author: JUSTICE MURRAY

text:
    NATIONAL SURETY CORPORATION, Plaintiff-Appellant and Cross-Appellee, v. FAST MOTOR SERVICE, INC., Defendant-Appellee and Cross-Appellant.
    First District (5th Division)
    No. 1—90—1320
    Opinion filed May 3, 1991.

      Sanders, Smith & Cross, of Chicago (John N. Dore and Claudia J. Sanders, of counsel), for appellant.
    Kurt G. Beranek and Michael F. Bonaguro, both of Fraterrigo, Best & Beranek, of Chicago, for appellee.
   JUSTICE MURRAY

delivered the opinion of the court:

Plaintiff, National Surety Corporation (National), appeals from an order of the Cook County circuit court, dated September 12, 1989, in which judgment was entered against it and in favor of Fast Motor Service, Inc. (Fast Motor), in the amount of $75,000. Fast Motor cross-appeals the denial of its motion for attorney fees and costs.

Fast Motor is a trucking firm engaged in the business of local and interstate freight transportation. Pursuant to its license, Fast Motor is required to maintain policies of insurance to cover claims that might be filed against it for workmen’s compensation, personal liability or property damage. Upon the advice of its insurance broker, Sentinel Insurance Agency, Fast Motor purchased these policies of insurance from National, initially for a term from 1977 through 1979, and then rewritten for the term of February 1, 1979, through February 1, 1982. The policies of insurance issued by National contained a retrospective premium feature, that is, the cost of premiums was determined using an “experience modifier,” allowing for the premiums to be adjusted annually based upon Fast Motor’s prior years’ losses or “claim experience.”

In 1979-80 a dispute arose between National and Fast Motor. Fast Motor disagreed with National’s settlement of small claims, believing that they were being overpaid and, thus, causing additional premiums due. Effective February 1, 1980, Fast Motor cancelled all its policies of insurance with National, except the workmen’s compensation policy, which was extended upon Fast Motor’s request until February 16, 1980. Using retrospective premium adjustment calculations, National determined that the premium due from Fast Motor for the period of February 1, 1979, through February 16, 1980, was $143,217. A bill for this amount was sent to Fast Motor, along with an “audit premium” for additional monies due for the period of February 1, 1980, through February 16, 1980, in the amount of $9,761. A partial payment of $35,000 was made by Fast Motor. However, the remaining amounts were never paid.

On August 17, 1982, National filed a two-count complaint against Fast Motor, alleging in count I a breach of contract and in count II an account stated, seeking damages in the amount of $108,117, plus costs and interest. On November 23, 1982, Fast Motor filed an answer, generally denying all material allegations in the complaint. A counterclaim was also filed at this time.

In the counterclaim Fast Motor alleged that National, by agreeing to provide a policy of insurance to Fast Motor, obligated itself to “use ordinary and reasonable care” when investigating and adjusting claims filed against Fast Motor and that National was negligent in the exercise of its responsibility by failing to properly investigate claims, failing to obtain wage statements, failing to obtain witness statements, overreserving claims, and overpaying claims. Fast Motor further alleged that, based upon National’s negligence, it had been charged higher premiums and would be forced to incur higher premiums in the future due to the “distorted loss experience” calculated from the excessive claims paid.

On December 9, 1982, National moved to strike the counterclaim for vagueness, and on February 7, 1983, the trial court entered an order striking Fast Motor’s countercomplaint with leave to amend within 28 days. No amended counterclaim was ever filed and so, on October 31, 1984, National filed a motion with the trial court requesting a final order dismissing the counterclaim with prejudice. On December 12, 1984, the trial court entered an order stating that National’s motion for dismissal was granted. Although the order did not specifically state that the dismissal was “with prejudice,” the order entered also denied Fast Motor’s motion for leave to file an amended counterclaim. Fast Motor filed a petition for rehearing on the trial court’s ruling with respect to the counterclaim in January 1985. The motion was denied on February 27, 1985.

On March 13, 1985, Fast Motor filed a complaint against National and Fireman’s Fund Insurance Company. Service of summons as to Fireman’s Fund was quashed, and Fast Motor’s case proceeded only against National. The complaint contained the identical allegations as set forth in Fast Motor’s original counterclaim except that it now sounded in contract. That is, rather than alleging that National was negligent, Fast Motor now alleged that National had breached its duty under the contract of insurance with Fast Motor by failing to properly investigate and evaluate the claims filed against Fast Motor and by overreserving and overpaying claims.

National moved to dismiss the complaint as barred by the doctrine of res judicata, based on the prior counterclaim’s dismissal with prejudice. This motion was denied by an order dated July 8, 1985. National also moved to strike Fast Motor’s complaint for failure to state a cause of action. This motion, too, was denied. Fast Motor moved to consolidate its cause of action "with the original cause of action brought by National, and this motion was granted by an order entered February 26, 1987. A jury trial was finally commenced on the consolidated cases on September 6,1989.

After all the evidence was heard and both parties rested their case, Fast Motor sought leave to file an affirmative defense to the complaint filed by National. This motion was granted. The affirmative defense filed by Fast Motor contained the same allegations as set forth in its complaint against National. The jury was then instructed and, after deliberations, found in favor of Fast Motor in both causes of action. Additionally, the jury awarded Fast Motor damages in the amount of $75,000 in its cause of action against National. The trial court denied National’s post-trial motions and Fast Motor’s motion for costs and fees. National filed an appeal from the jury verdict, and Fast Motor filed a cross-appeal from the denial of fees.

On appeal National contends that (1) the trial court erred by failing to dismiss Fast Motor’s complaint; (2) that the trial court erred by allowing Fast Motor to file an affirmative defense after all the evidence had been presented at trial; (3) that the trial court erred by allowing Fast Motor’s witness, Mr. Walker, to testify as an expert; (4) that the jury was not properly instructed; (5) that the judgment in favor of Fast Motor was against the manifest weight of the evidence; and (6) that the trial court erred by failing to enter judgment in its favor notwithstanding the verdict, or in the alternative, a new trial.

With regard to plaintiff’s first issue, we find that the trial court did not err by refusing to dismiss Fast Motor’s complaint on the grounds of res judicata. This is because the trial court erred, in the first instance, by dismissing “with prejudice” the counterclaim filed by Fast Motor.

A review of the record reveals that the motion brought by National for dismissal of the counterclaim, and the trial court’s grant of the motion, was based upon Fast Motor’s failure to amend its counterclaim. As such the dismissal should have been without prejudice, since such a dismissal is deemed to be a dismissal for want of prosecution. See Kraus v. Metropolitan Two Illinois Center (1986), 146 Ill. App. 3d 210, 496 N.E.2d 1080.

However, a more difficult question is whether the complaint should have been dismissed for failure to state a cause of action. National contends that there was no express duty within the contract of insurance with Fast Motor to adjust claims in accordance with any set industry standards and that Fast Motor failed to state a cause of action because it alleged a breach of a duty that did not exist. Fast Motor, on the other hand, contends that, despite the broad discretion given to insurers in settling claims, there exists an implied duty of reasonableness and good faith, especially when the insurer’s exercise of its discretion has ramifications for the insured.

There is no case law in Illinois which addresses an insurer’s duty to its insured in the context of an insurance policy containing a provision for retrospective premiums based upon loss experience. However, Fast Motor argues that imposing a duty of good faith and fair dealing in these instances is a reasonable extension of established Illinois law and should be adopted in this State, as has already been done in other States. We agree.

It has long been established in Illinois that an insurer owes his insured an implied-in-law duty of good faith and fair dealing (Ledingham v. Blue Cross Plan for Hospital Care of Hospital Service Corp. (1975), 29 Ill. App. 3d 339, 348, 330 N.E.2d 540) and that a cause of action exists when an insurer breaches his duty of good faith by wrongfully failing to settle an insurance claim within the policy limits. (See Krutsinger v. Illinois Casualty Co. (1957), 10 Ill. 2d 518, 141 N.E.2d 16; Brocato v. Prairie State Farmers Insurance Association (1988), 166 Ill. App. 3d 986, 520 N.E.2d 1200.) The rationale for this cause of action is that the insurer’s failure to settle within the policy limits subjects the insured to excess liability.

Likewise, an insured should be able to state a viable cause of action for breach of an insurer’s duty of good faith based on the insurer’s failure to act reasonably when adjusting claims under a policy of insurance which contains a retrospective premium feature notwithstanding the fact that the policy of insurance contains no express provisions imposing such a duty. This court realizes that, in general, an insurance company is given broad discretion in adjusting claims as long as the settlement does not exceed policy limits. (Cernocky v. Indemnity Insurance Co. of North America (1966), 69 Ill. App. 2d 196, 216 N.E.2d 198.) However, the general rule is irrelevant here, where the policy limits are not a set figure. When an insurance policy contains a retrospective premium feature, an insurer’s failure to act reasonably when adjusting claims automatically subjects the insured to greater financial obligations in the form of increased premium rates.

Such a cause of action has already been recognized in other jurisdictions. In Deerfield Plastics Co. v. Hartford Insurance Co. (1989), 404 Mass. 484, 536 N.E.2d 322, the insured (Deerfield) brought suit against the insurer (Hartford) to recover certain premium charges it paid under a workers’ compensation insurance policy with a retrospective premium endorsement, contending that Hartford negligently investigated, set a reserve, and settled an industrial accident claim, thereby causing Deerfield to incur substantially increased premium obligations under the retrospective rating plan. The court held that once Deerfield produced evidence that Hartford had been negligent in handling the claim and that, because of the retrospective rating scheme, this negligence could have had an adverse monetary effect on Deerfield’s insurance premium, it was Hartford’s burden to prove that the settlement made on the claim did not exceed the highest reasonable amount at which the claim would have probably been settled if it had been investigated properly.

