author: JUSTICE SPITZ

text:
      In re GLENN R. CLICK, a Person Found Subject to Involuntary Admission (The People of the State of Illinois, Petitioner-Appellee, v. Glenn R. Click, Respondent-Appellant).
    Fourth District
    No. 4—89—0671
    Opinion filed April 9, 1990.

      Thomas J. Carlisle and Jeff Plesko, both of Guardianship & Advocacy Commission, of Springfield, for appellant.
    Lawrence R. Fichter, State’s Attorney, of Decatur (Kenneth R. Boyle, Robert J. Biderman, and Gwendolyn W. Klingler, all of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
   JUSTICE SPITZ

delivered the opinion of the court:

Following a hearing, the circuit court of Macon County found respondent to be a person subject to involuntary admission because of his mental illness and the reasonable expectation that he would seriously harm himself or others in the near future. Respondent appeals the court’s order to involuntarily commit him to the Illinois Department of Mental Health and we reverse.

On August 17, 1989, a petition seeking the involuntary admission of respondent, Glenn R. Click, to an Illinois mental health facility by court order, was filed in the circuit court of Macon County. The petition, filed by Lieutenant John Denning of the Macon County sheriff’s department, alleged that respondent was a person subject to involuntary hospitalization, pursuant to the provisions of the Mental Health and Developmental Disabilities Code (Code) (Ill. Rev. Stat. 1987, ch. 911/2, pars. 3—701, 3—601, 4—401). According to the petition, because of mental illness, respondent was reasonably expected to seriously harm someone in the near future. As evidence, the petition alleged that respondent used profanity, spoke loudly, was disrespectful in a prior court proceeding, and was heard to say that he wanted to kill a judge. The court set a hearing date of August 22, 1989.

At the August 22, 1989, hearing, respondent’s court-appointed counsel, David Massey, informed the court of respondent’s desire to proceed without his assistance. The following exchange occurred:

“THE COURT: Mr. Click, is that correct, you do not wish to be represented by Mr. Massey as your appointed counsel?
RESPONDENT: That’s correct, sir.
THE COURT: That’s your free wish to do, is'that correct?
RESPONDENT: I believe it is.
THE COURT: You choose to represent yourself?
RESPONDENT: I choose to.
THE COURT: Well, this is what I will do. I will find you knowingly waive your right to counsel. I will allow you to proceed [sic] as your counsel; however I will order Mr. Massey to remain there at the counsel table and that if you have any questions you can ask him.”

After this, the court told respondent that he could ask the public defender questions if he wished, and then asked respondent if he objected to the court receiving the comprehensive examination and social investigation report into evidence. Respondent did not know if he would object, as he had never seen the report. However, respondent did have a question:

“RESPONDENT: Actually, I’d like to back track. I don’t know what he [the judge] just said. I heard the question. I don’t know what he said. Whether he allowed you [Massey] to remain here to answer my questions.
THE COURT: I said, if you have any questions you can ask Mr. Massey. If you don’t want to ask him any questions, you don’t have to. He is not your attorney any more. You are representing yourself, but he is there to aid you if you have any questions.
RESPONDENT: That’s all you said. You said about 50 more words than that the last time you spoke. That’s what I didn’t comprehend about somebody representing himself in Anna and somebody representing himself as me. I didn’t comprehend that.
THE COURT: That’s not my problem, sir. I’m going to show the Comprehensive — don’t talk any more until I talk to you. I don’t want you to speak out of turn. When I talk I want you to be quiet. You will have a chance to talk, but I’m not having you interrupt me and you are not going to ruin these proceedings. I’m in control and we’re not going to have any problem here today.”

The court then received the comprehensive and social investigation report into evidence and asked the State if it wished to make an opening statement. The State declined and called its first witness, Lieutenant Denning. Denning testified that he observed respondent during court proceedings on two separate occasions. On August 9, 1989, Denning saw respondent come into court on a traffic case. The court dismissed the traffic charges against respondent, causing respondent to become very upset. Respondent wanted to continue with the case, but left the courtroom at the judge’s request. Respondent returned to the courtroom a few minutes later, however, and mentioned that there was a crack in the table that had not been there a few minutes earlier.

The next day, August 10, 1989, Denning once again observed respondent in court. According to Denning, respondent challenged the presiding judge’s authority to hear the case, and used profanity in the courtroom against the judge’s specific orders. The court found respondent in contempt for these actions. Respondent also informed the judge that everything was in the judge’s hands, whether everyone lived, died, or was terminated (or liquidated).

Denning further testified that prior to entering the courtroom on August 10, respondent refused to enter because he felt the air would not be right inside the courtroom, and feared he would drop dead if the air was not right. Once inside the courtroom, defendant left and reentered several times. Denning finally noted that respondent at times stands up, flails his arms about and raises his voice and approaches the person to whom he is talking.

When Denning finished testifying, the court told him to step down and asked the State to call its next witness. The court did not ask respondent if he wished to cross-examine Denning. Neither respondent nor the public defender objected to this procedure.

Next to testify was Norma Mason, a psychiatrist who observed respondent at the Adolf Meyer Mental Health and Development Center (Meyer) in Decatur, Illinois. Respondent told Dr. Mason during their first session that judges need to be in prison, for they were the guilty ones, not he. Respondent also asked Mason how she would like it if he hit her on the side of her head. Dr. Mason testified that she believed respondent would have hit her if security personnel had not been present.

The second time Mason interviewed respondent, she wanted to discuss a recent incident in'which respondent pushed a nurse down to the floor, injuring the nurse and breaking her glasses. Respondent felt justified in his action, for he thought the nurse treated him unfairly, pulling his hair and directing him into the quiet room.

Dr. Mason further testified that respondent has a history of several hospitalizations, the most recent of which was a 13-month stay at the Chester Mental Health Center. Respondent was released from the Chester center in 1988. It was Dr. Mason’s diagnosis that respondent suffers from schizophrenia, but fails to realize that he is suffering from a mental illness. Respondent improves somewhat when he takes medication, but does not particularly like to take it.

Finally, it was Dr. Mason’s opinion that respondent could be expected to inflict serious physical harm upon himself and others. Respondent is extremely suspicious of staff and surroundings at the center and had inflicted serious physical harm to the nurse and threatened Dr. Mason on two occasions. Dr. Mason recommended that respondent be committed to the Department of Mental Health in an environment more secure than the Meyer center.

After Dr. Mason finished testifying, the court told her to step down and asked the State if any other evidence would be presented. The State had no further evidence. Once again, the court did not ask respondent whether he wished to cross-examine Dr. Mason, and neither respondent nor Massey objected to the procedure.

The State rested its case, and the court asked respondent if he wished to testify. Respondent testified and denied that he was subject to involuntary commitment. Respondent’s testimony rambles for 21k pages of record and, in it, respondent made the following observations: (1) during Dr. Mason’s testimony, he measured to see whether she could hear his thoughts; (2) Dr. Mason failed to perceive that she could hear his thoughts; (3) the staff at the Meyer center attempted to make respondent believe he was God; (4) the law enforcement agency in Decatur, Illinois, is a gas chamber; and (5) respondent had survived getting gassed several times.

The court interrupted respondent’s testimony and asked if he wished to present any other witnesses. Respondent did have someone from “Unit E” who would testify, but the court disallowed it, as that person was not present. The court then asked the State for a closing argument and thereafter found that the State had proved the allegations by clear and convincing evidence. The court ordered respondent involuntarily admitted, and stated: f

“It is ordered he be hospitalized in the Department of Mental Health and Developmental Disabilities. I will specifically put in the order that this includes the Chester Institution because I do not believe Adolf Meyer is strong enough to hold this individual.”

Following the court’s order, the public defender notified the court that respondent had asked him to appeal the decision. The court later mentioned the Chester facility in its order for treatment of discharge and in a typed entry on the record sheet.

On appeal, respondent argues that the trial court erred (1) in failing to exercise the proper discretion when it allowed him to represent himself at his own mental health hearing; (2) in denying him the opportunity to cross-examine the State’s witnesses; (3) in finding clear and convincing evidence that he was currently a danger to himself or others; and (4) in noting the Chester facility in its orders subjecting him to involuntary commitment. We agree with respondent as to his first two contentions and accordingly reverse the trial court.

Respondent first argues that the trial court failed to exercise proper discretion in allowing him to proceed pro se at his own mental health hearing. The State replies that there was no error, as respondent never waived his right to counsel and had a court-appointed attorney with him throughout the hearing.

The Code provides that every respondent alleged to be subject to involuntary admission shall be represented by counsel. (Ill. Rev. Stat. 1987, ch. 911/2, par. 3—805.) The respondent may, however, ask the court to waive this statutory right. The right to counsel in such a mental health hearing is mandatory, but a waiver of the right is within the court’s discretion. City of Chicago v. Groffman (1976), 42 Ill. App. 3d 139, 354 N.E.2d 572.

A respondent who wishes to represent himself at his own mental health hearing must first confer with counsel, and then request to proceed pro se. To grant such request, the court must be satisfied that respondent has the capacity to make an informed waiver of his right to counsel. (Ill. Rev. Stat. 1987, ch. 911/2, par. 3—805.) At issue here is whether respondent waived the right to counsel and, if so, whether the court abused its discretion in finding respondent to have the capacity to make an informed waiver.

The State argues that respondent never waived his right to counsel because his court-appointed attorney remained with him throughout the hearing. The State relies on a procedure used by a First District Appellate Court in In re Tuntland (1979), 71 Ill. App. 3d 523, 390 N.E.2d 11. Tuntland is much like the present case in that the respondent wished to proceed pro se at his mental health hearing for involuntary commitment. The circuit court in Tuntland told the respondent that he had the right to represent himself, but that the court would also appoint a public defender to guide him. The public defender was only to guide respondent as to what he ought to do relative to objections and other matters of procedure. The respondent acknowledged that he understood this.

During the hearing, the respondent in Tuntland vigorously cross-examined the State’s witnesses and was quick to interrupt the direct testimony of the State’s witnesses with objections. Furthermore, the respondent’s appointed counsel made an objection and stipulated to certain portions of evidence. The appellate court, after considering the entire record as a whole, determined that the respondent had received the effective assistance of counsel.

