Dudek, Inc. v. Shred Pax Corp.

626 N.E.2d 1204, 254 Ill. App. 3d 862, 193 Ill. Dec. 653
CourtAppellate Court of Illinois
DecidedSeptember 28, 1993
Docket1-92-0444
StatusPublished
Cited by20 cases

This text of 626 N.E.2d 1204 (Dudek, Inc. v. Shred Pax 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
Dudek, Inc. v. Shred Pax Corp., 626 N.E.2d 1204, 254 Ill. App. 3d 862, 193 Ill. Dec. 653 (Ill. Ct. App. 1993).

Opinion

JUSTICE HARTMAN

delivered the opinion of the court:

This case was previously considered on appeal by this court. (Dudek, Inc. v. Shred Pax Corp. (1990), 196 Ill. App. 3d 720, 554 N.E.2d 1002 (Dudek I).) The sole contention resolved in Dudek I was whether the circuit court abused its discretion in granting plaintiff Dudek, Inc.’s section 2 — 1401 petition (Ill. Rev. Stat. 1985, ch. 110, par. 2— 1401 (now 735 ILCS 5/2 — 1401 (West 1992)) (section 2 — 1401)) to vacate the dismissal for want of prosecution of its first amended complaint. We reversed and remanded for further proceedings on Shred Pax’ subsisting counterclaim, Dudek’s answer thereto and “affirmative defenses” and “setoffs.”

In this appeal, Shred Pax challenges the circuit court’s granting of partial summary judgment in Dudek’s favor on Shred Pax’ counterclaim and seeks reversal and remandment for a prove up of damages. Dudek cross-appeals, seeking reversal of the circuit court’s granting of summary judgment as to Dudek’s affirmative defenses and setoffs, and the court’s denial of Dudek’s entitlement to any affirmative relief. The issues raised for review are whether the circuit court erroneously (1) construed the terms of the contract between the parties; (2) failed to find waiver of Dudek’s affirmative defense that final payment was subject to a satisfactory approval test; and (3) in the cross-appeal, whether the court erred in holding that Dudek’s action for setoffs seeking affirmative relief are barred.

The underlying facts, as gleaned from deposition testimony and documentary evidence, are as follows.

Dudek is in the scrap metal processing business. Shred Pax manufactures metal-shredding machines for use in that industry. Around 1983, Dudek investigated the possibility of purchasing a shredding machine, the function of which was to shred particular materials. Dudek sought to increase the production and safety of its scrap metal operations. William Dudek (William), Dudek’s president, visited Shred Pax’ premises where he met with A1 Kaczmarek, Shred Pax’ president. William had told Kaczmarek that Dudek needed to shred automobile bodies and parts. Kaczmarek gave William pictures of a Shred Pax Model AZ-80 as it shredded various items, including almost an entire car. There is deposition testimony to the effect that Kaczmarek represented the AZ-160 as capable of shredding the materials Dudek wanted shredded; however, there is contrary deposition testimony that Kaczmarek told William that Dudek would need a Shred Pax Model AZ-300 or “even an AZ-300 cross shredder.” Kaczmarek also told Dudek that an AZ-160, an apparently less powerful unit, was not guaranteed as suitable for the materials it wanted to shred, as expressed in a letter dated October 18,1984, sent to Dudek.

Dudek purchased the AZ-160. The proposal for the AZ-160 lists the option that the AZ-20 shredder owned by Dudek could be used as a trade-in, with a credit for $26,800. A letter written by Shred Pax accompanied the proposal. The proposal and letter each contained installment payment schedules, which are at issue here and will be discussed in detail later in this opinion. The letter also stated that Shred Pax would make changes on the system without charge, in order to make the AZ-160 “workable.” The letter, as part of the contract, was signed by Dudek and Shred Pax through their representatives. The total cost of the machine was $248,080.

Dudek made the first installment payment when the contract was signed; the second installment payment when the machine was delivered, set up and put in operation; but Dudek never made the third installment, according to deposition testimony, because no approval test was made. There was further deposition testimony that the concept of an approval test was not discussed between Dudek’s and Shred Pax’ representatives; that the second payment was made despite the absence of an approval test.

In August of 1985, Dudek filed a complaint alleging a breach of warranty against Shred Pax, involving the AZ-160 industrial metal-shredding machine. Shred Pax’ subsequent motion to strike and dismiss the complaint was granted, but Dudek was given leave to and did file an amended complaint. After its motion to dismiss the first amended complaint was denied, Shred Pax filed its answer and additionally brought a counterclaim against Dudek for breach of contract, seeking the unpaid balance owed on the shredding machine.

On March 25, 1987, the case appeared on the court-generated calendar call. Notice had been published in the Chicago Daily Law Bulletin one day earlier. Neither party appeared in court on that date. Both complaint and counterclaim were dismissed for want of prosecution. On April 23, 1987, with notice to Dudek, Shred Pax moved to vacate the dismissal of its counterclaim only, which the circuit court granted on May 15, 1987.

At another calendar call, scheduled for March 29, 1988, and published in the Chicago Daily Law Bulletin on the previous day, Dudek again failed to appear. Shred Pax informed the court of the status of the case as well as of the dismissal of Dudek’s action for want of prosecution one year earlier. Shred Pax then moved for a default judgment on its counterclaim, asserting that Dudek had not filed any responsive pleadings thereto.

On April 12, 1988, at a hearing on Shred Pax’ motion for default judgment on its counterclaim, Dudek’s counsel appeared. According to his affidavit, he first discovered at this proceeding that Dudek’s action had been dismissed for want of prosecution. In response to Shred Pax’ counterclaim, Dudek was allowed to file an answer, and what it called “affirmative defenses and/or setoffs.”

On September 12, 1988, the court granted Dudek’s motion for substitution of attorneys. Also on September 12, Dudek filed a section 2 — 1401 petition to vacate the court’s March 25, 1987, dismissal of Dudek’s complaint for want of prosecution. In response, Shred Pax moved to dismiss Dudek’s petition. At a November 22, 1988, hearing, the court granted Dudek’s section 2 — 1401 petition.

Shred Pax appealed, contending that the court abused its discretion in granting Dudek’s section 2 — 1401 petition. On appeal, Dudek claimed unfairness if it was required to defend against Shred Pax’ counterclaim without the possibility of affirmative relief; however, it would not be unfair to require Shred Pax to defend against Dudek’s claim at the risk of a money judgment in favor of Dudek, because a full-blown trial on the merits would take place by virtue of Dudek’s affirmative defenses and its claim for setoffs. This court reversed and remanded. Although the only issue on appeal determined by this court in Dudek I was whether the section 2 — 1401 petition should have been allowed, in doing so we observed that “[i]f [Dudek] is correct [concerning the need for a full-blown trial on the merits], its claim for set-offs may exceed the amount sought by the counterclaim, which, if proven, would provide for all the affirmative relief it may be entitled to receive. See Ill. Rev. Stat. 1987, ch. 110, par. 2 — 608; Ill. Ann. Stat., ch. 110, par. 2 — 608, Historical and Practice Notes, at 181-84 (Smith-Hurd 1983).” Dudek I, 196 Ill. App. 3d at 726.

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Cite This Page — Counsel Stack

Bluebook (online)
626 N.E.2d 1204, 254 Ill. App. 3d 862, 193 Ill. Dec. 653, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dudek-inc-v-shred-pax-corp-illappct-1993.