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Lerner v. Zipperman

OPINION FILED MARCH 20, 1979.

JACK LERNER ET AL., PLAINTIFFS-APPELLEES,

v.

WILLIAM M. ZIPPERMAN, DEFENDANT-APPELLANT.



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

MR. JUSTICE DOWNING DELIVERED THE OPINION OF THE COURT:

Rehearing denied April 17, 1979.

This appeal involves the questions of whether plaintiffs' motion for summary judgment was properly granted and whether the trial court erred in failing to join an indispensable party.

On August 17, 1971, the defendant, an attorney, and Wayne Peters (Peters), an attorney and real estate businessman, entered into a $75,000 sale contract for a portion of defendant's law practice and the Libuszowski Insurance Agency (agency) located in Chicago, Illinois. *fn1 Simultaneously Peters gave defendant a note for $7,500 *fn2 and a trust agreement to his house as security collateral. Although the contract was to be performed within two years according to defendant's testimony, Peters made a payment of $2,500 to defendant in 1974. *fn3 The insurance agency, the trust agreement, and the note are still in defendant's possession.

According to plaintiff Smith's testimony, he was told by Peters that defendant's agency was for sale. Thereafter, Smith, a real estate businessman, contacted the remaining plaintiffs and a Joe Goldman and collected a $7,500 check from plaintiff Hefter made payable to defendant, a $7,500 check from plaintiff Varon made payable to Smith, and a check from Joe Goldman of an unknown amount.

Sometime later, Smith, his associate Ben Katz, plaintiffs Lerner and Frankel, and Peters met with defendant, at which time plaintiffs Lerner and Frankel each gave defendant a $7,500 check, and Smith gave him Hefter's $7,500 check and a cashier's check for $22,500 which constituted plaintiffs Smith, Varon, and Goldman's contributions. Smith testified that he assumed that plaintiff Winer had given his $7,500 check to Peters. According to Smith, Peters and Winer were to become 40% owners of the agency and the remaining plaintiffs were to become 60% owners. *fn4

Smith further stated that plaintiffs had not made an agreement with defendant, that his demands for the return of the money made in 1973, 1974, and 1975 had gone unheeded, and that he had first learned that the sale had not been completed after Mr. Libuszowski's death, which, according to defendant, occurred in 1976.

Plaintiffs Varon and Hefter both testified that they had been initially approached about the purchase of the agency by plaintiff Smith. Varon stated that he had made his check payable to Smith. Although Hefter testified that Smith had collected his check, he had made his check payable to defendant at Smith's request. Varon testified that he had attended a meeting at which defendant was present, but stated that he could not recall what was discussed or whether Peters was present. However, Varon further testified that he had spoken to Peters on two occasions subsequent to this meeting. Hefter not only knew Peters, but also knew that Smith had talked with him concerning the purchase of the agency. Hefter also testified that he had never spoken to defendant concerning the sale. Both Varon and Hefter knew that Smith had demanded the return of the money; however, neither knew that the sale had not been completed until approximately two years before their depositions were taken in June of 1977.

Although plaintiff Winer could not recall either who had requested his $7,500 check made payable to defendant or to whom it was delivered, he unequivocally stated that defendant had not requested it. He further testified that he had attended a meeting held in 1970 or 1971 at which defendant and some of the other plaintiffs were present. Although he subsequently saw defendant on several occasions and attended several other meetings with plaintiffs concerning the purchase, Winer stated that he did not discuss the sale of the agency with defendant at any time after the aforementioned meeting. Although he did not testify as to when he first learned that the sale had fallen through, Winer also knew that Smith had demanded that defendant return the money.

Defendant admitted in his deposition that he had received several checks totaling $45,000 and deposited them in his account. However, he further testified that he had received these checks exclusively from Peters pursuant to their agreement of August 17, 1977, of which the plaintiffs were not a part. According to defendant, the documentation of this agreement is in Peters' possession. Defendant maintained in his deposition, as he does here, that because Peters still owes him $22,500, he is not obligated to either Peters or plaintiffs to return the money he received. Defendant further stated that plaintiffs did not demand the return of the money until the complaint in this suit was filed.

Plaintiffs' motion for summary judgment, filed without supporting affidavits, contended that there were no issues of fact as to defendant's failure to complete the transaction, his failure to return the money, and his misapplication and conversion thereof.

Defendant's motion and affidavit in response reiterated that he had received money only from Peters pursuant to their agreement, and that he had no agreement with the plaintiffs. Defendant further asserted there were genuine issues of material fact as to with whom the parties had agreements, and as to whether plaintiffs had made a reasonable demand for the return of the money.

Based on the foregoing pleadings and testimony, the trial court granted plaintiffs' motion for summary judgment. In the hearing on defendant's motion to vacate the summary judgment, defendant asserted that Peters was a necessary party, and that granting summary judgment in his absence was improper. The trial court denied defendant's motion to vacate without response to the defendant's objection. Because we are of the ...


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