Robinson v. Point One Toyota, Evanston , 984 N.E.2d 508 ( 2012 )

ILLINOIS OFFICIAL REPORTS
Appellate Court
Robinson v. Point One Toyota, Evanston, 2012 IL App (1st) 111889Appellate Court EMMA J. ROBINSON and LATANYA KEMP, Plaintiffs-Appellants
Caption and Cross-Appellees, v. POINT ONE TOYOTA, EVANSTON,
Defendant (Toyota Motor Credit Corporation and River Oaks Toyota,
Defendants-Appellees and Cross-Appellants).
District & No. First District, Sixth Division
Docket Nos. 1-11-1889, 1-11-2482, 1-11-2522 cons.
Filed December 28, 2012
Rehearing denied January 31, 2013
Held Summary judgment was properly entered for defendants on plaintiffs’
(Note: This syllabus claims that defendants’ automobile lease agreements violated the
constitutes no part of disclosure requirements of the Consumer Leasing Act and Regulation M
the opinion of the court because they were confusing, ambiguous, and not subject to being
but has been prepared understood by inexperienced consumers, notwithstanding plaintiffs’
by the Reporter of contention that the uncontradicted affidavits of plaintiffs’ experts made
Decisions for the summary judgment erroneous, since the experts’ conclusions that the
convenience of the agreements could not be understood did not require a finding that the
reader.)
disclosure requirements were violated.
Decision Under Appeal from the Circuit Court of Cook County, No. 95-M3-3372; the
Review Hon. Daniel T. Gillespie, Judge, presiding.
Judgment Affirmed in part, reversed in part, and vacated in part; cause remanded
with directions.
Counsel on Joseph A. Longo, of Longo & Associates, of Mt. Prospect, for appellants.
Appeal
Thomas M. Crisham, David J. Sullivan, and Clare J. Quish, all of
Schuyler, Roche & Crisham, P.C., of Chicago, for appellees.
Panel JUSTICE HALL delivered the judgment of the court, with opinion.
Presiding Justice Lampkin and Justice Reyes concurred in the judgment
and opinion.
OPINION
¶1 The plaintiffs, Emma J. Robinson and Latanya Kemp, appeal from an order of the circuit
court of Cook County awarding partial summary judgment to the defendants, Toyota Motor
Credit Corporation (TMCC) and River Oaks Toyota on the plaintiffs’ joint claims under the
federal Consumer Leasing Act of 1976 (15 U.S.C. §§ 1667a, 1667b (1994)) (the CLA). The
defendants filed a cross-appeal and a separate appeal challenging the circuit court’s
jurisdiction.
¶2 On appeal, the plaintiffs raise the following issues: (1) the award of summary judgment
to the defendants on the plaintiffs’ joint default penalties claim was error; (2) the circuit court
erred when it refused to award the plaintiffs statutory damages on each disclosure violation
and failed to award them any statutory damages for nondisclosure violations; (3) the circuit
court erred by allowing TMCC to raise a setoff claim for the first time at trial; (4) the circuit
court erred when it denied the plaintiffs’ request for actual damages; (5) the circuit court
erred when it denied the plaintiffs’ motion to compel the defendants to answer written
discovery and appear for depositions; (6) the circuit court erred by failing to compel the
defendants to resolve disagreements with the plaintiffs’ attorney’s time records and to
compel the defendants to disclose their attorneys’ time records; and (7) the circuit court erred
when it failed to consider the uncontroverted affidavits of the plaintiffs’ experts and the case
law in determining the award of attorney fees. On cross-appeal, the defendants contend that
the circuit court erred in granting partial summary judgment to the plaintiffs’ joint lease
termination and failure to itemize claims. In a separate appeal, the defendants contend that
the circuit court lacked jurisdiction to award additional attorney fees and costs to the
plaintiffs because the plaintiffs’ motion for additional fees and costs was filed more than 30
days after the final order was entered in the case.
¶3 BACKGROUND
¶4 I. Prior History
¶5 The factual background of this case is detailed in the prior opinions of this court and our
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supreme court. See Robinson v. Toyota Motor Credit Corp., 201 Ill. 2d 403 (2002); Robinson
v. Toyota Motor Credit Corp., 315 Ill. App. 3d 1086 (2000). Therefore, we need only recite
the facts pertinent to the issues raised in this case.
¶6 In 1993, each plaintiff entered into a vehicle leasing agreement with a Toyota dealership:
Ms. Robinson with River Oaks and Ms. Kemp with Point One. The leasing agreements were
assigned to TMCC. In 1995, the plaintiffs filed suit against the defendants, alleging
violations of the CLA and the Illinois Consumer Fraud and Deceptive Business Practices Act
(Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 1992)). The case was dismissed based
on a pending class action suit against TMCC in California but was later reinstated in the
circuit court.
¶7 The plaintiffs filed a second amended complaint alleging violations of the CLA, the
Consumer Fraud Act, and the Uniform Deceptive Trade Practices Act (815 ILCS 510/1 et
seq. (West 1994)). Ms. Kemp’s individual claim under the CLA for failure to disclose the
actual amount of sales tax owed was also alleged as a breach of contract. The circuit court
dismissed the CLA claims on res judicata grounds; the state claims and Ms. Kemp’s breach
of contract claim were dismissed for failure to state a cause of action.
