NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).
2020 IL App (3d) 190691
Order filed November 9, 2020 ____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
NATIONAL ALLIANCE OF WOUND CARE, ) Appeal from the Circuit Court INC., a not-for-profit corporation, ) of the 12th Judicial Circuit, ) Will County, Illinois. Plaintiff-Appellant, ) ) v. ) Appeal No. 3-19-0691 ) Circuit No. 18-L-317 NANCY MORGAN, DONNA SARDINA, ) WOUND CARE EDUCATION INSTITUTE, ) INC., and WILD ON WOUNDS ) PRODUCTIONS, INC., ) The Honorable ) Raymond E. Rossi, Defendants-Appellees. ) Judge, Presiding. ____________________________________________________________________________
JUSTICE LYTTON delivered the judgment of the court. Justices Schmidt and Wright concurred in the judgment. ____________________________________________________________________________
ORDER
¶1 Held: Trial court erred in dismissing plaintiff’s fraud claim against director and corporation where plaintiff alleged that director created and delivered invoices to plaintiff on behalf of corporation for services corporation did not perform, and plaintiff paid invoices believing they reflected legitimate charges. Trial court properly dismissed all other counts.
¶2 Plaintiff, National Alliance for Wound Care, Inc. (NAWCO), filed a 16-count amended
complaint against defendant corporations, Wound Care Education Institute, Inc. (WCEI) and Wild on Wounds Productions, Inc. (WOW), and their officers, Nancy Morgan and Donna Sardina,
alleging common law fraud, breach of fiduciary duty, conversion, consumer fraud, conspiracy and
breach of contract. Defendants filed a motion to dismiss, which the trial court granted, dismissing
all counts of plaintiff’s complaint. Plaintiff appeals, arguing that the trial court erred in dismissing
many of its claims. We reverse the trial court’s dismissal of plaintiff’s common law fraud claims
against Morgan and WCEI, affirm the court’s dismissal of the remaining counts of plaintiff’s
complaint, and remand for further proceedings.
¶3 BACKGROUND
¶4 Plaintiff NAWCO is a Wisconsin non-profit corporation that was incorporated in 2002 by
defendants Nancy Morgan and Donna Sardina. At its inception, Morgan and Sardina were the sole
members of NAWCO’s board of directors, and Sardina was its registered agent. The purpose of
NAWCO is to provide “[e]ducation and credentials for medical personnel in wound injuries.”
NAWCO developed national examinations and certifications in wound care and related medical
fields.
¶5 Soon after incorporating NAWCO, Morgan and Sardina incorporated a for-profit
Wisconsin corporation, Wound Care Education Institute, Inc. (WCEI). Morgan and Sardina were
the sole owners and operators of WCEI. WCEI is in the business of providing training and
education to medical professionals regarding skin, wound and ostomy care and management.
WCEI provides courses to assist healthcare workers in preparing for the national certification
exams developed by NAWCO.
¶6 Morgan also incorporated an Illinois for-profit corporation, Wild about Wounds (WOW).
Morgan is the president and registered agent of WOW. WOW is owned and operated by Morgan
2 and Sardina. WOW provides a national conference and trade show for health care professionals in
the wound care field.
¶7 In 2010, Morgan hired a bookkeeper, Karen Salutric, for NAWCO. Salutric has worked in
that position continuously since 2010. Morgan and Sardina were not on NAWCO’s board of
directors as of 2016 or anytime thereafter.
¶8 In April 2016, Morgan sent an invoice to NAWCO on behalf of WCEI for meeting room
rentals from January 2012 to April 2016, totaling $243,500. NAWCO paid that invoice upon
receipt. In September 2017, Morgan sent NAWCO an invoice on behalf of WCEI for meeting
room rentals from April 2016 to December 2017 for a total of $104,000. NAWCO paid the invoice
upon receipt. In October 2017, Morgan sent an invoice to NAWCO on behalf of WCEI for
“Application processing 2002-2006” totaling $300,000. NAWCO paid that invoice upon receipt.
