author: JUSTICE HARTMAN

text:
    AGRIMERICA, INC., Plaintiff-Appellant, v. VERNON L. MATHES et al., Defendants-Appellees.
    First District (2nd Division)
    No. 1—89—0653
    Opinion filed May 22, 1990.
    Rehearing denied August 6, 1990.

      Vedder, Price, Kaufman & Kammholz, of Chicago (Richard E Zehnle and Jeannine M. Pisoni, of counsel), for appellant.
    Tenenbaum & Senderowitz and Martin Cohn & Associates, both of Chicago, and David E. Stahl, of Marietta, Georgia (Marvin Tenenbaum, Steven Daily, and Randall Server, of counsel), for appellees.
   JUSTICE HARTMAN

delivered the opinion of the court:

The circuit court found that defendants Vernon C. Mathes (Mathes) and FMF International, Inc., previously known as Far-Mor (Far-Mor), respectively, did not breach a restrictive covenant not to compete; did not induce a breach of the covenant; and denied plaintiff Agrimerica, Inc. (Agrimerica), injunctive and monetary relief. Agrimerica appeals, raising as issues whether the circuit court erred in finding that (1) the restrictive covenant was unenforceable; (2) Agrimerica breached its employment agreement with Mathes; (3) Mathes did not violate the restrictive covenant; (4) Far-Mor did not intentionally interfere with Mathes’ contract with Agrimerica; and (5) Agrimerica did not prove that it suffered damages as a result of defendants’ actions. Agrimerica also claims the circuit court abused its discretion in not entering an injunction prohibiting defendants from soliciting plaintiff’s customers in the three-State region covered in the restrictive covenant, and abused its discretion in not ordering an accounting of all sales made by defendants to Agrimerica customers in violation of the restrictive covenant. The case is on appeal for a second time (see 170 Ill. App. 3d 1025, 524 N.E.2d 947). Only those record facts necessary for understanding and disposition will be repeated here.

Agrimerica produces “specialty” ingredients, flavoring additives, mold inhibitors and surfactants, which are not absolutely necessary for the growth of animals, but are designed to make animal feed more palatable and encourage better growth. Because specialty products are not yet widely accepted in the animal feed industry, new customers must be developed and persuaded of the need for them. Agrimerica utilized research and assistance to customers in achieving meaningful results. It spent over $700,000 on research and development toward these ends between 1985 and 1986.

On October 23, 1984, Agrimerica hired Mathes as its sales representative in the States of Florida, Georgia, and Alabama. Never before had he sold flavoring additives, mold inhibitors or surfactants in this geographical area. Mathes was first trained by Agrimerica’s sales manager before being allowed to call upon customers. Also, he was given the preceding year’s call reports, prepared by Agrimerica’s previous representative in the territory, which documented certain customer information for Agrimerica’s use. When his training was completed, Mathes was accompanied on his sales calls in his assigned territory by Agrimerica’s sales manager, who introduced him to key personnel of existing and potential Agrimerica customers. Mathes also periodically received additional sales and technical training from Agrimerica personnel thereafter, assisting him to identify and correct problems with specialty products experienced by his customers.

Mathes did not sign the agreement embodying the restrictive covenant at issue here until December 17, 1984. The first copy, sent by mail, apparently was not received by him. The second copy was given to him for signature when he later came to Agrimerica’s home office in Illinois for a sales meeting. The agreement contained the following covenant in which Mathes promised:

“Following the termination of Employee’s employment by Agrimerica for any reason (including resignation), for a period that is the lesser of 24 months he/she was employed by Agrimerica, Employee will not in any way, directly or indirectly (as detailed in the preceding paragraph), promote, sell or attempt to sell, in the Sales Region, any product or service that is in any way competitive with Agrimerica’s Business to any person or entity that has been a customer of Agrimerica within two years prior to the date on which Employee’s employment with Agrimerica terminated.”

Mathes served as Agrimerica’s salesman in the three-State area until his termination on March 30, 1987, following a restructuring of the company’s sales department. Although offered sales positions with six different companies, only one, Far-Mor, was involved in sales competition with Agrimerica in the same territory Mathes previously served. In fact, Mathes represented to Far-Mor’s president, David Decker, that he had developed close personal relationships with some of Agrimerica’s customers whom he had served and thought he could switch them over to Far-Mor. In late May 1987, Far-Mor hired Mathes to sell its products primarily in Georgia, Florida, Alabama, and Mississippi, in part because of customer contacts he developed during his employment with Agrimerica. Mathes thereafter solicited orders from certain customers he had serviced previously while employed by Agrimerica.

On July 20, 1987, Agrimerica filed a verified amended complaint and a separate motion for a temporary restraining order. The amendment iterated the allegations of its original complaint and expanded its requested relief to include (1) a temporary restraining order and both preliminary and permanent injunctions to enjoin Mathes from breaching the terms of his employment agreement and from disclosing confidential information learned while employed by Agrimerica; (2) an accounting; and (3) money damages. As to Far-Mor, Agrimerica sought (1) a temporary restraining order and both preliminary and permanent injunctions to enjoin Far-Mor from interfering with the employment agreement, inducing or encouraging Mathes to breach that agreement, and using any confidential information learned from Mathes regarding Agrimerica operations; (2) an accounting; and (3) money damages.

Far-Mor filed its answer to the amended complaint that same day, and admitted Mathes’ hiring and his subsequent contacts with his former Agrimerica customers in his new capacity as a Far-Mor representative. Far-Mor denied, however, the existence of Agrimerica’s alleged proprietary interest in its customers. It also raised several affirmative defenses, including (1) the amendment failed to state a claim for which relief could be granted; and (2) the employment agreement between Agrimerica and Mathes was unenforceable as against public policy. It did not raise a defense based upon justification. Far-Mor’s response to the motion for a temporary restraining order repeated Far-Mor’s answer and affirmative defenses and sought denial of the motion.

The circuit court denied the motion for a temporary restraining order and set a date for a preliminary injunction hearing on July 20, 1987. At the July 20 hearing, Mathes, a Georgia resident, moved unsuccessfully to quash the amended complaint for lack of personal jurisdiction. Mathes’ answer, filed on August 4, 1987, denied the validity and the enforceability of the employment agreement; sought dismissal of the amended complaint; and raised several defenses and counterclaims.

Following an evidentiary hearing on August 19, 1987, the circuit court granted defendants’ motion for a finding and entered an order denying the motion for a preliminary injunction. An appeal to this court followed, and the cause was reversed and remanded in an opinion filed on May 10, 1988. (Agrimerica, 170 Ill. App. 3d 1025, 524 N.E.2d 947.) This court ruled that the evidence presented at the preliminary hearing was “more than adequate to raise a fair question as to the existence of a proprietary interest in Agrimerica’s customers which may be subject to legal protection and a likelihood of success of seeking injunctive relief,” and upon remandment, the circuit court was to continue the hearing so as to “allow defendants to offer evidence in their cases.” (Emphasis added.) 170 Ill. App. 3d at 1036.

All parties subsequently agreed to a trial on the merits of all Agrimerica’s claims and Mathes’ counterclaim. From November 16 to 18, 1988, the circuit court conducted the trial. It is important to note that the parties stipulated to incorporating testimony from the preliminary hearing conducted on August 19, 1987, as part of the 1988 trial evidence, and so advised the court. A substantial part of the evidence took the form of excerpts from depositions.

At the conclusion of the trial and upon consideration of the post-trial briefs, the circuit court issued a written opinion containing findings of fact, a memorandum of law, and its dispositive order. The court’s findings of fact included the following: (1) The noncompetition agreement was signed by Mathes without additional consideration. (2) The noncompetition agreement was not ancillary to any other agreement. (3) Agrimerica did not have any legitimate protectable business interest or reason to require Mathes to sign the agreement. (4) Agrimerica did not have long term, near permanent relationships with its customers since the industry was “highly competitive” and customers were motivated by “price considerations” and “product quality” in determining purchases. (5) Agrimerica’s claim to have had customers for as long as 30 years was not supported by “credible evidence.” (6) Agrimerica did' not lose business to Far-Mor as a result of any wrongful conduct by Far-Mor or Mathes. (7) Agrimerica’s actual sales history supported a finding of lost profits. (8) Agrimerica’s attempt to show lost profits through “projections” of future sales to four customers was “totally insufficient.” The circuit court entered judgment in favor of defendants and denied Agrimerica either monetary or injunctive relief.

By timely notice of appeal, Agrimerica challenges the circuit court’s findings and order denying injunctive relief and damages.

I

Agrimerica initially contends that the restrictive covenant in Mathes’ employment agreement is enforceable and that the circuit court erred by finding it unenforceable because (1) it was not ancillary to a valid employment agreement; (2) coercion was exercised upon Mathes at the time of signing; and (3) Agrimerica failed to show a protectable business interest.

A

Whether a restrictive covenant is enforceable or not is a question of law. (Corroon & Black of Illinois, Inc. v. Magner (1986), 145 Ill. App. 3d 151, 162, 494 N.E.2d 785 (Corroon & Black).) Illinois courts favor fair competition in business and do not encourage restraints of trade; therefore, restrictive covenants are closely scrutinized. (MBL (USA) Corp. v. Diekman (1983), 112 Ill. App. 3d 229, 237, 445 N.E.2d 418.) Valid consideration, on the part of both parties, is one of the essential requirements for the formation of a contract; an executory contract without consideration is unenforceable either at law or in equity. (Corroon & Black, 145 Ill. App. 3d at 162.) Continued employment for a substantial period, however, is sufficient consideration to support an employment agreement. McRand, Inc. v. van Beelen (1985), 138 Ill. App. 3d 1045, 1055, 486 N.E.2d 1306 (McRand).

Mathes was hired on October 23, 1984; the restrictive covenant was signed in December 1984. According to William Tribble, chief executive officer of Agrimerica, the delay in signing the agreement was the result of Mathes’ copy being lost in the mail; therefore, he was allowed to sign it at a subsequent sales meeting. Further, Agrimerica did not discharge Mathes until more than two years later, March 31, 1987. This period constituted continued employment, which served as consideration sufficient to support the agreement. (McRand, 138 Ill. App. 3d at 1055.) The circuit court’s finding to the contrary was in error.

B

Agrimerica also challenges the circuit court’s finding that the agreement was signed through the use of coercion, thereby rendering it unenforceable.

