Covinsky v. Hannah Marine Corp.

903 N.E.2d 422, 388 Ill. App. 3d 478, 328 Ill. Dec. 35, 2009 Ill. App. LEXIS 72
CourtAppellate Court of Illinois
DecidedFebruary 17, 2009
Docket1-08-0695, 1-08-0779 cons.
StatusPublished
Cited by28 cases

This text of 903 N.E.2d 422 (Covinsky v. Hannah Marine Corp.) 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
Covinsky v. Hannah Marine Corp., 903 N.E.2d 422, 388 Ill. App. 3d 478, 328 Ill. Dec. 35, 2009 Ill. App. LEXIS 72 (Ill. Ct. App. 2009).

Opinion

PRESIDING JUSTICE KARNEZIS

delivered the opinion of the court:

Plaintiff Jeffrey Covinsky (Covinsky) was employed by defendant Hannah Marine Corporation (Hannah Marine). When Hannah Marine refused to pay him pursuant to a golden parachute provision in his employment contract, Covinsky filed a two-count action against Hannah Marine and its owner, defendant Donald C. Hannah (Hannah), asserting breach of contract against Hannah Marine and violation of the Illinois Wage Payment and Collection Act (820 ILCS 115/1 et seq. (West 2006)) (Wage Act or the Act) against Hannah and Hannah Marine. The circuit court granted summary judgment to Covinsky in his actions against Hannah Marine, found for Hannah on Covinsky’s Wage Act claim against him, dismissed Hannah Marine’s amended counterclaim against Covinsky for breach of fiduciary duty and awarded Covinsky damages, legal fees and costs. Hannah Marine appeals, asserting the court erred in (1) its legal interpretation of the contract; (2) granting summary judgment to Covinsky on his Wage Act and breach of contract claims against Hannah Marine; (3) denying Hannah Marine’s request for a jury trial on damages; (4) its calculation of damages; (5) its award of legal fees and costs under the Wage Act; (6) dismissing Hannah Marine’s amended counterclaim; and (7) denying assorted discovery requests by Hannah Marine. Covinsky cross-appeals, arguing the court erred in (1) failing to award him fees and costs for his defense against Hannah Marine’s counterclaims and his pursuit of the breach of contract claim and (2) refusing to enter judgment against Hannah on the Wage Act claim. We affirm in part, reverse in part and remand.

Background

Covinsky was the president, chief executive officer and chief operating officer of Hannah Marine starting in 1998. He left this employment in 2006. The written employment contract between Covinsky and Hannah Marine applicable in 2006 provided in paragraph 7(g):

“In the event that Hannah is sold, merged with another corporation, or there is a a change in the present ownership which results in the termination of the Employee’s employment as President and Chief Executive Officer and Chief Operating Officer of Hannah, Hannah shall pay to Employee an amount equal to eighteen (18) months’ salary as set forth under the contract salary rate then in existence.”

At the time the agreement was executed in 2004, Hannah Marine was owned equally by Hannah, James A. Hannah, Jr., and Margaret Maloney. The board of directors consisted of James Hannah and John McNulty. In 2005, Hannah brought suit against James Hannah and Maloney, alleging mismanagement of Hannah Marine to his detriment. He subsequently agreed to buy James Hannah’s and Maloney’s interests in Hannah Marine.

In 2005, given Hannah’s possible takeover of the corporation, Covinsky informed Hannah that he assumed Hannah would not want to continue his employment. He suggested a settlement of the liability Hannah Marine had under the employment contract. In April 2006, Covinsky told Hannah that he did not intend to resign and expected to fulfill the terms of his employment contract, which ran until February 28, 2007. In May 2006, Hannah finalized the sale and become sole owner and chief executive officer of Hannah Marine. James Hannah and McNulty resigned from the board of directors. On May 10, 2006, Hannah informed Covinsky that his employment was terminated immediately and that he “accepted” Covinsky’s resignation. Covinsky protested that he never resigned. On March 19, 2006, Covinsky received a check from Hannah Marine covering his salary until May 10, 2006.

Covinsky demanded Hannah Marine honor the employment contract and pay him severance due under paragraph 7(g) of the contract. Hannah Marine refused. Covinsky filed a two-count complaint in the circuit court against Hannah Marine and Hannah. He asserted Hannah Marine breached the employment contract because his employment was terminated as result of a change in ownership of the corporation and he was, therefore, due 18 months’ salary and benefits as provided by paragraph 7(g). He also asserted Hannah Marine and Hannah, as its chief executive officer and the officer responsible for payment of final compensation to employees, violated the Illinois Wage Act by not paying Covinsky his final compensation, the sums due under the employment contract, at time of his termination or by his next regularly scheduled payday as required by the Act.

