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Adams v. Greg Weeks, Inc.

Case Date: 01/25/2002
Court: 5th District Appellate
Docket No: 5-00-0488 Rel

                    NOTICE
Decision filed 01/25/02.  The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same

NO. 5-00-0488

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT

WILMA ADAMS,

     Plaintiff and Counterdefendant-
     Appellee,

v.

GREG WEEKS, INC.,

     Defendant,

and

GENERAL MOTORS ACCEPTANCE
CORPORATION,

     Defendant and Counterplaintiff-
     appellant

(Wilburn Adams, Counterdefendant-
Appellee).

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)		 Appeal from the
Circuit Court of
Williamson County.


No. 96-L-96












Honorable
Phillip G. Palmer,
Judge, presiding.

JUSTICE GOLDENHERSH delivered the opinion of the court:


Defendant General Motors Acceptance Corp. (GMAC) appeals from an order of thecircuit court of Williamson County entering a judgment in favor of Wilma Adams (plaintiff). On appeal, GMAC raises issues as to (1) whether plaintiff ratified a retail installmentcontract held by GMAC and (2) whether the trial court erred in denying GMAC's requestfor a replevin.

FACTS

The facts of this case resemble a law school hypothetical. Although both partiesstrongly assert different rights in this matter, much of the evidence appears uncontested. According to plaintiff, on September 13, 1995, plaintiff and her husband, Wilburn Adams,purchased a 1995 Chevrolet pickup from defendant Greg Weeks, Inc. (Weeks). At this time,both defendant and her husband entered into a retail installment contract on a form providedby GMAC. Wilburn Adams signed as the buyer and plaintiff signed as the cobuyer. Underthe terms of this contract (the first contract), the payment was to be made in one-yearinstallations over a period of five years.

According to plaintiff, Wilburn Adams returned to Weeks a few days later,purportedly to purchase a bedliner. At that time, a different retail installment contract (thesecond contract) was presented to Wilburn Adams that would require payments twice a year. Wilburn testified that he signed the document but was never told he was signing a newcontract. Although plaintiff never signed this second contract, her purported signature wason the contract. Plaintiff presented testimony from Mark Thompson, an employee of Weeks,that the first contract was destroyed.

GMAC purchased the second contract from Weeks. According to GMAC, it thensent a letter to plaintiff and her husband regarding the second contract, and plaintiffresponded in writing that she did not sign the second contract. Leland Barker, an employeeof GMAC, purportedly telephoned plaintiff and informed her that GMAC would agree tothe terms of the first contract, but plaintiff refused.

GMAC asserts that plaintiff and her husband made no payments to GMAC or Weekson the vehicle. GMAC contends that improvements and a repair from an accident weremade to the vehicle, even after plaintiff and her husband were informed of GMAC holdingthe second contract. GMAC also contends that plaintiff and her husband listed the cost ofthe pickup truck as a business expense on their joint tax returns.

Plaintiff filed a complaint against GMAC and Weeks. Plaintiff sought a declaratoryjudgment that the second contract was invalid due to the alleged forgery of her signature. Plaintiff also alleged common law fraud and a violation of the Consumer Fraud andDeceptive Business Practices Act (815 ILCS 505/2 (1994)) against Weeks.

GMAC filed a counterclaim against both plaintiff and Wilburn Adams and requestedin alternate counts a replevin and a money judgment for their failure to pay on the secondcontract.

The common law fraud charges of plaintiff against Weeks were tried in front of a juryin May 2000. The remaining counts were tried in front of the bench. The jury found infavor of Weeks and against plaintiff on the common law fraud count. The bench ruled infavor of Weeks and against plaintiff on the claims under the Consumer Fraud and DeceptiveBusiness Practices Act.

The court ruled in favor of plaintiff and against GMAC on her claim that the secondcontract was invalid as to her. On the counterclaim, the court found in favor of GMAC andagainst Wilburn Adams in the sum of $33,987.79 plus attorney fees on GMAC's claim ofa breach of the second contract. The court denied GMAC's request for the replevin of thetruck, finding that plaintiff had a superior right to possession due to the first contract. GMAC appeals.

ANALYSIS

GMAC argues that plaintiff ratified the second contract by keeping the benefits of thecontract after she received notice of its purchase by GMAC. Ratification may occur if aparty knows of an unauthorized signature but still retains the benefits of the contract (810ILCS 5/3-403 (West 2000)). According to GMAC, plaintiff's conduct in keeping the truck,therefore, ratified the second contract.

Plaintiff contends that GMAC's contention is misplaced because her retention of thevehicle was done pursuant to the first contract and not the second. Indeed, the court ruled,and the evidence suggests, that plaintiff agreed to purchase the truck from Weeks byentering into the first contract. As plaintiff agreed to purchase the truck under the firstcontract, it cannot be said that her retention of the truck ratified the second contract.

Plaintiff's retention of the truck was consistent with the terms of the first contract and,therefore, was not a ratification of the second contract. Upon retaining the truck, plaintiffincurred obligations only under the agreement she had entered into-that being the firstcontract. She incurred no further obligations. Any damages for the failure to fulfill theterms of the first contract must be enforced under that contract. Questions regardingplaintiff's fulfillment of the first contract are irrelevant to the issue of the ratification of thesecond contract. Any failure to fulfill the terms of the first contract did not create additionalobligations under another agreement.

GMAC's contractual rights are limited to the second contract. GMAC was not a partyto or a holder of the first contract. As such, the court correctly found that plaintiff has nocontractual obligations to GMAC.

GMAC also claims that the trial court erred in denying a replevin. GMAC filed atwo-count counterclaim against plaintiff and her husband, Wilburn Adams. Count I wasentitled "REPLEVIN" and count II was labeled "BREACH OF CONTRACT." In regardto count II, the court found that Wilburn Adams had executed and ratified the secondcontract. The court ruled that Wilburn Adams had breached the contract, and it awardedmonetary damages to GMAC. In regard to count I, however, the court ruled that GMACwas not entitled to replevin. The court stated, "Because [plaintiff] has a superior right topossession by virtue of the first contract with Weeks, Inc., which GMAC did not purchase,GMAC can not take possession." (Emphasis omitted.)

GMAC contends that the breach of the second contract by Wilburn Adams entitledit to replevin the truck. GMAC points out that the language of the second contract expresslygives the creditor a security interest in the vehicle. Therefore, according to GMAC, it hasa statutory right to possession of the vehicle. See 810 ILCS 5/9-101 et seq. (West 2000).

As a general rule, property and right of possession in a third person are a defense toan action of replevin. 77 C.J.S. Replevin