text:
    DAVIDE W. TOMEI, Plaintiff-Appellant, v. EDWIN E. TOMEI et al., Defendants-Appellees.
    First District (3rd Division)
    No. 1—90—1903
    Opinion filed September 2, 1992.
    Bishop, Callas & Wagner, of Crystal Lake (Robert J. Wagner, of counsel), for appellant.

      Bell, Boyd & Lloyd, of Chicago (John P. Scotellaro and Randy J. Curato, of counsel), for appellees.
   JUSTICE TULLY

delivered the opinion of the court:

On November 30, 1989, the trial court granted a temporary restraining order in favor of Affiliated Insurance Consultants (AIC), enjoining appellant Davide Tomei from soliciting any AIC clients in accordance with a stock purchase agreement, which prohibited the solicitation of AIC clients by Davide Tomei. Pursuant to this agreement, AIC agreed to pay Davide for his stock in AIC on an installment basis. Because Davide allegedly breached the nonsolicitation covenant of the agreement, AIC withheld $10,024 of installment payments as liquidated damages. Both parties motioned for summary judgment and injunctive relief, to enforce their respective rights under the stock purchase agreement. On June 1, 1990, the trial court entered summary judgment in favor of AIC, enjoining Davide from soliciting any AIC accounts and denying Davide’s summary judgment motion and his demand for payment of the money withheld by AIC. Davide appeals from both orders.

Davide and Edwin Tomei are brothers. Prior to the initiation of this litigation, appellant Davide Tomei (Davide) was the controlling principal of AIC. Appellee Edwin Tomei (Edwin) was a shareholder and director of AIC. Both Davide and Edwin owned a 41.7% interest of the issued and outstanding shares of AIC. In 1978, the parties entered into a restrictive stock purchase agreement, wherein both parties were given a right of first refusal, to purchase the other party’s share, prior to a sale to any third party.

In April 1987 Davide received a written proposal from Whitney Financial Corporation, to purchase his shares in AIC. Although Davide never offered to sell his stock to Whitney Financial, he delivered a copy of the proposal to AIC, with a note, indicating that Whitney Financial would be inspecting AIC’s records. Edwin refused to allow any inspection of the company’s records. As a result, Whitney Financial withdrew its proposal in May 1987. Prior to Whitney’s withdrawal, Edwin sent a letter to Davide, outlining his own proposal for the purchase of Davide’s share of the company, in accordance with the provisions of the restrictive stock purchase agreement. The letter contained a price term of $137,889 for the stock, allegedly calculated using the pricing method stated in the restrictive stock purchase agreement. The letter also set a closing date of July 2,1987.

In an effort to forestall the sale of his stock, Davide filed a declaratory judgment action against Edwin, requesting that the court enjoin Edwin and AIC from selling or otherwise transferring Davide’s share of the company and to declare that no binding contract for the sale of Davide’s stock existed between Davide and Edwin. In addition, Davide requested that the court define the relative rights of the parties under the restrictive stock purchase agreement. Davide also alleged that the value of Edwin’s offer was 10% of the purchase price proposed by Whitney Financial. According to the Whitney proposal, the fair market value of the stock was at least $1.275 million. Appellant further alleged that he had personally guaranteed over $1.4 million of AIC’s long-term debt.

This initial litigation was settled by the negotiation of a stock purchase agreement (the Agreement) in October 1987 wherein Edwin and AIC agreed to buy out Davide’s shares for $1.125 million. This agreement contained a nonsolicitation covenant, prohibiting Davide from soliciting or attempting to solicit any AIC customers until October 1990.

In early 1989 Davide approached an AIC customer, John Bro-derick, at a meeting of the Chicago Regional Trucking Association. Broderick said his insurance (with AIC) was getting too expensive. In response, appellant informed Broderick that “he had a really good thing going in insurance” and that he “could do [Broderick] a lot of good.” He also told Broderick of his three-year nonsolicitation agreement and asked Broderick if he could get in touch with him at the end of this time. Broderick agreed and said he would look forward to it. Davide Tomei had previously solicited Broderick to buy AIC insurance several years earlier.

Some months later, Broderick received the following advertising package from Davide: (1) An “Overview and Analysis” from the American Inter Fidelity Exchange describing available insurance protection and listing Davide Tomei as one of its directors; (2) a newspaper clipping, describing falling premiums in the insurance industry; (3) an advertising flier for Accountable Carrier’s Insurance Agency, in the form of a “phone memo” from Davide Tomei to the president of the target company, with Davide’s phone number and the message: “Get ready for another liability insurance cost and availability crunch!” The memo was marked “Please Call” and “Rush”; (4) a prepaid reply postcard addressed to David Tomei, inviting the recipient to request more information about self-help insurance; and (5) an advertisement in the form of a letter-invitation from Davide Tomei on Accountable Carriers Insurance stationery, targeted at trucking companies. In addition, a red rubber-stamped message next to Davide’s name said: “We believe your expiration is near — please call me for $ pricing.”

At his deposition, Davide stated that he briefly spoke with Bro-derick about the self-help insurance project he was working on and mentioned that he was “under a non-compete [contract] until the fall of ’90.” He personally designed and prepared the advertising package which had been mailed to Broderick. The ad campaign was part of a mass mailing to over 800 companies in the trucking industry. Davide obtained the “expiration of insurance list” from the Illinois Commerce Commission. The original list contained 1,300 companies, which Davide reduced to 800 by the elimination of “movers, tankers, couriers, the [AIC] customers I could remember, people that I knew that I wasn’t interested in calling on again.”

Broderick mailed the advertising materials to his agent at AIC. On April 28, 1989, AIC notified Davide that these materials clearly constituted solicitation in violation of section 2.03 of the stock purchase agreement. As a result, AIC declared that it was entitled to liquidated damages in the amount of twice the previous year’s commission earned on the Broderick account. AIC stated that it would deduct this amount, or $10,024, from the balance owed to Davide under the stock purchase agreement. Davide responded with a demand for full payment under the stock purchase agreement and declared the entire amount of the outstanding balance under the Agreement as immediately due and payable.

AIC and Edwin Tomei filed a verified motion for temporary restraining order and preliminary injunction enforcing the nonsolicitation covenant of settlement agreement. In response, Davide filed a counterpetition for declaratory judgment, demanding enforcement of the settlement agreement.

On November 30, 1989, the trial court granted AIC’s temporary restraining order, finding that Davide had breached the nonsolicitation covenant and prohibited him from attempting to solicit other AIC accounts. The parties then filed cross-motions for summary judgment on their respective petitions for declaratory relief. On June 1, 1990, the Honorable Monica D. Reynolds granted AIC’s summary judgment motion, entering a permanent injunction against Davide prohibiting any further solicitation of AIC’s clients. Davide’s summary judgment motion to enforce the stock purchase agreement and accelerate the balance was denied.

On appeal, Davide raises two issues: (1) whether he, in fact, breached the nonsolicitation covenant of the stock purchase agreement, through his contacts with John Broderick, an AIC customer; and (2) whether the Agreement’s liquidated damages provision is actually a penalty, and thus, unenforceable.

Section 2.03 of the stock purchase agreement reads:

“Non-Solicitation of Trucking Accounts
Notwithstanding the terms and provisions of Section 2.02, Davide agrees that until the third anniversary of the date of this Agreement neither (a) he in his individual capacity, nor (b) he as employee, agent or independent contractor of any other individual or entity, nor (c) any entity in which he may be interested as a partner, officer, employee or shareholder, shall directly or indirectly in any manner persuade or attempt to persuade any trucking or Allied account which was a customer or account of Affiliated on August 24, 1987 to discontinue its relationship with Affiliated or solicit or divert or attempt to solicit or divert any such customer or account from Affiliated. *** The publication of advertisements in newspapers, journal, television, radio, or other forms of media communication to the public generally, or to the trucking industry specifically, shall not be deemed a solicitation or breach of this section.” (Emphasis added.)

Appellant does not dispute the validity and effect of this provision. The single issue is whether appellant’s contacts with John Bro-derick, a former Affiliated customer, amounted to a breach of this provision. Appellant argues that his conversation with Broderick and the mailing of insurance advertisements to him did not constitute a “solicitation” as a matter of law. Appellant contends that because he told Broderick about his three-year nonsolicitation agreement, the other statements made to him could not have been a solicitation. Secondly, appellant contends the advertising package was part of a mass mailing to the trucking industry and thus, was a “media communication” to the trucking industry, specifically exempted from the nonsoli-citation covenant.

