author: JUSTICE QUETSCH

text:
    KENT T. JOHNSON, Plaintiff-Appellant, v. GEORGE J. BALL, INC., Defendant-Appellee.
    Second District
    No. 2 — 92—0916
    Opinion filed August 9, 1993.
    Rehearing denied September 24, 1993.

      James L. Reichardt, of Villa Park, and Jerry P. Clousson, of Clousson & Spadoni, of Chicago, for appellant.
    John J. Coffey, Kevin J. Moore, and Jonathan E. Rothschild, all of Rothschild, Barry & Myers, of Chicago for appellee.
   JUSTICE QUETSCH

delivered the opinion of the court:

Plaintiff, Kent Johnson, appeals the circuit court’s order dismissing his first amended complaint against defendant, George J. Ball, Inc., alleging breach of an oral employment contract and fraud. Plaintiff contends that the allegations of each count are sufficient to withstand a motion to dismiss for failure to state a cause of action.

Plaintiff’s complaint alleges that in December 1988 Anne Leventry-Jeffers, corporate projects manager for defendant, approached plaintiff about becoming the director of defendant’s training center. At the time, plaintiff and his wife were both employed in Michigan. Plaintiff’s duties would be to develop curricula for defendant’s training programs, rebuild its physical facilities, employ faculty and other support personnel for the marketing and presentation of training programs, and conduct the training programs for defendant’s salespersons, customers and prospective customers. The training programs were to last until 1991.

Defendant offered plaintiff a smaller salary than he was currently receiving, but guaranteed him a $25,000 bonus for his first year. Defendant also told plaintiff that several employees had been budgeted for support staff and faculty for the training programs and that a marketing budget had been established.

Plaintiff began working for defendant in January 1989. In order to accept the position, he and his wife had to quit their jobs in Michigan, sell their Michigan home, and sign a contract on a house in Illinois.

Although plaintiff began the new position, defendant failed to fill the budgeted faculty and support positions or to make expenditures for marketing. In April 1989, plaintiff informed defendant that he would resign and return to Michigan, before he became legally obligated on the contract to purchase a home in Illinois and before his Michigan home was sold.

Defendant’s president, Carl Ball, and Leventry-Jeffers, assured plaintiff that it was committed to the program and would hire the support staff and market the programs, which would continue through 1991. Allegedly in reliance on these representations, plaintiff did not resign, but continued to attempt to perform his duties. He did eventually hire a part-time secretary and one faculty member, develop a curriculum for training courses, and oversee the repair of defendant’s plant. Defendant refused to approve the hiring of more staff.

On October 24, 1989, defendant summarily terminated plaintiff and replaced him with an existing employee. Plaintiff received one-half of the guaranteed bonus.

Plaintiff filed his initial complaint October 22, 1991. Defendant filed a motion to dismiss. The court granted the motion on the basis that the complaint failed to allege specific facts to support the causes of action. Plaintiff then filed his first amended complaint.

Count I of the amended complaint alleged fraud. Plaintiff alleged that defendant made false representations regarding the hiring of support staff, creation of a marketing budget, and conducting of the training programs through 1991 to induce plaintiff to surrender his position in Michigan and work for defendant. Plaintiff further alleged that he relied on these representations in accepting the offer of employment and suffered a detriment in that he resigned a higher paying position, his wife quit her job, they sold their Michigan home and became committed to purchase a home in Illinois. In count II plaintiff alleged that defendant breached an oral contract to employ him at least through 1991.

Defendant also moved, pursuant to section 2 — 615 of the Code of Civil Procedure (735 ILCS 5/2 — 615 (West 1992)), to dismiss the amended complaint. The court again dismissed the complaint, holding that plaintiff has failed to allege that he gave adequate consideration for the promise of secure employment or that he reasonably relied to his detriment on defendant’s representations.

The court initially granted plaintiff leave to further amend his complaint. Plaintiff subsequently declared his intention to stand on his first amended complaint. Consequently, on June 30, 1992, the court entered an order stating that there was no just reason to delay enforcement or appeal of its previous order dismissing the complaint. Plaintiff filed a timely notice of appeal.

Plaintiff first contends that he alleged adequate consideration for the oral employment contract for the stated term. He contends that by leaving a higher paying position, causing his wife to quit her job, selling their Michigan home, moving to Illinois and signing a contract to purchase a house in Illinois, he provided adequate consideration. In the alternative, he contends that his continuation of employment after threatening to resign and receiving further assurances from defendant’s agents constituted consideration. Defendant responds that giving up one position to accept another cannot constitute consideration for an employment contract and neither can the other acts which plaintiff alleges. Defendant maintains that these activities are inherent in accepting a new job offer. Moreover, agreeing to continue working for defendant cannot constitute consideration for the alleged promise of a guaranteed term of employment, since plaintiff was at that time already obligated to work for defendant.

Defendant also makes a number of alternative contentions relative to the contract count. Defendant contends that, even assuming that consideration was adequate, plaintiff fails to allege a sufficiently definite promise of employment for a particular term. Defendant also maintains that the alleged oral contract is barred by the Statute of Frauds (740 ILCS 80/0.01 et seq. (West 1992)) and that plaintiff improperly seeks punitive damages in a breach of contract action. The critical question, then, is whether the trial court correctly determined that the complaint was insufficient to state a cause of action for breach of an employment contract.

In ruling on a section 2 — 615 motion to dismiss (735 ILCS 5/2— 615 (West 1992)), the court must accept as true all well-pleaded facts and all reasonable inferences which can be drawn therefrom. (Kolegas v. Heftel Broadcasting Corp. (1992), 154 Ill. 2d 1, 8-9; Geick v. Kay (1992), 236 Ill. App. 3d 868, 873.) A complaint should not be dismissed for failure to state a cause of action unless it clearly appears that no set of facts could be proved which would entitle the party to relief. (Campbell v. A.C. Equipment Services Corp. (1993), 242 Ill. App. 3d 707, 711; Geick, 236 Ill. App. 3d at 873.) In making this determination, the court is to interpret the allegations of the complaint in the light most favorable to the plaintiff. (Kolegas, 154 Ill. 2d at 9; Camp bell, 242 Ill. App. 3d at 711.) The complaint must be liberally construed with a view to doing substantial justice between the parties. 735 ILCS 5/2 — 603(c) (West 1992).

In general, an employment contract is terminable at will by either party unless the contract itself specifies a different durational term. (Duldulao v. St. Mary of Nazareth Hospital Center (1987), 115 Ill. 2d 482, 489; Jago v. Miller Fluid Power Corp. (1993), 245 Ill. App. 3d 876, 878.) A hiring at a monthly or annual salary, if no duration is specified, is considered to be at will. Jago, 245 Ill. App. 3d at 879; Owens v. Second Baptist Church (1987), 163 Ill. App. 3d 442, 445-46.

Plaintiff’s complaint alleges that his job duties, as described by Leventry-Jeffers and confirmed by Ball, were to develop curricula and conduct professional seminars “through 1991.” Plaintiff alleges that he was to be employed at an annual salary of $75,000 and would receive a $25,000 bonus at the end of the first year.

Curiously, plaintiff devotes much of his brief to his contention that he gave adequate consideration in return for the promise of employment through 1991. Plaintiff briefly asserts that the allegations described above establish the parties’ intention to enter into an employment contract through the end of 1991. The latter is the critical assertion, since if there was no promise to employ plaintiff through 1991, he could not give consideration for it.

We hold that, when liberally construed and viewed in the light most favorable to plaintiff, the complaint’s allegations are sufficient to state a cause of action for breach of an oral contract to employ plaintiff through 1991. Taking as true all the well-pleaded facts, it appears that the parties contemplated that plaintiff would be hired for the duration of the project. The parties contemplated a considerable investment of time in developing and initially presenting the training programs and expected plaintiff to supervise the entire process. Although not of themselves conclusive, the references to an annual salary and bonus further buttress this conclusion. (See Miller v. Community Discount Centers, Inc. (1967), 83 Ill. App. 2d 439; see also Berutti v. Dierks Foods, Inc. (1986), 145 Ill. App. 3d 931 (contract referred to guaranteed salary for 12 months).) The allegations concerning the employment of support staff and the development of a marketing budget add further credence to the conclusion that the parties intended a substantial undertaking with plaintiff at its head.

Defendant relies on Federal cases in which it was held that statements that an assignment was “expected” or “scheduled” to last for a given length of time were mere statements of expectancy and did not create contractual obligations. (Buian v. J.L. Jacobs & Co. (7th Cir. 1970), 428 F.2d 531; Payne v. A F H I/Netherlands, B.V. (N.D. Ill. 1980), 522 F. Supp. 18.) Those cases, however, are distinguishable. In both cases, which involved written contracts for overseas postings, the contracts contained detailed lists of conditions which could cause the positions to be terminated prior to the scheduled completion date. (Buian, 428 F.2d at 533; Payne, 522 F. Supp. at 23.) No such conditions are alleged in the instant complaint.