¶8 On appeal from the circuit court’s dismissal of the second amended complaint, this court
ruled that res judicata barred the plaintiffs’ joint CLA claims. We affirmed the circuit court’s
dismissal of the state claims but reversed the dismissal of the breach of contract claim.
Robinson, 315 Ill. App. 3d 1086. On further review, the supreme court held that the joint
CLA claims were not barred by res judicata but agreed that the plaintiffs failed to state a
claim for violations of the Consumer Fraud Act. Accordingly, the supreme court reversed the
judgment of this court and remanded the cause to the circuit court for further proceedings on
the CLA counts. Robinson, 201 Ill. 2d at 423.1
¶9 II. Circuit Court Proceedings on Remand
¶ 10 The circuit court granted in part TMCC’s motion to dismiss the second amended
complaint. The plaintiffs then filed a third amended complaint. Pertinent to this appeal, the
plaintiffs alleged that the following provisions of the leasing agreement violated the CLA’s
disclosure requirements: default penalties, voluntary termination of the lease, and itemization
of other charges to be paid by the plaintiffs.
¶ 11 Both parties moved for partial summary judgment. Initially, the circuit court denied both
motions because of disputed factual issues. After the parties stipulated to all the material
facts, on reconsideration, the court granted summary judgment to the plaintiffs on their lease
termination and their itemization of other charges claim and Ms. Kemp’s individual CLA
claim. The defendants’ motion for partial summary judgment on those claims was denied.
The court then granted the defendants’ partial summary judgment motion on the plaintiffs’
default provisions claim and denied the plaintiffs’ motion for partial summary judgment as
1
The supreme court noted that the defendants did not challenge this court’s ruling reversing
the dismissal of the breach of contract claim. Robinson, 201 Ill. 2d at 406. The breach of contract
count raised the same claim as Ms. Kemp’s individual CLA claim.
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to that claim.
¶ 12 Following an evidentiary hearing, the circuit court denied the plaintiffs’ request for actual
damages, except for the sales tax to be refunded to Ms. Kemp and awarded each plaintiff
statutory damages in the amount of $1,000, based on the failure to disclose. 15 U.S.C. § 1640(1994). On April 8, 2011, the court entered an order awarding Ms. Robinson $1,000 and Ms.
Kemp $1,596, based on the setoff of the $500 settlement amount she received from Point
One.
¶ 13 On June 10, 2011, the circuit court awarded the plaintiffs $113,280 in attorney fees and
costs of $420. The plaintiffs filed their notice of appeal from the June 10, 2011, order on July
7, 2011. The defendants filed separate cross-appeals on July 15, 2011. On July 29, 2011, the
circuit court entered an order correcting the amount of the award of attorney fees to $150,780
against the defendants and awarding attorney fees of $780 to the plaintiffs against River
Oaks. The defendants filed notices of appeal from the July 29, 2011, order. On November
8, 2011, this court entered an order consolidating the appeals.
¶ 14 ANALYSIS
¶ 15 We first address the jurisdictional issue raised in the defendants’ separate appeal.
¶ 16 I. Jurisdiction
¶ 17 The defendants contend that the circuit court lacked jurisdiction to award attorney fees
and costs in its July 29, 2011, order because the plaintiffs’ motion for fees and costs was filed
on July 25, 2011, which was more than 30 days after the entry of the June 10, 2011, final
judgment order. The plaintiffs respond that the circuit court had jurisdiction to correct a
miscalculation it made in its determination of attorney fees and costs award.
¶ 18 Absent a timely filed posttrial motion, a trial court loses jurisdiction over a case pending
before it 30 days after the entry of a final judgment terminating the litigation. Holwell v.
Zenith Electronics Corp., 334 Ill. App. 3d 917, 922 (2002). After the expiration of that 30-
day period, the trial court lacks the necessary jurisdiction to amend, modify or vacate its
judgment. Holwell, 334 Ill. App. 3d at 922. There are recognized exceptions to that
jurisdictional rule; a court may at any time modify its judgment to correct a clerical error or
matter of form so that the record conforms to the judgment actually rendered. Holwell, 334
Ill. App. 3d at 922. “This power may not, however, be employed to correct judicial errors or
supply omitted judicial action.” Holwell, 334 Ill. App. 3d at 922. A judicial error occurs
when the judge commits an error in performing a judicial function. In re Marriage of Takata,
304 Ill. App. 3d 85, 92 (1999).
¶ 19 The July 29, 2011, order provided in pertinent part as follows:
“1. The Court’s June 10, 2011 order is corrected to change the amount of attorney’s
fees awarded in favor of Plaintiffs and against TMCC and River Oaks from $113,280 to
$150,780 based upon the inadvertent omission of 125 hours at $300 per hour.
2. The Court’s June 10, 2011 order is further corrected to include an award of
attorney’s fees in favor of Plaintiffs and against River Oaks in the amount of $780.00
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based upon the inadvertent omission of 2.6 hours at $300 per hour.”
¶ 20 In Takata, the reviewing court found that the determination of a spouse’s net income for
the purpose of setting child support was a judicial function; “the judge employs a certain
amount of discretion in determining an appropriate and reasonable amount.” Takata, 304 Ill.
