Before discussing this issue, it is important to note a few facts. The 1985 loan agreement, demand note, and security agreement gave the Bank a security interest in all of Delcon's assets, including its inventory and accounts receivable. (See Delcon Group, Inc. v. Northern Trust Corp. (1987), 159 Ill. App. 3d 275, 277-78, 512 N.E.2d 378, 380.) As this court stated in its opinion reversing the trial court's order granting Delcon's request for a preliminary injunction:
APPELLATE COURT OF ILLINOIS, SECOND DISTRICT
543 N.E.2d 595, 187 Ill. App. 3d 635, 135 Ill. Dec. 212 1989.IL.1317
Appeal from the Circuit Court of Du Page County; the Hon. John W. Darrah, Judge, presiding.
JUSTICE LINDBERG delivered the opinion of the court. DUNN and McLAREN JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LINDBERG
Defendants, Northern Trust Bank/Naperville (the Bank); the Bank's parent, Northern Trust Corporation (the Corporation); and a former loan officer of the Bank, James V. Zaring, appeal from judgments entered on six verdicts in favor of plaintiffs Jon C. Ginder, chief executive officer and sole shareholder of the corporate plaintiffs; and Delcon Group, Inc., and its subsidiaries Delcon, Inc., Kane Environmental Systems, Inc. (Kane), Midwest Delta Contractors, Inc., and Delcon Realty and Development, Inc. (referred to collectively as Delcon). The verdict on count I (fraud) was against all three defendants and awarded plaintiffs $400,000 actual and $500,000 punitive damages. The verdicts on counts II through VI were only against the Bank and the Corporation and awarded $300,000 actual damages for count II (breach of oral contract); $50,000 actual damages for count III (breach of oral contract); $50,000 actual and $200,000 punitive damages for count IV (intentional interference with contractual relations); $200,000 actual and $500,000 punitive damages for count V (intentional interference with prospective economic advantage); and $200,000 actual damages for count VI (breach of written contract). These were the causes of action alleged in the complaint, and our analysis of this case is, of course, restricted to these causes of action.
The court notes at the outset that the briefs of the parties contained statements of facts which egregiously violated Supreme Court Rule 341(e)(6) (113 Ill. 2d Rules 341(e)(6), (f)). These statements of facts contained Conclusions, argument, and extensive commentary on the facts. (See 113 Ill. 2d R. 341(e)(6).) Because such matters were not in the record, there was, and could be, no citation to the record for the commentary, argument, and Conclusions. (See 113 Ill. 2d R. 341(e)(6).) Pursuant to this court's order during oral argument, the parties after oral argument submitted revised statements of facts edited to eliminate the improper material. The court expresses its gratitude to the parties for their prompt compliance with its order and for the excellent revised statements of facts. The revised statements of facts were most helpful aids to the court in understanding and in locating the relevant portions of the lengthy record in this complex case.
Defendants raise seven issues on appeal. They contend that the trial court erred in refusing (1) "to direct a verdict and to grant judgment NOV" for defendants on counts II and III "because, as a matter of law, the Bank did not orally agree to lend additional money to Delcon"; (2) "to instruct the jury that, before an oral contract can exist, there must be a meeting of the minds as to definite and certain contract terms"; (3) "to direct a verdict and to grant judgment NOV" for defendants on count I "because, as a matter of law, the Bank did not fraudulently misrepresent that it would lend additional money to Delcon"; (4) "to direct a verdict and to grant judgment NOV" for defendants on count IV "because, as a matter of law, the Bank did not intentionally interfere with Delcon's contractual relations when it refused to lend more money to Delcon"; (5) "to direct a verdict and to grant judgment NOV" for defendants on count VI because, as a matter of law, the Bank did not breach the written 1985 loan agreement when it refused to make further advances; (6) "to direct a verdict and to grant judgment NOV" for defendants on count V "because, as a matter of law, the Bank was justified in mailing direct collection notices to parties it reasonably believed to be Delcon's account debtors"; and (7) "to set aside the verdict [ sic ] because the damages awarded in this case were duplicative, improper as a matter of law, and grossly excessive." Our resolution of the other five issues makes it unnecessary to consider issues (2) and (7). We reverse the judgment of the trial court and enter judgment in favor of defendants on all six counts of the complaint.