Citing to decisions reached by two other courts under similar circumstances as support, Transit Casualty Co. v. Topeka Transportation Co. (1983), 8 Kan. App. 2d 597, 663 P.2d 308, and Transportation Indemnity Co. v. Dahlen Transport, Inc. (1968), 281 Minn. 253, 161 N.W.2d 546, the court in Deerfield Plastics reasoned that: “[The insurer] should not be allowed to retain the payments in issue unless it shows that it is entitled to them under its policy of insurance and that it has met its obligation, imposed by law, to act reasonably in making settlements where the money of the insured is involved.” Deerfield Plastics, 404 Mass. at 487, 536 N.E.2d at 324.

We, too, adopt this rationale and hereby hold that a cause of action is stated when an insured sues his insurer for a breach of duty for settling claims in an unreasonable manner when the policy of insurance contains a retrospective premium feature. Furthermore, since the facts concerning the breach of the duty of good faith may constitute either a tort or a breach of contract (see Ledingham, 29 Ill. App. 3d 339, 330 N.E.2d 540), a plaintiff may choose to bring suit in either tort or contract.

Based upon our findings above, Fast Motor’s complaint filed against National for breach of contract, asserting National’s failure to investigate claims and its course of conduct in overreserving and overpaying claims, stated a cause of action and the trial court did not err by denying National’s motion to strike the complaint. For the same reason, we also find that the trial court did not err by denying National’s motions for directed verdict and judgment notwithstanding the verdict. Contrary to its assertions, National did not prove its case against Fast Motor once it proved that a contract for insurance existed and that there was an amount of premiums due under that contract of insurance. Once Fast Motor placed into issue the reasonableness of the claim settlements made by National pursuant to that contract of insurance, National was required to prove its entitlement to the premiums charged.

Also, we reject National’s contention that Fast Motor’s cause of action amounts to a collateral attack of the Industrial Commission’s approval of the workmen’s compensation claims. The only case cited to by National for this proposition, Dyer v. Industrial Comm’n (1936), 364 Ill. 161, 4 N.E.2d 82, is clearly distinguishable. In Dyer the plaintiff refused to make payments on a workmen’s compensation settlement agreement, denying the validity of the agreement only after the insurance company became insolvent. There was no indication that the plaintiff in that case was charging the insurer with having settled the claim in bad faith, nor did the insurance policy involve a retrospective premium feature. Furthermore, it is unclear to what extent the Industrial Commission conducted proceedings on any of the challenged workmen’s compensation claims which were at issue in the case at bar.

Next we find that the trial court did not err by allowing Fast Motor to amend its answer to National’s complaint at the close of proofs. The Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 2—616) provides that a pleading may be amended at any time before final judgment. Whether to allow such an amendment is left to the sound discretion of the trial court. (United Air Lines, Inc. v. Conductron Corp. (1979), 69 Ill. App. 3d 847, 387 N.E.2d 1272.) Barring unfair prejudice or surprise to the other party, the trial court may exercise its discretion by allowing a party to amend its answer to include an affirmative defense. (Morris v. City of Chicago (1985), 130 Ill. App. 3d 740, 474 N.E.2d 1274.) In this case, the allegations in the affirmative defense were identical to the allegations raised in Fast Motor’s cause of action against National, which had been consolidated with National’s case against Fast Motor. Thus, National cannot reasonably claim that it was surprised or prejudiced by the affirmative defense. Therefore, we find that the trial court did not abuse its discretion by allowing Fast Motor to amend its pleading after all the evidence was heard to assert the affirmative defense.

We shall now address National’s remaining issues concerning the admission of evidence and jury instructions. First, National contends that it was denied a fair trial because the trial court admitted certain testimony given by Fast Motor’s expert, Mr. Walker, into evidence. After reviewing the arguments raised on appeal, we find it difficult to determine the exact nature of National’s objections to Walker’s testimony. National appears to question the qualifications of this witness to express some of the opinions given at trial and cites to cases that stand for the general proposition that experts must be shown to be competent to testify and that the underlying data relied upon has an objective degree of reliability. However, National fails to specify its objections to Mr. Walker and, instead, argues generally that Mr. Walker was given too much leeway and “allowed to roam verbally” in his testimony at trial. We are unpersuaded by National’s arguments.

Whether a witness qualifies as an expert is a question left to the sound discretion of the trial court, whose decision will not be overturned unless it is shown to be a gross abuse. (Norman v. American National Fire Insurance Co. (1990), 198 Ill. App. 3d 269, 555 N.E.2d 1087.) A witness may be qualified as an expert based upon his knowledge, skill, experience, training or education. (Hopkinson v. Chicago Transit Authority (1991), 211 Ill. App. 3d 825.) Once it is shown that the witness possesses specialized knowledge beyond that of the average person on a fact matter related to the litigation, the witness may be qualified as an expert. (Byrne v. SCM Corp. (1989), 182 Ill. App. 3d 523, 538 N.E.2d 796.) An expert witness may then testify as to his opinions based upon assumptions if they are supported by facts or reasonable inferences. Hopkinson v. Chicago Transit Authority, 211 Ill. App. 3d 825.

In the present case Fast Motor established that Mr. Walker had expertise in the area of claims auditing and that he had been hired to conduct an audit of the insurance claims adjusted by National. It was shown that Walker was the president of a company which was in the business of conducting such audits for commercial enterprises, that his education was in business administration and that he possessed more than 20 years’ experience in claims adjusting. Based on these qualifications, we find that the trial court did not err in finding Mr. Walker capable of testifying as an expert. Certainly Mr. Walker possessed more specialized knowledge than the average person regarding the handling of insurance claims and their settlement.

Nor do we find that National was denied a fair trial by the admission of Mr. Walker’s testimony. National objects to certain testimony on the ground that Walker based his opinions on assumptions. However, this was proper since the assumptions were based upon Walker’s knowledge, training and experience concerning the manner in which claims are handled. We note, too, that in some instances the particular testimony National specifies as objectionable, the record reveals that the trial court sustained National’s objections made at trial disallowing the evidence. For all the reasons stated above, we find that Walker was qualified to give expert testimony and the trial court did not err in so finding. Nor was National denied a fair trial because of the testimony given by Walker.

National’s final issue concerns the jury instructions. National contends that the instructions tendered by Fast Motor and given to the jury were improper because they did not adequately set forth the principles of law or burdens of proof applicable to the cases before the jury. We disagree.

The ultimate test for jury instructions is whether they provide a clear and adequate picture of the applicable law when viewed in their entirety. (First National Bank v. Illinois Central Gulf R.R. Co. (1978), 62 Ill. App. 3d 36, 378 N.E.2d 1329.) We find that the instructions given to the jury, viewed in their entirety, adequately appraised the jury of the law on the issues that were to be decided. The instructions tendered by National were properly refused by the trial court because they were repetitious of instructions tendered by Fast Motor and overly wordy, having included matters that were no longer at issue and, thus, could have been confusing to the jury.

Finally, we consider Fast Motor’s cross-appeal for fees and costs. Fast Motor contends that the trial court’s refusal to award attorney fees was against the manifest weight of the evidence. We disagree.

Fast Motor argues that attorney fees were available pursuant to statute. (Ill. Rev. Stat. 1987, ch. 73, par. 767.) However, the statute cited by Fast Motor provides:

“In any action by or against a company wherein there is in issue the liability of a company on a policy or policies of insurance or the amount of the loss payable thereunder, or for an unreasonable delay in settling the claim, and it appears to the court that such action or delay is vexatious and unreasonable, the court may allow as part of the taxable costs in the action reasonable attorney fees, other costs, plus an amount not to exceed any one of the following amounts ***.” Ill. Rev. Stat. 1987, ch. 73, par. 767.

First of all, it does not appear to this court that the action here falls squarely within the provisions of this statute. However, even if we were to hold that Fast Motor’s cause of action for breach of contact for failure to properly adjust claims did fall within this section of the statute, whether to allow attorney fees and costs is a decision left to the sound discretion of the trial court. (Songer v. State Farm Fire & Casualty Co. (1982), 106 Ill. App. 3d 141, 435 N.E.2d 948.) We believe that the trial court’s decision to deny attorney fees was not an abuse of discretion. The fact that the jury found that National breached its duty to Fast Motor need not require the trial court to find that National’s conduct was vexatious.

For all the reasons stated above, we affirm the judgment entered in favor of Fast Motor and against National, as well as the order denying Fast Motor’s motion for attorney fees and costs.

Affirmed.

LORENZ, P.J., and GORDON, J., concur.


source: Caselaw Access Project

license: Public Domain

text:
    J. ECK AND SONS, INC., Plaintiff-Appellant, v. THE REUBEN H. DONNELLEY CORPORATION, Defendant-Appellee.
    First District (5th Division)
    No. 1—90—2152
    Opinion filed May 3, 1991.

      Robert Orman, of Chicago, for appellant.
    Byron L. Gregory, Steven H. Hoeft, and Daniel J. Donnelly, all of McDermott, Will & Emery, of Chicago, for appellee.
   JUSTICE MURRAY

delivered the opinion of the court:

Plaintiff, J. Eck & Sons, Inc. (Eck), appeals the dismissal of its complaint against the Reuben H. Donnelley Corporation (Donnelley) in an action for damages based upon the tort of intentional interference with prospective economic advantage. The single issue on appeal is whether Eck properly pled a cause of action for intentional interference with prospective economic advantage.

Insofar as this appeal is concerned, the facts are undisputed. The appeal raises a question on the pleadings. The pertinent facts are as follows.

Eck is an Illinois corporation which, since 1969, was engaged in the home-maintenance business in Chicago’s western suburbs. Donnelley publishes directories commonly called the “Yellow Pages.” The directories list the names, addresses, telephone numbers, and in some cases the advertisements of many businesses and services, permitting an individual to quickly locate a desired business and its phone number. Donnelley published Eck’s advertisements from 1970-1979. Donnelley’s customary practice during that time had been to prorate the cost of Eck’s advertising over the entire year. Eck alleges Donnelley incorrectly published its 1979 advertisement. Eck refused to pay for the 1979 advertisement. When Eck sought to place advertisements in subsequent editions of the Yellow Pages directories, Donnelley insisted Eck either pay for the 1979 advertisement or pay in advance for the subsequent advertisements.