App. 3d at 92. The court held that “a mathematical error in determining a spouse’s income
is not a clerical error; rather, as it is the product of the judicial function, it is a judicial error.”
Takata, 304 Ill. App. 3d at 93.
¶ 21 We find the calculation of the amount of the attorney fees award similar to the calculation
of a spouse’s net income for child support purposes and, therefore, a judicial function.
Likewise, the circuit court’s “inadvertent omission” of the number of hours in its calculation
of the attorney fees was a judicial error. Therefore, the exceptions to the jurisdictional rule
do not apply, and the circuit court lacked jurisdiction on July 29, 2011, to correct its June 10,
2011, order.
¶ 22 The plaintiffs’ reliance on General Motors Corp. v. Pappas, 242 Ill. 2d 163 (2011), and
City of Chicago v. Scandia Books, Inc., 102 Ill. App. 3d 292 (1981), is misplaced as neither
case involved the correction of a judicial error more than 30 days after the entry of a final
judgment. In General Motors Corp., the supreme court held that the trial court had authority
to award judgment interest after the notice of appeal was filed because the award of interest
was incidental to and not part of the judgment itself; it preserved the economic value of the
judgment and did not affect or alter the issue on appeal. General Motors Corp., 242 Ill. 2d
at 175. In Scandia Books, Inc., the reviewing court held that the trial court had jurisdiction
to amend the judgment even though an appeal was pending because the amendment merely
explained the order that was on appeal. Scandia Books, Inc., 102 Ill. App. 3d at 298.
¶ 23 In the alternative, the plaintiffs argue the revestment rule applies. Under the revestment
rule, after a trial court has lost jurisdiction due to the passage of time, the litigants may revest
the court with jurisdiction by appearing before it and actively participating in proceedings
which are inconsistent with the merits of a prior judgment. Holwell, 334 Ill. App. 3d at 923.
“Conduct is deemed to be inconsistent with the merits of a prior judgment if it can
reasonably be construed as an indication that the parties did not view the prior order as final
and binding.” Holwell, 334 Ill. App. 3d at 923.
¶ 24 The plaintiffs assert that the defendants’ conduct established that they did not consider
the June 10, 2011, order to be final and binding. The defendants did not raise a jurisdictional
objection to their motion to correct the amount of the attorney fees award. The defendants
actively participated in the proceedings by requesting that the judgment be stayed pending
appeal and that the bond to be set in the amount of the corrected judgment, not in the amount
of the original judgment. Finally, the July 29, 2011, order was drafted by TMCC’s attorney.
¶ 25 Following the entry of the June 10, 2011, order, the plaintiffs filed their notice of appeal
on July 7, 2011. On July 11, 2011, TMCC filed an emergency motion to stay enforcement
of the judgment and to set the amount of security necessary for the stay of the judgment
pending appeal. See Ill. S. Ct. R. 305(a) (eff. July 1, 2004). On July 15, 2011, both
defendants filed their notices of cross-appeals. Such conduct indicates that both the plaintiffs
and the defendants considered the June 10, 2011, order to be a final judgment.
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¶ 26 The defendants’ conduct cannot reasonably be construed as active participation in the
proceedings inconsistent with the final judgment order of June 10, 2011. In its July 11, 2011,
motion, TMCC requested that the bond to stay the judgment pending appeal be set in the
amount of $174,444: 150 % of the total judgment entered on June 10, 2011. Both the motion
to correct the June 10, 2011, order and the motion to set the bond were the subjects of the
July 29, 2011, proceeding. In addition to correcting the June 10, 2011, order, the July 29,
2011, order provided that “[t]he amount of the security necessary to secure the judgment is
set at $233,198.40 (150 % of the total judgment of $155,465.60).” The bond was based on
the new judgment amount rather than the amount of the original judgment. The order further
provided an extension of time to allow the defendants to file documents evidencing the
security.
¶ 27 While the defendants did not raise a jurisdictional objection, they did not file any
pleadings addressing the merits of the plaintiffs’ motion. We do not attach any particular
significance to the fact that TMCC’s attorney rather than the plaintiffs’ attorney drafted the
July 29, 2011 order. The order addressed motions brought by both parties. As far as the
record reflects, the defendants’ “active participation” in the July 29, 2011, proceedings was
limited to its own motion before the court. Therefore, the revestment rule does not apply in
this case.
¶ 28 We conclude that the circuit court lacked jurisdiction to correct its judicial error as to the
attorney fees and costs award in its June 10, 2011, order. Therefore, that portion of the July
29, 2011, order, awarding attorney fees and costs is void for lack of jurisdiction.
¶ 29 II. Summary Judgment
¶ 30 A. Standard of Review
¶ 31 We review the grant of summary judgment de novo. Millennium Park Joint Venture, LCC
v. Houlihan, 241 Ill. 2d 281, 309 (2010). “Summary judgment is proper if, and only if, the
pleadings, depositions, admissions, affidavits and other relevant matters on file show that
there is no genuine issue of material fact and that the movant is entitled to judgment as a
matter of law.” Illinois Farmers Insurance Co. v. Hall, 363 Ill. App. 3d 989, 993 (2006). In
reviewing the grant of summary judgment, the court “must determine whether the record
reveals disputed issues of material fact or errors in entering judgment as a matter of law.”
Makowski v. City of Naperville, 249 Ill. App. 3d 110, 115 (1993).
