No. 2--04--0919

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT

JUSTICE CALLUM delivered the opinion of the court:

I. INTRODUCTION

Plaintiff, Theresa Landers-Scelfo, appeals from the dismissal with prejudice of those countsof her second amended complaint that sought damages against Synergy PEO, LLC (d/b/a TheSynergy Plan and Synergy), for commissions on sales she made as an account executive for CorporateOffice Systems, Inc. (COS), and for attorney fees associated with her attempt to recover thosecommissions. The complaint laid out three theories of recovery: (1) a partnership or joint venturebetween COS and Synergy had been plaintiff's employer, and Synergy was liable to her in its capacityas a member of the joint venture or partnership; (2) Synergy was her "employer," as the Illinois WagePayment and Collection Act (Wage Collection Act) (820 ILCS 115/1 et seq. (West 2002)) uses thatterm, and therefore was liable to her for all "wages," including commissions; and (3) plaintiff madea proper demand on Synergy for the payment of the compensation and therefore was entitled to thepayment of her attorney fees incurred in collecting the compensation under the Attorneys Fees inWage Actions Act (Fees Act) (705 ILCS 225/0.01 et seq. (West 2002)).

Plaintiff contends that the court erred in ruling that she had failed to plead that Synergy washer employer under the Wage Collection Act, the Fees Act, and as a member of a partnership or jointventure with COS. With regard to her claim under the Wage Collection Act only, we agree. We holdthat, by pleading that she did work and that Synergy paid her for it, plaintiff adequately pleaded thatshe had an employment agreement with Synergy. However, we find no facts in the complaint thatsuggest that Synergy and COS were involved in a partnership or joint venture. Therefore, the courtdid not err in dismissing the count based on that theory. Further, we hold that the Fees Act appliesonly to common-law employees, and plaintiff failed to plead any facts showing a common-lawemployment relationship. Therefore, the court properly dismissed the Fees Act claim. Because thecourt erred in dismissing plaintiff's Wage Collection Act claim, we reverse the dismissal of that countagainst Synergy and remand the case to the trial court.

II. BACKGROUND

This appeal arises from plaintiff's suit against COS; Costello Johnson, president of COS;Eunita Johnson, secretary of COS; and Synergy. Plaintiff claimed that each was liable to her for morethan $105,000 in sales commissions that she earned while working as an account executive for COS. As set out in her second amended complaint, she alleged that COS hired her as an account executivein October 2001 and agreed to pay commissions to her according to a formula (the compensationformula) set out in a letter that it sent to her when it hired her. It paid commissions consistent withthe compensation formula through part of the first quarter of 2002. Then, "[s]ometime early in thefirst quarter of 2002, Synergy *** entered into a partnership or joint venture with COS, wherebyCOS and Synergy became co-employers of [plaintiff] and stated to all employees that part ofSynergy's responsibility [was] to administer all future human resource duties and ensure thecontinuation and consistent practice of honoring all previous COS employee compensation plans andprograms." From the first quarter of 2002 until the end of the year, Synergy and COS together paidplaintiff commissions consistent with the compensation formula--an amount exceeding $450,000. InJanuary 2003, COS and Synergy stopped paying her the commissions due under the compensationformula. Plaintiff demanded payment from both COS and Synergy, but neither paid her. COS endedplaintiff's employment in June 2003, at which point her unpaid commissions exceeded $105,000. Shemade a written demand on Synergy for her unpaid compensation, to no effect.

Plaintiff attached as exhibits COS's calculations of commissions due its account executivesas of April 2003, and a printout listing each sale and the commission due on each. She also attachedseveral of her pay stubs, showing payment of commissions. The stubs listed Synergy as the"company" and COS as the "client." Finally, she attached a copy of an unsigned letter that shedescribed as the letter laying out the compensation formula, which she said COS sent to her at theoutset of her employment.

In her first count against Synergy, plaintiff alleged that, as COS's partner or joint venturer andas plaintiff's co-employer, Synergy was jointly liable with COS to her for her compensation. In thesecond count, plaintiff alleged that Synergy was liable to her as her employer under the WageCollection Act. In the third, she alleged that, because she had made a proper demand against Synergyfor her wages, it was liable to pay her reasonable attorney fees under the Fees Act.

Synergy moved under section 2--615 of the Code of Civil Procedure (Code) (735 ILCS 5/2--615 (West 2002)) to dismiss with prejudice the counts directed to it. It argued that the secondamended complaint, and also the preceding two complaints, lacked facts showing that Synergy hadan agreement with plaintiff to pay her commissions. Further, it said, plaintiff failed to allege any factssuggesting a partnership or joint venture between COS and Synergy. It suggested that, were theagreement between Synergy and COS before the court, it would be obvious that Synergy was notplaintiff's employer.

