Court Opinion

ID: 2829107
Source: CourtListenerOpinion
Date Created: 2015-08-20 22:08:50.937283+00
Date Added: 2024-06-11T12:25:33.416812
License: Public Domain

2015 IL App (1st) 142219
                                          No. 1-14-2219
                                   Opinion filed August 20, 2015
                                                                 Fourth Division
______________________________________________________________________________

                                             IN THE
                            APPELLATE COURT OF ILLINOIS
                                        FIRST DISTRICT
______________________________________________________________________________

                                              )             Appeal from the
MAREK GAJDA and                               )             Circuit Court of
TOMASZ STANKIEWICZ,                           )             Cook County.
                                              )
          Plaintiffs-Appellants,              )             No. 13 L 10668
                                              )
                                              )             Honorable
v.                                            )             Eileen O'Neil Burke,
                                              )             Judge, presiding.
STEEL SOLUTIONS FIRM, INC.                    )
and MARIOLA BARABAS,                          )
                                              )
          Defendants-Appellees.
______________________________________________________________________________

          JUSTICE COBBS delivered the judgment of the court, with opinion.
          Presiding Justice Fitzgerald Smith and Justice Howse concurred in the judgment and
          opinion.

                                            OPINION

¶1     Plaintiffs , Mark Gajda and Tomasz Stankiewicz (plaintiffs) filed a five-count complaint

against Steel Solutions Firm, Inc. (Steel Solutions) and Mariola Barabas (collectively,

defendants), seeking recovery under the Illinois Employee Classification Act (the Act) (820

ILCS 185/60 (West 2012)). The complaint essentially alleged that Barabas Co., Inc. and Barabas

Steel Co. were predecessor corporations of Steel Solutions and thus plaintiffs could impute the
No. 1-14-2219

illegal conduct of Barabas Co. and Barabas Steel Co. to Steel Solutions through piercing Steel

Solutions' corporate veil. Plaintiffs further alleged that they were employed by Steel Solutions, or

one of its predecessor companies, between January 1, 2008, and October 22, 2010, and that

during their employment they were misclassified as independent contractors. In addition,

plaintiffs alleged that they were wrongfully terminated as an act of retaliation for filing a

complaint with the Illinois Department of Labor (IDOL). Subsequently, on defendants' motion,

the court dismissed count I, which sought to pierce the corporate veil of Steel Solutions, without

prejudice and dismissed counts II through V with prejudice. Plaintiffs filed a motion to

reconsider, which was denied, and count I of the complaint was then dismissed with prejudice.

¶2          On appeal, plaintiffs assert the trial court improperly denied their motion for

reconsideration of the May 8, 2014, order. Specifically, plaintiffs argue that the court erred when

it dismissed count I under section 2-615 of the Illinois Code of Civil Procedure (the Code)

because they sufficiently pleaded the grounds for veil piercing and that it was improper for the

court to dismiss counts II through V under section 2-619(a)(9) of the Code because defendants

failed to identify an affirmative matter defeating the statutory violation claims. 735 ILCS 5/2-

615; 2-619(a)(9)(West 2012). Plaintiffs assert, arguendo, that even if the complaint was properly

dismissed, all counts should have been dismissed without prejudice. For the following reasons,

we reverse and remand the matter for further proceedings consistent with this order.

¶3                                                  BACKGROUND

¶4          On September 25, 2013, plaintiffs filed a five-count complaint against defendants under

the Act. The first count of the complaint was captioned "Piercing the Corporate Veil" and alleged

that Teofil Barabas 1 was the sole shareholder and owner/operator of Barabas Steel Co. and

Barabas Co. and that Mariola Barabas was the sole shareholder and owner/operator of Steel
1
    Teofil Barabas is not a party to this lawsuit. He filed for Chapter 7 bankruptcy in 2011.

                                                            -2-
No. 1-14-2219

Solutions. The complaint further alleged that Teofil and Mariola did not abide by corporate

formalities and operated all three corporations as their alter egos. Specifically, paragraphs 10

through 16 of the complaint alleged:

           "10. At all times relevant hereto, Barabas Steel Co., Barabas Co. and Steel Solutions

       all performed the exact same services – fabrication and installation of steel and

       ornamental metal.

           11. The business addresses of each of the three corporations are or were 4445, 4447

       and 4451 West Kinzie Street, Chicago, Illinois. Each address belongs to one single

       warehouse building. Each corporation operated out of the same building/location.

