THIRD DIVISION MARCH 28, 2007
No. 1-06-0993
CAREER CONCEPTS, INC., ) Appeal from the ) Circuit Court of Plaintiff-Appellee, ) Cook County. ) v. ) No. 04 L 3087 ) SYNERGY, INC., ) The Honorable ) Paddy H. McNamara, Defendant-Appellant. ) Judge Presiding.
JUSTICE GREIMAN delivered the opinion of the court:
Defendant Synergy, Inc., appeals from the judgment of the trial court in favor of plaintiff
Career Concepts, Inc. (CCI), on its breach of contract action. On appeal, defendant contends
that: (1) the trial court erred in allowing the case to proceed to a trial on the merits; (2) the
court’s liability finding was against the manifest weight of the evidence; and (3) the court abused
its discretion by awarding plaintiff attorney fees.
Briefly stated, plaintiff, an employee placement agency, filed the underlying action in
order to recover a placement fee allegedly owed by defendant, a professional employer
organization (PEO).1 Plaintiff claimed that the parties had a valid contract and defendant was in
breach thereof because it failed to pay a placement fee after hiring Diane Takacs, an individual
previously connected with plaintiff. In response, defendant argued that the purported contract
was invalid because John Driscoll, the signator, did not have authority to enter into contracts on
1 A PEO provides employee-related services for smaller businesses. 1-06-0993
the company’s behalf. Moreover, defendant maintained that Diane Takacs was hired as a result
of wholly unrelated circumstances.
Prior to trial, on June 17, 2005, defendant filed an "Emergency Motion in Limine, for
Directed Verdict and Entry of Judgment” on the basis that plaintiff violated Supreme Court Rule
213(f) (210 Ill. 2d R. 213(f)) by failing to adequately and completely disclose its intended
witnesses. Specifically, defendant argued that plaintiff’s three witness disclosures were
inadequate and incomplete because: (1) Diane Takacs’ address was not provided and her
testimony was not divulged in appropriate detail; (2) the testimony of the remaining two
witnesses, Amber Campbell and Keri Burton, was not divulged at all; and (3) John Driscoll was
not listed as a potential witness. Accordingly, defendant requested that the court bar plaintiff
from presenting any witnesses at trial. In the alternative, defendant argued that plaintiff could not
support its claim solely based upon the witnesses and minimal subjects disclosed; therefore, the
court should direct a verdict and enter judgment in defendant’s favor. After considering the
motion, the trial court granted plaintiff 28 days to supplement its witness disclosures and comply
with Rule 213.
On September 29, 2005, defendant filed a "Renewed Motion in Limine, for Directed
Verdict and Entry of Judgment” on the basis that plaintiff failed to follow the trial court’s prior
order to supplement its witness disclosures. At the subsequent hearing, plaintiff provided timely-
filed copies of its supplemental witness disclosures. Plaintiff maintained that it had previously
faxed the document to defendant. The trial court ultimately denied defendant’s motion.
Then, on November 23, 2005, defendant filed an "Emergency Motion to Dismiss”
-2- 1-06-0993
pursuant to sections 13.70 and 15.85 of the Business Corporation Act of 1983 (Act) (805 ILCS
5/13.70, 15.85 (West 2004)). Defendant argued that plaintiff, an Indiana corporation, was not
registered or authorized to do business as a foreign corporation in Illinois and therefore could not
file the underlying lawsuit. Without ruling, the trial court took the motion under advisement and
proceeded to trial.
At trial, Amber Campbell testified that she was employed by plaintiff as an account
executive in 2001. Campbell stated that she initiated the relationship with defendant by "cold-
calling” the company, and, after describing the nature of her call, she was directed to Driscoll.
Driscoll stated that defendant was interested in hiring sales personnel; therefore, Campbell
forwarded a contract to him via facsimile. Campbell testified that she asked whether Driscoll
had authority to sign the contract. Driscoll responded in the affirmative and signed and returned
the contract.
Under the terms of this standard contract, if defendant hired a candidate sent by plaintiff
within one year, it was required to pay a placement fee, which was 30% of the hired candidate’s
first year compensation, including bonuses. In addition, the contract stated that, in the event that
plaintiff was forced to pursue collection remedies, defendant agreed to "pay all expenses thereof,
including reasonable attorney’s fees.”
