MBL (USA) Corp. v. Diekman

• Decision Date: 17 September 1985
• Docket Number: No. 84-2826,CHEMI-FLE,INC,84-2826
• Citation: 137 Ill.App.3d 238,91 Ill.Dec. 812,484 N.E.2d 371
• Parties: , 91 Ill.Dec. 812, 1985-2 Trade Cases P 66,899 MBL (USA) CORPORATION, an Illinois corporation, Plaintiff-Counterdefendant- Appellee, v. Frederick J. DIEKMAN, individually, FBN Industries, an Illinois corporation, and Surface Additions, Inc., an Illinois corporation, Defendants- Counterplaintiffs-Appellants, v., an Illinois corporation, and Ernest Meeder, Third Party Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 371

484 N.E.2d 371

137 Ill.App.3d 238, 91 Ill.Dec. 812,

1985-2 Trade Cases P 66,899

MBL (USA) CORPORATION, an Illinois corporation, Plaintiff-Counterdefendant- Appellee, v. Frederick J. DIEKMAN, individually, FBN Industries, an Illinois corporation, and Surface Additions, Inc., an Illinois corporation, Defendants- Counterplaintiffs-Appellants, v. CHEMI-FLEX, INC., an Illinois corporation, and Ernest

Meeder, Third Party Defendants-Appellees.

No. 84-2826.

Appellate Court of Illinois First District, Second Division.

Sept. 17, 1985.

Rehearing Denied Oct. 29, 1985.

Arvey, Hodes, Costello & Burman, Irwin I. Zatz, Roger G. Fein, Rosemarie J. Guadnolo, Leonard Saphire-Bernstein, Chicago, for defendants-counterplaintiffs-appellants.

Masuda, Funai, Eifert & Mitchell, Ltd., Jerrold E. Fink, Nancy E. Sasamoto, Chicago, for plaintiff-counterdefendant-appellee.

Arnold M. Flank, Ltd., Chicago, for third party defendants-appellees.

BILANDIC, Justice:

Appellants Frederick J. Diekman, FBN Industries, and Surface Additions, Inc. (hereinafter referred to collectively as Diekman) appeal from an order of the circuit court that dismissed their amended counterclaim with prejudice. The amended counterclaim alleged that appellees MBL (USA) Corp. (hereinafter MBL), Chemi-Flex, Inc., and Ernest Meeder conspired to monopolize the urethane timing belt market in Illinois in violation of the Illinois Antitrust Act. (Ill.Rev.Stat.1983, ch. 38, par. 60-1 et seq. ) After appellees moved to dismiss the amended counterclaim under sections 2-615 and 2-619 of the Code of Civil Procedure (Ill.Rev.Stat.1983, ch. 110, pars. 2-615, 2-619), the circuit court dismissed the counterclaim by ruling that the counterclaim was barred by the statute of limitations and that it failed to state a cause of action for monopolization and conspiracy.

Appellant Diekman appealed and argues three points: (1) that the motions to dismiss were improper; (2) that the amended counterclaim did state a cause of action; and (3) that the cause of action was not barred by the statute of limitations.

This is the second time that these parties have appeared before this court. In our first opinion, MBL (USA) Corp. v. Diekman (1st Dist.1983), 112 Ill.App.3d 229, 67 Ill.Dec. 938, 445 N.E.2d 418, appeal denied, 94 Ill.2d 553, we found the following facts. Appellee MBL is owned by two Japanese companies. In 1979, MBL acquired appellee Chemi-Flex, Inc., an Illinois corporation engaged in the business of manufacturing urethane timing belts, flat belts, and related products. Chemi-Flex, Inc. was formed by appellee Ernest Meeder in 1971.

Appellant Diekman is a former employee of Chemi-Flex, who began working for it part-time while he was a student. After Diekman graduated from college, he began working for Chemi-Flex full-time in 1972. In December 1972, Diekman signed a restrictive covenant, which is the basis of MBL's suit against Diekman.

Diekman worked for Chemi-Flex until he was fired in 1978. He was rehired in 1979 after Chemi-Flex had been acquired by MBL. At that time, the president of MBL asked Diekman to sign a restrictive covenant agreement. He refused to do so because it was too restrictive and unfair. No further discussions took place and Diekman never signed the agreement. According to Diekman, he was fired in September 1979 over continuing disputes about hiring practices and the manner in which the company was being run. MBL's officers claimed that Diekman left voluntarily.

Later that year, Diekman formed two corporations, appellants FBN Industries and Surface Additions, Inc. Diekman began to design machines for belt-producing equipment. When MBL learned that Diekman was planning on competing with it, it sent Diekman a letter and asked that he comply with the restrictive covenant that he signed in 1972. MBL also requested Diekman to disclose his designs and other business activities. Diekman refused, and MBL filed a verified complaint and moved for injunctive relief. A temporary restraining order was entered on December 30, 1980. After a hearing, the court dissolved the TRO and refused to issue a preliminary injunction. MBL appealed, and we affirmed. MBL (USA) Corp. v. Diekman (1st Dist.1983), 112 Ill.App.3d 229, 445 N.E.2d 418, appeal denied, 94 Ill.2d 553.

