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Litow v. Aurora Beacon News

JULY 9, 1965.




Appeal from the Circuit Court of Kane County; the Hon. JOHN S. PETERSEN, Judge, presiding. Reversed and remanded.


Rehearing denied August 26, 1965.

This is an appeal by the plaintiff, Jerome Litow, a newspaper distributor, from an order dismissing, with prejudice, his amended complaint against defendant, the Aurora Beacon News, a newspaper publishing company. The basis of the dismissal was the ruling of the trial court that none of the eight counts in the amended complaint stated a cause of action, and it is the propriety of this ruling that we are called upon to determine in this appeal.

The defendant's newspaper is published in Aurora, and it appears that most of its circulation is there. However, the paper is also distributed in St. Charles and Geneva. For a number of years, the plaintiff has been the distributor of defendant's newspaper in the St. Charles and Geneva areas. There are eight counts in the amended complaint. The first four counts pertain to the St. Charles distribution routes. The last four counts contain identical allegations concerning the Geneva routes. Since the issues are identical in each set of counts, we will simply discuss counts 1-4, and our remarks will also be understood to apply to the corresponding allegations in counts 5-8.

Count 1 is filled with historical detail, and we will simply state the substance of it here. The plaintiff has owned a newspaper distribution business in St. Charles for 15 years, during all of which time he has distributed the Aurora-Beacon News. He obtained the distribution of the Beacon News by purchasing the news agency which had previously distributed it in St. Charles. The purchase was made only after securing the consent and approval of the defendant. After he acquired the routes, Litow expended substantial effort and money to expand the circulation of the paper in the St. Charles area, with the result that the circulation has grown over the past fifteen years. Much of the increase in circulation has been due to the growth of the population in the St. Charles area. Litow solicited new residents in outlying areas at a time when the new homes were widely scattered. The outlying subscribers resided at such distances from each other that distribution by automobile was the only feasible method. Now that the subdivisions in the area are built up and compact, it is possible to distribute the papers with boys on bicycles at a considerably lesser expense then was formerly involved. It is alleged that many of the new residents of the St. Charles area were unfamiliar with the defendant's newspaper, and that their interest in the paper was created as a result of the solicitation efforts by Litow.

In the course of building up this circulation, Litow compiled route lists which were used by his employees in the distribution of the paper. He buys the newspapers from the defendant, with no allowance for returns, and then sells the papers to his newsboys, whom he protects against losses on collections from subscribers. In a majority of cases, Litow bills the customer directly and pays the boys for their services.

Paragraph 6 of count 1 alleges that:

"All of the aforesaid works and expenses to Jerome Litow and all of the aforesaid benefits to The Aurora Beacon News, were done by Jerome Litow and accepted by The Aurora Beacon News with full knowledge of and in reliance upon the custom and usage in the newspaper industry that the distributor. . . ."

On May 31, 1963, Litow received a letter from the defendant, informing him that his services would no longer be required in the distribution of the paper in the St. Charles area. He was later informed that the defendant would take over distribution of the newspaper without payment of any compensation to him. During the third week of June, 1963, the defendant asked Litow for a current list of all subscribers in the St. Charles area. Litow refused to turn over the lists, contending that they were his private property. However, the defendant already had the lists it wanted. In February, 1961, the defendant had secured the lists "by representations to Jerome Litow that a list of all the customers of The Aurora Beacon Newspaper in the areas served and distributed by Jerome Litow was needed in order to complete a telephone soliciting plan to increase the newspaper's circulation; and that no other use would be made of such lists."

Count 1 further alleges that after the defendant terminated its relationship with Litow, it solicited his newsboys to work for defendant in the distribution of the paper, using the lists previously secured from Litow. The complaint alleges that defendant is now using the lists and soliciting the newsboys for the purpose of taking over the distribution routes previously purchased and expanded by Litow. It is further alleged that these activities of defendant will continue unless an injunction is issued.

The prayer of count 1 is for an injunction restraining the defendant from (1) using the route lists, (2) securing any further route lists from the newsboys and (3) soliciting Litow's newsboys to work for defendant in servicing the routes they previously serviced for Litow.

Count 2 realleges the allegations of count 1, and adds the charge that the defendant is "seeking to appropriate (the plaintiff's distribution routes) and hold the same to its own unjust enrichment, to the damage of the plaintiff in the sum of $20,000." This count prays for damages in that amount.

Count 3 repeats most of the allegations of count 1 and prays for $20,000 damages on the ground that the defendant was guilty of fraud in obtaining plaintiff's route lists by the false representations previously mentioned.

Count 4, again, realleges most of the paragraphs of count 1 and alleges further that plaintiff's distribution of the paper was a "property interest." It prays for $20,000 for ...

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