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Dwyer v. Graham

OPINION FILED NOVEMBER 12, 1982.

ANDREW J. DWYER ET AL., PLAINTIFFS-APPELLEES,

v.

DANIEL R. GRAHAM ET AL., DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Winnebago County; the Hon. John E. Sype, Judge, presiding.

JUSTICE HOPF DELIVERED THE OPINION OF THE COURT:

This case is before this court for the second time. Defendant Graham originally appealed from an order of the circuit court of Winnebago County declaring a lease between the parties unenforceable. We dismissed that appeal for lack of jurisdiction because the trial court had expressly retained jurisdiction over issues raised in defendant's counterclaim and had not made a finding that there was no just reason to delay the appeal of the declaratory judgment portion of its order, as required by Supreme Court Rule 304(a) (73 Ill.2d R. 304(a)). Following our dismissal of the appeal defendant returned to the trial court and moved to dismiss his counterclaim. This motion was granted. Defendant again appeals from the declaratory judgment, alleging as error: (1) that he was improperly denied the right to a trial by jury; (2) that plaintiffs are barred by the doctrines of estoppel and laches from seeking to have the lease agreement declared invalid and; (3) that certain evidence submitted by defendant was improperly excluded by the court. The plaintiffs have moved to dismiss this appeal.

On June 14, 1973, the parties entered into a written contract for the sale and purchase of certain equipment connected with plaintiffs' cement business. Paragraphs one, two and three of a document entitled "Agreement of Sale" provided that defendants would purchase the equipment for $13,000. The defendants were to convey to plaintiffs lots 13, 14 and 15 of the Tresemer Subdivision, valued at $3,000 each, and a $4,000 note payable on or before January 1, 1974. Paragraphs four, five, six and seven of the agreement provided for a lease of plaintiffs' ready-mix cement plant at a rental of $1 per yard of concrete delivered. The lease was to continue for "as long as [defendants] desired," and plaintiffs were to maintain the ready-mix plant as long as the rental agreement was in effect. Prior to the commencement of this action, defendant Graham purchased defendant Tresemer's interest in the equipment, and Tresemer is therefore not an active party in these proceedings.

On November 30, 1979, plaintiffs commenced this declaratory judgment action requesting the court to declare the lease invalid and unenforceable because it was not reasonably limited in duration and because it lacked mutuality of obligation. Plaintiffs argued it was therefore terminable at will by either party. Defendant Graham filed his answer to the complaint, raising the affirmative defenses of estoppel and laches. He also filed a counterclaim, which was subsequently dismissed on defendant's motion, requesting damages and asserting that the lease agreement was part of plaintiffs' consideration for the sale and purchase of the equipment. Prior to trial, plaintiffs requested leave to withdraw their previously entered jury demand, and defendant requested leave to enter his jury demand. The court granted plaintiffs' motion but denied defendant's motion on the ground that there were no triable issues of fact.

The cause proceeded to trial and the court found the parties entered into a severable contract; the first being the sale and purchase of the cement equipment and the second being the lease agreement. It declared that the lease portion of the contract was terminable at the will of the parties, that it had in fact been terminated by the plaintiffs here, and that the parties had no further rights under the agreement.

We first turn our attention to plaintiffs' motion to dismiss the instant appeal. Plaintiffs' argument is three-fold: (1) that the issues here involved were disposed of by the previous order of this court dismissing the original appeal; (2) that this appeal was foreclosed by defendant's motion to dismiss his counterclaim, and; (3) that the trial court lacked jurisdiction to dismiss defendant's counterclaim because at the time of the dismissal the mandate from the appellate court was not yet filed. We have considered each of these contentions and find them to be without merit.

• 1-3 The previous order of this court dismissed the original appeal on jurisdictional grounds and did not reach the merits of the underlying litigation. Thus, this appeal remains unaffected by our prior order. (Weiland Tool & Manufacturing Co. v. Whitney (1969), 44 Ill.2d 105, 251 N.E.2d 242.) Further, the dismissal of the counterclaim with prejudice affects only the issues involved in the counterclaim and not the completely separable issues involved in the appeal from the declaratory judgment order. In his counterclaim defendant argued that the lease represented part of plaintiff's consideration for the allegedly premium purchase price of the cement equipment. However, this same argument also formed the basis of defendant's estoppel defense. Thus, the dismissal of defendant's counterclaim does not waive consideration of this claim on appeal. Finally, the trial court had jurisdiction to dismiss defendant's counterclaim prior to the filing of the appellate court mandate in the original appeal. Ordinarily the filing of a notice of appeal divests the trial court of jurisdiction to enter further orders of substance in a cause (City of Chicago v. Scandia Books, Inc. (1981), 102 Ill. App.3d 292, 430 N.E.2d 14; In re Johnson (1981), 102 Ill. App.3d 1005, 429 N.E.2d 1364), and jurisdiction is not regained, if at all, until the filing of the appellate court mandate in the circuit court. (Bank v. Nestrick (1981), 94 Ill. App.3d 511, 418 N.E.2d 515; Kuhlman v. Cotter (1968), 92 Ill. App.2d 475, 234 N.E.2d 815.) However, this general rule does not apply where the notice of appeal is filed prematurely from an order or judgment which is not yet a final and appealable order. (King City Federal Savings & Loan Association v. Ison (1980), 80 Ill. App.3d 900, 400 N.E.2d 562.) In this situation, the notice of appeal does not divest the trial court of jurisdiction to proceed with the case, nor does it vest the appellate court with jurisdiction to consider it. (80 Ill. App.3d 900; Myers v. Myers (1977), 51 Ill. App.3d 830, 366 N.E.2d 1114; Loveless v. Loveless (1972), 3 Ill. App.3d 967, 279 N.E.2d 531.) Thus, in the present case, the trial court retained jurisdiction of this cause throughout the appellate court proceedings. Its dismissal of defendant's counterclaim prior to the issuance of the appellate court mandate was therefore entirely proper. Plaintiffs' motion to dismiss the instant appeal is therefore denied.

