Court Opinion

ID: 9735854
Source: CourtListenerOpinion
Date Created: 2023-08-26 18:33:01.929173+00
Date Added: 2024-06-11T18:27:01.985107
License: Public Domain

JUSTICE KILBRIDE, dissenting: The majority ignores the plain language of the Act and the undisputed facts of this case. The majority does not stop there. It also reads a requirement of “additional consideration” into the Act. 204 Ill. 2d at 322. Based on these fundamental errors, the majority concludes that Midstate is not a “credit services organization.” Because I cannot agree with that erroneous conclusion, I respectfully dissent. Initially, the majority cites the statutory definition of a credit services organization, encompassing “a person who *** in return for the payment of money or other valuable consideration” either obtains “an extension of credit for a buyer; or *** provid[es] advice or assistance to a buyer with regard to” obtaining an extension of credit. (Emphasis added.) 815 ILCS 605/3(d)(ii), (d)(iii) (West 1996); 204 Ill. 2d at 321. The majority also notes that the statutory definition of a “[bjuyer” is one “who is solicited to purchase or who purchases the services of a credit services organization.” 815 ILCS 605/3(a) (West 1996). After briefly acknowledging these definitions, however, the majority does not consider their application in this case, choosing instead to conclude summarily that Midstate is not a credit services organization because “the Credit Services Act requires payment for credit services, not simply payment for other goods or services.” 204 Ill. 2d at 322. This conclusion fails to analyze fully the key issue in this case, namely, whether Midstate’s conduct brings it within the statutory definition of a credit services organization. The majority omits a fundamental analytical step by not applying the Act to the relevant facts underlying the parties’ transaction. A complete analysis requires us to examine the undisputed facts in this case. When the Midstate sales representative who met the Rogers in their home informed them of the total cost of the remodeling project, the Rogers explained that they had limited income and could not afford the project. Mr. Rogers is disabled, with a gross income of only $9,540 per year, and Mrs. Rogers works as a nurse, earning an annual gross income of $19,760. As the majority admits (204 Ill. 2d at 322), the Rogers ultimately agreed to the contract only because Midstate offered its services to help them obtain third-party financing. The parties’ agreement indicated no cash payments and stated that the contract amount of $19,600 was subject to a loan. It disclosed no information about the applicable interest rates or monthly payment amount. Midstate concedes that it assisted the Rogers in securing a third-party loan. One of its sales representatives provided the Rogers with a credit application and directed them to complete it. The representative informed the couple that Midstate would obtain financing for them and that they would make monthly payments for approximately 15 years. Again, the representative failed to provide any information concerning the actual amount of the monthly payments. After the representative’s visit, a Midstate loan assistance employee reviewed the Rogers’ credit application. The employee testified that Midstate assists customers with financing and that her job is to help qualify customers for loans. In this capacity, she reviews more than 50 credit applications each week. In this case, she received the Rogers’ credit application, reviewed it, and then contacted a number of lending institutions on their behalf, forwarding their credit application in an effort to secure a loan. The first three institutions she contacted refused to extend credit to the Rogers. Eventually, Mid-state secured a loan commitment from Bank One at a rate of 11.35%, adjustable monthly, but the Rogers found this interest rate unacceptable. The record contains no evidence that the Rogers ever independently met, or otherwise undertook loan negotiations, with any lending institution. Thus, Midstate acted as a de facto representative for the Rogers in obtaining the loan commitment, for the mutual benefit of both parties. When we focus on the specific facts of the transaction between the parties in this case, we must conclude that Midstate’s actions went far beyond simply selling goods to the Rogers, as the majority claims. 204 111. 