Court Opinion

ID: 4394042
Source: CourtListenerOpinion
Date Created: 2019-05-03 22:03:16.606847+00
Date Added: 2024-06-11T12:25:36.682372
License: Public Domain

2019 IL App (2d) 180681
                                 No. 2-18-0681
                            Opinion filed May 3, 2019
_____________________________________________________________________________

                                            IN THE

                             APPELLATE COURT OF ILLINOIS

                              SECOND DISTRICT
______________________________________________________________________________

GENE MOSIER and DONNA MOSIER,          ) Appeal from the Circuit Court
                                       ) of McHenry County.
      Plaintiffs-Appellants,           )
                                       )
v.                                     ) No. 16-LA-149
                                       )
THE VILLAGE OF HOLIDAY HILLS,          ) Honorable
                                       ) Thomas A. Meyer,
      Defendant-Appellee.              ) Judge, Presiding.
______________________________________________________________________________

       JUSTICE ZENOFF delivered the judgment of the court, with opinion.
       Presiding Justice Birkett and Justice Burke concurred in the judgment and opinion.

                                            OPINION

¶1     Plaintiffs, Gene and Donna Mosier, appeal the dismissal with prejudice of their second

amended complaint against defendant, the Village of Holiday Hills (Village). We affirm.

¶2                                    I. BACKGROUND

¶3     In April 2008, plaintiffs obtained a permit from the Village to build a “garage, patio,

driveway” on their property, which is located within the Village. Plaintiffs erected a metal pole

barn in conformance with the permit. Then, on March 6, 2013, McHenry County (County) sued

plaintiffs for violation of a County ordinance, alleging that plaintiffs built the structure in a

regulatory flood-prone area without a stormwater management permit issued by the County. The

County prayed for a fine of $750 per day.
2019 IL App (2d) 180681

¶4     As a result of the County’s action, on May 3, 2016, plaintiffs sued the Village for breach

of contract and violation of the Consumer Fraud and Deceptive Business Practices Act (Act)

(815 ILCS 505/1 et seq. (West 2016)). The gravamen of plaintiffs’ suit was that the Village had a

duty to disclose the County’s permit requirement when plaintiffs applied for the building permit

from the Village.

¶5     After the trial court involuntarily dismissed without prejudice that complaint and the first

amended complaint, plaintiffs filed their two-count second amended complaint in which they

alleged as follows. Count I, for breach of an oral contract, alleged that plaintiffs met with a

Village building inspector, Ray DeBosz, who informed them that they could legally build a metal

pole barn if they installed a “truss load.” Plaintiffs agreed to DeBosz’s terms, and the Village

issued the permit on or about April 17, 2007.1 At no time did DeBosz inform plaintiffs that they

needed to make a separate application for a permit from the County. Plaintiffs completed

construction of the pole barn only to learn that they were in violation of a County ordinance.

Plaintiffs alleged that the Village had misrepresented the extent of its authority, because the

necessary stormwater studies and site development work had to be approved by the County. As a

result, plaintiffs spent thousands of dollars defending themselves against the County’s lawsuit.

Count II alleged a violation of the Act in that DeBosz misrepresented that plaintiffs needed only

to include a “truss load” on the pole barn to obtain a valid permit. Plaintiffs alleged that

DeBosz’s statement was knowingly false and was made intentionally to induce plaintiffs to build

the pole barn.

       1
           The date on the permit is April 19, 2008. The record does not disclose the source of this

discrepancy.

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¶6     The Village moved to dismiss the second amended complaint pursuant to section 2-

619(a)(9) of the Code of Civil Procedure (Code) (735 ILCS 5/2-619(a)(9) (West 2016)). As to

count I, the Village argued, inter alia, that DeBosz did not have authority to bind the Village to a

contract. The Village incorporated its president’s affidavit averring that the Village board has the

sole authority to enter into contracts and never authorized DeBosz to enter into contracts on its

behalf. The Village also maintained that the application for, and issuance of, a building permit

does not constitute a contract. As to count II, the Village argued that the Act was inapplicable

because plaintiffs were not consumers and the Village was not engaged in trade or commerce.

