against defendants for their failure tocomply with a court order to produce the documents. Incount IV, brought pursuant to the Chicago condominiumordinance, the Condominium Property Act, the Not forProfit Act and the declaration, Palm sought an ordercompelling immediate production of certain documentsthe board had refused to provide at his request. In countV, he charged Grossman with constructive fraud and ultravires acts and sought her removal from the board.

¶ 21 Defendants' moved to dismiss the second amended

complaint. The court denied the motion. 2

¶ 22 In January 2005, Palm filed a five-count thirdamended complaint. Counts I and II mirrored countsI and II of the second amended complaint. Palm“deleted” count III. In count IV, Palm requested anorder compelling production of assorted documents underthe Chicago condominium ordinance, the CondominiumProperty Act, the declaration and the Not for Profit Act.In count V, Palm sought the removal of Grossman fromthe board as he had in count V of his second amendedcomplaint but with numerous factual assertions regardingher alleged fraudulent conduct and breach of fiduciaryduty to the association and unit owners.

¶ 23 Defendants filed an answer to the third amendedcomplaint, four affirmative defenses and a counterclaim.The affirmative defenses asserted defendants were notliable to Palm because (1) they had always relied on andacted under advice of counsel, (2) they were immunizedby an exculpatory clause in the declaration, (3) thefive-year statute of limitations in section 13–205 of theIllinois Code of Civil Procedure (735 ILCS 5/13–205(West 2004)) barred Palm's claims and (4) collateralestoppel and res judicata barred many of Palm's claims.Defendants' counterclaim asserted that Palm's contentionthat the association qualified for judicial dissolution wasmade vexatiously, arbitrarily and not in good faith anddefendants were, therefore, under section 112.55(f) of theNot for Profit Act (805 ILCS 105/112.55 (West 2004)),entitled to attorney fees and costs.

¶ 24 Palm moved for “partial declaratory and injunctivesummary judgment.” He argued, in relevant part:

(1) The board was violating the declaration bydiscussing and acting on business at closed meetingsnot open to unit owners, specifically by its making

decisions in closed sessions regarding (a) whether tocommence or defend litigation, (b) employment andpersonnel matters, (c) unit owner misconduct and (d)unit owner delinquency.

(2) The board was violating the declaration and theNot for Profit Act by making decisions without amajority vote or even a formal vote, specifically by(a) delegating responsibility for deciding on bids andcontract to the management company and an unofficialthree-member committee, (b) allowing some boardmembers to approve waivers of rights of first refusal byemail or telephone rather than requiring the decisionsto be made by the entire board at an open meeting,(c) making capital expenditures in excess of $25,000without obtaining unit owner approval, (d) allowing**232 *317 the management company to deposit

funds in bank accounts not fully insured by the FederalDeposit Insurance Corporation (FDIC) and (e) makingexpenditures in excess of $25,000 without a vote by andapproval of unit owners.

¶ 25 Palm requested that the court enter a declarationthat the enumerated acts by defendants were contraryto the law and an injunction providing for adherenceto the applicable laws. He also requested a declarationthat the association qualified for judicial dissolutionor the imposition of alternative remedies such as theappointment of a custodian or provisional director,dismissal of the association's attorney and managementcompany, retaining of an accountant to conduct an auditand the termination of assorted contracts.

¶ 26 On July 18, 2008, the court granted Palm's revisedmotion for partial summary judgment in part. It found:

(1) defendants violated the declaration by “admittedly‘doing business' at closed meetings,” which includeddiscussing association matters and soliciting inputby email, canvassing board members by phone anddeciding matters in closed “working” sessions prior topresentation of the matter for a vote in an open meeting;

(2) the board did not have the authority under thedeclaration to enter into contracts without the approvalof the entire board and violated the Not for ProfitAct by failing to provide for committees to conductboard business by amending the declaration to allowthe management company to consult three officers and

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10 N.E.3d 307, 381 Ill.Dec. 222


obtain the approval of only one for contracts between$10,000 and $100,000,

(3) the board violated the declaration and the Not forProfit Act by undertaking to defend the instant casewithout taking a vote in an open meeting as to whetherto pursue the litigation.

The court denied summary judgment as to all other claims.

¶ 27 In opposition to the motion for summary judgment,defendants had argued that the court's April 3, 2001,order dismissing counts I, II and III of the first amendedcomplaint with prejudice required denial of the motionfor summary judgment because the dismissals weredispositive of many of the claims in the third amendedcomplaint. Palm responded that the court previously hadruled against defendants on this same argument whendefendants presented it in their motion to dismiss thesecond amended complaint. Addressing these arguments,the trial court stated that the reason for the court'sprior dismissal with prejudice, which had been entered byanother judge, was “not clear from the record.” It statedthat it was, therefore, “unable to conclude that the priordismissal was, in fact, on the merits and this court's findingagainst defendants in denying the motion to dismiss theSecond Amended Complaint is a basis to deny summaryjudgment.” The court also denied defendants' motion todismiss the third amended complaint on the basis of thestatute of limitations, finding that the allegations in thesecond and third amended complaints “relate back” to theoriginal and first amended complaints and were, therefore,not barred by the statute of limitations.

¶ 28 On August 26, 2008, the court issued a declaratoryand injunctive order based on the July 18, 2008, decision.It enjoined defendants from addressing, acting on, votingon, and making decisions on affairs of the associationin any gathering in which a quorum of the board ispresent (in person, by telephone or otherwise) unless thegathering is open to any unit owner and prior noticehas been provided **233 *318 to all unit owners.It also enjoined defendants from authorizing contacts,authorizing or allowing litigation, exercising waivers ofthe association's right of first refusal on unit purchases,approving compensation for employees and permittingthe management company or any other entity to select orenter into a contract on behalf of the association withouta board vote in a meeting open to all unit owners for

which prior notice had been provided to the owners and aquorum of the board was present.

¶ 29 On September 10, 2010, after a four-day hearing,the court entered judgment on the remaining claims inPalm's third amended complaint. It held that defendantsbreached their fiduciary duty by failing to strictlycomply with the requirements of the declaration andthe condominium property act in their handling of theassociation finances. It found that defendants failedto itemize reserves in the budget, failed to credit unitowners with surpluses, commingled operating and reserveexpenses and allowed funds to be deposited in bankaccounts in excess of the FDIC insured limit. The courtalso found that the board failed to provide written noticesof board meetings as required by the declaration andfailed to present conflicts of interest to the unit owners forapproval. It found against Palm on the remaining issues.

¶ 30 Addressing defendants' affirmative defenses, the courtfound that there was no evidence that defendants acted onadvice of counsel and that the statute of limitations did notbar the actions. With regard to defendants' assertion thatthe exculpatory clause in the declaration shielded themfrom liability unless their acts or omissions were grosslynegligent or fraudulent, the court found that none ofdefendants' violations constituted fraud. It did, however,find that defendants' conduct was “grossly negligent inthat they intentionally failed to act in the face of aknown duty, demonstrating a conscious disregard fortheir duties.”

¶ 31 The court denied defendants' counterclaim seekingattorney fees and expenses under the Not for ProfitAct for Palm's alleged bad faith in raising grounds fordissolution of the association in count I of his thirdamended complaint. The court held that, although theevidence did not show oppressive or fraudulent conductby defendants or waste of corporate assets, it did show thatdefendants breached their fiduciary duties as managersof the building by violating the clear dictates of thedeclaration and the Condominium Property Act. It found,therefore, that “Palm did not act arbitrarily, vexatiouslyor not in good faith in filing the complaint” such that anaward of fees was warranted under the statute.

¶ 32 On October 25, 2010, the court issued adeclaratory judgment enumerating its findings based onthe September 20, 2010, decision. The court found, in

18


10 N.E.3d 307, 381 Ill.Dec. 222


relevant part, that defendants violated the declaration by(1) putting operating revenue surpluses into the reservefund rather than applying the surpluses as an adjustmentto the unit owners' assessment installments, (2) failingto designate in the annual budget an itemization andallocation for reverse funds, (3) commingling operatingand reserve funds, (4) failing to mail each unit ownernotices of board meetings and (5) failing to enforce therequirement in the management agreement requiring themanaging agent to deposit all funds in an FDIC-insuredaccount.

¶ 33 On April 5, 2011, the court issued an injunctionbased on its September 20, 2010, decision. It enjoineddefendants from (1) failing to apply any net shortage orexcess of operating income identified in the association'sannual accounting as an adjustment to the installmentsdue from **234 *319 unit owners, (2) failing to providean annual budget for the reserve account that itemizesand allocates reserve funds, (3) commingling reserve fundswith operating funds and using operating funds to payreserve expenses, (4) allowing the managing agent to placemoney exceeding the FDIC insurance deposit limits intouninsured bank accounts and (5) failing to mail notices ofboard meetings to all unit owners. The court stated thatthe order was a final order disposing of all matters.

¶ 34 Defendants filed a timely notice of appeal on May 2,2011. They appeal from (1) the trial court's July 18, 2008,order granting partial summary judgment to Palm on histhird amended complaint and its August 26, 2008, ordergranting declaratory and injunctive relief based on theJuly 18, 2008, order; and (2) its September 10, 2010, orderentering judgment on the remaining claims in the thirdamended complaint and its October 25, 2010, declaratoryorder and April 5, 2011, injunction granting relief basedon the September 10, 2010, order.

¶ 35 ANALYSIS

¶ 36 I. The July 18, 2008, Orderand August 26, 2008, Order

¶ 37 Defendants raise six issues challenging the court'sJuly 18, 2008, order granting partial summary judgmentto Palm on his third amended complaint and its August26, 2008, order entering declaratory and injunctive reliefbased on the July 18, 2008, findings.

¶ 38 A. Previously Dismissed Claims

¶ 39 Defendants first assert that the trial court'sprevious dismissal with prejudice of counts I, II andIII of Palm's first amended complaint precluded furtherlitigation related to the same issues raised in plaintiff'smotion for partial summary judgment on the thirdamended complaint and the court erred in considering,and deciding, those issues again. However, defendantsspecifically argue only that the issues addressed by thecourt's July 18, 2008, ruling regarding “doing businessin closed session” had been previously raised by Palm incount I of his first amended complaint and dismissed withprejudice. Since defendants do not argue the specifics ofhow the dismissal with prejudice of counts II and III of thefirst amended complaint relates to the court's findings onthe motion for summary judgment, we will not address the

effect of the dismissal with prejudice of counts II and III. 3

[1] [2] ¶ 40 Defendants do not use the term “resjudicata.” However, their argument that the court'sdismissal with prejudice of counts I, II and III of the firstamended complaint precludes the court's consideration ofthe same issues raised in the third amended complaintand the motion for summary judgment directed theretois clearly encompassed by the doctrine of res judicata.Under the doctrine, “a **235 *320 final judgment onthe merits rendered by a court of competent jurisdictionbars any subsequent actions between the same parties or

their privies on the same cause of action.” Rein v. DavidA. Noyes & Co., 172 Ill.2d 325, 334, 216 Ill.Dec. 642,665 N.E.2d 1199 (1996). “The doctrine extends not onlyto what was actually decided in the original action, butalso to matters which could have been decided in that

suit.” Id. at 335, 216 Ill.Dec. 642, 665 N.E.2d 1199. “Inother words, the bar extends not only to what has actuallybeen determined in the former proceedings, but also toany other matters properly involved by the subject matter

which could have been raised and determined.” BestCoin–Op, Inc. v. Paul F. Ilg Supply Co., 189 Ill.App.3d 638,

650, 136 Ill.Dec. 957, 545 N.E.2d 481 (1989). 4

[3] ¶ 41 In order for the doctrine of res judicatato apply, there must be (1) a final judgment on themerits rendered by a court of competent jurisdiction,

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10 N.E.3d 307, 381 Ill.Dec. 222


(2) an identity of cause of action and (3) an identity of

parties or their privies. Rein, 172 Ill.2d at 335, 216Ill.Dec. 642, 665 N.E.2d 1199. The second and thirdrequirements for res judicata are met here with respectto the “open meetings” counts in the first and thirdamended complaints and the parties do not challenge theirexistence. The parties are identical in both complaintsand there is an identity of causes of action between thecomplaints. In count I in both complaints, Palm assertsthat the board violated the open meeting requirement ofsection 18(a)(9) of the Condominium Property Act bydiscussing condominium business and taking action onsuch matters at meetings closed to unit owners or by email.In the first amended complaint, he sought a declarationthat the board cannot take any action without a vote at aboard meeting open to attendance by unit owners and thatall discussion of association business, except for the threematters specifically excepted in section 18(a)(9), must beconducted by the board at open meetings. He soughtsimilar relief in the third amended complaint, seeking anorder declaring and enjoining violations of defendants'section 18(a)(9) obligation to discuss board business andvote on matters in meetings open to all unit owners andrequiring defendants to conduct board business and votein meetings open to all unit owners. Clearly, the secondand third elements of res judicata are met.

[4] [5] [6] [7] [8] [9] ¶ 42 The question here iswhether the first requirement of res judicata is met. Thisdetermination depends on whether the dismissal withprejudice of count I of the first amended complaint was

a final judgment on the merits. Rein, 172 Ill.2d at 335,216 Ill.Dec. 642, 665 N.E.2d 1199. A case is decided onthe merits where it is decided on “the real or substantialgrounds of [an] action or defense as distinguishedfrom matters of practice, procedure, jurisdiction, or

form.” (Internal quotation marks omitted.) Johnson v.Du Page Airport Authority, 268 Ill.App.3d 409, 418, 206Ill.Dec. 34, 644 N.E.2d 802 (1994). “A judgment is onthe merits in the sense that it may be pleaded in bar ofa subsequent action where it amounts to a decision asto the respective rights and liabilities of parties based onthe ultimate facts or the state of the facts disclosed bypleadings or evidence, or both, and on which the rightof recovery depends irrespective of formal, technical ordilatory objections or contentions.” Fried v. Polk **236*321 Brothers, Inc., 190 Ill.App.3d 871, 878, 138 Ill.Dec.

105, 546 N.E.2d 1160 (1989).

