author: JUSTICE REINHARD

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. RONALD H. JANIS, Defendant-Appellant.
    Second District
    No. 2—88—0558
    Opinion filed May 17, 1989.
    Rehearing denied June 16, 1989.

      Kenneth D. Hubbard, of Joseph M. Laraia & Associates, P.C., of Wheaton (Joseph M. Laraia, of counsel), for appellant.
    James E. Ryan, State’s Attorney, of Wheaton, and Eleesha Pastor O’Neill, of Chicago (William L. Browers, of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
   JUSTICE REINHARD

delivered the opinion of the court:

Defendant, Ronald H. Janis, was found guilty by a jury in the circuit court of Du Page County of possession of a motor vehicle having a vehicle identification number (VTN) removed (Ill. Rev. Stat. 1985, ch. 951/2, par. 4 — 103(a)(4)) and possession of a stolen motor vehicle (Ill. Rev. Stat. 1985, ch. 951/2, par. 4— 103(a)(1)), and was sentenced on the possession of a stolen motor vehicle conviction only to a 24-month term of probation, a $500 fine, and ordered to pay $1,500 restitution.

Defendant raises numerous issues for review; however, dispositive of this appeal is defendant’s contention that the circuit court erred in denying his motion to suppress evidence.

Defendant filed a motion to suppress evidence, contending that Villa Park police officers entered upon his private property without a warrant and unlawfully seized a truck parked on the premises. At the suppression hearing, defendant testified that he owns and operates a plumbing business (Home Plumbing) located at 223-25 West St. Charles Road, in Villa Park, Illinois. According to defendant, there is a gravel area immediately in back of his business which is used only to store various equipment, pipe, and trucks associated with his plumbing business. No one has permission to be in this area after the business is closed. Access to the gravel area is by way of a private driveway, which defendant apparently owns, located behind the business and about 40 feet from the gravel area. The driveway is used by Home Plumbing vehicles, by the tenants of a house on defendant's property located to the rear of the business, and occasionally by kids parking there. According to defendant, the tenants did not have permission to use the gravel area behind the business, but did have access to it. St. Charles Road runs in front of the business where there is parking for customers. Michigan Avenue runs immediately to the west of defendant’s property off of which runs the private driveway. The plumbing shop is located approximately 100 feet from the intersection of St. Charles Road and Michigan Avenue.

On cross-examination, defendant stated that his plumbing business is located in a small commercial area and is between several other retail businesses, a golf store and a ceramic tile store. Although there is a fence that partially separates the gravel area behind defendant’s business from the property to the west, it is generally accessible from the private driveway. Defendant stated that he would not mind if the golf store used his gravel area and that he was aware that the golf store occasionally received deliveries through the gravel area behind his business. At that point the circuit court sua sponte terminated the questioning and, after defendant’s counsel stated there were no other witnesses, indicated that there was a question whether the State had to go forward in view of the insufficiency of defendant’s evidence. After hearing arguments of defendant’s counsel, the court ruled that defendant had not demonstrated any reasonable expectation of privacy, that the area where the truck was parked was a common area, and that there was insufficient evidence to shift the-burden of going forward to the State. The motion to suppress was denied.

The following facts were adduced at defendant’s trial. Officer Robert Deevey of the Villa Park police department testified that he was on duty on December 2, 1986, and was dispatched at around 7:30 p.m. to the area of 225 West St. Charles Road to check for a stolen or abandoned vehicle. Upon arriving, Officer Deevey went to the rear of the building and observed two pickup trucks. One was white with no license plates, and the other was a newer model beige truck with no bed and no hood, but it had license plates on it which were registered to Home Plumbing on a 1975 pickup truck. The officer then observed an emission control sticker on the front of the engine compartment of the beige truck which indicated that the engine was manufactured in 1977 or later.

Following his initial investigation, the officer returned to the gravel area behind defendant’s plumbing shop and ascertained the number of cylinders and the series number of the beige pickup truck. The officer then returned to the police station and telephoned defendant. Defendant indicated to Officer Deevey that he had owned the beige pickup for about five years. Prior to Officer Deevey going back a third time to the gravel area, defendant telephoned the police station and told Officer Deevey that he knew nothing about the beige pickup truck and that it must be stolen because it did not belong to him.

Deevey returned a third time to the gravel area, accompanied by two other officers. On that third visit, the officers opened the door of the beige truck and discovered that the VEN plate had been replaced. The officers then towed the pickup truck to the city pound, where a subsequent search of the cab revealed a sheet with a VIN. A computer check of that VIN indicated that it belonged on a stolen vehicle. The evidence established that the cab, doors, and frame of the beige pickup truck were stolen.

The testimony of defendant and a defense witness indicated that defendant had received delivery of various truck parts, including a cab, doors, and frame, from “Rollie Johnson Auto Parts” and that the parts were paid for. Handwritten receipts purported to be from Rollie Johnson Auto Parts were introduced into evidence. Defendant denied knowing the various parts were stolen. Neither Rollie Johnson nor any representative of Rollie Johnson Auto Parts testified.

Defendant raises numerous contentions regarding the trial court’s denial of his motion to suppress. Essentially, he first contends that there was governmental conduct, thereby implicating the fourth amendment. Second, he maintains that he had a reasonable expectation of privacy in the area behind his plumbing shop where the beige truck was parked. Third, he argues that no exceptions to the warrant requirement exist in this case. Finally, he posits that he is the owner of the property searched and seized; therefore, he has standing to assert a fourth amendment claim.

The State responds initially that defendant had no reasonable expectation of privacy in the area where the beige truck was located. The State further argues that the opening of the truck’s door to examine the VIN without a search warrant was reasonable under the fourth amendment. In this regard, the State maintains that it was not an unreasonable search under these circumstances for Officer Deevey to have examined the VIN in an attempt to identify the owner of the vehicle.

The narrow issue we must decide in this case is whether the defendant had a reasonable expectation of privacy in the gravel area immediately behind his commercial business which he used for purposes related to his business. A warrantless search and seizure would only violate the fourth amendment if the defendant manifested a subjective expectation of privacy in the area searched or the property seized that society accepts as objectively reasonable. California v. Greenwood (1988), 486 U.S. 35, 39, 100 L. Ed. 2d 30, 36, 108 S. Ct. 1625, 1628; Katz v. United States (1967), 389 U.S. 347, 19 L. Ed. 2d 576, 88 S. Ct. 507.

No single factor determines whether an individual legitimately may claim under the fourth amendment that a place should be free from unauthorized, warrantless governmental intrusions. (Oliver v. United States (1984), 466 U.S. 170, 177, 80 L. Ed. 2d 214, 223, 104 S. Ct. 1735, 1741.) In determining the degree to which a search infringes upon individual privacy, the Court has looked to such factors as the intent behind the fourth amendment, the uses to which an individual has put a location, and society’s understanding that certain areas deserve the most scrupulous protection from governmental invasion. Oliver, 466 U.S. at 178, 80 L. Ed. 2d at 223-24, 104 S. Ct. at 1741.

