author: PRESIDING JUSTICE WEBBER

text:
    THE PEOPLE ex rel. DONALD L. HAWTHORNE, County Treasurer and Ex Officio Collector of Taxes of Woodford County, Plaintiff-Appellee, v. VERNON BARTLOW et al., Objectors-Appellants.—PEOPLE ex rel. DONALD L. HAWTHORNE, County Treasurer and Ex Officio Collector of Taxes of Woodford County, Plaintiff-Appellee, v. RONALD J. BARTEL et al., Objectors-Appellants.
    Fourth District
    Nos. 4—82—0366, 4—82—0367 cons.
    Opinion filed January 6, 1983.

      Thomas M. Atherton, of Frings, Bagley, Atherton & Clark, of Pekin, for appellants.
    G. Patrick Riley, State’s Attorney, of Eureka (Robert J. Biderman and Michael W. Hogan, both of State’s Attorneys Appellate Service Commission, of counsel), for appellee.
   PRESIDING JUSTICE WEBBER

delivered the opinion of the court:

Plaintiff, the county collector of Woodford County, Illinois, filed an application for a judgment for delinquent taxes in the circuit court of Woodford County. Defendants, certain Woodford County taxpayers, filed objections to the real estate taxes in response to the application alleging actual and constructive fraud in failing to equalize township assessments. The trial court overruled the objections. We affirm.

Defendants, taxpayers in Spring Bay and Worth Townships in Woodford County, paid their 1980 real estate taxes under protest pursuant to section 194 of the Revenue Act of 1939 (Ill. Rev. Stat. 1979, ch. 120, par. 675). The county collector filed his application for judgment for delinquent taxes in accord with section 225 of the Act (Ill. Rev. Stat. 1979,ch. 120, par. 706).

Pursuant to section 194 defendants filed their objections to the taxes and a motion to dismiss the objections was filed, but later withdrawn.

The trial court held a conference between the parties as provided in section 194(a) (Ill. Rev. Stat. 1979, ch. 120, par. 675(a)). However, no demand having been made for a hearing within 90 days, the hearing was set for May 1982.

The causes were consolidated and the objections were heard on stipulated facts, with the parties submitting lengthy trial briefs; the facts may be summarized as follows.

The Woodford County Board of Review (Board) determined the level of assessments applicable to the 1980 real estate taxes for the various townships below 33V3% of fair market value, resulting in a weighted urban value for the county of less than 33V3%. The Board was informed by the Department of Revenue (Department) that unless it acted to equalize, the Department would apply a county-wide multiplier.

The Board met in February 1981 and unanimously decided to accept the Department’s multiplier because of insufficient sales in 12 of 17 townships to equalize according to section 108(a) of the Revenue Act of 1939. "(Ill. Rev. Stat. 1979, ch. 120, par. 589.1.) It was stipulated that at the time of the Board’s decision its members were aware of the provisions of section 108(a).

Section 108(a) requires boards to equalize to 33V3% in assessment districts by analyzing 25 property transfers in each district. If there are insufficient sales, a board of review is to use a random sample of sales and appraisals. The equalization process is to be completed by the date specified by law for adjournment of the Board with a report submitted to the Department. If a Board fails to make the report, or a proper equalization, the Department is authorized to supervise assessment “*** to the end that all assessments of property be made relatively just and equal ***.” Ill. Rev. Stat. 1979, ch. 120, par. 589.1.

Under the authority granted in section 108(a) the Department applied the county-wide multiplier which raised the weighted urban value to However, this did not cure the disparity of assess-

ments between townships and resulted in some townships being assessed at greater than 33x/3%.

Taxpayers in Spring Bay and Worth Townships had their property assessed above SSVsVo. This resulted in their paying more taxes than they would have paid had appropriate township multipliers been used.

The gist of defendants’ position, in the trial court, and here, is that the Board had a duty to equalize; the Board failed to equalize; this failure resulted in excessive overvaluation, and amounted to constructive fraud.

The trial court found that there was a variance between the average township levels of assessment among the several townships but that this did not, in itself, demonstrate that any property, or group of properties, had been grossly overvalued as that term had been previously accepted as the sole basis for a finding of constructive fraud.

The court further found that there existed substantial practical difficulties in February 1981 in providing the proper basis for equalization. Moreover, the court held that in February 1981 there was no binding authority in existence which defined the term “shall” as used in section 108(a) except for dictum in Hamer v. Lehnhausen (1975), 60 Ill. 2d 400, 328 N.E.2d 11, and that therefore a legitimate legal dispute existed as to the extent of the Board’s duty to equalize.

Before continuing with the court’s findings, it is necessary to digress. The Board’s duty to equalize the assessments at issue here was litigated in Overend v. Guard (1981), 98 Ill. App. 3d 441, 424 N.E.2d 731. There, we determined that section 108(a) is mandatory and requires Boards of Review to equalize assessments by establishing township multipliers; this is an affirmative duty. A board may not weigh the costs and balance the hardships in establishing township multipliers and acquiesce in a multiplier established by the Department while ignoring the need for township multipliers.

Although we did not reverse in Overend, our disposition was predicated on the fact that the Board had adjourned. However, we reassert our admonition to Boards of Review not to disregard this duty in the future. Moreover, our disposition here is not to be understood as a retreat from our holding in Overend.

The trial court was correct in ruling that at the time of the Board’s failure to equalize there existed a legitimate dispute as to its duty. The Board’s action was taken prior to our decision in Overend; the only previous authority being the dictum in Hamer.

The central issue in this appeal is the trial court’s ruling on constructive fraud. The issue before the court was whether constructive fraud exists as a matter of law when an assessing authority fails to comply with the duty to equalize, while that duty is legitimately in dispute. As the matter was heard on stipulated facts, the issue before us is whether, as a matter of law, the facts sustained the trial court’s judgment. (Crum v. Gulf Oil Corp. (1979), 70 Ill. App. 3d 897, 388 N.E.2d 1008.) It is in this context that we must decide whether a knowing failure to equalize assessments between townships renders those assessments constructively fraudulent.

A taxpayer is entitled to relief from excessive valuation; however, courts have no power to fix values and a valuation is subject to judicial scrutiny only when fraudulent. (People ex rel. Schmulbach v. City of St. Louis (1951), 408 Ill. 491, 97 N.E.2d 252.) Actual fraud need not be shown, since constructive fraud will also serve as a basis for relief. Clarendon Associates v. Korzen (1973), 56 Ill. 2d 101, 306 N.E.2d 299.

There is a presumption, absent evidence to the contrary, that assessing officials perform their duties honestly and a court will not set aside an assessment merely because of a difference of opinion as to value. (Clarendon.) Therefore, if the property has been assessed at a value higher than it should have been through mere error of judgment, the courts are powerless as they may relieve only on the basis of fraud. City of St. Louis.

Defendants have chosen to attack the valuations of their property on the basis of constructive fraud. Constructive fraud is any act, statement, or omission which amounts to positive fraud, or which is construed as fraud because of its detrimental effect upon public interests and public or private confidences. It requires neither actual dishonesty, nor intent to deceive, being a breach of legal or equitable duty which, irrespective of the moral guilt of the wrongdoer, the law declares fraudulent because of its tendency to deceive others. It can be inferred from the circumstances regardless of any actual dishonesty of purpose. In re Estate of Neprozatis (1978), 62 Ill. App. 3d 563, 378 N.E.2d 1345.

In the area of taxation, if the facts show that the taxing authorities have assessed property for taxation purposes at a value greatly in excess of its actual value, and the assessment was wilfully and deliberately made, such conduct amounts to constructive fraud. However, in these cases there must be a showing that the authorities did not act in good faith in order to rebut the presumption that public officials discharge their duties honestly. (City of St. Louis.) This, however, does not require a showing of wrongful motive. The presumption of honesty is rebutted by a showing of a failure to act in good faith. Thus, we agree with defendants that the trial court erred in ruling that constructive fraud requires a showing of scienter or wrongful motive. However, we do agree with the trial court’s finding that constructive fraud had not been shown.

A valuation is constructively fraudulent when property is assessed disproportionately higher than other similar property. Similarly, a valuation is fraudulent when it is reached under circumstances showing either a lack of knowledge of known sales, or a deliberate fixing of values contrary to known values. (Clarendon.) Defendants have attacked their assessments on both grounds.

Turning to defendants’ contention that the property in Spring Bay and Worth Townships was assessed disproportionately higher .than other similar property, we note initially that the authorities relied on by defendants are inapposite. In People ex rel. County Collector v. American Refrigerator Transit Co. (1965), 33 Ill. 2d 501, 211 N.E.2d 694, defendant’s property had been valued at 98% of its fair market value while other similar property had been valued at only 55%. The supreme court held this was a disproportionate valuation.

