THIRD DIVISION Septembe r 5, 2007

No. 1-06- 3325

JA CK GO RE, Bene f

i ci ary of Ba nk of Ra ve ns wood ) A

ppe al f rom (n/ k/ a LaS alle Nat ional Ba nk) Tr ust No . 2 5- 759 7, and ) the C i rcui t Court JACK GORE d/b/a JMC

Real ty, Indi vi dually and ) of Coo k C oun

ty on Behal f of Al l Othe rs Sim il arly Situated, ) ) Pl ai n ti f f -A pp el l an t, ) ) v. ) No. 05 CH 3204 ) INDIANA INSURA

NCE COMPANY, an

Indiana ) Corpo ration, and OLD REP UBLIC INSURANCE ) COM PANY , a Penns ylvania Cor po ra t ion, Ind ividually and ) on Behal f of Al l Othe rs Sim il arly Situated, ) Ho no r ab le ) Mar t in S. Ag ra n, Defendan ts-Appellees. ) Judge Presidin g.
PR ESI DI NG JU STI CETH EIS de l i

v ered th e op i n i on of th e c our t: Pl ai ntif f Jack Gore (G ore) app eals f rom th e order of the c i rcui t court di sm

i ssi ng h i s thi rd
amen ded complai

nt, pur suant to section 2-615 o f the Code of Civi l Procedure ( Code) ( 735 ILCS 5/ 2- 61 5 ( We st 20 04 ) ) , in w hic h he cla imed t ha t I nd ian a I nsu r an ce Co mpa ny ( I nd ian a) an d O ld Republ ic Insuranc e Compan

y (Ol d Republ ic ) (coll ectivel

y, def endan ts) breached thei

r insurance co nt ra ct s wit h him by

violat ing t he implied dut y of go od faith a nd fair d ealing. Addit ionally, he sought a declaration that defenda nts were obliga

ted to refun

d to hi m that portion of the un

earned in surance prem

ium s attributabl

e to an unconstitutional

tax le vy . On appeal , Gore co ntends that the ci rcu i t cou rt er red i n d i sm i ss i ng hi s c om pl ai nt b ec au se

(1) he sta ted a val i d c l ai m f or brea ch of1-06-3325

2

contract based on the im

pli ed duty of good fai

th and f ai r deali ng; a nd (2) he h

as suf fi ci ently ple d several le gal theories to support a declarator y judgme nt action. For the fol

lowi ng reasons, we affir m. BACK GROUND Go re pur chas ed a ser ies o f annual pr op er t y insuranc e po licies fro m defenda nt s co ver ing the period f

rom August 1993 t o August 1998. Defen dants are i

nsuran ce compan

ie s i ncorporat ed i n oth er sta tes doi n g b us i n es s i n Il l i n oi s. Du ri n g th e rel ev an t ti me p eri od of

A ug ust 19 93 to August 1997, defen

dants, as f

oreign i nsuran ce compan

ie s, paid a tax equal to 2% of thei

r net income fr om insur ance pr emiums for t he pr ivil ege of d oing business in Illi nois ( pr ivil

ege t ax) pursuant t o sect ion 409 of the Ill in ois Insurance Code (Insurance Co de) (215 ILCS 5/409 ( West 1996) )
. In 1997, the suprem e court held that the priv

il ege tax, as then wri

tt en, was an un co nst it ut io na l vio lat io n o f t he un ifo rmit y o f t ax at io n c lau se o f t he I llino is C o nst it ut io n ( I ll. Cons t. 1970, a rt. IX, §2). Milwa

ukee Safe guard Insurance Co. v. Selcke , 179 Ill . 2d 94, 104-05, 688 N. E. 2d 6 8, 73 ( 199 7) . Fo llowing t he su pr eme co ur t ’s ho lding in Selc ke , section 409 was
ame nd ed an d d efe nd an t s w er e r eq uir ed t o pa y t he pr ivileg e t ax at a r ed uc ed r at e o f 0. 5% o f t he ir
net prem i um i nc ome . 215 IL CS 5/4 09 (W est 199 8). Go re , a nd a p ro po sed class o f simi larly situ at ed insu re ds, sue d de fendant s t o r eco ver t he
am ount o f the ex

cess pri vi le ge tax they

cl ai m to have pai d in the form of hi gher i nsuran ce premi ums . Specif

ic ally , Gore alleged that defen

dants passed the pri

vi le ge tax on to t hem

as an “un dis cl osed pass-through charge” i ncl uded i n the i nsuran ce prem ium s they pai d. Gore pursued1-06-3325

