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Cove Management v. Aflac

March 8, 2013

COVE MANAGEMENT,
PLAINTIFF-APPELLANT,
v.
AFLAC, INC., A CORPORATION,
DEFENDANT- APPELLEE (DARREN GALGANO AND BARBIER GROUP, INC., ) DEFENDANTS).



Appeal from the Circuit Court of Cook County. No. 10 L 9069 Honorable Brigid Mary McGrath, Judge Presiding.

The opinion of the court was delivered by: Justice Gordon

JUSTICE GORDON delivered the judgment of the court, with opinion.

Presiding Justice Lampkin and Justice Hall concurred in the judgment and opinion.

OPINION

¶ 1 Plaintiff Cove Management filed a lawsuit against defendants Darren Galgano, Barbier Group, Inc., and AFLAC, Inc.*fn1 Against defendant AFLAC, plaintiff alleged counts of breach of contract, "ratification," and unjust enrichment arising from conduct by defendant Darren Galgano.*fn2 AFLAC filed a combined motion, pursuant to both sections 2-619(a)(9) and 2-615 of the Illinois Code of Civil Procedure (735 ILCS 5/2-615, 2-619(a)(9) (West 2010)), to dismiss the claims against it, setting forth each motion in separate sections. The trial court granted AFLAC's section 2-619(a)(9) motion and dismissed the claims against AFLAC with prejudice, finding that AFLAC had sufficiently raised affirmative matters which defeated plaintiff's claims. In this interlocutory appeal, plaintiff appeals the dismissal of its claims against AFLAC, pursuant to Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010). For the following reasons, we affirm.

¶ 2 BACKGROUND

¶ 3 I. The Parties

¶ 4 Defendant AFLAC is engaged in the business of underwriting and selling insurance policies in the health care field. On September 22, 2004, defendant Darren Galgano signed an "Associate's Agreement" with AFLAC, which engaged Galgano to solicit applications for insurance policies offered for sale by AFLAC. The agreement also states that Galgano is an independent contractor, without the authority to bind AFLAC for Galgano's "debts, faults, or actions." The agreement specifically states that Galgano is prohibited from entering into contracts or incurring debt on behalf of AFLAC. On September 5, 2005, Galgano signed a "District Sales Coordinator's Agreement," which incorporated the terms of the "Associate's Agreement" and specifically withheld authority from Galgano to "rent any office space or telephone, open any bank account, or make any expenditure, obligation or commitment for any purpose in the name of AFLAC without specific written authorization from the president, a vice president, or secretary of AFLAC." On August 6, 2007, Galgano signed a "Regional Sales Coordinator's Agreement," which incorporated the "District Sales Coordinator's Agreement" and once again withheld authority from Galgano to rent office space, incur debt, or enter into a contract on AFLAC's behalf without express written authorization of the president, a vice president, or a secretary of AFLAC.

¶ 5 On September 4, 2009, Galgano leased retail property located at 4701 Midlothian Turnpike in Crestwood, Illinois, from plaintiff Cove Management. The first page of the lease listed plaintiff as the lessor, listed "AFLAC" as the tenant,*fn3 and listed Galgano as the guarantor. The lease provided that the permitted use of the space was "insurance services." On the signature page, Joseph Bertucci, on behalf of plaintiff, signed under "lessor," and Galgano signed his own name under "lessee"*fn4 and "guarantor." He did not indicate on the signature page that he was signing on behalf of AFLAC.

¶ 6 II. The Complaint and Amended Complaint

¶ 7 Initially, plaintiff filed a three-count complaint against all three defendants, alleging (1) breach of contract, (2) breach of guarantee, and (3) unjust enrichment or quantum meruit. AFLAC filed a motion under section 2-619(a)(9) of the Illinois Code of Civil Procedure (735 ILCS 5/2-619 (West 2010)) to dismiss the complaint, affirmatively asserting that Galgano was an independent contractor who could not bind AFLAC to the lease.

