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SECOND DIVISION
June 29, 2001

This is an appeal from the denial of a motion for SupremeCourt Rule 137 (155 Ill. 2d R. 137) sanctions against petitioner-appellee Bradley Baker, M.D., and his counsel. Underlying thisappeal are two lawsuits brought by Baker. The first is a federalaction filed on September 7, 1999, against Daniel Berger, M.D.(Berger), respondent-appellant Daniel S. Berger, M.D., Ltd. (theBerger Corporation), and an entity bearing the name of North StarMedical Center (North Star). In the federal complaint, Bakersought damages for sexual harassment, discrimination, and breachof a purported partnership agreement, presumably generated by theconduct of Berger with respect to Baker. The second suit, astate court action for declaratory judgment, was filed onNovember 16, 1999, while the federal suit was still pending.⁽¹⁾ Inthe declaratory judgment action, which named the BergerCorporation and Health Professionals, Inc. (HPI), asrespondents,⁽²⁾ Baker sought a declaration as to theunenforceability of certain non-competition clauses contained inthree contracts, one of which purported to be an employmentagreement between Baker and the Berger Corporation.

In April 2000 the trial court dismissed the BergerCorporation from the declaratory judgment suit, on the groundthat none of the contracts had been signed by the BergerCorporation. Following its dismissal, the Berger Corporationmoved for sanctions against Baker and his counsel, which motion,as noted, was denied by the trial court.

The three entities involved in this case are the BergerCorporation; Health Professionals, Inc. (HPI); and the Center forSpecial Immunology (CSI), which was a subsidiary of HPI. CSIoperated a medical facility at 2835 North Sheffield in Chicago,where it employed Baker as a treating physician. Baker'simmediate supervisor was Berger, who was the medical director forthe CSI facility. Berger also is the president, sole shareholderand director of the Berger Corporation, a medical practice withoffices at the same 2835 North Sheffield address as the CSIfacility.

Baker worked for CSI from July 27, 1997, until April 7,1998. According to Baker's federal complaint, it was in July1997 (while Baker was employed by CSI) that he and Berger firstdiscussed forming an independent partnership. Baker alleges thatin April 1998 he, Berger and the Berger Corporation verballyformalized the terms of an agreement under which Baker was to bea full and equal partner with Berger by the fourth year of thepartnership. For the time being, the partnership was to operateunder the name "Daniel S. Berger, M.D., Ltd." and/or "Berger-Baker, Ltd.," but eventually it was to operate under the name"North Star Medical Center."⁽³⁾

Baker further alleges in his federal complaint that in July1998 he and Berger attended a conference on AcquiredImmunodeficiency Syndrome (AIDS) in Geneva, Switzerland. According to Baker, during this two-week conference trip,"defendant [Berger] repeatedly pressured [Baker] to have sex withhim," but Baker refused. In September 1998, after they hadreturned to Chicago, Berger allegedly "advised [Baker] that[Baker] was no longer going to be a partner, and instead offered[Baker] an employment agreement." On March 5, 1999, Bakertendered his resignation, effective April 9, 1999.

Baker filed his single-count complaint for declaratoryjudgment against the Berger Corporation and HPI on November 16,1999. As noted, the complaint sought a judgment declaringunenforceable certain non-compete provisions contained in threecontracts. Baker's alleged reason for seeking declaratory reliefwas that he "wishe[d] to practice medicine within the City ofChicago and would be prevented from doing so if any of thecontracts is found to be enforceable."

Copies of the contracts were attached to the complaint. Twoof them, both dated July 1, 1997, purported to be employmentagreements, one between Baker and the Berger Corporation (theBerger Corporation Agreement), and the other between Baker andCSI. The copy of the CSI contract was signed by Baker and byBerger as CSI medical director, but the Berger CorporationAgreement was unsigned. The third contract, which was dated July28, 1997, was a "Confidentiality and Non-Competition Agreement"between Baker and HPI, through HPI's subsidiary, CSI. Thisagreement (hereinafter the HPI agreement) was signed only byBaker.

