No. 01 C 8375 Page 4

fraud,” requiring Judicial intervention. Jd, at 1355. In delineating between actionable ploys
to defraud and non-actionable unkept promises, courts identify a variety of angles from which
to view the required elements of the claim. Did the party making the promises show their
intent to defraud by engaging in an elaborate scheme of lies? HPI Health Care Services v. Mt.
Vernon Hospital, Inc., 131 II.2d 145, 545 N.E.2d 672 (1989); Bower v. Jones, 978 F.2d 1004,

1012 (7th Cir. 1992). Did the promises constitute a sales pitch that was aspirational rather

than enforceable? Speakers of Sport, Inc. v. Proserv, Inc., 178 F.3d 862, 866 (7TM Cir. 1999).

Was the claiming party justified in relying on the alleged representations? Frances vy,
Bankcard of America, 1999 WL 1289110, * 10 (“This contradiction between what he alleges
was said orally and the proposed written contract should have put him on alert.”); Desnick,
44 F.3d at 1354 (noting that the claimant was a successful professional who should have known
better),

I boils down to this question. In light of the fully integrated contract governing the
conduct between the parties, would Ilinois permit plaintiff to go forward on its claims of oral
promises of future benefits not included in the writing? We find no cases in the parties’ briefs
or in our own independent research that would support an affirmative answer.

Lastly, plaintiff is not a consumer under the Illinois Consumer Fraud Act and does not
sufficiently allege a nexus between the alleged wrongdoing and consumer protection concerns.
In contesting this finding, plaintiff presents the same arguments and caselaw as in its response
to the motion to dismiss. We note that plaintiff, in its relationship to Cendant Mobility, was
not a franchise using a franchisor’s trademarks. Rather, the agreement related to the

furnishing of referrals from one commercial enterprise to another, which the latter recognized


No. 01 C 8375 Page3

of a series of written contracts, It does not claim any breach of those written agreements by
Cendant or Cendant Mobility (Coldwell has been dismissed as any disputes with Coldwell are
to be arbitrated). None of those agreements contains any promises or representations about
the volume of referrals, any exclusivity of the relationship, or any future status as a sole (or
even “a”) principal broker. The February 25, 1998, agreement is not elaborate, but the
December 1, 1999, agreement most certainly is. There is, moreover, no allegation that the
Baird & Warner contract had expired or been terminated, and the 1999 agreement expressly
provided that it was the entire agreement and understanding concerning the subject matter,
and upon its execution and delivery any previous agreements concerning the same or similar
subject matter are cancelled.

This case illustrates the tension between contract law and torts. People are entitled to
the judicial enforcement of contracts as written, not upon one party’s view of how it should
have been written. Commercial relationships rely upon the notion that the written agreement
governs benefits and obligations. The stability of contracts is undermined when parol evidence
of oral agreements or promises of future conduct are used to redefine relationships between
parties.

Courts are accordingly wary of fraudulent promise allegations, recognizing the “risk
of turning every breach of contract suit into a fraud suit, of circumventing the limitation that
the doctrine of consideration is supposed however ineptly to place on making alt promises
legally enforceable...” J.H. Desnick, M.D. v. American Broadcasting Companies, Inc., 44
F.3d 1345, 1355 (7th Cir. 1995). But there can be circumstances in which representations

about future conduct are so egregiously false that they constitute an “elaborate artifice of



No. 01 C 8375 PageS

as not exceeding 20 per cent of its business.
For the reasons above, plaintiff's motion for reconsideration or for leave to amend its

complaint is denied.

JAMES B. MORAN

~ Senior Judge, U. S. District Court
GA - AF , 2002.


ry

“N\

Mie eae Form (0697)

United States District Court, Northern District of Illinois

N of Assigned Ji st judge il
roe Magltate Judge James B. Moran chantacsigned Judge
CASE NUMBER 01 C 8375 DATE 9/25/2002
CASE Properties Unlimited, Inc. Vs. Cendant Mobility Services et al.
TITLE

[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

of the motion being presented.]

