Marvin N. Benn & Associates, Ltd. v. Nelsen Steel and Wire, Inc.

• Decision Date: 24 June 1982
• Docket Number: No. 81-1631,81-1631
• Citation: Marvin N. Benn & Associates, Ltd. v. Nelsen Steel and Wire, Inc., 437 N.E.2d 900, 107 Ill.App.3d 442, 63 Ill.Dec. 251 (Ill. App. 1982)
• Parties: , 63 Ill.Dec. 251 MARVIN N. BENN & ASSOCIATES, LTD., a corporation, Plaintiff-Appellant, v. NELSEN STEEL AND WIRE, INC., a corporation, and Daniel Nelsen, Defendants- Appellees.
• Court: Appellate Court of Illinois

Page 900

437 N.E.2d 900

107 Ill.App.3d 442, 63 Ill.Dec. 251

MARVIN N. BENN & ASSOCIATES, LTD., a corporation, Plaintiff-Appellant, v. NELSEN STEEL AND WIRE, INC., a corporation, and Daniel Nelsen, Defendants- Appellees.

No. 81-1631.

Appellate Court of Illinois First District, Fourth Division.

June 24, 1982.

George W. Hamman, and Wayne H. Michaels, Chicago, for plaintiff-appellant.

Edward S. Silber, John R. F. Baer and Paul G. Simon, Chicago, for defendants-appellees.

JIGANTI, Justice:

The plaintiff, Marvin N. Benn & Associates, Ltd. (Benn), is a professional service corporation organized to render legal services pursuant to the Professional Service Corporation Act (PSCA). (Ill.Rev.Stat.1979, ch. 32, par. 415-1 et seq.) Benn entered into a contract with Transplex, Inc., an Illinois corporation. Benn alleged that the defendants, Nelsen Steel & Wire, Inc. and Daniel Nelsen, tortiously interfered with its contract with Transplex. The defendants moved to dismiss the complaint pursuant to sections 45 and 48 of the Civil Practice Act. (Ill.Rev.Stat.1979, ch. 110, pars. 45 and 48.) The trial court dismissed the complaint on the basis that Benn is a corporation to provide legal services and services ancillary to the legal services. Since Benn's contract with Transplex was primarily a business contract which was not for legal services or services ancillary to any legal services, the trial court concluded that it was against public policy for a court to enforce such a contract. Consequently, it was also against public policy for a court to entertain a cause of action for tortious interference with such a contract.

Benn contends that the contract was for legal services and services ancillary thereto. Furthermore, Benn contends that such a contract, even if beyond the powers of a legal professional service corporation, is not violative of public policy.

The terms of the contract at issue are as follows:

"It is hereby agreed between MARVIN N. BENN & ASSOCIATES, LTD., and Transplex, Inc., * * * that:

Marvin N. Benn & Associates, Ltd., will search for and provide to the parties named contacts for the sale of any and all goods, materials, including other products, and for the organization of joint ventures in and to Tiawan (sic) and or mainland China. (Emphasis added.)

Should such efforts by Marvin N. Benn & Associates, Ltd., cause any such products and materials to be traded or ventures to be entered either on Tiawan (sic) or in mainland China, each signatory hereto agrees to pay to Marvin N. Benn and Associates 50% of all monies received, less reasonable expenses as a result of said contacts. * * *

This agreement shall be subject to the laws of Illinois and represents the complete agreement between the parties. Any changes in this agreement must be reduced to a writing and signed by all the parties." (Emphasis added.)

The contract is typed on stationery entitled "Law Offices, Marvin N. Benn & Associates, Ltd." Marvin N. Benn signed the contract as representative of Marvin N. Benn & Assoc., Ltd.

Approximately eight months after the filing of the original complaint, but before the court had ruled on the motions to dismiss, Benn filed a supplemental memorandum which included an affidavit from Marvin N. Benn. The affidavit stated:

"1. That sometime in November, 1979, Mr. Way-Sun Liao, an individual and the president of Transplex, Inc. and Robert Chang, an individual, came into my office seeking legal services to help them complete transactions between China and the United States. They were interested in setting up the proper corporate structures for international transactions with the best tax advantage. They were also interested in obtaining contacts with different suppliers of materials and services to be bartered with the government of China.

2. They informed me that they had no money to pay me and asked me if I perform (sic) the services on a contingency basis.

