Landers-Scelfo v. CORPORATE OFFICE SYSTEMS

• Decision Date: 19 April 2005
• Docket Number: No. 2-04-0919.,2-04-0919.
• Citation: 827 N.E.2d 1051,356 Ill. App.3d 1060,293 Ill.Dec. 170
• Parties: Theresa LANDERS-SCELFO, Plaintiff-Appellant, v. CORPORATE OFFICE SYSTEMS, INC., Costello Johnson, and Eunita Johnson, Defendants (Synergy PEO, LLC, d/b/a The Synergy Plan and Synergy, Defendant-Appellee).
• Court: United States Appellate Court of Illinois

827 N.E.2d 1051

356 Ill. App.3d 1060

293 Ill.Dec. 170

Theresa LANDERS-SCELFO, Plaintiff-Appellant, v. CORPORATE OFFICE SYSTEMS, INC., Costello Johnson, and Eunita Johnson, Defendants (Synergy PEO, LLC, d/b/a The Synergy Plan and Synergy, Defendant-Appellee).

No. 2-04-0919.

Appellate Court of Illinois, Second District.

April 19, 2005.

Russell J. Heitz, Wyeth, Heitz & Bromberek, Naperville, for Theresa Landers-Scelfo.

Brad S. Grayson, Jeremy J. Kramer, Strauss & Malk LLP, Northbrook, for Corporate Office Systems, Inc.

Justice CALLUM delivered the opinion of the court:

I. INTRODUCTION

Plaintiff, Theresa Landers-Scelfo, appeals from the dismissal with prejudice of those counts of her second amended complaint that sought damages against Synergy PEO, LLC (d/b/a The Synergy Plan and Synergy), for commissions on sales she made as an account executive for Corporate Office Systems, Inc. (COS), and for attorney fees associated with her attempt to recover those commissions. The complaint laid out three theories of recovery: (1) a partnership or joint venture between COS and Synergy had been plaintiff's employer, and Synergy was liable to her in its capacity as a member of the joint venture or partnership; (2) Synergy was her "employer," as the Illinois Wage Payment and Collection Act (Wage Collection Act) (820 ILCS 115/1 et seq. (West 2002)) uses that term, and therefore was liable to her for all "wages," including commissions; and (3) plaintiff made a proper demand on Synergy for the payment of the compensation and therefore was entitled to the payment of her attorney fees incurred in collecting the compensation under the Attorneys Fees in Wage Actions Act (Fees Act) (705 ILCS 225/0.01 et seq. (West 2002)).

Plaintiff contends that the court erred in ruling that she had failed to plead that Synergy was her employer under the Wage Collection Act, the Fees Act, and as a member of a partnership or joint venture with COS. With regard to her claim under the Wage Collection Act only, we agree. We hold that, by pleading that she did work and that Synergy paid her for it, plaintiff adequately pleaded that she had an employment agreement with Synergy. However, we find no facts in the complaint that suggest that Synergy and COS were involved in a partnership or joint venture. Therefore, the court did not err in dismissing the count based on that theory. Further, we hold that the Fees Act applies only to common-law employees, and plaintiff failed to plead any facts showing a common-law employment relationship. Therefore, the court properly dismissed the Fees Act claim. Because the court erred in dismissing plaintiff's Wage Collection Act claim, we reverse the dismissal of that count against Synergy and remand the case to the trial court.

II. BACKGROUND

This appeal arises from plaintiff's suit against COS; Costello Johnson, president of COS; Eunita Johnson, secretary of COS; and Synergy. Plaintiff claimed that each was liable to her for more than $105,000 in sales commissions that she earned while working as an account executive for COS. As set out in her second amended complaint, she alleged that COS hired her as an account executive in October 2001 and agreed to pay commissions to her according to a formula (the compensation formula) set out in a letter that it sent to her when it hired her. It paid commissions consistent with the compensation formula through part of the first quarter of 2002. Then, "[s]ometime early in the first quarter of 2002, Synergy * * * entered into a partnership or joint venture with COS, whereby COS and Synergy became co-employers of [plaintiff] and stated to all employees that part of Synergy's responsibility [was] to administer all future human resource duties and ensure the continuation and consistent practice of honoring all previous COS employee compensation plans and programs." From the first quarter of 2002 until the end of the year, Synergy and COS together paid plaintiff commissions consistent with the compensation formula—an amount exceeding $450,000. In January 2003, COS and Synergy stopped paying her the commissions due under the compensation formula. Plaintiff demanded payment from both COS and Synergy, but neither paid her. COS ended plaintiff's employment in June 2003, at which point her unpaid commissions exceeded $105,000. She made a written demand on Synergy for her unpaid compensation, to no effect.

