WW VINCENT v. FIRST COLONY LIFE INS.

• Decision Date: 11 August 2004
• Docket Number: No. 1-03-1666.,1-03-1666.
• Citation: 286 Ill.Dec. 734,814 N.E.2d 960,351 Ill. App.3d 752
• Parties: W.W. VINCENT AND COMPANY and Northwest Insurance Service Center, Inc., by Weiss Insurance Agencies, Inc., successor in interest, Plaintiffs-Appellants, v. FIRST COLONY LIFE INSURANCE CO. and Lincoln National Corporation, Defendants-Appellees (Rick Redman and Geraldine Jensen, as special representative for John Jensen, deceased, Defendants).
• Court: United States Appellate Court of Illinois

814 N.E.2d 960

351 Ill. App.3d 752

286 Ill.Dec. 734

W.W. VINCENT AND COMPANY and Northwest Insurance Service Center, Inc., by Weiss Insurance Agencies, Inc., successor in interest, Plaintiffs-Appellants, v. FIRST COLONY LIFE INSURANCE CO. and Lincoln National Corporation, Defendants-Appellees (Rick Redman and Geraldine Jensen, as special representative for John Jensen, deceased, Defendants).

No. 1-03-1666.

Appellate Court of Illinois, First District, Third Division.

August 11, 2004.

Law Office of Francis Bongiovann, of counsel, Melrose Park, & Julie M. Bordo, LLC, Evanston (Julie M. Bordo, of counsel), for Appellants.

Chittenden, Murday & Novotny LLC, Chicago (Donald A. Murday & Craig M. Bargher, of counsel), for Lincoln Nation Corporation.

Varga Berger Ledsky Hayes & Casey, Chicago (Craig A. Varga & Harold B. Hilborn, of counsel), for First Colony Life Insurance Co.

Presiding Justice HOFFMAN delivered the opinion of the court:

The plaintiffs, W.W. Vincent and Company (Vincent) and Northwest Insurance Service Center, Inc. (Northwest), by Weiss Insurance Agencies, Inc., as successor in interest, appeal from two orders of the circuit court which granted First Colony Life Insurance Company (First Colony) and Lincoln National Corporation's (Lincoln National) respective motions to dismiss various counts of the plaintiffs' amended and third amended complaints for failure to state causes of action. For the reasons which follow, we affirm in part, reverse in part, and remand for further proceedings.

The following general allegations of fact were set forth in each of the plaintiffs' complaints. On July 31, 1992, Northwest and Lincoln National executed a Stock Purchase Agreement (the Agreement) pursuant to the terms of which Northwest purchased all of the issued and outstanding stock of Vincent. Prior to executing the Agreement, Northwest conducted a due diligence investigation and received documents from Lincoln National in order to determine the appropriate purchase price for Vincent's stock. One of the many documents received by Northwest during this due diligence investigation was a General Agents Contract between Vincent and First Colony dated November 25, 1987. Under the General Agents Contract, Vincent had agreed to sell life insurance policies for First Colony in exchange for certain service fees due at the end of the tenth policy year. In April 1998, when the fees became due, First Colony made the first of four monthly payments to Vincent. Following the fourth payment in July 1998, First Colony ceased paying Vincent and began to issue service fee checks to Rick Redman under a purported assignment of the General Agents Contract from Vincent to Redman dated October 31, 1990. The assignment was not provided to the plaintiffs during the due diligence investigation or at the time the Agreement was executed.

On February 8, 2001, the plaintiffs filed a seven-count complaint against First Colony, Lincoln National, Redman and John Jensen. Following motions to dismiss filed by First Colony, Lincoln National and John Jensen pursuant to section 2-615 of the Code of Civil Procedure (the Code) (735 ILCS 5/2-615 (West 2002)), the circuit court entered an order on October 30, 2001, which, inter alia, struck those counts in the complaint directed against First Colony, Lincoln National and John Jensen, and granted the plaintiffs leave to file an amended complaint.

On January 15, 2002, the plaintiffs filed an eight-count amended complaint against First Colony, Lincoln National, Rick Redman and John Jensen. First Colony, Lincoln National and John Jensen once again responded with section 2-615 motions to dismiss and, on May 17, 2002, the circuit court entered an order which, inter alia, granted First Colony's motion to dismiss counts V (breach of contract), VI (a declaratory judgment as to the validity of the alleged assignment of the General Agents Contract), and VII (rescission of the assignment) of the amended complaint, struck those counts directed against Lincoln National, and granted the plaintiffs leave to file a second amended complaint as to Lincoln National.

On September 24, 2002, the plaintiffs filed a second amended complaint against Lincoln National, Redman and John Jensen. The plaintiffs did not reallege, incorporate by reference, or refer to the previously dismissed counts against First Colony. The plaintiffs' second amended complaint was subsequently stricken for failing to name Geraldine Jensen as the special representative of John Jensen.