In applying these principles, we first recognize that the fourth amendment has historically protected business or commercial buildings, in which there may be legitimate expectations of privacy. (Oliver, 466 U.S. at 178 n.8, 80 L. Ed. 2d at 224 n.8, 104 S. Ct. at 1741 n.8; see People v. Gardner (1984), 121 Ill. App. 3d 464, 468, 459 N.E.2d 676; see generally 1 W. LaFave, Search & Seizure §2.4(b), at 429 (2d ed. 1987).) A businessman, like the occupant of a home, has a constitutional right to conduct his business free from unreasonable governmental entries upon his private commercial property. (Dow Chemical Co. v. United States (1986), 476 U.S. 227, 237, 90 L. Ed. 2d 226, 237, 106 S. Ct. 1819, 1825-26, citing See v. City of Seattle (1967), 387 U.S. 541, 543, 18 L. Ed. 2d 943, 946, 87 S. Ct. 1737, 1739.) Further, we note that although the area surrounding a business is not constitutionally equated with the curtilage of the home for purposes of aerial surveillance, the Supreme Court has not distinguished the two where there has been an actual physical entry onto the premises. Dow Chemical Co., 476 U.S. at 237-39, 90 L. Ed. 2d at 237-38, 106 S. Ct. at 1825-27; see 1 W. LaFave, Search & Seizure §2.4(c), at 436-37 (1987).

We also look to the uses to which defendant put the property in which he claims a protected privacy right. The gravel area was located immediately behind his plumbing shop and was used only for purposes associated with defendant’s plumbing business. Defendant testified that he stored pipe, air compressors, a pump and business vehicles not currently in use. It is not an area open to the public for parking or other general use, and no one had permission to be in the area after the business was closed. (Cf. People v. Caserta (1984), 123 Ill. App. 3d 608, 463 N.E.2d 190 (parking lot adjacent to commercial establishment open to the public is not subject to fourth amendment protection).) Rather, it is an area directly behind his business which was not accessible to the public and was utilized primarily as a storage area for the business. There is no doubt that this area is intimately related to defendant’s plumbing shop and business.

We further consider whether society recognizes this type of area to be deserving of the most scrupulous protection from governmental intrusion. While we find no Supreme Court or Illinois court decision directly on point, we think language in Dow Chemical Co. is particularly instructive. In Dow Chemical Co., the Court noted that, unlike an aerial surveillance, an actual physical entry upon private commercial property would raise significant constitutional questions. (Dow Chemical Co., 476 U.S. at 237, 90 L. Ed. 2d at 237, 106 S. Ct. at 1826.) Moreover, the Court was careful to limit its holding to an aerial surveillance and stated in a footnote that it was not addressing the issue of actual physical entry onto business premises. (Dow Chemical Co., 476 U.S. at 239 n.7, 90 L. Ed. 2d at 238 n.7, 106 S. Ct. at 1827 n.7.) The area under consideration in Dow Chemical Co. was open area between structures and buildings of a manufacturing plant, not a commercial enterprise or business.

Additionally, the United States Court of Appeals for the Seventh Circuit has held that a business owner has a legitimate expectation of privacy in an area located outside of but immediately adjacent to his automobile repair shop which was used as part of the business enterprise. (United States v. Swart (7th Cir. 1982), 679 E2d 698.) In so holding, the Seventh Circuit emphasized that a warrant is necessary to search portions of a commercial premises not open to the public and that there is no reduced expectation of privacy on business premises when the agents do not see items as a customer would ordinarily see them. (Swart, 679 F.2d at 701.) Furthermore, the Swart court noted that there was no evidence that the area searched was generally open to the public. Swart, 679 F.2d at 701.

In light of Dow Chemical Co. and Swart, we conclude that society does recognize that the area immediately adjacent to a commercial premises which is not open to the public and which is used for purposes related to the commercial enterprise is a constitutionally protected area. Here, the gravel area upon which Officer Deevey entered without a warrant was not open to the public and was used as a storage area directly related to defendant’s plumbing business. As such, we hold that defendant did have a reasonable expectation of privacy in the gravel area in which the pickup truck was located.

As further support for our conclusion that defendant had a reasonable expectation of privacy in the gravel area, we believe the area may be considered as analogous to the curtilage of a dwelling-house. While we are cognizant of the language in Dow Chemical Co. suggesting that the intimate activities of the home and its curtilage do not reach the areas between manufacturing structures and buildings, we also recognize the Court’s reference to “business curtilage” as discussed in United States v. Swart (7th Cir. 1982), 679 F.2d 698. (Dow Chemical Co., 476 U.S. at 239 n.7, 90 L. Ed. 2d at 238 n.7, 106 S. Ct. at 1827 n.7.) Furthermore, Dow Chemical Co. was concerned with a manufacturing plant rather than a commercial enterprise or business, and, more importantly, the governmental conduct in Dow Chemical Co. involved aerial surveillance rather than an actual physical intrusion. Dow Chemical Co., 476 U.S. at 239, 90 L. Ed. 2d at 238, 106 S. Ct. at 1826.

It is well recognized that the fourth amendment protects the sanctity of a person’s own home (see, e.g., Payton v. New York (1980), 445 U.S. 573, 589-90, 63 L. Ed. 2d 639, 653, 100 S. Ct. 1371, 1381-82), and its curtilage, the land immediately surrounding and associated with the home. (Oliver, 466 U.S. at 180, 80 L. Ed. 2d at 225, 104 S. Ct. at 1742.) On the other hand, an individual may not legitimately demand privacy for activities conducted out of doors in fields, except in the area immediately surrounding the home. (Oliver, 466 U.S. at 178-79, 80 L. Ed. 2d at 224, 104 S. Ct. at 1741.) The special protection accorded by the fourth amendment to the people in their persons, homes, papers, and effects is not extended to the open fields. Hester v. United States (1924), 265 U.S. 57, 59, 68 L. Ed. 898, 900, 44 S. Ct. 445, 446.

While we realize that a home and its curtilage are not precisely the same as a business or commercial building and its immediately surrounding area for purposes of fourth amendment analysis, we cannot ignore the well-established protections afforded the business premises under the fourth amendment. (See Oliver, 466 U.S. at 178 n.8, 80 L. Ed. 2d at 224 n.8, 104 S. Ct. at 1741 n.8; See v. City of Seattle (1967), 387 U.S. 541, 543, 18 L. Ed. 2d 943, 946, 87 S. Ct. 1737, 1739.) Nor are we unaware of the recognized definition of curtilage as being that area intimately associated with a dwelling-house. (Black’s Law Dictionary 346 (5th ed. 1979).) As in the home and its curtilage, certain areas immediately surrounding a business or commercial building are intimately associated with the privacy of the business. Thus, those areas fall within the umbrella of privacy which envelopes the business or commercial building. We are careful to note, however, that there are different degrees of privacy between the home and the business and that our analogy to the home and its curtilage is not intended to alter the already recognized variances in privacy associated with a home and a business.