Finally, in November 2017, Morgan sent NAWCO, on behalf of WCEI, an invoice for
“Application processing 1/1/2007-12/31/2011” in the amount of $350,000. Upon receipt,
NAWCO paid the invoice.
¶9 In April 2018, NAWCO filed an 18-count complaint against defendants WCEI, WOW,
Morgan and Sardina. The complaint alleged fraud, negligence, conversion, and breach of fiduciary
duty. Defendant Morgan filed a motion to strike the complaint, which the other defendants joined.
The trial court granted the motion, dismissing the complaint without prejudice.
¶ 10 In November 2018, NAWCO filed a 16-count first amended complaint, alleging common-
law fraud against Morgan (count 1), WCEI (count 10), and WOW (count 12); breach of fiduciary
duty against Morgan (counts 2 and 3) and Sardina (count 7); consumer fraud against Morgan
(count 4), WCEI (count 11), and WOW (count 13); conversion against Morgan (count 5);
3 conspiracy against Sardina (counts 6, 8 and 9), and breach of contract against WCEI (counts 14-
16).
¶ 11 In count 1, NAWCO alleged that the invoices Morgan submitted on behalf of WCEI in
April 2016, September 2017, October 2017, and November 2017, to NAWCO, which were
attached to the complaint as Exhibits A through D, were fraudulent because they contained charges
for work never performed by WCEI and/or work for which NAWCO had already paid WCEI.
NAWCO alleged:
“All of the above invoices, attached as Exhibits A-D, constitute false statements
of material fact upon which Plaintiff relied. Morgan knew the sums detailed on
Exhibits A-D were not due and owing to WCEI, but created them anyway with
knowledge of their falsity. This was done with the intent that NAWCO would rely
on these invoices and *** pay these sums over to Morgan's control. NAWCO
indeed relied on these invoices, paid them, and incurred damages as a direct and
proximate result.”
NAWCO also alleged that WOW submitted charges totaling $583,744.34 to NAWCO from 2006
to 2015, for expenses that “that have no basis and/or supporting documentation.” NAWCO alleged
that those charges were “not legitimate” because of “the utter lack of supporting documentation
for these significant charges.”
¶ 12 In counts 2 and 3, NAWCO alleged that Morgan was an “agent” and “fiduciary” of
NAWCO. In count 2, NAWCO alleged that Morgan breached her “fiduciary duty of care to
NAWCO” by submitting invoices to NAWCO that “caused the NAWCO to overpay WCEI and/or
WOW.” Count 3 alleged that Morgan breached her “fiduciary duty of loyalty to NAWCO” when
4 she “knowingly and intentionally provided invoices to NAWCO which caused the NAWCO to
overpay WCEI and/or WOW.”
¶ 13 In counts 4, 11 and 13, NAWCO alleged that Morgan, WCEI and WOW engaged in
consumer fraud by depriving NAWCO of funds. NAWCO alleged that defendants’ fraud “directly
involves consumer protection concerns because of NAWCO’s mission and objectives, as well as
WCEI’s status as a provider of continuing education to health care providers.”
¶ 14 In count 5, NAWCO alleged that Morgan committed conversion by “wrongfully
assum[ing] dominion over the NAWCO funds, not just by causing invoices to be submitted to
NAWCO from WCEI and WOW, but also directly causing NAWCO to pay those invoices by
exercising defacto [sic] authority and control over NAWCO and its personnel.” NAWCO alleged
that Morgan ordered NAWCO personnel, specifically Salutric, “to pay Exhibits A-D, thus causing
funds to be diverted from NAWCO, over which Morgan had defacto [sic] control, to WCEI and
WOW, over which she had actual ownership and control.” NAWCO alleged that Morgan’s
“actions have unlawfully taken Plaintiff’s funds which was a conversion.”
