2020 IL App (1st) 191960-U Third Division March 10, 2021 No. 1-19-1960
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). ______________________________________________________________________________
IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ______________________________________________________________________________
KATHERINE MORSBACH, ) Appeal from the ) Circuit Court of Plaintiff-Appellee, ) Cook County. ) v. ) No. 14 L 11499 ) MATTHEW J. EISLER, ) Honorable ) Jerry Esrig, Judge, presiding. Defendant-Appellant. ) ______________________________________________________________________________
JUSTICE ELLIS delivered the judgment of the court. Presiding Justice Howse and Justice McBride concurred in the judgment.
ORDER
¶1 Held: Affirmed. Circuit court properly ruled that plaintiff did not anticipatorily repudiate amended settlement agreement.
¶2 Defendant Matthew Eisler appeals from an order of the circuit court that enforced, and
found Eisler in breach of, an amended settlement agreement between Eisler and plaintiff
Katherine Morsbach. Eisler claims that Morsbach anticipatorily repudiated the amended
settlement agreement and, as a result, Eisler was justified in discontinuing his payments under
that settlement.
¶3 We find no basis to conclude that Morsbach anticipatorily repudiated this settlement
agreement and thus affirm the trial court’s judgment. 1-19-1960
¶4 BACKGROUND
¶5 The facts underlying this lawsuit are complicated, and the post-suit settlement that
spawns this appeal more convoluted still. We will try to cut through some of the fat and present
only the facts that are pertinent to this appeal.
¶6 I. Pre-Litigation History
¶7 In the winter of 2006, Hans Morsbach, Katherine’s husband, owned property located at
2610 North Halsted Street in Chicago. On November 20, 2006, Hans agreed to lease the property
to an entity called Corner Pocket Corp. Corner Pocket intended to use the leased premises to
operate a Notre Dame themed bar.
¶8 “In order to induce” Hans to enter into the lease agreement, two of Corner Pocket’s
officers, Michael Klauer and Eisler, and its corporate parent, a company named Victory Liquors,
LLC, tendered a personal guaranty to Hans. The guaranty stated that Klauer and Eisler agreed
“jointly and severally” to “pay and perform, as the primary obligor, all liabilities, obligations and
duties imposed upon [Corner Pocket]” under the terms of the lease agreement.
¶9 In May 2011, Hans died. The 2610 North Halsted Street property passed to Katherine,
who became its sole owner. (Given the death of Hans, leaving Katherine as the sole plaintiff
here, from here on out we will refer to her by her last name, Morsbach, just as we refer to
defendant as Eisler.)
¶ 10 To make a long story short(er), Corner Pocket ceased operations in June 2011 and was
over $95,000 in arrears on rent, interest, fees and the like to Morsbach. Corner Pocket tried to
sell its business to a third-party and use the proceeds to pay its debt to Morsbach. In exchange,
Corner Pocket, Klauer, and Victory Liquors entered into an Agreement and Confession of
-2- 1-19-1960
Judgment with Morsbach for $95,209.75, plus interest and amounts for “rents coming due after
the date of this Agreement.”
¶ 11 Ultimately, however, Corner Pocket was unable to procure a buyer for itself. And neither
Klauer, Victory Liquors, nor Corner Pocket paid any of the amount due under the Agreement
and Confession of Judgment. By November 1, 2014, the amount due under the Agreement and
Confession of Judgment had ballooned to $311,184.07, which included amounts for interest and
late charges.
¶ 12 II. This Lawsuit and Settlement
¶ 13 In November 2014, Morsbach filed two lawsuits. One was directed at the confessors of
judgment (Klauer, Corner Pocket, and Victory Liquors) and is not relevant here. The second was
the lawsuit at issue here, which Morsbach filed against Eisler to enforce the limited guaranty he
signed. Morsbach sought $117,600 in damages against Eisler.
¶ 14 In June 2016, Eisler and Morsbach filed cross-motions for summary judgment. On
September 8, 2016, the circuit court denied Eisler’s motion and granted Morsbach summary
judgment on the issue of liability. The court found a question of fact on the issue of damages,
namely Eisler’s claim that Morsbach failed to mitigate her damages.