On October 12, 1982, Eck commenced this litigation by filing a three-count complaint charging Donnelley with an antitrust violation (count I), intentional interference with prospective economic advantage (count II), and breach of contract (count III).

After years of wandering through the Cook County legal system, through no fault of either the parties or the system, on January 2, 1990, Eck filed a second amended complaint consisting of an antitrust count (count I) and an “intentional interference” count (count II). On July 2, 1990, count I was dismissed with prejudice and is not at issue on appeal. Additionally, on July 2, 1990, the trial court granted Donnelley’s motion to dismiss Eck’s “intentional interference” claim (count II), pursuant to section 2 — 615 of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 2—615), on the ground that Eck failed “to plead facts sufficient to allege the requisite element of intent.” Subsequently, Eck filed this timely appeal.

The sole issue involved in this appeal is whether Eck’s second amended complaint pled facts sufficient to satisfy the “intent” element of the tort of intentional interference with prospective economic advantage. For the following reasons, we affirm the decision of the trial court.

To state a cause of action, a complaint must be legally sufficient, setting forth a legally recognized claim as its avenue of recovery as well as factually sufficient, pleading facts which bring the claim within the legally recognized cause of action alleged. (Borgsmiller v. Burroughs (1989), 187 Ill. App. 3d 1, 4, 542 N.E.2d 1281.) A section 2 — 615 motion to dismiss (Ill. Rev. Stat. 1985, ch. 110, par. 2—615) is an objection provided for by the Illinois Code of Civil Procedure to test the legal sufficiency of a pleading. It is the modern substitute of the old common law general demurrer. In determining whether an assailed complaint is substantially insufficient in law, the well-pleaded facts are admitted by a motion to dismiss. (Smith v. Chicago Housing Authority (1976), 36 Ill. App. 3d 967, 968-69, 344 N.E.2d 536; City of Chicago v. Loitz (1975), 61 Ill. 2d 92, 93, 329 N.E.2d 208.) Matters not well pleaded are not admitted by such a motion. Murrell v. Weitzman (1965), 58 Ill. App. 2d 278, 207 N.E.2d 745.

Eck’s amended complaint sets forth a background of Eck’s dealing with Donnelley from 1970 through 1978. Eck was previously involved in trade-name litigation with another home-maintenance company with a similar name. As a result of that litigation, the circuit court specifically ordered Eck, beginning on April 26, 1979, to include and exclude certain information in all of Eck’s future advertising copy. Donnelley was not a party to that trade-name litigation.

In 1979, Eck placed its Yellow Pages advertising for that year with Donnelley. Eck alleged that it specifically told Donnelley of the circuit court’s restrictions and that Donnelley agreed to print plaintiff’s ad in compliance with the court’s order. Donnelley allegedly incorrectly published Eck’s ad. Donnelley demanded that Eck pay, in full, for the incorrectly published advertising. Eck refused to pay the full amount demanded by Donnelley for its 1979 advertising.

Plaintiff attempted to place. Yellow Pages advertising for the year 1980. Donnelley’s practice from 1970 to 1979 had been to prorate the cost of Eck’s advertising over the entire year. However, for 1980, Donnelley demanded either full payment for the incorrect 1979 advertising or payment in advance for Eck’s 1980 advertising. Eck would not pay in full for the incorrect 1979 advertising and could not pay for the 1980 advertising in advance.

Eck further alleged that it expected to do business with potential customers in the Chicago suburbs served by the directories and that two of its former customers did not purchase Eck’s services because they could not find its advertisement in the Yellow Pages.

Specifically, Eck argues that the following paragraph and other allegations set forth in its second amended complaint, when construed favorably to the plaintiff, sufficiently allege intent:

“Defendant, Donnelley intentionally interfered with Plaintiff’s aforementioned valid business expectancy and prevented that expectancy from ripening into a valid business relationship. Specifically, defendant Donnelley prevented Plaintiff from advertising in the Yellow Pages thereby depriving Plaintiff of potential customers until Plaintiff paid in full for an incorrectly published advertisement (defendant Donnelley knew that Plaintiff had insufficient funds to pay for future advertising in advance, leaving a single alternative — paying the full price for improperly published advertising).”

If Donnelley had intentionally interfered with Eck’s business, Eck would be entitled to recover his loss, if any, even if he had to finger through Donnelley’s Yellow Pages to find a lawyer to file the suit. Yet, just filing the law suit is not enough. In Illinois one must file a complaint containing facts which, if proven, assert the cause of action.

The elements of the cause of action of intentional interference with economic advantage are: (1) plaintiff must have a reasonable expectancy of entering into a valid business relationship; (2) defendant must know about this expectancy; (3) defendant must intentionally interfere with the expectancy preventing the expectancy from ripening into a valid business relationship; and (4) defendant’s intentional interference must injure the plaintiff. (Tom Olesker’s Exciting World of Fashion, Inc. v. Dun & Bradstreet, Inc. (1973), 16 Ill. App. 3d 709, 306 N.E.2d 549, rev’d in part on other grounds (1975), 61 Ill. 2d 129, 334 N.E.2d 160.) Additionally, when the conduct of a defendant is privileged, the plaintiff is required to plead and prove that the defendant’s actions were done without justification or with actual malice. (Mannion v. Stallings & Co. (1990), 204 Ill. App. 3d 179, 186, 561 N.E.2d 1134, 1140; HPI Health Care Services, Inc. v. Mt. Vernon Hospital, Inc. (1989), 131 Ill. 2d 145, 545 N.E.2d 672.) If no privilege can be discerned, it then becomes the defendant’s burden to plead and prove justification and the plaintiff need only satisfy the minimum pleading requirement of intent. HPI Health Care Services, Inc. v. Mt. Vernon Hospital, Inc. (1989), 131 Ill. 2d 145, 156-57, 545 N.E.2d 672.

Despite the trial court’s conclusion, Eck charges that Donnelley’s conduct was neither privileged nor justified. Moreover, Eck submits that the minimal pleading standard (i.e., no need to plead and prove lack of justification) is not only satisfied by the allegations set forth in the second amended complaint but is uncontested by Donnelley. However, not only does Donnelley dispute the allegation that it acted with the requisite intent to interfere with Eck’s business relationship, Donnelley asserts that Eck is trying to confuse the separate concepts of Donnelley’s intended acts (e.g., not extending more credit), with the intent to disrupt Eck’s business. The issue in this case is not whether Donnelley’s conduct was privileged or justified, the issue in this case is Donnelley’s intent; the only allegation contained in the language set forth above. We find no factual allegation that Donnelley intended Eck be deprived of business opportunities.

Although a liberal pleading State, Illinois is a fact-pleading State. The requirement of liberal construction does “not remedy the failure of a complaint to state a case of action.” (Tru-Link Fence Co. v. The Reuben H. Donnelley Corp. (1982), 104 Ill. App. 3d 745, 754, 432 N.E.2d 1188.) Illinois pleading law permits a party to plead only ultimate facts, rather than the evidence upon which he relies (Borgsmiller v. Burroughs (1989), 187 Ill. App. 3d 1, 542 N.E.2d 1281), yet even under this liberal rule the trial court was correct in dismissing Eck’s complaint. The law in Illinois with respect to pleading “ultimate” facts rather than “conclusions of law” is not clear. The same allegation may in one context be a proper allegation of ultimate fact, while in another context, where from a pragmatic viewpoint some of the words do not give sufficient information to an opponent of the character of evidence to be introduced or of the issues to be tried, the allegation may be deemed to be an allegation of a legal conclusion. (Van Dekerkhov v. City of Herrin (1972), 51 Ill. 2d 374, 282 N.E.2d 723.) In this context Eck argues that Donnelley’s intent can be inferred from the allegations of the facts of its complaint. However, in Illinois a complaint may not rest upon conclusions of fact unsupported by allegations of specific facts from which such conclusions may be drawn. Plocher v. City of Highland (1978), 59 Ill. App. 3d 697, 375 N.E.2d 1016.

The requisite intent for the tort of intentional interference with a prospective business advantage is defendant’s knowledge of a reasonable business expectancy and defendant’s subsequent intentional interference which prevents the expectancy from ripening into a valid business relationship. (Futurevision, Inc. v. Dahl (1985), 139 Ill. App. 3d 61, 66, 487 N.E.2d 127, 131.) This cause of action is a “purposely” caused tort, and therefore, a plaintiff must set forth facts which suggest that defendant acted with the purpose of injuring plaintiff’s expectancies. (Crinkley v. Dow Jones & Co. (1978), 67 Ill. App. 3d 869, 880, 385 N.E.2d 714, 722.) While in the present case Eck alleged that Donnelley intentionally interfered with Eck’s prospective business expectancies, Eck failed to allege that Donnelley acted with the purpose of interfering with Eck’s prospective economic advantage.

The key issue in the tort of interference with a party’s prospective economic advantage is intent as disclosed by its legal definition and its elements set forth above. Taking plaintiff’s complaint as a whole as the law requires, all that Eck has alleged is that Donnelley mistakenly published an advertisement of Eck’s that caused Eck injury for which Eck refused to pay and that subsequently Donnelley refused to accept Eck’s 1980 advertisement until Eck either paid for the erroneous advertisement (1979 advertisement) or prepaid for the new advertisement. Nowhere is it alleged by specific or the ultimate facts that Donnelley knew its refusal would produce an economic harm to Eck, and additionally, that Donnelley acted despite that knowledge.