“Where there is no adjudication on the merits, adismissal should be granted without prejudice, asopposed to granting dismissal with prejudice. [Citation.]The effect of a dismissal without prejudice is to renderthe proceedings a nullity and leave the parties inthe same position as if the case had never beenfiled. [Citation.] Conversely, ‘a dismissal with prejudiceconstitutes an adjudication on the merits which barsthe plaintiff from maintaining another action on the

same claim.’ ” (Emphases in original.) Johnson, 268Ill.App.3d at 418, 206 Ill.Dec. 34, 644 N.E.2d 802(quoting Rogaris v. Oliver, 246 Ill.App.3d 876, 881, 186Ill.Dec. 814, 617 N.E.2d 53 (1993)).

¶ 43 The trial court dismissed count I of the first amendedcomplaint with prejudice, indicating that the dismissal

was on the merits. Johnson, 268 Ill.App.3d at 419,206 Ill.Dec. 34, 644 N.E.2d 802. However, we must lookat the actual reason underlying the court's decision todismiss count I with prejudice to determine whether the

dismissal was actually on the merits. See Id. at 418–19,206 Ill.Dec. 34, 644 N.E.2d 802 (holding that trial court'sdismissal of complaint with prejudice was not a judgmenton the merits as the trial court's decision was based on itsfinding that the case was moot, and a mootness finding isnot a decision on the merits).

¶ 44 In count I of Palm's first amended complaint, herequested a judicial declaration that the board cannottake any action without a vote at board meetings opento attendance by unit owners and that all associationbusiness, except for matters specifically excluded bythe Condominium Property Act, must be conducted atboard meetings open to attendance by unit owners. Thecourt held that count I “asks for an advisory opinion”

and dismissed the count with prejudice.” 5 The court'sdismissal with prejudice was not a judgment on the merits.

[10] [11] [12] [13] ¶ 45 “Illinois courts may rule

on actual controversies only.” Smart Growth SugarGrove, LLC v. Village of Sugar Grove, 375 Ill.App.3d 780,789, 313 Ill.Dec. 725, 873 N.E.2d 20 (2007). Specifically,a complaint for a declaratory judgment requires an “‘actual controversy.’ ” Id. (quoting 735 ILCS 5/2–701(West 2004)). “ ‘A declaratory judgment action is notintended to permit moot or hypothetical cases, or toenable parties to secure advisory opinions or legal advice

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10 N.E.3d 307, 381 Ill.Dec. 222


from **237 *322 the court with respect to anticipatedfuture difficulties * * *.’ ” Byer Clinic & Chiropractic, Ltd.v. State Farm Fire & Casualty Co., 2013 IL App (1st)113038, ¶ 17, 370 Ill.Dec. 472, 988 N.E.2d 670 (quoting

Weber v. St. Paul Fire & Marine Insurance Co., 251Ill.App.3d 371, 373, 190 Ill.Dec. 656, 622 N.E.2d 66(1993)). “A plaintiff seeking declaratory judgment mustspecify all facts necessary to justify the unusual reliefsought. If the complaint does not state facts sufficient toshow ripeness, dismissal is proper.” Schwanke, Schwanke& Associates v. Martin, 241 Ill.App.3d 738, 748, 182Ill.Dec. 120, 609 N.E.2d 654 (1992). “[I]f the harm thata plaintiff claims is merely speculative or contingent, the

claim is unripe and a court should not decide it.” SmartGrowth Sugar Grove, LLC, 375 Ill.App.3d at 789, 313Ill.Dec. 725, 873 N.E.2d 20.

¶ 46 Here, the harm was entirely speculative. Palm'sfirst amended complaint neither alleged specific instancesin which defendants had decided association matters insessions closed to unit owners and by voting by email ortelephone canvassing nor asserted that Palm was injuredas a result of these alleged infractions of the CondominiumProperty Act. The complaint provided no factual basison which the court could determine that the board hadviolated the open meetings requirement of that Act, letalone a basis on which the court could issue the requesteddeclaration (or, more accurately, an injunction) that theboard cannot take any action without a vote at boardmeetings open to attendance by unit owners and thatall nonexcepted association business must be conductedat board meetings open to attendance by unit owners.In other words, count I of the first amended complaintdid not specify all facts necessary to justify the requesteddeclaration or provide an actual controversy for thecourt's review and was properly dismissed. See Schwanke,Schwanke & Associates, 241 Ill.App.3d at 748, 182 Ill.Dec.120, 609 N.E.2d 654. A declaratory judgment action isnot intended to enable a party to secure an advisoryopinion. Byer Clinic & Chiropractic, Ltd., 2013 IL App(1st) 113038, ¶ 17, 370 Ill.Dec. 472, 988 N.E.2d 670.

¶ 47 As the trial court found, Palm was seeking an advisoryopinion and his claim for a declaratory judgment should,therefore, be dismissed. In reaching this determination,the court did not examine the merits of the claim. Withno factual support presented in the complaint, there wereno merits to be considered. Accordingly, given that the

court did not decide count I on its merits, it should nothave dismissed count I with prejudice. Further, becausethe court did not dismiss count I of the first amendedcomplaint on the merits, the dismissal of the count didnot bar the court from considering the same issues raisedin subsequent complaints and a motion for summaryjudgment directed thereto. The court did not err inconsidering the “doing business in closed session” claimsasserted in the motion for summary judgment.

¶ 48 B. Conducting Business in Closed Sessions

[14] ¶ 49 Defendants next argue that the trial courtimproperly granted summary judgment to Palm on thequestion of whether the association conducts associationbusiness in gatherings that are not “meetings” under

the Condominium Property Act ( 765 ILCS 605/1 etseq. (West 2004)). The court held that actions taken bythe board outside of open board meetings violated thedeclaration and Condominium Property Act, specificallypointing to the board's discussion of association mattersat “workshop sessions” closed to unit owners.

*323 **238 ¶ 50 The court should grant a motionfor summary judgment only where “ ‘the pleadings,depositions, and admissions on file, together with theaffidavits, if any, show that there is no genuine issue asto any material fact and that the moving party is entitled

to a judgment as a matter of law.’ ” Axen v. OckerlundConstruction Co., 281 Ill.App.3d 224, 229, 217 Ill.Dec. 24,

666 N.E.2d 693 (1996) (quoting Purtill v. Hess, 111Ill.2d 229, 240, 95 Ill.Dec. 305, 489 N.E.2d 867 (1986)).In deciding a motion for summary judgment, the courtmust not try a question of fact but rather determinewhether one exists or if reasonable persons could draw

different inferences from the undisputed facts. GoldenRule Insurance Co. v. Schwartz, 203 Ill.2d 456, 462, 272

Ill.Dec. 176, 786 N.E.2d 1010 (2003); Wood v. NationalLiability & Fire Insurance Co., 324 Ill.App.3d 583, 585, 258Ill.Dec. 225, 755 N.E.2d 1044 (2001). In deciding a motionfor summary judgment, the court must construe thepleadings, depositions, admissions and affidavits strictlyagainst the moving party and liberally in favor of therespondent. Gauthier v. Westfall, 266 Ill.App.3d 213,219, 203 Ill.Dec. 435, 639 N.E.2d 994 (1994). We reviewthe trial court's entry of summary judgment in favor of

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10 N.E.3d 307, 381 Ill.Dec. 222


defendant de novo. Golden Rule Insurance Co., 203Ill.2d at 462, 272 Ill.Dec. 176, 786 N.E.2d 1010.

¶ 51 The Condominium Property Act regulatesthe creation and operation of Illinois condominiumassociations. Board of Managers of WeathersfieldCondominium Ass'n v. Schaumburg Ltd. Partnership, 307Ill.App.3d 614, 619, 240 Ill.Dec. 336, 717 N.E.2d 429(1999). Section 2(w) of the Condominium Property Actdefines “meeting of board of managers” as “any gatheringof a quorum of the members of the Board of Managers ** * held for the purpose of conducting board business.”765 ILCS 605/2(w) (West 2004). Section 18(a)(9) of the Actrequires that an association's bylaws provide, in relevantpart:

“[M ] eetings of the board of managers shall be open toany unit owner, except for the portion of any meetingheld (i) to discuss litigation when an action against oron behalf of the particular association has been filedand is pending in a court or administrative tribunal, orwhen the board of managers finds that such an actionis probable or imminent, (ii) to consider informationregarding appointment, employment or dismissal ofan employee, or (iii) to discuss violations of rulesand regulations of the association or a unit owner'sunpaid share of common expenses; that any vote onthese matters shall be taken at a meeting or portionthereof open to any unit owner [.]” (Emphasis added.)

765 ILCS 605/18(a)(9) (West 2004). 6 In compliancewith section 18(a)(9), section 506(e) of the declarationprovides that “all meetings of the Board shall be opento attendance by any Unit Owner.”

*324 **239 ¶ 52 Defendants argue that theCondominium Property Act (Act) does not prohibit anassociation's board from holding working sessions atwhich issues relating to the association are discussedbut not voted upon. They assert that, under the Act, a“board meeting” occurs only when a quorum of the boardmeets to vote on, rather than discuss, board business and,therefore, because the evidence showed that no votes weretaken at any working or closed board sessions, the sessionswere not improper board meetings under the Act andthe declaration and the court erred in granting summaryjudgment on this basis.

¶ 53 In examining statutory construction, we must giveeffect to the language and intent of the legislature. Board

of Managers of Weathersfield Condominium Ass'n, 307Ill.App.3d at 621, 240 Ill.Dec. 336, 717 N.E.2d 429.To accomplish this goal, the entire statute must beconsidered, and words used should be given their plainand ordinary meanings. Id. The language of a statutemust be viewed as a whole, such that each section of thestatute is examined in relation to every other section. Id. Inconsidering legislative intent, courts must “ ‘presume thatthe legislature did not intend absurdity, inconvenience orinjustice, and select an interpretation of the statute whichleads to logical results and avoids that which would beabsurd.’ ” Id. (quoting People v. Liberman, 228 Ill.App.3d639, 647, 170 Ill.Dec. 139, 592 N.E.2d 575 (1992)).

¶ 54 After applying the rules of statutory constructionand examining the plain language of the statute, we holdthat “conducting board business,” as used in the section2(w) definition of board “meeting” in the CondominiumProperty Act, encompasses the activities by the board inthe workshop and executive sessions.

¶ 55 As noted above, the Act specifically requires that“meetings of the board of managers shall be open to

any unit owner.” 765 ILCS 605/18(a)(9) (West 2004).There are only three exceptions to the open meetingrequirement: the board may meet in closed meetings to(1) “discuss” pending or potential litigation involvingthe association, (2) “consider” information regarding thehiring and firing of employees and (3) “discuss” rules

violations or unpaid assessments. 765 ILCS 605/18(a)(9) (West 2004). Although the board may “discuss” and“consider” the three excepted subjects in closed meetings,it is still required to “vote on these matters * * * ata meeting or portion thereof open to any unit owner.”

765 ILCS 605/18(a)(9) (West 2004). The plain languageof this section leads to the conclusion that, not only mustall board voting occur at meetings open to unit owners, somust all board discussion or consideration of associationmatters, except for discussion or consideration of the threespecified exceptions.

¶ 56 Defendants assert that, except for the three exceptionsstated in section 18(a)(9), all board discussion andconsideration of association matters without vote canoccur in closed meetings. This is an illogical interpretationof section 18(a)(9). If it was the legislature's intent thatboard discussion and consideration of all associationissues can occur in closed meeting, there would be

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10 N.E.3d 307, 381 Ill.Dec. 222


no need for the legislature to specifically providethat discussion and/or consideration of issues regardinglitigation, employee hiring and rules violations can occurin closed meetings. Discussion and consideration ofthose three issues would already be encompassed by thegeneral rule asserted by defendants that discussion andconsideration without vote of all association matters canoccur in closed meetings. From the fact that the legislaturedeemed it necessary to create these three exceptions to theopen meeting **240 *325 requirement, we can assumethat such a general rule does not exist.

¶ 57 Prior to January 1, 1994, section 2(x) of theAct defined “Meeting of Board of Managers” as “anygathering of a majority of a quorum of the members of theBoard of Managers * * * held for the purpose of discussingboard business.” (Emphasis added.) 765 ILCS 605/2(x)(West 1992). In 1993, the legislature amended section 2(x),now section 2(w), and changed the definition of a board“meeting” to “any gathering of a quorum of the membersof the Board of Managers * * * held for the purpose ofconducting board business.” (Emphasis added.) 765 ILCS605/2(w) (West 2004); Pub. Act 88–417, eff. Jan. 1, 1994.

[15] ¶ 58 The verb “discuss” is defined variouslyas “to investigate by reasoning or argument” and“to talk about” and “to present in detail forexamination or consideration.” Merriam–Webster'sCollegiate Dictionary 358 (11th ed. 2006). The verb“conduct” is defined as “to direct or take part in theoperation or management of * * * a business.” Merriam–Webster's Collegiate Dictionary 259 (11th ed. 2006).“Conducting board business,” therefore, means directingor taking part in the operation or management of theassociation. Nothing in the wording of the statute leads usto conclude that the phrase “conducting board business”should be interpreted to mean only “voting on boardbusiness,” as defendants assert.

¶ 59 As the above definitions show, “to conduct” does notmean “to vote.” To conduct business means to direct ortake part in the operation or management of a business,which might encompass voting on business matters but isnot limited to such voting. One cannot direct or take partin the operation or management of a business unless onealso discusses and considers that business before makingdecisions/voting on that business. Indeed, board memberscannot conduct (“direct or take part in the operation ormanagement”) board business unless they also discuss

(“investigate by reason or argument,” “talk about” and“present in detail for examination and consideration”)the issues involved in that business. Accordingly, whenthe legislature amended the statute in 1993, it expandedthe definition of board “meeting” to encompass morethan just “discussion.” Nothing suggests that it intendedto limit the definition of “meeting” to mean only thosegatherings where a board votes on business matters.

¶ 60 It is uncontested that the board discussed associationand board business in workshop and executive sessionsnot open to unit owners. Given our determination that“conducting board business” encompasses “discussing”board business, those working and executive sessions wereboard “meetings” under the Act and should have beenheld in meetings open to all unit owners as required bysection 18(a)(9) of the Condominium Property Act. Thecourt did not err in finding that defendants violated thedeclaration and the Act by holding board meetings inclosed working or executive sessions. Accordingly, weaffirm the trial court's grant of partial summary judgmentto Palm on this basis, its declaratory finding stating suchand its injunction barring the board from continuing thispractice.

