Appeal from the Circuit Court of Cook County; the Hon. Albert
Green, Judge, presiding.
PRESIDING JUSTICE LINN DELIVERED THE OPINION OF THE COURT:
Rehearing denied August 9, 1984.
Defendant, The Statesman Limited Partnership (Statesman), appeals from the judgment of the circuit court of Cook County awarding plaintiffs, B&B Investment Company and its individual partners (B&B), damages for breach of a contract to convey real estate. Both Statesman and its co-defendant, 5601 North Sheridan Associates (Associates), appeal from that portion of the judgment awarding plaintiff, Norman Fishman, a real estate brokerage commission. B&B also cross-appeals respecting the amount of damages awarded to it for breach of contract.
We affirm in part and reverse in part.
The pertinent facts presented at trial were largely undisputed:
Statesman and Associates were both formed as limited partnerships in 1972 for the specific purpose of acquiring a 90-unit apartment building located at 5601 North Sheridan Road in Chicago, Illinois. Since 1973, Statesman and Associates have each owned 50% of the beneficial ownership in the property. Legal title was held by American National Bank and Trust Company, with each limited partnership holding the power of direction only as to its own 50% interest. The conditions for either the sale of a co-owner's individual one-half interest or the sale of the entire building were set forth in paragraph 9 of a joint-venture agreement entered into by the parties in 1972. *fn1 That provision stated:
"9. Both parties shall be free to transfer interests in their respective partnerships as provided in their respective partnership agreements, but in the event that either party shall desire to sell its entire partnership interest, the respective party, as the case may be, shall give the other party thirty (30) days' prior written notice of the price, terms and conditions on which it proposes to dispose of its interest and the other party shall have the right by written notice to agree to purchase upon such price, terms and conditions. In the event that said other party declines to purchase as aforesaid, the selling party may thereafter dispose of its interest to a third party upon the terms and conditions offered, or less favorable terms to such third party. In the event the selling party desires to dispose of its interest on more favorable terms to any third party, it shall again give the other party thirty (30) days' prior written notice and the other party shall have the right to purchase as aforesaid. In the event an offer is received for the purchase of the entire apartment building, and the parties cannot agree whether to accept said offer, the party who desires to accept said offer shall so advise the other party in writing. Thereafter, said other party shall have thirty (30) days within which to either consent to the sale as proposed by such third party or may, within said thirty (30) day period, elect in writing to purchase the interest of the party desiring to sell for an amount equal to the proportionate share of the offer which would have been received by the party desiring to sell its interest in the apartment building. Failure to make an election within the thirty (30) day period shall be deemed to be a consent to such proposed sale, and the parties shall thereafter proceed to consummate such sale, and both parties agree to execute all necessary documents to complete such sale."
During the period of joint ownership, Statesman's general partners were Milton Schraiber and David Ziegler. Associates' general partners were William Wilkow (William), his father, Mendel, and uncle, Joseph. Schraiber and Ziegler dealt exclusively with William regarding joint venture matters, since he predominantly conducted Associates' affairs.
At various times, offers were received to purchase the property, about which William or Schraiber would inform the other and discuss the terms. In February 1977, Norman Fishman, a real estate broker who had recently sold an unrelated property for the Wilkows, arranged for Allan Bachewicz of B&B to inspect the Sheridan Road property. At that time, an agreement had not been reached as to Fishman's broker's commission.
After his inspection, Bachewicz had several meetings with William on behalf of Associates and with either Schraiber or Ziegler on behalf of Statesman regarding the purchase of the property. These discussions, occurring between February and May of 1977, resulted in B&B, submitting several offers to purchase the entire property. The basic terms of each offer provided for deferred payment of a portion of the purchase price and assumption of an existing mortgage. Each offer was discussed by Statesman and Associates, but none was acceptable to both. During this time, B&B had not been shown nor advised of the 1972 joint venture agreement.
