Doherty v. Kahn

Third Division
June 18, 1997


No. 1-96-1073

BILL DOHERTY,                 )    APPEAL FROM THE
                              )    CIRCUIT COURT OF
     Plaintiff-Appellant,          )    COOK COUNTY
                              )
     v.                       )    
                              )
PETER KAHN, PATRICK DRISCOLL,      )    No. 94 CH 6157
JEFF RANDALL, ROBERT MODDER,       )
GLEN REGAL LANDSCAPING, INC.,      )    
                              )    THE HONORABLE
                              )    LORETTA C. DOUGLAS
     Defendants-Appellees.         )    JUDGE PRESIDING.

     PRESIDING JUSTICE COUSINS delivered the opinion of the
court:

     Plaintiff, Bill Doherty filed a complaint against
defendants, Peter Kahn (Kahn), Patrick Driscoll (Driscoll), Jeff
Randall (Randall), Robert Modder (Modder), and Glen Regal
Landscaping.  The 12-count complaint alleged that plaintiff owned
a landscaping business and the defendants offered plaintiff the
opportunity to form a new landscaping business with defendants,
called Glen Regal Landscaping.  The complaint alleged, inter
alia, that, in exchange for plaintiff's employees, his
landscaping equipment, as well as his existing accounts,
plaintiff would become president of the new company, be awarded
65% of the stock, and paid $5,000 per month. The complaint
further alleged that, although plaintiff accepted the offer and
performed his obligation under the agreement, he only received
$2,000 or $3,000 a month. Defendants also reduced his stock to
25% and decided in a meeting that plaintiff would no longer be
president of the company.  Moreover, the complaint alleged that
defendants terminated plaintiff because he refused to engage in
illegal activity.  After his termination, plaintiff was unable to
secure work because defendants had defamed him to the clients and
had refused to return plaintiff's equipment.  Plaintiff alleged
that, because of defendants' actions, he has continued to lose
income, business, and revenue, and he has suffered severe and
intense emotional distress.  Defendants filed motions to dismiss
the complaint pursuant to sections 2-615 and 2-619 of the Code of
Civil Procedure (Code)(735 ILCS 5/2-615, 2-619(West 1992)), which
the trial court granted.  On appeal, plaintiff contends that the
trial court erred in dismissing his actions for: (1) securities
fraud; (2) defamation; (3) tortious interference with contract
and/or prospective economic advantage; (4) back pay based on the
Illinois Wage Payment and Collection Act (820 ILCS 115/1 et seq.
(West 1992)); (5) retaliatory discharge; (6) breach of fiduciary
duties; (7) breach of contract; (8) fraud; (9) conversion; (10)
damages under the Illinois Consumer Fraud and Deceptive Business
Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West
1992)); and (11) intentional infliction of emotional distress. 
The trial court did not dismiss plaintiff's breach of employment
contract claim; therefore, it is not a part of the appeal.
BACKGROUND
     Plaintiff alleged in his second amended complaint that, for
several years prior to May 1993, he ran his own landscaping
company, Doherty Landscaping. In early 1993, plaintiff was
approached by Kahn and Driscoll, both of whom who ran (and
continue to run) a property management company called Creative
Property Management (Creative). Kahn and Driscoll told plaintiff
that Creative managed several townhome and condominium
associations and that they contracted with outside landscapers to
landscape the grounds of those townhome and condominium
associations. They further told plaintiff that they thought it
would be a profitable endeavor to bring landscaping "in house"
and to form their own landscaping company to service the
associations managed by Creative.
     Plaintiff also alleged that Kahn and Driscoll asked
plaintiff to join them and explained that they would handle all
the "financial and administrative details" so that plaintiff
could focus on the client development, sales and operations. They
also told plaintiff he would be the "President" of the company
and own 65% of the stock (Kahn, Driscoll, and Modder would split
the remaining 35% of the stock). Plaintiff was to be paid $5,000
per month salary. In exchange for these promises, plaintiff
agreed to this arrangement and became a part of the new company,
called Glen Regal.
     Plaintiff brought his existing staff, all his landscaping
equipment, as well as his main client, Gatewood Condominium
Association, to the new company, Glen Regal. Several of the
associations managed by Creative were landscaped by plaintiff in
his capacity as the president of Glen Regal, including those
known as Dunbar, Westlake, Copper Oaks and Sarah's Grove. 
Plaintiff alleged that, by October 1993, he was not receiving the
$5,000-per-month salary he had been promised, but was receiving
only $2,000 or $3,000. Plaintiff made repeated demands for his
back pay and was repeatedly promised by defendants that he would
receive the money.
     In approximately March 1994, Kahn and Driscoll held a board
of directors meeting at which they decided to reduce plaintiff's
stock ownership to 25%, voted him out as the president of the
company, and revoked his check-signing privileges on behalf of
Glen Regal. Plaintiff never consented to any of these decisions.
     Plaintiff further alleged that, in April 1994, defendants
asked him to assist Glen Regal in violating a covenant not to
compete with Glass Landscaping (Glass). Jeff Randall was a former
employee of Glass. Upon leaving Glass, Randall was sued pursuant
to a covenant not to compete with Glass. Randall then became an
officer of Glen Regal. Pursuant to the covenant with Glass,
however, Randall could not solicit landscaping clients within 10
miles of the city limits of Rozelle, Illinois, for the next three
years. The terms of this covenant extended to Glen Regal. Kahn
and Randall approached plaintiff and told him that he should
perform the landscaping at various locations and townhomes that
were within 10 miles of Rozelle and, therefore, subject to
Randall's covenant not to compete with Glass. The rationale, as
explained by Kahn and Randall, was that plaintiff would not be
recognized by anybody and they would never know that Glen Regal
was doing the landscaping in violation of the covenant. Plaintiff
was instructed to use unmarked trucks, and, if asked who he was,
plaintiff was to say he was with "Palatine Enterprises" or make
up some similar name. 