¶ 61 C. Voting by Email andCanvassing of Board Members

[16] ¶ 62 Defendants assert that the court should nothave granted summary judgment to Palm and enteredinjunctive relief on the question of whether actionsregarding employee pay increases were done by writtencanvassing of board members as Palm failed to submitevidence on this issue. They argue similarly with regard tothe question of whether the board **241 *326 waives itsright of first refusal through emails, asserting Grossmanand board member Bernard Viola both testified that novotes were taken by email and Palm presented no contraryevidence.

¶ 63 In the court's order granting summary judgmentto Palm, it found defendants violated the declaration byadmittedly “ ‘doing business' ” at closed sessions. It thenheld that Palm submitted “undisputed evidence” showing“that other actions were taken without an open meeting ofthe Board through the practice of sending emails to Boardmembers which listed units up for sale, and solicitingwhether Board members had any ‘objections.’ Actions

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10 N.E.3d 307, 381 Ill.Dec. 222


regarding pay increases for employees were also done byusing a written canvassing of Board members.”

¶ 64 In exhibit 85 to the motion for summary judgment,Palm submitted a copy of a memorandum from thebuilding's property manager to the board of directorssuggesting that the board approve a salary increase for“Dani,” the building's garage manager. At the bottom ofthe memorandum, there are two check boxes: “Yes, I agreein retaining Dani” and “No, I do not agree.” The exhibitsupports the court's finding that the evidence shows thatboard actions regarding employee pay increases were doneby written canvassing of board members.

¶ 65 The evidence regarding the emails is less clear.There is no exhibit attached to the motion for summaryjudgment to show that, contrary to Grossman's andViola's testimony, the board votes on its right offirst refusal through emails. Therefore, a dispute existsregarding whether the board did, in fact, waive its rightof first refusal by email. However, this dispute is notmaterial.

¶ 66 First, exhibit 85 shows that board voting by writtencanvassing occurred. Second, defendants admitted thatworking sessions behind closed doors were held.

¶ 67 We previously determined that, unless the subjectbefore the board concerns one of the three exceptionsstated in section 18(a)(9) of the Condominium PropertyAct (matters relating to litigation, employee hiring andrules violations), all board discussion, investigating byreason or argument, talking about, presenting in detailfor examination and consideration of association mattersas well as voting thereon must be conducted in meetingsopen to the unit owners. Therefore, any dispute regardingwhether Palm showed that the board's right of first refusalwas the subject of the emails is not material to Palm's claimthat the board violates section 18(a)(9) every time it voteson, discusses or considers any association matters otherthan in an open meeting.

¶ 68 The court did not err in finding that defendantsviolated the declaration and Act. We affirm the court'sgrant of summary judgment to Palm on this issue and thecourt's injunctions prohibiting the board from exercisingwaivers of the right of the board's first refusal or approvingemployee compensation except at meetings open to all unitowners.

¶ 69 D. Board Vote on Contracts

and

E. Enforcement of Management Agreement

[17] ¶ 70 Defendants' fourth and fifth arguments arerelated so we will address them together. Defendantsargue that the court erred in entering an injunctionrequiring that the board must approve every contractentered into by the association and, in a related argument,that the court improperly enjoined enforcement of 6thamended paragraph 19 of the association's agreement withits management company.

*327 **242 ¶ 71 The sixth amendment to themanagement agreement changed paragraph 19 of theagreement to include the following:

“[3](b) Contracts for service or materials havinga value of $10,000 to $100,000 shall be selectedpursuant to competitive bidding procedures and writtenspecifications with at least three (3) bids if Agent isdirected to use such procedures following consultationwith at least three (3) officers of the Association. Thebidding procedures set forth in the first sentence ofthis Subparagraph (b) shall be used if the Agent isadvised that any one of the three officers consulted hasdetermined that such procedures should be used.

* * *

4. Subject to the bidding procedures set forth inParagraph 19, if a proposed expenditure of Associationfunds for any individual expenditure of a non-recurringnature or a contractual nature has been approved by theBoard in the annual budget, or any supplement there to,then * * * (b) if the expenditure or contract is greaterthan $10,000 but less than $50,000, the Agent prior toincurring such expense or entering into such contract,shall consult with at least three officers of the Boardand unless otherwise directed by any one of such officers,the Agent may incur such expense or enter into suchcontract on behalf of the Association without furtherBoard approval.” (Emphases added.)

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10 N.E.3d 307, 381 Ill.Dec. 222


¶ 72 The court held that “the 6th Amendment approvalprovision allowing three officers to be consulted andone to approve” violated both the declaration and theNot for Profit Act. It declared that “[a]ll provisions ofthe Management Agreement that allow management toobtain approval with respect to bidding and contractingfrom one or more officers of the Board rather than thewhole Board violate the Declaration and the Illinois Notfor Profit Act and are null and void.”

¶ 73 The court enjoined defendants “from entering orapproving any contract on behalf of the Associationwithout approval by a vote of the Board, at a meeting opento any unit owner, for which prior notice was providedto all unit owners and at which a quorum of the Boardis present.” It also enjoined defendants “from authorizingor permitting management or any entity or person toenter any contract on behalf of the Association, or selectcontracts for services or materials having a value ofmore than $10,000 on behalf of the Association, withoutapproval by a vote of the Board, at a meeting open to anyunit owner, for which prior notice was provided to all unitowners, and at which a quorum is present.”

¶ 74 Defendants do not contest that they have delegatedthe approval of certain contracts to the managementcompany or that contracts are routinely approved by onlya segment of the board. They assert, however, that theboard has the authority under the declaration to delegateto a property management company and its employees theboard's power to enter into contracts and make purchasesfor the maintenance, repair and administration of theproperty.

[18] [19] [20] [21] ¶ 75 The declaration is the contractbetween the association and the unit owners governing theoperation of the condominium property and associationand sets forth the board's duties related to managementof the property and association. In assessing defendants'argument, we necessarily must interpret this contract. Theprimary goal of contract interpretation is to give effectto the intent of the parties, as shown by the language inthe contract. **243 *328 Lease Management EquipmentCorp. v. DFO Partnership, 392 Ill.App 678, 685, 331Ill.Dec. 300, 910 N.E.2d 709 (2009). In determining theintent of the parties, a court must consider the documentas a whole and not focus on isolated portions of thedocument. Premier Title Co. v. Donahue, 328 Ill.App.3d161, 164, 262 Ill.Dec. 376, 765 N.E.2d 513 (2002). If the

language of a contract is clear and unambiguous, theintent of the parties must be determined solely from the

language of the contract itself. Virginia Surety Co. v.Northern Insurance Co. of New York, 224 Ill.2d 550, 556,310 Ill.Dec. 338, 866 N.E.2d 149 (2007). That languageshould be given its plain and ordinary meaning and the

contract enforced as written. Virginia Surety Co., 224Ill.2d at 556, 310 Ill.Dec. 338, 866 N.E.2d 149. Theinterpretation of a contract is a question of law and may,therefore, be decided on a motion for summary judgment.Premier Title Co., 328 Ill.App.3d at 164, 262 Ill.Dec. 376,765 N.E.2d 513.

¶ 76 Section 5.06(a) of the declaration provides that“[e]xcept as otherwise provided in this Declaration, theProperty shall be managed by the Board and the Boardshall act by majority vote of those present at its meetingswhen a quorum exists” and “[a] majority of the totalnumber of members on the Board shall constitute aquorum.” Section 4.06(a) provides that the board isresponsible for maintenance and repair of the commonelements of the condominium property. Under section5.01 of the declaration, the board “may engage theservices of an agent to manage the portions of theProperty for which the Board is responsible pursuant tothis Declaration, to the extent deemed advisable by theBoard.” Section 5.07(b) of the declaration provides:

“The Board shall have the power and duty to providefor the designation, hiring and removal of employeesand other personnel * * *, to engage or contractfor the services of others, and to make purchases forthe maintenance, repair, replacement, administration,management and operation of the Property and todelegate any such powers to the manager or managingagent (and any such employees or other personnel as maybe employees of the managing agent.” (Emphasis added.)

¶ 77 Under the clear and unambiguous language ofthe declaration, the board has the authority to engagea management company and to delegate the board'sresponsibility to manage, maintain and repair thecommon elements of the property to the managementcompany. It also has the authority to delegate its powerand duty to manage personnel, contract for services andmake purchases for the management, maintenance andoperation of the property to the management company.Accordingly, under the declaration, the board had theauthority to allow the management company to enter

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10 N.E.3d 307, 381 Ill.Dec. 222


into contracts on behalf of the association. However,as the trial court found, the board does not have theauthority to authorize that contractual action taken by themanagement company can be approved by less than theentire board.

¶ 78 Section 108.40 of the Not for Profit Act provides:

“The board of directors may create and appoint personsto a commission, advisory body or other such bodywhich may or may not have directors as members,which body may not act on behalf of the corporation orbind it to any action but may make recommendationsto the board of directors or to the officers.” 805 ILCS105/108.40(d) (West 2004).

As the trial court pointed out in its decision on themotion for summary judgment, the declaration does notprovide for such a commission. In the absence of aprovision **244 *329 in the declaration providing for acommission to do the board's business, any business of theboard must necessarily be conducted by the entire board.

¶ 79 Under the declaration, the board has the authority todelegate its contract power to the management company.However, defendants have not shown us where in thedeclaration board approval of contracts is required ifsuch delegation is made. Under the declaration, thereis no authority to require board approval of a contractproposed by the management company but yet allow suchapproval to be by less than the entire board. The board hasto make a decision. It can either (1) delegate the power toenter contracts without board approval or (2) delegate thepower to enter contracts with full board approval. Thereis no authority for the board to delegate the power toenter contracts with approval by less than the entire board.Accordingly, the board had no authority to delegate itscontract power to the management company but requirethe management company to obtain contract and biddingapproval from three board members. The court did noterr in finding that sixth amended paragraph 19 of themanagement agreement, which allows the managementcompany to consult three officers and obtain approvalof one officer for contracts, violates the declaration andthe Not for Profit Act. The court's finding that the 6thamendment approval provision violates the declarationand Not for Profit Act is affirmed.

¶ 80 The court issued the following injunctive orders:

“[II] D. Defendants are enjoined from entering orapproving any contract on behalf of the Associationwithout approval by a vote of the Board, at a meetingopen to any unit owner, for which prior notice wasprovided to all unit owners and at which a quorum ofthe Board is present.

E. Defendants are enjoined from authorizing orpermitting management or any entity or person to enterany contract on behalf of the Association, or selectcontracts for services or materials having a value ofmore than $10,000 on behalf of the Association, withoutapproval by a vote of the Board, at a meeting open toany unit owner, for which prior notice was provided toall unit owners, and at which a quorum is present.”

¶ 81 Defendants argue that the court erred in entering “aninjunction requiring that the board must approve everycontract entered into by the association,” referencinginjunction II(D) cited above. We agree with defendantsthat the board is not required to approve every contractentered into by the association but do not agree that thecourt erred in entering injunction II(D). As we held above,under the declaration, the board can choose to delegate toa managing agent its power to contract without requiringboard approval of the contracts. Under this delegation,the managing agent rather than the board would enteror approve contracts on behalf of the association andinjunction II(D), therefore, would not apply. The boardcan also choose to delegate its power to contract with fullboard approval or it can choose not to delegate its powerto contract at all. In such instances, the board itself willenter or approve contracts on behalf of the Association.Injunction II(D) would apply to these situations andcorrectly provides that the board must enter or approvesuch contracts by a vote of the full board at an openmeeting.

¶ 82 We find that defendants' argument simplymisconstrues the court's injunctive order II(D). This ordermerely provides that, when the board acts to enteror **245 *330 approve a contract on behalf of theassociation, it must do so by vote of the full board at anopen meeting.

¶ 83 With regard to injunction II(E) above, this injunctionmerely provides that the delegation of contract authorityis an act that must be done by the full board in an openmeeting. There is no dispute regarding this injunction.

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10 N.E.3d 307, 381 Ill.Dec. 222


¶ 84 The court's injunctive orders II(D) and II(E) areaffirmed.

¶ 85 F. Board Vote on Litigation Matters

[22] ¶ 86 Defendant argues that the trial court erredin granting summary judgment to Palm on the questionof whether defendants violated the declaration and theNot for Profit Act by failing to vote on the defenseof the instant litigation in an open meetings. The courtentered a declaratory order to that effect and enjoineddefendants “from authorizing or allowing litigation bythe Association (including prosecution or defense of anyaction) without approval by a vote of the Board, at ameeting open to any unit owners, for which prior noticeis provided to all unit owners, and at which a quorum ofthe Board is present.” It ordered that defendants hold ameeting open to all unit owners “within the next 30 days”at which the board must vote on whether to authorize thecontinued defense of the instant lawsuit.

¶ 87 As held above in section I(B), the board isrequired to discuss and vote on association businessin meetings open to all unit owners. The question ofwhether to assert or defend a lawsuit and, necessarily,whether to expend association funds and resourceson such litigation is clearly a question involving thebusiness of the association. Although section 18(a)(9) ofthe Condominium Property Act provides an exceptionallowing the board to discuss litigation matters in closedsessions, it specifically provides that the board must voteon any litigation matter at meeting open to all unit owners.

¶ 88 It is uncontested that the board never votedon litigation matters, at open meetings or otherwise.Grossman testified that the board had never votedon litigation matters because the association hadnever affirmatively filed suit and, when it “filed onnonpayment, that is from management to the attorney.”The board had delegated responsibility for handlingunit owner delinquencies to the management company,which pursued collection activities in concert with theassociation's attorney. The board did not vote on whetherto continue to defend against Palm's lawsuit.

¶ 89 Accordingly, given that litigation is associationbusiness that must be voted on in open meetings, the court

did not err in granting summary judgment to Palm on hisassertion that the association could not pursue litigationwithout any vote by the board and that the board's failureto conduct such a vote to defend the instant litigationviolated the declaration and Condominium Property Act.We affirm the court's grant of summary judgment on thisquestion, its declaratory order to the same effect and itsinjunctive order enjoining defendants from authorizing orallowing litigation by the association without approvalby the board in a meeting open to all unit owners andordering defendants to hold an open meeting at whichthe board must vote on whether to authorize continueddefense of the instant lawsuit.

