text:
    La SALLE NATIONAL BANK et al., Plaintiffs-Appellants, v. 850 DE WITT CONDOMINIUM ASSOCIATION, Defendant-Appellee.
    First District (6th Division)
    No. 1—90—0363
    Opinion filed March 22, 1991.

      Young, Hauslinger & Rosen, Ltd., of Chicago (Alan Rosen, Norman T. Finkel, and Marcia Topper Wolf, of counsel), for appellants.
    Ash, Anos, Freedman & Logan, of Chicago (Bruce T. Logan, of counsel), for appellee.
   PRESIDING JUSTICE RAKOWSKI

delivered the opinion of the court:

Owners of a garage which adjoined a condominium building filed suit against the condominium association seeking injunctive and declaratory relief as well as damages resulting from the association’s possession and use of certain portions of the garage property. The association counterclaimed, requesting that its declaration of condominium be reformed to include the disputed property. On cross-motions for summary judgment, the trial court ordered reformation of the declaration of condominium and the 1984 deed which conveyed the garage property by adding the disputed property to the declaration of condominium and deleting it from the 1984 deed.

Prior to September 1978, the property located at 850 De Witt Place in Chicago was a 22-story rental building with an attached three-story garage. Title to the property was held in trust by La Salle National Bank pursuant to a trust agreement dated October 3, 1953. In September 1978, 850 De Witt Associates, the beneficial owner of the property, decided to divide the residential and garage property and sell the residential property as condominium units. The declaration of condominium ownership (Declaration) was recorded at that time. Incorporated in the Declaration was a plat of survey prepared by Nicholas Raimondi of the National Survey Service. Paul Reynolds, the president of Mid-Continental Realty, which was the general partner of 850 De Witt Associates, had arranged for the survey to provide separate legal descriptions for the residential tower and garage property. In his deposition testimony, Raimondi stated that he was instructed to divide the existing property into two separate entities according to “the existing walls defining the two different structures.” The three areas which are at issue in this appeal were included in the legal description of the garage and excluded from the legal description of the residential tower. These areas are physically under the roof of the garage and are being used by the condominium owners as a storage locker room, bicycle storage room and to house a sump pump, fire pump and emergency fuel tank. The areas have never been used for any purpose related to the operation of the garage.

In December 1979, the beneficial interest in the garage property was conveyed to Robert Matanky, a partner of the 850 De Witt Venture. Matanky subsequently leased the property to Ganser-Oguss Parking, Inc. (Ganser-Oguss), to operate the garage from January 1980 until June 1984. At that time, Matanky assigned its beneficial interest in the garage property to Ganser-Oguss, which then assigned its interest to Gerald Oguss.

When Oguss became the beneficial owner of the garage property, he toured the area with Austin Stoll, the building manager. Oguss stated in his deposition that it was during this tour that he first became aware of the condominium association’s (Association’s) “unauthorized use” of the three disputed areas. Oguss then informed the Association and its attorneys that the areas being used by the Association were within the property lines of the garage and were being used without his permission. In June 1984, plaintiffs submitted a request to the Association and its attorneys for payment for or abandonment of the disputed areas. Plaintiffs’ request was denied, and they subsequently filed a complaint requesting the declaration of the court that the title to the garage property be found clear of any claim by the Association, that the Association be declared a trespasser and ordered to relinquish possession of the three areas and for the recovery of damages for the Association’s unauthorized use of the property plus any costs incurred by the plaintiffs for the removal of the Association’s fixtures.

The Association filed a countercomplaint admitting that the land trust was the owner of the three areas but alleging that the original land survey which divided the residential tower from the garage property was incorrect, and that these areas should have been included as common elements of the Association. Thus, the Association sought reformation of the condominium declaration to include these areas in the legal description of the condominium property. In its answer to plaintiff’s amended complaint, the Association asserted the affirmative defenses of easement by implication, necessity and prescription.

The parties filed cross-motions for summary judgment. The trial court denied plaintiffs’ motion and granted the Association’s motion on its first amended countercomplaint for reformation. The court then entered an order that the deed conveying the garage property to the land trust in 1984 be reformed by deleting the three disputed areas from the legal description of the property and also ordered the reformation of the condominium declaration to include the three areas which had been deleted. Thereafter, plaintiffs filed a motion for reconsideration which was denied. Plaintiffs appeal from the trial court’s order and from the denial of their motion for reconsideration.

Plaintiffs’ position on appeal is that on these facts reformation is an improper remedy as a matter of law and, even if proper, material fact questions existed which precluded summary judgment. While we agree, for reasons set forth later in this opinion, that this case should not have been disposed of on summary judgment, we do not agree that reformation should have been denied as a matter of law.

In order for a written instrument to be reformed, the party seeking reformation must prove that there has been a meeting of the minds which resulted in an actual agreement between the parties, and that when the agreement was reduced to writing and executed, an agreed-upon provision was omitted or one not agreed upon was inserted as a result of the mutual mistake of the parties. (La Salle Na tional Bank v. Kissane (1987), 163 Ill. App. 3d 534, 541, 516 N.E.2d 790; Texas Eastern Transmission Corp. v. McCrate (1979), 76 Ill. App. 3d 828, 831, 395 N.E.2d 624.) The party seeking reformation must prove these elements by clear and convincing evidence. Briarcliffe Lakeside Townhouse Owners Association v. City of Wheaton (1988), 170 Ill. App. 3d 244, 251, 524 N.E.2d 230.

In support of their position, plaintiffs’ first focus on the 1978 declaration and survey. They argue that reformation was not proper because the survey was a unilateral document and because there was no agreement between the parties which was at variance with the declaration. With respect to the 1984 deed, plaintiffs claim that because Matanky sold all he had and Ganser-Oguss purchased all that Matanky had to sell, no mutual mistake existed and, therefore, reformation was improper. Without inquiry as to the merits of these arguments, they must fail because they miss the issue. This is so because neither the 1978 declaration nor the 1984 deed was the reason for the reformation order. Rather, they are natural results which flow from the reformation of the 1979 contract of sale from the Reynolds group to the Matanky group.

The written instrument in which the mutual mistake would have initially occurred in this case would have been the 1979 deed between Reynolds and Matanky. The trial court ordered the reformation of the 1984 deed and condominium declaration to conform the current documents to what it found to be the original intent of Reynolds and Matanky. Furthermore, although we conclude that summary judgment was improper in this case, we do not find any merit in plaintiffs’ arguments regarding the 1979 deed. Plaintiffs argue that Matanky intended to purchase the garage property with the disputed areas because he had the documents containing the legal description of the property at the time of the sale. Plaintiffs then claim that there was no meeting of the minds between Reynolds and Matanky because Matanky intended to purchase the disputed areas, and Reynolds stated in his deposition testimony that he only intended to sell the property used for the operation of the parking garage. Plaintiffs further argue that there was no mutual agreement because there were no negotiations between Matanky and Reynolds. However, plaintiffs present no evidence to support this conclusion other than the fact that the property was purchased at an auction. Plaintiffs’ final argument is that Reynolds intended to sell the disputed areas as part of the garage property because he did not instruct the surveyor to include them as part of the condominium property. However, plaintiffs then claim that Reynolds intended to include the disputed areas as part of the garage property because he did not know of their existence. We find plaintiffs’ arguments conclusory and without supporting evidence. As a result of the foregoing, we do not agree that reformation was improper as a matter of law.

As previously stated, the written instrument to be considered is the original deed in which the developer, Paul Reynolds, as representative of 850 De Witt Associates, first conveyed the garage property to Robert Matanky as representative of 850 De Witt Venture. The relevant questions then are whether, at the time the deed was executed, the parties to this transaction intended that the garage property only include the area used for the operation of the garage, and whether the inclusion of the three disputed areas in the 1979 deed was a mutual mistake.

