author: PRESIDING JUSTICE MANNING

text:
    ALAN GOLDENBERG, Plaintiff-Appellee, v. SEYMOUR BAZELL, Defendant-Appellant.
    First District (1st Division)
    No. 1—89—2819
    Opinion filed September 16, 1991.

      O’Brien, O’Rourke, Hogan & McNulty, of Chicago (William E. McNulty and Michael Gilman, of counsel), for appellant.
    Sugar, Friedberg & Felsenthal, of Chicago (Steve A. Felsenthal, Andrew B. David, and William J. Gigler, of counsel), for appellee.
   PRESIDING JUSTICE MANNING

delivered the opinion of the court:

Following a bench trial in the circuit court of Cook County, the trial court awarded plaintiff Alan Goldenberg $325,000 against defendant Seymour Bazell for breach of an oral contract. Defendant argues on appeal that the trial court: (1) applied the wrong standard of proof in finding the existence of an oral contract; (2) erred in failing to find that plaintiff received full compensation for his services rendered as acknowledged by his endorsement of a check; (3) erred in determining that plaintiff’s in-court testimony was credible when it conflicted with his deposition testimony; (4) erred in refusing to allow defendant to impeach plaintiff with a prior inconsistent statement; and (5) that judgment for plaintiff was against the manifest weight of the evidence.

In 1975, defendant and his partner, Dr. Goldberg, founded Uresil Corporation, a medical supply company. Each partner was a 50% owner of the company, and together they sought to obtain additional capital for its operation. In 1978, defendant and Dr. Goldberg were successful in obtaining funds for the company from Parke-Davis, a subsidiary of Warner-Lambert, Inc. Parke-Davis agreed to fund Uresil’s research and development efforts.

In 1979 Parke-Davis notified Uresil that it was not satisfied with the company’s operations and threatened Uresil that it would place a Parke-Davis employee over the company’s daily operations if there were not improvements. Defendant and Dr. Goldberg then hired plaintiff as the general manager of Uresil to improve its operations.

Plaintiff testified that he joined Uresil on September 30, 1979, at an initial salary of $330 per week. He later received a raise of $50 per week. Plaintiff continued to work for defendant and Dr. Goldberg until November 1980 when Parke-Davis terminated its relationship with Uresil.

After Parke-Davis withdrew its financial support from Uresil, defendant and Dr. Goldberg agreed to forego receiving a salary until another company could be found to either fund their operation or purchase Uresil’s assets. They also asked plaintiff if he would forego receiving a salary. Plaintiff testified that defendant and Goldberg offered him the opportunity to receive 10% of the net proceeds that they would receive from a new business venture. Dr. Goldberg testified that this arrangement was identical to a previous arrangement involving himself and defendant. He and defendant had previously owned a medical products company, and in lieu of a salary, defendant was rewarded with 10% of the net proceeds from sale of that company. He further testified that he and defendant each agreed to pay plaintiff 10% of their net proceeds minus liabilities.

Plaintiff accepted defendant’s offer and he continued to work as the general manager without receiving a salary for 17 additional months.

In 1982, Uresil identified a new business partner, Becton-Dickinson & Company, which entered into an agreement to buy all of Uresil’s assets, but not its liabilities. Becton-Dickinson also agreed to purchase patents from defendant and Dr. Goldberg in five years at a price not less than $3,250,000.

Becton-Dickinson paid $750,000 for the assets of Uresil, and Uresil used $360,000 to satisfy its outstanding liabilities. Plaintiff received 10% of the remaining proceeds, 5% from defendant. Dr. Goldberg then entered into a consulting agreement and defendant entered into an employment agreement with Becton-Dickinson. Plaintiff was also hired as an employee with the newly formed Uresil division of Becton-Dickinson and earned a salary of $29,500 annually.

In September 1986, Becton-Dickinson purchased the patents owned by Uresil in accordance with the 1982 agreement. The purchase price for the patents was increased from $3.25 million to $6.5 million. Dr. Goldberg and defendant each received $3,250,000 from the sale. Dr. Goldberg paid plaintiff $325,000, but defendant failed to pay plaintiff.

At trial Dr. Goldberg testified that in November 1980, he and defendant talked with plaintiff and informed him that if he decided to stay with Uresil he would not receive a salary, but that he would receive a reward of 10% of the proceeds as defendant had been compensated in a previous arrangement. He explained, “whatever our rewards were from the finality of events of our company [plaintiff] would receive 10% of those proceeds.” Dr. Goldberg testified that this offer was never withdrawn and that plaintiff accepted the offer, although it was never reduced to writing.

Barry Goldenberg, plaintiff’s brother, testified that in 1980 he was responsible for identifying a new business partner for Uresil. Golden-berg provided a medical directory with names and addresses of people to contact as potential partners. He further testified that in 1981, defendant offered him employment at Uresil in marketing and sales. Goldenberg stated that defendant told him that he would not be paid a salary but would receive equity in the company. Goldenberg did not accept this offer.

Plaintiff testified that in 1979 defendant offered him a position with Uresil as its general manager. Plaintiff stated that he was offered a salary of $330 each week. He further testified that defendant advised him that he would be rewarded in the future for accepting the position at that salary. Plaintiff explained that defendant told him of Uresil’s operating arrangement with Parke-Davis and that Uresil had budgetary constraints. Plaintiff accepted the offer, and in early 1980, he received a $50-per-week increase in his salary.

In November 1980, plaintiff’s compensation with Uresil changed. He explained that Uresil’s relationship with Parke-Davis terminated and that defendant advised him that Uresil could no longer pay him a salary because of reduced funding. Plaintiff explained that defendant told him that if he stayed with Uresil until a new venture partner were found, he would receive 10% of any new deal. Plaintiff stated that Dr. Goldberg agreed with this offer, then further explained how it would work. He testified that the 10% compensation he would receive would come from any new deal that Uresil entered into, and that both Dr. Goldberg and defendant would each pay 10%. Plaintiff testified that he accepted the offer.

Plaintiff testified that in 1982 defendant and Dr. Goldberg entered into a sale of Uresil to B ecton-Dickinson and that he went back on salary and earned $29,500 each year. Dr. Goldberg and defendant received $750,000 initially and also entered into an arrangement for the sale of their patents to Becton-Diekinson which would occur five years later. Plaintiff stated that at the time that the contract was entered into, the parties agreed to pay a minimum of $3,250,000 for the patents at the time that the deal was closed.

Plaintiff testified that after liabilities were deducted from the $750,000 that defendant and Dr. Goldberg received, there was $390,248 remaining. Out of that amount he received $38,958.28. Plaintiff received 50% of the total amount from defendant and Dr. Goldberg. Defendant paid plaintiff by check which had a memo “For Services to Uresil, Inc., In Full.”

In 1986 plaintiff received a lump sum payment of $25,000 from Becton-Dickinson. That payment represented additional monies that the company felt were owed to him from the period of 1982 through 1986 when he did not receive annual salary reviews. He stated that the company bought the patents from defendant and Dr. Goldberg as agreed and that they each received $3,250,000. Dr. Goldberg gave plaintiff a promissory note for his amount, but he never received anything from defendant.

Defendant denied participating in any discussion with Dr. Goldberg or plaintiff regarding plaintiff’s right to receive proceeds from the patent purchase agreement. Defendant testified that the check to plaintiff for $38,958.28 was for his 17 months of service.

At the conclusion of the trial, the court held that plaintiff had established the existence of an oral contract by a preponderance of the evidence. The court also determined that the oral contract was supported by consideration, sufficiently definite to be enforceable and not barred by the Statute of Frauds (Ill. Rev. Stat. 1987, ch. 59, par. 1 et seq.). The court awarded judgment in favor of plaintiff and against defendant in the amount of $325,000.

Defendant first argues that the trial court applied an improper standard of proof in finding the existence of an oral contract. Specifically, he contends that the moving party must establish the existence of an oral contract by clear and convincing evidence. (In re Marriage of Parr (1981), 103 Ill. App. 3d 199, 430 N.E.2d 656.) He maintains that the trial court’s application of the “preponderance of the evidence” test here was improper.

We first note that defendant failed to raise this argument below and it is therefore waived. (Commonwealth Eastern Mortgage Co. v. Williams (1987), 163 Ill. App. 3d 103, 516 N.E.2d 515.) Assuming arguendo that it is not waived, we find that the court’s determination that an oral contract existed was not against the manifest weight of the evidence.

The court stated as part of its findings that “plaintiff had carried the burden of persuasion, his evidence being more probably true than not true.” Although the trial court made reference to the “preponderance of evidence” standard, the court made no mention of the standard of proof it applied. (Gluth Brothers Construction, Inc. v. Union National Bank (1988), 166 Ill. App. 3d 18, 518 N.E.2d 1345.) Further, we find that the court’s determination that an oral contract existed is supported by the record. The record reveals that plaintiff was hired by Uresil in 1979 and placed on salary. He later began working without compensation. Plaintiff claimed that defendant agreed to pay him 10% of the net proceeds that he would receive from a new business venture. The trial court heard the evidence and concluded that an oral agreement existed. A reviewing court will not substitute its judgment for that of the trial court unless its findings are against the manifest weight of the evidence. (Niemoth v. Kohls (1988), 171 Ill. App. 3d 54, 524 N.E.2d 1085.) Therefore, we are not required to reverse the trial court’s ruling.

Defendant further argues that the trial court erred in failing to find that plaintiff received full compensation for his services as acknowledged by his receipt of a check from defendant. On July 12, 1982, defendant wrote a check payable to plaintiff with the notation “For Services to Uresil, Inc., in full.” He testified that the check was paid to plaintiff for services plaintiff rendered to Uresil from November 29,1980, through May 1982.

