Vantage Hospitality Grp., Inc. v. Q ILL Dev., LLC

2016 IL App (4th) 160271

71 N.E.3d 1

VANTAGE HOSPITALITY GROUP, INC., Plaintiff-Appellee,

v.Q ILL DEVELOPMENT, LLC, d/b/a Shepherd's Inn, Defendant-Appellant.

NO. 4-16-0271

Appellate Court of Illinois, Fourth District.

December 28, 2016

James A. Hansen and Joseph B. Ott (argued), of Schmiedeskamp, Robertson, Neu & Mitchell LLP, of Quincy, for appellant.

Andrew W. Staff (argued), of Staff & Staff, of Quincy, for appellee.

OPINION

JUSTICE STEIGMANN delivered the judgment of the court, with opinion.

¶ 1 In 2006, plaintiff, Vantage Hospitality Group, Inc. (Vantage), and defendant, Q Ill Development, LLC, d/b/a Shepherd's Inn (QIll), entered into a franchise agreement titled "America's Best Value Inn Brand Membership Application and Agreement" (Agreement), pursuant to which QIll could use the America's Best Value Inn brand to market and operate its hotel in Quincy, Illinois. The Agreement included an area of protection clause (Area of Protection), which limited Vantage's ability to execute new franchise agreements with other hotels in the Quincy area.

¶ 2 In February 2014, Vantage filed a complaint alleging that QIll had failed to pay its required monthly dues under the Agreement. In response, QIll filed an answer and a counterclaim, alleging that Vantage had breached the Agreement by licensing a hotel in Hannibal, Missouri, contrary to the Area of Protection provision.

¶ 3 In October 2015, Vantage filed a motion to dismiss QIll's counterclaim pursuant to section 2-619(a)(9) of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-619(a)(9) (West 2014)). Attached to that motion were (1) a document titled "Special Considerations Addendum" (Addendum) and (2) an affidavit of Jordan Langlois, the vice president of brand management for Vantage. In its motion to dismiss, Vantage argued that QIll had breached the Addendum beginning in December 2006 by failing to attend mandatory annual meetings, a fact asserted by Langlois in his affidavit. Vantage argued further that QIll's breach of the Addendum voided any Area of Protection clause, meaning that Vantage's licensing of the Hannibal hotel did not constitute a breach. The trial court granted Vantage's motion to dismiss.

¶ 4 In December 2015, QIll filed a motion to reconsider the trial court's decision to dismiss QIll's counterclaim. In that motion, QIll argued, in part, that Langlois's affidavit failed on multiple grounds to comply with Illinois Supreme Court Rule 191(a) (eff. Jan. 4, 2013). After a hearing on the motion to reconsider, the court struck part of Langlois's affidavit but adhered to its decision to dismiss QIll's counterclaim. QIll appeals. We affirm.

¶ 5 I. BACKGROUND

¶ 6 A. The Agreement

¶ 7 On February 2, 2006, Vantage and QIll executed the Agreement that allowed QIll to use the America's Best Value Inn brand to style and market its hotel in Quincy, Illinois. The Agreement also included an Area of Protection clause, which provided the following: "[Vantage] shall not allow its name or offer membership to any property within 40 miles of Quincy. Hannibal, MO, will be allowed only on applicants with a new construction or major renovation."

¶ 8 B. Vantage's Complaint

¶ 9 In February 2014, Vantage filed a complaint alleging that QIll had failed to pay its monthly dues as required by the Agreement. Vantage requested $34,550 in damages, plus court costs. Attached to the complaint was the Agreement, among other attachments.

¶ 10 C. QIll's Counterclaim

¶ 11 In May 2014, QIll filed an answer and a one-count counterclaim alleging breach of contract. Specifically, QIll alleged that Vantage violated the Agreement by licensing a hotel in Hannibal, Missouri, thereby violating the Area of Protection clause. QIll sought monetary damages and attorney fees as a remedy for Vantage's alleged breach of the Agreement. In June 2014, Vantage filed an answer to QIll's counterclaim.

¶ 12 D. Vantage's Section 2-619 Motion To Dismiss QIll's Counterclaim

¶ 13 In October 2015, Vantage filed, under section 2-619(a)(9) of the Code, a motion to dismiss QIll's counterclaim. In support of its motion, Vantage attached (1) the affidavit of Jordan Langlois, Vantage's Vice-President of Brand Management, and (2) the Addendum, which was executed by representatives of Vantage and QIll on February 23, 2006, three weeks after Vantage and QIll initially executed the Agreement. The Addendum stated that it was "incorporated into the [Agreement]." The Addendum included the following new Area of Protection provision:

"[Vantage] agrees not to establish, or, or [sic ] allow to exist, any other [Vantage] properties, within a 10 mile radius of Quincy, IL, will also include a right of first refusal for a radius of 40 miles, from Quincy IL. Hannibal, MO will be allowed only on properties under new construction or major renovations, for the period of the contract."