There appears to be ample evidence from Reynolds’ deposition testimony that when he sold Matanky the garage property, he intended to sell only those areas used for the operation of the parking garage business. Reynolds testified at his evidence deposition that while acting as president and chairman of the board of Mid-Continental Realty, a general partner of 850 De Witt Associates, he made the decision to separate the garage property from the condominiums. Reynolds stated that he intended to include in the garage area anything necessary to operate the garage, such as the parking spaces and access ramps. Reynolds also stated that he intended that the common elements of the condominium include those areas that were being used by the tenants when the residential property was rented. When specifically questioned about each of the disputed areas, Reynolds responded in all three instances that he did not consider them as part of the garage property.

The evidence regarding Matanky’s intention at the time of the 1979 conveyance, however, is not as clear. At one point in his deposition Matanky was questioned regarding the location of the bicycle room. When asked if it was located in his garage area, Matanky replied “not to the best of my knowledge.” Matanky was then asked if he could describe where it was located, and he stated:

“Based upon the documents I’ve been served with, it was noted to be located in the northwest comer of the garage area. I was not aware of any possible infringement upon the garage space at the time.”

Although Matanky stated that he knew of the existence of the bicycle room when he owned the garage property, it is not clear from his testimony whether he had knowledge of the other two areas or their location. When asked what he understood he was purchasing, he stated that he was purchasing the garage which was the property he saw.

Summary judgment should only be granted where the pleadings, depositions, admissions or affidavits show that there is no genuine issue of 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; Schwartz v. Great Central Insurance Co. (1989), 188 Ill. App. 3d 264, 270, 544 N.E.2d 131.) Counterplaintiffs’ standard of proof is stringent. In order to prevail, their evidence must be sufficient to meet the “clear and convincing” standard, which is “that quantum of proof which leaves no reasonable doubt in the mind of the trier of fact of the truth of the fact in issue.” (See In re Estate of Weaver (1966), 75 Ill. App. 2d 227, 229, 220 N.E.2d 321.) Furthermore, the issue of whether a party seeking reformation has presented sufficient evidence to satisfy the higher burden of proof is primarily a question of fact. (Great American Federal Savings & Loan Association v. Grivas (1985), 137 Ill. App. 3d 267, 274, 484 N.E.2d 429.) Although there is evidence from Matanky’s testimony that he only intended to purchase property connected with the operation of the parking facility, we judge it insufficient to support summary judgment. In this case, Matanky was never specifically questioned as to whether, at the time of purchase, he intended that the garage property was inclusive or exclusive of the disputed areas. Because we conclude that Matanky’s intent at the time of the execution of the 1979 deed is a genuine issue of material fact, disposition of this matter by summary judgment was improper.

Finally, we address whether Oguss and/or Ganser-Oguss were bona fide purchasers for value and without notice of third-party claims when they became beneficial owners of the garage property. A bona fide purchaser of an interest in property takes that interest free and clear from all claims except those of which he has notice. (Carlyle v. Jaskiewicz (1984), 124 Ill. App. 3d 487, 492, 464 N.E.2d 751.) Understandably, both parties have taken opposite sides of this issue and now argue their positions as a matter of law. We agree with neither. While we find no evidence in the record that Oguss purchased the garage property for value, Oguss was a principal member of Ganser-Oguss, which was also a third party to the 1979 transaction. Therefore, even if Oguss is not a bona fide purchaser for value, a determination must be made as to whether Ganser-Oguss was a bona fide purchaser. At issue in determining Ganser-Oguss’ status as a bona fide purchaser is whether the corporation had notice of the Association’s claims to the disputed areas. In addition:

“Such notice may be actual or constructive and contemplates the existence of circumstances or facts either known to a prospective purchaser or of which he is chargeable with knowledge which imposes upon such purchaser the duty of inquiry.” (Burnex Oil Co. v. Floyd (1969), 106 Ill. App. 2d 16, 21, 245 N.E.2d 539.)

With respect to the 1984 transaction, we have examined the testimony of both Matanky and Oguss and conclude that the bona fide purchaser issue is also a fact question and not subject to summary judgment. See Carlyle, 124 Ill. App. 3d at 493.

Accordingly, the denial of plaintiffs’ motion for summary judgment is affirmed, the granting of defendant’s motion for summary judgment is reversed and the cause is remanded for further proceedings.

Reversed and remanded.

McNAMARA and LaPORTA, JJ., concur.


source: Caselaw Access Project

author: JUSTICE LaPORTA

license: Public Domain

text:
    THE TRAVELERS INSURANCE COMPANIES, Plaintiff-Appellant, v. P.C. QUOTE, INC., et al., Defendants-Appellees.
    First District (6th Division)
    No. 1—90—0522
    Opinion filed March 22, 1991.

      O’Connor, Schiff & Myers, of Chicago (Loretta M. Griffin and R. Scott Sender, of counsel), for appellant.
    Lundblad, Baker & Martier, of Chicago (Mary K. Bartz and Robert S. Baker, of counsel), for appellees.
   JUSTICE LaPORTA

delivered the opinion of the court:

The Travelers Insurance Companies (Travelers) has appealed the trial court’s order granting summary judgment against it in Travelers’ declaratory judgment action against P.C. Quote, its insured, and Compumat, a company suing P.C. Quote. Compumat filed a breach of contract suit against P.C. Quote in February 1988, but in September 1988, Travelers filed its declaratory judgment suit, contending that its general liability insurance policy coverage of P.C. Quote did not include the right to have Travelers defend the insured against a suit for breach of contract. The trial court granted P.C. Quote’s motion for summary judgment against Travelers and ordered the insurance company to defend P.C. Quote in its pending litigation with Compumat.

In its appeal Travelers raises these issues: (1) whether the trial court erred when it interpreted the liability provisions of the insurance policy to hold that a breach of contract claim is a covered occurrence under the policy, and (2) whether the combination crime form provision of the policy can be construed as an indemnity policy for first-party claims made by the insured.

In February 1987, Travelers contracted to provide general liability insurance to P.C. Quote, a company in the business of conveying stock market quotes by personal computer. In February 1988, P.C. Quote was sued in a breach of contract action by Compumat on allegations that one of P.C. Quote’s employees, whether through actual or apparent authority, had ordered and then caused to be picked up 10 computers worth $46,988.82, and that P.C. Quote failed to pay for .the computers. The complaint further alleged that P.C. Quote’s employee, Jim Airdo, ordered the computers in September 1987 and that “defendant, or one authorized by defendant, caused to be picked up the ten computer systems from plaintiff, and delivered to or for the benefit of defendant.” The first count of the complaint alleged that Airdo acted as an agent for the defendant with actual authority. The second count of the complaint in the alternative alleged Airdo’s actions were done with apparent authority, i.e., that the company knowingly permitted Airdo to represent to third parties that he was an agent of the company.

Travelers refused to represent P.C. Quote in the lawsuit and filed a declaratory judgment action contending that the general liability insurance policy did not extend to coverage of breach of contract suits. Compumat, Inc., was also named as a defendant as a necessary party to the suit. The complaint seeks construction of the language in several portions of the insurance policy.

Specifically, the comprehensive liability policy provides in pertinent part that Travelers “will pay on behalf of the insured, all sums which the insured 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 the company shall have the right and the duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage.” An “occurrence” is defined as: “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 insured.”

Incidental contracts, also covered under the general liability coverage, include several types of contracts not at issue here. However, an endorsement which modifies the definition of “incidental contract” includes “any oral or written contract or agreement relating to the conduct or the named insured’s business.”

The complaint also sought interpretation of the combination crime form portion of the insurance policy which provides coverage for employee dishonesty, defining “employee dishonesty” as “loss of money, securities and other property which the insured shall sustain through any fraudulent or dishonest act or acts committed by any of the employees, acting alone or in collusion with others.”

Travelers prayed in the complaint that the court find that, under the terms of the insurance policy, Travelers was not required to defend P.C. Quote in its suit against Compumat.

The parties filed cross-motions for summary judgment, and on September 8, 1989, the trial court denied all motions for summary judgment and ordered Travelers to represent P.C. Quote in the breach of contract action. Travelers moved the court to reconsider or clarify its decision. On January 19, 1990, after hearing arguments, the trial court issued a new order, granted P.C. Quote’s motion for summary judgment on the declaratory judgment action and ordered Travelers to defend P.C. Quote in the breach of contract suit. Travelers now appeals that order.