¶ 90 II. The September 10, 2010, Order, October25, 2010, Order and April 5, 2011, Order

¶ 91 Defendants raise six issues challenging the court'sSeptember 10, 2010, order finding in favor of Palmon assorted claims in his third amended complaint and**246 *331 its October 25, 2010, and April 5, 2011,

orders entering declaratory and injunctive relief based onits September 10, 2010, findings.

¶ 92 A. Cause of Action forNegligent Breach of Fiduciary Duty

[23] ¶ 93 Defendants first argue that the trial court erredin ruling that defendants' breaches of fiduciary duty weredone with “gross negligence” because, as a matter oflaw, no cause of action exists for negligently breaching afiduciary duty. Defendants assert that the court could nothave found defendants were negligent, let alone grosslynegligent, in breaching their fiduciary duties because abreach of fiduciary duty under Illinois law is not a tortand cannot be breached either negligently or with grossnegligence. They argue that, therefore, the board andGrossman cannot be liable to Palm for negligently orgrossly negligently breaching any claimed fiduciary duty.

[24] ¶ 94 Section 18.4 of the Condominium Property Actsets out the powers and duties of a condominium boardof managers and provides that, “[i]n the performance oftheir duties, the officers and members of the board * ** shall exercise the care required of a fiduciary of the

unit owners.” 765 ILCS 605/18.4 (West 2004). “This

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10 N.E.3d 307, 381 Ill.Dec. 222


fiduciary duty is owed by boards as well as their individual

members.” La Salle National Trust, N.A. v. Board ofDirectors of the 1100 Lake Shore Drive Condominium,287 Ill.App.3d 449, 454, 222 Ill.Dec. 579, 677 N.E.2d1378 (1997). “Because the association officers and boardmembers owe a fiduciary or quasi-fiduciary duty to themembers of the association, they must act in a mannerreasonably related to the exercise of that duty, andthe failure to do so will result in liability not only forthe association but also for the individuals themselves.”

Wolinsky v. Kadison, 114 Ill.App.3d 527, 533–34, 70Ill.Dec. 277, 449 N.E.2d 151 (1983); see also Goldbergv. Astor Plaza Condominium Ass'n, 2012 IL App (1st)110620, ¶ 62, 361 Ill.Dec. 346, 971 N.E.2d 1.

[25] ¶ 95 Defendants are correct that there is nocause of action in Illinois for negligent or grossly

negligent breach of fiduciary duty. Robinson v. LaCasaGrande Condominium Ass'n, 204 Ill.App.3d 853, 859, 150Ill.Dec. 148, 562 N.E.2d 678 (1990). Therefore, althoughdefendants are fiduciaries of the unit owners, they cannotbe liable in tort for the negligent performance of their

fiduciary duties to the unit owners. Robinson, 204Ill.App.3d at 859, 150 Ill.Dec. 148, 562 N.E.2d 678.Defendants assert, therefore, that the court erred inholding that defendants' breaches of fiduciary duty weredone with “gross negligence.”

¶ 96 Defendants misconstrue the court's holding. Thecourt did state that it found “the defendants' breach offiduciary duties constituted gross negligence.” However,the court did not find that defendants were guilty ofcommitting a civil wrong known as grossly negligentbreach of fiduciary duty. It simply found defendants guiltyof breach of fiduciary duty. The court's further findingthat defendants' acts were grossly negligent was onlyin response to the matters raised by defendants' secondaffirmative defense.

¶ 97 In its September 10, 2010, 17–page decision, thecourt held that defendants breached their fiduciary dutyby “failing to strictly comply with the clear requirementsof” the declaration and/or the Condominium PropertyAct by failing to itemize reserves in the budget, failing tocredit unit owners with surpluses, commingling operatingand reserve expenses, allowing funds in bank accounts inexcess of the FDIC-insured limit, failing to provide writtennotices of board meetings as required **247 *332 by

the declaration and failing to present possible conflictsof interest to the unit owners for approval. The courtthen addressed the three affirmative defenses counterclaimdefendants raised in their answer to the third amendedcomplaint. The court found no evidence to support thefirst affirmative defense and stated it had previouslydecided the third affirmative defense. Relevant here is thecourt's decision on defendants' second affirmative defense.

¶ 98 The entirety of defendants' second affirmative defenseis as follows:

“Section 5.10 of the Association's Declaration provides,relevant parts [sic ], as follows:

Neither the members of the Board nor the officersof the Association shall be liable to the unit ownersfor any mistake of judgment or for any other actsor omissions of any nature whatsoever as suchboard members and officers [sic ] except for anyextra omissions found by a court to constitute grossnegligence or fraud.

The Actions of the Association, Board, and Ms.Grossman do not constitute gross negligence or fraud.Therefore, the Defendants are not liable to thePlaintiff.”

¶ 99 Addressing this affirmative defense, the court heldthat the acts that it had found to be violations ofthe declaration or Condominium Property Act did not“constitute fraud.” It then stated:

“However, considering the clear requirements of theDeclaration which were not complied with regardingreserves, surpluses and notices, this Court finds thatdefendants' conduct was grossly negligent in that theyintentionally failed to act in the fact of a knownduty, demonstrating a conscious disregard for theirduties. Sherman v. Ryan, 391 [392] Ill.App.3d 712, 730[331 Ill.Dec. 557, 911 N.E.2d 378] (2009).” (Emphasisadded.)

¶ 100 The court next denied defendants' counterclaim forfees, finding Palm did not file count I of his complaintvexatiously or in bad faith. Finally, the court synopsizedits three decisions in its “conclusion,” the final paragraphof its decision, as follows:

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10 N.E.3d 307, 381 Ill.Dec. 222


“The court finds that the defendantsbreached their fiduciary dutiesby failing to comply with theDeclaration and CondominiumProperty Act. The Court, also,finds that the defendants' breachof fiduciary duties constituted grossnegligence because the defendantsduties were clearly established inthe Declaration and CondominiumProperty Act. Finally, the Courtdenied defendants' counterclaimsbecause Palm's claim was notvexatious, arbitrary, or capricious.”

¶ 101 The court's decision shows that it addressedthe issue of gross negligence solely in the context ofthe second affirmative defense. The court first found,on Palm's complaint asserting breach of fiduciary dutyamong other claims, that assorted acts by defendants werein breach of their fiduciary duties. It then considered,in the context of the affirmative defense, whether theboard was grossly negligent in committing those acts suchthat the declaration might exempt them from liability asdefendants argued. It found that defendants' acts weregrossly negligent and subsequently synopsized this findingin its conclusion. At no point did the court considerwhether defendants were liable for a tort known as grosslynegligent breach of fiduciary duty.

¶ 102 Defendants are correct that Palm never allegedthat defendants' breaches of their fiduciary duties werenegligent or grossly negligent. Palm's third amendedcomplaint did not request a declaratory finding thatdefendants were grossly negligent in their breach oftheir fiduciary **248 *333 duties. Indeed, Palm couldnot have argued such given that a cause of action fornegligent breach of fiduciary duty does not exist in Illinois.Similarly, defendants' counterclaim did not request adeclaratory finding that they were not grossly negligentin such breaches. The court, therefore, did not makesuch a finding. The court held that defendants' conductwas grossly negligent only in the context of defendants'affirmative assertion that the board and Grossman werenot liable because, pursuant to an exculpatory clause inthe declaration, board members and association officers

are not liable for any mistakes of judgment or otheracts or omissions except “for any extra omissions foundby a court to constitute gross negligence or fraud” andthat defendants' actions constituted neither. The court didnot connect the concept of “gross negligence” to Palm'sclaims for breach of fiduciary duty because that issuewas not before it. Accordingly, the court did not err infinding defendants were grossly negligent in their assortedviolations of the declaration and Condominium PropertyAct.

¶ 103 B. Gross Negligence in Breach of Fiduciary Duty

¶ 104 In a related argument, defendants argue that the trialcourt erred in ruling that defendants' breaches of fiduciaryduty were done in a grossly negligent manner because thatissue was never before the court. They assert that the issueof whether defendants breached any fiduciary duty in agrossly negligent manner was never raised at trial becauseit was never part of the litigation given that neither partyasserted a prayer for relief that would support the court's“unilateral” ruling that defendants breaches of fiduciaryduty were grossly negligent.

¶ 105 As explained above in section II(A), defendantsmisstate the court's holding. The court limited its decisionto addressing defendants' affirmative defense that theexculpatory clause in the declaration applied and thusheld only that defendants' violative acts were conductedin a grossly negligent manner. Arguably, given the grossnegligence finding, the declaration would not exemptdefendants from liability if Palm sought a liability finding.But Palm did not do so.

¶ 106 As also stated previously, the question of defendants'gross negligence was clearly before the court becausedefendants had raised it in their second affirmativedefense. The court's pretrial order delineating the issues onwhich evidence would be presented at trial shows as much.As the court explained in its September 10, 2010, decision,“the Pretrial order provided that the Court would hearevidence on defendants' affirmative defenses of * * *2) anexculpatory clause in Section 5.10 of the Declaration ofCondominium.”

¶ 107 Defendants assert that the court should not havereached the affirmative defense because they had raisedit against count I of the third amended complaint, which

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Palm apparently withdrew during closing argument, andcount V, which the court found barred by the statuteof limitations. We find no support for this assertion.The affirmative defense is quoted in its entirety above insection II(A). Nothing in the language of the affirmativedefense limits its application only to counts I and V.

[26] ¶ 108 Further, defendants have failed to include atranscript of the four-day hearing on the third amendedcomplaint, counterclaim and affirmative defenses in therecord. As the appellants, it is defendants' burden topresent a sufficiently complete record to support theirarguments and any inadequacies in the record will beheld against them. **249 *334 Redelmann v. K.A. SteelChemicals, Inc., 377 Ill.App.3d 971, 977, 316 Ill.Dec.438, 879 N.E.2d 505 (2007). Without a report of theproceedings, we cannot know with certainty the issuesbefore the court during the four-day hearing. Necessarily,therefore, we must presume that the court had a sufficientbasis for addressing whether defendants' conduct wasgrossly negligent. The court did not err in addressing thequestion of whether defendants were grossly negligent intheir violations of the declaration and the CondominiumProperty Act.

¶ 109 C. Advice of Counsel

¶ 110 Defendants argue that the trial court erredin ruling that defendants breached their fiduciaryduty by transferring surplus association income to theassociation's reserve account instead of crediting it againstunit owners future assessments as arguably required bythe declaration. They do not challenge the assertion thatthey transferred the surplus to reserve account in violationof the declaration. Instead, they argue, as they did below,that they did not breach their duty because they had actedon advice of counsel in interpreting the declaration topermit this practice.

[27] [28] [29] [30] ¶ 111 The fiduciary duty owedby board members to unit owners requires that boardmembers act in a manner reasonably related to theexercise of that duty, and their failure to do so resultsin liability for the board and its individual members.

Carney v. Donley, 261 Ill.App.3d 1002, 1011, 199

Ill.Dec. 219, 633 N.E.2d 1015 (1994); Wolinsky, 114Ill.App.3d at 533–34, 70 Ill.Dec. 277, 449 N.E.2d 151.

However, when a board properly exercises its businessjudgment in interpreting its own declaration, we willnot find the board's interpretation a breach of fiduciary

duty. Carney, 261 Ill.App.3d at 1011, 199 Ill.Dec. 219,633 N.E.2d 1015. The business judgment rule will defeatbreach of fiduciary duty claims where the board's actionswere not permitted under the condominium declaration.Wolinsky v. Kadison, 2013 IL App (1st) 111186, ¶ 65,370 Ill.Dec. 205, 987 N.E.2d 971. “Under the businessjudgment rule, ‘[a]bsent evidence of bad faith, fraud,illegality, or gross overreaching, courts are not at libertyto interfere with the exercise of business judgment bycorporate directors.’ ” Goldberg, 2012 IL App (1st)110620, ¶ 63, 361 Ill.Dec. 346, 971 N.E.2d 1 (quotingFields v. Sax, 123 Ill.App.3d 460, 467, 78 Ill.Dec. 864, 462N.E.2d 983 (1984)). The purpose of the rule is to protectdirectors who have been careful and diligent in performingtheir duties from being subjected to liability from honestmistakes of judgment. Id. However, if board membershave failed to exercise due care, then they may not use thebusiness judgment rule as a shield for their conduct. Id.

[31] ¶ 112 “One component of due care is that directorsmust inform themselves of material facts necessary forthem to properly exercise their business judgment.”Goldberg, 2012 IL App (1st) 110620, ¶ 64, 361 Ill.Dec. 346,971 N.E.2d 1. To that end, if a board seeks legal advicebefore reaching its decision and relied on that advice inreaching its decision, it will be found to have properlyexercised its business judgment. Id. ¶ 65 (board membersdid not breach their fiduciary duty to unit owners ininterpreting declaration where the record showed theboard sought legal advice before reaching its decision

and relied on that advice); Carney, 261 Ill.App.3dat 1011, 199 Ill.Dec. 219, 633 N.E.2d 1015 (board'sinterpretation of declaration did not breach its fiduciaryduty to the plaintiff because the board had sought legaladvice before reaching its decision; court held “[u]nderthese circumstances, **250 *335 we cannot say that theBoard acted unreasonably or failed to exercise properly

its business judgment”); see also Davis v. Dyson, 387Ill.App.3d 676, 695, 326 Ill.Dec. 801, 900 N.E.2d 698(2008) (business judgment rule did not apply to protectthe board of directors where the board violated theCondominium Property Act by failing to purchase theproper insurance to protect the association's funds andfailed to obtain the advice of counsel to learn about their

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10 N.E.3d 307, 381 Ill.Dec. 222


duties as to insurance coverage, association finances orpersonnel supervision).

¶ 113 In its September 10, 2010, order, the court stated asfollows:

“Defendants argue that the conductchallenged as violations of theDeclaration or the CondominiumProperty Act[ ] were done basedon advice of counsel, particularlyMichael Kurtzon, other attorneys,and Barbara Baran * * *. Palmdoes not dispute that their attorneysprovided advice to the defendants.Defendants, however[,] failed topresent any evidence that theattorneys advised them to usethe procedures regarding reserves,surpluses and notices, which theCourt has found failed to strictlycomply with the Declaration and thelaw.”