3. A discussion ensued as to what that contingency would be and we agreed that a reasonable fee would be one half of any and all broker's fees received by them resulting from any contacts that I provided.

4. They also sought legal advice regarding whether or not certain items could be sold to China, and if so, how. I provided contacts and legal services, including negotiations of proposed contracts in China while I was in China with them and further negotiations of contracts in their behalf in the United States.

5. The business contacts that I provided were incidental to the legal services required to bring this whole venture into being." (Emphasis added.)

When the trial court ruled, it had before it the contract, the affidavit and a copy of the plaintiff's articles of incorporation which state under the heading of "Purposes for which the corporation is organized" that Marvin N. Benn is a:

"Professional Corporation: to practice the profession of law and rendering that type of professional services and services ancillary thereto." (Emphasis added.)

The defendants argue on appeal, as they did in the trial court, that Benn cannot support an action for tortious interference with contract based on this agreement because the terms of the contract violate public policy. As support for this argument, the defendant cites section 415-6 of the PSCA which states:

"A professional corporation may be organized under this Act only for the purpose of rendering one specific type of professional service and services ancillary thereto." (Emphasis added.)

The defendant also cites certain Canons of the Illinois Code of Professional Responsibility adopted by the Supreme Court of Illinois and certain Illinois State Bar Association Ethics Opinions. These sources will be discussed later in this opinion.

The first question on appeal is whether this is a contract for legal services and services ancillary thereto. The plaintiff argues that the trial court abused its discretion in concluding that the primary purpose of the agreement was to provide business services to Transplex rather than legal services because the affidavit and the contract were before the court. The affidavit states that "the business contacts that I provided were incidental to the legal services." Benn therefore urges us, as it did the trial court, to consider the primary purpose of the contract in the light of the affidavit.

We believe that it was not error for the trial court to conclude that the primary purpose of this contract was to render business services to Transplex even when construed in the light of the affidavit. The affidavit attempts to show that this agreement grew out of an arrangement between the parties in which legal services were primary and this contract was only ancillary to these legal services. However, under the terms of the contract, Benn agrees to "search for and provide to the parties named contacts for the sale of any and all goods, materials, including other products," and to facilitate "the organization of joint ventures in and to Tiawan (sic) and or mainland China." Transplex on its part "agrees to pay to Marvin N. Benn & Associates 50% of all monies received, less reasonable expenses" as a result of said contacts. The agreement is silent on the subject of legal services to be rendered. The words "legal services" or the word "legal", itself, appears nowhere on the face of the document. There is no mention of legal fees, contingent or otherwise, to be paid for such legal services. The contract further states that Benn's remuneration is to be based upon supplying business "contacts" to Transplex rather than upon the performance of legal services. Specifically, Benn will be reimbursed for introducing business people to Transplex and will be paid a percentage of the amount of money generated by these business contacts.

The trial court concluded as a matter of law that this contract was clear according to its terms; that this was a contract to render a business service to Transplex. The business service was to find customers for Transplex. Construction of a contract is a pure question of law and the court must determine this from the document's clear language. (Kravis v. Smith-Marine, Inc. [1974], 20 Ill.App.3d 483, 314 N.E.2d 577.) Therefore, assuming that the facts contained in the affidavit are true as part of a well pleaded complaint, we still believe that it was reasonable for the trial court to conclude that the primary purpose of this contract was to create a business arrangement and legal services were only ancillary to this agreement.

Having once decided that the primary purpose of this contract is to render business services and any legal services are to be ancillary thereto, we next reach the question of whether or not it is against public policy for a court to entertain an action based upon tortious interference with such a contract. The plaintiff claims that the trial court erred in holding that it was against public policy to entertain such an action based on this contract because public policy is such an elusive concept.

We do not believe that public policy in the area of a contract which involves the professional conduct of attorneys is elusive. An agreement is against public policy if it is injurious to the interests of the public, contravenes some established interest of society, violates some public statute, is against good morals, tends to interfere with the public welfare or safety, or is at war with the interests of society or is in conflict with the morals of the time. (See Ziegler v. Illinois Trust and Savings Bank [1910], 245 Ill. 180, 91 N.E. 1041.) In the instant cause, we are dealing with a contract signed by Marvin N. Benn, an attorney, as representative of a legal professional corporation organized under the PSCA; written upon the stationery of this legal professional corporation; which has its primary purpose a business transaction with ancillary legal services. The indicia of public policy regarding lawyers, acting in a dual...