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04/28/97 LINDA MAJCHER v. LAUREL MOTORS

April 28, 1997

LINDA MAJCHER, PLAINTIFF-APPELLEE AND CROSS-APPELLANT,
v.
LAUREL MOTORS, INC.; ROBERT A. LANGER AND DIANA M. LANGER, INDIV., DEFENDANTS-APPELLANTS AND CROSS-APPELLEES (BEVERLY BANK, DEFENDANT-APPELLEE).



Appeal from the Circuit Court of Du Page County. No. 91--L--2297. Honorable Edward R. Duncan, Jr., Judge, Presiding.

Released for Publication May 28, 1997.

The Honorable Justice Inglis delivered the opinion of the court. Bowman and Rathje, JJ., concur.

The opinion of the court was delivered by: Inglis

The Honorable Justice INGLIS delivered the opinion of the court:

The facts of this case arose when plaintiff, Linda Majcher, purchased a car with a tampered odometer from defendant Laurel Motors, Inc. (Laurel). Plaintiff subsequently sued Laurel as well as the previous owners, defendants Robert and Diana Langer (Langers), and the financing institution, defendant Beverly Bank (Bank). Following a jury trial at which Laurel was found liable to plaintiff for damages of $7,754.48 and attorney fees and costs of $44,807.41, and the Langers were found liable to plaintiff for damages of $12,000 and attorney fees and costs of $32,876.41, Laurel and the Langers appealed. Plaintiff cross-appealed from the judgment of the trial court finding her contingent fee agreement to be unlawful. We affirm as modified.

BACKGROUND

The facts of this case, as opposed to the multitudinous legal arguments, are relatively straightforward. In August 1989, the Langers purchased a used Cadillac in Arizona for between $7,500 and $8,000. At the time of purchase, the odometer read over 80,000 miles. The Langers testified that, as they drove their car back to Illinois, they noticed that the odometer ticked and ran in reverse.

On December 27, 1989, the Langers sold the car to Laurel for $9,995 as a trade-in for the purchase of another vehicle. The Langers signed an odometer disclosure statement certifying that the odometer reading of 35,011 miles was accurate. Conflicting testimony was presented on this point. The Langers testified that they told Laurel that the odometer had been rolling back during their drive from Arizona; Laurel averred that it had no knowledge of the low odometer reading.

Plaintiff purchased the vehicle from Laurel on January 6, 1990. At that time, Laurel signed another odometer disclosure statement certifying that the odometer reading of 35,093 miles was accurate. Plaintiff purchased the car for a total of $10,197. Laurel assigned the approximately $7,500 loan to the Bank, and plaintiff thereafter made her car payments to the Bank.

After purchasing the car, plaintiff began to experience some problems which were not covered by the warranty. She investigated the title history of the car and learned that the odometer had been altered. She then sued Laurel, the Langers, and the Bank, seeking damages under a variety of theories.

In counts I through VI of her amended complaint, plaintiff sought damages from Laurel for breach of express and implied warranty under the Magnusson-Moss Act (counts I and II), revocation of acceptance of the contract (count III), consumer fraud (count IV), common-law fraud (count V), and violation of the federal Motor Vehicle Information and Cost Savings Act (15 U.S.C.A. ยง 1981 et seq. (West 1982)) (Federal Odometer Act) (count VI). Plaintiff sought damages from the Langers for violation of the Federal Odometer Act (count VII) and common-law fraud (count VIII). Finally, plaintiff sought to revoke the retail installment agreement against the Bank (count IX). Laurel filed a third-party action against the Langers under the Federal Odometer Act. The Bank cross claimed against Laurel, seeking revocation of the auto loan. Plaintiff continued to drive the car after this case was filed for another 39,500 miles.

Approximately nine months before trial, Laurel offered to settle the case for $10,000. Plaintiff refused the offer.

