Burton v. Airborne Exp., Inc.

• Decision Date: 08 August 2006
• Docket Number: No. 5-05-0160.,5-05-0160.
• Citation: 857 N.E.2d 707
• Parties: Stephen J. BURTON, Jr., Individually and on Behalf of Others Similarly Situated, Plaintiff-Appellant, v. AIRBORNE EXPRESS, INC., Defendant-Appellee.
• Court: United States Appellate Court of Illinois

857 N.E.2d 707

Stephen J. BURTON, Jr., Individually and on Behalf of Others Similarly Situated, Plaintiff-Appellant, v. AIRBORNE EXPRESS, INC., Defendant-Appellee.

No. 5-05-0160.

Appellate Court of Illinois, Fifth District.

Rule 23 Order Filed July 14, 2006.

Motion to Publish Granted August 8, 2006.

Opinion Filed August 8, 2006.

COPYRIGHT MATERIAL OMITTED

Paul M. Weiss, Tod A. Lewis, Freed & Weiss, LLC, Mark R. Diab, Phillip A.

Bock, Diab & Bock; Michael J. Freed, Much, Shelist, Freed, Denenberg, Ament & Rubenstein, P.C., Chicago; Gail G. Renshaw, L. Thomas Lakin, Bradley M. Lakin, Richard J. Burke, Gary Peel, Gerald R. Walters, The Lakin Law Firm, P.C., Wood River, for Appellant.

Karen L. Kendall, Craig L. Unrath, Heyl, Royster, Voelker & Allen, Peoria; Robert H. Shultz, Jr., Joseph P. Whyte, Deborah A. Hawkins, Edwardsville; Edwin V. Woodsome, Jr., D. Barclay Edmundson, William W. Oxley, T. Jason White, Orrick, Herrington & Sutcliffe, LLP, Los Angeles, CA, for Appellee.

Justice HOPKINS delivered the opinion of the court:

The plaintiff, Stephen J. Burton, Jr., individually and on behalf of all similarly situated, appeals the circuit court's order dismissing his breach-of-contract action against the defendant, Airborne Express, Inc. (Airborne). On appeal, Burton argues that his breach-of-contract action is not preempted by the Airline Deregulation Act of 1978 (Airline Deregulation Act) (49 U.S.C. § 41713(b)(1) (2000)) and that his complaint sufficiently alleged that Airborne breached the parties' contract by failing to procure insurance from a third party. We affirm the circuit court's dismissal on grounds other than the reason relied on by the circuit court.

FACTS

On May 12, 2003, Burton filed a class-action complaint in the circuit court of St. Clair County against Airborne, a courier service that provides package transportation and delivery services. In this complaint, Burton alleged that Airborne was unjustly enriched and violated the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 2004)). On July 3, 2003, Airborne removed the case to federal court, but on November 18, 2003, the United States District Court for the Southern District of Illinois remanded the cause to the circuit court of St. Clair County.

On April 12, 2004, Burton filed a motion for leave to file a first amended complaint, which the circuit court granted on April 13, 2004. In his first amended class-action complaint, Burton omitted his Consumer Fraud Act and unjust enrichment claims and instead alleged one claim for breach of contract. Burton alleged that Airborne breached its shipping contract when it collected "Asset Protection insurance" premiums from him and the class and then failed to remit the premiums to an insurance company to procure shipment insurance. Burton sought compensation for the insurance premiums that he and the class had paid to Airborne but were never remitted to the third-party insurance company. Burton referenced and attached to his complaint the parties' "Service Conditions" agreement, which read in part as follows:

"H. DECLARED VALUE AND ASSET PROTECTION CHARGES

1. Sender may declare on the face of the airbill the value of the shipment at the time of issuance, for an additional charge. A $2.50 minimum will be charged for all shipments exceeding $100 in value. * * *

2. In the absence of a declared value or a purchase of Asset Protection by the sender[,] Airborne Express' [sic] $100 per package and other limit of liability rules will apply * * *.

3. Asset Protection is available at an additional charge. A $3.25 minimum will be charged for all shipments having a value up to $500. For shipments exceeding $500 in value[,] each $100 (or fraction thereof) of value in excess of $500 will be charged, in addition to the minimum charge. When the shipment valuation designated by the shipper is $25 or more, Asset Protection is mandatory for the entire shipment value."

Burton also referenced and attached to his complaint a copy of the airbill and register receipt for his shipment on January 21, 2003.

The airbill stated:

"ABSENT A HIGHER SHIPMENT VALUATION[,] CARRIER'S LIABILITY IS LIMITED TO $100 PER PACKAGE, OR ACTUAL VALUE, WHICHEVER IS LESS * * *."

In the "Declared Value or Asset Protection" section of the airbill, the box under "Asset Protection" was checked, and "$250.00" was written under "Shipment Valuation."