Under certain circumstances restrictive covenants are contracts of adhesion because the employee is without any meaningful bargaining power. Jefco Laboratories, Inc. v. Carroo (1985), 136 Ill. App. 3d 793, 483 N.E.2d 999; see also American Food Management, Inc. v. Henson (1982), 105 Ill. App. 3d 141, 145-46, 434 N.E.2d 59.

At bar, the circuit court found that Mathes was in “a substantially weaker bargaining position” when presented with the noncompetition covenant. Tribble swore that all salesmen sign the covenant and that it is “not negotiable.” Further, if a prospective employee does not sign the document, Agrimerica will not hire him. Mathes testified that, at the time of his hiring in October 1987, he did not sign any papers and was unaware of the covenant until it was handed to him at the December sales meeting. He averred that he signed it because if he did not, he could no longer work for the firm. He also indicated that he had turned down other offers of employment in order to accept Agrimerica’s offer.

Upon cross-examination, Mathes acknowledged receipt of the employee handbook on the day he was hired. Although the handbook does not contain the specific covenant language, it informed Mathes of the requirement to sign the covenant, as follows:

“Confidential Information
All employees are required to sign a trade secret/non-compete agreement as a condition of employment. The purpose of this agreement is to protect product formulations and other proprietary information.”

The record is totally devoid of any evidence that Mathes was induced to sign the agreement under circumstances depriving him of the exercise of his own free will (Higgins v. Brunswick Corp. (1979), 76 Ill. App. 3d 273, 395 N.E.2d 81; Kaplan v. Keith (1978), 60 Ill. App. 3d 804, 377 N.E.2d 279), nor is there any evidence of fraud or wrongdoing. (Higgins v. Brunswick Corp., 76 Ill. App. 3d at 277.) Although claiming he was “uncomfortable” in signing the agreement and felt that he was being “told what to do,” nothing in the record shows that he sought to question or negotiate its terms. He had been offered jobs by three other firms; the record is silent as to whether they were or were not still available to Mathes when asked to sign the covenant. The record does show, however, that he accepted employment with Agrimerica because it offered him a “considerably higher salary.”

The circuit court’s conclusion that the agreement was signed by Mathes while under duress is without record foundation and was erroneous.

C

Agrimerica further argues that the circuit court erred in finding that it did not prove the existence of a protectable interest.

A restrictive covenant in an employment agreement will be upheld if it is reasonable in geographical and temporal scope and it is necessary to protect a legitimate business interest of the employer. (Morrison Metalweld Process Corp. v. Valent (1981), 97 Ill. App. 3d 373, 482 N.E.2d 1034.) The interest of the employer in such cases is in retaining its present customers in circumstances where the employee’s contacts and relationships with those customers engenders a substantial risk that the employee will be enabled to divert part of or all the employer’s business to the employee’s self-interest. (See Blake, Employee Agreements Not to Compete, 73 Harv. L. Rev. 625, 657 (1960).) To prove such a legitimate business interest, Illinois courts require that the employer have a near permanent relationship with its customers; and that but for the employment, the employee would not have had contact with the customers. McRand, 138 Ill. App. 3d at 1051.

Relying upon A.B. Dick Co. v. American Pro-Tech (1987), 159 Ill. App. 3d 786, 793, 514 N.E.2d 45, and McRand (138 Ill. App. 3d at 1051-53), this court, in its earlier opinion, set forth objective factors which, upon remandment, would aid in determining whether a near permanent relationship existed, namely “(1) the number of years required to develop the clientele; (2) the amount of money invested to acquire clients; (3) the degree of difficulty in acquiring clients; (4) the extent of personal customer contact by the employee; (5) the extent of the employer’s knowledge of its clients; (6) the duration of the customers’ association with the employer; and (7) the continuity of employer-customer relationships.” Agrimerica, 170 Ill. App. 3d at 1032.

As to the first factor, in the case sub judice, Kurt Marquardt, director of sales at Agrimerica, testified that it is nearly impossible to make a sale on the first call to a customer; salespeople need 6 to 12 months to establish credibility and confidentiality with a prospective customer and to persuade him to buy a new product. For defendants, David Decker, Far-Mor’s president, averred that to get started, a salesperson must make an initial call on the customer to ascertain whether there is a real need for the product and convince him to give Far-Mor’s product a “try.” Although he stated that this process can take anywhere from 1 day to 20 years, it appears that getting a customer to give a product a “try” could mean anything from accepting a sample to engaging in a test, or it may mean making a sale. Decker’s testimony in this regard is nebulous. It does not refute the assertion as to lead time required for developing a prospect into a purchaser. Ronald Kennedy, purchasing manager of Sunshine Mills, first testified for defendants that his employer “went to using *** [Agrimerica] pretty quick” after their first sales contact, but conceded ignorance as to whether that period could have been from less than six months to more than one year. The circuit court’s finding that “[customers can be obtained on the basis of a single sales call” is without record support.

Addressing the second factor, company investments to develop its client base, Marquardt and William Tuttle, Agrimerica’s director of technical services, explained a two-step process necessary to attract customers, namely, a perceived need for the product must be created in the customer’s mind, and research data must be formulated to show, empirically, the satisfaction of that need. Tribble, Agrimerica’s president, averred that the company spent approximately $300,000 in 1985 and $400,000 in 1986 on research. This evidence was noted and relied upon in the first appeal (Agrimerica, 170 Ill. App. 3d at 1032, 1035), as well as by the parties as stipulated evidence at the continued hearing. Defendants offered no evidence to contradict this testimony. Failure to produce relevant evidence to show the existence of a contrary alternative leaves the finding in the first appeal intact and uncontroverted. Such evidence cannot be ignored on remand. (See Nationwide Advertising Service, Inc. v. Kolar (1975), 28 Ill. App. 3d 671, 329 N.E.2d 300.) The circuit court erred in having done so here.

Evidence relating to the third factor, the degree of difficulty in acquiring clients, included Marquardt’s testimony that it was “nearly impossible” to make a sale on a first call to a customer and that he never heard of this happening to the industry. He stated, further, that Agrimerica does not attempt to displace a competitive product in its first stages of contact with a customer, but tries to sell a product which the customer is not then using. To counter this testimony, Decker asserted that Far-Mor has been able to take away business from competitors with ease; however, he was unable to identify any such success, aside from one unnamed customer in a period of V-lz years, with whom Mathes was not previously involved when employed by Agrimerica. The circuit court’s finding, that “[customers in the mold-inhibitor and feed flavoring industry are no more difficult to obtain than in any other market,” presupposes that evidence involving other markets, and the relative ease or difficulty in securing customers therein, was before the court. No such evidence was introduced, however. Further, evidence of difficulty presented by Agrimerica was hardly refuted by the recitation of one anonymous instance in an 18-month period. This is particularly significant since Far-Mor’s products are “considerably lower priced” when compared to Agrimerica’s pricing, according to Far-Mor’s own evidence. The circuit court’s finding with respect to this factor was against the manifest weight of the evidence.

The next factor to be considered is the extent of personal customer contact by the employee. Marquardt testified that Agrimerica sales representatives contact established customers approximately once per month; potential customers receive fewer calls. All client contact, whether by telephone or in person, is recorded in company “call reports.” Mathes admitted that each of the approximately 510 call reports he completed during his tenure at Agrimerica represented at least one call per customer. He agreed that he was the “key contact” between Agrimerica and its customers and developed “close personal relationships” with some of them. In addition, one of Agrimerica’s exhibits revealed that Mathes visited one customer’s plant 37 times in 28 months; another 26 times in 27 months; and still another 28 times in 29 months. Defendants’ witnesses, Charles Baldwin, W.B. Fleming’s president, and Kennedy of Sunshine Mills, both testified that their primary contact with Agrimerica was with Mathes, with whom they developed a “good relationship” and became “really good friends.”

In light of the foregoing, it is difficult to understand the circuit court’s finding that “salesmen for Agrimerica ***, including Mathes, did not have intensive contact with Agrimerica’s customers.” This finding simply is without foundation in the evidence and was in error.

In consideration of the fifth factor, the extent of the employer’s knowledge of clients, our previous opinion noted:

“Agrimerica’s knowledge of its customers extends beyond information gathered for research purposes, according to the evidence. For example, Marquardt stated that the company’s sales trainees receive data concerning their customers’ prior relationship with Agrimerica; learn how to demonstrate Agrimerica ingredients; and learn to act as ‘troubleshooters, ’ identifying and correcting problems clients develop with the specialty items. Furthermore, Mathes received four or five days of initial training at the Northbrook office before embarking on any sales calls and was accompanied for an additional week by his sales manager, who introduced Mathes to ‘key personnel’ of existing Agrimerica customers.” (Agrimerica, 170 Ill. App. 3d at 1033.)

In addition, and as mentioned above, written company call reports are required of Agrimerica’s sales personnel, which contain information about customers, including their product formulations, sales, problems, equipment, competition and their day to day operations. These reports advise Agrimerica of “what is going on [with the customers] *** so that if *** [Agrimerica] has to get back to them *** [the company] has a record” of previous discussions. This evidence was unrefuted by Far-Mor.

The circuit court found that “[o]ther than through its salesmen, Agrimerica’s management does not and did not have extensive involvement or knowledge of its customers.” Such a finding could have been made only by disregarding the foregoing record evidence and clearly is in error.

The next factor applicable in the “near permanent relationship” formula is the duration of customers’ associations with the employer. Agrimerica’s president, Tribble, testified that based upon his knowledge of regularity of purchases by customers of long duration, several Agrimerica customers had purchased from Agrimerica for more than 30 years. Further, 75% of Agrimerica’s sales are to purchasers who have been customers for five or more years. Although cross-examined by the attorneys for each defendant, in no instance was Tribble’s testimony on this point questioned. Defendants’ challenge to this evidence showed that of the four companies cited by Agrimerica as ex-ampies of lost profit customers, the duration of customer associations ranged from two years, four months to one week. This time, however, was measured to the period when Mathes’ covenant-violating activity commenced, which denied further duration to the association. Parenthetically, it should be noted that Agrimerica required more than two years and in excess of 16 sales calls to develop W.B. Fleming as a customer, an association that lasted but one month after the first sale, at which time Mathes was terminated.

Far-Mor’s president, Decker, testified that Far-Mor constantly works to keep its customers in a highly competitive industry. He did not relate the length of time Far-Mor has maintained its relationship with its customers. The feed flavor and mold inhibitor markets are becoming increasingly more competitive, according to Decker, because of new entrants into the field. On cross-examination, however, he admitted that there has been only one new entrant into the flavor field in the previous two years, and only one to three new entrants into the mold inhibitor field in the same period.

