Howard v. Chicago Transit Authority

• Court: Appellate Court of Illinois
• Decided: June 7, 2010
• Docket: 1-08-3177 Rel
• Status: Published

Opinion

FIRST DIVISION June 7, 2010

No. 1-08-3177

HUGH HOWARD, Individually and on Behalf ) Appeal from the of All Similarly Situated Persons, ) Circuit Court of ) Cook County. Plaintiff-Appellant, ) ) No. 05CH19182 cons. v. ) with Nos. 03CH116 & ) 06CH23586 CHICAGO TRANSIT AUTHORITY, an Illinois ) Municipal Corporation, ) The Honorable ) Stuart E. Palmer, Defendant-Appellee. ) Judge Presiding.

JUSTICE LAMPKIN delivered the opinion of the court:

Plaintiff, Hugh Howard, filed a putative class action

complaint against defendant, Chicago Transit Authority (CTA),

alleging defendant’s practice of allowing transit cards to expire

one year after issuance while retaining any unused money left on

the transit cards violates passengers’ constitutional and

statutory rights, breaches the CTA’s fiduciary obligations, and

entitles passengers to equitable relief. The trial court

dismissed the complaint pursuant to section 2-619(a)(9) of the

Code of Civil Procedure (Code) (735 ILCS 5/2-619(a)(9) (West

2004)). Plaintiff contends the trial court erred in dismissing

his complaint. Based on the following, we affirm.

FACTS

In 1997, plaintiff began using CTA transit cards. A CTA 1-08-3177

passenger can preload a self-designated amount of money on a

transit card and the per-ride fee is deducted each time a

passenger uses the card as payment for transport. In 2005,

plaintiff attempted to use one of his transit cards; however, it

was denied. Plaintiff learned that his transit card had expired.

Up until that time, plaintiff was unaware that transit cards

carried expiration dates printed on the back side of the cards.

Once a transit card expired, plaintiff lost any remaining balance

on that card.

On December 5, 2005, plaintiff filed his second amended

class action complaint, which is the subject of this appeal. Two

other individuals, Edwin Pilcher and Kecia Jones, similarly filed

class action complaints based on the same operative facts.

Eventually, Howard’s and Pilcher’s complaints were consolidated

and Jones’ complaint was dismissed for want of prosecution.1

In his second amended complaint, plaintiff asserted eight

causes of action: (count I) violations of the due process and

equal protection clauses of the federal Constitution; (count II)

violations of the due process and equal protection clauses of the

Illinois Constitution; (count III) a request for a declaratory

1 In the background of the case, there were numerous disputes

among the attorneys of record in the various cases to disqualify

one another from representing the named parties.

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judgment imposing a constructive trust; (count IV) breach of

fiduciary duty; (count V) unjust enrichment; (count VI)

conversion; (count VII) violation of the Illinois Consumer Fraud

and Deceptive Business Practices (815 ILCS 505/1 et seq. (West

2004)); and (count VIII) violation of the Illinois Uniform

Deceptive Trade Practices Act (Deceptive Trade Practices Act)

(815 ILCS 510 et seq. (West 2004)). The CTA filed a section 2-

619.1 (735 ILCS 5/2-619.1 (West 2004)) motion to dismiss,

alleging plaintiff’s claims failed to sufficiently state the

named causes of action pursuant to section 2-615 of the Code (735

ILCS 5/2-615 (West 2004)) and, in the alternative, the claims

were defeated by an affirmative matter, namely, plaintiff’s

acceptance of the CTA’s contract of carriage, pursuant to section

2-619(a)(9) of the Code (735 ILCS 5/2-619(a)(9) (West 2004)). In

response, plaintiff withdrew counts I and VII of his second

amended complaint.

The circuit court granted the CTA’s motion to dismiss

pursuant to section 2-619(a)(9).2 The court found plaintiff’s

claims based on the CTA’s alleged “wrongful conduct” could not

stand because of the contractual relationship between the

parties. The court said plaintiff failed to account for the fact

2 The court did not rule on the CTA’s section 2-615 motion to

dismiss.

