Ruskin v. Rodgers

• Decision Date: 17 December 1979
• Docket Number: No. 79-146,79-146
• Parties: , 35 Ill.Dec. 557 Jerrold RUSKIN, an Individual, Plaintiff-Appellee, v. James T. RODGERS, an Individual, Pelham Corporation, an Illinois Corporation, and First Wilmette Corporation, an Illinois Corporation, Defendants-Appellants. AIMCO, INC., an Illinois Corporation, and Louis F. Allocco, an Individual, Intervening Plaintiffs-Appellants, v. James T. RODGERS, an Individual, Pelham Corporation, an Illinois Corporation, and First Wilmette Corporation, an Illinois Corporation, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 623

399 N.E.2d 623

79 Ill.App.3d 941, 35 Ill.Dec. 557

Jerrold RUSKIN, an Individual, Plaintiff-Appellee, v. James T. RODGERS, an Individual, Pelham Corporation, an

Illinois Corporation, and First Wilmette

Corporation, an Illinois Corporation,

Defendants-Appellants.

AIMCO, INC., an Illinois Corporation, and Louis F. Allocco, an Individual, Intervening Plaintiffs-Appellants, v. James T. RODGERS, an Individual, Pelham Corporation, an

Illinois Corporation, and First Wilmette

Corporation, an Illinois Corporation,

Defendants-Appellees.

No. 79-146.

Appellate Court of Illinois, First District, First Division.

Dec. 17, 1979.

Rehearing Denied Jan. 14, 1980.

James P. Chapman, Merle L. Royce, II, Chapman & Royce, Ltd., Chicago, for James T. Rodgers.

Epton, Mullin, Segal & Druth, Ltd., Chicago (Abraham W. Brussell and Gerald B. Mullin, Chicago, of counsel), for Jerrold Ruskin.

Gerald G. Saltarelli, Harold C. Wheeler, Winston & Strawn, Chicago, for Aimco, Inc. and Louis F. Allocco.

GOLDBERG, Presiding Justice:

Jerrold Ruskin (plaintiff), a real estate broker, and James T. Rodgers (defendant), a real estate salesman, entered into a written agreement for joint purchase of a luxury apartment building and its conversion into condominiums. Plaintiff brought an action for specific performance and other relief also joining as party defendants Pelham Corporation and First Wilmette Corporation who were interested as ultimate buyers of the property. The trial court found for plaintiff. Defendant appeals.

Aimco, Inc., a real estate consulting corporation, and Louis F. Allocco, a real estate broker, had filed a petition to intervene as plaintiffs naming the same parties as defendants. The trial court allowed the petition to intervene but ultimately denied the intervening plaintiffs' claim. Intervening plaintiffs also appeal. Consequently, we have two appeals with different plaintiffs and different factual situations. We will consider each appeal separately beginning with plaintiff's action.

I.

The Issues Between Ruskin (Plaintiff) And Rodgers (Defendant).

In May 1977, defendant met with Allen Marrinson, executive vice-president of the Upper Avenue National Bank. Marrinson told defendant a luxury apartment building [35 Ill.Dec. 560] at 1550 North State Parkway was for sale. It was not widely marketed so as to avoid arousing the tenants. The building was owned by Carver Nixon, president of the bank, and Robert Nixon, his brother. Defendant expressed his desire to purchase the building if he could arrange financing. Marrinson said he did not believe defendant could handle such an ambitious undertaking. Marrinson told defendant a $2.2 million offer was pending on the building.

A few weeks later, defendant spoke with Marrinson again and learned the $2.2 million offer had been rejected by the Nixons. Defendant told Marrinson he would pay.$2.7 million for the building if he was given a chance to get the money. Marrinson transmitted this information to Carver Nixon. Nixon replied that if defendant could make a firm offer of.$2.7 million he would consider it.

Marrinson communicated Nixon's response to defendant. He further told defendant there could be no negotiation of the price. If defendant could not make a.$2.7 million offer that would be the end of any dealings with him. Defendant offered Marrinson a $25,000 fee to help him in his negotiations with the Nixons. Marrinson accepted the offer with the approval of the board of directors of the bank. Defendant also met with the building owners. They reiterated that the price was.$2.7 million and nothing less.

Defendant approached plaintiff in May 1977, and asked him general questions concerning the appropriate procedures for acquiring a rental unit and converting it to condominium ownership. Plaintiff had been engaged in real estate brokerage and development for several years and had developed a number of apartment buildings. In subsequent talks, defendant told plaintiff he had an opportunity to acquire, develop and market a "plum" of a building in the Gold Coast area of Chicago. Defendant asked plaintiff about his ability to fund the purchase of a building. Plaintiff responded that he could do so. Defendant asked plaintiff if plaintiff would be his consultant for a fee. Plaintiff responded he wanted an equity position in such a project.

