Krautsack v. Anderson

Case Date: 03/29/2002
Court: 1st District Appellate
Docket No: 1-01-1249 Rel

SECOND DIVISION
March 29, 2002



No. 1-01-1249


RICHARD G. KRAUTSACK,

                           Plaintiff-Appellant,

                                             v.

DAVID ANDERSON, d/b/a DAVID ANDERSON
SAFARIS, and LUXURY ADVANTURES, LTD., a
corporation,

                            Defendants-Appellees.

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Appeal from the
Circuit Court of
Cook County.





Honorable
Loretta C. Douglas,
Judge Presiding.


PRESIDING JUSTICE BURKE delivered the opinion of the court:

Plaintiff Richard Krautsack appeals from three orders of the circuit courtgranting summary judgment in favor of defendants David Anderson (Anderson), doingbusiness as David Anderson Safaris, and Luxury Adventures, Ltd. (LuxuryAdventures), striking his motion for reconsideration, and granting attorney feesand costs to Anderson and Luxury Adventures pursuant to Supreme Court Rule 137(155 Ill. 2d R. 137) and the Consumer Fraud and Deceptive Business Practices Act(Consumer Fraud Act) (815 ILCS 505/10a(c) (West 1998)) on Krautsack's complaintagainst defendants alleging breach of contract and consumer fraud. On appeal,Krautsack contends that the trial court erred in granting summary judgment onboth his consumer fraud claim and his breach of contract claim, that it erred instriking his motion for reconsideration because the motion was timely, and thatit erred in granting costs and fees to Anderson and Luxury Adventures because thefacts of the case did not support or warrant the imposition of sanctions. Forthe reasons set forth below, we reverse and remand.

STATEMENT OF FACTS

This lawsuit arose as a result of Krautsack's trip to East Africa inJanuary 1998, which was arranged by Anderson and his corporation LuxuryAdventures, doing business as David Anderson Safaris. Because of El Nino,although unknown and unidentified at that time, it rained the entire timeKrautsack toured Africa. On September 1, 1998, Krautsack filed a complaintagainst Anderson, alleging claims based on the Consumer Fraud Act and breach ofcontract, and seeking a refund of the cost he had paid for defendants' servicesand his trip. On December 16, 1999, Anderson filed a motion for summaryjudgment. Subsequently, Krautsack filed an amended complaint, adding LuxuryAdventures as a defendant, alleging a cause of action based on the Consumer FraudAct. On February 23, 2000, Anderson and Luxury Adventures filed a motion forsummary judgment. Thereafter, Krautsack filed an "Opposition to Defendants'Motion for Summary Judgment" and Anderson and Luxury Adventures filed a reply.

Various evidence was offered in support of and in opposition to the motionfor summary judgment, including the depositions of Anderson and Krautsack. Anderson testified that he was the president of Luxury Adventures, a Californiacorporation, doing business as David Anderson Safaris, of which he was themanaging member. The company was in the business of marketing African safaristo affluent clients. With respect to refunds in general, Anderson firsttestified that he had refunded money to unhappy travelers in the past. However,it was not a regular occurrence and he estimated that it occurred less than 25times. Anderson then stated that credits were given to such customers, notrefunds. Subsequently, Anderson stated that he had given partial refunds. According to Anderson, the company only gave refunds if the services were notsupplied.

With respect to complaints about bad weather, Anderson testified that hehad approximately five complaints about weather prior to Krautsack's complaint. However, he did nothing about the complaints, taking the position that he couldnot be responsible for the weather.

According to Anderson, Krautsack first contacted his company in the summerof 1997. Anderson, or someone in his office, spoke to Krautsack in December 1997with respect to cholera, but he could not remember to whom. Anderson furtherstated that when travel consultants have any significant conversation with acustomer, an entry and notes are made on what the company refers to as the"history report." However, he admitted that consultants do not always enterinformation on the report. After reviewing the history report from 1997,Anderson testified that he spoke to Krautsack on December 16, 1997, with respectto cholera, although he had no memory of the conversation. Anderson also did notrecall Krautsack mentioning any concern about the weather or any fax fromKrautsack to him of a newspaper article about the weather in Africa.

