Sharon Leasing, Inc. v. Phil Terese Transportation, Ltd.

701 N.E.2d 1150, 299 Ill. App. 3d 348, 233 Ill. Dec. 876
CourtAppellate Court of Illinois
DecidedOctober 14, 1998
Docket3-97-0777
StatusPublished
Cited by9 cases

This text of 701 N.E.2d 1150 (Sharon Leasing, Inc. v. Phil Terese Transportation, Ltd.) 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
Sharon Leasing, Inc. v. Phil Terese Transportation, Ltd., 701 N.E.2d 1150, 299 Ill. App. 3d 348, 233 Ill. Dec. 876 (Ill. Ct. App. 1998).

Opinion

JUSTICE THOMAS

delivered the opinion of the court:

Plaintiff filed a complaint against defendants for tortious interference with contract, breach of contract against defendant Phil Terese Transportation, Ltd. (Phil Terese Transportation), breach of contract against the individual defendants under a piercing-the-corporate-veil theory, and common-law and statutory fraud. Following a bench trial, the trial court first held that plaintiff did not have standing to bring its claim against defendants. Stating that its ruling concerning standing might be erroneous, however, the trial court then ruled on the issues raised in plaintiffs complaint. The trial court held that plaintiff had not proved breach of a valid contract or damages, as required to recover on its claim for tortious interference with contract. The trial court further held that Phil Terese Transportation’s corporate veil could be pierced as to defendants Michael Apa and Anthony Apa, but not as to defendant Frank DiLeonardi. Nonetheless, with regard to the breach of contract claims against Phil Terese Transportation and the Apas, the trial court held that plaintiff had not proved its damages. Finally, the trial court held that plaintiff had not proved a cause of action for fraud. The trial court, therefore, entered a verdict in favor of defendants.

Plaintiff now timely appeals the trial court’s finding that plaintiff lacked standing to pursue its claims, that plaintiff had not proved damages on its breach of contract claims, that Phil Terese Transportation’s corporate veil should not be pierced as to Frank DiLeonardi, and that plaintiff had not proved that defendants tortiously interfered with plaintiffs contract. Defendants cross-appeal the trial court’s finding that Phil Terese Transportation’s corporate veil could be pierced as to Michael Apa and Anthony Apa.

The facts giving rise to plaintiffs complaint are as follows. Defendant Frank DiLeonardi was the sole shareholder of AMA Transport, a trucking company incorporated in 1989. DiLeonardi formed AMA Transport from the assets of AMA Warehousing, which DiLeonardi had purchased at a public auction after AMA Warehousing had made an assignment for the benefit of creditors. Codefendants Michael Apa and Anthony Apa had formed AMA Warehousing early in the 1980s. DiLeonardi did not have an ownership interest in AMA Warehousing, and neither of the Apas had an ownership interest in AMA Transport, although they both worked for the company.

On October 26, 1990, plaintiff entered into a five-year contract with AMA Transport for the lease of 25 trucks. Isaac Freeman, one of plaintiff’s sales representatives, testified that although plaintiff’s invoices provided for payment within 21 days, AMA Transport had always paid the invoices in 30 to 45 days. Freeman testified that around the beginning of 1994, AMA Transport began paying its invoices from six to nine weeks behind.

At trial, DiLeonardi testified that in 1994, AMA Transport encountered financial difficulties. It had been treating its truck drivers as independent contractors, but the Illinois Department of Employment Security held that the drivers were employees and assessed a $16,000 fine against the company. DiLeonardi was afraid that the Internal Revenue Service would make a similar finding and also would assess a large fine against the company, so he decided to file for bankruptcy on behalf of AMA Transport. On January 4, 1994, Michael Apa and Anthony Apa formed defendant Phil Terese Transportation, Ltd., which operated from the same address and used the same telephone number as AMA Transport. Thereafter, on May 2, 1994, AMA Transport and Phil Terese Transportation entered into an asset purchase agreement pursuant to which AMA Transport sold its name, its carrying authority and all of its cartage contracts to Phil Terese Transportation for $26,000. AMA Transport, however, never received the $26,000 from Phil Terese Transportation.

Following the asset purchase agreement, AMA Transport continued to operate using plaintiffs trucks. Phil Terese Transportation also began to operate using some of plaintiffs trucks. Freeman testified that, in the first or second quarter of 1994, he thought that AMA Transport was taking over Phil Terese Transportation. In the third quarter of 1994, he learned that Phil Terese Transportation was taking over AMA Transport because he was directed to pick up checks from Anthony Apa instead of Frank DiLeonardi. In addition, the checks said “Phil Terese Transportation,” with the name “AMA Transport” in parentheses. Freeman was told that AMA Transport was going to be switched over to Phil Terese Transportation, and that AMA Transport would eventually cease doing business.

Freeman also testified that on or around July 1, 1994, plaintiff sold some trucks to AMA Transport for $66,000. AMA Transport put $6,000 down and executed a note for the remaining $60,000. DiLeonardi signed the note for AMA Transport, then suggested that the note be put under Phil Terese Transportation’s name because AMA Transport would be gone before the end of the payment period. Accordingly, the document was changed and put in Phil Terese Transportation’s name. On or about April 22, 1995, plaintiff entered into a truck lease with Phil Terese Transportation. On April 25, 1995, DiLeonardi signed AMA Transport’s petition for bankruptcy, which was filed on May 4, 1995.

Bruce Dandrew, plaintiffs president, testified that he took over management of AMA Transport’s account when its accounts receivable were around $150,000. Dandrew had a meeting in late 1994 with DiLeonardi and the Apas concerning the delinquent account. Defendants told Dandrew that they had a tax problem and that they were going to transfer AMA Transport’s operations to Phil Terese Transportation and bankrupt AMA Transport. Dandrew said that he did not repossess plaintiffs vehicles at that time because he wanted to give defendants an opportunity to get some financing. When AMA Transport’s accounts receivable still did not drop, Dandrew had a second meeting with defendants. Defendants told Dandrew that the bank had turned down their request for financing, so Dandrew suggested putting the accounts receivable into a loan that defendants could pay off in six months to a year. Defendants were agreeable to the concept of a loan but wanted around five years to pay off the loan. After defendants refused to execute a short-term loan, Dandrew demanded repossession of plaintiffs vehicles on May 6, 1995. Following plaintiffs repossession of its trucks, Phil Terese Transportation issued notice that it had assigned its assets for the benefit of creditors on May 12, 1995.

At trial, plaintiff offered into evidence as damages the open and unpaid invoices for AMA Transport and Phil Terese Transportation. James Lynch, plaintiffs comptroller, testified that the open invoices totaled $134,470.84, and the invoices which had been written off as bad debt totaled $105,076.56. Plaintiff had repossessed the trucks that were the subject of the invoices, but plaintiff did not credit defendants’ invoices for any amounts received from the resale or lease of the trucks. Further, Lynch testified that the balance due on the $60,000 note was $36,443.10, plus 20% per annum interest, although this amount did not reflect any credit for the resale or lease of the trucks that were the subject of the note.

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701 N.E.2d 1150, 299 Ill. App. 3d 348, 233 Ill. Dec. 876, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sharon-leasing-inc-v-phil-terese-transportation-ltd-illappct-1998.