Further, the Village claimed that the complaint was barred by a three-year statute of limitations.

¶7     On July 26, 2018, the court granted with prejudice the Village’s motion to dismiss. With

respect to count I, the court ruled that DeBosz did not have actual authority to enter into

contracts, but “arguably” had apparent authority to bind the Village. Nevertheless, the court

found that there was no consideration for the alleged oral agreement, as plaintiffs merely paid a

fee for the building permit. Further, the court found that plaintiffs got what they paid for, namely

the permit. With respect to count II, the court found that the Village did not commit a deceptive

act, as it had no obligation to disclose the County’s requirements. The court also found that the

Act did not apply, because there was no merchandise involved in the transaction. Plaintiffs filed

a timely appeal.

¶8                                        II. ANALYSIS

¶9     Plaintiffs contend that the court erred in dismissing the second amended complaint. The

Village brought the motion under section 2-619(a)(9) of the Code. Such a motion admits the

legal sufficiency of the complaint but asserts that some “affirmative matter” defeats the claim.

Norabuena v. Medtronic, Inc., 2017 IL App (1st) 162928, ¶ 14. An affirmative matter is

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2019 IL App (2d) 180681

something in the nature of a defense that completely negates the cause of action or refutes crucial

conclusions of law or of material fact contained in or inferred from the complaint. Villanueva v.

Toyota Motor Sales, U.S.A., Inc., 373 Ill. App. 3d 800, 802 (2007). We must determine whether

there is a genuine issue of material fact and whether the defendant is entitled to judgment as a

matter of law. Villanueva, 373 Ill. App. 3d at 802. We accept all well-pleaded facts as true, and

we draw all reasonable inferences in favor of the plaintiff. Villanueva, 373 Ill. App. 3d at 802-03.

We review de novo the trial court’s dismissal of a complaint under section 2-619. Norabuena,

2017 IL App (1st) 162928, ¶ 14. Also, we may affirm a dismissal on any basis that is apparent

from the record. Norabuena, 2017 IL App (1st) 162928, ¶ 14.

¶ 10                                A. Breach of Oral Contract

¶ 11   The first affirmative matter asserted by the Village was the Village president’s affidavit

averring that DeBosz had no authority to enter into contracts on behalf of the Village. The

Village also posited lack of consideration as an affirmative matter. The Village asserted, and

plaintiffs do not contest, that a Village ordinance required the issuance of a building permit for

the erection, construction, or alteration of any structure. The Village argued that plaintiffs’

application for the permit did not form a contract but was the fulfillment of a legal requirement.

¶ 12   The    elements    of   a   breach-of-contract   action   are   (1) offer   and   acceptance,

(2) consideration, (3) definite and certain terms, (4) performance by the plaintiff of all required

conditions, (5) breach, and (6) damages. Village of South Elgin v. Waste Management of Illinois,

Inc., 348 Ill. App. 3d 929, 940 (2004). Plaintiffs argue that the Village, through DeBosz, offered

to issue a permit to construct a pole barn on their property if they included a truss load. Implicit

in that offer, plaintiffs argue, was the representation that “all [plaintiffs] needed to do to build”

was to obtain a truss load. Plaintiffs assert that they accepted that offer and tendered

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consideration when they paid the application fee for the permit. Plaintiffs maintain that they

performed under the contract by building a pole barn that included a truss load. They assert that

the Village, through DeBosz, breached the contract by failing to inform them that they could not

build the pole barn unless the County also approved the project. Plaintiffs assert that they were

damaged by having to defend themselves against the County’s lawsuit.