On November 4, 1994, after a jury trial, the following verdicts were entered: (1) a general verdict for plaintiff against Laurel for $750; (2) verdicts for plaintiff against Robert Langer for $6,000 based on statutory odometer fraud and $6,000 based on common-law fraud; (3) verdicts for plaintiff against Diana Langer for $6,000 based on statutory odometer fraud and $6,000 based on common-law fraud; and (4) a verdict for Laurel against the Langers for $6,000 based on statutory odometer fraud and $6,000 based on common-law fraud. Additionally, the court took plaintiff's consumer fraud claim (count IV) under advisement. The jury assessed no punitive damages in this matter.

On November 29, 1994, the trial court entered judgment for plaintiff and against Laurel based on plaintiff's consumer fraud claim, which rescinded plaintiff's purchase of the automobile and awarded plaintiff $7,754.58 in damages. The court further ordered the Bank to return to plaintiff the $5,154.78 she had paid on the auto loan and ordered Laurel to pay $9,483.93 to the Bank. The court also stated that if Laurel paid the amount to plaintiff, it would be in satisfaction of the judgment for the Bank and against Laurel.

Laurel filed a notice of appeal, but we dismissed the appeal on September 13, 1995, as premature because issues regarding attorney fees had not been settled in the trial court. Those issues were settled on January 18, 1996, when the trial court found that plaintiff's contingent fee agreement with her attorneys was unethical and violated the rules of professional conduct. Nevertheless, the court awarded plaintiff nearly $45,000 in attorney fees and costs against Laurel and nearly $33,000 in attorney fees and costs against the Langers pursuant to statute. Defendants' timely appeals followed.

ANALYSIS

[The following material is nonpublishable under Supreme Court Rule 23.]

[The preceding material is nonpublishable under Supreme Court Rule 23.]

I. Laurel Appeal

Turning to the merits of the various appeals, we will first consider the issues raised by Laurel on appeal. Laurel raises, in essence, five issues on appeal: (1) whether the doctrine of election of remedies operates to void the judgment under the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 1994)); (2) whether Laurel could be restored to its position status quo ante by rescinding the contract; (3) whether plaintiff will receive duplicative rescissionary damages; (4) whether the judgment in favor of Laurel and against the Langers should be modified to award Laurel its total damages; and (5) whether attorney fees were properly awarded to plaintiff.

A. Election of Remedies

In its first issue on appeal, Laurel argues that the judgment under the Consumer Fraud Act (815 ILCS 505/1 et seq. (West 1994)) should be vacated under the election of remedies doctrine because plaintiff elected to receive actual damages under her common-law fraud claims. According to Laurel, plaintiff's choice to enter judgment on her fraud claims represents an affirmance of the contract which bars plaintiff from accepting rescissionary damages later. Laurel believes that the judgment on plaintiff's fraud claims entered on November 4, 1994, is separate from the judgment on plaintiff's Consumer Fraud Act claims entered on November 29, 1994. Laurel further contends that the November 4 judgment represents actual damages in affirmance of the contract and that the November 29 judgment represents rescissionary damages in disaffirmance of the contract. Accordingly, Laurel contends that the election of remedies doctrine bars plaintiff from collecting damages on both judgments. While we acknowledge that plaintiff may not receive a double recovery, we disagree with Laurel's contentions.

We first provide an overview of the doctrine of election of remedies.

"The doctrine of election of remedies is applicable where a party has elected inconsistent remedies for the same injury or cause of action. [Citations.] The prosecution of one remedial right to judgment or decree constitutes an election barring subsequent prosecution of inconsistent remedial rights. [Citations.] For instance, a remedy based on the affirmance of a contract (e.g., damages) is generally inconsistent with one based on the disaffirmance of the contract (e.g., rescission). [Citations.] Thus, the election of either remedy is an abandonment of the other." Lempa v. Finkel, 278 Ill. App. 3d 417, 423-24, 215 Ill. Dec. 408, 663 N.E.2d 158 (1996).

Laurel's argument, that the order of November 29, 1994, represents a separate and subsequent action to the order of November 4, 1994, simply misses the mark.

The order of November 4, 1994, stated that the trial court took "the cause of action brought by [plaintiff] against [Laurel] pursuant to the Illinois Consumer Fraud Act" under advisement. The November 29, 1994, order renders the trial court's judgment arising from the trial which concluded on November 4, 1994. The November 29, 1994, order does not, therefore, represent a "subsequent prosecution of inconsistent remedial rights" ( Lempa, 278 Ill. App. 3d at 424); rather, the order is simply the final resolution of the combined bench and jury trial begun earlier. Thus, there is no subsequent prosecution of an inconsistent remedial right. Accordingly, for this reason, the doctrine of election of remedies is not applicable to the case before us.

