author: JUSTICE STEIGMANN JUSTICE GREEN,

text:
    THE DEPARTMENT OF TRANSPORTATION ex rel. THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellant, v. CENTRAL STONE COMPANY et al., Defendants-Appellees.
    Fourth District
    No. 4—89—0939
    Opinion filed August 2, 1990.
    Rehearing denied September 5, 1990.

      GREEN, J., specially concurring.
    Neil F. Hartigan, Attorney General, of Springfield (Robert W. Neirynck, Special Assistant Attorney General, of Bloomington, and Michael J. Luke, Assistant Attorney General, of Springfield, of counsel), for appellant.
    Keefe, Gorman & Brennan, of Quincy (Jerry L. Brennan, of counsel), for appellees.
   JUSTICE STEIGMANN

delivered the opinion of the court:

The Department of Transportation (DOT) appeals from a jury verdict awarding a landowner, Central Stone Company, compensation totaling $1,776,300 for land taken by DOT in eminent domain proceedings. DOT argues that Thomas Newman, a valuation expert called by Central Stone, improperly valued only the limestone reserves rather than the land as a whole.

We agree and remand for a new trial.

The Illinois Constitution states, “[p]rivate property shall not be taken or damaged for public use without just compensation as provided by law.” (Ill. Const. 1970, art. I, §15.) The purpose of this provision is not to place the owner in a better position than he was in before his land was taken, but to make him whole. (Department of Public Works & Buildings v. Hubbard (1936), 363 Ill. 99, 103, 1 N.E.2d 383, 385.) “Just compensation is the fair market value of the property at its highest and best use on the date of filing of the petition.” Department of Public Works & Buildings v. Association of Franciscan Fathers (1977), 69 Ill. 2d 308, 314, 371 N.E.2d 616, 618.

“The highest and best use may be the present use to which the property is actually put or:
‘any capacity for future use which may be anticipated with reasonable certainty, though dependent upon circumstances which may possibly never occur, *** if it in fact enhanced the market value of the land in its present condition and state of improvement. The future prospective use affecting value must be a present capacity for a use which may be anticipated with reasonable certainty and made the basis of an intelligent estimate of value.’ Crystal Lake Park District v. Consumers Co. (1924), 313 Ill. 395, 406.”
City of Chicago v. Anthony (1990), 136 Ill. 2d 169, 174-75, 554 N.E.2d 1381, 1383-84.

The fair market value of the property is the measure for determining just compensation. (City of Chicago v. Cunnea (1928), 329 Ill. 288, 295, 160 N.E. 559, 562.) The Code of Civil Procedure defines “fair market value” as follows:

“Except as to property designated as possessing a special use, the fair cash market value of property in a proceeding in eminent domain shall be the amount of money which a purchaser, willing but not obligated to buy the property, would pay to an owner willing but not obliged to sell in a voluntary sale, which amount of money shall be determined and ascertained as of the date of filing the complaint to condemn. In the condemnation of property for a public improvement there shall be excluded from such amount of money any appreciation in value proximately caused by such improvement, and any depreciation in value proximately caused by such improvement. However, such appreciation or depreciation shall not be ex-eluded where property is condemned for a separate project conceived independently of and subsequent to the original project.” Ill. Rev. Stat. 1987, ch. 110, par. 7 — 121.

There are three methods for calculating fair market value:

“The cost approach consists, basically, of estimating the value of the land and then adding to it the value of the improvements less depreciation. *** The market approach is used by finding similar land and improvements which have recently been sold, and then comparing those with the present real estate to determine a fair value. The income approach is reached by determining what income the real estate would produce if it were rented.” (Department of Transportation v. Quincy Coach House, Inc. (1976), 64 Ill. 2d 350, 354, 356 N.E.2d 13, 15.)

The Illinois Supreme Court has approved of each of these methods of valuation “if the proper circumstances are present.” People ex rel. Director of Finance v. YWCA (1979), 74 Ill. 2d 561, 571, 387 N.E.2d 305, 310.

The presence of minerals under the surface affects the valuation of condemned land.

“It is the rule in Illinois that minerals deposited on land to be condemned should not be considered separately in any determination of value. Department of Public Works and Buildings v. Hubbard, 363 Ill. 99, 102, 1 N.E.2d 383; Forest Preserve Dist. of Cook County v. Caraher, 299 Ill. 11, 17, 132 N.E. 211. It is felt that a separate valuation on the deposits must include the elements of prospective profits, market demands, costs and other factors of a speculative nature and therefore are too uncertain to be properly employed. City of Chicago v. Central Nat. Bank in Chicago, 5 Ill. 2d 164, 125 N.E.2d 94. It is proper, however, to consider the presence of the minerals as part of the overall value of the land.” Illinois Buildinq Authority v. Dembinsky (1967), 90 Ill. App. 2d 451, 455, 233 N.E.2d 38, 40.

See also Department of Transportation v. Toledo, Peoria & Western R.R. Co. (1979), 75 Ill. 2d 436, 389 N.E.2d 546; Department of Transportation v. Mullen (1983), 120 Ill. App. 3d 268, 457 N.E.2d 1362.

When only a portion of the owner’s land is taken by eminent domain, additional issues are raised. First, the trier of fact must determine what is to be paid for the portion taken. Next, the trier of fact must decide whether the remainder has been damaged and, if so, the amount of compensation for the damage. (Department of Transportation v. Bouy (1979), 69 Ill. App. 3d 29, 39, 386 N.E.2d 1163, 1170.) The portion of the tract to be taken in eminent domain must first be valued as a part of the whole tract before the taking and not as a separate piece of property. (Tri State Park District v. First National Bank (1975), 33 Ill. App. 3d 348, 337 N.E.2d 204.)

“The measure of compensation for land not taken by the improvement is the difference between the fair cash market value of such property before and after the improvement. (Illinois Power Co. v. Wieland, 324 Ill. 411; Brand v. Union Elevated Railroad Co. 258 [Ill.] 133.) Compensation for land taken is to be estimated on the value of the land as land, with all its capabilities.” (Hubbard, 363 Ill. at 101-02, 1 N.E.2d at 384.)

(See also Department of Transportation v. Shell Oil Co. (1987), 156 Ill. App. 3d 304, 306, 509 N.E.2d 596, 598; Department of Public Works & Buildings v. Crumbaugh (1971), 1 Ill. App. 3d 761, 762, 274 N.E.2d 161, 162.) “The measure of recovery for damages to the remainder in a condemnation action is the depreciation in market value of the remainder resulting from the taking.” Department of Transportation v. Hsueh (1983), 117 Ill. App. 3d 945, 947, 454 N.E.2d 360, 362.

The market approach, also known as the comparable sales approach, is appropriate for valuing the condemned property in this case. This approach looks “to comparable sales of land based on similarities in locality, character, time, proximity, market conditions, improvements, and modes of payment.” (People ex rel. Department of Transportation v. Birger (1987), 155 Ill. App. 3d 130, 134, 507 N.E.2d 1321, 1324.) Evidence of a comparable sale provides the jury with an objective market evaluation against which it can consider an appraiser’s valuation of the property. Birqer, 155 Ill. App. 3d at 135, 507 N.E.2d at 1325.

In this case, DOT filed a complaint for condemnation against Central Stone on October 7, 1987, seeking to take 30 of 172 acres owned by Central Stone and operated as a limestone quarry. DOT needed the land for construction of Federal Aid Route 408, also known as the Central Illinois Expressway. Central Stone purchased the land in 1974 for $525 an acre and began quarry operations around 1980. The property in question is also known as the Fesler property.

The Pike County circuit court permitted a quick-take on October 29, 1987, and ordered DOT to pay Central Stone $177,000 compensation. The court amended its order on May 3, 1988, and directed DOT to pay $761,787.60 as compensation.

Prior to trial, the circuit court granted DOT’s motion in limine, preventing Central Stone’s valuation witnesses from testifying to the following:

“1. an opinion on the value of the subject property by using the product of the estimated amount of mineral deposits and a fixed price per unit;
2. an opinion on the value of the subject property based on a capitalization of the present or future value of the quarry business;
3. an opinion on the fair market value of the mineral deposits apart from the value of the subject property;
4. an opinion on valuation of the subject property based on past or future profits of the quarry business;
5. testimony on the quantity and price of minerals in the absence of the introduction of a market for said commodity.”

Trial began on September 18, 1989, with the testimony of Richard Klinster, a geologist for Central Stone. He testified that most of the limestone reserves on the property were in the portion remaining after the taking. He also testified it would not be economically feasible to quarry the reserves after the taking by DOT. Roger Akers, a self-employed farm appraiser called by Central Stone, opined that the highest and best use of the property was for agriculture. He used the comparable sale approach and valued the remaining land at $35,345. After the taking, he estimated there were 49.2 tillable acres in the remaining tract.

Trial continued the following day and began with the jury viewing the premises. Central Stone then called Thomas Newman, an industrial minerals geologist employed by J.M. Huber Corporation of Quincy, Illinois. He appraises limestone quarries for his employer and appraised the Fesler property at Central Stone’s request. He appraised the property as of October 7, 1987, the date DOT filed its condemnation petition. After examining the Fesler property and geological data about it, Newman concluded the property’s highest and best use was as a quarry.

Newman valued the whole property, before the taking, at $1,826,000. He valued the portion taken by the State at $318,000. The value of the remainder before the taking was the difference between the two figures above, or $1,508,000. He expressed no opinion as to the value of the remainder after the taking, but testified the remainder was no longer viable as a quarry.

