FOURTH DIVISION November 9, 2006
No. 1-05-2824
AON CORPORATION & AON CONSULTING, INC. ) Appeal from the ) Circuit Court of Plaintiffs-Appellants, ) Cook County. ) v. ) ) ANDREA UTLEY, ) Honorable ) Paddy H. McNamara, Defendant-Appellee. ) Judge Presiding.
PRESIDING JUSTICE QUINN delivered the opinion of the court:
Plaintiffs Aon Corporation (Aon) and Aon Consulting, Inc.
(Aon Consulting), appeal from the circuit court's judgment
granting defendant Andrea Utley's motion to dismiss pursuant to
section 2-619 of the Illinois Code of Civil Procedure (735 ILCS
5/2-619 (West 2004)). On appeal, plaintiffs argue that the
circuit court erroneously determined that it lacked personal
jurisdiction over defendant and that if it had jurisdiction, it
would have granted a motion for forum non conveniens.
On January 15, 1997, defendant, a resident of California,
became an employee of Aon Consulting, a subsidiary of Aon, when
Aon Consulting bought defendant's then employer, Alexander &
Alexander Services, Inc. Defendant served as senior vice
president of Aon Consulting and provided insurance consulting
services to its clients. Aon and Aon Consulting are both
incorporated in Delaware and headquartered in Illinois. No. 1-05-2824
On May 27, 1999, defendant signed a stock option agreement
with Aon which provided that she would receive an option to buy
1,000 shares of Aon stock at $65.1563 per share. In exchange,
defendant agreed to certain conditions, including covenants not
to solicit Aon clients, not to enter into a business relationship
with Aon clients, and not to hire Aon employees for two years
should she leave the company. The covenant not to solicit
stated:
"The Employee hereby covenants and agrees
that, except with the prior written consent
of Aon, the Employee will not for a period of
two (2) years after the end of employment
compete directly or indirectly in any way 1 with the business of the Company. For the
purposes of this Agreement, 'compete directly
or indirectly in any way with the business of
the Company' means to enter into or attempt
to enter into (on Employee's own behalf or on
behalf of any other person or entity) any
1 The agreement defines "Company" as "the subsidiary(ies) and
affiliate(s) of Aon to which Employee devoted substantially all
of his business time and attention at any time during the twenty-
four (24) month period prior to the termination of Employee's
employment."
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business relationship of the same type or
kind as the business relationship which
exists between the Company and its clients or
customers to provide services related to the
business of the Company for any individual,
partnership, corporation, association or
other entity who or which was a client or
customer for whom the Employee was the
producer or on whose account Employee worked
or became familiar with during the twenty-
four (24) months prior to the end of
The agreement further provided that due to the unique character
of defendant's services to Aon, any breach by defendant would
entitle Aon to injunctive relief. Other notable clauses in the
agreement concerned its modification and the governing law. The
agreement provided that it could not be "amended, altered or
modified without the prior written consent of both parties and
such instrument must acknowledge that it is an amendment or
modification of this Agreement." In addition, the agreement
contained a clause captioned "Governing Law and Choice of Forum,"
which stated:
"The validity, interpretation, construction,
performance, enforcement and remedies of or
relating to this Agreement, and the rights
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and obligations of the parties hereunder,
shall be governed by and construed in
accordance with the substantive laws of the
State of Illinois, without regard to the
conflict of law principles, rules or statutes
of any jurisdiction. Any and every legal
proceeding arising out of or in connection
with this Agreement shall be brought in the
Circuit Court of Cook County of the State of
Illinois, each party hereby consenting to the 2 exclusive jurisdiction of said court." Defendant continued her employment at Aon Consulting, and on
April 20, 2001, entered into a nonsolicitation agreement with Aon
Consulting, which was referenced as "the Company" in the
2 The previous provision provided that the captions of the
Agreement "are not part of its provisions, are merely for
reference and have no force or effect."
