King v. Gerber Realty, Inc.

2022 IL App (1st) 211189, 214 N.E.3d 839, 465 Ill. Dec. 76

• Court: Appellate Court of Illinois
• Decided: June 30, 2022
• Docket: 1-21-1189
• Status: Published

Opinion

2022 IL App (1st) 211189

FIRST DISTRICT SIXTH DIVISION June 30, 2022

No. 1-21-1189

LARRY KING, Individually and on Behalf of All Others Similarly ) Appeal from the Situated, ) Circuit Court of ) Cook County. Plaintiff-Appellant, ) ) v. ) No. 20 CH 04073 ) GERBER REALTY, INC.; WILLIAM J. GERBER REALTY, ) LTD., d/b/a Gerber Real Estate; 3812 PINE GROVE, ) LLC; and GERBER MANAGEMENT, ) Honorable ) Eve Reilly, Defendants-Appellees. ) Judge Presiding.

JUSTICE HARRIS delivered the judgment of the court, with opinion. Presiding Justice Pierce concurred in the judgment and opinion. Justice Oden Johnson concurred in part and dissented in part, with opinion.

OPINION

¶1 Plaintiff, Larry King, appeals the judgment of the circuit court granting defendants’

(Gerber Realty, Inc.; William J. Gerber Realty, Ltd., d/b/a Gerber Real Estate; 3812 Pine Grove,

LLC; and Gerber Management) motion to dismiss his complaint, which alleged violations of the

Residential Landlord and Tenant Ordinance of the Chicago Municipal Code (RLTO) (Chicago

Municipal Code § 5-12-010 et seq. (amended Mar. 31, 2004)) and the Consumer Fraud and

Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 2018)).

On appeal, plaintiff contends that the court erred in dismissing his complaint on the basis of the

security deposit return agreement, where the agreement was procured by fraud and was also void

for lack of consideration. For the following reasons, we affirm in part, reverse in part, and remand

for further proceedings. No. 1-21-1189

¶2 I. JURISDICTION

¶3 On March 8, 2021, the trial court entered an order granting defendants’ motion to dismiss

with prejudice. Plaintiff filed a motion to reconsider, which the trial court denied on August 23,

2021. Plaintiff filed his notice of appeal on September 21, 2021. Accordingly, this court has

jurisdiction pursuant to Illinois Supreme Court Rule 301 (eff. Feb. 1, 1994) and Rule 303 (eff. July

1, 2017), governing appeals from final judgments entered below.

¶4 II. BACKGROUND

¶5 Plaintiff alleges the following facts in his complaint, which we take as true for purposes of

reviewing a section 2-619 motion to dismiss. Porter v. Decatur Memorial Hospital, 227 Ill. 2d

343, 352 (2008).

¶6 On August 2, 2013, plaintiff signed a contract to lease a unit in an apartment building

located at 3812 Pine Grove in Chicago, Illinois. The lease term was for 12 months, ending on July

31 of the following year. The lease required plaintiff to provide defendants a security deposit of

$700, which he paid. Plaintiff renewed his lease in 2014, 2015, 2016, 2017, 2018 and 2019.

Attached to his complaint was the 2017 lease, which stated that a security deposit was “On File.”

¶7 Defendants were landlords subject to RLTO (Chicago Municipal Code § 5-12-010 et seq.

(amended Mar. 31, 2004)). Defendants, however, failed to attach the RLTO summaries to the

2017, 2018, and 2019 written leases in violation of section 5-12-170 of the RLTO (Chicago

Municipal Code § 5-12-170 (amended Nov. 14, 2018)). Defendants also failed to give him credit

or pay interest on his security deposit within 30 days after the end of the 2017-18 rental period,

violating section 5-12-080(a)(1), (a)(3) (Chicago Municipal Code § 5-12-080(a)(1), (3) (amended

-2- No. 1-21-1189

July 28, 2010)), and his lease did not list the address of the bank holding his security deposit in

violation of subsection (b)(1) (id. § 5-12-080(b)).

¶8 In June 2019, “[d]efendants demanded all their tenants execute the standard form Security

Deposit Return Agreement,” hereinafter referred to as the “Release.” The Release signed by

plaintiff stated, in pertinent part:

“WHEREAS, tenant has paid a security deposit of $700.00 landlord seeks to return to

tenant/s and tenant/s wish to receive from landlord;

That for $1, and other valuable consideration, the parties acknowledge is paid and

received it is hereby AGREED as follows:

1. Landlord shall return in full to tenant/s the security deposit of $710.00.

2. Both parties WAIVE on behalf of themselves, their agents, assigns and heirs, any

and all liability of any find [sic] whatsoever arising from any Federal, State or Municipal

statute or ordinance which they may have against each other, their agents, assigns, heirs or

attorneys, concerning the security deposit or its return.

3. All parties hereto have a full understanding of this agreement and the authority to

sign and enter into this agreement.”

