Rico Industries, Inc. v. TLC Group, Inc.

2018 IL App (1st) 172279
CourtAppellate Court of Illinois
DecidedMay 17, 2019
Docket1-17-2279
StatusPublished
Cited by8 cases

This text of 2018 IL App (1st) 172279 (Rico Industries, Inc. v. TLC Group, 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
Rico Industries, Inc. v. TLC Group, Inc., 2018 IL App (1st) 172279 (Ill. Ct. App. 2019).

Opinion

Digitally signed by Reporter of Decisions Reason: I attest to Illinois Official Reports the accuracy and integrity of this document Appellate Court Date: 2019.04.16 13:35:30 -05'00'

Rico Industries, Inc. v. TLC Group, Inc., 2018 IL App (1st) 172279

Appellate Court RICO INDUSTRIES, INC., Plaintiff and Counterdefendant-Appellee, Caption v. TLC GROUP, INC., Defendant and Counterplaintiff-Appellant.

District & No. First District, Fourth Division Docket No. 1-17-2279

Filed December 27, 2018

Decision Under Appeal from the Circuit Court of Cook County, No. 12-CH-35979; the Review Hon. Margaret Ann Brennan, Judge, presiding.

Judgment Affirmed.

Counsel on Alan E. Sohn, of Law Offices of Alan E. Sohn Chtrd., of Chicago, for Appeal appellant.

Gary I. Blackman and Christina E. Lutz, of Levenfeld Pearlstein, LLC, of Chicago, for appellee.

Panel JUSTICE GORDON delivered the judgment of the court, with opinion. Justices Reyes and Burke concurred in the judgment and opinion. OPINION

¶1 The instant appeal arises from an agreement between plaintiff, Rico Industries, Inc., and defendant, TLC Group, Inc., in which defendant was to be the exclusive sales representative of plaintiff’s products sold to Walmart. Plaintiff later sought to terminate the agreement, which contained a provision providing that it was only terminable upon the mutual consent of the parties, so plaintiff filed a complaint for declaratory judgment seeking a declaration that the agreement was terminable at will because it was a contract of indefinite duration. In return, defendant filed a number of counterclaims, alleging that it had not been paid all of the commissions to which it was entitled. Initially, the trial court granted defendant’s motion for judgment on the pleadings pursuant to section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2012)), finding that the clause requiring a mutual agreement to terminate the contract was enforceable. However, the trial court granted plaintiff’s motion to certify the question for our review, and on appeal, we found that the contract was terminable at will because it was a contract of indefinite duration. Rico Industries, Inc. v. TLC Group, Inc., 2014 IL App (1st) 131522, ¶ 35. Accordingly, we reversed the trial court’s grant of judgment on the pleadings and remanded for further proceedings. After remand, defendant amended its counterclaims several times; the trial court dismissed the majority of the counts and granted summary judgment on the two that survived dismissal. On appeal, defendant challenges (1) the trial court’s grant of summary judgment on two counts of defendant’s second amended counterclaim, (2) the trial court’s dismissal of six counts of its amended counterclaims, and (3) several of the trial court’s evidentiary rulings. For the reasons that follow, we affirm.

¶2 BACKGROUND ¶3 On September 24, 2012, plaintiff filed a complaint for declaratory judgment, alleging that plaintiff was in the business of manufacturing and distributing gift and novelty products to retail markets and that, on December 17, 2007, plaintiff and defendant entered into a written sales commission agreement whereby defendant would serve as plaintiff’s sales representative with respect to certain products in Walmart stores. 1 The complaint alleged that plaintiff desired to terminate the agreement but that the agreement contained a provision providing that the agreement was terminable only upon the written consent of both parties. Accordingly, in count I of the complaint, plaintiff sought a declaratory judgment that such a clause was unenforceable as against public policy and that the agreement was terminable at will. In count II of the complaint, plaintiff alleged that there was a dispute as to whether defendant was owed commissions for sales of certain products to Walmart, and plaintiff sought resolution of that dispute.2 ¶4 Attached to the complaint was a copy of the agreement, the entirety of which comprised approximately two-thirds of a page. As relevant to the instant appeal, the agreement provided the following with respect to commissions: “When Products are sold to Wal-Mart (including store level purchases) or a purchase order is received by [plaintiff] from Wal-Mart, a commission is earned 1 The complaint was amended twice, most recently on January 7, 2013. 2 On appeal, neither count of the complaint is at issue; the only issues concern defendant’s counterclaims.

-2- (Commission). Commissions shall be calculated by multiplying the flat rate of twelve per cent (12%) times the net sales. [Plaintiff] shall pay Commissions no later than the 20th of the month following the day the Commission was earned.” ¶5 On January 16, 2013, defendant filed a motion to dismiss count I of the second amended complaint or, in the alternative, for judgment on the pleadings with respect to that count. On the same day, defendant filed an answer to count II of the second amended complaint and a five-count counterclaim, in which defendant raised claims for (1) an accounting; (2) breach of contract based on plaintiff’s alleged failure to pay commissions; (3) violation of the Arkansas sales representative statute (Arkansas Act) (Ark. Code Ann. § 4-70-301 et seq. (West 2012)); (4) in the alternative, violation of the Illinois Sales Representative Act (Illinois Act) (820 ILCS 120/0.01 et seq. (West 2012)); and (5) in the alternative, quantum meruit. All counts of the counterclaim were based on allegations that plaintiff had failed to pay commissions after it sought to terminate the agreement and on allegations that plaintiff had underpaid defendant commissions owed on prior sales. ¶6 On April 4, 2013, the trial court granted defendant’s motion for partial judgment on the pleadings, finding that the termination provision was not unenforceable as against public policy. Plaintiff requested the trial court to certify the question for interlocutory appeal, and on May 1, 2013, the trial court entered an order doing so. On June 6, 2013, we granted plaintiff’s petition for leave to appeal, and on February 7, 2014, we found that the termination provision was unenforceable as against public policy and, accordingly, reversed the grant of defendant’s motion for judgment on the pleadings and remanded the case to the trial court. Rico Industries, Inc., 2014 IL App (1st) 131522, ¶¶ 35-36. ¶7 On April 2, 2014, plaintiff filed a motion to dismiss all counts of defendant’s counterclaim pursuant to section 2-615 of the Code, and on July 17, 2014, the trial court granted the motion without prejudice. On August 14, 2014, defendant filed an amended counterclaim, and on September 25, 2014, plaintiff filed a motion to dismiss the amended counterclaim pursuant to section 2-615 of the Code. On March 17, 2015, the trial court granted the motion to dismiss and gave defendant leave to replead its counterclaim. On the same day, the trial court entered an order transferring the case from the chancery division to the law division because only contract claims for money damages remained. ¶8 On April 28, 2015, defendant filed its second amended counterclaim, in which it stated seven causes of action. Count I was for violation of the Arkansas Act (Ark. Code Ann. § 4-70-301 et seq. (West 2012)), alleging that defendant was an Arkansas corporation and that all in-person communications between the parties occurred in Arkansas and all meetings and orders with respect to Walmart occurred in Arkansas and claiming the parties were subject to the Arkansas Act.

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Bluebook (online)
2018 IL App (1st) 172279, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rico-industries-inc-v-tlc-group-inc-illappct-2019.