3SIX5 Logistics, LLC v. Renko , 2024 IL App (1st) 230206-U ( 2024 )

2024 IL App (1st) 230206-UNo. 1-23-0206
First Division
November 25, 2024
NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the
limited circumstances allowed under Rule 23(e)(1).
____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
____________________________________________________________________________
) Appeal from the
3SIX5 LOGISTICS, LLC, ) Circuit Court of
) Cook County.
Plaintiff-Appellant, )
)
v. ) No. 20 L 4215
)
LAWRENCE RENKO, JONATHAN )
FONTANO, RICHARD VINSON, and JMF )
SALES CORPORATION, )
) Honorable
Defendants-Appellees. ) Joan E. Powell
) Judge, Presiding.
____________________________________________________________________________
JUSTICE COBBS delivered the judgment of the court.
Presiding Justice Fitzgerald Smith and Justice Lavin concurred in the judgment.
ORDER
¶1 Held: The trial court’s judgment in favor of defendants is affirmed where the judgment
was not against the manifest weight of the evidence.
¶2 This appeal arises from an amended complaint filed by plaintiff-appellant 3SIX5 Logistics,
LLC (3SIX5) against defendants-appellees Lawrence Renko, Jonathan Fontano, Richard Vinson,
and JMF Sales Corporation (JMF). The complaint raised numerous claims, the general gravamen
No. 1-23-0206
of which was that defendants, former independent contractors of 3SIX5, began diverting some of
3SIX5’s clients to a competitor while still performing services for 3SIX5. Following a bench trial,
the trial court ruled in favor of defendants on all counts. For the reasons that follow, we now affirm
the trial court’s judgment.
¶3 I. BACKGROUND
¶4 3SIX5 is a transportation logistics company owned by Marko Kondic and Jakub
Mroczkowski. Kondic and Mroczkowski founded 3SIX5 in 2018 after working in the
transportation industry for a number of years as truck drivers. 3SIX5’s clients are companies
looking to have their products shipped. 3SIX5 serves as the “middleman” between their clients
and trucking companies (known as “carriers” in the industry), essentially finding a suitable truck
for the client’s shipment and coordinating the shipping process. Defendants Renko, Fontano, and
Vinson are transportation “brokers” who build relationships with clients and carriers and match
the two on behalf of a company like 3SIX5 in exchange for a commission. Renko is the sole
shareholder of defendant Valued Logistics Services, Inc. (VLS), 1 and Fontano is the sole
shareholder of defendant JMF.
¶5 3SIX5’s brokers would typically hire Mroczkowski’s trucking company, Chill Logistics,
to ship goods for 3SIX5’s clients. However, because Chill Logistics is relatively small, the brokers
would often need to find trucks from different carriers when there were no Chill trucks available.
At least as relevant to the current appeal, 3SIX5 did not have an exclusive relationship with any
client or carrier, and no client was ever obligated to book a particular number of shipments with
3SIX5. Instead, the clients routinely solicited bids from multiple brokers on a shipment-by-
1
VLS was named as a defendant in the operative complaint below but was not named as a party
in this appeal.
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No. 1-23-0206
shipment basis and generally hired the one with the lowest price. Thus, brokers were in constant
contact with both clients and carriers in order to ascertain the clients’ shipping needs and offer the
most competitive price for each shipment. All clients involved in this appeal used multiple logistics
companies to satisfy their overall shipping needs.
¶6 Renko is a highly experienced transportation broker with over 20 years in the transportation
industry. In the fall of 2018, Kondic and Mroczkowski began negotiating with Renko, whom they
knew from their days as truck drivers, about joining 3SIX5 and helping to grow their new business.
The two sides reached an oral agreement for Renko to broker shipments through 3SIX5 as an
independent contractor in exchange for a 65% commission paid to Renko’s company, VLS. As
part of the deal, Renko agreed to leverage client relationships he had built in the industry, including
that with produce wholesaler Ben B. Schwartz & Sons, Inc. (Ben B. Schwartz). Renko also
acquired new clients such as Earthmix Fruit & Vegetable Co. (Earthmix) while working for 3SIX5.
