author: JUSTICE HOPF

text:
    EDWIN N. GREEN, Plaintiff-Appellant, v. THE FIRESTONE TIRE AND RUBBER CO., INC., et al., Defendants-Appellees.
    Second District
    Nos. 83—218, 83—235 cons.
    Opinion filed February 29, 1984.

      Gary V. Johnson and Wendell W. Clancy, both of Clancy, McGuirk & Hulce, of St. Charles, for appellant.
    Colin Smith, of Burke, Bosselman, Freivogel, Weaver, Glaves & Ryan, of Chicago, for appellee Firestone Tire & Rubber Co.
    J. Robert Geiman and Robert A. Seidel, both of Peterson, Ross, Schloerb & Seidel, of Chicago, for appellee Sensation Mower, Inc.
   JUSTICE HOPF

delivered the opinion of the court:

Plaintiff Edwin N. Green brought this action against Sensation Mower, Inc., and Firestone Tire and Rubber Company, Inc. (Firestone), alleging one count of breach of warranty and one count of negligence against each of the two corporations. Plaintiff sustained injuries while operating a lawnmower allegedly manufactured by Sensation Mower, Inc., and sold by McCornack Tire & Service, Inc., of St. Charles, Illinois. It is claimed that Sensation Corporation is a successor to Sensation Mower, Inc., and that Firestone is a successor to McCornack Tire. Sensation Corporation and Firestone filed motions for summary judgment which were granted. Plaintiff appeals.

On appeal plaintiff contends that the trial court erred in granting summary judgment for defendants. During oral argument plaintiff acknowledged that in count I of his complaint he was attempting to extend the theory of products liability to a negligence claim against a predecessor corporation. Plaintiff supplies us with no authority supporting such a theory, and we know of none.

Viewed from another perspective, the central issue raised on appeal concerns the liability of successor corporations under the case of Hernandez v. Johnson Press Corp. (1979), 70 Ill. App. 3d 664, 388 N.E.2d 778, where plaintiff was injured by a punch press and brought an action against the corporation which manufactured the press and its successor corporation. The Hernandez court set forth the general rule in Illinois regarding the liability of a successor corporation for debts and liabilities of the predecessor corporation. Except for certain specified circumstances, a successor corporation is not liable for the debts and liabilities of the transferor. (70 Ill. App. 3d 664, 666, 388 N.E.2d 778, 779.) In the case at bar the trial court held that the defendants, which both occupied the position of successor corporations, did not fall within the exceptions set forth by Hernandez. On appeal, plaintiff argued that the trial court erred in granting summary judgments because the facts presented in the instant case fall within those exceptions. In the alternative, plaintiff urges that the Illinois law relied on by the trial court is incorrect, and that there is a trend in other States which establishes a strict liability rationale. Plaintiff urges the time has arrived for Illinois to follow this new theory.

The facts of this case show that in June or July of 1969, the plaintiff’s father-in-law purchased a lawnmower alleged to have been manufactured by Sensation Mower, Inc. The mower was purchased from McCornack Tire & Service, Inc., in St. Charles. Later that year, on September 14, Firestone purchased the assets of McCornack Tire & Service, Inc. Shortly after the purchase plaintiff’s father-in-law died and plaintiff became the owner of the lawnmower. Over the course of the next 10 years he used the lawnmower on a regular basis until the time of the accident.

On May 25, 1980, plaintiff was injured while mowing his yard. He was pulling the mower with him as he backed up to trim an area of grass. He backed into a tree stump, fell backwards, and as he fell his foot came in contact with the blade of the lawnmower.

Ownership of the company which manufactured plaintiff’s lawnmower was transferred a number of times between the date of the sale and the date of the injury. Plaintiff’s complaint named both Sensation Mower, Inc., and Firestone as party-defendants. Sensation Mower, Inc., was in existence prior to 1968 and manufactured, among other things, lawnmowers. In 1968 Sensation Mower, Inc., sold certain of its assets to Sensation Manufacturing Company. The sales agreement is not a part of the record in the case at bar, and the precise date of sale is unknown. Subsequently, on August 1, 1972, Sensation Manufacturing Company entered into an agreement to sell the assets of that corporation to Sidells Warehouse of Denver, Inc., a Nebraska corporation, nominee for the Sensation Corporation, a Nebraska corporation to be formed. The agreement became effective on August 1, 1972. The articles of incorporation were subsequently filed with the Nebraska Secretary of State. The new company came to be known as Sensation, Inc.

The vice-president of Sensation Corporation, Albert Schinker, filed an affidavit in support of Sensation’s motion for summary judgment. In that affidavit Schinker indicated the lawnmower identified in the complaint was manufactured in 1968 or 1969 by either Sensation Mower, Inc., or by Sensation Manufacturing Company. He did not know which company made the mower because the precise date of manufacture had not been established. He indicated that the production of that model of that lawnmower was discontinued in 1969 and Sensation Corporation did not come into existence until 1972. Therefore it was urged Sensation was not in any way involved with the design, manufacture or sale of the lawnmower identified in the complaint. The affidavit also set forth certain provisions of the agreement for the sale of assets entered into by Sidells Warehouse of Denver, Inc., a Nebraska corporation, as nominee for the Sensation Corporation, the corporation that was formed. The portion of that sales agreement which distributed the debts and liabilities of the corporation provided that certain responsibilities regarding liability insurance were made by each party. This provision is quoted in the first issue discussed below. The agreement also indicated that the sale of assets was a cash sale rather than transfer of stock. The Schinker affidavit also stated no present or former stockholders, directors, or officers of Sensation, Inc., had ever been stockholders, directors of officers of Sensation Mower, Inc., or of Sensation Manufacturing Company.

At the hearing on Sensation, Inc.’s motion for summary judgment plaintiff contended that defendant-corporation was a “mere continuation of its predecessor corporation, Sensation Manufacturing.” After arguments the trial court decided that there was no genuine issue of fact presented in the briefs or affidavits. The court found that under the Hernandez case there was no showing in the facts presented to show an assumption of the predecessor corporation’s debts by the successor corporation. (Hernandez v. Johnson Press Corp. (1979), 70 Ill. App. 3d 664, 388 N.E.2d 778.) The court held that the sales agreement did not provide for an assumption of debts, and because none of the exceptions set forth in Hernandez were present, it granted the motion for summary judgment.

Defendant, Firestone Tire & Rubber Company, Inc., was granted summary judgment for largely the same reasons as those just discussed. The lawnmower in issue was originally purchased from Mc-Cornack Tire & Service, Inc. (McCornack), who was not named as a defendant. Approximately three months after the purchase of the lawnmower, on September 14, 1969, McCornack was sold to Firestone. That transaction was made pursuant to a sales agreement which provided:

“5. [McCornack] will assume full liability and pay any and all taxes, unemployment compensation contributions, workmen’s compensation claims or premiums and all other obligations of whatsoever kind or nature arising from the operation of the Company’s business prior to the effective date. It is understood that personal property taxes assessed prior to the effective date of this Agreement shall be paid by the Company and are not to be prorated.”

The deposition of Warren Kammerer, who, along with Robert Mc-Cornack, was one of the owners of McCornack, indicated that the sale of McCornack Tire was a cash sale. Robert McCornack had no involvement in the new Firestone store. Warren Kammerer was rehired as store manager and became president and 49% owner of Firestone. Firestone retained ownership of the rest of the shares of the corporation. Firestone contends that the operation of the store differs greatly from what it was as McCornack Tire. The new business was required to follow the procedures and policies of Firestone and report to Firestone’s zone office. Although some of the original employees of Mc-Cornack Tire were retained, not all were rehired.

Most important is the fact that the Firestone store sold different products from McCornack Tire. Specifically the new business was directed by Firestone to not sell Sensation products, which included their line of lawnmowers.

After the hearing on Firestone’s motion for summary judgment the trial court noted that there was no genuine issue of fact, that Firestone was the purchaser of the assets of McCornack Tire, and that the sale date was September 14, 1969. The court noted that it was a cash sale and no exchange of stock was made. Plaintiff made no counteraffidavit of this allegation and although plaintiff sought to bring the case within the exceptions of the Hernandez case (Hernandez v. Johnson Press Corp. (1979), 70 Ill. App. 3d 664, 388 N.E.2d 778), the court held the facts were not applicable to those exceptions. The court noted that although the mower in issue had been taken into the Firestone store for servicing there was no structural or mechanical failure involved and therefore there was no showing of negligence on the part of defendant. Thus, it granted Firestone’s motion for summary judgment as well as Sensation, Inc.’s.

Plaintiff’s initial contention on appeal is that his case falls within the exceptions to the general rule that successor corporations are not liable for the liabilities of their predecessor.

The general rule in Illinois has been that when a company sells its assets to another company, the new company is not liable for the debts and liabilities of the old company merely by reason of its succession. Alexander v. State Savings Bank & Trust Co. (1935), 281 Ill. App. 88, 96.

However, there are exceptions to the nonliability rule. Several recognized exceptions have been set forth:

“(1) where there is an express or implied agreement of assumption; (2) where the transaction amounts to a consolidation or merger of the purchaser or seller corporation; (3) where the purchaser is merely a continuation of the seller; or (4) where the transaction is for the fraudulent purpose of escaping liability for the seller’s obligations. (Leannais v. Cincinnati, Inc. (7th Cir. 1977), 565 F.2d 437; Travis v. Harris Corp. (7th Cir. 1977), 565 F.2d 443.) Exception (2) is recognized in Illinois (Business Corporation Act, Ill. Rev. Stat. 1977, ch. 32, par. 157.69(e)), and has been interpreted to include a de facto merger. (See Abbott v. Fluid Power Pump Co. (1969), 112 Ill. App. 2d 303, 251 N.E.2d 93.)” Hernandez v. Johnson Press Corp. (1979), 70 Ill. App. 3d 664, 667, 388 N.E.2d 778, 780.