3

var iou s ca use s o f act ion in law and equ ity in the or iginal complaint and t he first and s eco nd
am en de d c om pl ai nts base d up on th

e s am e s et of al l eg ed f ac ts. The ci rcu i t cou rt dism i ss ed al l of Gore’ s pri

or com plai nts. Gore the n f i l ed a th i rd a men de d c om pl ai nt ( com pl ai nt) , i n w hi ch he as serted a c l ai m f or bre ach o f co nt ra ct base d o n defend ant s’ allege d br eac h of t he implied co venant of g oo d fait h and f ai r d ea l i n g. Th e c om

pl ai n t also i n cl uded a dec l arator

y j udgm en t cou n t i n wh i ch Gore s oug

h t a decl aration of the “

parties’ rel

evan t rights and obl

iga tions un der Ill in ois l aw.” Gore att ached to hi s compl ai nt two “exem

pla ry” i nsuran ce contracts, o ne f

rom each de f en da n t. Th e rep re se n tati v e In di an a c on tract c ov ered

th e p eri od f

rom A ug ust 29 , 19 93 , to August 29, 1994, and l

is ted the address of the prem is es covered, the type of

coverage provide d, the coverage lim

its of the pol

ic y, an d a composi

te premi um pri ce. The Old Republ

ic contract
co ve r ed t he pe r io d fr o m Au gu st 29 , 19 97 , t o Au gu st 29 , 19 98 , an d c o nt ain ed t he sa me i n f orm ati on as th e In di an a c on tra ct. A ddi

ti on al l y , b oth con tracts con tai n ed th e s am e state men t: “In return f

or t he pay me nt of the prem

ium , and sub je ct to all the terms of thi s poli cy , we agree with y ou t o pro vi

de the i nsuran ce as stated in

this policy .” Neither contract item iz ed the charges included in the p re mium price. Go re did no t at t ach a ny addit ional co nt ra ct s o r t er ms of t he i n su ra n ce cov erag e to th

e c om pl ai n t. On de fendant s’ mot ions, t he circ uit co ur t dismissed t he co mplaint w ith p re judice a nd wi thout addr

ess i ng th e i ssue of class certif i cation. Gore th

en f i l ed thi s ti mel y appe al
. AN AL YSIS Our st andard of review of a m ot ion to dismi

ss under section 2-615 is de novo
. Mid-Wes t1-06-3325

4

Energy Consul tants, Inc. v. Covenan

t Home, Inc. , 352 Ill . App. 3d 160, 161, 815 N.E. 2d 911, 913 (2004). The question we m ust address i s whether the al le gations of

the compl

ai nt, when viewed i n the l igh t most favorabl

e to plai ntif f, suf fi ci ently stated a cause of action upon wh ic h rel i ef may be gran ted. Mi d- W est Energy

Con su l tan ts , 352 Il l . Ap p. 3d a t 161, 815 N.E.2d a

t 913. The com plai nt m ust al l ege f acts i n s upport of the e sse ntial elem en ts of a caus e of action; however, plai ntif f can not rel y on con cl usi ons of f act or law un

supp orted by

f actual al l egati ons. Mid-Wes

t Energy Con su l tan ts , 35 2 I ll. A pp . 3d at 16 1, 81 5 N
. E
. 2d at 91 3. Fu rt he rmo r e, ‘a n a ct io na ble
wro ng cannot be made out merely by ch aract erizing acts as having been wrongfully done. ’ Unterschuetz v. Ci

ty of Ch ic ago , 3 46 I ll. App. 3d 6 5, 69, 803 N. E. 2d 9 88, 991 (2 004 ), quo t ing Wei dner v. Mi

dcon Corp. , 328 Il

l . Ap p. 3d 10 56, 105 9, 767 N .E.2d 815 , 819 (2 002). In order to state a clai

m f or breach of contract, a plai ntif f m ust establi

sh: (1) the exi

stence of a valid, e nfor cea ble co nt ra ct ; (2 ) p er for mance o f the co nt ra ct by the p laintiff; (3) a br eac h by the def endan t; an d (4) da mages resu l tin g f rom th e breach. Un

ter sch uetz , 346 Ill . App. 3d at 69, 803 N.E.2d at 991. Gore con ten dstha t de f en da nts br each ed the i ns ura nc e c ontr ac ts b y vi ol ati ng the duty of good f ai th a nd f ai r de al i ng i m pl i ed the rei n. Spe cif i cal l y , h e al l eg ed

tha t “by col l ec ti ng porti ons of premi ums in cl udin g the unconsti

tut iona l [pri vi le ge tax]–in

cl udin g for port ions

collected at pre19 98 lev els fo rpo licy p er io ds inc lus ive o f 19 98 an d/ o raft er 19 98 –[ de fen da nt s] br ea ch ed t he ir respectiv e duties of

good faith an

d fai r deali ng.” It is wel l establ i shed that the d

uty of g ood fa

i th an d f ai r deal i ng i s i m pli ed i n every contract. Day

an v . McDonald’s Corp. , 125 Il l . Ap p. 3d 97 2, 991, 4 66 N.E.2 d 958, 9 71 (19 84).1-06-3325

