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Rodes v. Preston Corp.





APPEAL from the Circuit Court of Cook County; the Hon. PAUL F. ELWARD, Judge, presiding.


Plaintiff William Rodes, a real estate salesman, sued defendants, Preston Corporation, his former employer, and the corporation's president, Robert Pristo, for a commission. After a bench trial in the circuit court of Cook County, the court entered judgment in favor of plaintiff and against both defendants for the sum of $78,750, plus statutory interest from November 20, 1971, to the date of judgment, July 29, 1976. Defendants have appealed and argue that (1) plaintiff failed to present sufficient evidence to sustain the judgment because (a) the prospective purchaser he procured never made an offer to purchase on the terms set by the seller, (b) the prospective purchaser was not proved to be an able buyer, and (c) the prospective purchaser was not proved to be a ready and willing buyer; (2) there was no evidence to prove that the prospective purchaser's offer was used to influence the ultimate purchaser's price; (3) the judgment entered personally against defendant Pristo is erroneous; and (4) the award of statutory interest is erroneous.

The real estate involved in this suit consisted of three contiguous parcels improved with three apartment buildings and a swimming pool, located in Forest Park, in Cook County, Illinois. The buildings were each less than five years old in 1971 and contained a total of 213 apartments.

Plaintiff William Rodes testified that in 1971 he had been issued a real estate salesman's license by the State of Illinois. In April of 1971 plaintiff answered an advertisement placed by defendant Preston Corporation, offering to employ real estate salesmen. He met with Joseph Suster, vice-president of Preston Corporation, on May 10 and accepted employment on that date. There was no written memorandum of the terms of employment executed by plaintiff and defendant, but orally plaintiff was informed by Suster that plaintiff would be paid on a commission basis and various rates of commission were specified for different transactions which plaintiff might produce. Pertinent to this litigation, plaintiff testified that he was told by Suster that he would receive 2 1/4% commission on any straight sale of any of the properties that were owned by Preston Corporation or Pristo. Plaintiff was introduced to the staff of the corporation, including salesman Allen Schimke, as an employee engaged to sell the Forest Park properties. He testified that he devoted his full time working for the corporation until he was discharged on November 29, 1971.

Plaintiff testified that Suster told him he was the only person in the office selling the Forest Park properties. Plaintiff understood that he had an "exclusive salesman listing" on those properties. He physically showed the properties to prospects about 25 times. The listing price of the properties when plaintiff began his employment was $4,425,000.

On July 17, 1971, plaintiff received an offer to purchase the properties for $3,150,000, accompanied by a check for $10,000. Plaintiff testified that Pristo turned the offer down and stated that he would accept $3,300,000. Plaintiff returned to the offeror, one Tepperman, who rejected the higher price. Plaintiff testified that Pristo never stated another price to him after the $3,300,000 was mentioned in connection with this offer.

On October 24, 1971, plaintiff met one Schlesinger and showed him the property. Plaintiff testified that Schlesinger made a "tentative" offer of $3,400,000, subject to verification of expenses, taxes and income. Plaintiff told Pristo that a trade of a parcel of vacant land was involved and that the offer was $3,400,000 and, according to plaintiff, Pristo stated that he thought a deal could be made for that price.

Plaintiff, Pristo, Suster, Schlesinger and one Spector then met at a Ramada Inn. Plaintiff testified that the following occurred: Schlesinger examined operating figures on the buildings and stated that, based on the figures, he would offer $3,371,000 and give the corporation $42,132 to manage the property the first year. He was ready to deposit $100,000 in escrow to begin the transaction. The price he offered included a trade of land to the seller which a third party would buy from the seller for $1,150,000. Schlesinger also stated he wanted to verify the profit margin, the vacancy rate and the tax bill. Pristo said he needed more money, but that he would think about it. The meeting concluded. Suster told plaintiff that he was surprised Pristo had turned the deal down. Back at the office, Pristo told plaintiff to get an extra $50,000 and a letter of intent from Schlesinger.

