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Hutchinson v. Brotman-sherman Theatres

OPINION FILED MARCH 31, 1981.

JAMES R. HUTCHINSON, D/B/A T.K.O. PRODUCTIONS, PLAINTIFF-APPELLEE,

v.

BROTMAN-SHERMAN THEATRES, INC., ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Cook County; the Hon. CHARLES FREEMAN, Judge, presiding.

MR. PRESIDING JUSTICE HARTMAN DELIVERED THE OPINION OF THE COURT:

Defendants appeal from a judgment granting to plaintiff both compensatory contract damages and punitive damages sounding in tort. Questions raised on the pleadings include whether a partner may sue to enforce a partnership claim without joining all the partners as plaintiffs; pleadings were improperly amended to state facts inconsistent with facts stated in prior pleadings; a party may be added as a defendant during the course of trial by filing an amended complaint without service of summons; and a defendant may be denied leave to file a counterclaim where no counterclaim has been submitted to the court. Other issues presented for review are whether punitive damages were properly awarded under the circumstances presented; contract damages may be awarded against a noncontracting party; the record supports a judgment against an added party; and other evidentiary and damage issues. For the reasons which follow, we vacate and amend in part and affirm.

The 1974 telecast of the Muhammad Ali and George Foreman heavyweight championship fight from Zaire, Africa (hereinafter the fight) was organized by two New York companies which, on June 3, 1974, conveyed to Herbert Muhammad (hereinafter Muhammad) exclusive telecast rights for the fight, including Chicago, Gary-Hammond, Indiana and downstate Illinois. He was granted the authority to negotiate or assign these rights to anyone he wished. Muhammad then allegedly assigned the Chicago and Gary-Hammond rights to a partnership formed after June 3, 1974, known as TKO Productions (hereinafter TKO), consisting of six partners, Irving Bloom, James Hutchinson, Walter Turner, Terry Shoemaker, David Potter and Charles Fritsch. Under the Muhammad-TKO assignment of rights, the latter agreed to pay the former $60,000 and meet certain other conditions required by one of the New York telecast promoters. On June 19, 1974, one of the TKO partners, Bloom, an attorney, contacted Oscar Brotman, president of both Brotman-Sherman Theatres, Inc. (hereinafter BST), and South Shore Amusements, Inc. (hereinafter SSA), who had exhibited many fights in the past. Brotman said he was interested in this fight and invited the TKO partners to meet in his office, which they did.

Brotman had been trying for some time to get the telecast rights to the fight for himself and, with the TKO partners present, he called the New York telecasting company to verify Muhammad's claim of exclusive rights, part of which TKO asserted possession. Confirmation of Muhammad's exclusive rights was made and the TKO partners and Brotman commenced negotiations, after which the TKO partners retired to Bloom's office and a draft agreement was typed for signatures. The partners then returned to Brotman's office with the agreement, which revealed the contracting parties to be "James R. Hutchinson, d/b/a T.K.O. Productions, hereinafter designated as First Party and Brotman-Sherman Theatres, Inc., hereinafter designated as Second Party." A cover letter signed by Hutchinson was attached. Brotman and Hutchinson signed the contract and some copies. The TKO partners returned to Bloom's office where they discovered that they had taken only unsigned copies of the agreement with them and had left two signed copies with Brotman. The TKO partners returned once again to Brotman's office and after discussion all agreed that paragraph 4 of the contract made little sense and the same was scratched out by Brotman and initialed by both Brotman and Hutchinson. Hutchinson and another partner, Shoemaker, returned to Bloom's office and the agreement was redrafted deleting only paragraph 4, the balance being identical in all other respects. Hutchinson and Shoemaker then again returned to Brotman's office and asked to have Brotman sign the document. Brotman's receptionist, after announcing their visit and purpose, took it into Brotman's office and returned with it shortly thereafter handing Hutchinson the document bearing Brotman's signature, the authenticity of which is in dispute. The next day, a $60,000 escrow agreement was entered into between Brotman and Muhammad at Amalgamated Trust and Savings Bank in accordance with paragraph 1 of the June 19 agreement between the parties; however, a $5,000 escrow to be deposited with Chicago Title and Trust Co., in accordance with paragraph 2 of the agreement, was never opened.