Defendants argue that they did present uncontrovertedevidence that attorney Kurtzon, the association'sattorney, gave the board an opinion that transferring thesurplus income to the reserve account was proper underthe terms of the declaration.

¶ 114 “In deciding a case based on the evidence, ourstandard of review is manifest weight of the evidence,which means a reviewing court should overturn a trialcourt's factual findings only if they are against the manifesteight of the evidence.” Goldberg, 2012 IL App (1st)110620, ¶ 60, 361 Ill.Dec. 346, 971 N.E.2d 1. A court'sfindings are against the manifest weight of the evidenceonly if an opposite conclusion is apparent or the findingsappear to be unreasonable, arbitrary, or not based onthe evidence. Id. We confer this deferential standard ofreview “because the trial court is in a superior positionto determine and weigh the credibility of the witnesses,observe witnesses' demeanor, and resolve conflicts in theirtestimony.” Id.

[32] [33] ¶ 115 We do not find the court's decisionagainst the manifest weight of the evidence. As we

noted previously in section II(B) above, defendants didnot include a report of proceedings of the four-dayhearing on the third amended complaint in the record.Therefore, we cannot know what evidence the courtheard, let alone whether that evidence was sufficientto show that defendants acted on advice of counsel intransferring excess funds to the reserve accounts ratherthan reimbursing the unit owners. As the appellants, itis defendants' burden to present a sufficiently completerecord to support their arguments and any inadequaciesin the record will be held against them. Redelmann,377 Ill.App.3d at 977, 316 Ill.Dec. 438, 879 N.E.2d505. Accordingly, we presume that the court properlyfound defendants failed to “present any evidence that theattorneys advised them to use the procedures regardingreserves, surpluses and notices.”

[34] ¶ 116 Defendants assert that board presidentGrossman's testimony, as shown in a small portion of areport of proceedings attached as an exhibit to the parties'pretrial motion, demonstrated that there was evidence toshow that the board acted on advice of counsel regardingwhere to transfer the surplus income. First, there isnothing in the transcript that shows when this testimonywas heard. Second, the exhibit consists of random sectionsof Grossman's testimony and jumps from page to page.It is impossible to read the testimony in context. Lastly,if **251 *336 we were to consider the exhibit sufficientfor our review, we would find Grossman's testimonyinadequate to demonstrate that the board acted on adviceof counsel in transferring the surplus income to the reserveaccount.

¶ 117 Grossman's testimony was as follows:

“Q. Have you ever gotten a legal opinion that thatmoney [surplus income] was to be retained for otherpurposes than credited against unit owners' futureassessments?

A. [Grossman:]. No. We've never had a legal opinionthat told us that.

Q. Well, why do you conclude that that's all right?

A. Because the legal opinion said we could transfer thereserve, transfer the excess funds into the reserve. That'swhat our legal opinion has been.

Q. And that's [a] legal opinion from whom?

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A. Kurtzon, Michael Kurtzon.

Q. Is that in writing?

A. I have no idea.

Q. And when did you first learn that was a legal opinionof Mr. Kurtzon?

A. I don't know. Probably ten years ago. I have noidea. I would be guessing. It had been the practice sincebefore I came on the board. We have continued thepractice.”

All we can glean from this testimony is that it wasthe board's practice to transfer excess funds to thereserve account and that Grossman thought this practicewas based on advice from attorney Kurtzon issuedsome 10 years prior. Standing alone, this evidence isentirely inadequate to show that the board received therequisite legal advice and relied on it. The court didnot err in finding that the business judgment rule didnot protect defendants from their breach of fiduciaryduty in transferring surplus association income to theassociation's reserve account instead of crediting it againstunit owners' future assessments.

¶ 118 D. Business Judgment

[35] ¶ 119 In a related argument, defendants arguethat the court erred in finding that defendants breacheda fiduciary duty by transferring surplus income to theassociation's reserve account because the board exercisedits business judgment in interpreting its own declaration.Again, we do not have the report of proceedings forthe four-day hearing on the third amended complaint.Therefore, we do not know what evidence the court heardwith regard to whether the board exercised its businessjudgment in this regard. We cannot know whether thecourt heard evidence that the board members actedcarefully and diligently, informing themselves of thematerial facts necessary for them to properly exercisetheir business judgment. We cannot know whether itheard evidence that the board's actions were in badfaith, fraudulent, illegal or grossly overreaching although,given the court's subsequent finding that the board'sviolations were “grossly negligent,” it arguably heardsufficient evidence of the later. Any inadequacies in therecord will be held against defendants, the appellants here.

Accordingly, as held above, we must presume the courthad a sufficient basis to find that defendants breachedtheir fiduciary duty by transferring surplus associationincome to the association's reserve account instead ofcrediting it against unit owners' future assessments andthat the business judgment rule did not protect thisconduct.

¶ 120 E. Commingling of OperatingFunds and Reserve Expenses

[36] ¶ 121 Defendants argue that the trial court erredwhen it ruled that the **252 *337 board breached itsfiduciary duty by using the operating fund to pay reserveexpenses and reimbursing the operating fund from thereserve fund. Defendants do not claim that they did notcommingle the operating fund and reserve expenses inthis manner. Instead, they argue that the court erred inholding that that they did not present evidence that theyrelied on the advice of their attorney in doing so. Theyassert the court's decision is in direct contravention to theevidence presented at trial that attorney Kurtzon providedan opinion to the board on the question of whether theassociation could pay reserve expenses from the operatingaccount and then have the operating account reimbursethe reserve fund.

¶ 122 As is a theme in this appeal, the record is entirelyinadequate for our review of this argument. There is noreport of the proceedings of the four-day hearing duringwhich evidence related to the court's decision would havebeen heard. Therefore, we cannot know what evidence thecourt did or did not hear.

¶ 123 Further, although defendants assert that Grossman'stestimony provided the requisite evidence to support theirargument, they again cite to only a small portion of anexhibit that neither reflects when the testimony was heardnor the context in which was given. Defendants claim thatthe following testimony by Grossman is uncontradictedand shows that the board did obtain an opinion fromthe associations attorney and auditors regarding thechallenged practice:

“Q. Do you recall whether Mr. Kurtzon has ever issuedan opinion on interfund transfers?

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A. [Grossman:] Mr. Kurtzon did give us his opinionthat it was appropriate, but the auditors also said it wasappropriate.”

Given the insufficiency of the record, we do not knowwhether this evidence was uncontradicted as defendantsassert. Moreover, it was for the trial court to determinethe credibility of witnesses and weight to be given totestimony. Goldberg, 2012 IL App (1st) 110620, ¶ 60,361 Ill.Dec. 346, 971 N.E.2d 1. Therefore, even assumingarguendo that Grossman's testimony was uncontradicted,we cannot, on this record, reverse the court's apparentfinding that Grossman was not credible. The court did noterr when it ruled that the board breached its fiduciary dutyby using the operating fund to pay reserve expenses andreimbursing the operating fund from the reserve fund.

¶ 124 F. Notice Procedures

[37] ¶ 125 Defendants lastly argue that the trialcourt erred as a matter of law when it ruled thatthe association's procedures in notifying resident unitowners of board meetings violated the declaration. Theassociation's practice was to mail notice of board meetingsto nonresident unit owners but to deliver such notices toresident unit owners by leaving the notices in front ofthe unit owners' doors. The court held that defendantsviolated section 5.06(e) of the declaration by failing to mailnotices of board meetings to each unit owner and enjoineddefendants from failing to mail such notices as required bysection 5.06(e).

¶ 126 Section 5.06(e) of the declaration requires:

“All meetings of the Board shall be open to attendanceby any Unit Owner and notice of such meetings shall bemailed no later than forty-eight (48) hours prior to suchmeeting unless a written waiver of such notice is signedby the Unit Owner entitled to such notice **253 *338prior to the convening of such meeting.” (Emphasis

added.) 7

Section 18(a)(9) of the Condominium Property Actprovides that “notice of [board] meetings shall be mailedor delivered at least 48 hours prior thereto, unless a writtenwaiver of such notice is signed by the person or persons

entitled to such notice.” (Emphasis added.) 765 ILCS605/18(a)(9) (West 2004).

¶ 127 Defendants assert that there is a conflict between thedeclaration requirement that notices be “mailed” and theAct's provision that notices may be “mailed or delivered.”They argue, therefore, that pursuant to section 4.1(b) ofthe Act, the Act preempts the declaration, notices maybe mailed or delivered and defendants' procedures fordelivering the notices are proper.

¶ 128 Section 4.1(b) of the Act provides:

“Except to the extent otherwise provided by thedeclaration or by other condominium instrumentsrecorded prior to the effective date of this amendatoryAct of 1984, in the event of a conflict between theprovisions of the declaration and the bylaws or othercondominium instruments, the declaration prevailsexcept to the extent the declaration is inconsistent withthis Act.” 765 ILCS 605/4.1(b) (West 2004).

Section 4.1(b) does not apply here. It only applies “inthe event of a conflict” between the declaration and the“bylaws or other condominium instruments.” In thatsituation, section 4.1(b) provides that the declarationprevails over the bylaws or other instruments, unless itconflicts with the Act, in which case the Act prevails.Here, there is no conflict between the declaration and thebylaws or other condominium instruments. Accordingly,section 4.1(b) does not apply. The notice provision in thedeclaration stands. The court did not err in finding thatdefendants breached their fiduciary duty in failing to mailall notices of board meetings.

¶ 129 CONCLUSION

¶ 130 For the reasons stated above, we affirm the decisionof the trial court.

¶ 131 Affirmed.

Justice McBRIDE concurred in the judgment andopinion.

Presiding Justice GORDON specially concurred, withopinion.

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¶ 132 PRESIDING JUSTICE GORDON, speciallyconcurring:¶ 133 I agree with the result of the majority; however,I must write separately as to the issue concerning thetrial court's finding that defendants' conduct was grosslynegligent in that they intentionally failed to act in the faceof a known duty, demonstrating a conscious disregardfor their duties. I agree with the trial court's ruling, butdisagree in the manner in which the majority explains thisconcept in its decision.

¶ 134 First, the majority writes that the trial court didnot err in addressing the question of whether defendantswere grossly negligent in their violations of the declarationand the Condominium Property Act. The trial court neveraddressed this question in reference to the CondominiumProperty Act because it has **254 *339 nothingwhatsoever to do with the Condominium Property Act.The issue is only addressed to the declaration by the trialcourt.

¶ 135 Second, the majority writes (supra ¶ 108) that“we must presume that the court had sufficient basisfor addressing whether defendants' conduct was grosslynegligent” without citation of authority. I know of noauthority that gives the majority the right to presume atrial court's basis.

¶ 136 The trial court found that the board of directorsbreached its fiduciary duty, and once that finding is madeto a particular director, that director is individually liableto the unit owners. Board of Managers of WeathersfieldCondominium Ass'n v. Schaumburg Ltd. Partnership, 307Ill.App.3d 614, 622, 240 Ill.Dec. 336, 717 N.E.2d 429

(1999) (citing Wolinsky v. Kadison, 114 Ill.App.3d 527,533–34, 70 Ill.Dec. 277, 449 N.E.2d 151 (1983)).

¶ 137 However, in the case at bar, the defendants arguedas an affirmative defense that the exculpatory clause insection 5.10 of the declaration shields them from liabilitybecause it states:

“Neither the members of the Boardnor the officers of the Associationshall be liable to the Unit Ownersfor any mistake of judgment or forany other acts or omissions of anynature whatsoever as such Boardmembers and officers except for anyacts or omissions found by a court toconstitute gross negligence or fraud* * *.”

¶ 138 The plaintiff in this case did not seek damagesagainst individual board members and only seeks adeclaration that their actions as a board breached theirfiduciary duties. The trial court in its decision answeredthe defendant board's affirmative defense, which statedthat they cannot be individually liable to the unit ownersbecause of the exculpatory clause in the declaration. Thetrial court answered this argument even though it wasnot at issue at this point in time, finding, as I statedabove, that defendants' conduct was grossly negligent inthat they intentionally failed to act in the face of a knownduty, demonstrating a conscious disregard for their duties,citing Sherman v. Ryan, 392 Ill.App.3d 712, 730, 331Ill.Dec. 557, 911 N.E.2d 378 (2009). This finding wasmade even though once a director breaches his fiduciaryduty he or she is individually liable to the unit ownersnotwithstanding his or her negligence. The trial court'sfinding that answered defendants' affirmative defenseprovides a road map for the parties, which could shortenany future litigation should unit owners seek damages inthe future against individual board members.

All Citations

2014 IL App (1st) 111290, 10 N.E.3d 307, 381 Ill.Dec. 222

Footnotes1 In defendants' brief, they inform the court as follows:

“This lawsuit has been the subject of a prior appeal, and an original record on appeal was filed inthis case on November 7, 2008. The original record on appeal is cited as ‘R––––.’ A second recordon appeal relating to documents filed after the first appeal was filed on September 19, 2011, and

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is referred to in this brief as ‘R2––––.’ A Supplemental Record on Appeal was filed on January 17,2011, and is referred to as ‘SR––––.’ ”

The only record defendants filed in this appeal is a four-volume record filed on September 19, 2011. Defendants filedneither the “original record on appeal * * * filed * * * on November 7, 2008” nor “a supplemental record * * * filed onJanuary 17, 2011.” The reference to the supplemental record is especially puzzling given that the notice of appeal in thiscase was not filed until May 2011, apparently after defendants filed the supplemental record. Nevertheless, given thatthis court may take judicial notice of matters of public record, we obtained the 22–volume “original record on appeal * ** filed * * * on November 7, 2008” from the circuit court and will consider it.

2 If there is a copy of the motion to dismiss the second amended complaint and the court's order denying the motion in therecord, neither party cites to it and we do not find it specifically referenced in the appendix to the record. It is not our roleto parse through a 26–volume record in search of these documents. Accordingly, we are left with only the informationthat defendants filed the motion to dismiss and the court denied it.

3 Indeed, a cursory examination of count II of the first amended complaint, which requests a declaration that Grossmanexceeded her authority as board president by taking actions without board approval and improperly imposed her viewson the board at meetings, shows this issue was not raised in the motion for summary judgment. The issue raised in countIII of the first amended complaint, which requests a declaration that board members are entitled to reasonably timelyaccess to all association records without having to specify a purpose for the request or pay costs associated therewith,was raised in the motion for summary judgment. However, the court did not specifically address this issue in its decisionon the motion for summary judgment. The summary judgment order specified that the court denied summary judgment“as to all other claims not specifically ruled on.” Accordingly, the court denied summary judgment as to count III and thequestion is moot.

