author: PRESIDING JUSTICE GREEN JUSTICE LUND,

text:
    CURT BULLOCK BUILDERS, INC., Plaintiff-Appellee and Cross-Appellant, v. H.S.S. DEVELOPMENT, INC., et al., Defendants-Appellants and Cross-Appellees.
    Fourth District
    No. 4—91—0148
    Opinion filed January 16, 1992.
    Rehearing denied March 12, 1992.

      LUND, J., specially concurring.
    Mark S. Goodwin, Robert C. Hofmann, and Thomas M. Goodwin, all of Dougherty, Hofmann & Goodwin, P.C., of Danville, for appellants.
    Kennith W. Blan, Jr., of Blan Law Offices, of Danville, for appellee.
   PRESIDING JUSTICE GREEN

delivered the opinion of the court:

On August 3, 1988, plaintiff Curt Bullock Builders, Inc., filed suit in the circuit court of Vermilion County against defendants H.S.S. Development, Inc., Peoria Associates, an Illinois limited partnership, Herbert S. Saywitz, Theodore Sayers, Mark Sayers, and the La Salle National Bank, seeking relief concerning alleged injuries to plaintiff’s leasehold rights and interference with its business relationships. On August 1, 1989, plaintiff filed a third-amended complaint, upon which the parties went to trial. Count I alleged tortious interference with plaintiff’s business relationships; count II sought punitive damages for that tort; and count III sought damages for an alleged breach of covenant in a lease granted plaintiff by various defendants. On October 18, 1990, prior to trial, the court denied defendants’ motion for summary judgment as to count III.

The case was tried before a jury. Prior to verdict, the cause was dismissed as to La Salle National Bank. The court directed a verdict for defendants as to count II seeking punitive damages. On October 30, 1990, the court entered judgments on a jury verdict finding for plaintiff as to counts I and III and fixing damages in the sum of $241,120. The remaining defendants have appealed the judgments on the verdict fixing damages, and plaintiff has cross-appealed the judgment on the directed verdict. Defendants contend (1) the proof of liability and damages was insufficient to support the verdict; (2) the venue was improper; (3) it was entitled to a summary judgment as to count III; and (4) the court erred in ruling on evidence and instructing the jury. On cross-appeal, plaintiff asserts the court erred in directing a verdict against it as to count II.

We affirm the judgments of liability in favor of plaintiff and against defendants as to counts I and III. We also affirm the judgment on count II. We reverse the damages award in regard to counts I and III, and remand for a new trial on those counts as to the amount of damages to be awarded.

Plaintiff is a corporation which builds and sells garages. From 1974 to 1984, plaintiff leased from Delores Maloof a rectangular lot 80 feet by 40 feet on land west of University Avenue in Peoria, and conducted sales from a building on that land. In 1984, plaintiff did not renew that lease but rented a nearby tract which was located approximately 100 feet north and west of the former leasehold. This tract was owned by the Mitchell Maloof trust, which was represented by the same real estate agency as was plaintiffs former landlord. Plaintiff’s claim for breach of covenant arises from paragraph 5 of the latter lease, which contained the exact same language as paragraph 5 of the lease with Delores Maloof. Those paragraphs stated:

“It is further agreed that the tenant and its representatives, business invitees, etc., shall be entitled to use either of the 18-foot roadway easements reserved across the tract lying between the demised premises and University Avenue as a means of access to University Avenue for the benefit of the demised premises. The landlord hereby reserves a right-of-way over and along a strip of the demised premises over and along the northerly 18 feet of the premises and lower and along the southerly 18-feet of the premises even depth for the benefit of the tract lying to the west of the premises.”

During the entire time of the 1974-1984 lease, a lot described by the parties as the “Bonanza tract” (because a “Bonanza” restaurant was located thereon) separated the property leased by plaintiff from University Avenue. The described 18-foot strips were on the Bonanza tract. That purportedly servient tract was not owned by the lessor. The 1984 leasehold was on land which was part of a larger tract called the “Burlington Coat Factory” parcel, upon which a large building formerly used as a factory was located. Direct access from plaintiff’s 1984 leasehold to University Avenue existed only by going through the tract leased from 1974 to 1984, and then through the “Bonanza tract.” At the time of the 1984 lease, the lessor owned neither of the tracts necessary for access to University Avenue. Thus, the purported grantor of the 1984 easement had no interest to which the purported easement could attach. However, until sometime in August 1988, plaintiff and its customers used the purported easements over the two tracts without objection from anyone.

Defendants H.S.S. Development, Inc., and the Sayerses formed a limited partnership called Peoria Associates. Defendant Saywitz was the sole shareholder of H.S.S. Development, Inc. Prior to 1987, Saywitz had owned nearby land. Gradually, Peoria Associates or its members acquired other tracts in the area for the purpose of developing a shopping center. They acquired the land upon which plaintiff’s 1984 leasehold was situated and took an assignment of the lease to plaintiff, whereupon plaintiff began paying rent to Peoria Associates. They then acquired the two tracts over which the purported easement to University Avenue existed. On August 11, 1988, Peoria Associates sent plaintiff a notice to quit the premises, alleging plaintiff had breached their lease by failing to maintain liability insurance and to pay real estate taxes as provided by plaintiff’s lease, and a suit in forcible entry and detainer was brought by Peoria Associates against plaintiff in the circuit court of Peoria County. That suit was voluntarily dismissed on August 31, 1988, but reinstated on March 16, 1989, and then stayed pending disposition of the instant case.

The evidence is undisputed that Saywitz and plaintiff’s president, Randy Bullock, met at plaintiff’s Danville office. According to Bullock, defendants were anxious to acquire plaintiff’s leasehold so that the premises would be free for the development of a shopping center. He testified that Saywitz informed him that plaintiff’s operation did not fit the style of the shopping center but Saywitz would obtain a nearby leasehold for plaintiff’s operation. Bullock further testified that when the parties were unable to agree, Saywitz again maintained plaintiff was in default on its lease and also stated there was “more than one way to skin a cat.”

Undisputably, at least by late August 1988, Peoria Associates had begun construction for the proposed shopping center. According to plaintiff’s witness Gary Huggins, the asphalt which covered plaintiff’s ingress and egress to and from University Avenue was tom up by August 1, 1988, and this prevented customer use of that access to plaintiff’s place of business. Also during the construction, Peoria Associates erected a facade along various parts of the shopping center. This facade ran along the south edge of plaintiff’s leasehold, obscuring the two buildings plaintiff had erected there. A gate in the facade did permit access through the facade to plaintiff’s building. Plaintiff put on considerable evidence to show a reduction in its business after the construction began. The parties agree that plaintiff had other access to University Avenue but this access was clearly more circuitous.

Plaintiff’s clearest right to recover arises from count III, which alleged a breach of a covenant of the lease. The questions involved, other than as to damages, are entirely those of law. Defendants maintain the circuit court erred in denying their motion for summary judgment. However, as the same exact issue as that raised on the motion for summary judgment was decided at trial, that issue is merged in the judgment on the verdict; and on review, we determine the propriety of the judgment on the verdict and not the order denying summary judgment. In re Marriage of Adams (1988), 174 Ill. App. 3d 595, 528 N.E.2d 1075, rev’d on other grounds (1990), 133 Ill. 2d 437, 551 N.E.2d 635; International Association of Machinists & Aerospace Workers, District Lodge No. 140 v. Cheshire/A Xerox Co. (1984), 125 Ill. App. 3d 350, 465 N.E.2d 981.

As we have indicated, when the 1984 lease was executed, the then lessor had no interest in the two tracts over which the covenant of paragraph 5 of the lease purported to create an easement. Thus, no easement was created by that instrument at that time. However, the covenant of paragraph 5 was one which was intended to be a covenant real, or one which would run with the land:

“The test whether a covenant runs with the land or is merely personal is whether the covenant concerns the thing granted and the occupation or enjoyment of it, or is a collateral and personal covenant not immediately concerning the thing granted. If the covenant concerns the land and the enjoyment of it, its benefit or obligation passes with the ownership, but to have that effect the covenant must respect the thing granted or demised and the act to be done or permitted must concern the land or estate conveyed.” (Purvis v. Shuman (1916), 273 Ill. 286, 294-95, 112 N.E. 679, 682.)

Covenants which “run with the land may be transferred and assigned, so as to vest the liability, as well as the benefits, in an assignee.” (Emphasis added.) 20 Am. Jur. 2d Covenants, Conditions, and Restrictions §25, at 594-95 (1965); see also Purvis, 273 Ill. at 294-95, 112 N.E. at 682.

Peoria Associates eventually became an assignee of the 1984 lease, paragraph 5 of which stated that plaintiff, “its representatives, business invitees, etc., shall be entitled to use” certain easements therein described. When Peoria Associates then acquired the property stated by paragraph 5 to be subject to the easement described, Peoria Associates was then bound to comply with the covenant of the lease requiring that plaintiff be allowed the ingress and egress set forth.

Analyzing the situation here under a slightly different approach, we conclude the evidence supported a determination that Peoria Associates was estopped to deny the existence of the easement described in the lease. The elements necessary to be under the doctrine of estoppel are “some representation or conduct on the person sought to be estopped, reliance by another, and prejudice or injustice to that person.” (Steel City National Bank v. J.J. Wright Oldsmobile, Inc. (1989), 192 Ill. App. 3d 926, 932, 549 N.E.2d 726, 729.) In Steel City National Bank, the appellate court affirmed the finding of the circuit court that plaintiff was equitably estopped from denying the validity of the lease. The court noted that allowing plaintiff to claim the invalidity of the lease where it had accepted rent under the lease for five years, and its predecessor had done so for eight years, would have a fraudulent and unjust effect.

Here, the acceptance of the assignment of the lease containing the covenant of paragraph 5 constituted the necessary representation by Peoria Associates. The evidence is undisputed that plaintiff was using the purported easement and apparently believed it had a right to do so because of paragraph 5. Peoria Associates is bound to know of the existence of paragraph 5, and the evidence indicated Peoria Associates knew plaintiff had been using the purported easement. Peoria Associates accepted the benefits of the lease in the form of rental payments by plaintiff. The situation here is also somewhat analogous to that in Lake Shore Management Co. v. Blum (1968), 92 Ill. App. 2d 47, 52, 235 N.E.2d 366, 369, where lessees who had taken possession and paid rent under a lease were held estopped to question the validity of the lease. Plaintiff was prejudiced because the asphalt in the area described in paragraph 5 was torn up. That access to plaintiff’s place of business was blocked for an extended period of time.

At the conclusion of the presentation of the evidence, the circuit court permitted plaintiff to amend its pleadings to set forth the theory of estoppel. Then, without objection by defendants, the court instructed the jury in this respect. The evidence supported these rulings and the court proceeded properly.