The cases relied upon by Laurel are distinguishable. Laurel offers Lempa as the latest case stating the well-settled proposition that the "prosecution of one remedial right to judgment or decree constitutes an election barring subsequent prosecution of inconsistent remedial rights." Lempa, 278 Ill. App. 3d at 424. While this is an accurate statement of the law, the particular facts of Lempa do not provide support for its application to the facts of our case. In Lempa, a previous action rescinded a building lease between the parties. Four months later another action was instituted in which the former leaseholder sought to recover damages for breach of the lease. Lempa, 278 Ill. App. 3d at 421. The court concluded that the action sought relief based on the breach of the rescinded lease and that the damages were compensatory not rescissionary. The second action was therefore precluded by the doctrine of election of remedies. Lempa, 278 Ill. App. 3d at 427. Here, there is no "subsequent prosecution" of an inconsistent action, nor is there a prior award of inconsistent damages. Thus, Lempa, and its progenitors, are inapposite.

Laurel next asserts that the general verdict for $750 and the verdicts against the Langers are damages in affirmance of the contract and that the consumer fraud verdict for $7,754.48 is for rescissionary damages. According to Laurel, these are inconsistent and barred by the election of remedies doctrine. We disagree.

Plaintiff asserts that she sought rescission of the contract in all of the counts of her amended complaint. While not strictly true, we note that the $750 verdict was a general verdict covering plaintiff's fraud, revocation, and implied warranty claims. "The return of a general verdict creates a presumption that all issues of fact upon which proof was offered were found in favor of the prevailing party." Klingler Farms, Inc. v. Effingham Equity, Inc., 171 Ill. App. 3d 567, 572, 121 Ill. Dec. 865, 525 N.E.2d 1172 (1988). We cannot say that the jury rejected one or more of plaintiff's claims in rendering its general verdict. Moreover, we are unpersuaded by Laurel's analysis that the amount of the general verdict is unrelated to the damages for revocation of acceptance as the amount of the verdict is within the discretion of the jury. Urban v. Zeigler, 261 Ill. App. 3d 1099, 1102, 199 Ill. Dec. 883, 634 N.E.2d 1237 (1994). Additionally, we note that no challenge to the propriety of the amount of the general verdict has been raised.

Laurel's resort to the verdict against the Langers is similarly unpersuasive. The jury found the Langers liable for $6,000 on plaintiff's common-law fraud claim. The amount of a verdict is within the jury's discretion, and we will not indulge in speculation about the jury's intent in choosing this amount. Accordingly, we cannot say that the verdicts in this case are inconsistent.

B. Status Quo

Laurel's second issue on appeal is that the rescission of the purchase contract failed to restore it to the position it occupied before the contract. Specifically, Laurel contends that it was entitled to the car if it had to refund plaintiff's purchase price. Laurel asserts, however, that plaintiff continued to drive the car until it was worthless, and the return of the car cannot restore it to its position before the contract. Laurel thus argues that it is entitled either to vacate the rescission award or to modify it to reflect the benefit plaintiff derived from her continued use of the car.

The remedy of rescission requires the cancellation of the contract and the restoration of the parties to their status before contracting. Felde v. Chrysler Credit Corp., 219 Ill. App. 3d 530, 542, 162 Ill. Dec. 565, 580 N.E.2d 191 (1991). Not only must any consideration or property received by the rescinding party be returned, but the rescinding party must also account for any benefits it received from the other party under the contract. Puskar v. Hughes, 179 Ill. App. 3d 522, 528, 127 Ill. Dec. 880, 533 N.E.2d 962 (1989).

Laurel's argument boils down to a contention that it is due a setoff for the benefit plaintiff derived from driving the car nearly 39,500 miles after she purchased it. Laurel contends that, while it had to return plaintiff's payments on the car, the trial court erred by failing to award it a ...


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