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04/17/89 Spomenka M. Rybak, v. Donald J. Provenzale

April 17, 1989

SPOMENKA M. RYBAK, PLAINTIFF AND COUNTERDEFENDANT-APPELLANT AND CROSS-APPELLEE

v.

DONALD J. PROVENZALE, DEFENDANT AND COUNTER, PLAINTIFF-APPELLEE AND CROSS-APPELLANT



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

537 N.E.2d 1321, 181 Ill. App. 3d 884, 130 Ill. Dec. 852 1989.IL.535

Appeal from the Circuit Court of Du Page County; the Hon. John S. Teschner, Judge, presiding.

APPELLATE Judges:

PRESIDING JUSTICE UNVERZAGT delivered the opinion of the court. INGLIS and DUNN, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE UNVERZAGT

The plaintiff, Spomenka Rybak, a dentist, filed a four-count amended complaint in the circuit court of Du Page County against the defendant, Donald J. Provenzale, also a dentist, for breach of contract, breach of fiduciary duty, punitive damages, and conversion. Provenzale counterclaimed for breach of contract and fraud.

Following a bench trial, the court entered judgment in favor of Rybak against the defendant in the amount of $6,631.95 and denied the defendant any relief on his counterclaim. Both parties appeal.

Rybak's appeal presents these issues: (1) whether a written agreement between herself and the defendant was enforceable; (2) whether she was entitled to credit for funds held by the defendant under the terms of their oral contract; (3) whether the court's judgment is inconsistent with its findings of fact; and (4) whether compensatory and punitive damages should have been awarded due to the defendant's breach of his fiduciary duties to her. The defendant's cross-appeal presents these additional multipart issues: (5) whether the court's denial of his counterclaim is against the manifest weight of the evidence where (a) exhibit No. 100, a xerographic copy of the alleged written agreement, should not have been admitted, (b) exhibit No. 100 was wholly fraudulent, (c) Rybak's expert's testimony regarding exhibit No. 100 should not have been allowed, (d) the court failed to acknowledge Rybak's lack of credibility, and (e) Rybak breached her associate's agreement with him and intentionally defrauded him; and (6) whether the court's judgment was against the manifest weight of the evidence as to (a) its $5,000 award for legal expenses and (b) its $1,631.95 award for unpaid compensation.

From 1975 to July 6, 1982, Rybak worked as a dentist in defendant's dental office in Downers Grove. Pursuant to an oral agreement which is undisputed by the parties, Rybak received as compensation 50% of the fees received from patients she treated, less laboratory and other expenses attendant to those patients. It was, and is, defendant's position that this remained the parties' agreement until Rybak left the office in July 1982 and relocated her practice. Rybak's contention, however, is that she and Provenzale subsequently orally modified this agreement in late November 1978 and in August 1979 and that the latter modification was memorialized by a written agreement on August 31, 1979. The defendant denies any of these subsequent oral or written modifications occurred or that he ever signed the written agreement identified at trial as plaintiff's exhibit No. 100 (PX100).

PX100 provided that all monies paid against the purchase of a partnership interest over and above $2,000 per month (Rybak's share of the office expenses) would be returned, with interest, to Rybak if she did not purchase a partnership interest in the defendant's practice. Rybak did not purchase a partnership interest in the defendant's practice, and she relocated her practice in July 1982. She contends the defendant retained a total of $54,568.17 over and above the $2,000 per month specified in the agreement. Rybak sought to recover this amount plus interest as provided by the parties' written agreement, or a total of $94,459.14 through January 1, 1988. Rybak also sought to recover $250,000 in punitive damages from the defendant due to his breach of his fiduciary duty to her.

The defendant maintained that he did not sign the August 31, 1979, agreement and that the only agreement which Rybak and he had with respect to her compensation was that she was to be paid 50% of her net collections (fees earned from her treatment of patients minus laboratory fees and other related expenses). The defendant's counterclaim sought to recover at least $32,128.10, which amount the parties stipulated Rybak collected and retained directly from patients treated by her after January 1, 1980, rather than processing the receipts through the defendant's office account. The defendant also sought punitive damages from Rybak in the amount of $250,000.