Plaintiff urges that the first of these exceptions is applicable here. He argues that the language in the sales agreement between Sensation Manufacturing and Sensation, Inc. (as quoted below), provides that buyer agreed to include seller as a named assured for a period of five years from the closing date. Plaintiff urges that this was an assumption, either express or implied, by Sensation Corporation of its predecessor’s liability. The clause in issue provides:

“C. Seller covenants that it has had in effect a products liability insurance policy covering liabilities for defective products sold through Closing Date. Thereafter and continuing for a period of five (5) years from Closing Date, Buyer agrees to include Seller as an additional named assured in all products liability insurance policies and to furnish Seller with copies of such policies. Should adding Seller as additional insured result in additional cost to Buyer, Seller agrees to pay such additional cost.”

This language indicates that Sensation Corporation, the buyer, agreed to include Sensation Manufacturing as named assured after the closing date. However, there is a difference between agreeing to include a predecessor corporation as a named assured and agreeing to assume the liabilities of that corporation. It could be argued that the seller wanted to have liability insurance maintained in its name expressly because buyer was not assuming liability.

In any event, Sensation Corporation urges that the quoted language should be construed to mean that it was Sensation Manufacturing that agreed to provide insurance for products sold up until the closing date. Because the product sold, the lawnmower, was sold prior to that date, Sensation Manufacturing, not the defendant Sensation Corporation, assumed liability. Factually, this argument is on solid ground. Thus, we believe the trial court was correct in ruling there was no assumption of liability or genuine issue as to a material fact on this point.

Plaintiff next contends that Sensation Corporation is liable under the third exception discussed in Hernandez, which can make a successor corporation liable “where the purchaser is merely a continuation of the seller ***.” (Hernandez v. Johnson Press Corp. (1979), 70 Ill. App. 3d 664, 667, 388 N.E.2d 778, 780.) Here, plaintiff argues, the same name, land, inventory and type of manufactured product were continued from the predecessor corporation to Sensation Corporation. However, in order to find a merger exception to the rule of nonliability, there must be continuity of shareholders. People ex rel. Donahue v. Perkins & Will Architects, Inc. (1980), 90 Ill. App. 3d 349, 352-53, 413 N.E.2d 29; Gonzalez v. Rock Wool Engineering & Equipment Co. (1983), 117 Ill. App. 3d 435, 453 N.E.2d 792.

Plaintiff argues that the merger exception differs from the continuation exception described in Hernandez, but the two exceptions are inseparable. Further, plaintiff’s reliance on Cyr v. B. Offen & Co. (1st Cir. 1974), 501 F.2d 1145, 1154, is of little assistance because, absent continuity of stock ownership, a finding of continuation is not warranted. (People ex rel. Donahue v. Perkins & Will Architects, Inc. (1980), 90 Ill. App. 3d 349, 353-54, 413 N.E.2d 29.) For these reasons, the trial court was correct in finding the continuation exception to Hernandez was inapplicable. Hernandez v. Johnson Press Corp. (1979), 70 Ill. App. 3d 664, 667, 388 N.E.2d 778, 780.

The next issue raised by plaintiff on appeal involves the Hernandez exceptions as they apply to Firestone. Here, plaintiff argues, the facts surrounding the sale of McCornack Tire to Firestone show a de facto merger between successor and predecessor corporations. Secondly, plaintiff argues, Firestone is a mere continuation of its predecessor.

In determining whether there was a defacto merger between corporations the Hernandez court stated that if there are no facts indicating “continuity of management, personnel, physical location, assets and general business operations *** [or] continuity of shareholders or an exchange of stock” (Hernandez v. Johnson Press Corp. (1979), 70 Ill. App. 3d 664, 667, 388 N.E.2d 778, 780), no defacto merger exists.

Management of the corporation did change when Firestone purchased McCornack Tire. Robert McCornack, who had been co-owner and co-manager of the business, had no involvement in the new business. The other co-owner and co-manager, Warren Kammerer, stayed on, but was responsible to the Firestone zone office. Thus, it appears there was some disruption in the management. With regard to business operations, it should be noted that when Firestone assumed control, the business could no longer sell Sensation mowers.

The transaction failed to meet the second test for a de facto merger described in Hernandez. It requires “a continuity of shareholders which results from the purchasing corporation paying for the acquired assets with shares of its own stock, this stock ultimately coming to be held by the shareholders of the seller corporation so that they become a constituent part of the purchasing corporation.” Hernandez v. Johnson Press Corp. (1979), 70 Ill. App. 3d 664, 667, 388 N.E.2d 778, 780.

In the McCornack Tire to Firestone sale, there was no payment of the required assets with shares of Firestone stock. Rather it was a cash sale. Warren Kammerer came into possession of Firestone stock by virtue of an employee stock participation plan. The absence of a continuity of shareholders has been held to be a sufficient basis to defeat a finding of de facto merger. (Nguyen v. Johnson Machine & Press Corp. (1982), 104 Ill. App. 3d 1141, 1148, 433 N.E.2d 1104, 1109-10.) The trial court found there was no exchange of stock which would bring the transaction under the merger exception. Nguyen supports that decision. Applying the principles of Hernandez v. Johnson Press Corp. (1979), 70 Ill. App. 3d 664, 388 N.E.2d 778, to the facts of the case at bar, we do not believe Firestone was a continuation of McCornack Tire such that it is liable for the latter’s alleged torts.

Plaintiff’s final contention is that the application of the reasoning set forth in Hernandez makes it very difficult to hold a successor corporation liable for the torts of its predecessor, and that this can ere-ate a harsh result. Plaintiff urges that a products liability view of corporate mergers, rather than a corporate law view, is the more enlightened approach.

Plaintiff discusses a Michigan case that adopted the product liabilities approach, Turner v. Bituminous Casualty Co. (1976), 397 Mich. 406, 244 N.W.2d 873. The Turner court recognized that strict products liability was intended to put the burden for the cost of liability on those who could best cushion the impact of the liability. Thus, to impose liability on a successor corporation was a preferred alternative to leaving a plaintiff without a remedy. Turner would substantially lessen the requirements for proof of a de facto merger. Although there is some equity to cases which follow the “product line” approach (see Ray v. Alad Corp. (1977), 19 Cal. 3d 22, 560 P.2d 3, 136 Cal. Rptr. 574), these cases have not been followed in Illinois.

Illinois courts have not followed the strict liability approach because it could place the burden on one who did not place an injury causing product in the stream of commerce, thereby putting the burden on one who did not create the risk of harm. Domine v. Fulton Iron Works (1979), 76 Ill. App. 3d 253, 395 N.E.2d 19.

This same policy argument was raised in the recent case of Gonzalez v. Rock Wool Engineering & Equipment Co. (1983), 117 Ill. App. 3d 435, 440, 453 N.E.2d 792, where the court refused to adopt the “product line” approach to successor liability, noting that one who has done nothing to place a product in the stream of commerce is outside the producing and marketing chain. The court found no liability for a successor corporation, despite the fact that the successor had continued its predecessor’s product line.

In Nguyen v. Johnson Machine & Press Corp. (1982), 104 Ill. App. 3d 1141, 1147, 433 N.E.2d 1104, the court found that one who has done nothing to create a risk of injury cannot usually be burdened with the duty of preventing that injury. However, the court noted, if a successor corporation learns of a defect in its predecessor’s product, it may have a duty to warn of those defects. While this is a softened approach to the situation, the Nguyen court balanced the conflicting interests of corporate law with strict liability principles and found no sufficient justification for changing basic principles of corporate law. The court stressed the importance of the requirement that there be a continuity of shareholders, for without that, it would not be “just to require the successor corporation to assume the liabilities of the predecessor when it has already paid a substantial price for the assets of the predecessor.” (104 Ill. App. 3d 1141, 1149, 433 N.E.2d 1104.) The court also mentioned that a change in the law in this area should come from the legislature. 104 Ill. App. 3d 1141, 1151, 433 N.E.2d 1104.

Thus, while it is clear that the courts have been struggling with this issue (see Freeman v. White Way Sign & Maintenance Co. (1980), 82 Ill. App. 3d 884, 403 N.E.2d 495; People ex rel. Donahue v. Perkins & Will Architects, Inc. (1980), 90 Ill. App. 3d 349, 413 N.E.2d 29; Barron v. Kane & Roach, Inc. (1979), 79 Ill. App. 3d 44, 398 N.E.2d 244), none have adopted the strict product liability approach. We do not believe the circumstances presented here should lead to a different conclusion. Therefore the trial court properly found the facts presented did not fall within the exceptions to the general rule of nonliability of a successor corporation.

For the reasons stated, we hold that the trial court did not err in dismissing plaintiff's complaint.

The circuit court of Kane County is affirmed.

Affirmed.

SEIDENFELD, P.J., and VAN DEUSEN, J„ concur.


source: Caselaw Access Project

author: JUSTICE MILLER

license: Public Domain

text:
      In re Marriage of CHARLES RUSSELL SMITH, Petitioner-Appellant and Cross-Appellee, and CAROL JO SMITH, Respondent-Appellee and Cross-Appellant.
    Fourth District
    No. 4—83—0230
    Opinion filed January 19, 1984.
    Rehearing denied April 3, 1984.

      I. J. Feuer, of Springfield, for appellant.

      Richard T. Mitchell, of Jacksonville, for appellee.
   JUSTICE MILLER

delivered the opinion of the court:

Charles and Carol Smith separately appeal several of the financial decisions that the circuit court made in dissolving their marriage, which lasted 11 years and produced two children. The Smiths were married in 1971; a daughter was born in 1974, and a son was born in 1975. The marriage was dissolved April 1, 1982. Charles and Carol are in their thirties.

Charles farms in partnership with his father, Roy. In the farming partnership Charles and his father own and operate a 160-acre farm, where they cultivate crops and raise livestock. In addition to this, the partners cultivate 350 other acres. Income and expenses are shared equally. From 1977 to 1980, Charles’ income ranged between $30,000 and $11,000; in 1981 he lost about $9,000. These amounts include various tax credits and capital gains in addition to income derived from the farming operations. Charles calculated that his annual living expenses were about $14,300.

