Smith v. Prime Cable of Chicago

• Decision Date: 08 December 1995
• Docket Number: No. 1-93-0807,1-93-0807
• Citation: 213 Ill.Dec. 304,276 Ill.App.3d 843,658 N.E.2d 1325
• Parties: , 213 Ill.Dec. 304 Ronald SMITH and Helen Smith, on behalf of themselves and all other persons similarly situated, Plaintiffs-Appellants, v. PRIME CABLE OF CHICAGO, a Texas Corporation, Pay-Per-View Network, Inc., a/k/a Viewer's Choice/Pay-Per-View, a New York Corporation, Cable Vision Publications, Inc., a New Jersey Corporation, Pro-Tours, Inc., an Oklahoma Corporation and Eastman-Kodak, a New York Corporation, on behalf of themselves and all other persons and entities similarly situated, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 1325

658 N.E.2d 1325

276 Ill.App.3d 843, 213 Ill.Dec. 304

Ronald SMITH and Helen Smith, on behalf of themselves and all other persons similarly situated, Plaintiffs-Appellants, v. PRIME CABLE OF CHICAGO, a Texas Corporation, Pay-Per-View Network, Inc., a/k/a Viewer's Choice/Pay-Per-View, a New York Corporation, Cable Vision Publications, Inc., a New Jersey Corporation, Pro-Tours, Inc., an Oklahoma Corporation and Eastman-Kodak, a New York Corporation, on behalf of themselves and all other persons and entities similarly situated, Defendants-Appellees.

No. 1-93-0807.

Appellate Court of Illinois First District, Fifth Division.

Dec. 8, 1995.

Larry D. Drury, Ltd., Chicago, for Plaintiffs-Appellants.

Steven H. Frankkel, Karen H. Flax, Sonnenschein, Nath, Rosenthal, Chicago, for Pay-Per-View Network, Inc.

Michael A. Pope, Francis A. Citera, Raymond F. Benkoczy, Pope, Cahill, Devine, Ltd., Chicago, for Pro-Tours, Inc.

John J. George, Daley & George, Chicago, for Prime Cable of Chicago.

Justice GORDON delivered the opinion of the court:

This class action lawsuit alleged breach of contract, fraud, and violation of the Consumer Fraud and Deceptive Business Practices Act (Ill.Rev.Stat.1991, ch. 121 1/2, par. 261 et seq. now 815 ILCS 505/1 et seq. (West 1992)) and the Uniform Deceptive Trade Practices Act (Ill.Rev.Stat.1991, ch. 121 1/2, par. 311 et seq. now at 815 ILCS 510/1 et seq.) and sought compensatory and punitive damages, declaratory judgment, equitable accounting, and injunctive relief. The gravamen of Plaintiffs' complaint was that the Defendants had distributed, sold, promoted, advertised, sponsored and broadcast a country music concert, entitled "The Judds: Their Final Concert Live," on December 4, 1991 and that the concert lasted two rather than three hours as advertised by the Defendants. The Plaintiffs were billed $24.95 for the concert and paid that charge on December 21, 1991, seventeen days after they viewed the concert and three days after they filed the instant complaint.

Defendant Prime Cable of Chicago (Prime Cable) is a cable television company alleged to promote, advertise, sell and broadcast cable television programs and products to consumers. Pay-Per-View Network, Inc. (Network) is alleged to distribute cable television programs and products for sale to consumers and cable television companies. Defendant Pro-Tours, Inc. is alleged to promote and manage concerts and tours for Naomi and Wynonna Judd, also known as "the Judds."

On August 13, 1992 the trial court dismissed plaintiffs' first verified amended complaint for failure to state a cause of action. With respect to the breach of contract count of that complaint, the trial court noted that the Plaintiffs had paid for the concert after viewing it and with knowledge that the concert was only two hours. The court held that this payment acted as a ratification of the two-hour rather than three-hour performance; that the payment was a waiver of any alleged breach; and that the payment affected an accord and satisfaction. As to defendant Pro-Tours, the breach of contract count also was dismissed for failure to establish a contractual relationship. Plaintiffs' common law and statutory fraud claims were dismissed for failure to plead fraudulent words as to specific defendants; for failure to plead facts rather than conclusions; and for failure to plead that the concert length was material to the purchase decision. In concluding remarks, the court held that the payment vitiated any cause of action against any of the defendants.

In response to these findings, the Plaintiffs' filed a second amended complaint and alleged that their payment was made "after a complaint was filed as a protest" and as a result of coercion and compulsion by Prime Cable and/or Network "by threatening to or actually terminating or blocking-out the cable service * * * threatening to or actually suing * * * for failure to pay and damaging the credit of the Plaintiffs." In support of these allegations, the Plaintiffs attached their affidavit in which they stated that they had previously experienced a black-out in cable service, without any prior notice, for failure to timely pay a prior monthly bill.

On November 5, 1992 the Defendants filed a joint memorandum in support of their motion to dismiss Plaintiffs' second amended complaint; and on November 10, 1992, the Plaintiffs voluntarily dismissed their declaratory judgment count. ¹ The trial court dismissed the Plaintiffs' second amended complaint with prejudice on January 11, 1993. The court ruled that the Plaintiffs failed to properly plead duress; failed to establish a protest sufficient at law that predated their payment to Prime Cable; and presented "no legal change in the status of the complaint." The court also incorporated its reasons for dismissal of Plaintiffs' first amended complaint as further reasons for the dismissal of the second amended complaint.

