author: JUSTICE EGAN

text:
    MANDOLINI COMPANY, Plaintiff-Appellee, v. CHICAGO PRODUCE SUPPLIERS, INC., Defendant (S & M Produce Company et al., Garnishees and Defendants-Appellants).
    First District (2nd Division)
    No. 1—87—3228
    Opinion filed June 6, 1989.

      Berliner & Krasnow and Mark R. Ordower, both of Chicago (Henry C. Krasnow and Ross J. Peters, of counsel), for appellants.
    Eric P. Ferleger, of Chicago, for appellee.
   JUSTICE EGAN

delivered the opinion of the court:

The garnishee-defendant, S&M Produce Company (S&M), appeals from an order of the circuit court imposing a lien in the amount of $12,532.63 against S&M’s beneficial interest in a land trust pursuant to the plaintiff’s motion to set aside improper payments. The issue is whether a debtor transferred property to S&M in a manner that improperly defeated the rights of the plaintiff-creditor.

Before November 15, 1982, the defendant, Chicago Produce, Inc. (CPS), and S&M were owned and operated by the Mided family. Sam Mided and his sons Donald and Adam served as directors and officers of both corporations, which were engaged in the wholesale produce business. Another son, Lance, served as secretary of CPS. CPS and S&M were sister corporations as defined by the Internal Revenue Code because Sam, Donald and Adam held common ownership of the two corporations. 26 U.S.C. §1563 (1986).

Disagreements between Donald and Adam regarding the business operations of CPS led to the resignations of Donald and Sam from their respective positions with CPS on November 15, 1982. Additionally, they sold their shares in CPS stock to Adam, the chief executive officer. Adam Mided severed his association with S&M by resigning from his positions of director and officer of that corporation. He also sold his shares of S&M stock to.Donald and Sam. Hence, the two companies ceased to be sister corporations as of that date because Adam Mided became the sole director, officer and shareholder of CPS. CPS owed S&M $240,928 primarily for loans beginning in May of 1979 and continuing through July of 1981, as well as some goods advanced on credit.

The accountant serving both corporations at the time of change in structure, Ruben Vernof, testified that discussions had been ongoing during this period as to how CPS would satisfy the debt. On December 6, 1982, CPS assigned its beneficial interest in two pieces of real estate, 1615 S. Peoria and 96 South Water Market, from which it operated its business, to S&M in partial satisfaction of its debt. S&M credited CPS with $227,646 against its debt of $240,928 on the corporate books. A debt of about $10,000 remained after the transaction was completed. In addition to the conveyance, CPS entered into a lease agreement with S&M on the same day to rent its prior office space at 96 South Water Market Street for a monthly rate of $656.

From the time of the conveyance on December 6, 1982, until July 1983 when CPS ceased operations, S&M sold it about $120,000 in goods/produce. At the time CPS notified all its creditors that it was discontinuing its operations and stretching out its payments, it owed S&M about $56,000. The plaintiff, Mandolini Company, filed an action against CPS to recover its outstanding indebtedness of $12,352.63 on September 27, 1983. The complaint alleged that the outstanding balanced owed by CPS was “exhibited” by an invoice attached to the complaint. That invoice reflects purchases made between May 12, 1983, and August 24, 1983, and a balance brought forward of $6,966.39. (The property in issue was conveyed from CPS to S&M on December 6, 1982.) The trial court entered an ex parte default judgment against CPS in the amount of $12,352.63 plus costs on July 24, 1984, for failing to answer the plaintiff’s complaint.

Pursuant to the plaintiff’s citation to discover assets served on Donald Mided, it learned of the history behind the interlocking directorship between CPS and S&M before November 15, 1982, the substantial loans from S&M to CPS from 1979 to 1981 and that CPS had conveyed its only two tangible assets to S&M on December 6, 1982. The plaintiff subsequently filed a motion to set aside the improper payments and for a turnover order against S&M. It asserted that S&M, Donald Mided and the other corporate shareholders “received an advantage of preference in the payment of their claims” at the expense of the plaintiff and CPS’ other creditors. At the hearing on the motion the plaintiff did not introduce any evidence as to the fair market value of the realty at the time CPS conveyed its beneficial interest to S&M. S&M maintained that the consideration exchanged for the realty was certain advances and the $227,646 written off for loans, totalling $240,928.

Relying on the testimony, the financial statements and tax returns of CPS from 1979-82 and S&M from 1979-83, the judge found that CPS was insolvent during the years 1979 through 1982 and would have been unable to carry on its business but for the fact that S&M had not called for the repayment of its loans. He held that the directors of S&M, Donald Mided and Sam Mided, could not receive the preference over CPS’ other creditors resulting from CPS’ conveyance of its beneficial interest to S&M, because they were aware through their prior fiduciary relationship with CPS that it was insolvent at the time of the transaction. Relying on the case of Blocker v. Drain Line Sewer & Water Co. (1972), 5 Ill. App. 3d 289, 282 N.E.2d 207, he held that the directors of CPS had a fiduciary obligation to creditors of the corporation to notify them of the insolvency. S&M has attacked the theory upon which the court based its holding; and the plaintiff does not attempt to support it. In oral argument before us, the plaintiff’s attorney made it clear that he did not agree with the trial court’s reasoning, but that the trial court came to the right conclusion although for the wrong reason.

S&M raises a number of arguments in support of its contention that' the order must be reversed. We believe that we need address only one of them: that the plaintiff failed to prove that it was a creditor of CPS at the time of the conveyance of the property from CPS to S&M.

The general law in Illinois is that only those creditors who had existing claims at the time of the transfer may complain that the transfer of property was made in derogation of their rights; and the burden is on the creditor to establish the existence of a preexisting debt. In Chicago Daily News Co. v. Siegel (1904), 212 Ill. 617, 629-30, 72 N.E. 810, the supreme court held as follows:

“Where a conveyance is alleged to be made in fraud of the rights of creditors, the creditors injured are those whose claims exist at the time of the conveyance. Only creditors, having claims when the fraud is committed, can avoid such conveyances. In Mixell v. Lutz, 34 Ill. 382, it was said (p. 387): ‘If the conveyance was made before the indebtedness was incurred, then there was no fraud, as there was no design to hinder or delay creditors at the time; and the credit was not given upon the supposition that this property could be rendered liable for its payment.’ In Seaman v. Bisbee, 163 Ill. 99, it was held that a husband having conveyed his property to his wife without consideration, the conveyance could not be attacked by creditors, whose debts did not exist at the time of the voluntary conveyance. [Citations.] It is not sufficient that other creditors are prejudiced by such conveyance or release, but it must be shown that the creditors, attacking the fairness of the transaction, had existing claims.”

See also Menconi v. Davison (1967), 80 Ill. App. 2d 1, 4-5, 225 N.E.2d 139,141-42; 20 Ill. L. & Prac. Fraudulent Conveyances §203 (1956).

The plaintiff’s first response to this argument is that we cannot pass on this question because S&M failed to raise it before the trial court in its response to the plaintiff’s turnover motion. S&M did not attack the plaintiff’s status in its response to the turnover motion; but there was no obligation that it do so. It was the duty of the plaintiff to prove the debtor-creditor relationship between CPS and itself at the time of the conveyance of the property. It was not an affirmative defense, that is, it was not the duty of S&M to show that the plaintiff was not a creditor. The cases cited by the plaintiff are inapposite. In Consoer, Townsend & Associates v. Addis (1962), 37 Ill. App. 2d 105, 185 N.E.2d 97, the appellate court refused to consider an affirmative defense which the defendant was obliged to plead. In Lien v. Pietruszewski (1974), 24 Ill. App. 3d 784, 321 N.E.2d 442, aff’d (1975), 61 Ill. 2d 350, 335 N.E.2d 772, an objection was made in the appellate court that the plaintiff was an improper party plaintiff; and the appellate court said that the objection to the plaintiff’s standing should have been made first by motion in the trial court. In Mid-States Finance Co. v. Redman (1969), 111 Ill. App. 2d 107, 248 N.E.2d 789, the appellant raised arguments in the appellate court that were not raised in the trial court. The appellate court said that it would be justified in refusing to consider such new arguments, but it did consider them anyway.

The plaintiff told us in oral argument that S&M.raised this issue only when the judge was about to make his ruling. Our review of the record discloses to the contrary and shows that the court was apprised of S&M’s position from the time of the opening statement in which S&M’s attorney spoke, in part, as follows:

“If one takes a look at the attachments to the complaint, which were the ledger sheets which add up to the $12,000.00 figure that he is asking for here, all of the transactions which are the basis of this $12,000.00 that is owed occurred in the year 1983, from May 1983 through July of 1983. The transactions that he is asking us to vacate occurred in December of 1982.” (Emphasis added.)
“But these losses to Mandolini Company didn’t even take place until May ’83, July ’83, when they finally gave their billing in August ’83 covering this entire amount. And that was the same time that Mr. Mided’s company, S&M Produce was giving a billing to this company in the amount of $56,000.00. So, Your Honor, once these facts are in I don’t think we need to argue the details of the law any more.” (Emphasis added.)
“Even in that case he is still saying that the debt that he incurred in this corporation didn’t occur until at least six months after, or five months to six months, after this transaction the first ones that he seen ***. So that — so he is saying that he was not a creditor with respect to this suit at the time that this transaction took place. So what standing does he have even to-.”

