Sheth v. SAB Tool Supply Co.
990 N.E.2d 738
Ill. App. Ct.2013Background
- Dealings in used manufacturing machinery among Grinders International, YG-1 Korea and affiliates; approximately $30 million in transactions from 2000–2006.
- Grinders alleged unpaid reconditioning costs and separate invoicing; issues centered on shipments to YG-1 India and reconditioning under Indian regulations.
- Besly transaction: Grinders purchased Besly assets for $3.95 million; disputed additional post-agreement amounts and structuring to hide costs.
- Regal-Beloit transaction: sale of cutting tools division for about $7.3 million; plaintiffs seek a 10% commission; complex broker involvement across entities.
- SAB Tool and Grinders loan interactions and allegedly unreciprocated loans; plaintiff expert contends significant unpaid amounts.
- Judgment: jury verdicts and bench findings largely favorable to defendants; appellate court reverses on prejudgment interest and remands; other rulings largely affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Business Brokers Act applicability to Regal-Beloit deal | Sheth contends Act applies since deal involved a business broker. | Defendants argue the Act does not apply because no Illinois-domiciled broker and no Illinois sale. | Count I properly dismissed under the Act. |
| Quantum meruit for Regal-Beloit commission | Plaintiffs proved value of services and agreed 10% commission. | Plaintiffs failed to prove reasonable value; no clear agreement. | Judgment for defendants affirmed; quantum meruit not established. |
| Breach of oral contract and fraud re Besly transaction | There was an oral agreement for Besly asset sale with commissions. | Evidence supported either conflicting understanding or no enforceable contract. | jury verdict not against the manifest weight; fraud verdict upheld. |
| Prejudgment interest on fraud profits | Interest should attach as a matter of right under 815 ILCS 205/2. | Trial court has discretion; denial was not error. | Reversed and remanded; prejudgment interest awarded as matter of right. |
Key Cases Cited
- Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871 (Ill. 2011) (standard for reviewing manifest weight of trial court findings)
- Snelson v. Kamm, 204 Ill. 2d 1 (Ill. 2003) (standard for appellate review of jury verdicts)
- Ellison, 354 Ill. App. 3d 387 (Ill. App. 2004) (damages and prejudgment interest considerations in certain contexts)
- Bank of Chicago v. Park National Bank, 266 Ill. App. 3d 890 (Ill. App. 1994) (discretion in awarding prejudgment interest; general principle)