The facts necessary to resolution of the issues will be noted when the issues are discussed. A brief overview of the facts will, however, be useful at this point. See Delcon Group, Inc. v. Northern Trust Corp. (1987), 159 Ill. App. 3d 275, 276-79, 512 N.E.2d 378, 379-81 (stating the facts of this case relevant to an interlocutory appeal of an order granting a preliminary injunction).
On November 13, 1985, Delcon and the Bank entered into a lending agreement under which the Bank agreed to make a line of credit loan of up to 80%, but no more than $300,000, of Delcon's eligible accounts receivable as evidenced in borrowing base certificates provided to the Bank by Delcon; and a term loan of up to 80%, but no more than $50,000, of the purchase price of machinery and equipment. Among the lending agreement's terms were requirements that Delcon "maintain a working capital ratio of 1.5 to 1; on a consolidated basis" and "maintain a debt-to-equity rate of 3 to 1; on a consolidated basis." The lending agreement also called for the execution of a promissory note and security agreement. Pursuant to these terms of the lending agreement, a master demand note and a security agreement were executed by Delcon on December 11, 1985. Under the terms of these instruments, the Bank obtained a security interest in the inventory, accounts receivable, and all other assets of Delcon. Under the security agreement, "default" included the failure to pay any liability when due or demanded and the insolvency of Delcon.
In February of 1986 the Bank made another loan to Delcon. This was for $310,000 for the purchase of a building to be used by Delcon as its headquarters. At the closing, the parties executed a mortgage, an adjustable rate mortgage loan agreement, and a collateral assignment of leases and rents.
In the spring of 1986, the parties had several Discussions about the Bank's extending an additional $500,000 line of credit to finance Kane's summer asbestos removal projects. The parties disagree over whether they orally contracted for the Bank to make this loan, but agree that the Bank never loaned Delcon any money under this line of credit. The parties also disagree over whether they orally contracted in early June for the Bank to lend Delcon $120,000 for equipment financing, but agree that the Bank never loaned Delcon any money pursuant to this alleged oral contract.
By early June of 1986, Kane was the successful bidder on contracts with six school districts for removal of asbestos that summer. However, in addition to refusing to make the $500,000 line of credit and the $120,000 equipment financing loans, the Bank, based on a borrowing base certificate for May 30, 1986, that it received in the first half of June, refused to lend Delcon any more money under the line of credit in the 1985 loan agreement.
Delcon borrowed $400,000 from Harrison Construction Company at a very high rate of interest so that Kane could perform the asbestos removal contracts with the six school districts. The Bank, to enable Delcon to obtain this loan, agreed that its security interest in the accounts receivable from these six projects would be subordinated to the security interest of the Harrison Construction Company.
In August of 1986 Delcon both stopped making payments to the Bank and was insolvent. On October 1 the Bank declared Delcon in default and accelerated the loan. On October 8 plaintiffs filed this suit. On October 27 the Bank sent collection notice letters to at least 18 individuals or entities, most but not all of whom were current account debtors of Delcon.
The trial court, on motion of plaintiffs, granted a preliminary injunction enjoining the Bank "from collecting the $235,000 due under the master demand note executed by Delcon and from collecting the accounts receivable which secured the note." (Delcon Group, Inc. v. Northern Trust Corp. (1987), 159 Ill. App. 3d 275, 278, 512 N.E.2d 378, 380.) On appeal of the order granting the preliminary injunction, this court reversed and remanded for further proceedings. (Delcon Group, Inc. v. Northern Trust Corp. (1987), 159 Ill. App. 3d 275, 280, 512 N.E.2d 378, 382.) The cause proceeded to a trial on the merits of plaintiffs' complaint, and the instant appeal is from the final judgment entered on the jury's verdicts following that trial.
In the first, third, fourth, fifth, and sixth issues, defendants contend that the trial court erred in not granting judgments n.o.v. and directed verdicts in their favor on all counts of the complaint. Our supreme court has said:
"In Pedrick [ v. Peoria & Eastern R.R. Co. (1967), 37 Ill. 2d 494, 229 N.E.2d 504] this court announced the standard to be used in determining when a trial court should enter either a directed verdict or a judgment notwithstanding the verdict. It was said: 'In our judgment verdicts ought to be directed and judgments n.o.v. entered only in those cases in which all the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors movant that no contrary verdict based on that evidence could ever stand.' (37 Ill. 2d 494, 510[, 229 N.E.2d 504, 513-14]; see also Mundt v. Ragnar Benson, Inc. [(1975)], 61 Ill. 2d 151, 156-57[, 335 N.E.2d 10, 14].)