¶ 8 The trial court granted AFLAC's motion and dismissed the complaint without prejudice to replead. Plaintiff then filed an amended complaint, alleging counts of breach of contract, "ratification," and "unjust enrichment or quantum meruit" against AFLAC. Plaintiff later filed a second amended complaint, alleging three counts against AFLAC: breach of contract (count I); ratification (count II); and unjust enrichment (count IV). Plaintiff attached numerous exhibits to the complaint, including (1) the signed agreements between AFLAC and Galgano which engaged Galgano's services on behalf of AFLAC and limited Galgano's authority to sign contracts on AFLAC's behalf; (2) Lynn Fry's affidavit, in which she stated that she was a vice president of AFLAC at the time Galgano signed the lease, and that Galgano is an independent contractor without authority to sign the lease on behalf of AFLAC; (3) the signed lease; (4) a check, dated July 21, 2012, payable to plaintiff for $1,610 from an account in the name of defendant Barbier Group, Inc., at 414 North Orleans Street, Suite 601 in Chicago, Illinois; (5) a photocopy of an envelope addressed to plaintiff, bearing AFLAC's trademark, but not an address for AFLAC, and the phrase "Member, President's Club"; (6) photocopies of five different people's business cards, including Galgano's, all of which bore AFLAC's trademark and the phrase "An Independent Associate Representing Aflac," one business card designating Galgano as "Regional Sales Coordinator" located at 414 North Orleans Street, Suite 601 in Chicago, Illinois, and listing telephone numbers at locations in the Chicago Loop, Chicago Ridge, and South Holland, one business card designating Robert Czerwinski as "District Sales Coordinator" located at 4701 Midlothian Turnpike, Suite 1 in Crestwood, Illinois, one business card designating Qiana Cochran as "District Sales Coordinator" located at 4701 Midlothian Turnpike, Suite 1 in Crestwood, Illinois, one business card designating Mark Zuro as "Associate" located at 4701 Midlothian Turnpike, Suite 1 in Crestwood, Illinois, and one business card designating Tiffany

M. Allen as "District Sales Coordinator" located at 4701 Midlothian Turnpike, Suite 1 in Crestwood, Illinois; (7) printouts from Internet search engines Google.com and Yahoo.com, which indicated telephone listings for AFLAC at the subject property's address and a listing of the subject property's address and phone number under aflac.com; (8) printouts from the website merchantcircle.com, which states that an AFLAC office was located at the Midlothian address;*fn5

(9) a photograph of a sign bearing the AFLAC trademark and the phrase "Reserved Parking, Agent of the Month!";*fn6 (10) a photograph of a building bearing the number "4701"; (11) a photograph of a business marquee bearing the name "Crestwood Cove," the number "4701," and the name AFLAC on the list of businesses located at the building; and (12) photographs of paper and office supplies on shelves.*fn7

¶ 9 In discovery, plaintiff responded pursuant to a bill of particulars that no person other than Galgano "held out" Galgano as having authority to bind AFLAC to the lease at issue, and that the only promotional material they received prior to signing the lease was Galgano's business card and maybe his stationery. The business card is designed in AFLAC's colors and states that Galgano is an "Independent Associate Representing AFLAC" and further states Galgano's position as "Regional Sales Coordinator."

ΒΆ 10 After the filing of the second amended complaint, AFLAC filed a combined motion under sections 2-615 and 2-619(a)(9) of the Illinois Code of Civil Procedure (735 ILCS 5/2-615, 2-619(a)(9) (West 2010)) to dismiss counts I, II, and IV of the complaint. AFLAC's section 2-619(a)(9) motion argued that AFLAC should be dismissed because Galgano was an independent contractor without the authority to bind AFLAC to the lease, and plaintiff could prove no set of facts showing it was entitled to relief. AFLAC's section 2-615 motion additionally argued that count IV should be dismissed from the complaint because plaintiff failed to properly plead the necessary elements of its unjust enrichment claim. AFLAC attached to its motion to dismiss two affidavits of Lynn Fry, a vice president of AFLAC at the time Galgano signed the lease. In these affidavits, Ms. Fry ...


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