Plaintiff responded, objecting to what she argued was Synergy's improper injection of newassertions of fact into a motion under section 2--615. She asked that the court therefore treat themotion as one under section 2--619 of the Code (735 ILCS 5/2--619 (West 2002)), and asked thecourt to consider exhibits and affidavits that she had attached to the response.

Synergy replied. It argued that "[t]here must be something more than mere employer statusfor Synergy to be liable on a contract that the Plaintiff had with another party. However, that'something more than mere employer status' is missing from the Plaintiff's Complaint." Synergycontinued:

"The additional materials [submitted by plaintiff] merely confirm, as do the paycheck stubsattached to the Complaint, that Synergy did become an employer of the Plaintiff. However,*** that alone does not establish any liability on Synergy's part to the Plaintiff for obligationsundertaken by another party under a prior alleged agreement with that other party."Synergy did not attach any affidavits or other exhibits to this filing, nor did it submit any exhibits(other than copies of plaintiff's filings) with any other filing.

The court heard arguments on the motion. It noted that discovery was underway and pointedout that, despite discovery, plaintiff had not attached a copy of any contract between COS andSynergy to its filings.

The court granted the motion to dismiss with prejudice, stating that, by the parties' agreement,it was treating the motion as one under section 2--619. It ruled that plaintiff had failed to allege thatSynergy ever hired her or any other COS employee. Further, it found that plaintiff "consciously"decided not to include a copy of the agreement between COS and Synergy. It found that "[t]hecontract was for Synergy to perform duties for COS which included payroll duties for COS'semployees." Moreover, "[e]mployers exert control over employees such as hiring, firing, negotiatingcompensation, supervising, controlling and profiting from the labors of the employee." Because"[t]he plaintiff does not allege[] that her work was ever supervised or controlled by Synergy," she wasnot an employee of Synergy. It found no just reason to delay enforcement or appeal of the order. Plaintiff timely appeals this order.

III. ANALYSIS

A. Nature of Motion

Initially, we must decide what sort of order we are reviewing. The substance of the orderrequires us to treat it as dismissing the counts pursuant to section 2--615 of the Code. The trial courtprofessed to dismiss the complaint pursuant to section 2--619 of the Code, and plaintiff accepts thatcharacterization in her brief. However, Synergy was correct to label its motion as one under section2--615, and the order, despite its label, was consistent with a ruling on a section 2--615 motion.

A party moving to dismiss under section 2--619 admits the legal sufficiency of the complaint,but asserts the existence of an external defect or defense that defeats the cause of action. Nelson v.Crystal Lake Park District, 342 Ill. App. 3d 917, 920 (2003). Under section 2--615, he or she deniesthe legal sufficiency of the complaint. Bank of Northern Illinois v. Nugent, 223 Ill. App. 3d 1, 7(1991).

Synergy, in its motion to dismiss, argued that plaintiff had failed to plead facts showing anyagreement by Synergy to pay her according to the compensation formula. Although the court madean extraneous and unsupported finding of fact regarding the terms of the contract between COS andSynergy, at the heart of its decision was its holding that plaintiff had failed to plead that Synergy hadhired her or that it was her employer. Thus, both the motion and the order addressed the sufficiencyof the complaint and were properly matters that fall under section 2--615. In deciding how to classifya document, we look to its substance, not its label. See Peterson v. Randhava, 313 Ill. App. 3d 1,9 (2000) (the substance of a motion, not its title, determines how a court should treat it). Therefore,we consider the order as one dismissing the counts under section 2--615. To the extent that thecourt's order and the parties' briefs are directed to issues not relevant to a motion under section 2--615, they are premature. We limit our consideration strictly to the sufficiency of the complaint.

A motion under section 2--615 presents the question of whether the facts alleged in thecomplaint, viewed in the light most favorable to the plaintiff, are sufficient to entitle the plaintiff torelief. See Romanek v. Connelly, 324 Ill. App. 3d 393, 398 (2001). In reviewing a motion, a courtmust deem it to admit all well-pleaded facts and all the inferences that one can reasonably make fromthose facts. Romanek, 324 Ill. App. 3d at 398. "A pleading that merely paraphrases the elements ofa cause of action in conclusory terms is not sufficient" (Welsh v. Commonwealth Edison Co., 306 Ill.App. 3d 148, 155 (1999), citing Knox College v. Celotex Corp., 88 Ill. 2d 407, 423-27 (1981)); onthe other hand, a plaintiff need not set out his or her evidence in the complaint (People ex rel. Fahnerv. Carriage Way West, Inc., 88 Ill. 2d 300, 308 (1981)). Thus, a fact is well-pleaded if the plaintiffhas clearly set out the ultimate fact he or she intends to prove. See Fahner, 88 Ill. 2d at 308. Amotion to dismiss under section 2--615 raises issues of law; we therefore review the dismissal denovo. Romanek, 324 Ill. App. 3d at 398.