The parties met again in June 1977. Defendant disclosed the location of the building and explained his development concept in detail. He agreed to give plaintiff 50 percent of any profits received from the project. Defendant explained the conditions imposed by the sellers as to the firmness of the.$2.7 million offer. Plaintiff and defendant verbally agreed to work jointly to acquire and develop the building.

On June 16, 1977, at defendant's suggestion, a memorandum of understanding was prepared by defendant's attorney, Edward Joyce. It provided:

"MEMORANDUM OF UNDERSTANDING

"WHEREAS, James Rodgers has been offered the opportunity to purchase and market a building located at 1550 North State Parkway; and

"WHEREAS, Jerrold Ruskin wishes to join with James Rodgers in the purchase and marketing of said structure.

"NOW, THEREFORE, it is agreed between and among the parties that Messrs. Rodgers and Ruskin will work together and in good faith attempt to purchase the 1550-1540 North State Parkway Building from its present owner, obtain the necessary financing for the conversion of said building to a condominium, arrange for the marketing of said building through James Rodgers and do all else reasonable and necessary to accomplish the above described goals.

"IT IS FURTHER AGREED between the parties that the profit derived from the purchase and conversion of the 1550-1540 North State Parkway Building will, after deducting all expenses, be split between Messrs. Rodgers and Ruskin on a 50/50 basis.

"For purposes of this Agreement, the term 'expense' shall mean and include any item, whether or not ordinarily considered an expense for accounting or tax purposes, which is paid to a third party, whether or not said third party is a lender or investor.

"Dated: June 16, 1977.

                "/signed/
                James Rodgers
                "/signed/
                Jerrold Ruskin"
                

Joyce testified that when he first met plaintiff and defendant he (Joyce) stated his understanding that plaintiff was to be responsible for obtaining all the financing. Defendant signed a copy of the agreement as soon as Joyce had prepared it. Plaintiff took a copy signed by defendant and said he would take it to his attorney. Plaintiff testified he signed and returned a copy of the agreement to defendant about June 18. Defendant denied that he had ever received a copy of the agreement from plaintiff. A xerox copy of the agreement reflecting signatures of both parties was received in evidence. There is no provision in this signed copy of the agreement requiring plaintiff to be responsible for financing.

Later in June 1977, plaintiff contacted John Wendlund, a real estate syndicator with whom he had worked before, to inquire if Wendlund would be interested in securing the money needed to purchase the building. Wendlund testified that in July he informed plaintiff he "was prepared to acquire the property for.$2.7 million" on a 50/50 partnership basis. Wendlund described this as "a conditional offer." Plaintiff testified that one-half of the profit would go to Wendlund and the remaining half would be divided between plaintiff and defendant. Plaintiff told defendant about this offer without mentioning Wendlund's name. Defendant testified he was not interested in this. He told plaintiff he did not need plaintiff to give away half of the profits. Defendant also contacted other potential investors such as a Mr. Kaufman and a Mr. Fox as possible sources of financing. The parties met with some of these individuals in July, without tangible results.

Plaintiff and Wendlund continued to seek financing for the project despite defendant's unwillingness to split the profits on a 50/50 basis with Wendlund. Plaintiff and Wendlund had a preliminary conversation with the Continental Bank. The bank, while interested in the project, would require several prerequisites to supply financing. Reports of various kinds on the building would be required as well as an earnest money deposit and a purchase agreement. Wendlund told plaintiff that they would have to enter into a partnership agreement before he would put any money into the venture. Defendant testified he had never been advised of Wendlund's participation in the meetings with the bank. However, defendant was aware of plaintiff's contact with the Continental Bank. In fact defendant provided plaintiff with certain information requested by the bank.

On June 23 or 24, plaintiff and Wendlund met with attorney Joel Carlins. They discussed with him a possible purchase agreement for the building and a possible partnership agreement. Carlins was partially selected due to this personal friendship with Marrinson. Carlins and Marrinson are presently law partners. Plaintiff and defendant both testified that the person who had previously offered $2.2 million had made a new offer of $2.45 million on July 11, complete with a check and a written contract. Defendant then agreed with plaintiff to a partnership arrangement with Wendlund. Defendant was anxious to submit an offer for.$2.7 million before the expiration of the new offer on July 15, 1977.

Subsequently, during a telephone discussion with plaintiff and Carlins, Wendlund instructed Carlins to contact Marrinson and discuss with him whether a figure lower than.$2.7 million would be acceptable. Plaintiff concurred that this "informal" approach would be appropriate. Plaintiff testified he told defendant about what he characterized as this "off the record call." Defendant testified he agreed with plaintiff to use Carlins but only to negotiate with Marrinson. Defendant stated neither defendant nor plaintiff mentioned any other figure but.$2.7 million...