Anderson further testified that on January 6, 1998, Krautsack contacted hisoffice regarding his concerns about the weather and road conditions in Africa. At this time, Krautsack raised the question of postponement. According toAnderson, he told Krautsack that before he decided what to do, Anderson wouldcontact the people in Africa and see what the report was. Anderson thencontacted various individuals in Africa to ascertain the conditions--Willy ofKobi Safaris with respect to Tanzania; Ann Birch of Cheli & Peacock with respectto Kenya; and Duncan of Destination Africa. Anderson then quoted the responsesfrom these individuals in a letter he faxed to Krautsack on January 7, andadvised Krautsack to call if the information did not address his concerns. Anderson never received a call from Krautsack prior to his departure. Accordingto Anderson, the information he received told him that there had been rain andit was muddy, but that with four-wheel drive vehicles, safaris were proceedingas normal. Anderson stated that he left the decision of postponement up toKrautsack. He denied that he "pushed" Krautsack to continue with the trip. Anderson also denied that Krautsack ever asked him to reschedule the safari, but,if he had, it would "definitely" have been possible. However, according toAnderson, if Krautsack had rescheduled, he would have lost any money he had paidfor the safari.

Anderson also testified that after being contacted by Krautsack followinghis trip, which according to Anderson first occurred on March 12, 1998, he askedone of the African suppliers for a refund of Krautsack's payment for the safari,but was told no refund would be made because Krautsack had received the servicesfor which he had paid. According to the information Anderson received, Krautsackwent to all the game parks and did not miss any game drives.

Anderson further testified that over the last 100 years, the rainy seasonin East Africa has been in April and May, there have been short rains inNovember, and January is generally dry. According to Anderson, the Africanweather was "extremely predictable" in the past. He also stated that the weatherKrautsack experienced was "extremely wet. Totally out of character." The rainstarted in November 1997 and continued through June and July 1998. At the timeof Krautsack's trip, no one was yet aware that it was due to the effects of ElNino.

With respect to the e-mail sent by Anderson and relied upon by Krautsack,detailed below, Anderson testified that this e-mail was sent sometime after March12, but before March 30, and was an attempt to obtain some refund compensationfor Krautsack. Anderson admitted that in the e-mail he stated, because he wasfighting for his client, that Krautsack had a valid claim. Althoughacknowledging that he used the term "pushed," in reference to Krautsackcontinuing with his safari plans, in the e-mail, according to Anderson, the term"pushed" was "open to interpretation." In addition, Anderson admitted that thisterm could be interpreted differently from the statements made in his letter toKrautsack on January 7, 1998, to the effect that he was leaving the decision ofpostponement of Krautsack's trip up to him.(1) Anderson further testified that thedocument signed by Krautsack, purporting to be the contract between the parties,did not address the issue of postponement.

Krautsack testified that he first contacted Anderson's company in March1997, after being referred to it by a neighbor. He initially dealt with Gail,Anderson's ex-wife. She advised Krautsack to travel in the dry season, which shestated was during December and January. Krautsack further testified that hespoke to Anderson's company often, "fine tuning" his travel plans.

According to Krautsack, the issue of the weather in Africa first arose onDecember 7, 1997. His wife had found a newspaper article regarding variousconditions in Africa, which Krautsack faxed to Anderson's office. Krautsackfurther testified that he left a voice mail message on Anderson's telephone,asking for an explanation. Leonora, another individual in Anderson's office,called Krautsack back and stated that Anderson would give him a response. Krautsack believed that Anderson called in the middle of December 1997, speakingto his wife, and discussing cholera. Anderson failed to address Krautsack'sconcern with respect to the rain. Krautsack believed that he again contactedAnderson in the latter part of December with respect to the rain in Africa. Krautsack stated that he again faxed the same newspaper article to Anderson.

Krautsack further testified that Anderson returned his call on January 6,1998. Anderson advised him that he would fax information to Krautsack, but,according to Krautsack, Anderson led him to believe that the rain in Africa was"not a big deal." Krautsack stated that he did not respond to Anderson'sJanuary 7 fax because, from his conversation with Anderson the day before, hebelieved that "everything was fine."

With respect to the prevailing weather conditions in Africa during hisactual trip, Krautsack testified that it was wet, rainy, and muddy in Masai Maraand that under such conditions the "cats go." He stated that sites were"definitely" inaccessible depending on where he was supposed to go. Accordingto him, certain roads were unusable. Krautsack admitted that he went on gamedrives every day and saw animals. With respect to his Rusinga fishing trip,Krautsack stated that he was able to fish. However, he stated that the planethat took him to the fishing destination should never have been allowed to takeoff due to the wet conditions of the airfield. Krautsack also testified that heshould never have gone to Ol Donyo Wuas because the conditions there wereterrible. Instead of driving to game drives, he had to walk because the roadswere inaccessible. At Giraffe Manor, he was confined to the building and couldnot walk the grounds. Lastly, with respect to Tanzania, Krautsack testified thatthis region suffered from severe flooding and many roads were washed out. He wassupposed to drive to the Ngorongor Crater, which was to be a short drive, but hehad to fly because of road conditions. According to Krautsack, his driver didin fact drive, which took 14 hours. Upon arriving at the crater, a good half ofit was inaccessible and Krautsack had to go all the way around the crater toaccess it rather than accessing it from his accommodations because the roads werewashed out. Krautsack stated that he never complained to any of the individualsat the particular camps about the conditions because he had contracted withAnderson, not those individuals. Upon returning from his trip, Krautsack wroteto Anderson on January 27 expressing the problems with his vacation.

