The opinion of the court was delivered by: MILTON I. SHADUR
After it had characterized that issue as one of first impression on its docket, the Supreme Court responded flatly "We do not agree with plaintiff's contention" (id.). It then went on to explain (id.):
In this case the issue of fact that is directly tendered by Spraying Systems' Complaint and is denied by Smart Company's Answer is the question whether the oral agreement that was reached by Smart and Bramsen back in 1967 did or did not include a provision for Smart to continue to receive commissions after the termination of his sales representative relationship with Spraying Systems. Thus this action centers around, and its result will be controlled by, what was or was not agreed upon in the key conversation between Smart and Bramsen.
Then after Paragraphs 4 and 5 had described certain terms that the oral agreement did contain according to Spraying Systems, each affidavit went on to say:
Spraying Systems urges that it is not offering any proof of what Bramsen said to Smart or what Smart said to Bramsen. But because the oral agreement was indeed entered into between those two individuals (perhaps the one matter in this case on which there is no dispute), the only purpose and effect of the just-quoted statements by Spraying Systems' surviving personnel is to demonstrate that the two-party Smart-Bramsen conversation did not contain a discussion about post-termination commissions. Spraying Systems essays its own proof of that negative by inference, and it tries to compel Smart to parry that inference with both arms tied behind his back because of the prohibition contained in the Act.
To put the matter simply, if the triers of fact were to credit the witnesses that Spraying Systems has offered to testify about the terms of the oral agreement on which it has based its Complaint for declaratory judgment, by definition those factfinders would be deciding that the only human beings who were parties to that oral agreement--Bramsen and Smart--had not discussed and arrived at an understanding about post-termination commissions. By having thus put that factual question into issue, Spraying Systems must be viewed as having waived Smart's disability under the Act to testify directly about the issue.
Neither side has identified any Illinois case on all fours with this one--hardly a surprise, given the context in which this action arises--but the principle that has just been stated here is entirely consistent with the one case on which both litigants relied (and that is surprising) during the course of briefing Spraying Systems' motion for summary judgment:
Schuppenhauer v. Peoples Gas Light & Coke Co., 30 Ill.App.3d 607, 332 N.E.2d 583 (1st Dist. 1975). In the portion of Schuppenhauer relevant to this case ( id. at 612, 332 N.E.2d at 589) the court said of the Act:
Nor is that a recent refinement of the judicial view of the Act's purpose--see also such earlier Illinois Supreme Court cases as Van Meter v. Goldfarb, 317 Ill. 620, 623, 148 N.E. 391, 392 (1925) and Blanchard v. Blanchard, 191 Ill. 450, 454-55, 61 N.E. 481, 482 (1901).
In sum, this Court concludes that its earlier ruling, in which it foreclosed Smart from testifying based on the Act's blockage, did not accurately reflect the combined force of (1) Illinois case law as to the burden of proof in this declaratory judgment action coupled with (2) Illinois case law that limits the application of the Act (even though it would be literally called into play by its own terms) where such singular unfairness would be the result. Instead this Court holds that Spraying Systems has waived its right to invoke the Act, so that Smart may indeed testify as to his 1967 conversation with Bramsen.
In light of that new and sharply different perspective on the competency of Smart himself to testify in this action, the current motions in limine have become considerably easier to resolve. Each of the litigants seeks to bar testimony that its adversary would proffer, in each instance proposed to be presented by other sales representatives who also date back to the time that Bramsen was still living. For its part Spraying Systems wants to block the testimony of two representatives who say that they too reached precisely the same type of oral agreement with Bramsen that Smart claims to have negotiated as to post-termination commissions, while Smart Company wants to prevent a half dozen other representatives from testifying that they themselves had no such express agreement with Bramsen.
Given that testimony, Smart Company is entitled to bring before the factfinders the fact that Spraying Systems has now entered into written contracts providing for post-termination commissions and that Spraying Systems "believed it was part of the agreement, as we understood it."
Next Smart Company asks that Spraying Systems not be permitted to introduce at trial evidence on a number of subjects:
a. The amount of commissions paid to defendant prior to termination from 1978 through 1988;
b. Summaries reflecting the yearly amount of commissions paid to defendant with an analysis reflecting whether the amount of commissions for a particular year reflects an increase or decrease from the prior year;
c. Comparisons between defendant and other Spraying Systems sales representatives regarding the amount of commissions paid for the months of January, February and March, 1988;
d. Defendant's post-termination representation of another spray nozzle manufacturer;
e. Plaintiff's payment of commissions to the successor representative for the same reorders for which defendant claims a commission.
None of the arguments advanced by Spraying Systems to support its position carries any persuasion that such evidence is probative on the dispute in this case--the existence or nonexistence of an oral agreement in 1967 under which Smart Company would continue to be entitled to post-termination commissions on sales to pre-termination customers. Because Smart Company's claim is based on what it urges was an express agreement that contained no restrictive covenant, all the cases cited by Smart Company ( Stein v. Malden Mills, Inc., 9 Ill.App.3d 266, 270-71, 292 N.E.2d 52, 57 (1st Dist. 1972), Scheduling Corp. of America v. Massello, 151 Ill.App.3d 565, 571, 503 N.E.2d 806, 811, 104 Ill. Dec. 944 (1st Dist. 1987) and Publishers Resource, Inc. v. Walker-Davis Publications, Inc., 762 F.2d 557, 560 (7th Cir. 1985)) support its position as to the lack of relevance of the matters that Spraying Systems wants to delve into.
Finally, spraying Systems seeks to urge that Smart company's cashing of commission checks from spraying Systems--including one that was sent with an April 14, 1989 letter describing "Spraying Systems policy" as to the period for which commissions were payable and stating "Therefore, this is your final commission payment"--evidences a waiver of the claim that Smart company now advances in this lawsuit. That simply is not a fair reading of the communications between the parties that resulted in the breach of their long-standing relationship. At that time Spraying Systems wanted to enter into the new written form of agreement referred to earlier, while Smart Company wanted to continue under the existing oral agreement. When they reached impasse on that score, Spraying Systems wrote Smart Company that it was going to select a new sales representative for the territory. Smart Company promptly responded with a November 15, 1988 letter that said in part:
From the above, it can only be concluded that Spraying Systems Company has unilaterally terminated my contract. Of course, I reserve all the rights of W.G. Smart Co., Inc. and myself which result from the unilateral termination by Spraying Systems Company.
That of course is the antithesis of waiver, and there is nothing to suggest that any subsequent events (including the cashing of the small commission checks that Spraying Systems then sent to Smart Company, the last payment being accompanied by the already-quoted April 1989 letter) reflected a change in Smart Company's position. On that issue as well, Spraying Systems' position is unsound.
Because this opinion has changed the ground rules for this action so dramatically by reconsidering this Court's earlier ruling under the Act, it makes sense to hold an early status conference to discuss whether anything other than the scheduling of the case for trial is now called for. Accordingly a status hearing is set for 9 a.m. March 2, 1993.
Milton I. Shadur
Senior United States District Judge
Date: February 22, 1993