People ex rel. Hartigan v. Stianos

• Decision Date: 06 March 1985
• Docket Number: No. 84-772,84-772
• Citation: 131 Ill.App.3d 575,475 N.E.2d 1024,86 Ill.Dec. 645
• Court: United States Appellate Court of Illinois
• Parties: , 86 Ill.Dec. 645 PEOPLE of the State of Illinois, ex rel. Neil F. HARTIGAN, Attorney General of Illinois, Plaintiff-Appellant, v. John STIANOS and Theodore G. Stamayannos, individually and d/b/a J & T Mini Mart, Defendants-Appellees.

Page 1024

475 N.E.2d 1024

131 Ill.App.3d 575, 86 Ill.Dec. 645

PEOPLE of the State of Illinois, ex rel. Neil F. HARTIGAN, Attorney General of Illinois, Plaintiff-Appellant, v. John STIANOS and Theodore G. Stamayannos, individually and d/b/a J & T Mini Mart, Defendants-Appellees.

No. 84-772.

Appellate Court of Illinois,

Second District.

March 6, 1985.

Neil F. Hartigan, Atty. Gen., James C. Spoeri, Lori R. Lefstein, Asst. Attys. Gen., Chicago, for plaintiff-appellant.

NASH, Presiding Justice:

Plaintiff, the Illinois Attorney General, appeals from an order of the circuit court which denied his motion for issuance of a preliminary injunction against defendants, John Stianos and Theodore Stamayannos d/b/a J & T Mini Mart, to prevent them from charging to consumers sales tax in excess of the amount authorized by law.

Defendants have not responded with a brief on appeal and we will consider the issues presented under the standards set forth in First Capitol Mortgage Corp. v. Talandis Construction Corp. (1976), 63 Ill.2d 128, 131, 133, 345 N.E.2d 493.

The complaint for injunctive and other relief was brought against defendants by the Illinois Attorney General pursuant to the Consumer Fraud and Deceptive Business Practices Act (Ill.Rev.Stat.1983, ch. 121 1/2, par. 261 et seq.) (Consumer Fraud Act). It alleges, inter alia, that defendants were engaged in the sale of food for human consumption and of nonprescription drugs for which the applicable sales tax rate which may be charged in Lake County is 1.25%. ¹ That on April 24, 1984, an investigator for the Attorney General purchased Bayer Aspirin, a nonprescriptive drug, from defendants for $1.29 and was charged 8 cents sales tax, which is a rate of 6.20% for the purchase; that on June 11, 1984, an investigator purchased Vicks Cough Syrup, a nonprescriptive drug, from defendants for $2.99 and was charged 18 cents for sales tax, which is a rate of 6.02%; and, that on July 5, 1984, the investigator purchased Anacin, a nonprescriptive drug, from defendants for $2.99 and was charged 18 cents for sales tax, a rate of 6.02% for the purchase.

The complaint further alleged that defendants' conduct constituted a pattern of deceptive acts or practices in the conduct of trade or commerce in violation of section 2 of the Consumer Fraud Act (Ill.Rev.Stat.1983, ch. 121 1/2, par. 262) as the sales tax overcharges offend public policy and cause substantial injury to consumers. The complaint sought preliminary and permanent injunction against the continued unlawful practice, restitution to all consumers affected by it and assessment of a civil penalty against defendants for violation of the Consumer Fraud Act.

A temporary restraining order was issued on motion of the Attorney General on July 12, 1984, and the cause set for hearing for a preliminary injunction on July 18. Defendants moved to dismiss the complaint, alleging it failed to state a cause of action and that the conduct complained of, if true, was not prohibited by the Consumer Fraud Act. The trial court granted defendant's motion, in part, by striking that portion of the prayer for relief in the complaint which sought civil penalties. Defendant then answered admitting they were sellers of nonprescriptive drugs and that Bayer Aspirin and Anacin were in that category, but denied Vicks Cough Syrup was a nonprescriptive drug or that defendants had violated the Consumer Fraud Act.

At the hearing of the motion for preliminary injunction held July 18, 1984, the Attorney General's investigator testified she had been assigned to make purchases of nonprescriptive drugs from retail stores to determine whether they were charging the correct amount of sales tax to consumers. She participated in investigations in Cook, Lake and McHenry Counties, including defendants' store in Waukegan. The witness testified she made the purchases alleged in the complaint from defendants' store on those three occasions and was charged the excessive sales tax rates alleged on each occasion. She stated that she did not need a prescription for any of these purchases nor did she identify herself as an investigator or inform the cashiers she had been overcharged.

At the close of plaintiff's case, defendants moved for a directed finding which the trial court granted on the grounds (1) plaintiff had failed to prove defendants had engaged in the complained-of conduct with intent to deceive; (2) that the conduct was de minimis; and, (3) that plaintiff failed to show a likelihood of success on the merits. The court denied the preliminary injunction and dissolved the temporary restraining order.

