2019 IL App (1st) 181126 

FIRST DISTRICT

SIXTH DIVISION

May 10, 2019 

No. 1-18-1126 

ADVANTAGE MARKETING GROUP, INC.,

Plaintiff-Appellant, 

v. 

JAMES P. KEANE, SR., 

Defendant-Appellee.

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Appeal from the Circuit 

Court of Cook County. 

No. 17 CH 05559 

Honorable 

Neil H. Cohen, 

Judge Presiding. 

PRESIDING JUSTICE DELORT delivered the judgment of the court, with opinion. 

 Justices Cunningham and Harris concurred in the judgment and opinion. 

OPINION

¶ 1 Plaintiff Advantage Marketing Group, Inc. (AMG) filed a two-count amended complaint 

seeking relief against defendant James P. Keane, Sr., for breach of fiduciary duty and tortious 

interference with prospective economic advantage. Plaintiff alleged that Keane failed to disclose 

a corporate opportunity to purchase a competing business and exploited a client referral to his 

advantage. Keane moved to dismiss the amended complaint pursuant to section 2-615 (735 ILCS 

5/2-615 (West 2016)) of the Illinois Code of Civil Procedure (Code). Keane argued that the 

corporate opportunity doctrine did not apply to him because, at the time of the alleged conduct, 

he served as a mere employee of AMG and not as an officer or director of the company. Keane 

also contended that even if the corporate opportunity doctrine applied, he disclosed the corporate 

opportunity to AMG consistent with the obligations of the doctrine. Finally, Keane argued that 

AMG failed to properly plead the allegations for tortious interference with a prospective 
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economic advantage. The circuit court granted Keane’s motion to dismiss. We find that AMG 

properly stated claims for breach of fiduciary duty and tortious interference with a prospective 

economic advantage. We reverse and remand this cause for further proceedings. 

¶ 2 BACKGROUND

¶ 3 AMG filed its amended complaint on January 23, 2018. The amended complaint alleged 

that AMG, an Illinois corporation, is a marketing services company that provides letter-shop and 

fulfillment services for its clients. AMG creates and administers print and mailing programs for 

its clients from its facility in Elk Grove Village. Keane had formerly served as a director, officer, 

and employee of AMG. He was an original founder of AMG and maintains a 35% shareholding 

stake in the company. 

¶ 4 The amended complaint alleges that for several years prior to his resignation, Keane 

served as a “principal employee of AMG with wide-ranging responsibilities equivalent to those 

of an officer.” For example, Keane consistently held himself out to third parties as an AMG 

owner when developing customer relationships. Keane had substantial responsibility for AMG 

employment decisions, including hiring and termination of staff. He had access to all AMG 

books and records, including client lists, employee records, tax documents, vendor information, 

and billing data. Keane received a bonus equal to that of Patty Hermann, AMG’s director and 

majority shareholder. He was responsible for developing and maintaining AMG’s financial 

records and had full access to the company’s accounting system. Throughout his tenure with 

AMG, Keane’s job duties included exploring strategic acquisitions, including the purchase of 

competing letter-shop businesses, their equipment, and customer lists. The amended complaint 

detailed instances when Keane participated in the negotiation and acquisition of related 
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businesses, stating that he was “a key point of contact throughout 2013 regarding AMG’s 

opportunity to move or acquire property to conduct business operations.” 

¶ 5 On July 10, 2013, Keane’s son, James Jr., also an AMG employee, sent an email to 

Keane and Hermann with the subject line, “Mailhouse – Rebranded Website – Is that the same 

ownership group as before?” The body of the e-mail included a website link for The Mail 

House, a competing business located a few blocks away from AMG’s office. The amended 

complaint alleged that during the summer and fall of 2013, Keane and Hermann discussed The 

Mail House and whether it was a viable acquisition target. The amended complaint stated, 

“Though Hermann is unaware of when Keane ultimately began his own discussions about 

buying The Mail House, the business was one that AMG had explored acquiring.” 

¶ 6 The amended complaint alleged that at some point before Keane’s departure from AMG

on September 4, 2015, he started to withhold information for himself and communicated outside 

AMG channels using his personal e-mail account while failing to forward information that would 

have benefitted AMG. On March 10, 2014, Keane transferred his assigned corporate cell phone

number to his own personal account, outside the view of AMG. The amended complaint alleged 

that this action allowed him to retain and use the same phone number following his resignation 

from AMG and further prevented AMG from controlling communications that he had during his 

employment with AMG.