The record also shows the awareness of the plaintiff’s attorney that S&M was questioning the plaintiff’s standing when he said “that is what [S&M’s attorney’s] initial threshold is, that we transferred these before we incurred this debt and that makes it okay. I don’t agree with that.” Later he told the court that he would prove that the debtor-creditor relationship existed at the time of the conveyance:

“[S]o for the record and my opening statement let me further clarify that at the time the transfers were made there were substantial amounts owing and due between the plaintiff and the, let’s just say third-party corporation, that received the benefit of the realty.” (Emphasis added.)

We judge, therefore, that the question of the plaintiff’s status as a preexisting creditor has been properly preserved for review.

In its brief, the plaintiff alternatively responds to this argument on the merits with the assertion that “the record is clear that the argument presented by the defendant has absolutely no foundation whatsoever.” It also says “that the record is clear and uncontraverted . . . that money was due and owing to [the plaintiff] and others by CPS at the time of the above-mentioned conveyance.” It refers to no part of the record to support those assertions.

During oral argument this court asked the plaintiff’s attorney to indicate what part of the record supported a finding that it was a preexisting creditor. In response, the plaintiff’s attorney referred us to the ledger sheets attached to the complaint filed against CPS. (Those sheets are of dubious admissibility against S&M.) They contain 102 entries and are dated beginning on May 18, 1983, and ending on August 24, 1983. The first sheet shows a balance forwarded of $6,966.38. Even assuming that the ledger sheets attached to the plaintiff’s complaint against CPS could properly be considered as proof against S&M, there is no evidence provided by the sheets which indicates that the opening balance was composed of credit extended by the plaintiff on or before December 6, 1982. S&M’s attorney raised the unreliability of the balance figure in his opening statement. It is inescapable that the plaintiff’s attorney was aware that a serious question was being raised by S&M whether the plaintiff would be able to establish that CPS owed the plaintiff $12,352 or any other sum on December 6, 1982. If, indeed, the plaintiff was a creditor in December 1982, we fail to understand why no representative of the plaintiff was called to establish that simple fact. We also think it puzzling that the plaintiff’s motion did not expressly allege that a debtor-creditor relationship existed on December 6, 1982. Instead, it ambiguously recited that purchases were made by the plaintiff from CPS in 1981, 1982 and 1983; and pointedly said that the debtor-creditor relationship existed on the date of the filing of the complaint, September 27, 1983.

On June 3, 1987, the court entered an order which included a finding that the plaintiff was a creditor of CPS as a supplier during the period from 1980 until December 6, 1982. On June 16 that order was vacated, and on July 21, 1987, the court, significantly, amended the previous order and found that the plaintiff was a creditor of CPS as a supplier from 1980 until November 15, 1982. The plaintiff makes no issue of that finding. It is clear to us, therefore, that the plaintiff has failed to establish, and the court did not find, that it was a creditor of CPS at the time of the conveyance to S&M on December 6, 1982.

An exception to the general rule provides that a voluntary conveyance may be set aside at the instance of subsequent creditors upon proof of actual fraudulent intent. (20 Ill. L. & Prac. Fraudulent Conveyances §204 (1956); Cramer v. Bode (1887), 24 Ill. App. 219. See also National City Bank v. Cowdin (1931), 343 Ill. 430, 175 N.E.2d 411.) In this case there was no finding of actual fraudulent intent; and the evidence does not support such a finding.

For these reasons the judgment of the circuit court is reversed.

Judgment reversed.

BILANDIC, P.J., and HARTMAN, J., concur.

       Justice Egan participated in the decision of this case prior to his assignment to the sixth division.


source: Caselaw Access Project

author: JUSTICE SCARIANO

license: Public Domain

text:
    NATILA M. KUKLA, Plaintiff-Appellant, v. FREDERICK T. KUKLA et al., Defendants-Appellees.
    First District (2nd Division)
    No. 1—88—2779
    Opinion filed June 6, 1989.
    Frana Biederman, of Frana Biederman, Ltd., of Chicago, for appellant.
    D. Kendall Griffith, Thomas F. Ging, and Bruce L. Carmen, all of Hinshaw, Culbertson, Moelmann, Hoban & Fuller, of Chicago, for appellees.
   JUSTICE SCARIANO

delivered the opinion of the court:

Plaintiff appeals from the dismissal with prejudice of her complaint against her spouse, whom she is divorcing, and his employer, alleging invasion of privacy and intentional infliction of emotional distress. We affirm.

Plaintiff filed a two-count complaint against her husband, Frederick T. Kukla, his employer Kukla Press, Inc., and Stanley Kukla, Frederick’s brother and an officer of Kukla Press, alleging that Frederick harassed her by repeatedly calling her on a car telephone furnished by his employer and by “coming to her house and acting in a threatening and intimidating manner.” Count I of the complaint mixes allegations of invasion of privacy with an implied right of action arising out of the violation of an order entered as part of the dissolution of marriage action between plaintiff and Frederick, which provided that plaintiff and Frederick are “mutually restrained from annoying and harassing each other in any way and more specifically, from telephoning the other, except that *** [Frederick] may telephone the marital home for the sole purpose of speaking with his children.” Count II is premised upon intentional infliction of emotional distress.

In response to the complaint, defendants filed a motion to dismiss, pursuant to section 2 — 615 of the Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 615), contending that the domestic relations division of the circuit court of Cook County retained jurisdiction over alleged violations of orders it has entered. A hearing on the motion was scheduled for July 28, 1988, and, on that date, counsel for defendants informed the trial judge that he hád agreed to plaintiff’s request that the motion be continued for 30 days, to allow her time to file a response. The judge answered as follows:

“What we do on 615 motions is, all motion judges try to see whether any briefs are necessary. I would like to know arguably what the defense is particularly to Count I. So I want you to pick a date that is convenient for you' *** for status only and ask opposing counsel to come in with you and just tell me, ‘arguably’ what his defense is. * * *
I just like to know if it is necessary to have briefs.”

The trial judge held a hearing on the motion on August 5, 1988, during which he denied plaintiff leave to file a written response and dismissed the complaint with prejudice. Plaintiff appeals that order as it applies to Frederick and Kukla Press, but not as to Stanley.

Plaintiff argues that she has a cause of action for Frederick’s violation of a restraining order entered by the domestic relations division because a recent amendment to the rights of married women act provides that “[a] husband or wife may sue the other for a tort committed during the marriage.” (Ill. Rev. Stat. 1987, ch. 40, par. 1001.) In dismissing the complaint, the trial court stated:

“I would have to sustain the motion to dismiss this for the simple reason that those statutes that you pose have absolutely nothing to do with, as far as I am concerned, with allegations of a complaint that really seeks a remedy that belongs in the court of domestic relations. All these allegations are strictly those of harassment, of non-compliance with the court orders in the court of domestic relations and alleged physical and mental anguish and — physical injury and mental anguish as a result thereof. If we were to rule otherwise, we’d open up the floodgates to the law division to everyone who has a domestic relations matter to come into this court for compensatory damages based upon non-compliance with court orders in the court of domestic relations. And obviously, that can’t be done at all.”

In response to plaintiff’s counsel’s request for leave to “prepare something in writing,” the trial judge replied, “It’s not necessary.”

It appears that plaintiff is also claiming that the trial court erred in not allowing her to file an amended pleading, and she seeks leave to do so in her notice of appeal; however, the trial court did not prohibit her from filing such a pleading, as is evidenced by the following colloquy:

“MS. BIEDERMAN: Well, your Honor, to protect my client’s rights, is your ruling that if there were no divorce action, that we would have a cause of action?
THE COURT: I am not saying anything other than there is no cause of action in this suit, period. That’s all I can—
MS. BIEDERMAN: And if I want to take an appeal and if I decide that I needed to plead additional matters so that it was complete for review by the Appellate Court, are you saying that I have no right to—
THE COURT: To amend you mean?
MS. BIEDERMAN: To amend, yes.
THE COURT: Oh, no. Just a minute now. Obviously, you always have a right to come in, as anyone does, to vacate a final order. This is a final order, number one.
Number two, it’s appealable because there are no other parties, so 304(a) is not involved. You can always come in on a motion to vacate any final order within 30 days.
The cases hold that in order to vacate a final order that dismisses an action as opposed to striking, you must tender a new pleading at the time. There are many cases on that. So you are protected in that regard. Anything else?
MS. BIEDERMAN: No. As I said, I have no leave to refile. Is that the language your Honor wants put in?
THE COURT: It’s superfluous. It’s — for the record, so you know, it’s superfluous. You don’t need all that language.”

The order appealed from provides that “plaintiff’s complaint is dismissed with no leave to refile.” Plaintiff asserts that the trial judge’s comments “demonstrated that paying a fee to vacate and filing an amended complaint would be hopeless.”

We agree with defendants that the amendment to the rights of married women act (Ill. Rev. Stat. 1987, ch. 40, par. 1001) did not expand tort liability between husband and wife, but merely abolished the defense of the interspousal tort immunity. Moreover, as defendants assert, the trial court’s ruling was not that one spouse cannot sue another, merely that when the conduct underlying the tort action has been regulated by a previous order of the domestic relations court, that court retains jurisdiction to fashion relief for a violation of its order. Defendants also correctly maintain that the contumacious violation of an injunction does not give rise to damages to the party offended by the violation, citing Eberle v. Greene (1966), 71 Ill. App. 2d 85, 217 N.E.2d 6. In that case, plaintiff brought a contempt proceeding, alleging that defendant had failed to comply with an injunction requiring him to restore land along a fence dividing the parties’ property. On appeal, defendant argued that the trial court erred in awarding plaintiff damages. The court agreed, stating:

“The enforcement of a court’s decree by civil contempt is not the enforcement of a private right but rather the process of the court to secure obedience to its decrees, the benefit to the party invoking the aid of the court being merely incidental. *** The established rule in Illinois is that the court may imprison or fine for contempt of its orders but is without authority to recompense [p]laintiff for his damages.” (71 Ill. App. 2d at 93.)

