NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).
2021 IL App (3d) 190581-U
Order filed April 1, 2021
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
HEARTLAND POLYMERS REALTY, INC., ) Appeal from the Circuit Court an Illinois Corporation, ) of the 10th Judicial Circuit, ) Peoria County, Illinois, Plaintiff-Appellant, ) ) v. ) Appeal No. 3-19-0581 ) Circuit No. 10-L-400 POLYCHEM SERVICES, INC., an Illinois ) Corporation and JOHN HART, Individually, ) ) Honorable Jodi Melinda Hoos, Defendants-Appellees. ) Judge, Presiding.
JUSTICE WRIGHT delivered the judgment of the court. Justice Lytton concurred in the judgment. Justice Holdridge specially concurred.
ORDER
¶1 Held: The trial court erred by excusing defendants-appellees from performing under the promissory note and the guaranty.
¶2 Defendant, Polychem Services, Inc. (defendant-purchaser), its vice president, defendant,
John Hart, and plaintiff Heartland Polymers Realty, Inc. (plaintiff-seller), executed several
agreements related to the sale of a chemical processing plant. Plaintiff-seller filed a lawsuit
against defendant-purchaser and Hart, alleging breaches of the terms of a promissory note and a guaranty. After a bench trial, the trial court entered judgment in favor of defendant-purchaser and
Hart. Plaintiff-seller appeals.
¶3 I. BACKGROUND
¶4 In late 2008, plaintiff-seller agreed to sell a chemical processing plant to defendant-
purchaser. As part of the transaction, plaintiff-seller and defendant-purchaser executed a
promissory note and an agreement regarding the removal and disposal of unusable chemical
materials on the premises. Further, Hart, the vice president of defendant-purchaser, executed a
guaranty to secure defendant-purchaser’s payment of the promissory note. In late 2010, plaintiff-
seller filed a lawsuit in the circuit court of Peoria County, alleging defendant-purchaser and Hart
failed to comply with the terms of the promissory note and the guaranty. Following a bench trial,
the trial court entered judgment in favor of defendant-purchaser and Hart.
¶5 A. The Sale of the Chemical Processing Plant
¶6 On November 4, 2008, Hart, as vice president of defendant-purchaser, executed an
agreement for the purchase of a chemical processing plant (purchase agreement) with plaintiff
seller. Defendant-purchaser agreed to pay $1,350,000 and execute a promissory note in the
amount of $200,000 to pay for the chemical processing plant. Together with the chemical
processing plant, defendant-purchaser agreed to purchase “all the raw materials and usable
chemical located on the premises, being more particularly described on the attached Exhibit
‘C.’ ” (Emphasis added.)
¶7 Defendant-purchaser did “not purchase nor take possession of any unusable chemical or
hazardous substances or waste generated by [plaintiff-seller].” (Emphasis added.) Plaintiff-seller
was to “remain the owner and responsible for *** [the] unusable chemical or hazardous
substances and waste.” The purchase agreement stated, “[t]he terms and conditions [for] the
2 removal and disposal of any such unusable chemical or hazardous substances or waste generated
are contained in the Removal and Disposal Agreement executed contemporaneously with” the
purchase agreement.
¶8 The separate removal and disposal agreement, executed by Hart on behalf of defendant-
purchaser, recognized financing for the sale of the chemical processing plant was contingent on
the removal and disposal of the unusable inventory. 1 The parties agreed it was in their interests
to provide for the removal and disposal of the unusable inventory at the time of the closing.
Therefore, the parties attached, as an exhibit to the removal and disposal agreement, “a Waste
Management Plan *** developed by JAS Environmental, Inc. *** [designating] the methods,
manner and protocol for the removal and disposal of the Unusable Inventory.” After the closing,
plaintiff-seller was required to “engage JAS Environmental, Inc. to perform all of the tasks set
forth in the Waste Management Plan” and to “remain the owner of the Unusable Inventory.”
Defendant-purchaser would, “[a]t no time,” become the owner of the unusable inventory.