Furthermore, we agree that plaintiff alleged adequate consideration for the promise of employment through 1991. Mutual consideration, of course, is an essential element of a contract. (Harris v. Johnson (1991), 218 Ill. App. 3d 588, 592.) Generally, any act or promise which is of benefit to one party or disadvantage to the other constitutes sufficient consideration to support a contract. Harris, 218 Ill. App. 3d at 592-93.

Some courts have required a plaintiff pleading a contract of a specified duration to establish the existence of additional consideration beyond plaintiff’s relinquishing of other job opportunities to come to work for defendant. Refusing other employment is inherent in accepting any job offer, including a hiring at will, and some courts thus have required additional consideration for the promise of permanency. (Koch v. Illinois Power Co. (1988), 175 Ill. App. 3d 248, 253; Ladesic v. Servomation Corp. (1986), 140 Ill. App. 3d 489.) Other courts, however, have rejected this position, holding that if the parties’ intention to establish a contract for a given term is clear, there is no requirement of “additional consideration” beyond the employee’s promise to work for the employer. (Martin v. Federal Life Insurance Co. (1982), 109 Ill. App. 3d 596, 602; Lamaster v. Chicago & Northeast Illinois District Council of Carpenters Apprentice & Trainee Program (N.D. Ill. 1991), 766 F. Supp. 1497.) We need not resolve this apparent split of authority in the present case, since we find that the consideration was sufficient in any case.

Plaintiff alleges that defendant initially contacted him about coming to work for it. Plaintiff and his wife were then employed in and living in Michigan. To accept defendant’s offer, plaintiff resigned a higher paying position. His wife also left her job in Michigan, and the parties had to forego this additional income as well. Plaintiff and his wife sold their home in Michigan and became obligated to purchase a home in Du Page County, Illinois. All of this represents more than simply quitting another job to come to work for defendant.

In Molitor v. Chicago Title & Trust Co. (1945), 325 Ill. App. 124, defendant specifically requested plaintiff to give up his law practice in New York and move to Chicago in exchange for “permanent employment” with defendant. The appellate court held that this evidence supported the jury’s verdict that defendant breached the contract. Molitor, 325 Ill. App. at 131-32.

In Lamaster, in exchange for the program director’s promise that plaintiff would hold the position “as long as he wished to do so,” plaintiff left his old job, passing up a substantial promotion. (Lamaster, 766 F. Supp. at 1498.) The court held that consideration may be found where the plaintiff relinquishes another job and where this is specifically bargained for. (766 F. Supp. at 1503.) Thus, we find plaintiff’s allegations that defendant specifically requested him to move to Illinois, necessarily giving up his former job, to work for defendant adequate to establish consideration for the promise of employment through 1991.

Defendant further contends, however, that the oral employment contract is barred by the Statute of Frauds. The statute prohibits a party from relying on an oral contract which cannot be performed within one year. (740 ILCS 80/1 (West 1992).) However, the Statute of Frauds does not bar the enforcement of an oral contract where there has been part performance by one party in reliance on the promise of the other. (Davies v. Martel Laboratory Services, Inc. (1989), 189 Ill. App. 3d 694, 698.) Moreover, allegations of fraud may estop a-party from relying on the statute. As discussed more fully below, plaintiff alleges that defendant fraudulently misrepresented the nature of the position it was offering plaintiff. This conduct negates the application of the Statute of Frauds. (See Sinclair v. Sullivan Chevrolet Co. (1964), 31 Ill. 2d 507, 510.) The court therefore erred in dismissing plaintiff’s count II alleging breach of an oral employment contract.

Plaintiff further contends that the court erred in dismissing his count I alleging fraudulent misrepresentation. The complaint alleges a number of misrepresentations by defendants. Plaintiff alleges that defendant falsely stated that plaintiff would conduct the seminars through 1991. Plaintiff alleges that defendant knew this statement was false at the time it was made, that defendant never intended to employ plaintiff through 1991. Rather, defendant intended to induce plaintiff to accept the position with an offer of at least two years’ employment, utilize his talents to develop the programs, then replace him with a less highly paid employee.

Plaintiff also alleges that defendant falsely represented that it had budgeted amounts for hiring support staff and for marketing the programs. Plaintiff alleges that when he threatened to resign and return to Michigan, defendant reaffirmed these misrepresentations.

To plead a legally sufficient fraud action, plaintiff must allege that (1) defendant made a statement; (2) of a material nature; (3) which was untrue; and (4) was known by defendant to be untrue, or was made in culpable ignorance of its truth or falsity; (5) was made for the purpose of inducing reliance by the plaintiff; (6) was actually relied on by the plaintiff; and (7) resulted in plaintiff’s injury. Bank of Northern Illinois v. Nugent (1991), 223 Ill. App. 3d 1, 9.

Defendant initially contends that plaintiff failed to establish the final element listed above, namely, that he suffered any cognizable injury in reliance on defendant’s statements. Plaintiff responds that he did rely on defendant’s statements to his detriment by accepting the employment offer. The detriment which plaintiff allegedly suffered is essentially the same as the consideration for the alleged contract discussed above. The parties again dispute whether these elements— leaving a higher paying job in Michigan, selling the family home in that State, and becoming obligated to purchase a new home in Illinois — constitute sufficient “detriment.” Under the facts of this case, we see no reason to distinguish between consideration for a contract, which can consist of any detriment to a party, and reliance in a fraud context. (See Davies v. Martell Laboratory Services, Inc. (1989), 189 Ill. App. 3d 694, 697.) Thus, the conduct which may be sufficient consideration for a contract may also be sufficient “detriment” to support a finding of reliance in the fraud context. We reiterate that we presently determine only the sufficiency of the complaint to state one or more causes of action. Whether a contract was actually formed and whether plaintiff actually relied to his detriment on any false statements by defendant are questions for the trier of fact.

Having determined that plaintiff adequately alleges detrimental reliance, we return to the question whether plaintiff adequately alleges fraudulent misrepresentations by defendant. Defendant makes two separate contentions regarding the sufficiency of these allegations. First, it contends that plaintiff’s allegations of fraud are merely an attempt impermissibly to recast his contract claim as a tort. Alternatively, defendant maintains that if plaintiff is allowed to plead a separate tort action, the allegations are still insufficient because the misrepresentations relate solely to future conduct and that such “promissory fraud” is not actionable in Illinois.

Generally, a party may not recover in tort for what is essentially a breach of contract. (See Masters v. Central Illinois Electric & Gas Co. (1955), 7 Ill. App. 2d 348, 369.) However, a well-recognized exception exists where the fraud vitiates the making of the contract itself, in other words, where the plaintiff is fraudulently induced to enter into the contract in the first place. Plaintiff’s complaint may fairly be read as alleging that he would not have entered into the contract with defendant but for the misrepresentations. There is thus no bar to plaintiff maintaining a separate cause of action based on fraud in the inducement.

A number of courts in other jurisdictions have recently sustained causes of action for fraud based on facts extremely similar to those of this case. In Pearson v. Simmonds Precision Products, Inc. (Vt. 1993), 624 A.2d 1134, for example, defendant enticed plaintiff to move to Vermont and work for defendant on a defense contract related to the B-2 bomber. Plaintiff expressed concern about his job security, but defendant assured him that he was not being hired solely for the B-2 project. Defendant represented that only 40% of its work consisted of military contracts and that there would be work available for plaintiff if the B-2 project fell through. In fact, defendant knew that plaintiff had been hired solely to work on the bomber project. Shortly after plaintiff was hired, the project was curtailed and defendant laid off plaintiff. The Vermont Supreme Court affirmed a jury verdict for plaintiff, holding that the jury could have found that defendant’s misrepresentations induced plaintiff to move to Vermont and accept the job with defendant. Pearson, 624 A.2d at 1136-37.

In Stewart v. Jackson & Nash (2d Cir. 1992), 976 F.2d 86, the court found fraud in the inducement where defendant persuaded plaintiff to leave her job with another law firm by misrepresenting that it had obtained a major environmental law client, that it was in the process of establishing an environmental law department, and that plaintiff would head the department. In Hanks v. Hubbard Broadcasting, Inc. (Minn. App. 1992), 493 N.W.2d 302, the court first held that extra-contract damages were appropriate where there is an independent tort. The court affirmed a jury finding of fraud where defendant persuaded plaintiff, a news anchorwoman, to bypass other opportunities by misrepresenting that it had planned a massive promotional campaign for her and that her reduction in status on the newscasts was only temporary while defendant introduced her new co-anchor to the market.

The United States Court of Appeals for the Seventh Circuit recently considered a similar situation which arose under Illinois law. In Bower v. Jones (7th Cir. 1992), 978 F.2d 1004, defendant induced plaintiff to leave his present job and become the editor of a magazine called Fidelity by promising him a written contract and a percentage of advertising and subscription revenues. Defendant had plaintiff assist in preparing a grant application, then promptly terminated him. The court apparently recognized that plaintiff’s complaint stated a cause of action for fraud, but nonetheless affirmed summary judgment for defendant. Plaintiff did not prove that he failed to receive his share of revenues during his employment. Regarding the promise of a written contract, which was not kept, the court found that plaintiff failed to prove that defendant did not intend to keep the promise at the time it was made. (Bower, 978 F.2d at 1012.) Plaintiff’s allegations in the instant case are similar to those of Bower and the other cases mentioned.

