Abbott v. Amoco Oil Co., 2-92-1275

• Decision Date: 18 August 1993
• Docket Number: No. 2-92-1275,2-92-1275
• Parties: , 189 Ill.Dec. 88 Kenneth ABBOTT et al., Plaintiffs-Appellants, v. AMOCO OIL COMPANY, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 789

619 N.E.2d 789

249 Ill.App.3d 774, 189 Ill.Dec. 88

Kenneth ABBOTT et al., Plaintiffs-Appellants, v. AMOCO OIL COMPANY, Defendant-Appellee.

No. 2-92-1275.

Appellate Court of Illinois Second District.

Aug. 18, 1993.

Mark A. La Mantia, Farrell & Barr, Rosemont, for Kenneth Abbott, Thomas A. Abramowicz, Robert W. Adam, Donald F. Ardito, Robert Bartel, Wayne Berryman, Jr., Lawrence P. Breisch, Richard Conyers, George R. Cooke, Sr., Frank Del Medico, James H. Edwards, Kevin Finnegan, Herman W. Fisher, Timothy Flynn, Peter Guglielmi, Kenneth W. Graske, Robert L. Hillerich, William E. Hopewell, Gladine Jacobsen, Harold Kathe, Thomas Kazmierczak, Gerald L. Klimezak, James Krage, Harlan Krafft, Duane Lehnert, Sam Long, Charles Mudek, John O'Keefe, Wayne Pippin, Robert J. Poore, Gerald Purkey, Roger Redderoth, Fredrick Roempler, Vernon Segert, Robert Spearman, William Spearman, Thomas Tassos, William P. Tselepis, Milan Vranjes, Richard Wassell, Lawrence Weber, Raymond Wilk, James Zambos and Michael E. Zielinski.

Richard C. Godfrey, William J. Noble, David J. Zott, Kirkland & Ellis, Chicago, for Amoco Oil Co.

Presiding Justice INGLIS delivered the opinion of the court:

In this case, a large group of gasoline retailers (the dealers) who sell Amoco brand products sued Amoco alleging breach of contract. Specifically, the dealers claimed that Amoco violated express promises it made to them in conjunction with Amoco's "Discount for Cash" program, that Amoco, alternatively, violated the implied covenant of good faith and fair dealing with regard to gasoline pricing, and that Amoco breached either its express or implied obligations with regard to the rent it charged the dealers. The circuit court of Du Page County dismissed the complaint with prejudice under section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 1992)) as being substantially insufficient in law. The dealers appealed, and we affirm.

The dealers' complaint alleges that they all are located in a geographic area delineated by Amoco and known as the Chicago District. The dealers were required to execute various forms drafted by Amoco in order to become franchisees, and the terms of the documents were not negotiable. The dealers allege that the price they were to pay for gasoline was not fixed. Instruments known as Dealer Supply Agreements (DSA's) executed by the dealers provide, "The price for motor fuels purchased by Dealer from Amoco hereunder, shall be Amoco's dealer buying price for each respective grade of said products in effect in Amoco's pricing area in which the above-identified motor fuel sales facility is located at the time when title to said products passes from Amoco to Dealer."

The dealers further allege that until 1982, Amoco represented that the price of gas to dealers took into account the cost of credit, including the costs of Amoco's credit card program. In 1982, Amoco began to implement its discount for cash program, which the dealers were allegedly required to accept. Under the program, it is claimed that Amoco made the dealers pay a credit card fee for each Amoco credit card purchase occurring at the dealers' respective stations. However, Amoco also promised the dealers a discount in the cost of gas to reflect the removal of the cost of credit from the gas prices. Amoco allegedly told the dealers that the discount for cash program was designed to "unbundle" the cost of credit from the price of gasoline to dealers and that the dealers could then offer a discount on the price of gas to retail customers who paid with cash, allowing the dealers to become more competitive in the growing cash purchase market. The dealers claim in their first count that Amoco then failed to "realistically and meaningfully provide the promised price discounts" and that Amoco hid its breaches "through a variety of pricing techniques and policies."

In their second count, the dealers allege that Amoco's actions with regard to the pricing of gasoline violated the implied covenant of good faith and fair dealing implicit in the DSA's.