We now turn to the question of the sufficiency of the evidence to prove defendants guilty of the tort of improper interference with a business relationship. This court has described the elements of that tort as (1) “a reasonable expectation [by the plaintiff] of entering into a valid business relationship” with another, (2) knowledge of the expectancy by the defendant, (3) intentional and malicious interference “with the expectancy,” and (4) injury to the plaintiff. (Kruger v. Menard Electric Cooperative (1988), 169 Ill. App. 3d 861, 865, 523 N.E.2d 708, 710.) In Kruger, we upheld the dismissal of a count of a complaint purporting to allege that tort for the failure of that count to allege malice. See also Audition Division, Ltd. v. Better Business Bureau of Metropolitan Chicago, Inc. (1983), 120 Ill. App. 3d 254, 258-59, 458 N.E.2d 115, 120.

To the extent that a party acts to enhance its own business interests, it has a privilege to act in a way that may harm the business expectancy of others and that privilege is greater, where, as here, no contract exists between the plaintiff and the entity with which the business relationship is anticipated. (Belden Corp. v. InterNorth, Inc. (1980), 90 Ill. App. 3d 547, 413 N.E.2d 98; W. Keeton, Prosser & Keeton on Torts §130, at 1011 (5th ed. 1984).) If the interference which results is of an incidental nature rather than an intentional nature, no tort occurs. Bank Computer Network Corp. v. Continental Illinois National Bank & Trust Co. (1982), 110 Ill. App. 3d 492, 501, 442 N.E.2d 586, 593; Belden Corp., 90 Ill. App. 3d 547, 413 N.E.2d 98.

Plaintiff presented substantial evidence here that it had customers making purchases from its facility by use of the purported easement to University Avenue and that they wished to keep those customers. As we will explain, evidence was also presented showing plaintiff lost considerable business after construction of the shopping center was started and use of the purported easement was prevented by the construction. Evidence also showed that the facade shielded the view of plaintiff’s establishment from University Avenue.

The major thrust of plaintiff’s proof of intent to harm and malice was the testimony of Randy Bullock that when he met with Saywitz, a partner in Peoria Associates, Saywitz stated there was “more than one way to skin a cat.” This statement was made after Bullock had refused offers by Saywitz in regard to relocation of plaintiff’s place of business. According to Bullock, Saywitz had stated that plaintiff’s business was not appropriate for the shopping center. Further evidence bearing upon malice by defendants concerned a suit in forcible entry and detainer which Peoria Associates brought against plaintiff in the circuit court of Peoria County during the time when defendants were trying to persuade plaintiff to relocate its business. The claimed breaches of the lease by plaintiff consisted of failure to pay $470 of real estate taxes at a time when plaintiff was not usually required to make such payment and failure to obtain for Peoria Associates a certificate showing it was an additional insured on plaintiff’s public liability policy.

We agree with the circuit court that the foregoing evidence of malice was, at least, barely enough to submit to the jury count I, charging tortious interference with plaintiff’s business relationship. The allegations of that count and count II, seeking punitive damages, were almost the same and malice was an essential element of the request for punitive damages. However, we conclude the circuit court acted properly in refusing to submit count II to the jury. In its explanation of that ruling, the court indicated it found analogy between the situation here and that in Knierim v. Izzo (1961), 22 Ill. 2d 73, 174 N.E.2d 157, a case involving intentional infliction of emotional distress. Plaintiff maintains that comparison was improper. We need not pass upon that question because the court’s comments indicate the reason for the court’s decision was that it did not “think the evidence [there showed] the level of maliciousness that would support a claim for punitive damages.”

The Illinois Supreme Court has consistently stated that punitive damages are not favored in the law. (Deal v. Byford (1989), 127 Ill. 2d 192, 537 N.E.2d 267; Kelsay v. Motorola, Inc. (1978), 74 Ill. 2d 172, 384 N.E.2d 353.) It has also stated that the trial court has some discretion in determining whether to allow punitive damages to be imposed. (Loitz v. Remington Arms Co. (1990), 138 Ill. 2d 404, 414, 563 N.E.2d 397, 401; Eshelman v. Rawalt (1921), 298 Ill. 192, 197, 131 N.E. 675, 677-78.) The conduct of defendants, even when viewed most favorably to plaintiff, was not highly malicious. The circuit court did not abuse its discretion or act contrary to the law in directing a verdict on count II.

The damages arising from counts I and III were the same, as they arose from the lack of access for customers when the entrance to plaintiff’s place of business from University Avenue was blocked during construction. Evidence was presented that sales dropped substantially after construction was started in 1988 and were even lower in 1989. Randy Bullock testified that, in his opinion, plaintiff lost sales of 40 garages in 1988 due to the impediments to access. He based this opinion on the facts that (1) Huggins, a salesman who had a history of improving sales, was working in the Peoria store; (2) ordinarily they sold 30% of the yearly total in the first two quarters; (3) in 1988, they sold 31 garages in the first two quarters but sold only 29 in the last two quarters; (4) by the usual percentage comparisons between the two halves of the year, 70 garages would have been sold in the last half of the year.

Bullock also testified that on the basis of 100 sales in 1988, they would have sold 113 in 1989 because plaintiff’s Bloomington store had a 13% increase in sales from 1988 to 1989. As plaintiff only sold 46 garages from its Peoria store in 1988, plaintiff expressed an opinion that 67 sales were lost that year as a result of the lost access. Bullock then maintained that from studies he had seen, each two garage sales generate an additional sale in future years. Thus, Bullock contended that, in addition to the 107 sales which he maintained were lost in 1988 and 1989, plaintiff lost an additional 53 sales in subsequent years, thus totalling a loss of 160 sales of garages.

Michael Fox, a certified public accountant employed by plaintiff, testified that the average net profit per garage was the sum of $1,507. When the figure of $1,507 is multiplied by 160, Bullock’s projected number of lost sales, the sum of $241,120 is obtained. This was the exact amount of the verdict. The procedure used here by Fox and accepted by the jury for determination of damages is inherently very speculative. However, in Schatz v. Abbott Laboratories, Inc. (1972), 51 Ill. 2d 143, 281 N.E.2d 323, the supreme court passed upon the sufficiency of proof of lost profits incurred by theater owners resulting from a common law nuisance. The evidence showed the theater had receipts of as high as $69,328.65 in 1959 and had declined to $44,557 in 1967, a period of time when the evidence indicated theater attendance nationwide was on the increase. The court upheld an award of $15,000, stating:

“ ‘It is perhaps true that absolute certainty as to the amount of loss or damage in such cases [involving lost profits] is unattainable, but that is not required to justify a recovery. All the law requires is that it be approximated by competent proof. That proof of the exact amount of loss is impossible will not justify refusing compensation. If that were the law, contracts of the kind here involved could be violated with impunity. All the law requires in cases of this character is that the evidence shall with a fair degree of probability tend to establish a basis for the assessment of damages.’ ” Schatz, 51 Ill. 2d at 147-48, 281 N.E.2d at 325-26, quoting Barnett v. Caldwell Furniture Co. (1917), 277 Ill. 286, 289,115 N.E. 389, 390.

In Schatz, the trial court had not, as here, given the plaintiff full benefit of the projection of damages which arose from the figures presented in evidence. Nevertheless, testimony by Bullock, if believed by the jury, did “with a fair degree of probability tend to establish a basis for the assessment of damages.” Although we are remanding for a new trial as to damages, we hold the evidence was sufficient to support an award of substantial damages.

Having passed upon the sufficiency of the evidence, we now confront the questions concerning possible error which might require retrial. Defendants place greatest emphasis upon their theory that the case should not have been tried in Vermilion County. They contend that under both the statutory provision for venue under section 2— 101(2) of the Code of Civil Procedure (Code) (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 101(2)) and under the doctrine of forum non conveniens, the place of trial was improper.

Section 2—101 of the Code, upon the basis of which the circuit court ruled that Vermilion County was a proper venue, states: “[e]xcept as otherwise provided in this Act, every action must be commenced (1) *** or (2) in the county in which the transaction or some part thereof occurred, out of which the cause of action arose.” (Emphasis added.) (Ill. Rev. Stat. 1989, ch. 110, par. 2—101.) The italicized language has been interpreted to “include [counties] where any significant negotiations were carried on between the parties, [or] where an agreement was signed.” (Emphasis added.) (People ex rel. Carpentier v. Lange (1956), 8 Ill. 2d 437, 441, 134 N.E.2d 266, 267-68.) Here, the lease of the premises out of which plaintiff’s claim for breach of covenant for easement arises was signed on behalf of plaintiff in Vermilion County. Statutory venue was established.

The doctrine of forum non conveniens is not so precisely defined as is statutory venue. The plaintiff’s statutory right to select the forum is given great deference and will not often be defeated. (Griffith v. Mitsubishi Aircraft International, Inc. (1990), 136 Ill. 2d 101, 106, 554 N.E.2d 209, 211.) Here, the alternative would have been to try the case in Peoria County but none of the parties, plaintiff or defendants, are residents there. No indication was given that a jury view of the premises would have been necessary or desirable. No preponderance of the witnesses were from there. Accordingly, the trial court properly gave deference to plaintiff’s statutorily correct selection of Vermilion County as the venue and properly denied all requests to change the place of trial.

Prior to trial, defendants filed a motion in limine which sought to preclude plaintiff from offering in evidence “the sales history or records of other business locations of plaintiff” and the motion was denied. Over objection, plaintiff was permitted to introduce Randy Bullock’s testimony of the sales of plaintiff’s Bloomington facility. We recognize and are concerned about the conjectural nature of the applicability of that evidence to the Peoria facility. However, that sales history does seem to be a factor which logically would be entitled to some weight in making a projection of plaintiff’s likely profits at Peoria. The standards set forth in Schatz seem to give some credence to such information.

Defendants rely upon Drs. Sellke & Conlon, Ltd. v. Twin Oaks Realty, Inc. (1986), 143 Ill. App. 3d 168, 491 N.E.2d 912, and Favar v. Riverview Park (1908), 144 Ill. App. 86, in contending the evidence should not have been admitted. Those cases do not concern the admissibility of the type of evidence involved here. Rather they concern whether such evidence is, of itself, sufficient to prove damages. The trial court has some discretion in ruling on the relevancy of evidence. We find no reversible error resulted from the admission of this evidence.

Defendants filed a second in limine motion requesting plaintiff be barred from offering testimony or evidence through its disclosed experts which varied from the evidence elicited in this connection through discovery. Supreme Court Rule 220(d) (134 Ill. 2d R. 220(d)) prohibits a disclosed expert from giving testimony inconsistent with that set forth in the discovery furnished by the party calling the expert. The motion was never ruled upon. However, during defendants’ cross-examination of Randy Bullock, he testified that sales figures for 1987 through 1989 for plaintiff’s Springfield operation were not accurately represented on a defendants’ exhibit. Over objection, on redirect examination, Randy Bullock testified as to the accurate figures. Defendants contend error resulted because the procedure indicated to the jury that defendants had given inaccurate figures to the jury when those inaccurate figures had actually been supplied by plaintiff.

