APPEAL from the Circuit Court of Cook County; the Hon. RAYMOND
F. BERG, Judge, presiding.
MR. JUSTICE LORENZ DELIVERED THE OPINION OF THE COURT:
Plaintiffs brought separate actions on their own behalf and on behalf of all others similarly situated seeking injunctive relief, damages, and attorneys fees. The two complaints, which are substantially the same, alleged that defendants had acted improperly in selling plaintiffs credit life and disability insurance. In case No. 77-632, the court granted defendants' motions to dismiss all four counts of plaintiffs' complaint. In case No. 77-633, the court granted defendants' motions to dismiss counts II, III and IV of plaintiff's complaint and plaintiff voluntarily dismissed counts I and V. Because of the identity of issues on appeal we have consolidated these cases. On appeal, plaintiffs in both cases contend that the trial court erred in granting defendants' motions to dismiss, arguing that the two complaints state valid causes of action.
In case No. 77-632, Tyrone and Lucille Browder alleged that they purchased a used 1970 Cadillac from Hanley Dawson on April 8, 1974, for $2,661. They entered into a retail installment contract whereby they paid $800 cash and financed the balance with General Motors Acceptance Corporation (GMAC) over 24 months. As part of the financing agreement, they purchased credit life insurance through Hanley Dawson at a cost of $43.53 and credit disability insurance at a cost of $93.72. GMAC assessed them $732.05 as finance charges, a 24.99% annual rate.
Larry J. Gaston alleged that he purchased a used 1973 Cadillac from Hanley Dawson on March 7, 1975, for $6,844; that he paid $1,824.97 cash and financed the unpaid balance with a retail installment contract to be paid over 36 months. His installment contract included credit life insurance at a cost of $141.99 and credit disability insurance at a cost of $243.93. Gaston was assessed $1,806.41 in finance charges, a 19.57% annual rate.
In case No. 77-633 Enrique Montelongo alleged that he purchased a used 1972 A.M.C. Gremlin from C. James Pontiac on February 28, 1976, for $1,699.75, and entered into a retail installment contract making an $800 downpayment, financing the unpaid balance of the cash price with GMAC over 18 months. His credit life insurance cost $15.81 and his disability insurance cost $40.54. GMAC assessed him $281.34 in finance charges, a 25.06% annual rate.
Penn Security Life Insurance Company issued the credit insurance sold to Browder and Gaston. Great Equity Life Insurance Company issued the credit insurance sold to Montelongo. Both policies insured that in event of the death or continuing disability of the assured the indebtedness to GMAC would be satisfied. The premium charged for the life insurance in all three instances was based on a rate of $0.65 per $100 of initial insurance per annum. Of the total premiums charged plaintiffs, the car dealers retained 40%.
The crux of both complaints is that Hanley Dawson and C. James as General Motors dealers failed to inform plaintiffs that a cheaper but comparable Prudential policy ($0.375 per $100) was available through them. The first four counts of both complaints are substantially the same. Montelongo voluntarily dismissed counts I and V of his complaint. The remaining counts in both complaints were dismissed by the court pursuant to defendants' motions to dismiss. Plaintiffs contend that the trial court erred when it granted defendants' motions to dismiss.
Because Montelongo voluntarily withdrew the first count of his complaint we consider count I only as to Browder and Gaston who allege that Hanley Dawson sold them credit insurance in violation of the Motor Vehicle Retail Installment Sales Act ((MVRISA) (Ill. Rev. Stat. 1973, ch. 121 1/2, par. 561 et seq.) *fn1 which incorporates by reference section 155.56 of the Illinois Insurance Code (Ill. Rev. Stat. 1973, ch. 73, par. 767.56). *fn2 They claim that contrary to section 155.56, Hanley Dawson failed to provide them with copies of the policies or certificates of insurance at the time of the transaction. They further allege defendants failed to give them copies of their applications or notices of proposed insurance in accordance with this section. Moreover, they allege that the information contained in the installment contract was inadequate to meet the standards set forth in section 155.56 because it did not, inter alia: "A) identify the persons insured; B) contain a description of the amount of insurance; C) contain a description of the term of insurance; or D) contain a description of the coverage provided by the insurance." As a result of these alleged violations plaintiffs ask that Hanley Dawson be enjoined from selling credit insurance without providing to their purchasers the information required by law. They also seek to invoke section 24(b) of MVRISA (Ill. Rev. Stat. 1973, ch. 121 1/2, par. 584(b)) which states:
"No person who violates this Act, except as a result of an accident or bona fide error of computation, may recover any finance charge, any delinquency or collection charge or any refinance charge in connection with the related retail installment contract."
• 1, 2 We agree with plaintiffs that whether or not Hanley Dawson complied with the dictates of section 155.56 is a question of fact. Even if we assume that the information required by this section is "prominently set forth" in the installment contract thus eliminating the need for a separate instrument (Ill. Rev. Stat. 1973, ch. 73, par. 767.56), we find other features in the contract which arguably are not in compliance with the law. For example, Hanley Dawson lists the address of Penn Security as "St. Louis, Mo." Whether this is sufficient to comply with the section 155.56(d) requirement that the insured be given "the home office address of the insurer" is a question of fact. Furthermore, the contract does not specify which Browder, Tyrone or Lucille, is insured. A motion brought pursuant to section 45 attacks the legal sufficiency of the complaint, not its factual sufficiency. (Ill. Rev. Stat. 1975, ch. 110, par. 45.) "[D]efenses which are factual in their nature rather than legal are not available to defendants on a motion to dismiss, but should be set forth in their answer." (Cain v. American National Bank & Trust Co. (1975), 26 Ill. App.3d 574, 586, 325 N.E.2d 799, 808.) Accordingly, we remand count I of case No. 77-632 for further proceedings. If on remand the allegations prove correct, plaintiffs will be entitled to an injunction prohibiting Hanley Dawson from selling credit insurance without providing the information required by law and to recoup any finance charges which they paid to defendants in connection with their retail installment contracts.
In count II of both complaints plaintiffs alleged that C. James and Hanley Dawson violated their common law fiduciary duty as insurance brokers and the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1973, ch. 121 1/2, par. 261 et seq.) when they failed to disclose the availability of and offer the cheaper, but comparable, Prudential life insurance policy. They request as ...