Although we do not find any cases which define the extent of a “business curtilage,” we are persuaded by the Supreme Court’s recent analysis of what constitutes curtilage of the home. (See United States v. Dunn (1987), 480 U.S. 294, 94 L. Ed. 2d 326, 107 S. Ct. 1134.) In Dunn, the Court stated that the question of what constitutes curtilage should be resolved with particular reference to the proximity of the area claimed to be curtilage to the home, whether the area is within an enclosure surrounding the home, the uses to which the area is put, and the steps taken to protect the area from observation by people passing by. Dunn, 480 U.S. at 301, 94 L. Ed. 2d at 334-35, 107 S. Ct. at 1139.

Applying these factors to this case, we find the gravel area behind defendant’s plumbing shop to be within the “business curtilage.” First, the area was immediately behind and abutted against the plumbing shop. Second, the area was used for storage of equipment and vehicles related to the plumbing business. Defendant generally did not allow public use of the area. Third, defendant testified that the area was not visible from a public way nor was it accessible by public ingress or egress. Although tenants of defendant as well as an occasional delivery person may have viewed the area, it was not open to the public or visible by people passing by on public property. In light of these factors, we do not find the fact that the gravel area was not within an enclosure surrounding the plumbing shop to be of particular importance.

As defendant had a reasonable expectation of privacy in this area of his own business premises, which we also conclude is within the “curtilage” of his plumbing shop, under these circumstances the warrantless physical intrusion by police into that area was not justified under the fourth amendment to the United States Constitution (U.S. Const., amend. IV). When the police make a warrantless seizure from a place where they have no right to observe, even if the object seen is in “plain view” from that location, such a seizure is unreasonable. (See People v. Madison (1988), 121 Ill. 2d 195, 208, 520 N.E.2d 374; People v. Caserta (1984), 123 Ill. App. 3d 608, 612-13, 463 N.E.2d 190.) Defendant, as the owner of the premises, clearly had standing to challenge the search and seizure of evidence which occurred on his premises. Alderman v. United States (1969), 394 U.S. 165, 176-77, 22 L. Ed. 2d 176, 188-89, 89 S. Ct. 961, 968-69; see Rakas v. Illinois (1978), 439 U.S. 128, 143 n.12, 58 L. Ed. 2d 387, 401 n.12, 99 S. Ct. 421, 430 n.12; People v. Johnson (1986), 114 Ill. 2d 170, 191-92, 499 N.E.2d 1355.

Because the circuit court erroneously concluded that defendant had no reasonable expectation of privacy in the area of his business premises where the truck was situated and ruled that the State did not have to present any evidence on the motion to suppress, the defendant’s conviction, which was wholly based upon the evidence sought to be excluded, must be reversed. The State has not advanced any other basis to support the circuit court’s order of suppression, nor has it suggested that remandment for continuation of the suppression hearing would enable it to present evidence which might contradict defendant’s evidence or raise some other theory which might support the warrantless entry upon defendant’s premises and the warrantless search and seizure of the vehicle. Furthermore, we have examined the record of the trial proceedings, and there is nothing in the testimony which would sustain the circuit court’s ruling. See People v. Caballero (1984), 102 Ill. 2d 23, 35-36, 464 N.E.2d 223.

Accordingly, the order denying the motion to suppress is manifestly erroneous (see People v. Reynolds (1983), 94 Ill. 2d 160, 165, 445 N.E.2d 766), and we reverse that order and defendant’s conviction. We further grant the motion to suppress evidence and remand for a new trial (107 Ill. 2d R. 615(b)), although it would appear highly unlikely that the prosecution would choose to proceed to trial without the evidence which has been suppressed. It is therefore unnecessary to address defendant’s remaining contentions.

Reversed and remanded.

NASH and LINDBERG, JJ., concur.


source: Caselaw Access Project

author: JUSTICE KNECHT

license: Public Domain

text:
      In re MARRIAGE OF BARBARA L. ADAMS, Petitioner-Appellant, and CARL VICTOR ADAMS, Respondent-Appellee.
    Fourth District
    No. 4—88—0661
    Opinion filed May 11, 1989.

      Gary J. Stokes, of Georgetown, for appellant.

      William B. McNamara, of Groppi, McNamara & Underhill, of Danville, for appellee.
   JUSTICE KNECHT

delivered the opinion of the court:

The circuit court granted a dissolution of the parties’ marriage on October 2, 1987. On June 7, 1988, the circuit court entered a supplemental order in which it found the dissipation of assets alleged by petitioner, Barbara Adams, was not supported by the evidence. Petitioner alleged respondent misspent a portion of his wages on a weekly basis. The court found respondent, Carl Adams, was not obligated to keep a weekly record of how income from employment was spent. The circuit court also did not find that any improvements made to non-marital property were in issue because petitioner did not present any evidence as to appreciation of respondent’s nonmarital property by virtue of the improvements. Petitioner appeals from the circuit court’s supplemental order.

Petitioner and respondent were married on June 8, 1985. The marriage was dissolved on October 2, 1987. The parties lived together for approximately two years before they were married. A child of Barbara’s from a previous marriage lived with the couple for at least a portion of their marriage. During the course of the marriage, according to Carl, his weekly take-home pay was approximately $417.

Barbara testified she knew both before the marriage and at the beginning of the marriage that Carl drank. Barbara stated for approximately one year before their marriage and approximately three to six months after their marriage, Carl did not visit taverns. According to Carl, for approximately one year prior to their marriage he and Barbara visited bars once every month or two and he went without her “all the time,” then stopped when they were married. Carl said he visited bars only infrequently during the first year of the marriage. Barbara testified that when Carl began frequenting bars during their marriage, he would go every day directly from work at approximately 3:30 p.m., and would not return home until 9:30 p.m. or later. She said Carl also visited bars on weekends, arriving in the morning and staying until closing the next morning. Carl did not dispute this testimony.

Carl and Barbara were separated on three different occasions during the marriage, according to Barbara. Barbara could not remember when they separated first, but did say she had left for one month. Barbara said she again left Carl on a second occasion, for two or three months. Finally, Barbara left Carl in July 1987 on a third occasion and did not return.

The following is a breakdown of Carl’s net income and expenditures during the two years and four months of the marriage:

Respondent’s net income:

approximately $50,040

Respondent’s expenditures:

approximately $450/month for the following: house mortgage payment ($190), electricity, telephone, water, sewer, gas, cable television, garbage collection

$4/week for credit union account

$400/year for real estate taxes

Over $100/year for homeowner’s insurance

$70/week in child support

$2,000 for a trip to Las Vegas with petitioner

$2,500 for a trip to Hawaii with petitioner

$300 to 400 for a trip to Florida without petitioner

$400 for purchase of a pickup truck

$1,200 for house windows

$1,000 to $2,000 for addition to basement of house

Respondent’s expenditures total at least $43,954. Respondent said the couple deposited $2,000 in an individual retirement account but the record does not indicate whether one spouse or both contributed to it. Respondent stated the remainder of his income, $4,986 to $6,086, was used for “this and that.” In clarification, respondent said: “Well, there’s cigarettes, beer, tips.” Respondent later testified: “There’s always something that comes up that takes your money. I got attorney fees, I got child support, different things.”