Any error which occurred would result from the ruling on the objection to the testimony rather than from the lack of ruling on the in limine motion. The court did overrule the objection and the witness then explained the nature of the mistake. Although the explanation did not remove a possible inference that the defendants had originated the error, any prejudice to defendants was exceedingly minor. No error occurred.

Defendants also assert the court erred in denying their motion in limine to prohibit Randy Bullock from testifying as an expert.

Supreme Court Rule 220(a)(1) provides in pertinent part as follows:

“An expert is a person who, because of education, training or experience, possesses knowledge of a specialized nature beyond that of the average person on a factual matter material to a claim or defense in pending litigation ***.” 134 Ill. 2d R. 220(a)(1).

During trial Bullock testified as follows: (1) his educational background was at the University of Illinois; (2) he has been employed by Bullock Builders since 1972; (3) in high school and college he was a laborer building garages, then he advanced to salesman in the Chicago area and in Ohio; he then became a division manager and a vice-president for a number of years, and eventually he became president of Bullock in 1984; (3) he has extensive experience concerning the sales history of the company; (4) it is his responsibility to review sales histories; (5) he has been making sales projections each year since 1984; (6) when making sales projections he primarily considers the sales history of the individual district office, along with that of the individual salesmen; and (7) he has made sales projections for the Peoria office since 1984. In a proper case, an expert can be qualified merely by experience. (Duffy v. Midlothian Country Club (1985), 135 Ill. App. 3d 429, 481 N.E.2d 1037.) The sufficiency of the proof to qualify a witness as an expert rests largely in the sound discretion of the trial court. (M. Graham, Cleary & Graham’s Handbook of Illinois Evidence §702.2, at 494-95 (5th ed. 1990).) That discretion was not breached in allowing receipt of this evidence.

Randy Bullock also testified to an opinion that every two sales lost by Bullock in 1988 and 1989 would cause the loss of one additional sale in subsequent years. He then explained that in calculating the total number of sales he deemed lost, he increased the number of lost sales projected for 1988 and 1989 by 50%. Plaintiff’s counsel then asked Randy Bullock how he arrived at the 50% formula and Randy Bullock responded: “We’ve had surveys in the past. We’ve — just general knowledge.” The defendants objected on the basis of hearsay and the court overruled the objection. The witness then explained that he believed satisfied customers would talk to their friends and neighbors and generate new sales. The witness indicated the thought that the 50% estimate was very conservative. The witness made no explanation of any surveys relied upon.

Under Wilson v. Clark (1981), 84 Ill. 2d 186, 417 N.E.2d 1322, which adopted Federal Rule of Evidence 703 (Fed. R. Evid. 703), an expert witness is not required to state the reasons for his or her opinion before stating the opinion. The witness may state the reasons on direct examination, even reasons which are not admissible in evidence, if those reasons are “ ‘of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject.’ ” (Wilson, 84 Ill. 2d at 193, 417 N.E.2d at 1326, quoting Fed. R. Evid. 703.) Randy Bullock gave as one of his reasons his reliance on unidentified surveys.

The implication of Randy Bullock’s statement of his consideration of a survey was that the survey indicated that each two garage sales tends to generate an additional garage sale. This was a statement of hearsay, and no showing was made by plaintiff that the surveys were of the nature relied upon by experts as set forth in Federal Rule of Evidence 703. Thus, the objection should have been sustained as to Randy Bullock’s describing surveys as a basis of his opinion and that answer should have been stricken. The evidence concerning additional sales lost after the year 1989 was very conjectural. When that evidence was supported by inadmissible hearsay, reversible error in regard to the amount of damages resulted.

We find no other claims of error which require reversal. We have examined defendants’ contentions that plaintiff made judicial admissions and find every statement alleged to be such an admission to be sufficiently qualified, vague, indefinite, or explained to prevent it from fitting into that category. Plaintiff’s exhibit No. 2, which was a diagram of its leasehold, was sufficiently authenticated and the prejudice claimed by defendants is not documented. Various letters between the parties or their agents which were offered by plaintiff and admitted into evidence bore upon the question of whether defendants acted with malice and were properly admitted into evidence. Other than as we have explained, testimony by Randy Bullock in regard to possible loss of sales was not rendered improper even if it did go to an ultimate issue in the case. (Merchants National Bank v. Elgin, Joliet & Eastern Ry. Co. (1971), 49 Ill. 2d 118, 273 N.E.2d 809.) The claim of error arising from the testimony of plaintiff’s witness, Michael Fox, is not before us because no objection was made at the time to his testimony.

Any error in the court’s giving plaintiff’s instruction on the doctrine of estoppel was also waived by the lack of objection to the instruction at trial. Under our ruling in regard to the law on easements and leaseholds as we have explained, no error resulted from the court’s ruling on instructions on those questions. The court’s decision to use Illinois Pattern Jury Instructions, Civil, No. 30.01 (3d ed. 1991), as modified, on the question of damages was not a breach of discretion. Any attempt to set forth a definite formula might have confused the jury.

As we have indicated, we affirm the judgments on counts I and III to the extent they determine liability. We also affirm the judgment as to count II. We reverse the portions of the judgments on counts I and III to the extent they award damages. We remand to the circuit court of Vermilion County for a new trial on the issue of damages to be awarded as to counts I and III.

Affirmed in part, reversed in part, remanded with directions.

KNECHT, J., concurs.

JUSTICE LUND,

specially concurring:

I concur with the majority opinion, but am somewhat concerned there may be a misunderstanding regarding use of surveys when giving expert opinions. Federal Rule of Evidence 703 (Rule 703) (Fed. R. Evid. 703) and Federal Rule of Evidence 705 (Rule 705) (Fed. R. Evid. 705) apply to all types of cases, not only those arising from medical malpractice. I envision fact situations where the opinions authorized under Rule 703 could be based upon survey evidence. That may be true even in the present case on retrial. If the survey questions have been carefully prepared to obtain responses which indicate information that could be relied upon in forming an expert opinion, and the survey was taken in a reasonable manner, then the survey result may well be a foundation for an expert’s opinion.

In the present case, I envision such a survey to be a written inquiry to customers, asking reasons why the purchase of a new garage was made from the contractor. If the answers from a fair sample of past customers indicate purchases were made because of familiarity with garages recently constructed by the same contractor, then the information may well be the type reasonably relied upon in forming expert opinions or drawing inferences.

Normally, after an expert says the source is the type reasonably relied upon, the objecting party seeks to impeach during cross-examination. (See Rule 705.) In the present case, the issue was brought to the attention of the court, by a hearsay objection during the opinion testimony, when the witness mentioned his opinion was based upon undescribed surveys. Nothing in the testimony indicates there could be reasonable reliance on the surveys in forming an expert opinion. The record is also void of evidence indicating how the surveys were taken.

Public-opinion surveys determine marketing plans for many businesses in the modem economy. As long as these surveys are taken with a reasonable degree of scientific care, they may well be a valid basis for expert opinions and inferences.


source: Caselaw Access Project

author: JUSTICE STEIGMANN

license: Public Domain

text:
    DECKER, BERTA AND COMPANY, LTD., Plaintiff-Appellee, v. RAYMOND M. BERTA, Defendant-Appellant.
    Fourth District
    No. 4—91—0353
    Opinion filed February 13, 1992.
    Rehearing denied March 16, 1992.

      Dunn, Goebel, Ulbrich, Morel & Hundman, of Bloomington (William T. Hundman, of counsel), for appellant.
    George L. Chesley, of Chesley & Wilson, of Bloomington, for appellee.
   JUSTICE STEIGMANN

delivered the opinion of the court:

Plaintiff, Decker, Berta & Company (the Company), an accounting firm, sued to prevent defendant, Raymond Berta, a former partner of the Company, from violating a restrictive covenant not to compete with plaintiff. The trial court granted a preliminary injunction enforcing the restrictive covenant. Defendant appeals and we affirm.

I. Facts

After Berta graduated from college in 1976, he was introduced to Charles R. Decker by Richard Belletini, owner of a chain of grocery stores and a client of Decker’s at the time. (Berta had known Belletini since 1967 and would eventually marry his daughter.) Berta went to work with Decker in 1979 and the two subsequently formed a partnership. Later that year, the partnership changed to a corporation with Decker holding 90% of the stock and Berta holding 10% of the stock. Berta later increased his stock ownership interest to 121/2%.

In the spring and early summer of 1985, the accounting firm suffered cash flow problems. Specifically, the firm could not make payments due on bank loans and on loans made to the firm by some of its clients. The firm owed approximately $180,000, and both Decker and Berta were personally liable for the debt. Decker negotiated a deal with his father, G. Russell Decker, to provide capital to the firm, and on October 1, 1985, the firm was sold to G. Russell Decker for $237,000. In exchange, the firm executed a note in that amount in favor of G. Russell Decker. In exchange for their stock, Berta received $3,200 and Charles Decker received $12,000. The firm used the funds from the sale of the firm to pay off its debts. The new firm was incorporated and the Company was created.

At the insistence of G. Russell Decker and contemporaneous with his purchase of the firm, the Company and Berta entered into an employment contract dated October 1, 1985. The contract included terms for compensation and was to run until September 30, 1990. The contract also included a restrictive covenant enforceable for three years following the termination of the contract. Specifically, that paragraph stated as follows:

“RESTRICTIVE COVENANT. For a period of three (3) years from the date of the termination of his employment, the Employee will not, within a thirty-five (35) mile radius of any present places of business of Employer, directly or indirectly own, manage, operate, join, control, be employed or participate in the ownership, management, operation, or control of, or be connected in any manner with any business of the type and character of business engaged in by the Employer at the time of such termination.”

At the time the contract was signed, the company had offices in Normal, Seneca, and Coal City, Illinois. The offices in Seneca and Coal City have since closed.

The contract also contained the following covenant:

“DISCLOSURE OF INFORMATION. The Employees recognize and acknowledge that the list of the Employer’s customers, as it may exist from time to time, is a valuable, special, and unique asset of the Employer’s business. The Employees will not, during or after the term of their employment, disclose the list of the Employer’s customers or any part thereof to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever. In the event of a breach or threatened breach by an Employee of the provisions of this paragraph, the Employer shall be entitled to an injunction restraining said Employee from disclosing, in whole or in part, the list of the Employer’s customers. Nothing herein shall be construed as prohibiting the Employer from pursuing any other remedies available to him for such breach.”

When the contract ended on September 30, 1990, Berta began working for Allsup & Company (Allsup), an accounting firm in Bloomington, Illinois.

