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Luciani v. Certified Grocers of Illinois

FEBRUARY 10, 1969.

FRANK LUCIANI, PLAINTIFF-APPELLANT,

v.

CERTIFIED GROCERS OF ILLINOIS, INC., A CORPORATION, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County, County Department, Law Division; the Hon. EDWARD G. SCHULTZ, Judge, presiding. Reversed and remanded.

MORAN, J.

Rehearing denied March 19, 1969.

This case involves a dispute over the construction of the bylaws of the defendant, Certified Grocers of Illinois, Inc., a grocery cooperative. Frank Luciani, owner of a grocery store and a former member of the defendant corporation, sued to recover patronage rebates in the amount of $23,241 allegedly due him for the fiscal year ending August 31, 1963. Defendant admits that Luciani would have been entitled to that sum had he kept the amount of money required by the rules of the cooperative in his deposit account. Defendant states that the average deficiency in plaintiff's deposit account during the year in question was 83.6% and therefore plaintiff's patronage rebate should be reduced in that proportion so that the amount due plaintiff would be $3,812.

Plaintiff filed a motion for summary judgment in the amount of $23,241 plus interest, which the trial court denied. Defendant filed a motion for summary judgment which the trial court allowed, except that it entered judgment for $4,422 in favor of the plaintiff which represented the amount admittedly due plaintiff, plus interest. Defendant's motion in pertinent part reads as follows:

"1. Plaintiff Frank Luciani, doing business as Buy Wise Food Center, was a member of Defendant, Certified Grocers of Illinois, Inc., a grocery cooperative, during Defendant's fiscal year ended August, 31, 1963 and for several years prior thereto. On August 30, 1963, Plaintiff submitted his resignation from membership in Defendant effective September 3, 1963, which resignation was approved and accepted by Defendant.

"2. During Defendant's fiscal year ended August 31, 1963, Plaintiff purchased merchandise from various divisions of defendant aggregating $315,966.70, which would have entitled plaintiff to a patronage rebate of $23,241.00 had Plaintiff been in compliance with various sections of Defendant's By-Laws and Rules and Regulations, as hereinafter more fully described. . . .

"3. Defendant's By-Laws and Rules and Regulations (quoted haec verba in relevant part hereinafter) require each member of Defendant to maintain a cash deposit with Defendant in an amount equal to twice the average weekly purchases of the member from Defendant. Notwithstanding such requirement, Plaintiff's cash deposit was deficient throughout Defendant's fiscal year ended August 31, 1963, and the average deficiency during that period was 83.6% of Plaintiff's required cash deposit. . . .

"4. Defendant's By-Laws and Rules and Regulations provide as follows in regard to the matters in issue in this cause (which quoted portions of the By-Laws and Rules and Regulations were in full force and effect at all times relevant to the controversy herein):

"BY-LAWS

"ARTICLE X

"PATRONAGE DIVIDENDS AND CASH DEPOSITS

"SECTION 1: Patronage rebates (also known as and sometimes referred to as `patronage dividends') shall be paid to qualified participants as herein defined, in accordance with the following provisions:

"(A) A qualified participant is any member in good standing, except an associate member, who is of record as of the day fixed by the Board of Directors in order to qualify for participation in the net profits of a division. If no specific date for qualification is designated by resolution of the Board of Directors for any Division, the qualification date shall be the last day of the fiscal year for which the patronage rebate is paid.

"(B) The net profit of a division for any period shall consist of that portion of the gross income thereof remaining after deducting all expenses of the division, exclusive of any provision for Federal income taxes, and computed in accordance with the customs ...


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