¶9 According to plaintiff, defendants drafted the Release because they “were advised by their

attorney around June 2019 that they were in violation of the RLTO concerning the security deposits

of their tenants.” Furthermore, defendants “purposefully” drafted the Release “so that Plaintiff and

Defendants’ other tenants would not be alerted to their RLTO rights.” The Release made no

reference to the RLTO, nor did it disclose defendants’ violations or specify the liability waived by

the tenant. Plaintiff “would not have signed the [Release] if [he] had been informed of the rights

-3- No. 1-21-1189

and damages they were waiving by signing the agreement, and if not for the disparate bargaining

power of the uninformed tenant compared to the informed landlord.” Plaintiff also alleged that the

Release was a breach of defendants’ fiduciary duty to him because it was not in his best interest.

¶ 10 On May 4, 2020, plaintiff filed a four-count complaint against defendants. Count I stated

that defendants failed to attach the RLTO summaries to the 2017, 2018, and 2019 written leases

as required by section 5-12-170 of RLTO. Count I further stated that “[d]efendants’ violation of

5-12-170 was not waived or released by the Security Deposit Return Agreement, [ ] because the

requirement to attach the RLTO Summaries is not ‘concerning the security deposit or its return,”

and in light of “the unfairness, deception and omission of material fact employed by Defendants.”

¶ 11 In count II, plaintiffs claimed that defendants’ failure to pay interest on security deposits

violated section 5-12-080(c) of the RLTO. Plaintiff was not paid any interest on his security deposit

“within 30 days after the end of each 12-month *** period” pursuant to the 2017 lease, which

would have ended on August 30, 2018. Chicago Municipal Code § 5-12-080(c) (amended July 28,

2010). Under section 5-12-080(f) of the RLTO, plaintiff is entitled to damages “equal to two times

the security deposit plus interest.” Chicago Municipal Code § 5-12-080(f)(1) (amended July 28,

2010). Count II alleged that defendants’ violation of section 5-12-080(c) was not waived by the

Release in light of “the unfairness, deception and omission of material fact employed by

Defendants.”

¶ 12 Plaintiff requested judgment in his favor “for the amounts specified in” section 5-12-170

(count I) and section 5-12-080(f) (count II) of the RLTO, as well as attorney fees, litigation

expenses, and costs pursuant to section 5-12-180 (Chicago Municipal Code § 5-12-180 (added

Nov. 6, 1991)).

-4- No. 1-21-1189

¶ 13 Counts III and IV alleged defendants’ unfair and unscrupulous conduct in violation of the

Consumer Fraud Act. Therein, plaintiff alleged that defendants drafted and offered a “one-sided

agreement.” Their conduct in doing so, and in omitting any reference to the RLTO or to the specific

violations being waived by plaintiff, was deceptive and unscrupulous. By omitting this material

information, defendants intended plaintiff to rely on their deception and sign the Release. The

complaint sought compensatory and punitive damages, as well as attorney fees, litigation expenses,

and costs.

¶ 14 Defendants filed a motion to dismiss pursuant to section 2-615 of the Code of Civil

Procedure (Code) (735 ILCS 5/2-615 (West 2018)). Defendants argued that the complaint was

“barred by the executed [Release],” in which plaintiff waived “all claims concerning the security

deposit or the return of same relating to his tenancy.” Defendants asserted that plaintiff “voluntarily

accepted consideration and executed the Release” with a “full understanding” of the terms.

Therefore, the release was “enforceable to bar this action.” Defendants also disagreed that they

owed a fiduciary duty to plaintiff. Without such a duty, defendants argued, plaintiff has no basis

to claim that they had a duty to specify the causes of action waived by the release.

¶ 15 Alternatively, defendants argued that the complaint should be dismissed because plaintiff

ratified the Release when he failed to return the $710 he was paid. Since plaintiff did not return

the consideration he received, the Release barred his claims against them. Defendants contended

that plaintiff’s failure to attach the written leases for 2018 and 2019, in violation of section 2-606

of the Code (735 ILCS 5/2-606 (West 2018)), provided another potential basis for dismissal for

those claims. They also argued that the two-year statute of limitations applicable to RLTO claims

barred him from recovery for any violations occurring on or before July 31, 2019.

-5- No. 1-21-1189

¶ 16 At the hearing on the motion, the trial court stated it was “a little bit confused” about

defendants’ motion. The trial court told defendants’ counsel, “I’m not really following how this is

a 2-615. Is this not a 2-619?” Counsel responded,

“Perhaps we should have labeled it as a 619 then because of the statute of

limitations, but I kind of saw it as, you can’t even allege it because its nonexistent, we put

it under 2-615.

We also did not want to get into issues of having to attach an affidavit or anything.

We just don’t believe that you can have a basis when you have already been barred.”

The court asked counsel, “So you are saying on the face of the pleadings, you can tell that it’s time

barred?” Counsel answered, “Yes.”

¶ 17 Plaintiff’s counsel disagreed. He argued that the claim for nonpayment of security deposit

interest does not arise when the leases are executed but rather it arises 30 days after the end of each

12-month lease term. Plaintiff’s counsel contended that “the only way that they can defeat the

claim for interest is with the waiver agreement.” When the trial court asked counsel why plaintiff’s

complaint should not be dismissed based on the Release, he responded that “[t]he release is invalid,

and specifically when they took that security deposit, they had a fiduciary duty to the tenant. That

release would violate that fiduciary duty.”