Carol is a registered nurse and works full time at a hospital in Jacksonville. She worked throughout the marriage except when she took maternity leave. At the time of the property hearing — September 1982 — her take-home pay was $450 every other week, and her gross pay was $625. She had no large assets or liabilities. She listed about $15,700 in annual expenses for her and the two children.

The circuit court found that the Smiths’ wedding rings were their only items of nonmarital property and assigned them accordingly. The Smiths’ marital property was concentrated in the farm and in the usual articles of domestic life. The circuit court awarded each spouse about $3,200 worth of household goods and about $5,500 worth of vehicles. Charles was awarded his two life insurance policies, which together had a cash surrender value of about $2,400 at that time. All the rest of the marital property comprised Charles’ interest in the farm and share of the partnership assets and was awarded to him. The circuit court assigned the farm a value of $382,950, exclusive of growing crops, so Charles’ half interest was worth $191,475. His farm machinery was worth $14,600. His share of the hogs and cattle on hand was worth about $110,000, and he had about $1,200 in a miscellaneous farm account. Charles was ordered to pay Carol $5,000 a year for six years, a total of $30,000, with interest, in lieu of marital property.

The circuit court assigned to Charles liabilities of $390,000, almost all of which were related to the farm and partnership, and freed Carol from any responsibility for them.

The parties do not dispute the circuit court’s valuation of their assets and liabilities, though Charles correctly points out that the assets he received were worth $330,000, $10,000 less than the sum calculated by the court. Under the circumstances, the difference is insignificant.

Carol was awarded custody of the two children, and Charles was ordered to pay $200 per month per child for support, reduced by half during the four weeks out of every year they are to spend with him on extended visitation. The court did not award maintenance and ordered each spouse to pay his or her own attorney fees.

PROPERTY AND MAINTENANCE

Charles, in his appeal, argues that the circuit judge awarded Carol an excessive amount of money in lieu of marital property and should have entered an order barring her from obtaining maintenance in the future. Carol, in her cross-appeal, argues that the circuit judge erred in denying her maintenance: in ruling on Charles’ post-judgment motion the court struck its original award of $100 per month.

A division of property will be affirmed unless it represents an abuse of discretion. (In re Marriage of Aschwanden (1980), 82 Ill. 2d 31, 411 N.E.2d 238.) Here, the circuit judge was aware that his division of the marital assets and debts was leaving Charles with a negative net worth but believed that the numerals did not accurately portray the underlying facts. The circuit judge referred to Roy Smith, Charles’ father and partner, as Charles’ personal banker. The court understood that the relationship between Roy and Charles is not the traditional one of creditor and debtor, for father and son are partners in a family enterprise. The circuit judge also believed that Roy and Charles had an informal understanding that Charles would eventually own the entire farm through either gift or devise. The record does not contain direct evidence of this intention, though one could perhaps infer it from the family’s circumstances.

Most important, the circuit judge thought that Charles would earn more money than Carol but that none of the marital assets that were related to the farm could be awarded to her practicably. Given the duration of the marriage and the small amount of marital property assigned to Carol, awarding her a total of $30,000 in cash in lieu of property was appropriate. Although Charles is responsible for all the marital debts, he also has the great bulk of the marital property. The farm debts and assets should remain in one person. The circuit court did not abuse its discretion in awarding Carol $30,000 in lieu of property and in making the award payable in installments. In re Marriage of Hellwig (1981), 100 Ill. App. 3d 452, 426 N.E.2d 1087.

In making this award the circuit court’s order said, “Petitioner shall pay Respondent cash in lieu of an award of marital property the sum of Thirty Thousand and No/100 (30,000.00) Dollars payable in six (6) equal annual installments of Five Thousand and No/100 ($5,000.00) Dollars each beginning January 10, 1983, with interest thereon at the rate applicable to money judgments.” Charles argues that the order is ambiguous and asks whether he must pay interest on the entire unpaid balance — which he believes would be unfair — or only on payments that are overdue. We construe the order as imposing interest on the unpaid balance; Charles may add the interest for each installment to that installment as it comes due. This will compensate Carol for the delayed use of those sums; it is an appropriate price for Charles to pay for the benefit of an installment rather than lump-sum method of payment.

Carol argues that the circuit court’s original award to her of $100 per month in maintenance should be reinstated. In ruling on Charles’ post-judgment motion the circuit judge vacated that award because he believed that Carol herself was responsible for her lack of job security; her job insecurity was one of the reasons why the court initially awarded maintenance.

Maintenance should be awarded only when the spouse requesting it lacks sufficient assets and income to provide for his or her needs. (Ill. Rev. Stat. 1981, ch. 40, par. 504(a).) Carol’s full-time though temporary employment and the five-year award of cash make maintenance unnecessary. The circuit court did not abuse its discretion in denying Carol maintenance.

Finally, Charles argues that the circuit court should have entered an order barring Carol from obtaining maintenance in the future. In In re Marriage of Edelstein (1980), 82 Ill. App. 3d 574, 403 N.E.2d 323, a spouse was denied maintenance and barred from obtaining it in the future. We do not see either the necessity or significance of entering a similar order here. If an initial denial of maintenance is later modifiable, then, absent the parties’ prior agreement to the contrary, an order foreclosing it in the future would also be modifiable.

CHILD SUPPORT

Charles argues that the amount he must pay for support of the two children — $200 per month per child — is excessive. This amount is reduced by half for the period when the children are with him on extended visitation. Carol argues against that reduction.

The amount awarded for child support is reserved to the circuit judge’s discretion. (In re Marriage of Rizzo (1981), 95 Ill. App. 3d 636, 420 N.E.2d 555.) Here, the court thoroughly considered the parties’ separate financial circumstances and the standard of living that the children would have enjoyed had their parents’ marriage stayed intact. The court’s result is not an abuse of discretion.

Carol argues in her cross-appeal that the circuit court erred in reducing the amount of support in half during the yearly four-week period of Charles’ extended visitation. The court made this reduction in ruling on Charles’ post-judgment motion. The reduction is reasonable and appropriate, for Carol will not be bearing the children’s day-to-day expenses during that part of the year.

ATTORNEY FEES

Carol argues that Charles should have been ordered to pay her attorney fees, which were about $3,000. Charles has moved to dismiss this part of the cross-appeal as untimely. Unlike the two other issues Carol raises in her cross-appeal, the attorney fees question was determined by the circuit court’s judgment, entered January 4, 1983, and does not arise from the disposition of the one post-judgment motion, Charles’, on March 16, 1983. The appeal and cross-appeal were filed March 29 and April 7.

The motion to dismiss this part of the cross-appeal was taken with the case, and we now deny it. The supreme court’s recent opinion in In re Marriage of Uphoff (1983), 99 Ill. 2d 90, establishes that the time for appealing or cross-appealing did not begrh to run until the circuit court’s disposition of Charles’ post-judgment motion.

The decision whether to allow one spouse to recover his or her attorney fees from the other spouse is reserved to the circuit court’s discretion. (Hofmann v. Hofmann (1983), 94 Ill. 2d 205, 446 N.E.2d 499.) That discretion was not abused here. Charles’ financial circumstances are not so much better than Carol’s that he should be required to discharge this additional expense.

Affirmed.

TRAPP and GREEN, JJ., concur.


author: PRESIDING JUSTICE SEIDENFELD

text:
    CANDLEWICK LAKE UTILITIES COMPANY, Appellant, v. ILLINOIS COMMERCE COMMISSION, Appellee (Norman K. Sanders et al., Appellees-Intervenors).
    Second District
    No. 82—1012
    Opinion filed December 27, 1983.
    Rehearing denied January 26, 1984.

      Michael J. Ventrelle and David G. Taylor, Jr., both of Elmhurst, for appellant.
    Neil F. Hartigan, Attorney General, of Springfield (Hercules F. Bolos and Kathleen Nolan, Assistant Attorneys General, of counsel), for appellee Illinois Commerce Commission.
    William D. Serwer and Terry F. Moritz, both of Goldberg & Kohn, of Chicago, and Curtis R. Tobin, of Johnson, Tobin & Ramon, of Belvidere, for appellees Norman K. Sanders and Candlewick Lake Association, Inc.
   PRESIDING JUSTICE SEIDENFELD

delivered the opinion of the court:

Candlewick Lake Utilities Company, a public utility company which furnishes water and sewer services to the Candlewick Lake Subdivision in Boone County, appeals from the rate order of the Illinois Commerce Commission and from the affirming order of the circuit court. Norman K. Sanders and Candlewick Lake Association, Inc., intervenors, also appear as appellees.

The developer of the subdivision was a partnership consisting of W. L. Belvidere and U. S. Financial Northwest. The developer originally owned the utility but at some time unspecified in the record, the utility plant and its facilities were transferred to W. L. Belvidere. Belvidere organized the present utility corporation, the entire stock of which is owned by W. L. Belvidere, Inc. All of the 2450 lots in the subdivision have been sold by the developer. As of the end of the test year, 1980, slightly more than 100 customers were connected to both the water and sewer system (user customers), with service available to the remaining lot owners (availability customers). The water plant has a capacity of 600 customers and is designed to expand as more of the availability customers make connection to the system. The sewer plant has a capacity of 300 customers and is designed to expand to serve the remaining lots.

Under rates in effect prior to the rate orders which are subject to this appeal, and in effect since 1974, both availability and user customers were charged $4 per month for water service and $5 per month for sewer services.

On December 24, 1980, the utility filed revised rate schedules seeking a general increase in water and sewer rates, and the Commission set hearings. The utility requested an increase to produce an additional revenue of $63,591 for water services and additional revenues of $294,845 for sewer services.

Following the hearings the Commission entered an order in which it determined that the utility was entitled to receive a 16% rate of return on that portion of its capital that was fully utilized and no return on that portion which was not, resulting in a 4.37% average combined return on common equity capital (original cost rate base) and a return of 3.1% on fair value rate base. The order also made some changes in the monthly charges and the connection charges, disapproved certain expenses claimed by the utility and ordered the utility to institute various steps to improve its quality of service.

