Schrager v. Bailey, 973 N.E.2d 932

Schrager sued Bailey, Schippers, and Schippers & Associates for legal malpractice over the voluntary dismissal of a federal suit filed on Schrager’s behalf.
The 2006 settlement included a broad integration/nonreliance clause: the parties’ agreement was the sole source of relied-upon information, and no prior representations outside the agreement were to be relied on.
Bailey signed an affidavit recounting Hynes’ memorandum as part of the defense in the malpractice case.
Schippers later averred that he relied on Hynes’ recommendations, and that Bailey did as well, in dismissing the federal suit; Schrager’s malpractice action against Hynes continued.
Schrager filed a second amended complaint in 2011 alleging fraud and aiding-and-abetting in submitting affidavits; the circuit court dismissed with prejudice, holding the integration/nonreliance clause precluded justifiable reliance.
The appellate court affirmed, holding the nonreliance clause precluded justifiable reliance and doomed the fraud claim.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the integration/nonreliance clause bar the fraud claim?	Schrager argues the clause does not bar fraud.	Bailey/Schippers contend the clause bars reliance and fraud.	Yes; clause precludes justifiable reliance, defeating the fraud claim.
Does the nonreliance clause apply to post-agreement affidavits as a basis to bar reliance?	Schrager contends reliance on Bailey affidavit should be allowed.	Defendants maintain clause covers all prior representations and post-affidavit reliance.	Yes; clause applies to reliance on representations, including post-agreement affidavits.
Is the nonreliance clause applicable in a nonsecurities case?	Cites cases suggesting nonreliance clauses may have limited reach.	Nonreliance clause valid regardless of securities context; policy favors written agreement.	Applicable; nonreliance clause governs this fraud claim in a nonsecurities context.
Did the court need to consider other theories (e.g., aiding and abetting) beyond the nonreliance clause?	Arguments aimed at additional theories beyond reliance.	Focus on the asserted claim; clause already bars reliance and fraud.	No need to address other theories; dismissal upheld on the basis of the clause.
Did the plaintiff adequately plead justifiable reliance independent of the contract terms?	Schrager alleged reliance on representations outside the agreement.	Reliance barred by integration/nonreliance clause.	Not; reliance failed due to contract provision.

Benson v. Stafford, 407 Ill. App. 3d 902 (2010) (nonreliance clause bars fraud when reliance on outside representations is disclaimed)
Tirapelli v. Advanced Equities, Inc., 351 Ill. App. 3d 450 (2004) (nonreliance clause precludes reliance on oral representations outside written contract)
Adler v. William Blair & Co., 271 Ill. App. 3d 117 (1995) (nonreliance clause upheld to bar fraud claims based on outside representations)
Greer v. Advanced Equities, Inc., 2012 IL App (1st) 112458 (2012) (nonreliance clause applicable beyond securities cases; reinforces rule from Benson/Tirapelli)
Bauer v. Giannis, 359 Ill. App. 3d 897 (2005) (as-is clause distinguished; nonreliance not controlling where statements were not part of agreement)
Extra Equipamentos E Exportação Ltda. v. Case Corp., 541 F.3d 719 (7th Cir. 2008) (nonreliance clause upheld in settlement of overcharges; relevant reasoning cited)
Vigortone AG Products, Inc. v. PM AG Products, Inc., 316 F.3d 641 (7th Cir. 2002) (integration clause vs. nonreliance clause; reliance element discussed)
Ainsworth Corp. v. Cenco, Inc., 107 Ill. App. 3d 435 (1982) (acknowledged in analysis; supports waiver context)