The State also cites the procedure used in In re Boswell (1978), 62 Ill. App. 3d 1033, 379 N.E.2d 658. In Boswell, respondent informed the court of his desire to represent himself at his hearing for involuntary commitment. However, respondent also wanted the public defender to remain at the hearing and act in a guidance capacity only. The court allowed respondent to proceed as requested. On appeal, respondent contended that he did not effectively waive his right to counsel. The appellate court disagreed and stated that respondent sought the “best of both worlds: freedom to conduct his own defense and benefit from the assistance of counsel.” (Boswell, 62 Ill. App. 3d at 1034, 379 N.E.2d at 659.) Thus, respondent’s right to counsel was never waived.

The State finally notes two criminal cases where defendants wished to represent themselves, but trial courts ordered public defenders to remain as advisors. (People v. Bryant (1983), 115 Ill. App. 3d 215, 450 N.E.2d 744; People v. Smith (1985), 133 Ill. App. 3d 574, 479 N.E.2d 24.) In both cases, the appellate courts held that defendants had not waived their right to counsel.

As the State points out, a number of cases have held that when a defendant proceeds to trial with the “technical assistance of counsel,” he has not waived counsel and a court need not inquire as to defendant’s capacity to make an informed waiver. The reason for this is that a defendant who seeks to conduct his own defense with the advice of counsel “partakes of the freedom of defending himself in addition to the expertise of an advisor with legal training.” (People v. Hite (1983), 115 Ill. App. 3d 66, 69, 450 N.E.2d 416, 418.) However, in certain circumstances, courts have ordered new trials or vacated judgment where defendants have conducted their own defense with a court-appointed attorney acting as standby counsel. (People v. Derra (1981), 92 Ill. App. 3d 1106, 416 N.E.2d 688; People v. Brown (1980), 80 Ill. App. 3d 616, 399 N.E.2d 1374; In re Moore (1978), 63 Ill. App. 3d 899, 380 N.E.2d 917.) In these cases, the participation of the public defender was minimal. Hite, 115 Ill. App. 3d at 70, 450 N.E.2d at 418.

In Derra, a fourth district opinion, a criminal defendant requested a public defender. Later, at the hearing, the defendant expressed the desire to represent himself. The court ascertained that the defendant was 18 years old, had a ninth-grade education, and understood the charges against him. The court then asked the defendant if he was aware that he might not be well equipped to proceed without an attorney. Defendant replied that he understood. The court then allowed the defendant to represent himself, but ordered the public defender to remain in an advisory capacity.

During the trial, the defendant cross-examined the arresting officer very poorly, testified very poorly, and declined to make a closing argument. The public defender remained virtually silent throughout the proceeding.

On appeal, the defendant in Derra claimed that he had not effectively waived counsel. The State argued, as the State in the instant case argues, that there was no waiver of counsel because the public defender was appointed in an advisory capacity. But, as this court noted, the apparent logic of the State’s argument was that the defendant actually received the assistance of counsel. This court further noted that unlike other cases wherein courts have found no waiver of counsel, the defendant in Derra did not request the assistance of the public defender. Moreover, the public defender in Derra was virtually silent during the proceeding. The court concluded that respondent was not attempting to have “the best of both worlds,” as the respondent in Boswell. Thus, although the public defender was appointed in an advisory capacity, this court held that the defendant had waived the right to counsel and had proceeded without the assistance of counsel. See also Brown, 80 Ill. App. 3d 616, 399 N.E.2d 1374 (inactive standby appointment did not provide defendant with adequate assistance of counsel where standby counsel remained silent during proceedings until moving for a mistrial following the State’s case in chief); Moore, 63 Ill. App. 3d 899, 380 N.E.2d 917 (a factor in vacating judgment in a mental health hearing was that respondent did not ask for the public defender to remain and assist him).

It should also be noted that the trial court in the instant case relied on a procedure used in People v. Hanna (1987), 155 Ill. App. 3d 805, 508 N.E.2d 765, in ordering the public defender to remain in an advisory capacity. (Hanna, 155 Ill. App. 3d 805, 508 N.E.2d 765.) In Hanna, the defendant wished to proceed pro se, but the court ordered the public defender to remain in an advisory capacity. Hanna differs from the present case in that the defendant in Hanna acknowledged he understood the public defender would assist him. Moreover, both the defendant and public defender in Hanna were active in putting on a defense.

The cases cited present factors which courts have used to determine whether a defendant or respondent has waived the right to counsel and has proceeded without the assistance of counsel. These factors include (1) whether respondent asked for counsel to remain and assist him; (2) whether respondent incompetently or vigorously defended himself; and (3) whether the public defender was silent during the hearing or assisted respondent in a meaningful way. Applying these three factors to the instant case, it appears that, contrary to the State’s argument, respondent did waive the right to counsel and proceeded through the hearing without the assistance of counsel. Respondent did not ask the court for the public defender’s assistance, and the record shows that respondent failed to put on any defense other than a rambling oration. The record further shows that the public defender remained silent during the entire hearing, neither objecting to the court’s procedure nor assisting respondent in any manner.

Statements by the trial court also reveal that respondent waived the right to counsel, most obvious of which is the court’s statement: “I will find you knowingly waive your right to counsel.” The court later told respondent that the public defender was no longer his attorney.

Because we find that respondent waived the right to counsel, we must determine whether the court abused its discretion in finding respondent to have the capacity to make an informed waiver of counsel pursuant to section 3 — 805 of the Code. In reviewing the court’s decision, we are aware that because a trial court is in a better position to weigh the evidence, its determination should not be reversed unless it is manifestly erroneous. (In re Cutsinger (1989), 186 Ill. App. 3d 219, 542 N.E.2d 414.) However, we agree with respondent that the court abused its discretion in finding a knowing waiver of counsel.

While it is clear that the trial court found respondent to have waived the right to counsel, the court did little to determine respondent’s capacity to make such a decision. The record shows that the court’s inquiry was limited to three questions, basically the same, asking respondent if he wished to represent himself. No preliminary questions were posed to respondent concerning his mental ability or intelligence, or even as to his understanding of the basic purpose of counsel. Even though respondent was confused by the court’s statements concerning the waiver of counsel, the court simply repeated the procedure once, and then apparently became irritated and refused to answer any more questions. The very nature of the hearing, respondent’s confusion, and respondent’s actions during the hearing should have made the court question whether respondent had the capacity to make an informed waiver of counsel. We conclude he did not.

Respondent next contends that the trial court improperly denied him the opportunity to cross-examine the State’s witnesses in the mental health proceeding. We agree. After each of the State’s witnesses finished testifying, the State informed the court that it was through with the witness. The court subsequently thanked each witness and told him to step down. The court did not ask respondent if he wished to cross-examine either witness. Moreover, the record fails to reflect a pause in the proceedings where the court might have waited for respondent to cross-examine the witnesses.

Involuntary commitment hearings conducted pursuant to the provisions of the Code are subject to the Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 1—101 et seq.). (See, e.g., Ill. Rev. Stat. 1987, ch. 911/2, par. 3—802 (right to jury); In re Stephenson (1977), 67 Ill. 2d 544, 367 N.E.2d 1273.) While there may be no constitutional right to cross-examine witnesses as in criminal cases, cross-examination is generally a matter of right in all cases. Alford v. United States (1931), 282 U.S. 687, 75 L. Ed. 624, 51 S. Ct. 218; Grundy County National Bank v. Myre (1975), 34 Ill. App. 3d 287, 339 N.E.2d 348.

A trial court has special obligations with respect to a pro se litigant because of such a litigant’s lack of knowledge of the procedural and substantive requirements of the legal structure. (Caruth v. Pinkney (7th Cir. 1982), 683 F.2d 1044.) The record is clear that the court failed to assist respondent by either asking him if he wished to cross-examine the witnesses, or by waiting for respondent to cross-examine the witnesses.

We find the court’s failure to even offer respondent a chance to cross-examine the State’s witnesses is similar to the facts set out in Boswell. In Boswell, after the State presented its case, the trial court found the respondent in need of hospitalization. The court never asked respondent if he wished to present a defense. In reversing this decision, the appellate court found that the trial court improperly denied the respondent the opportunity to present a defense. The court noted no manifestation of respondent’s intent to waive the opportunity to present a defense and further noted that if respondent had visually indicated a desire not to present a defense, the trial judge should have stated for the record that respondent or his counsel did so.

The State responds by arguing that the record does not show the court prevented respondent’s cross-examination of witnesses. The State contends that absent from the transcript is both the lapse of time before the court told the witnesses to step down and any nonverbal expression or gesture by respondent indicating that he did not wish to cross-examine the witnesses. The State’s argument, however, fails under Boswell. If there was any pause, or nonverbal expression, the trial court should have noted it in the record. In attempting to distinguish Boswell, the State argues that the court here asked respondent if he wanted to testify or bring in any other witness. While this is true, it does not negate the fact that the court failed to offer respondent the opportunity to cross-examine the State’s witnesses.

The State further contends that the decision whether to cross-examine a witness is a tactical decision (People v. Hopkins (1987), 160 Ill. App. 3d 967, 513 N.E.2d 1011), and that respondent’s and the public defender’s decision not to cross-examine the witnesses was a tactical decision. The State cites a fourth district case in which respondent’s appeal claiming ineffective assistance of counsel by his attorney’s failure to cross-examine the State’s witness was rejected. (In re Peterson (1983), 113 Ill. App. 3d 77, 446 N.E.2d 565.) This court in Peterson found that counsel may have decided that because of the weight of evidence presented, cross-examination would only strengthen the State’s case. Peterson is readily distinguishable from the instant case, however, as the respondent in Peterson had the benefit of counsel to make such a decision.

The State’s argument rests upon the assumption that respondent did not waive the right to counsel and that he was in fact assisted by counsel during the hearing. As noted above, however, although respondent did waive the right to counsel, he did not make a knowing waiver, and he did not have the assistance of counsel during the hearing. It also seems clear from the record, and from Boswell, that there is no indication respondent waived the right to cross-examine the State’s witnesses, or even knew that he could have cross-examined the witnesses. We therefore conclude the court improperly denied respondent the opportunity to cross-examine the State’s witnesses.

Because we reverse on the first two issues, we need not fully discuss respondent’s remaining contentions in detail. We do, however, note that the trial court correctly found clear and convincing evidence that defendant was currently a danger to himself and others, and did not err in mentioning the Chester facility on its orders. Accordingly, the Macon County circuit court is reversed and cause remanded.

