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Mid-West Energy Consultants, Inc. v. Covenant Home

August 27, 2004

[5] MID-WEST ENERGY CONSULTANTS, INC., PLAINTIFF-APPELLANT,
v.
COVENANT HOME, INC., D/B/A COVENANT VILLAGE NORTHBROOK, DEFENDANT-APPELLEE.



[6] Appeal from the Circuit Court of Cook County. Honorable Barbara J. Disko, Judge Presiding.

[7] The opinion of the court was delivered by: Justice Gallagher

[8]  Plaintiff, Mid-West Energy Consultants, Inc. (Mid-West), appeals from the trial court's dismissal, pursuant to section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 2000)), of its second amended complaint against defendant, Covenant Home, Inc., d/b/a Covenant Village Northbrook (Covenant). We affirm.

[9]  STANDARD OF REVIEW

[10]   Our standard of review of a trial court's dismissal based upon section 2-615 is de novo. Hopewell v. Vitullo, 299 Ill. App. 3d 513, 516, 701 N.E.2d 99, 101 (1998). A section 2-615 motion attacks the legal sufficiency of a complaint, and this court's inquiry is limited to whether the allegations of the complaint, when viewed in the light most favorable to the plaintiff, are sufficient to state a cause of action upon which relief can be granted. Vernon v. Schuster, 179 Ill. 2d 338, 344, 688 N.E.2d 1172, 1175 (1997). In order to withstand a motion to dismiss based on section 2-615, a complaint must allege facts sufficiently setting forth the essential elements of the cause of action. Urbaitis v. Commonwealth Edison, 143 Ill. 2d 458, 475, 575 N.E.2d 548, 555-556 (1991). We must accept as true all well-pled factual allegations contained in the complaint and construe all reasonable inferences therefrom in favor of plaintiff. Vernon, 179 Ill. 2d at 341, 688 N.E.2d at 1174. But a plaintiff cannot rely simply on conclusions of law or fact unsupported by specific factual allegations. Anderson v. Vanden Dorpel, 172 Ill. 2d 399, 408, 667 N.E.2d 1296, 1300 (1996).

[11]   BACKGROUND

[12]   Mid-West provides consulting services for the recovery of past electrical overcharges and reduction of future utility bills. On December 2, 1993, Mid-West and Covenant entered into a written agreement (the Agreement) whereby Covenant agreed to pay Mid-West 50% of any refunds or credits that Covenant received from Commonwealth Edison (ComEd) and 50% of any future savings over a 36-month period that Covenant realized from recommendations made by Mid-West.

[13]   Mid-West reviewed and analyzed Covenant's past electric bills and ComEd's past 30-year electric billing and metering practices of Covenant. Mid-West determined that ComEd had overbilled Covenant for electrical usage in an amount in excess of $4.7 million. On October 4, 1994, Mid-West and Covenant jointly presented to ComEd a summary of Covenant's claim, with supporting documentation, and demanded a refund in the form of a payment rather than a credit.

[14]   On July 24, 1995, ComEd formally responded to Covenant's demand. ComEd rejected all but $81,400 of the requested refund. In the ensuing months, ComEd further investigated and the parties further negotiated Covenant's claims. During this time, Mid-West acted on Covenant's behalf. Subsequent proposals prepared by Mid-West and negotiations with ComEd were unsuccessful. On or about July 3, 1996, ComEd slowed negotiations because it believed that "the parties were too far apart."

[15]   Shortly thereafter, Mid-West and Covenant interviewed a law firm to represent Covenant in its dispute with ComEd. In September 1996, Covenant retained a national law firm to assist in the prosecution of its claims against ComEd. Covenant and Mid-West agreed to share the costs of attorney fees, with Mid-West's contribution to be funded through the anticipated refund. After being retained, one of Covenant's attorneys advised it that Mid-West had previously been discredited before the Illinois Commerce Commission (ICC). The attorney further advised Covenant that, in light of the information it had been given, it would be in Covenant's best interest to terminate its relationship with Mid-West and retain a consultant paid on an hourly basis to assist in the prosecution of Covenant's claims against ComEd.

[16]   In or about September 1996, Covenant retained another energy consulting firm, Schedin Associates. Mid-West, unaware of the advice that had been given by the attorneys and the action taken by Covenant, continued to believe that Covenant was preparing to file its claims against ComEd and allegedly recommended and urged Covenant and Covenant's counsel, as a first step, to pursue an informal complaint before the ICC.

[17]   On January 21, 1997, Covenant and Mid-West had a meeting during which Covenant notified Mid-West that it had retained a different consultant, that Mid-West was terminated, and that Mid-West no longer had the authority to represent it with respect to its claim against ComEd. Specifically, Covenant's termination letter of that date stated that it would "serve as notification of the termination of the agreement between [Covenant and Mid-West]." The letter also stated: "It is our intention to continue providing the information to you so that you can determine the 'savings' and calculate what is due to you through the 36-month period ending December, 1999." *fn1

[18]   On March 19, 1997, Covenant wrote a clarifying letter regarding Mid-West's termination. In that letter, Covenant stated that it had no intention of sharing any refund it received from ComEd with Mid-West with regard to past usage because the relationship had been terminated and no refund had been received. Covenant ultimately never received a refund because, in May or June 1996, ComEd's counsel informed Covenant that it had failed to file a timely proceeding against ComEd before the ICC on or before October 4, 1996. Therefore, ComEd refused to offer any money in settlement.

[19]   On January 26, 2000, Mid-West filed its initial complaint seeking 50% of the refund received by Covenant from ComEd. After discovery revealed that ComEd had paid no refund, Mid-West filed a second amended complaint for breach of the covenant of good faith and fair dealing. Mid-West alleged that it had been deprived of the likely fruits of the Agreement as a result of Covenant's failure to independently investigate the claims of its counsel that Mid-West had been discredited before the ICC; Covenant's unilateral termination of the Agreement and its retention of another consultant "behind Mid-West's back"; Covenant's pursuing its claims against ComEd for many months after terminating the Agreement; and Covenant's failing to file a timely complaint with the ICC.

[20]   On March 5, 2003, the trial court dismissed the second amended complaint pursuant to section 2-615 for failing to state a claim for breach of the implied covenant of good faith ...


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