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07/16/87 Domenic Grisanzio, v. John L. Bilka Et Al.

July 16, 1987

DOMENIC GRISANZIO, PLAINTIFF-APPELLANT

v.

JOHN L. BILKA ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

511 N.E.2d 762, 158 Ill. App. 3d 821, 110 Ill. Dec. 585 1987.IL.994

Appeal from the Circuit Court of Winnebago County; the Hon. Alford R. Penniman, Judge, presiding.

APPELLATE Judges:

JUSTICE INGLIS delivered the opinion of the court. NASH, J., concurs. JUSTICE DUNN, Dissenting.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE INGLIS

Domenic Grisanzio, plaintiff, appeals an order of the trial court granting defendants' motion to dismiss count I of his complaint which alleged a violation of section 3.20 of the Business Corporation Act of 1983 (Ill. Rev. Stat. 1985, ch. 32, par. 3.20). We affirm.

On March 14, 1984, plaintiff entered into preincorporation contracts with John L. and Elayne F. Bilka (defendants) which included a four-year written consulting agreement to provide assistance in matters relating to food preparation services, menus, sale and service of alcoholic beverages, special parties, and other services to First Edition, Inc. (corporation), and its employees. Consideration for these services was to be $100,000 paid in 48 equal monthly installments of $2,083.33, less any amounts paid to plaintiff pursuant to the terms of a reimbursement agreement. The consulting agreement and reimbursement agreement (contracts) were executed by John L. Bilka, as president, and Elayne F. Bilka, as secretary of the corporation. The corporation was not incorporated until March 16, 1984.

Plaintiff provided services pursuant to the contracts until October 14, 1985, when the corporation terminated its operations. Pursuant to the contracts, plaintiff was owed $30,951.75. On October 4, 1985, plaintiff filed a complaint (first suit) for breach of contract against the corporation. On December 2, 1985, a default judgment was entered against the corporation for $30,951.75.

On March 26, 1986, plaintiff filed a complaint (second suit) for breach of the contract against defendants. Count I alleged that the execution of the contracts prior to the formation of the corporation was an unauthorized assumption of corporate powers by defendants in violation of section 3.20 of the Business Corporation Act of 1983 (Ill. Rev. Stat. 1985, ch. 32, par. 3.20). We note that section 3.20 of the Business Corporation Act of 1983 (Ill. Rev. Stat. 1985, ch. 32, par. 3.20) became effective on July 1, 1984, replacing an identical provision in the Business Corporation Act of 1933 (Ill. Rev. Stat. 1983, ch. 32, par. 157.150).

Defendants filed a motion to dismiss count I of plaintiff's complaint on the basis of election of remedies. The trial court granted defendants' motion applying the doctrine of collateral estoppel. This appeal followed.

The sole issue raised is whether the trial court correctly dismissed plaintiff's complaint (second suit) against officers of the corporation to recover on the contracts where the plaintiff had previously obtained a judgment on the contracts against the corporation.

Defendants maintain that the trial court's ruling bars plaintiff from proceeding under a separate theory against individual officers who may, in addition to the corporation, be liable on the contracts. The thrust of the defendants' position is that because the cause of action asserted by the plaintiff (breach of employment contract) has already been fully adjudicated, he is now barred from attempting to reassert that cause of action in a second suit.

Plaintiff agrees that the doctrine of collateral estoppel or estoppel by judgment applies to this case, but argues that it supports plaintiff's claim and does not act as a bar. Plaintiff points out that his first suit was against the corporation for breach of contract, whereas the instant action is against individual officers of the corporation for violating a provision of the Business Corporation Act of 1983 (Ill. Rev. Stat. 1985, ch. 32, par. 3.20).

As we have noted in the facts, section 3.20 of the Business Corporation Act of 1983 was not effective until July 1, 1984. Therefore, we assume plaintiff meant to base his claim on an identical provision found in section 150 of the Business ...


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