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that any money lost on the expired transit cards resulted “from

his own negligence” because he had several options to prevent

such a loss. The court pointed to the printed terms on the

transit card, specifically, the expiration date and the language

providing that the transit card could not be redeemed, refunded,

or replaced, and held that those terms were binding on plaintiff

because he entered a contract for carriage with the CTA when he

purchased the transit card. Specifically, the court said, “[t]he

transit card has an expiration date. It cannot be combined with

values on other cards. It cannot be replaced. It cannot be

refunded. It cannot be redeemed for cash. The message is clear,

use it up by the expiration date or lose it.” (Emphasis in

original.)

DECISION

Section 2-619(a)(9) of the Code permits the involuntary

dismissal of a complaint when “the claim asserted against

defendant is barred by other affirmative matter avoiding the

legal effect of or defeating the claim.” 735 ILCS 5/2-619(a)(9)

(West 2004). When considering a motion to dismiss, this court

“must interpret all pleadings and supporting documents in the

light most favorable to the nonmoving party.” In re Chicago

Flood Litigation, 176 Ill. 2d 179, 189, 680 N.E.2d 265 (1997).

Our review is de novo. In re Chicago Flood Litigation, 176 Ill.

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2d at 189.

I. The Parties’ Contract For Carriage

Plaintiff contends the trial court erred in finding that the

terms and conditions found on the back of the transit card were

contractual, thereby defeating his claims of wrongdoing against

the CTA. Plaintiff admits that an expiration date is printed on

the transit card and that there is language providing that the

card cannot be replaced, refunded, or redeemed for cash.

Plaintiff, however, contends the language at issue refers only to

the use of the card itself and not to the use of the money placed

on the card. We disagree.

It is well established that a passenger enters a contract

for carriage with a carrier when the passenger offers himself to

ride on the carrier’s transportation and the carrier expressly or

impliedly accepts by carrying the passenger to the agreed-upon

destination for a designated fare. O’Donnell v. Chicago &

Northwestern Ry. Co., 106 Ill. App. 287 (1903). Plaintiff and

the CTA entered a contract for carriage when plaintiff purchased

a transit card by depositing a chosen monetary amount and then

used that transit card to ride the CTA to his desired

destination, the requisite fair being deducted from the transit

card balance in the process.

Moreover, the terms printed on plaintiff’s transit cards

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became part of the contract for carriage. Our supreme court

said:

“ ‘The settled opinion is, that a passage ticket, in

the ordinary form, is merely a voucher, token or

receipt, adopted for convenience, to show that the

passenger has paid his fare from one place to another,

and does not constitute the contract of carriage,

although it often does have upon it some condition or

limitation which enters into and forms a part of the

contract. Accordingly, it is admissible to prove by

parol evidence the terms of the contract in fact

entered into between the carrier and the passenger.’ ”

(Emphasis added.) Chicago & Alton R.R. Co. v.

Dumser, 161 Ill. 190, 194-95, 43 N.E. 698 (1896).

The terms on a fare pass are incorporated into the carrier’s

contract for carriage and are enforceable as written. See Stack

v. Regional Transportation Authority, 101 Ill. 2d 284, 290, 461

N.E.2d 969 (1984).

Here, the record demonstrates that the back side of the

transit card said the card “must be used by the expiration date

shown” and the “[p]urchaser does not have the right to have

his/her card replaced, refunded or redeemed for cash.” In

addition, the regulations section of the transit card provided

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that “[u]se of the Transit Card is subject to all applicable

tariffs, terms, conditions, rules, regulations, polies and

procedures CTA may in its discretion adopt from time to time.”

Therefore, by purchasing and using the transit card, plaintiff

agreed to its terms and conditions. The terms and conditions

clearly stated that plaintiff was required to use the transit

card by the expiration date provided. Moreover, plaintiff was

not entitled to a refund of any sort. As a result, if plaintiff

failed to redeem the total amount of money deposited on the card

by the date shown, he was not entitled to a refund of the

remaining balance.

The use of the card is part and parcel of using the money

deposited on the card. Without money deposited on the card,

plaintiff could not use the transit card to fulfill his fair

obligation, and the CTA could not accept the transit card as

payment satisfaction if the card was expired or did not have

enough money remaining on balance for the fare.