¶ 32 B. Discussion
¶ 33 The CLA was enacted in 1976 as an amendment to the Truth in Lending Act (TILA) and
like the TILA is a disclosure rather than a regulatory statute. Kennedy v. BMW Financial
Services, N.A., 363 F. Supp. 2d 110, 114 (D.C. Conn. 2005). The primary purpose of the
CLA is to assure meaningful disclosure of the terms of a lease in order to allow the consumer
to compare lease terms to credit terms. Therefore, the certain disclosures must be clear and
conspicuous to the consumer when entering into the lease. Kennedy, 363 F. Supp. 2d at 114.
¶ 34 In enacting the CLA, Congress also delegated to the Federal Reserve Board the authority
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to issue regulations updating and clarifying the requirements and definitions applicable to
lease disclosures. Kennedy, 363 F. Supp. 2d at 114. These regulations are collectively
referred to as Regulation M. Kennedy, 363 F. Supp. 2d at 114; see 12 C.F.R. § 213 (1995).
¶ 35 1. Plaintiffs’ Appeal
¶ 36 a. Default Provisions
¶ 37 The plaintiffs contend that the circuit court erred in granting partial summary judgment
to the defendants. They maintain that, as a matter of law, their lease agreements violated the
disclosure requirements of the CLR and Regulation M in that default provisions contained
in paragraph 21 of the lease agreements were confusing and ambiguous and unable to be
understood by inexperienced consumers.
¶ 38 Paragraph 21 of the leasing agreements provides that in the event of a default by the
lessee, the lessor has the right to retake the vehicle. Paragraph 21 continues in pertinent part
as follows:
“Even if we retake the Vehicle, you must still pay us the following amounts: (i) any
monthly payments currently due and unpaid; (ii) any other charges arising from your
failure to keep your promises under this Lease, except for excess wear and tear or excess
mileage charges; (iii) any official fees and taxes imposed in connection with lease
termination; and (iv) the excess, if any, of the sum of the Total Depreciation (Paragraph
5) and the Estimated Residual Value (Paragraph 10) over the sum of the Fair Market
Value of the Vehicle (defined below) and all depreciation amounts in the Monthly Rental
Charges (Paragraph 4(a)) that have become due. The depreciation amounts in the
Monthly Rental Charges that have become due will be calculated pursuant to the
procedure described in Paragraph 22. To the extent permitted by applicable law, you also
agree to reimburse us for all expenses, including reasonable attorney’s fees and costs of
investigation, we pay to enforce our rights under this Lease, and any damages caused to
us because of your default.
Fair Market Value means (i) the price we receive if we, in our sole discretion, dispose
of the Vehicle or (ii) the highest offer we receive for disposition of the Vehicle. As an
alternative, if you disagree with our determination of the Fair Market Value of the
Vehicle, you may obtain at your own expense a professional appraisal of the wholesale
value of the vehicle. ***
22. Depreciation Amounts: Each Monthly Rental Charge (Paragraph 4(a)) is
comprised of a lease charge and depreciation. The amount of the Monthly Rental Charge
will not change each month; however, the lease charge and depreciation portions will
vary. The lease charge for the entire lease term is earned by us on a constant yield basis.
The lease charge portion of each Monthly Rental Charge is determined by multiplying
the sum of (i) the remaining depreciation balance and (ii) the Estimated Residual Value
(Paragraph 10) by the constant rate implicit in the Lease. The monthly lease charge
calculation is based on the assumption that we will receive your Total Monthly Payment
(Paragraph 4(e)) on the scheduled due date each month and that the Lease will go the full
term.
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The portion of each Monthly Rental Charge not allocated to the lease charge is
credited to depreciation. The Total Depreciation (Paragraph 5) is amortized over the
Lease term. At any given time, the remaining depreciation balance is the difference
between the Total Depreciation and all depreciation amounts that have become due under
the Lease. The depreciation amounts of the Monthly Rental Charges that have come due
and been paid by you reduce your liability upon default.”
¶ 39 The CLA provides in pertinent part as follows:
“Each lessor shall give a lessee prior to the consummation of the lease a dated written
statement on which the lessor and lessee are identified setting out accurately and in a
clear and conspicuous manner the following information with respect to that lease, as
applicable:
***
(11) *** the amount or method of determining any penalty or other charge for
delinquency, default, late payments, or early termination.” (Emphasis added.) 15
U.S.C. § 1667a(11) (1994).
¶ 40 The version of Regulation M in effect at the time the plaintiffs signed their leases
required that a lessor’s disclosures “ ‘be made clearly, conspicuously, in meaningful
sequence, and in accordance with the further requirements of this section.’ ” Applebaum v.
Nissan Motor Acceptance Corp., 226 F.3d 214, 218 (3d Cir. 2000) (quoting 12 C.F.R.
§ 213.4(a)(1) (1995)). The official staff commentary for this provision explained that
“ ‘clearly, conspicuously, and in meaningful sequence’ required ‘that disclosures be in a
reasonably understandable form.’ ” Applebaum, 226 F.3d at 218 (quoting 12 C.F.R.
§ 213.4(a)(1)). The regulation did not require a particular mathematical progression or
format, but “ ‘the disclosures must be represented in a way that does not obscure the
relationship of the terms to each other.’ ” Applebaum, 226 F.3d at 218 (quoting 12 C.F.R.