In People ex rel. Ross v. Chicago, Milwaukee, St. Paul & Pacific R.R. Co. (1942), 381 Ill. 58, 44 N.E.2d 566, it was apparent on the record that there was a 15% disparity between all property in the State. In Ross the tax commission admitted that the taxes were excessive and illegal. However, the issue was not whether fraud existed because of disproportionate assessment.

Of greatest significance to our decision is the fact that defendants have failed to establish that the property was assessed disproportionately higher than other similar property. The only facts before the trial court show that all property in Spring Bay and Worth Townships may have been valued higher than all property in other townships. However, there is no showing that the property in the other townships was similar to that of defendants. Therefore, defendants’ argument must fail on this point.

Defendants’ second point, that the assessed valuation was reached under circumstances showing either a lack of knowledge of known sales, or a deliberate fixing of values contrary to known values, must fail as well. In Clarendon the supreme court relied on People ex rel. Nordlund v. Lans (1964), 31 Ill. 2d 477, 202 N.E.2d 543, where the court stated that constructive fraud is shown only when the overvaluation is grossly excessive and it is proved that the assessment was made either in ignorance of the value of the property, or that it was not based on readily ascertainable facts.

Here the stipulated facts do not reveal that the property was grossly excessively overvalued. Whether there was an arbitrary, or grossly excessive, valuation constituting fraud depends on whether the property in one taxing district is required to pay more than its just proportion of the taxes levied. This, in turn, depends on whether the increased value for assessment purposes is greater in proportion to its actual value than the ratio which the value for assessment purposes of property in other taxing districts bears to its actual value. To determine this values in other taxing districts must be known. People ex rel. Bracher v. Millard (1923), 307 Ill. 556,139 N.E. 113.

In the instant case no facts were present on the record which allowed this court to know the values of property in other districts. Therefore, it is impossible to know whether Spring Bay and Worth Township property owners are being required to pay more than their burden. This is so because it is impossible to know whether the assessed valuation in those townships is greater than their actual value. It must be admitted that there is a difference in assessed valuations after equalization. However, for such a difference to constitute fraud it must be so excessive, and its existence so evident, as to overcome the presumption that it was honestly made. Millard.

It is apparent from the foregoing that the defendants have not met their burden of proof. The burden is on the taxpayer to show excessive valuation or actual fraud. The taxpayer will not sustain this burden unless he can show by clear and convincing evidence that the application of a multiplier results in a final assessment of property at a value grossly in excess of its actual value. (City of St. Louis.) Here, there has been no showing that the valuation is grossly in excess of the actual value of the property in Spring Bay and Worth Townships.

Where there is no proof that a valuation placed on the property of the taxpayer was wilful or arbitrary, or that the valuation is grossly in excess of market value, there can be no finding of constructive fraud. (See People ex rel. Schlaeger v. Allyn (1946), 393 Ill. 154, 65 N.E.2d 392.) Since there is no proof that the valuation placed on the property of the defendants was wilful or arbitrary, or grossly excessive, then this contention must fail as well.

The remaining two issues raised by defendants require less attention. Article IX, section 4(a) of the Illinois Constitution of 1970 provides:

“Except as otherwise provided in this Section, taxes upon real estate property shall be levied uniformly by valuation ascertained as the General Assembly shall provide by law.”

The equalization of assessments is the adjustment of graduated values of property as between different taxing districts, so that the whole tax imposed on each taxing district shall be justly proportioned to the value of taxable property within its limits, in order that one taxing district may not pay a higher proportion to the value of its taxable property than another. (Millard.) Although we disapprove of the procedure utilized by the Board and the Department, we do not agree that the procedure did not accomplish this equalization.

The rule of uniformity which has developed from article IX, section 4(a), requires that one person shall not be burdened with a greater proportion of the taxes, according to the value of his property, than another. It does not permit valuation by taxing officials of property in the same taxing district at a certain proportion of its true value while other property in that district is valued at a substantially lesser or greater proportion. People ex rel. Tedrick v. Allied Oil Corp. (1944), 388 Ill. 219, 57 N.E.2d 859.

Defendants’ contention that the procedure used by the Board and the Department here violates the rule of uniformity is without merit. The rule applies when there is some misconduct, or the assessment was made on a wrong basis, or an excessively high valuation was applied. However, establishing a system which provides for uniformity is a function of the legislature. It is true that courts may protect taxpayers from excessive valuations, knowingly and intelligently made, in violation of the rule. However, this is so only because an intentional violation of the rule of uniformity amounts to constructive fraud. (Ross.) Consequently, when officers, performing duties delegated by the legislature, honestly exercise their judgment, the Constitution forbids valuation by any other authority, including the courts. AUyn.

Uniformity is an ideal which both the legislature and the judiciary have been striving to attain for many years. However, it is apparent that actual uniformity, that is perfect equality amongst taxpayers, is little more than an ideal. The Constitution calls for adjustment of taxation “with a reasonable degree of uniformity, rather than with mathematical equality.” People ex rel. Skidmore v. Anderson (1974), 56 Ill. 2d 334, 340, 307 N.E.2d 391, 395.

In the instant appeal, after the application of the State multiplier, the maximum disparity between townships in Woodford County is 4.88%. Defendants have presented facts which show that they have paid approximately 7% and 4% more in their respective townships in taxes than they would have had township multipliers been applied. However, they have not shown that they have sustained a greater burden of taxes as a result of the application of the multiplier. The disparity in the instant case must be seen as accomplishing a reasonable degree of uniformity, although mathematical equality has not been attained. Nevertheless, it cannot be said that there has been a valuation by taxing officials of one piece of property at a certain proportion of its true value and another in the same taxing district at a substantially greater proportion of its true value. Allied Oil Corp.

Defendants’ contention that the violation of the rule of uniformity in the instant case constitutes a denial of equal protection, and a taking of property without due process, becomes moot in light of our determination that the rule of uniformity was not violated.

Even if we did not consider the point moot it has no merit. Excessive valuation results in discrimination. (Ross.) Violation of the rule of uniformity is indeed a denial of equal protection and constitutes a taking of property without due process. (People ex rel. Toman v. Chicago Union Station Co. (1943), 383 Ill. 153, 48 N.E.2d 524.) However, no such wide disparity exists here as did in Toman and therefore there is no violation of the rule of uniformity, as we have already held further, as we have held, defendants have failed to show that the valuations imposed are excessive. It follows that equal protection and due process have not been violated.

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

Affirmed.

MILLS and GREEN, JJ., concur.


source: Caselaw Access Project

author: JUSTICE O’CONNOR

license: Public Domain

text:
    ROY M. GETSCHOW, Plaintiff-Appellee, v. COMMONWEALTH EDISON COMPANY, Defendant-Appellant.
    First District (1st Division)
    No. 81—2578
    Opinion filed December 20, 1982.

      Laurence D. Lasky, E Willis Caruso, and John W. Treece, all of Isham, Lincoln & Beale, of Chicago, for appellant.
    Paul E. Plunkett, Stanley J. Parzen, and Mayer, Brown & Platt, all of Chicago, for appellee.
   JUSTICE O’CONNOR

delivered the opinion of the court:

Plaintiff brought this action against Commonwealth Edison Company (Edison) for tortious interference with contractual relations. After hearing several days of testimony, the trial court entered judgment for plaintiff in the amount of $295,000, representing both compensatory and exemplary damages. On appeal, defendant contests the court’s findings with respect to liability, as well as the amount and nature of damages awarded.

The record discloses the following facts:

During the early 1970’s, plaintiff entered into the business of representing building trades contractors to potential buyers of their services. Plaintiff sought sales positions with companies in different fields of the building trades which would enable him to sell the products and services of each contractor separately, to present a single bid to an owner on behalf of several or all of his contractor-clients, and to arrange for two or more of his contractors to “co-venture” portions of a construction project. By January of 1976, plaintiff had entered into separate employment contracts with seven contractors, each in a different field. While the terms of these contractual arrangements varied, at the time of Edison’s alleged interference plaintiff was receiving salary plus a percentage commission from five of the seven contractors and a straight commission from the remaining two. Plaintiff had become successful in selling the products and services of his employers to many owners and his sales and commissions had grown from a few thousand dollars in 1972 to more than $20,000 during the 12 months prior to Edison’s claimed interference.

