author: JUSTICE GOLDBERG

text:
    SYDNEY HIMMELSTEIN et al., Plaintiffs-Appellants, v. VALENTI DEVELOPMENT CORPORATION et al., Defendants-Appellees.
    First District (1st Division)
    No. 80-2950
    Opinion filed January 11, 1982.

      Kathleen J. Hittle, of Pretzel, Stouffer, Nolan & Rooney, Chartered, of Chicago (Robert Marc Chemers and Joseph B. Lederleitner, of counsel), for appellants.
    Thomas P. Valenti, of Karr & Valenti, Ltd., of Chicago, for appellees.
   JUSTICE GOLDBERG

delivered the opinion of the court:

Sydney and Ingeborg Himmelstein (plaintiffs) sued Valenti Development Corporation, Valenti Builders, Incorporated, and Joseph Valenti (defendants), seeking rescission of a real estate contract and other relief. In the amended complaint count I sought rescission of the contract. Count II sought to enjoin defendants from declaring a forfeiture of money paid by plaintiffs and from disposing of the subject real estate. Count II also prayed for reformation of the contract to reflect a more than 40% reduction in the purchase price. Count III alleged pre-contract tortious misrepresentation. Count IV sought to “pierce the corporate veil” and hold all three defendants personally liable upon the contract signed only by Valenti Development Corporation. The trial court dismissed counts I, II, and IV under section 48 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 48). Plaintiffs’ motion for leave to file a second amended complaint was denied. Plaintiffs appeal.

On March 12, 1979, plaintiffs contracted with defendant, Valenti Development Corporation, for the construction and purchase of a residence and adjoining lot in Lincolnshire, Illinois, for $185,900. Article 5 of the contract provides in part:

“* * *. Seller further agrees that (A) The construction shall be in a good and workmanlike manner and of good and substantial material, and shall comply with all applicable state and local zoning and building codes; (B) Residence shall be delivered free of substantial defects in material or workmanship to the extent set forth in the new warranty and service policy formerly adopted by the Home Builders Association of Chicagoland ° ° Seller will promptly repair, replace or otherwise attend to substantial defects in material or workmanship in or about the real estate which has been brought to its attention by purchaser during construction and within one year from the date of delivery of possession to Purchaser * 0

Article 8 of the contract provides:

“Any dispute between Purchaser and Seller with respect to labor and/or material, or whether the residence has been constructed as herein required, shall be determined by the architect preparing plans and specifications and such determination shall be conclusive and binding upon Purchaser and Seller.”

Plaintiffs alleged that about September 10, 1979, before conveyance of the finished property, plaintiffs observed a crack in a basement wall. Water was leaking from the crack onto the basement floor. Plaintiffs informed defendants of the situation. At the request of defendant, Valenti Builders, the architect who prepared the plans for the building inspected the premises in December. Plaintiffs accompanied the architect during his inspection.

By letter dated December 19, 1979, the architect stated he could not detect the crack complained of but “it was apparent that repair work had been performed” and that two of the basement walls “had been coated with a cement wash.” In the letter the architect also related the methods of repair which he was “advised” had been performed on the walls. The architect wrote:

“« a * I not believe that there is [sic] any structural problems. It would appear that Valenti Builders had used three different methods of waterproofing, when any one of them might have proved sufficient.
It appears that plans and specifications hace [sic] been followed in a workmanlike manner. When a deficiency did develop, Valenti has more than adequately attempted to rectify it.”

Nevertheless, the architect cautioned, “the real test, of course, is can the walls survive a wet season without leaks. This can be expected to occur next spring.” He finally suggested that the one-year warranty be extended an extra year “so that if for any reason a leak did not occur the first year, but for some reason did become evident the second, the Owner could be assured it would be repaired.”

This letter from the architect was presented to the trial court as a part of the motion by defendants to dismiss plaintiffs’ amended complaint. Defendants interpreted the architect’s report as a determination that no “substantial defect” then existed in the premises and scheduled a final closing date. Plaintiffs did not accept tender of the deed nor did they tender the balance of the purchase price. Thereafter, defendant, Valenti Development Corporation, invoked a forfeiture clause in the contract and declared a forfeiture of all money received from plaintiffs to date, the sum of $46,754.80.

Plaintiff, Sydney Himmelstein, filed an affidavit stating he inspected the subject premises on May 31,1980, presumably after the “wet season” described by the architect. The affidavit avers plaintiff observed some cracks in the basement walls, discoloration “by leaks and water seepage,” and repair patches which were not visible at the earlier inspection in December of 1979. Plaintiffs also submitted color photographs taken during the May inspection which evidence the veracity of the affidavit.

There is no dispute that a contract can legitimately provide for binding arbitration as to any “controversy thereafter arising between the parties” and such a provision “is valid, enforceable and irrevocable save upon such grounds as exist for the revocation of any contract * * *.”Ill. Rev. Stat. 1979, ch. 10, par. 101. See also Iser Electric Co. v. Fossier Builders, Ltd. (1980), 84 Ill. App. 3d 161, 405 N.E.2d 439, and Wilcox Co. v. Bouramas (1979), 73 Ill. App. 3d 1046, 392 N.E.2d 198.

In oral argument to this court, the parties agreed that section 8 of their contract above quoted effectively provides for binding arbitration and they are bound thereby. However, the parties disagree as to the interpretation and effect of the architect’s report. Defendants argue the report establishes the residence was without “substantial defect” at the time the property would have been conveyed to plaintiffs. Plaintiffs contend any conclusions reached by the architect support their position and show the structure was not constructed in a good and workmanlike manner and free from substantial defects as required by the contract.