Defendant next contends that plaintiff’s allegations of misrepresentations relate solely to promises of future conduct or predictions concerning future events, which are not actionable in Illinois. However, plaintiff alleges that defendant stated that amounts had been budgeted for faculty and support staff and that amounts had been budgeted for marketing. These are allegations of presently existing facts, not promises of some future action.

Moreover, an exception to the prohibition of promissory fraud exists where the misrepresentations are part of a scheme to defraud. (Pepper v. Marks (1988), 168 Ill. App. 3d 253; Bower, 978 F.2d at 1011-12.) In this case, plaintiff alleges that defendant’s representation that plaintiff would supervise presentation of training programs through 1991 was part of a scheme to induce him to leave his previous position, accept defendant’s job, develop the programs, and then replace him with a cheaper employee. Plaintiff alleges that defendant made this statement with the present intention of not complying with it. These allegations are adequate to demonstrate a scheme to defraud. Bower, 978 F.2d .at 1011-12; see also Pearson, 624 A.2d at 1136-37; Stewart, 976 F.2d at 90.

Defendant also contends that plaintiff’s complaint improperly sought punitive damages in both counts. Generally, punitive damages are not available in a breach of contract action. (Morrow v. L.A. Goldschmidt Associates, Inc. (1986), 112 Ill. 2d 87, 94.) However, plaintiff’s complaint does not seek punitive damages in the breach of contract count.

Defendant also contends that plaintiff improperly seeks punitive damages in the fraud count. In order to recover punitive damages, plaintiff must plead and prove an independent tort and must show that the misconduct is above and beyond that which is the basis of the action. (Knierim v. Izzo (1961), 22 Ill. 2d 73, 87-88; Parsons v. Winter (1986), 142 Ill. App. 3d 354, 361.) Even where fraud is proved, punitive damages may be allowed only if aggravating circumstances are specifically pleaded and proved. (Beaton & Associates, Ltd. v. Joslyn Manufacturing & Supply Co. (1987), 159 Ill. App. 3d 834, 846.) Because the trial court found that the complaint failed to state a cause of action, the court never considered whether plaintiff adequately pled punitive damages. On remand, the court should consider this question.

Plaintiff’s allegations of a breach of contract and of fraud were sufficient to survive a motion to dismiss. The court thus erred in dismissing the complaint.

For the foregoing reasons, the judgment of the circuit court of Du Page County dismissing plaintiff’s first amended complaint is reversed, and the cause is remanded for further proceedings.

Reversed and remanded.

BOWMAN and COLWELL, JJ., concur.


source: Caselaw Access Project

author: JUSTICE BRESLIN

license: Public Domain

text:
    JANE WILSON, d/b/a Forman Real Estate, Plaintiff-Appellant, v. JAMES R. MIDDENDORF et al., Defendants-Appellees.
    Third District
    No. 3 — 92—0895
    Opinion filed August 5, 1993.
    Rehearing denied September 9, 1993.

      Jeff W. DeJoode, of March & McMillan, P.C., of Macomb, for appellant.
    Stanley L. Tucker, of Hartzell, Glidden, Tucker & Hartzell, of Carthage, for appellees.
   JUSTICE BRESLIN

delivered the opinion of the court:

The plaintiff, Jane Wilson, d/b/a Forman Real Estate, filed suit against the defendants, James and Rosey Middendorf, seeking to recover a 7% commission pursuant to an exclusive listing agreement for the sale of the defendants’ house. The trial court concluded that the contract was unenforceable. Wilson appeals.

In early 1992 James and Rosey Middendorf put their house up for sale. On January 25, 1992, Jane Wilson, a real estate broker, met with the Middendorfs to discuss listing their home with her. Wilson prepared a listing agreement which provided that she would have the exclusive right to sell the Middendorfs’ home from January 25, 1992, to July 25, 1992, and that she would receive a 7% commission on the sale.

Mrs. Middendorf testified that prior to signing the agreement, she informed Wilson that they wanted to exclude two prospective buyers from the listing agreement. In the upper right-hand corner of the listing agreement, Wilson wrote “Two Exclusions Testlika & Jones thru 1/31/92.” Mrs. Middendorf admitted telling Wilson “Jones,” but explained that it was probably a mistake. She must have meant to say “Jan’s.” (Jan Entwhistle was the broker who showed the Middendorfs’ house to the eventual buyer.)

Mrs. Middendorf also testified that she told Wilson that she did not want the agreement to take effect until January 31, 1992. To that end, Mrs. Middendorf attempted to postdate the agreement by writing “Jan. 31, 1992” on the date line near her signature.

Jane Wilson testified that she did not agree to postpone taking any action until January 31, 1992. However, Wilson did acknowledge that Mrs. Middendorf had written January 31, 1992, on the date line of the contract. Additionally, she acknowledged writing the exclusions in the upper right-hand corner of the agreement.

On January 29, 1992, Jan Entwhistle showed the Middendorfs’ house to Jackie Lee. Lee liked the house and on February 1, she and the Middendorfs reached an agreement with regard to the sale.

On May 21, 1992, Wilson filed a complaint alleging that the Middendorfs failed to pay her the 7% commission provided for in the listing agreement. Following the presentation of evidence, the trial court concluded that the contract was unenforceable because it was ambiguous and there was never a meeting of the minds as to the terms of the contract.

On appeal, Wilson argues that the trial court erred in concluding that the contract was so ambiguous as to be unenforceable. We agree.

Where the material terms of a contract are ambiguous, the contract is unenforceable. (Morey v. Hoffman (1957), 12 Ill. 2d 125, 145 N.E.2d 644.) In this case, however, the ambiguities found by the trial court were no longer material at the time the Middendorfs agreed to sell their home on February 1. Whether the contract began on January 25 or January 31, it was in effect on February 1. Whether the exclusion was “Jones” or “Jan’s,” it expired on January 31.

It is well established that a broker is entitled to a commission if the broker has an exclusive sale agreement with the owner and the property is sold by anyone during the life of the agreement. (Kennedy, Ryan, Monigal & Associates, Inc. v. Watkins (1993), 242 Ill. App. 3d 289, 609 N.E.2d 925.) Therefore, because the house was sold during the life of the listing agreement between Wilson and the Middendorfs and because the stated exclusions had expired prior to the sale, Wilson is entitled to her commission.

For the foregoing reasons, the judgment of the circuit court of McDonough County is reversed.

Reversed.

LYTTON and STOUDER, JJ., concur.


author: JUSTICE BARRY

text:
    JOHN B. MAZUR et al., Plaintiffs-Appellees, v. QUARTERS DESIGNS, INC., Defendant (American Arbitration Association et al., Defendants-Appellants).
    Third District
    No. 3 — 92—0923
    Opinion filed July 23, 1993.
    Modified on denial of rehearing September 14, 1993.
    Miller, Shakman, Hamilton & Kurtzon, of Chicago (Geraldine Soat Brown, of counsel), for appellants.
    Timothy J. Rathbun, of McKeown Law Office, of Joliet (Gary S. Mueller, of counsel), for appellees.
   JUSTICE BARRY

delivered the opinion of the court:

The American Arbitration Association (AAA) and John F. Dobler, both defendants herein, have been granted leave to appeal from an order of the circuit court of Will County denying their motion for a change of venue from Will County to Cook County. We reverse.

The underlying dispute in this litigation involved the allegedly defective interior design work done by a third defendant, Quarters Designs, for plaintiff John B. Mazur’s neurosurgery premises located in Kane County. The contract between Mazur and Quarters Designs required any disputes to be submitted to arbitration pursuant to the rules of AAA. In accordance with those rules, an arbitration hearing was held in Cook County before Dobler, the arbitrator, and resulted in an award of $9,635 against Mazur. He subsequently filed a five-count complaint in Will County.

Counts I and II sought to vacate the arbitration award, and count III requested modification of the award. Count IV sought declaratory judgment declaring that the award not be enforced, and count V asserted an action for professional negligence. Count V was solely against Quarters Design, while the other four counts named all three defendants. Each of the five counts included an allegation that it was brought pursuant to the Uniform Arbitration Act (Ill. Rev. Stat. 1991, ch. 10, par. 101 et seq.).

Defendants AAA and Dobler filed a motion to transfer this cause to Cook County pursuant to the venue provision of the Uniform Arbitration Act (Ill. Rev. Stat. 1991, ch. 10, par. 117 (now 710 ILCS 5/17 (West 1992))), which provides that actions to vacate or modify awards shall be filed in the county in which the hearing was held. The trial court denied defendants’ motion. AAA and Dobler filed a motion to reconsider and a second motion to transfer venue, this one based on forum non conveniens, and both of these motions were denied as well.

Quarters Design also filed a motion to transfer venue which was denied, but no appeal was taken from that ruling.

