author: JUSTICE LINN

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. IOANNIS TSOMBANIDIS, Defendant-Appellant.
    First District (4th Division)
    No. 1—90—3602
    Opinion filed September 17, 1992.

      George P. Lynch, of Chicago, for appellant.
    Jack O’Malley, State’s Attorney, of Chicago (Renee Goldfarb, Donald T. Lyman, and Cory J. Pollack, Assistant State’s Attorneys, of counsel), for the People.
   JUSTICE LINN

delivered the opinion of the court:

Defendant, Ioannis Tsombanidis, was convicted of delivery of more than 30 grams of a controlled substance (Ill. Rev. Stat. 1985, ch. 56½, par. 1401(a)(2)) following a jury trial in the circuit court of Cook County. Defendant was sentenced to the penitentiary for a term of seven years.

Defendant appeals, contending the trial court erred: (1) by denying his motion to dismiss the information, and (2) in making certain evidentiary rulings..Defendant also contends: (3) the prosecutor made improper and prejudicial remarks throughout the trial, and (4) the trial court erred in refusing to give a tendered jury instruction.

We affirm the judgment of the trial court.

Background

The record contains the following pertinent facts. On November 15, 1988, defendant was charged by information with one count of delivery of a controlled substance.

A

On May 2, 1989, defendant filed a motion that sought an order requiring the State to produce two informants who were at the scene of the crime. On September 4, 1990, the trial court held a hearing on the motion. The testimony presented therein was essentially as follows.

Anthony Greco, Jr., was a special agent in the United States Drug Enforcement Agency (DEA). Maurice Williams, also known as Victor Harris, was a suspect in a narcotics investigation. On January 23, 1987, Williams telephoned Agent Greco. Another person was with Williams during the telephone conversation who, unbeknownst to Williams, was a police informant. Williams also did not know that Greco was a drug enforcement agent. Williams notified Greco that the informant negotiated a drug transaction on Greco’s behalf. After Williams spoke with Agent Greco, the informant spoke briefly with Greco to confirm the quantity and purchase price. The three agreed to meet later that day.

At approximately 1:30 p.m., Agent Greco met Williams and the informant outside of the Shish Kabob Restaurant near Diversey Parkway and Broadway in Chicago. Greco instructed the informant to wait outside, while Greco and Williams entered the restaurant. Williams introduced Agent Greco to defendant. With Williams present, Agent Greco agreed to buy two ounces of cocaine from defendant for $3,400.

Defendant told Agent Greco that they would leave the restaurant to go to a nearby house to obtain the narcotic. Greco went outside briefly, related the plan to the informant, and instructed him to tell surveillance agents that Greco would be leaving the vicinity. Greco returned to the restaurant and exited through the back door. The informant remained outside in front of the restaurant.

Agent Greco, Williams, defendant, and a fourth unknown person entered a red Ford automobile. Defendant drove them to the area of Diversey Parkway and Halsted Street. Defendant told Agent Greco that he would return with the cocaine. Defendant left the car, returned with the cocaine, and gave it to Agent Greco, who gave defendant $3,400.

They returned to the area of the Shish Kabob Restaurant. Agent Greco left the car and went to a nearby restaurant, where he recounted the details of the drug transaction to surveillance agents.

A few minutes later, Agent Greco left the surveillance agents and met Williams and the informant. They went to another nearby restaurant. Williams asked Greco for some of the cocaine that he bought from defendant. Greco refused and left the restaurant. Greco subsequently field-tested his purchase from defendant. The test indicated the presence of cocaine.

Steven Traub was a special agent in the DEA. On January 23, 1987, he was a member of the four-person surveillance team that was assigned to the anticipated narcotics purchase. At approximately 1:30 p.m. on that day, Agent Traub observed Agent Greco meeting with Williams and the informant in front of the Shish Kabob Restaurant. Agent Traub could not park his automobile due to traffic in the area. Rather, he was forced to cruise in the area. Traub’s observations of the Shish Kabob Restaurant essentially corroborated Agent Greco’s testimony.

As a result of defendant’s prosecution, the State’s Attorney’s office asked Agent Traub to locate the informant. Traub and his partner contacted several persons who knew the informant and questioned managers at several residences where he had lived. However, the agents were unable to locate him. Agent Traub had information that placed the informant in Puerto Rico; however, Traub did not contact law enforcement officials or anyone else there. Traub searched for information pertaining to the informant through his agency’s computerized criminal files; however, Traub did not seek information from several Federal, State, and local government agencies.

The trial court found that the informant’s testimony would be relevant and material. The court ordered that the informant be produced or identified. The trial court also found that the State had not yet exercised due diligence in attempting to locate the informant. (See People v. Holmes (1990), 135 Ill. 2d 198, 510 N.E.2d 1139.) However, the court refused to dismiss the indictment. The State provided defendant with the informant’s name, last known address, and criminal history.

B

On September 10, 1990, the trial court held a pretrial hearing to ascertain the progress made on locating the informant. Also on that day, defendant filed a motion that sought an order requiring the State to provide defendant with the drug evidence against him, or a sample thereof, for testing. In the alternative, defendant sought: (1) an order in limine precluding any testimony relating to the identification or weight of the substance, or (2) the dismissal of the information. At the hearing, the State admitted that the DEA destroyed the drug evidence. The prosecutor represented to the court that the destruction of the drug evidence was inadvertent and not done in bad faith.

The next day, a hearing was held on defendant’s motion. The State was given an opportunity to show that the drug evidence was inadvertently destroyed and not in bad faith. Without repeating the evidence presented at the prior hearing, the testimony was essentially as follows.

In January 1987, Agent Greco opened an investigative file on Maurice Williams. On January 14, 1987, Greco bought cocaine from Williams. Greco placed the drug evidence and resulting reports of the transaction in the Williams file.

On January 23, Agent Greco bought two ounces of cocaine from defendant for $3,400. According to then-existing DEA procedures, when • suspect A, who was the cause of an investigation, leads an agent to suspect B, the file initially opened for suspect A is also used for information developed from suspect B. Agent Greco met defendant through Williams. Thus, Greco placed the drug evidence against defendant into the Williams file. Although both drug purchases were in the same file, each purchase was accompanied by a separate inventory slip and investigative reports.

In May 1988, an assistant State’s Attorney notified DEA Agent Charles Banks that Maurice Williams, also known as Victor Harris, had been prosecuted. After consulting the DEA manual, Agent Banks telephoned the assistant State’s Attorney. The prosecutor informed Banks that Williams had pled guilty and that the agency could destroy the drug evidence relating to his case.

On July 8, 1988, Agent Banks completed the requisite form (DEA Form 48) for the destruction of the drug evidence in the Williams file. Banks did not read the Williams file; he did not know that the file contained drug evidence that related to defendant. On October 5, 1988, the drug evidence against Williams, as well as that against defendant, was destroyed.

At the close of the hearing, the trial court denied the motion. The court described the actions of the DEA as “negligent” and “very-sloppy.” However, the court found that the drug evidence against defendant was destroyed inadvertently; the evidence was not destroyed “for any ulterior reason,” or in bad faith. The court ruled that the destruction of the drug evidence goes to the weight of the evidence and, therefore, is a question of fact for the fact finder. The court also ruled that the motion was not timely. The court granted defendant a 60-day continuance so that he could locate the informant.

On November 13, 1990, immediately prior to trial, defendant renewed his motion to dismiss the information based on the State’s failure to produce the informant or the destruction of the drug evidence in his case. The trial court denied the motion.

C

At trial, the State’s evidence was essentially as follows. Agents Greco and Traub repeated their testimony at the two pretrial hearings. Agent Greco further testified, in greater detail, what he did with the cocaine that he bought from defendant. In the regular course of office practice, Agent Greco completed DEA Form 7, which was admitted into evidence. The completed form gave a description of the drug evidence and the results of Agent Greco’s field-test. The form showed that the substance that defendant sold to Greco was 79% pure cocaine. Greco opined that the substance would have a street value of between $10,000 and $20,000. Greco sealed and labelled the original plastic bag containing the cocaine. He then placed the plastic bag inside a larger envelope, which he likewise sealed and labeled. Greco personally delivered the substance and the form to the agency’s north central laboratory for analysis and storage.

George Yamnitzky was a supervisory chemist at the DEA north central laboratory. On January 28, 1987, he personally gave the drug evidence to DEA chemist Deborah Edick for analysis. Edick observed that the seals on the evidence envelope were intact. The analysis determined as follows: the weight of the substance, in addition to its original plastic bag and the DEA evidence envelope, was 79.8 grams; the weight of the substance in its original plastic bag was 57.43 grams; and the weight of the substance itself was 55.62 grams. The substance was 79% pure cocaine. After her analysis, Edick personally returned the drug evidence to the laboratory vault.