Reversed and remanded.

LUND and McCULLOUGH, JJ., concur.


source: Caselaw Access Project

author: JUSTICE DiVITO

license: Public Domain

text:
    ANTHONY R. GOLD et al., Plaintiffs-Appellees, v. ZIFF COMMUNICATIONS COMPANY, d/b/a Ziff-Davis Publishing Company, Defendant-Appellant.
    First District (2nd Division)
    No. 1—89—0082
    Opinion filed September 26, 1989.

      Francis J. Higgins, John J. Verscaj, and Kenneth E. Rechtoris, all of Bell, Boyd & Lloyd, of Chicago, for appellant.
    Dan K. Webb and Calvin Sawyier, both of Winston & Strawn, of Chicago, for appellees.
   JUSTICE DiVITO

delivered the opinion of the court:

Defendant, Ziff Communications Company, doing business as ZiffDavis Publishing Company, appeals the circuit court’s grant of a preliminary injunction requiring it to accept the reduced rate advertisements of plaintiff, PC Brand, Inc. (PC Brand). The issues presented are whether the circuit court erred in: (1) granting a mandatory preliminary injunction; (2) finding that plaintiffs would suffer irreparable harm in the absence of a preliminary injunction; and (3) granting the preliminary injunction despite the contention that plaintiffs failed to show that their threatened harm outweighed defendant’s actual harm.

Defendant publishes, among other magazines, PC Magazine, PC Tech Journal, and PC Week (collectively, PC Publications). PC Magazine is a publication targeted at individuals and entities generally interested in, or in the market for, computer hardware and software products.

Plaintiff Anthony R Gold (Gold) founded PC Magazine in October 1981. In November 1982, the corporate predecessor of defendant entered into various agreements with Gold whereby defendant obtained ownership and control from Gold of the corporation that owned PC Magazine. As consideration for the sale, Gold received a cash down payment, the right to installment payments tied to revenue, and the right to purchase a defined number of advertising pages in PC Magazine at a reduced percentage of the advertising fee published by defendant on its “rate cards,” i.e., the rates at which defendant offered to sell advertising space to advertisers generally.

On September 15, 1986, defendant and Gold entered into an amended agreement, which restated and superseded the original agreement concerning reduced advertising fees. The amended agreement provided that through December 31, 1992, Gold was permitted to purchase a limited amount of advertising space in defendant’s PC Publications, equal to the average number of ad pages used by each of the four largest advertisers in the preceding six issues, at a reduced rate that is 23.5% of defendant’s “then current rate card” fees. The amended agreement contained no specific provision concerning the page placement of advertisements purchased by Gold; however, the practice was that Gold was given prime space position, in the first part of the magazine, similar to the space provisions given to PC Magazine’s four largest advertisers.

The amended agreement further provided that Gold could use the advertising pages personally or “by a company which Gold controlled] (that is, in which [Gold] own[ed] at least 51% of the voting stock),” but this right could not be assigned, transferred or allocated to any other person or entity.

In January 1988, Gold and Stephen Dukker (Dukker) formed PC Brand, which was in the business of selling clone IBM personal computers by mail. Gold was the owner of 90% of the outstanding shares of PC Brand, while Dukker held the remaining 10% interest. Various interrelated agreements were entered into between Gold, Dukker, and PC Brand, including an “Assignment of Advertising Rights Agreement” in which Gold assigned the right to reduced advertising fees in PC Magazine to PC Brand. That agreement further provided that if PC Brand profited financially, those corporate monies saved from the discount rate, with a 25% pretax net income cap, would be paid to Gold.

In May 1988, PC Brand became operational and commenced placing advertisements in PC Publications at the reduced rate. In approximately August or September 1988, defendant first obtained copies of the assignment of advertising rights agreement; the shareholder agreement of Gold, Dukker and PC Brand; and the employment agreement between Dukker and PC Brand. After analysis of the agreements, defendant concluded that Gold possessed nominal, but not real, ownership of 90% of PC Brand’s voting stock and that Dukker was vested with actual voting control of the company. Reasoning that Gold did not really own at least 51% of the voting stock of PC Brand and that Gold’s rights to reduced advertising rates under the amended agreement were nonassignable “personal rights,” defendant concluded that PC Brand was not entitled to the reduced advertising rates. On November 8, 1988, defendant notified Gold and PC Brand, by letter, of its conclusions and its intent not to honor the advertising rights under the amended agreement.

On December 6, 1988, plaintiffs filed an action for declaratory judgment, injunction, and damages. On the same date, notice of a hearing on plaintiffs’ motion for a temporary restraining order and preliminary injunction was given to defendant. On December 9, 1988, plaintiffs filed their motion for a temporary restraining order and preliminary injunction, including Gold’s affidavit; defendant filed a verified answer, denying the allegations of the complaint, and a counterclaim; and a hearing was held. The primary issue was whether plaintiffs would suffer irreparable harm if defendant did not continue to advertise plaintiffs’ products in PC Magazine. Defendant did not contest the issue of whether plaintiffs were likely to succeed on the merits.

At the hearing, Dukker testified that PC Brand had been formed to take advantage of the discounted advertising rate and that the operation of PC Brand was structured around the advertising discount which Gold obtained. Dukker testified that PC Brand’s pricing, personnel, service, and credit standing were dependent upon its ability, as a new mail order house for PC computerware, to run multipage ads in PC Magazine. According to Dukker, PC Brand, so structured and operated, could be successful even though it was then operating at a loss. Cross-examination of Dukker developed specific book account figures of PC Brand’s monthly sales and profits.

Pointing out that the difference between the full and discounted rate was $42,000 per issue, or $84,000 per month, Dukker testified that PC Brand would probably be forced out of business were it not able to advertise at the discount rate for even one month, in the only magazine of any consequence in the personal computer field. He testified that there was a “significant possibility” that he would leave PC Brand if the company was required to pay the full rate card rate and that his expertise would then be lost to PC Brand.

The affidavit of Gold, which was corroborative of Dukker’s testimony, was admitted into evidence at the hearing on the preliminary injunction. Both Gold and Malcolm Morris, vice-president and deputy general counsel for defendant, were present in court during the entire hearing, but neither was called to testify. At oral argument, counsel for PC Brand pointed out that all the financial records and contracts affecting PC Brand had been brought to court on the hearing date so that they were available to defendant for cross-examination purposes.

At the conclusion of the hearing, the circuit court entered a preliminary injunction in favor of plaintiffs and enjoined defendant from refusing to run PC Brand’s advertisements in PC Magazine at the reduced rate provided in the amended agreement. The court held that irreparable injury to plaintiff was likely and therefore a preliminary injunction should issue to maintain the status quo. Counsel for the parties then agreed that they would draft and agree on the form of the order, which would then be presented to the circuit court.

The order, entered December 13, 1988, embodied what both parties accepted as a reasonable description of the advertisements which PC Brand had been allowed to run at a discount up until the time of the disagreement. The order required defendant to run “six consecutive four-color page ads organized as three consecutive two-page spreads to start on a left hand page beginning no farther back than page 222 the beginning of said ads to start on an average of page 185.” No cash bond was required, but, in lieu thereof, the order, incorporating the suggestion from defendant’s counsel made at the hearing, granted defendant a lien on any amounts which might become payable to Gold under his agreements with Dukker and PC Brand. No such amounts were payable for the fiscal year ending December 31, 1988, and, according to Dukker’s testimony, none will become payable until April 1990 at the earliest.

On January 12, 1989, defendant appealed to this court, arguing that the circuit court abused its discretion in granting the preliminary injunction. For the following reasons, we affirm.

I

Defendant first asserts that the circuit court abused its discretion in ordering a “mandatory” preliminary injunction.

The issuance or denial of a preliminary injunction is within the trial court’s sound discretion, and its findings will not be disturbed unless they are against the manifest weight of the evidence. The Instrumentalist Co. v. Band, Inc. (1985), 134 Ill. App. 3d 884, 891, 480 N.E.2d 1273, citing Booth v. Greber (1977), 48 Ill. App. 3d 213, 217-18, 363 N.E.2d 6.

The purpose of a preliminary injunction is to “preserve the status quo until the case can be decided on the merits. [Citations.]” (Prentice Medical Corp. v. Todd (1986), 145 Ill. App. 3d 692, 697, 495 N.E.2d 1044, quoting Buzz Barton & Associates, Inc. v. Giannone (1985), 108 Ill. 2d 373, 382, 483 N.E.2d 1271.) A preliminary injunction is an extraordinary remedy which should be granted only pursuant to the utmost care and should not issue unless the need is clear. Donald McElroy, Inc. v. Delaney (1979), 72 Ill. App. 3d 285, 291, 389 N.E.2d 1300; Mars, Inc. v. Curtiss Candy Co. (1972), 8 Ill. App. 3d 338, 344, 290 N.E.2d 701.

In order to establish entitlement to preliminary injunctive relief, the plaintiff must demonstrate:

“(1) that he possesses a clearly ascertained right which needs protection, (2) that he will suffer irreparable harm without the injunction, (3) that there is no adequate remedy at law for his injury, and (4) that he is likely to be successful on the merits of his action.” (Shodeen v. Chicago Title & Trust Co. (1987), 162 Ill. App. 3d 667, 672, 515 N.E.2d 1339, citing Levitt Homes, Inc. v. Old Farm Homeowners’ Association (1982), 111 Ill. App. 3d 300, 307, 444 N.E.2d 194.)

Once the plaintiff establishes these elements, absent a clear showing that the trial court abused its discretion, the circuit court order cannot be overturned. Sports Unlimited, Inc. v. Scotch & Sirloin, Inc. (1978), 58 Ill. App. 3d 579, 584, 374 N.E.2d 916, citing Shaper v. Roettger (1976), 36 Ill. App. 3d 452, 343 N.E.2d 694.

A preliminary injunction does not anticipate or depend upon the ultimate conclusion to be reached upon the rights involved in the litigation. (Rosinia v. Gusmano (1980), 90 Ill. App. 3d 882, 886, 414 N.E.2d 1253.) The granting of a preliminary injunction shows only that a sufficient case has been presented to preserve the property or rights in issue in status quo until a final hearing upon the merits can be held. (Kaplan v. Kaplan (1981), 98 Ill. App. 3d 136, 141, 423 N.E.2d 1253.) The term “status quo” is defined as “the last, actual, peaceable, uncontested status which preceded the pending controversy.” Grillo v. Sidney Wanzer & Sons, Inc. (1975), 26 Ill. App. 3d 1007, 1011, 326 N.E.2d 180; Shodeen v. Chicago Title & Trust Co. (1987), 162 Ill. App. 3d 667, 672, 515 N.E.2d 1339.

