NO. 4-01-0144

	IN THE APPELLATE COURT

	OF ILLINOIS

	FOURTH DISTRICT

THOMAS J. POWER, Individually and on	)	Appeal from

Behalf of T.R. EQUIPMENT, INC., and	)	Circuit Court of

R.J. POWER PLUMBING AND HEATING,		)	Sangamon County

		Plaintiffs-Appellees,		)	No. 99CH134

		v.						)

ROBERT L. SMITH, CLOYCE "TURK" SMITH,					)	Honorable

		Defendant-Appellant,		)	Patrick W. Kelley,

		and						)	Judge Presiding.

CLOYCE "TURK" SMITH,				)

		Defendant.				)

_________________________________________________________________

		JUSTICE COOK delivered the opinion of the court:

		The trial court entered judgment in favor of plain

tiffs, Thomas J. Power and R.J. Power Plumbing & Heating (Power

Plumbing), and against defendant Robert L. Smith, on the basis

that Smith was guilty of fraudulent misrepresentation.  Smith

appeals.  Because we conclude that any misrepresentation was not

a misrepresentation of fact, but a mere statement of opinion, we

reverse.   

	I. BACKGROUND

		Power is the owner of Power Plumbing.  Smith previously

owned Smith Construction, which did water and sewer jobs in

California.  Smith and Power met in 1995 while Smith and Power

Plumbing were doing work on a construction project in

Taylorville.  Smith and Power entered into a verbal agreement

under which Power Plumbing bid on a number of jobs, Smith re

ceived an hourly wage for his work, and the remaining profits

were divided equally between Smith and Power.  

		Smith and Power then formed T.R. Equipment, Inc., a

subchapter S corporation, to do water and sewer jobs.  Each was a

50% shareholder.  Smith would do the work on the jobs and be paid

an hourly wage.  T.R. Equipment did not have a bonding license,

and consequently, Smith and Power agreed that Power Plumbing

would submit bids for water and sewer jobs to be performed by

T.R. Equipment.  Power Plumbing would do the administrative work

on the projects.  There was no written agreement between T.R.

Equipment and Power Plumbing, and there was some dispute as to

how profits and losses would be divided among the various enti

ties and individuals. 

		Power testified that he and Smith met at Power Plumbing

to review and discuss the bid on a job called the South Fork job. 

He and Smith reviewed and discussed the bid in detail, line item

by line item.  Smith was then to rewrite the bid so that it would

be more legible, then take it to Power Plumbing the next day to

be typed by the office manager, Debbie Aiken, and to be signed by

Power's brother, Dennis Power, the vice president of Power

Plumbing.  Smith, however, testified that he and Power discussed

the bid over the telephone and he was not aware that Power would

be out of town when the bid was typed.  

		Power testified he returned to work on the Monday

following the Friday they were awarded the South Fork job.  At

that time, Power learned the bid had been changed from the one he

had approved.  According to Power, Smith had changed several of

the line items, and the bid submitted was $207,188.90 less than the bid approved by Power.  Power immediately called Smith, who

came to his office.  According to Power, Smith admitted that he

had changed the bid, but assured Power that the job would make a

profit.  Smith said he had made the change because he was posi

tive that they could lay 300 feet of pipe per day, instead of 200

feet as previously discussed.  

		Smith testified that he and Power discussed only the

fact that the bid they had submitted was significantly lower than

any of the other bids.  The bid was $280,783.40 less than the

next lowest bid.  The bid, however, was close to the estimates

prepared by the South Fork Sanitary District engineers.  Smith

denied changing the bid for the project and denied there was any

conversation about the bid being different from that to which

Smith and Power had agreed.  Smith may have told Power that he

was sure that they could make a profit on the South Fork job on

the bid which had been submitted.

		Power testified that he relied on Smith's assurances

that the job would make a profit as it was bid; consequently,

Power did not consider withdrawing the bid, seeking legal advice

whether the bid could be withdrawn, or bringing up to the South

Fork Sanitary District the fact that the bid had been changed

without his knowledge.  

		Smith was paid $52,500 in hourly wages for working on

the South Fork job.  Smith's father, Cloyce Smith, was paid

$38,512.06, plus $29,883 for sand, for working on the South Fork

job.  Smith's cousin, Danny Vidmar, was paid $48,050 for working on the South Fork job.  

		Power's count V, the count that went to trial, charged 

Smith with fraud, in that Smith stated to Power that he had the

expertise to determine a price for the project which would cover

all expenses for the job and allow a profit, that "in reliance on

Smith's statements Power agreed to allow Smith to determine the

bid price," and that after Smith determined the bid price Smith

without the knowledge or consent of Power reduced the bid price

by approximately $200,000.  Count V alleged that Smith's state

ments were false statements of fact in that he knew he did not

have the expertise to determine a bid price, he knew the price he

determined was not sufficient, he did not intend to supervise the

project to completion, he did not intend to have the necessary

equipment, and "he intended to determine the bid price so that a

profit could not be made on the project."

