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Maywood Sportserv. v. Maywood Pk. Trotting Assn.

AUGUST 2, 1973.

MAYWOOD SPORTSERVICE, INC., PLAINTIFF-APPELLEE,

v.

MAYWOOD PARK TROTTING ASSOCIATION, INC., DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Cook County; the Hon. EDWARD J. EGAN, Judge, presiding.

MR. JUSTICE MCNAMARA DELIVERED THE OPINION OF THE COURT:

Plaintiff, Maywood Sportservice, Inc., brought this declaratory judgment action against defendant, Maywood Park Trotting Association, Inc. Defendant conducts harness racing meets at Maywood Park, while plaintiff is the concessionaire at the track. Plaintiff sought a declaration that its concessions contract with defendant remained in effect, and that defendant's attempted termination of the contract was null and void. The trial court entered judgment for plaintiff, and defendant appeals. On appeal defendant contends that, as a matter of law, the contract in question had terminated by its own terms; that the contract's standard of performance was so vague and indefinite as to be judicially unenforceable; that plaintiff failed to meet its burden of proving performance; and that, under Illinois antitrust law, the contract was an illegal exclusive dealing or tying agreement.

On February 26, 1946 defendant leased a tract of land which became the track premises. The lease was for twenty years, and was to terminate on December 31, 1965. In 1962 a new lease was made to defendant for the period from January 11, 1966 to December 31, 1985. The lessor named in both leases was Arthur T. Galt. Attached to the second lease was a consent signed by the trustees and beneficiaries of a trust to which Arthur Galt and his wife had deeded the premises in 1949. Both leases contained a provision that defendant "shall be entitled to regard Arthur T. Galt alone as lessor for all purposes."

The 1962 lease contained no reference to the 1946 lease. The 1962 lease included approximately 1,500 feet of land, principally for parking, not included in the 1946 lease. The 1962 lease also excluded a triangular parcel of land, approximately 200 by 80 by 200 feet, which had been included in the earlier lease. Under the 1946 lease, defendant was to pay rent of $35,000 per year, whether or not racing was conducted, plus a per cent rental based on the mutual handle if racing were conducted. The 1962 lease eliminated any fixed rental payment, and the percentage rental was to be computed differently. Under the 1946 lease defendant was responsible for fifty per cent of the real estate taxes, while under the 1962 lease defendant was responsible for all real estate taxes on the premises. Under the 1946 lease defendant was to pay $125,000 for improvements, while under the later lease defendant was to expend $3,000,000 for improvements on the premises. There were also differences in insurance provisions.

In 1946 a concessions agreement had been made between defendant and Illinois Sportservice, Inc., giving the latter the exclusive right to provide food and concession service at Maywood Park. Two versions of the agreement, varying in their delineations, were introduced at trial by the respective parties. However both versions provided that the contract was to continue throughout defendant's twenty year lease and:

"for and during any renewal or extended period or periods of said lease, whether effected through new or substitute leases or by renewal or extension agreements between the lessor and party of the first part (Maywood) or its successors or assigns, provided that the party of the second part (Illinois Sportservice) complies with the terms and conditions of this contract."

Plaintiff at trial introduced into evidence an assignment of this concessions agreement to itself by Illinois Sportservice, Inc. Plaintiff also introduced testimony that it and Illinois Sportservice, Inc. were interlocking corporations, and that both were subsidiaries of Sportservice, Inc.

In 1964 the three sons of Arthur Galt acquired eighty per cent control of the defendant corporation, and proceeded to expend large sums of money to improve the track. On September 22, 1964 plaintiff and defendant entered into a written agreement. This agreement, drafted by plaintiff, eliminated certain provisions contained in the 1946 concessions agreement as being obsolete. The 1964 agreement also added certain new provisions defining the quality of food and services to be provided by plaintiff. Lastly it provided:

"It is to be understood that except as clarified, amended and/or modified hereunder, the concession lease and agreement dated April 6, 1946, as amended from time to time, shall remain in full force and effect."

Thereafter plaintiff expended over $350,000 in making improvements at the track.

