Nat'l Life Ins. Co,, 271 UL. App. 3d 138, 141-42, 648 N-E.2d 237, 239-40 (1995). When
considering whether the element of reliance is met, good or bad faith is not important, and an
innocent misrepresentation or omission may be actionable. Siegel, 153 Ill.2d at 542, 607 N-E.2d
at 198. A party is considered to intend the necessary consequences of his own acts or conduct.
Dwyer y, American Express Co.,273 Ili. App. 3d 742, 750, 652 N.E,2d 1351, 1357 (All. App. 1 Dist.
1995), Actual reliance is not required. Siegel, 153 Ill.2d at 542, 607 N.E.2d at 198.

B. Deceptive Act or Practice

Limberopoulos attempts to establish a deceptive act by proving that the Bank did not
disclose its failure to apply three payments made on Limberopoulos’ loan. The Bankruptcy Court
held that the Bank did not commit a deceptive practice under the ICFA because the Bank’s failure
to disclose its incorrect applications of the loan payments was not material. The Bankruptcy Court
reasoned that even if the Bank had disclosed its incorrect application of the loan payments,
Limberopoulos would not have acted differently, Supplemental Findings at 3. The Bankruptcy
Court held that an earlier disclosure would only have resulted in an earlier demand that the
payments be properly applied. Jd.

As explained above, an omission is material if the plaintiff would have acted differently had
he been aware of it, or if it concerned the type of information upon which he would be expected to
rely in making his decision to act. Connick, 174 Il).2d at 504-05; 675 N.E.2d at 595. At Icast two
courts in this district have held that this test for materiality is an objective one: whether a reasonable
person could be expected to rely on the information. See, e.g., Tylka v. Gerber Prod.s Co., 178
F.R.D. 493, 498 (N.D. TIl. 1998); Cirone-Shadow v. Union Nissan of Waukegan, 955 F. Supp. 938

(N.D. Ill. 1997). Limberopoulos claims that the Bankruptcy Court erroneously considered his


c Intent to Induce Reliance on the Deception

The Bankruptcy Court also held, alternatively, that even if the Bank did commit a deceptive
act or practice, there was no evidence presented that the Bank intended Limberopoulos to rely on
the Bank’s failure to disclose the incorrect application of payments. Limberopoulos, however,
contends that the Bank indeed intended him to rely on the Bank’s omissions so that he would
continue to make payments and not seek to refinance the loan through another bank.
Limberopoulos contends that the Bank’s failure to inform him that it would not apply his payments
to the loan would have the “natural” consequence that Limberopoulos would continue to tender
payments to the Bank.

Limberopoulos, however, gets the test wrong. Limberopoulos’ continued payments must
be a “necessary” consequence of the Bank’s omission of its failure to apply the loan payments in
order to prove that the Bank intended Limberopoulos to rely on its omission, Dwyer, 273 IIL. App.
3d at 750, 652 N.E.2d at 1357. The Bank did not have a strong incentive to keep its threc mistakes
a sceret as American Express did in Dwyer, and the sole purpose of applying payments to a loan is
not to continue to receive payments as in Warren v. LeMay, 14211. App .3d 550,566, 49] N.E.2d
464, 474 (IN. App. 5 Dist. 1986). Rather, Limberopoulos’ payment was a necessary consequence
of the agrcement between the Bank and Limberopoulos that set forth Limberopoulos’ terms of
payment. In the Bank’s desire to maintain customers and {o keep payments coming, the Bank
would have a strong disincentive to hide a failure to apply payments. The Bank’s incentive would
be to rectify its mistake as soon as possible and apply the payment to the loan.

Furthermore, the Bank did not know at the time it received the three payments that it was

not going to apply the payments to reduce the loan balance, and thus it could not have intended


evidence, or recommit the matter to the bankruptcy judge with instructions. Fed. R. Bank. Proc.
9033(d), Accordingly, the Court will conduct a de novo review of the record to resolve
Limberopoulos’ objections.
NI. =DISCUSSION

A. Illinois Consumer Fraud Act

To establish a violation of the ICFA, the plaintiff must demonstrate that: (1) the defendant
performed a deceptive act or practice; (2) the defendant intended that the plaintiff rely on the
deception; (3) the deception occurred in the course of conduct involving a trade or commerce; and
(4) the consumer fraud proximately caused the plaintiff's injury. Connick v. Suzuki Motor Co., Ltd.,
174 I11.2d 482, 501, 675 N.E.2d 584, 593 (1997). Although the policy of the ICFA is to give broad
protection to the consumer, Siegel v. Levy Organization Dev. Co., 153 1l).2d 534, 541-42, 607
N.E.2d 194, 198 (1992), a plaintiff must still demonstrate deception by the defendant because the
ICFA prohibits deception, not error. Lagen v. Balcor Co., 274 Ill. App, 3d 11,23, 653 N.E.2d 968,
977 (Ill. App. 2 Dist. 1995), Stern v. Norwest Mortgage, Inc., 284 Ill. App. 3d 506, 513,672 N.E.2d
296, 302-03 (Ill. App. 1 Dist. 1996), The Lllinois Supreme Court has held that an omission of a
material fact or a material misrepresentation constitutes a deceptive act, Connick, 174 lll.2d at 504-
05; 675 N.E.2d at 595. An omission is material if the plaintiff would have acted differently had she
been aware of it, or if it concerned the type of information upon which she would be expected to
rely in making her decision to act. 7d.