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agreement. The agreement allowed defendant to purchase shares of
Aon Consulting's parent company Aon. In exchange, defendant
again agreed to covenants not to solicit and not to hire. The
new covenant not to solicit provided in pertinent part:
of the Company, the Employee will not, for a
period of two (2) years after the end of
employment, compete directly or indirectly in
any way with the Business. For the purposes
of this Agreement, 'compete directly or
indirectly in any way with the Business'
means to enter into or attempt to enter into
(on Employee's own behalf or on behalf of any
other person or entity) any business
relationship of the same type or kind as the
business relationship which exists between
Aon Group and its clients or customers to
provide services related to the Business for
any individual, partnership, corporation,
association or other entity who or which was
a client or customer for whom the Employee
worked or became familiar with during the
twenty-four (24) months prior to the end of
employment. 'Client' or 'customer' means any
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person or entity listed on the books of Aon
Group as such."
The agreement also provided that Aon Consulting would be entitled
to injunctive relief for any breach by defendant. In addition,
the agreement contained a clause captioned "Governing Law and
Choice of Forum." 3 That provision stated: "The validity, interpretation, construction,
shall be governed by and constructed in
3 Like the first agreement, the 2001 agreement contained a
provision which stated that "[t]he captions contained in this
Agreement are not part of its provisions, are merely for
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Employee's state of residence on the
Effective Date, without regard to the
of any jurisdiction."
On June 4, 2001, Patrick G. Ryan, chairman and chief
executive officer of Aon, sent defendant a letter in which he
informed her that the organization and compensation committee of
the board of directors had approved the grant of stock option
rights to her under the 2001 agreement not to solicit. The
letter concluded, "Your options - both those granted in 2001, and
those granted before - will be adjusted to preserve their
economic value. The details of this adjustment are being
developed and will be shared with you later this year."
On March 29, 2005, plaintiffs filed a complaint in the
circuit court of Cook County, which alleged that defendant
breached the 1999 stock option agreement. The complaint stated
that on October 11, 2004, defendant resigned from Aon Consulting
to join another insurance consulting company, ABD Insurance
(ABD). Within weeks of her employment at ABD, defendant
allegedly entered into consulting relationships with two of Aon
Consulting's clients. Shortly thereafter, defendant entered into
a brokerage relationship through ABD with another Aon Consulting
client. Plaintiffs claimed that they lost significant business
and suffered substantial damages due to defendant's actions.
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Plaintiff's complaint did not assert any breach of the 2001
nonsolicitation Agreement.
In response, defendant filed a motion to dismiss plaintiffs'
complaint pursuant to section 2-619 of the Illinois Code of Civil
Procedure (Code) (735 ILCS 5/2-619 (West 2004)). In that motion,
defendant claimed that the circuit court lacked personal
jurisdiction over her pursuant to section 2-301 of the Code (735
ILCS 5/2-301 (West 2004)). She contended that the 1999 stock
option agreement merged with the 2001 agreement not to solicit,
and that the 2001 agreement provided that any breach arising from
it would be brought in her state of residence, which was
California.
In their response, plaintiffs argued that the 1999 and 2001
agreements did not merge and that, even if the trial court
determined that they did merge, the provision in the 2001
agreement concerning governing law was not a forum selection or
consent to jurisdiction clause, but was only a "choice of law
provision." Thus, plaintiffs contended that the circuit court
had personal jurisdiction.
Following arguments, the trial court granted defendant's
motion to dismiss. In making its ruling, the trial court stated
in pertinent part:
"So, I mean, initially I'm ruling against you
on the contract itself. I think it's -- both
contracts have merged. The one that's
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applicable here is the 2001 contract. That's
who she worked for at the time they were
trying to enforce this.
If I go further, she worked for a
company that was headquartered in Illinois.
There seems to be some contact, probably
enough to uphold long-arm jurisdiction. If I
considered it beyond that, I would definitely
find that the form [sic] nonconvenience [sic] analysis, in terms of where the witnesses
are, convenience to the parties, interpreting
the laws of California, all of those factors
would go in favor of transferring this to
But I'm finding it -- the basis of my
finding is that the contract has merged into
the prior contract, and I believe that any
ambiguity in terms of form has to be
construed against Aon.
