APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. THE HONORABLE ODAS NICHOLSON, JUDGE PRESIDING.
Petition for Leave to Appeal Denied February 1, 1995. As Corrected April 28, 1995.
Cousins, Jr., Murray, Gordon
The opinion of the court was delivered by: Cousins
JUSTICE COUSINS, JR. delivered the opinion of the court:
Willie F. Taylor and Dwayne M. Taylor (plaintiffs) appeal a motion to dismiss their complaint against the Trans Acceptance Corporation and John Does 1-20 (defendants) alleging violations of Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 1992)) (CFA) and the Illinois Sales Finance Agency Act (205 ILCS 660/1 et seq. (West 1992)) (SFAA). The complaint alleged that an automobile retail installment contract, co-signed by plaintiffs as buyers and assigned to defendants, was a violation of Section 18 of the Motor Vehicle Retail Installment Sales Act (815 ILCS 375/1 et seq. (West 1992)) (MVRISA) which warranted redress under the CFA and SFAA. The trial court, relying on the Fourth District case of Magna Bank of McLean County v. Comer (1992), 232 Ill. App. 3d 300, 600 N.E.2d 855, held that MVRISA section 18 did not apply to plaintiffs' contract and granted defendants' motion to dismiss. Plaintiffs appeal, contending Comer was incorrectly decided and that their complaint was sufficient to state a cause of action.
The basis for plaintiffs' claim, MVRISA S.18, reads as follows:
"Each person, other than a seller or holder, who signs a retail installment contract may be held liable only to the extent that he actually receives the motor vehicle described or identified in the contract, except that a parent or spouse who co-signs such retail installment contract may be held liable to the full extent of the deferred payment price notwithstanding such parent or spouse has not actually received the motor vehicle described or identified in the contract and except to the extent such person other than a seller or holder, signs in the capacity of a guarantor of collection.
The obligation of such guarantor is secondary, and not primary. The obligation arises only after the seller or holder has diligently taken all ordinary legal means to collect the debt from the primary obligor, but has not received full payment from such primary obligor or obligors.
No provisions in a retail installment contract obligating such guarantor is valid unless:
(1) there appears below the signature space provided for such guarantor the following:
'I hereby guarantee the collection of the above described amount upon failure of the seller named herein to collect said amount from the buyer named herein.'; and
(2) unless the guarantor, in addition to signing the retail installment contract, signs a separate instrument in the following form:
'EXPLANATION OF GUARANTOR'S OBLIGATION You . . . (name of guarantor) by signing the retail installment contract and this document are agreeing that you will pay . . . (total deferred payment price) for the purchase of . . . (description of goods or services) purchased by . . . (name of buyer) from . . . (name of seller). Your obligation arises only after the seller or holder has attempted through the use of the court system to collect this amount from the buyer.
If the seller cannot collect this amount from the buyer, you will be obligated to pay even though you are not entitled to any of the goods or services furnished. The seller is entitled to sue you in court for the payment of the amount due.'
The instrument must be printed, typed, or otherwise reproduced in a size and style equal to at least 8 point bold type, may contain no other matter (except a union printing label) than above set forth and must bear the signature of the co-signer and no other person. The seller must give the co-signer a copy of the retail installment contract and a copy of the co-signer statement." 815 ILCS 375/18 (West 1992) (formerly Ill. Rev. Stat. 1991, ch. 121 1/2 par.578.)
Because plaintiffs' claims were dismissed on the pleadings, we must accept as true all well-pleaded facts in the complaint and all inferences that can reasonably be drawn from those facts. ( Meerbrey v. Marshall Field and Co., Inc. (1990), 139 Ill. 2d 455, 473, 564 N.E.2d 1222, 151 Ill. Dec. 560.) A complaint should not be dismissed for failure to state a claim unless it clearly appears that no set of facts could be proved under the allegations that would entitle the party to relief. Meerbrey, 139 Ill. 2d at 473, 564 N.E.2d 1222.
Applying these principles, we examine the facts as plaintiffs have pled them. On November 8, 1991, plaintiff Dwayne M. Taylor (D. Taylor) went to The Autobarn, Ltd. (Autobarn) to purchase a 1983 Saab. Autobarn undertook to finance the purchase through a retail installment contract to be assigned to defendant Trans Acceptance Corporation (TAC). Autobarn and TAC conducted a credit investigation on D. Taylor and requested a cosigner before extending credit to him.
D. Taylor's uncle, plaintiff Willie F. Taylor (W. Taylor), agreed to act as a cosigner. Plaintiffs informed Autobarn of the relationship between them, information which TAC also later obtained. Autobarn and TAC also conducted a credit check on W. Taylor, revealing that his address was different than that of his nephew. On November 8, 1991, D. Taylor and W. Taylor signed a retail installment contract (contract) as "Buyers" of the vehicle. Below the line for the second buyer's signature was the message: ...