     Plaintiff alleged that he refused to engage in these illegal
and improper efforts to circumvent the covenant. When he told
defendants he would not engage in such a conspiracy to violate
the law, he was told that he was "not a team player," that he was
"stupid," and that he was costing Glen Regal over $70,000. 
     Shortly thereafter, in May 1994, plaintiff was locked out of
the yard, which was the location where Glen Regal kept all its
landscaping equipment. Glen Regal refused to return to plaintiff
any of the landscaping equipment locked in the yard, which he had
brought to the company as part of his agreement to join up with
defendants. Moreover, plaintiff alleged that he was no longer
being paid. Glen Regal also "kept" the staff plaintiff brought to
Glen Regal (and because plaintiff did not possess any landscaping
equipment or a company, the staff stayed with Glen Regal).
     Plaintiff also alleged that, when the members of the board
of directors of the Sarah's Grove and Dunbar associations asked
where plaintiff was, and indicated they wanted to "go" with
plaintiff, Kahn and Driscoll said that he was fired because,
among other things, plaintiff was "lazy," "incompetent," and
"could not do his job or what was expected of him." 
     Plaintiff alleged that he lost Gatewood, the client he
originally brought with him to Glen Regal, because he could not
perform mowing and landscaping services as a result of being
unable to access any of his equipment. He also alleged that the
Sarah's Grove association had decided they wanted plaintiff to
continue performing landscaping services for them, and they even
sent a letter to Glen Regal stating that they were terminating
Glen Regal pursuant to the 30-day termination clause in their
contract. Plaintiff, however, was unable to perform the Sarah's
Grove job because he lacked equipment and, because he was not
being paid, he did not have the money to buy new equipment.
     Plaintiff further alleged that he was supposed to sign a
$900,000 contract with another association, but because he didn't
have any staff or equipment, he was unable to sign the contract
and lost a total of $200,000 in profits over the next three
years. Plaintiff alleged that he continues to lose income,
business and revenue as a result of the fact that he must turn
away business because defendants illegally retained his
landscaping equipment. Plaintiff alleged that, as a result of
defendants' actions, he suffered severe and intense emotional
distress.      
     Defendants filed a motion to dismiss plaintiff's second
amended complaint pursuant to sections 2-615 (735 ILCS 5/2-615
(West 1992)) and 2-619 (735 ILCS 5/2-619 (West 1992)) of the
Illinois Code of Civil Procedure. Following oral argument on
defendants' motion to dismiss, the trial court found as follows:
counts I (violation of securities fraud), II (defamation), V
(violation of Illinois Wage Payment and Collection Act (820 ILCS
115/1 et seq. (West 1992)), VI (retaliatory discharge), X
(conversion), XI (violation of Consumer Fraud Act (815 ILCS 505/2
et seq. (West 1992)) and XII (intentional infliction of emotional
distress) were dismissed with prejudice as to all defendants;
counts VII (breach of fiduciary duty), VIII (breach of contract)
and IX (fraud) were dismissed with prejudice as to Randall and
Modder and without prejudice as to the remaining defendants;
count III (interference with contract and prospective economic
advantage) was dismissed without prejudice; and count IV (breach
of employment contract) was not dismissed. 
     Plaintiff was given until February 20, 1996, to replead
those counts that were dismissed without prejudice. On February
20, 1996, plaintiff voluntarily dismissed count IV, decided not
to replead those counts that were dismissed without prejudice,
and  elected to stand on counts III, VII, VIII and IX as pled in
the second amended complaint. Accordingly, the dismissals of
counts III, VII, VIII and IX were converted to "with prejudice"
and a final order was entered on February 20, 1996, disposing of
all counts as to all defendants. No post-judgment motions were
filed. Plaintiff appeals. 
     We affirm.     
ANALYSIS
                              I
     In considering a motion to dismiss, a reviewing court must
accept as true all well-pleaded facts alleged in the complaint
and all reasonable inferences that can be drawn from those facts.
Wieseman v. Kienstra, Inc., 237 Ill. App. 3d 721, 722, 604 N.E.2d 1126 (1992); Eisenbach v. Esformes, 221 Ill. App. 3d 440, 442,
582 N.E.2d 196 (1991).  The granting of a motion to dismiss is
within the trial court's sound discretion and will not be
reversed unless that discretion is abused.  Eisenbach, 221 Ill.
App. 3d at 442.  
     Plaintiff first contends that he stated a cause of action
for securities fraud pursuant to sections 12(F), (G), and (I) of
the Illinois Securities Law of 1953 (the Securities Act)(815 ILCS
5/12(F), (G), (I)(West 1992)) against Kahn, Driscoll, Modder, and
Glen Regal.  These sections state:
          "It shall be a violation of the provisions of this Act
for any   person:
                                   * * *
          F.  To engage in any transaction, practice or course of
business  in connection with the sale or purchase of securities
which works or      tends to work a fraud or deceit upon the
purchaser or seller thereof.
