{ "id": 872487, "name": "JAMES A. TALBERT et al., on behalf of Themselves and All Other Persons Similarly Situated, Plainti\u00edfs-Appellants, v. HOME SAVINGS OF AMERICA, F.A., Defendant-Appellee", "name_abbreviation": "Talbert v. Home Savings of America", "decision_date": "1994-07-19", "docket_number": "No. 1-93-2587", "first_page": "376", "last_page": "382", "citations": [ { "type": "official", "cite": "265 Ill. App. 3d 376" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "531 N.E.2d 948", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "176 Ill. App. 3d 921", "category": "reporters:state", "reporter": "Ill. 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App. 3d", "case_ids": [ 3639726 ], "year": 1991, "pin_cites": [ { "page": "350" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/137/0343-01" ] }, { "cite": "424 N.E.2d 1253", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "371 N.E.2d 634", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1981, "opinion_index": 0 }, { "cite": "69 Ill. 2d 320", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5455758 ], "weight": 3, "year": 1981, "pin_cites": [ { "page": "330" }, { "page": "330" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/69/0320-01" ] }, { "cite": "491 N.E.2d 795", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "142 Ill. App. 3d 703", "category": "reporters:state", "reporter": "Ill. 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TALBERT et al., on behalf of Themselves and All Other Persons Similarly Situated, Plainti\u00edfs-Appellants, v. HOME SAVINGS OF AMERICA, F.A., Defendant-Appellee." ], "opinions": [ { "text": "JUSTICE HARTMAN\ndelivered the opinion of the court:\nPlaintiffs, James and Nancy Talbert (the Talberts), appeal from an order dismissing their amended complaint (complaint). The complaint charged defendant, Home Savings of America (Home Savings), with breach of contract and two counts of fraud, claiming that Home Savings wrongly assessed the Talberts $250 in \"points\u201d on their home mortgage loan. Presented as issues for review are whether the complaint sufficiently states a cause of action for breach of contract, common law fraud, and statutory fraud, and whether the breach of contract count is barred by affirmative matter.\nThe following facts are gleaned from the complaint and its exhibits. In July 1991, Home Savings advertised in the media certain mortgage loans with no points or application fees. Specifically, it advertised a \"no-points fixed rate loan\u201d with \"no appraisal fee,\u201d and a \"no-points adjustable rate loan\u201d with \"no appraisal fee and no application fee.\u201d The advertisement also stated: \"Check with your local loan office for maximum loan amounts and other terms and limitations.\u201d\nThe next month the Talberts visited Home Savings\u2019 office and applied for a loan to refinance their home mortgage. Home Savings approved their application, of which they were notified in a commitment letter (commitment) dated August 29, 1991. The commitment advised that the letter and other written loan documents will \"supersede any oral agreements, statements or representations that might have been made by you or [Home Savings].\u201d The commitment also provided that the terms of the loan included an adjustable interest rate and \"a loan fee of 0% of the loan amount plus $250.\u201d\nAt closing on September 16, 1991, a settlement statement, executed by the Talberts that same day, called the $250 fee a \"LOAN APPLICATION FEE.\u201d On November 11, 1991, James Talbert wrote Home Savings a letter protesting the $250 fee, acknowledging that the fee had been explained to him and his wife, but questioning its appropriateness in light of Home Savings\u2019 advertisements.\nEarly in 1992, Home Savings sent the Talberts a statement that indicated that the $250 fee was to be reported to the Internal Revenue Service as points. According to the complaint, had Home Savings disclosed to the Talberts before the closing that the $250 fee actually was points, they \"would have protested and/or not closed the loan.\u201d Home Savings moved to dismiss the complaint pursuant to sections 2 \u2014 615 and 2 \u2014 619(a)(9) of the Code of Civil Procedure (735 ILCS 5/2 \u2014 615, 2 \u2014 619(a)(9) (West 1992) (section 2 \u2014 615 or section 2 \u2014 619(a)(9))). To that motion, Home Savings appended several documents that set forth in writing the home mortgage loan agreement between it and the Talberts. These documents, which the Talberts failed to attach to their complaint, portentously augment the complaint\u2019s allegations as follows.