                               Illinois Official Reports

                                      Appellate Court



                    Avanti Medical Group, LLC v. BMO Harris Bank, N.A.,
                                   2014 IL App (2d) 140401



Appellate Court          AVANTI MEDICAL GROUP, LLC, and KENNETH BARRICK,
Caption                  Plaintiffs-Appellants, v. BMO HARRIS BANK, N.A.,
                         Defendant-Appellee.



District & No.           Second District
                         Docket No. 2-14-0401



Filed                    December 22, 2014



Held                       Plaintiffs’ action against defendant bank for breach of a credit
(Note: This syllabus agreement was properly dismissed by the trial court on the ground that
constitutes no part of the plaintiffs failed to allege that the agreement satisfied the signature
opinion of the court but requirement of the Credit Agreements Act, since the only document
has been prepared by the setting forth any of the loan terms was entitled the “Amended Terms,”
Reporter of Decisions that document was only signed by the creditor, and the documents
for the convenience of with the signatures of both the creditor and the debtor were some of
the reader.)               the “Terms Documents,” but those documents were generic,
                           preprinted forms bearing no reference to the loan between the parties.



Decision Under           Appeal from the Circuit Court of Du Page County, No. 13-MR-1286;
Review                   the Hon. Terence M. Sheen, Judge, presiding.



Judgment                 Affirmed.
     Counsel on               Gary L. Taylor and Polina Arsentyeva, both of Rathje & Woodward,
     Appeal                   LLC, of Wheaton, for appellants.

                              Richard A. Wohlleber, S. Todd Sipe, and Mark A. Silverman, all of
                              Chapman & Cutler LLP, of Chicago, for appellee.



     Panel                    JUSTICE BIRKETT delivered the judgment of the court, with
                              opinion.
                              Justices McLaren and Hudson concurred in the judgment and opinion.

                                               OPINION

¶1         Plaintiffs, Avanti Medical Group, LLC, and Kenneth Barrick, appeal the dismissal of their
       complaint against defendant, BMO Harris Bank, N.A., for breach of a credit agreement. We
       affirm because plaintiffs failed to allege that the agreement met the signature requirement in
       section 2 of the Credit Agreements Act (815 ILCS 160/2 (West 2012)).

¶2                                          I. BACKGROUND
¶3         In their August 2013 complaint, plaintiffs alleged as follows. Kenneth Barrick formed
       Avanti Medical Group, LLC (Avanti), in 2009 to develop, own, and operate a series of “retail
       healthcare clinics” in supermarkets. In March 2010, Barrick signed an agreement with
       SuperValu, Inc., to operate clinics within its stores. SuperValu approved the opening of 70
       such clinics. Barrick also signed agreements with several Illinois hospital systems to lend their
       names exclusively to Avanti’s clinics and to refrain from competing with Avanti. The hospital
       systems included Alexian Brothers Medical Group, Provena, and Elmhurst Memorial
       Healthcare. At the time, Barrick was employed by Alexian Brothers as an emergency-room
       physician. With funds from investors, Avanti opened three clinics in the Chicago area. Barrick
       personally guaranteed the investments.
¶4         In the summer of 2011, Barrick applied to BMO Harris Bank, N.A. (BMO), for a loan to
       fund existing and projected clinics. Barrick met with Matthew Gable, BMO’s vice president, to
       discuss the loan application. Barrick provided Gable with a summary of Avanti’s business plan
       as well as financial information from the three existing clinics. According to plaintiffs,
       “[t]hroughout their relationship, Gable assured Barrick that BMO was fully committed to
       funding Avanti’s clinics.” Also, “Gable, Avanti, and East Trend Corp (‘ETC’), conducted
       meetings and conference calls during which the parties discussed the structure and
       disbursement of the loan,” and “ETC committed to providing a standby letter of credit as
       collateral securing the loan from BMO.”
¶5         Plaintiffs alleged that, as a result of Barrick’s discussions with Gable, “both Barrick, on
       behalf of Avanti, and Gable executed” a document on July 12, 2011, entitled “Summary of
       Terms and Conditions” (Original Terms). Plaintiffs attached a copy of the Original Terms to
       their complaint. The Original Terms is dated July 12, 2011, and is signed by both Gable and