Thereafter, in 2001, Campbell sent Takacs to interview with Driscoll and Jon
Skulborstad, defendant’s founder and president. Campbell spoke directly to Skulborstad after the
interviews, and he indicated that the company was not interested in hiring Takacs at that time.
Takacs subsequently ended her relationship with plaintiff. Approximately two years later, she
-3- 1-06-0993
contacted plaintiff again for employment assistance. At that time, the company learned that
defendant had hired Takacs later in 2001.
On cross-examination, Campbell testified that Driscoll signed the contract at issue in his
capacity as hiring manager. Campbell admitted, however, that she did not know whether
Driscoll actually was the hiring manager and she did not attempt to verify his title or position.
She further admitted that she was never told by anyone within the company that Driscoll had
contract-signing or hiring authority. When Campbell spoke to Skulborstad, she never mentioned
the contract between the parties nor inquired into Driscoll’s position or authority. Campbell
stated that plaintiff was no longer in business.
Arnie Eastburn, plaintiff’s owner and president, testified that Campbell was responsible
for the formation and oversight of the relationship with defendant. In 2002, Eastburn called
Skulborstad, whom he had known for years, to inquire whether he would be interested in
potentially hiring any candidates. According to Eastburn, Skulborstad responded that he would
be interested if there was a suitable candidate, and Eastburn alerted Skulborstad to the existing
contract between their companies. Then, in 2003, after learning that Takacs had been hired by
defendant in 2001, Eastburn sent Skulborstad an invoice for the outstanding placement fee of
$30,000 based on the belief that Takacs earned $100,000 in her first year. In response,
Skulborstad called Eastburn, announcing his refusal to pay the fee because the parties did not
have a contract for services.
On cross-examination, Eastburn admitted that he never contacted Skulborstad when the
parties entered into the contract at issue. He further admitted that he did not attempt to verify
-4- 1-06-0993
whether Driscoll had contract-signing authority. Eastburn denied that plaintiff conducted
business in Illinois, but admitted that plaintiff worked with Illinois residents to find employment
positions in Illinois "on a regular basis.” Eastburn acknowledged attending a "couple” of
industry meetings in Illinois to "drum up” business. Eastburn further admitted that plaintiff was
not registered to conduct business in Illinois and never paid franchise fees or taxes to the Illinois
Secretary of State.
John Driscoll testified that he was employed by defendant in 2001 as a sales manager.
Driscoll recalled being contacted by Campbell in early 2001 to begin a relationship between
plaintiff and defendant. Driscoll stated that he presented the contract at issue to Skulborstad and
was given authority to sign it. Driscoll recalled that Takacs was subsequently sent as a candidate,
and he and Skulborstad interviewed her, but she was not hired. Driscoll further stated that, while
he was employed by defendant, the company paid a fee to hire Melissa Donahue through a search
firm. Driscoll left defendant’s company around June 1, 2001.
On cross-examination, Driscoll admitted that he never held the position of hiring manager
with defendant and did not have contract-signing authority. Driscoll further admitted that he
signed the contract at issue on behalf of defendant as its hiring manager; however, he denied that
this was a misrepresentation. Driscoll admitted that, prior to leaving defendant’s company
without any advance notice, he was in an altercation with Skulborstad. He further admitted that
he attempted to recruit defendant’s employees away from the company. Driscoll, however, stated
that he did not harbor any ill-will toward defendant.
On redirect examination, Driscoll maintained that Skulborstad authorized him to sign
-5- 1-06-0993
another contract in addition to the one at issue. More specifically, the contract was for a sales
presentation. On re-cross-examination, Driscoll admitted that he was required to seek
Skulborstad’s approval before signing the sales presentation contract. Driscoll also admitted that
Melissa Donahue was hired as a temporary employee.
Diane Takacs had no recollection of Campbell, but someone at plaintiff’s company
arranged an interview for her at defendant’s company in February 2001. Takacs only recalled
interviewing with Driscoll. She denied that she had a follow-up interview with Skulborstad.
