Byram v. Danner

2018 IL App (4th) 170058-U

NATHAN BYRAM, Individually; and LINWOOD 2000, INC., Plaintiffs-Appellants, v. MARY SUSAN DANNER; FRED C. DANNER, JR.;and DANNER 2000, INC., d/b/a REMAX 2000, Defendants-Appellees.

NO. 4-17-0058

APPELLATE COURT OF ILLINOIS FOURTH DISTRICT

April 13, 2018

NOTICE

This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).

Appeal from Circuit Court of Vermilion County

No. 14L44

Honorable Nancy S. Fahey, Judge Presiding.

JUSTICE HOLDER WHITE delivered the judgment of the court.

Presiding Justice Harris and Justice Turner concurred in the judgment.

ORDER

¶ 1 Held: The appellate court affirmed in part and reversed in part, concluding the trial court properly dismissed portions of plaintiffs' third-amended complaint pursuant to sections 2-615 and 2-619 of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619 (West 2016)) and erred by dismissing others.

¶ 2 This case involves a failed business transaction between plaintiff Nathan Byram (Byram) and defendant Mary Susan Danner. In July 2015, plaintiffs, Byram and Linwood 2000, Inc., filed a third-amended complaint against defendants, Mary Susan Danner (Danner), Fred C. Danner (Fred), and Danner 2000, Inc., d/b/a ReMax 2000, alleging 11 counts, including common-law fraud (counts I through III), tortious interference (counts IV and V), breach of contract (count VI through IX), and unjust enrichment (counts X and XI). In October 2015, defendants filed a motion to dismiss counts I through V, X, and XI. In September 2016, defendants filed a motion to dismiss counts VI through IX. The trial court granted the motions and dismissed counts I through XI with prejudice.

¶ 3 Plaintiffs appeal, arguing the trial court erred by dismissing the counts in the third-amended complaint based on sections 2-615 and 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615, 2-619 (West 2016)). Specifically, plaintiffs argue (1) counts I through III set forth facts that satisfied the elements for claims of common-law fraud; (2) counts IV and V set forth facts that satisfied the elements for claims of tortious interference with a prospective economic advantage; (3) counts VI through IX were properly pleaded and were not subject to defeat by any affirmative matter; and (4) counts X and XI were repleaded to preserve plaintiffs' right to appeal and set forth facts that satisfied the elements for claims of unjust enrichment. We affirm in part and reverse in part.

¶ 4 I. BACKGROUND

¶ 5 A. Original Contract

¶ 6 Sue and Fred Danner owned and operated Danner 2000, a real estate business. In August 2012, the parties entered into a written agreement for the "sale of assets including terms regarding managing broker." The agreement provided for the sale of some assets of Sue Danner and Danner 2000 ("sellers") to Byram ("buyer"). In part, the contract provided as follows:

"1. Assets to be Sold: Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, the following assets of Seller:

A. Seller's rights under her franchise agreement with Remax Realty, but only if Buyer exercises his option to assumeSeller's franchise agreement effective September 21, 2014, and only if the franchisor, Remax, accepts Buyer as a franchisee.

* * *

D. The name 'Remax', address and telephone number, i.e., good will, but only if Buyer exercises his option to assume Seller's franchise agreement effective September 21, 2014, and only if the franchisor, Remax, accepts Buyer as a franchisee.

* * *

I. An option to assume Seller's franchise, as provided in paragraph 11 herein.

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3. Manner of Payment of Purchase Price: The payment of the purchase price shall be (a) the sum of $15,000 on September 21, 2012; (b) the sum of $15,000, plus interest computed at an annual rate of 1% on the remaining balance, on March 21, 2013; (c) the sum of $20,000, plus interest computed at an annual rate of 1% on the remaining balance, on March 21, 2014.

6. Seller's Warranties: Seller represents, warrants[,] and agrees as follows:

A. That Danner 2000, Inc. is a corporation in the State of Illinois and is in good standing with the State of Illinois. The Seller has full authority to conduct its business and has the power to sell the assets provided for by the terms of this Agreement.

B. Seller has good title to all of the assets, rights[,] and interests to be sold, subject to no mortgage, pledge, lien charge[,] or encumbrance of any nature, except as herein provided otherwise.

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11. Buyer's Option to Assume Seller's Franchise: Between September 21, 2012[,] and September 21, 2014, Seller agrees not to offer Seller's franchise agreement to any other party, but instead, hereby grants Buyer an option to assume Seller's franchise agreement effective September 21, 2014."

