author: JUSTICE LINN

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. WAYNE SAUNDERS et al., Defendants-Appellants.
    First District (4th Division)
    Nos. 1—87—2770, 1—87—2773 cons.
    Opinion filed December 6, 1990.
    Rehearing denied January 7, 1991.

      Randolph N. Stone, Public Defender, of Chicago (Evelyn G. Baniewica and Karen A. Popek, Assistant Public Defenders, of counsel), for appellant Wayne Saunders.
    Michael J. Pelletier and Nan Ellen Foley, both of State Appellate Defender’s Office, of Chicago, for appellant Alfred Taylor.
    Cecil A. Partee, State’s Attorney, of Chicago (Renee Goldfarb, Bonnie Meyer Sloan and Mary Colleen Roberts, Assistant State’s Attorneys, of counsel), for the People.
   JUSTICE LINN

delivered the opinion of the court:

Following a bench trial, defendants Wayne Saunders and Alfred Taylor were found guilty of possession of a controlled substance. Saunders was sentenced to six years’ imprisonment. Taylor was sentenced to 10 years’ imprisonment to run concurrently with a six-year term he received after pleading guilty to Federal narcotics charges. After both defendants filed separate appeals, we granted the State’s motion to consolidate. Defendants contend that they were not proved guilty beyond a reasonable doubt. In addition, Saunders argues that his conviction should be reduced from a Class X felony to a Class 1 felony because the evidence was insufficient to prove that the illicit amount he knowingly possessed was at least 30 grams.

At trial, police officer Terrance O’Connor testified that about 9:30 p.m. on April 29, 1986, he and his partner, Officer Frank Goff, were in a store parking lot at Division Street and Austin Boulevard in Chicago. The officers were working as part of an undercover team, along with surveillance officers Abreu and Paselovieh. Officer O’Connor was carrying $8,500 because he planned on purchasing five ounces of cocaine pursuant to an arrangement he had made with Timothy Shackleford. The officer had purchased a large quantity of cocaine from Shackleford just a few days earlier on April 22. O’Connor testified that when he met Shackleford in the parking lot, Shackleford told the officer to meet him at a nearby restaurant at 5640 North Avenue because “the man with the cane” had seen police at Division and Austin and “didn’t want to do the deal there.” A police report of the incident provided that Shackleford told O’Connor that “his guys would be there shortly and that they would have the dope with them.”

As the officers drove to the restaurant, they radioed the surveillance officers to tell them of the change in their location. After parking the car in the restaurant’s parking lot, O’Connor exited the car and stood on the passenger side next to Officer Goff, who remained seated in the car. Shackleford walked over to the officers’ car and spoke to O’Connor for about 30 minutes, at which point O’Connor observed defendants arrive in a black Chrysler Cordoba. The car, driven by Taylor, parked next to the officer’s car. O’Connor testified that he told Shackleford that he was not going to pay until he saw the cocaine. Shackleford told the officer to talk to Saunders and then proceeded to walk around the parking lot. A police report provided that when the officer told Shackleford that he wanted to see the cocaine, Shackleford said that he understood and that O’Connor should go over to the car and talk to the men. O’Connor testified that Saunders told him that the “ounces were going to cost $8,500,” and that O'Connor would be happy with the quality of the cocaine. When the officer told Saunders that he wanted to “check out the product,” Saunders told Taylor to show the officer “an ounce.” Taylor then reached into his shirt pocket and pulled out a clear plastic bag containing a white substance which O’Connor believed to be an ounce of cocaine. On cross-examination, O’Connor testified that the actual amount recovered was two ounces and that $8,500 would buy a lot more than several ounces of cocaine. On redirect examination, O’Con-nor stated that the two ounces that were subsequently recovered from Taylor by the surveillance officers were in two separate bags.

At this point in the transaction, Shackleford returned and said that there were police in the area and that he would call Officer O’Connor later. Defendants drove away. Officer Goff then radioed to the surveillance officers that defendants had cocaine, that the driver, Taylor, had it in his shirt pocket and directed the officers to stop defendant’s car. Officer O’Connor then returned to the driver’s seat of his car and watched surveillance officers Abreu and Paselovich stop defendants’ car seconds later. Defendants never left Officer O’Con-nor’s sight from the time they left the parking lot to the time the surveillance officers stopped their car. Officer O’Connor also testified that he had seen defendants during a previous delivery of cocaine.

During redirect examination, Officer O’Connor testified that he had a prior encounter with Shackleford and defendants involving a purchase of cocaine and that defendants were in the same black Cordoba. Describing that transaction, Officer O’Connor stated that Shackleford had a conversation with defendants, and then returned to the officer and sold him a large quantity of cocaine. It was the officer’s belief that Shackleford did not have the cocaine on his person before he went over to defendants.

Officer Abreu testified that he stopped the car in which defendants were riding and ordered them out of the car. He stated that he recovered a plastic bag containing cocaine from a breast pocket of a shirt Taylor was wearing. On redirect examination, the officer acknowledged that a police report concerning defendants’ arrests stated that two clear plastic bags were recovered from Taylor.

The parties stipulated that the property recovered from Taylor consisted of two clear plastic bags, that both bags were tested and that the substance in the bags was cocaine and weighed a total of 53.19 grams.

In finding defendants guilty, the trial court stated:

“The defense points to certain discrepancies in the report, a discrepancy which they label as major deal where there was one packet or two packets and other assertions dealing with the credibility of the officers that are involved here. Suffice it to say as far as the Court is concerned this is not a question that involves the credibility of police reports, of supplementary vice case reports and what have you. Yes, there are some discrepancies. There are some things that are inconsistent, but the clear and uncontradicted fabric of the case on the date in question, Mr. Taylor was driving the vehicle that came into the White Castle parking lot, that he was observed by Detective O’Connor with at least one packet. This was taken out of his shirt pocket, that it appeared to Detective O’Connor to be contraband, cocaine and that observation was corroborated a short time later by Detective Abreu who recovered the cocaine from Mr. Taylor.
The question then arises as to the part of Mr. Saunders. In what the court has reviewed, there was testimony from Detective O’Connor which recites narcotics between Detective O’Con-nor and Mr. Saunders, that a price was quoted, contraband was removed and exhibited to Detective O’Connor at the request and direction of Mr. Saunders, and it is apparent from that evidence that there was an aiding and abetting by Mr. Saunders in the enterprise that Mr. Taylor was engaged in. The Court finds from this evidence that the State has proved the charges here beyond a reasonable doubt.”

Defendant Taylor contends that he was not proved guilty beyond a reasonable doubt. In addressing this issue, we are bound by the standard of review which provides that a criminal conviction will not be set aside on review unless the evidence is so improbable or unsatisfactory that it creates a reasonable doubt of the defendant’s guilt. (People v. Collins (1985), 106 Ill. 2d 237, 261, 478 N.E.2d 267.) The relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. (People v. Collins, 106 Ill. 2d at 261, quoting Jackson v. Virginia (1979), 443 U.S. 307, 61 L. Ed. 2d 560, 99 S. Ct. 2781.) Applying this standard of review to the instant case, we find that the evidence was sufficient to sustain Taylor’s conviction. Officer O’Connor’s testimony established that Taylor and Saunders met with the officer. Taylor drove to the site of the meeting and sat behind the wheel while Saunders talked to the officer. When the officer indicated that he wanted to see the cocaine, Taylor reached into his shirt pocket, pulled out a bag containing cocaine and held the bag out in front of Saunders’ chest so that the officer could inspect it. When Shackleford informed the group that police were in the area, Taylor drove out of the parking lot. Moments later he was stopped by Officer Abreu. A pat down search of Taylor produced two bags of cocaine from his shirt pocket which was subsequently determined to be 53.19 grams of cocaine. Taylor correctly cites discrepancies in the testimony concerning the number of bags of cocaine recovered from him. Taylor refers to Officer O’Connor’s direct testimony that Taylor held out an ounce bag of cocaine and his subsequent testimony during cross-examination that he saw one bag containing two ounces of cocaine at the police station following Taylor’s arrest. In another reference to the record, Taylor points out that on redirect examination, Officer O’Connor stated that he saw two ounces of cocaine at the station in two separate bags. Taylor also refers to Officer Abreu’s direct testimony that he recovered “a” bag of cocaine from Taylor, and his testimony on cross-examination that he recorded in his police report the recovery of two bags. The trial court noted these discrepancies in the testimony and determined that they did not undermine “the clear and uncontradicted fabric of the case.” Any discrepancies or conflicts in the testimony affect only the weight to be accorded the testimony, and the determination of credibility of the witnesses, the weight to be accorded their testimony, and the inferences to be drawn therefrom are matters entirely within the province of the trier of fact. (People v. Lighthall (1988), 175 Ill. App. 3d 700, 708, 530 N.E.2d 81.) We are also unpersuaded by Taylor’s reference to the fact that when Officer O’Connor was asked to identify defendants in court, he merely pointed at both men and did not identify them individually by name or by their role in the transaction. Likewise, the fact that Officer O’Connor testified that he had $8,500 with him for the purpose of purchasing five ounces of cocaine and that only 53.19 grams were recovered from Taylor does not persuade us to reverse his conviction. After reviewing the evidence in a light most favorable to the prosecution, we find that the evidence is not so improbable or unsatisfactory that it creates a reasonable doubt of Taylor’s guilt.