          G.  To obtain money or property through the sale of
securities by  means     of any untrue statement of a material
fact or any omission to  state a material fact necessary in order
to make the statements made, in    light of the circumstances
under which they were made, not misleading.
          * * *
          I.  To employ any device, scheme or artifice to defraud
in   connection with the sale or purchase of any security,
directly or    indirectly." 815 ILCS 5/12(F), (G), (I)(West
1992). 
     Defendants argue that the trial court properly dismissed
this claim because the transaction upon which plaintiff based his
cause of action was not the sale of a security.  Defendants also
argue that, as an affirmative matter, section 8-319 of the
Uniform Commercial Code (the UCC)(810 ILCS 5/8-319 (West 1992))
bars plaintiff's claim under the Securities Act.  We will first
address whether the Securities Act applies to the instant action.
     The Illinois Securities Law of 1953 defines "security" as:
          "any note, stock, treasury stock ***, or, in general,
any            interest or instrument commonly known as a
'security', or any            certificate of interest or
participation in, temporary or interim       certificate for,
receipt for, guarantee of, or warrant or right to           
subscribe to or purchase, any of the foregoing." 815 ILCS 5/2.1
(West          1992). 
In determining whether an instrument or a transaction is a
security under the statute, form is not to be regarded over
substance.  Boatmen's Bank v. Durham, 203 Ill. App. 3d 921, 927,
561 N.E.2d 206 (1990).  The substance of the transaction, the
relationship between the parties, and economic reality determine
whether a transaction involves a security and whether a purchaser
is entitled to protection afforded by registering or reporting an
instrument pursuant to the securities laws.  Boatmen's Bank, 203
Ill. App. 3d at 927.  
     Furthermore, both the Illinois and the federal courts have
emphasized that a security within the meaning of the securities
laws is a contract, transaction or scheme whereby one person
invests his money in a common enterprise on the theory that he
expects to receive profits solely from the efforts of others. 
Boatmen's Bank, 203 Ill. App. 3d at 927; see Sire Plan
Portfolios, Inc. v. Carpentier, 8 Ill. App. 2d 354, 357, 132 N.E.2d 78 (1956); Securities & Exchange Comm'n v. Howey Co., 328 U.S. 293, 301, 90 L. Ed. 1244, 1251, 66 S. Ct. 1100, 1104 (1946). 
In Polikoff v. Levy, 55 Ill. App. 2d 229, 204 N.E.2d 808 (1965),
the court stated:  
     "The reason for excluding from the scope of the securities
laws those          transactions in which the profits do not come
solely from the efforts of    others is clear.  In such
situations, the member of the enterprise pools    his money with
that of others in the group; he has an equal right of       
control over the project and the opportunity and right to know
what is   going on.  Because of this, the protection of the full
disclosure     offered by registration is not needed as it is in
cases involving a   nonparticipating investor." Polikoff, 55 Ill.
App. 2d at 234.
     We believe that Condux v. Neldon, 83 Ill. App. 3d 575, 404 N.E.2d 523 (1980), is instructive. In Condux, the defendant owned
all the stock of a retail business. He sold the business to two
plaintiffs, who took the business and operated it for over two
years.  Dissatisfied with the results, they sued to rescind the
sale, claiming it was a sale of unregistered securities, in
violation of the Illinois Securities Law of 1953.  The court held
that the transaction did not constitute the sale of securities. 
In particular, the court stated:
          "The sale of stock to a buyer or small group of
affiliated buyers   who are to share in the control and
management of the corporation,     whether personally or through
a nominee independent of the seller, is      not a sale of
securities. Such a transaction is no more than the     outright
sale of the business, as here, or, if the seller retains a part
     interest, the creation of a partnership in corporate form. 
In such a      transaction the corporation and the stock are
incidental." Condux, 83  Ill. App. 3d at 585.  
Therefore, the court concluded that the securities laws did not
apply.  Condux, 83 Ill. App. 3d at 585.
     In the instant case, it is clear from the complaint that the
transaction between the plaintiff and defendants did not involve
the sale of securities within the meaning of the Securities Act. 
According to the complaint, plaintiff was president of the
business and was responsible for client development, sales, and
operations.  Plaintiff shared in the control and management of
the business, and profits were not solely from the effort of
others.  Thus, the transaction for the sale of stock in the
business was not a sale of securities but, rather, a creation of
a partnership in a corporate form.  In view of this holding, we
need not reach the issue of whether the oral agreement for the
sale of stock was barred by the UCC.
                              II
     Plaintiff next contends that the trial court erred in
dismissing his claim for defamation.  Defendants moved to dismiss
the claim pursuant to section 2-615 of the Code.  735 ILCS 5/2-
615 (West 1992).  The trial court dismissed the claim, stating
that, as a matter of law, plaintiff failed to state a cause of
action for defamation.
     Plaintiff alleges in his complaint that, after his
termination, plaintiff sought to compete with defendants and
secure the landscaping business of certain townhome and
condominium associations.  However, plaintiff was unable to
secure the work because defendants had told these potential
customers that plaintiff was "incompetent," lazy," "dishonest,"
"cannot manage a business," "dishonest," and/or "lacks the
ability to perform landscaping services."  Plaintiff argues that
these statements are defamatory per se.  