Both Travelers and P.C. Quote agree that the policy language permits coverage by Travelers where there is an “occurrence” which results in property damage sustained by the insured which is “neither expected nor intended.” An endorsement to the insurance policy which further defines the insurer’s liability provides a second potential avenue of coverage for P.C. Quote for “incidental contracts,” defined as “relating to the conduct of the named insured’s business.” A third potential type of coverage is found in the policy’s combination crime form, which provides coverage to P.C. Quote for losses “which the insured shall sustain” through dishonest acts committed by its employees. P.C. Quote argues that the underlying breach of contract action falls within its allowable coverage at all three different points in its insurance policy.

Preliminarily, we note the general rule that the purpose of an insurance contract is indemnity and therefore the policy should be liberally construed with uncertainty resolved in favor of the insured. (Reliance Insurance Co. v. Martin (1984), 126 Ill. App. 3d 94, 96, 467 N.E.2d 287; Illinois Produce International, Inc. v. Reliance Insurance Co. (N.D. Ill. 1975), 388 F. Supp. 29, 35.) However, the general rules which favor the insured must yield to the paramount rule of reasonable construction which guides all contract interpretations. Harvey Wrecking Co. v. Certain Underwriters at Lloyd’s, London (1968), 91 Ill. App. 2d 449, 456, 235 N.E.2d 385. See also Bohnen International, Inc. v. Liberty Mutual Insurance Co. (1983), 120 Ill. App. 3d 657, 666, 458 N.E.2d 644.

When considering whether an insurance company must defend its insured in a suit filed against it, the court must look to the complaint itself. If the complaint alleges facts within the coverage of the policy or potentially within the coverage of the policy, the duty to defend has been established. (Clemmons v. Travelers Insurance Co. (1980), 88 Ill. 2d 469, 476, 430 N.E.2d 1104.) Though the action is for declaratory judgment, a court need not wear blinders and be limited to the allegations of the complaint. (Bay State Insurance Co. v. Wilson (1983), 96 Ill. 2d 487, 492, 451 N.E.2d 880.) The court in ruling on a motion for summary judgment can look beyond the complaint. (State Farm Fire & Casualty Co. v. Shelton (1988), 176 Ill. App. 3d 858, 862-63, 531 N.E.2d 913.) In order to sustain a claim for potential coverage, the threshold requirements of the allegations of the complaint are minimal. Management Support Associates v. Union Indemnity Insurance Co. (1984), 129 Ill. App. 3d 1089, 1096, 473 N.E.2d 405.

In Clemmons the underlying complaint alleged that the driver of a car owned by the American National Red Cross caused an accident which resulted in injuries. The insurance company contended that it did not have to defend the driver because the driver did not have permission from the Red Cross to drive the car. The reviewing court found that it was unnecessary for the complaint to allege permission in order to trigger the duty to defend. The court noted that it was possible that the driver had permission. It was enough to allege facts potentially within the coverage of the policy.

The rules of law stated in Clemmons were followed in Shelton, the case relied on by the trial court when it ruled in favor of P.C. Quote. The trial court found Shelton to be very close to our case factually. In Shelton the appellate court found that the trial court erred when it ruled that an insurance company had no duty to defend its insured because the insured had been convicted of voluntary manslaughter. The court considered at length the circumstances under which a declaratory action should be allowed if an underlying suit was still pending. Shelton, 176 Ill. App. 3d at 861.

The Shelton court noted that, when considering a declaratory judgment action, the court must not determine disputed factual issues that are crucial to the insured’s liability in the underlying lawsuit. The court held that the insurer had a duty to defend its insured in the underlying personal injury action because in part it alleged negligence, which was covered under the insurance policy. The Shelton court ruled that the trial court’s grant of declaratory judgment in favor of the insurer was premature. Shelton, 176 Ill. App. 3d at 861.

Initially we consider whether Travelers has a duty to defend since the breach of contract action involves an- “occurrence.” The policy defines an “occurrence” as “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 insured.”

P.C. Quote argues that it suffered property damage in the form of lost computers for which it may be ordered to pay Compumat whether or not the computers were received by P.C. Quote. Travelers argues that the insurance policy only covers property damage to P.C. Quote, which is the insured, and not to a third party such as Compumat. We cannot agree with P.C. Quote that the loss of computers is property damage. There is a difference between damage to property and loss of property. If P.C. Quote must pay for computers it ordered but did not receive, then someone committed theft against the company and damages sustained by the company are not property damages.

Next, P.C. Quote contends that since one of the two counts in the underlying complaint alleges its company employee acted with apparent authority when he ordered and received delivery of 10 computers, the complaint was actually alleging “civil theft” on the part of the employee which would have been neither “expected nor intended” by the company and therefore was a covered “occurrence” under the general liability policy. The allegations for breach of contract allege that P.C. Quote’s employee acted either with actual or apparent authority. Travelers contends that these types of authority require action on the part of the principal and that inherent in that action is the inference that P.C. Quote “expected or intended” the agent’s act, thereby eliminating the insurer’s duty to defend.

P.C. Quote acknowledges the existence of a principal-agent relationship but contends in its pleadings that the agent had neither the actual nor apparent authority to order the computers which were never received by the company. The underlying complaint raises the question of whether the agent had the actual or apparent authority to purchase the computers. Apparent authority in an agent is authority which the principal knowingly permits the agent to assume or that which the agent appears to possess because of action or inaction on the part of the principal. (Hofner v. Glenn Ingram & Co. (1985), 140 Ill. App. 3d 874, 882, 489 N.E.2d 311.) Whether the agent in reality had such authority is a question of fact. Phipps v. Cohn (1985), 139 Ill. App. 3d 210, 212, 487 N.E.2d 428.

We find that the underlying complaint does not allege an “occurrence.” In insurance policies use of the word “occurrence” instead of “accident” broadens coverage and eliminates the need to find an exact cause of damages so long as they are neither expected nor intended from the standpoint of the insured. Nevertheless, the occurrence must still be accidental. (Aetna Casualty & Surety Co. v. Freyer (1980), 89 Ill. App. 3d 617, 619, 411 N.E.2d 1157.) An “accident” is defined as “an unforeseen occurrence, usually of untoward or disastrous character” or “an undesigned sudden or unexpected event.” The natural and ordinary consequences of an act do not constitute an accident. Aetna Casualty, 89 Ill. App. 3d at 619.

P.C. Quote fails to argue in what way the ordering of computers by its own employee can fall into the most broad and commonly used definition of accident. An accident occurs when something unexpected, unintended and unusual happens. (Commercial Union Insur ance Co. v. Basic American Medical, Inc. (E.D. Mich. 1989), 703 F. Supp. 629, 632.) Whether expected or not, we believe that the ordering of computers and the subsequent failure to pay for the computers cannot be considered an “accident.” Therefore, we do not agree that the allegations in the complaint could be considered an “occurrence” under the general liability coverage of the policy.

Next, we consider whether the underlying contract action is covered by the insurance policy’s incidental contract clause. Incidental contracts, as defined by the general liability policy, include several types of contracts not at issue here. The endorsement, however, modifies the definition of incidental contract to include “any oral or written contract or agreement relating to the conduct [of] the named insured’s business.”

P.C. Quote contends that the purchase of computers squarely falls within the definition of incidental contract because the company needs to buy and use computers in its business of conveying stock quotes. P.C. Quote cites no Illinois law to support this position but distinguishes a case cited by Travelers in opposition. In Holland Corp. v. Maryland Casualty Co. (Mo. App. 1989), 775 S.W.2d 531, the Missouri Court of Appeals found an insurer was not required to cover a loss for damages paid to the owner of a crane damaged while it was being transported by the insured. The court there found that the insured was not in the business of transporting cranes but was in the construction business. P.C. Quote distinguishes this case initially because it was decided in a foreign jurisdiction, and, secondly, on its facts since in the case before us P.C. Quote uses computers in its business and the purchase of computers is “obviously” related to its business.

