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09/30/94 F.H. PRINCE & CO. v. TOWERS FINANCIAL

September 30, 1994

F.H. PRINCE & CO., INC., A CORPORATION, PLAINTIFF-APPELLEE,
v.
TOWERS FINANCIAL CORPORATION, A CORPORATION, DEFENDANT-APPELLANT.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE IRVING R. NORMAN, JUDGE PRESIDING.

Gordon, Murray, McNULTY

The opinion of the court was delivered by: Gordon

JUSTICE GORDON delivered the opinion of the court:

F. H. Prince and Co., Inc. (hereinafter referred to as Prince) filed a complaint against Towers Financial Corporation (hereinafter referred to as Towers) alleging breach of contract. The contractual terms were contained in a settlement agreement, promissory note and guaranty. The trial court struck Towers first affirmative defense and counterclaim and dismissed with prejudice Towers' second affirmative defense. Towers filed an amended verified answer and counterclaim, and Prince moved to dismiss that pleading. At the hearing, Towers sought leave to file a second amended answer and counterclaim. The trial court proceeded to hear argument on the motion to dismiss the first amended answer and counterclaim and granted the motion to dismiss. The court also denied Towers' motion for leave to file its second amended verified affirmative defense and counterclaim. Towers filed a motion to reconsider which was denied, and the case proceeded to jury trial.

At trial, the court directed a verdict on the amount of principal due Prince under the promissory note and guaranty and denied Towers' request to have the jury determine the issue of attorneys' fees and costs. The jury returned a verdict on Prince's claim for interest on the principal; and judgment was entered on February 6, 1991 for Prince in the amount of $767,986.86 representing the principal and interest. On February 25, 1991, Prince filed a petition for attorneys' fees and costs for the period through February 13, 1991, the last day of trial, and amended the petition to include additional fees and costs through April 4, 1991. A second judgment was entered for Prince on April 4, 1991 in the amount of $60,967.39 for attorneys' fees and costs. Also on that date, Towers filed a post-trial motion which was heard and denied on May 8, 1991.

On May 9, 1991 Prince filed a second petition for fees for the period through May 8, 1991. Hearing on this matter was set for May 13, 1991; but on that date, Towers filed a notice of appeal from various orders and judgments entered through May 8, 1991. On May 31, 1991, after submission of briefs and argument, the trial court held that it had jurisdiction to hear Prince's May 9, 1991 petition for fees and costs and, on June 28, 1991, entered judgment in the additional amount of $18,519.56. Towers filed a second notice of appeal from the court's May 31, 1991 order and the June 28, 1991 judgment. By order of this court, the appeals were consolidated.

On appeal, Towers argues that the trial court erred in dismissing its amended affirmative defense and counterclaim and in refusing to permit the jury to determine attorneys' fees and expenses. Towers also argues that the trial court lost jurisdiction to rule on Prince's supplemental petition for fees filed on May 9, 1991 because that petition was not timely filed and because Towers had filed its notice of appeal on the day that petition was scheduled to be heard.

Prince has filed a motion in this court to dismiss Towers' first notice of appeal filed on May 13, 1991. We have taken this motion with the case and must address that issue first. In order to do so, some background is necessary on the basis for the complaint filed by Prince against Towers.

In 1988, Prince settled a lawsuit and bankruptcy claim against United Fire Insurance Company (hereinafter referred to as United Fire), a Towers' subsidiary, for $1.2 million to be paid in installments plus interest. Towers guarantied all payments owed by United Fire to Prince in accordance with the terms of the settlement agreement, promissory note and guaranty. The settlement agreement required the payment of six installments totalling $600,000; and the promissory note required additional quarterly payments totalling $600,000 plus interest. Thereafter, United Fire paid Prince the first three installments totalling $350,000; and Towers paid the remaining $250,000 under the settlement agreement. No payments were made in accordance with the terms of the promissory note, and Prince instituted the instant action.

Paragraph 5 of the settlement agreement provided in relevant part:

"If at any time or times hereafter Prince proceeds with a lawsuit or takes any other action to enforce this Settlement Agreement, then UFIC [United Fire] and Towers agree to pay on demand all reasonable costs, fees and expenses incurred by Prince in any manner or way with respect to the foregoing. Such costs, fees and expenses include but are not limited to: (i) attorneys' fees, costs and expenses; * * * (iii) court costs and expenses; (iv) court reporter fees, costs and expenses; (v) long distance telephone charges; (vi) telegram or telecopy charges; (vii) expenses for travel * * *." (Emphasis added.)

Paragraph 7 of the guaranty provided in relevant part:

"If at any time or times hereafter Prince: (a) employs counsel for advice or other representation, (i) to represent Prince in any litigation * * * relating to this Guaranty * * * and/or (ii) to enforce any rights of Prince against Guarantor * * * and/or (b) attempts to or enforces any of Prince's rights or remedies against Guarantor or UFIC, the reasonable costs, fees and expenses incurred by Prince in any manner or way with respect to the foregoing shall be part of the Guarantor's Liabilities, payable by Guarantor to Prince, on demand. Without limiting the generality of the foregoing, such costs, fees and expenses include: (i) attorneys' fees, costs and expenses; * * * (iii) court costs and expenses; (iv) court reporter fees, costs and expenses; (v) long distance telephone charges; (vi) telegram or telecopy charges; * * *." (Emphasis added.)

The promissory note, executed simultaneously with the settlement agreement and guaranty, incorporated by reference all the terms of the agreement and guaranty and repeated the language quoted above relating to Prince's rights and remedies against Towers and United Fire.

Prince's complaint alleged that Towers had breached the terms of the settlement agreement, promissory note and guaranty and sought the entry of judgment against Towers in the amount of $600,000 plus interest, at the rate defined in the promissory note, attorneys' fees and costs. As stated above, Prince prevailed on the merits of its complaint and obtained judgments for the principal and interest and for certain attorneys' fees and costs.

The dates that are relevant to the issue of jurisdiction are as follows:

2/6/91 - Judgment entered for Prince in the amount of $767,986.86 (principal and interest)

2/25/91 - Prince files petition for fees and costs (initially fees and costs incurred through trial; amended to ...


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