Capiccioni v. Brennan Naperville, Inc.

Case Date: 04/15/2003
Court: 2nd District Appellate
Docket No: 2-02-0145 Rel

No. 2--02--0145



IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT


DEAN CAPICCIONI and MAJEL 
CAPICCIONI, 

          Plaintiffs-Appellants,

v.

BRENNAN NAPERVILLE, INC.,
d/b/a Remax Naperville, and
SHARON CLERMONT,

          Defendants-Appellees.

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Appeal from the Circuit Court
of Du Page County.



No. 01--AR--1450



Honorable
Richard A. Lucas,
Judge, Presiding.

 

JUSTICE CALLUM delivered the opinion of the court:

Plaintiffs, Dean and Majel Capiccioni, sued defendants, Brennan Naperville,Inc. (Brennan), and Sharon Clermont, asserting claims under the Real EstateLicense Act of 2000 (Real Estate License Act) (225 ILCS 454/1--1 et seq. (West2000)), the Consumer Fraud and Deceptive Business Practices Act (Consumer FraudAct) (815 ILCS 505/1 et seq. (West 2000)), common-law fraud, and negligentmisrepresentation arising out of their purchase of a home. The trial courtgranted defendants' motion to dismiss (735 ILCS 5/2--615 (West 2000)) and foundno just reason to delay enforcement or appeal of its order. 155 Ill. 2d R.304(a). Plaintiffs appeal. We affirm in part, reverse in part, and remand thecause.

I. BACKGROUND

In 1998, plaintiffs moved from Ohio to Illinois and purchased a home inBolingbrook. Brennan, a residential real estate brokerage company, and Clermont,a licensed real estate broker and one of Brennan's agents, represented the Bolingbrook property's sellers. Defendants' sales brochure for the Bolingbrookproperty listed as one of the home's features: "Acclaimed [school] District 204." Plaintiffs moved into the home, and their three children attended school inDistrict 204 for three years. However, the children were unable to attendDistrict 204 classes during the 2001-2002 academic year after plaintiffsdiscovered that their property was actually located in District 365-U. Plaintiffssubsequently sold the property and purchased another home. The new home waslocated in District 204.

On June 15, 2001, plaintiffs sued defendants. In their amended four-countcomplaint, plaintiffs asserted claims of common-law fraud, negligentmisrepresentation, and violations of the Consumer Fraud Act and the Real EstateLicense Act.

In their Real Estate License Act count, plaintiffs alleged that Clermont'scommunications that the property was located in District 204 were false,untruthful, and misleading because, at all times, the property was located withinDistrict 365-U. Plaintiffs further alleged that the information did not come fromthe sellers because they had no children. The information was material becauseit was one of the major reasons plaintiffs purchased the property, and they wouldnot have purchased it if they had known otherwise. Plaintiffs asserted that theywere damaged as a result of Clermont's misleading representation because theypurchased a home that they would not have otherwise purchased; they paid more forthe property than it was worth; the property did not appreciate as much as itwould have if it were within the boundaries of District 204; and they had to payexpenses associated with purchasing a new home.

In their Consumer Fraud Act count, plaintiffs additionally alleged thatClermont failed to check with any school districts or their employees regardingthe home's school district. They further alleged that a property's schooldistrict is not a matter of public record. Plaintiffs asserted that, prior totheir purchase, they conferred with District 204 employees and were informed thatthe property was located within District 204's boundaries.

Plaintiffs pleaded in their common-law fraud count that they relied uponClermont's representations and that Clermont's statements were made with knowledgethat the information was untrue or with reckless disregard of the truth. Theyasserted that it is widely known in the real estate industry that considerablemisinformation exists regarding school district boundaries in Bolingbrook. Further, Clermont took no action to determine which district the property waslocated in, other than reviewing listings from previous sales. Clermont did notconsult with District 204 employees, and she intended that plaintiffs rely on herclaims. Plaintiffs reasonably relied on the false representations; they tookreasonable steps to confirm Clermont's information and found no contradictoryinformation.

In their negligent misrepresentation count, plaintiffs alleged thatdefendants owed a duty to them to use due care in obtaining and communicatinginformation that they knew plaintiffs would rely upon in deciding whether topurchase the property. Further, defendants were negligent in marketing theproperty as located in District 204 when considerable misinformation exists aboutthe area's district boundaries. Plaintiffs further alleged that Clermont intendedthat plaintiffs rely on her claims and plaintiffs reasonably relied on such.

On December 7, 2001, defendants moved to dismiss the complaint, arguing thatplaintiffs' admission that they spoke to District 204 employees undermined theirallegations that defendants knew or should have known that the property was notlocated in District 204 or that plaintiffs relied on defendants' representations. Further, defendants argued that plaintiffs did not adequately plead thatdefendants' actions proximately caused them damages. With respect to the ConsumerFraud Act count, defendants asserted that no liability can be found where themisrepresentations are discoverable by plaintiffs through the exercise of ordinarycare. Rather, defendants must misrepresent facts of which they possess almostexclusive knowledge and the truth or falsity must not be readily ascertainable byplaintiffs. On the common-law fraud count, defendants responded that amisrepresentation concerning a matter of public knowledge could not support acause of action against a realtor for common-law fraud. Moreover, given thatplaintiffs independently confirmed the District 204 boundaries prior to the sale,they could not establish that they reasonably relied upon defendants'advertisement or that defendants proximately caused them damages.