Ormund Isaacson testified for defendants on this subject. He introduced Mathes to Agrimerica for employment and had been associated with him in previous employment. Both he and Mathes were discharged by Agrimerica on the same day. At the time of the hearing, Isaacson was a defendant in an Agrimerica lawsuit for violating his own noncompetition covenant. His testimony concerning four customers developed exclusively in Mathes’ territory led to the erroneous finding by the circuit court, that “these four customers properly reflect Agrimerica’s actual relationship with its customers.” As noted in the first appeal, the question of continuity extends beyond a single territory and into patterns identifiable in the industry.

As earlier mentioned in this regard, Tribble testified that 75% of Agrimerica’s dollar sales volume is attributable to patrons who have been Agrimerica’s customers for over five years. Tribble was not cross-examined as to this evidence, and it was unchallenged. Tribble had been involved in the industry for over 25 years and was employed by Agrimerica for 17 years. It was error to summarily discount and disregard such evidence. The further finding, that two of the customers left Agrimerica “for price or quality of product considerations,” overlooks the fact that these were among the customers who were solicited by Mathes and that, notwithstanding its lower price, Far-Mor was unable to take away other customers not connected to Mathes, except one, which was unnamed. Agrimerica’s evidence relating to this factor also supports the factor concerning continuity of customer relations.

The conclusion of the circuit court as to these factors is contrary to the manifest weight of the material evidence and must be reversed.

Near permanent customer relationships also require a showing that, but for the employment in question, the employee would not have come into contact with the employer’s customers. (McRand, 138 Ill. App. 3d at 1053.) Mathes had never sold animal feed products in Georgia, Florida or Alabama before his employment with Agrimerica, and he was given Agrimerica’s previous year’s call reports prepared by their preceding representative in the territory, documenting customer information for Mathes. Also, he was accompanied by Agrimerica’s sales manager, who introduced him to key personnel of existing and potential Agrimerica customers. There is no claim that Mathes brought any customers with him when he first began employment with Agrimerica. Agrimerica’s evidence, unchallenged as to this factor, should not have been rejected by the circuit court.

Based upon the record evidence, the circuit court’s determination that Agrimerica did not prove near permanent relationships, and thereby a legitimate and protectable business interest, is against the manifest weight of the evidence and is reversed.

II

The circuit court also ruled that Agrimerica breached its contract with Mathes when it terminated his employment, rendering the non-competition agreement unenforceable. That agreement states that it becomes effective following an employee’s termination “for any reason.” The circuit court, however, found that Mathes was terminated without cause, apparently making good faith an implied contractual term. Contracts require that both parties promise to act in good faith (Osten v. Shah (1982), 104 Ill. App. 3d 784, 786, 433 N.E.2d 294), which has been implied as a contractual term of a restrictive covenant. See Rao v. Rao (7th Cir. 1983), 718 F.2d 219.

That Mathes’ employment was one at will is undisputed. Such employment may be terminated at any time and for any reason. (Barr v. Kelso-Burnett Co. (1985), 106 Ill. 2d 520, 525, 478 N.E.2d 1354; Ryherd v. General Cable Co. (1988), 124 Ill. 2d 418, 427, 530 N.E.2d 431.) At bar, Agrimerica dismissed Mathes following a reorganization of its sales department. There was no viable evidence that he was fired for any other reason. The requirement of good-faith dealing here did not convert an at-will relationship into some other contractual association.

The circuit court’s finding that Agrimerica breached its contract with Mathes is without basis in law or fact and must be reversed.

Ill

Agrimerica also assigns as error the circuit court’s finding that Far-Mor did not intentionally interfere with Mathes’ contract with Agrimerica.

The elements of tortious interference with a contract are (1) the existence of a valid and enforceable contract between plaintiff and another; (2) the awareness on the part of the defendant of the contractual relation; (3) defendant’s intentional and unjustified inducement of the breach of the contract; (4) a subsequent breach by the other caused by defendant’s wrongful conduct; and (5) damages. Corroon & Black, 145 Ill. App. 3d at 167; Belden Corp. v. InterNorth, Inc. (1980), 90 Ill. App. 3d 547, 551, 413 N.E.2d 98 (Belden Corp.).

At the hearing on the petition for a preliminary injunction, Decker testified that, before hiring him on May 21, 1986, he knew Mathes had signed a restrictive covenant with Agrimerica and saw a copy of that covenant by June 1987. Mathes was hired by Far-Mor mainly to service customers in Alabama, Florida and Georgia, the very regions that he had been assigned to develop during employment by Agrimerica. Mathes represented to Decker that he had close relationships with individuals who were employees of Agrimerica’s customers and thought he could get some to switch to Far-Mor. Decker believed that Mathes’ contacts would help sell Far-Mor products to them. Indeed, Mathes was to receive a bonus for “new business,” including products sold to his former Agrimerica customers. Decker was aware of Mathes having solicited business from these Agrimerica customers for Far-Mor, and he encouraged Mathes to do so. He never told Mathes not to call on or sell to customers to whom Mathes previously sold Agrimerica products.

The circuit court found no malicious inducement of contract breach because Agrimerica had no protectable interest in the Mathessolicited former Agrimerica’s customers.

With respect to the requirement of malice, mentioned by the circuit court here, the term is often included as an element for tortious interference with a contract, but simply means an attempt to interfere without sufficient justification. (Belden Corp., 90 Ill. App. 3d at 552 n.2.) Evidence of ill-will, spite or hatred is not required. (Lord v. Melton (1980), 80 Ill. App. 3d 1057, 1060, 400 N.E.2d 547; Marcus v. Wilson (1973), 16 Ill. App. 3d 724, 306 N.E.2d 554; Worrick v. Flora (1971), 133 Ill. App. 2d 755, 758, 272 N.E.2d 708.) Justification in this context is an affirmative defense. (Zamouski v. Gerrard (1971), 1 Ill. App. 3d 890, 897, 275 N.E.2d 429.) The facts constituting affirmative defenses must be pleaded and proved by the party raising such defenses. (Ill. Rev. Stat. 1987, ch. 110, par. 2—613(d).) Far-Mor has neither pleaded nor proved justification in this case. Decker, its president, testified that he knew Mathes had signed a restrictive covenant with Agrimerica; that Mathes had close relationships among Agrimerica’s customers; and that he “encouraged [Mathes] to contact as many people, no matter who they bought from” before, on behalf of Far-Mor.

The circuit court’s finding an absence of tortious interference by Far-Mor, in light of the foregoing, is against the manifest weight of the evidence and will be reversed.

IV

Agrimerica next asserts that the circuit court abused its discretion in denying injunctive relief necessary for Agrimerica to win back its former customers from Far-Mor.

Agrimerica notes that Mathes was separated from Agrimerica on March 30, 1987. During this period he did not observe the restrictive covenant. Agrimerica argues that it would be inequitable to allow Mathes and Far-Mor to profit from the illegal activity in which Mathes engaged, and which Far-Mor encouraged, by permitting them to retain the customers that Mathes illegally procured for Far-Mor. Agrimerica requests the entry of a final injunction, enjoining for a period of two years both Mathes and Far-Mor from soliciting sales from or selling products to those previous Agrimerica customers to whom Mathes sold products during the two years following termination of his employment at Agrimerica.

No case is cited specifically considering the issue raised here; however, Agrimerica relies upon Brunswick Corp. v. Outboard Marine Corp. (1980), 79 Ill. 2d 475, 404 N.E.2d 205 (Brunswick), in which an issue with reference to an appropriate remedy for improper use of a trade secret was raised. Affirming its earlier decision in Schulenburg v. Signatrol, Inc. (1965), 33 Ill. 2d 379, 212 N.E.2d 865, the supreme court held that the injunction there entered should extend through the period of time necessary for defendant to copy or develop the trade secret by lawful means. Another decision, ILG Industries, Inc. v. Scott (1971), 49 Ill. 2d 88, 273 N.E.2d 393, was also affirmed in Brunswick, in which the court required an injunction to run from the date of the injunction order and not the date that the trade secrets were wrongfully acquired. The supreme court explained that under such circumstances, the developer of the trade secret should be placed in the same position it would have occupied absent the breach and the restraint, consistent with the other objectives placed upon competitors and the utilization of the competitors’ and employees’ skills. (Brunswick, 79 Ill. 2d at 479-80.) The present case, however, does not involve trade secrets.

In the first appeal of this case, we noted, in discussing an appropriate remedy (Agrimerica, 170 Ill. App. 3d at 1035):

“In addition, continued contacts by Mathes could result in damage extending far beyond the time restriction enunciated in the covenant; the two years needed to solidify initial customers relationships may be again required to win back a former client lost to Far-Mor as a result of Mathes’ advances.” (Emphasis added.)

There is no evidence found in this record with respect to the length of time Agrimerica needed to reestablish or “win back” customer relationships severed by the conduct of either Mathes or Far-Mor. In determining the reasonableness of a proposed continuance of such restraint of trade, to be considered are (1) potential public harm through lack of competition; (2) undue hardship to the promisor; and (3) whether the restraint imposed is greater than necessary to protect the promisee. (House of Vision, Inc. v. Hiyane (1967), 37 Ill. 2d 32, 37, 225 N.E.2d 21; Dryvit System, Inc. v. Rushing (1985), 132 Ill. App. 3d 9, 12, 477 N.E.2d 35.) Absent the foregoing evidentiary bases upon which to consider the reasonableness of the proposed “final” restraint, we cannot order entry of a two-year injunction on this record. On remand, the circuit court should consider such further evidence as may be adduced by the parties in consonance with the foregoing enumerated premises and enter appropriate orders with respect to any relief such evidence may justify. (McRand, Inc. v. van Beelen, 138 Ill. App. 3d at 1058; Donald McElroy, Inc. v. Delaney (1979), 72 Ill. App. 3d 285, 295, 389 N.E.2d 1300.) Also to be considered is the effect that the passage of time may have had upon the parties’ interests since the initial violation of the agreement. See Shapiro v. Regent Printing Co. (1989), 192 Ill. App. 3d 1005, 1013, 549 N.E.2d 793.

The denial of injunctive relief is reversed and remanded for further hearing.

V

Agrimerica contends the circuit court erred in not ordering FarMor to account for its sales to Agrimerica’s customers.