Edison was and is one of the largest customers of building contractors in Chicago due to its extensive construction and maintenance work. In his previous position as the president of an industrial pipefitting concern, plaintiff had worked closely with Edison over a seven-year period, during which time he developed business, personal and social ties with many of the Edison personnel, including its buyers and construction engineers, and Edison was among the many companies that plaintiff later called upon as a salesman for his principals. By the spring of 1976, plaintiff had been calling on Edison’s buyers in this capacity for more than five years, had been successful in placing his contractors on Edison’s approved bidders list and had earned commissions on many successful bids submitted to Edison.

The events leading up to plaintiff’s cause of action against Edison began in March of 1976 with a meeting between plaintiff and Edward Jennett, Jr., sales manager for Johnson Controls, a potential contractor-client. The purpose of the meeting was to discuss a possible employment relationship, and at that time plaintiff apparently mentioned certain “contacts” he had with Edison. At the time of said meeting, Johnson Controls had a bid pending at Edison for work on a new project. It is undisputed that although there was mention of the pending bid, plaintiff did not then or at any other time suggest that he could or would do anything with regard to it.

Jennett reviewed plaintiff’s request for employment with his superior at Johnson, Joseph Lewis. Despite Jennett’s efforts to advise Lewis only of plaintiff’s good faith intentions in seeking a sales position with Johnson, Lewis prepared a memorandum entitled “Mr. Gets-chow’s Offer” relating to plaintiff’s solicitation of Johnson’s business. The memorandum stated:

“*** Mr. Getschow reports that he is an independent Contractor Representative who represents a number of contractors doing work with Commonwealth Edison. *** He reports that he knows the right people at Commonwealth and would be in a position to help us. *** Ned Jennett called me with this information and said that Mr. Getschow needed an answer. My response to Ned’s call was that Mr. Getschow’s request sounded like a payoff.
If, in fact it was a payoff, the answer was a plain and simple ‘no.’ My instructions to Ned were to soft peddle the answer to Getschow; merely put it on the back burner. Ned did just as instructed, however, Mr. Getschow persisted calling 3 or 4 times between March 30, 1976 and April 9, 1976. On Friday, April 9, Mr. Getschow said he needed an answer. *** On Monday, we were called by Commonwealth Edison and informed that the job was awarded to Powers [another contractor].”

Although Jennett was the only individual at Johnson Controls who ever actually talked with plaintiff, Jennett never saw or knew of the existence of the Lewis memorandum prior to the ensuing trial. The trial court ultimately found that the memorandum had “no validity in substance or fact.”

Some time later, in May of 1976, the Lewis memorandum came into the possession of Thomas Ayers, Edison’s chairman. Ayers referred the memo to Glenn Beeman, a vice president in purchasing, who, in turn, referred the matter to H. L. Holmberg “for investigation.” Holmberg reported back the following day, after having spoken with the buyers in Edison’s purchasing department and having found no indication that any payoffs had been made or that plaintiff had been instrumental in securing any Edison contracts for his clients. Holmberg also showed Beeman the “calling card” which plaintiff had distributed to Edison’s purchasing department listing the seven contractors plaintiff represented, and a “Business Placed” memorandum showing when Edison had requested bids from plaintiff’s clients and the dollar amount of business that Edison had done with each during 1974 and 1975. It is clear that no one at Edison ever checked with Jennett or anyone else at Johnson Controls to determine if the suggestion of a “payoff” in the Lewis memo had any factual basis, nor did Edison investigate the existence of any conflicts with respect to plaintiff’s other contractors, although one of them was at that time a principal bidder on the same project as Johnson. There was no evidence adduced at trial that plaintiff had bribed or attempted to bribe any Edison employee; to the contrary, the evidence showed that Edison had an elaborate system of controls for analyzing incoming bids which made “payoffs” almost impossible.

In spite of the fact that Holmberg’s investigation revealed nothing to substantiate the allegations in the Lewis memorandum, Beeman proceeded to draft a letter intended for plaintiff’s contractor-clients. Beeman’s sending of an identical letter to each of plaintiff’s seven contractors constituted the act of “interference” on which plaintiff’s cause of action is based. The letter stated:

“As you know, your company and mine have a long standing business association.
It has recently come to my attention that Mr. Roy M. Gets-chow has indicated, as shown on the attached copy of his calling card, that he represents your company for purposes of our continuing business relationship. I am not aware of the nature of Mr. Getschow’s status with respect to your company, but I wanted to assure you that business is available from Commonwealth Edison Company only on the basis of most favorable price and the best quality.
Further, I want to call to your attention a condition of Commonwealth Edison Company’s EXHIBIT C, GENERAL CONDITIONS, which is included in all of our purchase contracts: Covenant Against Brokerage. The Contractor warrants that no person or commercial agency has been engaged to solicit or secure the Contract, and agrees that the Contractor shall pay no compensation to any person or commercial agency for soliciting or securing the Contract, except in the case of bona fide employees or bona fide established commercial agencies maintained or utilized on a continuous basis by the Contractor for the purpose of securing business generally. For breach of violation of this warranty, the Owner shall have the right to annul the Contract without liability or in its discretion to deduct from the contract price or consideration, or otherwise recover, the full amount of any such compensation paid.
Sincerely,
Glen W. Beeman Vice President.”

Prior to sending the letter to plaintiff’s contractors on May 25, 1976, Beeman called plaintiff in and showed him the draft. At that time plaintiff stated that he did not understand the letter, but that if it was sent he would be terminated by his contractors and his reputation would be damaged. Beeman’s response was that he was not interested in plaintiff’s business generally, but that he would no longer allow plaintiff to call on Edison. Beeman did not tell plaintiff about the “payoff” allegations in the Lewis memo, nor was plaintiff given any opportunity to explain his employment relationship with the seven other contractors. Beeman then mailed eight copies of the letter, one to each of plaintiff’s present employers and one to Johnson Controls. At plaintiff’s request, the parties met again some two weeks later, at which time plaintiff told Beeman that he had already been terminated by some of his contractors and asked if anything could be done to save his business, to which Beeman responded negatively. Within a few months all seven of plaintiff’s employers had terminated their contracts with him.

The trial court found that the Edison letter was the cause of each of the terminations and that the Lewis memorandum was the actual and sole cause of Edison’s action in mailing the letter. The court further found the language in the quoted “Covenant Against Brokerage” to be ambiguous and, as used by Edison for the first and only time against plaintiff, improper because it required that only a full-time employee working 12 months a year and representing a single principal could call on Edison on behalf of a contractor. The brokerage provisions had never been applied against any representative of a seller from the time of its insertion into Edison’s contracts in 1971 until the time of trial, despite the fact that manufacturers’ representatives representing more than one company had called on Edison continuously during that period. The court therefore found that the use of said covenant against plaintiff was a mere “pretense” on Edison’s part to mask its true motivation for the letters — the Lewis memorandum.

Having found that Edison had intentionally and without justification interfered with each of plaintiff’s seven employment contracts, the trial court awarded plaintiff $270,000 in compensatory damages, based on plaintiff’s earnings prior to the interference and upon plaintiff’s testimony concerning his expected future earnings under the contracts. The court also awarded $25,000 in punitive damages, based upon the means used by Edison to interfere with plaintiff’s employers, Edison’s concealment of the Lewis memorandum as the real basis for its action, its failure to investigate into the allegations contained in the memo, and its false pretense in using the Covenant Against Brokerage to justify the interference.

Edison asserts that the trial court erroneously reversed the burden of proving justification for the interference and applied an incorrect legal standard as to the existence of such justification, and also argues that a finding of liability would be improper in any event since its conduct was justified as a matter of law. Neither the record before us nor the applicable law supports defendant’s contentions.

In reaching its determination, the court relied on Belden Corp. v. Internorth, Inc. (1980), 90 Ill. App. 3d 547, 413 N.E.2d 98, setting forth the essential elements of the tort of interference with contractual relations. These include: (1) the existence of a valid and enforceable contract between plaintiff and another; (2) the defendant’s awareness of this contractual relation; (3) the defendant’s intentional and unjustified inducement of a breach of the contract; (4) a subsequent breach by the other, caused by defendant’s wrongful conduct; and (5) damages. 90 Ill. App. 3d 547, 551.

Edison does not dispute that plaintiff had seven valid and enforceable employment contracts at the time it sent the letters, nor does defendant deny its awareness of these contractual relations at that time. Edison contends, however, that the trial court erred in applying the standard applicable to interference with contractual relations as opposed to interference with prospective business advantage since Edison did not induce the “breach” of any contract, but rather, the contracts involved either lapsed or expired by their terms. Edison also submits that since the contracts involved were terminable at will or upon certain notice, plaintiff had no more than a “mere expectancy” of economic gain. Defendant cites that portion of Belden Corp. v. Internorth, Inc. where the court viewed the distinction as “a matter of expectancies” and stated that “as the degree of enforceability of a business relationship decreases, the extent of permissible interference by an outsider increases.” 90 Ill. App. 3d 547, 552.