Whether a particular client contact constitutes a solicitation depends upon the method employed and the intent of the solicitor to target a specific client in need of his services. In this case, the direct solicitation of insurance customers, as opposed to a general advertisement, suggests a private communication directed at a person or persons, known by the solicitor to have an immediate or potential need for insurance. (Smith, Waters, Kuehn, Burnett & Hughes, Ltd. v. Burnett (1989), 192 Ill. App. 3d 693, 703, 548 N.E.2d 1331, 1336.) In Smith, the court refused to find a breach of a nonsolicitation agreement by an attorney who placed general legal advertisements in local newspapers.

In the instant case, Davide Tomei engaged in a direct mailing campaign, specifically targeted at trucking companies known to have insurance policies soon to expire. Clearly, this was a “solicitation” specifically targeted at known potential new clients. Although this might have otherwise been exempted as a “media communication” to the trucking industry, Davide specifically targeted companies whose insurance was about to expire. Moreover, Davide narrowed the original industry list of 1,300 to 800 companies, eliminating Affiliated customers and undesirable target customers. This course of calculated conduct by Davide belies his contention that this was a media communication to the trucking industry, specifically, or to a random group of trucking companies within the industry.

Secondly, Davide approached John Broderick, known by Davide to be an AIC customer, and told him that he “had a really good thing going” and that he could get Broderick “a good deal.” Although Davide told Broderick of the nonsolicitation covenant, he asked Bro-derick if he could contact him at the end of the three-year prohibition period, presumably to sell him insurance. Davide claims that these statements did not violate the covenant since they were intended to solicit Broderick’s business at a future time, when the covenant would no longer be in effect.

We cannot agree. The plain language of the covenant prohibits any actual or attempted solicitation, in any manner, of any AIC trucking account or any attempt to divert any such customer from Affiliated. To exempt the solicitation of future business from the covenant would virtually nullify its very purpose. Such an interpretation would allow Davide Tomei free to solicit any or all of AIC’s clients, so long as he informed them of the three-year nonsolicitation covenant. Moreover, of the $1.125 million owed by AIC to Davide under the stock purchase agreement, $833,750 was allocated for Davide’s compliance with the nonsolicitation covenant. This reenforces the notion that Davide was prohibited from soliciting AIC’s clients for present or future business.

The final issue on appeal concerns the validity of the liquidated damages provision. Section 2.07 of the stock purchase agreement reads:

“Liquidated Damages
If Davide breaches any term or condition of [the nonsolicitation covenant], then he shall pay to Affiliated as liquidated damages the sum of two times the previous year’s commissions paid to Affiliated for the customer or account to which the breach relates.”

For a liquidated damages provision to be held enforceable, two conditions must exist: (1) the damages resulting from a breach must be difficult to calculate; and (2) the amount of fixed damages must be a reasonable forecast of the damage likely to occur. (Bauer v. Sawyer (1956), 8 Ill. 2d 351, 359, 134 N.E.2d 329, 333; Callahan v. L.G. Balfour (1989), 179 Ill. App. 3d 372, 377, 534 N.E.2d 565, 568.) In Callahan, plaintiff was a regional salesman for defendant company. Upon termination, plaintiff began working for one of defendant’s competitors. Plaintiff’s employment contract contained a covenant not to compete, which, upon breach, allowed defendant to withhold salary and commissions due plaintiff as liquidated damages. The court held this provision unenforceable as a penalty, since there was no relationship between the salary owed to plaintiff and the actual damages caused by his breach.

In the case at hand, damages resulting from an attempted solicitation are clearly difficult to calculate, since an attempted solicitation may or may not result in future damage to AIC. The method of calculation in the damage provision is directly tied to the previous year’s commission earned by AIC from the customer whom Davide Tomei solicited or attempted to solicit. This appears to be a fair and reasonable scheme for fixing damages. It is true, in some cases, the attempted solicitation will never mature and no actual damage will be incurred by AIC. However, where an attempt is successful, the permanent loss of a customer could result in forfeited commissions, far beyond two years.

For all of the foregoing reasons, the decision of the circuit court of Cook County is affirmed in all respects.

Affirmed.

GREIMAN, P.J., and RIZZI, J., concur.


source: Caselaw Access Project

author: JUSTICE CERDA

license: Public Domain

text:
    ALEXANDER B. MAGNUS, JR., Plaintiff-Appellant, v. LUTHERAN GENERAL HEALTH CARE SYSTEM et al., Defendants-Appellees.-PARKSIDE DEVELOPMENT CORPORATION, Plaintiff-Appellant, v. ALEXANDER B. MAGNUS, JR., Defendant-Appellee.
    First District (3rd Division)
    Nos. 1—91—2534, 1—91—2661 cons.
    Opinion filed September 2, 1992.

      Rudnick & Wolfe, of Chicago, for Alexander B. Magnus, Jr.
    Mayer, Brown & Platt, of Chicago, for Parkside Development Corporation.
   JUSTICE CERDA

delivered the opinion of the court:

This is a consolidated appeal arising from the purchase and sale of various assets, including real estate, related to the development of a retirement housing project in Arlington Heights. Albert B. Magnus, Jr., and his partner, Joel Hillman, sold the assets to Lutheran General Health Care System (Lutheran General) and its subsidiary, Parkside Development Corporation (Parkside). One of the improvements on the property was a house. Relying on an October 17, 1986, Letter of Intent (Letter of Intent), Magnus attempted to exercise an option to remove the house by notifying Lutheran General and Parkside, which responded that Magnus had no such right. Magnus then brought an action for declaratory judgment, breach of contract, specific performance, a constructive trust, and reformation of the contract. The trial court granted summary judgment in favor of defendants, Lutheran General and Parkside, on each of Magnus’ claims.

On appeal, Magnus asserts that the trial court erred by entering summary judgment in favor of defendants because (1) the Letter of Intent was an enforceable contract; (2) the December 29, 1986, nursing home purchase agreement (Agreement) did not supersede the Letter of Intent; (3) the parties never agreed to exclude the house option; (4) there should have been a constructive trust because defendants knowingly procured Magnus’ house through a breach of fiduciary duty committed by Magnus’ attorney; and (5) the Agreement should have been reformed because defendants knew that Magnus was mistaken about the Agreement’s terms and failed to inform him of the mistake. We affirm the summary judgment in favor of defendants on all of Magnus’ claims.

One of the important issues in this case is whether the purchase agreement, which has a clause stating it constitutes the entire agreement and supersedes all other prior agreements, prevails over a prior letter of intent.

After Magnus filed his lawsuit, Parkside filed a claim against Magnus pursuant to the Agreement’s indemnity clause. The trial court entered summary judgment against Parkside and in favor of Magnus on the indemnity claim. On appeal, Parkside asserts that the trial court erred (1) in denying its motion for summary judgment on its indemnity claim; and (2) in sua sponte entering summary judgment in favor of Magnus on the indemnity claim even though no motion was pending. We affirm.

In 1986, Magnus owned approximately 40 acres of real estate in Arlington Heights. He was living in a private residence on the property, which also included the Magnus Farm Nursing Home Convalescent Center (nursing home). Magnus intended to build a retirement housing complex on the portion of the property known as parcel 4. After he obtained financing through the sale of $29.4 million in tax-exempt revenue bonds issued by the Village of Arlington Heights, Magnus and Hillman formed a partnership.

In the spring of 1986, Hillman began negotiating with Lutheran General’s president, George B. Caldwell, for the sale of the project, including parcel 4, the financing, and all related interests. Magnus later became involved in the negotiations. Hillman and Magnus negotiated separately with Lutheran General and had agreed not to disclose to each other the terms of their separate negotiations. Lutheran General honored that agreement.

In July 1986, Lutheran General and Magnus signed a proposed agreement for the purchase of Magnus’ interest in the project. After months of rocky negotiations, Michael McCarthy, Lutheran General’s vice-president and general counsel, sent a letter to Magnus on October 9, 1986, demanding strict compliance with their proposed agreement. Magnus responded that the proposed agreement was not binding and that he was ending the negotiations.

On that same day, however, Magnus gave his attorney, Arthur H. Evans, written authorization to negotiate the deal on Magnus’ behalf with four conditions. Most of the conditions related to the price and financing of the sale of the project, the land, and the nursing home. The only condition related to the house was that Magnus could live rent-free in the house until October 1, 1987.