Under the non-compete provisions in the Berger and CSIagreements, which are nearly identical, Baker was prohibited fromcompeting as a practicing physician within five miles of the CSIChicago facility "for eighteen months following the date oftermination." The restrictive covenant in the HPI agreementrestricts Baker from competing within 50 miles of the CSI clinic"for one (1) year immediately following the termination" of hisemployment.

Baker dealt with the Berger Corporation Agreement in aseparate section of his single-count declaratory judgmentcomplaint, alleging that the contract "was presented to him by[the Berger Corporation]" and that "[t]he parties to the contractwere to be [the Berger Corporation] and [Baker]." (Emphasisadded.) Also in this section, Baker explicitly alleged that hisemployer was CSI, not the Berger Corporation. The complaintstated that:

"[The Berger Corporation] did not employ [Baker] uponhis relocation to Chicago from Washington[, D.C., whereBaker had completed his residency]. [The BergerCorporation] did not pay [Baker's] salary or provide[Baker] with any benefits. From the time of [Baker's]hire on July 27, 1997[,] until the time all relationswith CSI were severed on April 7, 1998[,] it was CSIwho employed [Baker], paid his salary and provided hisbenefits. *** It was the CSI facility in Chicago thatwas [Baker's] place of employment for nearly a yearafter he was retained by CSI."

On January 7, 2000, the Berger Corporation moved to dismissBaker's declaratory judgment complaint pursuant to sections 2-615and 2-619(a)(9) of the Code of Civil Procedure (735 ILCS 5/2-615& 5/2-619(a)(9) (West 1998)). According to the BergerCorporation, the only one of the three contracts which related tothe Berger Corporation was the unsigned Berger CorporationAgreement. The Berger Corporation argued that the "Berger[Corporation] Agreement attached to the Complaint [was] notexecuted by either party" and thus was not operative. Hence,there was no actual controversy to be adjudicated, as required bysection 2-701 of the Code of Civil Procedure (735 ILCS 5/2-701(West 1998)), and Baker's complaint therefore should bedismissed.

In support of its motion, the Berger Corporation attached anaffidavit of Berger stating that "[t]o the best of [his]knowledge and recollection[,] neither [he] nor anyone else eversigned the purported [Berger Corporation Agreement]." Bergerfurther stated that he had "never seen an original or even acopy" of this agreement, adding that he was the only person whowould have been authorized to sign it on behalf of the BergerCorporation. The affidavit also stated that Berger never toldBaker or his attorneys that he would enforce the BergerCorporation Agreement against Baker.

The Berger Corporation also alleged in its motion that Baker"manufactured" the alleged controversy as to the enforceabilityof the Berger Corporation Agreement and the other contracts in a"belated attempt" to justify his failure to seek employmentfollowing termination, with respect to his action for damages inhis federal lawsuit. According to the Berger Corporation, Bakerwas attempting to establish (through his declaratory judgmentcomplaint) that he was prevented from seeking employment, andthus from mitigating damages, by the non-compete provisions inthe Berger Corporation Agreement and the other contracts.

The Berger Corporation further alleged in its motion that asecond motive for Baker's declaratory judgment complaint was toharass Berger and the Berger Corporation by increasing theircosts of defense.

On April 4, 2000, after hearing argument, the trial court granted the Berger Corporation's motion to dismiss Baker'sdeclaratory judgment complaint. The court found that none of thecontracts attached to the complaint was executed by the BergerCorporation, and that Baker and the Berger Corporation "neverentered into any kind of agreement that is enforceable in thiscourt." Since neither Berger nor the Berger Corporation "weresignatories," the court concluded that there was "no recourseother than to dismiss [the Berger Corporation] as a defendant."

