{ "id": 4264454, "name": "JACQUELINE ZAHL et al., Plaintiffs-Appellants, v. RONALD A. KRUPA, Indiv., Defendant (Jones and Brown Company, Inc., et al., Defendants-Appellees)", "name_abbreviation": "Zahl v. Krupa", "decision_date": "2006-05-31", "docket_number": "No. 2-05-0919", "first_page": "653", "last_page": "664", "citations": [ { "type": "official", "cite": "365 Ill. App. 3d 653" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "353 Ill. App. 3d 197", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3363350 ], "year": 2004, "pin_cites": [ { "page": "213" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/353/0197-01" ] }, { "cite": "887 F. Supp. 176", "category": "reporters:federal", "reporter": "F. 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App. 3d 49", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3086479 ], "year": 1981, "pin_cites": [ { "page": "53" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/101/0049-01" ] }, { "cite": "78 F.3d 322", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 94272 ], "year": 1996, "pin_cites": [ { "page": "326" } ], "opinion_index": 0, "case_paths": [ "/f3d/78/0322-01" ] }, { "cite": "212 Ill. App. 3d 441", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2599690 ], "weight": 3, "year": 1991, "pin_cites": [ { "page": "443" }, { "page": "443" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/212/0441-01" ] }, { "cite": "232 Ill. App. 3d 173", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 8498531 ], "year": 1992, "pin_cites": [ { "page": "178" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/232/0173-01" ] }, { "cite": "314 Ill. App. 3d 771", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 140250 ], "year": 2000, "pin_cites": [ { "page": "786-87", "parenthetical": "distinguishing between money damages and equitable remedy of specific performance" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/314/0771-01" ] }, { "cite": "83 Ill. App. 3d 933", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5551907 ], "year": 1980, "pin_cites": [ { "page": "936" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/83/0933-01" ] }, { "cite": "316 Ill. App. 3d 1163", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1096547 ], "year": 2000, "pin_cites": [ { "page": "1171" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/316/1163-01" ] }, { "cite": "159 Ill. 2d 469", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 781334 ], "weight": 3, "year": 1994, "pin_cites": [ { "page": "488" }, { "page": "494" }, { "page": "488" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/159/0469-01" ] }, { "cite": "196 Ill. App. 3d 216", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2491177 ], "weight": 2, "year": 1990, "pin_cites": [ { "page": "218-19", "parenthetical": "unclean hands is an affirmative defense" }, { "page": "219" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/196/0216-01" ] }, { "cite": "293 Ill. App. 3d 720", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 847526 ], "year": 1997, "pin_cites": [ { "page": "726-27", "parenthetical": "setting forth elements of cause of action based on apparent agency" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/293/0720-01" ] }, { "cite": "353 Ill. App. 3d 268", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3364347 ], "weight": 3, "year": 2004, "pin_cites": [ { "page": "278" }, { "page": "278" }, { "page": "278" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/353/0268-01" ] }, { "cite": "173 Ill. App. 3d 523", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3477938 ], "year": 1988, "pin_cites": [ { "page": "528" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/173/0523-01" ] } ], "analysis": { "cardinality": 1007, "char_count": 26758, "ocr_confidence": 0.776, "pagerank": { "raw": 2.309724235324722e-07, "percentile": 0.7883287790137572 }, "sha256": "c668118a36e6e85b022edefe0eba15b4e41276390f2f09cd4409d826ebf31254", "simhash": "1:8b1bd8ff366f149c", "word_count": 4261 }, "last_updated": "2023-07-14T16:12:10.332814+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "JACQUELINE ZAHL et al., Plaintiffs-Appellants, v. RONALD A. KRUPA, Indiv., Defendant (Jones and Brown Company, Inc., et al., DefendantsAppellees)." ], "opinions": [ { "text": "JUSTICE O\u2019MALLEY\ndelivered the opinion of the court:\nPlaintiffs, Jacqueline Zahl, Gene Krupa, and Lynn Krupa, appeal the judgment of the circuit court of Du Page County dismissing their claims against defendants, Jones & Brown Co., Inc., and its directors and officers, including its president, Ronald A. Krupa (Krupa). Plaintiffs\u2019 complaint alleges that they were swindled by Krupa, who presented an investment opportunity to them but then failed to return their money at the end of the contractual investment period. We reverse and remand.