¶ 15 In counts 6, 8 and 9, NAWCO alleged conspiracy against Sardina. In count 6, NAWCO
asserted a claim of conspiracy to commit fraud, alleging that Sardina “conspired and acted in
concert with Morgan to defraud NAWCO.” In count 8, NAWCO set forth a claim for conspiracy
to commit consumer fraud, alleging that Sardina “acted in concert with and/or in agreement with
Morgan in committing *** [consumer] fraud.” Count 9 was a claim for conspiracy to commit
conversion. In that count, NAWCO alleged that Sardina “acted in concert with and/or in agreement
with Morgan in committing *** conversion.”
¶ 16 In count 7, NAWCO alleged breach of fiduciary duty against Sardina, alleging that Sardina
was an “agent” and “fiduciary” of NAWCO and that she breached her fiduciary duty of loyalty to
5 NAWCO when she “knowingly and intentionally conspired with Morgan to provide invoices to
NAWCO which caused the NAWCO to overpay WCEI and WOW.”
¶ 17 In counts 10 and 12, NAWCO alleged fraud against WCEI and WOW. In count 10,
NAWCO alleged that “Morgan and Sardina were principals of defendant WCEI, and, “[a]s such,
[d]efendant WCEI is bound by and liable for the fraudulent acts alleged above.” NAWCO alleged
that “[t]he fraudulent acts of Morgan and/or Sardina were conducted with the knowledge of and
on behalf of WCEI.” In count 12, NAWCO alleged: “At all relevant times, Defendants Morgan
and Sardina were principals of Defendant WOW. *** As such, defendant WOW is bound by and
liable for the fraudulent acts alleged above related to false invoices for amounts claimed to be
owed by NAWCO to WOW.” NAWCO also alleged that “[t]he actions of Morgan and Sardina are
imputed” to WOW.
¶ 18 In counts 14 through 16, NAWCO alleged breach of contract against WCEI. In count 14,
NAWCO alleged: “On or about 2017, an agreement arose between WCEI and NAWCO whereby
NAWCO agreed to handle the processing of certain applications.” NAWCO further alleged that
“[t]he agreement called for NAWCO to be paid $30 per application.” NAWCO alleged that it
processed 1806 applications in 2017, pursuant to its agreement with WCEI, and demanded
payment from WCEI, but WCEI refused to pay. As a result, NAWCO alleged that WCEI breached
the agreement and owed NAWCO $54,180. In count 15, NAWCO alleged that “[o]n or about
2002, an express agreement was formed between NAWCO and WCEI whereby NAWCO agreed
to pay WCEI for the processing of certain applications” at a cost of “$30 per application.”
NAWCO alleged that WCEI breached that agreement by submitting exhibits A and B, which
contained charges for applications that exceeded the number of applications processed by
NAWCO for the time periods indicated. In count 16, NAWCO alleged that “[a]t some time after
6 WCEI’s incorporation, an agreement was formed whereby NAWCO agreed to reimburse WCEI
for actual charges incurred by WCEI in connection with the cost of room charges and other charges
related to educational programs.” NAWCO alleged that exhibits C and D “constitute over billing
and a breach of WCEI’s agreement with NAWCO.”
¶ 19 Defendants filed a motion to dismiss NAWCO’s first amended complaint. The trial court
granted the motion, entering an order dismissing counts 2 to 13 with prejudice and counts 1, 14,
15 and 16 without prejudice but ordering NAWCO to obtain court approval before refiling count
1. The court further ordered that any amended complaint be limited to 50 paragraphs.
¶ 20 Thereafter, NAWCO filed a second amended complaint. Counts 14 and 15 alleged breach
of contract against WCEI. Defendants filed a motion to dismiss, which the trial court granted,
dismissing the breach of contract counts with prejudice. NAWCO sought leave to file a third
amended complaint to add an unjust enrichment claim but later withdrew that request.
