{ "id": 1260388, "name": "LAUREL MOTORS, INC., Plaintiff-Appellant, v. AIRWAYS TRANSPORTATION GROUP OF COMPANIES, INC., et al., Defendants-Appellees", "name_abbreviation": "Laurel Motors, Inc. v. Airways Transportation Group of Companies, Inc.", "decision_date": "1996-10-16", "docket_number": "No. 2-95-1475", "first_page": "312", "last_page": "318", "citations": [ { "type": "official", "cite": "284 Ill. App. 3d 312" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "141 Ill. App. 3d 660", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3495525 ], "year": 1986, "pin_cites": [ { "page": "663" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/141/0660-01" ] }, { "cite": "273 Ill. App. 3d 550", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 258796 ], "year": 1995, "pin_cites": [ { "page": "554" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/273/0550-01" ] }, { "cite": "273 Ill. App. 3d 761", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 258783 ], "year": 1995, "pin_cites": [ { "page": "771" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/273/0761-01" ] }, { "cite": "152 Ill. App. 3d 139", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3576603 ], "year": 1987, "pin_cites": [ { "page": "143", "parenthetical": "creation of security interest in motor vehicle is solely governed by Code" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/152/0139-01" ] }, { "cite": "257 Ill. App. 3d 905", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2889169 ], "weight": 3, "year": 1994, "pin_cites": [ { "page": "908" }, { "page": "909" }, { "page": "909" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/257/0905-01" ] }, { "cite": "243 Ill. App. 3d 124", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5109840 ], "year": 1993, "pin_cites": [ { "page": "127" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/243/0124-01" ] } ], "analysis": { "cardinality": 658, "char_count": 13134, "ocr_confidence": 0.748, "pagerank": { "raw": 9.71454849424737e-08, "percentile": 0.5301538815583456 }, "sha256": "8e68012228af7a15cf35918272ea1b8b302874f400760621e4e9bdc85f34a999", "simhash": "1:6a2d5c428d0c4e4e", "word_count": 2133 }, "last_updated": "2023-07-14T14:51:55.867701+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "LAUREL MOTORS, INC., Plaintiff-Appellant, v. AIRWAYS TRANSPORTATION GROUP OF COMPANIES, INC., et al., Defendants-Appellees." ], "opinions": [ { "text": "JUSTICE INGLIS\ndelivered the opinion of the court:\nPlaintiff, Laurel Motors Inc., appeals for the second time from an order of the circuit court of Du Page County. In the first appeal, plaintiff challenged the circuit court\u2019s order directing it to assign and deliver certificates of origin for four automobiles to defendant, Bank One. We dismissed that appeal for lack of jurisdiction. Plaintiff next asked leave to file an interlocutory appeal from the entry of summary judgment in favor of Bank One. We denied that request for leave to appeal. Plaintiff now appeals an order granting summary judgment in favor of SIR Management, Inc., Brysson Care, Inc., Bryan Barrish, Peter Leeb, Hedco Partnership, and Lawrence Wright (lessees) on counts I, II, and VII of plaintiff\u2019s third amended complaint in replevin. We affirm.\nPlaintiff is a corporation engaged in the sale of new automobiles. Between January 31, 1995, and March 16, 1995, Leased Car Sales (LCS) entered into an agreement with plaintiff to purchase four new automobiles for a total purchase price of $349,833, which automobiles are the subject of the present controversy.\nPrior to January 1995, plaintiff and LCS had a previous relationship in which LCS had purchased between 50 and 150 luxury vehicles from plaintiff. LCS would contact plaintiff by telephone and order a specific make and model of vehicle. Plaintiff would locate a vehicle matching LCS\u2019 request and prepare the necessary documentation.\nPlaintiff would then transfer possession of the vehicle to LCS, often allowing LCS several days to make the necessary payments. Plaintiff did not sign a security agreement with LCS. Plaintiff would, however, retain a certificate of origin for the vehicle until LCS\u2019 checks had cleared the bank.\nThe present controversy began when lessees approached LCS about leasing several luxury automobiles. LCS contacted plaintiff and ordered four automobiles. LCS then contacted Valet Auto Leasing (VAL), a company in the business of arranging leases for second-party financial institutions. LCS asked VAL to prepare a Bank One lease and other appropriate forms for the sale and lease of the subject vehicles.\nVAL forwarded to Bank One a copy of the Bank One lease, a copy of the certificate of origin, and additional information it received from LCS. After Bank One approved the lessees\u2019 credit, it issued a check payable to VAL for the purchase of the subject vehicles.\nAfter receiving payment from Bank One, VAL drafted and delivered checks payable to LCS for each of the subject vehicles. LCS was then responsible for tendering those monies to plaintiff for the subject vehicles.\nIn February and March 1995, plaintiff delivered possession of the subject vehicles to LCS and, in several cases, directly to Bank One\u2019s lessees. The vehicles actually delivered by plaintiff had the following vehicle identification numbers (VINs): (1) WDBFA76E4SF110048 (048); (2) WDBGA51E8SA234692 (692); (3) WDBEA66E3SC212531 (531); and (4) WDBGA43E2SA239071 (071). While there is some dispute regarding certain VINs, the parties agree that the above VINs accurately represent the vehicles actually in the possession of the lessees.