     Words are considered defamatory per se if they: "(1) impute
the commission of a criminal offense; (2) impute infection with a
loathsome communicable disease; (3) impute inability to perform
or want of integrity in the discharge of duties of office or
employment; or (4) prejudice a party, or impute lack of ability,
in his trade, profession or business."  Mittelman v. Witous, 135 Ill. 2d 220, 238-39, 552 N.E.2d 973 (1989).  To be considered
defamatory per se, the challenged statement must be so obviously
and naturally harmful to the person to whom it refers that a
showing of special damages is unnecessary.  Anderson v. Vanden
Dorpel, 172 Ill. 2d 399, 411-12, 667 N.E.2d 1296 (1996).  
     However, even if the challenged statement fits within one of
the recognized categories that will sustain a per se action,
recovery will not be allowed if the statement can reasonably be
given an innocent construction. Kolegas v. Heftel Broadcasting
Corp., 154 Ill. 2d 1, 10, 607 N.E.2d 201 (1992).  The innocent
construction rule states that "a written or oral statement is to
be considered in context with the words and the implications
therefrom given their natural and obvious meaning; if, as so
construed, the statement may reasonably be innocently interpreted
or reasonably be interpreted as referring to someone other than
the plaintiff, it cannot be actionable per se."  Chapski v.
Copley Press, 92 Ill. 2d 344, 352, 442 N.E.2d 344 (1982).
     The innocent construction rule apples only to actions for
defamation per se.  Mittelman v. Witous, 135 Ill. 2d  at 232-33. 
"The rigorous standard of the modified innocent construction rule
favors defendants in per se actions in that a nondefamatory
interpretation must be adopted if it is reasonable.  The tougher
standard is warranted because of the presumption of damages in
per se actions." (Emphasis in original.) Mittelman, 135 Ill. 2d 
at 234. Whether a statement is capable of an innocent
construction is a question of law.  Chapski, 92 Ill. 2d  at 352.
     Plaintiff argues that the statements made to certain third
parties cannot be innocently construed.  He relies on several
cases to support his argument.  Plaintiff first relies on McGuire
v. Jankiewicz, 8 Ill. App. 3d 319, 290 N.E.2d 675 (1972).  In
McGuire, the court held that the statement "you could not have
chosen a worse attorney" was actionable defamation because it had
the effect of placing plaintiff as the least competent of
licensed practicing attorneys.  The court concluded that the
statement imputed a want of capacity by the plaintiff in the
legal profession and, as such, prejudiced plaintiff by
disparaging his professional reputation. McGuire, 8 Ill. App. 3d
at 320.  
     Plaintiff also relies on Quality Granite Construction Co. v.
Hurst-Rosche Engineers, Inc., 261 Ill. App. 3d 21, 632 N.E.2d 1139 (1994).  In Quality Granite, an insurance company stated in
a letter that a construction company may be considered in default
because of the contractor's failure to complete the project in a
timely manner, substandard workmanship, reluctance to complete
items and inability to interpret correctly the contract
documents, plans and specifications as bid.  The court held that
the statements could not be innocently construed because, in the
context in which it was written, the letter clearly accused the
contractor of professional incompetence.  Quality Granite, 261
Ill. App. 3d at 27.  
     Plaintiff also relies on Welch v. Chicago Tribune Co., 34
Ill. App. 3d 1046, 340 N.E.2d 534 (1975).  In Welch, a notice
distributed in an office stating that plaintiff's termination was
due to alcoholism was held to be defamation per se and not
subject to the innocent construction rule because there were no
surrounding circumstances that would make an innocent
construction of the memorandum possible. Welch, 34 Ill. App. 3d
at 1053. 
     Defendants, on the other hand, assert that the statements
can be innocently construed because the statements were made only
in the context of plaintiff's position with Glen Regal
Landscaping and in the context of his performance and/or
termination as an employee of Glen Regal.  Defendants cite
several cases to support their argument.  Defendants first rely
on Anderson v. Vanden Dorpel, 172 Ill. 2d 399, 667 N.E.2d 1296
(1996).  In Anderson, the supreme court held that an employer's
statement that the plaintiff-employee did not follow up on
assignments could be innocently construed to mean simply that the
plaintiff did not fit in with the organization of the employer
making the assessment and failed to perform well in that
particular job setting, and not as a comment on her ability to
perform in other, future positions.  Anderson, 172 Ill. 2d  at
413.
     Defendants also rely on Valentine v. North American Co. for
Life & Health Insurance, 60 Ill. 2d 168, 328 N.E.2d 265 (1974),
and Taradash v. Adelet/Scott-Fetzer Co., 260 Ill. App. 3d 313,
628 N.E.2d 884 (1993).  In Valentine, the court held that the
statement that the plaintiff was "a lousy agent" could be
innocently construed.  The statement could mean that the
plaintiff did not properly or satisfactorily represent the
company and that there had been a "lousy or generally
unsatisfactory agency relationship."  The court concluded that
the statement in context did not necessarily imply plaintiff's
lack of qualifications or skill in his calling.  Valentine, 60 Ill. 2d  at 171.  In Taradash, the court considered a comment that
an employee was terminated for "lack of performance" and
concluded that the remark was subject to an innocent
construction.  The court noted the variety of possible reasons
for the employee's lack of performance, including conditions in
the industry, the assessment of his performance against
unrealistic standards, and the existence of some other conflict
preventing the employee from meeting the employer's standards. 
Taradash, 260 Ill. App. 3d at 317-18.
     In the case sub judice, we do not believe that plaintiff's
allegations of defamatory statements plead specific and
sufficient facts to state a cause of action.  Illinois law is
clear that a cause of action for defamation must set forth the
statements about which the plaintiff complains with specificity.
