Barille v. Sears, Roebuck & Co.

                                                  FIFTH DIVISION
                                                  June 6, 1997    
                                         





No. 1-96-1414

                                         )      
PATRICIA J. BARILLE,                     )  Appeal from the
                                         )  Circuit Court of
         Plaintiff-Appellant,            )  Cook County.
                                         )  
              v.                         )   
                                         )
SEARS ROEBUCK AND COMPANY, ALLSTATE      )
LIFE INSURANCE COMPANY, ALLSTATE         )
INDEMNITY COMPANY, ALLSTATE PROPERTY     )
AND CASUALTY INSURANCE COMPANY, ALLSTATE )
INSURANCE COMPANY, GLENBROOK LIFE &      ) 
ANNUITY COMPANY, GLENBROOK LIFE          ) 
INSURANCE COMPANY, NORTHBROOK INDEMNITY  ) 
COMPANY, NORTHBROOK LIFE INSURANCE       )
COMPANY, NORTHBROOK NATIONAL INSURANCE   )
COMPANY, NORTHBROOK PROPERTY & CASUALTY  )
INSURANCE COMPANY, ALLSTATE LIFE         )
INSURANCE COMPANY OF NEW YORK, PMI       )
MORTGAGE INSURANCE COMPANY, PMI          )   The Honorable
INSURANCE COMPANY, SURETY LIFE INSURANCE )   Kenneth L. Gillis,
COMPANY, and LINCOLN BENEFIT LIFE        )   Judge Presiding.     
COMPANY,                                 )     
                                         )
              Defendants-Appellees.                               
       
     JUSTICE SOUTH delivered the opinion of the court:
     Plaintiff, Patricia J. Barille (Barille), filed an amended
complaint against defendants, Sears Roebuck & Co. and Allstate
Insurance Co., et al. (Allstate), alleging breach of contract,
common law fraud and violations of the Illinois Consumer Fraud
and Deceptive Business Practices Act (Consumer Fraud Act) (815
ILCS 505/1 et seq. (West 1994)).  The circuit court dismissed
Barille's amended complaint with prejudice pursuant to section 2-
615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West
1994)).  Barille filed a motion to vacate and reconsider, arguing
that her amended complaint adequately set forth the alleged
causes of action and that the court should allow her leave to
file a second amended complaint, which she attached to the
motion.  The circuit court denied Barille's motion and allowed
her second amended complaint to be part of the appellate record. 
Barille appeals the circuit court's orders dismissing her claim
and denying her leave to file her second amended complaint.
     On January 26, 1987, Barille signed an "R-1500" agent
employment agreement (the contract) with Allstate and became an
Allstate insurance agent.  As an Allstate agent, Barille was
provided Allstate's "Neighborhood Office Agent" (NOA) program
manuals and offered an opportunity to participate in the NOA
program.  Thereafter, Barille participated in the NOA program and
sold Allstate insurance policies through this program.  As an
NOA, Barille incurred financial losses and eventually terminated
her relationship with Allstate.    
     On November 14, 1994, Barille filed her original complaint
alleging common law fraud, breach of contract, violations of the
Consumer Fraud Act, tortious interference with prospective
business advantage, breach of covenant of good faith and fair
dealing, and emotional distress.  Allstate filed a motion to
dismiss Barille's original complaint under section 2-615 of the
Illinois Code of Civil Procedure (735 ILCS 5/2-615 (West 1994)). 
On June 15, 1995, following a hearing, the circuit court granted
Allstate's motion to dismiss as to all counts except count IV,
which the court noted Barille had withdrawn.  The original
complaint was dismissed without prejudice, and Barille was
granted leave to file an amended complaint.       
     On August 4, 1995, Barille filed her amended complaint
alleging common law fraud, breach of contract and violations of
the Consumer Fraud Act.  Allstate filed a motion to dismiss the
amended complaint under section 2-615 (735 ILCS 5/2-615 (West
1994)).  On November 27, 1995, following a hearing, the circuit
court granted Allstate's motion and dismissed Barille's amended
complaint with prejudice. 