Defendant was not arrested on January 23, 1987, because he was part of a continuing investigation. In August 1987, Agent Greco obtained an arrest warrant for defendant and placed it in the Maurice Williams file. In September 1987, Special Agent Allen Doescher was assigned to the Williams file. In reviewing the file, Agent Doescher discovered the arrest warrant for defendant. On August 17, 1988, Agent Doescher arrested defendant.

Agent Charles Banks repeated his prior testimony, in which he explained his inadvertent authorization of the destruction of the drug evidence in defendant’s case. On October 5, 1988, Yamnitzky witnessed the incineration of the drug evidence. He recorded the event, in the regular course of office practice, in DEA Form 48, which was admitted into evidence.

Defendant was the sole witness for the defense. His testimony was essentially as follows. Defendant ate regularly at the Shish Kabob Restaurant. He knew the restaurant’s owner and several restaurant employees. On January 23, 1987, the restaurant’s cook asked defendant to give the cook a ride in defendant’s car. Defendant complied. The cook was accompanied by two men whom defendant did not know. Defendant drove his red Ford Escort in the neighborhood of the restaurant, following the directions of the others.

After driving for a brief time, the men directed defendant to park the car. Two of the men exited the car and walked away. They returned to the car approximately five minutes later. Defendant drove back to the restaurant. Defendant did not know that a drug transaction had occurred and was not involved in the crime.

At the close of the trial, the jury convicted defendant as charged. At the sentencing hearing, the trial judge denied defendant’s post-trial motion. At the close of the hearing, the trial judge sentenced defendant to a prison term of seven years. Defendant appeals.

Opinion

I

Defendant claims that the trial court erred by denying his motion to dismiss the information, based on: (A) the State’s failure to produce the informant, or (B) the destruction of the drug evidence in his case.

A

Defendant contends the trial court should have dismissed the information because the State failed to produce the informant who introduced Agent Greco to defendant. For an indictment or information to be dismissed due to the unavailability of a government informant, “a defendant must first establish that the informant’s testimony would be relevant and material.” (People v. Holmes (1990), 135 Ill. 2d 198, 201, 552 N.E.2d 763, 766, citing People v. Stumpe (1979), 80 Ill. App. 3d 158, 163, 399 N.E.2d 292, 297.) Second, if that is established, the State must identify and produce the informant for trial, or show that it has made a reasonable good-faith effort to locate the witness. (Holmes, 135 Ill. 2d at 212-13, 552 N.E.2d at 771.) Third, if the State meets its burden, the indictment or information can be dismissed only if the defendant can prove “by clear and convincing evidence that the unavailable informant’s testimony would raise a reasonable doubt as to the State’s case.” Holmes, 135 Ill. 2d at 214, 552 N.E.2d at 772.

After carefully reviewing the record, we conclude that defendant failed to satisfy the third prong of the Stumpe test, as explained in Holmes. The State’s case was simply that defendant sold cocaine to Agent Greco in defendant’s automobile. Defendant testified that two of the three men to whom he gave a ride left the car and made a sale. However, the informant did not accompany them and, thus, did not witness the transaction. Further, the record does not contain any evidence that defendant even told the informant what occurred during the ride. We find that defendant has failed to make a clear and convincing showing that the informant’s testimony would raise a reasonable doubt as to the State’s case. We hold that the trial court properly denied defendant’s motion to dismiss the information on this ground.

B

Defendant contends the trial court should have dismissed the information also because the State destroyed the drug evidence in his case. Defendant bases this contention on two decisions of this court: People v. Taylor (1977), 54 Ill. App. 3d 454, 369 N.E.2d 573, and People v. Dodsworth (1978), 60 Ill. App. 3d 207, 376 N.E.2d 449.

In Taylor, the court held that the State “has a duty to preserve some part of the substance so that an independent chemical analysis may be made by the putative law violator in the event criminal prosecution is later instituted.” (Taylor, 54 Ill. App. 3d at 457, 369 N.E.2d at 575.) The Taylor court went on to hold as follows:

“But whenever an accused seeks by timely motion a sample of the allegedly controlled substance, so that it can be subjected to independent testing *** a heavy burden devolves upon the State either to produce a testable sample or to prove by clear and convincing evidence that the destruction of all of the substance in its possession was necessary. If it can do neither, then it should not, as a matter of fundamental fairness, be permitted to introduce into evidence the results of its tests.” 54 Ill. App. 3d at 457-58, 369 N.E.2d at 576.

The court in Dodsworth, relying on Taylor, held as follows:

“In any event, where as here, the State unnecessarily and presumably intentionally destroys the. alleged contraband without the defendant having opportunity for his own testing or the protection of court imposed safeguards to protect his rights, we agree with Taylor that the trial court commits reversible error in admitting evidence of the results of the State’s test.” Dodsworth, 60 Ill. App. 3d at 211, 376 N.E.2d at 452.

See People v. Ebener (1987), 161 Ill. App. 3d 232, 514 N.E.2d 205.

The court in Taylor reasoned that “inherent in the most narrow view of due process are the right to know of evidence and the opportunity to rebut it.” (Taylor, 54 Ill. App. 3d at 456, 369 N.E.2d at 575.) The court specifically noted that the State’s duty of preservation attached regardless of the good or bad faith of the State. (54 Ill. App. 3d at 457, 369 N.E.2d at 575-76.) However, subsequent to our decision in Taylor, the United States Supreme Court has concluded as follows:

“But we think the Due Process Clause requires a different result when we deal with the failure of the State to preserve evidentiary material of which no more can be said than that it could have been subjected to tests, the results of which might have exonerated the defendant. *** We therefore hold that unless a criminal defendant can show bad faith on the part of the police, failure to preserve potentially useful evidence does not constitute a denial of due process of law.” Arizona v. Youngblood (1988), 488 U.S. 51, 57-58, 102 L. Ed. 2d 281, 289, 109 S. Ct. 333, 337.

This court has applied the standard of Youngblood in several cases. (See, e.g., People v. Young (1991), 220 Ill. App. 3d 488, 581 N.E.2d 241; People v. Stallings (1991), 211 Ill. App. 3d 1032, 570 N.E.2d 820.) After comparing the reasoning and result in Youngblood with that in Taylor and its progeny, we hold that Youngblood has overruled Taylor and Dodsworth on this issue.

Applying the Youngblood standard to the present case, we conclude that defendant has failed to show a violation of his constitutional rights. The record amply supports the trial court’s findings that the actions of the DEA were “negligent” and “very sloppy.” However, the record does not contain any evidence of bad faith on the part of DEA personnel. Rather, the record shows that the evidence was destroyed as a result of an inadvertent decision injected into standard office procedure. We hold that the trial court properly denied defendant’s motion to dismiss the information on this ground.

II

Defendant claims that the trial court erred in admitting into evidence: (A) testimony relating to the drug evidence in general, and (B) two DEA reports in particular. We note at the outset that the admission of evidence is within the sound discretion of the trial court, and its ruling should not be reversed absent a showing that the trial court exceeded its discretion to the prejudice of the defendant. People v. Hermann (1988), 180 Ill. App. 3d 939, 944, 536 N.E.2d 706, 709; People v. Shiflet (1984), 125 Ill. App. 3d 161, 178, 465 N.E.2d 942, 953-54.

A

Defendant contends the trial court should have excluded testimony relating to the drug evidence because the State failed to establish a sufficient chain of custody. A chain of custody foundation is required when proffered evidence is not readily identifiable or is susceptible to alteration by tampering or contamination. The chain of custody must be of sufficient completeness to render it improbable that the item has been tampered with, exchanged, or contaminated. To establish a sufficient chain of custody, the State need not exclude every possibility of tampering. Rather, the State need only show that it took reasonably protective measures after the substance was seized, and that it was reasonably probable that the evidence was not changed in any important respect or substituted. Unless the defendant provides actual evidence of tampering or substitution, the State need only establish the stated probability and any deficiencies go to the weight and not the admissibility of the evidence. Hermann, 180 Ill. App. 3d at 944, 536 N.E.2d at 709; People v. Holman (1987), 157 Ill. App. 3d 764, 775, 510 N.E.2d 1139, 1146; Shiflet, 125 Ill. App. 3d at 178, 465 N.E.2d at 954.

Applying these principles to the case at bar, we conclude that the State established a sufficient chain of custody of the drug evidence. The record shows that Agent Greco personally field-tested the drug evidence and completed DEA Form 7. Greco sealed and labelled the original plastic bag that contained the cocaine. He then placed this bag inside of a larger envelope, which he likewise sealed and la-belled. These constituted reasonably protective measures. (See People v. Irpino (1984), 122 Ill. App. 3d 767, 775, 461 N.E.2d 999, 1005.) Further, Greco personally delivered the drug evidence to the DEA north central laboratory. DEA supervisory chemist Yamnitzky personally gave the evidence to DEA chemist Edick, who observed that the envelope was sealed.

