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Batson v. The Oak Tree, Ltd.

Court of Appeals of Illinois, First District, First Division

December 2, 2013

PHYLLIS BATSON, Plaintiff-Appellee,
THE OAK TREE, LIMITED, Defendant-Appellant (Hale Demar, and The Oak Tree Restaurant, Limited, Defendants).

Appeal from the Circuit Court of Cook County. No. 10 L 10997 Honorable James P. Flannery, Judge Presiding.

JUSTICE DELORT delivered the judgment of the court, with opinion. Presiding Justice Connors and Justice Hoffman concurred in the judgment and opinion.



¶ 1 Plaintiff Phyllis Batson filed a complaint against defendants The Oak Tree, Limited (Oak Tree), The Oak Tree Restaurant, Limited, and Hale Demar, alleging, inter alia, breach of contract and retaliatory discharge. A jury eventually awarded plaintiff $150, 000 in damages on her breach of contract claim, and $50, 000 on her retaliatory discharge claim. On appeal, Oak Tree[1] contends that the trial court erred in: (1) holding that the collateral source rule prohibited defendants from asserting the affirmative defense of judicial estoppel; (2) denying its motion for a new trial or judgment n.o.v. because there was insufficient evidence of a breach of contract; and (3) barring defendant from offering evidence of plaintiff's failure to mitigate damages when it later instructed the jury that it was defendants' burden to prove mitigation. For the following reasons, we affirm.


¶ 3 On September 27, 2010, plaintiff filed a seven-count complaint against defendants. Plaintiff alleged breach of contract against Oak Tree and Demar (counts I and II, respectively), tortious interference with contract against Demar (count III), retaliatory discharge against Oak Tree and Demar (counts IV and V, respectively). Finally, plaintiff sought punitive damages against Oak Tree and Demar in her sixth and seventh "counts, " respectively. Pursuant to a subsequent stipulation, the case proceeded to trial solely on counts I, III, and IV, and the punitive damages claim against Oak Tree was not repleaded as a separate count.

¶ 4 Plaintiff alleged that she began working at Oak Tree in 1985 and rose to the position of manager. In 1995, she moved to Michigan, but returned to Waukegan, Illinois, in January 1996. At that time, Hale Demar, the controlling shareholder of Oak Tree, asked her to return as manager of the restaurant. Demar offered to pay her $1, 250 biweekly and, pursuant to a deferred compensation agreement, to contribute $20, 000 annually to a trust account for plaintiff's benefit for the duration of the eight-year contract. In late 1997, both parties executed the contract.

¶ 5 Plaintiff's complaint then alleged that, in 2000, she suffered work-related injuries to her hands. Oak Tree denied that her injuries were work-related, so plaintiff filed a claim for benefits under the Workers' Compensation Act (820 ILCS 305/1 et seq. (West 2012)) (the Act). Plaintiff took a leave of absence in September 2000 due to her injuries, but was cleared to return to work in 2001. When she called to arrange her return on April 15, 2001, another manager at Oak Tree, Sisi Sun, told plaintiff that plaintiff no longer had a job and was not allowed to return to work. Finally, plaintiff alleged that, on February 22, 2001, prior to her termination, Demar closed out the trust account and deposited the balance into his personal account.

¶ 6 On May 25, 2012, defendants filed their answer and affirmative defenses. Their first affirmative defense asserted judicial estoppel. Specifically, defendants argued that plaintiff claimed that she was "totally continuously [sic] and totally disabled since September 9, 2000, " in a prior application for social security disability benefits and another application for supplemental security income, which defendants asserted were quasi-judicial proceedings under Illinois law. Defendants then pointed out that plaintiff's complaint claimed that she had been " 'cleared to return to work at the Restaurant in 2001.' " Noting that plaintiff was successful in the first proceeding (before the Social Security Administration), defendants argued that plaintiff's allegation in this lawsuit that she had been cleared to return to work was inconsistent with allegations she presented to the Social Security Administration. In support of this defense, defendants presented copies of plaintiff's April 2002 application for social security disability income and her January 2004 application for supplemental disability income. The other relevant affirmative defense that defendants asserted related to the mitigation of damages. In two paragraphs, defendants stated that (1) plaintiff had a legal duty to mitigate her damages and (2) she claimed that she had never looked for work or any other source of income to mitigate her damages.

¶ 7 On June 6, 2012, the trial court granted plaintiff's motion in limine, which sought to bar any statement regarding plaintiff's application for social security benefits. The trial court agreed with plaintiff's contention that the collateral source rule precluded Oak Tree's affirmative defense of judicial estoppel. In addition, the parties discussed jury instructions. With no objection from plaintiff, the trial court granted Oak Tree's request to provide Illinois Pattern Jury Instruction, Civil, No. 700.17 (2000) regarding mitigation of damages.

¶ 8 At trial, Demar testified that, at all relevant times, he owned 80% of Oak Tree, and his brother-in-law owned the remaining 20%. Demar agreed that plaintiff had worked at both restaurant locations for over 30 years, and at the time of her workers' compensation claim, she was the "floor manager." According to Demar, plaintiff's responsibilities were to hire, schedule, and oversee the restaurant's employees, "bank" the daily receipts, and help with carryout orders during busy times. Demar acknowledged that Oak Tree's office manager, Sisi Sun, had signed an "Employer's first report of injury or illness" on September 24, 2000. The report indicated that plaintiff reported a bilateral carpel tunnel injury occurring on April 15, 2000, and that the last date plaintiff worked had been September 9, 2000. Demar acknowledged that, in a prior deposition, he stated that he had met with an insurance adjuster, and that Demar did not believe in the "efficacy" of plaintiff's claim because he had "heard too many soft tissue stories." Demar further testified that he found it "hard to imagine carpal tunnel from hostessing or waitressing or carryout, " adding, "A pot of coffee, a cup of coffee, that's it. We're not talking about heavy lifting here."

¶ 9 Demar did not recall ever having a conversation with plaintiff regarding her workers' compensation claim, but agreed with his prior deposition testimony that there was no explanation for plaintiff leaving. When asked whether his understanding was that plaintiff's leaving Oak Tree had nothing to do with her hand injuries, Demar stated that he did not know why she left. Demar further agreed that he never had an issue with plaintiff's job performance.

¶ 10 With respect to the deferred compensation agreement, Demar stated he did not know where the original contract was. Demar agreed that there were two copies of the agreement, and that one of the copies had a different typeface and point size. Both copies, however, contained provisions that (1) defined a discharge for cause as, inter alia, "termination of employment for excessive absenteeism"; (2) vested plaintiff "100%" in the trust funds if she were discharged "not for cause"; and (3) required "continuous employment" by plaintiff for the entire term of the agreement, but excused from the definition of continuous employment "discharge by employer without cause." Finally, both copies had a provision that, if any term were found to be void, the remaining provisions would be binding "with the same effect as though the void parts were deleted."

ΒΆ 11 Plaintiff testified that she was 66 years old and began working for Oak Tree in 1983. In 1992, she left Oak Tree for an unrelated hospitalization. In October 1992, she began working at another restaurant known as "Max's." In May 1994, Demar met plaintiff at Max's and asked her to return to Oak Tree. Plaintiff agreed and returned there that same month. On January 1, 1995, plaintiff again left Oak Tree to move to Michigan to work as a nursing assistant in home healthcare. Plaintiff returned to Illinois in August 1996, however, and lived with her daughter in Waukegan. Shortly thereafter, Demar contacted plaintiff and told her ...

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