¶ 7 The amended complaint also alleged that Keane began preparations to acquire The Mail 

House before his September 4, 2015 resignation. For instance, on August 3, 2015, he registered a 

new internet domain name, “mailhousedm.com,” along with seven other domain names that each

contained the word, “mailhouse.” On August 12, 2015, he formed Keane, Inc. d/b/a The Mail 

House. The alleged complaint stated that “Upon information and belief, Keane formed this 
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corporation to acquire The Mail House,” and that “[a]t all times, The Mail House has conducted 

letter-shop and fulfillment services similar to, and competitive with, those offered by AMG.” 

¶ 8 During the week before his resignation, Keane failed to disclose and tender to AMG a 

referral he received from another company, JD Graphics. James, Jr., forwarded the referral from 

JD Graphics to Keane’s personal e-mail account. The amended complaint alleged that Keane 

exploited this referral after he began operating The Mail House. In addition, Keane approached 

and told clients and vendors of AMG that AMG was in danger of closing its business due to

financial issues.

¶ 9 On September 5, 2015, the day after Keane resigned, AMG discovered its security 

cameras were turned off and that its security tapes were missing. On September 9, 2015, Keane

allegedly disabled AMG’s website. He refused to transfer AMG’s website materials back to the 

company for more than one week. Out of business necessity, AMG established an entirely new 

website. The day before Keane transferred the website content back to AMG, James, Jr. 

registered a new website domain, “amgltd.co,” which differed by only one letter from AMG’s 

domain name. The amended complaint alleged that Keane either was aware of or actively 

encouraged James, Jr. to disable AMG’s website and then register a substantially similar domain 

name. During Keane’s employment with AMG, James, Jr. reported directly to Keane. James, Jr. 

tendered his resignation to AMG on September 7, 2015. 

¶ 10 The amended complaint alleged that Keane solicited James, Jr. to leave AMG and join 

him at The Mail House. Keane did not seek AMG’s consent before soliciting James, Jr. to leave 

AMG and join a direct competitor. Further, Keane never sought AMG’s consent to appropriate 

the JD Graphics referral or to interfere with AMG’s website operation. Additionally, before his 

resignation, James, Jr. had obtained samples of confidential client material that belonged to 
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AMG. Keane kept the samples for himself, resigned, and then returned the client materials after 

AMG’s then-counsel demanded their return. Since his acquisition of The Mail House, Keane has 

continued to perform lettershop and print work for this particular client. 

¶ 11 The amended complaint alleged that “At all times before Keane’s resignation, The Mail 

House was known to AMG as a competitor. The Mail House provided comparable products and 

services to the same type of clientele that AMC had serviced and cultivated. Accordingly, The 

Mail House was, and remains, in the same line of business as AMG.” Further, “[a]t no point in 

2015 did Keane disclose to Hermann or AMG that he sought to acquire The Mail House. Nor did 

Keane ever advise Hermann or AMG that the prior owners of The Mail House were interested in 

selling their business to a third party.” Finally, the amended complaint alleged that “[h]ad Keane 

brought The Mail House acquisition opportunity to AMG, AMG would have been interested in 

pursuing it.” 

¶ 12 Count I of the amended complaint alleged breach of fiduciary duty, stating that “[a]s a 

key AMG employee with responsibility equivalent to those of an officer, Keane owed a fiduciary 

duty of loyalty, fidelity, rectitude, candor, and good faith.” This fiduciary duty prohibited Keane 

“from actively exploiting his position within AMG for his own personal benefit and from 

hindering the ability of AMG to continue the business for which it was developed.” The 

amended complaint alleged that Keane owed AMG a fiduciary duty to disclose and tender all 

corporate opportunities, including all material facts to AMG. Keane allegedly breached this duty 

by secretly negotiating and purchasing a directly competing business, The Mail House, while 

still employed by AMG as “a key AMG employee.” Keane failed to disclose and tender a 

corporate opportunity – the potential acquisition of The Mail House – to AMG for its full and 

complete consideration. In addition, Keane allegedly breached his fiduciary duty to AMG by: (1) 
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soliciting James, Jr. to leave AMG and join The Mail House; (2) misappropriating referrals for 

existing lettershop work sent to AMG; (3) misappropriating client samples; and (4) disabling or 

otherwise interfering with AMG’s website. AMG sought the imposition of a constructive trust on 

The Mail House business to be held for the benefit of AMG, and other relief.

¶ 13 Count II of the amended complaint alleged that Keane tortiously interfered with AMG’s

prospective economic advantage “[b]y acquiring The Mail House for himself and by 

appropriating the client referral,” which caused “a termination of AMG’s expectation of entering 

into, or continuing, valid business relations.” 