¶ 21 ANALYSIS
¶ 22 NAWCO appeals the trial court’s dismissal of its first amended complaint. Specifically,
NAWCO alleges that the trial court erred in dismissing the counts alleging common law fraud
(counts 1, 10 and 12), breach of fiduciary duty (counts 2, 3 and 7), conversion (count 5), conspiracy
(counts 6 and 9) and breach of contract (count 14).
¶ 23 A motion to dismiss filed pursuant to section 2-615 of the Code of Civil Procedure (Code)
(735 ILCS 5/2–615 (West 2020)) “attacks the legal sufficiency of a complaint; its purpose is to
raise defects apparent on the face of the pleadings.” Hartmann Realtors v. Biffar, 2014 IL App
(5th) 130543, ¶ 14. In reviewing a section 2-615 motion to dismiss, the court must determine
“whether the complaint sufficiently states a cause of action.” Jackson v. Michael Reese Hospital
& Medical Center, 294 Ill. App. 3d 1, 9 (1997). The question presented by a section 2-615 motion
7 is whether the allegations of the complaint, taking all well-pleaded facts as true and considering
them in a light most favorable to the plaintiff, are sufficient to establish a cause of action upon
which relief may be granted. Chandler v. Illinois Central R.R. Co., 207 Ill.2d 331, 348 (2003). The
complaint must be construed liberally and should only be dismissed when it appears that the
plaintiff cannot recover under any set of facts. Tedrick v. Community Resource Center, Inc., 235
Ill.2d 155, 161 (2009). However, the plaintiff must allege sufficient facts to bring a claim within a
legally recognized cause of action. Id. Our standard of review is de novo. Chandler, 207 Ill.2d at
349.
¶ 24 I. Fraud
¶ 25 The elements of common-law fraud are: (1) a false statement of material fact; (2) the
defendant knew the statement was false; (3) the defendant intended that the statement induce the
plaintiff to act; (4) the plaintiff relied upon the truth of the statement; and (5) the plaintiff suffered
damages from his reliance on the statement. Connick v. Suzuki Motor Co., Ltd., 174 Ill.2d 482, 496
(1996). A complaint for common-law fraud “must allege, with specificity and particularity, facts
from which fraud is the necessary or probable inference, including what misrepresentations were
made, when they were made, who made the misrepresentations and to whom they were made.” Id.
at 496-97. “Conclusory allegations are insufficient.” Aasonn, LLC v. Delaney, 2011 IL App (2d)
101125, ¶ 28.
¶ 26 A fraud claim can be based on false representations that the defendant completed certain
tasks. See id. ¶ 32. Invoices themselves constitute misrepresentations of fact where they contain
charges for work not actually performed or items not actually provided by the defendant to the
plaintiff. See id. ¶ 31; Calvetti v. Antcliff, 346 F.Supp. 2d 92, 101 (D.C. 2004); Northern Indiana
8 Steel Supply Co. v. Cozzi, 727 F.Supp. 393, 396 (N.D. Ill. 1989); Braselton Bros., Inc. v. Better
Maid Dairy Products, Inc., 150 S.E.2d 620, 622 (Ga. 1966).
¶ 27 In Cozzi, the court held that the plaintiff stated a cause of action for common-law fraud
under Illinois law based on the following alleged facts:
“Defendants knowingly made a false statement of material fact when invoices were
submitted to NISSCO claiming that the defendants had delivered 2,000 gross tons
of black clips to Burns Baling. The very purpose of these invoices was to induce
NISSCO to rely on the invoices and issue payment for materials which were not
received. NISSCO relied on these invoices and issued checks to the defendants in
the amount of $154,759.90. Plaintiff’s reliance was justified, as these invoices
correlated to weight tickets and purchase contracts that created the appearance that
a legitimate, actual delivery of materials had occurred. NISSCO sustained damage,
as it paid for materials it never received.” Cozzi, 727 F. Supp. at 396.