           12. Since its incorporation in January 2010, Steel Solutions operated simultaneously

       with Barabas Steel Co. and Barabas Co. performing the same steel fabrication services,

       out of the same business location, and used much of the same equipment and tools used

       by Barabas Steel Co. and Barabas Co.

           13. At all times relevant hereto, Defendant Mariola Barabas and Teofil Barabas used

       all three corporations, Steel Solutions, Barabas Steel Co. and Barabas Co., as their alter

       egos to conduct their personal business.

           14. Mariola Barabas and Teofil Barabas failed to keep an arm's-length relationship

       between Steel Solutions, Barabas Steel Co. and Barabas Co., and instead treated all three

       corporations as one single instrumentality for their own profit and gain.

           15. Mariola Barabas and Teofil Barabas, failed to respect and adhere to the separate

       corporate status and existence of each of the three corporations, but instead improperly

       treated all three corporations as one single entity by, inter alia:

                a. Co-mingling funds between corporations;

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No. 1-14-2219

                b. Co-mingling equipment and other physical assets between corporations;

                c. Paying employees employed by one corporation out of the account and/or funds

           of one of the other corporations;

                d. Making improper loans and/or "sales" of assets from one corporation to

           another;

                e. Contracting for construction projects under the name of one corporation while

           using employees hired and paid by one of the other corporations to perform the

           services of that construction contract; and/or

                f. Operating each of the three purportedly separate and distinct corporations out of

           the same Kinzie Avenue location.

           16. In its Final Determination, dated September 20, 2012, following an investigation

       and hearing, the Illinois Department of Labor ("IDOL") concluderd [sic] that Steel

       Solutions is 'a continuation of Barabas Steel Company: the same (or substantially same)

       workers perform the same services for the same family of owners from the same location

       using the same (or substantially same) tools and equipment under the direction and

       supervision of the same family member.' "

¶5     Counts II through V sought recovery for statutory violations of the Act based on

misclassification and retaliation. Each of these counts specifically incorporated and realleged the

factual assertions underlying the request to pierce the corporate veil set forth in count I. Each of

these counts also alleged that during plaintiffs' employment at Steel Solutions, Mariola and

Teofil Barabas willfully and deliberately failed and/or refused to classify plaintiffs as employees

in violation of section 10 of the Act. 820 ILCS 185/10 (West 2012).

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No. 1-14-2219

¶6     Plaintiffs performed metal fabrication work for defendants, including "fabricating stair

railings and other metal items at [d]efendants' shop located at 4445-4451 West Kinzie Street, and

transporting and installing said materials at various construction sites." According to plaintiffs,

Steel Solutions was a "contractor," and plaintiffs were under the control and direction of Steel

Solutions. Plaintiffs alleged, among other things, that they performed work under Steel Solutions'

name and not their own personal business names, they were not engaged in an independently

established trade, occupation, or business, and that they did not share in the profits or bear the

losses of Steel Solutions. In addition, Steel Solutions represented to its customers that plaintiffs

were its employees, plaintiffs did not furnish the equipment or obtain the licenses for the projects

they worked on, and they were subject to a specific number of hours to work per week. Thus,

under the Act, they were employees of Steel Solutions and its predecessor corporations, not

independent contractors. Furthermore, as a result of the misclassification, plaintiffs lost wages,

salary, and other compensation.

¶7     In the fourth and fifth counts, plaintiffs claimed defendants violated the Act by retaliating

against plaintiffs by firing them for filing a complaint with the IDOL. Plaintiffs alleged that Steel

Solutions was notified of the complaint on October 19, 2010, and that on October 22, 2010, both

plaintiffs were terminated in violation of the Act. 820 ILCS 185/55 (West 2012).

¶8     Defendants filed a combined motion to dismiss the complaint citing section 2-619.1 of

the Code. 735 ILCS 5/2-619.1 (West 2012). In the motion, defendants argued that count I of

plaintiffs' complaint should be dismissed under section 2-615 as not legally sufficient because

piercing the corporate veil is not a cause of action, but rather, a remedy. Defendants further

argued that counts I through V should be dismissed under section 2-619 because plaintiffs were

never employed by Steel Solutions and that Steel Solutions was a completely independent and

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No. 1-14-2219

separate company from both Barabas Co. and Barabas Steel Co. Additionally, defendants

asserted that the Act does not provide for individuals to be sued, and therefore Mariola could not

be personally liable.

