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THIRD DIVISION
Date Filed: July 28, 2004

JUSTICE HALL delivered the opinion of the court:

The plaintiff, Independent Trust Corp. (Intrust), brought suit against thedefendants, Laurence W. Capriotti, Jack L. Hargrove, Alan L. Hurwick, ITIEnterprises, Inc. (ITI), and Wholesale Real Estate Services, Inc.⁽¹⁾, alleging breachof contract, fraud, breach of fiduciary duty, and conversion. The complaint alsosought an accounting. The circuit court granted Intrust's motions for summaryjudgment, and judgments in the amount of $68,096,551.78 ($68.1 million) were enteredagainst each of the defendants. The defendants, with the exception of Mr. Hurwick,appeal from the judgment of the circuit court.⁽²⁾

Messrs. Hargrove and Capriotti and the corporate defendants raise the followingissues on appeal: whether the circuit court erred when it denied the defendants'motions for a more particular statement of facts and bills of particulars and whether the circuit court erred when it granted the motions for summary judgment. Mr. Capriotti raises an additional issue: whether the circuit court erred when itdenied Mr. Capriotti's motion to dismiss counts II, III and IV of the complaint.

Intrust was an Illinois corporate fiduciary organized under the CorporateFiduciary Act (205 ILCS 620/1-1 et seq. (West 1998)) and was regulated by theIllinois Commissioner of Banks and Real Estate (the OBRE).⁽³⁾ In re Possession &Control of the Commissioner of Banks & Real Estate of Independent Trust Corp., 327Ill. App. 3d 441, 449, 764 N.E.2d 66 (2001) (Banks & Real Estate Corp.). Intrustserved as the custodian for various investment trust assets that its customers placedin its custody. Banks & Real Estate Corp., 327 Ill. App. 3d at 449-50.

On April 14, 2000, after Intrust failed to comply with its directions, the OBREseized control of Intrust, appointed PriceWaterhouse Coopers, LLP (PWC), as receiverand commenced an action for dissolution and liquidation of Intrust. Banks & RealEstate, 327 Ill. App. 3d at 451.

The complaint in this case, filed on June 1, 2000, stems from the discovery of a$68.1 million cash shortage from trust funds deposited for investment with Intrust. See Banks & Real Estate Corp., 327 Ill. App. 3d at 449.

The following facts are taken from the complaint, depositions, affidavits, andexhibits in the record.

Intercounty Title Company (Intercounty) was owned by ITI Enterprises, Inc. Mr.Capriotti was president of both ITI and Intercounty and was a director of Intrust. Mr. Hargrove was a director of Intercounty and chairman of Intrust's board ofdirectors. Mr. Hargrove owned Intrust through Intrust's parent company, MadisonAvenue Investments, Inc. Mr. Hurwick was the chief financial officer (CFO) of ITIand Intercounty.

As of 1992, Intrust's board of directors had five members. At the end of 1994,Intrust's board of directors consisted of Messrs. Hargrove, Capriotti, and GaryBertacchi, president of Intrust.

In 1990, Mr. Capriotti instructed Gary Irwin, then president of Intrust, to setup an escrow agreement whereby Intrust could deposit trust-holder funds into anescrow account managed and controlled by Intercounty. Mr. Irwin had previouslyworked at Intercounty for Messrs. Capriotti and Hargrove. His salary at Intrust waspaid by Intercounty. In 1992, Mr. Irwin returned to work at Intercounty at thedirection of Mr. Hargrove.

Under the escrow agreement with Intercounty, Intrust agreed to deposit fundswith Intercounty. In turn, Intercounty pledged that it would hold the funds in aninterest-bearing account (the escrow account) at LaSalle National Bank (LaSalleBank), unless and until it was specifically authorized by Intrust to remove thefunds. Other than the above provision, Intrust had no control over the escrowaccount. Only Intercounty could remove funds from the escrow account. On December4, 1990, Intrust deposited funds in the escrow account in the amount of$16,582,098.78 with Intercounty.

In the performance of its regulatory function, the OBRE noted that Intercountycommingled the Intrust funds with its other funds. In its February 28, 1994, report,the OBRE pointed out that the commingling created a breach of fiduciary duty anddirected Intrust to insure that its deposits with Intercounty were segregated in aseparate account. However, the OBRE's May 2, 1995, report noted that the funds werestill being commingled and that Intrust was not receiving statements directly fromLaSalle Bank, relying instead on spreadsheets supplied by Intercounty. The OBRErecommended that Intrust establish a separate trust account containing only cashwhich is the property of the various trusts. At the July 25, 1995, Intrust board ofdirectors meeting, Mr. Capriotti stated that he would contact Intercounty and makesure Intrust's funds were segregated from other funds.