3SIX5 had not done any business with Ben B. Schwartz or Earthmix prior to hiring Renko.
¶7 While brokering shipments for 3SIX5, Renko worked from VLS’ office in Crystal Lake,
Illinois. Renko paid the rent for the office, but 3SIX5 provided a computer, internet access, and
phone service, which Renko testified was customary in the industry. 3SIX5 also offered to
reimburse Renko for the cost of certain office furniture he had purchased, which Renko accepted.
Renko and the other defendants also used 3SIX5 e-mail addresses and 3SIX5’s software Ascend
TMS to track all shipment information.
¶8 Like Renko, Fontano was also a longtime broker with approximately 25 years of
experience in the transportation industry. Fontano testified that he learned of 3SIX5 in 2019 from
another of their brokers, John Lampros. On May 22, 2019, Fontano signed an “Independent
Contractor Agreement” (the JMF Agreement) with 3SIX5 on behalf of his company, JMF. Under
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the agreement, JMF agreed to broker loads for 3SIX5 in exchange for a commission. JMF also
agreed to use its “best efforts” in brokering shipments and to “devote as much time, skill, labor,
and attention as [it] deems necessary” to do so. Notably, the agreement repeatedly characterizes
JMF as an “independent contractor” and states that JMF is “neither an agent nor employee of
[3SIX5] and has no authority whatsoever to bind [3SIX5] by contract or agreement of any kind.”
¶9 JMF’s most prominent client for 3SIX5 was Alpha Baking, with whom Fontano had done
business for more than 20 years. The evidence showed that 3SIX5 had almost no prior relationship
with Alpha Baking, handling just “one or two” shipments before the JMF Agreement. This number
increased dramatically under Fontano, with 3SIX5 generating nearly $680,000 in gross revenue
from Alpha Baking in 2019.
¶ 10 Shortly after signing the JMF Agreement, Fontano took out a personal loan from
Mroczkowski in the amount of $9200. On August 30, 2019, 3SIX5 and “JMF Sales/John Fontano”
executed a “Revised Exhibit A” to the JMF Agreement stating that “Alpha Baking shall remain a
customer of [3SIX5] until the loan repayment has been made complete by John Fontano and/or
[JMF].” The Revised Exhibit A also provided that the loan would be repaid by deducting $300
from JMF’s weekly commission check. However, the loan was not fully repaid and a balance of
approximately $3200 remained at the time of trial.
¶ 11 Vinson testified that he was introduced to 3SIX5 by Renko sometime in 2019. On June 20,
2019, Vinson entered into a written “Independent Contractor Agreement” with 3SIX5 (the Vinson
Agreement) that was substantively identical to the JMF Agreement. Thereafter, Vinson brokered
shipments through 3SIX5 for a single client, Sunterra Produce, with whom Vinson worked at his
previous position.
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¶ 12 Defendants’ relationships with 3SIX5 proved to be initially successful, with 3SIX5 more
than doubling its revenue in 2019. At some point, however, those relationships began to sour. The
movement appears to have begun in September 2019, when Fontano “started putting feelers out”
for a new job because 3SIX5 was not growing fast enough for him to service his clients. Fontano
testified that he openly discussed with Kondic and Mroczkowski that 3SIX5 needed to gain access
to more trucks in order for him to properly service his clients. For example, Fontano was unable
to bring in his larger clients such as FedEx and UPS because 3SIX5 was too small. Renko gave
similar testimony, explaining that clients like Meijer would not work with 3SIX5 because it had
access to fewer than 60 trucks.
¶ 13 At the time, Chill Logistics owed 10-15 trucks, but Kondic and Mroczkowski assured
defendants that they “absolutely” intended to grow. However, 3SIX5 did not grow fast enough for
Fontano and, by November 2019, he was hired as a consultant by Jeep Transport, LLC, a large
carrier. During this time, JMF continued to broker Alpha Baking shipments for 3SIX5. However,
Fontano then helped create Jeep Transport’s brokerage arm, MBrothers Freight, LLC, which did
business under the name Jeep Freight. Jeep Freight began operations in early 2020, around the
time the relationship between JMF and 3SIX5 disintegrated. Thereafter, Fontano brokered Alpha
Baking shipments on behalf of Jeep Freight.