In our opinion, the language of section 8 of the contract establishes binding arbitration of all disputes regarding the construction or condition of the premises. This section delegates to the architect the exclusive responsibility to resolve any dispute regarding “labor and/or material, or whether the residence has been constructed as herein required.” The architect stated, “It appears that plans and specifications have been followed in a workmanlike manner.” However, the essence of the dispute here is not an issue of labor or material. Paragraph 8 also requires the architect to determine if the home was “constructed as herein required.” This phrase necessarily refers to section 5 of the contract which requires defendants to deliver the home “free of substantial defects in material or workmanship * * *.” Thus the contract does provide for arbitration by the architect to resolve the factual matters involved in the present dispute between the parties. In our opinion, however, the architect’s report does not provide a sufficient answer to this problem.

First, the report itself specifies the architect became aware of the alleged defect and extent of repairs only through the representations by the parties. The architect indicated that he could not detect the defect complained of, and he personally did not observe any repairs being made. Clearly any repairs were performed before the architect inspected the premises and he was therefore not able to determine the extent of the problem. In this regard, the repairs made by defendants hampered an effective and independent inspection upon which an accurate evaluation should have been based.

Second, the report does not make an unequivocal determination as to whether a defect exists. On one hand the architect states he does not believe there are “any structural problems” and “it appears that plans and specifications were followed in a workmanlike manner.” On the other hand, the architect does indicate that a “deficiency did develop” and he could not be sure that the walls could “survive a wet season.” This equivocation on the part of the architect has resulted in what we believe to be a good faith dispute between the parties as to the interpretation of the report. We hold the report is not of sufficient clarity effectively to resolve the rights of the parties.

It follows that we are required to reverse the order appealed from insofar as it dismisses counts I and II of the amended complaint and to remand the cause for obtaining a proper and definitive report from the architect which will answer the questions above posed.

We do not believe the authorities cited by the parties require a different result. Plaintiffs rely on Petersen v. Hubschman Construction Co. (1979), 76 Ill. 2d 31, 389 N.E.2d 1154. In Petersen, the supreme court held the buyer of a residence has the right to rescind the contract before the property is conveyed if the seller violates the implied warranty of habitability. Petersen is inapplicable at this phase of the case at bar because Petersen does not involve an arbitration clause.

In Millan v. Seibt (1977), 49 Ill. App. 3d 506, 364 N.E.2d 521, we held that a partnership agreement specifying that an accountant’s final accounting upon dissolution of the partnership would be binding, precluded litigation. However, there is an obvious difference between the figures of an accountant which are inherently definite and conclusive and the architect's report in the instant case, which is replete with uncertainty.

We are not presently concerned with count III which was not dismissed by the trial court. This ruling was correct. It should simply be noticed that written agreements to arbitrate are not enforceable “upon such grounds as exist for the revocation of any contract * * (Ill. Rev. Stat. 1979, ch. 10, par. 101.) Count III alleges precontract, tortious misrepresentation, and this issue should be judicially determined.

Count IV of plaintiffs’ complaint, seeking to pierce the corporate veil, was dismissed for failing to state a cause of action. Count IV alleges that Joseph Valenti is the principal stockholder and president of the defendant corporations, that there is a unity of interest between the corporate defendants and Joseph Valenti individually, and that Joseph Valenti was aware of alleged misrepresentations made on behalf of the corporate defendants. We agree with the trial court that the current request to pierce the corporate veil is premature.

There are no allegations in the amended complaint that plaintiffs would not be able to satisfy any judgment they might recover from Valenti Development Corporation, the only defendant to have signed the contract. There is no allegation that this corporation has been dissolved or is insolvent. (Compare Central States, Southeast & Southwest Areas Pension Fund v. Gaylur Products, Inc. (1978), 66 Ill. App. 3d 709, 712, 384 N.E.2d 123.) Thus, we have before us at present no allegations which would indicate that “adherence to the fiction of separate corporate existence would sanction a fraud or promote injustice.” Gallagher v. Reconco Builders, Inc. (1980), 91 Ill. App. 3d 999, 1004, 415 N.E.2d 560.

Therefore, the dismissal of count IV is affirmed but the order appealed from should be modified so that the dismissal is without prejudice to plaintiffs.

As regards the proposed second amended complaint tendered by plaintiffs to the trial court, in view of the fact that the litigation will continue upon plaintiffs’ amended complaint after and in accordance .with the factual determination by the architect, we see neither need nor reason for the proposed second amended complaint. We cannot say that the proposed second amended complaint is so different “from the amended complaint so that [plaintiffs’] chances of ultimate success were increased.” (City of Des Plaines v. Pollution Control Board (1978), 60 Ill. App. 3d 995, 1002, 377 N.E.2d 114.) This ruling by the able trial judge was well within the bounds of reasonable discretion particularly in view of the fact that the proposed second amended complaint was not tendered until after final judgment. (In re Estate of Ariola (1979), 69 Ill. App. 3d 158, 171-72, 386 N.E.2d 862.) Denial of leave to file the second amended complaint is accordingly affirmed.

Consequently, the orders herein appealed from dated July 16, 1980, and October 17,1980, are hereby reversed as regards dismissal of counts I and II of plaintiffs’ amended complaint. The cause is accordingly remanded to the trial court with directions to require the architect to prepare and lodge with the parties, within a day certain to be fixed by the trial court, a supplemental factual report which will consider and decide the matters above pointed out in accordance with section 8 of the contract. The trial court is directed then to proceed with hearing and decision on all remaining issues raised in counts I, II and III of the amended complaint.

Insofar as the orders appealed from dismiss count IV, said orders are affirmed and the cause is remanded with directions that this dismissal of count IV be modified by the trial court so as to be without prejudice.

. Affirmed in part; reversed in part; and remanded with directions.