The ICFA does not mandate that the defendant have deliberately intended to deceive the
plaintiff, so long as the misrepresentation or omission was intended to induce the plaintiff's

reliance. Cripe v. Leiter, 184 Ill.2d 185, 191, 703 N.E.2d 100, 103 (1998); Mackinac v. Arcadia


personal circumstances in deciding that he would not have acted differently had he been aware of
the failure to apply the payments. Limberopoulos argues that a reasonable person would have acted
differently had it known that the Bank would not apply the payments to the loan because “(i]t is
difficult to imagine that a customer would continuc to do business with a bank that did not apply
loan payments.” In addition, Limberopoulos argues that the Bankruptcy Court improperly failed
to consider the effect of the omissions, the non-disclosure of the failure to apply payments to the
loan, at the time Limberopoulos tendered the payments, instead considering only the effect of the
omissions after they occurred.

This Court agrces with the Bankruptcy Court that the Bank’s omissions were not material.
First, there is no question that Limberopoulos owed all the funds it tendered to the Bank pursuant
to the forbearance agreement of April 8, 1992, between Limberopoulos and the Bank. Second, there
is no dispute that Limberopoulos desired to make the payments to reduce the outstanding balance
on the loan and to avoid a threatened mortgage sale, Third, Limberopoulos provides no citation to
the record to support its contention that the Bank, at the time it received the payments, was not
going to apply them to the commercial loan. In fact, the evidence shows otherwise as the Bank
applied the April 10 and January 11 payments to the commercial loan upon receipt. The Bank later
mistakenly reversed this application. The Bank’s initial application of these payments to the loan
precludes the Court from considering whether a reasonable person would have acted differently
upon knowing of the failure to apply the payments to the loans at the time the payments were made,
because these payments were applied to the loan at the time they were made.

Fourth, Limberopoulos misconstrues the “reasonable person” standard. Although the Court

could not find an ICFA case defining the reasonable person standard, in other Illinois claims, the


Limberopoulos to rely on that. In addition, as explained above, Limberopoulos continued to owe
a great deal of money on the loan, which he was required to pay to the Bank pursuant to a binding
agreement between them. Therefore, the Bank did not need the omission to induce Limberopoulos
to make payments. Finally, Limberopoulos also cannot show that the Bank intended him to rely
on the Bank’s omission at the time of payment because the Bank did originally apply the April 10
and January |1 payments to the commercial Joan upon reccipt.
Tv. CONCLUSION

Limberopoulos’ objections are overruled, and the Bankruptcy Court’s recommendations are
accepted. Judgment is hereby entered in favor of the Bank with respect to Count I of

Limberopoulos’ complaint.

IT 1S SO ORDERED.

Sif of kof . fll.)

Dated The Honordble William J. [ibbler
United States District Court



a

ag Minute Order Farm (96/97)

United States District Court, Northern District of Mlinois

UT? ra
fc of Assigned Judi ‘li i Sitting, Judge if Oth
| | SPestasientise | Witiam Jnbbler [Saree one
CASE NUMBER 02 C 5008 DATE 3/48/2004
CASE Limberopoulos v. First Midwest Bank f/k/a Bremen Bank, et al.
TITLE

[In the following box (a) indieate the parry filing the motion, e.g, plaintiff, defendant, 3rd party plainti€f, and (h) state briefly che
nature of the motion being presented,]

MOTION:

Plaintiff Limberopoulos’ Objection to the Bankruptcy Court’s Supplemental Proposed Findings of Fact
and Conclusions of Law (doc. # 1)

DOCKET ENTRY:

(1) a Filed motion of ( use listing in “Motion” box above.]

(2) ia Brief in support of motion due

(3) Oo Answer brief to motion due____. Reply toanswer briefdue_

(4) im) Ruling/Hearingon set for at

(5) Qa Status hearing [held/continued to] [set for/re-set for]on set for__ at

(6) a Pretrial conference [held/continued to] {set for/re-set for]on set for at
(7) a Trial [set for/re-set for]on____at

(8) Qo {Bench/Jury trial] [Hearing] held/continued to at

(9) a This case is dismissed (with/without] prejudice and without costs (by/agreement/pursuant to]

OFRCP4(m) © General Rule 21 OFRCP41(a)(1) 0 FRCP41(a)(2).
(10)  MTM [Other docket entry] . Plaintiff Limberopoulos’ objections are OVERRULED, and the Bankruptcy Courl’s

recommendations are accepted. Judgment is hereby entered in favor of the Bank with respect to Count J of
Limberopoulos’ Complaint.

ay oo [For further detail see order on the reverse side of the original minute order.)

No notices required, advised in open court. Document

Number

No notices required.

Notices mailed by judge’s staff.