¶ 18 After argument, the trial court granted the motion to dismiss with prejudice. The court’s

written order stated that it was “construing this 735 ILCS 5/2-615 motion as a 735 ILCS 5/2-619

Motion as the Court finds there is affirmative matter that defeats the claim.” The motion was

granted “based on the [Release] signed by Plaintiff and the absence of any fiduciary duty owed by

the Defendants to Plaintiff.”

-6- No. 1-21-1189

¶ 19 Plaintiff filed a motion to reconsider, arguing that the Release was unenforceable because

defendants owed a fiduciary duty to tenants concerning security deposits. Plaintiff also pointed out

that the RLTO “mandates that no agreement may provide that the landlord or tenant ‘agrees to

waive or forego rights, remedies or obligations provided under this chapter.’ ” Therefore, “the

prohibited [Release] agreement is unenforceable.” He requested that the court deny defendants’

motion to dismiss and grant his request for leave to amend his complaint to add a claim regarding

defendants’ attempts to enforce an agreement that improperly waived certain rights and remedies

of plaintiff.

¶ 20 In response, defendants argued that the court was correct in finding no general fiduciary

duty between a landlord and tenant. They noted that plaintiff raised a new argument concerning

the RLTO’s mandate that no agreement may waive or forgo a landlord’s or tenant’s rights,

remedies, or obligations. Defendants posited that the mandate applied only to rental agreements

and nothing in the RLTO prohibited a landlord and tenant from executing a mutual release outside

of the lease agreement. They again maintained that the Release “was a release of all Plaintiff’s

claims including the release of his claim to interest on the security deposit.” Defendants also

argued, as they did in their motion to dismiss, that plaintiff ratified the Release by keeping the

payment and the statute of limitations barred his claims.

¶ 21 After a hearing, the trial court denied plaintiff’s motion to reconsider “for the reasons cited

in the briefs and argued on the record.” Plaintiff filed this appeal.

¶ 22 III. ANALYSIS

¶ 23 Before proceeding to the merits of this appeal, we first address the trial court’s decision to

treat defendants’ section 2-615 motion to dismiss as a section 2-619 motion to dismiss. The court

-7- No. 1-21-1189

was understandably confused where defendants’ motion to dismiss was brought pursuant to section

2-615 but alleged affirmative matters that defeated plaintiff’s claims such as the existence of a

valid release, plaintiff’s ratification of the release, and the statute of limitations. Such matters are

properly raised in a section 2-619 motion to dismiss. See Weisblatt v. Colky, 265 Ill. App. 3d 622,

626-27 (1994) (finding that the existence of a valid release is an affirmative matter defeating

plaintiff’s claim); 735 ILCS 5/2-619(a)(5) (West 2018) (providing that the assertion a claim is

barred by the statute of limitations is a matter properly raised in a section 2-619 motion to dismiss);

Cove Management v. AFLAC, Inc., 2013 IL App (1st) 120884, ¶ 37 (ruling that the trial court

properly granted defendant’s section 2-619(a)(9) motion to dismiss where plaintiff could not show

that AFLAC ratified the lease or accepted its benefits). While such motions are generally improper,

reversal is required only if prejudice results to the nonmovant. Wilde v. First Federal Savings &

Loan Ass’n of Wilmette, 134 Ill. App. 3d 722, 729 (1985). Here, plaintiff did not object to the

procedure, and he had the opportunity to make his argument against defendants’ motion at the

hearing and in his motion to reconsider. We find that plaintiff was not prejudiced by the error.

¶ 24 A dismissal pursuant to section 2-619(a)(9) is appropriate when a claim “is barred by other

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

(West 2018). The “affirmative matter” must be apparent on the face of the complaint or supported

by affidavits or certain other evidentiary materials. Kedzie & 103rd Currency Exchange, Inc. v.

Hodge, 156 Ill. 2d 112, 116 (1993). Once defendants satisfy their initial burden of asserting the

affirmative matter, the burden shifts to plaintiff, who must establish that the affirmative defense

asserted either is “unfounded or requires the resolution of an essential element of material fact

before it is proven.” Id. at 116. Plaintiff may establish this by “affidavits or other proof.” 735 ILCS

-8- No. 1-21-1189

5/2-619(c) (West 2018).

¶ 25 A section 2-619 motion to dismiss admits as true all well-pleaded facts, along with all

reasonable inferences that can be gleaned from those facts. Porter, 227 Ill. 2d at 352. In ruling on

the motion, the trial court construes the pleadings and any supporting documentary evidence in the

light most favorable to the nonmoving party. Van Meter v. Darien Park District, 207 Ill. 2d 359,

367-68 (2003). When determining whether to grant dismissal pursuant to section 2-619, the trial

court must consider whether the defendant has presented facts that constitute an affirmative

defense that could defeat the plaintiff’s cause of action. Senesac v. Employer’s Vocational

Resources, Inc., 324 Ill. App. 3d 380, 385 (2001). Our review is de novo. Porter, 227 Ill. 2d at

352.

