Spadoni v. United Airlines, Inc.

2015 IL App (1st) 150458, 47 N.E.3d 1152

• Court: Appellate Court of Illinois
• Decided: December 31, 2015
• Docket: 1-15-0458
• Status: Unpublished

Opinion

2015 IL App (1st) 150458 FIRST DIVISION December 31, 2015

No. 1-15-0458

GINA SPADONI, Individually and on Behalf of All ) Appeal from the Others Similarly Situated, ) Circuit Court of ) Cook County, Plaintiff-Appellant, ) ) v. ) No. 14 CH 11119 ) UNITED AIRLINES, INC. a Delaware Corporation ) Formerly Known as Continental Airlines Inc., ) Honorable ) Kathleen G. Kennedy, Defendant-Appellee. ) Judge Presiding.

PRESIDING JUSTICE LIU delivered the judgment of the court, with opinion. Justice Connors concurred in the judgment and opinion. Justice Harris dissented, with opinion.

OPINION

¶1 Plaintiff, Gina Spadoni, appeals from the dismissal of her complaint against defendant,

United Airlines, Inc. Plaintiff alleges that on September 21, 2013 she was a ticketed airline

passenger on a United flight from Chicago, Illinois, to Los Angeles, California. She checked one

piece of baggage, paid the applicable fee for checked baggage, and received a baggage claim tag

before boarding the plane. Upon arrival in Los Angeles, plaintiff discovered that her checked

baggage did not arrive at the same time as her flight. She later learned that her baggage was not

transported on the same flight as the one on which she traveled, but, instead, was transported on

a subsequent passenger flight. On July 3, 2014, plaintiff filed a class action lawsuit against

United for breach of contract. Subsequently, on January 15, 2015, the circuit court granted

United's motion to dismiss the complaint, with prejudice. No. 1-15-0458

¶2 On appeal, plaintiff contends that the circuit court erred in ruling, as a matter of law, that:

(1) plaintiff's claim for breach of the implied covenant of good faith and fair dealing is

preempted by the Airline Deregulation Act of 1978 (Act) (49 U.S.C. § 41713 (b)(1)), and (2)

United did not breach its Contract of Carriage with plaintiff. Because we find that Illinois courts

impose the implied covenant of good faith and fair dealing on all contracts, we hold, consistent

with recent United States Supreme Court authority, that the claim for breach of the implied

covenant is preempted by the Act. We therefore affirm the circuit court's dismissal.

¶3 BACKGROUND

¶4 A. The Complaint

¶5 In her single-count complaint, plaintiff alleged that "United's transport of passengers and

their baggage is subject to the terms and conditions of United's Contract of Carriage." Attached

to her complaint is a copy of United's 46-page Contract of Carriage (revised on July 2013).

Plaintiff alleged that United charges its domestic flight passengers a nonrefundable fee of $25 for

the first piece of checked baggage, and that "[c]hecked baggage must conform to the weight and

size requirements set forth in United's Contract of Carriage." Plaintiff further alleged that United

also "offers air freight services to individuals and entities wishing to transport cargo," and while

cargo transport "is a service United offers distinct from its transport of passengers and baggage,"

United transports the cargo along with checked baggage on passenger aircrafts. Purportedly,

United's remuneration for transporting cargo is higher than that for transporting passenger

baggage, and United will refund the fee to its cargo clients if cargo is not shipped as promised.

¶6 According to plaintiff, United has a duty, based on the terms and conditions set forth in

the Contract of Carriage, to transport each passenger's checked baggage on the same aircraft as

the passenger "unless such carriage is deemed impractical." She further alleged that it is practical

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for United to transport passengers' checked baggage on the same aircraft as the passengers, "in

place of the cargo that [is] transported on their aircraft." Instead, however, United allegedly

removes passengers' checked baggage while permitting the cargo to remain on the aircraft, or

loads the cargo in lieu of the passenger baggage, in order to meet aircraft weight restrictions

established by the Federal Aviation Administration (FAA). As a result, plaintiff asserted, United

breaches the Contract of Carriage when, while transporting cargo, it fails to carry baggage on the

same aircraft as the passengers who own the baggage. As a result of these purported breaches,

United's passengers—including plaintiff—have allegedly "suffered damages in the amount of

their checked baggage fees, the time and money spent *** locating and obtaining the delayed

baggage, and other economic damages."

¶7 Specific to her personal cause of action, plaintiff alleged that when she checked her

baggage on September 21, 2013 for her flight, she "reasonably expected that United would

transport her checked baggage on the same passenger aircraft." Despite her expectation, her

checked baggage was transported on a subsequent passenger flight. Plaintiff alleged, upon

information and belief, that prior to September 21, United had sold seats on the flight such that

the estimated aircraft weight did not exceed the maximum weight permitted by FAA regulations.

On the date of her flight, however, the weight of the aircraft approached, met, or exceeded the

FAA maximum weight threshold before departure. According to plaintiff:

"49. It was practical, possible, and reasonable to transport

Plaintiff's piece of checked baggage on the same aircraft as Plaintiff by

removing pieces of cargo from the aircraft's cargo compartment in order to

arrive at an acceptable aircraft weight.

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50. However, upon information and belief, United

preferentially shipped cargo, rather than Plaintiff's checked baggage, in the

aircraft's cargo compartment."

¶8 Plaintiff sought to represent a class of "similarly situated individuals," defined as follows:

"All Illinois residents who purchased a ticket for carriage on a

United flight, or on a flight of any predecessor corporation of United,

since September 21, 2003, who paid a checked baggage fee and whose

checked baggage was transported on an aircraft other than the aircraft on

which the resident was transported, when cargo was transported on the

passenger's aircraft and the passenger's aircraft was weight restricted."

