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Wellington Homes, Inc., Individually and As the Representative of A Class of Similarly Situated Persons v. West Dundee China Palace Restaurant

February 4, 2013

WELLINGTON HOMES, INC., INDIVIDUALLY AND AS THE REPRESENTATIVE OF A CLASS OF SIMILARLY SITUATED PERSONS, PLAINTIFF-APPELLEE,
v.
WEST DUNDEE CHINA PALACE RESTAURANT, INC., AHMAD AZMI, AND TEHMINA AZMI,
DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Lake County. No. 09-CH-1577 Honorable Mitchell L. Hoffman, Judge, Presiding.

The opinion of the court was delivered by: Justice Zenoff

JUSTICE ZENOFF delivered the judgment of the court, with opinion.

Presiding Justice Burke and Justice Hudson concurred in the judgment and opinion.

OPINION

¶ 1 The federal Telephone Consumer Protection Act of 1991 (TCPA) (47 U.S.C. § 227 (2006)) prohibits, among other things, the use of "any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement." 47 U.S.C. § 227(b)(1)(C) (2006). In addition to permitting state attorneys general and the Federal Communications Commission to pursue civil actions in federal district court for violations of the statute (47 U.S.C. § 227(f)(1), (f)(2), (f)(3) (2006)), the TCPA permits individuals to bring private actions seeking statutory damages of $500 per violation of the statute, in either state court or federal district court (47 U.S.C. § 227(b)(3), (c)(5) (2006); Mims v. Arrow Financial Services, LLC, 565 U.S. ___, ___, 132 S. Ct. 740, 747 (2012)). Congress, which enacted the TCPA in 1991, previously had enacted a statute providing that, "[e]xcept as otherwise provided by law, a civil action arising under an Act of Congress enacted after [December 1, 1990,] may not be commenced later than 4 years after the cause of action accrues." 28 U.S.C. § 1658(a) (2006). Relevant to this appeal, section 13-202 of the Illinois Code of Civil Procedure (Code) provides: "Actions *** for a statutory penalty *** shall be commenced within 2 years next after the cause of action accrued ***." 735 ILCS 5/13-202 (West 2006).

¶ 2 This interlocutory appeal pursuant to Illinois Supreme Court Rule 308 (eff. Feb. 26, 2010) involves two certified questions: (1) "Does Illinois' two-year limitations period for a statutory penalty *** apply to TCPA claims brought in Illinois state courts seeking statutory damages pursuant to [section 227(b)(3) of the TCPA?]" and (2) "If not, what limitations period applies to TCPA claims brought in Illinois state courts?" We answer the first certified question in the negative. As to the second certified question, we conclude that the four-year federal catchall statute of limitations codified at 28 U.S.C. § 1658(a) applies to private TCPA claims filed in Illinois state courts.

¶ 3 BACKGROUND

¶ 4 On March 31, 2009, plaintiff, Wellington Homes, Inc., an Illinois corporation with its principal place of business in Lake County, filed in the circuit court of Lake County a class action complaint individually and on behalf of a class of individuals who, "[o]n or about May 16, 2006," received an unsolicited one-page fax advertising China Palace, a restaurant located in West Dundee, Illinois, and owned by defendant, West Dundee China Palace Restaurant, Inc. Count I of the complaint alleged that the transmissions violated the TCPA and, pursuant to section 227(b)(3) of the TCPA, triggered statutory damages of $500 per transmission. Count II alleged common-law conversion. Count III alleged violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 2006)). Plaintiff's third amended complaint, filed November 18, 2010, also named as defendants Ahmad Azmi and Tehmina Azmi, who allegedly were the "officers, directors, shareholders and control persons" of West Dundee China Palace Restaurant, Inc.

¶ 5 On January 14, 2011, the court certified a class consisting of all persons who received an unsolicited fax advertising China Palace in May 2006. By October 2011, defendants had not appeared, despite having being served. On October 11, 2011, on plaintiff's motion, the court entered summary judgment in favor of plaintiff and against defendants in the amount of $2,440,196. The court calculated the amount of the judgment based on 3,842 unsolicited fax transmissions at $500 per occurrence, plus prejudgment interest of $519,196. Shortly thereafter, defendants filed an appearance and, pursuant to section 2-1301(e) of the Code (735 ILCS 5/2-1301(e) (West 2010)), moved to vacate the October 11, 2011, order. Counsel for defendants stated in the motion that defendants' insurer had filed a declaratory judgment action seeking a declaration that it had no duty to defend against the instant litigation. However, the declaratory judgment action had been resolved with a finding that defendants' insurer did have a duty to defend. On January 26, 2012, the court granted defendants' motion to vacate and gave defendants 28 days to answer or otherwise plead.

¶ 6 Defendants timely filed a combined motion to dismiss plaintiff's third amended complaint pursuant to section 2-619.1 of the Code (735 ILCS 5/2-619.1 (West 2010)). Relevant to the issue raised on appeal, defendants sought dismissal of count I of the complaint pursuant to section 2-619(a)(5) of the Code (735 ILCS 5/-619(a)(5) (West 2010)), because, defendants contended, plaintiff's TCPA claim was barred by Illinois's two-year statute of limitations for actions for statutory penalties. Plaintiff argued in response that its TCPA claim was subject to the four-year federal catchall statute of limitations codified at 28 U.S.C. § 1658(a).

¶ 7 On April 24, 2012, the trial court denied defendants' motion to dismiss. On June 28, 2012, the trial court entered an agreed order certifying the two questions set forth above for interlocutory appeal pursuant to Illinois Supreme Court Rule 308, and this court subsequently allowed the appeal.

¶ 8 ANALYSIS

¶ 9 Section 227(b)(3) of the TCPA, entitled "Private right of action," provides:

"A person or entity may, if otherwise permitted by the laws or rules of court of a State, bring in an appropriate court of that State-

(A) an action based on a violation of this subsection or the regulations prescribed under this subsection to enjoin such violation,

(B) an action to recover for actual monetary loss from such a violation, or to receive $500 in damages for each such violation, whichever is greater, or

(C) both such actions.

If the court finds that the defendant willfully or knowingly violated this subsection or the regulations prescribed under this subsection, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph ...


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