At trial Carmelo Sabatino, a vice-president of the plaintiff corporation, testified that plaintiff had been operating the concessions at Maywood Park for several years.

Robert Jack, an employee of plaintiff's, testified for plaintiff that, subsequent to the agreement entered into by the parties on September 22, 1964, plaintiff's equipment and facilities at the track were remodeled extensively. He described plaintiff's plant and equipment at the track in detail, including its dining room seating 1000 persons, and asserted that its concessions and services were of the finest quality.

Sid E. Anton, defendant vice-president, testified for defendant that he was placed in charge of the race track in August, 1967. He stated that at this time the dining room and concessions were doing poorly and that he had difficulty in getting cooperation from plaintiff in improving the situation by means of promotional enterprises. Anton received many complaints from patrons about the dining room and concessions. He personally observed that "choice" beef was being served in the dining room while "prime" was being advertised. There was a complete failure of service by plaintiff on the opening night of the fall meeting in 1968. Anton further testified that as a result of this failure and the cumulative shortcomings of the plaintiff's service, on October 25, 1968 he sent a letter to plaintiff informing it that defendant was terminating their concessions contract at the end of the 1968 racing season.

Herman Goldman, another employee of plaintiff, testified on rebuttal that there was a shortage of waiters and failure of service in the dining room on the opening night of the 1968 racing meet. That shortage was caused by union problems and an unexpected party at another race track. The situation was remedied immediately and did not recur. Goldman further testified that thereafter various representatives of defendant expressed complete satisfaction with plaintiff's service.

Evidence was also adduced at trial that in 1968 Sportservice, Inc. and its subsidiaries had concessions contracts at other race tracks in Illinois: Cahokia Downs, Aurora Downs and Hawthorne. At the time of trial, only the contract with Cahokia Downs remained effective. In addition to race tracks, Sportservice, Inc., and its subsidiaries had concessions contracts at White Sox Park, Chicago Stadium, the Chicago Coliseum and Milwaukee County Stadium.

At the close of evidence the trial judge made the following findings of fact and law: that there was a valid assignment of the 1946 concessions agreement by Illinois Sportservice, Inc. to plaintiff; that the agreement granted sole and exclusive catering rights at Maywood Park; that the agreement was to continue through the 20 years of the 1946 lease and during any renewal or extended period or periods of said lease, whether effected through new or substitute leases or renewal or extension agreements between the lessor and Maywood; that on June 20, 1962 Arthur Galt and defendant entered into a new lease for premises including those described in the 1946 lease; that a September 22, 1964 agreement entered into by Arthur Galt, Jr. on behalf of defendant expressly amended the 1946 concessions agreement; that the 1962 lease is a renewal of the 1946 lease within the meaning of the April 6, 1946 agreement and that the parties thereafter were operating under the September, 1964 amendment; that the contract did specify enforceable standards; that there had been no terminable breach of the contract by plaintiff; and that the subject contract was not an illegal tie-in or exclusive dealing contract.

Defendant initially contends that the concessions agreement between the parties expired by its own terms on December 31, 1965 and did not continue through defendant's second lease of the premises. It urges that the parties, premises and conditions contained in the 1962 lease were so different from those in the 1946 lease that, as a matter of law, the 1962 lease could not be found to be renewal or extension of the 1946 lease within the meaning of those terms in the 1946 concessions contract.

• 1 The language contained in the concessions agreements of 1946 and 1964 effectively negate the argument that plaintiff's concessions contract expired on December 31, 1965. The 1964 agreement specifically recited that "the concession lease and agreement of April 6, 1946, as amended from time to time, shall remain in full force and effect." The 1946 concessions contract, as we have noted, stated that Sportservice would receive sole and exclusive concession privileges for the twenty year period of the lease and "for and during any renewal or extended period or periods of said lease, whether effected through new or substitute leases or by renewal or extension agreements." The literal, broad and sweeping language of the two agreements could only mean that the 1946 agreement covered a new lease period; that a new lease was executed in 1962, and in 1964 the parties ratified those terms of the 1946 agreement which extended the concession term into the ...


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