“Corporations are intangible creations.” Franklin Life Insurance Co. v. People ex rel.
Yancey, 103 Ill. App. 554, 559 (1902). “They act only through their living representatives.” Id.
“What these representatives do in the transaction of the business of the corporation the corporation,
in law, is held to have done.” Id. Corporations can be held liable for the acts of their agents
performed within the scope of their agency. See McNerney v. Allamuradov, 2017 IL App (1st)
153515, ¶ 75. A claim for vicarious liability of a corporate principal should not be dismissed where
the plaintiff fails to specifically allege that an agent acted in the scope of his agency if a reasonable
inference can be drawn from the well-pleaded facts that the agent was so engaged. See Gregor by
Gregor v. Kleiser, 111 Ill. App. 3d 333, 338 (1982).
9 ¶ 28 When a cause of action is based on vicarious liability, a claim against the principal
corporation fails if the claim against the agent fails. See Billstrom v. Triple Tread Tire Co., 220
Ill. App. 550, 553 (1921). “[T]he dismissal of an agent generally compels dismissal of any
vicarious liability claim against the principal.” DeLuna v. Treister, 185 Ill. 2d 565, 581 (1999)
(citing Restatement (Second) of Judgments § 51 (1982)).
¶ 29 A. Fraud claim against Morgan
¶ 30 Here, NAWCO alleged that four invoices submitted by Morgan contained false statements
in that the sums detailed on the invoices were “not due and owing to WCEI.” NAWCO alleged
that the first invoice, which reflected an amount due of $350,000 for applications WCEI allegedly
processed from 2007 to 2011, was false because NAWCO had already paid for the processing of
those applications. With respect to the second invoice containing application-processing fees for
10,000 applications from 2002 to 2006, NAWCO alleged that the charges contained therein were
false because (1) the total applications processed by WCEI during those years totaled only 2749,
and (2) NAWCO already paid WCEI for the processing of those applications. NAWCO alleged
that the third and fourth invoices, which contained room rental charges from 2012 to 2017, were
also false because they did not reflect the amounts actually charged WCEI but contained charges
that were greatly inflated. NAWCO sufficiently alleged that the invoices themselves constituted
false representations because they contained charges for services that WCEI never performed and
had no right to collect from NAWCO. See Delaney, 2011 IL App (2d) 101125, ¶ 31; Calvetti, 346
F.Supp. 2d at 101; Cozzi, 727 F.Supp. at 396; Braselton Bros., Inc, 150 S.E.2d at 622.
¶ 31 NAWCO further alleged that (1) Morgan had knowledge of the falsity of the invoices; (2)
Morgan created and sent the invoices to NAWCO “with the intent that NAWCO would rely on
them” and pay them; (3) NAWCO relied on the invoices and paid them; and (4) NAWCO “incurred
10 damages as a direct and proximate result.” These allegations were sufficient to state a cause of
action for fraud against Morgan. See Cozzi, 727 F. Supp. at 396. Thus, the trial court erred in
dismissing this count with respect to the four invoices Morgan sent on behalf of WCEI.
¶ 32 With respect to the allegedly fraudulent charges Morgan submitted on behalf of WOW,
NAWCO failed to state a cause of action for fraud. NAWCO alleged that the charges were “not
legitimate” because they were submitted without “supporting documentation.” However, unlike
the invoices from WCEI, NAWCO failed to allege that WOW’s charges consisted of false
statements of material fact. Absent such an allegation, NAWCO failed to state a claim for fraud
for the charges Morgan submitted to NAWCO on behalf of WOW. See Delaney, 2011 IL App
(2d) 101125, ¶¶ 31-32.