Plaintiff attached as exhibits COS's calculations of commissions due its account executives as of April 2003, and a printout listing each sale and the commission due on each. She also attached several of her pay stubs, showing payment of commissions. The stubs listed Synergy as the "company" and COS as the "client." Finally, she attached a copy of an unsigned letter that she described as the letter laying out the compensation formula, which she said COS sent to her at the outset of her employment.

In her first count against Synergy, plaintiff alleged that, as COS's partner or joint venturer and as plaintiff's co-employer, Synergy was jointly liable with COS to her for her compensation. In the second count, plaintiff alleged that Synergy was liable to her as her employer under the Wage Collection Act. In the third, she alleged that, because she had made a proper demand against Synergy for her wages, it was liable to pay her reasonable attorney fees under the Fees Act.

Synergy moved under section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2002)) to dismiss with prejudice the counts directed to it. It argued that the second amended complaint, and also the preceding two complaints, lacked facts showing that Synergy had an agreement with plaintiff to pay her commissions. Further, it said, plaintiff failed to allege any facts suggesting a partnership or joint venture between COS and Synergy. It suggested that, were the agreement between Synergy and COS before the court, it would be obvious that Synergy was not plaintiff's employer.

Plaintiff responded, objecting to what she argued was Synergy's improper injection of new assertions of fact into a motion under section 2-615. She asked that the court therefore treat the motion as one under section 2-619 of the Code (735 ILCS 5/2-619 (West 2002)), and asked the court to consider exhibits and affidavits that she had attached to the response.

Synergy replied. It argued that "[t]here must be something more than mere employer status for Synergy to be liable on a contract that the Plaintiff had with another party. However, that `something more than mere employer status' is missing from the Plaintiff's Complaint." Synergy continued:

"The additional materials [submitted by plaintiff] merely confirm, as do the paycheck stubs attached to the Complaint, that Synergy did become an employer of the Plaintiff. However, * * * that alone does not establish any liability on Synergy's part to the Plaintiff for obligations undertaken by another party under a prior alleged agreement with that other party."

Synergy did not attach any affidavits or other exhibits to this filing, nor did it submit any exhibits (other than copies of plaintiff's filings) with any other filing.

The court heard arguments on the motion. It noted that discovery was underway and pointed out that, despite discovery, plaintiff had not attached a copy of any contract between COS and Synergy to its filings.

The court granted the motion to dismiss with prejudice, stating that, by the parties' agreement, it was treating the motion as one under section 2-619. It ruled that plaintiff had failed to allege that Synergy ever hired her or any other COS employee. Further, it found that plaintiff "consciously" decided not to include a copy of the agreement between COS and Synergy. It found that "[t]he contract was for Synergy to perform duties for COS which included payroll duties for COS's employees." Moreover, "[e]mployers exert control over employees such as hiring, firing, negotiating compensation, supervising, controlling and profiting from the labors of the employee." Because "[t]he plaintiff does not allege[ ] that her work was ever supervised or controlled by Synergy," she was not an employee of Synergy. It found no just reason to delay enforcement or appeal of the order. Plaintiff timely appeals this order.

III. ANALYSIS

A. Nature of Motion

Initially, we must decide what sort of order we are reviewing. The substance of the order requires us to treat it as dismissing the counts pursuant to section 2-615 of the Code. The trial court professed to dismiss the complaint pursuant to section 2-619 of the Code, and plaintiff accepts that characterization in her brief. However, Synergy was correct to label its motion as one under section 2-615, and the order, despite its label, was consistent with a ruling on a section 2-615 motion.

A party moving to dismiss under section 2-619 admits the legal sufficiency of the complaint, but asserts the existence of an external defect or defense that defeats the cause of action. Nelson v. Crystal Lake Park District, 342 Ill.App.3d 917, 920, 277 Ill.Dec. 560, 796 N.E.2d 646 (2003). Under section 2-615, he or she denies the legal sufficiency of the complaint. Bank of Northern Illinois v. Nugent, 223 Ill.App.3d 1, 7, 165 Ill.Dec. 514, 584 N.E.2d 948 (1991). Synergy, in its motion to dismiss, argued that plaintiff had failed to plead facts showing any agreement by Synergy to pay her according to the compensation formula. Although the court made an extraneous and unsupported finding of fact regarding the terms of the contract between COS and Synergy, at the heart of its decision was its holding that plaintiff had failed to plead that Synergy had hired her or that it was her employer. Thus, both the motion and the order addressed the sufficiency of the complaint and were properly matters that fall under section 2-615. In deciding how to classify a document, we look to its substance, not its label. See Peterson v. Randhava, 313...