     On December 27, 1995, Barille filed a post-judgment motion
to vacate and reconsider pursuant to section 2-1203 (735 ILCS
5/2-1203 (West 1994)), in which she requested that the circuit
court vacate its dismissal order and grant her leave to file a
second amended complaint.  The circuit court denied Barille's
motion on March 12, 1996.  Barille appeals. 
                                  OPINION
     Initially, we note that Allstate has moved to cite as
additional authority recently discovered case law in support of
its contentions on appeal.  Allstate's motion was taken with the
case, and we hereby grant its motion.  
     On review of the dismissal of an action under section 2-615,
the appellate court reviews the complaint de novo.  Barham v.
Knickrehm, 277 Ill. App. 3d 1034, 661 N.E.2d 1166 (1996).  The
standard of review on appeal is whether the complaint
sufficiently states a cause of action.  Saunders v. Michigan
Avenue National Bank, 278 Ill. App. 3d 307, 662 N.E.2d 602
(1996).  The merits of the claim are not considered.  Saunders,
278 Ill. App. 3d 307, 662 N.E.2d 602.  All well-pleaded facts are
accepted as true but not conclusions of law or factual
conclusions that are unsupported by allegations of specific
facts.  Lagen v. Balcor Co., 274 Ill. App. 3d 11, 653 N.E.2d 968
(1995).  The complaint's factual allegations are construed in the
light most favorable to the plaintiff, but factual deficiencies
may not be cured by liberal construction.  Lagen, 274 Ill. App.
3d 11, 653 N.E.2d 968.  If after disregarding any legal and
factual conclusions the complaint does not allege sufficient
facts to state a cause of action, the motion to dismiss should be
granted.  Lagen, 274 Ill. App. 3d 11, 653 N.E.2d 968.         
     Barille contends that she sufficiently pled her claim for
breach of contract as an employee in her first amended complaint
and as an independent contractor in her second amended complaint;
that her classification as an independent contractor imposed a
duty of good faith and fair dealing, which requires Allstate to
act reasonably and with proper motive when exercising its
discretion; and that Allstate abused its discretion by
unreasonably increasing her costs of doing business, thereby
causing her to go out of business and then retaining her book of
business that was developed.    
     In order to state a cause of action for breach of contract,
a plaintiff must establish:  (1) an offer and acceptance; (2)
consideration; (3) definite and certain terms of the contract;
(4) plaintiff's performance of all required contractual
conditions; (5) defendants' breach of the terms of the contract;
and (6) damage resulting from the breach.  Penzell v. Taylor, 219
Ill. App. 3d 680, 579 N.E.2d 131 (1991).  In the instant case,
whether classified as an employee or as an independent
contractor, Barille fails to state a cause of action for breach
of contract due to the plain and unambiguous terms of the
contract.
     In Illinois, there is a duty of good faith and fair dealing
included in every contract as a matter of law.  Saunders, 278
Ill. App. 3d 307, 662 N.E.2d 602.  The duty requires the party
vested with discretion under the contract to "exercise that
discretion reasonably and with proper motive, *** not ***
arbitrarily, capriciously, or in a manner inconsistent with the
reasonable expectations of the parties."  Dayan v. McDonald's
Corp., 125 Ill. App. 3d 972, 991, 466 N.E.2d 958 (1984).  The
doctrine is generally employed as a construction tool in
assessing the intent of the parties when a contract is ambiguous. 
Resolution Trust Corp. v. Holtzman, 248 Ill. App. 3d 105, 618 N.E.2d 418 (1993).  "'When the terms of a contract are clear and
unambiguous, they must be enforced as written, and no court can
rewrite a contract to provide a better bargain to suit one of the
parties.'"   Saunders, 278 Ill. App. 3d at 316, quoting
Resolution, 248 Ill. App 3d at 112, 618 N.E.2d  at 423. 
     In the present case, the actions complained of by Barille,
whether Barille is classified as an employee or as an independent
contractor, were exercised within the discretion granted Allstate
pursuant to the contract.  The terms of the contract clearly and
unambiguously notified Barille that Allstate reserved the right
to make any changes in the terms and conditions of her employment
as Allstate deemed necessary and appropriate in furtherance of
its business objectives subject to the terms and conditions of
the contract.  
