Gaslite Illinois, Inc. v. Northern Illinois Gas Co.

• Decision Date: 20 April 1977
• Docket Number: No. 75--286,75--286
• Parties: , 6 Ill.Dec. 90 GASLITE ILLINOIS, INC., Plaintiff-Appellant, v. NORTHERN ILLINOIS GAS CO., Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 725

362 N.E.2d 725

46 Ill.App.3d 917, 6 Ill.Dec. 90

GASLITE ILLINOIS, INC., Plaintiff-Appellant, v. NORTHERN ILLINOIS GAS CO., Defendant-Appellee.

No. 75--286.

Appellate Court of Illinois, Second District, First Division.

April 20, 1977.

Jenner & Block, Robert E. Pfaff and Lisa M. Hill, Chicago, Hall, Meyer, Fisher, Holmberg, Snook & May, Waukegan, for plaintiff-appellant.

Mayer, Brown & Platt, Patrick W. O'Brien, Henry F. Field and Thaddeus J. Marciniak, Chicago, for defendant-appellee.

OPINION UPON DENIAL OF REHEARING ^*

GUILD, Justice:

The jury herein awarded damages to the plaintiff in the sum of $93,348.73. The court entered judgment on the verdict. Upon post-trial motion the trial court vacated the judgment entered on the verdict and entered judgment for the defendant Non obstante veredicto. The plaintiff appeals and defendant cross appeals from the denial of its alternative motion for new trial.

Both plaintiff and defendant have raised numerous issues. However, in view of our decision herein, we shall consider basically only two issues: first, whether the trial court erred in setting aside the judgment entered on the verdict of the jury and entered judgment for the defendant; and second, whether the trial court properly denied defendant's alternative motion for a new trial.

The plaintiff, Gaslite Illinois, Inc., (hereinafter called Gaslite), was organized and incorporated in 1959, its principal business being the distribution and installation of gas lamps or lights. Commencing in the early 1960's, Gaslite provided the installation and distribution of gas lights to the defendants, Northern Illinois Gas Co., (hereinafter NIGas), which were promoted and sold by NIGas through its employees and salesmen to existing gas customers. As a part of this procedure, in the Spring of each year NIGas would distribute with its gas bills a 'flyer' setting forth in detail the cost and installation of outdoor gas fixtures. In 1963 this was expanded to include the installation and sales of outdoor gas grills, which were incorporated in the flyers issued by NIGas thereafter. It would appear that this arrangement by NIGas was a virtually exclusive business with Gaslite. The distribution and the installation of the gas lights, and, subsequently gas grills, proceeded from the early 1960's up until 1970 when Gaslite had approximately 30--35 crews installing gas lights and grills during the spring and summer months. The actual sale of the items was promoted by and through NIGas, which would in turn, upon receipt of orders, inform Gaslite and Gaslite would then send a crew to the NIGas customer's home, the equipment would be installed, an order would be signed and Gaslite would invoice it to NIGas which would do the actual billing. Gaslite would then be reimbursed or paid by NIGas for the gas light or gas grill and the installation thereof.

In September, 1970, Mr. Klein, the president of Gaslite, submitted a synopsis of the 1970 campaign to his principal contact at NIGas, a Mr. Kaltwasser, who was the supervisor of sales for NIGas. The details of the upcoming 1971 campaign were discussed and Gaslite provided tentative prices for the items which would be firmed up at the end of the year when the actual figures were obtained from its suppliers. In November, 1970, NIGas had a meeting with its suppliers at Northern Illinois University in DeKalb which Klein attended. At that meeting NIGas representatives announced that they intended to have a gas light and gas grill campaign beginning on April 1, 1971 and by that time Mr. Klein had seen the NIGas' 1971 preliminary plan for the same. Klein testified that in December, 1970 he met with Joseph Gauthier, the president of NIGas, and Klein advised Gauthier that he had heard a rumor relative to the upcoming 1971 campaign for the sale of gas lights and grills. Examination of the record indicates that this rumor pertained to a hearing before the Illinois Commerce Commission relative to the curtailment of the use of gas due to the energy crisis. At that time Gauthier advised Klein that NIGas expected this issue to be disposed of before the Commerce Commission by the time of the proposed campaign; that they were 'holding' but were continuing with their plans for the campaign. Klein testified upon cross-examination that he could not remember whether the actual word 'hold' was used. A deposition of Klein was read to Mr. Klein which stated:

'(NIGas) were going before the Commission to lop off the interruptibles and they felt it best to keep a low profile until after the Commission ruling, and that they were hopeful that they would have a ruling before the March kickoff or the April 1st kickoff of the campaign in which case we would go ahead full blast, but there was a temporary hold, that they wanted to keep a low profile during the time they were before the Commission and not give the Commission any cause to come back at them.'