The record here reveals that plaintiff’s salary with Uresil was $380 per week until he went off salary in 1980. Plaintiff did not receive a salary for about 17 months. On July 12, 1982, he received a check in the amount of $38,958. Dr. Goldberg testified that this amount constituted the 10% which plaintiff was entitled to receive after expenses were deducted from a $750,000 initial payment from Becton-Dickinson. Defendant testified that this amount represented the payments plaintiff would have received from November 29, 1980, through May 1982, if his salary were $380. We note, as the trial court correctly pointed out, that if the payment reflected the salary due him, then plaintiff was overpaid by $11,000. Moreover, it is the responsibility of the trial court to determine the credibility of witnesses and weight to be given their testimony. (In re Marriage of Ligas (1982), 110 Ill. App. 3d 1, 441 N.E.2d 1277.) We cannot say that the court’s determination that plaintiff did not receive full compensation for his services was against the manifest weight of the evidence.

Defendant further argues that the trial court erred in determining that plaintiff’s in-court testimony was credible when it conflicted with his deposition testimony. At his deposition testimony, plaintiff testified that no calculation was made to arrive at the 1982 payment he received. However, at trial he explained how the figures were derived. Defendant contends that the court’s apparent acceptance of plaintiff’s explanation constituted reversible error.

When questioned by defense counsel regarding his deposition testimony, the following colloquy occurred:

“ALAN GOLDENBERG [plaintiff]: I would like to correct my answer.
MR. McNULTY [Defense attorney]: You can do so during counsel’s examination if you wish. I am not asking you to correct the answer, but I am going to give *** I’m sure my further questions will give you an opportunity to do so.”

It is well settled that it is within the province of a trial court to determine the credibility of witnesses, the weight to be accorded their testimony, and to resolve inconsistencies and conflicts. (Niemoth v. Kohls (1988), 171 Ill. App. 3d 54, 524 N.E.2d 1085.) A reviewing court will not substitute its judgment for that of the court unless its findings are against the manifest weight of the evidence. (MBL (USA) Corp. v. Diekman (1983), 112 Ill. App. 3d 229, 445 N.E.2d 418.) Defendant’s contention here is one of credibility of the witnesses. The trial court heard testimony of the witness and resolved the inconsistencies. Thus, defendant’s contention that the court’s acceptance of the testimony constituted reversible error is without merit.

Defendant also contends that plaintiff was impeached by the following deposition testimony:

“MR. McNULTY [Defense attorney]: This question was asked. Now, did you make an independent examination [of] books and records of Uresil to ascertain the accuracy of the $370,000 amount of liabilities that was explained to you as being paid in connection with the Becton-Dickinson purchasef?]”

Plaintiff testified at trial:

“MR. GOLDENBERG [Plaintiff]: Mr. Bazell and I sat down and with information that the [accountant] had available at the time, we began formulating a list of the liabilities that would be offset against the gross amount, and we reached a determination.”

To be admissible for purposes of impeachment, deposition testimony must contradict a witness’ in-court statements. (Law v. Central Illinois Public Service Co. (1980), 86 Ill. App. 3d 701, 408 N.E.2d 74.) The determination of whether a prior statement is impeaching is within the discretion of the trial court. (Thompson v. Abbott Laboratories (1990), 193 Ill. App. 3d 188, 549 N.E.2d 1295.) Here, the trial court heard the evidence and ruled that the statement was not impeaching. The record shows that plaintiff testified that he and defendant added up the liabilities, not that he examined books and records to see if the figures given to him were accurate. In light of these facts, we cannot say that the trial court abused its discretion in determining that the statement was not impeaching.

Defendant finally argues that the trial court’s judgment was against the manifest weight of the evidence. In this argument he basically summarizes his previous contentions. We need not address each individual point as they have been reviewed in our earlier discussion. However, we note that the evidence in the record demonstrated that plaintiff had an agreement with defendant over several months. Although the terms were not fixed in a written document, the court heard the testimony of several witnesses, as well as reviewed the evidence submitted, and determined that an oral contract existed. We believe that the court’s determination was not against the manifest weight of the evidence. Dr. Goldberg testified about the prior business arrangements that Uresil had with defendant, and plaintiff testified that he was offered that same arrangement. As we previously explained, whether an oral contract exists, its terms and conditions, and the intent of the parties are questions of fact to be determined by the trier of fact. (Howard A. Koop & Associates v. KPK Corp. (1983), 119 Ill. App. 3d 391, 457 N.E.2d 66.) Here, we cannot say that the court’s determination should be reversed.

Accordingly, the judgment of the circuit court of Cook County is affirmed.

Affirmed.

CAMPBELL and O’CONNOR, JJ., concur.


source: Caselaw Access Project

author: JUSTICE McNAMARA

license: Public Domain

text:
    MICHAEL E. PENZELL, Plaintiff-Appellee and Counterdefendant-Appellee, v. KATHERINE S. TAYLOR, Defendant and Counterplaintiff-Appellant (Satellite Music Network, Inc., Counterdefendant-Appellee).
    First District (6th Division)
    No. 1—90—1340
    Opinion filed September 6, 1991.

      Law Offices of George E. Weaver, of Chicago (George E. Weaver and Robert C. Gislason, of counsel), for appellant.
    Katz, Randall & Weinberg, of Chicago (Lawrence M. Karlin, of counsel), for appellee Michael E. Penzell.
    Skadden, Arps, Slate, Meagher & Flom, of Chicago (David E. Springer, David W. Hansen, and Rawn H. Reinhard, of counsel), for appellee Satellite Music Network, Inc.
   JUSTICE McNAMARA

delivered the opinion of the court:

Plaintiff, Michael E. Penzell, filed a single-count complaint against defendant, Katherine S. Taylor, seeking recovery of $15,000 for payment on a written demand promissory note. Taylor filed a counterclaim seeking to enforce an alleged guarantee made by Penzell that Taylor would earn $200,000 during her first year of employment with Satellite Music Network, Inc. (Satellite), consisting of counts sounding in fraud, breach of contract, breach of warranty of authority and breach of guaranty agreement against Penzell. Taylor also filed suit against Satellite, in which she sought damages for fraud, breach of contract and quantum meruit for commissions allegedly earned in the procurement of advertising for Sears Roebuck & Co. (Sears). The trial court dismissed the breach of guaranty agreement against Penzell for failure to state a cause of action. The trial court also granted summary judgment in favor of Penzell and Satellite on all remaining counts. Taylor appeals. (Taylor has subsequently paid the $15,000 promissory note to Penzell and that action is not at issue in this appeal.)

The record reveals the following relevant facts. Taylor had been employed for several years by ABC Television Network (ABC) as an account executive. Penzell, who previously worked for ABC, was employed as vice-president and central division sales manager for Satellite. In April 1986, Penzell contacted Taylor and inquired whether she was interested in working for Satellite as an account executive. Taylor indicated to Penzell that she would have to earn more money at Satellite than she made at ABC, which was approximately $85,000 to $100,000 on the basis of salary and commission. (In 1984, Taylor’s earnings at ABC were $95,276, and $80,981 in 1985.) ABC did not guarantee Taylor’s commission income, but it did estimate her prospective earnings each year.

Penzell produced his W-2 form for 1985, which showed income over $300,000, for the purpose of demonstrating to Taylor the earning potential at Satellite. Penzell obtained authority to hire Taylor from his boss, Mel Diamond, and agreed that Taylor would be compensated at a 5% commission rate. On April 10, 1986, Taylor signed a letter from Penzell indicating that she would earn sales commissions at the rate of 5% against net sales after agency commission. The letter further stated that for the first three months of employment, Taylor was to receive a bimonthly draw of $3,750 which would then decrease to $2,708. The letter did not include language indicating any salary guarantees.

Taylor requested Penzell to memorialize the employment agreement in writing. Penzell provided Taylor with a letter received in April 1986 which states in relevant part:

“This reflects our personal and private understanding that I will make best efforts to structure assignments to provide you with a clear shot at annual earnings at the rate of $200,000 gross at Satellite Music Network. Of course, the effectiveness of your efforts is the other part of the equation.”

Penzell also wrote a letter upon Taylor’s request to Tom Dorazil at Lumbermen’s Investment Corporation. (Dorazil was Taylor’s boyfriend.) In that letter dated April 24, 1986, Penzell stated that Satellite had hired Taylor as an account executive with guaranteed earnings for the next calendar year in the amount of $200,000, and that he anticipated a long and profitable association. On May 5, 1986, Penzell signed a request for verification of employment from Columbia National Bank of Chicago for a mortgage for Taylor, in which he listed her monthly income as $16,666.67.

On May 1, 1986, Taylor left ABC and began employment with Satellite. Upon commencing employment, Taylor signed an insurance form listing her annual salary as $65,000. Penzell informed Taylor of the general geographic territory for which she would be responsible, as well as the account assignments.

In July 1986, Taylor reviewed the accounts that were assigned to her in Penzell’s billing box. At that time, Taylor determined that Penzell had misled her because the accounts assigned to her were not going to generate $200,000 in commissions. Taylor did not speak to Diamond or anyone else at Satellite about the alleged guarantee.

Taylor confronted Penzell after reviewing the account books, and told him that she was experiencing financial difficulty. Penzell informed Taylor that she would be able to increase her earnings because he was going to leave Satellite shortly.

In October 1986, Taylor approached Penzell and requested a loan because she could not meet her car, credit card, and mortgage payments on the house in Barrington she had purchased shortly before beginning employment with Satellite. Penzell lent $15,000 in cash to Taylor, and she signed a note stating that repayment was upon demand. This was the loan which precipitated the present action.

