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Berryman Transfer & Storage Co. v. New Prime, Inc.
State: Illinois
Court: 4th District Appellate
Docket No: 4-03-0345 Rel
Case Date: 01/15/2004

NO. 4-03-0345

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

BERRYMAN TRANSFER AND STORAGE COM-
PANY, INC.,
                    Plaintiff-Appellant,
                    v.
NEW PRIME, Inc., d/b/a/ PRIME, INC.,
                    Defendant-Appellee.
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Appeal from
Circuit Court of
Sangamon County
No. 96CH205

Honorable
Robert J. Eggers,
Judge Presiding.


JUSTICE STEIGMANN delivered the opinion of the court:

In September 1996, plaintiff, Berryman Transfer andStorage Company, Inc. (Berryman), sued defendant, New Prime,Inc., d/b/a Prime, Inc. (Prime), seeking to enforce an August1995 contract between the parties. In June 2001, Berryman filedits second-amended complaint.

In October 2002, following a bench trial, the trialcourt entered judgment in Prime's favor.

Berryman appeals, arguing that the trial court erred byfinding that paragraph eight of the parties' contract was ambiguous and entering judgment in Prime's favor. We reverse andremand for the trial court to enter judgment in Berryman's favorand assess damages.

I. BACKGROUND

Because the parties are familiar with the evidencepresented at the September 30 through October 1, 2002, benchtrial, we review it only to the extent necessary to put theparties' arguments in context.

Berryman and Prime were both companies in the businessof transporting goods via truck and brokering the transportationof goods. When Berryman acted as a broker, a customer (theshipper) paid Berryman to transport its goods. Berryman, inturn, found a contract carrier to transport those goods. Berryman made money when it found a contract carrier to transportthe goods for an amount less than it had been paid by itscustomer. Berryman commonly referred to its customers as its"accounts."

In 1995, one of Berryman's accounts was NicholsAluminum, Inc. (Nichols), located in Lincolnshire, Illinois. InAugust 1995, Berryman entered into a contract with Prime,pursuant to which Prime agreed to work as a contract carrier forBerryman. Paragraph eight of the parties' contract provided asfollows:

"Carrier understands and agrees that[b]roker has put forth substantial effort andinvestment in order to develop its accountsand it will at no time during the term ofthis [a]greement, and for a period of one (1)year after the effective date of terminationof this [a]greement, either directly orindirectly, attempt to solicit, divert, by-pass, back-solicit[,] or perform any servicesfor compensation for any account of [b]rokerwhich [b]roker has secured and has previouslytendered to [c]arrier for transportation,unless [b]roker has given prior writtenauthorization. In the event that [c]arrierviolates the terms of this section, [c]arriershall be liable to [b]roker for the normaland customary commission which [b]roker wouldhave received for each individual movement,and [c]arrier shall deliver said amount to[b]roker within thirty (30) days afterbilling of the shipper."

Pursuant to the contract, Berryman tendered to Prime fourshipments of Nichols's goods, from Nichols's Lincolnshirefacility to a California destination. In early February 1996,Berryman agents were at Nichols's Lincolnshire facility when theynoticed that Prime was independently shipping for Nichols. Berryman then pursued its right to commissions under paragrapheight of its contract with Prime, resulting in this lawsuit.

At the bench trial, Michelle Wagner, Nichols'smaterials manager, testified that Berryman had been a carrier forNichols since around 1990. In 1995, Berryman was handling about25% to 30% of Nichols's shipping from the Lincolnshire facility.

Wagner further testified that Nichols first hired Primeas one of its carriers in January 1996. She acknowledged thatprior to that time, Nichols had paid Prime for shipping jobs as a"third[-]party payer." Wagner explained that some of Nichols'sproduct was shipped to a Kentucky company, Worldsource, to bepainted. Worldsource was then responsible for arranging theshipping of the painted product to Nichols's customers, eventhough Nichols covered the cost of that shipping. Worldsourcehad hired Prime to do some of its shipping of Nichols's product. As a result, between October 1994 and July 1995, Nichols paidPrime a total of $53,221.34 for shipping its goods fromWorldsource to Nichols's customers.

Prime argued at trial that paragraph eight of thecontract did not require Prime to pay Berryman a commission forshipping jobs Prime did for Nichols because Nichols was a pre-existing account of Prime.

At the conclusion of the trial, the trial court ruledin Prime's favor, upon finding that Nichols was an account ofPrime when Prime moved Nichols's product from Worldsource toNichols's customers prior to Berryman and Prime entering into theAugust 1995 contract. The court further stated, in pertinentpart, as follows:

"[T]he evidence in this case suggests andsupports a finding by the [c]ourt that Primewas doing business with [Nichols] for somemonths prior to the time that the contractbinding the parties here was entered into. *** It seems to me that the document isambiguous, at least to the extent that issuesarise as to what happens if the carrier under[p]aragraph [eight] has previously donebusiness with the, what's the phrase that'sused in here, the account. I would haveabsolutely no problem awarding damages to[Berryman] if [Prime] had not billed and donebusiness with [Nichols] prior to that--priorto the date of the contract."