5

Its p urp ose i s to ens ure tha t pa rti esdo n ot take ad va nta geof each othe r i n a wa y tha t coul d n ot have be en co nt emplat ed a t t he t ime the c ont ra ct was dr aft ed o r d o a nything t hat will dest ro y the other pa rty’ s ri ght to rece i

ve the b enef i t of the contrac t. Cram er v. Insuran

ce Exch ange A gency , 174 Il l . 2d 513 , 523-2 4, 675 N .E.2d 897 , 903 (1 996). Dis putes in volv in g the exercise of good fai th aris e when

one party i s gi

ven broad di scre tion i n pe rf ormi ng i ts obl i gations u nde r the c ontract. Day

an , 125 Ill . App. 3d at 990, 466 N.E.2d at 971. The duty of good fai th and f ai r deali ng i s a l im itation on the e

xerci se of that dis cretion, requi

rin g the party ves

ted with di scretion to exerci se i t reasonabl

y a nd wi th proper
mo t ive , no t ar bit r ar ily, c ap r icio us ly, o rin aman ne rinc o nsis t en t wit h t he pa rt ies ’ r ea so na ble
ex pectati ons. Day an , 12 5 Il l . A pp. 3d a t 991 , 46 6 N .E.2 d a

t 972 . How ever, i

n g en era l , i t i s n ot
an i nde pen den t source of

duti es f or contractin

g parti es. Cram er , 174 Ill . 2d at 525, 675 N. E.2d at 903. Gore’s breach

of contract clai

m f ai ls for seve ral reas ons. Fi

rst, although he al

le ged that de fen da nt s “h ad co mple t e d isc r et io n in t he amo un t o f t he [ pr ivileg e t ax ] , if an y, t o pa ss o n” t o him t hro ugh t he pr emiums, his allega t ion d oe s no t invok e t he t ype o f discr et ion co nt emplat ed by Day an or its progen y . Both de f

endan ts’ c ontracts

state the parties’ obl

i gations as f

oll ows: “ In
r et ur n fo r[ Go r e’ s] pa ymen t o f t he pr emiu m, an d s ub jec t t o all t he t er ms o f t his po licy, [defen dants] agree wi

th [Gore] t o pro vi

de the i nsuran ce as stated in

[each] poli

cy .” Gore agreed to pay the stated prem

i um prices and def endan ts agre ed to provi

de i ns uran ce c overa ge i n return. In t he co nt ext of t his case , d efenda nt s had no d iscre t ion t o d ecide whet her t hey wo uld p ro vide t he
co ve r ag e in di ca t ed
. Abs en t t he r eq ui sit e d isc r et io n p r es cr ibe d b y Day an , Gore cannot stat e a1-06-3325

6

clai m f or a bre ach

of the duty

of g ood fa

i th an d f ai r deal i ng. S ee, e.g. , A

nd ers on v . Bu

rton Associ ates, Ltd. , 21 8 I ll. A pp . 3d 26 1, 26 7, 57 8 N
. E
. 2d 19 9, 20 4 ( 19 91 ) ( dis miss ing co un t er cla im fo rbr ea ch o f du t y o f go o d fa it h a nd fair de aling wh er e c o un t er de fen da nt ha d n o dis cr et io n in perf ormi ng h i s con tractual obl i gations)
. Se con d, Goreatta

cked de cisi on s th at def en da n ts m ade b ef oreth e cre ati

on of an y con tra cts t ha t co uld giv e r ise t o de fen da nt s’ du t ies o f go o d fa it h a nd fair de aling
. I t is a xio mat ic t ha t o nly duti es a ri si ng out of a con tract i tself can gi ve ri se to a b

reach. Martin

v. State Farm Mutual A utom obi l e In su ran ce Co. , 348 Il

l . Ap p. 3d 84 6, 853, 8 08 N.E.2 d 47, 54 (2004 ). Here , Gore
asse rt ed t hat defend ant s bre ache d t heir d ut ies o f go od faith by including t he pr ivil ege t ax in the particul ar com bi na tion of c osts, ex

penses , ri sks , and prof

i ts use d to calcul

ate the prem i um prices . Ho weve r, defend ant s made t hos e pr icing dec isions be for e t hey offer ed– and G or e ac cep t ed– t he
re sult ing pr emium price s, be for e t he pa rt ies ent er ed int o leg ally bi nding co nt ra ct s, a nd befo re any dut y of goo d faith and fai r dealing could have arisen under t hose co ntra cts. Accor dingl y, Gor e’s cl ai m c ann ot stand. See Ma r t in , 348 Ill . App. 3d at 853, 808 N.E .2d at 54 (holdin g that precon tractual actions c an

not f orm th e b asis of a breach of

contract cl ai

m ). E ve n if d efe nd an t s ha d in clu de d t he pr ivileg e t ax in c alc ula t ing t he pr emiu ms, t he y wo uld not have acted in