The utility filed a petition for rehearing. In the order resulting from the rehearing the Commission reaffirmed that the rate of return granted in the original order, adjusted to reflect certain corrections, would produce a fair return on fair value rate base. The adjustments resulted in an increase in the rate of return to 4.96% on original cost rate base and 3.67% on fair value rate base. Certain changes were also made in monthly charges allowable. The increase approved by the Commission would generate approximately $84,000.

Upon judicial review in the circuit court the orders of the Commission were affirmed in all aspects.

I

The utility first contends that the Commission orders do not allow it a just and reasonable return on its fair value rate base.

Under the provisions of the Public Utilities Act, the Commission is empowered “to ascertain the value of the property of every public utility *** and every fact which in its judgment may or does have any bearing on such value.” (Ill. Rev. Stat. 1981, ch. 111%, par. 30.) The statute provides that “[a]ll rates or other charges *** shall be just and reasonable” (Ill. Rev. Stat. 1981, ch. 111%, par. 32), that the Commission shall establish rates “which it shall find to be just and reasonable” (Ill. Rev. Stat. 1981, ch. 111%, par. 36), that “[t]he findings and conclusions of the Commission on questions of fact shall be held prima facie to be true and as found by the Commission,” and that its order or decision “shall not be set aside unless it clearly appears that the finding of the Commission was against the manifest weight of the evidence ***.” Ill. Rev. Stat. 1981, ch. 111⅔, par. 72.

The standards for judicial review of the Commission’s orders have been well established. Reviewing courts are “empowered only to consider whether the Commission has acted within the scope of its authority, whether any constitutional right has been infringed, and whether its findings are founded on the evidence.” (Cerro Copper Products v. Illinois Commerce Com. (1980), 83 Ill. 2d 364, 370.) Generally, deference is given to the expertise of the Commission which is presumed to have acted correctly unless its findings clearly are contrary to the manifest weight of the evidence. (83 Ill. 2d 364, 370-71.) “[T]he determination of rates is not a matter of formulas but one of sound business judgment.” Villages of Milford v. Illinois Commerce Com. (1960), 20 Ill. 2d 556, 561.

The utility is entitled to receive a reasonable return on the present fair value rate base of its property. (Cerro Copper Products v. Illinois Commerce Com. (1980), 83 Ill. 2d 364, 369; Union Electric Co. v. Illinois Commerce Com. (1979), 77 Ill. 2d 364, 379.) The rate must be just and reasonable, “ '*** both to the public and to the utility.’ ” (Produce Terminal Corp. v. Illinois Commerce Com. ex rel. Peoples Gas Light & Coke Co. (1953), 414 Ill. 582, 590.) It has been recognized that “[t]he fundamental purpose of providing a particular rate schedule is to generate a rate of return which the Commission has approved as just and reasonable and which will enable the utility to continue operation at an acceptable level of operating income.” Cerro Copper Products v. Illinois Commerce Com. (1980), 83 Ill. 2d 364, 371.

The primary contention of the utility is that the Commission erred in its method of computing the rate of return in: (1) finding that the utility’s plant is not fully utilized, (2) reducing the rate of return from 16% to 4.96% (return on original cost rate base) or 3.67% (return on fair value rate base), and (3) calculating the utility’s rate of return using the original cost rate base rather than the fair value rate base. The Commission responds that it determined a reasonable return on the fair value of the utility property by considering all of the evidence and all of the factors listed in its order, and that its decision has a substantial foundation in the evidence.

The Commission’s findings of the reasonable rate of return, as adjusted on rehearing, in substance were that 31% of the utility’s total facilities “provide actual water and sewer services to customers”; that, although 16% “would be a fair rate of return if [the utility] was a more fully developed utility,” it should receive 16% only on the 31% of its total capitalization actually used and none on the remainder; that this would produce a combined rate of 4.96% on the original cost or approximately 3.67% on the fair value rate base. The original cost rate base was found to be $1,694,834; fair value rate base was found to be $2,292,947. The fair value rate base was calculated by taking 60% of the original cost, 40% of the reproduction cost and adding the figures together.

Section 36 of the Public Utilities Act provides that rates to be “just and reasonable” must provide “*** a reasonable return upon the value of [the] utility’s property used and useful in rendering its service to the public ***.” (Emphasis added.) (Ill. Rev. Stat. 1981, ch. 111⅔, par. 36.) The Commission found that all of the utility’s property was “used and useful.” It argues, however, that “used and useful” applies to the rate base and not to the rate of return; thus, that the rate of return must only be just and reasonable considering the part of the utility’s property which is actually used. The Commission acknowledges that it is using a “novel theory” but argues that the ultimate result reached was proper, considering that it would be unfair to require present customers to pay a full return on an investment which has not reached its full potential, thus shifting the risk of the stockholders’ investment to the ratepayers “merely because there is no immediate fulfillment of the expectations of the utility investors.”

In determining a reasonable rate of return there are many factors to consider, including “[t]he fair value of the utility’s property, the existing capital-formation structure, the proposed financing for any construction programs, original cost rate base, operating expenses, revenue and income, and the cost of providing *** service to the various classifications of consumers.” Cerro Copper Products v. Illinois Commerce Com. (1980), 83 Ill. 2d 364, 371.

We are not directly dealing with the issue of whether the combined rate is in itself confiscatory. The significant issue is the application of a zero rate of return to a substantial part of the property of the utility in order to reach a 3.67% return on fair value rate base. We adhere to the principle that the Commission is credited with expertise in reaching a sound business result which is fair to both the utility and the consumer, but cannot justify a granting of no return at all on property which had been included in the fair value rate base as “used and useful.”

We also credit the Commission with considerable discretion in determining what property is “used and useful” in providing services, and in determining how this relates to the setting of rates which are “just and reasonable.” (Cf. Citizens For A Better Environment v. Illi nois Commerce Com. (1981), 103 Ill. App. 3d 133, 138-39 (construction work in progress may be considered used and useful under appropriate circumstances).) In making this determination the Commission could set a rate which would fail to produce an adequate return to the utility due to the fact that the utility business was not fully developed or was larger than necessary. (Produce Terminal Corp. v. Illinois Commerce Com. ex rel. Peoples Gas Light & Coke Co. (1953), 414 Ill. 582, 590-91; State Public Utilities Com. ex rel. City of Springfield v. Springfield Gas & Electric Co. (1919), 291 Ill. 209, 218-19.) Both of these cases cited with approval San Diego Land & Town Co. v. Jasper (1903), 189 U.S. 439, 47 L. Ed. 892, 23 S. Ct. 571. In San Diego, the California statute in question, like Illinois, required the granting of a reasonable rate of return on used and useful property. (189 U.S. 439, 442, 47 L. Ed. 892, 894, 23 S. Ct. 571, 572.) The Supreme Court interpreted the statute to “assume that only a proportionate part of the system was actually used and useful within the meaning of the statute.” 189 U.S. 439, 447, 47 L. Ed. 892, 896, 23 S. Ct. 571, 574.

In this case, however, the Commission has included all of the utility’s property as used and useful in its rate-base finding. This is supported in considerable degree by the record. All of the lots in the subdivision have been sold by the developer. There was testimony that the user customers were in a slightly larger concentration on the lake, but generally spread throughout the subdivision. Virtually all of the mains had a user customer connected at some point. There was customer availability for all of the lots.

Other courts have also concluded that utility property, although not presently in use, may be considered “used and useful” and included in rate base where the property is necessary to meet foreseeable service requirements of the public. (See Southern Bell Telephone & Telegraph Co. v. Public Service Com. (1978), 270 S.C. 590, _, 244 S.E.2d 278, 284. See also Citizens For A Better Environment v. Illinois Commerce Com. (1981), 103 Ill. App. 3d 133, 138-39.) The converse is, of course, also true. If the Commission fairly finds that the property is not in fact presently used and useful but may only be used in the future, it may be excluded from the rate base by the Commission. (Kansas-Nebraska Natural Gas Co. v. State Corp. Com. (1980), 4 Kan. App. 2d 674, 678-79, 610 P.2d 121, 126-27; South Hinds Water Co. v. Mississippi Public Service Com. (Miss. 1982), 422 So. 2d 275, 283; Southwestern Public Service Co. v. State of Oklahoma (Okla. 1981), 637 P.2d 92, 98; see Columbus Gas & Fuel Co. v. Public Utilities Cam. (1934), 292 U.S. 398, 406, 78 L. Ed. 1327, 1332, 54 S. Ct. 763, 767.) In all of the cited cases, the property in question was found not to be used and useful and therefore was excluded from the rate base.

The Commission argues that we should not be concerned with the method it used to reach its decision but only with the end result. This approach to the decision by the Commission, however, cannot be explained as mere “methodology.” The argument that courts are without power to review the intermediate steps leading to the administrative decision has been rejected as preventing effective judicial review. (Union Electric Co. v. Illinois Commerce Com. (1979), 77 Ill. 2d 364, 376; City of Alton v. Illinois Commerce Com. (1960), 19 Ill. 2d 76, 80-81.) Courts should ordinarily refrain from interfering with the business judgment of the Commission where the record shows a fair consideration of the various factors entering into that judgment. We cannot, however, be confident of or approve the use of a “formula” by the Commission which includes substantial property in the fair value rate base but denies it any return.

The Commission’s findings, in our view, are based upon an improper analysis, contrary to the rule of law and must be rejected. Under the circumstances we are required to set aside the order as a whole. N-Ren Corp. v. Illinois Commerce Com. (1981), 98 Ill. App. 3d 1076, 1083.

II

To aid in further proceedings we briefly review other questions raised.

