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                                   SECOND DIVISION
                                November 29, 2005

No. 1-04-3698

JUSTICE SOUTH delivered the opinion of the court:

Plaintiff, Lorelei Kutcher, appeals from an order of the circuit court that dismissed withprejudice her second amended complaint against defendant B&A Associates pursuant to section2-615 of the Illinois Code of Civil Procedure (735 ILCS 5/2-615 (West 2002)).⁽¹⁾

Plaintiff was a tenant who resided in a rental apartment at 860 Hinman Avenue inEvanston, Illinois (Hinman Apartments), from approximately July 15, 1999, until June 30, 2004. She entered into a lease agreement with Barry Realty, dated June 23, 1999, and paid a securitydeposit of $650 for the apartment, which was later increased to $655 in 2000. Plaintiff enteredinto lease extension agreements with Barry Realty on March 21, 2000, Barry & Associates on

June26, 2000, B&A Associates on December 13, 2001, and Evanston Neighborhood Properties onJanuary 22, 2003. Each time plaintiff entered into a lease extension agreement, her securitydeposit was carried forward and applied to the new lease. From July 15, 1999, through June 1,2003, plaintiff alleged she never received interest or notice of interest being credited on hersecurity deposit. She further alleged Evanshire Properties, the owner of Hinman Apartments,subsequently sent her a letter stating that on June 16, 2003, her account had been credited with$32.75 of security deposit interest.

On April 29, 2003, plaintiff, individually and on behalf of all others similarly situated,filed her original complaint against defendants under the Illinois Security Deposit Interest Act(Act) (765 ILCS 715/0.01 et seq. (West 2002)). On July 14, 2004, a second amended complaintwas filed alleging, in relevant part, that B&A Associates (B&A) was a managing agent forHinman Apartments during a portion of the period in which plaintiff leased an apartment; thatHinman Apartments contained 25 or more units; and B&A failed to pay the appropriate intereston the security deposit as required under the Act. Plaintiff sought certification of a class, therecovery of earned interest on security deposits allegedly withheld by B&A, statutory damagesequal to the total amount of the security deposits, and attorney fees and costs. Attached to thecomplaint were the original lease agreement and the four lease extension agreements. All fivedocuments were signed by defendants, respectively, as "lessor," and the building's owner,Evanshire Property, was not referenced.

On August 16, 2004, B&A moved to dismiss plaintiff's second amended complaintpursuant to section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West2002)). B&A relied upon Munroe v. Brown Realty & Management Co., 206 Ill. App. 3d 699(1990), in support of its position that as a managing agent for Hinman Apartments, it was not a"lessor" within the meaning of the Act and could not be held liable as an agent of the building'sowner.

On November 4, 2004, the trial court granted B&A's motion and dismissed withprejudice plaintiff's second amended complaint. Relying upon Munroe, the trial court concludedthat B&A was not a lessor for purposes of the Act. The trial court expressly found no justreason to delay enforcement or appeal under Rule 304(a) (155 Ill. 2d R. 304(a)), and this appealensued.

On appeal, plaintiff contends her second amended complaint stated a sufficient claim toavoid dismissal under section 2-615 of the Code because B&A was a "lessor" within the meaningof the Act and subject to its requirements.

When we review a section 2-615 dismissal, we apply de novo review (Board of Directorsof Bloomfield Club Recreation Ass'n v. Hoffman Group, Inc., 186 Ill. 2d 419, 424 (1999)), andmust determine whether the allegations contained in the complaint, when interpreted in the lightmost favorable to the plaintiff, sufficiently set forth a cause of action (Bryson v. News AmericaPublications, Inc., 174 Ill. 2d 77, 86-87 (1996)). Likewise, we apply de novo review toquestions of statutory interpretation. Feltmeier v. Feltmeier, 207 Ill. 2d 263, 267 (2003).

"The fundamental rule of statutory interpretation is to give effect to the intention of thelegislature." County of Knox ex rel. Masterson v. Highlands, L.L.C., 188 Ill. 2d 546, 556(1999). A court must first look to the words of a statute, which are the best indication of thelegislative intent. County of Knox, 188 Ill. 2d at 556. If the statutory language is clear, it mustbe given effect without utilizing other tools of interpretation. County of Knox, 188 Ill. 2d at556. "In interpreting a statute, it is never proper for a court to depart from plain language byreading into a statute exceptions, limitations, or conditions which conflict with the clearlyexpressed legislative intent." County of Knox, 188 Ill. 2d at 556.