On cross-examination, Newman testified he normally uses the income approach to value quarries. In this case, however, he used the market approach because he understood it to be the only acceptable method under Illinois law. He compared the Fesler property to the 40-acre Kinderhook quarry sold by Hanesco to Western Illinois Stone Company, the same corporate entity as Central Stone, in October 1986. The Kinderhook property sold for $31,746. The Kinderhook quarry is part of the same geological formation as the Fesler property and so the stone quality was identical. The Kinderhook property was valued at $720 per acre. Newman estimated the Kinderhook property had 500,000 tons of limestone. On the other hand, the Fesler property had 29 million tons of reserves and so Newman made adjustments for quantity and valued the property at approximately $10,000 per acre. He arrived at these figures by dividing his $1,826,000 valuation of the Fesler property by 172 acres, the total acreage, which gave him a price per acre. He then multiplied that figure by 30 acres, the portion taken by the State, to arrive at $318,000 as the value of the land taken.

James Ellis, president of Central Stone, was Central Stone’s final witness. He agreed with Newman’s valuation of the land. He believed the 30 acres taken by the State were the “key” to the entire tract and the remainder would be suitable only for farming.

DOT’s only witness was Wayne Briggs.. He testified that the highest and best use of the Fesler property was for agriculture. He calculated the fair market value of the land on October 7, 1987, as $465 per acre, or $80,000 total. He valued the portion taken by the State at $16,500 and estimated $250,000 as the cost of curing damages to the remainder. Then he testified that if the remainder was used for agricultural purposes, it would suffer no damage.

The jury awarded Central Stone $318,000 as the value of the land taken and $1,458,300 as damages to the remainder. The circuit court entered judgment on the verdict, which totaled $1,776,300, on September 20,1989. DOT’s motion for post-trial relief was denied.

The primary issue on appeal is whether the circuit court erred in refusing to strike Newman’s valuation testimony. We conclude the circuit court should have stricken Newman’s testimony because he equated the value of the minerals with the value of the land, as shown by the following cross-examination:

“[DEFENDANT’S COUNSEL]: And that’s the same thing, the figure, the value of the land, taking the fact that there’s minerals there is the same as the mineral wealth?
[NEWMAN]: I believe so.
[DEFENDANT’S COUNSEL]: And that’s how you arrived at what, with your approach on the reserves?
[NEWMAN]: Yes.
[DEFENDANT’S COUNSEL]: And there’s no, at the time of the taking, there was no value to the land apart from its mineral wealth?
[NEWMAN]: I believe once again the criteria is highest and best use. As a quarry, you have to use the mineral wealth. There was farming above that, but I’m not a farm appraiser.”

Newman later testified: “In farming acres is the proper way I guess of doing an appraisal. I’m not a farm appraiser. But in stone, stone is a function of volume, and so you do have to go to depth. We do use the term acre feet. One acre rock one foot thick and how deep it goes.” Newman’s valuation violated the rules of Illinois Supreme Court cases, which have held that minerals are not to be valued separately from the land.

The rule violated in this case originated in Forest Preserve District v. Caraher (1921), 299 Ill. 11, 132 N.E. 211, a case involving timber rather than minerals. There, in a condemnation case, the circuit court permitted a landowner’s witness to testify to the value of timber upon the land to be taken. The supreme court noted the opinion of the witness was stated in terms of the value of the timber as it stood, uncut. However, the court concluded the witness was stating the value of the timber as cut lumber with a deduction taken for the cost of cutting. The court also noted no evidence was produced as to what the land would be worth after the trees were removed. The supreme court set forth the following language: “The rule is that compensation must be estimated for the land as land, with all its capabilities, and if there is timber on it, or coal, oil or other minerals under the surface, they are to be considered so far as they affect the value of the land, but they cannot be valued separately.” Caraher, 299 Ill. at 17, 132 N.E. at 213.

The primary case involving valuation of minerals is Department of Public Works & Buildings v. Oberlaender (1969), 42 Ill. 2d 410, 247 N.E.2d 888. The condemned property in Oberlaender included a sand quarry in operation for more than 50 years. At trial the parties presented evidence on the nature and character of the sand, its actual and potential uses, the ways in which it differed from sand deposits on other similar properties, and the property’s favorable location with respect to the sand market, transportation, and market potential. Evidence conflicted as to the quantities of sand on the property.

Three valuation witnesses testified. Davis valued the condemned portion at $600,000, based on what could be realized from the sand deposits if processed using normal methods. He valued the sand as part of an ongoing business and based his opinion on what the property would be worth if he were to buy the sand and the business. Chadwick valued the condemned property at $550,000. He independently valued the sand deposit with a dollar value set on reserves, considering a unit market price and then adding this to the value of the land remaining after the sand was removed. Reese valued the condemned tract at $625,000, after valuing the property as sand deposited in the ground. He used a projection of the owner’s increasing production record to reach his opinion. The jury returned a verdict awarding $600,000. The appellate court reversed, and the Illinois Supreme Court affirmed the appellate court.

The supreme court ruled that the circuit court should have stricken the valuation testimony of all three valuation witnesses. The court quoted the rule from Caraher and then reworded it for clarification:

“Putting it somewhat differently, where, as here, the property is not taken for the purpose of obtaining the minerals or a going business [citations], it is improper to appraise separately the mineral deposit and add its value to the value of the land without the deposits [citations]. It is proper, however, for the owner to establish the existence of valuable mineral deposits on the real estate being valued and in doing this to show the character of the deposits) and to what extent it enhances the land’s market value.” Oberlaender, 42 Ill. 2d at 415-16, 247 N.E.2d at 892.

The Oberlaender opinion cited, as authority for the foregoing rule, the case of Department of Public Works & Buildings v. Lotta (1963), 27 Ill. 2d 455, 199 N.E.2d 238. There, the court held a trial court had not erred when, in a condemnation case, it struck the testimony of a landowner’s appraiser who valued land by adding his estimate of the value of the improvements on the land to his estimate of the value of the land without the improvements. The theory of the supreme court’s ruling was that the actual fair cash market value of a property does not necessarily equal the sum of the values which might be placed on its attributes. Similarly, the actual fair cash market value of a tract containing mineral deposits is not necessarily the sum of values which might be placed separately on the land and its deposits.

Two clear rules arise from Caraher and Oberlaender concerning valuation of land containing resources which can be extracted. One rule, not directly involved here, is that the resources must be considered on the basis that they add to the total value of the tract and not directly as to the sales price after extraction. The other rule is that the value of the land and a separate value of the resources cannot be added to create a value for the tract. The obvious reason for the latter rule is, as explained by Justice Schaefer in Lotto,, that the value of land does not always equal the sum of the value of all of its parts, and some if its attributes may impair the value of others.

In Department of Transportation v. Toledo, Peoria & Western R.R. Co. (1979), 75 Ill. 2d 436, 389 N.E.2d 546, the State sought the land only to remove fill material for use in highway construction. Before condemnation proceedings began, the railroad sold fill material from the property to a contractor for use in the highway construction at 12 cents per cubic yard. The railroad argued that just compensation was 12 cents per cubic yard of fill material removed. The supreme court disagreed. Reiterating its holding in Oberlaender, the court held the land had to be valued as a whole, not just as fill material in that particular market.

Newman’s testimony violated the rules of these cases and should have been stricken. Although an expert may express an opinion as to the fair cash market value of a piece of property in an eminent domain case, the circuit court must first determine whether the facts or data upon which the opinion is based are admissible.

“The proper factors which may be taken into consideration in determining just compensation must be determined by the trial court as a question of law. (Johnson, 343 Ill. at 16.) An expert in valuation of property for condemnation purposes may only rely upon facts or data which are legally relevant to the issue of the fair cash market value of the property in question. To the extent that an expert relies upon facts or data which are irrelevant to proving the fair cash market value of the property in question, then the facts or data so relied upon would not be based upon lawful elements of damage and would be of no benefit to a jury. Illinois Power & Light Corp. v. Talbott (1926), 321 Ill. 538, 544.” Anthony, 136 Ill. 2d at 187, 554 N.E.2d at 1389.

We conclude that Newman’s testimony was an opinion on the fair market value of the mineral deposits apart from the value of the property, and, as such, should not have been admitted into evidence. We find its admission to be reversible error.

“It is clear that where an award is made by a jury in an eminent domain proceeding in which the evidence is conflicting and the jury views the property and fixes the amount of compensation within the range of the evidence, the verdict will not be disturbed unless there has been a clear and palpable mistake or a showing that the verdict was the result of passion or prejudice.” City of Freeport v. Fullerton Lumber Co. (1981), 98 Ill. App. 3d 218, 223-24, 423 N.E.2d 924, 928-29.

See also Oak Brook Park District v. Oak Brook Development Co. (1988), 170 Ill. App. 3d 221, 243, 524 N.E.2d 213, 227; Department of Conservation v. Dorner (1989), 192 Ill. App. 3d 333, 342, 548 N.E.2d 749, 754; Central Illinois Public Service Co. v. Rider (1957), 12 Ill. 2d 326, 329, 146 N.E.2d 48, 50; Kassnel v. Village of Rosemont (1985), 135 Ill. App. 3d 361, 371, 481 N.E.2d 849, 856.

In this case there was a clear and palpable mistake, necessitating reversal.

The second issue on appeal is whether the circuit court erred in allowing James Ellis, president of Central Stone, to testify to the value of the property even though he had not been disclosed as an expert witness pursuant to Supreme Court Rule 220 (107 Ill. 2d R. 220).

Ellis is the president of Central Stone and owns stock in the company. He is also chairman of the board of Moline Consumers, holding company of Central Stone. He owns stock in Moline Consumers, but is not a controlling shareholder in either company. Ellis is a 1940 graduate of the Massachusetts Institute of Technology (MIT), with a degree in mining engineering. He has worked in the quarry business since 1945.

Ellis testified, over an objection by DOT, that Newman’s valuation of $1,825,000 was reasonable. Ellis also agreed with Akers’ conclusion that, after the taking, the remaining land could be used only as farmland.

DOT argued that the circuit court erred in refusing to strike Ellis’ testimony because he was not disclosed as an expert witness as required by Supreme Court Rule 220. Central Stone asserts DOT was not surprised that Ellis testified, but only that he graduated from MIT in mining engineering. Additionally, Central Stone argues Ellis’ testimony was not that of an appraisal expert hired for trial.