Shortly thereafter the Berger Corporation moved forsanctions against Baker and his attorneys, pursuant to SupremeCourt Rule 137 (155 Ill. 2d R. 137). According to the BergerCorporation, the Berger Corporation Agreement was unsigned andunenforceable, and thus it did not present the trial court with aripe controversy. In support of this contention, the BergerCorporation attached a copy of a letter from its counsel toBaker's counsel dated December 24, 1999 (after the complaint wasfiled). In this letter, the Berger Corporation's counsel statedthat "no fully executed written employment agreement of any typeexists between your client[,] Dr. Bradley Baker[,] and Daniel S.Berger, M.D., Ltd." Accordingly, the Berger Corporation arguedthat Baker's declaratory judgment complaint was not warranted byexisting law, in contravention of Rule 137. Baker also ran afoulof this rule, the Berger Corporation maintained, in that he filedhis complaint "for the improper purpose of trying to manufacturean excuse for plaintiff's failure to have attempted to mitigatehis damages" in the separate, federal suit.

On June 13, 2000, the trial court heard argument, and deniedthe Berger Corporation's motion for Rule 137 sanctions. Thecourt found that even though the Berger Corporation Agreement wasunsigned, there was a reference in the Berger CorporationAgreement to "Daniel S. Berger[,] Limited, a corporation[,] asbeing the entity within which the contract is entered." According to the court, "[b]ecause there was one contract [theCSI contract] that had appended the signature of both [parties],there was some basis for concern that the prior contract of thesame date [the unsigned Berger Corporation Agreement] enteredinto between Daniel S. Berger[,] Limited[,] and Bradley Bakermight constitute a basis for the undertaking between theparties." The court also determined that Berger's signature onthe CSI agreement, "without identifying his corporate status asbeing inclusive, could give rise to the colorable belief that heentered into [it in] his own capacity as medical director of[the] Center for Special Immunology." The court concluded thatBaker had "a prima facie colorable basis for determining thatthere could be liability on [his] behalf *** with regard to theseundertakings," and Rule 137 sanctions therefore wereinappropriate.

In response to the Berger Corporation's emergency motion,the court subsequently found, pursuant to Supreme Court Rule304(a) (155 Ill. 2d R. 304(a)), that there was no just reason fordelaying enforcement or appeal of its June 13, 2000, orderdenying the motion for sanctions. The court also ordered HPI,the only other respondent in Baker's declaratory judgment action,"dismissed with prejudice for want of prosecution."

The instant appeal followed.

The Berger Corporation's central argument on appeal is thatthe Berger Corporation Agreement was unsigned and unenforceable,and that Baker was fully aware that there was no basis for thelawsuit when he filed it, since the agreement was never signed. Baker does not allege that there was any oral agreement, nor anyother basis pursuant to which Baker would have been bound to theBerger Corporation by any non-compete agreement which would haverequired a declaratory judgment to resolve it. Accordingly, theBerger Corporation urges that Baker's complaint was not warrantedby existing law, in violation of Rule 137, and that the trialcourt therefore abused its discretion in denying the motion forsanctions. We agree.

A complaint for declaratory judgment must present an actualcontroversy, and it must demonstrate that the plaintiff isinterested in the controversy. First of America Bank v. Netsch,166 Ill. 2d 165, 173, 651 N.E.2d 1105, 1109 (1995) (citingUnderground Contractors Ass'n v. City of Chicago, 66 Ill. 2d 371,375-76, 362 N.E.2d 298, 300-01 (1977)). An "actual controversy"exists if there is a legitimate, concrete dispute "admitting ofan immediate and definite determination of the parties' rights,the resolution of which would help terminate all or part of thedispute." Netsch, 166 Ill. 2d at 173, 651 N.E.2d at 1109; seealso Kerr Steamship Co. v. Chicago Title & Trust Co., 120 Ill.App. 3d 998, 1003, 458 N.E.2d 1009, 1013 (1983). A plaintiff isinterested in the controversy if he has a personal claim or rightwhich is capable of being affected. Kerr, 120 Ill. App. 3d at1003, 458 N.E.2d at 1013 (citing Underground Contractors, 66 Ill.2d at 376, 362 N.E.2d at 301).

