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Jones v. Atteberry





APPEAL from the Circuit Court of Coles County; the Hon. RICHARD E. SCOTT, Judge, presiding. MR. JUSTICE TRAPP DELIVERED THE OPINION OF THE COURT:

Rehearing denied November 15, 1979.

Plaintiffs appeal from judgments entered pursuant to jury verdicts in favor of defendant upon their complaint as to five counts seeking replevin of certain office files alleged to be the property of plaintiffs (one count), and for compensatory and punitive damages resulting from defendant's use of the items following an alleged breach of an oral agreement for defendant's employment (four counts). The jury returned a verdict in favor of plaintiffs upon count VI of the complaint for money received from clients by defendant ($8,669). Plaintiffs obtained execution and that judgment has been released.

Plaintiffs also appeal from the judgments entered upon jury verdicts in favor of defendant under two counts of the latter's counterclaim for compensation due ($15,000), and for the value of a wooden desk and cabinet ($1200).

The trial court denied plaintiffs' post-trial motion. Plaintiffs argue that the evidence so overwhelmingly favors them that under Pedrick v. Peoria & Eastern R.R. Co. (1967), 37 Ill.2d 494, 229 N.E.2d 504, judgments non obstante veredicto should be entered in their favor with a new trial on damages only, or in the alternative, that the jury verdicts were against the manifest weight of the evidence so that defendant's judgments must be reversed and the cause remanded for a new trial. The notice of appeal prays reversal of five orders of the trial court entered between February 8, 1977, and December 1, 1978, including the judgments entered on June 30, 1977. These rulings will be discussed as necessary.

The amended complaint alleges "That during September 1973, defendant * * * entered into a business relationship with plaintiffs." In replevin it is alleged that after office hours on December 15, 1976, defendant removed certain files from plaintiffs' office and terminated the "relationship." That complaint was filed on December 16, 1976, and subsequent amendments developed the several counts for compensatory and punitive damages alleged to result from the taking and use of the files.

Plaintiffs were certified public accountants who had been in partnership for some 20 years. Plaintiff, Jones, testified that in the summer of 1973 the partnership was seeking a younger man with partnership potential. Defendant had had some years of experience in accounting and for some months preceding had operated his own public accounting service, but he was not a certified public accountant, with the result that he could not then become a partner in the firm. It was contemplated by the parties he might complete the examination to be certified as a public accountant.

All of the evidence is that the product of the negotiations concerning the association was to be reduced to a written agreement. There is testimony that defendant volunteered to produce a draft agreement but did not do so. Plaintiffs produced certain undated drafts which defendant returned with portions marked "incorrect," and with comments of disagreement. No agreement was ever completed or executed by any party. Plaintiffs seek to treat the negotiations as an oral agreement for defendant's employment.

Defendant denies that he was an employee, but testified as to a form of "association." He disagrees with plaintiffs' testimony regarding the terms of the agreement and testified that the files taken were those which he had in his practice prior to the "association" and related to clients which he had prior to that time.

Counsel describe the controlling issue to be whether defendant was an employee of the plaintiffs. The substance of the jury's verdict was that defendant was not an employee.

The plaintiffs testified that the oral agreement was that defendant was to receive $800 per month, the same amount drawn by each plaintiff; plaintiffs would purchase the existing clients of defendant at the rate of 150% of billings payable over three years, i.e., each year for three years defendant would receive 50% of the amount billed to such client, and defendant would receive a bonus of 20% of each years' net income of the partnership.

There is no testimony that the matters were discussed, but the monthly payment to defendant was subject to withholding taxes and Social Security payments. Defendant was listed as an employee on various tax returns of the partnership and was placed under Workmen's Compensation. He was also listed as an employee in matters of health insurance, and plaintiffs paid defendant's travel expenses, fees for professional seminars, and club dues. Plaintiffs supplied defendant with business cards describing the latter as "Representing Jones & Greathouse." Defendant used plaintiffs' supplies and equipment.

Plaintiffs sought to treat the alleged purchase of defendant's clients as an office expense and additional compensation to defendant, rather than as a purchase which defendant could treat as a capital gain. Jones agreed that there was disagreement upon this part of the business and admitted that the basis for computing defendant's percentage was and continued to be in dispute.

Defendant testified, both under section 60 of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, par. 60) and in his own behalf, including the statement that he told the plaintiffs in substance initially that he was not going to be an employee. The recollection of the various parties as to the form of the statement varies. In sum, defendant testified that he was to handle his accounts and to assist the plaintiffs in handling their accounts as requested. He agreed that he signed tax returns for clients under the identification number of plaintiffs' partnership. The evidence is conflicting concerning the manner in which defendant dealt with the clients and how he represented his relationship with plaintiffs to those persons.

Upon his counterclaim, defendant presented computations purportedly made from the records supplied him showing that plaintiffs owed him the sum of $67,000 for 20% of the firm's income. The manner of computing such sum is contested by plaintiffs, and it is represented by the jury verdict for $15,000 upon count I in defendant's counterclaim. Under count II the defendant presented documentary evidence that the desk and cabinet were purchased and paid for by his wife and that she also paid for the work of refinishing. Plaintiffs contend that they purchased the ...

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