Deltak, Inc. v. Schwartz

Citations: 456 N.E.2d 187; 119 Ill. App. 3d 119; 74 Ill. Dec. 685; 115 L.R.R.M. (BNA) 2378; 1983 Ill. App. LEXIS 2446Docket: 82-1947

Court: Appellate Court of Illinois; October 27, 1983; Illinois; State Appellate Court

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Deltak, Inc. filed a preliminary injunction against Steven M. Schwartz, who subsequently initiated a lawsuit claiming damages for breach of his employment contract. Deltak successfully obtained a summary judgment in its favor, leading Schwartz to appeal, arguing that material factual issues warranted denial of summary judgment. Schwartz's claims included: a lack of awareness regarding the quality standards that led to his termination, insufficient notice of termination, and that his dismissal was arbitrary.

Deltak, a corporation focused on multi-media training course development, had contracted Schwartz as an independent author to create training courses. The contract required compliance with Deltak's quality and development standards, which Schwartz acknowledged receiving. Despite submitting his designs, Schwartz's work was consistently rejected for failing to meet quality standards, leading to his eventual termination after a thorough evaluation of his submissions.

On appeal, Schwartz contended that he had not been adequately informed of the standards against which his work was evaluated, arguing this was critical to his alleged breach. The court affirmed the trial court's decision, upholding the summary judgment in favor of Deltak.

Evidentiary facts in the trial court record contradict Schwartz's initial claim. A moving party for summary judgment must provide factual evidence that, if uncontradicted, warrants judgment; the opposing party cannot rely solely on their complaint to raise material issues. The affidavit supporting the summary judgment acts as a substitute for court testimony, and uncontradicted facts within must be accepted as true despite any opposing claims. Schwartz acknowledged receipt of Deltak's 'Product Development Standards and Procedures Manual' when signing his employment contract, supported by an affidavit from Deltak's vice president, which was not contested by any contrary evidence. Thus, Schwartz was informed of the quality standards relevant to his work, and no material issue remained regarding this matter.

Schwartz's second and third claims on appeal pertain to the validity of his termination. He argues that Deltak failed to meet certain conditions precedent outlined in their contract, specifically requiring 30 days' prior written notice before termination. The relevant contract clause allows termination if Schwartz fails to meet standards, with a stipulation for a 30-day notice period for non-compliance. Schwartz cites a similar case, Zella Wahnon v. Associates v. Bassman, where the court found a breach due to lack of required notice. However, the circumstances differ significantly; unlike the Zella plaintiff, Schwartz's contract did not promise periodic wages but rather contingent royalties based on course sales. Since Schwartz's courses were neither sold nor used, Deltak had no gross receipts, meaning Schwartz would not have received compensation even with the additional notice period. Therefore, the conditions Schwartz cites do not substantiate a breach by Deltak.

Schwartz's reliance on Zella is deemed misplaced, as evidence indicates Deltak complied with the notice requirement regarding quality standards. The contract mandated a 30-day notice period for compliance failures. Schwartz submitted his initial design in November 1979, which Deltak rejected, citing non-conformance with quality standards and requesting substantial revisions. In February 1980, Schwartz's revised design was again rejected. A detailed letter from Deltak on April 7, 1980, outlined significant issues with Schwartz's work, including poor organization and outdated techniques, providing sufficient notice of failure to meet standards. Schwartz had nearly a year to rectify these issues before his termination on July 16, 1980, with evidence supporting that he received notice more than 30 days prior to this termination. Schwartz claims his termination was arbitrary and that Deltak incorrectly believed the contract was terminable at will. However, the contract is characterized as a personal service agreement, where performance is subject to the employer's subjective satisfaction. This interpretation aligns with established legal principles that allow termination based on subjective dissatisfaction with performance. Thus, Schwartz's employment could be terminated upon Deltak's subjective judgment of his non-compliance with quality standards.

The contract between Schwartz and Deltak is classified as a personal service contract rather than an 'at will' agreement, allowing Deltak to terminate the contract based on its subjective assessment of Schwartz's work quality. The trial record indicates Deltak consistently rejected Schwartz's work for failing to meet quality standards, supporting the conclusion that Schwartz's termination stemmed from Deltak's dissatisfaction. Schwartz has not presented any evidence to demonstrate that Deltak was satisfied with his work or that his termination was for reasons unrelated to this dissatisfaction. Consequently, there is no genuine issue of material fact challenging the decision. The trial court, having reviewed all relevant documents, determined that no material facts were in dispute and granted Deltak's motion for summary judgment, which the court affirms.