SECOND DIVISION
OCTOBER 8, 1996
1-95-4140
1-95-4197
GAINER BANK, N.A.,
Plaintiff-Appellee,
v.
DARLENE JENKINS,
Defendant-Appellant.
) Appeal from the
) Circuit Court of
) Cook County.
)
) No. 93 CH 1837
)
) The Honorable
) John Hourihane,
) Judge Presiding.
JUSTICE DiVITO delivered the opinion of the court:
In this interlocutory appeal we are asked to determine
whether, under the circumstances present here, an Indiana holder of
a retail installment sales contract was required to comply with the
Illinois Motor Vehicle Retail Installment Sales Act (Ill. Rev.
Stat. 1991, ch. 121, par. 561 et seq. (now 815 ILCS 375/1 et seq.
(West 1994))) (the Act) before repossessing a car in Illinois. For
the reasons that follow, we conclude that the provisions of the Act
do not apply in this case.
In July 1987, defendant Darlene Jenkins entered into a retail
installment sales contract for the purchase of a used 1984 Buick
with Schepel Buick, Inc., an automobile dealer in Merrillville,
Indiana. The cost of the Buick was $8,500, plus 14.90% annual
interest, to be paid in 48 payments. Schepel Buick immediately
assigned the contract to plaintiff Gainer Bank, N.A., an Indiana
bank.
In November 1987, plaintiff purchased "force placed" insurance
for the Buick, believing that defendant failed to furnish an
insurance policy as required by the contract. By April 1991, the
premiums for the insurance, which were added to defendant's loan
balance, totalled almost $4,200. In January 1991, when defendant
failed to make payments, plaintiff obtained a default judgment for
the Buick's possession in Indiana and had it repossessed in
Illinois and sold at a public auction.
In June 1991, plaintiff filed the instant action seeking
payment of the deficiency balance of the contract, including the
amount of the insurance. Later, after receiving proof that
defendant was insured during the time she had possession of the
Buick, plaintiff amended its complaint to credit her for the costs
of the insurance.
In May 1993, defendant filed an answer and affirmative
defenses and counterclaimed, individually and on behalf of a class
of persons allegedly injured by plaintiff. In count V of her
counterclaim, she contended that plaintiff's repossession and sale
of the Buick violated the Illinois Consumer Fraud and Deceptive
Business Practices Act (815 ICLS 505/1 et seq. (West 1994)) by
failing to comply with the Act. Count VI, in which defendant
alleged conversion, was based in part on purported violations of
the Act. Her fifth, part of her sixth, and her eighth affirmative
defenses also raised the Act as a bar to plaintiff's collection of
a deficiency judgment.
In August 1993, plaintiff moved to dismiss counts I through
V of defendant's counterclaim and to strike her first through
fifth, part of her sixth, and her eighth and ninth affirmative
defenses. Finding that the Act was inapplicable to the instant
case, the circuit court dismissed and struck those portions of
defendant's filings that were predicated upon it: count V and part
of count VI of the counterclaim and the fifth, part of the sixth,
and the eighth affirmative defenses.
Pursuant to Supreme Court Rule 308 (134 Ill. 2d R. 308), the
circuit court certified for appeal the question of whether section
20 of the Act applies to this case. We granted defendant's motion
for leave to appeal and this interlocutory appeal followed.
The sole question presented in this appeal is whether section
20 of the Act applies to a motor vehicle retail installment sales
contract where the contract was entered into and payments were made
in Indiana, but the vehicle at issue was titled, insured, kept, and
repossessed in Illinois.
The Act was enacted to protect the unsophisticated motor
vehicle consumer from the oppressive and unscrupulous practices of
the installment seller. Chrysler Credit Corp. v. Ross, 28 Ill.
App. 3d 165, 168-71, 328 N.E.2d 65 (1975).
Section 20 of the Act provides that a holder of a motor
vehicle retail installment sales contract must comply with certain
requirements before repossessing a car or selling it. Ill. Rev.
Stat. 1991, ch. 121, par. 580 (now 815 ILCS 375/20 (West 1994)).
Where the holder fails to comply with the requirements of section
20, the buyer of the car is not liable for any finance,
delinquency, collection, or refinancing charges connected with the
contract. Ill. Rev. Stat. 1991, ch. 121, par. 584 (now 815 ILCS
375/24 (West 1994)). Here, defendant contends that because
plaintiff failed to comply with section 20, it may not collect a
deficiency judgment.
Plaintiff first contends that the Act is inapplicable because
it does not create a private right of action. Arca v. Colonial
Bank & Trust Co., 265 Ill. App. 3d 498, 502, 637 N.E.2 687 (1994).
Because defendant is not suing under the Act, but invokes it merely
to prove violations of the Consumer Fraud and Deceptive Business
Practices Act (815 ILCS 505/1 et seq. (West 1994)) and to bar
plaintiff from collecting a deficiency judgment, plaintiff's
argument fails.
Both parties agree that in order for the Act to apply, the
instant contract must fall within the ambit of section 2.5. That
section provides that a retail installment contract "means an
instrument or instruments prescribing the terms of a retail
installment transaction and entered into or to be performed in this
State." (Emphasis added.) Ill. Rev. Stat. 1991, ch. 121, par.