¶ 14 Renko testified that Fontano introduced him to Jeep Freight sometime in late 2019 or early
2020. Renko met with Jeep Freight and decided to transfer his brokerage services there. Renko
explained that the “main” reason he chose to leave 3SIX5 was that, contrary to his advice, 3SIX5
failed to obtain a line of credit or factoring service necessary to pay its carriers in a timely manner.
Renko testified that the lack of credit resulted in some carriers refusing to work with 3SIX5. Renko
also testified that another “huge” factor in his decision to move to Jeep Freight was Jeep Freight’s
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No. 1-23-0206
access to a far greater number of trucks. The evidence showed that Jeep Freight commanded at
least 170 Jeep Transport trucks, compared to the 10-15 trucks owned by Chill Logistics. Finally,
Renko cited the sense of “distrust” created within 3SIX5 after a meeting in which Mroczkowski
accused Kondic of embezzling money. Kondic acknowledged being confronted about stealing
money, but denied any wrongdoing.
¶ 15 In early 2020, Kondic became “suspicious” that 3SIX5’s revenue was lower than expected
for the fourth quarter of 2019. The situation came to a head in February 2020 when Kondic
received an e-mail from Richard Hance, Renko’s father-in-law and an employee of VLS. Although
the e-mail concerned a tracking update for a 3SIX5 shipment, Kondic noticed that it was sent from
Hance’s “@jeepfreight.com” e-mail address. Immediately upon receiving the Hance e-mail,
Kondic drove to VLS’ Crystal Lake office to confront Renko about Hance having a Jeep Freight
e-mail address. There, Renko explained that he would be leaving 3SIX5 to join Jeep Freight.
¶ 16 After meeting with Renko, Kondic investigated 3SIX5’s e-mail server for more evidence
of defendants’ suspected wrongdoing. At trial, 3SIX5 presented several e-mails it contended were
evidence of defendants attempts to “sabotage” 3SIX5 in favor of Jeep Freight. For example, e-
mails sent to defendants by Alpha Baking show that Alpha Baking complained about the addition
of “holiday surcharges” for certain shipments during late December 2019. Other e-mails from
Alpha Baking reference both 3SIX5 shipments and Jeep Freight shipments in the same message,
which, according to Kondic, proved that defendants were working for “two companies at one
time.”
¶ 17 Finally, 3SIX5 submitted several e-mails between Vinson’s 3SIX5 address and
representatives from the trucking company Trailiner. In one e-mail dated February 28, 2020,
Vinson tells Trailiner that all future shipments for a particular client would be run through Jeep
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No. 1-23-0206
Freight. In a follow-up e-mail sent that same day, Vinson explains that Jeep Freight and 3SIX5 are
not affiliated but that he and Renko “are doing work for both.” Vinson also states that he and
Renko decided to move some accounts to Jeep Freight because “[s]ome of the customers we’ve
been working with wanted access to more assets [i.e. trucks]” and Jeep Freight allowed them
“access to 300 company assets and open[ed] up more opportunities” for their clients. At trial,
Vinson acknowledged that he helped Trailiner get “set up” to move shipments through Jeep Freight
as a favor to Renko. However, Renko was the one with the client relationships, and it was therefore
his decision to move the clients to Jeep Freight. Vinson did not use his Jeep Freight e-mail address
for any purpose other than setting up carriers for Renko.
¶ 18 Kondic testified that, based on the e-mail evidence, he had no choice but to “cut
[defendants] all off completely” by canceling their access to Ascend TMS and 3SIX5 e-mail, as
well as disconnecting the phone and internet service at VLS’ Crystal Lake office. Kondic
acknowledged that this effectively terminated defendants’ relationship with 3SIX5 because
defendants could no longer broker loads without access to Ascend TMS. Kondic revoked
defendants’ access without warning, and, other than texting Renko “once or twice,” he has not
spoken to defendants since.
