Court Opinion

ID: 3146041
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:12:41.189632+00
Date Added: 2024-06-11T12:38:49.748681
License: Public Domain

FOURTH DIVISION
                                                  November 9, 2006

No. 1-05-2824

AON CORPORATION & AON CONSULTING, INC.   )    Appeal from the
                                         )    Circuit Court of
          Plaintiffs-Appellants,         )    Cook County.
                                         )
                v.                       )
                                         )
ANDREA UTLEY,                            )    Honorable
                                         )    Paddy H. McNamara,
          Defendant-Appellee.            )    Judge Presiding.

     PRESIDING JUSTICE QUINN delivered the opinion of the court:

     Plaintiffs Aon Corporation (Aon) and Aon Consulting, Inc.

(Aon Consulting), appeal from the circuit court's judgment

granting defendant Andrea Utley's motion to dismiss pursuant to

section 2-619 of the Illinois Code of Civil Procedure (735 ILCS

5/2-619 (West 2004)).   On appeal, plaintiffs argue that the

circuit court erroneously determined that it lacked personal

jurisdiction over defendant and that if it had jurisdiction, it

would have granted a motion for forum non conveniens.

     On January 15, 1997, defendant, a resident of California,

became an employee of Aon Consulting, a subsidiary of Aon, when

Aon Consulting bought defendant's then employer, Alexander &

Alexander Services, Inc.   Defendant served as senior vice

president of Aon Consulting and provided insurance consulting

services to its clients.   Aon and Aon Consulting are both

incorporated in Delaware and headquartered in Illinois.
No. 1-05-2824

     On May 27, 1999, defendant signed a stock option agreement

with Aon which provided that she would receive an option to buy

1,000 shares of Aon stock at $65.1563 per share.      In exchange,

defendant agreed to certain conditions, including covenants not

to solicit Aon clients, not to enter into a business relationship

with Aon clients, and not to hire Aon employees for two years

should she leave the company.   The covenant not to solicit

stated:

          "The Employee hereby covenants and agrees

          that, except with the prior written consent

          of Aon, the Employee will not for a period of

          two (2) years after the end of employment

          compete directly or indirectly in any way
                                              1
          with the business of the Company.       For the

          purposes of this Agreement, 'compete directly

          or indirectly in any way with the business of

          the Company' means to enter into or attempt

          to enter into (on Employee's own behalf or on

          behalf of any other person or entity) any

     1
      The agreement defines "Company" as "the subsidiary(ies) and

affiliate(s) of Aon to which Employee devoted substantially all

of his business time and attention at any time during the twenty-

four (24) month period prior to the termination of Employee's

employment."

                                -2-
No. 1-05-2824

          business relationship of the same type or

          kind as the business relationship which

          exists between the Company and its clients or

          customers to provide services related to the

          business of the Company for any individual,

          partnership, corporation, association or

          other entity who or which was a client or

          customer for whom the Employee was the

          producer or on whose account Employee worked

          or became familiar with during the twenty-

          four (24) months prior to the end of

          employment."

The agreement further provided that due to the unique character

of defendant's services to Aon, any breach by defendant would

entitle Aon to injunctive relief.     Other notable clauses in the

agreement concerned its modification and the governing law.       The

agreement provided that it could not be "amended, altered or

modified without the prior written consent of both parties and

such instrument must acknowledge that it is an amendment or

modification of this Agreement."     In addition, the agreement

contained a clause captioned "Governing Law and Choice of Forum,"

which stated:

          "The validity, interpretation, construction,

          performance, enforcement and remedies of or

          relating to this Agreement, and the rights

                               -3-
No. 1-05-2824

          and obligations of the parties hereunder,

          shall be governed by and construed in

          accordance with the substantive laws of the

          State of Illinois, without regard to the

          conflict of law principles, rules or statutes

          of any jurisdiction.   Any and every legal

          proceeding arising out of or in connection

          with this Agreement shall be brought in the

          Circuit Court of Cook County of the State of

          Illinois, each party hereby consenting to the
                                                   2
          exclusive jurisdiction of said court."
     Defendant continued her employment at Aon Consulting, and on

April 20, 2001, entered into a nonsolicitation agreement with Aon

Consulting, which was referenced as "the Company" in the

     2
      The previous provision provided that the captions of the

Agreement "are not part of its provisions, are merely for

reference and have no force or effect."