In general, a mandatory preliminary injunction (or specific performance) is not favored by the courts and the only justification for such relief is to maintain the status quo where necessary to prevent irreparable injury. (Halvorsen v. Richter (1976), 37 Ill. App. 3d 344, 345 N.E.2d 220.) A mandatory injunction should not be issued when it would not preserve the status quo, but would instead alter it. (S & F Corp. v. American Express Co. (1978), 60 Ill. App. 3d 824, 377 N.E.2d 73.) Because there is sound judicial skepticism concerning the need for a mandatory injunction, the court must find that there exists “great necessity” and the need for such relief must be free from doubt to justify it. Ambassador Foods Corp. v. Montgomery Ward & Co. (1963), 43 Ill. App. 2d 100, 105, 192 N.E.2d 572.

Defendant’s argument against the grant of a mandatory injunction in this case is unpersuasive. A preliminary injunction, even if mandatory, is justified if necessary to maintain the status quo and prevent irreparable harm. (Comprehensive Accounting Service Co. v. Shifo (1980), 89 Ill. App. 3d 834, 838-39, 412 N.E.2d 556.) Usually the status quo is maintained by keeping everything at rest and in its present condition. Sometimes, however, the status quo is not a condition of rest but of action because the condition of rest is exactly what will inflict irreparable injury upon complainant. Scholz v. Barbee (1951), 344 Ill. App. 630, 637-38, 101 N.E.2d 845.

Defendant cites numerous cases in support of its argument that because, in this case, defendant was ordered to perform a specific action, a mandatory injunction was improperly imposed by the circuit court. However, none of the cases cited by defendant involved existing contracts to which the parties were adhering at the time of the controversy. Indeed, in some cases cited by defendant, no contract existed between the parties, and yet the trial court ordered the parties to act, which resulted in the wrongful granting of a mandatory injunction. In those cases, the reviewing courts emphasized that courts are not empowered to order anything beyond the maintenance of the status quo. (See, e.g., Ambassador Foods Corp. v. Montgomery Ward & Co., 43 Ill. App. 2d 100, 192 N.E.2d 572; Amber Automotive, Inc. v. Illinois Bell Telephone Co. (1973), 15 Ill. App. 3d 769, 305 N.E.2d 270; S & F Corp. v. American Express Co., 60 Ill. App. 3d 824, 377 N.E.2d 73.) In this case, however, plaintiff seeks merely a continuation of the contract between Gold and defendant, not a creation of a new contractual relationship.

Here, the status of the case, before the present controversy, was that PC Brand was permitted to advertise in PC Magazine, in the manner and for the price set forth by the amended agreement. This status was actual, peaceable, and uncontested since it arose from the agreement between Gold and defendant. Moreover, PC Brand advertisements in PC Magazine had not ceased at the time of the controversy, and in fact, layouts for future advertising were set for at least two months ahead. Therefore, the circuit court neither reinstated a lapsed contract nor created a new one. It merely required that, to preserve the status quo until the case is resolved on its merits, PC Brand’s current practice of advertising in PC Magazine was to continue. We conclude that the action by the circuit court was proper.

II

Next, defendant contends that plaintiffs failed to prove that they would suffer irreparable harm in the absence of a preliminary injunction.

It is a movant’s burden to establish each of the necessary elements for the issuance of injunctive relief. (Lake Shore Club v. Lakefront Realty Corp. (1979), 79 Ill. App. 3d 918, 927, 398 N.E.2d 893; Fox Valley Harvestore, Inc. v. A.O. Smith Harvestore Products, Inc. (7th Cir. 1976), 545 F.2d 1096, 1097.) When defendant files a verified answer denying material allegations of the complaint, a preliminary injunction may not issue on the pleadings, but a hearing on factual matters must be conducted and evidence must be taken before the injunction may issue. Summit Electric Co. v. Mayrent (1974), 17 Ill. App. 3d 545, 551, 308 N.E.2d 313; Centennial Laundry Co. v. West Side Organization (1965), 55 Ill. App. 2d 406, 414, 204 N.E.2d 589.

In this case, a full hearing was held. However, defendant maintains that the circuit court erred in granting a preliminary injunction based on mere speculation about future harm. (Allstate Amusement Co. of Illinois, Inc. v. Pasinato (1981), 96 Ill. App. 3d 306, 309, 421 N.E.2d 374.) Relying principally upon New York cases, defendant argues that the oral testimony did not establish that plaintiffs would suffer irreparable harm absent concrete proof and financial data showing that the possibility of harm was more than mere speculation. USA Network v. Jones Intercable, Inc. (S.D.N.Y. 1989), 704 F. Supp. 488; Benjamin Kurzban & Son, Inc. v. Board of Education (1987), 129 A.D.2d 756, 514 N.Y.S.2d 749.

However, in the instant case, a hearing concerning the issue of irreparable harm, during which the merits of the case were specifically not addressed pursuant to the agreement of the parties, was held. During the hearing, Dukker testified regarding the financial status of PC Brand. Defendant was afforded opportunity to cross-examine Dukker and to present evidence contradicting Dukker and Gold; it provided no contradictory evidence. Where evidence is uncontradicted and is not inherently unbelievable, a finding contrary to that evidence cannot stand. (Kelly v. Jones (1919), 290 Ill. 375, 378, 125 N.E. 334.) Disbelief of oral testimony cannot support an affirmative finding that the reverse of that testimony is true, that is, it cannot supply a want of proof. Bankers Life & Casualty Co. v. Guarantee Reserve Life Insurance Co. (7th Cir. 1966), 365 F.2d 28, 34, citing Moore v. Chesapeake & Ohio Ry. Co. (1951), 340 U.S. 573, 576, 95 L. Ed. 547, 550, 71 S. Ct. 428, 430.

Defendant cites American Brands, Inc. v. Playgirl, Inc. (2d Cir. 1974), 498 F.2d 947, arguing that it is analogous to the instant case and that the circuit court here should have denied the preliminary injunction based on a lack of evidence of irreparable harm. In that case, the plaintiff sought a continuation of an advertisement on the back page of the defendant’s magazine. The Second Circuit affirmed the trial court’s denial of injunctive relief because plaintiffs did not show that Playgirl was in fact unique, that other markets were not available, and that absent the issuance of a preliminary injunction, plaintiffs would suffer irreparable harm. American Brands, Inc. v. Playgirl, Inc., 498 F.2d at 950.

However, American Brands is clearly distinguishable from this case. PC Brand is a much smaller company than American Brands, Inc., a tobacco company, and its target market is more limited. PC Brand is a mail order computer company, whose only clients come from its magazine advertisements, which include mail and telephone order forms. In contrast, American Brands, Inc.’s advertising targets are much more diverse. Moreover, the tobacco company was not structured around an advertising and discount scheme as was PC Brand, and it would not have suffered irreparable injury nor been put out of business due to the absence of one advertising vehicle. See USA Network v. Jones Intercable, Inc., 704 F. Supp. 488 (absent clear financial data, the court could not draw an inference that USA Network, a nationwide company, would cease to operate merely because a small local cable company terminated its contract).

A demonstration of irreparable harm is related to the proof of a legitimate business interest. (Gannett Outdoor v. Baise (1987), 163 Ill. App. 3d 717, 722, 516 N.E.2d 915.) The failure of plaintiff to show an actual loss is not dispositive of the issue of whether a preliminary injunction is appropriate. The court must look to the entire record to determine if irreparable harm would occur absent a preliminary injunction. (Associates for Oral Surgery, Ltd. v. Associates for Oral & Maxillofacial Surgery, Ltd. (1976), 39 Ill. App. 3d 73, 77, 350 N.E.2d 109.) The loss of customers and sales and the threat of continuation of such losses to a legitimate business interest, as alleged by plaintiff here, is sufficient to show that plaintiff will suffer irreparable injury unless protected. (See, e.g., Eagle Books, Inc. v. Jones (1985), 130 Ill. App. 3d 407, 411, 474 N.E.2d 444, cert. denied (1985), 474 U.S. 920, 88 L. Ed. 2d 257, 106 S. Ct. 249; U-Haul Co. v. Hindahl (1980), 90 Ill. App. 3d 572, 413 N.E.2d 187; Office Electronics, Inc. v. Grafic Forms, Inc. (1978), 56 Ill. App. 3d 395, 372 N.E.2d 125.) While immediate damages in loss of sales may be calculable, the potential loss of future business is incapable of adequate computation (U-Haul Co. v. Hindahl, 90 Ill. App. 3d 572, 413 N.E.2d 187), and a preliminary injunction may be granted when it is difficult to quantify the damages caused by the loss of future customers and revenues. Eagle Books v. Jones, 130 Ill. App. 3d 407, 411, 474 N.E.2d 444, cert. denied (1985), 474 U.S. 920, 88 L. Ed. 2d 257, 106 S. Ct. 249.

The foregoing standards were applied by the circuit court when it determined that, for purposes of preliminary injunctive relief, irreparable harm does not have to be devastating harm, or harm that is beyond repair, or even harm in which the injury is great. As the circuit court noted, harm sufficient to justify issuance of a preliminary injunction is harm that would have such an effect that no redress or compensation can be had at law. (Sports Unlimited, Inc. v. Scotch & Sirloin, Inc. (1978), 58 Ill. App. 3d 579, 583, 374 N.E.2d 916; General Electric Co. v. Local 997 (1955), 8 Ill. App. 2d 154, 164, 130 N.E.2d 758.) Action by a party which will ultimately result in putting another party out of business constitutes irreparable harm which justifies a preliminary injunction. Machlett Laboratories v. Techny Industries (7th Cir. 1981), 665 F.2d 795, 798.

The circuit court determined that PC Brand would cease to operate if it were not able to continue advertising in PC Magazine and that there was more than mere speculation (Allstate Amusement Co. of Illinois, Inc. v. Pasinato (1981), 96 Ill. App. 3d 306, 309, 421 N.E.2d 374) that plaintiffs would suffer irreparable injury were they not afforded the advertising privileges under the contract. Since the contract between defendant and Gold allowed a company in which Gold owned at least 51% of the voting stock to advertise at the reduced rate and since there was evidence that Gold owned 90% of the voting stock of PC Brand, the findings of the circuit court were justified.