Since plaintiff’s complaint did not contain sufficient allegations of intent or even allegations from which Donnelley’s wrongful intent could be inferred, we find that the trial judge properly granted Donnelley’s motion to dismiss. Accordingly, for the reasons set forth above, we affirm the decision of the trial court.

Judgment affirmed.

LORENZ, P.J., and McNULTY, J., concur.


author: JUSTICE McNAMARA

text:
    BOCKMAN PRINTING AND SERVICES, INC., Plaintiff-Appellee, v. BALDWIN-GREGG, INC., et al., Defendants-Appellants.
    First District (6th Division)
    No. 1—89—3021
    Opinion filed May 3, 1991.

      Neuman, Williams, Anderson & Olson, of Chicago (Gregory B. Beggs and Daniel J. Krieger, of counsel), for appellants.
    Hill, Van Santen, Steadman & Simpson, of Chicago (Stephen B. Ruben, David C. Thollander and Randy Erickson, of counsel), for appellee.
   JUSTICE McNAMARA

delivered the opinion of the court:

Defendants, Baldwin-Gregg, Inc., and Baldwin Technology Corp., appeal from the trial court’s order granting summary judgment on liability in favor of plaintiff. After a bench trial as to damages only, the trial court awarded damages to plaintiff in the amount of $181,338.16. Defendants also appeal the award of damages. Plaintiff cross-appeals, alleging that the trial court applied the wrong period for damages and erred in denying its claim for outside bindery charges.

Plaintiff, Bookman Printing and Services, Inc., is a company which prints and mails advertising for its customers. In the late 1970’s and early 1980’s, Anthony and Robert Perrone, plaintiff’s executive vice-president and president, respectively, attempted to purchase a folding machine that would attach to its Didde Glaser Webb press (Didde press) and fold printed material at the same rate as the press. At the time, the Didde press printed material which was transported to another area where other machines folded it. The Perrones believed that an in-line attached folder would increase plaintiff’s production capacity, reduce cost, time and labor and result in substantial savings to its customers.

Beginning in about 1978, plaintiff attempted to purchase such an in-line folder. Custom-Bilt, a New York company, built and installed a folder in 1981, which ran only at one-third the rate of the Didde press. A subsequent attempt by Custom-Bilt to rebuild the folder also failed. In 1984, plaintiff consulted with the Vijuk Company, which, in 1985, installed an in-line folder which was also unsatisfactory.

Plaintiff contacted defendants in 1982. Defendants’ engineering manager, engineers and salesman visited plaintiff’s plant, viewed and took measurements of the Didde press. Plaintiff explained the type of folds it sought to make, and defendants’ agents assured plaintiff that they could produce and guarantee the folder.

Based upon these preliminary meetings, defendants prepared a proposal, dated July 13, 1982, which provided that defendants would design a “double chopper folder” according to plaintiff’s specifications. It further provided that: “[T]he folder, after being built, but before delivery, would be ‘tested at the [defendants’] factory prior to shipment and you will be invited to witness tests.’ ” A guarantee clause provided that if the folder did not perform the folds according to specifications, defendants would refund to plaintiff all monies paid. On a separate page, defendants indicated: “In no event shall we be liable for any contingent or consequential charges or damages.” The proposal’s “estimated delivery” was six months after defendants received the order, down payment and necessary engineering information. Defendants’ August 11, 1982, letter to plaintiff repeated the payment terms. In a letter dated August 23, 1982, Anthony Perrone accepted defendants’ offer to build the double chopper folder. His letter provided: “We also would expect all of our money back if at any time or for whatever reason the folder does not do an acceptable job,” defining “acceptable” as operating at the same speed as the Didde press. On September 8, 1982, defendants sent plaintiff a letter which stated: “[Defendants] will do everything possible to make this a successful installation, but will not be liable for any contingent or consequential charges or damages.” The trial court found that the July proposal and the two August letters comprised the contract.

Defendants thereafter stated that design work was proceeding and projected February 1983 as the completion date and April 1983 as the shipping date. The folder, however, was not delivered in April 1983. Defendants’ July 6, 1983, letter assured plaintiff that defendants could make the folder and promised delivery by September 1, 1983. In September 1983, defendants telephoned plaintiff, asking what color to make the folder.

In October 1983, the Perrones viewed a demonstration of the then-existing folder at defendants’ place of business. The folder failed to operate at a high enough speed and failed to meet the fold accuracy requirements. Plaintiff informed defendants that the folder was not acceptable.

On December 15, 1983, defendants advised plaintiff that they had been unsuccessful in constructing a folder to meet plaintiff’s requirements and had “exhausted all technical approaches known to [them],” spending more than $70,000 in their efforts. Defendants also issued a check to return plaintiff’s down payment.

Plaintiff filed suit against defendants on May 16, 1984. The complaint, as amended, consisted of six counts: wrongful repudiation of the agreement; breach of the agreement; faüure to act in good faith; improper attempt to limit consequential damages; breach of implied warranties of merchantability; and breach of fitness for a particular purpose.

After a hearing on the parties’ cross-motions for summary judgment, the trial court granted summary judgment in favor of plaintiff on the issue of liability. Subsequently, a trial proceeded solely on the issue of damages.

At the trial on damages, plaintiff sought recovery for cover under section 2 — 711 of the Uniform Commercial Code (UCC) (Ill. Rev. Stat. 1989, ch. 26, par. 2 — 711) for the purchase of two Baum folders and a Vijuk folder. Plaintiff also sought consequential and incidental damages under section 2 — 715 of the UCC, consisting of outside folding costs, payroll overtime charges, and the cost of an extra employee. Finally, plaintiff sought recovery of its down payment.

The trial judge determined that the applicable period of damages was February 1983 through December 1983, and awarded the following damages: (1) $34,000 for the two Baum folders; (2) $56,275 for the Vijuk folder; (3) $67,485.66 for overtime; (4) $8,640 for an additional employee; and (5) $14,937.50 for return of plaintiff’s down payment.

PLAINTIFF’S DAMAGES

We summarize below the most relevant evidence adduced at the damages trial.

Anthony Perrone and William Marshall each testified that plaintiff’s equipment folded off-line at a cost of $3 per thousand and that the double chopper folder would reduce the cost and enable plaintiff to charge customers $1 per thousand for folding. According to Perrone, plaintiff instructed its sales staff to use this as a price advantage and commit itself based upon this rate for work coming in as of February 1983.

Anthony Perrone estimated that plaintiff’s business increased by 300% during this period. Marshall testified that business began to increase in February 1983, but he did not know the dollar volume. Although no records existed to document this increase, his conclusion was “based upon [his] knowledge of being in there and fighting the battle.” He said that things became more manageable and began to return to normal in March 1985.

Morris Elstein, plaintiff’s vice-president of sales, testified that he and his sales staff started making quotes to customers based upon the new rate soon after the parties contracted for in-line equipment. He explained that many of plaintiff’s contracts with customers were entered “prior to the actual job coming into the plant.” According to Elstein, the price quoted for a job was based upon many variables besides folding. Although plaintiff realized that the folder would not be delivered toward the end of 1983, it honored its existing contracts even at the lower folding rate. When possible, plaintiff adjusted the price in order to maintain profitability, minimize loss and keep both printing and mailing aspects in-house. Although plaintiff’s long-term contracts allowed for price adjustments, Elstein could not estimate the percentage of such contracts during the damages period because “the answer is all over the board.”

In order to alleviate the overload and meet its contractual obligations, plaintiff sent work to outside binderies; purchased three off-line folders; incurred overtime charges in its in-house bindery; and hired an employee to carry printed stock from the Didde press to plaintiff’s off-line folders and then to the warehouse.

The following evidence was adduced at trial with respect to the alleged elements of damages.

1. VIJUK FOLDER

William Marshall, plaintiff’s production manager, testified that plaintiff purchased the Vijuk folder in the latter part of 1984 for “around $55 or 57 thousand.” Anthony Perrone testified that plaintiff pm-chased the Vijuk folder in March 1985. According to Marshall, the Vijuk folder was capable of making the same folds as the double chopper folder, in addition to a variety of other folds. He stated:

“[Tjhere is a multitude of folds that it could make. *** It would fold the four-page signatures. It would fold 16-page signatures, books. It would fold letter size folds for No. 10. It would fold 5V2, SVb. It would fold to 9 x 12’s. It would fold to just whatever you can figure.”

Anthony Perrone also testified that the work done on the Vijuk folder was interchangeable with that done on the Baum folder. He agreed that there were times when plaintiff ran jobs from a press other than Didde press on the Vijuk folder. No bill of sale, receipt or other documentary evidence was introduced by plaintiff regarding the purchase of the Vijuk folder.

2. TWO BAUM FOLDERS

Marshall testified that plaintiff purchased two used Baum folders in 1984 for $13,500 and he “believed” $15,000, respectively, in order “to get a handle on the overload” in the shop. The Baum folder was capable of making the same folds that the double chopper folder would have made. In addition, the Baum folders could be adjusted to make a variety of different types of folds.

Anthony Perrone testified that plaintiff used the Baum folders “basically *** to fold material that came off Didde Glaser,” although he agreed that they probably folded work from other presses.

Plaintiff introduced no documentary evidence for its purchase of the Baum folders.

3. IN-HOUSE BINDERY OVERTIME

Eugene Schoefemacher, plaintiff’s personnel manager, compiled the exhibit which demonstrates the bindery department’s payroll for hourly employees from September 1982 through October 1985. He does not, however, participate in the bindery operations and deals only with the payroll records.

Marshall, who was responsible for approving overtime, testified that employees from the bindery department are not shifted to other divisions of the plant and that bindery overtime does not reflect any work done on the presses. He also stated that the bindery department in early 1982 contained a variety of different types of equipment including four folders, two cutters and stitching and padding equipment. In early 1982 plaintiff owned six presses, including the Didde press. Plaintiff’s bindery work came from all of its presses and some of the overtime work in plaintiff’s bindery came off presses other than the Didde press. He could not distinguish from the overtime records between overtime for stock printed on the Didde press and overtime for stock printed on other presses.

