Title: Shannon v. Boise Cascade Corp.

State: illinois

Issuer: Illinois Supreme Court

Document:

Docket No. 95854-Agenda 12-November 2003.
LISA M. SHANNON et al., Appellees, v. BOISE CASCADE 							
CORPORATION, Appellant.
Opinion filed February 5, 2004. 
	JUSTICE KILBRIDE delivered the opinion of the court:
 	For the second time, we are asked to review the decision of the
appellate court in this case, involving several homeowners' consumer
fraud claims against Boise Cascade, a manufacturer of composite wood
siding. The trial court entered summary judgment in favor of Boise
Cascade, the appellate court reversed, and we vacated the appellate
court's judgment, directing the court to reconsider its judgment in light of
Oliveira v. Amoco Oil Co., 201 Ill. 2d 134 (2002). See Shannon v.
Boise Cascade, 328 Ill. App. 3d 621 (2002), vacated, 201 Ill. 2d 615
(2002). Following vacatur, the appellate court attempted to distinguish
Oliveira and reissued its previous opinion in full. 336 Ill. App. 3d 533.
	We allowed Boise Cascade's petition for leave to appeal. 177 Ill. 2d
R. 315. We further granted leave to the Illinois Trial Lawyers Association
to file an amicus curiae brief in support of plaintiffs and also granted leave
to the National Association of Independent Insurers and the Product
Liability Advisory Council to file amicus curiae briefs in support of
defendant. 155 Ill. 2d R. 318. We now reverse the judgment of the
appellate court.

BACKGROUND
	Plaintiffs, Lisa M. Shannon, Timothy J. Shannon, Brian K. Connelly,
Susan West, Shapour Arami, Bruce Fischer, and James Torongo, own
homes covered with a Boise Cascade exterior composite wood siding
product. The siding was installed on the homes when they were built
between 1983 and 1984. While five of the plaintiffs are subsequent
purchasers, Fischer and Torongo are the original owners of their homes.
Boise Cascade began manufacturing its composite siding about 1960 but
has not manufactured, sold, or marketed the siding since 1984.
	Plaintiffs filed a putative class action suit, asserting, inter alia, a claim
under the Consumer Fraud and Deceptive Business Practices Act (Act)
(815 ILCS 505/1 et seq. (West 1998)), alleging that Boise Cascade's
composite siding was defective in that it was subject to rotting, buckling,
warping, wick moisture, and general failure. Plaintiffs' complaint further
alleged that Boise Cascade deceptively advertised the composite siding,
falsely representing that the siding was "of inherent good quality,"
"durable," "low maintenance," and "looked and performed comparably
to natural wood siding." The complaint also avers that Boise Cascade
fraudulently and deceptively failed to disclose that its siding "performed
poorly in the field," with a "high rate of failure," was sensitive to moisture,
and required "highly particularized maintenance."
	Admissions in all of the plaintiffs' depositions established that none
had received any representations regarding the siding from Boise
Cascade. An illustrative example is plaintiff Connelly, who testified that he
purchased his 13-year-old home in 1997. At the time of the purchase, he
did not know who manufactured the siding and he was not aware of any
advertising, literature, or other representations about the siding. Lisa and
Thomas Shannon, West, and Arami did not know the siding was a Boise
Cascade product. Before purchasing their homes, they were aware that
siding damage was present. Fischer and Torongo, the two plaintiffs who
purchased new homes, reviewed brochures prepared by the builder
containing representations about the siding. Those representations were
from the builder and were not consistent with Boise Cascade's product
literature. The complaint did not allege that any named builder, architect,
or engineer had received Boise Cascade product literature, or that any
plaintiff, in making a decision to purchase a home, communicated in any
way with any builder, architect, or engineer who had received Boise
Cascade product literature. No evidence was proffered at the summary
judgment hearing relating to the distribution of product literature to anyone.
Moreover, prior to the summary judgment hearing plaintiffs did not request
leave to amend their complaint to allege that they relied on builders,
architects, or engineers who had been deceived by Boise Cascade's
product literature.
	The circuit court granted Boise Cascade summary judgment, stating
that "seven of the eight plaintiffs neither saw, heard, or otherwise were
aware of the defendant's advertising," and finding that the claimed
damages were not proximately caused by the alleged deceptive
advertising. The circuit court refused to enter summary judgment against
an eighth plaintiff, Jack B. Babel, who bought his home new in 1984,
knew the siding was manufactured by Boise Cascade, and had read some
of Boise Cascade's publications prior to making his purchase. Babel's
claim is not at issue in this appeal.
