Lead Opinion
delivered the opinion of the court:
We filed our original decision in this case February 20, 2002, and modified it on denial of rehearing on April 16, 2002. Shannon v. Boise Cascade,
In Oliveira, the plaintiff alleged that Amoco had made false representations concerning its premium gasolines, which representations increased consumer demand, allowing Amoco to charge an inflated price, and thereby caused actual damage to a class of purchasers of which plaintiff was a member. Plaintiff did not allege, however, that defendant’s advertisements induced him to buy the gasoline or that he was deceived by the ads. Oliveira,
The supreme court determined that its decision in Oliveira was controlled by its decision in Zekman v. Direct American Marketers, Inc.,
There are differences between the present case and Oliveira. In the present case, plaintiffs do not simply complain of price; plaintiffs do complain that the product they purchased was defective, that it was something other than what they expected to receive. This is not a case where purchasers who saw the ads but never believed them, purchasers who “knew the truth,” would nevertheless have valid claims. As discussed in our original decision, below, a purchaser who buys the home at a discount because of known problems with the siding has not been damaged and would have no claim.
It is sometimes possible to rely on misrepresentations without reading the documents in which such misrepresentations are made. The purchaser of an automobile does not read all the representations made by the manufacturer of the tires; he counts on the automobile manufacturer to do so, but he relies on them just the same. Purchasers of homes employ builders, architects, and engineers to examine the product literature for them; and it is a mistake to say that home purchasers do not rely on that product literature. The fact is noted in Oliveira that plaintiff did not “claim that he saw, heard[,] or read any of the allegedly deceptive advertisements.” Oliveira,
Justice Turner’s dissent suggests that there are problems with the allegations of plaintiffs’ complaint, that plaintiff does not “allege that he was, in some manner, deceived.” Oliveira,
Our original decision follows.
This action is brought under the Act (Ill. Rev. Stat. 1983, ch. 121V2, pars. 261 through 272 (now see 815 ILCS 505/1 through 12 (West 2000))). The complaint seeks a determination that the action be maintained as a class action. 735 ILCS 5/2 — 802(a) (West 2000). The circuit court entered summary judgment in favor of defendant, Boise Cascade. We reverse and remand.
I. BACKGROUND
Plaintiffs, Lisa M. Shannon, Timothy J. Shannon, Brian K. Connelly, Susan West, Shapour Arami, Bruce Fischer, and James Torongo, own homes in Du Page County, which were built in 1983 or 1984. Plaintiffs Fischer and Torongo are the original owners of their homes, purchasing them in 1984. Most of the other plaintiffs purchased their homes in 1997, one in 1991. Boise Cascade manufactured an exterior composite wood siding product that was installed on the homes when they were built. Boise Cascade began manufacturing its composite siding about 1960 but has not manufactured, sold, or marketed the siding since 1984.
Plaintiffs’ second-amended complaint, with amended count I, alleges a violation of section 2 of the Act (Ill. Rev. Stat. 1983, ch. 121½, par. 262 (now see 815 ILCS 505/2 (West 2000))). The complaint alleges that Boise Cascade’s composite siding was subject to rotting, buckling, warping, wick moisture, and general failure. The complaint alleges that Boise Cascade deceptively advertised the composite siding, falsely representing that the siding was “of inherent good quality,” “durable,” “low maintenance,” and “looked and performed comparably to natural wood siding.” The complaint also alleges that Boise Cascade fraudulently and deceptively failed to disclose that its siding “performed poorly in the field,” with a “high rate of failure,” was sensitive to moisture, and required “highly particularized maintenance.”
The circuit court entered summary judgment for Boise Cascade, noting that while further discovery may be necessary to determine whether Boise Cascade’s marketing activity was false, misleading, or otherwise deceptive, the court could address the factual premise of the motion that “seven of the eight plaintiffs neither saw, heard, or otherwise were aware of the defendant’s advertising,” which was strictly a legal issue. Although plaintiff Fischer bought his home new, he did not know that his siding was manufactured by Boise Cascade. Plaintiff Torongo knew that the siding had been manufactured by Boise Cascade, but there was no evidence he was aware of any representations by Boise Cascade. The court held that Torongo and Fischer could not rely on the representations of the builder-seller of their homes, as there was no evidence the builder-seller was an agent of Boise Cascade. The circuit court did refuse to enter summary judgment against plaintiff Jack B. Babel, who bought his home new in 1984, knew the siding was manufactured by Boise Cascade, and had read some of Boise Cascade’s publications prior to making his purchase. The circuit court rejected Boise Cascade’s argument that its representations were only nonactionable “puffing.”