§ 213.4(a)(1)).
¶ 41 The plaintiffs rely on Lundquist v. Security Pacific Automotive Financial Services Corp.,
993 F.2d 11 (2d Cir. 1993) (per curiam). Item 8 of the leasing agreement provided that
“ ‘[t]he lease charges will be earned by you on a constant yield basis in relation to the
Adjusted Lease Balance as it declines during the lease term.’ ” Lundquist, 993 F.2d at 13.
Item 16 of the leasing agreement provided that the lessee’s early termination liability
included “ ‘(c) The amount, if any, by which the sum of the Adjusted Lease Balance as
described in Item 8, plus one Base Payment, Item 3.A., exceeds the Realized Value, as
determined in accordance with Item 15; plus ***.” Lundquist, 993 F.2d at 13. The reviewing
court found that the early termination provisions were “ ‘confusing, unduly complicated, and
unnecessarily convoluted.’ In particular, the termination formula in Item 16(c) of the lease
is a Byzantine formula, beyond the understanding of the average consumer.” Lundquist, 993
F.2d at 15. The court concluded that the lease disclosures were not reasonably
understandable and violated the CLA. Lundquist, 993 F.2d at 15.
¶ 42 The analysis in Lundquist was addressed in Channell v. Citicorp National Services, Inc.,
89 F.3d 379 (7th Cir. 1996). In Channell, the lessee contended that the reference to the “sum
of digits” method in an early termination clause was incomprehensible to the average
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consumer and therefore violated the CLA’s requirement that disclosures be clear and
conspicuous. Noting that the method of determining the amount due was disclosed clearly
and conspicuously, the court of appeals stated as follows:
“The district court held that only the method, and not the way the method works,
needs to be disclosed. It is hard to read the statute and regulation any other way. ‘Clear
and conspicuous manner’-the language of § 667a-means visible, not simple. ‘Manner’
refers to the mode of presentation, not the degree of comprehension. The [CLA] and
Regulation M do not define ‘clear and conspicuous,’ but the words are staples of
commercial law. The Uniform Commercial Code defines ‘conspicuous’ as ‘so written
that a reasonable person against whom it is to operate ought to have noticed it.’
[Citation.] A disclaimer of the warranty of merchantability is enforceable if conspicuous
[citation], even if the average consumer hasn’t the vaguest idea what a ‘warranty of
merchantability’ entails.” (Emphases in original.) Channell, 89 F.3d at 382.
See 12 C.F.R. § 213.4(a)(1) (1995).
¶ 43 Noting that the lease agreement in Lundquist contained a reference to the “constant yield
basis,” and the court’s criticism of item 16(c), the court in Channell pointed out that the court
in Lundquist
“neither points to ‘constant yield basis’ as problematic nor discusses the lease’s
shortcomings. The court does not explain why the operation of a formula must be simple-
for the Act requires a clear presentation but does not limit the number of variables the
lessor may consider. The quoted words ‘confusing, unduly complicated, and
unnecessarily convoluted’ lack a source-they are not quoted from anything, ***. For
current purposes, it is enough to say that Lundquist does not analyze or address the
question whether the [CLA] and Regulation M permit a lessor to name a method without
providing an elaboration of the method’s operation. We hold that it does.” Channell, 89
F.3d at 383.
¶ 44 Channell was followed in Jordan v. Toyota Motor Credit Corp., 236 F.3d 866 (7th Cir.
2001). In Jordan, the lessee argued that while conspicuous, the vehicle lease’s reference to
the “constant-yield method” in calculating the early termination charge was too “abstruse”
to be clear unless the average consumer could understand how the method worked. Jordan,
236 F.3d at 867. Based on Channell, the district court dismissed the claim.
¶ 45 On review, the court of appeals declined to overrule Channell. The court agreed that the
term “clear” could mean “ ‘easily understood’ or some variant.” The court noted that the
Federal Reserve has approved “disclosure by name, because it believes that nothing better
is achievable at acceptable cost. That decision is entitled to judicial respect.” Jordan, 236
F.3d at 867; see Applebaum, 226 F.3d at 220 (“[the CLA and Regulation M] do not
necessarily demand disclosure in a form the average consumer can understand”).
¶ 46 The court also rejected the lessee’s argument that by providing an explanation how early-
termination charges were calculated, the lessor violated the disclosure requirements. The
lessee supported his argument with affidavits from two experts who were unable to compute
the amount of the charges from the formula provided in the lease without having to rely on
their own personal knowledge. The court concluded that “[b]ecause the written paragraphs
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are no worse than the unelaborated name (they do not throw readers off the scent), and
because both the name and the exposition will prove equally indigestible to most lessees,
adding the explanation did not produce a violation of the [CLA].” Jordan, 236 F.3d at 868.
¶ 47 We find the analysis in Channell, as followed in Jordan, more persuasive than that of the
court in Lundquist. Similar to the lease termination provisions in Channell, in the calculation
of the amount the plaintiffs would owe if they defaulted on the vehicle leases, paragraph 22
referred to the “constant yield basis” method. Similar to the lease termination provision in
Jordan, the defendants’ attempt to provide an explanation of the default calculation method
is just that, “an attempt.” Still, under Jordan, the inclusion of such language does not fall
afoul of the disclosure requirement of the CLA.
