Rotogravure Service, Inc. v. R. W. Borrowdale Co.

• Decision Date: 09 October 1979
• Docket Number: No. 77-1219,77-1219
• Citation: 32 Ill.Dec. 762,395 N.E.2d 1143,77 Ill.App.3d 518
• Parties: , 32 Ill.Dec. 762 ROTOGRAVURE SERVICE, INC., an Illinois Corporation, Plaintiff- Appellant, v. R. W. BORROWDALE COMPANY, a Delaware Corporation, and Russell W. Borrowdale, Sr., Defendants-Appellees. R. W. BORROWDALE COMPANY, Plaintiff, v. INROL, INC., an Illinois Corporation; Rotogravure Service, Inc., an Illinois Corporation; Frank L. Miller, Louis A. Miller, Henry Miller, and Frank A. Schellenberger d/b/a Future Fotographic Reproductions, Defendants.
• Court: United States Appellate Court of Illinois

Page 1143

395 N.E.2d 1143

77 Ill.App.3d 518, 32 Ill.Dec. 762

ROTOGRAVURE SERVICE, INC., an Illinois Corporation, Plaintiff- Appellant, v. R. W. BORROWDALE COMPANY, a Delaware Corporation, and Russell W. Borrowdale, Sr., Defendants-Appellees.

R. W. BORROWDALE COMPANY, Plaintiff, v. INROL, INC., an Illinois Corporation; Rotogravure Service,

Inc., an Illinois Corporation; Frank L. Miller, Louis A.

Miller, Henry Miller, and Frank A. Schellenberger d/b/a

Future Fotographic Reproductions, Defendants.

No. 77-1219.

Appellate Court of Illinois, First District, Second Division.

Oct. 9, 1979.

James N. Kosmond, David B. Yavitz, Chicago (Boodell, Sears, Sugrue, Giambalvo & Crowley, Chicago, of counsel), for plaintiff-appellant.

Guy & Rooney, Chicago, for defendants-appellees.

DOWNING, Justice:

Plaintiff, Rotogravure Service, Inc. (hereinafter Rotogravure), appeals an order of the circuit court of Cook County denying it leave to amend its complaint and granting defendants, R. W. Borrowdale Company and Russell W. Borrowdale, Sr.'s (hereinafter Borrowdale), motion to dismiss its complaint. The sole issue for our review is whether the trial court erred in dismissing the plaintiff's complaint after this court dismissed an appeal involving the same parties and subject matter. See Rotogravure Service v. R. W. Borrowdale Co. (1st Dist. 1975), 36 Ill.App.3d 606, 344 N.E.2d 554.

This lengthy litigation stems from two actions resulting from an oral agreement whereby Borrowdale allegedly agreed to arrange for and finance Rotogravure's purchase of an Acigraf printing system to be imported from Milan, Italy. The Acigraf system was delivered to Rotogravure at its premises located at 1335 West Chicago Avenue, Chicago, Illinois, but due to difficulties in the performance of the agreement, Borrowdale filed a replevin suit against Rotogravure in the law division of the circuit court of Cook County on November 13, 1967 (67 L 16657).

On December 1, 1967, Rotogravure initiated a suit in the chancery division of the circuit court of Cook County alleging Borrowdale's breach of the oral agreement concerning the Acigraf system (67 CH 6452). In Count I of this complaint Rotogravure alleged, Inter alia, that it (i) incurred expenses for leasehold improvements to accommodate the installation of the system at 1335 West Chicago Avenue, (ii) for sales, advertising, and promotion of the system, (iii) for equipment and machinery purchased to install and operate the Acigraf system, and (iv) that Rotogravure had been and in the future would be unable to fulfill substantial sales orders causing a loss of profits and good will. ¹ Count I of Rotogravure's complaint sought specific performance of the oral agreement and "such other and further relief as equity shall require and to the Court shall deem meet."

In Count II of the complaint Rotogravure prayed for $500,000 actual damages and $250,000 punitive damages resulting from the alleged breach of the oral agreement. The alleged actual damages included the expenses for leasehold improvements at 1335 West Chicago Avenue, for sales, advertising, and promotion, and for equipment and machinery in addition to the loss of past and future profits which had also been alleged in Count I. Count II further alleged the cost incurred in contracting work out to others to complete orders taken in anticipation of the performance of the agreement and the installation of the Acigraf system.

On December 4, 1967, the replevin action and the chancery suit were consolidated for trial. On the same date, the sheriff served a writ of replevin on Rotogravure, removed the Acigraf system from Rotogravure's place of business at 1335 West Chicago Avenue, and delivered it to Borrowdale.