CAMPBELL, P. J., and O’CONNOR, J., concur.


source: Caselaw Access Project

author: PRESIDING JUSTICE STAMOS

license: Public Domain

text:
    PATRICK J. GANNON, Plaintiff-Appellee, v. PAUL FREEMAN, Defendant-Appellant.
    First District (2nd Division)
    No. 81-142
    Opinion filed January 12, 1982.
    Law Office of Tim J. Harrington, of Chicago (Robert Guilfoyle and John R. Withall, of counsel), for appellant.
    Law Offices of Joseph F. Phelan, of Chicago, for appellee.
   PRESIDING JUSTICE STAMOS

delivered the opinion of the court:

Plaintiff and defendant were involved in an automobile accident. The parties settled the claims involving personal injury, and the matter went to trial on the issue of property damage, based on the total loss of plaintiff’s automobile. The jury returned a verdict of $4000 and defendant appeals.

Defendant has admitted liability, so the circumstances of the accident are not at issue. The principal issue is whether the $4000 verdict is against the manifest weight of the evidence. No court reporter was present at trial; the record on appeal contains a stipulated recitation of the evidence.

In May 1976, when plaintiff was 18 years old, he purchased a used 1969 Dodge Super Bee for $500. The “Super Bee” was a limited production, high-performance version of the Dodge Coronet. Oyer the next 15 months, plaintiff drove the car infrequently, putting on only 200-300 miles. Plaintiff testified that he planned to rebuild the auto to “show” car status. Plaintiff introduced receipts for various repairs and high-performance parts. The value of the receipts admitted into evidence totals $1546.50. Plaintiff also testified that he put at least 100 hours of his own time into rebuilding the car.

• In the early morning of September 24, 1977, plaintiff’s car collided with that of defendant. After the accident, plaintiff’s car was towed to his home. Plaintiff took 18 color photographs of the wrecked car; these were admitted into evidence. The car was later towed to a police pound. Plaintiff never saw the car again. He testified that the car was damaged beyond repair and he was able to salvage only the stereo speakers before the car was towed the second time.

Prior to the accident, plaintiff had completed substantially all of the restoration work on the car’s engine. The photographs in evidence show that the body, though unrestored, was largely free from rust and was in good condition. Plaintiff offered no expert testimony concerning the car’s value immediately prior to the accident, though plaintiff opined that the car, fully restored, would be “worth a fortune.”

Defendant offered the testimony of Sam Papalardo, a used car salesman. Papalardo had three years’ experience selling new and used cars •at Ford and Lincoln-Mercury dealers. The trial court prevented Papalardo from giving an opinion on the value of a 1969 Dodge Super Bee. The trial court apparently based its ruling on the premise that Papalardo might competently testify to the value of an ordinary used car but showed no expertise with respect to the value of plaintiff’s “substantially rebuilt” automobile. The jury returned a verdict for plaintiff in the amount of $4000.

Defendant contends that the trial court erred in barring Papalardo’s testimony regarding the market value of plaintiff’s car. Whether a witness •is qualified to testify as an expert is a matter within the sound discretion of the trial court. (Hardware State Bank v. Cotner (1973), 55 Ill. 2d 240, 250, 302 N.E.2d 257.) Defendant contends that the trial court abused its discretion in finding Papalardo unqualified. In this connection, defendant argues that the trial court implicitly found that plaintiff’s car was a “show” car, a fact issue that should have been left to the jury. We believe that defendant reads too much into the trial court’s ruling. The court below needn’t have found that the vehicle in question was a “show” car; the court only had to conclude that the car was sufficiently out of the ordinary to preclude an “ordinary” car salesman from testifying to its value. Viewed in this light, we find that the ruling was not an abuse of discretion.

Defendant also contends that the jury’s verdict of $4000 is unsupported by the evidence. When personal property is totally destroyed, the measure of damages is the reasonable value of the property immediately prior to its destruction. (Behrens v. W. S. Bills & Sons, Inc. (1972), 5 Ill. App. 3d 567, 576, 283 N.E.2d 1.) Defendant notes that plaintiff offered no expert testimony regarding the car’s value. While such testimony would have been preferable, we believe that it is not absolutely necessary. Where damages are susceptible of precise proof, direct and tangible evidence must be offered. (Leon v. Thorlief Larsen & Son, Inc. (1971), 133 Ill. App. 2d 911, 913, 272 N.E.2d 799.) Here, however, no conclusive proof was possible. An expert witness could only have given his opinion on the car’s value. Such an estimate should not be considered indispensable when value can be proved in other ways. The law does not require the plaintiff to prove the exact amount of his loss; it is sufficient that the evidence provide a basis for assessing damages with a fair degree of probability. (Karlin v. Inland Steel Co. (1979), 77 Ill. App. 3d 183, 187, 395 N.E.2d 1038.) Here, plaintiff offered proof of value relating to the cost basis of the car: the $500 initial cost, the $1546.40 (admissible evidence) spent on parts for the car and the 100 hours of plaintiff’s time spent on restoration of the car.

Nevertheless, these items of plaintiff’s evidence do not total $4000, even when the value of plaintiff’s time is considered. Lannon v. Alex (1950), 339 Ill. App. 645, 90 N.E.2d 800 (abstract), presents an analogous situation. There, the plaintiff sued for damage to his automobile and won a jury verdict of $143.09. The appellate court found no evidence to support this amount and noted that plaintiff had estimated the car’s damage at about $25. The appellate court ordered a remittitur and affirmed a judgment of $25. (See also Welter v. Schell (1929), 252 Ill. App. 586, 590-91, where the appellate court affirmed upon remittitur in another vehicle damage case involving unproved damages.) In discovery in the case at bar, plaintiff received an interrogatory concerning the cost of repairing his car. He responded: “1969 Dodge Auto which was damaged beyond repair and value. Purchased Car for $500.00 and thereafter totally rebuilt auto at a cost of approximately $1800.00. Total Loss $2300.00.” That plaintiff herein estimated his loss well below the jury’s verdict corresponds to the situation in Lannon.