A

The utility has argued that the Commission erred in using an original cost rate base rather than a fair value rate base, which is required under the statute. (See, e.g., Union Electric Co. v. Illinois Commerce Com. (1979), 77 Ill. 2d 364, 375.) The structure of the Commission’s findings lends some support to this argument. One of the findings refers to a return of approximately 4.96% on original cost rate base and a return of approximately 3.67% on fair value rate base. (Commission Finding 17.) The Commission suggests that the ultimate finding is based on the fair value theory and that any contrary language should be rejected as surplusage.

The Commission may, in determining a fair rate of return, consider in its intermediate analysis the original cost and the existing capital formation structure. (See Cerro Copper Products v. Illinois Commerce Com. (1980), 83 Ill. 2d 364, 371.) It may not, however, rely solely on original cost.

B

The utility sought to have the $25,000 salary of its president allowed as an expense for rate-making purposes. A Commission staff witness recommended that the officer’s salary be reduced to $8,500. The Commission ruled, however, that the salary be eliminated altogether. In its order on rehearing the Commission noted that it based its decision on the unusual circumstances of an absent, nonresident president, the past financial difficulties of the utility including a bankruptcy reorganization, the presence of various management and clerical employees to run the day-to-day operations of the utility, and the fact that the president’s duties are undocumented.

This issue is to be considered under the guidelines set forth in Du Page Utility Co. v. Illinois Commerce Com. (1971), 47 Ill. 2d 550, cert, denied (1971), 404 U.S. 832, 30 L. Ed. 62, 92 S. Ct. 74. In Du Page the interveners contended that the Commission should not have allowed any of the officers’ salaries in the determination of the rate base, but should have required that they be distributed from profits since the officers, performed no valuable services to the utility. The court refused to accept that reasoning since it found no proof that the services were without value to the company. (47 Ill. 2d 550, 560-61.) The record before us does not reflect that the officer’s services were of no value; therefore, some portion of his salary should have been included as an operating expense.

C

We find no error, however, in the Commission’s approach to the salary of the general manager and secretary wherein it allocated 10% of the salaries to the utility involved in this case and 90% to a sister corporation, Woodhaven Utility Company, which shared common employees.

D

The utility also has claimed that legal expenses incurred in various commission and court proceedings should be charged to its ratepayers. Rate case expenses are properly and fairly allowed as an operating expense. (Du Page Utility Co. v. Illinois Commerce Com. (1971), 47 Ill. 2d 550, 561, cert, denied (1971), 404 U.S. 832, 30 L. Ed. 2d 62, 92 S. Ct. 74.) The Commission in this case allowed the utility a rate case expense of $40,000 amortized over two years. This finding is not in contest. Rather, the “extraordinary expenses” the utility seeks to include were incurred between 1976 and 1980 in proceedings which pertained to customer complaints regarding reasonableness of rates, the Commission’s motion to reconsider its original rate order, and a Chapter 11 bankruptcy. It is the unamortized portion of these extraordinary legal expenses, claimed to approximate $300,000, which is in dispute.

A “rate case” has been defined as “a proceeding, including a formal hearing, which results in a Commission order fixing any of the rates of a utility.” (Washington Gas Light Co. v. Public Service Com. (D.C. App. 1982), 455 A.2d 384, 389.) While rate case expenses may be charged to the ratepayers, the utility has failed to prove that the proceedings in question were, in fact, rate case proceedings. Therefore the utility’s reliance on Du Page Utility Co. v. Illinois Commerce Com. (1971), 47 Ill. 2d 550, cert, denied (1971), 404 U.S. 832, 30 L. Ed. 2d 62, 92 S. Ct. 74, and Driscoll v. Edison Light & Power Co. (1939), 307 U.S. 104, 83 L. Ed. 1134, 59 S. Ct. 715, is misplaced since both cases deal only with rate case expenses.

We have been furnished with no authority either in the statute or in case law allowing extraordinary legal expenses of the nature suggested by the utility. Moreover, we agree with the Commission that these nonrecurring expenses were not shown to be to the benefit of the ratepayers and that there was insufficient proof to show the reasonableness of the charges. The utility has the burden of proving that any operating expense for which it seeks reimbursement directly benefits the ratepayers or the services which the utility renders. See Illinois Bell Telephone Co. v. Illinois Commerce Com. (1973), 55 Ill. 2d 461, 482-83.

The judgment of the circuit court of Boone County is reversed and the cause remanded to the Illinois Commerce Commission for further proceedings in accordance with this opinion.

Reversed and remanded.

UNVERZAGT and HOPF, JJ., concur.


author: JUSTICE UNVERZAGT

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. RONNIE L. STARKS, Defendant-Appellant.
    Second District
    No. 82—893
    Opinion filed December 12, 1983.
    Rehearing denied January 26, 1984.

      Robert J. Hauser, of Sullivan, Smith, Hauser & Noonan, of Waukegan, for appellant.
    Fred Foreman, State’s Attorney, of Waukegan (Phyllis J. Perko and Cynthia N. Schneider, both of State’s Attorneys Appellate Service Commission, of counsel), for the People.
   JUSTICE UNVERZAGT

delivered the opinion of the court:

The defendant, Ronnie L. Starks, was indicted in Lake County for the armed robbery of the Libertyville Federal Savings and Loan Association branch in Gurnee, Illinois. He was convicted by a jury and sentenced to the Department of Corrections for 11 years. The defendant filed a post-trial motion which was supplemented twice; all were denied, and he appealed.

Jalena Gutman, a teller at Libertyville Federal Savings and Loan Association branch in Gurnee, testified she was robbed at gun point about 6:30 p.m. on Friday, January 15, 1982. She identified the defendant as the robber from photos shown to her later that evening, in an in-person lineup on March 10, and in court. Her testimony was corroborated by the other teller on duty that evening, Donna Vasey. Vasey also identified the defendant as the robber from photos, the lineup and in court. The defendant did not testify, but his uncle, aunt, mother, and a friend testified that he was in East Bernstadt, Kentucky, during the period December 24 to January 20 when he was arrested by the Kentucky police. The defendant’s sister also testified she phoned her mother in East Bernstadt on January 15 at approximately 4:30 p.m., Kentucky time, and that she heard the defendant’s voice in the background. The defendant called one of the State’s witnesses, Gurnee Police Department Sergeant Sheldon, who testified that Gutman and Vasey described the robber as being six feet tall, 185 pounds, with grey or green eyes. There was no testimony at trial as to the defendant’s actual physical description.

In rebuttal, the State called Karen Newman, a teller at the First Federal Bank of Chicago in McHenry. Newman was expected to testify that she saw the defendant about 6 p.m. on January 8 at that bank. However, at trial, she was unable to recognize the defendant as the man she saw that evening. Diane Gatham, who attended some of her high school classes with the defendant and whom she had known for about 10 years, testified she saw the defendant at the J & L gas station in Island Lake on either Sunday, December 27, 1981, or Sunday, January 3, 1982. She observed him for about three minutes while she was stopped in traffic waiting to make a left turn. She saw him walk toward a green El Camino or Ranchero, which the witness identified as being Bill Dotson’s, whom she stated was somehow related to the defendant. She observed the defendant get in the passenger side of the car; she did not identify Dotson as the person driving the car. Gatham testified she later informed her husband, who was an Island Lake police officer, that she had seen the defendant, and he called that information in to the police department. Gatham also testified a woman she worked with, Bernice Woods, drove with the defendant’s sister-in-law, and that Bernice mentioned she had seen the defendant sometime after the date Gatham had seen him.

During the defendant’s surrebuttal, Bernice Woods denied telling Gatham she had seen the defendant or had any knowledge of him having been in the area.

The jury found the defendant guilty of armed robbery and the trial court entered judgment on the verdict.

Defense counsel filed a post-trial motion, which was later supplemented by additional, newly retained counsel for the defendant, Robert J. Hauser. The supplemental motion for new trial identified seven additional alibi witnesses and their affidavits were attached to the motion. The motion also alleged that the defendant submitted himself to a polygraph examination upon representation by the Lake County State’s Attorney’s office that the charge would be dismissed if the defendant passed the test. The motion alleged the defendant passed the test, but that the State’s Attorney’s office reneged.

Hauser filed another supplement to the post-trial motion, alleging that the defendant’s appointed counsel at trial, Randall Stewart, failed to provide the defendant with effective assistance of counsel due to Stewart’s failure to call or take evidence depositions of all witnesses available for his defense, specifically the seven previously noted witnesses and, in addition, Bill Dotson and Stefan Urban. It was also alleged that the defendant was not adequately advised of his right to testify at trial.

After entry of the judgment on the verdict on July 1, 1982, the trial court held a hearing on August 24 at which Hauser was permitted to examine Joseph Wayne Feekes, whom defense counsel had reason to believe had robbed the savings and loan rather than the defendant. However, upon examination, Feekes denied that he had previously admitted to the FBI that he was involved in a bank robbery in Lake County, and neither Jalena Gutman nor Donna Vasey recognized Feekes as the robber. A third person present at the savings and loan when it was robbed was a customer, Stefan Urban. Urban had been unable to identify Starks as the robber from photos shown to him earlier. Urban was also unable to identify Feekes as the robber after viewing him in the courtroom.

The trial court heard arguments on trial counsel Stewart’s original post-trial motion and Hauser’s argument concerning additional alibi witnesses and the alleged polygraph agreement between the State’s Attorney and the defendant. Hauser was also permitted at that time to examine Bill Dotson, who owned the El Camino in which Diane Gatham stated she saw the defendant on either December 27 or January 3. Dotson denied he saw Starks during the period in question, but stated that another friend of his from Texas was staying with him at that time, and may have been the person Gatham observed at the J & L gas station. Hauser also indicated he had an affidavit from Susan Starks, the defendant’s ex-wife, regarding her regular telephone contact with the defendant in Kentucky during the period testified to by Diane Gatham. After argument, the trial court denied the motion. Sentencing was continued to permit counsel an opportunity to discuss the defendant’s presentence report with him due to the defendant’s illiteracy.