Barbara was employed throughout the marriage, earning a net income of approximately $110 a week. Barbara also received $82 a week in child support. Among some of her expenditures, Barbara claims the following amounts were spent during the marriage: $1,200 for new windows for Carl’s house, the amount Carl claims he spent on new windows; $400 or $500 for siding on the house; $1,200 for a patio for the house; the cost to paint the garage, which was not given; and $1,350 for paneling and wallpaper in the bedroom and wallpaper in the kitchen. Barbara never claimed she paid for these items except the paint for the garage; she merely stated these amounts were spent during the marriage. Finally, Barbara spent approximately $60 to $65 a week for groceries during the marriage.

The trial court’s supplemental order stated the court did not find dissipation of marital assets by Carl under section 503(d) of the Illinois Marriage and Dissolution of Marriage Act (Act) (Ill. Rev. Stat. 1987, ch. 40, par. 503(d)) and did not allow reimbursement for any contributions to Carl’s nonmarital estate under section 503(c)(2) of the Act (Ill. Rev. Stat. 1987, ch. 40, par. 503(c)(2)). On June 21, 1988, Barbara filed a motion for reconsideration. On August 22, 1988, the circuit court issued its order which denied Barbara’s motion for reconsideration. Barbara filed timely notice of appeal on September 7, 1988.

In, dividing property subsequent to dissolution proceedings, the trial court’s distribution will not be disturbed unless it abused its discretion. (In re Marriage of Zummo (1988), 167 Ill. App. 3d 566, 575, 521 N.E.2d 621, 626-27.) To determine whether the trial court abused its discretion, the reviewing court must ask “whether the trial court acted arbitrarily without the employment of conscientious judgment or exceeded the bounds of reason and ignored recognized principles of law so that substantial injustice resulted.” (In re Marriage of Stone (1987), 155 Ill. App. 3d 62, 75, 507 N.E.2d 900, 908.) Likewise, whether there was dissipation is a question of whether the trial court abused its discretion, and a finding concerning dissipation is an abuse of discretion if it is against the manifest weight of the evidence. In re Marriage of Ryman (1988), 172 Ill. App. 3d 599, 608, 527 N.E.2d 18, 24.

Petitioner claims the question on appeal is purely one of law. In support of her contention, petitioner cites Kensington Steel Corp. v. Industrial Comm’n (1944), 385 Ill. 504, 509, 53 N.E.2d 395, 397, where our supreme court found where facts are not in dispute, their legal effect becomes a matter of law and the rule that the reviewing court may set aside the trial court’s decision only if it was against the manifest weight of the evidence does not apply. In Kensington, the court said the only question was whether the injury the plaintiff sustained arose out of and in the course of his employment, which is a question of fact.

Petitioner also cites Schoenbein v. Board of Trustees (1965), 65 Ill. App. 2d 379, 383, 212 N.E.2d 380, 381-82, which stated the Kensington rule. In Sehoenbein, the court found the only question on appeal was the meaning of the phrase “physically disabled” as used in section 10 — 8—7 of the Illinois Municipal Code (Ill. Rev. Stat. 1961, ch. 24, par. 10 — 8—7). While the determination of whether there was a proper finding in the trial court concerning dissipation involves an analysis of the facts of the case, the applicable standard of review on that issue is whether the trial court abused its discretion. Because the issue concerning contribution involves statutory interpretation, that issue is a question of law, the abuse of discretion standard does not apply, and we will conduct a de novo review of section 503(c) of the Act (Ill. Rev. Stat. 1987, ch. 40, par. 503(c)).

We turn now to the question of whether the trial court abused its discretion by not finding dissipation of marital assets. Section 503(d) of the Act provides in pertinent part:

“In a proceeding for dissolution of marriage or declaration of invalidity of marriage, *** the court shall assign each spouse’s non-marital property to that spouse. It also shall divide the marital property without regard to marital misconduct in just proportions considering all relevant factors, including:
(1) the contribution or dissipation of each party in the acquisition, preservation, or depreciation or appreciation in value, of the marital and non-marital property, including the contribution of a spouse as a homemaker or to the family unit.” Ill. Rev. Stat. 1987, ch. 40, par. 503(d).

It is well settled that dissipation occurs where one spouse uses marital property for his or her own benefit and for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown. (Ryman, 172 Ill. App. 3d at 608, 527 N.E.2d at 24.) Whether a given course of conduct constitutes dissipation depends upon the facts of the individual case. (In re Marriage of Drummond (1987), 156 Ill. App. 3d 672, 683, 509 N.E.2d 707, 715.) The explanation given by the spouse charged with dissipation as to how funds were spent requires the trial court to determine his or her credibility. In re Marriage of Lord (1984), 125 Ill. App. 3d 1, 6, 465 N.E.2d 151, 154.

The spouse charged with dissipation of marital funds has the burden of showing, by clear and specific evidence, how the funds were spent. (In re Marriage of Petrovich (1987), 154 Ill. App. 3d 881, 886, 507 N.E.2d 207, 210.) Likewise, in In re Marriage of Smith (1984), 128 Ill. App. 3d 1017, 1021, 471 N.E.2d 1008, 1013, the court found if expenditures are not documented adequately by the person charged with dissipation, courts generally affirm a finding of dissipation. Furthermore, general and vague statements that funds were spent on marital expenses or to pay bills are inadequate to avoid a finding of dissipation. (Petrovich, 154 Ill. App. 3d at 886, 507 N.E.2d at 210.) In Petrovich, the petitioner gave her husband over $360,000 during the course of their marriage for him to invest. The investments produced $2 million, but soon only $15,000 remained. The husband testified he used some of the funds to pay off certain loans and the mortgage on the marital residence, but he offered no evidence to support his testimony. Furthermore, the husband was unable to explain the losses and could not testify to what stock he invested most of the money in. The court affirmed the trial court’s finding that the funds were dissipated. Petrovich, 154 Ill. App. 3d at 886-87, 507 N.E.2d at 210.

In Smith, much like Petrovich, but unlike the case at bar, the husband could not recall which bills he paid, only that he paid bills. The court affirmed the trial court’s finding that the husband had spent funds improperly and had not accounted for all funds sufficiently. (Smith, 128 Ill. App. 3d at 1022, 471 N.E.2d at 1014.) In In re Marriage of Partyka (1987), 158 Ill. App. 3d 545, 550-51, 511 N.E.2d 676, 680-81, the husband received a $14,000 check from his former employer and testified he paid many bills with it but did not know specifically what he did with the check. He also stated he may have deposited funds from the check into a savings account, or that he could have deposited the funds in two other accounts, and part of the check went toward the purchase of a horse for his children. The court found no clear and specific evidence of how the check was spent and affirmed the trial court’s finding of dissipation. Furthermore, the husband testified $5,000 of another $14,000 check was used to “ ‘live on and pay the bills,’ ” and $3,500 of the check was used “ ‘to keep the marital home going.’ ” The court affirmed the trial court’s finding of dissipation. Partyka, 158 Ill. App. 3d at 551-52, 511 N.E.2d at 681.

