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SECOND DIVISION
December 9, 2003

No. 1-03-0559

PRESIDING JUSTICE WOLFSON delivered the opinion of thecourt:

This case involves a fictional invoice and the ProvidentHospital chief financial officer who told plaintiff D.S.A.Finance Corporation (DSA) it was real. The question is whetherdefendant Cook County should be required to pay the invoice. Thetrial court granted summary judgment in favor of Cook County. Weaffirm the trial court.

FACTS

DSA purchases accounts receivable from other companies at adiscount, also known as factoring. In November 2000, ShirleyDeSadier approached DSA about possibly selling to DSA an accountreceivable owned by her company, D.P. Staffing. D.P. Staffingallegedly provided hospitals with temporary maintenancepersonnel. DeSadier told DSA D.P. Staffing had provided servicesto Provident Hospital (Provident) during October 2000, and, as aresult, Provident owed D.P. Staffing $343,696.10. DeSadier gaveDSA a copy of the invoice (D.P. invoice) created by D.P. Staffingand issued to Provident indicating the charges. DeSadier toldDSA it could verify the invoice with Earl Bell, Provident's chieffinancial officer (CFO). Provident is owned and operated by CookCounty. At the time of these events, Earl Bell was Provident'sAssociate Administrator of Finance, a position which isequivalent to that of a CFO.

DSA called Provident's account receivables department toverify the D.P. invoice and the call was directed to Bell. On oraround November 28, 2000, Bell confirmed the D.P. invoice was "atrue and accurate statement" of the amount the county owed D.P.Staffing. On November 30, 2000, Bell signed a fax transmittalform, which he received from DSA, verifying the invoice for$343,696.10 was correct and would be paid to DSA on February 13,2000.⁽¹⁾ DSA subsequently agreed to purchase the Provident accountfrom D.P. Staffing.

Provident never made a payment to DSA. DSA's attempts tospeak with Bell or Provident's chief administrative officer aboutthe delinquent account were unsuccessful. On February 23, 2001,DeSadier paid DSA $59,000 towards the account. A few weekslater, D.P. Staffing issued a check to DSA for $200,000, but thecheck was not honored.

On July 6, 2001, DSA filed its initial complaint againstProvident alleging breach of contract and seeking $292,696.10 indamages. The complaint also included several counts againstBell, DeSadier, Payne, and D.P. Staffing. As exhibits to thecomplaint, DSA attached the D.P. invoice, DeSadier's factoringapplication, the factoring contract, the fax transmittal formsigned "Earl Bell," a list of Provident's credit references, thebill DSA sent to Provident, and a copy of the $200,000 check fromD.P. Staffing. DSA later amended its complaint to name CookCounty as a defendant in place of Provident.

Cook County filed a hybrid motion seeking dismissal orsummary judgment, contending DSA failed to plead the existence ofa contract. Cook County attached three affidavits in support ofits motion.

Robert Triplett, Provident's Associate Administrator ofHuman Resources, stated in an affidavit the county boardappointed Earl Bell as Provident's "Associate Administrator ofFinance (Chief Financial Officer)" in 1996. Bell resigned in2001.

Patrick McFadden, Cook County's purchasing agent, stated inan affidavit he kept records of Cook County's contracts andpurchase orders. On March 15, 2002, McFadden reviewed hisrecords and found no contract or purchase order concerningProvident and D.P. Staffing or DSA.

Dennis Rice, Provident's Associate Administrator ofProfessional Affairs, said in his affidavit his job involvedoverseeing support services. Rice said he was "responsible forverifying and receiving reports for [the materials management,pharmacy, hospital security, plant operations, purchasing anddietary] departments, including county voucher forms relating tomaterial management, plant operations, and purchasing." Afterreviewing his records, Rice found no invoices or voucher formsfor the services reflected in the D.P. invoice. Rice said D.P.Staffing never provided any services to Provident, including theservices reflected by the D.P. invoice for October 2000. Riceaverred Provident directly employed 36 maintenance workers tomeet its maintenance needs and "given the physical plant, itssize and maintenance requirements, temporary maintenancepersonnel for the five-week period at the volume reflected in theD.P. invoice [made] no sense."