The determinative question on appeal is whether the trial court erred in refusing to apply the special venue provision of the Uniform Arbitration Act instead of the general venue provisions of the Code of Civil Procedure (Ill. Rev. Stat. 1991, ch. 110, par. 2 — 101 et seq. (now 735 ILCS 5/2 — 101 et seq. (West 1992))). The trial court presumably accepted plaintiff’s view that where a complaint has multiple venues available, plaintiff can select the forum of his choice. Plaintiff "argues that AAA does business in Will County, that the declaratory judgment action against AAA is not covered by the Uniform Arbitration Act, and, therefore, that Will County was an appropriate choice of venue for the entire action.

Plaintiff admits that the causes of action set out in counts I, II, and III of the complaint, standing alone, come within the Uniform Arbitration Act provision specifying the county of hearing (here, Cook County) to be the only proper venue. Count V against Quarters Design is not involved in this appeal, and plaintiff does not argue that the correctness of the trial court order hinges upon count V. However, plaintiff does insist that Will County was a proper venue for count IV, the declaratory judgment count, because AAA does business in Will County and that it was therefore proper to file the complaint in Will County. AAA denies that it does business in Will County for purposes of venue determination since it has no office or place of business in Will County.

Of particular significance is the fact that count IV itself asserts that it is brought pursuant to the Uniform Arbitration Act, and certainly the relief sought requires a setting aside of the arbitration award. Thus, on its face, the declaratory judgment pleading is subject to the venue requirement of the Uniform Arbitration Act. The same is true of count V.

In addition, it is a settled rule of statutory construction that a particular statutory enactment will prevail as against general provisions on the same subject. (People ex rel. Myers v. Pennsylvania R.R. Co. (1960), 19 Ill. 2d 122, 166 N.E.2d 86.) In Harrell v. Board of Trustees of Southern Illinois University (1977), 48 Ill. App. 3d 319, 362 N.E.2d 441, the provision now contained in section 2 — 101 of the Code of Civil Procedure was held to be a general venue provision which gave way before a more specific statutory provision. Accordingly, the specific venue provision of the Arbitration Act must prevail over the general venue provision of section 2 — 101.

Furthermore, pleading a declaratory judgment action cannot be utilized as an indirect means of challenging an arbitration award in a county where a direct challenge would be improper. To hold otherwise would render the venue statute meaningless and of no effect. Cf., County of Peoria v. American Federation of State, County & Municipal Employees, Council 31 (1988), 167 Ill. App. 3d 247, 521 N.E.2d 151.

Plaintiff argues that the standard of review is whether the trial court abused its discretion in denying the change of venue, and that the test for ordering a change is whether the relevant factors favor a change, using a forum non conveniens analysis. (See, e.g., Cook v. General Electric Co. (1992), 146 Ill. 2d 548, 588 N.E.2d 1087.) We believe that the doctrine of forum non conveniens does not supercede the applicable statute specifying venue for this case. Here the court erred as a matter of law in not recognizing that the Uniform Arbitration Act controls the venue of this litigation. The analysis used for determining forum non conveniens is not applicable here. Furthermore, none of the parties have a place of business in Will County, and none of the disputed transaction took place in Will County.

For the reasons stated, we conclude that the trial court erred in denying defendants’ motion for a transfer of this cause to Cook County pursuant to the Uniform Arbitration Act. We reverse and remand with directions to order such a transfer. Pursuant to our authority to make any order that ought to have been made or given (134 Ill. 2d R. 366(a)(5)), we direct that all five counts of the complaint be transferred to Cook County.

Reversed and remanded with directions.

BRESLIN and LYTTON, JJ., concur.


author: JUSTICE RARICK

text:
    ROGER YOUNG, Appellant, v. THE INDUSTRIAL COMMISSION et al. (Caterpillar Tractor Co., Appellee).
    Third District (Industrial Commission Division)
    No. 3 — 92—0783WC
    Opinion filed August 6, 1993.

      Patrick J. McNamara, of Schenk, Duffy, Quinn, McNamara, Phelan, Carey & Ford, of Joliet, for appellant.
    Timothy J. Rathbun and William P. Mullarkey, both of McKeown Law Office, of Joliet, for appellee.
   JUSTICE RARICK

delivered the opinion of the court:

Claimant, Roger Young, sought benefits pursuant to the Workers’ Compensation Act (Ill. Rev. Stat. 1989, ch. 48, par. 138.8 et seq.) (the Act) for a work-related hearing loss. Young was employed by Caterpillar Tractor Co. as a welder. The parties stipulated to all of the evidence, including the fact that this was a hearing-loss case and that Young’s hearing loss was causally related to his employment. The parties also stipulated that the only issues were the nature and extent of Young’s hearing loss and the proper application of the formula for determining hearing loss. Also introduced into evidence by stipulation were various audiograms.

An audiogram taken by Caterpillar on May 11, 1967, disclosed the following hearing loss in the left ear: 10 decibels at 1,000 HZ; 10 decibels at 2,000 HZ; and 20 decibels at 3,000 HZ. In the right ear, the losses shown were: 5 decibels at 1,000 HZ; 10 decibels at 2,000 HZ; and 25 decibels at 3,000 HZ.

An audiogram by respondent on June 4, 1979, disclosed the following hearing loss in the left ear: 15 decibels at 1,000 HZ; 20 decibels at 2,000 HZ; and 55 decibels at 3,000 HZ. In the right ear the losses shown were: 10 decibels at 1,000 HZ; 10 decibels at 2,000 HZ; and 50 decibels at 3,000 HZ.

Other audiograms of Young’s hearing taken at work on June 26, 1984, September 10, 1985, and November 17, 1986, showed continued deterioration of his hearing, especially at upper frequencies.

On September 14, 1987, an audiogram was taken at Young’s request by Joliet Audio Vestibular Laboratories. This audiogram disclosed the following hearing loss in the left ear: 20 decibels at 1,000 HZ; 40 decibels at 2,000 HZ; and 65 decibels at 3,000 HZ. The hearing loss in the right ear was: 20 decibels at 1,000 HZ; 25 decibels at 2,000 HZ; and 60 decibels at 3,000 HZ.

Another audiogram was taken by Joliet Audio Vestibular Laboratories on June 1, 1989. The results indicated the following hearing loss in the left ear: 25 decibels at 1,000 HZ; 40 decibels at 2,000 HZ; and 70 decibels at 3,000 HZ. In the right ear the losses were: 25 decibels at 1,000 HZ; 20 decibels at 2,000 HZ; and 60 decibels at 3,000 HZ.

The arbitrator determined that Young had sustained a hearing loss of 9.1% in the right ear and 27.3% in the left ear, based on the June 6, 1989, audiogram. The arbitrator also ruled that the only audiogram prior to 1975, which was taken on May 11, 1967, disclosed no hearing loss for which Caterpillar Tractor would be entitled to credit. The credit to which the arbitrator referred arises because of a provision in the Act which provides that an employer will not be liable for any hearing loss occurring prior to July 1, 1975.

On review before the Industrial Commission (the Commission), Caterpillar Tractor argued that it was entitled to credit for any pre1975 hearing loss, regardless of whether such loss would have been compensable under the Act. Young maintained that Caterpillar would be entitled to credit for any pre-1975 hearing loss only if such loss would have been compensable under the Act. The Commission agreed with Caterpillar, reasoning that section 8(d)(16)(d) of the Act did not include the term “compensable.” The Commission determined .that Young had sustained a 3.09% compensable hearing loss in his left ear, and no compensable hearing loss in his right ear.

The circuit court confirmed the decision of the Commission, finding the rules of the Industrial Commission and the statute were correctly applied, and that the Commission’s decision was not against the manifest weight of the evidence.

On appeal, Young argues that the Commission erred in determining that Caterpillar was entitled to credit for any hearing loss Young suffered prior to July 1, 1975. Specifically, Young maintains that Caterpillar is entitled to credit only for compensable hearing loss occurring prior to July 1, 1975.

Section (8)(d)(16) of the Act (Ill. Rev. Stat. 1989, ch. 48, par. 138.8(d)(16)) provides in pertinent part:

“For the permanent partial loss of use of a member or sight of an eye, or hearing of an ear, compensation during that proportion of the number of weeks in the foregoing schedule provided for the loss of such member or sight of an eye, or hearing of an ear, which the partial loss of use thereof bears to the total loss of use of such member, or sight or eye, or hearing an ear.
(a) Loss of hearing for compensation purposes shall be confined to the frequencies of 1,000, 2,000 and 3,000 cycles per second. Loss of hearing ability for frequency tones above 3,000 cycles per second are not to be considered as constituting disability for hearing.
(b) The percent of hearing loss, for purposes of the determination of compensation claims for occupational deafness, shall be calculated as the average in decibels for the thresholds of hearing for the frequencies of 1,000, 2,000 and 3,000 cycles per second. Pure tone air conduction audiometric instruments, approved by nationally recognized authorities in this field, shall be used for measuring hearing loss. If the losses of hearing average 30 decibels or less in the 8 frequencies, such losses of hearing shall not then constitute any compensable hearing disability. If the losses of hearing average 85 decibels or more in the 3 frequencies, then the same shall constitute and be total or 100 percent compensable hearing loss.
(c) In measuring hearing impairment, the lowest measured losses in each of the 3 frequencies shall be added together and divided by 3 to determine the average decibel loss. For every decibel of loss exceeding 30 decibels an allowance of 1.82% shall be made up to the maximum of 100 percent which is reached at 85 decibels.
(d) If a hearing loss is established to have existed on July 1, 1975 by audiometric testing the employer shall not be liable for the previous loss so established nor shall be liable for any loss for which compensation has been paid or awarded.” (Emphasis added.)

