Rose v. Mavrakis

• Decision Date: 30 September 2003
• Docket Number: No. 1-03-1064.,1-03-1064.
• Parties: Michael ROSE, Plaintiff-Appellee, v. Theodore MAVRAKIS, Defendant-Appellant (Costas Mavrakis and Theros International Gaming, Inc., Defendants). Constantinos Piladakis and Michael Rose, Plaintiffs-Appellees, v. Theodore Mavrakis, Defendant-Appellant (Costas Mavrakis, Defendant).
• Court: United States Appellate Court of Illinois

799 N.E.2d 469

343 Ill. App.3d 1086

278 Ill.Dec. 751

Michael ROSE, Plaintiff-Appellee, v. Theodore MAVRAKIS, Defendant-Appellant (Costas Mavrakis and Theros International Gaming, Inc., Defendants).

Constantinos Piladakis and Michael Rose, Plaintiffs-Appellees, v. Theodore Mavrakis, Defendant-Appellant (Costas Mavrakis, Defendant).

No. 1-03-1064.

Appellate Court of Illinois, First District, Third Division.

September 30, 2003.

Mandell Menkes & Surdyk, Chicago (Bruce N. Menkes, Carol A. Mengel, of counsel), for Appellant Theodore Mavrakis.

Winston & Strawn, Chicago (Kurt L. Schultz, Gregory C. Vamos & M. Faiyaz Hussain, of counsel), for Appellee Constantinos Piladakis.

Presiding Justice HOFFMAN delivered the opinion of the court:

Theodore Mavrakis, appeals from a circuit court order requiring him to comply with an oral settlement agreement the court found he had entered into with Constantinos Piladakis in these related actions. For the following reasons, we affirm.

The instant litigation arises out of the ownership and operation of a casino located in Greece. That casino is wholly owned by Theros International Gaming, Inc. (Theros), an Illinois corporation. Mike Rose, Theodore Mavrakis (Mavrakis), and Costas Mavrakis (Costas) have been shareholders and directors of Theros since its incorporation. On July 14, 1998, Rose initiated this litigation by filing a complaint, docketed as case number 98 CH 09279, against Mavrakis. Rose later amended his complaint, adding as defendants Costas and Theros. In the amended complaint, Rose alleged various causes of action, including fraud, breach of fiduciary duties, civil conspiracy, breach of the corporation's shareholders' agreement, breach of contract, and conversion of corporate funds and also sought relief pursuant to sections 8.35(b) and 12.56 of the Business Corporation Act of 1983 (805 ILCS 5/8.35(b), 5/12.56 (West 1998)).

On March 19, 2002, Mavrakis filed a counterclaim in case number 98 CH 09279, seeking declaratory and injunctive relief against Rose, Costas, and Theros, as well as against Constantinos Piladakis and Sadoula Paleodemou, both of whom recently had been elected to Theros' board of directors.

On August 23, 2002, Piladakis filed a single count complaint, docketed as case number 02 CH 15460, against Costas. Subsequently, Piladakis filed an amended complaint which added Rose as a plaintiff and Mavrakis as a defendant and alleged causes of action for breach of fiduciary duty and breach of contract and sought shareholder remedies pursuant to section 12.56 of the Business Corporation Act of 1983 (805 ILCS 5/12.56 (West 2000)).

On September 4, 2002, Mavrakis and Costas each moved separately to consolidate case number 02 CH 15460 with case number 98 CH 09279. On September 5, 2002, the motions to consolidate were denied, but both cases were assigned to the same judge as related cases.

On November 18, 2002, the trial court entered an order scheduling a settlement conference for the related cases on December 23 and 24, 2002. Although the record does not contain a transcript of proceedings or a written order from either of those dates, all parties to this appeal agree that the settlement conference took place as scheduled.

On January 21, 2003, Piladakis filed a "Motion to Enter and Enforce the Stipulated Settlement Agreement." In that motion, Piladakis alleged that, on December 24, 2002, he and Mavrakis "entered into a `hand shake' agreement to settle their disputes" and that the "precise terms and details of the agreement reached" were "to be memorialized in writing and presented to the Court for its approval on January 23, 2003." He further alleged that, by January 20, 2003, "both parties had agreed to all the material terms in the Agreement" but that, nonetheless, Mavrakis thereafter refused to sign a written agreement.

Mavrakis responded to Piladakis' motion, denying that the parties had reached a settlement agreement on December 24, 2002. He asserted instead that, on that date, the parties left the court's chambers "recognizing that it was essential that they enter into a written understanding in order to resolve numerous essential terms that had yet to be addressed."

