author: JUSTICE LINN

text:
    ERIC ROTHNER et al., Plaintiffs-Appellants, v. HENRY MERMELSTEIN et al., Defendants-Appellees.
    First District (4th Division)
    No. 1—90—2946
    Opinion filed September 12, 1991.
    Rehearing denied October 15, 1991.

      Katz, Randall & Weinberg, of Chicago (Warren Lupel, of counsel), for appellants.
    Torshen, Schoenfield & Spreyer, Ltd., and Albert Koretzky, both of Chicago (Jerome H. Torshen and Abigail K. Spreyer, of counsel), for appellees.
   JUSTICE LINN

delivered the opinion of the court:

Plaintiffs, Eric Rothner and Michael Giannini, brought an action in the circuit court of Cook County against defendants, Henry, Louise, and Marvin Mermelstein, and the La Salle National Bank as trustee under a land trust. Plaintiffs sought, inter alia, the specific performance of a stock purchase agreement, in which Rothner agreed to buy stock in the Mermelsteins’ closely held corporation.

The trial court granted Louise Mermelstein’s motion for summary judgment on the issue of specific performance. Plaintiffs appeal, contending that the trial court erred in granting summary judgment for Louise on the issue of specific performance.

We affirm the judgment of the trial court.

Background

A

The record contains the following pertinent facts. Defendants Henry and Louise Mermelstein, their son Marvin, and another son who is not a defendant in this lawsuit are the shareholders in Central Home, Inc. This closely held corporation operates a nursing home in Chicago. The land upon which the nursing home stands is held in an Illinois land trust by the La Salle National Bank as trustee. Henry and Louise are the beneficiaries of the land trust.

On July 3, 1989, Central Home entered into a lease agreement with the trustee bank. Rothner signed for the tenant as president of Central Home, and Henry and Louise signed for the landlord as sole beneficiaries of the land trust. Under the 15-year lease, Rothner rented the nursing home facility and property from Henry and Louise. Rothner paid a security deposit of $500,000 and a monthly rent, from August 1989 to July 1990, of $93,151. The parties closed the lease in late July. Rothner operated the nursing home from August 1989 through March 1990.

On July 15, 1989, Rothner and Louise entered into a stock purchase agreement. Louise agreed to sell to Rothner 500 shares of Central Home stock, which constituted half of the total outstanding shares. The agreement provided in pertinent part:

“4. Conditions Applicable to Buyer. Buyer’s obligation to complete the transaction provided for herein shall be subject to the performance by Seller of all of the conditions to be performed by her on or before the date of Closing, to the material accuracy and correctness of the representations and warranties of Seller contained herein.
5. Conditions Applicable to the Seller. Seller’s obligation to complete the transaction provided for herein shall be subject to the performance by the Buyer of all of the conditions to be performed by them on or before the Closing and to the material accuracy and correctness of the representations and warranties of the Buyer.
6. Purchase Price. The purchase price payable to the Seller shall be TWENTY TWO THOUSAND {$22,000.00) DOLLARS. Subject to the conditions, representations and warranties hereof, the purchase price shall be paid at Closing.
7. Closing. The Closing shall be the same date and take place at the same location as Corporation’s closing on its lease of the real estate and shall follow immediately thereafter. At the Closing, Seller shall deliver to buyer Certificate No. 5, representing the Common Shares, duly endorsed in blank for transfer.
* * *
15. Entire Agreement. This Agreement contains all the terms agreed upon among the parties with respect to the subject matter hereof, and no modification or amendment of this Agreement shall be binding on any of the parties hereto unless in writing and signed by the parties to be bound thereby.”

The July 3 lease did not refer to the July 15 stock purchase agreement.

B

On March 29, 1990, Rothner and Michael Giannini filed a seven-count complaint in the trial court against defendants. Giannini was the administrator of the nursing home that Central Home operates. Giannini alleged that he was a shareholder (14.5%) in Central Home by virtue of an agreement with Rothner. Plaintiffs attached to the complaint the lease and stock purchase agreement.

In count I of the complaint, plaintiffs sought the specific performance of the stock purchase agreement. Plaintiffs alleged as follows. Paragraph 7 of the stock purchase agreement required Louise to deliver the 500 shares of Central Home stock to Rothner on the date of closing on the lease. However, she failed to do so and had not yet delivered the stock. Louise had refused plaintiffs’ demands for the stock. Lastly, “ROTHNER has performed each of the provisions applicable to him in Exhibit A [the stock purchase agreement] and has an absolute right to performance.”

On April 10, 1990, Louise answered count I of the complaint, alleging as follows. Plaintiffs did not own any stock in Central Home. The stock purchase agreement was never closed, i.e., the agreement was never performed. Rothner breached the agreement by failing to pay the purchase price of $22,000 in July 1989 or at any other time. Since Rothner did not pay the purchase price, she was not required to deliver the stock.

On April 18, 1990, Louise moved for summary judgment on count I of the complaint. On April 25, she filed an affidavit in support of the motion. Louise alleged that count I was based on the stock purchase agreement, and that Rothner failed to pay for the stock in the manner required by the agreement. Further, Louise had not received any money whatever from Rothner for the stock. Since Rothner failed to perform the agreement, Louise was entitled to a summary judgment in her favor.

On May 22, 1990, plaintiffs responded to Louise’s motion for summary judgment on count I. Plaintiffs attached to their motion an affidavit by Rothner and an affidavit by Lawrence Schwartz, Rothner’s attorney. Plaintiffs asserted that although they performed their obligations under the agreement, Louise did not perform hers.

Plaintiffs alleged that the $22,000 was never intended to be paid. Rather, the parties agreed that the stock purchase agreement was intended merely “to avoid new licensing procedures by various State and local agencies.” Further, “[although two agreements were in fact prepared, it was construed as a single transaction contemporaneously done and treated as such by the participants.” Attorney Schwartz stated in his affidavit as follows:

“8. It was understood that whatever figure was inserted in the Stock Purchase Agreement^ that amount] would be a part of the $500,000.00 paid pursuant to the lease transaction, or alternatively, would be offset at a subsequent time when prorations were accomplished. However, it was clearly understood that no monies would change hands beyond the $500,000.00, plus or minus prorations. It was for that reason that the parties were unconcerned if the figure was $10.00 or $22,000.00, as it was merely a matter of allocation.”

Plaintiffs concluded that the record contained genuine issues of material fact that precluded summary judgment.

On June 14, 1990, the trial court held a hearing on Louise’s motion for summary judgment. At the close of the hearing, the trial court concluded that plaintiffs were not entitled to specific performance. The court found that the stock purchase agreement required Rothner to pay $22,000 for the stock. Further, it was undisputed that Rothner failed to do so. Thus, the court granted summary judgment for Louise on count I of the complaint.

On June 18, 1990, plaintiffs attached to the complaint an amendment to the July 3, 1989, lease. The lease amendment was dated July 21, 1989, but was signed by Rothner and Henry on August 22, 1989. Paragraph 5 of the lease amendment referred to Rothner’s ownership of Central Home stock. The provision required Rothner to pledge his stock as collateral to secure his performance under the lease.

On July 10, 1990, plaintiffs filed a motion to reconsider the summary judgment for Louise on count I. (See Ill. Rev. Stat. 1989, ch. 110, par. 2 — 1203.) Attached to the motion was a “Supplemental Affidavit” by Rothner. In this second affidavit, Rothner essentially repeated his contention: although he did not pay Louise the $22,000 for the stock, no one intended that he do so.

On September 11, 1990, the trial court held a hearing on plaintiffs’ motion for reconsideration. At the close of the hearing, the court denied the motion. Plaintiffs appeal.

Opinion

When a plaintiff appeals from a trial court’s order of summary judgment for a defendant, the only issue on appeal is whether “the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 1005(c).) A triable issue precluding summary judgment exists where there is a dispute as to material facts, or where reasonable persons might draw different inferences from the undisputed facts. Susmano v. Associated Internists of Chicago, Ltd. (1981), 97 Ill. App. 3d 215, 218-19, 422 N.E.2d 879, 882.

Plaintiffs contend that a genuine issue of material fact exists as to whether Rothner is entitled to specific performance of the stock purchase agreement. Specific performance refers to the performance of the very (specific) thing called for by the contract. This equitable remedy stands in contrast to the payment of money as a substitute for performance. (D. Dobbs, Handbook on the Law of Remedies 795-96 (1973).) The remedy is based on the desire to do more perfect and complete justice, which the remedy at law would fail to give. (4 J. Pomeroy, Equity Jurisprudence §1401 (5th ed. 1941); accord 33A Ill. L. & Prac. Specific Performance §11 (1970).) The availability of specific performance of a contract for the sale of corporate stock depends upon the character of the stock. If the shares are readily obtainable in the open market, specific performance will be denied. However, if the shares have no market rating and cannot easily be obtained elsewhere, specific performance is available. Smurr v. Kamen (1921), 301 Ill. 179, 188, 133 N.E. 715, 719; 33A Ill. L. & Prac. Specific Performance §56 (1970).

Specific performance is not available as a matter of right. Rather, the remedy rests in the sound discretion of the trial court, based on all of the facts and circumstances in evidence. The party seeking specific performance of a contract must show that he has performed his part of the agreement; or that he was ready, willing, and able to perform and was prevented from performing by the act of the other party. (Beesley Realty & Mortgage Co. v. Busalachi (1963), 28 Ill. 2d 162, 165, 190 N.E.2d 715, 716; Wolford v. James E. Kolls Investment Co. (1978), 61 Ill. App. 3d 405, 408-09, 377 N.E.2d 1314, 1317; 33A Ill. L. & Prac. Specific Performance §§85, 86 (1970).) Where the contract requires the buyer to pay money and the seller to deliver the object of the sale at a certain time, those covenants are mutual and dependent. Under such circumstances, neither party can compel the other to perform without first tendering the money or the item. Miller v. Shea (1921), 300 Ill. 180, 184-85,133 N.E. 183, 185.