\nLCS tendered three checks for three of the above automobiles (VINs 048, 692, and 071). LCS did not tender payment on the remaining automobile (VIN 531). Plaintiff presented the checks submitted by LCS, but the checks were returned for insufficient funds. In the interim, LCS transferred the vehicles to Bank One for what appears to be a total purchase price of $294,000.\nOn April 7, 1995, plaintiff filed a complaint in replevin, seeking possession of the subject vehicles. The trial court entered a replevin order, and plaintiff began repossessing the vehicles. Bank One and the lessees, however, all filed a motion to intervene and a motion to dismiss the replevin action. On April 24, 1995, the trial court entered an order requiring plaintiff to return the vehicles that it had repossessed and ordered plaintiff not to take any action pursuant to the order of replevin until the matter proceeded to trial.\nOn May 19, 1995, plaintiff filed its third amended complaint in replevin. Count I was a claim for replevin against the lessees and Bank One. Count II sought a declaration that the lessees were not lessees in the ordinary course of business. Count VII sought damages from the lessees for their wrongful use of the automobiles. The remaining counts of the complaint did not involve the lessees.\nBoth of the lessees and Bank One each filed motions for summary judgment. The trial court granted the lessees\u2019 motion on September 7, 1995, finding that plaintiff had no security interest in the automobiles and that the cars were transferred to the lessees in the ordinary course of business. The trial court found that there was no just reason to delay enforcement or appeal of the order granting summary judgment as to counts I, II, and VII, pursuant to Supreme Court Rule 304(a) (155 Ill. 2d R. 304(a)). This timely appeal followed.\nOn appeal, plaintiff contends the trial court erred in granting summary judgment as to counts I, II, and VII of its third amended complaint because genuine issues of material fact existed. Summary judgment is properly granted if the pleadings, depositions, and admissions on file, together with any affidavits, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Leschinski v. Forest City Steel Erectors, 243 Ill. App. 3d 124, 127 (1993); 735 ILCS 5/2 \u2014 1005(d) (West 1994). In ruling on the motion, the court is required to construe all evidentiary material strictly against the movant and liberally in favor of the respondent. Pagano v. Occidental Chemical Corp., 257 Ill. App. 3d 905, 908 (1994).\nThe propriety of an order granting summary judgment is a question of law, and, as such, we review such orders de novo. Pagano, 257 Ill. App. 3d at 909. If, after reviewing the pleadings and evidentiary material before the trial court, the reviewing court determines that a material issue of fact exists or that the summary judgment was based on an erroneous interpretation of the law, then reversal is warranted. Pagano, 257 Ill. App. 3d at 909.\nPlaintiff first argues that its retention of the certificates of origin for the automobiles is sufficient to create a security interest in the automobiles. Plaintiff reasons that a certificate of origin is a \"document of title\u201d under the Uniform Commercial Code (Code) (810 ILCS 5/9 \u2014 105(f) (West 1994)). A document of title is a negotiable document, and a party can thus take and perfect a security interest by retaining such a negotiable document under section 9 \u2014 305 of the Code. 810 ILCS 5/9 \u2014 305 (West 1994).\nLessees counter that plaintiff failed to create a security interest by failing to comply with the requirements of article 9 of the Code. Moreover, lessees contend that plaintiff\u2019s reliance on section 9 \u2014 305 of the Code is misplaced and premature because that section deals with perfecting a security interest and plaintiff failed to first address whether it had created a security interest.\nTo address the issue of whether plaintiff created a security interest in the automobiles by retaining the certificates of origin, we must look first to the Code. Andrews v. Mid-America Bank & Trust Co., 152 Ill. App. 3d 139, 143 (1987) (creation of security interest in motor vehicle is solely governed by Code). In order to create a security interest in collateral, the collateral must be in the possession of the secured party or there must be a signed security agreement. 810 ILCS 5/9 \u2014 203 (West 1994). It is undisputed that plaintiff never signed a security agreement with LCS or the lessees. Therefore, in order to create a security interest here, plaintiff must retain the collateral.\nPlaintiff claims that the certificates of origin for the automobiles are the collateral. This contention is without merit. The automobiles themselves, and not the certificates, are the items of collateral. An examination of the purposes of the filing requirements confirms this conclusion.\nThe purpose of filing a financing statement is to put third parties on notice that the secured party has a security interest in the collateral. Signal Capital Corp. v. Lake Shore National Bank, 273 Ill. App. 3d 761, 771 (1995). Similarly, possession of the collateral also puts third parties on notice that the possessor may have an interest in the collateral. Edibles Corp. v. West Ontario Street Ltd. Partnership, 273 Ill. App. 3d 550, 554 (1995).