This appeal followed.

II. ANALYSIS

Berryman argues that the trial court erred bydetermining that paragraph eight of the contract was ambiguous. We agree.

The determination of whether a contract is ambiguous isa question of law; we thus review that determination de novo. Shields Pork Plus, Inc. v. Swiss Valley Ag Service, 329 Ill. App.3d 305, 311, 767 N.E.2d 945, 949 (2002). A contract is ambiguouswhen its language is "'susceptible to more than one meaning[citation] or is obscure in meaning through indefiniteness ofexpression.'" Shields Pork Plus, 329 Ill. App. 3d at 310, 767N.E.2d at 949, quoting Wald v. Chicago Shippers Ass'n, 175 Ill.App. 3d 607, 617, 529 N.E.2d 1138, 1145 (1988).

The trial court found paragraph eight to be ambiguousbecause it did not address whether it applied when, as in thiscase, the contract carrier had previously done business with thebroker's account. We disagree with the court's determinationthat the absence of an exception for preexisting businessrelationships constitutes an ambiguity in the contract terms. Pursuant to paragraph eight of the contract, Prime agreed not toperform any service for compensation during the term of thecontract (and for a period of one year thereafter) for anyaccount that Berryman had tendered to Prime, without payingBerryman the customary commission. Paragraph eight provides oneexception--namely, when Berryman provides "prior writtenauthorization." Paragraph eight does not provide an exceptionfor Berryman accounts for whom Prime had previously worked. Inruling as it did, the court, in essence, added that exception toparagraph eight and thus provided Prime with a better bargainthan Prime had negotiated for itself.

Illinois recognizes a strong presumption againstprovisions that easily could have been included in a contract butwere not. Miner v. Fashion Enterprises, Inc., 342 Ill. App. 3d405, 417, 794 N.E.2d 902, 914 (2003). Further, "the rights ofparties to a contract are limited by the terms expressed in thecontract and courts may not rewrite language or add provisions tomake the agreement more equitable." Jewelers Mutual InsuranceCo. v. Firstar Bank Illinois, 341 Ill. App. 3d 14, 26, 792 N.E.2d1, 11 (2003) (McBride, P.J., specially concurring in part anddissenting in part); Shields Pork Plus, 329 Ill. App. 3d at 312,767 N.E.2d at 950 (recognizing that courts will not add terms toa contract about which the contract is silent); Frederick v.Professional Truck Driver Training School, Inc., 328 Ill. App. 3d472, 481, 765 N.E.2d 1143, 1152 (2002) (quoting Owens v.McDermott, Will & Emery, 316 Ill. App. 3d 340, 349, 736 N.E.2d145, 154 (2000), for the "well-established" rule that "'where theterms of a contract are clear and unambiguous, they must beenforced as written, and no court can rewrite a contract toprovide a better bargain to suit one of the parties'"). Accordingly, we conclude that the trial court erred bydetermining that the contract was ambiguous because it failed toprovide an exception for Prime's preexisting businessrelationships and entering judgment in Prime's favor.

III. CONCLUSION

For the reasons stated, we reverse and remand for thetrial court to enter judgment in Berryman's favor and assessdamages.

Reversed and remanded.

APPLETON, J., concurs.

COOK, J., dissents.


JUSTICE COOK, dissenting:

I respectfully dissent and would affirm the decision ofthe trial court.

Berryman and Prime, trucking companies, entered into acontract on August 14, 1995, under which Prime agreed to makeshipments, as requested by Berryman, which Berryman hadpreviously contracted to make for various shippers. The contractwas a fill-in-the-blank standard-form contract regularly used byBerryman. The contract did not identify any shippers by name.

The contract provided that Prime would not solicit "any accountof [Berryman] which [Berryman] has secured and has previouslytendered to [Prime] for transportation." If Prime violated thatprovision, Prime "shall be liable to [Berryman] for the normaland customary commission which [Berryman] would have received." In August and September 1995, pursuant to the contract, Berrymanrequested that Prime make some shipments for Nichols. Then inJanuary 1996, Prime made some shipments for Nichols without anyinvolvement by Berryman.

The problem is that prior to the date of the contract,Prime was already making shipments for Nichols. Some ofNichols's product was shipped to a Kentucky company, Worldsource,where it was painted and shipped on to Nichols's customers. Worldsource hired Prime to do some of that shipping, but it wasNichols's product that was being shipped, and it was Nichols thatpaid Prime for the shipment.