\nThe following are the material allegations of plaintiffs\u2019 complaint:\n(A) Krupa was at all relevant times president of Jones & Brown and a member of its board of directors;\n(B) Jones & Brown outfitted Krupa with an office, phone, and company letterhead to perform his duties;\n(C) Krupa, acting \u201cin his capacity as [Jones & Brown\u2019s] President\u201d and as the \u201cagent or apparent agent\u201d of Jones & Brown and its board of directors, represented to plaintiffs that \u201che was authorized to take [plaintiffs\u2019 money] and invest it in his name in the investment fund at [Jones & Brown]\u201d called the \u201cScudder Fund,\u201d which was \u201copen to high ranking executives of [Jones & Brown], such as himself, for such investing for himself and for others, including his friends and family, in his name, and was backed by the full faith and financial strength of [Jones & Brown] and its insurers\u201d;\n(D) Krupa, acting \u201cin his capacity as [Jones & Brown\u2019s] President\u201d and as the \u201cagent or apparent agent\u201d of Jones & Brown and its board of directors, represented to plaintiffs \u201con multiple occasions\u201d that they \u201ccould avail [themselves] of [Jones & Brown\u2019s] investment fund\u201d and \u201cthat he had invested money from other friends and family of his in like fashion, that other directors and officers of [Jones & Brown] made like investments of their friends\u2019 and families\u2019 money in [Jones & Brown\u2019s] investment fund, that making such investment of directors\u2019 and officers\u2019 own money as well as that of their friends and family was a perk available only to [Jones & Brown\u2019s] directors and officers, and that [Jones & Brown] encouraged its directors and officers to invest their friends\u2019 and families\u2019 money in the fund\u201d;\n(E) Krupa, acting \u201cin his capacity as [Jones & Brown\u2019s] President\u201d and as the \u201cagent or apparent agent\u201d of Jones & Brown and its board of directors, \u201chad previously made such representations to [plaintiffs], had entered into prior contracts with [them] for investment of [their] money in the investment fund at [Jones & Brown], and had repaid to [them] such investments with interest\u201d; and\n(F) Plaintiffs, based on their prior experiences, \u201ccontinued to rely on the representations [Krupa] made to [them] ***, due to his long-standing employment with [Jones & Brown] of more than 20 years and [their] knowledge that he was president of [Jones & Brown] and enjoyed a variety of perks due to his position and regarding his ability to invest [their] money in [Jones & Brown\u2019s] investment fund, his guarantee on behalf of himself and [Jones & Brown] that [their] investment would be repaid in full with interest, and his capacity as President of [Jones & Brown] in making such representations.\u201d\nPlaintiffs attached to their complaint two agreements handwritten on Jones & Brown letterhead. The first agreement, dated December 28, 2002, reads:\n\u201cThis letter shall act as the basis of the following agreement between Jacqueline Zahl and Ron Krupa.\nEffective 1-1-03,1[,] Ron Krupa (President of Jones and Brown) [,] agrees [szc] to invest $160,000 of Jacqueline Zahl\u2019s money into a [szc] investment fund at Jones and Brown.\nThis is a Scudder Fund only available to members of Jones & Brown\u2019s board of directors. The investment will be for a period of seven months yielding a guarantee [szc] net rate of return in the amount of 11.1%.\nThus, Jacqueline\u2019s investment [of] $160,000 cash effective 1-1-03 at 11.1% thru 7-31-03 equals a full investment return of $177,760 less processing fees.\nJones and Brown fully guarantees this investment.\u201d\nThe note is signed by Krupa and plaintiff Jacqueline Zahn.\nThe second note is dated May 31, 2003, and provides:\n\u201c![,] Ron Krupa[,] President of Jones and Brown[,] agrees [szc] to invest $100,000 of Gene and Lynn Krupa\u2019s money at a rate of 11.1% for a period of 10 months. Thru a Scudder investment fund available only to Jones and Brown[\u2019s] Board of Directors.\nThe net return available 4-01-04 will be $111,100 less processing fees. This money is guaranteed by Jones and Brown.\u201d\nThe note is signed by Krupa and plaintiffs Gene Krupa and Lynn Krupa.