	Following a Supreme Court Rule 304(a) finding by the circuit court
that there was no just reason to delay enforcement or appeal (155 Ill. 2d
R. 304(a)), plaintiffs appealed, arguing that the circuit court improperly
analyzed the elements of a cause of action under the Act, in particular the
concepts of "materiality" and "proximate causation." The appellate court
reversed, holding that the circuit court construed the Act too narrowly by
requiring privity, "some sort of direct contact between the plaintiffs and the
representations made by Boise Cascade." Boise Cascade, 328 Ill. App.
3d at 625. According to the appellate court, the Act created a new cause
of action, affording consumers broad protection by prohibiting any
deception or false promise. Boise Cascade, 328 Ill. App. 3d at 625-26.
The appellate court further held that the circuit court erred in its conclusion
that there was no proximate causation. Boise Cascade, 328 Ill. App. 3d
at 628. According to the appellate court, "[w]here reasonable minds could
differ whether the defendant's conduct was a substantial factor in bringing
about the injury, the matter is for the jury to decide." Boise Cascade, 328
Ill. App. 3d at 628.
	Justice Turner dissented. He believed that the majority failed to
address the actual proximate cause theory advanced by plaintiffs in this
case. Boise Cascade, 328 Ill. App. 3d at 631 (Turner, J., dissenting). The
plaintiffs' theory, as alleged in the complaint, posited that "in [the absence
of the] promotion and marketing activities [of Boise Cascade] a market
would not have been developed for composite wood siding and thus the
siding would not have been sold in the State of Illinois and therefore it
would not have been installed on the residences of plaintiffs and the other
members of the class."
	Boise Cascade sought leave to appeal to this court (177 Ill. 2d R.
315) and, while the petition was pending, we filed our opinion in Oliveira
v. Amoco Oil Co., 201 Ill. 2d 134 (2002). Oliveira involved a putative
class action against a gasoline company under the Act, where plaintiff
alleged that Amoco engaged in a deceptive advertising campaign for its
premium gasolines, resulting in consumer fraud. In Oliveira, this court
rejected the plaintiff's "market theory" of proximate causation that was
almost identical to the theory pleaded by plaintiffs here. Oliveira, 201 Ill. 2d  at 149-55. We then vacated the appellate court judgment and directed
that court to reconsider its judgment in the light of Oliveira. Shannon v.
Boise Cascade, 201 Ill. 2d 615 (2002) (supervisory order).
	Plaintiffs then sought leave from the appellate court to amend their
complaint (155 Ill. 2d Rs. 362, 366) to allege that certain unspecified
"architects, code promulgating bodies, materials suppliers, builders and
homeowners" relied on Boise Cascade's representations. The proposed
amendment did not allege, however, that any of the builders, material
suppliers, architects, or other third parties actually involved in the plaintiffs'
homes were aware of the alleged misrepresentations. It reiterated the
"market theory" of proximate cause as set out in their original complaint.
Leave to amend was denied.
	The appellate court distinguished Oliveira, stating that the Oliveira
plaintiff was solely concerned with price and did not complain that the
product involved was defective. 336 Ill. App. 3d at 537. Further,
according to the appellate court, "[i]t is sometimes possible to rely on
misrepresentations without reading the documents in which such
misrepresentations are made. *** Purchasers of homes employ builders,
architects, and engineers to examine the product literature for them; and
it is a mistake to say that home purchasers do not rely on that product
literature." 336 Ill. App. 3d at 537.
	Justice Turner again dissented, arguing that Oliveira controlled. 336
Ill. App. 3d at 546-47 (Turner, J., dissenting). In particular, he found "the
majority's insouciance to our *** decision in Oliveira vexing." 336 Ill.
App. 3d at 546 (Turner, J., dissenting). We granted Boise Cascade's
petition for leave to appeal (177 Ill. 2d R. 315) and now reverse the
judgment of the appellate court.

ANALYSIS
	Summary judgment is proper where the pleadings, depositions, and
admissions on file, when viewed in the light most favorable to the
nonmoving party, reveal that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter of law.
Busch v. Graphic Color Corp., 169 Ill. 2d 325, 333 (1996). We review
the grant of summary judgment de novo. Morris v. Margulis, 197 Ill. 2d 28, 35 (2001).
	The complaint in Oliveira asserted that the defendant's allegedly
deceptive advertising scheme increased demand for the defendant's
premium gasolines, thereby creating an inflated and otherwise
unsustainable price for those gasolines, causing damage to all purchasers
who bought the gasolines while the advertisements were running, because
they paid a higher price than they would have in the absence of the ads.