Negotiations resumed, and on October 17, 1986, Lutheran General prepared and signed a Letter of Intent, which provided that Lutheran General would purchase Magnus’ interest in the project and that Lutheran General would lease the nursing home to Magnus for 12 months after the closing. The terms and conditions of the Letter of Intent included an option agreement for Magnus to remove the house after the closing as well as a provision that each party’s obligations were subjéct to and contingent on the future execution of the Agreement. If the Agreement was not executed within 30 days, the Letter of Intent would terminate and the parties would be released from any and all obligations.

Magnus signed the Letter of Intent after making handwritten changes to paragraphs four and six. Under paragraph four, Lutheran General would reimburse Magnus for his share of the eligible costs from the bond proceeds. Magnus had already been reimbursed $200,000 for eligible costs, including the bond issuance, zoning, architects, marketing, and attorney fees. He was seeking another $200,000 reimbursement for those same costs.

After receiving Magnus’ modified letter, McCarthy told Evans that Lutheran General would not double reimburse Magnus. Evans stated that he had explained Lutheran General’s position to Magnus and that Magnus understood. Evans assured McCarthy that Magnus’ handwritten changes related to eligible costs that had not yet been submitted to the trustee for reimbursement, not double reimbursement. Based on Evans’ representations, McCarthy initialed Magnus’ modifications and sent the letter to Evans.

Around October 27, 1986, Evans informed McCarthy that he had been mistaken and that Magnus wanted double reimbursement. McCarthy told Evans to explain to Magnus that Lutheran General did not agree to those terms. When Evans later told McCarthy that Mag-nus would not move on that point, McCarthy replied that Lutheran General considered it as another $200,000 in the purchase price that could not be reimbursed. Due to the inability of the parties to reach an agreement regarding paragraph four’s interpretation, McCarthy sent a letter to Magnus on November 3, 1986, terminating the Letter of Intent and any further discussions.

On November 10, 1986, Magnus tendered to Lutheran General a proposed real estate sale contract and rider, which included his option to remove the house or be paid $175,000. McCarthy returned an unsigned copy of the contract and rider to Magnus on November 12, 1986, but signed a confidential copy of the rider and sent it to Lutheran General’s attorneys for review.

Sometime in November 1986 Hillman met with McCarthy and agreed to take $200,000 less than his share of the purchase price so that Magnus could be paid the additional $200,000 eligible costs. Around November 16, 1986, the parties resumed negotiations. According to McCarthy, there were two major changes in the negotiations: the house option was out of the deal and Hillman’s share of the purchase price was reduced by $200,000. When McCarthy told Evans that Magnus could buy the house for $175,000, Evans responded that he did not think Magnus would be interested in buying the house and that he did not want to take the offer back to Magnus because it might incite him. McCarthy told Evans that was his problem, that the house option was out of the deal, and that Lutheran General would agree to the $200,000 eligible costs.

Before the December 30, 1991, closing, McCarthy spoke with Evans, who indicated either that Magnus was still concerned about the house or did not know about the house. McCarthy told Evans that was his problem because they both knew the documents did not reflect that the house was still part of the deal. Evans then told McCarthy and Latham Williams, one of Lutheran General’s attorneys, that the house option was out of the deal.

On December 29, 1986, Magnus signed the Agreement, which did not include a term entitling Magnus to remove the house or receive an additional $175,000. According to Magnus, however, he thought he had retained his option right under the Letter of Intent and did not intend by his execution of the Agreement to waive or cancel that right. Magnus stated that Evans never told him that his option to remove the house was out of the deal. He did not learn of Lutheran General’s position until January or February 1987. When Magnus told McCarthy in March 1987 that he thought the house was in the Agreement, McCarthy responded that he was sorry that Evans did not convey the information to Magnus, but it had been negotiated out of the deal.

After his lease on the nursing home expired on August 13, 1987, Magnus notified Lutheran General that he wanted to exercise his option to remove the house from the property, in accordance with the Letter of Intent. In a November 9, 1987, letter, Lutheran General informed Magnus that he did not have such a right.

Magnus filed a lawsuit asserting claims for declaratory judgment, breach of contract, and specific performance based on defendants’ refusal to permit him to remove the house or to pay him $175,000. When defendants moved to dismiss the lawsuit on the basis that the Agreement superseded the Letter of Intent, the trial court denied the motion. Magnus amended his complaint to add claims, pleaded in the alternative, for a constructive trust over the house or reformation of the Agreement to reflect the parties’ agreement that Magnus had the right to remove the house from the property or be paid $175,000.

Moving for summary judgment on all claims, defendants asserted that the Agreement superseded the Letter of Intent, that Magnus had negotiated away the house option, that the Letter of Intent was not an enforceable, contract, that any alleged mistake by Magnus regarding the Agreement’s terms was unilateral and not fraud, and that the only witness who could possibly contradict the parol evidence supporting the Agreement’s terms as written was Evans, who claimed to have no recollection of any specific facts.

The trial court granted defendants’ motion, ruling that the Agreement was clear on its face and superseded the Letter of Intent. The trial court also found that Magnus’ lawyer knew that the house option had been negotiated out of the deal even if Magnus did not know about it. We agree.

In April 1988 Parkside filed a separate lawsuit seeking indemnification against Magnus for the fees and costs it incurred in defending itself against Magnus’ lawsuit and any resulting damages. After considering Parkside’s summary judgment motion, the trial court ruled that Parkside was not entitled to indemnification for the costs incurred in defending against Magnus’ claims because those were not claims within the meaning of the Agreement’s indemnity provision. We agree.

The main issue on appeal is whether Magnus’ house, which is located on parcel four of the property, was included as one of the assets that Lutheran General purchased or whether Magnus is entitled to an additional $175,000 for the house. Magnus asserts that he has the right to remove the house under the Letter of Intent, which remains a valid and enforceable contract that was not superseded by the Agreement. In the alternative, Magnus asserts that he is entitled to a constructive trust and reformation of the Agreement because his execution of the Agreement was the product of constructive fraud.

Lutheran General responds that Magnus is not entitled to any additional money for the house because the Agreement is enforceable as a complete integration of the Letter of Intent. Lutheran General maintains that the Agreement included the house as part of the purchase; is complete on its face; and expressly supersedes all prior agreements between Magnus and Lutheran General. Even if the court looks beyond the express terms of the written Agreement and looks to parol evidence, Lutheran General argues that the parol evidence establishes that the house option was negotiated out of the deal by the parties’ authorized agents. Moreover, Lutheran General argues, Magnus signed the Agreement of his own free will after being advised by his attorney.

On appeal from the entry of a summary judgment, the reviewing court must determine whether the pleadings, admissions, affidavits and depositions on file establish that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (Gatlin v. Ruder (1990), 137 Ill. 2d 284, 293; Ill. Rev. Stat. 1981, ch. 110, par. 2 — 1005(c).) Summary judgment is appropriate if all the evidence, viewed most favorably toward Magnus, so overwhelmingly favors Lutheran General that any other verdict would not be permitted to stand. (Weber v. Northern Illinois Gas Co. (1973), 10 Ill. App. 3d 625, 635.) Lutheran General’s right must be clear, free from doubt, and determinable solely as a matter of law. Claudy v. City of Sycamore (1988), 170 Ill. App. 3d 990, 998.

Magnus’ first argument is that the Letter of Intent was an enforceable contract, not mere negotiation, that was not superseded by the Agreement. As evidence of the parties’ intention to be bound, Magnus emphasizes the Letter of Intent’s language and Lutheran General’s November letter purporting to terminate the Letter of Intent. Magnus contends that (1) there would be no need for the Letter of Intent’s paragraph 1(e) to void a future writing if the parties never intended for the earlier writing to be binding; (2) that the fact that the parties contemplated signing formal documents does not mean that there was no binding agreement between them; and (3) the condition precedent that the Agreement must be executed within 30 days went solely to the obligation of the parties to perform, not to prevent the formation of a valid contract.

Paragraph 1 of the Letter of Intent states as follows:

“The obligations of LGHCS hereunder are specifically conditioned upon *** LGHCS, (Lutheran General) the Greenfields Partnership and The Magnus Partnership and Alexander B. Magnus, Jr. entering into the Purchase Agreement within thirty (30) days hereof containing customary and appropriate representations and warranties related to the transactions contemplated hereby. Each party’s obligations hereunder are subject to and contingent upon the execution of the Purchase Agreement. If this Purchase Agreement is not executed within said thirty (30) day time period, this Letter of Intent shall terminate and the parties hereto shall be released from any and all obligations hereunder ***.”