¶ 15 That September, Morsbach and Eisler reached a purported settlement agreement, which
we will refer to as the “Original Settlement Agreement.” The Original Settlement Agreement
gave Eisler one of two payment options at his election—(i) pay $130,000 over thirteen monthly
installments of $10,000 or (ii) pay $144,000 over twenty-four monthly installments of $6,000.
He was required to irrevocably elect one of the two options by a date certain—September 15,
2017. If he did not make an election by that date, Morsbach could elect for Eisler, and Eisler
would be bound to that election.
-3- 1-19-1960
¶ 16 The parties did not agree, however, on two items. One was the monetary sanction in the
event of a default. Morsbach wanted, in the event of Eisler’s default, to be immediately awarded
the original amount to which she believed she was entitled, plus interest: $173,870. Eisler, on the
other hand, wanted the default to require him to immediately pay all remaining unpaid amounts
due under the settlement terms. The parties also disagreed on the amount of security interest
Eisler would have to provide for the settlement. We will call these disputed terms, as do the
parties, the “default provisions.”
¶ 17 Given the disagreement over the default provisions, Eisler never executed the Original
Settlement Agreement. Nevertheless, in light of the parties’ representations (we lack a
transcript), the circuit court dismissed the case pursuant to settlement.
¶ 18 The date of September 15, 2017 came and went without Eisler electing either of the
payment provisions. But Eisler persuaded Morsbach to agree to a different payment schedule that
called for Eisler to pay her $159,000 over 24 months, with the first 12 monthly payments of
$2,250 and the last twelve payments in monthly increments of $11,000. We will refer to this
agreement as the “Amended Settlement Agreement.”
¶ 19 III. First Motion to Enforce Settlement Agreement
¶ 20 In February 2018, Morsbach filed a motion to enforce the Original Settlement
Agreement. In that motion, Morsbach acknowledged that Eisler “never executed” that agreement
and noted that Eisler failed to elect a payment plan by September 15, 2017, instead “request[ing]
a modification to the payment schedule.” But he never signed that Amended Settlement
Agreement, so it was unenforceable. Thus, Morsbach said, she asked the court to enforce “the
terms of the [Original] Settlement Agreement including finding Eisler in default and entering
judgment in favor of Morsbach and against Eisler” for $173,870.
-4- 1-19-1960
¶ 21 Eisler responded with two points. First, as Morsbach acknowledged, he never signed the
Original Settlement Agreement, given the disagreement over the default provisions. Second, as
Morsbach also had referenced, the parties had modified the Original Settlement Agreement
during the period of September and October 2017. Eisler claimed he was honoring the Amended
Settlement Agreement, though he acknowledged that had not signed that agreement, either,
given the continuing dispute over the default provisions.
¶ 22 The circuit court denied Morsbach’s motion to enforce the Original Settlement
Agreement. For one thing, the court noted, both Morsbach and Eisler agreed that they had
modified the payment terms, that Eisler was current on those payments, and that Morsbach was
accepting those payments. Thus, Morsbach had not identified any default by Eisler.
¶ 23 The court also denied Morsbach’s alternative relief to vacate the dismissal of the case and
reinstate it. The court did so for two reasons. One, because Morsbach had been accepting
payments from Eisler, notwithstanding their disagreement on the default provisions and Eisler’s
failure to execute the agreement, “Morsbach cannot now claim that there is no agreement.” The
court reasoned that the failure to agree on the default provision “does not mean that they had no
enforceable settlement agreement.” The court cited case law for the proposition that a contract
may be enforceable even if it fails to provide for every collateral matter or possible future
contingency that might arise. See Lankton-Ziegle-Terry & Associates, Inc. v. Griffin, 156 Ill.
App. 3d 765, 766 (1987).
¶ 24 And the second reason for denying the alternative request to vacate the dismissal order
was that “Morsbach is not entitled to have the dismissal vacated and the case reinstated because
she has not filed a proper petition under section 2-1401 of the Illinois Code of Civil Procedure.”
See 735 ILCS 5/2-1401 (West 2016).
-5- 1-19-1960
¶ 25 IV. Motion to Clarify and Section 2-1401 Petition to Vacate Dismissal
¶ 26 Morsbach then filed two motions. One, the section 2-1401 petition to vacate the
settlement that the circuit court had mentioned. The other, a motion to clarify.