4. OUTSIDE BINDERY CHARGES

Marshall testified that in January 1983 “the volume” was 10 million finished pieces. In February 1983, plaintiff began to have trouble meeting delivery dates and by March 1983, “it got out of hand.” This increase in volume, which, according to Marshall, resulted from the absence of the promised folder, forced plaintiff to hire outside binderies to assist. Plaintiff regularly relied upon outside binderies to do work that plaintiff’s in-house bindery could not perform, such as perfect bind, special bind and water seal. When Marshall hired outside binderies during this time, he instructed them to do all the work to completion, which may have included “a multitude of things,” such as folding, stitching, gluing, scoring and cutting. Because plaintiff was “overloaded” and “scrambling to meet delivery dates,” it was cheaper to permit outside trade binderies to do all the work. Marshall estimated that 80% of this outside bindery work was for folding. He initially stated that plaintiff could have done this work in-house for 80% of the outside binderies’ charges, but later changed this estimate to 50%.

Plaintiff introduced three exhibits purporting to document outside bindery charges for 1983 through 1985 which resulted from defendant’s failure to produce the double chopper folder. These exhibits comprised invoices sent from outside binderies to plaintiff, and did not apportion the cost between folding and nonfolding services. The court found the exhibits “hopeless” and suggested that plaintiff redo them. Plaintiff amended the exhibits to apportion an amount to folding, relying on Marshall, who estimated the approximate folding cost on each invoice based upon his personal knowledge. His calculation was sometimes based upon his memory that the customer typically requested only a particular type of service or the outside bindery handled only a particular type of printing. When Marshall could not recall the job on the invoice, he allocated 82% of the cost to the folding, referring to this percentage as a “trade custom.” Marshall then multiplied the total folding cost by two-thirds, which represents the difference between what the outside binderies charged and the one dollar it would have cost plaintiff to fold in-house with the double chopper folder. Marshall testified that because outside binderies charged at least $3 per thousand for folding and the double chopper folder would have done the folding for $1 per thousand, plaintiff lost $2 per thousand on the work it sent outside its plant.

Marshall admitted that many of the invoices did not indicate whether folding was done or whether the paper size was one that the double chopper folder could have handled. He stated that many of the jobs could not have been folded on the double chopper folder either because of the sheet size or the need for die cuts or pocket configurations. He also testified that the invoices did not indicate what other services were rendered to plaintiff by the outside binderies.

5. ADDITIONAL EMPLOYEE

Marshall testified that plaintiff hired a material handler to carry printed stock from the Didde press to the bindery’s in-line folders and then from the bindery to the warehouse. He stated that this employee worked in the bindery 40 hours per week throughout all of 1983 and 1984, earning $4.50 per hour. Plaintiff requested damages for this additional employee for the period from February 1983 through December 1984. Plaintiff did not introduce into evidence payroll records or time cards for the employee.

Defendants contend on appeal that the trial court improperly granted summary judgment because there were genuine, material issues of fact under each count of plaintiff’s third amended complaint; that the trial court erred in denying defendants’ cross-motion for summary judgment; and that plaintiff’s damage claims were too speculative and, therefore, should have been denied by the trial court.

Plaintiff filed a cross-appeal, alleging that the trial court erred in limiting the damages period to December 31, 1983, and denying its damages for outside bindery charges.

Because we agree with defendants that plaintiff did not prove its damages, we deem it unnecessary to consider defendants argument that the trial court erred in awarding summary judgment to plaintiff.

Initially, we note that a reviewing court will not disturb a trial court’s findings as to damages unless its measure of damages was erroneous as a matter of law or the trial court ignored the evidence. (Schatz v. Abbott Laboratories, Inc. (1972), 51 Ill. 2d 143, 281 N.E.2d 323; Beaton & Associates, Ltd. v. Joslyn Manufacturing & Supply Co. (1987), 159 Ill. App. 3d 834, 512 N.E.2d 1286.) A party seeking to recover damages in a breach of contract action must establish that he sustained damages and must provide a reasonable basis for computing those damages. (Kohlmeier v. Shelter Insurance Co. (1988), 170 Ill. App. 3d 643, 525 N.E.2d 94; Brewer v. Custom Builders Corp. (1976), 42 Ill. App. 3d 668, 356 N.E.2d 565.) We conclude that plaintiff here suffered no actual damages as a result of defendant’s breach, and even assuming that plaintiff did sustain damages, it failed to provide a reasonable basis for the computation of those damages.

I. DAMAGES FOR COVER: THE TWO BAUM FOLDERS AND THE VIJUK FOLDER

The testimony of plaintiff’s agents established that its business volume increased when it began to offer reduced folding costs to its customers after entering the contract with defendants. Plaintiff alleges that defendants’ failure to build the double chopper folder as proposed and the greater workload required plaintiff to purchase the three off-line folders which it claimed as damages. We disagree. In our view, defendants’ breach did not harm plaintiff. Rather, plaintiff initiated a successful sales promotion and purchased the folders in order to handle the resultant influx in business volume. We do not believe that plaintiff thereby suffered. The record indicates that these folders could make a “multitude of folds,” and adequately handled the folding jobs coming off the Didde and other presses. Their usefulness and adaptability to plaintiff’s operations, which were 90% to 95% letter printing and folding, is apparent. In fact, plaintiff already owned several similar Baum folders. Further, the record does not indicate that the three in-line folders were discarded, unusable or unnecessary subsequent to the damages period. Given plaintiff’s evidence that letter printing and folding constituted the bulk of its business, we cannot conclude that the purchase of off-line folders injured plaintiff.

Even assuming plaintiff suffered an injury, we do not believe that its purchase of the folders under these facts was reasonable cover under the Uniform Commercial Code. Section 2 — 712 authorizes a buyer to effect cover by “making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller.” (Emphasis added.) (Ill. Rev. Stat. 1989, ch. 26, par. 2—712.) The three in-line folders were not, in our opinion, a substitute for the double chopper folder under the concept of cover. (See Draper v. Minneapolis-Moline, Inc. (1968), 100 Ill. App. 2d 324, 241 N.E.2d 342.) Plaintiff contracted with defendants to design and deliver a specially manufactured in-line folder to operate •with its Didde press at a specified rate and accuracy. The advantage of such an in-line folder was its ability to fold at the same rate as the Didde press. Despite defendants’ substantial efforts and $70,000 expenditure, the machine failed. The three off-line folders plaintiff subsequently purchased did not attach in-line to the Didde press, did not operate at a similar speed, and did not give plaintiff a manufacturing cost advantage. In fact, plaintiff already owned two similar Baum folders prior to 1983. Under these facts, plaintiff’s purchase was not a reasonable substitute or replacement for the proposed double chopper folder.

Further, the facts do not suggest that plaintiff’s purchase of the folders occurred “without unreasonable delay,” as required by the Code. Although the trial court found that defendants breached in December 1983, Marshall testified that plaintiff purchased the Vijuk folder in the latter part of 1984 while Anthony Perrone testified that it was purchased in March 1985. The Baum folders were purchased “sometime in 1984.” Given that plaintiff viewed a failed test of the then-existing folder in October 1983, and was informed in December 1983 that defendants were terminating their efforts to build, we cannot say that plaintiff purchased the folders without unreasonable delay under the statute. (Cf. Lyntel Products v. Alean Aluminum Corp. (1981), 107 Ill. App. 3d 176, 437 N.E.2d 653 (plaintiff “immediately” proceeded to find substitute upon realization that defendant could not meet its obligation).) Thus, even assuming plaintiff suffered injury, these purchases were not reasonable cover under the statute. The trial court incorrectly awarded damages to plaintiff for the purchase of the three folders.

II. CONSEQUENTIAL AND INCIDENTAL DAMAGES

The trial court also awarded plaintiff overtime charges and the cost of an additional employee, without specifying whether they were incidental or consequential damages. Section 2 — 715 of the UCC provides:

“§2 — 715. Buyer’s Incidental and Consequential Damages. (1) Incidental damages resulting from the seller’s breach include *** any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or other breach.
(2) Consequential damages resulting from the seller’s breach include (a) any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise ***.” Ill. Rev. Stat. 1989, ch. 26, par. 2—715.

A central question in awarding consequential damages is whether defendant “ha[d] reason to know” either the “general or particular requirements” and needs of plaintiff when the contract was entered into. This court in Adams v. J.I. Case Co. (1970), 125 Ill. App. 3d 388, 406, 261 N.E.2d 1, 9, warned against adhering strictly to the Code’s meaning, stating: “Rather, each case is to be considered on its merits, touching upon the issue of special circumstances arising in that particular case.” We believe that defendants under the circumstances had no reason to believe that plaintiff would make quotes and enter contracts based upon defendants’ promise to design and build a double chopper folder by February 1983. Two companies had attempted and failed to produce such an in-line folder to meet plaintiff’s specifications. Reasonable skepticism based upon past experience and good business practice would require plaintiff to wait until some initial indicia of success was demonstrated. Indeed, the agreement required defendants to test the folder in plaintiff’s presence before delivery. The record does not indicate that defendants knew or could reasonably expect plaintiff to enter into contracts months prior to the anticipated delivery date. Nor do we believe that plaintiff’s course of action was “commercially reasonable” under section 2 — 715(1).