¶ 14 On February 20, 2018, Keane moved to dismiss the amended complaint pursuant to 

section 2-615 of the Code. Keane argued that the corporate opportunity doctrine has no 

application to him as a former employee and applies only to officers and directors. Keane 

contended that even if the corporate opportunity applies in this case, he disclosed the corporate 

opportunity to AMG consistent with the obligations of the corporate opportunity doctrine. Keane 

and Hermann had discussed whether The Mail House was a viable acquisition, as pled in the 

amended complaint. Finally, Keane argued that the amended complaint failed to plead 

allegations addressing the elements necessary to establish a claim for tortious interference of a 

prospective economic advantage. 

¶ 15 On May 1, 2018, the circuit court granted Keane’s motion to dismiss. The court found 

that AMG failed to allege any facts establishing that Keane was an officer of AMG at the time of 

any of the events set forth in the amended complaint. The court stated that being a “key 

employee” is not the equivalent of being a corporate officer. The court also held that Keane was 

entitled to form a competing business and purchase The Mail House while still employed by 

AMG so long as he did not begin to compete against AMG. The court stated that the amended 
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complaint failed to allege specific facts showing that Keane actively competed with AMG while 

still employed by AMG. Finally, the court found that AMG failed to allege any facts showing 

that it had a valid business relationship with JD Graphics or a valid expectancy for such a 

relationship and, therefore, did not state a claim for tortious interference with a prospective 

economic advantage. This appeal followed. 

¶ 16 ANALYSIS

¶ 17 On appeal, AMG argues that it stated a proper claim against Keane for breach of 

fiduciary duty. Essentially, AMG contends that Keane owed a fiduciary duty to disclose and 

tender The Mail House acquisition opportunity to AMG before he resigned. AMG argues that the 

corporate opportunity doctrine’s parameters depend on the scope of the fiduciary’s agency 

relationship rather than the employee’s title. AMG contends that Keane’s “preparing to compete” 

defense does not apply in cases alleging a usurpation of corporate opportunity. Finally, AMG 

argues that the factual allegations arising from Keane’s appropriation of The Mail House 

opportunity place it within a cognizable tortious interference claim. We address these issues in 

turn. 

¶ 18 Standard of Review 

¶ 19 “A section 2-615 motion to dismiss tests the legal sufficiency of a complaint.” Hadley v. 

Doe, 2015 IL 118000, ¶ 29. The question presented by a section 2-615 motion to dismiss is 

whether sufficient facts have been pled in the complaint which, if proved, would entitle the 

plaintiff to relief. Bogenberger v. Pi Kappa Alpha Corp., 2018 IL 120951, ¶ 23. We construe all 

well-pleaded facts in the light most favorable to the plaintiff and take those facts and all 

reasonable inferences which flow from those facts as true. Napleton v. Village of Hinsdale, 229 

Ill. 2d 296, 320 (2008). A complaint can be dismissed under section 2-615 only when it clearly 
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appears that no set of facts could be proved under the pleadings that would entitle the plaintiff to 

relief and where the circuit court can determine the relative rights of the parties solely from the 

pleadings. Tuite v. Corbitt, 224 Ill. 2d 490, 510 (2006). We review dismissal pursuant to section 

2–615 de novo. Napleton, 229 Ill. 2d at 305. 

¶ 20 Claim for Breach of Fiduciary Duty

¶ 21 In count I of the amended complaint, AMG claimed that Keane breached his fiduciary 

duty when he misappropriated a corporate opportunity to acquire The Mail House. Keane argues 

that he was not an officer or director subject to the corporate opportunity doctrine. Keane 

contends that he was permitted under Illinois law to take the preparatory steps of outfitting a 

competing business. He also argues that he disclosed the potential acquisition of The Mail House 

and that AMG failed to allege in its amended complaint that it took any further action with 

regard to The Mail House.

¶ 22 A claim for breach of fiduciary duty must allege: “(1) that a fiduciary duty exists; (2) that 

the fiduciary duty was breached; and (3) that such breach proximately caused the injury of which 

the party complains.” Lawlor v. North American Corp. of Illinois, 2012 IL 112530, ¶ 69. A duty 

of loyalty to the employer extends to officers, directors, and employees. Id. (citing Mullaney, 

Wells & Co. v. Savage, 78 Ill. 2d 534, 546-47 (1980)). “Accordingly, a fiduciary cannot act 

inconsistently with his agency or trust and cannot solicit his employer’s customers for himself.” 

