Hill v. PS Illinois TrustHill v. PS Illinois Trust
delivered the opinion of the court:
The storage facility sold off plaintiffs property because his rent payments were overdue. That sale gives rise to the plaintiff’s constitutional and statutory claims we address in this appeal.
Plaintiff Theo Hill filed a class action lawsuit against defendant PS Illinois Trust (PS), alleging the Illinois Self-Storage Facility Act (Storage Act) (
PS moved to dismiss plaintiffs case pursuant to section 2 — 615 of the Illinois Code of Civil Procedure (Code) (
On appeal, plaintiff contends the trial court erred when it determined he failed to allege the requisite state action necessary to support a claim under the Illinois due process clause, and that he failed to state a claim under the Act. We affirm in part and reverse and remand in part.
FACTS
The pleadings reveal the facts relevant to this appeal. On August 5, 2003, defendant entered into a contract with PS for the rental of a storage locker in order to store his personal property. Plaintiff made his monthly payments for August and September. On October 17, 2003, plaintiff called PS’s storage facility to inform it that he would be late with October’s rent payment, but would make the payment later in the week. Plaintiff was told his account was past due, but was not told his property would be auctioned off if payment was not made.
Plaintiff was unable to make the October and November rental payments. On December 5, 2003, plaintiff called PS to check the balance on his account and arrange payment. Plaintiff was told his belongings were auctioned off on November 25, 2003. Plaintiff’s personal property was worth in excess of $25,000. According to plaintiff, he never received notice that PS would be auctioning off his property in order to enforce a lien created under section 3 of the Storage Act.
On January 26, 2005, plaintiff called PS to demand the return of any balance remaining from the lien sale, as required by section 4(j) of the Storage Act.
Plaintiff filed a two-count complaint against PS in the circuit court of Cook County. In count I, plaintiff sought, on behalf of himself and a putative class of PS customers, a declaratory judgment that the Storage Act was unconstitutional “on its face and as applied” because it failed to provide adequate notice. In count II, plaintiff alleged on his own behalf that PS, in violation of the Act, engaged in unfair and deceptive conduct when it sold his property.
PS moved to dismiss the complaint pursuant to
DECISION
A
I. Due Process
Plaintiff contends the trial court erred when it determined he failed to allege the requisite state action necessary to support a claim under the Illinois due process clause.
Initially, we note plaintiff has not indicated he complied with Supreme Court Rule 19 (134 Ill. 2d R. 19), which requires a litigant challenging the constitutionality of a statute, ordinance, or administrative regulation to serve notice of the challenge upon the Attorney General or other affected agency or officer. While we recognize the failure of a litigant to strictly comply with the rule may result in forfeiture, our supreme court has concluded that “a party’s failure to timely comply with Rule 19 does not deprive the court of jurisdiction to consider the constitutional issue.” Village of Lake Villa v. Stokovich,
To assert a violation of the Illinois due process clause, a plaintiff must allege a state action deprived him of a protected right, privilege, or immunity. In re Adoption of L.T.M.,
Plaintiff contends state action was properly alleged in this case because the State of Illinois “authorized” PS, under section 4 of the Storage Act, to violate his constitutional rights by selling his property without due process. See
In response, PS contends plaintiffs failure to attribute state action to PS’s decision to sell his goods is fatal to his due process claim. Defendant contends section 4 of the Storage Act permitted, but did not compel, PS to sell plaintiffs belongings. See
When appropriate, the Illinois Supreme Court has interpreted our state due process clause to provide greater protections than its federal counterpart. Lewis E. v. Spagnolo,
To support his contention, plaintiff relies on three United States Supreme Court decisions: Edmonson,
In Edmonson, the Court noted that “in determining whether a particular action or course of conduct is governmental in character, it is relevant to examine the following: the extent to which the actor relies on governmental assistance and benefits [citations]; whether the actor is performing a traditional governmental function [citations]; and whether the injury caused is aggravated in a unique way by the incidents of governmental authority.” Edmonson,
In Shelley, the Court concluded restrictive racial covenant agreements, standing alone, could not be regarded as a violation of any rights guaranteed by the fourteenth amendment. “So long as the purposes of those agreements are effectuated by voluntary adherence to their terms, it would appear clear that there has been no action by the State.” Shelley,
Finally, in Reitman, the
By contrast, in Flagg Brothers, Inc. v. Brooks,
The Court held the New York statute had done nothing more than “authorize (and indeed limit) — without participation by any public official — what Flagg Brothers would tend to do, even in the absence of such authorization, i.e., dispose of respondents’ property in order to free up its valuable storage space.” Flagg Brothers,
Notwithstanding, the plaintiffs contended Flagg Brothers’ proposed action under the statute was properly attributable to the State because “the State has authorized and encouraged it” by enacting the statute. Flagg Brothers,
Plaintiff contends Flagg Brothers is inapplicable here because the plaintiff in that case sought to hold individuals personally liable under
Contrary to plaintiff’s contention, however, the United States Supreme Court has noted: “ ‘In cases under
For example, in American Manufacturers Mutual Insurance Co. v. Sullivan,
“both an alleged constitutional deprivation ‘caused by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the State or by a person for whom the State is responsible,’ and that ‘the party charged with the deprivation must be a person who may fairly be said to be a state actor.’ ” (Emphasis in original.) Sullivan,526 U.S. at 50 ,143 L. Ed. 2d at 143-44 ,119 S. Ct. at 985 , quoting Lugar,457 U.S. at 937 ,73 L. Ed. 2d at 495 ,102 S. Ct. at 2753-54 .