Rule 220 defines an expert as:

“[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 and who may be expected to render an opinion within his expertise at trial. He may be an employee of a party, a party, or an independent contractor.” (107 Ill. 2d R. 220(a)(1).)

The rule requires disclosure of experts during discovery and failure to disclose an expert results in disqualification of the expert as a witness. 107 Ill. 2d R. 220(b)(1).

Ellis was not called as an expert witness, but as the president of the company which owns the property. In this case the “owner” happens also to have a degree in mining engineering from a prestigious institution. “It has been repeatedly held that the owner of property, if at all qualified, may testify as to value. (Department of Transportation v. Harper (1978), 64 Ill. App. 3d 732, 381 N.E.2d 843.)” (City of Freeport, 98 Ill. App. 3d at 222, 423 N.E.2d at 928; see also Hill v. Ben Franklin Savings & Loan Association (1988), 177 Ill. App. 3d 51, 56, 531 N.E.2d 1089, 1098.) The rationale for allowing a landowner to state his opinion as to the value of his land is not that he qualifies as an expert. The landowner’s familiarity with his own land does not, in and of itself, constitute expertise. (Hill, 177 Ill. App. 3d at 57, 531 N.E.2d at 1093.) Rather, the landowner’s opinion is admissible as lay witness opinion testimony. E. Cleary & M. Graham, Cleary & Graham’s Handbook of Illinois Evidence §§701.1, 701.3, at 445, 446-48 (4th ed. 1984).

Even if Ellis’ testimony were to be considered as expert testimony, it would not be barred by Rule 220.

“In Tzystuck v. Chicago Transit Authority (1988), 124 Ill. 2d 226, 234, 529 N.E.2d 525, 528, it was held that Rule 220(b)(1) ‘obliges litigants to disclose the identity and opinions only of those witnesses who are engaged for the purpose of giving an expert opinion at trial.’ In Tzy stuck, the supreme court stated that treating physicians testifying at trial are not subject to the disclosure requirements of Rule 220(b)(1) because they are consulted for treatment purposes whether or not litigation is pending or contemplated and do not develop their opinions in anticipation of litigation. (124 Ill. 2d at 234, 529 N.E.2d at 528.) The court noted in Tzy stuck that a treating physician’s opinion is, in this respect, similar to that of an occurrence witness who testifies not because he was retained by a party who expected him to develop and give a particular opinion at trial, but because he ‘witnessed or participated in the transactions or events that are part of the subject matter of the litigation.’ (124 Ill. 2d at 234-35, 529 N.E.2d at 528-29.) Likewise, we conclude that a party to a suit cannot be said to be retained to render an opinion at trial. A party is not engaged for the purpose of giving expert opinion at trial, but rather is a participant in the transaction that is the subject matter of the litigation.” (Hill, 177 Ill. App. 3d at 57-58, 531 N.E.2d at 1093-94.)

The circuit court correctly allowed Ellis’ testimony.

The judgment of the Pike County circuit court is reversed and the cause remanded.

Reversed and remanded.

McCullough, j., concurs.

JUSTICE GREEN,

specially concurring:

I concur in the decision of the majority to reverse and remand for a new trial because of error in the admission of the testimony of the witness, Newman. However, I deem the issues raised by that testimony to be closer than does the majority. I question whether error in the refusal to strike the testimony can be sufficiently explained by describing the testimony as valuing only the limestone reserves rather than the land as a whole.

Certainly, Newman did not “appraise separately the mineral deposit and add its value to the value of the land without the deposits” (Oberlaender, 42 Ill. 2d at 415, 247 N.E.2d at 892), which is at the heart of the prohibitions set forth in more recent years in Oberlaender and Lotta. Rather, the majority concludes from the cross-examination of Newman that he valued only the minerals in the land and gave no consideration of the other attributes of the land. Such a valuation was deemed erroneous by the Oberlaender court in ruling upon the testimony of the witness Reese. Notably, under such circumstances, prejudice can result to the condemnor only to the extent a trier of fact might imply that some other value to the tract exists which should be added to the value to which the witness has testified.

In any event, when the cross-examination of Newman is considered in the context of all of his testimony, I do not find that he gave a separate valuation to the limestone deposits or implied other values should be added to the value to which he testified. His method of appraisal began with the highly recommended procedure of comparing the tract to be appraised to another tract for which a recent arm’s length sale had taken place. (Quincy Coach House, Inc., 64 Ill. 2d 350, 356 N.E.2d 13.) Plaintiff does not dispute the comparability of this tract to the Kinderhook tract which was the subject of the sale. Nor does plaintiff dispute the propriety of Newman’s consideration of the $31,746 sales price for the recent sale of that tract. Thus, Newman was comparing a sale of a property with all of its attributes to the instant property with all of its attributes. The consideration of all of the attributes of a property being appraised is at the heart of Oberlaender and Lotta.

Newman felt the highest and best use for both tracts was for the extraction of the limestone. This caused him to give the inept answers which he gave on cross-examination, but those answers must be considered in connection with the fact that he was using the comparable-sale approach to market value. However, some problem arises because he decided to adjust the sales price of the Kinderhook tract to an evaluation of the tract in issue almost entirely on the basis of the difference in the estimated size of the limestone deposits on the two tracts. As indicated, the instant property was given a slightly higher valuation per unit of deposit because of the economy in mining a larger tract. Newman thought this economy of scale would tend to enhance the market value of this tract.

Perhaps Newman’s testimony should have been excluded because he did not give consideration to the difference between the tracts based upon aspects other than their use for the extraction of limestone. However, that seems a rather minor matter in view of his opinion that the highest and best use of the properties was for a quarry. Rather, the impropriety in his testimony seems to me to arise from his assumption that the ratio of size of deposits was the controlling factor in basing a value of defendants’ tract upon the Kinder-hook sale. No consideration was given to demand for a tract with deposits so much larger than those of the Kinderhook tract.

The Caraher opinion tends to discourage appraisals for condemnation purposes which take into consideration market factors in determining the value of a tract. (Caraher, 299 Ill. at 18, 132 N.E. at 213.) However, such factors are obviously matters which would be considered by buyers and sellers of quarry sites. While recitation by the witness of figures considered may be improper (Anthony, 136 Ill. 2d 169, 554 N.E.2d 1381), failure of an appraisal witness in a condemnation case to consider market forces affecting the price of minerals to be extracted from the land and the products to be made from them has been held to make an appraisal of such land in a condemnation case too speculative to consider. Department of Transportation v. Mullen (1983), 120 Ill. App. 3d 268, 278, 457 N.E.2d 1362, 1369.

I would reverse and remand because of the highly speculative nature of Newman’s testimony.


source: Caselaw Access Project

author: JUSTICE WELCH JUSTICE HARRISON,

license: Public Domain

text:
    BILL RUSSELL, d/b/a Frank Russell and Son Trucking Company, Plaintiff-Appellant, v. JIM RUSSELL SUPPLY, INC., et al., Defendants-Appellees.-JIM RUSSELL SUPPLY, INC., Plaintiffs-Appellees, v. WILLIAM C. RUSSELL, d/b/a Frank Russell and Son Trucking Company, Defendant-Appellant.
    Fifth District
    No. 5—88—0699
    Opinion filed May 15, 1990.
    Rehearing denied July 30, 1990.

      HARRISON, J., dissenting.
    John Paul Womick & Associates, Chartered, of Carbondale, for appellant.
    Robert E. Shaw, of Mitchell, Neubauer & Shaw, P.C., of Mt. Vernon, for appellees.
   JUSTICE WELCH

delivered the judgment of the court:

Plaintiff, Bill Russell, d/b/a Frank Russell and Son Trucking Company, filed suit seeking an injunction and damages against defendants Jim Russell and Jim Russell Supply, Inc. (hereinafter, JRS), for breach of a restrictive covenant not to compete contained in Jim and Bill Russell’s partnership dissolution agreement. Defendants brought a separate action against plaintiff for declaratory judgment with respect to the same contract and the matters were consolidated. Defendants contend, both as affirmative defenses to the contract claim and as allegations in the declaratory judgment suit, that JRS’s use of trucks and storage facilities did not violate the restrictive covenant; that the restrictive covenant violated public policy because it was unreasonably broad in geographic area and time; and that the covenant was unenforceable for want of consideration.

Plaintiff appeals from summary judgment entered in favor of defendants by the circuit court of Franklin County at the close of plaintiff’s case. The trial judge found that the restrictive covenant embodied in paragraph eight of Bill and Jim Russell’s partnership dissolution agreement was unenforceable, ruling that the breach of contract action and injunction sought against Jim Russell and his corporation failed as a matter of law. On appeal we must determine whether the trial judge erred as a matter of law when he ruled that the restrictive covenant was unenforceable because of lack of consideration and because there was no value placed on goodwill. We will also address the secondary finding of the court that even if the restrictive covenant was enforceable, Jim’s purchase and sale of magnetite was not a sham to disguise operation in the trucking business and so there was insufficient proof that defendant Jim Russell breached said covenant.

Bill and Jim Russell are brothers whose family has been in the trucking business in West Frankfort, Illinois, since 1913. Their grandfather founded Frank Russell and Son Trucking; Bill and Jim began working there in the early 1950’s and bought the business from their father, Don Russell, in 1977. In June 1985 they mutually decided to dissolve the partnership and Bill offered to buy out Jim’s 50% share of the business, according to their partnership agreement. They agreed upon $1,100,000 as the value of the tangible partnership assets and the terms of sale, and Jim prepared a handwritten memorandum of that agreement. Bill agreed to pay Jim $550,000 cash, transfer ownership of a 1985 pickup truck valued at $10,000, assume full liability for a partnership note and complete the private annuity payments to their father’s widow pursuant to the 1977 business purchase agreement. After deciding upon the sales price and terms, Bill asked Jim if they could include a provision in their agreement that Jim would not go into the trucking business. Jim agreed, saying that it would be silly for them to compete.