Id.

¶ 23 The corporate opportunity doctrine prohibits a corporation’s fiduciary from 

misappropriating corporate property and from taking advantage of business opportunities 

belonging to the corporation. Lindenhurst Drugs, Inc. v. Becker, 154 Ill. App. 3d 61, 67 (1987). 

“A corporate opportunity exists when a proposed activity is reasonably incident to the 
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corporation’s present or prospective business and is one in which the corporation has the 

capacity to engage.” Id. Our supreme court has held that it is a breach of fiduciary obligation for 

a person to seize for his own advantage a business opportunity which rightfully belongs to the 

corporation by which he is employed. Mullaney, 78 Ill. 2d at 545-46 (citing numerous Illinois 

Supreme Court cases holding similarly).

¶ 24 In contrast, “corporate competition” occurs when the corporate employer by definition 

already has an existing business relationship with a third party or is actively seeking to establish 

such a relationship, only to have its efforts thwarted by its own employees seeking the same third 

party relationship for themselves. See William L. Schaller, Corporate Opportunities and 

Corporate Competition in Illinois: A Comparative Discussion of Fiduciary Duties, 46 J. 

Marshall L. Rev. 1, 26 (2012). For example, in Everen Securities, Inc. v. A.G. Edwards & Sons, 

Inc., 308 Ill. App. 3d 268 (1999), the defendant Sidney Carlson, while still employed by the 

plaintiff Everen Securities (1) created a customer data base from which the defendant A.G. 

Edwards could generate letters notifying Carlson’s customers of his change in employment to 

A.G. Edwards; (2) made photocopies of documents containing customer account information; 

and (3) extended offers of employment on behalf of A.G. Edwards to Everen employees. These 

actions supported a finding that Carlson breached his fiduciary duty to Everen. Id. at 276; see 

also ABC Trans National Transport, Inc. v. Aeronautics Forwarders, Inc., 90 Ill. App. 3d 817, 

826-28 (1980) (employees breached fiduciary duty by actively promoting interests of rival 

business and diverting personnel and customers to employer’s competitors).

¶ 25 In corporate competition cases, an employee or agent may legitimately take certain 

preparatory steps during the agency relationship so long as they do not directly conflict with the 

employer or principal. “As a general rule, employees may plan, form, and outfit a competing 
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corporation while still working for the employer, but they may not commence competition.” 

Alpha School Bus Co. v. Wagner, 391 Ill. App. 3d 722, 736 (2009)). “In addition, absent fraud, a 

contractual restrictive covenant, or the improper taking of a customer list, former employees may 

compete with their former employers and solicit former customers provided there was no 

demonstrable business activity before termination of their employment.” Id. Although employees 

“may go so far as to form a rival corporation and outfit it for business while still employed by the 

prospective competitor, an employee is held accountable for breaching his fiduciary duty to his 

employer when he goes beyond such preliminary competitive activities and commences business 

as a rival concern while still employed.” E.J. McKernan Co. v. Gregory, 252 Ill. App. 3d 514, 

530 (1993). 

¶ 26 Here, taking AMG’s allegations as true, the amended complaint alleged that Keane “was 

a principal employee of AMG with wide-ranging responsibilities to those of an officer,” and that 

he misappropriated for himself a corporate opportunity, the acquisition of The Mail House, a 

company that competed directly with AMG. In short, this case involves an alleged usurpation of 

a corporate opportunity to obtain a competing business so that the defendant could enter into 

direct competition with his former employer. This case does not only involve corporate 

competition, as Keane would prefer to characterize it. Here, the allegations of corporate 

opportunity and corporate competition are intertwined and, thus, we examine both accordingly in 

the context of the breach of fiduciary duty claim.

¶ 27 We first consider whether the amended complaint properly pled that a fiduciary duty 

between Keane and AMG existed at the time in question. Generally, “[e]very person who accepts 

the responsibility of acting on behalf of another is a fiduciary.” Graham v. Mimms, 111 Ill. App. 

3d 751, 760 (1982). “An agency is ‘a consensual fiduciary relationship between two legal 
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entities’ whereby ‘the principal has the right to control the conduct of the agent, and the agent 

has the power to effect [sic] the legal relations of the principal.’ ” State Security Insurance Co. v. 