¶9 B. The Contract of Carriage and Alleged Breach

¶ 10 The section of United's Contract of Carriage addressing passenger baggage provides, in

relevant part, as follows:

"A. General Conditions of Acceptance – Passengers may check

Baggage for carriage in the cargo compartment of the aircraft and/or may

carry Baggage on board the aircraft subject to the provisions of this rule.

[United] will accept Baggage subject to the following conditions:

*** 8) Checked Baggage will generally be carried on the same

aircraft as the Passenger unless such carriage is deemed impractical by

carrier, in which event the carrier will make arrangements to transport the

Baggage on the next flight on which space is available."

¶ 11 Plaintiff admitted in her allegations that the above provision "vests United with broad

discretion in determining whether carriage of a passenger's checked baggage on the same aircraft

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as the passenger is 'practical.' " Plaintiff alleged, however, that United has a duty to exercise this

discretion in accordance with the implied covenant of good faith and fair dealing. Plaintiff

further alleged that, upon information and belief, United has a policy of favoring cargo over

passenger baggage that is arbitrary, capricious, improper, and inconsistent with passengers'

reasonable expectations. According to plaintiff, United should, in accordance with its passengers'

reasonable expectations, remove cargo before it removes passenger baggage when the weight of

an aircraft exceeds the amount allowed under FAA regulations.

¶ 12 Plaintiff alleged that United breached its Contract of Carriage with plaintiff and other

class members when it failed to transport their baggage on the same aircrafts on which they were

passengers—something plaintiff alleged it was practical and possible for United to do—in order

to make room for more lucrative cargo. As the circuit court noted, plaintiff's one-count complaint

appears to articulate two bases for United's alleged breach: (1) a violation of the express terms of

the contract, and (2) a violation of the implied covenant of good faith and fair dealing, as applied

to the terms of the contract. First, plaintiff alleged that "United's failure to transport Plaintiff's

and the Class Members' pieces of checked baggage on the same aircraft as Plaintiff and the Class

Members, while transporting cargo on the aircraft, constitutes a breach of the Contract of

Carriage." Second, plaintiff alleged that, "United's failure to exercise its discretion to carry

Plaintiff's and the Class Members' checked baggage on the same aircraft as Plaintiff and the

Class Members, while transporting cargo on the aircraft, constitutes a breach of United's implied

duty of good faith and fair dealing under the Contract of Carriage."

¶ 13 C. The Motion to Dismiss

¶ 14 United filed a combined motion to dismiss pursuant to section 2-619.1 of the Code of

Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2014)). Under the section 2-615 portion of

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the motion, United argued that dismissal was proper because plaintiff failed to identify a

provision in the contract prohibiting United's conduct and because its conduct was in fact

expressly allowed under the contract. United also contended dismissal was proper because

plaintiff sought only remedies excluded by the contract.

¶ 15 Under the section 2-619(a)(9) portion of the motion, United argued that plaintiff's claim

based on breach of the implied covenant of good faith and fair dealing was preempted by the

Act. Specifically, United asserted that, in Illinois, the implied covenant of good faith and fair

dealing impermissibly enlarges the contractual obligations adopted by the parties in

contravention of the Act.

¶ 16 In response, plaintiff maintained that United breached its Contract of Carriage through its

policy of systematically prioritizing cargo over checked passenger baggage, despite its

contractual promise and the implied covenant of good faith and fair dealing included in every

contract in Illinois. Plaintiff characterized the checked baggage provision in United's Contract of

Carriage as vague and ambiguous, and argued that it should be construed against the drafter,

United in this case. With respect to damages permitted by the parties' agreement, plaintiff argued

that she was entitled not only to economic damages under the Contract of Carriage—including

compensation for the time and money spent locating and obtaining her baggage and obtaining

replacement items—but, additionally, should be refunded her checked baggage fee, on the theory

that United's concealment of material facts rendered the nonrefundable fee provision void.

Finally, plaintiff argued that her state law claim for breach of the implied covenant of good faith

and fair dealing should escape preemption because parties may expressly disavow the covenant

in their contracts. Accordingly, plaintiff argued that dismissal of her complaint was improper.

¶ 17 On January 15, 2015, the circuit court granted United's motion to dismiss plaintiff's

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complaint, with prejudice. With respect to the first basis for a breach of contract, the court

dismissed the complaint pursuant to section 2-615, holding that plaintiff failed to allege—and,

indeed, could not allege—that, absent application of the implied covenant of good faith and fair

dealing, United violated the express terms of the Contract of Carriage where those terms gave

United sole discretion over whether to transport passengers with their checked baggage on the

same aircraft. With respect to the second basis for a breach of contract, the court dismissed the

complaint pursuant to section 2-619, holding that plaintiff's claim against United for breach of

the implied covenant was preempted by the Act. The circuit court did not address United's

argument relating to the remedies provided by the Contract of Carriage. On February 13, 2015,

plaintiff timely appealed. Accordingly, this court has jurisdiction pursuant to Illinois Supreme

Court Rules 301 and 303 governing appeals from final judgments entered below. Ill. S. Ct. R.

301 (eff. Feb. 1, 1994); R. 303 (eff. May 30, 2008).

¶ 18 ANALYSIS

¶ 19 Our review of an order granting a motion to dismiss pursuant to either section 2-615 or

section 2-619 is de novo. Freeman v. Williamson, 383 Ill. App. 3d 933, 936 (2008).