4 “Furthermore, where the estoppel applies, it operates without regard for whether the prior adjudication was correct or

erroneous.” Best Coin–Op, Inc., 189 Ill.App.3d at 650, 136 Ill.Dec. 957, 545 N.E.2d 481.

5 The court addressed the dismissal of count I of the amended complaint three times. It first dismissed count I with prejudiceon December 11, 2000, without comment. Next, after reconsideration, it dismissed count I with prejudice again, initiallyduring the March 21, 2001, hearing on Palm's motion to reconsider and then in its April 3, 2001, written order based onthe March 21, 2001, verbal holding. Lastly, on Palm's motion to reconsider the March 21, 2001, and April 4, 2001, orders,the court without comment denied the motion to reconsider the dismissal of count I. There is no reason evident for thecourt's original dismissal with prejudice of count I. However, during the March 21, 2001, hearing on Palm's first motionto reconsider the dismissal, the court stated that count I “asks for an advisory opinion” and then dismissed the countwith prejudice. This is the only reflection in the record of the court's reason for dismissing count I. Except for this cursoryreference, the entirety of the hearing on the motion to reconsider, indeed the majority of the parties' filings regardingdismissal of the first amended complaint, were directed to count IV of the first amended complaint. However, the court'ssingle-sentence explanation reflects the argument defendants made in their motion to dismiss count I, which was thatcount I failed to state a claim on which relief could be granted or present an actual controversy for the court's review and,instead, merely requested an order restating the law set forth in section 18(a)(9) of the Act.

6 The requirement for open meetings mirrors that in section 108.21 of the Not for Profit Act, which provides in relevant part:“Meetings of the board of directors of a * * * not-for-profit [homeowners association] shall be open to any member,except for the portion of any meeting held (i) to discuss litigation when an action against or on behalf of the corporationhas been filed and is pending in a court or administrative tribunal, or when the board of directors finds that such an actionis probable or imminent, (ii) to consider information regarding appointment, employment or dismissal of an employee,or (iii) to discuss violations of rules and regulations of the corporation * * *. * * * For purposes of this Section, ‘meetingof the board of directors' means any gathering of a quorum of the members of the board of directors * * * held for thepurpose of discussing business of the [homeowners association or] cooperative.” 805 ILCS 105/108.21 (West 2004).

7 As the court pointed out in its decision, section 5.05 of the declaration provides that “[e]xcept as otherwise provided”in the declaration, “notice of meetings required to be given may be delivered either personally or by mail.” However,section 5.05 applies generally to all meetings while section 5.06(e) of the declaration specifically governs board meetings.Therefore, section 5/06(e) controls the notice requirements for board meetings in the declaration.

End of Document © 2019 Thomson Reuters. No claim to original U.S. Government Works.

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KeyCite Yellow Flag - Negative Treatment

Declined to Extend by North Spaulding Condominium Association v.

Cavanaugh, Ill.App. 1 Dist., March 31, 2017

2014 IL App (1st) 111290Appellate Court of Illinois,

First District, Fifth Division.

Gary PALM, Plaintiff–Appellee,v.

2800 LAKE SHORE DRIVE CONDOMINIUMASSOCIATION, an Illinois Not–for–Profit

Corporation; Board of Directors of the 2800Lake Shore Drive Condominium Association;

and Kay Grossman, Individually and asPresident of the Board, Defendants–Appellants.

No.1

–11

–1290

.|

May 2, 2014.

SynopsisBackground: Condominium unit owner brought actionagainst condominium association, association's board ofdirectors, and board president seeking declaratory andinjunctive relief for assorted violations of the association'sdeclaration and bylaws, the Illinois CondominiumProperty Act, and the General Not for Profit CorporationAct. The Circuit Court, Cook County, Sophia Hall, J.,granted owner partial summary judgment and issueddeclaratory and injunctive orders. Defendants appealed.

Holdings: The Appellate Court, Palmer, J., held that:

[1] res judicata did not apply to preclude court fromconsidering unit owner's claim regarding open meetings;

[2] board members violated Condominium Property Actprovision requiring board meetings to be open to any unitowner by holding board meetings in closed working orexecutive sessions;

[3] members violated the Condominium Property Actprovision requiring board meetings to be open to anyunit owner by voting on issues through email and bycanvassing board members;

[4] management agreement provision that allowedmanagement company to consult three condominiumassociation officers and obtain approval of one officer forcontracts violated Not for Profit Act;

[5] board members violated Condominium Property Actby failing to vote on the defense of unit owner's litigationin an open meeting;

[6] trial court did not err in finding that condominiumassociation board members' breaches of fiduciary dutywere done with gross negligence;

[7] board members' breaches of fiduciary duty were notprotected by business judgment rule;

[8] association board breached its fiduciary duty by usingthe association's operating fund to pay reserve expensesand reimbursing the operating fund from the reserve fund;and

[9] association board violated condominium declarationby failing to mail all unit owners notice of board meetings.

Affirmed.

Gordon, P.J., filed opinion specially concurring.

West Headnotes (37)


as bar in general

JudgmentNature and elements of bar or estoppel


Under the doctrine of “res judicata,” a finaljudgment on the merits rendered by a courtof competent jurisdiction bars any subsequent

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¶ 48 B. Conducting Business in Closed Sessions

[14] ¶ 49 Defendants next argue that the trial court improperly granted summary judgment to Palm on the question of whether the association conducts association business in gatherings that are not

“meetings” under the Condominium Property Act 765 ILCS 605/1 et seq. (West 2004)). The court held that actions taken by the board outside of open board meetings violated the declaration and Condominium Property Act, specifically pointing to the board's discussion of association matters at “workshop sessions” closed to unit owners.

*323 **238 ¶ 50 The court should grant a motion

for summary judgment 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.’ ” Axen v. Ockerlund Construction Co., 281 Ill.App.3d 224, 229,

217 Ill.Dec. 24, 666 N.E.2d 693 (1996) (quoting Purtill v. Hess, 111 Ill.2d 229, 240, 95 Ill.Dec. 305, 489 N.E.2d 867 (1986)). In deciding a motion for summary judgment, the court must not try a question of fact but rather determine whether one exists or if reasonable persons could draw different inferences from the

undisputed facts. Golden Rule Insurance Co. v. Schwartz, 203 Ill.2d 456, 462, 272 Ill.Dec. 176, 786

N.E.2d 1010 (2003); Wood v. National Liability & Fire Insurance Co., 324 Ill.App.3d 583, 585, 258 Ill.Dec. 225, 755 N.E.2d 1044 (2001). In deciding a motion for summary judgment, the court must construe the pleadings, depositions, admissions and affidavits strictly against the moving party and liberally in favor of the respondent. Gauthier v. Westfall, 266 Ill.App.3d 213, 219, 203 Ill.Dec. 435, 639 N.E.2d 994 (1994). We review the trial court's entry of summary judgment in

favor of defendant de novo. Golden Rule Insurance Co., 203 Ill.2d at 462, 272 Ill.Dec. 176, 786 N.E.2d 1010. ¶ 51 The Condominium Property Act regulates the creation and operation of Illinois condominium associations. Board of Managers of Weathersfield Condominium Ass'n v. Schaumburg Ltd. Partnership, 307 Ill.App.3d 614, 619, 240 Ill.Dec. 336, 717 N.E.2d 429 (1999). Section 2(w) of the Condominium Property Act defines “meeting of board of managers” as “any gathering of a quorum of the members of the Board of Managers ** * held for the purpose of conducting board business.” 765 ILCS 605/2(w) (West 2004). Section

18(a)(9) of the Act requires that an association's bylaws provide, in relevant part:

“[M ] eetings of the board of managers shall be open to any unit owner, except for the portion of any meeting held (i) to discuss litigation when an action against or on behalf of the particular association has been filed and is pending in a court or administrative tribunal, or when the board of managers finds that such an action is probable or imminent, (ii) to consider information regarding appointment, employment or dismissal of an employee, or (iii) to discuss violations of rules and regulations of the association or a unit owner's unpaid share of common expenses; that any vote on these matters shall be taken at a meeting or portion thereof open to any unit owner [.]” (Emphasis added.)

765 ILCS 605/18(a)(9) (West 2004). 6 In compliance with section 18(a)(9), section 506(e) of the declaration provides that “all meetings of the Board shall be open to attendance by any Unit Owner.”

*324 **239 ¶ 52 Defendants argue that the Condominium

Property Act (Act) does not prohibit an association's board from holding working sessions at which issues relating to the association are discussed but not voted upon. They assert that, under the Act, a “board meeting” occurs only when a quorum of the board meets to vote on, rather than discuss, board business and, therefore, because the evidence showed that no votes were taken at any working or closed board sessions, the sessions were not improper board meetings under the Act and the declaration and the court erred in granting summary judgment on this basis.

¶ 53 In examining statutory construction, we must give effect to the language and intent of the legislature. Board of Managers of Weathersfield Condominium Ass'n, 307 Ill.App.3d at 621, 240 Ill.Dec. 336, 717 N.E.2d 429. To accomplish this goal, the entire statute must be considered, and words used should be given their plain and ordinary meanings. Id. The language of a statute must be viewed as a whole, such that each section of the statute is examined in relation to every other section. Id. In considering legislative intent, courts must “ ‘presume that the legislature did not intend absurdity, inconvenience or injustice, and select an interpretation of the statute which leads to logical results and avoids that which would be absurd.’ ” Id. (quoting People v. Liberman, 228 Ill.App.3d 639, 647, 170 Ill.Dec. 139, 592 N.E.2d 575 (1992)).

¶ 54 After applying the rules of statutory construction and examining the plain language of the statute, we hold that “conducting board business,” as used in the section 2(w)

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Defendants = There is no prohibition from holding working sessions if not voting.

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Court says to look at the intent

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Issue #2 Conducting Business in Closed Session

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KEY HOLDING

definition of board “meeting” in the Condominium Property Act, encompasses the activities by the board in the workshop and executive sessions.

¶ 55 As noted above, the Act specifically requires that “meetings of the board of managers shall be open to any

unit owner.” 765 ILCS 605/18(a)(9) (West 2004There are only three exceptions to the open meeting requirement: the board may meet in closed meetings to (1) “discuss” pending or potential litigation involving theassociation, (2) “consider” information regarding thehiring and firing of employees and (3) “discuss” rules

violations or unpaid assessments. 765 ILCS 605/18(a)(9) (West 2004). Although the board may “discuss” and “consider” the three excepted subjects in closed meetings, it is still required to “vote on these matters * * * at a meeting or portion thereof open to any unit owner.

765 ILCS 605/18(a)(9) (West 2004). The plain language of this section leads to the conclusion that, not only must all board voting occur at meetings open to unit owners, so must all board discussions or consideration of association matters, except for discussion or consideration of the three specified exceptions.

¶ 56 Defendants assert that, except for the three exceptions stated in Section 18(a)(9), all board discussion and consideration of association matters without vote can occur in closed meetings. This is an illogical interpretation of section 18(a)(9). If it was the legislature’s intent that board discussion and consideration of all association issues can occur in closed meeting, there would be no need for the legislature to specifically provide that discussion and/or consideration of issues regarding litigation, employee hiring and rules violations can occur in closed meetings. Discussion and consideration of those three issues would already be encompassed by the general rule asserted by defendants that discussion and consideration without vote of all association matters can occur in closed meetings. From the fact that the legislature deemed it necessary to create these three exceptions to the open meeting *240 *325 requirement, we can assume that such a general rule does not exist.

¶ 57 Prior to January 1, 1994, section 2(x) of the Act defined “Meeting of Board of Managers” as “any gathering of a majority of a quorum of the members of the Board of Managers * * * held for the purpose of discussing board business.” (Emphasis added.) 765 ILCS 605/2(x) (West 1992). In 1993, the legislature amended section 2(x), now section 2(w), and changed the definition of a

board “meeting” to “any gathering of a quorum of the members of the Board of Managers * * * held for the purpose of conducting board business.” (Emphasis added.) 765 ILCS 605/2(w) (West 2004); Pub. Act 88–417, eff. Jan. 1, 1994.

[15} ¶ 58 The verb “discuss” is defined variously as “to

investigate by reasoning or argument” and “to talk about” and “to present in detail for examination or consideration.” Merriam–Webster's Collegiate Dictionary 358 (11th ed. 2006). The verb “conduct” is defined as “to direct or take part in the operation or management of * * * a business.” Merriam– Webster's Collegiate Dictionary 259 (11th ed. 2006). “Conducting board business,” therefore, means directing or taking part in the operation or management of the association. Nothing in the wording of the statute leads us to conclude that the phrase “conducting board business” should be interpreted to mean only “voting on board business,” as defendants assert.¶ 59 As the above definitions show, “to conduct” does not mean “to vote.” To conduct business means to direct or take part in the operation or management of a business, which might encompass voting on business matters but is not limited to such voting. One cannot direct or take part in the operation or management of a business unless one also discusses and considers that business before making decisions/voting on that business. Indeed, board members cannot conduct (“direct or take part in the operation or management”) board business unless they also discuss (“investigate by reason or argument,” “talk about” and “present in detail for examination and consideration”) the issues involved in that business. Accordingly, when the legislature amended the statue in 1993, it expanded the definition of board “meeting” to encompass more than just “discussion”. Nothing suggests that it intended to limit the definition of “meeting” to mean only those gatherings where a board votes on business matters.¶ 60 It is uncontested that the board discussed association and board business in workshop and executive sessions not open to unit owners. Given our determination that “conducting board business” encompasses “discussing” board business, those working and executive sessions were board “meetings” under the Act and should have been held in meetings open to all unit owners as required by the section 18(a)(9) of the Condominium Property Act. The court did not err in finding that defendants violated the declaration and the Act by holding board meetings in closed working or executive sessions. Accordingly, we affirm the trial court’s grant of partial summary judgment to Palm on this basis, its declaratory finding stating such and its injunction barring the board from continuing this practice.