Travelers argues that P.C. Quote is not in the business of buying and selling computers but is in the business of providing stock quotes to customers and that therefore a computer purchase is not related to the conduct of P.C. Quote’s business. In addition, Traveler’s cites Commercial Union (70S F. Supp. 629), which involved a contract with identical language and coverage for incidental contracts. In Commercial Union, the court noted that the incidental contract language was found in an exclusionary clause of the contract, just as it is here, and that such exclusionary clauses are designed to limit the general liability already provided for and not to create additional coverage. Travelers urges this court to follow that same logic, arguing that to do otherwise would open Travelers up to contract liability not intended in the original liability policy. Travelers argues that the policy was intended to limit coverage to P.C. Quote’s tort liability and not to expand coverage.

P.C. Quote contended that it purchased the most comprehensive incidental coverage available to cover any contract made by the insured which relates to the conduct of the named insured’s business when bodily injury or property damage might occur in relation to that agreement. In Management Support (129 Ill. App. 3d at 1093), the court noted that comprehensive general liability provides more extensive coverage than the specialized and limited type of “errors and omissions” coverage held by the insured in that case.

P.C. Quote urges this court to disregard Commercial Union inasmuch as that holding is an interpretation of Michigan insurance law. P.C. Quote further distinguishes Commercial Union by noting that the allegations in the complaint involved intentional conduct by the defendant, an element which P.C. Quote argues is not present here. However, Travelers contends that intentional conduct is present here since the breach of contract complaint alleges actions by an agent either with actual or apparent authority, both of which indicate an intentional act on the part of the insured.

We find the reasoning in the Commercial Union decision persuasive. The court in Commercial Union interpreted the plain meaning of a contract that had nearly identical language as is found here with regard to incidental contracts. That court held that the exclusionary clause for contracts could not be interpreted to expand the insurer’s liability to underwrite liability for every contract related to the insured’s business. Though a court may look to the parties’ intentions to interpret a contract, it is equally true that the language of insurance contracts must be construed as written and the parties should be held to be bound to the agreement they made. Western Casualty & Surety Co. v. Brochu (1985), 105 Ill. 2d 486, 496, 475 N.E.2d 872.

We agree with the holding in Commercial Union and Manufacturers Mutual. We note that P.C. Quote cites no more persuasive authority from this jurisdiction or any foreign jurisdiction. We find that Travelers has no duty to defend based on the incidental contract provisions found in an exclusionary clause of the general liability policy.

Finally, we consider whether the underlying contract action falls within the coverage provided in the combination crime form. The combination crime form portion of the insurance policy provides coverage for the insured’s losses due to employee dishonesty. The policy defines “employee dishonesty” as “loss of money, securities and other property which the insured shall sustain through any fraudulent or dishon-. est act or acts committed by any of the employees, acting alone or in collusion with others.”

P.C. Quote contends that count II of the complaint, which alleges apparent authority, is actually an allegation of dishonesty on the part of its employee. The insured contends that if the allegations of count II are true, then its employee picked up computers which the company never received. P.C. Quote argues that this dishonesty on the part of the employee is covered under the combination crime form and argues that the property lost is the computer equipment for which P.C. Quote may be found responsible and ordered to pay in the underlying litigation.

Travelers urges the court to consider the allegations of the complaint and not to “read in” additional facts as P.C. Quote has argued must be done. Travelers argued that the complaint alleges a simple breach of contract action and alleges no theft on the part of an employee. Travelers contends that it is only in other pleadings presented by P.C. Quote that the company suggests a theft might have occurred. Travelers further argues that P.C. Quote cannot claim a loss of property on one hand and then, in its answer to the complaint, allege as it did that it never received the computers.

In addition, Travelers points to the language in the policy which states that coverage extends to loss of money, securities or property “which the insured shall sustain.” Travelers argues that the combination crime form portion of the policy is designed to indemnify the insured when an employee steals from it and is not intended as a liability policy against an action by a third party, such as Compumat, for losses the third party may have suffered because of the actions of the insured’s employee.

It is not the form of the pleadings but it .is the nature of the insured’s conduct which determines coverage. The factual allegations of the complaint rather than the legal theory under which the action is brought will determine whether there is a duty to defend. (Management Support, 129 Ill. App. 3d at 1097.) The mere fact that the complaint is presented as a breach of contract action does not protect Travelers from liability, for the court must look to the conduct aUeged in the language of the complaint to consider potential liability under an insurance policy. Dominick’s Finer Foods, Inc. v. American Manufacturers Mutual Insurance Co. (1987), 163 Ill. App. 3d 149, 152, 516 N.E.2d 544.

In an action for declaratory judgment, a trial court is not confined to a consideration of the words of the complaint alone. (Shelton, 176 Ill. App. 3d at 862.) In Bay State Insurance (96 Ill. 2d 487), the supreme court went beyond the allegations in the underlying complaint of the declaratory judgment suit to consider the insured’s prior criminal conviction for the same acts as those alleged as the basis for civil liability in the pending suit. There the supreme court noted that the evidence before the trial court included a court transcript of the criminal conviction admitted into evidence over defendant’s objection by the plaintiff. (Bay State Insurance, 96 Ill. 2d at 490.) The Shelton court noted that in a declaratory judgment action the court in ruling on a summary judgment motion can consider information outside the complaint, such as evidence of a prior criminal conviction introduced by way of a Rule 23 order (134 Ill. 2d R. 23).

Here the complaint alleges breach of contract for nonpayment of delivered computers. The answer filed by EC. Quote denies its receipt of the computers. In addition, P.C. Quote urges this court to interpret the complaint as alleging an employee theft.

If the allegations in Compumat’s complaint are true, then P.C. Quote will be required to pay for computers it never received. However, proof that this scenario was the result of a dishonest act of an employee is irrelevant to the breach of contract action. Compumat has alleged breach of contract, not theft. All the plaintiff is required to prove is that P.C. Quote held its employee out as having authority to order and pick up the computers. Compumat is not required to prove that the employee acted dishonestly in order to recover in the underlying litigation.

Even if we were to find that the alleged conduct fit into the employee dishonesty category, this breach of contract action would still not be covered because P.C. Quote has not suffered a loss of “money, securities or property.” P.C. Quote asks us to recognize that it will suffer a property loss if it must pay for the computers it never received. The policy’s definition of money losses does not include judgments against the insured, and P.C. Quote cannot claim it lost “property” if it is also claiming it never received the property.

Finally, we find that the combination crime form portion of the policy is designed to indemnify P.C. Quote when an employee steals from it and that this coverage is not intended as a liability policy to protect the insured against an action by a third party.

We hold that the trial court erred in ordering Travelers to defend P.C. Quote in the underlying complaint and, accordingly, we reverse the order of the trial court which requires the insurer to defend the insured.

Judgment reversed.

RAKOWSKI, P.J., and McNAMARA, J., concur.


author: JUSTICE McNAMARA

text:
    JOSEPH E. COLVETT, Plaintiff-Appellant, v. L. KARP AND SONS, INC., Defendant-Appellee.
    First District (6th Division)
    No. 1—90—1129
    Opinion filed March 22, 1991.

      Arthur E. Engelland & Associates, of Chicago, for appellant.
    Kovar, Nelson, Brittain, Sledz & Morris, of Chicago (Matthew B. Schiff and Mark N. Fishman, of counsel), for appellee.
   JUSTICE McNAMARA

delivered the opinion of the court:

Plaintiff, Joseph E. Colvett, appeals from an order of the trial court granting the motion of defendant, L. Karp & Sons, to dismiss his complaint pursuant to section 2—619(a)(4) of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1989, ch. 110, par. 2—619(a)(4)). The trial court ruled that the complaint alleging retaliatory discharge was barred under the doctrine of res judicata.

Plaintiff was employed by defendant as a warehouseman from September 8, 1987, until May 18, 1988. On February 24, 1988, plaintiff sustained a work-related back injury, was placed on temporary total disability, and was paid worker’s compensation benefits. On April 17, 1988, while plaintiff was receiving worker’s compensation, an investigator employed by defendant photographed and videotaped plaintiff carrying furniture from his old residence to a new home. On May 2, 1988, plaintiff was confronted with this evidence and was discharged.