¶ 27 In the motion to clarify, Morsbach asked the court to “clarify” that the terms of the
Original Settlement Agreement governed, which in her view included everything except the
disputed default provisions. Morsbach also asked the court to order Eisler to sign that agreement,
minus those two disputed provisions.
¶ 28 In the 2-1401 petition she simultaneously filed, Morsbach asked the court to vacate its
September 2016 order dismissing her case against Eisler based on settlement. Morsbach
acknowledged both the Original Settlement Agreement and the Amended Settlement Agreement
but emphasized that Eisler had “refused, and continues to refuse, to execute either the [Original
Settlement Agreement] or [Amended Settlement Agreement] ***.” She argued that these
unexecuted agreements, which by their terms (24 monthly payments) could not be completed
within a year, were barred by the Statute of Frauds. See 740 ILCS 80/1 (West 2016).
Referencing her motion to clarify, which sought to clarify the court’s understanding of the terms
of the agreement, Morsbach wrote: “If the Court concludes there has been no meeting of the
minds and no agreement, then plaintiff requests that this Court vacate the dismissal [order] and
set the matter for prove-up.”
¶ 29 On August 14, 2018, Eisler responded to both motions, stipulating to the reinstatement of
the lawsuit and arguing that this stipulation rendered the motion to clarify moot.
¶ 30 V. Morsbach’s Motion for Summary Judgment
¶ 31 On the assumption that the court would vacate the dismissal order and reinstate the case,
Morsbach filed a motion for summary judgment as to damages. In that motion, Morsbach alleged
-6- 1-19-1960
that from November 1, 2017 to the end of August 2018, Eisler had paid her a total of $22,500 in
ten monthly installments of $2,250. Morsbach calculated her damages at $175,927. Morsbach
again acknowledged that “[i]n October 2017, the parties orally agreed to a modification of the
payment provision of the initial settlement agreement,” but when Morsbach presented Eisler with
a written memorialization of that agreement, Eisler again refused to execute it.
¶ 32 On September 20, 2018, faced with this flurry of motion practice, the court did several
things by order. First, it denied the motion to clarify. Second, the court entered and continued the
section 2-1401 petition and motion for summary judgment. Third, the trial court, apparently told
by Morsbach that a second motion to enforce was forthcoming, gave her a deadline to file that
second motion to enforce and gave Eisler time “to file his response to the 2-1401 petition &
motion to enforce.”
¶ 33 VI. Second Motion to Enforce Settlement Agreement
¶ 34 On October 3, 2018, Morsbach filed the promised second motion to enforce. Morsbach
claimed the Amended Settlement Agreement was a legal nullity because the Original Settlement
Agreement contained a modification clause specifying that modifications had to be signed and in
writing, and Eisler had refused to sign the Amended Settlement Agreement.
¶ 35 Morsbach further argued that Eisler’s refusal to sign the Original Settlement Agreement,
due to the parties’ inability to agree to the default provisions, could not operate to invalidate the
Original Settlement Agreement because the agreement contained a provision stating: “The
provisions of this Agreement are severable, and no provision shall be affected by the invalidity
of any other provision.” Morsbach thus concluded that the modified payment term contained in
the Amended Settlement Agreement was unenforceable.
-7- 1-19-1960
¶ 36 Morsbach further contended that, because defendant never made an election under the
Original Settlement Agreement, she had exercised her right to elect and chose option (a), which
required Eisler to pay Morsbach $130,000 in thirteen equal monthly installments. Morsbach
asked that the court enforce the Original Settlement Agreement, find Eisler in default, and enter
judgment in her favor for $175,927.
¶ 37 After this filing by Morsbach in October 2018, Eisler ceased making payments under the
Amended Settlement Agreement. He made no payments beginning November 2018.
¶ 38 On November 13, 2018, Eisler filed a 2-619 motion to dismiss the section 2-1401 petition
and a response to her second motion to enforce. In that filing, Eisler maintained that the Original
Settlement Agreement was unenforceable as a matter of law under the Statute of Frauds, because
the agreement could not be performed within one year.
¶ 39 On December 21, 2018, Morsbach filed a reply in support of her Motion to Enforce.
