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Thorne v. Elmore





APPEAL from the Circuit Court of Cook County; the Hon. THOMAS J. ROSENBERG, Judge, presiding.


Mr. JUSTICE MEJDA delivered the opinion of the court:

This is an appeal from a judgment entered on a jury verdict awarding plaintiff, Maxwell E. Thorne, a licensed real estate broker, $50,000 in broker's commission in the sale and exchange of property owned by defendants, Midlothian Real Estate Corporation and Midlothian Motors, Inc. The action was originally brought against the two corporate defendants, John W. O'Donnell, now deceased, who controlled the corporations, and Elbert F. Elmore, who was O'Donnell's attorney and is also a licensed real estate broker. O'Donnell's estate was substituted as a party prior to trial, and the trial court directed a verdict in its favor at the close of the evidence. The trial court also granted directed verdicts in Elmore's favor on two counts in which Thorne had alleged Elmore's tortious interference with contractual and business relationships. The jury rendered a verdict of $17,000 against Elmore and $16,500 against each corporate defendant, and Elmore and the corporate defendants have appealed from the judgment entered on that verdict. Thorne has cross-appealed from the directed verdicts granted Elmore on the two tortious interference counts.

On appeal, Elmore contends that (1) a purchaser of real estate is not liable for a brokerage commission in the absence of a special agreement; (2) the complaint was insufficient as a matter of law to provide a basis for liability for commissions; (3) Thorne did not establish a prima facie case against Elmore; (4) the judgment against him is contrary to the evidence; (5) the damages awarded by the jury have no basis in the record; (6) the admission of Thorne's exhibit No. 43 into evidence was prejudicial; (7) Elmore was prejudiced by Thorne's closing arguments; and (8) the jury was improperly instructed. The corporate defendants have also raised issues regarding: (1) whether the judgment is against the manifest weight of the evidence; (2) whether the amount awarded Thorne is unsupported by the evidence; and (3) whether conduct of Thorne's counsel was prejudicial. In his cross-appeal, Thorne contends that there are distinct causes of action for interference with a contractual relationship and interference with a business expectancy, and that he established a prima facie case against Elmore as to both causes of action.

We find for the defendants on both the appeal and cross-appeal. The pertinent facts follow.

O'Donnell had formed Midlothian Motors and Midlothian Real Estate, being president and holding a controlling interest in both corporations. Midlothian Motors owned a parcel of land on which Royal Chrysler was located. Midlothian Real Estate owned Muncaster Dodge. (The corporate defendants will hereinafter be referred to, respectively, as "Royal" and "Muncaster.") Royal and Muncaster were located on the same city block in Midlothian, Illinois. Elmore had a long-standing relationship with O'Donnell and had represented O'Donnell when he acquired Muncaster and Royal.

Thorne was a real estate broker who was in the business of discovering and selling tax shelter investments. He had had no business dealings with O'Donnell before September 1971, when he was referred to O'Donnell by a third party. After contacting O'Donnell three times by phone, a meeting was set for November 9, 1971, at O'Donnell's office at Jack O'Donnell Chevrolet. The meeting lasted about an hour and David Evans and Robert Schuler, corporate officers at the time, were in attendance. Both Evans and Schuler were called to testify on Thorne's behalf. Evans stated that he met Thorne only once when Thorne came to O'Donnell's office. After being introduced to Thorne, Evans left the meeting. He saw Thorne at O'Donnell's office two or three other times but never spoke to him. Schuler also testified that he met Thorne only once, at a November 1971 meeting in O'Donnell's office. He said it was "very likely" that O'Donnell was also present. The sale of Muncaster and Royal were discussed at the meeting, although to his knowledge they weren't for sale before the meeting. He never saw Thorne in O'Donnell's presence after that meeting.

Objections to Thorne's testimony as to what transpired at the November 9, 1971, meeting were sustained because of O'Donnell's death. Thorne made an offer of proof that, in the presence of Schuler and Evans, O'Donnell indicated to Thorne that he was interested in Thorne's proposal to sell Muncaster and Royal. According to Thorne's offer of proof, the November 9, 1971, meeting was to discuss mortgages, notes and leases on Muncaster and Royal, which Thorne had asked O'Donnell to have ready. Thorne said he would study the documents and propose a deal.