                                 -4-
No. 1-05-2824

agreement.    The agreement allowed defendant to purchase shares of

Aon Consulting's parent company Aon.      In exchange, defendant

again agreed to covenants not to solicit and not to hire.      The

new covenant not to solicit provided in pertinent part:

             "The Employee hereby covenants and agrees

             that, except with the prior written consent

             of the Company, the Employee will not, for a

             period of two (2) years after the end of

             employment, compete directly or indirectly in

             any way with the Business.   For the purposes

             of this Agreement, 'compete directly or

             indirectly in any way with the Business'

             means to enter into or attempt to enter into

             (on Employee's own behalf or on behalf of any

             other person or entity) any business

             relationship of the same type or kind as the

             business relationship which exists between

             Aon Group and its clients or customers to

             provide services related to the Business for

             any individual, partnership, corporation,

             association or other entity who or which was

             a client or customer for whom the Employee

             worked or became familiar with during the

             twenty-four (24) months prior to the end of

             employment.   'Client' or 'customer' means any

                                   -5-
No. 1-05-2824

          person or entity listed on the books of Aon

          Group as such."

The agreement also provided that Aon Consulting would be entitled

to injunctive relief for any breach by defendant.     In addition,

the agreement contained a clause captioned "Governing Law and

Choice of Forum." 3   That provision stated:
          "The validity, interpretation, construction,

          performance, enforcement and remedies of or

          relating to this Agreement, and the rights

          and obligations of the parties hereunder,

          shall be governed by and constructed in

     3
      Like the first agreement, the 2001 agreement contained a

provision which stated that "[t]he captions contained in this

Agreement are not part of its provisions, are merely for

reference and have no force or effect."

                                 -6-
No. 1-05-2824

            accordance with the substantive laws of the

            Employee's state of residence on the

            Effective Date, without regard to the

            conflict of law principles, rules or statutes

            of any jurisdiction."

     On June 4, 2001, Patrick G. Ryan, chairman and chief

executive officer of Aon, sent defendant a letter in which he

informed her that the organization and compensation committee of

the board of directors had approved the grant of stock option

rights to her under the 2001 agreement not to solicit.      The

letter concluded, "Your options - both those granted in 2001, and

those granted before - will be adjusted to preserve their

economic value.    The details of this adjustment are being

developed and will be shared with you later this year."

     On March 29, 2005, plaintiffs filed a complaint in the

circuit court of Cook County, which alleged that defendant

breached the 1999 stock option agreement.    The complaint stated

that on October 11, 2004, defendant resigned from Aon Consulting

to join another insurance consulting company, ABD Insurance

(ABD).    Within weeks of her employment at ABD, defendant

allegedly entered into consulting relationships with two of Aon

Consulting's clients.    Shortly thereafter, defendant entered into

a brokerage relationship through ABD with another Aon Consulting

client.    Plaintiffs claimed that they lost significant business

and suffered substantial damages due to defendant's actions.

                                    -7-
No. 1-05-2824

Plaintiff's complaint did not assert any breach of the 2001

nonsolicitation Agreement.

     In response, defendant filed a motion to dismiss plaintiffs'

complaint pursuant to section 2-619 of the Illinois Code of Civil

Procedure (Code) (735 ILCS 5/2-619 (West 2004)).         In that motion,

defendant claimed that the circuit court lacked personal

jurisdiction over her pursuant to section 2-301 of the Code (735

ILCS 5/2-301 (West 2004)).     She contended that the 1999 stock

option agreement merged with the 2001 agreement not to solicit,

and that the 2001 agreement provided that any breach arising from

it would be brought in her state of residence, which was

California.

     In their response, plaintiffs argued that the 1999 and 2001

agreements did not merge and that,        even if the trial court

determined that they did merge, the provision in the 2001

agreement concerning governing law was not a forum selection or

consent to jurisdiction clause, but was only a "choice of law

provision."     Thus, plaintiffs contended that the circuit court

had personal jurisdiction.

     Following arguments, the trial court granted defendant's

motion to dismiss.    In making its ruling, the trial court stated

in pertinent part:

          "So, I mean, initially I'm ruling against you

          on the contract itself.        I think it's -- both

          contracts have merged.        The one that's

                                  -8-
No. 1-05-2824

          applicable here is the 2001 contract.     That's

          who she worked for at the time they were

          trying to enforce this.

