Appeal from the Circuit Court of Kane County. No. 94--L--1031. Honorable Pamela K. Jensen, Judge, Presiding.
Released for Publication July 18, 1997.
The Honorable Justice Colwell delivered the opinion of the court. Bowman and Doyle, JJ., concur.
The opinion of the court was delivered by: Colwell
The Honorable Justice COLWELL delivered the opinion of the court:
Plaintiff, Roger Reese, appeals from the trial court's order granting the defendants' motion for summary judgment pursuant to counts I, III, and IV of his complaint and the court's granting the defendants' section 2--619 motion (735 ILCS 5/2--619 (West 1994)) to dismiss pursuant to count V of his complaint. The trial court determined that a binding agreement did not exist between Reese and the defendants and that the alleged partial performance by the parties was insufficient to take any oral agreement out of the statute of frauds (740 ILCS 80/1 et seq. (West 1994)). Further, the trial court found that there was no factual basis to support Reese's allegations that a fiduciary duty existed between defendant Gerald Forsythe and himself. On appeal, Reese contends that the trial court's ruling is erroneous because a genuine issue of material fact exists regarding each of the counts in his complaint. We affirm.
The parties in this action were involved in an investment project that never materialized. The record shows that Reese knew Guy Courtney, an employee of Barron Chase Securities and president of the Machaira Group, Inc. (TMG), through Reese's investments in TMG. Courtney knew defendant Gerald Forsythe through Forsythe's investments in TMG. Late in 1993, Courtney met with Forsythe to discuss the formation of a "blank check" company. The purpose of the company was to fund an acquisition of a financial institution. Forsythe stated that he would be interested in investing "if the proper people could be put together." The blank check company became known as Forsythe Mergers Group (FMG).
Thereafter, Courtney met with Reese about his possible investment and participation in FMG. Reese was the president and CEO of Market Dimensions, Inc. (MDI), as well as an employee. As an MDI employee, Reese consulted with banks relative to market research issues and provided computer services to these banks and savings and loans institutions. Reese also had experience with initial public offerings (IPOs) similar to the one planned for FMG because he had put together an IPO while working for Amcore Financial in 1986. During the period that he was involved with FMG, Reese remained employed with MDI.
At the meeting, Reese and Courtney discussed FMG and the IPO. Reese testified in a deposition that he and Courtney orally agreed that Reese would be "a principal of Forsythe Mergers Group, *** assuming [Forsythe] would approve the deal." Reese said that he was told more than once that the entire deal depended upon Forsythe's approving the deal and his signing onto it.
Reese began working on the project. He reviewed prospectuses of two other deals similar to the one that FMG was attempting to complete, wrote a report after researching the pricing of banks and recent transactions, and provided projections concerning FMG based upon other similarly typed companies.
Meanwhile, Courtney forwarded Reese's resume to Forsythe. Forsythe informed Courtney to go forward with the deal. Subsequently, early in March 1994, Courtney contacted Reese and told him that Forsythe had seen Reese's resume and that the "deal was a go" with the next step being for Reese to meet Forsythe.
In April 1994 Reese met with Courtney and Bob Kirk, president of Barron Chase Securities, in Courtney's office to discuss the concept of the transaction and how Courtney and Kirk would be involved. After the meeting, Reese, Courtney, and Kirk went to Forsythe's office, where Reese met Forsythe for the first time. Reese had never talked with Forsythe or received any written communication from him prior to the meeting.
At the meeting, Reese, Courtney, and Forsythe discussed the general structure of the IPO and FMG and some generalities concerning the stock/share agreement. For example, the parties discussed that the price range of the stock to be offered to the public would be between $5 and $6. Forsythe repeated that the deal was a "go" at the end of the meeting.
Reese testified that, between a few days and two weeks after the meeting took place, he and Forsythe made contributions in FMG. On June 6, 1994, FMG was incorporated in Nevada as a start-up entity to conduct the proposed offering. Reese stated that "as president of Forsythe Mergers Group, [he] established a bank account and deposited [the money] into it." Reese contributed $20,176.47 and Forsythe contributed $21,000. Reese said that he did not know if anyone aside from himself was the signatory power on the bank account.
Reese testified that, although Forsythe said the deal was a "go" in April, Reese understood that several things had to be accomplished before things "became a done deal." Specifically, Reese explained that the Securities and Exchange Commission (SEC) had to approve the registration statement, there had to be a public offering of the stock, and the stock had to be sold.
Reese added, however, that the point at which the actual consummation of an IPO occurred could be interpreted many ways, such as when the filing of the registration statement occurred, when the SEC's approval was received, or when the underwriters' agreement was finalized. Although Reese acknowledged that none of these things were ever accomplished, Reese testified that to him the IPO was consummated upon depositing his and Forsythe's money in the FMG bank account. Later in his deposition, however, Reese admitted that Courtney told him that it was only after Forsythe "signed on" that the investment was a "done deal."
In his deposition, Forsythe testified that, when he first met Reese in April, Reese made him feel uncomfortable. After the meeting with Courtney and Reese, Forsythe telephoned an employee, Arnold Becker, to complete a background check on Reese. Forsythe said that he did not remember the specifics of his conversation with Becker, but, upon speaking with Becker after Becker's background check, ...