Based on the financial information provided and the testimony before it, the circuit court held that PC Brand’s loss of business was highly likely, that it would dissolve were it not able to advertise in the manner contemplated in its very structure, that the harm caused would be irreparable, and that no remedy at law could cure the effects of a denial of the injunction. It was not improper for the court to conclude from the evidence, despite the absence of spread sheets “or concrete data,” that PC Brand would suffer irreparable harm. The circuit court’s holding will not be reversed since it is not palpably contrary to the manifest weight of the evidence. Revcor, Inc. v. Fame, Inc. (1967), 85 Ill. App. 2d 350, 356-57, 228 N.E.2d 742.

III

Finally, defendant argues that the circuit court abused its discretion in failing to balance the equities, because the threat of harm to plaintiffs is outweighed by the “substantial actual harm which will be suffered by defendant as a result of the mandatory injunction” and because the lien provided on any payments of PC Brand to Gold is totally inadequate security for defendant’s losses.

We disagree. A consideration of whether the burden upon the defendant outweighs the benefit to the plaintiff in the issuance of an injunction is “inapplicable where defendant’s actions were done with full knowledge of the plaintiff’s rights and with an understanding of the consequences which might ensue.” (ABC Trans National Transport, Inc. v. Aeronautics Forwarders, Inc. (1978), 62 Ill. App. 3d 671, 682, 379 N.E.2d 1228.) Here, defendant agreed that Gold could establish other entities and still receive the benefit of the bargained-for contract. Defendant knew that Gold might set up corporate entities to take advantage of the advertising discounts, and in fact, PC Brand was structured so as to take advantage of the reduced advertising rate. Therefore, a balancing of the equities in this case is not supportive of defendant’s contentions.

Regarding defendant’s assertion that the circuit court erred in imposing a lien under the preliminary injunction without adequate security, the very requirement of bond is within the discretion of the circuit court. (Scholz v. Barbee (1951), 344 Ill. App. 630, 641-42, 101 N.E.2d 845.) When imposition of bond would be an undue hardship on plaintiff in a preliminary injunction, it is not an abuse of discretion not to order the imposition of bond. (See Ill. Rev. Stat. 1985, ch. 110, par. 11-103; Mitchell v. Mitchell (1956), 10 Ill. App. 2d 437, 444, 135 N.E.2d 109.) Here, after plaintiffs urged entry of the order without bond, defendant recommended that a lien be imposed on Gold’s payments from PC Brand. Defendant therefore waives its right to assert error on appeal, when doing so is inconsistent with its position in the circuit court proceeding. Auton v. Logan Landfill, Inc. (1985), 105 Ill. 2d 537, 543, 475 N.E.2d 817, citing Ervin v. Sears, Roebuck & Co. (1976), 65 Ill. 2d 140, 146, 357 N.E.2d 500.

For the foregoing reasons, the circuit court’s grant of preliminary injunction is affirmed.

Affirmed.

HARTMAN and SCARIANO, JJ., concur.


author: JUSTICE BUCKLEY

text:
    GARY R. SCHACKLETON, Plaintiff-Appellee and Cross-Appellant, v. FEDERAL SIGNAL CORPORATION, Defendant-Appellant and Cross-Appellee.
    First District (1st Division)
    No. 1—88—2547
    Opinion filed December 11, 1989.
    Rehearing denied May 16, 1990.

      Kovar, Nelson, Brittain & Sledz, of Chicago (Terrill Elise Pierce, of counsel), for appellant.
    Canna & Canna, of Homewood (John F. Canna and Thomas J. Canna, of counsel), for appellee.
   JUSTICE BUCKLEY

delivered the opinion of the court:

Gary R. Schackleton (plaintiff), employed as a commission salesman by Federal Signal Corporation (defendant), a nationwide company engaged in the manufacture, installation and maintenance of illuminated identification signs, brought this action in the circuit court of Cook County to recover unpaid sales commissions earned prior to his termination from his employment with defendant. Following a bench trial, the trial court entered judgment in favor of plaintiff in the amount of $18,160.94, plus interest and costs, but denied plaintiff’s request for attorney fees. The following issues are presented on defendant’s appeal: (1) whether plaintiffs at-will employment status bars his breach of contract claim for unpaid commissions; and (2) whether the trial court’s judgment was against the manifest weight of the evidence. On cross-appeal, plaintiff raises the issue of whether the circuit court erred in denying his request for attorney fees. For the reasons that follow, we affirm in part, reverse in part and remand.

Plaintiff commenced employment with defendant in December 1974, as an inside sales coordinator. Between May 1977 and the date of his termination on August 5, 1983, plaintiff was employed as a commission salesman in defendant’s Chicago district. His duties included the sale and leasing of signs to businesses in his territory, the sale of maintenance contracts for signs, and assisting in the design and installation of signs.

On August 5, 1983, John Walsh, vice-president and regional manager of the Great Lakes region of defendant, terminated plaintiff’s employment. Walsh testified at trial that he intended to meet with all the sales people in the Chicago district to obtain their input as to whether the upcoming sales projections for 1984 were realistic goals. During his interview with plaintiff, Walsh informed plaintiff of his proposed sales quota for 1984 and they discussed how he planned to achieve this goal. Plaintiff stated that the proposed quota was unrealistic, providing numerous reasons as bases for his assertion. When asked for solutions, plaintiff did not offer any suggestions for improvement. Walsh became frustrated and reached an “emotional point” during the conversation, at which time he terminated plaintiff’s employment. Walsh testified that plaintiff was terminated solely on what transpired during the meeting and that plaintiff’s most recent 1983 performance evaluation had not been considered.

Michael Costello, defendant’s district manager and plaintiff’s immediate supervisor, testified at trial that he was neither consulted nor permitted to offer any input into the termination decision. He stated that plaintiff had never been cited for disciplinary action and the official reason given for plaintiff’s termination was “inadequate performance.” Plaintiff testified at trial that he never received a copy of his 1983 performance evaluation, while defendant testified that efforts were made to locate the document, but it was never found.

At the time of plaintiff’s termination, he had acquired the third highest sales production of the eight salesmen in the Chicago district. Only two salesmen, both employed for a longer duration than plaintiff, had achieved greater sales volume. In 1983, prior to his termination, plaintiff had a total sales volume of $198,970. Salesmen with identical 1983 quotas as plaintiff had much lower sales volume than plaintiff yet they were not terminated from their employment. One of these salesmen was promoted from an account executive to a sales manager or district manager for the St. Louis district.

While employed, plaintiff received sales commissions as compensation through a structured payment plan, dependent upon the type of sale contract involved. In the case of an outright sale, he received one-half of his commission when the contract was accepted by defendant and the balance after the sign was installed and the customer billed. Lease and maintenance contract commissions were paid as follows: “Commission on the lease sale portion of the contract [was] earned and payable on approximately the 15th of the month following acceptance of the contract by the company. *** Commission on the service portion of the contract [was] earned and payable monthly over the life of the contract.” As to renewal and maintenance contracts, “[o]ne-half Q-k) of [the] commission [was] earned and payable on approximately the 15th of the month after [the] contract [went] into service,” and the “[remaining one-half Q-k) [was] earned and payable monthly over the life of the contract.”

This structured plan was contained in defendant’s 1978 written “Pricing and Commission Policy,” which was in effect on the date of plaintiff’s employment termination. Also contained in the policy was a section related to terminated salesmen and their entitlement to unpaid commissions, which provided:

“Change in Status of Salespersons
Commissions earned over the life of the contract or at the time payment is received from the customer are considered earned at that time, because continued contract between salesperson and customer further assures that the customer will receive and be satisfied with the products and services he has contracted for from [defendant]. Further, this continued contact will promote good-will with the customer and hopefully result in [defendant] being considered for future signage needs of the customer. Therefore, if there is some change in status of the salesperson and he or she is no longer employed by [defendant] or not employed as a salesperson, he or she will not be entitled to commissions earned during the remaining life of the contract ***.”

At trial, plaintiff testified that the terms of the policy regarding a former salesperson’s commissions were disseminated to him, but were never discussed with him. Brian Madden, a former salesman and district manager for defendant’s Chicago district, testified at trial that the 1978 policy had been drafted by the company vice-president, Bob Stolmeier. After Madden inquired of Stolmeier the effect of the policy on pending commissions owed to salespersons, Stolmeier advised Madden not to be concerned because the policy was designed solely for salesmen who were “in the red” or who otherwise owed defendant money at the time of their termination.

Plaintiff further testified at trial that his understanding of the policy was that it was designed to deal with changes in status such as retirement, promotion, transfer or death. He never understood the policy as intending to cover terminated salesmen, and at trial defendant had never indicated otherwise. Plaintiff and Madden testified at trial that salesmen were not required to “service” their accounts as a condition of receiving their commissions.

In 1979, defendant distributed an “addition” to its 1978 policy to clarify its terms regarding terminated sales persons. The “addition” to the 1978 policy states the following:

“Terminated Salesman Commission Policy Sales persons who are no longer employed by [defendant] as a sales person whose circumstances are not covered in the preceding paragraph under Change In Status of Salespersons are subject to the following with respect to commissions:
1. All commissions relating to maintenance on contracts which are on billing at the time of termination are cancelled effective the first of the month following termination.
2. Outright sales commissions on accepted orders will be paid in full in the ordinary manner i.e. V2 of total commission at order entry and Vz at billing.
3. Lease contract commissions on accepted orders will be paid in the ordinary course, lease commission at order entry. The maintenance commission will be cancelled.
4. Renewal or Maintenance only contracts will be paid in the ordinary course i.e. V2 of total commission on accepted orders will be paid at billing; the second V2 will be cancelled.
5. [Time] and [material] commissions will be paid on accepted and billed orders.”

At trial, plaintiff and Madden testified that the 1979 policy addition was never received by them or other salesmen in the Chicago district. Plaintiff stated he first became aware of the policy addition when he received a copy of it at his post-termination hearing before the Illinois Department of Labor. Madden stated that he first became aware of the policy addition three weeks before trial.

