Appeal from the Circuit Court for the 10th Judicial Circuit, Peoria County, Illinois No. 99-MR-278 Honorable Richard E. Grawey Judge, Presiding
The opinion of the court was delivered by: Justice Breslin
Plaintiff Robert D. Mosiman entered into a three-year lease with defendant Joe McCarthy Olds-GMC Truck, Inc. (McCarthy Olds) for a new BMW roadster. The lease was provided by defendant BMW Financial Services NA, Inc. (BMW), and assigned all right, title and interest in the vehicle to BMW.
One month later, Mosiman filed a five-count complaint individually and as a class action against defendants BMW, McCarthy Olds and Joe McCarthy individually (collectively BMW), alleging that BMW violated the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 1998)). Additionally, Mosiman asserted claims of common law fraud, conspiracy and unjust enrichment.
BMW filed a motion to dismiss pursuant to section 2-615 of the Illinois Code of Civil Procedure (Civil Code) (735 ILCS 5/2-615 (West 1998)). The trial court granted the motion and Mosiman appealed. We affirm and hold that an automobile lease is not fraudulent or in violation of the Illinois Consumer Fraud Act when it combines reimbursement of the use tax with other fees and taxes assessed rather than identifying the use tax reimbursement separately.
Most states impose a tax on the lease of a motor vehicle. Lessees typically pay the tax for each month the vehicle is leased. In Illinois, the tax is imposed on the "user" of the property. 35 ILCS 105/3 (West 1998). Thus, it is called a use tax. But, unlike other states, Illinois law defines the term "user" as the owner-lessor of the property. Continental Illinois Leasing Corp. v. Department of Revenue, 108 Ill. App. 3d 583, 439 N.E.2d 118 (1982). Also unique to Illinois, the total use tax is commonly passed on to the lessee at the time the lease is signed.
On appeal, Mosiman suggests that use of the BMW lease constituted an unfair and deceptive business practice under Illinois' Consumer Fraud Act because Illinois lessees pay far more taxes than other states' consumers leasing the same vehicle. This is because Illinois lessees pay the entire use tax, no matter how long their lease term, while other states' residents pay a monthly use tax fee only so long as the vehicle is leased.
The parties do not debate that in Illinois lessors may contractually seek reimbursement from lessees for any use tax paid. See Johnson v. Marshall Field & Co., 57 Ill. 2d 272, 312 N.E.2d 271 (1974). Rather, the parties debate whether the lease utilized by BMW sufficiently informs lessee that it is contracting to pay lessor's entire use tax no matter the length of its lease. Accordingly, a careful review of the lease at issue is necessary.
Within section 11 of the lease, Mosiman's monthly payment is calculated. At line 11A, the "gross capitalized cost" of his vehicle is listed and defined as "the agreed upon value of the Vehicle [here $42,900] and any item you pay over the Lease Term (such as service contracts, insurance, and any outstanding prior credit or lease balance.)" The gross capitalized cost of Mosiman's vehicle was listed as $46,573.76. This figure includes the use tax of $2,684.06. Mosiman could have checked a box that appears below the gross capitalized cost to receive an itemization of that cost, but he did not.
Section 14 lists the "OFFICIAL FEES AND TAXES," defined as the "total estimated amount you will pay for official and license fees, registration, title and taxes over the Lease Term, whether included in the Monthly Payment or otherwise assessed." The official fees and taxes listed on Mosiman's lease total $3,244.76. The parties agree that the use tax is also encompassed within that figure. Finally, section 32 on the reverse side of the lease provides in part: "32. TAXES, REGISTRATION AND TITLING. You must pay when due all registration, title, license, inspection fees and other official fees and taxes (other than our income taxes) in connection with this Vehicle."
The sole issue on appeal is whether the trial court erred when it granted BMW's motion to dismiss Mosiman's complaint pursuant to section 2-615 of the Civil Code.
When a complaint is dismissed pursuant to section 2-615 of the Civil Code (735 ILCS 5/2-615 (West 1998)), the standard of review is de novo. Vernon v. Schuster, 179 Ill. 2d 338, 688 N.E.2d 1172 (1997). The question presented in a section 2-615 motion is whether the allegations of the complaint, when viewed in a light most favorable to the plaintiff, are sufficient to state a ...