Although there may be situations in which a section 2–619 motion to dismiss is the proper vehicle to challenge a derivative suit that includes a demand futility claim, under these circumstances, defendants should have sought dismissal under section 2–615 of the Code. See, e.g., Sherman v. Ryan, 392 Ill.App.3d 712, 721, 331 Ill.Dec. 557, 911 N.E.2d 378 (2009) (affirming dismissal of a derivative suit under section 2–615 where plaintiff failed to adequately plead demand futility). ¶ 33 Indeed, plaintiff has argued in this court and in the court below that his complaint should be reviewed under the section 2–615 standard and that his allegations be evaluated without consideration of extrinsic evidence, specifically, the Earnhardt declaration.
Because count II was founded upon the existence of a written lease agreement with YMCA, and plaintiff failed to attach to his complaint the lease agreement or an affidavit stating the agreement was not accessible to him, this count was properly dismissed from the original complaint. Id.; see Sherman v. Ryan, 392 Ill. App. 3d 712, 733 (2009) (failure to attach a written document upon which a claim is founded is grounds for dismissal); Popp v. Cash Station, Inc., 244 Ill. App. 3d 87, 100 (1992). ¶ 24 Moreover, for the reasons set forth in more detail below, we find counts I, V, and VI of plaintiff's amended complaint were properly dismissed where (1) the claims were founded upon plaintiff's written program agreement with the City and (2) plaintiff failed to attach the program agreement or any other supporting documents to his amended complaint. 735 ILCS 5/2-606 (West 2014); see Sherman, 392 Ill. App. 3d at 733. ¶ 25 When plaintiff filed his amended complaint, he changed the basis of his claim for recovery.
When reviewing a motion to dismiss pursuant to section 2-615 of the Code, we accept as true all well-pleaded factual allegations in the complaint and draw all reasonable inferences therefrom in favor of the plaintiff. Sherman v. Ryan , 392 Ill. App. 3d 712, 722, 331 Ill.Dec. 557, 911 N.E.2d 378 (2009). However, we need not consider mere conclusions of law or facts unsupported by specific factual allegations.
¶ 38 The business judgment rule provides a presumption that in the course of making a business decision, "directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company." Sherman v. Ryan, 392 Ill.App.3d 712, 722 (2009). This rule is designed to protect directors who have been diligent and careful in performing their duties from being subjected to liability from honest mistakes of judgment.
When reviewing a motion to dismiss pursuant to section 2-615 of the Code, we accept as true all well-pleaded factual allegations in the complaint and draw all reasonable inferences therefrom in favor of the plaintiff. Sherman v. Ryan, 392 Ill.App.3d 712, 722 (2009). However, we need not consider mere conclusions of law or facts unsupported by specific factual allegations.
See Doc. 1 ¶ 68 (alleging Joshua “diverted nearly all of the AJJ Trust's share of the HGB Partnerships' earnings into Glazier Corp.'s accounts”). Similarly, Abdo argues that Sherman v. Ryan, 392 Ill.App.3d 712 (2009), requires dismissal of the unjust enrichment claim because the complaint fails to allege that Abdo did not earn the income he retained. However, the court in Sherman analyzed an unjust enrichment claim under Delaware law, which differs from such a claim under Illinois law.
This court reviews a lower court's ruling concerning application of privileges in discovery de novo. Sherman v. Ryan, 392 Ill. App. 3d 712, 735 (2009). As noted, de novo consideration means we perform the same analysis that a trial judge would perform.
To put a finer point on the matter, State Farm is trying to avoid the waiver of attorney-client or work-product privilege that would ordinarily result if, during its joint conferences with O'Dea and his lawyer, State Farm shared information or work product with its codefendant and codefendant's counsel. See Center Partners, Ltd. , 2012 IL 113107, ¶ 35, 367 Ill.Dec. 20, 981 N.E.2d 345 (client waives attorney-client privilege if it discloses privileged information to third party); Sherman v. Ryan , 392 Ill. App. 3d 712, 736, 331 Ill.Dec. 557, 911 N.E.2d 378 (2009) (same for work-product privilege). Without the ability to assert some sort of exception, State Farm's privilege would be waived by disclosure of information to, or in the presence of, third parties—O'Dea and O'Dea's lawyer.
“However, considering the clear requirements of the Declaration which were not complied with regarding reserves, surpluses and notices, this Court finds that defendants' conduct was grossly negligent in that they intentionally failed to act in the fact of a known duty, demonstrating a conscious disregard for their duties. Sherman v. Ryan, 391 [392] Ill.App.3d 712, 730 [331 Ill.Dec. 557, 911 N.E.2d 378] (2009).” (Emphasis added.)
complied with regarding reserves, surpluses and notices, this Court finds that defendants' conduct was grossly negligent in that they intentionally failed to act in the fact of a known duty, demonstrating a conscious disregard for their duties. Sherman v. Ryan, 391 Ill. App. 3d 712, 730 (2009)." (Emphasis added.)