Sopris Concrete, LLC v. Meeks

2022 IL App (2d) 210331, 207 N.E.3d 312, 462 Ill. Dec. 580

• Court: Appellate Court of Illinois
• Decided: April 14, 2022
• Docket: 2-21-0331
• Status: Published

Opinion

2022 IL App (2d) 210331 No. 2-21-0331 Opinion filed April 14, 2022 ______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT ______________________________________________________________________________

SOPRIS CONCRETE, LLC, ) Appeal from the Circuit Court ) of Kane County. Plaintiff-Appellee, ) ) v. ) No. 20-CH-304 ) KRYSTAL MEEKS, n/k/a Krystal Stewart, ) Honorable ) Kevin T. Busch, Defendant-Appellant. ) Judge, Presiding. ______________________________________________________________________________

JUSTICE ZENOFF delivered the judgment of the court, with opinion. Presiding Justice Bridges and Justice Schostok concurred in the judgment and opinion.

OPINION

¶1 Plaintiff, Sopris Concrete, LLC, obtained a $13,992.62 judgment by confession against

defendant, Krystal Meeks. Defendant appeals. We affirm and remand for a determination of the

contractual attorney fees that defendant owes to plaintiff in connection with this appeal.

¶2 I. BACKGROUND

¶3 Between November 15, 2016, and March 21, 2017, plaintiff performed concrete foundation

and stone work as a subcontractor at defendant’s property. On April 13, 2017, plaintiff recorded a

mechanic’s lien, claiming that it was owed approximately $17,300.

¶4 In March 2019, the parties executed a “settlement agreement and confession of judgment”

(Settlement Agreement), which “supersedes and replaces all prior representations, statements, and 2022 IL App (2d) 210331

agreements between the Parties, oral or written.” The Settlement Agreement recites that it was “the

product of negotiation between and among the Parties, including their respective counsel.” At oral

argument on appeal, however, the parties’ respective attorneys confirmed that defendant was not

represented by counsel when she signed the Settlement Agreement. In the Settlement Agreement,

the parties acknowledged, inter alia, that (1) plaintiff performed all work in a “workmanlike and

satisfactory manner,” (2) such work “improved” defendant’s property and made it “more

valuable,” (3) plaintiff was owed $13,362.99 in connection with the work, (4) plaintiff had “the

right and ability to seek foreclosure” of its mechanic’s lien, and (5) the parties “desire[d] to resolve

all issues presented *** without the cost, uncertainty, and acrimony of litigation.” Defendant

agreed to pay plaintiff $7750, on or before May 20, 2019. Plaintiff agreed to “take any and all

action necessary to release” the mechanic’s lien within 14 days of payment. The parties agreed to

“release and discharge each other from any and all liability, claims, counterclaims, and causes of

action” based on or arising out of the “conduct” described in the Settlement Agreement. The

Settlement Agreement contained the following confession-of-judgment provision:

“In the event [defendant] does not pay the Settlement Amount on or before May 20, 2019,

the parties hereby expressly agree and acknowledge that [plaintiff] shall be entitled to entry

of a Judgment against [defendant] and recordable against [defendant’s] property in the

amount of $13,362.99, plus any and all attorneys’ fees necessarily incurred to enforce the

terms of this Agreement and statutory interest at the rate of 9% per annum compounded

from March 21, 2017, up to and including the date of final payment.”

¶5 In August 2020, plaintiff filed a “complaint for breach of settlement agreement and

confession of judgment.” Plaintiff alleged that, despite being granted multiple extensions,

defendant made only partial payments toward the $7750 specified in the Settlement Agreement.

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Plaintiff prayed for a judgment against defendant in accordance with the terms of the Settlement

Agreement.

