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Gonzales v. American Express Credit Corp.

June 28, 2000

ARMAND A. GONZALZLES, M.D., PLAINTIFF-APPELLANT,
V.
AMERICAN EXPRESS CREDIT CORP., A DELAWARE CORPORATION, MONTGOMERY WARD ENTERPRISES, INC., AN ILLINOIS CORPORATION, AND SIGNATURE AGENCY, INC., AN ILLINOIS CORPORATION, DEFENDANTS-APPELLEES,
AND
ROBERT S. LEVY, ESQ., AND ROBERT S. LEVY & ASSOCIATES, DEFENDANTS



The opinion of the court was delivered by: Justice Burke

Appeal from the Circuit Court of Cook County. Honorable David G. Lichtenstein, Judge Presiding.

Plaintiff Armand Gonzalzes, M.D., appeals from an order of the circuit court dismissing counts VI through XVI of his sixth amended complaint, with prejudice, pursuant to defendants American Express Credit Corp.'s (American Express), Montgomery Ward Enterprises, Inc.'s (Montgomery Ward), and Signature Agency, Inc.'s (Signature) section 2--615 motion to dismiss (735 ILCS 5/2--615 (West 1998)). On appeal, plaintiff contends that the trial court erred in dismissing the counts against defendants because he sufficiently pled causes of action against defendants for breach of contract, negligent referral, breach of fiduciary relationship, unauthorized practice of law, and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (705 ILCS 220/1 (West 1996)) based on defendants' referral of attorney Robert S. Levy and the Chicago law firm of Robert S. Levy & Associates (Levy)*fn1 to him pursuant to a legal services referral plan. For the reasons set forth below, we affirm.

On July 22, 1991, plaintiff entered into a "contract" (legal services plan or plan) with American Express whereby American Express agreed to provide plaintiff with legal representation in exchange for a monthly fee from plaintiff.*fn2 Plaintiff signed a membership form to become a participant in the plan. Plaintiff received a return letter from the vice president of the plan which stated, in pertinent part:

"Our goal for this plan is to provide members, like you, with quality legal representation for a reasonable fee. And, in our constant efforts to provide you with this highly professional service, we have provided you with another law firm to meet your specific legal needs."

The letter also included a membership card informing plaintiff that his legal representation under the plan would be provided Levy.

The plan was administered by Signature. Plaintiff's benefits in the plan were more fully set out in the "Confidential Benefit Handbook" (handbook).*fn3 The handbook instructed participants on how to use the legal services detailed in the plan. When calling their plan attorney, participants were asked to

"be prepared to say, in general terms, what the nature of your request or problem is so that you will be referred to the appropriate attorney in that law firm who handles that area of law."

The handbook explained that attorneys were chosen for participants based on geographic location. The handbook described the qualifications of its plan attorneys, stating:

"All plan attorneys are licensed to practice in your state. They are registered with the State Bar Association or appropriate regulatory agency and proper references have been checked. All are experienced and in private practice. Plan attorneys have their own offices and are not employees of the Plan."

The handbook also contained a section on "Limitation of Liability" which explained the following:

"The State Bar does not guarantee the quantity or quality of legal services provided under this plan. Total responsibility for delivery of services rests with the Plan and the Plan Attorneys in their individual attorney-client relationships. Plan Members may at any time file a complaint with the State Bar or other attorney regulatory authority concerning a problem with an attorney's professional conduct."

From July 22, 1991, to February 17, 1994, plaintiff paid all of his fixed monthly fees to American Express as required by the plan.

On June 26, 1996, plaintiff filed an eight-count complaint against Levy, American Express, Montgomery Ward, and Signature. Counts I through III of the complaint were directed against Levy for legal malpractice, breach of fiduciary duty, and breach of contract, respectively. Plaintiff alleged that he retained Levy in 1991 to represent him in a breach of warranty action against a company from which he had purchased a boat and that Levy failed to file an action against the company within the appropriate statute of limitations period. Plaintiff also claimed that he retained Levy to represent him in a dissolution of marriage proceeding, but Levy failed to file a motion to modify his spousal support payments and to notify plaintiff that a judgment had been entered against him for unpaid support payments, thereby causing him damages.

Counts IV through VIII of the complaint were directed against American Express, Montgomery Ward, and Signature. Count IV was a claim for negligent referral. Plaintiff alleged that defendants "held themselves out as providers of legal services" and that despite their duty to provide "competent legal representation," defendants breached this duty, injuring plaintiff "in an undetermined amount." Counts V and VI were claims for breach of fiduciary duty and breach of contract, respectively, and contained similar allegations against defendants for failing to provide plaintiff with "competent" legal representation. Count VII of the complaint was a claim for the unauthorized practice of law by defendants. Plaintiff alleged that defendants had received compensation for "providing the legal services of [Levy] to [plaintiff]" in violation of the Illinois Corporation Practice of Law Prohibition Act (705 ILCS 220/1 (West 1996)). Count VIII was a claim for defendants' violation of the Consumer Fraud Act.

Plaintiff filed first and second amended complaints naming additional defendants, but did not make any substantive changes in the allegations made in his initial complaint. Plaintiff filed a third amended complaint which only amended the counts directed against Levy in response to a motion to dismiss filed by Levy. On June 16, 1997, the trial court entered a default judgment in favor of plaintiff and against Levy in the amount of $235,555.59 plus costs based on Levy's failure to respond to plaintiff's third amended complaint.

Plaintiff also filed a fourth and fifth amended complaint in response to defendants' additional motions to dismiss, which were based upon, among other reasons, plaintiff's failure to attach to his ...


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