On January 1, 1996, the OBRE again directed the segregation of Intrust's fundsbeing held by Intercounty, and again, Mr. Capriotti agreed to have the funds placedin a separate LaSalle Bank account prior to the next OBRE examination. Despite Mr.Capriotti's statement to the board of directors at the May 20, 1996, meeting that hewas going to have the funds segregated, Intrust's funds remained commingled withIntercounty's funds. Mr. Capriotti failed to respond to Mr. Bertacchi's repeatedrequests to place the funds in a segregated account.

On January 21, 1997, Mr. Bertacchi sent a memorandum to George Stimac, withcopies to Messrs. Capriotti and Hurwick, authorizing and directing him to deposit $54million in Intrust escrow funds into the new segregated escrow account (segregatedaccount) opened at LaSalle Bank. Despite another memorandum to Mr. Capriotti,Intrust's funds were still not transferred to the segregated account.

At the March 28, 1997, Intrust board meeting, Mr. Capriotti advised that thesegregation process would be completed by the end of the second quarter of 1997. OnMay 21, 1997, Mr. Bertacchi advised Mr. Hargrove of the difficulties he was havingwith Mr. Capriotti over the transfer of Intrust's funds to the segregated account.

At the June 6, 1997, board meeting, Mr. Capriotti advised that he was finalizingthe segregation process and that it would be completed by the end of the secondquarter. On or before June 27, 1997, Mr. Bertacchi spoke with Mr. Capriotti, whotold him he would send Mr. Bertacchi a copy of a bank statement for the segregatedaccount. On June 27, 1997, Mr. Bertacchi received a LaSalle Bank statement showing abalance of $54,894,943 in the segregated account, which corresponded with the amountthat Intercounty should have had in Intrust's account, based upon the Intrust'shistory of deposits and withdrawals. The LaSalle Bank statement was faxed, using anITI fax cover sheet, and was sent by "Larry/Susan."

On August 20, 1998, Mr. Bertacchi sent a memorandum to Mr. Hargrove, explainingthat, despite the fax from "Larry and Susan," Intrust's funds had never beentransferred to the segregated account, and asked for his assistance.

On August 31, 1998, the OBRE issued another report in which it noted thatIntrust did not hold signatory authority over the segregated account and did notreceive bank statements from LaSalle Bank. The OBRE further noted the closerelationship between the Intercounty and Intrust which, arguably, created a situationwhere the corporate fiduciary was benefitting from the trust funds, a violation oftrust principles. Intrust responded that its board had considered the comments andthat Mr. Capriotti was taking steps to resolve the situation prior to the next audit.

Also, on or about August 31, 1998, Mr. Bertacchi received, either by fax ormessenger, another LaSalle Bank statement from Intercounty, showing a balance of$54,840,466.02 in the segregated account. In a September 15, 1998, letter to Mr.Bertacchi on ITI letterhead, Mr. Hurwick stated that Intercounty was holding$54,832,735.26 as of August 31, 1998.

At the December 10, 1998, Intrust board of director's meeting, the OBRE's reportwas discussed. In Intrust's written response to the OBRE's August 31, 1998, report,Mr. Bertacchi advised the OBRE that Mr. Capriotti had indicated that he would takethe necessary steps to satisfy the OBRE as to the segregated account situation.

In an April 6, 1999, memorandum to Mr. Capriotti, Mr. Bertacchi advised thatIntrust had lost a large investment advisor because Intrust could not produce anonqualified audit report and that he had not made any progress with Mr. Hurwicktoward securing Intrust's control of the segregated account.

On April 21, 1999, Mr. Capriotti called Mr. Bertacchi and proposed that Intrustdeposit $3.5 million into the segregated account. According to the tape of theconversation with Mr. Capriotti, the transfer was necessary because Messrs. Hargroveand Capriotti needed the funds in connection with a business project, but the fundswould be returned to Intrust by April 30, 1999.

At the April 23, 1999, board of directors meeting, Mr. Capriotti indicated thathe would like to see the balances at LaSalle Bank increased by $10 million. Theproposal was supported by Mr. Hargrove and, over the objection of Mr. Bertacchi, theboard authorized another $5.7 million to be wire-transferred from Intrust to thesegregated account. According to the tape recording of the meeting, Messrs.Capriotti and Hargrove claimed that they needed the money to secure more favorableinterest rates on loans they had and that the funds would be returned to Intrust byApril 30, 1999.

On April 21, 1999, Intrust wire-transferred $3.5 million into the segregatedescrow account; on the same day, Intercounty transferred the same amount out of thesegregated escrow account. On April 23, 1999, Intrust wire-transferred $5.7 millioninto the segregated escrow account; again, on the same day, Intercounty transferredthe same amount out of the segregated escrow account. By May 1999, the funds had notbeen returned to Intrust, and Mr. Bertacchi's efforts to retrieve Intrust's fundswere unsuccessful.