Defendant argues that gaps exist in the chain of custody. Agent Greco testified that he did not personally maintain custody of the drug evidence from when he sealed and labelled the evidence to when he delivered the evidence to the DEA laboratory. Also, DEA chemist Edick testified that she was not sure exactly when she analyzed the evidence, but she must have placed the evidence in a locked box until she actually performed the tests. However, Edick testified that the box had a combination lock, of which only she knew the combination, and also that the evidence was sealed when she received it. “Where one link in the chain is missing but testimony describes the condition of the evidence when delivered which matches the description of the evidence when examined, the evidence suffices to establish a continuous chain of custody.” Irpino, 122 Ill. App. 3d at 775, 461 N.E.2d at 1005.

Defendant additionally argues that the testimony relating to the drug evidence contains variations as to the weight of the substance. However, as we stated earlier, the drug evidence was weighed: in its original plastic bag with the DEA evidence envelope, in its original plastic bag, and by itself.

Since the State established a sufficient chain of custody of the drug evidence, the results of the chemist’s analysis were admissible. (People v. Anthony (1963), 28 Ill. 2d 65, 69, 190 N.E.2d 837, 839; People v. Norman (1962), 24 Ill. 2d 403, 407, 182 N.E.2d 188, 190.) We cannot say that the trial court exceeded its discretion in admitting testimony relating to the drug evidence.

B

Defendant next contends the trial court should have excluded specifically DEA Form 7, which contained the chemical analysis of the drug evidence, and DEA Form 48, which authorized the destruction of the drug evidence. Defendant argues that the forms were police reports and, therefore, hearsay.

Hearsay is testimony in court or written evidence of an out-of-court statement, offered to establish the truth of the matter asserted and, thus, resting for its value upon the credibility of the out-of-court asserter. (People v. Carpenter (1963), 28 Ill. 2d 116, 121, 190 N.E.2d 738, 741.) The fundamental purpose of the hearsay rule is to test the real value of testimony by exposing the source of the assertion to cross-examination. Hearsay is excluded because of the absence of this essential test for ascertaining trustworthiness. Carpenter, 28 Ill. 2d at 121, 190 N.E.2d at 741; M. Graham, Cleary & Graham’s Handbook of Illinois Evidence §801.1, at 566-67 (5th ed. 1990) (hereinafter Graham).

However, there are exceptions to the rule against hearsay, in which hearsay testimony is admissible. These exceptions possess “requirements considered to be sufficient guarantees of trustworthiness to justify introduction.” (Graham, §803.1, at 621.) One such hearsay exception allows the admission of the records of the regularly conducted activities of any business, profession, or occupation. Ill. Rev. Stat. 1985, ch. 38, par. 115 — 5(a).

The business records exception to the rule against hearsay is premised on the recognition that records of an act, occurrence, or event that are routinely made at the time of the occurrence, or within a reasonable time thereafter, are normally sufficiently reliable to be admissible in evidence despite their hearsay character. The credibility of a business record depends on the regular, prompt, and systematic nature of the entry and the fact that it is relied on in the operation of the business. (People ex rel. Schacht v. Main Insurance Co. (1983), 114 Ill. App. 3d 334, 344, 448 N.E.2d 950, 957.) Since the purpose of business records “is to aid in the proper transaction of business and they are useless for that purpose unless accurate, motive for following a routine of accuracy is great and the motive for falsifying nonexistent.” (People v. Reed (1982), 108 Ill. App. 3d 984, 989, 439 N.E.2d 1277, 1281.) The foundation required for admission under the business records exception is that (1) the writing or record was made as a memorandum or record of the act, transaction, occurrence, or event; (2) it was made in the regular course of business; and (3) it was the regular course of such business to make such a record at the time of the transaction or within a reasonable time thereafter. Ill. Rev. Stat. 1985, ch. 38, par. 115 — 5(a).

Since the rationale of the business records exception is the probability of trustworthiness, records prepared for litigation, or during an investigation of an alleged offense, are not normally admissible, even if it is part of the regular course of business to make such records. This includes police reports. Ill. Rev. Stat. 1985, ch. 38, par. 115— 5(c)(2); Schacht, 114 Ill. App. 3d at 344, 448 N.E.2d at 957; Graham §803.13, at 665.

Applying these principles to the present case, we conclude that DEA Forms 7 and 48 were admissible under the business records exception to the rule against hearsay. DEA Form 7 contained the report of the chemical analysis performed by DEA chemist Edick. We agree with the District of Columbia Court of Appeals that DEA chemical analysis reports are sufficiently trustworthy and have sufficient indicia of reliability to fall within the exception.

In Howard v. United States (D.C. App. 1984), 473 A.2d 835, the court reasoned that DEA chemists determine the identity of a controlled substance by a well-recognized chemical procedure. Thus, their reports contain objective facts rather than expressions of opinion. The court also reasoned that DEA chemists conduct their analyses routinely and generally do not have an interest in the outcome of trials. The court found that “as employees and scientists, they are under a duty to make accurate reports.” The cpurt found: “It is difficult to perceive any motive or opportunity for the chemists to falsify.” Howard, 473 A.2d at 839.

We hold that DEA Form 7 was admissible under the business records exception to the rule against hearsay. In so holding, “we are in agreement with most state and federal courts that have addressed this or similar issues.” Howard, 473 F.2d at 839-40 (and cases cited therein); see United States v. Baker (8th Cir. 1988), 855 F.2d 1353, 1359-60.

DEA Form 48 authorized the destruction of the drug evidence. Agent Banks testified that he completed the form pursuant to regular office practice. The nature of the form was clearly administrative; it was not prepared “during an investigation of an alleged offense or during an investigation relating to pending or anticipated litigation.” (Ill. Rev. Stat. 1985, ch. 38, par. 115 — 5(c)(2).) Indeed, Agent Banks completed the form because the litigation had concluded as to Maurice Williams by way of his conviction. We hold that DEA Form 48 was admissible under the business records exception to the rule against hearsay.

We note defendant’s claim that he was prejudiced by the admission of DEA Form 48. Defendant contends that the form constitutes evidence of unrelated criminal conduct, which the prosecutor successfully placed before the jury. Defendant notes that the form records the destruction of two samples of cocaine, the sample that relates to his case and the sample that relates to the case of Maurice Williams. Defendant posits that the prosecutor essentially accused him of delivering the additional sample.

This argument completely lacks merit. We have previously recounted the ample testimony explaining the circumstances surrounding DEA Form 48. We do not need to repeat them here. Defendant has failed to show how he was prejudiced by the admission of DEA Form 48. We cannot say that the trial court exceeded its discretion in admitting into evidence DEA Forms 7 and 48.

Ill

Defendant next claims that he did not receive a fair trial because the prosecutor made several improper and prejudicial remarks throughout the trial.

A

Defendant assigns error to the prosecutor asking defendant whether he played cards or liked to play cards. Defendant contends the prosecutor attempted to place before the jury the idea that defendant was a “gambler.” Defendant equates this characterization with unrelated criminal conduct. Defendant posits that the prosecutor attempted to elicit this unrelated criminal conduct to show defendant’s propensity to commit crime.

However, defendant objected to this line of questioning and the trial court sustained the objection and subsequently instructed the jury to disregard the remarks. Thus, even assuming the prosecutor’s conduct constituted error, such error was cured. People v. Wilson (1972), 51 Ill. 2d 302, 308-09, 281 N.E.2d 626, 629; People v. Rowe (1983), 115 Ill. App. 3d 322, 327, 450 N.E.2d 804, 808, affd (1984), 103 Ill. 2d 192, 469 N.E.2d 569.

B

Defendant contends he was denied a fair trial also because the prosecutor made improper and prejudicial remarks during rebuttal closing argument. Continuing the “gambler” characterization, the prosecutor argued that defendant bet that the jury “would listen and buy his version of the truth. It’s a gamble. It’s a role of the dice. He is trying to role the dice in this courtroom.”

However, defendant failed to object to these allegedly improper remarks at trial. Thus, the issue is waived. (People v. Pastorino (1982), 91 Ill. 2d 178, 193, 435 N.E.2d 1144, 1151.) After reviewing the record, we further conclude that this issue does not warrant our consideration under the plain error doctrine of Supreme Court Rule 615(a). 134 Ill. 2d R. 615(a); see People v. Lucas (1981), 88 Ill. 2d 245, 250-51, 430 N.E.2d 1093-94.

