Concord Industries, Inc. v. Harvel Industries Corp.

• Decision Date: 20 March 1984
• Docket Number: No. 83-128,83-128
• Citation: 122 Ill.App.3d 845,78 Ill.Dec. 898,462 N.E.2d 1252
• Parties: , 78 Ill.Dec. 898 CONCORD INDUSTRIES, INC., a corporation, Plaintiff-Appellant, v. HARVEL INDUSTRIES CORP., a corporation, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 1252

462 N.E.2d 1252

122 Ill.App.3d 845, 78 Ill.Dec. 898

CONCORD INDUSTRIES, INC., a corporation, Plaintiff-Appellant, v. HARVEL INDUSTRIES CORP., a corporation, Defendant-Appellee.

No. 83-128.

Appellate Court of Illinois First District, Second Division.

March 20, 1984.

Deutsch, Levy & Engel, Chtd., David C. Kemerer, Chicago, of counsel, for plaintiff-appellant.

Kwiatt & Silverman, Ltd., Scott E. Tuckman, Chicago, of counsel, for defendant-appellee.

STAMOS, Justice:

This suit arises from the sale by plaintiff Concord Industries, Inc. (Concord) of a plastic drinking straw manufacturing business to defendant Harvel Industries Corporation (Harvel) pursuant to a written agreement. Concord appeals from a pre-trial ruling of the circuit court denying its motion for leave to file certain amended pleadings. Jurisdiction is premised on Supreme Court Rule 304(a) (87 Ill.2d R. 304(a)).

The written agreement from which this action arises was executed on December 14, 1979, and provided for the sale of Concord's plastic drinking straw, stirrer and sipper manufacturing business to Harvel for $700,000. The contract required Harvel to supply all of Concord's requirements for the products manufactured by the business, such products to be sold to Concord at Harvel's most favored customer rate. Concord agreed to lease factory space to Harvel for five months at an agreed monthly rate in order to allow Harvel to prepare its own facilities for the purchased machinery. Utility expenses were to be allocated on a pro rata basis. Concord also agreed not to compete with Harvel in the plastic straw, stirrer and sipper business for a period of three years.

In the period following the sale, during which Harvel leased plant space from Concord, Harvel requested janitorial and secretarial services, insurance and other goods and services from Concord. Concord provided these goods and services, although they were not called for under the contract. Concord has not been compensated for this activity.

After the sale was completed, Harvel failed to meet Concord's requirements for the manufactured products and Concord filed suit seeking recovery on several grounds. Count I of Concord's amended complaint was brought on an account stated theory. Counts II and IV were brought in breach of contract and Count III sought recovery based upon unjust enrichment. Counts V and VI, alleging tortious breach of the duty of good faith, sought compensatory and punitive damages respectively for Harvel's failure to supply Concord's requirements as required under the contract. Counts VII and VIII sought compensatory and punitive damages for tortious interference with contractual relations arising from Concord's inability to meet its obligations to its reserved customers as a result of Harvel's failure to supply Concord's requirements.

Harvel moved to strike and dismiss Counts III, V, VI, VII and VIII of the amended complaint and the trial court dismissed these counts after a hearing on August 30, 1982.

On September 29, 1982, Concord filed a motion to vacate the order of August 30, to the extent necessary to grant Concord leave to file its proposed amended Count III, seeking recovery in quantum meruit for the value of the goods and services provided to Harvel during the period of Harvel's lease of the factory space; its proposed amended Count V, alleging fraud in inducing Concord to sell its manufacturing operation; and its proposed amended Count VI, seeking damages under the Uniform Commercial Code for Harvel's failure to supply Concord's requirements.

After a hearing on Concord's motion to vacate, the trial court held that proposed amended Count III was barred as a matter of law due to the existence of an express contract between the parties, and that proposed amended Count V was barred due to the existence of a remedy in breach of contract. The trial court granted leave to file a second amended complaint incorporating proposed amended Count VI only. Concord appeals from the denial of leave to file its proposed amended Counts III and V.

Concord first contends that the trial court erred in holding that its proposed quantum meruit count was barred as a matter of law due to the existence of an express contract between the parties.

"Quantum meruit" is an expression defining the nature and extent of the liability imposed by a contract implied by law. This liability is predicated on the reasonable value of services performed. (Edens View Realty & Investment, Inc. v. Heritage Enterprises, Inc. (1980), 87 Ill.App.3d 480, 486, 42 Ill.Dec. 360, 408 N.E.2d 1069.) Generally, no quasi-contractual claims can arise when an express contract exists between the parties concerning the same subject matter upon which the quasi-contractual claim rests. Industrial Lift Truck Service Corp. v. Mitsubishi International Corp. (1982), 104 Ill.App.3d 357, 360, 60 Ill.Dec. 100, 432 N.E.2d 999.

In the instant case, Concord seeks recovery in quantum meruit for the value of the goods and services provided to Harvel during Harvel's lease of Concord's plant. Harvel argues that, under Industrial Lift Truck, Concord's claim is barred by the existence of the express contract between the parties. Concord contends, however, that it provided the goods and services to Harvel independent of the written agreement and that therefore quantum meruit recovery is not barred by the existence of that agreement. The trial court found Industrial Lift Truck to be dispositive. We find the facts in Industrial Lift Truck to be distinguishable from those of the instant case.

In Industrial Lift Truck, the plaintiff had a comprehensive dealership contract to retail the defendant's trucks in the United States. The terms of the contract permitted the defendant to unilaterally terminate the relationship at any time, and precluded amendment of the contract without the defendant's express consent. The plaintiff, on its own initiative, began modifying the trucks so as to increase their marketability in the United States. The defendant subsequently terminated the relationship and the plaintiff sought recovery in quantum meruit for the value of its modifications. The plaintiff...