2d at 322. Midstate’s conduct fulfilled two of the Act’s key criteria, not only “providing advice or assistance to a buyer with regard to” “obtaining an extension of credit,” but also actually obtaining an extension of credit for the Rogers. See 815 ILCS 605/3(d)(ii), (d)(iii) (West 1996). The trial court properly found Midstate’s acts went beyond mere ancillary services performed in conjunction with a retail sale and fall squarely within the statutory definition of those provided by a “[cjredit services organization.” See 815 ILCS 605/3(d)(ii), (d)(iii) (West 1996). To determine whether Midstate itself was a credit service organization under the Act in this case, however, we must address two other, closely interrelated questions: (1) whether Midstate performed the credit services “in return for the payment of money or other valuable consideration” (emphasis added) (see 815 ILCS 605/3(d) (West 1996)) and (2) whether the Rogers were “buyers” under the statute, meaning that they either were “solicited to purchase” or actually purchased the services of a credit services organization (see 815 ILCS 605/3(a) (West 1996)). In answering these questions, the majority abruptly concludes that “the agreed consideration is for payment of windows and siding” and is not “in return for credit services provided by Midstate.” 204 Ill. 2d at 322. Based on that conclusion, the majority holds that Midstate is not a credit services organization. The majority’s rationale is belied, however, by its subsequent statement agreeing “with the circuit court that the Rogers would not have proceeded with the installation of the windows and siding without assistance in obtaining an extension of credit.” (Emphasis added.) 204 Ill. 2d at 322. The circuit court expressly found that “ ‘[i]n order to remain competitive, the Plaintiff [Midstate] offered a service to prospective buyers to assist them in obtaining financing to purchase siding and windows. In fact, the agreement between the Plaintiff and Defendant would never have been consummated had the Plaintiff not helped them obtain financing. The Plaintiff’s assistance was more than a mere service, but was part of the consideration to support the agreement.' ” (Emphases added.) See 204 Ill. 2d at 322. Despite its stated agreement with this finding, the majority nonetheless declares that “the Credit Services Act requires additional consideration for such assistance.” (Emphasis added.) 204 Ill. 2d at 322. This conclusion is unsupported by any language in the Act. Thus, the majority both overlooks the plain language of the statute and creates other requirements out of whole cloth, without any legal justification. The majority cites section 5 of the Act as consistent with this conclusion, but the connection between the two concepts remains unexplained. Section 5 prohibits credit services organizations from receiving valuable consideration solely for referring buyers to retail sellers who may extend credit “if such extension of credit is in substantially the same terms as those available to the general public.” 815 ILCS 605/5 (West 1996). First, there is nothing in the record to suggest that this case meets the criteria in section 5. Indeed, the record strongly suggests the opposite conclusion, i.e., the Rogers would not have been able to obtain the necessary financing “in substantially the same terms as those available to the general public.” Thus, section 5 is not implicated in this case. Even more importantly, section 5 appears completely unrelated to the majority’s finding that “the Credit Services Act requires additional consideration” for Mid-state’s assistance in obtaining financing for the Rogers. 204 Ill. 2d at 322. As the majority aptly notes (204 Ill. 2d at 320), we must not depart from a statute’s plain language by reading into it exceptions, limitations, or conditions not clearly intended by the legislature. See Bridgestone/Firestone, Inc. v. Aldridge, 179 Ill. 2d 141, 149 (1997). Yet, the majority departs from this same fundamental rule of construction by reading into the Act a requirement that an agreement to assist another in obtaining third-party financing be accompanied by some form of “additional consideration.” See 204 Ill. 2d at 322. The majority does not, and cannot, point to any language in the Act supporting this limitation. Contrary to the majority’s rationale, to bring a credit services organization within the ambit of the Act does not require any additional monetary payment for performing the credit-related services. The Act expressly requires only that the services be provided “in return for the payment of money or other valuable consideration.” (Emphasis added.) 815 ILCS 605/3(d) (West 1996). Here, Midstate induced the Rogers to enter into the remodeling project by offering to arrange a loan for them, and it subsequently fulfilled this promise. As the majority admits, the Rogers’ agreement to proceed with the contract was strictly contingent on Midstate’s proffered assistance in obtaining credit. 