Wang v. Williams

Case Date: 09/10/2003
Court: 5th District Appellate
Docket No: 5-01-0872 Rel

Decision filed 09/10/03. 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. 5-01-0872

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT


ZHIYUAN WANG, ) Appeal from the
) Circuit Court of
              Plaintiff-Appellant, ) Jackson County.
)
v. ) No. 01-LM-181
)
KEVIN WILLIAMS and )
ROYAL RENTALS, a Partnership, ) Honorable
) E. Dan Kimmel,
              Defendants-Appellees. ) Judge, presiding.

JUSTICE GOLDENHERSH delivered the opinion of the court:

The plaintiff, Zhiyuan Wang, filed a complaint in the circuit court of Jackson Countyagainst Kevin Williams and Archie Williams, individually and doing business as RoyalRentals, a partnership (hereinafter referred to collectively as Royal Rentals). The subject ofthe complaint was the return of a security deposit. The court entered an order dismissingcertain counts and striking paragraphs in other counts of the plaintiff's complaint. Onreconsideration, the court affirmed the prior order and granted leave to appeal the dismissedcounts pursuant to Supreme Court 304(a) (155 Ill. 2d R. 304(a)). On appeal, the plaintiffraises the following issues: (1) whether the circuit court erred in dismissing count II of hiscomplaint, which alleged a violation of the Security Deposit Interest Act (the Act) (765ILCS 715/0.01 et seq. (West 2000)), and (2) whether the circuit court erred in dismissingcount IV of his complaint, which alleged a breach of contract. We reverse and remand.

FACTS

On May 23, 2001, the plaintiff filed his complaint against Royal Rentals. RoyalRentals operated 10 apartment buildings with a total of 227 units. The Carbondale, Illinois,apartment complex in which the plaintiff lived had more than 25 units itself.

The plaintiff alleged that he leased an apartment in Logan Apartments from aboutSeptember 25, 1998, until about May 23, 2000. The plaintiff paid a security deposit of$225. A lease signed by the plaintiff dated August 6, 1999, was attached to the complaintas an exhibit. Paragraph 3 of the lease, entitled "SECURITY DEPOSIT," concluded:"ROYAL agrees to return the balance of the security deposit, less any deductions fordamages or breach of this Lease, within thirty (30) business days after the expiration dateof this Lease Agreement. TENANTS agree to waive right to interest on security deposit."

Also attached to the complaint were several exhibits. A "Tenant Check[-]In Form"indicates that several areas of the house were marked as dirty. A "Housing Check[-]OutForm" indicates that all but three of these items were still listed as dirty. A documententitled "Itemized Deposit Return Receipt" noted a deposit in the amount of $225 butindicated that the plaintiff was being charged $460 for "cleaning charges" and $10 for a"hole in hallway." The document indicated that the amount of $245 was due to RoyalRentals. At no point was any part of the security deposit returned or any interest on thesecurity deposit paid to the plaintiff.

The plaintiff's complaint is in four counts and states that the claims are brought onbehalf of a class. Count I requests a return of the security deposit pursuant to the SecurityDeposit Return Act (765 ILCS 710/0.01 et seq. (West 2000)). Count II requests interestfrom the security deposit according to the Act (765 ILCS 715/0.01 et seq. (West 2000)). Count III alleges a violation of the Illinois Consumer Fraud and Deceptive BusinessPractices Act (815 ILCS 505/1 et seq. (West 2000)). Count IV alleges a breach of contract. The plaintiff made class allegations for each count. Royal Rentals filed a suggestion of thedeath of Archie Williams on January 16, 2001.

The plaintiff filed a motion for class certification. Royal Rentals filed a documententitled "Motion Attacking Complaint." The court entered an order dismissing count II andcount IV pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West2000)) and striking specific paragraphs of count I and count III pursuant to section 2-615of the Code of Civil Procedure (735 ILCS 5/2-615 (West 2000)). The plaintiff filed amotion for reconsideration. The court denied the motion and affirmed the prior order asfinal and appealable (see 155 Ill. 2d R. 304(a)). The plaintiff appeals.

ANALYSIS

In his brief, the plaintiff raises issues regarding the striking of paragraphs in countsI and III. Royal Rentals points out that the trial court merely struck certain allegations incount I and count III and that, therefore, the court's ruling on these counts was not final andappealable. See 155 Ill. 2d R. 304(a); Lee v. Juhlin, 25 Ill. App. 2d 221, 227, 166 N.E.2d459, 462 (1960). At the beginning of the oral argument in this court, the plaintiff's counselconceded this point, and this decision only concerns the dismissal of count II and count IV. The plaintiff contends that the trial court erred in dismissing count II. Count II setsforth a claim under the Act (765 ILCS 715/0.01 et seq. (West 2000)). The Act provides thatfor any residential property containing more than 25 units, a lessor is obligated to pay alessee interest on any security deposit. 765 ILCS 715/1, 2 (West 2000). A lessor whowillfully fails to pay the interest is also liable for court costs and attorney fees. 765 ILCS715/2 (West 2000).

Royal Rentals contends that the lease is a clearly expressed waiver of the statutoryright to receive interest. The lease agreement states, "TENANTS agree to waive right tointerest on security deposit."

