Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.


United States District Court, Northern District of Illinois, E. D

September 30, 1981


The opinion of the court was delivered by: Shadur, District Judge.


Plaintiff American Broadcasting Companies, Inc. ("ABC" or "WLS-TV")*fn1 sues Climate Control Corporation ("Climate Control") to recover the cost of certain advertising time. Both parties have moved for summary judgment. For the reasons stated in this memorandum opinion and order both motions are denied.

Questions as to Agency

Climate Control is a local distributor for a national air conditioning firm. In the spring of 1978 Climate Control (which had done virtually no television advertising) decided to run a commercial on local Chicago television stations. Because it understood media representatives would not deal directly with advertisers, so that it could not purchase air time itself, Climate Control secured the services of an advertising agency, Sander Rodkin/Hechtman/Glantz Advertising, Ltd. ("Sander Rodkin"). Sander Rodkin recommended both the ABC and CBS stations and June and July 1978 dates for running the commercials.

Sander Rodkin never discussed the terms of the billings with Climate Control except to say that Sander Rodkin would bill Climate Control, pay the media and receive a commission from the media. Sander Rodkin told Climate Control that was standard procedure in the advertising industry.

Unfortunately Sander Rodkin was in financial distress. Although it received full payment from Climate Control promptly after each billing, it was slow in honoring its billings from WLS-TV. Moreover it did not designate the checks it did remit to WLS-TV to reflect that they should be applied to the invoices covering Climate Control commercials (some checks designated other accounts, while others bore no designation at all).

Thus when Sander Rodkin entered into an assignment for the benefit of creditors on April 13, 1979 WLS-TV's accounts showed $13,175 still unpaid for television air time used for Climate Control commercials.*fn2 From Climate Control's point of view, however, it had paid for the time in full — its final payment of $15,000, designated as payment for WLS-TV air time, had been made to Sander Rodkin August 28, 1978.*fn3 It was not until December 1979 that Climate Control was notified ABC considered it liable for the unpaid balance, and on its refusal to pay this action followed.

ABC and Climate Control were never in communication as to purchase of the air time, which was accomplished by negotiations between representatives of Sander Rodkin and WLS-TV. Indeed Climate Control never saw the contract, which was WLS-TV's printed form filled in by WLS-TV. Although WLS-TV listed the "Advertiser" as "Climatrol, Inc." (sic), no employee of Climate Control negotiated or signed the contract. Instead the contract form, addressed by WLS-TV to Sander Rodkin as the buying agency, was accepted "for Agency and/or Advertiser" (again WLS-TV's form designation) by Debbie Wright, a Sander Rodkin employee.

Thus the first question involved in this action is whether Sander Rodkin was an agent for Climate Control with the power to bind it to a contract to pay for the purchase of advertising time.*fn4 If Sander Rodkin were indeed such an agent, Climate Control, as a disclosed principal, is bound by the contract to pay. But if Sander Rodkin were an independent contractor and not Climate Control's agent for that purpose, WLS-TV has no remedy against Climate.*fn5

Thus the undisputed facts must be sufficient to answer two questions if summary judgment is to be entered:

(1) Was Sander Rodkin Climate Control's agent?

    (2) If there were an agency relationship, did
  it encompass the power to bind Climate Control to
  pay WLS-TV?

Viewed in those terms, most of the parties' arguments on this motion have been misdirected.*fn6

Agency is a "voluntary relationship . . . that . . . cannot exist without the consent of both the principal and the agent." 1 I.L.P. Agency § 4. It is the principal who voluntarily empowers an agent to bind him to contracts with third parties. 1 I.L.P. Agency § 12. Thus the considerations relevant to determining whether Sander Rodkin was Climate Control's agent are factors relating to the relationship between Sander Rodkin and Climate Control, not between Sander Rodkin and WLS-TV.*fn7

For example, the parties dispute at some length the effect of a clause in the WLS-TV contract that might be argued to impose liability on each of Sander Rodkin and Climate Control. That language, wholly unknown as it was to Climate Control, cannot affect the relationship between Climate Control and Sander Rodkin. If Sander Rodkin were not authorized to bind Climate Control to pay, its signing of a dual liability contract would be outside its authority as agent and Climate Control would not be liable.

Two types of actual authority are possible: express and implied. Climate Control officials were admittedly unaware of the contracts signed by Sander Rodkin and never expressly authorized Sander Rodkin to bind Climate Control to make payment to any television station. Express authority, then, was clearly lacking.

However, "the relationship of agency does not depend on an express appointment and acceptance thereof, but it may be implied from the circumstances of the particular case. . . ." 1 I.L.P. Agency § 13. Thus the case reduces to the question whether the actions taken by Climate Control impliedly empowered Sander Rodkin to bind Climate Control to pay the television station for time purchased.

Seen from that perspective it is plain that summary judgment cannot be granted either party. Questions of implied agency are rarely susceptible to summary judgment because such agency must be inferred from actions by a principal, and those actions seldom permit of a single inference. This case presents a typical example. While each party does not dispute the truth of the facts advanced by the other, conflicting inferences can be drawn from the identical set of facts. Because such conflicting inferences are possible, summary judgment is inappropriate. United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962).

WLS-TV's form contract itself permits two possible interpretations. Its caption reads:

  Television facilities contract between WLS-TV an
  owned television station of the American
  Broadcasting Company, a Division of American
  Broadcasting Companies, Inc. and Advertiser as
  represented below:

That statement, coupled with WLS-TV's insertion of "Climatrol, Inc." in the blank space opposite the word "Advertiser," might indicate that the contract was intended to be between WLS-TV and Climate Control (but see n. 4).