		Power's theory of fraud is not entirely clear.  At some

points he appears to be accusing Smith of incompetence.  At other

points he appears to be accusing Smith of intentional harm. 

Count V alleges "false statements of fact" made by Smith, but

changing the bid is not alleged to be one of those statements. 

Count V does not contain the allegation that Power, in deciding

to go ahead with the project, relied upon Smith's assurances. 

Cf. Prime Leasing, Inc. v. Kendig, 332 Ill. App. 3d 300, 309, 773 N.E.2d 84, 92 (2002) (facts thatwhich constitute an alleged fraud must

be pleaded with specificity and particularity, including what

misrepresentations were made).      	

		Following a bench trial, the court found:

		"The testimony of Thomas Power and Debbie 

		Aiken is more credible than that presented 

		by [d]efendant.  Specifically, the [c]ourt 

		finds Robert L. Smith did change and submit 

		the bid on the South Fork job without Thomas 

		Power's knowledge.  The [c]ourt further finds 

		that Smith's subsequent statements to Power 

		that the job would still be profitable are 

		misrepresentations of fact upon which Power 

		relied in going through with the job."  

The court, concluding that Power was entitled to the benefit of

his bargain, awarded him $78,489.55 damages.  That award suggests

that the parties lost about $60,000 on the project by submitting

a bid $207,188.90 less than that to which they agreed.

	II. ANALYSIS

		To succeed on a cause of action for fraudulent misrep

resentation, plaintiffs had to prove (1) that defendant (1) made a

false statement of material fact, (2) that defendant knew was

false, (3) with the intent that the statement induce plaintiffs

to act, (4) plaintiffs relied on the statement, and (5) suffered

damages as a result.  Connick v. Suzuki Motor Co., 174 Ill. 2d 482, 496, 675 N.E.2d 584, 591 (1996).  These elements must be

proved by clear and convincing evidence (Los Amigos Supermarket, Inc. v. Metropolitan Bank & Trust Co., 306 Ill. App. 3d 115, 127, 713 N.E.2d 686, 695 (1999)), and a reviewing court will not disturb such a finding unless it is against the manifest weight

of the evidence.  In re Estate of Harms, 236 Ill. App. 3d 630, 640, 603 N.E.2d 37, 44 (1992).  Further, the trier of fact is in

a superior position to determine the credibility of the witnesses

and the weight to be given their testimony.  Aetna Insurance Co. v. Amelio Brothers Meat Co., 182 Ill. App. 3d 863, 865, 538 N.E.2d 707, 709 (1989).  The ultimate question, however, whether

the misrepresentation was one of fact, is a question of law.

	A. Fraudulent Concealment 

		On appeal, Power argues that two types of fraud are

applicable to this case, fraudulent concealment and fraudulent

misrepresentation.  The fraudulent concealment theory is based on

the fact that Smith changed the bid without Power's knowledge or

consent.  We accept the trial court's finding that Smith changed

the bid without Power's knowledge.  It is difficult to accept

Power's arguments, however, that Smith knew the price he submit

ted was not sufficient and that Smith intended to submit a bid

price such that a profit could not be made on the project. 

Although Smith and his relatives might make some money even on a

losing project, Smith would make more money on a profitable

project.  There was an incentive for Smith to submit a successful

bid, but no incentive to submit a losing bid.  Power's argument

that Smith was not concerned with a losing bid is inconsistent

with Power's argument that Smith was responsible for half of any

losses.        		

		In any event, the major problem with Power's fraudulent concealment theory is that Power, with full knowledge of the

facts, chose to go ahead with the project.  Although the trial

court found that Smith "did change and submit the bid on the

South Fork job without Thomas Power's knowledge," the trial court

also found that Power chose to go ahead with the job.

		Power argues that his choosing to go ahead did not bar

recovery, that he was allowed to perform the contract after

discovery of the fraud and still seek damages, citing Vance Pearson, Inc. v. Alexander, 86 Ill. App. 3d 1105, 408 N.E.2d 782 (1980).  In Vance Pearson, the defendant agreed to install a set of truck scales on plaintiff's farm by a certain date but did not

intend to meet that date.  The court held that the plaintiff was

not required to seek rescission after discovery of the fraud but

was allowed to stand by the contract and seek damages.  Vance Pearson, 86 Ill. App. 3d at 1112, 408 N.E.2d at 787.  In the present case, however, Power is not seeking damages from the

party with whom he contracted, the South Fork Sanitary District. 

