K4 Enterprises, Inc. v. Grater, Inc.

914 N.E.2d 617, 394 Ill. App. 3d 307, 333 Ill. Dec. 198, 2009 Ill. App. LEXIS 783
CourtAppellate Court of Illinois
DecidedAugust 19, 2009
Docket1-07-2792
StatusPublished
Cited by26 cases

This text of 914 N.E.2d 617 (K4 Enterprises, Inc. v. Grater, Inc.) 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
K4 Enterprises, Inc. v. Grater, Inc., 914 N.E.2d 617, 394 Ill. App. 3d 307, 333 Ill. Dec. 198, 2009 Ill. App. LEXIS 783 (Ill. Ct. App. 2009).

Opinion

JUSTICE QUINN

delivered the opinion of the court:

Defendants Grater, Inc., and James T. Zavacki appeal from an order of the circuit court requiring them to comply with terms of an oral settlement agreement that the court found they entered into with plaintiffs K4 Enterprises, Inc., and MS Produce, Inc., and from an order granting plaintiffs’ motion to accelerate payment and entering judgment in the amount of $2,800,000, the full amount due under that agreement. On appeal, defendants contend that the parties did not have an oral settlement agreement because there was no meeting of the minds, and alternatively, that if the parties did have a settlement agreement, the trial court erred in ordering that payments due under that agreement be accelerated. Defendants also contend that the trial court erred in granting plaintiffs’ motion to enforce the settlement agreement without first holding an evidentiary hearing and that the trial judge should not have heard the motion to enforce because he was a material witness and had engaged in arbitrary and injudicious conduct during the proceedings. For the reasons set forth below, we affirm the trial court’s order finding that the parties had an oral settlement agreement but vacate its subsequent order accelerating payment.

BACKGROUND

On June 7, 2007, plaintiffs and defendants were engaged in a jury trial 1 in the circuit court of Cook County in the courtroom of Judge William Taylor. On that date, James Kubeck, plaintiffs’ principle, and James Zavacki, owner of Grater, Inc., met with Judge Taylor in his chambers to negotiate an oral settlement agreement. Their respective attorneys were not present. After the settlement negotiations were completed, Judge Taylor reconvened the trial, informed the jury that the matter had been settled, discharged the jurors, and entered an order dismissing the case in its entirety. Neither the parties nor the judge made a written record of the terms of the June 7 oral settlement agreement.

On June 20, 2007, plaintiffs’ counsel sent a letter to Judge Taylor along with a draft of the settlement agreement. In the letter, plaintiffs’ counsel asked the court to continue the status scheduled for June 21, 2007, and stated, “Last week I circulated the enclosed settlement agreement. There has been considerable disagreement as to the terms.” In the letter, plaintiffs’ counsel also requested that “the status quo *** be maintained until these details are worked out and the settlement agreement is signed.”

The case was continued until July 3, 2007, when the plaintiffs made an oral motion to enforce the settlement agreement. Defendants contend that on that date the parties advised the trial court that there was some disagreement regarding the terms of the oral settlement agreement, that the court attempted to mediate a new settlement and that, afterwards, Judge Taylor entered an agreed order as follows:

“This matter coming to be heard on status regarding oral settlement agreement of June 7, 2007, by agreement of the parties who are all present,
It is ordered that Plaintiffs’ motion to enforce settlement is entered and continued to Thursday, September 6, 2007 at 10:30 a.m. In the event Defendants tender $2,400,000 in cash by wire transfer to Johnson & Bell before said date, Plaintiffs will be satisfied and the parties shall execute mutual releases and stipulations to dismiss all cases with prejudice.”

No report of the July 3 proceedings was made, and plaintiffs contend that there is nothing in the record to support defendants’ assertion that the parties entered into a new settlement agreement on that date. Instead, plaintiffs maintain that the July 3 order simply continued the hearing on the enforcement of the June 7, 2007, settlement agreement until September 6, 2007.

On September 5, 2007, plaintiffs filed a motion to enforce the settlement, stating that “Plaintiffs request, due to repeated defiance of Defendants and their attorneys to Your Honor’s brokered settlement agreements and Your Honor’s representations of the consequences if they defaulted, as follows” (emphasis in original):

“Judgment in the amount of $4.3 million dollars (the $2.4 million and the default penalties) for Plaintiffs’ [sic] against all Defendants, jointly and individually; monetary and other sanctions as Your Honor deems just; award of attorneys fees and costs to Plaintiffs, for the June trial, July 3rd appearance, and this hearing; and an Order that Grater, Inc. and James T. Zavacki Jr., jointly and individually, are responsible for settling Castle Cheese, Inc. v. MS Produce, Inc., et al (2- — 04—cv—878 WD Penn) and CVS Foods, Inc. and MD Produce, Inc. v. Whitehall Specialties, Inc. and Grater, Inc. (05 CH 14982).”

On September 10, 2007, defendants filed a motion to substitute counsel. At a status hearing on September 13, 2007, the court asked defendants if they were prepared to proceed on a hearing on the motion to enforce. When substitute counsel said they were not, the court denied their motion to substitute stating, “I will not allow you to delay the case because the motion today is to enforce the settlement. So the motion for substitution is denied.” As part of the September 13 order, the court also entered an order, on its own motion, enjoining defendants from transferring assets until the completion of the hearing on the motion to enforce.

On September 19, 2007, the parties appeared before Judge Taylor on plaintiffs’ motion to enforce the settlement agreement. At that time, defendants presented an emergency petition for substitution of judge. That matter was transferred to Presiding Judge William D. Maddux, who denied the motion and transferred the case back to Judge Taylor.

When Judge Taylor reconvened proceedings later that day, he granted defendants’ new counsel leave to appear and defendants’ motion to vacate the September 13 injunction order. The court then proceeded to plaintiffs’ motion to enforce the settlement. Defense counsel requested leave to respond in writing and to have an evidentiary hearing on the motion and had the following exchange with Judge Taylor:

“THE COURT: I don’t understand the evidentiary hearing because this is a motion to enforce a settlement which was done in chambers in front of me. And while the parties disagree on what the terms were, all I have to do is tell you what the terms were. And while the attorneys wrote up very nice legalese documents and while both sides objected to the extra legalese, the terms are the terms.
DEFENSE COUNSEL: My concern with respect to that, Judge, is your understanding of the terms and the definition, more importantly, of the terms, may not—
THE COURT: It’s a money amount, not a definition. A dollar is a dollar.
DEFENSE COUNSEL: Murphy: With respect to who is paying and how it is paid— *** and certain issues brought up before Your Honor with respect to I don’t know that I can answer that question right now because there are tax consequences of the payment.

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Cite This Page — Counsel Stack

Bluebook (online)
914 N.E.2d 617, 394 Ill. App. 3d 307, 333 Ill. Dec. 198, 2009 Ill. App. LEXIS 783, Counsel Stack Legal Research, https://law.counselstack.com/opinion/k4-enterprises-inc-v-grater-inc-illappct-2009.