Court: Appellate Court of Illinois; October 12, 1993; Illinois; State Appellate Court
Defendants Arens Controls, Inc. and Arens Industries, Inc. appeal two circuit court orders: one from December 3, 1990, granting partial summary judgment to plaintiff Richard S. Sloma and denying the defendants' motion for summary judgment on their counterclaim, and another from July 15, 1991, denying defendants' motion to reconsider the first order. The court finds that the trial court erred in granting the plaintiff's motion.
Key facts include that Arens Controls, an Illinois corporation, is a manufacturer of push-pull cable controls, and Arens Industries serves as its holding company. Bartlett Richards III, president of both entities, hired Sloma as chief operating officer on March 3, 1986, under an employment agreement originally drafted by the defendants’ attorneys but modified by Sloma and Richards before signing. The employment agreement mandates Sloma to promote the company's interests and specifies a three-year term unless terminated for justifiable cause.
Sloma also entered a deferred compensation agreement with Industries, which incorporated the employment contract by reference. This agreement stipulated compensation of $6,666.67 per month for three years, adjusted based on the duration of full-time employment, and $4,000 per month upon termination. Following his termination on October 20, 1986, Richards informed Sloma that his deferred compensation would start on February 1, 1987, totaling $53,320 for the first 13.33 months. Subsequent payments were made, but after Sloma filed a wrongful termination lawsuit on January 26, 1987, the defendants ceased additional payments. The lawsuit included claims for breach of contract regarding both the employment and deferred compensation agreements.
Defendants submitted an answer, affirmative defense, and counterclaim on July 7, 1987, alleging in count I that the plaintiff breached his employment agreement by failing to promote the company's interests, citing instances of neglect and mismanagement. Count II accused the plaintiff of breaching his fiduciary duty to the company for personal expense payments. Count III claimed the deferred compensation agreement with Industries was void due to lack of consideration. The plaintiff responded on July 28, 1987, and later amended his complaint on March 23, 1988. Defendants answered parts of the amended complaint on April 29, 1988. On September 28, 1989, the plaintiff sought partial summary judgment for $17,320 in deferred compensation, asserting it was due regardless of the legality of his termination. Defendants countered with a cross-motion for summary judgment based on their counterclaim. The trial court granted the plaintiff's motion on December 3, 1990, awarding the deferred compensation and denying the defendants' motion. The plaintiff requested Rule 304(a) language in the order to expedite payment. After a hearing on January 3, 1991, where defendants argued against the appropriateness of Rule 304(a) language, the trial court ultimately granted the plaintiff's request for its inclusion and denied the defendants' motion to reconsider. The order indicated no just cause to delay enforcement. Defendants appealed, contending that the partial summary judgment did not resolve any claims or parties as required by Supreme Court Rule 304(a), questioning the appellate court's jurisdiction.
Plaintiff asserts that counts I and II involve distinct parties, subject matter, and issues, arguing that Controls lacks standing to contest the summary judgment against Industries related to count II since Controls only filed a counterclaim for count I. Under Supreme Court Rule 304(a), orders that do not resolve the entire controversy can be appealed if the trial judge explicitly states there is no reason to delay enforcement or appeal; however, merely including this language does not render a nonfinal order appealable. An order is deemed final if it resolves the rights of the parties on the entire controversy or a specific portion. The determination of finality under Rule 304(a) hinges on whether the recovery bases for dismissed counts differ from those for counts that remain. The court rejects the plaintiff's argument to treat defendants separately for the summary judgment motion, noting that counts I and II arise from the same factual circumstances and are based on a breach of contract theory involving interrelated contracts. It highlights the lack of separation between Controls and Industries, both of which involve the same individuals and agreements. The deferred compensation agreement incorporates the employment agreement, and both companies provided compensation to the plaintiff, indicating that the recovery basis for count II is closely linked to count I. As a result, the December 3, 1990, and July 15, 1991, orders were not final. Even if they were, the trial judge's Rule 304(a) finding was incorrect. The defendants maintain that the trial court wrongly granted partial summary judgment to the plaintiff, arguing that genuine material factual issues exist regarding the plaintiff's entitlement to recovery and the defendants' right to recover compensation due to the plaintiff's alleged breach. The court emphasizes that summary judgment should only be granted when the moving party's right is indisputable, requiring strict interpretation of evidence against the movant and favorably for the nonmoving party. The record reveals uncertainties in the plaintiff's claim, particularly since count II alleges damages exceeding $50,000 while the partial summary judgment only awards $17,320.
The order does not evaluate the merits of the defendants' counterclaim, which, if successful at trial, could affect the plaintiff's entitlement to the $17,320 awarded by the trial court. The trial court acknowledged unresolved factual issues regarding the plaintiff's alleged wrongful termination, potential breach of loyalty, and whether he prioritized his interests over the company’s. The court recognized that counts I and II are interrelated and that the defendants are inseparable in this case. As a result, significant material facts remain, preventing the granting of partial summary judgment in favor of the plaintiff. Consequently, the orders from December 3, 1990, and July 15, 1991, are reversed as erroneous, and the case is remanded for further proceedings. Counts III, IV, and V, which were dismissed before the plaintiff's motion for partial summary judgment, are not pertinent to the appeal.
