Stephen L. Winternitz, Inc. v. National Bank of Monmouth

• Decision Date: 30 June 1997
• Docket Number: No. 1-96-0410,1-96-0410
• Citation: 683 N.E.2d 492,225 Ill.Dec. 324,289 Ill.App.3d 753
• Parties: , 225 Ill.Dec. 324 STEPHEN L. WINTERNITZ, INC., an Illinois corporation, Plaintiff-Appellant, v. NATIONAL BANK OF MONMOUTH, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 492

683 N.E.2d 492

289 Ill.App.3d 753, 225 Ill.Dec. 324

STEPHEN L. WINTERNITZ, INC., an Illinois corporation Plaintiff-Appellant, v. NATIONAL BANK OF MONMOUTH, Defendant-Appellee.

No. 1-96-0410.

Appellate Court of Illinois,

First District, First Division.

June 30, 1997.

Schwartz, Cooper, Greenberger & Krauss, Chtd., Chicago (Martin W. Salzman, Bret A. Rappaport, Alex Pirogovsky (summer associate), of counsel), for Plaintiff-Appellant.

Zenoff & Zenoff Chartered, Chicago (Alan H. Zenoff, Jerry M. Salzberg, of counsel), for Defendant-Appellee.

Justice GALLAGHER delivered the opinion of the court:

Plaintiff Stephen L. Winternitz, Incorporated (Winternitz) filed a complaint seeking damages from defendant National Bank of Monmouth (Bank) for breach of a brokerage contract. The first amended complaint (complaint) alleges that defendant agreed to pay a commission to plaintiff in the event that defendant sold certain manufacturing equipment to a purchaser produced by plaintiff. Defendant moved to dismiss the Complaint pursuant to section 2-619.1 of the Illinois Code of Civil Procedure (735 ILCS 5/2-619.1 (West 1994)), and the trial court granted defendant's motion. Plaintiff appealed, and we now reverse and remand.

The facts of the case, as alleged in the complaint, are relatively straightforward. American Pro Latex defaulted on a loan obtained from defendant Bank. To recoup some of its losses, the Bank sought to liquidate the loan collateral--manufacturing equipment that produced latex gloves. The Bank originally hired Winternitz to appraise the equipment for public auction; subsequently, the Bank and Winternitz orally agreed to an arrangement whereby the Bank would pay to Winternitz an 8% commission if Winternitz could produce a single buyer for all of the equipment. On December 29, 1993, the parties confirmed their agreement in writing when Winternitz located a buyer, Safeskin Corporation (Safeskin). The written contract, drafted by the Bank and faxed to Winternitz, provided in its entirety:

"The National Bank will pay you a commission of 8% of the purchase price if it sells the equipment of American Pro Latex to Safeskin Corporation or another buyer whom you produce."

On January 14, 1994, Safeskin submitted a bid to purchase the American Pro Latex equipment for $783,000 and promised the Bank $50,000 as a deposit by January 17, 1994. The Bank accepted Safeskin's offer in a letter dated January 17, 1994. However, Safeskin failed to pay the balance of the purchase price. This failure ultimately forced the Bank to sell the equipment at public auction for substantially less than the contract price. The Bank then filed suit against Safeskin on the contract, seeking damages equal to the difference between the sale price and the contract price, plus expenses. That case is now pending in federal court.

Meanwhile, Winternitz filed a three-count complaint against the Bank. In addition to costs and attorneys fees, each count sought differing amounts of damages. Count I alleged breach of the brokerage contract and sought $62,640, the full value of plaintiff's 8% commission. Alternatively, count II sought 8% of the earnest money deposit retained by the Bank ($4,000) under a theory of quantum meruit. Count III sought 8% of any moneys that the Bank recovers in its lawsuit against Safeskin, also under a theory of quantum meruit. As noted above, the trial court dismissed plaintiff's complaint pursuant to section 2-619.1 of the Code of Civil Procedure. On appeal, plaintiff requests that this court reverse and remand with directions to order the defendant to answer the complaint.

Section 2-619.1 of the Code of Civil Procedure allows for a party to combine in one motion a section 2-615 motion to dismiss for substantially insufficient pleadings with a section 2-619 motion for involuntary dismissal based upon defects or defenses. 735 ILCS 5/2-619.1 (West 1994). When ruling on a motion to dismiss under either section 2-615 or section 2-619 of the Code, the trial court must interpret all pleadings and supporting documents in the light most favorable to the nonmoving party; the court should grant the motion only if plaintiff can prove no set of facts that would support a cause of action. Toombs v. City of Champaign, 245 Ill.App.3d 580, 185 Ill.Dec. 755, 615 N.E.2d 50 (1993). Because this process does not require the appellate court to weigh facts or determine credibility, the court applies a de novo standard of review. Toombs, 245 Ill.App.3d at 583, 185 Ill.Dec. at 756, 615 N.E.2d at 51; Weatherman v. Gary-Wheaton Bank, 286 Ill.App.3d 48, 63, 221 Ill.Dec. 685, 695, 676 N.E.2d 206, 216 (1996).