bad fai th. It is wel

l establ ish ed that defendan

ts are ent itled to reimb

urse them sel ve s f or taxes i nc urred as a c ondi

tion of a sal e. Mo siman v. BM W Financial Ser vices N A, Inc. , 32 1 I l l . A

pp . 3d 38 6, 3 91 , 74 8 N .E. 2d

31 3, 3 91 (2 00 1) . A

b us i n es s m ay el ect to i n crea se i ts prices to off set a tax burden “

jus t as it could h

ave done i

f f aced wi th ot her types

of addi tional costs.” Wex

le r v. Wi rtz Cor p. , 21 1 I l l . 2d

18 , 26 , 80 9 N .E. 2d

12 40 , 12 45 (2 00 4) . W

h eth er to1-06-3325

7

pass a tax on to the consume r or absorb the cost o f a tax i s “purel y a busi ness deci sion.” Wex

le r , 211 Ill . 2d at 26, 809 N. E.2d at 1245. As f oreign i nsurers, these def

endan ts were required to pay the priv il ege tax as a condi

tion of colle cting i

nsuran ce prem ium s f rom Illi nois consum ers. 215 I LC S 5/ 40 9 ( We st 19 92 )
. Ho w t he y ch o se t o r ec o up t he co st o f t ha t t ax bu r de n w as “p ur ely a bus i ne ss d ecision” that does n

ot expose them to li ab i l i ty. Moreover, t hi s court has long recogni zed, with approval, that co ntracting parti es m ay agr ee t o ha ve t he pu rc hase r p ay a t ax eit her as p ar t of a co mpo site pr ice o r in ad dit ion t o t he stated pri ce f

or the goods
. Crerar Cli

nch Coal Co. v. Board of Education of C ity of Chi cago , 13 Ill . App. 2d 208, 216, 141 N.E. 2d 393, 397 (1957). In essence, the question is one of contract construction. Whe

re the lan guage of a contract unam bi guously refl ects that t he “ composi

te price t o be paid * ** [ is] st at ed in t he co nt ra ct s [a nd] t he amo unt of t he [ sales t ax is] no t spe cified,” t he tax is considered to have been

“ab sorbed or buried i

n the contract price.” Crerar Cli nch Coal , 13 Ill. App. 2d at 211 , 14 1 N. E. 2d at 395 ; Coh on v . Os ca

r L . Pa ri s C o. , 17 Ill . App. 2d 21, 24-25, 149 N.E.2d 472, 474 ( 1958) (recognizi ng the di stin

ction be tween contracts containi

ng a com posi te price term

and those

i tem izi ng th e tax sep aratel y f rom th e pri ce of goods). The
con tract wi l l be en f orce d a s w

ri tten an d the purchaser wi

l l pa y the com pos i te p riceag

ree d to, regar dless of a ny chan ge i n the tax rate. Crerar Cli

nch Coal , 13 Ill . App. 2d at 211-12, 141 N.E.2d at 395. Here, Gore entered into contract s wi th defen dants to pay the composi

te premi um pri ces as st at ed in ea ch o f the insura nce c ont ra ct s. T he pr emiums wer e no t itemized t o s how t he propo rtion charged f

or insuran ce coverage, taxes, or any ot her particul

ar expense, nor were they1-06-3325

8

re qui re d to b e. If

i n de ed de f en da n ts c on si dere d th e pri v i l eg e ta x i n ca l cul ati n g th e c om pos i te price, the tax was

absorbed i

nto t he price, as were the other component parts of the negotiated pr ice. Go re and d efenda nt s co nt ra ct ed fr eely on t er ms app ar ent ly f avo ra ble to bot h, a nd t he i ns uran ce c ontracts

m ust b e en f orced a s wri

tten. In re Forema

n , 365 Ill . App. 3d 608, 611, 850 N.E.2d 387, 390 ( 2006). We will not rewrite these contracts because Gore now seeks a b etter bargai n. See F.H. Prin

ce & Co. v. Towers Fi

nan ci al Corp. , 275 Ill . App. 3d 792, 804-05, 656 N.E .2d 142 , 15 1 (1 995 ); Crerar Cli nch Coal , 13 Ill. App. 2d at 21 3, 141 N. E.2d at 396. T hus,
we cann ot now allow Gore to cl ai m that def

endan ts acted in b ad fai

th in computin

g the prices

that he agree d to pay
. Gore further alle ged that defen dants acted in

bad f ai th by chargi ng hi m the s am

e premi um prices , and theref

ore continued to colle ct the 2% privi le ge tax, after the Selc

ke deci sion rendered tha t rate un consti tutiona l . He rel i ed on th e O l d Repub l i c c ontr

ac t coveri ng the period f rom Au gu st 19 97 t o Au gu st 19 98 fo rsu pp o rt . Ho we ve r , t ha t pla in lan gu ag e o f t ha t co nt r ac t be lies his clai m . Go r e w as r eq uir ed t o at t ac h t o his c o mpla int t he wr it t en inst rume nt s u po n w hic h his cla im is b ased, and we tr eat such exhi bi ts as part of the complai

nt itself . 735 I LCS 5/2-606 (West 200 6); Ba j wa v. Metropol

i tan Li f e In su ran ceCo. , 208 Ill . 2d 414, 431, 804 N.E .2d 519, 531 (2 004 ). Where allegat ions mad e in the bod y of t he co mplaint co nfli ct wit h fact s disclo sed in the exhibits, t he exhibits will cont ro l and t he allega t ions w ill not be t ake n as t ru e in evalua t ing t he suf f i ciency of the com