Additionally, contrary to plaintiff’s contention, the

contract between the parties was not an escrow contract. In an

escrow contract, a grantor and a third party execute a written

instrument under which the grantor gives funds to the third party

to hold until a designated time when those funds are delivered to

a grantee. Midwest Decks, Inc. v. Butler & Baretz Acquisitions,

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Inc., 272 Ill. App. 3d 370, 379, 649 N.E.2d 511 (1995). Here,

there is no third party temporarily holding plaintiff’s funds for

later delivery to the CTA. Rather, plaintiff directly delivered

the funds for the transit card to the CTA when he purchased it.

Also, there is no written instrument detailing the alleged escrow

agreement.

II. Plaintiff’s Claims Were Properly Dismissed

A. Violation of the Illinois Constitution (Count II)

Plaintiff contends the trial court erred in dismissing

count II because the CTA engaged in inverse condemnation by

“taking” the remaining balance on his transit card without due

process or just compensation. It is well settled that courts

should avoid constitutional questions where a case may be decided

on other grounds. Beahringer v. Page, 204 Ill. 2d 363, 370, 789

N.E.2d 1216 (2003). Here, we have concluded, based on theories

of contract, that plaintiff entered into a contract for carriage

with the CTA when he purchased his transit card. The terms and

conditions printed on the back of the transit card became part of

the contract. The alleged “taking” fell squarely under those

terms and conditions when plaintiff failed to use the entirety of

his balance prior to the expiration date. Count II was properly

dismissed.

B. Declaratory Relief (Count III)

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Plaintiff contends the trial court erred in failing to award

declaratory relief in the form of a constructive trust.

Declaratory judgment allows a trial court to become involved

in a controversy “ ‘ “after the dispute has arisen, but before

steps are taken which give rise to claims for damages or relief.

The parties to the dispute can then learn the consequences of

their actions before acting.” [Citations.] ’ ” Brandt

Construction Co. v. Ludwig, 376 Ill. App. 3d 94, 101, 878 N.E.2d

116 (2007). “[T]he procedure should be used to afford security

and relief against uncertainty with a view to avoiding

litigation, not toward aiding it.” Lihosit v. State Farm Mutual

Automobile Insurance Co., 264 Ill. App. 3d 576, 580, 636 N.E.2d

625 (1993).

Declaratory judgment was not appropriate here. The parties’

positions were fixed when the controversy was brought to the

trial court; in fact, plaintiff had filed a complaint based on

the actions giving rise to the claim for relief. Plaintiff

asserted a challenge because of his expired transit card and the

CTA refused to replace, refund, or redeem the transit card for

cash. The parties had already acted and litigation had already

ensued. The time for a declaratory action had passed. Count III

was properly dismissed.

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C. Breach of Fiduciary Duty (Count IV)

Plaintiff contends the CTA had a fiduciary duty “for the

unused portion of money on deposit.” Plaintiff’s contention

fails. “It is well established that parties to a contract do not

stand in a fiduciary relationship to one another.” Colmar, Ltd.

v. Fremantlemedia North America, Inc., 344 Ill. App. 3d 977, 994,

801 N.E.2d 1017 (2003). Plaintiff failed to present any facts

outside of the parties’ contractual relationship to demonstrate

that the CTA is plaintiff’s fiduciary. Count IV was, therefore,

properly dismissed.

D. Unjust Enrichment (Count V)

Plaintiff contends the CTA was unjustly enriched by

retaining the balance on the transit cards once they expired.

The theory of unjust enrichment is based upon an implied contract

of law and is not available where the parties’ relationship is

governed by contract. Wheeler-Dealer, Ltd. v. Christ, 379 Ill.

App. 3d 864, 872, 885 N.E.2d 350 (2008). As repeatedly stated,

the parties entered a contract for carriage. Moreover, implied

contracts are not recognized where one of the parties is a

municipal corporation. McMahon v. City of Chicago, 339 Ill. App.

3d 41, 48, 789 N.E.2d 347 (2003). The circuit court properly

dismissed count V.

E. Conversion (Count VI)

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Plaintiff contends the CTA converted the funds remaining on

his transit card when it expired.