¶9 Further, the removal and disposal agreement required that $300,000 be withheld from the
sale proceeds at the closing and placed in plaintiff-seller’s name in escrow at Harris Bank for the
payment of “invoices in connection [with] the work performed by JAS Environmental.” If costs
to remove and dispose of the unusable inventory did not exceed the $300,000 deposited in
escrow, then the remaining funds were required to “be paid to [plaintiff-seller] and *** applied
to the principal due on the *** Promissory Note of $200,000.” If the total cost for the removal
and disposal of the unusable inventory exceeded the amount deposited in escrow, then
defendant-purchaser was required to pay said amounts.
1 A list of unusable inventory was attached as an exhibit to the removal and disposal agreement.
3 ¶ 10 Over one month later, on December 18, 2008, Hart executed the promissory note in the
amount of $200,000, plus 6.5% interest, on behalf of defendant-purchaser. Defendant-purchaser
agreed to pay plaintiff-seller $3,913.23 per month beginning on March 17, 2009, and ending on
March 17, 2014. In the event of a default by defendant-purchaser, the holder of the promissory
note could “declare all unpaid indebtedness *** immediately due and payable.” Defendant-
purchaser would then be obligated to “pay all costs of collection, including a reasonable
attorney’s fee.”
¶ 11 On December 18, 2008, Hart, individually and not as vice president of defendant-
purchaser, executed a guaranty to secure payment of the promissory note. Hart “absolutely,
unconditionally, and irrevocably” guaranteed the following:
“the full and prompt payment of the payments when due and as required
under the terms and conditions of the Promissory Note, whether at stated
maturity, upon acceleration or otherwise, and at all times thereafter, and the
prompt payment of all sums which may now be or may hereafter become due and
owing under the Promissory Note.”
¶ 12 On November 1, 2010, plaintiff-seller sent a notice of default to defendant-purchaser and
Hart, stating defendant-purchaser failed to pay the October 17, 2010, payment on the promissory
note. Plaintiff-seller informed defendant-purchaser and Hart of its intent to declare all unpaid
indebtedness under the promissory note immediately due and payable, unless the default was
cured within 30 days. Also, plaintiff-seller stated it would initiate legal proceedings against
defendant-purchaser and Hart under the purchase agreement, promissory note, and guaranty, if
the default was not cured within 30 days.
4 ¶ 13 B. Plaintiff-Seller’s Lawsuit
¶ 14 On May 17, 2011, plaintiff-seller filed a three-count, first amended complaint against
defendant-purchaser and Hart. Count I alleged a breach of the promissory note by defendant-
purchaser. Plaintiff-seller stated that, despite its November 1, 2010, notice of default of the
promissory note, defendant-purchaser “failed to make the monthly payment due on October 17,
2010.” In addition, plaintiff-seller alleged that defendant-purchaser failed to make the payments
due under the promissory note on November 17, 2010, and December 17, 2010. As a result of
these breaches by defendant-purchaser, plaintiff-seller alleged it was immediately owed
$143,528.55 on the promissory note, interest in the amount of $794.34, and attorney fees.
¶ 15 Count II of the first amended complaint alleged a breach of the guaranty by Hart.
Plaintiff-seller alleged that, despite its November 1, 2010, notice of default of the promissory
note, Hart “failed to make any payment required by his Guaranty.” Plaintiff-seller requested that
Hart pay $143,528.55 on the promissory note, plus interest, and attorney fees. 2 3
¶ 16 On May 18, 2011, defendant-purchaser and Hart filed a joint answer, defense, and
counterclaim to plaintiff-seller’s first amended complaint.4 In their defense, defendant-purchaser
and Hart alleged, under the removal and disposal agreement, plaintiff-seller was required to
remove and dispose of “all material deemed unusable by [defendant-purchaser], whether or [not]
2 Count III of the first amended complaint requested a declaratory judgment against defendant- purchaser. Plaintiff-seller alleged that it was owed all of the escrow funds remaining at Harris Bank after the removal and disposal of the unusable inventory from the chemical processing plant. Plaintiff-seller subsequently depleted the escrow funds to remove additional waste from and remediate other issues at the chemical processing plant. Therefore, plaintiff-seller submits on appeal that count III is moot. 3 At the close of its case in chief, plaintiff-seller moved, without objection, to amend its first amended complaint to “increas[e] the damage amount to $235,852.26.” 4 On April 26, 2019, the trial court, pursuant to a motion filed by defendant-purchaser and Hart, voluntarily dismissed the counterclaim against plaintiff-seller.