Frank B. Hall & Co., 258 Ill. App. 3d 588, 595 (1994) (quoting Gunther v. Commonwealth 

Edison Co., 126 Ill. App. 3d 595, 598 (1984)); see also Restatement (Third) of Agency § 1.01 

(2006) (defining agency as “the fiduciary relationship that arises when one person (a ‘principal’) 

manifests assent to another person (an ‘agent’) that the agent shall act on the principal’s behalf 

and be subject to the principal’s control, and the agent manifests assent or otherwise consents so 

to act”). “An employee need not be an officer or a director to be accountable since an agent must 

act solely for the principal in all matters related to the agency and refrain from competing with 

the principal.” E.J. McKernan, 252 Ill. App. 3d at 530. Indeed, “[w]hen a principal-agent 

relationship is present, a fiduciary relationship arises as a matter of law.” Stathis v. Geldermann, 

Inc., 295 Ill. App. 3d 844, 859 (1998) (citing State Security Insurance, 258 Ill. App. 3d at 595).

The fiduciary owes a duty of loyalty to the entity for whom the fiduciary is acting. Graham, 111 

Ill. App. 3d at 761 (citing Dick v. Albers, 243 Ill. 231, 236 (1909)). “Among other factors, the 

precise nature and intensity of the duty of loyalty depends upon the degree of independent 

authority exercised by the fiduciary [citation] and the reasonable expectations of the parties at the 

beginning of the relationship.” Id. 

¶ 28 In this case, AMG pled that Keane served as a key employee upon his resignation. Keane 

allegedly “held himself out to third parties as an AMG owner when developing customer 

relationships.” He “had substantial responsibility for AMG employment decisions, including 

hiring and termination of staff.” AMG alleged that Keane had access to all AMG books and 

records, including client lists, employee records, tax documents, and vendor information. He 

received a compensation bonus equivalent to the director and majority shareholder of the 
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company. He was responsible for developing and maintaining AMG’s financial records. In 

addition, Keane was expected to research and develop strategic acquisitions, including the 

purchase of competing lettershop businesses, their equipment, and customer lists. Finally, AMG 

alleged that at the time of his resignation, Keane owned a 35% shareholder stake in the company.

¶ 29 Even if Keane is not considered to be an officer or director of AMG, his considerable 

duties and responsibilities as an employee, his compensation, and his status as a minority 

shareholder put him in the position to act solely for the benefit of the principal in all matters 

connected with his agency. In Anest v. Audino, 332 Ill. App. 3d 468, 476-77 (2002), the court 

found that the counterdefendant Bill Anest was more than a minority shareholder in a close 

corporation – he had management responsibilities in the company. “His role in the entity was, 

like that of his fellow members, akin to that of an officer or director in a corporation.” Id. at 477. 

The Anest court held that it was against the manifest weight of the evidence for the circuit court 

to conclude that Anest did not owe any fiduciary duty to the counterplaintiff David Audino. Id. 

Simply put, when “employees continue to receive substantial salaries and continue to take part in 

top-level management meetings, negotiations and strategy discussions, their employer is entitled 

to their undivided loyalty and their utmost good faith.” Regal-Beloit Corp. v. Drecoll, 955 F. 

Supp. 849, 864 (N.D. Ill. 1996) (applying Illinois and Wisconsin law). Following Anest and

Regal-Beloit, we conclude that the amended complaint properly pled the existence of a fiduciary 

duty between AMG and Keane. Anest, 332 Ill. App. 3d at 477; Regal-Beloit, 955 F. Supp. at 864. 

¶ 30 However, Keane argues that the corporate opportunity doctrine as pled in the amended 

complaint applies to officers and directors, but not employees and, therefore, AMG did not 

properly plead a breach of fiduciary duty. Our supreme court’s holding in Mullaney belies that 

contention.
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¶ 31 In Mullaney, the supreme court specifically held that even though the defendant, Barnard 

Savage, was just an employee, and not an officer or director, he still had a duty under standard 

agency doctrine “to act solely for the benefit of the plaintiff [employer] in all matters connected 

with his agency and to refrain from competing with the plaintiff.” 78 Ill. 2d at 546. The plaintiff 

employer, Mullaney, Wells and Company (Mullaney), was engaged in underwriting corporate 

securities that included the occasional creation of investments on its own account (“two-party 

transactions”) and acting, for a fee, as a broker between businesses in need of funds and potential 

investors (“three-party transactions”). Id. at 547. While employed by Mullaney, Savage learned 

of the undervalued stock of Blossman Hydratane Gas and contacted Blossman about procuring 

financing for the company – an example of a three-party transaction. When the proposed 

financing failed to materialize, Savage and S.C. Williams, a person with whom Savage had 

invested in other deals, offered to buy Blossman’s stock in the gas company – a two-party 

transaction. After Savage and Williams bought the Blossman shares, Mullaney sued them for an 

accounting and to impose a constructive trust on the proceeds stemming from the Blossman 

transaction. The appellate court found that Mullaney had told Savage that he could engage in 

transactions on his own account to supplement his income and concluded that Mullaney rarely 

purchased stock for its own benefit. Thus, Mullaney did not expect to be provided by its 

employees with stock purchase opportunities.

