Court Opinion

ID: 9370752
Source: CourtListenerOpinion
Date Created: 2023-02-14 18:03:51.428471+00
Date Added: 2024-06-11T17:16:23.429238
License: Public Domain

2023 IL App (5th) 210377
             NOTICE
 Decision filed 02/14/23. The
 text of this decision may be               NO. 5-21-0377
 changed or corrected prior to
 the filing of a Peti ion for                  IN THE
 Rehearing or the disposition of
 the same.
                                   APPELLATE COURT OF ILLINOIS

                                          FIFTH DISTRICT

ARCHFORD CAPITAL STRATEGIES, LLC,           )   Appeal from the
                                            )   Circuit Court of
      Plaintiff-Appellant,                  )   St. Clair County.
                                            )
v.                                          )   No. 21-MR-89
                                            )
WILLIAM P. DAVIS,                           )   Honorable
                                            )   William D. Stiehl,
      Defendant-Appellee.                   )   Judge, presiding.
______________________________________________________________________________

         JUSTICE BARBERIS delivered the judgment of the court, with opinion.
         Presiding Justice Boie concurred in the judgment and opinion.
         Justice Moore dissented, with opinion.

                                            OPINION

¶1       This appeal arises out of a lawsuit filed by plaintiff, Archford Capital Strategies, LLC

(Archford), against defendant, William P. Davis, seeking a declaratory judgment that the protocol

for broker recruiting (Protocol) (did not invalidate the terms of an employment agreement entered

into by Archford and Davis and seeking a judgment for money damages against Davis for breach

of the employment agreement. Davis filed a motion to dismiss the complaint with prejudice

pursuant to section 2-619(a)(9) of the Code of Civil Procedure (Code) (735 ILCS 5/2-619(a)(9)

(West 2020)), which the circuit court of St. Clair County granted.

                                                  1
¶2      Archford appeals, arguing that the circuit court erred by granting Davis’s motion to dismiss

with prejudice. For the following reasons, we reverse and remand for further proceedings

consistent with this opinion.

¶3                                     I. BACKGROUND

¶4      On April 7, 2021, Archford filed a two-count complaint against Davis, seeking a

declaratory judgment (count I) and monetary damages for breach of contract (count II). Archford’s

complaint included the following factual allegations. Archford 1 provided investment advisory

services, including financial planning and asset management for individuals, businesses, and

institutions. Archford purchased another broker/dealer, Deschaine & Company (Deschaine), in

2015 and hired some of Deschaine’s employees, including Davis. Archford entered into an

employment agreement (Agreement) with Davis on August 24, 2015. Davis and James Maher,

chief executive officer of Archford, signed the Agreement. Maher and Davis executed an

addendum 2 to the Agreement on August 25, 2015. Maher and Davis executed the first amendment

to the Agreement (Amendment) on September 15, 2019. Davis’s employment with Archford

terminated on October 22, 2020, and Davis became employed by Private Advisor Group on

November 20, 2020. Archford alleged that several of its clients transferred to Davis following the

termination of his employment with Archford and that Davis failed to comply with requirements

regarding the transfer of clients set forth in the Amendment.

¶5      Archford attached copies of the Agreement, Amendment, and an affidavit prepared by

Maher to the complaint.

¶6      The Agreement is 11 pages in length. The following provisions are relevant to this appeal:

        1
           Archford alleged that it was a Delaware limited liability company authorized to do business in
Illinois and Missouri.
         2
           The addendum to the Agreement does not contain any provisions relevant to this appeal.
                                                   2
“Archford, as an express condition precedent to employing Davis requires that Davis

execute this agreement wherein Davis expressly covenants and agrees to maintain the

confidentiality of the confidential and proprietary information and not to engage in conduct

competitive to Archford.

                                       ***

       1. Employment: Effective September 1, 2015, Archford agrees to employ Davis as

a Relationship and Portfolio Manager with responsibilities of overseeing the strategic

direction of Archford’s Business and providing services to Archford’s clients and

performing such other duties as Archford may from time to time direct.

                                       ***

       4. Base Compensation: Archford agrees to pay Davis a salary of Sixty Five

Thousand Dollars ($65,000.00) per year. If the annual annuitized revenue from Fee Based

Assets Under Management of the former Deschaine & Company, LLC clients measured

on August 31, 2017, is greater than or equal to 120% of the annual annuitized revenue from

Fee Based Assets Under Management of the Deschaine & Company, LLC client measured

on August 31, 2015, Archford agrees to increase Davis’[s] base compensation to a salary

of Seventy Five Thousand ($75,000.00) per year.

       5. Bonus Compensation: In addition to his base compensation, Davis may be

eligible to receive the following bonuses as set forth in this paragraph. The bonuses are

based on the retention and growth of the Fee Based Assets Under Management of

Deschaine & Company, LLC on the measurement date of August 31, 2015.

                                       ***

                                         3
              21. Attorneys’ Fees: In the event a dispute regarding, arising out of, or in connection

       with the breach, enforcement, or interpretation of this Agreement, including, without

       limitation, any action seeking declaratory relief, equitable relief, injunctive relief, or

       damages, or any litigation or cause of action, including, without limitation, any appeals,

       federal bankruptcy proceedings, receivership or insolvency proceedings, reorganization, or

       other proceedings, the prevailing party shall be entitled to recover from the other their

       reasonable attorneys’ fees and court costs, incurred in connection therewith, including

       appeals, as determined by the Court in such action or suit.”

The provisions relevant to this appeal contained in the Amendment are as follows:

              “Recitals

              A. Archford and Davis entered into an Employment Agreement dated August 24,

       2015 (the ‘Agreement’), pursuant to which Archford agreed to employ Davis as a

       Relationship and Portfolio Manager.

              B. Archford and Davis desire to amend the Agreement, as hereinafter provided.

                                              ***

                      1. Paragraph 1 of the Agreement is amended to read as follows:

                      Employment: Davis is employed by Archford as a Relationship Manager

              with responsibilities of managing Archford’s relationships with clients assigned to

              Davis from time to time and providing services to Archford’s clients and providing

              such other services and performing such other duties as Archford may from time to

              time direct.

                                                4
                       2. Paragraph 5 of the Agreement is amended to read as follows:

                       Bonus Compensation: Effective January 1, 2019, Davis shall receive bonus

               compensation pursuant to the Archford Relationship Management Compensation

               Plan as amended from time to time. The Archford Relationship Management

               Compensation Plan effective January 1, 2019, is attached hereto and incorporated

               herein by reference.[3]

                       3. The following Paragraph is added to the Agreement:

                       Compensation to Archford for Transferred Clients: Davis acknowledges

               that Archford shall be entitled to compensation for its work and investment in

               clients or referral sources that may transfer to Davis within twenty-four (24) months

               following any termination of his employment with Archford. Davis shall

               immediately report to Archford any revenue received by or on behalf of Davis (or

               any person or entity which employs or is otherwise associated with Davis) on

               account of any clients who transfer from Archford to Davis (or any entity which

               employs or is otherwise associated with Davis) following termination of Davis’s

               employment with Archford. The amount due from Davis to Archford is for its work

               and investment in clients or referral sources that transfer shall be deemed

               conclusively to be eighty percent (80%) of the gross revenue earned in the first year

               following termination of employment starting with the first full quarter after

               termination or eighty percent (80%) of the gross revenue earned in the last year

               prior to termination of employment, whichever is greater, sixty percent (60%) of

       3
         The “Archford Relationship Management Compensation Plan,” effective January 1, 2019, was not
included as part of Exhibit 2 to the complaint.
                                                 5
               the gross revenue earned in the second year following termination or sixty percent