Oliveira, 201 Ill. 2d  at 140-41. We affirmed the dismissal of plaintiff's
claim under the Act because the complaint failed to allege that the
representative plaintiff was in any manner deceived by defendant's
advertisements. Oliveira, 201 Ill. 2d  at 154-55. We reasoned that this
result was compelled by our holding in Zekman v. Direct American
Marketers, Inc., 182 Ill. 2d 359 (1998).
	In Zekman, plaintiff's complaint alleged that the defendant telephone
company violated the Act by reviewing, revising, and approving Direct
American's deceptive solicitations and recorded messages regarding a
prize scheme and, further, that it violated the Act by billing for plaintiff's
calls to the 900 number referenced in the solicitations in a deceptive
manner. We affirmed summary judgment in favor of the defendant
telephone company. Acknowledging our holding in Connick v. Suzuki
Motor Co., 174 Ill. 2d 482, 501 (1996), requiring pleading and proof of
proximate cause, we held that no genuine issue of material fact existed as
to whether alleged deceptive advertising proximately caused his damage
because plaintiff's deposition testimony demonstrated that he was not
deceived by defendant's actions. We reasoned that since plaintiff admitted
that he did not read or pay the bills himself, he could not have been misled
by their allegedly deceptive nature. Zekman, 182 Ill. 2d  at 375-76.
	The teaching of Oliveira and Zekman is that deceptive advertising
cannot be the proximate cause of damages under the Act unless it actually
deceives the plaintiff. Plaintiffs' complaint in this case does not allege that
any deceptive advertising by Boise Cascade was received by any plaintiff,
or that it was received by any builder, architect, engineer, or other like
person somehow connected with a plaintiff. Instead, plaintiffs claim that
Boise Cascade's alleged deceptions created a market for their product
that would not otherwise exist, thus resulting in its use on their homes and
the plaintiffs' ultimate damages. The only distinction between this claim and
the market theory claim in Oliveira is the nature of the damages. The
plaintiffs here seek recovery for the cost of replacement or repair of the
siding, while the Oliveira plaintiff sought recovery for the inflated price
paid for premium gasoline. The appellate court deemed this significant
(336 Ill. App. 3d at 537), but we perceive it to be a distinction without a
difference. The advertising in Oliveira and in this case did not in any way
deceive the plaintiffs, and thus could not have proximately caused the
claimed damages, whatever their nature.
	It is certainly possible that evidence might demonstrate that the siding
would not have been installed on plaintiffs' homes but for Boise Cascade's
promotional literature. It does not follow, however, that the literature
distributed to unnamed persons 20 or more years ago, who may or may
not have been deceived, induced plaintiffs to accept the siding. Without
such a nexus, the alleged deception is simply too remote from the claimed
damages to satisfy the element of proximate cause.
	Although proof of actual deception of a plaintiff is required, this is not
to say that the deception must always be direct between the defendant and
the plaintiff to satisfy the requirement of proximate cause under the Act.
For instance, if the product literature had in fact deceived a particular
builder, architect, or contractor, resulting in the installation of defective
siding on a home, the damage could arguably have occurred "as a result
of" the indirect deception, as required by section 10a(a) of the Act (815
ILCS 505/10a(a) (West 2000)). In those circumstances, the purchaser,
who may have no independent knowledge of the qualities or expected
performance standards of siding, is deceived because of the deception of
the builder, architect or contractor, who reasonably should have had
correct knowledge. Plaintiffs did not plead any facts to support that theory
at any time.
	A similar situation was addressed by the appellate court in St. Joseph
Hospital v. Corbetta Construction Co., 21 Ill. App. 3d 925 (1974). In
that case, the defendant hospital asserted a common law fraud claim
against the manufacturer-supplier of wall paneling based on that
defendant's failure to disclose to the architect and the builder that testing
had revealed the paneling to have a flame spread of 17 times the maximum
allowed under the Chicago building code. The appellate court upheld a
jury verdict in favor of the hospital. St. Joseph, 21 Ill. App. 3d at 957.
The court noted that traditional privity was not a requirement in fraud
actions and held that "[i]t is enough that the statements by the defendant
be made with the intention that it reach the plaintiff and influence his action
and that it does reach him and that he does rely upon it, to his damage."
St. Joseph, 21 Ill. App. 3d at 954.
	The court cited with approval legal commentary from Harper and
James, Law of Torts, and American Jurisprudence Second, asserting the
principle that the false representations must have been intended to
influence the complaining party is equally applicable whether they are
made to him directly or indirectly. St. Joseph, 21 Ill. App. 3d at 954-55
(citing F. Harper & F. James, Torts §7.2 (1956), and 37 Am. Jur. 2d
Fraud & Deceit §190 (1968)). Thus, the misrepresentations to the
architect and builder ultimately deceived the hospital. Here, contrary to the
assumption of the appellate court (336 Ill. App. 3d at 541), the record in
this case, however, does not support a finding of indirect deception.