     The contract also stated that the compensation rules and
amounts set forth in Barille's employment manual may be amended
from time to time and that, due to the inherent uncertainty of
business conditions, Allstate reserved the right to increase or
decrease any compensation amounts and change the compensation
rules at any time subject to state and federal regulations that
may then be applicable to Barille.  The contract did not lull
Barille into believing that Allstate might not exercise its
discretion as set forth therein.    
     Additionally, Barille does not allege that she did not
understand the explicit terms of the parties' contract.  Barille
was free not to enter the contract with Allstate and to become an
agent with any number of insurance agencies.  Thus, Barille's
execution of the contract negates any inference that Allstate's
actions were unreasonable and exercised without proper motive so
as to constitute a breach of contract.  "Parties are entitled to
enforce the terms of negotiated contracts to the letter without
being mulcted for lack of good faith.  [Citation.] Express
covenants abrogate the operation of implied covenants so courts
will not permit implied agreements to overrule or modify the
express contract of the parties."  Resolution, 248 Ill. App. 3d
at 113.  For the foregoing reasons, Barille fails to state a
cause of action for breach of contract, and the circuit court
properly dismissed her claim.
     Barille next contends that the circuit court erred in
dismissing her fraud claim for failure to state a cause of
action.  Barille's fraud claim alleges that Allstate implemented
a scheme or plan to increase its market share by increasing the
costs attributable to the agents participating in the NOA program
and then eliminating agents like her and retaining their
business; fraudulently induced Barille into becoming an NOA; that
an Allstate agent told Barille that her office would be
strategically located to maximize her exposure and minimize
competition from other agents; that her office would produce
enough business to cause Allstate to reimburse her for all of her
office expenses and that she would be provided with 200
unrepresented accounts as a starting base from which to develop
sufficient client contact.  Allstate responds that Barille has
not stated a fraud claim inasmuch as the merger clause of her
contract made it unreasonable for her to rely on purported
earlier oral misrepresentations and that all of Barille's
allegations are nonactionable as nondisclosure, predictions of
future events or puffing.     
     In order to state a cause of action for fraud, the plaintiff
must establish:  (1) a false statement of material fact; (2)
known or believed to be false by the party making it; (3) intent
to induce the other party to act; (4) action by the other party
in justifiable reliance on the truth of the statement; and (5)
damage to the other party resulting from such reliance.  Adler v.
William Blair & Co., 271 Ill. App. 3d 117, 648 N.E.2d 226 (1995). 
Statements regarding future events or circumstances are not a
basis for fraud.  Penzell, 219 Ill. App. 3d 680, 579 N.E.2d 131. 
However, there is an exception to this general rule.  Where the
misrepresentation is alleged to be the mechanism by which the
party making that representation intended to defraud, such
misrepresentation as to future conduct is actionable.  Steinberg
v. Chicago Medical School, 69 Ill. 2d 320, 334 (1977).  Barille
argues that she falls within this recognized exception.  
     A party pleading fraud must allege facts sufficient to
establish that its reliance on the alleged misrepresentations was
justified.  Adler, 271 Ill. App. 3d 117, 648 N.E.2d 226.  In
determining whether reliance was justifiable, all of the facts
that the plaintiff knew, as well as those facts the plaintiff
could have learned through the exercise of ordinary prudence, are
taken into account.  Central States Joint Board v. Continental
Assurance Co., 117 Ill. App. 3d 600, 453 N.E.2d 932 (1983).  "A
person may not enter into a transaction with his eyes closed to
available information and then charge that he has been deceived
by another."  Central States, 117 Ill. App. 3d at 606.
     In the present case, the element of justifiable reliance is
absent.  It is well settled under the doctrine of merger and the
parol evidence rule that a written agreement which is complete on
its face supersedes all prior agreements on the same subject
matter and bars the introduction of evidence concerning any prior
term or agreement on that subject matter.  Magnus v. Lutheran
General Health Care System, 235 Ill. App. 3d 173, 601 N.E.2d 907
(1992).  This particularly applies when the contract, as here,
contains an unambiguous merger or integration clause.  Magnus,
235 Ill. App. 3d 173, 601 N.E.2d 907.  
     Paragraph 14(C) of the contract provides:  
          "You and the Company acknowledge that each has
          read the Employment Agreement and the
          Addendum, understands it and agrees to be
          bound by its terms, that it is the complete
          and exclusive statement of the agreement
          between you and the Company, and that it
          supersedes all proposals, oral or written, and
          all other communication between you and the
          Company relating to the subject matter of this
          Agreement."   