Morsbach argued that the Statute of Frauds did not apply to invalidate the Original Settlement
Agreement because: (1) Morsbach performed her obligations by voluntarily dismissing her suit
against Eisler; (2) the parties had admitted to the terms of the agreement before the court; (3)
Eisler admitted entering into the agreement; and (4) Eisler was estopped from asserting the
statute of frauds.
¶ 40 On February 15, 2019, the court held a hearing on Morsbach’s second motion to enforce.
The record does not contain a transcript of the hearing. The court granted Morsbach’s motion in
a written order stating:
“(1) That Morsbach’s Motion to Enforce is Granted. The Court finding that the
Statute of Frauds is inapplicable for the reasons set forth on the record which is incorporated
herein by reference, including that Morsbach fully performed her obligations, the terms of the
-8- 1-19-1960
agreement were presented to the Court orally and in papers, Eisler waived the statute of
frauds as a defense, and Eisler is estopped from asserting the statute of frauds; and
(2) The Defendant, Eisler, is ordered to pay to Morsbach Forty-one thousand seven
hundred fifty dollars ($41,750.00) within (7) days hereof, on or before February 22, 2019,
and is required to make all further payments required by the Amended Settlement Agreement
& Release.”
¶ 41 On February 22, 2019, Eisler filed a motion to reconsider. In that motion, Eisler argued
that Morsbach anticipatorily repudiated the Amended Settlement Agreement by filing two
motions to enforce the Original Settlement Agreement.
¶ 42 On March 26, 2019, the court entered a written order denying Eisler’s motion to
reconsider and granting Morsbach’s Motion for Judgment. The order read:
“(1) The motion to reconsider is denied; court finds it has jurisdiction and there is
no repudiation of the amended settlement agreement;
(2) Judgment is entered against Matthew J. Eisler, and in favor of Morsbach E.
Morsbach, in the amount of $159,000.00 minus those amounts previously paid of
$27,000.00, for a total of $132,000.00, plus an award of interest in accordance with
paragraph 2(B) of the amended settlement, in the amount of $19,755.18, for a grand total
judgment of $151,755.19.”
¶ 43 On April 5, 2019, Morsbach filed a fee petition, to which Eisler responded. On August
27, 2019, the court granted the petition for $12,812.61. This appeal followed.
¶ 44 ANALYSIS
¶ 45 On appeal, Eisler claims the circuit court erred by granting the second motion to enforce.
He claims that the court should not have enforced the Amended Settlement Agreement because
-9- 1-19-1960
Morsbach anticipatorily repudiated that agreement by continuing to litigate the case in favor of
the Original Settlement Agreement—and by continuing to litigate, period, which defeated the
point of the Amended Settlement Agreement, to secure “peace” and forgo litigation.
¶ 46 I
¶ 47 We must address a couple of issues before we reach the merits. They concern two
attempts by Morsbach to essentially deny substantive review of the issue raised by Eisler on
appeal. They are interrelated in that they both concern, to some extent, the lack of a supporting
record, but they deserve separate attention.
¶ 48 First, the parties disagree on the standard of review. Morsbach, the appellee, says that our
review of the court’s ruling is subject to a highly deferential manifest-weight standard, because
the court below heard evidence. See Kelly v. Orrico, 2014 IL App (2d) 130002, ¶ 27. Eisler says
our review is de novo, as no such evidentiary hearing was held, and the court ruled strictly on the
papers. See City of Chicago v. Ramirez, 366 Ill. App. 3d 935, 946 (2006) (motion to enforce
settlement is akin to motion for summary judgment, subject to de novo review if decision is
“made on the motion pleadings and attachments, without holding an evidentiary hearing”).
¶ 49 We asked the parties to elaborate on their disagreement over the existence or non-
existence of an “evidentiary hearing.” Counsel for Morsbach said the trial court asked questions
of the lawyers (who were also affiants to affidavits attached to the papers) and questioned them
not only on the submitted papers but more generally on the facts of the case. But the lawyers
agree that no questions were asked under oath, as would typically be the case of fact witnesses.
¶ 50 We appreciate that the parties had differing understandings of the definition of an
“evidentiary hearing.” In our view, absent live, sworn testimony, any statements made about the
case would fall under the rubric of oral argument and not on fact testimony. Thus, it would seem
- 10 - 1-19-1960
that no “evidentiary hearing” occurred as we understand that phrase. But we will not pursue the
matter further, because it will ultimately make no difference, for two reasons.
