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    The People ex rel. William J. Scott, Attorney General of the State of Illinois, Plaintiff-Appellant, v. Convenient Food Mart, Inc. et al., Defendants-Appellees.
    (No. 57117;
    First District (3rd Division)
    July 3, 1974.

      William J. Scott, Attorney General, of Chicago (Robert S. Atkins, Peter J. Miller, and Robert A. Skirnick, Assistant Attorneys General, of counsel), for appellant.
    Charles C. Kirshbaum, Winston & Strawn, and Barry L. Kroll, all of Chicago, for appellees.
   Mr. JUSTICE DEMPSEY

delivered the opinion of the court:

The Attorney General of the State of Illinois sought injunctive relief and civil penalties from three corporations and two individuals for alleged violations of the Illinois Antitrust Act. (Ill. Rev. Stat. 1969, ch. 38, par. 60 — 1 et seq.) The case was tried without a jury and after the State presented its evidence the defendants moved for judgment pursuant to section 64(5) of the Civil Practice Act. (Ill. Rev. Stat. 1971, ch. 110, par. 64(5).) The court sustained the motion, found the defendants not guilty and dismissed the complaint for want of equity. The State appealed.

The corporate defendants are Convenient Food Mart, Scot Lad Foods and Bresler Ice Cream Company. The individual defendants are William and Harry Bresler. Convenient is engaged in the business of operating, and granting franchises to others to operate, limited inventory grocery markets under the registered name of Convenient Food Mart. Scot Lad Foods owns fifty percent of the stock of Convenient, and its Meadow-moor dairy division sells milk and dairy products to Convenient’s Illinois franchisees. The Bresler Company is engaged in the manufacture, distribution and marketing of ice cream and ice cream products and sells them to the same franchisees. William and Harry Bresler are officers of the Bresler Company and Convenient. They and other members of the Bresler family own the remaining fifty percent of Convenient’s stock.

Bresler and Meadowmoor are Chicago based companies and their products have been sold for many years in small grocery stores throughout the Chicagoland area. In the middle 1950’s an evolution took place in the retailing of foods and the market for their products declined drastically. Chain stores expanded rapidly; the stores increased in numbers and size and large areas were set aside for automobile parking. Purchasing power enabled them to reduce prices, and the lower prices, the wide selection of merchandise and ease of parking attracted customers.

This aggressive competition was too much for many grocers. It was estimated that every time a supermarket opened, 10 or 12 small groceries closed. Those who supplied the groceries suffered too. The situation became acute for independent suppliers when the chain stores started to produce their own merchandise or develop close associations with large producers and distributors. Meadowmoor and Bresler were unable to obtain any of the chain business. Meadowmoor, which was also hurt when the practice of home milk delivery was widely discontinued, offered one-half ownership of the company to one of the grocery chains, but its offer was not accepted.

Faced with the gradual diminution of their business and its seemingly inevitable cessation, Bresler and Meadowmoor, unknown to each other, searched for possible remedies. Learning through a mutual friend of each other’s problem and motivation, officers of the companies met, and after many discussions agreed to launch a combined attack on the difficulties besetting them. The officers conducted extensive research. They traveled to different states, observed what was being done by others, consulted with entrepreneurs of the grocery business, studied marketing techniques and experimented with various merchandising methods. From all this they developed — as a means of survival for themselves and the individual groceryman as well — a plan for making small groceries competitive with the supermarket chains.

Their concept was a number of family-owned stores that could profit from combined buying power and the lower operating costs resulting from the devotion and hard work of the family members. They designed a format of distinctive, attractively designed, clean, well-located food stores, with uniform equipment and fixtures, limited items of merchandise and ample parldng space, which would give the public maximum service by staying open each day until midnight.

Bresler and Meadowmoor agreed to unite their forces and become franchisors for such stores. Their intent was to do everything possible to keep the small grocer in business by seeking from purveyors low prices and discounts, by arranging financing for fixtures and inventories, by guaranteeing leases, preparing advertising and furnishing skilled direction and expert advice. Convenient Food Mart was incorporated in 1958 and a pilot store was opened that year in Skokie, Illinois. The policy of careful supervision over its franchisees and obtaining every possible advantage for them was successful Convenient Food Mart stores have thrived and so has the corporation. Meadowmoor and Bresler have prospered. At the time the Attorney General’s complaint was filed in 1971 there were more than 80 franchised stores in Illinois and, in addition, there were several stores owned and operated by Convenient itself.

In a four-count complaint the State charged the defendants with intending, by contract, combination or conspiracy, to fix, control and maintain the resale price of merchandise in accordance with the directives of Convenient; to compel the franchisees to buy Meadowmoor’s milk and Bresler’s ice cream in order to obtain Convenient franchises; to unreasonably restrain trade in the sale of milk, ice cream and other products to Convenient franchisees; to prevent the franchisees from buying milk and ice cream at prices lower than those of Meadowmoor and Bresler, and to permit the prices set in the stores operated by Convenient itself to control the prices of merchandise sold in franchised stores in the same market area, all in violation of sections 60 — 3(1) (a), 60 — 3(2), 60 — 3(4) of the Illinois Antitrust Act. (Ill. Rev. Stat. 1969, ch. 38, pars. 60 — 3(l)(a), 60 — 3(2), 60 — 3(4).) The complaint prayed that the franchise agreements and the contracts between Meadowmoor, Bresler and the franchisees be declared void, that Meadowmoor and Bresler be ordered to divest themselves of Convenient, that they be permanently enjoined from engaging in a similar business, and that each defendant be penalized $50,000 for the violation of each count in which it or he was named defendant.

Thus, a full circle has been turned in a decade and a half. In the late 1950’s Meadowmoor and Bresler were struggling to withstand competition which was taking away the outlets for their products. In the early 1970’s they and their offspring, Convenient, are accused of depriving competitors of outlets for their products.

The State’s evidence was both documentary and oral. Among the documents introduced into evidence were franchise and security agreements between Convenient and certain franchisees, contracts between franchisees and the Meadowmoor and Bresler companies, and a manual for Convenient store operators. The franchise agreements required the franchisees to operate pursuant to the manual and provided that he shall “* # * purchase, sell and use such products as are required for the operation of the business, as designated by CFM [Convenient], and to be ordered exclusively from suppliers approved by CFM for quality.” The agreements varied, however, and in some the words “for quality” were replaced by the words, “for volume purchasing and guaranteed sales benefits.” Convenient issues from time to time a purveyors list which designates the suppliers it has approved. The franchise agreements also varied insofar as some provided that the franchisee agreed to “maintain a uniform merchandising program as determined by CFM” and others stated that the franchisee agreed to maintain a “uniform price to be charged for its products as determined by CFM.” In the security agreements the franchisees agreed to buy from Convenient, freezers, refrigerated cases, shelving and equipment for installation in their stores. The Meadowmoor-franchisee contract stated that the franchisee agreed to buy all his requirements of milk, cream and other dairy products exclusively from Meadowmoor for a term of 20 years; the Bresler-franchisee contract stated that the franchisee agreed to buy all his ice cream, mixes and frozen confections from Bresler for a term of 10% years. The manual gave the franchisee detailed instructions about the operation of his store and his responsibilities to Convenient.

One franchisee testified that an officer of Convenient told him that he would be required to sign milk and ice cream contracts before he would be allowed a Convenient Food Mart franchise. Another testified that before he signed a contract with Convenient, he was told who the milk and ice cream purveyors would be. A third said he was told by Meadowmoor s president that if he did not stop selling a competitors milk and put Meadowmoor s back in his store within 24 hours, his franchise would be taken away. A former national sales director of Convenient testified that a requirement for the consummation of a franchise was the signing of a milk contract with Meadowmoor and an ice cream contract with Bresler.

On the other hand, the State’s witnesses gave testimony favorable to the defendants. Five franchisees were called as witnesses by the State. One testified that he did not always follow the prices suggested by Convenient; sometimes he charged more, sometimes he charged less. Another said he did the same thing. He also said that in some cases he bought merchandise from dealers not on the approved purveyors list. A third stated that he did not follow the suggested prices; he would charge more for some items and less for others. He also stated that he did not limit his purchases to the purveyors recommended by Convenient. The fourth testified that he bought from purveyors who served him best whether they were on the approved list or not, and that he set his selling prices as he wished. He said Convenient never defaulted him for either practice. The fifth testified that he set his own prices for the ice cream sold in his store.

Of the five franchisees, one testified that he was never tendered a Meadowmoor contract. He had a contract with Bresler, but said that even if he did not he would still buy his ice cream from Bresler. A second franchisee said he sold Meadowmoor milk, but had not been asked and had never signed a contract to do so. A third, who operated two stores, testified he had not been asked to sign a contract to buy Meadowmoor milk for either store.

The documentary evidence also was not as one-sided as the State suggests. The franchise agreements provided that Convenient would not unreasonably withhold approval if the franchisee wished to buy and sell items not currently handled by the franchisor. The contracts with Meadowmoor provided that Meadowmoor’s prices would be competitive with the general market price for comparable commodities. The manual stated that Convenient would recommend the maximum selling price for all merchandise, but that the franchisee at his discretion, could sell the merchandise below the recommended price.

At the conclusion of the State’s case, the trial court sustained the defendants’ motion for a finding in their favor. The principal issue in this appeal is whether that ruling was correct.