Bill contacted a local attorney to draft their agreement and asked the attorney to draft the restrictive covenant which was incorporated in the dissolution agreement as follows:

“Seller hereby agrees that he will not engage in the business of trucking, hauling, general moving and storage anywhere within a radius of 100 miles of the City of West Frankfort, Illinois, in any capacity whatsoever, directly or indirectly, for a period of 10 years from the date of the execution of this agreement.”

The bill of sale which was attached to the dissolution agreement listed the partnership assets such as the trucks and trailers, office equipment and Interstate Commerce Commission permits, but did not specifically list “goodwill.” The exclusive use of the company name was also transferred to Bill by way of the dissolution agreement. The attorney who drafted the agreement allocated the $560,000 purchase price among the tangible assets of the business for purposes of future depreciation but did not allocate an amount for the restrictive covenant, which is a depreciable asset. Both Bill and Jim read the document prior to signing it at the closing, which took place on July 15,1985.

In November 1985, Jim contacted American Minerals, Inc., in Rosiclare, Illinois, wanting information about its ability to grind magnetite for him. Magnetite is a dry, powdered iron ore used to clean coal. American Minerals processes and sells magnetite, among other products, according to its customers’ specifications. American Minerals had been unable to break into the magnetite market in Southern Illinois until contacted by Jim. In January 1986 Jim incorporated Jim Russell Supply, Inc., to purchase and sell mining supplies. Shortly thereafter, he and Marty Schlicting visited American Minerals' operation. JRS later hired Schlicting as a sales representative.

JRS purchased its first magnetite from American Minerals in April 1986. American Minerals gave JRS space in one of its buildings for an office. In August 1986, JRS installed storage bins for the magnetite at American Minerals and at its location in West Frankfort. American Minerals installed certain equipment on the bins to facilitate transfer of the magnetite to and from the bins and reduced the price per ton of its magnetite sold to JRS to help it pay for installation of the bins.

The only storage capability JRS had before August was in the two pneumatic trailers it owned. Pneumatic trailers are specially designed to transport magnetite. JRS also owned two trucks and always delivered its own product rather than hiring a carrier, even in times of peak orders. Occasionally orders were taken before JRS picked up the product and deliveries were made from American Minerals directly to the customer. Turnover time of the magnetite inventory in JRS’ bins was less than two weeks.

Most of JRS’ customers were coal mines to which Frank Russell and Son Trucking had made delivery of magnetite for another supplier, Reiss-Viking. Most of the mines to which Frank Russell and Son Trucking made deliveries were located within 100 miles of West Frankfort. The only other supplier of magnetite in southern Illinois before defendant started doing business was Prince Manufacturing.

Marty Schlicting had previously been employed as a salesman by Reiss-Viking. Frank Russell and Son Trucking was the exclusive carrier of magnetite for Reiss-Viking and had a Reiss-Viking phone line installed on the premises in order to facilitate placement of orders. Although Frank Russell and Son Trucking delivered other products for other customers, magnetite delivery for Reiss-Viking was a major part of plaintiff’s business. Plaintiff’s shipping business has declined since JRS began selling magnetite.

Frank Russell and Son Trucking holds both Interstate Commerce Commission and Illinois and Missouri Commerce Commission authorities to transport magnetite as a contract or common carrier. Defendant JRS considers itself a private carrier because it transports its own product and is not required to hold authorities for interstate or intrastate transportation.

The first issue we shall address is whether the trial court erred in determining that the restrictive covenant was unenforceable for want of consideration. Defendants contend that the covenant not to compete was an afterthought; that the agreement had been reached before Bill broached the subject of including a noncompetition clause in the document. We note initially from our review of the record that Jim testified Bill had asked him if he had any objection to signing “a thing” that he wouldn’t go into the trucking business, and that Bill testified that the discussion occurred at about the same time that they were discussing dissolving the partnership. We also note that both parties agreed upon the attorney that would draft their agreement and that the noncompetition clause appeared in the only draft of the dissolution agreement. Moreover, execution of the dissolution agreement was held at a formal closing at the bank where the cash was transferred and the deed to the real estate and assignment of titles to vehicles and the transport authorities were signed. The date of the closing, July 15, 1985, was set as the cutoff date for payment of partnership profits to Jim. Moreover, Bill entered into a loan agreement with the bank on this date to fund the partnership buy out. Where reduction of an agreement to writing and its formal execution are viewed by the parties as conditions precedent to vesting of rights and duties, there can be no contract until then, even if actual terms have been agreed upon. Brunette v. Vulcan Materials Co. (1970), 119 Ill. App. 2d 390, 395, 256 N.E.2d 44, 46.

Valuable consideration for a contract consists of some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other. (Anthony Co. v. Johnson (1959), 20 Ill. App. 2d 128, 136, 155 N.E.2d 361, 365.) Adequacy of consideration for contract must be determined as of the time of entering the contract. (O’Neill v. De Laney (1980), 92 Ill. App. 3d 292, 297, 415 N.E.2d 1260, 1265.) Consideration for the sale of goodwill and the withdrawal from competition may be found in the general consideration for the sale of the business. 38 Am. Jur. 2d Good Will §12 (1968).

There can be no doubt that as of the date the contract was executed by the parties, the consideration was both existent and adequate to support this contract which included the covenant not to compete. Jim Russell received $550,000 cash, a $10,000 truck and the release of all partnership liabilities in exchange for the transfer of Jim’s 50% interest in the partnership assets and the covenant not to compete. Whether there is consideration for a contract is a question of law for the court. (O’Neill v. De Laney, 92 Ill. App. 3d at 297, 415 N.E.2d at 1265.) We find that the court erred in its legal determination that there was no consideration for the restrictive covenant because it found that the covenant was bargained for after the terms of the dissolution were reached. In reaching that determination it necessarily concluded that the agreement had been reached when Jim prepared the memorandum of the terms of sale. The proper time to measure consideration based on the parties’ intent in this case should have been when the agreement was reduced to writing and executed by the parties on July 15,1985.

As a second issue we will address whether the restrictive covenant was unenforceable because plaintiff had no investment in goodwill. The interest which the purchaser is entitled to protect by a restraint is the enjoyment and possession of the goodwill of the property transferred to him. (O’Sullivan v. Conrad (1976), 44 Ill. App. 3d 752, 756, 358 N.E.2d 926, 929.) Defendants argue that there was no such investment for the following reasons: (1) the word “goodwill” does not appear in either the dissolution agreement or related sale documents; (2) goodwill has never appeared as an asset on the partnership books of Frank Russell and Son Trucking Company; (3) Frank Russell and Son Trucking Company, as a trucking business, had no goodwill.

As to the first contention, the majority rule is that if a business is sold and transferred from one person to another, goodwill, though not specifically mentioned, is transferred as an incident to the business. (Annot., 65 A.L.R.2d 502, 503 (1959).) Only one Illinois case has recognized that rule; however, the court held therein that goodwill did not pass by implication under the specific facts of the case because the documents evidenced only a sale of the business property and not a sale of the business itself. (United Romanian Meat Market & Grocery Store v. Abramson (1920), 218 Ill. App. 577, 582.) Plaintiff has also directed our attention to several decisions from other jurisdictions upholding this majority rule. See Wawak Co. v. Kaiser (7th Cir. 1937), 90 F.2d 694, 698 (when property and business rights are sold, goodwill, though not specifically mentioned, passes to the vendee as an incident); Baldwin v. Stuber (1979), 182 Mont. 501, 518-19, 597 P.2d 1135, 1139 (if goodwill is not expressly reserved or excepted, it passes automatically to the purchaser of a business, regardless of whether the seller has or has not entered into an express covenant not to compete); Montgomery v. Getty (Mo. 1955), 284 S.W.2d 313, 318 (under contract for sale of interest in business containing seller’s covenant not to compete in the business, buyers purchased not only the business assets but also the goodwill and seller’s right of competition to the full extent of the territory naméd in the agreement); Handyspot Co. v. Buegeleisen (1954), 128 Cal. App. 2d 191, 194-95, 274 P.2d 938, 941 (sale of property and the business to which goodwill adheres transfers the goodwill to the vendee, although not specifically mentioned in the contract of sale).

In the instant case, Jim transferred to Bill “all of (his) right, title and interest as a partner in the partnership and all its assets, liabilities and rights to future profits as of July 15, 1985,” by way of the dissolution agreement. The dissolution agreement also provided that Bill would have exclusive use of the partnership name, “Frank Russell and Son,” a company which had been in existence since 1913. Moreover, Jim and Bill’s partnership agreement mentions the goodwill of the business in connection with a partner’s desire to effect a dissolution of the partnership. Defendants argue, however, that goodwill was not discussed by the brothers, was not mentioned on the written memorandum of the dissolution which Jim prepared and was not specifically transferred in the dissolution document or bill of sale, and so it could not have been part of their bargain. We note that exclusive use of the business name, disposition of the partnership note which was a liability of the business and preparation of the final tax returns, among other provisions, were also not listed on the memorandum Jim prepared, but there can be no doubt that these provisions were part of Jim and Bill’s bargain as memorialized in the partnership dissolution agreement. Because we find that the entire business interest was transferred in this case, we hold that the goodwill of Frank Russell and Son Trucking passed by implication in the sale of Jim’s partnership interest to Bill, adopting the aforementioned majority rule.

Defendants argue as their second and third contentions that goodwill cannot pass by implication where it has no value or the business itself has no goodwill, citing as authority Behn v. Shapiro (1955), 8 Ill. App. 2d 25, 130 N.E.2d 295. The extraordinary remedy of an injunction will not be entertained by equity unless substantial damage to a property right is clearly shown; therefore, goodwill must be shown to have a substantial value, an asset to the partnership, before it will be considered a property right requiring protection by injunctive relief. (Behn v. Shapiro, 8 Ill. App. 2d at 31, 130 N.E.2d at 299.) Goodwill in the legal sense has come to mean the advantages a business has over competitors as a result of its name, location and owner’s reputation. (Marathon Petroleum Co. v. Chronister Oil Co. (C.D. Ill. 1988), 687 F. Supp. 437, 440.) Its value consists in the probability that the customers of the old firm will continue to be customers to the new. (Marathon Petroleum, 687 F. Supp. at 440.) Goodwill is an intangible asset and not all businesses possess goodwill. Behn v. Shapiro, 8 Ill. App. 2d at 31, 130 N.E.2d at 299.