Magnus misplaces his reliance on Quake Construction, Inc. v. American Airlines, Inc. (1990), 141 Ill. 2d 281, and Inland Real Estate Corp. v. Christoph (1981), 107 Ill. App. 3d 183. Both cases are inapplicable because they did not include a condition precedent or a “subject to” clause. In addition, Quake Construction, Inc. is distinguishable because the Illinois Supreme Court ruled that parol evidence should have been considered to determine the parties’ intent since the explicit language of the Letter of Intent’s cancellation clause and anticipation of a further agreement caused an ambiguity regarding the letter’s enforceability. (Quake Construction, Inc., 141 Ill. 2d at 294.) Based on that intent, the court explained, the trier of fact was to determine whether the Letter of Intent was a binding contract. Quake Construction, Inc., 141 Ill. 2d at 309.

This case is distinguishable from Quake Construction, Inc. because the trial court considered parol evidence before entering the summary judgment. Furthermore, the Letter of Intent was not ambiguous. It clearly made the Agreement’s execution within 30 days a condition precedent to any binding contract.

Whether a writing that contains all the essential terms of a contract but contemplates the later execution of a formal document is itself a contract depends on the intent of the parties. (Inland Real Estate Corp., 107 Ill. App. 3d at 185.) To determine intent, the entire contract must be viewed as a whole. (Braeside Realty Trust v. Cimino (1985), 133 Ill. App. 3d 1009, 1011.) Language is the most reliable indicator of the parties’ intent. Braeside Realty Trust, 133 Ill. App. 3d at 1011.

If the letter’s language is ambiguous, parol evidence should be used to determine whether the parties intended to be bound. (Inland Real Estate Corp., 107 Ill. App. 3d at 185.) If there is no ambisguity, however, the parties’ intent must be determined only from the agreement’s language. Harris v. American General Finance Corp. (1977), 54 Ill. App. 3d 835, 839.

There is a difference between the execution of a formal agreement being a condition precedent to a binding contract and a mere reference to a future contract. If the parties construe the execution of a formal agreement as a condition precedent, no contract arises unless and until the formal agreement is executed, even if all the terms of the contract have been agreed on. (Quake Construction, Inc., 141 Ill. 2d at 287-88; Chicago Investment Corp. v. Dolins (1985), 107 Ill. 2d 120, 126-27.) A mere reference to a future contract, however, will not necessarily negate the existence of a present contract (Quake Construction, Inc., 141 Ill. 2d at 288), especially where the formal contract is to be substantially based on the earlier agreement’s terms. Harris, 54 Ill. App. 3d at 839.

Illinois courts have repeatedly held that language similar to the Letter of Intent’s paragraph 1(e) was unambiguous, indicating as a matter of law that no contract came into existence until the subsequent document was executed. In Interway, Inc. v. Alagna (1980), 85 Ill. App. 3d 1094, 1101, there was no contract due to a clause stating that the purchase was subject to a definitive purchase and sale contract to be executed by the parties. Although the letter of intent contained exhaustive provisions regarding the purchase price, brokerage fees, bonuses, warranties, insurance, and noncompetition clauses, it also included the clause, “Our purchase is subject to a definitive Purchase and Sale Contract to be executed by the parties.” (Interway, Inc., 85 Ill. App. 3d at 1096.) The court held that the term “subject to” was unambiguous as a matter of law and meant that a contract had not yet been formed despite the statement, “This will confirm our agreement.” Interway, Inc., 85 Ill. App. 3d at 1107.

Similarly, there was no contract in Terracom Development Group, Inc. v. Coleman Cable & Wire Co. (1977), 50 Ill. App. 3d 739, 743-44, because its letter of intent was expressly conditioned on the parties entering into a mutually satisfactory definitive written agreement. The court found that there was no contractual relationship between the parties unless and until the definitive agreement was executed in writing. Terracom Development Group, 50 Ill. App. 3d at 744. See also Chicago Investment Corp., 107 Ill. 2d 120. Ebert v. Dr. Scholl’s Foot Comfort Shops, Inc. (1985), 137 Ill. App. 3d 550; S.N. Nielsen Co. v. National Heat & Power Co. (1975), 32 Ill. App. 3d 941; Brunette v. Vulcan Materials Co. (1970), 119 Ill. App. 2d 390.

The evidence in this case shows that the parties intended that execution of the formal Agreement within 30 days was a condition precedent to the formation of a contract. The Letter of Intent also stated that if the Agreement were not executed within 30 days, the Letter of Intent was void.

Magnus’ argument that the Agreement was executed within 30 days is meritless. Magnus stated that McCarthy executed the Agreement by signing a confidential copy of Magnus’ contract of sale and rider on November 12, 1986, and sending it to his own attorneys. What McCarthy gave his attorneys is irrelevant. He never signed or delivered a signed contract to Magnus. In fact, he sent the documents back to Magnus unsigned.

Since the Agreement was not executed within 30 days, the Letter of Intent was not a binding contract. Even if it had been a binding contract, however, and was still effective at the time of closing, the Agreement superseded the Letter of Intent.

It is well settled under the doctrine of merger and the parol evidence rule that a written agreement that is complete on its face supersedes all prior agreements on the same subject matter and bars the introduction of evidence concerning any prior term or agreement on that subject matter (Chicago White Metal Casting, Inc. v. Treiber (1987), 162 Ill. App. 3d 562; Kraft v. No. 2 Galesburg Crown Finance Corp. (1981), 95 Ill. App. 3d 1044, 1050-51), particularly when the contract contains an unambiguous merger or integration clause. Vitkauskas v. State Farm Mutual Automobile Insurance Co. (1987), 157 Ill. App. 3d 317.

Section 24 of the Agreement states:

“21.0 Entire Agreement. This Agreement, including the Schedules annexed hereto, constitute the entire agreement and supersedes all other prior agreements and understandings, both written and oral, among the parties or any of them, with respect to the subject matter thereof.”

The language of this integration clause is unambiguous. Since the Agreement was intended as the final expression of the parties’ agreement, is extensive and specific, and is complete on its face, it supersedes the Letter of Intent, which cannot be used to contradict the Agreement. The Agreement was the product of lengthy negotiations between sophisticated parties represented by attorneys. Moreover, Magnus, who was familiar with this type of provision from his 20 to 30 years of business experience, stated that he reviewed parts of the Agreement with his attorney prior to signing it.

The determination that summary judgment is appropriate will not be reversed unless the trial court abused its discretion such that Mag-nus’ right to fundamental justice was violated. (Breeze v. Payne (1989), 181 Ill. App. 3d 720, 727.) That is not the case here. The trial court did not abuse its discretion by entering summary judgment in favor of Lutheran General because the Agreement superseded the Letter of Intent.

In the alternative, Magnus asserts that the trial court erred by entering summary judgment for defendants on Magnus’ claims for a constructive trust and reformation based on constructive fraud. There is no merit to that argument.

A constructive trust can be established where there exists a fiduciary relationship and a subsequent abuse of confidence arising from that relationship. (Village of Wheeling v. Stavros (1980), 89 Ill. App. 3d 450, 453.) It is an appropriate remedy where a third party has been unjustly enriched due to knowingly acquiring property as the result of a fiduciary’s breach of duty. (A.T. Kearney, Inc. v. Inca International, Inc. (1985), 132 Ill. App. 3d 655, 661.) To establish constructive fraud, however, clear and convincing evidence is needed. In re Gerard (1989), 132 Ill. 2d 507, 527.

Contract reformation is proper where one party is mistaken about an instrument’s terms and where the other party knows of the mistake but fails to inform him or conceals the truth. (Ballard v. Granby (1980), 90 Ill. App. 3d 13, 15, 412 N.E.2d 1067.) A plaintiff will be entitled to reformation of a written contract if he proves by clear and convincing evidence that there was a meeting of the minds resulting in an actual agreement between the parties, but at the time the agreement was reduced to writing and executed, some agreed upon provision was omitted or one not agreed upon was inserted either through a mutual mistake or a mistake by one party and fraud by another. Great American Federal Savings & Loan Association v. Grivas (1985), 137 Ill. App. 3d 267, 274, 484 N.E.2d 429.