\nHere, plaintiffs retention of the certificates of origin fails to notify any third parties of plaintiffs claimed security interests. Only a dealer receives a certificate of origin for an automobile. If a purchaser of the automobile is not a dealer, then the dealer sends the certificate of origin directly to the Secretary of State for processing. Thus, a nondealer purchaser would never even see a certificate of origin in any event. Therefore, plaintiffs retention of the certificates of origin would fail to notify third parties purchasing cars from LCS that plaintiff had claimed a security interest in the automobile. This is especially true in the case of a lessee, who would not even receive the title to the vehicle. Plaintiff\u2019s retention of the certificates of origin of the automobiles is therefore ineffective to create a security interest.\nPlaintiff seeks to avoid the effect of article 9 by claiming a security interest was created pursuant to section 2 \u2014 507 of the Code, which states in pertinent part \"[w]here payment is due and demanded on the delivery to the buyer of goods ***, his right as against the seller to retain or dispose of them is conditional upon his making the payment due.\u201d 810 ILCS 5/2 \u2014 507(2) (West 1994). Thus, because LCS did not immediately tender a check to plaintiff, plaintiff could exercise its right of reclamation. Plaintiff would then turn to the priority rules to determine whether its interest in the automobiles was superior to Bank One\u2019s interest.\nLessees respond first by pointing out that plaintiff raises this argument for the first time on appeal. Additionally, lessees contend it was undisputed that payment for the automobiles was neither due nor demanded upon delivery, but several days later. Hence the transfer and payment conformed to the parties\u2019 expectations, and section 2 \u2014 507 is not properly invoked for these transactions.\nWhere a party raises an issue for the first time on appeal, we need not consider it. Randle v. Hinckley Parachute Center, Inc., 141 Ill. App. 3d 660, 663 (1986). Plaintiff did not raise its section 2 \u2014 507 argument before the trial court in its memorandum in opposition to the motion for summary judgment or elsewhere, and, therefore, we do not consider it. We note, however, that plaintiffs argument is nevertheless unavailing.\n\"While the plaintiffs purchase order form contains the notation \"unpaid cash balance due on delivery,\u201d the form also states \"if this is a credit sale\u201d and the appropriate forms have not been provided to the purchaser, then \"this [purchase] order is not binding and either party may cancel.\u201d Moreover, the form does not provide any indication of whether the transaction is to be cash or credit. The binding effect of the \"due on delivery\u201d language is therefore questionable. Equally important, the form does not prohibit oral modifications or waivers of the agreement. It is undisputed that LCS was not required to tender payment on delivery of an automobile. As payment was never \"due and demanded on the delivery,\u201d the provisions of section 2 \u2014 507 do not apply. Thus, plaintiff did not create a security interest pursuant to article 2.\nFinally, plaintiff argues that it intended to retain ownership of the vehicles by retaining the certificates of origin pending clearance of the checks LCS tendered. It is clear, however, that plaintiff knew that LCS would resell the subject vehicles. Thus, plaintiff could not have intended to retain ownership of the vehicles in light of its knowledge that, upon their transfer, the vehicles would have been resold to third parties.\nFor the foregoing reasons, the judgment of the circuit court of Du Page County is affirmed.\nAffirmed.\nBOWMAN and DOYLE, JJ., concur.", "type": "majority", "author": "JUSTICE INGLIS" } ], "attorneys": [ "John M. Heaphy, George N. Vurdelja, Jr., and Griswald L. Ware, all of Vurdelja & Heaphy, of Chicago, for appellant.", "Peter Ordower, of Law Offices of Peter Ordower, of Chicago, for appellee Airways Transportation Group of Companies, Inc.", "Judith S. Sherwin and Mark J. Bereyso, both of Levenfeld, Eisenberg, Janger & Glassberg, of Chicago, for appellees Bryan Barrish, Brysson Care, Inc., and SIR Management, Inc.", "Herbert L. Holzman, of Barinholtz, Holzman & Gault, of Chicago, for appellee Lawrence Wright.", "James T. Rohlfing and Adam M. Kingsley, both of Saitlin, Patzik, Frank & Samotny, Ltd., of Chicago, for appellee Hedco Partnership and Peter Leeb." ], "corrections": "", "head_matter": "LAUREL MOTORS, INC., Plaintiff-Appellant, v. AIRWAYS TRANSPORTATION GROUP OF COMPANIES, INC., et al., Defendants-Appellees.\nSecond District\nNo. 2\u201495\u20141475\nOpinion filed October 16, 1996.\nJohn M. Heaphy, George N. Vurdelja, Jr., and Griswald L. Ware, all of Vurdelja & Heaphy, of Chicago, for appellant.\nPeter Ordower, of Law Offices of Peter Ordower, of Chicago, for appellee Airways Transportation Group of Companies, Inc.\nJudith S. Sherwin and Mark J. Bereyso, both of Levenfeld, Eisenberg, Janger & Glassberg, of Chicago, for appellees Bryan Barrish, Brysson Care, Inc., and SIR Management, Inc.\nHerbert L. Holzman, of Barinholtz, Holzman & Gault, of Chicago, for appellee Lawrence Wright.\nJames T. Rohlfing and Adam M. Kingsley, both of Saitlin, Patzik, Frank & Samotny, Ltd., of Chicago, for appellee Hedco Partnership and Peter Leeb." }, "file_name": "0312-01", "first_page_order": 330, "last_page_order": 336 }