Applying these principles to the case at bar, we conclude that the trial court properly granted summary judgment for Louise on count I of the complaint. Plaintiffs sought specific performance of the stock purchase agreement. That document expressly provided that the duties of Rothner and Louise thereunder were mutual and dependent. The document also provided that, at the closing of the lease, Rothner would pay Louise $22,000 for the stock and Louise would deliver the stock. It is undisputed that this event did not occur. It is further undisputed that at no time thereafter did Rothner tender the purchase price to Louise. Since Rothner has not performed his part of the stock purchase agreement, plaintiffs are not entitled to specific performance.

Plaintiffs maintain their assertion that Rothner performed his obligations under the stock purchase agreement and that Louise did not perform hers. Plaintiffs contend that Rothner did not pay Louise the $22,000 because none of the parties intended that he do so. Louise, however, remains obliged under the agreement to deliver the stock. Plaintiffs base their interpretation of the parties’ intent on the facts and circumstances surrounding the stock purchase agreement, as described in their affidavits.

In construing a contract, a court seeks to ascertain the intent of the parties. (Susmano, 97 Ill. App. 3d at 219, 422 N.E.2d at 882.) Courts presume that a written agreement speaks the intent of the signing parties. (Western Illinois Oil Co. v. Thompson (1962), 26 Ill. 2d 287, 291, 186 N.E.2d 285, 287; Titchener v. Avery Coonley School (1976), 39 Ill. App. 3d 871, 874, 350 N.E.2d 502, 506.) As a result, the intent of the parties must be ascertained, if possible, from the contract itself. (Bowler v. Metropolitan Sanitary District of Greater Chicago (1969), 117 Ill. App. 2d 237, 242, 254 N.E.2d 144, 147.) When contract terms are clear and unambiguous, they must be given their ordinary and natural meaning, and no parol or extrinsic evidence may be considered to vary the meaning of the terms. (Susmano, 97 Ill. App. 3d at 219, 422 N.E.2d at 882; Katz v. Diabetes Association (1975), 31 Ill. App. 3d 240, 243, 333 N.E.2d 293, 295.) If the intent of the parties can be ascertained from the language of the contract itself, rules of construction have no application. (Kelly v. Terrill (1971), 132 Ill. App. 2d 238, 240, 268 N.E.2d 885, 886, citing Bowler, 117 Ill. App. 2d at 242, 254 N.E.2d at 147.) “Whether or not an ambiguity exists in a contract is to be determined by the court as a matter of law.” Susmano, 97 Ill. App. 3d at 219, 422 N.E.2d at 882.

These principles preclude the interpretation that plaintiffs assign to the stock purchase agreement. Plaintiffs do not and cannot argue that the document itself is vague or ambiguous. Rather, plaintiffs base their interpretation of the stock purchase agreement solely on the extrinsic facts and circumstances surrounding the document as described in their affidavits. As the trial court correctly observed, plaintiffs’ affidavits treat the stock purchase agreement itself as a nullity. The court was correct in that “Rothner would have the court ignore the terms of the very instrument which he claims gives him rights to specific performance and thus to the stock certificate.”

The fact that Rothner found the terms of the stock purchase agreement burdensome did not relieve him of his own imprudence in entering into the contract. “Contracting parties are bound by the plain and unambiguous terms of whatever agreements they may have reached.” (Bowler, 117 Ill. App. 2d at 243, 254 N.E.2d at 147.) Plaintiffs’ affidavits do not contradict the indisputable facts that the stock purchase agreement required Rothner to pay Louise $22,000 for her Central Home stock and that he failed to do so in the manner therein described.

After carefully reviewing the entire record, we conclude that the stock purchase agreement was clear and unambiguous, and that Rothner did not perform his obligations under that document. Accordingly, we hold that plaintiffs are not entitled to specific performance of the stock purchase agreement. We agree with the trial court that the record contains no genuine issue of material fact and that Louise is entitled to a judgment on count I of the complaint as a matter of law.

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

Affirmed.

JIGANTI, P.J., and McMORROW, J., concur.


source: Caselaw Access Project

author: PRESIDING JUSTICE RAKOWSKI

license: Public Domain

text:
    M.D. BUILDING MATERIAL COMPANY et al., Plaintiffs, v. 910 CONSTRUCTION VENTURE et al., Defendants (910 Construction Venture et al., Counterplaintiffs and Third-Party Plaintiffs and Appellees; 910 South Michigan Partners Limited Partnership, Counterdefendant and Appellant; M.D. Building Material Company et al., Counterdefendants; 910 Development Corporation et al., Third-Party Defendants).
    First District (6th Division)
    No. 1—91—0031
    Opinion filed September 13, 1991.
    Rehearing denied October 22, 1991.

      Michael J. Rovell, Carlins & Moss, and Barry B. Berk, all of Chicago (Lisa I. Fair, Matthew N. Young, and Joel M. Carlins, of counsel), for appellant.
    Miller, Shakman, Hamilton & Kurtzon, of Chicago (Michael L. Shakman, Barry A. Miller, and Diane F. Klotnia, of counsel), for appellees.
   PRESIDING JUSTICE RAKOWSKI

delivered the opinion of the court:

This appeal arises from an order entered by the circuit court compelling an arbitration demand filed by 910 Construction Venture (Venture) against Loewenberg/Fitch Partnership, P.C. (Loewenberg/Fitch), an architectural firm. The demand was brought derivatively by Venture as a limited partner of the 910 South Michigan Partners Limited Partnership (Partnership). The general partner, 910 Development Corporation (General Partner), has appealed, raising the following issues: (1) whether the trial court erred in compelling derivative arbitration when the entity whose rights were being asserted had made the business decision that the claims, if brought, should be decided in the circuit court; (2) whether the limited partner was an adequate representative to bring a derivative action for arbitration on behalf of the Partnership where Venture has filed a claim against the Partnership, and the Partnership has claims against Venture for terminating construction; (3) whether the Revised Uniform Limited Partnership Act (Ill. Rev. Stat. 1989, ch. ÍOG1^, par. 151 — 1 et seq.) authorizes a derivative action to compel arbitration; and (4) whether a limited partnership is an indispensable party to a derivative arbitration brought on its behalf. Although appellant is identified as the Partnership, both parties in this dispute are part of the Partnership and claim to be acting on its behalf. It is James Loewenberg as president of the General Partner who opposes arbitration and who has appealed from the trial court’s order compelling it. Thus, we refer to the appellant as the General Partner.

The underlying dispute in this case is one of multiple disputes among the owners, contractors, subcontractors and architects who were engaged in the rehabilitation of a building at 910 South Michigan Avenue in Chicago. The building at issue is owned by a land trust with the American National Bank and Trust Company of Chicago (Owner) and the beneficial interest in the land trust is held by the Partnership. The Partnership consists of the one general partner and three limited partners. The limited partners are 910 Development Associates, 910 Partners and Venture. James Loewenberg is president of the General Partner, which owns 1% interest in the Partnership and also owns and controls the limited partner, 910 Development Associates, which owns 44% interest in the Partnership. Leonard Koval owns and controls 910 Partners, which owns 45% interest. The third limited partner is The Venture, which is a joint venture comprised of Crane Construction Company, Inc., and GDI and Associates, Inc., and which owns 10% interest in the Partnership.

As part of a plan to rehabilitate the building, the Owner entered into a series of contracts. One of the contracts was the agreement with Loewenberg/Fitch for architectural services. James Loewenberg, who was the president of the General Partner as well as the owner of the limited partner, 910 Development Associates, was also the president of the architectural firm. It was this contract which contains the arbitration provision which is at issue in this appeal. The Owner also entered into a contract with Century Contractors, Inc., for the demolition work and with Venture for the rehabilitation of the building.

After Venture entered into the construction contract various problems and disputes developed. Venture claims that the building was not adequately prepared for reconstruction following the demolition work. Disputes also arose over the architectural plans, and the fact that the General Partner and architect failed to authorize change orders for necessary work and stopped authorizing payments to Venture and its subcontractors. When a subsequent settlement arrangement failed, Venture and its subcontractors ceased work. Construction on the project terminated on June 4, 1990. Since then the building has been abandoned and vulnerable to vandalism as well as weather conditions. On January 3, 1991, Venture filed a motion to appoint a receiver to protect the building against further damage which the trial court granted. According to Venture, the Owner Partnership defaulted on a $19 million construction loan obtained through the United States Department of Housing and Urban Development (HUD), and the lender has assigned the loan to the Government National Mortgage Association (GNMA), which will be assigning the mortgage to the Federal Housing Authority (FHA). A claim will be made by GNMA against the FHA for the amount of the construction loan under the appropriate FHA insurance program. Unless a settlement acceptable to the FHA can be arranged, there will be a foreclosure on the mortgage and a subsequent sale of the property which will leave the Partnership without any assets.

