Unichem Corp. v. Gurtler

498 N.E.2d 724, 148 Ill. App. 3d 284, 101 Ill. Dec. 400, 1986 Ill. App. LEXIS 2909
CourtAppellate Court of Illinois
DecidedSeptember 25, 1986
Docket85-519
StatusPublished
Cited by21 cases

This text of 498 N.E.2d 724 (Unichem Corp. v. Gurtler) 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
Unichem Corp. v. Gurtler, 498 N.E.2d 724, 148 Ill. App. 3d 284, 101 Ill. Dec. 400, 1986 Ill. App. LEXIS 2909 (Ill. Ct. App. 1986).

Opinion

PRESIDING JUSTICE LINN

delivered the opinion of the court:

Plaintiff, Unichem Corporation (Unichem), instituted this action seeking both injunctive relief and monetary relief from William Gurtler, a former president and director of Unichem, and Gurtler Chemicals, Inc., a corporation William Gurtler established after he resigned from Unichem. In its two-count amended complaint, Unichem alleges: (1) that Gurtler breached the fiduciary duty he owed to Uni-chem; and (2) that Gurtler Chemicals violated the Uniform Deceptive Trade Practices Act (Ill. Rev. Stat. 1981, ch. 121V2, par. 311 et seq.).

After various depositions were taken, Unichem moved for summary judgment claiming that, as a matter of law, Gurtler breached the fiduciary duty he owed to Unichem and that, as a matter of law, Gurtler Chemicals violated the Uniform Deceptive Trade Practices Act. Following a hearing on the matter, the trial court granted Uni-chem’s summary judgment motion. In granting Unichem’s motion, the trial court permanently enjoined Gurtler Chemicals from selling any product with a label deceptively similar to Unichem’s and, in addition, ordered an accounting to determine the profits made by Gurtler Chemicals at Unichem’s expense. At the conclusion of the accounting hearings, the trial court entered judgment in favor of Unichem in the amount of $47,964.80. In addition, the court granted Unichem $1,150.50 in attorney fees arising from Gurtler Chemicals’ failure to comply with one of the trial court’s orders.

On appeal, Gurtler contends that material issues of fact still exist and that, as a result, the trial court erred in finding that he breached his fiduciary duty as a matter of law. Gurtler Chemicals, on the other hand, asserts: (1) that material issues of fact still exist as to whether it violated the Uniform Deceptive Trade Practices Act and that summary judgment was therefore improper; (2) that even if it did violate the Act, an accounting was an improper remedy; and (3) that the trial court erred in awarding attorney fees to Unichem.

We affirm the decision of the trial court.

Background

Plaintiff Unichem is an Illinois corporation in the business of producing and selling chemical laundry products. Defendant Gurtler was the president and a member of Unichem’s board of directors until he resigned from his positions on March 12, 1982. Greg B. Gurtler (G.B. Gurtler) is Gurtler’s son and was a salesman with Unichem until he resigned on January 1, 1982. Defendant Gurtler Chemicals is in the same line of business as Unichem and was incorporated, with Gurtler and G.B. Gurtler as two of its officers, on March 23,1982.

The record reveals that during 1981 Gurtler was president of Uni-chem and his son, G.B. Gurtler, was Uniehem’s sole salesman in the Ohio region. In November of 1981 Gurtler contacted his cousin, Lester C. Gurtler, the plant manager at Unichem. Gurtler informed Lester that he was going to leave Unichem soon and encouraged Lester to leave Unichem also. Lester agreed.

During the month of December 1981 Gurtler learned that his son was also going to leave Unichem in the near future. Gurtler further learned that G.B. Gurtler was looking for a building to house a new business which he intended to open after he left Unichem. The new business would produce the same type of goods as that manufactured by Unichem and would compete with Unichem for the same customer base. On December 30, 1981, G.B. Gurtler, on behalf of “Gurtler Chemicals of Illinois” entered into a lease for a warehouse. On January 1, 1982, G.B. Gurtler resigned from Unichem. Although Gurtler was aware that his son was establishing a rival business, he failed to inform any of Unichem’s other officers as to those developments.

After January 1, 1982, Gurtler personally approved five separate sales of Unichem goods to G.B. Gurtler. The sales occurred on January 6, 14, 21, 22 and 28, 1982. These sales to G.B. Gurtler were at a price substantially lower than the normal price that Unichem charged its customers. In fact, the price charged to G.B. Gurtler barely covered the cost of producing the material and provided Unichem with only marginal profit. In addition, the sales were made on credit to G.B. Gurtler, who possessed no credit history. Although Gurtler was aware that G.B. Gurtler was obtaining Unichem products for the sole purpose of reselling the goods to Unichem customers (with the profits going to Gurtler Chemicals), Gurtler failed to inform Unichem’s other officers of G.B. Gurtler’s purchases.

