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Kugler v. Southmark Realty Partners III

Case Date: 12/14/1999
Court: 1st District Appellate
Docket No: 1-98-2982

Kugler v. Southmark Realty Partners III, No. 1-98-2982

1st District, December 14, 1999

SECOND DIVISION

GEORGE and JOY KUGLER, ALBERT and JANET FLEUCHAUS, ROGER and MARY KAMPSCHROER, SANG KI and HELEN LEE, ERNEST and HARRIET LOBERG, EDWARD and VIRGINIA MANN, JAMES and CHARLOTTE NALLEN, JERRY and BARBARA NEUMANN, RICHARD and THERESA BARTOSZEWSKI, FRANK LEIFEL, EDWARD and ROSE WESKERNA, and ELIZABETH PAINTIN, on Behalf of Themselves and All Others Similarly Situated, and MARTHAS HESS, et al.,

Plaintiffs-Appellees,

v.

SOUTHMARK REALTY PARTNERS III, a California Limited Partnership, n/k/a McNeil Real Estate Fund XXIII, McNeil Partners, L.P., a Delaware Partnership, and SOUTHMARK INVESTMENT PARTNERSHIP 85, a Nevada Corporation,

Defendants-Appellants

(I.R.E. Real Estate Income Fund, a Florida Limited Partnership and BFC Financial Corporation, a Florida Corporation, as its Successor in Interest, I.R.E. Real Estate Income Advisors Corporation, Alan B. Levan, Susan C. Peristein, and Frank V. Grieco;

I.R.E. Pension Investors II, Ltd., a Florida Limited Partnership, I.R.E. Pension Advisors Corporation, Alan B. Levan, Susan C. Peristein and Frank V. Grieco;

I.R.E. Real Estate Growth Fund, Ltd., Series 29, a Florida Limited Partnership, I.R.E. Advisors Series 29 Corporation, and I.R.E. Series 29 Associates, Ltd.;

I.R.E. Real Estate Growth Fund, Ltd., Series 28, a Florida Limited Partnership, I.R.E. Advisors Series 28 Corporation, Alan B. Levan, Susan C. Peristein, and Frank V.

Grieco;

Hallwood Income Real Estate Investors A, a Delaware Limited Partnership, as the Successor in Interest to Equitec Real Estate Investors Fund A, and its General Partner Hallwood Realty Partners, L.P., a Delaware Limited Partnership;

Southmark Equity Partners II, a California Limited Partnership, n/k/a McNeil Real Estate Fund XXV, Equity Partners, a Texas Partnership, and McNeil Partners, L.P., a Delaware Partnership;

Southmark Realty Partners II, a California Limited

 APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY,

Nos. 88-CH-4670, 89-CH-4117 (CONSOLIDATED)

THE HONORABLE THOMAS A. HETT, JUDGE PRESIDING.

PRESIDING JUSTICE COUSINS delivered the opinion of the court:

A consolidated complaint was filed against several entities, including the limited partnership of Southmark Realty Partners III, Ltd. (SRP III), and SRP III's general partner, Southmark PS, Inc. (SPS), formerly known as Southmark Investment Group 85, Inc. (SIG 85). Therein, class representatives (plaintiffs) sought to rescind their purchases of limited partnership interests in SRP III. Upon plaintiffs' motion, the circuit court entered summary judgment in plaintiffs' favor on the issue of liability. Thereafter, plaintiffs filed a motion seeking to set the amount of judgment against SPS(1) on the claim for which they had been granted summary judgment. The circuit court granted plaintiffs' motion, entering an order against SPS in the amount of $902,759.48. The judgment was later modified to $902,745.98 upon SPS's motion for reconsideration. SPS appeals, contending the circuit court erred: (1) in entering judgment in plaintiffs' favor where the evidence submitted by plaintiffs as to damages was inadmissible and insufficient; and (2) in refusing to deduct accrued interest from the judgment where two members of the class sold their interests in SRP III prior to the entry of judgment.

For the reasons that follow, we affirm.

BACKGROUND

On May 20, 1988, class representatives, on behalf of hundreds of individuals who purchased an interest in several limited partnerships during the years of 1985 and 1986, filed a class action suit for securities rescission in the circuit court of Cook County against 16 defendants who used the services of unregistered brokers in violation of the Illinois Securities Law of 1953 (the Securities Law) (Ill. Rev. Stat. 1985, ch. 121