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Ruggio v. Ditkowsky

OPINION FILED SEPTEMBER 26, 1986.

S. FRANK RUGGIO, PLAINTIFF-APPELLEE,

v.

BURTON DITKOWSKY, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Du Page County; the Hon. William E. Black, Judge, presiding.

JUSTICE STROUSE DELIVERED THE OPINION OF THE COURT:

Plaintiff, S. Frank Ruggio, brought this action for common law contribution to compel defendant, Burton Ditkowsky, as joint obligor, to contribute his share of two notes paid by plaintiff. Following a bench trial, the trial court entered judgment for plaintiff.

Both plaintiff and defendant had known and done business with Louis Patras, who was the owner of the William Tell Restaurant. Plaintiff owns an insurance brokerage, S. Frank Ruggio and Sons, Inc., which sold fire and casualty insurance to the restaurant and automobile insurance to Patras, individually. Society Linen Supply, Inc., of which defendant was the principal owner, rented linen supplies to the restaurant. Plaintiff and defendant had, at various times, loaned money to or cosigned notes with Patras to assist the restaurant or Patras, individually.

In September 1980 Patras' wife, Potoula, requested that plaintiff take over the operation and management of the restaurant during Patras' hospitalization. During the 32 days that plaintiff managed the restaurant, handling collections, payables, and deposits, the restaurant was in a chaotic condition with the payroll not met, the employees ready to leave, the purveyors unpaid, and working capital lacking. During this time defendant acted as cooperator of the business and was there daily. Defendant knew more about the business than the plaintiff and was consulted frequently. Defendant also advised plaintiff whom to pay and whom not to pay. Defendant received daily reports on the restaurant's financial status.

During this period and until January 1, 1981, three bank accounts were used for the restaurant's funds. In September all monies went through the special account of plaintiff's insurance agency until November 1980. All transactions of that account were recorded, photocopied, audited by the restaurant's bookkeeper and admitted into evidence. In October 1980 a separate restaurant account was opened solely for restaurant funds. There were four signatories on that account: plaintiff, Patoula, Patras and John Vayette, who was subsequently hired as the restaurant's operating manager. The third account was used for the proceeds of the two notes at issue.

In December 1980 the restaurant needed working capital for the upcoming holiday season. Plaintiff and defendant cosigned the two notes at issue to the First National Bank of Hinsdale (the bank), dated December 16 and December 22, 1980, for the amounts of $20,000 and $10,000, respectively. The proceeds were deposited in the William Tell escrow account at the bank. Plaintiff, Potoula, and Vayette were also signatories on that account. Defendant, although impeached by his deposition, testified that the proceeds of the loan were to be used to repay money owed to Society Linen Supply, Inc. Defendant admitted signing both notes and that he was obligated to pay half of the amount due on the notes if not paid by the restaurant.

Although plaintiff was still connected to the restaurant with the authority to authorize payment of its bills until January 1981, he ceased active management November 1, 1980. Plaintiff did not always review invoices or actions taken on behalf of the restaurant after November 1, 1980, when Vayette was managing the restaurant. Blank checks were left for Vayette to see that bills were properly paid.

Neither defendant nor Patras ever asked for an accounting from plaintiff to determine how proceeds received by the restaurant were paid out. Checks written from the separate account with the proceeds of the loans required two of the three signatures. At the end of plaintiff's involvement, the accounts were audited and reconciled by the restaurant's accountant and found to be $1,800 short, and not $18,000 short, as Patras testified. Those figures did not include overhead costs to plaintiff for his office management. Any monies paid with restaurant funds which were not restaurant expenses out of the S. Frank Ruggio account were reviewed and reconciled by the restaurant's accountant.

During trial, defendant stated that the restaurant owed his company $20,000, rather than the $9,689.88 paid. But, his deposition testimony indicated that his company was owed only about $9,500.

Around June 1980, before plaintiff and defendant cosigned the notes in issue and before plaintiff took over the temporary management of the restaurant, plaintiff cosigned one of a series of separate and distinct notes for loans to Patras. A 1978 or 1979 450 SL Mercedes Benz was to be collateral for the loans. No title was produced so Patras gave plaintiff title to a 1979 6.9 Mercedes. Plaintiff testified that Patras signed over the title so the car could be sold and proceeds applied to the note cosigned by plaintiff and Patras. Patras testified that he gave plaintiff the title upon plaintiff's representation that the car was needed as collateral for an additional loan to pay the restaurant's sales taxes and for the notes in issue cosigned by plaintiff and defendant. The obligations fell upon plaintiff, who sold the 6.9 Mercedes in mid-1981 for $28,000, using the proceeds to pay debts.

When the notes in issue were not paid, plaintiff approached defendant about payment. Defendant testified at trial that he told plaintiff the notes had been paid with money from the restaurant and the automobile plaintiff took from Patras, although his deposition stated that when plaintiff approached him, defendant was going to do absolutely nothing about payment. Defendant also testified that he knew plaintiff had paid off the loan.

While plaintiff was presenting his rebuttal, defendant's attorney, Michael K. Fawell, was suspended from the practice of law. Four months later, defendant's substitute counsel, Edward Ward, advised the trial court that his client was willing to proceed with trial rather than accept the retrial the court offered. After trial resumed with new counsel, defendant attempted to introduce into evidence documents purporting to show that the restaurant's escrow account was closed as of January 26, 1981, after $11,549.85 was charged to the account "per E.L." The trial court sustained plaintiff's objections to a lack of foundation, but allowed the proofs to remain open for two weeks giving defendant an opportunity to prove the foundation. No documents or affidavits were admitted during the allotted time. The court heard closing arguments from both sides. The trial court, in a letter opinion, stated that the reviewed documents, although not admitted, would not change the court's opinion.

On September 16, 1985, defendant filed a motion for a mistrial on the basis that new counsel was placed at a disadvantage in that he could not adequately respond to questions relating to evidence and facts prior to new counsel's representation. On September 19, 1985, the trial court entered judgment for plaintiff. The trial court denied defendant's motion for a mistrial after a hearing was held on October 1, 1985. On October 17, 1985, defendant filed a motion for reconsideration largely based on his previous motion for a mistrial. The motion was thereafter denied, and defendant filed this timely notice of appeal.

• 1, 2 The main question before us is whether the trial court's judgment is supported by the manifest weight of the evidence. When a trial court renders judgment in a bench trial it will not be disturbed on appeal unless it is contrary to the manifest weight of the evidence. (Schoenberger v. Chicago Transit Authority (1980), 84 Ill. App.3d 1132, 1136.) For a judgment to be found to be against the manifest weight of the evidence, the appellant must present evidence that is so strong and convincing as to overcome completely the evidence, and presumptions, if any, existing in the appellee's favor. (84 Ill. App.3d 1132, 1136.) A reviewing court may not reverse a judgment merely because different conclusions could be drawn ...


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