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       Barrick. The document sets forth terms of a credit facility of up to $25 million and specifies a
       closing date of “[n]o later than August 12, 2011.”
¶6         Plaintiffs alleged that, on July 28, 2011, the Original Terms “[was] amended by written
       agreement.” Plaintiffs alleged that Gable signed this new document, also entitled “Summary of
       Terms and Conditions” (Amended Terms). Plaintiffs did not, however, allege that Avanti
       signed the Amended Terms. Plaintiffs attached a copy of the Amended Terms, which is dated
       July 28, 2011, and bears only Gable’s signature. The Amended Terms sets forth terms of a
       credit facility of up to $10 million–a significant reduction from the amount specified in the
       Original Terms. The Amended Terms, like the Original Terms, specifies a closing date of “[n]o
       later than August 12, 2011.”
¶7         Plaintiffs alleged that, “from the [closing date] on, Avanti had the right, and BMO took on
       the obligation, to make available the [$]10,000,000 in the form of loans and commercial letters
       of credit, to be distributed from a BMO escrow account at Avanti’s direction.”
¶8         Plaintiffs further alleged that, “[i]n furtherance of the Amended Terms and in order to
       enable BMO to release the funds from the escrow account,” BMO drafted several documents
       (collectively, Terms Documents) “to be executed by itself and Avanti.” These documents
       included (1) a “Commercial Account Agreement”; (2) a “Global Treasury Management
       Services Master Agreement”; (3) a “Secured Account Agreement”; (4) a “Certificate of
       Account Resolutions–Limited Liability Company” (Certificate); and (5) “W-9 tax forms,
       FDIC deposit insurance forms, online banking authorization forms, and safekeeping account
       set-up instructions, all forms necessary to set up the escrow account and finalize the loan.”
       Plaintiffs attached copies of these documents to their complaint as exhibits C through G.
       Plaintiffs alleged that, “[o]n August 13, 2011, Avanti executed the Terms Document[s] and
       sent the same back to BMO that day.” Several of the Terms Documents have places for both
       Avanti and BMO to sign, but their mutual signatures appear on only some of them.
¶9         Plaintiffs alleged that the “Secured Account Agreement” “acknowledg[ed] that Avanti
       established an account with BMO specifically for the purpose of drawing funds and making
       deposits related to the construction and ongoing capital needs of Avanti’s clinics.” The
       certificate, plaintiffs stated, “authorize[d] BMO to release the funds to Avanti’s
       subcontractors, vendors, and investors in connection with the clinics.” Contrary to these
       representations, none of the Terms Documents references Avanti’s clinics. The Terms
       Documents are generic, preprinted forms that do not identify any particular loan transaction
       between the parties.
¶ 10       Plaintiffs alleged that, on August 19, 2011, Gable notified SuperValu that the loan was
       being finalized but that, because of logistical problems, closing would be delayed until later
       that month. According to plaintiffs, on “the last day of closing, August 26, 2011, Barrick was
       notified that BMO would not be going through with the closing.” This was “[a]fter Avanti had
       already executed all necessary documents and met all conditions precedent.”
¶ 11       Plaintiffs alleged that BMO’s refusal to extend the loan caused Avanti to close its three
       existing clinics and to forfeit prepayments toward planned clinics. Avanti also lost its
       exclusivity and noncompetition agreements with the hospital systems, and Alexian Brothers
       asked Barrick to resign his position. Barrick also became personally liable on the loans from
       investors that funded the initial three clinics.
¶ 12       Plaintiffs brought four counts in their complaint. Count I sought a declaratory judgment
       that the Amended Terms “is a valid contractual agreement.” Counts II through IV alleged,

