Inc. v. Makita Corp., 34 F.3d at 1328. The general allegations
of amended Count XI, however, fail to state the specific details
of the alleged misrepresentations and fail to state when these
misrepresentations were made.
II. STATUTE OF LIMITATIONS
Defendant further argues that in amended Count XII, plaintiffs
allege that Fuller was governed by and engaged in violations of
the Illinois Securities Law of 1953, 815 ILCS 5/1 et seq. Since
plaintiffs' allege a common law fraud claim involving the sale of
securities, defendant believes the contracts fall under the three
year statute of limitations "set out" in 815 ILCS 5/13(D).
Tregenza v. Lehman Brothers, Inc., 287 Ill. App.3d 108, 109, 222
Ill.Dec. 607, 678 N.E.2d 14 (1997). Perhaps noticing this
potential problem, plaintiffs dropped amended Count XII in their
response to defendant's motion to dismiss, and their amended
Count XI alleges only that false misrepresentations were made as
to the loaning of money for contracts executed between plaintiffs
and defendant. Amended count XI does not claim to be governed by
Illinois securities law, and defendant has made no assertion that
their contracts with plaintiffs are securities. Therefore, the
five year statute of limitations applies to this claim of common
law fraud. 735 ILCS 5/13-205.
III. FUTURE PROMISES
The general rule in Illinois "denies recovery for fraud based
on a false representation of intention or future conduct, but
there is a recognized exception where the false promise or
representation of future conduct is alleged to be the scheme
employed to accomplish the fraud." Steinberg v. Chicago Med.
School, 69 Ill.2d 320, 13 Ill.Dec. 699, 371 N.E.2d 634, 641
(1977). Defendant argues that his "alleged misrepresentations are
cast in terms of future conduct," illustrated by the plaintiffs'
use of language in amended Count XI alleging that "any funds
loaned to AIH would be used for the capitalization and daily
operations of AIH" and "the monies loaned by plaintiffs to AIH
were to be used . . ." Contrary to defendant's assertions,
plaintiffs' allege that "Fuller represented that AIH's business
[was] a going concern . . . in order to induce Plaintiffs to loan
AIH money." Plaintiffs sufficiently demonstrate that defendant's
alleged "false and misleading" representations motivated
plaintiffs to loan money to defendant for the current and
continued operation of AIH, rather than as a false representation
of future conduct.
For the reasons set forth above, defendant's motion to dismiss
amended Count XI is granted. Amended Count XII is dismissed by
agreement. Plaintiffs are granted leave to file a second amended
Count XI on or before July 7, 2000. Defendant shall respond
thereto by July 28, 2000. This matter is set for a status hearing
on August 2, 2000, at 9:00 a.m.
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