\nPlaintiffs alleged that, when the contractual investment period was over, they asked Krupa to return their money with the contractual interest. Krupa told them that there was no Scudder investment fund at Jones & Brown and that he had lost all of their money through investing in the stock market. Krupa later told plaintiffs that he lost their money through gambling.\nPlaintiffs brought causes of action against defendants for breach of contract (premised on actual and/or apparent authority), fraud (premised on actual and/or apparent authority), negligent hiring, negligent supervision, and negligent retention.\nDefendants moved to dismiss the claims under section 2 \u2014 619 of the Code of Civil Procedure (Code) (735 ILCS 5/2 \u2014 619 (West 2004)). Defendants argued that plaintiffs\u2019 claims were barred by the doctrine of unclean hands because, according to the written agreements attached to plaintiffs\u2019 complaint, the Scudder fund was available only to members of Jones & Brown\u2019s board of directors. Defendants reasoned that plaintiffs cannot claim wrongdoing with respect to agreements that Jones & Brown\u2019s policies did not allow them to make in the first place. Defendants argued in the alternative that plaintiffs failed to plead facts showing that Krupa acted as the actual or apparent agent of defendants in depriving plaintiffs of their money. The trial court accepted both arguments. The court found that plaintiffs\u2019 claims were defeated by the doctrine of unclean hands because the written contracts signed by plaintiffs and Krupa recite that the Scudder fund was available only to members of Jones & Brown\u2019s board of directors, a criterion that plaintiffs admittedly did not meet. The court further found that plaintiffs\u2019 allegations of actual or apparent authority were inadequately pleaded, resting entirely on the allegation that Jones & Brown and its board of directors \u201cprovided Mr. Krupa with an office, a telephone, and letterhead.\u201d The court also noted that the written agreements contain no indication that Krupa was acting on behalf of defendants when he signed them. The court dismissed plaintiffs\u2019 claims against defendants, and plaintiffs filed this timely appeal.\nAlthough styled as a motion brought under section 2 \u2014 619, defendants\u2019 motion actually combines features of a section 2 \u2014 619 motion and a motion under section 2 \u2014 615 of the Code (735 ILCS 5/2\u2014 615 (West 2004)). Section 2 \u2014 619.1 of the Code (735 ILCS 5/2 \u2014 619.1 (West 2004)) permits such combined motions. Sections 2 \u2014 615 and 2 \u2014 619 allow for dismissal under different legal theories. Van Duyn v. Smith, 173 Ill. App. 3d 523, 528 (1988). A section 2 \u2014 615 motion attacks the legal sufficiency of the plaintiff\u2019s claims, while a section 2 \u2014 619 motion admits the legal sufficiency of the claims but raises defects, defenses, or other affirmative matter, appearing on the face of the complaint or established by external submissions, that defeat the action. Northern Trust Co. v. County of Lake, 353 Ill. App. 3d 268, 278 (2004). In arguing that plaintiffs failed to establish that Krupa acted with actual or apparent authority, defendants attack the legal sufficiency of plaintiffs\u2019 claims. See Malanowski v. Jabamoni, 293 Ill. App. 3d 720, 726-27 (1997) (setting forth elements of cause of action based on apparent agency). In asserting that plaintiffs have unclean hands, however, defendants admit the legal sufficiency of plaintiffs\u2019 claims but raise an affirmative defense. See Long v. Kemper Life Insurance Co., 196 Ill. App. 3d 216, 218-19 (1990) (unclean hands is an affirmative defense).\nThe question presented on review of a motion to dismiss pursuant to section 2 \u2014 615 is whether the complaint contains sufficient facts that, if established, would entitle the plaintiff to relief. Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469, 488 (1994). Where a claim has been dismissed pursuant to section 2 \u2014 619, however, the question is whether there is a genuine issue of material fact and whether the defendant is entitled to judgment as a matter of law. Illinois Graphics Co., 159 Ill. 2d at 494. When reviewing a trial court\u2019s disposition of a motion to dismiss filed under either section 2 \u2014 615 or section 2 \u2014 619, the reviewing court accepts all well-pleaded facts as true and makes all reasonable inferences therefrom. Northern Trust Co., 353 Ill. App. 3d at 278. A dismissal under either section 2 \u2014 615 or section 2 \u2014 619 is reviewed de novo. Chicago Motor Club v. Robinson, 316 Ill. App. 3d 1163, 1171 (2000).