In contrast with the instant case, plaintiff in Behn v. Shapiro argued that the inclusion of the word “goodwill” in the sale of the partnership interest barred the retiring partner from soliciting former customers of the partnership in a competing business, even though there was no restrictive covenant not to compete in the agreement. The court found that plaintiff had not met his burden of proving that goodwill was a valuable partnership asset of the produce business which was sold because there was insufficient proof concerning the extent to which the 60 customers from whom the defendant was sought to be enjoined from soliciting were actual and valuable customers of the firm. (Behn v. Shapiro, 8 Ill. App. 2d at 35-36, 130 N.E.2d at 301.) In Marathon Petroleum, a Federal court applying Illinois law refused to enforce a restrictive covenant ancillary to a sale of gasoline stations, because customer loyalty in the sale of gasoline today is primarily a function of price and convenience, and so plaintiff would suffer no more injury if a stranger began to compete in the manner the defendants had. (Marathon Petroleum, 687 F. Supp. at 441.) The court held that a noncompetition agreement ancillary to the sale of a business is appropriate only where competition by the former owner would impair the operation of the purchaser beyond that which would arise from the competition of an unrelated third party with similar marketing skills. Marathon Petroleum, 687 F. Supp. at 442.

We find from our review of the record that there was sufficient proof by plaintiff that goodwill was an asset of Frank Russell and Son Trucking, and one which had value. First, Frank Russell and Son Trucking was an established business in existence for nearly 75 years in West Frankfort, Illinois, and was a business which had not only been owned as a partnership by the parties for nearly eight years but also by their grandfather and father, respectively, before them. Jim admitted that his corporation was selling and delivering magnetite to many of the same mines to which Frank Russell and Son Trucking had previously been making magnetite deliveries. Bill testified that his profits had significantly declined since JRS began operating. We also note that it was Jim’s familiarity with the delivery of the product and the purchasers for these mines which enabled him to break into the magnetite business. Jim’s supplier, American Minerals, had previously been unable to do so. We find it implausible that Jim Russell’s family name had nothing to do with his relative ease in breaking into this market. Second, in a financial sense, goodwill value is based upon earning potentiality in excess of normal return on tangible assets and it means the existence of intangible values in the business, such as a trade name of good repute, location or uniqueness of product. (Securities Realization Co. v. Peabody & Co. (1939), 300 Ill. App. 156, 171, 20 N.E.2d 874, 881.) The attorney who drafted the dissolution agreement was also a certified public accountant, and he opined that the value of the partnership’s intangibles, including goodwill, was represented as the value paid to Jim in excess of 50% of the agreed-upon value of the tangible partnership property. In his opinion the consideration for the intangibles was the amount of the partnership liabilities Bill assumed from Jim. Those liabilities included the $112,000 promissory note, the $176,722 present value of the annuity payments to Mrs. Russell, the accounts payable and payroll taxes through July 15, 1985. That goodwill was not carried as an account on the partnership books we find to be irrelevant because, as this witness testified, goodwill is not a depreciable asset. Therefore, we find that the trial court erred in concluding that the restrictive covenant was unenforceable because there was no proof that the partnership owned goodwill or that it had any value.

Next we will address the issue of whether the restrictive covenant was unenforceable because of lack of reasonableness. Covenants not to compete are carefully scrutinized by the court because of its abhorrence of restraint of trade. (Boyar-Schultz Corp. v. Tomasek (1981), 94 Ill. App. 3d 320, 323, 418 N.E.2d 911, 913.) The enforceability of a restraint ancillary to the sale of a business or property depends on the reasonableness of the restraint as to time and as to the extent of the territory, as judged by the circumstances of the particular case. (McCook Window Co. v. Hardwood Door Corp. (1964), 52 Ill. App. 2d 278, 286, 202 N.E.2d 36, 41.) The concept of reasonableness can be divided into three elements: the restraint as to time and as to territory must be necessary in its full extent for the protection of the purchaser, but must at the same time not be oppressive on the seller, and must not be injurious to the interests of the general public. McCook, 52 Ill. App. 2d at 287, 202 N.E.2d at 41.

As to the first element, in order that the restraint be reasonable for the purchaser, it must protect him in the enjoyment and possession of the goodwill of the property transferred to him, and can cover only that territory to which the goodwill extends. (McCook, 52 Ill. App. 2d at 287, 202 N.E.2d at 41.) In the McCook case the court found that the covenant which provided for restraint of unlimited duration within 150 miles of the particular business location was unreasonable because there was no showing that plaintiff had customers as far away as 150 miles from its plant and the restraint was greater than necessary for the protection of plaintiff, the purchaser of the stock. (McCook, 52 Ill. App. 2d at 288-89, 202 N.E.2d at 42.) In contrast, plaintiff proved in the instant case that the covenant was reasonable as to time when he introduced evidence about the longstanding presence of his family’s trucking business known as Frank Russell and Son Trucking in West Frankfort, Illinois. Moreover, the 100-mile radius was shown to be reasonable with Jim’s admission that it delivered magnetite to the same mines as Frank Russell and Son Trucking and that these mines were all located within 100 miles of West Frankfort. We therefore find that the restraint was reasonable for Bill, the purchaser.

Second, we believe that the restraint was reasonable and not unduly harsh or oppressive to Jim, the seller. Restrictive covenants accompanying the purchase of assets are more favorably viewed than those connected with the employer-employee arrangements because of the arm’s-length bargaining position of the parties. (Marathon Petroleum,, 687 F. Supp. at 439.) Moreover, since the seller, in determining the sale price, usually includes therein the value of its goodwill, which value is enhanced by the agreement not to compete, the showing of hardship must be substantial. (O’Sullivan v. Conrad (1976), 44 Ill. App. 3d 752, 757, 358 N.E.2d 926, 930.) We have already found that the restrictive covenant was supported by consideration and that Frank Russell and Son Trucking possessed goodwill as a partnership asset and that this asset had value. Jim received cash in the amount of half the value of the tangible property, a truck, and release from two partnership liabilities. Defendants have also advanced no argument as to any special hardship to Jim in being held to his bargain and complying with the restrictive covenant, such as inability to earn a living, relocate, or use a special skill. See O’Sullivan, 44 Ill. App. 3d at 757, 358 N.E.2d at 930; Bauer v. Sawyer (1956), 8 Ill. 2d 351, 355, 134 N.E.2d 329, 331; Boyar-Schultz, 94 Ill. App. 3d at 323, 418 N.E.2d at 914.

Third, we believe that the restraint was reasonable to the general public. Whether the contract is reasonable or contrary to public policy is ultimately a question of law. (Boyar-Schultz, 94 Ill. App. 3d at 323, 418 N.E.2d at 914.) There was testimony that other contract and common carriers operate in the geographic area covered by the restrictive covenant and so compliance by Jim with the covenant will not result in a monopoly by Bill or lack of competition in this trade area. We therefore find that the trial court erred as a matter of law when it found the restrictive covenant unreasonable and therefore unenforceable.

The final issue we will address is the court’s finding that Jim’s business was not a buy-sell sham to disguise operation in the trucking business. Plaintiff relies on the “primary business test,” espoused in certain Interstate Commerce Commission (hereinafter ICC) cases to determine if private carriers were in actuality common or contract carriers requiring ICC permits, in order to reach the conclusion in this case that Jim Russell violated the restrictive covenant in their dissolution agreement. A private carrier is not subject to either Illinois or Interstate Commerce Commission regulation and is defined by Illinois statute to be “any person engaged in the transportation of property or passengers” “[w]here the transportation is incidental to and within the scope of the person's primary business purpose, and the primary business is other than transportation.” (Ill. Rev. Stat. 1987, ch. 95V2, pars. 18c—1104(27), 18c—4102(i).) Thus, as plaintiff noted in his opening statement, if JRS is found to be a private carrier rather than a common or contract carrier under this “primary business test,” Jim is not engaged in the trucking business and has not violated the restrictive covenant.

Preliminarily we must decide whether the “primary business test” controls in construing “trucking business” for purposes of determining whether there was a breach of the covenant. We note that other courts have utilized the “primary business test” other than in the context of determining violations of the ICC regulation of common and contract carriers and for purposes of construing terminology in documents. For example, in Gambino v. Jackson (1965), 150 W. Va. 305, 145 S.E.2d 124, the court used the “primary business test” in an insurance policy declaratory judgment case to determine that the insured was a private carrier at the time of the accident such that the liability policy required in connection with the insured’s transportation as a contract or common carrier was not in effect. (Gambino, 150 W. Va. at 314, 145 S.E.2d at 130.) See also Boyes v. State of Arizona (1968), 8 Ariz. App. 304, 445 P.2d 861 (because defendant was a private carrier under the “primary business test,” he was not subject to highway tax pertaining to contract carriers); Gensler v. Wisconsin Department of Revenue (1975), 71 Wis. 2d 1108, 236 N.W.2d 648 (taxpayer found to be contract carrier rather than private carrier under “primary business test” could properly claim exemption from sales and use taxes).

Whether or not a contract term is ambiguous and in need of construction is a question of law for the court. (Welt v. Koehring Co. (N.D. Ill. 1979), 482 F. Supp. 437.) The construction of a written contract is a question of law for the court. (Sturgeon v. Jacobs (1951), 343 Ill. App. 460, 99 N.E.2d 635.) Where terms of agreement are open to more than one reasonable interpretation, evidence of extrinsic facts and circumstances is admissible to determine true intent of parties. Maloney v. Maloney (1980), 88 Ill. App. 3d 146, 148, 410 N.E.2d 416, 417.

