T.L. Swint Industries, Inc. v. Premiere Sales Group, Inc.

983 F. Supp. 772, 1997 U.S. Dist. LEXIS 18273, 1997 WL 722000
CourtDistrict Court, N.D. Illinois
DecidedNovember 12, 1997
DocketNo. 96 C 6468
StatusPublished
Cited by1 cases

This text of 983 F. Supp. 772 (T.L. Swint Industries, Inc. v. Premiere Sales Group, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
T.L. Swint Industries, Inc. v. Premiere Sales Group, Inc., 983 F. Supp. 772, 1997 U.S. Dist. LEXIS 18273, 1997 WL 722000 (N.D. Ill. 1997).

Opinion

MEMORANDUM OPINION AND ORDER

BUCKLO, District Judge.

The plaintiffs, T.L. Swint Industries, Inc. and Thomas L. Swint (“Swint Industries”), brought suit against the defendants, Premiere Sales Group, Inc. and Thomas A. Wright (“Premiere Sales”), alleging breach of a sales consulting contract and breach of a guaranty contract.1 Premiere Sales moves for summary judgment on the claim for breach of the guaranty contract. For the following reasons, the motion is denied.

Background

In September, 1995, Swint Industries and Premiere Sales entered into a four year sales consulting agreement in which Swint Industries agreed to act as a consultant to Premiere Sales in exchange for a monthly fee. At the same time, Swint Industries alleges that Mr. Wright personally entered into a guaranty contract in which Mr. Wright agreed to guaranty Premiere Sales’ obligations under the sales consulting agreement. It appears the 1995 sales consulting agreement and guaranty arose due to difficulties the parties encountered with a set of 1992 agreements and a 1992 guaranty executed by Mr. Wright. In .1992, Premiere Sales purchased part of Swint Industries’ operating business and entered into a set of agreements which were guaranteed by Mr. Wright. According to Mr. Swint, Premiere defaulted on these agreements in 1995. In lieu of bringing suit and enforcing the guaranty, Swint Industries agreed to the 1995 sales consulting agreement and guaranty contract. Swint Industries claims that in January, 1996, Premiere Sales ceased making payments in accordance with the 1995 sales consulting agreement and that Mr. Wright has failed to make the payments required by the guaranty agreement.

Motion to Strike Affidavit

Premiere Sales argues that Mr. Swint’s affidavit presented in opposition to the motion for summary judgment is conelusory and contains inadmissible hearsay and should be stricken. Federal Rule of Evi[774]*774dence 701 provides a particularly liberal standard of admissibility and does permit lay opinion testimony. .Many of the statements in Mr. Swint’s affidavit grow from Mr. Swint’s involvement in negotiating the agreements at issue in this case. Premiere Sales has presented no evidence that would indicate Mr. Swint does not have personal knowledge of the facts necessary to make most statements in his affidavit. Indeed, in paragraph eighteen, Mr. Swint states he engaged in negotiations concerning forbearance and termination of the 1992 agreements and the execution of the 1995 sales consulting agreement and guaranty contract.

Keeping the above in mind, there are several statements in Mr. Swint’s affidavit that are troublesome. In his affidavit, Mr. Swint discusses the failure of the 1992 agreements and the creation of the 1995 contracts. In paragraph twelve, Mr. Swint states that Mr. Wright was fully responsible and obligated to pay monies owed under the 1992 agreements. This is a legal conclusion which Mr. Swint has no apparent basis for making. Accordingly, it will be stricken. While paragraphs twenty and twenty-one are conelusory, they contain information that is likely admissible as a party admission and thus, will not be stricken. To the extent Mr. Swint states the 1995 contracts were entered into as “consideration” for forbearance of suit and cancellation of the 1992 agreements, I will not consider these statements legal conclusions, but simply a recitation of Mr. Swint’s understanding of why the 1995 contracts were executed.

Statute of Frauds

Premiere Sales moves for summary judgment on the claim for breach of the guaranty contract. The guaranty contract was never signed by Mr. Wright. The Statute of Frauds has been codified in Illinois:

No action shall be brought ... whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriage of another person ... unless the promise or agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized.

740 ILCS 80/1. Mr. Wright argues that, since he never signed the guaranty contract, it may not be enforced against him. In Illinois, the “special promises” section of the Statute of Frauds applies only to collateral promises. An original or independent promise is not covered by the Statute. Ricci v. Reed, 169 Ill.App.3d 1062, 523 N.E.2d 1218, 1221, 120 Ill.Dec. 307, 310 (1st Dist.1988). Generally, if a pre-existing debt is owed, a promise to guarantee the debt is considered a collateral promise and falls under the Statute. In the instant case, Mr. Swint’s affidavit indicates Premiere Sales owed Swint Industries a pre-existing debt that the guaranty contract was meant to cover.

There is, however, a well settled exception to the Statute which holds that “[i]f an oral promise to pay the pre-existing debt of another be supported by a new and valuable consideration such oral promise is not merely a promise to pay the debt of another it is regarded as an original undertaking.” Oscar H. Wilke, Inc. v. Vinci, 96 Ill.App.2d 189, 237 N.E.2d 768, 771 (1st Dist.1968) (citation omitted). Accordingly, the promise to pay the debt of another is not subject to the Statute when “the object of the promise is to promote some interest, purpose or advantage of the promisor.” Swartzberg v. Dresner, 107 Ill.App.3d 318, 437 N.E.2d 860, 865, 63 Ill.Dec. 211, 216 (1st Dist.1982). In the instant case, it appears that Mr. Wright and Premiere Sales owed some sum of money to Mr. Swint and Swint Industries based on a partial sale of Swint Industries and the 1992 agreements. Mr. Swint alleges he was prepared to bring suit under the 1992 agreements. He claims he did not bring suit based on Mr. Wright’s request that he forego a suit and instead enter into the 1995 sales consulting agreement and guaranty contract. In Illinois, forbearance of a legal action is recognized as valid consideration for a contract. Kapoor v. Robins, 214 Ill.App.3d 248, 573 N.E.2d 292, 297, 157 Ill.Dec. 874, 879 (2d Dist.1991). Thus, it appears Mr. Swint’s forbearance of a civil action based on the 1992 agreements is “new and valuable consider[775]*775ation” that takes the 1995 guaranty contract out of the Statute of Frauds.

Mr. Wright argues that, based on the integration clause of the guaranty contract, the entire consideration between the parties appears" within the four corners of the contract. It is true there is no mention of the 1992 agreements or Mr. Swint’s forbearance from a legal action in the guaranty contract. Mr. Wright’s argument, however, ignores the fact that “Illinois courts have generally distinguished between collateral and original promises, not from the particular words used, but from all of the circumstances of the transaction.” Ricci, 523 N.E.2d at 1221, 120 Ill.Dec. at 310. Thus, it is appropriate to look beyond the four corners of the contract to determine the consideration. Further, Mr.

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Related

T.L. Swint Industries, Inc. v. Premiere Sales Group, Inc.
16 F. Supp. 2d 937 (N.D. Illinois, 1998)

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Bluebook (online)
983 F. Supp. 772, 1997 U.S. Dist. LEXIS 18273, 1997 WL 722000, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tl-swint-industries-inc-v-premiere-sales-group-inc-ilnd-1997.