Supreme Court Rule 137 "authorizes the imposition ofsanctions against a party or his attorney for filing a pleading,motion, or other paper that is not well grounded in fact andwarranted by existing law or which has been interposed for anyimproper purpose." In re Marriage of Adler, 271 Ill. App. 3d469, 476, 648 N.E.2d 953, 957 (1995). The policy underlying therule is to penalize a litigant "who pleads frivolous or falsematters, or who brings a suit without any basis in the law." Inre Estate of Wernick, 127 Ill. 2d 61, 77, 535 N.E.2d 876, 883(1989); see also In re Marriage of Pitulla, 256 Ill. App. 3d 84,90, 628 N.E.2d 563, 567 (1993) (purpose of Rule 137 is topenalize "the party who initiates a vexatious or harassing actionwithout a sufficient legal or factual underpinning").

In evaluating the conduct of an attorney, the court mustdetermine what was reasonable at the time of filing. Thus thestandard to be used in applying the rule is an objective one. "It is not sufficient that an attorney 'honestly believed' his orher case was well grounded in fact or law." Fremarek v. JohnHancock Mutual Life Insurance Co., 272 Ill. App. 3d 1067, 1074-75, 651 N.E.2d 601, 607 (1995); Edwards v. Estate of Harrison,235 Ill. App. 3d 213, 220-21, 601 N.E.2d 862, 867 (1992).

The appropriate standard of review for the granting ordenying of sanctions is abuse of discretion. Peterson v.Randhava, 313 Ill. App. 3d 1, 9, 729 N.E.2d 75, 82 (2000). "Atrial court abuses its discretion when its finding is against themanifest weight of the evidence [citation], or if no reasonableperson would take the view adopted by it." Technology InnovationCenter, Inc. v. Advanced Multiuser Technologies Corp., 315 Ill.App. 3d 238, 244, 732 N.E.2d 1129, 1134 (2000) [hereinafter TIC]. While the trial court's determination is given considerabledeference, a reviewing court is not precluded "from independentlyreviewing the record and finding an abuse of discretion if thefacts warrant." TIC, 315 Ill. App. 3d at 244, 732 N.E.2d at1134.

In the instant case, it is undisputed that the BergerCorporation Agreement, the only one of the three contracts whichrelates specifically to the Berger Corporation, is unsigned. This point is overwhelmingly supported by the evidence in therecord. For example, the copy of the Berger CorporationAgreement which is attached to Baker's complaint is not signed. "When facts alleged in a complaint differ from those shown by anexhibit attached to the complaint, the exhibit controls." Henderson v. Miller, 228 Ill. App. 3d 260, 264, 592 N.E.2d 570,573 (1992); see also Johnson v. Johnson, 244 Ill. App. 3d 518,523, 614 N.E.2d 348, 352 (1993) (exhibit controls overcomplaint).

In addition, Baker's allegations in his complainteffectively concede that the Berger Corporation Agreement was notsigned and that it was inoperative. See Calloway v. AllstateInsurance Co., 138 Ill. App. 3d 545, 549, 485 N.E.2d 1242, 1245(1985) ("Allegations contained in a complaint are judicialadmissions and are conclusive against the pleader"). As noted,in the section of the complaint devoted to the Berger CorporationAgreement, Baker alleges that "[t]he parties to the contract wereto be [the Berger Corporation] and [Baker]." (Emphasis added.) Since this allegation states who the parties "were to be" ratherthan who they "were," the clear meaning is that the contract hadnot been executed. This is underscored later in the same sectionwhere Baker expressly alleges that his employer was CSI, not theBerger Corporation. As noted, the complaint states that:

"[The Berger Corporation] did not employ [Baker] uponhis relocation to Chicago from Washington[, D.C., whereBaker had completed his residency]. [The BergerCorporation] did not pay [Baker's] salary or provide[Baker] with any benefits. From the time of [Baker's]hire on July 27, 1997[,] until the time all relationswith CSI were severed on April 7, 1998[,] it was CSIwho employed [Baker], paid his salary and provided hisbenefits. *** It was the CSI facility in Chicago thatwas [Baker's] place of employment for nearly a yearafter he was retained by CSI."