Defendants argue that the the covenant does not restrict Jim Russell from “procuring and moving magnetite.” Their argument is, in effect, that under the plain and unambiguous meaning of the term “trucking” there is no violation, because their business is sales. In support of this argument they note that JRS’s customers are the mines to which it sells magnetite, while Frank Russell and Son Trucking’s customer is Reiss-Viking, for which it ships magnetite to the mines. We find that to be a distinction of form over substance, especially in context of the “primary business test” for determining whether a business is a common or contract carrier. Moreover, in light of the extrinsic-evidence testimony of both parties with respect to their discussion about the restrictive covenant, it is clear that their concern was preventing Jim from competing with Bill. Plaintiff maintains that the incorporation of delivery along with sale of magnetite was in fact competition with his business. We therefore find that the term in the covenant was ambiguous such that extrinsic evidence was admissible to aid the court in determining whether Jim was “directly or indirectly in the trucking business.” We further find that the “primary business test” is relevant and appropriately may be used to aid the court in its construction of the covenant, for reasons stated as follows.

The “primary business test” was first developed as interpretation of an Interstate Commerce Commission regulation in response to carriers who resorted to sham “buy-and-sell” arrangements in order to avoid regulation as a common carrier:

“ ‘If the facts establish that the primary business of an operator is the supplying of transportation for compensation then the carrier’s status is established though the operator may be the owner, at the time, of the goods transported and may be transporting them for the purpose of sale. ... If, on the other hand, the primary business of an operator is found to be manufacturing or some other noncarrier commercial enterprise, then it must be determined whether the motor operations are in bona fide furtherance of the primary business or whether they are conducted as a related or secondary enterprise with the purpose of profiting from the transportation performed. In our opinion, they cannot be both.’ ” (Red Ball Motor Freight v. Shannon (1964), 377 U.S. 311, 315, 12 L. Ed. 2d 341, 344, 84 S. Ct. 1260, 1262-63, quoting Lenoir Chair Co., 51 M.C.C. 65, 75, aff’d sub now,. Brooks Transportation Co. v. United States (E.D. Va. 1950), 93 F. Supp. 517, aff'd (1951), 340 U.S. 925, 95 L. Ed. 668, 71 S. Ct. 501.)

The “primary business test” was later codified in section 303(c) of the Interstate Commerce Act:

"[No] person engaged in any other business enterprise [shall] transport property by motor vehicle in interstate or foreign commerce for business purposes unless such transportation is within the scope, and in furtherance, of a primary business enterprise (other than transportation) of such person.” (49 U.S.C. §303(c) (1958).)

A typical buy-and-sell arrangement is one under which the carrier “buys” property at a shipping point, transports it to a delivery point and there “sells” it to the real purchaser, the “profit” to the carrier amounting to the price of the transportation between the two points. (Red Ball, 377 U.S. at 313-14, 12 L. Ed. 2d at 343, 84 S. Ct. at 1262.) Certain criteria characteristic of the spurious buy-and-sell device have been developed by the ICC. Among these are the large investment of assets or payroll in transportation operations; negotiating the sale of goods transported in advance of dispatching a truck to pick them up; direct delivery of the transported goods from the truck to the ultimate buyer, rather than from warehoused stocks; solicitation of the order by the supplier rather than the truck owner; and inclusion in the sales price of an amount to cover transportation costs. (Red Ball, 377 U.S. at 318-19, 12 L. Ed. 2d at 346-47, 84 S. Ct. at 1264-65.) The purpose of the ICC regulations is primarily to pierce the spurious veil of private carriage, when in fact the hauler should be required to be licensed by the ICC as a “for-hire” carrier. (Gensler, 71 Wis. 2d at 1118, 236 N.W.2d at 653.) The court in Gensler applied 12, more specific, criteria developed by the Federal courts in order to evaluate the “primary business test” on the basis of the particular facts of a particular operation, as required by the Red Ball decision. (Gensler, 71 Wis. 2d at 1119, 236 N.W.2d at 654.) Those criteria were:

“1. Whether the carrier is the owner of the property transported.
2. Whether orders for the property are received prior to its purchase by the carrier.
3. Whether the carrier utilizes warehousing facilities and the extent of this use as a storage place.
4. Whether the carrier undertakes any financial risks in the transportation-connected enterprise.
5. Whether the carrier includes in the sale price an amount to cover transportation costs and its relation to the distance the goods are transported.
6. Whether the carrier transports or holds out to transport for anyone other than itself.
7. Whether the carrier advertises itself as being in a non-carrier business.
8. Whether its investment in transportation facilities and equipment is the principal part of its total business investment.
9. Whether the carrier performs any real service other than transportation from which it can profit.
10. Whether the respondent at any time engages for-hire carriers to effect delivery of the products, as might be expected, for example, when it is called upon to fill an order and its own equipment is otherwise engaged.
11. Whether the products are delivered directly from the shipper to the consignee (i.e., without intermediate warehousing).
12. Whether solicitation of the order is by the supplier rather than the truck owner.” (Gensler, 71 Wis. 2d at 1121-22, 236 N.W.2d at 654-55.)

Transportation must not only be in furtherance of a primary-business enterprise but also within the scope of that business and both tests must be satisfied. (Church Point Wholesale Beverage Co. v. United States (W.D. La. 1961), 200 F. Supp. 508, 516.) If transportation of property is performed for a profit and not merely as an incident to a principal commercial enterprise, then there is a contract-carrier business; merely combining a carrier operation with a noncarrier operation does not render the whole noncarrier. Boyes v. Arizona (1968), 8 Ariz. App. at 310, 445 P.2d at 867 (Molloy, J., dissenting).

Plaintiff in the instant case attempted to prove that the primary business of JRS was, in fact, that of transportation by showing that it would purchase, haul and resell American Minerals’ magnetité at a price approximately equal to the cost of the product plus a transportation charge equal to the freight rate of other contract carriers. This was essentially the argument made by the Public Service Commission in Thomas J. Peck & Sons v. Public Service Comm’n (Utah 1985), 700 P.2d 1119. Jim testified, and JUS’ invoices indicate, that the selling price of the magnetite to each mine varied in proportion to the distance from American Minerals’ site in Rosiclare, Illinois. Further, plaintiff maintains that transportation of the magnetite was not within the scope of any primary business since JRS neither manufactures, grinds or in any way physically alters the product purchased from American Minerals. It purchases magnetite in bulk form or already bagged and ground to the specification ordered by the mine. It does not own any equipment for testing the specification of the product ordered by its customer and if an order is out of specification it is American Minerals which accepts the risk of loss when it replaces the rejected order for the customer. Other Red Ball criteria are present, plaintiff argues, because JRS’s assets and payroll are largely geared to its transportation operation and it often engaged in direct delivery of orders to customers taken before a truck was dispatched to pick up the product. With respect to the Gensler criteria only items 6 and 7 appear not to have had any evidence put forward in the record. The only Red Ball criteria not directly present (which we note to be similar to item 12 of the Gensler criteria) had to do with the supplier rather than the truck owner taking the order. While the evidence appears to be that JRS took its own orders we note that it was provided with an office at the Rosiclare site and that American Minerals had been trying unsuccessfully to break into this business until the arrangement with Jim had been made.

We are unconvinced that the court evaluated the defendants’ conduct under the “primary business test” criteria. We further believe that plaintiff established a prima facie case that defendant was in the trucking business under a majority of the “primary business test” criteria and so the trial court erred in entering judgment for the defendants at the close of plaintiff’s case. Accordingly, the judgment of the Franklin County circuit court is reversed and the cause is remanded to the court below for a new trial before another judge.

Reversed and remanded.

GOLDENHERSH, J., concurs.

JUSTICE HARRISON,

dissenting:

I must dissent.

Where a trial court has directed a verdict in a nonjury case, the trial court’s decision will not be reversed unless it is contrary to the manifest weight of the evidence. (Fields v. Sax (1984), 123 Ill. App. 3d 460, 463, 462 N.E.2d 983, 986.) For a finding or judgment to be against the manifest weight of the evidence, an opposite conclusion must be clearly evident. (Dutton v. Roo-Mac, Inc. (1981), 100 Ill. App. 3d 116, 122, 426 N.E.2d 604, 609.) Such is not the case here.

Covenants not to compete are to be strictly construed and interpreted and any doubts or ambiguities must be resolved in favor of the natural rights and against restriction. (Hagerty, Lockenvitz, Ginskey & Associates v. Ginzkey (1980), 85 Ill. App. 3d 640, 643-44, 406 N.E.2d 1145, 1147.) Moreover, it appears that the agreement in question, including the restrictive covenant, was prepared by Bill Russell, through his attorney, and the rule is that a written instrument is construed most strongly against the person who prepared it. Crest Commercial, Inc. v. Union-Hall, Inc. (1968), 104 Ill. App. 2d 110, 243 N.E.2d 652, 656.

The trial judge noted that the restrictive covenant “does not say that the seller will not engage in the business of procuring and moving magnetite.” The covenant only refers to the seller agreeing “he will not engage in the business of trucking, hauling, general moving and storage” in the agreed area. It seems to me that this language is not in any way ambiguous; but even if it were, there is nothing in the record that indicates it meant anything other than Jim’s not going into the trucking business. I take a view similar to the trial court that selling and delivering magnetite simply does not violate the covenant. Notwithstanding the strained reasoning of the majority, we are bound to strictly construe covenants not to compete and any ambiguities must be resolved in favor of natural rights and against restriction.