¶ 51 One, the specific argument Eisler is making is a purely legal one. He claims that, by
filing her flurry of motions arguing against the enforceability of the Amended Settlement
Agreement, Morsbach was violating the whole purpose of that agreement—to secure peace from
litigation. He considered those motions a “repudiation” of the Amended Settlement Agreement,
and that is why he stopped making payments pursuant to that agreement in November 2018.
¶ 52 Nobody disputes that he stopped paying in November 2018. And the motions Morsbach
filed are all in the record. With no disputed questions of fact, all that is left is for us to apply the
law to those facts. So our review is de novo. See Truman L. Flatt & Cons Co. v. Schupf, 271 Ill.
App. 3d 983, 986 (1995) (anticipatory repudiation is question of law if facts undisputed).
¶ 53 The second reason we need not further consider what happened at these hearings is that
our result would be the same under either the manifest-weight or de novo standard of review.
¶ 54 For those same reasons, we will leave aside Morsbach’s emphatic attempts to deny
review of Eisler’s argument altogether, because transcripts are lacking in the record. See Webster
v. Hartman, 195 Ill. 2d 426, 433–34 (2001) (absent transcript of proceedings, court could not
review whether trial court’s factual finding that settlement occurred was manifest error); Foutch
v. O’Bryant, 99 Ill. 2d 389, 393-94 (1984) (absent transcript, court could not review denial of
motion to vacate for abuse of discretion).
¶ 55 Again, regardless of whether an “evidentiary hearing” occurred as we define it, we can
review Eisler’s purely legal argument without a transcript. True, we would prefer to know the
able and experienced trial judge’s thoughts when he ultimately made his legal ruling on Eisler’s
anticipatory-repudiation argument. But our review of that decision is plenary; we perform the
- 11 - 1-19-1960
same function on appeal as the trial court; we owe no deference to its decision; we make our
decision independent of the trial court’s reasoning. The absence of a transcript does not preclude
review. See Fields v. Schaumburg Firefighters’ Pension Bd., 383 Ill. App. 3d 209, 223 (2008)
(“Even though the order on appeal does not disclose the court’s specific reasoning for resolving
the cross-motions for summary judgment ***, and we were not given a transcript of the hearing
from which we might discern the court’s reasoning, we proceed without hesitation because the
entry of summary judgment is to be reviewed on a de novo basis.”); Gonnella Baking Co. v.
Clara’s Pasta di Casa, Ltd., 337 Ill. App. 3d 385, 388 (2003) (“Because we are not required to
defer to the trial court’s reasoning on de novo review, the transcripts of the hearings on the
motion to dismiss are unnecessary.”). 1
¶ 56 II
¶ 57 To the merits. Eisler says that, in her legal filings, in which she repeatedly argued for the
enforceability of the Original Settlement Agreement, Morsbach anticipatorily repudiated the
Amended Settlement Agreement, destroying the very purpose of the amended agreement—to put
an end to litigation.
¶ 58 “Anticipatory repudiation of a contract arises through ‘a manifestation by one party * * *
of an intent not to perform its contractual duty when the time comes for it to do so even if the
other party has rendered full and complete performance.’ ” In re County Treasurer & ex officio
County Collector of Kane County, Illinois, 2018 IL App (2d) 170418, ¶ 39 (quoting Tower
Investors, LLC v. 111 East Chestnut Consultants, Inc., 371 Ill. App. 3d 1019, 1031 (2007)). “The
1 Morsbach also made a forfeiture argument that counsel now seeks to withdraw. Morsbach had argued that a particular document was absent from the record but now acknowledges that the document was not missing. We accept counsel’s representation that the error was inadvertent.
- 12 - 1-19-1960
expression of the intent not to perform must be ‘definite and unequivocal.’ ” Id. (quoting In re
Marriage of Olsen, 124 Ill. 2d 19, 24 (1988)).
¶ 59 That is an exceedingly high bar to clear. “Anticipatory breach is not a remedy to be taken
lightly.” Id. at 25. As our supreme court explained in Olsen:
“The failure of the breaching party must be a total one which defeats or renders
unattainable the object of the contract. [Citation.] That intention must be a definite and
unequivocal manifestation that he will not render the promised performance when the
time fixed for it in the contract arrives. [Citation.] Doubtful and indefinite statements
that performance may or may not take place are not enough to constitute anticipatory
repudiation.” Id. at 24.