¶ 48 Based on the analysis in Channell and in Jordan, we find no merit to the plaintiffs’
argument that the uncontradicted affidavits of their expert witnesses rendered summary
judgment for the defendants erroneous. The conclusion by the plaintiffs’ experts that the
default calculation provisions could not be understood by the average consumer did not
require a finding that the disclosure requirement was violated. See Jordan, 236 F.3d at 867-
68.
¶ 49 The plaintiffs also argue that the cross-referencing in the lease agreement was confusing.
However, the plaintiffs acknowledge cross-referencing is not prohibited, and based on our
own review of the lease, the cross-referencing does not violate the “clear and conspicuous”
requirement of the CLA.
¶ 50 b. Plaintiffs’ Other Arguments
¶ 51 i. Prior Rulings
¶ 52 The plaintiffs argue that summary judgment for the defendants was precluded by prior
rulings in this case. The plaintiffs point out that in 1996, the circuit court determined that
they stated a cause of action based on the unreasonableness of the default provisions of the
lease agreement, and in 2004, the court determined that paragraph 21 contradicted paragraph
20 of the lease agreements. In response to the defendants’ forfeiture argument, the plaintiffs
argue that they raised the law of the case doctrine in the circuit court. However, their
appellant’s brief failed to provide any authority or pertinent argument in their contention that
the prior holdings precluded the court from awarding summary judgment to the defendants.
Therefore, the argument is forfeited. See Ill. S. Ct. R. 341(h)(7) (eff. July 1, 2008).
¶ 53 ii. Denial of Motion to Compel Discovery
¶ 54 The plaintiffs argue that the circuit court’s denial of their motions to compel the
defendants to answer their discovery and deposition requests was an abuse of discretion and
resulted in the circuit court’s erroneous determination that the plaintiffs had not incurred any
actual damages, other than Ms. Kemp’s sales tax claim. While we agree that the abuse of
discretion standard applies to the court’s ruling, the plaintiffs failed to cite any authority
addressing the merits of the court’s ruling in their appellant’s brief. Citations to authority that
set forth only general propositions of law and do not address the issues presented do not
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constitute relevant authority for purposes of Rule 341(h)(7). See Roe v. Jewish Children’s
Bureau of Chicago, 339 Ill. App. 3d 119, 127 (2003) (argument forfeited on appeal where
party cited only general authority and provided no authority addressing specific issue raised).
¶ 55 We note that in their reply brief, the plaintiffs did cite case law in support of their
argument that the circuit court’s denial of their motion to compel denied them an opportunity
to prove actual damages. See Farmer v. Brennan, 81 F.3d 1444 (7th Cir. 1996); Resolution
Trust Corp. v. North Bridge Associates, Inc., 22 F.3d 1198 (1st Cir. 1994). Both cases
involve the entry of summary judgment while discovery requests were outstanding. In
addition to being factually distinguishable, the court in Farmer did not agree with the
proposition that every instance of incomplete discovery prevented summary judgment.
Farmer, 81 F.3d at 1450. The plaintiffs’ argument in their reply brief sheds no further light
on why the denial of their motion to compel discovery resulted in their inability to prove
actual damages. Therefore, the argument is forfeited.
¶ 56 iii. Compensatory and Punitive Damages to Ms. Kemp
¶ 57 The plaintiffs maintain that Ms. Kemp is entitled to actual damages on her CLA claim
and punitive damages under the Consumer Fraud Act. Contrary to the plaintiffs’ position,
this court remanded Ms. Kemp’s sales tax claim under the CLA and common law breach of
contract claims, not under the Consumer Fraud Act. This court dismissed the plaintiffs’
Consumer Fraud Act claims for failing to state a cause of action, and the supreme court
upheld the dismissal. See Robinson, 201 Ill. 2d at 423-24.
¶ 58 The plaintiffs acknowledge that they failed to include a transcript of the evidentiary
hearing on actual damages. As the appellants, they must provide a record sufficient for the
review of the error they claim. Webster v. Hartman, 195 Ill. 2d 426, 432 (2001). “Where the
issue on appeal relates to the conduct of a hearing or proceeding, this issue is not subject to
review absent a report or record of the proceeding.” Webster, 195 Ill. 2d at 432.
¶ 59 We reject the plaintiffs’ argument that their trial brief was sufficient to review the issue
of actual damages. The circuit court’s order of January 14, 2001, states that an evidentiary
hearing on damages was conducted at which the court heard testimony. In the absence of the
transcript from that hearing, we must presume that the circuit court’s ruling had a sufficient
factual basis and conformed to the law. Webster, 195 Ill. 2d at 432.
¶ 60 In support of their contention that Ms. Kemp is entitled to punitive damages on her
individual CLA claim, the plaintiffs cite Leyshon v. Diehl Controls North America, Inc., 407
Ill. App. 3d 1 (2010), but only for the proposition that punitive damages serve an important
function. The plaintiffs’ failure to cite more than general authority to support their contention
results in forfeiture. Roe, 339 Ill. App. 3d at 127.