In consideration of the shortage of proof of damages, we conclude that judgment for the plaintiff was proper but the full judgment amount ($4000) is not supported by the evidence. A lesser amount ($2546.40) has evidentiary support. This amount takes into consideration the cost of the car ($500), the amount spent on parts ($1546.40) and plaintiff’s time ($500 for 100 hours of restoration work). This amount also corresponds roughly to plaintiff’s own estimate given in response to defendant’s interrogatory. If plaintiff will file his consent to a remittitur of $1453.60, the judgment will be affirmed. Otherwise, the judgment below is reversed and the cause remanded for a new trial.

Affirmed upon remittitur.

DOWNING and HARTMAN, JJ., concur.


author: JUSTICE DOWNING

text:
    CONSULTANTS & ADMINISTRATORS, INC., Plaintiff-Appellant, v. THE DEPARTMENT OF INSURANCE et al., Defendants-Appellees.
    First District (2nd Division)
    No. 81-283
    Opinion filed January 12, 1982.

      George J. Haddad, of Chicago, for appellant.
    Tyrone C. Fahner, Attorney General, of Chicago (Joseph D. Keenan, III, Assistant Attorney General, of counsel), for appellees Department of Insurance and Phillip R. O’Connor.
    Martin, Craig, Chester & Sonnenschein, of Chicago (Thomas B. Cassidy, of counsel), for appellee Illinois Vision Services Plan.
   JUSTICE DOWNING

delivered the opinion of the court:

Plaintiff Consultants & Administrators, Inc. (C&A), appeals from the decision of the circuit court of Cook County which upheld an administrative order entered by defendant Illinois Department of Insurance (DI). DI had directed C&A to comply with the provisions of the Voluntary Health Services Plans Act (the Health Act) (Ill. Rev. Stat. 1979, ch. 32, par. 595 et seq.) or show that it was exempt therefrom.

C&A argues that (1) DI lacks jurisdiction over it, having been preempted by the Federal Employee Retirement Income Security Act of 1974 (ERISA); (2) the Health Act is not mandatory, but rather is permissive in nature; (3) the Health Act violates “the constitutional and civil rights” of C&A; (4) the circuit court violated C&A’s procedural due process rights; and (5) DI is “perpetuating an unconstitutional monopoly” in violation of Federal antitrust law.

In 1966, the Chicago Newspaper Publishers Association and a division of the Teamsters Union agreed to create a trust entity (the Trust) for the benefit of the employees of Chicago’s major daily newspapers. The trust agreement was amended in March 1976 to conform to the provisions of ERISA (29 U.S.C. §1001 et seq. (1976)). On March 15, 1976, the Trust entered into a contract with C&A. Under that contract, C&A was to provide facilities for a dental care program and an optometric/vision care program for beneficiaries of the Trust, and was to contract with professional and technical personnel to conduct the programs. The Trust was obligated to pay C&A $16.25 per month for each participant-beneficiary enrolled in the programs.

On February 1, 1979, defendant Illinois Vision Services Plan (IVSP), a business entity incorporated under the Illinois Vision Service Plan Act (the Vision Act) (Ill. Rev. Stat. 1979, ch. 32, par. 651 et seq.), complained to DI that it had encountered competition from C&A, which firm, IVSP believed, had not been incorporated under that statute. IVSP requested that DI conduct an investigation of C&A’s activities to determine its compliance with Illinois law. DI proceeded with the requested investigation and eventually informed C&A that it believed the latter was operating in violation of both the Vision Act and the Illinois Dental Service Plan Act (the Dental Act) (Ill. Rev. Stat. 1979, ch. 32, par. 690.1 et seq.). DI suggested that C&A file an application for certification under the Health Act. C&A responded that it would seek a declaratory judgment in court on the matter (which action C&A apparently never pursued). In the face of C&A’s intractability, DI initiated formal administrative proceedings to determine whether C&A was indeed operating in violation of the Health Act by providing dental and optical services without procuring a charter under that statute. Ill. Rev. Stat. 1979, ch. 32, par. 602.

On December 14, 1979, a hearing was held before an appointed hearing officer. At that hearing, a single witness appeared, having been called by DI. Essentially, the witness, Ronald Chew, assistant deputy director in the health delivery section of DI, stated that he believed C&A was operating a voluntary health services plan in violation of the provisions of the Health Act. C&A did not attempt to rebut this conclusion, instead asserting among other things that the Health Act was preempted by ERISA, was unconstitutional, and was not intended to cover the operation of a private corporation.

The hearing officer recommended that DI terminate the proceeding without prejudice. The director of DI declined to accept this recommendation. Instead, he issued a lengthy administrative decision finding C&A to be operating a voluntary health services plan without incorporating under the Health Act, in violation of that statute. The director ordered C&A to comply therewith. C&A responded by seeking judicial review of this administrative determination. After hearing the parties’ arguments and examining their briefs, the circuit court affirmed the administrative decision in its entirety.

I

C&A argues that ERISA preempts the Health Act and that DI thus lacked jurisdiction to proceed against it, relying on the following provisions of ERISA:

“(a) Except as provided in subsection (b) of this section, the provisions of [ERISA] shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan # » e e # *
(b)(2)(A) Except as provided in subparagraph (B), nothing in [ERISA] shall be construed to exempt or relieve any person from any law of any State which regulates insurance 90 *.
(B) Neither an employee benefit plan * * ° nor any trust established under such a plan, shall be deemed to be an insurance company or other insurer * * ° or to be engaged in the business of insurance 0 * * for the purposes of any law of any State purporting to regulate insurance companies * * 29 U.S.C. §1144 (1976).

