Court Opinion

ID: 9554398
Source: CourtListenerOpinion
Date Created: 2023-08-08 20:05:58.262256+00
Date Added: 2024-06-11T15:30:44.887051
License: Public Domain

2023 IL App (1st) 221416-U

                                         No. 1-22-1416

                                   Order filed August 8, 2023

                                                                                FIFTH DIVISION

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the
limited circumstances allowed under Rule 23(e)(1).

                                          IN THE
                               APPELLATE COURT OF ILLINOIS
                                 FIRST JUDICIAL DISTRICT

  CHESTER CARRARA,                                    )      Appeal from the
                                                      )      Circuit Court of
        Plaintiff-Appellee,                           )      Cook County
                                                      )
  v.                                                  )      No. 2020-L-006215
                                                      )
  MIDLAND PAPER COMPANY,                              )      Honorable
                                                      )      Michael F. Otto,
        Defendant-Appellant.                          )      Judge presiding.

       JUSTICE MITCHELL delivered the judgment of the court.
       Presiding Justice Delort and Justice Lyle concurred in the judgment.

                                           ORDER

¶1     Held: We affirm the circuit court’s grant of summary judgment in favor of plaintiff on his
       breach of contract claim because the plain language of the employment agreement’s
       commission clause provides that defendant is to compensate plaintiff for his performance
       as a sales representative.

¶2     Defendant Midland Paper Company appeals a grant of summary judgment in favor of

plaintiff Chester Carrara determining that Midland breached the employment agreement and owes

Carrara his sought commission. The issue presented is whether the circuit court erred in entering

judgment as a matter of law by dismissing Midland’s affirmative defense that Carrara materially
No. 1-22-1416

breached the parties’ employment agreement because he held secondary occupations, potentially

breaching the performance clause of the agreement. For the following reasons, we affirm.

¶3                                      BACKGROUND

¶4     Carrara began employment at Midland in January 2003 as a general manager. His

employment agreement was amended twice afterwards. The first amendment reduced Carrara’s

compensation per a deferral of pay, and the second amendment promoted Carrara from a general

manager to a sales representative and altered the terms of his compensation. More specifically, the

second amendment removed the entirety of previous compensation language in the employment

agreement and replaced it with a commission clause. The commission clause stated that the

employee was to receive 3-1/3% of Midland’s annual pre-tax income from the branch where

Carrara worked. In May 2015, Carrara resigned.

¶5     In September 2019, Carrara brought suit against Midland for not paying him certain profit-

sharing payments between 2008 and 2015. Carrara raised two alternative claims: (1) Midland

breached the employment agreement and (2) Midland was unjustly enriched. In filing its answer,

Midland provided several affirmative defenses, one of which pled that Carrara materially breached

the performance of his role by holding secondary jobs. Specifically, Midland referenced the

performance clause of the employment agreement, which dictates that Carrara was to comply with

all company rules and policies, including the secondary employment provision. The provision

states that an employee may hold secondary jobs as long as the employee meets performance

standards and the outside employment does not present a conflict of interest with Midland. Since

Midland did not realize Carrara’s potential breach until after his employment terminated, Midland

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No. 1-22-1416

sought discovery to further investigate the facts, arguing that it should be released from fully

performing the employment agreement.

¶6     Carrara moved for summary judgment on his breach of contract claim. The circuit court

granted Carrara’s motion in his favor based on the contract’s cause provision, reasoning that

Midland’s affirmative defense fails as a matter of law. The circuit court entered judgment on the

breach of contract claim for Carrara and against Midland in the amount of $303,752.65 plus

interest. Midland timely appealed. Ill. S. Ct. R. 303 (eff. July 1, 2017).

¶7                                          ANALYSIS

¶8     Midland argues that the circuit court erred in granting Carrara’s motion for summary

judgment because Carrara’s employment was not terminated for “cause” and a genuine issue of

material fact exists on Midland’s affirmative defense. Carrara argues Midland’s affirmative

defense that Carrara materially breached the employment agreement first fails as a matter of law.

We review a grant of summary judgment de novo. Cohen v. Chicago Park District, 2017 IL

121800, ¶ 17.

¶9     Summary judgment is proper only when the pleadings, depositions, admissions, and

affidavits, when viewed in a light most favorable to the nonmovant, reveal that there is no genuine

issue of material fact and that the movant is entitled to judgment as a matter of law. 735 ILCS 5/2-

1005; Progressive Universal Insurance Co. v. Liberty Mutual Fire Insurance Co., 215 Ill. 2d 121,

127-28 (2005). The movant may meet its burden by affirmatively showing that some element of

the case must be resolved in its favor or by establishing that there is an absence of evidence to

support the nonmovant’s case. Neufairfield Homeowners Association v. Wagner, 2015 IL App (3d)

140775, ¶ 15. Summary judgment is a drastic means of disposing of litigation and should be

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No. 1-22-1416

granted only when the right to it is clear and free from doubt. Allstate Insurance Co. v. Tucker,