Therefore, Plaintiffs -- or the --
motion to dismiss plaintiffs' complaint
is granted."
Plaintiffs now appeal that decision.
A section 2-619 motion to dismiss (735 ILCS 5/2-619 (West
2004)) raises defects or defenses to the complaint and questions
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whether defendant is entitled to judgment as a matter of law.
Gonnella Baking Company v. Clara's Pasta Di Casa, Ltd., 337 Ill.
App. 3d 385, 388 (2003). "When reviewing a motion to dismiss,
this court must accept all well-pleaded facts as true [citation]
and view them in the light most favorable to the plaintiff."
Gonnella Baking Co., 337 Ill. App. 3d at 388. We may consider
all facts presented in the pleadings, affidavits, and depositions
found in the record. Gonnella Baking Co., 337 Ill. App. 3d at
388. Since the resolution of this case hinges on a matter of
law, our review is de novo. Gonnella Baking Co., 337 Ill. App. 3d at 388.
We first address the circuit court's conclusion that the
1999 and 2001 agreements merged. "Merger occurs when a contract
supercedes and incorporates all or part of an earlier agreement."
American National Bank & Trust Co. of Chicago v. Bentley, 159
Ill. App. 3d 27, 29 (1987). When a subsequent contract relates
to the same subject matter and contains the same terms as a
previous contract, the actions of the parties are based on the
provisions of the subsequently executed contract. Bentley, 159 Ill. App. 3d at 29.
In this case, although the record shows that the 1999 and
2001 agreements both involved stock option plans, the subject
matter of the agreements differed. Defendant entered into the
1999 agreement, entitled "Notice of Grant of Stock Option and
Option Agreement," with Aon. The agreement afforded defendant an
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opportunity to purchase Aon common stock in exchange for
accepting the terms of the agreement. The agreement provided
details as to the exercise price of the stock, $65.1563 a share,
and a vesting schedule. The agreement also contained covenants
in which defendant agreed not to solicit Aon customers and not to
hire Aon employees for two years after the termination of her
employment from Aon.
Subsequently, defendant entered into the 2001 agreement,
dated April 20, 2001, and entitled "Non-Solicitation Agreement,"
with Aon's subsidiary, Aon Consulting. The agreement again
offered defendant an opportunity to purchase Aon common stock and
contained near identical nonsolicitation and nonhiring clauses.
The 2001 plan, however, did not detail the stock price or the
vesting schedule. Rather, an attachment to a June 4, 2001,
letter defendant received from Aon president and chief executive
officer Patrick Ryan suggested that the stock plan details were
provided in a separate agreement, entitled "Option Agreement."
The 2001 "Option Agreement" is not found in the record.
Although the 1999 and 2001 agreements found in the record
both offered defendant an opportunity to purchase Aon common
stock, they did not involve the same subject matter. The
agreements clearly illustrate that defendant had a separate
opportunity to purchase additional stock in 2001, which had no
effect on the stock she could have purchased pursuant to the 1999
agreement. We thus find that the agreements did not pertain to
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the same subject matter.
Moreover, the 1999 agreement explicitly provided that it
"may not be amended, altered or modified without the prior
written consent of both parties and such instrument must
acknowledge that it is an amendment or modification of this
Agreement." The record here does not contain any written
notification between the parties that the 2001 agreement was
meant to modify the 1999 agreement.
We, therefore, conclude that the 1999 and 2001 agreements
did not merge but, rather, constituted distinct agreements. As
such, nothing precluded the circuit court from determining that
defendant violated the 1999 agreement, which contained a choice
of forum clause in which she consented that any legal proceeding
arising from the agreement would be brought in the circuit court
of Cook County of the State of Illinois.