We believe that the trial court correctly applied the standard applicable to interference with contractual relations. We also note, however, that defendant’s conduct does not fall within the type of “permissible interference” by a bona fide competitor referred to by the court in Belden, and defendant has therefore failed to show how the court’s ruling would have been different under any standard. See Belden Corp. v. Internorth, Inc. (1980), 90 Ill. App. 3d 547, 552.

Illinois courts have long held that maliciously causing a breach of contract terminable at will is" actionable (London Guarantee & Accident Co. v. Horn (1903), 206 Ill. 493, 69 N.E. 526) and governed by the standards for interference with contractual relations. (W. P. Iverson & Co. v. Dunham Manufacturing Co. (1958), 18 Ill. App. 2d 404, 152 N.E.2d 615; B. R. Paulsen & Co. v. Lee (1968), 95 Ill. App. 2d 146, 237 N.E.2d 793; accord, Ancraft Products Co. v. Universal Oil Products Co. (1980), 84 Ill. App. 3d 836, 405 N.E.2d 1162.) These cases make clear that the termination of a contract, as opposed to a “breach,” is enough to provide a cause of action. As stated in Iverson, the gist of the action is the malicious interference in the contractual relation between plaintiff and another — that the defendant’s interference caused the third party to do an act which it otherwise would not have done. This is so even though the third party may have had the right so to act had the malicious interference not been exercised. (18 Ill. App. 2d 404, 417; accord, Bergfeld v. Stork (1972), 7 Ill. App. 3d 486, 288 N.E.2d 15.) It is also well settled that “malice,” when used in this context, does not require a showing of ill will, hostility or an intent to injure; plaintiff need only show that the defendant acted intentionally and without just cause. Amalgamated Financial Corp. v. Atlantis, Inc. (1982), 105 Ill. App. 3d 379, 381, 434 N.E.2d 417, citing W. P. Iverson & Co. v. Dunham Manufacturing Co. (1958), 18 Ill. App. 2d 404.

In dealing with substantially similar conduct by a defendant which caused the modification of an existing contract between plaintiff and another, the Seventh Circuit in Hannigan v. Sears, Roebuck & Co. (7th Cir. 1969), 410 F.2d 285, cert. denied (1969), 396 U.S. 902, 24 L. Ed. 2d 178, 90 S. Ct. 214, held that the defendant could reasonably have been found to have induced a “breach of contract within the true meaning of the tort” by coercively interfering in the relationship between plaintiff and the third party. There, the court stated:

“To us, there is no legally significant distinction between unabashed third party conduct which induces one party to out-rightly repudiate and breach its contract with another and subtle third party conduct which achieves essentially the same result ***.
To distinguish between conduct which directly causes a breach of contract and unjustifiable coercive conduct which effects the same result without a breach would overly limit the significance of the tort of inducing breach of contract and invite today’s superior economic forces to freely interfere with contractual relationships without fear of legal reprisal.” (410 F.2d 285, 291.)

Accord, Venturini v. Affatato (1980), 84 Ill. App. 3d 547, 405 N.E.2d 1093.

Plaintiff here was a party to seven valid employment contracts at the time of Edison’s interference. Many of these had been in existence for several years and all had been continuously renewed since their inception. Plaintiff also produced testimony at trial of his overall satisfactory relationship with each of the contractors. Based on these facts, plaintiff had a certain and enforceable expectation of receiving the benefits of these contracts for an indefinite period. The only issue with respect to liability, therefore, is whether Edison’s conduct was intentional and without just cause.

The trial court in its written opinion cited Swager v. Couri (1979), 77 Ill. 2d 173, 395 N.E.2d 921, in which the supreme court held that lack of justification is an element of plaintiff’s case which must be pleaded and proved. (77 Ill. 2d 173, 179.) We agree with the trial court that plaintiff sustained his burden.

Whether there is just cause for interference depends upon a number of factors, including the interest sought to be protected and the methods used. (See Herman v. Prudence Mutual Casualty Co. (1969), 41 Ill. 2d 468, 244 N.E.2d 809; Supreme Savings & Loan Association v. Lewis (1970), 130 Ill. App. 2d 16, 264 N.E.2d 857; Connaughton v. Gertz (1981), 94 Ill. App. 3d 265, 418 N.E.2d 858.) As stated in Connaughton, the third party claiming the privilege must be acting to protect a conflicting interest that is considered to be of equal value to or greater than plaintiff’s contractual rights, and the third party’s acts to bring about the breach must be legal acts and not unreasonable in the circumstances. 94 Ill. App. 3d 265, 270.

Edison contends that its interest in sending the letters was to protect its policy of not dealing through brokers. The trial court rejected this purported justification, however, based in part on the testimony of defendant’s own employees that they did not consider plaintiff to be a broker, as well as Edison’s course of conduct with respect to plaintiff for several years prior to the interference. The trial court also found that Edison’s actions were unreasonable under the circumstances. These determinations are amply supported by the record.

Contrary to defendant’s assertions, this case involves more than Edison’s refusal to deal with plaintiff. Such a right, if it existed, could have been protected by Beeman’s instructions to Edison’s employees not to deal with plaintiff. Nor did Edison’s letters merely transmit “truthful information.” Rather, the trial court found that Edison, by its letters, effected “economic duress” on plaintiff’s employers causing each of them to terminate their contract with plaintiff. This fact was attested to by several of the contractors at trial. In addition, the record contains letters written to Edison expressing the contractors’ intentions to comply with its “Covenant Against Brokerage” and apologizing for even the appearance of impropriety in that regard. This was even true of one contractor which plaintiff had never represented at Edison pursuant to his employment arrangement. Based on the foregoing, the trial court correctly found defendant liable for interference with plaintiff’s contractual relations. See Hannigan v. Sears, Roebuck & Co. (7th Cir. 1969), 410 F.2d 285, and Pure Milk Association v. Kraft Foods Co. (1955), 8 Ill. App. 2d 102, 130 N.E.2d 765.

Turning to the issue of damages, Edison argues that the trial court’s award was based on speculation and was not supported by the evidence. Edison also argues that exemplary damages are improper in this case.

Edison first contends that the trial court erred in accepting plaintiff’s projections which were based on a six-month period immediately preceding the interference when plaintiff’s earnings from both salary and commissions were at an all-time high, that the court considered gross, rather than net, profits as the basis for its calculations and improperly projected these figures for a Mlz year period to determine lost profits. Edison also challenges the inclusion of retainers and projected commissions from Edison projects in plaintiff’s calculations of lost profits as being inconsistent with its purported right not to deal with plaintiff. Lastly, Edison points to alleged inconsistencies in plaintiff’s testimony and proffered exhibits which, it contends, induced the trial court to premise an award based on wholly erroneous figures.

After hearing the evidence, the court awarded $270,000 in compensatory damages. While its precise method for arriving at this figure is not clear from the record, the court had before it plaintiff’s income and expense records for the 41/2 years prior to Edison’s interference, Federal records indicating growth in the construction industry during that period and the period subsequent to the interference, and plaintiff’s testimony as to expected future profits which was based on both his lengthy experience in the industry and his sales efforts shortly before the interference. The court’s language also indicates that it took account of inflationary factors from the time of the interference to the time of judgment. (See Raines v. New York Central R.R. Co. (1970), 129 Ill. App. 2d 294, 302, 263 N.E.2d 895, rev’d on other grounds (1972), 51 Ill. 2d 428, cert. denied (1972), 409 U.S. 983, 34 L. Ed. 2d 247, 93 S. Ct. 322, and Republic Gear Co. v. Borg-Warner Corp. (7th Cir. 1969), 406 F.2d 57, 62, cert. denied (1969), 394 U.S. 1000, 22 L. Ed. 2d 777, 89 S. Ct. 1591.) In determinations such as the one before us, our courts have consistently recognized certain limiting factors: first, since the loss of profits is not a matter ordinarily susceptible to highly detailed direct proof, inferential proof must be admitted to establish the amount of damages; and second, the assessment of damages by a trial court sitting without a jury will not be set aside unless manifestly erroneous. (Monotronics Corp. v. Baylor (1982), 107 Ill. App. 3d 14, 17, 436 N.E.2d 1062; Vendo Co. v. Stoner (1974), 58 Ill. 2d 289, 321 N.E.2d 1, cert. denied (1975), 420 U.S. 975, 43 L. Ed. 2d 655, 95 S. Ct. 1398; Schatz v. Abbott Laboratories, Inc. (1972), 51 Ill. 2d 143, 281 N.E.2d 323.) These factors take on particular relevance where, as here, the trial court’s task was to compute a damage award based on evidence of a constantly growing and developing enterprise. Our review of that determination is further limited in the instant case by the summary nature of plaintiff’s exhibits and the fact that neither these exhibits nor plaintiff’s testimony with regard to lost earnings was challenged at trial. We have carefully reviewed the record and will examine each of Edison’s contentions in light of the above observations.