Anderson and Luxury Adventures supported their motion with a letter faxedby Anderson to Krautsack on January 7, in which he related the effects of therains in East Africa. The letter stated that he had contacted three individualsin Africa. Their general responses were that it was wet and rainy. With respectto Masai Mara, the individual indicated that this was the wettest area onKrautsack's itinerary, but that, with four-wheel drive vehicles, current groupsof safaris were getting around fine. With respect to Tanzania, the individualindicated that safaris were ongoing and were getting around fine, despite therain. With respect to the Ngorongor Crater, although indicating it was a bitdifficult getting around, the individual stated that Anderson's "client ought notto worry." Anderson quoted the responses of each individual in his letter toKrautsack.

Krautsack offered a copy of the newspaper article that his wife haddiscovered in early December. The article stated that there had been "torrentialrains" in East Africa causing heavy flooding and that the danger of diseaseexisted. It recommended that individuals consider deferring travel to Kenya andTanzania until the weather cleared. The article also noted that politicalreforms were underway in Kenya. Krautsack testified that he faxed a copy of thisarticle to Anderson. Krautsack placed an arrow and "?" next to the statementswith respect to the rain and reform, and circled and placed "?" next to thestatements with respect to diseases. Krautsack also offered an e-mail writtenby Anderson, sometime in March according to Anderson's testimony, to one of theAfrican suppliers. In this e-mail, Anderson made the following statements: "Ineed to satisfy him [Krautsack] that while he did not get what he had paid for,David Anderson Safaris will make it up to him." Additionally, Anderson stated,"I think I was protecting a lot of asses when I 'pushed' Mr. Krautsack tocontinue with his safari plans." Anderson also stated that he was not in aposition to refund Krautsack's money but believed that Krautsack had a "valid"claim and that Anderson would like to give Krautsack a full credit. Krautsackalso offered another e-mail written by Anderson, undated, to Willy, Peter, andDuncan (African suppliers) in which Anderson stated, "[G]iven that I recommendedthat [Krautsack] not cancel or reschedule [his] safari," Anderson was seekingcompensation for Krautsack.

Following a hearing,(2) the trial court granted summary judgment in favor ofAnderson and Luxury Adventures on all counts of Krautsack's complaint on June 21,2000. Thereafter, Anderson and Luxury Adventures filed a motion for attorneyfees pursuant to the Consumer Fraud Act. On August 2, Krautsack filed a motionto reconsider the court's order granting summary judgment. In response, Andersonand Luxury Adventures filed a motion to strike the motion to reconsider on thebasis that the motion was not timely filed. On November 3, the trial courtsustained Anderson and Luxury Adventures' motion to strike. On December 4,Anderson and Luxury Adventures filed a supplemental petition for fees pursuantto the Consumer Fraud Act, as well as a motion for Rule 137 sanctions. After ahearing, the trial court granted Anderson and Luxury Adventures' request forfees, pursuant to both provisions, but reduced the amount Anderson and LuxuryAdventures sought and awarded Anderson and Luxury Adventures fees of $10,499 andcosts of $104. This appeal followed.

ANALYSIS

A motion for summary judgment is properly granted when the pleadings,depositions, admissions, and affidavits on file establish that no genuine issueas to any material fact exists and, therefore, the moving party is entitled tojudgment as a matter of law. 735 ILCS 5/2-1005(c) (West 1998); Cramer v.Insurance Exchange Agency, 174 Ill. 2d 513, 530, 675 N.E.2d 897 (1996). Inruling on a motion for summary judgment, the trial court should not resolvedisputed factual matters, nor make credibility determinations. Prairie v.University of Chicago Hospital, 298 Ill. App. 3d 316, 327, 698 N.E.2d 611 (1998). The trial court's function "is simply to determine whether a factual controversyexists, and if not, whether the movant is entitled to judgment as a matter oflaw." Winston & Strawn v. Nosal, 279 Ill. App. 3d 231, 236, 664 N.E.2d 239(1996). All evidence is to be liberally construed in favor of the nonmovant. In re T.J., 319 Ill. App. 3d 661, 671, 745 N.E.2d 608 (2001). The trial courtmay not weigh the evidence. Watkins v. Schmitt, 172 Ill. 2d 193, 211, 665 N.E.2d1379 (1996). We review the trial court's decision de novo. McNamee v. State ofIllinois, 173 Ill. 2d 433, 438, 672 N.E.2d 1159 (1996). Our duty, like the trialcourt's, "is not to judge the strength of the evidence or to weigh thecredentials, credibility and testimony of one deponent against another." McCullough v. Gallaher & Speck, 254 Ill. App. 3d 941, 948, 627 N.E.2d 202 (1993).