5 expressly listed on the Unusable Inventory *** exhibit.” However, despite notice, plaintiff-seller
“failed and refused to remove all of the ‘Unusable Inventory’ from the plant.”
¶ 17 C. Administrative Order from the United States Environmental Protection Agency
¶ 18 On September 27, 2012, the United States Environmental Protection Agency (US EPA)
issued an administrative order to plaintiff-seller and defendant-purchaser, providing “for the
performance of response actions including waste characterization, waste removal and
remediation of any releases of Solid Waste or Hazardous Waste.” In its findings of fact, the US
EPA found as follows:
“[Plaintiff-seller] and [defendant-purchaser] *** entered into a Removal
and Disposal Agreement *** for the removal and off-site disposal of waste
materials left at the Site from [plaintiff-seller’s] operations (described *** as the
‘Unusable Inventory’). Under the Removal and Disposal Agreement, [plaintiff-
seller] and [defendant-purchaser] *** agreed to establish an escrow account at
Harris Bank at the time of closing *** for the sole purpose of coordinating and
ensuring payment for the removal and disposal of the Unusable Inventory ***.
[Plaintiff-seller] hired JAS Environmental, Inc. (JAS), to perform all of the tasks
set forth in a Waste Management Plan developed by JAS *** to carry out the
requirements of the Removal and Disposal Agreement. Funds from the escrow
account were used to remove and dispose of some or all of the Unusable
Inventory pursuant to the Waste Management Plan, and as of September 30, 2010,
$97,902.26 remained in the escrow account at Harris Bank. Solid and/or
Hazardous Waste remained at the Facility following the removal and disposal of
6 some or all of the Unusable Inventory pursuant to the Removal and Disposal
Agreement and Waste Management Plan.”
The administrative order stated that the parties were “jointly and severally responsible for
carrying out all actions required of them” by the administrative order. On March 24, 2017, five
years after the issuance of the administrative order, the US EPA sent a letter to the parties,
finding all work required by the administrative order was complete. The US EPA informed the
parties that the administrative order was terminated and satisfied.
¶ 19 D. Bench Trial
¶ 20 On May 6, 2019, the trial court conducted a bench trial on plaintiff-seller’s first amended
complaint. The trial court received testimony from plaintiff-seller’s president, John Joseph
Balaco, defendant-purchaser’s vice president, John Hart, and JAS Environmental consultant,
Jeffrey Stofferahn. We summarize the contents of the witnesses’ testimony below.
¶ 21 1. John Joseph Balaco—President of Plaintiff-Seller
¶ 22 Balaco testified that he and other investors formed plaintiff-seller in late 2002, after
which the investors purchased the chemical processing plant. The chemical processing plant’s
financial status was “never very strong.” During 2007, plaintiff-seller received violation notices
from the Illinois Environmental Protection Agency (Illinois EPA). These violation notices
related to the operations and labeling of materials at the chemical processing plant.
¶ 23 Around this time, it became obvious to the investors that the business at the chemical
processing plant would not survive. The investors began discussing the terms for a sale of the
chemical processing plant to Chemtech Services, Inc., which was owned by Hart. In January
2008, Balaco, acting on behalf of plaintiff-seller, and Hart, acting on behalf of Chemtech
Services, Inc., finalized a letter of intent to purchase the chemical processing plant. Consistent
7 with the terms of the purchase agreement, defendant-purchaser, as lessee, took possession of the
chemical processing plant in March 2008.
¶ 24 In the summer of 2008, the Illinois EPA visited the site of the chemical processing plant
due to “concern about what was in some of the tanks.” Around this time, a phase I environmental
site assessment raised concerns regarding “the inventory *** and *** what should be done with
it.” This caused Harris Bank to incorporate a funding contingency on the sale of the chemical
processing plant, requiring the removal of unusable inventory from the chemical processing plant
or, at least, a plan financed through escrow for the removal of the unusable inventory.
