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Schwarze v. Solo Cup Co.





Appeal from the Circuit Court of Lake County; the Hon. William Block, Judge, presiding.


Rehearing denied March 10, 1983.

Plaintiff, Robert C. Schwarze, brought this action in the circuit court seeking damages from defendant, Solo Cup Company (Solo), for the alleged breach of an employment agreement. After a bench trial, the trial court entered judgment in favor of Schwarze for $71,271.23, together with costs of suit. Solo appeals, contending that the trial court erred: (1) in considering parol evidence to find a breach of the employment agreement; and (2) in its calculation of damages. Schwarze cross-appeals, also contending that the court miscalculated the damages due to him.

The parties appear to be in substantial agreement as to the facts underlying this litigation. Prior to November 7, 1978, Schwarze was employed by Libby, McNeil & Libby as corporate vice-president in charge of sales management. During 1978 Schwarze was approached by Robert Wolfe, a corporate placement executive, who had been retained by Solo to recruit employees for executive sales and marketing positions. Schwarze expressed an interest in those positions and over the next several months met with Wolfe and officers of Solo to discuss employment. During some of these meetings Schwarze mentioned that he owned a house in Lake Bluff and that his children were currently enrolled in a local high school. Because of this, Schwarze said he would not consider a position which would require his relocation outside of the Chicago area until after his children had graduated from high school.

On November 7, 1978, after much negotiation, Schwarze and Solo entered into a written letter of agreement (Agreement) delineating the terms of his employment with Solo which was prepared on Solo's corporate sales office letterhead in Highland Park, Illinois. As pertinent, it provided that Schwarze would be employed as "Vice-President, Sales and Marketing, Institutional and Consumer Products Divisions" for a period of four years commencing November 7, 1978. Schwarze would receive as compensation a salary of $85,000 per year plus the following benefits: annual membership at a Lake Forest tennis club, use and expenses of a company car, health insurance, life insurance, vacation and reimbursement for all properly incurred business expenses. Either party could terminate the Agreement, with or without cause, by giving the other one month's prior written notice. If Schwarze terminated the Agreement, he would receive only salary and benefits which had accrued to the date of termination; if Solo terminated the Agreement, it would continue to pay to Schwarze "salary and benefits" from the date of termination until the expiration of the term of the contract. However, in that event, the "salary" payments would be reduced by the amount of salary received by Schwarze from other employment and would terminate altogether upon Schwarze being offered substantially equivalent employment. "Substantially Equivalent Employment" was defined in the Agreement as any employment providing total compensation of at least $85,000 a year. In addition, Solo had the right to assign the contract to any business or company which was wholly owned by it. There was no express provision in the contract which specified either Schwarze's place of employment or Solo's right to transfer him out of the Chicago area.

Schwarze began employment and five months later, in April of 1979, Leo Hulseman, an officer of Solo, informed Schwarze that he was to begin working full-time for Premore, Inc. (Premore), as corporate vice-president in charge of sales and marketing. Schwarze assumed his new duties and continued to receive his salary from Solo together with the other benefits provided for in the Agreement; he continued to work out of the Highland Park office.

Subsequently, on December 14, 1979, Schwarze received a telephone call from Leo Hulseman directing Schwarze to move out of the Premore office and "spend 100% of his time looking for another job." Although not in writing, both parties treated this conversation as a termination of the Agreement. Schwarze ceased fulfilling his duties for Premore and Solo continued to pay his salary and benefits as provided for in the event of Solo's termination of the Agreement. The parties did not then, nor do they now, contest the validity of the termination because it was not in writing as specified in the Agreement.