The circuit court made a finding under Supreme Court Rule 304(a) that there is no just reason to delay enforcement or appeal. 155 Ill. 2d R. 304(a). Plaintiffs appeal, arguing that the circuit court improperly analyzed the elements of a cause of action under the Act, in particular the concepts of “materiality” and “proximate causation.” For purposes of this appeal we assume, as did the circuit court, that Boise Cascade’s composite siding was defective, that Boise Cascade’s representations were deceptive, and that Boise Cascade concealed facts with the intent that others rely thereon.
II. ANALYSIS
Although the use of summary judgment aids in the expeditious disposition of a lawsuit, “[sjummary judgment is a drastic measure and should only be granted if the movant’s right to judgment is clear and free from doubt.” Outboard Marine Corp. v. Liberty Mutual Insurance Co.,
A. The Consumer Fraud and Deceptive Business Practices Act
Section 2 of the Act declares “[ujnfair methods of competition” and “unfair or deceptive acts or practices” to be “unlawful whether any person has in fact been misled, deceived[,] or damaged thereby.” Ill. Rev. Stat. 1983, ch. 121½, par. 262 (now see 815 ILCS 505/2 (West 2000)). Among those methods and practices, two are specifically described: (1) “the use or employment of any deception, fraud, false pretense, false promise, [or] misrepresentation,” and (2) “the concealment, suppression^] or omission of any material fact, with intent that others rely upon the concealment, suppression^] or omission of such material fact.” Ill. Rev. Stat. 1983, ch. 121½, par. 262 (now see 815 ILCS 505/2 (West 2000)).
“Any person who suffers actual damage as a result of a violation of *** this Act committed by any other person may bring an action against such person.” Ill. Rev. Stat. 1983, ch. I2IV2, par. 270a(a) (now see 815 ILCS 505/10a(a) (West 2000)). Although the Act does not use the words “proximate cause,” a tort concept, the language of section 10a(a) has been held to give rise to a requirement that plaintiff show that the consumer fraud proximately caused plaintiffs injury. Connick v. Suzuki Motor Co.,
B. Privity
The circuit court construed the Act to require privity, some sort of direct contact between the plaintiffs and the representations made by Boise Cascade. The circuit court construed the Act too narrowly. The Act created a new cause of action that affords consumers broad protection by prohibiting any deception or false promise. Miller v. William Chevrolet/Geo, Inc.,
Even common-law fraud did not require privity between the plaintiff and defendant, only that the statement by the defendant be made with the intention that it reach the plaintiff and influence his action and that it does reach him and that he does rely upon it, to his damage. St. Joseph Hospital v. Corbetta Construction Co.,
The circuit court entered summary judgment against plaintiffs Fischer and Torongo, who bought their homes new, concluding that they were not aware of any representations by Boise Cascade. The builder-seller of the homes was probably aware of the representations, but according to the circuit court that did not help plaintiffs because there was no evidence the builder-seller was an agent of Boise Cascade. That analysis is mistaken. Whether or not the builder-seller was Boise Cascade’s agent, Boise Cascade’s representations reached plaintiffs through the builder-seller, and plaintiffs Fischer and Torongo relied upon those representations, to their damage. In the St. Joseph Hospital case, General Electric made representations in a letter to the contractor that its Textolite plastic laminate wall paneling did not carry a flame spread rating of any kind. St. Joseph Hospital,
The circuit court’s insistence on privity is apparent in its analysis of what constitutes a “material fact.” The Act provides that the “concealment *** of any material fact, with intent that others rely upon the concealment,” is unlawful. Ill. Rev. Stat. 1983, ch. 121V2, par. 262 (now see 815 ILCS 505/2 (West 2000)). Not every concealment of a fact is unlawful. A manufacturer is generally under no obligation, for example, to disclose the day the product was made, the rate of pay of its workers, or what its product tastes like. The concealed fact must be “material.” “A material fact exists where a buyer would have acted differently knowing the information, or if it concerned the type of informátion upon which a buyer would be expected to rely in making a decision whether to purchase.” Connick,
C. Proximate Cause
The circuit court determined that plaintiffs were relying on a marketing theory of proximate cause and that to prevail plaintiffs must establish that “without the allegedly deceptive advertising, the defendant would not have been in the siding business, because there would have been no market for its siding.” Cf. Munjal v. Baird & Warner, Inc.,
“Thus, it seems that no representation or non[ disclosure concerning Boise Cascade siding could have affected their purchasing decision. The conclusion seems inescapable, therefore, that nothing the defendant said, wrote, advertised!,] or refrained from disclosing could proximately cause the damages six of the plaintiffs claim they have suffered.”