After construction on the project terminated, several mechanic’s lien suits were filed. The complaints filed were (1) Fred Berglund & Sons, Inc. v. CDI & Associates, Inc.; (2) Century Contractors, Inc. v. American National Bank & Trust Co. of Chicago, as trustee under trust No. 32501; and (3) M.D. Building Material Co. v. 910 Construction Venture. The complaints were consolidated on September 6, 1990. On October 15, 1990, Venture filed its motion to compel arbitration in a derivative capacity pursuant to section 1001 of the Revised Uniform Limited Partnership Act (RULPA) (Ill. Rev. Stat. 1989, ch. ÍOG1^, par. 160 — 1), based on an arbitration provision in the Owner Partnership/architect contract. On the same day Venture also filed a 26-count counterclaim and third-party complaint against various subcontractors, the architect and the limited Partnership. In count IX, Venture realleged the claims of its arbitration demand and asked the court to compel arbitration of Venture’s derivative claim against Loewenberg/Fitch if arbitration was contested. The major allegations of count IX of the counterclaim were that James Loewenberg had a conflict of interest because he controlled both the Partnership and the architect, the architectural malpractice proximately caused the termination of the construction and the resulting injury to the Partnership, and that because of the existing conflict of interest, James Loewenberg would not file an arbitration demand on behalf of the Partnership against Loewenberg/Fitch.

After Venture’s demand was filed, notices were sent to counsel for the General Partner and Loewenberg/Fitch. Each party was also sent a list of potential arbitrators and given approximately 10 days to strike any names. Counsel for Venture was the only one who responded. Loewenberg/Fitch was subsequently notified of the appointment of an arbitrator as well as the hearing, which was scheduled for December 5, 1990. Three weeks later, counsel for the General Partner sent a letter to the American Arbitration Association (AAA) with a stipulation of dismissal which was also signed by counsel for Loewenberg/Fitch. The document stated that the respective parties agreed to the dismissal of the arbitration. Venture subsequently filed a motion to compel arbitration, and at the hearing on Venture’s motion, the General Partner filed a motion to stay. The trial court entered an order that the preliminary hearing before the arbitrator should proceed. At the arbitration proceeding, the arbitrator denied the motions to dismiss or stay the arbitration pending the trial court’s ruling. On December 17, 1990, the trial court granted Venture’s motion to compel arbitration and also granted the motion of the General Partner for an interlocutory appeal pursuant to Supreme Court Rule 308(a) (134 Ill. 2d R. 308(a)), finding that its order “involved a question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of litigation.” We allowed the Rule 308(a) appeal. The question of law submitted was whether Venture had the right to pursue arbitration in a derivative capacity. On January 11, 1991, the trial court granted the motion to stay arbitration proceedings pending this appeal.

The issue of whether the RULPA authorizes derivative arbitration, although listed as appellant’s third issue, is the basis of the Rule 308 appeal. Therefore, we will address it first. We will also address the other issues because this appeal is in part brought pursuant to Supreme Court Rule 307(a)(1) (134 Ill. 2d R. 307(a)(1)).

Because there is no controlling precedent, an initial step in resolving this issue is to closely examine the relevant statute in order to determine the legislative intent as found in the history, existing circumstances and contemporary conditions of the legislation. (Miller v. Department of Public Aid (1981), 94 Ill. App. 3d 11, 14, 418 N.E.2d 178, citing People ex rel. Hanrahan v. White (1972), 52 Ill. 2d 70, 285 N.E.2d 129.) Section 1001 of the RULPA provides:

“No action shall be brought by a limited partner, or assignee who is entitled to exercise the rights of a partner to bring an action, in the right of a limited partnership to recover a judgment in its favor unless general partners with authority to do so have refused to bring the action or unless an effort to cause those general partners to bring the action is not likely to succeed.” (Ill. Rev. Stat. 1989, ch. ÍOG1^, par. 160 — 1.)

Proper interpretation of a provision cannot be based solely on its language, and a court must also “determine the objective the statute sought to accomplish and the evils it desired to remedy.” City of Springfield v. Board of Election Commissioners (1985), 105 Ill. 2d 336, 341, 473 N.E.2d 1313, citing Chastek v. Anderson (1981), 83 Ill. 2d 502, 416 N.E.2d 247; Andrews v. Foxworthy (1978), 71 Ill. 2d 13, 21, 373 N.E.2d 1332.

While derivative actions are a relatively recent development in limited partnerships, they are well known in the corporate setting. In the corporate setting, a derivative suit is a device to protect shareholders against abuses by the corporation, its officers and directors. “The fundamental basis of a shareholders’ derivative action is to enforce a corporate right which the corporation either refuses to assert, or by reason of circumstances is unable to assert, and in such a situation, a single shareholder may pursue a derivative action.” March v. Miller-Jesser, Inc. (1990), 202 Ill. App. 3d 148, 159-60, 559 N.E.2d 844, citing Cohen v. Beneficial Industrial Loan Corp. (1949), 337 U.S. 541, 93 L. Ed. 1528, 69 S. Ct. 1221.

In a limited partnership, as in publicly held corporations, ownership is separated from control. However, unlike the corporation, this separation results not only from the dispersion of ownership among thousands of investors, but also by the nature of the partnership, which is comprised of limited partners who are passive investors. (Hecker, Limited Partners’ Derivative Suits Under The Revised Uniform Limited Partnership Act, 33 Vand. L. Rev. 343, 344 (1980).) The passive nature of the limited partners’ role has often resulted in mismanagement and self-dealing by general partners. (33 Vand. L. Rev. at 344.) A similar view was expressed by the court in Labovitz v. Dolan (1989), 189 Ill. App. 3d 403, 416, 545 N.E.2d 304, quoting from Professor Daniel S. Reynold’s article, Loyalty & Limited Partnership, 34 Kan. L. Rev. 1, 25-26 (1985), as follows:

“ ‘Self-dealing and conflicts of interest are endemic to the limited partnership. *** The general partners are typically the organizing entrepreneurs or promoters. They may be affiliated with the sellers of the enterprise’s assets, and are frequently involved in multiple, potentially competing related enterprises.’ ”

In the corporate context this conduct would be the subject of a shareholders’ derivative suit. Likewise, limited partners have received added protection through the enactment of section 1001 of the RULPA, which grants them the right to bring a derivative action on behalf of the partnership.

Appellant contends that the RULPA does not authorize derivative arbitration because it only allows the limited partner to bring an “action.” Appellant claims that arbitration is not an action but a private voluntary proceeding for the resolution of disputes. In support of its argument, appellant cites Madison v. Frank Lloyd Wright Foundation (1963), 20 Wis. 2d 361, 122 N.W.2d 409, Thorgaard Plumbing & Heating Co. v. King County (1967), 71 Wash. 2d 126, 426 P.2d 828, and Board of Education of the City School District v. Luna Electric Co. (1972), 40 A.D. 2d 706, 336 N.Y.S.2d 683, all of which held that arbitration was not an action but an extrajudicial proceeding. However, see Consolidated Labor Union Trust v. Clark (Fla. App. 1986), 498 So. 2d 547, and Tate v. Saratoga Savings & Loan Association (1989), 216 Cal. App. 3d 843, 265 Cal. Rptr. 440, which held that an action included arbitration. The cases cited, all from other jurisdictions, are not only not decisive on this issue, but also appear to be inconclusive.

Appellant also claims that the language of section 1001 et seq. of the RULPA is evidence that arbitration is distinct from an action which can be brought derivatively under the statute. The language cited by appellant is the word “judgment” in section 1001, “plaintiff” in section 1002 and “complaint” in section 1003. Appellant contrasts these terms with those more commonly associated with arbitration such as “award,” “claimant” and “claim” or “demand.” Appellant argues that because words found in the provisions of the statute are those most commonly used in a judicial proceeding, the term “action” does not include arbitration.

In the absence of legislative intent to the contrary, the words in a statute should be given their plain, commonly understood meaning. However, “[t]his intent is not to be ascertained from form, but from the nature and object of the act and the consequences which result from construing it one way or another.” Miller, 94 Ill. App. 3d at 17.

As stated above, the purpose of section 1001 et seq. of the RULPA is to provide added protection to limited partners as investors against the mismanagement and self-dealing of the general partner(s). In addition, where parties execute a contract which contains a valid arbitration clause, they are often irrevocably committed to arbitrate all disputes arising under the agreement. (See TDE Ltd. v. Israel (1989), 185 Ill. App. 3d 1059, 1063, 541 N.E.2d 1281; Uehlein v. Shwachman (1987), 156 Ill. App. 3d 274, 277, 509 N.E.2d 493; First Condominium Development Co. v. Apex Construction & Engineering Corp. (1984), 126 Ill. App. 3d 843, 846, 467 N.E.2d 932.) If section 1001 were interpreted as not being applicable to arbitration, and a general partner entered into a contract providing for arbitration as the exclusive remedy for the resolution of disputes, a limited partner with a claim of self-dealing or mismanagement against the general partner would not be able to act on behalf of the partnership and pursue his claim in a derivative capacity. Under these circumstances, the underlying purpose of section 1001 et seq. of the RULPA would be defeated. Therefore, in keeping with the evil the statute seeks to remedy and the goal it seeks to attain (see Miller, 94 Ill. App. 3d at 17), we interpret section 1001 et seq. of the RULPA to include arbitration as one of the actions which can be brought derivatively by a limited partner. This interpretation of the statute is also consistent with the policy in Illinois which favors arbitration as a method of settling disputes “in an easier, more expeditious and less expensive manner than by litigation.” Board of Trustees of Community College District No. 508 v. Cook County College Teachers Union, Local 1600 (1981), 102 Ill. App. 3d 681, 683, 430 N.E.2d 251.