Diekman filed his original answer and counterclaim on April 24, 1981. In it, he alleged that:

"1. Chemi-Flex, Inc. and Ernest Meeder have been and are engaged in the business of producing and distributing urethane timing belts and related products.

2. Chemi-Flex, Inc. and Ernest Meeder sold and distributed a substantial part of the urethane timings in the Midwest area.

3. Since at least December 18, 1972, Chemi-Flex, Inc. and Ernest Meeder have attempted to contract in restraint of trade, to maintain and use a monopoly power and to unreasonably restrain trade and eliminate competition in the manufacture and sale of urethane timing belts * * *." (Emphasis supplied.)

It was the last statement, that alleged a 1972 date, on which the trial court based its ruling that the cause of action, filed in 1981, was barred by the applicable four-year statute of limitations. Ill.Rev.Stat.1983, ch. 38, par. 60-7(2).

After MBL moved to strike and dismiss the counterclaim, Diekman filed his amended counterclaim. He alleged, in part, that:

"5. On or about December 17, 1980[,] and since that date until the date of filing of this counterclaim, the defendants and each of them have conspired and combined to establish, maintain, use and attempt to acquire monopoly power over a substantial part of trade or commerce in the State of Illinois * * *."

Diekman also claimed that MBL and Chemi-Flex had furthered this conspiracy by MBL's acquisition of Chemi-Flex and threats of baseless litigation, and carrying out those threats by litigation without basis to enforce the alleged restrictive covenant agreements.

Both MBL and Meeder moved to strike and dismiss the amended counterclaim, and attached affidavits and other factual material along with his motion. Both motions were based on sections 2-615 and 2-619 of the Code of Civil Procedure. (Ill.Rev.Stat.1983, ch. 110, pars. 2-615, 2-619.) About a month later, on June 22, 1984, Meeder also filed a motion for summary judgment. On October 24, 1984, the circuit court dismissed the counterclaim with prejudice, ruling that it failed to state a cause of action and that the statute of limitations barred the action. It is from this order that Diekman appealed.

I.

Counterdefendant MBL filed a combined motion under sections 2-615 and 2-619 to strike and dismiss the amended counterclaim of Diekman. It was supported by the affidavit of Keiji Morata, an executive vice-president and director of MBL. Likewise, third party defendant Ernest Meeder filed an almost identical combined motion under sections 2-615 and 2-619. It was supported by his personal affidavit.

The combined motions of each sought dismissal on the grounds that: (1) the cause of action was barred by the four-year statute of limitations of the Illinois Antitrust Act; (2) that the amended counterclaim was insufficient as a matter of law because it did not state a cause of action; and (3) that the allegations of conspiracy were false and without basis in fact. The motions did not segregate the points raised under section 2-615 from the points raised under section 2-619. The affidavits did not state that they were attached in support of any particular point or points. In addition, the affidavits also attempted to controvert specific allegations of the amended counterclaim.

A motion under section 2-615 proceeds under a different legal theory than a motion under section 2-619. Under section 2-615, one may seek dismissal of a complaint for failure to state a cause of action and must therein specify why the pleading is legally insufficient. This motion admits all well-pleaded facts in the complaint, and they must be taken as true. Factual defenses are not available under this section; the court may consider only the allegations in the complaint and may not consider supporting affidavits offered by the movant. Davis v. Weiskopf (2d Dist.1982), 108 Ill.App.3d 505, 509, 64 Ill.Dec. 131, 439 N.E.2d 60.

On the other hand, while a motion under section 2-619 also admits facts well-pleaded, it also admits the legal sufficiency of the attacked pleadings. Under section 2-619, one may seek dismissal of an action because it is barred by affirmative matter that defeats the claim, and one may support the motion by facts stated in an affidavit if the grounds do not appear on the face of the complaint. 108 Ill.App.3d 505, 509, 64 Ill.Dec. 131, 439 N.E.2d 60.

The issue that confronts us is one "which all too frequently arises on appeal." (Eddings v. Dundee Township Highway Commissioner (2d Dist.1985), 135 Ill.App.3d 190, 199, 88 Ill.Dec. 397, 403, 478 N.E.2d 888, 894.) The appellees did not designate under what section the motion to dismiss was brought, even though "[m]eticulous practice dictates that a lawyer specifically designate whether his motion to dismiss is pursuant to section 2-615 or 2-619." 135 Ill.App.3d 190, 199, 88 Ill.Dec. 397, 403, 478 N.E.2d 888, 894.

The leading case regarding motion practice is Janes v. First Federal Savings & Loan Association (1974), 57 Ill.2d 398, 312 N.E.2d 605. There, defendants filed motions that were a hybrid between a motion to dismiss and summary judgment. The supreme court expressly disapproved of the practice, but it ruled on the merits to save judicial resources. (57 Ill.2d 398, 406-07, 312 N.E.2d 605.) Since Janes, appellate courts have generally reviewed the merits of improperly made motions to dismiss, and we have held that joining the two motions is error, although not per se reversible error absent a showing of prejudice. (Herman v. Hamblet (1st Dist.1980), 81 Ill.App.3d 1050, 1055, 36 Ill.Dec. 835, 401 N.E.2d 973.) More recently, in Eddings v. Dundee Township Highway Commissioner (2d...