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08/19/88 Robert E. Greenwald, v. Spring Hill Ford

August 19, 1988

ROBERT E. GREENWALD, PLAINTIFF-APPELLANT

v.

SPRING HILL FORD, INC., ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION

527 N.E.2d 1095, 173 Ill. App. 3d 857, 123 Ill. Dec. 457 1988.IL.1285

Appeal from the Circuit Court of Cook County; the Hon. George M. Marovich, Judge, presiding.

APPELLATE Judges:

JUSTICE MURRAY delivered the opinion of the court. SULLIVAN and PINCHAM, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MURRAY

Plaintiff, Robert E. Greenwald, sued defendants, Spring Hill Ford, Inc. (Spring Hill), and Randall Kalin, seeking an accounting and the imposition of a constructive trust on Spring Hill. Kalin is plaintiff's son-in-law and the sole shareholder in the dealership. The dispute revolves around the question of whether $30,000 given to Kalin by plaintiff was a loan or for the purchase of a one-third interest in Spring Hill. Plaintiff filed this appeal after the trial court granted defendants' motion for judgment at the close of plaintiff's case.

In July 1984, plaintiff filed a three-count complaint requesting an accounting and the imposition of a constructive trust (counts I and II). These counts were stricken and the cause proceeded on count III, in which plaintiff sought to impose a constructive trust on defendants on the basis of an alleged breach by Kalin of a purported agreement to give plaintiff a one-third interest in Spring Hill, and upon its profits. At trial, the following facts were adduced.

In October 1981, Kalin entered into a buy-out agreement with Spring Hill's owner, Joe Reagan. The agreement provided that Kalin immediately pay Reagan $30,000 with the balance to be paid over the next two years. After the initial $30,000 payment, Kalin received a 50% ownership interest in the agency. At this time, the dealership was not making a profit. After Kalin became part owner, his father-in-law (plaintiff) volunteered to help with the used car department since he had worked in that field for 37 years. Kalin subsequently made plaintiff the used car manager at Spring Hill, paying him a $300-per-week salary plus 10% of the used car profits. Plaintiff was also given the use of a company car and health insurance for himself and his wife.

The parties dispute subsequent events. In April 1982, Kalin had an opportunity to accelerate the buy-out with an immediate payment of another $30,000 to Reagan. Plaintiff testified that he gave Kalin $30,000 in return for a one-third interest in the business. Kalin asserts that the money was merely a loan. All Discussions were oral with no third parties present.

There was further testimony from the parties (Kalin testified as an adverse witness) and plaintiff's wife concerning such things as the providing of free gas for plaintiff's car, a privilege which other department managers also received; insurance for plaintiff and his wife, which was continued after plaintiff left employment with the agency in mid-1984; a car for the use of plaintiff's wife, an expense account for plaintiff; an increase in plaintiff's salary to $525 a week; Kalin's request that plaintiff attend a trial as an owner of Spring Hill, an assertion denied by Kalin; business cards plaintiff had printed designating him as vice-president of the business; and a celebration party held when Kalin became the recorded owner at which plaintiff alleges, and Kalin denies, that Kalin announced they both owned the agency.

The only concrete evidence regarding the transfer of funds was a document handwritten and signed by Kalin stating:

"To Robert Greenwald:

Received this date, 04/29/82, for the purpose of gaining intrest [ sic ] in Spring Hill Ford, ...


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