¶ 33 B. Fraud claim against WCEI
¶ 34 In count 10, NAWCO alleged that Morgan is a “principal” of WCEI and, therefore,
WCEI is responsible for her fraudulent acts. NAWCO further alleged that Morgan committed the
allegedly fraudulent acts set forth in count 1 on behalf of WCEI and with WCEI’s knowledge. In
other paragraphs of its complaint, NAWCO alleged that Morgan was “in control of how billing
was performed” and “responsible for directing the billing” of WCEI. However, NAWCO failed to
allege that Morgan committed the allegedly fraudulent acts in the scope of her agency, a
requirement for establishing vicarious liability against WCEI. See McNerney, 2017 IL App (1st)
153515, ¶ 75.
¶ 35 Nevertheless, NAWCO alleged that Morgan was “in control of” and “responsible for”
WCEI’s billing. Therefore, a reasonable inference can be drawn from the facts NAWCO pleaded
that Morgan was acting in the scope of her agency with WCEI when she sent the allegedly
fraudulent invoices. Thus, the trial court erred in dismissing this count. See Kleiser, 111 Ill. App.
11 3d at 338 (court should not dismiss vicarious liability claim against principal for plaintiff’s failure
to allege that agent was acting in the scope of his agency where reasonable inference can be drawn
from facts that he was so acting).
¶ 36 C. Fraud claim against WOW
¶ 37 In count 12, NAWCO alleged that Morgan is an agent of WOW and committed allegedly
fraudulent acts on behalf of WOW. As set forth above, NAWCO’s allegations against Morgan
with respect to the charges she submitted on behalf of WOW were insufficient, as a matter of law,
to state a claim for fraud. Because NAWCO failed to state a claim for fraud against Morgan with
respect to WOW’s charges, NAWCO’s fraud claim against WOW, based on Morgan’s actions,
likewise fails. See DeLuna, 185 Ill. 2d at 581 (dismissal of claim against agent compels dismissal
of vicarious liability claim against principal). The trial court properly dismissed this count.
¶ 38 II. Breach of fiduciary duty
¶ 39 To state a claim for breach of fiduciary duty, the plaintiff must allege the following: “(1)
that a fiduciary duty exists; (2) that the fiduciary duty was breached; and (3) that such breach
proximately caused the injury of which the party complains.” Lawler v. North American Corp. of
Illinois, 2012 IL 112530, ¶ 69.
¶ 40 A fiduciary duty may arise as a matter of law from a particular relationship. Martin v. State
Farm Mutual Automobile Insurance Co., 348 Ill. App. 3d 846, 850 (2004). The existence and
scope of the fiduciary relationship duty an individual owes to a corporation depends on the status
of the individual claimed to owe the duty. See e.g. Veco Corp. v. Babcock, 243 Ill. App. 3d 153,
160-61 (1993) (contrasting fiduciary duty owed by an employee with that of an officer). A
fiduciary relationship may exist between a corporation and its employee. See Advantage Marketing
Group v. Keane, 2019 IL App (1st) 181126, ¶¶ 27-33. Corporate officers and directors owe a
12 fiduciary duty of loyalty to their corporations. See Elleby v. Forest Alarm Service, Inc., 2020 IL
App (1st) 191597, ¶ 43; Illinois Non-Profit Risk Management Ass’n v. Human Service Center of
Southern Metro-East, 378 Ill. App. 3d 713, 727 (2008). However, “after a director or officer
resigns from a corporation, he or she owes no fiduciary duty to that corporation.” Hagshenas v.
Gaylord, 199 Ill. App. 3d 60, 68 (1990).
¶ 41 A. Breach of fiduciary duty against Morgan
¶ 42 Here, NAWCO did not allege that Morgan was a director, officer or employee of NAWCO
at the time of her allegedly fraudulent conduct. In its complaint, NAWCO alleged that Morgan
was a director of WCEI at one time but that she was not a director in 2016 or anytime thereafter.
Morgan sent the allegedly fraudulent invoices in 2016 and 2017. Based on the allegations of the
complaint, Morgan was not a director or officer when she created and sent the allegedly fraudulent
invoices. As such, she owed no fiduciary duty to NAWCO. See Hagshenas, 199 Ill. App. 3d at 68.