¶ 25 As part of the removal and disposal agreement, JAS Environmental was hired to remove
the unusable inventory. Balaco believed JAS Environmental began the removal process in late
2008 and completed the removal process in late 2009. After the purported completion of the
removal process in late 2009, plaintiff-seller requested the remaining escrow funds at Harris
Bank. However, plaintiff-seller’s request was denied by Harris Bank. Plaintiff-seller was
informed that defendant-purchaser “identified *** additional materials they want[ed] removed.”
¶ 26 Plaintiff-seller requested that defendant-purchaser provide a list of the additional
materials requiring removal from the chemical processing plant. Plaintiff-seller was “willing to
discuss what plan needed to be developed and whether [plaintiff-seller] would pay for it.”
According to Balaco, defendant-purchaser never submitted the list requested by plaintiff-seller.
¶ 27 In October 2010, defendant-purchaser stopped making payments on the promissory note
executed by the parties and contemplated by the purchase agreement. On November 1, 2010,
Balaco arranged for the notice of default of the promissory note to be sent to defendant-
purchaser and Hart. Following the notice, defendant-purchaser failed to cure the default and no
additional payments were made pursuant to the promissory note and/or the guaranty.
8 ¶ 28 Meanwhile, the Illinois EPA and US EPA made six or seven total visits to the chemical
processing plant between 2008 and 2012. In September 2012, the US EPA identified additional
unusable inventory materials to be removed from the chemical processing plant. As such,
plaintiff-seller “hired a company and funded the removal [of those additional inventory
materials] from the escrow account.” After the removal of these materials and the remediation of
other issues, all remaining escrow funds at Harris Bank were depleted. Balaco stated that the
removal and remediation processes were completed between 2013 and 2015, “but the paperwork
drug on” until the US EPA issued its completion letter on March 24, 2017.
¶ 29 2. John Hart—Vice President of Defendant-Purchaser
¶ 30 John Hart is a mechanical engineer, owner of Chemtech Services, Inc., and minority
shareholder and vice president of defendant-purchaser. Hart stated, “unfortunately, at the time of
the preparation [of the parties’ agreements], *** there were no inventory records indicative of
the magnitude of the waste being stored at the plant.” Similarly, regarding the labeling of
inventory, Hart stated, “[t]he materials in the bulk tanks certainly were not clearly indicated.”
Due to plaintiff-seller’s failure to keep inventory records or properly labeled inventory, the
process of identifying and quantifying the waste materials requiring removal from the chemical
processing plant, before Harris Bank would provide financing, was “made more complicated.”
¶ 31 Hart testified that, after the US EPA became involved in late 2010, defendant-purchaser
was forced to shut down the chemical processing plant for a period of weeks. According to Hart,
during this time, defendant-purchaser lost customers and, “in terms of revenue, *** $500,000 per
year.” While complying with the US EPA’s administrative order, defendant-purchaser estimated
losses totaling “[$]200,000 to $300,000 over a series of years.”
9 ¶ 32 3. Jeffrey Stofferahn—Owner of JAS Environmental, Inc.
¶ 33 Jeffrey Stofferahn is an environmental consultant who owns JAS Environmental, Inc.,
which is the corporation referenced in the parties’ removal and disposal agreement. Stofferahn
developed the parties’ waste management plan in late 2008 and early 2009, then was hired to
implement the final version of that plan at the chemical processing plant. Stofferahn’s task was
to “characteriz[e] waste materials that were identified as being unusable inventory and then
find[] disposal avenues for that material.”
¶ 34 In terms of the removal process, Stofferahn testified, “[t]here were additional materials
that were *** identified *** once the implementation of the plan began.” That is, “there ended
up being a lot more drums than what the original *** poundage inventory *** would have
correlated into.” Periodic updates were provided by Stofferahn to the parties, including of “new
inventory as it was identified” and unusable materials removed from the chemical processing
plant. When asked if the plan was completed, Stofferahn stated, plaintiff-seller indicated “based
on the amount of waste materials *** removed during the course of [the] project[,] *** they felt
their obligations were fulfilled.” Balaco requested a letter stating, “we have removed a volume of
waste that was *** functionally equivalent to the volume represented in the plan.”