178 Ill. App. 3d 809, 812 (1989).

¶ 10      “The interpretation of a contract is a question of law and therefore may be decided on a

motion for summary judgment.” WLM Retail Trust v. Tramlaw Remainderman Ltd. Partnership,

2018 IL App (1st) 170819, ¶ 16 (citing Joyce v. Mastri, 371 Ill. App. 3d 64, 74 (2007)). When

evaluating a contract, our main objective is to determine the parties’ intentions at the time the

contract was created. Matthews v. Chicago Transit Authority, 2016 IL 117638, ¶ 77 (citing In re

Doyle, 144 Ill. 2d 451, 468 (1991)). A contract is construed as a whole “[b]ecause words derive

their meaning from the context in which they are used.” Gallagher v. Lenart, 226 Ill. 2d 208, 233

(2007).

¶ 11      The employment agreement’s compensation provision explains that Midland is to pay

Carrara a 3-1/3% commission for his services:

          “Compensation: Company shall pay to Employee as follows:

                 (a) Commissions. Beginning on January 1, 2005, Employee’s compensation will be

                 converted to a commission based plan specifically designed for the Bloomington-

                 Normal Division ***.

                 (b) Profit-sharing. During the term of this Agreement, Employee will be eligible to

                 receive 3-1/3% of the annual pre-tax income of Company’s Bloomington/Normal

                 Division if, and only if, the Division has cumulative pre-tax income. *** In

                 accordance with the terms of Paragraph 3, above, this profit sharing provision

                 shall survive the termination of this Agreement, regardless of the reason(s) for

                 termination, as long as Company employs Employee.” (Emphasis added.)

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No. 1-22-1416

¶ 12   The termination clause lists four types of employment terminations: termination by

“mutual agreement,” by “expiration of agreement,” by “death or disability,” and for “cause.” The

“mutual agreement” termination provision provides that an “employee’s employment *** may

be terminated at any time by the mutual, written agreement of Employee and Company.” For a

termination by mutual agreement, an employee “shall not receive further compensation unless

the parties provide for such compensation in a written agreement.” In comparison, the “cause”

provision defines “cause” and provides that a termination of this type results in the payment of

any accrued obligations to the employee:

       “ ‘Cause’ shall mean Employee’s: *** (v) breach of a fiduciary duty owed to Company;

       (vi) breach of a material Company policy; or (vii) willful and substantial nonperformance

       of assigned duties ***. Upon termination of this Agreement for ‘Cause,’ the only obligation

       of Company to Employee, except for the continuation of medical coverage as required by

       law, shall be the payment of any accrued, but unpaid, obligations.” (Emphases added.)

Additionally, the employment agreement provides that an amendment or modification is only

valid when Midland makes it in writing and Carrara signs it.

¶ 13   Carrara served as a sales representative at Midland in exchange for compensation, and

Midland was to pay Carrara a 3-1/3% commission when the division had cumulative pre-tax

income. The record establishes that Midland had cumulative pre-tax income between 2008 and

2015 and that Midland did not compensate Carrara for the complete 3-1/3% commission. The

employment agreement plainly states that the profit-sharing provision is to endure the

agreement’s termination. Additionally, the employment agreement does not contain any

language that allows Midland to avoid paying Carrara’s compensation, and Midland had neither

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No. 1-22-1416

amended nor modified the employment agreement to stipulate otherwise. As a result, regardless

of how Carrara terminated his employment, he is entitled to the 3-1/3% commission given the

plain language of the contract.

¶ 14     Lastly, Midland argues the circuit court erred in granting Carrara’s motion for summary

judgment because Carrara’s potential material breach terminated Midland’s obligations under the

employment agreement. The performance clause specifies that Carrara must adhere to all

company rules and policies, which are listed in the employee handbook and include the

secondary occupations provision. Midland asserts that “any contract is terminable upon the

occurrence of a material breach.” (Emphasis in original.) Rico Industries, Inc. v. TLC Group,

Inc., 2014 IL App (1st) 131522, ¶ 24 (citing Jespersen v. Minnesota Mining & Manufacturing

Co., 183 Ill. 2d 290, 294 (1998)). However, the plain language of the “cause” provision provides

that “cause” includes a breach of a material company policy, such as a violation of the secondary

occupations provision. The “cause” provision also provides a remedy—the payment of any

accrued, but unpaid obligations. As a result, while Carrara ultimately terminated his employment

by resigning, even in a situation where Midland terminated him for “cause,” Midland agreed to

pay him any accrued, but unpaid obligations. Midland’s defense therefore fails as a matter of

law. 1

¶ 15                                         CONCLUSION

¶ 16     The judgment of the circuit court of Cook County is affirmed.

         1
          Midland argues that since the non-exhaustive clause lists four different terminations with four
different remedies, different situations result in different remedial options. However, Midland’s defense is
that Carrara potentially material breached. A material breach falls under the “cause” provision, which
provides an appropriate remedy in the contract’s plain language.

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No. 1-22-1416

¶ 17   Affirmed.

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