Spivack, Shulman & Goldman v. Foremost Liquor Store, Inc.

• Decision Date: 30 March 1984
• Docket Number: No. 82-3064,82-3064
• Citation: 124 Ill.App.3d 676,465 N.E.2d 500,80 Ill.Dec. 388
• Parties: , 80 Ill.Dec. 388 SPIVACK, SHULMAN & GOLDMAN, a partnership, Plaintiff-Counterdefendant-Appellee, v. FOREMOST LIQUOR STORE, INC., an Illinois corporation, Defendant- Counterplaintiff-Appellant.
• Court: United States Appellate Court of Illinois

Page 500

465 N.E.2d 500

124 Ill.App.3d 676, 80 Ill.Dec. 388

SPIVACK, SHULMAN & GOLDMAN, a partnership Plaintiff-Counterdefendant-Appellee, v. FOREMOST LIQUOR STORE, INC., an Illinois corporation Defendant- Counterplaintiff-Appellant.

No. 82-3064.

Appellate Court of Illinois First District, Fifth Division.

March 30, 1984.

Supplemental Opinion on Denial of

Rehearing June 22, 1984.

Allen H. Schultz, Chicago (Schultz & Schultz, Chicago, of counsel), for defendant-counterplaintiff-appellant.

Hinshaw, Culbertson, Moelmann, Hoban & Fuller, Chicago (D. Kendall Griffth, Gary A. Grasso, Joanna Cowan New, Chicago, of counsel), for plaintiff-counterdefendant-appellee.

LORENZ, Justice:

Spivack, Shulman and Goldman, ^* a law partnership (the Firm), as plaintiff, filed a complaint for attorneys' fees against defendant Foremost Liquors, Inc., an Illinois corporation (Foremost). Foremost filed a two count counterclaim against plaintiff alleging that it suffered great monetary loss as a result of plaintiff's gross, wanton and negligent legal advice and plaintiff's failure to exercise reasonable care and skill. Plaintiff's motion for summary judgment as to Count I was granted and it is from that order that defendant appeals. The sole question for review is whether the trial court erred in granting plaintiff's motion.

In Count I of the amended counterclaim, which was filed on May 7, 1982, defendant alleged that it was the owner and operator of a chain of four retail alcoholic liquor stores, and agreed orally on May 1, 1975, to retain the Firm to perform legal services on its behalf, in consideration of a monthly fee of Five Hundred Dollars ($500) and that this relationship continued to exist until August 31, 1980, when it was severed by Foremost.

It further asserted that Foremost's lease for the store premises at 5236 West Touhy Avenue, Skokie, Illinois, was to expire on June 30, 1978, and the lessor, Jewel Companies, Inc. ("Jewel"), had implicitly advised Foremost that it would not renew the lease, as it intended to use the space for its own expansion purposes; that the Firm advised Foremost it need not vacate the premises on or before the expiration date; that the Firm further advised Foremost, contrary to Illinois law, that it could prevent Jewel from evicting Foremost in any forcible detainer proceedings by filing a counterclaim charging Jewel with violating the Illinois antitrust laws; and that in addition, the Firm guaranteed Foremost that, in the event it failed to enjoin Jewel, Foremost was certain to remain in the premises peacefully "for maybe a year, and for certain six months."

Foremost also alleged that on July 6, 1978, Jewel filed a forcible detainer action in the circuit court of Cook County; that on August 16, 1978, the court ordered Foremost to vacate the premises within 30 days, and post a bond for $25,000 to guarantee compliance; and that in order to comply with the court order, it was necessary for Foremost to dismantle the store fixtures and place them in storage, as well as return its inventory, valued at $200,000 to the wholesalers at invoice cost. Further, Foremost alleged that the Firm knew or should have known that it could not enjoin Jewel from evicting Foremost by filing a counterclaim charging Jewel with violating antitrust laws, and that the Firm should not have guaranteed that Foremost could remain in the premises after the lease expired.

Finally, Foremost claimed that the Firm's legal advice was grossly and wantonly negligent, and as a result of the Firm's failure to exercise a reasonable degree of care and skill, Foremost has incurred huge monetary losses.

On August 31, 1982, the Firm filed a motion for summary judgment on the amended counterclaim with supporting memorandum and exhibits pursuant to section 2-1005 of the Illinois Code of Civil Procedure (Ill.Rev.Stat.1981, ch. 110, par. 2-1005). In support of its motion, the Firm asserted that Foremost instituted a chancery action in June 1978, prior to the Jewel forcible detainer, requesting an injunction against Jewel's enforcement of the June 30, 1978, lease expiration; that Gerald Robins, president of Foremost, verified to the court in this injunction matter that beginning as early as 1972, Jewel had on numerous occasions been in oral and written communication with Foremost or its counsel, concerning an extension of the lease beyond June 30, 1978, whereby Jewel indicated that they would extend the lease, but that their position suddenly changed as the expiration date drew near; that Foremost stipulated to the dismissal of this injunctive action in October 1978; and that Robins' statements were an impeachment of Foremost's malpractice claims since Foremost, some three years prior to its hiring the Firm, had begun to negotiate a lease extension, and had favorable response to its requested extension.

