APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SECOND DIVISION
527 N.E.2d 943, 173 Ill. App. 3d 653, 123 Ill. Dec. 305 1988.IL.1187
Appeal from the Circuit Court of Cook County; the Hon. Myron T. Gomberg, Judge, presiding.
JUSTICE EGAN delivered the opinion of the court. HARTMAN, P.J., and SCARIANO, J., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE EGAN
This is an appeal from an order granting the defendant's motion for summary judgment in a breach of contract action. The trial court held, as a matter of law, that a purported amendment to a contract lacked consideration.
In 1981, the defendant, Mallick Management, Inc. (Mallick), sold Toppers Restaurant to All That Jazz -- Topper's Restaurant, Inc. (All That Jazz). The plaintiff, Charles Greenberg (Greenberg), at that time owned 10% of the shares of All That Jazz. As part of the sales agreement, All That Jazz purchased all the personalty located inside the restaurant and gave Mallick a chattel mortgage which required All That Jazz to make monthly payments to Mallick.
Mallick, as owner of the realty upon which the restaurant was located, also entered into a lease agreement with All That Jazz which obligated All That Jazz to make monthly rental payments to him.
In early May 1984 Greenberg purchased the remaining shares and became the sole shareholder of All That Jazz. By late May 1984 All That Jazz was several months in arrears on its payments under both the chattel mortgage and the lease. Greenberg then decided to close the restaurant.
Mallick then instituted foreclosure proceedings under the Uniform Commercial Code (Ill. Rev. Stat. 1983, ch. 26, par. 1-101 et seq.) in order to force the sale of the personalty covered by the chattel mortgage. Those proceedings were stayed when All That Jazz filed for bankruptcy.
Greenberg and Mallick entered into an agreement dated June 28, 1984 (First Agreement or June Agreement), which provided that Mallick would pay Greenberg the sum of $5,000 for all the personalty and $20,000 in consideration for Greenberg's promise not to compete with the new lessee for two years. In addition, the agreement contained the following clause:
"5. This Agreement is contingent upon dismissal of Bankruptcy No. 84 B 08081 prior to 11:00 a.m. on June 29, 1984. All sums payable hereunder shall be made at the Conclusion of Agreement with new purchasers. Failure of MALLICK to pay GREENBERG the amounts provided for when due shall subject MALLICK to a penalty of 2% over prime from due date of payment to actual date of payment."
Greenberg was unable to dismiss the bankruptcy action by 11 a.m. on the following day, June 29, 1984, because bankruptcy rules require that there be a prior meeting with creditors and certain creditors objected to the dismissal.
In August 1984 Greenberg and Mallick signed a document titled "Amendment to Agreement Dated June 28, 1984 Between Charles Greenberg and Mallick Management, Inc." (Second Agreement or August Agreement). That Second Agreement read as follows:
"WHEREAS, it has been determined that bankruptcy case No. 84 B 08081 cannot be dismissed until after the first meeting of creditors and upon leave of court;
WHEREAS, both Mallick and Greenberg desire to amend their agreement dated June 28, 1984; IT IS AGREED:
1. The first sentence of Paragraph No. 5 is deleted and is null and void and the following language ...