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Bill Marek's the Competitive Edge, Inc. v. Mickelson Group

March 17, 2004

BILL MAREK'S THE COMPETITIVE EDGE, INC., PLAINTIFF-APPELLEE,
v.
MICKELSON GROUP, INC., DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Du Page County. No. 00-L-446 Honorable Patrick J. Leston, Judge, Presiding.

The opinion of the court was delivered by: Justice Byrne

PUBLISHED

Union Underwear Company, Inc.(Union), which is not a party to this appeal, purportedly owed plaintiff, Bill Marek's The Competitive Edge, Inc., unpaid sales commissions but mistakenly paid them to defendant, Mickelson Group, Inc. Plaintiff made numerous demands upon defendant for the immediate transfer of the funds to plaintiff, the funds totaling $65,008.99, and defendant refused. Thereafter, plaintiff filed a two-count complaint against defendant based on the claims of conversion and constructive trust. The trial court granted plaintiff's motion for summary judgment on the conversion count for $65,008.99, plus interest. Defendant contends on appeal that the trial court (1) erred in granting summary judgment for plaintiff on the conversion claim; (2) abused its discretion by imposing discovery sanctions against defendant; (3) abused its discretion by failing to strike plaintiff's supporting affidavits; and (4) erred in denying defendant's motions to dismiss for lack of jurisdiction and for failure to join Union as a necessary party. We affirm.

The following facts are taken from the complaint as well as the supporting documents and affidavits. On January 6, 1997, plaintiff entered into a sales representative agreement with Union. Plaintiff remained a sales representative for Union until its contract was terminated by letter on May 5, 1999. The original sales agreement between plaintiff and Union and the notice of termination letter provided that plaintiff was to receive commission payments on orders taken, submitted, and shipped within six months after the effective date of the termination, i.e. from the effective date of May 5, 1999, through December 5, 1999.

Defendant became Union's successor sales representative after the relationship between plaintiff and Union ended. Due to an administrative error, Union sent plaintiff's commission payments, totaling $65,008.99, to defendant.

On November 24, 1999, Union and plaintiff discovered that plaintiff's earned commissions were mistakenly sent to defendant. Union acknowledged in writing to plaintiff that it sent plaintiff's commission payments to the wrong agency and documented the nature of the error in two reports, dated December 21 and December 22, 1999. The reports, which were referenced in a spread sheet as group "Exhibit E," were attached to plaintiff's complaint. Exhibit E was later attached to plaintiff's motion for summary judgment.

Plaintiff then verbally demanded that defendant transfer the funds to plaintiff. Defendant failed to transfer the funds as demanded. Defendant admitted that it is the successor sales representative for Union; that it received copies of the Union reports dated December 21 and 22, 1999, which documented the nature of the error in payment; and that plaintiff made numerous verbal demands for the transfer of the funds identified in the complaint.

On December 29, 1999, Union filed for bankruptcy. Plaintiff received a creditor's notice. On April 11, 2000, plaintiff prepared a claim for bankruptcy court that sought, inter alia, unpaid commissions from Union.

Thereafter, on May 4, 2000, plaintiff filed the instant complaint to collect its unpaid commissions that Union mistakenly paid to defendant. In count I, the conversion count, plaintiff alleged that defendant had no claim or right to plaintiff's sales commissions and defendant wrongfully assumed control, dominion, and ownership over these funds. Plaintiff alleged that the orders identified in Exhibit E were taken by plaintiff and submitted to Union for approval on or before June 5, 1999, and the products identified in Exhibit E were shipped on or before December 5, 1999. Plaintiff further alleged that there were no deductions taken against plaintiff's account and the commissions identified in Exhibit E are plaintiff's property. Plaintiff alleged that defendant was paid the sum of $65,008.99, which represents the total commissions that were and are due and owing to plaintiff. Plaintiff further alleged that defendant did not take, submit, or ship any of the orders identified in Exhibit E.

On June 14, 2000, defendant filed its answer and affirmative defenses to count I. On August 2, 2000, plaintiff filed a motion to dismiss defendant's affirmative defenses. Thereafter, defendant filed a motion to amend its answer and affirmative defenses. The trial court granted defendant's motion and ordered that the case be continued for a case management conference on October 23, 2000.

On October 23, 2000, the trial court granted defendant's motion for an extension of time. The trial court also ordered that written discovery be completed by December 22, 2000, that oral discovery be completed by March 23, 2001, and that the cause be heard for a pretrial conference on April 6, 2001. Defendant filed its first amended answer and one affirmative defense.

Defendant's affirmative defense stated that the prior sales agreement between Union and plaintiff provided that commissions could not and would not be paid on bulk projections but, rather, on purchase orders identified by purchase order numbers that had been issued by the customer and on products shipped to the customer. Plaintiff denied the affirmative defense.

Plaintiff issued interrogatories, including Supreme Court Rules 213(f) and (g) interrogatories (177 Ill. 2d Rs. 213(f), (g)), on December 19, 2000. Defendant did not issue any interrogatories to plaintiff. Although the record does not contain a corresponding notice of written discovery, defendant did propound a Supreme Court Rule 214 (166 Ill. 2d R. 214) notice to produce to plaintiff, and plaintiff provided responsive documents to defendant.

On February 22, 2001, defendant answered plaintiff's Rules 213(f) and (g) interrogatories. Interrogatory number one called for the names and addresses of all witnesses who would testify at trial and requested the identification of the subject or subjects of the testimony of each witness. Defendant did not identify any subject matter. Interrogatory number two asked for the identification of the name and address of each opinion witnesses who would testify at trial and asked that the subject matter, the conclusions and opinions, and the qualifications of each such witness be identified. Defendant answered: "None, investigation continues." Interrogatory number six asked for the identification of each and every person who defendant believed was of the opinion that defendant properly received or was entitled to retain the commissions. Defendant stated, "Tim Kenney, address unknown, investigation continues." Timothy Kenney is an affiant for plaintiff and the author of Exhibit E.

On April 13, 2001, the trial court heard the matter for a case management conference. The trial court closed discovery as of August 3, and set a pretrial hearing for August 10, 2001. At the pretrial hearing, the trial court closed discovery and ordered that the case be heard for trial on January 7, 2002.

Thereafter, the parties agreed to present the conversion count to the trial court on cross-motions for summary judgment. Accordingly, on December 28, 2001, plaintiff filed an agreed motion for hearing on partial summary judgment. The motion stated that the parties were prepared to file their motions for summary judgment instanter. The trial court granted the motion and ordered the parties to file their cross-motions for summary judgment by January 4, 2002, and to respond to the cross-motions by January 30, 2002. The trial court ...


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