Appellant next raises two arguments as to why it would be improper for the trial court to compel derivative arbitration under the particular circumstances of this case. Appellant’s first argument is that Venture is not a proper party to bring a derivative action on behalf of the Partnership because Venture has filed another claim against the Partnership, and the Partnership has claims against the Venture for terminating construction. Appellant claims that its interests could not be represented by an entity that is simultaneously suing it.

Venture’s claims against the Partnership, the land trust and General Partner, collectively identified as Owners, are set forth in counts I through IV and count XV of Venture’s counterclaim. Counts I, II, and IV contain allegations that the Owners are liable to Venture for various unpaid goods and services rendered by Venture under the construction contract. Count III claims that the Owners are liable to Venture for any liability Venture is found to have to its subcontractors or any other third party arising from the construction contract. The first four counts are asserted by Venture in its role as the contractor, and contain its claims for losses resulting from the termination of the project. The arbitration is also being brought by Venture to assert the claims of the Partnership for its losses due to the project’s termination. We thus conclude that Venture’s claims as a contractor against numerous entities including the Partnership do not interfere with Venture’s ability as a limited partner to represent the Partnership in a derivative capacity. Count XV alleges that the Owners withheld information from Crane Construction Company which would have been material to Crane’s decision to enter into the joint venture and the construction contract. Although these allegations are asserted against the Partnership, they are brought by Crane rather than Venture. Because it is Venture rather than Crane that is seeking derivative arbitration, appellant’s argument is not applicable in this instance.

Appellant cites two Federal cases for the proposition that a party who has a claim against an entity should not be allowed to proceed in a derivative capacity against that entity. (See Blum v. Morgan Guaranty Trust Co. (5th Cir. 1976), 539 F.2d 1388, 1390; G.A. Enterprises, Inc. v. Leisure Living Communities, Inc. (1st Cir. 1975), 517 F.2d 24, 26-27.) However, the cases cited rely upon Federal Rule of Civil Procedure 23.1, which addresses derivative actions of shareholders of corporations. There is no analogous provision in Illinois which is applicable to partnerships.

In its reply brief, appellant also argues that Crane is not managing partner of Venture and, therefore, cannot act for Venture in bringing a derivative action against Loewenberg/Fitch. Appellant thus claims that Crane has no standing to compel arbitration derivatively. However, the merits of this argument cannot be considered where it was raised for the first time in appellant’s reply brief contrary to Supreme Court Rule 341(g) (134 Ill. 2d R. 341(g)). See also People v. Thomas (1987), 116 Ill. 2d 290, 304, 507 N.E.2d 843.

Appellant next argues that Venture cannot override the General Partner’s business judgment to have the claim against Loewenberg/Fitch adjudicated by a court rather than an arbitrator and that by stipulating to the dismissal of the arbitration, the General Partner has exercised its business judgment not to proceed with arbitration. Appellant relies on Abramowitz v. Posner (2d Cir. 1982), 672 F.2d 1025, Zapata Corp. v. Maldonado (Del. 1981), 430 A.2d 779, and Powell v. Western Illinois Electric Cooperative (1989), 180 Ill. App. 3d 581, 536 N.E.2d 231, in support of its argument that a motion to compel arbitration should not have been granted without first conducting a hearing to allow the General Partner to present evidence that the refusal to arbitrate was a “good faith” exercise of its business judgment. Contrary to this argument, the hearing which was conducted on Venture’s motion to compel arbitration provided appellant with the opportunity to present evidence that its refusal to arbitrate was a good-faith exercise of its business judgment.

Furthermore, the cases cited by appellant stand for the proposition that the business judgment rule only applies where the corporate management and directors are acting independently and in good faith. Where directors sit on both sides of a transaction or otherwise engage in self-dealing, they cannot rely on the protection of the business judgment rule. (Aronson v. Lewis (Del. 1984), 473 A.2d 805, 812; Cohen v. Ayers (7th Cir. 1979), 596 F.2d 733, 739; Powell, 180 Ill. App. 3d at 585.) In this case, Venture has pursued this derivative proceeding because James Loewenberg, as the president of the General Partner and as the managing partner of Loewenberg/Fitch, does sit on both sides of the dispute between the Partnership and the architect.

Appellant also claims that arbitration would multiply the proceedings and the General Partner would be required to defend claims arising from the project in a piecemeal and inefficient fashion because the parties to the arbitration proceeding would only be some of the parties to this multiparty litigation. Appellant cites J.F. Inc. v. Vicik (1981), 99 Ill. App. 3d 815, 426 N.E.2d 257, where an arbitration was enjoined because it only involved some of the parties to a multiparty litigation. Despite appellant’s argument and its citation of authority, several more recent cases have rejected the judicial economy argument as a bar to the enforcement of a valid arbitration agreement. TDE Ltd. v. Israel (1989), 185 Ill. App. 3d 1059, 1068, 541 N.E.2d 1281; Kotsakos v. KSN Joint Venture No. 1 (1986), 142 Ill. App. 3d 533, 538, 491 N.E.2d 1322; J&K Cement Construction, Inc. v. Montalbano Builders, Inc. (1983), 119 Ill. App. 3d 663, 676, 456 N.E.2d 889.

Appellant’s last argument is that if this court determines that Venture can pursue arbitration on behalf of the Partnership, the Partnership should be made a party to the arbitration proceeding. We initially note that the Partnership is a party to the arbitration where Venture is acting derivatively on the Partnership’s behalf. Thus, the actual issue is whether appellant, also acting on behalf of the Partnership, is an indispensible party to the arbitration proceeding.

Counsel for the General Partner first raised this issue before the arbitrator on January 10, 1991, which was after the filing of its notice of appeal. The arbitrator denied the motion after counsel was unable to say what additional information his presence at the hearing could provide. Counsel then appeared before the trial court on the same day and presented an oral motion requesting that the arbitrator’s ruling regarding his presence at the arbitration be reversed. The trial court requested a written copy of the hearing before the arbitrator as well as a written copy of counsel’s motion. Counsel subsequently withdrew his oral motion. As a consequence, there was no final determination on this issue in the trial court, nor was it included in appellant’s notice of appeal. Finally, the issue was not part of the question certified for appeal pursuant to Supreme Court Rule 308(a). (See Williams v. Chicago Osteopathic Medical Center (1988), 173 Ill. App. 3d 125, 127, 527 N.E.2d 409.) Therefore, the issue of whether appellant is an indispensible party to the arbitration is not properly before this court and cannot be reviewed.

For the aforementioned reasons, we conclude that Venture as a limited partner has the right to file and pursue arbitration in a derivative capacity. Accordingly, the order of the circuit court granting Venture’s motion to compel arbitration against the Loewenberg/Fitch Partnership is affirmed.

Affirmed.

EGAN and LaPORTA, JJ., concur.


author: JUSTICE EGAN

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. CHARLES ALDRIDGE, Defendant-Appellant.
    First District (6th Division)
    No. 1—91—0473
    Opinion filed September 13, 1991.

      Randolph N. Stone, Public Defender, of Chicago (James H. Reddy, Assistant Public Defender, of counsel), for appellant.
    Jack O’Malley, State’s Attorney, of Chicago (Renee Goldfarb and James Fitzgerald, Assistant State’s Attorneys, of counsel), for the People.
   JUSTICE EGAN

delivered the opinion of the court:

The defendant, Charles Aldridge, entered a plea of guilty to burglary on October 25, 1990, and was sentenced to three years’ imprisonment. On November 30, 1990, the clerk of the circuit court file stamped the defendant’s pro se motion to vacate his guilty plea. According to the defendant’s certificate of service, he mailed his motion on November 23, 1990. On December 7, 1990, the court entered its order finding that the defendant had filed his motion to withdraw the plea after the statutory time limit of 30 days had run. The court held that the date the clerk received the motion was controlling, not the date the motion was filed. The question of which date controls post-hearing motions in criminal cases has not been decided in this district.

Illinois Supreme Court Rule 604(d) (134 Ill. 2d R. 604(d)) reads in part as follows:

“No appeal from a judgment entered upon a plea of guilty shall be taken unless the defendant, within 30 days of the date on which sentence is imposed, files in the trial court a motion to withdraw his plea of guilty and vacate the judgment.”

The Illinois Supreme Court has held that notices of appeal mailed within the 30-day period and received thereafter are timely filed. (Harrisburg-Raleigh Airport Authority v. Department of Revenue (1989), 126 Ill. 2d 326, 533 N.E.2d 1072.) The court stated, however, that it expressed no opinion as to whether this policy would apply to other papers filed in the circuit court, such as post-trial motions.

In People v. Pagel (1990), 197 Ill. App. 3d 305, 553 N.E.2d 1110, the defendant pleaded guilty on January 17, 1989. The proof of service indicated that the defendant mailed his motion to withdraw his plea of guilty on February 16, 1989. The envelope containing the motion was postmarked February 17, 1989, the 31st day after sentencing. The motion was stamped by the clerk on February 21, 1989. The State argued that the postmark date controlled. Implicitly -the State conceded that the date the clerk received the motion was not decisive. The Fourth District Appellate Court agreed with the defendant’s argument that the date alleged in the affidavit of proof of service controlled.

