Kirsch v. MNJ Technologies Direct, Inc.

2021 IL App (1st) 200953-U

• Court: Appellate Court of Illinois
• Decided: September 3, 2021
• Docket: 1-20-0953
• Status: Unpublished

Opinion

2021 IL App (1st) 200953-U

FIFTH DIVISION September 3, 2021

No. 1-20-0953

NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT

LAWRENCE S. KIRSCH, ) Appeal from the Circuit Court of ) Cook County. Plaintiff-Appellant, ) ) v. ) No. 15 L 10068 ) MNJ TECHNOLOGIES DIRECT, INC., an Illinois ) Corporation; PAUL KOZAK; and SUSAN KOZAK, ) ) Honorable Michael F. Otto, Defendants-Appellees. ) Judge, presiding.

PRESIDING JUSTICE DELORT delivered the judgment of the court. Justices Cunningham and Rochford concurred in the judgment.

ORDER

¶1 Held: The circuit court properly granted defendants’ motion for summary judgment. Plaintiff did not raise a genuine issue of material fact as to whether the parties ever formed a binding oral contract. Plaintiff also did not raise a genuine issue of material fact as to the existence of an unambiguous promise. The circuit court did not err in denying plaintiff’s motion to reconsider. We affirm.

¶2 Plaintiff Lawrence S. Kirsch filed this lawsuit against his former employer MNJ

Technologies Direct, Inc. (“MNJ”), MNJ’s president and sole shareholder Susan Kozak, and 1-20-0953

MNJ’s Chief Operating Officer Paul Kozak (collectively, “the defendants”.) 1 In his three-count

complaint, Kirsch pleaded claims for breach of written contract, breach of oral contract, and

promissory estoppel. After the court dismissed Kirsch’s breach of written contract count, the

parties filed cross-motions for summary judgment on the remaining counts. The circuit court

granted the defendants’ motion, and Kirsch now appeals that order. We affirm.

¶3 BACKGROUND

¶4 In his complaint, Kirsch alleged the following: In 2005, Paul orally offered to sell Kirsch

a 30% stake in MNJ for $850,000. Kirsch accepted the offer. Paul then hired Kirsch to serve as

Executive Vice President of MNJ. Kirsch paid $100,000 toward the purchase price in 2008.

Kirsch presented a draft written option contract in 2014. In January 2015, Kirsch met with Paul,

Susan, MNJ’s accountant, and Paul’s personal physician. Susan signed the draft agreement and

Kirsch “believed” that a signed contract existed. About a week later, MNJ terminated Kirsch’s

employment without cause. Since that time, the defendants have refused to honor the sale

agreement.

¶5 Kirsch’s complaint included three counts: (1) breach of written contract, (2) breach of

oral contract, and (3) promissory estoppel. The circuit court granted the defendants’ motion to

dismiss count I (breach of written contract.) The defendants then answered the complaint, filed

several affirmative defenses, and filed two counterclaims. In their first counterclaim, they alleged

that Kirsch breached a separate oral contract related to a $250,000 personal loan. In their second

counterclaim, they alleged that Kirsch breached his fiduciary duty to MNJ by spending work

time on a separate business venture.

1 Susan and Paul Kozak are wife and husband. Because they share the same last name, we refer to them by their first names.

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¶6 After engaging in discovery, the parties filed cross-motions for partial summary

judgment. In their motion, the defendants attacked Kirsch’s complaint on the grounds that Kirsch

failed to produce evidence of either an enforceable oral contract or an enforceable promise. The

defendants also argued that the alleged oral contract violated the statute of frauds.

¶7 In support of their motion, the defendants attached affidavits, draft agreements, and the

transcripts of deposition testimony with related exhibits. Among the evidence relied upon by the

defendants was Kirsch’s own deposition testimony that he did not pay the full purchase price

before MNJ terminated his employment. Kirsch also admitted that certain terms—such as the

timing of payment and whether Kirsch could maintain an ownership interest if he ever left the

company—were not part of the original agreement and continued to be negotiated long after the

alleged contract formation.