Plaintiff filed an unemployment claim with the Illinois Department of Employment Security (DES). On July 26, 1988, an adjudicator for DES denied plaintiff’s claim. On August 10, 1988, a hearing was conducted by a DES referee who reversed the adjudicator’s finding and awarded unemployment benefits to plaintiff.

Defendant appealed the referee’s decision to the DES Board of Review (Board). On February 27, 1989, the Board reversed the referee’s decision and held that plaintiff's actions in carrying furniture while accepting temporary total disability was a wilful injury to defendant and justified termination of his employment. Plaintiff did not appeal the DES decision, and it became final on March 27,1989.

On December 30, 1988, plaintiff filed the present complaint alleging retaliatory discharge. Defendant filed its motion to dismiss, and after receiving briefs and hearing oral argument, the trial judge granted defendant’s motion. The court held that the DES decision barred plaintiff’s retaliatory discharge complaint under the doctrine of res judicata. On "appeal plaintiff maintains that the finding of the trial court was erroneous.

An employee is entitled to redress for discharge from employment in retaliation for an employee’s assertion of rights under the Workers’ Compensation Act (Ill. Rev. Stat. 1989, ch. 48, par. 138.1 et seq.). (Kelsay v. Motorola, Inc. (1978), 74 Ill. 2d 172, 384 N.E.2d 353.) In order to recover for retaliatory discharge for filing such a claim, plaintiff must establish, among other things, that his discharge was causally related to the filing of the claim. (Lewis v. Zachary Confections Co. (1987), 153 Ill. App. 3d 311, 505 N.E.2d 1087.) The failure to establish a retaliatory motive by the employer is fatal to an action for retaliatory discharge. Lewis v. Zachary Confections Co., 153 Ill. App. 3d 311, 505 N.E.2d 1087.

Here, there was a final, unappealed decision of DES which established that plaintiff’s discharge was unrelated to the filing of his worker’s compensation claim. DES found that plaintiff had failed to establish a retaliatory motive on the part of defendant.

In Martinez v. Admiral Maintenance Service (1987), 157 Ill. App. 3d 682, 510 N.E.2d 1122, this court held that an employee’s claim for retaliatory discharge is barred in another action by the res judicata effect of a DES decision rejecting a retaliatory discharge. The Martinez holding is dispositive of the issue before us, and we adhere to its ruling. As in Martinez, the doctrine of res judicata applies here because the parties, the subject matter, and the cause of action were the same in the DES proceedings as in the present action. Plaintiff is thus barred by res judicata from bringing the present action.

We find no merit in plaintiff’s alternative argument that section 1900 of the Unemployment Insurance Act (Ill. Rev. Stat. 1987, ch. 48, par. 640) provides that the decisions of DES are confidential and inadmissible in any other civil action.

At the time of the present DES decision, section 1900 provided:

“Disclosure of information — Privileged communications. Except as is hereinafter provided in this Section, information obtained from any individual or employing unit pursuant to the administration of this Act shall be confidential and shall not be published or be open to public inspection, nor be used in any court in any action or proceeding pending therein, nor be admissable in evidence in any action or proceeding other than one arising out of the provisions of this Act.” Ill. Rev. Stat. 1987, ch. 48, par. 640.

In 1989, the legislature amended section 1900, broadening the scope of the confidentiality of information obtained in DES proceedings. (Ill. Rev. Stat. 1989, ch. 48, par. 640.1.) However, the legislature confined itself to the confidentiality of information received. The Act has never stated nor suggested, and in our view wisely so, that a final decision of DES would not be available in another proceeding. We believe that the legislature intended the term “information” to include all investigative materials received from the parties during DES proceedings. We also believe that a final DES decision based on the evidence may be used in other proceedings in order to defeat attempts to relitigate such decisions. The decision here was properly before the trial court.

We also reject plaintiff’s argument that even if the DES decision was properly available to the trial court in the present case, the court erred in taking judicial notice of that decision in the present case. A copy of the decision, the authenticity of which has not been challenged, was attached to defendant’s motion to dismiss. It is well settled that a court may take judicial notice of a prior administrative decision. (Rasky v. Anderson (1978), 62 Ill. App. 3d 633, 379 N.E.2d 1.) In any event, plaintiff offered into evidence the deposition testimony of a DES employee which contained a copy of the DES decision. Plaintiff may not complain about the trial court’s taking of judicial notice of the decision.

Finally, without extended discussion, we reject defendant’s claim that it should be awarded attorney fees and costs. Defendant makes this claim pursuant to Supreme Court Rule 375 (134 Ill. 2d R. 375) on the ground that plaintiff’s appeal is frivolous. We do not find the appeal to be frivolous.

For the foregoing reasons, the judgment of the circuit court of Cook County dismissing plaintiff’s complaint is affirmed.

Judgment affirmed.

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


text:
    RONALD B. SHIPKA et al., Plaintiffs-Appellees and Cross-Appellants, v. GIUSEPPE INSERRA, Indiv. and d/b/a Gino’s, Defendant-Appellant and Cross-Appellee.
    First District (6th Division)
    No. 1—90—1178
    Opinion filed March 22, 1991.
    Brown & Peters, of Chicago (Robert J. Peters and Michael I. Brown, of counsel), for appellant.
    Segal & Segal, of Chicago (Marshall D. Segal, of counsel), for appellees.
   JUSTICE LaPORTA

delivered the opinion of the court:

Plaintiffs Ronald B. Shipka, Láveme Shipka, Keith Lord, and George Gelis, individually and as partners of 932 Rush Partnership, a beneficiary of La Salle National trust No. 113805, appeal from the order of the circuit court of Cook County denying attorney fees and costs in an action pursuant to a lease agreement. On appeal plaintiffs contend that the lease agreement does not require bad faith as a prerequisite for costs and attorney fees from defendant. They also contend that their actions were not barred by the fact that they commenced litigation by seeking a declaratory judgment. Ill. Rev. Stat. 1989, ch. 110, par. 2—701.

The record discloses that on January 4, 1990, plaintiffs filed their complaint in the chancery division of the circuit court of Cook County seeking a declaratory judgment. In that complaint plaintiffs alleged that on or about June 1, 1982, defendant had entered into a lease for his restaurant located in the basement at 932 North Rush Street in Chicago, Illinois, which lease was to terminate on February 28, 1993. The complaint further alleged that the property was subsequently purchased by La Salle National Bank with the beneficial interests in plaintiffs.

The complaint quoted paragraph 3 of the rider to the lease, which provides that the lessor could terminate the lease upon payment of 12 months’ rent at any time after the first three years of defendant’s tenancy, but no later than six months prior to the end of the lease term, only if lessor intended to demolish the building or any substantial portion of it.

Paragraph 9 of the complaint alleged that the plaintiffs as assignees under the lease intended to demolish the building, had served the tenant with written notice of the termination of the lease as of February 28, 1990, and given notice to vacate. Defendant refused to vacate the premises. Plaintiffs requested the adjudication of the rights and liabilities of the parties and that the defendant pay damages incurred by plaintiffs as a consequence of defendant’s failure to vacate the premises on or before February 28,1990.

On March 2, 1990, plaintiffs moved for a summary judgment and for an accelerated hearing schedule, or for the setting of date for trial. In their motion plaintiffs stated that “defendant has acknowledged receipt of the written notice of Lessor’s intention to demolish the building, but has stated that he will not vacate the premises at any time before February 28, 1993,” the expiration date of the lease term. Plaintiffs also filed an amended complaint for declaratory judgment in which they requested that defendant “pay all damages incurred by plaintiffs as [a] consequence of defendant’s failure or refusal to vacate the premises on or before February 28, 1990, including the payment of reasonable attorneys’ fees pursuant to paragraph 15 of the lease.”

