FIRST DIVISION
February 28, 2005

Nos. 1-03-2942 & 1-03-3609 cons.

JUSTICE GORDON delivered the opinion of the court:

Plaintiffs Talmitch Jackson and Michael Byrne are disabled Chicago police officers and members of the Chicago Fraternal Order of Police Lodge #7 (the FOP), which is the exclusive collective bargaining representative for all sworn police officers. Plaintiffs brought this class action to impose a constructive trust on certain funds that were collected as part of a fundraising campaign in Illinois on behalf of disabled Chicago police officers and families of Chicago police officers killed in the line of duty. Plaintiffs alleged that Callan Publishing, Inc. (Callan), Safety Publications, Inc. (Safety), Safety's officers, directors and some of its retained professional solicitors, the FOP and some of its officers had misused, misapplied and misappropriated the donations. The circuit court dismissed the action as to defendants Callan, Safety, and Safety's coowners/officers/directors Adam Herdman and Arthur Olivera on the grounds that those defendants owed plaintiffs no common law fiduciary duty and, even if a statutory duty existed pursuant to the Solicitation for Charity Act (Act) (225 ILCS 460/1 et seq. (West 2002)), plaintiffs would not be in a position to pursue an action based on a breach of that duty, as the Attorney General had the exclusive authority to maintain such an action. The remaining defendants, including the FOP, were not dismissed and are not party to this appeal. Plaintiffs now appeal. For the reasons that follow, we reverse and remand.

On March 28, 2003, plaintiffs filed a complaint which generally alleged "negligent administration, misuse, mishandling, and inappropriate disbursement of millions of dollars of donations collected from the public." The specific allegations in the complaint are summarized as follows. In or about June of 2000, the FOP entered into a contract with Callan to solicit and collect funds for its members. The contract gave Callan the authority to subcontract the fundraising activity to other entities, and Callan hired Safety to perform some of the fundraising. When soliciting public donations on behalf of the FOP for disabled officers, officers killed in the line of duty, and their wives, widows and families, Callan and Safety did not inform the public that their fee amounted to approximately 78% of the donations so that only 22% would go to the FOP or police officers and their families. For the year 2001, Safety reported raising $381,981.18 on behalf of the FOP, and charged fees and commissions of $297,945.36; for the year 2002, Safety reported raising $179,423.00 on behalf of the FOP, and charged fees and commissions of $139,949.94; Callan and Safety raised additional funds which were not reported to the State of Illinois as required by statute; and Safety utilized persons with criminal records, including defendants Triveri and Koronakos, to solicit donations from the public. Plaintiffs claimed that the public relied on defendants' representations and gave donations expecting that all or most of the funds would be used for the benefit of disabled officers, officers killed in the line of duty, and their wives, widows and families. Plaintiffs sought, in pertinent part, a ruling that defendants were not entitled to compensation for their fundraising activities, an accounting of collected funds, a formation of a constructive charitable trust from a portion of the proceeds for the benefit of the disabled Chicago police officers of the FOP and/or money damages.

We note that in the FOP-Callan contract, which was attached to the complaint and is part of the record on appeal, the FOP represented that it was a membership and labor organization serving its members, not a charitable organization, and that neither the FOP nor the fundraising program was organized or operated as or for a charitable, benevolent, philanthropic, patriotic or eleemosynary⁽¹⁾ organization or purpose. The contract used the term "sponsorship revenue" for the gross funds raised and the term "royalty payments" for the amounts due to the FOP under the contract. Callan was to pay the FOP "royalty payments" in the amount of 22% of collected "sponsorship revenue" on a weekly basis. Callan was to keep the remaining 78% of collected "sponsorship revenue." The contract further provided that Callan was an independent company and not in any manner an employee or agent of the FOP and, similarly, no persons or entities performing services in connection with the "sponsorship" program were agents or employees of the FOP.

Callan moved to dismiss the complaint on the grounds that it involved substantially the same parties, was based on many of the same factual allegations and sought virtually identical relief as a pending action filed by the Attorney General of Illinois (the AG action) prior to the commencement of this action. Callan asserted that the instant action was duplicative of the AG action and therefore dismissible under section 2-619(a)(3) of the Code of Civil Procedure (the Code) (735 ILCS 5/2-619(a)(3) (West 2002)) and further asserted that the Act preempted plaintiffs' common law claims. Callan also asserted that even if plaintiffs' claims were not barred by the ongoing AG action and preempted by the Act, plaintiffs failed to plead any facts showing that they had any relationship with Callan, let alone a fiduciary relationship that would give rise to a duty.

The record discloses that the AG action was filed in November of 2002, against the same defendants, with the exception that the FOP and its officers were not joined.⁽²⁾ The AG action was brought pursuant to both the Act and the common law. The AG complaint alleged, in essence, that Callan, Safety and Safety's co-owners/officers/directors Herdman and Olivera engaged in unlawful charitable fundraising practices on behalf of the FOP and others in that they failed to meet the Act's registration and reporting requirements; Callan violated the act by subcontracting the fundrasing operations to Safety; and Safety violated the Act by employing convicted felons Triveri and Koronakos to solicit charitable contributions. The AG complaint further alleged that the foregoing conduct irreparably frustrated the ability of the FOP and the Attorney General to monitor the solicitation campaigns, and substantial sums of charitable monies solicited and collected by the defendants were unaccounted for and their uses were unknown. The AG action sought, in pertinent part, a ruling that the defendants in that action were not entitled to compensation for their fundraising activities, an accounting of collected funds, and a formation of a constructive trust for the benefit of charity and the people of Illinois. A copy of the complaint in the AG action is part of the record on appeal and indicates that it was filed on November 14, 2002. There are also references in the record to another action filed by the Attorney General on November 8, 2002 (the AG-Callan action), which named Callan as a defendant, as well as other entities and individuals not party to the action below. Although a copy of the complaint in that action was apparently included as an exhibit to Callan's motion to dismiss, it is missing from the record on appeal.