¶ 26 Count I of the complaint sought damages for defendants’ failure to attach RLTO summaries

to plaintiff’s 2017, 2018, and 2019 written leases. Section 5-12-170 of the RLTO provides that

“[t]he Commissioner of Housing shall prepare a summary of this chapter, describing the respective

rights, obligations and remedies of landlords and tenants hereunder, and shall make such summary

available for public inspection and copying.” Chicago Municipal Code § 5-12-170 (amended Nov.

14, 2018). Relevant here, “[a] copy of such summary shall be attached to each written rental

agreement when any such agreement is initially offered to any tenant or prospective tenant by or

on behalf of a landlord and whether such agreement is for a new rental or a renewal thereof.” Id.

The section further provides that “[i]f a tenant in a legal proceeding against his landlord establishes

that a violation of this section has occurred, he shall be entitled to recover $100.00 in damages.”

Id. Since section 5-12-170 “imposes automatic liability for a violation of its terms, sets forth a

predetermined amount of damages, and imposes liability regardless of plaintiff’s actual damages,

-9- No. 1-21-1189

the provision is a ‘penalty’ ” subject to the two-year limitations period in section 13-202 of the

Code (735 ILCS 5/13-202 (West 2018)). See Landis v. Marc Realty, L.L.C., 235 Ill. 2d 1, 15 (2009)

(using this reasoning to find that section 5-12-080(f) of the RLTO is a “penalty” within the

meaning of section 13-202).

¶ 27 Plaintiff’s cause of action for failing to attach a summary of the ordinance accrued when

each lease was offered to him. Namur v. Habitat Co., 294 Ill. App. 3d 1007, 1013 (1998).

Plaintiff’s 2017 lease was dated July 30, 2017. Therefore, plaintiff had until July 30, 2019, to file

his claim that defendants failed to attach the RLTO Summary to his 2017 lease. Plaintiff, however,

filed his complaint on May 4, 2020, past the two-year limitation period. As such, the statute of

limitations barred this claim.

¶ 28 Regarding his claims that defendants failed to attach the summaries to his 2018 and 2019

written leases, plaintiff failed to attach copies of the leases to his complaint. Section 2-606 of the

Code provides that if a claim is based on a written instrument, that document “must be attached to

the pleading as an exhibit or recited therein, unless the pleader attaches to his or her pleading an

affidavit stating facts showing that the instrument is not accessible to him or her.” 735 ILCS 5/2-

606 (West 2018). Plaintiff’s complaint did not have an affidavit attached stating why the

documents were unavailable. The failure to attach the 2018 and 2019 leases constituted proper

grounds for dismissal of these claims. Alpha School Bus Co. v. Wagner, 391 Ill. App. 3d 722, 743

(2009).

¶ 29 We therefore affirm the trial court’s dismissal of count I, which alleged defendants’ failure

to attach the RLTO summaries to plaintiff’s 2017, 2018, and 2019 written leases. Although the

trial court used a different rationale to dismiss this allegation, this court can affirm “on any basis

- 10 - No. 1-21-1189

present in the record.” Raintree Homes, Inc. v. Village of Long Grove, 209 Ill. 2d 248, 261 (2004).

¶ 30 Count II alleged that defendants failed to pay interest on plaintiff’s security deposit

“pursuant to Lease 2017,” in violation of section 5-12-080(c) of the RLTO. Section 5-12-080(c)

provides that “[t]he landlord [who holds a security deposit] shall, within 30 days after the end of

each 12-month rental period, pay to the tenant any interest, by cash or credit to be applied to the

rent due.” Chicago Municipal Code § 5-12-080(c) (amended July 28, 2010). If the landlord fails

to comply with this provision, “the tenant shall be awarded damages in an amount equal to two

times the security deposit plus interest at a rate determined in accordance with Section 5-12-081.”

Id. § 5-12-080(f)(1).

¶ 31 Defendants contend that the executed Release barred this claim. The Release provided that

plaintiff had paid defendants a security deposit of $700, and in exchange for the landlord’s “return

in full to tenant/s the security deposit of $710.00,” plaintiff agreed to waive “any and all liability

of any [kind] whatsoever *** concerning the security deposit or its return.” The existence of a

valid release is an affirmative matter defeating plaintiff’s claim. Weisblatt, 265 Ill. App. 3d at 626-

27.

¶ 32 Plaintiff, however, insists that section 5-12-140 of the RLTO forbids an agreement such as

the Release because it allows defendants to “contract[ ] around their security deposit obligations.”

Section 5-12-140 states: “Except as specifically provided by this chapter, no rental agreement may

provide that the landlord or tenant *** [a]grees to waive or forego rights, remedies or obligations

provided under this chapter.” Chicago Municipal Code § 5-12-140(a) (amended. Nov. 6, 1991).