Whether a party has established a cause of action for an accounting is a question of fact for the circuit court, and its finding on that question will not be disturbed unless it is against the manifest weight of the evidence. (Ferrera v. Collins (1983), 119 Ill. App. 3d 819, 457 N.E.2d 109.) The circuit court has the discretion as to whether an accounting should be ordered; there are no guidelines for determining when an accounting is warranted because the need for such relief is dependent upon the particular facts of each case. Ferrara, 119 Ill. App. 3d at 822; Bung-Orn Netisingha v. End of the Line, Inc. (1982), 107 Ill. App. 3d 275, 278, 437 N.E.2d 857.

A review of the record indicates that the circuit court was presented with sufficient, albeit contradictory, evidence to render a decision as to whether an accounting was necessary, or not. We will not disturb its judgment in this regard.

VI

Agrimerica’s final argument is that the circuit court improperly denied it monetary damages for the reason that Agrimerica produced insufficient proof of lost profits.

In order to successfully maintain a claim for lost profits, the evidence must show a loss with a reasonable degree of certainty and the wrongfulness of the opposing party’s act causing the loss. (Madison Associates v. Bass (1987), 158 Ill. App. 3d 526, 542, 511 N.E.2d 690.) A loss need not be proven with absolute certainty; such profits will always be uncertain to some extent and calculation may be incapable of mathematical precision. (Midland Hotel Corp. v. Reuben H. Donnelly Corp. (1987), 118 Ill. 2d 306, 315-16, 515 N.E.2d 61.) Although it may be impossible to ascertain the exact amount of lost profits from a breach of a noncompetition covenant, this fact alone is not justification for refusing compensation to the injured party. (Tower Oil & Technology Co. v. Buckley (1981), 99 Ill. App. 3d 637, 647, 425 N.E.2d 1060.) In cases of this character, the law requires only that the evidence establish a basis for the assessment of damages with a fair degree of probability. Schatz v. Abbott Laboratories, Inc. (1972), 51 Ill. 2d 143, 147, 281 N.E.2d 323.

The circuit court found there was no showing by Agrimerica of overall business losses as the result of Mathes’ activity. Whether overall loss for Agrimerica occurred in the period following Mathes’ separation from Agrimerica and his employment by Far-Mor is irrelevant, however, to the question of whether in fact Agrimerica lost profits as a result of Mathes’ activities among its previous customers. More in point, the circuit court found Agrimerica’s proof of lost profits to be “totally insufficient” because (1) it was based on “blatant hearsay which this Court excluded from evidence,” (2) it was based on “a handful of projections,” (3) its predictions lacked “credibility,” and (4) causation by defendants’ wrongful acts was not shown. We have already considered and rejected the theory of Far-Mor’s noninvolvement in Mathes’ wrongful conduct under part III of this opinion and will not repeat here what was said there.

The evidence concerning damages involved four former Agrimerica customers, each of which was acknowledged to have been called upon by Mathes while employed by Agrimerica and to whom Agrimerica products were sold during that period, namely, Sunshine Mills, W.B. Fleming, Seminole Stores, and Callaway Farms.

Agrimerica’s comptroller, Thomas Walser, who possesses an MBA degree, concentrating on finance, testified as to damages Agrimerica sustained due to defendants’ conduct. Walser first determined actual past sales for each of the four customers during the time Mathes was employed by Agrimerica. This information was extracted from call reports prepared for Agrimerica by Mathes and from invoices showing actual sales, which were in evidence. He then averaged that total to get a figure representing yearly sales. He also amassed data, introduced into evidence, concerning the amount of product each customer had purchased and averaged it to obtain the average yearly amount the customer would need. He then multiplied that figure by the unit price, deducting any bulk discount for which the customer qualified. The total then was reduced to account for material costs, sales commissions, and freight and shipping costs.

Defendants attempted to counter the foregoing with evidence from depositions given by representatives of two of the four companies Agrimerica previously serviced, but assertedly lost through Mathes’ efforts. In both instances, the witnesses testified that they had switched from Agrimerica to other additive suppliers. Kennedy, of Sunshine Mills, testified that his firm was in the process of changing suppliers before Mathes was fired; he “dreaded” telling Mathes this because they had a good relationship; they were switching to Kemin as a result of product testing; and Agrimerica’s products were causing corrosion to the company’s machinery. The evidence showed, however, that the decision to stop purchases from Agrimerica, alleged by Kennedy to have been made in January 1987, was followed by further Agrimerica sales to Sunshine Mills that same year. No transfer of purchases to Kemin took place until 1988; significantly, this was after sales first were made by Far-Mor through Mathes to Sunshine Mills in March 1988. No one representing Far-Mor contacted Kennedy before Mathes did, according to the record.

Kennedy was unable to identify the extent of any corrosion problem caused by Agrimerica and made no effort to find out. Kennedy admittedly was a close friend of Mathes. Worthy of note is the call report authored by Mathes after talking to Kennedy, addressed to FarMor, which revealed that on May 21, 1987, the day Mathes began working for Far-Mor, Kennedy told Mathes that Sunshine Mills would be ready to order Far-Mor products in September 1987 and asked Mathes to arrange for tests, the results of which would warrant giving him the order.

Baldwin explained that his firm, W.B. Fleming, had switched from Agrimerica because its prices were too high; his company looks for suppliers who can give it the “best field results and costs”; Mathes’ leaving Agrimerica did not influence the decision to switch, economics did; and Fleming was “stormed” by suppliers after it had made a decision to use liquid additive as opposed to dry additive. It was Mathes’ solicitation of Fleming during the two-year period of his covenant, however, which led to the sales by Far-Mor during that time over Agrimerica. Indeed, Baldwin, Mathes’ friend, admitted that he first heard of Far-Mor through Mathes after Mathes left Agrimerica.

The evidence of lost profits submitted by Agrimerica, based upon actual past sales to and the reasonably projected product usage by the four customers previously serviced by Mathes, including part of 1987, the year of his termination, required the circuit court to award substantial compensation to Agrimerica. The projections, appropriately founded upon past demonstrated profits, established a basis for the assessment of damages “ ‘with a fair degree of probability’ ” (Schatz v. Abbott Laboratories, 51 Ill. 2d at 148, quoting Barnett v. Caldwell Furniture Co. (1917), 277 Ill. 286, 289, 115 N.E. 389), and should have been considered by the circuit court in reaching a fair and just conclusion as to damages. Failure to have done so was contrary to the manifest weight of the evidence, which requires reversal and remandment for reevaluation at the trial level. The circuit court may take into account such additional or diminutional factors as changes in the market in general, or Agrimerica’s share thereof in particular, shown by the evidence, in the three-State territory previously serviced by Mathes.

No evidentiary bases appear, however, for projecting an additional year of continuing similar levels of profit. In this regard, as to the claimed third year of projected lost profits, the circuit court correctly considered the state of the evidence as entirely speculative and must be affirmed.

For the reasons set forth above, the decision of the circuit court is affirmed in part, reversed in part and remanded for further proceedings consistent with this opinion.

Affirmed in part; reversed in part and remanded.

DiVITO, P.J., and SCARIANO, J., concur.

      On November 18, 1988, Mathes’ motion to dismiss his counterclaim pursuant to section 2—1009 of the Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 2—1009) was granted.

      Except for retaliatory discharge cases, discussed in Barr (106 Ill. 2d at 525).

      Defendants’ claim that the figures relating to Sunshine Mills improperly included sales to the Tupelo, Mississippi, plant, which lies outside Mathes’ territory, disregards the evidence that the decision to purchase Agrimerica’s product was made in Sunshine Mills’ Red Bay, Alabama, plant, and the decision to discontinue those purchases was also made in Red Bay, with no participation by Tupelo plant personnel in making that decision.


source: Caselaw Access Project

license: Public Domain

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. STEVEN MOODY, Defendant-Appellant.
    First District (2nd Division)
    No. 1—87—1578
    Opinion filed May 22, 1990.

      Randolph N. Stone, Public Defender, of Chicago, for appellant.
    Cecil A. Partee, State’s Attorney, of Chicago, for the People.
   JUSTICE HARTMAN

delivered the opinion of the court:

Defendant appeals from his conviction for murder, claiming that the circuit court erroneously: (1) admitted expert testimony at trial; (2) permitted the State to bolster witness testimony; and (3) allowed the State to impeach defendant with his post-arrest silence. Defendant also charges that he was not proved guilty beyond a reasonable doubt.

Because an issue is raised as to whether defendant was proved guilty beyond a reasonable doubt, the evidence adduced in this case must be set forth in some detail.

On August 29, 1985, defendant was arrested for the shooting of Ronald or Ronnie Lee (Lee) in Chicago, who died of his gunshot wounds at 12:47 p.m. that same day. A jury convicted defendant of murder, and he was sentenced to 25 years in the custody of the Illinois Department of Corrections.

At trial, Lieutenant Charles Mandel testified he received a call of “shots fired” while on patrol at 12:30 a.m. on August 29, 1985, drove to the 8600 block of Kingston and saw a man pointing southward in an alley. Handel proceeded down the alley to the rear of 8623 Essex, where he saw a man lying in a pool of blood, bleeding from the head and neck. The victim told him “Moody shot me” and that defendant drove away in an “apple red Pontiac.” Handel saw a packet of white powder on the ground, near the victim’s body. After calling for an ambulance, Handel left the scene to look for the perpetrator. Unsuccessful, he returned to the alley and noticed that police officers Ron Coleman and John Franklin had someone in the back seat of their squad car. Handel told neither officer that he knew the name of the offender, because the officers told Handel “they had an eyewitness to the incident” who “had all the information.” Handel told no one at the State’s Attorney’s office of the victim’s remarks until a year and one-half after the incident. He made no written report of the shooting; his job of watch commander was supervisory in nature, and he was not required to make written reports.

Officer Franklin averred he was in his squad car with Coleman at approximately 12:30 a.m. on August 29, 1985, when they received a radio call of “shots fired” and then of a “man shot in the alley of 86th and Essex.” Driving to the scene, the officers noticed a man on the corner of “87th and South Chicago,” jumping up and down, waiving and yelling for the car to stop. The man, whom Franklin identified as (Dalton) “Woods,” said, “Somebody just killed my buddy,” got into the squad car and directed the officers to where the victim lay in the alley, face up, with numerous wounds to the head and neck. The victim was not moving, and Franklin believed him to be dead. When they touched the victim, however, he raised his upper torso and attempted to stand. Franklin also saw a clear plastic bag of white powder near the victim’s body.