In May and June 1999, Mr. Bertacchi wrote to Mr. Hurwick requesting wire-transfers of $15 million and the $10 million from the segregated escrow account toIntrust, but received no response. Mr. Bertacchi also wrote to Mr. Capriottirequesting the return of the $9.2 million and that control of Intrust's deposits betransferred to Intrust. Finally, on August 3, 1999, Mr. Bertacchi wrote to Mr.Hurwick requesting proof that Mr. Binkowski and Mr. Bertacchi had been added assignatories on the segregated escrow account or, in the alternative, the funds in thesegregated escrow account were to be placed in an account under the control ofIntrust. On August 10, 1999, Mr. Hurwick responded that he could take no actionuntil the matters were addressed and voted on by the Intrust board of directors.

Also on August 10, 1999, the OBRE issued another report, requiring thedissolution of the escrow agreement between Intrust and Intercounty. At the August24, 1999, Intrust board meeting, Mr. Capriotti stated that the funds from thesegregated escrow account should be moved to a new account in Intrust's name atLaSalle Bank. On August 31, 1999, when Messrs. Bertacchi and Binkowski went toLaSalle bank to set up the new account, they were informed that Intercounty hadtransferred all of its accounts to another bank. Mr. Bertacchi again requested thatMr. Hurwick wire-transfer the Intrust funds held by Intercounty, but he failed to doso, even after Mr. Capriotti assured Mr. Bertacchi that he would direct Mr. Hurwickto transfer the funds.

On September 15, 1999, the OBRE issued a corrective action order to Intrust toterminate the escrow agreement with Intercounty and take control of the trust assets. At a September 30, 1999, board meeting, Mr. Capriotti assured the Intrust board ofdirectors that its funds were in no danger due to the fact that Intercounty wasaudited not only by its own auditors but by the title insurance company and theirreinsurer, who in turn was audited by the Illinois Department of FinancialInstitutions. The Intrust board sent a letter to the OBRE stating that the transferof the funds to Intrust would take place no later than October 15, 1999.

The OBRE officials attended the November 9, 1999, Intrust board meeting. Mr.Capriotti stated that he would direct LaSalle bank to send the OBRE copies of thesignature card and bank statements for the previous six months. He also stated thathe would see to it that the segregated escrow account was closed, and the Intrustdeposits returned to Intrust by November 20, 1999. At a November 17, 1999, meetingwith the OBRE, Mr. Capriotti reiterated that the account would be closed and thefunds transferred that day.

In December 1999, Mr. Capriotti sent the OBRE a signature card, signed byMessrs. Hurwick, Bertacchi, Capriotti for an account at LaSalle Bank in the name ofIntrust as Trustee. The OBRE also received a copy of a corporate resolution whichpurported to inform LaSalle Bank as to the signatory authority over the aboveaccount. Included was a note stating that Messrs. Capriotti and Hargrove would beworking with LaSalle Bank to address the remaining questions concerning the escrowaccount. Although Mr. Hurwick had signed the resolution, he held no position atIntrust.

By the beginning of 2000, the funds had still not been transferred. Mr.Capriotti blamed the delay on problems encountered in opening the new account atLaSalle Bank. Mr. Capriotti assured the OBRE that Intrust had no problems and thatthe transfer delay was due to the unavailability of Intrust's president.

In January 2000, in a tape-recorded conversation, Messrs. Capriotti and Hargroveinstructed Mr. Bertacchi to deposit more Intrust funds into the segregated escrowaccount. However, after Mr. Bertacchi threatened to resign, no transfer took place. On February 4, 2000, Mr. Hurwick wrote to Mr. Bertacchi advising him that, as ofDecember 31, 1999, Intercounty was holding $67,817,367.99 in funds belonging toIntrust. On that same date, Mr. Capriotti told the OBRE that Mr. Hurwick had beenthe assistant treasurer of Intrust for two years, although Intrust had never employedMr. Hurwick.

At the time Intrust was placed into receivership, there were no funds in thesegregated escrow account. After reviewing and analyzing the relevant Intrust,Intercounty and bank records, Patricia Tilton, a principal with PWC, concluded thatthe Intercounty monthly statements to Intrust had falsely reported to Intrust thebalances that were actually in the escrow accounts and that the escrow accountsactually held far less money. According to her affidavit, in most instances,Intercounty's monthly statements overestimated the amount of escrow funds being heldby Intercounty by tens of millions of dollars.