See Heying v. Simonaitis, 126 Ill. App. 3d 157, 163, 466 N.E.2d 1137 (1984).  Where the complaint fails to set forth specifically
what statements were communicated, it is impossible for the court
to determine whether the statements give rise to a cause of
action.  Heying, 126 Ill. App. 3d at 163.  Here, plaintiff's
complaint lists conclusory statements that were possibly made to
third parties, as evidenced by his use of "and/or" in his
allegations.  Furthermore, plaintiff does not specifically
identify which statement was made by which defendant and to whom. 
Therefore, we hold that the statements were not set forth with
the requisite specificity to state a cause of action for
defamation.    
     Notwithstanding our holding that plaintiff failed to set
forth specific facts, we do not believe that the statements
alleged in the complaint stated a cause of action for defamation. 
We believe that defendants' alleged statements were mere
expressions of opinion.  The distinction between fact and opinion
is a matter of law.  Ollman v. Evans, 750 F.2d 970, 978 (D.C.
Cir. 1984).  Although mere opinions are not actionable, mixed
expressions of opinion and fact are actionable.  Mittelman, 135 Ill. 2d  at 242. To determine whether a statement is fact or
opinion, a court must evaluate the totality of circumstances and
should consider whether the statement is capable of objective
verification as true or false.  Piersall v. Sportsvision of
Chicago, 230 Ill. App. 3d 503, 510, 595 N.E.2d 103 (1992).  
     Plaintiff argues that the statements were mixed expressions
of fact and opinion and, thus, were actionable defamation. 
Plaintiff again relies on Quality Granite to support his
argument.  In Quality Granite, the court held that the letter
impugning plaintiff's ability to perform contained mixed
expressions of opinions and facts and the facts were subject to
verification.  Defendants rely on Piersall and Kakuris v. Klein,
88 Ill. App. 3d 597, 410 N.E.2d 984 (1980).  We believe these
cases are instructive. In Piersall, the court held that the
statement that the plaintiff was a liar was not actionable
defamation because there were no specific facts at the root of
the statement capable of being objectively verified as true or
false. Piersall, 230 Ill. App. 3d at 510.  Similarly in Kakuris,
the court held that an employer's statements that the employee
exhibited a "[l]ack of achievement in basic goals" and "did not
have the qualifications needed to achieve the objectives of the
profession," merely expressed an opinion that plaintiff proved to
be unsatisfactory in his role as a district scout executive.
Kakuris, 88 Ill. App. 3d at 600. 
                              III  
     Plaintiff next contends that the trial court improperly
dismissed his claim against Glen Regal for wages under the
Illinois Wage Payment and Collection Act (the Wage Act)(820 ILCS
115/1 et seq. (West 1992).  Glen Regal asserts that the Illinois
Wage Payment and Collection Act is inapplicable to the instant
case and plaintiff has failed to plead factual allegations
sufficient to state a claim under the Wage Act.
      In 1973, the Illinois General Assembly enacted the Wage Act
to provide employees with a cause of action for the timely and
complete payment of earned wages or final compensation, without
retaliation from employers.  See S. Miller, Minimum Guaranteed
Rights Under the Illinois Wage Payment and Collection Act, 81
Ill. B.J. 194, 195 (1993).  Upon an employee's separation, an
employer is required to pay the full amount of the employee's
final compensation within the next regularly scheduled pay
period.  820 ILCS 115/5 (West 1992).  An employer convicted under
the Act for intentionally withholding or delaying the payment of
wages or final compensation is guilty of a Class C misdemeanor. 
820 ILCS 115/14(a)(West 1992). The Wage Act defines wages or
final compensation as "any compensation owed an employee by an
employer pursuant to an employment contract or agreement between
the 2 parties."  820 ILCS 115/2 (West 1992).  Claims for wages or
final compensation are thus akin to breach of contract actions.
     In the instant case, it appears from the record that the
trial court  dismissed plaintiff's cause of action under the Wage
Act based on its belief that the Wage Act did not provide for a
private right of action.  This is not so.  Section 11(c) of the
Wage Act provides that an employee can bring a private cause of
action to recover the wages owed to him.  820 ILCS 115/11(c)(West
1992).  
     Plaintiff asserts that, as an employee of Glen Regal, he was
within the class of persons the Wage Act was designed to protect. 
Section 13 of the Wage Act does allow an employee to hold
corporate officers and agents personally liable by proving that
they knowingly permitted the corporation to violate the Wage Act. 
820 ILCS 5/13 (West 1992); see Johnson v. Western Amusement
Corp., 157 Ill. App. 3d 873, 510 N.E.2d 991 (1987); Stafford v.
Puro, 63 F.3d 1436 (7th Cir. 1995).  However, section 2(1) states
that the Wage Act does not apply to an employee "who has been and
will continue to be free from control and direction over the
performance of his work."  820 ILCS 115/2(1)(West 1992).  
     In the case sub judice, it is not clear whether plaintiff is
referring to the time period before or after he was voted out as
president. As president of Glen Regal, plaintiff was an employee
who also had some control over the business and direction over
the performance of his work.  Therefore, we hold that plaintiff
does not fall into the class of employees the Wage Act seeks to
protect.
                                    IV  
     Plaintiff next contends that the trial court erred in
dismissing his claim for retaliatory discharge.  Defendants argue
that plaintiff's claim is not supported by fact or law. 
