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Johnson v. Safeguard Construction Co., Inc.

Court of Appeals of Illinois, First District, First Division

December 30, 2013

SCOTT JOHNSON, Plaintiff-Appellant,
v.
SAFEGUARD CONSTRUCTION COMPANY, INC., Defendant-Appellee.

Held [*]

In an action arising from plaintiff’s complaint about being denied a substantial commission in his work as a representative of defendant corporation, which was in the business of restoring storm-damaged homes by sending out representatives like plaintiff to meet with homeowners, talk with insurance adjusters, and obtain contracts for restoration work to be done by subcontractors using products meeting the preferences of the homeowners, the trial court properly entered summary judgment for defendant corporation on the count of plaintiff’s complaint alleging that defendant violated the Sales Representative Act, since defendant was not a purveyor of tangible goods, defendant was not a “principal” for purposes of the Act, and the Act did not apply.

Appeal from the Circuit Court of Cook County, No. 11-L-13695; the Review Hon. Raymond W. Mitchell, Judge, presiding.

Law Offices of Richard D. Grossman, of Chicago (Richard D. Grossman, of counsel), for appellant.

Vedder Price P.C., of Chicago (Chad A. Schiefelbein, Joseph K. Mulherin, and Benjamin A. Hartsock, of counsel), for appellee.

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

OPINION

CUNNINGHAM JUSTICE

¶ 1 This appeal arises from the October 31, 2012 order entered by the circuit court of Cook County, which granted summary judgment on count I of a complaint in favor of defendant Safeguard Construction Company, Inc. (Safeguard), and denied summary judgment on count II in favor of plaintiff Scott Johnson (Johnson). Following Johnson's voluntary dismissal of the surviving count of the complaint, the circuit court entered a final order. On appeal, Johnson argues that the circuit court erred in granting summary judgment on count I of the complaint. For the following reasons, we affirm the judgment of the circuit court of Cook County.

¶ 2 BACKGROUND

¶ 3 Safeguard is an Illinois corporation engaged in the business of insurance restoration by facilitating the repair of damaged homes. According to the deposition testimony of Kevin Schultz (Schultz), the owner of Safeguard, Safeguard dispatches independent sales representatives to storm-damaged areas for the purpose of interviewing homeowners about the damage to their homes, interfacing with insurance adjusters, and obtaining contracts from homeowners for the restoration of their damaged homes. Safeguard does not perform the actual repair work, but subcontracts the repair work to third parties, to whom Safeguard relays the homeowners' preferences for the use of specific products and brands of products in the repair process.

¶ 4 On March 15, 2011, Johnson entered into an agreement with Safeguard by which he became Safeguard's independent sales representative "for the sale of Safeguard products and services." Pursuant to paragraph 6(c)(ii) of the agreement, Safeguard agreed to indemnify and hold Johnson harmless against any and all liabilities "arising directly or indirectly from the manufacturing of any Safeguard product or any services provided by Safeguard." Paragraph 4 of the agreement provided that, in consideration for the services performed by Johnson, Safeguard agreed to pay Johnson a percentage of its net profits. Johnson's summarized duties and responsibilities were set forth in a document entitled "Field Representative (Next Steps)."

¶ 5 On July 22, 2011, Safeguard cancelled its agreement with Johnson, after he allegedly complained to Safeguard that it had deprived him of a substantial commission by "going around him" on the procurement of a roofing job involving a church in Bolingbrook, Illinois.

¶ 6 In a letter dated August 5, 2011, Safeguard conveyed to Johnson that his "outstanding earned commissions" would not be paid unless Johnson agreed to waive any and all claims arising out of their agreement, or arising out of Johnson's independent contractor relationship with Safeguard. Johnson refused to sign a proposed waiver of his rights.

¶ 7 On December 20, 2011, Johnson filed a two-count complaint against Safeguard, alleging that Safeguard violated the Sales Representative Act (820 ILCS 120/0.01 et seq. (West 2010)) (count I), and engaged in breach of contract (count ...


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