Appeal from the Circuit Court of Du Page County. No. 99--L--357 Honorable Edward R. Duncan, Jr., Judge, Presiding.
The opinion of the court was delivered by: Justice Inglis
Plaintiff, Susanne L. Valentino, appeals the judgment of the circuit court of Du Page County granting the motion of defendant First Bank, a/k/a First Bank/U.S. Bank (defendant), to dismiss counts VII and VIII of plaintiff's complaint. We affirm.
In February 1998, plaintiff purchased a 1996 Nissan Maxima from Glendale Nissan, Inc. Plaintiff signed a retail installment agreement to finance the purchase. The agreement was assigned to defendant. Under the terms of the agreement, defendant was granted a purchase-money security interest in the car. The retail installment agreement contained the following provisions:
"SECURITY INTERESTS: Seller is granted a purchase-money security interest in the motor vehicle described above and all accessions under the Illinois Uniform Commercial Code until the Total of Payments and all future indebtedness for taxes, liens, repairs and insurance premiums advanced by holder hereunder are paid in full. Security: You are giving a security interest in the goods being purchased and in any moneys, credits or other property of yours in the possession of the Assignee, on deposit or otherwise. Upon the occurrence of any event of default, the holder of this contract shall have the rights and remedies provided by Article 9 of the Illinois Uniform Commercial Code including, but not by way of limitation, the rights of the holder (a) to take immediate possession of the motor vehicle, with or without judicial process, and for such purpose, to enter upon the premises where it may be located."
We note that a copy of the certificate of title is not part of the record on appeal. Defendant claims that it perfected its lien in accordance with the requirements of the Illinois Vehicle Code (625 ILCS 5/3--202 (West 1998)) and is named as the first lienholder on the certificate of title. Plaintiff does not dispute this fact.
In December 1998, plaintiff's counsel sent correspondence to Glendale Nissan, Nissan Motor Corporation, and defendant informing them that Glendale Nissan may have violated the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 1998)). The letter reaffirmed plaintiff's previous revocation of acceptance and informed defendant that she would cease making payments on the retail installment contract. Shortly thereafter, plaintiff ceased paying her monthly installment payments to defendant, and on March 10, 1999, defendant repossessed the car.
Plaintiff filed a complaint on March 31, 1999, against the dealer, manufacturer, and defendant for breach of warranty, revocation of acceptance, cancellation of the retail installment contract, fraud, and consumer fraud. Relevant to this case, counts VII and VIII alleged conversion and a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act solely against defendant.
Defendant filed a motion to dismiss counts VII and VIII pursuant to section 2--619 of the Code of Civil Procedure (735 ILCS 5/2--619 (West 1998)). Defendant argued that by failing to make the required monthly installment payments plaintiff was in default under the contract and defendant had the right to repossess the car pursuant to the terms of the contract and Article 9 of the Uniform Commercial Code-Secured Transactions (810 ILCS 5/9--101 et seq. (West 1998)). Defendant also argued that, under the terms of the contract and Article 9, it possessed a purchase-money security interest that is superior to the security interest claimed by plaintiff. Because defendant had the right to repossess the car, defendant argued that there could be no claim for conversion or a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The trial court agreed and granted defendant's section 2--619 motion to dismiss counts VII and VIII of plaintiff's complaint. Plaintiff timely appeals.
The purpose of a section 2--619 motion to dismiss is to afford litigants a means to dispose of issues of law and easily proved issues of fact at the outset of a case, reserving disputed questions of fact for a jury trial. Petty v. Crowell, 306 Ill. App. 3d 774, 775 (1999). In addressing a section 2--619 motion, a court takes all well-pleaded facts in the complaint as true, and only the complaint's legal sufficiency is contested. Petty, 306 Ill. App. 3d at 776. We review the granting of a section 2--619 motion de novo. Petty, 306 Ill. App. 3d at 776.
On appeal, plaintiff argues that she has a possessory security interest in the car under section 2--711(3) of the Uniform Commercial Code (UCC) (810 ILCS 5/2--711(3) (West 1998)). Plaintiff further contends that her section 2--711(3) security interest has priority over defendant's purchase-money security interest based on section 433.2 of the Code of Federal Regulations (FTC Rule) (16 C.F.R. §433.2 (1975)), which is embodied in the retail installment contract.
The FTC Rule provides that a consumer credit contract entered into in connection with the sale or lease of goods or services to consumers must contain the following provision:
"Any holder of this consumer credit contract is subject to all claims and defenses which the debtor could assert against the seller of goods or services obtained pursuant hereto or with the proceeds hereof. Recovery hereunder by the debtor shall not exceed amounts paid by the debtor hereunder." 16 C.F.R. §433.2 (1975).Plaintiff asserts that the FTC Rule provided in the retail installment contract placed defendant, as assignee, on notice that its rights under the agreement are subject to all defenses and/or claims that plaintiff has against the dealer. Plaintiff asserts that, because nonpayment is a recognized right of the consumer against the dealer and defendant stands in the shoes of the dealer, defendant's purchase-money security interest would be "subject to" her claim.
Defendant contends that plaintiff's failure to make the payments under the retail installment contract constituted a default under the terms of the contract. Pursuant to the UCC and the terms of the contract, defendant, upon default, had the right to take immediate possession of the car. Defendant further contends that any alleged security interest of plaintiff resulting from her revocation of acceptance is subordinate to defendant's purchase-money security interest, which arises under the Illinois Vehicle Code (see 625 ILCS 5/3--202 (West 1998)) and the UCC.
Defendant relies on Ambre v. Joe Madden Ford, 881 F. Supp. 1182, 1184 (N.D. Ill. 1995), in support of its argument. Similar to the present case, the plaintiff in Ambre revoked acceptance of her car and filed a suit against the car dealer and the creditor, Bank One, and ceased paying her monthly payments under a retail installment contract. Although Bank One did not repossess the car, it requested the court to direct the plaintiff to turn over the car to it based upon the plaintiff's failure to pay the monthly payments. As plaintiff in the present case claims here, the plaintiff in Ambre asserted that Bank One was not entitled to repossess the car upon default because the FTC Rule and section 2--711(3) of the UCC gave her a possessory security interest in the car that had priority over Bank One's purchase-money security interest. The court ...