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       respectively, breach of contract, tortious interference with contract, and breach of fiduciary
       duty.
¶ 13       BMO filed a motion to dismiss the complaint under section 2-615 of the Code of Civil
       Procedure (Code) (735 ILCS 5/2-615 (West 2012)). BMO contended, first, that all four counts
       were barred by section 2 of the Credit Agreements Act (Act) (815 ILCS 160/2 (West 2012))
       because the Amended Terms did not constitute a written credit agreement as defined by section
       2. BMO noted that the Amended Terms was not “signed by the creditor and the debtor” (815
       ILCS 160/2 (West 2012)) as it bore only Gable’s signature. BMO further contended that
       plaintiffs did not adequately plead that they met the Amended Terms’ preconditions for a
       binding loan commitment. Alternatively, BMO maintained that, even if the Act did not bar the
       claims, they were deficient under the common law because plaintiffs failed to allege an
       enforceable contract.
¶ 14       Notably, in citing the Act as a bar, BMO alleged “affirmative matter avoiding the legal
       effect of or defeating [plaintiffs’] claim[s]” (735 ILCS 5/2-619(a)(9) (West 2012)).
       Recognizing this, BMO successfully moved, at the hearing on the motion to dismiss, to amend
       the motion to cite section 2-619(a)(9) of the Code. In fact, the motion to dismiss was a hybrid
       motion under section 2-619.1 of the Code (735 ILCS 5/2-619.1 (West 2012)).
¶ 15       At the hearing on the motion to dismiss, the trial court determined that the Amended Terms
       neither by itself nor in connection with other documents cited by plaintiffs satisfied section 2’s
       definition of a written credit agreement. Specifically, the court found that the Amended Terms’
       provisions on interest and maturity were too indefinite to satisfy the Act’s requisites. Also
       defeating plaintiffs’ suit, the court found, was their failure to produce documents indicating
       that they produced loan security satisfactory to BMO, which the Amended Terms specifically
       required. The court dismissed the entirety of plaintiffs’ complaint with prejudice.
¶ 16       Plaintiffs filed this timely appeal.

¶ 17                                           II. ANALYSIS
¶ 18       Plaintiffs challenge the trial court’s dismissal of their complaint. We agree with the trial
       court that the Act bars all claims in the complaint. Section 2-619(a)(9) of the Code provides for
       dismissal of an action where “barred by *** affirmative matter avoiding the legal effect of or
       defeating the claim.” 735 ILCS 5/2-619(a)(9) (West 2012). The Act supplies such “affirmative
       matter.” Section 2 of the Act states:
               “A debtor may not maintain an action on or in any way related to a credit agreement
               unless the credit agreement is in writing, expresses an agreement or commitment to
               lend money or extend credit or delay or forbear repayment of money, sets forth the
               relevant terms and conditions, and is signed by the creditor and the debtor.” 815 ILCS
               160/2 (West 2012).
       We review de novo a dismissal under section 2-619(a)(9). In re Marriage of Murray, 2014 IL
       App (2d) 121253, ¶ 34.
¶ 19       “There is no limitation as to the type of actions by a debtor which are barred by the Act, so
       long as the action is in any way related to a credit agreement.” First National Bank v. McBride
       Chevrolet, Inc., 267 Ill. App. 3d 367, 372 (1994). The bar applies “regardless of whether [the
       claims] arise out of contract or tort law.” Whirlpool Financial Corp. v. Sevaux, 874 F. Supp.
       181, 188 (N.D. Ill. 1994). Plaintiffs do not dispute that all of their claims are “action[s] on or

