Warren v. LeMay

• Decision Date: 24 March 1986
• Docket Number: No. 5-84-0542,5-84-0542
• Citation: 142 Ill.App.3d 550,491 N.E.2d 464,96 Ill.Dec. 418
• Parties: , 96 Ill.Dec. 418 Terry WARREN and Rondice Warren, Plaintiffs-Appellees, v. Robert LeMAY and Karen LeMay, Century 21-Baebler Realtors, and Orkin Exterminating Company, Defendants-Appellants.
• Court: United States Appellate Court of Illinois

Page 464

491 N.E.2d 464

142 Ill.App.3d 550, 96 Ill.Dec. 418

Terry WARREN and Rondice Warren, Plaintiffs-Appellees, v. Robert LeMAY and Karen LeMay, Century 21-Baebler Realtors and Orkin Exterminating Company, Defendants-Appellants.

No. 5-84-0542.

Appellate Court of Illinois Fifth District.

March 24, 1986.

Rehearing Denied April 23, 1986.

Edward T. McCarthy, Burroughs, Simpson, Hepler, Broom & McCarthy, Edwardsville, for Century 21-Baebler Realtors.

Ted L. Perryman, Roberts, Perryman & Bomkamp, Inc., Belleville, for Orkin Exterminating Co.

Robert P. LeChien, LeChien & Associates, Ltd., Belleville, for plaintiffs-appellees.

Justice HARRISON delivered the opinion of the court:

Defendants Orkin Exterminating Company (Orkin) and Century 21-Baebler Realtors (Century 21) appeal from a judgment and order of the circuit court of St. Clair County awarding plaintiffs, Terry and Rondice Warren, actual and punitive damages and attorney's fees for damage to their home caused by termite infestation. Plaintiffs cross-appeal as to the amount of attorney's fees and costs they received. Plaintiffs also cross-appeal from a judgment in favor of defendants Robert and Karen LeMay, but request reversal and remand of that judgment only if a new trial is otherwise granted to defendants Orkin and Century 21. Finally, plaintiffs move for an award of their reasonable attorney's fees and costs on this appeal. For the reasons which follow, we affirm the circuit court's judgment in favor of plaintiffs and against defendants Orkin and Century 21, and its award of statutory attorney's fees and costs to plaintiffs. In addition, we grant plaintiffs' motion for attorney's fees and costs on this appeal, and remand the cause for further proceedings regarding the amount of fees and costs to be awarded.

The home at issue in this case was purchased by plaintiffs, the Warrens, from defendants the LeMays. The Warrens financed the purchase through Town & Country Mortgage Company with a mortgage guaranteed by the Veterans Administration (VA). A requirement of VA financing was that a termite inspection be made of the property at the sellers' expense. Defendant Orkin was selected to handle this inspection and prepare the necessary report. All details of obtaining and processing Orkin's report were performed by the sellers and the real estate agency representing them, defendant Century 21. The termite report was prepared, financing was approved, and in April of 1981, the sale was closed. The purchase price paid by plaintiffs was $41,000.

Neither plaintiffs, Town & Country Mortgage Company, nor the VA was advised of any current termite infestation or damage to the home at the time of the sale. In fact, termite infestation and damage were so extensive that by the end of 1982, the home was unsafe for human occupancy, and plaintiffs were forced to move. When the extent of the damage became apparent, plaintiffs filed suit against defendants the LeMays, Orkin, Century 21 and others in the circuit court of St. Clair County, seeking actual and punitive damages and attorney's fees for the property damage they sustained.

Plaintiffs' complaint was amended numerous times during the course of the proceedings but the case was ultimately submitted on the following theories. Defendants the LeMays were alleged to have intentionally misrepresented the condition of the home in that they represented to plaintiffs that it was free from termites and termite damage when they knew that this representation was false. Defendant Century 21 was alleged to have been guilty of willful and wanton misconduct, violation of the Real Estate Brokers and Salesmen License Act (Ill.Rev.Stat.1981, ch. 111, par. 5701, et seq.) and rules of the Department of Registration and Education promulgated thereunder, and violation of the Consumer Fraud and Deceptive Business Practices Act (Ill.Rev.Stat.1981, ch. 121 1/2, par. 261, et seq.). Defendant Orkin was also alleged to have violated the Consumer Fraud and Deceptive Business Practices Act (Ill.Rev.Stat.1981, ch. 121 1/2, par. 261, et seq.) in addition to being guilty of negligence and willful and wanton misconduct.

