Anderson v. Burton Associates, Ltd.

578 N.E.2d 199, 218 Ill. App. 3d 261, 161 Ill. Dec. 72, 1991 Ill. App. LEXIS 1316
CourtAppellate Court of Illinois
DecidedAugust 2, 1991
Docket1-90-2916
StatusPublished
Cited by69 cases

This text of 578 N.E.2d 199 (Anderson v. Burton Associates, Ltd.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Anderson v. Burton Associates, Ltd., 578 N.E.2d 199, 218 Ill. App. 3d 261, 161 Ill. Dec. 72, 1991 Ill. App. LEXIS 1316 (Ill. Ct. App. 1991).

Opinion

PRESIDING JUSTICE RAKOWSKI

delivered the opinion of the court:

Defendant-appellant Burton Associates, Inc. (Burton), appeals from an order granting partial summary judgment to plaintiff-appellee Richard Anderson (Anderson) on count I of Anderson’s complaint. The judgment awarded Anderson full value for his stock in Burton, which was Anderson’s former employer, pursuant to a shareholders’ stock redemption agreement.

Burton is an Illinois professional corporation in the business of certified public accounting. Defendant Lawrence B. Irwin (Irwin), an accountant, was the owner of 120 of the 126 issued shares. Anderson, also an accountant, was the owner of the remaining six shares. On July 1, 1986, Anderson, Irwin and Burton entered into a shareholder’s agreement (Agreement). Anderson was also made a director and officer of Burton upon his purchase of the six shares. Anderson left the employ of Burton on either July 14, 1989, or in September of 1989, and shortly after this, joined another accounting firm.

In October of 1989, Anderson filed a two-count complaint against Burton and Irwin. Count I of the complaint alleged that pursuant to paragraph 8 of the Agreement, the parties agreed that shares held by any shareholder would be redeemed upon the shareholder’s voluntary termination from employment. The complaint alleged that Anderson terminated his employment with Burton pursuant to the terms of the Agreement, but that Burton and Irwin refused to redeem Anderson’s stock, which was valued at $49,235.29. Count II of the complaint was an action for recovery of wages, bonus, and profit sharing and is not at issue in this appeal.

Burton answered the complaint, admitting the existence of the Agreement between the parties, and admitted that it had not redeemed Anderson’s shares of stock, although Burton denied that this was in violation of the Agreement. Burton also pleaded two affirmative defenses, namely: (1) that Anderson breached his fiduciary duty to Burton by soliciting clients away from Burton; and (2) that Anderson breached his obligations under the Agreement of good faith and fair dealing (by soliciting clients).

In March of 1990, plaintiff brought a motion for partial summary judgment. Attached to the motion was the Agreement, the complaint and answer to the complaint, and certain correspondence between the parties. Although defendant responded to the motion, no evidentiary material was produced. In reply, plaintiff relied upon additional evi-dentiary material, to wit, a request to admit facts which was served upon Burton in January of 1990, and which Burton had not replied to. The request to admit, standing admitted, would establish, inter alia, that other than the alleged solicitation of clients, Burton had no other basis to refuse to redeem, that defendant refused to redeem, that none of Burton’s customers were contractually obligated to continue doing business with Burton, and that Anderson had performed his contractual obligations of the Agreement.

Burton was subsequently given permission to file an affidavit and a further memorandum. Defendant filed the affidavit of Irwin. In the affidavit, Irwin averred: that as a principal of Burton, Anderson had direct contact with clients, that Anderson would not have been given client contact, and would not have been able to develop relationships with clients, were it not for Anderson’s status as a shareholder and principal and that as a result of Anderson’s status, he was given access to a number of clients (a list of names was included). Paragraph 8 of Irwin’s affidavit stated “Richard Anderson used his contacts and relationship with the above clients to solicit them to use the accounting services of himself [and Anderson’s subsequent employer] and to cease using the services of Burton.”

Irwin further averred, upon information and belief, that prior to Anderson’s leaving Burton, Anderson solicited a number of Burton clients (listing the names of six Burton clients). Ad&fionally, after Anderson left Burton numerous other Burton clients left Burton for Anderson and Anderson’s subsequent employer. Irwin averred, again upon information and belief, that “these clients left as a result of solicitation by Richard Anderson.”

Irwin’s affidavit also related that a meeting between Irwin and Anderson took place on July 12, 1989, at which time the payment to Anderson for Anderson’s Burton stock was discussed. Irwin stated “[w]e discussed and agreed that Richard Anderson would receive a promissory note calling for payment over 60 months with interest at the rate provided in the shareholder agreement rather than a lump sum payment. To be deducted from that would be IV2 times the annual billings of any client that Richard Anderson took from Burton to his accounting firm. *** Richard Anderson also said that such a deduction would be unnecessary as he would not take any Burton clients.” Attached to the affidavit was a handwritten letter, which, according to Irwin, was the complete agreement of the parties. The letter referred to the promissory note, but was silent as to any V-k times annual billings of Burton clients. The letter stated that clients Anderson retained was an item “open for discussion.” In the affidavit, Irwin explained that this reference was to “the identity of any clients taken by Richard Anderson.”

An important aspect of this case is that an amended counterclaim has been filed, which alleges that Anderson breached his fiduciary duty to Burton by solicitation of clients both before and after his termination. Neither the amended counterclaim nor the affirmative defenses on file mention the meeting of July 12, 1989, that Irwin referred to in his affidavit, nor does either pleading refer to any of the alleged terms of any agreement reached at that meeting.

Judge Dean J. Sodaro entered summary judgment in favor of Anderson on the issue of defendants’ liability under the Agreement. Judge Thomas R Quinn entered final judgment and included language pursuant to Rule 304(a) (134 Ill. 2d R. 304(a)) on September 18, 1990.

The first issue we address is whether a genuine issue of material fact existed so as to preclude the granting of summary judgment in favor of Anderson.

Burton has argued that the trial judge applied the wrong standard in granting partial summary judgment. We find this not to be the case. The standards for the determination of whether a motion for summary judgment should be granted are clear. “In determining whether a genuine issue of material fact exists, the court must consider the pleadings, depositions, admissions, exhibits and affidavits on file and construe them strictly against the movant and in favor of the opponent.” (O’Hara v. Holy Cross Hospital (1990), 137 Ill. 2d 332, 343, 561 N.E.2d 18.) Summary judgment should be granted “only when the right of the moving party is clear and free from doubt.” Gatlin v. Ruder (1990), 137 Ill. 2d 284, 293, 560 N.E.2d 586.

Burton argues that the trial court erred in granting summary judgment, in that the trial court erroneously weighed the evidence and thus decided factual issues (see Gatlin, 137 Ill. 2d at 294).

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Cite This Page — Counsel Stack

Bluebook (online)
578 N.E.2d 199, 218 Ill. App. 3d 261, 161 Ill. Dec. 72, 1991 Ill. App. LEXIS 1316, Counsel Stack Legal Research, https://law.counselstack.com/opinion/anderson-v-burton-associates-ltd-illappct-1991.