                If I go further, she worked for a

          company that was headquartered in Illinois.

          There seems to be some contact, probably

          enough to uphold long-arm jurisdiction.     If I

          considered it beyond that, I would definitely

          find that the form [sic] nonconvenience [sic]
          analysis, in terms of where the witnesses

          are, convenience to the parties, interpreting

          the laws of California, all of those factors

          would go in favor of transferring this to

          California.

                But I'm finding it -- the basis of my

          finding is that the contract has merged into

          the prior contract, and I believe that any

          ambiguity in terms of form has to be

          construed against Aon.

                Therefore, Plaintiffs -- or the --

                motion to dismiss plaintiffs' complaint

          is granted."

Plaintiffs now appeal that decision.

     A section 2-619 motion to dismiss (735 ILCS 5/2-619 (West

2004)) raises defects or defenses to the complaint and questions

                                -9-
No. 1-05-2824

whether defendant is entitled to judgment as a matter of law.

Gonnella Baking Company v. Clara's Pasta Di Casa, Ltd., 337 Ill.

App. 3d 385, 388 (2003).    "When reviewing a motion to dismiss,

this court must accept all well-pleaded facts as true [citation]

and view them in the light most favorable to the plaintiff."

Gonnella Baking Co., 337 Ill. App. 3d at 388.     We may consider

all facts presented in the pleadings, affidavits, and depositions

found in the record.    Gonnella Baking Co., 337 Ill. App. 3d at

388.   Since the resolution of this case hinges on a matter of

law, our review is de novo.    Gonnella Baking Co., 337 Ill. App.
3d at 388.

       We first address the circuit court's conclusion that the

1999 and 2001 agreements merged.    "Merger occurs when a contract

supercedes and incorporates all or part of an earlier agreement."

 American National Bank & Trust Co. of Chicago v. Bentley, 159

Ill. App. 3d 27, 29 (1987).    When a subsequent contract relates

to the same subject matter and contains the same terms as a

previous contract, the actions of the parties are based on the

provisions of the subsequently executed contract.    Bentley, 159
Ill. App. 3d at 29.

       In this case, although the record shows that the 1999 and

2001 agreements both involved stock option plans, the subject

matter of the agreements differed.     Defendant entered into the

1999 agreement, entitled "Notice of Grant of Stock Option and

Option Agreement," with Aon.    The agreement afforded defendant an

                                -10-
No. 1-05-2824

opportunity to purchase Aon common stock in exchange for

accepting the terms of the agreement.    The agreement provided

details as to the exercise price of the stock, $65.1563 a share,

and a vesting schedule.   The agreement also contained covenants

in which defendant agreed not to solicit Aon customers and not to

hire Aon employees for two years after the termination of her

employment from Aon.

     Subsequently, defendant entered into the 2001 agreement,

dated April 20, 2001, and entitled "Non-Solicitation Agreement,"

with Aon's subsidiary, Aon Consulting.    The agreement again

offered defendant an opportunity to purchase Aon common stock and

contained near identical nonsolicitation and nonhiring clauses.

The 2001 plan, however, did not detail the stock price or the

vesting schedule.   Rather, an attachment to a June 4, 2001,

letter defendant received from Aon president and chief executive

officer Patrick Ryan suggested that the stock plan details were

provided in a separate agreement, entitled "Option Agreement."

The 2001 "Option Agreement" is not found in the record.

     Although the 1999 and 2001 agreements found in the record

both offered defendant an opportunity to purchase Aon common

stock, they did not involve the same subject matter.    The

agreements clearly illustrate that defendant had a separate

opportunity to purchase additional stock in 2001, which had no

effect on the stock she could have purchased pursuant to the 1999

agreement.   We thus find that the agreements did not pertain to

                               -11-
No. 1-05-2824

the same subject matter.

     Moreover, the 1999 agreement explicitly provided that it

"may not be amended, altered or modified without the prior

written consent of both parties and such instrument must

acknowledge that it is an amendment or modification of this

Agreement."   The record here does not contain any written

notification between the parties that the 2001 agreement was

meant to modify the 1999 agreement.

     We, therefore, conclude that the 1999 and 2001 agreements

did not merge but, rather, constituted distinct agreements.    As

such, nothing precluded the circuit court from determining that

defendant violated the 1999 agreement, which contained a choice

of forum clause in which she consented that any legal proceeding

arising from the agreement would be brought in the circuit court

of Cook County of the State of Illinois.

