Serpe v. Williams, 85 C 6404.
| Decision Date | 30 October 1991 |
| Docket Number | No. 85 C 6404.,85 C 6404. |
| Parties | Daniel SERPE, Georgiann Serpe, James Korbilas, Danielle Korbilas, Mark Rekowski, Ernestine Rekowski, and Allan Demars, trustee in Bankruptcy for the Estate of Clifford Szpekowski and Mary Szpekowski, Plaintiffs, v. Arthur L. WILLIAMS, Jr., A.L. Williams General Agency, A.L. Williams & Associates, Inc., A.L. Williams Corp., A.L. Williams Life Insurance Company, First American National Securities, Inc., Massachusetts Indemnity and Life Insurance Co., Stanley Lane, Lourdes Lane, Robert Buisson, Robert Miller, Robert Turley, Arthur Villas, Charles Miller, Grant Garcia, Emanuel DeKayre, Ned Web, and Boe Adams, Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Jordan Nmi Bell, Jordan Bell, Richard David Grossman, Dannen, Crane, Heyman & Simon, Chicago, Ill., for plaintiffs.
Fred H. Bartlit, Jr., Philip Scott Beck, Sheila W. Elston, Kirkland & Ellis, Stephen M. Murray, Daniel I. Schlessinger, M. Nicole Marcey, Nick J. DiGiovanni, R.R. McMahan, Lord, Bissell & Brook, Chicago, Ill., for Arthur L. Williams, A.L. Williams General Agency, A.L. Williams and Assoc. Massachusetts Indem. & Life Ins. Co., Robert Buisson, Robert Miller and Boe Adams.
James Thomas Nyeste, Edward T. Butt, Jr., Wildman, Harrold, Allen & Dixon, Chicago, Ill., for A.L. Williams Corp., A.L. Williams Life Ins. Co. and First American Nat. Securities, Inc.
Michael K. Murtaugh, William Lynch Schaller, Baker & McKenzie, Chicago, Ill., for Stanley & Lourdes Lane, Robert Turley, Arthur Villas, Charles Miller, Grant Garcia, Emanuel DeKayre, Ned Web.
Defendants move to dismiss certain plaintiffs alleging these plaintiffs lack standing (Fed.R.Civ.Proc. 12(b)(1)). For the reasons stated below, the court grants the motion.
Defendants are engaged in the sale of life insurance products. In order to recruit more sales personnel, A.L. Williams & Associates implemented the "Future RVP (Regional Vice President) Club" program. This club had strenuous requirements which, if satisfied, would have entitled the club member to become a Regional Vice President and thereafter earn a substantial income.
On December 29, 1984, Daniel Serpe, James Korbilas, Mark Rekowski, and Clifford Szpekowski ("Club Members") signed contracts to become members of the "Future RVP Club." Georgiann Serpe, Danielle Korbilas, Ernestine Rekowski, and Mary Szpekowski (collectively "wives") signed their respective husband's contract above a line titled "Spouse." The contract spells out in great detail the requirements of club membership, but there is no promise, duty, or obligation of any spouse nor is there reference to the spouse other than a signature line.
Various letters, books, audio tapes, and brochures were sent to each of the Club Members. In these, the spouses and family of Club Members were encouraged to participate in certain club activities and help the Club Member attain his goal of becoming a Regional Vice President. Specifically, the spouse of a club member was encouraged to attend club functions with her husband. The materials consistently stressed the family effort needed to support the club member.
After the Club Members joined, defendants unilaterally modified the contract between themselves and the Club Members. This modification required substantially more work from each of the Club Members before they could obtain RVP status. Club Members objected to the modifications but nonetheless complied with the modified requirements. Regardless, they were denied sales representative Regional Vice President status by defendants. Club Members and their spouses sued alleging violations of 18 U.S.C. § 1962, breach of fiduciary duties, fraud, and breach of contract. Two counts against several defendants were dismissed by another court,1 and now defendants move to dismiss all claims of the spouses of the Club Members.
On a motion to dismiss, all well-pleaded factual allegations are taken as true. Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir.1991). All reasonable inferences to be drawn from those allegations are also accepted as true. Doe ex rel. Doe v. St. Joseph's Hosp., 788 F.2d 411 (7th Cir.1986). Dismissal under Federal Rule of Civil Procedure 12(b) is proper if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Papapetropoulous v. Milwaukee Transp. Serv., Inc., 795 F.2d 591, 594 (7th Cir.1986).
Defendants assert two bases for dismissal of the wives of the Club Members. First, they contend that the wives had no contractual relationship with the defendants and therefore have no standing to sue to enforce the agreement. Plaintiffs counter by pointing to various statements in their complaint and references to spousal support in the materials provided to their husbands. Second, defendants contend the wives have not been injured since any claim they have is necessarily dependent upon their respective husband's claim. Plaintiffs counter this claim by alleging the wives are third party beneficiaries to the contract.
In construing a contract, the court's singular purpose is to give effect to the intent of the parties as expressed. See Connecticut Gen. Life Ins. Co. v. Chicago Title & Trust Co., 714 F.2d 48, 50 (7th Cir.1983); see also, American College of Surgeons v. Lumbermens Mut. Casualty Co., 142 Ill.App.3d 680, 693, 96 Ill.Dec. 719, 729, 491 N.E.2d 1179, 1189 (1st Dist.1986) (). A contract is formed only after there is an offer, acceptance, and consideration. Martin v. Government Employees Ins. Co., 206 Ill.App.3d 1031, 1035, 151 Ill.Dec. 926, 928, 565 N.E.2d 197, 199 (1st Dist.1990). Consideration is any act or promise which is of benefit to one party or detriment to the other. Ahern v. Knecht, 202 Ill.App.3d 709, 715, 150 Ill.Dec. 660, 664, 563 N.E.2d 787, 791 (2d Dist.1990). If there is a failure of consideration, there is no contract. Corroon & Black of Ill., Inc. v. Magner, 145 Ill.App.3d 151, 162, 98 Ill.Dec. 663, 669, 494 N.E.2d 785, 791 (1st Dist.1986) (). The burden of proof is on the party seeking to enforce the agreement. Commonwealth Edison Co. v. Industrial Comm'n, 167 Ill.App.3d 229, 233, 118 Ill.Dec. 91, 93, 521 N.E.2d 159, 161 (3d Dist.1988).
The court finds the wives are not parties to the contract. The two-page contract enumerates no responsibilities for the wives. Yet the Club Member's duties are spelled out in considerable detail. Indeed the only mention of a spouse in the contract is on the signature line. This lone reference is insufficient to indicate an intent to make the wives parties to an otherwise very detailed agreement.
Aware of this deficiency, the wives point to the other materials provided to their husbands as Club Members and seek to include those materials as part of the agreement. Even assuming these items became part of the ultimate agreement, they are of little assistance to the wives' claims. At best, the wives along with other family members are "strongly encouraged" to participate in activities with the Club Member to help him achieve his goal. These generalized references are insufficient to show an intent to make someone a party to this otherwise very specific contract. They do not show any intention that the wives become obliged to do anything for the benefit of another party to the contract. Indeed, they are not required to do anything. They are merely encouraged to support their husbands and attend club functions. Even under this broad reading of the agreement, the wives have no requirement to do anything and were not intended to parties to this agreement.
Moreover, any promise made by the wives is illusory. They could not be parties to this agreement given the facts presented here since they have bound themselves to do something, support their husbands, only if they want to. This "promise" is illusory and insufficient to serve as consideration. See Martin v. Federal Life Ins. Co., 109 Ill.App.3d 596, 603, 65 Ill.Dec....
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