While employed by the Company, Berta spent approximately 85% of his time servicing the Belletini Red Fox grocery stores account. When Berta joined Allsup, Belletini moved his account to Allsup. Berta also contacted other former clients, informing them that he had joined Allsup and would continue to work for them if they so wished. Several of these clients asked the Company to forward photocopies of their accounts and records to Allsup so that Berta could service their accounts. Berta did not remove any clients lists from the Company, but used his own memory and phone books to compile a mailing list.

The Company sued Berta on October 30, 1990, to enforce the restrictive covenant. On May 9, 1991, the trial court conducted a hearing on the Company’s motion for a preliminary injunction and granted it. Berta brings this interlocutory appeal from the trial court’s order.

II. Analysis

A. Requirements for a Preliminary Injunction

A party seeking a preliminary injunction must establish by a preponderance of the evidence that (1) he possesses a certain and clearly ascertainable right that needs protection; (2) he has no adequate remedy at law; (3) irreparable injury will occur without the injunction; and (4) he has a reasonable likelihood of success on the merits of the case. (Ron Smith Trucking, Inc. v. Jackson (1990), 196 Ill. App. 3d 59, 63, 552 N.E.2d 1271, 1275.) In deciding whether to grant a motion for a preliminary injunction, the trial court must balance the equities and relative inconvenience to the parties and determine whether a greater burden will be imposed on the defendant by granting the motion than on the plaintiff by denying it. (Lee/O’Keefe Insurance Agency, Inc. v. Ferega (1987), 163 Ill. App. 3d 997, 1003, 516 N.E.2d 1313, 1317.) The sole question before us on appeal is whether the trial court abused its discretion in granting that motion, and we will not disturb the trial court’s findings unless they are against the manifest weight of the evidence. Ron Smith Trucking, 196 Ill. App. 3d at 63, 552 N.E.2d at 1275.

B. Restrictive Covenants Generally

In examining restrictive covenants, courts usually confront two conflicting principles: (1) the freedom to contract, and (2) the policy against contractual restraints of trade. Because restrictive covenants are restraints on trade, strict adherence to this policy would result in judicial rejection of all such covenants. (See Whitmore, A Statistical Analysis of Noncompetition Clauses in Employment Contracts, 15 J. Corp. L. 483, 486-87 (1990) (hereinafter Whitmore).) However, courts will not enforce restrictive covenants that prevent competition per se. (See Lee/O’Keefe, 163 Ill. App. 3d at 1003, 516 N.E.2d at 1317.) In an attempt to reconcile these conflicting principles, courts have applied a doctrine of “reasonableness” when examining restrictive covenants (Retina Services, Ltd. v. Garoon (1989), 182 Ill. App. 3d 851, 855, 538 N.E.2d 651, 652; Whitmore, 15 J. Corp. L. at 487-88), a standard which necessarily requires a case-by-case analysis of the facts and circumstances of each case. Lee/O’Keefe, 163 Ill. App. 3d at 1003, 516 N.E.2d at 1317; Whitmore, 15 J. Corp. L. at 488.

Restrictive covenants often appear in employment contracts and contracts for the sale of a business. Although the language and effect of these two types of contracts may appear similar, courts evaluate these restrictive covenants differently. (Whitmore, 15 J. Corp. L. at 484 n.l.) The difference between these two types of contracts exists in the nature of the interests sought to be protected. (See O’Sullivan v. Conrad (1976), 44 Ill. App. 3d 752, 755, 358 N.E.2d 926, 929.) Courts impose a more stringent test of reasonableness on restrictive covenants in employment contracts than they do on restrictive covenants ancillary to the sale of a business. The basis for the distinction rests upon the fact that a purchaser in a sale of a business context holds more bargaining power than an ordinary employee in an employment context. Hamer Holding Group, Inc. v. Elmore (1990), 202 Ill. App. 3d 994, 1007, 560 N.E.2d 907, 916.

Thus, in order to determine the appropriate standard of scrutiny, we must first decide whether the clauses at issue appear in a sale-of-business contract or an employment contract. The trial court in this case based its order on the expectation interest of G. Russell Decker at the time he purchased the accounting firm from his son and Berta. The trial court granted the preliminary injunction and enforced the restrictive covenant as a covenant ancillary to the sale of the business. In relevant part, the trial court’s order states as follows:

“In this case this G. Russell Decker loaned the sum of $237,200.00 to Decker, Berta and Co., Ltd. and purchased Decker, Berta and Co., Ltd. upon the premise that the firm would continue to be operated by Charles R. Decker and Raymond Berta. If either one or both of them left to do accounting work on their own or for another accounting firm, it was conceivable that the firm’s clientele would be lost to the departing employee or employees. The purchaser would be left with an office lease, some computers; and whatever personal property is needed by an accounting firm. His assumption and payment of $237,200.00 in firm debts and contract to purchase of the firm would have been rendered totally illusory. * * *
*** [W]hen this case is viewed from the aspect of a contract for the sale of a business, particularly a service business in which there is great emphasis placed upon confidential, personal face-to-face delivery of those services with a very small element of the business being the machinery and equipment necessary to produce the service, then this covenant must be viewed in a different light.
When the $237,200.00 loan of G. Russell Decker to a two principal accounting firm is considered the duration of the five year employment term followed by a three year non-competition restrictive covenant, appears reasonable. A five year restriction in another accountant’s restrictive covenant was sustained. Rhoads v. Clifton Gunderson and Co.[,] 89 Ill. App. 3d 751, 411 N.E.2d 1380 (1980).”

In Hamer, the First District Appellate Court analyzed the distinction between a sale-of-business restrictive covenant and a restrictive covenant as part of an employment contract and wrote the following:

“Illinois courts have historically distinguished between the two types of covenants, based on the unique interest which each seeks to protect. Whereas a covenant ancillary to an employment contract shields the employer from the possibility of losing his clientele to an employee who appropriates proprietary customer information for his own benefit, and also shields him from the possibility of losing customers with whom he enjoys a near-permanent relationship, a covenant ancillary to the sale of a business ensures the buyer that the former owner will not walk away from the sale with the company’s customers and goodwill, leaving the buyer with an acquisition that turns out to be only chimerical.” Hamer, 202 Ill. App. 3d at 1007, 560 N.E.2d at 916.

To enforce a restrictive covenant ancillary to the sale of a business, the purchaser must first show a protectable business interest which has been injured by his former employee’s unfair competition. (Hydroaire, Inc. v. Sager (1981), 98 Ill. App. 3d 758, 764, 424 N.E,2d 719, 724.) If the purchaser establishes this interest, then the purchaser need only show that the restriction is reasonable as to time, geographical area, and scope of prohibited business activity. Hamer, 202 Ill. App. 3d at 1007, 560 N.E.2d at 915.

1. A Protectable Interest

In Hamer, the purchaser seeking to enforce the restrictive covenant proved a protectable business interest by simply noting that the acquisition agreement between the purchaser and purchasee explicitly required the execution and delivery of the employee's employment agreement, which contained the restrictive covenant, on or before the closing date as a condition precedent to closing the deal. (Hamer, 202 Ill. App. 3d at 1008, 560 N.E.2d at 916.) Therefore, the court concluded that the plaintiff had proved the employee’s services were indispensable and part of the agreement to purchase the business. Hamer, 202 Ill. App. 3d at 1008, 560 N.E.2d at 916.

Similarly, in Stamatakis Industries, Inc. v. King (1987), 165 Ill. App. 3d 879, 520 N.E.2d 770, the plaintiff employer required the defendant employee to sign an employment contract as part of a purchase agreement. (Stamatakis, 165 Ill. App. 3d at 885, 520 N.E.2d at 774.) Because the defendant wrote the covenant himself, the appellate court enforced the covenant against him, reversing the trial court. Stamatakis, 165 Ill. App. 3d at 888, 520 N.E.2d at 776.

Initially, Berta contests the Company’s claim that it possesses a protectable business interest by challenging the Company’s standing to bring this suit. Berta contends that the decision of the trial court protects an interest belonging to G. Russell Decker, not the Company. As in Hamer, where a similar standing argument was raised (see Hamer, 202 Ill. App. 3d at 1004, 560 N.E.2d at 913-14), a clause in the employment agreement defeats defendant’s claim. Paragraph 19 of the agreement states as follows: “19. ASSIGNMENT. This agreement shall inure to the benefit of and be binding upon the Employer, its successors and assigns.” Although plaintiff counters defendant’s assertions by arguing the ability of the Company to bring suit without referring to paragraph 19 of the employment agreement, our review of the record shows that the Company, at the time it filed its complaint, was the legal holder of the agreement as assignee. See Hamer, 202 Ill. App. 3d at 1004, 560 N.E.2d at 913 (resolving issue of standing by recognizing plaintiff’s status as assignee of the employment agreement).

We agree with the trial court’s finding that the restrictive covenant in this case was ancillary to the sale of the business. The employment contract that Berta signed stated that “the Employer has today entered into an agreement with the Employees to purchase the entire business and assets [and liabilities]” of the Company. Berta testified that the parties executed all documents on the same day. Finally, Berta sold his 12½% interest in the firm and was relieved of all personal liability. Accordingly, we conclude that the trial court’s finding of a restrictive covenant ancillary to the sale of the business was not contrary to the manifest weight of the evidence. We next address whether the terms of the restrictive covenant were reasonable.

2. Reasonableness

The restriction as to time and territory must not be greater than necessary to protect the buyer, yet must, at the same time, not be oppressive to the seller or injurious to the general public. (Hamer, 202 Ill. App. 3d at 1009, 560 N.E.2d at 917; Russell v. Jim Russell Supply, Inc. (1990), 200 Ill. App. 3d 855, 864, 558 N.E.2d 115, 123.) Analyzing the restrictive covenant in the present case under this standard, the trial court found it reasonable as to its geographic scope and duration because it applied within only a 35-mile radius of Normal. The court further determined that plaintiff had a substantial business interest that needed protection. The court then preliminarily enjoined Berta from practicing his profession within 35 miles of Normal, Dlinois, for three years or until the preliminary injunction was dissolved.

Berta cites Lee/O’Keefe (163 Ill. App. 3d at 1005, 516 N.E.2d at 1319), for support of his argument that the three-year, 35-mile restrictions are overly broad and unreasonable. However, in Lee/ O’Keefe, the geographic restriction was 100 miles and the durational limitation was five years. Courts in Illinois have upheld geographic restrictions of up to 75 miles (see Hamer, 202 Ill. App. 3d at 1009, 560 N.E.2d at 917; O’Sullivan, 44 Ill. App. 3d at 757-58, 358 N.E.2d at 930), and durational restrictions of at least three years (see Hamer, 202 Ill. App. 3d at 1009, 560 N.E.2d at 917 (upholding a three-year restriction); Russell, 200 Ill. App. 3d at 864-66, 558 N.E.2d at 123 (upholding a 10-year restriction); O’Sullivan, 44 Ill. App. 3d at 757-58, 358 N.E.2d at 930 (upholding a five-year restriction)). We cannot say that the trial court’s conclusion was manifestly erroneous.