But a closer reading of the contract reveals that an opposite inference is permissible. Paragraph (1) on the reverse side of the contract, which deals with payment, consistently refers to "the Agency and/or Advertiser. . . ." Paragraph (1)(f) then states (emphasis added):

  If this contract is between Company [WLS-TV] and an
  Advertiser, references to the "Agency" shall apply
  to the Advertiser, except that no agency commission
  will be allowed to Advertiser.

Unless it were contemplated that the contract may be between WLS-TV and someone other than an advertiser, there would of course be no occasion for the "if" clause — or for Paragraph 1(f) at all. That provision, coupled with the contract's consistent use of the "and/or" locution, certainly permits the inference that the contract may be between (1) WLS-TV and an advertising agency or (2) WLS-TV and an advertiser or (3) WLS-TV and both agency and advertiser. To precisely the same effect, on the face of the contract under the caption "For Agency and/or Advertiser" there are two lines for the signatures reflecting acceptance.

Because Paragraph 1 thus indicates that WLS-TV is willing to enter into a contract with either the agency or the advertiser or both, it may be inferred from the existence of two places for acceptance signatures that the contract is between WLS-TV and whatever entity or entities signs or sign the acceptance.*fn8 Here the contract was signed only by a Sander Rodkin employee, so it is possible to infer that the contract bound only Sander Rodkin.

Facts apart from the contract itself similarly look in two directions. ABC points to facts that might indicate the existence of an agent-principal relationship between Sander Rodkin and Climate Control (but see n. 6):

    (1) Sander Rodkin never purchased advertising
  time without first seeking approval from Climate

    (2) WLS-TV's claimed dual liability advertising
  contract (neither party considered the contract
  construction argument just discussed in this
  opinion) was widely publicized.*fn9

    (3) Climate Control had the ability to veto any
  action Sander Rodkin might have taken. Whether
  Climate Control actually exercised that power is
  irrelevant because it is the ability to control,
  whether exercised or unexercised, that indicates
  an agency relationship. Reith v. General Telephone
  Co. of Illinois, 22 Ill.App.3d 337, 339,
  317 N.E.2d 369, 372 (5th Dist. 1974).

Climate Control counters with several facts weighing against the existence of an agency relationship (or an agency to bind Climate Control to pay):

    (1) Sander Rodkin's recommendations approved by
  Climate Control were very general. They did not
  indicate the exact time or shows for which
  advertising time would be purchased. Sander
  Rodkin had complete discretion as to the details
  of purchasing advertising time.

    (2) WLS-TV dealt only with Sander Rodkin.
  WLS-TV billed Sander Rodkin, which in turn billed
  Climate Control.

    (3) Sander Rodkin received a commission from
  WLS-TV, not Climate Control.*fn10

    (4) Climate Control was unaware that Sander
  Rodkin was signing a contract that could in any
  way bind it to pay WLS-TV.

    (5) WLS-TV maintained its account receivable in
  the Sander Rodkin name. Sander Rodkin's checks to
  WLS-TV were often used to cancel any debts that
  Sander Rodkin owed to WLS-TV.

    (6) In the advertising industry the custom and
  practice is that the advertising agency is solely
  liable to the advertising medium.*fn11

Only one conclusion is possible: The agency question in this case cannot be decided via summary judgment. Indeed the case relied on so heavily by both parties involved a remand for trial of a question very similar to that posed in this case. Columbia Broadcasting System, Inc. v. Stokely Van Camp, Inc., 522 F.2d 369, 376-77, 379 (2d Cir. 1975).

As the Court stated in Tansey v. Robinson, 24 Ill.App.2d 227, 233-34, 164 N.E.2d 272, 275 (1st Dist. 1960):

  [The agency question] depends upon the actual
  practice followed by the parties and, as a
  general rule, becomes a mixed question of law and
  fact to be submitted upon proper instructions to
  a jury. Determination

  of the question of whether the relationship of
  employer and employee, principal and agent, or
  owner and independent contractor exists depends
  upon such facts as the matter of hiring, the
  right to discharge, the manner and direction of
  servants, the right to terminate the
  relationship, and the character of the
  supervision of the work done. . . . Unless those
  facts clearly appear, the relationship cannot
  become purely a question of law.


Climate Control contends in its cross-motion for summary judgment that (1) WLS-TV had knowledge of Sander Rodkin's shaky financial condition and (2) having failed to advise Climate Control of that fact, WLS-TV is estopped to demand payment from Climate Control. Once again the facts are simply not clear enough to permit summary judgment. Estoppel would require WLS-TV to have been aware, and to have failed to inform Climate Control, that Sander Rodkin would soon fold. On that score the facts are not yet clear.

Climate relies on documents reflecting that:

    (1) WLS-TV was aware that Sander Rodkin was a
  "slow pay" agency; and

    (2) WLS-TV was considering pulling Sander
  Rodkin's clients off the air if they did not
  erase a large debt.

While those facts certainly indicate WLS-TV had knowledge of Sander Rodkin's difficulties, it is quite possible that WLS-TV was entirely unaware those difficulties would soon lead to Sander Rodkin's demise. Conflicting inferences are again possible from the evidence, and summary judgment is inappropriate.


Numerous issues of material fact remain unresolved. Neither party is entitled to entry of summary judgment. Both their motions are denied.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.