In People v. Easley (1990), 199 Ill. App. 3d 179, 556 N.E.2d 802, the defendant was sentenced on May 16, 1989, on his plea of guilty. On June 14, 1989, he prepared a motion to reduce sentence. His verified proof of service stated that on June 14, 1989, he deposited the motion in the United States Mail at the correction center where he was incarcerated. A Department of Corrections mailing voucher indicated that the defendant signed a voucher on June 15, 1989, directing that an unspecified amount be charged to his account for “legal mailing” which was required to go out. Accompanying the voucher was a verified letter from the defendant to the trial judge stating that on June 15, 1989, the defendant put an envelope containing the motion in a mailbag provided for his unit but that the mail did not go out until June 19, 1989. The clerk of the court received the motion on June 20, 1989. Again, the Fourth District Appellate Court, relying on Pa-gel, upheld the timeliness of the motion.

In People v. Simmons (1987), 164 Ill. App. 3d 205, 517 N.E.2d 1106, the defendant was sentenced on his plea of guilty on January 25, 1986. He filed a motion to withdraw his plea of guilty on February 22, 1986. The motion was received by the circuit court on February 25, 1986. The proof of service was dated February 21, 1986, and the envelope containing the motion had the Menard Correctional Center’s mail-stamp date of February 22, 1986. The Fifth District Appellate Court reversed the order dismissing the motion and held that the motion had been timely filed.

The second district of this court has held that the mailing of a civil post-trial motion on the 29th day after the entry of summary judgment was timely, notwithstanding that the clerk of the court did not receive it until the 31st day. (A.S. Schulman Electric Co. v. Village of Fox Lake (1983), 115 Ill. App. 3d 746, 450 N.E.2d 1356; but see Kelly v. Mazzie (1990), 207 Ill. App. 3d 251, 565 N.E.2d 719; Wilkins v. Dellenback (1986), 149 Ill. App. 3d 549, 500 N.E.2d 692.) In Kelly the Second District Appellate Court held that the date of the filing of a complaint controlled; in Wilkins the same court held that the date of a filing of a section 2 — 1401 petition controls. Both Kelly and Wilkins acknowledged that the “ ‘weight of recent authority evinces a policy favoring the acceptance of the mailing date rather than the receiving date of certain documents *** as the filing date of those documents.’ ” (Kelly, 207 Ill. App. 3d at 253, quoting Wilkins, 149 Ill. App. 3d at 553.) In both Kelly and Wilkins, however, the timeliness of the motions was not recognized because both the complaint and the section 2 — 1401 petitions involved a statute of limitations.

The first district has held controlling the date a section 2 — 1301 motion to vacate was received by the clerk. Cruz v. Columbus-Cuneo-Cabrini Medical Center (1990), 194 Ill. App. 3d 1037, 551 N.E.2d 1345.

We recognize that we are not bound to follow the decisions of the appellate courts of other districts in this State. (Roby v. Illinois Founders Insurance Co. (1978), 57 Ill. App. 3d 89, 372 N.E.2d 1097.) For the purpose of criminal appeals, however, we choose to follow the liberal view of the fourth and fifth districts and conclude that because defendant’s proof of certificate of service recited a timely mailing date, the defendant’s motion for withdrawal of his guilty plea was timely. In our judgment this construction avoids an unduly harsh and unjust result. Any other result would allow defendants in certain parts of the State to vacate their guilty pleas under certain circumstances while those in other parts could not.

For these reasons, this cause is remanded to the circuit court with directions to vacate the order of dismissal, to consider the motion to withdraw the plea of guilty and to take whatever action the circuit court deems necessary. People v. Simmons (1987), 164 Ill. App. 3d 205, 517 N.E.2d 1106.

Remanded with directions.

RAKOWSKI, P.J., and LaPORTA, J., concur.


text:
    FOREST PRESERVE DISTRICT OF COOK COUNTY, Plaintiff-Appellant, v. MOUNT GREENWOOD BANK LAND TRUST 5—0899 et al., Defendants-Appellees.
    First District (6th Division)
    No. 1—91—0743
    Opinion filed September 13, 1991.
    Greg A. Kinczewski, of Forest Preserve District of Cook County, and Earl L. Neal & Associates, both of Chicago, for appellant.
    George J. Anos, Lawrence M. Freedman, Barry Ash, and Yolanda M. Kielar, all of Ash, Anos, Freedman & Logan, and Burke & Ryan, both of Chicago, for appellees.
   PRESIDING JUSTICE RAKOWSKI

delivered the opinion of the court:

The Forest Preserve District of Cook County (District) filed a complaint against defendants Mount Greenwood Bank land trust 5 — 0899, Patrie D. Greene and Green Development Group, Inc. (Defendants), seeking to enjoin Defendants from cutting trees, moving earth and otherwise destroying the forest and natural beauty on Defendants’ property. The complaint alleged that the subject property adjoined the District’s adjoining Dan Ryan Woods Forest Preserve and that the District desired to acquire Defendants’ property as an addition to the District’s adjoining forest preserve. The District prayed for an injunction to maintain the status quo and preserve the subject property until it was acquired by the District.

The trial court issued a temporary restraining order. Subsequently, however, the trial court heard evidence, and at the close of the District’s case, denied the District’s motion for a preliminary injunction. The District appeals the trial court’s ruling. We reverse.

The relevant facts necessary to disposition of this appeal are as follows. The District is a body corporate and politic established pursuant to “An Act in relation to the creation and management of forest preserve districts in counties having a population of 3,000,000 or more, amending certain Acts named therein to conform thereto” (Ill. Rev. Stat. 1989, ch. 961/2, par. 6401 et seq.). The governing body of the District is the Board of Commissioners of Cook County, and the District is co-extensive with Cook County, Illinois, where the subject property is located. Defendants are a land trust, an individual and a corporation who collectively own the subject property.

The property at issue is a narrow strip of land which comprises approximately 14x/2 acres. It is located in the Beverly neighborhood of Chicago, Illinois, between 87th Street at the north end and 90th Street on the south end. The property was once a railroad right-of-way; the right-of-way has been abandoned for years, however. Until the activities of Defendants, the land has been forested and undeveloped. Defendants purchased 4.3 acres of the property in December of 1989, and 10 acres in January of 1991. Previous to November 7, 1990, the property had been zoned single-family residential (R1 and R2). At this time, however, the City of Chicago adopted an ordinance establishing a residential planned development. The City of Chicago issued a building permit for Defendants to begin construction in December of 1990.

The District’s Dan Ryan Woods Forest Preserve adjoins the subject property. This forest preserve comprises approximately 200 acres. About 50% of the Dan Ryan Woods is forested, including the portion of the Dan Ryan Woods which is immediately adjoining the subject property.

On February 14, 1991, the real estate committee of the District met and approved a report authorizing the District “to enter into negotiations for the acquisition of the property adjacent to the Dan Ryan Woods contingent on the Forest Preserve District administration returning to the Board of Commissioners for final approval of the price and acquisition.” On February 15, 1991, the chief attorney of the District wrote to Defendants seeking “to negotiate for the purchase” of the subject property. No response from Defendants to this letter forthcame. On February 22, 1991, the District’s attorney hand-delivered another letter to Defendants advising Defendants that the District was aware that Defendants had begun developing the property, requesting Defendants to cease development of the property and renewing the District’s offer to negotiate the purchase of the property. Prior to delivery of the second letter, on February 19, 1991, the District’s Board met and approved the real estate committee’s report.

The District filed its complaint on February 25, 1991. The District alleged that the subject property contained numerous types of trees and high quality ground cover that the District sought to protect and preserve. It was further alleged that after the District sent its initial letter to Defendants seeking to negotiate for the purchase of the property, Defendants commenced to develop the property and that the development of the property was destroying not only the flora and scenic beauty of the subject premises, but that the development of the subject property adversely disrupted the water balance necessary to preserve and protect flora on the Dan Ryan Woods. Alleging irreparable damage to both the subject property and the Dan Ryan Woods, the complaint sought a temporary restraining order, which the trial court granted.

Defendants answered the complaint on February 28, 1991. Defendants admitted ownership of the property, and Defendants admitted that they had commenced development of the property. The answer denied, however, that the property contained valuable trees and other flora, and that their activities would damage the Dan Ryan Woods. Affirmatively, Defendants alleged that they had obtained Chicago Plan Commission and Chicago city council permission for rezoning the property. Fifty-nine residences, according to Defendants, were planned for the property, one of which was 95% complete. The nearly complete residence was under a contract of sale to a third party. The answer further averred that a consultant had found that the subject property was not a wetland, and that this finding had been accepted by the United States Corps of Engineers.

Defendants filed a motion to dissolve the temporary restraining order along with the answer. The motion was accompanied by documentation, and alleged, inter alia, that the District had no standing to bring the action.

The District’s motion for a preliminary injunction was heard on March 7 and 8, 1991. At the outset, the trial court dismissed the District’s claim “to the *** extent of plaintiff’s status as a condemnor.” At the time the trial court ruled on this issue, the evidence showed that the District’s real estate committee had scheduled a meeting for the 12th of March to receive appraisals on the subject property. The hearing continued solely on the issue of whether the Dan Ryan Woods would be damaged by Defendants’ development activities.

The District put on several witnesses, including an environmental engineer for the United States Army Corps of Engineers, the individual who videotaped Defendants’ development activities, the chief forester of the District, a research scientist/ecological consultant, and an ecologist. Upon the completion of the District’s case, the trial court ruled that the preliminary injunction was denied.

The District has raised two issues on appeal, namely: (1) whether the trial court erred in denying the District’s motion for a preliminary injunction to stop development on the subject property when the District was seeking to condemn the property; and (2) whether the trial court erred in denying the District’s motion for a preliminary injunction based on the alleged damage that would occur to the District’s Dan Ryan Woods property, the standing which the District has to this property being unchallenged. Due to our resolution of the first issue, we need not consider the second.

