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07/28/87 Katherine Mccorkle Et Al., v. Tyler Reporting Company Et

July 28, 1987

KATHERINE MCCORKLE ET AL., PLAINTIFFS-APPELLANTS

v.

TYLER REPORTING COMPANY ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SECOND DIVISION

512 N.E.2d 25, 159 Ill. App. 3d 62, 111 Ill. Dec. 121 1987.IL.1073

Appeal from the Circuit Court of Cook County; the Hon. Anthony J. Scotillo, Judge, presiding.

APPELLATE Judges:

PRESIDING JUSTICE SCARIANO delivered the opinion of the court. STAMOS and BILANDIC, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE SCARIANO

On December 20, 1983, plaintiffs Katherine McCorkle and Charles McCorkle, Jr., filed a four-count complaint against defendants, Tyler Reporting Company (Tyler), Joseph Bertrand, Jason R. Bertrand, and MBC Reporting Company. In their complaint plaintiffs sought 60% of the net profits of Tyler, alleging that Charles McCorkle, Jr. (McCorkle), and Joseph Bertrand (Bertrand) entered into a partnership agreement to create Tyler and that Bertrand breached that agreement. On April 15, 1986, following a bench trial, the Honorable Anthony J. Scotillo entered judgment in favor of defendants, from which order the plaintiffs appeal. Nevertheless, the trial court entered judgment in favor of plaintiffs on count V of their amended complaint for reimbursement of expenses incurred by plaintiffs in organizing the corporation in the amount of $773.79. Neither party appeals from that portion of the trial court's order. MBC Reporting Company never began operations and is not a party to this appeal.

Bertrand was the alderman of the 7th Ward of the city of Chicago until May 31, 1983, but when the wards of the city were remapped following the 1980 census, Bertrand's residence was located in the 5th Ward. He ran for election as alderman of that ward in the primary of 1983 and lost. In May and June of 1983, Bertrand discussed his employment prospects with Tim O'Hara (O'Hara) of the city of Chicago's corporation counsel's office. Bertrand had known O'Hara for 15 to 20 years and took up with him a number of different employment opportunities, including the possibility of entering the court reporting business.

After speaking with Bertrand, O'Hara arranged a luncheon meeting for him and McCorkle, who at that time was operating the largest court reporting concern in Chicago, and whom O'Hara had known for approximately 15 years. At this meeting, McCorkle told Bertrand that he knew many people who had tried to get into the court reporting business; that it was a very tricky, treacherous enterprise upon which to embark; that there were problems with court reporters and clients; and that it was difficult to finance such a business. McCorkle contended that court reporting for labor unions and utility companies, whose business Bertrand was desirous of obtaining, was not considered to be particularly lucrative. McCorkle testified that at this initial meeting with Bertrand he did not discuss court reporting for the courtrooms in which building code violations were heard because he believed such work to be the "best plum" in Chicago (i.e., the easiest and most profitable to manage).

At trial, the parties agreed as to the events which took place between them up to and including this meeting, but they disagreed about the relationship they had afterward. Bertrand testified that during the spring and summer of 1983 he had general conversations with a number of people, besides McCorkle, with regard to entering the business of court reporting, and that during that time period he believed he had 5 to 10 meetings with McCorkle. McCorkle did not testify as to the number of times he met with Bertrand.

According to Bertrand, he decided in the latter part of June of 1983 to enter into a court reporting venture, and discussed his decision with McCorkle. At the outset, Bertrand told McCorkle that minority enterprises would be receiving and would have more opportunity to participate in city business and that he planned to obtain some of it. Bertrand testified that he sought McCorkle's assistance because he thought he should hire somebody who was proficient in court reporting to manage the business. His belief was allegedly based on McCorkle's statements that it would be too difficult for Bertrand to operate the entity by himself.

Bertrand testified that he explained to McCorkle that he was organizing a family enterprise, with his son as president and sole shareholder, and that they would pay an outside consultant to manage the business. It was Bertrand's understanding, given his explanation to McCorkle and McCorkle's continuing thereafter to be involved in establishing Tyler, that McCorkle had agreed to be such a consultant to the operation. Bertrand testified that when he tried to determine the amount of McCorkle's counseling fees, McCorkle would not discuss the subject, but responded only that they would resolve the issue later. Nevertheless, Bertrand asserted that he told McCorkle that he expected him to operate the entity as a consultant.

McCorkle's version of their conversations varies greatly from that of Bertrand. He testified that approximately one week after their first meeting he telephoned Bertrand and they agreed upon another luncheon meeting. At this meeting McCorkle suggested a relationship with Bertrand whereby Bertrand would use his connections to obtain clients and McCorkle would manage the business. Specifically, McCorkle envisioned an arrangement similar to that which he previously had with one Al Gorski (Gorski). McCorkle told Bertrand that he and Gorski had a partnership agreement wherein Gorski utilized his contacts in City Hall to obtain court reporting work, while McCorkle provided the court reporting services and operated the organization on a day-to-day basis. McCorkle testified that he suggested that he and Bertrand could have the same type of relationship.

After lunch the two men returned to McCorkle's office and discussed his proposal in greater detail. McCorkle explained that generally 60% to 65% of gross receipts were allocated to pay court reporters' salaries and the remainder was gross profit, which was then divided 45% to McCorkle, 45% to Gorski, and 10% to cover all other expenses. McCorkle stated that this 10% figure had proved to be inadequate to cover overhead and other expenses, so he proposed that he and Bertrand divide the gross profits 40% each, with the remaining 20% to be used for expenses. Any unused portion of the 20% would belong to McCorkle.

According to McCorkle, Bertrand objected to the 40-40-20 split. He also testified that he told Bertrand that there were many other opportunities for lucrative work, including the probate and divorce courts. He contended that he met Bertrand for lunch the next day, at which time Bertrand again objected to McCorkle's proposed division of the profits. McCorkle testified that he reiterated that he would not negotiate ...


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