To assert a claim for conversion, a plaintiff must establish

that: (1) he has a right to the property at issue; (2) he has an

absolute and unconditional right to the immediate possession of

that property; (3) he made a demand for possession; and (4) the

defendant wrongfully and without authorization assumed control,

dominion, or ownership over the property. Kovitz Shifrin Nesbit,

P.C. v. Rossiello, 392 Ill. App. 3d 1059, 1063-64, 911 N.E.2d

1180 (2009).

Plaintiff cannot assert a claim for conversion. Plaintiff

did not have a right to the property at issue, i.e., the money

deposited on the transit card. Once plaintiff purchased the

transit card with the chosen amount, he relinquished control over

the money and gave the CTA permission to deduct the requisite

fare when he used the card as payment for transit. The transit

card clearly stated that it could not be replaced, refunded, or

redeemed for cash. Therefore, upon purchase of the transit card,

plaintiff no longer had an absolute and unconditional right to

the immediate possession of the money that he paid to obtain the

card. Rather, he permitted the CTA to assume control over the

money by way of deducting the appropriate balance from the

transit card each time it was used to pay a fare. Count VI was

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F. Violation of the Deceptive Trade Practices Act (Count VIII)

Plaintiff contends the trial court erred in finding that he

could not seek injunctive relief under the Deceptive Trade

Practices Act. In his complaint, plaintiff alleged the CTA

engaged in deceptive trade practices pursuant to sections

2(a)(5), 2(a)(10), and 2(a)(12) of the Deceptive Trade Practices

Act (815 ILCS 510/2(a)(5), (a)(10), (a)(12) (West 2004)) “when,

in the course of its business, the entity represents that goods

and services have characteristics or qualities that they do not

have, advertises goods and services with intent not to supply

reasonably expectable public demand, or engages in any other

conduct which similarly creates a likelihood of confusion or of

misunderstanding.”

“In order to maintain such an act, the consumer must

‘allege facts which would indicate that he is “likely

to be damaged” in the future.’ [Citations.] The problem

in most consumer actions under the [Deceptive Trade

Practices Act] is the inability to allege facts

indicating the likelihood of damage in the future.

[Citation.]” Popp v. Cash Station, Inc., 244 Ill. App.

3d 87, 99, 613 N.E.2d 1150 (1992).

Plaintiff cannot do so here. Plaintiff admittedly became aware

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of the terms and conditions of the transit card in 2005. The

record demonstrates plaintiff has since ceased using transit

cards. Therefore, plaintiff can, and has, avoided the

consequences of an expired transit card. Glazewksi v. Coronet

Insurance Co., 108 Ill. 2d 243, 253, 483 N.E.2d 1263 (1985).

Plaintiff cannot demonstrate he will likely be damaged by the

CTA’s transit card practices in the future. Count VIII was

CONCLUSION

We affirm the judgment of the trial court dismissing

plaintiff’s complaint.

Affirmed.

HALL, P.J., and GARCIA, J., concur.

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REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT

HUGH HOWARD, Individually and on Behalf of All Similarly Situated Persons,

Plaintiff-Appellant,

v.

CHICAGO TRANSIT AUTHORITY, an Illinois Municipal Corporation,

Defendant-Appellee.

Appellate Court of Illinois First District, FIRST DIVISION

June 7, 2010

Justice Bertina E. Lampkin authored the opinion of the court:

Presiding Justice Hall and Justice Garcia concur.

Appeal from the Circuit Court of Cook County. The Hon. Stuart E. Palmer, Judge Presiding.

COUNSEL FOR APPELLANT Zimmerman Law Offices, P.C., Chicago, IL 60603 OF COUNSEL: Thomas A. Zimmerman, Jr. and Adam M. Tamburelli

and

Vrdolyak Law Group, LLC., Chicago, IL 60610 OF COUNSEL: John K. Vrdolyak

COUNSEL FOR APPELLEE Kent S. Ray, Acting General Counsel of the Chicago Transit Authority, Chicago, IL 60680-7564 OF COUNSEL: Brad Jansen, Acting Deputy Counsel

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and Stephen L. Wood, Chief Attorney

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