In January 1987, Taylor met with Diamond and John Tyler, also a Satellite executive. At that meeting, Tyler and Diamond assured Taylor that they wanted her to be happy, and that she would make a lot of money. Taylor was informed that she was no longer reporting to Penzell, but would report directly to Diamond.

Diamond apologized for all the confusion and told her that she would be handling the Sears account. Diamond told Taylor that he would forgive the $30,000 draw balance that she accumulated through January 26, 1987, and that she would now receive 10% commission on all orders that she wrote.

During the course of that meeting, Taylor showed Diamond a copy of the letter Penzell had written to her in April 1986, and told him that the salary of $200,000 promised by Penzell had not been honored. Diamond replied that “there was nothing that he could do about it.” Taylor had no further conversations with either Diamond or Tyler about the $200,000 promise. Taylor thought that she could make sufficient money in the future in order to attain the $200,000 yearly salary.

In April 1987, Taylor was promoted to Penzell’s former position as sales manager and maintained the same rate of commission. After her promotion, Taylor interviewed and subsequently hired Marilyn Cilo Cross as a sale's representative. Taylor told Cross that she would receive a draw of $40,000, and that her potential income including commissions would be $75,000. Taylor stated that she made this estimate after conducting an extensive study of Satellite’s past billing history, and that it was not a guarantee.

Taylor’s employment with Satellite ended on December 31, 1987, at which time Satellite closed the Chicago office. Taylor was paid commissions on all ads that ran during the time she was employed by Satellite. The record reflects that Taylor earned $155,000 at Satellite during 1987.

In his deposition, Penzell stated that he told Taylor that if she worked real hard she might be able to make between $100,000 and $200,000 or more per year, depending on a number of factors. Penzell informed Taylor at their initial meeting that a “guarantee was out of the question” and that he could not officially represent to her that she could make $200,000 per year without obtaining approval of the guarantee from Diamond or Tyler. Penzell further stated that the phrase “personal and private understanding,” found in his April 1986 note to Taylor meant that it was purely personal and was outside of his competence as a vice-president of Satellite. Penzell also said that he was not truthful at the time he wrote the letter to Dorazil because Taylor’s income was not guaranteed by Satellite at $200,000 or any other figure. Satellite never guaranteed an income to anyone in the sales department.

Penzell acknowledged that the amount of Sears’ advertising substantially increased after Taylor began her employment with Satellite; however, it could not be attributed solely to her efforts. Penzell was also heavily involved in the negotiations on the account, and much of the work took place with higher level employees such as himself, Diamond and Tyler. According to Penzell, commissions were earned for an ad after it was run and had been billed, not when the business was written. Penzell stated that it was customary in their industry that ads which were written before a person left employment, but were not billed, did not earn commissions. Penzell further stated that Taylor was aware of this practice, which was common knowledge at Satellite.

Taylor stated in her deposition that the only reason that she left ABC was because Satellite guaranteed her income in the amount of $200,000 for one year, unless and until such time as she might be discharged for cause. Taylor stated that she expected Satellite to return to her the difference between $200,000 and her actual earnings. Her income after April 20, 1987, was not guaranteed at any level.

Taylor stated that she was paid commissions only after an ad ran while employed at both ABC and Satellite, and that she believed that was standard for the industry. When Taylor left her previous position, she did not receive commissions for ads that ran after the time she was no longer employed at ABC.

On appeal, Taylor contends that the trial court erred in granting summary judgment in favor of Penzell and Satellite on her claims for fraud and breach of contract. She also challenges the grant of summary judgment in favor of Penzell on her claim for breach of warranty of authority, and the award of summary judgment for Satellite on her claim for quantum meruit recovery for commissions earned in the procurement of advertising for Sears. Taylor contends further that the trial court erred in dismissing her breach of guaranty agreement against Penzell for failure to state a cause of action.

It is well established that a motion for summary judgment is proper where the documents on file show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 1005(c).) In reviewing the order for summary judgment, this court must consider all of the facts revealed in the record and all of the grounds alleged by the parties in order to determine whether a genuine issue as to a material fact exists. Casteel v. Smith (1982), 109 Ill. App. 3d 1094, 441 N.E.2d 860.

We turn first to Taylor’s contention that the court erred in granting summary judgment in favor of Satellite and Penzell on her claims of fraud and breach of contract. Defendants argue that Taylor waived her claims because she continued to work after learning that she would not earn the alleged $200,000 employment guarantee. We find, however, that we need not reach the merits of whether Taylor’s subsequent actions constituted waiver because we find that neither Penzell nor Satellite guaranteed Taylor that her first year’s earnings would be $200,000.

In order to state a cause of action for fraud, the plaintiff must establish the misrepresentation of a material fact which was made for the purpose of inducing the other party to act; that the party making the statement knew or believed it to be false; that the party to whom the statement was made had a right to rely upon it and did so; and that reliance led to the party’s injury. (Madison Associates v. Bass (1987), 158 Ill. App. 3d 526, 511 N.E.2d 690, citing Glazewski v. Coronet Insurance Co. (1985), 108 Ill. 2d 243, 483 N.E.2d 1263; Redarowicz v. Ohlendorf (1982), 92 Ill. 2d 171, 441 N.E.2d 324.) Statements regarding future events or circumstances are not a basis for fraud. (Gross Valentino Printing Co. v. Clarke (1983), 120 Ill. App. 3d 907, 458 N.E.2d 1027.) However, an exception exists where the false promise or representation as to future conduct is alleged to be the scheme employed to accomplish the fraud. Steinberg v. Chicago Medical School (1977), 69 Ill. 2d 320, 371 N.E.2d 634.

Taylor has failed to show that Penzell engaged in a scheme of misrepresentations to induce her to leave her previous employment with ABC and accept employment with Satellite, and that he guaranteed her salary of $200,000. Taylor relies primarily upon the April 1986 letter which states that Penzell “will make best efforts to structure assignments to provide you with a clear shot at annual earnings at the rate of $200,000 gross.” That statement clearly does not amount to a guarantee. Moreover, it must be read in conjunction with the following sentence, which provides that the “effectiveness of your efforts is the other part of the equation.” As such, the contingency attached to the proposed salary of $200,000 prevents this letter from serving as an unconditional guarantee of such a salary.

Penzell’s letter of April 24, 1986, to Dorazil confirms Taylor’s salary for the next calendar year at $200,000; however, that letter was written for the express purpose of helping her obtain a mortgage. Moreover, that letter was not directed to Taylor; rather, it was addressed to Dorazil, thereby negating any inference that Taylor relied upon its contents and that it was made for the purpose of fraudulently inducing her to act. Also, the record shows that on April 10, 1986, prior to commencing employment at Satellite, Taylor signed a letter from Penzell indicating that she would earn sales commissions at the rate of 5% against net sales after agency commission, and reciting the amount of monthly draw that she would receive during her first six months of employment. That letter did not contain any language pertaining to a salary guarantee.

Similarly, the employment verification to Columbia National Bank of Chicago, signed on May 5, 1986, after Taylor had already begun work at Satellite, cannot be said to have fraudulently induced her decision to leave ABC and join Satellite. The employment verification was also intended to help Taylor secure a mortgage on the house in Barrington that she had already purchased prior to the time she accepted the position at Satellite.

Thus, any argument positing that Taylor relied on Penzell’s projections as set forth in the communication to Dorazil and the bank is without merit. Indeed, Taylor stated during her deposition that her debt structure with respect to her house and car payment was in place before she began work at Satellite.

Other evidence found in the record belies Taylor’s assertion that she was guaranteed an annual income of $200,000. Taylor signed an insurance form at the time she was hired by Satellite listing her annual salary as $65,000. We find that the trial court properly concluded that there is no genuine controversy of material fact as to the fraudulent nature of both Penzell’s and Satellite’s actions, and that they are entitled to summary judgment as a matter of law. Jackson v. Reliable Paste & Chemical Co. (1985), 136 Ill. App. 3d 766, 483 N.E.2d 939.

We turn now to Taylor’s claims for breach of contract against Penzell and Satellite. Count III sought damages from Penzell for breach of contract for his alleged failure to structure assignments to ensure that she would have a reasonable opportunity to earn $200,000 per year as memorialized in his April 1986 letter to Taylor. Count IV sought damages from Satellite for breach of the employment agreement by compensating Taylor at substantially less than $200,000 per year, and for terminating her employment without cause.

In a breach of contract action, plaintiff must establish an offer and acceptance, consideration, the terms of the contract, plaintiff’s performance of all required contractual conditions, the defendant’s breach of the terms of the contract and damages resulting from the breach. (Martin-Trigona v. Bloomington Federal Savings & Loan Association (1981), 101 Ill. App. 3d 943, 428 N.E.2d 1028.) For the court to find that an enforceable contract exists, the parties must have entered into an agreement which is sufficiently definite and certain so that the terms are either determined or may be implied. (Magid Manufacturing Co. v. U.S.D. Corp. (N.D. Ill. 1987), 654 F. Supp. 325, 332, citing Kraftco Corp. v. Koblus (1971), 1 Ill. App. 3d 635, 274 N.E.2d 153.) When the material terms and conditions are not ascertainable, no enforceable contract is created. Magid Manufacturing, 654 F. Supp. 325; Kraftco Corp, 1 Ill. App. 3d 635, 274 N.E.2d 153.