	The appellate court's analysis is dependent on an assumption that
Boise Cascade's representations about the siding reached Fischer and
Torongo, the plaintiffs who purchased their homes new, through the
builder-seller. The court reasoned:
		"The builder-seller of the homes was probably aware of the
representations, but according to the circuit court that did not
help plaintiffs because there was no evidence the builder-seller
was an agent of Boise Cascade. That analysis is mistaken.
Whether or not the builder-seller was Boise Cascade's agent,
Boise Cascade's representations reached plaintiffs through the
builder-seller, and plaintiffs Fischer and Torongo relied upon
those representations, to their damage." (Emphasis added.) 336
Ill. App. 3d at 541.
	A careful review of the record reveals no evidentiary basis for the
appellate court's conclusion that the builder-seller "probably" was aware
of Boise Cascade's representations. It is well settled that parties to an
appeal must adhere to the theory presented to the trial court and that
theory must be treated as the law of the case on appeal. See Johnson v.
Burlington Northern, Inc., 107 Ill. App. 3d 130, 138 (1982), citing
Blanchard v. Lewis, 414 Ill. 515, 521 (1953). Fischer and Torongo both
testified that the builders of their homes, not Boise Cascade, had created
brochures containing certain statements about the siding. There was no
evidence that Boise Cascade had made these statements, either to the
builders or to anyone else. In fact, the statements in the builder's
brochures contradicted the representations in Boise Cascade's product
literature. Torongo stated that the builder told him the siding was
"maintenance free," while Boise Cascade's product literature emphasized
the need for proper maintenance. Fischer also testified that the builder's
brochure stated that the home contained premium hardboard siding with
a 20-year factory finish. However, the brochure did not identify the
manufacturer of the siding and, moreover, Boise Cascade's warranty on
its siding finish was for 5 years, not 20. Thus, Boise Cascade's alleged
misrepresentations did not, directly or indirectly, reach any plaintiff.
	 As we have noted, plaintiffs' complaint does not allege that the
builders or others involved in the construction or marketing of their homes
were deceived. The plaintiffs all admitted that they were not personally
deceived by Boise Cascade's advertising. In the absence of any evidence
that the builders or other like persons were actually deceived, it is entirely
possible that they, like the plaintiff in Oliveira, "knew the truth" but
elected to use Boise Cascade's product anyway. See Oliveira, 201 Ill. 2d  at 155. In the case of four of the plaintiffs who were subsequent
purchasers of their homes, deception was not a cause of their damages
because they knew that siding damage had occurred and, therefore, that
it was subject to deterioration. Hence, based on the pleadings, plaintiffs
can rely only on an alleged deception of unspecified persons having no
demonstrated connection to their homes or to themselves. This is nothing
more than the market theory this court specifically rejected in Oliveira.

CONCLUSION
	Since there is no genuine issue of material fact as to whether the
plaintiffs were damaged as a result of Boise Cascade's alleged deceptive
advertising, the circuit court properly entered summary judgment for
defendant on the consumer fraud count. The appellate court erred in
reversing that judgment and we therefore reverse the judgment of the
appellate court and affirm the judgment of the circuit court


Appellate court judgment reversed;
circuit court judgment affirmed.
	I agree with the majority's decision to reverse the appellate court,
and I further agree with the majority's reasons for doing so. The majority
correctly concludes that summary judgment for defendant was proper
because "deceptive advertising cannot be the proximate cause of damages
under the Act unless it actually deceives the plaintiff." Slip op. at 5. I write
separately, however, because the majority has included confusing and
misleading dicta at the end of the opinion. After determining the proper
outcome under the facts of this case, the majority endeavors to adjudicate
a hypothetical case with different facts. In resolving this hypothetical, the
majority sets forth a rule of law that contradicts the one in the controlling
portion of the opinion. Because I do not agree that we should completely
undo the opinion that we just finished delivering, I cannot join the majority
opinion in its entirety.
	In the main portion of the opinion, the majority properly rejects
plaintiffs' "market theory" of causation. The majority correctly describes
this court's holdings in Zekman and Oliveira and their effect on the
allegations in this case. Here, the plaintiffs' complaint failed to allege that
they were actually deceived by the advertising. Thus, their case cannot
survive summary judgment.