Initially, the defendants responded to the complaint by filing demands for billsof particulars and moving for a more definite statement. After those motions weredenied, the defendants filed motions to dismiss pursuant to section 2-615 of the Codeof Civil Procedure (the Code) (735 ILCS 5/2-615 (West 2000)). After the denial ofthe motions to dismiss, the corporate defendants filed a "statement in lieu ofanswer" reiterating that they could not answer the complaint in its present form. Messrs. Hargrove and Capriotti filed answers asserting their fifth amendmentprivilege against self-incrimination.

Intrust filed separate motions for summary judgment against the corporatedefendants, Mr. Hurwick, and Messrs. Capriotti and Hargrove.

On February 27, 2001, the circuit court granted summary judgment in the amountof $68.1 million on count I (breach of contract) and on count II (fraud) in favor ofIntrust and against the corporate defendants. On July 31, 2001, the circuit courtentered summary judgment in the amount of $68.1 million in favor of Intrust on countsIII and IV (breach of fiduciary duty) and against Messrs. Hargrove and Capriotti andon count II against Mr. Capriotti (fraud).

This timely appeal followed.

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The defendants contend that the circuit court's granting of Intrust's motionsfor summary judgment was erroneous.

This court reviews motions for summary judgment de novo. Travelers InsuranceCo. v. Eljer Manufacturing, Inc., 197 Ill. 2d 278, 292, 757 N.E.2d 481 (2001).

We are aware that in Luu v. Kim, 323 Ill. App. 3d 946, 752 N.E.2d 547 (2001),another panel of this court, while stating that summary judgment is reviewed de novo,nonetheless went on to state that the granting of summary judgment would be reversedonly upon an abuse of discretion. Luu, 323 Ill. App. 3d at 952. To the extent thatLuu holds that the abuse of discretion standard applies to review of the granting ofsummary judgment, it is an incorrect statement of the law and should not be followed. See Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 607N.E.2d 691 (1992).

Summary judgment is appropriate when there are no genuine issues of materialfact and the moving party is entitled to judgment as a matter of law. OutboardMarine Corp., 154 Ill. 2d at 102. In determining whether a genuine issue of materialfact exists, a court must construe the pleadings, admissions and affidavits strictlyagainst the movant and liberally in favor of the opponent. Gilbert v. SycamoreMunicipal Hospital, 156 Ill. 2d 511, 518, 622 N.E.2d 788 (1993).

The defendants contend that the circuit court erred when it denied theirevidentiary challenges to the motions for summary judgment and that genuine issues ofmaterial fact existed which required that the summary judgment motions be denied.

The defendants acknowledge that they did not obtain a ruling from the circuitcourt on their challenges to the affidavits filed in support of Intrust's motions forsummary judgment. The defendants maintain, however, that the circuit court ignoredtheir challenges to the affidavits when granting the motions for summary judgment. "When a party moves to strike an affidavit filedin summary judgment proceedings, it is that party's duty to bring his motion to theattention of the trial court and to get a ruling on the motion. Failure to obtainsuch a ruling will operate as a waiver of the objections to the affidavit.[Citation.]" Woolums v. Huss, 323 Ill. App. 3d 628, 633, 752 N.E.2d 1219 (2001).

However, in considering whether to grant a motion for summary judgment, thecircuit court must determine the sufficiency of the affidavits, even in the absenceof a motion challenging the affidavits. See Jackson v. Graham, 323 Ill. App. 3d 766,774, 753 N.E.2d 525 (2001) (although evidentiary rulings are usually reviewed underan abuse of discretion standard, the granting of a motion to strike an affidavit asinsufficient made in conjunction with a motion for summary judgment would be reviewedde novo).

Since our determination of whether summary judgment was properly granted in thiscase requires that we review the sufficiency of the affidavits, we will address thechallenges raised by the defendants.

The defendants argue that the circuit court erred when it failed to grant theirmotions seeking to strike portions of the affidavit of James Binkowski and to strikethe affidavit of Mark Vogel; the affidavit of Michael Morehead, together with certainattached documents; certain attachments to Intrust's motion for summary judgmentagainst the corporate defendants; and related portions of other affidavits.

The defendants challenge Mr. Vogel's and Mr. Binkowski's affidavits on the basisthat they were insufficient to authenticate certain records offered in support of thesummary judgment motions.

For the admission of a business record, only proof that the records were made inthe regular course of business and that it was in the regular course of business toprepare such records is necessary. People v. Hagan, 199 Ill. App. 3d 267, 287, 556N.E. 2d 1224 (1990), aff'd, 145 Ill. 2d 287, 583 N.E.2d 494 (1991) (witness'stestimony that she did not know how the record keeping worked and that the recordsonly looked like they came from the bank she worked for was sufficient to establishadmission of bank records). The Vogel and Binkowski affidavits satisfied thoserequirements.