Michelle Wagner testified that she is the materialsmanager at Nichols. According to Wagner, Nichols paid Prime$53,221.34 for shipping services between October 1994 and July1995 for the shipments from Worldsource in Hawesville, Kentucky. On October 3, 1994, Prime was given a supplier identificationnumber by Nichols. On October 24, 1994, Kevin Hanks of Primecontacted Nichols to solicit its business. On November 21, 1994,Nichols requested Prime's federal identification number. In May1995, Hanks sent rate proposals to Nichols, quoting rates fromLincolnshire, from Hawesville, and from other locations. InJanuary 1996, Nichols began direct use with Prime, due to anincrease in shipments to a customer in Helena, Arkansas. Wagner,who was unaware of the contract between Berryman and Prime, feltthat many of the loads Berryman complained of, which had beengiven to Prime, would not have been given to Berryman: "If Primewouldn't have been able to, I would have called other carriers,not Berryman. They were not an area that Berryman typicallycovered for us, or we didn't have a good rate at that time."

The majority chooses to decide this case on the basisof legal rules and to ignore the intent of the parties. Themajority assumes that any work Prime does for Nichols during theterm of the contract (and for a period of one year thereafter)requires Prime to pay Berryman a commission. The only exceptionis where Berryman "provides 'prior written authorization.'" Slipop. at 6. There is no "exception for Berryman accounts for whomPrime had previously worked." Slip op. at 6. "In ruling as itdid, the court, in essence, added that exception to paragrapheight and thus provided Prime with a better bargain than Primehad negotiated for itself." Slip op. at 6.

The modern approach to contract law is to attempt tointerpret contracts as the parties and business people wouldinterpret them. Course of dealing, usage of trade, and course ofperformance may be considered to explain or supplement the termsof an agreement even without a determination that the agreementis ambiguous. 810 ILCS Ann. 5/2-202, Uniform Commercial CodeComment (1)(a) (Smith-Hurd 1993) (rejecting the premise that thelanguage used has the meaning attributable to it by legal rulesof construction rather than the meaning that arises out of thecommercial context in which it was used); see also Towne Realty,Inc. v. Shaffer, 331 Ill. App. 3d 531, 545, 773 N.E.2d 47, 58(2002) (Cook, J., dissenting) (rule of construction againstdrafter does not attempt to discern intent of parties but simplydecides who will win the case, like flipping a coin). "Ininterpreting a contract, it is axiomatic that the primary goal isto give effect to the intent of the parties." Putnam v. Villageof Bensenville, 337 Ill. App. 3d 197, 209, 786 N.E.2d 203, 211(2003); see also Shields Pork Plus, 329 Ill. App. 3d at 310, 767N.E.2d at 949.

The courts have come to disfavor strict contractinterpretation and have recognized the impossibility ofascertaining the intended meaning of an agreement withoutreference to evidence of surrounding circumstances, even thoughthe agreement at issue was not "ambiguous." First Bank & TrustCo. of Illinois v. Village of Orland Hills, 338 Ill. App. 3d 35,47-48, 787 N.E.2d 300, 310-11 (2003); cf. Air Safety, Inc. v.Teachers Realty Corp., 185 Ill. 2d 457, 463-64, 706 N.E.2d 882,885 (1999) (retaining "four-corners rule" for determiningambiguity where contract contains an explicit integrationclause); see 810 ILCS 5/2-202(b) (West 2002) (consistentadditional terms not reduced to writing may not be proved ifwriting intended as a complete and exclusive statement of theterms of the agreement). "'The meaning of words cannot beascertained in a vacuum.'" URS Corp. v. Ash, 101 Ill. App. 3d229, 234, 427 N.E.2d 1295, 1299 (1981), quoting Ortman v. StanrayCorp., 437 F.2d 231, 234-35 (7th Cir. 1971); Michael Nicholas,Inc. v. Royal Insurance Co. of America, 321 Ill. App. 3d 909,915, 748 N.E.2d 786, 792 (2001) (insurance contract). "Aninsurance policy is not to be interpreted in a factual vacuum***. What at first blush might appear unambiguous in theinsurance contract might not be such in the particular factualsetting in which the contract was issued." Glidden v. FarmersAutomobile Insurance Ass'n, 57 Ill. 2d 330, 336, 312 N.E.2d 247,250 (1974). "'[N]o form of words, no matter how allencompassing, will foreclose scrutiny of a release [citation] orprevent a reviewing court from inquiring into surroundingcircumstances to ascertain whether it was fairly made andaccurately reflected the intention of the parties.'" Carlile v.Snap-on Tools, 271 Ill. App. 3d 833, 839, 648 N.E.2d 317, 321(1995), quoting Ainsworth Corp. v. Cenco, Inc., 107 Ill. App. 3d435, 439, 437 N.E.2d 817, 821 (1982).

