People Ex Rel. Scott v. Police Hall of Fame, Inc.

376 N.E.2d 665, 60 Ill. App. 3d 331, 17 Ill. Dec. 519, 1978 Ill. App. LEXIS 2655
CourtAppellate Court of Illinois
DecidedApril 26, 1978
Docket77-65
StatusPublished
Cited by18 cases

This text of 376 N.E.2d 665 (People Ex Rel. Scott v. Police Hall of Fame, 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
People Ex Rel. Scott v. Police Hall of Fame, Inc., 376 N.E.2d 665, 60 Ill. App. 3d 331, 17 Ill. Dec. 519, 1978 Ill. App. LEXIS 2655 (Ill. Ct. App. 1978).

Opinion

Mr. JUSTICE McNAMARA

delivered the opinion of the court:

The Attorney General of Illinois brought this action seeking injunctive relief and an accounting from two charitable organizations, their officers, corporate fund raisers, and certain individual shareholders of the fund-raising corporations who had solicited donations for charities in Illinois as part of a nationwide mail campaign. The trial court dismissed the action against the defendant charities and their officers. The fund raisers have appealed from the trial court’s order which enjoined them from future solicitation of funds in Illinois and which required them to pay the State *417,928 in compensatory damages and *150,000 in punitive damages. The charities have appealed from that portion of the order which dismissed their third-party complaint against the fund raisers seeking reimbursement for attorney’s fees incurred in defense of this action.

Police Hall of Fame, Inc. (hereinafter “PHF”), is a Florida not-for-profit corporation whose stated purpose is to provide financial assistance to widows and orphan children of slain enforcement officers, to develop scholarships, and to educate the public concerning police problems. Defendant National Police Officers Association of America (hereinafter NPOA), a PHF affiliate, is a Florida based organization whose membership consists of law enforcement officers in active service.

In 1971, PHF and NPOA contracted with National Emblem Products (not a party to this action) to solicit contributions from the public by mail. The contract provided that contributions mailed to the charities’ bank in Florida were to be divided between National Emblem and the charities. Seventy-five percent was allotted to National Emblem and 25 percent was allotted to the charities. National Emblem conducted campaigns which yielded *180,000 representing total contributions made by approximately 31,000 persons.

In 1972, the executive director of PHF and NPOA, Frank Schira, met with Patrick and Martin Gorman to discuss Helix, Inc., becoming the charities’ new direct mail consultant. Helix’s business included advising charities wishing to solicit funds by mail. Helix develops formats of solicitation and selects lists of names of possible contributors. Helix also oversees rental of lists for the mail campaign. The majority of stock in Helix is owned by Martin and Patrick Gorman who serve as corporate officers and directors.

On October 3,1972, Helix purchased from National Emblem the house list consisting of the names and addresses of persons who had contributed to PHF and NPOA. On November 1, 1972, Helix contracted with the charities to provide direct mailing consulting services. The services would be provided upon advance notice by the charities. Helix would be paid the costs of conducting a national fund-raising and publicity campaign for the charities, Helix being entitled to up to 75 percent of contributions received. If costs exceeded 75 percent, Helix was to absorb cost overages. Helix was allowed to use its own lists of prior contributors in other campaigns and to charge the charities for the lists at public advertised rates. The contract allowed Helix to rent lists from third parties and to collect commissions in such transactions provided that the commissions did not result in additional costs for the charities. The list of persons responding to the campaign was to be the joint property of the charities and Helix.

On January 1,1973, Washington Information Services, Inc. (hereinafter “WIS”) entered into a three-year agreement with the charities to handle the printing and mailing of their literature. WIS is also a Washington, D.C., for-profit corporation and the majority of its stock is owned by Patrick and Martin Gorman. The cost to the charities was not to exceed 18.5 cents per printed package. WIS possessed the sole right to rent, exchange, or otherwise use those names for its own purposes as long as it scheduled mailings so as not to conflict with mailings conducted on behalf of the charities. The charities were given approval rights of all materials prior to printing and mailing. All supplier invoices, including those of WIS, constituted a first claim against the charities’ accounts and payments were due within 10 days of the invoice date.

Pursuant to the contract with WIS, over 800,000 pieces of mail were sent to prospective donors in March and April 1973. “Outside” lists were utilized, using names of contributors to causes other than PHF and NPOA. Beginning in January 1973, all appeal letters sent out under the aegis of NPOA bore the following notation: “Established in 1955.” In March 1973, the description was changed to the following: “Chartered in Illinois, 1955.” Those words appeared on more than one million pieces mailed to prospective donors in 1973. The NPOA which was chartered in Illinois subsequently was dissolved on December 22, 1969.

