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Southern Wine & Spirits of Illinois, Inc. v. Steiner

Court of Appeals of Illinois, First District, Third Division

March 31, 2014

SOUTHERN WINE and SPIRITS OF ILLINOIS, INC., Plaintiff-Appellant,
v.
PAUL STEINER and RICKY NELSON, a/k/a RICKY LEE NELSON, Defendants-Appellees

Appeal from the Circuit Court of Cook County. No. 12 M1 1180202. The Honorable Sheryl A. Pethers, Judge, presiding.

Affirmed.

SYLLABUS

When defendants gave a personal guaranty to a wholesale wine distributor that they would pay for any debts incurred by the wine business they owned, the guaranty was enforceable by the distributor, but, when the distributor was purchased by plaintiff without defendants' knowledge and defendants' wine business started doing business with plaintiff and failed to pay plaintiff, the trial court did not err in dismissing plaintiff's complaint to enforce the guaranty against defendants individually, since the plain language of the guaranty did not permit assignment of the guaranty and, therefore, defendants were not liable to plaintiff under the guaranty.

For plaintiff-appellee: Marc S. Lichtman, Kara R. Eisen, Marc S. Lichtman & Associates, Ltd., Chicago, Illinois.

For defendants-appellants: Joshua Sachs, Joshua Sachs & Associates, Evanston, Illinois; Michael I. White, Chicago, Illinois.

PRESIDING JUSTICE HYMAN delivered the judgment of the court, with opinion. Justices Neville and Mason concurred in the judgment and opinion.

OPINION

HYMAN, PRESIDING JUSTICE.

Page 1066

[¶1] When Seneca wrote, " Vinum incendit iram," (Wine kindles wrath), litigation over a purchase of some $19,000 in liquor and other goods was not what he had in mind. The wrath kindled by wine in this case arose out of a personal guaranty executed by defendants, Paul R. Steiner and Ricky L. Nelson, to protect a wholesale wine distributor, Morand Brothers Beverage Company, d/b/a Romano Brothers Beverage Company. Defendants guaranteed they would pay Morand for any indebtedness incurred by 1989 Wine Partners, Inc., d/b/a Superior Wine Selections (Superior), a wine merchant that defendants owned and operated. Plaintiff Southern Wine & Spirits of Illinois, Inc., purchased Morand and all of its assets and later became a supplier to Superior. Years later, Superior purchased $19,080.49 in liquor and other goods from Southern and refused to make payment. Southern then filed a breach of contract complaint against defendants seeking to enforce the personal guaranty

Page 1067

to Morand. Defendants filed a motion to dismiss, which the circuit court granted with prejudice, while also granting plaintiff leave to file an amended complaint against the corporate defendant. The court found that the personal guaranty defendants gave Morand was not assignable and thus Southern could not enforce it. The court also granted, in part, defendants' motion to strike, on hearsay grounds, a portion of an affidavit submitted by Southern.

[¶2] Southern appeals the trial court's dismissal order arguing the guaranty is enforceable because: (1) the guaranty expressly states it is effective until defendants cancel or discontinue it, which they did not do; and (2) the assignment was not a material change that would discharge the guarantors' obligations. Southern also appeals the trial court's order on defendants' motion to strike, arguing the excised paragraphs fall under the business records exception to the hearsay rule. We affirm.

[¶3] BACKGROUND

[¶4] On May 7, 2001, defendants Steiner and Nelson (Guarantors), as corporate officers of Superior Wine Selections, submitted a credit application to Morand, a wholesale wine distributor. They also executed and delivered to Morand a personal guaranty that provided, in part:

" To induce you to sell merchandise and extend credit to 1989 Wine Partners, Inc., d/b/a Superior Wine Selections, a corporation, at the request of the undersigned, and because of the financial interest of the undersigned in said corporation, undersigned hereby unconditionally guarantee(s) the full and prompt payment when due of any and all indebtedness which may at any time and from time to time be ...

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