silence as a representation that the fact did not exist." Stewart, 242 Ill. App. 3d at 16, 610 N.E.2d at 804. Lefebvre does not allege that it could not have learned about the past problems with another Sanden printing press sold to another customer by making a reasonable inquiry of Sanden or Sanden's customers. Lefebvre does not allege that it asked Sanden whether the type of printing press that Lefebvre was considering purchasing had experienced any problems in the past, or that it asked Sanden for names of other customers who had purchased the same or a similar type of printing press so that Lefebvre could contact those customers for references. In short, Lefebvre's complaint contains no allegations indicating that Lefebvre took any steps to make a reasonable inquiry about Sanden or its printing presses, or that Sanden prevented it from making such an inquiry.
Accordingly, Lefebvre has failed to state a claim for fraudulent misrepresentation based on Sanden's alleged concealment of past problems with another printing press sold to another customer.
D. Count V -- Violation of the Illinois Consumer Fraud Act
Sanden next contends that Lefebvre fails to state a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act ("Consumer Fraud Act"), 815 ILCS 505/1 - 505/12, because it has failed to allege the necessary nexus between Sanden's allegedly deceptive practices and the concerns implicated by the Consumer Fraud Act. Sanden asserts that the test for standing in a consumer fraud action between two businesses is whether the seller's conduct implicates consumer protection concerns or is addressed to the market generally, and that Lefebvre has not alleged either of these requisites.
Lefebvre counters that the Consumer Fraud Act was amended in 1990 to eliminate the requirement that the plaintiff allege and show an effect on consumers generally, and therefore that Lefebvre need not allege that Sanden's practices affected consumers or the market generally. Lefebvre also argues that Sanden ignores the fact that Lefebvre is a consumer of Sanden's products, and that the tests cited by Sanden apply only where businesses are not consumers of each other's products.
Lefebvre is correct that the 1990 amendment to the Consumer Fraud Act dispensed with any requirement previously imposed by the courts that a plaintiff prove a public injury, a pattern, or an effect on consumers generally to maintain an action under the Consumer Fraud Act. See Lake County Grading Co. of Libertyville, Inc. v. Advance Mechanical Contractors, Inc., 275 Ill. App. 3d 452, 458-59, 654 N.E.2d 1109, 1115, 211 Ill. Dec. 299 (2d Dist. 1995) (citing 815 ILCS 505/10A). Thus, Sanden's reliance on Neumann v. John Hancock Mut. Life Ins. Co., 736 F. Supp. 182 (N.D. Ill. 1990), is misplaced, because that case pre-dates the 1990 amendment to the Consumer Fraud Act and is inconsistent with the amendment and subsequent cases discussing the amendment.
Illinois' Consumer Fraud Act "is primarily concerned with protecting consumers." Web Communications Group, Inc. v. Gateway 2000, Inc., 889 F. Supp. 316, 323 (N.D. Ill. 1995). Nonetheless, businesses may have standing to bring actions under the Consumer Fraud Act. Id. (citing 815 ILCS 505/1(c); Pain Prevention Lab, Inc. v. Electronic Waveform Labs, Inc., 657 F. Supp. 1486, 1493 (N.D. Ill. 1987)). The proper test to determine whether a business has standing to bring a Consumer Fraud Act action against another business depends upon whether the business is a consumer of the other business's product and the nature of the case.