¶ 7 Under the terms of the contract, Byram was to make payments in installments, with one due at the time the contract was signed, the second due in March 2013, and the third due in March 2014. Byram made the first payment but failed to make the second payment on March 21, 2013. Byram attempted to make the second payment over the summer of 2013, but Danner refused the payment. In December 2013, Danner rescinded the 2012 contract and, later that month, the parties entered into a recession and release agreement.

¶ 8 B. Rescission and Release Agreement

¶ 9 In December 2013, the parties signed a rescission and release agreement. The agreement acknowledged both parties had failed to fully perform the duties and obligations set forth in the original contract. The 2013 contract rescinded the original contract, included a mutual release of liability, and provided for an accounting as follows:

"RESCISSION. The Parties to the Original Contract, and to the Mutual Rescission and Release herein, hereby mutuallyagree to rescind the Original Contract. The Original Contract is hereby terminated and deemed null and void as of the Effective Date [(December 20, 2013)] and[,] with the exception of the issue of ACCOUNTING set forth below[,] neither party shall have any further rights or legal obligations thereunder.

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FREDDIE MAC/HOMESTEPS and FANNIE MAE. DANNER agrees to relinquish all rights to the REMAX Freddie Mac/HomeSteps and Fannie Mae accounts established by BYRAM. DANNER agrees to sign a letter to that effect and cooperate fully to affect the transfer of said account back to BYRAM. DANNER and REMAX agree to release all Freddie Mac/HomeSteps and Fannie Mae listings currently with REMAX to BYRAM and LYNWOOD [sic]. DANNER and REMAX agree to pay to BYRAM any and all gross commissions they receive from Freddie Mac and/or Fannie Mae closings occurring after the Effective Date of this Agreement.

* * *

COMMISSION ON REMAX TRANSACTIONS. DANNER agrees to pay BYRAM all of the gross commission on any transaction side procured by agents, including BYRAM, that choose to hang their licenses with BYRAM, for any REMAX transaction that closes. This paragraph shall apply to closingsoccurring within the two-week period prior to the Effective Date of this Agreement as well as to closings occurring after the Effective Date of this Agreement.

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MUTUAL RELEASE OF LIABILITY. Upon satisfactory completion of the Accounting required below ("ACCOUNTING"), the parties agree to execute Mutual Releases of Liability wherein each shall release, cancel, forgive[,] and forever discharge the other party and each of the party's predecessors, heirs, successors[,] and assigns, and all of the party's officers, directors[,] and employees from all actions, claims, demands, damages, obligations, liabilities, controversies[,] and executions of any kind or nature whatsoever, whether known or unknown or suspected or not, which have arisen, may have arisen, or may arise by reason of the initial Contract or rescission thereof.

NON-DISPARAGEMENT. BYRAM will not disparage DANNER or DANNER'S performance or otherwise take any action, which could reasonably be expected to adversely affect DANNER'S personal or professional reputation. Similarly, DANNER will not disparage BYRAM'S performance or otherwise take any action, which could reasonably be expected to adversely affect BYRAM'S personal or professional reputation.

ACCOUNTING. BYRAM and DANNER agree that in order to ensure each party is returned to their position prior to the execution of the [original] contract, subsequent to the signing of this contract, an accounting will be conducted on or before June 30, 2014. ***

Pursuant to the accounting, the parties may then enter into Mutual Rescission and Release Agreement Part B, which would set forth any monies that would need to be exchanged between the parties pursuant to the accounting, and would[] complete this agreement in its entirety. If the accounting is not conducted prior to June 30, 2014, and if neither party, prior to July 1, 2014, seeks judicial intervention to compel the accounting, both parties agree to waive the right to the accounting, and further agree that this agreement would be completed in its entirety, and that both parties would be precluded from pursuing a lawsuit with relation to the accounting. Upon the refusal of either party to cooperate in the accounting, the other party may apply to a court of competent jurisdiction to compel the accounting. The parties hereby consent to the court's jurisdiction in such event.

COVENANT NOT TO SUE. Upon satisfactory completion of the Accounting required above ("ACCOUNTING"), the Parties agree to execute a "Covenant Not to Sue" wherein each shall specifically waive any claim or right to assert any cause ofaction, alleged cause of action, claim or demand that has, through oversight or error, intentionally, unintentionally, or through a mutual mistake, been omitted from this agreement or the contemplated Mutual Rescission and Release Agreement Part B."

¶ 10 C. Plaintiffs' Third-Amended Complaint

¶ 11 On June 30, 2014, plaintiffs filed the original complaint in this cause. Following the...