     
The language of this merger clause is unambiguous.  Since the
contract was intended to be the complete and exclusive statement
of the agreement between the parties, is specific and is complete
on its face, it supersedes all proposals, oral or written, and
all other communication between the parties, as clearly stated
therein, which cannot be used to contradict the agreement.  In
light of this language, Barille fails to state a cause of action
for common law fraud, and the circuit court properly dismissed
her fraud claim.       
     Barille further contends that the circuit court erred in
dismissing her claim under the Consumer Fraud Act (815 ILCS 505/1
et seq. (West 1994)), as she has standing and adequately stated a
valid cause of action.  Specifically, Barille argues that there
is no Illinois case prohibiting a cause of action by an employee
against her employer for violations of the Act, and that the Act
applies not only to causes of action by individual consumers but
also to relationships among business people engaged in trade or
commerce.  Allstate responds that Barille's claim under the Act
is deficient because Barille is not a consumer but an
employee/agent; does not claim to be a "consumer" within the
definition of the statute; and has not alleged that consumer
protection concerns have been implicated.  
     To sustain a cause of action under the Consumer Fraud Act, a
plaintiff must establish: (1) a deceptive act or practice, (2)
intent on the defendants' part that plaintiff rely on the
deception, and (3) that the deception occurred in the course of
conduct involving trade or commerce.  Siegel v. Levy Organization
Development Co., 153 Ill. 2d 534, 542, 607 N.E.2d 194, 198
(1992).  The Consumer Fraud Act provides greater protection than
the common law action for fraud, and a plaintiff suing under the
Act need not establish the element of actual reliance.  Adler,
271 Ill. App. 3d 117, 648 N.E.2d 226.
     The Consumer Fraud Act protects consumers who purchase
merchandise or home improvement services for their own use.  In
re Estate of Szorek, 194 Ill. App. 3d 750, 551 N.E.2d 697 (1990). 
Barille correctly notes, however, that the Act is applicable not
only to causes of action by individual consumers, but also to
relationships among business persons engaged in trade or
commerce.  People ex rel. Scott v. Cardet International, Inc., 24
Ill. App. 3d 740, 321 N.E.2d 386 (1974); Sullivan's Wholesale
Drug Co. v. Faryl's Pharmacy, Inc., 214 Ill. App. 3d 1073, 573 N.E.2d 1370 (1991).  Nevertheless, this liberal interpretation
and application of the Act were not intended to cover all
commercial transactions regardless of the relationship between
the parties involved.  Bankier v. First Federal Savings & Loan
Ass'n, 225 Ill. App. 3d 864, 588 N.E.2d 391 (1992).    
     Although the legislature amended the Act to provide
specifically that "[p]roof of a public injury, a pattern, or an
effect on consumers generally shall not be required" to recover
damages under the Act (Pub. Act 86-801, eff. January 1, 1990; 815
ILCS 505/10a (West 1994)), post-amendment case law has continued
to adhere to the general rule that the Act does not apply to
every commercial transaction regardless of the relationship
between the parties.  Lake County Grading Co. of Libertyville,
Inc. v. Advance Mechanical Contractors, Inc., 275 Ill. App. 3d
452, 654 N.E.2d 1109 (1995).  Thus, "when a dispute under the Act
involves two businesses that are not consumers of each others
products, the relevant inquiry remains whether the alleged
conduct involves trade practices addressed to the market
generally or otherwise implicates consumer protection concerns." 
Empire Home Services, Inc. v. Carpet America, Inc., 274 Ill. App.
3d 666, 653 N.E.2d 852 (1995); Lake County Grading, 275 Ill. App.
3d 452, 654 N.E.2d 1109. 
     In the present case, Barille has not alleged that she is a
consumer.  Rather, Barille was a business person engaged in 
marketing and selling insurance policies on behalf of Allstate. 
Nor has Barille alleged that Allstate's actions have affected
competition, caused confusion to customers, influenced the market
generally or otherwise implicated consumer protection concerns.   