¶6 Defendant moved to dismiss the complaint pursuant to section 2-619(a)(9) of the Code of

Civil Procedure (Code) (735 ILCS 5/2-619(a)(9) (West 2018)). Defendant argued that, because

the parties’ “original transaction” (i.e., the work on defendant’s property) was a consumer

transaction, the Settlement Agreement was “a debt payment instrument involving a consumer

debt.” From this premise, defendant contended that the confession-of-judgment provision violated

section 2-1301(c) of the Code, which provided, in relevant portion:

“No power to confess judgment shall be required or given after September 24, 1979 in any

instrument used in a consumer transaction; any power to confess given in violation hereof

is null and void and any judgment entered by a court based on such power shall be

unenforceable. ‘Consumer transaction’ as used in this Section means a sale, lease,

assignment, loan, or other disposition of an item of goods, a consumer service, or an

intangible to an individual for purposes that are primarily personal, family, or household.”

735 ILCS 5/2-1301(c) (West 2018).

¶7 In its response to defendant’s motion to dismiss the complaint, plaintiff argued that the

Settlement Agreement was not a consumer transaction. According to plaintiff, the purpose of

section 2-1301(c) of the Code was to ensure that parties to consumer transactions may challenge

the contract itself and raise disputes as to performance or workmanship, if necessary. Plaintiff

reasoned that, because the confession-of-judgment provision appeared in a settlement agreement

that was executed after plaintiff had already performed its original contractual obligations, the

Settlement Agreement did not run afoul of section 2-1301(c).

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¶8 In her reply in support of her motion to dismiss, defendant asserted that the parties’ original

consumer transaction was never completed, as defendant never paid plaintiff in full. Defendant

proposed that the Settlement Agreement was “a modification to the original transaction” that

“merged into the original consumer transaction,” thereby implicating section 2-1301(c) of the

Code.

¶9 On January 22, 2021, the court denied defendant’s motion to dismiss. The record on appeal

does not include transcripts of any court appearances.

¶ 10 Defendant moved to reconsider the January 22, 2021, order. She raised a new issue, arguing

that the Settlement Agreement lacked consideration because the mechanic’s lien was defective.

Defendant reasoned that, because the mechanic’s lien was unenforceable, plaintiff did not give up

anything of value in the Settlement Agreement by forgoing its right to pursue that lien.

¶ 11 Plaintiff responded that defendant’s motion to reconsider improperly asserted a new issue

that could have been raised in the original motion to dismiss. Plaintiff further contended that

defendant’s new argument was misguided, as the mechanic’s lien was valid and the parties waived

all their claims and defenses with respect to that lien.

¶ 12 On April 23, 2021, the court denied defendant’s motion to reconsider. The court found that

the Settlement Agreement was “valid and enforceable” and that plaintiff was entitled to a judgment

by confession. The court granted plaintiff leave to file an affidavit of attorney fees. The court

continued the matter for a prove up of fees and the entry of a final judgment.

¶ 13 On May 21, 2021, the court entered a $13,992.62 judgment (including interest) in

plaintiff’s favor against defendant. Defendant timely appealed.

¶ 14 II. ANALYSIS

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¶ 15 Defendant reiterates her arguments that the confession-of-judgment provision in the

Settlement Agreement violated section 2-1301(c) of the Code and that the Settlement Agreement

lacked consideration.

¶ 16 We review de novo matters of statutory interpretation. In re Marriage of Dynako, 2021 IL

126835, ¶ 14. The cardinal rule of statutory construction is to ascertain and effectuate the

legislature’s intent. Thomas v. Khoury, 2021 IL 126074, ¶ 11. “The most reliable indicator of

legislative intent is the language of the statute, which must be given its plain and ordinary

meaning.” Thomas, 2021 IL 126074, ¶ 11. We must read the statute as a whole and consider words

and phrases in context. Thomas, 2021 IL 126074, ¶ 11. In conducting our analysis, we may

“consider the reason for the law, the problems sought to be remedied, the purposes to be achieved,

and the consequences of construing the statute one way or another.” Evans v. Cook County State’s

Attorney, 2021 IL 125513, ¶ 27.

¶ 17 Once again, section 2-1301(c) of the Code provides, in relevant portion:

“No power to confess judgment shall be required or given after September 24, 1979 in any

instrument used in a consumer transaction; any power to confess given in violation hereof

is null and void and any judgment entered by a court based on such power shall be

unenforceable. ‘Consumer transaction’ as used in this Section means a sale, lease,

assignment, loan, or other disposition of an item of goods, a consumer service, or an

intangible to an individual for purposes that are primarily personal, family, or household.”

