2026 IL App (1st) 231476‑U
Fourth Division
Filed July 30, 2026
Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent
except in the limited circumstances allowed under Rule 23(e)(1).
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
)
DAVID MARCHI, derivatively on behalf of
)
Matthew Christopher, Inc., an Iowa Corporation,
)
Plaintiff-Appellee and Cross-Appellant )
)
v.
)
CENTRUST BANK, N.A., )
) Appeal from the
Defendant-Appellant and Cross-Appellee.
) Circuit Court of Cook County
CENTRUST BANK, N.A., )
Nos. 2022 L 010795, 2023 L 000942
Plaintiff-Appellant and Cross-Appellee )
) The Honorable Thomas M. Donnelly,
v. ) Judge, presiding.
)
ROBERT GOODRICH, DAVID MARCHI, GARY
)
RADA, and MATTHEW CHRISTOPHER, INC.,
)
an Iowa Corporation,
)
Defendants )
(Robert Goodrich and David Marchi, Defendants- )
Appellees and Cross-Appellants.) )
JUSTICE OCASIO delivered the judgment of the court.
Presiding Justice Navarro and Justice Quish concurred in the judgment.
Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
ORDER
¶1 Held: (1) The trial court correctly found the asset sale commercially unreasonable under the
Uniform Commercial Code; (2) Centrust did not prove fraud in the inducement;
(3) there was no civil conspiracy, as supported by the evidence; and (4) Marchi and
Goodrich did not tortiously interfere with loan contracts. On cross-appeal, relief for
improper disposition was denied due to lack of proven damages, and default against
MCI was proper.
¶2 These consolidated appeals arise out of a series of failed loans extended by Centrust Bank,
N.A. (Centrust), 1 to Matthew Christopher, Inc. (MCI), a company in the business of selling
wedding dresses. Centrust brought suit against MCI for breach of contract and against two minority
shareholders in MCI, David Marchi and Robert Goodrich, for breach of guarantees related to the
MCI loans, fraud, civil conspiracy, and tortious interference with contract. Separately, Marchi
brought a derivative action on MCI’s behalf against Centrust for breach of fiduciary duty, tortious
interference with business relationships, and improper disposition of collateral. The matters were
consolidated. After a three-day bench trial, the court entered judgments in favor of Marchi and
Goodrich on Centrust’s claims and in favor of Centrust on Marchi’s derivative claims. It also
entered a default judgment against MCI on Centrust’s breach of contract claim.
¶3 On appeal, Centrust challenges the judgments in favor of Marchi and Goodrich. Likewise,
Marchi appeals from the judgments in favor of Centrust on his derivative claims. Marchi and
Goodrich also purport to appeal from the entry of a default judgment against MCI. For the
following reasons, we dismiss the purported appeal from the default judgment against MCI;
otherwise, we affirm.
¶4 I. BACKGROUND
¶5 Centrust originally brought suit in 2019 against MCI, Marchi, Goodrich, and former MCI
employee Gary Rada (who is not a party to this appeal). Marchi filed counterclaims derivatively
on behalf of MCI. In May 2022, Centrust moved for a default judgment against MCI, asserting
that it did not seek relief against MCI because it was a nominal party. On the eve of trial, in October
1
Centrust is now known as SmartBiz Bank, N.A.
-2-Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
2022, Rada filed for bankruptcy, and the parties voluntarily dismissed their respective claims with
leave to refile. See 735 ILCS 5/2‑1009 (West 2018).
¶6 On December 5, 2022, Marchi filed a derivative complaint on behalf of MCI against Centrust
for (1) breach of fiduciary duty, (2) tortious interference with business relations, and (3) improper
disposition of collateral under article 9 of the Uniform Commercial Code (UCC) (810 ILCS
5/9-101 et seq. (West 2018)).
¶7 On January 31, 2023, Centrust filed a complaint asserting the following claims: (1) breach of
contract against MCI and Marchi; (2) breach of contract against Goodrich; (3) breach of contract
against Rada; (4) fraudulent concealment against Rada; (5) fraud in the inducement against
Goodrich, Marchi, and Rada; (6) civil conspiracy against Goodrich, Marchi, and Rada; and
(7) tortious interference against Goodrich, Marchi, and Rada. Prior to trial, Centrust voluntarily
dismissed its claims against Rada.