¶8 The defendants also produced deposition testimony and documents showing that the

parties continued to negotiate the details of the sale for some nine years after the alleged

formation of the oral agreement. Those documents included a draft written agreement

transmitted by Kirsch on August 2, 2005. In that draft, the proposed purchase price was

$800,000, rather than the $850,000 figure allegedly agreed to earlier. The $800,000 was to be

paid in five annual installments of $160,000. The defendants also presented copies of tax

documents and deposition testimony from one of MNJ’s accountants to show that the $100,000

paid by Kirsch was not performance on the sale agreement but was part of a scheme to inflate

Kirsch’s income when applying for a bank loan. Finally, the defendants pointed to deposition

testimony that Susan’s approval, as sole shareholder, would have been required for any sale and

testimony that she never gave such approval.

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¶9 This evidence, the defendants argued, established (1) that there was never a “meeting of

the minds” as to the essential terms of the purported sale contract and (2) that Kirsch did not

perform his obligation—paying the full $850,000—under the alleged contract. The defendants

contended that no genuine issue of material fact remained as to these issues, and that, therefore,

they were entitled to judgment as a matter of law.

¶ 10 As to the count for promissory estoppel, the defendants argued that the alleged promise—

to sell 30% of MNJ to Kirsch—was conditional in nature, and therefore unable to support a

claim for promissory estoppel. Moreover, the defendants argued that the same evidence that

showed there was never a meeting of the minds in the oral contract count showed that there was

never an unambiguous promise on which Kirsch could have reasonably relied. Consequently, the

defendants claimed, they were entitled to judgment on that count as well.

¶ 11 The circuit court entered summary judgment in the defendants’ favor on both remaining

counts of the complaint. The court found that there was no genuine issue of material fact as to

the existence of an oral contract. The court held that the evidence showed conclusively that the

parties never reached a meeting of the minds as to the essential terms of the alleged contract. In

particular, the court found that the August 2005 draft, which included a sale price $50,000 lower

than the alleged original offer, served as a counteroffer. Because a counteroffer amounts to a

rejection of the original offer, the circuit court held that the alleged oral contract had never been

formed. Evidence of subsequent negotiations and draft agreements further supported the court’s

conclusion that the parties never reached a meeting of the minds.

¶ 12 Moreover, the circuit court held that Kirsch’s alleged performance was insufficient to

support his cause of action. At most, the evidence showed that Kirsch paid $100,000 toward the

purchase of a stake in MNJ. No evidence before the circuit court evinced any effort by Kirsch to

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tender the full purchase price until nine years after the alleged formation of the contract and one

week after Kirsch was fired from MNJ. The court noted that Kirsch presented no evidence that

the defendants prevented Kirsch from performing his alleged obligation. Relying on Kirsch’s

own testimony that the parties had agreed that he could not remain a stakeholder if and when his

employment with MNJ came to an end, the court held that even if Kirsch did have a valid option

to purchase a stake in MNJ, that option must have expired before he tendered his full

performance.

¶ 13 As to the count for promissory estoppel, the circuit court found that there was no

unambiguous promise by the defendants. The court held the parties’ negotiations, “and in fact the

need to memorialize the agreement at all, [made] apparent that there was never an

‘unambiguous’ promise on which Kirsch could reasonably rely.”

¶ 14 The circuit court also entered judgment in Kirsch’s favor on one of the two

counterclaims. The defendants then voluntarily dismissed the remaining counterclaim. Kirsch

filed a motion for reconsideration of the summary judgment order, which the circuit court

denied. This appeal follows.

¶ 15 ANALYSIS

¶ 16 This court has an independent duty to consider its jurisdiction. Archer Daniels Midland

Co. v. Barth, 103 Ill. 2d 536, 539 (1984). In his jurisdictional statement, Kirsch proposes that this

court has jurisdiction to review the summary judgment order under Illinois Supreme Court Rule

304(a) (eff. Mar. 8, 2016). Presumably, he invokes this rule because the order he is appealing

granted final judgment as to some, but not all the remaining claims in the case. See id.

(prescribing the conditions under which “an appeal may be taken from a final judgment as to one

or more but fewer than all of the *** claims” in a single action). However, Kirsch filed his notice

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of appeal after the circuit court granted the defendants’ motion to voluntarily dismiss the final

counterclaim. At that point, there were no longer any pending claims. Therefore, Rule 304(a) is

inapplicable; our jurisdiction derives from Illinois Supreme Court Rule 303 (eff. July 1, 2017),

governing appeals from final judgments.

