Kane v. Option Care Enters., Inc.

• Decision Date: 08 September 2021
• Docket Number: 1-20-0666
• Citation: 2021 IL App (1st) 200666,194 N.E.3d 912
• Parties: James H. KANE, d/b/a Kane & Co., Plaintiff-Appellant, v. OPTION CARE ENTERPRISES, INC., a Delaware Corporation, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

2021 IL App (1st) 200666

194 N.E.3d 912

James H. KANE, d/b/a Kane & Co., Plaintiff-Appellant,

v.OPTION CARE ENTERPRISES, INC., a Delaware Corporation, Defendant-Appellee.

No. 1-20-0666

Appellate Court of Illinois, First District, THIRD DIVISION.

Filed September 8, 2021

Rehearing Denied October 15, 2021

James H. Kane, of Kane & Co., of Chicago, for appellant.

Nicholas Anaclerio and Joshua J. Orewiler, of Vedder Price P.C., of Chicago, for appellee.

JUSTICE McBRIDE delivered the judgment of the court, with opinion.

¶ 1 Attorney James H. Kane, doing business as Kane & Co. (Kane), brought claims of breach of contract and quantum meruit against Option Care Enterprises, Inc. (Option Care), seeking $764,762 in compensation for services he provided pursuant to a contingency fee contract to "evaluate and negotiate tax credits and other federal, state, and local level incentives" from Illinois and Wisconsin "government officials." The trial court granted summary judgment in favor of Option Care after finding that the agreement between Kane and Option Care was unenforceable as a matter of public policy because it provided for contingency fee lobbying in violation of section 8 of the Lobbyist Registration Act (Act) ( 25 ILCS 170/8 (West 2014) ) and because enforcement of the contract was barred, recovery under the equitable theory of quantum meruit was also barred. From that judgment, Kane appeals, arguing that his contract with Option Care is enforceable because it did not expressly obligate him to contravene the statute. Kane also argues that we need not consider which government official(s) he actually communicated with; enforcing the contract would be consistent with various public policies, such as the policy of allowing parties to freely contract; the legislature did not intend that a statutory violation would void the contract; and severability language allows for the fee clause to be stricken so that Kane can be otherwise fairly compensated for services rendered. Kane also argues his quantum meruit count is viable.

¶ 2 We first confirm our jurisdiction. The trial court granted Option Care's motion for summary judgment as to Kane's claims on October 7, 2019, Kane filed a motion to reconsider on November 6, 2019, and the court denied Kane's motion on March 3, 2020. Kane then filed a notice of appeal on April 30, 2020. Kane's notice of appeal was timely, and we have jurisdiction over his appeal, due to a combination of Rules 301 and 303, which govern appeals from final judgments of the circuit court in civil cases, and a supreme court order issued on March 24, 2020, which doubled the normal 30-day period to appeal in light of what were then ongoing health concerns caused by COVID-19. Ill. S. Ct. R. 301 (eff. Feb. 1, 1994); R. 303 (eff. Jan. 1, 2015); Ill. S. Ct., M.R. 30370 (eff. Mar. 24, 2020).

¶ 3 In a motion taken with the case, Kane argues that the supplemental statement of facts that Option Care included in its appellate response brief should be stricken because it is not fair, accurate, or neutral. We deny the motion. We have simply disregarded the occasional statements in the parties’ briefs that do not comply with the briefing rules. John Crane Inc. v. Admiral Insurance Co. , 391 Ill. App. 3d 693, 698, 331 Ill.Dec. 412, 910 N.E.2d 1168, 1174 (2009) ; Ill. S. Ct. R. 341(h)(6), (i) (eff. Oct. 1, 2020) (rules regarding briefs filed by the appellant and appellee).

¶ 4 Option Care is a Delaware corporation whose principal place of business is in Illinois. Kane has been a licensed Illinois attorney since 1988. In June 2015, Kane, doing business as Kane & Co., met with Option Care representatives and then sent an engagement letter proposing that he "evaluate and negotiate tax credits and other federal, state and local level incentives in Illinois and Wisconsin for [Option Care] to consider in making [its] final investment and hiring location decisions." Option Care executed Kane's contract. Kane had attached a "biography" indicating that he "specializes in assisting owners of large, complex properties effectively manage their state and local tax burden" and has "assisted many clients with securing lucrative government incentives." Kane's contract outlined a four-phase timeline for him to "identify potential incentive opportunities, quantify the anticipated benefits, and negotiate and perfect the state incentives":

"Phase I: Strategic Assessment

Gather and analyze information related to investment and job creation opportunities.