The trial court properly dismissed the breach of fiduciary claims against Morgan.
¶ 43 B. Breach of fiduciary duty against Sardina
¶ 44 Likewise, the allegations against Sardina fail to establish that she was an officer, director
or employee of NAWCO during the relevant time period. Thus, she did not owe a fiduciary duty
to NAWCO, and the trial court properly dismissed the breach of fiduciary duty claims against her.
¶ 45 III. Conversion
¶ 46 To state a claim for conversion, a plaintiff must allege: (1) an unauthorized and wrongful
assumption of control, dominion, or ownership by defendant over plaintiff’s personal property; (2)
plaintiff’s right in the property; (3) plaintiff’s right to the immediate possession of the property,
absolutely and unconditionally; and (4) a demand for possession of the property. General Motors
Corp. v. Douglass, 206 Ill. App. 3d 881, 886 (1990). “The essence of conversion is the wrongful
13 deprivation of one who has a right to the immediate possession of the object unlawfully held.” Id.
(citing In re Thebus, 108 Ill.2d 255, 259 (1985)). Conversion does not lie when the plaintiff
voluntarily, but mistakenly, transfers money to the defendant. See id. at 891; see also International
Floor Crafts, Inc. v. Adams, 578 F. Supp. 2d 231, 233-34 (D. Mass. 2008) (holding that proper
cause of action for defendant’s acceptance of check in payment of allegedly fraudulent invoices
was fraud, not conversion).
¶ 47 Here, NAWCO alleged that Morgan wrongfully assumed dominion over NAWCO’s funds
by submitting fraudulent invoices, which NAWCO paid. NAWCO further alleged that it “has an
absolute and unconditional right to the converted funds.” However, NAWCO failed to allege that
it demanded return of the funds from Morgan. Because demand for possession of the property is a
requirement of a conversion claim, NAWCO’s conversion claim fails. See Douglass, 206 Ill. App.
3d at 886. The conversion claim also fails because NAWCO sought the return of money it
voluntarily, but mistakenly, paid to WCEI and WOW. See id.; Adams, 578 F. Supp. 2d at 233-34.
The proper cause of action based on the facts NAWCO alleged is fraud, not conversion. See
Adams, 578 F. Supp. 2d at 233-34. For these reasons, the trial court properly dismissed NAWCO’s
conversion claim.
¶ 48 IV. Conspiracy claims against Sardina
¶ 49 “The elements of a civil conspiracy are: (1) a combination of two or more persons, (2) for
the purpose of accomplishing by some concerted action either an unlawful purpose or a lawful
purpose by unlawful means, (3) in the furtherance of which one of the conspirators committed an
overt tortious or unlawful act.” Fritz v. Johnston, 209 Ill.2d 302, 317 (2004) (citing Adcock v.
Brakegate, Ltd., 164 Ill.2d 54, 62-63 (1994)). To state a cause of claim for civil conspiracy, the
plaintiff must allege the existence of an agreement and a tortious act committed in furtherance of
14 that agreement. McClure v. Owens Corning Fiberglas Corp., 188 Ill.2d 102, 133 (1999). “The
agreement is ‘a necessary and important element’ of this cause of action.” Id. (quoting Adcock,
164 Ill.2d at 62). “The mere characterization of a combination of acts as a conspiracy is insufficient
to withstand a motion to dismiss.” Buckner v. Atlantic Plant Maintenance, Inc., 182 Ill.2d 12, 23
(1998).
¶ 50 “Furthermore, a conspiracy is not an independent tort.” Indeck North American Power
Fund, L.P. v. Norweb PLC, 316 Ill. App. 3d 416, 432 (2000). If a plaintiff fails to state an
independent cause of action underlying its conspiracy allegations, the plaintiff’s claim for
conspiracy also fails and should be dismissed. See id.; Pluciennik v. Vandenberg, 2018 IL App
(3d) 160726, ¶ 22.