               (60%) of the gross revenue earned in the last year prior to termination of

               employment, whichever is greater, and forty percent (40%) of the gross revenue

               earned in the third year following termination or forty percent (40%) of the gross

               revenue earned in the last year prior to termination of employment, whichever is

               greater. The compensation paid to Archford shall be deemed to be a purchase of

               this ‘book of business’ from Archford. Payment due to Archford shall be due and

               payable at the earlier of when revenue is received by Davis (or any person or entity

               which employs or is otherwise associated with Davis) or on the 5th day of each

               quarter starting with the first quarter following the transfer of a client. All payments

               to Archford shall be accompanied by an accurate written report showing how the

               payment was computed and a true and correct copy of the total revenue earned

               during the relevant years including entire monthly statements showing advisory

               fees paid.

                       Notwithstanding anything herein to the contrary, no payment shall be due

               from Davis for any clients listed on Exhibit A and Exhibit B of the Agreement

               should they transfer to Davis after any separation from Archford.

                       4. Except as otherwise expressly provided herein, all of the terms, covenants

               agreements and other provisions of the Agreement shall remain in full force and

               effect and are hereby reaffirmed.”

¶7     In support of count I, Archford alleged that there was an actual controversy between

Archford and Davis as to Davis’s obligations under paragraph 3 of the Amendment regarding the

transfer of clients to Davis. Contrary to Davis’s position that he was under no obligation to comply

                                                  6
with the paragraph 3 based on the Protocol, Archford alleged that the Protocol limited liability

arising “by reason of” the taking of client information or solicitation of former clients and did not

undo contractual obligations arising by reason of the transfer of clients. Archford claimed that it

was not “attempting to prevent the taking of information or Davis’s solicitation of his former

clients.” As such, Archford asserted that the Protocol did not bar enforcement of paragraph 3 of

the Amendment and Davis was obligated to comply. Accordingly, Archford requested that the

circuit court enter an order (1) declaring that the Protocol did not render unenforceable or

otherwise invalidate any of Davis’s obligations under paragraph 3 of the Amendment,

(2) declaring that Davis was required to immediately comply with any past-due and future

obligations under paragraph 3 of the Amendment, (3) awarding Archford reasonable attorney fees

and court costs, and (4) granting any other such relief the court deemed proper.

¶8     In count II, Archford alleged that the Agreement and Amendment were valid and

enforceable contracts supported by consideration. Archford alleged that it performed its

obligations under the contract and that Davis breached his obligations under paragraph 3 by failing

to pay Archford compensation in connection with the transfer of certain clients to Davis. Archford

further alleged that it was damaged by Davis’s breach in that it had not received the compensation

owed under the Amendment. Accordingly, Archford requested that the circuit court enter an order

(1) awarding Archford compensatory damages for all past-due obligations in an amount

established following a trial, (2) requiring Davis to perform all past-due obligations under

paragraph 3, (3) awarding Archford reasonable attorney fees and court costs, (4) awarding

Archford pre- and post-judgment interest as permitted by law, and (5) granting any other relief the

court deemed proper.

                                                 7
¶9     On May 26, 2021, Davis filed a motion to dismiss pursuant to section 2-619(a)(9) of the

Code, arguing that the Protocol applied and defeated Archford’s claims. Davis asserted that the

Protocol explicitly stated that registered representatives, such as Davis, have no monetary or other

liability to their former firms if they comply with the terms of the Protocol. In addition to asserting

that he complied with the terms of the Protocol, Davis claimed that the Protocol applied because

both Archford and his new firm were signatories to the Protocol. Davis attached to his motion a

copy of the Protocol, which provided, in pertinent part, as follows:

               “The principal goal of the following protocol is to further clients’ interests of

       privacy and freedom of choice in connection with the movement of their Registered

       Representatives (‘RRs’) between firms. If departing RRs and their new firm follow this

       protocol, neither the departing RR nor the firm that he or she joins would have any

       monetary or other liability to the firm that the RR left by reason of the RR taking the

       information identified below or the solicitation of the clients serviced by the RR at his or

       her prior firm, provided, however, that this protocol does not bar or otherwise affect the

       ability of the prior firm to bring an action against the new firm for ‘raiding.’ The signatories

       to this protocol agree to implement and adhere to it in good faith.

               When RRs move from one firm to another and both firms are signatories to this

       protocol, they may take only the following account information: client name, address,

       phone number, email address, and account title of the clients that they serviced while at the

       firm (‘the Client Information’) and are prohibited from taking any other documents or

       information. Resignations will be in writing delivered to local branch management and

       shall include a copy of the Client Information that the RR is taking with him or her. The

       RR list delivered to the branch also shall include the account numbers for the clients

                                                  8
serviced by the RR. The local branch management will send the information to the firm’s

back office. In the event that the firm does not agree with the RR’s list of clients, the RR

will nonetheless be deemed in compliance with this protocol so long as the RR exercised

good faith in assembling the list and substantially complied with the requirement that only

Client Information related to clients he or she serviced while at the firm be taken by him

or her.

                                      ***

          RRs that comply with this protocol would be free to solicit customers that they

serviced while at their former firms, but only after they have joined their new firms. A firm

would continue to be free to enforce whatever contractual, statutory or common law

restrictions exist on the solicitation of customers to move their accounts by a departing RR

before he or she has left the firm.

                                      ***

          Accounts subject to a services agreement for stock benefits management services

between the firm and the company sponsoring the stock benefit plan that the account holder

participates in (such as with stock option programs) would still be subject to (a) the

provisions of that agreement as well as to (b) the provisions of any account servicing

agreement between the RR and the firm. Also, accounts subject to a participation

agreement in connection with prospecting IRA rollover business would still be subject to

the provisions of that agreement.

          If an RR is a member of a team or partnership, and where the entire

team/partnership does not move together to another firm, the terms of the team/partnership

agreement will govern for which clients the departing team members or partners may take

                                         9
Client Information and which clients the departing team members or partners can solicit.

In no event, however, shall a team/partnership agreement be construed or enforced to

preclude an RR from taking the Client Information for those clients whom he or she

introduced to the team or partnership or from soliciting such clients[.]

       In the absence of a team or partnership written agreement on this point, the

following terms shall govern where the entire team is not moving: (1) If the departing team

member or partner has been a member of the team or partnership in a producing capacity

for four years or more, the departing team member or partner may take the Client

Information for all clients serviced by the team or partnership and may solicit those clients

to move their accounts to the new firm without fear of litigation from the RR’s former firm

with respect to such information and solicitations; (2) If the departing team member or

partner has been a member of the team or partnership in a producing capacity for less than

four years, the departing team member or partner will be free from litigation from the RR’s

former firm with respect to client solicitations and the Client Information only for those

clients that he or she introduced to the team or partnership.

       ***

       A signatory to this protocol may withdraw from the protocol at any time and shall

endeavor to provide 10 days’ prior written notice of its withdrawal to all other signatories

hereto. A signatory who has withdrawn from the protocol shall cease to be bound by the

protocol and the protocol shall be of no further force or effect with respect to the signatory.