When defendant did not hire her initially, Takacs ended her relationship with plaintiff. Takacs
admitted that she was hired by defendant several months later. However, immediately prior to
accepting a position with defendant, Takacs was employed by another company. While
employed there, she made a sales presentation to defendant that Skulborstad attended. Shortly
thereafter, Joe Fife, defendant’s director of sales, contacted Takacs and asked whether she would
be interested in working for defendant. Takacs subsequently interviewed with Fife and accepted
a position with defendant in July, 2001. Her base salary was approximately $70,000, plus bonus.
Ultimately, Takacs was compensated $89,000 in total for her first year. On cross-examination,
Takacs stated that she did not believe plaintiff contributed to her hiring.
Jon Skulborstad testified that, during the time frame in question, he had complete hiring
and firing authority and was the only employee with contract-signing authority. Until abruptly
leaving the company, Driscoll was a sales manager for defendant. In that capacity, Driscoll was
required to find potential candidates for sales positions; however, only Skulborstad could hire an
acceptable candidate. Driscoll never held the position of hiring manager. Driscoll was aware of
-6- 1-06-0993
defendant’s hiring and firing and contract-signing restrictions, as well as the company’s policy
against using placement firms to find full-time employees because of the accompanying
placement fees. Skulborstad admitted that defendant used temp firms to hire temporary
employees, which required a fee; however, Skulborstad maintained that using temp firms was the
only method for obtaining temporary employees. He further stated that some temporary
employees had become full-time employees, such as Melissa Donahue. Skulborstad admitted
that he authorized Driscoll to hire Donahue as a full-time employee, but only after she
demonstrated satisfactory performance in her temporary capacity.
Skulborstad stated that he had known Eastburn for years, and that the pair would see each
other at industry functions at least once per year. Skulborstad recalled receiving a phone call
from Eastburn regarding his company when it was in its infancy. Skulborstad relayed his
company’s policy against using placement firms, but told Eastburn to contact him if there was an
exceptional candidate. Eastburn never contacted Skulborstad after the parties allegedly entered
into the contract at issue. Skulborstad first became aware of the alleged contract in 2003 when
he received Eastburn’s invoice. Skulborstad admitted that he authorized Fife to hire Takacs in
2001 based on her sales presentation while employed elsewhere. Skulborstad had no recollection
of being introduced to Takacs by Driscoll or interviewing her earlier in the year. Because of
defendant’s policy against using placement firms, he never would have hired Takacs if he
thought she was connected to plaintiff. Takacs was employed by defendant for a little over one
year and left the company on good terms. Skulborstad denied authorizing Driscoll to sign the
contract at issue. He did, however, recall authorizing Driscoll to sign one unrelated sales
-7- 1-06-0993
contract. Further, Skulborstad denied ever speaking with Campbell about an interview with
Takacs.
Joe Fife testified that, as director of defendant’s sales, he was Driscoll’s direct supervisor.
Fife reiterated that Skulborstad had sole contract-signing authority. Fife stated that Driscoll
neither held the position of hiring manager nor had contract-signing or hiring authority while
working under him. Moreover, Driscoll never told Fife that he had signed a contract with
plaintiff. Fife reiterated defendant’s well-known policy against using placement firms for full-
time employees. Fife recalled the circumstances of Takacs’ hiring in the same manner as
Skulborstad.
The trial court ultimately found in favor of plaintiff. During defendant’s closing
argument, the court advised defense counsel to limit his argument to the issue of damages
because it had already determined that defendant was liable under the contract. Specifically, the
trial court found that Driscoll had apparent authority to enter into the contract at issue on
defendant’s behalf. Moreover, the trial court announced that Skulborstad and Takacs were not
credible witnesses. In particular, the court determined that both individuals were lying when they
denied that the initial interview took place while Takacs was involved with plaintiff. The court
awarded plaintiff damages in the amount of $26,7002 plus attorney fees, but denied prejudgment
interest. The court then ordered plaintiff to file its petition for attorney fees.