The Court noted that in cases involving extensive state regulation of private activity, “we have consistently held that ‘[t]he mere fact that a business is subject to state regulation does not by itself convert its action into that of the State for purposes of the Fourteenth Amendment.’ ” Sullivan,
Whether such a “close nexus” exists depends on whether the State exercised coercive power or provided such significant encouragement, either overt or covert, that the choice must be deemed to be that of the state. Sullivan,
The dividing line we seek to apply in this case was clearly drawn by the United States Supreme Court in Tulsa Professional Collection Services, Inc. v. Pope,
The issue was whether state action wrongfully deprived a creditor of its property rights. Citing Flagg Brothers, the Court observed: “Private use of state-sanctioned private remedies or procedures does not rise to the level of state action.” Tulsa Professional Collection Services, Inc.,
The Court found significant state action because the probate court was “intimately involved throughout, and without that, involvement the time bar is never activated.” Tulsa Professional Collection Services, Inc.,
Similarly, the Illinois Supreme Court considered whether the Illinois distress-for-rent provisions (Ill. Rev. Stat. 1973, ch. 80, pars. 16 through 34) were unconstitutional in Cousins Club, Inc.,
“There are numerous holdings that when a creditor exercises his self-help remedy to repossess personal property as authorized under section 9 — 503 of the Uniform Commercial Code (Ill. Rev. Stat. 1973, ch. 26, par. 9 — 503) or under similar statutes, there is no State action involved so far as the question of due process is concerned.” Cousins Club, Inc.,64 Ill. 2d at 15 .
The question was not simply whether state action was involved but, rather, whether the role of the State was “sufficiently significant, constitutionally speaking, so that one may invoke the protection afforded by the due process clause.” Cousins Club, Inc.,
In an attempt to circumvent the holdings in Flagg Brothers, Sullivan, and Cousins Club, Inc., plaintiff contends the United States Supreme Court “unequivocally” held in Lugar: “While private misuse of a state statute does not describe conduct that can be attributed to the State, the procedural scheme created by the statute obviously is the product of state action.” (Emphasis added.) Lugar,
In this case, there is no question plaintiffs deprivation of property resulted from the exercise of a right or privilege having its source in state authority, i.e., the lien sale conducted pursuant to section 4 of the Storage Act. See
Similar to the statutes in Flagg Brothers and Sullivan, the Storage Act authorized, but did not require or compel, PS to sell plaintiffs personal property stored at the facility in order to satisfy a lien for past-due rent. Besides establishing the right to a lien and providing a self-help remedy by enacting the Storage Act, the State was not significantly involved in the seizure and sale of plaintiff’s property. See Cousins Club, Inc.,
While we recognize the State’s decision to provide storage facility owners the option of conducting a lien sale can be seen as encouragement to do just that, “this kind of subtle encouragement is no more significant than that which inheres in the State’s creation or modification of any legal remedy.” Sullivan,
We therefore conclude the trial court did not err in dismissing count I of plaintiffs complaint.
II. Consumer Fraud
Plaintiff contends the trial court erred in dismissing count II of his complaint because he adequately stated a cause of action under the unfair conduct prong of the Illinois Consumer Fraud Act.
The Act is “a regulatory and remedial statute intended to protect consumers, borrowers, and business people against fraud, unfair methods of competition, and other unfair and deceptive business practices.” Robinson v. Toyota Motor Credit Corp.,
Unfair or deceptive acts or practices are described in the Act as:
“including but not limited to the use or employment of any deception, fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon the concealment, suppression or omission of such material fact.”815 ILCS 505/2 (West 2004).
A plaintiff may allege that conduct is unfair under the Act without alleging that the conduct is deceptive. Saunders v. Michigan Avenue National Bank,
In dismissing count II of the complaint, the trial court found: “Plaintiff fails to allege that [PS] did not comply with the provisions of the Self Storage Facilities Act; therefore, Plaintiff fails to allege facts that constitute a violation of the act on any basis, let alone unfairness.”
Plaintiffs complaint, however, alleged PS violated the Consumer Fraud Act’s prohibition against unfair practices by failing to provide plaintiff with any form of statutorily required notice that his property was being sold. Plaintiff specifically alleged that he “never received notice, either by telephone, in-person delivery or certified mail, that [PS] would be seeking to enforcé the lien created in its favor,” as “required both by the Act itelf — see
Furthermore, plaintiff alleged PS’s conduct offended Illinois public policy, as embodied in the Storage Act; was unethical and oppressive because it was contrary to well-established industry practices and afforded him no reasonable opportunity to avoid the lien sale; and significantly harmed him because he lost nearly all of his possessions, including items of inestimable personal and sentimental value.
After reviewing the allegations contained in count II of the complaint, taking them as true, we find they were sufficient to state a cause of action under the Act for unfair conduct.
We therefore conclude the trial court erred in dismissing count II of plaintiffs complaint.
CONCLUSION
We affirm the trial court’s dismissal of count I of plaintiff’s complaint. We reverse the trial court’s dismissal of count II of plaintiffs complaint and remand for further proceedings.
Affirmed in part; reversed and remanded in part.
HOFFMAN and SOUTH, JJ., concur.