The evidence in this case establishes that the parties, through their authorized agents, negotiated out a $175,000 house option in exchange for a $200,000 double reimbursement. There is no evidence that defendants knew that Evans did not tell Magnus about the house option. Although defendants were aware that Evans was having difficulties with Magnus, McCarthy made it clear to Evans that his client was Evans’ problem and that the house option was out of the deal. Although Magnus argues that he was mistaken as to the terms of the written Agreement, he is bound thereby because one is under a duty to learn or know the contents of a written contract before he signs it. (Leon v. Max E. Miller & Son, Inc. (1974), 23 Ill. App. 3d 694, 320 N.E.2d 256.) Since there is no basis to establish a constructive trust and no evidence of constructive fraud, we affirm the summary judgment in favor of defendants.

Finally, Parkside asserts that the trial court erred in denying its motion for summary judgment on its indemnification claim against Magnus and that the trial court erred in sua sponte entering summary judgment in favor of Magnus when no motion was pending. We disagree.

Parkside’s claim for indemnification of costs incurred to defend itself against Magnus’ lawsuit is based on the Agreement’s indemnity clause, which provides:

“10.2 Indemnification by Seller. For a period of one (1) year from the termination of the Lease Seller agrees to indemnify and hold harmless Buyer from and against any and all claims, actions, causes of action, losses, damages, costs and expenses (including reasonable attorneys’ fees) of any kind whatsoever arising out of or incident to or in connection with any and all of the following:
10.2.1 Misrepresentation; Breach. Any material misrepresentation, breach of any warranty or representation or nonful-fillment of any agreement, covenant or condition on the part of Seller contained in this Agreement or in any certificate, schedule, list, exhibit or other writing furnished to Buyer by Seller pursuant to or in connection with this Agreement and the transactions contemplated hereby.
10.22. Asserted Claims. Any claim of any type whatsoever asserted against Buyer by any person, corporation, state or federal government or other entity of any type arising out of or in connection with (a) any act, conduct, failure to act or omission of Seller which occurred or occurs at any time and which is not disclosed to Buyer as part of this Agreement.”

An indemnity agreement is an agreement whereby the indemnitor agrees to protect the indemnitee from claims asserted against the in-demnitee by third persons. See Lewy, The Use of Exculpatory Clauses Affecting Real Property, Leases & Hold Harmless Agreements & the Insurance Implications Involved (1964), 46 Chi. Bar Rec. 131.

This indemnity clause does not include the costs Parkside incurred in defending itself against Magnus’ claims. Therefore, the trial court properly denied Parkside’s motion for summary judgment. By denying that motion, the trial court in effect ruled in favor of Magnus on Parkside’s motion even though Magnus did not have a pending summary judgment motion.

Based on the foregoing, the summary judgment entered in favor of Lutheran General on Magnus’ claims is affirmed, the denial of Parkside’s summary judgment motion on its indemnity claim is affirmed, and the granting of summary judgment in favor of Magnus on the indemnity claim is affirmed.

Affirmed.

RIZZI and TULLY, JJ., concur.


author: JUSTICE GORMAN

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. ROBERT M. ALLENSWORTH, Defendant-Appellant.
    Third District
    No. 3—91—0435
    Opinion filed May 14, 1992.
    Modified on denial of rehearing November 6, 1992.

      Peter A. Carusona, of State Appellate Defender’s Office, of Ottawa, for appellant.
    Raymond Kimbell III, State’s Attorney, of Galesburg (John X. Breslin and Jay P. Hoffmann, both of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
   JUSTICE GORMAN

delivered the opinion of the court:

A jury found the defendant, Robert M. Allensworth, guilty of two counts of aggravated criminal sexual abuse (Ill. Rev. Stat. 1989, ch. 38, par. 12 — 16(d)). The trial court sentenced him to concurrent three-year prison terms. He appeals.

Only those facts necessary to decide the issues presented will be set forth. Prior to trial, although the defendant had originally indicated that he wished to represent himself, the court appointed the public defender. At a later hearing, the public defender informed the court that he and the defendant had decided to wait until examining the discovery materials before determining whether he would act in his usual role or as standby counsel. After the trial court admonished the defendant concerning the dangers of representing himself, the hearing concluded with the defendant agreeing that he had an attorney representing him at that point.

The State later filed a motion requesting that the defendant be examined to determine whether he was fit to stand trial. The court granted the motion. Thereafter, the defendant filed a pro se motion to dismiss the charges. In the motion, he made statements about the incident that formed the basis of the charges against him. At the hearing on the pro se motion, the public defender appeared as standby counsel for the defendant and indicated that the motion had been filed against his advice. The court stated that the defendant should not have made certain allegations in the motion and that this was proof that he needed assistance. The court then strongly advised the defendant that it would be in his best interests to accept the assistance of counsel and reserved ruling on the pro se motion until the question of the defendant’s fitness was resolved.

At the fitness hearing, the assistant public defender appeared and the court noted that the defendant was trying the matter pro se with the assistance of standby counsel. Standby counsel stated that the defendant was technically still representing himself, but counsel had reviewed the psychiatric report with the defendant and they were both prepared to stipulate to the information in the report. The defendant stated that he agreed with this. Standby counsel stated that he had explained to the defendant that by stipulating they were admitting to the psychiatrist’s qualifications as an expert and were admitting that if the psychiatrist were called to testify, he would testify as indicated in the report. The trial court found the defendant fit to stand trial and then had the prosecutor, the defendant, and standby counsel sign the resulting order.

The evidence presented at trial established that a videotape had been made in January 1990, which depicted the hands of the two minor victims, J.G. and D.C., touching the defendant’s exposed penis. At the time the tape was made, J.G. was 16 years old and D.C. was 15 years old. Another participant was 18 years old at the time. The evidence also established that the defendant was born in 1937. At the close of evidence, the trial court dismissed the three counts of child pornography, finding insufficient proof that the defendant was responsible for the videotaping. The defendant argued that there was a reasonable doubt that he had had any sexual contact with a minor, and that he was forced to participate. The jury found him guilty of two counts of aggravated criminal sexual abuse.

At the sentencing hearing, J.G.’s father testified that the entire family needed counseling as a result of the offense. He further stated that he had consulted with the Spoon River Medical Center, which could provide family counseling services at $60 per hour for 12 monthly sessions. The trial court ordered the defendant to pay the clerk $720, which was to be used for reimbursement of the counseling.

On appeal, the defendant first argues that the indictment which charged him with two counts of aggravated criminal sexual abuse was insufficient because it did not state two necessary elements of the crime. Specifically, he complains that neither count stated that the sexual conduct performed was “for the purpose of sexual gratification or arousal of the victim or the accused” or that the defendant was “at least five years older than the victims.”

The indictment stated in pertinent part:

“[Count I] *** ROBERT M. ALLENSWORTH committed the offense of AGGRAVATED CRIMINAL SEXUAL ABUSE *** in that said defendant knowingly committed an act of sexual conduct with [J.G.], who was at least thirteen (13) years of age but under (17) years of age, in that he allowed [J.G.] to fondle his *** penis, in violation of Illinois Revised Statutes, Chapter 38, Paragraph 12 — 16(d).
[Count IV) *** ROBERT M. ALLENSWORTH committed the offense of AGGRAVATED CRIMINAL SEXUAL ABUSE *** in that said defendant knowingly committed an act of sexual conduct with [D.C.], who was at least thirteen (13) years of age but under sixteen (16) years of age, in that he allowed [D.C.] to fondle his *** penis, in violation of Illinois Revised Statutes, Chapter 38, Paragraph 12 — 16(d).”

We will first address the defendant’s contention with regard to the “purpose of sexual gratification” provision. The definition of “sexual conduct” appears in section 12 — 12(e) of the Criminal Code of 1961 (Ill. Rev. Stat. 1989, ch. 38, par. 12-12(e)) as:

“ ‘Sexual conduct’ means any intentional or knowing touching or fondling by the victim or the accused, either directly or through clothing, of the sex organs, anus or breast of the victim or the accused, or any other part of the body of a child under 13 years of age, for the purpose of sexual gratification or arousal of the victim or the accused.”

The instant defendant relies upon the decision in People v. Edwards (1990), 195 Ill. App. 3d 454, 552 N.E.2d 358, wherein the defendant was charged with two counts of aggravated criminal sexual abuse in an indictment which was returned in language similar to the one brought in this case. The charge in Edwards also failed to state that the sexual conduct was for the purpose of sexual gratification or arousal of the victim or the accused. The Edwards court reversed the defendant’s convictions on those counts, holding that the purpose of the sexual gratification provision was essential.