IV

Defendant lastly claims that the trial court erred in refusing to submit to the jury two tendered instructions. A defendant, like the State, is entitled to the submission of appropriate jury instructions on the law that applies to his theory of defense if there was evidence introduced at trial in support of that theory. However, it is for the trial court to determine, after consideration of the facts and the governing law, whether the jury should be instructed on a particular subject. The trial court must further determine whether the Illinois Pattern Jury Instructions, Criminal (2d ed. 1981) (IPI Criminal 2d) contain an instruction which accurately states the law on that subject. If an appropriate IPI instruction exists, it must be used. 134 Ill. 2d R. 451(a); People v. Thomas (1988), 175 Ill. App. 3d 521, 528, 529 N.E.2d 1071, 1075.

However, the decision whether to give a non-IPI instruction rests with the sound discretion of the trial court. An abuse of discretion in the refusal of a non-IPI instruction occurs only where there is no IPI instruction that applies to the subject on which the jury should have been instructed. Conversely, a trial court does not exceed its discretion by refusing to give a non-IPI instruction if there is an applicable IPI instruction or the essence of the refused instruction is covered by other given instructions. Thomas, 175 Ill. App. 3d at 528, 529 N.E.2d at 1075.

A

The trial court refused to submit to the jury defense instruction number 2, which stated: “If two conclusions can reasonably be drawn from the evidence, one of innocence, and one of guilt the jury should adopt the one of innocence.” It is settled that “ ‘the trial court should instruct the jury to adopt the hypothesis as to the factual occurrence which favors the innocence of the defendant where opposing theories as to guilt or innocence can arise out of the same facts.’ ” (Emphasis added.) People v. House (1990), 197 Ill. App. 3d 1017, 1023, 557 N.E.2d 270, 274, quoting People v. DeHoyos (1975), 31 Ill. App. 3d 12, 20, 332 N.E.2d 643, 649.

In the present case, the opposing theories as to guilt or innocence did not arise out of the same facts. Rather, the testimony of Agent Greco and defendant was contradictory as to what occurred during the drug transaction. Agent Greco testified that defendant sold narcotics to Greco; defendant testified that he did not participate in any drug transaction. Our supreme court explained as follows:

“Such an instruction is proper only when the opposing theories arise out of the same facts. Where the defense is that the defendant did not participate in the alleged crime, it is proper to refuse such an instruction.” (People v. Rhodes (1969), 41 Ill. 2d 494, 499, 244 N.E.2d 145, 148.)

We cannot say that the trial court exceeded its discretion in refusing this instruction. See House, 197 Ill. App. 3d at 1023-24, 557 N.E.2d at 274 (and cases cited therein).

B

The trial court refused to submit to the jury defense instruction number 3, which stated: “Presence at the scene of a crime and knowledge that a crime is being committed are not sufficient to establish the defendant’s guilt.” Of course, this statement accurately reflects the law. Thomas, 175 Ill. App. 3d at 528, 529 N.E.2d at 1075-76; People v. Stamps (1982), 108 Ill. App. 3d 280, 297, 438 N.E.2d 1282, 1296.

Defendant was entitled to the submission of appropriate jury instructions on his theory of defense. However, defense instruction number 3 was not such a theory. “Rather than constituting a theory, the proposed instruction is little more than an assertion of innocence.” People v. Craig (1979), 79 Ill. App. 3d 584, 589, 399 N.E.2d 168,172.

The trial judge submitted to the jury instructions on the presumption of innocence, burden of proof, and quantum of proof (IPI Criminal 2d No. 2.03), together with an instruction on the necessary elements of the offense (IPI Criminal 2d No. 17.11). These instructions informed the jury that if the State proved beyond a reasonable doubt that defendant knowingly delivered the cocaine, then he was guilty of the offense. Conversely, the jury was also informed that if defendant did not knowingly deliver the narcotic, he was not guilty of the offense. Thus, the jury was fully aware that defendant’s mere presence was not sufficient to convict. See Stamps, 108 Ill. App. 3d at 298, 438 N.E.2d at 1297.

We conclude that the essence of the “mere presence” instruction was already encompassed by the IPI instructions. Thus, the denied non-IPI instruction was merely redundant. (See Thomas, 175 Ill. App. 3d at 528-29, 529 N.E.2d at 1076; Craig, 79 Ill. App. 3d at 589, 399 N.E.2d at 172.) We cannot say that the trial court exceeded its discretion in refusing this instruction.

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

Affirmed.

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


source: Caselaw Access Project

author: JUSTICE McNAMARA

license: Public Domain

text:
      In re MARRIAGE OF DOROTHY BRENNER, Petitioner and Counter-respondent-Appellee, and DONALD BRENNER, Respondent and Counter-petitioner-Appellant.
    First District (6th Division)
    No. 1—91—0170
    Opinion filed September 25, 1992.

      Beermann, Swerdlove, Woloshin, Barezky, Becker, Genin & London, of Chicago (Howard A. London, of counsel), for appellant.
    Mary Ellen Dienes, of Chicago, for appellee.
   JUSTICE McNAMARA

delivered the opinion of the court:

Donald and Dorothy Brenner were divorced on August 31, 1990. Among other distributions, the court awarded Dorothy the family home and $1,200 per month in permanent maintenance. Donald was awarded his 50% share in the stock of his company, Brenik, Inc. (Brenik), and the land on which the company is located. The court also ordered Donald to pay Dorothy $30,000 annually for 10 years for a total of $300,000, which constituted her 50% share in the company and land.

Donald poses three questions on appeal: (1) whether the court’s reliance on Dorothy’s expert witness’ valuation of the company stock was erroneous and reliance on it was an abuse of discretion, resulting in an inequitable property division; (2) whether the court committed reversible error in relying on Dorothy’s one-year-old valuation of Donald’s real estate at 925 W. Chicago Avenue in Chicago; and (3) whether the award of attorney and expert witness fees should be vacated and reconsidered on remand.

The parties were married in 1969 and had one child, Marcia, who was an adult at the time the marriage was dissolved. Dorothy filed for dissolution of marriage in 1986 and Donald filed a counterpetition in 1989. On August 31, 1990, after a contested trial, the judge awarded Dorothy the couple’s home in Evanston and $1,200 per month in permanent maintenance. The judge awarded Donald the couple’s 50% interest in Donald’s business, Brenik, and their 50% interest in the real estate at 925 W. Chicago Avenue, where Brenik is located. The court ordered Donald to pay Dorothy $300,000, payable in 10 annual installments of $30,000, which amounted to her half of the value of the business and real estate. The court also ordered Donald to pay Dorothy’s attorney and expert witness fees.

Donald disputes the valuation of the business and the real estate, which he contends resulted in the erroneous award of $300,000 to Dorothy. We find valuable a review of the expert testimony regarding both the valuation on Brenik and the valuation of the Chicago Avenue real estate.

Paul H. Wieland, a certified public accountant, testified as an expert witness on the valuation of the company for Dorothy. He explained that there are several methods available to value a company, and that he followed the American Institute of Certified Public Accountants’ “formula method” to determine the value of Brenik after deciding that it was the best method to use.

Applying the formula method, Wieland reviewed the company’s previous five years of sales, expenses, cost of sales, earnings before income taxes and officers’ compensation. Wieland testified that this information permitted him to determine the company’s earnings before income taxes and officers’ compensation. He testified that he compared that figure with industry standards to determine whether the company had any goodwill value. By adding in the net tangible assets of the company, Wieland testified that he was able to come up with a total value of the company.

Wieland’s valuation of Brenik, as of October 31, 1987, was $717,000 with $504,000 in tangible assets and $213,000 in intangible assets or goodwill. Wieland explained that he calculated the value of the goodwill by adding the compensation paid to the owners with the company’s earnings before income taxes were paid.

Between the time Wieland finished his appraisal, October 1987, and the time of trial, July 1990, he had been given an opportunity to review financial statements for the six months ending April 30, 1990, and the year ending October 31, 1989. The documents indicated to him that the company “is viable and its operations had been improving since 1990.” More recent company documents also showed corporate debt of $230,000, $150,000 of which was notes payable to corporate officers and $80,000 payable on bank loans.

Wieland valued the total assets of the corporation at $408,000 as of 1990 with $230,000 in liabilities. When asked his opinion on the current value of Brenik, Wieland responded: “I have not done a full updated valuation. So, I would be hesitant to give a formal conclusion. But based on my preliminary calculations using those financial statements, I would say it would be in excess of $400,000.”

He speculated, however, that the $150,000 liability to the owners/ shareholders should be classified as shareholder equity instead of company liability. He testified that if the company was sold, the owner/ shareholders would realize the profit from having notes “payable to themselves.” Therefore he added the $150,000 to the $400,000 figure he gave earlier and came up with a value “along the lines of $580,000 at April 30, [1990,] just using very preliminary calculations.”