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       *** related to a credit agreement” (815 ILCS 160/2 (West 2012)). The foundational allegation
       in all four counts, we note, is that the Amended Terms is “a valid contractual agreement.”
¶ 20        The focus of plaintiff’s challenge on appeal is the trial court’s holding that the Amended
       Terms does not satisfy section 2’s requirement of an agreement in writing “[that] expresses an
       agreement or commitment to lend money or extend credit or delay or forbear repayment of
       money, sets forth the relevant terms and conditions, and is signed by the creditor and the
       debtor” (id.).
¶ 21        We disagree with plaintiffs that the Amended Terms satisfies section 2’s criteria. The most
       obvious noncompliance is the lack of mutual signatures on the Amended Terms. The
       document is signed by Gable alone. In the court below, BMO urged the signature issue as a
       ground for dismissal, and BMO continues to urge it on appeal. The trial court did not base its
       dismissal on the signature issue, but we can affirm on any ground supported by the record,
       regardless of whether the trial court relied on it. See Suchy v. City of Geneva, 2014 IL App (2d)
       130367, ¶ 19.
¶ 22        In their complaint, plaintiffs alleged that Gable signed the Amended Terms but did not
       allege that Avanti signed it. Consistent with this, the copy of the Amended Terms attached to
       the complaint shows only Gable’s signature. “The Act clearly sets forth that a credit agreement
       not only must be in writing but also must be signed by both the creditor and debtor.” McAloon
       v. Northwest Bancorp, Inc., 274 Ill. App. 3d 758, 763 (1995). The Act has a more stringent
       signature requirement than the general statute of frauds, the Frauds Act, which requires only
       the signature of “the party to be charged” or his agent (see 740 ILCS 80/1 (West 2012)).
       McAloon, 274 Ill. App. 3d at 763. In McAloon, this court held that a written loan proposal did
       not meet section 2’s signature requirement when it bore the bank’s signature but not the
       debtor’s. Id.
¶ 23        In their reply brief, plaintiffs begin their discussion of the signature issue with this
       declaration: “[T]he Amended Terms is signed by both parties.” Reading further, we see that
       plaintiffs do not mean to defy reality but rather propose a broad notion of what the Amended
       Terms comprises. Plaintiffs suggest that we treat the Amended Terms and the Terms
       Documents as a single document and deem it sufficient that the signatures of both parties
       appear on (some of) the Terms Documents (which number at least five).
¶ 24        Several of the cases plaintiffs cite for this approach do not even involve the Act. They stand
       for the general contract principle “that in the absence of evidence of a contrary intention, where
       two or more instruments are executed by the same contracting parties in the course of the same
       transaction, the instruments will be considered together and construed with reference to one
       another because they are, in the eyes of the law, one contract.” (Emphasis added.) Tepfer v.
       Deerfield Savings & Loan Ass’n, 118 Ill. App. 3d 77, 80 (1983). The italicized phrase,
       “executed by the same contracting parties,” casts doubt on the applicability of this rule here, as
       plaintiffs did not execute the document on which they base their suit: the Amended Terms. In
       any event, plaintiffs do not explain how Tepfer and other decisions applying this common-law
       rule provide guidance on the statutory signature requirement at issue in this case.
¶ 25        Plaintiffs do cite two decisions under the Act: R&B Kapital Development, LLC v. North
       Shore Community Bank & Trust Co., 358 Ill. App. 3d 912 (2005), and Bank One, Springfield v.
       Roscetti, 309 Ill. App. 3d 1048 (1999). These cases also do not provide guidance on the issue at
       hand. They stand for the proposition that a document that is not a credit agreement per se, such
       as a personal guaranty on a loan (Roscetti) or an agreement for the escrow of loan proceeds

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       (R&B Kapital), may be considered a “credit agreement” under section 2 if it is connected to a
       bona fide credit commitment. See R&B Kapital, 358 Ill. App. 3d at 919 (“[T]he escrow
       agreement was an integral part of the comprehensive credit agreement the plaintiff[-borrower]
       entered into with [the defendant-lender].”); Roscetti, 309 Ill. App. 3d at 1058 (“The guaranty,
       together with the note, the floor plan, and possibly other documents, constituted the
       comprehensive credit agreement.”). The Roscetti court observed:
                “A credit agreement often consists of several documents that, together, create the terms
                of the extension of credit. *** Significantly, the Act does not limit the definition of
                ‘credit agreement’ to being a single document.” Roscetti, 309 Ill. App. 3d at 1058.
¶ 26       The courts in these cases did not mention section 2’s signature requirement, nor did their
       conclusions rest on a tacit interpretation of the signature requirement. The courts focused on
       the substance of the documents, not on which parties signed which document.
¶ 27       Based on the parties’ briefs and our own research, we find that no Illinois court has decided
       whether documents may be aggregated to meet the signature requirement of section 2 of the
       Act. McAloon applied the signature requirement, but there was no issue in that case about
       multiple documents. Looking to federal courts that apply Illinois law, we note that this precise
       issue was presented to the Seventh Circuit Court of Appeals in Help At Home, Inc. v. Medical
       Capital, L.L.C., 260 F.3d 748 (7th Cir. 2001). See In re Consolidated Objections to Tax Levies
       of School District No. 205, 306 Ill. App. 3d 1104, 1113 (1999) (the decisions of federal courts
       on points of Illinois law are persuasive authority alone).
¶ 28       In Help At Home, Inc., the plaintiff (HAH) sued to enforce an alleged commitment by
       Medical Capital, L.L.C. (MedCap), to extend credit to cover a loan that HAH had outstanding
       with Harris Bank. The document that memorialized the terms of the agreement, the “ ‘Sale and
       Servicing Agreement’ ” (SSA), was signed by HAH but not by MedCap. MedCap sent HAH
       for its signature various Uniform Commercial Code (UCC) (810 ILCS 5/9-101 et seq. (West
       2012)) financing documents that gave MedCap a security interest in HAH’s accounts
       receivable, inventory, and other items. HAH signed all of these UCC documents, but MedCap
       signed only some. MedCap also sent HAH a commitment letter stating that MedCap would, at
       closing, extend HAH financing to cover the Harris Bank loan. The letter was signed by
       MedCap and did not require HAH’s signature. MedCap later refused to extend credit, and
       HAH brought suit. MedCap moved to dismiss the suit as barred by the Act. The district court
       agreed that the Act barred the suit because the documents on which HAH relied did not meet
       section 2’s signature requirement. Help At Home, Inc., 260 F.3d at 751-52.
¶ 29       In the appellate court, HAH contended that MedCap’s signature on the SSA was
       unnecessary because the SSA, the commitment letter, and the UCC documents were all part of
       a single transaction and, therefore, it sufficed that HAH and MedCap both signed at least some
       of the UCC documents. The appellate court defined the issue as “whether multiple documents
       may be aggregated to satisfy the signature requirement of Section 2 of the [Act].” Id. at 756.
       HAH cited Roscetti to support its reading of section 2, but the appellate court found that
       decision of no guidance on section 2’s signature requirement:
                    “[Roscetti] addresses the question of whether a credit agreement, as defined in
                Section 1 of the [Act], can be comprised of multiple documents, and it resolves that
                question in the affirmative. However, [Roscetti] gives us no indication of which parties
                had signed which documents and does not even mention the signature requirement of
                Section 2 of the [Act]. Although HAH suggests that, under [Roscetti], the [Act] is

