CHICAGO — A state appeals panel has affirmed a Cook County judge's summary judgment against the plaintiffs in a dispute over which of two companies - whose leadership included the same person and whose names were separated by one letter - was entitled to consulting fees stemming from work performed by a contractor with ties to both entities.
In an entanglement between the two companies, Carrie Rios filed suit on behalf of the estate of Rafael Rios and Community Development Resource LLC against the separate company, Community Development Resources.
According to the appeal complaint filed by Carrie Rios, Rafael Rios—now deceased—started Resource as an entity solely owned and operated by him, while, for Resources, he worked in an arrangement with several partners. The appellate court's decision was an unpublished order issued under Supreme Court Rule 23, which limits its use as precedent.
At issue was which of the two companies was entitled to more than $108,000 in fees for consulting work Rios did on various real estate development projects, including an agreement with Signature Healthcare Services that could have led to a payout of as much as $600,000.
The panel of three justices from the Illinois First District Appellate Court in Chicago found that even though Rios steadfastly maintained he planned “to bind” Resource to the contract in question, “subjective intent alone cannot overcome other evidence” that might be put forth.
The court also noted that in 2010, Rios received at least $50,000 in payments from his aforementioned partners at Resources for steering third-party business their way and that the group also exchanged emails among themselves expressing their intentions to “go for” Community Development Resources.
Signature Healthcare executives have been reported to have been under the impression they were in business with Resources, and at one point they sent Rios an email to that effect. Attorneys for the defendants also argued Rios did not move to form Resource until after his dispute with Resources rose to the forefront.
In the end, the court found that Rios’ argument that there was no partnership between him and Resources and that legally it was only “a joint venture” had no legal bearing on the nature of their relationship.
"The trial court correctly found that the structure of Resources did not matter," the court stipulated. "We reject plaintiffs’ argument that defendants had to prove that Resources was a partnership, as opposed to some other type of business entity."
The appellate order was authored by Justice David Ellis, with concurrence from justices Nathaniel R. Howse Jr. and Eileen O'Neill Burke.
Rios was represented in the action by attorney Alan J. Mandel, of Skokie.
Defendants were represented by attorneys with the firms of Locke Lord LLP and Ginsberg Jacobs LLC, each of Chicago.