On cross-examination, Wieland admitted that he never sought out an explanation for the $150,000 loan from the officers to the corporation and did not know if the officers’ loans were based on their personal signatures on bank loans for the corporation. Wieland valued the tangible assets at $322,455 primarily by taking half of the value quoted to him by the company’s insurance agent as the replacement cost on the equipment. He admitted that the figures were not necessarily a true market value for used equipment. He acknowledged that Donald’s expert had, item by item, valued the equipment at $101,600 and admitted that he made no list of the actual equipment on site. Wieland acknowledged that ordinarily he would use a separate appraiser for the equipment and machinery. He admitted that he had never valued a woodworking establishment or any other company with woodworking machinery.

Edmund J. Apcel, a lawyer and certified public accountant working as a business evaluator and tax preparer, testified as an expert witness for Donald. He used factors enumerated in the Internal Revenue Service Ruling 59 — 60 (Rev. Rul. 59 — 60, 1954 — 1 C.B. 237) to place a value on the business as of July 31, 1988, and also prepared an updated valuation as of October 31,1989.

He testified that Revenue Ruling 59 — 60 dictates that an evaluator consider national economy and industry economy among other factors. Apcel hired M.J. Weiss of Green Machinery Co., a woodworking equipment manufacturer, to value the fixed assets of the company. As of 1988, the value of the fixed assets totalled $101,690. He derived his value in the company by starting with the balance sheet, eliminating the book value of the assets appraised by Weiss, substituting Weiss’ values, adding in the value of the office equipment, two company cars and the roof-mounted cyclone and duct system. Apcel valued the company at $202,632.50 as of July 31, 1988. He updated the valuation as of October 31, 1988, considering losses the company had incurred, and valued the company at $114,000. The company lived “hand-to-mouth” and had outstanding loans of $150,000 from the officers. After reviewing the April 1990 statistics and financial statement for the business, Apcel valued the company at $200,000.

Apcel criticized Edward G. Siegel, Ltd.’s $2.042 million valuation of the company performed at Dorothy’s request, stating that the company erroneously included the building in the company’s valuation. The building belongs to Donald and co-shareholder Reuben Nickel personally and is therefore not a corporate asset. The Edward G. Siegel valuation is identified as a “preliminary valuation of Brenik, Inc., as of October 31,1987.”

Apcel also criticized Wieland’s valuation of the machinery and equipment, contending that he should have used replacement costs to determine the values instead of obtaining an appraiser’s opinion on the market value. It also was error for Wieland to add back into company earnings the officers’ compensation. The Internal Revenue Service had discredited valuing a company by adding back in officers’ compensation and considered that method of valuing a company to be a method of last resort. The officers had a right to draw a salary as working employees of the company. On cross-examination, Apcel admitted that he had only valued one other company as an independent appraiser before valuing Brenik.

Donald testified that he owned a 50% share in Brenik. He described the company’s history, purchase of equipment, loans and move into the Chicago Avenue office. He and Reuben Nickels each personally owned a 50% share of the Chicago Avenue property and building.

Reuben Nickels, the other shareholder of Brenik, testified that he would sell his share of the company to Donald for $50,000 based on a buy-sell agreement the two had signed. He gave extensive testimony regarding the operations of the business from its inception in 1977, explaining what the company does and how money flowed into and out of corporate accounts. He and Donald signed a buy-sell agreement around the time the company was incorporated, and the agreement has never been amended.

James Gervasio, a certified public accountant, testified about his previous work with Brenik and the company’s financial stability. His work on the company’s financial statement, ending April 30, 1990, resulted in a valuation of the stockholder’s equity at $42,016.

William Farina testified as an expert real estate appraiser for Dorothy. He valued the Chicago Avenue property at $590,000 one year before the trial. When asked whether he had an opinion as to the value of the real estate at the time of trial, Farina responded: “No, I do not have an opinion. I would need to investigate what’s happened in the market since then.” He added, however, that he thought $590,000 was still a reasonable estimate for the value of the building.

On cross-examination, Farina admitted that six months before he valued the land at $590,000, he and another person from his office had valued the land at $555,000. He attributed the increase to additional comparable sales in the area.

Donald introduced through evidence deposition the testimony of Aron Kahn of Richard F. Roos & Associates, Inc. Kahn valued the property at $395,000 as of January 1989, five months before Farina’s appraisal.

After hearing all the testimony, the trial judge denied Donald’s counterpetition for dissolution and granted Dorothy’s petition for dissolution on the grounds of mental cruelty. The court found Dorothy’s expert real estate witness to be more credible because he presented more comparable sales located near the Chicago Avenue building. He valued the property at $590,000, finding Donald’s interest in the property was $295,000.

With regard to Brenik, the court found incredible Apcel’s testimony and, “[tjherefore, I am using the wife’s valuation of $550,000 for Brenik, Incorporated.” The court found Donald’s interest in the company was $275,000.

The judge ordered Donald to pay Dorothy $30,000 per year for 10 years beginning on January 1, 1991. The court explained that this $300,000 in payments to Dorothy would serve to create a 60% to 40% split of marital assets. The judge made other distributions of marital assets and ordered Donald to pay Dorothy’s attorney fees and expert witness fee. Donald appeals from the portion of the order requiring him to pay the fees and requiring him to pay $300,000 to Dorothy based on the valuation of Brenik and the Chicago Avenue property.

Our primary concern on appeal is the trial court’s reliance on Dorothy’s expert witness to value Brenik at $550,000, and the distribution of assets resulting therefrom. Having reviewed the evidence, we reverse and remand this cause to the trial court for a redetermination as to the value of the corporation.

No precise rule exists for valuing closely held corporations; however, book value is an appropriate starting point to determine the value, and goodwill of the corporation should also be taken into account along with the economic outlook for the industry in question. In re Marriage of Kaplan (1986), 141 Ill. App. 3d 142, 148, 490 N.E.2d 69.

Though the distribution of marital assets is within the sound discretion of the trial judge and will not be disturbed on appeal unless there has been a clear abuse of discretion (In re Marriage of Bush (1991), 209 Ill. App. 3d 671, 677, 567 N.E.2d 1078), a reviewing court must reverse if it determines that the trial court acted arbitrarily and without the employment of conscientious judgment or, in view of all the circumstances, exceeded the bounds of reason and ignored recognized principles of law so that substantial injustice resulted. In re Marriage of Matters (1985), 133 Ill. App. 3d 168, 180, 478 N.E.2d 1068.

In reviewing the testimony of Dorothy’s expert, we find troublesome several statements made by and calculations relied on by Wieland to determine the value of Brenik. Most disturbing is the ex-; pert’s own admission on direct examination that his valuation of Brenik was a “preliminary valuation.” Marital assets should be valued as of the date of dissolution. (In re Marriage of Rubinstein (1986), 145 Ill. App. 3d 31, 38, 495 N.E.2d 659.) Wieland admitted that his valuation on the date of dissolution, July 1990, was based upon a preliminary valuation of the company in October 1987. Also, he admitted that he could not give a “formal conclusion” as to the value of the company. Also, he admitted that he never took into account a $50,000 debt the corporation incurred in June 1990.

Wieland admitted that he never obtained a competent appraisal of the company’s equipment and machinery, estimated to be 52% of the company’s worth, but instead relied on three-year-old insurance replacement costs to value the equipment at $284,500.

Wieland did not testify that this was a “commonly used practice” (In re Marriage of Hazard (1988), 167 Ill. App. 3d 61, 67, 520 N.E.2d 1121) (trial court properly excluded doctor’s testimony when it was based on evidence considered unreliable according to the standards of his profession)) and, in fact, stated that when preparing a final report he would normally hire an appraiser to determine the market value of the equipment.

We also find error in Wieland’s decision to include the two working owners’ salaries as corporate assets. Revenue Ruling 68 — 609 specifically states that where the business is a sole proprietorship or a partnership, a reasonable amount for services should be deducted from the earnings for those engaged in the business. Rev. Rul. 68— 609, 1968 — 2 C.B. 327. See Lloyd B. Sanderson Estate v. Commissioner (2d Cir. 1930), 42 F.2d 160 (which held that the same rule should apply to working owners of a corporation).

Because we remand this cause for a proper valuation on the corporation, we will address other errors alleged by Donald on appeal.

Donald contends that his witnesses, including himself, provided adequate testimony to establish the existence of a buy-sell agreement between Donald and Nickels that would pay each of the parties $100,000 if the other bought him out. Testimony established that the agreement was signed around the time of the company’s incorporation in 1977 and had not been modified prior to the time of trial. We find it significant that Donald never introduced the agreement into evidence, never cross-examined Wieland on the alleged agreement, and that the agreement was more than 10 years old yet allegedly placed a current value on the owners’ shares. We find no abuse of discretion in the insignificance the court placed on the alleged agreement.