Defendant Saunders argues that he was not proved guilty beyond a reasonable doubt because the State failed to prove that he had actual or constructive possession of the cocaine. He also argues that the trial court’s finding of guilty on an accountability theory is not supported by the evidence, and that accountability as a basis for culpability is incompatible with the offense of possession. Saunders reasons that the offense of possession, with respect to Taylor, was complete without any action on his part. The State argues that Saunders’ chailenge to the application of the theory of accountability to his case is meritless because it is based on the offense of possession and defendant was actually charged with and convicted of the wholly different offense of possession with intent to deliver.

Under the theory of accountability, the State has the burden of proving that the defendant solicited, aided, abetted, agreed, or attempted to aid another person in the planning or commission of the offense; that the participation by the defendant took place either before or during the commission of the offense; and that it must have been with the concurrent, specific intent to facilitate or promote the commission of the offense. (People v. Totah (1989), 192 Ill. App. 3d 239, 250, 548 N.E.2d 678.) Although defendant’s mere presence at the crime scene and knowledge of an ongoing offense are not, alone, sufficient to establish accountability, the fact finder may infer defendant’s accountability from his approving presence at the scene of the crime, and from evidence of conduct showing a design on defendant’s part to aid in the offense. (People v. Tinoco (1989), 185 Ill. App. 3d 816, 823, 541 N.E.2d 1198.) It is not necessary, however, to prove that the defendant participated in the commission of the act which constituted the offense. (People v. Schlig (1983), 120 Ill. App. 3d 561, 570, 458 N.E.2d 544.) Evidence of conduct showing a design on the part of the defendant to aid in a crime renders the defendant accountable for the perpetrator’s actions. People v. Schlig, 120 Ill. App. 3d at 570.

The record in the instant case establishes that Saunders was more than merely present at the crime scene and that specific conduct on his part constituted a design to aid in the offense. The evidence indicated that after the officers arrived at the restaurant and Officer O’Connor told Shackleford that he was not going to pay until he saw the cocaine, Shackleford told the officer to talk to Saunders. We note here the fact that the police report stated that Shackleford told Officer O’Connor to talk to “the men.” In any event, defendants arrived and Officer O’Connor talked to Saunders, who told the officer that the “ounces” cost $8,500. According to a police report of the incident, Saunders also told the officer that he would be happy with the quantity of cocaine. When the officer told Saunders that he wanted to “check out the product,” Saunders told Taylor to show the officer “an ounce.” We find this case to be more similar to People v. Sauer (1988), 177 Ill. App. 3d 870, 532 N.E.2d 946, where the court upheld the defendant’s conviction for the delivery of cocaine on an accountability theory because the defendant acted as a lookout in one transaction and transported the cocaine to the sale site in other transactions, than it is to People v. Deatherage (1984), 122 Ill. App. 3d 620, 461 N.E.2d 631, where the evidence showed only that the defendant was present and may have known about the transaction, and where the co-defendant’s reference to another “guy” was too vague to implicate the defendant. Saunders’ conduct in driving with Taylor to the site of the crime, speaking to Officer O’Connor about the price and quantity of the cocaine and requesting Taylor to show the officer an ounce established that he aided Taylor in the commission of the offense during its commission with the concurrent, specific intent to facilitate or promote the commission of the offense.

We next consider Saunder’s claim that his conviction should be reduced to a Class 1 felony because the evidence was insufficient to prove that the amount he knowingly possessed was at least 30 grams. He reasons that since only one packet was shown to the officer in his presence and, claiming that he only had knowledge of one packet, he could only have knowingly possessed one packet. He argues that since the stipulation failed to prove that either of the packets contained at least 30 grams, he was not shown to have possessed that amount. Defendant cites People v. Lawrence (1977), 46 Ill. App. 3d 305, 360 N.E.2d 990, to support his claim. In that case a police officer saw the defendant sitting on an air conditioning outlet holding a plastic bag containing marijuana. When the defendant saw the officer, he threw the bag into a nearby alley and ran away. A bag similar to the one viewed by the officer was found in the same location as where the bag had been thrown. Two other bags were found on top of the air conditioning duct. The court concluded that there was sufficient evidence that the defendant possessed the one bag of marijuana, but insufficient evidence that the other two bags were in his actual, immediate, exclusive possession or control.

We disagree with Saunders’ argument and do not find Lawrence applicable to the instant case, where Saunders has been convicted of possession with intent to deliver on an accountability theory. As stated in People v. Schlig (120 Ill. App. 3d at 570):

“A person may aid or abet without actually participating in the overt act or acts, and evidence that the accused attached herself to a group bent on illegal acts with knowledge of its design supports the inference that she shared the common illegal purpose and will sustain her conviction as a principal for a crime committed by another in furtherance of the venture.”

As previously determined, the evidence presented at trial revealed conduct on Saunders’ part that demonstrated that he shared a common illegal purpose with Taylor and made affirmative acts to promote the sale of cocaine to Officer O’Connor. (See People v. Lee (1987), 162 Ill. App. 3d 972, 516 N.E.2d 360 (defendant convicted of possession and delivery of over 30 grams of cocaine where codefendant, in defendant’s presence, made initial delivery of 28 grams, defendant left and later returned with 12 more grams).) We add that the fact that Saunders quoted a price of $8,500 to Officer O’Connor and told Taylor to show the officer “an ounce,” rather than “the” ounce, also suggests Saunders’ knowledge of more cocaine than the one packet Taylor showed the officer. In any event, we find that Saunders’ participation in the transaction rendered him legally accountable for Taylor’s conduct even though Saunders himself did not have actual, immediate, exclusive possession or control over the 53.19 grams of cocaine ultimately recovered from Taylor. In People v. Baxter (1966), 74 Ill. App. 2d 437, 221 N.E.2d 16 (reversed and remanded because of erroneous admission of defendant’s prior narcotics transactions), the court stated that there was sufficient evidence to sustain defendant’s conviction even though he had no physical contact with the narcotics or the money and where his codefendant carried out the actual delivery of the narcotics and the receipt of money. The court stated, “[wjhile the particular capacity in which defendant participated in the sale transaction may not have been fixed with certainty, this is not a critical weakness as long as the unlawful participation is proved.” (People v. Baxter, 74 Ill. App. 3d at 445.) Although the defendant’s knowledge of the exact quantity involved in the transaction was not an issue in that case, its holding is useful to the instant case because it establishes that the focus must be on whether there is sufficient evidence to prove unlawful participation, rather than the precise quantitative and qualitative level of that participation.

For the reasons stated above, the judgments of the circuit court are affirmed.

Judgments affirmed.

McMORROW, P.J., and JOHNSON, J., concur.


source: Caselaw Access Project

author: JUSTICE JIGANTI

license: Public Domain

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. LARRY POSEY, Defendant-Appellant.
    First District (4th Division)
    No. 1—88—2966
    Opinion filed December 6, 1990.
    Michael J. Pelletier and Leslie Wallin, both of State Appellate Defender’s Office, of Chicago, for appellant.
    Cecil A. Partee, State’s Attorney, of Chicago (Renee Goldfarb, Paul Gliatta, and Daniel J. Fahlgren, Assistant State’s Attorneys, of counsel), for the People.
   JUSTICE JIGANTI

delivered the opinion of the court:

The defendant, Larry Posey, appeals from his conviction following a jury trial for aggravated criminal sexual assault, aggravated battery, and unlawful restraint. Because we believe the defendant was erroneously denied his right under section 114 — 5(a) of the Code of Criminal Procedure of 1963 (Ill. Rev. Stat. 1985, ch. 38, par. 114 — 5(a)), to substitute two judges on grounds of prejudice, we reverse and remand this case for a new trial before a different judge.

Posey was arraigned on April 9, 1986. At that time he moved to substitute the judge assigned to preside at his trial. Referring to his right to substitute two judges, Posey inquired of the court at his arraignment whether he should at that time also name the second judge he wished to substitute. The trial court advised Posey to wait until his case was reassigned. On February 1, 1988, Posey appeared for the first time before the judge to whom his case had been reassigned. At that time Posey made an oral motion to substitute the second judge. Within 10 days of his appearance Posey followed up his oral motion with a written one. The trial court denied the motion. On appeal, Posey argues that the court’s failure to allow him to substitute a second judge deprived him of a fair trial.