According to the provision’s clear terms, it applies only to rental agreements. “Rental Agreement”

is defined as “all written or oral agreements embodying the terms and conditions concerning the

- 11 - No. 1-21-1189

use and occupancy of a dwelling unit by a tenant.” Chicago Municipal Code § 5-12-030(h)

(amended May 12, 2010). Plaintiff does not set forth how the Release “embod[ies] the terms and

conditions concerning the use and occupancy of a dwelling unit.” The Release contained no terms

relating to plaintiff’s use and occupancy of his unit, nor has he claimed that defendants required

him to sign the Release as a condition of his occupancy. Since we find plaintiff’s contention

unpersuasive, we next determine whether the Release was enforceable.

¶ 33 A release must be based upon consideration, consisting of either some right, interest, or

benefit accruing to one party, or some forbearance or detriment suffered or undertaken by the

other. White v. Village of Homewood, 256 Ill. App. 3d 354, 356-57 (1993). Here, plaintiff was paid

his security deposit plus $10 for his promise to waive all liability on the part of defendants

“concerning the security deposit or its return.” Plaintiff acknowledges that pursuant to the lease

and the RLTO, he was entitled to the return of his $700 security deposit plus $.60 interest. He

received $710 under the terms of the Release. “It is well settled that valid consideration exists for

a release when a party promises not to file suit against another party in exchange for payment.”

Rohr Burg Motors, Inc. v. Kulbarsh, 2014 IL App (1st) 131664, ¶ 49. While plaintiff now argues

that consideration for the release was insufficient when compared with defendants’ potential

liability under section 5-12-080, this court generally does not review the amount of consideration.

Hurd v. Wildman, Harrold, Allen & Dixon, 303 Ill. App. 3d 84, 93 (1999). “Mere inadequacy of

consideration, in the absence of fraud or unconscionable advantage, ordinarily is insufficient to

justify setting aside a contract.” (Internal quotation marks omitted.) Id.

¶ 34 Plaintiff does allege that defendants deceived and misled him into waiving his rights under

the RLTO. However, nowhere does he claim that he returned the sums received under the Release.

- 12 - No. 1-21-1189

One who retains the consideration for any considerable length of time, with knowledge of the

fraud, ratifies the contract. Carlile v. Snap-on Tools, 271 Ill. App. 3d 833, 842 (1995).

“ ‘A party cannot be permitted to retain the benefits received under a contract and at the

same time escape the obligations imposed by the contract. If a releasor, therefore, retains

the consideration after learning that the release is voidable, [his] continued retention of the

benefits constitutes a ratification of the release.’ ” Hurd, 303 Ill. App. 3d at 93-94 (quoting

Seward v. B.O.C. Division of General Motors Corp., 805 F. Supp. 623, 632 (N.D. Ill.

1992)).

Accordingly, even if defendants had procured the Release through fraud, plaintiff ratified the

contract by retaining the consideration he received. 1 Because plaintiff ratified the Release, we find

that the trial court properly dismissed count II of plaintiff’s complaint.

¶ 35 Counts III and IV of the complaint alleged violations of the Consumer Fraud Act, which

the trial court also dismissed based on the signed Release. We are mindful that a release is a

contract, and our primary objective in interpreting a contract is to give effect to the parties’ intent.

Badette v. Rodriguez, 2014 IL App (1st) 133004, ¶ 17. Liability release clauses, however, are

disfavored. Evans v. Lima Lima Flight Team, Inc., 373 Ill. App. 3d 407, 412 (2007). Therefore,

“[r]eleases are strictly construed against the benefitting party and must spell out the intention of

the parties with great particularity.” Fuller Family Holdings, LLC v. Northern Trust Co., 371 Ill.

App. 3d 605, 614 (2007).

¶ 36 Here, plaintiff agreed to waive “any and all liability of any [kind] whatsoever ***

1 The same reasoning applies to plaintiff’s fiduciary duty argument. Even if defendants had violated a fiduciary duty owed to plaintiff in drafting the Release, plaintiff ratified the agreement by retaining the benefit after having knowledge of the violation.

- 13 - No. 1-21-1189

concerning the security deposit or its return.” Since defendants drafted and benefitted from the

Release, we must strictly construe the terms of the Release against them. Harris v. Walker, 119 Ill.

2d 542, 548 (1988). Viewing the Release as such, we find that plaintiff’s consumer fraud claims

did not concern the security deposit or its return. Rather, plaintiff claimed that defendants’ use of

the Release itself was a deceptive and unscrupulous practice that offended public policy. Plaintiff

sought compensatory and punitive damages for the defendants’ deception that led him to sign the

Release. Since the express terms of the Release applied only to liability “concerning the security

deposit or its return,” it did not bar plaintiff’s consumer fraud claims. Therefore, we reverse the

trial court’s dismissal of counts III and IV pursuant to section 2-619(a)(9), based on the Release.

¶ 37 IV. CONCLUSION

¶ 38 For the foregoing reasons, we affirm the trial court’s dismissal of counts I and II of

plaintiff’s complaint, but reverse dismissal of counts III and IV. We remand the cause for further

proceedings thereon.

¶ 39 Affirmed in part and reversed in part; cause remanded.

