Bellik v. Bank of America

Opinion

SIXTH DIVISION June 8, 2007

No. 1-06-0620

VINCENT BELLIK, ) Appeal from the Circuit ) Court of Cook County. Plaintiff-Appellant, ) ) v. ) No. 04 M1 137529 ) BANK OF AMERICA, ) Honorable ) Judge James F. Stack, Defendant-Appellee. ) Presiding.

JUSTICE O'MALLEY delivered the opinion of the court:

The instant cause involves third-party litigation wherein

Vincent Bellik, as a third-party plaintiff, filed a third-party

complaint against a number of third-party defendants, including

Bank of America.1

Bellik appeals from the circuit court's order that dismissed

with prejudice his third-party complaint against Bank of America

pursuant to section 2-615 of the Code of Civil Procedure (the

Code) (735 ILCS 5/2-615 (West 2004)). On appeal, Bellik contends

that the circuit court erred when it dismissed his complaint

because it was sufficient as a third-party complaint against Bank

of America. Alternatively, Bellik contends that the circuit

1 In his third-party complaint, Bellik also brought claims against Gerald Gorman, individually and doing business as Dodge of Midlothian; Daimler Chrysler Services North America, LLC; and Bank of America. Bellik and Bank of America are the only parties to the instant appeal. 1-06-0620

court erred in dismissing his complaint with prejudice where its

purported defects could be cured by amendment. For the reasons

that follow, we affirm the judgment of the circuit court.

BACKGROUND

The instant cause arose from litigation initiated by Harris

Bank2 against Vincent Bellik for money owed under a sales

contract for a 2002 Dodge Dakota (hereinafter referred to as

Harris Bank litigation). Following repossession and sale of the

Dakota in January 2004, Harris Bank recovered a deficiency

judgment against Bellik for $9,846.23.

In February 2005, as a result of the Harris Bank litigation,

Bellik, as third-party plaintiff, filed a "third party complaint

for declaratory judgment and other relief" against three third-

party defendants, namely: (1) vehicle dealer Gerald Gorman,

individually and doing business as Dodge of Midlothian (Gorman);

(2) Daimler Chrysler Services North America, LLC. (Chrysler); and

(3) Bank of America. This complaint is the subject of the

instant appeal.

Bellik's complaint alleged, in pertinent part, that he

traded in the Dakota (the vehicle at issue in the Harris Bank

litigation) to Gorman in connection with a sales contract for

Bellik's purchase of a 2003 Dodge Stratus (hereinafter Stratus

2 Harris Bank is not a party to this appeal.

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sales contract). Bellik further alleged that, pursuant to the

Stratus sales contract, "O'Gorman3 [sic] and Chrysler had an

obligation to promptly submit the payoff" of Harris Bank's lien

on the Dakota. According to Bellik, Gorman and Chrysler failed

to satisfy Harris Bank's lien on the Dakota, which constituted

breaches of their contractual and fiduciary duties. Bellik

further claimed that Bank of America was obligated under the

Stratus sales contract because it was "listed as a party" in that

contract.

Bellik attached to his complaint the Stratus sales contract,

which was dated September 29, 2003. In regard to the Dakota, the

Stratus sales contract indicated that Bellik had traded in a

"2002 Dodge Dakota" with a value of $20,000 and a lien payoff in

the amount of $19,863, for a net trade of $137. The purchase

price of the 2003 Stratus was $33,418.43. In regard to Bank of

America, the Stratus sales contract, in its entirety, referenced

Bank of America in one sentence, specifically, as follows:

"Buyer promises to pay to the order of

seller at the offices of Bank of America

(Assignee) located in Jacksonville, Illinois,

the amount financed shown above together with

3 In the pleadings, Bellik alternatively referred to Gerald Gorman as "Gorman" and "O'Gorman." On appeal, both parties refer to that individual as "Gorman," and we will also.

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a finance charge on the principal balance of

the amount financed from time to time unpaid

at the rate of 6.59% per annum from date

until maturity in 71 installments of $518.11

each and a final installment of $518.11,

beginning on November 13, 2003 and continuing

on the same day of each successive month

thereafter until fully paid."

Ultimately, Bellik's complaint contained three counts, all

of which were based on Gorman's and Chrysler's purported failure

to pay off Harris Bank's lien on the Dakota in connection with

Bellik's purchase of the Stratus. First, Bellik requested a

declaratory judgment that the balance owed by him under the

Stratus sales contract was "null and void," and that he was the

owner of the Stratus. Second, Bellik requested damages based on

Gorman's and Chrysler's alleged breach of contract. Third,

Bellik requested damages based on Gorman's and Chrysler's alleged

breach of fiduciary duty. Bellik also sought an "offset" of the

debt due to Bank of America under the Stratus sale contract,

relying on certain contractual language related to consumer

credit issues.

In September 2005, Bank of America filed a motion to strike

Bellik's third-party complaint pursuant to section 2-615 of the

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Code (735 ILCS 5/2-615 (West 2004)), arguing that none of

Bellik's claims properly constituted a third-party claim under

section 2-406(b) of the Code (735 ILCS 5/2-406(b) (West 2004)).