     Nonetheless, whether or not the agreements merged, we

conclude that the circuit court erred in dismissing plaintiffs'

claims.   The circuit court erroneously read the 2001 agreement to

contain a choice of forum provision in which the parties

allegedly consented that all legal proceedings arising from the

contract would be brought in defendant's state of residence,

which was California.   The record, however, shows that although

the 2001 agreement contained a provision entitled "Governing Law

and Choice of Forum," unlike the identically entitled provision

in the 1999 agreement, which denoted that Illinois law governed

                               -12-
No. 1-05-2824

and exclusive jurisdiction existed in the circuit court of Cook

County of the State of Illinois, the 2001 provision only stated

that the substantive law of the employee's state of residence

would govern.   Thus, the 2001 agreement did not contain a choice

of forum clause, which is distinct from a choice of law clause

(In re Marriage of Walker, 287 Ill. App. 3d 634, 639 (1997)).

     As such, even if the 1999 and 2001 agreements merged, the

only choice of forum to which the parties consented was the

circuit court of Cook County.   We, therefore, find that the

circuit court had personal jurisdiction in this case.

     In the alternative, defendant argues in this court that the

1999 choice of forum clause was not enforceable.   We disagree.

     A choice of forum or forum selection clause is prima facie

valid.    Dace International, Inc. v. Apple Computer, Inc., 275
Ill. App. 3d 234, 239 (1995).   The party objecting to the

clause's enforcement is required to show that the litigation in

the selected forum would be so burdensome that no real

opportunity existed to litigate the issues in a fair manner and

that the clause's enforcement essentially deprives the party of

access to the courts.   Dace International, Inc., 275 Ill. App. 3d
at 239.   To determine the reasonableness of a forum selection

clause, courts should consider: (1) the law that governs the

formation and construction of the contract, (2) the residency of

the parties, (3) the place of execution and/or performance of the

contract, (4) the location of the parties and their witnesses,

                                -13-
No. 1-05-2824

(5) the inconvenience to the parties of any particular location,

and (6) whether the clause was bargained for.      Calanca v. D & S

Manufacturing Co., 157 Ill. App. 3d 85, 88 (1987).

     We find that viewing the factors set forth in Calanca, the

forum selection clause in the 1999 agreement was valid.      As

previously discussed, the 1999 and 2001 agreements did not merge,

and thus plaintiffs could have sued defendant for breach only of

the 1999 agreement.     Having reached that conclusion, a review of

the 1999 agreement shows that it explicitly provided that the law

governing the agreement was Illinois law.      Thus, the first factor

favors plaintiff.

     The second factor is a draw.       Although defendant resides in

California and plaintiff maintains an office there, plaintiff is

headquartered in Illinois.

     The third factor favors defendant.      The record shows that

the agreement was executed and performed in California, where

defendant was employed.

     Although defendant contends that the fourth factor also

favors her, she fails to identify any witnesses who reside in

California.     Conversely, the record contains the affidavit of

Paul A. Valencia, human resources director, executive

compensation, for Aon.     In that affidavit, Valencia states that

potential witnesses who would testify for plaintiff about the

stock option agreements, including Maxine Bonn, Denise Callahan

Kaluza, Roger     Vaughn, and herself, all reside near Chicago.

                                 -14-
No. 1-05-2824

     As for the fifth factor, defendant neither provides any

support for her contention that litigation in Illinois would be

inconvenient nor suggests that the inconvenience would prevent

her from having her day in court.     Although litigation in

California would clearly be more convenient for defendant, mere

inconvenience does not serve as a basis for voiding the forum

selection clause.   Dace International, Inc., 275 Ill. App. 3d at

239-40.

     Finally, the sixth factor does not favor defendant.       As

defendant contends, it does not appear that the forum selection

clause was reached through arm's-length negotiation but, rather,

was boilerplate language in the agreement.     That said, unlike

Mellon First United Leasing v. Hansen, 301 Ill. App. 3d 1041,
1046 (1998), upon which defendant relies, she was not an

inexperienced business owner "akin to an ordinary consumer" in a

small business transaction who was unaware of a forum selection

clause hidden on the back of a page of a contract.     Rather, she

was an experienced businesswoman who neither objected to nor

attempted negotiation with regard to a forum selection clause

that was clearly legible on the front of page five of the six-

page 1999 agreement.   Moreover, the agreement had no effect on

defendant's employment status, but simply offered her an

opportunity to purchase Aon stock.     For those reasons, we decline

to invalidate the forum selection provision.     See Dace
International, Inc., 275 Ill. App. 3d at 240.

