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W.r. Grace & Co. v. Beker Indus.

OPINION FILED OCTOBER 23, 1984.

W.R. GRACE & COMPANY, PLAINTIFF-APPELLANT AND CROSS-APPELLEE,

v.

BEKER INDUSTRIES, INC., DEFENDANT-APPELLEE AND CROSS-APPELLANT.



Appeal from the Circuit Court of Cook County; the Hon. Philip A. Fleischman, Judge, presiding.

PRESIDING JUSTICE HARTMAN DELIVERED THE OPINION OF THE COURT:

W.R. Grace & Company (Grace) sued Beker Industries, Inc. (Beker), in the circuit court of Cook County in 1983 for an alleged breach of an agreement entered into by the parties in 1979 as part of an arrangement settling prior litigation between them, also filed in the circuit court of Cook County. Five days before the present action commenced, Beker had filed a declaratory judgment action in Connecticut seeking a finding that Grace repudiated the agreement and that Beker is not liable for an alleged breach of the same agreement. Beker moved to dismiss the Cook County action, based upon section 2-619(a)(3) of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2-619(a)(3)). That motion was denied by Circuit Judge Lester D. Foreman. Thereafter, Beker filed a second motion to dismiss, per forum non conveniens, which was granted by Circuit Judge Philip A. Fleischman. Grace appeals from the grant of the forum non conveniens motion, and Beker cross-appeals from the denial of the section 2-619 motion.

The issues raised on appeal include whether: (1) the 1979 Cook County agreement is enforceable in Cook County; (2) the forum non conveniens dismissal was in error; and, on cross-appeal, (3) the circuit court erred in denying the section 2-619 motion to dismiss.

Grace is a Connecticut corporation having executive offices in New York, New York, and its principal place of business outside of Illinois. *fn1 Beker is a Delaware corporation having its principal place of business in Greenwich, Connecticut, and commercial processing facilities in Marseilles, Illinois, and Taft, Louisiana.

In 1978, Grace's lawsuit against Beker in the circuit court of Cook County alleged the breach of their antecedent phosphate rock supply contract. Beker's motion in 1979 to dismiss that case on forum non conveniens grounds was denied. Also in the 1978 Illinois action, Beker filed a counterclaim against Grace. In 1979, the parties entered into a "stipulation of settlement" and executed a new phosphate rock supply agreement (Agreement) to settle the case. In the stipulation of settlement, Grace agreed to dismiss the 1978 case without costs and release Beker from all claims connected with the contract "in consideration of and upon the expressed representation that * * * [Beker] will fully perform its obligations under the `Agreement' * * *." In the same stipulation of settlement, Beker agreed to dismiss its counterclaim against Grace. The stipulation then provided for the entry of a consent judgment in the following terms:

"5. Beker Industries Corp. stipulates and agrees that in the event Beker Industries Corp. fails to pay for the minimum tonnage set forth in paragraph 2 above and such failure is not excused under the terms and conditions of the `Agreement,' that separate and apart from any damages W.R. Grace & Co. may have for breach of the `Agreement,' a consent judgment may be entered against Beker Industries Corp. for an amount equal to $1.67 for each ton of phosphate rock less than the 1,200,000 tons minimum under the `Agreement' which it fails to pay for during the term of the `Agreement.'" (Emphasis added.)

The Agreement required Beker to purchase a minimum of 400,000 tons of phosphate rock per year for three years. The documents were filed together in the circuit court of Cook County. The circuit court entered its order of dismissal on October 19, 1979, in the following language:

"Pursuant to the stipulation of settlement between the Plaintiff, W.R. GRACE & COMPANY, and the Defendant, BEKER INDUSTRIES, INC., the terms of which are hereby noted by the court, and a copy of said agreement being attached to the dismissal order;

IT IS HEREBY ORDERED that, pursuant to the representations made in the stipulation of settlement, the above cause be and hereby is dismissed with prejudice and without costs." (Emphasis added.)

In 1982, a dispute arose between the parties concerning performance of the Agreement and on January 6, 1983, Beker filed a complaint against Grace in the Connecticut superior court, seeking a declaration that it had fulfilled all its obligations thereunder. The thrust of Beker's Connecticut complaint is that Grace demanded of Beker the renewal of an existing, but imminently expiring, letter of credit, or that Beker provide a new letter of credit or pay cash in advance. Beker claims that it was not obligated to provide such a letter, but had voluntarily done so in the past. On January 11, 1983, Grace filed the present case in the circuit court of Cook County seeking monetary damages against Beker for breach of the Agreement. Beker's section 2-619(a)(3) motion to dismiss because of the pending Connecticut claim was denied by Judge Foreman, who found that Grace's 1983 Illinois lawsuit was but a continuation of the original 1978 action. In the same order, Judge Foreman granted Grace leave to file its motion for judgment on the pleadings, based upon the provisions of the 1979 stipulation for a consent judgment, and gave Beker 90 days within which to file a response to the motion. Beker filed its answer to Grace's complaint, together with affirmative defenses, on April 7, 1983. On June 14, 1983, Beker filed its memorandum in opposition to Grace's motion for judgment on the pleadings.

While the motion for judgment on the pleadings was still pending before Judge Foreman, Beker filed its motion to dismiss on forum non conveniens grounds before Judge Fleischman. To the latter motion was attached the affidavit of Beker's executive vice president, who stated there was no connection between Grace's claim and Illinois. Grace responded. Beker's motion was thereafter granted by Judge Fleischman. The appeals by Grace and Beker followed.

I

• 1 Grace maintains that: the stipulation of settlement is really a consent judgment and is therefore enforceable by the circuit court of Cook County which originally entered it; the Agreement did not involve a judicial determination of the parties' rights but was the parties' own determination of their rights; and the circuit court's approval and recordation of the stipulation of settlement in the dismissal order explicitly indicates that it is a consent judgment, pointing to language which states that "[p]ursuant to the stipulation of settlement between * * * [p]laintiff and * * * [d]efendant, the terms of which are hereby noted by the court, and a copy of said agreement being attached to the dismissal order; * * *." Our supreme court has held in Bergman v. Rhodes (1929), 334 Ill. 137, 142, 165 N.E. 598:

"Parties who are competent to contract may agree to the rendition of a decree in respect to any right which may be the subject of litigation. When such a decree is entered it is a decree by consent. As a general rule, such a decree should show upon its face that it was entered by consent, (5 Ency. of Pl. & Pr. 961,) but it has been held by this court that such a showing in the decree is not indispensable and that an agreement may be shown by other evidence which does not ...


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