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Kocjancich v. Bridges





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


Defendants Ronald R. Bridges (Bridges) and Wide Scope Personnel, Inc. (Wide Scope) appeal from the entry of summary judgment in favor of plaintiff in an action brought under the Franchise Disclosure Act (the Act) (Ill. Rev. Stat. 1977, ch. 121 1/2, par. 701 et seq.). They contend that the trial court erred (1) in granting judgment on the issue of damages (a) because a genuine question of triable fact existed as to defendants' right to restitution as provided in the Act and (b) because the motion had been previously denied and no subsequent notice of motion had been filed; (2) in failing to enforce defendants' right to restitution under the Act; and (3) in finding that a payment to defendants as settlement for inducing an employee of defendants to work for plaintiff was a franchise fee as defined in the Act.

The record discloses that plaintiff and Wide Scope entered into a joint enterprise agreement to establish an employment agency. The business was to be operated by plaintiff under Wide Scope's logo, and the agreement provided in part that plaintiff was to pay defendants a five-percent commission on gross annual sales up to $100,000 and seven percent on the next $50,000, and that neither party would solicit or accept employment of an employee or ex-employee of the other without written waiver.

It appears that the agency was opened in August 1976 and that in May 1977 a dispute arose over plaintiff's desire to employ one Michele Gasior, who at that time worked for Wide Scope, and an agreement was reached whereby plaintiff paid Wide Scope $5,000 for the right to hire her.

In September 1977 the parties agreed to terminate the relationship — following which plaintiff sued defendants for rescission of the agreement and for damages under section 21 of the Act (Ill. Rev. Stat. 1977, ch. 121 1/2, par. 721), asserting in substance that the agreement was for the sale of a franchise as defined in the Act, and because it was in violation of the Act he was entitled under section 21(2) to the return, with interest, of the full amount paid by him for the franchise less any income received and to attorney's fees. Defendants counterclaimed inter alia for an accounting of the franchise income. Plaintiff then moved for summary judgment as to all issues. On May 19, 1978, the trial court granted summary judgment only as to the rescission issue and ordered "that the proof of damages and attorney's fees is to be set for trial in the future."

The record discloses that the next action of the court was on September 27, 1978, when it ordered "that this cause be placed on the trial call," and then on May 4, 1979, the case was set for pretrial conference on July 6, 1979, on which date an order was entered setting the case "for status report on July 26, 1979."

Counsel for defendants was not present at the July 26 hearing, at which plaintiff filed a petition for attorney's fees under section 21(2)(a) of the Act. The issues as to damages and attorney's fees had not been "set for trial" as provided in the May 19, 1978, order nor had any motion been made or notice given to defendants that they would be considered on July 26. The trial court, nevertheless, granted summary judgment on those issues in the amount of $14,205.63 — of which $9,014.63 represented franchise fees ($4,014.63 in commissions paid to defendants and $5,000 for the Gasior settlement), $3,750 for attorney's fees, and $1,441 interest. This appeal is from certain aspects of that judgment order, but no appeal has been taken from the initial order granting summary judgment as to the rescission issue.


We turn first to defendant's contention that by virtue of the application of the Act, a genuine factual question was created which precluded the entry of summary judgment on the issue of damages. We agree.

• 1 Section 57 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 57), supplemented by Supreme Court Rules 191 and 192 (Ill. Rev. Stat. 1979, ch. 110A, pars. 191, 192), provides for summary judgment. The purpose of that procedure is, where appropriate, to facilitate litigation and expedite trial by providing a means to avoid the expense and delay of trial. (Barnes v. Rakow (1979), 78 Ill. App.3d 404, 396 N.E.2d 1168; LaMonte v. City of Belleville (1976), 41 Ill. App.3d 697, 355 N.E.2d 70.) It is not designed to try issues of fact (Shockley v. Ryder Truck Rental, Inc. (1979), 74 Ill. App.3d 89, 392 N.E.2d 675; Littrell v. Coats Co. (1978), 62 Ill. App.3d 516, 379 N.E.2d 293; Century Display Mfg. Corp. v. D.R. Wager Construction Co. (1977), 46 Ill. App.3d 643, 360 N.E.2d 1346) and, due to its drastic nature, should be used with caution so as not to preempt the right to trial by jury where a genuine factual dispute exists (Kolakowski v. Voris (1979), 76 Ill. App.3d 453, 395 N.E.2d 6).

Thus, summary judgment can be entered only where it is determined that no genuine issue of material fact is presented and the movant is entitled to judgment as a matter of law. (Gasdiel v. Federal Press Co. (1979), 78 Ill. App.3d 222, 396 N.E.2d 1241; Cuthbert v. Stempin (1979), 78 Ill. App.3d 562, 396 N.E.2d 1197; Hillblom v. Ivancsits (1979), 76 Ill. App.3d 306, 395 N.E.2d 119.) If the opponent fails to controvert the proofs offered in support of the motion and the movant's showing of uncontradicted facts would entitle him to judgment as a matter of law, then summary judgment is proper. Where, however, it is determined from the pleadings and supporting documents that a genuine factual dispute exists, the salutary effect of summary judgment is lost and entry thereof is improper. (Century Display Mfg. Co. v. D.R. Wager Construction Co.) The courts> have further required that the right of the moving party to summary judgment must be clear, undisputed, and free from doubt (Cuthbert v. Stempin; Lind v. Zekman (1979), 77 Ill. App.3d 432, 395 N.E.2d 964) and that the pleadings and supporting documents be construed strictly against the movant and liberally in favor of the opponent (Doris v. Bradley (1979), 76 Ill. App.3d 890, 395 N.E.2d 636; Kolakowski v. Voris).

In pertinent part, section 21 of the Act provides:

"(2) Rescission. (a) Every sale of a franchise made in violation of this Act shall be voidable at the election of the franchisee or subfranchisor as provided in subsection (b) of this Section. The franchisor, subfranchisor, franchise broker, salesperson or other person on behalf of whom such sale was made or who shall have participated or aided in any way in making such sale shall be jointly and severally liable to such franchisee or subfranchisor for (1) the full amount paid, together with interest at the legal rate from the date of payment less any income received on the franchise and (2) reasonable attorney's fees." Ill. Rev. Stat. 1977, ch. 121 1/2, par. 721(2)(a).

Crucial to our determination that summary judgment was improperly granted in the case at bar is the phrase "less any income received on the franchise" from section 21(2)(a) of the Act quoted above. We find persuasive defendants' argument that by virtue of this phrase a genuine issue of triable fact exists as to the amount that may be due defendants in restitution as income received on the franchise. In this regard, we note that plaintiff's complaint asserts entitlement to the full amount paid for the franchise "less any income received"; that defendants' counterclaim sought an accounting of the franchise income to determine whether they were entitled to any additional commissions; and that, in a memorandum supporting their reply to plaintiff's motion for summary judgment, defendants assert that in seeking restitution of the amounts he paid for the franchise plaintiff must subtract "any income he has received on the franchise." Furthermore, we note that included in the damages awarded was the return of $4,014.63 for commissions paid by plaintiff to defendants based upon five percent of the franchise gross income. Thus, those commissions were paid on a gross of $80,292.60. Moreover, the ...

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