Detective Peter Dignan asserted he arrived at the scene at approximately 12:30 a.m. Franklin, Coleman and Woods were still in the alley. At approximately 2 a.m., he and his partner, Detective Buffo, were taken by Woods to defendant’s apartment at 7620 South Shore Drive. Woods knocked on the door and identified himself to defendant as “Dog.” The door swung open, and defendant came to the door pointing a gun at Dignan and Buffo. Dignan kicked in the door, grabbed defendant’s gun, “took [defendant] down” and disarmed him. Dignan and Buffo kicked and hit defendant as they struggled with him for control of the gun. Dignan described defendant’s behavior as loud and combative, and that defendant appeared to be under the influence of narcotics. Dignan was unaware defendant lost a tooth during the scuffle. After he disarmed defendant, Dignan turned him over and handcuffed him, saying “You are under arrest for shooting Ronald Lee.” Defendant then said “Okay, okay, I did it.” Dignan denied striking defendant with his own revolver when struggling with defendant.

Forensic pathologist Barry Lifschultz averred the autopsy he performed on August 30, 1985, revealed four gunshot wounds to Lee’s body namely: a wound in his right chest; another at the right back of his neck, where the bullet entered and passed through the back of Lee’s mouth; a third where the bullet “perforated the skin of” his right ear, went through the rear of the oral cavity and exited on the left side of Lee’s face; and a final wound on the right side of Lee’s face or neck, with an exit hole at the back of his neck. Lifschultz maintained that there was no damage to Lee’s voice box or tongue, and that none of the wounds described made it physically impossible for him to speak.

Deotrise Vance, defendant’s second cousin, testified that she lived in defendant’s apartment in August 1985 and was told by him that he intended to kill Lee because defendant was “tired of Jackie being upset with” Lee. Jackie Moody was defendant’s cousin, the former girlfriend of Lee and the mother of Lee’s child. Defendant told Vance he planned to “lure [Lee] down there” with cocaine. On August 28, 1985, Vance was with defendant in his apartment and noticed he had a handgun and saw a clear plastic bag of white powder in a suitcase in defendant’s closet. She also heard defendant make a telephone call from the apartment to Thelma Lee, Lee’s mother, telling Thelma that he wanted to get in touch with Lee and that he had information “someone was out to get” Lee. Defendant wanted to use Vance’s car to drive to Lee’s home, but Vance refused.

Vance next spoke to defendant by telephone several days after his arrest and he eventually admitted to her that he killed Lee. He threatened Vance that he would kill her if she told anyone that he murdered Lee and continued to call Vance collect, several times a day until December 1985, when she moved from the apartment. He continually threatened Vance and warned her he could have her killed even though he was in jail. She changed her telephone number once. Vance never discussed defendant’s plans to murder Lee with anyone prior to the incident. She met with defendant’s attorney in September 1985; paid him $150 for his services; told him she believed defendant killed Lee; did not tell him about defendant’s threats; and did not inform him that she intended to testify for the State at trial. She spoke with two other defense attorneys in February 1987 and told them she would testify on the State’s behalf.

Thelma Lee testified that the victim, her son, was living in her home on August 28, 1985, when defendant called there approximately five times, identifying himself by name. Defendant made one of the calls between 7 and 8 p.m. and informed Thelma someone had a “hit out on” Ronnie. Thelma told Lee defendant had been calling for him. A few minutes after 11 p.m. on August 28, Lee was at home with Woods and a third person; Lee left soon after with Woods. She next saw Lee at the hospital on August 29.

Thomas Bachelder, an evidence technician with the Chicago police department, testified that he performed an atomic absorption gun residue test on defendant on August 29, which consisted of wiping both sides of defendant’s hands with chemically treated cotton swabs, sealing the swabs in vials and delivering them to the crime lab’s micro-analysis section. Bachelder stated that obtaining a positive residue test 30 hours after a person fired a handgun was improbable. The maximum amount of time after discharge of a gun the residue test could be expected to prove positive would be four to five hours.

In 1985 Jean Goliak was employed as a “criminalist” in the police department’s crime lab. She analyzed the swabs from the gun residue test and testified that the residue on defendant’s hands indicated he discharged a firearm, was in close proximity of a firearm when it was discharged, or handled a firearm that had been discharged. The highest concentration of residue was on the back of defendant’s right hand. Goliak contended that if a person fires a gun, the highest concentration of residue falls on the back of his firing hand; if he handles a gun only, the highest concentration is on the palm of the hand.

Defendant’s first attorney averred he met with Vance on September 16, 1985, and that she never told him she believed defendant killed Lee, but informed him she didn’t think defendant was capable of such an act and believed defendant innocent.

Jackie Moody testified she was at the home of her sister, Debra Moody, on August 28, sometime between 10 p.m. and midnight, when defendant came to the residence and asked her, “Where’s Dee Dee [Vance]?” Jackie noticed defendant had a gun in his hand. She admitted failing to give the authorities this information until a week before the trial, but said she had never had an opportunity to meet with them until just before trial.

Defendant, on his own behalf, insisted he never told Vance he intended to kill Lee and never threatened her. He was self-employed as a tailor, and about August 23, 1985, Woods came to his apartment to look at some suits. Woods told defendant there was “bad blood” between Woods and Lee and that Woods “was going to kill him about some things,” including the fact Lee “shot up” the house of Woods’ neighbor and shot at the neighbor’s dog. Woods also said he and Lee had entered into a “cocaine deal” together and Lee “took the money and hadn’t gave [sic] him any cocaine.”

Defendant again saw Woods at 10 p.m. on August 27, as defendant was walking down the street carrying a garment bag. Woods and another man drove up to him, stopped him, and asked to see any suits defendant had. After conversing about clothes, Woods asked defendant if he could take them someplace where they could buy cocaine. Defendant declined, and Woods’ companion became “agitated” and appeared to reach for something. Defendant began to run away from them and heard three gunshots fired after him; Woods and the other man then got in their car and proceeded after defendant. Defendant pulled out his own gun and fired three or four shots back at the car, which then turned around and drove in the opposite direction. Defendant testified he spoke to Lee by telephone on the evening of August 28 and informed him of the incident with Woods and that Woods had threatened to kill Lee. Defendant also warned Thelma that threats were directed against her son, but not by whom.

On August 29, defendant averred, he was asleep in his apartment at midnight; at approximately 1:45 or 2 a.m. he heard a knock at his door and Woods’ voice saying, “This is Dog.” He cracked the door and saw a man pointing a gun at him, and slammed the door shut. Defendant had his own revolver in his hand because Woods had tried to “gun [him] down” the preceding evening and because defendant knew Woods “has been in prison for murder.” A voice on the other side of the door said, “Open the door. This is the police.” Defendant complied after he put his own revolver down. When he opened the door, police entered his apartment and “immediately began to beat” defendant “to the ground.” Defendant described the beating as “pretty bad” and maintained he lost a tooth when hit in the mouth with a pistol butt. One of the officers was Dignan. When the police stopped hitting defendant, they attempted to talk to him, but he replied only that he was a veteran and “wanted to stand on my fifth amendment rights to see a lawyer.”

Defendant stated that he was thereafter taken to the police station and that he refused to answer any questions, though he did make certain statements, such as he was a Chuck Taub Indian and that he had been hit by a car. He couldn’t recall telling authorities, however, that: the last time he heard about Lee was three weeks prior to the shooting when Lee allegedly kidnapped defendant’s nephew; he visited his son on August 28 and returned home at about 7 p.m.; and he then left his apartment alone to walk on the lakefront for about an hour. Defendant further denied telling authorities that he had called Thelma Lee on August 28, telling her that members of defendant’s family were “talking about killing [Lee].” Defendant contended he did not fire a gun earlier on the day of his arrest.

On cross-examination, defendant first said that he did not wash his hands in the period between his shoot-out with Woods on August 27 and his submission to the gun residue test on August 29. He then testified, “I didn’t say that I didn’t wash my hands. I didn’t do a lot of washing with my hands.” Finally, this exchange occurred: “[Assistant State’s Attorney Quinn]: The question is, did you wash your hands? Defendant: I can’t recall.” Defendant never told police about his earlier confrontation with Woods because he knew he had violated the law by having a gun on his person and for firing it within city limits.

Assistant State’s Attorney Wayne Jakalski said he interviewed defendant on August 29 and August 30, at which time defendant contended he: hadn’t seen Lee for three weeks; knew “there was something involving a kidnapping of his nephew”; talked to Thelma Lee five times on August 28; arrived home before dusk on August 28 and went for a walk along the lakefront for an hour.

The court sentenced defendant and denied his post-trial motion. He appeals.

I

Defendant first assigns error to the admission of evidence technician Bachelder’s testimony as an expert, which he claims lacked sufficient foundation. Defendant insists the court improperly overruled defense counsel’s objection where the State failed to establish Bachelder’s qualifications to analyze gunshot residue results, as opposed to merely administer the process.

The State bears the burden of demonstrating that, because of skill, training or experience, an individual is better able to form a more accurate opinion as to matters under consideration than the ordinary person. (People v. Park (1978), 72 Ill. 2d 203, 209, 380 N.E.2d 795; People v. Pruitt (1974), 16 Ill. App. 3d 930, 939, 307 N.E.2d 142.) Only if the resulting error is clear and prejudicial will this court usurp the circuit court’s broad discretion to accept an expert as qualified. People v. Aliwoli (1976), 42 Ill. App. 3d 1014, 1019, 356 N.E.2d 891.

Bachelder described his training in the administration of gunshot residue tests as: an eight-hour session taught by the Chicago police department chemistry and microanalysis sections; and the “practical application” of conducting the test 200 to 300 times since 1984. He has testified approximately 75 times and in each case was certified an expert in administering the test. He stated he does not analyze the residue on the swabs delivered to the crime lab and learns the results of the tests by asking those who performed them or if someone else tells him.

The evidence above stated recalls People v. Owens (1987), 155 Ill. App. 3d 990, 999, 508 N.E.2d 1088, where the court found the admission of a crime technician’s testimony regarding “blood spatters” at the crime scene improper: “[T]he State did not establish Knight’s qualifications as a blood-spatter analyst. The State did not produce any evidence of *** Knight’s training or experience in the field of blood-spatter analysis.” (See also People v. Perry (1986), 147 Ill. App. 3d 272, 275, 498 N.E.2d 1167; People v. Adams (1981), 102 Ill. App. 3d 1129, 1134, 430 N.E.2d 267.) Bachelder here emphasized his experience was limited solely to administration of the test and that he learned of test results only through those who actually analyzed the swabs. The court therefore erred in certifying Bachelder qualified to render an opinion concerning residue test analysis.