The case at bar differs from Petrovich, Smith, and Partyka in two respects. First, we do not have a finding of dissipation, which the Smith court found is generally affirmed absent adequate documentation. Indeed, the documentation here accounts adequately for a vast majority of Carl’s income during the marriage. More importantly, when Carl said his income went to pay bills, he was able to provide a breakdown of monetary figures and specific bills which were paid, unlike the facts in the cases cited.

Petitioner argues the finding in In re Marriage of Hellwig (1981), 100 Ill. App. 3d 452, 462-64, 426 N.E.2d 1087, 1094-96, where the court affirmed the trial court’s finding of dissipation. Although the appellate court found approximately $270,000 of the $415,545 determined dissipated by the trial court was not dissipated, it affirmed the trial court’s award of $50,000 to the wife for the amount the husband dissipated. However, this dissipation occurred after the wife consulted an attorney concerning marital problems and informed the husband of her action. As the court stated in Drummond, funds may be found to have been dissipated only when spent after the marriage is undergoing an irreconcilable breakdown. Drummond, 156 Ill. App. 3d at 683, 509 N.E.2d at 715.

In In re Marriage of Aud (1986), 142 Ill. App. 3d 320, 331, 491 N.E.2d 894, 901, the court found where the husband continued a practice after the marriage had broken down that he had done before the marital breakdown, the use of marital funds for the care of his mother, and his wife did not object to the expenditures when made both before and after the marital breakdown, there was no dissipation of marital funds. Furthermore, in Drummond, we did not find dissipation and in so holding looked at several factors: the money was spent during the marriage but prior to the indication of marital discord; there was no evidence of wilful dissipation; and the husband spent the money on commodities investments in hopes of obtaining a profit. Drummond, 156 Ill. App. 3d at 683-84, 509 N.E.2d at 715.

In the case at bar, we do not know exactly when the marital breakdown began. However, Barbara claims Carl began frequenting bars within three to six months after their marriage began. Carl stated this occurred approximately one year after their marriage. Whenever Carl began frequenting bars, it seems that was when the marital breakdown began. However, Barbara seems to claim that Carl dissipated funds throughout their marriage; she does not limit it to any time period dining the marriage. Significantly, there is no evidence in the record that Barbara objected to Carl’s frequent journeys to taverns, although the record indicates she did not agree with the visits.

Because we cannot speculate but must rely on the record, we find the trial court did not abuse its discretion here where only $4,986 to $6,086, although Barbara claims the figure is over $16,000, of Carl’s net income during the marriage which lasted two years and four months was entirely unaccounted for; indeed, Carl did state that amount was spent on cigarettes, beer, and tips. While some factual situations justify a requirement that a wage earner account for his or her income, as in Smith, we conclude the evidence in the record and the small amount of funds alleged to be dissipated over a period of at least 16 months cannot justify a finding of dissipation.

We turn now to the question of whether the trial court should have considered the contributions made to respondent’s nonmarital estate in the division of the marital property. Section 503(c)(2) of the Act provides:

“(c) Commingled marital and non-marital property shall be treated in the following manner, unless otherwise agreed by the spouses:
***
(2) When one estate of property makes a contribution to another estate of property, or when a spouse contributes personal effort to non-marital property, the contributing estate shall be reimbursed from the estate receiving the contribution notwithstanding any transmutation; provided, that no such reimbursement shall be made with respect to a contribution which is not retraceable by clear and convincing evidence, or was a gift, or, in the case of a contribution of personal effort of a spouse to non-marital property, unless the effort is significant and results in substantial appreciation of the non-marital property. Personal effort of a spouse shall be deemed a contribution by the marital estate. The court may provide for reimbursement out of the marital property to be divided or by imposing a lien against the non-marital property which received the contribution.” Ill. Rev. Stat. 1987, ch. 40, par. 503(c)(2).

Barbara claims contributions in the form of improvements totalling $5,250 were made to Carl’s nonmarital estate, his house, during the marriage. The trial court found the improvements to Carl’s house may constitute contribution to nonmarital property, but the improvements were not an issue in the case because no evidence was presented as to appreciation in value to the nonmarital estate by virtue of the improvements that were made. Barbara claims the trial court misread section 503(c)(2); Barbara claims appreciation in value to the nonmarital estate must be shown only if the contribution is of personal effort. Barbara argues section 503(c)(2) entitles the contributing estate to reimbursement if the contribution can be retraced by clear and convincing evidence. We agree.

Barbara’s claim to contribution raises a question of transmutation. Transmutation is based on the presumption that when the owner of nonmarital property contributes the property to the marital estate, he or she intends to make a gift of the property to the marital estate. (In re Marriage of Olson (1983), 96 Ill. 2d 432, 439, 451 N.E.2d 825, 828.) Transmutation can occur when marital funds are spent to preserve or repair nonmarital assets. In re Marriage of Holman (1984), 122 Ill. App. 3d 1001, 1006, 462 N.E.2d 30, 34.

Section 503(c)(1) provides that when marital funds are contributed to nonmarital property, the nonmarital property retains its classification and the marital funds are transmuted to nonmarital property. (Ill. Rev. Stat. 1987, ch. 40, par. 503(c)(1); In re Marriage of Thornton (1985), 138 Ill. App. 3d 906, 918, 486 N.E.2d 1288, 1296.) To compensate for transmuted contributions, the contributing estate shall be reimbursed from the estate receiving the contribution, notwithstanding any transmutation. (Ill. Rev. Stat. 1987, ch. 40, par. 503(c)(2); Thornton, 138 Ill. App. 3d at 918, 486 N.E.2d 1296.) Reimbursement is made to the contributing estate, not to the contributing spouse. In re Marriage of Morse (1986), 143 Ill. App. 3d 849, 855, 493 N.E.2d 1088, 1092.

In the case before us, Barbara claims improvements were made to Carl’s house during the marriage. The improvements Barbara claims, in her brief, were made to Carl’s house are: $1,700 for new windows and siding; $1,200 for a new patio; $1,350 for paneling and wallpaper for the bedroom and kitchen; and $1,000 to $2,000 for an addition to the basement. Barbara thus claims Carl’s house received $5,250 in marital contributions. Barbara claims she should be reimbursed the entire value of those contributions. During her testimony at the hearing Barbara claimed only $4,150 or $4,250, the improvements claimed in her brief except the addition to the basement.

The trial court did not consider the improvements because no evidence was presented to the court as to what, if any, appreciation accrued to the nonmarital house by virtue of the improvements that were made. We agree that section 503(c)(2) limits required evidence of appreciation of the nonmarital property to contributions of personal effort. See, e.g., In re Marriage of Di Angelo (1987), 159 Ill. App. 3d 293, 297, 512 N.E.2d 783, 786.

Given the short duration of the marriage, 28 months, and the uncontroverted and clear and convincing evidence of contributions made to the nonmarital house, evidence of appreciation in value was not required. We reverse the portion of the trial court’s supplemental order which determined the improvements to the nonmarital house were not contributions subject to reimbursement. The amount contributed to Carl’s house should be credited to the marital estate and divided according to the provisions of section 503 of the Act. Ill. Rev. Stat. 1987, ch. 40, par. 503.