\nWhen the Talberts initially visited Home Savings\u2019 office on August 12, 1991, they executed three documents: an addendum to their loan application, a notice concerning loan options, and their loan application. In the addendum, the Talberts chose to apply for an \"ARM IV-C\u201d adjustable rate mortgage loan. The Talberts certified in the addendum that \"the terms of [several if not all of Home Savings\u2019] loan programs [had been explained to them] by the loan agent prior to acceptance of the completed application to which this Addendum is attached,\u201d and that they had read and understood \"the provisions contained on both sides of this Addendum.\u201d The loan application also indicated that the Talberts were applying for a \"IV-C\u201d mortgage loan.\nThe notice advised that, under the \"ARM IV-C\u201d program, either of two loan options involving different fee structures was available. The Talberts chose the option where they would pay a \"loan fee of 0% plus $250\u201d with prepayment penalties, rather than a \"loan fee of 1h% plus $250\u201d with no prepayment penalties. The Talberts acknowledged that the terms of the loan program, \"including the charges discussed above,\u201d had been described to them.\nHome Savings later tendered to the Talberts a document entitled \"GOOD FAITH ESTIMATES OF SETTLEMENT CHARGES.\u201d It again disclosed that the loan the Talberts had applied for would require them to pay the $250 fee upon closing. This document called the $250 fee a \"Loan Origination Fee.\u201d\nOn the closing date, September 16, 1991, the parties executed the \"Loan Closing Statement.\u201d It described the $250 fee simply as a \"Loan Fee\u201d and authorized Home Savings to deduct it from the loan proceeds prior to disbursement of the loan. The closing statement also provided: the borrower \"agrees to the correctness hereof and further authorizes and ratifies the deductions and disbursements of the amounts shown above\u201d; and \"borrowers\u2019 execution of all documents and forms shall be deemed approval of all terms and conditions contained in such documents and forms.\u201d\nAt a hearing on the motion to dismiss, the Talberts\u2019 counsel stated that the Talberts had always known they were paying a $250 fee, but did not know this fee was actually points. The circuit court granted the motion to dismiss with prejudice. It ruled: \"With regard to breach of contract, they did enter into a written contract. It seems to me that at every stage in the proceedings they were advised of this $250 fee, and regardless of what it was called, they agreed to it.\u201d The Talberts appeal.\nI\n\u20221 Home Savings moved to dismiss the complaint under both sections 2 \u2014 615 and 2 \u2014 619(a)(9), using an improper hybrid motion. The circuit court granted the motion to dismiss without drawing a distinction between the two procedures. Reviewing courts have long disapproved of this slipshod practice as it causes unnecessary complication and confusion. (Janes v. First Federal Savings & Loan Association (1974), 57 Ill. 2d 398, 405-06, 312 N.E.2d 605; MBL (USA) Corp. v. Diekman (1985), 137 Ill. App. 3d 238, 241-42, 484 N.E.2d 371.) Home Savings should have first challenged the legal sufficiency of the complaint under section 2 \u2014 615. Only once it was determined that a legally sufficient cause of action had been stated should the court have entertained a section 2 \u2014 619(a)(9) motion. Nevertheless, since the interests of judicial economy would be served and the Talberts are not prejudiced thereby, the motion shall be determined here as having been filed in the proper manner. Smith v. Chemical Personnel Search, Inc. (1991), 215 Ill. App. 3d 1078, 1081-82, 576 N.E.2d 340.\nII\nThe Talberts initially contend that their complaint states a cause of action for breach of contract. Home Savings responds that the complaint fails to allege the existence of a contract.\nThe standard of review on appeal from a section 2 \u2014 615 motion to dismiss is whether the complaint sufficiently states a cause of action; the merits of the case are not at issue. (Boender v. Chicago North Clubhouse Association, Inc. (1992), 240 Ill. App. 3d 622, 627, 608 N.E.2d 207.) Attached exhibits are an integral part of the complaint and must be so considered. (735 ILCS 5/2 \u2014 606 (West 1992); Sharps v. Stein (1980), 90 Ill. App. 3d 435, 438, 413 N.E.2d 75.) A section 2 \u2014 615 motion admits as true all well-pleaded facts and reasonable inferences that could be drawn from those facts (Meerbrey v. Marshall Field & Co. (1990), 139 Ill. 2d 455, 473, 564 N.E.2d 1222), but not conclusions of law or conclusions of fact unsupported by allegations of specific facts (Groenings v. City of St. Charles (1991), 215 Ill. App. 3d 295, 299, 574 N.E.2d 1316).