The State contends that the decision was error; that its evidence was sufficient to establish a prima facie case of restraint of trade, control of prices and illegal tying arrangements. The State points to the following as evidence of a conspiracy to restrain trade: (1) the formation of Convenient for the purpose of providing outlets for Meadowmoor and Bres-ler products, (2) the interrelationships and interlocking directorates between these companies and Convenient, and (3) forcing Convenient’s franchisees to sign contracts to purchase ice cream from Bresler and milk from Meadowmoor as a condition to obtaining and retaining their franchises. It points to the provisions in the franchise agreements concerning Convenient’s privilege to set the selling prices of the franchisees’ merchandise as evidence that Convenient controlled prices. And it points to testimony that Convenient compelled the franchisees to buy Meadow-moor and Bresler products exclusively in exchange for the privilege of using the Convenient trademark and participating in the Convenient system, as proof that there was an illegal tying arrangement.

A major flaw in the State’s position is the standard of proof it wishes to apply to its evidence. The first contention in its brief is that upon a motion by a defendant for dismissal at the close of a plaintiffs case, the evidence should be viewed in the light most favorable to the plaintiff. The State then concludes that if its uncontradicted evidence “sets up merely a prima facie case under the charges in the complaint, this court should reverse and remand this cause.” We agree with the State that a prima facie case was made out if the evidence and the inferences from the evidence are viewed most favorably to the State, but we do not agree that we should reverse and remand because of it. In a non-jury trial, the court does not view the evidence in the light most favorable to the plaintiff. Section 64(5) of the Civil Practice Act sets out the standard which governs a defendant’s motion for a finding or judgment:

“In all cases tried without a jury, defendant may, at the close of plaintiff’s case, move for a finding, judgment or decree in his favor. In ruling on the motion the court shall weigh the evidence.” (Ill. Rev. Stat. 1971, ch. 110, par. 64(5).)

In arriving at its decision, we assume the trial court weighed the evidence — that which was favorable to the State as well as that which was unfavorable — evaluated the credibility of the witnesses and considered the relevant law. We must also examine the evidence and the law to determine whether the trial court erred in finding that the State failed to prove a prima facie case.

The central policy of antitrust laws is against agreements which take away the freedom of purchasers to buy in tire open market and to maintain, in the public interest, freedom of competition. (Federal Trade Commission v. Brown Shoe Co. (1966), 384 U.S. 316.) Some business practices have been found so restrictive of free trade that they are held to be per se violations of the antitrust laws. A per se violation is one where, to quote the State’s brief, “certain arrangements, on their face, are so inherently anticompetitive and lacking in saving grace that they are best held illegal out-of-hand.” A practice which has been found to be a per se violation and which has been dealt with strictly by the courts considering the problem is a “tying” agreement between sellers and buyers. A tying agreement is one where a buyer who is desirous of taking a single product from a seller agrees to take others in order to obtain the first or agrees that he will not buy that product from other suppliers. Northern Pacific Ry. Co. v. United States (1958), 356 U.S. 1.

The emphasis of the State’s legal argument is on the tying arrangements between Convenient, Meadowmoor and Bresler and the franchisees. It asserts these arrangements constituted infractions of both sections 60 — 3(2) and 60 — 3(4) of the Antitrust Act. The lesser emphasis on the alleged violation of section 60 — 3(1) (a) is understandable. At best, it is only debatable whether the legislature intended subsection (l)(a) to apply to both horizontal and vertical price-fixing agreements. The Chicago Bar Association Committee on Antitrust Law states that it did not: “Section 3(1) does not reach vertical agreements, such as agreements between buyers and sellers fixing the price at which the buyer shall resell.” (S.H.A., ch. 38, sec. 60 — 3, p. 842.) The language of the statute supports this interpretation. Subsection (l)(a) provides that it shall be unlawful for any person to engage in a combination or a conspiracy, or to make a contract with any person who is, or but for a prior agreement would he, a competitor of such person. The purpose of this subsection is to prevent competitors from joining forces to fix prices. There is no evidence in the record that Convenient’s franchisees compete either with each other or with those stores wholly owned by Convenient. To the contrary, State witnesses testified that a franchisee serves the area near his store. Franchisees might be in competition with each other if there were other Convenient stores in the immediate market area. There is, however, no evidence to that effect. Thus, even if 60 — 3(1) (a) were interpreted as embracing vertical price-fixing, proof that there was an infraction of this section was lacking. Furthermore, there was no conclusive evidence that prices were fixed; indeed, franchisees testified they set their own prices, and the Convenient manual explicitly stated that each franchisee could sell his goods below tire prices Convenient might suggest. The State maintains that there was enough evidence to prove there was a program to enforce predetermined retail prices and that its documentary evidence was corroborated by testimony that tire defendants threatened to put non-conforming franchisees out of business. Convenient’s bark was worse than its bite. It may have threatened to terminate franchises if its suggestions were not followed, but it did nothing more. In the decisions reviewed by this court on this issue, the defendants found guilty of price-fixing had engaged in some form of coercive action, beyond the mere refusal to deal, which tended to force the purchasers of their products to adhere to a resale price program. (Albrecht v. Herald Co. (1968), 390 U.S. 145; United States v. Parke, Davis & Co. (1960), 362 U.S. 29; Federal Trade Comm. v. Beech-Nut Co. (1922), 257 U.S. 441.) We conclude that the judgment of the trial court on the issue of price-fixing was not contrary to the manifest weight of the evidence.

In concentrating its fire on the tying agreements, the State takes the position that Convenient’s trademark was the tying product and Meadowmoor’s milk and Bresler’s ice cream were the tied products. All tying arrangements are not necessarily per se violations of antitrust statutes. (White Motor Co. v. United States (1963), 372 U.S. 253.) The State concedes that a per se infraction based on tying arrangements cannot be established by a mere showing of a tie-in; that the additional elements of proof required are sufficient economic power in the tying product, and the restraint of a substantial amount of commerce in the tied product. (Times-Picayune Publishing Co. v. United States (1953), 345 U.S. 594.) The defendants’ unlimited control over the Convenient trademark is said to demonstrate the requisite economic power, and the size of their sales to the franchisees is said to demonstrate a substantial restraint of commerce. The State’s proof on the latter element consisted of an answer by Meadowmoor to an interrogatory that it sold annually about $2,000,000 worth of dairy products to Convenient franchisees, and a stipulation by Bresler that it sold them $408,614 worth of ice cream products in the first 9 months of 1971.

There are two additional factors that enter into the present case: the significance of Convenient’s trademark, the significance of its relationship, as a franchisor, with its franchisees, and the significance of the statutory admonition that in Illinois antitrust law enforcement is to be limited to unreasonable restraints of trade. (Chapter 38, section 60— 3(2).) ;

Sufficient economic power over the tying product is presumed if the tying product is controlled by a patent (International Salt Co. v. United States (1947), 332 U.S. 392) or by a copyright (United States v. Loew’s, Inc. (1962), 371 U.S. 38), and there is growing authority that trademarks are presumptive of the power. Siegal v. Chicken Delight, Inc., 448 F.2d 43 (9th Cir. 1971), cert, denied, 405 U.S. 955 (1972); Warriner Hermetics, Inc. v. Copeland Refrigeration Corp., 463 F.2d 1002 (5th Cir. 1972), cert, denied, 409 U.S. 1086; Falls Church Bratwursthaus, Inc. v. Bratwursthaus Management Corp., 354 F. Supp. 1237 (D. C. Virg. 1973).

While franchisors cannot violate antitrust laws any more than anyone else, franchisors are unique in that some control must be exercised over their franchisees in order to maintain the quality and standards of the franchise operation. In situations where identification with a franchisor’s trademark is the basis of imposing restrictions on a franchisee, the imposition may be justified on the ground that the holder of the trademark must control the quality of the seller’s goods or run the risk of giving up his rights in his mark. (Flinn, 40 Antitrust Journal, 149 (1971).) Indeed, the law compels him, at the risk of abandoning his right to the registered mark, to exercise control over his licensees in respect to the quality of his mark or service. Land O’Lakes Creameries, Inc. v. Oconomowoc Canning Co., 330 F.2d 667 ( 7th Cir. 1964); Dawn Donut Co. v. Hart’s Food Stores, Inc., 267 F.2d 358 ( 2nd Cir. 1959); Morse-Starrett Products Co. v. Steccone, 86 F. Supp. 796 (D.C. Cal. 1949); E. I. DuPont DeNemours & Co. v. Celanese Corporation of America, 167 F. 2d 484 (C.C.P.A. 1948).

Where circumstances justify it, Federal courts make use of what is commonly spoken of as the “rule of reason” to alleviate what otherwise might be a harsh result if the provisions of the Federal antitrust acts were literally enforced. Section 11 of the Illinois Act directs that when the language of the Act is the same or similar to that of the Federal antitrust acts (Sherman and Clayton Acts, Title 15 U.S.C.), the courts of this State shall follow the construction given to the Federal law by the Federal courts. (Ill. Rev. Stat. 1971, ch. 38, par. 60 — 11.) Despite this statute, Illinois courts are not required to follow Federal decisions although they may do so if they find them persuasive. (People v. Crawford Distributing Co. (1973), 53 Ill.2d 332, 291 N.E.2d 648.) Federal courts have held, in applying the rule of reason, that tying arrangements may be justified if there is a valid business reason for them. The rule operates through the availability of an affirmative defense of justification. Franchisors may successfully defend otherwise proscribed tie-ins by demonstrating that the restraints imposed are the least restrictive means of protecting the good will associated with a trademark. (Siegal v. Chicken Delight, Inc.) An example is the case of Susser v. Carvel Corp., 332 F.2d 505 ( 2d Cir. 1964) cert, dismissed, 381 U.S. 125 (1965).