¶ 51 A. Conspiracy to commit fraud
¶ 52 In count 6, NAWCO asserted a claim for conspiracy to commit fraud against Sardina,
alleging that she “conspired and acted in concert with Morgan to defraud NAWCO.” By using the
word “conspired,” NAWCO merely characterized Sardina’s actions as a conspiracy without
providing factual support for her claim. Such a characterization, without facts supporting it, is
insufficient to state a claim for conspiracy. See Buckner, 182 Ill.2d at 23. Additionally, NAWCO
failed to allege the existence of an agreement, a “ ‘necessary and important element’ ” of a
conspiracy claim. See McClure, 188 Ill.2d at 133 (quoting Adcock, 164 Ill.2d at 62). For these
reasons, NAWCO failed to sufficiently plead a cause of action for conspiracy to commit fraud
against Sardina, and the trial court properly dismissed that count.
¶ 53 B. Conspiracy to commit conversion
¶ 54 In count 9, NAWCO alleged that Sardina “acted in concert with and/or in agreement with
Morgan in committing *** conversion” and “undertook one or more overt tortious actions in
15 furtherance of the conspiracy to commit conversion.” These conclusory allegations are insufficient
to state a cause of action for conspiracy because NAWCO failed to allege facts supporting (1) the
existence of an “agreement” between Sardina and Morgan and (2) that Sardina knowingly and
voluntarily participated in a common scheme to commit conversion. See McClure, 188 Ill.2d at
133. Moreover, as set forth above, plaintiff failed to state a cause of action for conversion, the tort
underlying its conspiracy allegations; thus, plaintiff’s conspiracy to commit conversion claim also
fails. See Pluciennik, 2018 IL App (3d) 160726, ¶ 22; Norweb PLC, 316 Ill. App. 3d at 432. For
these reasons, the trial court properly dismissed NAWCO’s conspiracy to commit conversion
claim.
¶ 55 V. Breach of contract
¶ 56 “To properly plead a cause of action for breach of contract, a plaintiff must allege the
essential elements, which are: (1) the existence of a valid and enforceable contract; (2)
performance by the plaintiff; (3) breach of the contract by the defendant; and (4) resultant injury
to the plaintiff.” Gonzalzles v. American Express Credit Corp., 315 Ill.App.3d 199, 206 (2000).
Furthermore, “allegations demonstrating the existence of a contract must contain facts indicating
an offer, acceptance and consideration.” Wait v. First Midwest Bank/Danville, 142 Ill. App. 3d
703, 706 (1986). A broad and general allegation that a contract exists without supporting facts is
a legal conclusion, which cannot serve as an essential element of a breach of contract claim. See
id.; McErlean v. Union National Bank of Chicago, 90 Ill. App. 3d 1141, 1147 (1980). To allege
that a contract “was entered” is to state a mere legal conclusion that should be disregarded by the
trial court in ruling on a motion to dismiss. See Wait, 142 Ill. App. 3d at 706-07.
¶ 57 Here, NAWCO alleged that “[o]n or about 2017, an agreement arose between WCEI and
NAWCO.” However, NAWCO failed to allege any facts indicating an offer, acceptance and
16 consideration with respect to the alleged “agreement” that “arose” between WCEI and NAWCO.
Plaintiff’s allegation that “an agreement arose” is a mere conclusion and insufficient to establish
the existence of a contract necessary for plaintiff’s breach of contract claim. See Wait, 142 Ill.
App. 3d at 706; McErlean, 90 Ill. App. 3d at 1147. The trial court properly dismissed NAWCO’s
breach of contract action. See Wait, 142 Ill. App. 3d at 706-07.
¶ 58 CONCLUSION
¶ 59 The judgment of the circuit court of Will County is affirmed in part and reversed and
remanded in part.
¶ 60 Affirmed in part; reversed and remanded in part.