Owens v. McDermott, Will & Emery

736 N.E.2d 145, 316 Ill. App. 3d 340, 249 Ill. Dec. 303, 2000 Ill. App. LEXIS 717
CourtAppellate Court of Illinois
DecidedAugust 29, 2000
Docket1-99-0677
StatusPublished
Cited by154 cases

This text of 736 N.E.2d 145 (Owens v. McDermott, Will & Emery) 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
Owens v. McDermott, Will & Emery, 736 N.E.2d 145, 316 Ill. App. 3d 340, 249 Ill. Dec. 303, 2000 Ill. App. LEXIS 717 (Ill. Ct. App. 2000).

Opinion

JUSTICE McBRIDE

delivered the opinion of the court:

The following appeal arises over the interpretation of a settlement agreement entered into by plaintiff Perry B. Owens (Owens) and Owens’ former company, Utilities Inc. (Utilities). The settlement agreement was reached after a dispute arose between Owens and the senior management and directors of Utilities. Prior to his departure Owens was the chief executive officer of Utilities, a private water utility company he had formed in 1965. In 1988, Owens divorced his wife and was represented in the divorce proceedings by Jon Lind of McDermott, Will and Emery. Lind and McDermott, Will and Emery (collectively defendants) are the defendants in' the instant action. As part of the divorce decree and per defendants’ advice, Owens’ former wife received 32,000 shares of Utilities stock, with the proviso that Owens be allowed the right of first refusal to purchase the stock should his former wife choose to sell it.

In 1996, eight years after his divorce, Owens was forced from his position as chief executive officer of Utilities by the board of directors and the remaining senior management. To avoid litigation over his departure Owens entered into a series of three agreements which outlined his separation from Utilities. Defendants represented Utilities in this matter. One of these agreements was a voting agreement between Owens and Utilities. It is section 4 of the voting agreement that is at issue in the instant appeal. Section 4 of the voting agreement states in pertinent part:

“Acquisition of Securities. During the Restriction Period, except (a) by way of stock dividend, stock split, reorganization, recapitalization, merger, consolidation or other like distributions made available to holders of Company Voting Securities generally or (b) as specifically permitted by the terms of this Agreement, the Separation Agreement or the Supplemental Share Agreement, the Shareholder will not acquire, or agree, offer or seek or propose to acquire, directly or indirectly, alone or in concert with any other Person, by purchase or otherwise, or exercise any attribute of beneficial ownership (as defined on the date hereof in Rule 13d — 3 of the Securities and Exchange Commission under Section 13(d) of the Act) with respect to, any securities of the Company, or direct or indirect rights or options to acquire (through purchase, exchange, conversion or otherwise) any securities of the Company or any of the assets or businesses of the Company. The Shareholder acknowledges and agrees that any securities of the Company acquired by the Shareholder after the date hereof in accordance with this Section 4 will be subject to this Agreement and to the Proxy.”

The agreement was executed on December 23,1996. In April 1997, Owens assigned his right of first refusal to his nephew. Later that year, Owens’ former wife sought to sell her shares of Utilities and spoke with defendants about this matter. Defendants, acting on behalf of Utilities, arranged for the removal of the stock restriction appearing on the stock certificates which were originally placed on all of his ex-wife’s shares at the time of the divorce. These stocks were then sold to someone other than Owens. After learning of the sale of the stock, Owens rescinded the assignment of his right of first refusal to his nephew.

In October 1997, Owens filed a complaint against defendants alleging that they breached their fiduciary duty to him as a former client and tortiously interfered with his right of first refusal to purchase his former wife’s stock when they facilitated the removal of the restrictive stock legend from the stock certificates. In addition to these two counts, Owens’ original complaint contained one count of slander against his former wife. The defendants filed a motion to dismiss Owens’ complaint pursuant to section 2 — 619(a) of the Code of Civil Procedure (735 ILCS 5/2 — 619(a) (West 1996)) and Owens’ former wife filed a motion to dismiss under section 2 — 615 (735 ILCS 5/2— 615 (West 1996)). On May 13, 1998, defendants’ motion to dismiss was granted with respect to counts I and II. Owens’ ex-wife’s count was also dismissed and is not the subject of this appeal. Owens subsequently filed an amended complaint. Thereafter, the trial court dismissed the amended complaint finding that once Owens entered into the voting agreement with Utilities, Owens could no longer exercise his right of first refusal.

On appeal, Owens raises three claims. First, Owens claims that the voting agreement unambiguously gives him the right to purchase his former wife’s shares of stock. Second, Owens alternatively asserts that the voting agreement is ambiguous and thus raised issues of genuine material fact that precluded dismissal of counts I and II of his complaint. Third, Owens contends that the claim for breach of fiduciary duty can survive independently of the trial court’s determination that Owens’ right of first refusal ceased to exist after the signing of the voting agreement.

A motion to dismiss under section 2 — 619 (735 ILCS 5/2 — 619 (West 1996)) “allow[s] for a threshold disposition of questions of law and easily proven issues of fact.” Jo Lou Mio v. Alberto-Culver Co., 306 Ill. App. 3d 822, 824, 715 N.E.2d 309 (1999). Under section 2 — 619 a motion to dismiss should be granted if, after construing the pleadings and supporting documents in the light most favorable to the non-moving party, the trial court finds that no set of facts can be proved upon which relief could be granted. Jo Lou Mio, 306 Ill. App. 3d at 825. This process does not require the trial court to weigh facts or determine credibility and, as a result, this court does not defer to the trial court’s judgment. Jo Lou Mio, 306 Ill. App. 3d at 825. Therefore, upon review we consider whether the existence of a genuine issue of material fact should have precluded the dismissal or, absent such an issue of fact, whether dismissal was proper as a matter of law. Jo Lou Mio, 306 Ill. App. 3d at 825. Like motions to dismiss under section 2 — 615 (735 ILCS 5/2 — 615 (West 1996)), we review motions to dismiss under section 2 — 619 de novo. Lykowski v. Bergman, 299 Ill. App. 3d 157, 164, 700 N.E.2d 1064 (1998).

Although Owens characterizes the first issue as whether he waived his right of first refusal to purchase his former wife’s stock, we believe the question is whether the voting agreement constituted a contract that, once entered into, barred Owens from acquiring any stock in Utilities during the 10-year limitation period set out in that agreement. In construing the provisions of a contract, the court’s primary objective is to give effect to the intent of the parties at the time the contract was made. Pennsylvania Life Insurance Co. v. Pavlick, 265 Ill. App. 3d 526, 529, 637 N.E.2d 1160 (1994). Such intentions are to be ascertained from the language of the contract. Omnitrus Merging Corp. v. Illinois Tool Works, Inc., 256 Ill. App.

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Bluebook (online)
736 N.E.2d 145, 316 Ill. App. 3d 340, 249 Ill. Dec. 303, 2000 Ill. App. LEXIS 717, Counsel Stack Legal Research, https://law.counselstack.com/opinion/owens-v-mcdermott-will-emery-illappct-2000.