In her claim against Penzell, Taylor relies upon the April 1986 letter in which Penzell stated that he would use his “best efforts” in structuring assignments to ensure that she earned $200,000. As previously discussed, we do not find that Penzell unequivocally guaranteed to Taylor that she would earn $200,000. Moreover, this court has held that the phrase “best efforts” is too indefinite and uncertain to be an enforceable standard. (Kraftco Corp., 1 Ill. App. 3d 635, 274 N.E.2d 153; Goodman v. Motor Products Corp. (1956), 9 Ill. App. 2d 57, 132 N.E.2d 356.) Therefore, we find that Taylor’s claim for breach of contract fails becaus the best effort required to be expended by Penzell is too vague to as jertain.

Taylor’s breach of contract claim against Satellite fares no better. Taylor maintains that Satellite breached its agreement by compensating Taylor at substantially less than $200,000 per year. (The record indicates that Taylor earned $205,055.30 for the period May 1, 1986, through December 1987.) However, on April 10, 1986, prior to the time she began employment with Satellite, Taylor signed an agreement indicating that she would earn sales commissions at the rate of 5% against net sales after agency commission, and set forth the bimonthly draw that she would receive during the first six months of employment. Taylor does not allege, nor is there evidence in the record, that she did not receive those draws.

Taylor’s contention that she was terminated without cause is also without merit. In her deposition, Taylor stated that Satellite guaranteed her income for one year, unless and until such time as she might be discharged for cause. Satellite closed its Chicago office on December 31, 1987, and terminated all employees, thereby providing sufficient cause for dismissal.

Accordingly, we find that the trial court correctly granted summary judgment on the breach of contract counts against Penzell and Satellite.

Taylor also maintains that the trial court erred in awarding summary judgment to Penzell on her claim that he breached his authority in fixing the terms of her salary at $200,000 per year. We need only reiterate our conclusion that Penzell did not guarantee to Taylor that she would earn $200,000.

We find, therefore, that there is no genuine issue of material fact with respect to Penzell’s breach of authority, and that summary judgment was properly granted in this instance.

We turn now to Taylor’s charge that the court erred in granting summary judgment on her quantum meruit claim that she should be entitled to the commission on the Sears account. She argues that under the procuring cause rule, she was entitled to the commission on the account. Under the procuring cause rule, a party may be entitled to commissions on sales made after the termination of a contract if that party procured the sales through its activities prior to termination; however, the rule applies only if the contract does not expressly provide when commissions will be paid. (Scheduling Corporation of America v. Massello (1987), 151 Ill. App. 3d 565, 503 N.E.2d 806, citing Technical Representatives, Inc. v. Richardson-Merrell, Inc. (1982), 107 Ill. App. 3d 830, 438 N.E.2d 599.) The procuring cause rule is an equitable doctrine that protects a sales person who is discharged prior to culmination of a sale but who has done everything to effect the sale. Heuvelman v. Triplett Electrical Instrument Co. (1959), 23 Ill. App. 2d 231, 167 N.E.2d 875.

In his deposition, Penzell stated that commissions were earned for ads only after they were run and had been billed, and not when the business was written. According to Penzell, this practice was customary in the industry as well as Satellite and Taylor was aware of this fact. Most importantly, Taylor in her own deposition agreed with Penzell’s statement and said that she was paid commissions only after an ad had run at both ABC and Satellite, and that she assumed that was standard practice for the industry.

In view of the fact that the ads ran and were billed in 1988 after Taylor’s departure, we find that the industry standard of which Taylor was aware in paying commissions precludes her from prevailing on her claim for quantum meruit. Accordingly, we conclude that the trial court’s grant of summary judgment for this count was proper under the circumstances of this case.

Taylor finally contends that the trial court improperly dismissed her claim against Penzell for breach of personal guaranty pursuant to section 2 — 615 of the Illinois Code of Civil Procedure for failure to state a cause of action. The crux of Taylor’s claim is that the phrase “personal and private understanding” included in the April 1986 letter provides her with Penzell’s personal guaranty that she would earn $200,000.

As we have already noted, the April 1986 letter does not amount to any type of guaranty. Penzell stated only that he would make his best efforts to provide Taylor with an opportunity to make $200,000 annually. Penzell further conditioned the statement by pointing out that Taylor’s ability to earn that amount would also depend on her own efforts. The letter on its face did not constitute a guaranty, and the trial court correctly dismissed that count for failure to state a cause of action.

For all the foregoing reasons, the judgment of the circuit court of Cook County is affirmed.

Judgment affirmed.

RAKOWSKI, P.J., and EGAN, J., concur.


text:
    JAMES T. HERST et al., Plaintiffs-Appellees, v. ALVIN C. CHARK et al., Defendants-Appellants.
    First District (1st Division)
    No. 1—88—3722
    Opinion filed September 9, 1991.

      Jeffery Strange & Associates, of Wilmette (Jeffery Strange, of counsel), for appellants.
    Merle L. Royce, of Chicago, for appellees.
   PRESIDING JUSTICE MANNING

delivered the opinion of the court:

This is an interlocutory appeal pursuant to Supreme Court Rule 307 (107 Ill. 2d R. 307) from an order granting a preliminary injunction, an accounting, and the right to distribution of revenues on behalf of plaintiff, James T. Herst (hereafter Herst). Herst and his corporation, Performance Source, Inc. (hereafter PSI), sued defendants, Alvin C. Chark (hereafter Chark), ACC Systems, Inc. (hereafter ACC), and Legal Liaison Service, Ltd. (hereafter LLS), for judicial dissolution of a joint venture, an accounting, constructive trust, and injunctive relief alleging that he and Chark were engaged together in the commercial debt collection business and that he was entitled to certain remuneration as a result. Chark filed an answer individually and a counterclaim on behalf of LLS asserting that Herst had been a commission salesman for LLS, that the parties had never entered into a joint venture, that Herst was engaged in unfair competition, tortious interference, and breach of fiduciary duty. No cross-appeal is involved.

In the verified complaint filed on November 30, 1988, Herst alleged that in 1982 he and Chark entered into a written or verbal agreement establishing a joint venture to engage in the commercial debt collection business where Herst was to sell the venture’s services to commercial clients through the use of his unique marketing concept of a renewable, refundable retainer and Chark was to perform the collections of the clients’ debts. The complaint alleged that Herst solicited clients, authored the sales documents and client agreements and that the two men established a jointly owned reserve account for the refund of client retainers. The enterprise continued until September 1, 1987, when Herst gave Chark notice of termination of the venture and sought an accounting which Chark refused to provide.

On October 4, 1988, the trial court rendered its findings which were incorporated in the written order entered on November 22, 1988. The issue on appeal is whether the parties were engaged in business as joint venturers or whether their relationship was one of employer and independent salesman.

A court of review will not substitute its own opinion and disturb the findings of the trial court unless the holding of the trial court is manifestly against the weight of the evidence. (Schulenburg v. Signatrol, Inc. (1967), 37 Ill. 2d 352, 356, 226 N.E.2d 624.) The appellate court is required to review the entire record as a whole, considering all evidence in its aspects most favorable to the appellee. See, e.g., Trauscht v. Gunkel (1978), 58 Ill. App. 3d 509, 515-16, 374 N.E.2d 843.

In this case, the trial court after hearing all of the evidence concluded that Herst and Chark were engaged in a joint venture and that Herst was entitled to an accounting and a part of the revenues. We affirm.

Herst maintains that commencing in 1982, the parties entered into either a verbal or written agreement, as evidenced by the memo of understanding, to form a joint venture. Chark maintains that it was never his intent to enter into a joint venture relationship with Herst and asserts that the independent sales agent agreement is the best evidence of the parties’ intent and their relationship and that no parol evidence should have been allowed in the trial court to contradict unambiguous terms that were expressed in the sales agreement.

Initially, we note that Public Electric Construction Co. v. Hi-Way Electric Co. (1978), 62 Ill. App. 3d 528, 378 N.E.2d 1147, which Chark refers to in support of his position, is distinguishable on its facts. In that case, plaintiff alleged that, pursuant to an oral agreement, the parties were engaged in a joint venture and thus requested the trial court to find that such a relationship continued even" after the oral agreement creating a subcontractual arrangement was reduced to writing. The court there declined to find the existence of a joint venture, noting that a joint venture is not a status created or imposed by law, but is a relationship voluntarily assumed and a matter of intent as between the parties. Although the court stated that the intention of only one party to enter into a joint venture is insufficient, it concluded that where a relationship is governed by a contract, the contract controls. Public Electric, 62 Ill. App. 3d at 532.

In the present case, there is no specific formal joint venture agreement or contract of record. The independent sales agreement referred to by Chark is not the controlling document with regard to the relationship between the parties. We have diligently searched the record and the only relevant sales agreement we have found is the one Herst used when hiring his sales staff. There is mention of an exclusive sales agreement between Chark and Herst; however, this agreement appears to be no more than one of several draft proposals that was exchanged between the parties over the years in an attempt to reach a final agreement. Neither is the memo, standing alone, the controlling document. The record reveals that the memo dated September 16, 1982, was authored and signed only by Herst and that at the bottom of the memo is a note that the parties would prepare and approve a specific formal agreement by December 31, 1982. The parties, as previously mentioned, never entered into a formal written agreement. However, like other contractual relationships, the existence of a formal agreement is not an indispensable necessity. Our courts have found that, in the absence of any specific formal agreement, a joint venture may be implied or established by proof of surrounding facts and circumstances showing such an enterprise was in fact entered into. (Ditis v. Ahlvin Construction Co. (1951), 408 Ill. 416, 97 N.E.2d 244; Burtell v. First Charter Service Corp. (1980), 83 Ill. App. 3d 525, 404 N.E.2d 455.) “It is the nature of the enterprise undertaken that controls, not the form of the agreement.” (Ditis v. Ahlvin, 408 Ill. at 425.) While surrounding circumstances may prove the existence of a joint venture, there must be a meeting of the minds, an agreement, express or implied, which shows the parties’ intent to embark on a joint venture. Barton v. Evanston Hospital (1987), 159 Ill. App. 3d 970, 974, 513 N.E.2d 65.