The Carvel Company sold ice cream to some 400 franchisees who were required to purchase other products which were to be sold to the public from either Carvel or suppliers approved by Carvel. A number of former franchisees sued for damages alleging that the tying arrangements were a violation of the Sherman Act. In finding for Carvel, the district court said “no case has been found under any of the trust laws holding that the franchisor of a valuable trademark cannot restrict the line of business operated by his franchisee.” (206 F. Supp. 636 (D.C.N.Y. 1962).) The court of appeals affirmed (332 F.2d 505 (2nd Cir. 1964)) and the Supreme Court dismissed certiorari (381 U.S. 125 (1965).)

The majority concurring opinion in the court of appeals pointed out that Carvel stores were uniform in the products offered for sale. The court stated that Carvel’s requirement that only its products be sold at stores bearing its name derived from the desirability that the public identify each outlet as one of a chain which offered identical products at a uniform standard of quality. The court said that the tying item in the franchisor-franchisee relationship was the Carvel trademark and since the value of a trademark depended solely on the public image it conveyed, its holder must exercise controls to assure it that the mark is not shown in a derogatory light. The court went on to say:

“The antitrust laws certainly do not require that the licensor of a trademark permit his licensees to associate with that trademark other products unrelated to those customarily sold under the mark. It is in the public interest that products sold under one particular trademark should be subject to the control of the trademark owner.”

Although similar in many ways, the Illinois Antitrust Act differs from the Sherman and Clayton Acts in that the general restraint section —60—3(2)—directs that the rule of reason must be used in State antitrust prosecutions. Section 60 — 3(2) states: “Every person shall be deemed to have committed a violation of this Act who shall * * * unreasonably restrain trade or commerce.” This positive directive of the Illinois statute avoids the presumption of irregularity found in the Federal cases, and instead places the burden upon the State to show in the first instance the anticompetitive effect of purported restraints. Thus, a question to be answered is whether based on the State’s evidence the trial court could have found that the defendants were not unreasonable in their supervision of and dealings with Convenient’s franchisees. We believe, considering the facts and circumstances disclosed by the record, the history and purposes of the Convenient plan, and the Illinois caveat that restraints to be unlawful must be unreasonable, that there was substantial justification for the court’s conclusion that the tying requirements — if, indeed the court thought that the contracts as enforced rose to the level of tying agreements (cf. Maywood Sportservice, Inc. v. Maywood Park Trot. Ass’n, Inc. (1973), 14 Ill.App.3d 141, 302 N.E.2d 79), a question on which there was evidence favorable and unfavorable to both sides— were not unduly restrictive and that the defendants’ arrangements with the franchisees were not unreasonable.

Convenient gave its franchisees its trademark and support. It gave them financing, advertising, experience, guidance and service. The monetary value of the Convenient trademark is shown by the price franchisees were willing to pay to be a member of the Convenient family. A franchise cost $67,000 and of this amount $17,485 had to be advanced in cash.

Convenient sought by its policies to generate and retain goodwill through the similarity of its stores, the consistent quality of its merchandise, competitive prices, uniform merchandising techniques and hours of operation. Its trail-blazing policy of accommodating customers by opening its stores 7 days a week and staying open until midnight has been copied by chain stores. An integral part of the original Convenient concept was for its stores to handle limited brands and limited items of merchandise which would be designated by Convenient and which were to be purchased from suppliers designated by Convenient. This has been the practice — one that works hand in hand with the space limitations of Convenient stores. Convenient stores are much smaller than supermarkets which have space to display full lines of merchandise and a wide choice of brands. Less space compels Convenient storekeepers to carry fewer brands and fewer items. There was no evidence that the brands and items recommended by Convenient were not commensurate with the market prices of similar merchandise. The Convenient concept would be frustrated and the franchisor’s public image damaged if each storekeeper selected his own lines and brands; and the benefit of quantity buying — shared in by all franchisees — would be destroyed if freedom of selection were permitted.

While Meadowmoor and Bresler obtained new outlets for their products by the formation of Convenient, they sold them to franchisees on a competitive basis, realizing, as one witness said, if the storeowners did not make money they could not survive and neither could Convenient. There was no proof that these products were inferior, overpriced or burdensome to the franchisees. The evidence was conflicting whether the products were forced on the franchisees. In this connection it is interesting to note that the defendant Scot Lad Foods, a purveyor of grocery items which could be sold by Convenient stores, made no effort to sell these items to the storeowners despite the fact that, through its subsidiary Meadowmoor, it owned half of Convenient.

The overall value of the Convenient trademark depended on its public recognition. Since it was the intention of Convenient to create an image in the public mind that each store was alike, we see little wrong in requiring each one to carry identical merchandise; since it was Convenient’s desire to build a good reputation and to secure and maintain public acceptance, we see nothing wrong in its patrolling its system and enforcing its regulations. The testimony showed that Convenient’s enforcement was more liberal than the franchise agreements and other documentary evidence indicated it could be. The controls it did enforce were reasonably compatible with legitimate economic purposes and were no more than appeared necessary to assure it and its progeny a secure place in the mercantile sun.'

Meadowmoor and Bresler were charged in separate counts of the State’s complaint with having violated section 60 — 3(4) of the Antitrust Act which prohibits agreements that substantially lessen competition or create a monopoly. The State’s proof in reference to 60 — 3(4) was the same as that adduced in reference to section 60 — 3(2). Although section 60 — 3(4) does not repeat the restriction contained in section 60 — 3(2) that an antitrust violation only occurs when a person unreasonably restrains trade or commerce, it can be argued that the restriction, appearing as it does in the general restraint of trade section, carries over into section 60 — 3(4). Be that as it may, our legislature did not classify tying arrangements as per se violations as it did price-fixing agreements under section 60 — 3(1) (a) of the Act, and it was the State’s burden to prove, if not the unreasonableness, at least the illegality of Meadow-moor’s and Bresler’s arrangements with the franchisees. One of the elements the State had to prove in order to establish that the milk and ice cream buying arrangements were unlawful was that a not insubstantial amount of commerce was affected by the arrangements. The State’s case failed in this respect.

The State brought out that Meadowmoor sold the franchisees about $2,000,000 a year in dairy products and Bresler $408,614 worth of ice cream products in nine months. The State offered no proof (only a possible inference which the State probably hoped the court would draw) that these sales substantially lessened competition in like products in the State or in the Chicagoland area. To the contrary, other evidence showed that Meadowmoor s sales to the franchisees was only .025 percent of its total Illinois sales. There was no proof as to what percentage Bresler s sales to the franchisees bore to its total sales. In Tampa Electric Co. v. Nashville Coal Co. (1961), 365 U.S. 320, the court in discussing a section 3 violation of the Clayton Act (which corresponds to section 60 — 3(4) of the Illinois Act) stated that, to determine substantiality, a court must weigh the probable effect of the agreement on the relevant area of effective competition. Explaining the necessity of such a consideration, the court delineated general areas of inquiry to aid in that determination. The court held it would be proper to inquire as to the relative strength of the parties, the proportionate volume of commerce involved in relation to the total volume of commerce within the relative market area, and the probable immediate and future effects which preemption of that share of the market might have on effective competition therein. The court specifically held that, “* * * a mere showing that the contract itself involves a substantial number of dollars: is ordinarily of little consequence." Therefore, the showing of the dollar volume of business transacted between Meadowmoor and Bresler and! Convenient franchises, without more, was insufficient to establish that the alleged tying arrangements substantially lessened competition or tended to create a monopoly in either milk or ice cream.

When a defendant moves for judgment at the close of the plaintiff’ s case, the trial court is required to weigh all the evidence offered by the plaintiff. (Ill. Rev. Stat. 1971, ch. 110, par. 64(5); M.F.M. Corporation v. Cullerton (1973), 16 Ill.App.3d 681, 306 N.E.2d 505.) The motion; is a procedural means of submitting the whole case to the court for a; determination on the merits. (Banks v. Gregory (1959), 16 Ill.2d 227,, 157 N.E.2d 12.) The court must decide whether the inferences and conclusions adduced by it from the evidence result in a prima facie case:. (McDonald v. Neale (1962), 35 Ill.App.2d 140, 182 N.E.2d 366.) Unless: the trial court could find that the State’s evidence was so convincing and' unequivocal as to enable it to draw inferences and reach the conclusions: necessary to a finding that the antitrust statutes were violated, the defendants’ motion for judgment was properly allowed. In reviewing the; propriety of the ruling, it is the responsibility of this court to determine; if the ruling was against the manifest weight of the evidence. DeBello v. Checker Taxi Co. (1972), 8 Ill.App.3d 401, 290 N.E.2d 367; Bilyeu v. Plant (1966), 75 Ill.App.2d 109, 220 N.E.2d 513.

There were many weaknesses in the State’s evidence; some of its proof was contradictory and the testimony of its witnesses conflicting. There was ample evidence to support the trial court’s decision. After reviewing the entire record we cannot say that the judgment of the court in respect to all four counts of the State’s complaint was clearly erroneous.

