{ "id": 3571375, "name": "KEWANEE PRODUCTION CREDIT ASSOCIATION, Plaintiff-Appellee, v. G. LARSON & SONS FARMS, INC., a/k/a George Larson & Sons Farms, Inc., Defendant-Appellant", "name_abbreviation": "Kewanee Production Credit Ass'n v. G. Larson & Sons Farms, Inc.", "decision_date": "1986-08-07", "docket_number": "No. 3\u201485\u20140758", "first_page": "301", "last_page": "306", "citations": [ { "type": "official", "cite": "146 Ill. App. 3d 301" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "76 N.E.2d 204", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "332 Ill. App. 475", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5041524 ], "opinion_index": 0, "case_paths": [ "/ill-app/332/0475-01" ] }, { "cite": "400 N.E.2d 975", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "81 Ill. App. 3d 213", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3230925 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/81/0213-01" ] }, { "cite": "568 F.2d 430", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 909851 ], "opinion_index": 0, "case_paths": [ "/f2d/568/0430-01" ] }, { "cite": "423 N.E.2d 578", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "pin_cites": [ { "page": "584" }, { "page": "582-83" } ], "opinion_index": 0 }, { "cite": "97 Ill. App. 3d 809", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3106317 ], "weight": 2, "pin_cites": [ { "page": "815" }, { "page": "815" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/97/0809-01" ] }, { "cite": "365 N.E.2d 115", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "47 Ill. App. 3d 719", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3368866 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/47/0719-01" ] } ], "analysis": { "cardinality": 664, "char_count": 11972, "ocr_confidence": 0.777, "pagerank": { "raw": 1.1054737418296351e-07, "percentile": 0.5694252830956554 }, "sha256": "ca60a1b1cc25b407cd8df6dee49429215b8cd6bd409b145d2271ca6c604b3995", "simhash": "1:7bf4d1a4ac4eefa4", "word_count": 1976 }, "last_updated": "2023-07-14T14:35:17.515999+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "KEWANEE PRODUCTION CREDIT ASSOCIATION, Plaintiff-Appellee, v. G. LARSON & SONS FARMS, INC., a/k/a George Larson & Sons Farms, Inc., Defendant-Appellant." ], "opinions": [ { "text": "JUSTICE BARRY\ndelivered the opinion of the court:\nIt appears that G. Larson & Sons Farms, Inc. (Larson), a family-owned farming corporation, executed various promissory notes in favor of the Kewanee Protection Credit Association (PCA) for loans which were secured by various farm assets, including the corporation\u2019s crops, livestock, stored grain and feed, and certain farming equipment. By November 1981, Larson was in default on its loans.\nOn November 16, 1981, plaintiff, PCA, obtained judgment by confession against defendant, Larson, in the amount of $389,043.77 plus $40,000 in attorney fees. Larson filed a timely \u201cMotion to Open Judgment by Confession\u201d in the circuit court of Henry County, together with an answer to the plaintiff\u2019s complaint and a \u201cPetition for Temporary Restraining Order and Injunction.\u201d The TRO was granted pending a hearing on the motion to open judgment.\nWhen PCA obtained its judgment by confession, Larson\u2019s crops were still standing in the fields. Larson had exhausted its finances and was searching for another lending agency to refinance its obligations to the PCA and proceed with farming operations. Larson entered into a liquidation agreement with PCA to permit the PCA to harvest Larson\u2019s crops beginning on November 19. However, because the soil was wet, Larson became concerned that the PCA\u2019s harvesting would cause extensive damage to the land which was to be pledged as security for refinancing its loans. Consequently, Larson petitioned the court for a TRO while it proceeded with negotiations for refinancing with a Minnesota-based firm, ITT Thorpe. Although Larson claimed that its fields already had been damaged by PCA\u2019s efforts to harvest in November, Larson did not immediately attempt to recover from PCA for the damages on the belief that the extent of damage to its land could not be determined at the time the confession judgment was being litigated. (It appears that a suit to recover for such damages was subsequently filed by Larson.) At the time of the proposed closing with ITT Thorpe at the circuit courthouse, Larson\u2019s attack on the confessed judgment was directed solely to the reasonableness of attorney fees.\nThe date set for Larson\u2019s closing of the loan agreement with ITT Thorpe was December 23, 1981. By stipulation of the parties, a hearing on defendant\u2019s motion to open judgment had previously been scheduled to be heard on December 30, 1981. On December 21, 1981, defendant petitioned the court for an order directing plaintiff to issue a release of its judgment upon defendant\u2019s payment of $389,043.77 and defendant\u2019s depositing of $40,000 in escrow pending resolution of the issue of attorney fees. The petition was set down for a hearing on December 23 to coincide with the loan closing.