Section 7 (HI. Rev. Stat. 1989, ch. 96x/2, par. 6410) provides in pertinent part that the District:

“[SJhall have the power to acquire in fee simple *** lands containing one or more natural forests or parts thereof *** for the purpose of protecting and preserving the flora, fauna, and scenic beauties within such district, and to *** protect and preserve the natural forests and such lands together with their flora and fauna, as nearly as may be, in their natural state and condition, for the purpose of the education, pleasure, and recreation of the public. Lands may be acquired in fee simple for the consolidation of such preserves into unit areas of size and form convenient and desirable for public use[.]”

Section 8 (Ill. Rev. Stat. 1989, ch. 96V2, par. 6411) provides in relevant part:

“Any forest preserve district shall have power to acquire lands in fee simple and grounds within such district for the aforesaid purposes by gift, grant, legacy, purchase or condemnation and to construct, lay out, improve and maintain *** improvements and facilities in and through such forest preserves as it shall deem necessary or desirable for the use of such forest preserves by the public.”

In this case, Defendants argue that the trial court was correct to deny the District’s motion for a preliminary injunction (or to grant Defendant’s motion to dismiss the District’s action) based on the standing issue due to the trial court’s proper weighing of traditional equitable considerations in actions for injunctive relief, and due to the fact that as the District was only potentially entitled to possession of the property, the District had no enforceable rights to the property.

The District, on the other hand, argues that the trial court erred in denying it injunctive relief because the trial court failed “to apply the time-tested principle that land development activities can be stopped during a period when a governmental agency is in the midst of planning or enacting laws that would make such development illegal.” In support of its argument, the District cites a number of cases which are distinguishable in the respect that there, the courts stopped development or demolition activities when the governmental agency was in the process of amending or sought to amend zoning ordinances which would restrict the complained-of activities or complained-of changes to the properties. (See Chicago Title & Trust Co. v. Village of Palatine (1959), 22 Ill. App. 2d 264, 160 N.E.2d 697; Hunter v. Adams (1960), 180 Cal. 2d 511, 4 Cal. Rptr. 776.) The District also cites cases wherein the denial of building permits were upheld when the proposed areas were subject to future condemnation. (See East Rutherford Industrial Park, Inc. v. State of New Jersey (1972), 119 N.J. Super. 352, 291 A.2d 588; Briggs v. State Department of Parks & Recreation (1979), 98 Cal. App. 3d 190, 159 Cal. Rptr. 390.) Here, the City of Chicago is not in the process of amending its zoning classifications of the subject property nor was the issuance of a building permit at issue. In fact, due to Defendants’ efforts preceding the instant controversy, the City had changed the zoning classification, and building permits had been awarded Defendants.

Notwithstanding the above, we are convinced that Defendants should have been enjoined from continuing their development activities on the subject property. The District’s complaint prayed for an injunction “while the District negotiates for or condemns the premises.” The complaint further informed the court that the District, as is required by law, had been in the process of first negotiating for the purchase of the property before filing a condemnation action. (See Ill. Rev. Stat. 1989, ch. 110, par. 7 — 102.) At the time of the hearing, the authority of the District to negotiate the purchase of the property had been approved by the District’s real estate committee and the District’s board. The trial court was informed, and the record reveals no reason to doubt, that the District’s real estate committee was meeting in five days to consider the definitive ordinance.

By failing to grant the injunction, which could have been dissolved at a later date should the District fail to pursue the matter, the District appears to have been forced to immediately appeal the matter. Too, the District, consistent with its representations, has in fact filed a condemnation proceeding. Further development of the property would be contrary to the District’s planned and statutorily permitted use of the property. Under the unique circumstances of this case, the trial court should have granted the District injunctive relief.

A traditional equitable analysis enforces our holding. One seeking the issuance of a preliminary injunction must establish each of the following elements: (1) he possesses a clearly ascertainable right or interest which needs protection; (2) he has no remedy at law; (3) irreparable harm will result if the preliminary injunction is not granted; and (4) he has a likelihood of success on the merits. (The Instrumentalist Co. v. Band, Inc. (1985), 134 Ill. App. 3d 884, 891, 480 N.E.2d 1273.) Additionally, the trial court must conclude that the benefits of granting the injunction outweigh the possible injury that the opposing party might suffer as a result thereof. Gannett Outdoor v. Baise (1987), 163 Ill. App. 3d 717, 721, 516 N.E.2d 915.

Here, the District’s statutory power to acquire the subject property is not at issue, and the District’s interest in protecting the property, for the benefit of the public, is free from doubt. The destruction of the flora and fauna could not be remedied at law. Destruction of the flora, fauna and scenic beauty would be irreparable, and indeed, final. Given the District’s statutory grant of authority to acquire the property, success on the merits was likely. While Defendants have argued that they would be tremendously injured by the granting of injunctive relief, it is to be remembered that an attempt at agreement as to compensation for condemned property must be both bona fide and in good faith (Forest Preserve District v. Marquette National Bank (1991), 208 Ill. App. 3d 823, 567 N.E.2d 635) and the very purpose of condemnation proceedings is to determine the just compensation due the owner. Thus, we are convinced that the benefits to the District of providing injunctive relief outweigh the potential injury to Defendants.

Accordingly, the judgment of the circuit court is reversed.

Reversed.

McNAMARA and LaPORTA, JJ., concur.


author: JUSTICE DUNN

text:
    DOUGLAS FELDE et al., Plaintiffs-Appellees, v. CHRYSLER CREDIT CORPORATION, Defendant-Appellant.
    Second District
    No. 2—90—1096
    Opinion filed October 25, 1991.

      David G. Duggan, of Abramson & Fox, and Maurice J. McCarthy, both of Chicago (James W. Fessler, of counsel), for appellant.
    Norman H. Lehrer and R. Lawrence Canavan, both of Lehrer, Flaherty & Canavan, of Wheaton (Maureen H. Flaherty, of counsel), for appellees.
   JUSTICE DUNN

delivered the opinion of the court:

Defendant, Chrysler Credit Corporation (CCC), appeals from a judgment of the circuit court of Du Page County ordering rescission of a retail installment sales contract for the purchase of an automobile signed by plaintiffs, Douglas and Gina Felde, and return to the Feldes of the $3,000 they had paid pursuant to the contract. CCC makes the following contentions on appeal: (1) that the Feldes had no right of action against CCC for alleged breaches of warranty by the automobile manufacturer and seller; (2) that the claim against CCC was barred under the doctrine of res judicata because of an order dismissing claims against other defendants pursuant to a settlement agreement; (3) that permitting the action against CCC to continue after the settlement resulted in multiple recovery; and (4) that the trial court failed in awarding damages to offset the benefits received by Gina in using the automobile.

The Feldes’ second amended complaint was directed against defendants, Chrysler Corporation, Schaumburg Dodge, Elmhurst Dodge, and CCC. In count I, plaintiffs alleged that they purchased an automobile manufactured by Chrysler Corporation from Schaumburg Dodge on September 4, 1986. In connection with this purchase, the above two defendants provided plaintiffs with written warranties stating the car was free of all defects in materials and workmanship, and, if any such defects were discovered within a specified amount of time or mileage driven, these two defendants would repair or replace the car at no cost to plaintiffs.

According to count I, these defendants breached the warranties because of defects which caused the car to intermittently surge forward and accelerate uncontrollably and the failure of these defendants to fix this problem although plaintiffs brought the car in for repairs on several occasions. These defects substantially impaired the value of the car to plaintiffs. Plaintiffs sought to have the contract “cancelled and revoked,” and they sought damages. They also sought attorney fees pursuant to the Magnuson-Moss Warranty Act (15 U.S.C. §2301 et seq. (1982)).

In count II, plaintiffs realleged the above facts and asserted that Chrysler Corporation and Schaumburg Dodge breached the implied warranty of merchantability set forth in section 2 — 314 of the Uniform Commercial Code (Ill. Rev. Stat. 1989, ch. 26, par. 2 — 314). Plaintiffs sought the same relief they requested in count I.

Count III was directed against CCC and was the only count directed against it. Plaintiffs entitled this count “Revocation of Retail Installment [sic] against Assignee Pursuant to Federal Regulation 16 C.F.R. Sec. 433.2.” In count III, plaintiffs realleged the facts alleged in the prior counts. They alleged further that, at the time they purchased the car, they signed a retail installment sales contract which was subsequently assigned to CCC. As required by the regulation codified at 16 C.F.R. §433.2 (1991), the contract stated:

“Any holder of this consumer credit contract is subject to all claims and defenses which the debtor could assert against the seller of goods or services obtained pursuant hereto or with the proceeds hereof.”

Plaintiffs additionally alleged in count III that the various breaches of warranty previously alleged constituted defenses and claims against the seller. They prayed for cancellation and revocation of the retail installment sales contract, return of all sums they had paid to CCC under the contract, and costs and attorney fees.

In count IV, plaintiffs alleged negligent repair on the part of Chrysler Corporation, Schaumburg Dodge, and Elmhurst Dodge. Plaintiffs stated in this count that they brought the car to Schaumburg Dodge and Elmhurst Dodge on numerous occasions in 1986 and 1987, but those defendants negligently failed to repair the defects. As a result of their negligence, on September 11, 1987, the Felde car accelerated uncontrollably and crashed into another car resulting in injuries to Gina. They sought damages in this count for those injuries and for damage to the car.