Any error spawned by Bachelder’s statement that a positive test result could not be achieved 30 hours after discharge of a weapon, however, was harmless. Defendant’s equivocation on the question of when he last washed his hands prior to arrest decreased the impact of Bachelder’s conclusion to such a degree that it could not fairly be deemed prejudicial.

Other statements going to the time lapse between discharge of a weapon and the performance of the gun residue test, moreover, were acceptable. Bachelder maintained that, from his own personal observation, tests administered more than five hours from the discharge of the weapon were more likely to yield negative results than tests performed within a shorter period of time. Such a conclusion, based on information volunteered to him by individuals analyzing the swabs, was adequately grounded in personal experience to constitute an admissible professional opinion. (People v. Wade (1977), 51 Ill. App. 3d 721, 728, 366 N.E.2d 528.) The information was properly submitted to the jury for whatever weight they may have chosen to give it.

II

Defendant next contends the court erred in allowing the State to impeach his exculpatory trial testimony with evidence of his post-arrest silence and argue the fact of this silence as evidence of his guilt.

The State responds that defendant waived this issue by neglecting to object at trial or by post-trial motion to the introduction of the evidence. (See People v. Enoch (1988), 122 Ill. 2d 176, 186, 522 N.E.2d 1124.) Defendant here unsuccessfully moved in limine to bar his impeachment with matters he failed to tell police, which may explain counsel’s neglect to voice objections when the evidence was introduced at trial; nevertheless, defendant failed to object with specificity in his post-trial motion, ordinarily barring appellate review. People v. Enoch, 122 Ill. 2d at 187; People v. Smith (1985), 139 Ill. App. 3d 21, 27, 486 N.E.2d 1347.

The use of an arrestee’s silence to impeach a subsequent explanation has been held “fundamentally unfair,” given the “insolubly ambiguous” message broadcast by one exercising his right not to speak. (Doyle v. Ohio (1976), 426 U.S. 610, 617-18, 49 L. Ed. 2d 91, 97-98, 96 S. Ct. 2240, 2244-45.) Review of such questions otherwise waived is mandated where, as here, defects in the proceedings below impinge upon “substantial rights.” People v. Walker (1985), 109 Ill. 2d 484, 497, 488 N.E.2d 529; see also People v. Monaghan (1976), 40 Ill. App. 3d 322, 326, 352 N.E.2d 295.

Due process precludes a prosecutor from impeaching defendant’s exculpatory testimony, offered for the first time at trial, by cross-examining defendant regarding his failure to inform police of his explanation after receiving Miranda warnings at the time of his arrest. Greer v. Miller (1987), 483 U.S. 756, 762-63, 97 L. Ed. 2d 618, 628, 107 S. Ct. 3102, 3107; Doyle v. Ohio, 426 U.S. at 619, 49 L. Ed. 2d at 422, 96 S. Ct. at 2245; People v. Robinson (1976), 44 Ill. App. 3d 447, 449, 358 N.E.2d 43; People v. Monaghan, 40 Ill. App. 3d at 326.

Defendant’s uncontradicted testimony in the case sub judice established that he asserted his right to an attorney immediately after police officers subdued him at his apartment on August 29. He additionally raised for the first time at trial the alleged threats made by Woods against Lee’s life and the fact of his confrontation with Woods on August 27, 1985.

On cross-examination, the State probed defendant’s failure to explain these events to authorities in August 1985, including whether he ever reported to the police that: Dalton Woods had told him that he wanted to kill Ronald Lee; Woods wanted to shoot Ronald Lee over a shooting of a neighbor’s dog; Woods wanted to kill Ronny Lee over a cocaine deal; and Woods had tried to kill him earlier on the 27th of August 1985. He was asked whether the first time he ever told anybody that: he was shot at by Woods and his partner on the 27th of August was at trial; and Woods had threatened to kill Ronny Lee was at trial. He was further questioned whether: he ever reported the shoot-out he had near 74th and Coles, when he shot four shots, and Woods and his partner shot three shots at him; and he ever reported the shoot-out when Woods was there in his apartment accusing him of murdering Ronny Lee.

In closing and rebuttal argument, the State argued the significance of defendant’s post-trial silence to the jury, stating if they were victims of armed robbery and someone was shooting at them, so that they were victims of attempted murder, or aggravated battery, they certainly would call the police; that after they were charged with a murder they were going to say something to the police about the fact “this guy been over bothering [them], nearly stuck [them] up, and nearly killed [them] out on the street two days earlier.”

The State may impeach exculpatory statements inconsistent with remarks made by defendant before trial. (People v. Chriswell (1985), 133 Ill. App. 3d 458, 466, 478 N.E.2d 1176.) Here, however, defendant consistently refused to answer the authorities’ questions before trial. The State thereby possessed no statements “manifestly inconsistent” with defendant’s trial testimony which could properly be used for impeachment purposes. People v. Nolan (1987), 152 Ill. App. 3d 260, 268, 504 N.E.2d 205.

This was not harmless error. The State inflicted serious damage on defendant’s credibility and undermined his alibi, factors critical to his defense. (People v. Nolan, 152 Ill. App. 3d at 268.) The court never instructed the jury to disregard evidence of defendant’s silence following his arrest. (See Greer v. Miller, 483 U.S. at 763, 97 L. Ed. 2d at 629, 107 S. Ct. at 3107-08.) This was substantial error which requires reversal.

Ill

Defendant also urges error in the State’s efforts to bolster Deotrise Vance’s testimony with evidence of her prior consistent statements.

Testimony regarding a prior consistent statement is inadmissible, except when used to refute an express or implied charge of recent fabrication (People v. Shum (1987), 117 Ill. 2d 317, 340-41, 512 N.E.2d 1183; People v. Olesch (1986), 143 Ill. App. 3d 577, 587, 492 N.E.2d 1381) or of a motivation to testify falsely (People v. Shum, 117 Ill. 2d at 340-41).

On cross-examination, Vance admitted she never told defendant’s lawyer of the threats defendant directed against her, and first told the authorities in 1987 of her knowledge of defendant’s intention to kill Lee. She did not inform Thelma Lee of defendant’s plans, although she had known Lee’s mother for several years.

On redirect examination, she was asked a series of questions which had the clear effect of bolstering her testimony on direct examination. The State correctly observes that these questions could be inferred as rebutting recent fabrications or an inference of a motivation to testify falsely. Defense counsel objected to all but the first question and was sustained on each objection. The court instructed the jury at the close of the case to ignore evidence upon which objections were sustained. The mere occurrence of improper remarks alone does not mandate reversal. (People v. Whitfield (1986), 140 Ill. App. 3d 433, 440, 488 N.E.2d 1087.) Timely objection by defense counsel and an appropriate admonition by the court will prevent error, or in the event error occurs, render it harmless, even when the alleged error occurs more than once. (People v. Olesch, 143 Ill. App. 3d at 588; People v. Taylor (1977), 53 Ill. App. 3d 810, 817-18, 368 N.E.2d 950; see also People v. Rowe (1983), 115 Ill. App. 3d 322, 328, 450 N.E.2d 804.) The challenged remarks do not merit reversal as material factors in defendant’s conviction, or in prompting a judgment different from that which would have resulted absent the alleged impropriety. (People v. Olesch, 143 Ill. App. 3d at 586-87.) No error occurred below from the State’s attempted use of Vance’s prior consistent statements.

IV

Defendant’s last contention attacks the sufficiency of the evidence presented at trial, insisting that the State failed to establish his guilt beyond a reasonable doubt.

Reversal is permissible only where the evidence is so palpably contrary to the finding of guilt, or so unreasonable, improbable or unsatisfactory that it raises reasonable doubt of defendant’s guilt. (People v. Olesch, 143 Ill. App. 3d at 584.) The fact of defendant’s conviction requires this court to view all evidence in a light most favorable to the State. People v. Collins (1985), 106 Ill. 2d 237, 261, 478 N.E.2d 267.

Evidence adduced in the instant case demonstrated an identification by the victim of the individual who shot him, and defendant’s statement “Okay, okay, I did it,” upon his arrest for shooting Lee. Vance testified that defendant told her weeks before the shooting that he intended to kill Lee and the means by which he intended to do it, all of which was corroborated by the presence of a bag of white powder next to the victim’s body at the crime scene and the fact his death occurred by shooting.

Defendant’s alibi defense and credibility were substantially impeached by the following evidence: Jackie Moody’s testimony placing him outside of his apartment and with a revolver in his hand sometime between 10 p.m. and midnight on August 28; Thelma Lee’s testimony that she received five telephone calls on August 28, informing her that a “hit” was out on her son; Vance’s statement that she heard defendant phone the Lee residence that day, telling Thelma Lee her son’s life was in danger; and Assistant State’s Attorney Jakalski’s averments regarding defendant’s whereabouts on August 28. Forensic evidence introduced at trial established that the gun residue found on defendant’s right hand was consistent with someone who had discharged a firearm. Defendant’s statement that he couldn’t “recall” whether he washed his hands on the day of his arrest and expert testimony that positive results on the residue test were unlikely more than five hours after discharge of a firearm undermined defendant’s contention that the residue on his hand was from the alleged shootout with Woods on August 27.

Citing People v. Thomas (1979), 75 Ill. App. 3d 491, 493, 394 N.E.2d 624, defendant argues that the “[o]missions, discrepancies, and improbabilities” in the police officers’ and Vance’s testimony rendered their statements incredible. It is the jury’s province, however, to weigh the evidence presented, judge the credibility of the witnesses and determine facts. People v. Rowe, 115 Ill. App. 3d at 325.

The alleged weaknesses in the witnesses’ testimony in the instant case were neither as material nor as fatal to the State’s case as defendant argues. Mandel conceded he failed to record Lee’s dying declaration and to inform Coleman and Franklin of the statement, yet he also stated his duties did not include making written reports and that the other officers had an eyewitness in custody who provided them with the information they needed. Franklin concurred that his written report described Lee as “unconscious” at the scene, but his assertions at trial that Lee lay perfectly still with his eyes closed until Franklin touched him are not clearly contradictory. Franklin also reminded the jury that reports are merely summaries of the events in question. Although Vance’s statement that she informed the defense attorney in 1985 of her belief that defendant murdered Lee was contradicted, defendant offered no evidence other than his own testimony to rebut Vance’s assertions that defendant threatened to kill her if she revealed his guilt to anyone.