When G.B. Gurtler resigned from Unichem on January 1, 1982, Gurtler did not attempt to notify Unichem’s other officers until he sent a memo describing G.B. Gurtler’s resignation. While the memo was dated January 25, 1982, the other officers at Unichem did not receive the memo until early March.

On February 9, 1982, Gurtler contacted the First National Bank of Dolton for the purpose of obtaining, and guaranteeing, a $100,000 loan. The proceeds of the loan were not for Gurtler himself, but were instead to be disbursed to G.B. Gurtler. Gurtler used his own residence as collateral for the loan and discussed with the loan officer the type of business that G.B. Gurtler was going in to. Subsequently, on April 9, 1982, the loan was granted and the proceeds deposited into the account of Gurtler Chemicals. Gurtler never disclosed to Uni-chem’s other officers that he was attempting to obtain a loan for the rival business established by his son.

During February of 1982 Gurtler became aware that his wife and G.B. Gurtler were soliciting Unichem employees in an attempt to encourage those employees to leave Unichem and join Gurtler Chemicals. In addition, Gurtler knew that his wife had taken several of Uni-chem’s labels and was using those labels to make Gurtler Chemicals’ labels. The Gurtler Chemicals’ labels created by Gurtler’s wife were duplicates of Unichem’s labels. (See section II.) Moreover, Gurtler admitted that he provided “technical input” to his wife while she was developing the labels for Gurtler Chemicals. Gurtler did not inform any of Unichem’s other officers as to these developments.

On Friday, March 12, 1982, Gurtler resigned from his position as president and director of Unichem. On Monday, March 15, 1982, Gurtler assumed the position of president and director of Gurtler Chemicals, thereby joining his son and wife in their endeavor. In addition, on that Monday, eight of Unichem’s other employees failed to report to work at Unichem and instead became immediately employed with Gurtler Chemicals.

On March 18, 1982, Unichem filed a complaint alleging that Gurtler had breached his fiduciary duty. Subsequently, on April 21, 1982, Unichem amended its complaint to include a count against Gurtler Chemicals alleging that Gurtler Chemicals had violated the Uniform Deceptive Trade Practices Act. On April 27, 1982, the circuit court of Cook County entered an agreed order whereby Gurtler Chemicals was: (1) restrained from selling any product that had a Uni-chem label on it; (2) restrained from selling any product with the same or similar name as that used by Unichem; and (3) compelled to execute certain UCC financing and security agreements to protect Gurtler Chemicals’ assets should a judgment in favor of Unichem be rendered.

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

Related

Ark Shipping, Inc. v. Parekh
2025 IL App (1st) 220720-U (Appellate Court of Illinois, 2025)
Larson v. Bayer (In re Bayer)
521 B.R. 491 (E.D. Pennsylvania, 2014)
Martello v. Fowers (In Re Fowers)
360 B.R. 888 (N.D. Indiana, 2007)
Cooper Linse Hallman Capital v. Hallman
Appellate Court of Illinois, 2006
Cooper Linse Hallman Capital Managment, Inc. v. Hallman
856 N.E.2d 585 (Appellate Court of Illinois, 2006)
Foodcomm International v. Patrick James Barry
328 F.3d 300 (Seventh Circuit, 2003)
Dowd & Dowd, Ltd. v. Gleason
Appellate Court of Illinois, 1996
Dowd and Dowd, Ltd. v. Gleason
672 N.E.2d 854 (Appellate Court of Illinois, 1996)
Veco Corp. v. Babcock
611 N.E.2d 1054 (Appellate Court of Illinois, 1993)
Dwyer, Costello and Knox, PC v. Diak
846 S.W.2d 742 (Missouri Court of Appeals, 1993)
Cullen Electric Co. v. Cullen
578 N.E.2d 1058 (Appellate Court of Illinois, 1991)
Preferred Meal System Inc. v. Guse
557 N.E.2d 506 (Appellate Court of Illinois, 1990)
Radiac Abrasives, Inc. v. Diamond Technology, Inc.
532 N.E.2d 428 (Appellate Court of Illinois, 1988)
Lindenhurst Drugs, Inc. v. Becker
506 N.E.2d 645 (Appellate Court of Illinois, 1987)
In Re Unichem Corp.
72 B.R. 95 (N.D. Illinois, 1987)

Cite This Page — Counsel Stack

Bluebook (online)
498 N.E.2d 724, 148 Ill. App. 3d 284, 101 Ill. Dec. 400, 1986 Ill. App. LEXIS 2909, Counsel Stack Legal Research, https://law.counselstack.com/opinion/unichem-corp-v-gurtler-illappct-1986.