¶ 35 E. Judgment of the Trial Court
¶ 36 At the conclusion of the bench trial on May 6, 2019, the trial court took the matter under
advisement. On August 30, 2019, the trial court entered judgment for defendant-purchaser and
Hart. The trial court’s order included a finding that the additional or unidentified waste discussed
during the bench trial was contemplated in the purchase agreement’s broad statement that
“[defendant-purchaser] does not purchase nor take possession of any unusable chemical or
hazardous substances or waste generated by [plaintiff-seller].” (Emphasis added.) Although the
10 removal and disposal agreement separated substances into usable and nonusable inventory, the
trial court found that the property where the chemical processing plant was situated “had a lot of
material on it that could not be packaged *** [as] usable or non-usable.”
¶ 37 The trial court reasoned that, due to the size of the chemical processing plant, the lists of
usable and nonusable inventory “could not possibly have covered everything.” The trial court
noted plaintiff-seller, despite failing to keep business records, owned the chemical processing
plant to begin with and knew or should have known what waste was located on the property. The
trial court concluded that, under the purchase agreement, “[m]aterials not listed as either usable
or non-usable *** simply f[ell] back to ‘waste’ belonging to [plaintiff-seller].” Therefore,
plaintiff-seller owned and was required to dispose of that waste. The trial court did not make
express findings under each count of plaintiff-seller’s first amended complaint.
¶ 38 On September 30, 2019, plaintiff-seller timely appealed the judgment of the trial court.
¶ 39 II. ANALYSIS
¶ 40 This appeal involves a 2010 lawsuit resulting in a final judgment in favor of defendant-
purchaser and Hart following a 2019 bench trial on plaintiff-seller’s first amended complaint.
Essentially, the trial court found that defendant-purchaser and Hart, in light of plaintiff-seller’s
material breach of the purchase agreement and the removal and disposal agreement, were
relieved of all contractual duties to pay the balance of the promissory note.
¶ 41 For a better understanding of the parties’ positions on appeal, we briefly restate the
undisputed facts and procedural history. The parties executed the purchase agreement and the
removal and disposal agreement on November 4, 2008. Thereafter, defendant-purchaser, already
in possession of the chemical processing plant, began periodic payments to plaintiff-seller for the
premises, as required by the purchase agreement and the promissory note that was executed
11 along with Hart’s guaranty on December 18, 2018. However, in October 2010, defendant-
purchaser ceased payments on the promissory note. Despite notice of default of the promissory
note, sent by plaintiff-seller to defendant-purchaser and Hart on November 1, 2010, neither
defendant-purchaser nor Hart resumed payments under the promissory note.
¶ 42 Plaintiff-seller initiated this lawsuit against defendant-purchaser and Hart in December
2010 to enforce and collect the balance due on the promissory note. Plaintiff-seller’s first
amended complaint was filed on May 17, 2011. Defendant-purchaser and Hart defended against
the first amended complaint by filing an affirmative defense and counterclaim for specific
performance and/or damages against plaintiff-seller, alleging plaintiff-seller materially breached
the purchase agreement and the removal and disposal agreement by failing to timely remove all
unusable waste from the chemical processing plant.
¶ 43 On September 27, 2012, the US EPA ordered the parties to remove the unusable waste
from the chemical processing plant, which was presently under the operation of defendant-
purchaser. On March 24, 2017, the US EPA issued a completion letter, finding all cleanup work
at the chemical processing plant was successfully completed. At no time after this date did
defendant-purchaser or Hart resume payments on the promissory note, despite the fact that
defendant-purchaser remained in possession of and continued to operate its business on the
premises. Similarly, defendant purchaser and Hart did not, at any time, seek to rescind or revoke
the parties’ agreements, return possession of the chemical plant to plaintiff-seller, or demand
additional performances by plaintiff-seller under the parties’ agreements.
¶ 44 After the US EPA’s completion letter, issued on March 24, 2017, but before the bench
trial on May 6, 2019, defendant-purchaser and Hart voluntarily dismissed their counterclaim for
specific performance and/or damages attributable to plaintiff-seller’s alleged material breach of
12 the parties’ agreements. Therefore, at the time of the bench trial, the sole issue to be resolved by
the trial court was whether the affirmative defense raised by defendant-purchaser and Hart barred
plaintiff-seller from proving that it substantially complied with the material terms of the parties’
agreements. 5 See Israel v. National Canada Corp., 276 Ill. App. 3d 454, 461 (1995). In other
words, once the counterclaim was voluntarily dismissed, the monetary damages suffered by
defendant-purchaser and Hart, if any, caused by plaintiff-seller’s alleged material breach, was no
longer an issue to be resolved by the trial court.