¶ 61 iv. Setoff
¶ 62 Finally, the plaintiffs contend that the defendants were not entitled to a setoff of the
settlement amount Ms. Kemp received from Point One because it was raised for the first time
at trial. We disagree. In Thornton v. Garcini, 237 Ill. 2d 100 (2010), our supreme court
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explained that a setoff, where a defendant requested a reduction in damages because a
codefendant settled and compensated the plaintiff for the same injury, does not have to be
raised in the pleadings but may be raised at any time. See Thornton, 237 Ill. 2d at 113-14.
¶ 63 We conclude that the default penalties provision of the vehicle lease agreements did not
violate the disclosure requirements of the CLA and Regulation M. The other arguments
raised by the plaintiffs did not preclude the grant of summary judgment to the defendants as
they lack merit.
¶ 64 2. Defendants’ Cross-Appeal
¶ 65 The defendants contend that the grant of partial summary judgment to the plaintiffs on
their lease modification and failure to itemize other charges claims was error.
¶ 66 a. Lease Termination
¶ 67 Paragraph 20 of the vehicle lease agreement provided in pertinent part as follows:
“No Voluntary Early Termination: You have no right to terminate this Lease prior to
the scheduled end of its term. The only way this Lease can be changed is by a new
written agreement signed by us and you. We have no obligation to enter into any new
agreement and the decision to do so is in our sole discretion.”
¶ 68 Under the CLA, the defendants were required to give the plaintiffs a written statement,
setting out accurately and in a clear and conspicuous manner and “as applicable,” “[a]
statement of the conditions under which the lessee or the lessor may terminate the lease prior
to the end of the term.” 15 U.S.C. § 1667a(11) (1994). The lease agreement stated that the
plaintiffs could not terminate the lease prior to the end of the leasing period. It would be
difficult to write that provision in a way that would render it more accurate, more clear and
more conspicuous. Any change in the lease agreement terms required a new written
agreement between the parties and only if the lessor chose to enter into a new agreement. We
find nothing inaccurate, unclear or inconspicious about the disclosure of that provision.
¶ 69 The plaintiffs’ reliance on Clement v. American Honda Finance Corp., 145 F. Supp. 2d
206 (D. Conn. 2001), is misplaced. In determining that an early termination provision in a
vehicle lease agreement violated the CLA’s disclosure requirements, the district court relied
on Lundquist. The court acknowledged that “if this case were decided in the Seventh Circuit
a different outcome would be required.” Clement, 145 F. Supp. 2d at 213. The court rejected
the defendant’s suggestion that it adopt the Seventh Circuit precedent, i.e., Channell, stating,
“[t]his court, cannot, however, either overlook or overrule binding Second Circuit precedent
[Lundquist].” Clement, 145 F. Supp. 2d at 213.
¶ 70 The plaintiffs’ reliance on Candelaria v. Nissan Motor Acceptance Corp., 740 F. Supp.
806 (D. N.M. 1990), is also misplaced as that case is distinguishable. In Candelaria, the
vehicle lease provided that if the lessee wished to terminate the lease early, the lessee should
contact the lessor but did not set forth the charge or method for determining the charge the
lessee would incur in terminating the lease early. The district court held that the absence of
a method for determining the charge for early termination left the charge subject to future
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negotiations without an objective or ascertainable standard and was “contrary to a federal
policy to promote the informed use of credit through the meaningful disclosure of the terms
of leases of personal property.” Candelaria, 740 F. Supp. at 810.
¶ 71 Unlike the lease in Candelaria, the lease agreements in the present case clearly denied
the plaintiffs the right to terminate the lease. Therefore, there was no requirement to set forth
the charge or method of determining the charge for early termination of the lease. The lease
agreement further disclosed to the plaintiffs that the defendants had no obligation to agree
to a change in the terms of the lease agreement. Possessed of the knowledge that they had no
right to early termination of the lease, or to change the terms of the lease agreement in any
respect, the plaintiffs were free to look elsewhere in the market place to lease a vehicle.
¶ 72 Neither the CLA nor Regulation M requires that a lease agreement provide the lessee the
right or opportunity to terminate the lease. If the lease agreement does so provide, it must
comply with the disclosure requirements of the CLA and Regulation M. The lease in this
case accurately, clearly and conspicuously informed the plaintiffs that they could not
terminate the lease voluntarily. Therefore, paragraph 20 of the lease agreement did not
violate the disclosure requirements of the CLA and Regulation M.
¶ 73 b. Itemization of Other Charges
¶ 74 Section 1667a(4) of the CLA requires that the lessor provide the lessee with a written
statement setting out “accurately and in a clear and conspicuous manner the following
information, as applicable:
(4) The amount of other charges payable by the lessee not included in the periodic
payments, a description of the charges and that the lessee shall be liable for the
differential, if any, between the anticipated fair market value of the leased property and
its appraised actual value at the termination of the lease, if the lessee has such liability[.]”