Hannah Marine answered, asserting paragraph 7(g) did not apply because Covinsky resigned and his termination did not result from a change in ownership. It filed an amended counterclaim alleging breach of fiduciary duty.

The court granted summary judgment to Covinsky against Hannah Marine on both his breach of contract and Wage Act claims. The court found Hannah’s acquisition of all shares of Hannah Marine constituted a change in ownership of Hannah Marine as defined in paragraph 7(g); this change in ownership resulted in Covinsky’s termination; paragraph 7(g) of the employment contract applied whether Covinsky voluntarily resigned on the date Hannah took sole ownership or was involuntarily terminated; Covinsky was owed the severance provided in paragraph 7(g); and his demand for final compensation was protected by the Wage Act. The court did not decide whether Covinsky voluntarily resigned or was involuntarily terminated but, for purposes of the summary judgment motion, assumed he resigned. The court merged Hannah Marine’s liability for breach of contract with its liability for the Wage Act violation and awarded Covinsky salary and benefits totaling $311,653 plus interest as his final compensation pursuant to paragraph 7(g). Pursuant to the Illinois Attorneys Fees in Wage Actions Act (705 ILCS 225/1 et seq. (West 2006)) (Wage Actions Act), it awarded Covinsky $11,747.91 for attorney fees and costs he incurred in prosecuting the Wage Act claim against Hannah Marine.

The court dismissed Hannah Marine’s amended counterclaim and gave it leave to file a second amended counterclaim, which it did not do. Given its ruling in favor of Covinsky, the court denied Hannah Marine’s requests to complete compliance with certain discovery requests, take additional depositions and perform additional discovery. The court dismissed Covinsky’s Wage Act claim against Hannah personally. Both Hannah Marine and Covinsky timely filed notices of appeal from the court’s February 19, 2008, order. The appeals have been consolidated here.

Analysis

Breach of Contract Claim

The court granted summary judgment to Covinsky on his breach of contract claim against Hannah Marine, finding Hannah Marine breached its employment contract with Covinsky when it failed to pay him pursuant to the terms provided in paragraph 7(g) of the contract. Summary judgment is proper where there are no disputed questions of fact and the moving party is entitled to judgment as a matter of law. Kennedy v. Four Boys Labor Services, Inc., 279 Ill. App. 3d 361, 365, 664 N.E.2d 1088, 1090 (1996). The purpose of summary judgment is not to try a question of fact but to determine whether one exists. Golden Rule Insurance Co. v.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Rohrbacher v. Balaniuk
Appellate Court of Illinois, 2026
McGuire v. Marquis
2025 IL App (3d) 240545-U (Appellate Court of Illinois, 2025)
Voss v. Clarence Barney, Jr, Inc.
2024 IL App (5th) 230188-U (Appellate Court of Illinois, 2024)
Joha Realty, LLC v. Joliet Oncology-Hematology Associates, Inc.
2023 IL App (3d) 220133-U (Appellate Court of Illinois, 2023)
Allard v. NPF Franchising, LLC
2023 IL App (1st) 220335-U (Appellate Court of Illinois, 2023)
Niro Law Group, LLC v. Profoot, Inc.
2021 IL App (1st) 201101-U (Appellate Court of Illinois, 2021)
Sosa v. Onfido, Inc.
N.D. Illinois, 2021
Early v. Allant Group, Inc
2020 IL App (1st) 181561-U (Appellate Court of Illinois, 2020)
Johnson v. Amazon.com LLC
N.D. Illinois, 2019
Woods v. Amazon.com LLC
N.D. Illinois, 2019
Illinois Municipal League Risk Management Association v. City of Collinsville
2018 IL App (4th) 170015 (Appellate Court of Illinois, 2018)
Williams v. TGI Fridays Inc
N.D. Illinois, 2018
C.O.A.L., Inc. v. Dana Hotel, LLC
2017 IL App (1st) 161048 (Appellate Court of Illinois, 2017)
Pence v. GEE Group, Inc.
236 F. Supp. 3d 843 (S.D. New York, 2017)
Majmudar v. House of Spices (India), Inc.
2013 IL App (1st) 130292 (Appellate Court of Illinois, 2013)
Timan v. Ourada
2012 IL App (2d) 100834 (Appellate Court of Illinois, 2012)
People v. RJ Reynolds Tobacco Co.
951 N.E.2d 1225 (Appellate Court of Illinois, 2011)
People v. R.J. Reynolds Tobacco
2011 IL App (1st) 101736 (Appellate Court of Illinois, 2011)

Cite This Page — Counsel Stack

Bluebook (online)
903 N.E.2d 422, 388 Ill. App. 3d 478, 328 Ill. Dec. 35, 2009 Ill. App. LEXIS 72, Counsel Stack Legal Research, https://law.counselstack.com/opinion/covinsky-v-hannah-marine-corp-illappct-2009.