¶ 13   Plaintiffs argue that DeBosz had apparent authority to enter into the contract, because

they “reasonably and detrimentally” relied upon his representations. Plaintiffs also cite the

court’s comment that DeBosz “arguably” had apparent authority to bind the Village. The Village

argues that only “corporate authorities” can bind a municipality contractually and that a building

inspector is not a corporate authority. As regards a village or incorporated town, “corporate

authorities” means the president and trustees or a similar body. 65 ILCS 5/1-1-2(2)(b) (West

2016). The Village relies on City of Belleville v. Illinois Fraternal Order of Police Labor

Council, 312 Ill. App. 3d 561 (2000). However, that case dealt with provisions of the Municipal

Code generally providing that no expense shall be incurred by any officer or department of a

municipality unless an appropriation has been previously made concerning that expense. City of

Belleville, 312 Ill. App. 3d at 563. Here, DeBosz’s actions did not incur any expense on behalf of

the Village. The Village’s reliance on McMahon v. City of Chicago, 339 Ill. App. 3d 41 (2003),

and Patrick Engineering, Inc. v. City of Naperville, 2012 IL 113148, is similarly misplaced, as

both of those cases involved a contract between a vendor and a municipality, which is not at

issue here.

¶ 14   Plaintiffs and the Village both miss the mark debating DeBosz’s authority under agency

law. There is no question that he had authority to issue plaintiffs a building permit if they

complied with the Village Code; however, that authority derived from the Village’s police

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2019 IL App (2d) 180681

power. See Hartman v. City of Chicago, 282 Ill. 511, 513 (1918) (it is within the police power of

a city to regulate the construction and use of buildings for the protection of the lives and safety of

the citizens). Thus, the issuance of building permits is a governmental function designed to

protect the public, and the charge for building permits is to offset expenses incurred by the

municipality in promoting this public interest. Hannon v. Counihan, 54 Ill. App. 3d 509, 514-15

(1977). The issuance of a building permit cannot be a private matter between contracting parties,

as a building permit cannot be granted in violation of a zoning ordinance. See Ganley v. City of

Chicago, 18 Ill. App. 3d 248, 254 (1974). Principles of contract and agency law are inapt. In

Village of Schaumburg v. Kingsport Village, Inc., 106 Ill. App. 3d 1055, 1059 (1982),

Schaumburg argued that the building permits that it issued to two developers, based on the

developers’ representations that their work on certain projects would be completed in accordance

with all applicable building ordinances, allowed it to sue the developers for breach of contract

when their work violated those ordinances. The trial court found that contract principles did not

apply, and the appellate court agreed, reasoning that a building permit is “akin” to a license to do

certain things within a municipality. Village of Schaumburg, 106 Ill. App. 3d at 1059. The

appellate court stated that noncompliance with building permits results in monetary fines,

making Schaumburg’s breach-of-contract argument untenable. Village of Schaumburg, 106 Ill.

App. 3d at 1059.

¶ 15   Plaintiffs’ reliance on Steinberg v. Chicago Medical School, 69 Ill. 2d 320 (1977), in

support of their breach-of-contract argument 2 is misplaced. In Steinberg, the plaintiff received a

catalog from the defendant describing the criteria upon which it evaluated student applications.

       2
           Ironically, plaintiffs also distinguish Steinberg and argue that it is inapplicable to their

consumer-fraud argument.

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2019 IL App (2d) 180681

Steinberg, 69 Ill. 2d at 327. The plaintiff applied for admission, paid the application fee, and was

rejected. Steinberg, 69 Ill. 2d at 327. The plaintiff sued for breach of contract, alleging that the

defendant failed to use the criteria established in the catalog in evaluating his application.

Steinberg, 69 Ill. 2d at 327. The trial court dismissed the complaint, but the appellate court

reversed, holding that it stated a cause of action for breach of contract. Steinberg, 69 Ill. 2d at

328. Our supreme court affirmed the appellate court, holding that the catalog constituted an

invitation for an offer and that the plaintiff’s application and tender of payment was an offer to

apply according to the criteria established in the catalog. Steinberg, 69 Ill. 2d at 330, 343. The

defendant’s acceptance of the application and fee constituted acceptance of the offer. Steinberg,
69 Ill. 2d at 330. The court also held that the application fee was sufficient consideration to

support the agreement. Steinberg, 69 Ill. 2d at 330. Steinberg involved a bargain between private

parties rather than the fulfillment of a legal obligation and is thus distinguishable from our case.

