Appeal from the Circuit Court of Macon County; the Hon. John
L. Davis, Judge, presiding.
JUSTICE GREEN DELIVERED THE OPINION OF THE COURT:
This complex civil litigation arises from a written contract entered into between third-party defendant, North American Financial Services, Ltd. (North American), and defendant, the First National Bank of Decatur (Bank), on July 27, 1979. By the terms of the contract, the Bank agreed to purchase and North American agreed to supply certain data processing software services and supplies. The document also provided that North American would convert the Bank's current data processing arrangement to that described in the contract. On the same date, with the Bank's written consent, North American assigned its rights in the contract to its wholly owned subsidiary, plaintiff, Central Information Financial Services, Ltd. (Central).
On December 26, 1979, Central filed suit in the circuit court of McLean County against the Bank alleging a breach of the contract and seeking money damages. On March 6, 1980, the venue was transferred to the circuit court of Macon County pursuant to a Federal statute which limits the venue in which civil actions may be brought against national banking associations, such as the Bank, to the trial court of the locality wherein the bank is located. (12 U.S.C.A. sec. 94 (West Supp. 1945).) Subsequently, the Bank filed (1) an answer including an affirmative defense, (2) a counterclaim against Central, and (3) a third-party complaint against North American. The latter then counterclaimed against the Bank. During the jury trial, North American's counterclaim was withdrawn. The circuit court entered judgment on verdicts (1) finding in favor of Central on the original complaint and awarding damages in the sum of $300,000, (2) finding against the Bank on its counterclaim against Central, and (3) finding in favor of North American on the third-party complaint.
The Bank has appealed maintaining, inter alia, that actions of Central's counsel deprived it of a fair trial. We agree. The matters before the jury were complicated, and the Bank was entitled to have its evidence and arguments considered without the influence resulting from improper remarks concerning matters outside the record. Although the conduct of counsel for North American was entirely proper, we conclude that the remarks of Central's counsel also prejudiced the Bank with respect to its dispute with North American. Considering also the contractual and other relationships between Central and North American, we find fairness to require that a new trial be granted as to all claims between all parties. We will discuss other claims of error to the extent necessary to render assistance in the rulings to be made upon remand.
Before discussing the point upon which reversal is granted, further explanation of the issues before the trial court is necessary. The complaint alleged that after Central had made extensive and expensive efforts to prepare to perform the contract, an anticipatory breach of the contract occurred when the Bank informed Central that the Bank would not proceed with the contract. In its answer, the Bank admitted that it had elected not to proceed under the contract, but maintained it had done so because of breaches by Central. The Bank's affirmative defense, its counterclaim, and its third-party complaint alleged that, after the complaint was filed, the three parties had met and orally agreed to resolve the disputes pursuant to a document which had been reduced to writing but never signed by any party. The pleading asserted that the agreement required North American to complete the work, but that North American had failed to do so.
A copy of the document referred to in the affirmative defense, counterclaim and third-party complaint was attached to the Bank's pleadings. It purported to make various minor changes in the terms of the contract and its pricing arrangements. The document also provided that upon its execution (1) Central would reassign its contractual obligations under the July 1979 contract to North American, and (2) the Bank would pay Central $14,351.37 as reimbursement for expenses which Central had incurred in attempting to convert the Bank's data processing system. It also contained a schedule of dates for the conversion of the Bank's data processing system. Under the purported terms of the document, Central agreed that after the Bank's data processing system was converted to the North American system, Central would dismiss its case against the Bank.
Much of the evidence was undisputed. Apparently, a disagreement arose between the parties, and in the late fall of 1979 agents of the Bank told agents of the other parties that the Bank considered the contract to be terminated because of Central's failure to perform. Then, on December 17, 1979, the Bank's counsel sent Central's counsel a letter stating in part:
"We believe that your clients have breached the agreement between the parties by reason of inability to perform under the terms thereof.
[Y]ou are advised that [the Bank] considers the matter at an end (except as to claims for damages that it might pursue), and, therefore, this letter is to give you and your client and, by copy, to North American notice of termination of the contract."
The Bank does not dispute that the evidence at trial was sufficient to support a determination that it had breached the contract, but contends that the court erred in prohibiting it from introducing evidence that would have enabled it to show that matters occurring after the letter of December 17, 1979, and the filing of the complaint sufficiently proved the allegations of its affirmative defenses, counterclaim and third-party complaint.
The situation giving rise to the Bank's complaint about the conduct of Central's counsel started during a recess in the trial, when the court held a preliminary conference on instructions. Central offered Illinois Pattern Jury Instruction, Civil, No. 5.01 (2d ed. 1971), which, as drafted, concerned the failure of the Bank to call Bruce McKenzie as a witness. McKenzie was purportedly an expert witness on the conversions of data processing systems. Later, before the jury, Central called the Bank's sole counsel, Vernon Houchen, as a witness. Central's purpose was to support the giving of the instruction by showing that McKenzie had knowledge of the attempts that were made to convert the Bank's data processing system and was closely connected with the Bank. Mr. Houchen's objections to the testimony were overruled, and Central asked him some 15 questions concerning his relationship with McKenzie. The trial court refused to give the tendered instruction, explaining that no showing had been made that McKenzie was either under the Bank's control or more accessible to one side than the other.
In closing arguments, Central's counsel stated:
"Then we remember the testimony of Bruce McKenzie. He is the expert witness that didn't testify. He is the person who the bank contacted to come and tell us that [Central] * * *."
The Bank objected to this argument, the trial court overruled the objection, and Central's ...