The Firm also pointed out in its memorandum in support of its motion for summary judgment that the court denied Foremost's motion to consolidate the Jewel forcible detainer action with the suit for injunctive relief; that the Firm filed three affirmative defenses (oral contract, restraint of trade and estoppel) to the Jewel forcible detainer petition along with the antitrust counterclaim; that the court struck Foremost's antitrust counterclaim and the affirmative defenses of estoppel and restraint of trade on August 7, 1978; that a jury entered a verdict in favor of Jewel on August 23, 1978, in the forcible detainer action which included the disposition of the affirmative defense of oral contract issue; and that the Firm filed post-trial motions and requests for stay of the forcible detainer judgment order, which were later denied.

Finally, the Firm's memorandum avers that Gerald Robins, president of Foremost, acknowledged as early as September 15, 1977, in a letter to Osco Drugs, that it would take a 30-month extension beyond June 30, 1978, to find an alternative site of business; and that Gerald Robins, in a letter to Osco Drugs written on April 18, 1978, less than 90 days before the lease expired, stated Foremost would not be able to make the move by June, and needed "at least several months additional time to make our move."

Thereafter, Foremost filed its memorandum in reply to the Firm's memorandum, which was supported by an affidavit of Leonard J. Robins, the current president of Foremost Sales Promotions. Foremost's memo postured that the gravamen of Count I existed in the Firm's gross negligent professional advice that, if the Firm failed to prevent an eviction by Jewel, it guaranteed Foremost that it would be able to remain in the premises "for maybe a year and for certain six months" after the lease expired on June 30, 1978.

Robins' affidavit recited inter alia, that on July 8, 1976, Jewel addressed a letter to Foremost advising, (1) that its lease was to expire on June 30, 1978, (2) that it will be obliged to vacate the premises on or before June 30, 1978, and that (3) Jewel intends to lease the premises to its affiliate, Osco Drugs, Inc., effective July 1, 1978; that immediately upon receipt of Jewel's letter, Foremost sent a copy to the Firm, and sought its advice regarding the possibility of negotiating with Jewel for a renewal of the lease; that although Robins and his son Gerald consulted with the Firm after July 8, 1976, it wasn't until May 13, 1977, that the Firm first wrote Jewel about Foremost's desire to remain on the premises after June 30, 1978; and that Jewel responded on May 16, 1977, informing the Firm it was adamant that Foremost vacate the premises on or before June 30, 1978.

In addition, the affidavit declared that the Firm proposed the following plan of defending any legal action Jewel might take to dispossess Foremost: (1) file a counterclaim against Jewel, also in the event that Jewel filed a forcible detainer action, to file an action to enjoin Jewel; (2) in the event that the Firm failed in its efforts to prevent Foremost's eviction by Jewel, it would be able to remain in the premises peacefully after June 30, 1978, "for a period of one year, and for certain six months"; and (3) the Firm would receive a fee of $50,000 for this accomplishment.

The affiant further alleged that based on the "guarantee" by the Firm, Foremost planned a "lost our lease" sale from July 1, 1978 through December 31, 1978; that Foremost believed that such a sale would permit it to sell off its inventory of merchandise, which always averaged approximately $200,000 and to peacefully arrange to sell its fixtures at a profit of approximately $235,000; that subsequent to the court order to vacate the premises no later than September 30, 1978, Foremost had a "very minimal" sale which commenced on September 2, 1978, and terminated on September 10, 1978; and that the doors of Foremost were closed permanently on September 11, 1978.

Finally, Robins averred that letters from his son, Gerald Robins, to Jewel/Osco were initially drafted by the Firm, then given to Gerald Robins to be (1) transcribed on Foremost's stationery, (2) signed by Robins, and (3) mailed to Jewel; and that since May 16, 1977, every act taken by Foremost, every word spoken by Foremost, every legal document filed and written by Foremost was directed and supervised by the Firm.

Arguments on the Firm's motion for summary judgment were heard on November 18, 1982. First, the Firm argued that Foremost had knowledge of the lease's expiration at least two years prior to June 30, 1978; that facts disclosed that Foremost had been involved with Jewel in negotiations to extend the lease for three years prior to Foremost's retention of the Firm; and further that facts indicated that letters from Foremost to Jewel requested additional time on the lease that Jewel was unwilling to give.

As to the damages issue, the Firm asserted that Foremost's having to return their inventory at cost, when they could have garnered a profit of $160,000 had there been a "lost our...