Under section 114—5(a) of the Code of Criminal Procedure (Ill. Rev. Stat. 1985, ch. 38, par. 114—5(a)), a defendant charged with a Class X felony or an offense punishable by death or life imprisonment may move to substitute two judges as prejudiced. The defendant is entitled to only one motion under section 114—5(a); therefore, he must name both judges to be substituted in the same motion. (People v. Jones (1988), 123 Ill. 2d 387, 528 N.E.2d 648, cert. denied (1989), 489 U.S. 1040, 103 L. Ed. 2d 236, 109 S. Ct. 1174.) Posey maintains that the trial court at his arraignment misinformed him that the proper procedure was to name the second judge later. Posey argues that he cannot be penalized for following the incorrect instructions of the trial court. Posey analogizes to those cases in which it has been held that where the court fails to properly admonish a defendant with respect to the procedures necessary to perfect his appeal rights under Rule 605(b) (107 Ill. 2d R. 605(b)), the defendant cannot be penalized for failing to follow the proper procedure. People v. Patrick (1989), 188 Ill. App. 3d 542, 544 N.E.2d 1042; People v. Dorsey (1984), 129 Ill. App. 3d 52, 471 N.E.2d 1053 (where trial court’s admonitions were insufficient, defendant excused for failure to file a timely motion to withdraw guilty plea pursuant to appeal).

We believe Posey’s comparisons are persuasive. Where, as in the present case, a defendant stands ready and willing to name a second judge at the time he names the first, but for the advice of the trial court fails to do so, we do not believe the defendant may be penalized. The provision for substitution of judges is a safeguard used to protect the guarantee of a fair and impartial trial and should be liberally construed to that end. (People v. Walker (1988), 119 Ill. 2d 465, 519 N.E.2d 890.) The right of the defendant to substitute judges is absolute, and when it is improperly denied, all subsequent action of the trial court is void. (People v. Ash (1985), 131 Ill. App. 3d 644, 476 N.E.2d 13.) For these reasons we reverse and remand this case for a new trial. Because a new trial is in order, it is unnecessary for us to address the defendant’s other issues on appeal.

Reversed and remanded.

McMORROW, P.J., and JOHNSON, J., concur.


text:
      In re MARRIAGE OF CAROLYN DeGIRONEMO, Petitioner-Appellant, and WILLIAM A. DeGIRONEMO, Respondent-Appellee.
    First District (4th Division)
    No. 1—89—1660
    Opinion filed December 6, 1990.

      Jerome Marvin Kaplan, of Batler & Schwartz, of Buffalo Grove, for appellant.
    Michael S. Schiffman, of Driscoll & Driscoll, of Schaumburg, for appellee.
   JUSTICE JIGANTI

delivered the opinion of the court:

The petitioner appeals from the trial court’s denial of a post-trial motion in which she sought vacation or modification of a judgment of dissolution and reopening of the proofs based on newly discovered evidence. In her appeal, the petitioner, Carolyn DeGironemo, presents the following issues for review: (1) whether the trial court erred in awarding petitioner $103 per week in child support; (2) whether the trial court erred in failing to continue the trial based on petitioner’s assertion that she could obtain further evidence of the respondent’s income; (3) whether the trial court erred in awarding the petitioner $10,000 as her share of the marital estate; (4) whether the court erred in failing to award the petitioner maintenance; and (5) whether the trial court erred in failing to reopen proofs based upon petitioner’s assertion that she had evidence that the respondent had concealed his employment and income.

The parties were married on July 14, 1982. They separated approximately three years later, in November of 1985. The order dissolving their marriage was entered on December 12, 1988, approximately 6V2 years after they were married. The couple had one child, who was approximately six years old at the time of the dissolution. While they were married, the family resided in a two-bedroom condominium which Carolyn and the child continued to occupy after the separation.

At trial, William DeGironemo, the respondent, testified that at the time of the marriage, he conducted business as Alpha-Com, Inc. The company, which was incorporated on November 25, 1980, consisted of William and one other employee, who was also a limited partner. In 1984, during the marriage, William formed a holding company called Alpha American Industries, Inc., which included the stock of Alpha-Com, Inc., and the stock of American Plastic Pallets, a company that sold plastic pallets. Alpha American Industries engaged in the business of selling cellular mobile telephone equipment and manufacturing and selling plastic pallets. William asserted that he never received any income from Alpha American Industries, Inc.

William identified the 1980 corporate income tax return for Alpha-Com, Inc. The company paid out $117,400 in compensation to officers and $37,000 in salaries in 1980. William testified that he received $64,900 of the officers’ compensation and half of the salaries. According to the 1982 corporate tax return, William received a salary of $11,720 in 1982. He was listed as the sole officer of the corporation. The company showed an overall loss. The corporate tax return for 1983 was a consolidated return for Alpha-Com and American Plastic. The return indicated salaries of $21,644. William testified that he did not know whether he received all of the salaries. Alpha-Com had gross receipts of $391,000, but again posted an overall loss. Similarly, the 1984 corporate tax return of Alpha American Industries showed gross receipts of $686,761 with a net loss. Salaries paid were $54,247. William testified that the salary figure represented the combined salaries of himself and two secretaries. He did not recall how much of the 1984 salaries were his. The consolidated financial statement for Alpha American Industries for the years ending November 1985 and November 1986 showed gross income in 1985 of $709,264, with a net loss of $337,949 and gross income for 1986 of $473,831 with a profit of $2,105. The payroll expense for 1986 was $35,784. William testified that this figure represented income to himself and one secretary.

In 1984, when Alpha-Com, Inc., teamed with American Plastic Pallets, Inc., the corporation took out a $365,000 Small Business Administration loan. The loan is payable in monthly installments of $4,345 plus interest through August 19, 1991. At the time of trial, the balance owing on the loan was $288,000. The loan is secured by all of the assets of the company and personally guaranteed by the officer of the company. As of October 1987, the Small Business Administration had agreed to a reduction and settlement of the loan, although a final settlement had not been reached at the time of the consolidated financial statement. William also testified to several other loans outstanding, both corporate and personal. Together with the small business loan, William’s debts total over $600,000.

William also testified to personal income tax returns. The couple’s joint return for 1982 stated wages of $51,456 of which approximately $46,000 were attributable to William, and $5,284 were Carolyn’s. The 1983 joint return indicated no salaries or wages. William testified that in 1983 he paid family expenses out of reimbursements from Alpha-Com. He testified that the couple’s lifestyle did not change from before and that they continued to live in the same place, eat the same food, and dress in the same manner they had before. The rent for their home was $450 a month, and William had a Cadillac that the company paid for and maintained. William testified that a company noted on an amended 1983 tax return, Chicago Pallets, had $84,000 in sales in 1983. Chicago Pallets was a forerunner to the company formed in 1984 under the name American Plastic Pallets. William testified that he never received any income from Chicago Pallets in 1983. William and Carolyn’s 1984 tax return indicated wages of $1,603, Chicago Pallet sales of $23,008, and profit of $2,370. William testified that in lieu of wages, the company paid for living expenses, such as automobile payments, gasoline and insurance expenses, and rent or mortgage.

William’s 1985 individual tax return showed a net loss of $7,633 with no wages, and interest income of $3,109. At the time William was living in a home of his own, with a monthly mortgage of $2,250. William identified documentation showing that in 1985 he was reimbursed for expenses in the amount of $17,834 from Alpha-Com and $591 from American Plastic Pallets. For 1986, William’s tax return showed income of $3,486. The return indicates that William was renting the Inverness home to Alpha-Com for $33,684 a year. In 1986 he drew reimbursements of $19,010 from Alpha-Com and $610.17 from American Plastic Pallets. William testified that he received no income from Alpha-Com in 1986, and no income from American Plastic Pallets in 1984, 1985, or 1986. William’s 1987 tax return shows wages of $1,500, and total income of $3,402. The return indicates that the Inverness property in which William was living was still being rented to Alpha-Com.

William testified that in 1984 he purchased a house in Inverness, Illinois, for $292,000. He purchased the property before he and Carolyn separated, but she did not move into the new home with him. William stated that the total down payment for the house was $30,000 which he paid out of a bonus he had received in 1980. William testified that he had lied to the lending institution about his salary in order to obtain the loan. The house was placed in a trust with William as the beneficiary. His company paid the $2,250 monthly mortgage. William stated that the home was used as the corporate headquarters. During this time, William was also paying $595 a month for the condominium and utilities where his wife and child lived, and $500 a month in child support.