¶ 45 We acknowledge that there was a period when the chemical processing plant was shut
down for the parties to comply with the US EPA’s administrative order. However, this was
obviously not an unforeseen shut down because defendant-purchaser purchased the chemical
processing plant knowing plaintiff-seller, in collaboration with JAS Environmental, would
engage in a process of removing unusable waste materials from the premises. Regardless, as
alluded to above, the trial court lost the ability to offset any purported damages caused by a work
stoppage once defendant-purchaser and Hart voluntarily dismissed their counterclaim.
¶ 46 Nonetheless, the trial court, without explaining its rationale, relieved defendant-purchaser
and Hart from their duty to pay the balance due and owing on the promissory note, which,
according to plaintiff-seller, totaled $235,852.26. On appeal, plaintiff-seller argues, since its
alleged material breach of the parties’ agreements was undisputedly cured two years before the
bench trial, the trial court erroneously discharged defendant-purchaser and Hart from their
contractual duty to pay this remaining balance for the chemical processing plant. Following our
careful review, we agree with plaintiff-seller that the trial court’s ruling was legally erroneous.
5 We note that a material breach of contract is not a defense that must be affirmatively pled in an answer. See 735 ILCS 5/2-613(d) (West 2010).
13 ¶ 47 In most cases, “the standard of review [after] a bench trial is whether the order or
judgment [wa]s against the manifest weight of the evidence.” Reliable Fire Equipment Co. v.
Arredondo, 2011 IL 111871, ¶ 12; See also International Supply Co. v. Campbell, 391 Ill. App.
3d 439, 447-48 (2009) (our court stating the trial court’s factual findings after a bench trial must
be given deference on appeal, such that a reversal is warranted only if they were against the
manifest weight of the evidence). However, our review focuses on whether the trial court
correctly excused, after a bench trial on plaintiff-seller’s first amended complaint, defendant-
purchaser and Hart’s performance of their contractual duties under the promissory note and the
guaranty. This question is reviewed de novo. See Campbell, 391 Ill. App. 3d at 447-48.
¶ 48 For purposes of an efficient resolution of this appeal, we will assume, arguendo, that
plaintiff-seller materially breached both the purchase agreement and the removal and disposal
agreement by initially failing to remove all unusable waste materials from the chemical
processing plant. Our supreme court has stated, “[u]nder general contract principles, a material
breach of a contract provision by one party may be grounds for releasing the other party from his
contractual obligations.” Mohanty v. St. John Heart Clinic, S.C., 225 Ill. 2d 52, 70 (2006).
(Emphasis added.); See also Galesburg Clinic Ass’n v. West, 302 Ill. App. 3d 1016, 1018 (1999)
(Our court stating, “a breach of a partnership agreement can operate to discharge the duties of a
covenant not to compete where the breach is material.”) (Emphasis added.)
¶ 49 However, the facts of this case are unique. Defendant-purchaser and Hart’s obligations
under the promissory note and the guaranty were not automatically discharged because neither
party sought to walk away from the parties’ agreements. Instead, during the time the parties were
complying with the US EPA’s administrative order, defendant-purchaser was in possession of
and continued its business operations on the premises. This was despite not paying plaintiff-
14 seller for the premises since before October 2010. Again, we emphasize that defendant-purchaser
and Hart did not seek to rescind or revoke the parties’ agreements due to the delay in the removal
of unusable waste materials from the chemical processing plant.
¶ 50 We conclude that once plaintiff-seller’s alleged material breach was cured, defendant-
purchaser and Hart could not be discharged from their duty to pay for the chemical processing
plant. As a result, we hold, based on the procedural posture of this case, the trial court erred by
relieving and discharging defendant-purchaser and Hart from their contractual duties under the
promissory note and the guaranty. See Mohanty, 225 Ill. 2d at 70; Galesburg Clinic, 302 Ill.