Defendants further claim that the order which Frederick allegedly violated is in the nature of an injunction and that plaintiff is attempting to avoid “the simple, obvious remedy of a rule to show cause for an alleged violation of a restraining order.”

The basis of plaintiff’s complaint is Frederick’s alleged -violation of a restraining order, entered during their divorce action, which was ongoing, indeed was “in the middle of *** trial,” at the time plaintiff filed the instant’ action. For reasons best known to plaintiff, she chose not to seek relief in the domestic relations division, the court which issued the restraining order and had jurisdiction to enforce it, but instead filed a tort action in the law division of the circuit court. Such forum shopping cannot be countenanced. The trial judge properly ruled that plaintiffs complaint “belongs in the court of domestic relations.”

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

Affirmed.

BILANDIC, P.J., and HARTMAN, J., concur.


author: JUSTICE RIZZI JUSTICE McNAMARA,

text:
    JOSEPH McGOWAN, a Minor, by Kathleen McGowan, his Mother and Next Friend, Plaintiff-Appellant, v. CARLOS E. TORRES, Defendant-Appellee (MacNeal Memorial Hospital et al., Defendants).
    First District (3rd Division)
    No. 1—87—0631
    Opinion filed June 7, 1989.
    McNAMARA, J., specially concurring.
    Sidney Robin, Ltd., of Chicago, for appellant.
    Wildman, Harrold, Allen & Dixon, of Chicago (Francis Raymond Petrek, Jr., and Mary K. Periolat, of counsel), for appellee.
   JUSTICE RIZZI

delivered the opinion of the court:

This is a medical malpractice action brought against defendants Carlos E. Torres, M.D., Angel C. Lugay, M.D., Robert C. Olson, executor of the estate of James Olson, M.D., deceased, Manchar L. Jethani, M.D., and MacNeal Memorial Hospital Association. Plaintiffs complaint alleges that he suffered serious brain damage because the defendants failed to properly diagnose and treat his bacterial meningitis. Defendants Torres and Lugay, who practiced together as pediatricians, filed a motion for summary judgment. Doctor Lugay subsequently withdrew his motion. Affidavits, deposition transcripts, interrogatories, and other documents were filed by the parties. The trial court granted defendant Torres’ motion for summary judgment and plaintiff appeals. The other named defendants remain as parties to this action. We reverse and remand.

Plaintiff, Joseph McGowan, was born November 25, 1978. On November 29, 1979, he was hospitalized at MacNeal Memorial Hospital. For the duration of this hospital stay, Joseph was under the care of Dr. Olson, who discharged him on December 3,1979.

On December 4, 1979, Dr. Torres examined Joseph at the office which he shared with Dr. Lugay. His examination revealed that Joseph was suffering from vomiting, diarrhea and fever of unknown origin. Dr. Torres ordered a blood and urine test, and examined Joseph to determine whether or not he was exhibiting any of the physical signs of meningitis such as stiff neck or extremities. According to Dr. Torres these tests were negative.

On December 5, 1979, Joseph’s parents took him to the emergency room of MacNeal Memorial Hospital. The emergency room records indicate that Joseph was still suffering from vomiting and fever. Neither Dr. Torres nor Dr. Lugay saw Joseph on the day of his emergency room visit. Joseph was examined by the pediatric resident on duty and readmitted to MacNeal Memorial Hospital on December 5. Doctors Torres and Lugay were listed as his attending physicians. Dr. Torres examined Joseph in the hospital on December 6. He thereafter noted in the medical record that Joseph was doing fine. Dr. Torres saw Joseph again on December 8 and noted that he was “doing much better.” He also ordered a urine culture test. On December 9, Dr. Torres saw Joseph and noted that he was suffering from diarrhea. He prescribed some medication, a soft diet and requested that a stool culture be performed. On December 11, Joseph was discharged from the hospital by Dr. Lugay. Dr. Torres wrote the discharge summary which indicated that Joseph was suffering from viral gastroenteritis. On December 18, 1979, Dr. Torres performed a follow-up examination of Joseph in his office. He noted that Joseph was doing much better and that his physical examination was normal. Dr. Torres did not see Joseph again after his visit.

In May of 1980, Joseph exhibited symptoms of speech and language delay. His parents also reported that Joseph was having episodes of high temperature and hyperactivity. In September of 1980, Joseph was suffering from behavioral problems and screaming spells. By October of 1986, Joseph was diagnosed as severely physically and mentally disabled. According to Dr. Robert Mendelsohn, a medical expert hired by the plaintiffs, Joseph’s medical condition was the result of brain damage caused by untreated bacterial meningitis.

Kathleen McGowan filed the malpractice action on behalf of her son Joseph. After the lawsuit was filed, Lugay and Torres had a pediatrician review the medical records concerning Joseph’s hospitalization and treatment. The defendants’ expert opined that the treatment rendered by Doctors Lugay and Torres was consistent with the generally accepted standards of patient care for the greater Chicago area.

Plaintiff had the medical records examined by her medical expert who stated that in his opinion the care and treatment rendered by the defendants was not consistent with the generally accepted standards of patient care for the greater Chicago area. Dr. Robert Mendelsohn stated that Doctors Lugay and Torres should have performed a spinal tap to test for meningitis at the beginning of Joseph’s December 5, 1979, hospitalization. After reviewing the affidavits, depositions, and hearing oral argument, the trial court granted Torres’ motion for summary judgment. This appeal followed.

The sole issue before us is whether there is a genuine issue of material fact as to the liability of Torres for the failure to diagnose and treat Joseph’s bacterial meningitis during his December 5, 1979, hospital admission.

Summary judgment is appropriate if the pleadings, depositions and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (Lane v. City of Harvey (1988), 178 Ill. App. 3d 270, 273, 533 N.E.2d 75, 78; Ill. Rev. Stat. 1985, ch. 110, par. 2 — 1005(c).) Evidence in support of the motion must be strictly construed against the moving party and summary judgment should be denied where reasonable persons could arrive at different conclusions. (Petkus v. Girzadas (1988), 177 Ill. App. 3d 323, 327, 532 N.E.2d 333, 336.) An order granting summary judgment must be reversed if a reviewing court determines that an issue of material fact exists. Arnold v. Village of Chicago Ridge (1989), 181 Ill. App. 3d 778, 785.

After reviewing the pleadings and the documents strictly against Torres, we conclude that a genuine issue of material fact remains. Doctors Torres and Lugay were Joseph’s attending physicians during his December 5, 1979, hospitalization. Reasonable persons could draw different conclusions as to who was responsible for the failure to diagnose and treat Joseph’s bacterial meningitis during that hospital admission. Thus, a triable issue of fact exists as to the liability of defendant Torres, which precludes summary judgment.

The summary judgment in favor of defendant Torres is, therefore, reversed and the case is remanded to the trial court for further.proceedings.

Reversed and remanded.

WHITE, J., concurs.

McNAMARA, J., specially concurs.

JUSTICE McNAMARA,

specially concurring.

I agree with the majority holding that triable issues of fact remain as to Dr. Torres’ liability. However, I believe it would better assist the trial court on remand if the supporting facts found in the record were detailed, particularly because the briefs here and the arguments before the trial court skimmed over or distorted those facts.

Defendant Dr. Torres relies almost exclusively on his serious mischaracterization of Dr. Mendelsohn’s testimony. Dr. Torres argues that Dr. Mendelsohn opined the only negligence was failure to order a spinal tap on the single day of December 5, 1979, and that Dr. Mendelsohn testified Dr. Torres was not obligated “to order a spinal tap for the child at a later date.”

Counsel did preface several questions with the preposition and date, “on December 5, 1979.” However, throughout the entire record, the parties, witnesses and attorneys consistently used the phrase “December 5th admission" to mean the entire hospitalization period from December 5 through December 11. Dr. Mendelsohn does not separate the 24 hours comprising December 5 from the remainder of the hospital stay. Dr. Mendelsohn uses phrases such as “in December the 5th admission”; “in that hospitalization”; “the second admission”; “during either of his admissions”; and “until the December admission.”

The attorneys used similar phrases: “during the admission of 12-5-79”; “during the child’s second admission of December 5, 1979”; “the hospitalization of 12-5-79”; and “during that hospitalization.” Thus, it is grossly inaccurate to narrow the focus of Dr. Mendelsohn’s testimony to December 5.

Most significantly, Dr. Mendelsohn focused heavily on the duration and continuing nature of the illness. He opined that each passing day caused further brain damage. Dr. Mendelsohn’s notes and testimony consistently reflect his opinion that the “lumbar puncture should have been done in that [second] hospitalization.” He never limits the time for performing the lumbar puncture to the single day of December 5. Notably, he believed that even as late as the discharge date of December 11 a spinal tap would have revealed the proper diagnosis and prevented the irreversible brain damage. “[On December 11] he still had meningitis, [and] even at that time had a spinal tap been done, it would have shown meningitis.” (Emphasis added.)