¶ 19 Kondic further testified that he called Alpha Baking in the “late spring, early summer of
2020” but Alpha Baking would not discuss defendants with him. Alpha Baking solicited some
bids from 3SIX5, but 3SIX5’s prices were “too high” to secure the business. Kondic also reached
out to Ben B. Schwartz “a few times,” but never got a response. Kondic never attempted to contact
Earthmix after cutting defendants off.
¶ 20 3SIX5 filed its initial complaint in this matter on April 14, 2020. It subsequently filed an
amended complaint on January 29, 2021, which is the operative complaint for this appeal. The
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No. 1-23-0206
amended complaint alleges numerous claims against defendants, namely: breach of agreement
against Vinson and JMF (counts I and II, respectively); breach of fiduciary duty against Vinson
and Renko (counts III and IV, respectively); tortious interference with a contract against Fontano
and Renko (counts V and VII, respectively); and tortious interference with a business expectancy
against Vinson, Fontano, and Renko (counts VIII, IX, and X, respectively). 2
¶ 21 Following a bench trial, the trial court ruled for defendants on all counts. In so ruling, the
court stated that it considered defendants’ testimony to be “highly credible.” The court found that
defendants did not breach their agreements with 3SIX5, and were in fact substantially hampered
in brokering shipments due to 3SIX5’s failure to obtain a line of credit and acquire more trucks as
promised. The court further found that the provision in the JMF Agreement concerning the loan
between Mroczkowski and Fontano was unenforceable for lack of consideration. The court noted
that the loan was a personal one, and the repayment was “for [Fontano] and Mroczkowski to work
out.” Finally, the court found defendants owed no fiduciary duty to 3SIX5, and did not interfere
with any business expectancy because the clients in question worked with many logistics
companies and were not exclusive to 3SIX5. Indeed, the “nature of the business” made 3SIX5’s
expectation of exclusivity impossible.
¶ 22 This appeal followed.
¶ 23 II. ANALYSIS
¶ 24 On appeal, 3SIX5 advances arguments as to why the trial court erred in ruling for
defendants on each count of the amended complaint. The parties agree that the standard of review
2
Count VI of the amended complaint also raised a claim for inducement to commit a breach of
fiduciary duty against Jeep Freight. However, that count was dismissed prior to trial, and Jeep Freight is
not a party to this appeal.
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No. 1-23-0206
following a bench trial is whether the trial court’s judgment is against the manifest weight of the
evidence. Bullet Express, Inc. v. New Way Logistics, Inc., 2016 IL App (1st) 160651, ¶ 60. A
judgment is against the manifest weight of the evidence only where the opposite conclusion is
apparent, or where the court’s findings are unreasonable, arbitrary, or not based on the evidence.
Id. Additionally, the trial court’s determinations on matters of witness credibility are entitled to
great deference on appeal, as the trial court is in the best position to evaluate those issues. Id.When there is contradictory testimony that could support more than one conclusion, a reviewing
court will not disturb the trial court’s findings unless the opposite finding is readily apparent. Id.¶ 25 A. Breach of Contract
¶ 26 3SIX5 first contends that the trial court erred in finding that Vinson and JMF did not breach
their respective contracts. To establish a claim for breach of contract, a plaintiff must prove (1) the
existence of a valid and enforceable contract, (2) performance by the plaintiff, (3) breach of the
contract by the defendant, and (4) damages resulting from the defendant’s breach. Carlson v.
Rehabilitation Institute of Chicago, 2016 IL App (1st) 143853, ¶ 13.
¶ 27 In this case, 3SIX5 contends that Vinson breached his agreement by “compet[ing] against
3SIX5” in favor of Jeep Freight. Specifically, 3SIX5 cites Vinson’s “conversations with Renko
about working for Jeep Freight” and his e-mail correspondence with Trailiner.
¶ 28 As he acknowledged at trial, the evidence showed that Vinson assisted Renko in setting up
carriers to move shipments for Jeep Freight. However, 3SIX5 did not produce any evidence to
suggest that Vinson played a role in dissuading clients from working with 3SIX5. Both Renko and
Vinson testified that the decision to move Renko’s clients from 3SIX5 to Jeep Freight was Renko’s
alone. This was entirely reasonable, as Renko was the only one who had relationships with the
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clients in question. Thus, to the extent any of defendants controlled whether 3SIX5 retained those
clients, it was Renko.