The protocol will remain in full force and effect with respect to those signatories who have

not withdrawn.” (Emphasis omitted.)

                                          10
¶ 10   On October 19, 2021, following a hearing, 4 the circuit court entered an order granting

Davis’s motion to dismiss with prejudice. The court found that the Protocol barred enforcement of

the Agreement. Additionally, the court found that Davis was entitled to recover his reasonable

attorney fees and court costs from Archford. Archford filed a timely notice of appeal on November

18, 2021.

¶ 11                                     II. ANAYLSIS

¶ 12   On appeal, Archford challenges the circuit court’s order granting Davis’s motion to dismiss

its complaint with prejudice pursuant to section 2-619(a)(9). Archford contends that the court erred

by dismissing the complaint where Davis failed to show that Archford’s claims were barred by an

affirmative matter. We agree.

¶ 13   “A motion to dismiss under section 2-619(a)(9) admits the legal sufficiency of the

plaintiff’s complaint but asserts that the claim against the defendant is barred by an affirmative

matter that avoids the legal effect of or defeats the claim.” Kuykendall v. Schneidewind, 2017 IL

App (5th) 160013, ¶ 32 (citing 735 ILCS 5/2-619(a)(9) (West 2014), and Sandholm v. Kuecker,

2012 IL 111443, ¶ 55). “An ‘affirmative matter’ is a type of defense that negates a cause of action

completely or refutes critical conclusions of law or conclusions of material fact that are

unsupported by specific factual allegations contained in or inferred from the complaint.” Id. ¶ 32

(citing Smith v. Waukegan Park District, 231 Ill. 2d 111, 121 (2008), and Kedzie & 103rd Currency

Exchange, Inc. v. Hodge, 156 Ill. 2d 112, 115 (1993)). The “affirmative matter” must be either

apparent on the face of the complaint or supported by affidavits or other evidentiary materials and

must do more than refute a well-pleaded fact in the complaint. Id. (citing Epstein v. Chicago Board

of Education, 178 Ill. 2d 370, 383 (1997)). “Section 2-619(a)(9) does not authorize the defendant

       4
        A transcript of the hearing was not included in the record on appeal.
                                                   11
to submit affidavits or evidentiary matters for the purposes of contesting the plaintiff’s factual

allegations and presenting its version of the facts.” Id. (citing Reynolds v. Jimmy John’s

Enterprises, LLC, 2013 IL App (4th) 120139, ¶ 34). “The defendant has the initial burden of

establishing that an affirmative matter defeats the plaintiff’s claim, and if satisfied, the burden

shifts to the plaintiff to demonstrate that the proffered affirmative matter is either unfounded or

requires the resolution of a material fact.” Id. (citing Epstein, 178 Ill. 2d at 383, and Hodge, 156

Ill. 2d at 116).

¶ 14    When ruling on a section 2-619(a)(9) motion to dismiss, a circuit court must accept as true

all well-pleaded facts in the complaint and all reasonable inferences that may be drawn, and the

court must construe the pleadings and supporting documents in a light most favorable to the

nonmoving party. Id. ¶ 33 (citing Sandholm, 2012 IL 111443, ¶ 55). The court should grant the

motion only if the plaintiff can prove no set of facts that would support his cause of action. Id.

(citing In re Estate of Boyar, 2013 IL 113655, ¶ 27). A motion to dismiss under section 2-619(a)(9)

presents a question of law that is reviewed de novo. Id. (citing Boyar, 2013 IL 113655, ¶ 27).

¶ 15    In the present case, Archford filed a complaint against Davis, seeking (1) a declaratory

judgment that the Protocol did not invalidate the terms of the Agreement entered into by Archford

and Davis and (2) a judgment for money damages against Davis for breach of the Agreement.

Archford relied on paragraph 3 of the Amendment, wherein Davis agreed “that Archford shall be

entitled to compensation for its work and investment in clients or referral sources that may transfer

to Davis within twenty-four (24) months following any termination of his employment with

Archford.” paragraph 3 set forth the procedures for Davis to follow and the amounts Davis would

owe in the event that certain clients transferred to Davis during the specified time period following

the termination of his employment with Archford. paragraph 3 additionally provided that “[t]he

                                                 12
compensation paid to Archford shall be deemed to be a purchase of this ‘book of business’ from

Archford.” Lastly, paragraph 3 stated that no payment was required of Davis for the transfer of

clients named on two separate lists attached as exhibits to the Agreement.

¶ 16   Davis asserted before the circuit court that Archford’s complaint should be dismissed

pursuant to section 2-619(a)(9) because the Protocol constituted an affirmative matter that barred

or defeated Archford’s claims. Specifically, Davis argued that the Protocol prohibited monetary

liability against Davis for taking client information and for former clients transferring to him at his

new firm. Davis reiterates this argument on appeal in support of his contention that the court

properly dismissed Archford’s complaint. Unlike the dissent, we disagree with Davis.

¶ 17   We initially note that this case presents an issue of first impression. Davis’s argument is

premised on his interpretation of a single provision in the Protocol. Davis, and the dissent, rely on

the following provision:

               “The principal goal of the following protocol is to further the clients’ interests of

       privacy and freedom of choice in connection with the movement of their Registered

       Representatives (‘RRs’) between firms. If departing RRs and their new firm follow this

       protocol, neither the departing RR nor the firm that he or she joins would have any

       monetary or other liability to the firm that the RR left by reason of the RR taking the

       information identified below or the solicitation of the clients serviced by the RR at his or

       her prior firm ***.”

¶ 18   Davis posits, and the dissent agrees, that this “clear and unambiguous” language of the

Protocol, especially the second sentence of the paragraph above, applies and “supersedes”

paragraph 3 of the Amendment, as well as the nonsolicitation and nondisclosure sections of the

Agreement which are not at issue in this appeal. However, our review of the Protocol, as a whole,

                                                  13
leads to a different conclusion. See Gallagher v. Lenart, 226 Ill. 2d 208, 233 (2007) (noting that

under ordinary principles of contract law, a contract must be construed as a whole, viewing each

provision in light of the others, and that the intent of the parties is not to be derived from any clause

or provision standing by itself).

¶ 19    Notably, the Protocol sets forth various exceptions to the general provision stated above.

Specifically, the provision Davis and the dissent rely upon goes on to state: “provided, however,

that this protocol does not bar or otherwise affect the ability of the prior firm to bring an action

against the new firm for ‘raiding.’ ” (Emphasis in original.) The Protocol also includes the

following provision:

                “RRs that comply with this protocol would be free to solicit customers that they

        serviced while at their former firms, but only after they have joined their new firms. A firm

        would continue to be free to enforce whatever contractual, statutory or common law

        restrictions exist on the solicitation of customers to move their accounts by a departing RR

        before he or she has left the firm.” (Emphasis added.)

¶ 20    The Protocol additionally references outside agreements, including a “services agreement

for stock benefits management services,” “a participation agreement,” and a “team/partnership

agreement,” and states that those agreements may govern under certain circumstances. For

example, the Protocol includes the following provisions pertaining to a team/partnership

agreement:

                “If an RR is a member of a team or partnership, and where the entire

        team/partnership does not move together to another firm, the terms of the team/partnership

        agreement will govern for which clients the departing team members or partners may take

        Client Information and which clients the departing team members or partners can solicit.