The judgment is affirmed.

Affirmed.

McNAMARA, P. J., and McGLOON, J., concur.


source: Caselaw Access Project

author: Mr. JUSTICE LEIGHTON

license: Public Domain

text:
    Lou Adams et al., Plaintiffs-Appellants, v. Continental Casualty Company, Defendant-Appellee.
    (No. 57387;
    First District (2nd Division)
    June 25, 1974.
    Shapiro, Kreisman & Epstein and Epton, McCarthy & Druth, both of Chicago (David S. Kreisman, of counsel), for appellants.
    Peterson, Ross, Rail, Barber & Seidel, of Chicago (A. R. Peterson and Herbert C. Loth, Jr., of counsel), for appellee.
   Mr. JUSTICE LEIGHTON

delivered the opinion of the court:

This was a garnishment proceeding by the plaintiffs, Elaine McRoberts and Irene Wright, judgment creditors, against Continental Casualty Company, garnishee, to reach what they alleged was the interest of Lou Adams, their judgment debtor, in a certain automobile liability insurance policy issued by Continental. Plaintiffs filed a motion for judgment and defendant moved to dismiss the garnishment. Thereafter, the parties stipulated to the material facts. Then, they filed memoranda of law in which their respective theories and contentions were argued. After taking the cause under advisement, the trial court dismissed the garnishment and discharged the garnishee. The controversy concerning this discharge arises from the following facts.

In 1957, Hertz Stations, Inc., was engaged in the business of renting or leasing motor vehicles and Continental Casualty Company was authorized to issue automobile liability policies in Illinois. Accordingly, it issued a special policy under which it extended automobile liability coverage of $25,000 per person, $50,000 per accident and $5,000 in property damage to persons who rented motor vehicles from Hertz. Under the terms of the policy, and to the limit of its coverage, Continental agreed to pay on behalf of Hertz and its renters, all sums which they became obligated to pay for bodily injury to or death of any person caused by an accident arising out of the use of the rented motor vehicle.

The policy, however, contained a provision which excluded from its coverage any occupant of the motor vehicle. In addition, the policy had a condition which provided that when it was certified as proof of financial responsibility under the motor vehicle financial responsibility law of any State, the insurance it afforded would comply with the provisions of such law “* * * which shall be applicable with respect to any such liability arising out of the ownership, maintenance or use of the automobile during the policy period, to the extent of the coverage and limits of liability required by such law * * The condition further required an insured, the driver of a Hertz rented vehicle, to agree to reimburse Continental for any payment which, because of the provision of some State law, it made without being so obligated under the terms of the policy.

At the time the policy was issued, Illinois law provided that no owner of a motor vehicle could engage in the business of renting it without first proving financial responsibility by filing with the Secretary of State a bond or a motor vehicle liability policy of a solvent and responsible company, a policy which required payment by the insurance carrier, within 30 days after it became final, of any judgment recovered against the renter or anyone operating the vehicle with the renter’s express or implied consent, “* * * for damage to property other than to the rented motor vehicle * #

On August 12, 1957, Lou Adams rented a Hertz motor vehicle. Under the agreement he signed, he acknowledged he was an insured under the policy Continental had issued to Hertz and he agreed to comply with all the terms of that policy, recognizing application of the exclusion which removed from coverage, with respect to bodily injury or death, any occupant of the vehicle he was renting. Consistent with the terms of the policy, Adams agreed to indemnify Continental in the event, because of the requirement of any State law, it had to pay an occupant of the rented vehicle for any injury or damage sustained from operation of the motor vehicle rented from Hertz. Adam’s attention was called to the exclusionary provision of the policy as it applied to him as a renter of the motor vehicle.

The same day he rented the vehicle, Adams operated it with Elaine McRoberts and Irene Wright as his passengers. At a street intersection in Chicago, he drove the vehicle into a street light or utility pole. In the collision that resulted, McRoberts and Wright were injured. A short time later, they sued Adams, alleging willful and wanton misconduct by him on the occasion when they were injured. On December 16, 1959, Adams was defaulted, an ex parte jury trial was held and verdicts of $60,000 and costs for McRoberts, $15,000 and costs for Wright were returned against him. Judgments were later entered on the verdicts. Then, on May 20, 1960, McRoberts and Wright, as judgment creditors, began garnishment proceedings against Continental on the theory that the policy issued to Hertz covered Adams for the liability he incurred when, in operating the rented Hertz vehicle, he injured them.

Continental appeared, answered the garnishment and denied it was indebted to Adams. However, the cause, without action by plaintiffs, remained on the trial court calendar until July 2,1970, when Continental, as garnishee defendant, filed a motion to dismiss the garnishment on the ground that the policy it had issued to Hertz specifically excluded coverage for injuries sustained by any passenger, guest or person while riding in, alighting from or getting into the vehicle that had been rented to Adams. Thereafter, the parties entered into a stipulation concerning the material facts, attaching thereto, as an exhibit, the policy in question. Then, memoranda of law were filed.

In the memorandum they filed, plaintiffs McRoberts and Wright stated the multi-ground theory of their motion for judgment: (1) Continental was liable to them as judgment creditors of Adams because its policy to Hertz, which insured Adams, was issued to comply with motor vehicle financial responsibility laws of Illinois; therefore, Continental’s liability had to be determined by reference to those laws and not to the exclusionary language of its policy. (2) Although the provisions of the Illinois Motor Vehicle Law (Ill. Rev. Stat. 1957, ch. 9514, par. 8 — 118) would preclude them from recovering against Continental, the statutory exclusion violates section 22 of article IV of the Illinois Constitution of 1870 because it was a special law and therefore was void. (3) This being so, construed and applied without the invidious exclusion of occupants of a rented motor vehicle, section 8 — 11.8 requires liability coverage for all persons, including occupants of rented vehicles, a result which the condition of Continental’s policy anticipates; as a consequence, Continental was liable to the plaintiffs to the extent of its policy because it covered Adams, their judgment debtor.

In the memorandum it filed, Continental responded to plaintiffs’ motion for judgment and to the points they had argued in support of their theory of the case. It argued that section 8 — 118 of the Illinois Motor Vehicle Law was constitutional; that the Illinois financial responsibility law was not applicable within the pertinent condition of the policy it issued to Hertz; that section 8 — 118 of chapter 9514 of the Illinois Revised Statutes was constitutional; and that the provisions of its policy which excluded coverage to occupants of motor vehicles rented by Hertz did not violate any provision contained in article IV, section 22 of the Illinois Constitution. For these reasons, Continental requested the trial court to dissolve the garnishment writ and discharge it as garnishee.

After hearing the parties, the trial court entered an order which found that the exclusion of occupants of rented motor vehicles from automobile liability coverage provided in policies issued in compliance with section 8 — 118 of the Illinois Motor Vehicle Law was not a discriminatory classification without a reasonable basis; therefore, the statute did not violate article IV, section 22 of the Illinois Constitution. On that finding, it dismissed the garnishment and discharged Continental, the garnishee. The dispositive issue in this appeal is whether the classification of occupants of rented vehicles as contained in the 1957 provisions of section 8 — 118 of the Illinois Motor Vehicle Law was discriminatory legislation in violation of article IV, section 22 of the Illinois Constitution of 1870 and was a denial of equal protection under the fourteenth amendment to the United States Constitution. To resolve this issue, we must decide whether, in adopting the statute in question, the legislature passed a special law that granted to Adams, Continental and Hertz a special or exclusive privilege, immunity or franchise.

Section 22, article IV of our constitution, prohibits the General Assembly of this State from passing any local or special law which grants

to any corporation, association or individual a special or exclusive privilege, immunity or franchise. (Schuman v. Chicago Transit Authority, 407 Ill. 313, 317, 95 N.E.2d 447.) This provision supplements the equal protection clause of the fourteenth amendment to the Federal Constitution and prevents enlargement of the rights of one or more persons in discrimination against the rights of others. (Michigan Millers Mutual Fire Insurance Co. v. McDonough, 358 Ill. 575, 585, 193 N.E. 662.) In determining whether a law is special or class legislation, violative of this constitutional provision, the controlling question is always whether its classification of persons or objects for purposes of legislative regulation is based on some substantial difference bearing proper relation to the classification or, on the other hand, is arbitrary and capricious. (Crews v. Lundquist, 361 Ill. 193, 197, 197 N.E. 768; Spalding v. City of Granite City, 415 Ill. 274, 113 N.E.2d 567.) Therefore, in this case, with the 1957 legislative enactment in mind, we must look at the business of motor vehicle renting in order to determine whether classification of occupants of a rented motor vehicle for exclusion as persons toward whom the owner of the vehicle need show financial responsibility, was based on a substantial difference which bore a proper relation to the classification. This determination necessarily requires, if only briefly, that we consider the relationships created and the classes of persons involved when owners of motor vehicles rent them out to be operated by customers.

The business of renting motor vehicles involves at least three identifiable classes of persons, each with different but correlative legal rights and obligations: the owners, the renters (together with those who permissively become occupants of the motor vehicles) and members of the general public. Between the owner, on the one hand, and the renter, on the other, the relation is one of contract. (See 61A C.J.S. Motor Vehicles §760.) These two classes of persons can, if they wish, agree to whatever protective insurance coverage they desire; they are in a position to take whatever precaution they foresee as necessary in the operation of the motor vehicle by the renter.