¶ 40 JUSTICE ODEN JOHNSON, concurring in part and dissenting in part:

¶ 41 I concur with the majority’s decision to reverse the dismissal of counts III and IV, and I

also agree that our review is de novo. However, I must respectfully dissent from its decision to

affirm the dismissal of counts I and II for reasons explained below.

¶ 42 The complaint has four counts: the first count concerned the landlord’s failure to attach

RLTO summaries; and the remaining three counts concerned the tenant’s security deposit. The

trial court entered a written order on March 8, 2022, dismissing the complaint in its entirety “based

- 14 - No. 1-21-1189

on the Security Deposit [Return] Agreement signed by Plaintiff and the absence of any fiduciary

duty owed by the Defendants to Plaintiff.” 2 Hereinafter, I refer to the agreement, which is entitled

the “Security Deposit Return Agreement,” as the Return Agreement; the majority calls it the

“Release,” although the word “Release” is nowhere in its title. Entitling it the “Release” skews the

legal issues by making it seem as though the very title put plaintiff on notice that the document

was a release of rights, when, in actuality, the document was entitled the far more benign “Return.”

¶ 43 I. Count I

¶ 44 Count I of the complaint sought damages for defendants’ failure to attach RLTO summaries

to plaintiff’s 2017, 2018, and 2019 written leases. The majority finds that the claim with respect

to the 2017 lease is time-barred and that the claim with respect to the 2018 and 2019 leases is

barred due to plaintiff’s failure to attach the 2018 and 2019 leases to his complaint. 3

¶ 45 A. 2018 and 2019 Claims

¶ 46 I agree with my colleagues that defendant’s 2-615 motion to dismiss should have been

brought pursuant to section 2-619 (see cases cited supra ¶ 23). However, the majority affirms by

finding that the error did not prejudice plaintiff. I must respectfully disagree. The majority’s

finding itself shows the prejudice that plaintiff suffered. As the majority observes, under section

2-619, once a defendant satisfies its initial burden of asserting an affirmative matter defeating the

claim, the burden shifts to the plaintiff who must establish that the affirmative defense is

2 The trial court’s August 23, 2021, order denying plaintiff’s motion to reconsider stated only that plaintiff’s motion was denied “for the reasons cited in the briefs and argued on the record.” The record does not contain a transcript for the August 23, 2021, Zoom proceeding. 3 These reasons were argued extensively by defendants to the trial court at the dismissal hearing. However, the trial court apparently did not find them persuasive because the dismissal was based solely on two findings:(1) the entire complaint was barred by the Return Agreement, and (2) the landlord owed no fiduciary duty to the tenant.

- 15 - No. 1-21-1189

unfounded. Supra ¶ 24. The majority then affirms the dismissal—with prejudice—of count I with

respect to the 2018 and 2019 leases because plaintiff failed to satisfy his burden by not attaching

the leases.

¶ 47 Even though the trial court and the majority would cure a defect in the defendant’s 2-619/2-

615 motion to dismiss, they nonetheless would dismiss plaintiff’s complaint with prejudice without

the opportunity to cure. This complaint has never been amended, and plaintiff would not have an

opportunity to even refile a new complaint as the dismissal was with prejudice and therefore barred

by res judicata. For this court, in effect, to dismiss on this basis—when it was not given as a reason

by the trial court, when amendments are liberally granted, and when the complaint had not been

amended even once—I think is an abuse of our discretion and is highly prejudicial, and I must

respectfully disagree. Atlas v. Mayer Hoffman McCann, P.C., 2019 IL App (1st) 180939, ¶ 39

(“Generally, amendments should be granted liberally.”); Goldberg v. Brooks, 409 Ill. App. 3d 106,

113 (2011) (“the general rule” is “that amendments should be granted liberally”).

¶ 48 Plaintiff argues in his reply brief that this “error could have been easily amended by an

amended complaint” and asks us, “at a minimum,” to remand to the trial court on count I. The case

cited by defendant does just that. In support of its argument that the failure to attach the 2018 and

2019 leases warrants dismissal, defendant cites in support Velocity Investments, LLC v. Alston,

397 Ill. App. 3d 296 (2010). However, in Velocity, this court vacated the lower court’s judgment

and remanded for further proceedings, in order to allow the plaintiff to produce and attach the

missing document to its complaint. Velocity, 397 Ill. App. 3d at 300 (“defendant’s motion to

dismiss should have been granted without prejudice”). I agree with plaintiff, and the court in

Velocity, that this is not a reason for dismissing this claim with prejudice at this time.

- 16 - No. 1-21-1189

¶ 49 B. 2017 Claim

¶ 50 As for the 2017 claim, the majority finds that it is time-barred. Applying a 2-year statute

of limitations, the majority observes that the 2017 lease was dated July 30, 2017, and “[t]herefore,”

plaintiff had until July 30, 2019, to file a claim that defendants failed to attach the RLTO Summary

to the 2017 lease. Supra ¶ 27. Since plaintiff did not file until March 4, 2020, the majority finds

the claim to be seven months too late.

