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Kukla Press, Inc. v. Family Media

OPINION FILED JUNE 11, 1985.

KUKLA PRESS, INC., PLAINTIFF-APPELLEE,

v.

FAMILY MEDIA, INC., DEFENDANT-APPELLANT (COUNTRY MUSIC MAGAZINE, INC., DEFENDANT).



Appeal from the Circuit Court of Cook County; the Hon. Henry Lewis, Judge, presiding.

PRESIDING JUSTICE STAMOS DELIVERED THE OPINION OF THE COURT:

This is a breach of contract action brought by plaintiff Kukla Press, Inc. against defendants Country Music Magazine, Inc. (Country Music), and Family Media, Inc. (Family Media), for nonpayment of certain printing work ordered by Country Music from plaintiff through plaintiff's affiliate, Shamrock Litho, Inc. (Shamrock).

On August 20, 1981, Country Music ordered printing work from plaintiff, through Shamrock, for the sum of $15,792.61 on open account. Bridget Spiess, an employee of Shamrock, acted as a broker and agent for plaintiff in procuring Country Music's printing work. On October 28, 1981, due to financial difficulties, Country Music hired Family Media, a group with extensive magazine publishing experience, to manage Country Music. Paragraph 8(a) of the management agreement provided that "Family Media shall be in no way liable for any debts of the Company [Country Music]." Paragraph 1(i) provided that Family Media had full authority to "authorize and make payments (including issuing checks) for the Magazine."

Family Media then contacted various creditors of Country Music, including Shamrock. In the affidavit of Robert Riordan, the president of Family Media, he stated that all such discussions between Shamrock, as representative of plaintiff, were held by Family Media solely and explicitly as the manager of Country Music and not on behalf of Family Media itself. Two discussions between Family Media and Shamrock are relevant here.

On November 4, 1981, Stanley Shikora, vice-president and treasurer of Family Media, met with Peter Hughes of Shamrock to discuss plaintiff's claims against Country Music. Shikora stated in his affidavit that he expressly informed Hughes that Family Media was not responsible for any debts of Country Music and that, as manager of Country Music for its owners, Family Media was endeavoring to cause Country Music to pay its debts, including those owed to plaintiff. He further stated that he never indicated that Family Media would pay any of Country Music's debts and that he expressly informed Hughes that Country Music alone was responsible for Country Music's debts. Plaintiff's affiant, Richard Hilke, vice-president of Kukla Press, although he was not actually present during the discussion between Shikora and Hughes, stated that Shikora told Hughes that Family Media would pay the past-due obligations of Country Music. No affidavit of Hughes was presented.

The November 4, 1981, conversation between Shikora and Hughes was confirmed by a letter written the same day by Shikora to Hughes. This letter was the first of two letters by Family Media enforced by the trial court as a guarantee. The letter provided in full:

"It was a pleasure to meet you today and to have been given the opportunity to tell you in person our plans for Country Music as they affect you.

It is our intent to pay all Country Music's accounts payable, which for Shamrock is approximately $1620 and for Kukla, your affiliated company, is approximately $16,400. I am unable, however, to give you an exact schedule of payments for another week or so, but in the meantime feel free to keep in touch with me.

/s/ Stanley Shikora Vice President and Treasurer."

The letter was written on Family Media's letterhead.

The next meeting took place on January 5, 1982, between Bridget Spiess of Shamrock and Robert Riordan, president of Family Media. In his affidavit Riordan stated that he specifically informed Spiess that Family Media was acting solely as the manager of Country Music, Family Media neither had nor was assuming any liability or obligation for any of Country Music's debts, and that all payments of those debts would be made solely by Country Music. Plaintiff's affiant, Hilke, again stated that at that meeting, though he was not actually at the meeting, Family Media promised to pay the debts of Country Music. Plaintiff did not submit an affidavit from Spiess.

The January 5, 1982, conversation was confirmed by a letter from Riordan to Spiess. This letter is the second of two letters written by Family Media enforced by the trial court as a guarantee. The letter provided in full:

"This will confirm today's conversation wherein we agreed to pay you the balance due of $15,792.61 in four equal installments of $3,948.15 on the first of February, March, April and May 1982. If it is possible to pay you sooner, ...


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