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P.a. Bergner & Co. v. Lloyds Jewelers

OPINION FILED DECEMBER 31, 1984.

P.A. BERGNER & COMPANY OF ILLINOIS, PLAINTIFF-APPELLEE,

v.

LLOYDS JEWELERS, INC., ET AL., DEFENDANTS-APPELLANTS. — LLOYDS JEWELERS, INC., ET AL., PLAINTIFFS-APPELLANTS,

v.

P.A. BERGNER & COMPANY OF ILLINOIS ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Peoria County; the Hon. James M. Bumgarner, Judge, presiding.

JUSTICE HEIPLE DELIVERED THE OPINION OF THE COURT:

Rehearing denied February 8, 1985.

This action involves a department lease entered into between P.A. Bergner & Co., a retail department store chain in central Illinois, and Lloyds Jewelers, Inc., a retail jeweler located in Peoria. In 1967, Lloyds leased space within various Bergner stores and operated jewelry departments under the name of Bergner. The lease was to run until January 31, 1979, but was terminated by Bergner on July 31, 1977. Bergner brought an action for account stated to recover rent and fixture charges owed by Lloyds under the lease. J. Robert Congress, the sole shareholder of Lloyds, was also named as a defendant because he had personally guaranteed the indebtedness by signing two notes.

Lloyds filed a counterclaim against Bergner for breach of the lease contract. The remaining counterdefendants, Finlay-Strauss Division, Seligman & Latz, Inc., and the Charles V. Weise Co., were alleged by Lloyds to have been part of a conspiracy, along with Bergner, to tortiously interfere with Lloyds' contract rights and prospective business advantage.

In addition to the lease with Bergner executed in 1967, Lloyds also entered into a lease with the Charles V. Weise Co. in 1971 to operate jewelry departments in Weise stores. The lease was assigned to a corporation owned by Robert Congress and a business associate. The Weise lease was terminated by Weise as of October 1, 1977. The terms of the Weise lease were essentially the same as those of the Bergner lease and their factual background identical. Although Weise is a party to this suit, it is the performance of the Bergner lease which is primarily at issue.

Briefly stated, the facts are as follows. Under the 1967 Bergner lease, Lloyds paid fixed monthly rent plus a percentage of gross sales at year end. Bergner was to collect Lloyds' monthly receipts and make an accounting after deducting rent and fixture charges. In 1973, Lloyds discovered that Bergner had not been deducting the sums owed by Lloyds, resulting in a $46,000 arrearage. Lloyds informed Bergner, and the parties agreed that the debt would be paid in $4,000 monthly installments deducted from Lloyds' receipts by Bergner.

In 1975, a new lease was entered into which provided for monthly deductions of percentage rent in order to eliminate the possibility of huge debts piling up. Bergner continued to perform under the 1967 lease and failed to charge Lloyds for percentage rent and fixtures as provided in the 1975 lease until Lloyds caught the error in August 1976 and informed Bergner.

No action was taken by Bergner until January 1977, when it demanded full payment of the $258,084 arrearage by Lloyds. The sole shareholder of Lloyds, Robert Congress, signed a letter acknowledging the debt and gave two notes guaranteeing the indebtedness. The notes were not paid when due.

In July 1977, Bergner withheld all of Lloyds' gross receipts to apply against the debt. The practice was repeated in the months which followed, eventually forcing Lloyds out of business. Lloyds unsuccessfully attempted to negotiate a termination agreement. In October 1977, Lloyds vacated the Bergner stores.

Defendants Seligman & Latz, Inc., and Finlay-Strauss had been negotiating with Bergner in early 1977 to buy out the jewelry departments operated by Lloyds. Bergner and Finlay allegedly conspired to force Lloyds out of business by using the indebtedness as leverage.

In count I of the complaint, Bergner sought recovery for account stated. Counts II and III sought payment of the guarantee notes signed by Mr. Congress. The sum of the amounts alleged in counts II and III equaled $82,292.72, which was the amount alleged in count I. A jury verdict was returned for Bergner in the amount of $36,688.33 on all three counts. The trial court found that the verdicts could not be reconciled and ordered a new trial on damages. We reverse.

Lloyds argues that the record supports a reduction in the total amount sought by Bergner in count I from $82,292.72 to $36,688.33. The fact that the reduced award was repeated in counts II and III allegedly shows that the jury properly construed the notes to be for no more than amount owed under count I.

At trial, Lloyds established that the amount claimed by Bergner may have been inflated by as much as $68,000. Assuming the jury accepted all of Lloyds' evidence as true, it could have awarded as low a sum as $14,292.74. Apparently the jury accepted only part of Lloyds evidence and reduced the award to $36,688.33. The record supports such a reduction.

• 1 At trial, the attorneys for Lloyds were able to show on cross-examination that Bergner's account ledgers did not adequately support the full amount claimed by Bergner. Other accounting discrepancies were uncovered which would also support a reduced award. The fact that the jury awarded the reduced amount in all three counts is an error in form rather than evidence of hopeless confusion. The jury clearly intended the award of $36,688.33 in count I to represent the total amount of indebtedness. Instead of apportioning this amount between counts II and III, the jury construed each note as guaranteeing the amount in ...


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