¶ 51 In Landis v. Marc Realty, LLC, 235 Ill. 2d 1, 4 (2009), our supreme court held that a 2-year

statute of limitations applied to a different RLTO section than the one at issue in count I. While

the supreme court in Landis found a 2-year statute of limitations applied, it did not need to discuss

the accrual date since the Landis suit was filed four years after the tenant had vacated the

apartment. Landis, 235 Ill. 2d at 3. In the 1993 appellate court case of Namur v. Habitat Co., 294

Ill. App. 3d 1007, 1013 (1998), cited by the majority, 4 the court considered the same RLTO

section at issue here and found that a 2-year statute of limitations applied and that the accrual date

“for failing to attach a summary of the ordinance” occurred “when the lease was offered to

plaintiffs.” 5 However, the Namur court expressly stated that it was not deciding whether, in

general, this 2-year statute of limitations is tolled until a plaintiff discovers his or her cause of

action. Namur, 294 Ill. App. 3d at 1014 (“[w]e do not need to decide whether the discovery rule

applies to this cause of action” for other reasons). The whole point of attaching the RLTO summary

4 Namur is persuasive but it is not binding authority. The majority does not discuss whether we should follow the almost 30-year-old appellate-court case that has not been cited once for this point in a published opinion. 5 We note that the accrual date applied in Namur is actually earlier than the accrual date applied by the majority. The majority used the date of the lease as the accrual date (supra ¶ 27), while the accrual date in Namur was the date when the lease was first offered to plaintiff. Namur, 294 Ill. App. 3d at 1013.

- 17 - No. 1-21-1189

is to inform the tenant who otherwise might not be aware of it. Thus, it does make some sense to

toll the statute of limitations until the tenant becomes aware, despite the landlord’s ordinance-

violating failure to inform. However, the Namur court declined to decide the tolling issue because,

in the case before it, there was no evidence at trial and no allegation in the complaint about the

discovery date. Namur, 294 Ill. App. 3d at 1014. Thus, while finding a fairly regressive accrual

date, the appellate court simultaneously held out the possibility of a broad tolling exception.

¶ 52 In contrast to the Namur case, which was posttrial, the case at bar is at a very different

place on the procedural timeline. As a result, Namur does not serve as precedent for dismissing

here, when the complaint has yet to be amended once and plaintiff could easily amend it to add an

allegation about his discovery date. Where the trial court chose not to dismiss on this basis, and

where plaintiff has yet to amend, I would not affirm a dismissal with prejudice on this basis at this

time. 6 Kopnick v. JL Woode Management Co., 2017 IL App 152054, ¶ 32 (the trial court abused

its discretion by dismissing, with prejudice, the tenant’s claim that the landlord failed to attach the

required RLTO summary, where the claimed defect could have been easily cured by allowing the

tenant to amend her complaint).

¶ 53 Lastly, in support of its finding that the failure to attach the 2018 and 2019 leases requires

dismissal of these claims, the majority cites Alpha School Bus Co. v. Wagner, 391 Ill. App. 3d 722,

743 (2009). However, the Alpha court affirmed the dismissal because the plaintiffs had failed to

6 The majority also does not discuss whether the failure to provide the summary was a continuing violation during the year of the lease, such that plaintiff had until July 29, 2020, to file a claim. One could fathom good policy reasons for finding this to be a continuing violation, first and foremost being to give the landlord an incentive to ameliorate the error as soon as he or she noticed it.

- 18 - No. 1-21-1189

attach documents to their “third amended complaint.” Alpha, 391 Ill. App. 2d at 742-43. Thus, the

Alpha case is not analogous to the case at bar, as plaintiff’s complaint has yet to be amended once.

¶ 54 II. The Return Agreement

¶ 55 Turning to the reason given by the trial court for its dismissal with prejudice of all counts,

the trial court stated that it was dismissing solely due to “the Security Deposit [Return] Agreement

signed by Plaintiff and the absence of any fiduciary duty owed by the Defendants to Plaintiff.” See

supra ¶ 18. I do not find this reason persuasive, for reasons that I explain below.

¶ 56 Count II is the second of the two counts that the majority affirmed the dismissal of. This

count alleges that defendant failed to pay the required interest on the tenants’ security deposits.

Plaintiff alleges that defendant owed (1) interest, plus the penalty of twice the security deposit, or

$1400.60; (2) attorney fees and costs; and (3) the $700 security deposit, due at the end of the lease.

However, with the Return Agreement, defendant paid only $1 in consideration and returned the

$700 security deposit with $10 in interest. Defendant argues that the Return Agreement preempts

count II, and the majority finds this argument persuasive.

¶ 57 However, section 5-12-140 of the RLTO expressly forbids agreements, such as the Return

Agreement, by which a landlord gets a tenant to waive or forgo his or her rights under the RLTO.

Section 5-12-140 provides: “Except as specifically provided by this chapter, no rental agreement

may provide that the landlord or tenant *** [a]grees to waive or forego rights, remedies or

obligations provided under this chapter.” Chicago Municipal Code § 5-12-140(a) (amended Nov.

6, 1991). This section emphatically and unambiguously states that “no” rental agreement may

affect such a waiver. Chicago Municipal Code § 5-12-140(a) (amended Nov. 6, 1991).