¶ 29 We also note that there was nothing in Renko’s agreement with 3SIX5 that required him
to broker shipments exclusively for 3SIX5. To the contrary, Renko gave undisputed testimony that
a major term of his oral agreement with 3SIX5 was that he would retain his complete
independence. Moreover, the trial court found that Renko transitioned his clients to Jeep Freight
for legitimate business reasons such as 3SIX5’s lack of credit and available trucks. Indeed, the trial
court found that 3SIX5’s failure to pay carriers in a timely manner “made Renko’s job impossible.”
This conclusion is supported by the evidence, and 3SIX5 has not presented any evidence to
conclude otherwise. Thus, the court’s determination that Vinson did not breach his agreement by
giving minimal assistance to Renko was not against the manifest weight of the evidence.
¶ 30 3SIX5 also contends that JMF breached its agreement when Fontano began diverting
clients such as Alpha Baking to Jeep Freight. However, the evidence showed that, from the
beginning of their relationship, Fontano made it known to 3SIX5 that he would need to find another
job if 3SIX5 did not grow large enough to service his clients. 3SIX5 assured Fontano that they
would grow, but never obtained significantly more trucks during Fontano’s tenure. Unsurprisingly,
Fontano moved on, initially joining Jeep Transport and, later, helping to start Jeep Freight.
¶ 31 We also note JMF continued to broker Alpha Baking shipments for 3SIX5 after Fontano
joined Jeep Transport. In fact, Fontano testified that JMF only stopped brokering shipments
through 3SIX5 because 3SIX5 revoked its access to Ascend TMS. The documentary evidence
corroborates this claim because, as 3SIX5 concedes, it continued to book Alpha Baking shipments
as late as February 2020. Thus, it appears from the evidence that 3SIX5’s loss of Alpha Baking
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No. 1-23-0206
business was attributable to its own conduct rather than any breach by Fontano. Accordingly, the
trial court’s judgment was not against the manifest weight of the evidence.
¶ 32 3SIX5 also maintains that JMF violated the Revised Exhibit A of its agreement, which
provided that “Alpha Baking shall remain a customer of [3SIX5]” until Fontano repaid his loan
from Mroczkowski. Defendants argue that, as the trial court found, this provision is unenforceable
because it is not supported by any consideration. A modification of a contract, like the formation
of a new contract, is valid and enforceable only if it is supported by consideration. Urban Sites of
Chicago, LLC v. Crown Castle USA, 2012 IL App (1st) 111880, ¶ 38. “ ‘Consideration for a
contract consists either of some right, interest, profit, or benefit accruing to one party or some
forbearance, detriment, loss of responsibility given, suffered, or undertaken by the other.’ ”
Wilmington Savings Fund Society, FSB as Trustee of Brougham Fund I Trust v. Herzog, 2024 IL
App (1st) 221467, ¶ 50 (quoting Johnson v. Maki & Associates, Inc., 289 Ill. App. 3d 1023, 1028
(1997)).
¶ 33 3SIX5 has failed to identify any consideration supporting the loan provision in the JMF
Agreement, either in the trial court or on appeal. As plaintiff, it was 3SIX5’s burden to prove the
loan provision was valid. 3SIX5 has not attempted to do so. In any event, it is undisputed that the
loan was a personal one from Mroczkowski, who is not a party to the JMF Agreement.
Mroczkowski himself confirmed that 3SIX5 had no involvement in the loan, and that the provision
was added simply as “a way to make sure [he] get[s] the money.” Accordingly, we agree with the
trial court that the provision is unenforceable for lack of consideration. The provision is therefore
not a basis on which to disturb the trial court’s judgment.