In 1987, William sold the Inverness home for $375,000, and used $53,404 of the proceeds to purchase another home in Palatine, Illinois. He was still married to Carolyn, but they remained separated. The purchase price for the Palatine property was $261,000. The Palatine home was also placed in trust with William as beneficiary. William stated that he again lied to the mortgage company about his income. The monthly mortgage payment was $1,700. At the time of proceedings, the balance on the mortgage was $207,000. William also carries a second mortgage on the Palatine property which had a balance at the time of trial of approximately $25,000. William testified that he took the $30,000 proceeds of the second mortgage and put them into American Plastic Pallets.

William testified that at the time of the proceedings, he was living in the Palatine home, which he had furnished with $5,000 worth of furniture. His current monthly expenses were $2,455 and he was paying Carolyn $1,100 a month. He was driving a 1987 Mercury which was being paid for by his employer. He and his son were covered under his medical insurance policy. He had terminated Carolyn’s medical coverage under his policy. William testified that his only source of income at the time of the trial was through his employment at Bennett Communications and work he did independently, installing and removing car telephones. His yearly salary from Bennett was $39,000 or a net of $516 per week. On some weeks he also generated between $400 to $600 working independently. At the time of the trial in September of 1988, William testified that Alpha-Com had paid up his mortgage to December. Alpha-Com was still in existence at the time of trial.

William also testified that during the course of the marriage he purchased 12,000 shares of stock at $1 per share. Ten thousand dollars worth he purchased with money provided by his father and $2,000 worth he purchased for his son. He sold 5,000 shares and forwarded the money to his father. At the time of the trial he testified that his father retained 5,000 shares. William admitted that in purchasing the Inverness home he showed as an asset $12,185 in stock equity.

A representative of Citicorp, the mortgagee on the Inverness property, produced documents related to William’s application for a financing loan. The loan application prepared in 1984 by William for the property in Inverness disclosed that he had workéd for Alpha-Com for seven years. He was listed as president of the company with a gross monthly income of $16,600 and total monthly expenses of $3,370. An employment verification form submitted by Alpha-Com stated William’s salary as $200,000 annually. William also submitted to Citicorp copies of joint tax returns for the years 1983 and 1984. The tax returns showed salary and wages of $200,000 for each year. In addition to income, William’s loan application showed liquid assets of $985,000, real estate valued at $600,000, automobiles worth $39,000, and personal property in the amount of $50,000. Liabilities on William’s loan application totaled $524,000, including an interim financing loan on the Inverness property of $256,000.

Carolyn DeGironemo testified that she is a high school graduate and has gone to dental assistants’ school. Carolyn described her work history since her marriage to William as follows. For two years, until 1983, Carolyn worked for William at Alpha-Com and Chicago Pallets. Thereafter, she was employed as a dental assistant for eight months at $5 per hour. Carolyn testified that she was terminated from her dental assistant position because she has a history of epilepsy. In 1984, Carolyn worked as a waitress, taking home between $150 and $250 per week. Her next job was as a phone sales representative. She worked for a year and a half and took home approximately $475 a week. Carolyn then worked on an as-needed basis for a private catering company earning $8 per hour. Carolyn also worked as a hostess for another restaurant at $5 per hour. At the time of the trial, Carolyn was baby-sitting on a part-time basis, some weeks earning $120 to $180 and in some weeks not working at all.

On cross-examination, William introduced credit applications made out by Carolyn. In one application dated August 1985, Carolyn stated that she made $30,000 plus commissions annually in her occupation as a sales representative for Pay Fone Systems. In a Sears credit application Carolyn listed her income in January 1985 as $320 per week. In applying for a car loan in 1987, Carolyn listed her income as $2,000 a month. Carolyn testified that the figures on the loan applications did not accurately reflect her income and that she had in some instances falsified the figures or represented the combined income of herself and William.

At the time of the trial, Carolyn was paying $214 a month for a car she was buying. She testified that she still owed $9,500 on the car. She also owed $2,100 to Visa, $1,200 to Master Charge, $150 to Wieboldt’s, $1,900 to Discover, and $2,100 to Sears. She had personal loans outstanding in the amount of $4,500, and attorney fees of $4,000. She does not have dental or medical insurance. Carolyn testified that education expenses for her child were $1,380 per year. Carolyn stated that her total expenses add up to $1,544 per month. This figure includes expenses for both her and the child. At the time of the trial, Carolyn was receiving $1,115 per month from William for rent, utilities, and child support. Carolyn stated that she would like to return to school on a part-time basis and work with teenagers as a counselor. At the time of trial, she had sent to a school for information on its curriculum, but had not pursued the endeavor further. She testified that her son would need after-school supervision if she worked, but she did not know how much it would cost.

In the way of personal property, Carolyn testified she owned a living-room set, two bedroom sets, a kitchen table, microwave oven, and two cabinets. She testified that when William left to move into the Inverness home, he took with him new kitchenware, including pots, pans, and dishes.

Carolyn testified that while she was married to William she found cash stashed in their home. She found an envelope containing $132,000 in a shoe-shine kit. Carolyn testified that she left the money where she found it and did not ask her husband about it. Later she would periodically check the money until one day she found it was gone. When she asked William about the money, he told her he had put it into the business. William took the stand after Carolyn’s testimony and stated that at no time did he have $132,000 stashed in the home or anywhere else. He testified that he did bring home $30,000 in cash once. The cash was later used as the down payment on the Inverness property.

At the conclusion of the evidence, the trial court found that the marital estate had no value. The court awarded Carolyn the sum of $10,000. William’s take-home pay was established as that received from Bennett Communications. The court fixed child support at 20% of William’s take-home pay, or $103 per week. The court denied Carolyn any rehabilitative maintenance and found that her debts were hers and.William’s debts were his. The judgment dissolving the marriage was entered on December 12,1988.

On January 10, 1989, Carolyn filed a post-trial motion. In her post-trial motion, Carolyn sought vacation or modification of the December 1988 judgment, as well as a reopening of the proofs. Carolyn alleged newly discovered evidence as the basis for reopening the proofs. Attached to Carolyn’s motion was an affidavit by Carolyn in which she stated that since the date the trial concluded, she had learned that William was still engaged in business under the name Alpha-Corn. The trial court denied Carolyn’s post-trial motion and this appeal follows.

Carolyn’s first assertion on appeal is that the trial court erred in awarding only $103 per week in child support. Carolyn argues that the best evidence of William’s income is not the salary he receives from his current employer, Bennett Communications, nor the income indicated on his personal tax returns, but the amount he was actually able to spend during the period of time to which the parties testified. Carolyn points to William’s past expenditures of in excess of $3,000 per month and urges that this is the figure upon which the determination of support should be predicated. Citing to Ivanyi v. Granoff (1988), 171 Ill. App. 3d 411, 526 N.E.2d 189, Carolyn argues that where the net income of the father cannot be determined, the court should look not to the percentage guidelines of section 505(a)(1) of the child support section of the Illinois Marriage and Dissolution of Marriage Act, but to section 505(a)(5) and order an amount of support considered reasonable in the particular case. Ill. Rev. Stat. 1985, ch. 40, par. 505(a)(5).

Carolyn further argues that the trial court should have taken a skeptical view of William’s credibility given that he admitted that he had lied on loan applications. Carolyn urges the court to accept over William’s denial her assertion that at one time he kept over $132,000 in cash in a shoe kit in his home. Carolyn also points to the fact that when questioned about Carolyn’s alleged signature on the joint tax returns submitted with his loan application to Citicorp, William invoked his privilege against self-incrimination, refusing to acknowledge whether the signatures were in fact Carolyn’s. Citing to Christenson v. Christenson (1968), 281 Minn. 507, 162 N.W.2d 194, Carolyn urges that as a consequence of William’s invoking his fifth amendment privilege, the trial court should have stricken all of his testimony.

We do not believe the trial court erred in awarding Carolyn $103 per week in child support. In Ivanyi v. Granoff, the case on which Carolyn relies, the trial court found, and the appellate court agreed, that the defendant-husband’s net income was indeterminable on the evidence offered. The unrebutted testimony offered by the defendant’s expert was that the defendant’s tax reportable income was greater than his actual or spendable income. The court declined to use the percentage guidelines of section 505(a)(1) of the Illinois Marriage and Dissolution of Marriage Act and instead determined the amount of child support that was reasonable under the circumstances. The court noted that the plaintiff-wife had the burden of showing the court what the defendant’s income was.