562.5 (now 815 ILCS 375/2.5 (West 1994)). Here, the installment
contract for the sale of the Buick (the contract) was not entered
into in Illinois. Thus, the Act applies only if the contract was
"to be performed" in Illinois.
The contract, which is a boilerplate contract of adhesion,
provided that payments were to be made to plaintiff in Indiana.
Under a section entitled "Additional Terms and Conditions," the
contract further provided that the buyer agreed to a number of
conditions, including not selling the car until liabilities were
paid in full, not granting a lien on it, paying all necessary
taxes, keeping it fully insured, keeping it at the address
provided, notifying plaintiff of any change in address, and not
removing it without the written consent of plaintiff. In this
case, each of these obligations was performed in Illinois.
We note, however, that although the buyer was required to
comply with the conditions of the contract, there was no
requirement that she do so in Illinois. Defendant could have taken
the Buick to any state, provided that she complied with the
provisions requiring her to register, title, and insure it and keep
it at the address she provided. Because portions of the instant
contract were performed in Illinois, however, we turn to the
question of whether performance of some contractual provisions in
Illinois is sufficient to bring a transaction within the Act's
purview.
In a contract for the repayment of money lent, "[r]epayment is
the ultimate aim and objective of the contract." Restatement
(Second) of Conflict of Laws 195, Comment b, at 620-21 (1971).
Where the ultimate object of a contract is the payment of money,
the contract is to be performed where payment is made. Reighley v.
Continental Illinois National Bank & Trust Co., 390 Ill. 242, 250,
61 N.E.2d 29 (1945); George v. Haas, 311 Ill. 382, 386, 143 N.E. 54
(1924). Here, the chief purpose of the contract was repayment of
the loan to purchase the Buick. Because the additional conditions
were intended to protect plaintiff's interest in the car, we
conclude that those conditions, which were incidentally performed
in Illinois, were not an integral part of the contract. That those
ancillary conditions were to be performed in Illinois is
insufficient to bring the contract within the purview of the Act.
Accordingly, because payments in this case were made in Indiana and
the contract was to be performed in Indiana, the Act does not
apply.
The cases cited by defendant wherein courts held that the law
of the state of repossession governs the issues of the legality of
the repossession and the sale of the vehicle, even where the
vehicle was purchased in another state, are not helpful. Dunn v.
Security Pacific Housing Service, No. 94C-05-113 (Del. Super. Ct.
September 27, 1995); General Motors Acceptance Corp. v. Robinson,
263 A.2d 302 (Del. Super. Ct. 1970); United Securities Corp. v.
Tomlin, 57 Del. 219, 198 A.2d 179 (Del. Super. Ct. 1964). In each
of the cited cases, the courts applied choice of law principles in
reaching their determination.
Here, in contrast, we interpret a specific statutory provision
which, in stating that it applies only to contracts entered into or
to be performed in Illinois, circumscribes its own geographic
applicability. That limitation must be given the range of
application intended by the legislature. Restatement (Second) of
Conflict of Laws 6, Comment b, at 11 (1971). Had the legislature
intended the Act to have a broader reach, it could have so
provided. See, e.g., 815 ILCS 710/3 (West 1994) (providing that
the Motor Vehicle Franchise Act applies to "any person who engages
directly or indirectly in purposeful contacts within this State").
Finally, although defendant urges us to invoke the Act because
of public policy concerns, the Act's primary purpose is to regulate
the content of motor vehicle retail installment contracts; the
buyer's rights upon default are but one section of it. Cf. Ill.
Rev. Stat. 1991, ch. 121, par. 563 (now 815 ILCS 375/3 (West
1994)) (general requirements of contract); Ill. Rev. Stat. 1991,
ch. 121, par. 564 (now 815 ILCS 375/4 (West 1994)) (identification
of parties and subject matter of contract); Ill. Rev. Stat. 1991,
ch. 121, par. 565 (now 815 ILCS 375/5 (West 1994)) (terms and
conditions of contract); Ill. Rev. Stat. 1991, ch. 121, par. 580
(now 815 ILCS 375/20 (West 1994)) (buyer's remedies upon default).
It would be improper for Illinois courts, in invoking the Act, to
regulate the minutia of contracts entered into and performed in
Indiana, simply because a consumer takes the purchased property to
Illinois, then breaches her obligation to make payments. Thus, in
the absence of specific authorizing legislation, we decline to
provide a breaching party the power to control the law applicable
to a contract by moving the purchased property to a state other
than the one in which the contract was made, thereby forcing a
creditor to repossess in the state where the property is kept.
Accordingly, we answer the certified question in the negative:
the Act does not apply to the repossession of a car in Illinois
where the motor vehicle retail installment sales contract was
entered into and payments were made in Indiana, even though
conditions peripheral to the contract were fulfilled and the
repossession occurred in Illinois. The judgment of the circuit
court is affirmed.
Affirmed.
HARTMAN, P.J., and BURKE, J., concur.