                               -15-
No. 1-05-2824

     Having concluded that the circuit court had jurisdiction in

this case due to a valid forum selection clause, we also reject

the circuit court's finding that dismissal would still have been

appropriate in this case based on forum non conveniens.     Rather,

we find that where defendant agreed to a valid forum selection

clause, she waived any arguments based on forum non conveniens.

     Our ruling finds support in language found in Dace

International, Inc., 275 Ill. App. 3d at 239-40.    In that case,

this court reviewed a circuit court's decision to grant a

defendant's section 2-619 motion to dismiss a plaintiff's breach

of contract claim where the defendant alleged that a forum

selection clause in the contract designated California as the

forum for all litigation arising from the contract.    On appeal,

the plaintiff contended that the clause was unenforceable because

under the Calanca factors, Illinois was the more convenient and
appropriate forum for the action.    In rejecting that argument,

this court stated:

          "[R]elative inconvenience has been routinely

          rejected as a basis for voiding forum

          selection clauses: '[T]he question *** is not

          the most convenient place for trying these

          suits; it is whether the defendants consented

          to being sued in [a particular forum] and by

          doing so waived their right to object to the

          jurisdiction of the courts *** over them.' "

                              -16-
No. 1-05-2824

           Dace International, Inc., 275 Ill. App. 3d

          at 239-40, quoting Northwestern National

          Insurance Company v. Donovan, 916 F.2d 372,

          375 (7th Cir. 1990).

This court thereafter affirmed the circuit court's ruling where

we determined that the plaintiff failed to prove that the forum

selection clause was unreasonable.

     We acknowledge that our analysis in Dace International, Inc.

concerned the validity of a forum selection clause, not whether a

party waives its right to file a motion to dismiss for forum non

conveniens by virtue of signing a contract that embodied a valid

forum selection clause.   Our reliance, however, on Donovan in
analyzing the validity of the forum selection clause in Dace

supports such a conclusion.

     In Donovan, the United States Court of Appeals for the

Seventh Circuit reversed the ruling of the District Court for the

Eastern District of Wisconsin which had dismissed the plaintiff's

breach of contract action based on the district court's refusal

to enforce the forum selection clause in the parties'

indemnification agreement.    The court of appeals first addressed

the validity of the forum selection clause and in doing so

expressed concern as to such a clause's effect on a third party.

 The court of appeals concluded, however, that where "that

possibility is slight, the clause should be treated like any

other contract."   Donovan, 916 F.2d at 376.   The court of Appeals

                                 -17-
No. 1-05-2824

then determined that the forum selection clause was enforceable

after which it declared that,

          "The signing of a valid forum selection

          clause is a waiver of the right to move for a

          change of venue on the ground of incon-

          venience to the moving party. [Citation.]    If

          there is inconvenience to some third party of

          which that third party may not even be aware,

          or to the judicial system itself, then either

          party to the suit is free to move for a

          change of venue.   But one who has agreed to

          be sued in the forum selected by the

          plaintiff has thereby agreed not to seek to

          retract his agreement by asking for a change

          of venue on the basis of costs or

          inconvenience to himself; such an effort

          would violate the duty of good faith that

          modern law reads into contractual

          undertakings."   Donovan, 916 F.2d at 378.
     Although the holding in Donovan pertained to a motion to

change venue under 28 U.S.C. ' 1404(a) (2000), we find it

persuasive.   In the case at bar, there is no conceivable effect

that the 1999 forum selection clause would have on a third party.

 Thus, where we have determined that the forum selection clause

was valid, we find that the circuit court erred in concluding

                                -18-
No. 1-05-2824

that defendant could succeed on a motion to dismiss based on

forum non conveniens where she was a party to the 1999 agreement.

     Accordingly, we reverse the judgment of the circuit court of

Cook County and remand this case for further proceedings

consistent with this opinion.

     Reversed and remanded.

     NEVILLE and MURPHY, JJ., concur.

                                -19-