                                                   14
       In no event, however, shall a team/partnership agreement be construed or enforced to

       preclude an RR from taking the Client Information for those clients whom he or she

       introduced to the team or partnership or from soliciting such clients[.]

               In the absence of a team or partnership written agreement on this point, the

       following terms shall govern where the entire team is not moving: (1) If the departing team

       member or partner has been a member of the team or partnership in a producing capacity

       for four years or more, the departing team member or partner may take the Client

       Information for all clients serviced by the team or partnership and may solicit those clients

       to move their accounts to the new firm without fear of litigation from the RR’s former firm

       with respect to such information and solicitations; (2) If the departing team member or

       partner has been a member of the team or partnership in a producing capacity for less than

       four years, the departing team member or partner will be free from litigation from the RR’s

       former firm with respect to client solicitations and the Client Information only for those

       clients that he or she introduced to the team or partnership.”

¶ 21   Based on our reading of the Protocol as a whole, we are unable to conclude that the

language of the Protocol is “clear and unambiguous” and “supersedes” paragraph 3 of the

Amendment. The Protocol sets forth various conditions and exceptions to the general provision

that prohibits monetary liability against a registered representative (RR), such as Davis, for the

taking of certain information or the solicitation of certain clients. Moreover, there is no provision

in the Protocol that expressly prohibits a firm from entering into a contractual agreement with an

RR that requires the RR to reimburse the firm for the transfer of certain clients to the RR following

the termination of his or her employment. In fact, the Protocol recognizes that “[a] firm would

continue to be free to enforce whatever contractual, statutory or common law restrictions exist on

                                                 15
the solicitation of customers to move their accounts by a departing RR before he or she has left the

firm.” Id. This provision is consistent with the public policy of this State. See Holstein v.

Grossman, 246 Ill. App. 3d 719, 726 (1993) (“Public policy itself strongly favors freedom to

contract.”). Consequently, we are unable to conclude, as a matter of law, that the Protocol

“supersedes” paragraph 3 of the Amendment at this stage in the proceedings. We note that the

dissent contends that our finding is that the Protocol does not apply to the postemployment

relationship between Davis and Archford. This is not the case. Rather, the majority is unable to

conclude that the Protocol is clear and unambiguous, where various conditions and exceptions

exist and express language concerning liability against an RR is lacking. Based on this, the

majority merely finds that more fact finding is necessary in order to resolve this issue.

¶ 22   In construing the pleadings and supporting documents in a light most favorable to

Archford, it may be reasonable to infer that Davis voluntarily waived any protections the Protocol

may have offered him by entering into the Agreement with Archford. Davis, a seasoned financial

portfolio manager, agreed to paragraph 3 of the Amendment, which clearly required him to pay

Archford specified sums for the transfer of certain clients as compensation for Archford’s “book

of business” in the event his employment with Archford terminated. In exchange, the Amendment

allowed Davis to receive a benefit in the form of additional bonus compensation. In addition, Davis

and Archford agreed on a list of clients that could transfer to Davis following the termination of

his employment without triggering Davis’s obligation to pay Archford compensation. In our view,

questions of fact exist as to whether Davis waived protections of the Protocol by agreeing to

paragraph 3 of the Amendment. The agreement lists clients brought to the firm by Davis, in which

there would be no fee upon Davis leaving the firm. This language suggests that there was a

                                                 16
negotiation between Davis and Archford in the modified employment contract, wherein Davis

knew exactly what he was agreeing to and did so willingly.

¶ 23   Therefore, under these circumstances, we find that the Protocol did not constitute an

affirmative matter that avoids the legal effect of or defeats the claims in Archford’s complaint.

Instead, we conclude that it is necessary to remand the matter back to the circuit court for further

fact-finding on the issues presented by the complaint. For these reasons, we conclude that the

circuit court erred by granting Davis’s motion to dismiss under section 2-619(a)(9).

¶ 24                                     III. CONCLUSION

¶ 25   For the foregoing reasons, we reverse the order of the circuit court of St. Clair County

dismissing the complaint with prejudice and remand the cause for further proceedings consistent

with this opinion.

¶ 26   Reversed and remanded.

¶ 27   JUSTICE MOORE, dissenting:

¶ 28   I respectfully dissent. The majority finds that the Protocol does not constitute an affirmative

matter that defeats Archford’s claims. To reach this conclusion, the majority posits that the

freedom to contract allows the Amendment to the Agreement to modify the applicability of the

Protocol, ultimately finding that the Protocol does not apply to the postemployment relationship

between Davis and Archford.

¶ 29   Archford does not contend that the Protocol is inapplicable to the postemployment

relationship between it and Davis. Rather, Archford contends that the Protocol only applies to

solicitations by brokers and not the intended and next logical step following a solicitation, the

actual transfer of the client. To fully address the issues raised by Archford, additional facts will be

presented.

                                                  17
¶ 30                        I. ADDITIONAL BACKGROUND

¶ 31                                 A. The Agreement

¶ 32   In addition to those portions of the Agreement provided by the majority, I believe the

following sections are also relevant. The original employment contract also contained provisions

regarding bonus compensation.

              “5. Bonus Compensation: In addition to his base compensation, Davis may be

       eligible to receive the following bonuses as set forth in this paragraph. The bonuses are

       based on the retention and growth of the Fee Based Assets Under Management of

       Deschaine & Company, LLC on the measurement date of August 31, 2015.

              A. Bonus A: If the revenue from Fee Based Assets Under Management of the

       Deschaine & Company, LLC, clients measured 6 months after August 31, 2015, is greater

       than or equal to 100% of the revenue from Fee Based Assets Under Management on the

       measurement date, Davis shall be entitled to a bonus of Ten Thousand Dollars

       ($10,000.00). This bonus will be paid quarterly in the year following the year in which it

       is earned and the first payment will be at the end of the first quarter of the following year

       after the bonus is earned.

              B. Bonus B: If the revenue from Fee Based Assets Under Management of the

       Deschaine & Company, LLC, clients measured 12 months after August 31, 2015, is greater

       than or equal to 110% of the revenue from Fee Based Assets Under Management on the

       measurement date, Davis shall be entitled to a bonus of Fifteen Thousand Dollars

       ($15,000.00). This bonus will be paid quarterly in the year following the year in which it

       is earned and the first payment will be at the end of the first quarter of the following year

       after the bonus is earned.

                                                18
              C. Bonus C: If the revenue from Fee Based Assets Under Management of the

       Deschaine & Company, LLC, clients measured 24 months after August 31, 2015, is greater

       than or equal to 100% of the revenue from Fee Based Assets Under Management on the

       measurement date, Davis shall be entitled to a bonus of Ten Thousand Dollars

       ($10,000.00). This bonus will be paid quarterly in the year following the year in which it

       is earned and the first payment will be at the end of the first quarter of the following year

       after the bonus is earned.”

¶ 33   The Agreement also contained a nonsolicitation provision.

