Casey v. Jerry Yusim Nissan, Inc.

No. No. 3 97 0446
_________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

A.D., 1998

BRIAN F. CASEY, ) Appeal from the Circuit Court
) of the 18th Judicial Circuit
Plaintiff-Appellant, ) Du Page County, Illinois
)
v. ) No. 93 L 44
)
JERRY YUSIM NISSAN, INC., an )
Illinois corporation, ROBERT )
SCHMERLER, and MARY ANN )
SCOTT, ) Honorable
) Hollis L. Webster
Defendants-Appellees. ) Judge, Presiding.
)
_________________________________________________________________

JUSTICE LYTTON delivered the opinion of the court:
_________________________________________________________________
Plaintiff Brian Casey filed a complaint against Jerry Yusim
Nissan, a car dealership, and two of its employees under the
Consumer Fraud and Deceptive Business Practices Act (Act) (815 ILCS
505/1 et seq. (West 1996)). In his complaint, Casey alleged that
the defendants had misrepresented the condition of a car that he
had purchased from them.
After a bench trial, the court found in favor of the
defendants. The defendants then requested attorney fees and costs
under section 10a(c) of the Act (815 ILCS 505/10a(c) (West 1996)),
and the trial court awarded them $30,000. Casey appeals the award
of attorney fees. We reverse.



FACTS

In 1992, Casey purchased a 1983 BMW from Jerry Yusim Nissan
for $5,100. Prior to buying the car, Casey took it out for a test
drive and noticed smoke or steam rising from under the hood. Casey
testified that the salesperson told him the dealer would fix the
problem. Casey stated that on the following day another
salesperson, defendant Mary Ann Scott, confirmed that the dealer
would take care of the problem. Scott, however, denied telling
Casey that the problem would be fixed. Casey also testified that
a third salesperson, defendant Robert Schmerler, stated the
dealership would take care of the problem.
The next time Casey spoke to Schmerler, Schmerler indicated
that the car's heater core valve was being replaced. On the same
day, Scott left a message for Casey, indicating that the car was
not ready because the radiator was being fixed. When Casey picked
up the car, he was told that it had been fixed and that the heater
core valve had been replaced. However, when the heater core valve
was replaced later in the year, it was found to be part of the
car's original equipment.
An inspection at a gas station revealed no major problems, and
as Casey saw no more smoke or steam emitting from the car, he
decided to purchase it. Later, his family mechanic inspected the
car for leaks and found none.
When Casey had no problems with the car during the next two
weeks, he drove it to California. During the trip, the oil light
came on, and Casey added a quart of oil. He did not see any smoke
or steam coming from the engine at that time. The next day, the
coolant light came on, and Casey added nearly a gallon of
antifreeze. After he had been in California for about three weeks,
Casey noticed smoke coming from under the hood and from the car's
tail pipe.
Casey took the car to a BMW repair shop, which estimated the
cost of repairs at $5,000 to $6,000. Casey began to consider legal
action against the defendants and took the car to another BMW
repair shop. He told the mechanic at that shop, Hal Epstein, about
the problems he had originally noticed with the car and showed him
documents from the dealership and the gas station. Casey told
Epstein that he saw smoke coming from the tail pipe when he started
the car. Epstein diagnosed the problem as a cracked cylinder head,
which he believed existed when Casey bought the car. Epstein told
Casey the dealership had used Stop Leak to temporarily fix the
leak, but this was not a permanent solution. Epstein repaired the
car, and the problems ended.
Casey filed a complaint under the Act against the defendants,
claiming that they had sold him a used car with serious engine
problems that they claimed to have repaired prior to the sale.
Casey also asked Epstein to write a letter outlining his findings
and opinions, which he did. In the letter, Epstein stated that
Casey had told him the tail pipe emitted steam each time the car
was started. Epstein also indicated that Casey had told him the
dealership had used Stop Leak in the car. At trial, Casey denied
making this statement to Epstein and indicated that he had not even
heard of Stop Leak before he met Epstein. The invoice from the gas
station, however, noted the presence of sealer in the car's
radiator.
Epstein later reviewed Casey's deposition and changed several
of his opinions based on new information in it. Epstein noted
several conflicts between Casey's initial statements to him and the
statements in the deposition. For example, Epstein claimed that
Casey's deposition testimony that the tail pipe did not smoke until
just before he took the car in for repair in California
contradicted his prior statement to Epstein that the tail pipe
smoked every time he started the car. Casey's deposition also
indicated that he did not have any real problems with the car until
after he arrived in California.
Epstein stated that Casey could not have driven the car from
Illinois to California if the cylinder head had been in the
condition he had found it. He testified that the point at which
the tail pipe began to smoke was critical to determining when the
crack developed. At trial, Epstein's videotaped evidence
deposition was played. In it, Epstein stated that he believed the
crack developed while Casey was in California and that it was
caused by a defect in the casting of the cylinder head. Epstein
also believed that the steam under the hood that Casey saw after
test driving the car was probably caused by a minor cooling system
leak. Although Epstein had not looked for sealer in the cracked
head when he repaired the car, he expressed doubts that Casey's
trial expert could have found any sealer in the crack after Epstein
took the car apart and washed the block.
Epstein's testimony was contradicted by that of Casey's expert
witness, Philip Arendt. Arendt reviewed Casey's deposition,
Epstein's letter, the documents from the dealership, and the
damaged cylinder head. When Arendt examined the cylinder head
under a microscope, he found traces of sealer in the crack. He
testified that the sealer could have temporarily prevented a
mechanic from seeing the symptoms of a cracked head, but that the
problem would eventually return. Arendt concluded that there was
a small crack in the head when Casey bought the car and that the
crack grew over time as the car was driven. The growth in the
crack was signaled by the large increase in the car's use of
antifreeze and oil that Casey noted during his trip to California.
At the bench trial, the trial court found in favor of the
defendants, who then requested more than $41,000 in attorney fees
as prevailing parties under section 10a(c) of the Act (815 ILCS
505/10a(c) (West 1996)). The court awarded the defendants $30,000
in fees. Casey appeals only the award of attorney fees.