A joint venture is an association of two or more persons to carry on a single enterprise for profit. (Carroll v. Caldwell (1957), 12 Ill. 2d 487, 147 N.E.2d 69.) Partnership legal principles govern joint ventures (Bachewicz v. American National Bank & Trust Co. (1986), 111 Ill. 2d 444, 448, 490 N.E.2d 680), and the only distinction of consequence between the two is that a joint venture relates to a single enterprise or transaction, while a partnership relates to a general business of a particular kind. (Bachewicz v. American National Bank & Trust Co. (1979), 75 Ill. App. 3d 252, 393 N.E.2d 652.) In addition to the requirement that a joint venture must have a contractual basis, express or implied, there must also be present:

(1) a community of interest;
(2) a proprietary interest in the subject matter;
(3) a right to govern the policy in connection therewith; and
(4) a sharing in both profit and losses.

(See Richton v. Farina (1973), 14 Ill. App. 3d 697, 303 N.E.2d 218.) Possibly, the most important criterion of a joint venture is joint control and management of the property used in accomplishing its aims. Prassas v. Nicholas W. Prassas & Co. (1981), 94 Ill. App. 3d 311, 315, 418 N.E.2d 904.

We have reviewed the record below and, in applying the foregoing principles of law, find that the evidence, as shown by the surrounding facts and circumstances, substantially proves the existence of a joint venture between the parties, even though Chark has continually denied it. We agree with the trial court’s finding that Herst, a salesman, and Chark, a collections person, orally entered into a joint venture whereby the two would engage in the business of commercial debt collection. The evidence shows that pursuant to this relationship, Herst worked up his own collection program which entailed the sale of collection services under a refundable retainer deposit, generally in the amount of $1,200, for which the client would receive a credit in the amount of 20% against the collection fees earned by the “fulfiller” of the collection services, i.e., the person who actually performed the collection, Chark. Chark performed the collection services for a commission of 121/2%, which was reduced to 71/2% on amounts collected over $10,000.

Jerry Shumsky, a former employee of Chark, who worked with the parties from 1982 until February 1985, confirmed that the program was Herst’s idea and also corroborated Herst’s account that when the men first met Chark was attempting to expand his business with the prepaid legal letter service, where a collection letter would be sent to debtors under the auspices of an attorney. Mr. Shumsky stated that Herst was not involved in the legal letter service business, which never got off the ground, but did greatly expand Chark’s business with the retainer program.

Based upon the depositions and exhibits on file, we find that the parties’ descriptions of their relationship, together with the testimony of Jerry Shumsky, demonstrate a detailed agreement to engage together in a collection business. Pursuant to the memo, the parties were to divide the business along two function lines, marketing and fulfillment, and also divide the revenues and expenses of the enterprise along the same functional lines. Although the memo was authored and signed only by Herst, the evidence in the record reveals that the parties operated the enterprise in the manner as set forth therein from 1982 until 1987.

Moreover, the record demonstrates that Herst contributed his efforts and skills to the enterprise by conceiving the idea of the refundable retainer program, under which he immediately acquired 80% of the prepaid retainer. He authored the sales materials, client starters kits and client agreements and paid for marketing expenses, conducted seminars and wrote articles. We believe that the creation and use of the reserve fund, whereby the remaining 20% of the prepaid retainer was set aside, establishes that the parties provided for the sharing of losses and profits of the enterprise. The account was jointly owned and the parties drew upon the initial reserve and renewal amounts above a certain figure that was required to remain in the account in the event a client requested a refund. From time to time Herst borrowed against the reserve account, providing promissory notes reflecting such borrowing. Certain expenses were paid from this account as well. Even though Herst did not share in the costs of the office or the profits and losses of Chark’s business as a whole, he nevertheless shared in that part of the profits and losses as between the parties with respect to particular clients serviced through the refundable retainer program set up by Herst.

Further, Herst was always identified as a principal of the business and was held out to the public as such. The fact that Herst did not participate in the management of the collection portion of the enterprise does not, in our view, preclude the existence of a joint venture. He did, however, control the management aspects of the soliciting and sales functions of the enterprise. He hired his own sales staff and paid them a part of the commission to which he was entitled pursuant to his agreement with Chark. As stated previously, the independent sales agreement that Chark discusses in his brief is the type of agreement that Herst entered into with his sales agents. He hired other personnel, marketing consultants, conducted seminars and wrote articles and publications about the type of business he and Chark conducted. We find these facts and circumstances supportive of Herst’s position regarding the agreement of the parties and the right of management and control on the part of Herst. The legal requirement of a right to management or control has been interpreted as requiring some right by the parties to direct and govern the conduct of each other in connection with the joint venture. Clapp v. JMK/Skewer, Inc. (1985), 137 Ill. App. 3d 469, 484 N.E.2d 918.

Moreover, we agree with the trial court’s finding that commencing in September 1982 and continuing throughout the years, the parties continued to negotiate a final written agreement. Despite numerous attempts and draft agreements, the parties were never able to reach a written agreement, and thus Herst terminated the parties’ relationship on September 11, 1987.

Accordingly, with respect to the relationship between Herst and Chark, we believe that the trial court properly found that the facts and circumstances demonstrate that the two men were engaged in a joint venture, rather than a principal/agent sales business. The only contrary evidence is Chark’s denials; however, the issue of intent, at best, presents a question of the credibility of the witnesses, which is within the exclusive province of the trial court. (Bauske v. City of Des Plaines (1957), 13 Ill. 2d 169, 181, 148 N.E.2d 584; John Allan Co. v. Harvey (1971), 131 Ill. App. 2d 626, 629, 267 N.E.2d 533.) On review, we will not disturb that finding. Where the testimony of the parties is susceptible to a challenge of credibility, as where the testimony or evidence is contradictory, “the trial judge as the trier of fact is in a position superior to a court of review to observe the conduct of the witnesses while testifying, to determine their credibility, and to weigh the evidence and determine the preponderanee thereof.” Reese v. Melahn (1973), 53 Ill. 2d 508, 513, 292 N.E.2d 375.

Finally, Chark maintains that parole evidence of certain matters was improperly admitted to establish the existence and scope of the parties’ relationship. We disagree, as in the instant case, parole evidence is admissible where a contract is incomplete or its language is ambiguous or uncertain. See, e.g., Weiland Tool & Manufacturing Co. v. Whitney (1969), 44 Ill. 2d 105, 251 N.E.2d 242.

We affirm the decision of the trial court granting the preliminary injunction and other relief and remand this matter for further proceedings.

Affirmed and remanded.

CAMPBELL and O’CONNOR, JJ., concur.


author: JUSTICE O’CONNOR

text:
    JAMES SCHROEDER, Plaintiff-Appellant, v. MORTON GROVE POLICE PENSION BOARD et al., Defendants-Appellees.
    First District (1st Division)
    No. 1—90—1297
    Opinion filed September 9, 1991.

      Odelson & Sterk, Ltd., of Evergreen Park (Mark H. Sterk, Burton S. Odelson, and Keri-Lyn J. Krafthefer, of counsel), for appellant.
    Puchalski, Keenan & Reimer, of Chicago (Richard J. Puchalski, of counsel), for appellees.
   JUSTICE O’CONNOR

delivered the opinion of the court:

James Schroeder appeals from the trial court’s order that granted the pension board summary judgment.

On June 3, 1973, Schroeder joined the Morton Grove police department and began making contributions to the pension fund. He continued to make contributions to the pension fund throughout his employment. On or about July 16, 1983, while on duty as a police officer, Schroeder was injured, leaving him mentally disabled. Subsequently, on July 26, 1984, the pension board awarded Schroeder a duty-related disability pension. Shortly thereafter, Schroeder filed a workers’ compensation claim against the Village of Morton Grove with the Illinois Industrial Commission pursuant to the Workers’ Compensation Act (Act) (Ill. Rev. Stat. 1983, ch. 48, par. 138.1 et seq.) seeking compensation for the same injury. On May 13, 1988, the Industrial Commission approved a settlement between the parties for a lump sum of $89,500. After settling the workers’ compensation claim, the pension board rendered an administrative decision and order. Pursuant to section 3 — 114.5 of the Pension Code (Ill. Rev. Stat. 1987, ch. ÍOB1^, par. 3 — 114.5), the pension board reduced Schroeder’s disability pension by the amount of the settlement under the Workers’ Compensation Act.

In 1973, the Workmens’ Compensation Act provided for a reduction in pension benefits by amounts received as workers’ compensation (Ill. Rev. Stat. 1973, ch. 48, par. 138.1(b)(1)). Section 1(b)(1) of the Workmens’ Compensation Act provided:

“[An employee] who is *** or shall be entitled to receive a pension or benefit for or on account of disability or death arising out of or in the course of his employment from a pension or benefit fund to which the State or any county, town, township, incorporated village, school district, body politic, underwriters’ fire patrol or municipal corporation therein is a contributor, in whole or in part, is entitled to receive only such part of such pension or benefit as is in excess of the amount of compensation recovered and received by such employee *** under this Act.” (Ill. Rev. Stat. 1973, ch. 48, par. 138.1(b)(1).)

