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Flight Kitchen, Inc. v. Chicago 7-up Btlg. Co.

AUGUST 28, 1974.

FLIGHT KITCHEN, INC., PLAINTIFF-APPELLEE,

v.

CHICAGO SEVEN-UP BOTTLING CO., DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Cook County; the Hon. GEORGE J. SCHALLER, Judge, presiding.

MR. JUSTICE BURMAN DELIVERED THE OPINION OF THE COURT:

This appeal evolves from an action brought in the circuit court by Flight Kitchen, Incorporated, an Illinois corporation, against Chicago Seven-Up Bottling Company (hereinafter referred to as Seven-Up) to recover damages allegedly suffered by reason of an averred trespass to the property of Flight Kitchen by an attorney, Harry Leviton, when he, in enforcing a judgment rendered on behalf of Seven-Up against a third corporation, Plan for Hospital Foods, Incorporated, wrongfully directed the sheriff to levy against the property of Flight Kitchen. After a jury trial, Flight Kitchen was awarded $12,000 in damages and, in addition, $12,000 in punitive damages. The trial court entered judgment on that verdict and this appeal by Seven-Up follows.

Seven-Up contends: (1) the court erred in failing to direct a verdict in its favor; (2) the damages awarded are excessive; and (3) the cumulative effect of trial errors deprived it of a fair trial.

The basic facts are these: Plan for Hospital Foods, an Illinois corporation, owed money to Seven-Up. The delinquent account was turned over by Seven-Up to Dun & Bradstreet, Incorporated, for collection. Attorney Harry Leviton received the account from Dun & Bradstreet. He brought suit and on June 15, 1967, obtained a judgment on behalf of Seven-Up against Plan for Hospital Foods in the amount of $1499.60. On April 18, 1967, he had previously billed Seven-Up for a retainer fee of $75 and for court costs in the amount of $25. Seven-Up paid these amounts. Prior to directing a levy to enforce the judgment, Leviton requested Seven-Up to execute the necessary bond for that purpose and Seven-Up did so. He then directed the sheriff to levy on property at 9561 Franklin Avenue in Franklin Park, Illinois. This address was the registered address of both Plan for Hospital Foods and Flight Kitchen. At this location the deputy sheriff was told by one Adam Senese, the president and registered agent of both Flight Kitchen and Plan for Hospital Foods, that he was at the wrong premises and the property there was owned solely by Flight Kitchen and not Plan for Hospital Foods. The deputy sheriff reported the conversation to Leviton by telephone and was told by him that it was only a cover-up and that he should proceed with the levy and close the business. The deputy finally effected the levy 2 weeks later and padlocked the premises. As a result various perishable foods on the premises deteriorated and had to be removed by Franklin Park Health Department officials.

In the original complaint filed on October 27, 1967, Flight Kitchen named as defendants, Seven-Up, Dun & Bradstreet, Inc., a New York corporation; Joseph I. Woods, Sheriff of Cook County; Edward Chmielweski and John Clemens, individually and as Deputy Sheriffs of Cook County. Orders were subsequently entered dismissing the sheriff and the deputy sheriffs from the suit and allowing the motion of defendant Dun & Bradstreet for a summary judgment in its favor. It was further held in the latter judgment order that as a matter of law, Harry Leviton, the attorney ordering the levy, was neither the agent nor attorney for Dun & Bradstreet. All of the aforementioned orders specifically provided that they were immediately appealable, but no appeals were taken from them.

It is initially contended by Seven-Up that the court erred in failing to grant a directed verdict in its favor, citing Pedrick v. Peoria & Eastern R.R. Co., 37 Ill.2d 494, 229 N.E.2d 504. It is first urged in support of this proposition that Seven-Up was not responsible for the actions of Leviton, the attorney who ordered the levy, and second, that the levy on Flight Kitchen did not constitute an unlawful trespass.

Seven-Up disclaims any responsibility for the conduct of Leviton, first, because it views him as an independent contractor as a matter of law. It is argued that whether one views Leviton as an independent contractor working for Dun & Bradstreet or as an independent contractor working for Seven-Up, the important matter is the absence of any control by Seven-Up which is necessary to establish liability on its part. (Henry v. Industrial Commission, 412 Ill. 279, 106 N.E.2d 185.) Heavy reliance is placed on Weinrob v. Heintz, 346 Ill. App. 30, 104 N.E.2d 534. In that case a lawyer filed a complaint alleging negligence in the operation by the defendant of a motor vehicle while he was a passenger. The defendant requested the submission of a special interrogatory to the jury inquiring whether the plaintiff should be considered to have been in the employ of a certain corporation at the time of the accident, thus presumably entitling him to a remedy under the Workman's Compensation Act and precluding his recovery against the defendant. The court found no evidence to support the submission of the special interrogatory, and held, specifically under the factual situation presented, that the plaintiff was exercising an independent discretion and judgment while acting for his client. This case is clearly not controlling here, where the plaintiff asserts liability of a client for the acts of his attorney in pursuing a legal proceeding on behalf of the client.