We do not agree with Edwards. Instead, we find that People v. Lewis (1986), 147 Ill. App. 3d 249, 498 N.E.2d 1169, and People v. Balle (1992), 234 Ill. App. 3d 804, appeal denied (1992), 145 Ill. 2d 636, correctly state the law. In both of those cases, the defendant had been charged with aggravated criminal sexual abuse pursuant to section 12 — 16(c)(1) of the Criminal Code (Ill. Rev. Stat. 1989, ch. 38, par. 12 — 16(c)(1)). However, as in the instant case, the indictments failed to specifically allege that the sexual conduct was for the purpose of sexual gratification or arousal of the victim or the accused. Both courts held that it is sufficient to allege an offense in the language of the statute if the words so far particularize the offense that by their use alone an accused is informed with reasonable certainty of the precise offense he is charged with. Both courts then determined that the words “sexual conduct,” standing alone, are sufficiently specific to inform a defendant with reasonable certainty of the offense he is accused of committing. Accordingly, we hold that the instant defendant has failed to show that he was not apprised with reasonable certainty of the charges brought against him.

We now turn to the defendant’s contention that the instant indictment was also defective for failing to allege that he was more than five years older than the victims involved. We find that the defendant was not prejudiced by this failure nor does he claim that he was. At trial, it was established that the defendant had told a police officer that he was born in 1937. The father of one of the victims testified that the victim was bom in 1973. The mother of the other victim testified that he was bom in 1974. Thus, more than the required five-year age difference was established and the defendant was not prejudiced by the omission.

The defendant next contends that the trial judge committed reversible error when he allowed the defendant to represent himself, with standby counsel, at his own fitness hearing. He cites this court’s decision in People v. Rath (1984), 121 Ill. App. 3d 548, 459 N.E.2d 1134, in support of his proposition that a trial judge should always require a defendant to be represented by counsel at a fitness hearing. We disagree with the defendant’s interpretation of our holding in Rath.

In Rath, the defendant claimed that he was the son of Ethel Barrymore and the Sultan of Turkey, that he was a diplomat with immunity, that he was a doctor, and that he was a lawyer. Additionally, the trial judge believéd that there was a bona fide doubt as to the defendant’s • sanity. Although standby counsel was appointed when the defendant insisted on proceeding pro se, the defendant refused to let the public defender help him in any way.

In assessing the waiver and nonuse of the defense attorney in Rath, we stated that it was necessary to judge that particular defendant’s ability to waive counsel. We then held that once the trial judge had found a bona fide doubt as to the defendant’s mental competency, it was necessary for the defendant to be represented by competent counsel until the issue of fitness was resolved, and that such counsel must act as an active adversary rather than a passive bystander to the proceedings.

We further note that where a defendant proceeds to trial with the “technical assistance” of an attorney, he has not waived counsel. People v. Smith (1985), 133 Ill. App. 3d 574, 479 N.E.2d 24.

In applying the above-noted principles to the instant case, we find that the defendant did not actually waive counsel and that he received the effective assistance of counsel during his fitness hearing. The record does not establish that the trial judge ever expressed any concern about the defendant’s mental competency. Additionally, the defendant never indicated that he would not accept any assistance from his standby counsel. To the contrary, it is clear from the record of the fitness hearing that the defendant had consulted with his standby counsel concerning the proceeding. Furthermore, we find that counsel was not a passive bystander at the proceeding. Based on the record, we conclude that the defendant was adequately represented by counsel at his fitness hearing. Therefore, the trial judge did not err in allowing the defendant to proceed with the assistance of standby counsel.

Finally, the defendant contends that the trial court’s order of restitution was improper because family members of the victim were not victims within the meaning of section 5 — 5—6(b) of the Unified Code of Corrections (Ill. Rev. Stat. 1989, ch. 38, par. 1005 — 5—6(b)).

We find that People v. Strebin (1991), 209 Ill. App. 3d 1078, 568 N.E.2d 420, is dispositive of this issue. In Strebin, the defendant pled guilty to the aggravated battery of a child in return for the dismissal of an aggravated criminal sexual abuse charge which was also pending against him. The factual basis established that the defendant had disciplined two young children he was babysitting by squeezing their penises and spanking one of them in the groin. The Strebin court held that it was proper under those facts for the trial judge to order restitution to pay for the cost of any counseling of the victims and their family as might be required. Based on Strebin, we hold that it was proper for the instant trial court to order the defendant to pay restitution for the cost of counseling J.G. and his family.

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

Affirmed.

McCUSKEY and HAASE, JJ., concur.


text:
    MICHAEL BUCCIERI, Plaintiff-Appellant, v. ILLINOIS CENTRAL GULF RAILROAD, Defendant-Appellee.
    First District (1st Division)
    No. 1—90—2597
    Opinion filed August 31, 1992.
    Rehearing denied October 21, 1992.

      Terrence K. Hegarty & Associates, Ltd., of Chicago (Terrence K. Hegarty and James S. Smith, of counsel), for appellant.
    Baker & McKenzie, of Chicago (Francis D. Morrissey, Thomas F. Tobin, Gary W. Fresen, Michael A. Pollard, Barrie L. Brejcha, and Charles W. Webster, of counsel), for appellee.
   PRESIDING JUSTICE BUCKLEY

delivered the opinion of the court:

Plaintiff Michael Buccieri filed this personal injury action against Illinois Central Gulf Railroad (IC) pursuant to the Federal Employers’ Liability Act (FELA) (45 U.S.C. §§51 through 60 (1988)). Plaintiff alleged that he was a railroad “employee” of IC at the time of his injury and, accordingly, came within the protections of FELA. Plaintiff and IC filed cross-motions for summary judgment on the issue of plaintiff’s “employee” status, and the circuit court of Cook County granted IC’s motion. Plaintiff brings this appeal asserting that summary judgment was erroneously granted as a genuine issue of material fact exists as to whether plaintiff was an IC employee at the time of his injury for FELA purposes. We reverse and remand.

IC operates an Intermodal Exchange (IMX) yard at 3000 South Damen Avenue in Chicago. The word “intermodal” refers to a change from one “mode” of transportation to another; in this case, a change from motor carrier transit to rail transportation. At the IMX yard, “piggyback” trailers are loaded and unloaded from flatbed railroad cars.

From January 1, 1977, through May 1986, TLI, Inc. (TLI), contracted with IC to perform the loading and unloading operations at the IMX yard. TLI is a labor-leasing firm that employs approximately 200 Teamster Union laborers in the Chicago area. Under the TLI-IC contract, TLI was required to provide IC with trained and qualified manpower to perform the loading, unloading and delivery operations relating to the piggyback trailers. In exchange for this manpower, IC paid TLI a management fee plus an amount equal to what TLI compensated its employees in wages and benefits.

Pursuant to the IC-TLI agreement, the parties agreed that all TLI employees remained exclusively TLI employees. Some of the other, more relevant contract provisions include: (1) IC’s right to have TLI remove any employee from IC property for any reason within 30 days of that employee’s employment and, thereafter, for just cause only; (2) TLI’s responsibility for holding safety and operational meetings and disciplining its employees; (3) IC’s responsibility to report all accidents to TLI for disciplinary purposes; and (4) the respective responsibility of TLI and IC regarding injuries to TLI employees and third persons.

During the performance of the contract, as related in the deposition testimony of various IC and TLI employees, the number of TLI employees assigned to work at the IMX yard varied either daily or weekly depending on the volume of IC’s business. IC was responsible for advising TLI of its expected rail volume; TLI, in turn, supplied the correct number of workers. In 1985, the year of plaintiff’s injury, there were between 15 and 17 yard workers at the IMX yard.

TLI supplied yard workers for three different job positions at the IMX yard. First, a “tie down man” worked directly on railroad flat cars where he opened and closed hitches holding the piggyback trailers to the flatcar. IC supplied the tie down man’s principal tool: a tie down bar. Second, a “gantry operator” used an overhead crane or gantry to lift the piggyback trailers onto and off the railroad flatcars. Third, a “spotter” transported the piggyback trailers from the railroad flatcars to various areas in the IMX yard. The spotter used a “spotting horse,” which is a truck that lifts the front end of the trailer off the ground. IC supplied to TLI employees all gantry and spotter trucks.

The personnel who supervised daily activities at the IMX yard were IC’s direct employees and, in descending hierarchy, were the terminal manager, the dispatcher and yard supervisor. The yard supervisor was in charge of the yard and had ultimate responsibility for numerous activities, including: the loading and unloading of trains; the inspection of incoming and outgoing trains; the assurance that the correct trailers were on the train; the inspection of the work performed by the spotter, gantry operator and tie down man; and to assure that corrections were made of mistakes which TLI employees made such as the loading of incorrect cargo.

