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Trapkus v. Edstrom's





Appeal from the Circuit Court of Rock Island County; the Hon. John M. Telleen, Judge, presiding.


The plaintiff, Bruce Trapkus, appeals from an order of the circuit court of Rock Island County denying his request for recision of various contracts.

The facts are as follows. On August 1, 1981, plaintiff entered into two written contracts with Edstrom's, Inc., defendant corporation. Under the terms of the first contract, plaintiff agreed to purchase 144 shares of stock (46%) from defendant corporation for $500 per share ($70,000). Plaintiff was to purchase 50 shares then, and 20 shares each August 1 thereafter until all 144 shares were purchased. The second written contract was a buy/sell agreement which provided, in part, if plaintiff were terminated, the company would buy back his stock at book value. At this same time, it was agreed that plaintiff would be employed by the corporation and would receive a salary, in most respects, equal to that of Clem Georlett, Edstrom's president and only other shareholder. It was further agreed they would divide corporate profits, although the method of division is in dispute. During the next 12 months Edstrom's, Inc. sustained a loss, and there were no profits to divide. During the second 12 months, August 1, 1982, through July 31, 1983, Edstrom's realized a profit.

On August 1, 1983, plaintiff, expecting a share of the then-ended fiscal year profits, was instead issued a shareholder's loan in the amount of $10,000. He was then asked to deposit the $10,000 into the company account in order to honor his stock purchase installment. Plaintiff, at that time, requested the corporate records to determine his exact share of the profits but was denied access. On August 15, plaintiff was not issued a paycheck, and on August 22 was relieved of all managerial responsibilities and ordered to begin menial tasks.

On August 23, plaintiff served notice of termination of employment and thereafter filed suit, which, after amendments, requested recision of all agreements between himself and defendant corporation. Defendant corporation counterclaimed for all monies advanced to plaintiff and enforcement of the buy/sell agreement.

The trial court awarded plaintiff wages for August but found no grounds to rescind the written agreements and entered judgment on the counterclaim and awarded damages. The plaintiff assigns four errors:

I. The court erred in finding there was no profit division agreement between the parties,

II. The court erred in finding that plaintiff chose to voluntarily terminate his employment,

III. The court erred in finding plaintiff not entitled to recision of the agreements at issue, and

IV. The court erred in its computation of book value.

• 1 Plaintiff first argues that there were judicial admissions made by defendant corporation that the parties had a valid profit division agreement and that the admissions were made, firstly, in defendant's discovery deposition and, secondly, in trial testimony. The deposition of Georlett which had previously been taken in connection with this case indicated he and plaintiff had agreed to equally divide profits each year up to $30,000. Georlett further testified in his deposition that $30,000 was agreed upon because such amount would allow plaintiff enough money from his one-half share to pay $10,000 for his stock purchase and $5,000 as income tax on the profit division.

Discovery depositions may be used as provided for in Supreme Court Rule 212(a) (87 Ill.2d R. 212(a)) for the purpose of impeaching the testimony of the deponent or as an admission made by a party. However, judicial admissions must be distinguished from ordinary evidentiary admissions. Judicial admissions are binding upon the party making them; they may not be controverted. (Rosbottom v. Hensley (1965), 61 Ill. App.2d 198, 209 N.E.2d 655.) Ordinary evidentiary admissions, on the other hand, may be controverted (Ayers v. Metcalf (1866), 39 Ill. 307), or explained. With respect to testimony by a party at a deposition, Supreme Court Rule 201(j) (87 Ill.2d R. 201(j)), stating disclosure of matter obtained by discovery is not conclusive but may be contradicted, is controlling. See Deel v. U.S. Steel Corp. (1969), 105 Ill. App.2d 170, 245 N.E.2d 109, and Golden v. Big Bear Foods, Inc. (1968), 102 Ill. App.2d 237, 243 N.E.2d 730, where testimony of a party at a deposition is treated only as an evidentiary admission.

Plaintiff also argues Georlett made a judicial admission in court. At trial, plaintiff called Georlett as an adverse witness, and relevant ...

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