In the present case, it is unrebutted that at the time of the dissolution proceedings, William was a salaried employee of Bennett Communications, earning $516.65 per week. William testified that he sometimes earned $400 to $600 per week working independently. William also testified to $46,000 in wages in 1982, the first year of the marriage. For the years thereafter, William’s personal tax returns indicate little or no income. Although William’s corporate returns indicate salaries paid out for the years 1982 and beyond, it is not clear from the evidence what portion of the salaries paid went to William. There was uncontroverted evidence that William had written off as business expenses of his corporation numerous living expenses, including a substantial mortgage payment. The petitioner has not alleged that these expenses were unreasonable business expenditures. (See Rimkus v. Rimkus (1990), 199 Ill. App. 3d 903, 557 N.E.2d 638.) It is further uncontroverted that William was personally and corporately liable for over $600,000 worth of debt.

If William’s corporate and personal worth exceeded his liabilities, this fact is not supported by evidence. The only evidence of William’s net worth is a financial statement he prepared in connection with a loan application he testified was fraudulent in content. Carolyn herself labeled the loan application as fraudulent in impeaching William’s credibility. There is evidence that the corporation Alpha-Corn was still in existence at the time of the proceedings. Again, however, there is no indication of the worth, if any, of this company.

What evidence there is tends to indicate that William’s corporations have operated with very little or no profit, and that the value of William’s assets do not transcend the debt incurred to obtain them. It appears that William has an aptitude for shifting money around on paper, but it is not at all clear that he actually has any. In the absence of expert testimony or evidence to the contrary, the trial court’s options were limited. The only evidence of a definite and regular income for William was the evidence of his salaried employment with Bennett Communications. Unlike the situation in Ivanyi, the evidence in this case directs the court to the net income guidelines rather than a finding of “spendable” or actual income.

Moreover, the petitioner’s reliance on the case of Stern v. Stern (1989), 179 Ill. App. 3d 313, 534 N.E.2d 533, in which the appellate court found that the trial court did not make a proper determination of child support, is also misplaced. Unlike the petitioner in Stern, Carolyn had ample opportunity to testify to her needs and the needs of the child, and she did not allege that William failed to comply with her discovery requests.

As for the trial court’s assessment of William’s credibility, and the weight to be given each of the party’s testimony regarding the $132,000 in cash, we do not believe that the trial court’s finding that Carolyn’s version of events was incredible was against the manifest weight of the evidence. (See In re Marriage of Eltrevoog (1982), 92 Ill. 2d 66, 440 N.E.2d 840.) We also do not believe that the trial court erred in failing to strike all of William’s testimony because he at one point invoked his fifth amendment privilege against self-incrimination. We do not here address the issue of whether testimony should be stricken under such circumstances. Rather, we note that the petitioner failed to raise this issue to the trial court and has therefore waived it. We further do not believe that the testimony in question is so prejudicial as to warrant review, notwithstanding Carolyn’s failure to raise it below. (Barreto v. City of Waukegan (1985), 133 Ill. App. 3d 119, 478 N.E.2d 581.) William invoked his privilege in response to a question about the genuineness of Carolyn’s signature on a tax return he submitted to Citicorp in connection with a loan application. In view of the fact that William admitted that he lied about his income to the lending institution, we do not believe that the evidence at issue had any significant bearing on the proceedings.

In a similar argument to the one above, Carolyn asserts that the court erred in awarding her only $10,000 as her share of the marital estate. Again, we believe the trial court acted properly in light of the evidence before it. Carolyn maintains that the court failed to apply the relevant factors of the disposition of property section of the Illinois Marriage and Dissolution of Marriage Act. (Ill. Rev. Stat. 1985, ch. 40, par. 503(d).) She argues that at the least she is entitled to a share of the approximately $70,000 in proceeds from the sale of the Inverness property and an interest in the stock purchased during the marriage, which Carolyn values at approximately $8,000. William testified that he used approximately $50,000 of the Inverness property proceeds to purchase the Palatine home. At the time of the dissolution proceedings, the Palatine property was mortgaged for approximately $230,000. There was no testimony indicating the market value of the Palatine property.

Despite the equity in the Palatine home and the stock, the uncontroverted evidence was that William’s liabilities exceeded his assets. Carolyn insists that she should not be charged with the debts of the corporation, but offers no authority for this proposition. Carolyn herself argued to the trial court that William’s corporations were but an extension of himself. Under section 503(d)(7) of the Illinois Marriage and Dissolution of Marriage Act, the liabilities of the parties are a factor to be considered in the disposition of marital property. In the present case, the trial court allocated to Carolyn her debts of approximately $24,000, and to William his debts, personal and corporate, of approximately $600,000. In light of the evidence presented, we do not believe the court abused its discretion in awarding Carolyn $10,000 in marital property. (In re Marriage of Caldwell (1984), 124 Ill. App. 3d 898, 465 N.E.2d 523.) Nor do we believe the evidence supports Carolyn’s assertion of a dissipation of marital assets. Further, this issue was not raised in the trial court and is waived for purposes of our review. Bennett v. Raag (1982), 103 Ill. App. 3d 321, 431 N.E.2d 48.

The trial court denied Carolyn her request for rehabilitative maintenance. Carolyn argues that the court abused its discretion in denying her maintenance. However, Carolyn did not support her request for rehabilitation with any evidence of the amount of education, expense, or time she needed to be rehabilitated. Carolyn testified that if she went to school or worked full time she would also incur child care expense, but again, she did not specify a particular amount.

This was a marriage of six years’ duration. The last three years the couple were separated. Carolyn, who was 27 years old at the time of the proceedings, testified that her total monthly expenses were $1,544 per month. She testified to a variety of past jobs in one of which she had earned approximately $1,600 per month. Carolyn was awarded $10,000 in marital property out of a marital estate in which the debts appear to exceed the assets. The evidence suggests that William remains in a highly leveraged financial position. These factors, together with the vague quality of Carolyn’s maintenance request, support the trial court’s decision not to award Carolyn rehabilitative maintenance. See Ill. Rev. Stat. 1985, ch. 40, par. 504.

Carolyn also contends that the trial court abused its discretion in failing to grant her a continuance to present a witness from Bennett Communications. The trial commenced on September 2, 1988. The Bennett witness was not subpoenaed until September 22, 1988, and was unable to be in court on the date requested, September 26, 1988, the second and final day of the trial. Carolyn requested that the witness be allowed to testify on the day set aside for final arguments. The court denied Carolyn’s request.

We do not believe the court abused its discretion in failing to grant a continuance so that Carolyn could present her witness. Carolyn did not demonstrate to the court a sufficient excuse for any delay. (See 107 Ill. 2d R. 231(f).) Once a case has reached the trial stage, the moving party must give especially grave reasons for a continuance. (Stern v. Stern (1989), 179 Ill. App. 3d 313, 534 N.E.2d 533.) We do not believe Carolyn’s comparisons to the situation in Stern are apt. In Stern, the petitioner argued that she was emotionally unable to attend the trial on the date scheduled. Further, the respondent in Stern continually ignored the petitioner’s discovery requests, making it necessary for the petitioner to call an additional witness. Carolyn was aware as early as July of 1987 that William’s employment status had changed and that he was or was to become an employee of Bennett Communications. She did not give the trial court any sufficient reason for her lack of diligence in serving the Bennett witness. As such, the trial court properly denied Carolyn’s request for a continuance.

Carolyn’s final argument is that the trial court erred in failing to grant her request for a new trial based on newly discovered evidence. In her motion for a new trial, Carolyn asserted that she was in possession of newly discovered evidence showing that Alpha-Corn, William’s corporation, was still in active operation. Attached to Carolyn’s motion was her affidavit stating that she had also learned that American Plastic Pallets still maintained a telephone number and was located at the same address as Alpha-Corn. Carolyn also attached to her motion copies of newspaper advertising that listed Alpha-Com as one of numerous distributors of the “Cellular One” mobile phone. She also submitted copies of Alpha-Com documents showing proposed work orders for installation of cellular phone systems.

We do not believe that Carolyn’s new alleged evidence would change the result of the trial court if a new trial were granted. (Tuttle v. Fruehauf Division of Fruehauf Corp. (1984), 122 Ill. App. 3d 835, 462 N.E.2d 645.) Carolyn has not shown that at the time of the trial court’s disposition, William’s corporation was still active. That William testified at trial that Alpha-Com was at the time dormant does not preclude the possibility that after the dissolution proceeding the company was reactivated. Even if Alpha-Com were still in operation during the trial, Carolyn has not proposed any evidence to show that William’s financial condition was different than the evidence at trial indicated. Given that the Dlinois Marriage and Dissolution of Marriage Act is geared towards a party’s present ability to pay, and not future financial resources (see Coons v. Wilder (1981), 93 Ill. App. 3d 127, 416 N.E.2d 785), we do not believe that Carolyn has demonstrated that the trial court’s disposition could be any different if the case were retried. For these reasons, the judgment of the trial court is affirmed.

Affirmed.

