Appeal from the Circuit Court of the 18th Judicial Circuit, Dupage County, Illinois. No. 95--L--54. Honorable Edward Duncan, Judge, Presiding.
Released for Publication December 5, 1997.
Present - Honorable Tom M. Lytton, Presiding Justice, Honorable Peg Breslin, Justice, Honorable John F. Michela, Justice. Justice Breslin delivered the opinion of the court. Lytton, P.j., and Michela, J., concur.
The opinion of the court was delivered by: Breslin
Justice BRESLIN delivered the opinion of the court:
In this action for breach of a contract for the purchase of machinery we are asked to determine whether plaintiff P.R.S. International, Inc.'s (PRS) failure to respond to defendant, Shred Pax Corporation's (Shred Pax) request to admit facts, properly resulted in judicial admissions which barred PRS's claims. The trial court ruled that the failure to respond to Shred Pax's request to admit caused the facts to be deemed admitted. The court subsequently granted Shred Pax's motion for summary judgment finding that the admissions precluded PRS's action and that the evidence also demonstrated that it had repudiated the agreement. The court then awarded Shred Pax $39,296.25 on its counterclaim against PRS for breach of contract. On appeal, PRS contends that the court erred when it awarded Shred Pax summary judgment (3--97--0227) and resulting damages (3--97--0666). Although we hold that the trial court properly denied PRS leave to serve its response to Shred Pax, we hold that the trial court could not consider disputed ultimate facts and legal conclusions included in the request to admit and that summary judgment was inappropriate. Accordingly, we reverse and remand 3--97--0227 and 3--97--0666.
In April 1990, PRS contracted with Shred Pax to purchase a pyrolysis machine, shredding machines, and equipment related to their operation. The pyrolysis machine was to transform tires, which had been shredded by the shredding machines, into carbon black, a substance used when reinforcing tires as well as in paint, printing ink, carbon paper and electric resistors. Shred Pax was to deliver "one pyrolysis system, including shredders" and related equipment and install it at a site in Plymouth, Florida, approximately 8-10 months after the contract was entered. PRS contends that the date of delivery was approximately February 18, 1991. The total contract price was $898,200. Following a down payment of $269,460, PRS was to make seven monthly payments of $78,592.50. A payment of $39,296.25 would follow in the eighth month and "$39,296.25 net 30 after approval of [the] shredding system." All the payments were made except for the final payment of $39,296.25.
In entering the contract for the machinery, PRS intended to create an operation to process a minimum of 5,000 rubber tires a day into oil and carbon black. Unfortunately, although the shredding components and other equipment were delivered two months after the contract was entered, PRS never received the pyrolysis machine from Shed Pax. Its operation, which was eventually located in South Beloit, Illinois, rather than Florida, failed in 1993. PRS claims that the operation's demise was a direct result of Shred Pax's failure to deliver the pyrolysis machine, which was an integral component to the business of reducing rubber tires to oil and carbon black.
In November 1991, three PRS representatives went to Shred Pax's plant in Wood Dale, Illinois, to discuss matters related to the pyrolysis machine with Shred Pax's president. They claimed that the machine was not visible, except for a few parts, and that the president of Shred Pax refused to disclose who was manufacturing the machine. PRS claimed that this was part of a fraudulent course of conduct by Shred Pax, which PRS claimed had never built the machine.
During that period in time, PRS initiated discussions regarding the potential sale of the pyrolysis machine. In correspondence, PRS stated that Shred Pax was in a superior position to sell the machine since it was in the business of selling such products and could easily communicate with the desired market. By 1993, all cooperation, if any ever existed, ended. Eventually in a letter demonstrating his personal frustration with the affair, PRS's attorney, and at that time the principal shareholder, wrote a letter to Shred Pax informing it that the "best avenue" was for Shred Pax to sell the machine and that it was his "desire to be completely disassociated with anything to do with tire shredding or burning."
In 1995, PRS filed suit claiming, among other things, that Shred Pax breached the contract when it failed to deliver the pyrolysis system in 1991. Shred Pax denied the material allegations of the complaint and stated that the system was not delivered because PRS repudiated and breached the contract. Early in the discovery process Shred Pax submitted a set of interrogatories and requests to admit to PRS. PRS did not reply to the requests within the statutory period of 28 days. Its response to the interrogatories were delivered four months after they were submitted. When the request to admit facts remained unanswered for 10 months, Shred Pax filed a motion to have the requested facts deemed admitted. PRS still had not filed a response after 15 months when the court ruled on Shred Pax's motion. The court denied PRS leave to serve its response and stated that absent good cause, Supreme Court Rules 216 and 183 mandated that the facts be admitted. Since the court found that no good explanation was given for the delay, it denied PRS leave and ordered the facts be admitted.
Included in the request to admit were requests to admit the genuineness of documents, as well as the following relevant statements:
"6. Shred Pax delivered to PRS the shredding system and other equipment required by the contract other than the pyrolysis system.
7. PRS accepted, approved, and used the shredding system and other equipment delivered by Shred Pax.
8. PRS failed to pay Shred Pax $898,200.
9. Prior to February, 1991, PRS ceased doing business at the Florida location***.
13. PRS never obtained all of the permits required by applicable federal, state, and municipal law for delivery, installation, or operation of the pyrolysis system at any location in the United States.
17. PRS never requested that Shred Pax deliver the pyrolysis system to PRS at a particular ...