Baker's concessions in his complaint fully bear out Berger'sassertions about the Berger Corporation Agreement in hisaffidavit. As noted, in this affidavit Berger states that to thebest of his knowledge and recollection "neither [he] nor anyoneelse ever signed" the Berger Corporation Agreement, nor had heever seen an original or even a copy of it. Berger adds that heis the only person who would have been authorized to sign theagreement on behalf of the Berger Corporation. This assertionthat the contract was not signed is made even more forcefully ina letter dated December 24, 1999, from the Berger Corporation'scounsel to Baker's counsel. In this letter, as noted, the BergerCorporation's counsel states that "no fully executed writtenemployment contract of any type exists between your client[,] Dr.Bradley Baker[,] and Daniel S. Berger, M.D., Ltd."

While the affidavit (dated January 5, 2000) and the December24, 1999, letter both came after the declaratory judgmentcomplaint was filed, they came well before the April 4, 2000,hearing on the Berger Corporation's motion to dismiss thecomplaint. "[A]n attorney has an obligation to promptly dismissa lawsuit once it becomes evident that it is baseless." Shea,Rogal & Associates, Ltd v. Leslie Volkswagen, Inc., 250 Ill. App.3d 149, 153, 621 N.E.2d 77, 80 (1993) [hereinafter Shea, Rogal];In re Caruso, 185 Ill. App. 3d 739, 744, 542 N.E.2d 375, 378-79(1989).

Thus it is beyond question that there was no executedcontract between Baker and the Berger Corporation. Without sucha contract, Baker's complaint presented no actual controversy (between Baker and the Berger Corporation) in which Baker had aninterest, as required by section 5/2-701 of the Code of CivilProcedure (735 ILCS 5/2-701 (West 1998)). See First of AmericaBank v. Netsch, 166 Ill. 2d 165, 173-74, 651 N.E.2d 1105, 1109(1995). Moreover, there can be no question, based on theadmissions in the complaint plus the other submissions discussedabove, that it was readily apparent generally, and specificallyapparent to Baker or his counsel, that the Berger CorporationAgreement had not been executed, and thus that the declaratoryjudgment complaint was not "warranted by existing law" asrequired by Rule 137.

We take cognizance of the fact that even if Baker or hiscounsel had been unaware of the situation, it would not exoneratethem from sanctions because they had an obligation to investigatebefore filing. See Fremarek, 272 Ill. App. 3d at 1075-76, 651N.E.2d at 607-08 (reversing denial of motion for Rule 137sanctions, where "reasonable inquiry" into facts and law wouldhave shown that claimant's representations regarding workers'compensation lien were "devoid of any legal merit"); see alsoEdwards, 235 Ill. App. 3d at 220, 601 N.E.2d at 867 (Rule 137imposes upon both client and counsel the duty to make "reasonableinquiry").

The fact that Baker's suit may have had validity against oneof the entities allegedly involved here does not validate hisfiling suit against another of these entities, even if there issome external relationship between them. Each separate entitymust be dealt with on its own terms. Cf. Van Pelt v. Berefco,Inc., 60 Ill. App. 2d 415, 430, 208 N.E.2d 858, 866 (1965)(declaration of rights not authorized "where plaintiff has namedparties with whom he had no actual controversy and had omittedothers without whom the controversy could not be terminated").

We note that this fact was recognized by the able trial judge,who in dismissing the complaint against the Berger Corporationstated that "in this instance any claim for a non-compete wouldgo against the entities who signed the contract as a matter oflaw and not against parties who are not signatories to thecontract."

Baker's declaratory judgment action was solely against theBerger Corporation. HPI, the only other respondent named in thecomplaint, apparently was never served and, as noted, wasdismissed for want of prosecution. CSI, the only one of thethree entities with a fully executed contract attached to thecomplaint and therefore the only entity which belongs in thelawsuit, was never joined or named as a party to this action.

