Court Opinion

ID: 3147986
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:40:13.476649+00
Date Added: 2024-06-11T12:14:52.060127
License: Public Domain

ILLINOIS OFFICIAL REPORTS
                                         Appellate Court

                           People v. Smith, 2012 IL App (1st) 113591

Appellate Court            THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v.
Caption                    STEVEN R. SMITH, Defendant-Appellant (Boss Construction, Inc., an
                           Illinois corporation; and Boss Home Improvement, Inc., an Illinois
                           corporation; Defendants).

District & No.             First District, First Division
                           Docket No. 1-11-3591

Filed                      October 22, 2012

Held                       The trial court did not abuse its discretion by enjoining defendant from
(Note: This syllabus       future home repair or remodeling work in Illinois based on his violations
constitutes no part of     of the Consumer Fraud Act, the Roofing Act and the Home Repair Act.
the opinion of the court
but has been prepared
by the Reporter of
Decisions for the
convenience of the
reader.)

Decision Under             Appeal from the Circuit Court of Cook County, No. 09-CH-15913; the
Review                     Hon. Kathleen M. Pantle, Judge, presiding.

Judgment                   Affirmed.
Counsel on                  Querrey & Harrow, Ltd., of Chicago (Christopher P. Keleher, of counsel),
Appeal                      for appellant.

                            Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro,
                            Solicitor General, and Clifford W. Berlow, Assistant Attorney General,
                            of counsel), for the People.

Panel                       PRESIDING JUSTICE HOFFMAN delivered the judgment of the court,
                            with opinion.
                            Justices Karnezis and Rochford concurred in the judgment and opinion.

                                               OPINION

¶1           The appellant, Steven Smith, appeals from the circuit court’s ruling granting summary
        judgment in favor of the State on its complaint against him and two corporations for which
        he was an agent, Boss Construction, Inc., and Boss Home Improvement, Inc. The
        corporations are not parties to this appeal. The complaint alleged that the defendants violated
        section 2 of the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud
        Act) (815 ILCS 505/2 (West 2008)), section 20 of the Home Repair and Remodeling Act
        (Home Repair Act) (815 ILCS 513/20 (West 2008)), and section 9 of the Illinois Roofing
        Industry Licensing Act (Roofing Act) (225 ILCS 335/9 (West 2008)). On appeal, the
        appellant argues that the circuit court erred because (1) it failed to require that the State prove
        his intent to defraud as a predicate to its Consumer Fraud Act ruling; (2) to find him liable
        under the Roofing Act, it relied on a finding that he was not licensed, in spite of the fact that
        entities and workers related to his business were licensed; and (3) it imposed too harsh a
        remedy when it permanently enjoined him from future home repair or remodeling work in
        Illinois. For the reasons that follow, we affirm the circuit court’s judgment.
¶2           In April 2009, the State filed a complaint alleging that the defendants were in the
        business of providing home repair services, including roofing services, despite the fact that
        none of them were licensed roofing contractors. The complaint further alleged that the
        defendants did not provide customers with an informational pamphlet as required by the
        Home Repair Act (815 ILCS 513/20 (West 2008)) or with a form notifying them of their
        right to cancel as required by the Consumer Fraud Act (815 ILCS 505/2B (West 2008)).
        According to the complaint, the defendants took at least partial payment for several jobs but
        then failed to complete them as promised and refused to refund any payment.
¶3           For illustrative purposes, the complaint recounted the experiences of several consumers
        who had dealt with the defendants. For example, the complaint alleged, the defendants’
        salesperson told Philip and Jeanette Bradley in June 2008 that the defendants could complete
        their roof, soffit, gutter, window, and siding work for $49,000. The Bradleys took out a loan