The trial court found the conduct of the parties showed their original agreement was changed and Rybak's compensation was no longer limited to 50% of the net funds collected from patients treated by her. Although the court believed the defendant signed the agreement (PX100), it found PX100 was not sufficient to establish a contract between the parties and that it was "an agreement to agree to some other arrangement." The court also found, however, that PX100 was "sufficient to modify the original agreement limiting Ms. Rybak's compensation to only 50% of the funds she earned." Accordingly, it awarded Rybak $6,631.95 ($5,000 in lab dispute legal fees for which it found the defendant admitted responsibility, and $1,631.95 representing fees, less expenses, collected by the defendant between June 26 and July 6, 1982, for work done by Rybak). It denied the defendant's counterclaim in its entirety. Neither the court's oral decision nor written judgment specifically mentioned Rybak's claim for punitive damages, but in the course of its oral decision, the court stated: "[Neither] side wins is what the decision is."

The defendant has moved this court pursuant to Supreme Court Rule 362 (107 Ill. 2d R. 362) for leave to amend his countercomplaint to include a third count for conversion. The motion was ordered taken with the case, and we now deny it.

The defendant's motion alleges that the "elucidation of the fact at trial that [Rybak] removed patient charts and ledgers from [his] practice without authorization" formed an integral part of her intentional scheme to wrongfully deprive his practice of fees, services and other assets. Defendant's motion further alleges that, inasmuch as Rybak's actions were "implied in and were necessarily related to the claims set forth in the Countercomplaint," it is necessary to amend the countercomplaint to conform to the evidence and to insure that Justice is done between the parties. He alleges Rybak will not be prejudiced by the amendment since (at the time of the filing of the motion) her first brief had not yet been filed and she was advised of the claim for conversion contained in the amendment by virtue of the proofs and argument at trial.

Rybak filed her objections to this proposed amendment, asserting the amendment is not necessary in that it will not serve to complete the record, will not conform the pleadings to the proof, or correct any error in the pleadings. Further, it would be prejudicial to her in that it attempts to set up a new cause of action of which she had no prior notice and neither opportunity nor reason to controvert at trial. Lastly, the facts in the record do not support the proposed amendment and proof of numerous elements of the new cause of action would be required if the amendment were allowed.

This court has the authority to permit the amendment requested. (See 107 Ill. 2d Rules 362, 366(a)(1); Ill. Rev. Stat. 1987, ch. 110, par. 2-616(c).) However, the record does not support Provenzale's claim of conversion, and additional proof would be required. Provenzale's proposed amendment, in fact, is insufficient to state a cause of action for conversion in that it fails to allege a demand was made upon Rybak for return of the items. A.T. Kearney, Inc. v. INCA International, Inc. (1985), 132 Ill. App. 3d 655, 664.

The lack of proof in the record on the elements of the claim contained in the proposed amendment belies Provenzale's assertion that Rybak had notice of the claim by virtue "of the proofs at trial." Nor did Provenzale's argument at trial put her on such notice where counsel argued Rybak's removal of the records from Provenzale's office was "part and parcel of [his] claim for fraud." Accordingly, we deny Provenzale's motion to amend his countercomplaint.

RYBAK'S APPEAL

The court specifically found Provenzale signed the agreement marked PX100, but it refused to enforce its terms on the basis it was "an agreement to agree to some other arrangement." Rybak contends the agreement is enforceable where the condition precedent to Provenzale's refund of the fees collected from patients treated by her and retained over and above $2,000 per month occurred: that is, she did not purchase a partnership interest in his practice. The defendant contends the court's refusal to enforce PX100 should be affirmed and argues that PX100 cannot be enforced as a binding contract inasmuch as it lacks certain definite terms with respect to the elements of an agreement to purchase part of the practice, such as specification of purchase price and the method of payment or financing of the purchase or terms of interest.

We are unable to reach the merits of this issue for several reasons. First, it is not clear from the record that PX100 actually was admitted in evidence. Second, assuming, arguendo, it was admitted, we cannot locate it amongst the numerous exhibits submitted with this record, and the facsimile provided in Rybak's appendix bears no identification number. Third, also ...


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