"Where a dispute involves two businesses that are not consumers, the proper test is 'whether the alleged conduct involves trade practices addressed to the market generally or otherwise implicates consumer protection concerns.'" Lake County Grading, 275 Ill. App. 3d at 458, 654 N.E.2d at 1115 (quoting Downers Grove Volkswagen, Inc. v. Wigglesworth Imports, Inc., 190 Ill. App. 3d 524, 534, 546 N.E.2d 33, 41, 137 Ill. Dec. 409 (2d Dist. 1989)). By its very terms, this test applies only to a Consumer Fraud Act action by a business that is not a consumer of the other business's products. However, the two federal district court cases relied upon most heavily by Sanden fail to note this important limitation, and state simply that "'the test for standing is whether "the alleged conduct involves trade practices addressed to the market generally or otherwise implicates consumer protection concerns."'" Web Communications, 889 F. Supp. at 323 (quoting Gadson v. Newman, 807 F. Supp. 1412, 1421 (C.D. Ill. 1992) (quoting Downers Grove, 190 Ill. App. 3d at 534, 546 N.E.2d at 41)); Industrial Specialty Chemicals, Inc. v. Cummins Engine Co., Inc., 902 F. Supp. 805, 812 (N.D. Ill. 1995) (quoting Gadson, 807 F. Supp. at 1421 (quoting Downers Grove, 190 Ill. App. 3d at 534, 546 N.E.2d at 41; Zinser v. Rose, 245 Ill. App. 3d 881, 886, 614 N.E.2d 1259, 1263, 185 Ill. Dec. 574 (3d Dist. 1993))). Compare CTS Corp. v. Raytheon Co., 1993 U.S. Dist. LEXIS 6442, No. 92 C 3878, 1993 WL 157464, *2-4 (N.D. Ill. May 12, 1993) (recognizing that the test applies only to non-consumer businesses).
Despite not expressly noting the limitation that the test applies only to non-consumer businesses, Web Communications and Industrial Specialty both involved businesses that did not have a consumer-seller relationship. Rather, in each case, the plaintiff had desired to provide a product to the defendant but never consummated the consumer-seller relationship. See Web Communications, 889 F. Supp. at 318; Industrial Specialty, 902 F. Supp. at 807-08.
In the present case, in contrast, Lefebvre's allegations make clear that Lefebvre is a consumer of Sanden's product, the printing press. That is, Lefebvre "purchased or contracted for the purchase of merchandise not for resale in the ordinary course of [its] trade or business but for [its own] use." 815 ILCS 5/1(e). Thus, Web Communications and Industrial Specialty have no bearing on the present case except to highlight the differences between those cases and the present one.
Consequently, the court finds that Lefebvre was not required to allege that Sanden's trade practices affected the market generally or otherwise implicated consumer protection concerns. Even so, because Lefebvre alleges facts indicating that it was a consumer of Sanden's and that Sanden engaged in deceptive practices in the sale of its printing press to Lefebvre, the court finds that Lefebvre has adequately alleged that Sanden's trade practices implicated consumer protection concerns.
The court notes that Sanden is correct that the Consumer Fraud Act does not apply to every breach of contract between two parties, even with the 1990 amendment allowing plaintiffs to recover damages without showing an effect on consumers generally. See Lake County Grading, 275 Ill. App. 3d at 459, 654 N.E.2d at 1115-16. Thus, "where a plaintiff attempts to allege a violation of the [Consumer Fraud Act] in a case which appears on its face to involve only a breach of contract, the relevant inquiry is 'whether the alleged conduct ... implicates consumer protection concerns.'" Lake County Grading, 275 Ill. App. 3d at 459, 654 N.E.2d at 1116 (quoting Downers Grove, 190 Ill. App. 3d at 534, 546 N.E.2d at 41). However, as the court has noted, Lefebvre has alleged that it was a consumer of Sanden's, and that Sanden engaged in deceptive practices to entice Lefebvre to buy Sanden's product. Therefore, Lefebvre has alleged conduct on the part of Sanden that implicates consumer protection concerns.
The court also notes that its conclusion that Lefebvre has alleged a Consumer Fraud Act claim is not inconsistent with its earlier holding that Lefebvre has failed to state a claim for fraudulent misrepresentation. A plaintiff suing under the Consumer Fraud Act need not allege all of the elements of fraudulent misrepresentation, because the Consumer Fraud Act prohibits any deception or false promise. First Security Bank of Glendale Heights v. Bachleda, 165 Ill. App. 3d 725, 731, 520 N.E.2d 660, 664, 117 Ill. Dec. 309 (1st Dist. 1987). The Consumer Fraud Act makes actionable a false promise or omission of material fact. See 815 ILCS 505/2.