Notified counsel by telephone.

Docketing to mail notices,

—
¥ a ope
V7 | Mail AO 430 form ee ee

Copy to judged!

——

5 date wailed autive
courtroom, '

JHC deputy’s aD
initials

Date/time received in ;
central Clerk’s Office ‘mailing deputy initials



standard for reasonableness is measured by what a reasonable person would do under circumstances
similar to those presented. See, e.g., Hobart v. Shin, 185 112d 283, 294, 705 N.E.2d 907, 913
(1998); Miller v. Civil Constructors, Inc.,272 Ill, App. 3d 263, 269, 651 N.E.2d 239, 244, (Ill. App.
2d Dist. 1995). Thus, the Bankruptcy Court did not err in considering that: (1) the evidence showed
that during the course of the loan from 1988 through 1993, the Bank properly applied every
payment upon receipt with the only exception being the December 7, 1992 payment; (2) there was
a substantial balance left on the loan even after all of the payments had been made; and (3) the Bank
had a continuing right to accrue interest on the correct balance of the loan and to cxercisc its
foreclosure rights, Although the Bank’s consideration of Limberopoulos’ status as a sophisticated
business man who kept records of the amounts owing on his loans ventures into the subjective
realm of the loan transaction, this Court finds that the Bankruptcy Court’s decision that the Bank's
omission was not material to a reasonable person is sufficiently supported by the other
circumstances considered by the Bankruptcy Court.

Contrary to Limberopoulos’ claims, it is not so difficult to imagine that a customer in his
position would continue to do business with the Bank, even if the Bank bad disclosed the failure
to apply the payments when the failure to apply occurred. As the Bankruptcy Court explained, the
Bank had properly applicd the vast majority of the loan payments to the loan, In addition, there was
still a substantial balance left on the loan even after the payments were applied to the loan.
Limberopoulos does not cite any legal or factual case supporting his theory that a person in that
situation would go through the trouble of refinancing their loan through another bank instead of

merely demanding proper application of the payments to the loan.


IN THE UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

GUS LIMBEROPOULOS,

Debtor.

No. 02 C 5008
PETER LIMBEROPOULOS,

Judge William J, Hibbler

Plaintiff,
Appeal from Bankruptcy
Adversary Proceeding

Judgment in Case
v. Na. 00 A 00250
FIRST MIDWEST BANK, f/k/a Bremen
Bank & Trust Co., First Midwest Bank,
f/k/a Bremen Bank & Trust Co., not
individually but as Trustee under Trust
Agrcement Number 87-3184, Harry
Limberopoulos, Gus Limberopoulos,
Louis Siamatas, and Ted Limbcropoulos,

we SSS SS SS SS eS Se eS eS SS SSeS

Defendants.
MEMORANDUM OPINION AND ORDER
Before the Court is Plaintiff's, Peter Limberopoulos’, objections to the Bankruptcy Court’s
Supplemental Proposed Findings of Facts and Conclusions of Law (“Supplemental Findings”). For
the reasons set forth below, Limberopoulos’ objections are overruled, and the Bankruptcy Court's
recommendations are accepted.
1. BACKGROUND
On January 3, 2001, the Bankruptcy Court issued Proposed Findings of Fact and

Conclusions of Law. On May 21, 2002, the District Court adopted those findings and conclusions



except with regard to Count I of Limberopoulos’ complaint, in which he claimed that First Midwest
Bank f/k/a Bremen Bank (“Bank”) violated the Illinois Consumer Fraud Act, 815 LLCS 505/1 et
seq. (“ICFA”), The District Court directed the Bankruptcy Court to make findings of fact with
respect to the materiality of the alleged concealment under the ICFA.

Limberopoulos obtained a loan from the Bank in 1988. The evidence at trial established that
all but three of Limberopouolos’ tendcred payments to the Bank were properly credited against the
loan. These three payments were made on April 10, 1992; December 7, 1992; and January 11,
1993, The Bank accepted these three payments without objection or comment and acknowledged
receipt of the payment and the loan number for which the payments were intended. The Bank,
however, failed to apply these payments to reduce the loan balance. For the April 10, 1992, and the
January 11, 1993 payments, the Bank applied them to the loan upon its receipt of the payments, but
the Bank subsequently mistakenly reversed these applications. The Bank did not inform
Liberopoulos of its failure to apply the payments at the time of payment or thcreafter.

On June 20, 2002, the Bankruptcy Court issued its Supplemental Findings, recommending
that judgment be entered in favor of the Bank with respect to Count I of the complaint.

I. STANDARD OF REVIEW

Innon-core proceedings (i.e., cases that are not directly related to matters arising under Title
11), abankruptcy judge must submit proposed findings of fact and conclusions of law to the district
court. 28 U.S.C. § 157(c)(1). The district court then conducts a de novo review of any portion of
the bankruptcy judge’s proposed findings of fact and conclusions of law to which a party has made
a specific written objection. 28 U.S.C. § 157(c)(1); Fed. R, Bank. Proc. 9033(d). The district court

may accept, reject, or modify the proposed findings of fact or conclusions of law, receive further