Donald argues that a market value of the corporation should not have included goodwill because such an item was unique to him and would not be sold with the company. His argument, however, goes to the value or lack of value in the company’s goodwill, not to whether goodwill should be included. Goodwill is a recognized tangible asset of a corporation (Board of Trade v. Dow Jones & Co. (1982), 108 Ill. App. 3d 681, 693 n.2, 439 N.E.2d 526) and should be considered when valuing a closely held corporation for the division of marital assets. In re Marriage of Kaplan, 141 Ill. App. 3d at 148.

At the same time, the trial court should not “double count” the goodwill, considering it both as a corporate asset and then as future income used to calculate maintenance payments. Here, the trial judge ordered Donald to pay $14,400 per year in maintenance and $30,000 per year as a cash offset for his value of the company.

The supreme court considered the value of goodwill and its effect on marital assets in In re Marriage of Zells (1991), 143 Ill. 2d 251, 572 N.E.2d 944. Similar to the circumstances in the present case, the trial court purported to divide the marital assets but offset an award of real assets for the wife against the professional goodwill which was assigned to the husband by virtue of the goodwill found in the value of his professional corporation, a law firm. In re Marriage of Zells, 143 Ill. 2d at 254.

The supreme court held that a trial judge should consider goodwill either when valuing the corporation itself or in determining the spouse’s income-generating ability. To figure goodwill in both facets of the practice would be to double count and reach an erroneous valuation. The court held that when goodwill is reflected in the income potential of a party and the party’s ability to pay maintenance, any additional consideration of goodwill is duplicative and improper. In re Marriage of Zells, 143 Ill. 2d at 256.

Although we remand this case for a redetermination on the value of the company, we uphold the trial court’s valuation of the real estate at 925 W. Chicago Avenue.

Donald contends that William Farina’s appraisal of $590,000 for the property was outdated because it was performed a year before the trial and was based on comparable sales up to two years earlier than the trial. Farina testified that he could not provide a trial date valuation of the property unless he had a chance to investigate more recent sales in the area.

Donald therefore argues that the trial court is required to value marital assets as of the date of dissolution, and the failure to do so is reversible error. In re Marriage of Rubinstein (1986), 145 Ill. App. 3d 31, 495 N.E.2d 659.

We find that Donald waived this issue by not contesting Farina’s outdated appraisal at trial and by not providing the court with his own more recent valuation on the property. The parties to a dissolution must provide the trial court with sufficient evidence of property value. (In re Marriage of Wolf (1989), 180 Ill. App. 3d 998, 1006, 536 N.E.2d 792.) A reviewing court will not reverse and remand where the parties had adequate opportunity to present evidence but failed to do so. In re Marriage of Gluszek (1988), 168 Ill. App. 3d 987, 993, 523 N.E.2d 126.

Because the court had two independent valuations on the property and Donald chose not to provide the court with a more updated valuation, we find the court’s decision justified and find no abuse of discretion by the trial court in valuing the real estate.

Finally we consider whether the award of attorney and expert fees should be vacated and reconsidered on remand. If an abuse of discretion is found, the proper remedy is to reverse the property settlement in the judgment and remand the case for a reevaluation of the assets and redivision of the all marital assets. In re Marriage of Rubinstein (1986), 145 Ill. App. 3d 31, 495 N.E.2d 659.

Donald contends that, if any property division is reversed based on improper valuations, then the court also must reconsider its order that Donald pay Dorothy's attorney fees and expert fee. (In re Marriage of Kaplan (1986), 141 Ill. App. 3d 142, 490 N.E.2d 69.) Though Kaplan also dealt not only with maintenance but also child support, we agree with Donald’s premise that a reexamination of marital assets could impact the parties’ abilities with regard to maintenance, attorney fees and expert witnesses, and therefore should also be considered on remand.

In conclusion, we affirm the trial court’s valuation on the Chicago Avenue real estate. We reverse and remand this cause for a proper determination of the value of the corporation, the resulting distribution of marital assets and the payment of attorney and expert witness fees.

Affirmed in part; reversed in part and remanded.

EGAN, P.J., and RAKOWSKI, J., concur.

      Justice Rosemary LaPorta participated in oral argument before her death. Presiding Justice Edward J. Egan was substituted on the panel. He has listened to the oral argument tape and has read the briefs.


author: JUSTICE RAKOWSKI

text:
    DAVID ABSHIRE, Plaintiff-Appellee, v. WILLIAM STOLLER, Defendant (Salk, Ward and Salk, Inc., Defendant-Appellant).
    First District (6th Division)
    No. 1—91—1978
    Opinion filed September 25, 1992.

      Henry F. Field, Ltd., of Chicago (Henry F. Field, of counsel), for appellant.
    Joyce & Kubasiak, of Chicago (Arthur W. Aufmann, of counsel), for ap-pellee.
   JUSTICE RAKOWSKI

delivered the opinion of the court:

This appeal arises from a fraud action filed by plaintiff, David Ab-shire, against defendants William Stoller and his employer, Salk, Ward & Salk, Inc. (Salk). The fraud action was based on plaintiff’s claim that he was misled by Stoller’s representation that a construction loan had been obtained by Stoller’s employer, Salk, a mortgage banker in Chicago, Illinois. The jury returned a verdict in plaintiff’s favor and awarded $9,481 in compensatory damages against both defendants as well as $45,000 in punitive damages against Stoller and $350,000 in punitive damages against Salk. Salk then filed a post-trial motion for a judgment notwithstanding the verdict, a new trial or a remittitur of the $350,000 punitive damages award. The trial court denied Salk’s motion and Salk brought this appeal. The issues on appeal are: (1) whether plaintiff could justifiably rely on the representations of Salk’s agent regarding the loans plaintiff requested; and (2) whether it was proper to charge Salk with punitive damages based on the fraudulent conduct of its agent. We affirm in part and reverse in part.

Salk is a mortgage banking company which matches prospective borrowers with lending institutions and which then services the loans made. At the time of the transaction at issue, Salk had 20 to 25 employees on its payroll. Salk had arranged financing for many projects in the Chicago area but made no loans of its own funds.

According to the testimony of Salk’s witnesses, Erwin Salk and Albert Berkson, the typical procedure for processing an application for a loan is to gather pertinent information from the appropriate sources. An analysis of the project is then performed to determine if it is a viable one and if there is an interested lender and under what terms. If the decision is made to proceed with the application, the potential borrower completes a written application and pays a good-faith deposit.

At this time, a mortgage submittal package is prepared and submitted to the potential lender for review. If approved by the lender, a written loan commitment is issued by that lender. The borrower would then sign the commitment and pay the standby fee. The conditions for disbursement as set forth in the commitment would be followed, and the lender would disburse the funds through an escrow with a title company. Construction loans are usually six months to two years and are followed by permanent loans which extend 5 to 30 years when the construction is completed.

In 1978, plaintiff began to inquire about opening a Goodyear tire dealership in South Holland, Illinois. Prior to this time, he had owned a body shop, and, although he had obtained loans on several occasions, he had no experience with the type of loan at issue here. Plaintiff initially sought funding for the construction of the dealership. One of the people he contacted was an acquaintance by the name of Rock Walker, who in turn contacted his friend William Stoller. Stoller had been hired by Salk that year as a “loan solicitor” and was given the title of vice-president. His job was to locate potential borrowers and draw up applications for others to review. According to the testimony of Salk’s witnesses, Stoller was not authorized to approach potential lenders, issue loan commitments, or communicate the results of applications, and he had no management responsibilities.

Stoller first contacted plaintiff in February 1979. According to plaintiff’s testimony, Stoller reported hearing from Rock Walker that plaintiff was looking for money to fund a Goodyear project, and he invited plaintiff to his office to discuss it further. Before meeting with Stoller, plaintiff sought information regarding Salk and Stoller from an officer at Continental Bank. Plaintiff also checked the Illinois Services Directory, which listed Erwin Salk as the president, Albert Berkson as the senior vice-president, Mr. Zisook as the executive vice-president and William Stoller as the vice-president.

Plaintiff’s meetings with Stoller took place in Stoller’s office at Salk. Plaintiff testified that no one from Salk was ever present at the meetings nor did anyone other than Stoller communicate with plaintiff regarding the Salk loan. Plaintiff told Stoller that he was looking for both a construction and a permanent loan for the project, and he provided Stoller with information regarding projected costs, blueprints of the project and a letter from Goodyear indicating its interest. Stoller then told plaintiff that the way Salk worked was to try to match up information obtained from potential borrowers with potential lending sources and that the final paperwork would be completed after the project was approved. Stoller also told plaintiff that the construction loan would be paid off with the personal loan after the construction was completed. Plaintiff characterized this first meeting with Stoller as “applying for a loan” although no written application was prepared. Stoller informed plaintiff that he liked the project but would have to check with others.

