Justice CUNNINGHAM delivered the judgment of the court, with opinion.
¶ 1 Defendant and counterplaintiff-appellant Bruce Kulbarsh (Kulbarsh) appeals from the trial court's order of April 17, 2013, granting summary judgment dismissing his counterclaims against plaintiff and counterdefendant-appellee Rohr Burg Motors, Inc., d/b/a Bob Rohrman's Schaumburg Ford (Rohr Burg), and dismissing Kulbarsh's first four affirmative defenses to Rohr Burg's complaint against him. Kulbarsh argues that: (1) the trial court erred in finding that Kulbarsh's counterclaims were barred by operation of a release contained in a written agreement between the parties; and (2) the affirmative defenses were not subject to summary judgment.
¶ 3 This appeal arises from a dispute between the buyer of an allegedly damaged used car and the dealership that sold him the vehicle. In July 2010, Kulbarsh visited a car dealership in Schaumburg, Illinois, known as Bob Rohrman's Schaumburg Ford (Schaumburg Ford), which is operated by Rohr Burg. According to Kulbarsh, he spoke to sales personnel at Schaumburg Ford and expressly communicated that he only wished to purchase a vehicle without any history of collisions. Sales personnel at Schaumburg Ford showed Kulbarsh a 2010 Ford Mustang convertible (the vehicle). Interested in the vehicle, Kulbarsh requested that the dealership show him the corresponding vehicle history reports. Kulbarsh was provided a report issued by CarFax dated June 25, 2010. The CarFax report indicated that the vehicle had originally been purchased in May 2009 and stated there were "[n]o accidents or damage reported to CarFax." Kulbarsh asked sales personnel to show him an AutoCheck vehicle history report, but he was told such a report was not available.
¶ 4 Kulbarsh agreed to purchase the vehicle for the price of $19,600 and entered into a sales contract dated July 6, 2010.
¶ 5 In September 2010, approximately two months after purchasing the vehicle, Kulbarsh developed new concerns about the vehicle's history. He brought the vehicle
¶ 6 On September 3, 2010, Kulbarsh retained an attorney, Andy Norman, in order to seek a rescission of the purchase of the vehicle from Schaumburg Ford. Kulbarsh returned to the dealership and complained that he had been sold a damaged car. After discussing his complaint with the Schaumburg Ford salesperson who had sold him the vehicle, an agreement was reached under which Kulbarsh would return the car and the dealership would refund the purchase price as well as pay off the American Eagle Bank loan. This arrangement was reflected in a letter to Kulbarsh from Rohr Burg dated September 8, 2010 that acknowledged Kulbarsh's concern regarding "a possible frame damage incident that your vehicle may have sustained" and offered: "If you are not completely satisfied please return the vehicle to Schaumburg Ford for a full refund including the interest that you have paid since the time of purchase."
¶ 7 The following day, September 9, 2010,
The document was signed by Kulbarsh as well as by Mike Sabzali, a general manager at Schaumburg Ford. Following the language noted above, the General Release contains handwritten language certifying that American Eagle Bank had confirmed to Sabzali that the "payoff figure" for the loan on the vehicle was $17,731.45, and that "Schaumburg Ford insures full and complete payoff of the indebtedness" to American Eagle Bank.
¶ 8 According to Kulbarsh, after executing the General Release on September 9, 2010, Sabzali showed him a check made out to Kulbarsh for the refund of his down
¶ 9 Kulbarsh returned with the vehicle to the dealership the next day, September 10, 2010, and was given a check in the amount of $4,325.75. After receiving the check, Kulbarsh took off the license plates from the vehicle and left it at Schaumburg Ford. Later on the same date, Kulbarsh brought the check to a Chase bank where he had an account and attempted to deposit it. However, the bank told Kulbarsh the check could not be deposited, as it was "NSF" due to insufficient funds. After the check was declined Kulbarsh called Schaumburg Ford, and another salesperson from the dealership (whose name Kulbarsh could not recall) met him at the Chase bank. According to Kulbarsh, after the bank told the Schaumburg Ford salesperson that the check was declined as "NSF," the salesperson agreed to give Kulbarsh the vehicle back. Kulbarsh and the salesperson returned to the dealership, where Kulbarsh put his license plates back on the vehicle and drove the vehicle home.
¶ 10 Kulbarsh returned to the same Chase bank "the next day or so" to inquire about the check. At that second visit, the check cleared and the full amount of $4,325.75 was deposited into Kulbarsh's account. Thus, within a few days after signing the General Release, Kulbarsh received the refund of his down payment on the vehicle. However, Kulbarsh did not return the vehicle after this check was deposited.
¶ 11 With respect to the repayment of the car loan contemplated by the General Release, American Eagle Bank sent Kulbarsh a letter dated September 13, 2010, which stated: "Please accept this letter as proof that American Eagle Bank has received a payoff from Schaumburg Ford on your account * * * in the amount of $17,731.45. Your account will be closed as of today, and your paid papers will be sent to you in 21 days." Despite receiving this letter, Kulbarsh doubted that American Eagle Bank had been paid off by Schaumburg Ford, as he did not know "if the check was any good" or "if the check ever went through." Kulbarsh acknowledged at his deposition that he later spoke to personnel at American Eagle Bank, who told him the check had been deposited, but Kulbarsh maintained that the bank "couldn't verify that it was actually paid off in full," because he believed the check "could still come back bad at any time."