Baker argues first that the lack of a signed copy of theBerger Corporation Agreement is "not controlling." According toBaker, "it is not at all unusual for an employer or corporationto keep signed copies of restrictive covenants, even if theemployee does not keep a signed copy, is never given one, ormisplaces it." Baker contends that while he did not have asigned copy of the Berger Corporation Agreement, he "believed"that the agreement had been "fully executed." As noted, thestandard used in applying Rule 137 is an objective one where thecourt must determine what was reasonable at the time of filing. A subjective, good faith belief that the case is well grounded infact or law is insufficient to meet the burden of Rule 137. Burrows v. Pick, 306 Ill. App. 3d 1048, 1051, 715 N.E.2d 792, 794(1999); Fremarek, 272 Ill. App. 3d at 1074-75, 651 N.E.2d at 607;Edwards, 235 Ill. App. 3d at 220-21, 601 N.E.2d at 867. Forpurposes of Rule 137, it is irrelevant whether Baker subjectivelybelieved that the Berger Corporation possessed a signed copy ofthe Berger Corporation Agreement.

Moreover, Baker's alleged belief that the Berger CorporationAgreement had been executed is negated by the allegations in hiscomplaint that the parties to the contract "were to be" (ratherthan "were") Baker and the Berger Corporation, and that hisemployer was CSI and not the Berger Corporation. Theseadmissions are fully consistent with the assertion by the BergerCorporation's counsel (in a December 1999 letter) that "no fullyexecuted written employment contract of any type" existed betweenBaker and the Berger Corporation, and with Berger's statement inhis January 2000 affidavit that neither he nor anyone else hadever signed the Berger Corporation Agreement.

Since there is no executed contract between Baker and theBerger Corporation, there is no "actual controversy" between themas to the enforceability of the covenant not to compete. Asnoted, declaratory relief requires such a controversy, i.e., alegitimate, concrete dispute "admitting of an immediate anddefinite determination of the parties' rights." Netsch, 166 Ill.2d at 173, 651 N.E.2d at 1109. While the "actual controversy"requirement is met even if there is merely a threat of injury tothe plaintiff (see Mimica v. Area Interstate Trucking, Inc., 250Ill. App. 3d 423, 426, 620 N.E.2d 1328, 1331 (1993), here thereis not even that. Berger did not threaten to enforce the BergerCorporation Agreement against Baker, nor did Baker allege thatsuch a threat was made. Absent an executed contract or even athreat to enforce the contract, there is no dispute here, andBaker's suit therefore has no basis in law or fact within themeaning of Rule 137. A suit lacking such a basis is frivolous. See Fremarek, 272 Ill. App. 3d at 1074, 651 N.E.2d at 606.

Even if the Berger Corporation Agreement had been executedand operational, it appears from the allegations in Baker'scomplaint and from the terms of the contract that the non-competeprovision would nonetheless have expired before Baker'sdeclaratory judgment complaint was filed. Thus the case would bemoot and therefore outside the proper scope of declaratoryrelief. See Barrington Community Unit School District No. 220 v.Special Education District, 245 Ill. App. 3d 242, 251, 615 N.E.2d1153, 1160 (1993) ("actual controversy" requirement "is designedto prevent the court from passing on hypothetical questions oflaw or rendering advisory opinions, such as when the case is mootor premature"); Weber v. St. Paul Fire & Marine Insurance Co.,251 Ill. App. 3d 371, 373, 622 N.E.2d 66, 68 (1993) (declaratoryjudgment action "is not intended to permit moot or hypotheticalcases").

As noted, in the portion of Baker's complaint devoted to theBerger Corporation Agreement, Baker alleges that "all relations"with CSI, his employer, were severed on April 7, 1998. Later inthe complaint he states that his "employment with HPI and CSI wasterminated on April 7, 1998." As further noted, the non-competeprovisions in both the Berger Corporation Agreement and the CSIcontract purported to prohibit Baker from competing "for eighteenmonths following the date of termination." Eighteen months fromApril 7, 1998, is October 1999, which is the month before Baker's(November 16, 1999) declaratory judgment complaint was filed.