The issues presented for review are whether the second amended complaint stated causes of action for breach of contract (against Prime Cable and Network), breach of contract implied in law (against Pro-Tours, Inc.), common law or statutory fraud, and for an accounting. In reaching these issues we must also address the impact of the payment of the concert charge, made after their original complaint had been filed, and whether that voluntary payment acted as a waiver of their enforceable rights or operated to bar recovery in the instant action. ² As the question of class action status was not reached by the trial court, it is not at issue here.

When ruling on a motion to dismiss, all well-pleaded facts in the complaint and those contained in exhibits made a part of the complaint are admitted and taken as true. (E.g., Michael Reese Hospital & Medical Center v. Chicago HMO, Ltd. (1990), 196 Ill.App.3d 832, 143 Ill.Dec. 537, 554 N.E.2d 472.) A cause of action should not be dismissed on the pleadings unless it clearly appears that no set of facts can be proved under the pleadings which will entitle a plaintiff to recover. (E.g., Zadrozny v. City Colleges of Chicago (1991), 220 Ill.App.3d 290, 163 Ill.Dec. 93, 581 N.E.2d 44; Jursich v. Arlington Heights Federal Savings & Loan Association (1982), 110 Ill.App.3d 847, 65 Ill.Dec. 549, 441 N.E.2d 864.) A motion to dismiss is used to attack defects in a pleading; it does not test the plaintiff's ability to recover where the complaint adequately states a cause of action. Duhl v. Nash Realty, Inc. (1981), 102 Ill.App.3d 483, 57 Ill.Dec. 904, 429 N.E.2d 1267.

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Waiver is the intentional relinquishment of a known right and can arise either expressly or by conduct inconsistent with an intent to enforce that right. (E.g., Sexton v. Smith (1986), 112 Ill.2d 187, 97 Ill.Dec. 411, 492 N.E.2d 1284; Wald v. Chicago Shippers Association (1988), 175 Ill.App.3d 607, 125 Ill.Dec. 62, 529 N.E.2d 1138.) In order to determine the applicability of waiver, one must focus on the intent of the non-breaching party. (Wald.) An intention to waive must be clearly inferred from the circumstances as they exist in each particular case. (Lavelle v. Dominick's Finer Foods, Inc. (1992), 227 Ill.App.3d 764, 169 Ill.Dec. 800, 592 N.E.2d 287; Kelly v. Economy Fire & Casualty Co. (1990), 196 Ill.App.3d 337, 142 Ill.Dec. 898, 553 N.E.2d 412.) The party claiming waiver has the burden of proving a clear, unequivocal, and decisive act of the opponent manifesting his intention to waive his rights. (Greene v. Helis (1993), 252 Ill.App.3d 957, 192 Ill.Dec. 202, 625 N.E.2d 162; Jones v. Melrose Park National Bank (1992), 228 Ill.App.3d 249, 170 Ill.Dec. 126, 592 N.E.2d 562.)

Although the question of intent is one of fact for the jury to decide (Lee v. Heights Bank (1983), 112 Ill.App.3d 987, 68 Ill.Dec. 514, 446 N.E.2d 248), it can be decided as a matter of law where there is no dispute as to the material facts and only one reasonable inference can be drawn from those facts. Wald v. Chicago Shippers Association; see Wells v. Minor (1991), 219 Ill.App.3d 32, 161 Ill.Dec. 691, 578 N.E.2d 1337 (summary judgment granted where only one reasonable inference from facts as to waiver).

In granting the Defendants' motion to dismiss on the basis of waiver, the trial court held that the Plaintiffs' payment of the concert charge operated as a waiver of the Defendants' alleged breach. In reaching this conclusion the court relied on Wald v. Chicago Shippers Association, a breach of contract case wherein the grant of summary judgment to the defendant based on a finding of waiver was upheld. That finding was premised on the deposition testimony of plaintiff's former president who stated that he was aware immediately or almost immediately after execution of the contract that the defendants were in breach. He also stated that he verbally and repeatedly informed the defendants that they were in breach but that the plaintiff company continued to perform under the contract for nearly six years until its operations ceased and Chapter 7 liquidation began. On the basis of this testimony, the court found that the plaintiffs' "failure to take action, other than verbally informing defendants of their alleged breaches, [was] inconsistent with an intent * * * to enforce" [their] rights." 175 Ill.App.3d at 621, 125 Ill.Dec. at 72, 529 N.E.2d at 1148.

In the instant case, unlike in Wald, the issue of waiver was raised in Defendants' motion to dismiss brought pursuant to section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 1992)). Thus, the basis for granting this motion was not whether a genuine issue of material fact existed, as was the standard in Wald, but whether the well-pleaded facts of the plaintiffs' complaint, taken as true for purposes of the motion, sufficiently stated a cause of action. The Defendants' motion to dismiss admitted Plaintiffs' pleaded fact of payment as well as Pl...