¶ 12 Kulbarsh did not return the vehicle even after depositing the $4,325.75 check refunding his down payment and after receiving the letter from American Eagle Bank confirming payoff of the car loan. In a letter dated September 30, 2010, Rohr Burg demanded that Kulbarsh return the vehicle. The letter to Kulbarsh, signed by Mark J. Battista as director of the Bob Rohrman Auto Group, stated that "you have failed to return the above mentioned vehicle associated with the agreement both written and verbally. Please accept this as our formal demand for the return of our property the 2010 Ford Mustang due to the fact that you are in breach of our agreement." Kulbarsh did not return the vehicle.
¶ 13 On October 22, 2010, Battista, who is not an attorney, filed a complaint on behalf of Rohr Burg in the municipal department of the circuit court of Cook County. The complaint named both Kulbarsh
¶ 14 On November 12, 2010, Kulbarsh filed a handwritten pro se answer to Rohr Burg's complaint claiming he had been "defrauded by Schaumburg Ford/Rohr Burg Motors into buying a car that they knew had major unibody damage and was unsafe to drive." The answer claimed that "[w]hen [Rohr Burg] offered to buy the car back, * * * the check they gave me was N.S.F. [nonsufficient funds] as was the payoff check on the loan." Kulbarsh's answer acknowledged "[t]hey have since covered the first check, but have refused to verify the loan payoff check," adding that "[w]e are holding the car until then."
¶ 15 According to Kulbarsh, when the parties first appeared in court on November 15, 2010, the trial court directed Kulbarsh to return the vehicle.
¶ 16 Rohr Burg retained counsel, Frank Savaiano of the law firm Savaiano & Spear. On January 11, 2011, Andy Norman, the attorney who had represented Kulbarsh with respect to the General Release, moved to dismiss the complaint's allegations against him. By consent of the parties, the case was dismissed as to Norman on March 9, 2011.
¶ 17 Kulbarsh, again acting pro se, filed a verified answer on April 29, 2011 in which he stated that Rohr Burg had been in possession of the vehicle "since January 2011." On May 19, 2011, Kulbarsh filed counterclaims against Rohr Burg asserting breach of contract, violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1-12 (West 2010)), and intentional infliction of emotional distress, as well
¶ 18 Kulbarsh retained counsel, who appeared in the action on August 2, 2011. On September 28, 2011, Kulbarsh filed amended counterclaims and affirmative defenses. The first two affirmative defenses, fraud and misrepresentation, alleged that Rohr Burg knowingly "misrepresented a material fact in that it stated it was giving [Kulbarsh] a check that was negotiable" when "Rohr Burg knew there were not enough funds in the account for the check to clear." The third affirmative defense alleged that "Rohr Burg breached the written contract" in the General Release "by failing to give [Kulbarsh] a check that was negotiable," and that Rohr Burg "voided" the contract by "giving the Vehicle back" to Kulbarsh.
¶ 19 The fourth affirmative defense states: "Upon the title being sent to Rohr Burg and the money being refunded, [Kulbarsh] returned the vehicle." In that defense, Kulbarsh acknowledged that he had received his refund of the purchase price and that Rohr Burg had paid off the car loan: "After the written contract was voided, Rohr Burg again submitted two checks. These checks cleared; that is, [Kulbarsh's] loan to the bank had been repaid, and the Rohr Burg check made payable to [Kulbarsh] for the funds that he had used to buy the vehicle had cleared. The title to the vehicle was sent by the Bank to Rohr Burg, and thereafter [Kulbarsh] * * * returned the vehicle."
¶ 20 In the same pleading, Kulbarsh asserted three counterclaims: breach of contract, fraud, and violation of the Consumer Fraud Act. Each of these counterclaims was based on allegations that Schaumburg Ford had concealed or made misrepresentations to Kulbarsh concerning the vehicle's prior collision damage at the time of his July 2010 purchase.
¶ 21 Rohr Burg filed a motion to strike and dismiss Kulbarsh's affirmative defenses and counterclaims on October 18, 2011. With respect to the counterclaims, Rohr Burg's primary argument was that the General Release barred any claims related to the purchase of the vehicle. Rohr Burg's motion to dismiss further noted that Kulbarsh's fourth affirmative defense admitted that Kulbarsh had received "the funds called for by the General Release."
¶ 22 As to Kulbarsh's affirmative defenses, Rohr Burg argued that the defenses of fraud and misrepresentation "do[] not defeat any of the claims set forth in [Rohr Burg's] complaint, but rather seek to reduce the amount that may be recovered." The motion again noted that Kulbarsh's "fourth affirmative defense make[s] it clear that all payments called for in the General Release were in fact made," and that Kulbarsh had "admitted * * * that he had in fact received the funds in relation to the check that [Kulbarsh] is alleging constituted fraud." Rohr Burg argued that the third affirmative defense, which was also premised on the initially dishonored check, should fail for the same reason. With respect to the fourth affirmative defense — that Kulbarsh had returned the vehicle after receiving the refund checks — Rohr Burg argued that this was "merely a denial of the allegation contained in [Rohr Burg's] complaint" and was not a valid affirmative defense.