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     for the money, signed a contract, and paid a $24,500 deposit. The complaint alleged that they
     were never given an informational pamphlet. When the project was delayed, the defendants’
     salesperson attributed the delays to problems in the permit process and the fact that their
     window order had not yet been delivered. By the end of August, 2008, the appellant told the
     Bradleys that the windows were still causing delays, and he scheduled their work to begin
     on September 11. That start date was later moved to September 15 for weather reasons, but
     the project was not started on that date. At that point, the complaint states, Philip Bradley
     contacted his village to determine the status of their permit application, and he was told that
     the defendants had not even submitted a permit application and that the defendants’ business
     license had expired. The defendants were thereafter unable to produce an invoice for the
     windows, and they again failed to appear for a new, October 6, project start date.
¶4        According to the narrative in the complaint, the appellant suggested on October 7 that the
     Bradleys void the contract and pay a subcontractor $12,000 to perform all the work except
     for the windows. The Bradleys declined this suggestion and sought a refund of their deposit.
     The complaint states that the appellant “refused to issue a refund, stating, ‘get in line.’ ” It
     also states that the defendants never issued a refund to the Bradleys or performed any work
     for them.
¶5        Based on these allegations, as well as other similar allegations relating to other
     homeowners, the complaint asserted counts based on the Consumer Fraud Act, the Home
     Repair Act, and the Roofing Act. On the first two counts, the complaint sought civil
     penalties, and on all three counts, the State sought an injunction permanently barring the
     defendants from engaging in any home repair or remodeling within Illinois.
¶6        The appellant filed a pro se answer to the complaint, but that answer included no
     response to the final six paragraphs of the complaint, which were among seven paragraphs
     contained in the three separate counts of the complaint following prefatory facts and
     materials. Those final six paragraphs alleged that, for the above reasons, the defendants
     violated the Consumer Fraud Act, that the defendants “in the course of advertising, offering
     for sale, selling and providing home repair, improvement and roofing services” violated the
     Home Repair Act, and that the defendants “violated Section 9 of the [Roofing Act] by
     engaging in the business of a roofing contractor, without having been duly licensed.” The
     appellant retained counsel after he filed his answer.
¶7        The State thereafter filed a motion for summary judgment on all three counts of its
     complaint. In that motion, the State asserted that its material allegations had been established
     by evidence adduced in discovery, affidavits from consumers who had dealt with the
     appellant, the appellant’s admissions in his answer, and the appellant’s responses to
     interrogatories. In concert with those arguments, the State argued that the appellant’s failure
     to answer certain of the complaint’s allegations should be deemed an admission of those
     allegations.
¶8        Attached to the motion for summary judgment was an excerpt of deposition testimony
     in which the appellant stated that he owned and operated Boss Construction and Boss Home
     Improvement, as well as a third business, Boss Roofing and Sheet Metal. The appellant
     explained that he was not a licensed roofer and that Chuck Zalewski, the man who ran the

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       day-to-day operations of the roofing business, “had taken the test[ ] [a]nd the license was
       under Boss Roofing & Sheet Metal.” The appellant insisted that his roofing work was run
       entirely by Zalewski.
¶9         The appellant agreed that his companies advertised in order to obtain customers. During
       the deposition, the appellant recounted his companies’ dealings with several customers, and
       he agreed that Boss Home Improvement entered into contracts to provide roofing and other
       home repair services to consumers but then failed to perform the work. He agreed that he had
       received deposits from customers but then did no work and gave no refunds, and he often
       answered that he could not recall or did not know whether his companies gave consumers
       the statutorily required pamphlet or a notice of the right to cancel. Also attached to the
       motion for summary judgment were affidavits from consumers who had lost their deposits
       to the defendants and who stated that the defendants did not provide them with the brochure
       or notice of their right to cancel.
¶ 10       In his response to the motion for summary judgment, the defendant argued that he could
       not have violated the Consumer Fraud Act, because the State had not established his intent
       to defraud. He argued that he did not violate the Roofing Act, because all of Boss Home
       Improvement roofing work was completed by licensed roofing subcontractors or overseen
       by Zalewski, who was licensed. In response to the State’s request that the appellant’s failure
       to answer certain allegations be deemed an admission of those allegations, the appellant
       noted that he filed his answer without the assistance of a lawyer. He offered that his denials
       in response to the State’s summary judgment motion represented his true position on the
       omitted matters, and he asked that the court allow the statements in his response to stand as
       his answer. In an affidavit attached to his response, the appellant attributed his companies’
       difficulties to dire economic conditions that made it more difficult to obtain materials or lines
       of credit.
¶ 11       In a November 2011 written order, the circuit court granted summary judgment to the
       State. In that order, the circuit court noted that the appellant did not refute the State’s central
       narrative describing his taking consumers’ deposits and failing to provide statutorily required
       paperwork. The court also noted the appellant’s request to amend his answer to deny the final
       six paragraphs of the complaint, but the court denied leave to amend on the grounds that (1)
       the appellant never filed a “proper” motion to amend, (2) aside from pointing out that he was
       representing himself, the appellant offered no reason for his failure to respond fully to the
       complaint, and (3) the appellant responded to the other paragraphs of the complaint and
       thereby demonstrated his ability to respond, (4) the appellant had been represented by
       counsel long before he sought leave to amend his answer, and (5) pro se status does not
       excuse compliance with procedural rules.
¶ 12       Based on the undisputed facts, the circuit court concluded that the defendants violated
       the Consumer Fraud Act by taking customer deposits after their financial troubles began, so
       that they could “ ‘rob[ ] Peter to pay Paul.’ ” The court further ruled that the defendants
       violated the Consumer Fraud Act by failing to provide notice to consumers of their right to
       cancel their contracts. On the Home Repair Act claim, the court ruled the evidence
       undisputed that the defendants failed to provide the statutorily required pamphlets to
       customers. On the Roofing Act claim, the court ruled that, even if the defendants did not do