Baker next argues that a reference in the unsigned BergerCorporation Agreement indicating that the Berger Corporation hadsigned the CSI contract could support a claim that the BergerCorporation was a party to the signed, executed CSI contract. This argument is without merit.

The pertinent portion of the Berger Corporation Agreementappears in its non-compete provision (paragraph 6), and statesthat:

"Employee acknowledges that he is the subject ofrestrictive covenants contained in that certainAgreement[] executed by Daniel S. Berger, LTD[,] andthe Center for Special Immunology and contemporaneouslywith this Employment Agreement and the terms of saidrestrictive covenants are incorporated herein byreference." (Emphasis added.)

Thus the Berger Corporation Agreement appears to indicate thatthe Berger Corporation signed the CSI Agreement. However, thereis nothing in the CSI Agreement itself to indicate that it wassigned by the Berger Corporation. The CSI Agreement was signedby Baker and by Berger as medical director for CSI. There is noindication that Berger signed this contract on behalf of theBerger Corporation.

We fail to see how a reference in an unsigned contractindicating that the Berger Corporation had executed a separate,signed agreement could render the Berger Corporation a party tothis second contract. This is particularly true where, as here,the CSI agreement was attached to the complaint and shows on itsface that it was signed not by the Berger Corporation but byBerger in his representative capacity as the medical director forCSI, an entity which is separate from the Berger Corporation.

Finally, with respect to the fact that in any event the non-compete provision would have expired prior to the filing of thecomplaint, Baker contends that this is not necessarily true. According to Baker, the word "termination" as used in the non-compete provisions is ambiguous, and thus might refer to thetermination of the contract, and not to the termination date ofBaker's employment. Baker also points to the "Term of Agreement"section of the Berger Corporation Agreement and the CSI contract,which section provides that the initial employment period is fromJuly 1, 1997, to June 30, 1998, and that the "agreement shallcontinue to renew automatically after June 30^th, unlessterminated by either party by notice serviced by the other partyby March 30^th of the then current employment year." Thus,according to Baker's argument, if the word "termination" referredto the end of the contract, and if the contract were notterminated by either party by March 30, and thus wereautomatically renewed to the following June 30, then the 18-monthnon-compete period would not begin to run until June 30, 1999,which would extend the provision well beyond the November 1999filing date of Baker's complaint.⁽⁴⁾

This highly speculative contention is unsupported by thetext, and even in the absence of the fact that the BergerCorporation Agreement was never executed, it would not vindicatethe pursuit of this declaratory judgment action. There isinsufficient merit in this interpretation to raise the subject ofBaker's declaratory judgment suit to the level of an "actualcontroversy," which as noted is required for declaratory relief.See Netsch, 166 Ill. 2d at 173, 651 N.E.2d at 1109; Kerr, 120Ill. App. 3d at 1003, 458 N.E.2d at 1013. To bring a declaratoryjudgment action to pursue a remote, speculative possibility is topursue a complaint that is otherwise unwarranted. "Where amatter is contingent or uncertain, a court will not declare therights of the parties to that matter." Drayson v. Wolff, 277Ill. App. 3d 975, 979, 661 N.E.2d 486, 490 (1996). In thisinstance, even if the Berger Corporation Agreement had beenexecuted, the complaint for declaratory judgment still would nothave been warranted since the non-compete provision would haveexpired prior to the filing of the complaint, rendering the casemoot in any event. See Weber, 251 Ill. App. 3d at 373, 622N.E.2d at 68; Barrington, 245 Ill. App. 3d at 251, 615 N.E.2d at1160.