¶8 On March 22, 2023, Marchi filed his answer and affirmative defenses to Centrust’s complaint.
He denied all material allegations and raised one affirmative defense to the breach of contract
claim, characterized as “impairment of collateral/failure to sell collateral in a commercially
reasonable manner.”
¶9 On May 15, 2023, Goodrich filed his answer and affirmative defenses. He similarly denied
all material allegations and asserted three affirmative defenses to the breach of contract claim:
(1) breach of the implied covenant of good faith and fair dealing, (2) contributory negligence, and
(3) improper disposition of collateral.
¶ 10 The cases were consolidated and proceeded to a bench trial, where the evidence showed as
follows.
¶ 11 MCI was a wedding dress design and manufacturing company founded by Matthew
Christopher Sobaski. By 2017, Sobaski owned a majority share of the company, while Marchi and
Goodrich held minority ownership interests and served as directors. MCI experienced seasonal
fluctuations and, by early 2017, began encountering cash flow issues.
-3-Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
¶ 12 Gary Rada and his company, Rada Concepts LLC, were hired in 2013 by MCI’s board of
directors. On April 1, 2017, Rada Concepts and MCI entered into a consulting services agreement,
where Rada Concepts agreed to provide consulting and operational management services for MCI.
Their responsibilities included accounting, budgeting, strategic planning, financial reporting,
human resources, payroll, and corporate governance. Rada was given “the authority as Chairman
to pursue any and all Commercial Loans as necessary.” Rada reported back to the board of
directors. Centrust primarily corresponded with Rada when servicing MCI’s loans. Rada hired
Tony Scott as MCI’s accounting manager in 2013. Scott handled accounting work for Rada and
spent the majority of his time working for MCI.
¶ 13 In 2016, MCI sought financing from Centrust, a community bank located in Northbrook that
specialized in making commercial loans to small businesses. At all relevant times, Jim McMahon
was Centrust’s CEO and president, and Thomas Meyer was one of its senior loan officers. Both
McMahon and Meyer were involved in servicing the loans.
¶ 14 After reviewing MCI’s financial information, in April 2017, Centrust extended MCI a
$951,000 United States Small Business Administration (SBA) loan and provided an additional
$350,000 commercial line of credit. In December 2017, it extended another SBA loan of $262,000,
and in January 2018, it increased the limit on MCI’s line of credit to $550,000. The SBA loans
were secured loans, with MCI’s equipment, inventory, accounts, and intangibles serving as the
collateral. Marchi guaranteed both SBA loans and executed a limited personal guarantee of the
line of credit, and Goodrich guaranteed the December 2017 SBA loan.
¶ 15 To support its loan applications, MCI provided Centrust with financial statements.
Subsequently, Centrust asserted that these statements overstated MCI’s revenues, inventory, and
accounts receivable. Additionally, Centrust alleged that Goodrich misrepresented his ownership
percentage in MCI on an SBA borrower information form, indicating 17.5% ownership rather than
more than 22%. Centrust contended that this discrepancy was significant because SBA regulations
require guarantees from shareholders who own 20% or more of the company.
-4-Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
¶ 16 In early 2018, MCI continued to experience financial difficulties. On May 31, 2018, Rada
retained Second Wind Consultants to assist with restructuring and debt negotiations of MCI.
According to the record, discussions among Marchi, Goodrich, Rada, and Second Wind included
proposals to redirect customer payments to accounts outside Centrust, permit the loans to go into
default, create a new entity to acquire MCI’s assets, and negotiate a reduced payoff with the bank.
A new company, ADU Bridal, LLC, was formed in connection with these discussions, and Second
Wind later approached Centrust with an offer to purchase MCI’s assets for $50,000 in exchange
for a release of Centrust’s liens and waiver of remaining deficiencies.
¶ 17 Shortly thereafter, MCI failed to make its June 2018 loan payments. On June 13, 2018,
Centrust declared MCI in default and accelerated the debt. On June 14, 2018, Centrust sent letters
to MCI’s customers directing them to pay Centrust directly, which MCI contends resulted in a loss
of business for them.