plai nt. Baj wa , 20 8 Ill. 2d at 431 -32 , 80 4 N. E. 2d at 531 ; Crerar Cli nch Coal , 13 Il

l . Ap p. 2d a t 217, 141 N.E.2d a

t 398.1-06-3325

9

Her e, t he Old R epu blic cont ra ct re veals t hat altho ugh Selc ke wasdeci

ded d uri ng th e term of the Ol d Republ ic contract, the 2% priv

il ege tax rate was stil

l i n ef fect at the tim

e that contract was si gned si x m onths earlie

r. Therefore, if

Old R epubl ic did i ncl ude the priv

il ege tax i n that contract, it did so usin

g the then-current priv

il ege tax rate. Defen

dants would n

ot have been ob l i ga ted to re duce th e n eg oti ate d c om

pos i te pre m i um pri ce , or th

e pri v i l eg e ta x ra te u se d to determi ne i t, after t he Selc

ke deci si on in

val ida ted the tax rate. See Crerar Cli nch Coal , 13 I ll. App. 2d a t 211 , 1 41 N .E .2 d at 395 . G or e failed t o a t t ach a ny ot her co nt ra ct s t o t he co mplaint that were created after the Selc ke de cis io n t ha t wo uld su pp o rt his c laim, wh et he riss ue d b y Old Re publ i c or Ind

i an a. A bs en t such al l eg ati ons i n or atta ch ed to the com pl ai nt, Gore ca nn ot establ is h that defen

dants coll ected taxes i

n an am ount exceedi

ng thei r tax li abi li ty. See Crerar Clin ch Coal , 13 Ill . App. 2d at 217, 141 N.E .2d at 397-98. Fi na l l y , we note Gore ’s as sertion th

at “ by col l ec ti ng pre m i um s a nd [pr i vi l eg e ta xe s] f rom [hi m] (e.g., in

1997) for policy

periods i ncl usi ve of 1998 or bey

ond, but at pre-1998
un co nst it ut io na lly high [ pr ivileg e t ax ] lev els –[ de fen da nt s] vio lat e [ Go r e’ s] r igh t s t o r emit o nly constitutional

le vels of the [pri

vi le ge tax], and to pay prem ium s that reflect same.” No t wit hst an din g t he co nc lus o ry nat ur e o f t he st at eme nt , wh ich pr o hibit s u s fr o m co nsid er ing it in
ev al ua ti n g a com pl ai n t ( Mi d- W est Energy

Con su l tan ts , 352 Ill . App. 3d at 161, 815 N.E .2d at 913), we fai

l to see how a purported co nsti tut iona l v iolation supports a cause of action for breach of c ontract. Ne

verthel ess , Gore has c i

ted no spec i f

i c consti tution al provisions th

at al l eged l y were vi ola ted, or an y f acts to su pport thi s cl

ai m , whi ch i s a v i ola tion of Su prem e Court Ru

l e 341 (h)(7 ). 210 Ill . 2d R. 341(h)(7) . Th i s c our t ‘i s n ot a d ep osi tory i n wh i ch an appe l l an t m ay du m p i ts1-06-3325

10

argum en ts wi thout f actual f ounda tion i n h opes that [the c ourt] wil l

sif t through the e nti re rec ord to fi nd suppo rt for a de ter mi

nation favora ble to ap pellan t’s po sition.’ Mi

krut v. First Ban

k of Oak Park , 359 Ill . App. 3d 37, 51-52, 832 N.E .2d 376, 387 (2005), quot in g Coff ey v. Hancock , 122 Ill . A pp. 3d 4 42, 444 , 46 1 N .E.2 d 64 , 66(19 84) . Th us , th e a rgu men t i s w ai ve d a nd wewi l l not
cons i der i t. Vin e Street Clin

ic v. Heal thli nk, Inc. , 222 Ill . 2d 276, 301, 856 N.E .2d 422, 438 (2006). For all

of the f orego in g reasons, we af

fi rm the order dis

mi ssi ng the b reach of c ontract claim for failur e t o s t at e a c aus e o f act ion. Gore’ s c om

pl ai n t also c on tai n ed a dec l arator

y j udgm en t cou n t i n wh i ch h e s oug h t a dec larat ion o f the par t ies’ uns pec ifi ed “r ight s and liabil

ities u nder Illinois law. ” T o maint ain a cl ai m f or declaratory j udgme

nt, a plai ntif f m ust establi

sh the f oll owing: (1) the pl

ai ntif f h as a legal tangibl e in terest ; (2) t he defen

dant has an oppo sin

g in terest ; and (3) an actual case or co ntro versy exi sts b etween the parti

es. Beahri

nger v. Page , 204 Ill . 2d 363, 372, 789 N.E .2d 1216, 1223 (2003). A plai

ntif f s eeki ng dec larat or y relief must demo nst ra t e st anding t o r aise t he claim by
es t ab lishin g t ha t it ‘is no t mer ely c ur io us o rco nc er ne d a bo ut t he o ut co me b ut po ss es se s s o me per so nal claim, st at us, or right , a dist inct a nd pa lpable injury t o w hich is fairly tra cea ble to t he defen dant’s conduct and s