TLI did not have supervisors present at the IMX yard on a daily basis. A TLI supervisor would only visit the yard twice a week for the purposes of picking up and delivering payroll to TLI employees. The checks TLI employees cashed were imprinted with the TLI logo. No TLI supervisor would communicate work assignments to TLI employees or inspect its employees’ daily work. TLI relied on IC to report any accident or safety violations regarding TLI employees.

On an average work day, TLI’s yard workers reported to the IMX yard and not to TLI’s nearest corporate office in Hillside, Illinois. Upon their arrival, yard workers punched a time clock located outside IC’s dispatcher’s office. The railroad’s dispatcher would hand the time cards to the yard workers as they arrived and would receive them after they were punched. The yard workers then proceeded to the railroad’s locker room, where they would change into their work clothes. The workers would wait in the locker until the yard supervisor arrived. The yard supervisor then delivered to the spotter a “track sheet,” which contained information regarding the railroad car numbers, the trailers that were to be loaded, the direction of the car, and the railroad track where the railroad car was located. Having their assignments, the yard workers would then proceed to the yard where they would undertake the loading or unloading process.

As the volume of rail work varied with each day, a three-member TLI crew was subjected to various amounts of daily work. If rail volume was high and a time deadline for a train departure existed, a TLI crew could work overtime. The length of lunches and breaks, which were normally 1 hour and 10 to 15 minutes, respectively, were subject to the demands of a given day’s rail volume.

Plaintiff started working at IC’s railroad yard in 1970 and continued working there until his injury on March 13, 1985. When plaintiff commenced employment, he worked for Universal Leaseway Systems of Hlinois. In 1975, IC terminated Universal Leaseway and entered the aforementioned contract with TLI. Despite the change in companies, plaintiff’s job duties, benefits, compensation, seniority, etc., did not change in any way.

On the day of plaintiff’s injury, plaintiff and two other TLI crewmen, Joe Beringer and Robert Stokes, were working the midnight to 9 a.m. shift. Plaintiff was working as the gantry operator, with Stokes as the tie down man and Beringer the spotter. IC’s yard supervisor was Richard Fiala and, because it was the midnight shift, Fiala was the only IC supervisor present.

At 3 a.m., the men took their break. Fiala gave plaintiff and Stokes a ride in his truck from their jobsite to the yard drivers’ room, approximately one mile away. After approximately 30 minutes, Beringer, Stokes and plaintiff returned outside to look for Fiala to obtain a ride to the jobsite. When Fiala did not appear, plaintiff and Stokes flagged down Beringer, who was driving an IC spotter truck, and requested that Fiala be radioed for a return ride. When Fiala did not respond, plaintiff and Stokes accepted Beringer’s request that they ride to the jobsite on the back of his spotter truck. Stokes hung onto a ladder near the driver’s side door and plaintiff climbed up and stood on the steel grate facing forward behind the tractor. Plaintiff had one foot on the catwalk, the other on the spotter gasoline tank, and held with both hands onto a vertical bar beside the back window.

Beringer started driving toward the railroad tracks, and the spotter truck reached a speed of about 10 miles per hour after 100 feet. After travelling about 100 to 150 feet, the truck accelerated and the transmission jerked. Stokes grabbed the ladder more tightly, but plaintiff fell off the back of the truck, landed on his head, and suffered significant injuries. Plaintiff is unable to return to work.

Following his injury, plaintiff filed suit against IC pursuant to FELA alleging that he was an IC employee for FELA purposes at the time of his injury and that his injuries resulted, in whole or in part, from the negligence of IC’s officers, agents or employees. Following the filing of cross-motions for summary judgment on the employee issue, the circuit court entered an order granting IC’s motion for summary judgment. This appeal followed.

The sole issue on appeal is whether summary judgment was properly granted to IC on the ground that plaintiff was not an “employee” of IC for FELA purposes at the time of his injury.

Summary judgment shall be entered when “the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 1005(c).) While the use of the summary judgment procedure is to be encouraged as an aid in the expeditious disposition of a lawsuit, it is a drastic means of disposing of litigation and therefore should be allowed only when the right of the moving party is clear and free from doubt. (Purtill v. Hess (1986), 111 Ill. 2d 229, 240, 489 N.E.2d 867, 871.) In determining the existence of a genuine issue of material fact, courts must consider the pleadings, depositions, admissions, exhibits, and affidavits on file in the case and must construe them strictly against the movant and liberally in favor of the opponent. (Purtill, 111 Ill. 2d at 240, 489 N.E.2d at 871.) Reviewing courts apply a de novo standard of review when determining the propriety of summary judgment. Shull v. Harristown Township (1992), 223 Ill. App. 3d 819, 585 N.E.2d 1164; Briggs Manufacturing Co. v. Industrial Comm’n (1989), 212 Ill. App. 3d 318, 570 N.E.2d 1152; Demos v. National Bank (1991), 209 Ill. App. 3d 655, 567 N.E.2d 1083; General Motors Corp. v. Douglass (1990), 206 Ill. App. 3d 881, 565 N.E.2d 93.

The dispute in this case requires this court to construe section 51 of FELA, which provides in relevant part:

“Every common carrier by railroad while engaged in commerce *** shall be liable in damages to any person suffering injury while he is employed by such carrier in such commerce *** for such injury or death resulting in whole or in part from the negligence of any of the officers, agents, or employees of such carrier, or by reason of any defect or insufficiency, due to its negligence, in its cars, engines, appliances, machinery, track, roadbed, works, boats, wharves, or other equipment.” (Emphasis added.) 45 U.S.C. §51 (1988).

In Kelley v. Southern Pacific Co. (1974), 419 U.S. 318, 42 L. Ed. 2d 498, 95 S. Ct. 472, the Court applied and interpreted section 51 under somewhat similar circumstances to the case at bar. As Kelley’s facts and discussion of law bear heavily on this case, we discuss it at length.

In Kelley, petitioner Eugene Kelley was seriously injured when he fell from the top of a tri-level railroad car where he had been working. Although Kelley acknowledged that he was technically an employee of a trucking company rather than of Southern Pacific Company, the respondent railroad, Kelley sought recovery under FELA on the theory that the railroad sufficiently controlled his work thereby making him a railroad employee for FELA purposes. Kelley, 419 U.S. at 319-20, 42 L. Ed. 2d at 503, 95 S. Ct. at 474.

The evidence in Kelley showed that, at the time of his accident, Kelley had worked for Pacific Motor Trucking Company (PMT) for about eight years. PMT was engaged in various trucking enterprises in conjunction with the railroad operations of its parent company, Southern Pacific Company. As part of its contractual obligations with the railroad, PMT would unload new automobiles from Southern Pacific’s tri-level auto-carrying flatcars when they arrived in the yard. Kelley’s job was to unhook automobiles from the railroad cars and drive them into the yard for further transfer to PMT auto trailers and ultimate delivery to car dealers. Although there were Southern Pacific employees in the area who would occasionally consult with PMT employees about the unloading process, PMT supervisors controlled and directed the day-to-day operations. Kelley was injured when he fell while unhooking automobiles from the top level of a tri-level flatcar. Kelley filed suit under FELA, and the district court ruled in Kelley’s favor on the employee issue. The ninth circuit reversed, and the Supreme Court granted certiorari. Kelley, 419 U.S. at 320-22, 42 L. Ed. 2d at 503-05, 95 S. Ct. at 474-75.

In its analysis, the Court emphasized that proving the “while employed” clause of FELA required proof of a master-servant relationship. The Court reviewed a few of its earlier FELA cases and noted that the words “employee” and “employed” in the statute were used in their conventional sense, with the master-servant relationship determined by reference to common-law principles. Kelley, 419 U.S. at 323-24, 42 L. Ed. 2d at 505, 95 S. Ct. at 476.

The Court endorsed the approach of its prior decisions which had relied on sections of the Restatement (Second) of Agency dealing with the borrowed-servant doctrine and master-servant relationship as guidelines for analyzing the employee issue and formulating proper jury instructions thereon. (Kelley, 419 U.S. at 323-24, 42 L. Ed. 2d at 505-06, 95 S. Ct. at 476.) The Court referred specifically to sections 220(1) and (2) of the Restatement, with the former defining servant as “ ‘a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other’s control or right to control’ ” (Kelley, 419 U.S. at 323-24, 42 L. Ed. 2d at 506, 95 S. Ct. at 476, quoting Restatement (Second) of Agency §220(1) (1958)), and the latter listing 10 factors which are to be considered in determining whether servant status exists. While the Court recognized that section 220 is directed primarily towards determining whether a particular bilateral arrangement could properly be characterized as a master-servant or independent contractor relationship, the section was “instructive in analyzing the three-party relationship between two employers and a worker.” Kelley, 419 U.S. at 324, 42 L. Ed. 2d at 506, 65 S. Ct. at 476.