Plaintiff argues that it fulfilled its obligation under the brokerage contract and earned its commission by producing a ready, willing and able buyer in Safeskin. In support of this proposition, plaintiff cites Fox v. Ryan, 240 Ill. 391, 88 N.E. 974 (1909), as well as other more recent decisions, including Hallmark & Johnson Properties, Ltd. v. Taylor, 201 Ill.App.3d 512, 147 Ill.Dec. 141, 559 N.E.2d 141 (1990), and Bychowski v. ERA Tempo Realty, Inc., 274 Ill.App.3d 1093, 211 Ill.Dec. 389, 655 N.E.2d 292 (1995). We agree with plaintiff and find that our decision in United Investors, Inc. v. Tsotsos, 132 Ill.App.3d 175, 87 Ill.Dec. 439, 477 N.E.2d 40 (1985), controls the outcome of this appeal.

This court adopted an argument nearly identical to the one plaintiff offers here in United Investors, a case not cited in the briefs of either party. In that case, the plaintiff brought suit to recover a brokerage commission allegedly due under a real estate listing agreement, although the record indicated that the defendant appointed the plaintiff to locate a purchaser for defendant's business. 132 Ill.App.3d at 176-77, 87 Ill.Dec. at 440, 477 N.E.2d at 41. The defendant eventually entered into a contract with a prospective purchaser supplied by the plaintiff, although they never consummated their transaction. The trial court granted summary judgment in favor of the plaintiff. 132 Ill.App.3d at 177, 87 Ill.Dec. at 440, 477 N.E.2d at 41. On appeal, we stated that "a sale need not be consummated for a real estate broker to recover his commission." 132 Ill.App.3d at 178, 87 Ill.Dec. at 441, 477 N.E.2d at 42. We went on to hold: "Where a seller of real estate enters into an enforceable contract of sale with a purchaser procured by a broker, the readiness, willingness and ability of the purchaser is no longer open to question and the broker's right to compensation accrues whether or not the sale is completed." United Investors, Inc. v. Tsotsos, 132 Ill.App.3d at 178, 87 Ill.Dec. at 441, 477 N.E.2d at 42. Despite this holding, we reversed and remanded the case for a determination of whether the plaintiff had forfeited its commission by violating the brokerage agreement. 132 Ill.App.3d at 180, 87 Ill.Dec. at 442, 477 N.E.2d at 43.

As support for the holding in United Investors, we cited to our supreme court's opinion in Fox v. Ryan, 240 Ill. 391, 88 N.E. 974 (1909). In that case, the defendant, who owned stock in a mining company, employed the plaintiff broker to negotiate the sale of the company's stock to another mining company. 240 Ill. at 392-93, 88 N.E. at 975. When the broker's negotiations with the prospective purchasers bogged down, the defendant completed the negotiations himself, although he still promised to pay the broker $4,000 in the event a deal was made. Ultimately, the defendant and purchasers struck a deal, whereby the purchasers contracted to make an initial downpayment and pay the balance in installments. 240 Ill. at 393-94, 88 N.E. at 975. The purchasers defaulted on the deferred payments, however, and the sale never closed. 240 Ill. at 395, 88 N.E. at 976. The supreme court, holding that the broker was entitled to his commission, stated:

" 'The true rule is, that the broker is entitled to his commissions if the purchaser presented by him and the vendor, his employer, enter into a valid, binding and enforceable contract. If, after the making of such a contract, even though executory in form, the purchaser declines to complete the sale and the seller refuses to compel performance, the broker ought not to be deprived of his commissions.' " 240 Ill. at 396, 88 N.E. at 976, quoting Wilson v. Mason, 158 Ill. 304, 311, 42 N.E. 134, 136 (1895).

The court affirmed the trial court's judgment in favor of the plaintiff broker. 240 Ill. at 398, 88 N.E. at 977.

We feel that United Investors accurately states the rule under Illinois law, as expressed in Fox v. Ryan. Although each of those cases dealt with the sale of a business, we find that the reasoning found therein readily extends to the facts of this case, which deals with the sale of certain assets of a business. The complaint alleges (1) that a brokerage contract existed between plaintiff and defendant; (2) that, pursuant to the terms of that contract, plaintiff procured Safeskin, a prospective purchaser for defendant's equipment; and (3) that defendant entered into a contract with Safeskin. Defendant correctly points out that the complaint fails to allege that defendant entered into a "valid, binding, and enforceable contract" with Safeskin. However, the complaint does allege that defendant filed suit against Safeskin seeking damages for breach of contract. Considering these pleadings in the light most favorable to plaintiff, we find that the complaint adequately states a cause of action and that the trial court erred in granting defendant's motion to dismiss.

Defendant argues that the actual sale of the manufacturing equipment constituted a condition precedent to its obligation to pay plaintiff. Because Safeskin never consummated the transaction, defendant asserts that no "sale" ever took place. Defendant also argues that the true focus is not whether plaintiff produced a ready, willing and able buyer but, rather, whether plaintiff was the procuring cause of a...