The defendants also challenge the affidavits of Joy Hall, an Intrust employee,and Michel Morehead, an OBRE attorney, as insufficient to authenticate certaindocuments. However, Ms. Hall's affidavit stated that she was familiar with thedocuments Intrust generated and that the documents she was authenticating were thetypes of records retained or generated as a normal part of Intrust's business.

Ms. Hall's affidavit also referred to documents that were sent to Intrust byIntercounty. Mr. Morehead's affidavit stated only that he received certain documentsfrom Mr. Hurwick at Intercounty in response to a subpoena. These documents wereadmissible as an admission of a party opponent. Danville Polyclinic, Ltd. v.Dethmers, 260 Ill. App. 3d 108, 114, 631 N.E.2d 842 (1994).

The defendants then challenge the affidavits of Ms. Tilton, of PWC, and Mr.Binkowski on the basis that their affidavits offered opinion testimony, althoughneither of them had been disclosed as an opinion witness in violation of SupremeCourt Rule 213(g) (Official Reports Advance Sheet No. 8 (April 17, 2002), R. 213,eff. July 1, 2002).

Since the defendants' challenge is based upon a violation of a supreme courtrule and not the sufficiency of the affidavits, the defendants' failure to secure aruling by the trial court waives the issue. Woolums, 323 Ill. App. 3d at 633.

In support of the summary judgment motions, Intrust submitted tape recordingsand transcripts of the tapes of telephone conversations of Messrs. Hargrove,Capriotti, Bertacchi and Hurwick.

Messrs. Hargrove and Capriotti contend that the circuit court should havesuppressed the tape recordings since they were obtained in violation of theeavesdropping statute. Intrust responds that the undisputed evidence establishedthat Messrs. Hargrove and Capriotti consented to the taping of their telephoneconversations.

In Illinois, the eavesdropping statute provides that a person commitseavesdropping when he:

"[u]ses an eavesdropping device to hear or record all or any part of anyconversation unless he does so (1) with the consent of all of the parties tosuch conversation." 720 ILCS 5/14-2(a) (West 1998).

Effective December 15, 1994, section 14-1(d) of the eavesdropping statutedefined "'conversation'" as "'any oral communication between 2 or more personsregardless of whether one or more of the parties intended their communication to beof a private nature under circumstances justifying that expectation.'" People v.Nestrock, 316 Ill. App. 3d 1, 7, 735 N.E.2d 1101 (2000), quoting 720 ILCS 5/14-1(d)(West 1996). Evidence obtained in violation of the statute is inadmissible in anycivil or criminal trial, with the sole exception of trials for a person charged withviolating the eavesdropping statute. Nestrock, 316 Ill. App. 3d at 7; 720 ILCS 5/14-5 (West 1998).

Prior to the proceedings on the motions for summary judgment, Messrs. Hargroveand Capriotti filed motions to preclude the admission of the tape and the tapetranscripts pursuant to section 14-5 of the Criminal Code of 1961 (720 ILCS 5/14-5(West 2000)), supported by their affidavits. In his affidavit, Mr. Hargrove deniedthat he had consented to the taping of any of his telephone calls to or from Intrustand that he was unaware that any of his calls had been tape-recorded. He statedthat, while he was aware of the taping system at Intrust in which a recorded call waspreceded by an announcement to that effect, private lines, which were answered eitherby the person to whom the call was directed or directed to voice mail, were not partof the taping system. In his affidavit, Mr. Capriotti stated that he was unawarethat any of his conversations with Mr. Hargrove or Mr. Bertacchi were being recordedand that he never consented to the recording of those conversations.

In response, Intrust submitted the affidavit of Mr. Bertacchi and the affidavitand deposition testimony of James Jurewiez, an Intrust vice-president in charge oftechnology. According to these affidavits, in 1996, Intrust's board of directors,which included Messrs. Hargrove and Capriotti, sought and approved a new tapingsystem which would record most, if not all, telephone calls. In his deposition, Mr.Jurewicz stated, that prior to the recording of the telephone conversations admittedin this case, he had told Mr. Capriotti that all of Intrust's telephone lines wererecorded. Even though there were private lines that were answered by the personreceiving the call or by voice mail, the private lines were all part of the tapingsystem.

It is the function of the trial court to determine the admissibility ofevidence, and its rulings will not be disturbed absent an abuse of discretion. People v. Buss, 187 Ill. 2d 144, 219, 718 N.E.2d 1 (1999). Here, however, thecircuit court did not conduct an evidentiary hearing but decided the issue based uponthe affidavits and the arguments of counsel. When the trial court makes itsdetermination based upon documentary submissions only, credibility is not a factorand, on review, we have before us all that was before the trial court. Stojkovich v.Monadnock Building, 281 Ill. App. 3d 733, 743, 666 N.E.2d 704 (1996). When the onlyquestion before the court is the legal conclusion to be drawn from a given set offacts, and the credibility of the witnesses is not in issue, review of the trialcourt's holding is de novo. Stojkowich, 281 Ill. App. 3d at 743.