¶ 18 In late June 2018, Centrust installed Michael Robinson as chief operating officer and
collateral manager for MCI. Robinson assumed control over MCI’s financial operations and
prepared financial information on the company’s behalf. McMahon testified that Robinson had a
history of operating large businesses and was confident of Robinson’s ability to take on the
assignment of MCI. McMahon stated that Robinson was assigned to MCI because they were
concerned that Centrust was not getting accurate reporting of cash collected or the inventory levels.
¶ 19 During Robinson’s review of MCI’s finances, he concluded that certain financial information
provided to Centrust incorrectly classified consignment inventory as accounts receivable. Centrust
determined that MCI could continue as a viable business and decided to liquidate MCI’s assets as
a means of recovery.
¶ 20 Following default, Centrust sought to dispose of MCI’s assets under article 9 of the Uniform
Commercial Code (UCC) (810 ILCS 5/9‑101 et seq. (West 2018)). To find a buyer, Centrust
engaged Gladiator Group, an investment banking firm. While searching, Centrust also brought in
Michael Size to appraise MCI’s business assets. Size produced two very different appraisals, each
based on separate assumptions about inventory and disputed assets. The first appraisal, dated
-5-Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
March 19, 2019, placed MCI’s fair market value at roughly $3.8 million, relying on MCI’s
financial statements and reported inventory. However, a second appraisal from July 29, 2022,
estimated the company’s value at just $275,000 after excluding disputed assets and revising the
inventory assessment—a dramatic discrepancy.
¶ 21 Centrust explored multiple sale opportunities over approximately one year. Initial offers for
MCI’s assets ranged from $50,000 to between $300,000 and $400,000. Ultimately, Centrust sold
MCI’s assets through a private UCC sale to Rotterdam Private Equities. Through its president,
William Van der Velde III, Rotterdam offered $500,000 for all of MCI’s assets. Centrust countered
at $1,000,000. Centrust and Rotterdam eventually agreed to a price of $775,000.
¶ 22 On July 19, 2019, Centrust announced a private sale of MCI’s assets for $775,000 to Marchi,
Goodrich, and Sterling Capital Group (an MCI creditor who had submitted a lower offer roughly
one year earlier); no objections were raised. The sale was finalized on July 31, 2019, with Matthew
Christopher Van Der Velde, LLC, purchasing the assets, fully financed by Centrust. Afterwards,
Centrust pursued deficiency recovery from Marchi and Goodrich as guarantors.
¶ 23 Centrust retained Matthew Brash, a senior managing director at financial advisory firm New
Point Advisors, to testify at trial. Brash was to evaluate the UCC sale and Centrust’s handling of
the collateral. Brash opined that Centrust acted reasonably in protecting and marketing the
collateral after default and concluded that the UCC sale of $775,000 was commercially reasonable
and was the highest and best offer Centrust could have received. He also testified that the retention
of Second Wind, the proposed $50,000 asset purchase, and efforts to redirect receivables away
from Centrust was a “clear cause [sic] of fraud to deceive the bank.”
¶ 24 Donald Coker was hired by the defendants to provide an expert opinion regarding the UCC
sale. He determined that MCI’s sale did not meet the standard of commercial reasonableness.
According to Coker, a commercially reasonable sale under the UCC means a secured creditor must
make a sensible business effort to secure the highest possible price. Yet, he also admitted that
article 9 of the UCC does not obligate a lender to get an appraisal before conducting a sale.
-6-Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
¶ 25 Coker acknowledged MCI’s default on the loans but expressed concerns regarding Centrust’s
subsequent actions. He objected to Centrust’s approach of notifying MCI’s customers and directing
payments to themselves. However, Coker was unable to specify any particular customers who may
have been lost as a result. Additionally, he noted Robinson’s potential conflict of interest, while
offering no opinion on whether this alleged conflict influenced the UCC sale.
¶ 26 At the close of Centrust’s case, Marchi and Goodrich moved for a directed finding on
Centrust’s claims for fraud in the inducement and civil conspiracy. The trial court granted the
motion as to fraud in the inducement, finding that Centrust had not presented a prima facie case.
The trial court denied Marchi’s and Goodrich’s motion for a directed finding on all Centrust’s other
claims.
