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December 22, 1995


Appeal from the Circuit Court of Cook County. Honorable Thomas J. O'Brien, Judge Presiding.

Petition for Leave to Appeal Allowed April 3, 1996.

The Honorable Justice Zwick delivered the opinion of the court: Rakowski, J., concurs. Justice Egan dissenting:

The opinion of the court was delivered by: Zwick

The Honorable Justice ZWICK delivered the opinion of the court:

Appellants Rodney Lee and Edelmira Rivera sought compensatory and statutory damages pursuant to the terms of the Illinois Consumer Fraud and Deceptive Practices Act (815 ILCS 505/2, 2E, 2F (West 1992)) and the Illinois Sales Finance Agency Act (205 ILCS 660/16 (West 1992)). Appellants based their claims principally upon alleged violations by appellees Nationwide Cassel, L.P. (Cassel), Nationwide Acceptance Corp. and N.A.C. Management Corp. of section 18 of the of the Illinois Motor Vehicle Retail Installment Sales Act (the Act), 815 ILCS 375/18 (West 1992). Appellants claimed that appellees participated in a scheme designed to misrepresent the extent of liability of certain consumers who sign motor vehicle retail installment sales contracts. The trial court dismissed appellants' claims on the pleadings. We now reverse.

The issue presented is whether the trial court properly dismissed appellants' pleadings under the terms of section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 1992)). In dismissing appellants' claims, the trial court made three findings: (1) dismissal was the only course of action consistent with Magna Bank of McLean County v. Comer (1992), 274 Ill. App. 3d 788, 600 N.E.2d 855, 175 Ill. Dec. 612; (2) appellants' signatures on loan documents indicating that they had taken delivery of the vehicles at issue was conclusive as to the question of whether the appellants had "actually received" the vehicles; and (3) appellants' complaints failed to allege fraud with sufficient particularity to state a claim under the Consumer Fraud and Deceptive Practices Act. We review each of these findings.

Because their claims were dismissed on the pleadings, we accept as true all well-pleaded facts and all inferences that can reasonably be drawn from those facts. ( Meerbrey v. Marshall Field and Co. (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 474.) The standard of review on appeal from a motion to dismiss is whether the complaint sufficiently states a cause of action; we do not consider the merits of the claim. Commerce Bank N.A. v. Plotkin (1994), 255 Ill. App. 3d 870, 627 N.E.2d 746, 194 Ill. Dec. 409.

In August 1991, Denis Davis sought to purchase a vehicle from Tower Oldsmobile, Inc. (Tower). Tower obtained a credit application from Davis, which revealed Davis' age, his mother's name and address, and the fact that Davis lived with a roommate. Tower forwarded the application to Cassel, a finance company. Cassel ordered a credit report regarding Davis. Cassel examined Davis' credit and rejected his application. As a result, Davis was asked by Tower to furnish a "co-signer" as a condition of the sale.

Davis secured Lee, his roommate, to act as co-signer to the loan contract. Davis took Lee to Tower where Tower took credit information from Lee. At the top of the application filled out by Davis and Lee are hand written notes that the credit application concerns a "cosigner for Davis." Tower informed Davis and Lee that they would have to return in order to complete the loan documents after Lee's job and credit were verified. This application was then forwarded to Cassel.

Cassel ordered a credit report on Lee. As a result of reviewing the credit reports for both Lee and Davis, Cassel learned that Davis and Lee were not related to one another. Cassel's records refer to Lee as a "cosigner" or "co-maker." Cassel's records also indicate that Lee was Davis' roommate. Cassel's policy was to review the credit of parties to a retail installment contract and then direct dealers as to how the documents involved in the transaction were to be completed.

The retail installment contract signed by Davis and Lee is a printed form with the name "Nationwide Cassel L.P." inserted in advance. Cassel approved the form prior to its use by Tower. Davis and Lee each signed the contract and Cassel subsequently approved the transaction with Lee listed as a "buyer." Davis thereafter drove the vehicle from Tower's lot. Lee has never driven the vehicle and has only been in the vehicle twice, both times as a passenger.

Immediately after the contract was executed by Davis and Lee, it was assigned to Cassel. Subsequently, Cassel claimed that Davis had defaulted on the contract. Without instituting legal proceedings against Davis, Cassel attempted to enforce a wage assignment against Lee and threatened to file suit against him.

The pleadings in Rivera's case present similar facts. In June 1991, Rommel Gonzalez sought to purchase a vehicle from Olympic Hyundai. Olympic asked Gonzalez to furnish a co-signer because of Gonzalez' insufficient credit rating. Gonzalez convinced Rivera to act as co-signer.

Cassel conducted a credit investigation of Gonzalez and Rivera, as a result of which it acquired actual knowledge that Gonzalez and Rivera were not married to one another and that Rivera is not the parent of Gonzalez. Cassel was also aware that Rivera was going to act as co-signer or co-maker of the loan to Gonzalez. Nationwide's Statement of Financial Responsibility lists Rivera as a "co-maker" in two separate places, and its form letter requesting employment information for the applicant has an authorization section in which Rivera signed on the line for "Joint Applicant or Other Party." On the Agreement to Provide Accidental Physical Damage Insurance, both Gonzalez and Rivera are listed as a "Named purchaser[s]," but only Gonzalez was required to sign the document as the "Named Insured." Finally, on a form titled "Contract Supplement" which is to "be completed and submitted with the retail installment contract before purchase can be effected," Gonzalez is singly listed as the "customer."

Both appellants claimed that the automobile dealerships, in conjunction with the finance companies to whom they assigned their rights, requested they sign installment contracts as "buyers" when, in fact, they knew that section 18 of the Act precluded the appellants from having primary liability because neither would take actual receipt of the vehicles. Appellants claim that, because appellees knew they would not make actual use of the vehicles, the request that appellants sign the ...

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