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       roofing work themselves, they advertised and offered roofing work despite having no
       licenses. Based on these conclusions, the court imposed a civil penalty against the defendants
       in the amount of $50,000, a penalty the court noted could be imposed under the Consumer
       Fraud Act without evidence of intent. The court also permanently enjoined the defendants
       from engaging in home repair or remodeling work in Illinois. The appellant now appeals the
       circuit court’s ruling.
¶ 13        The appellant’s first argument on appeal is that the circuit court erred in granting the
       State summary judgment on the counts of its complaint alleging violations of the Consumer
       Fraud Act and the Home Repair Act. According to the appellant, both statutes require proof
       of intent as a predicate to liability.
¶ 14        Summary judgment is proper where “the pleadings, depositions, and admissions on file,
       together with the affidavits, if any, show that there is no genuine issue as to any material fact
       and that the moving party is entitled to a judgment as a matter of law.” 735 ILCS 5/2-1005(c)
       (West 2010). “The function of a reviewing court on appeal from a grant of summary
       judgment is limited to determining whether the trial court correctly concluded that no
       genuine issue of material fact was raised and, if none was raised, whether judgment as a
       matter of law was correctly entered.” American Family Mutual Insurance Co. v. Page, 366
       Ill. App. 3d 1112, 1115, 852 N.E.2d 874 (2006). “The propriety of a trial court’s decision to
       grant summary judgment presents a question of law, which we review de novo.” Bigelow
       Group, Inc. v. Rickert, 377 Ill. App. 3d 165, 168, 877 N.E.2d 1171 (2007).
¶ 15        We begin by examining the Consumer Fraud Act, which declares unlawful “[u]nfair
       methods of competition and unfair or deceptive acts or practices, including but not limited
       to the use or employment of any deception, fraud, false pretense, false promise,
       misrepresentation or the concealment, suppression or omission of any material fact, with the
       intent that others rely upon the concealment, suppression or omission of such material fact,
       or the use or employment of any practice described in Section 2 of the ‘Uniform Deceptive
       Trade Practices Act’, *** in the conduct of any trade or commerce.” 815 ILCS 505/2 (West
       2008). The appellant does not now dispute that he used or employed one of these deceptive
       practices in the conduct of a trade or commerce. Instead, he directs us to section 7 of the
       Consumer Fraud Act, which lays out remedies and penalties applicable to violations of the
       Act.
¶ 16        Section 7(a) empowers a court to impose injunctive relief. See 815 ILCS 505/7(a) (West
       2008). Section 7(b) allows civil penalties, and it provides as follows:
            “In addition to the remedies provided herein, *** the Court may impose a civil penalty
            in a sum not to exceed $50,000 against any person found by the Court to have engaged
            in any method, act or practice declared unlawful under this Act. In the event the court
            finds the method, act or practice to have been entered into with the intent to defraud, the
            court has the authority to impose a civil penalty in a sum not to exceed $50,000 per
            violation.” 815 ILCS 505/7(b) (West 2008).
¶ 17        In making its ruling, the circuit court carefully noted that it was limiting its civil penalties
       ruling to a single $50,000 penalty, rather than a “$50,000 per violation” penalty that would
       have required a finding of intent to defraud. The appellant argues, however, that even a single