Dr. Mendelsohn explained that the symptoms “went on from November the 23rd to December the 5th. That’s pretty long.” Any time after that, defendants should have known a spinal tap was essential. “[A]fter you get much past a week or even less than a week with those kinds of symptoms going on *** that’s the time to do a spinal tap. Every book says the same thing.” (Emphasis added.) Dr. Mendelsohn repeatedly emphasized that the disease caused progressive brain damage. It was not a case of, e.g., a single blow to the head causing irreversible brain damage at the moment of impact.

The overall record shows Dr. Mendelsohn restricted the critical time to December 5 only as to preventing “further” or even “any” brain damage:

“Q. At what point do you feel that proper antibiotic treatment could have prevented any brain damage?
A. Well, I think that the antibiotic treatment if given on the 5th would have prevented further brain damage.” (Emphasis added.)

Thus, a spinal tap should have been done “right at the beginning” of that hospitalization. December 5 was the earliest Dr. Mendelsohn believed the applicable standard of care mandated a spinal tap. December 5 was not by any means the only or the latest date on which a lumbar puncture was medically indicated. Joseph simply did not suffer “any irreversible brain damage” prior to December 5, but progressively suffered damage each day following December 5.

“Dr. Mendelsohn: *** [H]e didn’t suffer any brain damage before he had the severe period of irritability and lethargy. I would say that at that point the brain damage began ***.
184 111. App. 3d 589
I think that the brain damage that started on the 5th continued to progress and that’s what was responsible for his later symptoms.
Q. Is it your belief *** [that this child] was undergoing a continuing process of brain damage because of *** meningitis?
A. Sure, sure, because that is not at all unusual.” (Emphasis added.)

Thus, the trial court erred in its finding that “Dr. Mendelsohn clearly testified that Dr. Torres was negligent only if he participated in the December 5th admission to the plaintiff.” In fact, Dr. Mendelsohn's affidavit, opining that based on a reasonable degree of medical certainty Dr. Torres’ care of Joseph was not consistent with the applicable standard of patient care, and his deposition testimony cited here strongly contradict defendants’ expert’s opinion that Dr. Torres met the standard of care.

Dr. Torres maintains that Dr. Mendelsohn erroneously believed Dr. Torres was responsible for the actual decision to admit Joseph to the hospital on December 5. Dr. Mendelsohn did not limit the responsibility of defendants to one day. As already shown, when Dr. Mendelsohn said he held Drs. Torres and Lugay “both responsible for that December 5th admission,” he was referring to the entire hospital stay. This conclusion is strongly corroborated by the testimony of Drs. Torres and Lugay.

On December 4 Dr. Torres understood that both he and Dr. Lugay were assuming the care of Joseph. “The responsibility was on both.” The complaint alleges that Dr. Torres had Joseph under his care and treated Joseph after November 1979. Dr. Torres agreed. He testified that he was treating Joseph throughout December 1979, starting December 4. Dr. Lugay also agreed: “We both had primary responsibility” for Joseph during his hospital stay. “We have an equal familiarity and responsibility.”

Significantly, on December 5 Dr. Lugay notified Dr. Torres of Joseph’s admission to the hospital. They discussed Joseph and other patients, “telling each other the follow-up, what was going on in the hospital,” according to Dr. Torres. Dr. Torres reviewed the history and admission notes before seeing Joseph on December 6, along with the hospital records for the first admission, indicating the duration of the illness. Dr. Torres wrote orders for tests, diet changes and medication during the hospital, stay, and wrote the discharge report. Dr. Torres also implied that both doctors were equally responsible for identifying signs of meningitis: “We did not have *** any other neurological symptoms that two experienced pediatricians would have picked up at the time

Summary judgment in favor of Dr. Torres was inappropriate.

       Justice McNamara participated in this opinion prior to his assignment to the sixth division.


author: PRESIDING JUSTICE MURRAY

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. WILLIAM BROCK et al., Defendants-Appellants.
    First District (5th Division)
    No. 1—86—1720
    Opinion filed June 9, 1989.

      Richard Stopka, of Chicago, for appellant William Brock.
    Cecil A. Partee, State’s Attorney, of Chicago (Inge Fryklund and A1 Tomaso, Assistant State’s Attorneys, of counsel), for the People.
   PRESIDING JUSTICE MURRAY

delivered the opinion of the court:

Defendant William Brock appeals from his conviction, after a bench trial, of one count of delivery of a controlled substance. Defendant, along with codefendant Michael Huminsky and other codefendants, was indicted on one count of calculated criminal drug conspiracy and one count of delivery of a controlled substance arising from events occurring on April 17, 1984 (indictment No. 84 — 7334). Defendant, along with Huminsky, was also charged with the same two offenses arising from occurrences on April 20, 1984, in a separate indictment (No. 84 — 7332). Both Brock and Huminsky filed a notice of appeal which this court subsequently severed. This opinion therefore concerns only defendant Brock’s appeal.

The following facts are relevant to this appeal. Prior to trial, the State moved to consolidate cases Nos. 84 — 7332 and 84 — 7334. Defendant’s counsel agreed but informed the court that the cases involved several factual situations which should be kept separate, to which the court asserted that it would have no problem keeping the cases separate. The motion to consolidate was granted at the end of the bench trial.

Testimony was heard from Illinois State Police Special Agents Daniel Callahan and Osborn Curtis. There were no defense witnesses. Agent Callahan testified that, on April 17 while working undercover in a resale shop, he received a telephone call from codefendant Mike Wilson asking if he wanted to purchase IV2 ounces of cocaine for $3,100. Defense counsel objected to Callahan relaying the content of conversations with the other codefendants. The court ruled that it would allow the conversations to establish a conspiracy; if no conspiracy was proved, the testimony would be stricken. Callahan then testified that he, Agent Curtis, and Wilson drove to Michael Huminsky’s apartment in Rolling Meadows. In the car, Wilson told the agents that Mike Huminsky would take them to “Judo.”

While Agent Curtis remained in the car, Wilson and Agent Callahan entered the apartment and saw Mike Huminsky, his brother Bill Huminsky, and an unidentified woman. Callahan identified the two brothers at trial after being confused initially because they had both changed their hair styles since their arrests. Agent Curtis also identified the Huminsky brothers at trial. Mike Huminsky made a phone call and then informed the others that “Judo” had said the cocaine was not yet ready. Mike Huminsky then demanded to see the money and all three codefendants accompanied Callahan to the car and were shown the money.

Wilson and the agents then went for something to eat, returning to the apartment an hour later. The agents, accompanied by the Huminskys and Wilson, then went to another apartment in Palatine. Wilson and the Huminsky brothers entered the apartment building while the agents remained in the car. Subsequently, Mike Huminsky returned to the car and gave a bag of white powder, later identified as cocaine, to Callahan in exchange for $3,100.

Three days later, on April 20, Mike Huminsky offered to arrange another sale of V-k ounces of cocaine to Callahan. Approximately the same sequence of events occurred during the'second buy, with Callahan and Curtis first going to the Rolling Meadows apartment where Mike Huminsky made a phone call and told Callahan that Judo had said the cocaine was not yet ready. Later, the two agents, accompanied only by Mike Huminsky, went to the same Palatine apartment building they had driven to on April 17. Once there, Curtis stayed in the car while Callahan and Mike Huminsky entered the building and rang a doorbell with the name “Bertagnoli” on it. They were met in the apartment by a man introduced as Judo, whom Callahan identified in court as defendant Brock. Judo, who was armed, searched Callahan and then gave the agent a bag of white powder, later identified as cocaine, in exchange for $3,100. After the transaction, Judo identified himself as William Brock and gave Callahan a business card with that name on it. The agent also observed a scale with white powder on it in the apartment. Later, Callahan marked this second bag of powder with the name of “James Bertagnoli alias Judo.”

The trial court denied defendant’s motion for a directed verdict, which was based on the ground that the cocaine was received from Bertagnoli, not defendant. The court also concluded that the State had established a conspiracy and allowed the codefendants’ statements to stand. After noting that there was no doubt that Michael Huminsky was guilty of all counts of conspiracy and delivery on both dates (although the conspiracy charges could not be sustained since the court found no other codefendants guilty of conspiracy), the court found that the State had failed to prove its case as to defendant Brock except for delivery of a controlled substance on April 20 (case No. 84 — 7332). Defendant was sentenced to a mandatory term of six years.

On appeal, defendant Brock contends that (1) the trial court erred by consolidating the two indictments against all codefendants, thus considering all of the “other crimes” evidence against defendant; (2) defendant’s guilty verdict must be reversed because it was based on inadmissible hearsay (codefendants’ statements); and (3) the State failed to prove its case beyond a reasonable doubt. We affirm defendant’s delivery conviction for the following reasons.

First, we note that the record contains no post-trial motions by defendant Brock. Both an objection at trial and a written post-trial motion are required to preserve an issue for review; thus, absence of a written motion waives that issue on appeal. (People v. Enoch (1988), 122 Ill. 2d 176.) However, even had no waiver occurred, we would still affirm defendant’s conviction.

Defendant’s claim that the trial court erred by consolidating the two indictments against defendant and then considering the evidence relating to both indictments in finding him guilty of one count of the first indictment is without merit for several reasons. There is a presumption that a trial court relied only on proper evidence in reaching its conclusion. (People v. Berland (1978), 74 Ill. 2d 286.) Where guilt is manifestly shown, there must be more than a mere suspicion that a trial court considered improper evidence so as to refute the presumption. People v. Delno (1966), 35 Ill. 2d 159.