On January 2, 2003, the plaintiffs filed a third amended complaint against Lincoln National, Redman and Geraldine Jensen, as personal representative of John Jensen, deceased. The plaintiffs once again failed to reallege, incorporate by reference, or refer to the previously dismissed counts against First Colony. Counts I, II, III, V and VIII of the third amended complaint set forth claims against Lincoln National for breach of contract (counts I and II), fraudulent misrepresentation (count III), fraudulent concealment (count V), and unjust enrichment (count VIII). Lincoln National filed a section 2-615 motion to dismiss counts I, II, III, V and VIII, which the circuit court granted on January 14, 2003.

On June 4, 2003, the circuit court made the requisite findings under Supreme Court Rule 304(a) (155 Ill.2d R. 304(a)) that there was no just reason to delay enforcement or appeal from that portion of the court's order of May 17, 2002, dismissing all counts of the plaintiffs' amended complaint against First Colony, and that portion of the January 14, 2003, order dismissing all counts of the third amended complaint against Lincoln National. Thereafter, the plaintiffs filed the instant appeal.

First, the plaintiffs' contend that the circuit court erred in dismissing the claims against First Colony for breach of contract, declaratory judgment and rescission as set forth in their amended complaint. However, for the reasons which follow, we find that the plaintiffs have waived consideration of any issues relating to the dismissal of these claims.

Where an amended pleading is complete in itself, and does not reallege, incorporate by reference, or refer to the claims and supporting facts set forth in a prior complaint, the prior pleading ceases to be part of the record for most purposes, being in effect abandoned and withdrawn. Foxcroft Townhome Owners Association v. Hoffman Rosner Corp., 96 Ill.2d 150, 154, 70 Ill.Dec. 251, 449 N.E.2d 125 (1983). A party who files an amended pleading waives any objection to the circuit court's ruling on a former complaint. Boatmen's National Bank v. Direct Lines, Inc., 167 Ill.2d 88, 99, 212 Ill.Dec. 267, 656 N.E.2d 1101 (1995); Foxcroft, 96 Ill.2d at 153,70 Ill.Dec. 251,449 N.E.2d 125. In order to preserve for review the dismissal of claims contained in a prior complaint, a plaintiff must either stand on the dismissed counts and challenge the ruling at the appellate level prior to filing an amended complaint, or reallege the dismissed counts in subsequent complaints. Doe v. Roe, 289 Ill.App.3d 116, 120, 224 Ill.Dec. 325, 681 N.E.2d 640 (1997).

Here, the plaintiffs' second and third amended complaints failed to reallege, incorporate, or refer to the claims against First Colony for breach of contract, declaratory judgment or rescission set forth in their amended complaint. Therefore, we must treat as waived all issues pertaining to the dismissal of counts V, VI and VII of the plaintiffs' amended complaint.

Next, we shall address the dismissal of counts I, II, III, V and VIII of the plaintiffs' third, and final, amended complaint. A motion to dismiss brought pursuant to section 2-615 of the Code attacks the legal sufficiency of a complaint based on defects apparent on the face of the complaint. Vitro v. Mihelcic, 209 Ill.2d 76, 81, 282 Ill.Dec. 335, 806 N.E.2d 632 (2004). In ruling on a section 2-615 motion, a court must accept as true all well-pled facts in the complaint and draw all reasonable inferences therefrom in favor of the nonmoving party. Vitro, 209 Ill.2d at 81, 282 Ill.Dec. 335, 806 N.E.2d 632; Hanna v. City of Chicago, 331 Ill.App.3d 295, 303, 264 Ill.Dec. 609, 771 N.E.2d 13 (2002). The critical question on appeal is whether the allegations of the complaint, when viewed in the light most favorable to the plaintiff, are sufficient to state a cause of action upon which relief can be granted. Borowiec v. Gateway 2000, Inc., 209 Ill.2d 376, 382, 283 Ill.Dec. 669, 808 N.E.2d 957 (2004). A cause of action should be dismissed pursuant to a section 2-615 motion only if it is clearly apparent that no set of facts can be proven which will entitle the plaintiff to recovery. Borowiec, 209 Ill.2d at 382, 283 Ill.Dec. 669, 808 N.E.2d 957. Our review of a dismissal pursuant to section 2-615 is de novo, and we may affirm upon any grounds for which a factual basis exists in the record. Colmar, Ltd. v. Fremantlemedia North America, Inc., 344 Ill.App.3d 977, 994, 280 Ill.Dec. 72, 801 N.E.2d 1017 (2003).

Initially, we note that, as Lincoln National argues, the plaintiffs have waived any argument on appeal concerning the propriety of the circuit court's dismissal of count VIII of their third amended complaint. Although the plaintiffs' brief contains a general allegation that "each count [of the third amended complaint] states a viable cause of action," the plaintiffs failed to present any argument, or cite to any authority, relating specifically to count VIII. Accordingly, the plaintiffs have forfeited for purposes of review any consideration of the propriety of the circuit court's dismissal of count VIII of their third amended complaint. See Official Reports Advance Sheet No. 21 (October 17, 2001), R. 341(e)(7), eff. October 1, 2001; Lake Point Tower Garage Ass'n v. Property Tax Appeal Board, 346 Ill.App.3d 389, 397, 281 Ill.Dec. 752, 804 N.E.2d 717 (2004). Before addressing the sufficiency of the plaintiffs' allegations as set forth in...