MOTION:
Memorandum Opinion and Order
DOCKET ENTRY:
(1) oO Filed motion of [ use listing in “Motion” box above.]
(2) Oo Brief in support of motion due
Q) a Answer brief to motion due___. Reply to answer briefdue__.
(4) im Ruling/Hearingon___setfor__at
(5) aq Status hearing{held/continued to] [set for/re-set for] on setfor_ at
(6) a Pretrial conference[held/continued to] [set for/re-set for]on__—setfor__—at__.
(7) Oo Trial{set for/re-set for]on__at
(8) Oo [Bench/Jury trial] [Hearing] held/continuedto saat.
(9) a) This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OOFRCP4(m) CO) Local Rule 41.1 OFRCP41(a)(1) O FRCP41(a)(2).

(10) MH [Otherdocketentry) Enter Memorandum Opinion and Order. Plaintiff's motion for reconsideration

or for leave to amend its complaint is denied.

(11) @ (For further detail see order attached to the original minute order.]

No notices required, advised in open court.
No notices required. .
Notices mailed by judge's staff. a
Notified counsel by telephone. q iz date docket
a | Docketing to mail notices.

Mail AO 450 form. 1UNOI LIN LSIa‘s'n sockering hy intile
Copy to judge/magistrate judge. MAST

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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

PROPERTIES UNLIMITED, INC.
an Illinois corporation,

Plaintiff,

vs. No. 01 C 8375
CENDANT MOBILITY SERVICES, a
Delaware corporation, CENDANT
CORPORATION, a Delaware corporation,
and COLDWELL BANKER REAL ESTATE
CORPORATION, f/k/a Coldwell Residential
Affiliates, Inc.,

DOCKETe,

Defendants,

wee wee we we wee we we ew

MEM: PINION

On May 24, 2002, we dismissed Counts I, II, and III, all the counts then outstanding.
Plaintiff now asks us to reconsider, tendering a proposed second amended verified complaint.
We adhere to our original conclusion and deny the motion to reconsider.

The proposed complaint alleged that plaintiff became a franchisee of Coldwell Banker
Real Estate Corporation (Coldwell) in 1990 in the Gurnee, Illinois, area. A particular
attraction was the Coldwell Relocation Plan, which led to referrals of real estate brokerage
business. For a while all went well, and plaintiff renewed its franchise agreement, effective as
of January 29, 1995, and continuing until January 29, 2002. On December 17, 1997, as a result
of acquisitions and mergers, Coldwell became a subsidiary of Cendant Corporation (Cendant),
which also owned competing real estate franchise systems. This led to various meetings

between plaintiff and Coldwell representatives, Cendant representatives, and Cendant

0



No. 01 C 8375 Page2

Mobility Services Corporation (Cendant Mobility) representatives,

Cendant Mobility, a Cendant subsidiary or affiliate, operated Cendant’s referral
program. Plaintiff alleges that it was told, among other things, that Cendant Mobility had an
obligation under contract with Baird & Warner to direct all third party and pre-marketing
referrals to Baird & Warner, but the agents did not know the expiration date. They hoped,
however, to terminate it, and there would, in any event, be more referral business. Plaintiff
was also told it would have to sign a new agreement, At about the same time, at other
meetings, it was told by a Coldwell representative that it would be the only associate broker
in the area and would get approximately 25 per cent of the referrals in the area.
Representatives of all three companies also told plaintiff that once the Baird & Warner
contract expired or terminated plaintiff would be the sole principal broker in the area.
Relying upon these representations, plaintiff entered into an associate broker agreement on
February 15, 1998, with Cendant Mobility and again on December 1, 1999, On September 15,
2000, and August 6, 2001, plaintiff executed amendatory agreements. Plaintiff continued to
be told that it would become the sole principal broker in the area,

Plaintiff alleges that it never received any referrals from a referral network outlined
in a 1999 Coldwell manual, the Cendant Global/Referral Network, and received precious few
other referrals (they largely went to Baird & Warner); that there was another associate broker
in the area; and that it was never made the principal broker. When it was offered the status
of one of two principal brokers as of December 2002, it realized it had been lied to, and it
terminated its franchise relationship upon its expiration.

The central problem with plaintiff’s contentions is that it is advancing claims in the face