Costello testified at trial that the 1979 addition was a clarification of the 1978 policy’s terms relating to terminated salesmen and their right to receive unpaid commissions. He never informed the salesmen in the Chicago district about the policy addition, which was kept in a file drawer in his office. The salesmen did not have access to the policy addition, except by request.

In 1984, defendant revised its “Pricing and Commission Policy.” The following is the pertinent part of that policy, with the additions or clarifications in italics:

“CHANGE IN STATUS OF SALESPERSON
Commissions earned over the life of the contract or at the time payment is received from the customer are considered earned at the time scheduled for payment, because continued contact between salesperson and customer further assures that the customer will receive and be satisfied with the products and services that he has contracted for from [defendant]. Further, this continued contact will promote goodwill with the customer and hopefully result in [defendant] being considered for future signage needs of the customer. Therefore, if there is some change in status of the salesperson and he or she is no longer employed by [defendant] {whether at the request of [defendant] or the salesperson), or not employed as a salesperson, he or she will not earn commissions during the period of the contract remaining after such change except as hereinafter set forth: * * *
Salespersons who are no longer employed by [defendant] as a salesperson *** are subject to the following with respect to commissions: * * *
6. All commission accruals relating to the remaining one-half of a conditional sale contract are cancelled effective the first of the month following termination since they have not yet been earned.” (Emphasis added.)

The 1984 policy also included a “written confirmation” that was to be signed by each salesperson, acknowledging that he had received, read and fully understood the terms of the policy.

At the time of plaintiffs termination, he was receiving commission payments on approximately 150 contracts representing over $900,000 in sales which he had procured on behalf of defendant. After his termination, plaintiff filed a claim with the Illinois Department of Labor seeking lost commissions. His claim was denied, and he subsequently filed suit in the circuit court of Cook County on February 14, 1985. On May 28, 1985, plaintiff filed an amended two-count complaint. Count I alleged a breach of contract based upon an oral employment agreement. Count II alleged a breach of contract based upon defendant’s sales and pricing commission policy in effect when plaintiff was terminated.

Defendant’s motion to dismiss as to count I was granted, and defendant thereafter moved for summary judgment on count II. Count II was stricken by the trial court, and plaintiff was granted leave to file an amended count II, alleging that defendant’s pricing and commission policy was applied in bad faith.

On April 15, 1987, plaintiff filed his second-amended one-count complaint alleging that defendant “had an implied obligation under its agreement with [plaintiff] to act in good faith in the application of its Pricing and Commission Policies and in the payment of compensation to Plaintiff,” that defendant “terminated [plaintiff’s] employment without just cause,” and that defendant “terminated [plaintiff] and applied its Commission and Pricing Policies in bad faith in an attempt to avoid the payment of commissions which [plaintiff] would have received had his employment continued.” Defendant’s motion for summary judgment as to the second-amended complaint was denied.

The parties stipulated at trial that plaintiff’s pending commissions totalled $20,410.94. This sum included $19,528.26 in maintenance commissions, plus $1,278.81 for new contract which he had procured prior to his termination, less $396.23 from a cancelled sale. In granting judgment in favor of plaintiff, the trial court deducted from the $20,410.94 in commissions, $2,250, which plaintiff had received as severance pay, leaving unpaid commissions of $18,160.94. The trial court, however, denied plaintiff’s request for attorney fees.

On appeal, defendant first argues that plaintiff’s cause of action for unpaid commissions should not be recognized since plaintiff was an at-will employee and was subject to termination with or without cause, unless the discharge violates a clearly mandated public policy. (Price v. Carmack Datsun, Inc. (1985), 109 Ill. 2d 65, 67, 485 N.E.2d 359, 360; Barr v. Kelso-Burnett Co. (1985), 106 Ill. 2d 520, 525, 478 N.E.2d 1354, 1356; Criscione v. Sears, Roebuck & Co. (1978), 66 Ill. App. 3d 664, 669-70, 384 N.E.2d 91, 95.) While we agree with the general proposition set forth above by defendant, the issue involved in this case does not address itself to a wrongful discharge cause of action, but rather a breach of contract action for unpaid commissions based upon defendant’s “Pricing and Commission Policy.” No dispute exists that plaintiff was an at-will employee and that defendant could terminate him at any time. Plaintiff’s at-will status, however, does not affect his breach of contract claim for unpaid commissions.

Under the procuring-cause rule, it is established that a party may be entitled to commissions on sales made after the termination of employment if that party procured the sales through its activities prior to termination. (Scheduling Corp. v. Massello (1987), 151 Ill. App. 3d 565, 503 N.E.2d 806; Schroeder v. Meier-Templeton Associates, Inc. (1984), 130 Ill. App. 3d 554, 474 N.E.2d 744; Technical Representatives, Inc. v. Richardson-Merrell, Inc. (1982), 107 Ill. App. 3d 830, 438 N.E.2d 599.) This principle of law protects a salesman discharged prior to culmination of a sale, after he has done everything necessary to effect the sale. (E.g., Heuvelman v. Triplett Electrical Instrument Co. (1959), 23 Ill. App. 2d 231, 237, 161 N.E.2d 875, 878.) The rule applies unless a contract between the parties expressly provides when commissions will be paid. Technical Representatives, 107 Ill. App. 3d at 833, 438 N.E.2d at 602; Schroeder, 130 Ill. App. 3d at 560, 474 N.E.2d at 750.

At trial, defendant set forth the 1978 policy as an affirmative defense, contending that the “express terms” of the policy provide a basis for withholding plaintiff’s commissions, thus making the procuring-cause rule inapplicable to the instant case. We note that the party who asserts an affirmative defense has the burden of proof and must establish it by a preponderance of the evidence. Lawrence v. Board of Education of School District 189 (1987), 152 Ill. App. 3d 187, 194, 503 N.E.2d 1201, 1206; Phillips & Arnold, Inc. v. Frederick J. Borgsmiller, Inc. (1984), 123 Ill. App. 3d 95, 102, 462 N.E.2d 924, 929.

Here the trial court did not make a specific finding as to defendant’s affirmative defense, but merely entered judgment in favor of plaintiff. We are mindful that where the trial court does not make detailed findings of fact, it will be presumed that the trial court found all issues and controverted facts in favor of the prevailing party. (Skokie Gold Standard Liquors, Inc. v. Joseph E. Seagram & Sons, Inc. (1983), 116 Ill. App. 3d 1043, 1059, 452 N.E.2d 804, 815.) We therefore presume that since judgment was entered in favor of plaintiff, the trial court found that defendant failed to prove its affirmative defense by a preponderance of the evidence.

Defendant on appeal argues that the trial court’s judgment is against the manifest weight of the evidence. We disagree.

In reviewing the trial court’s finding as to defendant’s affirmative defense, we are mindful of the well-established rule that a reviewing court will not substitute its judgment for that of a trial court in a bench trial unless that judgment is against the manifest weight of the evidence. (Heavey v. Ehret (1988), 166 Ill. App. 3d 347, 519 N.E.2d 996; Lawrence, 152 Ill. App. 3d 187, 503 N.E.2d 1201; Scheduling Corp., 151 Ill. App. 3d 565, 503 N.E.2d 806; Schroeder, 130 Ill. App. 3d 554, 474 N.E.2d 744.) For a finding or judgment to be against the manifest weight of the evidence, an opposite conclusion must be clearly evident. Scheduling Corp., 151 Ill. App. 3d 565, 503 N.E.2d 806; Phillips & Arnold, Inc. 123 Ill. App. 3d 95, 462 N.E.2d 924; Wallace v. Weinrich (1980), 87 Ill. App. 3d 868, 409 N.E.2d 336.

We find that a finding here that defendant did not prove its affirmative defense by a preponderance of the evidence is not against the manifest weight of the evidence.

Plaintiff testified that the terms of the 1978 policy regarding payment of commissions after a salesperson left his employment were disseminated to him, but were never discussed with him. His understanding of the 1978 policy was that it was implemented to deal with changes in status such as retirement, promotion, transfer or death. Furthermore, Madden, a former salesman and district manager for defendant, testified that Bob Stolmeier, who drafted the 1978 policy, had informed him that the 1978 policy was designed solely for salesmen who were “in the red” or otherwise owed defendant money at the time of their termination.

While defendant issued an addition to the terms of the 1978 policy regarding terminated salespersons in 1979, plaintiff, Madden and other sales personnel in the Chicago district never received the 1979 addition and plaintiff did not become aware of the 1979 addition until his post-termination hearing.

Moreover, Costello, defendant’s district manager and plaintiff’s immediate supervisor, testified that the 1979 addition was a clarification of the 1978 policy’s terms relating to terminated salespersons and their right to unpaid commissions. He never apprised the sales people in the Chicago district about the policy addition, which he kept in a file drawer in his office, from which access would have been solely by request.

In 1984, defendant’s “Pricing and Sales Commission Policy” was revised. The 1979 additions as well as other clarifications and additions pertaining to terminated salespersons and their right to unpaid commissions were incorporated into the revised policy. Additionally, the 1984 policy included a “written confirmation” that the salesperson was required to sign, acknowledging that he received, read and fully understood the terms of the policy.

In light of the above unrebutted evidence, it is apparent that the terms of the 1978 policy relating to terminated salespersons and their unpaid commissions were susceptible to different conclusions and therefore ambiguous. (See Bulley & Andrews, Inc. v. Symons Corp. (1975), 25 Ill. App. 3d 696, 700, 323 N.E.2d 806, 809.) As a consequence of the 1978 policy’s ambiguity, a finding that defendant did not prove its affirmative defense and plaintiff is entitled to his commissions under the procuring-cause rule is not against the manifest weight of the evidence.

On plaintiff’s cross-appeal, he contends that the trial court erred in denying his prayer for attorney fees brought pursuant to “An Act providing for attorney’s fees when mechanic, artisan, miner, laborer or employee sues for wages” (the Act) (Ill. Rev. Stat. 1987, ch. 13, par. 13). The Act provides for reasonable attorney fees to be awarded whenever:

“[A] mechanic, artisan, miner, laborer, servant or employee brings an action for wages earned and due and owing according to the terms of the employment, and establishes by the decision of the court or jury that the amount for which he or she has brought the action is justly due and owing, and that a demand was made in writing at least 3 days before the action was brought, for a sum not exceeding the amount so found due and owing, then the court shall allow to the plaintiff a reasonable attorney fee of not less than $10, in addition to the amount found due and owing for wages, to be taxed as costs of the action.” (Emphasis added.) (Ill. Rev. Stat. 1987, ch. 13, par. 13.)