Retaliatory discharge is an exception to the general rule that
"at-will" employment is terminable at any time for any or no
cause.  Palmateer v. International Harvester Co., 85 Ill. 2d 124,
128, 421 N.E.2d 876 (1981).  The purpose of retaliatory discharge
is to balance the employer's interest in operating a business
efficiently and profitably, the employee's interest in earning a
livelihood, and society's interest in seeing its policies carried
out.  Palmateer, 85 Ill. 2d  at 129.  
     To establish a valid claim for retaliatory discharge, an
employee must show that he was: (1) discharged; (2) in
retaliation for his activities; and (3) that the discharge
violated a clear mandate of public policy.  Hartlein v. Illinois
Power Co., 151 Ill. 2d 142, 160, 601 N.E.2d 720 (1992).  The
policy identified in the complaint, however, must either "strike
at the heart of a citizen's social rights, duties, and
responsibilities before the tort will be allowed" (Palmateer, 85
Ill. 2d at 130) or involve the protection of each citizen's
health and safety.  Wheeler v. Caterpillar Tractor Co., 108 Ill. 2d 502, 511, 485 N.E.2d 372 (1985).     Public policy also favors
the exposure of criminal activity, and the cooperation of
citizens possessing knowledge thereof is essential to effective
implementation of that policy.  Palmateer, 85 Ill. 2d  at 132. For
example, in Russ v. Pension Consultants Co., 182 Ill. App. 3d
769, 538 N.E.2d 693 (1989), the plaintiff filed a retaliatory
discharge claim because his employer fired him for refusing to
create and backdate pension plans, which would violate federal
tax laws.  The court held Illinois has an interest in the
enforcement of the federal tax laws because falsification of
federal tax records could also mean the falsification of state
tax records, since the legislature has adopted the federal
taxable income as the starting point for calculating the state
corporate income tax.  Therefore, the underpayment of federal
income taxes could result in the underpayment of state taxes. 
Russ, 182 Ill. App. 3d at 777.
     Plaintiff argues that his termination violated public policy
because he refused to violate a covenant not to compete and
assist defendants in their conspiracy to restrain trade and
engage in unfair competition.  Plaintiff relies on Johnson v.
World Color Press, Inc., 147 Ill. App. 3d 746, 498 N.E.2d 575
(1986), to support his argument.  In Johnson, the plaintiff
alleged he was discharged in retaliation for his opposition to
certain accounting practices of his employer that he claimed
constituted violations of federal security laws.  The court found
that improper entries in the company's financial statements could
mislead the public, who are potential investors of the employer's
parent company.  Therefore, the court held that public policy
favors full disclosure, truthfulness and accuracy in the
financial reports made by businesses to the government and to the
public, and that employees who voice objections should be
protected from being discharged as a result of such objections. 
Johnson, 147 Ill. App. 3d at 754.
     We note that not all criminal activity violates a public
policy sufficient to warrant protection from a retaliatory
discharge claim.  Leweling v. Schnadig Corp., 276 Ill. App. 3d
890, 897, 657 N.E.2d 1107 (1995). The policy must give rise to a
social duty or responsibility or promote the health and welfare
of the citizenry. Leweling, 276 Ill. App. 3d at 897. The public
policies in Russ and Johnson protect citizens from fraudulent and
misleading information that could ultimately affect their
welfare.  We do not believe the public policies advanced in
covenants not to compete and in preventing unfair competition, as
alleged by plaintiff, affect the overall welfare of citizens. 
They only affect the contractual relationship between an employer
and employee.  Therefore, we hold that plaintiff's allegations do
not advance a public policy sufficient to warrant protection from
a retaliatory discharge claim.  
                              V
     Plaintiff next contends that the trial court improperly
dismissed his claim for breach of fiduciary duty.  Defendants
argue that, as officers of the corporation, they had a fiduciary
duty to the corporation to act in the best interests of the
corporation.  Defendants further argue that, as officers, they do
not owe a fiduciary duty to other directors, officers and
shareholders.   
     It is undisputed that the individuals who control
corporations owe a fiduciary duty to their corporations and their
shareholders.  Graham v. Mimms, 111 Ill. App. 3d 751, 761, 444 N.E.2d 547 (1982).  Corporate entities, however, do not owe
fiduciary duties to minor shareholders.  Wencordic Enterprises,
Inc. v. Berenson, 158 Ill. App. 3d 913, 918, 511 N.E.2d 907
(1987). 
     Plaintiff asserts that, as a close corporation, defendants
and plaintiffs owed a fiduciary duty to each other. Plaintiff
relies on Hagshenas v. Gaylord, 199 Ill. App. 3d 60, 557 N.E.2d 316 (1990), to support his assertion.  In Hagshenas, the court
held that, although the corporation, Imperial, was not organized
or registered as a close corporation under the Close Corporation
Act (Ill. Rev. Stat. 1981, ch. 32, par. 1201 et seq.) for all
practical purposes it acted as a close corporation.   The court
noted that plaintiff and defendant each owned 50% of the stock,
they were the directors and officers of the company, and they
oversaw the day-to-day operations.  The court concluded that the
counterdefendant, as a 50% shareholder in the closely held
corporation, owed a fiduciary duty similar to a partner to
Imperial and its shareholders.  Hagshenas, 199 Ill. App. 3d at
71.