However, effective October 1, 1974, section 1(b)(1) of the Workmens’ Compensation Act was repealed. In 1977, the Pension Code was amended to include section 3 — 151, which provided that pension disability should be reduced by the amounts received in a claim pursuant to the Act. (Ill. Rev. Stat. 1977, ch. ÍOB1^, par. 3 — 151.) Then, on January 1, 1985, section 3 — 151 was repealed and recodified verbatim in section 3 — 114.5 of the Pension Code.

On November 15, 1988, Schroeder filed a two-count complaint against the pension board and its five members in the United States District Court for the Northern District of Illinois. Count I alleged that reduction of his pension rights violated his right to procedural due process under 42 U.S.C. section 1983 (1988), and count II requested review of the pension board’s decision to reduce his disability payments. After a lengthy discussion only with respect to whether Schroeder was denied due process, the district court captioned the following as its conclusion:

“The Pension Board acted according to the Illinois statute which requires adjustment of pension benefits to reflect workmen’s compensation awards. A review of Illinois case law indicates that the Pension Board correctly interpreted its authority under the statute. Sellard v. Board of Trustees, 478 N.E.2d 1123[.] *** Mathews indicates that in this type of case a pretermination hearing is not constitutionally necessary. Section 3 — 148 of [the] Illinois Pension Code provides specific redress by which plaintiff can be made whole. See Gualano v. City of Des Plaines, 487 N.E.2d 1050 (Ill. App. 1985). Adequate state remedies are available and plaintiff has failed to exhaust these remedies or claim that the state remedial scheme violates due process. Plaintiff’s complaint is dismissed.”

Thereafter, on April 28, 1989, Schroeder filed a complaint for administrative review in the circuit court of Cook County. Subsequently, Schroeder and the pension board filed their respective motions for summary judgment. On May 4, 1990, the circuit court granted the pension board summary judgment. Schroeder appeals.

Initially, we reject the pension board’s argument that Schroeder’s State court complaint is barred by the doctrine of res judicata because his Federal court complaint was “virtually identical” and was dismissed. However, the district court’s language that “[adequate state remedies are available and plaintiff has failed to exhaust these remedies” suggests that the court did not dismiss the case on its merits. Thus, this court may review Schroeder’s appeal on its merits.

Section 5 of article XIII of the 1970 Illinois Constitution provides that membership in a pension system of any local governmental unit in the State is “an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” (Ill. Const. 1970, art. XIII, §5.) An employee’s rights in the system vest, either at the time he enters the system, e.g., making contributions, or in 1971 when the 1970 Constitution became effective, whichever is later. Gualano v. City of Des Plaines (1985), 139 Ill. App. 3d 456, 458, 487 N.E.2d 1050, citing Kraus v. Board of Trustees of the Police Pension Fund (1979), 72 Ill. App. 3d 833, 390 N.E.2d 1281.

Vesting is defined in a contractual sense. (Gualano, 139 Ill. App. 3d at 458.) The “contractual relationship” between the State and the employee is formed and governed by the actual terms of the contract or pension at the time the employee initially contributes to the system. (Kraus v. Board of Trustees of the Police Pension Fund (1979), 72 Ill. App. 3d 833, 390 N.E.2d 1281.) The law which exists at the time of the contract formation is deemed to be a part of the contract as though it was expressly referred to or incorporated into it. Taft v. Board of Trustees of the Police Pension Fund (1985), 133 Ill. App. 3d 566, 479 N.E.2d 31.

Based upon this division’s decision in Gualano v. City of Des Plaines (1985), 139 Ill. App. 3d 456, 487 N.E.2d 1050, Schroeder argues that his pension should not have been reduced by the settlement amount. We agree. In Gualano, plaintiff Gualano joined the Des Plaines fire department in 1967. When he joined the fire department, he began contributing to the pension fund, and he continued to so contribute following the elimination of section 1(b)(1) of the Workers’ Compensation Act. As a consequence of Gualano’s continued contributions after section 1(b)(1) was eliminated, this court found that Gualano’s contractual rights were modified and resulted in the vesting of an additional pension benefit. Following that rationale, this court determined that the subsequent enactment of a section in the Pension Code which reinstated the reduction provision could not constitutionally diminish his vested rights. Thus, the panel held that Gualano’s pension benefits could not be reduced by the amount of his award pursuant to the Act.

The Gualano panel chose to follow the second district in Taft v. Board of Trustees of the Police Pension Fund (1985), 133 Ill. App. 3d 566, 479 N.E.2d 31. The Taft court held that plaintiff Taft’s continued contributions to his pension fund after the repeal of the reduction provision of the Workers’ Compensation Act increased his pension benefits and constituted the vesting of an additional right. The Taft court stated that “where a pension system increases an employee’s benefits, the employee can take advantage of a beneficial pension change where he provides consideration for the contractual modification, most often taking the form of new or continued [(emphasis omitted)] contributions to the pension system.” (Emphasis added.) (Taft, 133 Ill. App. 3d at 572, 479 N.E.2d at 35, citing Kuhlmann v. Board of Trustees of the Police Pension Fund (1982), 106 Ill. App. 3d 603, 607-08.) The Taft court found Kuhlmann v. Board of Trustees of the Police Pension Fund (1982), 106 Ill. App. 3d 603, 435 N.E.2d 1307, instructive. In Kuhlmann, the court held that an employee cannot, without the payment of additional consideration {i.e., pension contributions), take the benefit of changes in the pension system enacted after he entered the system. Kulhmann, 106 Ill. App. 3d at 608.

When the Gualano panel chose to follow Taft, it rejected Sellards v. Board of Trustees of the Rolling Meadows Firemen’s Pension Fund (1985), 133 Ill. App. 3d 415, 478 N.E.2d 1123. We also reject Sellards, despite the pension board’s reliance thereon. In Sellards, another panel from the first district rejected the argument that an employee’s pension rights were increased by the elimination of section 1(b)(1) (Ill. Rev. Stat. 1973, ch. 48, par. 138.1(b)(1)), stating that an employee’s pension rights are fixed at the time of vesting and “[t]he Constitution does not provide that a person has a vested right in any beneficial changes in a pension system.” (Emphasis added.) Sellards v. Board of Trustees of the Rolling Meadows Firemen’s Pension Fund (1985), 133 Ill. App. 3d 415, 417, 478 N.E.2d 1123, 1125.

The third district in Carr v. Board of Trustees of the Police Pension Fund (1987), 158 Ill. App. 3d 7, 511 N.E.2d 142, also adopted the reasoning of Gualano and Taft. Thereafter, the fifth district in Fenton v. Board of Trustees (1990), 203 Ill. App. 3d 714, 561 N.E.2d 105, relied upon Gualano, Taft and Carr. The Carr and Fenton courts held that the plaintiffs acquired an additional pension benefit which could not be reduced by the amount of the plaintiffs’ awards pursuant to the Act because the plaintiffs continued contributing to their respective pension funds following the repeal of section 1(b)(1).

In short, we follow the Gualano, Taft, Carr and Fenton rationale. Accordingly, Schroeder’s pension disability should not be reduced by the amount of his workers’ compensation settlement because he contributed to his pension fund before, during and after the repeal of section 1(b)(1) of the Act. Those contributions created an additional vested contract right which cannot constitutionally be diminished or impaired.

Based upon the foregoing, the case is reversed and remanded. Thus, we need not address Schroeder’s argument that the pension board violated his due process rights when the board reduced his disability pension without notice or hearing.

Reversed and remanded.

MANNING, P.J., and BUCKLEY, J., concur.


author: PRESIDING JUSTICE SCARIANO

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. JAMES PEOPLES, Defendant-Appellant.
    First District (2nd Division)
    No. 1—90—0221
    Opinion filed September 10, 1991.
    Randolph N. Stone, Public Defendei, of Chicago (Kim L. Sorrells and James H. Reddy, Assistant Public Defenders, of counsel), for appellant.
    Jack O’Malley, State’s Attorney, of Chicago (Renee Goldfarb, Michael Latz, and Loren A. Seidner, Assistant State’s Attorneys, of counsel), for the People.
   PRESIDING JUSTICE SCARIANO

delivered the opinion of the court:

James Peoples appeals from his judgment of conviction for the second degree murder (unreasonable belief that killing was justified) of Robert Wilkins, claiming: (1) that the State failed to afford him due process of law by requiring him at trial to prove, in order to escape a first degree murder conviction, that he believed that the killing was justified; (2) that this requirement denied him the equal protection of the law relative to criminal defendants who do not have to prove a mitigating factor to escape a conviction for a crime; and (3) that the requirement improperly deprives the State’s Attorney of the power to determine what charge to bring against a defendant. Peoples seeks a reversal of his conviction.

Peoples was tried without a jury on one count of first degree murder (intent to kill or do great bodily harm, or knowledge that acts would kill) pursuant to section 9 — 1(a)(1) of the Criminal Code of 1961, as amended (Code) (Ill. Rev. Stat. 1987, ch. 38, par. 9 — 1(a)(1)), and on one count of first degree murder (knowledge that acts created a strong probability of death or great bodily harm) pursuant to section 9 — 1(a)(2) of the Code (Ill. Rev. Stat. 1987, ch. 38, par. 9 — 1(a)(2)), for the December 31, 1988, stabbing death of Robert Wilkins. He was acquitted of both counts and convicted instead of second degree murder (unreasonable belief that killing was justified) pursuant to section 9— 2(a)(2) of the Code (Ill. Rev. Stat. 1987, ch. 38, par. 9 — 2(a)(2)), and sentenced to four years’ probation.

