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Dayan v. Mcdonald's Corp.

OPINION FILED NOVEMBER 12, 1985.

RAYMOND DAYAN, INDIV. AND AS REPRESENTATIVE FOR RAYBILL ASSOCIATES, PLAINTIFFS AND RESPONDENTS-APPELLANTS,

v.

MCDONALD'S CORPORATION, DEFENDANT AND PETITIONER-APPELLEE.



Appeal from the Circuit Court of Cook County; the Hon. Richard L. Curry, Judge, presiding.

PRESIDING JUSTICE BUCKLEY DELIVERED THE OPINION OF THE COURT:

This appeal arises out of a petition brought by McDonald's Corporation (McDonald's) seeking a declaration that Illinois law governs the validity and performance of provisions in a contract with plaintiff Raymond Dayan concerning certain percentage fee payments made by Dayan to McDonald's, and that such payments were valid and enforceable under Illinois law. The trial court granted summary judgment for McDonald's, holding as a matter of law that Illinois law governs the percentage fee payment provisions in the contract and validates the payments made. Dayan appeals. For the following reasons, we affirm.

Issues relating to the present dispute have been litigated by the parties for the past 15 years and have been the subject of four prior opinions by this court. (Dayan v. McDonald's Corp. (1984), 126 Ill. App.3d 11, 466 N.E.2d 945; Dayan v. McDonald's Corp. (1984), 125 Ill. App.3d 972, 466 N.E.2d 958; Dayan v. McDonald's Corp. (1979), 78 Ill. App.3d 194, 397 N.E.2d 101; Dayan v. McDonald's Corp. (1978), 64 Ill. App.3d 984, 382 N.E.2d 55.) Some background about the litigious relationship of the parties will be helpful to understanding the present controversy.

In 1970, Dayan commenced an action in the circuit court of Cook County, alleging that McDonald's had breached a prior agreement giving Dayan the right to purchase certain franchises and the right to develop and operate certain restaurants in Paris, France. In 1971, pursuant to a consent decree, the parties entered into a master license agreement (MLA) under which Dayan obtained an exclusive license to operate McDonald's restaurants in Paris. McDonald's was obligated under the MLA to develop and construct a certain number of restaurants, subject to various conditions, and to lease those restaurants to Dayan. In turn, Dayan was obligated to pay McDonald's a base rent plus a percentage of his gross sales from such leased restaurants. The MLA provided that the courts of France and Illinois were to have concurrent jurisdiction over all controversies. The consent decree stated that the trial court retained jurisdiction to enforce compliance with the terms of the MLA.

In 1972, pursuant to a second consent decree, the parties amended the MLA (first supplement). The first supplement stated that "[t]he [MLA] remains in full force and effect in accordance with its terms except as herein supplemented." This second consent decree provided that the trial court retained jurisdiction to enforce compliance with the terms of the MLA, as supplemented.

In 1973, in settlement of a controversy concerning obligations under the lease payment provisions of the MLA, the parties amended the MLA and the first supplement by entering into a second supplement to the MLA pursuant to another consent decree. The second supplement terminated McDonald's obligations to purchase or lease real estate; instead, McDonald's agreed to provide, or cause to be provided, financing for the acquisition and construction of certain restaurants by Dayan. Dayan, in turn, agreed to repay McDonald's the principal amount advanced, amortized over a term of 15 years, plus interest or charges incurred by McDonald's to carry the loan for that period. Additionally, in lieu of rental payments McDonald's was to receive a specified percentage "financing fee" (percentage fee) based on the gross sales of restaurants.

In accordance with the second supplement, McDonald's and the French corporations embarked upon the financing relationship, and funds were advanced by McDonald's French subsidiary, McDonald's France S.A.R.L., to the French corporations organized by Dayan. From 1973 through 1982, the French corporations made the applicable percentage fee payments. However, litigation ensued with respect to the termination of Dayan's French franchise and, after an extensive trial, the circuit court of Cook County entered an order in September 1982 terminating the franchise. This order was affirmed on appeal. Dayan v. McDonald's Corp. (1984), 125 Ill. App.3d 972, 466 N.E.2d 958.

In December 1983, Dayan caused his French companies to file suit in France against McDonald's French company, seeking a judgment that the percentage fee payments under the MLA, as supplemented, were usurious under French law, that McDonald's be ordered to return such payments, and that any obligation to substitute another form of payment be declared null and void.

Consequently, in February 1984, McDonald's filed a petition for declaratory judgment and other relief in the circuit court of Cook County. McDonald's sought a declaration that Illinois law governs the method and performance of percentage fee payments and that such payments were valid and enforceable under Illinois law. Dayan moved for a change of venue which was denied by the trial court. Dayan additionally filed motions to dismiss the action under the doctrines of forum non convenience and prematurity. These motions were also denied. On October 19, 1984, the trial court granted summary judgment for McDonald's on its declaratory judgment petition, and this appeal followed.

On appeal, Dayan argues: (1) the trial court erred in denying his motion for a change of venue; (2) the parties intended French law to govern the validity and performance of the percentage fee payments; (3) the trial court erroneously denied his motion to dismiss for forum non conveniens; and (4) the trial court erred in not dismissing McDonald's petition as premature.

I

• 1 We first address Dayan's argument that the court erred in denying his motion for a change of venue filed pursuant to section 2-1001 of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2-1001). This section allows a motion where any party or his attorney fears he will not receive a fair trial because the judge is prejudiced against him or his attorney. The right to a change of venue on account of prejudice of the trial judge is absolute where the motion is filed before the judge has ruled on any substantive issue in the case. (Perimeter Exhibits, Ltd. v. Glenbard Molded Binder, Inc. (1984), 122 Ill. App.3d 504, 461 N.E.2d 44.) However, if after the trial judge has ruled on a substantive issue, a party has a legitimate reason to believe the judge is prejudiced, he may still petition for a change of venue. He must set forth in his petition specific allegations to support his charge of prejudice, and the petition will be granted only in the sound discretion of the trial court. Yaw v. Beeghly (1982), 109 Ill. App.3d 627, 440 N.E.2d 1066.

In the present case, Dayan contends he had an automatic and absolute right to a change of venue because his motion was timely filed before the judge ruled on any matters contained in McDonald's petition for declaratory judgment. McDonald's replies that the present dispute is merely a continuation of the same equitable proceedings which have ensued for the past several years concerning the MLA and its supplements. McDonald's contends that since the same judge from which a change of venue is sought has made substantive rulings in the earlier proceedings, the denial of Dayan's motion to change venue was proper.

We agree with McDonald's and find that In re Marriage of Kozloff (1984), 101 Ill.2d 526, 463 N.E.2d 719, offers a persuasive analogy to the present case. There, in affirming the denial of a change of venue petition, our supreme court rejected the proposition that a petition to modify a dissolution of marriage decree constitutes a new action. Rather, the court held that post-decree petitions are merely continuations of the dissolution proceeding, and a substantive ruling on one petition will preclude a change of venue as of right on another. The court stated:

"* * * This court has long condemned a litigant's attempt to seek a change of venue after he has formed an opinion, based upon the court's adverse rulings, that the judge may be unfavorably disposed towards his cause. [Citations.] * * * Obviously, such maneuvering is anathematical to the efficient use of judicial resources. [Citations.] Accordingly, we hold that post-decree petitions do not constitute new actions, but merely continuations of the dissolution proceeding, and a substantive ruling on one petition will preclude a change of venue as of right on another. * * *.

It follows that a judge's substantive ruling during the dissolution proceeding will preclude a change of venue as of right on a post-decree petition before that same ...


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