Nonetheless, whether or not the agreements merged, we
conclude that the circuit court erred in dismissing plaintiffs'
claims. The circuit court erroneously read the 2001 agreement to
contain a choice of forum provision in which the parties
allegedly consented that all legal proceedings arising from the
contract would be brought in defendant's state of residence,
which was California. The record, however, shows that although
the 2001 agreement contained a provision entitled "Governing Law
and Choice of Forum," unlike the identically entitled provision
in the 1999 agreement, which denoted that Illinois law governed
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and exclusive jurisdiction existed in the circuit court of Cook
County of the State of Illinois, the 2001 provision only stated
that the substantive law of the employee's state of residence
would govern. Thus, the 2001 agreement did not contain a choice
of forum clause, which is distinct from a choice of law clause
(In re Marriage of Walker, 287 Ill. App. 3d 634, 639 (1997)).
As such, even if the 1999 and 2001 agreements merged, the
only choice of forum to which the parties consented was the
circuit court of Cook County. We, therefore, find that the
circuit court had personal jurisdiction in this case.
In the alternative, defendant argues in this court that the
1999 choice of forum clause was not enforceable. We disagree.
A choice of forum or forum selection clause is prima facie
valid. Dace International, Inc. v. Apple Computer, Inc., 275 Ill. App. 3d 234, 239 (1995). The party objecting to the
clause's enforcement is required to show that the litigation in
the selected forum would be so burdensome that no real
opportunity existed to litigate the issues in a fair manner and
that the clause's enforcement essentially deprives the party of
access to the courts. Dace International, Inc., 275 Ill. App. 3d at 239. To determine the reasonableness of a forum selection
clause, courts should consider: (1) the law that governs the
formation and construction of the contract, (2) the residency of
the parties, (3) the place of execution and/or performance of the
contract, (4) the location of the parties and their witnesses,
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(5) the inconvenience to the parties of any particular location,
and (6) whether the clause was bargained for. Calanca v. D & S
Manufacturing Co., 157 Ill. App. 3d 85, 88 (1987).
We find that viewing the factors set forth in Calanca, the
forum selection clause in the 1999 agreement was valid. As
previously discussed, the 1999 and 2001 agreements did not merge,
and thus plaintiffs could have sued defendant for breach only of
the 1999 agreement. Having reached that conclusion, a review of
the 1999 agreement shows that it explicitly provided that the law
governing the agreement was Illinois law. Thus, the first factor
favors plaintiff.
The second factor is a draw. Although defendant resides in
California and plaintiff maintains an office there, plaintiff is
headquartered in Illinois.
The third factor favors defendant. The record shows that
the agreement was executed and performed in California, where
defendant was employed.
Although defendant contends that the fourth factor also
favors her, she fails to identify any witnesses who reside in
California. Conversely, the record contains the affidavit of
Paul A. Valencia, human resources director, executive
compensation, for Aon. In that affidavit, Valencia states that
potential witnesses who would testify for plaintiff about the
stock option agreements, including Maxine Bonn, Denise Callahan
Kaluza, Roger Vaughn, and herself, all reside near Chicago.
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As for the fifth factor, defendant neither provides any
support for her contention that litigation in Illinois would be
inconvenient nor suggests that the inconvenience would prevent
her from having her day in court. Although litigation in
California would clearly be more convenient for defendant, mere
inconvenience does not serve as a basis for voiding the forum
selection clause. Dace International, Inc., 275 Ill. App. 3d at
239-40.
Finally, the sixth factor does not favor defendant. As
defendant contends, it does not appear that the forum selection
clause was reached through arm's-length negotiation but, rather,
was boilerplate language in the agreement. That said, unlike
Mellon First United Leasing v. Hansen, 301 Ill. App. 3d 1041, 1046 (1998), upon which defendant relies, she was not an
inexperienced business owner "akin to an ordinary consumer" in a
small business transaction who was unaware of a forum selection
clause hidden on the back of a page of a contract. Rather, she
was an experienced businesswoman who neither objected to nor
attempted negotiation with regard to a forum selection clause
that was clearly legible on the front of page five of the six-
page 1999 agreement. Moreover, the agreement had no effect on
defendant's employment status, but simply offered her an
opportunity to purchase Aon stock. For those reasons, we decline
to invalidate the forum selection provision. See Dace International, Inc., 275 Ill. App. 3d at 240.