¶ 24 Rohr Burg's reply argued that "[e]ven if the alleged delay in obtaining the funds" due to a nonnegotiable check "did make the agreement voidable, [Rohr Burg's] payment of all funds called for * * * and [Kulbarsh's] acceptance of said funds establishes that the agreement was not in fact voided in this case." Rohr Burg argued that Kulbarsh's fourth affirmative defense "establish[ed] that [Rohr Burg] did abide by the terms and conditions of the agreement," since that affirmative defense "admits that the checks [Kulbarsh] received from [Rohr Burg] cleared and that the loan on the vehicle was satisfied." Rohr Burg's reply also reiterated its argument that all of the counterclaims were waived by the General Release.
¶ 25 On January 11, 2012, the trial court denied Rohr Burg's motion to strike Kulbarsh's amended affirmative defenses and amended counterclaims. The parties conducted discovery, and Kulbarsh was deposed on October 28, 2012. On January 22, 2013, Rohr Burg moved for summary judgment with respect to Kulbarsh's counterclaims and the first four affirmative defenses, again arguing that they were barred by the General Release. Rohr Burg noted Kulbarsh's deposition testimony that he had received the payment called for by the General Release. Rohr Burg's motion attached as exhibits the American Eagle Bank letter acknowledging payoff of the loan, copies of the checks from Rohr Burg to Kulbarsh and American Eagle Bank, and an affidavit from Schaumburg Ford's comptroller attesting that "no check has ever been returned for insufficient funds" or had not been fully negotiable at the time that it was written.
¶ 26 Rohr Burg's summary judgment motion further argued that, even assuming that the check to Kulbarsh had initially been denied as nonnegotiable, "the agreement would have been at best voidable by Kulbarsh." However, instead of voiding it, Kulbarsh "reaffirmed the agreement when he subsequently cashed the check and retained the funds relating thereto." Moreover, as each of the first four affirmative defenses concerned the alleged failure to provide a negotiable check, Kulbarsh's "admi[ssion] that he received the funds that he had been promised and that the bank had been paid" demonstrated that Rohr Burg "fully performed under the terms of the release [and] Kulbarsh's claims in relation thereto must be rejected."
¶ 27 Kulbarsh's opposition to the summary judgment motion attacked the validity of the General Release. First, Kulbarsh claimed that he received no consideration in exchange for his agreement to release any claims. Although the General Release stated that Kulbarsh agreed to accept "the repurchase amount and rescission of the contract," Kulbarsh argued that this was consideration only for his agreement to return the vehicle, not for his release of claims.
¶ 28 Kulbarsh alternatively argued that if the release was valid with respect to
¶ 29 Kulbarsh separately argued that the release was "voided" and any obligations of Kulbarsh were "extinguished" when Rohr Burg breached the agreement by giving him a nonnegotiable check. According to Kulbarsh, Rohr Burg had acknowledged that the General Release had been voided when its salesperson gave Kulbarsh a ride from the Chase bank back to the dealership and allowed Kulbarsh to leave the dealership with the vehicle. Kulbarsh contended that by the parties' conduct, "any obligations that the Parties had under the `General Release' no longer existed" and any subsequent conduct involving the vehicle was based on oral agreement.
¶ 30 Rohr Burg's reply argued that the $21,802 cited in the General Release and rescission of the initial purchase contract constituted consideration supporting Kulbarsh's release of claims. Rohr Burg noted that the General Release specifically referred to Kulbarsh's "concerns associated with the fact of a possible frame damage" to the vehicle, indicating the General Release expressly contemplated claims related to the condition of the vehicle. Rohr Burg also disputed Kulbarsh's contention that the release could be construed to bar Rohr Burg's lawsuit. With respect to the argument that the parties had treated the release as null and void, Rohr Burg denied that it had issued any bad checks but noted that Kulbarsh admitted he eventually cashed the refund check. Rohr Burg thus argued that, even assuming its check was initially nonnegotiable, "by cashing the checks and retaining the funds Kulbarsh reaffirmed the release."
¶ 31 On April 17, 2013, the trial court heard oral argument on Rohr Burg's motion for summary judgment. Kulbarsh's counsel argued the release language was unenforceable due to lack of consideration because the payment to Kulbarsh called for by the General Release was only consideration for the return of the vehicle. The trial court rejected this argument and found that there was consideration supporting the release: "There are obligations of both sides here * * * it is an exchange for value. You get the car back, * * * and the other side gets the money back." The court also rejected the argument that the release could operate to bar Rohr Burg from suing Kulbarsh to enforce the agreement, recognizing that "[y]ou can sue on a release." The trial court explained that since Kulbarsh did not return the vehicle as called for by the agreement, "the plaintiff here, the dealership, had to sue on the obligations contained in this contract, which is a release."