¶ 20 "A motion to dismiss pursuant to section 2-615 of the Code [citation] attacks the

sufficiency of a complaint and raises the question of whether the complaint states a claim upon

which relief can be granted." Burton v. Airborne Express, Inc., 367 Ill. App. 3d 1026, 1029

(2006). "The proper inquiry is whether the well-pleaded facts of the complaint, taken as true and

construed in a light most favorable to the plaintiff, are sufficient to state a cause of action upon

which relief may be granted." Loman v. Freeman, 229 Ill. 2d 104, 109 (2008). A cause of action

should only be dismissed pursuant to section 2-615 where "it clearly appears that no set of facts

can be proved which would entitle the plaintiff to relief." Anixter Bros., Inc. v. Central Steel &

7 No. 1-15-0458

Wire Co., 123 Ill. App. 3d 947, 954 (1984).

¶ 21 "A motion to dismiss pursuant to section 2-619 of the Code [citation] admits the legal

sufficiency of a plaintiff's complaint but raises defects, defenses, or other affirmative matters that

appear on the complaint's face or that are established by external submissions acting to defeat the

complaint's allegations." Burton, 367 Ill. App. 3d at 1029. The question on appeal is "whether the

existence of a genuine issue of material fact should have precluded the dismissal or, absent such

an issue of fact, whether dismissal is proper as a matter of law." Kedzie & 103rd Currency

Exchange, Inc. v. Hodge, 156 Ill. 2d 112, 116-17 (1993).

¶ 22 A. Breach of the Contract's Express Terms

¶ 23 The circuit court reasonably interpreted plaintiff's complaint to allege two bases for a

breach of the Contract of Carriage by United, one without regard to application of the implied

covenant of good faith and fair dealing ("United's failure to transport Plaintiff's and the Class

Members' pieces of checked baggage on the same aircraft as Plaintiff and the Class Members,

while transporting cargo on the aircraft, constitutes a breach of the Contract of Carriage."), and

one based on a violation of the implied covenant ("United's failure to exercise its discretion to

carry Plaintiff's and the Class Members' checked baggage on the same aircraft as Plaintiff and the

Class Members, while transporting cargo on the aircraft, constitutes a breach of United's implied

duty of good faith and fair dealing under the Contract of Carriage."). Noting that Rule 23(A)(8)

of the Contract of Carriage undisputedly gives United sole discretion in deciding when it is

impractical to carry a passenger's baggage on the same aircraft as the passenger, the circuit court

concluded that plaintiff did not sufficiently allege, nor could she, that United breached the

express terms of the contract.

¶ 24 United urges us to find that plaintiff did not appeal any portion of the circuit court's

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ruling regarding breach of the express terms of the Contract of Carriage and has therefore

forfeited her ability to challenge this basis for dismissal. Plaintiff denies forfeiting any argument,

but contends that she alleged only "a single cause of action: that United breached the Contract of

Carriage by exercising its discretion in a manner inconsistent with the covenant of good faith that

is implied into the parties' agreement." Plaintiff asserts that "any contention that the trial court

dismissed a claim for breach of contract without consideration of United's duty of good faith has

no bearing on the disposition of this case because that issue was not before the trial court." In

either case, the issue of whether a breach occurred absent consideration of an implied duty is not

properly before this court. We will therefore consider only whether the circuit court properly

dismissed plaintiff's claim for breach of contract based on United's alleged violation of the

implied covenant of good faith and fair dealing.

¶ 25 B. Preemption of Claim Based on Implied Covenant

¶ 26 Plaintiff contends the circuit court erred in ruling that her claim based on United's alleged

breach of implied covenant is preempted by the Airline Deregulation Act of 1978. Section

41713(b)(1) of the Act provides that states "may not enact or enforce a law, regulation, or other

provision having the force and effect of law related to a price, route, or service of an air carrier

that may provide air transportation [under the Act]." 49 U.S.C. § 41713(b)(1). Plaintiff conceded

in the circuit court proceedings that "[t]here is no dispute that the carriage of checked baggage

relates to a price, route, or service of an air carrier, within the meaning of the [Act]'s preemption

provision." Plaintiff insists, however, that Illinois' implied covenant does not enlarge the duties

voluntarily undertaken by the parties because it can be expressly disavowed. Instead, plaintiff

contends the implied covenant serves merely as an aid for courts to construe contracts

consistently with the parties' intent. This is the primary disputed issue on appeal.

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¶ 27 The Supreme Court has held that "[t]he [Act]'s preemption clause *** stops States from

imposing their own substantive standards with respect to rates, routes, or services, but not from

affording relief to a party who claims and proves that an airline dishonored a term the airline

itself stipulated." American Airlines, Inc. v. Wolens, 513 U.S. 219, 232-33 (1995). The

distinction between what a state dictates and what an airline voluntarily undertakes thus confines

courts in breach of contract actions to enforcing the "parties' bargain, with no enlargement or

enhancement based on state laws or policies external to the agreement." Id. at 233. The Court

recently considered whether a claim based on a violation of the implied covenant of good faith

and fair dealing, as applied to contracts by state common law, is preempted by the Act. See

Northwest, Inc. v. Ginsberg, 572 U.S. __, 134 S. Ct. 1422 (2014). In Ginsberg, the plaintiff

brought suit against an airline, alleging the airline violated the Minnesota implied covenant of

good faith and fair dealing. Id. at __, 134 S. Ct. at 1427. Recognizing that there is no "uniform

understanding" among the states regarding the purpose and effect of the implied covenant, the

Court declined to impose a blanket preemption on all claims depending on its application and,

instead, held that preemption should be determined on a state-by-state basis. Id. at __, 134 S. Ct.

at 1431. The Court found the Minnesota implied covenant claim was preempted because

Minnesota does not permit contracting parties to waive the covenant in their contracts. Id. at __,

134 S. Ct. at 1432. It agreed that "a State's unwillingness to allow people to disclaim the

obligation of good faith … shows that the obligation cannot be implied, but is law imposed."