              “11. Nonsolicitation: Davis specifically acknowledges that he will have access to

       Confidential Information, including, without limitation, specific prospective and existing

       clients, customer lists, business development organizations, existing employees, and

       employee lists of Archford. Davis covenants and agrees that during the term of this

       Agreement, and for a continuous uninterrupted period of twenty-four (24) months,

       commencing upon the expiration or termination of employment under this Agreement,

       except as otherwise provided in writing by Archford, he shall not, either directly or

       indirectly, for himself, or through, on behalf of, or in conjunction with any person, persons,

       partnership, association, corporation, or entity:

                      (i) Solicit, attempt to solicit, accept, or initiate communications through any

              direct announcement, advertisement, circular, newsletter, or any other means of

              communication, including oral communication, any person or entity who was a

              client, customer, current or prospective, or source of business of Archford during

              the two (2) year period prior to Davis’ last date of employment to any competitor

              by direct or indirect inducement or otherwise[.]”

                                                19
¶ 34                   B. Davis’s Separation of Employment From Archford

¶ 35    On or about October 22, 2020, Davis’s employment with Archford ended. On October 23,

2020, Davis provided a client list to Archford of client contact information that he intended to

retain. The client list contained the names, addresses, home phone numbers, work phone numbers,

cell phone numbers, and e-mail addresses of approximately 100 Archford clients.

¶ 36                        C. Archford’s First Lawsuit Against Davis

¶ 37    On November 2, 2020, Archford filed a verified complaint for declaratory judgment and

injunction against Davis in St. Clair County, case No. 20-MR-273 (Archford I). Maher, CEO of

Archford, signed the verification. The Archford I complaint referenced and attached the

Agreement between Archford and Davis but did not reference the Amendment.

¶ 38    In the initial action, Archford was seeking to enforce the provisions of the Agreement

regarding confidential information, nonsolicitation, and nondisclosure. In addition to setting forth

the provisions of the Agreement it relied upon, the Archford I complaint contained the following

allegations of fact:

                “24. On October 22, 2020, Archford terminated Davis’s employment for cause.

                25. On October 23, 2020, Davis revealed that he possessed a list of Archford clients

        that included contact information for such clients (the ‘Client List’).

                26. On October 23, 2020, Davis also instructed Archford as follows: ‘[i]f clients or

        anybody else seeks to contact me after my resignation, Archford is instructed to have them

        contact me on my cellphone as follows[.]’

                27. The Client List contains Confidential Information within the meaning of the

        Agreement, including the names, addresses, home phone numbers, work phone numbers,

        cell phone numbers, and email addresses of approximately 100 Archford clients.

                                                 20
               28. Of the approximately 100 persons on the Client List, only the following nine

       are excluded from the non-solicitation and non-disclosure requirements of the Agreement

       pursuant to Section 13 of the Agreement ***.

               29. On October 29, 2020, Davis, through counsel, wrote to counsel for Archford

       claiming a right to solicit Archford clients pursuant to the Protocol for Broker Recruiting

       (the ‘Protocol’).

               ***

               34. Davis has not notified Archford that he moved to a firm which is a signatory to

       the Protocol.”

¶ 39   The Archford I complaint asserted that the Protocol does not apply unless a resigning RR

moves directly from one Protocol firm to another without any intervening break in employment.

Archford argued that if an RR had not already agreed to join another firm in the Protocol at the

time of the RR’s resignation, the Protocol would not apply.

¶ 40   On November 10, 2020, an order was issued imposing certain restrictions on Davis because

he was not employed at that time with a firm that was a signatory to the Protocol. On December

11, 2020, a subsequent order was entered that vacated the order entered November 10, 2020.

Following the issuance of the order on November 10, 2020, Davis became employed with a

financial services firm that was also a signatory to the Protocol. In vacating its prior order, the

circuit court stated “that, based upon the fact that [Davis] is employed by a firm that is a signatory

to the Protocol and based upon the language of the Protocol, [Archford] has not established that it

(1) has a protectable right; (2) is subject to irreparable harm; (3) is without an adequate remedy at

law; or (4) has a likelihood of success on the merits as required by Illinois law.”

                                                 21
¶ 41                    D. Archford’s Current Lawsuit Against Davis

¶ 42   On April 7, 2021, Archford filed the underlying complaint against Davis in St. Clair

County. The first count of the complaint seeks a declaratory judgment declaring that the Protocol

does not render unenforceable or otherwise invalidate any of Davis’s obligations pursuant the

Agreement and requiring Davis to comply with any past due and future obligations under the

Agreement.

¶ 43   In support thereof, the complaint alleges that Davis has continuing obligations under

paragraph 3 (“Compensation to Archford for Transferred Clients”) of the Amendment. According

to the complaint, the Protocol limits liability arising by reason of the taking of client information

or solicitation of former clients, but it does not undo contractual obligations arising by reason of

the transfer of clients. As such, Archford alleges that the Protocol does not bar enforcement of

paragraph 3 of the Amendment. Further, the complaint states that Archford is not attempting to

prevent the taking of information or Davis’s solicitation of his former clients.

¶ 44   Davis filed a motion to dismiss the complaint with prejudice pursuant to section 2-

619(a)(9) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(9) (West 2020)) asserting that the

Protocol applied and defeated Archford’s action. The parties fully briefed the issues, and a hearing

was conducted by the circuit court. The circuit court took judicial notice of the pleadings and

proceedings in Archford I.

¶ 45   On October 19, 2021, the circuit court entered an order granting Davis’s motion to dismiss

with prejudice. The circuit court found that the Protocol barred enforcement of the Agreement.

Additionally, the circuit court found that Davis was entitled to recover his reasonable attorney fees

and court costs from Archford. Archford filed a timely notice of appeal on November 18, 2021.

                                                 22
¶ 46                                       II. ANALYSIS

¶ 47                     A. Interpretation and Application of the Protocol

¶ 48      The ultimate issue before us is if and how the Protocol governs the postemployment

relationship between Davis and Archford beyond the preliminary injunction and/or temporary

restraining order stage. This is a matter of first impression in Illinois, 5 and it is important to analyze

the history of the Protocol and the other cases that have examined the Protocol throughout the

nation.

¶ 49      “The Protocol is a voluntary agreement entered into by registered broker/dealers which

allows registered representatives of those broker/dealers to move between firms that have adopted

the Protocol, and be free from litigation by the former firm to enforce any restrictive covenant in

an employment agreement.” Scheffel Financial Services, Inc. v. Heil, 2014 IL App (5th) 130600,

¶ 15. The Protocol was created in 2004 by three of the largest brokerage firms, Smith Barney (now

Morgan Stanley), Merrill Lynch, and UBS. Andrew Rozo, The Fall of the Broker Protocol,

Fordham J. of Corp. & Fin. L. (Apr. 4, 2018) https://news.law.fordham.edu/jcfl/2018/04/04/the-

fall-of-the-broker-protocol/ [https://perma.cc/R8QJ-ZXWL].

¶ 50      The Protocol provides, in pertinent part, as follows:

                 “The principal goal of the following protocol is to further the clients’ interests of

          privacy and freedom of choice in connection with the movement of their Registered

          Representatives (‘RRs’) between firms. If departing RRs and their new firm follow this

          protocol, neither the departing RR nor the firm that he or she joins would have any

          monetary or other liability to the firm that the RR left by reason of the RR taking the

         The Fifth District has previously considered a matter involving the Protocol—Scheffel Financial
          5

Services, Inc. v. Heil, 2014 IL App (5th) 130600; however, we were considering whether the circuit court
abused its discretion in granting a preliminary injunction and not the merits of the case.
                                                    23
information identified below or the solicitation of the clients serviced by the RR at his or

her prior firm, provided, however, that this protocol does not bar or otherwise affect the

ability of the prior firm to bring an action against the new firm for ‘raiding.’ The signatories

to this protocol agree to implement and adhere to it in good faith.

