Kimco Corp v. Mudoch, Coll, and Lillibridge, Inc.

730 N.E.2d 1143 (Ill. Ct. App. 2000)

 

Parties:

Kimco Corp. (Janitorial Services Corp.) – Plaintiff

MC&L (Managers/Agents) – Defendant

Relief requested:

MC&L appeals summary judgment for Kimco.

Facts:

-         5/29/92 – Kimco’s VP of Marketing (Usa) and an MC&L employee signed an agreement to provide janitorial services at the Fisher Building. MC&L’s daily manager (Tobias) was sent the original contract proposal

-         2/93 – There were financial problems with the account, and Kimco’s president (Tarson) and MC&L’s president (Gries) met and Gries told Tarson that he was an agent for the true owner of the building and the owner was having financial difficulties (default on mortgage – partners didn’t want to invest any more capital.)    Owners could only pay for services already provided.  Problem – Kimco billed in advance.

Issue:

-         Did Griers ever give Tarson the name of the building owner?

-         Was the contract between Kimco and MC&L divisible?

-         If the contract was divisible, is MC&L liable if Kimco decides to continue services?

Holding:

Summary judgment reversed and remanded. 

Reasoning:

Contract was divisible and it’s clear that performance is divided up into equivalent pairs.   The monthly payments were not periodic installments for a larger project.                                                    

Rules:

An agent who contracts with a 3rd party on behalf of an undisclosed or partially disclosed principal is personally liable on the contract.  Why?  B/c the 3rd party is relying on the agent’s credibility since they don’t know who the principal is.

 

A principal is partially disclosed when 3rd party knows the agent is contracting on behalf of an owner, but doesn’t know who the owner is.

 

When an agent discloses the identity of the principal during the course of an executory, divisible contract, the agent isn’t personally liable if the third party chooses to continue performance.

 

Divisibility: Both parties can divide their performance into units or installments in such a way that each past performance is rough compensation for a corresponding past performance by the other party. (top of pg 630)