¶ 16   While there is not any Illinois case on all fours, our research disclosed the Texas case of

Treviño & Gonzalez Co. v. R.F. Muller Co., 949 S.W.2d 39 (Tex. Ct. App. 1997). In Treviño &

Gonzalez, the plaintiff sued R.F. Muller Company and the city of Laredo, Texas, to recover

damages caused when the defendants installed a sewer line on the plaintiff’s property pursuant to

a building permit issued by the city. Treviño & Gonzalez, 949 S.W.2d at 40. The plaintiff argued

that the building permit operated as a contract between the city and Muller to which the plaintiff

was a third-party beneficiary. Treviño & Gonzalez, 949 S.W.2d at 40. The issue before the Court

of Appeals of Texas was whether a building permit constitutes a contract between the issuing

municipality and the permittee. Treviño & Gonzalez, 949 S.W.2d at 40. The court held that,

when a building permit is issued, “none of the elements of a contract are present.” Treviño &

Gonzalez, 949 S.W.2d at 42. “A building permit is simply a revocable and alterable license

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authorizing construction.” Treviño & Gonzalez, 949 S.W.2d at 42. Specifically, the court held

that the “application for an issuance of a building permit does not constitute a voluntary

agreement between the parties to enter into [a] binding contract.” Treviño & Gonzalez, 949
S.W.2d at 42. This is so, the court reasoned, because (1) a municipality has the power to impose

restrictions and to revoke such a permit pursuant to its police powers and (2) where a

municipality is required to issue a building permit to a qualified applicant, no consideration has

been exchanged for the permit. Treviño & Gonzalez, 949 S.W.2d at 42. The Treviño & Gonzalez

case essentially fleshes out the court’s reasoning in Village of Schaumburg, and we adopt both

cases in deciding the issue at bar. Accordingly, we hold that a building permit issued by a

municipality does not create a contract between the municipality and the permittee.

¶ 17   Furthermore, even if we were to apply contract law, DeBosz did not make an offer.

Plaintiffs desired to erect a structure, and they were obligated by a Village ordinance to apply for

a permit to do so. In that vein also, the application fee for the permit could not have constituted

consideration for a contract. Performing an act that one is legally obligated to do is not

consideration that could support a contract, because there is no detriment. Mulvey v. Carl

Sandburg High School, 2016 IL App (1st) 151615, ¶ 35. Accordingly, we hold that the court

properly dismissed with prejudice count I of the second amended complaint.

¶ 18                                  B. Violation of the Act

¶ 19   In count II of their second amended complaint, plaintiffs attempted to bring the

transaction within the Act. The Act is a regulatory and remedial statute that is intended to protect

consumers, borrowers, and business persons against fraud, unfair competition, and other unfair

or deceptive business practices. Robinson v. Toyota Motor Credit Corp., 201 Ill. 2d 403, 416-17

(2002). Unfair or deceptive practices include, but are not limited to, the use of any deception,

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fraud, false pretense, false promise, or misrepresentation, or the concealment, suppression, or

omission of any material fact with intent that others rely upon the concealment, suppression, or

omission in the conduct of any trade or commerce. 815 ILCS 505/2 (West 2016); Robinson, 201
Ill. 2d at 417. The elements of a claim under the Act are (1) a deceptive act or practice by the

defendant, (2) the defendant’s intent that the plaintiff rely on the deception, and (3) the

occurrence of the deception during a course of conduct involving trade or commerce. Robinson,
201 Ill. 2d at 417. Plaintiffs must show that the Village was engaged in trade or commerce and in

unfair or deceptive acts or practices in the conduct of that trade or commerce. See People ex rel.

Hartigan v. Knecht Services, Inc., 216 Ill. App. 3d 843, 853 (1991). The term “trade or

commerce” means the “advertising, offering for sale, sale, or distribution of any services and any

property, tangible or intangible, real, personal or mixed, and any other article, commodity, or

thing of value wherever situated, and shall include any trade or commerce directly or indirectly

affecting the people of this State.” 815 ILCS 505/1(f) (West 2016). Because we determine—

without opining on any of the other elements—that the Village was not engaged in trade or

commerce, count II of the second amended complaint fails.