The fight was telecast via closed circuit television on October 29, 1974. Plaintiff's evidence reveals that on the night of the fight, Brotman's general manager, Robert Kennedy, saw Hutchinson at the International Amphitheatre and showed him an alteration in paragraph 3 of the contract, which provided that instead of TKO receiving $1 per ticket after the $60,000 payable to Muhammad was recouped in gross receipts, TKO was to receive only $1 per ticket after the first 60,000 tickets were sold. This alteration was initialed only by Brotman, and Kennedy asked Hutchinson to add his initials to the alteration. Hutchinson refused, asserting reliance on the document as signed on June 19, 1974. TKO's efforts to secure compensation under the contract were unavailing.

A two-count unverified complaint was filed in December 1974 naming "Herbert Muhammad and James R. Hutchinson dba T.K.O. Productions" as plaintiffs and "Brotman-Sherman Theatres, Inc.," as defendant. Count I sought contract damages of the $5,000 in escrow money which would have been payable to TKO after the fight had been shown and $1 per ticket over the first $60,000 in gross receipts. Count II sought damages for BST's having displayed the fight downstate without authority, for which additional damages were sought. BST filed an answer denying that it had any agreement with plaintiff Muhammad, admitting that it established a $60,000 escrow, and denying that it was required to do so. Muhammad subsequently signed a release with BST, and he was later dismissed by stipulation in November 1976.

BST moved to dismiss the remaining action in October 1977, claiming that Muhammad was also doing business as TKO Productions and that since he had signed the release with BST, the basis of the lawsuit had been dissipated. An unverified amended complaint at law was thereafter filed by Hutchinson "d/b/a T.K.O. Productions" as plaintiff naming BST as defendant, this time alleging in count I that: Muhammad, possessor of exclusive rights of the distribution and showing by closed circuit television of the fight, had assigned part of his rights to the distribution of said fight to plaintiff Hutchinson; the parties entered into a written contract with BST, a copy of which was attached as Exhibit A, purporting to incorporate the original June 19, 1974, agreement with paragraph 4 deleted; BST complied with the $60,000 escrow but violated the agreement to open the $5,000 escrow account; and BST refused to pay TKO the sum of $1 per ticket over the first $60,000 of gross receipts. Count II again claimed damages for the unauthorized display of the fight by BST to downstate communities. BST moved to dismiss the amended complaint based upon an asserted contradiction between allegations in the original complaint which described TKO's right to contract with Brotman as having been based upon Muhammad's "concurrence," and allegations in the amended complaint that TKO's right to contract with BST was based upon an "assignment" by Muhammad to TKO, and also upon the absence of other partners of TKO as parties plaintiff. Plaintiff added a third count to the amended complaint, claiming that Brotman had knowingly made false representations in order to induce TKO to transfer the rights to BST. The trial court denied defendant's motion to dismiss. During the course of the trial, pursuant to leave of court, a second amended complaint was filed adding SSA as a party defendant, over objections.

The cause was heard by the court without a jury, commencing in February, and continuing from time to time until the close of the trial on June 18, 1979. Plaintiff was awarded $29,837 plus interest from November 1, 1974. That figure was computed by taking gross receipts of $443,745 minus the first $60,000 payable to Muhammad; dividing the balance by $20 per ticket, leaving 19,187 tickets sold after the first $60,000 in gross receipts; and arriving at liquidated damages of $19,187. To that figure was added the $5,000 which was not put in escrow pursuant to paragraph 2 of the agreement and $5,650 for the $113,500 in gross receipts returned to ticket holders at three theatres which experienced mechanical breakdowns. In addition to the $29,837 plus interest, the court imposed an award of $30,000 in punitive damages based upon Brotman's conduct. On November 8, 1979, the court denied BST and SSA's motion to vacate or modify judgment. BST appeals from each of the above orders, and SSA appeals from those orders and judgments entered after it was made a party on February 28, 1979.

