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FIRST DIVISION
December 22, 2008

No. 1-08-0161

CFC INVESTMENT, L.L.C., ) Appeal from the
) Circuit Court
Plaintiff-Appellant, ) of Cook County.
)

v. )
) No. 04 L 24

DANIEL E. MCLEAN, individually and )

doing business as MCL COMPANIES, ) Honorable

) Daniel J. Kelley,
Defendant-Appellee. ) Judge Presiding.
JUSTICE WOLFSON delivered the opinion of the court:
CFC Investment sued Daniel McLean for breach of a contract to
purchase CFC's interest in a real estate venture. McLean answered
that he never offered to buy CFC's interest. That is, there was no
contract. The trial court entered judgment on the jury's verdict in
favor of McLean. On appeal, CFC contends the trial court erred by

(1)
allowing parol evidence, (2) disallowing an admission McLean
made at his deposition, (3) disallowing evidence of mismanagement,


(4)
refusing a proposed instruction on agency, (5) answering the
jury's question, and (6) denying CFC's motion for a new trial or a
judgment notwithstanding the verdict. We affirm.
FACTS



Some factual detail is required for an analysis of the jury's
verdict.
In 1997 Peer Pedersen and Daniel McLean formed River East, LLC,
to build residential and commercial buildings on land north of the

Chicago River near Lake Michigan in Chicago. A separate
corporation, River East, Inc., with Daniel McLean as its president,
managed River East, LLC. Those corporations set up a number of
subsidiaries to develop separate parcels of the large tract. We
will refer to the various River East entities collectively as River
East.

River East paid various fees for management, development,
marketing, leasing, and construction on the land to corporations
McLean owned. Craig Duchossois and his father, Richard Duchossois,
formed CFC Investments in 1997 to invest $10 million in River East.
McLean, Peer Pedersen, Howard Warren, John Melk, and several others
also invested in River East.

Pedersen and McLean convened a meeting of the investors on
March 14, 2001. Pedersen and McLean assured the investors the
development was proceeding well, with new investors seeking to
participate. Craig offered to sell CFC's interest. Pedersen tried
to persuade Craig that he should keep his investment in River East.
But, according to Craig's notes from the meeting, Pedersen said he,
Melk, and McLean, along with others, would be willing to buy out
CFC's shares.

Craig wrote to Pedersen in April 2001, asking him to "consider
this letter as [CFC's] request to initiate steps that would let us
look at such a transaction." At the rate of return Pedersen and

McLean said they expected, CFC's shares should have had a value of
$25 million. Craig repeated his request to sell CFC's interest in
River East in a letter to Pedersen sent in June 2001. Craig added,
"I understand *** that Dan [McLean] expressed an interest in joining
with a group to acquire [CFC's] interest."

McLean, on July 31, 2001, wrote to Craig:
"Your ownership interest of 12.3% equates to a current
value of $14,897,317 ***.

I recognize your desire to sell your interest in the
River East development and I will work toward this goal.
However, it is unlikely that an investor would pay the
$25.2 million value requested in your letter. ***

*** I can pursue a buyout of your interest."
Craig telephoned McLean, and that call initiated further discussions
about an appropriate price for CFC's interest in River East. They
arrived at a price, and McLean confirmed that valuation in writing.
On August 30, 2001, McLean wrote to Craig:

"I am willing to arrange for the purchase of your
interest in the River East LLC for a price of $16,700,000.
If this is acceptable to you please sign below. I will
then commence to secure the capital for a closing date of
November 30, 2001.

Sincerely,

/s/ Dan McLean."

On September 21, 2001, Robert Fealy and David Filkin, acting on
behalf of CFC Investments, met with McLean's representative, Kevin
Augustyn, to discuss the details of the proposed transaction.
Following the meeting Craig wrote, in a letter dated September 26,
2001:

"On behalf of CFC Investments, we accept your offer to acquire
all of our interest in the River East project for $16,700,000.
*** We also understand that, as part of this transaction, you
will assist with having us removed as guarantors of the JP
Morgan loan ***.

*** [W]e expect to close this transaction before November
15."

On September 28, 2001, McLean responded:
"I am happy to know you would like to accept our acquisition
offer. ***

*** [W]e are hoping to close this transaction as quickly
as possible. However, as both Peer Pedersen and I stated
originally, we require 90 days from the date of your acceptance
of our offer. This would give us up to January 1, 2002 if you
acknowledge this letter by October 1, 2001. ***

Of course we understand your interest in being released as
guarantor of the JP Morgan loan. We expect to do this with the

repayment of your $5,000,000 pro-rata share of this loan, out

of the proceeds you receive.

Assuming these two points are acceptable, please

acknowledge by signing this letter below and returning it to me

*** to effectuate this transaction."
Craig sent back a copy of the letter with his signature, along with
a separate letter in which he said CFC agreed to the 90-day period
"with the understanding that your group will do everything
reasonable to accelerate closure."

Craig heard no word of progress over the following months. On
March 29, 2002, he wrote to McLean, demanding performance of
McLean's "contractual commitments." McLean did not respond. CFC
hired an accounting firm to investigate the finances of River East.

On April 2, 2003, all of the investors in River East sold their
interests to Mitsui Sumitomo Insurance Company for a total of $17
million. CFC received a little over $2.5 million for its share.

On January 2, 2004, CFC sued McLean for breach of contract.
The court denied the parties' cross-motions for summary judgment.
The court held that a trier of fact must decide whether the parties
had reached a binding contract.