Initially, we note that C&A has not adequately contested on this appeal the factual finding of DI, which was affirmed by the circuit court, that C&A is operating a “voluntary health services plan” as defined in the Health Act, and that C&A has not incorporated under the provisions of the Health Act (Ill. Rev. Stat. 1979, ch. 32, par. 597). Our resolution of this appeal thus proceeds from the premise that these factual determinations are correct. Consequently, we note that under these circumstances, C&A is subject to the provisions of the Health Act unless it is able to succeed on the merits of the ERISA-preemption argument or on its other claims.

Turning to the merits of C&A’s argument, we are faced with an insurmountable obstacle to our resolution thereof. C&A has asked us to establish new Illinois precedent on a question of weighty significance, but has cited to us only two tangentially related Federal decisions and a segment of a California statute which we find of no relevance. C&A’s brief presents no argument demonstrating the relationship of the cases and the California statute to the present circumstances; its presentation at oral argument failed to clarify the matter. We note that the briefs of the Attorney General (representing DI) and IVSP attempted to address the substance of the issue in a coherent manner despite C&A’s failings. Nonetheless, we do not feel that the law on the question nor the theorizations of either side thereupon have been adequately presented so as to enable this court to establish enlightened precedent in this complex field. This court will not research and argue a case for an appellant. (See Thanopoulos v. Pickens (1980), 87 Ill. App. 3d 906, 909, 409 N.E.2d 477; Fogel v. Hodes (1979), 68 Ill. App. 3d 594, 600, 386 N.E.2d 389; 47th & State Currency Exchange, Inc. v. B. Coleman Corp. (1977), 56 Ill. App. 3d 229, 231-33, 371 N.E.2d 294, appeal denied (1978), 71 Ill. 2d 598.) This rule is especially applicable where, as here, the court’s decision has such potentially significant ramifications. In light of the inadequacies of C&A’s presentation of the ERISA preemption issue, we decline to reach its merits. The remainder of this opinion therefore proceeds from the presumption that, despite ERISA, the Health Act is indeed applicable to C&A (barring its inapplicability based upon C&A’s other arguments).

II

C&A claims that the Health Act is “voluntary and not mandatory” and thus does not cover the type of arrangement involved in this case.

C&A presents us with no relevant, authoritative support for its contention. This court has previously noted the underlying concerns of a statute similar to the Health Act: the Vision Act (Ill. Rev. Stat. 1979, ch. 32, par. 651 et seq.). We noted that the Vision Act involves two major concerns: that corporations providing vision services have sufficient monetary reserves to insure the performance of their contractual obligations, and that beneficiaries of such plans have the opportunity to choose from a significant plurality of available practitioners in using the vision services provided. (National Consolidated Industries, Ltd. v. Department of Insurance (1979), 73 Ill. App. 3d 816, 820-21, 392 N.E.2d 295.) We believe these concerns are equally applicable to health services rendered by a health services plan corporation. Clearly, achievement of these considerations would be severely undermined were the Health Act read as a permissive, rather than mandatory, statute. Consequently, we are unconvinced by C&A’s unsupported claim to that effect. The Health Act envisions mandatory compliance by all voluntary health services plans, including C&A.

Ill

C&A raises constitutional issues in regard to the outcome below.

A.

C&A claims that the Health Act is unconstitutional. In support of this argument, C&A reprints a large segment of the supreme court’s opinion in Scully v. Hallihan (1936), 365 Ill. 185, 6 N.E.2d 176, and adds a one-sentence “paraphrasing” of the rule of that case applied to the facts of this case. General allegations of constitutional violations which do not specify the manner in which the asserted constitutional rights are infringed do not adequately raise constitutional claims. (Redmond v. Novak (1981), 86 Ill. 2d 374, 378, 427 N.E.2d 53.) We therefore will not address this part of C&A’s constitutional claim.

B.

C&A argues that it was denied procedural due process in the circuit court proceeding, citing Drezner v. Civil Service Com. (1947), 398 Ill. 219, 231, 75 N.E.2d 303. We have reviewed the record of proceedings from the circuit court and find no basis therein for holding that the circuit court’s action violated either the rule of the Drezner case or any constitutional matters connected therewith.

IV

Finally, C&A contends that DI “and other persons, corporations, and associations * * * have combined to restrain competition in the field of health service in violation of the Anti-Trust laws of the United States,” citing the United States Code.

Judicial proceedings under Federal antitrust statutes (15 U.S.C. §1 et seq. (1976)) may only be brought in Federal court; State courts lack jurisdiction to accept such causes of action. (See Blumenstock Brothers Advertising Agency v. Curtis Publishing Co. (1920), 252 U.S. 436, 440, 64 L. Ed. 649, 40 S. Ct. 385; Van Dusen-Storto Motor Inn, Inc. v. Rochester Telephone Corp. (1972), 72 Misc. 2d 34,_, 338 N.Y.S.2d 31, 34-35, modified on other grounds (1973), 42 App. Div. 2d 400, 348 N. Y.S.2d 404, aff'd (1974), 34 N.Y.2d 904,359 N.Y.S.2d 286, 316 N.E.2d 719; see generally 54 Am. Jur. 2d Monopolies, Restraints of Trade, and Unfair Trade Practices §265 (1971).) Thus, C&A’s claim cannot be addressed by this court.

For the foregoing reasons, we affirm the decision of the circuit court of Cook County.

Affirmed.

STAMOS, P. J„ and HARTMAN, J„ concur.