Each of the defendants, with the exception of CCC, entered into settlement agreements with plaintiffs. Pursuant to those agreements, plaintiffs received a total of $33,000 from these defendants. On August 29, 1990, the trial court entered an order approving plaintiffs’ settlement against Chrysler Corporation and Elmhurst Dodge and dismissing the claims against these defendants with prejudice. Six days later, the court approved the settlement with Schaumburg Dodge and entered an order dismissing the claims against said defendant.

On September 4, 1990, the date of trial, CCC presented a motion to dismiss the action pursuant to section 2 — 619 of the Code of Civil Procedure (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 619). CCC argued in the motion, inter alia, that under the doctrine of res judicata the dismissal of plaintiffs’ claims against the other defendants barred the claim against CCC. The trial court took the motion under advisement, and the trial commenced.

Plaintiff Gina Moser, formerly known as Gina Felde, testified that on September 4, 1986, she and her ex-husband purchased a 1986 Dodge Daytona automobile from the Schaumburg Dodge dealership. She signed a retail installment sales contract which provided that she would make 48 monthly payments of $250, and that the contract would be assigned to CCC. Gina received the standard seven-year or 70,000-mile written warranty which Chrysler was offering that year.

According to Gina, during the third week she owned the car, she noticed it would sometimes surge forward and accelerate by itself. This could happen any time the speed of the car was between 5 and 60 miles per hour. She took the car to Schaumburg Dodge for repairs that week, and they replaced the throttle sensor. The problem recurred, however, and Gina did not feel safe driving the car. She took it to Schaumburg Dodge two or three more times, but they were unable to correct the problem.

. Gina then began taking the car to Elmhurst Dodge for repairs. She took it there five times because of the same problem, and they replaced the throttle sensor three times. The sudden acceleration problem continued to recur, however. On September 11, 1987, Gina was involved in an accident while driving the car. The accident occurred after Gina stopped behind a truck at a traffic signal. After the light turned green, she took her foot off the brake, and the car lurched forward, hitting the truck. Gina had not placed her foot on the accelerator when this happened.

After the accident, Gina had the car towed to Schaumburg Dodge. The manager of Schaumburg Dodge called Gina the next day and stated that she would be charged a daily fee for storage. She told the manager that, as far as she was concerned, they could keep the car. Gina had not seen the car since that date. She no longer had the written warranty that had been given to her when she bought the car because the warranty was in the glove compartment when the car was left at the dealership.

When asked on cross-examination whether the $250 monthly payment for the car was a fair amount, Gina testified that it was for the first month but not thereafter. Gina further testified that she was currently leasing a Mazda automobile for $265.88 per month.

Gordon McDowell testified that he is the service manager for Schaumburg Dodge. He had also worked for Chrysler Corporation between 1978 and 1985 as a service training instructor and a district manager. McDowell trained mechanics that worked at various Chrysler dealerships. He stated that Chrysler performs its warranty repair through franchise dealerships such as Schaumburg Dodge and Elmhurst Dodge.

McDowell reviewed the repair records from the two dealerships for the Felde car but did not examine the vehicle itself. In his opinion, the car had a high idle condition which could have exhibited itself in an erratic fashion. This problem was caused by a defective throttle position sensor, defects in the wiring between the throttle position sensor and the car’s computer or an automatic idle speed motor. McDowell’s review of the records revealed that the throttle position sensor was replaced three times on the Felde car.

McDowell was the supervisor of the mechanics who worked on the Felde car. He testified that the car had warranty coverage for the power train and emissions at the time of the accident. The warranty covered all components that may have caused the high idle condition. McDowell felt that the car was safe to drive and the accident was caused by driver error. Nevertheless, on those occasions where the car was brought in for repairs, he would not have released it to the customer because the high idle problem was not repaired.

James Switalski, a certified mechanic who once taught automotive technology courses at a community college, testified for plaintiffs. Switalski examined repair records for the car and also looked at the car one time in October 1987, although he was unable to open the hood because of damage from the accident. Switalski tried to start the car but it would not start.

In Switalski’s opinion, the car had a problem with sudden acceleration which was likely due to a faulty fuel delivery system. Switalski was not sure which component of the car had caused the problem. He felt the problem was erratic and it was a recurring problem. In Switalski’s opinion, the car was not repaired properly, and it was not safe to drive.

The trial judge, hearing the case without a jury, entered a judgment order rescinding the retail installment sales contract and awarding $3,000 to plaintiffs. CCC now appeals from that judgment order.

The Federal regulation codified at 16 C.F.R. §433.2 (1991) provides that it is an unfair or deceptive act or practice under the Federal Trade Commission Act (15 U.S.C. §41 et seq. (1982)) in connection with any sale or lease of goods or services to consumers, in or affecting commerce to take or receive a consumer credit contract or accept as full or partial payment for the sale or lease the proceeds of any purchase money loan unless the consumer credit contract involved contains the following notice in bold face 10-point type:

“ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.” (16 C.F.R. §433.2 (1991).)

The retail installment sales contract signed by the Feldes and assigned to CCC contained the above notice.

In arguing that the Feldes did not have a cause of action against it under the circumstances of this case, CCC emphasizes an FTC interpretation stating that the above regulation “does not create new rights or defenses.” (41 Fed. Reg. at 20023-34 (1976).) Prior to the adoption of the rule, a creditor in CCC’s position could avail itself of the holder-in-due-course principle (see Ill. Rev. Stat. 1989, ch. 26, par. 3 — 302) and demand payment by the consumer despite misrepresentation, breach of warranty or contract, or even fraud on the seller’s part. (Ford Motor Credit Co. v. Morgan (1989), 404 Mass. 537, 541, 536 N.E.2d 587, 589.) The rule was designed to preserve the consumer’s claims and defenses and restore the right of nonpayment to the consumer by eliminating the creditor’s holder-in-due-course status. Morgan, 404 Mass. at 541, 536 N.E.2d at 589.

In promulgating the regulation codified at 16 C.F.R. §433.2 (1991), the FTC also intended to permit the consumer to maintain an action against the assignee-creditor for a refund of all money paid on account. (404 Mass, at 541, 536 N.E.2d at 589; 40 Fed. Reg. at 53524 (1975).) Such relief was only intended to be available if the seller’s breach was so substantial that rescission and restitution were justified under applicable State law principles. (404 Mass, at 542, 536 N.E.2d at 589; Eachen v. Scott Housing Systems, Inc. (M.D. Ala. 1986), 630 F. Supp. 162, 165; 40 Fed. Reg. at 53524 (1975).) The FTC stated in regard to the regulation that consumers “will not be in a position to obtain an affirmative recovery from a creditor unless they have actually commenced payments and received little or nothing of value from the seller.” 40 Fed. Reg. at 53527 (1975).

Thus, as CCC asserts, the regulation does not create new claims or defenses. It does, however, enable the consumer to assert defenses and, in some instances, claims against an assignee-creditor which could previously have only been asserted against a seller. While CCC contends that the rule was not intended to permit consumers to assert breach of warranty claims against the assignee-creditor, this argument lacks merit. Under the principles set forth in the preceding paragraph, the consumer could successfully maintain an action against an assignee-creditor for any sums paid on account if a breach of warranty on the seller’s part was sufficiently egregious to warrant rescission of the sales contract under the applicable State law.

CCC also argues that, even if recovery against the assignee is justified under some circumstances for breach of the seller’s warranty, such recovery was improper in this case because plaintiffs never introduced any written warranty into evidence. As we have seen, Gina testified that the written warranty was in the glove compartment of the car when she had it towed to the dealership after the accident and told the manager they could keep it.

In support of this contention, CCC cites Lytle v. Roto Lincoln Mercury & Subaru, Inc. (1988), 167 Ill. App. 3d 508, for the proposition that a document titled “New Vehicle Preparation” which Schaumburg Dodge gave to the Feldes and which specified certain things that had been done in inspecting and testing the car on the date of the sale did not constitute a written warranty. In Lytle, this court held that a similar form entitled “New Car Get Ready” did not constitute a written warranty under the Magnuson-Moss Warranty Act (15 U.S.C. §2301 et seq. (1982)). (Lytle, 167 Ill. App. 3d at 516.) This meant that the Magnuson-Moss provision invalidating disclaimers of the implied warranty of merchantability set forth in section 2 — 314 of the Uniform Commercial Code (Ill. Rev. Stat. 1989, ch. 26, par. 2— 314) if the seller issues a written warranty to the consumer concerning the product (see 15 U.S.C. §2308 (1982)) did not apply. See Lytle, 167 Ill. App. 3d at 516-17. This court also held that the evidence failed to show that the seller adopted the manufacturer’s written warranty. 167 Ill. App. 3d at 514-15.

In the case at bar, unlike Lytle, however, there was ample evidence that Chrysler had issued a written warranty to plaintiffs and that Schaumburg Dodge adopted the warranty. Gina testified that she received the standard seven-year or 70,000-mile written warranty for the car that Chrysler was offering in 1986. Gordon McDowell testified that, at the time of the accident involving the Felde car, it was covered by a warranty which covered repairs to all portions of the vehicle which could have caused the car’s defective condition. The work orders from Schaumburg and Elmhurst Dodge for repairs to the car were introduced into evidence; none showed any charge for the repairs, and the ones from Elmhurst Dodge were captioned “Warranty Repair Order.”