¶ 32 The supreme court disagreed, holding that Savage, while still remaining an employee of 

Mullaney, could not “ ‘begin to act on his own’ ” because the ultimate transaction differed from 

those in which the plaintiff normally engaged. Id. at 549. 

“To accord Savage the option of substituting himself as the investing party 

without the consent of the plaintiff is to place himself in a position where his 
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personal interests will conflict with his duties to the principal. The situation is in 

principle indistinguishable from that of a real estate broker engaged to sell 

property owned by his principal who, without full disclosure of all material facts, 

acquires an interest in the property himself.” Id. 

¶ 33 More recently, the supreme court reaffirmed the holding that employees, as well as 

officers and directors, owe a duty of loyalty to their employer. See Lawlor, 2012 IL 112530, ¶ 69

(citing Mullaney, 78 Ill. 2d at 546-47 and E.J. McKernan Co., 252 Ill. App. 3d at 530).

Accordingly, we reject Keane’s argument that the corporate opportunity doctrine does not apply 

to employees of a company. The amended complaint adequately pled that Keane, both as a mere

“employee” and, more importantly, in his duties similar to that of an officer or director, owed a 

fiduciary duty to AMG. Mullaney, 78 Ill. 2d at 546-47; Anest, 332 Ill. App. 3d at 477.

¶ 34 Next, we determine whether AMG properly pled a breach of fiduciary duty under the 

corporate opportunity doctrine. First, we consider whether AMG sufficiently pled the existence 

of a corporate opportunity, because if no opportunity existed, the fiduciary cannot commit a 

breach of duty in availing himself of the opportunity. Then the question becomes whether AMG 

sufficiently pled Keane’s misappropriation of the alleged opportunity.

¶ 35 “A corporate opportunity exists when a proposed activity is reasonably incident to the 

corporation’s present or prospective business and is one in which the corporation has the 

capacity to engage.” Dremco, Inc. v. South Chapel Hill Gardens, Inc., 274 Ill. App. 3d 534, 538 

(1995). In determining whether the fiduciary may take advantage of a business opportunity in 

which a corporation is interested, “courts consider whether the corporation had an interest, actual 

or in expectancy, in the opportunity and whether the acquisition thereof by the [fiduciary] would 
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hinder or defeat plans and purposes of the corporation in carrying on or developing the legitimate 

business for which it was created.” Id. Significantly, 

“[w]hen a corporation’s fiduciary wants to take advantage of a business 

opportunity which is in the corporation’s line of business, the fiduciary must first 

disclose and tender the opportunity to the corporation, notwithstanding the fact 

that the fiduciary may have believed that the corporation was legally or 

financially incapable of taking advantage of the opportunity.” Id. at 542. 

Our supreme court has stated:

“[I]f the doctrine of business opportunity is to possess any vitality, the corporation 

or association must be given the opportunity to decide, upon full disclosure of the 

pertinent facts, whether it wishes to enter into a business that is reasonably 

incident to its present or prospective operations. If directors fail to make such a 

disclosure and to tender the opportunity, the prophylactic purpose of the rule 

imposing a fiduciary obligation requires that the directors be foreclosed from 

exploiting that opportunity on their own behalf.” (Emphasis added.) Kerrigan v. 

Unity Savings Ass’n, 58 Ill. 2d 20, 28 (1974).

¶ 36 The amended complaint alleged that Keane and Hermann discussed The Mail House in 

the summer and fall of 2013 “and whether it was a viable acquisition target.” The amended 

complaint alleged that The Mail House “was known to AMG as a competitor,” and that it 

“provided comparable products and services to the same type of clientele that AMG had serviced 

and cultivated.” AMG alleged, “[t]hough Hermann is unaware of when Keane ultimately began 

his own discussions about buying The Mail House, the business was one that AMG had explored 

acquiring.” The amended complaint alleged that “[a]t no point in 2015 did Keane disclose to 
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Hermann or AMG that he sought to acquire The Mail House. Nor did Keane ever advise 

Hermann or AMG that the prior owners of The Mail House were interested in selling their 

business to a third party.” Finally, the amended complaint pled that “[h]ad Keane brought The 

Mail House acquisition opportunity to AMG, AMG would have been interested in pursuing it.”