¶ 27 The trial court rendered its judgment on July 14, 2023. The court determined that Marchi and
Goodrich were not liable for any of Centrust’s claims. Specifically, the court found that Centrust
failed to establish a breach of contract, as it could not demonstrate that the UCC sale satisfied the
commercial reasonableness criteria under article 9 of the UCC. The court’s reasoning primarily
addressed the sale price, referring to persuasive arguments from closing statements. Van der Velde
appraised the collateral at $1.4 million, whereas a Texas-based businessman named Chris Anders
assessed it at $4 million; the court questioned the bank’s rationale for accepting a comparatively
low offer. Additionally, reliance was placed on McMahon’s testimony and demeanor, with the
conclusion that he was motivated against MCI. The court emphasized that Centrust bore the burden
of proving unreasonable conduct but presented no evidence regarding its obligation to vigorously
promote the sale. Apart from these considerations, the trial court provided no additional findings
or context for Centrust’s remaining claims and ruled in favor of Marchi and Goodrich without
further elaboration.
¶ 28 The trial court ruled in Centrust’s favor on Marchi’s derivative complaint. Because MCI did
not appear, answer, or assert any affirmative defenses to Centrust’s complaint, the trial court
entered judgment in favor of Centrust as to breach of contract against MCI for the full amount of
$1,528,001.21 due under the loans.
-7-Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
¶ 29 II. ANALYSIS
¶ 30 This case presents several interrelated issues rising from Centrust’s effort to recover on loans
made to MCI and subsequent disposition of MCI’s assets. The primary issue is whether the sale of
MCI’s assets under article 9 of the UCC was conducted in a commercially reasonable manner.
Closely tied to this question are whether Centrust met its burden of proof and whether the trial
court applied the correct legal standard in evaluating the sale. Additionally, the case raises issues
concerning the proper determination of MCI’s fair market value and the legal consequences of an
unreasonable sale, including the impact on Centrust’s ability to recover under the loan agreements.
We also consider whether Marchi and Goodrich have standing to appeal from the default judgment
entered against MCI and, if so, whether that default judgment should be vacated.
¶ 31 A. UCC Sale
¶ 32 Under article 9 of the Uniform Commercial Code, a secured party may dispose of collateral
after default, provided that every aspect of the disposition, including the method, manner, time,
place, and other terms, is commercially reasonable. 810 ILCS 5/9‑610 (West 2018). The secured
party bears the burden of establishing that the disposition meets this standard. Boender v. Chicago
North Clubhouse Association, Inc., 240 Ill. App. 3d 622, 627 (1992). Commercial reasonableness
is typically an issue of fact (Pioneer Bank & Trust Co. v. Mitchell, 126 Ill. App. 3d 870, 873
(1984)) and is not well suited to disposition by dismissal. Willard v. Northwest National Bank of
Chicago, 137 Ill. App. 3d 255, 263 (1985). While price is a relevant fact, it is not dispositive. Louis
Zahn Drug Co. v. Bank of Oak Brook Terrace, 95 Ill. App. 3d 435, 442 (1981). A trial court’s
findings as to whether the sale is commercially reasonable will not be reversed unless against the
manifest weight of the evidence. Ryder v. Bank of Hickory Hills, 242 Ill. App. 3d 1042, 1047
(1993).
¶ 33 Centrust argues that the judgment entered in favor of Marchi and Goodrich on Centrust’s
breach of contract claims should be reversed because the sale conducted under the UCC was
commercially reasonable. According to Centrust, the trial court erred by improperly focusing on
-8-Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
the sale price alone, despite the UCC’s requirements that all aspects, such as method, timing, and
manner of the disposition, be considered. Centrust maintains that $775,000 was a favorable result.
Centrust notes that the sale price substantially exceeded Second Wind’s $50,000 offer and the
bank’s internal valuation. Centrust further contends that it made extensive efforts to find buyers
on a private basis for over a year after MCI’s default so it would result in higher realization on
collateral for the benefit of all parties concerned. Centrust also asserts that if they had sold MCI’s
assets at a public sale, the sale price would have been less than $775,000.