Thorne's next meeting with O'Donnell was on November 23, 1971. No one else was present and no testimony of the meeting was admitted. Following the meeting Thorne drafted two agreements which would make him O'Donnell's exclusive agent for the sale of the Muncaster and Royal properties. Thorne took the proposed agreements to O'Donnell on December 1, 1971, then took the still unsigned documents to Elmore the same day. It was the first meeting between Thorne and Elmore, who had had a long-standing social relationship with O'Donnell in addition to being his attorney. The unsigned agreements were left with Elmore and, according to Elmore, were never discussed again.

According to Thorne's testimony, he told Elmore at their first meeting that he would be selling Muncaster and Royal for O'Donnell for which he would receive a commission of $25,000 for each parcel. Elmore, however, testified that he informed Thorne that neither property could be sold outright because of tax considerations and referred Thorne to O'Donnell's accountant. At the time of the meeting, Elmore stated, he was aware that Thorne had an exclusive listing agreement to sell a parcel of land for William F. Butler, and Thorne and Elmore discussed the possibility of trading Muncaster and Royal for the Butler property. Thorne testified that he had entered into the exclusive agreement with Butler on November 26, 1971.

Thorne also testified that he and Elmore next met on December 8, 1971. It was a long meeting, beginning at Elmore's office and continuing at lunch. During the meeting O'Donnell's property was discussed in detail, and Elmore expressed an interest in it. Thorne and Elmore also discussed Thorne's business in general, as well as potential investors that Elmore knew. The Butler property was also discussed.

His next meeting with Elmore, Thorne continued, was on December 11, 1971, when Elmore presented a contract with several contingencies, making an offer for the Butler property and saying that he would also be willing to buy Royal. Elmore told Thorne that he should go ahead and sell Muncaster, that Elmore would act as the escrow agent in the purchase and exchange of property, and that Thorne should not worry about his commission.

According to Elmore, the next meeting after December 1 was on December 11, 1971. The meeting began in his office and extended through lunch. At the meeting Elmore submitted the contract for the purchase of Butler's property which he had prepared following the first meeting with Thorne. Thorne asked Elmore about the proposed exclusives with O'Donnell for Royal and Muncaster and Elmore repeated that they weren't signed and couldn't be signed.

Thorne and Elmore signed a memorandum of the December 11, 1971, meeting which outlined the transaction by which Butler would receive $400,000 cash for his 8.9-acre tract; O'Donnell would receive Butler's property in exchange for Muncaster, Royal and $150,000; Elmore would pay $200,000 for Royal; and Thorne would sell O'Donnell's Muncaster property for a net of $50,000. The agreement was also subject to several contingencies. The transaction was never consummated. Butler was seeking $445,000 for his property and, although Thorne informed Elmore that Butler's property was 8.03 acres, smaller than had originally been represented, he added that Butler would not lower his price and sign the contract.

A second transaction involving the same properties was proposed, and a contract was signed by Elmore and Butler on December 22, 1971. The contract provided that Elmore would purchase Butler's 8.03 acres for $445,000, contingent upon zoning and building permit requirements, approval of General Motors and Elmore's ability to trade the Butler property "for two equities in properties located in Midlothian, Illinois" plus $150,000. Thorne testified that, in addition to the $22,500 commission he was to receive from Butler pursuant to their exclusive agreement, he was to receive a total of $50,000 commission for the sale of Muncaster and Royal. Elmore testified that, in putting the second package together, he had told Thorne there would be no commission on the Muncaster and Royal properties.

O'Donnell agreed to the proposed trade of properties on January 14, 1972, but the second proposed deal with Butler also failed to come to fruition. A survey of the Butler property, made in mid-February, disclosed that the parcel was 6.9 acres rather than the 8.03 acres contained in the contract.

On March 31 and April 1, 1972, Elmore and O'Donnell consummated a deal whereby O'Donnell received a 10-acre parcel of land in Orland Park and $200,000. A limited partnership formed by Elmore, with Elmore as general partner, acquired Royal and Muncaster. Neither Thorne nor Butler was involved in the ultimate transaction.

When Elmore did not pay Thorne the $50,000 commission, Thorne brought this action against Elmore, O'Donnell, Muncaster and Royal. After O'Donnell's estate was dismissed from the case, the jury returned verdicts of $17,000 against Elmore and $16,500 against each corporate defendant. Judgment was entered on the verdicts and the three remaining defendants appealed. Thorne filed a cross-appeal challenging the dismissal of his claim against Elmore based on interference with a contract and a business expectation.


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