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Interim Inv. Corp. v. Palatine Service Corp.

OPINION FILED NOVEMBER 25, 1985.

INTERIM INVESTMENT CORPORATION, PLAINTIFF-APPELLANT,

v.

PALATINE SERVICE CORPORATION ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County; the Hon. James C. Murray, Judge, presiding.

JUSTICE O'CONNOR DELIVERED THE OPINION OF THE COURT:

Rehearing denied January 2, 1986.

Plaintiff, Interim Investment Corporation (Interim) appeals from the order of the circuit court of Cook County granting motions of defendants Palatine Service Corporation (Palatine) and Venture Service Corporation (Venture) to strike Interim's second amended complaint and dismissing the cause with prejudice.

The second amended complaint alleged:

On or about March 7, 1974, Interim entered into a purchase agreement with Thomas B. Rossetter to purchase all of the stock of Oconto Corporation, whose sole asset was 138 acres of vacant real estate in or about Elgin. On or about the same date, Interim entered into a real estate contract with Valley Homes, Inc., to purchase approximately 10 acres of land located in Elgin. Rossetter required Interim to furnish an unconditional guarantee that all of the covenants of the agreement between Interim and Rossetter to be performed by Interim would be performed in the event of Interim's default under the agreement.

On June 25, 1974, Palatine and Venture (Service Corps.) together with Interim entered into an agreement to guarantee in which Palatine and Venture agreed to give Rossetter an unconditional guarantee to perform, in the event of Interim's default, all of the covenants of the agreement to be performed by Interim pertaining to the real estate contracts provided that they (Service Corps.) would not be required to pay more than $1,348,362. Pursuant to the provisions of the agreement to guarantee, Interim paid $86,390 to Palatine and Venture.

Also on June 25, 1974, a guarantee agreement was entered into by and between Palatine, Venture and Rossetter. It was executed by Palatine, Venture, Rossetter and Interim.

On or about the same date, Interim entered into a real estate contract to sell 25 acres of the land which was the subject of the agreement with Rossetter and the real estate contract with Valley Homes.

The second amended complaint also alleged that Interim performed all of its obligations pursuant to the agreement to guarantee and was ready, willing and able to perform its obligations pursuant to the guarantee agreement. Interim defaulted in its contract with Rossetter, but Palatine and Venture refused to perform their guarantee. As a result of their failure to perform Interim sustained monetary damages.

The second amended complaint was essentially identical with an earlier amended complaint which had been dismissed on February 27, 1984, the order stating in part that the court was "of the opinion that plaintiff, not being a party to the Guarantee Agreement, has no rights thereunder and that nothing in the Agreement to Guarantee required defendants to perform the Guarantee Agreement." On June 25, 1984, the second amended complaint was dismissed with prejudice for failure to state a cause of action.

Interim contends that the trial court was in error in finding that "plaintiff, not being a party to the Guarantee Agreement has no rights thereunder" and that "nothing in the Agreement to Guarantee required defendants to perform the Guarantee Agreement." We agree.

The agreement to guarantee provided in pertinent parts:

"1. SERVICE CORPS. do hereby agree that they will give to ROSSETTER an unconditional guarantee to perform all of the covenants of the Agreement required to be performed by INTERIM in the event of INTERIM's default under the Agreement, provided, however, that SERVICE CORPS. shall not be required to pay more than $1,348,362.00 (`Amount Guaranteed').

6. In the event of a default by INTERIM under the Agreement requiring SERVICE CORPS. to perform under their guarantee, then all of INTERIM'S interest in the Agreement and all of INTERIM'S contracts to sell to others will by these presents ...


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