The trial court had before it records reflecting the gradual growth of plaintiff’s business from its formation in 1971 to the time of Edison’s interference in 1976, when plaintiff was involved in ongoing employment relationships with seven different contractors. It is undisputed that plaintiff’s income from both salary and commissions nearly doubled during the period from mid-1975 to May of 1976 as a result of his securing the last three of his seven contracts during that time. At trial, plaintiff also testified as to his conversations shortly before Edison’s interference with several owners in the area who later carried out substantial construction work. Based on these contacts, upon which he could reasonably have anticipated new work, proven past performance and Federal records evidencing the dramatic increase in nonresidential construction in the years 1977 through 1980, plaintiff testified that his anticipated earnings for the second half of 1976 would equal his actual earnings of approximately $25,000 in the first half of that year, and then projected a 10% increase in earnings for the succeeding three years.

Edison now contends that plaintiff’s projections constituted pure speculation when based on a single six-month period. Edison also points to plaintiff’s omission of business expenses for the first half of 1976 in his summary exhibit which, it contends, when combined with plaintiff’s testimony resulted in fatal miscalculations by the trial court. Edison’s present challenge merely assumes, however, that the court accepted plaintiff’s testimony and projections in a vacuum, a conclusion for which we find no support in the record.

As previously noted, the court had an opportunity to view the complete history of plaintiff’s business activity beginning in 1972 and steadily progressing to an all-time high in 1976, when it was virtually halted as a result of defendant’s conduct. Under the circumstances, we believe that the trial court could properly take account of the substantial increase in activity over the 12 months preceding Edison’s interference in formulating a reasonable basis upon which to project lost profits and that such would not indicate a disregard of plaintiff’s actual experience, as defendant contends.

We similarly find no support for defendant’s contention that plaintiff’s failure to account for business expenses for a six-month period resulted in a damage award based on gross earnings which failed to recognize any future expenses. While it is true that the assessed damages for lost profits are to be based on net profits or a reasonable approximation thereof and not on gross profits (Henry’s Drive-In, Inc. v. Anderson (1962), 37 Ill. App. 2d 113, 125-27, 185 N.E.2d 103; Eastman Kodak Co. v. Southern Photo Materials Co. (1927), 273 U.S. 359, 71 L. Ed. 684, 47 S. Ct. 400), the trial court clearly had before it sufficient information upon which to base such an approximation. Net profits constitute the difference between gross profits and the expense of operating the business. (Eastman Kodak Co. v. Southern Photo Materials Co. (1927), 273 U.S. 359, 71 L. Ed. 684, 47 S. Ct. 400.) Plaintiff’s records, which were available to the trial court, show that his expenses remained low and relatively constant from 1972 through 1975, despite the fact that his earnings more than doubled during that period. The court could take notice of the fact that the nature of plaintiff’s work as a salesman for building trades contractors enabled him to maintain low overhead costs which were not significantly affected by large fluctuations in his gross earnings. Where such expenses are nominal or fixed, a plaintiff’s failure to introduce evidence of these expenses will not automatically render the resulting damage award invalid. (Schatz v. Abbott Laboratories, Inc. (1972), 51 Ill. 2d 143, 148; Hannigan v. Sears, Roebuck & Co. (7th Cir. 1969), 410 F.2d 285, 293.) All that is required is that the court use a reasonable basis for computation and such a reasonable basis shall be sufficient to establish damages even though the result is only approximate. Further, a defendant whose wrongful conduct caused the difficulty in ascertaining the precise extent of plaintiff’s actual damages will not be heard to complain of the resulting uncertainty. Henry’s Drive-In, Inc. v. Anderson (1962), 37 Ill. App. 2d 113, 126; Eastman Kodak Co. v. Southern Photo Materials Co. (1927), 273 U.S. 359, 71 L. Ed. 684, 47 S. Ct. 400.

We have reviewed the record with regard to defendant’s remaining contentions and cannot say that the trial court failed to use a reasonable basis for its compuations or that its award was manifestly erroneous. The nature of plaintiff’s employment as a salesman and the fact that his business was obtained through the competitive bidding of his employers required the court to accept largely inferential proof on the question of lost profits. There is no question but that Edison’s conduct caused the almost immediate termination of each of plaintiff’s contracts and defendant has failed to put forward any evidence, other than that proffered by plaintiff, which would prove with precision the amount that plaintiff would have earned but for defendant’s wrongful conduct. Since we have found that the trial court’s basis for projecting lost profits did not lack the requisite certainty, we also hold that the court’s projection of plaintiff’s lost profits for 4V2 years into the future was not improper. See Henry’s Drive-In, Inc. v. Anderson (1962), 37 Ill. App. 2d 113, 127.

Defendant lastly challenges the court’s assessment of exemplary damages. We believe that under the facts and circumstances of this case such damages were properly assessed and awarded. It is clear that punitive damages are within the discretion of the trial court when, as here, the wrongful act complained of is characterized by wantonness, malice, oppression or circumstances of aggravation. (Jensen v. Chicago & Western Indiana R.R. Co. (1981), 94 Ill. App. 3d 915, 937, 419 N.E.2d 578.) The purpose of such damages is to deter the wrongdoer and others from repeating the wrongful conduct. (Eshelman v. Rawalt (1921), 298 Ill. 192, 197, 131 N.E. 675.) The trial court specifically found aggravating circumstances surrounding Edison’s conduct, which findings are supported in the record. We find that defendant’s intentionally coercive and oppressive conduct warranted the court’s assessment of punitive damages in the instant case.

Although not pertinent to the merits of this appeal, we feel compelled to call the attention of the appellate bar to the provision of the supreme court rule covering the contents of briefs (87 Ill. 2d R. 341(a)), which states:

“Footnotes, if any, shall be used sparingly.”

In this case appellant’s brief contains 39 footnotes, appellee’s, 41, and appellant’s reply brief, 20. Under no circumstances can this use of 100 footnotes be described as “sparingly.”

Judgment affirmed.

CAMPBELL, P.J., and GOLDBERG, J., concur.


author: JUSTICE JIGANTI

text:
    NANCY WEED, Plaintiff-Appellant, v. REGIONAL TRANSPORTATION AUTHORITY, Defendant-Appellee.
    First District (4th Division)
    No. 81—3006
    Opinion filed December 30, 1982.
    Richard M. Kates, of Chicago, for appellant.
    Jeremiah Marsh, Michael Schneiderman, Michael M. Conway, John L. Rogers III, and Albert C. Maule, all of Hopkins & Sutter, of Chicago (Carl J. Frank, General Counsel of the Regional Transportation Authority, of counsel), for appellee.
   JUSTICE JIGANTI

delivered the opinion of the court:

This action challenges the validity of a Regional Transportation Authority (RTA) ordinance which resulted in a passenger fare increase in the area served by the RTA. The plaintiff, Nancy Weed, brought this declaratory judgment action on her own behalf and on behalf of the class of persons who patronize the railroads within the RTA region. After cross-motions for summary judgment were presented the trial court granted summary judgment in favor of the RTA and denied summary judgment in favor of Weed. It is from this ruling that the plaintiff appeals.

The RTA is a State-created agency charged with the responsibility of operating mass transportation services in a six-county region of northeastern Illinois. The RTA’s statutory authority is set forth in the RTA Act (Ill. Rev. Stat. 1981, ch. 1112/3, par. 701.01 et seq.). Section 5.01 of the RTA Act is at issue in this case and provides in pertinent part:

“(a) The Authority shall provide for and encourage participation by the public in the development and review of public transportation policy, and in the process by which major decisions significantly affecting the provision of public transportation are made.
* * *
(d) Unless such items are specifically provided for in the annual budget and program which has been the subject of public hearing, as provided in Section 4.01 of this Act, the Board shall hold public hearings at which citizens may be heard prior to the providing for or allowing, by means of any purchase of service agreement or any grant pursuant to Section 2.02 of this Act, any general increase or series of increases in fares or charges for public transportation, whether by the Authority or by any transportation agency, which increase or series of increases within any twelve months affects more than 25% of the consumers of service of the Authority or of the transportation agency; or so providing for or allowing any discontinuance of any public transportation route, or major portion thereof, which has been in service for more than a year.” Ill. Rev. Stat. 1981, ch. 1112/s, par. 705.01.