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               satisfied when each party signs one of the documents comprising the credit agreement,
               it would be just as consistent with [Roscetti] to assert that both parties must sign all of
               the documents. Indeed, the latter assertion may be more consistent with the express
               terms of the [Act]. In short, [Roscetti] sheds little, if any, light on the question of
               whether multiple documents may be aggregated to satisfy the signature requirement of
               Section 2 of the [Act], which is the question we must answer in this case.” Id.
¶ 30       The court in Help At Home, Inc. declined to decide “this heretofore unanswered question of
       state law,” because even if it assumed that HAH could “rely on multiple documents to satisfy
       the [Act’s] signature requirement,” the court “still would have to conclude that the documents
       the parties signed *** were insufficient.” Id. This was because the documents that were signed
       by both parties, or at least by MedCap, 1 “simply [did] not encompass the entire loan
       agreement.” Id. at 757.
¶ 31       Having found only nonbinding authority on this issue, we ourselves examine the language
       of section 2. The goal of statutory interpretation is to ascertain the intent of the legislature, the
       best indication of which is the statutory language accorded its plain and ordinary meaning.
       Nowak v. City of Country Club Hills, 2011 IL 111838, ¶ 11. Section 2 permits a suit based on,
       or related to, a credit agreement that “is in writing ***, sets forth the relevant terms and
       conditions, and is signed by the creditor and the debtor.” 815 ILCS 160/2 (West 2012). We
       need not decide the full outlines of the signature requirement to decide the present case. It
       suffices for this case that we draw from section 2 a requirement that “the relevant terms and
       conditions” of the loan be discernible from documents that bear the signatures of both the
       creditor and the debtor. We leave for another day such questions as whether and to what extent
       a party is permitted to piece together the terms and conditions of a loan from multiple
       documents, not all of which bear the signatures of both the creditor and the debtor. In this case,
       the only document that sets forth any of the loan terms is the Amended Terms, but it is signed
       by Gable alone. The only documents that bear the signatures of both the creditor and the debtor
       are some of the Terms Documents. These, however, are generic, preprinted forms that do not
       reference any particular loan between the parties. Thus, the fact that the Terms Documents
       were, allegedly, executed contemporaneously with the Amended Terms does not bear on the
       signature issue.
¶ 32       Therefore, as the agreement on which plaintiffs base their suit does not meet section 2’s
       requirement of mutual signatures, plaintiffs’ action is barred under the Act. As the signature
       issue is a sufficient ground for affirming the trial court’s dismissal of plaintiffs’ complaint, we
       need not address the remaining grounds urged by BMO.

¶ 33                                      III. CONCLUSION
¶ 34       For the foregoing reasons, we affirm the judgment of the circuit court of Du Page County.

¶ 35       Affirmed.



           1
            We do not agree with the court’s seeming insinuation here that the creditor’s signature would have
       sufficed. Section 2’s dual-signature requirement distinguishes it from the Frauds Act, which requires
       only the signature of “the party to be charged” or his agent (740 ILCS 80/1 (West 2012)).

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