The circuit court’s conclusion as a matter of law that causation was too remote, that there was no proximate causation, is erroneous. Where reasonable minds could differ whether the defendant’s conduct was a substantial factor in bringing about the injury, the matter is for the jury to decide. Lee v. Chicago Transit Authority,
The term “proximate cause” describes two distinct requirements: cause in fact and legal cause. Lee,
When a manufacturer is able to incorporate its defective product into a building by deception and the concealment of material facts, it is foreseeable that the purchaser or some subsequent purchaser will suffer damages when the defect is discovered. The proposition that use of defective materials, as a result of misrepresentation, will cause damages when the defects are discovered is not a highly extraordinary one. Using the circuit court’s terms, was it possible or foreseeable that Boise Cascade’s representations, of which plaintiffs were unaware, “could have affected their purchasing decision”? Deceptive advertising can affect a home buyer who is unaware of it, if it is relied upon by those with whom he deals, such as architects or builders. See St. Joseph Hospital,
Boise Cascade knew there would be subsequent buyers. Boise Cascade disseminated its allegedly deceptive advertising for the purpose that it would be relied upon. It makes no difference whether the deceptive advertising was read by architects, builders, or new home buyers, or whether they saw and liked homes built by others who had read the advertising. Proximate cause need not be the only cause, nor the last or nearest cause. The trial court’s view of proximate cause is overly restrictive. See Colonial Inn Motor Lodge, Inc. v. Gay,
D. Other Arguments
The argument is made that plaintiffs’ “marketing theory” would result in infinite liability for the manufacturer for any injury associated with the product. It is not correct that every purchaser of these homes from this time forward will have a cause of action against Boise Cascade. Only a purchaser who paid full price for the home, unaware of the defect, and then was unable to resell the home for its full price would have a cause of action. A purchaser who buys the home at a discount because of known problems with the siding has not been damaged.
In some marketing transaction cases, plaintiffs may be far removed from the deception or concealment. For example, in stock transactions, private representations may be made to only a few individuals, causing them to purchase the stock and driving up the price. Other individuals with no access to the representations may also purchase the stock at the inflated price (not necessarily from the individuals to whom the representations were made) and attempt to recover for the representations. See Oliveira v. Amoco Oil Co.,
We further reject the circuit court’s contention that plaintiffs cause of action is inconsistent with the Uniform Commercial Code (810 ILCS 5/2 — 316(2), (3) (West 2000)), which allows the disclaimer of an implied warranty of merchantability. There is nothing wrong with a manufacturer marketing Grade D siding. A problem only arises where the manufacturer markets that siding as Grade A siding. The existence of defects unaccompanied by misrepresentations does not amount to fraud. Naiditch v. Shaf Home Builders, Inc.,
III. CONCLUSION
The focus of the Act is upon the conduct of the defendants, not upon the conduct of the plaintiffs. Whether defendants are guilty of unlawful practices under the Act must be determined without considering whether any person has in fact been misled, deceived, or damaged thereby. If defendants are guilty of unlawful practices, the question becomes whether plaintiffs have suffered actual damage as a result, normally a question for the jury. We cannot say that a reasonable jury could never conclude that plaintiffs sustained damages or that those damages were a natural and probable consequence of Boise Cascade’s unlawful conduct.
We reverse the tria) court’s order entering summary judgment and remand for further proceedings.
Reversed and remanded.
KNECHT, J., concurs.
Dissenting Opinion
dissenting:
I dissented in the majority opinion as modified upon denial of rehearing (Shannon,
I find the majority’s insouciance to our supreme court’s decision in Oliveira vexing. As the majority notes, in Oliveira, the supreme court stated explicitly that a plaintiff pleading a private cause of action under the Act must allege that he or she was deceived.
In Oliveira,
Additionally, the majority believes this infirmity does not exist because “a purchaser who buys the home at a discount because of known problems with the siding has not been damaged and would have no claim.”
The majority attempts to dismiss the second infirmity, that “purchasers of defendant’s premium gasolines who never saw the ads and, thus, were ‘not deceived’ also have valid claims.” Oliveira,
Additionally, the majority asserts that “ [purchasers of homes employ builders, architects, and engineers to examine the product literature for them; and it is a mistake to say that home purchasers do not rely on that product literature.”
The majority acknowledges that “[u]nder Oliveira, a plaintiff must allege *** ‘that he was, in some manner, deceived’ ” and concludes “[pjlaintiff does so here.”