¶ 34 Marchi and Goodrich, in contrast, argue that the trial court correctly found that the sale was
not commercially reasonable. Centrust’s complaint alleged breach of contract against Marchi and
Goodrich and asserted that Marchi and Goodrich breached the terms of their personal guarantees
and should be held personally liable for the amounts owed to Centrust by MCI. Marchi and
Goodrich raised, as an affirmative defense, improper disposition of collateral, alleging that
Centrust failed to conduct a commercially reasonable sale of MCI’s assets. Marchi and Goodrich
contend that because the sale of MCI was not commercially reasonable, they are relieved of their
obligations under their respective guarantees. Specifically, they argue that the price at which MCI’s
assets were sold was too low compared to the earlier valuations and that Centrust mishandled the
sale process, including dealing with customers. Marchi and Goodrich note that the trial court
concluded that Centrust did not meet its burden of proof and that it could not find reasonableness
based on “these facts.” The trial court entered a final judgment in favor of Marchi and Goodrich
on the claims asserted by Centrust against them for “the reasons stated on the record.” Marchi and
Goodrich further argue that in addition to the language in article 9 of the UCC, Centrust’s actions
were also governed by the requirements contained in SBA (a) Loan and Servicing and Liquidation.
These additional requirements on Centrust included demonstrating that there were no conflicts of
interest with MCI and that Centrust aggressively advertised the sale of MCI’s assets.
¶ 35 The record reflects that the trial court considered multiple aspects of the disposition, including
the way the sale was conducted, the lack of broad marketing efforts, and the circumstances
surrounding the transaction. Although the court referenced the sale price as a significant factor, it
-9-Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
did not rely exclusively on that consideration. Accordingly, the trial court did not apply an incorrect
legal standard.
¶ 36 The evidence presented at trial supported the trial court’s finding that the sale was not
commercially reasonable. Coker testified that a commercially reasonable secured sale requires
meaningful efforts to obtain the highest available price and criticized Centrust’s limited marketing
of the collateral. He further questioned Centrust’s decision to immediately redirect customer
payments and the lack of broader advertising. Although Brash disagreed and opined that the
$775,000 sale represented the highest obtainable price, the trial court was not required to accept
his opinion. The court also heard evidence that Centrust financed the entire purchase price for the
eventual buyer and considered the substantial disparity between the earlier valuation of
approximately $3.8 million and the later appraisal of $275,000, which was prepared years after the
sale and excluded significant assets. The trial court can reasonably conclude from this evidence
that Centrust failed to demonstrate that every aspect of the disposition satisfied article 9.
¶ 37 Because commercial reasonableness presents a factual question (Voutiritsas v. Intercounty
Title Co., 279 Ill. App. 3d 170, 183 (1996)), the trial court was required to assess credibility and
weigh conflicting expert opinions, evaluate McMahon’s testimony and credibility, and determine
what significance to give the competing appraisals. Nothing in the record makes the trial court’s
resolution of those factual disputes unreasonable or arbitrary. The court ultimately found that the
sale was not commercially reasonable. A contrary conclusion is therefore not apparent, and the
trial court’s findings were not against the manifest weight of the evidence.
¶ 38 B. Contract and Personal Guarantees
¶ 39 The parties do not dispute that Marchi and Goodrich executed personal guarantees in
connection with the loans extended by Centrust. These guarantees constitute valid and enforceable
contracts. The record reflects that MCI failed to make required payments under the loan
agreements in June 2018. Such failure constituted a default under the terms of the agreements,
triggering Centrust’s rights to accelerate the debt and pursue remedies. Following MCI’s default,
- 10 -Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
Centrust demanded payment from Marchi and Goodrich pursuant to their guaranties. It is
undisputed that no payments were made. Absent any valid defense, this would constitute a breach
of the guaranties.
¶ 40 However, the enforceability of the deficiency is affected by the commercial reasonableness
of the disposition of collateral. Since the trial court found that the sale was not commercially
reasonable, Centrust’s ability to recover under the guaranties was limited to the difference between
“the sum of the secured obligation, expenses, and attorney’s fees” and “the amount of proceeds
that would have been realized had” it conducted a commercially reasonable sale. 810 ILCS
5/9‑626(3), (3)(B) (West 2018). It is presumed, moreover, that a commercially reasonable sale
would have realized an amount “equal to the sum of the secured obligation, expenses, and
attorney’s fees,” and the burden was on Centrust to show that a commercially reasonable sale
would have realized an amount “less than that sum.” Id. § 9‑626(4). On appeal, Centrust does not
attempt to rebut this presumption. Accordingly, the trial court did not err in declining to impose
liability on Marchi and Goodrich under the circumstances.