\nPlaintiffs\u2019 first argument is that the trial court erred in finding that their claims are defeated by the doctrine of unclean hands. We agree. The doctrine of unclean hands applies if a party seeking equitable relief is guilty of misconduct, fraud, or bad faith toward the party against whom relief is sought and if that misconduct is connected with the transaction at issue in the litigation. Long, 196 Ill. App. 3d at 219. Though the parties do not recognize it, the unclean hands doctrine bars only equitable remedies and does not affect legal rights. American National Bank & Trust Co. of Chicago v. Levy, 83 Ill. App. 3d 933, 936 (1980); 30A C.J.S. Equity \u00a7 Ill, at 324 (1992) (doctrine of unclean hands \u201cdoes not deny legal rights\u201d). Plaintiffs seek not equitable relief but the legal remedy of money damages, i.e., their initial investment together with the contractual rate of interest. See John O. Schofield, Inc. v. Nikkel, 314 Ill. App. 3d 771, 786-87 (2000) (distinguishing between money damages and equitable remedy of specific performance).\nHowever, even if the doctrine were applicable here, we would still find that dismissal based on that doctrine was improper. In seeking dismissal on the basis of the unclean hands doctrine, defendants relied specifically on subsection (a)(9) of section 2 \u2014 619 of the Code (735 ILCS 5/2 \u2014 619(a)(9) (West 2004)), which provides for dismissal where \u201cthe claim asserted against defendant is barred by other affirmative matter avoiding the legal effect of or defeating the claim.\u201d Our review requires us to examine whether defendants have adduced an \u201caffirmative matter\u201d that defeats plaintiffs\u2019 claim.\n\u201c \u2018Affirmative matter,\u2019 for purposes of avoiding the effect or of defeating the claim, is something in the nature of a defense that negates an alleged cause of action completely or refutes crucial conclusions of law or conclusions of material fact unsupported by allegations of specific fact contained in or inferred from the complaint. [Citation.] It must, however, be something more than evidence offered to refute a well-pleaded fact in the complaint, for, as in the case of a motion under section 2 \u2014 615 [citation], such well-pleaded facts must be taken as true for the purposes of a motion to dismiss under section 2\u2014 619(a)(9) [citation].\u201d Heller Equity Capital Corp. v. Clem Environmental Corp., 232 Ill. App. 3d 173, 178 (1992).\nThe trial court held, and defendants now argue, that plaintiffs\u2019 bad faith in attempting to invest in the Scudder fund is established by the statements in the written agreements that the fund was open only to members of Jones & Brown\u2019s board of directors. We disagree. These statements admit of two different interpretations, both of them plausible. On defendants\u2019 reading, the statements are entirely exclusive, limiting the Scudder fund strictly to the monies of Jones & Brown\u2019s directors. On another reading, however, the statements identify Jones & Brown\u2019s directors as the company\u2019s sole conduits for investing in the Scudder fund but place no limits on whose money the directors may invest. The latter reading is entirely consistent with plaintiffs\u2019 allegations that Krupa told them that the Scudder fund was available not just to Jones & Brown\u2019s officers and directors but to their friends and families as well, and that, based on Krupa\u2019s representations, they previously gave him funds for investing in the Scudder fund and received what Krupa promised them. Therefore, we cannot say that the written agreements defeat plaintiffs\u2019 claims. We hold that the trial court erred in dismissing plaintiffs\u2019 claims as barred by the doctrine of unclean hands.\nWe turn to the other grounds for dismissal relied on by the trial court and now argued by defendants. Plaintiffs dispute the trial court\u2019s finding that Krupa signed the investment agreements solely in his individual capacity and that he therefore bound himself alone. Defendants respond by observing that Krupa\u2019s signature was not accompanied by a designation of himself as a corporate officer. For support, defendants cite 84 Lumber Co. v. Denni Construction Co., 212 Ill. App. 3d 441 (1991). In 84 Lumber, the officers of a construction company signed an application for credit from a lumber supplier. Although the name of the construction company was indicated in the section entitled \u201ccompany name,\u201d both officers signed their names in their individual capacities on the \u201capplicant\u201d lines. Additionally, one of the officers signed his name on the signature line for \u201cprincipal.