15 U.S.C. § 1667a(4) (1994).
¶ 75 At the time the plaintiffs entered into their vehicle leases, Regulation M provided as
follows:
“ ‘In any lease subject to this section, the following items, as applicable, shall be
disclosed:
(5) The total amount of all other charges, individually itemized, payable by the lessee
to the lessor, which are not included in the periodic payments. This total includes the
amount of any liabilities the lease imposes upon the lessee at the end of the term ***.’ ”
Abt v. Mazda American Credit, 25 F. Supp. 2d 860, 864 (N.D. Ill. 1998) (quoting 12
C.F.R. § 4(g)(5) (1994)).2
¶ 76 The “other charges” disclosure was meant “ ‘[t]o limit the amount of balloon payments
in consumer lease transactions.’ [Citations.]” Turner v. General Motors Acceptance Corp.,
180 F.3d 451, 456 (2d Cir. 1999) (quoting 12 C.F.R. § 213.1(b)(2) (1996)). “ Other charges”
does not include items which are not payable by the lessee and which are not a liability
2
Now 12 C.F.R. § 4(d)(5), following the 1996 amendments.
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imposed upon the lessee at the end of the lease term. Turner, 180 F.2d at 456.
¶ 77 The plaintiffs’ lease agreements sets forth the amount of the monthly payment and then
provide that, in addition to the monthly payments, the lessee “will pay directly to us all the
amounts you must pay under this Lease which are not included in the Total Monthly
Payment, or, if we pay any such amounts, you agree to reimburse us promptly.” The lease
agreements then set forth the amount of the estimated fees and taxes, the estimated residual
value amount used in calculating the lessee’s liability in the event of the lessee’s default, that
the lessor agrees not to exceed 15,000 miles a year or pay an excess mileage fee of 10 cents
per mile, and that the lessor agrees not to expose the vehicle to excess wear and tear or be
responsible for the cost of repairs in the event the lessee does not purchase the vehicle from
the lessor.
¶ 78 In granting summary judgment to the plaintiffs on their failure to itemize other charges
claim, the circuit court focused on the default provisions in paragraph 21 of the lease
agreements providing that in the event the lessor retakes possession of the vehicle because
the lessee has defaulted on the lease, the lessee must still pay “any other charges arising from
your failure to keep your promises under this Lease, except for excess wear and tear or
excess mileage charges.” Noting the paucity of case law on this issue, the court relied on
Jordan v. Schaumburg Toyota, No. 97 C 6697 (N.D. Ill. 1999), reasoning as follows:
“The leases indicate that the various types of conduct that would amount to a breach
under the leases, are specifically delineated paragraph by paragraph, and the itemization
of the other charges for a specific breach is certainly possible. Based on the Jordan ruling
and the language of Regulation M, TMCC must itemize those other charges. Because
TMCC failed to expressly provide, by way of itemization, for the imposition of ‘other
charges’ as a consequence of the breaches, Plaintiffs have met their burden of showing
TMCC’s violation of CLA and Regulation M.”
See Jordan v. Schaumburg Toyota, No. 97 C 6697 (N.D. Ill. 1999) (court held that if a
charge was included in the periodic payment, the lessor did not have to separately itemize
and disclose the total amount of the other charges).
¶ 79 The lessee is still obligated to pay the amounts owed under the lease, even if the lessor
has retaken possession of the vehicle. The lease agreements set out the charges incorporated
into the monthly payment. The lease then sets forth the amounts of the charges not
incorporated into the monthly payment, which the lessee would be responsible for at the end
of the lease term. This is in keeping with the purpose of the disclosure requirements that a
lessee not be required to pay amounts, unknown to him at the time the lease was entered into,
at the end of the lease term. We believe that the itemization of other charges does not include
those charges which a lessee would not incur under normal circumstances. Our belief is
supported by the fact that charges for excess mileage and the excess wear and tear were
specifically excluded from the “any other charges” referred to in paragraph 21, as only the
circumstances at the end of the lease term would determine whether such charges were owed.
¶ 80 We conclude that the defendants’ complied with the disclosure requirements of the CLA
and Regulation M in that the lease agreements set forth all amounts the plaintiffs would be
required to pay at the end of the lease term.
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¶ 81 CONCLUSION
¶ 82 We conclude that, as a matter of law, the defendants did not violate the disclosure
requirements of the CLA and Regulation M. Therefore, the defendants were entitled to
summary judgment on all three of the plaintiffs’ joint claims in their third amended
complaint.
¶ 83 We further conclude that Ms. Kemp is entitled to a statutory award of $1,000 and an
award of $596 in actual damages on her individual CLA claim. TMCC is entitled to a setoff
of $500 against the award of damages to Ms. Kemp. Ms. Kemp is also entitled to an award
of attorney fees and costs on her claim. The case will be remanded to the circuit court for a
determination of the amount of attorney fees and costs to be awarded Ms. Kemp. Although
the plaintiffs raised an issue as to the amount of attorney fees and costs awarded in this case,
in view of the result here, we choose not to address the merits of that issue.
¶ 84 We affirm the award of partial summary judgment to the defendants and reverse the grant
of partial summary judgment to the plaintiffs. We vacate the award of damages to Ms.
Robinson and Ms. Kemp on their joint claims and affirm the statutory and actual damages
awards to Ms. Kemp on her individual CLA claim. We vacate the attorney fees and costs
awards to the plaintiffs and remand for a hearing on attorney fees and costs as to Ms. Kemp’s
individual CLA claim. Finally, we vacate the July 29, 2011, award of fees and costs for lack
of jurisdiction.
¶ 85 The judgment of the circuit court is affirmed in part, reversed in part, vacated in part, and
remanded for further proceedings.
¶ 86 Affirmed in part, reversed in part, and vacated in part; cause remanded with directions.
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