The order of the circuit court of Vermilion County is affirmed in part and reversed and remanded in part.

Affirmed in part; reversed in part and remanded.

LUND and GREEN, JJ., concur.


author: JUSTICE INGLIS

text:
    RAYMOND A. GILLILAN et al., Plaintiffs-Appellants, v. TRUSTEES FOR CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND et al., Defendants-Appellees.
    Second District
    No. 2—88—0872
    Opinion filed May 15, 1989.
    Rehearing denied June 19, 1989.

      Nisen & Elliott, of Chicago (Michael H. Moirano, of counsel), for appellants.
    John L. Rogers III and Sharon H. Rice, both of Hopkins & Sutter, of Chicago (Albert C. Maule, of counsel), for appellee Equitable Life Assurance Society of the United States.
    James L. Coghlan, of Coghlan, Joyce, Kukankos, Urbut & D’Arcy, of Chicago (Anita M. D’Arcy, of counsel), for appellee Trustees for Central States, Southeast and Southwest Areas Pension Fund.
   JUSTICE INGLIS

delivered the opinion of the court:

Plaintiffs, Raymond A. Gillilan, Bessie A. Gillilan, Fox Fields Racing Association, Inc., and North Aurora Raceway, Inc., appeal from an order dismissing their complaint against defendants, trustees for Central States, Southeast and Southwest Areas Pension Fund and the Equitable Life Assurance Society of the United States. The trial court granted defendants’ motions to dismiss after concluding that the action was barred as the result of a prior release executed on behalf of Raymond Gillilan by a trustee in bankruptcy and on the basis of estoppel by judgment. Plaintiffs raise two issues on appeal: (1) whether a release executed by a trustee in bankruptcy for one party to an action bars the claims of other parties to the action who were not represented by the trustee and who were not named in the release; and (2) whether a judgment of dismissal entered pursuant to a settlement agreement executed by a trustee in bankruptcy for one party to an action bars the claims of other parties to the action who were not represented by the trustee and who were not named in the dismissal order. We affirm in part and reverse in part.

On August 31, 1978, plaintiffs Raymond and Bessie Gillilan purchased the beneficial interest in a land trust which held title to Aurora Downs, a/k/a Fox Fields, a horse racing track located in North Aurora, Illinois. Aurora Downs was originally owned by Marge Everett, who acquired and developed the property with a $1,800,000 loan from defendant Trustees of the Central States, Southeast and Southwest Areas Pension Fund (Trustees). The Trustees were administrators of a pension fund operated on behalf of the International Brotherhood of Teamsters. The Trustees’ loan was secured by a first mortgage on the property. Everett later gifted the property, subject to the Trustees’ first mortgage, to Knox College. Knox College then sold the property to investors known as the East-West group, and, in connection with that sale, obtained a second mortgage on the property. The Gillilans purchased Aurora Downs from the East-West group subject to the first mortgage held by the Trustees and the second mortgage held by Knox College. At that time, the mortgages were in default, and the property was in a substantial state of disrepair.

In early 1979, the Gillilans entered into negotiations with defendant Equitable Life Assurance Society of the United States (Equitable) to restructure the Trustees’ loan and mortgage. Equitable acted as attorney in fact for the Trustees and was responsible for the management of the pension fund’s assets. In June 1979, Equitable, acting on behalf of the Trustees, agreed to defer all delinquent and future principal and interest payments due under the Trustees’ loan until Decernber 1, 1981, at which time the loan would be restructured. The agreement was contingent upon the Gillilans selling their interests in a California racing entity and investing those proceeds in the renovation of Aurora Downs. The Gillilans accomplished the contemplated sales and began renovations at Aurora Downs. Equitable subsequently wrote Raymond Gillilan and stated that the deferment program would go into effect contingent upon the continued renovation and maintenance of the property, maintenance of real estate taxes and insurance premiums, and Knox College restructuring its second mortgage.

While the property was being renovated, the Gillilans formed two corporations, plaintiffs, North Aurora Raceway, Inc. (NAR), and Fox Fields Racing Association, Inc. (FFRA). Each of the Gillilans owned a one-half interest in the stock of NAR. The record does not indicate the details of ownership in FFRA. Through NAR, the Gillilans employed approximately 45 persons and conducted various events at the track unrelated to horse racing. In September 1980, renovation of the track was completed, and FFRA was awarded 26 racing dates for the 1981 racing season.

According to plaintiffs, shortly after FFRA was awarded its racing dates, the Gillilans were contacted by representatives of various labor unions who demanded that the Gillilans discharge all of their nonunion employees and hire only union members to work at the track. The Gillilans refused to accede to the unions’ demands and were subsequently threatened with economic action. The unions’ threats of economic action took the form of demonstrations and interference with the Gillilans’ operation of the track. On the first day the track was open for racing and on each racing date thereafter, numerous representatives of the unions blocked access to the track entrance and allegedly threatened plaintiffs’ employees, suppliers, and patrons. FFRA obtained a temporary restraining order and preliminary injunction against the unions; however, the activities continued, and the Gillilans suspended racing at the track. In addition to disrupting the operation of the track, the unions also contacted the Trustees and Equitable and allegedly induced them to breach their agreement -with the Gillilans and institute foreclosure proceedings.

On April 9, 1981, the Trustees exercised their option to accelerate payment of the principal and interest due on the note. The Trustees subsequently declared a default and filed suit to foreclose on the mortgage against Raymond Gillilan, NAR, and FFRA among others. Raymond Gillilan, NAR, and FFRA filed a counterclaim against the Trustees and a third-party complaint against Equitable and the unions that were involved in the demonstrations at the track. In their counterclaim and third-party complaint, Raymond Gillilan, NAR, and FFRA alleged that the Trustees and Equitable breached their agreement to restructure the loan and, further, that the Trustees, Equitable, and the unions conspired to tortiously interfere with the operation of Aurora Downs by, among other things, engaging in acts of violence and instituting the foreclosure proceeding. These claims remained pending for three years during which time the Gillilans continued in possession of the track.

On February 14, 1984, Raymond Gillilan filed for bankruptcy, and the foreclosure proceedings were automatically stayed. Allan J. DeMars was appointed trustee of the bankruptcy estate of Raymond Gillilan. On September 24, 1984, DeMars and the Trustees entered into an agreed order in the bankruptcy court. Pursuant to that order, the chapter 11 proceeding was converted into a chapter 7 proceeding for involuntary liquidation, the Trustees were granted relief from the automatic stay, and DeMars was authorized to actively market the property. The Trustees subsequently entered into negotiations with DeMars to settle the claims which had been asserted against them in the foreclosure proceeding.

On April 9, 1985, the bankruptcy court entered an order approving a “compromise and settlement of claims asserted by Raymond Gillilan and various entities controlled by him as against the [Trustees] and *** [Equitable].” That order authorized DeMars to proceed with all steps necessary to implement the settlement. On April 26, 1985, Gillilan appealed the order of the bankruptcy court, challenging the fairness of the settlement agreement and further asserting that there was a conflict of interest precluding DeMars from entering into the agreement. In the interim, DeMars began carrying out the terms of the settlement agreement.

