Appeal from the Circuit Court of Kane County; the Hon. James
F. Quetsch, Judge, presiding.
JUSTICE STROUSE DELIVERED THE OPINION OF THE COURT:
On September 7, 1982, James Popp and Jim Popp Builders, Inc., filed a complaint against Royce Dyslin and the Aurora National Bank (bank). Following a hearing, the trial court granted the bank's motion to dismiss and allowed plaintiffs to amend their complaint. Thereafter, counts II through V of the plaintiffs' seven-count amended complaint were dismissed by the trial court. This terminated the litigation against the bank. On appeal James Popp (plaintiff) contests the order dismissing the action against the bank. Jim Popp Builders, Inc., which filed for bankruptcy, and Royce Dyslin, whose whereabouts are unknown, are not parties to this appeal.
The complaint alleged the following relevant facts. Royce Dyslin approached plaintiff and expressed an interest in leasing space in a shopping center in order to operate a Mexican restaurant. Plaintiff agreed to make improvements to the leased premises and to enter into a lease with Dyslin provided that Dyslin was able to procure a federally insured Small Business Administration (SBA) loan from the bank.
As part of its participation in the SBA loan program, the bank was obligated to investigate the financial affairs of Dyslin. The bank was prohibited from extending an SBA loan unless it determined that there was a reasonable assurance that the loan would be repaid. This determination was based on an investigation of Dyslin's past earnings record, future prospects, and management capability. In addition, Dyslin was required by law to contribute enough capital to assure a sufficient personal financial interest in its success. The bank was required to administer the SBA loan to insure that it was used for the intended purpose.
Plaintiff and Dyslin met with officials from the bank on September 11, 1980. During the meeting, plaintiff advised the bank that he was considering making improvements to the leased premises and then leasing the premises to Dyslin. Plaintiff also described his proposed improvements and the cost of those improvements. He told the bank that he would not make improvements or lease the premises to Dyslin unless the bank determined that Dyslin met the SBA loan qualifications and extended an SBA loan to Dyslin. Plaintiff alleged that he specifically advised the bank that he was relying on its investigation of Dyslin and its determination that Dyslin met the loan qualifications. In response, the bank represented to plaintiff that SBA loan funds were available and that Dyslin would be investigated to determine whether he met the legal requirements for an SBA loan.
Soon thereafter, Dyslin told plaintiff that the bank had reviewed and approved his SBA loan application for the purpose of constructing improvements on the premises. The bank orally confirmed Dyslin's representations and advised plaintiff that sufficient SBA loan funds would be forthcoming to pay for the improvements.
Based on the bank's and Dyslin's representations, Jim Popp Builders entered into a written lease and a construction agreement with Dyslin. In essence, the agreements extended credit to Dyslin. During the time plaintiff expended monies or extended credit to Dyslin, he advised the bank of his expenses. Plaintiff also asked whether the SBA loan proceeds would provide sufficient funds to insure payment. The bank assured plaintiff that it had investigated Dyslin, Dyslin met the SBA loan requirements, and sufficient funds were available to cover plaintiff's expenditures. Plaintiff alleged that he relied on those statements in making and continuing to make improvements to the leased premises, and based on his conversations with the bank, the bank knew that plaintiff was relying on its representations and that they were untrue.
On April 9, 1981, plaintiff received written notice confirming that the bank and Dyslin had entered into an SBA loan agreement. Based on plaintiff's conversations with the bank, plaintiff alleged the bank knew that its April 9, 1981, confirmation would induce plaintiff to expend additional monies for improvements on the leased premises. The bank continued to assure plaintiff that there would be sufficient funds from the SBA loan proceeds to cover plaintiff's expenditures.
The complaint also alleged that the bank did not properly investigate Dyslin. Had it done so, the bank would have discovered that Dyslin had invested no money in the project; he had submitted false and forged financial documentation; he had a history of business failures; he had used business funds improperly and for his own personal benefit; and he did not own sufficient assets to repay the SBA loan. The project collapsed when Dyslin disappeared without paying plaintiff, and the bank refused to make payment on plaintiff's demand.
Plaintiff's amended complaint asserts seven counts. Counts I and VI are against Dyslin. Counts II through V are against the bank. Count II alleges that the bank intentionally misrepresented, among other things, that it had complied with Federal regulations in approving Dyslin's loan applications. Those misrepresentations induced plaintiff to make improvements to the leased premises and to extend credit to Dyslin. Count III alleges that the bank negligently misrepresented, among other things, that it had complied with the same Federal regulations. Count IV alleges that plaintiff was a third-party beneficiary of the SBA loan agreement pursuant to which the SBA loan proceeds were distributed. Count V alleges that the bank was negligent in its dealings with plaintiff. Count VII was voluntarily dismissed by plaintiff.
On December 5, 1984, the circuit court dismissed all four counts asserted by plaintiff against the bank. Despite plaintiff's request, the trial court refused to explain its decision and refused to make any findings of fact or to state its conclusions of law. Plaintiff's notice of appeal was timely filed.
• 1 Since the trial court's order was general, not specifying any grounds for its decision to dismiss despite plaintiff's request, this court must review the issues raised in the motions and raised on appeal. (Powell v. Village of Mt. Zion (1980), 88 Ill. App.3d 406, 407.) Placing in the record the reasons for the final order would benefit this court and the parties as well as contribute to judicial efficiency. 88 Ill. App.3d 406, 407.
• 2 It is generally recognized that a section 2-615 (Ill. Rev. Stat. 1983, ch. 110, par. 2-615) motion to dismiss attacks only the legal sufficiency of the complaint and should be decided only upon the allegations set forth therein. (Johnson v. Nationwide Business Forms, Inc. (1976), 41 Ill. App.3d 128, 131.) The motion should be granted if it is clear that plaintiffs can prove no set of facts under the pleadings which would entitle them to relief. Alper Services, Inc. v. Wilson (1980), 85 Ill. App.3d 908, 911.
In considering a motion to dismiss, the trial court must accept as true all facts well pleaded as well as reasonable inferences which can be drawn from those facts. (Sharps v. Stein (1980), 90 Ill. App.3d 435, 438.) Pleadings should be liberally construed with a view to doing substantial ...