Plaintiff subsequently filed its fee petition in the amount of $14,730,70 for attorney fees
2 This amount was calculated based on 30% of Takacs’ first year earnings of $89,000 in
salary and bonuses.
-8- 1-06-0993
and costs. Defendant responded by filing a memorandum in opposition to the fee petition,
arguing that plaintiff was not entitled to recover because it was unsuccessful in proving the entire
amount of requested damages in the underlying complaint, and the petition failed to include the
information necessary to satisfy its burden for proving that the fees were reasonable. In addition,
defendant filed a motion for a ruling on its prior motion to dismiss pursuant to plaintiff’s
violation of sections 13.70 and 15.85 of the Act.
According to defendant, during the hearing, the trial court advised plaintiff’s counsel to
withdraw the contingency fee agreement that he previously entered with his client because it
would constrain the court’s ability to award attorney fees.3 Plaintiff’s counsel eventually agreed.
The trial court then reviewed each entry of the fee petition, striking an undisclosed number of
entries that apparently were too vague or excessive. Ultimately, the trial court denied
defendant’s motion to dismiss and entered a final order for $39,2754 in total damages in favor of
plaintiff. Defendant subsequently filed motions to reconsider all of the court’s judgments,
including those related to the pretrial motions. According to the parties, following a brief
hearing, the court denied the motions to reconsider.5 This timely appeal followed.
3 The record on appeal contains a bystander’s report of the trial (see 210 Ill. 2d R. 323);
however, the record does not contain a transcript, or acceptable substitute, of the posttrial
proceedings. 4 Plaintiff was therefore awarded $12,575 in attorney fees. 5 The record does not contain a transcript or an acceptable substitute of this proceeding.
See 210 Ill. 2d R. 323.
-9- 1-06-0993
Defendant first argues that the trial court committed reversible error by denying its
pretrial motions in limine, for directed verdict and entry of judgment on the basis that plaintiff
failed to timely and adequately disclose witnesses in accordance with Rule 213. Because a trial
court’s ruling on a motion in limine is subject to reconsideration throughout the trial, the movant
must object to the evidence when it is introduced at trial otherwise the issue is waived for
purposes of appeal. Ford v. Herman, 316 Ill. App. 3d 726, 736 (2000). Although defendant filed
the pretrial motions and filed a posttrial motion to reconsider, defense counsel failed to object to
the witnesses’ testimony when offered at trial and, therefore, did not preserve the issue for
appeal. Cf. Jarke v. Jackson Products, Inc., 282 Ill. App. 3d 292, 295 (1996) (despite the defense
counsel’s failure to contemporaneously object to witness testimony, the issue was sufficiently
preserved where the defendant filed a pretrial motion in limine and the defense counsel made a
belated objection to the testimony during the course of trial). Accordingly, we find that
defendant waived this issue for purposes of our review.
Notwithstanding defendant’s waiver, we would affirm the trial court’s denial of
defendant’s motions in limine, for directed verdict and entry of judgment because plaintiff
sufficiently complied with Rule 213(f).
Defendant next contends that the trial court erred in denying its motion to dismiss based
on plaintiff’s violation of sections 13.70 and 15.85 of the Act. Plaintiff responds that defendant
failed to satisfy its burden of proving that plaintiff was transacting business in Illinois in violation
of the Act.
Pursuant to the Act, in order to transact business in Illinois, a foreign corporation must
-10- 1-06-0993
obtain authority from the Secretary of State. See 805 ILCS 5/13.05 (West 2004). Further, the
Act posits that, unless it obtained the requisite authority, a foreign corporation may not maintain
a civil action in any Illinois court. See 805 ILCS 5/13.70 (West 2004). In addition, if a
corporation is required to pay a "franchise tax, license fee, penalty, or interest” under the Act and
has failed to do so, the corporation may not maintain a civil action. See 805 ILCS 5/15.85 (West
2004). The defendant bears the burden of proving that a corporation transacted business in
violation of the Act. Subway Restaurants, Inc., v. Riggs, 297 Ill. App. 3d 284, 289 (1998). A
foreign corporation may engage in occasional and isolated transactions in Illinois without being
required to obtain authorization. Riggs, 297 Ill. App. 3d at 289. Moreover, a foreign corporation
need not obtain authorization if it simply conducts interstate commerce. Riggs, 297 Ill. App. 3d
at 289.