. . . The standards relating to the direction of verdicts and to the granting of new trials are of course different. In Pedrick this court declared: 'We have rather carefully preserved the distinction between the evidentiary situation which will require a new trial [citation], and that justifying direction of a verdict or judgment n.o.v. There is, in our judgment, excellent reason for so differentiating to be found in the radically different results of allowance of the two motions, and we believe a more nearly conclusive evidentiary situation ought to be required before a verdict is directed than is necessary to justify a new trial.' (Pedrick v. Peoria & Eastern R.R. Co. [(1967)], 37 Ill. 2d 494, 509-10[, 229 N.E.2d 504, 513].) On a motion for a new trial a court will weigh the evidence and set aside the verdict and order a new trial if the verdict is contrary to the manifest weight of the evidence. [Citations.]" (Mizowek v. De Franco (1976), 64 Ill. 2d 303, 309-10, 356 N.E.2d 32, 35-36.)
(See also Jardine v. Rubloff (1978), 73 Ill. 2d 31, 36-37, 382 N.E.2d 232, 234.) In the case at bar, defendants have only contended that the trial court erred in failing to enter judgments n.o.v. and to direct verdicts, and not for a new trial, so they may prevail only if the evidence so overwhelmingly favored them that no contrary verdicts based on that evidence could ever stand.
The first issue raised by defendants concerns whether they were entitled to judgments on counts II and III because, as a matter of law, plaintiffs failed to prove the existence of the oral contracts allegedly breached by defendants. Count II alleged a contract to increase Delcon's line of credit by $500,000, and count III alleged a contract to loan Delcon $120,000 to purchase equipment.
In Champaign National Bank v. Landers Seed Co. (1988), 165 Ill. App. 3d 1090, 519 N.E.2d 957, the court said:
"The terms of a contract must be reasonably certain. Some terms may be missing or left to be agreed upon, but if the essential term or terms are so uncertain that there is no basis for deciding whether the agreement has been kept or broken, there is no contract. Restatement (Second) of Contracts § 33 (1981).
An agreement to continue to refinance or roll over a debt appears similar to an oral contract to lend money in the future. A valid cause of action for breach of an oral contract to lend money in the future is recognized in Illinois. (Wait v. Midwest Bank/Danville (1986), 142 Ill. App. 3d 703, 707, 491 N.E.2d 795, 800; Bank of Lincolnwood v. Comdisco, Inc. (1982), 111 Ill. App. 3d 822, 444 N.E.2d 657.) The party claiming such a contract must show that the alleged agreement contains sufficient definitiveness to be enforceable. (Wait, 142 Ill. App. 3d at 708, 491 N.E.2d at 801; Carrico v. Delp (1986), 141 Ill. App. 3d 684, 688, 490 N.E.2d 972, 975.) In Wait and Carrico our court cited McErlean v. Union National Bank (1980), 90 Ill. App. 3d 1141, 414 N.E.2d 128, where it was held an agreement to loan money in the future was enforceable only if it contemplated the terms upon which the future loan should be made. The McErlean court stated:
'These terms would include, for example, the intended duration of the line of credit; the applicable rate of interest to be charged for any loan emanating from such an agreement, or the basis for how such interest would be ascertained; what duration or date or dates were contemplated for maturity of such loans; and what mode or rate of repayment was contemplated, i.e., whether the entire amount would be repayable or if repayment in installments would be acceptable.' 90 Ill. App. 3d at 1146, 414 N.E.2d at 132." (Champaign National Bank v. Landers Seed Co. (1988), 165 Ill. App. 3d 1090, 1093-94, 519 N.E.2d 957, 959-60.)
Moreover, one of the elements essential to the formation of a contract is a manifestation of agreement or mutual assent by the parties to its terms, and the failure of the parties to agree upon or even discuss an essential term of a contract may indicate that the mutual assent required to make or modify a contract is lacking. Allen v. Amber Manor Apartments Partnership (1981), 95 Ill. App. 3d 541, 549, 420 N.E.2d 440, 446.
Plaintiffs contend that prior to the end of May of 1986 there was "an agreement to extend an additional $500,000 line of credit under the same essential terms and conditions as an already established $350,000 line of credit" (count II) and that "as with the $500,000 line of credit, [the $120,000 loan] was based upon the same terms and conditions as the existing line of credit agreement" (count III). Among the terms and conditions of the 1985 loan agreement were the following:
"Borrowers will maintain a working capital ratio of 1.5 to 1; on a ...