FIRST DIVISION
May 17, 2004

JUSTICE McNULTY delivered the opinion of the court:

A settlement agreement required Lawrence Foley to payPatrick Milligan $150,000 out of the proceeds of a sale of assetsto Gerald Gorman. The agreement also required Gorman to take allsteps necessary at the closing to cause Foley to make the paymentto Milligan. Foley did not pay Milligan, and a default judgmentagainst Foley proved partially unenforceable. Milligan suedGorman for breach of the settlement agreement. The court foundthat Gorman failed to take the steps necessary at the closing toprotect Milligan, in breach of the agreement. The court awardedMilligan the unpaid balance of the settlement amount, but thecourt refused to grant Milligan's request for prejudgmentinterest. Gorman appeals from the judgment and Milligan cross-appeals from denial of prejudgment interest.

We hold that credible evidence supported the trial court'sfinding that Gorman breached the contract. When Gorman failed totake steps at the closing to cause payment to Milligan, he andFoley both became debtors to Milligan, within the meaning of theInterest Act (the Act) (815 ILCS 205/2 (West 1998)). Because thedebt met statutory criteria for the award of interest, the trial  court erred by denying Milligan's request for prejudgmentinterest. Thus, we affirm in part and reverse in part, and weremand for recalculation of the judgment amount.

On October 2, 1998, Foley agreed to sell the assets of hisautomobile dealership to Ridge Chrysler Plymouth, which Gormanowned. Three weeks later, Foley agreed to sell the same assetsto Milligan. When Gorman learned of the later agreement, he andRidge sued for specific performance of their contract. Milligansought to intervene and filed his own complaint for specificperformance of the agreement to sell the assets to him.

On November 18, 1998, the parties settled the case. Thesettlement specified:

"2. Foley agrees to pay the sum of $150,000.00(one hundred fifty thousand dollars) to Milligan at thetime of closing of the Buy-Sell Agreement between Foleyand Gorman/John Barnard for the Dealership assets.

3. Foley and Gorman agree to take all necessarysteps at closing to cause the $150,000.00 paymentreferred to in paragraph 2 to be paid to Milligan inCashier's funds out of the proceeds of the closing ofthe Foley-Gorman/Barnard Buy-Sell for the Dealershipassets."

Milligan's attorney wrote to Gorman's attorney on February4, 1999, seeking notification of the time and place of theclosing so the attorney could arrange to receive Milligan'scheck. Neither Gorman nor his attorneys sent any writtenresponse to the letter. Gorman and Foley closed the sale onFebruary 10, 1999. Neither Milligan nor his attorney attendedthe closing. At the closing Foley signed a separate agreement toindemnify Gorman and Ridge for any claim Milligan might fileagainst them. Gorman paid the full price due under the salescontract. Foley and Gorman issued no check payable to Milliganand the closing statement showed no allocation of funds toMilligan. Milligan received no proceeds from the sale.

Milligan sued Foley, Ridge and Gorman on March 2, 1999, forbreach of the settlement agreement. Gorman filed a cross-claimagainst Foley for indemnification. Foley separately sued Gorman,claiming that Gorman's accountants undervalued Foley's assets atthe closing, and therefore Gorman had paid less than the amountproperly due under the contract for sale of the dealershipassets. Gorman and Foley settled the case when Gorman agreed topay Foley an additional $126,000.

Gorman notified Milligan of the settlement and Milliganobtained a default judgment against Foley for $171,575.34. Milligan served a citation to discover assets on Foley'sattorney. By order dated November 30, 2001, the court permittedthe attorney to retain $26,000 as his fee, and ordered theattorney to pay Milligan the balance of $100,000. Milliganreceived the payment on December 3, 2001.

On July 24, 2002, trial began on Milligan's claim againstGorman and Ridge. Gorman admitted that he did not call Milliganto inform him of the closing, but he testified that he toldRichard Carr, one of his attorneys, to call Milligan. Accordingto Gorman, Carr reported repeatedly calling Milligan's office onthe day of closing, but he could not contact Milligan. Foley'sattorney then said he would accept the full payment and he wouldsend Milligan his share of the proceeds.

Carr testified that Gorman never asked him to call Milligan,Carr never called Milligan, and Carr did not tell Gorman that hehad tried to call Milligan.

Foley's attorney swore that he never said he would acceptMilligan's money and send it to Milligan. The attorney admittedthat an escrow account used in the sale held $150,000. He knewof no reason for failing to send that money to Milligan, apartfrom "the decision of the clients." The attorneys discussedMilligan's interest with Foley and Gorman, and admitted that nocourt order required payment to Milligan. Gorman agreed to"permit the transaction to close without Milligan being paid outof the proceeds as long as Foley would sign an IndemnificationAgreement."

