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11/24/87 Chicago Food Management, v. the City of Chicago Et Al.

November 24, 1987





516 N.E.2d 880, 163 Ill. App. 3d 638, 114 Ill. Dec. 725 1987.IL.1740

Appeal from the Circuit Court of Cook County; the Hon. George A. Higgins, Judge, presiding.


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


Plaintiff, Chicago Food Management , brought suit seeking a declaration that contracts it entered into with former Chicago Police Superintendent Richard Brzeczek, on behalf of the Chicago police department (the department), and the Chicago Policemen's Benevolent and Welfare Association are valid and enforceable. These contracts gave CFM the exclusive right to provide food vending machines to department facilities. CFM also sought an injunction preventing the city from removing CFM's vending machines. The city appeals from the granting of summary judgment in favor of CFM, raising the following issues: (1) whether the trial court erred in failing to enforce the termination provision in the contract between CFM and the department; (2) whether the trial court erred in holding that a contract entered into by the police superintendent on behalf of the city is valid and enforceable although not in compliance with statutory requirements; and (3) whether the trial court erred in holding the city estopped from asserting the police superintendent's lack of authority to contract with CFM.

On November 9, 1955, the Chicago city council passed an ordinance authorizing the commissioner of public works to enter into a contract with the PBA which would allow the PBA to install automatic coffee and hot chocolate dispensing machines in department facilities. The ordinance provided that any agreement under which the commissioner granted such rights to the PBA is "subject to termination by either party at any time . . . upon thirty days written notice." This ordinance has not been repealed.

The PBA, in receivership since 1968, is a private, not-for-profit corporation which pays death benefits to the families of its members. Since 1962, when the State of Illinois authorized payment of government death benefits to the beneficiaries of department personnel (Ill. Rev. Stat. 1985, ch. 108 1/2, par. 5-153), the PBA's membership has consisted of police officers who retired from the department before January 1, 1962.

In order to secure the exclusive right to provide vending services to the department, CFM entered into agreements with the PBA and the department. Although the 1955 ordinance provides that the commissioner of public works is authorized to contract with the PBA, the contract between the PBA and CFM purports to grant to CFM "any privilege . . . [PBA has] received from the department to install vending machines in department facilities." The record is unclear why the department, rather than the commissioner of public works, granted such privileges. The PBA contract, entered into in 1979, contains the following provisions:

"1. (a) Upon the express conditions that the PBA continue to receive the Department permission to install vending machines at Department locations during the term hereof and that the Department approves and continues to permit CFM to operate vending machines and food service at Department locations, for the term of this agreement, the PBA grants to CFM exclusively such privilege as it receives from the Department to install, maintain, service and operate vending machines. . . .

1. (b) The term of this Agreement shall . . . terminate . . . (iii) when the Department ceases to permit operation of vending machine services by CFM.

3. The PBA makes no representation or warranty of any nature that it will continue to receive from the Department the privilege it now has with respect to such vending machines."

CFM also agreed to remove its vending machines from department premises upon termination of its rights under the contract.

The department contract was entered into by former Police Superintendent Richard Brzeczek in April 1983, two days before he retired from his position as superintendent. This agreement required CFM to provide cafeteria services to the department in return for the exclusive right to dispense food and nonalcoholic beverages through vending machine. CFM was also to provide security measures in connection with the vending machine operations.

The department agreement is expressly contingent upon continuation of the agreement between CFM ...

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