\nITT Thorpe\u2019s attorney from Wisconsin appeared on that date at the Henry County courthouse, as did representatives of the money-brokerage firm, Credit Pac, that had directed Larson to ITT Thorpe. The Larson family appeared with counsel, as did representatives of the PCA and their attorney. Attorney Kurt Herbert also attended for the purpose of assisting the Larsons in resolving their disputes over attorney fees.\nThe Larsons\u2019 dilemma was discussed in the chambers of Judge Conway Spanton. The Larsons were faced with three options. They could: (1) insist on a full hearing on the motion to open judgment, which was scheduled to be heard on December 30; (2) agree to pay the principal and interest pursuant to the judgment, forego any claim for damages to its land, and place $40,000 in escrow pending a hearing on the reasonableness of the fees; or (3) pay off the PCA in full in exchange for a release in satisfaction of the judgment. The PCA would not agree to release Larson from the. judgment while litigation arising out of the underlying debt continued. Moreover, the court made it clear to the Larsons that any claim for damages caused to the farmland by PCA\u2019s attempt to harvest was not a collateral matter, but would be disposed of in the current proceedings on the confessed judgment. ITT Thorpe, of course, was unwilling to close on the refinancing agreement without a release in satisfaction of PCA\u2019s judgment. The Larsons believed that their loan negotiations with ITT Thorpe would be jeopardized if they suggested postponing the closing to a later date.\nUltimately, after hours of discussion, defendants, Larsons, elected to proceed with the third option, contrary to the advice of their attorneys. Larson closed the refinancing deal with ITT Thorpe, paid the total claimed, $429,043.77, to the PCA and received PCA\u2019s release on the confession of judgment. The Larsons acknowledged the corporate decision in open court and the fact that the corporation was proceeding contrary to its lawyers\u2019 advice. Upon receipt of PCA\u2019s release, the court, on its own motion, entered an order vacating judgment and dismissing the cause of action.\nOn January 22, 1982, defendant filed a motion to vacate the order of dismissal pursuant to former section 68.3 of the Code of Civil Procedure (HI. Rev. Stat. 1981, ch. 110, par. 68.3 (now Ill. Rev. Stat. 1985, ch. 110, par. 2 \u2014 1203). The motion was not heard until October 28, 1985.\nLarson, through its attorney, argued that the 1981 suit should be reopened because its decision to forego a hearing on the reasonableness of the $40,000 in attorney fees was the product of economic duress. After hearing the testimony of attorneys Keith Luymer and James Nash, who represented PCA and Larson, respectively, on December 23, 1981, and Dennis Larson, vice-president of Larson, the court denied defendant\u2019s motion to vacate.\nIn this appeal, Larson contends that it is entitled to a hearing on the reasonableness of the attorney fees as a matter of law and that the trial court erred in concluding that defendant\u2019s evidence did not prove a prima facie case of economic duress. We initially consider whether the trial court abused its discretion in denying defendant\u2019s motion to vacate. Abbey Plumbing & Heating, Inc. v. Brown (1977), 47 Ill. App. 3d 719, 365 N.E.2d 115.\nThe elements of economic duress are twofold \u2014 \u201c(1) a wrongful act and (2) the absence of the quality of mind essential to the making of a contract.\u201d Alexander v. Standard Oil Co. (1981), 97 Ill. App. 3d 809, 815, 423 N.E.2d 578, 584.\n\u201c[T]he term \u2018wrongful\u2019 is not limited to acts that are criminal, tortious, or in violation of contractual duty, but extends to acts that are wrongful in a moral sense as well. [Citation.] In terms of \u2018economic duress,\u2019 also known as \u2018business compulsion,\u2019 the defense of duress cannot be predicated upon a demand which is lawful or upon doing or threatening to do that which a party has a legal right to do. [Citation.] Furthermore, duress does not exist where consent to an agreement is secured because of hard bargaining positions or the pressure of financial circumstances. Rather, the conduct of the party obtaining the advantage must be shown to be tainted with some degree of fraud or wrongdoing in order to have an agreement invalidated on the basis of duress. [Citation.] The distinction was explained in Chouinard v. Chouinard (5th Cir. 1978), 568 F.2d 430, 434:\n\u2018A contract is voidable where undue or unjust advantage has been taken of a person\u2019s economic necessity or distress to coerce him into making the agreement. However, a duress claim of this nature must be based on the acts or conduct of the opposite party and not merely on the necessities of the purported victim. Thus, the mere fact that a person enters into a contract as a result of the pressure of business circumstances, financial embarrassment, or economic necessity is not sufficient. Unless wrongful or unlawful pressure is applied, there is no business compulsion or economic duress, and such a claim cannot be predicated on a demand which is lawful or on the insistence of a legal right.