B. Partnership/Joint Venture Count

In her first count against Synergy, plaintiff alleged that COS and Synergy formed a partnershipor joint venture and that Synergy, as plaintiff's co-employer, was jointly liable with COS for hercompensation. We find no facts in the complaint tending to show the existence of a joint venture orpartnership. This count is inartfully drafted, but we take the gist of it to be that, early in 2002,Synergy became a partner or joint venturer in COS's business and plaintiff became an employee ofthe partnership or joint venture, making both companies liable for compensation she earned whileworking for them. The facts plaintiff alleges do not support this.

Under the Uniform Partnership Act a "partnership is an association of two or more personsto carry on as co-owners a business for profit." 805 ILCS 205/6(1) (West 2002). "[A] partnershiparises *** when the parties *** join together to carry on a venture for their common benefit, eachcontributing property or services and having a community of interest in the profits of the venture." Kennedy v. Miller, 221 Ill. App. 3d 513, 521 (1991). "Partnership legal principles govern jointventures and the only distinction of consequence between the two is that a joint venture relates to asingle enterprise or transaction, whereas a partnership relates to a general business of a particularkind." Dremco, Inc. v. South Chapel Hill Gardens, Inc., 274 Ill. App. 3d 534, 538 (1995).

The complaint is insufficient because it does not contain any allegations of fact that showindicia of the existence of a partnership or joint venture. A bald assertion that a partnership or jointventure exists is not sufficient to plead the existence of such a relationship. See Romanek, 324 Ill.App. 3d at 405. We therefore look for some sign of a venture for common benefit between COS andSynergy, and in particular for some indication of a sharing of profits. We see none. The only signof cooperation between the two was Synergy's handling of the payroll (and perhaps other humanresource functions). Nothing about that fact points to Synergy being in a partnership or joint venturewith COS as opposed to, for instance, taking a fee based on a percentage of the total payroll. ThatSynergy or COS "stated to all employees that part of Synergy's responsibility [was] to administer allfuture human resource duties and ensure the continuation and consistent practice of honoring allprevious COS employee compensation plans and programs" does not speak to whether Synergy andCOS were sharing profits or otherwise behaving in a way characteristic of a partnership or jointventure. We therefore affirm the dismissal of this count.

C. Wage Collection Act Count

Plaintiff next contends that the court erred in dismissing the count of her complaint asking forunpaid wages under the Wage Collection Act. We agree. The parties do not dispute that, for aperson to state a claim under the Wage Collection Act, he or she must plead that wages or finalcompensation is due to him or her as an employee from an employer under an employment contractor agreement. See 820 ILCS 115/2, 3, 5 (West 2002). At issue here is whether plaintiff adequatelypleaded (1) that she had an employment agreement with Synergy that required the payment ofcommissions and (2) that Synergy was her employer under the Wage Collection Act. We hold that,because an employment agreement can be entirely implicit, alleging that an entity paid a workeraccording to a demonstrable formula for work done is sufficient to raise an inference that the entityand the worker had an employment agreement that embodied the formula. Plaintiff alleged theexistence of such a pattern. Because the definition of "employer" in the Wage Collection Act isdeliberately broad, we conclude that the necessity to plead that a defendant is an employer does notadd any requirement beyond what is necessary to plead the existence of an employment agreement.⁽¹⁾ In particular, the trial court erred in concluding that plaintiff needed to plead that Synergy exercisedcontrol over her work to successfully plead that it was her employer.

We first consider what a plaintiff must allege to plead the existence of an employmentagreement. An employment agreement need not be a formally negotiated contract. A First Districtpanel, interpreting the Wage Collection Act, held that "[a]n 'agreement' is broader than a contract andrequires only a manifestation of mutual assent on the part of two or more persons; parties may enterinto an 'agreement' without the formalities and accompanying legal protections of a contract." Zabinsky v. Gelber Group, Inc., 347 Ill. App. 3d 243, 249 (2004), citing Black's Law Dictionary 35(abridged 5th ed. 1983) and Restatement (Second) of Contracts