Sections 7130.20 and 7130.30 of the Industrial Commission rules provide in pertinent part:

“(a) The Industrial Commission shall use the following rebuttable presumptions to determine percentage loss of hearing in cases where the hearing loss was caused by exposure between July 1, 1975, and September 15, 1980:
The percentage loss of hearing shall be calculated using the average, in decibels, of the thresholds of hearing for the frequencies of one thousand, two thousand and three thousand cycles per second. If such losses of hearing average thirty decibels American National Standards Institute (ANSI) or less in the three frequencies, such losses of hearing shall not constitute any hearing disability. If the losses of hearing average eighty-five decibels (ANSI) or more in the three frequencies, such losses of hearing shall constitute total loss of
hearing. Every average decibel loss exceeding thirty decibels (ANSI) shall constitute 1.82 percent of loss of hearing.
* * *
An employer shall be liable for the entire occupational deafness to which his employment contributed unless the employer can establish the extent of Petitioner’s hearing loss prior to July 1, 1975. If the employer can establish prior hearing loss, the employer shall only be liable for the hearing loss caused by exposure, to employer’s noise after July 1, 1975.”

Under the statute and the Commission rules, losses of hearing averaging 30 decibels or less do not constitute any compensable hearing disability.

In the present case, the arbitrator based Young’s award on the following calculations:

LEFT EAR

6-06-89 (25+40+70)/3 = 45.0 - 30 = 15 x 1.82 = 27.30%

5- 11-67 (10+10+20)/3 = 13.3-30 = 0x1.82 = 0 27.30%

RIGHT EAR

6- 06-89 (25+20+60)/3 = 35 - 30 = 5 x 1.82 = 9.10%

5-11-67 ( 5+10+25)/3 = 10 - 30 = 0 x 1.82 = 0 9.10%

In determining the amount of credit to be given Caterpillar for Young’s pre-1975 hearing loss, the arbitrator subtracted 30 from the average loss disclosed by the 1967 audiogram. This has the effect of giving Caterpillar credit only for that portion of the pre-1975 loss which would be compensable under subsection (c), which provides, that hearing. losses of 30 decibels or less constitute no compensable hearing disability. The arbitrator’s method of calculation thus effectively interpreted section 8(d)(16)(d) to mean that the employer would not be liable for any compensable loss occurring prior to July 1, 1975. Such interpretation is not supported by a plain reading of the statute. Section (d) relieves the employer of liability for any hearing loss prior to July 1, 1975. Had the legislature wished to relieve the, employer of liability only for compensable hearing loss, it could have easily done so by including such language in the statute. .

The Commission used the following calculations to determine Young’s compensable hearing disability:

LEFT EAR

6-06-89 (25+40+70)/3 = 45 (average hearing loss as of 6-6-89)

5- 11-67 (10+10+20)/3 = 13.3 (average hearing loss as of 5-11-67)

45-13.3 = 31.7 (average loss since 1975) - 30 = 1.7 x 1.82 = 3.09%

RIGHT EAR

6- 06-89 (25+20+60)/3 = 35 (average hearing loss as of 6-6-89)

5-11-67 (5 + 10+25)/3 = 10 (average hearing loss as of 5-11-67)

35-10 = 25 (average loss since 1975) - 30 = -5 0%

The Commission first determined the net hearing loss since July 1, 1975, and then subtracted the 30 decibel figure set forth in section 8(d)(16)(b) to determine the degree of compensable hearing disability. We believe that the Commission’s calculations comport with the plain language of the statute and its most logical interpretation. A plain reading of section 8(d)(16)(d) discloses a legislative intent that employers not be held liable for any hearing loss occurring prior to July 1, 1975.

Young points to two previous unreported Industrial Commission cases wherein the Commission ostensibly calculated compensable hearing loss in the same manner as did the arbitrator in the present case. Decisions of the Commission in unrelated cases have no precedential impact on cases before this court, and no bearing on our resolution of the issue at hand. We conclude that under section 8(d)(16)(d), an employer is not liable for any hearing loss attributable to injury arising prior to July 1, 1975, and that compensable hearing loss after July 1, 1975, is that amount of hearing loss occurring after July 1, 1975, in excess of 30 decibels.

We are cognizant of the fact that our holding regarding the calculation of compensable hearing loss does not comport with the method of calculation used by the Commission in our recent case of Wagner Castings Co. v. Industrial Comm’n (1993), 241 Ill. App. 3d 584, 609 N.E.2d 397. The issue raised in the present case was not raised in Wagner Castings, however, and so was not properly before us in that case. Consequently, Wagner Castings constitutes no authority supporting any method of calculation other than that determined in the present case.

For the foregoing reasons, we affirm the decision of the circuit court of Will County.

Affirmed.

McCULLOUGH, P.J., and RAKOWSKI, WOODWARD and SLATER, JJ., concur.


text:
    ESTATE OF MICHELLE AIMONE, Plaintiff-Appellee, v. STATE OF ILLINOIS HEALTH BENEFIT PLAN/EQUICOR, Respondents-Appellants.
    Third District
    No. 3 — 92—0996
    Opinion filed August 11, 1993.
    Rehearing denied September 14, 1993.
    O’Halloran, Kasoff, Helander, Geitner & Cook (George J. Casson, of counsel), and Christopher J. Michas, of John O. Demaret & Associates, both of Northbrook, for appellants.
    Gomien, Root & Rigazio, of Morris (Roger B. Gomien, of counsel), for appellee.
   JUSTICE BRESLIN

delivered the opinion of the court:

The respondents, State of Illinois Health Benefit Plan/Equicor and Health Cost Controls (collectively, the Plan) filed a lien against the settlement proceeds received by the estate of the plaintiff, Michelle Aimone, in a personal injury action. "When the plaintiff moved to adjudicate the lien, the trial court held that the lien was invalid. We affirm based on the previously established rule of the Illinois Appellate Court that subrogation liens against recoveries received by the estates of minors are invalid.

The facts of the case are undisputed. Michelle Aimone, a minor, was injured in a motor vehicle accident when the car in which she was riding was struck by another car. She was seriously injured and the cost of her medical treatment exceeded $100,000. A lawsuit was filed on her behalf against the drivers of both cars involved in the collision.

Michelle was covered by the Plan through her mother’s employment with the Illinois Department of Conservation. The Plan contained the following language:

“If a covered person is injured, and benefits are paid by this Plan, the covered person will:
a. Immediately reimburse the Plan for any damages collected, whether by action at law, settlement or otherwise, to the extent that the Plan has provided benefits to or on behalf of any such covered person; and
b. The Plan shall have a lien, to the extent of benefits provided. ***
c. *** The Plan reserves the right to withhold or delay payment of any benefits otherwise payable until all executed documents required by this provision have been received from the employee.”

Pursuant to this provision, the Plan asserted an $85,116.67 lien for benefits paid on behalf of Michelle.

Michelle’s claims against the drivers of the vehicles involved in the accident were settled for $300,000 and $20,000, which were the limits of the respective policies. Subsequently, her estate filed a motion to adjudicate the Plan’s lien. The trial court held the lien to be invalid.

At a hearing on the Plan’s motion to reconsider, the Plan offered the testimony of the insurance adjuster who settled the $300,000 claim. The adjuster testified on direct examination that she considered the medical bills provided to her by the estate’s attorney in evaluating the claim. However, on redirect examination, she testified that she had not considered any claims that might have been brought by Michelle’s parents. She considered only the claims Michelle had asserted. The Plan’s petition for rehearing was denied.

The sole issue presented on appeal is whether an insurer may enforce a subrogation lien against the recovery received by a minor’s estate.

In Estate of Woodring v. Liberty Mutual Fire Insurance Co. (1979), 71 Ill. App. 3d 158, 389 N.E.2d 211, the court held that since what is commonly known as the family expense statute (Ill. Rev. Stat. 1991, ch. 40, par. 1015(a)(1)) provides that the minor’s parents are liable for the payment of the minor’s medical expenses, it was the parents who received a benefit from the payment of those expenses by an insurer. Because the insurer had provided no benefit to the minor’s estate, it could not recover its payments from the estate by way of subrogation. This reasoning was followed in In re Estate of Hammond (1986), 141 Ill. App. 3d 963, 491 N.E.2d 84, and reaffirmed in Kelleher v. Hood (1992), 238 Ill. App. 3d 842, 605 N.E.2d 1018.

The Plan argues that Woodring and Hammond are distinguishable because neither of those cases involved the precise language of the insurance contract covering Michelle Aimone. Further, it argues that In re Estate of Scott (1991), 208 Ill. App. 3d 846, 567 N.E.2d 605, and In re Estate of Enloe (1982), 109 Ill. App. 3d 1089, 441 N.E.2d 868, demand a different result. We disagree.