¶ 32 Kulbarsh's counsel alternatively argued that even if the release was a valid contract, "[Rohr Burg] breached the contract by giving [Kulbarsh] a bad check." As the parties disputed whether a nonnegotiable check had ever been issued, Kulbarsh's counsel argued this constituted an issue of fact precluding summary judgment. However, as Kulbarsh did not dispute that he subsequently received the funds, the court found that whether the check was initially declined did not present a material issue of fact: "[F]rankly, I don't think there that is an issue of fact as to whether this check was NSF. This is a major car dealer, a check given on a major
¶ 33 After the ruling, Kulbarsh's counsel asked the trial court: "How can you have a motion for summary judgment on affirmative defenses?" The trial court responded: "The affirmative defenses do not relate to the underlying case here which is violation or breach of the waiver agreement, the agreement that this lawsuit is based on. Defendant waived these claims, plain and simple. * * * He got money, he did not return the vehicle." After stating its ruling, the trial court also granted Kulbarsh's counsel's request for "[Rule] 304(a) language" in the order. The written order of April 17, 2013 thus states: "Pursuant to Supreme Court Rule 304(a) this matter is final and appealable." Kulbarsh filed a timely notice of appeal on May 16, 2013.
¶ 35 At the outset, we address the argument set forth in Rohr Burg's appellate brief which asserts a lack of jurisdiction by this court because the trial court's order did not make a sufficient, express written finding pursuant to Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010). That rule provides: "If multiple parties or multiple claims for relief are involved in an action, an appeal may be taken from a final judgment as to one or more but fewer than all of the parties or claims only if the trial court has made an express written finding that there is no just reason for delaying either enforcement or appeal or both." Ill. S.Ct. R. 304(a) (eff. Feb. 26, 2010). That rule is implicated here, since Rohr Burg's complaint remained pending notwithstanding the order granting summary judgment with respect to Kulbarsh's counterclaims and affirmative defenses. While Rohr Burg acknowledges that the trial court's summary judgment order cited Rule 304(a) and found the order "final and appealable," Rohr Burg argues that this is insufficient because "the order does not make an express written finding of both enforceability and appealability." Rohr Burg claims that "because the judgment does not follow the strict language of the rule, this appeal must be dismissed for lack of jurisdiction."
¶ 36 We disagree with Rohr Burg's argument and find that the trial court's order invoked appellate jurisdiction through its explicit reference to Rule 304(a). We recognize that jurisdiction is not automatically triggered where a trial court's order is "accompanied by language indicating that it is `final and appealable,' but not referencing immediate appeal, the justness of delay, or Rule 304(a)." Palmolive Tower Condominiums, LLC v. Simon, 409 Ill.App.3d 539, 544, 350 Ill.Dec. 931, 949 N.E.2d 723 (2011). In the Palmolive decision, we explained that "[a] circuit court's declaration that an order is `final and appealable,' without reference to the justness of delay, or even reference to immediate appealability, evinces no application of the discretion Rule 304(a) contemplates. [Citation.] Instead, absent some other indication from the record that the court intended to invoke Rule 304(a) [citation], a circuit court's declaration that an order is `final and appealable' amounts to nothing more than a nonbinding interpretation." Id. at 544, 350 Ill.Dec. 931, 949 N.E.2d 723.
¶ 37 Although the trial court in this case used the phrase "final and appealable" without additional language regarding the justness of delaying either enforcement or appealability, the trial court explicitly referenced Rule 304(a) in its written order. Moreover, the transcript
¶ 38 Next, we address Kulbarsh's contention on appeal that since Rohr Burg's complaint was not filed by an attorney, the complaint and all subsequent orders of the trial court must be deemed void. Kulbarsh argues that "even after Rohr-Burg hired an attorney, orders that followed were void due to the inability to resurrect the null and void Complaint."
¶ 39 The so-called "nullity rule," under which a complaint filed by a nonattorney on behalf of a corporation nullifies subsequent proceedings, was thoroughly examined by our supreme court in Downtown Disposal Services, Inc. v. City of Chicago, 2012 IL 112040, 365 Ill.Dec. 684, 979 N.E.2d 50. That decision recognized that "[c]ourts in this country, including this court, unanimously agree that a corporation must be represented by counsel in legal proceedings" but noted courts' "disagree[ment] on the consequences the lack of representation has on actions taken by non-lawyers on behalf of a corporation." Id. ¶ 22. The supreme court recognized that our appellate decisions had previously "held that such actions are a nullity and warrant dismissal, the entry of a default judgment against the corporation, or vacatur of any judgment rendered." Id. However, the supreme court noted that "[o]ther jurisdictions take the approach that actions by nonattorneys on behalf of a corporation are curable defects, allowing the corporation a reasonable time to obtain counsel and make any necessary amendments." Id. ¶ 23.
¶ 40 The Downtown Disposal decision declined to take the view that "any unauthorized practice of law by a nonattorney is a nullity." Id. ¶ 24. Instead, the supreme court held that "a per se nullity rule is unreasonable and that sanctions for violating the rule against the unauthorized practice of law `should be proportioned to the gravity of the violation's consequences.'" Id. ¶ 30 (quoting In re IFC Credit Corp., 663 F.3d 315, 321 (7th Cir. 2011)). Our supreme court further held that "because the consequences of applying the nullity rule to a case can be harsh, it should be invoked only where it fulfills the purposes of protecting both the public and the integrity of the court system from the actions of the unlicensed, and where no other alternative remedy is possible." Id. The Downtown Disposal decision instructed that courts consider a number of factors in deciding the consequences of actions by a nonattorney on behalf of a corporation:
¶ 41 Applying these principles to the facts of Downtown Disposal, the supreme court held that the filing of a complaint for administrative review by a nonattorney officer on behalf of a corporation did not render the action a nullity. In that case, a corporation's nonattorney president had filed complaints seeking review of judgments rendered against the corporation after administrative hearings found the corporation in violation of City of Chicago ordinances. The corporation's president filed the complaints by "fill[ing] out four blank pro se complaints for administrative review" on "preprinted form[s] supplied by the clerk's office." Id. ¶ 5. Approximately six months later, but before the City of Chicago had challenged the complaints, an attorney filed appearances on behalf of the corporation. Id. ¶¶ 5-6. The circuit court had granted the City's motion to dismiss the complaints based upon the nullity rule. Id. ¶ 7. However, the supreme court found that nullification was unduly harsh, since it was "evident that [the corporation's president] was unaware he could not prepare and sign the complaints on behalf of the corporation," his "participation was minimal" as he simply "filled in a preprinted blank form," and the corporation had "retained counsel prior to any involvement by the City in the case other than having been served." Id. ¶ 32. The supreme court reasoned that "the absence of counsel at the threshold stage of the lawsuit — filing the complaint for administrative review — could not have prejudiced the City" and that the corporation's "commencement of the proceedings without the assistance of counsel was essentially inconsequential." Id.