We turn now to the merits of defendant's appeal, and first consider the contention that plaintiff was barred from challenging the validity of the contract by the doctrines of laches and estoppel. Defendant's laches defense is premised upon the plaintiffs' failure to assert the invalidity of the contract until 1979, six years after the agreement was executed. He further claims that he was greatly prejudiced as a result of this delay since he expended large amounts of time, effort and money in the development of the leased business.

In order to charge a plaintiff with laches, it is essential that the plaintiff knows the facts upon which his claim is based. (Mitchell v. Simms (1979), 79 Ill. App.3d 215, 398 N.E.2d 211.) In determining whether laches will bar a particular cause of action all the circumstances of the case will be considered. (Payne v. Williams (1980), 91 Ill. App.3d 336, 414 N.E.2d 836.) One consideration is the lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit. (Bonner v. Westbound Records, Inc. (1977), 49 Ill. App.3d 543, 552, 364 N.E.2d 570, 576; Pyle v. Ferrell (1958), 12 Ill.2d 547, 553, 147 N.E.2d 341, 344.) In addition, any circumstances tending to explain or excuse the delay in asserting one's rights should be considered. (Mitchell v. Simms; Harnois v. Harnois (1973), 10 Ill. App.3d 1062, 295 N.E.2d 511, cert. denied (1974), 415 U.S. 948, 39 L.Ed.2d 564, 94 S.Ct. 1470.) The application of the doctrine of laches is within the sound discretion of the trial court, and the decision of the trial court to apply or not apply the doctrine will not be disturbed unless a clear abuse of discretion appears. Finley v. Finley (1980), 81 Ill.2d 317, 410 N.E.2d 12; Beckham v. Tate (1978), 61 Ill. App.3d 765, 378 N.E.2d 588.

• 4 In the present case, we do not find an abuse of discretion in the trial court's refusal to apply the doctrine of laches. Defendant Graham testified that plaintiff Roger Dwyer at the time of the agreement's execution expressed concern regarding the legality of the open-ended lease agreement. Thus, defendant had some notice that plaintiffs might later assert the right on which this suit was based. (Bonner v. Westbound Records, Inc. (1977), 49 Ill. App.3d 543, 552, 364 N.E.2d 570, 576.) There was also some evidence that one of the defendants told plaintiffs not to worry about the enforceability of the lease agreement because they would either buy or get out of the business within five years after the execution of the agreement. Under these circumstances, the trial court could have found that plaintiffs' assertion of their right six years later was not unreasonable. We, therefore, are unable to conclude that the trial court abused its discretion in this regard.

Defendant's estoppel defense is based on the assumption that the lease agreement was part of plaintiffs' consideration for the allegedly premium purchase price paid for the equipment. Defendant essentially argues that the contract is not severable and that plaintiffs' acceptance of the benefits of the contract now estops them from denying its enforceability. The doctrine of equitable estoppel may be invoked only in cases where the words or conduct of the party against whom the estoppel is alleged amounts to a misrepresentation or concealment of a material fact. (Willowbrook Development Corp. v. Pollution Control Board (1981), 92 Ill. App.3d 1074, 416 N.E.2d 385; Denton Enterprises, Inc. v. Illinois State Toll Highway Authority (1979), 77 Ill. App.3d 495, 396 N.E.2d 34.) The party claiming the benefit of estoppel "must have relied upon the actions or representations of the other and must have had no knowledge or convenient means of knowing the true facts." Levin v. Civil Service Com. (1972), 52 Ill.2d 516, 524, 288 N.E.2d 97, 102; Denton Enterprises, Inc. v. Illinois State Toll Highway Authority.

• 5 Both of these elements are lacking in the present case. Defendant Graham testified at trial that he was aware of plaintiffs' doubt as to the enforceability of the lease agreement. Accordingly, he has failed to demonstrate that plaintiffs concealed or misrepresented any facts. Further, it is clear that defendant's claim of estoppel is based upon his reliance upon the legality of the lease agreement. This is a pure question of law, and a mistake of law is not a basis for application of equitable estoppel. (Denton Enterprises, Inc. v. Illinois State Toll Highway Authority (1979), 77 Ill. App.3d 495, 503-04, 396 N.E.2d 34.) Thus, defendant's assertion that plaintiffs were estopped to deny the enforceability of the lease agreement is without merit. The trial court properly refused to apply the doctrine in the present case.

Defendant Graham's final contention is that he was improperly denied his right to a trial by jury. Section 57.1(4) of the Civil Practice Act governs a party's right to a trial by jury in declaratory judgment proceedings. (Ill. Rev. Stat. 1979, ch. 110, par. 57.1(4).) That section provides:

"If a proceeding under this section involves the determination of issues of fact triable by a jury, they shall be tried and determined in the same manner as issues of fact are tried and determined in other civil ...


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