¶ 41 C. Fraud
¶ 42 Next, Centrust argues that the trial court’s directed finding in favor of Marchi and Goodrich
on Centrust’s fraud in the inducement claim was wrong as a matter of law because Centrust
established a prima facie case. Because a determination that a plaintiff has failed to present a prima
facie case is a question of law, the trial court’s ruling is reviewed de novo on appeal. People ex rel.
Sherman v. Cryns, 203 Ill. 2d 264, 275 (2003).
¶ 43 To establish fraud in the inducement, a plaintiff must prove “a false representation of material
fact, made with knowledge or belief of that representation's falsity, and made with the purpose of
inducing another party to act or to refrain from acting, where the other party reasonably relies upon
the representation to its detriment.” Enterprise Recovery System, Inc. v. Salmeron, 401 Ill. App. 3d
65, 72 (2010). The evidence presented included allegations regarding inaccuracies in financial
statements and representations made in connection with the loan applications.
- 11 -Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
¶ 44 Centrust argues that MCI with Marchi and Goodrich’s approval gave false financial
statements stating inflated revenue and inventory. Centrust alleges that Goodrich lied about his
ownership percentage to avoid guaranteeing a loan. Centrust argues that it relied on these
representations when issuing the loans. Marchi and Goodrich argue that Centrust did not provide
enough evidence of fraud and that the trial court correctly found no prima facie case.
¶ 45 Although Centrust introduced evidence that financial statements later proved inaccurate, it
did not present evidence that Marchi and Goodrich knowingly made false representations with the
intent to induce the loans. Nor did it establish that Goodrich’s ownership percentage affected
Centrust’s lending decision. Because the evidence failed to establish multiple essential elements
of fraud, the trial court correctly entered a directed finding.
¶ 46 D. Civil Conspiracy
¶ 47 Centrust contends that the trial court’s ruling in favor of Marchi and Goodrich on Centrust’s
civil conspiracy claim should be reversed because the evidence presented at trial demonstrated that
Marchi, Goodrich, Rada, and Second Wind engaged in a conspiracy to try to defraud Centrust and
carried out multiple acts to its end. A trial court’s findings following a bench trial will be reversed
if they are against the manifest weight of the evidence. Sheth v. SAB Tool Supply Co., 2013 IL App
(1st) 110156, ¶ 40. “A decision is against the manifest weight of the evidence only when an
opposite conclusion is apparent or when the findings appear to be unreasonable, arbitrary, or not
based on the evidence.” Eychaner v. Gross, 202 Ill.2d 228, 252 (2002).
¶ 48 “The elements of a civil conspiracy are: (1) a combination of two or more persons, (2) for the
purpose of accomplishing by some concerted action either an unlawful purpose or a lawful purpose
by unlawful means, (3) in the furtherance of which one of the conspirators committed an overt
tortious or unlawful act.” Fritz v. Johnston, 209 Ill.2d 302, 317 (2004) (citing Adcock v. Brakegate,
Ltd., 164 Ill.2d 54, 62‑63 (1994)). A conspiracy is rarely proven with direct proof. McClure v.
Owens Corning Fiberglas Corp., 188 Ill. 2d 102, 134 (1999). Usually, it must be established “from
- 12 -Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
circumstantial evidence and inferences drawn from evidence, coupled with common-sense
knowledge of the behavior of persons in similar circumstances.” Adcock, 164 Ill. 2d at 66.
¶ 49 Centrust argues that Marchi, Goodrich, and Second Wind created a scheme to default
intentionally and then buy the assets through a hidden “straw buyer” for less than what the
collateral is worth. Centrust alleges that this was a coordinated plan to defraud the bank. Centrust
presented evidence, email messages and Second Wind’s detailed plan concerning their efforts to
restructure the company’s obligations. Marchi and Goodrich argue that no unlawful agreements
were made and their actions were business decisions, not fraud.
¶ 50 However, the existence of an agreement to engage in unlawful conduct was disputed.
Although the emails demonstrated discussions regarding restructuring MCI’s financial obligations
and possible acquisition strategies after default, the trial court could reasonably conclude that they
reflected negotiations over distressed assets rather than an agreement to accomplish an unlawful
objective. The trial court likewise could find that Centrust failed to prove an overt unlawful act or
resulting damages. In light of the conflicting evidence and the trial court’s responsibility to
evaluate witness credibility, its finding does not contravene the manifest weight of the evidence.