¶ 60 Eisler points to the fact that, at various times in the post-dismissal litigation, Morsbach
sought to enforce the Original Settlement Agreement and argued that the Amended Settlement
Agreement was unenforceable. That, he says, shows that Morsbach had repudiated the Amended
Settlement Agreement itself and the very purpose of it—to end litigation, not continue it.
¶ 61 We should begin by reviewing the positions Morsbach took in her filings. Originally, of
course, she sued Eisler over his personal guaranty and moved for summary judgment. She was
granted summary judgment on liability but not on damages, the court finding a question of fact
remaining on the issue of mitigation of damages. So her expedited path was blocked.
¶ 62 She settled, or tried to settle, with Eisler, giving him two different options for a payment
schedule—this was the Original Settlement Agreement. Eisler wouldn’t sign because of their
disagreement over the default provisions. And Eisler then asked for a third, different payment
schedule that contained much lower monthly payments on the front end ($2,250) and higher ones
on the back end ($11,000). This was the Amended Settlement Agreement, though it was never
- 13 - 1-19-1960
signed, either. Presumably under the theory that something is better than nothing, Morsbach
started accepting these payments.
¶ 63 She never denied that she was accepting those payments. When she filed her first motion
to enforce—to enforce the Original Settlement Agreement, that is—Morsbach plainly laid out
that she and Eisler “agreed to a modified payment schedule which was incorporated into an
Amended Settlement Agreement and Release, a copy of which is attached hereto as Exhibit C.”
She likewise noted, as with the Original Settlement Agreement, that “Eisler has refused to
execute the Amended Settlement Agreement and Release.”
¶ 64 We won’t presume to know the thinking of Morsbach or her counsel, but it seems clear
enough that the problem was that Eisler wouldn’t sign any settlement agreement, and she was of
the mind that to be enforceable, it had to be a signed writing. And given her choice, she
obviously preferred the Original Settlement Agreement.
¶ 65 In the alternative, she argued, the trial court should find that no settlement occurred and
vacate the previous dismissal of the lawsuit that was based on the (unsuccessful) settlement.
¶ 66 Eisler, in response, clung to the Amended Settlement Agreement; he said it was
enforceable and he was complying with it.
¶ 67 In reply, Morsbach expressed confusion, if not dismay, over Eisler’s position. The
Original Settlement Agreement required that any amendment be in a signed writing, and Eisler
hadn’t signed the Amended Settlement Agreement, either. By way of example, Morsbach wrote
in that reply:
“So which is it? Was there an original agreement? Was it modified? *** But if
there was no enforceable contract to begin with, what are they modifying? Or are the
parties simply continuing negotiating the terms of an original agreement? Defendant
- 14 - 1-19-1960
asserts that the parties ‘agreed to a modified payment schedule.’ [Citation.] This begs the
question, how do you modify a term of an agreement that doesn’t exist?”
¶ 68 She summarized as follows:
“Ultimately, this Court must decide the following questions: Did the parties reach
a settlement agreement as memorialized in the 2016 agreement? If the answer is no, then
there is no agreement and the Court should reinstate the case and set the matter for
prove[-]up as to Plaintiff's damages as summary judgment on liability was previously
granted in favor of Plaintiff. If the answer is yes, then was the agreement modified in
writing signed by the parties as required by section 15 of the 2016 agreement? The
obvious, and only answer to that is no—Eisler admits he refused to sign the Amended
Settlement Agreement. This leaves the Court with two options: first, either Eisler is in
default of his obligations under the 2016 agreement and judgment should be entered
against him; or second, there is no agreement and the matter should be reinstated and set
for prove-up.”
¶ 69 The trial court ultimately ruled that, “[b]ecause Morsbach has not proved, or even offered
admissible evidence, that either of the proposed settlement documents represents an agreement
reached by the parties, the court will not enforce either the Original Agreement or the Amended
Agreement.” (Emphasis added.) Instead, the trial court ruled that an enforceable oral agreement
existed only insofar as the parties agreed to the monthly payment schedule currently in place—
Eisler paying and Morsbach accepting—which to that point, Eisler had not breached. Thus, the
first motion to enforce was denied.