\nTo state a cause of action for breach of contract, a plaintiff must allege that a contract exists, plaintiff performed its obligations under the contract, defendant breached the contract, and plaintiff was injured as a result. (Rajkovich v. Alfred Mossner Co. (1990), 199 Ill. App. 3d 655, 660, 557 N.E.2d 496.) To allege the existence of a valid contract, a plaintiff must plead facts indicating there was an offer, an acceptance, and consideration. (Martin v. Government Employees Insurance Co. (1990), 206 Ill. App. 3d 1031, 1035, 565 N.E.2d 197.) A general allegation that a contract exists without supporting facts is a legal conclusion which may not be admitted by a motion to dismiss. (Pollack v. Marathon Oil Co. (1976), 34 Ill. App. 3d 861, 864, 341 N.E.2d 101.) Terms such as \"offered,\u201d \"accepted,\u201d and \"breached its contract\u201d suggest mere legal conclusions. Wait v. First Midwest Bank\u01c0 Danville (1986), 142 Ill. App. 3d 703, 707-08, 491 N.E.2d 795.\n\u20222 In the instant case, the Talberts\u2019 complaint failed to state a cause of action for breach of contract. As their complaint alleged, Home Savings\u2019 advertisement of its loans without certain fees was an invitation for an offer. (See Steinberg v. Chicago Medical School (1977), 69 Ill. 2d 320, 330, 371 N.E.2d 634; Jones v. Eagle II (1981), 99 111. App. 3d 64, 70, 424 N.E.2d 1253.) The Talberts\u2019 complaint further alleged that contrary to the advertisement, Home Savings charged the Talberts fees, including a $250 loan fee; the Talberts\u2019 \"application for a loan with payment of the requested fees aforesaid\u201d (emphasis added) was an offer to have the application considered under the advertisement\u2019s terms; Home Savings accepted that offer; and Home Savings breached the contract when it charged the Talberts the $250 fee, which was actually points.\nAccording to those allegations, the Talberts\u2019 loan application contained the term that they would pay the $250 loan fee, an offer which Home Savings accepted. As a result, the Talberts\u2019 alleged contract provided that they would pay the $250 fee. Yet, the complaint then alleges that Home Savings breached the contract by charging the $250 fee. A breach can only exist where a party fails to carry out a term, promise, or condition of a contract; a breach cannot result from a party\u2019s performance of a contract term. Since the alleged contract provided that the Talberts would pay the $250 fee, no breach resulted from Home Savings\u2019 collection of it. The Talberts\u2019 assertions otherwise \u2014 that the contract contained the terms set forth in the advertisement and a breach occurred \u2014 are mere conclusions of law or fact, wholly rebutted by the specific factual allegations which comprise the complaint. (See Groenings, 215 111. App. 3d at 299.) Therefore, the circuit court\u2019s dismissal of the breach of contract claim is affirmed.\nThe Talberts attempt to analogize this case with Steinberg (69 Ill. 2d 320, 371 N.E.2d 634). There, the defendant medical school mailed a catalog to plaintiff, a prospective student. Plaintiff applied for admission to the school, paying a $15 application fee, and was rejected. He filed a class action suit against the school charging it had failed to evaluate applications according to the academic criteria contained in the school\u2019s bulletin, and instead had used nonacademic criteria, primarily the ability of the applicant or his family to pay large sums of money to the school. The supreme court held that plaintiff\u2019s complaint was sufficient to state a cause of action for breach of contract: the terms contained in the school\u2019s brochure constituted an invitation for an offer; the tender of the application, along with the payment of the $15 fee, was an offer to apply; and acceptance of the application and the fee constituted acceptance of the offer to apply under the criteria the school had established. (Steinberg, 69 Ill. 2d at 330.) The present case is unlike Steinberg because the Talberts\u2019 alleged offer did not contain the terms set forth in the advertisement.\nThe bulk of Home Savings\u2019 contentions regarding the breach of contract count should have been made solely in a section 2 \u2014 619(a)(9) motion to dismiss. Home Savings argues that the written loan documents that actually constitute the parties\u2019 contract expressly authorize the $250 fee and do not contain the \"no points\u201d language contained in the advertisements. Moreover, Home Savings submits, the paroi evidence rule bars the Talberts\u2019 claim and it did not charge points as a matter of law. These assertions need not be considered since the breach of contract count was properly dismissed under section 2 \u2014 615.