We further emphasize that, as noted, of all the entitieswith whom Baker purports to have entered into any kind ofrelationship, he joined only one of them, the Berger Corporation.While he also named HPI in his complaint, he never served it, andHPI was subsequently dismissed for want of prosecution. Significantly, Baker never even named CSI, with whom he had asigned employment agreement. Thus of the three entitiesinvolved, only the Berger Corporation was joined, and it remainsthe sole target of the declaratory judgment action. The factthat there could be an action against CSI is thereforemeaningless, since CSI was never joined.

While Berger's signature appears on the CSI agreement, it isclear from its face that he signed the agreement in hisrepresentative capacity on behalf of CSI and therefore would notbe personally bound, even if he had signed in a corporatecapacity. See Goldstein v. Scott, 108 Ill. App. 3d 867, 873, 439N.E.2d 1039, 1044 (1982) (agent not liable for conduct of hisprincipal if that principal is disclosed; officer of corporationcannot normally be held liable for acts he performs ascorporation's agent). The trial court concluded that there wassome color of right to bring this action, based on Berger'ssignature on the CSI agreement. With all due deference to theable trial judge, there is no conceivable basis on which topresume that this signature binds Baker to Berger or the BergerCorporation, since Berger signed only as an agent of CSI, and notindividually. As noted, Baker did not see fit to sue CSI. Thesole target of his declaratory judgment action was the BergerCorporation.

We are aware that the purpose of Rule 137 is not to penalizelitigants because they were unsuccessful. That is not thesituation here. The important point in the instant case is notthat Baker was unsuccessful in his suit for declaratory judgment. Rather, it is that there was never a warranted reason forbringing this action against the Berger Corporation in the firstplace. Rule 137 is intended "to restrict litigants who pleadfrivolous or false matters without any basis in law." Fremarek,272 Ill. App. 3d at 1074, 651 N.E.2d at 606; Peterson, 313 Ill.App. 3d at 7, 729 N.E.2d at 79-80.

While the award of sanctions is within the discretion of thetrial court, this does not give the trial judge complete latitudewhere the facts are wholly inadequate to preclude such an award. See TIC, 315 Ill. App. 3d at 244, 732 N.E.2d at 1134 (while trialcourt's determination is given considerable deference, reviewingcourt is not precluded from reviewing the record and findingabuse of discretion "if the facts warrant"). Even in the contextof a dispute straddling both a federal and a state action whichmay have existed in this case, we conclude that the trial court'sdenial of the Berger Corporation's motion for sanctions wasagainst the manifest weight of the evidence and thus was an abuseof discretion. See TIC, 315 Ill. App. 3d at 244, 732 N.E.2d at1134; In re Estate of J.M., 287 Ill. App. 3d 110, 115, 678 N.E.2d15, 18 (1997).

Accordingly, we reverse the trial court's denial of theBerger Corporation's motion for Rule 137 sanctions, and remandthe cause for a determination as to the proper amount ofsanctions.

Reversed and remanded.

CAHILL, P.J.. and McBRIDE, J., concur.

1. According to the Berger Corporation's appellate brief,judgment was entered in the federal suit in favor of the BergerCorporation and the other defendants on August 15, 2000, afterthe dismissal of Baker's declaratory judgment action in statecourt. Baker's motion for reconsideration of the federal courtjudgment apparently is pending in the U.S. District Court for theNorthern District of Illinois.

2. Baker apparently never served HPI, which was subsequentlydismissed from the case for want of prosecution.

3. It is unclear from the record if North Star evermaterialized as an entity.

4. While Baker contends in his brief that his employmentactually ended on March 16, 1999, and that the non-competeprovisions thus would have been in effect well beyond theNovember 1999 filing date of his complaint, Baker neverthelessconcedes in his complaint that "all relations with CSI weresevered on April 7, 1998," and that his employment with CSI andHPI "was terminated on April 7, 1998." "Allegations contained ina complaint are judicial admissions and are conclusive againstthe pleader." Calloway v. Allstate Insurance Co., 138 Ill. App.3d 545, 549, 485 N.E.2d 1242, 1245 (1985).