The court has found that Sanden's statements that its printing press could produce commercially acceptable four color process work were essentially promises, and Lefebvre's complaint alleges that the statements were false. Thus, according to Lefebvre's complaint, Sanden made false promises to Lefebvre. In addition, while the court has found that Lefebvre's complaint does not adequately allege that Sanden actively concealed the past problems with another printing press sold to another customer, the complaint alleges that Sanden failed to inform Lefebvre of the material fact of the past problems. Thus, the complaint sufficiently alleges an omission of material fact.
Accordingly, Lefebvre has stated a claim for violation of the Consumer Fraud Act.
E. Claim for consequential damages
Sanden seeks dismissal of Lefebvre's claims for lost profits and other consequential damages. Sanden contends that the purchase contract contains an unambiguous waiver of such damages. Lefebvre counters that the waiver provision is unconscionable, and therefore should not be enforced.
The UCC allows contracting parties to limit their contractual remedies. Section 2-719 provides:
Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.
810 ILCS 5/2-719(3).
In the present case, the purchase contract between Sanden and Lefebvre excluded consequential damages. The contract provided: "Seller will at no time be liable for any losses sustained by purchaser due to shortages of operating materials or supplies, or for consequent damages such as loss of anticipated profits, loss of production, or increased cost of operation." (Compl. Ex. 2 App. A P 9.)
Sanden contends that because Lefebvre agreed to waive its right to consequential damages, any claims by Lefebvre to consequential damages must be dismissed. Lefebvre counters that it should not be bound by the consequential damages exclusion because the express warranty in the contract failed of its essential purpose and is unconscionable because of Sanden's misrepresentations.
Lefebvre argues that section 2-719(3) must be read in conjunction with section 2-719(2), which provides: "Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this Act." 810 ILCS 5/2-719(2). Lefebvre correctly points out that a contractual provision limiting the remedy to repair or replacement of defective parts fails of its essential purpose within the meaning of section 2-719(2) if the breaching manufacturer or seller is unable to make the necessary repairs within a reasonable time. See Interlake Packaging Corp. v. Strapex Corp., 842 F. Supp. 304, 307 (N.D. Ill. 1993). Moreover, it is irrelevant whether the seller's failure was willful or not. See id. at 307 n.6. (citing Custom Automated Machinery v. Penda Corp., 537 F. Supp. 77, 83 (N.D. Ill. 1982); AES Technology Systems, Inc. v. Coherent Radiation, 583 F.2d 933, 939 (7th Cir. 1978)). Lefebvre contends that its complaint sufficiently alleges that Sanden's repeated attempts to repair the printing press have failed, and therefore that the express warranty has failed of its essential purpose.
If the contract contained only an express warranty limiting Lefebvre's remedies to repair and replacement, and did not contain an explicit limitation of consequential damages, Lefebvre would be correct. However, under Seventh Circuit precedent, failure of the essential purpose of the limited remedy does not necessarily mean that the court also should disregard another provision excluding consequential damages. See Smith v. Navistar Int'l Transp. Corp., 957 F.2d 1439, 1443 (7th Cir. 1992).
The court in Smith noted that in AES Technology Systems, Inc. v. Coherent Radiation, 583 F.2d 933 (7th Cir. 1988), it had "refused to automatically sever a consequential damage disclaimer from a contract merely on the failure of a limited warranty to provide the benefits that the parties bargained for," stating:
" Some courts have awarded consequential damages, when a remedy failed of its essential purpose, in the face of prohibitions in the contract against consequential damages.... However, we reject the contention that failure of the essential purpose of the limited remedy automatically means that a damage award will include consequential damages. An analysis to determine whether consequential damages are warranted must carefully examine the individual fact situation[,] including the type of goods involved, the parties and the precise nature and purpose of the contract. The purpose of the courts in contractual disputes is not to re-write contracts by ignoring parties' intent; rather, it is to interpret the existing contract as fairly as possible when all events did not occur as planned."