¶9     Defendants pointed out that plaintiffs were employed by Barabas Co. and Barabas Steel

Co., which were owned by Teofil Barabas, Mariola's husband. Defendants further argued that

Teofil is the proper defendant but plaintiffs did not sue him because he filed for bankruptcy. In

an affidavit attached to the motion, Mariola explained that she is the President, Secretary, and

registered agent of Steel Solutions and that she never worked for Barabas Steel Co. The affidavit

stated that Steel Solutions was incorporated on January 26, 2010, after the alleged illegal conduct

purportedly began, and that Steel Solutions received a loan from a Dariusz Barabas to purchase

certain assets for the company. The affidavit listed the materials and services that Steel Solutions

purchased from Barabas Steel with the amounts paid for them, demonstrating that there was a

proper accounting for all transactions between the two companies and that they were separate.

¶ 10   Defendants also attached the IDOL "Determination Under the Employee Classification

Act Following an Informal Conference" to their motion. The determination was sent to "Barabas

Steel Company now known as Steel Solutions Firm, Inc." It explained that the IDOL received a

complaint on or about August 30, 2010, alleging Barabas Steel Co. violated the Act. Although

Barabas Steel Co. d/b/a Steel Solutions' attorney filed an appearance on November 30, 2010, and

moved to dismiss the complaint, it failed to promptly send the documents the IDOL requested.

Subsequently, the IDOL issued a subpoena and notice of Preliminary Investigative Findings

finding that Steel Solutions misclassified plaintiffs as independent contractors. On January 18,

2012, the IDOL issued a Final Determination-Notice of Violation to Barabas Steel Co. and

Barabas Steel Co.'s attorney requested an informal hearing to review IDOL's final

                                               -6-
No. 1-14-2219

determinations. That hearing occurred on May 14, 2012. The IDOL's informal investigation

revealed that Barabas Steel Co. ceased operations in January 2010 and thereafter sold its assets to

Steel Solutions, a company solely owned by Mariola Barabas, Teofil's wife, for approximately

$80,000. Additionally, the IDOL noted:

                "Barbaras Company, Barabas Steel Company and Steel Solutions Firm, Inc. all

       performed the same type of work: fabrication and installation of steel and ornamental

       metal. Steel Solutions Firm, Inc. operates on the site formerly occupied by Barabas Steel

       Company, using much (if not most) of the same equipment and tools used by Barabas

       Steel Company. Mr. Barabas currently works for '[his] wife's company.' "

The Final Determination also revealed that Gajda testified at the hearing that he received

paychecks signed by Mariola before he was fired. Ultimately, the IDOL found that Steel

Solutions, Barabaras Co., and Barabas Steel Co. were a single entity and issued a penalty against

it for $146,000.

¶ 11   On May 8, 2014, the court dismissed count I of the complaint under section 2-615 of the

Code without prejudice; gave leave to amend that count within 21 days, and dismissed counts II

through V under section 2-619 of the Code with prejudice. Subsequently, plaintiffs filed a

motion to reconsider and on July 8, 2014, the court denied the motion and dismissed count I with

prejudice.

¶ 12                                     ANALYSIS

¶ 13   On appeal, plaintiffs contend that the court erred in denying their motion to reconsider

the May 8, 2014, order dismissing the complaint. "When reviewing a motion to reconsider that

was based only on the trial court's application (or purported misapplication) of existing law ***

our standard of review is de novo." People v. $280,020 United States Currency, 372 Ill. App. 3d

                                               -7-
No. 1-14-2219

785, 791 (2007) (citing Muhammad v. Muhammad-Rahmah, 363 Ill. App. 3d 407, 415 (2006)).

Plaintiffs' motion to reconsider asserted that the court misapplied existing law, thus, the appellate

court reviews the circuit court's denial of the motion to reconsider de novo.

