Hutchinson v. Brotman-Sherman Theatres, Inc.

• Decision Date: 31 March 1981
• Docket Number: No. 79-2349,BROTMAN-SHERMAN,79-2349
• Citation: 94 Ill.App.3d 1066,419 N.E.2d 530,50 Ill.Dec. 422
• Parties: , 50 Ill.Dec. 422 James R. HUTCHINSON, d/b/a T.K.O. Productions, Plaintiff-Appellee, v.THEATRES, INC. and South Shore Amusements, Inc., Defendants- Appellants.
• Court: United States Appellate Court of Illinois

Page 530

419 N.E.2d 530

94 Ill.App.3d 1066, 50 Ill.Dec. 422

James R. HUTCHINSON, d/b/a T.K.O. Productions, Plaintiff-Appellee, v. BROTMAN-SHERMAN THEATRES, INC. and South Shore Amusements, Inc., Defendants- Appellants.

No. 79-2349.

Appellate Court of Illinois, First District, Second Division.

March 31, 1981.

Richard Orlikoff and Alexander Terras, Chicago (Frankel, McKay & Orlikoff, Chicago, of counsel), for defendants-appellants.

Reese & Schaffner, Chicago (Sidney Z. Karasik and Michael Kreloff, Chicago, of counsel), for plaintiff-appellee.

HARTMAN, Presiding Justice:

Defendants appeal from a judgment granting to plaintiff both compensatory contract damages and punitive damages sounding in tort. Questions raised on the pleadings include whether: a partner may sue to enforce a partnership claim without joining all the partners as plaintiffs; pleadings were improperly amended to state facts inconsistent with facts stated in prior pleadings; a party may be added as a defendant during the course of trial by filing an amended complaint without service of summons; and a defendant may be denied leave to file a counterclaim where no counterclaim has been submitted to the court. Other issues presented for review are whether: punitive damages were properly awarded under the circumstances presented; contract damages may be awarded against a noncontracting party; the record supports a judgment against an added party; and other evidentiary and damage issues. For the reasons which follow, we vacate and amend in part and affirm.

The 1974 telecast of the Muhammad Ali and George Foreman heavyweight championship fight from Zaire, Africa (hereinafter "the fight") was organized by two New York companies which, on June 3, 1974, conveyed to Herbert Muhammad (hereinafter "Muhammad") exclusive telecast rights for the fight, including Chicago, Gary-Hammond, Indiana and downstate Illinois. He was granted the authority to negotiate or assign these rights to anyone he wished. Muhammad then allegedly assigned the Chicago and Gary-Hammond rights to a partnership formed after June 3, 1974, known as TKO Productions (hereinafter "TKO"), consisting of six partners, Irving Bloom, James Hutchinson, Walter Turner, Terry Shoemaker, David Potter and Charles Fritsch. Under the Muhammand-TKO assignment of rights, the latter agreed to pay the former $60,000 and meet certain other conditions required by one of the New York telecast promoters. On June 19, 1974 one of the TKO partners, Bloom, an attorney, contacted Oscar Brotman, president of both Brotman-Sherman Theatres, Inc. (hereinafter "BST") and South Shore Amusements, Inc. (hereinafter "SSA"), who had exhibited many fights in the past. Brotman said he was interested in this fight and invited the TKO partners to meet in his office, which they did.

Brotman had been trying for some time to get the telecast rights to the fight for himself and, with the TKO partners present, he called the New York telecasting company to verify Muhammad's claim of exclusive rights, part of which TKO asserted possession. Confirmation of Muhammad's exclusive rights was made and the TKO partners and Brotman commenced negotiations, after which the TKO partners retired to Bloom's office and a draft agreement was typed for signatures. The partners then returned to Brotman's office with the agreement, which revealed the contracting parties to be "James R. Hutchinson, d/b/a T.K.O. Productions, hereinafter designated as First Party and Brotman-Sherman Theatres, Inc., hereafter designated as Second Party." A cover letter signed by Hutchinson was attached. Brotman and Hutchinson signed the contract and some copies. The TKO partners returned to Bloom's office where they discovered that they had taken only unsigned copies of the agreement with them and had left two signed copies with Brotman. The TKO partners returned once again to Brotman's office and after discussion all agreed that paragraph 4 of the contract made little sense and the same was scratched out by Brotman and initialed by both Brotman and Hutchinson. Hutchinson and another partner, Shoemaker, returned to Bloom's office and the agreement was redrafted deleting only paragraph 4, the balance being identical in all other respects. Hutchinson and Shoemaker then again returned to Brotman's office and asked to have Brotman sign the document. Brotman's receptionist, after announcing their visit and purpose, took it into Brotman's office and returned with it shortly thereafter handing Hutchinson the document bearing Brotman's signature, the authenticity of which is in dispute. The next day, a $60,000 escrow agreement was entered into between Brotman and Muhammad at Amalgamated Trust and Savings Bank in accordance with paragraph 1 of the June 19th agreement between the parties; however, a $5,000 escrow to be deposited with Chicago Title and Trust Co., in accordance with paragraph 2 of the agreement, was never opened.

