Guinn v. Hoskins Chevrolet

• Decision Date: 19 October 2005
• Docket Number: No. 1-04-2180.,1-04-2180.
• Citation: 836 N.E.2d 681
• Parties: Deborah GUINN, Plaintiff-Appellant, v. HOSKINS CHEVROLET, Union Fidelity Life Insurance Company, and Bank One, N.A., Defendants-Appellees.
• Court: United States Appellate Court of Illinois

836 N.E.2d 681

Deborah GUINN, Plaintiff-Appellant, v. HOSKINS CHEVROLET, Union Fidelity Life Insurance Company, and Bank One, N.A., Defendants-Appellees.

No. 1-04-2180.

Appellate Court of Illinois, First District, First Division.

September 19, 2005.

Rehearing Denied October 19, 2005.

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Longo and Associates, Ltd. (Joseph A. Longo, of Counsel), Mount Prospect, for Appellant.

Robert E. Senechalle, Jr., Ltd. (Robert E. Senechalle, Jr., of Counsel), Forest Park, for Appellee Hoskins Chevrolet.

Sidley Austin Brown & Wood LLP (Bruce Braverman, J. Randal Wexler, of Counsel), Tressler Soderstrom Maloney & Priess, Chicago, for Appellee Union Fidelity Life Insurance Company.

JP Morgan Chase Bank, N.A. (Gloria R. Mitka, of Counsel), Chicago, for Appellee Bank One, N.A.

Justice BURKE delivered the opinion of the court:

Plaintiff Deborah Guinn appeals from an order of the circuit court granting defendants Hoskins Chevrolet, Union Fidelity Life Insurance Company (Union), and Bank One, N.A.'s (Bank One) motions to dismiss Guinn's second amended complaint.¹ On appeal, Deborah contends that the trial court erred in dismissing her second amended complaint because she sufficiently alleged causes of action for violation of the Illinois Consumer Fraud Act (815 ILCS 505/1 et seq. (West 2002)), breach of contract, common law fraud, and unjust enrichment. For the reasons set forth below, we affirm.

STATEMENT OF FACTS

On October 8, 1996, plaintiffs purchased a used 1991 Ford truck from Hoskins Chevrolet. Plaintiffs entered into a retail installment contract with Hoskins Chevrolet, which was subsequently assigned to the First National Bank of Chicago, the predecessor of Bank One, now known as JPMorgan Chase Bank, N.A. The retail installment contract provided for a 36-month loan with an APR of 15% and monthly installment payments of $209.03. Plaintiffs were to make their monthly payments to First National Bank of Chicago, commencing on November 22, 1996. Eddie also elected to purchase credit life insurance for $106.10, which was to be provided by Union.

On January 19, 2001, Deborah filed the first of three complaints in this case. This 18-page, 142 paragraph complaint against defendants, alleged claims for consumer fraud, common law fraud, breach of contract, and unjust enrichment. The claims were based on four alleged "violations" of either the federal Truth-in-Lending Act (TILA) (15 U.S.C. § 1601 et seq. (1988)), Regulation Z (12 C.F.R. § 226.1 et seq. (2002)), and/or the Illinois Motor Vehicle Retail Installment Sales Act (815 ILCS 375/1 et seq. (West 2002)), i.e.: (1) Hoskins Chevrolet misrepresented the APR to plaintiffs and concealed the fact it received a kickback from Bank One (APR misrepresentation); (2) Hoskins Chevrolet misrepresented that the cost of credit life insurance was $106.10 and that that entire amount would be paid to Union, whereas, in fact, Hoskins Chevrolet received a kickback (credit life insurance misrepresentation); (3) defendants charged interest prior to the time plaintiffs received the benefit of or actual use of the loan proceeds (early interest claim); and (4) the late charge provision in the installment agreement was ambiguous because it failed to define "installment" and, since installment was not defined, it was not conspicuously disclosed as required by law.

Thereafter, Union filed an answer denying an agency relationship between it and Hoskins Chevrolet and denying that the credit life insurance premium was less than $106.10 or that any kickbacks were involved. On July 7, Bank One filed a motion to dismiss pursuant to section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2004)) on the basis that Deborah's consumer fraud claims were barred by the three-year consumer fraud statute of limitations and the one-year TILA statute of limitations. Bank One further moved for dismissal pursuant to section 2-615 of the Code on the basis that, with respect to all counts, Deborah failed to plead specific facts to support her claims, nor could she ever state viable causes of action against it.