Milligan sought to introduce evidence of Gorman's financesto aid the court in assessing punitive damages. The judge said:

"I don't think this is much different than apersonal guarantee on a loan for a bank. *** [I]f weassess punitive damages, then everybody who didn't ***pay money when owed [should pay punitive damages]. ***I'm going to stick to my guns on the punitive."

The court disallowed the proffered evidence of Gorman's finances.

The court held that Gorman breached the settlement contract:

"[W]hen the agreement calls for [Gorman] to takeall necessary steps, I frankly don't see [Gorman]taking all necessary steps. [Gorman] took allnecessary steps to close the deal and get thedealership, but [Gorman] had another agreement whichwas to take all necessary steps to get Milligan paidand that wasn't done."

The court entered judgment in favor of Milligan for the $50,000he could not recover from Foley, but the court, withoutexplanation, denied Milligan's request for prejudgment interest.

On appeal, Gorman argues first that the judge misunderstoodthe settlement agreement as including a personal guarantee. Whenthe court sustained Gorman's objection to evidence of hisfinances, the court first noted that Gorman's commitment appearednot "much different than a personal guarantee on a loan." Thecomment, in context, does not show that the judge considered thisa guarantee any more than it proved that she thought that thecase involved a loan. The judge explained that if she awardedpunitive damages here, she should probably award them in allcases where a party fails to pay money when due. The judge'sruling at the end of trial shows that the court correctlyunderstood the settlement and held Gorman to his word that hewould take all steps necessary to cause payment to be made toMilligan at the closing. The judge relied solely on the words ofthe agreement, and not on an analogy to guarantees, in findingGorman liable for breach of the agreement. The record as a wholeshows that the court did not misunderstand the agreement. SeePeople v. Thurmond, 317 Ill. App. 3d 1133, 1141 (2000).

Next, Gorman contends that the evidence does not prove abreach of contract. We will not reverse the court's finding of abreach unless it is contrary to the manifest weight of theevidence. Amalgamated Bank of Chicago v. Kalmus & Associates,Inc., 318 Ill. App. 3d 648, 655 (2000).

Despite Milligan's explicit request, Gorman did not notifyhim of the time and place of the closing. Gorman testified thathe told his attorney to call, but his attorney refuted thetestimony. Gorman also swore that Foley's attorney said he wouldsend the appropriate amount to Milligan, but Foley's attorneyswore that he said nothing of the sort. The closing statementshowed a complete allocation of funds for the transaction, withno funds allocated to Milligan. The trial court found theattorneys more credible than Gorman. We cannot say that theattorneys' testimony is so inherently incredible that we canoverturn the court's credibility determination. See Jones v.Consolidation Coal Co., 174 Ill. App. 3d 38, 44 (1988).

The evidence as a whole shows that Foley wanted to leaveMilligan out of the closing, as long as the parties could do sowithout risking contempt of court. Gorman agreed to closewithout allocating payment to Milligan once Foley agreed toindemnify Gorman for any claim Milligan made. The credibletestimony amply supports the court's finding that Gorman breachedhis agreement to take all steps necessary to cause Foley to makethe required payment to Milligan. We affirm the judgment findingGorman liable to Milligan for breach of contract.

On the cross-appeal Milligan claims that the court erred byrefusing to award him prejudgment interest. Section 2 of the Actprovides:

"Creditors shall be allowed to receive at the rateof five (5) per centum per annum for all moneys afterthey become due on any bond, bill, promissory note, orother instrument of writing ***." 815 ILCS 205/2 (West1998).

Gorman does not deny that the written settlement agreementis an "instrument of writing" within the meaning of the Act. SeeCummings v. Beaton & Associates, Inc., 249 Ill. App. 3d 287, 318(1992). Gorman argues that Foley is the only debtor under theagreement, and therefore Milligan is Foley's creditor, but notGorman's creditor.

This court generally accords deference to a trial court'sdecision on a request for interest on a judgment. See Bank ofChicago v. Park National Bank, 266 Ill. App. 3d 890, 900 (1994). The Act allows considerable discretion for determination ofwhether an unreasonable delay warrants an award of prejudgmentinterest. See John Kubinski & Sons, Inc. v. Dockside DevelopmentCorp., 33 Ill. App. 3d 1015, 1023 (1975). But the Act mandatesprejudgment interest, as a matter of right, when the creditorseeks payment of a fixed sum on an instrument of writing. NewHampshire Insurance Co. v. Hanover Insurance Co., 296 Ill. App.3d 701, 706-07 (1998). This court will not disturb the trialcourt's findings of fact pertinent to prejudgment interest unlessthose findings are contrary to the manifest weight of theevidence. Krantz v. Chessick, 282 Ill. App. 3d 322, 327 (1996). But we review issues of law de novo. Joel R. v. Board ofEducation of Mannheim School District 83, 292 Ill. App. 3d 607,613 (1997). Thus, when the parties have not disputed factsshowing a fixed debt on a written instrument, this court has notdeferred to the trial court's denial of interest. See Kubinski,33 Ill. App. 3d at 1023-24; Tomaso v. Plum Grove Bank, 130 Ill.App. 3d 18, 29 (1985).