A review of the record reveals an interesting coincidence. Defendant filed a motion to clarify order on April 22, 1991, and an amended motion to clarify order on April 24, 1991. In these motions, defendant states that he has made arrangements to work at Allsup’s Pontiac, Illinois, office, which is 33.9 miles from plaintiff’s former office, which is located in Normal. (Plaintiff has since relocated its office to Bloomington, which is 36 miles from Pontiac.) In his empirical study, Whit-more found that the average distance of mileage restrictions found to be reasonable in the 1980’s was 33.9 miles. (Whitmore, 15 J. Corp. L. at 511.) Whitmore also found that the average time restriction found to be reasonable by courts in the 1980’s was 21.3 months. (Whitmore, 15 J. Corp. L. at 515.) Furthermore, he found that restrictive covenants of a 36-month duration were relatively long (Whitmore, 15 J. Corp. L. at 515 n.189), and that “clauses approaching two years rest on more uncertain ground.” Whitmore, 15 J. Corp. L. at 516.

While this court has not based its affirmance of the circuit court’s findings of reasonableness on this empirical study, those findings nonetheless provide further support for the circuit court’s determination that the geographic limitation here is reasonable, although its durational limitation may be slightly greater than usual. However, because we conclude that all of these findings are not contrary to the manifest weight of the evidence, we affirm.

III. Conclusion

For the reasons stated, we affirm the circuit court’s order granting the preliminary injunction.

Affirmed.

GREEN, P.J., and LUND, J., concur.


author: JUSTICE McCULLOUGH

text:
      In re ESTATE OF CECIL R. OZIER, Deceased (The University of Illinois YMCA et al., Objectors-Appellants, v. Marie F. Seeber et al., Coexecutors of the Estate of Dorothy Ann Ozier, Deceased, Claimants-Appellees).
    Fourth District
    No. 4 — 91—0288
    Opinion filed February 13, 1992.
    Rehearing denied March 9, 1992.
    Tepper & Gwinn, P.C., of Urbana (John Gwinn, of counsel), for appellants.
    Marc J. Ansel, of Erwin, Martinkus, Cole & Ansel, of Champaign, for appellees.
   JUSTICE McCULLOUGH

delivered the opinion of the court:

On March 1, 1991, the circuit court of Champaign County allowed a claim by Marie E Seeber and Elizabeth Seeber Murphy, coexecutors of the estate of Dorothy Ann Ozier (claimants) against the estate of Cecil Ozier, Dorothy's late husband. This claim was based on a $300,000 promissory note from Cecil to Dorothy which was secured by a mortgage on 31 real estate installment contracts (contracts) executed by Cecil prior to his death. The four charities (objectors) named in Dorothy’s will which were to receive all of her real estate appeal, contending (1) the doctrine of merger extinguished the note and mortgage held by Dorothy, and (2) the circuit court’s ruling was against the manifest weight of the evidence. We reverse.

Cecil executed his will in 1986, leaving the residue of his estate to Dorothy. Included in the residue were the contracts between Cecil and various purchasers for real property located in Urbana, Illinois. Warranty deeds for these parcels of real estate were held by Busey Bank, as escrow agent.

On October 31, 1988, Cecil executed a promissory note to Dorothy in the amount of $300,000. In return, Cecil gave Dorothy a mortgage on the real property represented by the contracts. The parties also executed a financing statement pursuant to the Uniform Commercial Code (Ill. Rev. Stat. 1989, ch. 26, par. 1 — 101 et seq.) as further evidence of the note and mortgage.

On March 14, 1990, Cecil died and Dorothy was named as executor of his estate. As such, on May 15, 1990, she filed an inventory of all the real and personal property of Cecil’s estate. Dorothy listed no real estate in Cecil’s estate; however, she listed the receivables from the contracts as personal property. These contracts were valued at $755,913.90 less an indebtedness of $163,372.03, which was a first mortgage on the property, with the Busey Bank as mortgagee. The inventory did not show any encumbrance by virtue of the promissory note or mortgage of October 31, 1988. Ill. Rev. Stat. 1989, ch. 110½, par. 14—1.

Prior to the distribution of Cecil’s estate, on May 14, 1990, Dorothy died. She had also executed a will in 1986 leaving all her personal property and cash to Cecil; however, since Cecil had predeceased her, this personal property and cash was received by the claimants as alternate beneficiaries. Dorothy left all her real estate inherited from Cecil to the objectors, to be distributed as follows: 50% to the Community Foundation of Champaign, 20% to the MeKinley YMCA, 20% to the University of Illinois YMCA and 10% to the First United Methodist Church.

On August 24, 1990, the new coexecutors of Cecil’s estate, Terry and Mary Finnegan, filed an amended inventory of Cecil’s estate. This amended inventory listed the receivables from the contracts, less the mortgage to Busey Bank and a $300,000 note and mortgage from Cecil to Dorothy, as personal property. However, these contracts were valued the same in both the original and amended inventory.

The claimants filed a petition for aid and direction to determine whether the contracts were to be distributed as real or personal property. On October 17, 1990, the circuit court ordered them to be distributed as real estate under article V of Dorothy’s will, which would have given the real estate to the objectors.

Also on August 24, 1990, the claimants filed a claim for $300,000 against Cecil’s estate, and all four charities named in Dorothy’s will objected. On March 1, 1991, the circuit court ruled in favor of the claimants, and on March 22, 1991, entered an order allowing the claim. The four charities appeal that order.

The objectors contend the mortgage and note held by Dorothy were extinguished, through the doctrine of merger, when she acquired the contracts through the residuary clause in Cecil’s will. The claimants argue Cecil’s rights in the contracts became personal property the day he entered into them through the doctrine of equitable conversion and, therefore, merger is inapplicable. The claimants conclude the note is a valid and viable debt which must be paid by Cecil’s estate.

“Equitable conversion is the treating of land as personalty and personalty as land under certain circumstances. *** The conversion takes place at the time of entering into the contract. It stems from the basic equitable principle that equity regards as done that which ought to be done.” (Shay v. Pen-rose (1962), 25 Ill. 2d 447, 449,185 N.E.2d 218, 219.)

It is not necessary to consider the status of the real estate as to Cecil. Under Cecil’s will, Dorothy succeeded to both Cecil’s personal property and real property. There is no need to determine the status of Cecil’s rights in the real estate contracts because the doctrine of merger clearly extinguished the note and mortgage held by Dorothy prior to her death.

“When one, who is absolutely entitled in his own right to a charge or incumbrance upon land, becomes the owner in fee of the same land, with no intervening interest or lien, the charge will at law merge in the ownership and cease to exist. Under like circumstances a merger will take place in equity where no intention to prevent it has been expressed, and none is implied from the circumstances and the interests of the party. [Citation.] The premises in such case become the primary fund for the payment of the mortgage, and whoever acquires that fund and the mortgage also must be regarded as having applied the fund to the payment of the mortgage. [Citation.] The indebtedness will be presumed to have been discharged so soon as the holder of it becomes invested with the title to the land upon which it is charged, ‘on the principle that a party may not sue himself at law or in equity.’ The purchaser is presumed to have bought the land at its value less the amount of indebtedness secured thereon, and equity will not permit him to hold the land and still collect the debt from the mortgagor.” (Belleville Savings Bank v. Reis (1891), 136 Ill. 242, 248-49, 26 N.E. 646, 647.)

The vesting in a party of the legal title, at the same time as ownership of the mortgage indebtedness secured by the mortgage upon the title, results in a merger in him and extinguishes the debt evidenced by, for example, a judgment taken upon the notes secured by the mortgage. The merger extinguishes the debt for which the mortgage was security. See, e.g., Priess v. Buchsbaum (1947), 332 Ill. App. 565, 574, 76 N.E.2d 195, 199.

The doctrine of merger provides that when the same person who is bound to pay is also entitled to receive, there is an extinguishment of rights, such that the debtor and creditor become the same person and there can be no right to put in execution. (Olney Trust Bank v. Pitts (1990), 200 Ill. App. 3d 917, 558 N.E.2d 398.) Whether a merger results from greater and lesser estate uniting in the same person depends upon what will best serve the purpose of justice and the intention of the parties. (Moffet v. Farwell (1906), 222 Ill. 543, 548, 78 N.E. 925, 927.) In the absence of evidence to the contrary, the law presumes that a mortgagee intended to keep his mortgage alive, when such course was essential to his protection against an intervening title or for other purposes of security, even though through ignorance of the intervening title or inadvertence, the mortgage has been discharged and the note cancelled. Moffet, 222 Ill. at 549, 78 N.E. at 927.

Rights are said to be merged when the same person who is bound to pay is also entitled to receive. Illinois courts will sometimes prevent a merger even when one party is both obligor and obligee on the note. A merger will be prevented by equity, however, only for the purpose of promoting substantial justice; it will not prevent a merger when such prevention would result in carrying an unconscientious wrong into effect. Jurado v. Simos (1988), 166 Ill. App. 3d 380, 519 N.E.2d 1018.

It is clear from these principles that when legal title to the real estate described in the contracts passed to Dorothy upon Cecil’s death, her mortgage on that real estate was extinguished. As she then owned the greater estate (legal title in fee), the lesser estate (the mortgage) was merged into the greater estate and extinguished.

Moreover, the note which was secured by the mortgage was also extinguished. Under the residuary clause of Cecil’s will, Dorothy would receive the residue of his estate. Having received the title to the real estate on which she owned the mortgage to secure the note, the note was satisfied.

The intention of the parties indicates they wanted a merger to occur. Cecil, by designating Dorothy as the beneficiary of the residuary clause and not devising the real estate to any other particular individual, intended for her to acquire title to the real estate. Similarly, Dorothy under article V of her will specifically devised “all the real estate, which I may have inherited from my said husband” to the objectors. Finally, Dorothy, as executor of Cecil’s estate, listed the contracts in the inventory of assets and noted they were subject to the first mortgage to the Busey Bank. However, she did not list the mortgage to herself. The intention of the parties, as determined from their respective wills, was that title to the real estate described in the contracts would pass from Cecil to Dorothy upon Cecil’s death. At that time, the mortgage and note held by Dorothy were extinguished pursuant to the doctrine of merger.

The administrator of a decedent’s estate stands in the shoes of decedent and acquires the same interest in decedent’s property as the decedent had. (Matter v. Sedam (1989), 191 Ill. App. 3d 369, 547 N.E.2d 1040.) Thus, when Dorothy died, her estate could acquire no greater interest in the property she received from Cecil’s estate than what she had prior to her death. When Dorothy became vested with legal title to the real estate, the note and mortgage were extinguished and her estate cannot resurrect the note because of her death. Dorothy had legal title to the real estate immediately upon Cecil’s death, and upon her death, legal title immediately passed to the objectors.