Rather, Power is seeking damages from his business partner.  In

Vance Pearson, rescission would not have done the plaintiff any good.  The plaintiff still would have had to find someone else to

install his truck scales, and he still would have sustained

damages by not having the scales at harvest time.  In the present

case, Power certainly would not have suffered any loss if the bid

had been withdrawn.  Power would not have received any profits if

the bid had been withdrawn, but perhaps there were other projects

available on which profits would have been made.  Perhaps all the bids on the South Fork project would have been rejected if Power

Plumbing's low bid had been withdrawn and Power and Smith would

then have had the opportunity to rebid at a new bid-letting.  It

is not clear that the bid agreed to by Power and Smith, which was

so far out of line with the engineers' estimates, would have been

successful if it had been submitted.  

	B. Fraudulent Misrepresentation

		.		Power's theory of fraudulent misrepresentation is that

		once Power discovered that the bid had been changed, Smith

assured and promised Power that the job would make a profit at

the submitted bid price and that Smith represented to Power that

he had walked the streets of Tovey, where the work would be done,

and that he had personally checked the figures against his

observations.  These representations are said to constitute a

false statement of material fact.  

		Generally a mere expression of opinion will not support

an action for fraud.  Duhl v. Nash Realty, Inc., 102 Ill. App. 3d 483, 489, 429 N.E.2d 1267, 1272 (1981).  Sometimes, however, the

expression of an opinion may carry with it an implied assertion

that the speaker knows facts thatwhich justify it.  Such an assertion

is to be implied where the defendant holds himself out or is

understood as having special knowledge of the matter thatwhich is not

available to the plaintiff, so that his opinion becomes in effect

an assertion summarizing his knowledge.  "'Thus the ordinary man

is free to deal in reliance upon the opinion of an expert jeweler

as to the value of a diamond.'"  Duhl, 102 Ill. App. 3d at 490, 429 N.E.2d at 1273, quoting W. Prosser, Handbook of the Law of

Torts §109, at 726 (4th ed. 1971).  In Duhl, the court upheld a fraud count complaining about a real estate broker's opinion,

following an appraisal, of the value of certain real estate. 

Duhl, 102 Ill. App. 3d at 489, 429 N.E.2d at 1272 (distinguish- ing, however, statements as to value made by a seller).    

		Power points to language in Duhl to support his argu ment that there was a misrepresentation of fact in this case:  

		"'Wherever a party states a matter which might 

		otherwise be only an opinion but does not 

		state it as the expression of the opinion of 

		his own but as an affirmative fact material 

		to the transaction, so that the other party 

		may reasonably treat it as a fact and rely 

		upon it as such, then the statement clearly 

		becomes an affirmation of the fact within 

		the meaning of the rule against fraudulent 

		misrepresentation.  Statements of value are 

		common examples, and where made in pursuance 

		of a scheme on the part of the defendant to 

		induce plaintiff to trade with him such state-

		ments constitute fraud and deceit.'"  Duhl, 102 

		Ill. App. 3d at 489, 429 N.E.2d at 1273, 

		quoting Buttitta v. Lawrence, 346 Ill. 164, 

		173, 178 N.E. 390, 393 (1931).

		Although there is broad language in some of the cases, assurances as to future events are generally not considered

misrepresentations of fact.  People ex rel. Peters v. Murphy- Knight, 248 Ill. App. 3d 382, 387, 618 N.E.2d 459, 463 (1993).  The exceptions are limited to recognized situations such as where

a realtor appraises a house.  That was the situation in Duhl.  In Buttitta, the defendant was employed as a realtor by the plain tiffs and represented that notes given by the purchasers were

good and that he would endorse them.  The notes in fact were past

due, some were beyond the period of limitation, and the defendant

endorsed them without recourse.  Again, misrepresentations as to

something to be done in the future generally do not constitute

fraud.  In particular, statements regarding the future profit

ability of an endeavor are not statements of material fact. 

Younger v. Revelle, 78 Ill. App. 3d 1, 4, 397 N.E.2d 221, 223 (1979); Mother Earth, Ltd. v. Strawberry Camel, Ltd., 72 Ill. App. 3d 37, 48-49, 390 N.E.2d 393, 403 (1979) (although represen

tations of future income are not actionable, representations as

to past income of a business constitute statements of fact).  

		Were Smith's representations here similar to represen

tations of value made by a realtor after an appraisal?  Or were

they more similar to the representations one partner makes to

another in deciding to take on a new client or product line, that

"I think we can make money on this."  It will be a fundamental

change in the law of business relationships if businesspeople

become the guarantors of all projects they bring into the firm. 

