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01/30/89 Counterdefendant- v. Lynn B. Schultz

January 30, 1989

APPELLATE COURT OF ILLINOIS, THIRD DISTRICT VULCAN METALS PRODUCTS, INC., PLAINTIFF AND COUNTERDEFENDANT-APPELLANT

v.

LYNN B. SCHULTZ, DEFENDANT AND COUNTERPLAINTIFF-APPELLEE



535 N.E.2d 933, 180 Ill. App. 3d 67, 129 Ill. Dec. 168 1989.IL.87

Appeal from the Circuit Court of Peoria County; the Hon. Thomas E. Ebel, Judge, presiding.

APPELLATE Judges:

JUSTICE HEIPLE delivered the opinion of the court. STOUDER, P.J., and WOMBACHER, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE HEIPLE

Vulcan Metal Products, Inc. (Vulcan), filed suit against Lynn Schultz for money due pursuant to a written contract. Various motions were filed, and the trial court entered summary judgment in Vulcan's favor. The judgment was vacated on Schultz' motion and following a bench trial, the court entered judgment in favor of Schultz. Vulcan filed the instant appeal.

Lynn Schultz planned to enter into the replacement window business, and after several meetings with a Vulcan salesman, he ordered equipment and materials worth $6,321.33 from Vulcan. He later signed an agreement with Vulcan in which he unconditionally guaranteed the payment of all indebtedness incurred by his business and all legal expenses incurred in the collection of any indebtedness. Schultz did not pay for the merchandise and Vulcan instituted legal proceedings on February 3, 1986, to collect the amount due. Schultz did not file an answer to the complaint.

Schultz appeared on March 7, 1986, as required by the summons, but he appeared without counsel. Although Schultz was apparently given additional time to file an answer to the complaint, he failed to do so, and on May 1, Vulcan filed a motion for default judgment, summary judgment, or judgment on the pleadings. At the June 10, 1986, hearing on the motion, Schultz again appeared pro se. Vulcan's motion was denied and Schultz was given an additional 30 days to file an answer.

On June 12, 1986, Vulcan served Schultz with a request to admit certain facts pursuant to Supreme Court Rule 216 (107 Ill. 2d R. 216). Therein, Vulcan requested Schultz to admit that an exhibit attached to the complaint was an accurate copy of the guarantee he had signed, that other attached exhibits accurately reflected the invoices and the statement of account of dealings between the parties, and that he owed Vulcan $6,795.15 plus fees and costs according to the terms of the guarantee. Schultz did not respond to the request within 28 days as required in Rule 216. Nor did Schultz file an answer to the complaint within the 30-day period provided by the trial court. Vulcan filed a motion for summary judgment on August 6, 1986, on grounds that Schultz failed to answer the complaint and that the failure to respond to the Rule 216 request admitted the matters of fact set forth in the request.

At the August 6 hearing on Vulcan's motion, Schultz appeared pro se. The trial court entered judgment in favor of Vulcan in the amount of $7,020.15 for the sum due and attorney fees, plus costs of $81.25.

On September 8, 1986, Schultz' newly retained attorneys filed a motion to vacate the judgment. Schultz alleged that he had a meritorious defense and counterclaim and that he was not represented by counsel before September 8. The trial court granted the motion to vacate on October 22 and ordered Schultz to answer the complaint and respond to the request to admit within 14 days.

On November 5, 1986, Schultz filed a response to Vulcan's request to admit and an answer to the complaint. He also filed a counterclaim alleging that the equipment Vulcan sold him was defective and caused him to suffer the loss of expenses incurred in organizing his business. He sought damages in the amount of $7,150.

The cause proceeded to trial and evidence was presented on June 10, 1987, and March 23, 1988. Schultz testified that after he decided to enter into the replacement window business, he spoke on several occasions with Mike Johnson, a Vulcan salesman. According to Schultz, Johnson told him he would need a business name, a place to operate the business, and certain equipment. Schultz testified that based on Johnson's advice, he purchased window-making machinery and equipment for $17,239 and office equipment for $1,309. He also entered into a six-month lease and his rental payments were $325 per month. Johnson ordered the necessary equipment and supplies from Vulcan so Schultz could begin making replacement windows. The equipment and supplies cost $6,321.33. Schultz testified that Johnson told him that after the shipment arrived, someone from Vulcan would fine-tune the machinery and show him how to make a window. Pursuant to Vulcan's request, Schultz signed a document in which he guaranteed payment of all indebtedness incurred by his business and further promised to pay all costs and attorney fees incurred in collecting the debt.

The shipment arrived from Vulcan in January 1985. A Vulcan employee, John Erskine, was sent to help Schultz set up his shop and to demonstrate the window manufacturing process. According to Schultz, Erskine spent three days in his shop, but was never able to manufacture a merchantable window. Erskine told him the equipment would not manufacture a window, Schultz said. Schultz further stated that the Vulcan salesman, Johnson, later replaced the flag bar, the piece of equipment which was apparently defective, but they were still unable to construct a window.

Schultz testified that after Erskine's unsuccessful demonstration session, he made repeated requests for help, but further assistance from Vulcan never arrived and he was never able to manufacture windows. Schultz admitted he had not paid for the merchandise he received from Vulcan. Schultz stated that Vulcan agreed to accept return of the merchandise, but indicated that it would not accept open ...


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