Spircoff v. Spircoff

• Decision Date: 10 July 1979
• Docket Number: No. 78-772,78-772
• Citation: 29 Ill.Dec. 806,74 Ill.App.3d 119,392 N.E.2d 363
• Parties: , 29 Ill.Dec. 806 Robert SPIRCOFF, Counter-Plaintiff, Appellee, v. Helen R. SPIRCOFF, a/k/a Helen S. Baron, Counter-Defendant, Appellant.
• Court: United States Appellate Court of Illinois

Page 363

392 N.E.2d 363

74 Ill.App.3d 119, 29 Ill.Dec. 806

Robert SPIRCOFF, Counter-Plaintiff, Appellee, v. Helen R. SPIRCOFF, a/k/a Helen S. Baron, Counter-Defendant, Appellant.

No. 78-772.

Appellate Court of Illinois, First District, Second Division.

July 10, 1979.

Rehearing Denied Aug. 1, 1979.

A. Denison Weaver, Chicago, for counter-defendant-appellant.

Leon C. Wexler, Chicago, for counter-plaintiff-appellee.

PERLIN, Justice:

Pursuant to a prior lawsuit, counter-plaintiff Robert Spircoff (hereinafter Spircoff) and counter-defendant Helen Spircoff Baron (hereinafter Baron) entered into a settlement agreement in June 1974 whereby Baron became 100% Beneficial owner of a certain parcel of real property and Spircoff acquired a right to sell said property and to receive $50,000 of the proceeds under stated circumstances. In March 1976 Spircoff filed a complaint for declaratory judgment requesting that the court declare Spircoff was entitled to the sum of $50,000 from a proposed sale. The court found that the settlement agreement contained language granting Spircoff a right to $50,000 of the proceeds in the event of a sale by either Baron or Spircoff. The court granted judgment to Spircoff in the amount of $50,000. Baron appeals.

The sole issue for review is whether the trial court's interpretation of the settlement agreement is contrary to the manifest weight of the evidence.

We affirm.

In March 1967 Spircoff and Baron, who are brother and sister, became beneficial owners in equal interest in a land trust known as Oak Park Trust and Savings Bank Trust No. 5327. The trust held title to a parcel of land located at 1247 South Harlem Avenue, Berwyn, Illinois, which Spircoff developed with a 32-unit apartment building. On March 27, 1967 the parties entered into a written agreement which provided that Spircoff would manage the property; that for a five year period from 1967 to 1972 Baron would share in the earnings in an amount not less than $7,000 per year; and that if Spircoff failed to pay such amount, Baron's interest would be increased by 10% For each default.

In April 1972 Baron filed an action for an accounting and a constructive trust, alleging that Baron received no payments under the agreement of March 1967 and was therefore entitled to an increase in her interest in an amount equal to Spircoff's 50% Share. Baron further alleged that Spircoff with intent to defraud Baron transferred his interest in the trust to a third party. On June 5, 1975 the action was dismissed with prejudice because the parties entered into a settlement agreement to resolve all matters in controversy between the parties. Pursuant to the agreement of June 5, 1975 (hereinafter Agreement), Spircoff assigned his undivided one-half interest in the land trust to Baron. Baron agreed in Clause 3 of the Agreement that for a period of four years Spircoff would have the following rights:

"A) He may secure a purchaser for the property at a gross sale price of $504,000.00.

B) From the proceeds of said sale Spircoff shall receive $50,000.00; however if the sale is made in the first 18 months he shall remit $2500.00 to Baron.

C) The sale must be to a cash buyer, who may purchase subject to the existing mortgage.

D) In no event shall the gross sale price be less than $454,000.00 and on any sale less than $504,000.00 the payment to Spircoff shall be reduced by the difference between $504,000.00 and the gross sale price. Thus on a sale by Spircoff for $490,000.00, Spircoff would receive $36,000.00 from the proceeds.

E) It is understood that in the event Spircoff secures the purchasers through his own efforts, he will not be entitled to a broker's commission on said sale. However, if the sale is made through a broker secured by Spircoff, Baron shall only be responsible for one-half of the usual brokerage fee and Spircoff shall be responsible for the balance of said fee to the broker.

F) NOTWITHSTANDING any of the foregoing, it is understood that during the first year of this agreement Spircoff or Baron must secure a gross sale price of $550,000.00 for Spircoff to receive $50,000.00. On any sale by him during the first year at less than $550,000.00, his payment shall be reduced on a dollar for dollar basis and therefore no sale can be contracted (by) him at a price less than $500,000.00. However, Baron may sell the property during the first year at a gross sale price of between $504,000.00 and $550,000.00 and still be obligated to Spircoff for $50,000.00. At any sale under $504,000.00 the provisions in the aforesaid paragraphs apply and Spircoff would receive a reduction on a dollar for dollar basis."

