Jill Knowles Enterprises, Inc v. Dunkin
2017 IL App (2d) 160811
Ill. App. Ct.2017Background
- JKE (Hidden Knoll) and Mary Ann Dunkin entered a written month-to-month horse-boarding contract (contract attached to complaint); invoices later reflected rate increases from $950 to $1000 per month.
- Beginning Aug 2014 Mary Ann became delinquent; by Feb–Mar 2015 substantial Hidden Knoll charges accrued while the horse Zidane was taken to Florida for sale, generating a separate "Florida" invoice.
- David Dunkin (Mary Ann’s husband) wired $10,000 on Feb 26, 2015 (applied to Hidden Knoll). On Mar 21, 2015 he wired another $10,000; JKE applied that payment to the Florida invoice.
- JKE sued Mary Ann in small claims for the Hidden Knoll balance (attaching the contract and invoices); Mary Ann counterclaimed and asserted overpayment and other defenses.
- At bench trial JKE failed to formally offer/mark many exhibits, but some documents attached to the complaint and admitted by Mary Ann’s answer were considered. Trial court ruled JKE could apply the second $10,000 to the Florida bill, awarded JKE damages and attorney fees.
- On appeal the court held the trial judgment in part against the manifest weight: there was an agreement/payor intent that the second wire be applied to Hidden Knoll, producing an overpayment to Mary Ann of $3,424.66; the attorney-fee award was vacated because the underlying judgment for JKE was reversed.
Issues
| Issue | JKE's Argument | Dunkin's Argument | Held |
|---|---|---|---|
| Admissibility of documents not formally offered at trial | Documents attached to complaint and later order make them part of the record; trial court could consider them | Failure to mark/offer exhibits at trial precludes consideration; post-appeal "admission" order ineffective | Documents attached to the complaint and admitted by Dunkin’s answer were properly considered; post-notice order purporting to admit exhibits was ineffective |
| Application of second $10,000 wire transfer | Creditor may apply an unallocated payment to any open account | Payor (David) intended payment for Hidden Knoll; parties agreed Florida bill would be paid after sale; payment therefore had to be applied to Hidden Knoll | Held for Dunkin: parties’ agreement and payor intent required applying the second $10,000 to Hidden Knoll; JKE’s application to Florida was contrary to manifest weight of evidence |
| Manifest-weight / directed finding | Trial court’s factual finding that JKE could choose application was supported by law | Trial evidence (texts, testimony) showed intent/agreement to apply payment to Hidden Knoll; judgment for JKE was against manifest weight | Judgment for JKE reversed in part; appellate court entered judgment for Dunkin for $3,424.66 (overpayment) |
| Attorney-fee award under contract | Contract entitles JKE to recover reasonable fees; trial court awarded reduced fee | If underlying judgment is reversed, fee award cannot stand | Fee award vacated because judgment in JKE’s favor was reversed |
Key Cases Cited
- One 1999 Lexus v. Monta, 367 Ill. App. 3d 687 (Ill. App. Ct. 2006) (documents must be offered and admitted at trial to be considered as evidence)
- Z.R.L. Corp. v. Great Central Insurance Co., 201 Ill. App. 3d 843 (Ill. App. Ct. 1990) (nunc pro tunc orders must correct clerical omissions evidenced in the record)
- Village of Winfield v. Reliance Insurance Co., 64 Ill. App. 3d 253 (Ill. App. Ct. 1978) (debtor may direct application of a payment among multiple accounts; absent direction creditor may apply payment)
- B. Kreisman & Co. v. First Arlington Bank of Arlington Heights, 91 Ill. App. 3d 847 (Ill. App. Ct. 1980) (creditor’s general right to allocate unmarked payments among debtor’s accounts)