The county also attached to its hybrid motion Earl Bell'sdeposition from another lawsuit. In the other lawsuit, CapitalCity Financial Group Incorporated (Capital City), anotherfactoring company, filed a complaint against Cook County afterBell, acting as Provident's CFO, verified two fraudulent invoicessubmitted to Capital City. During a deposition, Bell invoked hisFifth Amendment right against self-incrimination when asked abouthis position as Provident's CFO and his actions leading up to thelawsuit. Capital City Financial Group, Inc. v. County of Cook,No. 01 C 564 (N.D. Ill. 2002).

DSA subsequently filed a second amended complaint allegingthree additional counts against Cook County for account stated,misrepresentation, and negligent hiring.

In response, Cook County filed another motion for summaryjudgment and incorporated its memorandum in support of theprevious motion to dismiss and the corresponding exhibits. Inaddition, Cook County attached the affidavit of Stephanie Wright-Griggs, the chief operating officer of Provident. Griggs statedBell worked under her direction and his responsibilities includedthe day-to-day supervision of Provident's financial operations;however, Bell acted outside the scope of his employment when hetold DSA the county would pay the D.P. invoice. Before CapitalCity filed its lawsuit in March 2001, Griggs received nocomplaints that Bell was saying the county would pay unauthorizedvouchers.

DSA filed a response to Cook County's motion for summaryjudgment and attached two exhibits: the statement of materialfacts Cook County filed in the Capital City case and theaffidavit of Richard Peck. Peck was an officer and director ofDSA and his affidavit described the events leading up to DSA'sdecision to factor the D.P. invoice, including DSA'scommunications with Bell.

The trial court found no contract existed and grantedsummary judgment on Counts I and II. The trial court also foundDSA failed to show a genuine issue of material fact on count IVfor negligent hiring. Finally, the trial court found, as amatter of law, DSA's reliance on Bell's verification of theinvoice was unjustified; therefore, the court granted summaryjudgment on the misrepresentation claim.

On appeal, DSA contends the trial court erred in grantingsummary judgment on Counts I, II and III.

DECISION

Summary judgment is properly granted when the pleadings,depositions, affidavits, and admissions show there is no genuineissue of material fact and the moving party is entitled tojudgment as a matter of law. Harrison v. Harden County CommunitySchool District, 197 Ill. 2d 466, 470, 758 N.E.2d 848 (2001). When reviewing grants of summary judgment, the court willconstrue the information in the record strictly against themovant and liberally in favor of the nonmoving party. KleinwortBenson North America, Inc. v. Quantum Financial Services, Inc.,285 Ill. App. 3d 201, 209, 673 N.E.2d 369 (1996). We review thetrial court's grant of summary judgment de novo. Harrison, 197Ill. 2d at 470-71.

I. Account stated and breach of contract - Counts I and II

A. Breach of Contract

A party claiming breach of contract must present factsshowing (1) a valid and enforceable contract existed; (2) theplaintiff performed according to the contract; (3) the defendantbreached the contract; and (4) the breach resulted in damages. Mansourou v. John Crane, Inc., 248 Ill. App. 3d 963, 965, 618N.E.2d 689 (1993).

In this case, DSA bases its breach of contract claim on acontract which DeSadier told DSA existed between D.P. Staffingand Provident Hospital. DSA did not attach a written copy of thecontract to its complaint, nor does it allege it ever received orsaw the contract. Instead, DSA relies on the D.P. invoice asproof of the underlying contract and contends Bell's verificationof the invoice serves as an admission the contract existed.

However, the county's purchasing agent stated in anaffidavit he keeps records of the county's contracts and he foundno contract between Provident and D.P. Staffing in the county'srecords.

Dennis Rice, who oversaw Provident's support services, alsofound no invoice for D.P. Staffing's services in his records andsaid D.P. Staffing never performed the services listed in theD.P. invoice.

Based on the pleadings, exhibits, and affidavits on record,we conclude there was no contract between D.P. Staffing andProvident Hospital for maintenance services in October 2000. DSAhas not presented a contract and instead only assumes one existedbased on the D.P. invoice it received from DeSadier and Bell'ssubsequent verification of it. Cook County's affidavits show nocontract between D.P. Staffing and Provident exists. Moreover,D.P. Staffing never provided services to Provident.