     We believe that Hagshenas is instructive. Although Glen
Regal was not organized or registered as a close corporation
under the Close Corporation Act, for all practical purposes it
acted as a close corporation.  In Galler v. Galler, 32 Ill. 2d 16, 203 N.E.2d 577 (1964), the supreme court defined a close
corporation as "one in which the stock is held in a few hands, or
in a few families, and wherein it is not at all, or only rarely,
dealt in by buying or selling." Galler, 32 Ill. 2d  at 27. We
believe that Glen Regal meets this test.  The shareholders in the
instant case are directors and officers and participate in the
day-to-day operations.  Although Glen Regal was labeled as a
corporation, it clearly was an enterprise closely resembling a
partnership.  A partner owes a duty to exercise the highest
degree of honesty and good faith in the dealings and in handling
of business assets, thereby prohibiting enhancement of personal
interests at the expense of the interests of the enterprise. 
Jaffe Commercial Finance Co. v. Harris, 119 Ill. App. 3d 136,
143, 456 N.E.2d 224 (1983).  
     However, our holding that defendants owed the plaintiff a
fiduciary duty in the instant case is not dispositive of this
issue.  We must also determine whether the defendants breached
the duty they owed to plaintiff. Plaintiff argues that defendants
breached their duty to him by defaming him.  However, we have
already held that the statements alleged in the complaint did not
state a cause of action for defamation.  Plaintiff also argues
that defendants breached their duty to him by terminating his
employment contract.  However, plaintiff's employment was
terminable at will.  Therefore, his termination could not have
risen from a breach of any duty owed to him regarding his
employment.
                              VI
     Plaintiff next contends that he stated a cause of action for
breach of contract.  Plaintiff argues that defendants breached
their contract with him by not giving him 65% of the stock as
promised and by subsequently attempting to reduce his stock
ownership to 25%.  Defendants argue that plaintiff's claim is
barred by section 8-319 of the UCC.  
     Generally, an oral contract to purchase securities is
unenforceable under section 8-319. See 810 ILCS 5/8-319 (West
1992).  Plaintiff argues, nevertheless, that his claim is viable
by virtue of the doctrine of part performance.  It is true that
section 8-319 does not bar the enforcement of an oral contract
where there has been part performance by one party in reliance on
the promise of the other.  Johnson v. George J. Ball, Inc., 248
Ill. App. 3d 859, 866, 617 N.E.2d 1355 (1993).  Part performance
is, however, an equitable doctrine.  Phillips v. Britton, 162
Ill. App. 3d 774, 781, 516 N.E.2d 692 (1987).  Thus, part
performance will avoid application of section 8-319 only where a
party is seeking the equitable remedy of specific enforcement. 
Phillips, 162 Ill. App. 3d at 782; Cohn v. Checker Motors Corp.,
233 Ill. App. 3d 839, 844-45, 599 N.E.2d 11 (1992).  Therefore,
the doctrine of part performance may not be invoked to sustain an
ordinary action at law for damages for breach of contract. 
Accordingly, the doctrine of part performance does not prevent
the application of section 8-319 in the instant case.
                              VII
     Next, plaintiff argues that he sufficiently pled a cause of
action for fraud based on misrepresentations made by defendants. 
Defendants argue that plaintiff fails to plead facts sufficiently
specific to state a cause of action against any of the
defendants. 
     To state a cause of action for fraudulent misrepresentation,
a plaintiff must assert:  (1) that the defendant made a
statement; (2) of a material nature; (3) which was untrue; (4)
known by the person making it to be untrue, or made in culpable
ignorance of its truth or falsity; (5) relied on by the victim to
his detriment; (6) made for the purpose of inducing reliance; and
(7) the victim's reliance led to his injury.  General Electric
Credit Auto Lease, Inc v. Jankuski, 177 Ill. App. 3d 380, 383,
532 N.E.2d 361 (1988).  
     "Promissory fraud" is a form of fraud based upon a false
representation of intent concerning future conduct, e.g., a
promise to perform a contract when there is actually no intent to
perform the contract. General Electric Credit Auto Lease, 177
Ill. App. 3d at 384.  As a general rule, promissory fraud, based
on future acts, is not actionable in Illinois unless the promise
is a part of a "scheme" to defraud.  General Electric Credit Auto
Lease, 177 Ill. App. 3d at 384.  
     Plaintiff argues that the fraudulent statements alleged in
the complaint that he "would be President of Glen Regal and own
65% of the stock" and he "would be paid a salary of $5,000 per
month" were made pursuant to an alleged scheme to drain him of
his existing goodwill, business, staff and equipment, then
replace him with Randall and squeeze him out of the company. 
Plaintiff relies on Stamatakis Industries, Inc. v. King, 165 Ill.
App. 3d 879, 520 N.E.2d 770 (1987), to support his argument. In
Stamatakis, the court held that the defendant's promises to make
good on a contract for the purchase of equipment when he knew the
company could not pay, as well as his promise to enter into an
employment contract for five years with a covenant not to compete
when he intended not to perform, properly alleged a scheme
against plaintiff, and that the actual existence of a scheme was
a question of fact for the trier of fact.  Stamatakis, 165 Ill.
App. 3d at 881-82.       
     Plaintiff also relies on Carter v. Mueller, 120 Ill. App. 3d
314, 457 N.E.2d 1335 (1983).  In Carter, the court held that a
landlord's assurance to a tenant that everything would be taken
care of prior to the tenant taking possession, in addition to a
later statement that everything was taken care of, constituted a
scheme.  Carter, 120 Ill. App. 3d at 319-20.  
     We believe that Stamatakis and Carter are distinguishable
from the case sub judice.  We do not believe that plaintiff has
sufficiently pled facts to show the existence of a scheme. 