ANALYSIS

I.

The applicable standard of review on appeal is whether the
trial court abused its discretion in granting the fee award. See
Graunke v. Elmhurst Chrysler Plymouth Volvo, Inc., 247 Ill. App. 3d
1015, 1020, 617 N.E.2d 858, 862 (1993); Haskell v. Blumthal, 204
Ill. App. 3d 596, 603, 561 N.E.2d 1315, 1319 (1990).

II.

The sole issue before us is the award of attorney fees to the
defendants. First, we must decide whether the same test should be
used to award fees to plaintiffs and to defendants under the Act.
Casey argues that the intent of the Act would be frustrated, if not
emasculated, if a different standard was not applied. The
defendants respond that the standard for the award of fees under
the Act should be the same for either party.
Section 505/10a(c) of the Act states:
"Except as provided in subsections (f), (g), and (h)
of this Section, in any action brought by a person under
this Section, the Court may grant injunctive relief where
appropriate and may award, in addition to the relief
provided in this Section, reasonable attorney's fees and
costs to the prevailing party." 815 ILCS 505/10a(c)
(West 1996).
The purpose and intent of the Act is to eliminate "'all forms
of deceptive and unfair business practices and to grant appropriate
remedies to defrauded consumers.'" Warren v. LeMay, 142 Ill. App.
3d 550, 563, 491 N.E.2d 464, 471 (1986), quoting American Buyers
Club v. Honecker, 46 Ill. App. 3d 252, 257, 361 N.E.2d 1370, 1374
(1977). The provisions of the Act are to be liberally construed to
effect its purpose. 815 ILCS 505/11a (West 1996); see also
Malooley v. Alice, 251 Ill. App. 3d 51, 56, 621 N.E.2d 265, 268
(1993).
The question of whether fee requests made by both prevailing
plaintiffs and prevailing defendants must satisfy the same test was
addressed and answered in Haskell. In that case, the fourth
district reviewed federal civil rights cases and concluded that
different standards should be used for plaintiffs and defendants.
Haskell, 204 Ill. App. 3d at 602, 561 N.E.2d at 1318. The court
found that civil rights and consumer statutes are both designed to
provide plaintiffs with a remedy that otherwise would not be
available or affordable. The Act's fee provisions encourage the
filing of complaints intended to protect consumers' interests even
where the amounts at issue are not normally large enough to sustain
litigation. If plaintiffs in these cases are routinely subject to
liability for the defendants' fees and costs, such actions would be
deterred, defeating the purpose of the Act. Haskell, 204 Ill. App.
3d at 602, 561 N.E.2d at 1318. We concur with the reasoning in
Haskell and hold that the legislative intent of the Act dictates
the application of a different standard for fee requests made by
successful defendants.

III.