        When RRs move from one firm to another and both firms are signatories to this

protocol, they may take only the following account information: client name, address,

phone number, email address, and account title of the clients that they serviced while at the

firm (‘the Client Information’) and are prohibited from taking any other documents or

information. Resignations will be in writing delivered to local branch management and

shall include a copy of the Client Information that the RR is taking with him or her. The

RR list delivered to the branch also shall include the account numbers for the clients

serviced by the RR. The local branch management will send the information to the firm’s

back office. In the event that the firm does not agree with the RR’s list of clients, the RR

will nonetheless be deemed in compliance with this protocol so long as the RR exercised

good faith in assembling the list and substantially complied with the requirement that only

Client Information related to clients he or she serviced while at the firm will be taken by

him or her.

        To ensure compliance with GLB and SEC Regulation SP, the new firm will limit

the use of the Client Information to the solicitation by the RR of his or her former clients

and will not permit the use of the Client Information by any other RR or for any other

purpose. If a former client indicates to the new firm that he/she would like the prior firm

to provide account number(s) and/or account information to the new firm, the former client

will be asked to sign a standardized form authorizing the release of the account number(s)

                                          24
and/or account information to the new firm before any such account number(s) or account

information are provided.

       The prior firm will forward to the new firm the client’s account number(s) and/or

most recent account statement(s) or information concerning the account’s current positions

within one business day, if possible, but, in any event, within two business days, of its

receipt of the signed authorization. This information will be transmitted electronically or

by fax, and the requests will be processed by the central back office rather than the branch

where the RR was employed. A client who wants to transfer his/her account need only sign

an ACAT form.

       RRs that comply with this protocol would be free to solicit customers that they

serviced while at their former firms, but only after they have joined their new firms. A firm

would continue to be free to enforce whatever contractual, statutory or common law

restrictions exist on the solicitation of customers to move their accounts by a departing RR

before he or she has left the firm.

                                       ***

       A signatory to this protocol may withdraw from the protocol at any time and shall

endeavor to provide 10 days’ prior written notice of its withdrawal to all other signatories

hereto. A signatory who has withdrawn from the protocol shall cease to be bound by the

protocol and the protocol shall be of no further force or effect with respect to the signatory.

The protocol will remain in full force and effect with respect to those signatories who have

not withdrawn.” Carlile Patchen & Murphy, LLP, Read The Broker Protocol, The Broker

Protocol, https://thebrokerprotocol.com/index.php/authors/read-the-protocol (last visited

Jan. 5, 2023) [htts://perma.cc/H8B8-R7GQ].

                                          25
¶ 51    The Protocol was created to reduce litigation when a broker left a firm to join another. See

Paul A. Wilhelm and Stephen R. Gee, Understanding the Trends, Tools, and Remedies: Protecting

Your Financial Institution From Heists of Talent and Trade Secrets, 59 DRI For Def., No. 1, Jan.

2017 at 39. Prior to 2004, when a broker left a firm to join another their “clients often [got] caught

in the middle of what amounts to a messy divorce.” Paul Sullivan, As Big Firms Exit Broker Pact,

Investors are Uneasy, N.Y. Times, Jan. 19, 2018, https://www.nytimes.com/2018/01/19/your-

money/broker-protocol.html         [https://perma.cc/QB4N-XEGJ].          The     pre-Protocol     litigation

“concerned the transfer of client information and essentially the transfer of business.” Rozo, supra.

¶ 52    It is important to note that for the Protocol to apply to a broker’s transfer, both the firm the

broker is leaving and the new firm the broker is joining must be signatories to the Protocol. If only

one firm was a signatory to the Protocol, any contract provision regarding the taking of client

information and solicitation of clients would be applicable. At all relevant times, Archford was a

signatory to the Protocol, as was the firm that hired Davis after his separation from Archford.

¶ 53    As this is a matter of first impression in Illinois, research was conducted to reveal if any

other jurisdictions had persuasive authority that would be beneficial to this court. A search for

cases involving the Protocol across all 50 states, and the federal courts, revealed only 40 results. 6

        6
          The few cases examining the Protocol are likely due to the Financial Industry Regulatory
Authority’s (FINRA) mandatory arbitration provisions. FINRA is a not-for-profit organization that works
under the supervision of the Securities and Exchange Commission to, among other things, “write and
enforce rules governing the ethical activities of all registered broker-dealer firms and registered brokers in
the U.S.” (Emphasis omitted.) About FINRA, FIRNA https://www.finra.org/about/what-we-do (last visited
Jan. 5, 2023) [https://perma.cc/6ESC-KA2N].
         According to FINRA rules, “[e]xcept as otherwise provided in the Code, a dispute must be
arbitrated under the Code if the dispute arises out of the business activities of a member or an associated
person and is between or among: [m]embers; [m]embers and [a]ssociated [p]ersons; or [a]ssociated
[p]ersons.” FINRA Code of Arbitration Procedure for Industry Disputes Rule 13200 (eff. Dec. 15, 2008),
available at https://www.finra.org/rules-guidance/rulebooks/finra-rules/13200 [https://perma.cc/UPZ9-
R93S]. As far as this court can determine from the record on appeal that was submitted to us, no requests
and/or demands for arbitration were submitted to the circuit court in this matter.
                                                     26
The majority of those cases were on the issue of whether a preliminary injunction should be

entered, and approximately 10 of those cases dealt with parties that either had not invoked the

Protocol or both parties were not signatories to the Protocol—a prerequisite for the Protocol to

apply. In the 15 cases seeking preliminary injunctions and/or temporary restraining orders to

prevent departing RRs from taking client information and soliciting their former clients, when both

the firm the RR was departing from and the new firm the RR joined were signatories to the

Protocol, the requested relief was denied due to the application of the Protocol 10 times,7 it was

granted in 3 cases, 8 and in 1 case 9 it was initially granted and then dissolved. In all of these cases,

the courts were examining the application of the Protocol in instances where there were also

employment contracts. The freedom of an employer broker firm to enter into an employment

contract with an RR did not negate the application of the Protocol to that postemployment

relationship.