In their second amended complaint, filed March 9, 1990, plaintiffs alleged their rights as assignees of the lease and again requested attorney fees pursuant to paragraph 15 of the lease. On April 6, 1990, defendant filed his counterclaim in which he alleged that plaintiffs had breached the lease by their interruption of his business activities.

At the hearing on April 9, 1990, the trial court heard arguments on plaintiffs’ motion for summary judgment. The defendant contended that there was a question of material fact whether plaintiffs’ building was truly being demolished pursuant to the lease or was merely being “rehabbed.” The trial court held, however, that “from the depositions, affidavits and exhibits, *** no reasonable trier of fact could fail to agree that this building is intended to be substantially demolished.” The court also held that the plaintiffs had “prevailed on the notice provisions in the Lease as well as on the legal issue about their rights as assignors or Lessors.”

As to the award of attorney fees and costs pursuant to paragraph 15 in the lease, plaintiffs argued that “this is clearly a generic provision in the lease which covers all situations where the Lessee is in breach and when the Lessee fails to vacate the premises on March 1.” However, the trial court held:

“I think this is a situation where the suit was — although I ruled that the lessor was clearly entitled to possession, I think it was not a bad faith situation where the lessee was malicious or using bad faith to litigate.
Accordingly, I will deny the petition for costs and fees under paragraph 15 of the lease.”

Plaintiffs contend that the trial court’s refusal to award attorney fees and costs to plaintiffs was clearly erroneous. For their contention plaintiffs rely on Stride v. 120 West Madison Building Corp. (1985), 132 Ill. App. 3d 601, 606, 477 N.E.2d 1318. In that case the court allowed attorney fees to plaintiffs pursuant to a provision in a lease which required the lessee to pay

“the fees of counsel, agents and others retained by the Lessor, incurred in enforcing the Lessee’s obligations hereunder or incurred by the Lessor in any litigation, negotiation or transaction which the Lessee causes the Lessor, without the Lessor’s fault, to become involved or concerned.”

The court concluded that where allowed by contract, attorney fees may be recovered by the successful litigant (Stride, 132 Ill. App. 3d at 606-07), and because an award for attorney fees is not penal in nature, whether the parties acted in good faith is irrelevant. See also Presbyterian Distribution Service v. Chicago National Bank (1960), 28 Ill. App. 2d 147, 161, 171 N.E.2d 86.

The provision in the lease in our case reads as follows:

“15. Lessee shall pay upon demand all Lessor’s costs, charges and expenses, including fees of attorneys, agents and others retained by Lessor, incurred in enforcing any of the obligations of Lessee under the lease or in any litigation, negotiation or transaction in which Lessor shall, without Lessor’s fault, become involved through or on account of this lease.”

There is no language in this provision that payment is conditional on the bad faith of either party, and based on Stride, the presence or absence of bad faith is irrelevant. We agree with plaintiffs that they are entitled to attorney fees and costs incurred in bringing this action.

Defendant nevertheless maintains that the award of attorney fees in an action for declaratory judgment is inappropriate because the trial court only adjudicates the rights and liabilities of the parties. However, a court in an action for declaratory relief can within its equitable powers give other relief and dispose of issues as necessary. (See Chicago Division of the Illinois Education Association v. Board of Education (1966), 76 Ill. App. 2d 456, 473, 222 N.E.2d 243.) Indeed, it is within the power of the trial court to grant any consequential relief and dispose of the entire controversy. Bezin v. Ginsburg (1978), 59 Ill. App. 3d 429, 440, 375 N.E.2d 468.

In this case the trial court has already given relief to plaintiffs by granting summary judgment and ordering a deadline for defendant to vacate the property. In ruling on the summary judgment motion, the court ordered plaintiff to pay to defendant certain monies due as provided in paragraph 3 of the lease rider for early termination of the lease term, to be adjusted as set out in the order. We affirm the trial court’s ruling.

We find that plaintiffs are also entitled to attorney fees and costs pursuant to paragraph 15 of the lease to be determined on remand.

Accordingly, the judgment of the circuit court is affirmed in part, reversed in part and the cause remanded with directions to determine plaintiffs’ claims for attorney fees and costs arising from this action.

Judgment affirmed in part, reversed in part and remanded with directions.

McNAMARA and EGAN, JJ., concur.


author: PRESIDING JUSTICE RAKOWSKI

text:
    H.T.A., LTD., Plaintiff-Appellee, v. W.W. LUXION, Defendant-Appellant (American National Bank and Trust Company of Chicago, Trustee, Defendant).
    First District (6th Division)
    No. 1—90—1521
    Opinion filed March 22, 1991.

      Querrey & Harrow, Ltd., of Chicago (Paul T. Lively, of counsel), for appellant.
    Barnett, Bornstein & Blazer, Ltd., of Chicago (Harvey Barnett and Martin D. Tasch, of counsel), for appellee.
   PRESIDING JUSTICE RAKOWSKI

delivered the opinion of the court:

Plaintiff-appellee H.T.A., Ltd. (HTA) contracted to purchase a medical center from defendant-appellant W.W. Luxion (Luxion). Luxion was to construct the medical center on land that he owned. During construction of the medical center, it was agreed by HTA and Luxion that certain extras and change orders would be incurred. Luxion, however, claimed an additional $286,000 was owed for extra work, which HTA disputed. Luxion therefore refused to close the deal unless these claims were satisfied. HTA commenced an action for specific performance in May of 1986, to proceed with the closing.

The parties later agreed to settle the dispute and entered into the agreed order that forms the basis of this appeal. Pursuant to that order, HTA, prior to closing, posted letters of credit in the amount of some $350,000. Under the agreement, Luxion could not cash and call the security either until there was a final determination of liability, or HTA failed to renew the security prior to 30 days before the security was set to expire. In 1990, when HTA failed to extend the security within the applicable time frame, Luxion sought to cash the letters of credit. HTA sought relief, requesting that the court enjoin Luxion from cashing the letters of credit and that the court order Luxion to accept extension of the letters. The circuit court granted HTA relief. The court initially allowed Luxion to cash the letters, but ordered that the proceeds be turned over to the clerk of the court. Then, the court ordered Luxion to accept replacement letters of credit. Subsequently, the funds held by the clerk of the court were returned to the Boulevard Bank National Association, which issued the letters. The underlying action remains pending, and Luxion appeals the order of the circuit court with respect to the security. We affirm.

The agreed order between the parties provided:

“Prior to closing Plaintiff [HTA] shall deposit in the Escrow a surety bond (from an insurance company with a Best Company Rating of A+ or better) or post an irrevocable strait [sic] letter of credit in the amount of $350,000.00 (issued from a bank mentioned in the escrow or equivalent bank) to secure a judgment, or any portion thereof, in favor of defendant W.W. Luxion (Luxion) with respect to his claims (without prejudice to Plaintiff’s rights to contest said claims) *** Luxion shall not be entitled to cash or call upon the same until there has been a final determination of Plaintiff’s liability to Luxion, if any, and a final nonappealable order is entered as to such liability. The expiration date of the above security shall be extended during the litigation or Luxion shall have the right to cash and call the security in the event the security is not renewed prior to thirty days before the expiration of the security ***.”

The initial letters of credit were renewed in both 1987 and 1988. In both instances, HTA failed to extend the security prior to 30 days before expiration, Luxion made demand within the 30-day period prior to expiration, and the letters were renewed within the 30-day period. On May 7, 1990, Luxion sent a letter to HTA demanding that the letters of credit be extended and that Luxion receive notification of extension prior to May 21, 1990. HTA commenced to make arrangements with the bank to have the letters extended, and the bank indicated that the security would in fact be extended. As Luxion did not receive notice of extension from HTA prior to the 21st of May, Luxion delivered an affidavit to the bank in an attempt to cash the letters of credit. The bank, however, declined this request because the affidavit did not comply with the requirements of the letters.

On May 22, 1990, Luxion again sent a letter to HTA (in fact the letter was delivered to HTA’s counsel although HTA did not receive the letter until May 24, 1990). This letter stated that if Luxion did not receive evidence of extension or renewal “prior to May 24, 1990,” Luxion would cash the letters of credit.