(Internal quotation marks omitted.) Id. at __, 134 S. Ct. at 1432.

¶ 28 Plaintiff argues that Ginsberg establishes a two-part test, such that the implied covenant

will only be preempted if (1) the state does not allow contracting parties to expressly disavow the

covenant, and (2) the covenant imposes external, policy-based obligations on the contracting

10 No. 1-15-0458

parties. We do not agree with this construction. The Court in Ginsberg plainly held that "[a]

State's implied covenant rules will escape pre-emption only if the law of the relevant State

permits an airline to contract around those rules *** and if an airline's agreement is governed by

the law of such a State, the airline can specify that the agreement does not incorporate the

covenant." (Emphasis added.) Id. at __, 134 S. Ct. at 1433. The Court provided an additional,

independent basis for its holding, explaining that Minnesota law does not apply the covenant to

employment contracts, such that its application in a given case depends on a state policy. Id. at

__, 134 S. Ct. at 1432. We agree with United's construction of the holding in Ginsberg: an

implied covenant claim will always be preempted if the covenant imposed by state common law

cannot be expressly disavowed; even if the implied covenant can be disavowed, the claim will

still be preempted if application of the covenant is based on a state policy.

¶ 29 Plaintiff believes that parties to a contract in Illinois may indeed expressly disavow the

implied covenant. To support this contention, she relies on an handful of appellate court

decisions (see Chemical Bank v. Paul, 244 Ill. App. 3d 772, 781 (1993); Vincent v. Doebert, 183

Ill. App. 3d 1081, 1090 (1989); Prudential Insurance Co. of America v. Van Matre, 158 Ill. App.

3d 298, 308 (1987)) reciting dictum from the 1981 opinion in Foster Enterprises, Inc. v.

Germania Federal Savings & Loan Ass'n, 97 Ill. App. 3d 22, 28 (1981), which states that "a

covenant of fair dealing and good faith is implied into every contract absent express disavowal."

(Emphasis added.) None of the sources cited by the Foster court, however, mention this

limitation on the covenant's application, 1 and the court provided no reasoning for its inclusion.

Notably, although the language itself has been repeated as a purported "rule of law" without

1 For example, although the Foster court noted that "[t]his rule has been codified in the law of sales and negotiable instruments" (Foster, 97 Ill. App. 3d at 28), the applicable section, which has not changed since the court cited it, provides that "[e]very contract or duty within the Uniform Commercial Code imposes an obligation of good faith in its performance and enforcement." 810 ILCS 5/1-304 (West 2014).

11 No. 1-15-0458

comment over the years, the parties here were unable to identify, and we have likewise been

unable to locate, a single Illinois case in which a court upheld an express disavowal of the

implied covenant. 2

¶ 30 Where our supreme court has had occasion to consider application of the covenant,

moreover, it has consistently stated that it applies to "every contract." See, e.g., Martindell v.

Lake Shore National Bank, 15 Ill. 2d 272, 286 (1958) ("[e]very contract implies good faith and

fair dealing between the parties to it"); J&B Steel Contractors, Inc. v. C. Iber & Sons, Inc., 162

Ill. 2d 265, 278 (1994) ("[t]he exception arises from duties of good faith and fair dealing implied

in every contract"); Cramer v. Insurance Exchange Agency, 174 Ill. 2d 513, 524-25 (1996)

(quoting Martindell, 15 Ill. 2d at 286). The ability of a contracting party to expressly disavow the

implied covenant of good faith and fair dealing in Illinois, thus, appears to be wholly theoretical.

Although the circuit court recited the language from Foster, it nevertheless recognized that

"[b]ecause Illinois law implies this covenant into every contract[,] the obligation is not one that

the parties voluntarily adopt." We agree.

¶ 31 Plaintiff additionally argues that—unlike Minnesota, which does not imply any similar or

analogous covenant in employment contracts—Illinois does not apply public policy to determine

whether the covenant will be implied in only certain types of contracts. As such, plaintiff urges

us to find that the covenant "merely acts as a default rule of Illinois contract law for construing

the parties' obligations under their agreement." Absent the ability to disavow the covenant,

however, we do not view its application as a mere constructional aid to determine the parties'

intent. To the contrary, it is imposed on every contracting party, regardless of their true intent.

¶ 32 In accordance with the Supreme Court's holding in Ginsberg, we find that plaintiff's

2 Plaintiff's counsel conceded at oral argument that he is aware of no Illinois case in which a party has expressly disavowed the covenant of good faith and fair dealing. 12 No. 1-15-0458

claim that United breached the Contract of Carriage, based on its alleged violation of the implied

covenant of good faith and fair dealing, is preempted by the Act. The circuit court did not err in

dismissing plaintiff's complaint with prejudice on this basis.

¶ 33 C. Alternative Grounds for Dismissal

¶ 34 United urges us to affirm the circuit court's dismissal on several alternative grounds.