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HOLDING: ALL DISCUSSIONS AND CON- SIDERATION OF BOARD BUSINESS MUST BE DONE IN OPEN SESSION

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The Board put together a terrible argument in my opinion

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I COMPLETELY DISAGREE WITH THE COURT'S REASONING. THE CHANGE NARROWED, IN MY MIND, NOT EXPANDED, WHEN MEETINGS MUST BE HELD IN OPEN SESSION. In their mind, conducting is broader, not narrower. If that is true, then how would one possibly "conduct" business without discussing board business? The reality is that you can discuss business without conducting business (i.e. making decisions), in much the same way that a plan commission first finds the facts, then closes a hearing, and then after that considers the request. Conducting is the step after discussing.

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California:

Section 4090: "Board meeting" means either of the following:

(a) A congregation, at the same time and place, of a sufficient number of directors to establish a quorum of the board, to hear, discuss, or deliberate upon any item of business that is within the authority of the board.

COMMENTARY: THIS IS VERY PRCISE AND CLEAR

Florida:

Section 718.112(c): Board of administration meetings.—Meetings of the board of administration at which a quorum of the members is present are open to all unit owners. Members of the board of administration may use e-mail as a means of communication but may not cast a vote on an association matter via e-mail. A unit owner may tape record or videotape the meetings. The right to attend such meetings includes the right to speak at such meetings with reference to all designated agenda items. The division shall adopt reasonable rules governing the tape recording and videotaping of the meeting. The association may adopt written reasonable rules governing the frequency, duration, and manner of unit owner statements.

3. Notwithstanding any other law, the requirement that board meetings and committee meetings be open to the unit owners does not apply to:

a. Meetings between the board or a committee and the association’s attorney, with respect to proposed or pending litigation, if the meeting is held for the purpose of seeking or rendering legal advice; or

b. Board meetings held for the purpose of discussing personnel matters.

COMMENTARY: DO YOU SEE THE PROBLEM WITH THIS LANGUAGE?

Section 718.112(e): Budget meeting.—

1. Any meeting at which a proposed annual budget of an association will be considered by the board or unit owners shall be open to all unit owners.

COMMENTARY: THIS INJECTS A THIRD ELEMENT…DISCUSSING, CONDUCTING, AND NOW CONSIDERING. IS CONSIDERING A COMBINATION OF DISCUSSING AND CONDUCTING?

FLORIDA COMMENTARY: From Becker and Poliakoff, Legal and Business Strategies

One of the most frequently debated topics is what constitutes the "conduct" of business. We have seen many associations whose directors meet under the auspices of "executive sessions", "planning

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meetings", or "agenda development workshops", argue that a quorum of the board could gather out of the sunshine as long as no binding votes were being taken.

However, this is not what the law says, and is certainly not what it means. Although we are not aware of any reported appellate court cases in the association context, there are a number of cases in the public arena that have held that any interaction contributing to the development of ideas constitutes a "meeting", without regard to whether or not a formal vote has been taken.

Otherwise, association boards could make decisions in "executive session", with the "public meeting" being simply a rubber-stamp event. While many associations legitimately desire to avoid certain topics in open meetings, it is simply the price that is paid for the owners' right to remain informed. To do otherwise defeats the statutory requirements that board meetings be open and that the owners have the right to participate.

Reference link: http://www.becker-poliakoff.com/Files/7165_sunshine_law_2013.pdf

COMMENTARY: DOES THIS HELP? ARGUE IT BOTH WAYS.

Wisconsin:

Section 703.15(1): Legal entity. The affairs of every condominium shall be governed by an association that, even if unincorporated, is constituted a legal entity for all purposes. Except for matters reserved to the association members or unit owners by this chapter, the declaration, or the bylaws, all policy and operational decisions of the association, including interpretation of the condominium instruments, bylaws, rules, and other documents relating to the condominium or the association, shall be made by its board of directors. This subsection does not affect the deference accorded to, or the standard of review of, an action of the board of directors by a court.

Section 703.15(4)(e): Unless otherwise provided in this chapter, and subject to provisions in the bylaws requiring a different majority, decisions of an association shall be made on a majority of votes of the unit owners present and voting.

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PROPERTY (765 ILCS 605/) Condominium Property Act.

(765 ILCS 605/18) (from Ch. 30, par. 318) Sec. 18. Contents of bylaws. The bylaws shall provide for at least the following: (a)(1) The election from among the unit owners of a

board of managers, the number of persons constituting such board, and that the terms of at least one-third of the members of the board shall expire annually and that all members of the board shall be elected at large; if there are multiple owners of a single unit, only one of the multiple owners shall be eligible to serve as a member of the board at any one time;

(2) the powers and duties of the board; (3) the compensation, if any, of the members of the board;

(4) the method of removal from office of members of the board;

(5) that the board may engage the services of a manager or managing agent;

(6) that each unit owner shall receive, at least 25

days prior to the adoption thereof by the board of managers, a copy of the proposed annual budget together with an indication of which portions are intended for reserves, capital expenditures or repairs or payment of real estate taxes;

(7) that the board of managers shall annually supply

to all unit owners an itemized accounting of the common expenses for the preceding year actually incurred or paid, together with an indication of which portions were for reserves, capital expenditures or repairs or payment of real estate taxes and with a tabulation of the amounts collected pursuant to the budget or assessment, and showing the net excess or deficit of income over expenditures plus reserves;

(8)(i) that each unit owner shall receive notice, in

the same manner as is provided in this Act for membership meetings, of any meeting of the board of managers concerning the adoption of the proposed annual budget and regular assessments pursuant thereto or to adopt a separate (special) assessment, (ii) that except as provided in subsection (iv) below, 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 the current 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 with 20 percent of the votes of the association delivered to the board within 21 days of the board action, shall call a meeting of the unit owners within 30 days of the date of delivery of the petition to

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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, (iii) that any common expense not set forth in the budget or any increase in assessments over the amount adopted in the budget shall be separately assessed against all unit owners, (iv) that separate assessments for expenditures relating to emergencies or mandated by law may be adopted by the board of managers without being subject to unit owner approval or the provisions of item (ii) above or item (v) below. As used herein, "emergency" means an immediate danger to the structural integrity of the common elements or to the life, health, safety or property of the unit owners, (v) that assessments for additions and alterations to the common elements or to association-owned property not included in the adopted annual budget, shall be separately assessed and are subject to approval of two-thirds of the total votes of all unit owners, (vi) that the board of managers may adopt separate assessments payable over more than one fiscal year. With respect to multi-year assessments not governed by items (iv) and (v), the entire amount of the multi-year assessment shall be deemed considered and authorized in the first fiscal year in which the assessment is approved;

(9)(A) that every meeting of the board of managers

shall be open to any unit owner, except that the board may close any portion of a noticed meeting or meet separately from a noticed meeting to: (i) discuss litigation when an action against or on behalf of the particular association has been filed and is pending in a court or administrative tribunal, or when the board of managers finds that such an action is probable or imminent, (ii) discuss the appointment, employment, engagement, or dismissal of an employee, independent contractor, agent, or other provider of goods and services, (iii) interview a potential employee, independent contractor, agent, or other provider of goods and services, (iv) discuss violations of rules and regulations of the association, (v) discuss a unit owner's unpaid share of common expenses, or (vi) consult with the association's legal counsel; that any vote on these matters shall take place at a meeting of the board of managers or portion thereof open to any unit owner;

(B) that board members may participate in and act at

any meeting of the board of managers in person, by telephonic means, or by use of any acceptable technological means whereby all persons participating in the meeting can communicate with each other; that participation constitutes attendance and presence in person at the meeting;

(C) that any unit owner may record the proceedings at

meetings of the board of managers or portions thereof required to be open by this Act by tape, film or other

45

means, and that the board may prescribe reasonable rules and regulations to govern the right to make such recordings;

* * * * (21) that the board may ratify and confirm actions of

the members of the board taken in response to an emergency, as that term is defined in subdivision (a)(8)(iv) of this Section; that the board shall give notice to the unit owners of: (i) the occurrence of the emergency event within 7 business days after the emergency event, and (ii) the general description of the actions taken to address the event within 7 days after the emergency event.

The intent of the provisions of Public Act 99-472

adding this paragraph (21) is to empower and support boards to act in emergencies.

(765 ILCS 605/18.4) (from Ch. 30, par. 318.4) Sec. 18.4. Powers and duties of board of managers. The board of managers shall exercise for the association all powers, duties and authority vested in the association by law or the condominium instruments except for such powers, duties and authority reserved by law to the members of the association. The powers and duties of the board of managers shall include, but shall not be limited to, the following:

* * * * In the performance of their duties, the officers and members of the board, whether appointed by the developer or elected by the unit owners, shall exercise the care required of a fiduciary of the unit owners.

(765 ILCS 605/18.8) Sec. 18.8. Use of technology. (a) Any notice required to be sent or received or signature, vote, consent, or approval required to be obtained under any condominium instrument or any provision of this Act may be accomplished using acceptable technological means. This Section shall govern the use of technology in implementing the provisions of any condominium instrument or any provision of this Act concerning notices, signatures, votes, consents, or approvals. (b) The association, unit owners, and other persons entitled to occupy a unit may perform any obligation or exercise any right under any condominium instrument or any provision of this Act by use of acceptable technological means. (c) A signature transmitted by acceptable technological means satisfies any requirement for a signature under any

46

condominium instrument or any provision of this Act. (d) Voting on, consent to, and approval of any matter under any condominium instrument or any provision of this Act may be accomplished by any acceptable technological means, provided that a record is created as evidence thereof and maintained as long as the record would be required to be maintained in nonelectronic form. (e) Subject to other provisions of law, no action required or permitted by any condominium instrument or any provision of this Act need be acknowledged before a notary public if the identity and signature of the signatory can otherwise be authenticated to the satisfaction of the board of directors or board of managers. (f) If any person does not provide written authorization to conduct business using acceptable technological means, the association shall, at its expense, conduct business with the person without the use of acceptable technological means. (g) This Section does not apply to any notices required: (i) under Article IX of the Code of Civil Procedure; or (ii) in connection with foreclosure proceedings in enforcement of any lien rights under this Act. (Source: P.A. 98-1042, eff. 1-1-15; 99-78, eff. 7-20-15; 99-612, eff. 1-1-17.)

(765 ILCS 605/19) (from Ch. 30, par. 319) Sec. 19. Records of the association; availability for examination. (a) The board of managers of every association shall keep and maintain the following records, or true and complete copies of these records, at the association's principal office: (1) the association's declaration, bylaws, and plats of survey, and all amendments of these;

(2) the rules and regulations of the association, if any;

(3) if the association is incorporated as a

corporation, the articles of incorporation of the association and all amendments to the articles of incorporation;

(4) minutes of all meetings of the association and

its board of managers for the immediately preceding 7 years;

(5) all current policies of insurance of the association;

(6) all contracts, leases, and other agreements then

in effect to which the association is a party or under which the association or the unit owners have obligations or liabilities;

(7) a current listing of the names, addresses, email

addresses, telephone numbers, and weighted vote of all members entitled to vote;

(8) ballots and proxies related to ballots for all

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matters voted on by the members of the association during the immediately preceding 12 months, including, but not limited to, the election of members of the board of managers; and

(9) the books and records for the association's

current and 10 immediately preceding fiscal years, including, but not limited to, itemized and detailed records of all receipts, expenditures, and accounts.

(b) Any member of an association shall have the right to inspect, examine, and make copies of the records described in subdivisions (1), (2), (3), (4), (5), (6), and (9) of subsection (a) of this Section, in person or by agent, at any reasonable time or times, at the association's principal office. In order to exercise this right, a member must submit a written request to the association's board of managers or its authorized agent, stating with particularity the records sought to be examined. Failure of an association's board of managers to make available all records so requested within 10 business days of receipt of the member's written request shall be deemed a denial. Any member who prevails in an enforcement action to compel examination of records described in subdivisions (1), (2), (3), (4), (5), (6), and (9) of subsection (a) of this Section shall be entitled to recover reasonable attorney's fees and costs from the association.

PROPERTY (765 ILCS 160/) Common Interest Community Association Act.

(765 ILCS 160/1-30) Sec. 1-30. Board duties and obligations; records. (i) Board records. (1) The board shall maintain the following records of

the association and make them available for examination and copying at convenient hours of weekdays by any member or unit owner in a common interest community subject to the authority of the board, their mortgagees, and their duly authorized agents or attorneys:

(i) Copies of the recorded declaration, other

community instruments, other duly recorded covenants and bylaws and any amendments, articles of incorporation, articles of organization, annual reports, and any rules and regulations adopted by the board shall be available. Prior to the organization of the board, the developer shall maintain and make available the records set forth in this paragraph (i) for examination and copying.

(ii) Detailed and accurate records in

chronological order of the receipts and expenditures affecting the common areas, specifying and itemizing the maintenance and repair expenses of the common areas and any other expenses incurred, and copies of all contracts, leases, or other agreements entered into by the board shall be maintained.

(iii) The minutes of all meetings of the board

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which shall be maintained for not less than 7 years.

(iv) With a written statement of a proper

purpose, ballots and proxies related thereto, if any, for any election held for the board and for any other matters voted on by the members, which shall be maintained for not less than one year.

(v) With a written statement of a proper purpose,

such other records of the board as are available for inspection by members of a not-for-profit corporation pursuant to Section 107.75 of the General Not For Profit Corporation Act of 1986 shall be maintained.

(vi) With respect to units owned by a land trust,

a living trust, or other legal entity, the trustee, officer, or manager of the entity may designate, in writing, a person to cast votes on behalf of the member or unit owner and a designation shall remain in effect until a subsequent document is filed with the association.

(2) Where a request for records under this subsection

is made in writing to the board or its agent, failure to provide the requested record or to respond within 30 days shall be deemed a denial by the board.

(765 ILCS 160/1-40) Sec. 1-40. Meetings.

* * * * (b) Meetings.

* * * * (5) Meetings of the board shall be open to any unit

owner, except that the board may close any portion of a noticed meeting or meet separately from a noticed meeting: (i) to discuss litigation when an action against or on behalf of the particular association has been filed and is pending in a court or administrative tribunal, or when the common interest community association finds that such an action is probable or imminent, (ii) to discuss third party contracts or information regarding appointment, employment, engagement, or dismissal of an employee, independent contractor, agent, or other provider of goods and services, (iii) to interview a potential employee, independent contractor, agent, or other provider of goods and services, (iv) to discuss violations of rules and regulations of the association, (v) to discuss a member's or unit owner's unpaid share of common expenses, or (vi) to consult with the association's legal counsel. Any vote on these matters shall be taken at a meeting or portion thereof open to any member.

