Barille v. Sears Roebuck and Co.

• Decision Date: 06 June 1997
• Docket Number: No. 1-96-1414,1-96-1414
• Citation: 289 Ill.App.3d 171,682 N.E.2d 118,224 Ill.Dec. 557
• Parties: , 224 Ill.Dec. 557 Patricia J. BARILLE, Plaintiff-Appellant, v. SEARS ROEBUCK AND COMPANY, Allstate Life Insurance Company, Allstate Indemnity Company, Allstate Property and Casualty Insurance Company, Allstate Insurance Company, Glenbrook Life & Annuity Company, Glenbrook Life Insurance Company, Northbrook Indemnity Company, Northbrook Life Insurance Company, Northbrook National Insurance Company, Northbrook Property & Casualty Insurance Company, Allstate Life Insurance Company of New York, PMI Mortgage Insurance Company, PMI Insurance Company, Surety Life Insurance Company, and Lincoln Benefit Life Company, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 118

682 N.E.2d 118

289 Ill.App.3d 171, 224 Ill.Dec. 557

Patricia J. BARILLE, Plaintiff-Appellant, v. SEARS ROEBUCK AND COMPANY, Allstate Life Insurance Company Allstate Indemnity Company, Allstate Property and Casualty Insurance Company, Allstate Insurance Company, Glenbrook Life & Annuity Company, Glenbrook Life Insurance Company Northbrook Indemnity Company, Northbrook Life Insurance Company, Northbrook National Insurance Company, Northbrook Property & Casualty Insurance Company, Allstate Life Insurance Company of New York, PMI Mortgage Insurance Company, PMI Insurance Company, Surety Life Insurance Company, and Lincoln Benefit Life Company, Defendants-Appellees.

No. 1-96-1414.

Appellate Court of Illinois First District, Fifth Division.

June 6, 1997.

Powers Rogers & Smith, P.C., Chicago (Todd A. Smith, Ruth A.Degnan, of counsel), for Plaintiff-Appellant.

Peter M. Katsaros, Frederick S. Rhine, Gessler Hughes & Socol, Ltd., Chicago, for Defendants-Appellees.

Justice SOUTH delivered the opinion of the court:

Plaintiff, Patricia J. Barille (Barille), filed an amended complaint against defendants, Sears Roebuck & Co. and Allstate Insurance Co., et al. (Allstate), alleging breach of contract, common law fraud and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 1994)). The circuit court dismissed Barille's amended complaint with prejudice pursuant to section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 1994)). Barille filed a motion to vacate and reconsider, arguing that her amended complaint adequately set forth the alleged causes of action and that the court should allow her leave to file a second amended complaint, which she attached to the motion. The circuit court denied Barille's motion and allowed her second amended complaint to be part of the appellate record. Barille appeals the circuit court's orders dismissing her claim and denying her leave to file her second amended complaint.

On January 26, 1987, Barille signed an "R-1500" agent employment agreement (the contract) with Allstate and became an Allstate insurance agent. As an Allstate agent, Barille was provided Allstate's "Neighborhood Office Agent" (NOA) program manuals and offered an opportunity to participate in the NOA program. Thereafter, Barille participated in the NOA program and sold Allstate insurance policies through this program. As an NOA, Barille incurred financial losses and eventually terminated her relationship with Allstate.

On November 14, 1994, Barille filed her original complaint alleging common law fraud, breach of contract, violations of the Consumer Fraud Act, tortious interference with prospective business advantage, breach of covenant of good faith and fair dealing, and emotional distress. Allstate filed a motion to dismiss Barille's original complaint under section 2-615 of the Illinois Code of Civil Procedure (735 ILCS 5/2-615 (West 1994)). On June 15, 1995, following a hearing, the circuit court granted Allstate's motion to dismiss as to all counts except count IV, which the court noted Barille had withdrawn. The original complaint was dismissed without prejudice, and Barille was granted leave to file an amended complaint.

On August 4, 1995, Barille filed her amended complaint alleging common law fraud, breach of contract and violations of the Consumer Fraud Act. Allstate filed a motion to dismiss the amended complaint under section 2-615 (735 ILCS 5/2-615 (West 1994)). On November 27, 1995, following a hearing, the circuit court granted Allstate's motion and dismissed Barille's amended complaint with prejudice.

On December 27, 1995, Barille filed a post-judgment motion to vacate and reconsider pursuant to section 2-1203 (735 ILCS 5/2-1203 (West 1994)), in which she requested that the circuit court vacate its dismissal order and grant her leave to file a second amended complaint. The circuit court denied Barille's motion on March 12, 1996. Barille appeals.

OPINION

Initially, we note that Allstate has moved to cite as additional authority recently discovered case law in support of its contentions on appeal. Allstate's motion was taken with the case, and we hereby grant its motion.