According to Salk’s witnesses, Stoller discussed plaintiff’s interest in obtaining a loan with Berkson and Erwin Salk. Both recalled telling Stoller that the lenders would require Goodyear’s guarantee or co-signature on the loan and that Stoller should obtain a copy of the dealership agreement. Both witnesses testified that they heard nothing further from Stoller regarding the transaction. Plaintiff stated that Stoller never informed him of these requirements.

Plaintiff testified that he was contacted by Stoller a month after their initial meeting. When he arrived at Stoller’s office, Stoller informed him that Salk was ready to offer a $220,000 loan. Stoller also stated that Salk would require a 4% fee and a $1,500 good-faith deposit. Plaintiff stated that it was his understanding that Stoller had already secured the construction financing. Plaintiff asked when he could get the money, and Stoller replied that it would be several weeks to obtain the final paperwork and funding.

Plaintiff next met with Stoller in April of 1979. At this meeting, Stoller showed plaintiff a document identified as an “Application For Loan.” Stoller said that he had sketched out the basic terms of their agreement for the file, and he gave plaintiff a copy. The document referred to a permanent loan for $220,000 as opposed to a construction loan for that amount or a permanent loan for $300,000 as plaintiff had apparently discussed. The document also stated that it was a loan application as opposed to loan commitment. Plaintiff stated that he did not read the document before signing it because he was told by Stoller that the document was just a sketch of the terms of their agreement and not the final paperwork.

Plaintiff testified that a few days after the April meeting, he received a call from Stoller requesting payment of the “good faith deposit,” which was increased from $1,500 to $1,750. Plaintiff further testified that Stoller requested a $1,000 cash payment as soon as possible. Because plaintiff was leaving town, Stoller suggested delivering the money through Rock Walker. Plaintiff went to Walker’s place of business and gave the money to Walker as he was leaving the building. Plaintiff also sent Stoller a check for $750 payable to Salk. Stol-ler subsequently acknowledged receipt of the $1,000 cash payment from Walker.

Around the same time that plaintiff was meeting with Stoller, plaintiff received a letter from Ford City Bank in Chicago dated May 11, 1979, which contained commitments for a construction loan for $230,000 and a permanent loan for $300,000. Plaintiff brought the letter to Stoller and questioned him regarding the fact that the Ford City commitment was for both loans while Stoller had only indicated that the construction loan was obtained. Stoller then replied that he was ready to “line up” the permanent loan. Stoller also informed plaintiff that the construction money would be available in 8 to 10 weeks and that there was no risk in letting the Ford City commitment expire.

Plaintiff did not receive any communication from Stoller for several months, and in July he renewed his application with Ford City Bank. By a letter dated July 26, 1979, plaintiff received a second commitment from the bank. Plaintiff confronted Stoller with the second commitment, and Stoller told plaintiff that $300,000 in permanent financing had been lined up with the Des Plaines bank through the president, Mr. Angelos. Stoller also promised that the construction funds would be available in time to begin construction before winter. Because of Stoller’s promises, plaintiff let the second Ford City commitment expire.

In September 1979, Stoller contacted plaintiff and claimed that the construction funds were available but that plaintiff would have to agree to a higher interest rate. Plaintiff testified that when he came to Stoller’s office, Stoller put a letter in front of him, but he does not remember whether he read it or signed it. In early October Stoller called plaintiff, said that the funding was “just about set” and that plaintiff should begin construction. When plaintiff asked about final paperwork Stoller replied that Salk routinely built projects even though the final documents were not completed so long as funding was in place. Although the plaintiff had no written documentation that any funding had been provided, plaintiff hired an excavator and concrete contractor and started the project.

James Lang, the concrete contractor on the project, began asking for partial payment. When he received no money from plaintiff, he contacted Stoller directly. Lang testified that he was told by Stoller that the money would be released in 7 to 10 days. According to plaintiff’s testimony, Stoller reported that the other contractors had called Stoller and had been given the same information regarding the release of the funds.

In December of 1979, plaintiff again contacted Stoller to inquire about the funding. Stoller stated that he was embarrassed about the absence of funding and offered plaintiff his personal check for $5,000 as a loan until the funding was released. However, when plaintiff attempted to cash the check on two separate occasions, it was returned due to insufficient funds.

In February 1980, plaintiff tried to contact Stoller. When he was unable to reach him by telephone, plaintiff went to his office. When he eventually spoke to Stoller, he was told that there were no construction funds available. At that point, plaintiff stopped work on the project.

At the trial which commenced in April 1991, Stoller was not available to testify because he was in Federal custody regarding charges arising subsequent to Stoller’s employment with Salk. His evidence deposition was also not obtained. Because of Stoller’s absence, the testimony of Salk’s witnesses that Stoller was acting without their knowledge or approval, and plaintiff’s testimony regarding Stoller’s promises that the loans were approved, was, therefore, unrebutted.

Salk raises several arguments in support of its contention that plaintiff’s reliance on Stoller’s representations was not justified. The elements of a cause of action for fraud are: (1) a false statement of material fact; (2) known or believed to be false by the party making the statement; (3) intent to induce the other party to act; (4) action by the other party in reliance on the truth of the statement; and (5) damage resulting from such reliance. In addition, the reliance by the other party must be justified. (Soules v. General Motors Corp. (1980), 79 Ill. 2d 282, 286, 402 N.E.2d 599.) The proof of each element must be clear and convincing. National Republic Bank v. National Homes Construction Corp. (1978), 63 Ill. App. 3d 920, 924, 381 N.E.2d 15.

The first of Stoller’s acts which allegedly gave plaintiff notice was the $1,000 cash payment requested by Stoller. Salk argues that because Stoller requested partial payment of the “good faith deposit” in cash, which was given to Rock Walker in a parking lot, plaintiff had notice of and participated in Stoller’s fraudulent conduct against Salk. Salk also cites plaintiff’s failure to request a receipt from Walker as further evidence that plaintiff was aware that Stoller was not acting on behalf of Salk.

Although Salk claims that the circumstances surrounding the $1,000 cash payment to Stoller should have given plaintiff notice, plaintiff testified that when Stoller requested the payment plaintiff was leaving the city. At this point, Stoller suggested that plaintiff deliver the money through Rock Walker, and it was plaintiff who chose to meet Walker at his place of business. According to plaintiff’s testimony, the delivery of the money took place in the parking lot because plaintiff saw Walker leaving the building, and although he did not ask for a receipt at that time, Stoller verbally acknowledged receipt of the money when plaintiff returned from his trip. Plaintiff argues that he also had no reason to believe that the cash payment was other than what was represented because he was never notified by Salk that it had not received the good-faith deposit.

Salk also argues that the $5,000 personal check that Stoller gave to plaintiff as a loan was further notice that Stoller was defrauding Salk. However, plaintiff claims that he had no reason to question Stol-ler’s conduct at the time because it occurred at Salk’s offices. Plaintiff also states, contrary to Salk’s allegation, that he did try repeatedly to contact Stoller at his office throughout the month of February 1980 but was unsuccessful.

Salk next argues that plaintiff could not justifiably rely on Stoller’s representations because the alleged loan commitment lacked essential terms. (See Delcon Group, Inc. v. Northern Trust Corp. (1989), 187 Ill. App. 3d 635, 543 N.E.2d 595.) However, the plaintiff testified that, based on Stoller’s representations in March 1979, the construction loan was for the amount of $220,000, at 10%% interest with a 4% fee and a $1,500 good-faith deposit. Stoller also told plaintiff at their first meeting that it was Salk’s procedure to have the construction loan paid off with the permanent loan when the construction was completed.

Relying on Beaton & Associates, Ltd. v. Joslyn Manufacturing & Supply Co. (1987), 159 Ill. App. 3d 834, 512 N.E.2d 1286, Salk contends that plaintiff is guilty of constructive fraud because he knew of and was willing to accept the fruits of Stoller’s fraudulent acts. Thus, plaintiff had no right to rely on Stoller’s representations, and he cannot maintain an action in fraud. Although Salk argues that Beaton & Associates, Ltd. v. Joslyn Manufacturing & Supply Co. is factually similar to this case, the trial court in that case found that the plaintiff did have knowledge of the agent’s fraudulent conduct, and the appellate court held that there was evidence in the record to support the trial court’s finding. In this case, the jury’s verdict was that plaintiff did not have notice of Stoller’s conduct and that his reliance on Stoller’s representations was justified. For the reasons discussed above, we conclude that there was sufficient evidence to support the jury’s verdict. We further conclude that the trial court’s denial of Salk’s motion for a new trial was not improper where there was no evidence of abuse of discretion. See Cadral Corp. v. Solomon, Cordwell, Buenz & Associates, Inc. (1986), 147 Ill. App. 3d 466, 483, 497 N.E.2d 1285.