¶ 14 The Addendum also included a section titled "Conditions of Area of Protection." That section included the following relevant provision: QIll "shall send at least one property representative to the Annual conference every year for educational training, Brand initiatives, and overall ROI analysis" (Annual Meeting Provision). The Addendum concluded with the following language: "The terms and conditions of this Addendum shall be controlling over any conflicting terms and conditions contained in the [Agreement] to which this Addendum is attached and made a part thereof."

¶ 15 Vantage asserted that QIll violated the Annual Meeting Provision of the Addendum, as shown in Langlois's affidavit, which stated, in pertinent part, the following:

"QIll * * * failed to ever, during the entire term of the contract, to [sic ] send at least one of its representatives to the annual [Vantage] training conferences held in Las Vegas, Nevada[,] in December of 2006 through 2012 * * *."

¶ 16 Langlois's Affidavit concluded with the following two paragraphs:

"9. This affidavit is given in support of Plaintiff's Motion to Dismiss the Defendant's Counterclaim * * *.

10. The foregoing is true and correct to the best of my personal knowledge, and I could competently testify in open court if called upon to do so, as to the facts set forth herein."

¶ 17 Vantage argued in its motion to dismiss that QIll's breach of the Annual Meeting Provision of the Addendum voided the limitations placed on Vantage by the Area of Protection clause of the Addendum. Vantage concluded that QIll's breach constituted a "sufficient affirmative matter that defeats [QIll's] [c]ounterclaim, pursuant to § 2-619(a)(9) of the [Code]."

¶ 18 QIll filed a written response in November 2015 to Vantage's section 2-619 motion to dismiss. In that response, QIll argued that (1) the alleged "affirmative matter" argued by Vantage in its motion failed because it did nothing more than refute a well-pleaded fact in the counterclaim, (2) Vantage's claim regarding the Annual Meeting Provision in the Addendum failed because that provision constitutes a "condition subsequent," not a "condition precedent," and (3) QIll's counterclaim is to be taken as true for purposes of a section 2-619 motion.

¶ 19 E. The Trial Court's December 2, 2015, Order

¶ 20 The trial court conducted a hearing on Vantage's motion to dismiss and granted it in a written order on December 2, 2015. The order accepted Vantage's argument that QIll violated the Annual Meeting Provision of the Addendum, thereby voiding the Area of Protection clause. The court explained that the "evidence presented by Vantage taken in the light most favorable to QIll does support by a preponderance of the evidence Vantage's claim that an Area of Protection no longer existed at the time that Vantage entered into an agreement for [a] * * * Brand Hotel in Hannibal, Missouri." The court added that "[n]o opposing evidence which would raise any issue of genuine fact is presented by QIll."

¶ 21 F. QIll's Motion To Reconsider

¶ 22 Later in December 2015, QIll filed a motion to reconsider the trial court's decision to grant Vantage's motion to dismiss. In that motion, QIll made three arguments: (1) Langlois's affidavit failed to comply with Rule 191(a), (2) the trial court failed to take as true the allegations contained in QIll's counterclaim, and (3) the court improperly construed ambiguities between the original Agreement and the Addendum.

¶ 23 Specifically, in its first argument, QIll argued that Langlois's affidavit failed to comply with Rule 191(a) on the following four grounds: (1) the assertions in the affidavit were not based on Langlois's personal knowledge, (2) the affidavit did not have attached sworn or certified copies of all the papers upon which Langlois relied, (3) the affidavit did not contain facts admissible in evidence but instead contained conclusions, and (4) the affidavit did not show that Langlois could testify competently to the facts stated in the affidavit. On this last point, QIll questioned how Langlois could have personal knowledge that no representative of QIll attended the annual meetings.

¶ 24 As its second argument, QIll contended that (1) Vantage's motion to dismiss merely denied the allegations of QIll's counterclaim and (2) the trial court failed to take as true the allegations contained in QIll's counterclaim, which QIll claimed the court was required to do when ruling on a section 2-619 motion to dismiss.

¶ 25 Last, QIll argued that the trial court failed to properly resolve two "ambiguities" contained within the Agreement and the Addendum. Specifically, QIll argued that the Agreement and the Addendum both included an Area of Protection provision and that an ambiguity arose as to which Area of Protection provision ought to apply. In addition, QIll argued that the terms of the Addendum were "conditions subsequent," not "conditions precedent," and that Vantage was the first party to breach either the Agreement or the Addendum. As relief, QIll asked the trial court to strike Langlois's affidavit, vacate its order dismissing QIll's counterclaim, and enter a new order denying Vantage's ...