• 1 Seven-Up asserts that by the very nature of his duties and responsibilities, an attorney is better characterized as an independent contractor rather than as an agent. Seven-Up cites no case, however, and we are aware of none, which holds that an attorney who files a suit and obtains a judgment for someone is an independent contractor. In Oberne v. O'Donnell, 35 Ill. App. 180, and Golden v. Cervenka, 216 Ill. App. 397, both relied on by the defendant, we find no such general proposition enunciated, but rather find that under the facts presented in those cases, which are clearly disparate from the facts of the instant case, the client was not properly bound by the acts of the attorney. The general rule, as we understand it, is that a client is bound according to the ordinary rules of agency by the acts of his attorney within the apparent scope of his authority (Bond v. Duntley Manufacturing Co., 195 Ill. App. 576 (abstract opinion)), and this rule may be extended to hold a client liable for an injury to a third person resulting from an act of the attorney which is within the scope of the attorney's authority (see 7 C.J.S. Attorney and Client § 68 (1937); Restatement (Second) of Agency § 253 (1958); see also Atlantic Co. v. Farris, 62 Ga. App. 212, 8 S.E.2d 665).

A second variation on Seven-Up's contention that Leviton was not its agent is based on a review of the facts presented. It is urged that Seven-Up had no control over Leviton, that Leviton looked to Dun & Bradstreet as his employer, that Seven-Up had nothing whatsoever to do with hiring him, that it likewise had nothing to do with the decision to sue Plan for Hospital Foods, and lastly that it was not even aware of the levy until informed of it by Dun & Bradstreet.

• 2 Our view of the facts compels us to reject Seven-Up's argument. The sole issue before us concerns the levy ordered by Leviton. It is undisputed that he obtained a judgment in the name of Seven-Up against Plan for Hospital Foods. It can hardly be said, from the evidence, that Seven-Up was unaware of this, or that it did not know that Leviton was proceeding to levy on the premises at 9561 Franklin. Indeed Seven-Up executed a bond for that reason with full knowledge that a levy was to be made for the purpose of satisfying its judgment against Plan for Hospital Foods. Had it not executed the bond neither the sheriff nor Leviton could proceed to levy. It is clear to us that Leviton was not only acting as Seven-Up's agent within the scope of his authority, but that he was also acting with the full knowledge and direction of his client Seven-Up.

We next consider Seven-Up's contention that the levy on the Flight Kitchen property did not constitute an unlawful trespass. This argument is premised on Seven-Up's claim that the court should have disregarded the separate corporate entities of Flight Kitchen and Plan for Hospital Foods as a matter of law because Adam Senese, the president of both corporations, consistently held out the corporations as having one single identity and operated them out of one pocket, and that the corporations were for all practical purposes one and the same.

Seven-Up directs our attention to Holland v. Joy Candy Manufacturing Corp., 14 Ill. App.2d 531, 145 N.E.2d 101. That case involved a suit against two corporations for services performed by the plaintiff in the preparation and placing of advertising for a candy product manufactured by one corporation and retailed by the other. Originally the entire candy business was operated as a partnership. The partners later organized the two corporations. The stock in both corporations was divided equally between them and both were officers and directors of the two companies. Later the widow of one of the original partners acquired all of the stock in both corporations. As president, treasurer, and director of both corporations, she actively managed them from the same building where they both had their offices. Both had the same telephone number, switchboard, bookkeeper, time clerk and desk. Statements for plaintiff's services were sent to both companies. The appellate court found that the trial court was justified in viewing one corporation as a "mere instrumentality" of the other corporation, and held that "the affairs of the two corporations were so managed and controlled by the same interlocking officers, directors and single stockholder, as to constitute one corporate entity in its dealings with creditors." 14 Ill. App.2d at 535, 145 N.E.2d at 104.

The facts of the instant case show that Adam Senese was indeed president and also registered agent of both corporations, and that the registered address of both corporations was 9561 Franklin Avenue, Franklin Park, Illinois. The ownership of the corporations, however, was distinct. The shareholders of Flight Kitchen were Cecilia Senese, 3,997, Zanida Irace, 1000 shares, and Allan Smietanka, Joseph Smietanka, and Adam Senese, one share each. The shares of stock in Plan for Hospital Foods were equally divided between Frank Smietanka, Ed Garrigan and Adam Senese. The physical operations of the two corporations were also distinct. Flight Kitchen catered to various airlines by providing them primarily with frozen meals and sometimes with hot or "chilled" food. Its place of business was at 9561 Franklin in Franklin Park, Illinois, where all of its equipment was also located. Plan for Hospital Foods never operated at the above address, only at Northlake Hospital at 365 East North Avenue in Northlake, Illinois. Its only function was to prepare and set up the foods for the patients in that hospital. The corporation employed approximately 12 to 14 employees at the hospital who prepared the food and one girl who took care of administrative duties.

Seven-Up points to testimony by Mr. James McGuire, division sales manager for Chicago Seven-Up, that credit was extended to Plan for Hospital Foods only because Seven-Up already did business with Senese through Flight Kitchen. When Plan for Hospital Foods became delinquent, McGuire said he was told by Senese that the bill could not be paid until the airlines paid money owed to Flight Kitchen. When Senese did make a $100 payment on the Plan for Hospital Foods account, the check was drawn on Flight Kitchen. A second $100 check bounced. Further testimony shows that at Seven-Up, the accounts of the two corporations were not separate, and Plan for ...


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