In the third count, the dealers allege that they are required to lease their stations from Amoco pursuant to written leases. They claim that, since 1982, Amoco has represented to them that rents would be based on the fair-market or investment value of the facilities and improvements. The dealers assumed that Amoco would act in good faith in setting the rental values and claimed that Amoco represented to them that the rentals would be so calculated. The dealers allege that Amoco failed to disclose to them the manner in which it calculated rent and that Amoco charged them for capital improvements that had never existed at the stations, had been removed, had been fully depreciated, were owned by the dealers, or were otherwise charged for under separate agreements. The dealers also claim that Amoco unfairly charged them for signs which were supposed to be loaned to the dealers without charge, that Amoco duplicated service bay and car wash charges, and that Amoco made dealers pay for things such as property taxes and maintenance fees which either were not incurred or were covered in other charges. The dealers allege that these actions by Amoco constitute a breach of contract or a violation of Amoco's duty of good faith and fair dealing.

The dealers did not append any written instruments to their complaint when it was first filed, which violated section 2-606 of the Code of Civil Procedure (735 ILCS 5/2-606 (West 1992)). The circuit court then ordered the dealers to execute an affidavit repeating their claim that the signed copies of the documents at issue were in the hands of Amoco and "point forth with some degree of specificity which agreement or agreements they are relying upon." The dealers' attorney responded with an affidavit reciting his experience in similar lawsuits, reiterating the dealers' claims, and referring the court to documents filed in other cases alleged to be sufficient to spell out representations made by Amoco to the dealers here.

The court found this affidavit insufficient and allowed the dealers to file another affidavit. The dealers then submitted various documents and affidavits. Amoco moved to dismiss the complaint as being substantially insufficient at law (735 ILCS 5/2-615 (West 1992)). The court granted the motion to dismiss, finding that the contracts between the dealers and Amoco gave Amoco discretion to set gas prices and rents, that the contracts would not be rewritten, and that Illinois does not recognize a cause of action founded upon a breach of the implied covenant of good faith and fair dealing.

On appeal, the dealers argue that the trial judge did not apply the proper standards for deciding motions brought under section 2-615, that the order dismissing the complaint is internally inconsistent and makes unwarranted and unsupported factual assumptions, that counts I and II of the complaint state viable alternative causes of action, and that the dismissal of count III was improper in light of section 2-615 standards and the decisions of other courts.

Amoco argues on appeal that the trial judge properly applied section 2-615 standards below, that the dealers' breach of contract claims contradict the unambiguous terms of the parties' integrated contracts, and that Illinois law does not recognize an independent cause of action for breach of the implied covenant of good faith and fair dealing.

SECTION 2-615 STANDARDS

The dealers' first argument on appeal is that the trial judge disregarded the proper standards for deciding a section 2-615 motion when dismissing the dealers' complaint. The dealers argue that the trial judge should have addressed the adhesionary aspects of the DSA's. The dealers also find fault with the court's determining that it had to limit its interpretation of the contracts at issue to the contracts' four corners and its simultaneous finding that the parties understood that the nature of the petroleum market made volatile price fluctuations necessary. The dealers also complain that the contracts at issue did not confer upon Amoco the right to employ cash discount programs, as the trial court found was within Amoco's authority to set fuel prices. The dealers argue further that the court should not have disregarded certain communications in the record from Amoco to various dealers notifying the dealers that Amoco was reducing the processing fee on credit card tickets to 3% and setting the gallonage discount for the Midwest region at 2.1 cents per gallon. The dealers claim that these communications support counts I and II of their complaint. Finally, the dealers argue that the court, when dismissing count III, should not have ignored the adhesionary aspects of the leases or the proceedings in separate but similar cases brought against Amoco.

Pleadings are to be liberally construed so as to do justice between the opposing parties when considering a motion to dismiss. (Pelham v. Griesheimer (1982), 92 Ill.2d 13, 17, 64 Ill.Dec. 544, 440 N.E.2d 96.) Further, exhibits attached to a complaint become part of the pleadings, and factual matters in such exhibits which are at odds with a complaint's allegations control over those conflicting allegations. (Outboard Marine Corp. v. James Chisholm & Sons, Inc. (1985), 133 Ill.App.3d 238, 245, 88 Ill.Dec. 336, 478 N.E.2d 651.) A motion to dismiss does not admit allegations in a complaint that are negated by conflicting facts in an attached exhibit. Outboard Marine, 133 Ill.App.3d at 245, 88 Ill.Dec. 336, 478 N.E.2d 651.

This court recently set forth the standards to be followed with regard to appeals from section 2-615 dismissals:

"For purposes of the appeal of the dismissal pursuant to section 2-615, all well-pleaded facts within the four corners of the amended complaint are regarded as admitted and true, together with all reasonable inferences drawn in the light most favorable to the plaintiffs. [Citation.]...