Gorman admits that Milligan is a creditor under thesettlement agreement, within the meaning of the Act, but Gormanclaims that the agreement makes only Foley the debtor. The Actdoes not define the terms "creditor" and "debtor." Thus, we lookto the purposes of the Act to aid in construction of those terms.Langendorf v. City of Urbana, 197 Ill. 2d 100, 109 (2001).

The Act directs the award of prejudgment interest to fullycompensate the injured party for the monetary loss suffered. McKenzie Dredging Co. v. Deneen River Co., 249 Ill. App. 3d 694,698 (1993).

"If a creditor is denied payment of a sum rightfullyhis, he loses not only that sum but the right to useit. In our society the use of money is worth money." Haas v. Cravatta, 71 Ill. App. 3d 325, 332 (1979).

When a written instrument establishes an amount due and the timefor payment, the creditor has a right to interest. Tomaso, 130 Ill. App. 3d at 29.

A written instrument may make more than one person a debtorfor purposes of the Act. Thus, in Ricci v. Reed, 169 Ill. App.3d 1062, 1067-68 (1988), the recipient of a loan defaulted andthe lender sued the loan's guarantor. The appellate courtdirected the trial court to award the lender prejudgment interestfrom the date the recipient owed repayment. See also KFK Corp.v. American Continental Homes, Inc., 71 Ill. App. 3d 304, 314-15(1979).

The United States Court of Appeals for the Seventh Circuitconstrued the Act in Mutual Service Casualty Insurance Co. v.Elizabeth State Bank, 265 F.3d 601 (7th Cir. 2001). In that casea cooperative had an account with the defendant bank, and thewritten deposit agreement for the account listed the persons withauthority to sign checks for withdrawals from the account. Anofficer of the cooperative presented to the bank checks on theaccount with his signature. Although the deposit agreement didnot list the officer as one with authority to sign checks, thebank cashed the checks. By taking cash from the checks theofficer embezzled $83,000 from the cooperative. Mutual Service,265 F.3d at 609. The cooperative's insurer reimbursed thecooperative for the loss and then sued the bank for breach of thedeposit agreement. The trial court entered judgment in favor ofthe insurer, and the court granted the insurer prejudgmentinterest under the Act. Mutual Service, 265 F.3d at 611.

The court of appeals held that the deposit agreementqualified as an instrument of writing under the Act. When thebank breached the deposit agreement by improperly cashing thechecks, it became a debtor, and the cooperative became a creditorunder the agreement, within the meaning of the Act. MutualService, 265 F.3d at 629. The court of appeals ordered the trialcourt to recalculate the amount of prejudgment interest toreflect the time that the insurer lost use of the money.

Gorman breached the settlement agreement when he paid Foleywithout taking any steps necessary to cause payment to Milligan. Under the reasoning of Mutual Service, Gorman then became adebtor, and Milligan became Gorman's creditor. Foley also owedpayment to Milligan, but the officer who embezzled money from thecooperative also owed the cooperative the money taken. That debthad no effect on the bank's status as a debtor when it breachedthe contract. See also Madison Park Bank v. Field, 64 Ill. App.3d 838, 843 (1978). Here, as in Mutual Service, the Act mandatedan award of prejudgment interest for the time that the plaintifflost use of the money.

Our decision serves the purposes of the Act. The agreementestablished Milligan's right to use of the fixed amount of$150,000 from the date of the closing, February 10, 1999. Gorman's breach of contract caused Milligan to lose use of thatmoney for that time, and the Act protects Milligan's right tocompensation for that loss.

The record as a whole shows that the trial court correctlyunderstood the settlement agreement, and the evidence supportedthe finding that Gorman did not take the steps necessary at theclosing to cause payment to Milligan of $150,000. When Gormanbreached the contract by making the payment to Foley withoutproperly protecting Milligan's interests, he became a debtor toMilligan, within the meaning of the Act. Therefore, under theAct, the court must award Milligan prejudgment interest on thedebt. We affirm the judgment against Gorman but we remand for anaward of appropriate prejudgment interest.

Affirmed in part and reversed in part; cause remanded.

O'MALLEY, P.J. and McBRIDE, J., concur.