Moreover, a nonbreaching party to a contract is generally only entitled to damages which “arise naturally from the breach itself, or such as may reasonably be supposed to have been within the contemplation of the parties at the time of making the contract as a probable result of a breach thereof.” (Sitnick v. Glazer (1956), 11 Ill. App. 2d at 467-68, 138 N.E.2d 84, 88; 25 C.J.S. Damages §24 (1966).) As indicated in the previous section, we cannot conclude that plaintiff’s alleged damages arose naturally or flowed directly from the breach. Nor can we say that the parties.contemplated such damages as a possible result of the breach. Indeed, plaintiff’s acceptance letter of August 1982 stated: “We would also expect all of our money back if at any time or for whatever reason the folder does not do an acceptable job.” Further, defendants’ September 8, 1982, letter indicated that they waived responsibility for incidental or consequential damages. Although the trial court found that defendants’ letter did not constitute part of the parties’ agreement, the evidence suggests that plaintiff did not contemplate damages if defendants failed to produce the folder, but instead required only a return of its down payment. Alleged damages resulting from plaintiff’s aggressive sales promotion were obviously not contemplated by either party at the time of contracting. We therefore conclude that the overtime and extra employee costs, whether consequential or incidental damages, did not flow from defendants’ breach nor were they contemplated by the parties at the time of contracting.

Moreover, even if plaintiff in its need for overtime work was actually damaged by defendants’ breach, plaintiff failed to prove the amount with reasonable certainty. Although the UCC does not require plaintiff to prove consequential damages with “mathematical precision” (Cates v. Morgan Portable Building Corp. (7th Cir. 1979), 591 F.2d 17, 21), basic contract theory requires that damages must be proved with reasonable certainty and precludes damages based on conjecture and speculation. (Kohlmeier v. Shelter Insurance Co., 170 Ill. App. 3d 643, 525 N.E.2d 94.) The evidence shows that plaintiff folded material from each of its six presses in its bindery department. The evidence also indicates that plaintiff’s bindery housed more than folding equipment, namely cutting, padding, handstitching, gluing and collating equipment. Neither the exhibits nor the testimony demonstrates the amount of the overtime attributable to work from the Didde press or apportions overtime work between the bindery’s various functions. The evidence does not form a sufficient basis upon which damages can be calculated.

Plaintiff also failed to establish a sufficient causal connection between defendants’ breach and plaintiff’s cost for an additional employee. Plaintiff hired this employee to carry printed materials from the Didde press to the folding area and then to the warehouse. Although an optimally operable double chopper folder attached to the Didde press would have precluded the need for such employee, we cannot conclude that this expenditure by plaintiff was the direct, immediate and probable result of defendants’ breach.

Nor can we conclude that plaintiff proved this alleged element of damage with reasonable certainty. The evidence demonstrates that this person not only carried materials from the Didde press to the bindery, but also brought finished products .to the warehouse. The evidence does not indicate that all of the products handled by the employee could have been folded on the proposed double chopper folder. Nor does it apportion the employee’s time between that required to move materials to the bindery and that required to move materials to the warehouse.

Plaintiff argues, relying upon sections 2—715 and 1—106 of the UCC (Ill. Rev. Stat. 1989, ch. 26; pars. 1 —106, 2—715), that its proof of damages was “reasonable under the circumstances” and thus permissible under the UCC. The UCC,. however, does not vitiate the rule that damages be proved with reasonable certainty, which we do not here perceive. Nor do we accept plaintiffs suggestion that defendants’ breach made exact calculations difficult. The trial court erred in awarding plaintiff damages for in-house bindery overtime and for an extra employee.

III. PLAINTIFF'S CROSS-APPEAL

Plaintiff on cross-appeal claims that the trial court erred in denying its claim for outside bindery charges and in limiting the damages period to December 1983. In view of our above findings, it is unnecessary to consider plaintiff’s argument as to the damages period.

As to outside bindery charges, plaintiff admits that it sent jobs to outside binderies during this period that could not have been done on the double chopper folder. Plaintiff argues, however, that defendants’ failure to deliver the folder resulted in an overload situation which required it to send out all types of work in order to meet its deadlines. Plaintiff maintains that its inability to specifically identify work sent out as that which the double chopper folder could have done is not fatal to its claim.

We disagree and conclude that plaintiff failed to establish these charges as actual damages and failed to prove their amount with reasonable certainty. As stated above, plaintiff actively pursued a marketing strategy to increase its business based upon its anticipated ability to reduce its folding charges to its customers. Plaintiff’s increased volume and resort to outside binderies for assistance in meeting its overload, although related to the advent of the folder, did not result from defendants’ breach. Thus, plaintiff suffered no actual damage.

Moreover, plaintiff’s attempt to calculate damages for outside binderies was speculative. In denying these damages, the trial court found:

“[T]he evidence of outside bindery charges for folding is not, in the Court’s opinion, credible in any respect. The jumble of figures, the exhibits offered, amended, and in some cases withdrawn, *** leave the Court with no alternative but to find zero damages for the plaintiff. Hundreds of pages were taken up with seemingly endless questions only to demonstrate to this Court that in this category plaintiff has not met its burden of proof.”

We agree with the trial court’s characterization of the evidence. Plaintiff simply failed to sufficiently link its outside binding costs to defendants’ breach. In short, plaintiff’s proof created little more than a speculative inference of the extent of its alleged injury. Hoefferle Truck Sales, Inc. v. Divco-Wayne Corp. (7th Cir. 1975), 523 F.2d 543.

Finally, we uphold the trial court’s award of $14,937.50 to plaintiff for the return of its down payment. The parties’ understanding at the time of contracting requires this and apparently defendants do not dispute that they owe plaintiff this money.

Accordingly, we affirm that portion of the order of the circuit court of Cook County awarding plaintiff $14,937.50 for the return of its down payment. We reverse all other portions of the order which awarded damages to plaintiff.

Judgment affirmed in part and reversed in part.

EGAN and LaPORTA, JJ., concur.


author: JUSTICE EGAN

text:
    WALTON FITZPATRICK, Plaintiff-Appellant, v. PERRY DRUGS COMPANY, Defendant-Appellee (Irving Graifman, Inc., et al., Intervening Petitioners-Appellees).
    First District (6th Division)
    No. 1—90—0370
    Opinion filed May 3, 1991.

      Frank & Melamed, Ltd., of Chicago (Michael J. Evans, of counsel), for appellant.
    Cole, Grasso, Fencl & Skinner, Ltd., of Chicago (Glenn F. Fencl and Joseph F. Spitzzeri, of counsel), for appellee.
   JUSTICE EGAN

delivered the opinion of the court:

The plaintiff, Walton Fitzpatrick, filed a complaint under the Structural Work Act (Ill. Rev. Stat. 1983, ch. 48, par. 60 et seq.) (the Act) for personal injuries against the owner of the work site, the defendant, Perry Drugs Company (Perry). The trial judge granted the defendant’s motion for summary judgment on the ground that the record showed, as a matter of law, that the defendant was not in charge of the work as required by section 9 of the Act. Ill. Rev. Stat. 1983, ch. 48, par. 69.

Perry owned a building at 95th and Damen in Chicago that was to be remodeled into one of its retail drugstores. Perry's architects in Detroit prepared the plans for the job. Perry hired Frank Alschuler (Alschuler) to coordinate the work. Alschuler then hired Irving Graifman (Graifman) as a carpentry contractor and to do “some demolition work.” The plaintiff was an employee of Graifman.

Alschuler’s job was to take bids from subcontractors, issue contracts, pay the contractors, schedule the work and observe the construction progress. However, because Graifman had worked with Perry and Alschuler in the past, no bids other than Graifman’s were considered for the carpentry work. Graifman was familiar -with the Perry “layout” and knew how to assemble Perry’s equipment. Perry preferred to use Graifman for carpentry work. All other contracts were reviewed and signed by Alschuler with one exception. Perry itself signed a contract with one of the subcontractors. When Alschuler signed the contracts, however, it was on behalf of Perry. He testified that he “recommended” acceptance of the contractors to Perry and that Perry never refused to follow his recommendation. When lien waivers were submitted to Alschuler by the subcontractors, he would give them to Perry. Perry had the authority to issue change orders and to stop the work.

James Fowler was an assistant vice-president and the senior project manager for Perry. It was his responsibility to act upon leases, develop budgeting, obtain construction documents through architects and generally oversee development of a store before its opening. Glenn Reimer was the construction coordinator for Perry and Fowler’s assistant. Both Fowler and Reimer went to the building on a number of occasions to inspect the work and to assure a timely completion. There was a dispute, however, as to the exact number of times Fowler and Reimer were at the work site. Fowler said Reimer was there on a weekly basis and gave reports on the progress each week. The plaintiff testified that there were people from Perry present every day. Alschuler said he averaged approximately two visits a week. The plaintiff also testified that if his boss was not present and someone from Perry told him what to do, he had to do it.

There were no written safety rules for the job, and safety meetings were not held. Perry provided no equipment to the subcontractors. Fowler testified that any serious safety problems he would have observed would have been discussed with Graifman on the site and reported to Alschuler. On some occasions Fowler or Reimer went directly to Graifman to explain what they wanted.

On December 1, 1983, the plaintiff was standing on a ladder and pulling duct work down from the ceiling. Another worker was helping him by holding the duct work as it was lowered to the floor. That other worker was called away, and he released the duct work which struck the plaintiff, knocking him off the ladder. As a result, the plaintiff fractured his back.

The plaintiff contends that the judge erred in granting summary judgment; he argues that the record does not show, as a matter of law, that the defendant was not in charge of the work. We agree.

The issue of who has charge of the work is generally a fact question for the jury. (Winter v. Davis (1980), 85 Ill. App. 3d 912, 407 N.E.2d 696.) Whether a defendant is in charge of the work depends on a totality of the circumstances. (Ilic v. Henry Crown & Co. (1981), 97 Ill. App. 3d 231, 422 N.E.2d 892.) Mere ownership of property does not trigger liability. (Norton v. Wilbur Waggoner Equipment Rental & Excavating Co. (1979), 76 Ill. 2d 481, 394 N.E.2d 403.) On the other hand, an owner who retains control cannot insulate himself from liability simply by retaining a general contractor. (Lyle v. Sester (1981), 103 Ill. App. 3d 208, 430 N.E.2d 699.) One or more parties may be in charge of the work and be subject to liability under the Act for the same injury. (Emberton v. State Farm Mutual Automobile Insurance Co. (1978), 71 Ill. 2d 111, 373 N.E.2d 1348.) Whether an owner had charge is determined not only from his contractual obligations, but also from the surrounding circumstances and from the role the owner, in fact, assumed. Winter v. Davis (1980), 85 Ill. App. 3d 912, 407 N.E.2d 696.

