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10/14/88 R.J.N. Corporation, v. Connelly Food Products

October 14, 1988

R.J.N. CORPORATION, PLAINTIFF-APPELLANT

v.

CONNELLY FOOD PRODUCTS, INC., ET AL., DEFENDANTS-APPELLEES. -- R.J.N. CORPORATION, PLAINTIFF-APPELLANT,

v.

SCHOEP'S ICE CREAM COMPANY, INC., DEFENDANT-APPELLEE



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION

529 N.E.2d 1184, 175 Ill. App. 3d 655, 125 Ill. Dec. 108 1988.IL.1531

Appeal from the Circuit Court of Cook County; the Hon. E. Richardson, Judge, presiding.

APPELLATE Judges:

JUSTICE MURRAY delivered the opinion of the court. LORENZ, P.J., and PINCHAM, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MURRAY

In this consolidated action, plaintiff R.J.N. Corporation appeals from two orders of the circuit court of Cook County granting defendants' motions for summary judgment as to counts I, II, and III of its second amended complaint (appeal No. 86 -- 3233) and counts IV and V of its third amended complaint (appeal No. 87 -- 1797). RJN is a "broker and/or sales representative" of ice cream products. Its second amended complaint alleged breach of oral and written agreements between itself and defendants Connelly Food Products, Inc. , and Connelly Distributors, Inc. , Illinois wholesalers/distributors of ice cream products. Its third amended complaint alleged tortious interference with contractual relations and prospective business advantage by defendant Schoep's Ice Cream Company, Inc. (Schoep's), a manufacturer of ice cream sold to distributors such as CFP. For the reasons set forth below, we affirm in part, reverse in part, and remand the cause for further consideration.

On January 21, 1983, RJN entered into an oral agreement with CFP whereby CFP agreed to make ice cream deliveries to RJN's customers beginning January 24; RJN entered into the agreement with CFP shortly after Jack's Ice Cream Distributors, Inc. (Jack's), an Indiana wholesaler/distributor, had terminated a similar contract it had with RJN. On January 28, RJN and CFP memorialized their agreement by entering into a written contract, itemizing 16 customers which RJN had served insofar as obtaining ice cream orders, for which RJN was to receive 7 1/2% of all net dollar sales. The contract provided that the agreement would "remain in effect for as long as Connelly serves Rich's [RJN's] customers." Deliveries were to commence on February 1 and, subsequently, CFP made deliveries to some of the customers listed in the parties' contract, but it refused to make deliveries to Walt's Food Center (Walt's) in South Holland and Homewood, Illinois, pursuant to directions it received from Schoep's, the manufacturer of the ice cream products to be delivered by CFP and an 80% owner of CFP stock. Schoep's president testified that this action was prompted by threats of an antitrust lawsuit against Schoep's by Jack's after Jack's "heard" that CFP was going to begin delivery of ice cream products to Walt's Food Centers. Specifically, Jack's told Schoep's that it had a contract with RJN, that RJN owed it a lot of money, and that it felt that CFP should not interfere with its business relationship with RJN. Schoep's also stated that it was informed that RJN had serious financial problems. The time of Schoep's communication to CFP is disputed; Schoep's was unable to point to the month of the communication, RJN contends it was prior to January 24, and CFP stated it was on or about February 1, as well as before January 28. Apparently upon learning of CFP's refusal to serve Walt's, RJN informed Walt's that it would have "to go back to Jack's as their supplier."

In May 1983, according to RJN, the RJN-CFP contract was orally modified, i.e., CFP was to provide the billing to the customers and assume the risks attendant thereto. The record discloses, however, that in May 1983 RJN also informed CFP that all ice cream orders received by RJN thereafter would be placed with Jack's, that RJN would stop using CFP as its supplier, and that it would give its business back to Jack's, "therefore canceling out [Connelly's] agreement and reinstating Jack's as his [RJN's] supplier." RJN's president testified that he personally telephoned each of RJN's customers to inform them that their orders would thereafter be filled by Jack's. Notwithstanding the foregoing, CFP continued to make deliveries to some of RJN's customers for which RJN received its 7 1/2% commission, until December 31, 1984, when CFP terminated the parties' contract. This contract is the subject of count I of RJN's second amended complaint; RJN contends that CFP breached the parties' contract in refusing to make deliveries to Walt's and in terminating the contract.