Royal Rentals' assertion that the plaintiff waived his right to interest under the Actis unconvincing. Royal Rentals contends that whether statutory protection can be waivedby contract depends on whether the right in question is conferred for the benefit of thepublic at large rather than solely for the private benefit of individuals. See O'Brien v.Encotech Construction Services, Inc., 183 F. Supp. 2d 1047, 1049 (N.D. Ill. 2002); Peopleex rel. American Bankers Insurance Co. v. Palmer, 363 Ill. 499, 511, 2 N.E.2d 728, 733(1936); In re Estate of Ferguson, 313 Ill. App. 3d 931, 937, 730 N.E.2d 1205, 1210 (2000);Department of Public Aid ex rel. Allen v. Dixson, 323 Ill. App. 3d 600, 603, 752 N.E.2d1147, 1150 (2001). The Act, however, does not merely confer a benefit on individuals. TheAct protects a class of people-those who rent from large property owners. See Munroe v.Brower Realty & Management Co., 206 Ill. App. 3d 699, 704, 565 N.E.2d 32, 35 (1990);Dickson v. West Koke Mill Village Partners, 329 Ill. App. 3d 341, 346, 769 N.E.2d 971, 975(2002) (discussing the protection of a class under the Act); Gittleman v. Create, Inc., 189Ill. App. 3d 199, 203, 545 N.E.2d 237, 240 (1989) (the legislative history indicates that thepolicy for awarding costs and attorney fees is to set a penalty for landlords who ignore themandate of the Act). The right to interest provided by the Act is a consideration of publicconcern.

The plaintiff's position is supported by precedent. In Gittleman, tenants sued alandlord for security deposits and interest refunds under the Act. Gittleman, 189 Ill. App.3d at 201, 545 N.E.2d at 238. The leases had a stamped provision that read as follows: " 'Itis understood that the security deposit is net of security deposit interest, if any.' " Gittleman,189 Ill. App. 3d at 202, 545 N.E.2d at 239. The landlord claimed that this provision meantthat an amount was subtracted from the gross rent for each month as credit for interest onthe security deposit. The court found that the leases did not reflect the calculation describedby the landlord. The court stated, "[A] contractual acceptance of such explanation isquestionable." Gittleman, 189 Ill. App. 3d at 203, 545 N.E.2d at 240.

Royal Rentals contends that Gittleman is inapplicable in that the decision inGittleman was based on the vagueness of the contractual provision. Royal Rentals arguesthat Gittleman is distinguishable because the provision in this case clearly bars interest.

Royal Rentals' stance ignores the reason the Gittleman court found the vagueness ofthe contractual provision to be determinative. The court did not conclude that the contractfailed to clearly state that the tenants were not due interest. Instead, the court's decision wasbased on the failure of the contract to provide for the disbursement of the interest. Gittleman, 189 Ill. App. 3d at 204, 545 N.E.2d at 240. The vagueness of the contract meantthere was no clear mechanism for the disbursement of the interest. Indeed, the court wascritical of any attempt to circumvent the Act. The court concluded:

"As mentioned above, the lease unambiguously stated that the rent amount per monthand the security deposit would be $300. Clearly, the stamped provision anddefendant's explanation of its meaning are an attempt to avoid paying the interest. We conclude that, to the extent that defendant tried to circumvent the mandates of thestatute, it willfully refused to pay the required interest. Therefore, plaintiffs areentitled to the full statutory penalty of costs, which the trial court awarded, attorneyfees[,] and an amount equal to the amount of the security deposit." Gittleman, 189Ill. App. 3d at 204, 545 N.E.2d at 240.

Similarly, the dismissal of the plaintiff's claim for a breach of contract was in error. Count IV of the complaint alleges a breach of the implied terms for the return of the securitydeposit and interest on the deposit as required by the Security Deposit Return Act and theAct. The plaintiff points out that in the absence of language to the contrary, statutoryrequirements pertinent to a contract are considered a part of the contract as though they wereexpressly incorporated. See Brandt v. Time Insurance Co., 302 Ill. App. 3d 159, 169, 704N.E.2d 843, 850 (1998); S & D Service, Inc. v. 915-925 W. Schubert Condominium Ass'n,132 Ill. App. 3d 1019, 1023, 478 N.E.2d 478, 483 (1985).

Royal Rentals contends that the contract did not incorporate the provisions of the Act.Royal Rentals contends that the lease contained express provisions contrary to the Act andthat no contrary covenant should be implied. See Rubens v. Hill, 213 Ill. 523, 539, 72 N.E.1127, 1131 (1904). Royal Rentals' argument assumes that the requirements of the Act havebeen superceded by express provision in the lease. This assumption is incorrect. Theattempted avoidance of the protections of the Act was ineffectual. The fact that the intereston a security deposit is an essential element of a residential lease is underscored by RoyalRentals having language in the lease in an apparent attempt to circumvent the Act. Theprovisions of the Act are still implied into the lease. The plaintiff, therefore, still has acolorable claim for a breach of contract.

Accordingly, the order of the circuit court dismissing counts II and IV of theplaintiff's complaint is hereby reversed, and this cause is remanded for further proceedings.

Reversed; cause remanded.

CHAPMAN and DONOVAN, JJ., concur.

 

NO. 5-01-0872

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT


ZHIYUAN WANG, ) Appeal from the
) Circuit Court of
              Plaintiff-Appellant, ) Jackson County.
)
v. ) No. 01-LM-181
)
KEVIN WILLIAMS and )
ROYAL RENTALS, a Partnership, ) Honorable
) E. Dan Kimmel,
              Defendants-Appellees. ) Judge, presiding.

Opinion Filed: September 10, 2003


Justices: Honorable Richard P. Goldenhersh, J.

Honorable Melissa A. Chapman, J., and

Honorable James K. Donovan, J.,

Concur


Attorneys Daniel A. Edelman, Cathleen M. Combs, James O. Latturner, Adam M. Berger,

for Edelman, Combs & Latturner, LLC, 120 South LaSalle Street, Suite 1800, Chicago,

Appellant IL 60603; John R. Clemons, Clemons & Hood, 813 West Main, Carbondale, IL

62901


Attorney Edward J. Heller, Reed, Heller, Mansfield & Gross, 1100 Walnut, P.O. Box 727,

for Murphysboro, IL 62966

Appellees