¶ 51 E. Tortious Interference
¶ 52 Centrust argues that the trial court erred in ruling in favor of Marchi and Goodrich on the
tortious interference claim. To establish tortious interference with a contract, a plaintiff must plead
and prove the following:
“(1) the existence of a valid and enforceable contract between the
plaintiff and a third party, (2) that defendant was aware of the contract,
(3) that defendant intentionally and unjustifiably induced a breach of the
contract, (4) that the wrongful conduct of defendant caused a
subsequent breach of the contract by the third party, and (5) that plaintiff
was damaged as a result.” (Internal quotation marks omitted.) State Auto
Property & Casualty Insurance Co. v. Distinctive Foods, LLC, 2024 IL
- 13 -Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
App (1st) 221396, ¶ 83 (quoting Bank Financial, FSB v. Brandwein,
2015 IL App (1st) 143956, ¶ 43).
¶ 53 Centrust argues that Marchi and Goodrich intentionally caused MCI to default and acted in
their own interest, not the company’s.
¶ 54 Marchi and Goodrich argue they did not improperly interfere and acted within their roles and
rights. They also argue that there was no interference because Centrust did not present any
evidence of damages, causation, or wrongful conduct.
¶ 55 The evidence presented established that Marchi and Goodrich were acting in their capacities
as officers and shareholders of MCI while attempting to preserve the company during financial
distress. The trial court could reasonably conclude that Centrust failed to prove their conduct
constituted tortious interference with the loan agreements rather than corporate decision-making.
¶ 56 F. Cross-Appeal
¶ 57 Turning to their appeal, Marchi and Goodrich first argue that the trial court erred in not
awarding them damages since the trial court found the sale of MCI was commercially
unreasonable. They argue that MCI was undervalued and therefore should be awarded damages.
¶ 58 If the plaintiff proves it is entitled to damages but does not “provide a proper basis for
computing those damages, only nominal damages can be recovered.” Keno & Sons Construction
Co. v. La Salle National Bank, 214 Ill. App. 3d 310, 312 (1991).
¶ 59 Although the trial court found the sale to be unreasonable, it did not award damages to Marchi
and Goodrich on their claim for improper disposition. The determination of damages requires proof
of the value that would have been realized in a commercially reasonable sale.
¶ 60 Marchi and Goodrich presented valuation evidence through expert testimony. However, the
trial court was not required to accept that testimony and was entitled to weigh it against other
evidence in the record.
¶ 61 Because the trial court found the evidence insufficient to establish damages with reasonable
certainty, it did not err in deciding to award relief on this claim.
- 14 -Nos. 1‑23‑1476 and 1‑23‑2101 (cons.)
¶ 62 G. Default Judgment
¶ 63 Finally, Marchi and Goodrich argue that the trial court committed reversible error when it
entered a judgment in favor of Centrust and against MCI. They primarily argue that the default
judgment entered against MCI violated due process and should be vacated because Centrust
repeatedly represented that it was not seeking relief against MCI, causing MCI not to appear or
defend itself.
¶ 64 A default judgment may be entered where a party fails to appear or defend, provided that
proper notice is given and procedural requirements are satisfied. 735 ILCS 5/2‑1301(d) (West
2024). The record reflects that MCI did not appear in the proceedings, and the trial court entered
default judgment in favor of Centrust. The attorneys for Marchi and Goodrich then filed a motion
to vacate that default judgment. On September 15, 2023, the trial court denied the motion to vacate.
On October 16, 2023, Marchi and Goodrich filed a notice of appeal indicating that the appeal was
being taken, in part, from the entry of the default judgment against MCI. Before briefing, Centrust
filed a motion to dismiss the appeal from the default judgment, Marchi and Goodrich filed a
response, and we took the motion with the case. We now grant that motion.
¶ 65 In support of its motion to dismiss, Centrust argues that Marchi and Goodrich lack standing
to challenge the default judgment because any inquiry resulting from that judgment was suffered
by MCI, not by them personally. Centrust further argues that Illinois courts have held that
shareholders do not have standing to defend a corporation unless the corporation directors acted
fraudulently by failing to defend it.