On October 4, Hoskins Chevrolet filed a motion to dismiss pursuant to sections 2-615 and 2-619. With respect to section 2-619 Hoskins Chevrolet, too, argued that Deborah's consumer fraud claims were barred by the statutes of limitations. With respect to its section 2-615 motion, Hoskins Chevrolet argued that Deborah failed to allege damages, the installment contract itself rebutted many of her allegations, Deborah failed to plead sufficient facts, and her claims were otherwise insufficient as a matter of law.

On October 29, Deborah filed her response to Bank One's motion, maintaining that the consumer fraud claims were not barred by the statutes of limitations because the discovery rule applied. However, she did not state when she "discovered" her claims. Deborah further maintained that Bank One was not merely an assignee, but was a party to the contract.

On May 28, 2002, the trial court entered an order on both motions to dismiss. As to Bank One's motion, the trial court struck the motion in its entirety because it was improper in Despite striking Bank One's motion, the court sua sponte struck Deborah's complaint in its entirety as "clearly insufficient." With respect to the consumer fraud claims, the court found they were "rife with conclusions" and "short on facts." The same was true with respect to the common law fraud claim. With respect to the breach of contract claims, the court concluded that there was no cause of action in Illinois based on breach of good faith and fair dealing. Lastly, the court found that the unjust enrichment claim was insufficient and also barred by the express contract.

On June 25, Deborah filed her first amended complaint consisting of 25 pages and 157 paragraphs. This complaint was essentially the same as her original complaint. However, in the first amended complaint, Deborah alleged that she only discovered her claims against defendants in December 2000 when she met with her attorney. Thereafter, all three defendants filed motions to dismiss, essentially on the grounds set forth with respect to Deborah's original complaint. Deborah responded to each motion and each defendant thereafter replied.

On March 24, 2003, the trial court granted defendants' motions to dismiss. With respect to Hoskins Chevrolet's section 2-615 motion to dismiss, the court concluded, in connection with the APR misrepresentation, that "although this allegation may support" a "claim of violation of CFA," plaintiff failed to alleged facts as to damages. With respect to plaintiff's breach of contract claim based on the APR misrepresentation, the court found that it was barred by the one-year TILA statute of limitations and, also, that plaintiff failed to plead facts as to discovery. With respect to the common law fraud claim, the court found that plaintiff failed to allege specific facts showing that her damages, if any, were proximately caused by Hoskins Chevrolet's alleged conduct. Lastly, with respect to the unjust enrichment claim, the court concluded as before: this theory was not applicable when an express contract governs as one did here. Accordingly, the trial court granted Hoskins Chevrolet's section 2-615 motion to dismiss.

With respect to Bank One's section 2-615 motion to dismiss and plaintiff's consumer fraud claims, the court found that plaintiff must plead specific facts demonstrating that Bank One, as an assignee, actively and directly participated in the alleged fraud, which plaintiff failed to do. With respect to breach of contract based on the APR misrepresentation, the court found that Bank One owed no duty to disclose any information to plaintiff since it was an assignee. With respect to the common law fraud claim, the court found that there were no allegations of actual damages and, further, that plaintiff failed to allege that Bank One proximately caused any damages by failing to disclose the APR. Specifically, in connection with damages, the court concluded that plaintiff only asserted conclusory allegations. With respect to the unjust enrichment claim, the court's conclusion was the same as above. Accordingly, the court granted Bank One's motion to dismiss. In addition, the court granted Union's section 2-615 motion to dismiss for all the same reasons that it had granted Bank One's motion to dismiss.

With respect to all three defendants' motions to dismiss pursuant to section 2-619, the court found that it could not say as a matter of law that plaintiff knew or should have known prior to consulting with her attorney of her claims against defendants. Accordingly, the court denied defendants' motions to dismiss pursuant to section 2-619.

Thereafter, a 39-page, 291-paragraph, second amended complaint was filed on behalf of Deborah and Eddie. Plaintiffs alleged claims based on the same theories as in the first two complaints. Specifically, in count I, plaintiffs alleged a consumer fraud claim against all three defendants. Plaintiffs alleged five separate "violations." First, plaintiffs alleged that Hoskins Chevrolet misrepresented the APR to them and concealed the overcharge from them. According to plaintiffs, Hoskins Chevrolet's financial manager indicated he had obtained the lowest possible APR for them and misrepresented that 15% was the rate granted by Bank One when, instead, Bank One actually granted a lower rate to Hoskins Chevrolet and Hoskins Chevrolet kept the difference. However, according to plaintiffs, Hoskins Chevrolet failed to inform them of the "upcharge" fee, or commission it received, i.e., Hoskins Chevrolet failed to disclose the "kickback" to them.

With respect to the second violation, plaintiffs maintained that defendants, often without identification of which one or ones they are referring to, which is also true for the rest of the counts, indicated that $106.10 was to be paid to...