¶ 34 B. Breach of Fiduciary Duty
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¶ 35 3SIX5 next argues that the trial court erred in finding that Vinson and Renko did not breach
their fiduciary duties to 3SIX5 in transitioning clients such as Ben B. Schwartz and Earthmix to
Jeep Freight. To establish a claim for breach of fiduciary duty, a plaintiff must prove (1) the
existence of a fiduciary duty, (2) a breach of that duty, and (3) an injury that was proximately
caused by the breach. Lawlor v. North American Corp. of Illinois, 2012 IL 112530, ¶ 69. A
fiduciary duty may exist as a matter of law, such as the relationship between an attorney and client,
an agent and principal, or members of a joint partnership. Doherty v. Country Faire Conversion,
LLC, 2020 IL App (1st), 192385, ¶ 42. Where a fiduciary duty does not exist as a matter of law,
the party seeking relief must prove the special circumstances from which a fiduciary duty arises
by clear and convincing evidence. Id.¶ 36 Here, the trial court found that defendants did not owe fiduciary duties to 3SIX5. In arguing
for an opposite conclusion, 3SIX5 cites just two points of law: (1) Advantage Marketing Group,
Inc. v. Keane, 2019 IL App (1st) 181126, ¶ 28, where this court held that a “key employee” who
owned a 35% stake in the plaintiff company was a fiduciary, and (2) the Restatement (3d) of
Agency, § 8.01 (2006), which states that “[a]ll who assent to act on behalf of another person and
subject to that person’s control are common-law agents” who owe a fiduciary duty to the principal.
3SIX5 also points out that it provided defendants with access to 3SIX5 e-mail and Ascend TMS,
and paid for a computer, furniture, and phone/internet service at VLS’ Crystal Lake office.
¶ 37 3SIX5’s arguments are unpersuasive. To the extent 3SIX5 suggests that a fiduciary duty
arises from an employer-employee relationship, this notion is belied by the record. Vinson and
Renko both testified that they were independent contractors, which was undisputed at trial.
Additionally, the Vinson Agreement—which was drafted by 3SIX5 and its counsel—is entitled
“Independent Contractor Agreement” and refers to Vinson as “Independent Contractor” on dozens
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of occasions. Thus, the record is clear that defendants were independent contractors rather than
employees.
¶ 38 We are mindful that defendants’ status as independent contractors does not necessarily
foreclose the matter, as, in some instances, a person may be both an independent contractor and an
agent owing a fiduciary duty. See, e.g., Sobel v. Franks, 26 Ill. App. 3d 670, 680 (1994). There is
no “precise formula” as to when an independent contractor acts as an agent, and the inquiry rests
upon the facts and circumstances of each case. Theofanis v. Sarrafi, 339 Ill. App. 3d 460, 479
(2003). Relevant considerations include the right to terminate the relationship, the nature and
character of the work, and the degree of control over the work retained by each party. Id. “The
presence of contractual provisions subjecting the person to control over the manner of doing the
work is a traditional indicia that a person’s status as an independent contractor should be negated.”
Petrovich v. Share Health Plan of Illinois, Inc., 188 Ill. 2d 17, 46-47 (1999).
¶ 39 In this case, Renko did not have any contract with 3SIX5, and there is little basis in the
Vinson Agreement to establish a fiduciary relationship. In fact, the Vinson Agreement expressly
disclaims any agent-principal relationship, stating that Vinson “is neither an agent nor employee
of [3SIX5] and has no authority whatsoever to bind [3SIX5] by contract or agreement of any kind.”
There was also virtually no testimony that 3SIX5 controlled or supervised defendants’ work in any
way. To the contrary, Vinson testified that he had almost no contact with 3SIX5, and Renko
testified that VLS operated as a “fully sustainable office” that serviced its clients independently
from 3SIX5. Thus, 3SIX5 has fallen well short of establishing that Vinson or Renko owed a
fiduciary duty. Accordingly, the trial court did not err in rejecting 3SIX5’s claims for breach of
fiduciary duty.