¶ 37 Taking the pleadings as true, as we must, AMG has sufficiently pled the existence of a 

corporate opportunity, namely, the acquisition of The Mail House, a competing business. AMG 

properly pled that The Mail House was in the same “line of business” as AMG because it 

provided comparable products and services to the same clientele as AMG. Id.

¶ 38 Under Kerrigan, when a corporate opportunity within the same line of business arises, 

the corporate fiduciary must fully disclose and timely tender the opportunity to the corporation.

Id. Keane argues that AMG “has pleaded itself out of court by expressly alleging that Keane 

disclosed and discussed The Mail House acquisition opportunity” with AMG. According to 

Keane, those allegations establish that he satisfied any possible duty owed to AMG. Further, 

Keane contends that because he informed AMG of the alleged opportunity and AMG declined to 

pursue it, he was free to pursue the opportunity himself. See id. at 27-28 (“It may be conceded 

that if a corporation has been informed by a director of a business opportunity, which it declines, 

the director may then be free to pursue the opportunity himself.”). 

¶ 39 In this case, however, AMG did not allege in its amended complaint that it declined to 

pursue the acquisition of The Mail House. Instead, AMG specifically claimed that it would have 

pursued the acquisition of The Mail House if Keane had disclosed the opportunity. The amended 

complaint alleged that Keane and Hermann discussed whether The Mail House was a viable 

acquisition target in 2013. AMG alleged that Keane never disclosed that he sought to acquire 

The Mail House. He also purportedly failed to disclose that the prior owners of The Mail House 
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were interested in selling their business to a third party. In short, the pleadings reveal that Keane 

allegedly failed to fully disclose the pertinent facts involving the corporate opportunity to acquire 

The Mail House, a business that was reasonably incident to AMG’s present operations. Id. at 28.

¶ 40 Moreover, Illinois law requires more than disclosure and tender of the corporate 

opportunity. The Mullaney court specifically held that a fiduciary cannot begin to act on his own 

“without the consent” of the principal because otherwise, the fiduciary places himself “in a 

position where his personal interests will conflict with his duties to his principal.” (Emphasis 

added.) 78 Ill. 2d at 549. Similarly, the court in Regal-Beloit issued an injunction against the 

defendants, employee-fiduciaries who secretly sought to purchase the same business as their 

employer. 955 F. Supp. at 864. The Regal-Beloit court held that: 

“the Individual Defendants’ failure to disclose any and all facts relevant and 

material to Regal-Beloit’s pursuit of Brad Foote – including Ward’s and Iglar’s 

refusal to deal with Regal-Beloit, Brad Foote’s business concerns with Regal 

Beloit’s original purchase offer, and the Individual Defendants’ desire and efforts 

to acquire Brad Foote on their own account – prior to exploiting that ‘corporate 

opportunity’ likely constitutes a breach of their own fiduciary duties of loyalty 

and good faith to Regal Beloit.” Id. 

¶ 41 Further, a fiduciary’s disclosure of his intent to pursue an opportunity for himself does 

not by itself free the fiduciary to pursue the opportunity. See Patient Care Services, S.C. v. Segal, 

32 Ill. App. 3d 1021, 1031 (1975) (rejecting the defendant’s argument that once he gave notice 

of his intent to pursue the corporate opportunity, “he is ipso facto free to contest with the 

corporation the business opportunity”). Indeed, in circumstances where the fiduciary attempts to 

seize the business opportunity away from the corporation, which manifested its desire to retain it, 
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“the mere fact that such [fiduciary] has announced his intention in advance to throw down the 

gauntlet and do battle with his corporation over the opportunity will not constitute good faith.” 

Id. at 1032. In Lindenhurst, 154 Ill. App. 3d at 71, the court found the defendant breached his 

fiduciary duties to the plaintiff corporation by competing with the plaintiff and taking an 

opportunity belonging to the plaintiff for himself. The court concluded that the defendant 

“cannot use the fact that he originally disclosed the opportunity to plaintiff, who then made a low 

initial offer, to excuse his breach of fiduciary duties in taking the opportunity for himself.” Id. at 

70. 