In the present case, there is no indication that the court considered evidence concerning case No. 84 — 7334 in finding defendant guilty of delivery in case No. 84 — 7332. The court did state, after finding that the State had proved the existence of a conspiracy, that it would consider the evidence in both cases as to each defendant. However, in light of the court’s assurance that it would have no difficulty in keeping the cases separate, its additional statement that defendant’s conviction in No. 84 — 7332 was based on the fact that he searched Agent Callahan and then sold drugs to him on April 20, and its finding that the evidence was insufficient to convict defendant in No. 84 — 7334, it is clear that the court considered only proper evidence in reaching its conclusion.

Similarly, defendant's hearsay objections must also fail. It is well settled that coconspirators’ statements, made during and in furtherance of a conspiracy, are admissible once a prima facie case of conspiracy has been independently established, even when there is no conspiracy indictment. (People v. Goodman (1980), 81 Ill. 2d 278.) The prima facie case must be established by a preponderance of nonhearsay evidence (People v. Cortes (1984), 123 Ill. App. 3d 816) and must show that two or more persons were engaged in a common plan to accomplish a criminal goal or to reach a common end by criminal means (People v. Pintos (1988), 172 Ill. App. 3d 1096). Moreover, the existence of the agreement can be inferred from surrounding facts and circumstances. People v. Katsigiannis (1988), 171 Ill. App. 3d 1090.

Whereas defendants in this case were charged with calculated drug conspiracy, which requires three conspirators (Ill. Rev. Stat. 1983, ch. 56½, par. 1405(b)(2)), there is ample evidence indicating that a simple conspiracy involving two conspirators existed on April 20 when Mike Huminsky and defendant were engaged in a joint venture to sell drugs to Callahan. (See Ill. Rev. Stat. 1983, ch. 38, par. 8 — 2(a); see also People v. Pintos (1988), 172 Ill. App. 3d 1096 (prima facie case of conspiracy shown so as to allow coconspirators’ statements even though defendant was found not guilty of calculated criminal drug conspiracy).) The facts of this case sufficiently establish a prima facie case so as to allow the use of coconspirators’ statements.

In any event, it is obvious that the trial court did not rely on the objected-to statements in convicting defendant on the April 20 delivery charge. Rather, it concluded that defendant was guilty on the basis of Callahan’s testimony that he met defendant, was searched by defendant, who was armed, and then received cocaine from defendant in exchange for money. Therefore, there was no error. Nor was it error to permit Callahan to respond on cross-examination that he had marked a bag of white powder with the name “Judo” when defense counsel elicited the information and where the testimony concerned the foundation for the chain of custody of evidence. The same reasoning applies to Callahan’s testimony regarding the name “Bertagnoli” on the doorbell to the apartment where the April 20 transaction occurred. Such evidence was admissible since it was offered to show investigatory procedure and not offered to show that “Bertagnoli” lived in the apartment.

Defendant’s final argument is that he was not proved guilty beyond a reasonable doubt. This argument is destitute of substantive merit. The court relied on Callahan’s unequivocal identification of defendant as the person who sold cocaine to him. Defense counsel did not cross-examine the agent regarding the identification. It does not matter what name was used to describe defendant — Judo or Brock— since Callahan positively identified him as the cocaine seller. Viewing the evidence in the light most favorable to the prosecution (see People v. Collins (1985), 106 Ill. 2d 237), the direct evidence that defendant sold cocaine to Agent Callahan on April 20 is overwhelming, thus negating the need to be buttressed by additional circumstantial evidence (e.g., nonintroduction of business card defendant gave to agént), as urged by defendant.

Accordingly, defendant’s conviction for delivery of a controlled substance in No. 84 — 7332 is affirmed.

Affirmed.

LORENZ and PINCHAM, JJ., concur.


author: JUSTICE PINCHAM

text:
    AMERICAN FIDELITY FIRE INSURANCE COMPANY, Plaintiff-Appellee, v. GENERAL RAILWAY SIGNAL COMPANY, Defendant-Appellant.
    First District (5th Division)
    No. 1—87—0782
    Opinion filed June 9, 1989.

      Martin M. Ruken, Guy V. Croteau, and Michael P. Greenwald, all of Vedder, Price, Kaufman & Kammholz, of Chicago (Hess, Kaplan & McDowell, Ltd., of counsel), for appellant.

      William I. Goldberg and Lori A. Goldstein, both of Holeb & Coff, of Chicago, for appellee.
   JUSTICE PINCHAM

delivered the opinion of the court:

Defendant, General Railway Signal Company (Railway Signal) appeals from a $803,500 judgment, plus pre- and post-judgment interest, in favor of plaintiff, American Fidelity Fire Insurance Company (AFFI). Plaintiff has cross-appealed from the trial court’s post-trial order reducing the amount of the judgment to $683,500, with pre- and post-judgment interest. For the following reasons, we affirm.

On March 27, 1979, Transit Systems Technology, Inc. (Transit Tech.), entered into a contract with Jamaica Buses, Inc. (Jamaica Bus), a private transit system in Long Island, New York. Transit Tech, was to install 160 electronically registering bus fareboxes and certain ancillary equipment for Jamaica Bus for the sum of $360,000. Jamaica Bus required a performance bond from Transit Tech., and on June 7, 1979, Transit Tech, and its principal owners, Jimmy H. Gomez and Jose E. Davila, executed a general agreement of indemnity in favor of plaintiff, AFFI, as a condition to AFFI acting as surety on the performance bond. Also, on the same day, June 7, 1979, the United States Small Business Administration (SBA) issued a surety bond guaranty agreement, in which SBA agreed to reimburse AFFI up to 80% of its loss, if any, on the bond in favor of Jamaica Bus.

On July 3, 1979, Transit Tech, delivered to Jamaica Bus its performance bond in the amount of $360,000 and Jamaica Bus made a payment of $36,000 to Transit Tech., thereby leaving a contract balance of $324,000.

On October 15, 1979, Transit Tech, entered into two contracts with and to provide the Orange County, California, Transit District 180 electronically registering bus fareboxes and other specified equipment, for the sum of $463,500, plus tax. Like Jamaica Bus, Orange County Transit District also required performance bonds from Transit Tech, and AFFI became the surety on these performance bonds. However, AFFI required letters of credit in the amount of $120,000 as a condition to writing these performance bonds.

On November 9, 1979, the SBA issued two surety bond guarantee agreements, by the terms of which SBA agreed to reimburse AFFI up to 80% and 90% of its loss, if any, on Transit Tech.’s performance bonds to Orange County Transit District. Accordingly, on November 16, 1979, Transit Tech, issued to Orange County Transit District, Transit Tech.’s performance bonds in the amount of $463,500 and on November 19, 1979, Orange County Transit District made a payment of $122,827.50 to Transit Tech., thereby leaving a contract balance of approximately $368,482.50.

In 1979, the defendant, Railway Signal, a subsidiary of a publicly held company whose principal business was the manufacture and sale of control and signalling systems for railroads and the rail transit industry, began investigating ways to enter the bus farebox manufacturing and installation business. The business development manager of defendant Railway Signal, Wheeler D. Maynard, learned from another farebox manufacturing company that Transit Tech, had new technology and had contracts with Orange County Transit District and Jamaica Bus to install electronically registering fareboxes on their buses.

In the summer of 1980, Transit Tech, encountered financial difficulties which prevented it from producing its electronic fareboxes. Also in the summer of 1980, Maynard spoke with an Orange County Transit District official and learned the amount of the Orange County Transit District’s contract orders with Transit Tech, and that Transit Tech, had not delivered the 180 electronically registering bus fare-boxes to Orange County Transit District. Thereafter, on August 22,. 1980, Maynard went to Kankakee, Illinois, where Transit Tech, was located. There Maynard met with Transit Tech, principals Gomez and Davila and Transit Tech.’s attorney, Lester Thacker. Maynard informed Transit Tech, that defendant Railway Signal was planning to enter the bus farebox manufacturing and installation business and that Railway Signal might be interested in Transit Tech.’s technology and contracts. At that time, Maynard received and reviewed the first pages of the Orange County Transit District and the Jamaica Bus contracts with Transit Tech.

On September 27, 1980, Transit Tech, failed to deliver the bus fareboxes to Orange County Transit District and was placed in default on its contracts with Orange County Transit District.

Thereafter, on November 5, 1980, after negotiating with Transit Tech, principals Gomez, Davila and attorney Thacker, for the purchase of certain of Transit Tech.’s assets, defendant Railway Signal and Transit Tech, entered into four contracts: (1) an agreement of purchase between Railway Signal and Transit Tech., whereby Railway Signal acquired from Transit Tech, a patent to the “fare collection system” and various enumerated personal property, including documents, computer programs, drawings, four prototype fareboxes, a truck and miscellaneous materials; (2) a noncompetition agreement between Railway Signal, Transit Tech., Gomez and Davila; (3) a consulting agreement between Railway Signal and Gomez; and (4) a consulting agreement between Railway Signal and Davila.

On November 12, 1980, Railway Signal business development manager Maynard and Railway Signal’s attorney David Kunkel met with American Fidelity Fire Insurance Company attorneys, Richard Wisner and Robert Heyne, to discuss Railway Signal performance on Transit Tech.’s contracts. A “three party relet” agreement was discussed, in which Orange County Transit District, Railway Signal and AFFI would be contracting parties.

In February of 1981, Transit Tech, was placed in default of its Jamaica Bus contract for failure to deliver fareboxes to Jamaica Bus. Subsequently, in late February 1981, Jamaica Bus filed suit against AFFI under the performance bond.