Specifically, it contends that dismissal pursuant to section 2-615 was proper because plaintiff: (1)

failed to state a claim for damages recoverable under the Contract of Carriage, (2) alleged the

existence of United's policy favoring cargo and its application to her only on information and

belief, and (3) failed to allege that United acted in contravention of the reasonable expectations

of the parties. Although the issue of damages was fully briefed before the circuit court, the other

two contentions were advanced by United only as undeveloped arguments in footnotes to its

reply brief; the circuit court did not base its ruling on any of these alternative arguments. A

reviewing court may affirm dismissal on any basis present in the record, even on grounds not

ruled upon by the circuit court. Sherman v. Township High School District 214, 404 Ill. App. 3d

1101, 1109 (2010). Our supreme court has cautioned, however, that it is "inappropriate *** to

affirm the trial court's dismissal of [a] plaintiff['s] complaint with prejudice on the basis of a

correctable pleading defect not raised in the trial court." Geaslen v. Berkson, Gorov & Levin,

Ltd., 155 Ill. 2d 223, 230 (1993). See also Taylor v. Trans Acceptance Corp., 267 Ill. App. 3d

562 (1994) (declining to affirm dismissal with prejudice on grounds not specified in the

defendant's motion and not relied upon by the circuit court in its order); Cutsinger v. Cullinan,

72 Ill. App. 3d 527, 532-33 (1979) (same). Our sister court has further concluded that affirming

dismissal on such grounds is inappropriate even where the pleading deficiencies were raised by

the defendant in the circuit court but where those deficiencies did not form the basis of the circuit

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court's order. See Pease v. International Union of Operating Engineers Local 150, 208 Ill. App.

3d 863, 876-77 (2d Dist. 1991). Because we affirm as a matter of law on grounds stated in the

circuit court's order, we need not consider these alternative grounds for dismissal.

¶ 35 CONCLUSION

¶ 36 For the reasons stated, we affirm the circuit court's order dismissing the complaint.

¶ 37 Affirmed.

¶ 38 JUSTICE HARRIS, dissenting.

¶ 39 I respectfully dissent.

¶ 40 I would find that Plaintiff adequately stated a claim for breach of contract against

Defendant United Airlines. I would find Plaintiff well pleaded that United abused its discretion

and violated its contractual obligation to transport passenger baggage when it removed baggage

from flights and/or prioritized carrying cargo over baggage in order to keep cargo fees which

were refundable as opposed to checked baggage fees which were non-refundable. I would also

find Plaintiff's claim is not preempted by the Airline Deregulation Act of 1978 because it falls

within the exception enunciated in American Airlines, Inc. v. Wolens, and reaffirmed in

Northwest, Inc. v. Ginsberg. Based on this, I would reverse the circuit court's order granting

Defendant's Motion to Dismiss.

¶ 41 The circuit court erred in finding Plaintiff's complaint failed to state a cause of action for

breach of contract and dismissed the complaint pursuant to Section 2-615. 735 ILCS 5/2-615

(West 2012). When a defendant brings a motion to dismiss pursuant to Section 2-615, "[t]he

proper inquiry is whether the well-pleaded facts of the complaint, taken as true and construed in

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a light most favorable to the plaintiff, are sufficient to state a cause of action upon which relief

may be granted." Loman v. Freeman, 229 Ill. 2d 104, 109 (2008). In conducting this inquiry,

the complaint must be liberally construed in favor of the plaintiff. Anixter Bros. Inc. v. Central

Steel & Wire Co., 123 Ill. App. 3d 947, 953-954 (1984). Indeed, "a cause of action should not be

dismissed unless it clearly appears that no set of facts can be proved which would entitle the

plaintiff to relief." Id.

¶ 42 In order to state a claim for breach of contract, the plaintiff need only allege (1) the

existence of a contract, (2) plaintiff performed any obligations, (3) the defendant breached its

obligations, and (4) the plaintiff was damaged. Shubert v. Federal Exp. Corp., 306 Ill. App. 3d

1056, 1059 (1999).

¶ 43 "Illinois courts have recognized that a party who does not properly exercise contractual

discretion breaches the implied covenant of good faith and fair dealing that is in every contract."

Mid-West Energy Consultants, Inc. v. United Food & Commercial Workers Union Local 881,

329 Ill. App. 3d 519, 527 (2002). "Where a contract specifically vests one of the parties with

broad discretion in performing a term of the contract, the covenant of good faith and fair dealing

requires that the discretion be exercised 'reasonably and with proper motive, not arbitrarily,

capriciously, or in a manner inconsistent with the reasonable expectations of the parties.' " Id.

quoting Resolution Trust Corp. v. Holtzman, 248 Ill. App. 3d 105, 112 (1993).

¶ 44 On a motion to dismiss, "[a] plaintiff sustains a cause of action for breach of contract for

abuse of discretion based on a violation of the implied covenant of good faith and fair dealing by

alleging that defendant 'exercised its discretion in a manner contrary to the reasonable

expectations of the parties.' " McCleary v. Wells Fargo Securities, L.L.C., 2015 IL App (1st)

141287, ¶ 21 (2015) citing Wilson v. Career Education Corp., 729 F.3d 665, 673-676 (7th Cir.

15 No. 1-15-0458

2013). Further, alleging that a party "exercised its contractual discretion in a manner

inconsistent with the reasonable expectations of the parties to deprive [the other party] of

reasonably anticipated benefits" states a claim for relief. Id.

¶ 45 In granting Defendant's Motion to Dismiss pursuant to Section 2-615 of the Illinois Code

of Civil Procedure the circuit court found Rule 23(A)(8) of the Contract of Carriage provides

Defendant with sole discretion to deem carriage of Plaintiff's baggage on the same aircraft

impractical. However, the circuit court erred in failing to recognize that a party having sole

discretion does not allow that party to commit an abuse of that discretion. The error was further

compounded by concluding that Defendant's motivation or reasoning in exercising that discretion

is immaterial.