Klein further testified that Frank Hartman, the coordinator of gas light and grill sales for NIGas, who was responsible for the planning of the gas light and grill campaign, further advised Klein in January, 1971 that NIGas was going ahead with its preparations for the 1971 spring sales campaign. Finally, on March 12, 1971, David Wallin, vice president of marketing for NIGas, advised Klein by telephone that the 1971 gas light and gas grill campaign, which was to commence on April 1, 1971, would not proceed as planned. It should be expressly noted at this juncture that NIGas had prepared brochures, flyers or mailers for the April 1, 1971 campaign at an expense of $22,000 to NIGas. These were not used and the campaign did not proceed.

On May 3, 1971 Klein, by letter, advised Joseph Kaltwasser, the director of sales promotion, advertising and training for NIGas, that he would appreciate the payment of an advance of $50,000 to be credited against any settlement agreed upon at a future date. On May 18, 1971 NIGas issued a check and paid Gaslite Illinois, Inc. the sum of $50,000 with the following notation thereon:

'Partial payment for assistance to Gaslite Illinois, Inc. arising out of the curtailment by NIGas of the 1971 market plan. Assistance directed to sum listed in letter dated May 3, 1971, from Gaslite Illinois Inc.'

Subsequently, Gaslite ran promotional advertising and sales of its own incurring expenses of $39,475.32. Gaslite's accountant and treasurer testified that the total losses incurred by Gaslite as a result of advertising costs and lost profits on sales to NIGas amounted to $143,348.78. He further testified that when the sum of $50,000 received from NIGas was deducted, Gaslite sustained a net loss of $93,348.73. This was the amount of the jury verdict herein.

It is to be noted that the original complaint herein consisted of three counts. At the conclusion of the plaintiff's case the trial court granted the motion of the defendant to strike Counts II and III, denied the motion to strike Count I and the same was submitted to the jury. Paragraph 9 of Count I of the original complaint herein stated that:

'On or about May 18, 1971, NIGas paid Gaslite $50,000 as 'partial payment for assistance to Gaslite Illinois Inc. arising out of the curtailment by NIGas of the 1971 market plan.' A copy of the check is attached hereto as Exhibit A.'

The answer of NIGas to the original complaint admitted this allegation.

The trial herein commenced on July 10, 1974 and on July 11th NIGas moved the court to withdraw its answer to paragraphs 9 and 10 as having been 'innocently admitted because the fact of partial payment was true.' This motion further sought to strike paragraphs 8, 9 and 10 of Count I of the plaintiff's complaint. The record does not disclose the disposition of this motion. It would appear, however, that the amended complaint which was filed subsequent to trial upon motion for leave to amend the pleading to conform to the proof, contained the basic allegations of paragraphs 8, 9 and 10 of Count I setting forth the partial payment by NIGas. The basic change in the amended complaint substituted the words 'implied promise' for the word 'agreement' (between the parties) and the ad damnum was reduced to $93,475.00, the amount of the judgment. In view of the granting of plaintiff's motion to amend the pleadings to conform with the proof, it would appear that defendant's motion to strike paragraphs 8, 9 and 10 and to withdraw defendant's answer to paragraphs 9 and 10, was not granted.

As indicated above, a judgment was entered on the verdict on July 15, 1974. Upon the basis of the post-trial motions six months later, on February 14, 1975, the verdict of the jury was vacated, set aside and held for naught.

The question squarely presented to this court is whether a contract existed between Gaslite Illinois, Inc., and Northern Illinois Gas. This issue was submitted to the jury by the court under the following instructions given at the request of the defendant:

'The theory of Count I of plaintiff's complaint is that an agreement existed between plaintiff and defendant. Only if you should so find under Count I may you consider the question of damages.'

'Should you find that an agreement existed between plaintiff and defendant, the measure of damages would be the amount which would compensate the plaintiff for the loss, if any, which a fulfillment of the aggrement would have prevented or the breach of it entailed. In other words, the plaintiff should be placed in the same position it would have been had the agreement been performed, but in no better position. Only those damages may be recovered which the parties to the contract contemplated, at the time of the agreement, would likely occur, and did occur, upon breach, less all amounts recovered by efforts to mitigate.'

'In order to find the defendant liable to the plaintiff under Count I of the complaint, you must find that an agreement existed between the parties. An agreement arises where there...