\nIll\n\u20223 The Talberts argue that their complaint states a cause of action for common law fraud. They claim the material misrepresentation is that the $250 fee was not points. In their complaint, the Talberts allege that Home Savings, in its advertisements, knowingly and intentionally made false representations to them concerning whether it would charge points; they reasonably relied on those misrepresentations and were thereby induced to refinance their home mortgage with Home Savings; the misrepresentation is factually shown by the statement Home Savings sent them, which called the $250 fee points for tax purposes; yet, elsewhere in its documents Home Savings characterizes the same fee as a loan origination fee and a loan application fee, among other things; and had Home Savings disclosed to them before the closing that the $250 fee actually was points, they \"would have protested and/or not closed the loan.\u201d\nTo state a claim for common law fraud, a plaintiff must allege that any misrepresentations were (1) a false statement of material fact; (2) known or believed to be false by the party making them; (3) intended to induce the other party to act; (4) acted upon by the other party in reliance upon the truth of the representations; and (5) damaging to the other party as a result. Mack v. Plaza Dewitt Ltd. Partnership (1985), 137 Ill. App. 3d 343, 350, 484 N.E.2d 900; see Connor v. Merrill Lynch Realty, Inc. (1991), 220 Ill. App. 3d 522, 528, 581 N.E.2d 196.\nAs noted earlier, a section 2 \u2014 615 motion to dismiss does not admit conclusions of law or conclusions of fact unsupported by allegations of specific facts. (Groenings, 215 Ill. App. 3d at 299.) Fraud claims in particular must include specific allegations of fact from which fraud may be inferred. Albright v. Seyfarth, Fairweather, Shaw & Geraldson (1988), 176 Ill. App. 3d 921, 932, 531 N.E.2d 948.\nThe allegations presented here ar\u00e9 simply insufficient to support a common law fraud claim. Undisputedly, the Talberts, in their loan application, offered to pay the $250 fee. The complaint then alleges that they were duped into this mortgage agreement by an advertisement stating that Home Savings would not charge points. Missing from the complaint are factual allegations that the Talberts requested the loan referred to in the advertisement or that their contract was actually negotiated to contain the advertisement\u2019s terms. As such, the complaint provides no factual nexus between the advertisement and the Talberts\u2019 contract. This court will not make the untenable leap of inferring that the nexus exists when all indications suggest otherwise. Consequently, the circuit court\u2019s dismissal of this fraud count was proper.\nIV\nThe Talberts lastly submit that their complaint sufficiently states a cause of action for a violation of the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1991, ch. 1211/2, par. 262 (now 815 ILCS 505/2 (West 1992))) and the Uniform Deceptive Trade Practices Act (Ill. Rev. Stat. 1991, ch. 1211/2, par. 312(12) (now 815 ILCS 510/2(12) (West 1992))). This claim is also based on the theory that Home Savings misrepresented the true nature of the $250 fee. The bases for our finding that the Talberts\u2019 complaint is factually insufficient to support a common law fraud claim also support the conclusion that this fraud count is similarly defective.\nFor the above reasons, the circuit court\u2019s dismissal of the Talberts\u2019 complaint is affirmed in its entirety.\nAffirmed.\nSCARIANO and McCORMICK, JJ., concur.", "type": "majority", "author": "JUSTICE HARTMAN" } ], "attorneys": [ "Larry D. Drury, Ltd., of Chicago, for appellants.", "Jenner & Block, of Chicago (John H. Mathias, Jr., Patricia Lee Refo, and Michael S. Elvin, of counsel), for appellee." ], "corrections": "", "head_matter": "JAMES A. TALBERT et al., on behalf of Themselves and All Other Persons Similarly Situated, Plainti\u00edfs-Appellants, v. HOME SAVINGS OF AMERICA, F.A., Defendant-Appellee.\nFirst District (2nd Division)\nNo. 1 \u2014 93\u20142587\nOpinion filed July 19, 1994.\nRehearing denied October 5, 1994.\nLarry D. Drury, Ltd., of Chicago, for appellants.\nJenner & Block, of Chicago (John H. Mathias, Jr., Patricia Lee Refo, and Michael S. Elvin, of counsel), for appellee." }, "file_name": "0376-01", "first_page_order": 396, "last_page_order": 402 }