The RTA fiscal year at issue in this case ran from October 1, 1980, until September 30, 1981. In April 1980, the RTA publicized its proposed five-year program for fiscal years 1981-1985, as well as its estimated budget for 1981. In December 1980, the RTA published a revised version of the five-year program, forecasting fare increases and service cuts due to the elimination of subsidies from the State of Illinois.

On November 22, 1980, the RTA gave public notice that it would be holding public hearings concerning a two-stage fare increase. The public advertisement advised interested persons of proposed fare increases scheduled to take effect on January 1, 1981, and August 1, 1981. The hearings were conducted at 11 different locations in the RTA region on December 11, 1980. Approximately 2,500 members of the public attended, including approximately 500 persons who offered testimony concerning the proposed fare increases.

On December 22, 1980, the RTA Board adopted an ordinance providing for a three-stage fare increase. The ordinance allowed for the same overall fare increase that was advertised prior to the public hearings but staggered the increase over three stages rather than two. Specifically, the ordinance provided for fare increases which would become effective on January 1, 1981, April 1, 1981, and August 1, 1981. On January 1, 1981, the first of the three fare increases went into effect.

The RTA Board subsequently voted to defer the April 1, 1981, fare increase because of efforts being made to obtain financing through the State legislature. However, the Illinois General Assembly adjourned its spring 1981 session on June 30, 1981, without enacting any legislation relating to RTA funding.

On July 2, 1981, the RTA Board adopted a new ordinance providing for a 121/2% fare increase plus a 40% surcharge to be operative from July 6, 1981, until September 30, 1981. The fare increase and surcharge went into effect on July 6, 1981.

The plaintiff’s position both at the trial level and on appeal is that the July 2, 1981, ordinance was invalid because no public hearing had been conducted prior to the enactment of the 40% surcharge. The plaintiff does not challenge the propriety of the 121/2% fare increase. Specifically, the plaintiff contends that the surcharge was invalid because: (1) a public hearing specifically addressing the surcharge was never held because the December 11 public hearings were inapplicable to the subsequently adopted surcharge; and (2) the plaintiff was denied due process of law where the surcharge was adopted without a prior public hearing.

In addressing the first issue raised by the plaintiff, we find that the ordinance at issue was properly adopted pursuant to the December 11 public hearings and that the RTA Board complied with the statutory hearing requirement. Granted, the public advertisements in this case did .not refer directly to a 40% surcharge; however, we find this fact to be irrelevant for four reasons.

First, the statute does not require that the public advertisements specifically detail the exact amounts of the proposed increases to be discussed at the upcoming hearings. While the plaintiff is correct in stating that a public hearing must be conducted prior to the imposition of a fare increase not specifically provided for in the RTA annual budget (Ill. Rev. Stat. 1981, ch. 1112/3, par. 705.01(d)), we disagree with the plaintiff’s contentions that we should impose a detailed public advertisement requirement. The statutory language does not require that the advertisement detail the exact amount of the proposed fare increases and this court cannot inject provisions which the legislature did not choose to include in the statute. Droste v. Kerner (1966), 34 Ill. 2d 495, 217 N.E.2d 73, appeal dismissed (1967), 385 U.S. 456, 17 L. Ed. 2d 509, 87 S. Ct. 612; Young v. Marcin (1978), 66 Ill. App. 3d 576, 384 N.E.2d 404.

Second, the December 11 hearings were held to discuss fare increases that were proposed to take place during the same fiscal year as the one in which the surcharge was ultimately imposed. We believe that this was adequate notice to the public under the statute. Illustratively, the December 11 hearings were heavily attended and hundreds of persons saw fit to express their opinions concerning proposed fare increases.

The third reason we believe the December 11 hearings to have been adequate to meet the public hearing requirement for the surcharge is that even if the public had been belligerently opposed to any publicized increases, the statute does not provide for any sort of public veto if the public is displeased. Rather, the RTA Board need not follow the public opinion expressed at the hearings and may consequently enact whatever fares it deems fit. Thus, where the public had already been heard on the fare increase issue and could not invalidate an otherwise lawfully adopted fare increase simply because they did not like it, we do not see where a further hearing was necessary.

The fourth and final observation that leads us to believe that a further hearing was not required is that the fares that were imposed pursuant to the July 2 ordinance were not significantly higher than those that were to become effective on August 1 under the December 22 ordinance. While the July 2 fares seem quite a bit higher than those that became effective January 1, this is because the Board voted to defer the April 1 increases while awaiting a legislative solution to the funding problem. In making this observation, we are not adopting the plaintiff’s position that a hearing must be conducted whenever there is a “substantial deviation” between advertised fares and fares that are ultimately imposed. This “substantial deviation” language is arguably derived from zoning law where citizens’ private property interests are at stake (see, e.g., Kirk v. Village of Hillcrest (1973), 15 Ill. App. 3d 415, 304 N.E.2d 452), and we will not adopt it here where we are addressing dissimilar interests, especially where the statute is silent regarding any such requirement. Rather, we are simply observing that on December 11, the public had an adequate opportunity to respond to proposed fare increases that were very similar to those that became effective under the July 2 ordinance. We only offer this observation as further support of our conclusion that another public hearing was unnecessary.

The plaintiff’s final contention on appeal is that she and her class members were denied due process of law where the surcharge was adopted without a prior public hearing specifically addressing the surcharge. We disagree. Procedural due process will only attach were liberty or property interests are at stake. Specifically, a party must have a legitimate claim of entitlement rather than a mere abstract need or desire for some benefit in order to invoke a due process hearing. (Board of Regents v. Roth (1972), 408 U.S. 564, 33 L. Ed. 2d 548, 92 S. Ct. 2701; see also Spalding v. City of Granite City (1953), 415 Ill. 274, 113 N.E.2d 567.) In the instant case, the plaintiff has no legitimate claim of entitlement to any specific fares. Rather, she may either elect to use or not to use the services of the RTA and her desire for lower fares is simply an abstract desire, not a constitutionally protectable property interest.

We find that neither the RTA Act nor the due process clause mandates an additional public hearing in this case, and we affirm the judgment of the trial court.

Affirmed.

JOHNSON, P.J., and ROMITI, J., concur.


author: PRESIDING JUSTICE WHITE

text:
      In re ANNEXATION TO THE CITY OF PROSPECT HEIGHTS.—(Robert W. Holtz et al., Petitioners-Appellants, v. The Village of Wheeling et al., Objectors-Appellees.)
    First District (3rd Division)
    No. 81—353
    Opinion filed December 30, 1982.
    Friedman & Koven, of Chicago (Donald J. Kreger, Kenneth C. Shepro, and Howard D. Lieberman, of counsel), for appellants.

      Arvey, Hodes, Costello & Berman, of Chicago (Herman Smith and George L. Grumley, of counsel), for appellees.
   PRESIDING JUSTICE WHITE

delivered the opinion of the court:

On May 30, 1980, George J. Priester, Veta L. Priester and Waukee Realty Company, Inc., filed with the village clerk of the village of Wheeling, their petition (Wheeling petition) requesting that certain territory owned by the Priesters (Priester tract) be annexed by ordinance to the village of Wheeling. The Wheeling petition was filed pursuant to section 7 — 1—8 of the Illinois Municipal Code (Ill. Rev. Stat. 1979, ch. 24, par. 7 — 1—8). Under that section annexation proceedings are initiated by petition and are finalized by the adoption of an ordinance by the corporate authorities of the municipality to which annexation is sought.

Petitioners-appellants are owners and residents of an area adjacent to the Priester tract. On June 20, 1980, they filed in the circuit court of Cook County a petition (Prospect Heights petition) under section 7 — 1—2 of the Illinois Municipal Code (Ill. Rev. Stat. 1979, ch. 24, par. 7 — 1—2), seeking to annex to the city of Prospect Heights certain territory that included substantially all of the Priester tract. Section 7 — 1—2 provides for the initiation of the annexation process by filing a written petition signed by a majority of owners of record in the territory to be annexed and a majority of the electors residing in such territory, and requires a court hearing on the validity of the petition.