¶ 40 C. Tortious Interference with a Contract
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¶ 41 3SIX5 next argues that the trial court erred in finding that Fontano and Renko did not
tortiously interfere with a contract. To prevail on a claim of tortious interference with a contract,
a plaintiff must prove: (1) the existence of a valid and enforceable contract between the plaintiff
and third party; (2) that the defendant was aware of the contract; (3) that the defendant intentionally
and unjustifiably induced a breach of the contract; (4) that the wrongful conduct of defendant
caused a subsequent breach of the contract by the third party; and (5) that the plaintiff was damaged
as a result. Bank Financial, FSB v. Brandwein, 2015 IL App (1st) 143956, ¶ 43.
¶ 42 With respect to Renko, 3SIX5 contends that Renko tortiously interfered with the Vinson
Agreement when he “told Vinson about Jeep Freight, offered to work something out for Vinson
with Jeep Freight, offered to put Vinson in touch with someone at Jeep Freight, and had
conversations with Vinson about diverting customers away from 3SIX5.” These points are
unavailing. First, there was no evidence that Renko induced Vinson to divert any clients away
from 3SIX5. Rather, Renko merely “induced” Vinson to give him limited assistance in setting up
carriers to move shipments from Jeep Freight. For the same reasons explained above, we agree
with the trial court that this did not constitute a breach of contract. Similarly, Renko offering to
connect Vinson with Jeep Freight, without more, cannot constitute tortious interference.
Inducement to breach a contract requires a degree of active persuasion or encouragement that goes
beyond merely providing information. In re Estate of Albergo, 275 Ill. App. 3d 439, 446 (1995).
What is more, the trial evidence showed that Vinson did not join Jeep Freight, but instead quit the
transportation industry altogether after his relationship with 3SIX5 was terminated. Thus, the trial
court’s determination that Renko did not tortiously interfere with the Vinson agreement was not
against the manifest weight of the evidence.
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¶ 43 3SIX5 also argues that Fontano tortiously interfered with the JMF Agreement when he
assisted in the formation of Jeep Freight and ultimately transitioned Alpha Baking and other clients
away from 3SIX5. In response, defendants argue that 3SIX5’s claim must fail because JMF was
“nothing more than a d/b/a” and it is well-established that Fontano could not have tortiously
interfered with his own contract. 3SIX5 counters that, as a corporation, JMF was a “legal entity
that existed separately and distinctly from Fontano.”
¶ 44 It is true that a party cannot tortiously interfere with his own contract. Koehler v. Packer
Group, Inc., 2016 IL App (1st) 142767, ¶ 43. 3SIX5 is also correct that, as a general matter, a
corporation is a legal entity that is separate and distinct from its shareholders, directors, and
officers. Strauss v. City of Chicago, 2022 IL 127149, ¶ 45. The Seventh Circuit, applying Illinois
law, considered the interaction of these legal principles in Rao v. Rao, 718 F. 2d 219, 225 (7th Cir.
1983). There, a former employee of the Mohan Corporation sued Mohan, the corporation’s sole
officer and director, for tortiously inducing the corporation to breach his employment contract. Id.
at 221. The Seventh Circuit held that the former employee could not sue Mohan for tortious
interference, explaining that “[b]ecause Mohan is Mohan Corporation’s sole shareholder, officer,
and director, therefore, we are convinced that Mohan would be considered by an Illinois court not
to be a separate entity capable of inducing Mohan Corporation to breach its contracts.” Id. at 225.
¶ 45 As best we can surmise, no Illinois case has directly addressed the issue of whether the sole
shareholder of a corporation can tortiously interfere with the corporation’s contracts. However, we
agree with the logic of Rao, at least as applied to the specific facts of this case. Like in Rao, Fontano
is the sole shareholder, officer, and director of JMF. Fontano described JMF as a “holding
company,” and its only two employees were Fontano’s wife and son. Indeed, 3SIX5 itself argues
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that Fontano had “full authority and control over JMF.” Under these circumstances, the principle
that one cannot tortiously interfere with his own contract is fatal to 3SIX5’s claim.
¶ 46 Regardless, even if we were to find that Fontano could have interfered with JMF’s
contracts, we would still affirm the trial court’s judgment. A claim for tortious interference with a
contract requires the plaintiff to show the defendant unjustifiably induced a breach of a contract.