Next, Salk contends that it cannot be charged with punitive damages for the fraudulent conduct of its agent where the agent was not acting in a managerial capacity. Generally, the purpose of awarding punitive damages is not compensatory but rather to punish the offender and to deter that party and others from committing similar acts of wrongdoing. (Loitz v. Remington Arms Co. (1990), 138 Ill. 2d 404, 414, 563 N.E.2d 397; Mattyasovszky v. West Towns Bus Co. (1975), 61 Ill. 2d 31, 35, 330 N.E.2d 509.) Punitive damages may be awarded when acts of wrongdoing are committed with fraud, malice, violence or where the party acts willfully or wantonly. (Loitz, 138 Ill. 2d at 415, quoting Kelsay v. Motorola, Inc. (1978), 74 Ill. 2d 172, 186, 384 N.E.2d 353.) However, “the punitive and admonitory justifications for the imposition of punitive damages are sharply diminished in those cases in which liability is imposed vicariously.” (Mattyasovszky, 61 Ill. 2d at 36.) While the measurement of punitive damages is a jury question, the question of whether the facts of a particular case justify the imposition of punitive damages is one of law. Kelsay, 74 Ill. 2d at 187.

In this case, punitive damages were imposed on Salk vicariously for the fraudulent acts of its agent, Stoller. Since the Illinois Supreme Court’s ruling in Mattyasovszky (61 Ill. 2d 31, 330 N.E.2d 509), Illinois courts have limited the imposition of punitive damages on a corporation for the acts of its agents to the specific circumstances set forth in the Restatement (Second) of Agency §217C (1958) (hereafter section 217C). This section provides:

“Punitive damages can properly be awarded against a master or other principal because of an act by an agent if, but only if:
(a) the principal authorized the doing and the manner of the act, or
(b) the agent was unfit and the principal was reckless in employing him, or
(c) the agent was employed in a managerial capacity and was acting in the scope of his employment, or
(d) the principal or a managerial agent of the principal ratified or approved the act.”

The parties in this case have stipulated that the issue of Salk’s liability for punitive damages rests only on a determination of whether Stoller was acting in a managerial capacity when he committed the fraudulent acts. See Restatement (Second) of Agency §217C(c) (1958).

Salk argues that Stoller was not acting in a managerial capacity because his job was to solicit business, and he had no discretionary authority to establish company policy or make planning level decisions.

Relying on Board of Education of Plainfield Community School District No. 202 v. Illinois Educational Labor Relations Board (1986), 143 Ill. App. 3d 898, 493 N.E.2d 1130, Illinois State Journal-Register, Inc. v. National Labor Relations Board (7th Cir. 1969), 412 F.2d 37; Loughry v. Lincoln First Bank (1986), 502 N.Y.S. 2d 965, 494 N.E.2d 70, and the Restatement (Second) of Torts §909, Illustration 3, at 468-69 (1979), Salk defines a managerial employee as one who formulates, determines, and implements corporate policy and one who has discretionary authority to make final determinations independent of company consideration or approval. Salk also refers to Black’s Law Dictionary 1112 (4th ed. 1968), which defines a manager as one who controls, directs or administers.

At the trial, the unrebutted testimony was that Stoller’s authority was limited to calling potential customers, gathering preliminary information, and completing an application form to submit to others at Salk who would then decide on the appropriateness of a particular borrower or project for further consideration. Stoller did not have authority to communicate with potential lenders regarding loan applicants and did not have authority to issue or communicate loan commitments. Although Stoller had the title of vice-president, he had no executive role and was not a member of the board of directors. Fin--thermore, there was no evidence that Stoller was responsible for directing the activity of any other employees.

Plaintiff argues that for the purpose of imposing punitive damages in the context of section 217C, Illinois courts also recognize as a manager one who is in a more limited position of control. In making this argument, plaintiff relies heavily upon Deal v. Byford (1989), 127 Ill. 2d 192, 537 N.E.2d 267, and Adams v. Zayre Corf. (1986), 148 Ill. App. 3d 704, 499 N.E.2d 678. In Deal v. Byford, the occurrence which precipitated the subsequent action was an altercation which erupted when Byford, an employee of an apartment complex, demanded that the plaintiff vacate her apartment. Plaintiff sustained injuries as a result of the incident and filed a claim against Byford and his employer, SRP Associates, the owner of the complex. In each count of her complaint, plaintiff alleged that Byford was the resident manager of the complex and was the agent for and employed by SRP Associates. Byford filed a verified answer to plaintiff’s complaint admitting that he was an agent of SRP Associates and that he was acting within the scope of his employment on the day of the incident. Deal, 127 Ill. 2d at 196-97.

However, at the trial, Byford testified that he worked as a handyman for Masood Mahzar, the managing partner of SRP Associates, on a job-to-job basis and that he received an hourly wage in cash. He also stated that he never held himself out as an agent of SRP Associates and had not been aware of the significance of the document when he signed the verified answer to plaintiff’s complaint. Byford acknowledged that his wife had signed his name as an agent of SRP Associates on the landlord’s five-day notice but claimed that he had never received authorization from SRP Associates to act as its agent or manager. Deal, 127 Ill. App. 3d at 197-98.

Mahzar testified that during the time in question he had hired By-ford to paint apartments and do other maintenance work in the complex but that he had not authorized Byford to sign any document as an agent or manager of SRP. Deal, 127 Ill. 2d at 198.

SRP Associates argued on appeal that the award of punitive damages against it was inappropriate because Byford was not acting in a managerial capacity at the time of the occurrence. (Deal, 127 Ill. 2d at 205.) In its rejection of SRP Associates’ argument, the supreme court held that Byford was acting in a managerial capacity not because of the nature of his work but because SRP Associates and By-ford admitted the truth of plaintiff’s allegations in their answer to plaintiff’s complaint. The court further concluded that SRP Associates’ admissions were sufficient to satisfy the standard set forth in Mattyasovszky (61 Ill. 2d at 35) and section 217C for the vicarious imposition of punitive damages. (Deal, 127 Ill. 2d at 206.) However, because the court never addressed the issue of Byford’s role as a manager but held instead that it was judicially admitted, Deal contributes little support to plaintiff’s argument.

In Adams v. Zayre a claim was brought against Zayre Corporation for false imprisonment when the security staff of one of the Zayre stores wrongfully detained the plaintiff to investigate an incident of retail theft. The appellate court upheld the imposition of punitive damages against Zayre Corporation based on its conclusion that the wrongful conduct had occurred under the direction of the manager of the security department. (Adams, 148 Ill. App. 3d at 714.) While the court in Adams did not elaborate on the security officer’s role as a manager, it could be inferred that with respect to the security department at that particular store, he was in a position of authority and control.

As part of its discussion regarding the imposition of punitive damages pursuant to section 217C, the court in Kemner v. Monsanto Co. (1991), 217 Ill. App. 3d 188, 206, 576 N.E.2d 1146, addressed the meaning of managerial agent or employee. Relying on Illinois State Journal-Register, Inc. v. National Labor Relations Board (7th Cir. 1969), 412 F.2d 37, and Board of Education of Plainfield Community Consolidated School District No. 202 v. Illinois Educational Labor Relations Board (143 Ill. App. 3d 898, 493 N.E.2d 1130), the court in Kemner defined a managerial employee as one who “formulates, determines and effectuates his employer’s policies, one with discretion or authority to make ultimate determinations independent of company consideration and approval of whether a policy should be adopted.” (Kemner, 217 Ill. App. 3d at 206.) The court further described a “managing agent” as one “who acts with supervisory authority, being invested with general powers to exercise discretion and judgment in dealing with corporate matters; his interests are identified with those of the corporation.” Kemner, 217 Ill. App. 3d at 206.

Whether we adopt the definition of a manager discussed in Kemner or the manager in Adams whose authority was limited to a specific department, we conclude that Stoller, the agent in this case, could not be considered a manager in either context where he had no authority or responsibility for any other employees or the operation of any department within the corporation.

Plaintiff claims that Stoller was a manager because he was the only one who had contact with the plaintiff regarding the loans at issue, and he was manager of that particular project. Plaintiff also argues that Stoller was hired by Salk to “put deals together” and was given the title of vice-president. Contrary to plaintiffs argument, the fact that Stoller was the only employee from Salk who had contact with plaintiff did not provide him with any managerial responsibilities, nor did he “manage” plaintiffs loan application. Based on the unre-butted- testimony of Salk’s witnesses, Stoller’s sole function was to find potential applicants, assist in the application process and communicate information between Salk and the potential borrower.

Because we conclude that Stoller was not acting in a managerial capacity, Salk cannot be charged with punitive damages based on Stol-ler’s fraudulent acts.

Accordingly, we reverse the order of the circuit court denying Salk’s motion for a judgment notwithstanding the verdict as to the imposition of punitive damages against Salk, and we affirm the order as to the finding of fraud and the award of compensatory damages against Salk.

Reversed in part and affirmed in part.

EGAN, P.J., and McNAMARA, J., concur.