A decision is against the manifest weight of the evidence if, after review of the evidence, it is clearly evident that the conclusion opposite to the one reached by the trial court was the proper disposition. (Stone v. City of Arcola (1989), 181 Ill. App. 3d 513, 536 N.E.2d 1329.) The decision of the circuit court allowing the claim against Cecil’s estate was against the manifest weight of the evidence and is reversed.

Reversed.

STEIGMANN andKNECHT, JJ., concur.


author: JUSTICE McMORROW

text:
    JOSEPH DUFFY, Plaintiff, v. POULOS BROTHERS CONSTRUCTION COMPANY, Defendant and Counterdefendant-Appellee (The Village of Oak Lawn, Defendant and Counterplaintiff-Appellant).
    First District (4th Division)
    No. 1 — 90—3478
    Opinion filed December 19, 1991.
    — Rehearing denied March 9, 1992.

      Richard T. Wimmer and Philippe R. Weiss, both of Klein, Thorpe & Jenkins, Ltd., of Chicago, for appellant.
    Greg A. Kinczewski, of Tews, Theisen & Theisen, of Chicago, for appellee.
   JUSTICE McMORROW

delivered the opinion of the court:

The Village of Oak Lawn (the Village) appeals from the dismissal of its counterclaim against Poulos Brothers Construction Co. (Poulos) alleging that Poulos breached the parties’ construction contract by failing (a) to procure insurance naming the Village as an additional insured and (b) to indemnify and defend the Village against claims by Joseph Duffy the plaintiff in an action against the Village and Poulos.

On September 28, 1988, the parties entered into a contract for the construction of a public safety facility, i.e., a police and fire station, in Oak Lawn, Illinois. On March 6, 1989, Duffy, a laborer on the project, allegedly sustained serious injuries when he fell off a ladder on the construction site. Duffy filed a four-count complaint against Poulos and the Village. Counts I and II were directed against Poulos and alleged violations of the Structural Work Act (Ill. Rev. Stat. 1989, ch. 48, par. 60 et seq.) and negligence. Counts III and IV alleged violations of the Structural Work Act and negligence by the Village.

The Village filed its answer and an affirmative defense to Duffy’s negligence claim based on the Local Governmental and Governmental Employees Tort Immunity Act (Ill. Rev. Stat. 1989, ch. 85, pars. 2— 105, 2 — 207). The Village also filed a counterclaim against Poulos. Count I of the counterclaim alleged breach of contract by Poulos for Poulos’ failure to procure insurance coverage for the Village. In count I, the Village sought a judgment against Poulos in the amount of any damages for which the Village was found liable to Duffy and also for costs and expenses, including the costs of defending Duffy’s suit. Count II of the Village’s counterclaim sought contribution from Poulos. Duffy’s negligence claim against the Village was subsequently dismissed. The other counts of Duffy’s complaint remain pending in the trial court.

Poulos filed a motion to dismiss count I of the Village’s counterclaim for breach of contract. Poulos asserted that the indemnification provision in the contract was void as being contrary to Illinois public policy, as codified in section 1 of “An Act in relation to indemnity in certain contracts” (Ill. Rev. Stat. 1989, ch. 29, par. 61) (the Act or the Indemnity Act), and that the agreement to procure insurance was also unenforceable because it did not explicitly require that Poulos provide insurance coverage for the Village’s own negligence. Following briefing and arguments by the parties, the trial court granted Poulos’ motion to dismiss count I of the counterclaim. This appeal followed.

We first consider the Village’s contention that Poulos breached its promise to procure liability insurance which named the Village as an additional insured. Paragraph 11.5.1 of the contract, entitled “Certificate of Insurance — Owner as Additional Insured,” provides:

“The Owner, its officers, agents and employees shall be named as additional insureds on all insurance policies required to be purchased by the Contractor or a Subcontractor. A certificate of insurance, indicating the Owner, its officers, agents and employees as co-insureds shall be filed "with the Owner, by the Contractor, for each insurance policy required to be purchased by the Contractor or a Subcontractor.”

The insurance coverage Poulos was contractually required to obtain included comprehensive liability insurance and general liability insurance for bodily injury and property.

Poulos argues that the above-quoted insurance provision does not explicitly require it to provide insurance covering the Village’s own negligence and, thus, is void and unenforceable as being contrary to public policy. Poulos relies on Svenson v. Miller Builders, Inc. (1979), 74 Ill. App. 3d 75, 392 N.E.2d 628, and Westinghouse Electric Elevator Co. v. LaSalle Monroe Building Corp. (1946), 395 Ill 429, 70 N.E.2d 604, as support of its position.

Our analysis begins with a brief review of the law relating to indemnification and insurance in the construction industry. Prior to 1971, the supreme court held that agreements which indemnified another against that party’s own negligence were not necessarily void as against public policy. (John Griffiths & Son Co. v. National Fireproofing Co. (1923), 310 Ill. 331, 141 N.E.2d 739.) The general allowanee of indemnification agreements was qualified, however, by the supreme court in Westinghouse, which held that an indemnity contract will not be construed as indemnifying a party against its own negligence unless such a construction is required by clear and explicit language, or such intention is expressed in unequivocal terms in the indemnity agreement. The purpose of this rule of strict construction limiting the enforcement of contractual indemnity provisions was to insure that one agreeing to the extraordinary liability of indemnifying another against his own negligence was fully aware of the extent of his liability. Cox v. Lumbermens Mutual Casualty Co. (1982), 108 Ill. App. 3d 643, 439 N.E.2d 126.

In 1971, the legislature passed “An Act in relation to indemnity in certain contracts” (Ill. Rev. Stat. 1971, ch. 29, par. 61 et seq.) (the Act). Section 1 of the Act provides:

“With respect to *** construction [contracts] *** every covenant, promise or agreement to indemnify or hold harmless another person from that person’s own negligence is void as against public policy and wholly unenforceable.” (Ill. Rev. Stat. 1971, ch. 29, par. 61.)

The Act was intended to further public policy favoring regulation in the construction industry and also to arrest efforts to contractually avoid liability for negligence and to promote safe working conditions on construction sites. (Davis v. Commonwealth Edison Co. (1975), 61 Ill. 2d 494, 336 N.E.2d 881.) It was held in Cox v. Lumbermens Mutual Casualty Co. (1982), 108 Ill. App. 3d 643, 439 N.E.2d 126, followed by Long v. Bucyrus-Erie Co. (1983), 112 Ill. App. 3d 578, 445 N.E.2d 934, and Shaheed v. Chicago Transit Authority (1985), 137 Ill. App. 3d 352, 484 N.E.2d 542, that while the Westinghouse rule still applies to other indemnification contracts, it has been rendered a nullity with respect to indemnification agreements in the construction industry by reason of the enactment of section 1 of the Act.

Poulos contends that since the insurance provision in paragraph 11.5.1 of the contract is not an agreement to indemnify, barred by the Act, the Westinghouse rule of strict construction remains applicable. Poulos argues that the provision does not satisfy Westinghouse because it does not explicitly require Poulos to provide insurance covering the Village’s own negligence. Poulos also asserts that our recent opinion in Jokich v. Union Oil Co. (1991), 214 Ill. App. 3d 906, 574 N.E.2d 214, is incorrect. In Jokich, we held that the Westinghouse rule did not apply to the Jokich agreement, which required the contractor to procure comprehensive general liability insurance naming the owner as an additional insured. We decline to retreat from our opinion in Jokich.

Section 3 of the Act provides that “[t]his Act [barring indemnification for another’s negligence] does not apply to construction bonds or insurance contracts or agreements.” (Ill. Rev. Stat. 1989, ch. 29, par. 63.) In Capua v. W.E. O’Neil Construction Co. (1977), 67 Ill. 2d 255, 367 N.E.2d 669, the contractors challenged the constitutionality of section 3, alleging that it was an arbitrary exception to section 1 which voids all indemnity and hold-harmless agreements in the construction industry. The Capua court disagreed.

Quoting extensively from Davis, the Capua court reviewed at length the above-noted public policy reasons for passage of section 1 of the Act. The court then discussed the public policy considerations underlying the legislature’s decision to exempt those indemnity agreements contained in construction bonds and insurance contracts from the general prohibition of indemnity agreements in section 1. The court found no public policy conflict between sections 1 and 3. Rather, it determined that section 3, like section 1, was intended to promote the welfare of construction workers and the general public. The Capua court reasoned:

“[Section 3] protects the interests of construction workers and members of the general public who may suffer injury through improper construction or maintenance by preserving supplemental sources of compensation for injured persons, namely insurance and indemnifying and hold-harmless agreements in construction bonds. ***
*** [S]ections 1 and 3 are harmonious; they evidence a legislative intendment to protect the interests of the construction worker and the general public.” (67 Ill. 2d at 260-61.)

Although the agreement in Capua was in a construction bond, the court’s reasoning is also directly applicable to insurance agreements which, as the court noted, are expressly encompassed within section 3.

In the instant case, we recognize that the agreement at issue is not a section 3 contract of insurance but, rather, an agreement to obtain a contract of insurance. In contrast to a contract of insurance, under an agreement to obtain insurance, the promisor does not become the insurer or otherwise assume personal liability for injuries or damages for which the promisee may be liable. The promisor merely agrees to obtain the coverage and pay the premium for it. Once the insurance is obtained, the promisor bears no responsibility in the event of injury or damages, and is not liable even if the insurance carrier breaches the insurance contract through no fault of the promisor. Jokich v. Union Oil Co., 214 Ill. App. 3d at 910; Zettel v. Paschen Contractors, Inc. (1981), 100 Ill. App. 3d 614, 427 N.E.2d 189.

Since contracts of insurance are expressly allowed by section 3 of the Act and further the public interest in there being adequate sources of compensation for construction-related injuries, application of the rule of strict construction, the purpose of which was to restrict disfavored personal indemnity contracts, would inhibit rather than promote the public policy favoring insurance. Moreover, the purpose of being a named insured on a liability policy is to obtain protection against injuries and damages for which, by reason of its acts or omissions, the insured may become liable. (See generally J. Appleman, Insurance Law & Practice §§4252 through 4261 (Buckley ed. 1979).) Thus, we do not agree that an agreement to procure liability insurance which acts to protect the promisee must explicitly state that the insurance will cover the promisee’s “own negligence.”