Section 9 — 2(a)(2) of the Code provides:

“A person commits the offense of second degree murder when he commits the offense of first degree murder as defined in paragraphs (1) or (2) of subsection (a) of Section 9 — 1 of this Code and either of the following mitigating factors are present: * * *
(2) At the time of the killing he believes the circumstances to be such that, if they existed, would justify or exonerate the killing under the principles stated in Article 7 of this Code [section 7 — 1 et seq. (Ill. Rev. Stat. 1987, ch. 38, par. 7 — 1 et seq.)], but his belief is unreasonable.”

According to section 9 — 2(c) of the Code (Ill. Rev. Stat. 1987, ch. 38, par. 9 — 2(c)):

“When a defendant is on trial for first degree murder and evidence of either of the mitigating factors defined in subsection (a) of this Section has been presented, the burden of proof is on the defendant to prove either mitigating factor by a preponderance of the evidence before the defendant can be found guilty of second degree murder. However, the burden of proof remains on the State to prove beyond a reasonable doubt each of the elements of first degree murder ***.”

Peoples first argues that section 9 — 2(c), by placing the burden on him to prove the presence of the mitigating factor, relieves the State of the burden of proving every element of the crime beyond a reasonable doubt, and therefore deprived him of due process of law. (U.S. Const., amend. XIV, §1.) Second, he claims that section 9 — 2(c) prevents first degree murder defendants from pleading guilty to the lesser charge of second degree murder, and therefore forces them to risk conviction for first degree murder even when the State agrees that they are guilty only of the lesser charge. Thus, first degree murder defendants are treated differently from other criminal defendants who do not have to prove a mitigating factor to lessen the severity of their crime, and this differentiation impinges on the fundamental “right to just treatment in the criminal process” so as to deny first degree murder defendants “the equal protection of the laws.” (U.S. Const., amend. XIV, §1.) Finally, he avers that section 9 — 2(c) prevents State’s Attorneys from charging a defendant with second degree murder and that therefore the passage of the law was an exercise by the legislative branch of a power “properly belonging to” the executive branch, in violation of section 1 of article II of the Illinois Constitution. Ill. Const. 1970, art. II, §1.

The State responds that Peoples has no standing to raise the foregoing arguments. We agree. In People v. Esposito (1988), 121 Ill. 2d 491, a defendant who had been issued a judicial driving permit pursuant to section 6 — 206.1 of the Illinois Driver Licensing Law (Ill. Rev. Stat. 1985, ch. 951/2, par. 6 — 206.1) challenged the law on the ground that it violated section 1 of article II of the Illinois Constitution (Ill. Const. 1970, art. II, §1), by giving the Secretary of State the power to review a circuit court’s grant of such a permit, and the equal protection clause of the United States Constitution (U.S. Const., amend. XIV, §1), by not authorizing persons who are not Illinois residents to apply for such permits. The court, noting that the Secretary of State had not interfered with the circuit court’s grant of the judicial driving permit and that the defendant was an Illinois resident, held that she had no standing to challenge the constitutionality of the provision:

“A party may question the constitutional validity of a statutory provision only if he or she has sustained or is in immediate danger of sustaining some direct injury as a result of enforcement of the statute.” 121 Ill. 2d at 512.

In City of Chicago v. Lawrence (1969), 42 Ill. 2d 461, defendants were “found guilty of interfering with a police officer in the performance of his duties.” (42 Ill. 2d at 462.) They claimed on appeal that the ordinance under which they were convicted was unconstitutional because it did not require that “the offense be committed ‘knowingly’ and with knowledge that the officer was engaged in the performance of his duties.” The court held that they had no standing to attack the ordinance on those grounds because:

“It is an established rule that courts will not entertain objections to an allegedly unconstitutional feature where the objecting party is not in any way aggrieved thereby. One who would attack an ordinance or statute as unconstitutional must bring himself within the class as to whom the law is unconstitutional.” (42 Ill. 2d at 464.)

The court stated that the evidence of defendants’ knowledge was so overwhelming that “[tjhey are not in a position to raise a constitutional question based on lack of scienter.” 42 Ill. 2d at 465.

In the case at bar, Peoples was successful in proving the existence of the factor which allowed him to be convicted of second degree murder instead of first degree murder. Therefore, he was not prejudiced by having to shoulder the burden of proof on the issue; moreover, the issue became moot when he undertook such burden successfully. Accordingly, he has no standing to raise the due process and equal protection arguments. In addition, because Peoples was convicted of second degree murder, he has no standing to challenge the constitutionality of the State’s Attorney’s alleged inability to charge him with that crime.

Moreover, the issues he raises have already been thoroughly aired and decided adversely to his position. (See People v. Lyons (1st Dist. 1991), 213 Ill. App. 3d 617, 620; People v. Gore (1st Dist. 1991), 212 Ill. App. 3d 984, 994-97; People v. Clark (4th Dist. 1991), 207 Ill. App. 3d 439, 444-49; People v. Jerome (2d Dist. 1990), 206 Ill. App. 3d 428, 436; People v. Burks (3d Dist. 1989), 189 Ill. App. 3d 782, 784-85.) Ac- . cordingly, we affirm Peoples’ conviction.

Affirmed.

HARTMAN and DiVITO, JJ., concur.


author: JUSTICE DiVITO

text:
    FIREMEN’S ANNUITY AND BENEFIT FUND OF THE CITY OF CHICAGO, Plaintiff-Appellant, v. MUNICIPAL EMPLOYEES’, OFFICERS’, AND OFFICIALS’ ANNUITY AND BENEFIT FUND OF CHICAGO, Defendant-Appellee.
    First District (2nd Division)
    No. 1—90—3324
    Opinion filed September 10, 1991.

      Fagel & Haber, of Chicago (Maynard B. Russell, Steven J. Teplinsky, and James A. Roth, of counsel), for appellant.
    Frederick R Heiss and William A. Marovitz, both of Chicago, for appellee.
   JUSTICE DiVITO

delivered the opinion of the court:

Plaintiff Firemen’s Annuity and Benefit Fund of Chicago (Firemen’s Fund) brought suit against defendant Municipal Employees’, Officers’, and Officials’ Annuity and Benefit Fund of Chicago (the Municipal Fund), alleging actions for unjust enrichment and imposition of a public trust. For relief, Firemen’s Fund sought a transfer of the City of Chicago’s (the City’s) contributions to the Municipal Fund to its pension fund. The Municipal Fund moved to dismiss the complaint, and the circuit court granted its motion. Firemen’s Fund appeals, raising in issue whether the circuit court erred in dismissing Firemen’s Fund’s complaint on the basis that the applicable statutes do not create a cause of action to compel the transfer of moneys and, thus, the court did not have the judicial authority to order the transfer.

Firemen’s Fund was created in accordance with the Firemen’s Annuity and Benefit Fund Act (Firemen’s Pension Act) (Ill. Rev. Stat. 1989, ch. 108x/2, par. 6 — 101 et seq.) to provide for the payment of retirement and disability benefits to disabled and retired City firefighters and their beneficiaries. Likewise, the Municipal Fund was established in accordance with the Municipal Employees’, Officers’, and Officials’ Annuity and Benefit Fund Act (Municipal Pension Act) (Ill. Rev. Stat. 1989, ch. 108x/2, par. 8 — 101 et seq.) to provide similar benefits to retired and disabled City employees and their beneficiaries. Both Firemen’s Fund and the Municipal Fund are supported through regular salary deductions from employees participating in the funds. In addition, the City provides matching contributions for each individual participant. It is these contributions which are at issue in the present case.

Prior to July 1, 1983, paramedics employed by the City were not considered “firemen” for purposes of inclusion in Firemen’s Fund; rather, their pension contributions were paid into the Municipal Fund. (See Ill. Rev. Stat. 1981, ch. lOS1^, par. 6 — 106(a).) A statutory amendment, which became effective on September 24, 1983, included City paramedics in Firemen’s Fund. (Ill. Rev. Stat. 1981, ch. lOS1^, par. 6 — 106(a).) In anticipation of the effective date of the amendment, Firemen’s Fund began accepting paramedics in its fund on July 1, 1983. After the amendment became effective, making paramedics eligible for membership in Firemen’s Fund, approximately 440 paramedics joined Firemen’s Fund.

Upon entrance of the paramedics to Firemen’s Fund, the Municipal Fund refunded to each of the paramedics the entire amount of their individual contributions paid into the Municipal Fund. The City’s matching contributions made on behalf of the individual paramedics, however, remained in the Municipal Fund.

On October 25, 1989, Firemen’s Fund filed its first complaint against the Municipal Fund. Thereafter, Firemen’s Fund filed an amended two-count complaint alleging actions for unjust enrichment and imposition of a public trust. Firemen’s Fund sought transfer of the matching contributions made by the City for the paramedics while members of the Municipal Fund.

On July 6, 1990, the Municipal Fund filed a motion to dismiss the complaint pursuant to sections 2 — 615 and 2 — 619 of the Code of Civil Procedure. (Ill. Rev. Stat. 1989, ch. 110, pars. 2 — 615, 2— 619.) After hearing arguments of counsel, the circuit court granted the Municipal Fund’s motion to dismiss. From the court’s order dismissing its complaint, Firemen’s Fund appeals.

Firemen’s Fund initially contends that the circuit court erred when it held that it had no jurisdiction to grant the relief requested. Specifically, Firemen’s Fund maintains that the court should have applied the equitable principle of unjust enrichment to transfer the City’s matching contributions from the Municipal Fund to Firemen’s Fund.