The factors to consider whether an owner of property is in charge include, but are not limited to, whether the owner: (1) supervised and controlled the work; (2) retained the right to supervise and control the work; (3) constantly participated in the ongoing activities at the construction site; (4) supervised and coordinated the subcontractors; (5) took responsibility for safety precautions at the jobsite; (6) had authority to issue change orders; (7) had the right to stop the work; (8) owned the equipment at the work site; (9) was familiar with construction customs and practices; and (10) was in a position to insure worker safety or alleviate equipment deficiencies or improper work habits. Egizio v. Majetich (1988), 172 Ill. App. 3d 758, 527 N.E.2d 13.

The defendant has cited five cases in support of its position, and we will discuss them in order. The first two are Egizio v. Majetich (1988), 172 Ill. App. 3d 758, 527 N.E.2d 13, and Lyle v. Sester (1981), 103 Ill. App. 3d 208, 430 N.E.2d 699. Neither of those cases is persuasive. Both cases involved home owner defendants. In Lyle, the court emphasized the contrast between the lack of knowledge concerning the construction work and the knowledge of the plaintiff. The court said that the defendant, “due to his lack of expertise or extensive experience in construction matters, was not in a position to assure worker safety or prevent or alleviate either equipment delicienties or improper work habits.” (103 Ill. App. 3d at 219.) The court concluded that to impose liability on the defendant under the circumstances would be to place an unreasonable burden on all home owners who contract for improvements on their homes. (103 Ill. App. 3d at 219.) In Egizio, the plaintiff acknowledged that he was more knowledgeable than the defendant homeowner. The defendant actually did work at the direction of the plaintiff. The court emphasized that “there is no evidence that the defendants were familiar with construction customs or practices, or that they had any special knowledge about jobsite safety.” (172 Ill. App. 3d at 762.) Unlike Lyle and Egizio, the defendant’s employees in this case were familiar with construction customs and practices and, it is fairly inferable, had special knowledge about jobsite safety.

The next two cases cited by the defendant upheld findings that the defendants were in charge of the work: Simmons v. Union Electric Co. (1984), 104 Ill. 2d 444, 473 N.E.2d 946, and Johnson v. Commonwealth Edison Co. (1985), 133 Ill. App. 3d 472, 478 N.E.2d 1057. The defendant compares the facts of those cases with the facts of this case and argues that the facts of this case are much weaker than the facts of those cases. We are not convinced that the facts of this case are weaker than those of Simmons, but, even if they were, any factual disparity between those cases and this case would be irrelevant. The issue in this case is not whether the plaintiff could have had a stronger case; the issue is whether it was strong enough.

The last case cited by the defendant is Marine Bank v. Archer Daniels Midland (1987), 156 Ill. App. 3d 576, 509 N.E.2d 163, which did involve a corporate landowner. The appellate court affirmed summary judgment for the owner on three separate grounds, one of which was the failure of the plaintiff to raise a fact question of whether the owner was in charge of the work. There are three distinctions between the facts of Marine Bank and the facts of this case. In Marine Bank, the owner’s right to stop the work was limited; it could order work on one project to stop so that work on another could begin. In addition, there was no right to issue change orders. The defendant’s plant engineer testified that if he desired changes in the work to be made, he informed the plaintiff’s employer of the fact “because he did not have authority to direct [the plaintiff or his co-employees].” (156 Ill. App. 3d at 579.) Most important, there was no evidence of the owner’s “familiarity with the construction customs and practices.” 156 Ill. App. 3d at 579.

The plaintiff has cited two supreme court cases we judge to be strong authority for his position. In Norton v. Wilbur Waggoner Equipment Rental & Excavating Co. (1979), 76 Ill. 2d 481, 394 N.E.2d 403, the defendant school district hired a “Clerk of the Works for the construction” involved. His duties were to record the progress of the construction, inspect the construction, serve as liaison between the architect and general contractor, and take “a head count” of the workers. He was expected “to keep the contractor honest” by making certain all specifications were met. He had an office at the site but no staff; he was there five days a week but not for the whole day, and had weekly meetings with the architect, contractor and subcontractors but safety was never discussed. He was an experienced contractor himself and was familiar with the bar joists at the site and had been on the bar joist on which the plaintiff was injured. No safety superintendent was appointed, and no safety meetings or discussions were ever held. Any changes the clerk felt necessary had to be reported to the architect in order to effect them. The school board could terminate its contract with the contractor although it had to-provide 10 days’ notice to the contractor.

The supreme court rejected the school board’s claim that the evidence did not support a finding that the board was in charge of the work. The court pointed out that the board could terminate the contract, even subject to a 10-day notice limitation and could order changes, and that the clerk was generally familiar with construction methods.

In Emberton v. State Farm Mutual Automobile Insurance Co. (1978), 71 Ill. 2d 111, 373 N.E.2d 1348, the defendant owner maintained a building design and construction department which was responsible for the design and construction of all company-owned buildings throughout the United States and Canada. It did preliminary layout work for the construction of the building in question. A contract was entered into with an architect and a general contractor. All subcontracts were handled by the general contractor. Inspections were made by various employees of the owner. The owner’s assistant vice-president for building design and construction went to the site approximately twice a week and remained there for periods of time which “varied from an hour to all day.” A number of change orders were issued at the direction of the owner. At various times the owner directed the architect to issue a stop-work order. The appellate court reversed a judgment for the plaintiff, and the supreme court reversed the appellate court, holding that the evidence was sufficient to establish that the owner was in charge of the work.

The same three principal factors present in Norton and Emberton are present here: the power to stop the work, the power to make change orders, and the presence on the jobsite of an employee of the owner who was experienced in building construction. In oral argument, the defendant’s attorney said that the sole issue was whether the defendant was in a position to assure worker safety or alleviate equipment deficiencies or improper work habits. We agree, and we conclude that a factual question exists as to whether Perry was in a position to assure worker safety or alleviate equipment deficiencies or improper work habits. That being so, we judge that summary judgment was improperly granted.

Although not necessary to our decision and although the plaintiff has not expressly argued the point, we observe that the record establishes some doubt that Alschuler was an independent contractor. He “recommended” which subcontractor should be hired, and whatever contracts he signed, he did so on behalf of Perry.

For these reasons, the judgment of the circuit court is reversed and the cause is remanded for further proceedings consistent with this opinion.

Judgment reversed and remanded.

McNAMARA and LaPORTA, JJ., concur.


author: PRESIDING JUSTICE RAKOWSKI

text:
      In re APPLICATION OF THE COUNTY TREASURER AND EX OFFICIO COUNTY COLLECTOR OF COOK COUNTY, ILLINOIS, FOR ORDER OF JUDGMENT AND SALE OF LANDS AND LOTS UPON WHICH ALL OR PART OF THE GENERAL TAXES FOR FIVE OR MORE YEARS ARE DELINQUENT PURSUANT TO SECTION 235A OF THE REVENUE ACT OF 1939, AS AMENDED (The City of Chicago, Petitioner-Appellee, v. Jesse L. Johnson, Jr., as Trustee, Respondent-Appellant).
    First District (6th Division)
    No. 1—90—1479
    Opinion filed May 3, 1991.

      Rodney C. Slutzky, of Chicago (Claudia M. Graham, of counsel), for appellant.
    Kelly R. Welsh, Corporation Counsel, of Chicago (Lawrence Rosenthal and Jean Dobrer, Assistant Corporation Counsel, of counsel), for appellee.
   PRESIDING JUSTICE RAKOWSKI

delivered the opinion of the court:

This appeal involves a trial court order which directed the Cook County clerk to issue tax deeds for two vacant lots purchased at the 1987 scavenger sale. At issue is the timeliness of certified mail notices to the owner of the lots.

Section 263 of the Revenue Act of 1939 as amended (Act) provides in part:

“A purchaser or assignee shall not be entitled to a tax deed to the premises sold unless not less than 3 months nor more than 5 months prior to the expiration of the period of redemption he gives notice of the sale and the date of expiration of the period of redemption to the owners, occupants and parties interested in the premises as hereafter provided.
* * *
The purchaser or assignee shall give the above notice by causing it to be served by a sheriff *** of the county in which the the real property, or any part thereof, is located ***.
* * *
If any owner or party interested upon diligent inquiry and effort cannot be found and served with notice as herein provided in the county, then the person making the service shall send a copy of the notice by registered or certified mail, return receipt requested, to such party at his residence, if ascertainable ***.
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In addition to the notice required to be served not less than 3 months nor more than 5 months prior to the expiration of the period of redemption, such purchaser or assignee shall prepare and deliver to the clerk of the Circuit Court of the county in which the real estate sold is located, the notice provided for herein together with sufficient funds to effect mailing of the notice by certified mail, return receipt requested.” Ill. Rev. Stat. 1989, ch. 120, par. 744.

Prior to 1987, respondent, Jesse J. Johnson, Jr., was the sole beneficial interest holder of a trust that held legal title to two vacant lots at 1737 and 1741 West Quincy, Chicago, Illinois. The County of Cook purchased these lots at the 1987 scavenger sale and assigned the certificates of purchase to the City of Chicago (City), which petitioned the circuit court for tax deeds on October 3, 1988. The parties agree that the period of redemption expired on February 18, 1989, and as a result, the two-month window in which service was to be effectuated upon the owner was from September 28, 1988, to November 28, 1988.