\u2019 \u201d 97 Ill. App. 3d 809, 815, 423 N.E.2d 578, 582-83.\nHere, as in Alexander, defendant\u2019s evidence demonstrates a significant disparity in the parties\u2019 bargaining positions, but falls short of showing that plaintiff\u2019s use of its superior economic position was in any respect \u201cwrongful.\u201d The testimony introduced at the hearing on defendant\u2019s motion to vacate fails to confirm Larson\u2019s belief that ITT Thorpe would necessarily have backed out of the bailout plan if the closing had been postponed, or that the corporation and the Larson family could not have survived at least another week on what was left of their resources. There was nothing morally or legally wrongful in PCA\u2019s insistence that defendant either litigate its dispute or pay off the lender and waive its right to a further hearing before PCA would release Larson from the confessed judgment.\nFurther, the fact that Larson elected the option of paying its confessed judgment in full contrary to the express advice of its counsel does not, ipso facto, establish that George Larson, Larson\u2019s president, was acting so erratically on December 23, 1981, as to now be entitled to avoid or rescind Larson\u2019s express waiver of its right to a further hearing on the reasonableness of the $40,000 in attorney fees included in the confessed judgment. The inadvisability of Larson\u2019s decision to forego its legal rights on December 23, 1981, was a matter addressed in open court by Larson\u2019s counsel. The legal consequences of each option were fully disclosed to the Larson family and acknowledged by them on behalf of the corporation in court. The court was in a position at that time to take notice of the stressful situation and its effects on the mental and emotional well-being of the Larsons. The matters presented upon Larson\u2019s motion to vacate did not constitute new evidence.\nIt is clear from the record on appeal that the options open to Larson on that date were extensively discussed among the Larson family members and weighed by them during the course of the day. In hindsight, Larson apparently could have used better judgment in selecting among the available options. We cannot say, however, that the testimony proved that the Larsons\u2019 wills were overborne by the situation they faced that day.\nWe must conclude that the evidence presented in support of Larson\u2019s motion to vacate failed to establish a prima facie showing of either of the two elements for a claim of economic duress. On these facts, we cannot say that the trial court\u2019s denial of the motion to vacate constitutes an abuse of discretion.\nHaving so decided, we must reject as well defendant\u2019s argument in the alternative that the court erred as a matter of law in granting attorney fees in the amount of $40,000 without receiving evidence of reasonableness. PCA\u2019s complaint for judgment by confession sought attorney fees in the amount of $40,000. That amount was, as aforesaid, approved by the trial court in granting judgment for the PCA on November 16, 1981. Defendant was entitled to a hearing on the reasonableness of the fee award. (Lyons Brothers Lumber & Fuel Co. v. Shepherd (1980), 81 Ill. App. 3d 213, 400 N.E.2d 975.) It is a matter of record that defendant knew of its legal right to such hearing. On December 23, 1981, the Larsons expressly waived in open court the corporation\u2019s right to the hearing it now seeks. Having waived a known right, defendant may not now attempt to revoke its waiver and revive its rights. Elmore Real Estate Improvement Co. v. Olson (1947), 332 Ill. App. 475, 76 N.E.2d 204.\nFor these reasons, we affirm the order of the circuit court of Henry County.\nAffirmed.\nSCOTT, P.J., and STOUDER, J., concur.", "type": "majority", "author": "JUSTICE BARRY" } ], "attorneys": [ "Robert J. Noe and Richard J. Trinrud, both of Bozeman, Neighbour, Patton & Noe, of Moline, for appellant.", "Reynolds M. Everett, Jr., and Keith A. Luymes, both of Everett & Young, P.C., of Galva, for appellee." ], "corrections": "", "head_matter": "KEWANEE PRODUCTION CREDIT ASSOCIATION, Plaintiff-Appellee, v. G. LARSON & SONS FARMS, INC., a/k/a George Larson & Sons Farms, Inc., Defendant-Appellant.\nThird District\nNo. 3\u201485\u20140758\nOpinion filed August 7,1986.\nRobert J. Noe and Richard J. Trinrud, both of Bozeman, Neighbour, Patton & Noe, of Moline, for appellant.\nReynolds M. Everett, Jr., and Keith A. Luymes, both of Everett & Young, P.C., of Galva, for appellee." }, "file_name": "0301-01", "first_page_order": 323, "last_page_order": 328 }