Intrust argues that undisputed evidence establishes that Messrs. Hargrove andCapriotti knew that all calls into and from the telephones at Intrust were recordedunder the taping system installed in 1996, and, therefore, they consented to therecording of their telephone conversations. See People v. Jenkins, 128 Ill. App. 3d853, 858, 471 N.E.2d 647 (1984) (where the victim could observe a police officerlistening on an extension telephone, she "consented" to his act of listening to herconversation with the defendant).⁽⁴⁾ The affidavit and deposition evidence didnot set forth a "given set of facts." Rather, the competing affidavits raised a factquestion as to whether Messrs. Hargrove and Capriotti were aware that their callswere being taped and placed the credibility of all of the affiants at issue.

In light of the fact that the evidence was disputed as to whether Messrs.Hargrove and Capriotti consented to the taping of their conversations, we concludethat the circuit court erred in denying their motions to preclude admission of thetape recordings and the tape transcript without an evidentiary hearing.

Messrs. Hargrove and Capriotti maintain that their assertion of the privilegeagainst self-incrimination cannot be a basis for liability in this case.

In granting the motion for summary judgment, Judge Hall stated as follows:

"Now, secondly, with respect to the question of adverse inferences thatmight be drawn from the plea of the Fifth Amendment in a civil case, the Courtbelieves that it can draw those adverse inferences to the extent it might needto do so in this summary judgment context.

The Court believes however that there is evidence of a breach of fiduciaryduty that is not reliance on drawing adverse inferences from a plea of theFifth Amendment."

The fifth amendment does not prohibit an adverse inference against civillitigants who refuse to testify in response to probative evidence against them. Gabriel v. Columbia National Bank of Chicago, 228 Ill. App. 3d 240, 246, 592 N.E.2d556 (1992).

In Gabriel, the court held that it was a violation of the defendant'sconstitutional right against self-incrimination to grant judgment on the pleadingsfor the defendant's invocation of the privilege in her answer to the complaint. Gabriel, 228 Ill. App. 3d at 248. The court relied on National Acceptance Co. ofAmerica v. Bathalter, 705 F.2d 924 (7th Cir. 1983), in which the court held that"'even in a civil case, a judgment imposing liability cannot rest solely upon aprivileged refusal to admit or deny at the pleading stage. We conclude thatdefendant's claim of privilege should not have been deemed an admission, and thatplaintiff should have been put to its proof, either by way of evidentiary support fora motion for summary judgment or at trial.'" Gabriel, 228 Ill. App. 3d at 247,quoting Bathalter, 705 F.2d at 932.

In the context of a summary judgment motion, the court must construe thepleadings, admissions, and affidavits strictly against the movant and liberally infavor of the opponent. Gilbert, 156 Ill. 2d at 518. While the circuit court coulddraw a negative inference from the assertion of the privilege at this stage of theproceeding, it could only grant summary judgment if there was evidentiary support ofthe motion as well.⁽⁵⁾ See LaSalle Bank Lake View v. Seguban, 54 F.3d 387 (7th Cir.1995) (in a summary judgment proceeding, the admission the assertion of the privilegeagainst self-incrimination does not lead directly and without more to the entry ofsummary judgment but merely establishes the factual basis from which summary judgmentanalysis will proceed).

Therefore, in our review of the granting of the motions for summary judgment, wemust determine whether there was sufficient evidentiary support for the motions forsummary judgment in addition to the assertion of the privilege against self-incrimination.

All of the defendants contend that issues of material fact precluded thegranting of summary judgment in this case. In light of our prior determinations inthis case, we must decide if the granting of the summary judgments as to Messrs.Hargrove and Capriotti was proper without the tape recording evidence.

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c. Mr. Capriotti

Mr. Capriotti contends that genuine issues of material fact preclude summaryjudgment against him on the fraud and violation of fiduciary duty counts.

Mr. Capriotti contends that summary judgment should not have been granted inthis case because fraudulent intent is normally a question of fact. However, wherethe evidence of intent to defraud is unrefuted, summary judgment is appropriate. SeeHome Savings & Loan Ass'n of Joliet v. Samuel T. Isaac & Associates, Inc., 99 Ill.App. 3d 795, 806, 425 N.E.2d 985 (1981).

Mr. Capriotti maintains that a genuine issue of material fact exists as towhether he made any statements that he knew were false and were intended to induceIntrust to act and that Intrust relied on his statements.

Mr. Capriotti argues, first, that the minutes of the April 23, 1999, Intrustboard meeting are unreliable because of the differences between the minutes and thetranscript of the tape recording of the meeting.