The clause at issue is an agreement to purchase certain contracts of liability insurance and to name the Village as an additional co-insured. The extent of Poulos’ responsibility under the agreement was to obtain and pay the premiums on those policies. Poulos did not assume an unknown or extraordinary risk of liability for the Village’s negligence of the type indemnitors assumed in now-prohibited indemnity agreements in the construction industry. Poulos assumed only the limited and known responsibility of paying the premiums on the policies it agreed to obtain; and, had it fulfilled its promise to do so, it would not have been subject to further liability or responsibility for injuries, damages or the cost of defending claims alleged to have arisen out of the Village’s own negligence. The burden of such liability would have been borne by the insurer which accepted the premiums.

The Village’s counterclaim does not seek to compel Poulos to be either its insurer or indemnitor. The Village is suing for damages and costs of defense arising out of Poulos’ breach of its contractual duty to purchase insurance which named the Village as an additional co-insured. See Zettel v. Paschen Contractors, Inc., 100 Ill. App. 3d 614, 427 N.E.2d 189.

Poulos argues that our holding in Jokich contravenes the precedent set in Svenson v. Miller Builders, Inc. (1979), 74 Ill. App. 3d 75, 392 N.E.2d 628. We disagree. The contractual provisions at issue in Svenson are significantly different than those in the case at bar, in that in Svenson, the subcontractor agreed to procure liability insurance “to *** hold [the contractor] harmless from any claim for injury or damage.” (74 Ill. App. 3d at 79.) Thus it appears that only the subcontractor, and not necessarily the contractor, was required to be named as the party insured under the policy, and that, therefore, it was not intended that the insurer assume direct liability for claims against the contractor. In contrast, the agreement before us expressly required that Poulos have the Village named as a co-insured.

Further, there is nothing in Svenson indicating that the court considered the public policy interests underlying the development of the law relating to indemnity and insurance in the construction industry. Indeed, the court did not even mention the Indemnity Act. As we noted in Jokich, the Svenson court merely stated in summary fashion and without citation to any authority that “ ‘[although the instant case involves an agreement to procure insurance rather than to provide direct indemnity, we believe the general rule as adopted in Westinghouse remains applicable.’ ” (Jokich, 214 Ill. App. 3d at 912, quoting Svenson, 74 Ill. App. 3d at 88-89.) Thus, to the extent Svenson stands for the proposition that all construction agreements to purchase insurance are governed by the Westinghouse rule of strict construction, we respectfully decline to follow it.

As we stated in Jokich, we believe that our holding is supported by post-Svenson case law. In Zettel v. Paschen Contractors, Inc. (100 Ill. App. 3d 614, 427 N.E.2d 189), the court reversed the dismissal of the contractor’s suit for damages arising out of the subcontractor’s breach of its agreement to obtain insurance covering “all claims arising out of [the operation of] any structural work law.” (100 Ill. App. 3d at 615.) The agreement did not specifically state that the insurance was to cover the contractor’s “own negligence,” nor did it require that the contractor be named as an additional insured. Quoting the supreme court in Capua v. W.E. O’Neil Construction Co. (67 Ill. 2d 255, 367 N.E.2d 669), the Zettel court found that a promise to obtain insurance was fundamentally different from a promise to indemnify and, therefore, was not unenforceable as being contrary to public policy.

In Bosio v. Branigar Organization, Inc. (1987), 154 Ill. App. 3d 611, 612, 506 N.E.2d 996, the agreement required the contractor to “ ‘furnish public liability insurance *** indemnifying and saving harmless the [owner] from any and all personal injury claims arising *** by reason of the performance of this contract.’ ” Citing, inter alia, Capua and Zettel, the court reviewed the public policy interests favoring construction bonds and insurance contracts in the construction industry, and ruled that notwithstanding the language used, the provision was not an invalid indemnity contract but, rather, a valid and enforceable agreement to obtain insurance covering claims against the owner.

Similarly, in St. John v. City of Naperville (1987), 155 Ill. App. 3d 919, 508 N.E.2d 1128, the court applied the standard rules of contract construction and found that by the plain language used, the agreement expressed the parties’ intent that the contractor was to secure insurance covering claims against the city. The court held that the contractor was liable to the city for the costs of defending the underlying action by the injured worker and for a sum equal to any judgment entered against the city in that suit by reason of its breach of the agreement.

In none of these cases, i.e., Zettel, Bosio or St. John, was the Westingkouse rule applied or discussed in determining that the agreements to obtain insurance were enforceable. Neither was the Westinghouse rule mentioned by the supreme court in Capua, in the court’s discussion of the public policy favoring insurance and construction bonds.

It is clear from the language used in the insurance clause at issue that the intent of the parties was that Poulos would purchase numerous liability insurance policies under each of which the Village was to be named as a co-insured and thereby protected against loss or liability for personal injuries. Absent some other evidence which would defeat the Village’s counterclaim, Poulos’ acknowledged failure to do so constituted a breach of a valid and enforceable agreement. Consequently, the order of the trial court dismissing count I of the Village’s counterclaim for breach of contract must be reversed.

The agreement in this case also contained an indemnity provision which states:

“To the fullest extent permitted by law, [Poulos] shall indemnify and hold harmless the [Village] *** from and against claims, any and all damages, losses and expenses, including but not limited to attorneys’ fees arising out of or resulting from performance of the Work by of [sic] [Poulos], a Subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, regardless of whether or not such claim, damage, loss or expense is caused in part by a party indemnified hereunder.” (Emphasis added.)

Poulous argues that the phrase we have italicized purports to promise indemnification of the Village against its own negligence and, therefore, is contrary to public policy and void and unenforceable under section 1 of the Act.

The Village asserts that the statute is meant only to prohibit indemnity which relieves one of liability arising exclusively from that party’s own negligence. The Village points out that Duffy’s complaint contains identical allegations of Structural Work Act violations against it and Poulos. Thus, the Village argues, since Duffy’s claim is not based exclusively on alleged wrongful conduct by the Village, but also on alleged wrongful conduct by Poulos, it, the Village, is at least entitled to a defense of the claim by Poulos under the above-quoted provision. We disagree.

The Village cites no authority, nor have we found any, which interprets the Act to apply only to indemnification for liability which arises exclusively from one’s own negligence. Section 1 of the Act (Ill. Rev. Stat. 1989, ch. 29, par. 61) prohibits “every covenant, promise or agreement” to indemnify another from that person’s own negligence without qualification or limitation.

Here, Duffy’s complaint alleges wilful violations by the Village of the Structural Work Act. In order to be found culpable of a “wilful violation,” it is only necessary that a defendant knew or, in the exercise of reasonable care, should have known of the existence of the dangerous condition. (Ryan v. E.A.I. Construction Corp. (1987), 158 Ill. App. 3d 449, 511 N.E.2d 1244.) Even a defendant who is only passively or technically negligent may be found liable under the Structural Work Act. (Motor Vehicle Casualty Co. v. G S F Energy, Inc. (1989), 193 Ill. App. 3d 1, 549 N.E.2d 884.) Whether or not Duffy sustains his claim against the Village is irrelevant, because the claim itself is based on alleged negligence by the Village. Because the clause at issue purports to promise indemnification for all damages and expenses, including defense costs, for claims arising from the Village’s own negligence, it is void and wholly unenforceable as being in contravention of the Act, and the Village cannot seek any form of indemnification from Poulos under this clause.

For the reasons stated, the order of the trial court dismissing that portion of the Village’s counterclaim against Poulos for breach of contract is reversed; the dismissal of that portion of the Village’s counterclaim seeking indemnification from Poulos is affirmed; and the cause is remanded for further proceedings not inconsistent with this opinion.

Reversed in part, affirmed in part and remanded.

JOHNSON and LINN, JJ., concur.


author: JUSTICE RIZZI

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. DWAIN HOLLOWAY et al., Defendants-Appellants.
    First District (3rd Division)
    Nos. 1 — 88—2971,1—88—2995 cons.
    Opinion filed July 24, 1991.
    — Rehearing denied March 12, 1992.

      Randolph N. Stone, Public Defender, of Chicago (Timothy J. Leeming, Assistant Public Defender, of counsel), for appellants.
    Jack M. O’Malley, State’s Attorney, of Chicago (Renee Goldfarb, Walter P. Hehner, and Thomas J. Byrne, Assistant State’s Attorneys, of counsel), for the People.
   JUSTICE RIZZI

delivered the opinion of the court:

Defendants Dwain Holloway and Ronald Rolark were convicted of armed robbery (Ill. Rev. Stat. 1985, ch. 38, par. 18—2) in a bench trial. Holloway was sentenced to 14 years’ imprisonment, and Rolark was sentenced to eight years. On appeal, Holloway argues that (1) he was not proven guilty beyond a reasonable doubt where no gun was recovered and testimony indicating that he used a gun was incredible, impeached, contradicted, and should have been disregarded; (2) he was denied a fair trial where evidence was introduced of a prior incident involving what appeared to be a gun; and (3) the admission of incriminating hearsay testimony by Rolark that Holloway had a gun violated Holloway’s sixth amendment right to confront witnesses against him. Rolark argues that the State failed to prove beyond a reasonable doubt that he had the specific intent to assist in the crime committed by Holloway. We affirm.

At approximately 8 p.m. on January 5, 1987, defendants entered TNT Subs and Gyros Restaurant located at 8637 South Ashland Avenue, Chicago, Illinois. Holloway began yelling for some food. The cashier told him that he would have to wait in line. Defendants spoke briefly to each other and then Holloway again began to demand food. The cashier again told Holloway that he was going to have to wait in line. Holloway pulled out a gun and pointed it at the cashier. The cashier ran away from the register, and Holloway approached the register.

Timothy Koutsis was working as a cook at TNT Subs and Gyros Restaurant. He observed the disturbance and grabbed a shotgun which was located on the back counter, pointed it at Holloway and Rolark, and told Holloway to put the gun down or that he would shoot him. Rolark pleaded with Mr. Koutsis not to shoot them and pulled Holloway towards the front door, where they exited and ran away together in the same direction.

About 30 minutes later, defendants entered the Burger King Restaurant (Burger King) at 1818 West 87th Street, Chicago, Illinois, which is located approximately four blocks west of TNT Subs and Gyros Restaurant. Yvette Burbridge was the manager on duty at that time, and Clarence Wilkerson and Linda Jones were working behind the counter serving food. At that time, there were no customers in the restaurant.

Rolark asked Ms. Burbridge where the men’s room was located. After being told where it was, Rolark pushed open the door to the employees’ room. Ms. Burbridge told Rolark that he could not go into the employees’ room. Rolark then went into the men’s room. Upon exiting the men’s room, Holloway asked Rolark what he wanted to eat. Rolark told Holloway to get him anything, and Holloway went up to the front counter presumably to order some food. Rolark sat down with Ms. Burbridge’s sister and her friend at a table and began to engage with them in “some kind of wild conversation.”