The majority recites the catchphrase that "Illinoisrecognizes a strong presumption against provisions that easilycould have been included in a contract but were not." Slip op.at 6. Under that principle, we could rule for either of theparties in this case: Prime could have included a provision thatno commission was due on shipments related to Prime's precontractdealings with Nichols; Berryman could have included a provisionthat a commission was due on such shipments. Under themajority's approach, every contract dispute should be dismissedbecause the parties could have included language that would havemade the contract clear. The cases that apply the phrase,however, are not cases involving uncertain language, but caseswhere the language is beyond dispute. See Klemp v. HergottGroup, Inc., 267 Ill. App. 3d 574, 580, 641 N.E.2d 957, 962(1994) (plain language of agreement clearly indicated defendantswere only required to pursue rezoning before the city council);Cress v. Recreation Services, Inc., 341 Ill. App. 3d 149, 185,795 N.E.2d 817, 850 (2003) (parties made no attempt to limitmeasure of damages available on breach).

Shields Pork Plus, cited by the majority in support ofthe presumption "'against provisions that easily could have beenincluded in the contract but were not,'" was actually critical ofthe presumption and refused to apply it. Shields Pork Plus, 329Ill. App. 3d at 312, 767 N.E.2d at 950, quoting Klemp, 267 Ill.App. 3d at 581, 641 N.E.2d at 962 (parties did include term; factthat it was ill-defined did not mean parties intended contract tobe silent as to that term). The presumption at best restates theobvious: if the contract says "orange," it should not be read tosay "blue." If the parties wanted to say "blue," they couldeasily have done so.

Modern authorities have considered the course ofdealing between the parties even absent a finding of ambiguity. See 810 ILCS 5/2-202, 1-205 (West 2002). In the present case,however, it is clear an ambiguity exists. When the language usedis susceptible to more than one meaning or is obscure in meaningthrough indefiniteness of expression, a contract is properlyconsidered ambiguous. Wald v. Chicago Shippers Ass'n, 175 Ill.App. 3d 607, 617, 529 N.E.2d 1138, 1145 (1988). Does thelanguage, "for any account of [Berryman] which [Berryman] hassecured," include accounts Berryman did not secure but which werePrime's preexisting accounts? Does the language, "shall beliable to [Berryman] for the normal and customary commissionwhich [Berryman] would have received," require payment forcommissions Berryman would not have received? It is not at allclear that those questions should be answered in the affirmative. The contract is ambiguous.

While the question whether an ambiguity exists is oneof law, the question of the effect of that ambiguity is one offact. We will not disturb a trial court's finding of fact unlessit is manifestly against the weight of the evidence, as thatcourt is in a superior position to determine credibility, weighevidence, and determine the preponderance thereof. Rybicki v.Anesthesia & Analgesia Associates, Ltd., 246 Ill. App. 3d 290,301, 615 N.E.2d 1236, 1244 (1993). The trial court found "thatPrime was doing business with this company [Nichols] for somemonths prior to the time that the contract binding the partieshere was entered into." The trial court found "that the documentis ambiguous, at least to the extent that issues arise as to whathappens if the carrier under [p]aragraph [eight] has previouslydone business with the, what's the phrase that's used in here,the account." Based on Wagner's testimony that the productshipped to Worldsource was always Nichols's product, from thetime that it went to Worldsource, while it was at Worldsource,and after it left Worldsource until it reached the ultimateconsumer, the trial court found "that in fact this was an accountof Prime prior to the date of the contract." The trial court'sdecision was not contrary to the manifest weight of the evidence.

There is another way to look at this case. Even if weassume no ambiguity and refuse to look outside the contract,Berryman is entitled to a commission only on accounts it "hassecured and previously tendered" to Prime. Berryman is onlyentitled to commissions which it "would have received" for aparticular movement. The trial court was entitled to concludethat Berryman did not secure and tender the Nichols business toPrime, that Prime had already done business with Nichols, andwould have received the shipments complained of even without therelationship with Berryman. Berryman had to prove that thecomplained-of work was on an account it had secured and tenderedto Prime. Berryman failed to do so. The amazing thing about themajority's holding is that if Prime had done nothing more thancontinue to make Nichols's Worldsource shipments as it had beendoing since 1994, Prime would have owed Berryman a commission onany shipments after the date of the contract, August 14, 1995. Those shipments were certainly not secured by Berryman, but themajority would read that requirement out of the contract.

The argument could be made that, in determining Nicholswas not an account secured by Berryman and tendered to Prime, thetrial court rendered the contract meaningless. That argumentwould be incorrect. The contract applied to any shipmentstendered by Berryman to Prime, not just the Nichols shipments. There may have been shippers other than Nichols, where Berrymanin fact secured the account and tendered it to Prime.



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