This is not true of non-occupants, that identifiable class of persons who constitute the general public. Because the motor vehicle rental contract reflects satisfaction of the owner and renter concerning the terms of hire, including insurance coverage, and because renters (together with those who use the vehicle with their permission), as occupants, constitute a class with differing rights, duties and obligations, the legislature could recognize those differences and adopt a statute that protected the general public by allowing owners to show financial responsibility through an automobile liability policy that excluded coverage to occupants. (Compare Weksler v. Collins, 317 Ill. 132, 147 N.E. 797; Allen v. Conken, 39 Ill.2d 427, 235 N.E.2d 631. It follows that when the legislature classified occupants of rented motor vehicles for exclusion from financial responsibility requirements of the motor vehicle law, it based its judgment on a substantial difference that bore a proper relation to that classification. Consequently, section 8 — 118 of the Motor Vehicle Law, adopted by the legislature in 1957, was not discriminatory legislation violative of article IV, section 22, of our State constitution, nor was it a denial of equal protection under the fourteenth amendment to the Federal constitution. For these reasons, Continental’s policy to Hertz did not cover the accident in which plaintiffs were injured; and under no theory could Continental be required to satisfy, in whole or in part, plaintiffs’ judgments against Adams. Therefore, it was correct for the trial court to dismiss the garnishment and discharge the garnishee. The judgment is affirmed.

Affirmed.

HAYES, P. J., and DOWNING, J., concur.

       Effective July 1, 1970, section 8 — 118 of the Motor Vehicle Law of 1957 was repealed, its substance was enacted as section 9 — 105 and the phrase, “not an occupant of the rented motor vehicle” was "revised to read “including an occupant of the rented motor vehicle.” Ill. Rev. Stat. 1969, ch. 95%, par. 9 — 105.

       Am. Jur. Legal Forms 2d, § 36:25; Annot., 7 A.L.R. 2d 456.

       It is worth noticing that the exclusionary provisions in Ill. Rev. Stat. 1957, ch. '95%, par. 8—118 applied to “* * * any person, not an occupant of the rented motor vehicle * * *.” For an analogy, see Ill. Rev. Stat. 1957, ch. 95%, par. 9—201, the Illinois Guest Statute. The constitutionality of this statute has been sustained in Illinois, Clarke v. Storchak, 384 Ill. 564, 52 N.E .2d 229; Delany v. Badame, 49 Ill.2d 168, 274 N.E.2d 353; on fourteenth amendment grounds, a similar statute has been sustained in the Supreme Court of the United States, Silver v. Silver (1929), 280 U.S. 117, 74 L. Ed. 221, 50 S. Ct. 57; and in some states, similar statutes have been declared unconstitutional, Brown v. Merlo (1973), 8 Cal. 3d 855, 506 P. 2d 212, 106 Cal. Rptr. 388; Henry v. Bauder (1974),-Kan. -, 518 P. 2d 362.


author: PER CURIAM.

text:
    Sandra A. Kohn, Plaintiff-Appellant, v. Charles W. Kohn, Defendant-Appellee.
    (No. 59301;
    First District (2nd Division)
    June 25, 1974.

      Sheldon D. Engel, of Chicago, for appellant.
    Philip S. Lieb, of Chicago, for appellee.
   PER CURIAM.

STAMOS, J., took no part.


text:
    Mike Mallerdino, Plaintiff-Appellant, v. Joseph Pollina et al., Defendants-Appellees.
    (No. 58448;
    First District (2nd Division)
    July 8, 1974.
    Black and Wrobel, of Chicago, for appellant.
    Denis R. Pollina, of Chicago, for appellees.
   PER CURIAM.


author: Mr. JUSTICE RECHENMACHER.

text:
      In re Application of County Collector—(People ex rel. Cal Skinner, Jr., County Collector, McHenry County, Plaintiff-Appellant, v. Chicago and Northwestern Railway Company et al., Objectors-Appellees.)
    (No. 72-136;
    Second District
    July 23, 1974.
    William J. Cowlin, State’s Attorney, Caldwell, Berner & Caldwell, and Richard Cross, all of Woodstock, for appellant.
    Kell & Conerty, of Woodstock, for appellee.
   Opinion by

Mr. JUSTICE RECHENMACHER.


author: Mr. PRESIDING JUSTICE T. MORAN.

text:
      In re Estate of Richard J. Fence, Sr.—(Philip C. Corrado, Jr., Ex’r, Appellee, v. Raymond A. Fencl, Appellant.)
    (No. 73-439;
    Second District
    July 22, 1974.
    Thomas J. Pierce, of Chicago, for appellant.
    Edward Atlas and Malato, Stein & Grossman, both of Chicago, for appellee.
   Opinion by

Mr. PRESIDING JUSTICE T. MORAN.


author: PER CURIAM:

text:
    John R. Beanland et al., d/b/a Beanland Drilling Company, Plaintiffs-Appellees, v. Fred Sweitzer et al., Defendants-Appellants.
    (No. 73-343;
    Fifth District
    July 23, 1974.
    CREBS, J., took no part.
    James W. Sanders, of Marion, for appellants.
    R. Corydon Finch, of Anna, for appellees.
   PER CURIAM:

Judgment was entered on a jury verdict in favor of plaintiffs in the amount of $2537. Defendants have appealed seeking reversal and re-mandment for a new trial.

Plaintiffs-appellees have moved to affirm the judgment, on the grounds that the defendants did not file a post-Mai motion, and therefore failed to preserve a basis for review by this court.

We believe plaintiffs-appellees’ interpretation of section 68.1 of the Civil Practice Act (Ill. Rev. Stat. 1973, ch. 110, par. 68.1) is correct. Roberson v. Leak, 72 Ill.App.2d 11, 218 N.E.2d 819; Farnsworth v. Shops Budding, 77 Ill.App.2d 44, 222 N.E.2d 132.

Judgment affirmed.

Mr. JUSTICE CREBS took no part in the consideration or decision of this case.


author: Mr. JUSTICE EBERSPACHER

text:
    Barbara Blackmore, Plaintiff-Appellant, v. Jasper County Community Unit School District No. 1, Defendant-Appellee.
    (No. 73-112;
    Fifth District
    July 23, 1974.
    Robert L. Douglas, of Robinson, for appellant.
    Robert F. A. S to eke, of Louisville, for appellee.
   Mr. JUSTICE EBERSPACHER

delivered the opinion of the court:

The plaintiff, Barbara Blackmore, filed a small claim complaint in the circuit court of Jasper County stating that the defendant, Jasper County Community Unit School District No. 1, was indebted to her in the sum of $900 and costs “for wages due to breach of contract.” The cause was called for trial and at the close of plaintiffs case the defendant made a motion for a directed verdict in its favor. After arguments of counsel were heard in which plaintiff argued the application of Fuentes v. Shevin, 407 U.S. 67, 32 L.Ed.2d 556, 92 S.Ct. 1983, the trial court granted the motion and entered judgment for defendant. This appeal followed.

The sole issue raised on appeal is whether the “due process clause of the Constitution of the United States of America and the State of Illinois require that the Plaintiff be given a formal hearing” in which she is given “an opportunity to confront those people who are making complaints against her” before she may be discharged by her employer. The plaintiff does not allege her discharge was the result of any statutory violation by her employer. Nevertheless, plaintiff contends that she is entitled to a formal hearing before she may be discharged by her employer.

Plaintiff cites three cases (Fuentes v. Shevin, 407 U.S. 67, 32 L.Ed.2d 556, 92 S.Ct. 1983; Scott v. Danaher (N.D. Ill. 1972), 343 F. Supp. 1272, and People ex rel. Bernat v. Bicek, 405 Ill. 510, 91 N.E.2d 588) in support of this contention. None of the authorities cited by the plaintiff concerned the discharge of an employee. In fact, each of the cases cited concerned the constitutionality of a particular legislative act or statute and the due process requirements thereunder. Since we are not confronted with the due process requirements under a particular statute, we find the cases cited by the plaintiff of little aid in our deliberations.

Our review of the authorities reveals that no formal hearing is required by the due process clause of the Constitution of the United States of America or by the Constitution of the State of Illinois before an employee may be discharged. In National Labor Relations Board v. Standard Coil Products Co. (1st Cir. 1955), 224 F.2d 465, cert, denied, 350 U.S. 902, the court stated,

“It is well accepted law that an employer may discharge an employee for any reason, reasonable or unreasonable, so long as it is not for a reason prohibited by the Act [National Labor Relations Act], [Citation.]” (224 F.2d at 470.)

Similarly, in Long v. Illinois Central R. R. Co., 32 Ill.App.2d 103,105, 176 N.E.2d 812, 813, the court stated:

“There is no common law right of the employee to employment by the railroad, but a contractual right, established by the contract between the railroad and the unions, and the employee has no right of action, except for a breach of that contract.”

In 53 Am.Jur.2d Master and Servant § 43 (1970), the following statement is made:

“Whether in a particular case an employer can discharge his employee without cause, and not incur liability, is a question which is to be resolved with reference to the express and implied terms of the contract.” 53 Am.Jur.2d Master and Servant § 43.