The language of the insurance contract in question provides that a “covered person” will “immediately reimburse the Plan *** to the extent that the Plan has provided benefits to or on behalf of’ the covered person. (Emphasis added.) However, the payments made by the Plan were not made to Michelle and they were not made on behalf of Michelle inasmuch as Michelle was not liable for the expenses in the first place (see Ill. Rev. Stat. 1991, ch. 40, par 1015(a)(1); Graul v. Adrian (1965), 32 Ill. 2d 345, 205 N.E.2d 444). The benefits were paid to the medical providers on behalf of Michelle’s parents. Therefore, this case falls squarely within the precedent set by Woodring and Hammond.

In contrast, Scott and Enloe, the cases urged on us by the Plan, are distinguishable. In Scott the covered person was not a minor at the time of his injury. Although he was still covered under his parents’ insurance plan, his parents were no longer responsible for the payment of his medical expenses. Because he, would have been liable for the payment of any bills not covered by insurance, he did gain a benefit from the insurer’s payments and, therefore, subrogation was appropriate. In Enloe, the court addressed the issue of whether the family expense statute (Ill. Rev. Stat. 1991, ch. 40, par. 1015(a)(1)) was in conflict with the Hospital Lien Act (Ill. Rev. Stat. 1991, ch. 82, par. 97). The court did not address the enforceability of a subrogation claim on a minor’s estate.

We find the reasoning of Woodring and Hammond to be sound. Therefore, we adopt the ruling of those cases and hold that inasmuch as it is the parents of the minor who receive a benefit from the payment of medical expenses by an insurer, the insurer may not recover those expenses from the minor’s estate,

Next the Plan argues that even if we follow Woodring and Hammond, it is entitled to recover. It contends that because the claims of Michelle’s parents were released along with the claims of Michelle’s estate, there must have been some recovery of medical expenses. It concludes that any recovery of medical expenses was rightly paid to Michelle’s parents and therefore subject to the Plan’s lien.

In support of this argument, the Plan relies on Smith v. Marzolf (1978), 59 Ill. App. 3d 635, 375 N.E.2d 995. In Smith the plaintiff suffered severe and permanent injuries. His insurer paid a substantial sum for medical expenses, and those expenses were expected to continue throughout his lifetime. The defendant agreed to a settlement of the plaintiff’s claim by paying to the plaintiff just enough to cover the lien asserted by his insurer and paying the bulk of the settlement proceeds to the plaintiff’s wife in settlement of her loss of consortium claim. The trial court ruled that this division of settlement proceeds amounted to a fraud upon the insurer and set aside the settlement. This court affirmed.

The Plan correctly cites Smith for the proposition that settlements may not be fashioned in such a manner that they defeat subrogation rights. However, the facts of this case are significantly different from the facts of Smith. In Smith, the trial court found that the settlement proceeds were divided as they were for the sole purpose of defeating the rights of the plaintiff’s insured. In the case at bar, the trial court pronounced that it believed that the insurance adjuster had considered Michelle’s medical bills only as an indication of the veracity and severity of her injuries and had not based her settlement offer on reimbursement for medical expenses. The trial court found no basis upon which to conclude that the settlement was intended solely to defeat the Plan’s rights. Because the trial court had an opportunity to observe the witness and determine her credibility, we will not disturb its decision on appeal. See Cosmopolitan National Bank v. County of Cook (1984), 103 Ill. 2d 302, 469 N.E.2d 183.

This is not to say that the Plan had no remedy in this case. Its cause of action, both under the common law and according to the language of the contract, was against Michelle’s parents. In fact, the contract allows the Plan to withhold payments until the employee has signed all documents to facilitate the enforcement of the Plan’s rights. Clearly, this provision contemplates an assignment of rights by the parents to the Plan. Thus, the Plan could have intervened on its own behalf and negotiated a settlement directly with the drivers’ insurers. It chose not to do so, however, and now cannot assert a right against Michelle’s recovery.

For the foregoing reasons, we hold that the Plan’s lien was invalid as against any recovery made by the minor plaintiff’s estate and, thus, the judgment of the circuit court of Grundy County is affirmed.

Affirmed.

LYTTON and SLATER, JJ., concur.


author: JUSTICE COOK

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. TERRY L. DAVIS, Defendant-Appellant.
    Fourth District
    No. 4 — 92—0369
    Argued February 17, 1993.
    Opinion filed August 12, 1993.

      Gregory L. Barnes (argued), of Gregory L. Barnes, Ltd., of Decatur, for appellant.

      Lawrence R. Fichter, State’s Attorney, of Decatur (Norbert J. Goetten, Robert J. Biderman, and Dale M. Wood (argued), all of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
   JUSTICE COOK

delivered the opinion of the court:

A jury found defendant Terry Davis guilty of unlawful delivery of a controlled substance within 1,000 feet of property owned by a public housing agency. (Ill. Rev. Stat. 1991, ch. 56½, par. 1407(b)(2).) The trial court sentenced defendant to eight years of imprisonment. Defendant appeals, alleging (1) the trial court improperly admitted evidence of other similar drug offenses allegedly involving him, (2) the “other offenses” jury instruction given was incorrect and plain error (see Illinois Pattern Jury Instructions, Criminal, No. 3.14 (2d ed. 1981) (hereinafter IPI Criminal 2d)), and (3) the trial court erred by sua sponte instructing the jury before opening arguments concerning its function. We affirm.

Both defendant, Terry Davis, and his uncle, Gregory Davis (hereinafter Gregory), were charged. Gregory pleaded guilty and was sentenced to the Department of Corrections (DOC). Prior to trial defendant filed a motion in limine requesting the trial court prohibit the State from introducing evidence of other unindicted drug-related offenses allegedly involving defendant. The trial court denied the motion and the jury trial commenced on March 18, 1992.

The testimony revealed defendant’s arrest on November 20 was the result of an undercover operation involving “marked” money. Sergeant Gary Rollings of the Illinois State Police testified he was assigned to Task Force 10, the Decatur narcotics task force. Rollings photocopied money to be used in a staged drug buy from suspects and gave the money to the undercover officers who would buy the cocaine.

Scott Swan, an investigator with the Champaign County sheriff’s department, was working undercover on November 20. He drove through the 500 block of East King Street and saw a group of four men. He spoke to one of the men, Gregory, about buying a “rock,” referring to crack cocaine. Gregory said he had powder cocaine, agreed to make a sale, and told Swan to drive around the block. Swan did so and, upon his return, purchased cocaine from Gregory. Swan spoke only to Gregory and dealt only with Gregory. Swan could not identify the other three men standing around when the deal was made. Vernon Frost, an inspector with the Illinois State Police, rode with Swan during the undercover operation and basically corroborated Swan’s testimony. Frost also could not identify the other three men.

Patrick McElroy (Patrick), a Decatur police officer surveilling the scene from a block away, testified he received a radio call that the “deal had gone down.” He arrived at 555 East King Street in less than three minutes and saw defendant standing in front of a van holding currency in his hand. Four other people were also standing near the van. Patrick took the money from defendant’s hand and was able to match the serial numbers on the money with the previously copied serial numbers. He then placed defendant under arrest. Decatur police officer Jerry Wagoner testified the officers seized $592 from defendant.

Richard McElroy, a member of the tactical unit in the Decatur police department, testified he set up surveillance on November 20 approximately 75 feet from 555 East King Street. He was able to identify defendant as one of several men standing around in the area. McElroy saw some of the men approach the undercover vehicle after it had circled the block, then saw them walk back to the sidewalk before McElroy was given the signal to move into the area.

Outside the presence of the jury the State made an offer of proof regarding prior' surveillance by Richard McElroy. The trial court admitted the evidence over defendant’s objection, but gave a limiting instruction, both before and after its presentation, stating the evidence was offered only to show defendant’s intent or knowledge. Richard McElroy testified he had surveyed the area of 555 East King Street on approximately 15 separate occasions before the transaction on November 20. McElroy saw defendant at this location 10 to 12 times during his surveillance and saw both defendant and Gregory there together six to eight times. On the occasions when defendant and Gregory were both present at 555 East King Street, McElroy observed their involvement in hand-to-hand exchanges with people who approached them. Defendant would typically sit on a bench in front of the property near a fire barrel. A person would walk up to the area and hand defendant something. The person would then walk over to where Gregory was standing on the opposite side of the fire barrel, Gregory would hand something to him, then the person would leave the area. McElroy saw an estimated 25 hand-to-hand transactions involving various individuals and both defendant and Gregory. At times McElroy was able to see money exchanged. He testified he could not remember all of the surveillance dates but thought he began surveillance in September. McElroy stated he made only four reports from the approximately 15 surveillances. McElroy stated he filed two reports on November 8 and reports on November 10 and 12. He admitted defendant’s name was not on the November 8 or 10 report, and recalled defendant being present on only three of those occasions. McElroy said reports were made on those dates because subjects leaving the area were subsequently stopped and arrested.