On April 12, 1985, pursuant to the settlement agreement, the Trustees and DeMars entered into a “STIPULATION TO COMPROMISE AND DISMISS CLAIMS.” In that stipulation, DeMars, acting “as Trustee for Debtor Raymond A. Gillilan and on behalf of *** Raymond A. Gillilan d/b/a Fox Fields (but not on behalf of Fox Fields Racing Association Inc., an Illinois corporation); [and] North Aurora, Raceway, Inc.” agreed to (1) file his appearance in the foreclosure proceeding as trustee for the estate of Raymond A. Gillilan; (2) withdraw the answer to the foreclosure complaint and file a new answer admitting the existence of a default; (3) dismiss with prejudice the counterclaim and third-party complaint against the Trustees and Equitable; (4) not oppose a motion for entry of judgment and decree of foreclosure and sale; and (5) execute a release on behalf of Raymond Gillilan and NAR releasing all claims against the Trustees and Equitable relating to the Aurora Downs property. On April 16, 1985, DeMars, acting on behalf of “the Bankruptcy Estate of Raymond A. Gillilan,” and NAR, an “entit[y] represented by said estate,” executed a stipulation to dismiss the counterclaim against the Trustees and third-party complaint against Equitable. Subsequently, DeMars, again acting on behalf of Raymond Gillilan and NAR, executed and delivered a “GENERAL AND SPECIAL RELEASE” to the Trustees and Equitable releasing them from all liability relating to the Aurora Downs property. On May 20, 1985, pursuant to the stipulation signed by DeMars, the counterclaim and third-party complaint were dismissed with prejudice. On October 15, 1985, Raymond Gillilan’s appeal from the earlier order of the bankruptcy court approving the settlement agreement was dismissed with prejudice pursuant to his motion for voluntary dismissal.

On December 31, 1985, plaintiffs, Raymond Gillilan, Bessie Gillilan, NAR, and FFRA, filed the instant action against the Trustees, Equitable, and others. Plaintiffs alleged five separate claims for relief. Counts I and II were directed against all defendants and sought recovery for tortious interference with existing business relations and economic damage. Counts III, IV, and V were brought by Bessie Gillilan only and named the Trustees and Equitable as defendants. These claims, sounding in fraud, unjust enrichment, and breach of contract, sought recovery for defendants’ failure to restructure the loan and mortgage.

All of the defendants moved to dismiss the complaint pursuant to section 2 — 619 of the Code of Civil Procedure (Code) (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 619). Defendants contended that the release executed by DeMars in favor of the Trustees and Equitable barred all claims. Defendants also claimed that under the principles of res judicata and collateral estoppel, the dismissal of the counterclaim and third-party complaint barred plaintiffs’ action.

On August 10, 1988, the trial court granted the section 2 — 619 motions filed by the Trustees and Equitable only, dismissing the claims against them as to all plaintiffs on the basis of the prior release and estoppel by judgment. As an additional basis for its ruling, the court further found that Bessie Gillilan’s claims were barred by the release because she was in privity with Raymond Gillilan. On August 12, 1988, the court entered an order pursuant to Supreme Court Rule 304(a) (107 Ill. 2d R. 304(a)) finding that there was no just reason to delay enforcement of or appeal from its order of August 10, 1988. On September 9, 1988, plaintiffs filed this timely appeal.

A motion to dismiss brought pursuant to section 2 — 619 of the Code admits all facts well-pleaded, but not conclusions of law or conclusions of fact unsupported by allegations of the specific facts upon which such conclusions rest. (See Meyer v. Murray (1979), 70 Ill. App. 3d 106, 114.) The defendant has the burden of proving the affirmative defense relied upon in the motion, and the motion should be granted if the record establishes that a genuine or material question of fact does not exist. 70 Ill. App. 3d at 114.

Plaintiffs first contend that the trial court erred in dismissing the complaint on the basis of a prior release since the release executed by the bankruptcy trustee did not bar any claims other than those asserted by Raymond Gillilan. We agree.

A release is a contract, whereby one party abandons a claim to another against whom the claim exists, and its interpretation is governed by the principles that govern contract law cases. (Aqua-Aerobic Systems, Inc. v. Ravitts (1988), 166 Ill. App. 3d 168, 171; Shultz v. Delta-Rail Corp. (1987), 156 Ill. App. 3d 1, 10.) The intention of the parties controls the scope and effect of the release, and such intent is to be discerned from the language used and the circumstances of the transaction. (Whitehead v. Fleet Towing Co. (1982), 110 Ill. App. 3d 759, 762-63.) Where a written release is clear and explicit, the court must enforce the release as written, and the meaning and intention of the parties should be gathered from the face of that document. Costa v. Stephens-Adamson, Inc. (1986), 142 Ill. App. 3d 798, 800.

The release in the instant action provides:

“Allan J. DeMars as Trustee for Debtor, Raymond A. Gillilan and on behalf of the Bankruptcy Estate of Raymond A. Gillilan; and the following entities represented by said estate: Raymond A. Gillilan d/b/a Fox Fields (but not on behalf of Fox Fields Racing Association, Inc., an Illinois corporation); [and] North Aurora Raceway, Inc., an Illinois corporation *** hereby release and forever discharge (on behalf of their agents, employees, successors and assigns) *** the [Trustees] and [Equitable] from any and all claims, causes of action and liabilities (of whatever character) which Releasors now have or ever had against Releasees or any of them relating to the Aurora Downs (Fox Fields) property, the mortgage indebtedness payable to the Pension Fund or the foreclosure proceeding *** including any counterclaims and third-party complaints as against Releasees asserted in the mortgage foreclosure.”

Plaintiffs concede on appeal that the release is binding on Raymond Gillilan. Gillilan was the debtor in the bankruptcy proceeding, and DeMars expressly represented his interests in that proceeding. In so representing Gillilan’s interests, DeMars, acting “as Trustee for Debtor *** and on behalf of the Bankruptcy Estate of Raymond A. Gillilan,” executed a release of all of Gillilan’s claims against the Trustees and Equitable relating to the operation of Aurora Downs and arising under the foreclosure proceeding. Accordingly, we conclude that the trial court did not err in granting defendants’ motions as to Raymond Gillilan.

It is equally clear from the express terms of the release that the parties did not intend to include FFRA under the provisions of that document. In executing the release, DeMars purported to act on behalf of Gillilan and NAR, “but not on behalf of Fox Fields Racing Association, Inc.” Plaintiffs argue that because FFRA was expressly excluded from the release, it is not barred by that document from bringing an action against the Trustees and Equitable. Neither the trial court nor defendants advanced any argument or authority in support of the court’s dismissal of the complaint as to FFRA on the basis of the release, and we conclude that the court’s judgment in that regard was error.