On the date set for sentencing, Hauser was further allowed to make a record concerning Stewart’s representation of the defendant at trial. Hauser presented testimony from Betty Dotson, the defendant’s sister, that she had advised Stewart of all the witnesses who could testify for the defendant and provided him with their affidavits prior to trial. She stated Stewart advised her there were limited funds for witnesses and that she would have to get them up to Illinois. She did, in fact, drive the witnesses who testified at trial up from Kentucky in her van and they stayed at her home. Susan Starks, the defendant’s ex-wife, then testified she spoke with the defendant in Kentucky on January 3, 11, 12 and 16, as stated in her previously filed affidavit. She testified she was not contacted before trial by anyone representing the defendant.

Finally, the defendant testified he was interviewed by Stewart only three times, the first of which interviews was merely to advise him that Stewart had been appointed to represent him. The defendant referred Stewart to his sister, Betty Dotson, for the names of witnesses. The defendant told Stewart at the start of trial that he would testify if either he (Stewart) or the State’s Attorney wanted him to. He could not recall if Stewart told him the State’s Attorney could not call him to testify; in any case, Stewart advised against his testifying in light of his past record.

The defendant testified about the polygraph agreement also:

“Q. [Hauser] And on what basis did you take that polygraph examination? What was your understanding if you passed it?
A. [Starks] The understanding that I had got from him, that the State told him if I passed the polygraph test they would drop the charge.
Q. So you went ahead and took it?
A. Yes, sir, and they said that I, you know, for the line-up, for the line-up, too.
Mr. Hauser: All right, I have nothing more.”

On cross-examination, the defendant was asked, and answered, as follows:

Q. [Assistant State’s Attorney Briscoe] He also went over your rights with you?
A. [Starks] What do you mean?
Q. I mean, he talked to you about pleading guilty or going to trial?
A. Yes.
Q. So you were aware of all of that?
A. Yes.
Mr. Briscoe: Nothing further.”

The defendant further testified in return for a guilty plea, the State offered him six years concurrent with the six years he already had on burglary in McHenry County. The defendant declined the offer because “[he] didn’t do it.”

The defendant’s post-trial motions were denied and he was sentenced. The three issues he raises on appeal are:

1. Whether the defendant was denied the effective assistance of counsel.

2. Whether the defendant was denied a fair trial due to the admission of evidence of other offenses.

3. Whether the State reneged on an agreement to dismiss the charge.

1. ASSISTANCE OF COUNSEL

The defendant asserts that his appointed trial counsel, Assistant Public Defender Randall Stewart, was incompetent and that, absent that incompetence, the outcome of his trial would probably have been different. We disagree.

The often-stated two-part test for establishing the incompetency of counsel which would warrant a new trial is whether counsel was actually incompetent, as reflected in the performance of his duties as trial attorney, and if that incompetence produced substantial prejudice to the defendant without which the result of the trial probably would have been different. (People v. Rodriguez (1983), 117 Ill. App. 3d 761; People v. Lewis (1981), 88 Ill. 2d 129; People v. Carlson (1980), 79 Ill. 2d 564.) It is the defendant’s burden to establish clearly the incompetency and the resultant prejudice. People v. Martin (1983), 112 Ill. App. 3d 486.

The defendant specifically charges his counsel was incompetent in the following respects: (1) by interviewing the defendant only three times prior to trial; (2) by failing to contact or subpoena all of the witnesses who would testify the defendant was in Kentucky on January 15; (3) by relying on the defendant’s sister to transport and house the witnesses from Kentucky; (4) by not taking evidence depositions; (5) by not interviewing or subpoenaing witnesses in Illinois; i.e., Susan Starks, the defendant’s ex-wife, Bill Dotson, the owner of the El Camino which Diane Gatham testified the defendant entered at the J & L gas station on either December 27 or January 3, and Stefan Urban, the customer present when the robbery occurred; (6) by not preparing the defendant for testimony; (7) by intimating the defendant had a prior record by questioning the two tellers about seeing photos of the defendant the night of the robbery; (8) by not objecting to testimony of Sergeant Sheldon concerning his presence at an interrogation in McHenry County at which the defendant was present; (9) by not preparing the defendant’s mother before her testimony so as to avoid her mentioning that the defendant was arrested “for two robberies” and by not attempting to mitigate the effect of such testimony by a motion for mistrial or introducing evidence that the defendant was no longer a suspect in the second robbery; (10) by failing to object or move for a mistrial after the prosecutor questioned Bernice Woods on cross-examination concerning whether the defendant was involved in the beating of her son 10 years earlier; (11) by failing to subpoena a witness from Illinois Bell in order to substantiate defendant’s sister’s January 15 call to Kentucky during which she heard the defendant’s voice in the background; and (12) by failing to introduce evidence as to the defendant’s actual height, weight and eye color in light of the witnesses’ testimony that the robber was six feet tall, about 185 pounds, and had green or grey eyes, whereas the defendant was 5 feet 8V2 inches tall, weighed 156 pounds, and has blue eyes.

It is well established that a review of competency will not be appraised on the basis of matters involving the exercise of judgment, discretion, or trial tactics. (People v. Greenlee (1976), 44 Ill. App. 3d 536; People v. Newell (1971), 48 Ill. 2d 382.) It has been held that a defendant is entitled to competent, not perfect representation. (People v. Berland (1978), 74 Ill. 2d 286, cert, denied (1979), 444 U.S. 833, 62 L. Ed. 2d 42, 100 S. Ct. 64.) Whether to present certain witnesses or whether to make objections during trial are strategic and tactical decisions which will not be reviewed. (People v. Greer (1980), 79 Ill. 2d 103,121-23.) However, in Greer, it was stated:

“The failure to interview witnesses may indicate actual incompetence (People v. Witherspoon (1973), 55 Ill. 2d 18), particularly when the witnesses are known to trial counsel and their testimony may be exonerating (People v. Stepheny (1970), 46 Ill. 2d 153).” People v. Greer (1980), 79 Ill. 2d 103, 123.

Counsel’s failure to personally interview all of the witnesses suggested by the defendant’s sister or to call them as witnesses at trial was not incompetence. Defendant’s sister testified she provided counsel with affidavits of these witnesses prior to trial. Consequently, their potential value as witnesses was known to counsel, and his decision not to follow up on them was a matter of strategy. No prejudice to the defendant is evident as a result of counsel’s decision. A review of the affidavits of these potential witnesses shows their testimony would be cumulative, at best, of the testimony which was given by the five alibi witnesses presented at trial on the defendant’s behalf. (People v. Hebein (1982), 111 Ill. App. 3d 830; People v. Haywood (1980), 82 Ill. 2d 540.) As noted by the State, more witnesses would not have necessarily increased the credibility of the ones who testified, particularly since several of the witnesses not called were either related to the defendant, had the same surname as another witness, or their testimony would not have established the defendant’s presence in Kentucky on the date in question.

With regard to counsel’s failure to present Bill Dotson as a witness, Diane Gatham’s unarguable ability to recognize the defendant refutes the suggestion that Dotson’s testimony would have been favorable and important to the defense. First, Dotson was a shirttail relative of the defendant, and second, Dotson’s testimony would likely not have impeached Gatham’s placement of the defendant in Island Lake on December 27 or January 3; rather, only her testimony that the car was Dotson’s. She did not testify how she knew it was Dotson’s car, nor did she testify that Dotson was the driver of the car.

Likewise, counsel’s decision to query the two tellers with regard to the photos they had viewed of the defendant, to not object to Sheldon’s testimony regarding his presence at an interrogation in McHenry County at which the defendant was present, and to not further question the defendant’s mother so as to clarify her comment about the defendant’s arrest for two robberies, were all matters of professional judgment and trial strategy. Whether the jury inferred prior or other criminal conduct by the defendant as the result of these asserted failings of defense counsel is purely speculative. Counsel’s decision — although perhaps unwise — to suggest during cross-examination of the two tellers that they had been unduly influenced by being shown photos of the defendant prior to the lineup and their in-court identification of the defendant was undoubtedly an attempt to weaken the credibility of their positive identification of the defendant. Counsel’s tactical decision not to object to the prosecutor’s examination of Sergeant Sheldon concerning the defendant being in McHenry County was not unsound, considering the thrust of the prosecutor’s examination was not to show the defendant was in custody, but to establish when and where Sheldon took a picture of the defendant sporting a “large growth of whiskers on his face, like a small beard, and a mustache starting.” That description of the defendant as he appeared on January 27, when Sheldon took the picture, comports with the tellers’ description of the robber’s three-four days’ beard growth on January 15. With regard to the defendant’s mother, she was simply telling the truth about the arrest, and although defense counsel probably would have wished no reference had been made to the other robbery which was subsequently dismissed, counsel’s passing over this remark— whether intentional or not on his part — at least may be construed as an attempt to prevent the jury from focusing any further on her comment. Additionally, no amount of pretrial witness preparation can assure that the witness will not innocently — truthfully—blurt out some information that disserves the case.

Defense counsel’s decision not to call Stefan Urban as a witness was a strategy decision. Urban, the customer present during the robbery, only saw the robber for two to three seconds and was unable to identify either the defendant or, during the post-trial hearing, the suspect Feekes, as the robber. Urban’s opportunity and ability to have observed and recalled the physical characteristics of the robber was considerably less than that of the two tellers whose attention was focused on him longer, and whose note of details about persons who were not regular customers was deliberate and studied. Moreover, although there were discrepancies between the tellers’ descriptions of the robber and the defendant’s actual physical dimensions, the jury was able to observe the defendant in person and to draw its own conclusions as to how serious those discrepancies were. A crime victim’s failure to accurately guess a person’s height and weight is rarely fatal to the victim’s otherwise positive identification of a defendant. People v. Nelson (1982), 106 Ill. App. 3d 838, 844.