On review of the dismissal of an action under section 2-615, the appellate court reviews the complaint de novo. Barham v. Knickrehm, 277 Ill.App.3d 1034, 214 Ill.Dec. 721, 661 N.E.2d 1166 (1996). The standard of review on appeal is whether the complaint sufficiently states a cause of action. Saunders v. Michigan Avenue National Bank, 278 Ill.App.3d 307, 214 Ill.Dec. 1036, 662 N.E.2d 602 (1996). The merits of the claim are not considered. Saunders, 278 Ill.App.3d 307, 214 Ill.Dec. 1036, 662 N.E.2d 602. All well-pleaded facts are accepted as true but not conclusions of law or factual conclusions that are unsupported by allegations of specific facts. Lagen v. Balcor Co., 274 Ill.App.3d 11, 210 Ill.Dec. 773, 653 N.E.2d 968 (1995). The complaint's factual allegations are construed in the light most favorable to the plaintiff, but factual deficiencies may not be cured by liberal construction. Lagen, 274 Ill.App.3d 11, 210 Ill.Dec. 773, 653 N.E.2d 968. If after disregarding any legal and factual conclusions the complaint does not allege sufficient facts to state a cause of action, the motion to dismiss should be granted. Lagen, 274 Ill.App.3d 11, 210 Ill.Dec. 773, 653 N.E.2d 968.

Barille contends that she sufficiently pled her claim for breach of contract as an employee in her first amended complaint and as an independent contractor in her second amended complaint; that her classification as an independent contractor imposed a duty of good faith and fair dealing, which requires Allstate to act reasonably and with proper motive when exercising its discretion; and that Allstate abused its discretion by unreasonably increasing her costs of doing business, thereby causing her to go out of business and then retaining her book of business that was developed.

In order to state a cause of action for breach of contract, a plaintiff must establish: (1) an offer and acceptance; (2) consideration; (3) definite and certain terms of the contract; (4) plaintiff's performance of all required contractual conditions; (5) defendants' breach of the terms of the contract; and (6) damage resulting from the breach. Penzell v. Taylor, 219 Ill.App.3d 680, 162 Ill.Dec. 142, 579 N.E.2d 956 (1991). In the instant case, whether classified as an employee or as an independent contractor, Barille fails to state a cause of action for breach of contract due to the plain and unambiguous terms of the contract.

In Illinois, there is a duty of good faith and fair dealing included in every contract as a matter of law. Saunders, 278 Ill.App.3d 307, 214 Ill.Dec. 1036, 662 N.E.2d 602. The duty requires the party vested with discretion under the contract to "exercise that discretion reasonably and with proper motive, * * * not * * * arbitrarily, capriciously, or in a manner inconsistent with the reasonable expectations of the parties." Dayan v. McDonald's Corp., 125 Ill.App.3d 972, 991, 81 Ill.Dec. 156, 466 N.E.2d 958 (1984). The doctrine is generally employed as a construction tool in assessing the intent of the parties when a contract is ambiguous. Resolution Trust Corp. v. Holtzman, 248 Ill.App.3d 105, 187 Ill.Dec. 827, 618 N.E.2d 418 (1993). " 'When the terms of a contract are clear and unambiguous, they must be enforced as written, and no court can rewrite a contract to provide a better bargain to suit one of the parties.' " Saunders, 278 Ill.App.3d at 316, 214 Ill.Dec. 1036, 662 N.E.2d 602, quoting Resolution, 248 Ill.App.3d at 112, 187 Ill.Dec. at 832, 618 N.E.2d at 423.

In the present case, the actions complained of by Barille, whether Barille is classified as an employee or as an independent contractor, were exercised within the discretion granted Allstate pursuant to the contract. The terms of the contract clearly and unambiguously notified Barille that Allstate reserved the right to make any changes in the terms and conditions of her employment as Allstate deemed necessary and appropriate in furtherance of its business objectives subject to the terms and conditions of the contract.

The contract also stated that the compensation rules and amounts set forth in Barille's employment manual may be amended from time to time and that, due to the inherent uncertainty of business conditions, Allstate reserved the right to increase or decrease any compensation amounts and change the compensation rules at any time subject to state and federal regulations that may then be applicable to Barille. The contract did not lull Barille into believing that Allstate might not exercise its discretion as set forth therein.

Additionally, Barille does not allege that she did not understand the explicit terms of the parties' contract. Barille was free not to enter the contract with Allstate and to become an agent with any number of insurance agencies. Thus, Barille's execution of the contract negates any inference that Allstate's actions were unreasonable and exercised without proper motive so as to constitute a breach of contract. "Parties are entitled to enforce the terms of negotiated contracts to the letter without being mulcted for lack of good faith. [Citation.] Express covenants abrogate the operation of implied covenants so courts will not permit implied agreements to overrule or modify the express contract of the parties." Resolution, 248 Ill.App.3d at 113, 187 Ill.Dec. 827, 618 N.E.2d 418. For the foregoing reasons, Barille fails to state a cause of action for breach of contract, and the circuit court properly dismissed her claim.

Barille next contends that the circuit court erred in dismissing her fraud claim for failure to state a cause of action. Barille's fraud claim alleges that Allstate implemented a scheme or plan to increase its market share by increasing the...