¶ 42 Based on these findings, we reject Keane’s argument that his disclosure of the potential 

acquisition of The Mail House excused him from his fiduciary duty. The amended complaint 

alleges that Keane failed to disclose he was interested in pursuing the acquisition of The Mail 

House himself. Under Mullaney and Kerrigan, Keane was required to disclose all the pertinent 

facts surrounding the acquisition of The Mail House, including his own personal interest, and

obtain AMG’s consent before pursuing the opportunity himself. 78 Ill. 2d at 549; 58 Ill. 2d at 28. 

Taking the allegations as true, we find AMG sufficiently pled a breach of fiduciary duty. 

¶ 43 We also reject Keane’s argument that he was permitted to take the preparatory steps of 

outfitting a competing business. AMG pled that it remained interested in acquiring The Mail 

House and Keane, in direct conflict with that interest, allegedly negotiated for and purchased The 

Mail House while still employed by AMG. The pleadings also allege he went beyond mere 

preparation. For example, he allegedly solicited James, Jr. to resign from AMG and join him at 

The Mail House, misappropriated referrals for existing lettershop work sent to AMG, 

misappropriated client samples, and disabled AMG’s website. Taken as a whole, AMG 

sufficiently pled that Keane’s conduct violated the rule that an agent (or employee) may not 
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compete with his principal (or employer) concerning matters within the scope of this agency (or 

employment) for purposes of usurping a corporate opportunity. Mullaney, 78 Ill. 2d at 549. 

¶ 44 Finally, we find AMG adequately pled that Keane’s alleged breach proximately caused 

injury to AMG. The amended complaint alleged that Keane usurped the corporate opportunity of 

acquiring The Mail House and, since that acquisition, he has solicited and served customers of 

AMG with his competing company. AMG seeks the imposition of a constructive trust on The 

Mail House business to be held for the benefit of AMG. 

¶ 45 The circuit court erred in granting Keane’s section 2-615 motion to dismiss as to count I

of the amended complaint. We find that AMG properly alleged a claim for breach of fiduciary 

duty against Keane. 

¶ 46 Tortious Interference With Prospective Economic Advantage 

¶ 47 Next, AMG argues that count II of its amended complaint properly alleged that Keane’s 

misappropriation of The Mail House opportunity constituted tortious interference with 

prospective economic advantage. To state a claim for tortious interference with prospective 

economic advantage, a plaintiff must show “(1) the existence of a valid business relationship or 

expectancy; (2) knowledge of the relationship or expectancy on the part of the interferer; (3) an 

intentional and malicious interference inducing or causing a breach of termination of the 

relationship or expectancy; and (4) resultant damage to the party whose relationship has been 

disrupted.” Small v. Sussman, 306 Ill. App. 3d 639, 648 (1999). “A plaintiff states a cause of 

action only if he alleges a business expectancy with a specific third party as well as action by the 

defendant directed toward that third party.” Associated Underwriters of America Agency, Inc. v. 

McCarthy, 356 Ill. App. 3d 1010, 1020 (2005). “A claim of intentional interference ‘must set 

forth facts which suggest that defendant acted with the purpose of injuring plaintiff’s 
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expectancies.’ ” Kapotas v. Better Government Ass’n, 2015 IL App (1st) 140534, ¶ 80 (quoting 

J. Eck & Sons, Inc. v. Reuben H. Donnelley Corp., 213 Ill. App. 3d 510, 515 (1991)). 

¶ 48 In this case, taking the pleadings as true, AMG alleged the existence of a valid business 

expectancy in that Hermann and Keane had discussed whether The Mail House was a viable 

acquisition target and that AMG had remained interested in acquiring The Mail House. AMG 

alleged that Keane had knowledge of the expectancy, as he discussed the potential acquisition 

with Hermann as early as 2013. As discussed more fully above, the amended complaint alleged 

facts showing that Keane acted with the purpose of injuring AMG’s expectancies in that he 

usurped a corporate opportunity for his own benefit and to the detriment of AMG. In discussing 

the scope and nature of Keane’s fiduciary duties, numerous factual questions exist regarding his 

conduct prior to his resignation from AMG. His acquisition of The Mail House terminated 

AMG’s alleged expectancy to acquire the same business. Finally, AMG alleged that it incurred 

damages from Keane’s actions in the form of customers who defected to The Mail House after 

Keane acquired it. 

¶ 49 Accordingly, we find AMG sufficiently pled a claim for tortious interference with 

prospective economic advantage. We find the circuit court erred in dismissing count II of the 

amended complaint. 

¶ 50 CONCLUSION

¶ 51 We reverse the judgment of the circuit court and remand the cause for further 

proceedings.

¶ 52 Reversed and remanded.