Since this appeal is based solely on ground of a deprivation of due process we need not discuss the respective rights and obligations under the employment contract. Having determined that the plaintiffs only contention is without merit, we affirm the judgment of the circuit court of Jasper County.

Judgment affirmed.

G. MORAN, P. J., and CREES, J., concur.


author: Mr. JUSTICE STOUDER

text:
    Charles Lightfoot et al., Plaintiffs-Appellants, v. Henderson County Drainage District No. 1, Henderson County, Defendant-Appellee.
    (No. 74-74;
    Third District
    July 31, 1974.

      Richard L. Whitman, of Kritzer, Stansell & Critzer, of Monmouth, for appellants.
    Samuel Naylor, of Carthage, for appellee.
   Mr. JUSTICE STOUDER

delivered the opinion of the court:

This action was commenced by Charles and Eileen Lightfoot, plaintiffs-appellants, against the Henderson County Drainage District No. 1, defendant-appellee, seeking damages for the wrongful removal of a levee and dirt. Pursuant to defendant’s motion to dismiss the complaint, the circuit court of Henderson County dismissed the complaint and it is from such order that this appeal follows.

On November 29, 1966, a complaint was filed on behalf of Charles and Eileen Lightfoot. The complaint alleged that during the spring of 1965 agents or employees of Henderson County Drainage No. 1 destroyed a levee on the south bank of Henderson Creek on land owned by the plaintiffs in Henderson County. The complaint also claimed that agents or employees of the drainage district had removed hundreds of tons of earth from the plaintiffs’ land and that the effect of the defendant’s actions was to reduce the value of the plaintiffs’ land by $6,300.

The clerk of the circuit court of Henderson County is also, by statute, made ex-officio clerk of the Henderson County Drainage District No. 1. No notice of a claim by the Lightfoots against the drainage district was filed with the circuit clerk of Henderson County other than the complaint filed on November 29,1966.

On February 13, 1969, the plaintiffs filed an amended complaint through a new attorney. The amended complaint alleged that the levee was destroyed by agents or employees of the defendant “during the spring of 1966, the exact date being unknown to the plaintiffs.”

On September 4, 1970, the plaintiffs filed an amendment to their second amended complaint. In that amendment, the plaintiffs alleged that the levee was destroyed “during the fall of 1965, the exact date being unknown to the plaintiffs.” The filing of this amendment was allowed by stipulation on November 19,1973.

On January 26, 1970, the plaintiffs filed interrogatories to be answered by the defendant. Interrogatory No. 17 asked if the defendant had an insurance policy covering liability for damage to property. Interrogatory No. 18 asked the name of the insurance company, who had possession of the policy, and the amount of policy limits for property damage. On February 19, 1970, the defendant filed answers to the interrogatories, but the answers objected to several of the interrogatories, including Nos. 17 and 18.

On May 27, 1970, at the request of the plaintiffs, the court ordered the defendant to answer within 10 days the interrogatories which had been objected to. The defendant filed answers to the interrogatories to which objection had been made on June 9, 1970. But interrogatories 17 and 18 were not answered. Instead, the defendant states, “this matter is still under investigation and an answer will be supplied within a reasonable length of time.” No answers to interrogatories were ever filed.

On April 1, 1971, the defendant filed a motion to dismiss the action for the reason that the plaintiffs had not complied with the 6-month notice provision of section 8 — 102 of the Local Governmental and Gov-, ernmental Employees Tort Immunity Act (Ill. Rev. Stat. 1965, ch. 85, §8 — 102). The court allowed the motion to dismiss on December 14, 1973. The plaintiffs have appealed from the order allowing the motion to dismiss.

As has been held in Fanio v. John W. Breslin Co., 51 Ill.2d 366, 282 N.E.2d 443, Housewright v. City of LaHarpe, 51 Ill.2d 357, 282 N.E.2d 437, and Crowe v. Doyle, 6 Ill.App.3d 1098, 287 N.E.2d 99, that the purchase of insurance by a municipality insuring against the liability asserted constitutes waiver of the notice requirement of the Tort Immunity Act (Ill. Rev. Stat. 1965, ch. 85, § 9 — 103). As indicated in the foregoing facts no notice of the occurrence which is the basis of the plaintiffs’ claim was given to the defendant within 6 months as required by statute and consequently plaintiffs’ claim would be barred unless the defendant’s liability was covered by insurance.

From the arguments of counsel both in their briefs and during oral argument the crucial issue in determining the propriety of the trial court’s action is the question of whether the defendant did or did not have liability insurance covering the loss. In this respect the record is most confusing. Both parties concede that if the defendant had waived its immunity by the purchase of insurance the complaint should not have been dismissed and conversely if no insurance had been purchased the complaint should have been dismissed.

Although the defendant argues that no adverse inferences or consequences should flow from its failure to answer the interrogatories it appears the trial court acted as if the defendant had not purchased insurance even though this fact is not clearly demonstrated from the record. The issue of whether defendant had or had not purchased insurance is a simple issue completely within the knowledge of the defendant. The failure of the record to settle this issue makes it impossible to determine whether the court properly ruled in favor of the defendant.

Accordingly, we remand this case to the circuit court of Henderson County initially for the limited purpose of determining whether or not the defendant had purchased insurance which was in effect at the times mentioned in the complaint as amended. If the court determines no such insurance had been purchased then the judgment of the circuit court of Henderson County will be affirmed. If, on the other hand, the court determines insurance had been purchased then its judgment will be reversed and further proceedings had.

Judgment affirmed in part, reversed in part and remanded with directions.

ALLOY, P. J., and DIXON, J., concur.


author: Mr. JUSTICE ALLOY

text:
    John Bender, Plaintiff-Appellant, v. Ehron Pfotenhauer, Defendant-Appellee.
    (No. 74-33;
    Third District
    July 31, 1974.

      Terrence Hegarty, of Chicago, for appellant.
    Ackman, McKnelly & Marek, of Kankakee (Robert Boyd and Richard Ackman, of counsel), for appellee.
   Mr. JUSTICE ALLOY

delivered the opinion of the court:

This is an appeal from an order of the Circuit Court of Kankakee County allowing a motion to dismiss the complaint filed in the action with prejudice for failure of plaintiff John Bender to appear for a deposition pursuant to court order.

It appears that a notice of discovery deposition was given to plaintiff’s attorney on May 18, 1973, for a discovery deposition of the plaintiff John Bender to be taken by defendant’s attorneys on May 30, 1973, at the office of defendant’s attorneys in Kankakee, Illinois. No one appeared for said deposition. There were no phone calls received by defendant’s attorneys with respect to the deposition. Thereafter, a pretrial conference was called and held by the trial court on June 19,1973. Although plaintiff had Chicago counsel, local counsel was not engaged as an attorney for plaintiff until the pretrial time. At the pretrial, both parties were ordered by the court to appear for depositions on July 19, 1973, at 9 A.M. at the office of one of the attorneys for the defendant at Kankakee, Illinois. On July 19, 1973, no one appeared on behalf of plaintiff nor was anyone called by plaintiff or his attorney nor was any excuse made for either the failure to appear or the failure to have someone call on the telephone. The cause had been continued for pretrial to August 20, 1973, by the trial court and on August 20, 1973, no one appeared for the plaintiff and no one called on behalf of the plaintiff even though plaintiff’s Chicago counsel was advised by August 17, 1973, that the local attorney was going to withdraw his appearance. On August 20, 1973, the trial court allowed a motion to dismiss plaintiffs complaint which was filed August 15, 1973, for failure of plaintiff to appear for the discovery deposition on July 19, 1973. Thereafter, the out-of-county counsel for plaintiff filed his petition to vacate the dismissal on September 18, 1973, and such motion was heard on September 24, 1973. Upon an explanation that there was confusion between local counsel and the office of out-of-county counsel, the court vacated the August 20,1973, dismissal of the case, reinstated the case and set October 24,1973, at 1:30 P.M. for the taking of the deposition of plaintiff. Such date was agreed to by plaintiff’s counsel. On October 23, 1973, the day before the deposition was to be taken at the offices of defendant’s attorneys, the attorney for plaintiff called defendant’s attorney’s office to confirm that the depositions were to proceed and that a court reporter had been secured. It was stated that defendant also would be present pursuant to notice given to the defendant.

Plaintiff’s attorney, at the hearing on the motion to dismiss, following the failure of plaintiff to appear at 1:30 for such deposition on October 24, 1973, stated that the attorney had arrived in Kankakee at 10:45 A.M. to attend the scheduled 1:30 deposition, and that he met his client and discussed the deposition and ate lunch. Plaintiff’s attorney stated that he and plaintiff went to the address of the defendant’s attorney’s office and found his correct new address and telephone number. Plaintiff’s attorney stated that the defendant’s attorney’s office did not answer either of two telephone calls and plaintiff and his attorney drove to the new office address where they found the front entrance locked and the office apparently not occupied at the time. The plaintiff’s attorney pounded on all the office doors, he stated, and received no response from anyone. The plaintiff advised his attorney that Kankakee businessmen take Wednesdays off. Plaintiff and his attorney waited until 1 P.M., convinced that the entire building was closed, and plaintiff’s attorney returned to Chicago. They did not wait until the 1:30 time set for the taking of the deposition. Apparently, the calls and the efforts to get attention at the office were all made during the period between 12 and 1 P.M.