In the instant case, defendant failed to satisfy its burden of demonstrating that plaintiff
violated the Act. Defendant attached an affidavit to its motion to dismiss indicating that an
online search and telephone confirmation revealed that plaintiff was a corporation registered in
Indiana, but not listed as a foreign corporation authorized to conduct business in Illinois.
Defendant’s burden of proof, however, is not satisfied with this information alone. See Mass
Transfer, Inc., v. Vincent Construction Co., 223 Ill. App. 3d 746, 751-52 (1992). Defendant
additionally argues that the trial evidence "indisputably” demonstrated that plaintiff was regularly
transacting business in Illinois as an unauthorized foreign corporation. At trial, Eastburn testified
that his Indiana company was not registered to conduct business in Illinois. However, he stated
that plaintiff assisted Illinois residents with finding employment in Illinois on a regular basis and
-11- 1-06-0993
that he attended industry meetings to solicit business "a couple of times.” We disagree that this
evidence "indisputably” satisfies defendant’s burden. Rather, defendant has merely demonstrated
that plaintiff worked with Takacs in Illinois and some unknown number of other individuals.
Without more, we cannot assume that plaintiff violated the Act simply based on Eastburn’s use
of the words "regular basis.”
Defendant additionally contends that the trial court erred in finding it liable for breach of
contract. Specifically, defendant argues that the contract at issue was invalid because Driscoll
did not have the authority, apparent or otherwise, to enter into it on defendant’s behalf.
An agent may bind his principal by acts which he appears authorized to perform.
Lundberg v. Church Farm, Inc., 151 Ill. App. 3d 452, 461 (1986). The scope of an agent’s
purported authority is a question of fact; therefore, we will reverse the court’s finding on the
issue only if it is against the manifest weight of the evidence. Progress Printing Corp. v. Jane
Byrne Political Committee, 235 Ill. App. 3d 292, 306 (1992). Only when an opposite conclusion
is apparent or the finding appears unreasonable, arbitrary or not based on the evidence will a
finding be deemed against the manifest weight of the evidence. Amcore Bank, N.A., v.
Hahnaman-Albrecht, Inc., 326 Ill. App. 3d 126, 135 (2001).
Apparent authority arises when the principal knowingly permits the agent to assume
authority or when he holds his agent out as possessing authority, and " 'a reasonably prudent man,
exercising diligence and discretion, in view of the principal’s conduct, would naturally suppose
the agent to possess.’ " Lundberg, 151 Ill. App. 3d at 461, quoting Hofner v. Glenn Ingram &
Co., 140 Ill. App. 3d 874, 882 (1985). In order to prove the existence of apparent authority, the
-12- 1-06-0993
plaintiff must demonstrate that: (1) the principal consented to or knowingly acquiesced in the
agent’s exercise of authority; (2) the third person reasonably concluded, based on the actions of
the principal and agent, that the party was an agent of the principal; and (3) the third person
justifiably relied on the agent’s apparent authority to his detriment. Letsos v. Century 21-New
West Realty, 285 Ill. App. 3d 1056, 1065 (1996).
In the case at bar, we determine that defendant remains liable under the contract. Review
of the record demonstrates that, prior to submitting the contract to Driscoll, Campbell was
assured that he was authorized to sign on behalf of defendant. Driscoll admitted that he was not
a hiring manager, despite signing the contract as such; however, he concluded that he did not
misrepresent himself. He maintained that he received authorization from Skulborstad. In
addition, Driscoll interviewed Takacs and then forwarded her to Skulborstad for another
interview. After the interviews, Campbell contacted Skulborstad directly and learned that they
were not interested in hiring Takacs at that time. Moreover, Skulborstad admitted that he
expressly authorized Driscoll to enter into at least one contract and to hire Melissa Donahue as a
full-time employee. Further, although the exact timing of the conversation is unclear,
Skulborstad and Eastburn spoke at some point about plaintiff’s services and, at the very least,
Skulborstad told Eastburn to forward exceptional candidates to defendant.
