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09/30/88 John Panno, v. Joseph Nicolau

September 30, 1988





529 N.E.2d 95, 174 Ill. App. 3d 890, 124 Ill. Dec. 378 1988.IL.1497

Appeal from the Circuit Court of Livingston County; the Hon. Charles H. Frank, Judge, presiding.


JUSTICE KNECHT delivered the opinion of the court. McCULLOUGH and SPITZ, JJ., concur.


On June 29, 1987, plaintiff John J. Panno filed an amended complaint against defendant Joseph Nicolau claiming damages caused by breach of an oral personal-service contract. The complaint also requested the trial court to either declare the contract rescinded or recognize that the parties had reached a mutual rescission. After a bench trial, the circuit court of Livingston County found defendant liable for damages to plaintiff in the amount of $2,900 plus costs. Defendant appeals and we affirm.

In June of 1985, defendant telephoned plaintiff and offered to procure for him an Audi 5000 automobile direct from West Germany at a substantial discount. Defendant indicated he had provided such a service for people in the past and was currently dealing with plaintiff's uncle. Defendant offered to set up the transaction by taking care of the necessary phone calls and paperwork. Plaintiff stated he was interested in purchasing an automobile with defendant's help.

In September of the same year, after several phone conversations with defendant, plaintiff made a final decision to order an Audi. At defendant's instruction, plaintiff sent a check payable to defendant in the amount of $650. Plaintiff understood the money would "get the ball rolling" and represented a deposit on the automobile. The check's notation reads: "deposit-Audi."

On October 28, 1985, plaintiff received an invoice from Ernst Islinger Motors (Islinger), a West German Audi, Porsche, and Volkswagen dealership, confirming plaintiff's order for an Audi 5000 S automobile with specific options. The invoice read: "The confirmation of your order is only valid after receipt of DM 6.000,00 deposit." Defendant told plaintiff to issue a cashier's check to Islinger in the amount of $6,000. Defendant forwarded the check to West Germany.

Plaintiff testified he had not heard of Islinger until the invoice arrived. Defendant never mentioned where the car was coming from, although plaintiff admitted he understood the purchase price was figured in deutsche marks. Although the ultimate price depended on the value of the dollar, plaintiff anticipated the car would cost him around $17,500. According to plaintiff, defendant, at their initial conversation, assured plaintiff his money would be refunded if any problems arose in obtaining the car.

Defendant testified he instructed plaintiff from the outset that the car would come from a bona fide Audi-Porsche-Volkswagen dealer in Mannheim, West Germany, known as Ernst Islinger Motors. Defendant said Islinger, not plaintiff, compensated him $650 for his services. Defendant admitted he told plaintiff a refund of the $6,000 was "possible" if the deal went sour.

After receipt of the automobile was much delayed, plaintiff contacted defendant and asked if it was possible to cancel the order for the Audi. Plaintiff indicated he would cancel only if he was sure to get a full refund. Defendant said: "No problem, I can get you back the money within . . . three to four weeks." Plaintiff then told defendant to keep the $650 as compensation for his trouble. Plaintiff testified he would not have cancelled the contract if he had known a refund was not forthcoming.

Defendant testified he advised plaintiff to cancel the contract because of the delay and, because of the decreased value of the dollar, plaintiff would have had to pay $5,000 more for the car than he had anticipated. Neither counsel asked defendant if he had guaranteed plaintiff a refund, but defendant indicated after he cancelled plaintiff's order he requested Islinger refund plaintiff his $6,000. Defendant testified he received a check in deutsche marks made payable to himself for approximately $3,200. Defendant then issued plaintiff a personal check for $3,100. Defendant said he has repeatedly attempted to obtain from Islinger the balance due plaintiff, but has been unsuccessful.

Plaintiff's initial complaint alleged defendant, an agent of Islinger, had refused to refund plaintiff's money after having failed to procure an automobile as promised. On April 3, 1987, a default judgment was entered against defendant. On May 15, 1987, defendant moved to vacate the default on the grounds that an agent for a disclosed principal cannot be liable ...

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