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Mccracken Contr. Co. v. Deprizio & Assoc.





Appeal from the Circuit Court of Cook County; the Hon. Brian B. Duff, Judge, presiding.


Defendants appeal an order of the circuit court of Cook County granting a motion for summary judgment in accordance with an oral settlement agreement. The order dismissed the cause and entered judgment against defendants in the amount of $48,615 plus accrued interest. The sole issue on appeal is whether the trial court erred in granting summary judgment. For the reasons that follow, we affirm the judgment of the trial court.

The pleadings disclose the following facts relevant to our disposition. In May 1972, plaintiff and defendants entered into two agreements: a consignment agreement and an installment agreement for the purchase of certain equipment (equipment agreement). A few months later, the parties entered into a third agreement for the installment purchase of certain tools (tools agreement). In October 1973, because of defendants' financial difficulties, the parties modified the payment schedule set out in the equipment agreement, reducing the monthly amount and extending the term. No modification was made to the balance due, nor was any agreement other than the equipment agreement affected by the revised payment schedule. Defendants continued to experience financial problems and eventually became delinquent on all three agreements. As a result, in December 1976, plaintiff filed a four-count complaint against defendants requesting: (1) count I — the balance of $61,297.30 plus 6% interest due and owing on the equipment agreement; (2) count II — personal guarantee regarding the amount due in count I; (3) count III — the balance of $5,777 plus 6% interest due and owing on the tools agreement; and (4) count IV — an accounting to determine the amount due on the consignment agreement. In February 1978, in an effort to resolve the lawsuit, the parties met in the office of plaintiff's attorney and entered into an oral settlement agreement, consolidating the outstanding balances in all three agreements. Consequently, the 1976 complaint was dismissed without prejudice. Pursuant to the settlement agreement, defendants agreed to pay plaintiff a total of $90,000 at 6% interest in 48 monthly installments of $2,113.70 each.

In April 1980, after making 25 of the monthly installments, defendants stopped paying. As a result, on April 24, 1981, plaintiff filed another four-count complaint which essentially realleged those counts in the 1976 complaint with the necessary revisions having been made in the amounts due and owing on the various agreements. In their answer, defendants admitted entering into the original 1972 agreements, but denied the amount due and owing, and, in turn, filed a counterclaim which alleged that they had overpaid plaintiff, and requested reimbursement in the amount of $36,483.17. Plaintiff's motion to dismiss the counterclaim stated that pursuant to the 1978 agreement, the total amount due plaintiff from defendants was $101,457.60, of which only $52,842.50 had been paid, resulting in underpayment, not overpayment.

Following a change in plaintiff's attorneys, plaintiff filed a first-amended complaint in which it alleged that in consideration for dismissal of the 1976 lawsuit, defendants had agreed to pay plaintiff monthly installments of $2,113.70 for 48 months, commencing March 1, 1978. However, after making 25 of the monthly payments, defendants refused to pay more. In their answer, defendants admitted to entering into the 1978 settlement agreement, but claimed that: (1) the parties erred because they failed to consider the 1973 agreement; and (2) from October 1, 1973, to April 2, 1980, defendants had paid plaintiff $151,683.17, an amount in excess of their indebtedness.

Plaintiff then filed its motion for summary judgment, stating that there were no genuine issues as to the following: (1) a settlement agreement entered into by the parties in consideration for the dismissal of a 1976 lawsuit; (2) pursuant to the settlement agreement, defendants agreed to pay to plaintiff $90,000 plus interest in 48 monthly installments of $2,113.70 each; (3) after making 25 of the 48 payments, defendants refused to make any more; and (4) the unpaid balance on the settlement agreement is $48,615.10 plus interest. In response, defendants alleged, inter alia, that (1) plaintiff's pleading contains a discrepancy in the amount due; (2) defendants have overpaid plaintiff; and (3) the parties erred in arriving at the settlement by failing to consider the 1973 agreement. Following a hearing on the motion, the trial court entered its order granting summary judgment and ordered defendants to pay $48,615.10 plus interest. Defendants' timely appeal followed.


Defendants contend that the trial court erred in granting summary judgment because disputed issues of material fact exist as to the basis of the 1978 settlement agreement and as to the amount due and owing at the time of that agreement.

• 1, 2 As an effective means of promoting judicial economy, settlements are generally encouraged and favored by the courts>, and, in the absence of mistake or fraud, are conclusive on the parties as to all matters included therein and will not be lightly altered or set aside. (Knoll v. Swanson (1968), 92 Ill. App.2d 398, 402, 234 N.E.2d 543.) If not within the Statute of Frauds, settlements may be oral and are binding so long as there is an offer and acceptance to compromise and there is a meeting of the minds as to the terms of the agreement. Sheffield Poly-Glaz, Inc. v. Humboldt Glass Co. (1976), 42 Ill. App.3d 865, 868-69, 356 N.E.2d 837.

• 3 In the present case, there is no issue as to the offer and acceptance of a compromise. Both parties admit that the 1978 settlement agreement was entered into in consideration of dismissal of the 1976 complaint. However, defendants claim that a material doubt exists as to whether there was a meeting of the minds on the material elements of the agreement precluding the propriety of a summary judgment. In analyzing defendants' position, we are cognizant that because summary judgment is a drastic method of disposing of cases, we must construe the pleadings, depositions and affidavits most strictly against the movant and most liberally in favor of the opponent. Kolakowski v. Voris (1979), 76 Ill. App.3d 453, 456-57, 395 N.E.2d 6.

• 4 Defendants first contend that issues of fact remain as to the basis of the 1978 agreement. Defendants' argument on this point is replete with factually erroneous statements and unsupported conclusions that render it totally unpersuasive. First, defendants allege "mutual mistakes of fact arising out of an oversight in the 1973 agreement." Yet, there is no evidence of this purported oversight. The 1973 agreement is simply described as having been a revision of the equipment agreement's payment schedule, nothing more. Second, defendant claims that McCracken's attorney, Peter B. Carey and defendant DePrizio intended the 1978 agreement "to establish a new payment schedule of the prior balance due," and that neither considered that agreement to modify or compromise the amount due. As the following excerpt from Carey's deposition illustrates, this is an erroneous statement:

"Q. [H]ow is it that you make the statement that the amount [due] was settled for $90,000?

A. Because the indebtedness, at that time, was in the amount of $88,000 some odd dollars plus interest. Ray [McCracken] agreed to waive part of that interest, and we agreed on a round figure of $90,000 at a rate of six percent for four years, which when you figure the monthly payments, that comes out to $2,113.70, of which Mr. DePrizio in fact made 25 payments pursuant to the agreement."

Further, the 1978 settlement agreement was a consolidation and settlement of the balances due pursuant to the equipment agreement, tool agreement and consignment agreement. Clearly, it was not ...

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