Advanced Concepts Chicago, Inc. v. CDW Corp.
938 N.E.2d 577
Ill. App. Ct.2010Background
- Advanced Concepts Chicago, Inc. sues CDW as alleged successor to Berbee for breach of a McCormick-Berbee contract in which Advanced was named as the MBE to receive 40% of the project work.
- The contract required Berbee to retain a certified MBE for 40% of Cisco equipment; Schedule A lists Advanced as the MBE.
- Schedule A obligated Berbee to enter a formal agreement with the MBE and to report payments; two affidavits allegedly showing payments to Advanced were attached.
- Berbee allegedly never entered into a contract with Advanced nor paid any proceeds to Advanced; Advanced remained ready to perform.
- Trial court granted CDW’s 2-615 motion to dismiss; appellate court reverses and remands for failure to state a third-party beneficiary claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Advanced may sue as a third-party beneficiary of the McCormick-Berbee contract. | Advanced was the intended direct beneficiary of the 40% MBE provision. | The provision was for McCormick’s affirmative-action plan, not a direct benefit to Advanced. | Yes; Advanced alleged a direct benefit and stated a third-party beneficiary claim. |
| Whether the contract language and affidavits show intent to benefit Advanced as a third party. | The contract and schedules show intended benefit to Advanced; affidavits confirm payments. | The language does not show direct intention to benefit Advanced. | Yes; the language and circumstances show direct benefit to Advanced. |
Key Cases Cited
- Carson Pirie Scott & Co. v. Parrett, 346 Ill. 252 (1931) (test for direct benefit to nonparties governs third-party beneficiary)
- XL Disposal Corp. v. John Sexton Contractors Co., 168 Ill.2d 355 (1995) (direct or incidental benefit analysis governs third-party beneficiary)
- Organization of Minority Vendors, Inc. v. Illinois Central Gulf R.R., 579 F. Supp. 574 (N.D. Ill. 1983) (federal tribunal found intent to benefit MBEs under funding agreements)
- Bates & Rogers Construction Corp. v. Greeley & Hansen, 109 Ill.2d 225 (1985) (need for intended benefit by contract to third party)
- Town & Country Bank of Springfield v. James M. Canfield Contracting Co., 55 Ill.App.3d 91 (1977) (direct or substantial benefit to a third party suffices)
- Fox Lake v. Aetna Casualty & Surety Co., 178 Ill.App.3d 887 (1989) (direct benefit to third party can be shown by contract terms)
- Altevogt v. Brinkoetter, 85 Ill.2d 44 (1981) (intent to benefit third party must be shown from contract)