¶ 42 On the facts underlying this appeal, we similarly decline to find that the filing of Rohr Burg's complaint by a nonattorney agent was so egregious that it invalidates the subsequent proceedings. Kulbarsh's reply brief on appeal recognizes that our supreme court's decision in Downtown Disposal is controlling but argues that Rohr Burg's "prosecution of the Complaint fulfills all of the requirements" to impose nullification under that decision. However, under our analysis of the relevant factors set forth in Downtown Disposal, we conclude that nullifying the proceedings here would be an unnecessarily harsh result. First, as to the factor of whether the nonattorney's conduct was done "without knowledge that the action was improper," there is nothing in the record to indicate that Battista, who was acting in his capacity as director of the Rohr Burg Group, knew or should have known that it was improper for him to file the complaint on behalf of Rohr Burg. Indeed, he did so using a form provided to him by the circuit court titled "Pro Se Complaint." Nowhere does that form indicate that a corporation cannot proceed as a pro se plaintiff, and we will not presume that Battista, a nonattorney, knew that filing the complaint on behalf of Rohr Burg was improper.
¶ 43 Regarding the next Downtown Disposal factor, "whether the corporation acted diligently in correcting the mistake by obtaining counsel," we note that Rohr
¶ 44 As to the factor of whether the nonattorney's participation was minimal, we acknowledge that Battista did not simply fill out a preprinted form, but drafted a complaint against Kulbarsh and Kulbarsh's prior attorney, Andy Norman, who later was dismissed from the action. Kulbarsh argues that the litigation by Rohr Burg before it retained counsel was "not minimal" with respect to this Downtown Disposal factor. Nevertheless, the majority of the litigation occurred with Savaiano acting as Rohr Burg's counsel. Notably, Savaiano drafted Rohr Burg's motions and argument seeking to dismiss Kulbarsh's counterclaims, as well as the motion for summary judgment that resulted in the order at issue in this appeal. As Rohr Burg was represented by counsel for virtually the entire litigation after the pleading stage, the nonattorney's participation was relatively minimal.
¶ 45 Finally, as to the Downtown Disposal factor of "prejudice to the opposing party," we do not find that Kulbarsh suffered prejudice as a result of Rohr Burg filing its complaint while unrepresented by counsel. Kulbarsh's reply claims he was prejudiced by being forced to respond to a complaint that "does not state a recognizable cause of action," but Kulbarsh cannot argue that he was not sufficiently apprised of the nature of Rohr Burg's claim. The complaint signed by Battista clearly states the factual background and the simple basis of Rohr Burg's claims — namely, that Kulbarsh violated the parties' agreement by failing to return the vehicle. We note that Kulbarsh did not file a motion to dismiss the complaint, even after he retained counsel in August 2011. Moreover, there is no indication that Kulbarsh or his counsel ever requested that Rohr Burg's attorney file a new complaint, let alone argue that the proceedings should be nullified. Indeed, Kulbarsh's affirmative defenses and counterclaims indicate that Kulbarsh understood the allegations being made against him. This is further indication that Kulbarsh was not prejudiced in his ability to litigate this dispute. In short, considering the extent to which this action was litigated after Rohr Burg corrected its initial failure to retain counsel, the factors identified by our supreme court weigh against imposing the penalty of nullification here.
¶ 46 As we do not find that the proceedings were nullified by Rohr Burg's failure to use counsel in preparing its complaint, we turn to the merits of the underlying order. We apply the de novo standard of review to a trial court order granting summary judgment. Inter-Rail Systems, Inc. v. Ravi Corp., 387 Ill.App.3d 510, 515, 326 Ill.Dec. 771, 900 N.E.2d 407 (2008). "`Summary judgment is proper if, and only if, the pleadings, depositions, admissions, affidavits and other relevant matters on file show that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law.'" Id. at 515-16, 326 Ill.Dec. 771, 900 N.E.2d 407 (quoting Prowell v. Loretto Hospital, 339 Ill.App.3d 817, 822, 274 Ill.Dec. 850,
¶ 47 We first address Kulbarsh's argument that the release of claims in the General Release was not enforceable due to lack of consideration. "A release is the abandonment of a claim to the person against whom the claim exists." (Internal quotation marks omitted.) Borsellino v. Putnam, 2011 IL App (1st) 102242, ¶ 103, 357 Ill.Dec. 99, 962 N.E.2d 1000. "It is a contract and is therefore governed by contract law." Id. "The construction of a contract presents a question of law," for which our standard of review is de novo. Gallagher v. Lenart, 226 Ill.2d 208, 219, 314 Ill.Dec. 133, 874 N.E.2d 43 (2007). "The primary objective in construing a contract is to give effect to the intent of the parties." Id. at 232, 314 Ill.Dec. 133, 874 N.E.2d 43. "A court must initially look to the language of a contract alone, as the language, given its plain and ordinary meaning, is the best indication of the parties' intent. [Citations.] Moreover, * * * a contract must be construed as a whole * * *. [Citation.] The intent of the parties is not to be gathered from detached portions of a contract or from any clause or provision standing by itself." Id. at 232-33, 314 Ill.Dec. 133, 874 N.E.2d 43.