Initiate preliminary incentive negotiation discussions with state and local government officials.

Identify the steps required to obtain the identified incentives.

Quantify an estimated range of monetary value of the benefits available to the Company for each incentive.

Phase II: Negotiation

Design, develop, and execute an overall negotiation strategy for obtaining the incentives identified in Phase I.

Gather additional project information and review development plans and other activities that may generate incentives.

Arrange and attend meetings with the government officials to commence the negotiation process.

Negotiate the incentive package with government officials.

Secure incentive proposals from state officials.

Phase III: Implementation

Preparation of required applications, agreements, statements, reports, etc. to obtain the incentives.

Attend planning sessions and public meetings with government agencies (if any).

Obtain final approval of the incentives and credits.

Secure the incentives that have been negotiated with the government agencies.

Phase IV: Maintenance & Monitoring

Once the incentives have been secured, Kane & Co. will assist Client by creating a compliance timeline to help Client monetize the incentives.

We will provide Client personnel with a binder to establish the compliance procedures necessary under an agreement or contract to continue receiving the incentives (‘knowledge transfer’)."

¶ 5 Kane's letter offered three payment options. Option Care elected Option B, which stated:

"Our professional fees will be based upon 15 percent of the benefits reasonably anticipated to be achieved at the time of the incentive award, plus out of pocket expenses. The fee will be payable in two installments: 50 percent (50%) upon receipt of an incentive offer and the remaining fifty percent (50%) due at knowledge transfer. Out-of-pocket expenses will be billed monthly, as incurred."

¶ 6 Kane sued Option Care in November 2016. In his first amended complaint, Kane alleged that after the parties signed the contract, he "[g]athered and analyzed information related to investment and job creation opportunities," "[i]nitiated preliminary incentive negotiation discussions with state and local government officials," "executed an overall negotiation strategy for obtaining the incentives," and "[a]rranged and attended meetings with the government officials." After that, Kane had "[n]egotiated the incentive package with government officials," "[s]ecured incentive proposals from state officials," and followed through with applications to obtain the incentives for Option Care. Due to Kane's actions, the Illinois Department of Commerce and Economic Opportunity (DCEO) had approved Option Care's application for an "EDGE" tax credit on November 18, 2015, and Option Care was granted a $5.1 million incentive award by the State of Illinois. (The parties use "EDGE" as an anacronym for the Economic Development for a Growing Economy Tax Credit Act, which authorized tax credits to medium and large-sized corporations to locate and expand their plants and facilities in Illinois. 35 ILCS 10/5-3 (West 2014) (purpose of the statute). On December 15, 2015, and January 11, 2016, Kane sent invoices for the first and second installments of the total due for the six months of services he provided pursuant to the engagement letter. Option Care had declined to pay.

¶ 7 Kane and Option Care filed cross-motions for partial summary judgment, which the trial court denied. Kane's motion included an affidavit specifying how he fulfilled the contract. Option Care later used Kane's affidavit to support a "renewed" motion for summary judgment against Kane's first amended complaint. This is the summary judgment ruling we have been asked to review. Kane swore in part that he (1) negotiated with "Vic Narusis, Director, [DCEO], to secure the EDGE Tax Credit Agreement;" (2) fulfilled the obligation to "[a]rrange and attend meetings with the government officials to commence the negotiation process," including through "numerous phone calls and in-person meetings, as well as indirect communications to make sure [that then Illinois] Governor [Bruce] Rauner's Administration was aware of the importance of incentives to the ultimate location decision;" and (3) "helped develop a strategy to attempt to mitigate the impact of a Governor[-] imposed ‘moratorium’ on new EDGE Tax Credit awards *** [that] required [Kane]to draft a letter to the Director of the [DCEO], to be signed by [Option Care's] CFO."

¶ 8 The trial court granted summary judgment to Option Care on Kane's breach of contract count, after finding that Kane had not alleged the threshold requirement of a valid and enforceable contract and instead based his claim on a lobbying agreement that was prohibited by statute and unenforceable as a matter of public policy. The trial court's reason for granting summary judgment as to Kane's quantum meruit count was that where enforcement of an illegal contract is sought, a court should leave the parties where they have placed themselves, rather than effectively enforcing an unlawful bargain under a different legal theory. Kane brought this appeal after the trial court denied his motion to reconsider entering summary judgment. The trial court did not reach Option Care's motion to strike as untimely the documents that Kane attached to his motion for reconsideration.

¶ 9 In keeping with the principle of freedom to contract, courts are hesitant to declare contracts void as...