¶ 14                                 Personal Liability

¶ 15   As an initial matter, we address defendant's argument that counts I through V were

properly dismissed as to Mariola because she cannot be personally liable under the Act. Plaintiffs

named Mariola as a defendant and asserted in their complaint that Steel Solutions' corporate veil

can be pierced to reach her personally. Defendants point out that the Act does not provide for

liability of individuals. In support, they cite Jaworski v. Master Hand Contractors, Inc., No. 09

C07255, 2013 WL 1283534, at *9 n.12 (N.D. Ill. Mar. 27, 2013) and Chicago Regional Council

of Carpenters v. Joseph J. Sciamanna, Inc., No. 08 C 4636, 2008 WL 4696162 (N.D. Ill. Oct. 23,

2008), which held that the Act does not provide for personal liability. We note that plaintiffs

have failed to make any argument regarding whether Mariola could be personally liable and

therefore, the issue is waived. See Mayfield v. ACME Barrel Co., 258 Ill. App. 3d 32, 37 (1994)

(issues not raised by appellant in brief are generally considered waived); Ill. S. Ct. R. 341(h)(7)

(eff. Feb. 6, 2013). Accordingly, we need not resolve the issue.

¶ 16                        Dismissal of Count I Under Section 2-615

¶ 17   Next, we address plaintiffs' contention that labeling the first count "Piercing the

Corporate Veil" was not fatal to their cause of action. They maintain that form does not control

over substance and where the complaint is factually sufficient and gives notice to the defendants

of the claims against them, it should not be dismissed. Defendants respond that the court

properly dismissed count I because piercing the corporate veil is a remedy and not a separate

cause of action.

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No. 1-14-2219

¶ 18   Count I of plaintiffs' complaint was dismissed under section 2-615 of the Code. A section

2-615 motion challenges the legal sufficiency of a cause of action based on defects apparent on

the face of the complaint. Reynolds v. Jimmy John's Enterprises, LLC, 2013 IL App (4th)

120139, ¶ 25. "In ruling on a section 2-615 motion to dismiss, the court must accept all well-

pleaded facts, as well as any reasonable inferences to be drawn therefrom, as true." O'Callaghan

v. Satherlie, 2015 IL App (1st) 142152, ¶ 18. The court will dismiss a complaint only when there

is no set of facts that would allow the plaintiff to recover. Kilburg v. Mohiuddin, 2013 IL App

(1st) 113408, ¶ 19.

¶ 19   Here, plaintiffs titled count I "Piercing the Corporate Veil." However, as defendants point

out, "[p]iercing the corporate veil is not a cause of action but, rather, a means of imposing

liability in an underlying cause of action." Buckley v. Abuzir, 2014 IL App (1st) 130469, ¶ 9

(citing Peetoom v. Swanson, 334 Ill. App. 3d 523, 527 (2002)). Once a party has a judgment

against a corporation, it can attempt to obtain the judgment from another corporation or

individual by piercing the corporate veil. Id. Plaintiffs did not have a judgment against

defendants or Barabas Co. and Barabas Steel Co., and count I was alleged separately from the

underlying counts. Based on our review of the complaint, count I did not plead piercing the

corporate veil as a remedy, but as its own separate cause of action. Plaintiffs argue that they

sufficiently pleaded the grounds for veil piercing because they alleged specific facts, which,

taken as true, demonstrate the requisite unity of interest and inequitable circumstances necessary

to pierce the corporate veil. However, even accepting as true all well-pleaded facts in the

complaint, plaintiffs could not recover under count I without pleading a legally recognized cause

of action.

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No. 1-14-2219

¶ 20   Plaintiffs also argue that regardless of whether piercing the corporate veil is a cause of

action, defendants admitted the legal sufficiency of piercing the corporate veil in their section 2-

619 motion to dismiss and cannot now argue that the claim is legally insufficient. We reject this

argument for two reasons. First, the motion to dismiss under section 2-619 was asserted as an

alternative to section 2-615. Second, a defendant's motion to dismiss will not be defeated, even if

brought under the wrong section of the Code, where the plaintiff has suffered no prejudice from

the incorrect label. Wallace v. Smyth, 203 Ill. 2d 441, 447 (2002). In this case, plaintiffs did not

suffer any prejudice from defendants moving to dismiss count I under sections 2-615 and 2-619

of the Code because it was clear from the motion that defendants contested the legal sufficiency

of piercing the corporate veil as a separate claim. Thus, plaintiffs were able to properly respond,

and the court did not err in dismissing count I of plaintiffs' complaint with prejudice on that

ground. See id.

¶ 21   Plaintiffs further assert that this court has approved the practice of alleging piercing the

corporate veil as a separate count in order to impute liability for the underlying claims to

successor corporations. In support they cite Fontana v. TLD Builders, Inc., 362 Ill. App. 3d 491

(2005) and Workforce Solutions v. Urban Services of America, Inc., 2012 IL App (1st) 111410.