The evidence cannot be portrayed as so palpably contrary to the finding of guilt as to justify, alone, a reversal of defendant’s conviction.

The error committed by the State in introducing the fact of defendant's post-arrest silence denied defendant a fair trial and requires reversal and remandment of the conviction entered below for a new trial.

Reversed and remanded.

BILANDIC, P.J., and EGAN. J., concur.

       Justice Egan participated in the decision of this case prior to becoming a member of the sixth division of the appellate court.


author: JUSTICE SCARIANO

text:
    INDEX FUTURES GROUP, INC., Plaintiff-Appellee, v. HARRY ROSS, Defendant-Appellant.
    First District (2nd Division)
    No. 1—88—3737
    Opinion filed May 22, 1990.
    Rehearing denied July 11, 1990.

      John E. Dolkart, and Tenney & Bentley, both of Chicago (Michael J. Childress, of counsel), for appellant.
    W. Scott Porterfield, of Fishman & Merrick, P.C., of Chicago, for appellee.
   JUSTICE SCARIANO

delivered the opinion of the court:

This action was brought to recover a deficit in defendant’s commodity trading account by plaintiff broker. Defendant filed an answer and an amended answer containing affirmative defenses and counterclaims which admitted that there was a deficit in his account, but denied liability and sought additional damages based on allegations that plaintiff was grossly negligent, had engaged in willful misconduct, committed fraud, and breached its fiduciary duty owed to defendant. The trial court struck and dismissed defendant’s affirmative defenses and counterclaims, and granted summary judgment to plaintiff. We affirm.

Plaintiff Index Futures Group, Inc. (Index), is a commodities brokerage firm located in Chicago and a member of the principal commodities exchanges in the United States. Defendant Harry Ross, a resident of California, maintained a commodity trading account with Index from April 1985 through January 1986. Ross granted a power of attorney to James Reed and Symanco, Inc., an investment advisory firm located in California in which Reed was the principal, to trade his account.

The rights and duties of both Index and Ross are governed by their contractual agreement, which Ross executed on April 6, 1985, and which contained the following provisions:

“1. Governing Rules and Regulations.
All transactions executed under this Agreement for the Accounts shall be governed by applicable laws and rules enacted by the exchange and clearing organization, if any, where such transactions are executed, by the applicable self-regulatory organization and by applicable federal and state law and regulations. ***
2. Customer’s Orders and Delegation of Responsibilities.
* * *
The Company [Index] shall not be responsible for any losses related to the Accounts and incurred as a result of other than its own gross negligence or willful misconduct. Accordingly, the Company shall not be responsible for any loss or delay in execution arising from, but not limited to, faulty order transmission and communication, fluctuations in currency values, inability to communicate with Customer, or other causes beyond the Company’s control. Except as required by applicable law or regulation, the Company shall not be required to inquire into the circumstances surrounding a transaction it may have with Customer. Any inquiry undertaken by the Company will not result in the imposition of additional responsibilities not expressly agreed to by the Company in this Agreement.
* * *
7. Indemnification
Customer acknowledges and agrees that the Company shall not be responsible to Customer for any losses resulting from conduct or advice (including, but not limited to, errors and negligence) of any broker-dealer, futures commission merchant, introducing broker, commodity trading advisor or other person or entity that introduces Customer to the Company or has authority over trading in the Accounts. Customer acknowledges that the Company has no responsibility to supervise the activities of any such person or entity, and agrees to indemnify the Company for any loss, liability, or damage (including attorneys’ fees) incurred by the Company as a result of actions taken or not taken by such person or entity.”

Pursuant to this last clause, any daily losses accruing in a commodities trading account are paid initially to the futures exchange clearing house by the brokerage firm, which then seeks compensation from its customer based on the indemnification provisions set forth above, as limited by the terms of paragraph 2, also set forth above.

As previously noted, Ross engaged the services of Symanco, Inc., headed by James Reed, as his commodity trading advisor, and signed an agreement giving it the authority to trade for his account. Throughout the time period relevant to this case, Symanco traded for only four customers (including Ross), all of whom executed customer agreements with Index and granted Symanco trading authority over their accounts. At the request of Symanco, Index made arrangements which permitted Reed to have direct telephone access to order clerks employed by Great American Trading Company located on the floor of Commodity Exchange, Inc. (Comex), a New York commodity exchange. Reed was not required to place his orders first with Index personnel who would then transmit them to Comex, as was normally the practice; moreover, Reed always placed them as block orders, which did not distinguish whom the order was for, nor did it list individual customer account numbers. After the close of the market each day, he would direct Index to assign newly acquired futures contracts to a customer’s account number based on the equity in that customer’s account as of the prior day’s close of business.

In April 1985, Ross placed a $30,500 initial investment in his trading account, which then earned over 24% profit by the end of the year. At the close of trading on January 8, 1986, defendant’s account showed 14 open futures contracts, was fully margined, and had a total equity balance of $26,646. On January 9, pursuant to his trading system, Reed purchased a total of 400 short silver futures contracts for his four customers. The market refused to cooperate and moved drastically higher. Reed then called in an order to purchase 1,000 long futures contracts, attempting to take advantage of the rising prices for his clients, but the order was rejected by the Great American telephone clerk on the floor of the exchange. After the clerk also rejected his request to purchase 500 long futures contracts, Reed ordered him to liquidate the entire Symanco position, and this was done the same day at a loss of nearly $500,000. The record does not indicate why the orders were rejected, although Reed testified at his deposition that his orders had always been accepted in the past.

Based on the equity in Ross’ account as of the prior day, $119,400 of the total loss was allocated against him, resulting in a net deficit in his account of $92,754. Because Reed was distraught over the loss, and was unable to calculate manually how many contracts should have been apportioned to each of his four customers, as had been his past practice, he advised Index of his system and had it perform the computation.

After Ross refused its demands for payment, Index filed its complaint for breach of contract. In response, Ross pleaded affirmative defenses and counterclaims charging Index with breach of contract, gross negligence and willful misconduct, common law fraud, and breach of fiduciary duty. These allegations were based on his assertions that Index accepted block orders from Reed, that Index permitted Reed to trade Ross’ account despite the lack of sufficient funds for margin, and that Index permitted Reed to place orders directly to the floor of Comex and allocated a portion of the trades placed in the block orders to Ross’ account.

The trial judge rejected Ross’ arguments, struck and dismissed his “amended answer and counterclaim [sic],” and entered summary judgment in favor of Index, holding that Ross had not demonstrated that Index had breached any duty owed to Ross. The judge reasoned that Index did not owe Ross a duty to refrain from accepting block orders so long as the trades were fairly allocated, and that Index did not owe Ross a duty to refuse Reed’s orders without requiring additional margin or to otherwise supervise Symanco or Reed. This appeal followed.

We affirm.

I

On appeal, Ross argues that Index breached a duty emanating from three distinct sources: a contractual duty, a duty based on negligence concepts, and a duty to refrain from fraud and self-dealing. Ross’ contractual duty argument relies on paragraph 1 of the Index customer agreement, more fully set forth above, which requires the parties to abide by all applicable laws, agency regulations, and other industry rules. Ross contends that Index violated regulations promulgated by the Commodity Futures Trading Commission (CFTC or Commission), exchange rules, and rules of the National Futures Association (NFA). More specifically, he asserts that block orders such as those placed here by Reed violated CFTC Regulation 1.35 (17 C.F.R. §1.35 (1989)), Comex Rules 4.88 and 5.13, and NFA Compliance Rule 2—4. He further alleges that Index violated Comex Rule 6.05(a), which prohibits members from carrying undermargined accounts. Since paragraph 1 bound Index to comply with all applicable rules, laws, and regulations, Ross argues that these violations constitute a breach of contract sufficient to relieve Ross of his obligation to indemnify Index and sufficient to support his counterclaims.

We agree that paragraph 1 imposes additional contractual duties on Index (Keehner v. A.E. Staley Manufacturing Co. (1977), 50 Ill. App. 3d 258, 365 N.E.2d 275; see also Iowa Grain v. Farmers Grain & Feed Co. (Iowa 1980), 293 N.W.2d 22); however, we do not find Index has breached any of these duties. CFTC Regulation 1.35 provides, “Each futures commission merchant and each introducing broker receiving a customer’s or option customer’s order shall immediately upon receipt thereof prepare a written record of such order, including the account identification and order number.” (17 C.F.R. §1.35(a—1) (1989).) Ross relies heavily on a CFTC decision in which the administrative law judge (ALJ) imposed liability upon a futures commission merchant for permitting block trading in violation of Regulation 1.35, despite the fact that the claimant did not demonstrate that he received unfavorable treatment in the allocation of the trades. Stiller v. Shearson Loeb Rhoades, Inc. (CFTC 1983), [1980-82 Transfer Binder] Comm. Fut. L. Rep. (CCH) par. 21,219 (initial determination).

Ross’ reliance on this decision is unwarranted because the ALJ’s decision was vacated by the CFTC later that year. (Stiller v. Shearson Loeb Rhoades, Inc. (CFTC 1983), [1982-84 Transfer Binder] Comm. Fut. L. Rep. (CCH) par. 21,780 (Comm’n review).) In vacating the ALJ’s decision, the Commission noted that the violation of Regulation 1.35’s prohibition against block trades did not entitle the claimant to damages because he did not show a preferential system of allocation, and any losses he sustained were therefore not proximately caused by the trades. The case was remanded for further proceedings to determine damages. The Commission again reviewed the ALJ’s disposition of the case in 1985 and reaffirmed that the complainant had failed to establish that a violation of Regulation 1.35 was the proximate cause of his losses. Stiller v. Shearson Loeb Rhoades, Inc. (CFTC 1985), [1984-86 Transfer Binder] Comm. Fut. L. Rep. (CCH) par. 22,663 (Comm’n review). See also Maloley v. R.J. O’Brien & Associates (CFTC 1984), [1984-86 Transfer Binder] Comm. Fut. L. Rep. (CCH) par. 22,366 (initial determination), rev’d on other grounds (CFTC 1986), [1986-87 Transfer Binder] Comm. Fut. L. Rep. (CCH) par. 23,012 (Comm’n review); compare Parciasepe v. Shearson, Hayden, Stone, Inc. (CFTC 1982), [1980-82 Transfer Binder] Comm. Fut. L. Rep. (CCH) par. 21,461 (initial determination), aff’d in part & rev’d in part (CFTC 1985), [1984-86 Transfer Binder] Comm. Fut. L. Rep. par. 22,464 (Comm’n review) (violation of Regulation 1.35 found, less clear showing of impartial allocation method than was made in this case).

