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Jill Knowles Enterprises, Inc. v. Dunkin

Court of Appeals of Illinois, Second District

June 28, 2017

JILL KNOWLES ENTERPRISES, INC., Plaintiff and Counterdefendant-Appellee and Cross-Appellant,
MARY ANN DUNKIN, Defendant and Counterplaintiff-Appellant and Cross-Appellee.

         Appeal from the Circuit Court of Lake County. No. 15-SC-5759 Honorable Theodore S. Potkonjak, Judge, Presiding.

          JUSTICE ZENOFF delivered the judgment of the court, with opinion. Justices Hutchinson and Birkett concurred in the judgment and opinion.



         ¶ 1 Defendant and counter plaintiff, Mary Ann Dunkin, appeals an order of the circuit court of Lake Count y granting judgment in favor of plaintiff and counter defendant, Jill Knowles Enterprises, Inc. (JKE), in the amount of $8, 955.98 following a bench trial. JKE cross-appeals an order awarding it $9, 392.85 in attorney fees, contending that it was entitled to over $23, 000. For the reasons that follow, on Mary Ann's appeal, we affirm the judgment in part, reverse it in part, and enter judgment in Mary Ann's favor and against JKE in the amount of $3, 424.66. On JKE's cross-appeal, we vacate the judgment.

         ¶ 2 I. BACKGROUND

         ¶ 3 This small-claims litigation stemmed from a heated dispute over fees for boarding Mary Ann's horse, Zidane. JKE, doing business as Hidden Knoll in Wadsworth, Illinois, is a facility that trains and boards horses. The proprietor is Jill Knowles. On September 7, 2013, the parties entered into a written contract for Zidane's boarding. The contract provided that it was "month to month" for "eight hundred dollars ($950) [sic] per month." The contract also provided for finance charges and late fees. In addition, the contract contained an attorney-fee-shifting provision. In approximately June 2014, JKE raised the monthly boarding rate to $1, 000. Mary Ann did not protest that amount, and her husband, David, paid some of the bills at that rate. However, beginning in approximately August 2014, Mary Ann became delinquent in payments.

         ¶ 4 In approximately February 2015, David desired to sell Zidane. Knowles took Zidane to Florida, because potential buyers were there for the winter horse-show circuit. Knowles testified that she informed David that the fees for the Florida venture would be $10, 000 to $12, 000 per month. David verbally agreed. Zidane was with Knowles in Florida for approximately five weeks. Meanwhile, the monthly boarding fees at Hidden Knoll continued to accrue, because JKE kept Zidane's stall reserved for his return from Florida.

         ¶ 5 In February 2015, Knowles made repeated demands for payment of the Hidden Knoll boarding bill, and she threatened legal action. On February 26, 2015, David directed his bank to wire $10, 000 to JKE, and JKE applied that payment to the delinquent Hidden Knoll boarding fees, leaving a balance due of approximately $7, 000.

         ¶ 6 On March 17, 2015, JKE invoiced Mary Ann for the Florida venture in the amount of $10, 181.25. The invoice contained a notice that it would be considered overdue on the "fifth" of the month.

         ¶ 7 On March 20, 2015, JKE's accountant's office notified David that the outstanding Hidden Knoll balance was $6, 575.34. On that date, the accountant's office also informed David of the amount of the Florida bill. On March 21, 2015, David directed his bank to wire another $10, 000 to JKE. Knowles directed her accountant to apply it to the Florida bill rather than to the Hidden Knoll balance. Then, on November 16, 2015, JKE filed suit against Mary Ann for breach of contract, or, in the alternative, for account stated to recover the balance of $7, 358.73 that it claimed was still owed for the Hidden Knoll boarding fees. JKE also sought reimbursement for its attorney fees. Attached to JKE's complaint as exhibits were the written contract and certain paid and unpaid invoices. Also attached as an exhibit was a document showing an outstanding balance of $7, 358.73 as of October 31, 2015. The lawsuit sought to recover only for the money due on the Hidden Knoll account. The lawsuit also requested attorney fees for collecting the amount due.

         ¶ 8 Mar y Ann obtained leave of court to file an answer, a counterclaim, and affirmative defenses . Mary Ann denied that the monthly boarding fee was either $950 or $1, 000, but claimed that it was $800. In her first affirmative defense, Mary Ann alleged that, as of March 15, 2015, she owed JKE $6, 575.34 for the Hidden Knoll boarding fees and that the $10, 000 that was wired on March 21, 2015, was to be applied toward that balance. She also alleged that she made an overpayment of $3, 424.66. In her second affirmative defense and counterclaim, Mary Ann alleged that the base contract amount was $800 per month and that the increase to $1, 000 was never effective, because she never signed a document agreeing to the increase, as required by the contract. Mary Ann sought a setoff of $3, 650 from any judgment against her.[1]

         ¶ 9 The bench trial commenced on May 24, 2016. JKE's attorney questioned Knowles about the documents t h at we r e at t ached to the complaint as exhibits, and about additional unpaid invoices after October 31, 2015, showing that the balance Mary Ann owed to JKE as of May 18, 2016, was $7, 923.79. JKE's attorney did not mark any documents as trial exhibits or move to admit them into evidence. On November 22, 2016, approximately two months after the notice of appeal was filed, the court, apparently sua sponte, entered an order purporting to admit "all exhibits into evidence for purpose of appeal."

         ¶ 10 At trial, Knowles testified that the base contract amount for boarding Zidane was $950 per month and that the $800 figure printed on the contract was a scrivener's error. Knowles testified that neither M a r y An n nor D avid objected to the invoices reflecting either the $950 amount or the increase to $1, 000. According to Knowles, $7, 358.73 was due under the written contract as of October 31, 2015. Additional unpaid invoices raised the amount due as of May 18, 2016, to $7, 923.79. Also, she testified that finance charges continued to accrue.

         ¶ 11 In response to her attorney's question―"Did defendant's husband, David Dunkin, ask for a bill for the services in Florida so it could be paid after the horse was sold?"―Knowles answered "Yes." She testified that on March 24, 2015, her accountant's office gave David an invoice showing the entire outstanding balance for the boarding at Hidden Knoll as well as an invoice for the Florida venture. The accountant's office also informed David that the ...

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