Additionally, the dealer invoice given to the Feldes by Schaumburg Dodge states that no warranties have been made by the dealer or manufacturer “excepting only Chrysler Corporation’s current printed warranty applicable to such vehicle or vehicle chassis which warranty is incorporated herein and made a part hereof and a copy of which will be delivered to buyer at the time of delivery of the new motor vehicle or motor vehicle chassis.” Therefore, the evidence clearly established the existence of a written warranty issued to the Feldes by Chrysler Corporation for repairs at no cost for any defective parts in the power train. The evidence further established that Schaumburg Dodge adopted the Chrysler warranty since it was explicitly incorporated into the dealer invoice which set forth the conditions of the sale. Therefore, under section 2308 of the Magnuson-Moss Warranty Act (15 U.S.C. §2308 (1982)), Schaumburg-Dodge’s disclaimer of the implied warranty of merchantability was invalid. That warranty, which requires among other things that the goods “are fit for the ordinary purposes for which such goods are used,” was therefore implied in the sales contract in this case. Ill. Rev. Stat. 1989, ch. 26, par. 2-314(2)(c).

We must next consider whether the breaches of warranty in this case were egregious enough to justify rescission under Illinois law. CCC asserts that this issue need not be considered because plaintiffs did not seek rescission in the complaint. We disagree. CCC emphasizes that the caption of count III, the only count directed against it, specifies that relief is sought pursuant to the regulation codified at 16 C.F.R. §433.2 (1991). However, the relief mentioned in the caption is revocation of the retail installment contract, and, toward the end of the count, plaintiffs request that this contract be “judicially cancelled and revoked” and that plaintiffs receive a judgment for all sums paid to CCC under the contract. Count III therefore states a claim for rescission of the contract and clearly placed CCC on notice that plaintiffs were seeking such relief.

It is well established that a party may seek rescission of a contract if there has been substantial nonperformance or a substantial breach by another party. (Eager v. Berke (1957), 11 Ill. 2d 50, 54; Farmer v. Koen (1989), 187 Ill. App. 3d 47, 50.) The test to be employed in making this determination is “whether *** the matter, in respect to which the failure of performance occurs, is of such a nature and of such importance that the contract would not have been made without it.” (Trapkus v. Edstrom’s, Inc. (1986), 140 Ill. App. 3d 720, 725.) The trial court’s decision on a claim for rescission will not be disturbed upon review absent an abuse of discretion. Farmer, 187 Ill. App. 3d at 50.

The evidence at trial established that Chrysler breached its express warranty to keep the power train of the Felde vehicle in good repair through the failure of the dealerships to repair the car’s sudden acceleration problem. Additionally, the evidence supported a conclusion that Chrysler breached the implied warranty of merchantability (Ill. Rev. Stat. 1989, ch. 26, par. 2 — 314) in light of Switalski’s testimony that the car was unsafe to drive which would indicate it was not fit for the ordinary purpose for which an automobile is used (see Ill. Rev. Stat. 1989, ch. 26, par. 2 — 314(2)(c)). Applying the test set forth in Trapkus, the trial court could have concluded reasonably that the Feldes would not have contracted to purchase the car had they known of the sudden acceleration problem and that the Chrysler dealerships would be unable to repair it. Indeed, it would seem few consumers would be willing to purchase a car with such a defect in light of the possibility that it could cause an accident by unexpectedly accelerating. Accordingly, the trial court’s decision to rescind the retail installment sales contract was not an abuse of discretion.

CCC also maintains in its reply brief that rescission is not a proper remedy for breach of warranty under section 2 — 714 of the Uniform Commercial Code. That provision states in part as follows:

“The measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.” Ill. Rev. Stat. 1989, ch. 26, par. 2 — 714(2).

The drafters of the Uniform Commercial Code clearly intended that it would be supplemented by common-law principles. (Ill. Rev. Stat. 1989, ch. 26, par. 1 — 103; Spec-Cast, Inc. v. First National Bank & Trust Co. (1989), 128 Ill. 2d 167, 173.) Section 1 — 103 specifically states that, “[u]nless displaced by the particular provisions of this Act, the principles of law and equity *** shall supplement its provisions.” (Ill. Rev. Stat. 1989, ch. 26, par. 1 — 103.) Since section 2 — 714 contains no language precluding buyers from seeking the remedy of rescission in appropriate instances due to breaches of warranty, we reject CCC’s contention.

CCC also contends that the damage award to it results in a multiple recovery to the Feldes in light of the $33,000 they received from settlements with the other defendants. Since the purpose of compensatory damages is to compensate the plaintiff rather than to award the plaintiff a windfall, it has long been recognized that plaintiff is entitled to only one satisfaction for an injury. (McLane v. Russell (1989), 131 Ill. 2d 509, 523.) In McLane, the court held it was proper for the trial court to set off a portion of a settlement "with a different defendant to avoid potential excess recovery for the same injury, loss of an undivided one-half interest in a farm. 131 Ill. 2d at 524.

The court in McLane distinguished the case from Clear-Vu Packaging, Inc. v. National Union Fire Insurance Co. (1982), 105 Ill. App. 3d 671. In Clear-Vu, this court held that the settlement proceeds recovered from one defendant should not be set off against recovery from the remaining defendant when the two defendants were not liable for a single indivisible injury to plaintiff; rather, there were distinct losses. Clear-Vu, 105 Ill. App. 3d at 675-76.

In the case at bar, plaintiffs’ recovery from CCC did arise from the breaches of warranty by the seller and manufacturer. However, we note that plaintiffs were only entitled to a return of the sums already paid under the retail installment sales contract with regard to their rescission claim against CCC. In the breach of warranty counts against Chrysler Corporation and Schaumburg Dodge, plaintiffs sought relief that they could not possibly have obtained against CCC including attorney fees under the Magnuson-Moss Act (15 U.S.C. §2310(d)(2) (1982)) and consequential damages. Additionally, in count IV, Gina sought personal-injury damages for injuries suffered in the September 1987 accident as a result of the other defendants’ negligent failure to repair her car. Clearly, this was a separate and distinct injury from that for which plaintiffs sought relief against CCC.

Thus, it is clear that there were separate and distinct damage claims brought against the other defendants and that no recovery could have been sought on these claims against CCC. The record does not reveal any apportionment of the settlement amount among the various claims. Therefore, CCC cannot establish that plaintiffs received an excess recovery and its argument must therefore be rejected.

CCC also complains that, in light of the Feldes’ substantial recovery ($36,000), they must have improperly received damages for economic loss in violation of the doctrine set forth in Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69. The Moorman doctrine, however, only bars such damages in tort actions. (Moorman, 91 Ill. 2d at 88.) The claim we are considering in this case is clearly a contract claim. CCC’s argument is therefore meritless.

CCC next contends that plaintiffs’ claim against it was barred under the doctrine of res judicata because of the orders dismissing the claims against the other defendants following the settlements. The doctrine of res judicata provides that a final judgment by a court of competent jurisdiction acts as an absolute bar to relitigation of the identical cause of action between the same parties or their privies. (Harmon v. Ladar Corp. (1990), 200 Ill. App. 3d 79, 83.) The doctrine only applies if the judgment in question was a final judgment on the merits. People v. Kidd (1947), 398 Ill. 405, 408-09.

Causes of action will be considered the same for purposes of res judicata if the underlying facts and the relief sought are substantially the same. (Knodle v. Jeffrey (1989), 189 Ill. App. 3d 877, 886.) The relief sought from CCC was quite different from the relief sought from the other defendants. As we have seen, the only relief sought from CCC was cancellation of the retail installment sales contract and return of the payments made pursuant to it. Gina sought to recover from the other defendants for damage to her car and personal injury to herself. She also sought attorney fees. Because the relief sought from CCC was distinct from the relief sought from the other defendants, res judicata does not apply.

Additionally, one of the primary purposes of res judicata is to promote judicial economy by requiring parties to litigate in one lawsuit all rights arising from the same set of operative facts. (Knodle, 189 Ill. App. 3d at 885.) Gina did this by raising her claim against CCC in the same complaint in which her claims against the other defendants were brought. To hold that a dismissal with prejudice of some defendants in a lawsuit pursuant to a settlement agreement could operate as a bar of further proceedings in the same lawsuit against a nonsettling defendant would not advance the above purpose. Such a holding would also be contrary to the Illinois public policy of encouraging settlements. (See Illinois State Toll Highway Authority v. Heritage Standard Bank & Trust Co. (1990), 196 Ill. App. 3d 5, 22.) Res judicata is also inapplicable for this reason.

Finally, CCC argues that the circuit court failed to apply the proper measure of damages and did not take into account the benefits received by the Feldes. In general, rescission means the cancellation of a contract and restoration of the parties to their initial status. (Puskar v. Hughes (1989), 179 Ill. App. 3d 522, 528.) This requires not only a return of any consideration received by the rescinding party but a setoff for any benefits received by the rescinding party because of the contract. Puskar, 179 Ill. App. 3d at 528-29.

Here, CCC received no such setoff, even though the evidence shows the Feldes put approximately 13,000 miles on the car. The trial court could have concluded reasonably from the evidence that an automobile in such an unsafe condition and which constantly had to be taken in for repair had little value to the Feldes. However, Gina admitted on cross-examination that her $250 monthly payment for the car was a fair amount for the first month she owned it but not thereafter. Pursuant to our authority under Supreme Court Rule 366(a)(5) (134 Ill. 2d R. 366(a)(5)) to enter any judgment that should have been made, we reduce the judgment amount by $250 to $2,750 and affirm the judgment as modified.

For the above reasons, the judgment of the circuit court of Du Page County is affirmed as modified.

Affirmed as modified.

WOODWARD and BOWMAN, JJ., concur.