Holloway placed an order for a cheeseburger with Linda Jones. Ms. Jones went to the back kitchen to wash dishes, and Clarence Wilkerson began to prepare the food. While preparing the food, Mr. Wilkerson observed Holloway step towards the end of the counter and intermittently look into the dining area where Rolark was talking to Ms. Burbridge, her sister and their friend. Mr. Wilkerson then carried the food out to the front counter, where he called out Holloway’s order.

At this point, Mr. Wilkerson observed Holloway engaging in strange behavior, including repeating “Cheeseburger. Cheeseburger” and “Ninety-eight cents. Ninety-eight cents,” and called Ms. Jones to the front counter to observe Holloway’s behavior. Before Ms. Jones arrived at the front counter, Holloway jumped over the counter and placed a gun to the side of Mr. Wilkerson’s head and demanded that he open the cash register. At that point, Ms. Burbridge saw Holloway on the employees’ side of the counter holding a gun. She ran into the employees’ room and called the police.

When the register was opened, Holloway removed approximately $60, and hopped back over the counter and ran outside. Holloway dashed around to the side of the restaurant and started banging wildly on the window in order to get Rolark’s attention. The window shattered, and Holloway sprinted away down a nearby alley. Rolark then proceeded up to the front counter and asked for the food. Rolark took the food and walked out the front door.

As Rolark was walking away through Burger King parking lot, the police arrived on the scene and were informed by Burger King employees that Rolark was one of the two offenders. The police immediately arrested Rolark. Holloway was observed a short distance away by police. When Holloway spotted the police car, he ran down an alley, hopped over a fence, and ran into a basement stairwell. The police ordered Holloway to exit the stairwell and placed him under arrest. The police recovered $55 in currency and approximately $6 in coins. A gun was not recovered either on Holloway’s person or at the scene.

Holloway first contends that he was not proven guilty beyond a reasonable doubt where no gun was recovered and testimony indicating that he used a gun was incredible, impeached, contradicted, and should have been disregarded. We disagree.

The reviewing court must determine, after viewing the evidence in a light most favorable to the prosecution, whether any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. (People v. Young (1989), 128 Ill. 2d 1, 48-49, 538 N.E.2d 461, 472, citing Jackson v. Virginia (1979), 443 U.S. 307, 61 L. Ed. 2d 560, 99 S. Ct. 2781.) On review, the trial court’s judgment will not be set aside unless the proof is so unsatisfactory, improbable or implausible as to justify a reasonable doubt as to the defendant’s guilt. People v. Slim (1989), 127 Ill. 2d 302, 307, 537 N.E.2d 317, 319.

Holloway argues that he used a plastic gun during the incident at the TNT Subs and Gyros Restaurant and denies using a gun at all during the robbery of Burger King. Holloway claims that Mr. Wilkerson’s testimony is unreliable because Mr. Wilkerson could not remember what hand Holloway held the gun in and was unclear from where Holloway pulled the gun. Additionally, Holloway asserts that Mr. Wilkerson’s testimony and Mr. Koutsis’ testimony are inconsistent because Mr. Wilkerson testified that the .45 caliber pistol was brown and Mr. Koutsis testified that the .45 caliber pistol was black. Finally, Holloway argues that because no gun was recovered, the State did not prove beyond a reasonable doubt that Holloway used a gun while committing the robbery.

A careful review of the record in a light most favorable to the prosecution demonstrates that a rational trier of fact could have found Holloway guilty of armed robbery beyond a reasonable doubt. There is nothing unsatisfactory, improbable or implausible about the evidence presented in this trial. The State presented the clear and consistent testimony of Mr. Wilkerson, which was corroborated by two other witnesses who testified that they saw Holloway with a gun. Mr. Wilkerson testified that Holloway placed what he described as a brown .45 caliber pistol to the right side of his head and told him that he better figure how to get the money out of the cash register. Ms. Burbridge testified that she saw Holloway on the employees’ side of the counter holding a gun to Mr. Wilkerson’s head. Additionally, Mr. Koutsis testified that he saw Holloway pull out a gun and point it at the cashier only 30 minutes earlier at TNT Subs and Gyros Restaurant. Mr. Koutsis observed Holloway’s gun from about 10 to 15 feet away. Mr. Koutsis testified that he was familiar with guns and frequently handled them. He testified that the gun appeared to be a .45 caliber pistol that was dark in color. Mr. Koutsis was positive that Holloway was holding a real gun.

We conclude that the State proved beyond a reasonable doubt that Holloway used a gun when committing the robbery of Burger King. While Holloway argues that he could not properly be convicted of armed robbery when the gun was not recovered, this contention is without merit. See People v. Fitzgerald (1988), 171 Ill. App. 3d 218, 524 N.E.2d 1190.

Holloway’s second argument is that he was denied a fair trial because evidence was introduced of a prior incident involving what appeared to be a gun. We disagree.

Evidence of other crimes committed by a defendant may be admitted to prove modus operandi, motive, intent, state of mind, absence of an innocent frame of mind, identification of a weapon, or existence of a common scheme, design, or plan. (People v. Kimbrough (1985), 138 Ill. App. 3d 481, 484-85, 485 N.E.2d 1292, 1296.) Evidence of other crimes committed by defendant may be admitted if relevant to establish any material question other than propensity of the defendant to commit a crime. (Kimbrough, 138 Ill. App. 3d at 484, 485 N.E.2d at 1296.) The determination of the admissibility of evidence rests primarily in the discretion of the trial court, and its decision will not be reversed unless clear abuse is shown. People v. Enis (1990), 139 Ill. 2d 264, 281, 564 N.E.2d 1155, 1161.

At trial, the judge allowed the testimony of Mr. Koutsis regarding the prior incident at TNT Subs and Gyros Restaurant, stating that it could be used for any purpose other than to show propensity to commit crime. We conclude that Mr. Koutsis’ testimony that Holloway brandished a gun at TNT Subs and Gyros Restaurant only 30 minutes prior to the robbery at Burger King was not improperly introduced for the purpose of showing the propensity of this defendant to engage in criminal activity, but rather was properly introduced to show intent, the existence of a weapon, modus operandi, and a common scheme or plan. Accordingly, we hold that the trial court properly admitted the testimony of Mr. Koutsis pertaining to the incident occurring 30 minutes earlier at TNT Subs and Gyros Restaurant.

Holloway’s third argument is that the admission of incriminating hearsay testimony by Rolark that Holloway had a gun violated his sixth amendment right to confront witnesses against him. This contention is without merit.

In Bruton v. United States (1968), 391 U.S. 123, 126, 20 L. Ed. 2d 476, 479, 88 S. Ct 1620, 1622, the Supreme Court held that in a joint trial the admission into evidence of one defendant’s confession which implicates the second defendant constituted prejudicial error even though the trial court gave clear and concise instructions that the confession could be used only against the defendant who confessed and must be disregarded with respect to the other defendant. In Nelson v. O’Neil (1971), 402 U.S. 622, 629-30, 29 L. Ed. 2d 222, 228, 91 S. Ct. 1723, 1727, however, the Supreme Court limited the holding in Bruton to cases where the declarant-defendant does not testify at trial. Illinois has consistently applied the Nelson rationale for limiting the Bruton rule. See People v. Jones (1983), 116 Ill. App. 3d 233, 451 N.E.2d 1358; People v. Morris (1979), 79 Ill. App. 3d 318, 398 N.E.2d 38.

At trial, Officer James Cloonan was asked on direct examination what Rolark said during a conversation they had after Rolark’s arrest. Officer Cloonan responded, “[Rolark] told me that he never had the .45, that Holloway had the .45.” Holloway failed to object at trial.

In this case, Rolark testified in his own defense, giving Holloway the benefit of full and effective cross-examination. We, therefore, hold that Officer Cloonan’s hearsay testimony which corroborated an eyewitness’ testimony that Holloway had a gun during the robbery at Burger King did not violate Holloway’s sixth amendment right to confront witnesses against him.

Rolark contends that the State failed to prove beyond a reasonable doubt that he had the specific intent to assist in the crime committed by Holloway. We disagree.

In order to establish a defendant’s legal accountability for a crime, the State must prove beyond a reasonable doubt that the accused solicited, aided, abetted, agreed, or attempted to aid another person in the planning or commission of the offense, that such participation occurred either before or during perpetration of the crime, and that this participation was with concurrent specific intent to promote or facilitate commission of the offense. (Ill. Rev. Stat. 1985, ch. 38, par. 5 — 2; People v. Brown (1990), 197 Ill. App. 3d 907, 915-16, 557 N.E.2d 199, 205.) The key element in accountability is affirmative conduct on the part of an accomplice that in some way aids, encourages, or incites another person to commit an illegal act. (People v. Powers (1920), 293 Ill. 600, 602-03, 127 N.E. 681, 682.) A person may be found guilty under an accountability theory if he either acts as a decoy or distracts the victim. (See People v. Perruquet (1988), 173 Ill. App. 3d 1054, 527 N.E.2d 1334; People v. Williams (1987), 157 Ill. App. 3d 496, 510 N.E .2d 445.) Although one’s presence at the scene of a crime is insufficient to establish legal accountability for commission of an offense, one may aid or abet without actively participating in the overt act. (People v. Grice (1980), 87 Ill. App. 3d 718, 725, 410 N.E .2d 209, 215-16.) In addition, words of agreement are not necessary to demonstrate a common purpose to perpetrate a crime for purposes of legal accountability since common design can be inferred from circumstances surrounding the commission of the unlawful act. Grice, 87 Ill. App. 3d at 725, 410 N.E.2d at 216.

Here, defendants walked into Burger King together immediately following the incident at TNT Subs and Gyros Restaurant. Ms. Burbridge testified that as defendants entered the Burger King, Rolark attempted to enter the employees’ room. Immediately thereafter, Rolark had a brief discussion with Holloway and went to the back patio of the restaurant. Ms. Burbridge testified that Rolark was attempting to distract her and her sister and their friend by engaging them in “some kind of wild conversation.” After Holloway had removed the money from the cash register, he exited Burger King, ran around the side of the store and banged wildly on the window to get Rolark’s attention. While banging on the window, it broke. Rolark then proceeded to the front of the store, took the food that had been ordered by Holloway and exited the store. Additionally, Ms. Burbridge’s sister and friend stated that Rolark had something to do with the robbery, and so informed police. We conclude that the evidence establishes beyond a reasonable doubt that Rolark had the specific intent to aid or abet in the armed robbery of Burger King by acting as a decoy or distraction to the employees and customers of the restaurant. We therefore hold that the trial court did not err in finding Rolark guilty of armed robbery pursuant to an accountability theory under section 5 — 2 of the Criminal Code of 1961 (Ill. Rev. Stat. 1985, ch. 38, par. 5 — 2).

Accordingly, the judgment of the circuit court is affirmed.

Affirmed.

CERDA, P.J., and GREIMAN, J., concur.