Brandwein, 2015 IL App (1st) 143956, ¶ 43. However, as discussed above, the trial court credited
Fontano and the other defendants’ testimony that they could not perform under their agreements
due to factors such as 3SIX5’s lack of credit and available trucks. 3SIX5 has presented nothing to
show that that determination was against the manifest weight of the evidence. Thus, 3SIX5 has not
proven any breach of contract or wrongdoing by Fontano. The claim therefore fails.
¶ 47 D. Tortious Interference with a Business Expectancy
¶ 48 Finally, 3SIX5 argues that the trial court erred in ruling that Renko, Vinson, and Fontano
did not tortiously interfere with its business expectancy to continue working with clients such as
Ben B. Schwartz, Alpha Baking, and Earthmix. To establish a claim of tortious interference with
a business expectancy, a plaintiff must prove: (1) the existence of a reasonable expectation of
entering into a valid business relationship, (2) the defendant’s knowledge of the expectancy, (3)
the defendant’s intentional and unjustified interference that prevents the expectancy from being
realized, and (4) damages resulting from the interference. State Auto Property & Casualty
Insurance Company v. Distinctive Foods, LLC, 2024 IL App (1st) 221396, ¶ 16. The plaintiff must
go beyond proving that the defendant successfully ended its business expectancy. Grako v. Bill
Walsh Chevrolet-Cadillac, Inc., 2023 IL App (3d) 220324, ¶ 36. Rather, the plaintiff must show
that the defendant has “committed some impropriety” in ending the plaintiff’s business
relationship. Id.- 16 -
No. 1-23-0206
¶ 49 The trial court found that 3SIX5 failed to establish a reasonable expectation of continuing
to work with the clients in question because no business was ever guaranteed in the industry.
Indeed, it is undisputed that while relationships between clients and brokers are important, clients
are primarily price sensitive and therefore solicit bids from multiple brokers in a competitive
environment. The evidence also showed that the clients in question used many logistics companies
to ship their products.
¶ 50 On appeal, 3SIX5 attacks the trial court’s finding with the somewhat conclusory assertion
that it “had every reason to believe its business with Alpha Baking, Ben B. Schwartz, and Earthmix
would have continued to grow, or at least remain stable ***.” 3SIX5’s position ignores not only
the unguaranteed nature of the logistics industry, but also defendants’ testimony that their clients
and carriers were growing unhappy with the dearth of available trucks and slow payments caused
by lack of credit. Defendants also testified that they made these concerns known to 3SIX5, but
3SIX5 did not rectify the issues. Under these circumstances, it cannot be said that 3SIX5 lost
business due to any impropriety from defendants, nor was it reasonable for 3SIX5 to expect to
continue its business relationships on the same terms.
¶ 51 Nevertheless, 3SIX5 casts defendants’ testimony as speculative, pointing out that “there is
no evidence in the record from any of 3SIX5’s customers” as to why they ceased doing business
with it. However, this lack of direct evidence is not necessarily helpful to 3SIX5. It is 3SIX5’s
burden, as the plaintiff, to prove that it was defendants’ unjustified interference that caused clients
to take their business elsewhere. The lack of proof is further highlighted by Kondic’s admission
that 3SIX5 did little to retain the clients in question after abruptly cutting defendants off.
Specifically, Kondic made a half-hearted effort to reach out to Ben B. Schwartz “a few times” with
no response, and did not attempt to contact Earthmix at all. Although Kondic had some further
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No. 1-23-0206
communication with Alpha Baking, they did not discuss anything to do with defendants.
Moreover, 3SIX5 was able to submit bids for several Alpha Baking shipments, albeit
unsuccessfully. In any event, the trial court clearly credited defendants’ explanations as to why
3SIX5 was unable to remain competitive. The court’s determinations are entitled to significant
deference on appeal, and 3SIX5 has given us no reason to depart from them. Accordingly, we
cannot say that the court’s judgment was against the manifest weight of the evidence as to 3SIX5’s
claims for tortious interference with a business expectancy.
¶ 52 III. CONCLUSION
¶ 53 For the reasons stated, we affirm the trial court’s judgment with respect to all counts of
3SIX5’s amended complaint.
¶ 54 Affirmed.
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