However, in each of those cases, although the trial court did not dismiss counts alleging piercing

the corporate veil, it did not treat piercing the corporate veil as a separate claim–and it could not–

because piercing the corporate veil is not a legally recognized cause of action. Rather, the trial

court incorporated the facts from the veil piercing count to support veil piercing as a remedy for

the underlying claims or judgments. Consistent with these cases, plaintiffs argue that form

should not control over substance, and the court here should have incorporated the facts from

count I as an argument to pierce the corporate veil to obtain a potential judgment for counts II-V.

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No. 1-14-2219

They argue that separating veil piercing into its own count is not grounds for dismissal of the

entire complaint with prejudice. We agree. Counts II through V incorporated and realleged the

veil piercing allegations set forth in count I. Thus, as discussed below, the court erred when it

refused to consider the import of those facts and dismissed counts II through V with prejudice.

¶ 22                        Factual Allegations for Piercing the Corporate Veil

¶ 23   A corporation is a legal entity that shields individuals, shareholders, and other entities

from unlimited liability based on the corporation's conduct. Fontana v. TLD Builders, Inc., 362

Ill. App. 3d 491, 500 (2005). " 'However, a court may disregard a corporate entity and pierce the

veil of limited liability where the corporation is merely the alter ego or business conduit of

another person or entity.' " Id. (quoting Peetoom v. Swanson, 334 Ill. App. 3d 523, 527 (2002)).

Courts are reluctant to pierce the corporate veil and will only do so when "(1) there is such a

unity of interest and ownership that the separate personalities of the corporations no longer exist

and (2) circumstances exist so that adherence to the fiction of a separate corporate existence

would sanction a fraud, promote injustice, or promote inequitable consequences." Gass v. Anna

Hospital Corp., 392 Ill. App. 3d 179, 186 (2009) (citing Fontana, 362 Ill. App. 3d at 500).

¶ 24   Although piercing the corporate veil is often used to reach the assets of an individual for

conduct of a corporation, courts may pierce the corporate veil of two affiliated or "sister"

corporations. Tower Investors, LLC v. 111 East Chestnut Consultants, Inc., 371 Ill. App. 3d

1019, 1033 (2007). The court considers several factors to determine if there is a unity of

ownership and interest. It considers: "(1) inadequate capitalization; (2) failure to issue stock; (3)

failure to observe corporate formalities; (4) nonpayment of dividends; (5) insolvency of the

debtor corporation; (6) nonfunctioning of the other officers or directors; (7) absence of corporate

records; (8) commingling of funds; (9) diversion of assets from the corporation by or to a

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No. 1-14-2219

stockholder or other person or entity to the detriment of creditors; (10) failure to maintain arm's-

length relationships among related entities; and (11) whether, in fact, the corporation is a mere

façade for the operation of the dominant stockholders. [Citation.]" (Internal quotation marks

omitted.) Buckley v. Abuzir, 2014 IL App (1st) 130469, ¶ 15.

¶ 25   Here, plaintiffs alleged that Steel Solutions operated out of the same location as Barabas

Co. and Barabas Steel Co. and used much of the same equipment. Plaintiffs further claimed,

among other things, that Mariola and Teofil used the corporations as their alter egos and treated

them as one single entity. Specifically, they asserted that there was comingling of funds,

comingling of equipment, employees of one corporation were paid by funds of the other

corporations, employees of one corporation worked on the other corporations' projects, and that

there were improper loans or sales of assets from one corporation to another. Additionally,

because plaintiffs cannot obtain a judgment from Barabas Co. or Barabas Steel Co., which have

been dissolved, there would be an unjust result if the court does not pierce the corporate veil.

These facts, when taken as true, as the court must when reviewing a motion to dismiss, are

sufficient to support an argument that plaintiffs could pierce the corporate veil to impute liability

for Barabas Co. and Barabas Steel Co.'s conduct to Steel Solutions.