Specifically, plaintiff fails to allege which defendant made the
statements.  Also, there are no facts alleged that, at the time
of the alleged representations, there was an intent not to
perform them.  According to the complaint, plaintiff did, in
fact, become president of the corporation until defendants voted
him out in March 1994.  Plaintiff also alleges that his stock was
"reduced" to 25% at the March 1994 board meeting.  Therefore, it
is not clear from the complaint whether plaintiff actually
received 65% of the stock from the inception of the corporation. 
Also, the fact that he only received $2,000 or $3,000 per month,
instead of $5,000, is not evidence of a scheme.  Furthermore, we
do not believe that plaintiff states a cause of action against
Modder and Randall because the claim is based upon events that
transpired prior to their association with Glen Regal
Landscaping.
                                   VIII 
     Plaintiff next contends that the trial court improperly
dismissed his claim that defendants violated the Consumer Fraud
and Deceptive Business Practices Act.  815 ILCS 505/1 et seq.
(West 1992).  Defendants argue, and the trial court agreed, that
the Consumer Fraud Act does not apply because plaintiff has
failed to allege facts that identify him as a "consumer" within
the meaning of the Consumer Fraud Act.
     Section 2 of the Consumer Fraud Act provides, in pertinent
part:
          "Unfair methods of competition and unfair or deceptive
acts or        practices, including but not limited to the use or
employment of any        deception, fraud, false pretense, false
promise, misrepresentation or           the concealment,
suppression or omission of any material fact, with          
intent that others rely upon the concealment, suppression or
omission of    such material fact, *** are hereby declared
unlawful whether any person   has in fact been misled, deceived
or damaged thereby."  815 ILCS 505/2    (West 1992).
The Consumer Act further states:
          "(e) The term 'consumer' means any person who purchases
or             contracts for the purchase of merchandise not for
resale in the ordinary   course of his trade or business but for
his use or that of a member of          his household."  815 ILCS
505/1(e)(West 1992).
Plaintiff is correct that the protections of the Act are not
limited only to consumers.  Lake County Grading Co. of
Libertyville, Inc. v. Advance Mechanical Contractors, Inc., 275
Ill. App. 3d 452, 457, 654 N.E.2d 1109 (1995); Downers Grove
Volkswagen, Inc. v. Wigglesworth Imports, Inc., 190 Ill. App. 3d
524, 534, 546 N.E.2d 33 (1989). The Act is to be liberally
construed.  Downers Grove Volkswagen, 190 Ill. App. 3d at 534. 
However, despite the broad language of section 2, courts have
recognized that it was not intended to cover all commercial
transactions regardless of the relationship between the parties
involved.  Lake County Grading Co., 275 Ill. App. 3d at 457.  To
determine whether the Act applies, we must examine the facts in
light of the development of the relevant case law.
     A seminal case on this issue is Century Universal
Enterprises, Inc. v. Triana Development Corp., 158 Ill. App. 3d
182, 510 N.E.2d 1260 (1987).  In Century Universal, the court
held that a dispute between a financier and developer over a
contract was not covered under the Consumer Fraud Act because the
businessmen were not consumers of each other's goods or services. 
However, in Downers Grove, the court recognized that the Act
protects businessmen as well as consumers and that Century
Universal's narrow reading of the Act may not be appropriate in
all cases. In Downers Grove, the plaintiff and defendant were
automobile dealers whose businesses included the servicing of
Saab vehicles.  Plaintiff sued defendant for trade disparagement
due to defendant distributing 15,000 brochures containing
allegedly false statements regarding the plaintiff's business
practices.  The court recognized that there are some cases where
the Act applies despite the fact that the parties are not
consumers of each other's goods or services.  The court held
that, where a dispute involves two businesses that are not
consumers, the proper test is "whether the alleged conduct
involves trade practices addressed to the market generally or
otherwise implicates consumer protection concerns."  Downers
Grove, 190 Ill. App. 3d at 534.  Based on the test, the court
held that the plaintiff's consumer protection concerns were
implicated.  Downers Grove, 190 Ill. App. 3d at 534.
     Plaintiff alleged in his second amended complaint that he
was a consumer in the sale of the stock he purchased in the
corporation.  We believe that his allegation that he did not
receive 65% of the stock or that defendants reduced his stock
addresses breach of contract concerns.  However, plaintiff does
not plead how the particular breach implicates consumer
protection concerns. See Lake County Grading, 275 Ill. App. 3d at
459 (where the court held that in cases where the plaintiff
attempts to allege a violation of the Act in a case that appears
on its face to involve only a breach of contract, the relevant
inquiry is whether the alleged conduct implicates consumer
protection concerns). 
     Plaintiff also argues that the statements that defendants
made that plaintiff is lazy, incompetent, dishonest, unable to
run his business, and unable to perform landscaping services
constituted trade defamation and disparagement.  Section 2(8)
states:
          "A person engages in a deceptive trade practice when,
in the    course of his business, vocation or occupation, he:
                                   * * *                    
          (8) disparages the goods, services or business of
another by false    or misleading representation of fact[.]"  815
ILCS 510/2(8)(West 1992). 
Because we have already held that defendants' alleged statements
did not constitute defamation, we do not believe that plaintiff
has pled facts sufficient to state a cause of action for trade
disparagement. 
     Nonpublishable material under Supreme Court Rule 23 omitted.
     For the reasons stated herein, the judgment of the circuit
court of Cook County dismissing plaintiff's second amended
complaint is affirmed.
     Affirmed.