- 15 - 1-19-1960
¶ 70 The trial court also denied the request to vacate the dismissal based on settlement, for two
reasons. First, the existence of an enforceable oral contract as described above. And second,
because Morsbach had not filed a section 2-1401 petition to vacate.
¶ 71 So Morsbach took the judge’s cue and filed a section 2-1401 petition to vacate, along
with a motion to “clarify” the trial court’s ruling. In her motion to clarify, she took another shot
at breathing life into the Original Settlement Agreement, asking the court to “clarify” that the
original terms governed, minus the disputed default provisions. (Sounds a lot more like a motion
to reconsider than a “clarification,” but that is beside the point.)
¶ 72 The section 2-1401 petition was basically another way of trying the same thing.
Specifically referencing the motion to clarify, Morsbach argued that, if the Original Settlement
Agreement governed, so be it, but if not, then no settlement agreement existed, and the dismissal
of the lawsuit should be vacated, and the lawsuit reinstated. Morsbach noted there that she “has
been more than accommodating to Eisler’s requests with regard to payment terms, only to be
rebuffed by Eisler in his unreasonable refusal to execute the Release and Settlement Agreement
and be bound thereby.”
¶ 73 To both the motion to clarify and the section 2-1401 petition, Eisler answered with all of
two paragraphs:
“1. Eisler stipulates to the reinstatement of this action for the purpose of
scheduling a hearing on Morsbach’s recoverable damages under the Limited Guaranty
executed by Eisler on November 20, 2016 ***.
2. In view of the foregoing, Morsbach’s request for clarification as to the Court’s
order dated July 6, 2018 is moot.”
- 16 - 1-19-1960
¶ 74 Before a ruling on either of these motions, Morsbach moved for summary judgment on
the issue of damages. That motion obviously presupposed that the lawsuit would be reinstated,
something to which Eisler had stipulated (see above paragraph) but on which the trial court had
not yet ruled.
¶ 75 In the interim was the trial court’s housecleaning order, entering and continuing various
motions and setting briefing schedules. Though Eisler had already filed that two-paragraph
response to the section 2-1401 petition, the court allowed Eisler to file a second, substantive
response to the section 2-1401 petition. It is likewise clear that, at that hearing, Morsbach
indicated she would file another (second) motion to enforce, because the court gave her a
deadline for doing so and set a schedule for Eisler to respond to it.
¶ 76 And then we reach the second motion to enforce, which was styled as being “made in the
alternative to” her section 2-1401 petition. There, Morsbach again argued that, if any enforceable
agreement existed, it was the Original Amended Agreement, as any amendment to that
agreement would require a signed writing.
¶ 77 That second motion to enforce was filed on October 3, 2018.
¶ 78 And to listen to Eisler, that was the last straw; he stopped making payments in November
2018. He says he did so because the whole point of the Amended Settlement Agreement was to
have peace—to end litigation—and yet Morsbach persisted in litigating and claiming that the
Original Settlement Agreement, or otherwise no settlement agreement, governed. By violating
the very purpose of the Amended Settlement agreement—peace from litigation—Morsbach
anticipatorily breached it.
¶ 79 We do not know why Eisler truly stopped making payments. But if he did so, as he
claims, based on anticipatory repudiation, he was wrong to have done so. Morsbach’s filings
- 17 - 1-19-1960
were at times redundant and contradictory, but they came nowhere close to constituting a
repudiation of the Amended Settlement Agreement.
¶ 80 For starters, we should note that the state of affairs between the two parties was less than
clear and straightforward. We have two potential written settlement agreements, neither of them
signed, the amended unsigned agreement spawned from the original unsigned one, rendering the
amended one in violation of a term of the original one that required written, signed
amendments—but then again, if the original one wasn’t signed, it wasn’t enforceable, so maybe
that signed-amendment requirement wasn’t, either, leading to the question of whether the
unsigned amended agreement could be an enforceable amendment of an agreement that, itself,
was not enforceable—
¶ 81 We will take a breath and stop there. Convoluted is an understatement.