Finally, as the State points out, the defendant stated Stewart “recommended” he not testify because of his past record, and that Stewart “probably” advised him that the State’s Attorney could not call him to testify. Based on the record, it appears the defendant acceded to his counsel's recommendation that it "wouldn’t be wise” for him to testify. The defendant stated to counsel he “didn’t know nothing about [the robbery] because [he] was nowhere in the State at the time.” The defendant further stated: “I told [counsel] that my sister had all the names of the people for my witnesses, and I referred him to her.” Such comments do not indicate the defendant desired to testify in his own behalf. Apparently, the only testimony the defendant could have offered in his own behalf would have been cumulative of the alibi witnesses, and his testifying would have subjected him on cross-examination to exposure of his past criminal conduct about which the jury would then have no need to speculate.

In sum, whether counsel was incompetent must be assessed on the basis of the entire record, and not isolated instances during trial. (People v. Berger (1982), 109 Ill. App. 3d 1054.) Defendant here has failed in the first instance to show that Stewart was incompetent. Consequently, defendant was not deprived of the effective assistance of counsel, and the trial court properly denied the defendant’s motion for a new trial on that basis.

2. ADMISSION OF EVIDENCE OF OTHER OFFENSES

The defendant contends he was denied a fair trial due to the prosecutor’s improper elicitation of evidence of other crimes committed by the defendant. His contention is without merit.

Specifically, he complains about the propriety of the prosecutor’s direct examination of Sergeant Sheldon wherein defendant’s presence in the McHenry County Jail interview room on January 27, 1982, was established. He contends this reference allowed the jury to speculate as to what crime or crimes the defendant may have committed that would have resulted in his incarceration in McHenry County. Similarly, the defendant claims the prosecutor’s calling of Karen Newman in order to establish defendant’s presence on January 8, 1982, in the McHenry County bank in which she was a teller improperly caused the jury to speculate that the defendant had indeed participated in the second robbery to which his mother had alluded. Finally, the defendant complains the prosecutor’s cross-examination of surrebuttal witness Bernice Woods concerning a prior incident in which her son was beaten up by several persons improperly intimated the defendant’s participation in past misdeeds.

This argument was not preserved as error through objection or post-trial motion and, thus, any error has been waived. (People v. Jackson (1981), 84 Ill. 2d 350.) However, this court will exercise its discretionary power to consider the merits of issues that technically have been waived in light of the allegations of incompetency of counsel in this case. 87 Ill. 2d R. 615(a).

At the most, the instances cited by the defendant amount to references to his possible involvement in other, unrelated offenses. In such cases, it has been held that a conviction will not be reversed unless it appears that real justice has been denied or that a jury verdict may have resulted from such error. People v. Crotty (1976), 44 Ill. App. 3d 413, 419.

In the case at bar, it is significant that there was a valid purpose for the questions in each of the three instances. Although Newman ultimately did not identify the defendant as she was expected to, she was cautioned against making any reference to the fact that she was being robbed at the time she allegedly encountered the defendant and, in fact, her testimony was intended to rebut the defendant’s alibi defense by establishing that he was present in Illinois on January 8, 1982. When Newman did not recognize the defendant in the courtroom, defense counsel objected to a further question asked by the prosecutor, the court sustained the objection, and the witness was promptly excused.

The questions asked of Sergeant Sheldon were appropriate to establish the foundation for the introduction of the photo taken by Sergeant Sheldon of the defendant on January 27. Whether the jury drew the inference suggested by the defendant here is purely speculative. Numerous inferences might have been drawn by the jury as the result of Sheldon’s testimony; e.g., that McHenry County facilities were more suitable for some reason than Lake County, that the defendant was providing McHenry County authorities with information helpful in an investigation of someone other than himself, etc. Inferences as diverse as the jury itself could have been drawn, some of them perhaps even favorable to the defendant in that he might have been viewed as having been cooperating with another law enforcement agency.

In the third instance, the prosecutor’s questions to Bernice Woods could have exposed that she had some bias, interest, or motive for testifying which would not have been obvious to the jury. Exposure of a witness’ ulterior motivation for testifying is properly within the scope of cross-examination. Further, the incident in question was remote, and Woods denied that she knew the defendant was one of the persons who beat up her son, or that she was afraid of him.

Whether the jury in fact interpreted any of these three specified instances as evidence of other criminal conduct on the part of the defendant is conjecture. In our opinion, the prosecutor had a valid reason in each instance for treading so close to such potentially prejudicial material, and we do not believe his “duty *** to safeguard the rights of all the people,” including the accused, was breached thereby. People v. Gregory (1961), 22 Ill. 2d 601, 604.

On the basis of the record, it does not appear that evidence of other offenses was improperly admitted. Consequently, no reversal on this basis is warranted.

3. THE PRETRIAL AGREEMENT

The defendant contends the Lake County State’s Attorney agreed to dismiss the charge against him if he took and passed a polygraph examination. He did take one on March 30, 1982, and, according to his supplemental post-trial motion, he passed it. Although the State suggests the agreement was also conditioned on his successful participation in a lineup, the sequence of events does not appear to support this theory. The lineup at which the defendant was identified by the two tellers was conducted on March 10, and the court’s order that the defendant be transported to the Libertyville Police Department for the polygraph examination was filed on March 16. That order was entered on motion of the defendant’s counsel Stewart. If successful passage of both the lineup and the polygraph were conditions of the agreement and the defendant failed the first, there certainly would be no need to proceed with the polygraph. After the polygraph examination on March 30, the next reference in the record to it is on June 29, after the jury was sworn in, when the State made a motion in limine to bar any reference during trial to the polygraph examination in light of “the recent case.” (Referring, we believe, to People v. Baynes (1981), 88 Ill. 2d 225.)

The court granted the motion, and told the defendant:

“THE COURT: What has occurred here is, they have asked that everybody be precluded from talking about a lie detector test, okay. Our Supreme Court has said a lie detector test is not evidence in a case, and in any case, and even if the parties agreed that it’s going to be evidence in the case, it can’t be evidence in the case, and therefore, you are precluded from ever mentioning that as evidence; and I would just tell you, and I will caution Mr. Stewart, and neither you nor any of the witnesses can testify about the fact there has been any polygraph or lie detector evidence, do you understand?
THE DEFENDANT: Yes.”

During the post-trial hearing concerning this issue, the court may have misapprehended the thrust of counsel’s argument and, therefore, did not fully consider whether the defendant was entitled to relief. The defendant’s point was not that the favorable results of the polygraph examination should have been allowed in evidence — clearly that would not have been permissible; rather, that the defendant gave up his right against self-incrimination in reliance upon the promise of the State’s Attorney to dismiss the charge if he passed the examination.

However, the record here is not complete enough to allow the conclusion that there was, in fact, an agreement or if there was what its terms were. The defendant has failed to show us evidence which would support his argument on this issue. He, therefore, cannot sustain his position and no reversal is therefore mandated.

The judgment of the circuit court of Lake County is affirmed.

Affirmed.

HOPF and REINHARD, JJ., concur.


text:
    RICHARD V. BASAK, Plaintiff-Appellee, v. ASPLUNDH TREE EXPERT COMPANY, Defendant-Appellant.
    Second District
    No. 83—382
    Opinion filed December 27, 1983.
    Rehearing denied January 26, 1984.
    John W. Bell, John A. Childers, and Thomas H. Fegan, all of Johnson, Cusak & Bell, Ltd., of Chicago, for appellant.
    Stephen D. Tousey, of Early, Collison, Tousey & Regan, of Elgin, for appellee.
   JUSTICE HOPF

delivered the opinion of the court:

Defendant, Asplundh Tree Expert Company, brings this appeal pursuant to Supreme Court Rule 308 (87 Ill. 2d R. 308), urging the circuit court of McHenry County erred in denying its motion for summary judgment. This court allowed defendant’s petition for leave to appeal, and after consideration of the issues certified for review, we affirm the trial court’s denial of the motion for summary judgment.

On March 3, 1982, plaintiff, Richard V. Basak, filed suit against defendant seeking compensatory and punitive damages resulting from his alleged retaliatory discharge for the filing of a workers’ compensation claim. Defendant answered plaintiff’s complaint and filed a motion for summary judgment which alleged that plaintiff had failed to exhaust the grievance procedure under a collective bargaining agreement entered into between defendant and plaintiff’s collective bargaining representative. The trial court denied defendant’s motion, but found that an interlocutory appeal was appropriate.

Plaintiff alleged in his complaint that he was injured in the course of his employment with the defendant, and that he received benefits under a workers’ compensation claim. Approximately seven months later plaintiff was released by his doctor to return to work with defendant corporation. Plaintiff next alleged that he was refused employment in any capacity, and that his refusal was a discharge in retaliation for plaintiff having pursued his rights under the Workers’ Compensation Act. 111. Rev. Stat. 1981, ch. 48, par. 138.1 et seq.

There are two questions certified for review: the first is whether an employee who claims that his employer discharged him in retaliation for filing a workers’ compensation claim must exhaust any remedies provided in the collective bargaining agreement entered into between the employer and the employee’s collective bargaining representative before suing the employer in tort. The second assumes that the employee must exhaust such remedies. It asks whether an employee may claim that the existing contractual remedy was not available because his union membership which provided him with access to that remedy had lapsed during the period in which he was under disability. This court addressed the first issue in Suddreth v. Caterpillar Tractor Co. (1983), 114 Ill. App. 3d 396, 449 N.E.2d 203, and held in accordance with Cook v. Caterpillar Tractor Co. (1980), 85 Ill. App. 3d 402, 407 N.E.2d 95, and Deatrick v. Funk Seeds International (1982), 109 Ill. App. 3d 998, 441 N.E.2d 669, that an employee may not sue an employer in tort for retaliatory discharge for filing a workers’ compensation claim where he is protected by a collective bargaining agreement’s grievance procedure and he fails to exhaust those remedies. This court rejected the holding in Wyatt v. Jewell Cos. (1982), 108 Ill. App. 3d 840, 439 N.E.2d 1053, and a dissent in Cook v. Caterpillar Tractor Co. (1980), 85 Ill. App. 3d 402, 407 N.E.2d 95, which would allow an employee to sue his employer in a tort action for retaliatory discharge because such an action constitutes a separate and distinct remedy from any contractual remedies existing in the collective bargaining agreement.