	The majority opinion goes awry at the end when the majority explains
what the result would have been if plaintiffs would have pled different
facts:
			"Although proof of actual deception of a plaintiff is required,
this is not to say that the deception must always be direct
between the defendant and the plaintiff to satisfy the requirement
of proximate cause under the Act. For instance, if the product
literature had in fact deceived a particular builder, architect, or
contractor, resulting in the installation of defective siding on a
home, the damage could arguably have occurred 'as a result of'
the indirect deception, as required by section 10a(a) of the Act
(815 ILCS 505/10a(a) (West 2000)). In those circumstances,
the purchaser, who may have no independent knowledge of the
qualities or expected performance standards of siding, is
deceived because of the deception of the builder, architect or
contractor, who reasonably should have had correct
knowledge." Slip op. at 6.
Of course, this whole passage and everything that comes after it is dicta,
and we should not be issuing an advisory opinion on what the result might
be in a different case. See Oliveira, 201 Ill. 2d  at 157 (advisory opinions
are to be avoided); Best v. Taylor Machine Works, 179 Ill. 2d 367, 470
(1997) (generally, this court will not "engage in speculative analysis or ***
render an advisory opinion *** where, as in the instant case, such analysis
or opinion is not necessary for the disposition of the cause"). Putting that
problem aside, however, the analysis in this paragraph is directly contrary
to the rule we established in Zekman, Oliveira, and the non-dicta
portions of the majority opinion. Indeed, this analysis actually revives the
dissent in Oliveira, a position that was rejected 6-1 less than two years
ago.
	In Oliveira, we rejected the plaintiff's attempt to rely on a "market
theory" of causation under the Consumer Fraud and Deceptive Business
Practices Act. A significant problem was that plaintiff had never seen the
ads upon which he purported to base his claim:
		"Indeed, plaintiff could not allege that defendant's advertisements
deceived him or misled him as to what he was receiving when he
made his purchase. Because plaintiff does not allege that he
saw, heard or read any of defendant's ads, plaintiff cannot
allege that he believed that he was buying gasoline which
benefitted the environment or improved engine performance."
(Emphasis added.) Oliveira, 201 Ill. 2d  at 154-55.
We then reiterated that the problem with plaintiff's theory was that
"purchasers of defendant's premium gasolines who never saw the ads and,
thus, were 'not deceived' [would] also have valid claims." Oliveira, 201 Ill. 2d  at 155. This was consistent with our decision in Zekman, in which
we held that the plaintiff could not succeed on his claim that he was
deceived by AT&T's manner of billing for "900" number calls when he
had not seen the bills: "In addition, we note plaintiff's statement in his
deposition that he did not read or pay the bills himself, delegating those
duties to his secretary. Accordingly, plaintiff could not have been misled
by the allegedly deceptive nature of the bills." Zekman, 182 Ill. 2d  at 375.
	Chief Justice Harrison dissented in Oliveira, particularly taking issue
with the majority's assertion that it must have been the plaintiff who was
deceived by the advertising:
			"The majority's justification for reaching a contrary result is
misguided. While it is true that someone must have been
deceived in order to sustain a private cause of action for
damages under the Consumer Fraud and Deceptive Practices
Act, there is no requirement in the statute that it be the plaintiff.
If others were deceived and acted in reliance on the deception
in a way that harmed the plaintiff, the plaintiff is entitled to seek
recovery for his damages under the Act even if he, himself, was
not misled." Oliveira, 201 Ill. 2d  at 158 (Harrison, C.J.,
dissenting).
This position was rejected 6-1, but it finds new life in the majority's dicta.
	Today's case presented us with the opportunity to clarify once and
for all the meaning of our cases in this area. Instead, the majority has
issued an opinion that will further muddy the water. What will the bench
and bar make of this case law in the future? In the main part of this
opinion, we say for the third consecutive time that deceptive advertising
cannot be the proximate cause of damages under the Act unless it actually
deceives the plaintiff. The opinion then concludes with the seeming
assertion that, if the facts were different, we would overrule Oliveira and
go with the position expressed by Chief Justice Harrison in his dissent-that
"[i]f others were deceived and acted in reliance on the deception in a way
that harmed the plaintiff, the plaintiff is entitled to seek recovery for his
damages under the Act even if he, himself, was not misled." Oliveira, 201 Ill. 2d  at 158 (Harrison, C.J., dissenting). The majority notes that in his
dissent to the appellate court opinion, Justice Turner stated that he found
"the majority's insouciance to our supreme court's decision in Oliveira
vexing." 336 Ill. App. 3d at 546 (Turner, J., dissenting). I find this court's
insouciance to our decision in Oliveira vexing. 
	For these reasons, I concur with the majority's holding in this case,
but cannot join the contradictory advisory opinion tacked on to the end.
	JUSTICE GARMAN joins in this special concurrence.