{ "id": 5800729, "name": "GENERAL MOTORS ACCEPTANCE CORPORATION, Plaintiff-Appellee, v. ERNEST KETTELSON, Defendant-Appellant", "name_abbreviation": "General Motors Acceptance Corp. v. Kettelson", "decision_date": "1991-10-17", "docket_number": "No. 2\u201491\u20140265", "first_page": "871", "last_page": "876", "citations": [ { "type": "official", "cite": "219 Ill. App. 3d 871" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "180 Ill. App. 3d 706", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2613113 ], "pin_cites": [ { "page": "713" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/180/0706-01" ] }, { "cite": "175 Ill. App. 3d 828", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3555505 ], "weight": 2, "pin_cites": [ { "page": "831" }, { "page": "831" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/175/0828-01" ] }, { "cite": "14 Ill. App. 3d 838", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2682125 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/14/0838-01" ] }, { "cite": "111 Ill. App. 3d 953", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5439714 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/111/0953-01" ] }, { "cite": "190 Ill. App. 3d 388", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2521210 ], "weight": 2, "pin_cites": [ { "page": "392" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/190/0388-01" ] }, { "cite": "187 Ill. App. 3d 354", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2666578 ], "weight": 3, "pin_cites": [ { "page": "357" }, { "page": "357" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/187/0354-01" ] }, { "cite": "210 Ill. App. 3d 215", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2533277 ], "weight": 2, "pin_cites": [ { "page": "218" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/210/0215-01" ] }, { "cite": "15 U.S.C. \u00a71601", "category": "laws:leg_statute", "reporter": "U.S.C.", "year": 1988, "pin_cites": [ { "page": "et seq." } ], "opinion_index": 0 } ], "analysis": { "cardinality": 569, "char_count": 11112, "ocr_confidence": 0.767, "pagerank": { "raw": 6.741107602731438e-08, "percentile": 0.40862073425902434 }, "sha256": "49cc8708eb6babfd8f6694b9f57f4755c3c0110ebcac372a32cc5e7d3af4eb9f", "simhash": "1:eb2216df6e59d4ed", "word_count": 1831 }, "last_updated": "2023-07-14T21:35:35.632923+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "GENERAL MOTORS ACCEPTANCE CORPORATION, Plaintiff-Appellee, v. ERNEST KETTELSON, Defendant-Appellant." ], "opinions": [ { "text": "JUSTICE INGLIS\ndelivered the opinion of the court:\nDefendant, Ernest Kettelson, appeals from an order of the circuit court of Du Page County entered in favor of plaintiff, General Motors Acceptance Corporation (GMAC), pursuant to Supreme Court Rule 304 (134 Ill. 2d R. 304). The order in question, entered June 8, 1990, dismissed, inter alia, count V and the \u201ccross claim\u201d on behalf of a class contained in defendant\u2019s first amended counterclaim. The order also denied defendant\u2019s motion to certify the class. On appeal, defendant contends that (1) the finance charge imposed in the retail installment contract was usurious and (2) the usury issue satisfies all the elements to be certified as a class action. We affirm.\nOn August 19, 1985, defendant entered into a retail installment sales contract with Talty Chevrolet, Buick, Cadillac, Inc., for the purchase of a 1985 Cadillac Seville. The balance of $25,106.10 was to be paid in 48 monthly installments of $673.53 beginning September 17, 1985. The annual percentage rate was 13%, with a total finance charge of $7,223.34. Defendant paid 36 monthly payments, but stopped paying in August 1988.\nPlaintiff filed a complaint on November 9, 1988, seeking possession of the vehicle or, in the alternative, damages equivalent to the value of the vehicle. Defendant filed an answer and a three-count counterclaim. Count I alleged the contract was void ab initio for failure to comply with the advertised finance rate and for violations of the Federal Consumer Credit Protection Act (15 U.S.C. \u00a71601 et seq. (1988)), the Consumer Installment Loan Act (Ill. Rev. Stat. 1987, ch. 17, par. 5401 et seq.) and the Interest Act (Ill. Rev. Stat. 1987, ch. 17, par. 6401 et seq.). Count II alleged fraud in that the number of payments under the contract had been changed from 36 to 48. Count III alleged the finance charge imposed was a usurious interest rate in violation of Illinois law.