Thus, the first question certified for appeal has been answered by the holding set forth in Suddreth v. Caterpillar Tractor Co. (1983), 114 Ill. App. 3d 396, 449 N.E.2d 203. Plaintiff must exhaust his remedies under the grievance procedure prior to filing a claim for retaliatory discharge. However, Suddreth did not address the second question raised herein, and after setting forth the factual basis for this case we discuss that issue below.

The facts of this case show that plaintiff sustained an accidental injury on August 30, 1979, arising out of his employment with defendant. His complaint shows that he filed a workers’ compensation claim on September 13, 1979, and, that on March 9, 1980, defendant refused to permit him to return to work when he attempted to do so. Defendant filed a motion for summary judgment on July 6, 1982, stating that since plaintiff failed to follow the grievance procedure set forth in the collective bargaining agreement to which plaintiff and defendant were bound, he is barred from pursuing an action in tort until he has exhausted his contractual remedy pursuant to that agreement.

The agreement sets forth a grievance procedure to be utilized “[sjhould any difference arise under this agreement between an Employee or a group of Employees and a representative of the Employer, involving the application or interpretation of any provision or provisions of this Agreement, ***.” According to the agreement, if a grievance is not presented within one week following its occurrence, the grievance is deemed not to exist. The agreement also gives the employer control to discharge an employee for “proper cause.” It makes union membership a condition of employment and allows the employer to deduct an employee’s monthly union dues and remit them to the union when so authorized in writing by the employee.

Plaintiff filed a response on July 30, 1982, stating that defendant stopped paying plaintiff’s union dues after October 1979, and that defendant notified the union that plaintiff had quit as of October 1979, thus terminating plaintiff’s union membership and access to the grievance procedure. Plaintiff attached to his response portions of his union’s constitution and rules which provide that no member is entitled to notice of arrearages in his dues but must take notice when payments are due; and that a member working under an agreement requiring monthly payment of dues, as in the instant cause, has a grace period of 21 days after the first of the month following an indebtedness before being dropped from membership and cannot become a member in good standing again except by joining as a new member. The business manager of the union, Fred Smith, swore an affidavit in which he stated that the union has the policy to terminate union membership when a member terminates employment and no longer pays dues and that any such member who renews employment with the same employer at a later date must comply with any provisions of the collective bargaining agreement regarding becoming a new union member. According to the agreement, a new employee for defendant does not have access to the grievance procedure until he has served a 90-day probationary period.

Defendant filed a reply memorandum on January 17, 1983, in which it stated that plaintiff had the duty to pay his union dues once he discontinued receiving monthly paychecks because the agreement requires the employer only to deduct union dues from an employee’s paycheck. Hence, if the employee no longer received a paycheck, no deduction could be made. Furthermore, defendant stated that according to the agreement, an employee cannot engage in activity for the purpose of defeating or evading the terms of the agreement.

The deposition of Fred Smith attempts to interpret and clarify the procedure and rights of an employee where that employee’s employer discontinues payment of the employee’s union dues. Smith stated that where an employee no longer receives a monthly paycheck, the employer normally does not pay the union dues, but rather the member would pay those dues. An employee who fails to pay these dues loses the right to use the collective bargaining agreement’s grievance procedures, so that if an employer refuses to hire an employee who was not working while under disability, the union could not do anything to protect the employee. He also stated that when an employee is out of work and receiving workers’ compensation, everyone assumes that he will get his job back and that normally, once an employee is reemployed, he will begin paying union dues again. Once dropped from the union membership rolls, the employee would have to rejoin the union, and once he begins work again, he could use the grievance procedure. An employee who contemplates being out of work may maintain his union status by being placed on “leave of absence” for a $5 charge without being required to pay monthly dues. Once he started paying dues again, and started to work, he could file a grievance.

The trial court denied defendant’s summary judgment motion and defendant then moved for an interlocutory appeal and filed a petition for leave to appeal with this court.

As stated earlier, the first issue certified for appeal has been resolved in this court’s decision in Suddreth v. Caterpillar Tractor Co. (1983), 114 Ill. App. 3d 396, 449 N.E.2d 203. Since the agreement in the instant case, as did the agreements in Suddreth, Deatrick v. Funk Seeds International (1982), 109 Ill. App. 3d 998, 441 N.E.2d 669, and Cook v. Caterpillar Tractor Co. (1980), 85 Ill. App. 3d 402, 407 N.E.2d 95, sets forth a grievance procedure whereby a discharged employee may contest whether his discharge was for “proper cause,” that issue need not be discussed here. Rather, the relevant inquiry is whether those holdings bar an employee from maintaining a retaliatory discharge action where he is no longer a member of the union because he has failed to pay his union dues and thus has no access to the grievance procedure set forth in the collective bargaining agreement.

In Cook v. Caterpillar Tractor Co. (1980), 85 Ill. App. 3d 402, 407 N.E.2d 95, the court explained the policy consideration behind our supreme court’s decision in Kelsay v. Motorola, Inc. (1978), 74 Ill. 2d 172, 384 N.E.2d 353, which established the tort of retaliatory discharge in Illinois. The policy was intended to protect an employee terminable at will where he files a workers’ compensation claim. Cook did not allow the extension of the doctrine to employees protected by a collective bargaining agreement that permitted discharge only for just cause. According to the majority of that court:

“To permit an employee to circumvent procedures mutually agreed upon for handling grievances by filing suit in the first instance would undermine the collective bargaining agreement. Grievance procedures, including arbitration, were set up to prevent industrial strife. [Citation.] To permit these procedures to be circumvented in a situation where the employee is protected by the procedures is to invite strife unnecessarily. The employee has a remedy in contract, and to expand the tort of retaliatory discharge to include the instant situation is not only unnecessary, but counterproductive as well.” Cook v. Caterpillar Tractor Co. (1980), 85 Ill. App. 3d 402, 406, 407 N.E.2d 95, 99.

Defendant argues that allowing an employee to voluntarily lose access to his contractual remedy would similarly circumvent and undermine the collective bargaining agreement. Defendant relies upon Deatrick v. Funk Seeds International (1982), 109 Ill. App. 3d 998, 441 N.E.2d 669, to argue that where an employee has been dropped from the union membership for nonpayment of dues that his nonunion status is the result of his own doing, he should be barred from bringing a tort action.

In Deatrick v. Funk Seeds International (1982), 109 Ill. App. 3d 998, 441 N.E.2d 669, the appellate court adopted the holding and rationale of Cook v. Caterpillar Tractor Co. (1980), 85 Ill. App. 3d 402, 407 N.E.2d 95. The employee argued, however, that he had been dropped from the union rolls for nonpayment of his dues and thus was not protected by the collective bargaining agreement. The appellate court agreed with the trial court’s findings that the collective bargaining agreement, by its own terms, included union as well as nonunion employees and precluded that employee from using his nonunion status as a means to avoid the grievance procedure set forth in that agreement. The appellate court noted that the employee’s nonunion status was of his own doing and, although the employer no longer paid that employee’s union dues, other arrangements for the payment of the dues were possible.

The facts in the instant case are distinguishable from those in Deatrick v. Funk Seeds International (1982), 109 Ill. App. 3d 998, 441 N.E.2d 669. The trial court in Deatrick found that the agreement by its terms included union as well as nonunion employees. In the instant case, the agreement clearly covers only union employees since all employees must maintain union status as a condition of employment. The employee’s failure to maintain union status in Deatriek was not a controlling fact in that, decision.

In the instant case, plaintiff’s decision not to pay union dues while under disability appears to have been a reasonable decision. Maintaining union status while on disability would have given plaintiff no benefits other than to have access to the grievance procedure. Because his subsequent discharge would not have been foreseeable when he declined paying monthly union dues, it would be unfair to deny him the ability to maintain a tort action for retaliatory discharge where he is no longer protected by a collective bargaining agreement. Although he could have maintained access to the grievance procedure by obtaining leave of absence status for a slight charge, his error in not doing so should not deny him the right to challenge his discharge. The facts of this case do not indicate, directly or inferentially, that plaintiff declined to pay his union dues for the purpose of circumventing the collective bargaining agreement. If that had been the case, another result may be proper.

While a condition of plaintiff’s employment was his maintenance of union membership, since he was no longer “employed” while on disability as indicated on the job separation form, he had no contractual obligation to continue his payment of union dues. Thus, although it may appear unfair to permit an employee to unilaterally alter his employment status from a contractual employee to an at-will employee, under the circumstances presented herein the employee’s alteration of his union status could not have been intended as a means of avoiding his grievance procedure. At the time of defendant’s discharge, he was not a member of the union. Therefore, to bar plaintiff’s action would deny him any remedy.

Defendant’s reliance on O’Neill v. Public Law Board No. 550 (7th Cir. 1978), 581 F.2d 692, 694-95, cited in Deatrick v. Funk Seeds In ternational (1982), 109 Ill. App. 3d 998, 1003, 441 N.E.2d 669, in which the court of appeals found that a union’s duty to represent its members in disputes extends to employees who have been dismissed is inapposite in the instant cause. In O’Neill, the employee was a union member when he was discharged, unlike plaintiff in the instant case. Thus, defendant’s argument that plaintiff’s nonunion status did not preclude plaintiff from using the grievance procedure is incorrect.

Although an employee protected by a collective bargaining agreement’s grievance procedure cannot maintain an action for retaliatory discharge, where that employee does not have access to the grievance procedure by virtue of his failure to pay his union dues, and such decision to not pay union dues was reasonable and not motivated by a desire to circumvent the grievance procedure, that employee should be able to maintain an action in tort for retaliatory discharge.

For the reasons stated, the judgment of the circuit court of McHenry County denying defendant’s motion for summary judgment is affirmed and this cause remanded for proceedings on plaintiff’s complaint.

Affirmed and remanded.

SEIDENFELD, P.J., and NASH, J., concur.