The Court in Kelley further stated that, under common-law principles, three basic methods exist by which a plaintiff can establish his “employee” status with a rail carrier for FELA purposes even while nominally employed by another. First, the employee could be serving as a borrowed servant of the railroad at the time of his injury. (See Restatement (Second) of Agency §227 (1958).) Second, he could be deemed to be acting for two masters simultaneously. (See Restatement (Second) of Agency §226 (1958).) Third, he could be a subservant of a company that was in turn a servant of the railroad. See Restatement (Second) of Agency §5(2) (1958); Kelley, 419 U.S. at 324, 42 L. Ed. 2d at 506, 65 S. Ct. at 476.

Applying the law to the facts before it, the Court believed that nothing in the district court’s findings suggested that Kelley was sufficiently under the respondent railroad’s control to render him a borrowed or dual servant. Even under the subservant theory, the district court’s findings did not establish the master-servant relationship between PMT and the railroad necessary to render Kelley a subservant of the railroad. (Kelley, 419 U.S. at 325, 42 L. Ed. 2d at 506, 65 S. Ct. at 476-77.) This relationship exists only where the railroad controls or has the right to control the physical conduct of the second company, and it is distinguishable from an agency relationship, upon which the district court’s analysis incorrectly focused, as an agency relationship is broader than the master-servant relationship required under FELA. Kelley, 419 U.S. at 325-26, 42 L. Ed. 2d at 506-07, 65 S. Ct. at 476-77.

The Court next rejected the dissenter’s argument that, even though the district court had applied the wrong legal standard, af-firmance should occur because the evidence otherwise established a master-servant relationship. For example, the Court was not persuaded by the evidence that Kelley and his crew worked most of the time on the railroad’s premises and that railroad employees were responsible for checking safety conditions on the tri-level cars. These facts reflected nothing more than the railroad and PMT being engaged in closely related activities which needed to be coordinated. Naturally, observed the Court, PMT and railroad employees had substantial contact with one another. Kelley, 419 U.S. at 326-27, 42 L. Ed. 2d at 507, 95 S. Ct. at 477.

Also, while the railroad’s supervisory personnel were occasionally in the unloading area and occasionally advised or consulted with PMT employees and supervisors, no finding was made that “Southern Pacific employees played a significant supervisory role in the unloading operation or, more particularly, that petitioner was being supervised by Southern Pacific employees at the time of his injury. Nor did the [district] court find that Southern Pacific employees had any general right to control the activities of petitioner and the other PMT workers.” (Emphasis added.) (Kelley, 419 U.S. at 327, 42 L. Ed. 2d at 507-08, 95 S. Ct. at 477-78.) Finally, although Kelley directed the Court to other contacts between himself and various railroad employees, the Court believed that these contacts were simply not supervisory in nature. (Kelley, 419 U.S. at 327 nn.8 & 9, 42 L. Ed. 2d at 507-08 nn.8 & 9, 65 S. Ct. at 477-78 nn.8 & 9.) The Court later emphasized:

“In this case, as in Anderson, the evidence of contacts between Southern Pacific employees and PMT employees may indicate, not direction or control, but rather the passing of information and the accommodation that is obviously required in a large and necessarily coordinated operation. [Citation.] The informal contacts between the two groups must assume a supervisory character before the PMT employees can be deemed pro hac vice employees of the railroad.” (Emphasis added.) Kelley, 419 U.S. at 330, 42 L. Ed. 2d at 509, 65 S. Ct. at 479.

We believe Kelley’s intimate discussion of the facts and law bears significantly on the merits of this case. With respect to the law, Kelley requires this court to apply traditional common-law principles in determining whether plaintiff in this case constituted an IC employee for FELA purposes at the time of his injury. Section 220 of the Restatement (Second) of Agency, which outlines a number of nonexclusive factors, is particularly instructive. Also, for FELA purposes, there are three methods by which a plaintiff can establish his employee status with a railroad although nominally employed by another: the borrowed, dual and subservant scenarios.

Turning to the facts of Kelley as applied to the instant case, we believe Kelley is distinguishable. In Kelley, “[although there were Southern Pacific employees in the area who would occasionally consult with PMT employees about the unloading process, PMT supervisors controlled and directed the day-to-day operations [in the yard].” (Emphasis added.) (Kelley, 419 U.S. at 321, 42 L. Ed. 2d at 504, 95 S. Ct. at 474.) In this case, no TLI supervisor presided over the daily activities of plaintiff and his fellow crew members. Indeed, none were even present. While the evidence does show that the three-member crews were largely self-sufficient in performing their duties, some degree of supervision was nonetheless required. If not supplied by TLI supervisors, then who? Construing the evidence in the light most favorable to plaintiff, as we must under the posture of this case, we believe a jury could respond to that question by answering with the name of IC.

This evidence shows that TLI crew members reported directly to the IMX yard each day to begin work and not to any TLI facility. Crew members punched in on an IC time clock and thereafter received their daily work assignments. The amount of IC’s daily rail volume and the existence of IC time deadlines dictated whether and when breaks and lunch were taken, and whether overtime was required. IC employees assured that such deadlines were met. Crew members utilized expensive IC equipment in performing their tasks. Prior to any train leaving the yard, IC employees inspected the crew members’ work. If mistakes had been made, IC employees directed and oversaw their correction. No TLI supervisor intervened during this process; none could, for they were not present. Crew members considered their actions to be the subject of IC control.

We believe the record evidence presented a factual question on the issue of whether IC controlled or had the right to control plaintiff’s activities to render plaintiff an IC employee for FELA purposes. On appeal, IC urges that the relevant inquiry requires this court to focus on whether such control existed at the time plaintiff was riding on the spotter truck, and not while plaintiff performed loading and unloading operations. While we agree with IC’s argument as to the relevant time of inquiry, we believe a question of fact nevertheless exists.

The question of employment is for the jury on the basis of all relevant information. (Ward v. Atlantic Coast Line R.R. Co. (1960), 362 U.S. 396, 4 L. Ed. 2d 820, 80 S. Ct. 789.) This inquiry extends not only to controlling the employee’s actions but also the right to control those actions as well. (Kottmeyer v. Consolidated Rail Corp. (1981), 98 Ill. App. 3d 365, 374, 424 N.E.2d 345, 353; Restatement (Second) of Agency §220(1), at 485 (1958).) In considering the right to control, all of the surrounding circumstances must be considered. Kottmeyer, 98 Ill. App. 3d at 374, 424 N.E.2d at 353.

Here, apart from the evidence detailed above, plaintiff presented evidence to show that IC controlled or had the right to control how plaintiff and his fellow crew members communicated themselves to and from the IC office to the location in the railroad yard where the unloading operations were to occur. First, no TLI supervisor was present to oversee crew members’ activities, including how they moved about the yard. Again, if TLI supervisors were not present to supervise crew members, then who? Second, crew members walked or used IC vehicles to transport themselves. Finally, plaintiff presented evidence that not only did IC supervisors know of the riding on the back of spotter trucks prior to plaintiff’s injury, Stokes testified that IC supervisors had directed him to carry crew members on the back of his spotter truck to locations in the yard. We conclude that this evidence, when combined with the evidence discussed above, was sufficient to raise a jury question on the issue of whether IC controlled or had the right to control crew members’ method of communication between the IC office and the yard. (Accord Kottmeyer, 98 Ill. App. 3d 365, 424 N.E.2d 345 (directed verdict on employee issue properly denied where sufficient evidence existed to present issue to jury).) Even the Court’s opinion in Kelley, which “bristles with broad hints that a finding of FELA coverage [on remand] would be clearly erroneous” (Kelley, 419 U.S. at 333, 42 L. Ed. 2d at 480, 95 S. Ct. at 511 (Stewart, J., concurring)), ultimately reversed and remanded the case to the district court for it to reexamine the record in light of the proper legal standard.

For the foregoing reasons, we reverse the order of the circuit court of Cook County granting summary judgment to IC, and remand the case to the circuit court for further proceedings.

Reversed and remanded.

CAMPBELL and MANNING, JJ., concur.