Grimaldi v. Webb

• Decision Date: 24 June 1996
• Docket Number: No. 1-94-0277,1-94-0277
• Parties: , 217 Ill.Dec. 854 Jacqueline M. GRIMALDI, Plaintiff-Appellant, v. Patrick WEBB, Jr., Patrick Webb, Sr., Gregory J. Webb, and W.E.W. Leasing Company, Indiv. and d/b/a Packey Webb Ford, a partnership, and Ford Motor Credit Company, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 39

668 N.E.2d 39

282 Ill.App.3d 174, 217 Ill.Dec. 854

Jacqueline M. GRIMALDI, Plaintiff-Appellant, v. Patrick WEBB, Jr., Patrick Webb, Sr., Gregory J. Webb, and W.E.W. Leasing Company, Indiv. and d/b/a Packey

Webb Ford, a partnership, and Ford Motor

Credit Company, Defendants-Appellees.

No. 1-94-0277.

Appellate Court of Illinois,

First District, First Division.

June 24, 1996.

Rehearing Denied Aug. 1, 1996.

Edelman & Combs, Chicago (Daniel A. Edelman, Cathleen M. Combs, O. Randolph Bragg, Tara G. Redmond, J. Eric Vander Arend, Michelle A. Weinberg, of counsel), and Lawrence Walner & Associates, Chicago, for Appellant.

Wildman, Harrold, Allen & Dixon, Chicago (Steven E. Danekas, Richard D. Murphy, Jr., Kevin B. Reid, of counsel), for Appellees.

Justice BUCKLEY delivered the opinion of the court:

Plaintiff, Jacqueline Grimaldi, appeals the dismissal of her complaint against defendants, Patrick Webb, Jr., Patrick Webb, Sr., Gregory J. Webb, and W.E.W. Leasing Company, individually and doing business as Packey Webb Ford (Packey Webb), and Ford Motor Credit Company, after she purchased a car from Packey Webb. In count I, plaintiff alleged that Packey Webb violated the Consumer Fraud Act and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/2 (West 1992)), by engaging in a "policy and practice" of having consumers sign binding purchase orders before their financing terms were disclosed. In count II, plaintiff complained that Packey Webb violated the Consumer Fraud Act by misrepresenting the amounts disbursed to entities that issue extended warranties or service contracts, thereby allowing dealers to overcharge consumers for such extended warranties. In count III, plaintiff alleges that Ford Motor Credit Company (FMCC) violated section 8.9 of the Sales Finance Agency Act (205 ILCS 660/8.9 (West 1992)), by "acquiescing in" and "approving of" Packey Webb's misrepresentations regarding the cost of the extended warranty, thereby increasing the amount of credit extended by FMCC. The circuit court granted Packey Webb's and FMCC's motions to dismiss, and dismissed plaintiff's amended complaint with prejudice on January 12, 1994. Plaintiff filed her timely notice of appeal on January 19, 1994. For the reasons that follow, we reverse in part and affirm in part.

BACKGROUND

Plaintiff alleged the following facts in her amended complaint. On December 26, 1989, plaintiff agreed to purchase, on time, a new Ford Tempo from Packey Webb. Plaintiff signed a purchase order and took possession of the new car. Packey Webb took possession of her trade-in, and plaintiff paid $150 as a down payment. Packey Webb agreed to undertake financing for plaintiff, although the financing terms were not disclosed on December 26.

The purchase order signed by plaintiff was a printed form document, which indicated Plaintiff alleged that most people who buy cars from Packey Webb must do so on credit, which Packey Webb undertakes to secure in many cases. She further alleged that through Packey Webb's experience in securing financing, it knows the terms and interest rates for which customers are eligible, and at the time she executed the purchase order, Packey Webb could have provided her with an accurate estimate of the credit terms she would be offered. Plaintiff informed the salesperson on December 26, 1989, that she wanted an interest rate lower than the 11% she had paid on the purchase of her trade-in, a 1986 Thunderbird.

[217 Ill.Dec. 856] that it had been put into use in July 1988. The purchase order stated that plaintiff was given $3,000 in "Total Credits" to be applied against the price of the new car. The "Total Credits" consisted of a $150 down payment made on December 26, 1989, an additional $1,850 to be paid at an undisclosed time, and a "Rebate" of $1,000. Plaintiff paid the additional $1,850 on or about December 27, 1989. The boxes provided on the purchase order to designate whether plaintiff intended to pay cash or have Packey Webb arrange financing were not checked.

