APPEAL from the Circuit Court of McLean County; the Hon.
WILLIAM DeCARDY, Judge, presiding.
JUSTICE TRAPP DELIVERED THE OPINION OF THE COURT:
Rehearing denied June 7, 1982.
Plaintiff, Randy Wolford, appeals from an order of the trial court dismissing his two-count amended and supplemental complaint. The action involves a consumer credit transaction. Count I of the complaint was grounded on a theory of fraud, while count II alleged a violation of disclosure provisions of section 16 of the Illinois Consumer Installment Loan Act (Ill. Rev. Stat. 1979, ch. 74, par. 66). Two motions by the parties to strike portions of their respective briefs were ordered taken with the case.
Count I of the complaint alleged that prior to May of 1977, plaintiff delivered a note to defendant in the approximate amount of $4,100. From the date of delivery until May of 1977, plaintiff discharged all of his required obligations and at that time made a lump sum $1,000 payment on the note in consideration for which defendant released a mortgage on real estate owned by the plaintiff. In June of 1977, plaintiff alleges that an agent of defendant, J.M. Trzaska, called upon plaintiff to refinance the loan representing to plaintiff that he would pay less interest once the loan was refinanced. Plaintiff refinanced the note based on this representation.
Plaintiff then concludes that Trzaska's representation was false and fraudulent because defendant knew that by refinancing plaintiff would pay additional interest expense of $1,000 or more in excess of that which he would have paid had he continued to make payments under the first loan agreement. Plaintiff additionally alleged that this misrepresentation was knowingly and intentionally made and that he justifiably relied upon these misrepresentations to his detriment. Actual damages of $1,000 and punitive damages of $10,000 were prayed for.
Count II of the complaint alleges that defendant violated section 16 of the Illinois Consumer Installment Loan Act (CILA) (Ill. Rev. Stat. 1979, ch. 74, par. 66) by failing to clearly identify the property to which the security interests of defendant attached in the subsequent refinanced note. Plaintiff prayed for damages of $1,429.06 relying upon section 20(b) of CILA (Ill. Rev. Stat. 1979, ch. 74, par. 70).
Separate motions to dismiss the two counts of the complaint were allowed by the trial court and this appeal followed. The issue presented to this court is the sufficiency of the complaint to state a cause of action.
For a complaint to state a cause of action for fraud, it must be pleaded with specificity, particularity, and certainty. The elements which must be alleged include (1) that the party made a representation of material facts as opposed to opinion; (2) that the representation made was untrue; (3) that the party making the representation knew or believed the representation to be untrue; (4) the person to whom the representation was made had a right to rely on it and in fact did so; (5) that the representation was made for the purpose of inducing the other party to act, or to refrain from acting, upon it and; (6) that the representation made led to the injury to the person who relied upon it. (Goetz v. Avildsen Tool & Machines, Inc. (1980), 82 Ill. App.3d 1054, 403 N.E.2d 555; Lincolnland Properties, Inc. v. Butterworth Apartments, Inc. (1978), 65 Ill. App.3d 907, 382 N.E.2d 1250.) For purposes of review, defendant, by its motion to dismiss, admitted all facts well pleaded together with all reasonable inferences which can be drawn from those facts. (Denkewalter v. Wolberg (1980), 82 Ill. App.3d 569, 402 N.E.2d 885.) Nevertheless, such a motion does not admit conclusions of law or conclusions of fact unsupported by allegations of specific facts upon which such conclusions rest. Denkewalter.
• 1, 2 With these principles in mind we consider the adequacy of plaintiff's allegations of fraud. Although plaintiff makes numerous arguments suggesting that each of the aforementioned elements of a cause of action have been stated and defendant, likewise, raises numerous challenges to the sufficiency of the allegations on all material points, we are persuaded that the trial court properly granted the motion to dismiss count I of the complaint for failure to state any facts sufficient to raise a cause of action for fraud. The well-recognized rule is that the facts which constitute an alleged fraud must be pleaded with sufficient specificity, particularity and certainty to apprise the opposing party of what he was called upon to answer. (Pinelli v. Alpine Development Corp. (1979), 70 Ill. App.3d 980, 388 N.E.2d 943.) To properly allege a cause of action for fraud, the pleadings must contain specific allegations of facts from which fraud is the necessary or probable inference. (Pinelli; Wiersema v. Workman Plumbing, Heating & Cooling, Inc. (1980), 87 Ill. App.3d 535, 409 N.E.2d 159.) Under this standard, plaintiff's conclusory allegations of fraud were insufficient to allege a cause of action.
The only "facts" which count I of the complaint discloses are that prior to May 1977 plaintiff delivered a note to defendant, that he fulfilled the terms of the note until May of 1977 when he made a lump sum payment of $1,000 on the note in consideration for release of security, that defendant by its agent called upon plaintiff to refinance the note representing that plaintiff would pay less interest, and that plaintiff did so. There is nothing about these "facts" which would lead one to a conclusion that fraud is the necessary or probable inference.
Plaintiff argues, however, that his allegation that he would pay additional interest expense of $1,000 or more under the refinanced note is a "fact" which is sufficient to allow this case to proceed beyond the pleading stage. We disagree. The allegation concerning excess expense is merely conclusory. Plaintiff does not, for instance, set forth in the pleadings any specific monetary figures which represent his obligations under the original or the refinanced note. Without any delineation of plaintiff's obligations under the notes, it is impossible to reach a conclusion that any excess expense has been incurred, irrespective of its amount.
• 3 As an ancillary matter it should be noted that attached to the complaint, but not otherwise referred to in the body of count I of the complaint, are two notes which purport to be copies, or at least parts thereof, of the original and refinanced notes. While we point out that attachment without specific reference to the identified instrument in the body of the complaint is a violation of section 36 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 36; Camp Creek Duck Farm, Inc. v. Shell Oil Co. (1981), 103 Ill. App.3d 81, 430 N.E.2d 385), consideration of the attached notes effectively dispels plaintiff's contention concerning the additional finance charge. The original note indicates a total finance charge of $1,408.36. The subsequent refinanced note indicates a total finance charge of $714.53. The notes, themselves, belie plaintiff's claim that refinancing resulted in additional interest charges. Moreover, without any indication from plaintiff as to the amount of finance charges he had already paid under the original note, it is impossible for defendant to discern what it must respond to in the subsequent litigation.
We disagree with plaintiff's representation that the amount of excess interest is merely a question of evidence which either is, or is not, susceptible of proof at any later trial. The deficiency in the pleading does not relate to the amount of damages specified. Rather, it relates to the failure to state any facts supporting the legal conclusion that defendant's actions have resulted in a detriment to plaintiff, namely, that he has incurred excess interest expense, in any amount. Plaintiff has simply not set forth any facts which logically connect up his claim that defendant's suggested refinancing resulted in excess interest expense.
The problem is vividly demonstrated by consideration of certain computations present in both parties' briefs which are the subject of respective motions to strike. Included in defendant's brief as appendixes are a computation of finance charges, purportedly applying to the notes involved in this case; a Consumer Installment Loan Act actuarial formula for computing discount rates; and a letter to an agent of defendant from a supervisor at the Consumer Credit Division of the Department of ...