¶ 46 Taking all well-pled facts as true and in a light most favorable to Plaintiff, I find that the

Complaint does allege a cause of action for breach of contract. Plaintiff alleges the existence of

a contract, the Contract of Carriage, and that she performed her obligations pursuant to it by

paying the required fee. Next, she alleges that defendant has broad contractual discretion in

determining when it is and is not practical to carry checked baggage on the same flight as the

owner. Then the Complaint alleges that Defendant breached the Contract of Carriage by failing

to reasonably exercise that discretion by prioritizing transporting non-passenger cargo over

transporting passengers' checked baggage on the same flight.

¶ 47 Plaintiff further alleges that Defendant, in carrying out its obligations under the Contract

of Carriage, acted arbitrarily, capriciously, with an improper motive, and in a manner

inconsistent with the reasonable expectations of the parties. Plaintiff further alleges that it was

practical, possible, and reasonable to transport Plaintiff's checked baggage on the same aircraft

she was departing by removing cargo from the aircraft's cargo compartment in order to arrive at

16 No. 1-15-0458

an acceptable aircraft weight. Instead, according to the Complaint, United preferentially shipped

cargo, rather than Plaintiff's checked bag. The Complaint further alleges that while both

passengers and freight shippers pay Defendant a fee, Defendant does not refund the baggage fee

if the passenger's bag is not sent on the same aircraft but must refund the freight shippers fee if

the cargo is not sent as booked. Based on this, it is alleged that Defendant prioritizes the

carrying of cargo over checked baggage on the same flight as the passenger so as to reap the

profits from non-refundable passenger checked bag fees.

¶ 48 Based on this Plaintiff alleges that Defendant's decision on whether to put a passenger's

bag on the same flight is not based on practicality but on economics, i.e. what will be most

profitable for Defendant. Finally, Plaintiff alleges the reasonable expectations of all of

Defendant's passengers, including her, was that Defendant would not prioritize non-passenger

freight over passenger baggage.

¶ 49 At the pleading stage and on ruling on a motion to dismiss, these well-pled allegations

must be taken at true. Whether or not Plaintiff would be able to prove the allegations at trial

does not matter at this stage. Accepting all these well-pled allegations as true, and construing all

of their inferences in a light most favorable to the Plaintiff, I find that the Complaint does state a

cause of action for breach of contract.

¶ 50 This conclusion is further supported by the fact the contract at issue is a classic contract

of adhesion. Williams v. Illinois State Scholarship Comm'n, 139 Ill. 2d 24, 72 (1990) (adhesion

contracts are those in which the parties are in a disparate bargaining position, and one party has

no had in drafting the agreement, but rather, must "take it or leave it" as the other party has

drafted). Contractual clauses which are part of a boilerplate agreement in a contract of adhesion

have their significance greatly reduced because of the inequality in the parties' bargaining power.

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Id. at 72. A contract of adhesion is not automatically unenforceable. However, where the terms

are beyond the reasonable expectations of the adhering party or the contract is unduly oppressive

or unconscionable under applicable principles of equity, the court may refuse to enforce it. Here,

the Plaintiff well pleads her reasonable expectation that United would not prioritize non-

passenger freight over passenger baggage. The Contract of Carriage does not identify to Plaintiff

or any passenger in what circumstances defendant may deem carriage impractical thereby

depriving them of any knowledge or any meaningful choice of when or even if the baggage will

ever show up. 3

¶ 51 On the most basic level, the circuit court's finding that Defendant can exercise complete

discretion in deeming carriage impractical without regard to whether that discretion has been

abused is contrary to the well established fundamental principles of contract law. "A contract, to

be valid, must contain offer, acceptance, and consideration; to be enforceable, the agreement

must also be sufficiently definite so that its terms are reasonably certain and able to be

determined." Halloran v. Dickerson, 287 Ill. App. 3d 857, 867–68, (1997) citing Ogle v. Hotto,

273 Ill. App. 3d 313, 319 (1995). An illusory promise appears to be a promise, but on closer

examination reveals that the promisor has not promised to do anything. Papas v. City of

Chicago, 196 Ill. App. 3d 1057, 1061 (1990); Calamari and Perillo, Contracts, Section 4-17

(1977). An illusory promise is also defined as one in which the performance is optional.

Dasenbrock v. Interstate Restaurant Corp., 7 Ill. App. 3d 295, 302 (1972); Calamari and Perillo,

Contracts, Section 4-17 (1977). Either way, it is not sufficient consideration to support a

contract. See Keefe v. Allied Home Mortg. Corp., 393 Ill. App. 3d 226, 230 (2009).

¶ 52 In this case, Plaintiff (or any passenger) agrees to pay a non-refundable fee in order to

3 Even though the Contract of Carriage states "the carrier will make arrangements to transport the Baggage on the next flight on which space is available," defendant, based on its unlimited discretion, could deem carrying the baggage on the next flight impractical. 18 No. 1-15-0458

take a checked bag on a flight provided by Defendant. In exchange, Defendant agrees that

"checked baggage will generally be carried on the same aircraft as the passenger unless such

carriage is deemed impractical by carrier, in which event the carrier will make arrangements to

transport the baggage on the next flight on which space is available." The circuit court

concluded that such language grants Defendant complete discretion to determine when it is

"impractical." However, in finding that Defendant has complete discretion to determine when it

is or is not practical to take baggage without regard to whether there has been an abuse of

discretion is error. In effect the circuit court renders Defendant's promise, its consideration,

completely illusory. Defendant can deem everything and anything impractical under this

reasoning. Such an outcome runs afoul of the well established principle that "courts give effect

to all written instruments according to the ordinary, popular meaning of the terms employed

when nothing appears to show they were used in a different sense and no unreasonable or

absurd consequence will result from doing so." Collins & Burgie Co. v. Silver, 150 Ill. App.