\u201d The contract specified that the \u201c \u2018applicant agrees that he will be personally responsible.\u2019 \u201d 84 Lumber Co., 212 Ill. App. 3d at 443. The appellate court held that parol evidence was not admissible to show the intent of the parties because the officers unambiguously assumed personal liability under the contract:\n\u201cHere, [the officers] signed, not in their corporate capacity, but individually. An officer who signs his name, without more, is individually liable on the contract. [Citation.]\u201d 84 Lumber Co., 212 Ill. App. 3d at 443.\n84 Lumber is distinguishable. The agreements in the present case do not unequivocally reflect an intent to bind Krupa individually. Although, like the signatures in 84 Lumber, Krupa\u2019s signature is not accompanied by a designation of himself as a corporate officer, the manner of signature is not dispositive. \u201cWhere language in the document conflicts with the apparent representation by the officer\u2019s signature, an issue of fact is created.\u201d Sullivan v. Cox, 78 F.3d 322, 326 (7th Cir. 1996), citing Knightsbridge Realty Partners, Ltd-75 v. Pace, 101 Ill. App. 3d 49, 53 (1981). The agreements recite that the investments are guaranteed by Jones & Brown, which contradicts what is implied in the manner of Krupa\u2019s signature. We conclude, therefore, that there is an issue of fact regarding whether the parties intended to bind Krupa individually. The trial court, therefore, should not have granted dismissal based on the language of the agreements.\nNext, we address plaintiffs\u2019 allegations that Krupa acted with either the actual or the apparent authority of defendants in signing the agreements on behalf of Jones & Brown. We must determine whether the complaint alleges facts that, if proven, would entitle plaintiffs to relief from defendants under a theory of agency. Rlinois Graphics Co., 159 Ill. 2d at 488. An agency is a fiduciary relationship in which the principal has the right to control the agent\u2019s conduct and the agent has the power to act on the principal\u2019s behalf. Kaporovskiy v. Grecian Delight Foods, Inc., 338 Ill. App. 3d 206, 210 (2003). An agent\u2019s authority may be either actual or apparent, and actual authority may be either express or implied. Kaporovskiy, 338 Ill. App. 3d at 210. An agent has express authority when the principal explicitly grants the agent the authority to perform a particular act. Amcore Bank, N.A. v. Hahnaman-Albrecht, Inc., 326 Ill. App. 3d 126, 135 (2001) . Implied authority is actual authority proved by circumstantial evidence or authority that is inherent in an agent\u2019s position. Amcore Bank, 326 Ill. App. 3d at 137. Apparent authority, by contrast, arises when the principal holds an agent out as possessing the authority to act on its behalf, and a reasonably prudent person, exercising diligence and discretion, would naturally assume the agent to have this authority in light of the principal\u2019s conduct. Letsos v. Century 21-New West Realty, 285 Ill. App. 3d 1056, 1065 (1996). Only the words and conduct of the alleged principal, not those of the alleged agent, establish the agent\u2019s authority, whether actual or apparent. Kaporovskiy, 338 Ill. App. 3d at 210. Where, as here, a corporation is the alleged principal, it must be remembered that a corporation is a legal entity that acts only through persons \u2014 e.g., its officers and directors. See American Family Mutual Insurance Co. v. Enright, 334 Ill. App. 3d 1026, 1036 (2002) ; First Chicago v. Industrial Comm\u2019n, 294 Ill. App. 3d 685, 691 (1998). As Krupa is an officer of Jones & Brown, plaintiffs were entitled to consider his words and conduct as those of Jones & Brown itself where it was reasonable to do so. See First Chicago, 294 Ill. App. 3d at 691 (officer had authority to bind corporation in signing appeal bond). The existence and scope of an agency relationship are usually questions of fact to be decided by the trier of fact, unless the parties\u2019 relationship is so clear as to be undisputed. Pyskaty v. Oyama, 266 Ill. App. 3d 801, 826 (1994).