204 Ill. 2d at 322. By expressly agreeing with the trial court’s finding that “the Rogers would not have proceeded” with the contract without Midstate’s substantial assistance in obtaining the requisite financing (204 Ill. 2d at 322), the majority also implicitly acknowledges that Midstate’s credit assistance was in fact supported by “other valuable consideration” (see 815 ILCS 605/3(d) (West 1996)), i.e., the Rogers’ ultimate agreement to enter into the remodeling contract. This acknowledgment contradicts the majority’s conclusion that Midstate’s credit services were gratuitous and not supported by “additional consideration” (204 Ill. 2d at 322). As the majority admits, Mid-state’s assistance constituted an integral part of the parties’ contract, received in exchange for valuable consideration. By giving “other valuable consideration” for Mid-state’s proffered credit services, in addition to the promise of monetary payment for windows and siding as noted by the majority (204 Ill. 2d at 322), the Rogers were “buyers” under the Act. 815 ILCS 605/3(a) (West 1996) (defining a “[bjuyer” as one “who is solicited to purchase *** the services of a credit services organization). Under these facts, Midstate clearly falls within the statutory definition of a “credit services organization,” with the Rogers acting as “buyers” of that organization’s credit services. See 815 ILCS 605/3(a), (d) (West 1996). Therefore, the parties agreed to the provision of credit services “in return for the payment of *** other valuable consideration” (815 ILCS 605/3(d) (West 1996)), and their transaction was governed by the Act. Holding that Midstate’s conduct in this case qualified it as a credit services organization is consistent with the Act’s stated goal of providing “prospective consumers of credit services companies with the information necessary to make an informed decision regarding the purchase of those services and to protect the public from unfair or deceptive advertising and business practices.” 815 ILCS 605/2(b) (West 1996). These protections were prompted by “[cjertain advertising and business practices of some companies engaged in the business of credit services [that] have worked a financial hardship upon the people of this State, often on those who are of limited economic means and inexperienced in credit matters.” 815 ILCS 605/2(a) (West 1996). As prospective consumers of Midstate’s credit services, the Rogers were entitled to these protections. As a credit services organization, Midstate was bound by the statutory mandates contained in sections 6 and 7 of the Act (815 ILCS 605/6, 7 (West 1996)). Since the parties’ contract failed to comply with the mandatory terms of the statute, including the requirement of full disclosure of “the terms and conditions of payment, including the total of all payments to be made by the buyer” (815 ILCS 605/7 (West 1996)), it violated the statute. “Any contract for services which does not comply with applicable provisions of [the Act] shall be void and unenforceable as contrary to public policy.” 815 ILCS 605/8 (West 1996). For this reason, the trial court and the appellate court properly deemed the contract void and awarded the Rogers attorney fees under section 11 of the Act (815 ILCS 605/11 (West 1996)). I would affirm the appellate court on this issue and remand the cause to the trial court with instructions to award reasonable attorney fees in favor of the Rogers. I also believe the trial court’s ruling could be affirmed on the alternative basis that the contract violated the Consumer Fraud and Deceptive Business Practices Act (Fraud Act) (815 ILCS 505/1 et seq. (West 1996)). The Rogers raised this issue in their counterclaim, but the trial and appellate courts did not address it. The Fraud Act provides that “the use or employment of any *** misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon” it constitutes an “[u]nfair method[ ] of competition and unfair or deceptive act[ ] or practice[ ].” 815 ILCS 505/2 (West 1996). Such conduct is unlawful regardless of “whether any person has in fact been misled, deceived or damaged thereby.” 815 ILCS 505/2 (West 1996). In this case, the contractual interest rate was undoubtedly a material fact, but it was not disclosed when the Rogers entered into the agreement with Mid-state. Because Midstate omitted the applicable interest rate from the contract, it violated the Fraud Act. For this reason, I would affirm the award of attorney fees to the Rogers pursuant to section 10a(c) of the Fraud Act (815 ILCS 505/10a(c) (West 1996)).