Belleville law firm suing accountant over tax fines and penalties may have case decided by jury

By Record News | Apr 16, 2019

BELLEVILLE – Chatham and Baricevic law firm didn’t want a jury to resolve its dispute with accountant Mark Diak, but Associate Judge Julie Katz has given herself an option to hold a jury trial. 

At a hearing on April 15, she denied the firm’s motion to strike a jury demand that Garth Madison of Chicago filed for Diak last December. 

The jury demand looked odd at the time because the firm based its complaint in equity rather than law. 

The complaint alleged that Diak exposed the firm and partners Grey Chatham Jr. and C. J. Baricevic to tax fines and penalties. 

The first count sought a requirement for Diak to produce records and the second count sought a declaration that he breached fiduciary duties. 

Attorney Madison soon advised the court that Diak produced the records, and moved to dismiss the count on fiduciary duties, writing that the firm sought to establish an element of malpractice without filing a malpractice suit. 

At a hearing on Feb. 11, Katz gave the firm 28 days to amend the complaint. 

Chatham moved for reconsideration on Feb. 25, writing that the firm would like to present additional matters to the court. 

At Monday’s hearing, Grey Chatham Sr. appeared for the firm and said he didn’t believe he had all the records. 

He said electronic mail from Feb. 21 of last year showed Diak filed two or three extensions on his 2016 taxes. He said Diak should have produced the extensions. 

He said the Internal Revenue Service said no return was filed for 2016. 

Katz said she found document production moot because it was all produced. 

Madison said Diak searched and gathered all the documents. 

Katz said an affidavit by Diak needed to happen, and told Madison to ask him about what Chatham mentioned. 

Madison said he could get an affidavit. 

Katz asked Chatham if he wanted her to reconsider her order granting leave to amend the complaint, and he said he would stand by the complaint. 

Katz said she couldn’t find the first count moot until the plaintiff is satisfied. 

On the second count, she said plaintiff alleged it incurred penalties and interest. 

“I see all the elements of a breach of fiduciary duty,” Katz said. 

Madison told her she saw it as a malpractice action, but the remedy of damages hadn’t been sought. 

“We should be allowed to have a jury,” Madison said. 

Katz said breach of fiduciary duty might require that. 

She told him she didn’t necessarily agree that he couldn’t demand one. 

Madison asked her to deny the motion to strike the demand, and she did. 

She set a hearing July 16.

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