\nPlaintiffs argue that Krupa had authority to accept funds on behalf of defendants for investment in the Scudder fund because (1) Krupa was president of Jones & Brown, had enjoyed that position for 20 years, and was given an office, telephone, and company letterhead for the execution of his duties; (2) Krupa told plaintiffs that Jones & Brown not only allowed but encouraged friends and family of Jones & Brown\u2019s officers and directors to invest in the Scudder fund; (3) Krupa previously had taken plaintiffs\u2019 money for investing in the Scudder fund with a guaranteed rate of return, and Krupa returned the money with the interest promised; and (4) the investment agreements at issue were written on company letterhead. Notably, plaintiffs do not argue that defendants gave Krupa express authority to accept money on their behalf for investment in the Scudder fund but, rather, contend that Krupa\u2019s authority was implied in his position as president of Jones & Brown and was also apparent from plaintiffs\u2019 prior course of dealing with defendants and from their providing Krupa with various accouterments of office.\nFor authority, plaintiffs rely principally on Denten v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 887 F. Supp. 176 (N.D. Ill. 1995), a case applying Illinois\u2019s law of agency. The plaintiff in Denten sued Merrill Lynch for the misconduct of one its brokers, Webster. The plaintiff alleged in her complaint that Webster had been a broker and employee of Merrill Lynch for 20 years when the plaintiff decided to have him handle her investment account. The plaintiff chose Webster based on her father\u2019s positive experiences with him during his long-standing relationship with Merrill Lynch. The plaintiff alleged that, after she became Webster\u2019s client, he regularly contacted her regarding investment strategy. He phoned her from his office in Merrill Lynch\u2019s building, had meetings with her in that office, and sent her letters that were printed on Merrill Lynch\u2019s letterhead and enclosed in envelopes bearing Merrill Lynch\u2019s name and address. The plaintiff further alleged that one of the investment opportunities Webster presented to her involved a radio station. Webster persuaded the plaintiff to give him funds to invest for her in the radio station, but Webster used the money to purchase his own share in the station. The plaintiff alleged that Merrill Lynch was liable for Webster\u2019s misconduct on a theory of apparent agency. Denten, 887 F. Supp. at 177-78. The trial court found that the plaintiff had pleaded facts establishing that Webster acted with the apparent authority of Merrill Lynch in taking her money for investment in the radio station:\n\u201cFirst, according to the allegations, Merrill Lynch employed Webster as an Executive Vice President. For twenty years, Merrill Lynch furnished Webster with a large office, telephone number and Merrill Lynch letterhead. These allegations support the fact that Merrill Lynch created the impression that Webster had authority from Merrill Lynch to act as he did.\nAdditionally, the allegations support plaintiff\u2019s reasonable belief that Webster had the authority from Merrill Lynch. Plaintiff alleged that part of her decision to become a client with Merrill Lynch was the relationship her family enjoyed with the company through Webster who was their personal representative, advisor and financial consultant. Plaintiff also alleges that Webster reminded plaintiff of Merrill Lynch\u2019s reputation and his twenty years of experience with Merrill Lynch to persuade her to become a \u2022 client of Merrill Lynch.\u201d Denten, 887 F. Supp. at 179.\nWhile Denten, being a federal case, is not binding on this court (Tri-G, Inc. v. Burke, Bosselman & Weaver, 353 Ill. App. 3d 197, 213 (2004)), we find its reasoning persuasive. The actions alleged of defendants are similar to the actions alleged of Merrill Lynch in Denten to prove apparent authority. The plaintiff in that case alleged that Merrill Lynch held out Webster as its agent by employing him for 20 years and by outfitting him with an office, phone, and company letterhead. Here, plaintiffs have similarly pleaded that Jones & Brown employed Krupa for at least 20 years and supplied him with an office, phone, and company letterhead. The plaintiff in Denten alleged that her decision to use Merrill Lynch and, particularly, Webster for investment advice was based on her father\u2019s relationship of many years with Merrill Lynch. Plaintiffs pleaded analogous facts here, alleging that their decision to invest in the Scudder fund was based on their past successes in investing in the fund through Krupa. Moreover, \u201ca reasonable person would assume that a corporate officer has the authority to bind the corporation financially because decisions relating to a corporation\u2019s financial obligations are typically reserved for corporation officers and directors\u201d (First Chicago, 294 Ill. App. 3d at 691). Based on Denten and the principles of First Chicago, we hold that plaintiffs have pleaded facts that, if true, would prove that Krupa acted with the apparent authority of defendants in taking plaintiffs\u2019 money pursuant to the investment agreements.