Did Smith have special knowledge of the matter which was not available to Power?  See Duhl, 102 Ill. App. 3d at 490, 429 N.E.2d at 1273.  Power was an experienced contractor, perhaps

with more experience in management and financial aspects than

Smith had.  The evidence showed that Power participated in

calculating the bids and had very definite opinions about the bid

in this case.  Power and Smith did not stand in a relation

similar to that of purchaser of real estate and real estate

broker.  

	III. CONCLUSION

		The predictions here that the job would be profitable

clearly are not representations as to a material fact.  The

predictions that "he was positive they could lay 300 feet of pipe

a day" are more specific, but again they are only predictions. 

Power was aware of the parties' past history on rate of pipe

laying.  There is no indication that Smith's predictions were

anything more than an estimate, no indication that they were

based on any firm evidence or special knowledge on his part. 

Smith's predictions were simply his opinion, even though Power

may have relied upon them.

		For the foregoing reasons, we reverse the trial court's

judgment.

		Reversed.             

		McCULLOUGH, J., specially concurs.

		MYERSCOUGH, P.J., dissents.

		JUSTICE McCULLOUGH, specially concurring:

		I agree, the judgment of the trial court should be

reversed.  I write specially only to say I disagree that the

trial court was correct in finding the bid was changed without

Power's knowledge.

		The circuit court stated in its order "the Court finds

Robert L. Smith did change and submit the bid on the South Fork

job without Thomas Power's knowledge."  I believe the trial court

is wrong in that determination.  Smith and Power did have a

discussion concerning the particular bid, pursuant to procedures

established by the parties in regard to other transactions. 

After the discussion with Power, Smith did prepare the work

papers for the bid and did use figures lower than that discussed

with Power.  Smith then took the bid in hand-written form to

Debbie Aiken, an employee of Power Plumbing, dropped it off to

have it typed and signed by an officer or agent of Power Plumb

ing, who happened to be Dennis Power, an authorized officer of

Power Plumbing.  The bid was then returned to Robert Smith and

later submitted to the South Fork sSanitary dDistrict.

		Power testified that he told Smith that he was going to

be out of town and not be in the office the next day and after

the office manager, Debbie, typed the bid, his brother, Dennis

Power, would sign the bid on behalf of Power Plumbing.  According

to Power, when he returned to work on the Monday following the

Friday when the job was awarded, he first learned that the bid

had been changed.  Although Power argues and testifies that the bid was $207,188 less than that approved by Power, Power cannot

complain.  The final form of the bid was prepared in Power's

office, by his office manager.  His brother, the vice president,

signed the contract.  Nothing in the record indicates that Power

either did not have enough time to indicate to the South Fork

Sanitationary District that the bid was wrong or in any way complain

until after loss was incurred.

		PRESIDING JUSTICE MYERSCOUGH, dissenting:

		I respectfully dissent and would affirm the trial

court.  The relationship between Power and Smith was created

after Smith informed Power of his extensive experience bidding

and performing sewer, water, and storm drain jobs in California

and Illinois.  Smith testified the size of the jobs ranged from a

few thousand dollars to three hundred thousand dollars$300,000 and the jobs were performed for

developers and public works projects.  This specialized experi

ence did provide Smith with knowledge unavailable to Power, a

plumbing contractor, and this knowledge or expertise was a

consideration in forming the business relationship.  As such, the

trial court found that when Smith assured Power that the altered

bid would still allow the job to be profitable, Power accepted

this assurance as a fact, not an opinion.  

		The record supports the trial court's finding that Smith made a false statement of material fact, and case law

supports the trial court's finding that the profitability of the

project was not an opinion but an assertion of fact.  In Duhl, the court found that "[w]herever a party states a matter which

might otherwise be only an opinion but does not state it as the

expression of the opinion of his own but as an affirmative fact

material to the transaction, so that the other party may reason

ably treat it as a fact and rely upon it as such, then the

statement clearly becomes an affirmation of the fact within the

meaning of the rule against fraudulent misrepresentation. 

Statements of value are common examples, and where made in pursuance of a scheme on the part of the defendant to induce

plaintiff to trade with him[,] such statements constitute fraud

and deceit."  Duhl, 102 Ill. App. 3d at 489, 429 N.E.2d at 1273.  In the instant case, Smith held himself out as having special knowledge unavailable to Power and, therefore, like the real

estate agent in Duhl, Smith's assertions were fact and not opinion. 

		Further, the majority states that "Power participated

in calculating the bids and had very definite opinions about the

bid in this case."  Slip op. at 11.  I agree.  However, Power's

participation and opinions regarding this bid were of no conse

quence when, as the trial court found, Smith changed the bid

without Power's knowledge or consent.  Therefore, the trial

court's ruling was not against the manifest weight of the evi

dence, and I would affirm.