(6) The board must reserve a portion of the meeting

of the board for comments by members; provided, however, the duration and meeting order for the member comment period is within the sole discretion of the board.

(Source: P.A. 99-567, eff. 1-1-17.) (765 ILCS 160/1-85) Sec. 1-85. Use of technology. (a) Any notice required to be sent or received or

49

signature, vote, consent, or approval required to be obtained under any community instrument or any provision of this Act may be accomplished using acceptable technological means. This Section governs the use of technology in implementing the provisions of any community instrument or any provision of this Act concerning notices, signatures, votes, consents, or approvals.

(b) The common interest community association, unitowners, and other persons entitled to occupy a unit may perform any obligation or exercise any right under any community instrument or any provision of this Act by use of acceptable technological means.

(c) A signature transmitted by acceptable technologicalmeans satisfies any requirement for a signature under any community instrument or any provision of this Act.

(d) Voting on, consent to, and approval of any matterunder any community instrument or any provision of this Act may be accomplished by any acceptable technological means, provided that a record is created as evidence thereof and maintained as long as the record would be required to be maintained in nonelectronic form.

(e) Subject to other provisions of law, no action requiredor permitted by any community instrument or any provision of this Act need be acknowledged before a notary public if the identity and signature of the signatory can otherwise be authenticated to the satisfaction of the board of directors.

(f) If any person does not provide written authorizationto conduct business using acceptable technological means, the common interest community association shall, at its expense, conduct business with the person without the use of acceptable technological means.

(g) This Section does not apply to any notices required:(i) under Article IX of the Code of Civil Procedure; or (ii)in connection with foreclosure proceedings in enforcement ofany lien rights under this Act.(Source: P.A. 98-1042, eff. 1-1-15; 99-612, eff. 1-1-17.)

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Scott E. Pointner is a Member at Rathje Woodward LLC, DuPage County's oldest law firm, and

has earned an AV-rating (the highest possible distinction) in the Martindale-Hubbell Law

Directory. After three years of litigation experience in Cook and DuPage Counties, he joined

the firm in 1999 and became a partner in 2002. Scott has concentrated his practice in three

broad categories: commercial real estate, general corporate and finance, and commercial

litigation, with homeowners and condominium association law having become more than half

of his practice since 2010. In 2016, he was awarded the Leading Lawyer designation for Real

Estate Law: Associations & Condominiums. Although his commercial real estate, zoning,

landlord/tenant, and general corporate practices have been his transactional focus, Scott's

careful attention to detail is shaped in large part by his extensive litigation experience, which

helps insulate his documents and transactions from traps too many purely-transactional

attorneys often miss. With Scott having litigated cases in fourteen different counties

throughout Northern Illinois and having handled a broad range of clients in real estate, zoning,

contract, litigation, and corporate matters, Scott’s mix of small and medium-sized businesses

and non-profits in general, and homeowners and condo associations in particular, benefit from

his integrated approach whereby he effectively leverages his real estate, corporate and

finance, and commercial litigation experience to find the best resolutions for his clients.

Scott currently represents a variety of homeowner and condominium associations, from large

city-sized lake associations to small one building condo associations and everything in

between. Utilizing his extensive homeowners and condominium association experience, he

also represents association members, builders, and developers with regard to association

issues, including litigation. Finally, his practice also includes collections litigation and other

common association cases.

Practice Areas

• Banking, Loans and Finance

• Business & Corporate

• General Counsel

• Homeowners and Condominium Association

• Litigation

• Municipal Law

• Real Estate, Land Use & Development

Education

• Southwestern University School of Law (J.D., 1996) Top 20%

• Indiana University (B.S., 1990)

Scott E. Pointner Phone: (630) 510.4902 Email: [email protected]


Fraternities & Sororities

• Sigma Alpha Epsilon

Bar Admissions

• 1996-current Illinois Supreme Court-State Bar

• 1997-current United States District Court for the Northern District of Illinois

• 2001-current United States Supreme Court

• 2002-current Trial Bar for the Northern District of Illinois

• 2016-current Wisconsin Supreme Court-State Bar

Memberships & Awards

• AV Rating, Martindale-Hubbell: Highest possible rating by the most-trusted entity for

rating attorneys in the United States.

• Chicago’s Top Rated Lawyers (www.law.com): Real Estate (2012); Zoning, Planning,

and Land Use (2012); Business and Commercial Law (2014); General Practice (2014).

• Leading Lawyers Award Designation (2016): Real Estate Law: Associations &

Condominiums.

• Member: Community Associations Institute; Illinois Association of Lake Communities;

Association of Condominium, Townhouse, and Homeowners Associations.

• Member: American Inns of Court, DuPage County Chapter (2009-present); Member,

Board of Directors (2014-2015); Team Leader (2011-2012, and 2012-2013); Vice-

Chair, Mentoring Committee (2013-2014); Chair, Mentoring Committee, (2014-2015).

• Member: DuPage County and Illinois State Bar Associations. Active Member, Lawyers

Lending a Hand Committee (2006-present).

• Chair: DuPage County Bar Association Professional Responsibility Section 2015-2016.

• Advisory Committee Member: DuPage County Bar Association Planning Committee

(2015-16, 2016-17).

• Member, Business Advisory Board: Illinois Chamber of Commerce (2011-2016).

• General Counsel: Wheaton Chamber of Commerce (2010-present).

• Member of Board of Directors: Wheaton Chamber of Commerce (2010-present).

• Recipient: Wheaton Chamber of Commerce, Outstanding Leadership Award (2009),

Executive Award (2012). DuPage County Bar Association Board of Directors

Distinguished Service Award winner (2015-2016).

• Secretary: Rathje Woodward LLC (2002-present).

• Member, Secretary: Executive Board of Directors, Grand Theater Corporation,

501(c)(3) non-profit committed to restoring the Wheaton Grand Theater, Wheaton,

Illinois. Elected 2001 (2001-present).

• Chair: Wheaton Leadership Prayer Breakfast. Member of the committee that presents

an annual prayer breakfast for leaders in Wheaton (2013-present), (Chair 2015-

present).

• Head Soccer Coach: Winfield in Action/Winfield Park District (2003-2011) (15 teams).

• Parishioner: St. Irene’s Catholic Church, Warrenville, Illinois (1996-present); Baptism

Mentor (2003-present); Music ministry leader for Children’s Liturgy of the Word (2006-

present); Lector (2008-present).

Classes, Seminars & Presentations

• 2002-Present: Guest Lecturer: Civil Litigation, Midwestern University. • February, 2003: Featured Lecturer: (First of three presenters). Zoning and Land Use

in Illinois, Lorman Education Services for Continuing Legal Education. • January, 2008: Featured Lecturer: (First of five presenters). Plat and Subdivision Law

in Illinois, 2008, Lorman Education Services for Continuing Legal Education. • January, 2009: Featured Lecturer: (First of five presenters). Plat and Subdivision Law

in Illinois, 2009, Lorman Education Services for Continuing Legal Education. • February, 2010: Featured Lecturer: How to Negotiate A Commercial Lease, EAI Annual

Meeting. • September, 2010: Featured Lecturer: (First of three presenters). Illinois Professional

Land Surveying Practice, Half Moon Seminars for Continuing Legal Education. • November, 2010: Featured Lecturer: (Last of six presenters). Real Estate Law and

Practice, DuPage County Bar Association Basic Skills Seminar. • January, 2011: Featured Lecturer: Homeowners Association Law, Mentor CLE

Continuing Legal Education webinar. • September, 2011: Sole Lecturer: How to Negotiate A Commercial Lease In The Post-

Recession Economy, Illinois Chamber of Commerce. • November, 2011: Featured Lecturer: (Last of six presenters). Real Estate Law and

Practice, DuPage County Bar Association Basic Skills Seminar. • October, 2012: Featured Lecturer: (One of two presenters). Illinois Professional Land

Surveying Practice, Half Moon Seminars for Continuing Legal Education. • February, 2013: Featured Lecturer: After the Economic Apocalypse: Zoning Hearings

After the Recession, DuPage County Bar Association, Continuing Legal Education Seminar.

• February, 2014: Featured Lecturer: Commercial Leasing, Illinois Chamber of Commerce.

• January, 2015: Moderator: How To Stand Out To The Partners, DuPage County Bar Association Professional Responsibility Continuing Legal Education Lecture (Approved by the Illinois Supreme Court's MCLE Board for 1 credit hour of Professionalism Credit).

• October, 2015: Featured Lecturer: Surviving The First Year/Expectations of a First Year Associate, DuPage County Bar Association, Continuing Legal Education Seminar.

• June, 2016: Moderator: DuPage County Bar Association Fee Dispute Resolution Program, DuPage County Bar Association Professional Responsibility Continuing Legal Education Lecture (Approved by the Illinois Supreme Court's MCLE Board for 1 credit hour of Professionalism Credit).

• April, 2019: Featured Lecturer: (First of two presenters). Association Governance After P.A. 99-0567: What Every Board Member Needs to Know About Palm II, Community Association Institute Illinois 2019 Legal Forum.

Articles & Publications

• Author: Zoning and Land Use in Illinois, Lorman Education Services, Illinois Continuing Legal Education, February, 2003.

• Author: Plat and Subdivision Law, Section 1: Understanding the Land Development

Process, Lorman Education Services, Illinois Continuing Legal Education, January, 2008; revised/re-published January, 2009.

• Author: How to Negotiate a Commercial Lease, EAI Annual Meeting Handout, February, 2010.

• Author: An Introduction to Illinois Land Surveyor Practice, and Illinois Surveyor Liability, Half Moon Seminars, Continuing Legal Education manual for CLE lecture, September, 2010.

• Author: Basic Real Estate Skills for Newly-Licensed Attorneys, DuPage County Bar

Association Basic Skills Seminar, Real Estate, November, 2010; November, 2011.

• Co-Author: An Introduction To Illinois’ Newly-Penned Common Interest Community Association (“CICA”) Act, The Journal of the DuPage County Bar Association, Volume 23, Issue 3, December, 2010, http://www.dcbabrief.org/vol231210art2.html.

• Author: Homeowners Association Law, Mentor CLE Handout, January, 2011.

• Guest Newspaper Writer: The Challenges of Navigating The Economy As A Small Business, The Wheaton Leader Newspaper, September 18, 2013 (Part 1 of 2), http://m.mysuburbanlife.com/2013/09/11/pointner-the-challenges-of-navigating-the-economy-as-a-small-business/af96wn5/?page=1, and February 5, 2014 (Part 2) http://www.mysuburbanlife.com/2014/01/26/pointner-the-sea-of-mediocrity-in-which-small-businesses-are-sailing/arspg1j/.

Representative Cases

• Co-Counsel: For Appellees, People ex rel. Robert J. Klaeren II et al. v. Village of Lisle

et al., 316 Ill.App.3d 770, 737 N.E.2d 1099 (2nd Dist., 2000) (Result: affirmed); 202

Ill.2d 164, 781 N.E.2d 223 (2002) (Result: affirmed).

• Counsel: For Appellees, Paul J. Salce v. Young Sil Saracco a/k/a Youngsil Cho, John

Lackos and Euro World Wines, Inc., 409 Ill. App. 3d 977, 949 N.E.2d 284 (2d Dist.

2011). (Result: affirmed).

• Counsel: For Appellant, Didier Builders, Inc. et al v. American National Bank & Trust

Co. of Chicago, et al, Appellate Court Case No: 2-00-0786. (Result: reversed) Rule 23

Order.

• Counsel: For Appellant, Christy L. Lee v. Village of Lisle, et al, Appellate Court Case

No: 02-99-1169. (Result: reversed). Rule 23 Order.

• Co-Counsel: For Appellees, Markwick v. Homeward Glen Homeowners Association,

Appellate Court Case No: 2-12-0624. (Result: affirmed) Rule 23 Order.



James P. Arrigo concentrates his practice in Condominium and Common Interest Community

Association law and litigation. He works with association boards and their managers to

recognize and address legal issues before they become problems, drafts and amends

governing instruments and represents associations in all types of cases, including collecting

common expenses to appeals. Jim is a presenter at numerous association-related seminars,

conferences and in-house programs for clients and has been an author and contributor to

association-related publications.

Practice Areas

• Condominium/Homeowners Association Law

• Litigation

Education

• DePaul University College of Law (J.D. Cum Laude, 1994)

• University of Illinois (B.A., 1982)

Bar Admissions

• 1994 State of Illinois

• 1995 U.S. District Court for the Northern District of Illinois

• 1998 U.S. District Court for the Central District of Illinois

Memberships

• DuPage County Bar Association

• Community Association Institute

• Association of Condominium Townhouse and Homeowner Association

Seminars & Presentations

• Association of Condominium Townhouse and Homeowner Association – July 27, 2017

(ACTHA Education Seminar) Presentation: Up In Smoke: Dealing With Air Nuisances

• Association of Condominium, Townhouse and Homeowners Associations -September

24, 2016 (ACTHA South Expo) Presentation: Collecting Assessments: Money Matters

• Association of Condominium, Townhouse and Homeowners Associations –April 18,

2015 (ACTHA Spring Conference) Panel Presentation: Breach of Fiduciary Duty- Until

it Happens to You

James P. Arrigo Phone: (630) 668.8500 Email: [email protected]


• Association of Condominium, Townhouse and Homeowners Associations –September,

2015 (ACTHA South Expo) FCC/OTARD Regulations (Satellite Dishes and Antennas)

for Associations

• Association of Condominium, Townhouse and Homeowners Associations –June 11,

2013 Oak Park, IL, Presentation: Collections and Foreclosures – Issues for

Associations

• Romeoville, IL, September 15, 2016 In-House Management Presentation: Navigating

Electronic Notice and Voting

• Palos Heights, IL, March 15, 2016 In-House Manager/Board-member Presentation:

Board Basics for Associations

• Community Association Institute Illinois 2019 Legal Forum, April 12, 2019, Glen Ellyn,

IL, Presentation: Association Governance After P.A. 99-0567: What Every Board

Member Needs to Know About Palm II