ubstanti ally

li kel y to be preve

nted or redressed by

the grant of such relief .’ Adams v . Mey

ers , 2 50 I ll. App. 3d 4 77, 483 -8 4, 620 N. E. 2d 1 298 , 1 303 (1 993 ), quo t ing Kluk v. Lang , 125 Il

l . 2d 306 , 314, 53 1 N.E.2d 790, 79 3 (198 8). Go re alleged t hat he had a “su bst ant ial legal inter est ” in the po rt ions o f the pr emiums he pai d that w ere

attri bu tab l e to the p ri

vi l eg e ta x. Hese em

s to sugg es t tha

t hi s righ t to a re f un d of t hos e pr emiums is based on d efenda nt s’ pu rp or t ed vio latio n of se ct ions 3 79. 1 and 393 .1 of t he1-06-3325

11

Insurance Code go verni

ng unearned premi

um reserves. 215 ILCS 5/379 .1, 39 3.1(1 ) (West 2004)
. Se cti

on 37 9.1 of th e In su ra n ce Cod e req ui re s e v er y el i gi b l e i n su ra n ce com pa n y to “maintain an u near ned p re mium reser ve o n all policies * ** in fo rc e which s hall be calcu late d in t he
man ner des cri be d i n Se cti on 393 .1 of

[the In sura nc e Code ].” 215 ILCS 5/379 .1 (West 2004). Unde r se ct ion 3 93. 1, insure rs’ unea rne d pr emium rese rve must co nt ain, a t a minim um, “t he compan y’ s actual l

ia bi li ty to all its i nsureds f or t he return of gross unea rned prem

ium s.” 215 ILCS 5/393 .1 (West 2004). T he st at ut e d o es no t de fine an un ea rne d p r emiu m; ho we ve r , t his c o ur t ha s c o nst rue d it in t he fo llo win g w ay: “W hen a[ n insure d] canc els co ver age *** dur inga p eri od f or whi ch it has a lread y paid fo r t he co ver age , [ t he insur er ] r efund s t o t he [in sur ed] t he po rt ion o f the paid p re mium cover ing t he mont hs fo r whi ch i nsuran ce will no longe r be nee ded. Thi s am

ount is kn own as t he unearne d premi

um.” Pele schak v . Verex As surance, Inc. , 272 I ll. Ap p. 3d 10 77, 107 9, 651 N .E.2d 562 , 564 (1 995). Th e D i rector of In su ran ce(Di rector) re qui

res tha t i ns ure rs mai nta i n c erta i n r es erv es“ f or the purpose of adequately prot ectin g the in sured and se curin

g the solv ency of” the i nsurer. 215 ILCS 5/378 (West 2004). The Di rector enf orces and exe cutes all

in surance l aws and i nve stigates any vi olati ons of these re serve requi

rem ents. In deed: “W hen ever i t ap pe ar s to th e D i

re ctor th at a ny [ insu r er ] is1-06-3325

12 co nduc t ingits b

usi ness and af fai rs in such a m ann er as to t hreaten

to render it i nsol ven t, *** o r is c o nduc t ing its bu siness a nd affairs in a
ma nne rwh ich is ha za r do us t o it s p ol ic yh olders, *** and that irr ep ar ab le l oss a

nd i nj ury t o t he propert y a

nd bus in ess of a pe rson has
occ urred * ** the Di

rector ma y, wi thout notice, and b efore hea rin g, issue a nd ca us e to be serv

ed upon such pers on or co mpa ny an order
re quir ing such pers on or

company to forthwith cease an

d de sist f rom enga ging furt her in the acts *** whi ch are caus in

g such conduct *** to exi st.” 215 ILCS 5/401 .1(2) (W est 2004). The Di rector ma y the n f in e the off endi ng i nsurer each

day it i s i n vi olation of these statutes and, ul tim atel y , revoke the

i ns urers l i cense i f i t fa i l s to com pl y . 215 IL CS 4/4 00.1(6 ) (We st 2004 ). The Insu ra nce C od e se ct ions c ited by Gor e and t he co rr esp ond ing pr ovisio ns o f the Ill in ois Adm in istrative Code are reg ulations on i nsurers by

the Depart men

t o f Insurance as a
co nd it io n o f main t ain ing t he ir lic en se s t o pr o vid e in su r an ce t o I llino is c o nsu mer s. Se e a lso 50 I ll. Ad m . Code §§ 908, 91 1, asam ended N ovem

ber 25, 19 68, an

d Nov em be r 8, 196 3, res

pecti ve l y . The consequen

ces f or violating the

unearne d premi

um res erve provi sions i

ncl ude fi nes an d, ultim ately, revocation of an i

nsurer’s li cense. Giv

en the purpo se and remedi es for these prov i si ons , we ca nn ot f i nd or con ce i ve of an y au thor i ty tha t en dow s a n i ns ure d w i th a righ t of action agai

nst an i nsurer f or faili ng to mai ntain unearne d premi

um res erves i

n the m ann er pr esc ribed . Mo re ove r, any violat ion o f the unea rne d pr emium sta t ut e will not be r edr esse d by refun din g premi ums to the in sured, as Gore seeks. Thus, we are not persuaded that Gore’s “legal1-06-3325