Here, the record indicates, and Ross does not dispute, that the futures contracts purchased pursuant to the block orders were apportioned among the four Symanco customers in a completely impartial manner. The 400 contracts purchased were allocated in proportion to the number of open positions held by each customer prior to the execution of the order. Based on this evidence, we conclude that any violation of CFTC Regulation 1.35(a—1) was not the proximate cause of his losses and could not give rise to liability under paragraph 1 of the customer agreement; nor do we perceive any reason as to why the same rationale should not apply to the analogous Comex and NFA rules.

Moreover, while Comex rules prohibit a member from carrying undermargined positions, Rule 6.05(a) states, “[a] member or member firm may use its discretion in permitting a customer not to deposit margin on a futures contract or open position which is both established and closed out on the same business day.” The 400 futures contracts at issue in this case were all purchased and closed out on January 9, 1986. Consequently, Index’s decision to allow Reed to trade without requiring additional margin was not a violation of Comex margin rules.

Since Ross has not shown any actionable failure to comply with any applicable laws, CTFC regulations, NFA rules, or Comex rules, his argument that Index has breached paragraph 1 of the customer agreement must be rejected.

II

We turn next to an analysis of Ross’ claim that Index breached a negligence-based duty. As a threshold matter, the fact that Ross attempts to characterize his negligence claims as a breach of Index’s fiduciary duty of care does not mitigate from their true nature and does not allow Ross to attempt a Northwest Passage around the agreement between the parties requiring indemnification absent a showing of gross negligence. The same principles control liability under either theory. (Fustock v. Conticommodity Services, Inc. (S.D.N.Y. 1985), 618 F. Supp. 1082, 1085; see also In re Estate of Pirie (1986), 141 Ill. App. 3d 750, 492 N.E.2d 884 (an executor owes a fiduciary duty to use the skill and diligence of an ordinary prudent person in conducting similar business for his or her own benefit); Restatement (Second) of Agency §379 comment c. (1958).) However, since we find that, as a matter of law, Index did not breach any duty owed to Ross, we need not address Ross’ contention that Index committed negligent acts rising to the level of gross negligence.

The duty of care owed by a broker carrying a nondiscretionary account for a customer is an exceedingly narrow one, consisting at most of a duty to properly carry out transactions ordered by the customer. (Anspacher & Associates, Inc. v. Henderson (7th Cir. 1988), 854 F.2d 941; Refco, Inc. v. Troika Investment, Ltd. (N.D. Ill. 1988), 702 F. Supp. 684.) Thus, with respect to such accounts, a broker owes its customers a duty of care in connection with the performance of the functions of a futures commission merchant as described in 17 C.F.R. §1.3(p) (1989) — taking orders, executing trades, and dealing with customer funds. Sherman v. Sokoloff (S.D.N.Y. 1983), 570 F. Supp. 1266, 1269 n.10; see also Martin v. Heinold Commodities, Inc. (1987), 117 Ill. 2d 67, 78, 510 N.E.2d 840, 845 (“as a general rule, an agent’s fiduciary duty is limited to actions occurring within the scope of his agency”).

Here, Ross asserts that Index breached its duty of care because it permitted Reed to place block orders; it permitted Reed to place orders despite the fact that there were insufficient funds in his account to cover possible margin calls; and it permitted Reed to place orders directly with clerks on the floor of Comex. These allegations are but reflective of Ross’ expectations, expectations that go well beyond Index’s duty to ensure that Reed’s orders, placed pursuant to a valid power of attorney, were properly executed. (Compare Henderson, 854 F.2d 941 (fiduciary duty breached when broker failed to comply with customer’s order to close out his account).) If Symanco or Reed exceeded the scope of his agency or breached his fiduciary duties, Index cannot be held responsible; Ross’ remedy lies against Symanco and its principal, Reed.

Ill

The final source of duty alleged by Ross to have been breached is based on the relationship of trust existing between himself and Index. He charges Index with willful misconduct, fraud, and a breach of the fiduciary duty of loyalty. Ross’ main brief, in a rather confusing manner, treats these as if they are three distinct legal theories. This is clearly not the case. Ross does not allege any type of fraudulent misrepresentation, but relies instead on a theory of constructive fraud. (See generally Vermeil v. Jefferson Trust & Savings Bank (1988), 176 Ill. App. 3d 556, 532 N.E.2d 288; In re Estate of Neprozatis (1978), 62 Ill. App. 3d 563, 378 N.E.2d 1345.) Constructive fraud has been defined as:

“[A]ny act, statement or omission which amounts to positive fraud or which is construed as a fraud by the courts because of its detrimental effect upon public interests and public or private confidence. It requires neither actual dishonesty nor intent to deceive, being a breach of legal or equitable duty which, irrespective of the moral guilt of the wrongdoer, the law declares fraudulent because of its tendency to deceive others.” (Neprozatis, 62 Ill. App. 3d at 568, 378 N.E.2d at 1349.)

There is no indication that this concept differs in any meaningful way from a breach of the fiduciary duty of loyalty owed to a principal by his or her agent. (See Restatement (Second) of Agency §387 (1958); see also Paskas v. Illini Federal Savings & Loan Association (1982), 109 Ill. App. 3d 24, 30, 440 N.E.2d 194, 198 (“[constructive fraud will be found in a breach of duty arising out of a fiduciary or confidential relationship”).) Consequently, the same duty analysis applies under both theories.

Ross first alleges that Index breached its duty by failing to consider the block trades as “mishandled” trades which, according to industry practice, must be absorbed by the broker. (Robertson v. Clayton Brokerage Co. (N.D. Ga. 1984), 587 E Supp. 678.) He contends that the allocation of the trades to Symanco’s customers was an attempt to avoid large trading losses which Index should have rightly accepted.

This argument is without merit. Ross has failed to cite a single case holding that block orders are considered mishandled trades. To the contrary, as we have noted above, the CFTC has held that block trades are permissible as long as there is no preferential allocation of trades. (Stiller v. Shearson Loeb Rhoades, Inc. (CFTC 1983), [1982-84 Transfer Binder] Comm. Fut. L. Rep. (CCH) par. 21,780 (Comm’n review); Maloley v. R.J. O’Brien & Associates (ALJ 1984), [1984-86 Transfer Binder] Comm. Fut. L. Rep. (CCH) par. 22,366.) The Robertson decision is distinguishable since the asserted error did not involve block orders; the brokerage firm in that case closed out the customer’s position at a price below that stipulated by the customer.

Ross also claims Index breached a duty of loyalty by permitting Reed to place trades directly with clerks on the trading floor at Comex, thus conspiring in some way to further Reed’s wrongful course of conduct. He cites Rolf v. Blyth, Eastman Dillon & Co. (2d Cir. 1978), 570 F.2d 38, cert. denied (1978), 439 U.S. 1039, 58 L. Ed. 2d 698, 99 S. Ct. 642, a case in which the defendant broker repeatedly told its customer that, if his trading advisor recommended certain stocks, the stocks were good, conservative investments. The evidence at trial established that the broker in fact knew that some of the stocks recommended by the trading advisor were highly speculative. The court stated the broker had engaged in wrongful “hand-holding,” and found that the broker had aided and abetted the advisor’s fraud. Rolf 570 F.2d at 48.

The broker’s wrongful acts in Rolf are distinguishable from Index’s conduct in this case. Index did nothing which it knew or should have known would further any misconduct by Reed. Ross did not rely on any representation by Index regarding the quality of Reed’s trading, and the customer agreement specifically stated that Index did not endorse the operating methods of the trading advisor handling his account.

IV

Having held that the trial court correctly concluded that Ross failed to establish a breach of any legal duty owed him by Index, it clearly follows that the trial court properly struck and dismissed his counterclaims and affirmative defenses. In reviewing the trial court’s grant of a motion to strike a counterclaim, the ruling will be upheld if there is no set of facts that can be pleaded on which recovery could be allowed. (First Security Bank v. Bachleda (1987), 165 Ill. App. 3d 725, 520 N.E.2d 660.) It is also clear that a decision striking an affirmative defense must be affirmed if no facts are pleaded which give rise to a legally cognizable defense. Vermeil v. Jefferson Trust & Savings Bank (1988), 176 Ill. App. 3d 556, 532 N.E.2d 288.

In this case, Ross has not alleged facts sufficient to establish the breach of any legal duty owed to him by Index, either in the context of a defense or a counterclaim. Index does not dispute any of the factual allegations made by Ross; it challenges his claims solely as a matter of law. We agree with Index that, as a matter of law, it has not breached any duty imposed upon it as a broker handling a nondiscretionary account or imposed by contract. Accordingly, we need not address Ross’ remaining issue that “Index may not be indemnified for its own gross negligence or willful misconduct, fraud, or breach of fiduciary duty.”

This lack of any factual dispute leads us irresistably to affirm the trial judge’s grant of summary judgment in favor of Index, for it is elementary that a party is entitled to summary judgment where there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. (Ill. Rev. Stat. 1987, ch. 110, par. 2—1005(c).) Although Ross claims that there are disputed issues of fact, these “fact” disputes concern whether Index owes Ross any duty of care in connection with the managed account program. It is evident that Ross merely disagrees with the trial judge's legal conclusions, as he points to no facts which could possibly lead to a contrary result. Since we have upheld the trial judge’s conclusions of law, Ross’ challenge to the grant of summary judgment must fail.

We need only briefly address for the sake of completeness Ross’ contention in his main brief that the trial judge incorrectly denied his motion to amend his pleadings after they were stricken “without leave to amend.” As Index points out in its brief, however, Ross never filed such a motion, and never made this argument before the trial court, all of which Ross conceded in oral argument before this court, although his reply brief is silent on the point. Since Ross agrees that he neither tendered an amendment nor requested leave to amend, his complaint in his opening brief cannot give him any berth in this court. Godfrey Township Utility Board v. Hand (1967), 79 Ill. App. 2d 192, 223 N.E.2d 743.

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

Affirmed.

DIVITO, P.J., and BILANDIC, J., concur.

      Symanco and Reed, both originally named as defendants in a counterclaim and third-party complaint filed by Ross, are used interchangeably in this opinion. The disposition of this complaint is not at issue here, and neither Symanco nor Reed is a party to this appeal.