Firemen’s Fund argues here, as it argued before the circuit court, that because it will be responsible to pay disability benefits to the paramedics for injuries that occurred prior to the paramedics’ inclusion into Firemen’s Fund (in other words, during their inclusion in the Municipal Fund), the Municipal Fund should transfer all contributions made by the City on behalf of those paramedics now in Firemen’s Fund. Firemen’s Fund further argues that it will be required to calculate and pay annuity and pension benefits based upon the paramedics’ entire service as a paramedic, including the time of service prior to their inclusion in Firemen’s Fund. Because the purpose of the City’s contributions to both pension funds is to aid in the payment of the benefits available to participants in the funds and their beneficiaries, Firemen’s Fund contends that the Municipal Fund’s retention of in excess of $3 million contributed on behalf of paramedics now participating in Firemen’s Fund is improper and inequitable. Thus, Firemen’s Fund maintains, the circuit court erred in not ordering the transfer of the contributions pursuant to the principle of unjust enrichment.

In the instant case, the circuit court, after hearing arguments, held that the pension funds were “fundamentally creatures of the legislature” and, thus, it was powerless to grant the relief sought by Firemen's Fund. In so holding, the court stated:

“I have thought about this for purposes of appeal, and that’s why I have decided that the only reason that the Court is granting the motion is because I’m of the opinion that the Court is without power to grant the relief. Because if I thought that the equitable provisions and powers of this court would allow me to do so, I would do so because it’s logical, it’s fair, and it’s reasonable, only because of [Firemen’s Fund’s] requirement to consider [the paramedics’] prior service in calculating total pension.”

In response to Firemen’s Fund’s argument that the circuit court erred in dismissing its complaint, the Municipal Fund argues that it properly retained the City’s matching contributions. Specifically, the Municipal Fund contends that it followed statutory requirements to keep the matching contributions in a service annuity reserve. (Ill. Rev. Stat. 1989, ch. lOSVa, par. 8 — 172.) For support, it relies upon section 8 — 231 of the Municipal Pension Act, which provides, in pertinent part:

“Any participant in the fund who becomes a participant in any other annuity and benefit fund * * * may elect to receive a refund or annuity from this fund in the same manner as he would if he then resigned from his position in the service and had not become a participant in such other fund. No credit is allowed for any period of service as a participant in this fund for which the employee receives credit in such other fund, and no annuity shall be paid to such participant by this fund while he holds a position in the service which entitles him to participation in such other fund.” (Ill. Rev. Stat. 1989, ch. IO8V2, par. 8-231.)

The Municipal Fund further relies upon section 8 — 172 of the Municipal Pension Act, which provides in its entirety:

“Whenever any amount is refunded as provided in Sections 8 — 168 and 8 — 169, except in the case of a male employee who becomes a widower while in service after he becomes age 65, the amounts to the credit of the male employee from contributions by the city, shall be transferred to the prior service annuity reserve. Thereafter any such amounts shall become a credit to the city and, with interest thereon at the effective rate, be used to reduce the amount which the city would otherwise pay during a succeeding year.” Ill. Rev. Stat. 1989, ch. IO8V2, par. 8-172.

The Municipal Fund argues that these provisions specifically address the procedures to be used should a participant in the Municipal Fund switch to another pension fund. Because the legislature did not address the possibility that one fund would “rebate” the City’s matching contributions to another fund, the Municipal Fund argues that, by exclusion, the legislature did not intend such a result. See Janata v. Police Pension Fund (1986), 140 Ill. App. 3d 925, 927, 489 N.E.2d 498; Edwards v. Board of Trustees (1974), 22 Ill. App. 3d 260, 263, 317 N.E.2d 364 (in construing a statute, it is the duty of this court to enforce the pension law as enacted, according to its plain and unmistakable provisions).

Notwithstanding the Municipal Fund’s contention that it is not statutorily required to refund the matching contributions when participants in its fund switch to another fund, Firemen’s Fund maintains that the principles of equity demand such a result. Firemen’s Fund contends that the pension funds in the instant case are “in the nature of” charitable trusts. Consequently, the courts of equity have the jurisdiction to hear the dispute and the power to award an equitable remedy. See, e.g., County of Cook v. Barrett (1975), 36 Ill. App. 3d 623, 632-33, 344 N.E.2d 540 (the control of a trust is a matter exclusively within the jurisdiction of equity); Gavin v. Curtin (1898), 171 Ill. 640, 649, 49 N.E. 523 (if a court has jurisdiction to hear a cause, there is no reason why it should be deemed lacking in power to grant the same character of relief).

Firemen’s Fund thus urges this court to apply the doctrine of cy pres to the instant case. While Firemen’s Fund’s failure to raise this argument in the circuit court is not fatal, its cy pres argument is tenuous. Cy pres applies to property given in trust to be applied to a particular charitable purpose which has become impossible, impracticable, or illegal to carry out; in such a case, the court will direct the application of the property to some charitable purpose falling within the general purpose of the charity. (See City of Aurora ex rel. Egan v. YMCA (1956), 9 Ill. 2d 286, 294, 137 N.E.2d 347.) However, we do not accept Firemen’s Fund’s characterization of the pensions funds in the instant case as “charitable trusts.”

The pension funds in the instant case are not in the nature of charitable trusts, but rather are contracts between the participants and the pension fund. (See Gualano v. City of Des Plaines (1985), 139 Ill. App. 3d 456, 458, 487 N.E.2d 1050.) Moreover, article XIII, section 5, of the Illinois Constitution provides that membership in any pension system of the State “shall be an enforceable contractual relationship.” Ill. Const. 1970, art. XIII, §5; see also Gualano v. City of Des Plaines, 139 Ill. App. 3d 456, 487 N.E.2d 1050.

Firemen’s Fund also urges this court to apply the equitable principle of unjust enrichment. To state a cause of action based on the theory of unjust enrichment, a plaintiff must allege that the defendant has unjustly retained a benefit to the plaintiff’s detriment, and that the defendant’s retention of that benefit violates fundamental principles of justice, equity, and good conscience. (HPI Health Care Services, Inc. v. Mt. Vernon Hospital, Inc. (1989), 131 Ill. 2d 145, 160, 545 N.E.2d 672.) The cause of action based on unjust enrichment, however, does not require fault or illegality on the part of the defendant; rather, the essence of the cause of action is that one party is enriched and it would be unjust for that party to retain the enrichment. Partipilo v. Hallman (1987), 156 Ill. App. 3d 806, 810, 510 N.E.2d 8.

As the foregoing attests, both parties have advanced numerous reasons why the circuit court’s dismissal of Firemen’s Fund’s complaint was either in error or proper. Notwithstanding the arguments, the test for the dismissal of a complaint for failure to state a cause of action remains whether it clearly appears that no set of facts can be proved permitting the plaintiff the recovery he seeks. (Kenneke v. First National Bank (1978), 65 Ill. App. 3d 10, 12, 382 N.E.2d 309.) In determining whether a complaint states a cause of action upon which relief can be granted, all well-pleaded facts and reasonable inferences must be taken as true, and if these facts and inferences create a basis for recovery, a dismissal of a cause must be reversed. (Kenneke v. First National Bank, 65 Ill. App. 3d at 12.) Correspondingly, in an action in equity for unjust enrichment, a complaint on which recovery may be based need only allege that there has been unjust retention of a benefit by one party to the detriment of another against the fundamental principles of justice and equity. Kenneke v. First National Bank, 65 Ill. App. 3d at 12.

Here, despite the fact that Firemen’s Fund’s complaint alleged all the proper elements of unjust enrichment, the circuit court properly dismissed the cause. Although, as the circuit court stated, Firemen’s Fund pled and may be able to prove the elements of unjust enrichment, the fact that the pension funds in the instant case are created and maintained by legislative enactment requires this court to enforce the statutes according to their plain and unmistakable provisions. Janata v. Police Pension Fund, 140 Ill. App. 3d at 927; Edwards v. Board of Trustees, 22 Ill. App. 3d at 263.

Both the Firemen’s Pension Act and the Municipal Pension Act are lengthy and detailed. The legislature, in enacting the statutes applicable to the pension funds, clearly expended a great deal of effort in including all possible occurrences and results which could take place in the administration of the pension funds. Yet, nowhere in either act did the legislature provide for the transfer of the City’s matching contributions from one pension fund to another when participants switch funds. Rather, the legislature specifically provided, in circumstances where the participant withdraws from a pension fund, for the funds to remain in an annuity reserve. (Ill. Rev. Stat. 1989, ch. IO8V2, par. 8 — 172.) Notwithstanding section 8 — 172 of the Municipal Pension Act, the legislature has thus far failed to provide for a provision governing the wide-scale mandated transfer of participants from one fund to another, as has taken place in the instant case. In the absence of such a provision, we find that section 8 — 172 is applicable to the instant case and mandates that the Municipal Fund retain the City’s matching contributions in its annuity reserve fund.

Because a pension board “has no powers beyond those given to it in the act creating it, and has neither the right nor the power to pay moneys to anyone not within the terms of the act fixing the conditions under which a pension is payable” (People ex rel. Langan v. Hansen (1929), 252 Ill. App. 212, 221, citing People ex rel. Drea v. Hanson (1928), 330 Ill. 79, 161 N.E. 145), the circuit court did not err in refusing to usurp the power of the legislature to dictate the rights and responsibilities of the pension funds. Thus, we find that the circuit court properly dismissed Firemen’s Fund’s cause for failure to state a set of facts upon which recovery can be granted.

For the foregoing reasons, the judgment of the circuit court of Cook County is affirmed.

Affirmed.

SCARIANO, P.J., and HARTMAN, J., concur.

      Section 8 — 168 governs the procedures used when a participant withdraws from a pension fund and resigns from his position in the service. See also Ill. Rev. Stat. 1989, ch. 1081/2, par. 8-231.