The judgment order of the consolidated cases entered December 5, 1972, made separate findings of fact for the chancery and replevin actions and divided its ruling accordingly. In Part A of the order concerning the chancery matter, the trial court found that the plaintiff had sustained all the material allegations in Count I, specifically found that in 1967 plaintiff had begun making leasehold improvements at 1335 West Chicago Avenue, and found the existence of an oral installment sales contract. However, also in Part A, the court found that Rotogravure had "not sustained the allegations contained in Counts II, III and IV of its complaint" and accordingly entered judgment for Borrowdale on those counts. Part B of the order concerned the replevin suit and ordered Borrowdale to return the Acigraf system to Rotogravure then located at 4043 North Ravenswood Avenue, Chicago, Illinois, and to pay for the installation of the leasehold improvements necessary for the operation of the system at that location. Paragraph 7 of Part B stated that the court "reserves and retains jurisdiction of this cause and all of the parties hereto for the purpose of entering such other and further orders not inconsistent with the provisions of this Judgment and Decree, and as may be necessary to implement or effectuate the provisions hereof." Rotogravure neither appealed from nor did it file a motion to vacate the portions of the order denying its prayer for the damages alleged in Count II of its complaint and entering judgment for Borrowdale thereon. ²

On March 22, 1973 Rotogravure filed a motion in the trial court for a rule to show cause against Borrowdale for its failure to return and repair the Acigraf printing equipment as required by the decree of specific performance. Borrowdale responded that it was not receiving the needed cooperation of Rotogravure to comply with the decree; that the decree was too vague and uncertain; and that it was awaiting advice from Acigraf as to the possibility of repairing and making the equipment operable. The report of an engineer from Acigraf found that the cost of making the Acigraf system operable would be $297,020, and that the proposed location for the installation of the system at Rotogravure was sufficient. During one of the hearings held on plaintiff's motion to show cause, the Honorable James J. Mejda, then sitting in the chancery division of the circuit court, stated, "Mr. Borrowdale may have to respond in money damages in some manner if he can't comply with specific performance, but that's another matter. We are talking now about trying to get the specific performance." During another hearing on this motion the parties stipulated that specific performance was impossible and economically impractical, and the plaintiff withdrew its petition for a rule to show cause.

On August 29, 1974, the Honorable F. Emmett Morrissey, who had assumed the call of Judge Mejda upon the latter's assignment to the appellate court, entered an order finding in part that (1) Borrowdale had failed to specifically perform the contract; (2) that during the seven years that the litigation was pending, the Acigraf system had deteriorated and depreciated in value and usefulness and had become outdated and obsolete; (3) that based on a repair cost of $297,020, specific performance, while technically possible, would be excessively expensive and economically impractical; and (4) that by awarding specific performance sought in Count I, the court did not litigate the issues raised by the alternative relief of damages sought in Count II of the complaint. Based on these findings, Judge Morrissey ruled that Rotogravure was still entitled to specific performance. However, finding that remedy economically impractical, he vacated the December 5, 1972 judgment for Borrowdale on Count II of the plaintiff's complaint for damages and set a hearing to determine what damages Rotogravure had suffered due to Borrowdale's breach of the oral agreement.

While Rotogravure's motion to show cause was still pending, it filed another suit at law seeking damages on the $400,000 replevin bond posted in the original replevin suit (73 L 17809). Count I of that complaint alleged, Inter alia, that Borrowdale's wrongful replevin had caused great damage to its premises at 1335 West Chicago Avenue, deprived it of the use of the system causing it loss of profits and customers (P 13), and required it to expend large sums of money for the services of attorneys. Count I sought $400,000 plus costs and other relief that the court deemed just and equitable. Count II of that complaint alleged that Borrowdale's refusal to return and install the equipment caused Rotogravure to lose profits, business, and customers. In that count Rotogravure sought the replacement value of the Acigraf system, praying for judgment for $1,000,000 plus costs and other relief. On June 25, 1976, the Honorable Daniel Coman entered an order granting Borrowdale's motion for summary judgment only as to the allegations of loss of profits and customers contained in paragraph 13 of the complaint on the ground that the damage issue had been decided adversely to Rotogravure in the prior suit.

Borrowdale appealed Judge Morrissey's order vacating its judgment on Count II of the plaintiff's complaint for damages. In granting the plaintiff's motion to dismiss that appeal, this court first noted that the order itself provided that it was not yet final and appealable. Thereafter, we stated:

"The amount of damages, if any, remains open for determination and the judgment may not be executed until this issue is resolved. The trial court has ordered further hearings to settle the issue of what damages, if any, are owing as a result of Borrowdale's breach. The element of damages is a substantial issue in the controversy which remains to be settled." (Rotogravure Service, supra at 609-10, 344 N.E.2d at 557.)

Since the cause was being returned to the trial court for further proceedings, we thereafter considered the second issue raised, I. e., whether Judge Morrissey had jurisdiction to vacate the judgment denying the plaintiff's claim for damages when there was no section 72 motion before the court and no appeal had been taken...