By April 1973, as a result of disagreements with the fund raisers, the charities postponed a decision regarding additional fund-raising campaigns. The charities retained a Dr. Nichols as a special consultant to act as liaison between the charities and the fund raisers. By letter the charities informed Martin Gorman that the next campaign would be delayed pending resolution of questions which Nichols would present.

On May 1, 1973, WIS informed the charities that forms for approximately three million letters at a cost of *210,000 previously had been ordered. On May 8, 1973, Nichols met in Michigan with representatives of WIS. The parties entered into a new agreement whereby all prior contracts were cancelled. The agreement included a schedule for primary mailings and the postage required thereupon. Some mailings were to be conducted in early May 1973, at a postage cost of *5,440. During the week of May 28, 1973, nearly two million pieces requiring *31,500 in postage were scheduled for mailing. On May 14, Schira issued a check for the earlier mailing. On June 1, 1973, Schira advanced *31,535 for the larger mailing postage. At trial Schira insisted only the mailings conducted prior to April 1973 had been authorized by the charities.

Of the over three million pieces mailed during the May-June 1973 campaign, the vast majority were called “Safety Tips” letters. This type letter first had been mailed to prospective donors in December 1972. Included in the “Tips” letter was the following:

“So a large part of the funds we receive from good, law-abiding citizens like you help us continue this urgent campaign to inform and gain the vitally needed support of more and more Americans.”

Enclosed in the “Tips” letter was a contribution card which stated:

“Here’s my gift * * * to help reach and gain the support of more concerned citizens * * * so you can continue and expand your vital police aid and public information programs.”

In the agreement entered into May 8, 1973, it was provided that all disputes between the parties were subject to arbitration under rules of the American Arbitration Association. In July 1973, pursuant to directions issued by the charities, WIS ceased all mailings. It then demanded payment for bills which had accrued. Thereafter WIS invoked the arbitration clause of the agreement, requesting a determination as to the amount owed.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Jackson v. Callan Publishing, Inc.
826 N.E.2d 413 (Appellate Court of Illinois, 2005)
Hawes v. Luhr Bros., Inc.
816 N.E.2d 345 (Illinois Supreme Court, 2004)
Hawes v. Luhr Brothers, Inc.
Illinois Supreme Court, 2004
Botelho v. Griffin
25 P.3d 689 (Alaska Supreme Court, 2001)
Young v. Hummel
576 N.E.2d 1072 (Appellate Court of Illinois, 1991)
Yates v. Brock
547 N.E.2d 1031 (Appellate Court of Illinois, 1989)
City of Evanston v. Evanston Fire Fighters Ass'n
545 N.E.2d 252 (Appellate Court of Illinois, 1989)
Johnson v. United National Industries, Inc.
466 N.E.2d 1177 (Appellate Court of Illinois, 1984)
People Ex Rel. Hartigan v. National Anti-Drug Coalition
464 N.E.2d 690 (Appellate Court of Illinois, 1984)
Stewart v. EGNEP (Pty) Ltd.
581 F. Supp. 788 (C.D. Illinois, 1983)
People v. Patrick J. Gorman Consultants, Inc.
444 N.E.2d 776 (Appellate Court of Illinois, 1982)
Kemling v. Country Mutual Insurance Co.
437 N.E.2d 1253 (Appellate Court of Illinois, 1982)
Kalalinick v. Knoll
422 N.E.2d 1011 (Appellate Court of Illinois, 1981)
People Ex Rel. Scott v. Gorman
421 N.E.2d 228 (Appellate Court of Illinois, 1981)
Country Mutual Insurance Co. v. Adams
407 N.E.2d 103 (Appellate Court of Illinois, 1980)
In Re Oil Spill By" Amoco Cadiz" Off Coast of France
491 F. Supp. 170 (N.D. Illinois, 1979)
Weilmuenster v. H. H. Hall Construction Co.
390 N.E.2d 579 (Appellate Court of Illinois, 1979)
People Ex Rel. Scott v. Police Hall of Fame, Inc.
387 N.E.2d 856 (Appellate Court of Illinois, 1979)

Cite This Page — Counsel Stack

Bluebook (online)
376 N.E.2d 665, 60 Ill. App. 3d 331, 17 Ill. Dec. 519, 1978 Ill. App. LEXIS 2655, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-ex-rel-scott-v-police-hall-of-fame-inc-illappct-1978.