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Allen v. Woodfield Chevrolet

October 17, 2003

CHARLES ALLEN ET AL., APPELLEES,
v.
WOODFIELD CHEVROLET, INC., APPELLANT.



The opinion of the court was delivered by: Justice Fitzgerald

UNPUBLISHED

Docket No. 94814-Agenda 12-May 2003.

At issue in this appeal is whether certain amendments to the Consumer Fraud and Deceptive Business Practices Act (Act) (815 ILCS 505/1 et seq. (West 1996)), which govern consumer fraud claims against new or used vehicle dealers, violate the Illinois constitutional prohibition against special legislation. See Ill. Const. 1970, art. IV, §13. The trial court found no constitutional infirmity; the appellate court reversed. 332 Ill. App. 3d 605. We hold that the statutory amendments constitute impermissible special legislation and therefore affirm the appellate court judgment invalidating these amendments.

BACKGROUND

In April 1996, plaintiff, Charles Allen, purchased a used vehicle from defendant, Woodfield Chevrolet, Inc. In November 1998, plaintiff filed an action against defendant in the circuit court of Cook County in connection with that purchase. In count I, plaintiff sought monetary damages under the Act for false and misleading conduct. Plaintiff alleged that defendant "advertised one price and then charged a different price for the same car." In count II, plaintiff sought a declaration that certain amendments to section 10a of the Act constitute special legislation on behalf of car dealers and are thus unconstitutional. See Pub. Act 87-1140, eff. January 1, 1993; Pub. Act 89-144, eff. January 1, 1996. Alternatively, plaintiff sought a declaration that these amendments violate the equal protection clauses of the state and federal constitutions. See Ill. Const. 1970, art. I, §2; U.S. Const., amend. XIV, §1. Among the challenged amendments was a provision requiring that plaintiff provide defendant with 30-days written notice before filing suit. See 815 ILCS 505/10a(h) (West 1996). Plaintiff admitted, in his complaint, that he did not comply with the presuit notice requirement.

Plaintiff moved for judgment on the pleadings as to count II, arguing that the amendments "treat car dealers more favorably than other similarly-situated consumer-fraud defendants and treat consumers who have claims against car dealers differently than consumers having claims against non-car dealers." Plaintiff maintained that the "car-dealer classification," created by the amendments, is not rationally related to a legitimate state interest. The trial court rejected plaintiff's argument: "[T]he classification is properly related to the problem sought to be remedied by the amendments, which is to encourage settlement between consumers and automobile dealers as well as avoid unnecessary litigation and limit attorney's fees." The trial court thus denied plaintiff's motion, entered judgment in favor of defendant on count II, and dismissed count I based on plaintiff's failure to provide defendant with the statutorily required presuit notice. Plaintiff appealed.

The appellate court reversed, holding that the subject amendments violate the constitutional prohibition against special legislation. 332

Ill. App. 3d 605. The appellate court stated, in relevant part:

"Assuming that the state has a legitimate interest in the settling of disputes and in discouraging lawsuits brought merely to generate attorney fees, there is nothing more unique about a fraud case brought against a car dealer than one brought against any other person or entity subject to the Act. Moreover, the effect of the legislation in this case is to penalize the consumer and not the attorneys who, according to the legislative history, are the ones the legislators deemed responsible for filing lawsuits merely to generate fees for themselves." 332 Ill. App. 3d at 614.
The appellate court did not consider plaintiff's equal protection challenge. 332 Ill. App. 3d at 617.

We allowed defendant's petition for leave to appeal, and allowed the Illinois Automobile Dealers Association and the Chicago Automobile Trade Association to file a joint amicus curiae brief in support of defendant. See 155 Ill. 2d R. 345. For the reasons discussed below, we now affirm the judgment of the appellate court.

ANALYSIS

I. Amendments to the Consumer Fraud Act

The Act, originally adopted in 1961 (see 1961 Ill. Laws 1867), declares unlawful unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. 815 ILCS 505/2 (West 1996). The Act confers upon the Attorney General the power to investigate alleged violations of the Act and to prosecute offenders, pursuing injunctive relief, restitution and civil penalties. 815 ILCS 505/3 through 505/7 (West 1996). With the addition of section 10a to the Act in 1973, the General Assembly expressly authorized private causes of action for deceptive business practices proscribed under the Act. Pub. Act 78-904, eff. October 1, 1973 (codified at 815 ILCS 505/10a(a) (West 1996)).

Prior to the adoption of the subject amendments, section 10a did not distinguish among consumer fraud litigants or claims. Generally, any "person," as that term is defined in the Act (815 ILCS 505/1(c) (West 1992)), who suffered damage as a result of a violation of the Act committed by any other person could bring an action under section 10a. 815 ILCS 505/10a(a) (West 1992). The only express requirement was that the action be commenced within three years from the date it accrued. 815 ILCS 505/10a(e) (West 1992). "Proof of a public injury, a pattern, or an effect on consumers generally" was not required under section10a (815 ILCS 505/10a(a) (West 1992)). But see J. Feehan, The Illinois Consumer Fraud Act and the "Public Injury" Debate, 80 Ill. B.J. 136 (1992). The court, in its discretion, could award actual damages, or any other relief it deemed proper, including injunctive relief and attorney fees and costs. 815 ILCS 505/10a(a), (c) (West 1992). The court could also award punitive damages. See Martin v. Heinold Commodities, Inc., 163 Ill. 2d 33, 79-82 (1994).

The subject amendments, effective in 1993 and 1996, added provisions to section 10a that changed the substantive and procedural requirements for consumer fraud claims against a single group of defendants, namely, new and used vehicle dealers. The amendments also affected the remedies available to consumer fraud plaintiffs in actions against vehicle dealers.

The 1993 amendment added subsections (f) and (g) which contain offer-of-judgment provisions. At any time more than 30 days prior to trial, a consumer fraud plaintiff or the defendant vehicle dealer may make an offer to allow judgment to be taken against the dealer. Under subsection (f), if the plaintiff rejects the dealer's offer of judgment and later fails to obtain a judgment greater than the offer, the plaintiff forfeits attorney fees and costs from the date of the offer. Under subsection (g), if the dealer rejects the plaintiff's offer and the plaintiff later obtains a judgment equal to or greater than the offer, the dealer must pay interest at the statutory rate from the date of the offer to the date the judgment is paid. See Pub. Act 87-1140, eff. January 1, 1993.

The 1996 amendment added language to existing subsection (a) limiting the circumstances under which the trial court may make an award of punitive damages against a new or used vehicle dealer, and making proof of a "public injury" a required pleading element of a cause of action against a vehicle dealer. The 1996 amendment also added subsection (h), which requires consumer fraud plaintiffs to provide vehicle dealers with a 30-day written notice before filing suit. Subsection (h) additionally sets forth procedures for pre-suit settlement offers from vehicle dealers. If a potential plaintiff rejects a pre-suit settlement offer and in a subsequent action obtains a judgment less ...


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