¶ 20   Plaintiffs argue that the Village was engaged in trade or commerce because the issuing of

building permits directly or indirectly affects the people of the state. Plaintiffs offer the example

of a high rise that blocks the neighbors’ views. At oral argument, plaintiffs also argued that the

Village was engaged in trade or commerce because it offered its services in evaluating the permit

application and granting it. “[T]rade or commerce” must involve “advertising, offering for sale,

sale, or distribution of any services and any property.” (Internal quotation marks omitted.)

Chirikos v. Yellow Cab Co., 87 Ill. App. 3d 569, 577-78 (1980). The Village did not advertise or

offer anything for sale or sell anything. Specifically, the Village did not sell plaintiffs a building

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permit but merely collected a fee for its issuance pursuant to its power to regulate the

construction and use of buildings. To the extent that the Village serviced plaintiff’s request for a

permit, such service consisted of carrying out the Village’s regulatory and statutory functions.

¶ 21   The Act does not apply to a transaction involving a municipality’s regulatory and legal

powers. See Chirikos, 87 Ill. App. 3d at 578. In Chirikos, the plaintiff alleged that the City of

Chicago’s amendment of a taxicab ordinance to increase fares was induced by the defendant

taxicab companies’ violation of the Act where the defendants misrepresented data that led the

city council to enact the fare increase. Chirikos, 87 Ill. App. 3d at 571. In affirming the trial

court’s dismissal of the complaint, the appellate court stated that, “[a]ssuming the defendants did

deceptively mislead the city council ***, we cannot conclude this deception was practiced in

connection with trade or commerce.” Chirikos, 87 Ill. App. 3d at 578. The court noted that the

Act is “completely” limited to the conduct of trade or commerce and then concluded that

“discharge of a legislative function by an elected body is far afield from that category.” Chirikos,
87 Ill. App. 3d at 577-78. In our case, it is undisputed that the Village enacted an ordinance that

required compliance with the Village’s building codes. To that end, the Village issued a permit.

In our view, that transaction was as far afield from trade or commerce as that involved in

Chirikos.

¶ 22   Plaintiffs next insist, without citing authority, that we must take as true their allegations

that the Village violated the Act. While well-pleaded facts are taken as true (Villanueva, 373 Ill.

App. 3d at 802-03), conclusions of law or fact unsupported by specific factual allegations are not

taken as true (Lerma v. Rockford Blacktop Construction Co., 247 Ill. App. 3d 567, 571 (1993)).

¶ 23   Even were we to conclude that the Act applies, plaintiffs’ complaint is barred by the

statute of limitations. The Act provides that any action for damages must be commenced within

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three years after the cause of action accrued. 815 ILCS 505/10a(e) (West 2016); Sommer v.

United Savings Life Insurance Co., 128 Ill. App. 3d 808, 819 (1984). In their reply brief,

plaintiffs assert that they did not learn of their injury until “around” September 23, 2015, making

the filing of their suit on May 3, 2016, timely. The discovery rule applies to actions under the

Act, meaning that the statute of limitations begins to run when a person knows or reasonably

should know of his injury and also knows or reasonably should know that it was wrongfully

caused. Kopley Group V., L.P. v. Sheridan Edgewater Properties, Ltd., 376 Ill. App. 3d 1006,

1021 (2007). Here, plaintiffs had to have been aware of their injury when the County sued them

on March 6, 2013, informing them that they were in violation of a County ordinance, as that is

when they began to incur damages. Plaintiffs conceded this point when they pleaded that their

damages were those costs and fees incurred in defending themselves against the County’s suit.

Yet plaintiffs did not file suit until May 3, 2016, more than three years after they were aware of

the alleged injury. Accordingly, we affirm the court’s dismissal with prejudice of count II.

¶ 24                                   III. CONCLUSION

¶ 25   For the foregoing reasons, the judgment of the circuit court of McHenry County is

affirmed.

¶ 26   Affirmed.

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