A letter, dated November 8, 1971, from a law firm representing one Ornoff was received by Preston Corporation shortly thereafter. The letter was introduced into evidence and plaintiff testified that the letter contained an offer by Ornoff to buy Schlesinger's vacant land from Pristo for $1,500,000 above the existing mortgages on the properties. Pristo was given the letter and told plaintiff that the offer was still about $100,000 short. Plaintiff further testified that Pristo was asked to give a second mortgage to Schlesinger of $100,000 to make up the difference, which, according to plaintiff, would have made the offer the sum of $3,425,000. Plaintiff asked Pristo why he kept raising the price and Pristo replied, "To get more money."

Plaintiff testified that a second meeting took place at the Ramada Inn among Schlesinger, Suster and himself. Suster told Schlesinger that Pristo wanted $3,500,000. Schlesinger said it depended on the terms and he wanted to see the books on the properties before he could pay that price. When plaintiff and Suster left, Suster told plaintiff that he thought it was a good offer. Pristo agreed to meet with Schlesinger on Saturday, November 20, at 11 o'clock.

On November 20, according to plaintiff's testimony, plaintiff confronted Pristo at 10:45 and told him that Schlesinger was a buyer ready, willing and able to complete the transaction, and that plaintiff expected his commission. Pristo asked if plaintiff would take $25,000 if Schlesinger went to $3,500,000 and plaintiff said, "No." Pristo said he felt that plaintiff should be compensated for his work. Then Schlesinger arrived, went into Pristo's office and examined the books, leases and other records. Pristo then said, "I don't even think I can sell this property for cash because of my tax position. I'd rather sell it on a contract." Schlesinger said he would be interested on that basis and that he would get back on Monday.

Plaintiff testified that Schlesinger did call him on Monday and made the following offer, which plaintiff relayed to Pristo: $450,000 cash; $450,000 after 12 months; Schlesinger would take over the existing mortgages; and plaintiff himself would provide a $50,000 second mortgage if Pristo wanted it. Plaintiff testified that this totaled an offer of $3,500,000. Pristo then told plaintiff that he had decided to sell to Campbell and Gehrs for "around three and a half million." Plaintiff told Pristo he didn't care who bought the property, he wanted his commission and Pristo said he would be compensated.

Plaintiff testified that on the date he was discharged Suster told him he thought plaintiff should be compensated. Two days later plaintiff called Suster and asked that his commission check be sent to his home address and Suster again indicated that plaintiff should be compensated. Plaintiff testified that he called three to five more times on later dates and each time Suster indicated plaintiff would be paid.

On or about January 12, 1972, plaintiff met with Pristo by appointment at the corporate offices and told Pristo that he had heard a deal had been made with Campbell and Gehrs and that he wanted his commission. Pristo refused to pay plaintiff anything.

During his employment, plaintiff told Campbell and Pristo that he should be part of their negotiations, but Pristo said he would handle the deal completely with Campbell and plaintiff should not discuss the project further with him. Plaintiff testified that Campbell had seen the financial statements which plaintiff had prepared on the properties. Plaintiff had never received any compensation on the sale.

On cross-examination, plaintiff testified that a "straight sale" meant the property was sold without a trade, whether a contract sale, cash sale or on installments. His fellow employee Schimke was compensated only on a commission basis. Plaintiff was aware that Campbell or Gehrs had done business with the corporation before he was hired. He was told when he began working that the only negotiations in progress on the properties was a possible land trade being investigated by salesman Schimke. Plaintiff was aware that Pristo owned or controlled all of the properties concerned. His commission was based only on results produced. At one time plaintiff had told Pristo that he would accept $25,000 as his commission if the property was sold to Schlesinger-Ornoff, but he denied that this was to encourage Pristo to sell.

Plaintiff denied that he had no right to a commission on sales that would be completed after his employment terminated. However, his affidavit in opposition to defendants' motion for summary judgment states that the agreement was that plaintiff would receive a commission if any of the properties were sold during his employment, and makes no mention of a right to a commission should the sale be completed after his termination. ...

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