No Cause Of Action? No Matter. First District Illinois Appellate Rules Argument Waived On Appeal

This case involved a dispute between a buyer and a seller of a 3-flat building. The buyer claimed the seller knew about and hid structural defects in the building. He sued for breach of contract and fraud. After a bench trial, the buyer received a favorable judgment on the contract claim, and seller got a favorable ruling on the fraud claim.

The seller argued that Count I of the buyer’s Second Amended Complaint should have been dismissed for failure to state a cause of action. That count asked for damages for seller’s breach of good faith and fair dealing. But that is not a recognized cause of action in Illinois.

However, the seller did not move to dismiss that part of the buyer’s complaint in the trial court. He relied on a summary judgment motion, which was denied, as laying the foundation for appeal.

The appellate court ruled that the summary judgment motion was an insufficient basis to save the argument for appeal. “In this case, the defendants did not move to dismiss the breach of contract claim asserted in Count I of the second amended complaint. Although the defendants attempted to challenge the sufficiency of Count I in their motion for summary judgment, this was procedurally improper … A summary judgment motion may not be used as a substitute for a section 2-615 motion asserting defects appearing on the face of the pleading … Objections to the sufficiency of the complaint must be made specifically under section 2-615.”

The seller then argued that an exception to the waiver rule — failure to allege a recognized cause of action — defeated the waiver. The First District Appellate Court rejected that argument. Although imperfectly asserted, the court stated there were enough allegations of traditional breach of contract to avoid the exception to the waiver rule.

In applying the waiver rule, Illinois courts have distinguished between a complaint that defectively or imperfectly alleges a good cause of action and a complaint that entirely fails to state a cause of action … Only the former is waived by the failure to object in the trial court … The exception to the waiver rule applies only when a complaint fails to state a recognized cause of action, and it does not apply when the complaint states a recognized cause of action, but contains an incomplete or otherwise insufficient statement of that cause of action …

Here, Count I of the second amended complaint sought recovery for breach of contract, which is a recognized cause of action in Illinois. The defendants have attempted to challenge the sufficiency of Count I by arguing that the underlying allegations on which the breach of contract claim was premised do not state a valid claim upon which relief could be granted. The alleged deficiencies cited by the defendants go to the adequacy of the factual allegations in Count I. Thus, the defendants’ argument essentially asserts that the breach of contract claim was defectively pled because the factual allegations in Count I were insufficient to state such a claim. The question of whether Count I adequately pled a breach of contract claim was an issue that should have been raised in a section 2-615 motion in the trial court. The exception to the waiver rule does not apply in this case, and, therefore, the defendants are precluded from challenging the sufficiency of Count I on appeal.

You can read the whole opinion, Fox v. Heimann, Nos. 1-06-0414, 1-06-0697 (7/10/07), by clicking here.