On March 2, 1981, Railway Signal sent to Jamaica Bus a new contract which increased the contract price to $474,000 from the previously agreed $324,000. Also, on March 27, 1981, Railway Signal sent AFFI and Orange County Transit District Railway Signal’s new third-party agreement for Orange County Transit District which increased the contract price to $417,500 from the previous contract balance of $368,000.

In June of 1981, plaintiff AFFI drew on Orange County’s letter of credit and on July 14 and July 17, 1981, paid to Orange County Transit District $463,500, the arilount of the contract between Orange County Transit District and Transit Tech.

Subsequently, AFFI filed a four-count complaint against Railway Signal. Count I of the complaint sought damages for Railway Signal’s alleged breach of its November 5, 1980, contracts. In count I AFFI alleged that Railway Signal agreed to perform Transit Tech.’s obligations under the Orange County Transit District and Jamaica Bus contracts and that AFFI succeeded to the rights of Transit Tech., Gomez and Davila by reason of the general agreement of indemnity. In count II, AFFI claimed damages as a third-party beneficiary of the November 5, 1980, contracts. In counts III and IV, AFFI pleaded promissory estoppel and breach of an oral contract.

Defendant Railway Signal answered the complaint, alleging (1) that Railway Signal’s promise to Gomez and Davila contained in the consulting agreement concerning Orange County Transit District and Jamaica Bus contracts was not a promise to perform the contracts, (2) that Gomez and Davila failed to perform conditions precedent to Railway Signal’s obligation to take over Transit Tech.’s performance of the Orange County Transit District and Jamaica Bus contracts, (3) that Transit Tech., Gomez and Davila waived any performance due from Railway Signal with respect to the Orange County Transit District and Jamaica Bus contracts because conditions precedent to Railway Signal’s performance did not occur, and that as an indemnitee, AFFI was owed no performance by Railway Signal, (4) that AFFI failed to perform the condition precedent and that AFFI caused the nonperformance of which it complained, (5) that AFFI waived any right it had to performance of the Orange County Transit District and Jamaica Bus contracts, and (6) that neither Orange County Transit District nor Jamaica Bus ever approved of the assignment of their contracts to Railway Signal for performance as required by the Orange County Transit District and Jamaica Bus contracts, and accordingly, Railway Signal had no right or duty to perform these contracts.

During the jury trial, defendant Railway Signal’s motions for a directed verdict at the close of plaintiff AFFI’s case, and again at the conclusion of all the evidence, were denied. The jury returned a verdict on count I against the defendant Railv/ay Signal in the amount of $803,500. On October 10, 1986, the trial court entered judgment in favor of plaintiff AFFI and against defendant Railway Signal in the amount of $803,500, plus $168,793 prejudgment interest.

On December 9, 1986, Railway Signal filed post-trial motions for (1) arrest of judgment, (2) judgment notwithstanding the verdict, (3) a new trial, (4) a new trial as to damages only, and (5) for a remittitur. The trial court granted defendant Railway Signal’s motion for a remittitur in the sum of $120,000, the amount plaintiff AFFI received on the letters of credit and prejudgment interest, and denied Railway Signal’s other post-trial motions.

On appeal, defendant Railway Signal maintains that because the conditions precedent to its performance of the Orange County Transit District and Jamaica Bus contracts did not occur, the trial court should have directed a verdict or entered a judgment notwithstanding the verdict on count I of AFFI’s complaint.

Count I of AFFI’s complaint alleged that Railway Signal “agreed to complete the performance of [Transit Tech.] under the Jamaica and Orange County contract for the balance of the contract prices” and that “[u]nder the terms of the General Agreement of Indemnity” AFFI succeeded to the rights of Transit Tech., Gomez and Davila.

Railway Signal argues that for it to be liable to perform the Orange County Transit District and Jamaica Bus contracts for the balance of the contract prices “the contracts had to be assigned or new contracts executed directly with the bonding company [AFFI] or the Transit property.” We disagree. Railway Signal cannot now avoid its contractual obligations when it prevented the assignment of the Orange County Transit District and Jamaica Bus contracts.

This court in Dayan v. McDonald’s Corp. (1984), 125 Ill. App. 3d 972, 466 N.E.2d 958, examined and reviewed the duty of a contracting party to use reasonable efforts to bring about the occurrence of a condition precedent. In Dayan the court stated:

“In Illinois, *** a covenant of good faith and fair dealing is implied in every contract absent express disavowal. [Citation.] * * *
This principle is demonstrated in a series of Illinois cases examining the duty of a contracting party to use reasonable efforts to bring about a condition precedent. [Citation.] *** [T]he contractual obligation of one party was contingent upon a condition peculiarly within the power of that party ***. Thus the controlling party could have avoided incurring any contractual obligation by refusing to bring about the relevant condition. In each case, the court held that the controlling party’s discretion was limited by the implied covenant of good faith and therefore the party was obligated to use reasonable efforts to bring about the condition. * * *
As the above authorities demonstrate, the doctrine of good faith performance imposes a limitation on the exercise of discretion vested in one of the parties to a contract. [Citation.] In describing the nature of that limitation the courts of this State have held that a party vested with contractual discretion must exercise that discretion reasonably and with proper motive, and may not do so arbitrarily, capriciously, or in a manner inconsistent with the reasonable expectations of the parties. [Citation.]” 125 Ill. App. 3d at 990-91.

In the case at bar, it was Railway Signal which prevented the Orange County Transit District and Jamaica Bus contracts from being assigned or new contracts from being executed for the balances of the contract prices. Therefore Railway Signal has, by its own actions, prevented the performance of a condition and may not now complain that the nonperformance of the assignment of the Jamaica Bus and Orange County Transit District contracts precluded Railway Signal’s liability. Barrows v. Maco, Inc. (1981), 94 Ill. App. 3d 959, 419 N.E.2d 634.

The consulting agreements provided that the consultants, Davila and Gomez, Transit Tech.’s principals, were to “serve as a nonexclusive agent[s] for Railway Signal in the solicitation of sales to be made by Railway Signals of certain Revenue Collection Systems.” Paragraph 3 of the consulting agreement acknowledged Railway Signal’s desire to enter into contracts for the sale of the systems which were previously awarded to Transit Tech. Paragraph 3 specifically provided:

“[General Railway Signal] is *** desirous of entering into contracts for sales of Revenue Collection Systems which were previously awarded or sought by Transit [Tech.] ***, and which have since been terminated by the buyer(s), or not awarded to Transtec [Transit Tech.]. Particular contracts and estimated amounts of Revenue Collection Systems to be sold thereunder are set forth in Appendix B (the ‘Contract’).” (Emphasis added.)

Appendix B provided:

“CONTRACTS TO BE DELIVERED:
1. Fare Collection System Contract with Jamaica Bus, Inc. of Jamaica, New York. ***
2. Fare Collection System Contract with Orange County Transit District of Orange County, California. *** * * *
General Railway Signal Company *** agrees to enter into contracts to perform the foregoing contracts either by assignment or directly with the Transit Property or with the bonding company [AFFI\ upon the same terms, conditions and specifications as contained in the said contracts with each respective Transit Property, or upon such terms, conditions and specifications as may mutually be agreeable to GRS and the respective Transit Property subject to the following conditions:
(a) GRS [Railway Signal] is given at least (6) months within which to complete the said contracts commencing with January 1,1981.
(b) GRS [Railway Signal] shall not be liable for any damages or penalties which may be due the Transit Property by reason of untimely performance or delay in performance; all of said damages in the nature of penalties shall remain the sole and exclusive obligation of Transit Systems Technology, Inc., an Illinois Corporation. GRS [Railway Signal] acknowledges receipt of copies of said contracts and is aware of the terms and conditions therein. GRS [Railway Signal] further agrees that notwithstanding the amount of the contract stated therein that GRS [Railway Signal] shall perform Orange County, Califor nia and Jamaica, New York the contracts for the amounts due thereon provided the foregoing conditions have been complied . with.” (Emphasis added.)

Paragraph 5(c) of the consulting agreement provided that the consulting agreement was to terminate on “Dec. 31, 1980, in the event none of the contracts in Appendix B” were signed by that date. Railway Signal’s manager of business development, Maynard, testified that he understood the contracts referred to in paragraph 5(c) of the consulting agreement were contracts to be executed between Railway Signal and the transit districts, Jamaica Bus and Orange County Transit District. Railway Signal’s attorney in the transaction, Kunkel, advised Maynard that the November 5, 1980, contracts and specifically appendix B of the consulting agreement imposed upon Railway Signal a good-faith duty to negotiate with Jamaica Bus and Orange County Transit District for the assumption and performance of the Jamaica Bus and Orange County Transit District contracts for the balance of the contract prices. Kunkel testified:

“My understanding of that paragraph [in Appendix B of the consulting agreement] which I had at that time and which is not substantially changed is that that paragraph as it runs over on to the next page created in GRS [Railway Signal] a good faith obligation to negotiate for the assumption of those contracts, if possible, if it entered into those contracts, then to perform them, if possible, and to pay these consultants the commission that would then be accrued on them in terms of the rest of the agreement.” (Emphasis added.)