¶ 48 As with any contract, "`[a] release must be based upon consideration which consists either of some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss of responsibility given, suffered or undertaken by another.'" Hurd v. Wildman, Harrold, Allen & Dixon, 303 Ill.App.3d 84, 93, 236 Ill.Dec. 482, 707 N.E.2d 609 (1999) (quoting Gavery v. McMahon & Elliott, 283 Ill.App.3d 484, 489, 219 Ill.Dec. 144, 670 N.E.2d 822 (1996)). "Any act or promise that is a benefit to one party or a detriment to the other is a sufficient consideration to support a contract." Hurd, 303 Ill.App.3d at 93, 236 Ill.Dec. 482, 707 N.E.2d 609. Although some consideration is necessary, "`[a] court's inquiry into whether a contract is supported by consideration does not extend to examining the adequacy of the consideration.'" Id. (quoting Gavery, 283 Ill.App.3d at 490, 219 Ill.Dec. 144, 670 N.E.2d 822). "It is not [the] court's function to review the amount of consideration unless the amount is so grossly inadequate as to shock the conscience," and thus "[m]ere inadequacy of consideration, in the absence of fraud or unconscionable advantage, ordinarily is insufficient to justify setting aside a contract." (Internal quotation marks omitted.) Hurd, 303 Ill.App.3d at 93, 236 Ill.Dec. 482, 707 N.E.2d 609.
¶ 49 It is well-settled that valid consideration exists for a release when a party promises not to file suit against another party in exchange for payment. See American National Trust Co. v. Kentucky Fried Chicken of Southern California, Inc., 308 Ill.App.3d 106, 120, 241 Ill.Dec. 340, 719 N.E.2d 201 (1999) (rejecting argument that defendant "did not provide sufficient, separate consideration for the release" where stipulation provided that appellant "received more tha[n] $64,000 as consideration in exchange for releasing" claims); Hurd, 303 Ill.App.3d at 93, 236 Ill.Dec. 482, 707 N.E.2d 609 (finding "adequate consideration" where plaintiff, "by
¶ 50 Alternatively, Kulbarsh's position appears to be that the parties intended for the refund and rescission of the purchase to serve as consideration only for Kulbarsh's agreement to return the vehicle, and that the parties could not have intended for the repayment and rescission to represent consideration for Kulbarsh's release of claims against Rohr Burg. Our review of the General Release, however, leads us to the opposite conclusion. There is no indication in the contract's language that the refund and rescission of the purchase are intended to serve as consideration only for the return of the vehicle. To the contrary, the General Release ties the payment of consideration to Kulbarsh's release of claims. The agreement states that Kulbarsh "hereby accept[s] $21802.00, the repurchase amount and rescission of the contract, due to my concerns associated with the fact of a possible frame damage reported on an Autocheck Report of said vehicle," and the very next sentence states that Kulbarsh "release[s], and forever discharge[s] Rohr-burg Motors * * * from any and all obligations of any kind and nature that [Kulbarsh] may have against said Rohr-burg Motors." Construing these provisions together with the contract as a whole, we find the agreement evidences the parties' intention that the payment of $21,802 to Kulbarsh and the rescission of the original purchase served as consideration for his release of claims.
¶ 51 We recognize Kulbarsh's anger and feelings of having been the victim of dishonest treatment by Rohr Burg. Understandably, he sought to fight back in a manner he thought appropriate for the initial wrong that had been done to him. However, procedural and substantive rules which govern resolution of a dispute such as this are not based on emotion. So while we may empathize with the outrage which Kulbarsh experienced as a consumer at
¶ 52 Similarly, we reject Kulbarsh's argument that the release language was insufficiently specific to bar Kulbarsh's asserted claims against Rohr Burg. Kulbarsh's appellate briefs rely on case law supporting the premise that courts "restrict the language of a general release to the thing or things intended to be released" such that "[g]eneral words of release are inapplicable to unknown claims." This principle is correct, but under these facts does not serve to invalidate the release at issue here, which expressly contemplated the sort of claims asserted by Kulbarsh.