¶ 54    Having examined the history of the Protocol, I now turn to the interpretation and

application of the Protocol to the postemployment relationship between Archford and Davis, as

        7
           The requested relief was denied in the following cases: Barney v. Burrow, 558 F. Supp. 2d 1066
(E.D. Cal. 2008); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Reidy, 477 F. Supp. 2d 472 (D. Conn.
2007); UBS Financial Services Inc. v. Fiore, No. 17-CV-993 (VAB), 2017 WL 3167321 (D. Conn. July
24, 2017); Credit Suisse Securities (USA) LLC v. Lee, No. 11 CIV. 08566 (RJH), 2011 WL 6153108
(S.D.N.Y. Dec. 9, 2011); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Baxter, No. 1:09CV45DAK, 2009
WL 960773 (D. Utah Apr. 8, 2009); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Brennan, No.
1:07CV475, 2007 WL 632904 (N.D. Ohio Feb. 23, 2007); Smith Barney, Inc. v. Darling, No. 09-C-540,
2009 WL 1544756 (E.D. Wis. June 3, 2009); Fidelity Brokerage Services LLC v. York, No. EDCV 19-
1929-JGB (SPX), 2019 WL 5485121 (C.D. Cal. Oct. 23, 2019); KWB & Associates, Inc. v. Marvin, No.
ED CV 18-289-DMG (KKX), 2018 WL 5094927 (C.D. Cal. Apr. 18, 2018); CitiGroup Global Markets,
Inc. v. Wasser, No. 08-60592-CIV-DIMITROULEAS, 2008 WL 11417650 (S.D. Fla. June 6, 2008).
         8
           The requested relief was granted in the following cases: J.P. Morgan Securities LLC v. Weiss, No.
119CV-04163-TWP-MPB, 2019 WL 6050176 (S.D. Ind. Nov. 15, 2019); J.P. Morgan Securities LLC v.
Shields, No. 1:18-CV-02788-SEB-MJD, 2018 WL 11456636 (S.D. Ind. Dec. 10, 2018); A.G. Edwards &
Sons, Inc. v. McCreanor, No. 2:07-CV-570-FTM-29DNF, 2007 WL 2696570 (M.D. Fla. Sept. 11, 2007).
         9
           The requested relief was initially granted and then dissolved in the following case: Wachovia
Securities, LLC v. Englehardt, No. 08-CV-6303L, 2008 WL 2725504 (W.D.N.Y. July 11, 2008).

                                                    27
well as Archford’s contention that the Protocol does not apply to the transfer of clients, only the

solicitation.

¶ 55    In construing the Protocol, I have endeavored to “ascertain and give effect to the intention

of the parties at the time the contract was formed.” Matthews v. Chicago Transit Authority, 2016

IL 117638, ¶ 77. The first sentence of the Protocol sets forth its intention as follows: “The principal

goal of the following protocol is to further the clients’ interests of privacy and freedom of choice

in connection with the movement of their Registered Representatives (‘RRs’) between firms.”

Archford’s interpretation of the Protocol is in contradiction with the intention of the Protocol

because it would restrict the interests of clients, and of Davis, by creating a monetary penalty that

is not congruent with either the plain language or the goals of the Protocol.

¶ 56    Next, despite the majority’s contention to the contrary, I examined the contract as a whole

and evaluated if the words in the contract are clear and unambiguous. Here, the plain language of

the Protocol is clear and unambiguous.

        “If departing RRs and their new firm follow this protocol, neither the departing RR nor the

        firm that he or she joins would have any monetary or other liability to the firm that the RR

        left by reason of the RR taking the information identified below or the solicitation of the

        clients serviced by the RR at his or her prior firm ***.” Carlile Patchen & Murphy, LLP,

        supra.

¶ 57    The majority points to various exceptions contained within the Protocol. However, those

are narrow exceptions that are not applicable to the facts of this case. An enumerated specific

exception should not be interpreted to invalidate the overarching intent of the contract. “A court

will not interpret a contract in a manner that would nullify or render provisions meaningless, or in

                                                  28
a way that is contrary to the plain and obvious meaning of the language used.” Thompson v.

Gordon, 241 Ill. 2d 428, 442 (2011).

¶ 58   The majority relies heavily on its misinterpretation of the following provision:

                “RRs that comply with this protocol would be free to solicit customers that they

       serviced while at their former firms, but only after they have joined their new firms. A firm

       would continue to be free to enforce whatever contractual, statutory or common law

       restrictions exist on the solicitation of customers to move their accounts by a departing RR

       before he or she has left the firm.” (Emphasis added.) Carlile Patchen & Murphy, LLP,

       supra.

¶ 59   The plain language of this provision is clear: while the RR is still employed with a firm,

that firm may still enforce any provisions in place regarding the solicitation of customers.

However, as soon as that departing RR joins a new firm that is a signatory to the Protocol, those

restrictions that were previously in place are no longer applicable. The Protocol governs the

postemployment relationship.

¶ 60   Paragraph 3 of the Amendment is titled, “Compensation to Archford for Transferred

Clients.” Archford refers to paragraph 3 of the Amendment as a “transfer agreement” and a

“revenue sharing obligation” in an attempt to distinguish it and exclude it from the Protocol.

However, as explained above, the plain language of paragraph 3 of the Amendment would impose

monetary liability on Davis, as the departing RR, after he leaves the firm. This is incongruent with

the goals and the plain language of the Protocol. It would be unreasonable to interpret the Protocol

as a shield to liability only when a departing RR solicits a former client but is ultimately

unsuccessful in their attempts. This interpretation would render portions of the Protocol

meaningless.

                                                29
¶ 61   Moreover, applying Archford’s interpretation that solicitations are protected, but not the

actual transference of an account, would lead to absurd results. If a client desired to leave Archford

for any reason, and without any solicitation or contact from Davis, and decided to take their

business to Davis’s new firm, the new firm would be punished and required to pay as much as

80% of the gross revenue to Archford simply because Davis is employed at the firm. Archford

offered no explanation for how this scenario would be justified other than pointing to the contract

between it and Davis.

¶ 62   As a signatory to the Protocol, Archford benefits because brokers may join Archford and

bring their former clients with them without subjecting Archford to any monetary liability.

However, Archford is taking the position that Davis and his new firm do not receive this same

benefit from the Protocol. This argument is nonsensical and simply is not supported by the plain

language, or the purpose, of the Protocol.

¶ 63   It is undisputed that both Archford and Davis’s subsequent firm are both signatories to the

Protocol, a prerequisite for the Protocol to apply. The plain language of the Protocol applies and

supersedes paragraph 3 of the Amendment as well as the nonsolicitation and nondisclosure

sections of the Agreement. If Archford no longer wishes to be bound by the Protocol, there is a

procedure in place that allows it to leave.

               “A signatory to this protocol may withdraw from the protocol at any time and shall

       endeavor to provide 10 days’ prior written notice of its withdrawal to all other signatories

       hereto. A signatory who has withdrawn from the protocol shall cease to be bound by the

       protocol and the protocol shall be of no further force or effect with respect to the signatory.”

       Carlile Patchen & Murphy, LLP, supra.

                                                 30
Archford has not availed itself of this procedure. Instead, it has remained a signatory to the Protocol

and has continued to reap for itself the benefits pertaining thereto, while attempting to use

paragraph 3 of the Amendment to circumvent the protections that the Protocol, by its plain

language, bestows upon Davis and his new firm. No reasonable reading of the Protocol allows

such a result.

¶ 64     Additionally, the Protocol is a contract entered into and between those firms that choose to

join and sign it. Archford cannot, as the majority finds, unilaterally modify or amend how the

Protocol applies when one of its departing RRs joins a new Protocol firm because “no contract can

be modified in ex parte fashion by one of the contracting parties without the knowledge and

consent of the remaining part[ies] to the agreement.” Schwinder v. Austin Bank of Chicago, 348

Ill. App. 3d 461, 469 (2004).

¶ 65     Interpreting and applying the Protocol as set forth above does not render the Agreement

and Amendment moot. If Davis had joined a new firm that was not a signatory to the Protocol,

each and every provision of the Agreement and Amendment would be applicable.