Following a lengthy jury trial, a general verdict was rendered in favor of plaintiffs and against defendants Orkin and Century 21, and plaintiffs were awarded actual damages in the amount of $34,700. The jury also rendered separate verdicts in favor of plaintiffs and against defendants Orkin and Century 21 respectively, assessing $25,000 in punitive damages against each. In addition, the jury answered numerous special interrogatories finding, inter alia, that plaintiffs had failed to meet their burden of proof on their claim against defendants the LeMays, but had proved all of their claims against Orkin and Century 21, and that defendants Orkin and Century 21 had each shown an utter indifference to or conscious disregard for plaintiffs. The circuit court entered judgment on the jury's verdicts. Thereafter, the court granted plaintiffs' petition for attorney's fees and costs pursuant to section 10a(c) of the Consumer Fraud and Deceptive Business Practices Act (Ill.Rev.Stat.1981, ch. 121 1/2, par. 270a(c)), but reduced the fees awarded to $17,464.50 from the $37,563.75 requested, and awarded only $335.42 of the $3,959.85 in requested costs. At the same time, the court denied various post-trial motions filed by defendants Orkin and Century 21. This appeal followed.

A pivotal issue before us is applicability of the Consumer Fraud and Deceptive Business Practices Act (Ill.Rev.Stat.1981, ch. 121 1/2, par. 261, et seq.), under which both defendant Orkin and defendant Century 21 were found liable. Section 2 of the Act (Ill.Rev.Stat.1981, ch. 121 1/2, par. 262) provides:

"Unfair methods of competition and unfair or deceptive acts or practices, including but not limited to the use or employment of any deception, fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon the concealment, suppression or omission of such material fact or the use or employment of any practice described in section 2 of the 'Uniform Deceptive Trade Practices Act,' approved August 5, 1965, in the conduct of any trade or commerce are hereby declared unlawful whether any person has in fact been misled, deceived or damaged thereby. * * * "

Persons harmed by a violation of this statute have a private right of action for damages, or any other relief deemed proper by the court. (Ill.Rev.Stat.1981, ch. 121 1/2, par. 270a.) In reviewing such private rights of action, we are guided by the terms of section 11a of the statute (Ill.Rev.Stat.1981, ch. 121 1/2, par. 271a), which expressly provides, "This Act shall be liberally construed to effect the purposes thereof." As this court has previously ruled, " * * * we perceive a clear mandate from the Illinois legislature that the courts of this State are to utilize the Consumer Fraud Act to the utmost degree in eradicating all forms of deceptive and unfair business practices and to grant appropriate remedies to defrauded consumers." American Buyers Club of Mt. Vernon v. Honecker (1977), 46 Ill.App.3d 252, 257, 5 Ill.Dec. 666, 361 N.E.2d 1370, 1374.

Defendant Orkin contends that its conduct was not of "the character and magnitude" proscribed by the Act. We disagree. The evidence showed that the LeMays purchased the home in question in 1973. Shortly after moving in, the LeMays discovered an infestation of termites. Defendant Orkin was called to inspect the home and perform termite treatments. The LeMays also entered into a contract with Orkin, under which Orkin agreed to reinspect and retreat the home as necessary and to pay up to $100,000 for any subsequent termite damage. Termite problems nevertheless persisted. Orkin retreated the home in 1975 and again in 1979. Orkin admits that these retreatments would not have been made unless the house had termites. The LeMays, however, were apparently never told about the continued infestation.

The LeMays placed their home on the market in 1980, after Mr. LeMay was notified he was being transferred by his employer to another state. The LeMays listed the home with defendant Century 21. Doris Hock of Century 21 was the listing agent. During this same period, plaintiffs, the Warrens, had begun to look for what was to be their first home. The Warrens were represented by Millie Sedgwick, a real estate agent associated with Bud Sullivan Realty. The Warrens first viewed the LeMays home in January of 1981. They liked the home and submitted an offer for it, but indicated that they had to obtain VA financing. Although the Warrens initial offer was refused, the LeMays accepted a subsequent offer from them, and on February 21, 1981, the Warrens and the LeMays signed a sales agreement specifying a purchase price of $41,000.

At about the same time the sales agreement was signed, Mrs. LeMay observed termite activity in the house. Specifically, she noticed termites surface through a "pinhole" in a board covering the main support beam for the upper story of the house. The termites surfaced in an area over the kitchen. Upon observing this activity, Mrs. LeMay telephoned Doris Hock of defendant Century 21 to advise her that the house had termites. LeMay also reported the termite activity to defendant Orkin, and on three occasions in February, 1981, Orkin treated the premises by drilling and applying chemicals. The last such treatment was made by defendant Orkin on February 26, 1981.

As previously noted, the VA financing sought by plaintiffs for the home required a termite inspection report to be paid for by the sellers. On the suggestion of Doris Hock, the real estate agent for the LeMays, the Warrens agreed to have this report prepared by defendant Orkin. On February 27, 1981, a representative for Orkin returned to the home to conduct the necessary inspection. This was the fourth visit to...