We recognize that defendant presented contradicting evidence; however, the trier of fact
determines the credibility of the witnesses, resolves conflicts in the evidence and attaches
relevant weight to the witness testimony. Seldin v. Babendir, 325 Ill. App. 3d 1058, 1063
(2001). The trial court specifically announced that Skulborstad and Takacs did not testify
-13- 1-06-0993
credibly. Furthermore, we may not reverse a judgment merely because the trial court could have
drawn different inferences and conclusions from the conflicting testimony. See Rainey v. City of
Salem, 209 Ill. App. 3d 898, 905 (1991). Despite the delay in Takacs’ actual hiring, in that she
was no longer affiliated with plaintiff and worked for an unrelated company at the time, the
contract remained in effect. According to its terms, "service fees are on a contingency basis and
are payable only if a candidate enters into a service relationship with [defendant] within one year
after our most recent communication relating to the candidate.” There is no dispute that Takacs
was hired within one year of Campbell and Driscoll’s first communication. Accordingly, we do
not find that a different result is clearly apparent or that the trial court’s judgment, based on the
evidence, was palpably erroneous and wholly unwarranted or arbitrary and unsubstantiated by the
evidence. See Amcore Bank, N.A., 326 Ill. App. 3d at 135.
Defendant finally contends that the trial court erred in awarding plaintiff attorney fees.
The decision whether to award attorney fees is within the sound discretion of the trial court and
will not be disturbed absent an abuse of discretion. Med + Plus Neck & Back Pain Center, S.C.
v. Notfsinger, 311 Ill. App. 3d 853, 861 (2000). Usually parties are responsible for their own
attorney fees; however, if expressly authorized by statute or by agreement, the court may award
attorney fees so long as they are reasonable. Collins v. Hurst, 316 Ill. App. 3d 171, 173 (2000).
Defendant relies on Med + Plus to argue that the court’s award was erroneous because
plaintiff failed to prevail on all aspects of its complaint. However, the instant case is
distinguishable because no evidence was presented that the parties’ had a fee-shifting provision
nor can defendant reasonably argue that the court’s reduction in award in compliance with the
-14- 1-06-0993
terms of the contract and refusal to award prejudgment interest were "significant issues” in the
case. Med + Plus, 346 Ill. App. 3d at 861 (defining a prevailing party for purposes of a fee-
shifting provision as one that is successful on any significant issue).
Notwithstanding, we must reduce the award pursuant to the terms of the contingency fee
agreement between plaintiff and its attorney. The record demonstrates that plaintiff and its
attorney agreed to a contingency fee arrangement, and plaintiff does not dispute that the
agreement called for a one-third contingency fee. In the majority of case law analyzing
contingency fees, courts are concerned that contingency fees are unreasonable because they
would allow for the award of excessive fees. See, e.g., Collins, 316 Ill. App. 3d at 173;
Blankenship v. Dialist International Corp., 209 Ill. App. 3d 920, 927 (1991) (courts should
consider contingency fee agreements as only one factor in determining whether the attorney fees
are reasonable). The instant case is unique, however, in that plaintiff was awarded attorney fees
in excess of its contingency fee agreement. We presume that the contingency fee agreement
between plaintiff and its attorney was reasonable and find it enforceable. Consequently, the trial
court erred in allowing plaintiff’s attorney to unilaterally waive the contingency fee in favor of
the court’s own award. This court has a duty to guard against the collection of excessive attorney
fees, and we will generally enforce a reasonable contract between an attorney and his client. See
Corcoran v. Northeast Illinois Regional Commuter R.R. Corp., 345 Ill. App. 3d 449, 452 (2003).
Accordingly, we reduce plaintiff’s award of attorney fees to one-third of its damage recovery
pursuant to the contingency fee agreement. Therefore, because plaintiff recovered $26,700, it is
entitled to $8,900 in attorney fees.
-15- 1-06-0993
Accordingly, we affirm the judgment of the circuit court of Cook County, but modify the
attorney fee award in accordance herewith.
Affirmed; modified as instructed.
KARNEZIS, J., and CUNNINGHAM, J., concur.
-16-