JOHNSON and LINN, JJ., concur.


text:
    ROYCE L. MARTIN, Plaintiff-Appellant, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, a/k/a GEICO, Defendant-Appellee.
    First District (4th Division)
    No. 1—89—2714
    Opinion filed December 6, 1990.

      Janet E Gerski, of Chicago, for appellant.
    Pretzel & Stouffer, Chartered, of Chicago (Robert Marc Chemers, Michael A. Clarke, and Robert J. Franco, of counsel), for appellee.
   JUSTICE LINN

delivered the opinion of the court:

Plaintiff, Royce L. Martin, brought an action for breach of insuranee contract against defendant, Government Employees Insurance Company (GEICO). Martin seeks damages arising out of GEICO’s refusal to honor his claim for loss of his automobile, which was stolen shortly after Martin sent in his application for insurance to GEICO. The trial court dismissed Martin’s complaint for failure to state a cause of action on the grounds that there was no contract of insurance at the time of the theft.

Martin appeals, contending that his second amended complaint states a breach of contract action under one of two alternative theories of contract formation: (1) GEICO’s solicitation form and quote sheet/application contained ambiguous language that must be construed as extending an offer of insurance to Martin, which Martin accepted when he completed the application and placed it in the mail with his premium; or (2) assuming that Martin’s application for insurance is viewed as his offer to purchase insurance, GEICO actually or constructively accepted the offer before the theft of Martin’s automobile.

Because we find that, under either theory, no contract came into existence, we affirm the trial court’s dismissal of this action.

Background

Martin works for the United States Postal Office. GEICO conducts a mail-order automobile insurance business nationally. In its literature, the company states that it “thinks federal employees deserve special service and savings on their insurance.”

In March 1986, Martin’s existing insurance coverage for his 1985 Pontiac Firebird was due to expire. Before that date, Martin obtained a form in the post office. This form gave him the opportunity to obtain a free quotation from GEICO as to the rates available for auto insurance, based on the information solicited in the form. This solicitation for quote requested such information as the potential insured’s occupation; social security number; name of current insurance company and date current insurance expired; driver’s license suspension or revocation information, including any convictions for driving under the influence of drugs or alcohol; history of accidents or traffic violations; each additional driver’s name, birth date, gender, and marital status; occupation; years driving; driver training; and the driver’s percentage of use of each automobile insured. In addition, the solicitation form requested information on each automobile to be insured, including year, make, model, body type, number of cylinders, total mileage, annual mileage, number of days used in travel to school or work, distance travelled, and use of automobile in employment.

GEICO’s form encouraged interested persons to “take a few minutes right now to complete and return the postage-paid FREE QUOTATION REQUEST. If you qualify, you'll know in just a few days how much GEICO might save you.” The form further noted that if a potential insured did not meet GEICO’s underwriting requirements, he or she “may still obtain the same quality auto coverage and service from one of [GEICO’s] affiliates, at somewhat higher rates and for a 6-month policy term.”

Martin completed the form and returned it to GEICO, which in turn sent him a “personal quote sheet,” an application for insurance, a cover letter, and step-by-step instructions for completing the “application process.” According to Martin, when he received the quote sheet/application from GEICO (instead of an affiliate), he assumed that he had met GEICO’s underwriting requirements and did not seek replacement insurance elsewhere.

The cover letter that came with the quote sheet and application was headed “It’s Easy to Do Business With GEICO” and set out “5 Easy Steps” to follow in returning the quote/application. The application required some additional information from Martin, but many of the questions were ones that had been answered previously in the solicitation for quote. At least one additional question was new, however: whether the applicant had any physical impairments. Martin answered that he is deaf.

The application form also contained certain representations, the legal significance of which are in issue. In essence, Martin construed GEICO’s package of solicited information, quote sheet/application, and cover letter as extending an offer of insurance which he accepted when he completed the application and mailed it in with his premium payment. GEICO counters that it expressly reserved the right to approve the application and notify the applicant before an actual contract to insure came into being. GEICO further maintains that, under Illinois law, an insurance application is not the insurer’s offer to insure but instead is the applicant’s offer to purchase insurance.

Martin sent in his application and check on March 14, 1986. On March 27, 1986, his automobile was stolen. He reported the loss to GEICO the same day, by telephone. By a “GEICO CLAIM-GRAM” dated April 3, 1986, Martin received GEICO’s request for his policy number in order to process the claim. At about the same time, GEICO returned Martin’s application and check. The check had been stamped for deposit only but had not been cashed. A policy control number sticker had been torn off the face of the check. An accompanying memorandum, dated April 2, 1986, stated that GEICO could not consider his memorandum until he completed answers to certain questions. The requested information, however, already had been furnished or did not apply. Martin returned the application and check to GEICO. Shortly thereafter, his check and application were returned, with no explanation. After his vandalized automobile was recovered, Martin again demanded adjustment of his claim and again tendered his premium payment. By letter dated June 19, 1986, however, GEICO denied liability and refused to pay on the ground that the application had not been completed and had not been approved.

GEICO successfully moved to dismiss Martin’s original and amended complaints, on the ground that the pleadings failed to state a cause of action for breach of contract.

Opinion

The sole question we must resolve is whether GEICO and Martin had entered into a contract of insurance at the time Martin reported his loss of the automobile. Accordingly, we must look to the elements of contract formation rather than to general principles of contract construction. Contract formation issues turn on the elements of offer, a strictly conforming acceptance of the offer, and supporting consideration. E.g., City of Burbank v. Illinois State Labor Relations Board (1989), 185 Ill. App. 3d 997, 1002-03, 541 N.E.2d 1259.

Under Martin’s primary theory of recovery, a contract of insurance was formed when Martin mailed in his completed application and check to GEICO, thereby “accepting” GEICO’s “offer” to insure him. Martin concedes that applications for insurance generally are viewed as the applicant’s offer to purchase insurance, which the company must accept (after evaluating the underwriting risk) before a binding contract is formed. Nevertheless, Martin points to alleged ambiguities in the GEICO offering materials, which led him to reasonably believe that GEICO’s insurance coverage would become effective upon his completion of the application process.

Acknowledging that his theory is one of first impression for Illinois courts, Martin cites cases from other jurisdictions to support his argument. According to him, those cases provide persuasive reasoning for holding that when GEICO disseminated ambiguous information in the course of its mail-order solicitations, Martin’s responding application and premium check completed the formation of the insurance contract.

Martin relies primarily on four cases: Klos v. Mobile Oil (1969), 55 N.J. 117, 259 A.2d 889; Metis v. Central Standard Life Insurance Co. (1956), 142 Cal. App. 2d 445, 298 P.2d 621; Fritz v. Old American In surance Co. (S.D. Tex. 1973), 354 F. Supp. 514; Riordan v. Automobile Club of New York, Inc. (1979), 100 Misc. 2d 638, 422 N.Y.S.2d 811. In these cases, the courts found that the insurers were contractually bound to pay the claims presented because they had accepted the underwriting risks at the time of the occurrences; they simply desired to avoid payment on the grounds that the policies in issue had not become effective at the time the insurable event occurred.

In Klos, an accident insurance company solicited Mobil gas card holders through the mail, sending these prospective insureds a letter, brochure, and application form that urged them to take advantage of the insurance being offered. By completing the application and returning it to the company, the card holder would receive the insurance; the premium automatically would be debited to his account. The plaintiff in Klos completed and mailed in his application and actually received the insurance policy. A few days later, he was fatally injured. His wife sued the company after it denied her claim based on its determination that coverage had not taken effect under the policy at the time of the death. The question presented was not whether the parties had entered a valid contract of insurance, but rather, when the contract should be given effect. Despite conflicting language in the insurer’s materials as to the date coverage would begin, the court determined that the applicant’s reasonable expectations of coverage should be given effect. Significantly, the insured had received the policy after completing the application, leading the court to remark, “[A]n applicant who actually had the policy in his possession surely would be mystified to learn that for no apparent reason he was not covered until some future date.” 55 N.J. at 126, 259 A.2d at 894.

In considering the Klos decision, an Illinois court has commented that if a prospective insured becomes eligible for insurance by his membership in a class of credit card holders, “and the insurer does not retain the customary option or discretion to accept or reject an application pursuant to underwriting considerations,” the brochure and application may constitute a contract, “at least for some purposes.” (Fuller v. Standard Oil Co. (1971), 1 Ill. App. 3d 799, 802, 274 N.E.2d 865, 867.) Unlike the situation in Klos, however, GEICO did not offer “automatic” insurance based on membership in a class of customers. Nor did it propose to issue insurance regardless of underwriting considerations. On the contrary, GEICO reserved the express right to review and approve the application materials before extending coverage.

