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Perrin v. Pioneer Nat'l Title Ins. Co.

OPINION FILED APRIL 22, 1980.

ROBERT F. PERRIN, EX'R OF THE ESTATE OF MARGARET F. PERRIN, DECEASED, ET AL., PLAINTIFFS-APPELLANTS,

v.

PIONEER NATIONAL TITLE INSURANCE COMPANY, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Cook County; the Hon. GEORGE J. SCHALLER, Judge, presiding.

MR. JUSTICE STAMOS DELIVERED THE OPINION OF THE COURT:

Plaintiffs, Robert F. Perrin, executor of the estate of Margaret F. Perrin, deceased, and Phillip Malvin, Recille Malvin, Raymond P. Logan, and Alicia P. Logan, appeal from the judgment of the circuit court of Cook County entered in favor of defendant, Pioneer National Title Insurance Company, upon allowance of defendant's motion to dismiss plaintiffs' amended complaint. The only issue is whether the amended complaint states a cause of action under section 2 of the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1977, ch. 121 1/2, par. 262).

Plaintiffs, suing individually and on behalf of a class of persons similarly situated, alleged in their amended complaint that plaintiffs Malvin and Perrin, as sellers of real estate, and plaintiffs Logan, as purchasers of real estate, purchased owner's title and mortgage insurance policies from defendant. Plaintiffs sought to represent a class of persons who either sold or bought real estate in Illinois from October 1, 1973 (the effective date of the amended act), to date; who ordered title reports and commitments for title and mortgage insurance policies from defendant in connection with the transactions; and who paid defendant in accordance with charges imposed by defendant for its services. Plaintiffs alleged that during the period in question, defendant made and published a schedule of customary charges for its title insurance services based upon the amount of title insurance involved in a particular transaction. However, during the same period defendant allegedly granted builders, developers, contractors, and others engaged in the business of real estate development (builders), substantial discounts, which discounts were disproportionate and unrelated to any purported economy or saving inuring to defendant by reason of obtaining the business of such builders. Plaintiffs alleged that the services obtained by plaintiffs were the same as or substantially similar to those obtained by builders, but the charges to plaintiffs were based upon the aforesaid customary schedule of charges and, as a result, were 300% to 400% higher. Plaintiffs alleged that "said discriminatory, unjust and oppressive practice engaged in by the defendant" constituted an unfair trade practice in violation of section 2 of the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1977, ch. 121 1/2, par. 262). Attached to plaintiffs' amended complaint were invoices from defendant reflecting "buyer's charges (customarily)" and "seller's charges (customarily)" in connection with the title services furnished to plaintiffs. Plaintiffs Malvin and Perrin paid the full amount of the customary seller's charges while plaintiffs Logan paid the full amount of the cutomary buyer's charges, all without knowing that these charges were substantially in excess of the charges made by defendant to builders for substantially similar services. Plaintiffs alleged that "as a consequence of such unfair, unreasonable and discriminatory pricing practices," the charges to plaintiffs for title insurance services "have been and are oppressive, unjust and extremely injurious" to plaintiffs' class, and they have sustained damage by being required to pay "inflated, unreasonable, unfair and unnecessarily excessive" prices for defendant's services. Plaintiffs requested injunctive relief, an accounting, and other relief.

In count II of their amended complaint (which restated what was the only claim in their original complaint), plaintiffs additionally alleged that defendant "intentionally concealed and suppressed such unfair trade practice" from plaintiffs' class, "and/or otherwise misrepresented * * * that the charges for defendant's services were based upon a customary schedule of charges which applied uniformly and proportionately to the services rendered by defendant to all customers of defendant, including `builders.'" The trial court dismissed plaintiffs' amended complaint with prejudice for failure to state a cause of action; plaintiffs have appealed.

Section 2 of the Consumer Fraud and Deceptive Business Practices Act, as amended by Pub. Act 78-904, § 1, effective Oct. 1, 1973, 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 mislead [sic] deceived or damaged thereby. In construing this section consideration shall be given to the interpretations of the Federal Trade Commission and the federal courts> relating to Section 5(a) of the Federal Trade Commission Act." (Ill. Rev. Stat. 1977, ch. 121 1/2, par. 262.)

Section 1(f) of the Act defines "trade" and "commerce" to include inter alia "the advertising, offering for sale, sale, or distribution of any services * * *" (Ill. Rev. Stat. 1977, ch. 121 1/2, par. 261(f)), while section 10a of the Act provides:

"Any person who suffers damage as a result of a violation of Sections 2 through 2N of this Act committed by any other person may bring an action against such person. The court, in its discretion may award actual damages or any other relief which the court deems proper." (Ill. Rev. Stat. 1977, ch. 121 1/2, par. 270a.)

Section 2 of the Uniform Deceptive Trade Practices Act, to which the above-quoted section 2 of the Consumer Fraud and Deceptive Business Practices Act refers, provides in pertinent part:

"A person engages in a deceptive trade practice when, in the course of his business, vocation or occupation, he:

(12) engages in any other conduct which similarly creates a likelihood of confusion or of misunderstanding." (Ill. Rev. Stat. 1977, ch. 121 1/2, par. 312(12).)

Finally, section 5(a) of the Federal Trade Commission Act provides in pertinent part:

"Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful." 15 U.S.C. § 45 (a)(1)(1976).

Plaintiffs' position on appeal may best be understood in the context of another case involving title services under the Consumer Fraud Act, Fitzgerald v. Chicago Title & Trust Co. (1977), 46 Ill. App.3d 526, 361 N.E.2d 94, aff'd (1978), 72 Ill.2d 179, 380 N.E.2d 790. In Fitzgerald, the plaintiffs were buyers and sellers of real estate who purchased title insurance from Chicago Title & Trust (CT&T) through the institutions which financed their transactions. CT&T submitted to the financing institutions invoices reflecting customary buyer's and seller's charges which did not disclose that CT&T paid "a rebate, discount or allowance" of 10% of the charges to the financing institutions, for which the plaintiffs, who paid the amounts shown on the invoices, were not ...


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