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       $50,000 penalty requires intent to defraud. We disagree.
¶ 18        It is by now well established that “[t]he intent required by the Consumer Fraud Act ‘is
       merely the defendant’s intent that the plaintiff in the action rely on the *** information [the]
       defendant gave to plaintiff, as opposed to any intent *** to deceive’ as required under the
       common law.” Miller v. William Chevrolet/Geo, Inc., 326 Ill. App. 3d 642, 655, 762 N.E.2d
       1 (2001) (quoting Breckenridge v. Cambridge Homes, Inc., 246 Ill. App. 3d 810, 822, 616
       N.E.2d 615 (1993)). Thus, the appellant is wrong when he argues that the Consumer Fraud
       Act required his intent to defraud here.
¶ 19        The appellant also argues that a finding that he possessed intent to defraud is required
       under the Home Repair Act. However, he cites no statutory language or case law for this
       proposition, and we find none ourselves. See 815 ILCS 513/20 (West 2008) (requiring the
       pamphlet but mentioning no intent element); 815 ILCS 513/35(b) (West 2008) (incorporating
       the penalties and remedies provisions of the Consumer Fraud Act into the Home Repair Act).
       It is a fundamental principle of statutory interpretation that a court must not read into a
       statute additional elements not intended by the legislature. In re Andrew B., 237 Ill. 2d 340,
       352, 930 N.E.2d 934 (2010). The legislature omitted any “intent to defraud” element from
       the Home Repair Act, and we will not now add one.
¶ 20        In a related argument, the appellant asserts that we must reverse the circuit court’s Home
       Repair Act judgment because there remained at least a question of fact as to whether he
       knowingly failed to give consumers the informational pamphlet required by the statute.
       However, as the State notes on appeal, the appellant did not raise this argument at the circuit
       court level. As a result, we agree with the State that the appellant has forfeited the argument.
       E.g., Village of Palatine v. Palatine Associates, LLC, 2012 IL App (1st) 102707, ¶ 64, 966
       N.E.2d 1174 (“An argument that has not been raised in the trial court cannot be raised for the
       first time on appeal, even in the case of a summary judgment.”). For these reasons, we reject
       the appellant’s argument that he possessed insufficient intent to be held liable under the
       Consumer Fraud Act or the Home Repair Act.
¶ 21        The appellant’s second argument on appeal is that the circuit court erred in finding him
       liable under the Roofing Act, because, to do so, it relied on a finding that he was not
       licensed, in spite of the fact that entities and workers related to his business were licensed.
       However, the circuit court based its ruling on this point on the idea that, by failing to answer
       certain allegations of the State’s complaint, the appellant had admitted the allegations
       relevant to the Roofing Act. In so ruling, the circuit court denied the appellant leave to amend
       his answer to respond to the unanswered allegations. In his briefs to this court, the appellant
       does not even mention, much less challenge, the circuit court’s decision to deny him leave
       to amend his answer. Thus, we will not disturb the circuit court’s decision on that point.
¶ 22        On the larger point, the circuit court is correct that a party’s failure to answer an
       allegation results in an admission of that allegation. See 735 ILCS 5/2-610(b) (West 2008)
       (“[e]very allegation *** not explicitly denied is admitted”). As a result, the appellant here
       admitted that he “violated Section 9 of the [Roofing Act] by engaging in the business of a
       roofing contractor, without having been duly licensed.” Based on this admission, we must
       uphold the circuit court’s ruling that he violated the Roofing Act.

