## Facts

- Dealer Management Systems, Inc. claimed Design Automotive Group, Inc. ordered an “Accounting Information Management” (AIM) computer system via an unsigned purchase order.
- The purchase order listed multiple software components totaling $24,000, offered as a $20,000 package, plus $795 for a UNIX runtime item.
- The purchase order also described additional work priced at $15,000, including software changes, development of an MRP subsystem, data conversion and loading, and one year of training and support, and referenced a source-code license for internal use.
- Dealer Management sued for (i) breach of contract for failure to pay the $20,000 software price and (ii) quantum meruit for other programs allegedly written.
- The trial court dismissed the contract count under section 2-619(a)(7), concluding the UCC statute of frauds applied and the contract was unenforceable because Design Automotive did not sign the purchase order.
- Dealer Management chose to stand on its complaint and voluntarily dismissed the quantum meruit count, making the dismissal final.
- More than 30 days later, Dealer Management filed a section 2-1401 petition to vacate the dismissal, arguing the transaction was predominantly for services (customization/training/support) and thus outside the UCC.

## Issues

1. Whether Dealer Management met the requirements for postjudgment relief under section 2-1401 to vacate the earlier dismissal of its breach-of-contract claim.
2. Whether the transaction was predominantly a sale of goods (software) governed by UCC Article 2 and its statute of frauds, or predominantly a services contract outside the UCC.

## Decision

- The appellate court affirmed the denial of the section 2-1401 petition.
- Section 2-1401 relief requires, among other things, a meritorious claim and due diligence; it is not a substitute for a timely appeal.
- Applying the predominant-purpose test for mixed goods-and-services agreements, the court concluded the agreement primarily concerned the sale of software, with services incidental.
- Because the transaction was a UCC sale of goods for more than $500 and there was no writing signed by Design Automotive, the statute of frauds barred enforcement.
- Lacking an enforceable contract claim, Dealer Management failed to establish a meritorious claim for section 2-1401 purposes.

## Legal Principles

- A section 2-1401 petition is a limited postjudgment remedy requiring a meritorious claim or defense and due diligence; it cannot be used to reargue matters that should have been raised on direct appeal.
- Mixed contracts involving both goods and services are governed by the UCC when the contract’s predominant purpose is the sale of goods and services are incidental.
- Packaged software transactions may be treated as sales of “goods” under UCC Article 2 when the deal’s structure and pricing center on the software product.
- Under UCC section 2-201(1), a contract for the sale of goods priced at $500 or more is unenforceable against a party who did not sign a sufficient writing, absent a proven exception.

## Conclusion

The court held that the alleged agreement was predominantly a UCC-governed sale of software and, because the buyer did not sign the purchase order, the statute of frauds barred enforcement; accordingly, the plaintiff lacked a meritorious claim and was not entitled to section 2-1401 relief from the earlier dismissal.


Dealer Management Systems, Inc. v. Design Automotive Group, Inc., 355 Ill. App. 3d 416, 822 N.E.2d 556 (Ill. App. Ct. 2d Dist. 2005)