¶ 66 Marchi and Goodrich contend that they have standing to assert the arguments in the trial court
and pursue this appeal. They further assert that a party has standing to appeal if that party’s rights
have been prejudiced by the judgment. According to Marchi and Goodrich, they may challenge
the judgment derivatively on behalf of MCI because Centrust committed fraud upon the court by
concealing prior statements and filings in which they acknowledge MCI was only a nominal party.
Marchi and Goodrich also argue that Centrust’s prior representations constituted binding judicial
admissions, thereby preventing Centrust from later obtaining a judgment against MCI after MCI
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relied on those statements. Marchi and Goodrich contend that Centrust’s actions violated MCI’s
right to due process and did not receive adequate notice.
¶ 67 We first consider whether Marchi and Goodrich have standing, personally, to challenge the
default judgment entered against MCI. Generally, only a party whose rights are prejudiced by a
judgment may appeal, although a nonparty may do so if they have a “direct, immediate, and
substantial interest in the subject matter, which would be prejudiced by the judgment or benefited
by its reversal.” Marcheschi v. P. I. Corp., 84 Ill. App. 3d 873, 878 (1980). As the Illinois Supreme
Court has explained, standing requires a litigant to have suffered a distinct, palpable injury to a
legally cognizable interest. Glisson v. City of Marion, 188 Ill. 2d 211, 221 (1999). A party generally
may not assert the rights or interests of another. Id. Here, the default judgment was entered against
the corporate entity MCI, not Marchi and Goodrich individually. A corporation is a legal entity
separate and distinct from officers, directors, and shareholders. In re Rehabilitation of Centaur
Insurance Co., 158 Ill. 2d 166, 172 (1994). Marchi and Goodrich lack standing to challenge the
default judgment entered against the corporate defendant because they are separate legal entities
and are not bound by the default judgment.
¶ 68 Marchi and Goodrich suggest that they can defend against Centrust’s claim derivatively, on
behalf of MCI, but they do not cite any authority that even remotely supports that position. The
only case they cite, Duncan v. National Tea Co., 14 Ill. App. 2d 280 (1957), addressed whether
one shareholder can intervene in a derivative suit filed by another shareholder on the theory that
the plaintiff shareholder is not adequately representing the interests of the shareholder seeking to
intervene. Id. at 286. It does not stand for the proposition that a shareholder can, ispo facto, take
an appeal from a judgment against the corporation. There is limited authority supporting the
proposition that shareholders can defend suits on a corporation’s behalf derivatively, but only when
the corporate directors fail to defend either fraudulently or through willful neglect. See First
Arlington National Bank v. Addison Brookwood Country Club, Inc., 30 Ill. App. 3d 729, 730
(1975). Marchi and Goodrich have not alleged that those circumstances are present here. In their
motion to vacate the default judgment and again on appeal, they only assert that they can seek
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relief on MCI’s behalf because they are shareholders, which is not sufficient to maintain a
derivative defense of MCI.
¶ 69 Finally, Marchi and Goodrich contend that their attorneys have standing to appeal because
they are officers of the court who are duty-bound to not stand idly by while Centrust procures a
default judgment through fraud. They offer no support for this new-to-us theory of standing beyond
the preamble to the rules of professional conduct, which describes lawyers as “officer[s] of the
legal system.” Ill. R. Pro. Conduct (2010), Preamble (eff. Jan. 1, 2010). That citation is plainly
inadequate to support their remarkable claim, which requires no further discussion. Counsel are
reminded that their professional obligations include a duty to “not bring or defend a proceeding,
or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is
not frivolous.” Ill. R. Pro. Conduct (2010) R. 3.1 (eff. Jan. 1, 2010).
¶ 70 The bottom line is that the right to challenge the default judgment against MCI belongs to
MCI, not to Marchi or Goodrich, and certainly not to their lawyers. As Marchi and Goodrich lack
standing to appeal from the default judgment, we dismiss their appeal from that judgment for want
of jurisdiction. See In re Estate of Henry, 396 Ill. App. 3d 88, 100 (2009).
¶ 71 III. CONCLUSION
¶ 72 For the foregoing reasons, we dismiss Marchi and Goodrich’s appeal to the extent that they
purport to appeal from the trial court’s entry of a default judgment against MCI. In all other
respects, we affirm.
¶ 73 No. 1‑23‑1476, Affirmed.
¶ 74 No. 1‑23‑2101, Affirmed in part and dismissed in part.
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