Goldenberg v. Bazell

579 N.E.2d 1077, 219 Ill. App. 3d 672, 162 Ill. Dec. 263, 1991 Ill. App. LEXIS 1586
CourtAppellate Court of Illinois
DecidedSeptember 16, 1991
DocketNo. 1—89—2819
StatusPublished
Cited by8 cases

This text of 579 N.E.2d 1077 (Goldenberg v. Bazell) 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
Goldenberg v. Bazell, 579 N.E.2d 1077, 219 Ill. App. 3d 672, 162 Ill. Dec. 263, 1991 Ill. App. LEXIS 1586 (Ill. Ct. App. 1991).

Opinion

PRESIDING JUSTICE MANNING

delivered the opinion of the court:

Following a bench trial in the circuit court of Cook County, the trial court awarded plaintiff Alan Goldenberg $325,000 against defendant Seymour Bazell for breach of an oral contract. Defendant argues on appeal that the trial court: (1) applied the wrong standard of proof in finding the existence of an oral contract; (2) erred in failing to find that plaintiff received full compensation for his services rendered as acknowledged by his endorsement of a check; (3) erred in determining that plaintiff’s in-court testimony was credible when it conflicted with his deposition testimony; (4) erred in refusing to allow defendant to impeach plaintiff with a prior inconsistent statement; and (5) that judgment for plaintiff was against the manifest weight of the evidence.

In 1975, defendant and his partner, Dr. Goldberg, founded Uresil Corporation, a medical supply company. Each partner was a 50% owner of the company, and together they sought to obtain additional capital for its operation. In 1978, defendant and Dr. Goldberg were successful in obtaining funds for the company from Parke-Davis, a subsidiary of Warner-Lambert, Inc. Parke-Davis agreed to fund Uresil’s research and development efforts.

In 1979 Parke-Davis notified Uresil that it was not satisfied with the company’s operations and threatened Uresil that it would place a Parke-Davis employee over the company’s daily operations if there were not improvements. Defendant and Dr. Goldberg then hired plaintiff as the general manager of Uresil to improve its operations.

Plaintiff testified that he joined Uresil on September 30, 1979, at an initial salary of $330 per week. He later received a raise of $50 per week. Plaintiff continued to work for defendant and Dr. Goldberg until November 1980 when Parke-Davis terminated its relationship with Uresil.

After Parke-Davis withdrew its financial support from Uresil, defendant and Dr. Goldberg agreed to forego receiving a salary until another company could be found to either fund their operation or purchase Uresil’s assets. They also asked plaintiff if he would forego receiving a salary. Plaintiff testified that defendant and Goldberg offered him the opportunity to receive 10% of the net proceeds that they would receive from a new business venture. Dr. Goldberg testified that this arrangement was identical to a previous arrangement involving himself and defendant. He and defendant had previously owned a medical products company, and in lieu of a salary, defendant was rewarded with 10% of the net proceeds from sale of that company. He further testified that he and defendant each agreed to pay plaintiff 10% of their net proceeds minus liabilities.

Plaintiff accepted defendant’s offer and he continued to work as the general manager without receiving a salary for 17 additional months.

In 1982, Uresil identified a new business partner, Becton-Dickinson & Company, which entered into an agreement to buy all of Uresil’s assets, but not its liabilities. Becton-Dickinson also agreed to purchase patents from defendant and Dr. Goldberg in five years at a price not less than $3,250,000.

Becton-Dickinson paid $750,000 for the assets of Uresil, and Uresil used $360,000 to satisfy its outstanding liabilities. Plaintiff received 10% of the remaining proceeds, 5% from defendant. Dr. Goldberg then entered into a consulting agreement and defendant entered into an employment agreement with Becton-Dickinson. Plaintiff was also hired as an employee with the newly formed Uresil division of Becton-Dickinson and earned a salary of $29,500 annually.

In September 1986, Becton-Dickinson purchased the patents owned by Uresil in accordance with the 1982 agreement. The purchase price for the patents was increased from $3.25 million to $6.5 million. Dr. Goldberg and defendant each received $3,250,000 from the sale. Dr. Goldberg paid plaintiff $325,000, but defendant failed to pay plaintiff.

At trial Dr. Goldberg testified that in November 1980, he and defendant talked with plaintiff and informed him that if he decided to stay with Uresil he would not receive a salary, but that he would receive a reward of 10% of the proceeds as defendant had been compensated in a previous arrangement. He explained, “whatever our rewards were from the finality of events of our company [plaintiff] would receive 10% of those proceeds.” Dr. Goldberg testified that this offer was never withdrawn and that plaintiff accepted the offer, although it was never reduced to writing.

Barry Goldenberg, plaintiff’s brother, testified that in 1980 he was responsible for identifying a new business partner for Uresil. Golden-berg provided a medical directory with names and addresses of people to contact as potential partners. He further testified that in 1981, defendant offered him employment at Uresil in marketing and sales. Goldenberg stated that defendant told him that he would not be paid a salary but would receive equity in the company. Goldenberg did not accept this offer.

Plaintiff testified that in 1979 defendant offered him a position with Uresil as its general manager. Plaintiff stated that he was offered a salary of $330 each week. He further testified that defendant advised him that he would be rewarded in the future for accepting the position at that salary. Plaintiff explained that defendant told him of Uresil’s operating arrangement with Parke-Davis and that Uresil had budgetary constraints. Plaintiff accepted the offer, and in early 1980, he received a $50-per-week increase in his salary.

In November 1980, plaintiff’s compensation with Uresil changed. He explained that Uresil’s relationship with Parke-Davis terminated and that defendant advised him that Uresil could no longer pay him a salary because of reduced funding. Plaintiff explained that defendant told him that if he stayed with Uresil until a new venture partner were found, he would receive 10% of any new deal. Plaintiff stated that Dr. Goldberg agreed with this offer, then further explained how it would work. He testified that the 10% compensation he would receive would come from any new deal that Uresil entered into, and that both Dr. Goldberg and defendant would each pay 10%. Plaintiff testified that he accepted the offer.

Plaintiff testified that in 1982 defendant and Dr. Goldberg entered into a sale of Uresil to B ecton-Dickinson and that he went back on salary and earned $29,500 each year. Dr. Goldberg and defendant received $750,000 initially and also entered into an arrangement for the sale of their patents to Becton-Diekinson which would occur five years later. Plaintiff stated that at the time that the contract was entered into, the parties agreed to pay a minimum of $3,250,000 for the patents at the time that the deal was closed.

Plaintiff testified that after liabilities were deducted from the $750,000 that defendant and Dr. Goldberg received, there was $390,248 remaining. Out of that amount he received $38,958.28. Plaintiff received 50% of the total amount from defendant and Dr. Goldberg. Defendant paid plaintiff by check which had a memo “For Services to Uresil, Inc., In Full.”

In 1986 plaintiff received a lump sum payment of $25,000 from Becton-Dickinson.

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Bluebook (online)
579 N.E.2d 1077, 219 Ill. App. 3d 672, 162 Ill. Dec. 263, 1991 Ill. App. LEXIS 1586, Counsel Stack Legal Research, https://law.counselstack.com/opinion/goldenberg-v-bazell-illappct-1991.