¶ 26   Additionally, plaintiffs alleged that Steel Solutions is the successor corporation of

Barabas Co. and Barabas Steel Co. Usually successor corporations that purchase another

corporation's assets are not liable for that corporation's debt. Workforce Solutions v. Urban

Services of America, Inc., 2012 IL App (1st) 111410, ¶ 86. However, there are exceptions that

allow a court to hold a successor corporation liable: "(1) where there is an express or implied

agreement of assumption [of liability]; (2) where the transaction amounts to a consolidation or

merger of the purchaser or seller corporation; (3) where the purchaser is merely a continuation of

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No. 1-14-2219

the seller; or (4) where the transaction is for the fraudulent purpose of escaping liability for the

seller's obligations. [Citation.]" (Internal quotation marks omitted.) Id. Although plaintiffs did

not explicitly allege all the elements of successor corporation liability, they did allege facts

regarding Steel Solutions' purchase of Barabas Steel Co.'s assets, overlap of management and

employees, and comingling of funds and equipment, which could support an argument that Steel

Solutions was a mere continuation of Barabas Co. and Barabas Steel Co. or that it was created

for the fraudulent purpose of escaping liability for Barabas Steel Co.'s obligations. Plaintiffs'

complaint may not have been artful, however, it contained sufficient facts to show that the

deficiencies could have been cured if plaintiffs had been permitted to amend counts II through V

of the complaint to allege veil piercing as a remedy for the statutory violations, rather than as a

separate claim.

¶ 27                   Dismissal of Counts II-V Under Section 2-619(a)(9)

¶ 28   Next, plaintiffs argue that the court erred in dismissing counts II through V under section

2-619(a)(9) of the Code because defendants did not raise an affirmative matter that defeats the

claim. Plaintiffs maintain that the affidavit supplied by Mariola merely refutes plaintiffs' factual

allegations, which is insufficient to defeat a claim on a motion to dismiss. Alternatively,

plaintiffs argue that if the complaint was properly dismissed, it should not have been dismissed

with prejudice. Defendants respond that the court properly dismissed counts II through V under

section 2-619(a)(9) of the Code because Steel Solutions never employed plaintiffs and is a

completely separate company from Barabas Co. and Barabas Steel Co.

¶ 29   A motion for involuntary dismissal under section 2-619(a)(9) of the Code admits the

legal sufficiency of the complaint, accepts all well-pleaded facts, and asserts an affirmative

matter outside of the complaint that bars or defeats the cause of action. 735 ILCS 5/2-

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No. 1-14-2219

619(a)(9)(West 2012); Reynolds v. Jimmy John's Enterprises, LLC, 2013 IL App (4th) 120139, ¶

31. In a section 2-619(a)(9) motion, the movant is essentially saying " ' "Yes, the complaint was

legally sufficient, but an affirmative matter exists that defeats the claim." ' " Id. (quoting Winters

v. Wangler, 386 Ill. App. 3d 788, 792 (2008)). The defendant has the initial burden of

establishing that that there is an affirmative matter that defeats the claim. Kedzie & 103rd

Currency Exchange, Inc. v. Hodge, 156 Ill. 2d 112, 116 (1993). If the defendant successfully

asserts an affirmative matter, the burden shifts to the plaintiff to demonstrate that the defense is

unfounded or requires the resolution of a material fact. Id. If the plaintiff fails to meet the shifted

burden, the motion may be granted and the complaint dismissed. Id. Where the grounds for

dismissal do not appear on the face of the complaint, the motion must be supported by an

affidavit. Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469, 485 (1994). Generally, when an

affidavit under 2-619(a)(9) properly asserts facts that would defeat the claim, a counter-affidavit

is needed or they are deemed admitted. Kedzie & 103rd Currency Exchange, Inc., 156 Ill. 2d at

116.

¶ 30   An affirmative matter for a 2-619(a)(9) motion cannot merely refute well-pleaded facts—

it must assert a completely new matter not present in the complaint. Smith v. Waukegan Park

District, 231 Ill. 2d 111, 121 (2008). "[A]n affirmative matter is not the defendant's version of

the facts as such a basis merely tends to negate the essential allegations of the plaintiff's cause of

action." Reynolds v. Jimmy John's Enterprises, LLC, 2013 IL App (4th) 120139, ¶ 34. Rather, it

must assert something more than the evidence that the defendant expects to provide to refute an

ultimate fact. Smith, 231 Ill. 2d at 121.

¶ 31   Generally, it is within the court's discretion to dismiss a complaint pursuant to section 2-

615 or section 2-619 with prejudice. Bruss v. Przybylo, 385 Ill. App. 3d 399, 405 (2008).