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Having concluded that the circuit court had jurisdiction in
this case due to a valid forum selection clause, we also reject
the circuit court's finding that dismissal would still have been
appropriate in this case based on forum non conveniens. Rather,
we find that where defendant agreed to a valid forum selection
clause, she waived any arguments based on forum non conveniens.
Our ruling finds support in language found in Dace
International, Inc., 275 Ill. App. 3d at 239-40. In that case,
this court reviewed a circuit court's decision to grant a
defendant's section 2-619 motion to dismiss a plaintiff's breach
of contract claim where the defendant alleged that a forum
selection clause in the contract designated California as the
forum for all litigation arising from the contract. On appeal,
the plaintiff contended that the clause was unenforceable because
under the Calanca factors, Illinois was the more convenient and appropriate forum for the action. In rejecting that argument,
this court stated:
"[R]elative inconvenience has been routinely
rejected as a basis for voiding forum
selection clauses: '[T]he question *** is not
the most convenient place for trying these
suits; it is whether the defendants consented
to being sued in [a particular forum] and by
doing so waived their right to object to the
jurisdiction of the courts *** over them.' "
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Dace International, Inc., 275 Ill. App. 3d
at 239-40, quoting Northwestern National
Insurance Company v. Donovan, 916 F.2d 372,
375 (7th Cir. 1990).
This court thereafter affirmed the circuit court's ruling where
we determined that the plaintiff failed to prove that the forum
selection clause was unreasonable.
We acknowledge that our analysis in Dace International, Inc.
concerned the validity of a forum selection clause, not whether a
party waives its right to file a motion to dismiss for forum non
conveniens by virtue of signing a contract that embodied a valid
forum selection clause. Our reliance, however, on Donovan in analyzing the validity of the forum selection clause in Dace
supports such a conclusion.
In Donovan, the United States Court of Appeals for the
Seventh Circuit reversed the ruling of the District Court for the
Eastern District of Wisconsin which had dismissed the plaintiff's
breach of contract action based on the district court's refusal
to enforce the forum selection clause in the parties'
indemnification agreement. The court of appeals first addressed
the validity of the forum selection clause and in doing so
expressed concern as to such a clause's effect on a third party.
The court of appeals concluded, however, that where "that
possibility is slight, the clause should be treated like any
other contract." Donovan, 916 F.2d at 376. The court of Appeals
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then determined that the forum selection clause was enforceable
after which it declared that,
"The signing of a valid forum selection
clause is a waiver of the right to move for a
change of venue on the ground of incon-
venience to the moving party. [Citation.] If
there is inconvenience to some third party of
which that third party may not even be aware,
or to the judicial system itself, then either
party to the suit is free to move for a
change of venue. But one who has agreed to
be sued in the forum selected by the
plaintiff has thereby agreed not to seek to
retract his agreement by asking for a change
of venue on the basis of costs or
inconvenience to himself; such an effort
would violate the duty of good faith that
modern law reads into contractual
undertakings." Donovan, 916 F.2d at 378. Although the holding in Donovan pertained to a motion to
change venue under 28 U.S.C. ' 1404(a) (2000), we find it
persuasive. In the case at bar, there is no conceivable effect
that the 1999 forum selection clause would have on a third party.
Thus, where we have determined that the forum selection clause
was valid, we find that the circuit court erred in concluding
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that defendant could succeed on a motion to dismiss based on
forum non conveniens where she was a party to the 1999 agreement.
Accordingly, we reverse the judgment of the circuit court of
Cook County and remand this case for further proceedings
consistent with this opinion.
Reversed and remanded.
NEVILLE and MURPHY, JJ., concur.
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