The fight was telecast via closed circuit television on October 29, 1974. Plaintiff's evidence reveals that on the night of the fight, Brotman's general manager, Robert Kennedy, saw Hutchinson at the International Amphitheatre and showed him an alteration in paragraph 3 of the contract, which provided that instead of TKO receiving $1.00 per ticket after the $60,000 payable to Muhammad was recouped in gross receipts, TKO was to receive only $1.00 per ticket after the first 60,000 tickets were sold. This alteration was initialed only by Brotman and Kennedy asked Hutchinson to add his initials to the alteration. Hutchinson refused, asserting reliance on the document as signed on June 19, 1974. TKO's efforts to secure compensation under the contract were unavailing.

A two count unverified complaint was filed in December 1974 naming "Herbert Muhammad and James R. Hutchinson dba T.K.O. Productions," as plaintiffs and "Brotman-Sherman Theatres, Inc.," as defendant. Count I sought contract damages of the $5,000 in escrow money which would have been payable to TKO after the fight had been shown and $1.00 per ticket over the first $60,000 in gross receipts. Count II sought damages for BST's having displayed the fight downstate without authority, for which additional damages were sought. BST filed an answer denying that it had any agreement with plaintiff Muhammad, admitting that it established a $60,000 escrow, and denying that it was required to do so. Muhammad subsequently signed a release with BST and he was later dismissed by stipulation in November 1976.

BST moved to dismiss the remaining action in October 1977, claiming that Muhammad was also doing business as TKO Productions and that since he had signed the release with BST, the basis of the lawsuit had been dissipated. An unverified amended complaint at law was thereafter filed by Hutchinson "d/b/a T.K.O. Productions" as plaintiff naming BST as defendant, this time alleging in count I that: Muhammad, possessor of exclusive rights for the distribution and showing by closed circuit television of the fight, had assigned part of his rights to the distribution of said fight to plaintiff Hutchinson; the parties entered into a written contract with BST, a copy of which was attached as Exhibit A, purporting to incorporate the original June 19, 1974 agreement with paragraph 4 deleted; BST complied with the $60,000 escrow but violated the agreement to open the $5,000 escrow account; and BST refused to pay TKO the sum of $1.00 per ticket over the first $60,000 of gross receipts. Count II again claimed damages for the unauthorized display of the fight by BST to downstate communities. BST moved to dismiss the amended complaint based upon an asserted contradiction between allegations in the original complaint which described TKO's right to contract with Brotman as having been based upon Muhammad's "concurrence," and allegations in the amended complaint that TKO's right to contract with BST was based upon an "assignment" by Muhammad to TKO, and also upon the absence of other partners of TKO as parties plaintiff. Plaintiff added a third count to the amended complaint, claiming that Brotman had knowingly made false representations in order to induce TKO to transfer its rights to BST. The trial court denied defendants' motion to dismiss. During the course of the trial, pursuant to leave of court, a second amended complaint was filed adding SSA as a party defendant, over objections.

The cause was heard by the court without a jury, commencing in February, and continuing from time to time until the close of the trial on June 18, 1979. Plaintiff was awarded $29,837 plus interest from November 1, 1974. That figure was computed by taking gross receipts of $443,745 minus the first $60,000 payable to Muhammad; dividing the balance by $20.00 per ticket, leaving 19,187 tickets sold after the first $60,000 in gross receipts; and arriving at liquidated damages of.$19,187. To that figure was added the $5,000 which was not put in escrow pursuant to paragraph 2 of the agreement and $5,650 for the $113,500 in gross receipts returned to ticket holders at three theatres which experienced mechanical breakdowns. In addition to the $29,837 plus interest, the court imposed an award of $30,000 in punitive damages based upon Brotman's conduct. On November 8, 1979 the court denied BST and SSA's motion to vacate or modify judgment. BST appeals from each of the above orders and SSA appeals from those orders and judgments entered after it was made a party on February 28, 1979.

I.

BST and SSA first assert that the complaint should have been brought in the names of each of the six TKO partners rather than James R. Hutchinson doing business as TKO Productions and that they were misled into believing that TKO Productions was the name of a partnership composed of Herbert Muhammad and James R. Hutchinson. They insist that Hutchinson's failure to join his partners as plaintiffs or to fully and fairly allege his relationship with those...