Having decided a different test is appropriate for prevailing
plaintiffs and defendants, we must now decide what the test should
be. The award of fees to a prevailing plaintiff is within the
discretion of the trial court. See Grove v. Huffman, 262 Ill. App.
3d 531, 539, 634 N.E.2d 1184, 1189 (1994). In Haskell, the court
found that an award of fees to a prevailing defendant depended on
a finding of bad faith by the plaintiff. Haskell, 204 Ill. App. 3d
at 602, 561 N.E.2d at 1319. The court applied the standard for
imposing sanctions under Supreme Court Rule 137 to evaluate a
plaintiff's bad faith. Under Rule 137, the court must consider
whether the allegations in the complaint are unwarranted by
existing law or a good-faith argument for a change in existing law,
and whether they are designed to harass or unduly delay the
proceedings. Haskell, 204 Ill. App. 3d at 603, 561 N.E.2d at 1319.
In Graunke, the second district proposed a five-factor test,
based on the criteria for fee awards under the Employee Retirement
Income Security Act (29 U.S.C. 1132(g)(1) (1988)). These factors
include: (1) the degree of bad faith shown by the opposing party,
(2) the opposing party's ability to pay the fee award, (3) the
deterrent effect of the fee award, (4) whether the party requesting
fees attempted to benefit all consumers or businesses or to resolve
a significant legal question concerning the Act, and (5) the
relative merits of the parties' positions. Graunke, 247 Ill. App.
3d at 1022-23, 617 N.E.2d at 863-64.
Both the Graunke and Haskell decisions recognized the
importance of a finding of bad faith in evaluating a request for
fees under the Act, as well as the significant policy interests
underlying the Act. Haskell, 204 Ill. App. 3d at 602, 561 N.E.2d
at 1318-19; Graunke, 247 Ill. App. 3d at 1022-23, 617 N.E.2d at
863-64. Clearly, bad faith is the pivotal factor in awarding
attorney fees to prevailing defendants under the Act. Thus, a
trial court must first determine whether the plaintiff acted in bad
faith. To allow statutory fees to be awarded to defendants without
requiring this threshold finding would seriously undermine the
Act's goal of vindicating consumers' rights. Haskell, 204 Ill.
App. 3d at 602, 561 N.E.2d at 1318; see also Graunke, 247 Ill. App.
3d at 1022, 617 N.E.2d at 863.
We agree with Haskell that Rule 137 provides the proper
standard for bad faith, that is, whether the knowledge,
information, and belief in the plaintiff's pleadings are not
"'warranted by existing law or a good-faith argument for the
extension, modification, or reversal of existing law,' and whether
they are 'interposed *** to harass or to cause unnecessary delay.'"
Haskell, 204 Ill. App. 3d at 603, 561 N.E.2d at 1319, quoting
Supreme Court Rule 137.
If a court finds bad faith under this standard, it may then
proceed to analyze the remaining factors enumerated in Graunke.

IV.

Our review of the facts in this case reveals that Casey did
not act in bad faith by continuing to pursue his complaint after
Epstein recanted his original opinion. Casey had retained another
expert witness, Philip Arendt. The defendants did not object to
Arendt's qualifications as an expert. Arendt had examined the
cylinder head, along with various related documents, and concluded
that a small crack existed when Casey bought the car. Arendt also
testified that the growth in the crack was manifested by the car's
increased use of oil and antifreeze during Casey's trip to
California. Arendt was aware of Epstein's testimony and was
unwavering in his opinion that the cylinder head was cracked when
Casey bought the car.
Although the trial court was not required to find Arendt's
testimony more credible than Epstein's, it was hardly bad faith for
Casey to pursue his claim based on Arendt's testimony. Arendt's
expert opinion sufficiently supported the allegations in Casey's
complaint to preclude a finding of bad faith. Cf. H & H Sand &
Gravel Haulers Co. v. Coyne Cylinder Co., 260 Ill. App. 3d 235,
247-48, 632 N.E.2d 697, 705 (1994) (finding the plaintiffs'
reliance on experts' conclusion that an explosion was not caused by
a gasoline leak precluded a showing of bad faith by plaintiffs when
they later destroyed a gasoline-powered welder and generator).
Since we have found Casey did not act in bad faith, we need
not review the remaining factors listed in Graunke.

CONCLUSION

The judgment of the circuit court of Du Page County is
reversed.
Reversed.
Justice BRESLIN, specially concurring:


I am unconvinced that the Haskell and Graunke courts
interpreted section 10a(c) as the legislature intended. I arrive
at this conclusion because the entire thrust of 505/10a addresses
the relief that those who suffer actual damages can receive under
the Act, and how that relief is to be acquired. Section 10a(c)
empowers the court to grant injunctive relief to these people and
in the same breath empowers the court to award reasonable
attorney's fees and costs to the "prevailing party." 815 ILCS
505/10a(c) (West 1996). In light of the purposes of the Act, it
appears to me that the legislature was referring to a party who
prevails in bringing an action for actual damages under 10a. Such
an interpretation would exclude defendants.
However, I recognize that Haskell and Graunke were decided
several years ago. I have to presume that the legislature's
silence regarding the courts' interpretation of 10a(c) demonstrates
its intent to acquiesce to judicial construction. Fink v. Ryan, 174 Ill. 2d 302, 673 N.E.2d 281 (1996); People v. Hairston, 46 Ill. 2d 348, 263 N.E.2d 840 (1970); People v. Avery, 277 Ill. App. 3d 824,
661 N.E.2d 361 (1995). For this reason, I concur.
SLATER, J., concurring.