¶ 66                                 B. Section 2-619(a)(9)

¶ 67     As the majority reversed on the interpretation of the Protocol, it was not necessary for them

to evaluate the other issue raised by Archford. For completeness, we will briefly examine that

issue.

¶ 68     Archford argued that the circuit court erred in granting the section 2-619 motion to dismiss,

even if the Protocol unambiguously applied to paragraph 3 of the Amendment, because Davis

failed to meet his burden of proving the affirmative matter relied on. Our review of an order

granting a motion to dismiss is de novo. Porter v. Decatur Memorial Hospital, 227 Ill. 2d 343, 352

(2008). “A motion to dismiss under section 2-619 admits the legal sufficiency of the plaintiff’s

                                                  31
complaint, but asserts affirmative matter that defeats the claim.” King v. First Capital Financial

Services Corp., 215 Ill. 2d 1, 12 (2005). Section 2-619 affords a means of disposing of issues of

law and easily proven issues of fact. Barber-Colman Co. v. A&K Midwest Insulation Co., 236 Ill.

App. 3d 1065, 1072 (1992).

        “Motions to dismiss under section 2-619 involve essentially a summary judgment

        procedure [citation], but they differ from summary judgment motions in five important

        respects:

               ‘(1) they are defensive in nature and may be interposed only by a party who is

               opposing a cause of action; (2) they must be filed prior to that defendant’s answer;

               (3) they may not be used to contest the essential allegations of the complaint, but

               may be used only to assert affirmative matter; (4) they allow a determination of the

               motion on the merits even if there is a genuine issue of material fact raised by the

               affirmative matter as long as the party opposing the motion has not filed a jury

               demand; and (5) they need not be accompanied by supporting material if the

               affirmative matter appears on the face of the complaint.’ *** [Citation.]” (Emphasis

               in original.) Id.

See also 4 Richard A. Michael, Illinois Practice, Civil Procedure Before Trial § 38:3 (2d ed. 2011)

(the relationship of summary judgments to other dispositive motions). When ruling on a section 2-

619 motion to dismiss, “a court must accept as true all well-pleaded facts, as well as any reasonable

inferences that may arise from them [citation], but a court cannot accept as true mere conclusions

unsupported by specific facts.” Patrick Engineering, Inc. v. City of Naperville, 2012 IL 113148,

¶ 31.

                                                 32
¶ 69   Archford argued that Davis did not meet his burden of proving the affirmative matter relied

upon by filing an affidavit in support of the motion, and thus, the motion to dismiss should have

been denied. However, if the affirmative matter is apparent on the face of a pleading, no affidavit

is required. Sierens v. Clausen, 60 Ill. 2d 585, 588 (1975). Further, if an affidavit in support of a

section 2-619 motion to dismiss should have been filed, but was not, “the absence of an affidavit

may not be fatal.” Asset Acceptance, LLC v. Tyler, 2012 IL App (1st) 093559, ¶ 24. The Code of

Civil Procedure should be “construed liberally to fulfill its purpose of providing substantial justice

and resolution on the merits, rather than imposing seemingly insurmountable procedural obstacles

to litigation.” Doe v. Montessori School of Lake Forest, 287 Ill. App. 3d 289, 296 (1997).

¶ 70   It is apparent on the face of the complaint that an analysis of the Protocol is necessary as

Archford’s complaint sought a declaration that the Protocol does not render unenforceable Davis’s

obligations under paragraph 3 of the Amendment. Archford also argues that Davis must establish

that he complied with the Protocol. In the underlying matter, the circuit court took judicial notice

of the pleadings and proceedings from the Archford I litigation. The Archford I complaint was a

verified complaint signed by Maher, Archford’s CEO, which contained judicial admissions.

“Judicial admissions are formal admissions in the pleadings that have the effect of withdrawing a

fact from issue and dispensing wholly with the need for proof of the fact. *** A party’s admissions

contained in an original verified pleading are judicial admissions ***.” Konstant Products, Inc. v.

Liberty Mutual Fire Insurance Co., 401 Ill. App. 3d 83, 86 (2010). Archford’s relevant admissions

are set forth above. Supra ¶ 43.

¶ 71   There are no disputed facts regarding compliance with the Protocol based upon Archford’s

own admissions. Davis prepared a list of clients that contained their names, addresses, home phone

                                                 33
numbers, work phone numbers, cell phone numbers, and e-mail addresses. Davis provided this list

to Archford.

¶ 72    The plain language of the Protocol gives great deference to the departing RR when

preparing the client list.

        “In the event that the firm does not agree with the RR’s list of clients, the RR will

        nonetheless be deemed in compliance with this protocol so long as the RR exercised good

        faith in assembling the list and substantially complied with the requirement that only Client

        Information related to clients he or she serviced while at the firm be taken with him or her.”

        Carlile Patchen & Murphy, LLP, supra.

Additionally, Archford has not alleged that Davis acted in bad faith when preparing the list which

would violate the spirit and language of the Protocol preventing its protections from applying to

Davis. See, e.g., Morgan Stanley Smith Barney LLC v. O’Brien, No. 3:13-CV-01598, 2013 WL

5962103, at *4 (D. Conn. Nov. 6, 2013) (court found departing RR’s intentional changing of client

telephone numbers in firm’s database to be bad faith). The circuit court did not err in granting

Davis’s section 2-619 motion to dismiss with prejudice, as there are no disputed questions of

material fact.

¶ 73    Finally, Archford argued that Davis should be required to comply with paragraph 3 of the

Amendment, notwithstanding the existence of the Protocol, because he received additional bonus

compensation as consideration for signing the Amendment. However, we are not evaluating

whether the original Agreement and the subsequent Amendment are valid and enforceable

contracts requiring good and valuable consideration. As Davis has filed a section 2-619 motion to

dismiss by reason of other affirmative matter, we are viewing the complaint and the supporting

Agreement and Amendment in the light most favorable to Archford and assuming the Agreement

                                                 34
and Amendment are valid and enforceable. Under the set of facts before us, because Davis moved

from one Protocol firm to another, the Protocol supersedes paragraph 3 of the Amendment.

However, if Davis was not at a Protocol firm, paragraph 3 of the Amendment would apply.

¶ 74                                 III. CONCLUSION

¶ 75   For the foregoing reasons, I would affirm the order of the circuit court of St. Clair County

that dismissed the complaint with prejudice. Additionally, I would award attorney fees to Davis as

the prevailing party pursuant to the Agreement. Because my colleagues in the majority have chosen

to do otherwise, I respectfully dissent from their decision.

                                                 35
             Archford Capital Strategies, LLC v. Davis, 2023 IL App (5th) 210377

Decision Under Review:        Appeal from the Circuit Court of St. Clair County, No. 21-MR-89;
                              the Hon. William D. Stiehl, Judge, presiding.

Attorneys                     Mark C. Goldenberg, Kevin P. Green, and Thomas C. Horscroft,
for                           of Goldenberg Heller & Antognoli, P.C., of Edwardsville, for
Appellant:                    appellant.

Attorneys                     Vincent D. Reese and Jasmine Y. McCormick, of Mickes O’Toole,
for                           LLC, of St. Louis, Missouri, for appellee.
Appellee:

                                             36