\nDefendants argue that Denten is inapposite because Jones & Brown \u201cis not engaged in the business of selling investment opportunities to third parties as was the defendant in Denten.\u201d Rather, defendants assert, they are in the construction business. Plaintiffs\u2019 complaint contains no allegations about Jones & Brown\u2019s actual business, but such allegations were not necessary to establish apparent authority. The question is not whether Jones & Brown\u2019s course of business includes the selling of investment opportunities but whether plaintiffs reasonably believed that Jones & Brown permitted outside parties to invest in a Scudder fund available to its directors. Plaintiffs allege that they did so reasonably believe. Whether plaintiffs can prove their allegations if defendants prove that Jones & Brown is in a business totally unrelated to investment opportunities remains to be seen.\nDefendants also argue that plaintiffs failed to exercise due prudence and should have avoided the agreements Krupa proposed because of certain suspicious aspects, namely: (1) the investment agreements were handwritten by Krupa and signed by him in his individual capacity; (2) Krupa told plaintiffs that the funds were to be invested in his name rather than in plaintiffs\u2019 names; and (3) Krupa told plaintiffs that the funds were to be given to him, in cash, and not to Jones & Brown. As for the issue of Krupa\u2019s signature, we reiterate that the agreements contained sufficient indicia that Krupa signed them in his capacity as president of Jones & Brown. As for the method by which Krupa was to receive and invest the funds, we cannot say as a matter of law that these aspects were so patently suspicious that plaintiffs could not reasonably proceed with the proposed deal. Rather, these aspects are but a few of the circumstances that bear upon whether apparent authority existed here, and such a question is generally one of fact. Pyskaty, 266 Ill. App. 3d at 826.\nWe note that, though defendants moved for dismissal of all claims against them, the trial court focused its analysis on the contract and fraud counts and did not specifically address plaintiffs\u2019 claims for negligent hiring, negligent supervision, and negligent retention. Presumably, the trial court considered such analysis superfluous in light of its acceptance of the defense of unclean hands, which was relevant to all counts \u2014 contract, fraud, and negligence alike. However, we have found that the pleadings and supporting documents do not establish the defense of unclean hands. While we may affirm the judgment of the trial court on any basis in the record (Tri-G, 353 Ill. App. at 214), defendants present no alternative basis for affirming the dismissal of the negligence claims but instead rely entirely on the defense of unclean hands. Accordingly, we reverse the dismissal of all claims against defendants.\nFor the foregoing reasons, we reverse the judgment of the circuit court dismissing plaintiffs\u2019 claims against defendants, and we remand the cause.\nReversed and remanded.\nBOWMAN and CALLUM, JJ., concur.\nWhether the Scudder fund ever existed is not indicated in the pleadings. As we must take all well-pleaded facts as true for our purposes here {Northern Trust Co. v. County of Lake, 353 Ill. App. 3d 268, 278 (2004)), we assume as true plaintiffs\u2019 allegation that they believed the Scudder fund existed at the time they agreed to invest.\nThe complaint also contains claims against Krupa individually. These claims are not the subject of this appeal.", "type": "majority", "author": "JUSTICE O\u2019MALLEY" } ], "attorneys": [ "Michael S. Loeffler and J. Aaron Jensen, both of Meckler, Bulger & Til-son, LLP. of Chicago, for appellants.", "Kevin P. Brown and Maria E. Mazza, both of Rieck & Crotty, P.C., of Chicago, for appellees." ], "corrections": "", "head_matter": "JACQUELINE ZAHL et al., Plaintiffs-Appellants, v. RONALD A. KRUPA, Indiv., Defendant (Jones and Brown Company, Inc., et al., DefendantsAppellees).\nSecond District\nNo. 2\u201405\u20140919\nOpinion filed May 31, 2006.\nMichael S. Loeffler and J. Aaron Jensen, both of Meckler, Bulger & Til-son, LLP. of Chicago, for appellants.\nKevin P. Brown and Maria E. Mazza, both of Rieck & Crotty, P.C., of Chicago, for appellees." }, "file_name": "0653-01", "first_page_order": 671, "last_page_order": 682 }