We will not consider Bell's deposition evidence from anotherlawsuit, which is what DSA asks us to do here. With regard tothis case, Bell never pleaded the Fifth Amendment on any factbecause DSA never deposed him. But cf. Central States, Southeastand Southwest Area Pension Fund v. Wintz Properties, Inc., 155F.3d 868, 872 (7th Cir. 1998) (trial court could draw a negativeinference against defendant corporation when its presidentinvoked his Fifth Amendment rights at trial).

We find no basis for granting DSA relief on its breach ofcontract claim. We affirm summary judgment on count II.

B. Account stated

"An account stated is merely a form of proving damages forthe breach of a promise to pay on a contract." Dreyer MedicalClinic, S.C. v. Corral, 227 Ill. App. 3d 221, 226, 591 N.E.2d 111(1992). Without prima facie proof of an agreement, DSA cannot beheld liable for account stated. See Dreyer Medical Clinic, 227Ill. App. 3d at 226-27. Accordingly, we affirm summary judgmenton count I.

II. Fraudulent misrepresentation - Count III

To successfully state a claim for fraudulentmisrepresentation, a party must allege: "(1) a false statement ofmaterial fact, (2) knowledge or belief of the falsity by theparty making it, (3) intention to induce the other party to act,(4) action by the other party in reliance on the truth of thestatements, and (5) damage to the other party resulting from suchreliance." Board of Education of City of Chicago v. A, C, and S,Inc., 131 Ill. 2d 428, 452, 546 N.E.2d 580 (1989). The partyalleging fraudulent misrepresentation must show it justifiablyrelied on another's statements. Soules v. General Motors Corp.,79 Ill. 2d 282, 268, 402 N.E.2d 599 (1980).

The parties do not dispute the following facts: (1) Belltold DSA the D.P. Invoice was correct and the county would payit; (2) Bell's statement was false; and (3) DSA detrimentallyrelied on Bell's statement by factoring the D.P. Staffingaccount. Additionally, Cook County does not contend Bell wasunaware of his statements' falsity when he made them. In thisappeal, the parties' disagreement centers on whether DSA wasjustified in relying on Bell's representations and whether Bell's statements can be imputed to Cook County. The parties alsodispute whether Cook County can be held vicariously liable underthe doctrine of respondeat superior for Bell's fraudulentactions. DSA contends Cook County should be estopped fromdenying liability.

A. Justifiable reliance

Typically, justifiable reliance is a question of fact;however, the court may dispose of the issue on summary judgmentif the facts are undisputed and only one conclusion is apparent. Neptuno Treuhand- Und Verwaltungsgesellschaft MBH v. Arbor, 295Ill. App. 3d 567, 575, 692 N.E.2d 812 (1998). To findjustifiable reliance, the court considers whether the party wasreasonable in relying on his adversary's representation in lightof the facts within his actual knowledge and any he might havediscovered by the exercise of ordinary prudence. Soules, 79 Ill.2d at 268. "[A] person may not enter into a transaction with hiseyes closed to available information and then charge that he hasbeen deceived by another." Chicago Export Packaging Co. v.Telephone Industries, Inc., 207 Ill. App. 3d 659, 663, 566 N.E.2d326 (1990). If the party's reliance is unreasonable in light ofthe information open to him, the loss is considered his ownresponsibility. Neptuno, 295 Ill. App. 3d at 575.

Cook County's purchasing ordinance mandates the following:

"The Board of Commissioners of Cook Countyshall have no power or authority to delegateto any committee or other person or personsthe 'power to act,' when such 'power to act'shall involve the letting of any contract orthe expenditure of public money exceeding thesum of $10,000.00; and any action of saidboard, or of any committee thereof, or of anyother person or persons in violation of thissection shall be null and void. No moneyshall be appropriated or ordered paid by saidCounty Commissioners beyond the sum of$10,000.00, unless such appropriation shallhave been authorized by a vote of at leasttwo-thirds of the members elected to the saidcounty board. And no officer of Cook County,or other person shall incur any indebtednesson behalf of the county, unless firstauthorized by said Board of Commissioners." Cook County Ordinances, ch. 10,