On May 23, 1990, counsel for HTA spoke with counsel for Luxion. Counsel for Luxion was informed that the bank was prepared to extend the letters of credit, but that as Luxion had made a demand on the letters to the bank, the bank required that the demand be withdrawn simultaneous to the extension of the letters. Counsel for Luxion, however, indicated that he was not required to withdraw his demand. Counsel for the parties engaged in a conversation to the same effect the next day, the 24th of May, and a letter from a representative of the bank, dated May 24, 1990, also appears in the record. This letter indicates that the bank was fully prepared to extend the letters if only Luxion would withdraw its prior demand.

Luxion then delivered an affidavit (on May 24) to the bank which did comply with the requirements of the letters. HTA filed an emergency petition for temporary restraining order and preliminary injunction on May 29, 1990. On that date, the court permitted Luxion to cash the letters, but required that the proceeds be deposited with the clerk of the court. On the 31st of May, 1990, the court conducted a hearing on the matter, and ordered Luxion to “accept new letters of credit to replace the cashed letters.” This is the order from which Luxion appeals.

The first issue we address is whether the trial court’s order of May 31, 1990, may properly be considered an injunction, so as to provide this court with appellate jurisdiction.

Illinois law is clear that there can be no appeal from a non-final order unless such an appeal is specifically authorized by the supreme court rules. (Ill. Const. 1970, art. VI, §6; People ex rel. Scott v. Silverstein (1981), 87 Ill. 2d 167, 171, 429 N.E.2d 483.) Supreme Court Rule 307(a)(1) (134 Ill. 2d R. 307(a)(1)) provides in relevant part that appeal may be taken from an interlocutory order “granting, modifying, refusing, dissolving, or refusing to dissolve or modify an injunction.” HTA contends that the May 31, 1990, order may not be considered an injunction and, thus, Luxion is not entitled to appeal the order.

To determine what constitutes an appealable injunction under Rule 307(a)(1), the court is to look to the substance of the action, not the form. (Bohn Aluminum & Brass Co. v. Barker (1973), 55 Ill. 2d 177, 180, 303 N.E.2d 1.) As the supreme court observed in In re a Minor (1989), 127 Ill. 2d 247, 260, 537 N.E.2d 292: “An apple calling itself an orange remains an apple.” As such, HTA’s argument that the order in this case is not styled an injunction, and that, therefore, the order is not an injunction is not persuasive. In fact, the court in Lake Shore Racquet Club, Inc. v. Fireman’s Fund Insurance Cos. (1980), 91 Ill. App. 3d 1118, 415 N.E.2d 625, which HTA cites in support of this argument, also observed that “[wjhether an action by a trial court falls within the [Rule] 307 criteria is determined by looking at the substance rather than the form of the order.” 91 Ill. App. 3d at 1121, citing Bohn Aluminum & Brass Co., 55 Ill. 2d at 180.

An injunction may be defined as “ ‘a judicial process, by which a party is required to do a particular thing, or to refrain from doing a particular thing, according to the exigency of the writ, the most common sort of which operate as a restraint upon the party in the exercise of his real or supposed rights.’ ” (In re a Minor, 127 Ill. 2d at 261, quoting Wangelin v. Goe (1869), 50 Ill. 459, 463.) Here, the order of May 31, 1990, is clearly injunctive in nature. HTA’s petition was styled, in part, as a temporary restraining order. More importantly, the order clearly required Luxion to “do a particular thing” (accept the replacement letters of credit) which operates as a constraint on Luxion’s real or supposed, rights (under the agreed order). The result obtains that Luxion may properly appeal the order of May 31, 1990.

In resolving whether there is a sufficient basis to sustain that order, we look to the criteria involving the issuance of preliminary injunctive relief. 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 adequate 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.) The purpose of granting a preliminary injunction is to preserve the status quo. (Summit Electric Co. v. Mayrent (1974), 17 Ill. App. 3d 545, 550, 308 N.E.2d 313.) The status quo to be maintained is the last, actual, peaceable, uncontested status which preceded the pending controversy. Instrumentalist Co., 163 Ill. App. 3d at 721.

An examination of the preceding law applicable to the granting of preliminary injunctions supports the conclusion that the trial judge did not abuse his discretion in ordering Luxion to accept the replacement security. HTA’s rights under the agreed order were ascertainable and in need of protection. Under the circumstances, no adequate remedy at law existed, and if Luxion were to retain the cashed security, HTA would be irreparably harmed. This is because HTA would need to satisfy the bank immediately, while being left with the burden of proving Luxion was not entitled to compensation at a later date. HTA, moreover, demonstrated a likelihood that it would succeed on the merits of its claim under the agreed order due to its unchallenged and uncontradicted evidence.

Belatedly we are satisfied that the benefits of granting the injunction outweighed the possible injury to Luxion. The cost of the bond to facilitate the trial court’s ruling was a mere $10,000, while, as indicated, in the event the trial court had ruled for Luxion, HTA would have been forced to satisfy the bank in an amount of over $350,000. The only possible injury to Luxion would be that he did not receive immediate possession of the cashed security. It is to be remembered, however, that the purpose of the agreed order was to secure satisfaction of Luxion’s claim against HTA in the event that Luxion was entitled to recovery, a circumstance yet to be established. Thus, it is clear that the order of the trial court maintained the last, peaceable status preceding the immediate controversy. We therefore are convinced that the trial court’s action satisfies an analysis of whether injunctive relief was proper.

Our conclusion that the trial court’s order was proper is also rested upon a close examination of the facts which the parties presented to the trial court. It is HTA’s contention that Luxion had no right to cash and call the security because it was Luxion’s refusal to withdraw its demand from the bank which rendered HTA unable to extend the security.

In determining whether there was a sufficient basis for the trial court to find in favor of HTA below, we are guided by the rule enunciated in the case of Yale Development Co. v. Oak Park Trust & Savings Bank (1975), 26 Ill. App. 3d 1015, 1020, 325 N.E.2d 418, which provides: “Delays and nonperformance while they amount to a failure to perform are excused where performance is prevented by the other party to the contract.”

As discussed supra, it is clear from the wording of the contract that HTA’s failure to extend the security prior to thirty days before the expiration of the security triggered Luxion’s right to cash and call the security. The record demonstrates that Luxion made its first demand in a letter dated May 7, 1990. Though this letter was returned undelivered to Luxion, HTA admits that it was aware of the demand, as HTA’s counsel sought to have the security renewed prior to the 21st of May (pursuant to the demand). The security was not in fact extended in accord with the demand, and Luxion in fact made a demand on the bank to cash and call. Luxion’s affidavit to the bank apparently did not meet the requirements imposed by the letters themselves, and, thus, Luxion needed to make a new demand on HTA, the demand that evidence of extension be received “prior to May 24.”

At issue here, however, is only whether Luxion was entitled to cash and call based on the second demand. That demand effectively gave HTA the right to extend the security prior to the 24th. HTA argues that HTA could have done so, but was prevented from doing so only by Luxion’s refusal to withdraw its prior demand from the bank. The evidence bearing on this question primarily consists of a telephone conversation, on the 23rd of May, during which HTA’s counsel informed Luxion’s counsel that the bank was prepared to extend the letters of credit on the condition that Luxion withdraw his demand on the security. Also, there is a letter from a representative of the bank, dated May 24, 1990, which clearly states that the bank was willing to extend the security if Luxion would withdraw the demand. Luxion’s counsel took the position that he was not required to withdraw the demand, and did not do so, but rather cashed and called the security.

Luxion argues that the evidence clearly establishes that HTA was unable to extend the letters until the 24th, and thus,, as HTA did not extend the security “prior to” the 24th pursuant to the demand, Luxion was entitled to cash and call. While we would agree that if the evidence established that HTA was unable to extend the security until a time after that allowed for in the demand, Luxion would be entitled to cash and call, we disagree that the evidence establishes this. While the evidence of the bank’s letter, upon which Luxion relies in making this argument, clearly establishes that as of the 24th the bank was willing to extend the security, this does not establish that the bank was unwilling to do so “prior to” the 24th.