Schwarze sought other employment and on February 13, 1980, he received another call from Leo Hulseman inquiring as to his progress. After Schwarze explained his actions, Hulseman replied "we can't wait forever" and accused Schwarze of being "on the gravy train too long." Hulseman also recommended that Schwarze take a job for less money. On that same date, Hulseman sent a letter to Schwarze informing him that he was being assigned "to a sales capacity for Solo Cup Company in the New York City territory." The letter stated that Schwarze should assume his duties within seven days and that a permanent relocation to the New York area was expected. It also stated that if Schwarze accepted his new assignment, Solo would continue to honor the Agreement. Hulseman subsequently advised Schwarze that Solo would not reimburse him for the costs and expenses of relocation.

Schwarze refused the assignment and Solo terminated its payments under the Agreement on February 20, 1980. Subsequently, in April 1980, Schwarze was again employed at Libby, McNeil & Libby with an annual salary of $62,000, and on May 27, 1980, this litigation was commenced.

During trial, the court found that the Agreement was ambiguous as to whether Schwarze was to be employed solely in the Chicago area. Although the Agreement is silent as to this issue, the trial court relied upon the facts that the Agreement was printed on the corporate sales office letterhead in Highland Park, Illinois, and that Schwarze's benefits included membership at a Lake Forest tennis club. Over Solo's objection, the court admitted parol evidence, including precontract negotiations, and found that the Agreement contemplated employment only in the Chicago area. The court concluded that Solo's attempt to transfer Schwarze to New York was a breach of the Agreement by it.

In determining damages, the court calculated the difference in salary received at Schwarze's current position and that which he would have received under the terms of the Agreement in the sum of $71,271.23. However, the court refused to increment the damages by the monetary value of the benefits which Schwarze would have received under the Agreement. That sum was stipulated by the parties to be $19,346 (auto expense $9,600; medical expense $2,814; dental expense $1,307; life insurance $600; tennis club $5,025). The court also declined to offset against damages $1,293 in unemployment compensation received by Schwarze during his unemployment and a $5,000 bonus awarded Schwarze by Libby, McNeil & Libby which was deferred by Schwarze until his retirement. Accordingly, judgment was entered against Solo in the amount of $71,271.23.

On appeal, Solo contends that the circuit court erred in considering parol evidence to impose a geographical employment restriction on the Agreement. It asserts that no such express provision is found in the Agreement and therefore the transfer of Schwarze's employment to New York was proper and his failure to accept the assignment was a termination of the Agreement by him. Solo further argues that any damages awarded should have been reduced by the amount of bonus and unemployment compensation Schwarze received. On cross-appeal, Schwarze contends that his damages should have been increased by the monetary value of the benefits he would have received from Solo under the Agreement.

• 1 Initially, it should be noted that in the absence of any material questions of fact the construction of a contract and its legal effect present questions of law which may be independently determined by the reviewing court unrestrained by the trial court's judgment. (Mazanek v. Rockford Drop Forge Co. (1981), 98 Ill. App.3d 956, 959, 424 N.E.2d 1271, 1276, appeal denied (1981), 85 Ill.2d 578; Ancraft Products Co. v. Universal Oil Products Co. (1982), 100 Ill. App.3d 694, 697-98, 427 N.E.2d 585, 587, appeal denied (1982), 88 Ill.2d 549.) Thus, the reasons given for a judgment by the trial court are not material if the judgment is correct, and the reviewing court will affirm the judgment upon any legal grounds which have support in the record. Keck v. Keck (1974), 56 Ill.2d 508, 514, 309 N.E.2d 217, 220; Ogden Group, Inc. v. Spivak (1981), 92 Ill. App.3d 932, 934, 416 N.E.2d 393, 394; Lasswell v. Ehrlich (1981), 92 Ill. App.3d 935, 936, 416 N.E.2d 423, 424.

In making this determination, the courts> must give meaning to the plain language of the written contract. Mazanek v. Rockford Drop Forge Co. (1981), 98 Ill. App.3d 956, 959, 424 N.E.2d 1271, 1276, appeal denied (1981), 85 Ill.2d 578; Ahlvers v. Terminal R.R. ...

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