At the hearing on defendant’s motion to dismiss held on November 5, 1973, for failure of plaintiff to appear at the taking of the deposition on October 24, 1973, the defense attorney and his secretary testified that plaintiff did not appear at 1:30 P.M. on October 24, 1973. The secretary testified that they had all taken their lunch between 12 and 1 P.M. and that it is normal for offices in Kankakee to be closed between 12 and 1 P.M. for lunch each day. The secretary for defendant’s attorney also stated that at 1 P.M. the offices were open and other secretaries were present in the office. The trial court, following the hearing, dismissed plaintiff’s complaint with prejudice. Plaintiff now contends that the trial court abused its discretion in dismissing plaintiff’s complaint wth prejudice under circumstances evidencing plaintiff’s willingness to comply with the discovery order.

Defendant’s counsel points out that under Supreme Court Rule 219 (Ill. Rev. Stat. 1973, ch. 110A, § 219) it is provided that if a party fails to comply with an order entered under the Rules, the court on motion may enter such orders as are just, including an order of dismissal of the other party’s suit with prejudice. Counsel for plaintiff contends that dismissal of plaintiff’s case was an inappropriate sanction when all factors are considered. They cite the case of Gillespie v. Norfolk and Wes tern Ry. Co., 103 Ill.App.2d 449, 454, where the court points out that “[s]ome consideration might also be given to the fact that * * * both attorneys for plaintiff, were not residents of the county seat. There is no circumstance to indicate that plaintiff, or plaintiff’s attorneys, were either refusing to furnish answers to the interrogatories or ignoring the request.” Plaintiff contends that fundamental fairness would indicate that plaintiff be allowed to proceed to a trial on the merits of the case and that a more appropriate sanction be fashioned to compensate defendant for his deposition expenses. It is suggested that although the imposition on defendant is regrettable, he could still be made whole by having plaintiff pay for the court reporter’s fee and to pay witness’ and other attorney’s fees to defendant for the time wasted and the “mistake” (as plaintiff characterized it), which caused the premature departure of plaintiff at the time the deposition was scheduled to be taken.

The trial court apparently felt that plaintiff did not discharge the burden of establishing by affidavit or otherwise that his failure to comply with the rules was warranted by extenuating circumstances or events (Schwartz v. Moats, 3 Ill.App.3d 596, 277 N.E.2d 529). It is recognized that the discretion of the trial court in matters such as are now presented is broad and that the dismissal followed a failure of plaintiff to pursue his obligations with respect to the taking of the deposition. It is also pointed out that the courts have determined that an order of a trial court dismissing an action under such circumstances should not be set aside unless the court of review finds that there was an abuse of discretion. In re Estate of Atwood, 97 Ill.App.2d 311, 240 N.E.2d 451.

While we are reluctant to approve a dismissal of an action as a consequence of failure to comply with court orders and rules, we are reminded by defense counsel that “[u]nder our system of representative litigation the general rule is that the client is bound by the acts and omissions of his lawyer-agent in the prosecution of a remedy.” Danforth v. Checker Taxi Co., 114 Ill.App.2d 471, 253 N.E.2d 114, 116.

In the cause before us, plaintiff failed to appear for a discovery deposition in May, with no reason given for such failure. It was shown that he failed to obey the court order entered on June 20, for a deposition on July 19, with no reason given for such failure. He also failed to appear for a pretrial conference on August 20 with no sound reason given. The court vacated the August 20 order of dismissal and set October 24, 1973, a time agreeable to plaintiff, as the time for the taking of the deposition. As indicated, neither plaintiff nor his counsel was present at the appointed time at 1:30 P.M. on that date.

On the basis of the record before us, therefore, we cannot say that the sanction of dismissal of the action of plaintiff is unreasonable and constitutes an abuse of discretion in view of the repeated failure of compliance with the orders of the court as shown in the record.

The order of the Circuit Court of Kankakee County is, therefore, affirmed.

Affirmed.

SCOTT, P. J., and DIXON, J., concur.


author: Mr. JUSTICE DIXON

text:
    Golden Seed Co., Inc., Plaintiff-Appellee, v. Funk Seeds International, Inc., Defendant-Appellant.
    (No. 74-66;
    Third District
    July 31, 1974.

      Robert Noe, of Bozeman, Patton & Noe, of Moline, for appellant.
    William Snyder, of Van Der Kamp & Crampton, of Rock Island, for appellee.
   Mr. JUSTICE DIXON

delivered the opinion of the court:

This is an interlocutory appeal, taken pursuant to Supreme Court Rule 307, from an order of the Circuit Court of Rock Island County, Illinois, which enjoined the defendant, Funk Seeds International, Inc., from proceeding with arbitration of a contract dispute between it and the plaintiff, Golden Seed Co., Inc.

The plaintiff, Golden, is in the business of producing, processing, and marketing hybrid seed corn, and the defendant, Funk, is in the business of producing, selling, and distributing foundation seed for the production of hybrid seed com.

Golden and Funk have for many years been members of the American Seed Trade Association, which has in its bylaws a provision for arbitration of disputes between its members. Section 2 of article XIII of the bylaws reads in part as follows: “Any controversial claim arising out of or relating to a contract or breach thereof involving business transactions between members of the American Seed Trade Association shall, unless otherwise specified, be settled by arbitration in accordance with the mies of the American Arbitration Association * #

On June 25,1971, Golden and Funk entered into a franchise agreement under which Funk was to supply foundation seed to Golden, which was to be used by Golden to grow seed corn for sale to farmers at retail as Funk hybrid seed corn. Their franchise agreement made no reference to arbitration as a means of settling disputes. It provided as follows: “(11) In the event of any default or failure by Associate [Golden] to perform any of the several covenants, agreements and promises of the Associate to the Company [Funk] hereunder, the Company shall have the right, without the necessity of election, to pursue and employ any and all remedies against the Association simultaneously, including remedies for specific performance and injunctive relief, notwithstanding any other provisions of this agreement.” It further provided: “(21) Notwithstanding anything else herein to the contrary, it is understood and agreed: * * * (c) * s * All remedies afforded by this contract are cumulative, that is, in addition to any other remedy provided therein or by law.”

In 1972 Golden elected to terminate the franchise agreement. A dispute thereafter arose concerning Funk’s obligation under that agreement to purchase seed corn which Golden had on hand. The parties being unable to resolve their dispute, Funk filed a demand for arbitration with the American Arbitration Association. Golden then commenced suit for damages and for an injunction against Funk’s continuing with the arbitration proceedings; a hearing was held on the prayer for an injunction, pursuant to section 2 of the Uniform Arbitration Act (Ill. Rev. Stat. 1973, ch. 10, § 102); the trial court granted the injunction; and this interlocutory appeal by Frink followed.

Funk takes the position that the bylaws of the seed trade association constitute a binding agreement to arbitrate disputes between the parties arising out of contracts between them, and that the franchise agreement did not change the pre-existing agreement to arbitrate. Golden’s position is that the bylaws are not a written contract for arbitration within the meaning of section 1 of the Uniform Arbitration Act (Ill. Rev. Stat. 1973, ch. 10, sec. 101), and that the franchise agreement granted the parties the right to seek appropriate relief from the courts in the event of a default. We must determine whether under the trade association’s bylaws and the subsequent franchise agreement the parties had a contractual obligation to arbitrate their dispute.

It has been held that the provisions of a voluntary association’s bylaws which require arbitration of disputes between members constitute a binding agreement on the part of its members to submit disputes to arbitration. (Pacaud v. Waite, 218 Ill. 138; Johnson v. Schuberth, 40 Ill. App.2d 467; 5 Am. Jur. 2d Arbitration and. Award §11 (1962).) However, an arbitration agreement may be revoked by mutual consent of the parties, both at common law and under the Uniform Act 5 Am. Jur. 2d Arbitration and Award §41 (1962), and the bylaws of the seed trade association appear to recognize this by requiring arbitration “unless otherwise specified.” We must therefore look to the franchise agreement to see whether its provisions supersede the agreement for arbitration.

The parties’ franchise agreement provides that Funk shall have the right to seek specific performance, injunctive relief, and “any other remedy provided * * * by law.” It does not say that Funk shall have any other remedy provided by law which it has not previously surrendered by entering into an agreement for arbitration. It does not say that Funk shall have any other remedy provided by law for the benefit of a party to an arbitration agreement. It gives no intimation that an action for damages is not to be considered a remedy provided by law, as the expression is used in this agreement. Rather, it employs language which would ordinarily be used to indicate that the parties shall have the right to pursue all remedies generally obtainable in a court of law. If arbitration of all disputes had been intended, the franchise agreement should have said so, and should not have left it to strained inference from language ordinarily being inclusive of all remedies provided by courts of law; and if the latter language had been thought inapplicable for these particular parties, both being members of the trade association, it should have been deleted from the franchise agreement form.

Furthermore, the parties appear to agree that whatever remedy or remedies are available to one are likewise available to the other of them. We therefore find that both Funk and Golden were given access to the courts by their franchise agreement, and so their prior agreement for arbitration became of no effect as to disputes arising under that franchise agreement.

For the reasons stated, the order of the Circuit Court of Rock Island County enjoining Funk from taking any further action in the arbitration proceedings is affirmed.

Order affirmed.