The trial judge also admitted the State’s evidence of two specific drug transactions on August 23 and October 1 involving defendant in the 500 block of East King Street. The judge again gave a limiting instruction that the evidence was only to be considered for the purpose of knowledge or intent of defendant. In the first transaction, Patrick McElroy testified he met with an informant, Rodney Brady, on August 23, 1991, about 1:30 p.m. Patrick gave Brady money for a controlled buy of cocaine from defendant. The jury was shown a videotape of the transaction between Brady and defendant taken by Decatur police officer Edward Root. Brady basically corroborated Patrick’s testimony.

The second transaction occurred on October 1, 1991, also around 1:30 p.m. with Brian Latham, special agent with the Illinois State Police, and paid informant Willie Stewart. Latham and Stewart were involved with a purchase of cocaine from defendant and an individual named Tony Kinney at the same area on East King Street. Latham testified at trial that “Mr. Davis [defendant] stated it would be straight dope we are going to receive and that his boy would be out of the house in a couple of minutes with the dope.” Stewart also spoke to defendant for approximately one to two minutes. Defendant said that Kinney would take care of Stewart. Kinney brought the cocaine and defendant directed Latham and Stewart to the parking lot for the transaction. Stewart then made a hand-to-hand purchase from Kinney. Defendant stood about 40 feet away. Patrick McElroy testified that he conducted surveillance of this transaction and made the videotape which was presented to the jury.

Defendant called as his first witness Shelley Creek, an employee from the Macon County circuit clerk’s office, who testified that a bond refund check for $400 had been issued to defendant on November 14, 1991, and cleared the circuit clerk’s account on November 20. Terry Theus then testified defendant gave him a ride to 555 East King Street on October 1, 1991, the day defendant allegedly was involved in the cocaine sale to Latham and Stewart. Theus identified himself in the surveillance videotape taken that day by Officer McElroy. Theus said he and defendant left the area 15 minutes later in a car. He never heard defendant say anything about drugs or saw defendant involved in any drug transactions. Jake Eubanks testified that on November 20 he was at 555 East King with Gregory, defendant, and others. They were shooting craps and drinking beer. He stated that Gregory left the craps game a couple of times to talk to a man down the street. Eubanks stopped playing when he saw two white men approaching. The men turned out to be police officers who subsequently arrested defendant.

Gregory testified that defendant is his nephew. Gregory stated that he did not work with defendant when selling drugs and that defendant had not been involved at all in the drug transactions. Gregory stated he bet the money he received from the November 20 drug sale in the craps game going on in the yard. Richard McElroy, called on rebuttal, testified he is familiar with the game of shooting craps and the subjects he had under surveillance did not appear to be playing craps.

On appeal, defendant argues the trial court denied him a fair trial in erroneously permitting evidence of other drug transactions allegedly involving him. Generally, evidence showing that a defendant committed prior bad acts is improper where its purpose is to demonstrate the defendant’s propensity to commit crime. (People v. Illgen (1991), 145 Ill. 2d 353, 364, 583 N.E.2d 515, 519; People v. McKibbins (1983), 96 Ill. 2d 176, 182, 449 N.E.2d 821, 824.) This evidence is commonly referred to as “other offenses” evidence or “extrinsic acts” evidence; it includes not just acts which constitute criminal offenses but any bad or wrongful acts. (M. Graham, Cleary & Graham’s Handbook of Illinois Evidence §404.5, at 190 (5th ed. 1990); see Fed. R. Evid. 404(b).) Evidence of other offenses is admissible if it is relevant to establish any material question other than to show propensity to commit crime. (McKibbins, 96 Ill. 2d at 182, 449 N.E.2d at 824; People v. Stewart (1984), 105 Ill. 2d 22, 62, 473 N.E.2d 840, 860.) Erroneous admission of other offenses evidence carries a high risk of prejudice and generally calls for reversal. (People v. Mason (1991), 219 Ill. App. 3d 76, 80, 578 N.E.2d 1351, 1354; People v. Lindgren (1980), 79 Ill. 2d 129, 140, 402 N.E.2d 238, 244; cf. People v. Easley (1992), 148 Ill. 2d 281, 324, 592 N.E.2d 1036, 1055 (improperly admitted evidence of defendant’s gang membership did not amount to substantial prejudice).) Before admitting evidence of other offenses the trial court must balance its probative value against any prejudicial effect. (People v. Vazquez (1989), 180 Ill. App. 3d 270, 277, 535 N.E.2d 981, 985.) A trial court’s decision concerning admission of evidence of prior offenses rests in the court’s discretion and will not be disturbed absent an abuse of that discretion. (Vazquez, 180 Ill. App. 3d at 278-79, 535 N.E.2d at 986-87.) Such an abuse of discretion will be found only where the trial court’s decision is arbitrary, capricious, or unreasonable or where no reasonable person would take the view of the trial court. Illgen, 145 Ill. 2d at 364, 583 N.E.2d at 519.

An important element of the State’s case was proof that defendant took part in the sale of cocaine, despite the fact he did not personally handle the sale or touch the drugs. Defense counsel indicated in his opening statement the evidence would show Gregory acted alone and defendant had nothing to do with the drug deál. The evidence of defendant’s sales to Brady on August 23 and to Stewart on October 1 was relevant to refute defendant’s claims; the trial court did not abuse its discretion in admitting that evidence. Other crimes evidence may not be used to show intent or motive when intent or motive is not an issue in the case. Although a defendant cannot foreclose the prosecution from producing evidence of intent or motive through other crimes evidence simply by not presenting evidence or argument regarding intent or motive, the trial court may consider whether the defendant is making an issue of intent or motive when deciding whether to admit other crimes evidence. The court may do so because it must balance the probative value of such evidence against its prejudicial effect. Here, for instance, defense counsel’s assertions that Gregory acted alone and that defendant had nothing to do with drug sales made it easier for the trial court to exercise its discretion and rule that the other crimes evidence was admissible.

Defendant argues that the various transactions were different: that he is alleged to have negotiated the sales on August 23, October 1, and the 25 other occasions but not on November 20; that he or someone other than Gregory is alleged to have delivered the drugs on August 23 and October 1 but not on November 20; and that defendant is alleged to have received the purchase money on August 23 and the 25 occasions, but not on November 20. With all these incidents, however, defendant was always the one who ended up with the money. In contrast to modus operandi testimony, if evidence of a defendant’s involvement in another offense is offered to prove absence of an innocent frame of mind or the presence of criminal intent, mere general areas of similarity will suffice. Illgen, 145 Ill. 2d at 373, 583 N.E.2d at 523.

Richard McElroy’s testimony of 15 prior surveillances where he observed perhaps 25 hand-to-hand exchanges involving various individuals and both defendant and Gregory is more, difficult. Although money sometimes changed hands, there was no positive evidence that defendant or anyone else actually sold drugs on any of these occasions, and it is possible that drugs were not sold.

Although the prosecution in a criminal case must prove every element of the offense beyond a reasonable doubt (People v. Tye (1990), 141 Ill. 2d 1, 15, 565 N.E.2d 931, 938, cert. denied (1991), 502 U.S. 833, 116 L. Ed. 2d 81, 112 S. Ct. 112), that is not true for each item of evidence which the prosecution seeks to introduce. (People v. Williams (1982), 93 Ill. 2d 309, 322-23, 444 N.E.2d 136, 142.) To be admissible evidence need only be relevant, that is, have a tendency to make the existence of any fact of consequence more probable or less probable than it would be without the evidence. (People v. Monroe (1977), 66 Ill. 2d 317, 321-22, 362 N.E.2d 295, 296-97 (adopting Federal Rule 401 (Fed. R. Evid. 401).) The use of circumstantial evidence is not limited to'those instances in which the circumstances support only one logical conclusion. Circumstantial evidence will suffice whenever an appropriate inference may reasonably be drawn therefrom. Mort v. Walter (1983), 98 Ill. 2d 391, 396, 457 N.E.2d 18, 21.

With some items of evidence, however, a stricter foundation requirement is imposed, because of that evidence’s potential for unfair prejudice. Extrinsic acts evidence is admissible if it is relevant for any purpose other than to show propensity to commit a crime. However, before extrinsic acts evidence is admitted the State must first show that the acts in question occurred and that the defendant performed them or participated in their performance. Proof that the defendant performed the acts or participated in their performance need not be beyond a reasonable doubt but must be more than a mere suspicion. (People v. Thingvold (1991), 145 Ill. 2d 441, 456, 584 N.E.2d 89, 95; People v. Lindgren (1980), 79 Ill. 2d 129, 140, 402 N.E.2d 238, 244 (other crimes evidence cannot be admitted if the grounds for establishing its relevance are speculative).) Other jurisdictions have employed different standards of proof. “The measure of proof that the defendant is guilty of the other crime has been variously described, ranging from ‘sufficient *** to support a finding by the jury,’ to ‘a preponderance,’ to ‘substantial,’ to ‘clear and convincing.’ ” (1 J. Strong, McCormick on Evidence §190, at 809 (4th ed. 1992).) The current practice of the Federal courts is discussed in Huddleston v. United States (1988), 485 U.S. 681, 99 L. Ed. 2d 771, 108 S. Ct. 1496. There the Supreme Court rejected the argument that before extrinsic acts evidence could be admitted a preliminary finding by the court was required under Federal Rule 104(a) (Fed. R. Evid. 104(a)), a finding that the government had proved the act by a preponderance of the evidence.