¶ 82 And when this quagmire first arrived in court on the first motion to enforce, we saw no
less than three different views on the matter. Morsbach argued that the Original Settlement
Agreement controlled; Eisler said the Amended Settlement Agreement controlled; and the trial
court found that neither controlled (“the court will not enforce either the Original Agreement or
the Amended Agreement.” (Emphasis added.)). Instead, the trial court apparently carved out only
the modified payment schedule, which both sides were performing (Eisler paying, Morsbach
accepting) and found that payment plan to be an enforceable oral agreement.
¶ 83 We are not reviewing that ruling, and it may well have been correct, but it is fair to say
that it left Morsbach with some uncertainty (not to mention a lot less than she wanted). When
parties settle a case, they impose all sorts of provisions protecting their downside—default
provisions, confessions of judgment, acceleration clauses, waivers of service of process in the
event of an enforcement action, liquidated damages, and the like—and the oral agreement the
- 18 - 1-19-1960
trial court enforced seemed to contain none of those things. And regardless of who was right,
Morsbach had viable questions that we quoted above concerning the enforceability of various
other provisions. Was the court saying that only the payment schedule itself, and no other parts
of either the Original or Amended Agreement, controlled? If so, that leads to an incredibly
slimmed-down settlement agreement, to say the least.
¶ 84 As noted, an anticipatory repudiation requires a firm and unequivocal position that a
party will not enforce its side of an agreement. When we typically encounter an anticipatory
breach, the terms of the agreement are clear, and one party indicates, by word or deed, in no
uncertain terms, that it will not perform its side of the bargain. See Olsen, 124 Ill. 2d at 24.
¶ 85 That’s not what happened here. For one thing, nothing about this case was clear. More
importantly, Morsbach wasn’t refusing to honor her side of the bargain. She was still trying to
figure out what the bargain was, and she was raising perfectly colorable arguments that the trial
court’s first take on the question was wrong. She did so in what was essentially a motion to
reconsider that she called a motion to “clarify,” and she likewise did so via a section 2-1401
petition to vacate, at the judge’s prompting. All of that was done in an attempt to persuade the
judge of what she believed was the correct outcome—one of two possibly correct outcomes,
actually—either the existence of the Original Settlement Agreement or no agreement at all.
Neither of those options included the existence of an enforceable amended agreement, as Eisler
claimed, but that doesn’t mean she “repudiated” that amended agreement. She just saw things
differently. And she wanted an agreement of some sort in a signed writing, or barring that, the
force of a judge’s order behind it.
¶ 86 Parties seeking a legal ruling on the existence or terms of a settlement agreement are not
“repudiating” that agreement. If that were true, then any litigation over the terms or existence of
- 19 - 1-19-1960
a settlement agreement—which is always prompted by a desire to forgo future litigation—would
be considered an anticipatory breach. That cannot be the law. Eisler cites no case law suggesting
that it is. We cannot imagine that any exists.
¶ 87 A good-faith disagreement over the existence or terms of a settlement agreement,
particularly when the issues are as convoluted as here, should be decided by a judge. If the
litigation is frivolous, the opposing party can seek sanctions. See Ill. S. Ct. R. 137 (eff. Jan. 1,
2018). But to allow that opposing party to call it an “anticipatory repudiation,” thereby relieving
the opposing party of the obligation of all further performance, would turn the law on its head.
¶ 88 Nor is there any indication that Morsbach refused to be bound by the terms of the
Amended Settlement Agreement if the trial court ruled them enforceable. Yes, she initially tried
to convince the court otherwise, as was her right. But look no further than what happened when
the court entered its judgment on the second motion to enforce. Morsbach didn’t get everything
she wanted. She wanted the Original Settlement Agreement enforced, and the court enforced an
amended agreement, which meant less money for her. How did she respond? Repudiation?
Defiance? No. She defended that ruling when Eisler challenged it on a motion to reconsider. And
she is defending it on appeal, too.
¶ 89 We see no basis whatsoever to find that Morsbach anticipatorily repudiated this
settlement agreement.
¶ 90 Any error in the fee petition was not argued by Eisler. His theory presumes that if he wins
the appeal, the fee order falls by the wayside, too. As we affirm the denial of the motion to
reconsider, we have no basis to overturn the order awarding fees, either. We affirm both rulings.
¶ 91 CONCLUSION
¶ 92 The judgment of the circuit court is affirmed.
- 20 - 1-19-1960
¶ 93 Affirmed.
- 21 -