Section 1 of the Act provides, inter alia:

"A lessor of residential real property, containing 25 or moreunits in either a single building or a complex of buildings located oncontiguous parcels of real property, who receives a security depositfrom a lessee to secure the payment of rent or compensation fordamage to property shall pay interest to the lessees computed fromthe date of the deposit *** ." 765 ILCS 715/1 (West 2002). Section 2 of the Act provides, inter alia:

"A lessor who willfully fails or refuses to pay the interestrequired by this Act shall, upon a finding by a circuit court that hehas willfully failed or refused to pay, be liable for an amount equalto the amount of the security deposit, together with court costs andreasonable attorney's fees." 765 ILCS 715/2 (West 2002).

The Act's legislative history establishes that the purpose of section 2 was to set forth apenalty for lessors who ignored the mandate of section 1, which was a form of protection forrenters in buildings containing 25 units or more. During the Illinois House debates, whileconsidering the severity of the penalty to be imposed for violating section 1, RepresentativeMerlo, the bill's sponsor, stated:

" '[I]t was pointed out to me that the average rent is threehundred, so it would mean that the landlord would be liable or themanagement firm would be liable for fifteen dollars, you and Iknow that this is not a realistic figure that he's not going to abide bythe law for fifteen dollars *** ." (Emphasis added.) 79th Ill. Gen.Assem., House Proceedings, May 11, 1976, at 13 (statement ofRepresentative Merlo). In Munroe, the trial court awarded the plaintiff his security deposit, plus earned interest,and imposed a penalty on the defendant management company for the willful retention of theplaintiff's security deposit and interest. Munroe, 206 Ill. App. 3d at 700. The appellate courtreversed the trial court, noting that the Act did not apply to the defendant, who had signed aresidential real estate lease on behalf of the owner. Munroe, 206 Ill. App. 3d at 707. Accordingto the Munroe court, the defendant was merely a management company employed by the ownerto attend to the daily supervision of the property; that it did not have a possessory interest in theproperty; and it could not convey what it did not have. Munroe, 206 Ill. App. 3d at 705.

While acknowledging the defendant executed the written lease for the apartment, theMunroe court held it could only do so on behalf of the owner and by virtue of the authorityextended by the owner. Munroe, 206 Ill. App. 3d at 705. Consequently, the defendant was notthe lessor of the property, and the trial court's application of the Act requiring the payment ofinterest on the plaintiff's security deposit was improper. Munroe, 206 Ill. App. 3d at 705. Thecourt reasoned that "a commonsense definition of 'lessor' as used in this statute must refer tothose persons who receive and control the rents and profits from the property." Munroe, 206 Ill.App. 3d at 706. The court ultimately concluded that even if the defendant could be obligated topay interest on security deposits, the Act would not apply it under the facts of the case. Munroe,206 Ill. App. 3d at 705. While the defendant managed 78 separate units, the units were ownedby many different and distinct owners. Munroe, 206 Ill. App. 3d at 705. The court concludedthat "[t]he pivotal element [in the case] is the fact that the property owner did not own 25 ormore units, but the defendant did manage more than 25 units." Munroe, 206 Ill. App. 3d at 704. The dissenting justice in Munroe disagreed with the majority's position that the Act appliesonly if the lessor happens to be the owner of the property and rejected the conclusion thatmanagement companies are not included in the term "lessor." Munroe, 206 Ill. App. 3d at 707(Rakowski, J., dissenting). The dissent noted that the legislative history indicates the policy forawarding costs and attorney fees is to protect renters in buildings of 25 units or more and to set apenalty for landlords who ignore the statute's requirements. Munroe, 206 Ill. App. 3d at 707-08(Rakowski, J., dissenting). In doing so, the legislature did not limit the penalty to situationswhere the owner or his agent signed the lease. Munroe, 206 Ill. App. 3d at 708 (Rakowski, J.,dissenting). The dissent reasoned:

"[T]he court should define lessor in ordinary language simply assomeone who lets property to a renter, regardless of whether thisperson owns the property or is a company which manages the rentalbusiness of the property. Here, the defendant executed a writtenlease naming itself as the lessor. Since the statute providesprotection for renters against lessors, it follows that, absent anyother indication, the definition of 'lessors' commonly understood byrenters should be the one used." Munroe, 206 Ill. App. 3d at 708(Rakowski, J., dissenting).