On July 7, 1980, prior to the court hearing on the Prospect Heights petition, Wheeling passed ordinance No. 1688 annexing the Priester tract to the village of Wheeling pursuant to the Wheeling petition. Shortly thereafter the Priesters and the village of Wheeling (objectors) filed objections to the Prospect Heights petition in the circuit court of Cook County. On September 10, 1980, the Priester objectors moved to dismiss the Prospect Heights petition alleging, inter alia, that “[t]he Priester Tract having already been annexed by and being now a part of the Village of Wheeling, it may not, *** be annexed to the City of Prospect Heights.” Petitioners’ response to the motion to dismiss included an affidavit and a tract examination prepared by the Chicago Title and Trust Company which show, they contend, that the Wheeling petition was not signed by all of the record owners. Petitioners then filed a motion for partial summary judgment alleging that the Wheeling annexation was invalid because the Wheeling petition was not executed by all the owners of record of the subject territory as required by section 7 — 1—8 of the Illinois Municipal Code. If, as petitioners allege, the Wheeling petition was not signed by all record owners as required by section 7 — 1—8, then the petition and the resulting ordinance are void for want of jurisdiction. (See City of East St. Louis v. Touchette (1958), 14 Ill. 2d 243, 249, 150 N.E.2d 178.) Under such circumstances the Wheeling petition would not bar the Prospect Heights petition.

On January 16, 1981, the trial court granted objectors’ motion to dismiss, struck the affidavit and denied petitioners’ motion for summary judgment, accepting objectors’ contention that the validity of a completed municipal annexation can only be attacked directly in a quo warranto action. Petitioners appeal from that order.

First it is noted that this action was not initiated as a collateral attack on the Wheeling annexation. Rather it was objectors who introduced the issue of the validity of that annexation by pleading it as a bar to this Prospect Heights petition, thereby thrusting that issue upon the trial court to be resolved in order to determine its jurisdiction to hear this petition. (See City of Countryside v. Village of La Grange (1962), 24 Ill. 2d 163, 180 N.E.2d 488.) Petitioners point out that when their petition was filed, no annexation had taken place. An action then in quo warranto against Wheeling therefore would not lie. Further, the general rule relied upon by objectors, that the validity of a municipal annexation can only be attacked directly by a quo warranto action, does not apply where an annexation is void from its inception. Illinois cases hold that under such circumstances an ordinance is subject to direct or collateral attack whenever its authority is invoked in a judicial proceeding. (City of Countryside v. Village of La Grange (1962), 24 Ill. 2d 163, 180 N.E.2d 488; People ex rel. Village of Worth v. Ihde (1961), 23 Ill. 2d 63, 177 N.E.2d 313; People ex rel. City of Des Plaines v. Village of Mount Prospect (1975), 29 Ill. App. 3d 807, 331 N.E.2d 373; In re Annexation to Village of North Barrington (1972), 8 Ill. App. 3d 50, 288 N.E.2d .242.) The facts of La Grange are similar to the facts here. In that case the city of Countryside initiated a court proceeding to annex certain territory. Objections were raised to the proposed annexation, as was done in the case at bar, alleging that the territory in question was subject to a prior petition to annex to the village of McCook. Our supreme court held that Countryside could defend against this attack on its annexation petition by challenging the validity of the prior McCook petition.

Objectors’ attempts to distinguish these cases from the case at bar are not successful. They point out that Ihde and Mount Prospect were brought in quo warranto, but no reason is advanced and no authority cited for limiting collateral attacks on prior annexations to quo warranto. Further, neither La Grange nor North Barrington was a quo warranto action. As to North Barrington, objectors argue that the court invalidated the annexation petition because of a prior annexation as was done here by the trial court. We note, however, that in both La Grange and North Barrington there was an examination of the underlying facts of the prior annexation as they related to the petition in question. This the trial court in the instant case failed to do. Granting objectors’ motion to dismiss on the ground that petitioners cannot here place in issue the validity of the Wheeling annexation because such a challenge can be made only by quo warranto was error. Denial of petitioners’ motion for partial summary judgment on this ground was also error.

Objectors raise a number of alternative reasons why the decision of the trial court should be affirmed. Objectors first contend that petitioners lack standing to challenge the Wheeling petition and ordinance. However, the cases upon which objectors rely all involve standing to bring a quo warranto action and, therefore, are inapposite.'The present action was not brought in quo warranto, and we have already concluded that under the facts of this case, petitioners were not restricted to that remedy.

Objector, village of Wheeling, also contends that Prospect Heights’ annexation is barred by the pendency of a petition to disconnect involving the only boundary which can establish the contiguity of the proposed annexation territory to Prospect Heights. Wheeling argues that if the disconnection sought is granted, there will be no contiguity whatsoever between the subject territory and the city of Prospect Heights, and for the court to entertain this petition at this time would be a nugatory act. Wheeling cites In re Village of Willowbrook (1965), 62 Ill. App. 2d 45, 210 N.E.2d 25. In that case the appellate court affirmed the dismissal of an annexation proceeding because an appeal was pending from a prior disconnection action “between the same parties concerning the same or similar subject mater.” (Emphasis added.) (In re Village of Willowbrook (1965), 62 Ill. App. 2d 45, 47.) The only parties to this appeal involved in the action to disconnect are the Priesters. There is no reason to bar this action because of the pendency of their petition to disconnect. Furthermore, the right to disconnect will be decided on the basis of the factual situation at the time of the hearing, not that existing at the time of the filing of the petition. (La Salle National Bank v. Village of Burr Ridge (1967), 81 Ill. App. 2d 209, 225 N.E.2d 33.) Since there is no identity of parties Wheeling’s argument must fail. An uncompleted disconnection action, therefore, affords objectors no ground for the dismissal of the Prospect Heights petition. See In re Petition of Cox (1961), 32 Ill. App. 2d 142, 177 N.E.2d 247 (abstract).

The Priester objectors also argue that the failure of petitioners to pray for the annexation of all adjacent highways in the Prospect Heights petition renders their petition defective under section 7 — 1—1 of the Elinois Municipal Code (Ill. Rev. Stat. 1979, ch. 24, par. 7—1—1) and, therefore, the trial court’s order of dismissal should be affirmed. In re Annexation to Village of Green Oaks (1978), 58 Ill. App. 3d 842, 844, 374 N.E.2d 854, is dispositive of this argument. There, a petition to annex failed to include all portions of adjacent highways, and the court held that under section 7 — 1—1 of the Municipal Code, such highways are annexed even though not in the legal description in the petition, and, therefore, “it was not necessary that the boundary of the area annexed be described so as to extend to the far side of any adjacent highway.” Therefore, the Priester objectors’ argument here cannot provide a basis for affirming the trial court’s order.

Objectors finally contend that the alleged defect in the Wheeling petition regarding the required number of signatures is of no legal consequence. Objectors maintain that even if it is true that one record owner did not sign the Wheeling petition, such a defect would be de minimus. This argument was never ruled on by the trial court, and the issue can be addressed on remand in the trial court’s determination of the validity of the Wheeling petition.

For the reasons set forth above we reverse the trial court’s order granting the motion to dismiss, vacate the denial of the motion for partial summary judgment, and remand this cause to the trial court for further proceedings consistent with this opinion.

Reversed and remanded.

McNAMARA and RIZZI, JJ., concur.


author: PRESIDING JUSTICE CAMPBELL

text:
      In re MARRIAGE OF MARTHA PANCNER, Petitioner-Appellant, and FERDINAND PANCNER, Respondent-Appellee.
    First District (1st Division)
    No. 81—2092
    Opinion filed December 27, 1982.
    Rehearing denied January 31, 1983.

      Grant and Grant and Jerome Marvin Kaplan, both of Chicago, for appellant.
    Lawrence Jay Weiner and Fredric Bryan Lesser, both of Weiner, Neuman, Rosenblum & Spak, and Samuel A. Rinella and Barry A. Schatz, of Rinella & Rinella, all of Chicago, for appellee.
   PRESIDING JUSTICE CAMPBELL

delivered the opinion of the court:

Petitioner, Martha Pancner, appeals from the judgment entered in the dissolution of marriage proceedings. On appeal petitioner raises the following issues: (1) whether the trial court erred in determining that the parties’ gift business was nonmarital property; (2) whether the marital property was divided in just proportions; (3) whether the maintenance awarded to the wife was sufficient; and (4) whether the trial court erred in ordering each party to pay their own attorney fees.

Martha Pancner, petitioner, and Ferdinand Pancner, respondent, were married on March 13, 1970. At the time of the marriage, the wife was 54 years old and the husband was 78 years old. Respondent had been married to his first wife for 49 years before her death in 1967. He and his first wife had two sons and five grandchildren. Since 1913 respondent owned and operated an import store in Chicago where he sold gifts, books, crystal, stationery and a variety of other goods. In addition, respondent was an agent for a foreign currency service known as “Tuzex.”