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¶ 23        The appellant’s final argument on appeal is that the circuit court imposed an unduly harsh
       injunction permanently barring him from performing any home repair work in the State of
       Illinois. There can be no dispute that the circuit court was empowered to impose an
       injunction against the appellant under section 7(a) of the Consumer Fraud Act. 815 ILCS
       505/7(a) (West 2008). The decision to impose an injunction rested within the discretion of
       the circuit court. See 815 ILCS 505/7(a) (West 2008) (“The Court, in its discretion,” may
       impose an injunction.). We will not disturb the circuit court’s exercise of discretion absent
       an abuse of discretion, that is, absent a showing that no reasonable person could agree with
       the circuit court’s decision. See DMS Pharmaceutical Group v. County of Cook, 345 Ill.
       App. 3d 430, 445, 803 N.E.2d 151 (2003) (applying abuse of discretion standard of review
       to a decision to impose a permanent injunction); Wade v. Wade, 2012 IL App (1st) 111203,
       ¶ 13 (defining the abuse-of-discretion standard).
¶ 24        Generally, an injunction should be reasonable and should be only as broad as is essential
       to safeguard the rights at issue. See Village of Wilsonville v. SCA Services, Inc., 86 Ill. 2d 1,
       29, 426 N.E.2d 824 (1981). The appellant asserts that the circuit court’s injunction decision
       was unduly harsh because it barred him from performing an otherwise lawful activity upon
       which he depended for his livelihood. To make this argument, the appellant relies on the
       Seventh Circuit’s decision in People ex rel. Hartigan v. Peters, 871 F.2d 1336 (7th Cir.
       1989). In Peters, the defendant was accused of rolling back the mileage readings on
       automobile odometers and then reselling the automobiles under assumed names. Peters, 871
       F.2d at 1338. The district court entered an injunction barring the defendant from “buying or
       selling any motor vehicle other than his own personal vehicle; withdrawing or transferring
       money from his two known bank accounts; removing, destroying or disposing of any of his
       [personal] property [or permitting another entity to do the same]; *** and expending any
       amount of money in excess of $100 without prior approval from a court-appointed receiver.”
       Peters, 871 F.2d at 1343-44. The Seventh Circuit held that the injunction was overbroad,
       because it “prevent[ed] [the defendant] from engaging in activity that most people would
       consider normal and lawful–such as discarding an old newspaper or paying for automobile
       insurance without the receiver’s permission.” Peters, 871 F.2d at 1344. The Seventh Circuit
       continued: “Even given [the defendant’s] propensity to discard important documents, the
       court cannot enjoin him from engaging in conduct unassociated with the illegal practices he
       is accused of committing. [The defendant] must be given some leeway to cover his basic
       living expenses ***.” Peters, 871 F.2d at 1344.
¶ 25        By analogy to Peters, the appellant argues that the injunction here should be invalidated
       because it prevents him from partaking in a legal activity (home repair and remodeling) and
       curtails his ability to earn a living. However, the injunction in Peters failed not because it
       barred otherwise legal acts (all injunctions do if they have any use) or because it interfered
       with the defendant’s ability to earn a living, but because the enjoined activity was unrelated
       to the defendant’s illegal practices. That is, the problem in Peters was that the district court
       barred the defendant not only from buying and selling cars–the activity underlying his illegal
       acts–but also from a variety of unremarkable and unrelated quotidian tasks that are necessary
       to everyday life. As the State points out in its brief, the injunction in this case does not suffer
       from the same infirmity. The appellant engaged in a widespread practice of accepting

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       deposits from customers but then neither performing agreed-to home repair work nor
       refunding the deposits. The circuit court’s injunction barring him from engaging in future
       home repair business addresses this very issue, and prevents its recurrence. The circuit court
       added no more prohibitions to the injunction, and it certainly added nothing as onerous and
       impractical as the injunction described in Peters. Thus, here, unlike in Peters, the circuit
       court limited the scope of the injunction to the activity underlying the appellant’s illegal acts.
       As a result, we find Peters to be distinguishable from the current case, and we reject the
       appellant’s argument that his injunction is invalid under Peters.
¶ 26       In his reply brief, the appellant contends that the injunction violates the language of the
       Consumer Fraud Act. The appellant argues that the Consumer Fraud Act allows injunctions
       only to restrain the use of “method[s], act[s] or practice[s]” that violate the statute. See 815
       ILCS 505/7(a) (West 2008). However, the appellant raises this argument for the first time
       in his reply brief. “It is axiomatic that arguments raised for the first time in a reply brief are
       waived.” Salerno v. Innovative Surveillance Technology, Inc., 402 Ill. App. 3d 490, 502, 932
       N.E.2d 101 (2010); see Ill. S. Ct. R. 341 (eff. July 1, 2008). For that reason, we deem the
       appellant’s contention forfeited, and we do not consider it further.
¶ 27       The appellant offers no other reason the injunction here should be considered an abuse
       of discretion, and we find none ourselves. Accordingly, we reject the appellant’s assertion
       that the injunction imposed against him constituted an abuse of the circuit court’s discretion.
¶ 28       Based on the above discussion, we affirm the judgment of the circuit court.

¶ 29       Affirmed.

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