App. 3d at 1018; see also Restatement (Second) of Contracts §§ 241-42 (1981). Therefore, we
reverse the trial court’s judgment for defendant-purchaser and Hart and remand the matter for the
trial court to enter judgment in favor of plaintiff-seller for the amount due on the promissory note
plus interest from the date that the US EPA found the alleged material breach was cured,
March 24, 2017. On remand, the trial court is also directed to determine whether defendant-
purchaser and Hart’s failure to comply with the terms of the promissory note and the guaranty
warrant an award of reasonable attorney fees to plaintiff-seller.
¶ 51 III. CONCLUSION
¶ 52 The judgment of the circuit court of Peoria County is reversed and remanded with
directions.
¶ 53 Reversed and remanded with directions.
¶ 54 JUSTICE HOLDRIDGE, specially concurring:
¶ 55 I agree that the trial court erred by excusing the defendant-purchaser from performing
under the promissory note and the guaranty. I therefore join the majority’s judgment. However,
I would have reversed the trial court’s decision on different grounds. In my view, the defendant-
15 purchaser failed to show that the plaintiff-seller’s initial failure to remove certain waste material
from the property was a material breach of the parties’ agreements.
¶ 56 Only a material breach of a contract provision will justify non-performance by the other
party. InsureOne Independent Insurance Agency, LLC v. Hallberg, 2012 IL App (1st) 092385,
¶ 43; Israel v. National Canada Corp., 276 Ill. App. 3d 454, 461 (1995). The test of whether
a breach is “material” is whether it is “so substantial and fundamental as to defeat the objects of
the parties in making the agreement, or whether the failure to perform renders performance of the
rest of the contract different in substance from the original agreement.” InsureOne, 2012 IL App
(1st) 092385, ¶ 43. “The breach must be so material and important to justify the injured party in
regarding the whole transaction at an end.” Id. The issue of whether a material breach of contract
has been committed is a question of fact, and the trial court’s judgment will not be disturbed unless
it is against the manifest weight of the evidence. Mohanty v. St. John Heart Clinic, S.C., 225 Ill.
2d 52, 72 (2006); InsureOne, 2012 IL App (1st) 092385, ¶ 43.
¶ 57 No material breach occurred in this case. Plaintiff-seller’s delay in removing all of the
waste from the property did not defeat the objects of parties, substantively change the nature of
the parties’ mutual performance, or justify the defendant-purchaser in concluding that the
transaction was at an end. Even assuming arguendo that the waste that the plaintiff-seller delayed
in removing was covered by the parties’ agreements (which is not clear), it is undisputed that the
plaintiff-seller removed all chemical waste as of March 24, 2017, thereby curing any alleged
breach. From the time the defendant-purchaser ceased making payments on the promissory note
in October 2010 through the time that the plaintiff-seller removed all of the waste in March 2017,
the defendant-purchaser continued to possess and operate the plant. During that period, the
defendant-purchaser did not seek to rescind or revoke the agreements, return the premises to the
16 plaintiff-seller, or seek monetary damages from the plaintiff-seller for any alleged material breach.
Clearly, the defendant-purchaser did not consider the agreement between the parties to have ended.
To the contrary, it acted as if the agreements were in full force and effect and retained the principal
benefits of the bargain without seeking any legal recourse against the plaintiff-seller. Nevertheless,
the defendant-purchaser stopped making payments on the promissory note and did not resume
making payments even after the plaintiff-seller had cured any alleged breach by removing all of
the waste. Accordingly, the trial court’s implicit finding 6 that the plaintiff-seller had materially
breached the agreements was against the manifest weight of the evidence.
6 The trial court did not expressly find that the plaintiff-seller had committed a material breach of the agreements. However, a trial court need not make any findings of fact, and the failure of the trial court to make a specific finding is not grounds for reversal; in reviewing a judgment, the appellate court will assume that all issues and controverted facts were found in favor of the prevailing party. Golf Trust of America, L.P. v. Soat, 355 Ill. App. 3d 333, 337 (2005). The question before the appellate court is not whether the trial court made a specific finding, but whether its final determination is correct. Id.