       The Attorney General, representing DI, informs us that the Trust itself is an “employee welfare benefit plan” under ERISA. That statute defines such a plan as:
      “[A]ny plan, fund, or program which 1 1 "is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical " ° ° benefits * ° (29 U.S.C. §1002(1) (1976).)
      We accept this representation as being correct. See, e.g., Russo v. Boland, 103 Ill. App. 3d 905, 908.

       IVSP was allowed to intervene in this and subsequent proceedings.

       The Health Act defines such a plan as “a plan or system under which medical, hospital, dental, nursing and relating health services may be rendered to a subscriber or beneficiary, at the expense of a health services plan corporation.” Ill. Rev. Stat. 1979, ch. 32, par. 596(b).

       We do not find any of the listed exceptions to the applicability of the Health Act, found in section 3, to be relevant to this case. See Ill. Rev. Stat. 1979, ch. 32, par. 597.

       C&A cites this court to Delta Air Lines, Inc. v. Kramarsky (2d Cir. 1981), 650 F.2d 1287; Hewlett-Packard Co. v. Barnes (N.D. Cal. 1977), 425 F. Supp. 1294, aff'd (9th Cir. 1978), 571 F.2d 502, cert. denied (1978), 439 U.S. 831, 58 L. Ed. 2d 125, 99 S. Ct. 108; and CAL. GOV’T CODE §12530 (Deering 1981 Supp.), repealed July 1, 1976, Stats. 1975, ch. 941, §1. We note again that C&A provided this court with no discussion of how these cited authorities are related to the circumstances of this case.

       As the remainder of our opinion makes clear, C&A’s briefs in this case failed to even minimally comply with the terms of Supreme Court Rule 341 regarding the content of briefs. (73 Ill. 2d R. 341.) We suggest that appellate counsel make use of the directive provisions of that rule.

       In order to bring a valid antitrust claim in Illinois courts, C&A should'have relied upon the Illinois Antitrust Act. Ill. Rev. Stat. 1979, ch. 38, par. 60—1 et seq.


author: JUSTICE LORENZ

text:
    PALIN MANUFACTURING COMPANY, INC., Plaintiff-Appellee, v. WATER TECHNOLOGY, INC., et al., Defendants-Appellants.
    First District (5th Division)
    No. 80-3197
    Opinion filed January 14, 1982.
    Rehearing denied March 4, 1982.

      Eugene F. Friedman, of Chicago, for appellants.
    Robert M. Ward, of Cook, Wetzel & Egan, Ltd., of Chicago, for appellee.
   JUSTICE LORENZ

delivered the opinion of the court:

Defendants Water Technology (Water Tech) and A. Allen Morr (Morr) appeal from that portion of a trial court’s order which permanently enjoins them from manufacturing, marketing or selling the “sludge separator device” of plaintiff, Palin Manufacturing Company, Inc. (Palin), or any device utilizing Palin’s design features and engineering characteristics. This order followed a hearing on Palin’s verified complaint for injunctive and other relief which alleges that defendants have misappropriated Palin’s trade secrets. In addition to the granting of injunctive relief, the trial court imposed a constructive trust upon the gross profits received by defendants resulting from the sale of Palin’s device. Further proof was ordered by the court with regard to damages sustained by Palin, along with attorney fees.

Defendants raise the following issues on appeal: (1) the injunction violates section 3—1 of the Injunction Act (Ill. Rev. Stat. 1979, ch. 69, par. 3—1 et seq.) because it (a) contains no reasons for its issuance, (b) fails to describe the enjoined acts in specific detail, and (c) refers to another document when describing the prohibited acts; (2) the injunction is invalid since it is not limited to the time required to “reverse engineer” Palin’s product; (3) the trial court erred in failing to consider the relative hardships upon the parties when it issued the injunction; (4) the injunction contains no finding, and the hearing produced no evidence, of irreparable harm to Palin justifying the restrictions against defendants; (5) the trial court’s failure to join Pangburn, an indispensable party, renders the injunction void; (6) the trial court’s refusal to rule on Pangburn’s motion for a change of venue renders the injunction void (Pangburn was joined as a party defendant during the hearing and subsequently dismissed from the case); (7) Palin failed to prove that its drawings or sludge separator device were trade secrets; and (8) the trial court erred in finding a fiduciary duty owed by Morr to Turnquist.

The following testimony was adduced at the hearing and is pertinent to our decision.

Sanfred Turnquist, the president of Palin, testified that his company developed and marketed paint sludge removal equipment. In 1976, Palin installed a prototype paint sludge separator, which was designed to remove paint sludge from water, in the General Motors (GM) plant in Janesville, Wisconsin. GM had a problem at the Janesville plant with the removal of paint overspray accumulated during the process of painting vehicles. This overspray was collected in water wash booths by a ventilation system. GM needed a device that would separate the live paint from the water in the wash booths, in order to facilitate the paint’s efficient disposal. Palin’s device, which attempted to achieve this purpose, was developed by Turnquist over a period of three years at a cost of about $100,000. However, initial testing of Palin’s prototype unit proved unsuccessful in solving GM’s problem. The chemicals employed in Palin’s prototype unit to “detactify” or kill the paint were ineffective, and live paint clogged GM’s sewer system.

In April of 1977, Turnquist met Warren Pangburn, a sales representative from Detrex Chemical Company. Pangburn had been attempting to sell GM his company’s chemicals for use in detactifying the live paint accumulated in the spray booths. Robert Radtke, GM’s superintendent of maintenance encouraged Pangburn to work with Turnquist to try to eliminate this problem. Although Pangburn’s chemicals were more successful than those previously used with Palin’s device, they, too, did not kill all the paint.