In Huddleston defendant was charged with selling a large number of stolen blank tapes in April 1985. Defendant denied knowing the tapes were stolen. The government was allowed to introduce evidence that in February 1985 defendant sold 38 new 12-inch black and white televisions for $28 apiece, and in May 1985 defendant sold stolen appliances to an undercover agent. The only direct evidence the televisions had been stolen was their low price, the large quantity sold, and defendant’s inability to produce a bill of sale. The Supreme Court affirmed the admission of the evidence regarding the televisions (no objection was made regarding the appliances), but continued:

“This is not to say, however, that the Government may parade past the jury a litany of potentially prejudicial similar acts that have been established or connected to the defendant only by unsubstantiated innuendo. Evidence is admissible under Rule 404(b) only if it is relevant. *** In the Rule 404(b) context, similar act evidence is relevant only if the jury can reasonably conclude that the act occurred and that the defendant was the actor. See United States v. Beechum, 582 F. 2d 898, 912-913 (CA5 1978) (en banc). In the instant case, the evidence that petitioner was selling the televisions was relevant under the Government’s theory only if the jury could reasonably find that the televisions were stolen.” Huddleston, 485 U.S. at 689, 99 L. Ed. 2d at 782, 108 S. Ct. at 1501.

In People v. Smith (1990), 141 Ill. 2d 40, 565 N.E.2d 900, an assistant warden at Pontiac was killed outside a tavern in Chicago. The prosecution presented evidence of motive: the warden was opposed to gang activity and had physically subdued a gang leader while the leader was in prison, defendant was a member of the gang, and the gang leader had spoken to one of defendant’s companions just before the murder. The supreme court held that evidence of gang membership is admissible to show motive, but only where there is sufficient proof that such membership is related to the crime charged. The court held the evidence in Smith insufficient to show defendant was an active member of the gang or acting at the direction of the gang leader, even though defendant had been seen in the leader’s apartment, the gang was influential in the tavern neighborhood, and defendant was talking with the gang leader at the time of defendant’s arrest. (See also Easley, 148 Ill. 2d 281, 592 N.E.2d 1036; People v. Lucas (1992), 151 Ill. 2d 461, 486, 603 N.E.2d 460, 471.) In Thingvold a husband was charged with soliciting George Nalan to murder his wife, who was stabbed to death on March 10, 1987, by an unknown assailant. The supreme court ruled testimony was properly admitted that the husband had discussed killing his wife, by stabbing her, with Sidney Haffendon between 1980 and 1986, and with James Wagaman. The court, however, excluded evidence the wife was previously-stabbed numerous times by an unknown assailant on April 26, 1986, saying the testimonies of Haffendon and Wagaman were “not enough to raise defendant’s participation in the attack beyond a mere suspicion.” (Thingvold, 145 Ill. 2d at 456, 584 N.E.2d at 95.) Chief Justice Miller, dissenting, would have admitted evidence of the April 26 stabbing because the fact the wife was attacked in a manner suggested by the husband “raises more than a mere suspicion that the defendant was accountable for that offense.” (Thingvold, 145 Ill. 2d at 466, 584 N.E.2d at 100 (Miller, C.J., dissenting).) Justice Miller also dissented in Smith.

There was no direct evidence that on the 25 occasions testified to by Richard McElroy defendant and Gregory were selling drugs. The direct evidence was that on those occasions someone would hand defendant something (sometimes McElroy was able to see money exchanged), and then walk over to Gregory and receive something from him. As the court said in Huddleston, however, the jury was required to consider not just this direct evidence, but also defendant’s involvement in the other transactions: the transaction charged, the August 23 incident, and the October 1 incident. “Given this evidence, the jury reasonably could have concluded that [drugs were being sold on the 25 occasions], and the trial court therefore properly allowed the evidence to go to the jury.” (Huddleston, 485 U.S. at 691, 99 L. Ed. 2d at 783, 108 S. Ct. at 1502.) There was more than a suspicion that drugs were being sold on the 25 occasions. (See Thingvold, 145 Ill. 2d at 456, 584 N.E.2d at 95.) The strength of the evidence establishing the similar act is, of course, one of the factors the court may consider in determining whether the prejudicial potential of the evidence substantially outweighs its probative value. (Huddleston, 485 U.S. at 689 n.6, 99 L. Ed. 2d at 782 n.6, 108 S. Ct. at 1501 n.6.) The evidence was sufficient to meet the foundation test for admission, and we cannot say the trial court abused its discretion in balancing the evidence’s potential benefit against its potential harm.

We need not address the possibility that if something other.than drugs were being innocently sold the evidence would still be admissible because it showed the connection between defendant and Gregory. It is difficult to imagine, however, why such a procedure would be employed for lawful sales. Cf. People v. Johnson (1986), 143 Ill. App. 3d 122, 491 N.E.2d 918 (defendant picked up package at Federal Express containing cocaine; evidence admitted that on three prior occasions he picked up packages of the same weight at the same office from the same sender, with no evidence of the contents of those packages).

Defendant contends the State’s jury instruction as to proof of other offenses, which was given by the trial court; was incorrect and plain error. (See Illinois Pattern Jury Instructions, Criminal, No. 3.14 (2d ed. 1981) (hereinafter IPI Criminal 2d).) The jury was given the following instruction:

“Evidence has been received that the defendant has been involved in offenses other than that charged in the information. This evidence has been received solely on the issue of defendant’s intent, knowledge, common plan or system of operation. This evidence may be considered by you only for the limited purpose for which it was received.” (Emphasis added.)

(See IPI Criminal 2d No. 3.14.) Earlier, before and after admission of the other offenses evidence, the court instructed the jury that such evidence was only to be considered on the issue of defendant’s “intent or knowledge.” Defendant objected to the instruction at the jury instruction conference and requested that the court limit the language to intent or knowledge. Defendant contends the court erred by “expanding” the written jury instruction under IPI Criminal 2d No. 3.14 to also include “common plan or system of operation.”

The trial court must take care to state the proper limited purpose for other crimes evidence. (See, e.g., People v. King (1988), 165 Ill. App. 3d 464, 469, 518 N.E.2d 1309, 1313.) We find that the judge erred in including “common plan or system of operation” in the written instruction. The evidence of drug transactions here did not amount to a common plan or system of operation as it did not show a larger criminal scheme of which the crime charged was only a portion. (People v. Rooney (1934), 355 Ill. 613, 190 N.E. 85 (extortion plan leading to murder); People v. Rodriguez (1982), 107 Ill. App. 3d 43, 437 N.E.2d 441 (other forged checks stolen in same burglary); People v. Willis (1983), 119 Ill. App. 3d 34, 456 N.E.2d 165 (two crimes committed to obtain gasoline for trip to Oklahoma).) The offenses were similar but were not closely connected in time and place, nor was one committed in preparation for the other. The evidence was clearly admissible, however, and although the reference to common design and system of operation may have been confusing, we cannot see how it prejudiced defendant. See People v. Leaks (1989), 179 Ill. App. 3d 231, 241, 534 N.E.2d 491, 497.

Defendant’s last argument is that the trial judge erred by making sua sponte comments to the jury, concerning its function, before opening statements. Defendant specifically complains of the judge’s reference to questions asked by defense counsel during jury selection:

“Now, before we start off with opening statements, I would like to make just a couple of comments to the jurors. Mr. Barnes (defense counsel), when he was asking questions, he said you know some of the witnesses might testify to A and some of the witnesses might testify to B. A couple of years ago, we had a note come back from the jury, and the note basically said, [‘]Judge, these people testified to A; these people testified B. There seems to be some conflict in the testimony.[’] That’s what your function is. You were selected by the attorneys to listen to the evidence in the case and decide what you feel the facts are, and Mr. Barnes has indicated that there might be a difference in testimony. You, as jurors, will weigh the believability of a witness. You can believe everything a witness says, and you can believe part of what a witness says, or you can believe nothing of what a witness says, but we do want you to listen carefully.”

Defendant contends such comments drew attention to defense counsel’s questions and had the effect of criticizing the defendant or the nature of defense counsel’s inquiry. It is appropriate for a trial court to give informal instructions at an early stage of the proceedings as to the functions of the court and jury. Such instructions may assist jurors in understanding and evaluating the evidence which will be presented to them. Of course the informal instructions should be impartial and not slanted toward one side or the other. An informal instruction which substantially employed the language set out in IPI Criminal 2d Nos. 1.01 through 1.04 would be appropriate. In the present case, although the trial court’s remarks could have been improved upon, it is difficult to see how these comments prejudiced defendant or drew unfavorable attention to defense counsel. The trial judge was simply using defense counsel’s questions as an example to show conflicting testimony would be presented and that it was the jury’s responsibility to decide the truth.

Affirmed.

STEIGMANN, P.J., and KNECHT, J., concur.