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No. 1-14-2219

However, "[w]here a claim can be stated, the trial court abuses its discretion if it dismisses the

complaint with prejudice and refuses the plaintiff further opportunities to plead." Id. (citing

Muirfield Village-Vernon Hills, LLC v. K. Reinke, Jr., & Co., 349 Ill. App. 3d 178, 195 (2004)).

Moreover, the court favors granting leave to amend a complaint so that the plaintiffs can fully

present their cause. Hofner v. Glenn Ingram & Co., 140 Ill. App. 3d 874, 885 (1985); see also

Illinois Graphics Co., 159 Ill. 2d at 498.

¶ 32    Plaintiffs argue that defendants' section 2-619(a)(9) motion to dismiss is insufficient

because it did not introduce new evidence, but rather, solely provided self-serving rebuttal

evidence. Mariola's affidavit asserted that plaintiffs were never employed by Steel Solutions and

that Steel Solutions and Barabas Co. and Barabas Steel Co. were separate corporate entities. The

affidavit provides detail about Steel Solution's incorporation, debt to an outside lender, and its

purchases from Barabas Steel Co. as well as other companies. When considering the facts

alleged in count I, these allegations do not contain a new matter not raised in the complaint, but

directly refute plaintiffs' contention that Steel Solutions, Barabas Co. and Barabas Steel Co. are

one entity. Consequently, Mariola's affidavit was not sufficient under section 2-619(a)(9)

because it merely is a rebuttal of plaintiff's veil piercing allegations.

¶ 33    According to the court's order, counts II through V were dismissed pursuant to section 2-

619 of the Code. Therefore, the court necessarily found that an affirmative matter in Mariola's

affidavit defeated the claim. Based on the arguments in the pleadings and the information in the

affidavit, it appears that the court decided that without the veil piercing count, the remainder of

plaintiffs' complaint could not demonstrate that Steel Solutions and Barabas Co. and Barabas

Steel Co. were the same entity, and thus, Steel Solutions was an improper defendant. This was

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No. 1-14-2219

error. As explained above, all of the facts underlying the request to pierce the corporate veil were

incorporated and realleged in counts II through V.

¶ 34     Without a sufficient affidavit, defendants did not meet their initial burden of asserting an

affirmative matter and plaintiffs were not required to provide a counter-affidavit. Additionally, to

the extent that the court believed amendment could cure any deficiencies in count I, the court

should have granted plaintiffs leave to amend counts II through V. Because with amendment

claims for employee misclassification and retaliation under the ECA could be stated, the court

erred in dismissing these counts with prejudice.

¶ 35                                       IDOL Determinations

¶ 36     Defendants further argue that the trial court was not required to give any credence to the

IDOL findings because no formal hearing was conducted. See Bartlow v. Costigan, 2014 IL

115152 (holding that the ECA required the IDOL to reach a formal decision before the IDOL

could impose liability). We note that although the IDOL determinations in this case were the

result of an informal investigation and related hearing, they occurred in 2012, before the Bartlow

court issued its ruling. Additionally, whether or not the IDOL can impose penalties without a

formal decision does not mean that the results of an informal investigation have no value in the

context of these proceedings. Here, the IDOL determinations emphatically support plaintiffs'

claims, and the court should have considered this evidence when considering whether there were

sufficient facts to support plaintiffs claim.2 Moreover, regardless of whether the court considered

the IDOL determinations, we believe that the facts alleged in the complaint alone are sufficient

to survive a motion to dismiss.

2
 When the court considers a section 2-619 motion to dismiss parties can present other proof outside of the pleadings,
therefore the court could properly consider this evidence. Kedzie & 103rd Currency Exchange, Inc., 156 Ill. 2d at
116.

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No. 1-14-2219

¶ 37   Finally, defendants seem to make the argument that plaintiffs did not exhaust their

administrative remedies before filing the complaint. However, they also correctly point out that a

plaintiff is not required to exhaust their administrative remedies before they can bring a claim

under the ECA in the circuit court. 820 ILCS 185/60 (West 2012). Therefore, we deem the issue

to have been conceded.

¶ 38                                  CONCLUSION

¶ 39   For the foregoing reasons, we affirm in part, reverse in part and remand for further

proceedings consistent with the views expressed in this order.

¶ 40   Affirmed in part and reversed in part. Cause remanded.

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