Bank of America further argued that, assuming Bellik's claims

properly constituted third-party claims, they should be stricken

as legally insufficient. Bank of America also asserted that

Bellik's claims against it should be dismissed with prejudice

because they failed on their merits as a matter of law.

In November 2005, Bellik filed a response to Bank of

America's motion to dismiss, arguing that his complaint was

properly filed as a third-party complaint and that his claims

were legally sufficient.

In January 2006, the circuit court granted Bank of America's

motion to dismiss Bellik's third-party complaint and dismissed it

with prejudice as to Bank of America only. The court adopted the

reasoning set forth in Bank of America's motion to strike.

In February 2006, Bellik filed a motion to reconsider the

circuit court's January 2006 decision, primarily challenging the

circuit court's dismissal with prejudice, and requesting the

circuit court to either reverse its decision and permit an

amendment of the pleadings or a refiling of a direct action

against Bank of America.

In March 2006, the circuit court denied Bellik's motion to

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reconsider.

Subsequently, also in March 2006, Bellik appealed the

circuit court's January 2006 order and its denial of his motion

to reconsider.

ANALYSIS

On appeal, Bellik challenges the circuit court's order that

granted Bank of America's section 2-615 motion to dismiss his

complaint with prejudice. Specifically, Bellik asserts that "the

third party complaint was sufficient and proper, as the subject

matter of the third party complaint arose from the same

transaction as the original complaint." Bellik also asserts that

he, as a consumer, "can maintain an action against an assignee

for sums paid pursuant to the holder in due course provisions of

the retail installment contract" for the Stratus (hereinafter

referred to as the Federal Trade Commission (FTC) Holder

Notice).4 Last, Bellik asserts that the circuit court's

dismissal with prejudice constituted error where the alleged

defect could be cured by amendment.

A. Section 2-615 Motion to Dismiss

We review de novo the circuit court's decision to dismiss

plaintiff's complaint pursuant to a section 2-615 motion (735

4 In specific regard to the FTC, Bellik claims that "due to the Federal Trade Commission language, the Bank effectively 'inherits' Midlothian's wrongdoing."

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ILCS 5/2-615 (West 2004). Marshall v. Burger King Corp., 222

Ill. 2d 422, 429 (2006). A section 2-615 motion challenges the

legal sufficiency of a complaint based on defects apparent on its

face. Marshall, 222 Ill. 2d at 429. When reviewing the

complaint, we accept as true all well-pleaded facts and all

reasonable inferences that may be drawn from those facts, and

construe the allegations contained in the complaint in the light

most favorable to the plaintiff. Marshall, 222 Ill. 2d at 429.

Ultimately, a dismissal pursuant to a section 2-615 motion should

be granted only where it is clearly apparent that no set of facts

can be proved that would entitle the plaintiff to recovery.

Marshall, 222 Ill. 2d at 429. Thus, in this case, we must

analyze the legal sufficiency of Bellik's third-party complaint

against Bank America.

A third-party action is a procedural device that allows a

defendant to bring a cause of action against a party who was not

joined in the original action. Guzman v. C.R. Epperson

Construction, Inc., 196 Ill. 2d 391, 399 (2001). Section 2-

406(b) of the Code allows the filing, by a defendant, of a third-

party complaint against a nonparty "who is or may be liable to

[the defendant] for all or part of the plaintiff's claim against

[that defendant]." 735 ILCS 5/2-406(b) (West 2004).

Therefore, the majority of third-party complaints rely on

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claims for indemnification or contribution because third-party

actions "require that the party seeking relief assert a claim of

derivative liability." Guzman, 196 Ill. 2d at 399. In the

context of third-party actions, derivative liability is "'where

the liability of the third-party defendant is dependent on the

liability of the third-party plaintiff to the original

plaintiff.'" Perry v. Minor, 319 Ill. App. 3d 703, 709 (2001),

quoting Board of Trustees of Community College, District No. 508

v. Coopers & Lybrand LLP, 296 Ill. App. 3d 538, 549 (1998).

Here, Harris Bank (the original plaintiff) brought suit

against Bellik seeking a default judgment based on a contract

related to Bellik's purchase of the Dakota. However, Bellik's

third-party complaint against Bank of America is based on an

entirely separate and distinct contract and transaction, namely,

the Stratus sales contract. In fact, as defendant concedes in

his brief, Bank of America was not a party to the contract for

sale of the Dakota.5 Consequently, Bank of America cannot be

found liable for any of Harris Bank's claims against Bellik based

on that contract. See 735 ILCS 5/2-406(b) (West 2004).

Moreover, the Stratus sales contract upon which Bellik

5 In his brief, Bellik states "[t]he original complaint was a suit for a nonpayment of an installment note pursuant to a purchase of an automobile, through Midlothian Dodge [sic] prior to the involvement of the [sic] Bank of America." (Emphasis added.)