The Attorney General filed a notice of interlocutory appeal from the order refusing the injunction (87 Ill.2d R. 307(a)(1)). He also sought certification from the trial court for permissive appeal under Supreme Court Rule 308(a) ( 87 Ill.2d 308(a)) on the grounds that its order dismissing the portion of plaintiff's complaint in which monetary penalties were sought raised a disputable question of law for which an immediate appeal would advance termination of the litigation; certification was denied by the trial court, however, and that issue is not before us on this appeal.

Plaintiff contends first that the finding for defendants at the close of plaintiff's case in the hearing for preliminary injunction was against the manifest weight of the evidence.

A trial court must apply a two-step analysis when ruling upon a motion for judgment in favor of defendant at the close of plaintiff's case in a bench trial (Ill.Rev.Stat.1983, ch. 110, par. 2-1110). It must first determine, as a matter of law, if plaintiff has presented a prima facie case, i.e., whether plaintiff offered some evidence on each essential element of his cause of action; if not, judgment should be entered for defendant. If, however, plaintiff has made out a prima facie case, the trial court must then weigh the evidence and if, after having done so, sufficient evidence still remains to establish plaintiff's prima facie case, the court should deny defendants' motion and proceed with the trial. Kokinis v. Kotrich (1980), 81 Ill.2d 151, 154-55, 40 Ill.Dec. 812, 407 N.E.2d 43.

It appears in the present case that the trial court determined plaintiff failed, as a matter of law, to present sufficient evidence to establish prima facie that the preliminary injunction should issue. The court found plaintiff failed to show that defendants acted with intent to deceive; defendants' conduct was de minimis; and plaintiff failed to establish a likelihood of success on the merits of the action. We will consider whether the findings made by the trial court require the conclusion that the remedy sought is without merit as a matter of law.

Section 7 of the Consumer Fraud and Deceptive Business Practices Act provides:

"Whenever the Attorney General has reason to believe that any person is using, has used, or is about to use any method, act or practice declared by Sections 2 through 20 of this Act to be unlawful, and that proceedings would be in the public interest, he or she may bring an action in the name of the People of the State against such person to restrain by preliminary or permanent injunction the use of such method, act or practice." (Ill.Rev.Stat.1983, ch. 121 1/2, par. 267.)

Section 2 of the Act provides that certain generally described unfair and deceptive acts or practices in the conduct of trade or commerce are unlawful. (Ill.Rev.Stat.1983, ch. 121 1/2, par. 262; Scott v. Association for Childbirth at Home, International (1981), 88 Ill.2d 279, 284, 58 Ill.Dec. 761, 430 N.E.2d 1012.) In the present case, the Attorney General's complaint alleged defendants were engaged in trade or commerce and had engaged in unfair or deceptive practices in doing so by charging consumers excessive sales tax not authorized by law. (See People ex rel. Fahner v. Hedrich (1982), 108 Ill.App.3d 83, 63 Ill.Dec. 782, 438 N.E.2d 924; People ex rel. Fahner v. Walsh (1984), 122 Ill.App.3d 481, 77 Ill.Dec. 691, 461 N.E.2d 78; People ex rel. Hartigan v. Maclean Hunter Publishing Corp. (1983), 119 Ill.App.3d 1049, 75 Ill.Dec. 486, 457 N.E.2d 480.) Plaintiff also offered evidence in support of the complaint which established defendants had overcharged for sales tax on three occasions.

In granting defendants' motion for a directed finding, the trial court found first that defendants had no intent to deceive when they charged excessive sums for sales tax. While it is difficult to understand the basis for that conclusion, as defendants have not testified, it has been held that an intent to deceive is not essential to a finding of unfair or deceptive conduct under section 2 of the Consumer Fraud Act. (Duhl v. Nash Realty Inc. (1981), 102 Ill.App.3d 483, 494-95, 57 Ill.Dec. 904, 429 N.E.2d 1267; American Buyers Club of Mt. Vernon, Illinois, Inc. v. Honecker (1977), 46 Ill.App.3d 252, 259, 5 Ill.Dec. 666, 361 N.E.2d 1370.) As this court recently noted, the center of focus in such matters is not on the intent of the seller but, rather, on the effect that the unlawful conduct might have on the consumer. People ex rel. Fahner v. Walsh (1984), 122 Ill.App.3d 481, 486, 77 Ill.Dec. 691, 461 N.E.2d 78, 82.

The same conclusion must necessarily be reached on consideration of the civil penalty provisions of section 7 of the Act. (Ill.Rev.Stat.1983, ch. 121 1/2, par. 267, as amended.) The statute provides for a civil penalty not to exceed $50,000 against any person found by the court to have violated section 2 of the Act and, if the unlawful practice was done with intent to defraud, the court may impose a civil penalty up to that sum for each violation. It is clear that unfair or deceptive practices are unlawful under section 2 of the Consumer Fraud Act whether or not it was intended to deceive and the trial court erred in finding to the contrary.

The trial court also found that defendants' conduct was de minimis and that the Attorney General...