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Roland Machinery Company v. Reed

June 20, 2003

ROLAND MACHINERY COMPANY, AN ILLINOIS CORPORATION, PLAINTIFF-APPELLANT,
v.
JAMES S. REED, DEFENDANT-APPELLEE.



Appeal from Circuit Court of Sangamon County No. 02MR304 Honorable Donald M. Cadagin, Judge Presiding.

The opinion of the court was delivered by: Justice Steigmann

PUBLISHED

In June 2002, plaintiff, Roland Machinery Company (Roland), filed a complaint against defendant, James S. Reed, seeking a declaratory judgment determining the parties' rights under a purchase agreement, pursuant to which Reed had purchased a $175,400 bulldozer from Roland. In response, Reed filed a motion to dismiss under section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2000)), alleging that Roland's complaint did not state a cause of action for declaratory relief. Following a July 2002 hearing, the trial court granted Reed's motion and dismissed Roland's complaint.

Roland appeals, arguing that the trial court erred by dismissing its declaratory judgment action. We reverse and remand.

I. BACKGROUND

Roland's June 2002 complaint for declaratory judgment alleged the following: (1) Roland is in the business of selling, servicing, and repairing heavy equipment out of its facility in Springfield; (2) on August 6, 2001, Roland and Reed entered into a purchase agreement, pursuant to which Reed agreed to purchase from Roland a new Komatsu D61EX12 Crawler Dozer (the dozer); (3) sometime after August 6, 2001, the dozer was delivered from its manufacturer to Roland's Springfield facility; (4) pursuant to the terms of the purchase agreement, and as per Reed's request, Roland equipped the dozer with (a) "sweeps," (b) a fuel tank guard, and (c) a rear screen heater; (4) on September 27, 2001, Reed took possession of the dozer and paid Roland $157,078 (the balance due after adding sales tax and subtracting the value of Reed's trade-in); (5) prior to February 16, 2002, the dozer was delivered to Roland's Springfield facility for work requested by Reed; (6) on February 16, 2002, Reed inspected the dozer and re-took possession of it; (7) later that day, Reed came back to Roland's Springfield facility to return a "soft cab" that was previously installed by Roland; (8) sometime after purchasing the dozer, Reed alleged that the paint on the dozer was defective; (9) on or about March 4, 2002, Reed attempted to revoke his acceptance of the dozer; (10) on May 29, 2002, Reed demanded that the purchase be rescinded and Roland refund the entire purchase price and retake possession of the dozer; and (11) Roland denied that Reed is entitled to rescission or revocation of acceptance of the dozer. Roland sought a declaratory judgment with respect to the rights of the parties and for such other relief as may be just and equitable.

Later in June 2002, Reed filed a motion to dismiss Roland's complaint under section 2-615 of the Code (735 ILCS 5/2-615 (West 2000)), alleging that Roland's complaint did not state a cause of action for declaratory relief because (1) it sought a declaration of non-liability for past conduct; and (2) the controversy involved rights and obligations under contract law and the Uniform Commercial Code (810 ILCS 5/1-101 through 13-103 (West 2000)), which would be asserted by Reed in an action at law and were not proper subjects for a declaratory judgment proceeding.

Following a July 2002 hearing, the trial court dismissed Roland's complaint, upon finding that Roland was seeking a judicial declaration of non-liability for past conduct, which is not a function of the declaratory judgment statute. In October 2002, the court denied Roland's motion to reconsider. This appeal followed.

II. ANALYSIS

A. Standard of Review

Initially, we must clarify the standard of review, which Reed erroneously describes as follows: "The granting or denying of declaratory relief rests within the sound discretion of the trial court, and the appellant must affirmatively show an abuse of discretion." In Alderman Drugs, Inc. v. Metropolitan Life Insurance Co., 79 Ill. App. 3d 799, 803, 398 N.E.2d 984, 987 (1979), the First District Appellate Court discussed the appropriate standard when reviewing a trial court's dismissal of a plaintiff's complaint for declaratory judgment as follows:

"While it is true *** that the [trial] court in its discretion may refuse to grant declaratory relief, the court has no discretion to refuse to entertain the action as against a motion to dismiss where the complaint states a cause of action. [Citations.] When confronted with a motion to dismiss, the trial court must sustain the complaint unless it clearly appears that no set of facts could be proved under the pleadings which would entitle the plaintiff to some type of relief. [Citations.] A complaint for declaratory judgment which recites in sufficient detail an actual and legal controversy between the parties and prays for a declaration of rights and, if desired, other legal relief, states facts sufficient to state a good cause of action. [Citations.]"

We review de novo a trial court's decision granting or denying a section 2-615 motion to dismiss, and we accept all well-pleaded facts in the complaint as true. Thomas v. Hileman, 333 Ill. App. 3d 132, 136, 775 N.E.2d 231, 234 (2002); see also Beahringer v. Page, 204 Ill. 2d 363, 369 (2003) (setting forth the de novo standard of review that applies to a trial court's grant of a section 2-615 motion to dismiss a declaratory judgment action).

B. Declaratory Judgments

Section 2-701(a) of the Code states, in pertinent ...


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