Pursuant to section 263, the City published within the two-month window and placed the required notices to owner with the Cook County sheriff (Sheriff) on November 14, 1988, and with the clerk of the circuit court of Cook County (Clerk) on November 22, 1988. The notice given to the Clerk was mailed to Johnson by certified mail on November 30, 1988. After unsuccessful attempts to serve Johnson were made on the 25th, 26th, and 27th of November 1988, the Sheriff mailed the notice to Johnson on December 28, 1988. In sum, while the notices were placed with the Sheriff and Clerk, and attempts were made to serve Johnson all within the two-month window, the notices were mailed to Johnson outside of the window.

On March 20, 1989, the City applied to the circuit court for orders directing the Clerk to issue tax deeds to the lots. Following a hearing, the application was granted, and on April 30, 1990, after denying a motion for rehearing, the trial court entered a final order from which respondent appeals.

The sole issue is whether sections 263 and 266 of the Act (Ill. Rev. Stat. 1989, ch. 120, pars. 744, 747) require that notices to the owners of property purchased at a tax sale be mailed not less than three months nor more than five months prior to the expiration of the period of redemption. This appears to be a question of first impression.

Initially, we note that those portions of section 263 which require service by the Sheriff and registered or certified mailing of notice to the owner in the event that he cannot be found and served were added in 1976. (Pub. Act 79-1455, eff. Sept. 30, 1976.) Prior to this, the purchaser or assignee was to effectuate service on the owner, and in the event he could not be found, the purchaser or assignee was to publish and further deliver a copy of notice to the city clerk. There was no provision in the old act for the eventuality of the owner not being served; it only provided for a situation wherein the owner could not be found. As a result, the old act did not require that a notice be mailed to the owner at his residence.

The parties agree that service upon the owner (where possible), publication (where service is not possible), and delivery of notices to both the Sheriff and Clerk must all be accomplished within the two-month window. Where they disagree, and what is at issue, is whether these notices to the owner must also be mailed within that same time period.

While section 263 requires that “the clerk shall promptly mail the notices delivered to him by certified mail, return receipt requested” (Ill. Rev. Stat. 1989, ch. 120, par. 744), it does not specify whether this mailing shall be within the two-month window. With respect to the Sheriff’s registered or certified mailing of notice to the owner, section 263 is completely silent as to when the mailing shall take place.

The City argues that the Act does not require the Sheriff to mail the notice within the two-month window, but merely states that if the owner cannot be served “then the person making the service shall send a copy of the notice by registered or certified mail, return receipt requested, to such party at his residence, if ascertainable,” quoting section 263 (Ill. Rev. Stat. 1989, ch. 120, par. 744). The City reasons that because the legislature used the word “then,” it intended that the Sheriff could use the entire two-month window to effectuate service and only if this failed was it then required to mail the notice.

“When construing a statute, a court should attempt to ascertain the legislative intent and render it effective. [Citations.] To determine legislative intent, we must look to the plain meaning of the statute [citations], and construe the terms of the statute in the context in which they appear.” (People v. Dinger (1990), 136 Ill. 2d 248, 257, 554 N.E.2d 1376.) Further, “[w]here the terms of a statute are not defined by the legislature, courts will assume that they were intended to have their ordinary and popularly understood meanings, unless to do so would defeat the perceived legislative intent. [Citation.] *** In construing a statute, specific words in their commonly understood sense best indicate the legislative intendment.” People v. Fink (1982), 91 Ill. 2d 237, 240, 437 N.E.2d 623.

In applying these rules to the case sub judice, we decline to give the importance to the word “then” as is urged by the City. According to Webster, “then” is defined to mean: “at that time: at the time mentioned or specified ***: soon after that: immediately after that: [and] next in order of time.” (Webster’s Third New International Dictionary 2370 (1986).) Considering the above definition and the Act’s silence, we conclude that the issue of when the Sheriff’s mailing shall take place is capable of more than one interpretation and as a result is ambiguous. Accordingly, we must look elsewhere to determine legislative intent.

A review of the legislative debate concerning the 1976 amendment reveals the following comments from Senator Harris: “It extends the time for redemption an additional 180 days. The final service must be delivered by a uniform officer ***. It goes a long way toward curing the serious problem of unscrupulous tax sales ***.” (79th Ill. Gen. Assem., Senate Proceedings, June 25, 1976, at 160.) According to Representative Maragos, the Chairman of the Revenue Committee, the 1976 amendment would make the Act more palatable “to the [potential] home owner, to the taxpayer who’s [sic] house is being taken.” (79th Ill. Gen. Assem., House Proceedings, June 26, 1976, at 15.) Although existing case law is silent on the precise issue before the court, the above comments seem to be in accord with those cases which interpret the revenue article of the Illinois Constitution and the resulting legislation embodied in sections 263 and 266 of the Revenue Act. Article IX of the Constitution of Illinois provides in part:

“(bXl) The right of redemption from all sales of real estate for non-payment of taxes or special assessments, *** shall exist in favor of owners and persons interested in such real estate for not less than two years following such sales.
* * *
(c) Owners, occupants and parties interested shall be given reasonable notice of the sale and date of expiration of the period of redemption as the General Assembly provides by law.” Ill. Const. 1970, art. IX, §§8 (bXl), (c).

Section 263 of the Revenue Act, in following the constitutional mandate, provides in part:

“A purchaser or assignee shall not be entitled to a tax deed to premises sold unless not less than 3 months nor more than 5 months prior to the expiration of the period of redemption he gives notice of the sale and the date of expiration of the period of redemption to the owners, occupants and parties interested in the premises as hereafter provided.” Ill. Rev. Stat. 1989, ch. 120, par. 744.

It is upon this section that respondent most relies. His argument, when boiled down, is that when the Sheriff is unable to serve the owner, the notice required by section 263 is comprised of publication and the notice to owner mailed by the Sheriff. For the following reasons, we agree with respondent’s position.

The above-quoted language from section 263 is unambiguous and mandates that a tax deed shall not issue unless not less than three months nor more than five months prior to the expiration of the period of redemption the purchaser or assignee gives notice to the owner of the sale and date of expiration of the period of redemption as hereafter provided. The Act contains a sample notice and specifies that the notice must be served not less than three months nor more than five months prior to the expiration of the period of redemption. This language again is unambiguous. In a situation where the Sheriff is unable to serve the owner, the Sheriff is to mail the notice by registered or certified mail to such party at his place of residence. While the Act does not say when this mailing is to take place, it does say that notice must be given within the two-month window. For the following reasons, we conclude that the notice required by the Act is comprised of the Sheriff’s certified or registered mailing along with publication.

Our holding is also in accord with section 266 of the Act, which provides that “[t]he court shall insist on strict compliance with the provisions of Section 263 of this Act” (Ill. Rev. Stat. 1989, ch. 120, par. 747) and with case law interpreting both sections 263 and 266. In In re Application of Cook County Collector (1981), 100 Ill. App. 3d 178, 179, 426 N.E.2d 947, the court held that the “strict compliance” requirement of section 266 and the Revenue Act indicated that the legislature recognized the great injury that can result from the forfeiture of property rights. (See also In re Application of the County Collector of Cook County For Order of Judgment & Sale of Lands Upon Which General Taxes For Five or More Years Are Delinquent (1988), 173 Ill. App. 3d 814, 527 N.E.2d 1038.) Another reason for this strict compliance requirement is that “persons of limited knowledge or education may readily overlook the payment of taxes or, in good faith, be unable to make payment. The resulting loss of the property might constitute a financial disaster.” In re Application of Cook County Treasurer & Ex-Officio County Collector (1980), 92 Ill. App. 3d 603, 607, 416 N.E.2d 25.

It appears to us that the legislature was aware that tax delinquent owners need time to contact the county clerk in order that an estimate of redemption be prepared and in some instances may need additional time to arrange financing. We view sections 263 and 266 as a codification of this awareness and as such designed to provide a specific period of time from the giving of notice until an owner's redemption rights cease. Such an interpretation comports with the premise that the tax sales provisions of the Revenue Act are designed not to assist tax petitioners in taking property away from owners, but to coerce tax delinquent owners to pay their taxes. (City of Chicago v. City Realty Exchange (1970), 127 Ill. App. 2d 185, 189, 262 N.E.2d 230. See also In re Application of the County Treasurer of Du Page County (1973), 16 Ill. App. 3d 385, 306 N.E.2d 743.) For these reasons “[a] court should not direct the county clerk to issue a tax deed until it is satisfied that the requirements of the Revenue Act have been met.” Smith v. D.R.G., Inc. (1976), 63 Ill. 2d 31, 36, 344 N.E.2d 468.

Nor do we feel that our holding in any way serves to prejudice the tax buyer, as section 263 clearly provides that a purchaser or assignee may extend a period of redemption in the event that he is unable to strictly comply with the notice requirement. (Ill. Rev. Stat. 1989, ch. 120, par. 744.) Although the City argues that it cannot control the Sheriff and therefore should not be responsible for his actions, it must be remembered that this was one of the very purposes of the 1976 amendment (i.e., to take the giving of notice away from the tax purchaser and place it with a neutral and detached public official). In sum, we perceive no reason why an owner who is served with summons should be entitled to a greater period of notice before his redemption rights cease than one who is not served. We equate the Sheriff’s registered or certified mailing to an unserved owner with service. They are alternate methods of giving the notice the Act requires. Accordingly, we hold that the notice to the owner mailed by the Sheriff does not comply with section 263 (Ill. Rev. Stat. 1989, ch. 120, par. 744), unless it is mailed not less than three nor more than five months prior to the expiration of the period of redemption. Although not necessary to our disposition of this case, we find no reason that the notice mailed by the Clerk should not also be mailed within this same time period and we hold accordingly. As a result of the above, the judgment of the circuit court is reversed and the tax deed orders entered on February 21, 1990, are vacated.

Reversed and remanded.

EGAN and LaPORTA, JJ., concur.