Petitioner was bom in Czechoslovakia, where she attended college. She was employed for 16 years as assistant curator of art in the Art Institute of Prague. She spoke Czech, German and English. The wife had been married twice before she met respondent. One marriage ended in death, the other in divorce. She had two sons by her first marriage. In 1966, petitioner emigrated to the United States. She met respondent while she was working as a waitress in a restaurant near his gift shop. For four months prior to their marriage, she was employed part-time arranging window displays in the gift shop.

Petitioner testified that during the marriage she maintained the marital home and cooked and cared for her husband. She testified that she also performed numerous services for the business including taking inventory of merchandise, filling out Tuzex forms, maintaining the business’ correspondence in German and Czech, cooking lunch for the shop’s employees and writing articles and catalogs about the shop’s crystal and books. The marital residence was above the gift shop.

The parties lived together from the time of the marriage until June 26, 1980, when they separated. In August 1980 petitioner went to the Toronto, Canada, office of the Swiss bank at which the parties had an account and, through her power of attorney over the account, she closed the account and transferred the funds into the account of her son by a previous marriage. She rescinded the order to place the funds in her son’s name and in November, placed the funds in an account in her own name. Judgment for dissolution of marriage was entered on August 18, 1981.

The court found the following property of petitioner to be nonmarital and awarded it to her: $18,500 in several savings accounts and certificates of deposit in her name, several art objects that were gifts from her parents, and two rings and a camera that were gifts from respondent. The court found the following property of respondent to be non-marital and awarded it to him: the F. Pancner Gift and Import business, real estate which housed the gift business and marital residence valued at $100,000, and a certificate of deposit of $20,000 in his name. The court found the following property to be marital property: a condominium apartment in Florida valued at $65,000, a 1971 Buick automobile, $70,000 in savings accounts and certificates of deposit in the name of the husband, $9,000 in a business savings account, an account in the husband’s name at Credit Suisse of approximately $150,000, the inventory of F. Pancner Gift and Import business valued at $50,000, $40,000 in tax liability, and improvements to real estate inhabited by the wife’s parents located in Prague, Czechoslovakia.

The trial court awarded petitioner the Florida condominium, the automobile and the real estate in Prague. The trial court awarded respondent the savings accounts and the certificates of deposit held in his name, the business accounts and the inventory of his business. The trial court also awarded respondent the Swiss bank account and made him liabile for the tax liability resulting therefrom. The court then awarded petitioner $36,000 in maintenance to be paid at the rate of $600 per month for 60 months, such payments to terminate upon the death of either party.

Petitioner first contends that the trial court erred in finding the business to be nonmarital property belonging to the respondent. Testimony at trial revealed that respondent had been in business for 60 years prior to the marriage and that his business had been located at its present address for over 40 years. Petitioner contends that the fact that both paties were designated as proprietors of the business on their joint tax returns shows an intent to convey the business as a gift to the marriage. Petitioner also argues that the business became marital property because of her contributions of time and knowledge of Czechoslovakian crystal which was reflected in the business’ increased profitability over the years of the marriage.

The designation of ownership on the parties’ tax returns is too ambiguous in and of itself to evidence an intention to convey a gift to the marriage. (See In re Marriage of Rogers (1981), 85 Ill. 2d 217, 422 N.E.2d 635.) The trial court may well have concluded that petitioner’s efforts to improve respondent’s nonmarital property were not sufficiently substantial nor directly responsible for its increase in net profits so as to convert the business into marital property. (In re Marriage of Kennedy (1981), 94 Ill. App. 3d 537, 547, 418 N.E.2d 947, 954.) Under the evidence of this case, the trial court did not err in determining that the business was nonmarital property. We note that under section 503(c)(1) of the Illinois Marriage and Dissolution of Marriage Act a spouse’s contributions to the appreciation in value of the other spouse’s nonmarital property is one of the factors to consider in the division of marital property. Ill. Rev. Stat. 1979, ch. 40, par. 503(c)(1).

Petitioner argues in the alternative that by finding the business to be nonmarital but the inventory to be marital property, the court improperly attributed dual characteristics to the same property in violation of the supreme court decision in In re Marriage of Smith (1981), 86 Ill. 2d 518, 427 N.E.2d 1239. Petitioner reasons that since the inventory which the court determined to be marital property was commingled with the nonmarital property, the business, the entire commingled property becomes marital property under Smith.

Respondent argues that Smith does not prevent the classification at bar. Respondent contends that a business’ inventory is frequently considered to be a distinct asset from the business itself. Respondent argues that Smith rejected the concept that property may have the dual characteristics when applied to separate the value of nonmarital contributions which have been commingled with marital contributions in a single item of property. In the present case, respondent argues, the court assigned different characteristics to separate any distinguishable property items. We agree. During argument before this court, respondent stated that the parties had agreed that in the event the trial court ruled that the inventory purchased during the marriage was marital property, respondent would stipulate that the entire inventory was marital property because it was too costly to determine the value of the inventory acquired over the period of the marriage.

The trial court may well have determined that the business was respondent’s nonmarital property while the inventory, a portion of which was purchased each year, was property acquired during the marriage. Moreover, the record indicates that the character of the business did not alter during the course of the marriage. The trial court did not abuse its discretion in separating the inventory from the business for the purpose of determining marital and nonmarital property.

Further, the trial court did not err in failing to assign a value to the business since it had determined that the business was nonmarital property. In re Marriage of Olsher (1979), 78 Ill. App. 3d 627, 636, 397 N.E.2d 488, 495.

Petitioner next contends that the division of the marital property was not in just proportions considering the factors in section 503 of the Illinois Marriage and Dissolution of Marriage Act. (Ill. Rev. Stat. 1979, ch. 40, par. 503.) Petitioner contends that the trial court failed to fully consider the contributions she made to the business, her efforts as a homemaker, the care she provided her husband after his two operations and the 10-year duration of their marriage. Furthermore, petitioner argues that the marital property which she did receive is nonliquid and non-income producing. Petitioner argues that the award of maintenance is insufficient to rectify the inequality of the property award.

Respondent argues that under subsection 503(5) one of the factors the court should consider in dividing marital property is the obligations and rights arising from prior marriages. Respondent asserts that he has an obligation to his two children and five grandchildren from his first marriage of 49 years. Respondent argues that he built up an estate for his family during the 60 years he was in business prior to the marriage. Now he is at an advanced age and in poor health necessitating constant medical attention. Respondent asserts that the trial court’s distribution of marital property truly reflects the just and equitable shares.

The trial court’s division of property will be reversed only where “no reasonable man would take the view adopted by the trial court.” (In re Marriage of Lee (1979), 78 Ill. App. 3d 1123, 1127, 398 N.E.2d 126, 129.) The record reflects that the parties were at an advanced age at the time they married and the marital property substantially represented assets produced by respondent’s gift business which respondent had established long before the marriage. The court may have reasoned that in view of these factors respondent was entitled to a greater share of marital property under the.statute. We cannot say that no reasonable man would take the view adopted by the trial court.

Petitioner next contends that under the circumstances of this case it was an abuse of discretion to award the petitioner maintenance in lieu of an adequate share of the marital property. Petitioner argues that because of her age and her few skills for employment it is unlikely that she will become self-sustaining before the maintenance payments terminate either at respondent’s death or at the expiration of the 60-month period. Petitioner argues that given established mortality rates, it is doubtful that respondent will survive the 60-month period of maintenance payments. Petitioner requests that the order of maintenance be reversed and that in lieu thereof she be awarded an adequate share of marital property in order to leave the marriage in a self-sufficient status.

The awarding of maintenance is a matter within the sound discretion of the trial court and will not be disturbed on appeal unless it amounts to an abuse of discretion or is against the manifest weight of the evidence. (In re Marriage of Asch (1981), 100 Ill. App. 3d 293, 296, 426 N.E.2d 1066, 1068.) Such an abuse of discretion occurs only when no reasonable man would take the view adopted by the trial court. (Asch.) After reviewing the record and the factors found in section 504(b) to be considered in awarding maintenance, we cannot say that the maintenance order in this case constituted an abuse of discretion. Ill. Rev. Stat. 1979, ch. 40, par. 504(b).

The final contention raised by petitioner is that she should have been awarded attorney fees. The allowance of attorney fees in a divorce proceeding is also within the sound discretion of the trial court, and its decision will not be disturbed on appeal absent an abuse of discretion. (Canady v. Canady (1964), 30 Ill. 2d 440, 197 N.E.2d 42.) Under the facts of this case, the trial court did not abuse its discretion and commit reversible error by refusing to award the petitioner attorney fees.

Accordingly, the decision of the circuit court of Cook County is affirmed.

Affirmed.

GOLDBERG and O’CONNOR, JJ., concur.