RJN also entered into an oral agreement with CD on September 14, 1983, whereby RJN promised to arrange for the sale of ice cream novelty products made by the Merritt Company to CD and to assist in the resale of such products to retailers in return for a 2 1/2% commission on all CD sales of the Merritt products. Similarly, on April 11, 1984, RJN and CD entered into an oral agreement whereby RJN promised to arrange for the sale of Dole ice cream products made by Merritt to CD in return for a specific commission. The specific provisions of the agreements are disputed by the parties. In addition, the parties disagree with respect to the duration of the agreements; RJN contended they were to remain in effect as long as CD served the account, regardless of RJN's performance of any duties, and CD contended the agreements were terminable at will and accordingly, terminated the agreements on June 30, 1984. RJN further contends that CD never paid it any commissions on the sales of the novelty products which were the subject of the September agreement, whereas CD contends the opposite. With respect to the April agreement, RJN does not dispute that CD paid it commissions on the Dole products sold until July 3, 1984, but argues that it was entitled to commissions after that date. These oral agreements are the subject of counts II and III of RJN's second amended complaint.

On October 22, 1986, the trial court entered summary judgment in favor of CFP and CD as to counts I, II, and III of RJN's second amended complaint, and RJN filed an appeal in this court (No. 86 -- 3233). Thereafter, RJN filed its third amended complaint against Schoep's, which consisted of counts IV (tortious interference with RJN's contractual relations under the RJN-CFP contract) and V (tortious interference with RJN's prospective economic advantage with CFP) based on Schoep's communication to CFP not to make deliveries to Walt's. On May 13, 1987, the trial court granted Schoep's motion for summary judgment on both counts, and RJN appealed (No. 87 -- 1797). Both appeals were then consolidated.

In arguing that the trial court erred in granting defendants summary judgment in its contract action against CFP and CD in appeal No. 86-3233, RJN contends that: (1) neither its written contract with CFP nor oral agreements with CD were terminable at will since they had a definite duration; (2) alternatively, an exception to a terminable-at-will contract applies to the instant case since there was sufficient consideration to support permanent employment under the RJN-CFP contract; (3) assuming that the RJN-CFP contract was terminable at will, a genuine issue existed whether it was entitled to damages for the time period prior to termination of the contract; and (4) CD's answer to its second amended complaint precluded CD from raising the Statute of Frauds (Ill. Rev. Stat. 1985, ch. 59, par. 1 et seq.) as a defense to the enforceability of the parties' oral agreements.

Dispositive of whether the parties' written contract was terminable at will is an interpretation of the clause therein that it "will remain in effect for as long as Connelly serves Rich's customers." RJN argues that this clause, when considered in conjunction with the occurrence of two additional "events" (i.e., "as long as CFP is the sole supplier of SCHOEP'S products" and "as long as Plaintiff is able to maintain the orders for SCHOEP'S products for CFP to fill"), would terminate the contract and thus render it sufficiently definite in duration.

We first observe that the occurrence of the two latter events simply is not set out in the parties' contract. Secondly, RJN did not raise these contentions in the court below. An issue not presented to or considered by a trial court is deemed waived and need not be considered on review, even in an appeal from a summary judgment. Harbor Insurance Co. v. Arthur Andersen & Co. (1986), 149 Ill. App. 3d 235, 500 N.E.2d 707.

We further find, contrary to RJN's argument, that the clause that "this agreement will remain in effect for as long as Connelly serves Rich's customers " (emphasis added) cannot be construed as an "objective event," the occurrence of which terminates the contract thereby making it sufficiently definite in duration (see Peters v. Health and Hospitals Governing Comm'n (1980), 91 Ill. App. 3d 1104, 415 N.E.2d 653, rev'd on other grounds (1981), 88 Ill. 2d 316, 430 N.E.2d 1128). Rather, a practical construction of the clause indicates an indefinite duration of the contract based upon CFP's apparent option/decision to not serve Rich's customers at some point in time. In other words, the contract would remain in effect only as long as CFP served Rich's customers and, therefore, when CFP would decide to no longer serve RJN's customers could not ...


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