A much closer question is presented by the court’s judgment as it relates to NAR. Plaintiffs concede that the release identifies NAR as a releasing party. Plaintiffs nonetheless argue that DeMars did not have authority to execute a release on behalf of NAR. We agree.

Nothing in the record before us indicates that DeMars had authority to act on behalf of NAR as a corporate entity. In executing the release and other settlement documents on behalf of NAR, DeMars’ authority was expressly limited to acting on behalf of NAR as an “en-tit[y] represented by [the bankruptcy estate of Raymond Gillilan].” This is further reflected in DeMars’ affidavit in opposition to defendants’ motion to dismiss wherein DeMars stated that “[i]n executing the settlement documents on behalf of [NAR], [he] did so only to the extent of Mr. Gillilan’s ownership of stock in that corporation.” (Emphasis added.)

Defendants do not provide this court with any authority in support of their apparent position that the actions taken by a trustee in bankruptcy on behalf of the debtor’s interest in a corporate entity are binding on the corporate entity. Rather, defendants counter plaintiffs’ position that DeMars lacked authority to act on behalf of NAR by noting that NAR did not challenge DeMars’ authority to act on its behalf when Gillilan appealed the bankruptcy court’s order approving the settlement agreement. This argument is unavailing. NAR was not the debtor and was not otherwise a party to the bankruptcy proceeding. Only Raymond Gillilan’s interest in NAR was subject to the bankruptcy court proceedings. Accordingly, we conclude that DeMars was not acting on behalf of NAR as an entity separate and apart from Raymond Gillilan’s interest in that corporation, and the trial court therefore erred in granting defendants’ motion to dismiss as to NAR based on the release.

Finally, as to Bessie Gillilan, the trial court found that the release barred her from maintaining an action against the Trustees and Equitable because she was in privity with Raymond Gillilan. We disagree.

As a general rule, a person who is not a party to a release will not be bound by the terms of the release. (See Unger v. Nunda Township Rural Fire Protection District (1985), 135 Ill. App. 3d 758, 764.) However, the concept of privity provides that a nonparty may be bound where that person’s interests are so closely aligned to the party’s interests that the party is her virtual representative. See Johnson v. Nationwide Business Forms, Inc. (1981), 103 Ill. App. 3d 631, 634.

In support of their argument that Bessie Gillilan was in privity with Raymond Gillilan and therefore bound by the release, defendants cite Sohio Corp. v. Gudder (1941), 375 Ill. 622, and Pendleton v. King (1977), 55 Ill. App. 3d 1. In both of those cases, a wife tried to disavow a real estate contract negotiated by her husband. (Sohio Corp., 375 Ill. at 625; Pendleton, 55 Ill. App. 3d at 4.) In each case the court concluded that the wife could not disavow the contract negotiated on her behalf because she allowed her husband to hold himself out as representing her interests. (Sohio Corp., 375 Ill. at 626; Pendleton, 55 Ill. App. 3d at 5.) Specifically, in Sohio Corp., the court found it particularly significant that the wife did not challenge the transaction despite the fact that she was part owner of the business through which the contract was made, spent considerable time working for. the business, and received all payments made under the real estate contract as part of her activities at work. (Sohio Corp., 375 Ill. at 625-26.) Similarly, the Pendleton court found that the wife in that case could not successfully challenge the contract in that she worked for her husband’s real estate agency at the time of the sale, prepared the bonds for deed form for the purchasers, received the monthly payments for the property in the course of her duties, and talked to the purchasers about the property on several occasions. Pendleton, 55 Ill. App. 3d at 5.

In the instant action, unlike Sohio Corp. and Pendleton, there is no evidence in the record indicating that Bessie Gillilan held her husband out in any manner as representing her interests. Bessie Gillilan was not a debtor in the bankruptcy proceeding and was a separate shareholder in NAR and presumably in FFRA. The release was executed as the result of negotiations between defendants and DeMars acting as trustee for the bankruptcy estate of Raymond Gillilan only. DeMars’ affidavit further indicates that defendants attempted to separately negotiate a settlement of Bessie Gillilan’s claims. Defendants have not filed any opposing affidavits, and this fact is otherwise uncontroverted. From this evidence it is apparent that defendants did not contemplate that the release constituted a settlement of Bessie Gillilan’s claims. Accordingly, we conclude that the trial court erred in dismissing the complaint as to Bessie Gillilan on the basis of privity to the release.

Plaintiffs next contend that the trial court erred in dismissing the complaint on the basis of estoppel by judgment. Plaintiffs contend that the judgment of dismissal executed pursuant to the settlement agreement between defendants and DeMars acting as trustee for the bankruptcy estate of Raymond Gillilan bars only the claims of Raymond Gillilan. We agree.

The doctrine of res judicata or estoppel by judgment provides that a final judgment rendered by a court of competent jurisdiction on the merits is conclusive as to the rights of the parties and their privies and constitutes an absolute bar to a subsequent action involving the same claim, demand, or cause of action. (Barth v. Reagan (1986), 146 Ill. App. 3d 1058, 1063; Keim v. Kalbfleisch (1978), 57 Ill. App. 3d 621, 623.) A dismissal with prejudice entered pursuant to a settlement agreement constitutes a final judgment on the merits sufficient for application of res judicata. Keim, 57 Ill. App. 3d at 624; see Barth, 146 Ill. App. 3d at 1064.

In the instant action, although the dismissal of the counterclaim and third-party complaint in the foreclosure action constitutes a judgment on the merits sufficient for application of res judicata, it bars only the claims of Raymond Gillilan. The stipulation to dismiss the counterclaim and third-party complaint against defendants was entered into by DeMars on behalf of the bankruptcy estate of Raymond Gillilan and certain entities represented by that estate. The judgment of dismissal with prejudice was narrowly limited in that it was “heard on the stipulation by and among Counter-claimants and Third-Party Complainants *** Raymond A. Gillilan; Raymond A. Gillilan d/b/a Fox Fields (but not on behalf of Fox Fields Racing Association, Inc., an Illinois corporation); [and] North Aurora Raceway, Inc.” FFRA was expressly excluded, and, as noted above, DeMars’ affidavit establishes that the reference to NAR went only to Raymond Gillilan’s ownership of stock in that entity. Accordingly, we conclude that the claims advanced by NAR and FFRA in the counterclaim and third-party complaint were not disposed of by the court’s judgment. In addition, Bessie Gillilan was neither a party to the foreclosure action nor in privity with Raymond Gillilan such that her claims could be affected by the judgment. Because we conclude that only Raymond Gillilan’s claims were settled by DeMars and dismissed by the court in the foreclosure proceeding, we hold that the trial court in the instant action erred in dismissing the complaint on the basis of estoppel by judgment as to NAR, FFRA, and Bessie Gillilan.

For the reasons set forth above, the judgment of the circuit court granting defendants’ motions to dismiss is affirmed as to Raymond Gillilan only. The judgment of the circuit court granting defendants’ motions to dismiss is reversed as to the remaining plaintiffs, and this cause is remanded to the circuit court for further proceedings.

Affirmed in part; reversed in part and remanded.

UNVERZAGT, P.J., and WOODWARD, J., concur.