We recognize the Act as being mandatory in nature based upon the use of the term “shall” in the above provisions. None of the case law cited by the parties implies that the Act is discretionary in its application.

Defendant, however, argues that plaintiff’s claim is not one for “wages earned and due and owing,” and therefore, plaintiff is not entitled to attorney fees under the Act. Defendant asserts that the commissions here were to be received over a period of time, thus akin to “back pay,” and not wages earned, due and owing. In Reiss v. El Bauer Chevrolet Co. (1968), 96 Ill. App. 2d 266, 238 N.E.2d 619, where two automobile salesmen brought suit to recover bonuses due them based on the amount of sales made during a year, the defendant similarly argued that the salesmen’s claims were not for wages earned, due and owing. The Reiss court found no merit in defendant’s contention, stating that “[t]he method of payment is not controlling in determining whether a sum is wages,” and awarded plaintiffs reasonable attorney fees. Reiss, 96 Ill. App. 2d at 271, 238 N.E.2d at 622.

Similar to the plaintiffs in Reiss, plaintiff here brought a claim for wages earned, due and owing in the form of unpaid commissions. We find no just reason to deny plaintiff attorney fees in light of the Reiss holding. As a result of Reiss, it is clear that a salesman is an “employee” under the Act and that commissions and bonuses are wages earned, due and owing. See Johnson v. Figgie International, Inc. (1986), 151 Ill. App. 3d 496, 509, 502 N.E.2d 797, 806.

We also believe that defendant’s reliance on Thaxton v. Walton (1983), 122 Ill. App. 3d 266, 461 N.E.2d 476, rev’d on other grounds (1985), 106 Ill. 2d 513, is misplaced. In Thaxton, the plaintiff brought a wrongful discharge cause of action for reinstatement and back pay from the date of his termination. The court refused to award attorney fees on the grounds that plaintiff’s claim was one for damages arising from an improper discharge rather than for wages earned due and owing under the Act. (Thaxton, 122 Ill. App. 3d at 271, 461 N.E.2d at 479.) The case before us is not based upon a wrongful discharge cause of action, and plaintiff is not seeking damages for his termination or reinstatement. To the contrary, plaintiff here is seeking unpaid commissions for work actually performed.

Defendant next asserts that plaintiff failed to make a proper written demand as required under the Act. Plaintiff filed a written wage claim with the Illinois Department of Labor, and defendant subsequently received notice of this claim from the Department on December 19, 1983. Plaintiff’s compliance with the statutory procedures for collection of wages, in effect, gave notice and demand of the wages due him. We believe this was sufficient here to meet the Act’s statutory notice requirement.

Defendant’s final argument is that plaintiff’s demand was for an amount in excess of his damages recovered at trial in contravention of the Act. Plaintiff claimed he was owed $1,400 plus $15,000 to $18,000 for unpaid commissions. The parties at trial stipulated that the amount of plaintiff’s pending commissions was $20,410.94. From that amount, a discretionary severance amount of $2,250 was deducted. Accordingly, the trial court entered judgment in favor of plaintiff in the amount of $18,160.94, plus interest on that sum from the date of plaintiff’s termination, August 5, 1983.

Even assuming that plaintiff’s demand was in the maximum amount of $19,400 ($1,400 plus $18,000), the wages earned, due and owing here were actually in the amount of $20,410.94. Moreover, the ultimate judgment amount of $18,160.94, plus interest, is clearly in excess of the presumed maximum amount of the $19,400 demand figure. Accordingly, we conclude that plaintiff has fulfilled the Act’s requirements and is therefore entitled to reasonable attorney fees.

Based upon the foregoing, we affirm the trial court’s judgment awarding plaintiff $18,160.94 for unpaid commissions and reverse and remand as to the trial court’s denial of plaintiff’s request for attorney fees.

Affirmed in part; reversed in part and remanded.

MANNING, P.J., and CAMPBELL, J., concur.


text:
    NORTHBROOK NATIONAL INSURANCE COMPANY, Plaintiff-Appellant and Cross-Appellee, v. NEHOC ADVERTISING SERVICE, INC., d/b/a Lee Enterprises, et al., Defendants-Appellees and Cross-Appellants.
    First District (1st Division)
    No. 1—88—2171
    Opinion filed December 18, 1989.
    Rehearing denied May 16, 1990.

      Condon, Cook & Roche, of Chicago (Francis J. Leyhane III and Mark E. Condon, of counsel), for appellant.
    Arvey, Hodes, Costello & Burman, of Chicago (Rosemarie J. Guadnolo, of counsel), for appellee.
   JUSTICE BUCKLEY

delivered the opinion of the court:

This appeal arises from a declaratory judgment action brought by Northbrook National Insurance Company (Northbrook) in the circuit court of Cook County against NEHOC Advertising Service, Inc. (NE-HOC), seeking an order declaring that it was not obligated to defend or indemnify NEHOC for potential claims brought by third parties. The circuit court granted summary judgment in favor of Northbrook and against NEHOC on Northbrook’s second-amended declaratory judgment complaint. Thereafter, NEHOC’s motion for summary judgment on its counterclaim was granted. It is from these rulings that Northbrook appeals and NEHOC cross-appeals. We affirm.

The facts giving rise to such claims against NEHOC are as follows: In August 1984, Uarco, Inc., contracted with NEHOC for the performance of certain mailing services in connection with materials prepared by a Uarco client, the Viguerie Company (TVC), for the 1984 presidential election. The Uarco project was assigned to NEHOC employee James Matt. Matt, NEHOC’s general manager, was responsible for production scheduling and completion. This specific project required Matt to assemble and mail approximately 2.5 million pieces of correspondence soliciting funds to be contributed to Ruff PAC, a political action committee.

Matt performed only a portion of the Uarco project. Work which was claimed to have been completed was not, documentation was falsified by him so that it appeared that the correspondence was mailed, and hundreds of thousands of pieces of mail which were claimed to have been mailed were discarded and delivered to a trash collector for disposal as waste.

Northbrook filed its original declaratory judgment action on March 26, 1986, to determine its obligations to defend or indemnify NEHOC for its potential liability to Uarco, TVC and Ruff PAC, the three of whom had brought suit in the Federal district court seeking damages from NEHOC on contract and tort grounds.

As part of its answer to Northbrook’s declaratory judgment complaint, NEHOC filed a counterclaim asserting (1) that claims were asserted against it as a defendant and counterdefendant by Uarco, TVC and Ruff PAC in a Federal court action originally brought by Uarco against TVC; (2) that NEHOC had “notified Northbrook of all of the claims asserted against it and *** tendered the defense of those claims to Northbrook pursuant to the terms of the Insurance Policy”; and (3) that “Northbrook is obligated to defend NEHOC and indemnify it for any judgment which may be entered against it upon those claims.”

On October 14, 1986, Northbrook was granted leave to file a first-amended declaratory judgment complaint. On April 30, 1987, Northbrook was granted leave to file a second-amended declaratory judgment complaint when the procedural posture of the pending litigation in Federal court had changed. Due to a settlement of disputes, TVC and Ruff PAG were no longer parties to the Federal case, and therefore not included in Northbrook’s second-amended declaratory judgment complaint. The only remaining claim against NE-HOC was count I of a cross-claim brought by Uarco alleging a breach of contract.

Northbrook filed a motion for summary judgment on September 14, 1987, based upon its second-amended declaratory judgment complaint after NEHOC had agreed to settle Uarco’s breach of contract claim for $284,582.12. In response, NEHOC filed a cross-motion for summary judgment based upon the second-amended declaratory judgment complaint and a motion for summary judgment on its counterclaim. In its motion, NEHOC contended that Northbrook had an obligation to defend and indemnify NEHOC against Uarco’s claim against NEHOC in Federal court.

On January 12, 1988, the circuit court granted summary judgment in favor of Northbrook and against NEHOC on Northbrook’s second-amended declaratory judgment complaint. The circuit court denied NEHOC’s motion for summary judgment on its counterclaim. On January 19, 1988, NEHOC moved to vacate the January 12, 1988, order, and a hearing on NEHOC’s motion to vacate the order was held on February 4, 1988. The circuit court made a finding that the portion of the January 12, 1988, order denying NEHOC’s motion for summary judgment on its counterclaim be vacated and hearing on such motion be rescheduled for February 18, 1988. On that date, the circuit court granted NEHOC’s motion for summary judgment on its counterclaim and denied Northbrook’s motion to reconsider the ruling.

Initially, as to Northbrook’s appeal of the circuit court’s entry of summary judgment in favor of NEHOC, Northbrook contends that NEHOC is not entitled to relief under the policy because it failed to file a counterclaim to Northbrook’s amended declaratory judgment complaints. After Northbrook filed its first- and second-amended complaints, NEHOC did not file or renew its counterclaim to the original complaint.

We reject Northbrook’s argument. We believe that the recent holding in Anderson v. Sconza (1989), 179 Ill. App. 3d 202, 534 N.E.2d 445, is controlling on this issue. In Anderson, the court held that a defendant’s failure to file an amended counterclaim after plaintiff files an amended complaint does not defeat defendant’s claim for relief. (Anderson, 179 Ill. App. 3d at 207, 534 N.E.2d at 449.) In so holding, the Anderson court reasoned that a counterclaim is a pleading which is “complete in itself,” as provided in section 2—608(c) of the Illinois Code of Civil Procedure (the Code) (Ill. Rev. Stat. 1987, ch. 110, par. 2—608(c)) (Anderson, 179 Ill. App. 3d at 207, 534 N.E.2d at 449), and that no requirement exists under the Code that a counterclaim be re-pleaded each time an original complaint is amended to preserve the counterclaim’s effect on the subsequent complaint. The court further reasoned that “a counterclaim differs from an answer in that it seeks affirmative relief, whereas an answer merely attempts to defeat the *** action.” Anderson, 179 Ill. App. 3d at 207, 534 N.E.2d at 449.

Based upon the above, we find that NEHOC’s counterclaim was not abandoned. Consequently, the pleadings alleged in NEHOC’s counterclaim are properly before us.

