Carrillo v. Jam Productions, Ltd.

• Decision Date: 03 August 1988
• Docket Number: Nos. 86-1825,86-2405,s. 86-1825
• Citation: 527 N.E.2d 964,173 Ill.App.3d 693,123 Ill.Dec. 326
• Parties: , 123 Ill.Dec. 326 Don CARRILLO, individually and on behalf of all others similarly situated, Plaintiffs, v. JAM PRODUCTIONS, LTD., et al., Defendants (Jam Productions, Ltd., Third-Party/Plaintiff-Appellant; BADK, Inc., Third-Party/Defendants-Appellees; Production Associates, Ltd., et al., Third-Party Defendants).
• Court: United States Appellate Court of Illinois

Page 964

527 N.E.2d 964

173 Ill.App.3d 693, 123 Ill.Dec. 326

Don CARRILLO, individually and on behalf of all others similarly situated, Plaintiffs, v. JAM PRODUCTIONS, LTD., et al., Defendants (Jam Productions Ltd., Third-Party/Plaintiff-Appellant; BADK, Inc. Third-Party/Defendants-Appellees; Production Associates Ltd., et al., Third-Party Defendants).

Nos. 86-1825, 86-2405.

Appellate Court of Illinois First District, Third Division.

Aug. 3, 1988.

Don E. Glickman, James A. Flesch, Hilda C. Contreras, Chicago, for third-party/plaintiff-appellant.

Paul E. Lehner, Philip Fertik, Chicago, for third-party defendants-appellees Badk, Inc., Bob Arum, Top Rank, Inc.

Richard O'Brien, Chicago, for third-party/defendants-appellees Don King, Don King Productions, Inc.

Justice RIZZI delivered the opinion of the court:

Third-party plaintiff-appellant, Jam Productions, Ltd. (Jam), appeals from a judgment of the circuit court of Cook County dismissing its complaint as a result of a section 2-615 motion made by third-party defendants-appellees, BADK, Inc., Bob Arum, Don King, Don King Productions, Inc., and Top Rank, Inc. We reverse and remand.

This litigation stems from an agreement between Jam and BADK to telecast the June 20, 1980, Sugar Ray Leonard/Roberto Duran prizefight (prizefight). During the closed circuit telecast, there was allegedly a problem with the television picture and sound. Soon thereafter, Don Carrillo, a patron of the closed circuit telecast, filed a suit on behalf of himself and a class he purported to represent. In his two count complaint against Jam, Carrillo sought (1) to restrain Jam from disposing of the proceeds from the ticket sales to the telecast and (2) a refund of the cost of the tickets.

Jam moved for and was granted a judgment on the pleadings as to Carrillo's count seeking a preliminary injunction. The remaining count was transferred to the law division. This count was ultimately appealed to the Illinois Supreme Court because the trial court had denied class certification. The supreme court held that the class action was not properly raised by Carrillo in the trial court and remanded the case to ascertain whether Carrillo's case could in fact be maintained as a class action. Carrillo v. Jam Productions, Ltd., and Frank Fried (1983), 97 Ill.2d 371, 73 Ill.Dec. 552, 454 N.E.2d 649. Carrillo is not a party to this appeal.

In the event that Carrillo might prevail in his suit against Jam, Jam filed third-party claims seeking indemnification from: (1) BADK for alleged breach of its agreement with Jam; (2) Don King, Don King Productions, Bob Arum and Top Rank as BADK's alleged alter egos on the theory of piercing the corporate veil and (3) Top Rank for failure to procure proper insurance coverage to offset any losses that might arise from Carrillo's suit. Jam also filed a third-party action against National Union Fire Insurance Company (National) seeking a declaration of rights under the insurance policy.

The agreement entered into between Jam and BADK was a Television License Agreement (Agreement). BADK was formed by Bob Arum and Don King for the purpose of promoting the prizefight. The terms of the Agreement provided that Jam would promote the prizefight in Chicago, and BADK would deliver the video and audio signal of the fight to Jam in return for 55% of the gross ticket receipts. The Agreement further provided that Jam was to procure insurance naming both Jam and BADK as insureds for all refunds that might occur due to any malfunctioning of the transmission of the telecast. Top Rank agreed to purchase, on behalf of Jam, the type of insurance required by the Agreement. Top Rank then supplied Jam with an "Application for Closed Circuit Television Breakdown Insurance" from National, and insurance was thereafter obtained from National by Jam. National has however now taken the position that because there was only a partial, rather than a total blackout of the video and audio signal of the prizefight, it does not have to provide liability coverage for the claims made by Carrillo. National is not a party to this appeal.

In the circuit court, the third-party defendants filed 2-615 motions to dismiss Jam's third-party complaints. To support these motions, they argued that the existence of the insurance provision in the Agreement between Jam and BADK precluded Jam from asserting any right of implied indemnity. The third-party defendants therefore claimed that Jam's complaint does not state a cause of action upon which relief can be granted.

The circuit court granted the third-party defendants' motions to dismiss. On appeal, Jam argues that (1) the Agreement did not manifest any intent by Jam and BADK to eliminate Jam's right to be indemnified for any losses it may suffer as a result of BADK's breach of contract and (2) implicit in the Agreement between Jam and BADK is a duty running from BADK to Jam to indemnify Jam for any damages that Jam incurs as a result of BADK's breach of contract. Thus, Jam concludes that the circuit court erred in dismissing its complaint for failure to state a cause of action.

A 2-615 motion to dismiss a complaint for failure to state a cause of action attacks the legal sufficiency of a complaint rather than the factual sufficiency. The factual allegations in a complaint are important to the extent that they are necessary to state the elements of a claim upon which relief may be granted. Claire Associates v. Pontikes (1986), 151 Ill.App.3d 116, 123, 104 Ill.Dec. 526, 540-41, 502 N.E.2d 1186, 1190-91. However, at the pleading stage, it is not necessary that a plaintiff prove his case; he need only allege sufficient facts to state all of the elements necessary to constitute his cause of action and inform the defendant of the claim against which he must defend. Shugan v. Colonial View Manor (1982), 107 Ill.App.3d 458, 462, 63 Ill.Dec. 82, 86, 437 N.E.2d 731, 735. Thus, unless it is obvious that no set of facts could be established by a plaintiff that would entitle him to relief, a dismissal with prejudice should not be granted. Thomas v. Zamberletti (1985), 134 Ill.App.3d 387, 389, 89 Ill.Dec. 387, 388, 480 N.E.2d 869, 870. In considering a motion to dismiss, the pleadings are to be...