It is important to note that the evidence put forth suggesting that the bank could have extended the security was both unchallenged and uncontradicted. As such, taking into account the summary nature of the proceedings, we are unprepared to say that the trial court had an insufficient basis to enter the order or that the trial court abused its discretion.

We wish to make one final observation. It is apparent that the agreed order gave Luxion the right to cash and call the security if HTA should fail to extend the security within the agreed time period, which HTA has failed to do on three occasions. As no action of Luxion’s prevented HTA from extending the security with respect to the initial 1990 demand (the demand upon HTA to extend “prior to May 21”) and the demand provided HTA a reasonable time to comply, it appears that Luxion would have been entitled to cash and call with respect to this demand had Luxion satisfied the provisions of the letters. Were we reviewing an order requiring Luxion to accept replacement based on the initial demand, our result would likely be different. This final observation, we trust, will be remembered by the parties if and when the replacement security is to be extended in the future.

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

Affirmed.

McNAMARA and EGAN, JJ., concur.


author: JUSTICE CAMPBELL

text:
    THE VILLAGE OF ARLINGTON HEIGHTS, Plaintiff-Appellant, v. JULIE BARTELT, Defendant-Appellee.
    First District (1st Division)
    No. 1—88—2859
    Opinion filed March 25, 1991.
    Massucci, Blomquist, Brown & Judson, of Arlington Heights (Brian S. Crowley, of counsel), for appellant.
    Guy M. Karm, of Mt. Prospect, for appellee.
   JUSTICE CAMPBELL

delivered the opinion of the court:

Plaintiff Village of Arlington Heights appeals a decision of the circuit court of Cook County granting defendant Julie Bartelt’s motion to quash her arrest. The charge at issue is driving under the influence of alcohol (DUI) (Ill. Rev. Stat. 1987, ch. 95½, par. 11—501(a)). The trial court held there was no probable cause for defendant’s arrest. For the following reasons, we affirm.

The following evidence was adduced at the hearing on the motion to quash the arrest. On April 19, 1988, defendant was driving her car on Walker Drive in Arlington Heights. At approximately 9:54 p.m., she lost control of the vehicle, striking a tree. Arlington Heights police officer Mertlick arrived on the scene at approximately 10:30 p.m. Several squad cars were already on the scene, the first having arrived at about 10 p.m. Officer Mertlick arrived while defendant was being treated by paramedics and did not speak to defendant at the scene. Defendant was then taken to a hospital for treatment.

Officer Mertlick remained at the scene of the accident for a little over an hour and a half. He spoke to a witness to the collision, Kenneth Worm, who stated that defendant had been travelling about 55 miles per hour (in a 30-mile-per-hour zone), when he heard a sliding noise and saw the car leave the road. He further told the officer that he saw no other cars on the road.

Officer Mertlick then spoke with defendant at the hospital in the presence of her parents. Defendant stated that she was forced to leave the road by an oncoming car with bright headlights. The officer noticed nothing unusual about defendant’s appearance or speech at this time. The officer did detect a faint odor of alcohol coming from defendant, though he was unable to tell whether defendant consumed alcohol before the accident or whether the odor was due to defendant’s treatment. No tickets were issued at this time.

Leaving the hospital, Officer Mertlick spoke with a nurse, John Byer, in the emergency room. Mertlick had met Byer about 75 to 100 times previously. Byer volunteered to Mertlick that defendant’s blood sample showed an extremely high blood-alcohol level, in excess of .20%. Nevertheless, based on his experience with DUI arrests, Mertlick believed he lacked probable cause to arrest defendant or order a blood test from her at that time.

The following day, Mertlick spoke with a fellow officer about the matter. The other officer told him of a new section of the DUI statute which permitted the use of hospital records as evidence in a DUI prosecution. The officers then consulted with the village attorney’s office, which recommended continuing with the case and issuing a citation. On April 26, 1988, a full week after the accident, citations were issued and defendant was arrested, even though there had been no formal request by the police for a blood sample.

The sole issue on appeal is whether there was probable cause to arrest defendant. In reviewing a motion to quash an arrest for DUI, this court’s inquiry is whether the trial court’s decision was manifestly erroneous. People v. Brodeur (1989), 189 Ill. App. 3d 936, 938, 545 N.E.2d 1053, 1055.

In deciding whether the probable cause requirement has been met, a court must determine whether a reasonable, prudent person with the knowledge possessed by the officer at the time of the arrest would have believed defendant committed the offense. An officer’s factual knowledge, based on prior experience, is relevant to making this determination. People v. Tisler (1984), 103 Ill. 2d 226, 237, 469 N.E.2d 147, 153.

In this case, the record indicates that Officer Mertlick testified that other than the conversation with the nurse, there was no sign of intoxication or alcohol use by defendant. Officer Mertlick did not arrest defendant until he heard about a change in the Illinois Vehicle Code which provides in relevant part:

“(a) Notwithstanding any other provision of law, the written results of blood alcohol tests conducted upon persons receiving medical treatment in a hospital emergency room are admissible in evidence as a business record exception to the hearsay rule only in prosecutions for any violation of Section 11 — 501 of this Code or a similar provision of a local ordinance ***.
* * *
(b) The confidentiality provisions of law pertaining to medical records and medical treatment shall not be applicable with regard to blood alcohol tests performed under the provisions of this Section in prosecutions as specified in subsection (a) of this Section. No person shall be liable for civil damages as a result of the evidentiary use of blood alcohol test results under this Section, or as a result of that person’s testimony made available under this Section.” Ill. Rev. Stat. 1987, ch. 951/2, pars. 11—501.4(a), (b).

See also Village of Arlington Heights Municipal Code 1965, ch. 18.

Section 8—802 of the Illinois Code of Civil Procedure creates a physician-patient privilege, providing in relevant part:

“No physician or surgeon shall be permitted to disclose any information he or she may have acquired in attending any patient in a professional character, necessary to enable him or her professionally to serve such patient, except only *** (9) in prosecutions where written results of blood alcohol tests are admissible pursuant to Section 11—501.4 of the Illinois Vehicle Code.” Ill. Rev. Stat. 1987, ch. 110, par. 8—802.

It appears that the amendment to the Illinois Vehicle Code authorizes the use of written test results as evidence in prosecutions. Plaintiff claims that the statute also authorizes the use of oral statements of the type at issue in this case for the purpose of establishing probable cause to assist in prosecutions. Plaintiff, however, does not cite any specific reference to any statute or precedent in support of this proposition. In the absence of any such authority, it would appear that the general statutory physician-patient privilege will be deemed to apply, rather than the exception to that privilege for blood-alcohol test results. See Ill. Rev. Stat. 1987, ch. 110, par. 8—802.

Even if an exception to the privilege did apply, the nature of the physician-patient relationship is such that the patient has a right to expect that her medical records will only be disclosed pursuant to judicially authorized methods of discovery. Cf. Petrillo v. Syntex Laboratories, Inc. (1986), 148 Ill. App. 3d 581, 499 N.E.2d 952, cert. denied (1987), 483 U.S. 1007, 97 L. Ed. 2d 738, 107 S. Ct. 3232 (barring ex parte conferences between a physician and the patient’s legal adversary, even where exception for malpractice cases applies).

The privilege has also been interpreted to bind hospitals and their support personnel as well as physicians. (Parkson v. Central Du Page Hospital (1982), 105 Ill. App. 3d 850, 435 N.E.2d 140.) It was therefore improper to disclose the results of the hospital’s blood-alcohol test outside the rules of discovery, based upon the record in this case. The record demonstrates that absent this improperly disclosed information, there was no probable cause to arrest defendant. See Mapp v. Ohio (1961), 367 U.S. 643, 6 L. Ed. 2d 1081, 81 S. Ct. 1684.

In sum, plaintiff has failed to demonstrate that the trial court was manifestly erroneous in granting the motion to quash the arrest for lack of probable cause.

For the above reasons, the judgment of the trial court is affirmed.

Judgment affirmed.

MANNING, P.J., and O’CONNOR, J., concur.