13

tan gi b l e i n terest” deri

v es f rom th es e statu

tes an d h e h as n ot other wise estab l i sh ed sta n di n g to rais e the clai

m. See Ad ams , 250 Ill . App. 3d at 484, 620 N.E .2d at 1303. Gore nevert heless argues that he has provided “ a val id l egal theory” upon which

to base hi s declarator y judgme

nt cla im , “i rrespective of whe

ther any of the [Insuran

ce Code] statut es endow hi m wi th a priv ate cause of acti on.” However, the threshold requi remen t for establi

shi ng a decl arator y judgme

nt cla im is not whether he can

ple ad any

le gal theory upon whi

ch to pro ceed, but whether he

can pl ead a legal

theory i n wh ic h he has a pers onal

le gal in terest. See Beahri

nger , 204 Ill. 2d a t 3 72, 789 N.E .2d at 122 3; Ad ams , 250 Il l . Ap p. 3d a t 484, 620

N.E.2d a t 1303. Gore cannot plead suc

h a theory f

or t he addi

tional reasons that follow. Gore all eged that “the coll

ection of the un

constitutional

tax from [hi m] v oids the polic ie s or ter m s th ere of prov i di ng f or th e p rem

i um ch arg e”an d, a s a res ul t, “he has a l eg al righ t to a
re fund” of t hat po rt ion o f the pr emiums at t ribut able t o t he pr ivil ege t ax. Ho weve r, as w e have dis cussed, def

endan ts did n ot act im properly by passi ng the pri vi le ge tax on to him

, if in deed they did so. Shif

ting a tax burden to consumers i s not sleigh t o f h and; i t is a calcul

ated business deci sion. Wex

le r , 21 1 Ill. 2d at 26, 809 N.E .2d at 124 5; Mosim an , 321 Ill . App. 3d at 391, 748 N.E.2d at 318 . More im

port antly , in cl udin g the priv il ege tax i n a com posite prem

ium price i s an acc eptab l e prac

tic e tha t does n ot voi d va l i d i ns uran ce c ontracts

or requi re def endan ts to return
an y portion of the prem

i ums to Gore. Crerar Cli

nch Coal , 13 Ill . App. 2d at 211, 141 N.E .2d at 39 5. T hu s, Go r e c an no t es t ab lish t ha t he ha s a leg al t an gib le int er es t in ar efu nd o f pr emiu ms based on an

y i nj ury traceabl

e to defendan

ts’ conduct. See Ad ams , 250 Ill . App. 3d at 484, 620 N.E.2d at 1303.1-06-3325

1 Go r e c it ed “2 15 I LC S 5 /4 72
. 1, ” r ep ea led in 1 98 8, an d “ 21 5 I LC S 5 /4 88 , ” r ep ea led in 1970. He also cited “215 ILCS 5/46 0,” w hich addr esses t he compet itiveness of the wo rker ’s
com pensati on an d em ploye rs’ l i ab i l i ty i ns uran ce m arkets , ne i

ther of whi ch are a ppl i cab l e here. Finally , he cite d “21 5 I LCS 5/ 120 1, ” which p er t ains t o a legislat ive st udy co mmi ssio ned by t he General Asse mbly to exam in e the rela tionsh ip b etween i

nsuran ce rates and i

ncom e. 14 Fi nal ly , Gore argued t hat “def

endan ts’ alle ged conduct of not remi tt in g such [pri

vi le ge taxe s] v i ola tes Il li noi s publ i c pol

i cy ai med at pre

venti ng e xc ess i ve or unf ai rl y di scri m i na tory insura nce r at es, enco ur aging c omp et itio n bet wee n insure rs t o t he fullest ext ent po ssible, a nd fixing and determin

in g insurance rate s,” citing to repealed or in appli cable Insurance Code st atut es. 1 He
ur ged us t o “infer ” t hat t he “co nduc t alleged ” is co nt ra ry t o t he pu blic policy go als o f the Ins uran ce C ode. How ev er , G ore ag ai n f ai l s to i n f orm usof an y l eg al b as i s f or h i s c on ten ti on or p l ead f

acts in su pp o r t o f his le ga l co nc lus io n, su ch as t he be ha vio rfr o m wh ich we ar e t o “infe r ” a pu blic policy violation, h

ow that viola

tion al le gedl y occurred, or how the insurance contracts are rela ted to any such v i ola tion . He h