In the instant case, we believe that Anderson's March 1998 e-mail alonecreates numerous genuine issues of material fact, discussed more fully below,that were sufficient to preclude summary judgment on both Krautsack's consumerfraud and breach of contract claims. We also find that the trial court, ingranting summary judgment, would have had to make credibility determinationswhere the evidence was contradictory; a matter that the trial court cannotresolve in ruling on a motion for summary judgment.

I. Consumer Fraud Claims (Counts I and II)

Krautsack first contends that the trial court erred in granting summaryjudgment on his consumer fraud claims.

"The omission or concealment of a material fact in the conduct of trade orcommerce constitutes consumer fraud pursuant to section 2 of the Consumer FraudAct." Lipinski v. Martin J. Kelly Oldsmobile, Inc., 325 Ill. App. 3d 1139, 1144,759 N.E.2d 66 (2001). To state a cause of action under the Consumer Fraud Act,a plaintiff's complaint must set forth specific facts to show:

" '(1) a deceptive act or practice by the defendant; (2)the defendant's intent that the plaintiff rely on thedeception; (3) the deception occurred in the course ofconduct involving a trade or commerce; and (4) theconsumer fraud proximately caused the plaintiff'sinjury.' [Citation.]" Lipinski, 325 Ill. App. 3d at1145.

Krautsack argues that he presented sufficient evidence that Anderson andLuxury Adventures concealed material facts and deceived Krautsack on January 6,1998, creating a genuine issue of material fact as to whether Anderson and LuxuryAdventures violated the Consumer Fraud Act. Specifically, Krautsack maintainsthat Anderson and Luxury Adventures concealed their own financial interest andmotives in convincing him not to postpone his trip. According to Krautsack,Anderson and Luxury Adventures advanced their own personal interests at theexpense of his interest, which they cannot do as fiduciary agents of Krautsack's. Krautsack relies upon the e-mail sent by Anderson to the African supplier. Krautsack also argues that Anderson and Luxury Adventures were under a conflictof interest, which obligated them to subordinate their own interests toKrautsack's or to disclose the conflict of interest to him. Instead, Krautsackargues that Anderson and Luxury Adventures concealed this conflict of interestfrom him. Lastly, Krautsack maintains that Anderson's January 7 letter containedinadmissible hearsay and the trial court erroneously relied upon it.

Anderson and Luxury Adventures contend that Krautsack failed to present anyevidence of a communication that constituted a deceptive act. Rather, theymaintain that the record clearly shows that Anderson advised Krautsack of theweather conditions and, therefore, Anderson did not conceal facts with respectto the weather. Anderson and Luxury Adventures also argue that the first andonly communications with respect to the weather was Krautsack's telephone callto Anderson on January 6 and Anderson's fax to Krautsack on January 7, pursuantto Krautsack's own deposition testimony. Additionally, Anderson and LuxuryAdventures maintain that there is no evidence that Anderson said the trip wouldnot be disrupted nor made more difficult because of the rain.(3) Lastly, Andersonand Luxury Adventures maintain that the e-mail relied upon by Krautsack isirrelevant because it does not establish a deceptive act.

Krautsack responds that he did not allege that Anderson said the weatherwould be dry; rather, he alleged that Anderson stated that, despite the rain, thetrip would not be disrupted, and that these statements were made in the contextof concealing Anderson and Luxury Adventures' interests. Krautsack maintainsthat it is not his position that Anderson's statements were false or deceptive,nor that Anderson and Luxury Adventures were responsible for the weather, butrather, his position is that Anderson and Luxury Adventures failed to disclosetheir personal interest in having Krautsack not postpone the trip.

Initially, assuming, arguendo, that Krautsack has not waived the issue, wedisagree with him that Anderson's January 7 letter constituted inadmissiblehearsay. The statements of the African contacts were not offered for the truthof the matter contained therein. Rather, they were offered to demonstrateAnderson's knowledge or notice and the basis for his course of action. See 2 R.Hunter, Trial Handbook for Illinois Lawyers-Civil