¶ 53 We recognize that a release applies to claims intended to be released, but that "a release will not be construed to include claims that were not within the contemplation of the parties." Goodman v. Hanson, 408 Ill.App.3d 285, 292, 349 Ill.Dec. 103, 945 N.E.2d 1255 (2011). Thus the mere fact that a document is titled a "general release" does not automatically constitute a valid release as to all unanticipated claims. See Gallagher, 226 Ill.2d at 236, 314 Ill.Dec. 133, 874 N.E.2d 43 (noting that "`general release' is a conclusory term, and determining whether particular language constitutes a general release is entirely a matter of construing that language"). Thus, "[i]f a release is a general release and the releasing party was unaware of other claims, the release is restricted to the specific claims contained in the release agreement." Goodman, 408 Ill.App.3d at 293, 349 Ill.Dec. 103, 945 N.E.2d 1255. On the other hand, "[w]here both parties were aware of an additional claim at the time of signing the release, the general release will be interpreted to release that claim as well." Id.
¶ 54 Applying these principles here, the language of the General Release indicates that the parties were aware of potential claims by Kulbarsh regarding the alleged damage to the vehicle and intended for such claims to be released. We note that the sentence in which Kulbarsh "release[s] and discharge[s]" Rohr Burg is immediately preceded by the statement that Kulbarsh "accept[s] * * * the repurchase amount and rescission of the contract, due to my concerns associated with the fact of a possible frame damage reported on an Autocheck Report of said vehicle" (emphasis added). From this language, it is apparent that the parties executed the General Release in contemplation of claims related to the existence of such damage. Thus, we reject the suggestion that the counterclaims asserted by Kulbarsh — which are premised on allegations regarding such vehicle damage — were unknown when the parties executed the release. To the contrary, the General Release makes clear that such claims were specifically contemplated and encompassed by the release.
¶ 55 Moreover, we note that even if the release here was initially unenforceable, Kulbarsh's retention of the payment made to him under the General Release independently ratified that release. "`If a releasor * * * retains the consideration after learning that the release is voidable, * * * continued retention of the benefits constitutes a ratification of the release.'" Hurd, 303 Ill.App.3d at 93, 236 Ill.Dec. 482, 707 N.E.2d 609 (quoting Seward v. B.O.C. Division of General Motors Corp., 805 F.Supp. 623, 632 (N.D.Ill.1992)); see also Golden v. McDermott, Will & Emery, 299 Ill.App.3d 982, 993, 234 Ill.Dec. 241, 702 N.E.2d 581 (1998) ("the retention of the consideration by one sui juris, with knowledge of the facts will amount to a ratification of a release executed by him in settlement of a claim,
¶ 56 We also reject Kulbarsh's argument that the General Release precluded Rohr Burg from suing Kulbarsh for his failure to return the vehicle. Kulbarsh's argument is premised upon the portion of the General Release stating that "[t]he Undersigned intends hereby to release all unknown and unanticipated claims, if any." Kulbarsh contends that since Sabzali signed the General Release, the "Undersigned" includes Rohr Burg as well as Kulbarsh, and thus Rohr Burg also released its right to assert claims against Kulbarsh. This argument is untenable. Although "the Undersigned" is not explicitly defined in the General Release, construing the contract as a whole it is clear that Kulbarsh is intended as the releasing party. Prior to using the term "Undersigned," the General Release recites that "I, Bruce D. Kulbarsh * * * do hereby accept * * * the purchase amount and rescission of the contract" and "[I]t is also understood that I, Bruce D. Kulbarsh do hereby acknowledge, remise, release and forever discharge [Rohr Burg] * * * from any and all obligation of any kind and nature that I may have against [Rohr Burg] * * *." In any event, even assuming that Rohr Burg was included in the definition of "Undersigned," this would not preclude Rohr Burg from suing to enforce the parties' obligations under release. As the trial court recognized, a party to a release "can sue on a release." Under Kulbarsh's logic, neither party could sue to enforce the very contract containing the release. Such an interpretation is illogical, as it would render the document unenforceable. The trial court correctly recognized that Rohr Burg sued to enforce the General Release since Kulbarsh had failed to return the vehicle. We agree with the trial court and reject the suggestion that the General Release precluded Rohr Burg from suing Kulbarsh for his breach of the same agreement.
¶ 57 Kulbarsh's next argument on appeal is that, even assuming the release was initially valid, it was voided by Rohr Burg's failure to deliver a negotiable check. Kulbarsh contends that this failure, together with Rohr Burg's conduct in driving Kulbarsh back from the bank and allowing him to retake possession of the vehicle, voided Kulbarsh's obligations under the General Release. Kulbarsh's appellate briefing cites case law supporting the principle that where a party has materially breached a contract, he cannot recover damages from the other party to the contract. The key term here is "material." That is, "[u]nder general contract principles, only a material breach of a contract provision by one party will justify nonperformance by the other." William Blair &
¶ 58 Here, even assuming the truth of Kulbarsh's testimony that the initial check did not clear and that he did not receive funds until a day or two afterward, the trial court could certainly find that this minor delay would not constitute a material breach that would void Kulbarsh's obligations under the General Release. Although the parties dispute whether Rohr Burg initially issued a nonnegotiable check to Kulbarsh, there is no dispute that Kulbarsh received the funds due to him within a few days after execution of the General Release. In his deposition, Kulbarsh recalled that, after Chase bank initially told him the check was denied for nonsufficient funds, he returned either the next day or a "couple days" later, at which time the check cleared. Kulbarsh's fourth affirmative defense also concedes that Rohr Burg's "checks cleared; that is, [Kulbarsh's] loan to the bank had been repaid and the Rohr Burg check made payable to [Kulbarsh] for the funds that he had used to buy the vehicle had cleared."