as a gai n f orfe i ted the argum en t. Mi krut , 359 Ill . App. 3d 37 at 51-52, 832 N.E.2d at 387 ; 210 Ill . 2d R. 341(h)(7)
. A l th oug h th ere a ren o cl ea r al l eg ati on s i n th e c om pl ai n t, w e s us pe ct th at G oreprotes

ts de f en da nts ’ c ol l ec ti on of

the pri vi l eg e ta x th roug h th e i ns ura nc e c ontr ac ts a s g en

era l l y vi ol ati ve of pu blic po licy, wh et he rbe fo r e o raf t er t he pr ivile ge t ax r at e w as inv alid at ed by Selc ke . Were we ab le t o co nsid er t ha t ar gu men t , no t wit hst an din g G o r e’ s ina bilit y t o pr o pe r ly ple ad it , we wo uld1-06-3325

15

re view it in light of t he pr inciples re cent ly reexamined by o ur sup re me co ur t in Vin e S t r ee t Clinic , 222 Ill . 2d at 300, 856 N. E.2d at 438, and Mohanty v. St. Jo hn Heart Cli nic, S.C. , 225 Ill . 2d 52, 64-65 , 866 N .E.2d 85, 9 2 (200 6). This j uri sdi

cti on has a

l ong h i story of u phol di ng p arti es’ ri ghts

to free l y contract. Moh an ty , 22 5 I l l . 2d

at 6 4, 8 66 N. E.2 d a

t 92 . Th eref ore , c our ts a rere l uc tan t to de cl are pri v ate
con tra cts v oi d a s a gai n st p ub l i c p oli cy

an d wi l l n ot do s o un

l es s th ey are “ ‘c l ea rl y con tra ry to wh at t he co nst it ut io n, t he st at ut es o rt he de cis io ns o f t he co ur t s ha ve de cla r ed t o be t he pu blic policy ’ ” or it i s “ ‘ cl early shown that the contract is m anifes tly in juri ous to the publ

ic wel fare.’ ” Moh an ty , 225 Ill . 2d at 65, 866 N. E.2d at 92, quot in g Vin e S t r ee t Clinic , 222 Ill . 2d at 299, 856 N.E.2d at 438 , quot in

g Sch um an n- He i nk v. Fol som , 32 8 I ll. 32 1, 33 0, ( 19 27 )
. Co ns eq ue nt ly, plaint iff s ca rr y a heavy bur den t o s how t hat pr ivate co nt ra ct s ar e ag ainst t he pu blic policy of t he state. Moh

an ty , 225 Il l . 2d at 64 , 866 N .E.2d at 92
. Go r e h as faile d t o su st ain t his h igh bu r de n. Ass umin g t ha t he co rr ec t ly st at ed t he pu blic po licy goals o f the Insu ra nce C od e as “pr event ing exce ssive r at es, ” Go re canno t sho w t hat t he ins ur an ce co nt r ac t s a t iss ue he r e v io lat ed t ha t o ran y simila r po licy. We h ave discussed at length the l ong-standi

ng pri nci ple s that permi

t sell ers to r ecover taxe s f rom p urch ase rs at thei r option
. Wex

le r , 21 1 Ill. 2d at 26, 809 N.E .2d at 124 5; Mosim an , 321 Ill. App . 3 d at 391 , 7 48 N .E .2 d at 391 . S ellers may include t hos e t axes in calculat ing
com posi te price term

s to be of f ered to prosp ecti

ve purch ase rs. Crerar Cli

nch Coal , 13 Ill . App. 2d at 21 6, 14 1 N .E .2 d a t 39 7. Ev en if t he t axe s a re lat er fo und t o be u nco nst it ut io nal, if a contract r efl

ects that a purchaser agreed to pay a composi te price, the purchas er is

not absolv

ed1-06-3325

16

of p ay i ng th at stated c ontract pri

ce. Crerar Cli

nch Coal , 13 Ill . App. 2d at 211, 141 N.E .2d at 395. Pa rtie s m ust b e al l owed to enf

orce thos e con

tracts as wri tten. Foreman, 365 Ill . App. 3d at 611, 850 N.E.2d at 390. Fi nal ly , there is n

o indi cation that these def

endan ts continued to charge Gore at the

2% pri vi l ege tax rate af ter i t had be en decl ared u nc onsti tution al
. In li ght o f these prin

cipl es, Gor e cannot meet his b urden of showing that defendants’ insurance contr acts o r actions violated t he constitut ion, stat utes, or laws of this state. He also
ca nno t sho w t ha t t he co nt r ac t s a r e “ man ifes t ly injur io us t o t he pu blic w elfa r e” t o o ve r co me decades of judic ia

l opi nions to t he contrary. A

ccordingl y, Gore’s cl

ai m f or declaratory relie f under this theory also fai

ls. Fo r a ll of the for ego ing re aso ns, w e affirm the or der of t he circ uit co ur t dismissing t he th i rd am en de d c om pl ai n t. Af fi rmed. GREIM AN and CUN

NINGH AM , JJ., c oncu

r.