Defendants further argued that plaintiffs did not adequately plead negligentmisrepresentation because they did not plead any facts to support their claim thatdefendants knew or should have known that the property was not located withinDistrict 204. Moreover, even if defendants should have known about the trueboundary, representations that concern matters of public knowledge cannot serveas the basis of a misrepresentation claim against a realtor in connection with thepurchase or sale of real estate. Finally, because plaintiffs received essentiallythe same information from the District's employees prior to purchase, they did notplead the reliance element adequately to sustain the claim.

With respect to the Real Estate License Act claim, defendants responded thatthere is no reasonable basis to infer that defendants knew of the boundaries,where the school district itself was not aware of them.

On February 1, 2002, the trial court dismissed plaintiffs' amended complaintwith prejudice. Plaintiffs appeal.

II. ANALYSIS

A. Standard of Review

A motion to dismiss under section 2--615 of the Code of Civil Procedure (735ILCS 5/2--615 (West 2000)) challenges only the legal sufficiency of the complaint. Jarvis v. South Oak Dodge, Inc., 201 Ill. 2d 81, 85 (2002). The critical inquiryis whether the allegations of the complaint, when construed in the light mostfavorable to the plaintiff, are sufficient to state a cause of action upon whichrelief may be granted. In making this determination, all well-pleaded facts inthe complaint must be taken as true. Jarvis, 201 Ill. 2d at 86. We review denovo an order granting a section 2--615 motion to dismiss. Raintree Homes, Inc.v. Village of Long Grove, 335 Ill. App. 3d 317, 319 (2002).

B. Common-Law Fraud

Plaintiffs argue that they adequately pleaded common-law fraud. Theyalleged that defendants made an affirmative misrepresentation of a fact in theirsales brochure and that plaintiffs justifiably relied on defendants'representation, notwithstanding the existence of any public records that woulddisclose the truth.

The elements of common-law fraud are: (1) a false statement of a materialfact; (2) defendant's knowledge that the statement was false; (3) defendant'sintent that the statement induce plaintiff to act; (4) plaintiff's reliance uponthe truth of the statement; and (5) plaintiff's damages resulting from relianceon the statement. Connick v. Suzuki Motor Co., 174 Ill. 2d 482, 496 (1996).

We conclude that plaintiffs pleaded no facts supporting their allegationthat defendants knew that the statements about the school district were false. Because this failure is fatal to plaintiffs' common-law fraud claim, we do notaddress the other elements. Plaintiffs alleged in conclusory fashion thatClermont's statements were made with knowledge that the information was untrue. They also asserted that it is widely known in the real estate industry thatconsiderable misinformation exists about school district boundaries in Bolingbrookand that Clermont took no action to determine which district the property waslocated in, other than reviewing prior listings from previous sales. Plaintiffs'allegations regarding the misinformation about Bolingbrook school districts arenot facts from which a trier of fact could conclude that defendants knew thattheir statements were false. Estate of Johnson v. Condell Memorial Hospital, 119Ill. 2d 496, 509-10 (1988) (legal conclusions unsupported by allegations ofspecific facts are insufficient to state a cause of action). We thus affirm thetrial court's ruling with respect to plaintiffs' common-law fraud count.

C. Consumer Fraud Act

Plaintiffs next argue that they adequately pleaded a violation of theConsumer Fraud Act. We agree.

The elements of a claim under the Consumer Fraud Act are: (1) a deceptiveact or practice by the defendant; (2) the defendant's intent that the plaintiffrely on the deception; (3) the occurrence of the deception in the course ofconduct involving trade and commerce; and (4) actual damage to the plaintiff (5)proximately caused by the deception. Oliveira v. Amoco Oil Co., 201 Ill. 2d 134,149 (2002). A plaintiff alleging a violation of the Consumer Fraud Act does nothave to show actual reliance on the deceptive act or that the defendant committedthe deceptive act in bad faith. Randels v. Best Real Estate, Inc., 243 Ill. App.3d 801, 805 (1993). A defendant need not have intended to deceive the plaintiff;innocent misrepresentations or omissions intended to induce the plaintiff'sreliance are actionable under the statute. Miller v. William Chevrolet/GEO, Inc.,326 Ill. App. 3d 642, 655 (2001). Generally, a deceptive representation oromission of law does not constitute a violation of the Consumer Fraud Act becauseboth parties are presumed to be equally capable of knowing and interpreting thelaw. Randels, 243 Ill. App. 3d at 805.

We address first defendants' argument that the Consumer Fraud Act has onlylimited application to realtors. They point to section 10b(4), which reads asfollows:

"