On July 7, 2004, Airborne filed a motion to dismiss Burton's first amended complaint, arguing that the Airline Deregulation Act preempted Burton's breach-of-contract claim and that Airborne's "Asset Protection" provision was merely a warranty of its own service and performance, not a promise to procure insurance, and that therefore Burton's breach-of-contract claim failed as a matter of law. In his response to Airborne's motion to dismiss, Burton argued that the Airline Deregulation Act did not preempt his claim and that he had set forth the necessary elements to establish his cause of action by alleging that the airbill required Airborne to procure shipment insurance from a third-party insurer and that Airborne breached the contract because it did not pay the insurance premium to the third-party insurer. On February 22, 2005, after hearing arguments, the circuit court dismissed Burton's complaint, finding that the Airline Deregulation Act preempted his action. On March 21, 2005, Burton filed his notice of appeal.

ANALYSIS

Airborne's motion to dismiss was a hybrid motion seeking relief under sections 2-615 and 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615, 2-619 (West 2004)). In its motion to dismiss, Airborne stated that it moved "to dismiss this case with prejudice pursuant to [section 2-619] for failure to state a claim." A motion to dismiss pursuant to section 2-615 of the Code (735 ILCS 5/2-615 (West 2004)) attacks the sufficiency of a complaint and raises the question of whether the complaint states a claim upon which relief can be granted. Beahringer v. Page, 204 Ill.2d 363, 369, 273 Ill.Dec. 784, 789 N.E.2d 1216 (2003). A motion to dismiss pursuant to section 2-619 of the Code (735 ILCS 5/2-619 (West 2004)) admits the legal sufficiency of a plaintiff's complaint but raises defects, defenses, or other affirmative matters that appear on the complaint's face or that are established by external submissions acting to defeat the complaint's allegations. Kedzie & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill.2d 112, 115, 189 Ill.Dec. 31, 619 N.E.2d 732 (1993); Russell v. Kinney Contractors, Inc., 342 Ill.App.3d 666, 670, 276 Ill.Dec. 987, 795 N.E.2d 340 (2003). Section 2-619.1 of the Code provides that section 2-615 and section 2-619 motions may be filed together as a single motion but that a combined motion shall be divided into parts that are limited to and specify the single section of the Code under which relief is sought. 735 ILCS 5/2-619.1 (West 2004). While a failure to properly label a combined motion to dismiss is not a pleading practice we encourage, a reversal for that deficiency is appropriate only when prejudice to the nonmovant results. Illinois Graphics Co. v. Nickum, 159 Ill.2d 469, 484, 203 Ill.Dec. 463, 639 N.E.2d 1282 (1994); Storm & Associates, Ltd. v. Cuculich, 298 Ill.App.3d 1040, 1046, 233 Ill.Dec. 101, 700 N.E.2d 202 (1998).

In the present case, the parties considered Airborne's motion a combined section 2-615 and section 2-619 motion to dismiss by arguing, in the circuit court and on appeal, the issues of whether Burton's contract claim was preempted by the Airline Deregulation Act (requiring a dismissal under section 2-619) and whether Burton failed to sufficiently allege that Airborne had breached the parties' contract, considering the contract's language (requiring a dismissal under section 2-615). Accordingly, Burton suffers no prejudice by reason of Airborne's failure to properly designate the sections of the Code under which it sought a dismissal. See Storm & Associates, Ltd., 298 Ill. App.3d at 1047, 233 Ill.Dec. 101, 700 N.E.2d 202 (since the support of the motion to dismiss relied on nothing other than facts alleged in complaint, the plaintiff suffered no prejudice by the defendants' failure to properly designate the Code section under which the dismissal was sought). Further, Burton never objected to the hybrid nature of the motion in the circuit court, nor does he raise the issue on appeal; therefore, on appeal he has waived any issue concerning the form of the motion. See Suhadolnik v. City of Springfield, 184 Ill.App.3d 155, 188, 133 Ill.Dec. 29, 540 N.E.2d 895 (1989) (the plaintiff's failure to object to the commingling of section 2-615 and section 2-619 motions to dismiss was held on appeal to be a waiver of the issue concerning the form of the motion). Because the resolution of either motion involves only a question of law, this court's review is de novo. Storm & Associates, Ltd., 298 Ill.App.3d at 1047, 233 Ill.Dec. 101, 700 N.E.2d 202.

Airline Deregulation Act Preemption

Burton argues that the circuit court erred in ruling that the Airline Deregulation Act preempted his breach-of-contract action against Airborne for Airborne's failure to procure insurance from a third party pursuant to its contract. We agree.

Federal preemption is a defect, defense, or affirmative matter properly alleged in a motion to dismiss pursuant to section 2-619 of the Code (735 ILCS 5/2-619 (West 2004)). Pursuant to the preemption doctrine, which arises from the supremacy clause of the United States Constitution (U.S. Const., art. VI, cl.2), we examine whether Congress intended for federal law to preempt state law in a given case. Fidelity Federal Savings & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 152, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664, 674-75 (1982); Cohen v. McDonald's Corp., 347 Ill.App.3d 627, 633, 283 Ill.Dec. 451, 808 N.E.2d 1 (2004).

Section 41713(b)(1) of the Airline...