Therefore, I cannot say that the judgment of the trial court is manifestly against the weight of the evidence, and I would affirm the trial court’s granting a directed verdict in favor of defendants Jim Russell, Donna Russell and Jim Russell Supply, Inc.


author: JUSTICE INGLIS

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. RODGER W. BLOYER, Defendant-Appellant.
    Second District
    No. 2—89—0219
    Opinion filed July 31, 1990.
    Rehearing denied September 6, 1990.
    G. Joseph Weller and Sherry R. Engelstad, both of State Appellate Defender’s Office, of Elgin, for appellant.
    Charles R. Hartman, State’s Attorney, of Freeport (William L. Browers and Cynthia N. Schneider, both of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
   JUSTICE INGLIS

delivered the opinion of the court:

After a bench trial conducted by the circuit court of Stephenson County, defendant, Rodger W. Bloyer, was found guilty of unlawful restraint (Ill. Rev. Stat. 1987, ch. 38, par. 10—3), aggravated unlawful restraint (Ill. Rev. Stat. 1987, ch. 38, par. 10—3.1), and armed violence (Ill. Rev. Stat. 1987, ch. 38, par. 33A—2) predicated on the underlying felony of unlawful restraint. The court entered a judgment of conviction of armed violence only, finding merger of the other two offenses.

Defendant now appeals based on the Illinois Supreme Court’s decision in People v. Wisslead (1983), 94 Ill. 2d 190, arguing that a conviction of armed violence predicated on unlawful restraint accomplished with the use of a category I weapon (Ill. Rev. Stat. 1987, ch. 38, pars. 33A—1(b), 33A—3(a)) violates Illinois’ constitutional guarantee of proportional sentencing (Ill. Const. 1970, art. I, §11) because more serious offenses are punished less severely. We affirm.

The charges at issue here arose from an incident which occurred on October 11, 1988. On that date, defendant, who was driving a vehicle, pulled over to the side of the road and approached the victim as she walked near the vehicle’s front passenger door. Defendant then displayed a knife and forced the victim into the vehicle. Defendant told the victim that he wanted sex and began to unbutton her coat. At this point, the victim was able to escape.

After finding defendant guilty of the offenses charged, the trial court heard argument on whether and to what extent the offenses of unlawful restraint and aggravated unlawful restraint merged with armed violence. The State conceded that the unlawful restraint conviction merged into the aggravated unlawful restraint conviction; however, it was contested as to whether the conviction of aggravated unlawful restraint should similarly be merged into the conviction of armed violence. The State attempted to differentiate Wisslead from the instant case by noting that the weapon supporting the armed violence charge in Wisslead was a category I weapon (Ill. Rev. Stat. 1987, ch. 38, par. 33A—1(b)), while in this case defendant’s conviction of armed violence was supported by his use of a “dangerous weapon” (Ill. Rev. Stat. 1987, ch. 38, par. 33A— 2). Defense counsel admitted that he had not read the Wisslead opinion. The trial court concluded that the two offenses did merge and entered judgment only on the charge of armed violence.

On appeal, defendant argues that People v. Wisslead conclusively establishes that a conviction of armed violence predicated on unlawful restraint violates the constitutional guarantee of proportional sentencing. The State now concedes that the distinction drawn below by the prosecutor between Wisslead and the instant case is illusory, because both cases involved the use of a category I weapon. A category I weapon is, by definition, a dangerous weapon. See Ill. Rev. Stat. 1987, ch. 38, par. 33A — 1.

Defendant admits that the argument raised on appeal was not raised below. Normally, this would result in waiver of the argument on appeal. (People v. Wade (1989), 131 Ill. 2d 370, 375.) He argues, however, that we should review the contention under the doctrine of plain error or, alternatively, that we should examine whether trial counsel’s failure to raise the issue constituted a violation of defendant’s right to the effective assistance of counsel (U.S. Const., amend. VI). Before invoking the plain error exception to the waiver rule, it is appropriate to determine whether error occurred at all. (Wade, 131 Ill. 2d at 376.) We conclude that, because the legislature’s amendment of the Criminal Code of 1961 (Ill. Rev. Stat. 1989, ch. 38, par. 1 — 1 et seq.) has cured the constitutional infirmity noted in Wisslead, no error occurred below.

In Wisslead, the defendant, while armed with a revolver, detained his estranged wife without legal authority. (Wisslead, 94 Ill. 2d at 192.) In reaching its determination that the armed violence sentencing scheme violated the Illinois Constitution, the supreme court compared the aggravating effect of the use of a handgun in both kidnapping, a Class 2 felony (Ill. Rev. Stat. 1979, ch. 38, par. 10 — 1), and unlawful restraint, a less serious Class 4 felony (Ill. Rev. Stat. 1979, ch. 38, par. 10 — 3). The court noted that, although the legislature had determined that kidnapping was a more severe offense than unlawful restraint, the commission of a kidnapping with the use of a handgun would constitute only a Class 1 felony (aggravated kidnapping) (Ill. Rev. Stat. 1979, ch. 38, par. 10 — 2(a)(5)). The use of the very same weapon in the commission of an unlawful restraint, the court noted, would transform the crime into a more serious Class X felony (armed violence predicated on unlawful restraint) because there was no legislative provision at that time for aggravated unlawful restraint. (See Wade, 131 Ill. 2d at 379.) The court in Wisslead explained, “Since each offense is enhanced by the identical additional element, a gun, the lesser offense of unlawful restraint should not thereby become a graver offense than kidnaping. However, incongruously it does where aggravated kidnaping is charged.” (Wisslead, 94 Ill. 2d at 195.) Thus, the court concluded that the statutory classification of the offenses was unconstitutionally disproportionate. Wisslead, 94 Ill. 2d at 194-96.

Subsequently, however, the General Assembly amended the Criminal Code of 1961 by adding the offense of aggravated unlawful restraint. (Ill. Rev. Stat. 1987, ch. 38, par. 10 — 3.1 (eff. Jan. 1, 1986).) No Illinois court has yet addressed the effect of this statutory change on the rationale of Wisslead. We believe that, as a result of this enactment, there is now a parallel and proportional structure between the various grades of unlawful restraint and kidnapping.

As a simple offense, unlawful restraint is a Class 4 felony, while kidnapping is a more serious Class 2 felony. If the use of a category I weapon is involved in the commission of the offense, a simple unlawful restraint may rise to the level of aggravated unlawful restraint, a Class 3 felony (Ill. Rev. Stat. 1987, ch. 38, par. 10 — 3.1), and a simple kidnapping may rise to the level of aggravated kidnapping, a more serious Class 1 felony (Ill. Rev. Stat. 1987, ch. 38, par. 10 — 2). At both the simple and aggravated levels, then, unlawful restraint is now punished as a less serious offense than is kidnapping. Thus, as a result of the legislative enactment, the penalties for the offenses are proportional, and the constitutional defect recognized in Wisslead has been cured.

It remains true that, as is the case with any felony, where either a simple kidnapping or a simple unlawful restraint is accomplished with the use of a dangerous weapon, the prosecutor retains the option of prosecuting the offender for armed violence based on the underlying simple felony. (People v. Moritz (1988), 173 Ill. App. 3d 498, 505-07.) Under such circumstances, the offense of armed violence is a Class X felony whether it is predicated on a simple unlawful restraint or a simple kidnapping. This, however, does not make the armed-violence statute unconstitutionally disproportional. The appellate court has explained:

“By enacting the armed-violence statute [citation], the legislature has seen fit to treat with equal seriousness the commission of any felony while armed with a dangerous weapon [citation]. The armed-violence statute was designed to address the increasing use of weapons in the commission of other offenses. The underlying offense carries its own sentencing penalties prior to the application of the armed-violence statute; the armed-violence statute addresses only the connection of a weapon to the underlying offense. [Citation.] The rationale for the statute is that when a felony is committed, the presence of a weapon increases the likelihood that violence will erupt and great bodily harm will result. [Citation.] The relative classification of the underlying felony is immaterial.” People v. Barry (1987), 152 Ill. App. 3d 915, 917.

Because of the recent legislative enactment making the underlying offenses of kidnapping and unlawful restraint proportional, we do not find that the armed-violence statute as applied to unlawful restraint is unconstitutional. Accordingly, the judgment of the circuit court of Stephenson County is affirmed.

Affirmed.

McLAREN and GEIGER, JJ., concur.


author: PRESIDING JUSTICE BARRY

text:
    MARGARETTE I. PRESSON, Appellant, v. THE INDUSTRIAL COMMISSION et al. (K mart Corporation, Appellee).
    Fifth District (Industrial Commission Division)
    No. 5—89—0503WC
    Opinion filed May 18, 1990.
    Rehearing denied August 10, 1990.

      Mateyka & Hill, P.C., of Granite City, for appellant.
    Ganan & Shapiro, of Chicago (Jay M. Shapiro, of counsel), for appellee.
   PRESIDING JUSTICE BARRY

delivered the opinion of the court:

The petitioner, Margarette I. Presson, filed a petition for benefits under the Workers’ Compensation Act (the Act) (Ill. Rev. Stat. 1981, ch. 48, par. 138.1 et seq.). The arbitrator awarded her temporary total disability (TTD) benefits, permanent total disability (PTD) benefits, and medical expenses. On review, the Industrial Commission affirmed the medical expenses award, but reduced both disability awards. The circuit court confirmed the Commission’s decision. The petitioner appeals.

At the hearing before the arbitrator, the petitioner testified that on July 24, 1981, when she was 49 years old, she injured her lower back while working for the respondent K mart Corporation. As she was lifting a box, she felt a pulling in the bottom part of her back. She continued working for several days, but the pain worsened, and on August 3, 1981, she sought medical attention from Dr. Otto Kremer. Dr. Kremer examined her, took X rays, and administered heat treatments. He eventually referred her to Dr. Robert E. Schultz, a neurosurgeon.

Dr. Schultz testified by deposition that the results of a myelogram performed on the petitioner on January 26, 1982, were normal. He diagnosed her as having a chronic low back strain secondary to sacroiliac joint dysfunction. He opined that she was incapable of returning to work during the period from when he first saw her until his last examination on October 30, 1985. However, on cross-examination Dr. Schultz admitted that his opinion regarding the petitioner’s ability to return to work was based on his belief that her employment duties involved lifting boxes and stocking merchandise. When told the duties of a customer greeter, Schultz stated that that type of employment could certainly have been tried by the petitioner for the past 18 months. Moreover, Schultz agreed that a total lack of physical activity could be detrimental to her.