\nAfter the trial court dismissed counts I, II and III of defendant\u2019s counterclaim without prejudice, defendant filed his first amended counterclaim. The amended counterclaim alleged fraud in count IV, usury in count V and contained a \u201ccross claim\u201d for usury on behalf of a class. On June 8, 1990, the trial court entered an order dismissing counts IV, V and the \u201ccross claim,\u201d with prejudice, and denied defendant\u2019s motion to certify the class. The defendant filed a motion to vacate the order or, alternatively, to enter an order for interlocutory appeal pursuant to Supreme Court Rule 308.\nOn September 21, 1990, the court denied defendant\u2019s motion, but granted leave to file a second amended counterclaim. The defendant filed a second amended counterclaim on October 11, 1990, which included only one count, count IV based on fraud. On the same day, defendant filed a motion pursuant to Supreme Court Rule 304, requesting the trial judge to find no just reason for delaying enforcement or appeal of the court\u2019s order dismissing count V, the \u201ccross claim\u201d and the denial to certify the class. The motion requesting this written finding was denied on November 30,1990.\nOn February 14, 1991, the parties agreed to dismiss plaintiff\u2019s complaint and defendant\u2019s second amended complaint. As a condition to the settlement, the order of June 8, 1990, dismissing count I V and the \u201ccross claim\u201d for a class action, was deemed final and appealable by the trial judge. Notice of appeal was filed on March 4,1991.\nThe court in Spitz v. Goldome Realty Credit Corp. (1991), 210 Ill. App. 3d 215, announced the standard that applies in reviewing an order granting a motion to dismiss:\n\u201cA reviewing court *** must determine whether the allegations of the complaint interpreted in the light most favorable to the plaintiff are sufficient to set forth a cause of action upon which relief can be granted. Although the granting of a motion to dismiss is within the discretion of the trial court, the reviewing court can exercise its own judgment in determining if such a motion should be entertained.\u201d Spitz, 210 Ill. App. 3d at 218.\nDefendant argues that the finance charge exacted by the plaintiff is a usurious \u201cinterest rate.\u201d As authority, defendant cites sections 4(1) and 4a(a) of the Interest Act (Ill. Rev. Stat. 1989, ch. 17, pars. 6404(1), 6410(a)). In interpreting section 4a(a), the defendant believes that statute disallows an interest rate of greater than 9% if the amount financed exceeds $25,000. This interpretation is misplaced. The statute reads:\n\u201cOn money loaned to or in any manner owing from any person, whether secured or unsecured, except where the money loaned or in any manner owing is directly or indirectly for the purchase price of real estate or an interest therein and is secured by a lien on or retention of title to that real estate or interest therein, to an amount not more than $25,000 (excluding interest) which is evidenced by a written instrument providing for the payment thereof in 2 or more periodic installments over a period of not more than 181 months from the date of the execution of the written instrument, it is lawful to receive or to contract to receive and collect either:\n(i) interest in an amount equivalent to interest computed at a rate not exceeding 9% per year ***.\u201d (Emphasis added.) Ill. Rev. Stat. 1989, ch. 17, par. 6410(a).\nThe $25,000 limitation only applies to the real estate exception, not to the entire statute. But, the defendant is correct in interpreting this statute to mean that an interest rate imposed on money loaned may not exceed 9%, absent an exception.\nThe next issue is whether a retail installment contract is a \u201cloan\u201d so that the Illinois Interest Act applies. Usury is defined as an illegal profit received by the lender on a sum of money loaned to a borrower. (Tyrcha v. Wesolek (1989), 187 Ill. App. 3d 354, 357.) The elements of usury are: (1) a loan or forbearance; (2) a loan of money or something circulating as money; (3) the loan must be repayable absolutely; and (4) something in addition to lawful interest must be required. (Tyrcha, 187 Ill. App. 3d at 357.) But, if the transaction involves a sale, it is not a \u201cloan\u201d subject to the interest limitations:\n\u201cFurthermore, it is well settled that the usury statute applies only to those contracts which in substance involve a loan of money or forbearance to collect money due [citation] ***. A bona fide sale is not a loan *** and is not subject to the usury statute. [Citations.] *** The parties to the contract could agree that [purchaser] would pay interest at a rate higher than the maximum rate provided in the usury statute.\u201d Computer Sales Corp. v. Rousonelos Farms, Inc. (1989), 190 Ill. App. 3d 388, 392.