At a deposition, McLean testified that when he said he was
"willing to arrange" for the purchase of CFC's interest, he meant
that he would try to find a group of investors to purchase the

shares. He did not intend to offer to buy all of CFC's shares

himself. CFC's attorney asked:

"Can arrange mean I am willing to arrange to get money so I can

purchase your shares?

I mean, that's one possible interpretation of that

language, isn't it?"
McLean answered, "I am sure it could be, somebody could interpret it
that way."

CFC sought to introduce the statement in its case-in-chief as
an admission. The court granted McLean's motion in limine to bar
use of that response in CFC's case-in-chief, but the court added,
"As far as what you may do on cross-examination that may be another
issue."

McLean also moved to bar use of information derived from the
2002 investigation into the finances of River East. According to
CFC's written offer of proof, it would show that McLean changed the
plan to the detriment of other investors, he used corporate funds
for personal expenses, he improperly accelerated payment of
exorbitant fees to corporations he owned, he overvalued certain
assets, he defaulted on some loans, and he artificially manipulated
reported profits. CFC contended that the evidence helped establish
that "CFC reasonably believed McLean himself offered to purchase
CFC's interest because McLean wanted to keep his gross mismanagement

of the River East Project under wraps." The circuit court allowed
CFC to present any evidence of mismanagement that surfaced before
January 2, 2002, the date of the alleged breach, but it granted the
motion to preclude any evidence of mismanagement that did not come
to light until after that date.

CFC moved to exclude parol evidence at trial. The court denied
the motion. The court noted for the record CFC's standing objection
to all evidence admitted or disallowed due to rulings adverse to CFC
on motions in limine.

Craig testified River East never sent him any of the promised
annual audited financial reports. When River East again in 2001
failed to provide the statements Craig requested, he "had run out of
patience, and [he] was convinced that [McLean] was not forthright."
McLean had arranged for River East to pay above market fees to the
corporations McLean owned. Because of his reservations about
McLean, Craig sought to sell CFC's shares.

According to Craig's testimony, he believed McLean himself
intended to purchase CFC's shares in River East. McLean had not
identified any other investors intending to buy parts of CFC's
interest. Craig had no doubt that by the letter of August 30, 2001,
McLean offered to buy CFC's shares for $16.7 million. Craig
understood the letter to mean McLean was willing to arrange
financing for his own purchase of the shares.

McLean testified that in his correspondence from July through
September 2001, he sought to establish a price CFC would accept for
its shares so that he could approach potential investors with a
specific proposal. He never said he would buy CFC's shares. McLean
said Pedersen and Melk had expressed interest in buying some of
CFC's shares.

Melk and Pedersen contradicted that part of McLean's testimony.
Melk swore he never discussed with McLean the possibility of joining
a group to purchase CFC's interest. Pedersen also testified he had
no such conversations with McLean. In fact he specifically told
McLean he and Warren did not wish to participate in any further
acquisition offer.

Fealy and Augustyn testified about their meeting on September
21, 2001. Fealy and Augustyn agreed on the $16.7 million price, and
they agreed Pedersen would complete the legal work for the
transaction. According to Fealy, no one at the meeting mentioned
any group of buyers, but Fealy admitted that Augustyn mentioned
Pedersen and Warren as investors who might participate in purchasing
CFC's shares.

Augustyn testified he and Fealy agreed Pedersen would contact
the other investors in River East to see if they had any interest in
increasing their stakes in the venture by buying out CFC. If those
investors showed no interest, according to Augustyn, then McLean and

CFC would look to outside investors.
CFC asked the court to instruct the jury:

"An agent who signs his name to a contract but does not
disclose the principal he is representing (which can be a
person or a group) is personally liable for the obligations set
forth in the contract that he has signed."

The circuit court refused the instruction. The court submitted a
verdict form asking jurors: "Did CFC prove there was an offer by
McLean to buy CFC's interest in River East, LLC for $16.7 million?"

During deliberations, the jurors sent the judge the following

question:
"[W]hen you say did CFC prove there was an offer by
McLean, does McLean have to mean McLean as an
individual?"

Over CFC's objection, the court answered, "Yes." Shortly thereafter
the jury returned a verdict in favor of McLean.
DECISION

I. Parol evidence

CFC contends the court erred when it denied the motion to bar
parol evidence. McLean answers that CFC waived this and all other
objections to rulings at trial. We find CFC preserved the issues
with its argument on the motions in limine and by making a standing
objection at the outset of trial. See People v. Jefferson, 227 Ill.

App. 3d 491, 505, 592 N.E.2d 134 (1992). Insofar as CFC may have
technically forfeited review of some issues, we choose to exercise
our discretion to address them on the merits. See Sinclair v.
Berlin, 325 Ill. App. 3d 458, 468-69, 758 N.E.2d 442 (2001). We
review the court's decision concerning the admissibility of evidence
for abuse of discretion. Chapman v. Hubbard Woods Motors, Inc., 351
Ill. App. 3d 99, 105, 812 N.E.2d 389 (2004).

Illinois courts have adopted Corbin's statement of the parol

evidence rule:
" 'When two parties have made a contract and have expressed it
in a writing to which they have both assented as the complete
and accurate integration of that contract, evidence, whether
parol or otherwise, of antecedent understandings and
negotiations will not be admitted for the purpose of varying or
contradicting the writing.' " Kelrick v. Koplin, 73 Ill. App.
2d 63, 68, 219 N.E.2d 758 (1966), quoting 3 Corbin on Contracts

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