In Gittleman v. Create, Inc., 189 Ill. App. 3d 199 (1989), relied upon by plaintiff and thedissent in Munroe, two tenant plaintiffs sued the defendant landlord, who was engaged in thebusiness of managing residential property, to recover security deposits and interest under theAct. Gittleman, 189 Ill. App. 3d at 200. The issue on that appeal, however, was the statutorypenalties against the defendant-landlords, not whether the Act applied to managementcompanies. Gittleman, 189 Ill. App. 3d at 200. The Gittleman court, however, specifically citedRepresentative Merlo's comments during the Illinois House debates regarding managementcompanies, and applied the Act, including penalties, to the defendant management company. Gittleman, 189 Ill. App. 3d at 203-04.

We also find Hayward v. Tinervin, 123 Ill. App. 3d 302 (1984), instructive. There, thetenant plaintiff filed suit against his apartment owner's agent seeking a return of his securitydeposit and double recovery under the Illinois Security Deposit Return Act, which governsimproper withholding of a security deposit. Hayward, 123 Ill. App. 3d at 304. The trial courtdismissed the second count of the plaintiff's complaint on the grounds that the defendant was notthe owner but merely an agent of the apartment owner with authority to execute a lease on behalfof the owner. Hayward, 123 Ill. App. 3d at 305. The appellate court reversed, holding that thedefendant was a "lessor" within the meaning of the statute as it held itself out to plaintiff as thelessor and that the plaintiff was entitled to rely upon that representation. Hayward, 123 Ill. App.3d at 305.

Turning to the instant case, we note that that portion of the Munroe decision which B&Arelies upon, that a management company cannot be a lessor under the Act, constitutes dicta andis not controlling in our disposition. The Munroe court specifically held that the "pivotalelement" in that case was the fact that the property owner did not own 25 or more units, whereasthe defendant managed more than 25 units. Here, in contrast, plaintiff alleged that the actualowner of her apartment building owned more than 25 units and that B&A managed more than 25units.

We agree with the dissent in Munroe that neither the purpose of the Act nor its legislativehistory supports limiting its protection to renters only if a lease is signed by the property ownerrather than a real estate management company. Black's Law Dictionary defines "lessor" as"[o]ne who grants a lease. One who rents property to another." Black's Law Dictionary 902 (6thed. 1990). The Oxford Dictionary defines "lessor" as "a person who lets a property by lease."The Oxford Dictionary 780 (9th ed. 1995). In the instant case, B&A executed a lease extensionagreement with plaintiff in 2001, in which it specifically held itself out as the lessor, and theactual owner of the property, Evanshire, was never disclosed. Generally, an agent who contractswith a third party on behalf of an undisclosed or partially disclosed principle is liable personallyon the contract. Jameson Realty Group v. Kostiner, 351 Ill. App. 3d 416, 430 (2004). It wasnot the duty of plaintiff to discover the identity of the undisclosed building owner. We find thatinasmuch as the Act provides protection for renters against lessors, it follows that, absent anyother indication, the definition of lessors commonly understood by renters should be the oneused. Moreover, we conclude that Gittleman and Hayward support an interpretation of the Actthat includes management companies. For the foregoing reasons, we hold B&A was a lessorwithin the meaning of the Act and that the trial court erred in granting B&A's motion to dismissplaintiff's second amended complaint.

Accordingly, the order of the circuit court dismissing plaintiff's second amendedcomplaint against B&A is hereby reversed, and this cause is remanded for further proceedingsconsistent with this opinion.

Reversed and remanded.

GARCIA, P.J., and WOLFSON, J., concur.

1. On November 4, 2004, the trial court entered a separate order granting defendant BarryRealty's motion to dismiss with prejudice plaintiff's second amended complaint. Plaintiff conteststhe dismissal of her complaint as to B&A Associates only and not as to any other defendant.