I.

BST and SSA first assert that the complaint should have been brought in the names of each of the six TKO partners rather than James R. Hutchinson doing business as TKO Productions and that they were misled into believing that TKO Productions was the name of a partnership composed of Herbert Muhammad and James R. Hutchinson. They insist that Hutchinson's failure to join his partners as plaintiffs or to fully and fairly allege his relationship with those partners and with Muhammad severely prejudiced BST because BST effected a settlement of the original action with and obtained a general release from Muhammad believing that the entire claim set forth in the complaint was thereupon satisfied. They maintain that each partner has authority to settle debts due and owing to the partnership and that an obligee on a partnership claim is relieved of his obligations to the other partners by obtaining a release of one of them, so that the litigation should have been terminated in favor of BST. An examination of the pleadings does not support defendant's position.

• 1 The second paragraph of the original unverified complaint states "that on or about June 19, 1974 First-Party with the concurrence of Herbert Muhammad entered into a written contract with Second-Party," defendant herein. The agreement of June 19, 1974, upon which suit was based, and a copy of which was attached, also referred to James R. Hutchinson doing business as TKO Productions as "First-Party." Nowhere in the agreement is Herbert Muhammad identified as the first party. The escrow, opened at the Amalgamated Trust and Savings Bank on the day after the agreement was executed, shows directions signed only by Brotman and Muhammad and reveals that the $60,000 to be paid BST into the escrow was to be transferred solely to the account of Muhammad without any reference to TKO or any of its partners. Further, the distinction was apparently clear enough at the time BST's answer was filed when it demanded strict proof of alleged "concurrence" between plaintiff Muhammad and Hutchinson. Additionally, evidence adduced at trial revealed that Brotman saw a letter from the New York closed circuit telecasting company granting exclusive telecast rights only to Muhammad, which were verified when Brotman called that company in the presence of the six TKO partners. Muhammad's personal right to assign the telecast was also then confirmed. The trial court concluded that the amendments were made to more clearly set out the relationships and that the same cause of action was stated in both complaints. We find no error in this conclusion.

• 2 As to BST's complaint that Hutchinson should have been required to add the other members of the partnership to the suit rather than to have sued in his own name alone, the evidence shows that Brotman was well aware of all six partnership interests since all were seated in his office at the time he telephoned New York to verify the status of the assignment rights. Notwithstanding his knowledge, he was satisfied to proceed to contract with Hutchinson doing business as TKO Productions and suit was in fact brought in the same name as the party who signed the contract. Had BST experienced any confusion in this regard, resort could have been had to sections 37 and 45 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, pars. 37, 45) for a bill of particulars or to make the complaint more definite and certain. This he failed to do. In any event, the fact that Hutchinson had other partners in TKO Productions which may not have been apparent from the contract signed or from the allegations of the lawsuit is not fatal either to Hutchinson's rights or to the rights of the partnership, which may adopt the name of but one of its partners when it does business and yet establish by parol proof that a contract in that name is in fact a partnership. Daugherty v. Heckard (1901), 189 Ill. 239, 245, 59 N.E. 569; Henry DeCicco & Co. v. Drucker (1968), 101 Ill. App.2d 340, 346, 243 N.E.2d 456; Schalk v. Schaffer (1954), 2 Ill. App.2d 286, 119 N.E.2d 412 (abstract); Greenleaf v. Feinberg (1918), 210 Ill. App. 271, 282.

BST's assertion that Hutchinson alleged Muhammad to have been his partner in his pleadings and that based upon those allegations BST settled the action with Muhammad is belied not only by the pleadings, but the language of the release between Muhammad and BST, which identifies Muhammad only as a plaintiff in the action. It is notable that although BST extended the release to "Herbert Muhammad, his agents, employees, heirs, executors, administrators and assigns, * * *" no mention is made of his alleged partnership in that language. That the release would have included such remote contingencies with respect to Muhammad, but would have excluded what now appears to be BST's ...


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