430, 433 (1909) (emphasis added). The circuit court's conclusion creates an absurd result in that

it allows Defendant to never breach the Contract of Carriage when it fails to transport a

passenger's baggage.

¶ 53 The circuit court also erred in dismissing Plaintiff's complaint pursuant to Section 2-

619(a)(9) of the Illinois Code of Civil Procedure after finding the claim preempted by the Airline

Deregulation Act of 1978. 735 ILCS 5/2-619(a)(9) (West 2012). When ruling on the section 2–

619(a)(9) motion, the court construes the pleadings "in the light most favorable to the nonmoving

party" (Sandholm v. Kuecker, 2012 IL 111443, ¶ 55), and should only grant the motion "if the

plaintiff can prove no set of facts that would support a cause of action." Snyder v. Heidelberger,

2011 IL 111052, ¶ 8. "If the defendant meets its initial burden of establishing an affirmative

19 No. 1-15-0458

defense, the burden then shifts to the plaintiff, who must establish that the affirmative matter

asserted either is unfounded or requires the resolution of an essential element of material fact

before it is proven." Reynolds v. Jimmy John's Enterprise, LLC, 2013 IL App (4th) 120139, ¶ 37

(citations omitted).

¶ 54 When the Supreme Court had an opportunity to address pre-emption under the Airline

Deregulation Act of 1978 (ADA), the Court recognized that breach of contract claims are not

pre-empted by the ADA because the "terms and conditions airlines offer and passengers accept

are privately ordered obligations and thus do not amount to a State's 'enact[ment] or enfore[ment]

[of] any law, rule, regulation, standard, or other provision having the force and effect of law'

within the meaning of [the ADA pre-emption provision]." American Airlines, Inc. v. Wolens,

513 U.S. 219, 228-229 (1995).

¶ 55 In Northwest, Inc. v. Ginsberg, the Supreme Court was faced with whether Ginsberg's

claim for breach of the duty of good faith and fair dealing under Minnesota law was preempted

by the ADA. The Court phrased the issue in determining whether the claim was preempted as

follows: "whether [Ginsberg]'s implied covenant claim is based on a state-imposed obligation or

simply one that the parties voluntarily undertook." Ginsberg, 134 S. Ct. 1422, 1431 (2014).

Northwest argued all such claims were preempted, while Ginsberg argued that generally the

claims were not preempted. Id. Disagreeing with both parties, the Court found "the reasoning of

Wolens neither dooms nor spares all such claims." Id. The Court went on, "[o]f particular

importance here, while some States are said to use the doctrine 'to effectuate the intentions of the

parties or to protect their reasonable expectations,' other States clearly employ the doctrine to

ensure that a party does not 'violate community standards of decency, fairness, and

reasonableness.' " Id. (internal citation omitted).

20 No. 1-15-0458

¶ 56 The Ginsberg Court found that Minnesota's covenant of good faith and fair dealing was a

state imposed obligation meant to ensure that a party does not violate community standards of

decency, fairness, and reasonableness and was therefore preempted by the ADA. Id. at 1432.

The Court based its conclusion that Minnesota's good faith and fair dealing was not simply

meant to effectuate the intentions of the parties for two independent reasons: (1) Minnesota did

not allow the parties to disclaim the covenant of good faith and fair dealing and (2) "when the

application of the implied covenant depends on state policy, a breach of implied covenant claim

cannot be viewed as simply an attempt to vindicate the parties' implicit understanding of the

contract." Id. The Court found the second reason to be true because Minnesota implied the

covenant into every contract except employment contracts. Id. The Ginsberg court stated, "[t]he

exception for employment contracts is based, in significant part, on 'policy reasons' and therefore

the decision not to exempt other types of contracts must be based on a policy determination,

namely that the 'policy reasons' that support the rule for employment contracts do not apply (at

lease with the same force) in other contexts." Id. (internal citation omitted).

¶ 57 However, after analyzing and concluding that Minnesota's version of the covenant of

good faith and fair dealing was preempted by the ADA, the Court specifically rejected the

proposition that all such covenants are preempted. Id. at 1433. The airlines warned that they

would face a "baffling patchwork of rules, and the deregulatory air of the ADA would be

frustrated." Id. In rejecting this plea, the Supreme Court responded, "[a] State's implied covenant

rules will escape pre-emption only if the law of the relevant State permits an airline to contract

around those rules in its frequent flyer program agreement, and if an airline's agreement is

governed by the law of such a State, the airline can specify that the agreement does not

incorporate the covenant." Id.

21 No. 1-15-0458

¶ 58 Based on Ginsberg, the majority finds that Plaintiff's breach of contract claim is

preempted. I would find Plaintiff's claim falls into the exception first recognized in Wolens and

reaffirmed in Ginsberg. The majority's decision is contrary to law and effectively forecloses the

preemption exception recognized and reaffirmed by the Supreme Court in Ginsberg.

¶ 59 Unlike Minnesota law at issue in Ginsberg, Illinois law does not recognize an

independent cause of action for breach of implied duty of good faith and fair dealing in a

contract. 4 See Voyles v. Sandia Mortgage Corp., 196 Ill. 2d 288, 295 (2001) (listing cases where

Illinois courts have rejected attempts to recognize an independent cause of action for breach of

the implied duty of good faith and fair dealing); Northern Trust Co. v. VIII South Michigan

Associates, 276 Ill. App. 3d 355, 367 (1995) ("[a]lthough the covenant of good faith and fair

dealing is used as an aid in construing a contract, it does not form the basis of an independent tort

recognized in Illinois."); McCleary v. Wells Fargo Securities, L.L.C., 2015 IL App (1st) 141287,

¶21 (finding that a plaintiff sustains a cause of action for breach of contract for abuse of

discretion based on a violation of the implied covenant of good faith and fair dealing by alleging

a defendant exercised its discretion in a manner contrary to the reasonable expectations of the

parties).