It was further agreed between the parties in Clause 8 that:

"In the event Baron desires to sell the property prior to the termination of this Agreement, Spircoff shall have the right of first refusal to purchase said property on the same basis and at the same price as any offer from any bona fide purchaser."

Baron agreed also to hold Spircoff harmless on an existing mortgage on the property, which mortgage had been personally guaranteed by both parties.

In July and September of 1975 Spircoff requested from Baron an income and expense statement for the property so that he could arrange for a sale of the property. On November 19, 1975 Spircoff filed a motion requesting production of a statement of income and expenses. On January 12, 1976 the court ordered that Baron provide such statement within 28 days. On March 2, 1976, Spircoff filed a motion for rule to show cause why Baron should not be held in contempt for failure to produce the statement in accordance with the court's order of January 12, 1976. The court ordered that Baron produce the statement prior to March 8, 1976. On March 8, 1976 a rule to show cause was entered against Baron and a hearing was scheduled for March 15, 1976.

On March 15, 1976 Baron filed a motion for an order limiting to 15 days the time in which Spircoff had to exercise his right of first refusal. Baron alleged that she had received an offer to purchase the building for $580,000 from a person subsequently identified as Mr. Gangas, and that she required a determination of the time limit before making a binding contract. The court ordered that Spircoff had 30 days to exercise his right of first refusal. On March 17, 1976 Baron furnished Spircoff with a copy of the proposed sales contract and a statement of income and expenses for the property. The court further ordered that Spircoff had seven days in which to file a complaint for declaratory judgment to determine what, if any, part of the proceeds of the proposed sale Spircoff was entitled to under the Agreement.

Spircoff filed a counter-complaint for declaratory judgment on March 23, 1976. Spircoff alleged that for the prior six months he attempted without success to obtain the income and expense statement so that he could secure a purchaser; that Baron refused to supply the statement thereby breaching an implied condition of cooperation; that Spircoff had a right to sell the property and within one week after receiving the financial statement Spircoff tendered to Baron a contract from one Albert Bruno to purchase the property at a price of $504,000 (which Baron refused on March 29, 1978); and that the proposed contract with Mr. Gangas submitted to Spircoff by Baron was not a binding contract but rather was an option to purchase. Spircoff requested the court to declare that he had a reasonable time after receipt of the financial statement from Baron to secure a purchaser and that Baron should convey the property to either Gangas or Bruno and should deposit the sum of $50,000 with the clerk of the court for the use of Spircoff in the event of a closing.

On April 14, 1976 the court ordered that Spircoff's right of first refusal was extended to April 26, 1976. On the latter date the court continued in force and effect all pending orders until April 28, 1976 and then until further order of court. On May 6, 1976 Baron filed a motion for an order declaring that the time for exercise of the right of first refusal had expired, or for an order requiring Spircoff to post bond to indemnify Baron from any damages resulting from Baron's inability to consummate the sale. Baron's motion was denied and Baron filed an interlocutory appeal from the orders of April 14, 1976 and May 6, 1976.

On June 16, 1976 an agreed order was entered stating that the right of first refusal was waived by Spircoff and the pending interlocutory appeal was dismissed. On June 17, 1976 the court ordered Baron to deposit the sum of $50,000 in an escrow account at the time of closing. The closing occurred shortly thereafter.

A hearing was held on Spircoff's counter-complaint for declaratory judgment, ¹ and the following testimony was adduced: Helen Baron, called to testify under section 60 of the Civil Practice Act (Ill.Rev.Stat.1975, ch. 110, par. 60), testified that she entered into the Agreement with her brother (Spircoff) as a result of a trial; that since the date of the Agreement she has been managing agent of the building in question she collects the rent and pays the bills; and that after she became aware of the court's orders that she produce an income and expense statement, Baron contacted her accountant and gave him the necessary figures and she first received the statement on March 15, 1976. Baron further testified that on or about February 24, 1976 she received from Gangas a contract to purchase the property at a price of $580,000; that a rider showing the rents and expenses was attached to the contract at the request of Gangas; that she did not recall giving any broker any statement of income and expenses within the previous six months; that she produced the statement of income and expense on March 15, 1976 in open court; and that within a week thereafter she received through Spircoff an offer from Albert Bruno to purchase at a price of $504,000 but the offer was rejected by...