On May 25, 1977, William sent a memo to Bachewicz, Ziegler, Schraiber, Fishman and Chicago Service Realty, another broker, outlining the prior negotiations, finding the most recent B&B offer unacceptable to Associates, and suggesting a meeting of all parties involved to determine whether "[w]e have a meeting of the minds as evidenced by a memo agreement signed by all the parties with sufficient details so as to permit the attorneys to draft proper documents." For reasons which are unclear in the record, such a meeting did not occur.
Some time after the memo was sent, William Wilkow and Richard Marmor, an attorney employed in Williams's law offices, met with Fishman and allowed him to review the joint venture agreement which incorrectly named Exchange National Bank as trustee of the property. After reading the agreement, Fishman showed them paragraph 9, about which William had forgotten. About this time, during another meeting between Fishman and Marmor, Fishman was told he would receive a commission if a sale occurred. Fishman never had any discussions with Schraiber or Ziegler about Statesman's paying a commission.
In the latter part of June 1977, William left the country for several months. In early July 1977, while William was away, B&B submitted a new written offer to Associates; the offer consisted of a two-page printed form "Real Estate Sale Contract" and a seven-page typewritten rider. Although the offer named both Associates and Statesman as sellers, the offer was delivered only to the Associates group. The offer, dated June 29, 1977, provided for a purchase price of $1,839,233.39, and that a broker's commission of $95,000 would be paid in equal portions to Fishman, Chicago Service Realty and Joseph Bachewicz. The provision respecting the commission was in accordance with an agreement reached between Fishman and Marmor.
On July 6, 1977, Mendel Wilkow, as a general partner of Associates, sent a letter to B&B that stated:
The undersigned as 50% beneficial owner of the above property herewith accepts your offer to purchase the above property dated June 29, 1977, a copy of which is attached hereto as Exhibit A (the `Offer'), subject to a condition precedent: the acceptance of the Offer by The Statesman, an Illinois Limited Partnership, being the remaining 50% beneficial owner of the above property, which acceptance may be express or implied and within the time therefor allowed, pursuant to paragraph 9 of that certain Agreement between the undersigned and The Statesman, dated in 1972, a copy of which is attached hereto as Exhibit B.
Our acceptance shall be deemed effective coincident with time of acceptance by The Statesman as aforesaid."
Neither Mendel nor anyone else signed the actual offer, and William did not see the B&B offer until after it had been submitted to Associates and Mendel's letter was sent.
On July 8, 1977, Ziegler received a letter from Marmor advising him of the latest B&B offer:
Enclosed please find a photocopy of an offer to purchase the above property received today by us from Mr. Allan Bachewicz providing for an all-cash deal.
Please be advised that this offer is acceptable to us and has been accepted by us as to our 50% interest. I am herewith officially tendering this offer to you for your acceptance pursuant to paragraph 9 of the Agreement between 5601 N. Sheridan Associates and your partnership dated in 1972.
Please advise me of what action you are taking or intend to take with respect to this contract."
After learning of this letter, Schraiber telephoned Marmor and told him that he had read the letter but that the offer was signed only by Bachewicz on behalf of B&B. Schraiber said that he did not understand what had occurred, nor how either Statesman or Associates could accept his offer. After asking to speak to William Wilkow, Schraiber was informed that William would not be returning from abroad until September.
On August 8, 1977, Marmor wrote Statesman stating that it was "deemed to have consented to the sale because of the lapse of thirty-one days." Schraiber and his attorney continued their attempts to meet with William to discuss the B&B offer. On September 19, 1977, a meeting finally occurred between Schraiber, Ziegler, their attorney, William, and Marmor. After Schraiber stated that the offer was too low, William offered to sell Associates' interest to Statesman for the amount Associates would realize from a sale to B&B under its current offer. Schraiber accepted these terms subject to the ability to obtain financing. During the first week in October 1977, Bachewicz called Schraiber, who informed him that B&B did not have any valid ...