SCOTT, P. J., and STOUDER, J., concur.


author: Mr. JUSTICE CRAVEN Mr. JUSTICE TRAPP,

text:
    Linda Hinkle, a Minor, by Her Father and Next Friend, Dale Hinkle, et al., Plaintiffs-Appellees, v. Tri-State Transit, Inc., Defendant and Cross-Defendant-Appellee, et al.—(John Finfrock, Adm’r of the Estate of Steven M. Cooper, Deceased, Defendant-Cross-Plaintiff-Appellant.)
    (No. 11932;
    Fourth District
    July 31, 1974.

      TRAPP, J., dissenting.
    Phillips, Phebus, Tummelson & Bryan, of Urbana (Hurshal C. Tum-melson and Joseph W. Phebus, of counsel), for appellant.
    Charles L. Palmer, of Champaign (Franklin, Flynn & Palmer, of counsel), for Tri-State Transit, Inc.
    Philip C. Zimmerly and James M. Langan, both of Champaign, for Linda Hinkle.
   Mr. JUSTICE CRAVEN

delivered the opinion of the court:

Linda Hinkle and Patrick Cummins, plaintiffs, brought suit against John Finfrock, administrator of the estate of Steven M. Cooper, deceased, and Tri-State Transit, Inc., for personal injuries sustained in an auto and truck collision. Finfrock brought a crossclaim against Tri-State Transit for the wrongful death of Steven M. Cooper arising out of the same transaction. Jury verdicts were rendered in favor of plaintiffs against Finfrock and in favor of Tri-State Transit against plaintiffs. Also the jury found for Tri-State on Finfrock’s crossclaim. Finfrock appeals both judgments.

While on appeal, plaintiffs entered into a settlement with Finfrock and the judgment of the trial court against Finfrock stands unimpaired. We were notified of the settlement, and upon receipt of the notice, entered an order to show cause why the appeal between Finfrock and plaintiffs Hinkle and Cummins should not be dismissed because of that settlement. The parties complied by filing supplemental briefs which dealt with that issue and the status of the remaining litigants. In light of the aforementioned settlement, the issue herein is whether Finfrock’s appeal from the judgment in favor of Tri-State Transit against the estate of Steven M. Cooper is barred by the doctrine of collateral estoppel.

This litigation arises out of a collision that occurred between a vehicle driven by Steven M. Cooper and a truck owned and operated by TriState Transit, Inc. Steven M. Cooper and another individual were fatally injured as a result of the collision. The plaintiffs, passengers in the Cooper car, sustained serious injuries, and the driver of the Tri-State Transit vehicle was uninjured. Plaintiffs sued the Cooper estate and TriState Transit to recover for their injuries, and the Cooper estate cross-claimed against Tri-State Transit for wrongful death of Steven M. Cooper. Both actions were tried in the same proceedings. As stated above, in the cause of the plaintiffs against the Cooper estate and TriState Transit, the jury returned verdicts for plaintiffs against Cooper and for Tri-State Transit against plaintiffs, thus absolving the latter of any liability in that action. In the cause of Cooper against Tri-State Transit, the jury found for Tri-State Transit, and in so doing it answered a special interrogatory finding that the decedent, Steven M. Cooper, did not exercise ordinary care for his own safety at the time of the collision. © 1 The doctrine of collateral estoppel precludes parties and/or their privies from relitigating facts in a subsequent action which were specifically litigated and determined in a prior action. This doctrine applies although the cause of action may be different. In Lange v. Coca-Cola Bottling Co., 44 Ill.2d 73, 254 N.E.2d 467, the supreme court discussed the doctrine of collateral estoppel or the doctrine of estoppel by verdict. It noted:

“The governing principle was stated in Hoffman v. Hoffman, 330 Ill. 413, 418: ‘To operate as an estoppel by verdict it is absolutely necessary that there shall have been a finding of a specific fact in the former judgment or record that is material and controlling in that case and also material and controlling in the pending case. It must also conclusively appear that the matter of fact was so in issue that it was necessarily determined by the court rendering the judgment interposed as a bar by reason of such estoppel. If there is any uncertainty on the point that more than one distinct issue of fact is presented to the court the estoppel will not be applied, for the reason that the court may have decided upon one of the other issues of fact. [Citations.]’ ” 44 Ill.2d 73, 75.

In applying the doctrine, the balancing of two important policies result, to wit: a litigant shall not be deprived of an adequate day in court; however it is desirous to prevent repetitious litigation of what is essentially the same dispute. This dilemma was squarely addressed in Chas. Ind Co. v. Cecil B. Wood, Inc., 56 Ill.App.2d 30, 205 N.E.2d 786. The court there was confronted with a situation where the plaintiffs, motorist and passenger, in a prior action endeavored to impose liability for their injuries upon the subcontractor as well as the general contractor —who were engaged in making improvements to a street located in Rockford. In the same action, the general contractor, as one of its defenses, attempted to establish the negligence of the subcontractor. The jury returned a verdict for the plaintiffs against the general contractor. In a subsequent proceeding for indemnification against the subcontractor, the court found that the general contractor was foreclosed from now asserting that subcontractor was guilty of negligence. The court stated that:

“The threshold question raised by defendant is the applicability of the doctrine of estoppel by verdict. If a former judgment is raised as a complete bar against a second action, both as to those matters actually adjudicated in the first action and as to those matters which could have been raised therein, there must be, as between the actions, identity of parties, of subject matter and of cause of action. This is referred to as the doctrine of res judicata and is sometimes called estoppel by judgment. Where, as here, the parties are the same and the same subject matter is the basis for the action, but the claim or cause of action is different, the prior decision operates as an estoppel only as to those matters in issue or points controverted and is only conclusive as to those questions actually raised and determined therein. Smith v. Bishop, 26 Ill.2d 434, 436, 437, 187 N.E.2d 217 (1962); Hoffman v. Hoffman, 330 Ill. 413, 417, 161 N.E. 723 (1928). This is often called estoppel by verdict, the question here presented; it is but another branch of the doctrine of res judicata.” (56 Ill.App.2d 30, 36.)

The court found that the doctrine of collateral estoppel applies where an issue of fact between the codefendants was actually or necessarily litigated and determined in a prior action, or where some issue was determined in the original action which is an essential element of the cause of action arising between the codefendants.

The two actions were brought simultaneously and three judgments resulted. But, the two judgments originally appealed contained identical factual issues — was the decedent exercising due care for his own safety and that of his passengers. The parties to both actions were the same and all were in an adversary relationship. Lastly, there are now two final judgments on the merits: one against the Cooper estate in favor of plaintiffs, and a judgment absolving Tri-State of any liability as to plaintiffs. The former has been settled on appeal and the latter was never appealed. They are final. The import of these judgments is that the decedent was the proximate cause of the plaintiffs’ injuries, and that Tri-State Transit was not; therefore a fortiori the decedent’s negligence was the proximate cause of his own death and the injury of the plaintiffs. This conclusion is supported by special finding of the jury in the action now on appeal, that defendant was not exercising due care for his own safety. The fact that the verdicts in question arose out of one transaction and were brought forth in the same lawsuit underscores the fact that the same issue of negligence and contributory negligence has been adjudicated. We find that as to the Cooper estates claim, the dispute in question has been resolved by virtue of the settlement aforementioned.

Accordingly, in view of the settlement between the plaintiffs and the Cooper estate, that appeal should be, and the same is, dismissed. The judgment against Cooper and in favor of Tri-State Transit, Inc., is affirmed.

Affirmed.

SIMKINS, J., concurs.

Mr. JUSTICE TRAPP,

dissenting:

The judgments which are said to determine that Cooper was not exercising due care for his own safety were returned upon the admission of testimony which is seriously challenged upon review. If this court ultimately concluded that such evidence was inadmissible it would be necessary to reverse for prejudice and remand for a new trial.

Within the analogy of the Civil Practice Act, section 48 (Ill. Rev. Stat. 1973, ch. 110, par. 48(d)), no party has moved to dismiss the appeal in this court. Rather, the court sua sponte issued its rule to show cause why the remaining appeal should not be dismissed. I do not find any cases supporting the proposition that a court will act sua sponte to dismiss a pending appeal under the doctrine of res judicata or collateral estoppel.

Cases collected in 9 A.L.R.2d 984, at page 990, have held that a failure to raise the prior judgment may constitute a waiver. Comparably speaking, in the trial court the burden is upon the party who relies to raise the issue of res judicata or collateral estoppel. Fraley v. Boyd, 83 Ill.App. 2d 98, 226 N.E.2d 81; Kedzierski v. Kedzierski, 86 Ill.App.2d 264, 229 N.E.2d 919.

The rule of res judicata and its supplemental collateral estoppel is framed in terms that an issue which has been determined by judgment cannot again be litigated in a future action (Thomas v. Consolidated School District No. 429, 7 Ill.App.3d 45, 286 N.E.2d 536; Gillies v. Little Vermilion Special Drainage District, 401 Ill. 344, 81 N.E.2d 916) or that such judgment is a bar to a subsequent action. McCorkle v. McCorkle, 6 Ill.App.3d 1053, 287 N.E.2d 134, and Gudgel v. St. Louis Fire and Marine Insurance Company, 1 Ill.App.3d 765, 274 N.E.2d 597.

As the principal opinion notes, these causes of action were brought up on review contemporaneously and were submitted in this court as one appeal. Within the purpose of such rule, the cross-claimant has not, in fact, sought to relitigate in a future and subsequent action those issues which have been disposed of on the merits.