Railway Signal was in communication with both Jamaica Bus and Orange County Transit District. The two transit districts were aware that Railway Signal had agreed to enter into agreements with the transit districts for the performance of the Jamaica Bus and Orange County Transit District contracts. Prior to the contract closing, Maynard met and talked several times with the general manager of Orange County Transit District, Jim Reichert, regarding Railway Signal’s performance of the Orange County Transit District contract. Also, during November 1980, Jamaica Bus requested that Railway Signal provide a letter expressing Railway Signal’s willingness to perform the Jamaica Bus contract.

On November 11, 1980, Railway Signal business development manager Maynard wrote a letter to Harold Hershenhart, the owner and general manager of Jamaica Bus. The letter stated:

“On Wednesday of last week, General Railway Signal Company completed the purchase of the Transtec Fare Collection System design and patent rights. GRS [Railway Signal] intends to commence the manufacture of the Transtec Fare Collection System in the Chicago, Illinois area through a new Business Division of General Railway Signal Company.
I understand that Jamaica Buses, Inc. has an outstanding and uncompleted order for Fare Collection Systems that they placed with Transit Systems Tech, Inc. GRS [Railway Signal] would like to work out arrangements with you to either transfer that order to General Railway Signal Company or to enter a new order for the same equipment purchased from GRS [Railway Signal]. I would propose that GRS [Railway Signal] enter into that order for the remaining unpaid portion of the purchase price, which I understand would be approximately $252,000. GRS [Railway Signal] would expect to supply substantially the same product as you were expecting from Transit Systems Tech, Inc. on substantially similar terms for deliveries commencing July 1, 1980. The reason I say substantially is because we have not yet had time to review the contract documentation in detail, and not because I have any significant reservations about the present terms. * * *
GRS [Railway Signal] would expect to supply, with any firm quotation and contract proposal, a performance bond for the full value of your order. I would be pleased to meet with you at your earliest convenience to get better acquainted and to work out the details for a specific contract.” (Emphasis added.)

On November 12, 1980, Maynard and Railway Signal attorney Kunkel met with AFFI’s attorneys, Wisner and Heyne, to discuss Railway Signal’s performance of Transit Tech.’s contracts. AFFI’s attorneys advised Railway Signal that an extended delivery schedule would not be a problem for either of the transit districts and that Railway Signal would not be liable for any liquidated damages because, if such a claim were made, AFFI would assume responsibility for it. Also at the meeting the participants decided that since Orange County Transit District had declared a default, the method for documenting Railway Signal’s assumption of the Orange County Transit District contract would be a “three-party relet” agreement with AFFI, Railway Signal and Orange County Transit District. At the end of the meeting, it was decided that AFFI’s attorney, Heyne, would draft the relet agreement and that Kunkel would send to Heyne standard clauses regarding risk of loss and time of the essence for insertion into the relet agreement.

After the meeting, Heyne drafted the relet agreement, without the clauses to be furnished by Railway Signal’s attorney, Kunkel. Several days later, Heyne phoned Kunkel inquiring about the clauses he still had not received. Kunkel informed Heyne that he had been busy and would get to it in the next several days.

On December 1, 1980, Maynard wrote Hershenhart, the owner and general manager of Jamaica Bus, a letter in which Maynard stated:

“We have reviewed the Terms and Conditions portion of that [Jamaica] contract, and I have concluded that we will be able to substantially meet the intent and purpose of that contract. However, I do not believe that we can escape from language revisions to make it more consistent with normal commercial practice. I appreciate this will force both of us into a new legal revision before concluding the contract, but in the long run I believe we will all be better off where our respective rights and responsibilities are unambiguously defined.”

On December 4, 1980, without receiving the clauses in regards to the Orange County District Court contracts from Kunkel, Heyne sent the drafted relet agreement for the Orange County Transit District contract to Michael Bassin, litigation claims counsel of AFFI. Also during this period Bassin spoke with Orange County Transit District’s attorney, Kennard Smart, and with Heyne about the relet agreement.

On January 15, 1981, Heyne sent a letter to Kunkel, requesting that Kunkel forward the clauses for insertion into the Orange County Transit District relet agreement. The letter specifically stated:

“Both the District and American Fidelity Fire Insurance Company are anxious to complete their contract. Your immediate attention to this matter is anticipated and appreciated.”

On that same day, January 15, 1981, Kunkel sent a draft of a two-party agreement. The draft referred to General Farebox, Inc., Railway Signal’s subsidiary, as the seller of the farebox system but did not identify a purchaser, the surety, the equipment, price or delivery dates.

On February 11, 1981, Heyne incorporated Kunkel’s clauses into the Orange County relet agreement and sent another draft to Kunkel.

On March 2, 1981, James Pacelli, the vice-president and general manager of Railway Signal’s newly formed farebox manufacturing subsidiary, forwarded a contract proposal to Jamaica Bus. The letter stated: “With respect to the pricing, Railway Signal would propose to furnish 160 fareboxes at a unit price of $2,025 and the off-bus ancillary equipment, as described in the specifications, at a price of $150,000. This relates to a total price of $1^71^,000 exclusive of shipping charges and any applicable taxes.” That price represented an increase of $150,000 over the $324,000, which was the remaining balance of the Jamaica Bus contract price.

On March 27, 1981, Kunkel sent a new three-party agreement for Orange County Transit District which increased the contract price to $417,500 from the previously agreed balance of $368,000. When AF-FI’s attorney, Wisner, received the new proposed agreement from Kunkel containing the increased price, he phoned Kunkel. Kunkel explained that the price increase was necessary because Maynard had not known that $122,827.50 had already been paid by Orange County Transit District on the contract. However, appendix B of Gomez and Davila’s consulting agreement specifically stated that $122,827.50 had been paid. Furthermore, Maynard acknowledged that he knew that the $122,827.50 had been paid.

The record clearly establishes that Railway Signal did not make offers to the transit districts at any time to perform the Orange County and Jamaica Bus contracts on the terms, conditions and specifications contained in those contracts. Railway Signal failed to submit any terms or written offers to Jamaica Bus until March 2, 1981. Then, its offer was in the form of a new contract with an increased price of $474,000, $150,000 over the contract balance remaining. As to Orange County, Railway Signal’s first proposal did not come until March 27, 1981. Then, it was in the form of a new agreement with an increased price of $417,150, approximately $50,000 over the remaining contract balance.

The evidence established that Railway Signal defaulted on the November 5, 1980, contract by breaching its good-faith duty to perform its obligations thereunder; Railway Signal cannot now complain that it did not obtain the assignments which it prevented. The trial court’s denial of Railway Signal’s motions for a directed verdict and for judgment notwithstanding the verdict was proper and the judgment in favor of AFFI on count I is affirmed.

Secondly, Railway Signal argues that the trial court erred in not granting its post-trial motion for a new trial on damages. Railway Signal maintains that it is entitled to a new trial on damages because AFFI failed to mitigate its damages. AFFI, however, argues that upon Railway Signal’s breach of contract, AFFI was not required to accept Railway Signal’s offer to perform the original contract on new or modified terms and that Railway Signal cannot limit its damages to only those which would have resulted if that offer had been accepted.

Where, as in the instant case, the trial court has denied a motion for a new trial, the reviewing court will not disturb the jury’s verdict unless the verdict was against the manifest weight of the evidence. (Snedden v. Lavenka (1981), 92 Ill. App. 3d 979, 416 N.E.2d 1097.) In the instant case, Railway Signal has failed to meet the manifest weight of the evidence standard that it must satisfy to upset the jury’s verdict where the trial court has denied a motion for a new trial.

Railway Signal’s mitigation argument is that the contract balances were not utilized by AFFI. However, Railway Signal introduced very little evidence concerning the application of the contract balances, and the evidence that was presented does not establish that the jury’s verdict was against the manifest weight of the evidence.

Wisner testified that the surety was entitled to apply the contract balances; that he was certain that the contract balances had been taken into account in making the payments; and that, hypothetically, if Orange County Transit District could have obtained the electronic fareboxes which Transit Tech, had promised to deliver for the funds left in the contract, there would have been no damages. But, Orange County Transit District did not obtain the electronic fareboxes at all. As Maynard testified, the fareboxes which Railway Signal sold Orange County Transit District in late 1981 were mechanically registering fareboxes manufactured by Keene Corporation (which had been acquired by Railway Signal). This was the technology which Maynard had considered “obsolete.”

With respect to Jamaica Bus, there were “substantial differences” between the farebox system which Railway Signal sold to Jamaica Bus for $700,000 in 1983 and the system which Transit Tech, had agreed to sell to Jamaica Bus. Also Railway Signal’s argument that “assuming that Orange County used the funds left from the Transtec [Transit Tech.] procurement for its subsequent purchase from General Farebox, there would appear to have been damages to Orange County only to the extent that its total outlay for 180 fareboxes (the payment of $122,827.50 to Transtec, for which it received nothing, and the payment to General Farebox of $463,500, for which it got fareboxes) of $586,327.50 exceeded the amount which it was to pay in the first place for the 180 fareboxes, $491,310. That amount is $95,019.50.” That Orange County Transit District received its fareboxes for $95,017.50 is based on a false premise. Railway Signal ignores the fact that Orange County Transit District did not receive the electronic fareboxes for which it had bargained from Transit Tech.

Consequently, there is no evidentiary basis for Railway Signal’s argument that the amounts paid by the transit districts to Railway Signal for fareboxes show that AFFI breached whatever duty it may have had to apply the contract balances in satisfying the bond claims.

Notwithstanding the lack of evidence, Railway Signal’s counsel argued to the jury that AFFI had not applied the contract balances. The jury did not accept the argument. The trial court upheld the jury’s determination, and we affirm the trial court’s ruling.