8 1-06-0620

relies in his third-party complaint is silent regarding the

Dakota contract at issue in the underlying Harris Bank

litigation. Although the Stratus sales contract indisputably

references the Dakota as a trade-in vehicle, it does not impose

any contractual duties or obligations on Bank of America to pay

off the lien owed by Bellik on that Dakota. In addition, as

Bellik acknowledges in his brief, Bellik's third party-complaint

did not expressly seek indemnification or contribution from Bank

of America for Harris Bank's deficiency judgment of $9,846.23.6

See Guzman, 196 Ill. 2d at 399. Simply put, "third-party actions

cannot be used to maintain an entirely separate and independent

claim against a third party, even if it arises out of the same

general set of facts as the main claim." People v. Brockman, 143

Ill. 2d 351, 364-65 (1991).

Furthermore, contrary to Bellik's position that Bank of

America, as an assignee of the Stratus sales contract, "inherits"

the alleged wrongdoing of Gorman (the car dealer) because of the

FTC Holder Notice language in the Stratus contract, our supreme

court has recognized that the FTC Holder Notice, which is

required in all consumer credit contracts, "only permits

6 In his brief, Bellik states that "[w]hile [he] may not have used the magic word 'contribution' or 'indemnity' in his pleading, the offset which is sought is clearly implied and at the very least if this language was an important issue, leave to amend should have been granted."

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affirmative actions against assignees where the seller's breach

is so substantial that rescission is warranted." Jackson v.

South Holland Dodge, Inc., 197 Ill. 2d 39, 54-55 (2001)

(discussing FTC commentary on the FTC Holder Notice). Here,

Bellik does not contend that rescission is warranted and thus

cannot maintain an affirmative action against Bank of America by

relying on the FTC Holder Notice. Furthermore, the central role

of the FTC Holder Notice is to confirm "the right of buyers to

withhold payment from sellers or assignees, if it becomes

apparent that the car purchased is a lemon." Jackson, 197 Ill.

2d at 54. Such is not the situation presented in this case.

Accordingly, we find that the circuit court correctly

granted Bank of America's motion to dismiss Bellik's third-party

complaint because Bank of America was not a party to the contract

that forms the basis of the original litigation, and the FTC

Holder Notice does not permit an affirmative action against Bank

of America, as an assignee, under the circumstances here.

Defendant's reliance on our decision in Felde v. Chrysler

Credit Corp., 219 Ill. App. 3d 530 (1991), is misplaced. Most

notably, in Felde, the plaintiffs expressly requested

cancellation and revocation of the retail installment contract at

issue, based upon defects in an automobile they had purchased

pursuant to that contract. Felde, 219 Ill. App. 3d at 533.

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Here, in contrast, Bellik did not request the cancellation of the

contract at issue, nor did he allege that his vehicle was

defective.

We decline Bellik's request to impose a duty on Bank of

America, as an assignee of a retail installment contract for the

sale of an automobile, to "make at least a threshold inquiry as

to whether the terms of the agreement have been fully performed

prior to accepting such assignments." As Bellik concedes, there

is no relevant authority for such a proposition, and we therefore

conclude that imposition of such a duty would more properly be

addressed by the legislature. See, e.g., City of Chicago v.

Holland, 206 Ill. 2d 480, 489 (2003) (recognizing that "the

General Assembly is free to enact any legislation that the

constitution does not expressly prohibit").

B. Dismissal with Prejudice

Last, Bellik argues that the circuit court erred in

dismissing his third-party complaint with prejudice, contending

that he "was precluded from filing an amended pleading, and,

since the dismissal was with prejudice, the direct filing of an

action against Bank of America." Bellik argues that he should

have been granted an opportunity to amend his complaint.

A circuit court may properly dismiss a complaint with

prejudice under section 2-615 of the Code where it is clearly

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apparent that the plaintiff can prove no set of facts that

entitles them to recovery, and we review de novo the court's

decision in that regard. Schiller v. Mitchell, 357 Ill. App. 3d

435, 438-39 (2005). Ordinarily, the circuit court should give a

plaintiff at least one opportunity to cure the defects in his or

her complaint. Schiller, 357 Ill. App. 3d at 453.

Here, contrary to Bellik's claims on appeal, he never

articulated to the circuit court any potential amendments to his

third-party complaint prior to its dismissal. Instead, after the

circuit court dismissed his complaint, Bellik filed a motion to

reconsider, urging the circuit court to either reverse its

decision and allow him to replead or modify its decision from a

dismissal with prejudice to a dismissal without prejudice.

However, Bellik proposed no amendments to his complaint that

would prevent its dismissal. In light of our determination that

Bellik's third-party complaint was properly dismissed by the

circuit court pursuant to section 2-615 of the Code, and Bellik

offered no potential amendments to his original complaint to cure

its defects, we find that the circuit court did not abuse its

discretion when it dismissed his complaint with prejudice.

CONCLUSION

For the foregoing reasons, we affirm the judgement of the

circuit court.

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Affirmed.

FITZGERALD-SMITH, P.J., and JOSEPH GORDON, J., concur.