On December 28, 1989, plaintiff returned to Packey Webb to sign her financing papers. Upon her arrival, she was informed that she would have to renegotiate the deal because the financing applied for by Packey Webb was not available. A Packey Webb representative originally told her she would have to accept an interest rate of 15%. Plaintiff responded that she wanted to rescind the contract, return the new car, retrieve her trade-in, and resolve any charges for her use of the new car. Packey Webb refused to allow her to do so, stating that she had accepted the new car and could not rescind the deal. Plaintiff was subsequently offered a rate of 11%, and after further protest, was told that the lowest rate available was 9.9%. Plaintiff understood that the deal she negotiated would incorporate both an interest rate of 9.9% and the rebate of $1,000 listed in her purchase order. Plaintiff signed the retail installment contract prepared by Packey Webb on a standard FMCC printed form, while under the impression that she was bound to buy the new car.

The retail installment contract contains no reference to a rebate, which was expressly included in the terms of the purchase order. Plaintiff claimed that the failure to give plaintiff the rebate effectively increased the price she paid for the car by $1,000. Plaintiff returned to Packey Webb and paid the $1,000 approximately one week later.

In obtaining plaintiff's signature on the retail installment contract, Packey Webb represented that the amount it paid for the extended warranty was $595 and that the amount was nonnegotiable. The retail installment contract included the following entry:

"Amounts Paid on Your Behalf

* * * * * *

* * *

To FORD MOTOR COMPANY for EXT. SERVICE PLAN $595.00

* * * * * *"

* * *

Plaintiff asked about prices for extended warranties on the car she was purchasing. Packey Webb quoted a price of $595 for the warranty that plaintiff eventually purchased. Plaintiff asked whether the price was negotiable and was told that the price was fixed by FMCC and was a charge over which Packey Webb had no control.

Plaintiff alleged that Packey Webb did not pay $595 to Ford Motor Company for her extended warranty, nor was the price of the plan fixed by FMCC and beyond the power of Packey Webb to negotiate. Plaintiff alleged that the actual cost of the warranty was only $150, and the manufacturer's suggested retail price was only $270, as stated in a May 1990 study conducted by the New York Attorney General entitled "Dealer Pricing Practices in the Sale of Automobile Extended Service Contracts: Consumers Are Paying Too Much."

Plaintiff claimed that the representation of Packey Webb had the tendency and capacity to deceive consumers into not negotiating a lower price for the extended warranty and, thus, of causing consumers to pay excessive prices for extended warranties. Plaintiff further As to FMCC, plaintiff alleged that pursuant to the retail installment contract, FMCC is liable for the conduct of Packey Webb, irrespective of any fault on the part of FMCC. Plaintiff further alleged that FMCC engaged in wrongful conduct on its part in that it "acquiesced in" and "approved of" the representations made by Packey Webb regarding the amounts remitted to "Ford Motor Company" for extended warranties. Plaintiff claimed that because FMCC reviews individual retail installment contracts prior to accepting assignments of the contracts and receives the contracts after assignment, it is aware that the contracts contain misleading disclosures regarding the amounts paid to "Ford Motor Company" for the extended warranties. Finally, plaintiff alleged that since the inflated amounts charged for the extended warranties became part of the amount financed under the retail installment contracts, FMCC directly benefits from the overcharges by receiving more in finance charges.

[217 Ill.Dec. 857] alleged that she had suffered injury as a result of Packey Webb's practices.

DISCUSSION

In reviewing a motion to dismiss, this court must take all facts properly pleaded in the complaint as true and determine whether the complaint sufficiently states a claim upon which relief can be granted. People ex rel. Daley v. Datacom Systems Corp., 146 Ill.2d 1, 26-27, 165 Ill.Dec. 655, 666, 585 N.E.2d 51, 62 (1991). A cause of action should not be dismissed "unless it clearly appears that no set of facts can be proved which will entitle plaintiffs to recover." Daley, 146 Ill.2d at 11, 165 Ill.Dec. at 659, 585 N.E.2d at 55.

Count I

The circuit court expressly adopted Packey Webb's arguments in dismissing count I. Packey Webb had argued that the agreement to purchase a car and the financing agreement were two separate transactions and that there were no material differences between the purchase order signed by plaintiff and the subsequently executed retail installment contract.

The trial court agreed with Packey Webb that no Consumer Fraud Act violation occurred because Packey Webb could not quote final finance rates at the time plaintiff executed her purchase order and plaintiff was free to reject any financing Packey Webb offered. The trial court further determined that although plaintiff alleged that she understood a deal involving an interest rate of 9.9% would incorporate the $1,000 rebate described in the purchase order, the fact that plaintiff also alleged that she had to pay an additional $1,000 to effectuate the deal meant that plaintiff had renegotiated the deal and had given up her $1,000 rebate in executing the retail installment contract.

We believe the trial court erred in making these factual determinations. Whether or not Packey Webb could have disclosed financing terms likely to be offered to plaintiff was a question of fact that the trial court was not able to resolve on a motion to dismiss. Further, even if Packey Webb was unable to disclose such terms, that does not mean that Packey Webb's conduct...