Illinois Supreme Court Civil Issues Pending: Contract Law
[UPDATED THROUGH December 24, 2011]
Pielet v. Pielet
Supreme Court Case Number: 112064
Appellate Court: Second District
Appellate Court Case Number: 2-09-0210 & 2-09-0242
Issues Presented: (1) Was plaintiff's cause of action for breach of a long-term consulting agreement viable against corporation under the Survival Statute, 805 ILCS 5/12.80, even though the agreement was not breached until five years after dissolution of the corporation? (2) Was the defendant relieved of its obligations under the contract pursuant to the doctrine of novation?
Appellate Court Opinion Summary: Plaintiff sued various entities for breach of contract and related torts, alleging that the defendants had breached a life-time consulting agreement signed by her late husband. The agreement was signed in 1986 with Pielet Bros. Scrap Iron and Metal, Inc. Two years later, the company sold an undivided one-half of its assets to PBS One, which expressly assumed the Consulting Agreement. Three years later, PBS One transferred its share in Pielet to National Material, whose general partner was NM Holding. In 1993, Pielet changed its name to Midwest Metallics, and in 1998, it ceased payments under the agreement. In Count IX, plaintiff alleged that National Material had assumed the obligations of PBS One to the consulting agreement, and NM Holding was liable as the general partner of National Material. In Count X, plaintiff alleged that National Material and NM Holding were liable as the successors to PBS One. Count XI alleged that PBS One remained liable on the agreement even after its dissolution. The Circuit Court entered summary judgment on all three counts, finding that PBS One had assumed Pielet's obligation; that the Survival Statute continued PBS's obligations in force, even though the breach of contract action did not accrue until later, and that National Material was liable on the basis of assumption, and as a "mere continuation" of the earlier entities. On appeal, the Appellate Court held that the fact that plaintiff's claim had not yet accrued was not a barrier to its survival under the Survival Statute, which preserves not merely "claims," but "rights" and "liabilities." The Court further held that plaintiff's contingent right to payment upon her husband's death survived until the statute, even though the husband did not die until later. Nevertheless, the Court reversed the judgment, finding that a triable issue of fact existed on whether a novation occurred by virtue of the formation of Pielet LP, or the husband's continued acceptance of payments from Pielet LP and Midwest Metallics.
