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06/02/89 William W. Warren Et Al., v. Donald J. Borger Et Al.

June 2, 1989

WILLIAM W. WARREN ET AL., D/B/A HICKORY SHORES RESORT, PLAINTIFFS AND APPELLANTS AND COUNTERDEFENDANTS AND CROSS-APPELLEES

v.

DONALD J. BORGER ET AL., DEFENDANTS-APPELLEES (EUGENE C. OCHS ET AL., COUNTERPLAINTIFFS AND CROSS-APPELLANTS)



APPELLATE COURT OF ILLINOIS, FIFTH DISTRICT

539 N.E.2d 1284, 184 Ill. App. 3d 38, 132 Ill. Dec. 478 1989.IL.836

Appeal from the Circuit Court of Clinton County; the Hon. Edward C. Eberspacher, Judge, presiding.

APPELLATE Judges:

PRESIDING JUSTICE WELCH delivered the opinion of the court. HARRISON and RARICK, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE WELCH

In this case of first impression, we are asked to construe section 2B of the Illinois Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1979, ch. 121 1/2, par. 262B). The appeal is brought by plaintiffs, William B. Warren and Halleck B. Warren, Jr., d/b/a Hickory Shores Resort, from summary judgments entered in the circuit court of Clinton County in favor of 31 different defendants in 16 different cases. Some of these cases were consolidated in the trial court; all have been consolidated for purposes of this appeal.

Also before us is a cross-appeal brought by defendants Eugene C. Ochs and Maria S. Ochs against plaintiffs, in which defendants argue that the contract of sale they entered into with plaintiffs violates the Federal Truth in Lending Act and Regulation Z thereunder. 15 U.S.C.S. § 1601 et seq. (Law. Co-op. 1982).

In the latter part of the 1970's, plaintiffs developed a camping resort near Carlyle Lake known as Hickory Shores Resort. The resort is not open to the public, but is restricted to members and their guests. In order to interest potential members in the resort, plaintiffs sent direct mail solicitations addressed to selected members of the general public, including defendants herein, inviting them to visit the resort for a guided tour. The mailing notified the recipients that they have definitely won a valuable prize which they will receive, along with a free gift, when they visit the resort.

Each of the defendants herein travelled to the resort and was given a guided tour of its facilities. During the tour, the guide explained to the defendants how they could purchase memberships in the resort. After the tour, each defendant entered into a contract to purchase a membership in the resort. In each case, the membership was purchased on an installment basis. The defendants were to make various installment payments at various rates of interest.

In each of the cases, defendants did not perform their payment obligations under the contracts and plaintiffs brought suit for breach of contract. The defendants filed motions for summary judgment, arguing that the sales of the resort memberships fell within the purview of section 2B of the Illinois Consumer Fraud and Deceptive Business Practices Act. (Ill. Rev. Stat. 1979, ch. 121 1/2, par. 262B.) That section provides that certain contracts may be rescinded by the purchaser within three business days of receipt of a "Notice of Cancellation" from the seller. As no such notices had been sent to defendants by plaintiffs, defendants sought rescission of the contracts. Plaintiffs have at all times maintained that section 2B does not apply to the sales in question.

The circuit court of Clinton County granted defendants' motions for summary judgment, finding that, although the language of section 2B is ambiguous, the sales here involved do fall within its purview. Relying on People v. Beaulieu Realtors, Inc. (1986), 144 Ill. App. 3d 580, 494 N.E.2d 504, the trial court found that the mailing here involved was a solicitation and not mere advertising. The court found that, to fall within the purview of section 2B, the sale must occur "as a result of or in connection with a salesman's direct contact with or call on the consumer at his residence." (Ill. Rev. Stat. 1979, ch. 121 1/2, par. 262B.) The court further found that the unrequested direct mail solicitations to defendants at their residences constituted such a "salesman's direct contact with or call on the consumer at his residence," and that the sales occurred as "a result of, or in connection" therewith.

A motion for summary judgment should be granted where there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. (American Buyers Club of Mt. Vernon, Illinois, Inc. v. Zuber (1978), 57 Ill. App. 3d 899, 900, 373 N.E.2d 786, 788.) In the instant case, there are no disputed questions of fact. Rather, the trial court was presented with a disputed question of law regarding the construction of a statute. Questions regarding the construction of a statute are properly resolved by the trial court as questions of law. (In re Estate of Pirie (1986), 141 Ill. App. 3d 750, 766, 492 N.E.2d 884, 894.) We may review the trial court's Disposition of a question of law independently of the trial court's judgment. (Illinois Valley Asphalt, Inc. v. La Salle National Bank (1977), 54 Ill. App. 3d 317, 320, 369 N.E.2d 525, 528.) We find that the trial court properly construed section 2B of the Consumer Fraud and Deceptive Business Practices Act and affirm the summary judgments entered in favor of defendants and against plaintiffs.

All of the sales contracts in issue were executed between February 2, 1980, and June 26, 1983. The statute in effect at that time provided:

"Where merchandise having a cash sales price of $25 or more is sold or contracted to be sold . . . to a consumer as a result of or in connection with a salesman's direct contact with or call on the consumer at his residence without the consumer's soliciting the contact or call, that consumer may avoid the contract or sale by notifying the seller within 3 full business days. . . . At the time the sale is made or the contract signed, the salesman shall furnish the buyer with a written receipt or contract containing a "Notice of Cancellation" informing the buyer that he may cancel the sale at any time within such 3 days. ...


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