On March 12, 2003, the trial court entered a written order granting Piladakis' motion to enforce the settlement agreement "for the reasons stated on the record in open court." The transcript of the proceedings from that date reveals that, in ruling on the motion, the trial judge stated that "extensive pretrial settlement conferences" had been conducted on December 23 and 24, 2002, in his chambers. According to the judge, "at times" the attorneys for all parties, including Costas and Rose, were present and "at times" Piladakis, Mavrakis, and Rose themselves were present in chambers while the conference was taking place. The judge acknowledged that he was not present during all of the settlement conference but, nonetheless, found that an agreement had been reached "as to the essential terms of a settlement between Constantinos Piladakis and Theodore Mavrakis." He stated as follows:

"[T]hose terms were repeated by the Court in the presence of counsel for Piladakis and Theodore Mavrakis as well as Theodore Mavrakis himself. It was agreed between counsel that a written agreement would be prepared, but at the Court's insistence both sides agreed that a settlement had been reached, subject only to contingency set forth within the terms of the agreement itself."

The trial judge went on to set forth the terms of which the parties' settlement agreement consisted. According to the judge, the settlement agreement provided, inter alia, that: (1) the settlement will resolve all claims between Mavrakis and Piladakis; (2) upon the receipt of an approval from the Casino Commission of Greece, Mavrakis will sell all of his shares of Theros stock to Piladakis for the sum of $9 million, which amount is payable in a series of installment payments due over a period of 20 months; (3) Mavrakis and Piladakis will both cooperate in seeking the requisite approval from the Casino Commission of Greece; (4) Mavrakis will release all of his claims against Rose; and (5) Piladakis will secure a release of Rose's claims against Mavrakis. For our purposes, it is not necessary to set forth the remainder of the terms enumerated by the trial judge. The judge ordered that the parties "without unnecessary delay * * * initiate the action called for under the agreement." Mavrakis then brought the instant appeal pursuant to Supreme Court Rule 307(a)(1) (188 Ill.2d R. 307(a)(1)).

Before the trial court, Mavrakis argued that the parties did not reach a settlement agreement during the settlement conference conducted on December 24, 2002. On appeal, however, Mavrakis does not contest the trial court's finding that, on that date, the parties reached an oral agreement as to the terms enumerated by the court in its March 12, 2003, ruling. Rather, Mavrakis asserts that the trial court erred in ordering the parties to perform under that oral agreement because: (1) the agreement is lacking in certain material terms and, as such, does not constitute a contract; and (2) even if the oral settlement agreement does constitute a contract, it is unenforceable because it violates section 1 of the Frauds Act (740 ILCS 80/1 (West 2000)).

We will begin by addressing Mavrakis' contention that the parties' settlement agreement does not contain enough material terms to constitute a contract. Specifically, Mavrakis alleges that the settlement agreement leaves unresolved the following terms, which he maintains are material to the formation of a contract: (1) when the closing on the sale of Mavrakis' shares of stock to Piladakis will take place; (2) when the releases to be given by Piladakis and Rose to Mavrakis will be executed; and (3) the consequences of a default by Piladakis.

A settlement agreement is in the nature of a contract and is governed by principles of contract law. Solar v. Weinberg, 274 Ill.App.3d 726, 731, 210 Ill.Dec. 903, 653 N.E.2d 1365 (1995); James v. Lifeline Mobile Medics, 341 Ill.App.3d 451, 275 Ill.Dec. 230, 792 N.E.2d 461 (2003). "[I]n order for a valid contract to be formed, an `offer must be so definite as to its material terms or require such definite terms in the acceptance that the promises and performances to be rendered by each party are reasonably certain.' (J. Williston, Contracts §§ 38 through 48 (3d ed.1957); 1 Corbin, Contracts §§ 95 through 100 (1963).)" Academy Chicago Publishers v. Cheever, 144 Ill.2d 24, 29, 161 Ill.Dec. 335, 578 N.E.2d 981 (1991). Stated otherwise, in order for a contract to be capable of enforcement, its terms and provisions must enable the court to determine what the parties have agreed to do. Universal Scrap Metals, Inc. v. J. Sandman & Sons, Inc., 337 Ill.App.3d 501, 504-05, 272 Ill.Dec. 35, 786 N.E.2d 574 (2003). Although some terms of a contract may be missing or left to be agreed upon, the parties' failure to agree upon an essential term of a contract indicates that the mutual assent required to make a contract is lacking and, thus, there is no enforceable contract. Trittipo v. O'Brien, 204 Ill. App.3d 662, 672, 149 Ill.Dec. 505, 561 N.E.2d 1201 (1990). The lack of nonessential details, however, will not render a contract unenforceable. First National Bank of Oak Lawn v. Minke, 99 Ill.App.3d 10, 14, 54 Ill.Dec. 499, 425 N.E.2d 11 (1981).

Initially, we consider Mavrakis' contention that the parties' settlement agreement does not constitute a contract because it is silent as to the timing of the closing on the sale of Mavrakis' shares of stock to Piladakis. Specifically, Mavrakis notes, the agreement is silent as to the period of time allotted for the parties to obtain approval for the transfer of the shares from the Casino Commission of Greece. Mavrakis is correct that the settlement agreement, as set forth by the trial court at the hearing on Piladakis' motion to enforce, is...