Therefore, Barille fails to state a cause of action under the
Consumer Fraud Act (815 ILCS 505/1 et seq. (West 1994)).  
     Finally, Barille contends that the circuit court abused its
discretion by denying her motion to vacate and reconsider and 
her motion to file a second amended complaint.  The purpose of a
motion to vacate and reconsider is to allow the circuit court to
review its decisions.  Droen v. Wechsler, 271 Ill. App. 332, 648 N.E.2d 981 (1995).  In Illinois, courts are encouraged to freely
and liberally allow the amendment of pleadings.  Lee v. Chicago
Transit Authority, 152 Ill. 2d 432, 605 N.E.2d 493 (1992).
Notwithstanding this liberal policy, there is no absolute right
to amend a pleading.  Butler v. Kent, 275 Ill. App. 3d 217, 655 N.E.2d 1120 (1995).  
     The circuit court has broad discretion in ruling upon
motions to amend pleadings, and its ruling will not be disturbed
absent an abuse of discretion.  Butler, 275 Ill. App. 3d 217, 655 N.E.2d 1120.  To determine whether the circuit court abused its
discretion, four factors are considered: (1) whether the proposed
amendment is timely; (2) whether previous opportunities to amend
the pleading could be identified; (3) whether other parties would
sustain prejudice or surprise by virtue of the proposed
amendment; and (4) whether the proposed amendment would cure the
defective pleading.  Butler, 275 Ill. App. 3d 217, 655 N.E.2d 1120.
     In applying these factors to the instant case, it cannot be
held that the circuit court abused its discretion in denying
Barille's motion to vacate and reconsider and her motion to file
a second amended complaint.  Following a hearing on Barille's
motion to vacate and reconsider, in which the circuit court
considered Barille's second amended complaint, Barille's motions
were denied based upon the clear and unambiguous terms of the
contract.  
     Moreover, because the contract's merger clause extinguished
any justifiable reliance by Barille on any prior or
contemporaneous representations by Allstate, Barille's newly
added allegation that Allstate told her she would receive 200
unrepresented accounts does not save her complaint.  The general
rule is that the breach of a promise to perform a future act is
not actionable as fraud.  Bank of Lincolnwood v. Comdisco, Inc.,
111 Ill. App. 3d 822, 444 N.E.2d 657 (1982).  
     The exception to this general rule is "where the false
promise or representation of future conduct is alleged to be the
scheme employed to accomplish the fraud."  Steinberg, 69 Ill. 2d 
at 334.  Here, Barille does not allege that Allstate's
representation concerning the 200 unrepresented accounts was the
scheme employed to accomplish the fraud.  Rather, Barille alleges
that the scheme employed by Allstate was to eliminate the agent
force, thereby permitting Allstate to retain the book of business
and market share developed by the R-1500 agents.
     Furthermore, the undisputed fact of record is that Barille
received the NOA manual at the time she was offered the
opportunity to participate in the NOA program.  The NOA manual
states that, "If you are a Direct Hire you may be assigned, where
available, auto and property unrepresented accounts to service."
(Emphasis added.)  This language clearly does not rise to the
level of a guarantee that Barille will in fact receive 200
unrepresented accounts.  In contrast, the NOA manual received by
Barille informed her of the mere possibility that she "may be
assigned, where available, auto and property unrepresented
accounts to service."  Hence, the NOA manual also defeats
Barille's claim of misrepresentation regarding the 200
unrepresented accounts.  
     For the forgoing reasons, the proposed second amended
complaint did not cure Barille's failure to state a cause of
action against Allstate for breach of contract, common law fraud
and violations of the Consumer Fraud Act (815 ILCS 505/1 et seq.
(West 1994)).  
     In summary, the parties' contract clearly and unambiguously
provided that Allstate reserved the right to amend Barille's
compensation and determine the premiums, fees, and charges for
insurance or other business practices.  Accordingly, the order of
the circuit court dismissing Barille's amended complaint, denying
Barille's motion to vacate and reconsider, and denying Barille's
motion to file a second amended complaint is affirmed.
     Affirmed.
     HARTMAN, P.J., and HOURIHANE, J., concur.