¶ 17 On appeal, Kirsch contends that the defendants were not entitled to summary judgment

on either count II (oral contract) or count III (promissory estoppel) of his complaint. He argues

that he raised genuine issues of material fact as to the existence of an oral contract, his partial

performance on that contract, and the existence of an unambiguous promise. The primary thrust

of Kirsch’s brief is that the circuit court did not apply the proper standard when ruling on the

defendants’ motion for summary judgment. He contends that rather than construing the evidence

strictly against the defendants, the court disregarded his well-pleaded facts and deferred to the

defendants’ interpretation of the evidence. We review the circuit court’s decision on a motion for

summary judgment de novo. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill.

2d 90, 102 (1992).

¶ 18 Summary judgment is appropriate “if the pleadings, depositions, and admissions on file,

together with the affidavits, if any, show that there is no genuine issue as to any material fact and

that the moving party is entitled to a judgment as a matter of law.” 735 ILCS 5/2-1005(c) (West

2020). Summary judgment should only be granted when the moving party’s right to judgment is

“clear and free from doubt.” Outboard Marine Corp., 154 Ill. 2d at 102. To determine whether

there is a genuine issue of material fact, we construe the pleadings, depositions, admissions, and

affidavits strictly against the moving party and liberally in favor of the opponent. Id. at 131-32.

Although we must view all the evidence in the light most favorable to Kirsch, we need not ignore

evidence or inferences that are unfavorable to him. Yacko v. Curtis, 339 Ill. App. 3d 299, 302

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(2003). Moreover, “summary judgment requires the responding party to come forward with the

evidence that it has—it is the put up or shut up moment in a lawsuit.” (Internal quotation marks

omitted.) Parkway Bank & Trust Co. v. Korzen, 2013 IL App (1st) 130380, ¶ 14. “The opposing

party may not stand on his or her pleadings in order to create a genuine issue of material fact.”

Id. ¶ 49 (citing Fitzpatrick v. Human Rights Commission, 267 Ill. App. 3d 386, 391 (1994)).

¶ 19 The essential elements of a breach of contract are: (1) the existence of a valid and

enforceable contract; (2) performance by the plaintiff, (3) breach of the contract by the

defendant, and (4) resultant injury to the plaintiff. Coghlan v. Beck, 2013 IL App (1st) 120891,

¶ 27. A defendant is entitled to summary judgment if the plaintiff fails to raise a genuine issue of

material fact as to any of these elements. Williams, 228 Ill. 2d at 417.

¶ 20 The circuit court found, and we agree, that Kirsch failed to raise a genuine issue of

material fact as to the existence of a valid and enforceable oral contract. The defendants

presented uncontradicted evidence that there was never a finalized agreement. That evidence

included the sworn testimony of Paul, Susan, and MNJ’s accountants. The evidence also

included multiple draft agreements written by or on behalf of Kirsch. Of particular importance is

the fact that Kirsch’s 2005 draft contract included a proposed sale price of $800,000, some

$50,000 lower than the alleged offer. This evidence shows that the parties had not, by the time of

the alleged oral contract formation, reached an agreement as to the material terms of the sale. See

Kellner v. Bartman, 250 Ill. App. 3d 1030, 1036 (1993) (identifying price as a material term of a

contract). If a contract is missing a material term, no enforceable contract is created. A.S. & W.

Club of Waukegan, Illinois v. Drobnick, 26 Ill. 2d 521, 525 (1962).

¶ 21 Kirsch argues that the $800,000 figure was merely a “clerical” or “typographical” error.

Because the circuit court was required to construe the evidence strictly against the defendants

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(see Outboard Marine Corp., 154 Ill. 2d at 131-32), Kirsch argues that the court should have

credited his “typographical error” explanation and found that there was a genuine issue of

material fact as to the formation of an oral contract. He also argues that he pleaded in his—

unverified—complaint that the material terms of the sale agreement remained consistent from the

time of the first offer.

¶ 22 The defendants argue credibly that the $800,000 figure could not have been a mere

typographical error because the proposed schedule of payments also amounted to $800,000,

rather than $850,000. More importantly, Kirsch presented no evidence in support of his

“typographical error” theory. In the face of evidence that the parties never reached a meeting of

the minds, Kirsch could not simply rest on his allegations to establish a genuine issue of material

fact. See Fitzpatrick, 267 Ill. App. 3d at 391 (“If the party supplies sworn facts which warrant

judgment in its favor as a matter of law, the opponent *** may not rest on her pleadings to create

a genuine issue of fact.”). The only evidence before the circuit court showed that the parties

continued to negotiate, even as to essential terms, after the alleged formation of the contract. The

circuit court did not err, therefore, in concluding that there existed no genuine issue of material

fact as to the existence of a valid and enforceable contract. Without a valid and enforceable

contract, the defendants were entitled to judgment as a matter of law. Coghlan, 2013 IL App

(1st) 120891, ¶ 27 (existence of contract is essential to claim for breach of contract).