\nIllinois courts have held differing transactions to be sales, and not loans subject to the Illinois Interest Act. (Computer Sales Corp., 190 Ill. App. 3d 388 (installment sale of computer equipment); Tyrcha, 187 Ill. App. 3d 354 (installment sale of stock); First National Bank v. Larkins (1983), 111 Ill. App. 3d 953 (installment sale of property); Johnson v. Sears Roebuck & Co. (1973), 14 Ill. App. 3d 838 (department store revolving charge accounts).) The purchase and sale of an automobile is analogous to these situations, and, as such, no section of the Illinois Interest Act cited by defendant pertains to the contract in question.\nThe statute that is relevant in this appeal is section 21(c) of Motor Vehicle Retail Installment Sales Act (Act), which states:\n\u201c(c) Notwithstanding the provisions of any other Statute, and notwithstanding the rate limitations expressed in subdivisions (a) and (b) of this Section, for motor vehicle retail installment contracts executed after the effective date of this amendatory Act of 1981, there shall be no limit on the finance charges which may be charged, collected and received.\u201d Ill. Rev. Stat. 1989, ch. 121V2, par. 581.\nThe Act applies only to retail installment contracts, defined in section 2.5 as \u201can instrument *** prescribing the terms of a retail installment transaction.\u201d (Ill. Rev. Stat. 1989, ch. 12IV2, par. 562.5.) A \u201c[r]etail installment transaction\u201d is \u201ca credit sale of a motor vehicle by a retail seller to a retail buyer for a deferred payment price payable in *** installments.\u201d (Ill. Rev. Stat. 1989, ch. 121V2, par. 562.4.) Plaintiff is a \u201csales finance agency,\u201d defined as one \u201cengaged *** in the business of purchasing or making loans upon the security of retail installment contracts.\u201d Ill. Rev. Stat. 1989, ch. I2IV2, par. 562.11.\nA credit union is not a sales finance agency because it does not purchase or make loans based on the assignment of retail installment contracts. (Micro Switch Employees\u2019 Credit Union v. Collier (1988), 175 Ill. App. 3d 828, 831.) Similarly, a credit union automobile installment loan is not a retail installment transaction because a third party is providing the money with which to purchase the vehicle, in other words, a loan. (Micro Switch, 175 Ill. App. 3d at 831.) But, GMAC is a sales finance agency dealing with retail installment contracts as defined under the Act. The retail installment contract was executed after September 25, 1981, the effective date of the amendment to section 21, which added subsection (c). Since section 21(c) explicitly supersedes the other provisions within the statute or any other statute, there was no statutory limit on the finance charge exacted by plaintiff.\nDefendant argues that plaintiff has charged a 13% \u201cinterest rate,\u201d which is different than a \u201cfinance charge.\u201d As support for this argument, defendant cites the answer to defendant\u2019s interrogatory asking the interest rate the plaintiff used to determine the finance charge, which was answered 13%. Defendant also relies on plaintiff\u2019s failure to respond to defendant\u2019s request for admission that the interest rate stated in the contract is 13% and that the interest rate exceeded a rate allowed under Illinois law.\nThe true answer lies in the interpretation of the retail installment contract, not with the plaintiff\u2019s interchangeable use of the phrases \u201cfinance charge\u201d and \u201cinterest rate.\u201d The meaning of a written contract is ascertained by the contract language and is ordinarily a question of law. (Szczerbaniuk v. Memorial Hospital (1989), 180 Ill. App. 3d 706, 713.) The contract explicitly states the \u201cannual percentage rate\u201d is 13%. The \u201cfinance charge\u201d is the monetary amount determined by computing the amount financed with the annual percentage rate. Section 21(c) of the Act provides no limit on the amount of finance charges assessed. Thus, the finance charge was not usurious.\nBecause we find the finance charge not to be usurious, the issue concerning the propriety of a class action is moot. We affirm the order of the trial court.\nAffirmed.\nWOODWARD and McLAREN, JJ., concur.", "type": "majority", "author": "JUSTICE INGLIS" } ], "attorneys": [ "Ernest S. Kettelson, of Kettelson Law Offices, Ltd., of Joliet, appellant pro se.", "Darren L. Besic, of Simpson & Cybak, of Chicago, for appellee." ], "corrections": "", "head_matter": "GENERAL MOTORS ACCEPTANCE CORPORATION, Plaintiff-Appellee, v. ERNEST KETTELSON, Defendant-Appellant.\nSecond District\nNo. 2\u201491\u20140265\nOpinion filed October 17, 1991.\nRehearing denied November 4, 1991.\nErnest S. Kettelson, of Kettelson Law Offices, Ltd., of Joliet, appellant pro se.\nDarren L. Besic, of Simpson & Cybak, of Chicago, for appellee." }, "file_name": "0871-01", "first_page_order": 893, "last_page_order": 898 }