According to an affidavit filed below by one of plaintiffs' attorneys, plaintiffs filed a petition to intervene in the AG action on March 18, 2003. The record reflects that plaintiffs also attempted to intervene in the AG-Callan action. Again, although a number of exhibits pertaining to the interventions were apparently attached to the pleadings below, they too are missing from the record on appeal. According to the foregoing affidavit, the trial judge in the AG action ruled that plaintiffs could intervene, but could not add new defendants or new class members, allege new causes of action or seek a constructive trust for the benefit of the disabled Chicago police officers of the FOP, and plaintiffs withdrew the petition to intervene because the ruling eviscerated their class action.

In ruling on Callan's motion to dismiss in the instant action, the circuit court noted that the complaint asserted no breach of contract claims, but purported to assert only a claim of breach of a fiduciary duty. Plaintiffs did not then and do not now challenge that characterization. The court dismissed the action against Callan partly pursuant to section 2-615 on the grounds that no common law fiduciary relationship between Callan and plaintiffs had been established by the pleadings, and partly pursuant to section 2-619 on the grounds that plaintiffs had no standing to bring an action for a breach of statutory duty imposed by the Act because the Attorney General had the exclusive authority to enforce the Act's provisions. The court did not reach the argument that plaintiffs' action be dismissed pursuant to section 2-619(a)(3) as duplicative of the AG action.

Subsequently, defendants Safety, Herdman and Olivera jointly filed their motion to dismiss, which the court granted for the same reasons it granted Callan's motion. This appeal followed. The parties informed this court that after the action below was dismissed as to Callan and Safety, consent decrees were entered in the AG action and the AG-Callan action.

ANALYSIS

Plaintiffs contend that they properly brought the common law action below and properly sought the equitable remedy of a constructive trust with respect to the charitable contributions defendants solicited and collected from the public. Plaintiffs further assert that they have a beneficial interest in the trust created by defendants for the benefit of disabled Chicago police officers and, therefore, the right to protect that interest. The essence of plaintiffs' argument is that their action is based on a common law fiduciary relationship and/or unjust enrichment and, therefore, not preempted by the Act.

As noted, the circuit court dismissed the action pursuant to section 2-615 for failure to state a cause of action because no facts were alleged establishing a common law fiduciary relationship and pursuant to section 2-619 on the ground that plaintiffs had no standing to pursue a breach of statutory duty imposed by the Act. A section 2-615 motion to dismiss attacks only the legal sufficiency of the complaint by alleging defects appearing on its face and does not raise affirmative factual defenses. Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469, 484, 639 N.E.2d 1282, 1289 (1994). Such a motion should be granted if the complaint does not allege sufficient facts to state a cause of action. Bianchi v. Savino Del Bene International Freight Forwarders, Inc., 329 Ill. App. 3d 908, 918, 770 N.E.2d 684, 692-93 (2002). In comparison, a section 2-619 motion raises defects or defenses that negate a plaintiff's cause of action completely or refute crucial conclusions of law or conclusions of material fact unsupported by allegations of specific facts. Lawson v. City of Chicago, 278 Ill. App. 3d 628, 634, 662 N.E.2d 1377, 1382 (1996). In ruling on a section 2-619 motion to dismiss, a court may consider external submissions of the parties. Lawson, 278 Ill. App. 3d at 634, 662 N.E.2d at 1382. In either event, the review on appeal is generally de novo. Unterschuetz v. City of Chicago, 346 Ill. App. 3d 65, 68, 803 N.E.2d 988, 991 (2004).

The central issues here are whether plaintiffs' complaint alleged a legally cognizable wrong predicated on a fiduciary relationship against defendants Callan and Safety, and whether plaintiffs have the standing to complain. Plaintiffs first contend that the circuit court erred in dismissing the common law claims on section 2-615 grounds for failure to allege any facts tending to establish a common law fiduciary relationship between them and defendants. Plaintiffs argue that a common law fiduciary relationship was created when Callan, Safety and the FOP came into possession of the funds donated by the public for the benefit of disabled Chicago police officers and families of Chicago police officers killed in the line of duty, thereby becoming trustees of said funds with the attendant duty to maintain the trust in good faith for the beneficiaries-plaintiffs. Plaintiffs do not elaborate any further as to the mechanism by which the trust was created for their benefit, with the FOP, Callan and Safety as co-trustees. The parties do not dispute the existence of a fiduciary relationship between the FOP and plaintiffs, as they were members of that fraternal organization. However, as noted, this appeal is concerned with whether plaintiffs may maintain their action against Callan, retained as an independent contractor by the FOP, and Safety, Callan's sub-contractor.

Plaintiffs contend that the law of trusts recognizes the wrong, their standing to complain and the remedy sought. A trust is widely defined as " 'a fiduciary relationship with respect to property, subjecting the person by whom the title to the property is held to equitable duties to deal with the property for the benefit of another person, which arises as a result of a manifestation of an intention to create it.' " (Emphasis omitted.) Eychaner v. Gross, 202 Ill. 2d 228, 253, 779 N.E.2d 1115, 1131 (2002), quoting Restatement (Second) of Trusts