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The People of the State of Illinois v. Steven R. Smith

October 22, 2012

THE PEOPLE OF THE STATE OF ILLINOIS,
PLAINTIFF-APPELLEE,
v.
STEVEN R. SMITH, DEFENDANT-APPELLANT (BOSS CONSTRUCTION, INC., AN ILLINOIS CORPORATION; AND
BOSS HOME IMPROVEMENT, INC., AN ILLINOIS
CORPORATION; DEFENDANTS).



Appeal from the Circuit Court of Cook County. No. 09 CH 15913 The Honorable Kathleen M. Pantle, Judge Presiding

The opinion of the court was delivered by: Presiding Justice Hoffman

PRESIDING JUSTICE HOFFMAN delivered the judgment of the court, with opinion. Justices Karnezis and Rochford concurred in the judgment and opinion.

OPINION

¶ 1 The appellant, Steven Smith, appeals from the circuit court's ruling granting summary judgment in favor of the State on its complaint against him and two corporations for which he was an agent, Boss Construction, Inc. and Boss Home Improvement, Inc. The corporations are not parties to this appeal. The complaint alleged that the defendants violated section 2 of the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/2 (West 2008)), section 20 of the Home Repair and Remodeling Act (Home Repair Act) (815 ILCS 513/20 (West 2008)), and section 9 of the Illinois Roofing Industry Licensing Act (Roofing Act) (225 ILCS 335/9 (West 2008)). On appeal, the appellant argues that the circuit court erred because (1) it failed to require that the state prove his intent to defraud as a predicate to its Consumer Fraud Act ruling; (2) to find him liable under the Roofing Act, it relied on a finding that he was not licensed, in spite of the fact that entities and workers related to his business were licensed; and (3) it imposed too harsh a remedy when it permanently enjoined him from future home repair or remodeling work in Illinois. For the reasons that follow, we affirm the circuit court's judgment.

¶ 2 In April 2009, the State filed a complaint alleging that the defendants were in the business of providing home repair services, including roofing services, despite the fact that none of them were licensed roofing contractors. The complaint further alleged that the defendants did not provide customers with an informational pamphlet as required by the Home Repair Act (815 ILCS 513/20 (West 2008)) or with a form notifying them of their right to cancel as required by the Consumer Fraud Act (815 ILCS 505/2B (West 2008)). According to the complaint, the defendants took at least partial payment for several jobs but then failed to complete them as promised, and refused to refund any payment.

¶ 3 For illustrative purposes, the complaint recounted the experiences of several consumers who had dealt with the defendants. For example, the complaint alleged, the defendants' salesperson told Philip and Jeanette Bradley in June 2008 that the defendants could complete their roof, soffit, gutter, window, and siding work for $49,000. The Bradleys took out a loan for the money, signed a contract, and paid a $24,500 deposit. The complaint alleged that they were never given an informational pamphlet. When the project was delayed, the defendants' salesperson attributed the delays to problems in the permit process and the fact that their window order had not yet been delivered. By the end of August, 2008, the appellant told the Bradleys that the windows were still causing delays, and he scheduled their work to begin on September 11. That start date was later moved to September 15 for weather reasons, but the project was not started on that date. At that point, the complaint states, Philip Bradley contacted his village to determine the status of their permit application, and he was told that the defendants had not even submitted a permit application and that the defendants' business license had expired. The defendants were thereafter unable to produce an invoice for the windows, and they again failed to appear for a new, October 6, project start date.

¶ 4 According to the narrative in the complaint, the appellant suggested on October 7 that the Bradleys void the contract and pay a subcontractor $12,000 to perform all the work except for the windows. The Bradleys declined this suggestion and sought a refund of their deposit. The complaint states that the appellant "refused to issue a refund, stating, 'get in line.' " It also states that the defendants never issued a refund to the Bradleys or performed any work for them.

¶ 5 Based on these allegations, as well as other similar allegations relating to other homeowners, the complaint asserted counts based on the Consumer Fraud Act, the Home Repair Act, and the Roofing Act. On the first two counts, the complaint sought civil penalties, and on all three counts, the State sought an injunction permanently barring the defendants from engaging in any home repair or remodeling within Illinois.

¶ 6 The appellant filed a pro se answer to the complaint, but that answer included no response to the final six paragraphs of the complaint, which were among seven paragraphs contained in the three separate counts of the complaint following prefatory facts and materials. Those final six paragraphs alleged that, for the above reasons, the defendants violated the Consumer Fraud Act, that the defendants "in the course of advertising, offering for sale, selling and providing home repair, improvement and roofing services," violated the Home Repair Act, and that the defendants "violated Section 9 of the [Roofing Act] by engaging in the business of a roofing contractor, without having been duly licensed." The appellant retained counsel after he filed his answer.

¶ 7 The State thereafter filed a motion for summary judgment on all three counts of its complaint. In that motion, the State asserted that its material allegations had been established by evidence adduced in discovery, affidavits from consumers who had dealt with the appellant, the appellant's admissions in his answer, and the appellant's responses to interrogatories. In concert with those arguments, the State argued that the appellant's failure to answer certain of the complaint's allegations should be deemed an admission of those allegations.

¶ 8 Attached to the motion for summary judgment was an excerpt of deposition testimony in which the appellant stated that he owned and operated Boss Construction and Boss Home Improvement, as well as a third business, Boss Roofing and Sheet Metal. The appellant explained that he was not a licensed roofer and that Chuck Zalewski, the man who ran the day-to-day operations of the roofing business, "had taken the test[] [a]nd the license was under Boss Roofing & Sheet Metal." The appellant insisted that his roofing work was run entirely by Zalewski.

¶ 9 The appellant agreed that his companies advertised in order to obtain customers. During the deposition, the appellant recounted his companies' dealings with several customers, and he agreed that Boss Home Improvement entered into contracts to provide roofing and other home repair services to consumers but then failed to perform the work. He agreed that he had received deposits from customers but then did no work and gave no refunds, and he often answered that he could not recall or did not know whether his companies gave consumers the statutorily-required pamphlet or a notice of the right to cancel. Also attached to the motion for summary judgment were affidavits from consumers who had lost their deposits to the defendants and who stated that the defendants did not provide them with the brochure or notice of their right to cancel.

¶ 10 In his response to the motion for summary judgment, the defendant argued that he could not have violated the Consumer Fraud Act, because the State had not established his intent to defraud. He argued that he did not violate the Roofing Act, because all of Boss Home Improvement roofing work was completed by licensed roofing subcontractors or overseen by Zalewski, who was licensed. In response to the State's request that the appellant's failure to answer certain allegations be deemed an admission of those allegations, the appellant noted that he filed his answer without the assistance of a lawyer. He offered that his denials in response to the State's summary judgment motion represented his true position on the omitted matters, and he asked that the court allow the statements in his response to stand as his answer. In an affidavit attached to his response, the appellant attributed his companies' difficulties to dire economic conditions that made it more difficult to obtain materials or lines of credit.

ΒΆ 11 In a November 2011 written order, the circuit court granted summary judgment to the State. In that order, the circuit court noted that the appellant did not refute the State's central narrative describing his taking consumers' deposits and failing to provide statutorily-required paperwork. The court also noted the appellant's request to amend his answer to deny the final six paragraphs of the complaint, but the court denied leave to amend on the grounds that (1) the appellant never filed a "proper" motion to amend, (2) aside from pointing out that he was representing himself, the appellant offered no reason for his failure to respond fully to the complaint, and (3) the appellant responded to the other paragraphs of the complaint and thereby demonstrated ...


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