In a significant turn of events, an Illinois appellate court has reversed the dismissal of a negligence lawsuit against an accounting firm and its owner, sending the case back to the lower court for further proceedings. The complaint was originally filed by EarthMed, LLC in Cook County Circuit Court on December 15, 2022, against Edward Berlin and his firm Berlin, Stricker & Associates, Ltd.
EarthMed, LLC, which operates two cannabis dispensaries in Illinois and is owned by Gus Koukoutsakis and Michael Perez, accused Berlin and his firm of failing to accurately process payroll. This alleged failure led to a class action lawsuit against EarthMed for improper overtime payments. According to the complaint, Berlin had assured EarthMed that they were exempt from overtime requirements due to their small number of employees. However, this advice proved incorrect when a former employee filed a class action lawsuit on December 11, 2019.
The federal class action claimed that EarthMed's method of paying overtime violated state and federal laws dating back to February 1, 2016. Unaware of these requirements until the lawsuit was filed, EarthMed eventually settled the case in November 2021 for $614,449.84. The settlement included past-due overtime payments as well as penalties and attorney fees.
In response to these financial damages, EarthMed sued Berlin and his firm for negligence and negligent misrepresentation. They sought compensation equivalent to the settlement amount paid in the federal case. However, the circuit court dismissed their complaint under section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619), citing untimeliness based on a two-year statute of limitations and a five-year statute of repose outlined in section 13-214.2 of the Code.
EarthMed contended that neither Berlin nor his firm were registered or licensed under the Illinois Public Accounting Act (225 ILCS 450/0.01), making these limitations periods inapplicable. They supported their argument with evidence from an IDFPR website search showing no licenses for either defendant.
Despite this evidence, defendants presented an affidavit from Ronald Stricker asserting that both he and Berlin were partners in BSA and properly registered under the Illinois Public Accounting Act. The circuit court sided with defendants initially but denied EarthMed's motion to reconsider even after new evidence surfaced from a FOIA request indicating no records existed for any licenses held by Berlin or BSA.
On appeal, Presiding Justice Rochford delivered a judgment reversing this decision due to conflicting evidence about whether defendants were indeed registered or licensed accountants as required by law for applying section 13-214.2’s limitations periods. Justices Hoffman and Martin concurred with this judgment.
The appellate court's reversal means that if a jury trial has been demanded in this case—an unclear point from records—the statutes of limitation and repose can be raised as affirmative defenses by defendants during trial proceedings. If no jury trial is demanded instead then an evidentiary hearing will be conducted before deciding on dismissal motions again.
Representing parties include attorneys whose names are not explicitly mentioned within available documents while Judge Ronald F Bartkowicz presided over initial proceedings bearing Case ID No:2021 L011104