Unlike the facts in Klos, moreover, the GEICO materials were not ambiguous as to when coverage would commence. The last of the “5 Easy Steps” in GEICO’s instructions notified the potential insured that when he completed, signed, and returned the application with the payment, he was requesting that the company issue a policy; that “provided” his application was approved, he could choose to have his policy go into effect “immediately upon approval by the Company; or on a date to be selected by the insured “but not before the approval date.” A final exhortation stated “Coverage cannot be issued unless your application is approved by the Company. When your application receives final approval, you will be informed by return mail.” (Emphasis added.)

In Fritz v. Old American Insurance Co. (S.D. Tex. 1973), 354 E Supp. 514, the court found the Klos rationale persuasive in construing the effective date of an accident insurance policy. There, the insurer’s application form requested none of the traditional underwriting information, asking only for the applicant’s date of birth, his signature, and the beneficiary’s name and relationship to the applicant. A day or two after mailing in the application, the prospective insured was killed in an automobile accident. Thereafter, .his wife submitted a claim, which the insurance company denied on the basis that the policy had not taken effect because the insurance company had not approved the application at the time of the accident.

The Fritz court found coverage to be effective as of the date on which the prospective insured mailed his completed application form to the company, along with the premium check. In so holding, the Federal district court recognized that Texas law appeared to support the insurer’s position, since general insurance principles adopted in Texas did not consider the application form as the insurer’s offer to provide insurance. In fact the court acknowledged that a completed application must be “unconditionally accepted” by the insurance company before a binding contract is made. The insurer also pointed to language in its solicitation materials that indicated the policy would be effective “when issued,” which would be “just as soon as the application is approved.” The Federal court was not persuaded by the insurer’s position, however, because there was other language in the company’s solicitation materials that strongly suggested that coverage would take effect immediately upon application. In finding for the claimant, the court admitted that it was heavily influenced by the defendant insurer’s use of the mails. The court was of the opinion that traditional contract theory was inapplicable to “this type of insurance marketing.” 354 F. Supp. at 518.

We do not believe that the GEICO materials, by their express language, can be construed as giving rise to an offer that could be accepted by merely submitting the application and check. Nor do we find there to be an ambiguity on the issue of when coverage could be expected to begin. The GEICO representations, in our opinion, unequivocally put the applicant on notice that the application form was not to be considered an offer from GEICO, but rather a “request” for coverage, which would not be granted before GEICO’s approval of the application. Exhortations to “act today” and “join the GEICO family of ‘good drivers’ ” do not, in our opinion, lead a reasonable applicant to believe his coverage begins upon mailing in the application when the same materials expressly condition coverage on approval of the application. If a policy had issued in the pending case, as was the situation in Klos, we could find that such issuance equated with approval. Likewise, if the GEICO materials included a strong suggestion that mailing in the form caused immediate or automatic coverage, we might determine that the approval language was surplusage and follow the lead of Fritz or the Riordan case.

In Riordan v. Automobile Club of New York, Inc. (1979), 100 Misc. 2d 638, 422 N.Y.S.2d 811, the insurance company’s advertisement in an auto club magazine contained an “enrollment form.” The advertisement stated that “club membership automatically qualifie[d]” the insured to enroll and upon doing so, the individual could take the travel accident insurance wherever he or she went. The prospective insureds mailed in the completed enrollment form and premium payment a day or two before the wife was killed in an accident while traveling. The insurer received the application and check the following day and mailed a certificate of insurance, before discovering that the insured had died. The company subsequently denied coverage on the grounds that the certificate had not issued at the time of the death. The court nevertheless found that coverage existed, citing Klos and Fritz and holding that language in the advertisement soliciting the application led the applicant to assume that coverage would begin upon mailing the completed form and premium payment.

In Metts v. Central Standard Life Insurance Co. of Illinois (1956), 142 Cal. App. 2d 445, 298 P. 2d 621, the plaintiff had submitted an application and check to obtain polio insurance for his family. Within days, plaintiff discovered that his son had contracted polio. The insurance company denied the subsequent claim by returning the application and premium payment. In holding in favor of the applicant, the court noted that the application form stated that “Immediate First Day Coverage Automatically Covers Entire Family” and further represented that the coverage “Pays from FIRST DAY that poliomyelitis manifests itself.” (142 Cal. App. 2d at 448, 298 P.2d at 624.) The California court held that the application constituted an offer by the insurer to extend coverage, effective immediately when the offeree signed and returned the application.

Metts provides no more support for Martin’s position than the other three cases discussed above. The representation of “immediate,” first-day coverage was viewed as part of an offer from the insurance company, which was accepted upon the prospective insured’s mailing of the application and premium. Notably, the insurer’s practice was to date the policy when issued as of the date of the application. It does not appear, moreover, that the Metts court was construing any ambiguous language in the application because the express representation as to immediate coverage for polio was unrebutted. Since the plaintiff had no knowledge of his son’s polio at the time he submitted the application and check, there was no defense to coverage. The court quoted general principles of construction, stating, “Where there is no ambiguity *** courts will indulge in no forced construction against the insurer, and the insurance policy, like any other contract, is to be interpreted according to the intention of the parties as expressed in the instrument in the light of the circumstances surrounding its execution.” Metts, 142 Cal. App. 2d at 449-50, 298 P.2d at 624.

In the pending case, GEICO’s representations were materially different from those in Metts (and the other cases). In our opinion, there was no representation of immediate coverage, express or implied. Unfortunately, for Martin, he did not request and GEICO did not supply a binder or conditional receipt keyed to the date that Martin’s existing coverage was to expire. Had such a procedure been followed, Martin presumably would state an actionable breach of contract theory, even with the “approval” language appearing in the GEICO materials, because the granting of a binder or conditional receipt would have indicated GEICO’s acceptance of the underwriting risk based upon the solicitation for quotation.

Like Martin, we suspect that GEICO most likely would have accepted Martin’s application and would have provided coverage if the theft of the car had not occurred when it did. From a business or public relations standpoint, GEICO’s position appears questionable, particularly in light of its attempt to attract government employees. We further acknowledge that our decision appears harsh in light of Martin’s situation. We certainly sympathize with Martin, who did what he could to obtain replacement insurance coverage in a timely fashion. We cannot ignore GEICO’s reservation of the right to approve the application, however,' without doing serious damage to the common law of contract. In our view, GEICO’S right to approve the application equates with the acceptance of the prospective insured’s offer.

In that regard, Martin alternatively contends that GEICO did accept his application. This theory requires us to find that GEICO accepted the application “constructively,” once Martin mailed in the application and check because there was nothing left for GEICO to do at that point except for the purely mechanical or administrative act of processing the form and then sending notice to Martin. In support he cites the fact that GEICO had stamped his check for deposit and affixed a policy control number on the face of it. While these facts do suggest that GEICO was processing Martin’s application, such internal practices do not equate with an objective manifestation to Martin that GEICO had actually accepted his offer. Objective manifestation is the “essence of a valid acceptance.” (Rothenbuecher v. Tockstein (1980), 88 Ill. App. 3d 968, 970, 411 N.E.2d 92, 94; see also Rosin v. First Bank (1984), 126 Ill. App. 3d 230, 466 N.E.2d 1245 (although an acceptance may be implied under certain circumstances, generally silence cannot be relied upon to establish acceptance of an offer).) If GEICO had expressed some indication of its acceptance to Martin, our disposition of this case may well have been different. Certainly, if an agent of GEICO had made oral representations that Martin was covered upon mailing in the application, or if GEICO had notified Martin of its approval of the application before or even after the theft of the car, we could find that a contract of insurance was in existence.

There is nothing in the record to suggest that GEICO waived its right to approve the application or that GEICO considered its right to approve as a technicality. Martin’s reliance on Armstrong v. United Insurance Co. of America (1981), 98 Ill. App. 3d 1132, 424 N.E.2d 1216, does not aid his position because there the insurance company’s assertion of a right to approve applications was shown to be a sham under the circumstances. In Armstrong, the insurance agent repeatedly assured the plaintiff that he would be covered upon tender of the premium with the completed application. Furthermore, the company fostered a policy of telling applicants they were covered from the moment of first payment. The company subsequently denied plaintiff’s claim on the basis that no contract of insurance had come into effect because its “conditional receipt” of the application contained a provision that the application was subject to the company’s approval, which had not been formally given at the time of the insured’s death. In finding that the insurance company was in fact bound notwithstanding the disclaimer, the court held that the company was bound by its agents’ representations.

Armstrong can be read as prohibiting an insurer from denying coverage based on a general “final approval” term while at the same time inducing applicants to sign up based in part on the representation that coverage is effective upon tender of payment with the completed application. This actual practice of the company flatly contradicted its stated intention to reserve a right of “final approval” of applications. Moreover, the insured had received a conditional receipt, which strongly implies that the underwriting risk was accepted at the time of the application.