¶ 60 Under Illinois law, the covenant of good faith and fair dealing is incorporated into every

contract, however, it is most accurately characterized as a rule of construction utilized by Illinois

courts to interpret the parties' agreement. Northern Trust Co., 276 Ill. App. 3d at 367; McCleary,

2015 IL App (1st) 141287, ¶ 19. As the court stated in Resolution Trust Corp. v. Holtzman,

"[w]hile this obligation exists in every contract in Illinois, it is essentially used as a construction

aid in determining the intent of the parties where an instrument is susceptible of two conflicting

4 The plaintiff in Ginsberg brought four claims: (1) breach of contract; (2) breach of the duty of good faith and fair dealing; (3) negligent misrepresentation; and (4) intentional misrepresentation. Ginsberg, 134 S. Ct. at 1427. Here, Plaintiff has brought one count for breach of contract. 22 No. 1-15-0458

constructions." 248 Ill. App. 3d 105, 112 (1993). Accordingly, I reject United's contention that

somehow a claim for breach of contract based on a violation of the covenant of good faith and

fair dealing somehow enlarges the contractual obligations of the parties under Illinois law.

¶ 61 The reasoning in Northern Trust, McCleary, and Holtzman that the covenant of good

faith and fair dealing is a rule of construction can be traced back at least fifty years to the Illinois

supreme court case of Martindell v. Lake Shore Nat. Bank. 15 Ill. 2d 272 (1958). In that case,

the court was confronted with a clause in a contract with each party arguing that the court should

adopt that party's respective position. The court found that pursuant to the covenant of good

faith and fair dealing implied into every contract, "where an instrument is susceptible of two

conflicting constructions, one which imputes bad faith to one of the parties and the other does

not, the latter construction should be adopted." Martindell, 15 Ill. 2d at 286. Thus, the

Martindell court construed the contested provision in a manner that did not impute bad faith on

either party. Id. at 286-287. Accordingly, under Illinois law the implied covenant of good faith

and fair dealing is meant "to effectuate the intentions of the parties or to protect their reasonable

expectations," and not meant to "impose community standards of decency, fairness, and

reasonableness." Ginsberg, 134 S. Ct. at 1431; McCleary, 2015 IL App (1st) 141287, ¶21.

¶ 62 Despite the majority's conclusion to the contrary, Illinois law expressly provides for

contracting parties to expressly disavow the covenant of good faith and fair dealing. Foster

Enterprises, Inc. v. Germania Federal Savings & Loan Ass'n, 97 Ill. App. 3d 22, 28 (1981)

("[t]here can not [sic] be any doubt that a covenant of fair dealing and good faith is implied into

every contract absent express disavow[a]l."); Chem. Bank v. Paul, 244 Ill. App. 3d 772, 781

(1993); Vincent v. Doebert, 183 Ill. App. 3d 1081, 1090 (1989); Prudential Ins. Co. of Am. v.

Van Matre, 158 Ill. App. 3d 298, 308 (1987).

23 No. 1-15-0458

¶ 63 The majority concludes that the ability to waive the implied covenant of good faith and

fair dealing in Illinois is entirely theoretical because no court has upheld an express disavowal of

the implied covenant. There may very well be good reason such a case has never been heard in

Illinois; no party has ever agreed to a contract where the implied covenant is disclaimed. As the

Supreme Court stated in Ginsberg, "[w]hile the inclusion of such a provision [disclaiming the

covenant of good faith and fair dealing] may impose transaction costs and presumably would not

enhance the attractiveness of the program, an airline can decide whether the benefits of such a

provision are worth the potential costs." Ginsberg, 134 S. Ct. at 1433. Obviously, no parties in

Illinois have ever decided the benefits of including a provision waiving the covenant is worth the

cost. When transporting a passenger's baggage, if Defendant wishes to have the ability to act

solely by means most advantageous and profitable to them without adhering to any abuse of

discretion standard, it should put such language in the Contract of Carriage.

¶ 64 Furthermore, the majority's decision finding the covenant of good faith and fair dealing

not waivable runs afoul of the doctrine of stare decisis. The doctrine of stare decisis expresses

the policy of the court to adhere to precedent and settled points of law "so that the law will not

change erratically, but will develop in a principled, intelligible fashion." People v. Colon, 225

Ill.2d 125, 145-46. The doctrine is not an inexorable command, however, and where good cause

or compelling reasons justify departing from precedent we will do so. I do not find that standard

met here and would continue with the precedent that under Illinois law the implied covenant of

good faith and fair dealing can be expressly disavowed.

¶ 65 The majority's decision is contrary to the Supreme Court decision in Ginsburg and

Illinois contract law. The implied covenant of good faith and fair dealing does not enlarge the

duties of either party, but instead is utilized by the courts of this state to effectuate the intentions

24 No. 1-15-0458

of the party or to protect their reasonable interests. Accordingly, Plaintiff's breach of contract

claim is not preempted.

¶ 66 I find Plaintiff's complaint states a cause of action for breach of contract and that it is not

preempted by the Airline Deregulation Act of 1978. Accordingly, I would reverse and remand

for further proceedings.