Northbrook next contends that even if NEHOC’s counterclaim was not abandoned, it failed to adequately allege a basis for liability under the policy and that it was error for the circuit court to grant NEHOC’s motion for summary judgment. When reviewing a circuit court’s entry of summary judgment, our sole function is to determine whether a genuine issue of material fact exists, and whether judgment for the movant was correct as a matter of law. (Warren v. Coca-Cola Bottling Co. (1988), 166 Ill. App. 3d 566, 519 N.E.2d 1197; Coomer v. Chicago & North Western Transportation Co. (1980), 91 Ill. App. 3d 17, 414 N.E.2d 865; Van Vactor v. Blue Cross Association (1977), 50 Ill. App. 3d 709, 365 N.E.2d 638; Ill. Rev. Stat. 1987, ch. 110, par. 2—1005.) It is apparent that no genuine issue of material fact exists here. Thus, we need only determine whether judgment for NEHOC was correct as a matter of law.

The circuit court determined that Northbrook was not liable to NEHOC under the “General Liability” provisions of the policy, but found, based upon NEHOC’s counterclaim and motion for summary judgment, that a basis for liability existed under section IA of the “Crime Insurance Schedule.” Section IA of the “Crime Insurance Schedule,” containing a $200,000 limit of liability, provides the following:

“Employee Dishonesty Commercial Blanket Coverage Loss of Money, Securities and other property which the Insured shall sustain, to an amount not exceeding in the aggregate the amount stated in the Table of Limits of Liability applicable to this Insuring Agreement IA through any fraudulent or dishonest act or acts committed by any of the Employees, acting alone or in collusion with others.”

In finding Northbrook liable under this provision, the circuit court found that “the use of the words loss of monies, securities, and other properties includes the loss suffered under the facts and circumstances set forth in this case, and that [Northbrook] has an obligation to pay [NEHOC] under the terms and provisions of the policy for the loss sustained.”

Northbrook argues that NEHOC’s counterclaim failed to specifically set forth the “Crime Insurance Schedule” of the policy as a basis for liability, and that the only coverage afforded to NEHOC under the facts presented here is the “General Liability” coverage, expressly related to indemnification claims. We find that the allegations contained in NEHOC’s counterclaim were sufficient to allow the circuit court to make a determination regarding Northbrook’s liability.

As to the “Crime Insurance Schedule” and whether its provisions provide coverage to NEHOC under the facts presented here, general rules of construction govern this determination. Where contract provisions are clear and unambiguous, a court will apply the provisions as written. (United States Fire Insurance Co. v. Schnackenberg (1981), 88 Ill. 2d 1, 5, 429 N.E.2d 1203, 1205; Sentry Insurance Co. v. S & L Home Heating Co. (1980), 91 Ill. App. 3d 687, 691, 414 N.E.2d 1218, 1221-22.) The words of a policy should be given their plain and ordinary meaning, and courts should not strain to find an ambiguity where none exists. (United States Fire Insurance Co., 88 Ill. 2d at 5, 429 N.E.2d at 1205.) Furthermore, an insurance contract, like any other contract, must be construed as a whole. Zurich Insurance Co. v. Raymark Industries, Inc. (1987), 118 Ill. 2d 23, 514 N.E.2d 150; Western Casualty & Surety Co. v. Brochu (1985), 105 Ill. 2d 486, 475 N.E.2d 872.

Applying these principles, we find that the policy in the instant case is unequivocal and the circuit court’s entry of summary judgment in favor of NEHOC was correct as a matter of law.

We conclude that the specific provisions under section IA of the “Crime Insurance Schedule,” entitled “Employee Dishonesty Commercial Blanket Coverage,” afford coverage to NEHOC. Due to Matt’s fraudulent and dishonest acts, NEHOC sustained “[l]oss of [mjoney, [sjecurities and other property.” Pursuant to the plain language of the provision, which is consistent with the policy’s purpose to defend and indemnify NEHOC, Northbrook is obligated to indemnify NEHOC for its losses.

Northbrook’s final contention is that the circuit court erred in considering an affidavit submitted by David Sajovic, NEHOC’s president, and NEHOC’s “appendix.” It argues that the affidavit, which set forth the events surrounding the Uarco project, was not properly before the circuit court because it did not affirmatively show that Sajovic, if called to testify, could testify competently to the affidavit’s contents as required under Supreme Court Rule 191(a) (107 Ill. 2d R. 191(a)). (See also Allied American Insurance Co. v. Mickiewicz (1984), 124 Ill. App. 3d 705, 464 N.E.2d 1112.) Rule 191(a), which governs affidavits in summary judgment proceedings, states the following, in pertinent part:

“Affidavits in support of and in opposition to a motion for summary judgment *** shall be made on the personal knowledge of the affiants; shall set forth with particularity the facts upon which the claim, counterclaim, or defense is based; shall have attached thereto sworn or certified copies of all papers upon which the affiant relies; shall not consist of conclusions but of facts admissible in evidence; and shall affirmatively show that the affiant, if sworn as a witness, can testify competently thereto.” (107 Ill. 2d R. 191(a).)

We find that the Sajovic affidavit sufficiently meets the requirements under Rule 191(a). Here, the Uarco project is a matter well within Sajovic’s personal knowledge as president of NEHOC, and therefore, he could competently testify as to the contents of his affidavit if called upon to do so.

Northbrook argues that certain documents contained in NEHOC’s appendix, including pleadings, correspondence between the parties, such as proof of loss documentation, and a complete copy of the insurance policy at issue, were not authenticated by Sajovic’s affidavit and are irrelevant to the summary judgment proceedings. The record discloses that the circuit court considered only those materials that were “germane to the problem.” Thus, Northbrook could not have been prejudiced by NEHOC’s reference to the appendix on the basis that certain documents were not authenticated by Sajovic’s affidavit, or on the basis that the documents contained in the appendix were not relevant to the proceedings.

We now turn to NEHOC’s contention on its cross-appeal that the circuit court erred in granting summary judgment in favor of Northbrook on Northbrook’s second-amended declaratory judgment complaint. The circuit court granted summary judgment under the provisions set forth under the “General Liability” section of the insurance policy and on the grounds that Northbrook cited as uncontested facts the events surrounding the acts of NEHOC’s employee, Matt.

These facts had previously been set forth in Uarco’s cross-claim against NEHOC and in Northbrook’s second-amended declaratory judgment complaint without denial on behalf of NEHOC. Allegations not specifically denied must be deemed true. (Ill. Rev. Stat. 1987, ch. 110, pars. 2—610(a), (b); Hiram Walker Distributing Co. v. Williams (1981), 99 Ill. App. 3d 878, 426 N.E.2d 8.) Thus, even assuming arguendo that Northbrook’s motion for summary judgment contained contested facts, we are compelled to find that NEHOC’s failure to deny such facts constituted an admission. Ill. Rev. Stat. 1987, ch. 110, pars. 2—610(a), (b).

In determining whether insurance coverage exists in a declaratory judgment action, the pleadings at issue and the insurance policy need only be considered. (See Clemmons v. Travelers Insurance Co. (1981), 88 Ill. 2d 469, 476, 430 N.E.2d 1104, 1108; Thornton v. Paul (1978), 74 Ill. 2d 132, 144, 384 N.E.2d 335, 339.) The circuit court considered both the pleadings and insurance policy here and determined that no basis existed for liability against Northbrook under the “General Liability” provisions. The court based its determination on NEHOC’s failure to meet the policy definition of “occurrence” and the specific policy exclusions set forth below.

The “General Liability” provisions state, in pertinent part as follows:

“[Northbrook] will pay on behalf of [NEHOC] all sums which [NEHOC] shall become legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies, caused by an occurrence, and [Northbrook] shall have the right and duty to defend any suit against [NEHOC] seeking damages on account of such bodily injury or property damage ***.” (Emphasis added.)

An “occurrence” under the “General Liability” coverage is defined as follows:

“ ‘Occurrence’ means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the InsuredQ.”

We believe that the circuit court correctly determined under these provisions that Northbrook did not have a duty to defend or indemnify NEHOC under the “General Liability” provisions of the policy, as NEHOC has not satisfied the policy definition of “occurrence.” Moreover, even if NEHOC had met the policy definition of “occurrence,” it failed to overcome policy exclusions j(l), j(2)(a), k and m(2).

In conclusion, we affirm the circuit court of Cook County on all issues presented by the parties on appeal and cross-appeal.

Affirmed.

MANNING, P.J., and CAMPBELL, J., concur.

      On May 6, 1988, NEHOC’s appeal of paragraphs 1 and 2 of the February 4, 1988, order denying its cross-motion for summary judgment on Northbrook’s second-amended declaratory judgment complaint, docketed on appeal as case No. 1—8—0705, was dismissed by this court as premature pursuant to Supreme Court Rule 303(a)(2) (107 Ill. 2d R. 303(a)(2)). NEHOC now cross-appeals paragraphs 1 and 2 of the February 4, 1988, order.

      The exclusions under section (j) are as follows and do not insure:
      “Property Damage:
      (1) to property owned or occupied by or rented to the Insured, or, except with respect to the use of elevators, to property held by the Insured for sale or entrusted to the Insured for storage or safekeeping;
      (2) except with respect to liability under a written sidetrack agreement or the use of elevators;
      (a) to property while on the premises owned by or rented to the Insured for the purpose of having operations performed on such property by or on behalf of the InsuredQ.”

      Exclusion k states the following:
      “[L]oss of use of tangible property which has not been physically injured or destroyed resulting from
      (1) a delay in or lack of performance by or on behalf of the Named Insured of any contract or agreement, or
      (2) the failure of the Named Insured’s products or work performed by or on behalf of the Named Insured to meet the level of performance, quality, fitness or durability warranted or represented by the Named Insured;
      but this exclusion does not apply to loss of use of other tangible property resulting from the sudden and accidental physical injury to or destruction of the Named Insured’s products or work performed by or on behalf of the Named Insured after such products or work have been put to use by any person or organization other than an Insured[ ].”

      Exclusion m states:
      “[W]ith respect to Insurance as is afforded to any employee of the Named Insured: * * *
      (2) property damage to property owned, occupied or used by, rented to, in the care, custody or control of, or over which physical control is being exercised for any purpose by:
      (i) another employee of the Named Insured;
      (ii) the Named Insured, or if the Named Insured is a partnership or joint venture, any partner or member thereof.”