¶ 59 In light of Kulbarsh's admission that he received the full monetary consideration called for by the General Release within a short time period, any initial failure to provide a negotiable check would not constitute a material breach that would invalidate Kulbarsh's obligations under the release. A slight delay of payment due under a contract that does not specify a time for payment will not constitute a material breach that excuses nonperformance by the other party. See, e.g., Midwest Television, Inc. v. Oloffson, 298 Ill.App.3d 548, 558, 232 Ill.Dec. 783, 699 N.E.2d 230 (1998) (employer's late payment of bonuses under contract did not support former employee's affirmative defense of unclean hands, as "[m]inor delays in such payments do not constitute substantial nonperformance and a material breach of the contract"); Israel v. National Canada Corp., 276 Ill.App.3d 454, 460, 213 Ill.Dec. 163, 658 N.E.2d 1184 (1995) (lender's delays in funding borrower's requests for disbursement did not constitute material breach of loan agreement, as it was "uncontroverted that each of these requests was ultimately funded" and thus the "delays would constitute, at most, a partial breach of the loan agreement"). Thus, we agree with the trial court that, as there was no dispute that the check at issue "did clear within the week," the question of whether Rohr Burg's initial check was negotiable did not present an issue of material fact precluding summary judgment. Moreover, contrary to Kulbarsh's assertion that the parties treated the General Release as "null and void" after issuance of a nonnegotiable check, we again note that Kulbarsh's retention of the funds
¶ 60 Having concluded that the release barred Kulbarsh's counterclaims, we turn to that portion of the order that granted summary judgment with respect to the first four affirmative defenses asserted by Kulbarsh in response to Rohr Burg's complaint. The first three affirmative defenses at issue allege fraud, misrepresentation, and breach of the General Release. These three defenses rely on the same premise: that because the initial refund check was denied for nonsufficient funds, Kulbarsh's obligation to return the vehicle under the General Release was voided. The first two affirmative defenses, fraud and misrepresentation, consist of identical allegations that "Rohr Burg misrepresented a material fact in that it stated that it was giving [Kulbarsh] a check that was negotiable" and that the check "failed to clear because there were nonsufficient funds in the account." The third affirmative defense claims that "Rohr Burg breached the [General Release] by failing to give [Kulbarsh] a check that was negotiable." Thus, the first three affirmative defenses argue that Kulbarsh's obligation to return the car was voided by Rohr Burg's alleged initial failure to provide a negotiable check.
¶ 61 This argument fails since, as discussed above in the context of enforcement of the release, the admissions and pleadings establish that any such breach was not sufficiently material to excuse Kulbarsh's nonperformance. Kulbarsh admitted that he received payment, at the latest, a "couple days" after the allegedly invalid check, and such a slight delay does not constitute a material breach that excuses Kulbarsh from his obligations under the General Release. Just as the alleged minor delay in payment did not invalidate Kulbarsh's release of claims, it also does not serve as an affirmative defense invalidating his additional obligation under the same contract, to return the vehicle. As such, the first three affirmative defenses were properly dismissed by the trial court.
¶ 62 Finally, the fourth affirmative defense asserted by Kulbarsh consists of statements that "[a]fter the written contract was voided" by the nonnegotiable check, Rohr Burg submitted checks that "cleared," such that Kulbarsh's "loan to the bank had been repaid, and the Rohr Burg check made payable to [Kulbarsh] for the funds that he had used to buy the vehicle had cleared." This affirmative defense states that after these payments, "title to the vehicle was sent by [American Eagle] Bank to Rohr Burg, and thereafter [Kulbarsh] * * * returned the vehicle." These contentions do not constitute an affirmative defense to Kulbarsh's obligation to return the vehicle, but rather amount to a denial of the complaint's allegation that Kulbarsh wrongfully retained the vehicle after receiving payment.
¶ 63 "The test for whether a defense is an affirmative defense is whether the defense gives color to the opposing party's claim and then asserts [a] new matter by which the apparent right is defeated." American Family Mutual Insurance Co. v. Albers, 407 Ill.App.3d 569, 573, 348 Ill.Dec. 183, 943 N.E.2d 791 (2011); Vanlandingham v. Ivanow, 246 Ill.App.3d 348, 357, 186 Ill.Dec. 304, 615 N.E.2d 1361 (1993). Thus, the mere denial of an element of a cause of action, without asserting any new matter, does not constitute an affirmative defense. Our supreme court recognized this in the context of a product liability action, explaining that a denial of the element of proximate cause is not an affirmative defense:
¶ 64 Here, the contentions in the fourth affirmative defense do not assert a new matter to defeat Rohr Burg's apparent right to recover. Rather, the statement that Kulbarsh returned the vehicle after receiving payment simply denies Rohr Burg's allegation that Kulbarsh remained in possession of the vehicle after receiving the funds due to him under the General Release. As this does not constitute a separate affirmative defense, the fourth affirmative defense was also properly dismissed by the trial court.
¶ 65 For the foregoing reasons, we affirm the judgment of the circuit court of Cook County.
¶ 66 Affirmed.
Justices HOFFMAN and DELORT concurred in the judgment and opinion.