Railway Signal’s second mitigation argument is that if its offer to perform the contracts at increased prices had been accepted, the damages would have been lower. Upon Railway Signal’s breach of contract, AFFI was not required to accept Railway Signal’s offer to perform the original contract on new or modified terms and Railway Signal cannot now limit AFFI’s damages to only those which would have resulted if its offer had been accepted.

In Coppola v. Marden, Orth & Hastings Co. (1917), 282 Ill. 281, 118 N.E. 499, Coppola gave a written order to defendant for 40 barrels of a certain brand of olive oil at $1.30 per gallon. The oil was to be delivered within one year, terms 60-day draft with shipment. Subsequently, plaintiff called upon the defendant to deliver five of the barrels of olive oil. Defendant by letter acknowledged receipt of the order for delivery of 5 of the 40 barrels of olive oil, but stated that the European situation had affected the olive oil market, and that the oil quoted plaintiff at $1.30 was then worth $2.50 per gallon. In the letter defendant stated “[hjowever, your order was taken for forty barrels, and, subject to immediate acceptance, we shall deliver this quantity net spot cash. It is the request of our credit department that we allow no credit on oil sold at this low price.” Plaintiff called upon defendant to deliver, as per the terms of their contract, the 40 barrels of olive oil. Defendant refused to deliver plaintiff the oil on credit but offered plaintiff the same oil but only for the cash price of $1.30. Plaintiff refused and purchased the oil from other firms at higher prices. Plaintiff then brought suit against the defendant for the difference between the contract price and the price plaintiff paid for the oil and obtained a judgment for $1,537.50. On appeal, the appellate court reversed the judgment and entered judgment against the defendant for $21.67, the amount of interest at the legal rate upon the price of the oil for a period of 60 days and the length of the credit extended by the contract. Plaintiff thereafter maintained before the supreme court that he was entitled to the difference between the contract price and the market price of the oil, which was $1,537.50. The supreme court held that where the contract provided for plaintiff’s credit purchase of the olive oil, the defendant seller could not legally demand that the purchaser make payment in cash in order to mitigate the purchaser’s damages for the seller’s breach of contract. The court stated:

“[Plaintiff] was under no obligation to pay cash for the oil in order to lessen the damages resulting from defendant’s failure to keep its promise and perform its contract. *** [I\t comes with an ill-grace from a party who has refused to perform the agreement to demand that the other party, who has not been at fault, should do something contrary to the terms of the contract to mitigate or lessen the damages resulting from the refusal to perform the contract.” (Emphasis added.) 282 Ill. at 284-85.

Also in Olsen v. Scholl (1976), 38 Ill. App. 3d 340, 347 N.E.2d 195, the appellate court, citing Coppola, held that the plaintiff was not obligated to make payment prior to or upon delivery when such payment was not required under the contract.

In the case at bar, Railway Signal never offered to perform the contracts for the balances remaining. Railway Signal only offered to provide other equipment on different terms for an additional $200,000. We conclude, as the Coppola court concluded, that “it comes with an ill-grace” for Railway Signal now to say that AFFI’s damages should be limited by the terms of Railway Signal’s offers, which constituted a breach of its obligations.

Railway Signal’s final argument is that Railway Signal is entitled to a new trial because its exhibit 5 was excluded. The standard for reviewing a trial court’s evidence rulings as stated in Laff v. Chapman Performance Products, Inc. (1978), 63 Ill. App. 3d 297, 313, 379 N.E.2d 773, is that: “A trial court’s decision regarding the admissibility of evidence should be reversed only when the court’s discretion has been clearly abused. [Citation.] A trial court properly rejects evidence when such evidence in the trial court is of little probative value or incompetent to prove a matter in issue.”

Railway Signal’s exhibit 5 was a letter dated May 29, 1981, from Smart, the attorney for Orange County Transit District, to David Pines, AFFI’s attorney. The letter was written several months after Railway Signal breached its obligation and offered to supply fareboxes to Orange County Transit District only for an increased price. The letter was offered by Railway Signal to show the amount of liquidated damages paid by AFFI. The trial court properly excluded the letter on the ground that it was not material or probative.

Additionally, Railway Signal’s attempt to introduce the letter was inconsistent with a proposition previously taken by Railway Signal. Before Railway Signal offered the letter, AFFI had sought to introduce the evidence deposition testimony of Orange County Transit District’s attorney Smart to show that Orange County would not have enforced the liquidated damages clauses in the contract if it had received the fareboxes it had ordered. Railway Signal objected to the testimony on the ground that it was speculative. When counsel for both parties agreed that there had been no actual negotiations on the subject of liquidated damages, the trial court ruled that the proposed testimony was speculative. There ensued a colloquy between counsel and the trial court in which it was agreed that (1) Railway Signal would not use Attorney Smart’s testimony except for impeachment, and (2) there was no admissible evidence as to what Orange County Transit District would have done regarding liquidated damages if Railway Signal had performed.

Railway Signal first attempted to introduce attorney Smart’s letter, defendant Railway Signal’s exhibit 5, by showing it to attorney Bassin who had ceased representing AFFI in February 1981. Attorney Bassin could not identify the letter. Then Railway Signal attempted to introduce the letter through the deposition testimony of attorney Smart. The trial court excluded the letter on the grounds of lack of materiality, because the letter did not evidence either that any claim for liquidated damages had been made, or how much," if any, of the money ultimately paid by AFFI was liquidated damages. Railway Signal’s exhibit 5, Orange County Transit District attorney Smart’s letter written after Railway Signal’s breach, was speculative and not probative. As the trial court ruled, the letter did not contain evidence as to whether, and if so, in what amount, liquidated damages were claimed by Orange County Transit District or paid by AFFI.

Moreover, even if the amount paid to Orange County Transit District to satisfy the bond claim included liquidated damages, that amount was paid as a result of Railway Signal’s breach. If Railway Signal had performed, it would not have been responsible for liquidated damages. But Railway Signal’s breach of the November 5, 1980, contract prevented Railway Signal from taking advantage of one of its terms. In Goldstein v. Lustig (1987), 154 Ill. App. 3d 595, 507 N.E.2d 164, the plaintiff’s breach of his employment contract by using corporate books and records to further an insurance fraud scheme prevented plaintiff from enforcing the term of the contract entitling him to resignation benefits. The court held that “[a] party who materially breaches a contract cannot take advantage of the terms of the contract which benefit him.” 154 Ill. App. 3d at 599.

In the case at bar, Railway Signal cannot claim a benefit from a term of its November 5, 1980, contract which provided that Railway Signal would not be liable for liquidated damages if it performed, where Railway Signal did not perform. Moreover, any evidence relating to liquidated damages was speculative and we need not speculate whether Orange County Transit District would have claimed or been paid liquidated damages if Railway Signal had delivered the fareboxes in accordance with the terms and conditions of appendix B of the Gomez and Davila consulting agreement.

Finally, notwithstanding the lack of evidence, Railway Signal’s counsel argued that liquidated damages accrued at more than $7,500 per week and that AFFI had improperly paid liquidated damages to Orange County Transit District. Since the jury did not accept that argument, the exclusion of defendant’s exhibit 5, attorney Smart’s letter, which is simply a calculation of liquidated damages accrued through the date of the letter, was not an abuse of the trial court’s discretion.

Lastly, on cross-appeal, AFFI maintains that the trial court erred in ordering a remittitur of the amounts AFFI collected under the letter of credit. First AFFI asserts that “it will be obligated to reimburse those who posted the Letters of Credit” if it ultimately recovers the remitted amount. AFFI’s relationship with the makers of the letters of credit requires no obligation to repay any amount recovered. The only obligation set forth in the letters of credit is, in the event the letters of credit are drawn down, such funds should be returned to the credit makers of the letters of credit. If no funds remain, there is no obligation to return anything to the makers. Therefore we conclude that AFFI is mistaken when it states, “it will be obligated to reimburse those who posted the Letters of Credit.”

Secondly, AFFI argues that such funds constitute a “collateral source.” In Illinois, the collateral source rule applies in contract cases only where there is an element of fraud, tort, or wilfulness. In GNP Commodities, Inc. v. Walsh Heffernan Co. (1981), 95 Ill. App. 3d 966, 420 N.E.2d 659, the plaintiff, a speculator in frozen pork bellies, bought pork bellies from the defendant based upon defendant’s representation that the pork bellies had been frozen after February 1. The pork bellies had in fact been frozen before November 1 of the previous year and therefore were not deliverable according to Exchange rules. The plaintiff resold the pork bellies and sued the defendant for the difference in value between the pork bellies as sold by the plaintiff and their market value as represented. The plaintiff’s complaint alleged a breach of contract, fraud, misrepresentation, and wilful fraud. Following a jury trial, the jury awarded plaintiff the damages sought. The court held that even if plaintiff made a profit on futures contracts for pork bellies, the court saw “no reason why the collateral source rule should not apply to bar defendants from reducing damages by proof that plaintiff had been compensated from a source to which they have not contributed.”

We conclude that AFFI was not legally entitled to invoke the collateral source rule and that the trial court properly remitted the judgment by the amount drawn by AFFI on the letters of credit.

For the foregoing reasons the judgment of the trial court is affirmed.

Affirmed.

MURRAY, P.J., and COCCIA, J., concur.

      Davila and Gomez executed separate but identical consulting agreements on November 5, 1980. For brevity, the only reference hereafter will be to the “consulting agreement.”