¶ 23 Kirsch also argues that he established a genuine issue of material fact as to whether he

met his burden to show that he performed on the alleged contract. He contends that the $100,000

payment to MNJ in 2008 was adequate evidence of partial performance to meet his burden. He

argues that the $100,000 was a payment toward the purchase of a stake in MNJ. The defendants

claim that it was an unrelated effort to change Kirsch’s apparent income. This disputed fact

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alone, Kirsch contends, is sufficient to preclude summary judgment. Further, Kirsch argues that

there is a genuine issue of material fact as to whether the defendants prevented him from

performing on the contract by, among other things, firing him before he could tender the full

purchase price and then rejecting his post-firing tender.

¶ 24 We note, however, that both the import of the $100,000 check and the question of

prevention go only to the element of Kirsch’s performance. The circuit court found that that there

was never a binding oral contract and that Kirsch did not meet his burden on the element of

performance. Kirsch had the burden to plead and prove both the existence of a valid and

enforceable contract and his own performance. Coghlan, 2013 IL App (1st) 120891, ¶ 27. The

court’s judgment, therefore, included two independent bases for granting summary judgment.

See Williams, 228 Ill. 2d at 417 (“If the plaintiff fails to establish any element of the cause of

action, summary judgment for the defendant is proper.”). Having affirmed on the ground that

there was never an enforceable contract, we need not address whether a genuine issue of material

fact existed as to whether Kirsch’s performance was partial, prevented, or nonexistent. See

Harlin v. Sears Roebuck & Co., 369 Ill. App. 3d 27, 31-32 (2006) (“this court may affirm a trial

court’s grant of summary judgment on any basis apparent in the record”).

¶ 25 The circuit court also properly found that the defendants were entitled to judgment on

Kirsch’s claim for promissory estoppel. “To establish a claim based on promissory estoppel,

plaintiff must allege and prove that (1) defendants made an unambiguous promise to plaintiff,

(2) plaintiff relied on such promise, (3) plaintiff’s reliance was expected and foreseeable by

defendants, and (4) plaintiff relied on the promise to its detriment.” Quake Construction, Inc. v.

American Airlines, Inc., 141 Ill. 2d 281, 309-10 (1990).

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¶ 26 Kirsch contends that he raised a genuine issue of material fact as to whether the

defendants made an unambiguous promise that he would be able to purchase a 30% stake in

MNJ for $850,000. The same flaws with the oral contract claim also plague this claim. The

record evidence shows that the parties had not reached an agreement as to the terms of the

proposed sale, even as to the price. Years of negotiations—including negotiations as to the

proposed sale price—and multiple draft agreements with varying terms show that there was no

unambiguous promise. See, e.g., Leekha v. Wentcher, 224 Ill. App. 3d 342, 351-52 (1991).

Without an unambiguous promise, Kirsch’s claim for promissory estoppel must fail.

¶ 27 Finally, Kirsch argues that the circuit court erred in denying his motion to reconsider.

Motions for reconsideration either bring to the court’s attention (1) newly discovered evidence,

(2) changes in the law, or (3) errors in the court’s application of the law. Evanston Insurance.

Co. v. Riseborough, 2014 IL 114271, ¶ 36. We review the circuit court’s denial of a motion to

reconsider under a de novo standard if the motion alleged error in the court’s application of the

law. O’Shield v. Lakeside Bank, 335 Ill. App. 3d 834, 838 (2002). Kirsch’s motion to reconsider

alleged that the court erred in its application of the law in granting summary judgment on his

claims of oral contract and promissory estoppel. We have already affirmed the circuit court’s

application of the law in ruling on the defendants’ summary judgment motion. For the same

reasons, we affirm the circuit court’s ruling on Kirsch’s motion to reconsider.

¶ 28 CONCLUSION

¶ 29 The circuit court did not err in denying Kirsch’s motion for reconsideration or granting

summary judgment on his claims for breach of oral contract and promissory estoppel.

Accordingly, we affirm the judgment of the circuit court.

¶ 30 Affirmed.