Dr. Walter Heidke, a chiropractor, testified by deposition that he had examined the petitioner several times from July 15, 1983, through October 31, 1983. He diagnosed that she was suffering from a soft tissue injury of the lumbar spine, and treated her with hot packs and sine wave therapy. Heidke opined that he could not envision the petitioner gainfully employed. However, he admitted that in the event she could tolerate employment, it would be in her best interest to become more mobile.

At the request of the respondent, chiropractor Theirld Sarver examined the petitioner on March 6, 1985. He concluded that the petitioner did not suffer from any abnormalities and that she could return to work without any restrictions. He further opined that she was a malingerer and that her condition required no further treatment.

Orthopedic surgeon Marshall Conrad examined the petitioner at the respondent’s request on January 8, 1982, on October 18, 1982, and on January 27, 1984. Conrad noted that at the time of his last examination she was still complaining of low back pain. On that occasion, X rays revealed a moderate narrowing of the lumbosacral disc space, which the petitioner had not had before. He noted that this type of change was typical of degenerative disc disease and that it could occur in the normal process of aging. Conrad stated, however, that there was no abnormality involving the spine or any of the inter-vertebral discs. He diagnosed the petitioner as having a “sprain type injury to the low back.” In each of his three reports based on his three examinations of the petitioner, he indicated that she could have returned to work at any time provided she was not required to stand for a full eight hours or sit for a full eight hours. Moreover, Conrad noted that the petitioner should not lift more than 15 pounds and that she should use a lumbosacral corset.

Lee Ann Ray, the personnel and training manager for the Cahokia K mart store, testified that on November 1, 1982, she offered the petitioner, by letter and telephone, a job meeting the restrictions placed upon her by Dr. Conrad. Ray also testified that the job was that of customer greeter. She explained that as a customer greeter the petitioner would be able to sit or stand whenever she wanted and that a stool would be provided for her. Furthermore, she would not be required to do any lifting. The petitioner never responded to Ray’s offer. On cross-examination, Ray explained that she personally had not made the decision that the petitioner could handle the offered job. Rather, the decision was made by others at the company’s international headquarters after they reviewed Dr. Conrad’s report.

On December 23, 1986, the arbitrator awarded the petitioner 2356/? weeks of TTD under section 8(b) of the Act (Ill. Rev. Stat. 1981, ch. 48, par. 138.8(b)) and found her permanently and totally disabled under section 8(f) (Ill. Rev. Stat. 1981, ch. 48, par. 138.8(f)). The arbitrator further awarded the petitioner $3,347.90 for medical expenses. On review, the Commission reduced the award of TTD to 676/? weeks and reduced the PTD award to 15% of the man as a whole under section 8(d)(2) of the Act (Ill. Rev. Stat. 1981, ch. 48, par. 138.8(d)(2)). The Commission affirmed the arbitrator’s award of medical expenses. The circuit court confirmed the Commission’s decision. This appeal followed.

The petitioner first argues on appeal that Dr. Kremer’s reports were never certified and therefore were not properly a part of the evidentiary record before the Commission. She further contends that the Commission erred in relying upon information from those reports in its decision.

After reviewing the Commission’s written decision in the instant case, we find that the Commission’s consideration of the questioned evidence did not prejudice the petitioner nor did it affect the outcome of the case. The Commission merely noted that Dr. Kremer treated the petitioner on August 3, 1981, and diagnosed her as having a severe sprain of the sacroiliac joint and a lumbosacral sprain. Moreover, Kremer’s diagnosis was similar to the diagnosis made by the petitioner’s own expert, Dr. Schultz. Accordingly, we find that no reversible error occurred. See Illinois Piping Co. v. Industrial Comm’n (1987), 156 Ill. App. 3d 955, 509 N.E.2d 1107; Reliance Elevator Co. v. Industrial Comm’n (1988), 171 Ill. App. 3d 18, 524 N.E.2d 1022.

The petitioner next argues that the Commission improperly admitted Ray’s testimony that the greeter job was within the restrictions placed upon the petitioner by Dr. Conrad. She contends that Ray had no firsthand knowledge of the restrictions placed upon her by Dr. Conrad and therefore Ray’s testimony that the customer greeter job fell within those restrictions was hearsay.

Hearsay evidence is an out-of-court statement offered to show the truth of the matter asserted therein, and thus its value rests upon the credibility of the out-of-court asserter. (Kress Corp. v. Industrial Comm’n (1989), 190 Ill. App. 3d 72, 545 N.E.2d 1046.) Even when hearsay evidence is erroneously admitted, such error does not require reversal when there has been no prejudice or the evidence does not materially affect the outcome. (Illinois Piping Co. v. Industrial Comm’n (1987), 156 Ill. App. 3d 955, 509 N.E.2d 1107.) Furthermore, it is presumed that the Industrial Commission considers only competent and proper evidence in reaching its decision. English v. Industrial Comm’n (1986), 151 Ill. App. 3d 682, 502 N.E.2d 1247.

In the case at bar, even if Ray’s statements were inadmissible to prove that the customer greeter job fell within Dr. Conrad’s restrictions, they were nevertheless admissible to prove that K mart offered the petitioner a customer greeter job on November 1, 1982. Ray properly testified about the activities the job entailed. In view of Dr. Conrad’s deposition, the Commission had other evidence from which it could determine whether the job described by Ray fell within the restrictions placed on the petitioner by Dr. Conrad. Therefore, the petitioner was not prejudiced by the introduction of the questioned evidence and no reversible error occurred.

The petitioner next argues that the Commission erred in finding that she was no longer disabled following the November 1, 1982, offer of light-duty work within her restrictions.

It is well settled that TTD benefits are available only from the time an employee is injured until he has recovered as much as the character of the injury will permit. (Archer Daniels Midland Co. v. Industrial Comm’n (1988), 174 Ill. App. 3d 918, 529 N.E.2d 237.) To prove TTD, a claimant must show not only that he did not work, but also that he was unable to work. (County of Cook v. Industrial Comm’n (1988), 177 Ill. App. 3d 264, 532 N.E.2d 280; Rambert v. Industrial Comm’n (1985), 133 Ill. App. 3d 895, 477 N.E.2d 1364.) The determination of the length of an employee's TTD is a question of fact to be resolved by the Commission. (Howard v. Industrial Comm’n (1980), 81 Ill. 2d 50, 405 N.E.2d 750.) The Commission is the judge of the credibility of the witnesses and the weight to be given their testimony. It is for the Commission to decide which of the two conflicting medical opinions given in a case is to be accepted. (Chicago Rotoprint v. Industrial Comm’n (1987), 157 Ill. App. 3d 996, 509 N.E.2d 1330.) The Commission is not bound by the arbitrator’s decision, and the Commission’s decision will not be set aside on review unless it is against the manifest weight of the evidence. Rambert v. Industrial Comm’n (1985), 133 Ill. App. 3d 895, 477 N.E.2d 1364.

In the case at bar, Dr. Schultz stated in his deposition that the petitioner could have tried employment as a customer greeter only as of July 1984. On the other hand, Dr. Conrad in effect stated in his deposition that the petitioner could have returned to work at anytime after January 8, 1982, provided she used a lumbosacral corset, did not lift more than 15 pounds, and did not stand for a full eight hours or sit for a full eight hours. On November 1, 1982, the petitioner was offered the job of customer greeter. It was established that the duties of that job were within the restrictions set by Dr. Conrad. Nevertheless, the petitioner refused to even attempt working as a greeter. Since it was for the Commission to weigh the conflicting medical opinions, we find that its decision that the petitioner was no longer temporarily totally disabled after November 1, 1982, was not against the manifest weight of the evidence.

The petitioner next argues that the Commission’s decision to reduce the arbitrator’s award of PTD under section 8(f) to an award of 15% permanent partial disability under section 8(d)(2) was against the manifest weight of the evidence.

An employee is totally and permanently disabled for the purpose of workers’ compensation benefits when he is unable to make some contribution to industry sufficient to justify paying him wages. (A.M.T.C. of Illinois, Inc. v. Industrial Comm’n (1979), 77 Ill. 2d 482, 397 N.E.2d 804.) If the claimant’s disability is limited in nature so that he is not obviously unemployable, or if there is no medical evidence to support a claim of total disability, the burden is on the claimant to establish the unavailability of employment to a person in his circumstances. (Ceco Corp. v. Industrial Comm’n (1983), 95 Ill. 2d 278, 447 N.E.2d 842.) Because of the Industrial Commission’s expertise in the area of workers’ compensation, its finding on the question of the nature and extent of permanent disability should be given substantial deference. (English v. Industrial Comm’n (1986), 151 Ill. App. 3d 682, 502 N.E.2d 1247.) It is for the Commission to resolve disputes in the evidence and draw reasonable inferences and conclusions from that evidence, and the Commission’s decision will not be set aside on review unless it is contrary to the manifest weight of the evidence. English v. Industrial Comm’n (1986), 151 Ill. App. 3d 682, 502 N.E.2d 1247.

In the instant case, Dr. Heidke testified that he could not envision the petitioner gainfully employed in any type of job. On the other hand, the Commission had before it the evidence of the work restrictions Dr. Conrad placed on the petitioner, along with the description of the light-duty job the respondent offered her. Dr. Conrad testified that the job offered was one which the petitioner could perform. Additionally, Dr. Schultz testified that the results of a myelogram performed on the petitioner were normal and that she certainly could have tried the offered job. We further note that although it appears the petitioner’s back condition was not operable, the evidence as a' whole does not show that she would never be able to work. In fact, the doctors generally suggested that she should at least attempt to work. Since it was for the Commission to resolve disputes in the evidence and draw reasonable inferences therefrom, we hold that the Commission’s finding that the petitioner was 15% permanently disabled under section 8(d)(2) was not against the manifest weight of the evidence.

For the foregoing reasons, we affirm the judgment of the circuit court of Madison County.

Affirmed.

McNAMARA, WOODWARD, McCULLOUGH, and LEWIS, JJ., concur.