- 19 - No. 1-21-1189

¶ 58 Interpreting this section, the majority finds that the Return Agreement was not a

modification of the existing rental agreement and, thus, this prohibition does not apply. A “[r]ental

agreement” is defined as “all written or oral agreements embodying the terms and conditions

concerning the use and occupancy of a dwelling unit by a tenant.” Chicago Municipal Code § 5-

12-030(h) (amended May 12, 2010). The majority finds that the Return Agreement did not embody

terms and conditions concerning use and occupancy and, therefore, it was not a modification of a

rental agreement.

¶ 59 I must respectfully disagree. The security deposit 7 is a term and condition concerning the

use and occupancy of a rental unit. For example, section 5-12-080(a)(3) provides that “[t]he name

and address of the financial institution where the security deposit will be deposited shall be clearly

and conspicuously disclosed in the written rental agreement signed by the tenant.” (Emphasis

added.) Chicago Municipal Code § 5-12-080(a)(3) (amended July 28, 2010). The Return

Agreement at issue purported to waive this obligation to clearly and conspicuously disclose on the

face of the rental agreement where the security deposit will be deposited. The Return Agreement

thereby altered or modified the required terms of the written rental agreement itself and did so for

the express purpose of waiving or foregoing rights bestowed by the Chicago Municipal Code. It

would be hard to think of a more direct violation of section 5-12-140(a). See Chicago Municipal

Code § 5-12-140(a) (amended Nov. 6, 1991).

7 The RLTO does not define the term “security deposit.” Steenes v. MAC Property Management, LLC, 2014 IL App (1st) 120719, ¶ 20. However, “[a] security deposit has been defined as money a tenant deposits with a landlord as security for the tenant’s full and faithful performance of the lease terms.” Starr v. Gay, 354 Ill. App. 3d 610, 613 (2004); see also 765 ILCS 710/1 (West 2018) (the Security Deposit Return Act defines a security deposit as the money received “from a lessee to secure the payment of rent or to compensate for damage to the leased premises”); 765 ILCS 715/1 (West 2018) (same, under the Security Deposit Interest Act).

- 20 - No. 1-21-1189

¶ 60 Our supreme court has previously observed:

“If a landlord requires a security deposit, the landlord is required to pay the tenant interest

on that deposit. If he fails to do so, he is liable to the tenant for the damages specified in

the ordinance. There are no exceptions.” (Emphasis added.) Lawrence v. Regent Realty

Group, Inc., 197 Ill. 2d 1, 9-10 (2001).

¶ 61 The supreme court emphasized that “[t]he city council has elected to address this problem

by imposing an absolute duty to pay the interest they owe and conferring on tenants the right to

recover double the amount of their security deposit when that duty is breached.” Lawrence, 197

Ill. 2d at 10. “[I]t is not this court’s function to second-guess the city council’s judgment in such

matters.” Lawrence, 197 Ill. 2d at 10. In Lawrence, the supreme court rejected the imposition of a

willfulness requirement into the ordinance. 8 Lawrence, 197 Ill. 2d at 10. While we may appreciate

the quandary in which a landlord may find itself upon realizing that it had, perhaps inadvertently,

breached the ordinance, it is not this court’s function to second-guess the city council’s judgment

or to sanction the creation of an exception, such as this Return Agreement, which attempts to

circumvent the ordinance. Cf. Dickson v. West Koke Mill Village Partners, 329 Ill. App. 3d 341,

347 (2002) (reversing a grant of summary judgment dismissing a tenant’s claim under the Security

Deposit Interest Act, despite the landlord’s return and tenant’s acceptance of the security deposit

with interest, where the landlord failed to tender “the full amount alleged to be owed under the

Act”); Purcell & Wardrope Chartered v. Hertz Corp., 175 Ill. App. 3d 1069, 1082 (1988) (a

corporate defendant “cannot be allowed to use pro forma contracts that blatantly disregard the

8 Unlike our municipal RLTO, the state-wide Security Deposit Interest Act does have a willfulness requirement for its penalties. Dickson v. West Koke Mill Village Partners, 329 Ill. App. 3d 341, 346-47 (2002) (discussing 765 ILCS 715/2 (West 1996)).

- 21 - No. 1-21-1189

mandate of” Illinois law, and “thereby avoid the legislative mandate that seeks to protect parties

in an inferior bargaining position”).

¶ 62 For the foregoing reasons, I must respectfully dissent from the majority’s decision to affirm

the dismissal of counts I and II. However, I concur in the majority’s decision to remand for further

proceedings and to reverse the dismissal of counts III and IV. Thus, I concur in part and dissent in

part.

- 22 - No. 1-21-1189

Decision Under Review: Appeal from the Circuit Court of Cook County, No. 20-CH- 04073; the Hon. Eve Reilly, Judge, presiding.

Attorneys Jeffrey Sobek, of JS Law, of Chicago, for appellant. for Appellant:

Attorneys James V. Noonan, Mitchell A. Lieberman, and Pamela J. for Leichtling, of Noonan & Lieberman, Ltd., of Chicago, for Appellee: appellees.

- 23 -