Find Legal Information

SECOND DIVISION

MAY 23, 2000

1-98-4579

PRESIDING JUSTICE COUSINS delivered the opinion of thecourt:

The plaintiff and the defendant made a contract for theplaintiff to perform janitorial services on a month-to-monthbasis at a building managed by the defendant. The defendant wasacting as an agent for a limited partnership that owned thebuilding. When the partnership fell behind in its payments, twoofficers of the plaintiff and an officer of the defendant met todiscuss the situation. After the meeting, the plaintiffcontinued to perform under the contract.

The plaintiff eventually was paid the amount that was dueprior to the meeting but has not received payment for theservices performed after the meeting. The plaintiff filed suitfor the unpaid amount. The defendant argued that the plaintiffcould only seek payment from the building owner. The trial courtentered summary judgment for the plaintiff on the grounds thatthe defendant had not disclosed its principal at the time ofcontracting.

The defendant appeals, arguing that:(1) for a divisiblecontract, any distinct portion of performance during which aprincipal is undisclosed does not affect an agent's liability fora portion during which the principal is disclosed; (2) thecontract between it and the plaintiff was divisible on a monthlybasis; and (3) summary judgment was inappropriate since there wasan issue of triable fact as to whether the defendant haddisclosed the identity of the building owner at the meeting.

We reverse and remand.

FACTS

On May 29, 1992, the plaintiff, Kimco Corporation (Kimco),entered into a contract with the defendant, Murdoch, Coll &Lillibridge, Inc. (MC&L), to provide janitorial services at abuilding on North Dearborn known as the Fisher Building. MC&Lmanaged the building for its owner, The Fisher Building LimitedPartnership. Duane Usa, Kimco's vice president of marketing,signed the agreement on behalf of Kimco. The contract was signedon behalf of MC&L by Mark Gluskin, an MC&L employee who had anoffice at the Fisher Building. Colleen Tobias was the MC&Lemployee in charge of day-to-day management of the building. Theoriginal contract proposal had been sent to Tobias.

Within a year the account was in arrears. In February 1993,Usa and the president of Kimco, Elliot Tarson, met with thepresident of MC&L, Gary Gries, to discuss the situation. Griestold them that MC&L was an agent for the true owner of thebuilding, and the owner was having financial difficulties. Theowner was in default on its mortgage and the limited partnerswere unwilling to invest any more capital in the building. Thepartnership was attempting to refinance, and the mortgagee,meanwhile, had imposed a "lock-box" arrangement on the building. Under this arrangement, the owner could only pay for servicesalready rendered, which created a problem because Kimco billed inadvance.

The parties are in dispute, however, as to whether Griesever actually told them the name of the owner during thismeeting. In their initial depositions, both Gries and Usa seemto have indicated that they did not remember whether Griesrevealed the identity of The Fisher Building Limited Partnership. Subsequently, however, Gries filed an affidavit asserting that hehad told Usa and Tarson the exact name of The Fisher BuildingLimited Partnership at the meeting. Usa then filed an affidavitswearing that Gries never mentioned the name of the buildingowner at the meeting.

Kimco continued to service the Fisher Building until August23, 1993. The arrearages in existence prior to the meeting wereeventually paid, but Kimco was not compensated for the servicesit provided after the February meeting.

Kimco filed suit against the owner as well as MC&L on thebasis that MC&L was the agent of an undisclosed principal andthus was liable on the contract. The original complaint wasvoluntarily amended, and the next two complaints were stricken. The final complaint named only MC&L as a defendant. MC&L raisedtwo affirmative defenses in its answer: (1) that it had disclosedthe identity of its principal prior to or at the time ofcontracting; and (2) that it had informed Kimco of the identityof its principal at the February 1993 meeting and that subsequentto that time Kimco had been dealing with a disclosed principal.

The trial court granted summary judgment in favor of Kimco,and on November 6, 1998, it awarded Kimco $91,724, a figurecomprising $11,667 in fees and $25,000 in interest in addition todamages. MC&L timely filed an appeal. MC&L has agreed not tocontest fees and prejudgment interest if liability is affirmed onappeal.

MC&L argues that:(1) for a divisible contract, any distinctportion of performance during which a principal is undiscloseddoes not affect an agent's liability for a portion during whichthe principal is disclosed; (2) the contract between it and Kimcowas divisible on a monthly basis; and (3) summary judgment wasinappropriate since there was an issue of triable fact as towhether Gries had disclosed the identity of the building owner atthe February 1993 meeting.

ANALYSIS

Summary judgment may be granted when there are no genuineissues of material fact and the moving party is entitled tojudgment as a matter of law. Telenois, Inc. v. Village ofSchaumburg, 256 Ill. App. 3d 897, 901, 628 N.E.2d 581, 584(1993). Summary judgment should not be granted if reasonablepersons could draw divergent inferences from the undisputedfacts. Telenois, 256 Ill. App. 3d at 901, 628 N.E.2d at 584. Inmaking its ruling, the trial court should construe the pleadings,depositions and affidavits in the light most favorable to thenonmoving party. Soderlund Brothers, Inc. v. carrier Corp., 278Ill. App. 3d 606, 614, 663 N.E.2d 1, 7 (1995).

A principal is undisclosed when the third party does notknow that the agent is contracting on another's behalf. Aprincipal is partially disclosed when the third party knows thatthe agent is contracting on behalf of a principal but does notknow the identity of the principal. See Restatement (Second) ofAgency