The minutes of the April 23, 1999, Intrust meeting reflect that Mr. Capriottibrought up a review of the custodial trust funds depositories and proposed that $10million be transferred from Intrust to increase the balance at LaSalle Bank account.Over Mr. Bertacchi's objection, the motion passed.

Since we have determined that the tape recordings are not to be considered inour review of the granting of summary judgment, we cannot compare the differencesbetween the written minutes of the April 23, 1999, Intrust board meeting and thetranscript of the tape recording relied on by Mr. Capriotti.

However, we note that Mr. Capriotti signed the minutes he now claims areunreliable. In addition, Mr. Bertacchi's memorandum to Mr. Binkowski that Mr.Capriotti and Mr. Hargrove requested that Intrust funds be transferred to Intercountywas signed by both Mr. Capriotti and Mr. Hargrove.

Next, Mr. Capriotti challenges the reliability of Mr. Bertacchi's affidavit. Heattacks Mr. Bertacchi's credibility by asserting that Mr. Bertacchi had a secretagreement with Intrust's receiver, that Mr. Bertacchi could not recall thecircumstances surrounding the making of his affidavit, that Mr. Bertacchi madeinconsistent statements as to an agreement he reached with the federal government andthat Mr. Bertacchi violated his own fiduciary duty to Intrust by failing to follow uphis request for the return of Intrust's funds. Mr. Capriotti concludes that giventhe factual inconsistencies, he should have been permitted to question Mr. Bertacchibefore a jury.

Other than finding it "incredible" that Mr. Bertacchi did not have an agreementwith Intrust's receiver because Mr. Bertacchi was not sued, Mr. Capriotti offers noevidence indicating the existence of such an agreement. While Mr. Bertacchitestified in his deposition that he had no agreement with the government, he didacknowledge receiving a proffer letter from the government. Taken in context, Mr.Bertacchi's statements did not reflect negatively on his credibility. Mr.Bertacchi's failure to recall the details of the making of the affidavit does notmake its contents less truthful. Finally, Mr. Capriotti fails to provide ameaningful connection between Mr. Bertacchi's alleged breach of fiduciary duty andthe allegations of fraud against Mr. Capriotti.

Next, Mr. Capriotti maintains that there is no evidence that he created a forgedLaSalle Bank statement which was sent to Intrust. He concedes that the document maybe false but that there is no evidence that he was responsible for the fact that itwas false.

According to Mr. Bertacchi's affidavit, at the May 20, 1996, Intrust board ofdirectors meeting, Mr. Capriotti indicated that, in response to the OBRE's directiveregarding the segregation of the Intrust escrow funds, he would have the fundssegregated into a separate fund at LaSalle Bank. On or before June 27, 1997, Mr.Bertacchi spoke with Mr. Capriotti who indicated to him that he would send him a copyof a bank statement for the segregated escrow account. On June 27, 1997, Mr.Bertacchi received a fax from ITI purporting to be a LaSalle Bank statement showing abalance of $54,894,943 in the account. The fax cover sheet stated that it was from"Larry/Susan." The actual amount in the escrow account, as reflected in the May 31,1997, statement to Intercounty, was $45,949.24.

The above evidence, standing by itself, stops short of establishing as a matterof law that Mr. Capriotti knew that the faxed document was forged.

In connection with the $9.2 million that was transferred from Intrust to theescrow account, Mr. Capriotti maintained that the reason for the transfer was toachieve better interest rates. While the stated reason was perhaps an inappropriateone, given that the interest rate was to benefit Messrs. Capriotti and Hargrove,nonetheless, there is no evidence that it was not the reason for the transfer. Therefore, his statements to Mr. Bertacchi in this regard were not false and cannotsupport a claim of fraud. While Mr. Capriotti did assure Mr. Bertacchi that thefunds would be returned to Intrust, there is no evidence establishing that he knewthat the funds would not be returned when he made the statement to Mr. Bertacchi.

Without the tape recordings, the remaining evidence in support of summaryjudgment on the fraud count against Mr. Capriotti, even if considered with anyadverse inferences from Mr. Capriotti's assertion of the privilege against self-incrimination, is insufficient for a determination that, as a matter of law, Mr.Capriotti defrauded Intrust.

We conclude, therefore, summary judgment against Mr. Capriotti on count II ofthe complaint must be reversed.

Mr. Capriotti owed a fiduciary duty to Intrust's account holders. See Banks & Real Estate, 327 Ill. App. 3d at 449-50; Giagnorio, 292 Ill. App. 3d at 325;see also Masi, 779 F.2d at 401. Further, as noted above, in its role as "escrowee"for Intrust, Intercounty was a trustee of both Intercounty and Intrust and owed afiduciary duty to the trust's beneficiaries, in this case, Intrust's accountholders.