Subsequently, Turnquist decided to hire Pangburn as a technical sales representative to market Palin’s device for a 10% commission. Pangburn left Palin’s employ in November of 1977 after Turnquist rejected his request to be paid a straight salary. According to Turnquist, Pangburn was helpful to him during their relationship because he “had a rapport with many employees at General Motors.” But Turnquist stated that Pangburn had no part in designing Palin’s sludge separator device.

Radtke introduced Morr, the president of Water Tech, to Turnquist in the fall of 1977. Water Tech marketed an electrostatic treater unit that detactified paint. Morr and Turnquist agreed to install one of these units on the same booth at GM where Palin’s prototype was being tested. The electrostatic unit proved to be highly successful, so the two decided to submit a “joint marketing quotation” to GM for the products. The quote, submitted on November 4, 1977, listed Palin’s device along with Water Tech’s electrostatic treater. Pangburn delivered the quote, along with two or three drawings of Palin’s device, to GM.

In December of 1979, Turnquist learned that Water Tech was advertising for the sale of a sludge separator device in a trade magazine. This device had many of the same characteristics as Palm’s equipment. Subsequently, GM purchased one of Water Tech’s sludge separator devices. Although Palin had not been actively marketing its device elsewhere, GM bought its prototype unit. However, Palin did not sell GM any other device.

According to Turnquist, defendants misappropriated two drawings of Palin’s sludge separator device and utilized them in producing their own sludge separator. These drawings, Turnquist claims, constitute trade secrets.

On cross-examination, Turnquist admitted that the drawings in question were not marked confidential, and that he never told Radke or GM that the information on the drawings was confidential. In fact, he failed to mark any written materials or advise anyone that his developments constituted trade secrets or were to be considered confidential information. Turnquist admittedly tested the sludge separator device at GM in an effort to later sell it the equipment. He and the GM employees had a “free run” of the plant during the testing period. Turnquist never challenged the security employed at the GM plant, but had no reason to doubt its adequacy.

Allen Morr testified as an adverse witness. The testing of his company’s equipment in conjunction with Palin’s device at GM ran for 90 days—from October 10, 1977, to January 10, 1978. On various occasions during this 90-day period, Morr met with both Pangburn and a patent attorney to discuss the patenting and marketing of a sludge separator device. On January 11, 1978, one day after the testing period expired, Morr wrote GM a letter quoting for purchase Water Tech’s electrostatic water treaters. The letter stated that the purchase was “not contingent upon the use of automatic filtering equipment, such as that manufactured by Palin Manufacturing Company.”

Morr further stated that one had to fill out a temporary visitor’s pass, sign a registration form and state one’s business before entering the GM plant. In order to view the inside of Palin’s sludge separator, it was necessary to climb a ladder. The functional parts of the device were not visible from this vantage point since the water in the tank was murky.

Defendants offered testimony at trial from an evidence deposition of Maurice Frey, a plant engineer for GM. Frey stated that he was unaware of any promise on behalf of GM to maintain secrecy withxegard to Palin’s product or the drawing of it. He knew of no instances where GM promised an outside supplier to keep such a product secret.

The. evidence deposition testimony of Robert Radtke also established that Turnquist never requested that information concerning his device be kept a secret or that access to it be restricted. According to Radtke, contractors, retirees, and current and former GM employees are allowed entry into the plant. The general public can also be escorted through it on a guided tour.

Robert Ellis, a retiree from GM, testified that his job was to maintain the spray booths at the plant. In Ellis’ opinion, the Palin sludge separator never worked properly due to its faulty design. He was never admonished as to the equipment’s secrecy.

Allen Morr, resuming the witness stand, testified that he did not use any of Palin’s blueprints in producing Water Tech’s sludge separator. He made no measurements of the Palin unit installed at the plant. Morr stated that Water Tech’s device was made from drawings that it generated. No mention of confidentiality concerning Palin’s blueprints was made to him by Turnquist.

Warren Pangburn testified that he made several suggestions to Turnquist concerning the improvement of Palin’s device, but they were rejected. Pangburn was never told that the drawings of the device were confidential or that they constituted trade secrets. Nor did he use the drawings to develop a unit. However, based upon his experience with other sludge removal equipment as well as with Palin’s, he was able to design a sludge separator of his own.

Shortly after leaving Palin’s employ, Pangburn began to work for Morr. He made a series of drawings of sludge devices about three weeks after changing jobs and showed them to Morr. Finally, Pangburn stated that Turnquist never asked him to return his copies of the drawings of Palin’s device.

Opinion

In order to assess the validity of the permanent injunction, it is essential to examine the question of whether Palin proved that it possessed a trade secret that was subject to misappropriation by defendants.

A trade secret is a plan, process, tool, mechanism or compound known only to its owners and those employees to whom of necessity the secret is confided. (Schulenburg v. Signatrol, Inc. (1966), 33 Ill. 2d 379, 212 N.E.2d 865, cert. denied (1966), 383 U.S. 959, 16 L. Ed. 2d 302, 86 S. Ct. 1225. ] A trade secret must be a secret in fact. (Bimba Manufacturing Co. v. Starz Cylinder Co. (1969), 119 Ill. App. 2d 251, 256 N.E.2d 357.) The extent of measures taken by the owner to guard the secrecy of the information is determinative of whether it is a trade secret. (Affiliated Hospital Products, Inc. v. Baldwin (1978), 57 Ill. App. 3d 800, 373 N.E.2d 1000; Restatement of Torts §757, Comment b (1939).) A trade secret implies novelty, and where the process or method is disclosed to other persons it cannot be claimed to remain a trade secret by the alleged owner. Schumann v. Ipco Hospital Supply Co. (1981), 93 Ill. App. 3d 1053, 418 N.E.2d 161; Wesley-]essen, Inc. v. Reynolds (N.D. Ill. 1974), 182 U.S.P.Q. 135.

