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ABT v. MAZDA AMERICAN CREDIT

October 28, 1998

ELLIOT ABT, individually and on behalf of all others similarly situated, Plaintiff,
v.
MAZDA AMERICAN CREDIT and NORTH SHORE, INC., d/b/a HIGHLAND PARK MAZDA, individually and on behalf of all others similarly situated, Defendants.



The opinion of the court was delivered by: GETTLEMAN

MEMORANDUM OPINION AND ORDER

 Plaintiff Elliot Abt, individually and on behalf of all others similarly situated, has filed a three count putative class action amended complaint against defendants Mazda American Credit ("Mazda Credit") and North Shore, Inc., d/b/a Highland Park Mazda ("Highland Park"). In Count I, plaintiff alleges that Mazda Credit and Highland Park breached a car Lease Agreement by failing to return the security deposit in full. In Count II, plaintiff alleges that Mazda Credit and Highland Park's disclosure of "Total of Other Charges" - "$ 0.00" on the front of the Lease Agreement and "a disposition fee of $ 350.00" on the back of the Lease Agreement violated the Consumer Leasing Act of 1994, 15 U.S.C. § 1667 et seq., as implemented by Federal Reserve board Regulation M, 12 C.F.R. § 213. In Count III, plaintiff alleges that Mazda Credit violated Section 2 of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2 et seq., by preparing, executing and enforcing a deceptive Lease Agreement. Mazda Credit has moved to dismiss the entire complaint pursuant to Fed. R. Civ. 12(b)(6) for failure to state a claim. Highland Park has moved to dismiss Counts I and II of the amended complaint for the same reason. For the following reasons, the motions are granted in part and denied in part.

 BACKGROUND

 On February 28, 1994, plaintiff leased a Mazda automobile from Highland Park. Highland Park offers financing to its customers by assigning its contracts to Mazda Credit, a financing corporation. Highland Park provided lease financing to plaintiff by completing Mazda Credit's standard form lease agreement (the "Lease Agreement") and assigning the lease contract to Mazda Credit. Paragraph 9 and paragraph 20 of the Lease Agreement, the two provisions at issue, provide:

 
(9) Total of Other Charges Payable to Lessor

  (a) N/A $ 0.00 (b) N/A $ 0.00 $ 0.00

 (20) Termination: This Lease shall terminate upon (i) the end of the term of this Lease, (ii) the return of the Vehicle to the Lessor and (iii) the payment by the Lessee of all amounts owed under this Lease, (iv) including a disposition fee of $ 350.00. The Lessor may terminate this Lease if the Lessee defaults under this Lease.

 At the end of the lease term, on or about March 1997, plaintiff returned the automobile to Highland Park and requested the return of the $ 400 security deposit that he initially paid. Highland Park tendered $ 50 to plaintiff and withheld $ 350 as a disposition fee pursuant to paragraph 20 on the back of the Lease Agreement. Plaintiff contends that the disposition fee is an "other charge," and because the listed "Total of Other Charges" is $ 0.00 the disposition fee should be $ 0.00. Plaintiff further alleges that the disposition fee provision in paragraph 20 is misleading and deceptive, and thus unenforceable, because it was hidden in the back page of the Lease Agreement, within boilerplate language.

 DISCUSSION

 1. Standard for a Motion to Dismiss

 A motion to dismiss for failure to state a claim may be granted only if it appears beyond doubt that plaintiff is unable to prove any set of facts that would entitle him to relief. Hartford Fire Ins. Co. v. California, 509 U.S. 764, 811, 113 S. Ct. 2891, 125 L. Ed. 2d 612 (1993). In reviewing a motion to dismiss, the court tests the sufficiency of the complaint, not the merits of the case. Triad Assoc., Inc. v. Chicago Hous. Auth., 892 F.2d 583, 586 (7th Cit. 1998).

 II. Breach of Contract

 Where facts are undisputed, the interpretation of a contract is question of law. Lewis-Connelly v. Board of Educ. of Deerfield Pub. Sch., 277 Ill. App. 3d 554, 557, 660 N.E.2d 283, 285, 214 Ill. Dec. 92, 94 (Ill. App. Ct. 1996). When interpreting a contract, "a court must first decide, as matter of law, whether the language of the contract is ambiguous." Pepper Constr. Co. v. Transcontinental Ins. Co., 285 Ill. App. 3d 573, 575, 673 N.E.2d 1128, 1130, 220 Ill. Dec. 707 (Ill. App. Ct. 1996). The mere fact that parties allege conflicting interpretations of the contract is not sufficient in itself to show an ambiguity. Omnitrus Merging Corp. v. Illinois Tool Works, Inc., 256 Ill. App. 3d 31, 37, 628 N.E.2d 1165, 1170, 195 Ill. Dec. 701, 706 (Ill. App. Ct. 1993). A contract is ambiguous where the language used is susceptible to more than one reasonable meaning. Meyer v. Marilyn Miglin, Inc., 273 Ill. App. 3d 882, 888, 210 Ill. Dec. 257, 652 N.E.2d 1233 (Ill. App. Ct. 1995). If, however, the contract is susceptible to only one meaning, the court may interpret the contract without considering extrinsic evidence. Countryman v. Industrial Comm'n, 292 Ill. App. 3d 738, 741, 686 N.E.2d 61, 64, 226 Ill. Dec. 712, 715 (Ill. App. Ct. 1997) (citing Schneider v. Neubert, 308 Ill. 40, 43-44, 139 N.E. 84 (1923)).

 The issue here is whether the term "Other Charges" in paragraph 9 should be interpreted to include the disposition fee. Plaintiff alleges that it should, and that the "Total of Other Charges" listed as $ 0.00 implies that the disposition fee is $ 0.00. According to plaintiff, paragraph 9 should take precedent over paragraph 20 (which lists the disposition fee) because: (1) the typed amount in paragraph 9 should control the printed amount in paragraph 20; (2) the language of both paragraphs is specific, and therefore paragraph 20 cannot control paragraph 9 under the "general/specific" rule of contract construction; and (3) the ambiguous contract should be construed against the drafter. Defendants argue that both paragraphs are exclusive and non-contradictory because the disposition fee is not an "other charge." Therefore, they contend that they did not breach the contract when they enforced the disposition fee ...


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