Martin essentially asks this court to assume that GEICO’s underwriting was complete after it reviewed the solicitation for quote and sent him a personal quote sheet/application form. As we have noted, the application form did request additional information, although there was substantial duplication as well. The additional questions contained in the form may or may not have borne directly upon the decision to underwrite, but we are not justified in setting aside GEICO’s explicit, unambiguous statement that it would not extend coverage before approval of the application. To do so we would necessarily conclude that reservation of such approval was so mechanical a device as to be mere surplusage. On the contrary, we believe GEICO took care to draft its materials in such a way as to prevent an applicant from assuming that by mailing in the form and check he would create a binding contract for immediate coverage.

Had the GEICO materials remained silent on the issue of reserving approval, or had the timing of coverage been left completely open, we may have found it reasonable to assume that the contract was created when Martin completed the application process. In such a situation Martin’s reasonable expectations of immediate coverage would be fulfilled because there would be nothing in the materials to indicate that any further consideration of the application would be necessary. Hence, the effective date of coverage under the contract would also equate with the date the application was mailed. Contract theory would support such a result because of the common law “mailbox” rule, which recognizes that the mailed acceptance of an offer is effective when mailed, not when received or acknowledged.

Despite our misgivings about the impact of our decision on Martin, whose counsel made an admirable effort to fit within the Klos line of cases, we hold that the parties in this case had no enforceable contract of insurance on the date that Martin’s automobile was stolen. We therefore must affirm the trial court.

Affirmed.

McMORROW, P.J., and JOHNSON, J., concur.

      This position is consistent with Illinois cases that adhere to the general rule that an application for insurance is the applicant’s offer directed to the insurance company, not the other way around. (Talbot v. Country Life Insurance Co. (1973), 8 Ill. App. 3d 1062, 291 N.E.2d 830.) The insurance company normally assesses the underwriting risk from the application and therefore the insurance carrier must accept the applicant’s offer before a contract is formed. (See Carroll v. Preferred Risk Insurance Co. (1966), 34 Ill. 2d 310, 215 N.E.2d 801.) GEICO’s express reservation of final approval is thus consistent with the purpose of the general rule, i.e, to afford the insurer the opportunity to evaluate the risk and approve the application before becoming bound. We do not believe that the use of mail order marketing techniques necessarily changes the purpose of the rule, although it may under circumstances like those in Klos and similar cases.


text:
    KENNETH SALVATORE, Plaintiff-Appellant, v. MICHAEL GELBURD et al., Defendants-Appellees (The 1950 North Howe Condominium Association, Defendant).
    First District (4th Division)
    No. 1—89—3520
    Opinion filed December 6, 1990.

      David M. Smolin, of Smolin, Blum & Brandwein, of Chicago, for appellant.
    Bernard L. Rivkin and Lee M. Weisz, both of Braun & Rivkin, Ltd., of Chicago, for appellees.
   JUSTICE JIGANTI

delivered the opinion of the court:

This case involves a dispute over the proper interpretation of a declaration of condominium ownership. The plaintiff, Kenneth Salvatore, and the defendants, Michael and Marilyn Gelburd, filed cross-motions for summary judgment, arguing contrary interpretations of the same clause of the condominium declaration. The trial court granted the defendants’ motion and the plaintiff appeals.

The plaintiff, Kenneth Salvatore, and the defendants, Michael and Marilyn Gelburd, are owners of adjoining units in a three-unit condominium complex, 1950 North Howe, Chicago, Illinois. During the summer of 1988, the Gelburds built a storage shed on the roof of their unit. By definition of the condominium declaration, a roof is considered a common element of ownership. The Gelburds installed a wooden railing around the roof of the shed and a stairway enabling them to use the shed’s roof as a sun deck. In the fall of 1988 Salvatore complained that chairs and a table on the roof of the shed were being blown about by the wind, causing loud noises to emanate from the roof. On November 1, 1988, the condominium association held a meeting attended by the plaintiff and the defendants. At the meeting, it was agreed that the Gelburds would remove the railing and the stairway and cease using the roof of the shed as a deck. The Gelburds also agreed to inform any subsequent purchasers of their unit that the shed roof was not to be used as a deck.

In November the Gelburds removed the railing and the table and chairs from the shed roof. On January 17, 1989, another association meeting was held. At the meeting, the association voted to ratify the construction of the Gelburds’ rooftop storage shed if they complied with the conditions agreed to at the November 1 meeting. In March of 1989, the Gelburds removed the stairway to the storage shed. In April, the condominium association acknowledged through a letter to the Gelburds that they had complied with the requirements for ratification of their rooftop storage shed.

The plaintiff alleges that under section 4.09(b) of the declaration of condominium ownership for the 1950 North Howe Condominium, the shed constructed by the defendants on their roof is a prohibited alteration which the board is without authority to ratify. The parties filed cross-motions for summary judgment. The trial court granted the defendants’ motion and the plaintiff appeals.

The facts of this case are not disputed. At issue is whether the trial court erred in construing as it did section 4.09(b) of the condominium declaration. Section 4.09(b) reads in pertinent part as follows:

“4.09 Additions, Alterations or Improvements * * *
(b) Except as otherwise provided in Section 7.01(a) hereof, no additions, alterations or improvements shall be made by a Unit Owner to any part of the Common Elements and no additions, alterations or improvements shall be made by a Unit Owner to Ms Unit *** without the prior written consent of the Board. *** If an addition, alteration or improvement is made by a Unit Owner without the prior written consent of the Board, then the Board may, in its discretion, take any of the following actions: * * *
(3) Ratify the action taken by the Unit Owner, and the Board may (but shall not be required to) condition such ratification upon the same conditions which it may impose upon the giving of its prior consent under this Section.” (Emphasis added.)

The plaintiff insists that under a proper reading of section' 4.09(b), the condominium association did not have the authority to ratify the construction of the Gelburds’ rooftop shed. Salvatore refers to the “Doctrine of the Last Antecedent Clause” in arguing that the phrase in the condominium declaration, “"without the prior written consent of the Board,” applies only to the immediate preceding clause “no additions, alterations or improvements shall be made by a Unit Owner to his Unit.” (See Tondre v. Pontiac School District No. 105 (1975), 33 Ill. App. 3d 838, 342 N.E.2d 290.) Therefore, Salvatore maintains, the board may consent only to alterations by a unit owner to the owner’s unit, and not to any alterations to the common elements. Salvatore also argues that a contrary holding renders section 7.01(a) of the declaration redundant and superfluous. Section 7.01(a) is noted in section 4.09(b) as an exception to section 4.09(b). Section 7.01(a) specifies that a common wall between two units owned by the same unit owner may be removed or altered with board approval. Salvatore argues that the situation described in section 7.01(a) is the one and only instance in which the board may approve an alteration to a common element.

The Gelburds contend, and the trial court agreed, that under the terms of the condominium declaration, the board had the authority to ratify the construction of the Gelburds’ rooftop storage shed. Viewing the instrument as a whole, we do not believe that the trial court erred in its interpretation of the condominium declaration. (Shelton v. Andres (1985), 106 Ill. 2d 153, 478 N.E.2d 311.) Throughout the declaration, numerous references are made to the board’s authority and responsibility to administer the property. For example, the board is vested with the authority to adopt and amend such reasonable rules and regulations as it may deem advisable. With respect to the common elements, the board has among other powers the authority to lease or grant licenses, concessions or contracts to any part of the common elements. The board may also consent to obstructions or storage otherwise prohibited in the common elements. In consideration of all its language and provisions, we believe that one of the purposes of the condominium declaration was to give the board broad powers to administer the cooperative aspect of the condominium ownership.

A strict application of the plaintiff’s rules of grammar and construction effect a technically literal construction of section 4.09(b) of the condominium declaration. We are concerned, however, with the natural and obvious import of the language, and not a forced interpretation. (Pennsylvania R.R. Co. v. Chicago, Rock Island & Pacific R.R. Co. (1958), 12 Ill. 2d 574, 147 N.E.2d 363.) In the present case, we believe that the phrases in section 4.09(b), “without the prior written consent of the Board,” and “the Board may *** [rjatify the action taken,” naturally refer to additions, alterations or improvements to common elements as well as unit elements. The language of section 4.09(b) comports with the tenor of the language throughout the condominium declaration which in effect gives overriding powers of administration to the board. Viewing the instrument as a whole, the trial court’s interpretation of section 4.09(b) was fair and reasonable. (Shelton v. Andres (1985), 106 Ill. 2d 153, 478 N.E.2d 311.) For these reasons, the ruling of the trial court is affirmed.

Affirmed.

McMORROW, P.J., and JOHNSON, J., concur.