Applying the foregoing principles to the instant case, it is evident that neither Palin’s drawings nor its sludge separator device were trade secrets. The inventor of the apparatus, Turnquist, never treated it or its drawings as secrets, and took no steps to guard their confidentiality. Turnquist not only installed the actual prototype unit at the Janesville plant in an effort to sell it to GM, but provided the company with the very drawings claimed to be protected. The testimony of Turnquist as well as all the GM employees is uncontroverted that no admonishments were given to GM that the device was considered by Palin to be confidential, and, accordingly, none of the drawings was marked as such. In addition, no steps were taken to restrict access to the area of the plant where Palin’s device was installed. For instance, contractors, retirees, employees and others were allowed to enter the GM plant with relative ease. It was not the policy of GM to guard the secrecy of an outside supplier’s device, and GM specifically disavowed any obligation of confidentiality to Palin in the purchase order when it acquired Palin’s prototype unit. Furthermore, the drawings and the devices were shown to both Pangburn and Morr without any admonishments as to their confidentiality. In sum, this information was freely disseminated by Turnquist to several people in an effort to both improve the device and to eventually sell it. Since no steps were taken by the owner to protect the confidentiality of the information, it cannot be deemed a trade secret. Therefore, in the absence of trade secret status, injunctive relief was inappropriately given to Palin. See Leavitt Co. v. Plattos (1975), 27 Ill. App. 3d 598, 327 N.E.2d 356.

The trial court apparently recognized that no trade secret existed. At the conclusion of the hearing, the court stated: “As I say, it may be there is nothing unique in this product, and it may be very well that the world is free to produce it.” However, the court further found that Morr and Water Tech shared a fiduciary relationship with Turnquist'and Palin, and that defendants violated an implied agreement not to disclose the confidential information to which they were privy. This finding leads us to the second issue: Was there a fiduciary relationship between Turnquist and Morr when the information was disclosed which prevented defendants from employing it in making a similar device?

Palin argues that a fiduciary relationship was created between Turnquist and Morr because they engaged in a joint venture to market their respective devices.

However, we hold that the evidence does not establish that a joint venture existed. The burden of proving a joint venture is upon the party asserting its existence. (Hurst v. Papierz (1970), 129 Ill. App. 2d 117, 262 N.E.2d 773.) In order to establish a joint venture, the following factors must be present: (a) a proprietary interest in the subject matter, (b) a community of interest, (c) a right to govern the policy in connection therewith, and (d) a sharing in both profits and losses. (Richton v. Farina (1973), 14 Ill. App. 3d 697, 303 N.E.2d 218.) While surrounding circumstances can prove the existence of a joint venture, “ ‘there must be a meeting of the minds; there must be an agreement, express or implied, one which shows the parties intended to embark on a joint venture.’ ” (Burtell v. First Charter Service Corp. (1980), 83 Ill. App. 3d 525, 531, 404 N.E.2d 455, 459.) Undisputedly, there was no written agreement between the parties to enter a joint venture. But according to Turnquist, the parties orally agreed to “jointly quote” the sludge separator device and the electrostatic unit to GM since the products were “mutually beneficial.” On November 4, 1977, Water Tech, through Morr, wrote a letter to GM on Water Tech’s stationery listing the prices of the two devices made by Palin and Water Tech.

We believe that even though it may have been “mutually beneficial” to quote prices on the devices simultaneously, this does not establish a joint venture between the parties. The testimony concerning this joint marketing effort does not disclose whether there was to be a sharing of profits and losses between the parties. Nor is there any evidence concerning the rights of the parties to govern the project, or the degree of communal or proprietary interest possessed by each. In our view, Turnquist and Morr simply quoted the devices together for the sake of convenience, without any exchange of obligations or duties. Therefore, we hold as a matter of law that Palin did not establish the existence of a joint venture.

We also note that the trial court’s reliance on Affiliated Hospital Products , Inc. v. Baldwin (1978), 57 Ill. App. 3d 800, 373 N.E.2d 1000, in finding an implied agreement between Turnquist and Morr to hold the disclosed information as confidential, is misplaced. There, the court ruled that Baldwin, the misappropriator of MPL’s trade secrets (drawings of machinery to process hypodermic needles) acquired the confidential information while he stood in a fiduciary relationship with MPL. Therefore, he could not disclose or use it, even though his employment contract with MPL containing a prohibition against such disclosure had expired. The court also rejected the argument of Mittermeier, who utilized the drawings, that he was unaware that the unmarked drawings were considered confidential. However, we note that Baldwin, who was previously employed as the president of MPL, personally attempted to maintain the confidentiality of MPL’s proprietary data through various means. Likewise, Mittermeier had signed an agreement when he visited the MPL plant which prohibited disclosure or use of any information gleaned therein. He was also aware of a proposed licensing agreement between Baldwin (after he left MPL) and another company prohibiting disclosure of the drawings. In short, both defendants in Affiliated Hospital Products had ample notice that the drawings were held as confidential information. The situation is different here. Morr, unlike Baldwin, never held a fiduciary relationship with Turnquist and never had reason to believe that the drawings or the sludge separator device were trade secrets. Thus, we can see no reason to find that there was an implied agreement between the parties to hold the disclosed information as confidential matter.

Because we believe that Palin has not shown that it possessed a trade secret subject to misappropriation by defendants, the trial court erred in enjoining them from producing similar devices. Our resolution of the controversy on this basis renders it unnecessary to address the other issues defendants have raised.

For the reasons stated, the judgment of the circuit court is hereby reversed.

Reversed.

SULLIVAN, P. J., and MEJDA, J., concur.