not succeeding in pleading all of the requisite elements of fraud--specifically, that there has been no allegation of a false statement of material fact, or that the party making the statement knew or believed it to be false. See generally Board of Educ. v. A, C & S, Inc., 131 Ill. 2d 428, 452, 546 N.E.2d 580, 591, 137 Ill. Dec. 635 (1989) (setting out elements of fraud). In fact (and beyond the discussions of Colonial Bank & Trust and Heights Bank, supra), DeNicholas told Bruno that MCC had $ 3 million in collectible receivables; apparently, DeNicholas did not know the exact total, and what he did know about was worth approximately $ 500,000. DeNicholas Affidavit at 2.
Cosmopolitan also maintains that Bruno's fraudulent inducement defense is barred by the parol evidence rule, or merger doctrine. That is, that a complete, valid, written contract merges and supersedes all prior and contemporaneous negotiations and agreements dealing with the same subject matter. E.g., Courtois v. Millard, 174 Ill. App. 3d 716, 720, 529 N.E.2d 77, 79, 124 Ill. Dec. 360 (5th Dist. 1988). Be that as it may, "the parol evidence rule does not preclude a party from presenting evidence that he was fraudulently induced into executing an agreement, even though the false promise involved is flatly inconsistent with the express terms of the writing." Dellcar & Co. v. Hicks, 685 F. Supp. 679, 684 (N.D. Ill. 1988) (construing Illinois law and Shanahan v. Schindler, 63 Ill. App. 3d 82, 379 N.E.2d 1307, 20 Ill. Dec. 239 (1st Dist. 1978)); see also Wilsmann v. Stearns, 664 F. Supp. 386, 389 (N.D. Ill. 1987) ("A party may introduce extrinsic or parol evidence to prove fraud in the inducement of the contract.") (citing Shanahan); Farm Credit Bank of St. Louis v. Isringhausen, 210 Ill. App. 3d 724, 728, 569 N.E.2d 235, 237-38, 155 Ill. Dec. 235 (4th Dist. 1991) ("parol evidence rule . . . does not apply to preclude an allegation of fraud").
In conjunction with its parol evidence theory, Cosmopolitan suggests that the general Illinois rule pertaining to future promises is applicable here. That is, to establish fraud, the pleader must prove the misrepresentation was of "an existing or past fact; a promise to do something in the future is insufficient to establish fraud." See Sorkin v. Blackman, Kallick & Co., 184 Ill. App. 3d 873, 880, 540 N.E.2d 999, 1004, 133 Ill. Dec. 133 (1st Dist. 1989). The bank cites to Commonwealth E. Mortgage Co. v. Williams, 163 Ill. App.3d 103, 516 N.E.2d 515, 114 Ill. Dec. 360 (1st Dist. 1987), as a case "on point" and one demonstrating the futility of Bruno's fraudulent inducement defense.
In Commonwealth, the state appellate court upheld the lower court's summary judgment in favor of the plaintiff mortgage company. Id. at 115, 516 N.E.2d at 522. Defendant maintained that he had been fraudulently induced to sign the mortgage by the company's promise of future additional financing. The case, however, does not stand for the proposition that a promise for future additional financing is never actionable, but that the particular promise relied on by defendant "is unenforceable because its terms are indefinite and uncertain." Id. at 110, 516 N.E.2d at 519. Further, the court noted that defendant had no evidence to substantiate his allegation that the promise of additional financing induced him to sign the mortgage. Id. at 114, 516 N.E.2d at 522.
The court's discussion of the exception to the future promises rule, however, suggests that a more definite promise (like the one between Cosmopolitan and Bruno), in conjunction with reliance and inducement, would be actionable. Where the "'false promise or representation of future conduct is alleged to be the scheme employed to accomplish the fraud,' a claim in fraud is actionable." Id. at 113, 516 N.E.2d at 521 (quoting Steinberg v. Chicago Medical School, 69 Ill.2d 320, 334, 371 N.E.2d 634, 641, 13 Ill. Dec. 699 (1977)). The court noted that
Ordinarily, a scheme to defraud occurs when a representation is made with intent to induce a third party to rely on it and the third party relies on it to his detriment. [Citation.] Additionally, to support an action in fraud, the statement (representation) must be certain and definite. [Citation.] To fall within the exception, a party must allege sufficient facts from which a scheme can be inferred. [Citation.]
Id. at 113-14, 516 N.E.2d at 522. Bruno's allegations in this vein are sufficient as they pertain to his Rule 276 motion.
Cosmopolitan's final two arguments need not detain us long. It argues that the Illinois statute of frauds provisions, Ill. Ann. Stat. ch. 59, paras. 1-18 (Smith-Hurd 1989), bar Bruno's fraudulent inducement defense, since "the collection of receivables would not be completed until the completion of certain construction jobs," and completion of those jobs would take more than one year. The proper test, however, is whether a contract or agreement by its terms "is capable of full performance within a year, not whether such occurrence is likely." Martin v. Federal Life Ins. Co., 109 Ill. App. 3d 596, 604, 440 N.E.2d 998, 1004, 65 Ill. Dec. 143 (1st Dist. 1982). Here, full performance was possible within one year.
It also contends that the Illinois Credit Agreements Act, Ill. Ann. Stat. ch. 17, paras. 7100-7103 (Smith-Hurd 1991 Supp.), bars the fraudulent inducement defense. We are unpersuaded by the bank's cursory argument--"the oral agreement alleged by Bruno . . . does not satisfy the statute." The one opinion we have uncovered involving these particular paragraphs of state law does not address the issue before us, see Commercial Bank of Korea, Ltd. v. Charone, Inc., No. 90 C 260 (N.D. Ill. Aug. 3, 1990) (1990 U.S. Dist. LEXIS 10175), and it is unclear to us that Bruno's allegations of fraudulent inducement are covered under a law dealing with credit agreements generally.
Because Bruno has set forth a prima facie defense of fraudulent inducement, we need not examine his other proffered defenses. Fraudulent inducement is sufficient to enable us to grant his motion, vacate the confession judgment entered against him by the state court, and to permit him to file his verified answer to Cosmopolitan's complaint.
II. Cosmopolitan's Motion
We turn now to Cosmopolitan's motion to strike portions of Bruno's reply brief. At issue are certain exhibits Bruno appended to the brief, namely a complaint from another case, a magazine article, and a newspaper story. In the context of a motion under Rule 276, Bruno's obligation is to set forth a prima facie defense. We have ruled on that motion without discussing the exhibits in question because it was not necessary to consider them; Bruno has handily met his burden without them. That being said, we deny Cosmopolitan's motion as moot. It is so ordered.
MARVIN E. ASPEN United States District Judge