Mr. Capriotti contends that, for purposes of summary judgment, Intrust failedto establish that he violated the fiduciary duty he owed to Intrust as a director. He maintains that the evidence failed to establish that he took the money from theescrow, relying on Ms. Tilton's deposition statement that the investigators had notyet reached any conclusions as to who took Intrust's funds or where the funds went.

As was the case with Mr. Hargrove, it was not necessary to establish that Mr.Capriotti took Intrust's funds. In order to prove a breach of fiduciary duty,Intrust was required to establish, as a matter of law, that Mr. Capriotti did notuse his best judgment in connection with the establishment and operation ofIntrust's escrow account and did not act solely in the best interests of Intrust.

According to Gary Irwin, president of Intrust from 1990 to January 1992, Mr.Capriotti instructed him to set up an escrow account, managed and controlled byIntercounty, and to deposit Intrust's funds to be transferred into that account. According to Mr. Bertacchi's affidavit, when the OBRE informed him that Intrust'sfunds needed to be segregated from Intercounty's funds and controlled by Intrust, itwas Mr. Capriotti who assumed responsibility for meeting OBRE's requirements. However, Mr. Bertacchi's affidavit further establishes that Mr. Capriotti delayedthe transfer of Intrust's funds into the segregated account, to be controlled byIntrust, for a substantial period of time.

The undisputed fact is that the Intrust's money is missing, and even if Mr.Capriotti did not take the money himself, the evidence established that his lack ofdiligence in segregating Intrust's funds from Intercounty's funds, despite thewarnings and orders of the OBRE, was not in the best interest of the accountholders.

We further conclude that the above evidence established, as a matter of law,Mr. Capriotti's personal liability for Intercounty's breach of fiduciaryrelationship as alleged in count IV.

Unlike Mr. Hargrove, the evidence established that Mr. Capriotti assumedresponsibility for the escrow account, but he failed to act to insure the securityof Intrust's funds by delaying compliance with OBRE's requirements for segregatingIntrust's funds and failed to act when Intrust's funds were not repaid. In short,the evidence establishes that Mr. Capriotti was directly and personally involved inIntercounty's breach of its fiduciary relationship to Intrust.

We conclude that the evidence establishes as a matter of law that Mr. Capriottibreached his fiduciary duties as a director of Intrust and that he participated inIntercounty's breach of its fiduciary duty to Intrust. Therefore, the circuit courtdid not err in granting summary judgment to Intrust as to Mr. Capriotti on countsIII and IV of the complaint.⁽⁶⁾

In summary, we vacate the circuit court's order denying suppression of thetape recordings and the tape transcripts and remand for an evidentiary hearing todetermine the admissibility of the tapes and the transcripts. We affirm thegranting of summary judgment to Intrust as to the corporate defendants on the breachof contract and fraud counts of the complaint, but we vacate the damage awards madeon those counts and remand to the circuit court for Intrust to make an election onwhich count damages are to be awarded.⁽⁷⁾ We reverse the granting of summary judgmentto Intrust as to Mr. Hargrove on the breach of fiduciary duty counts.⁽⁸⁾ We reversethe granting of summary judgment to Intrust as to Mr. Capriotti on the fraud count. We affirm the grant of summary judgment to Intrust as to Mr. Capriotti as to thebreach of fiduciary duty counts.

Finally, we wish to reiterate that, at this stage of the proceedings, thecircuit court may not draw any adverse inferences from Messrs. Hargrove's andCapriotti's assertion of the privilege against self-incrimination.

The judgment of the circuit court is vacated in part, reversed in part,affirmed in part and remanded with directions.

Vacated in part and reversed in part and affirmed in part; cause remandedwith directions.

HOFFMAN, P.J., and SOUTH, J., concur.

1. Prior to a change of name in 1997, Wholesale Real Estate Services, Inc., wasknown as Intercounty Title Company.

2. In their appellant brief, Mr. Hargrove and the corporate defendants statethat Mr. Hurwick died on May 12, 2002.

3. The Office of Banks and Real Estate.

4. While Jenkins was decided prior to the 1994 amendment, we find that itsdiscussion of what constitutes "consent" is still relevant.

5. In the context of standing in a forfeiture action, our supreme court has heldthat a claimant asserting the privilege against self-incrimination may suffer anadverse inference in the context of a motion attacking his standing. People v.$1,124,905 U.S. Currency & One 1988 Chevrolet Astro Van, 177 Ill. 2d 314, 685 N.E.2d1370 (1997).

6. We note that in connection with the fiduciary duty counts, the circuit courtspecifically stated that it did not need to draw any adverse inferences based uponthe assertion of the privilege against self-incrimination in light of the otherevidence on those counts.

7. Analysis is contained in the nonpublished portion of thisopinion.

8. Analysis is contained in the nonpublished portion of thisopinion.