According to our research, only two Illinois cases have addressed a dispute as to whether a

transaction was a “consumer transaction” for purposes of this statute. In Baker v. Gray, 141 Ill.

App. 3d 444, 446 (1986), the court held that a party’s “bald assertion that [a] confessed judgment

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involved a consumer transaction” did not justify opening the judgment, as the party did “not set

forth the facts surrounding the transaction.” In Herget National Bank of Pekin v. Theede, 181 Ill.

App. 3d 1053, 1055-56 (1989), the issue was whether a debtor signed a promissory note for

business rather than personal purposes. Neither case addressed the issue at hand: whether a

settlement agreement was a consumer transaction where the settlement resolved a mechanic’s lien

that arose out of a consumer transaction.

¶ 18 We hold that the Settlement Agreement here was not a consumer transaction. The premise

of defendant’s argument—that the Settlement Agreement arose out of an underlying consumer

transaction—is dubious. The Settlement Agreement directly arose out of a mechanic’s lien, and

foreclosure of a lien certainly does not meet the statutory definition of a consumer transaction. At

any rate, the plain language of section 2-1301(c) of the Code voids only confession-of-judgment

provisions that appear “in any instrument used in a consumer transaction.” 735 ILCS 5/2-1301(c)

(West 2018). The statute does not nullify confession-of-judgment provisions merely because they

arguably “relate to” or “arise out of” consumer transactions. See Schultz v. Illinois Farmers

Insurance Co., 237 Ill. 2d 391, 408 (2010) (noting that “[a] court may not add provisions that are

not found in a statute”). We cannot plausibly say that the Settlement Agreement here—entered

two years after plaintiff completed its performance under the contract—was an instrument that was

used in a consumer transaction. Significantly, the Settlement Agreement itself did not effectuate

any “sale, lease, assignment, loan, or other disposition of an item of goods, a consumer service, or

an intangible.” 735 ILCS 5/2-1301(c) (West 2018). Accordingly, the Settlement Agreement did

not fall within the statutory definition of a “consumer transaction.”

¶ 19 Our conclusion is consistent with the purposes of the statute, as reflected by its legislative

history. Prior to the late 1970s, Illinois placed “virtually no limitations” on the use of confession-

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of-judgment provisions in contracts. Cindy F. Wile, Confessions of Judgment In Illinois: The Need

for Change Persists, 10 Loy. U. Chi. L.J. 141, 141 (1978). In 1979, Public Act 81-1049 (eff. Sept.

24, 1979) (see Ill. Rev. Stat. 1979, ch. 110, ¶ 50) went into effect, precluding the use of judgments

by confession in consumer transactions. Community Thrift Club, Inc. v. Dearborn Acceptance

Corp., 487 F. Supp. 877, 878 n.1 (N.D. Ill. 1980). It is evident from the floor debates surrounding

the bill that became Public Act 81-1049 (eff. Sept. 24, 1979) that this was compromise legislation.

The original House bill would have barred the use of confession-of-judgment provisions in all

contexts. See 81st Ill. Gen. Assem., House Proceedings, May 23, 1979, at 44 (statements of

Representative Breslin) (noting that the bill would “abolish judgments by confession”). The

Senate, however, limited that prohibition to consumer transactions, and that is the version of the

bill that the legislature ultimately passed. See 81st Ill. Gen. Assem., House Proceedings, June 29,

1979, at 19 (statements of Representative Breslin) (explaining the bill’s procedural history).

Throughout this process, multiple legislators emphasized that consumer transactions often involve

disparities in sophistication and bargaining power that are not characteristic of commercial

transactions. See, e.g., 81st Ill. Gen. Assem., Senate Proceedings, June 27, 1979, at 141 (statements

of Senator Netsch) (explaining that, unlike consumer transactions, commercial transactions

involve “parties who are essentially on even terms”); 81st Ill. Gen. Assem., Senate Proceedings,

June 27, 1979, at 142 (statements of Senator Johns) (expressing concern about protecting “the

unintelligent, the unknowledgeable, [and] the people who sign in desperation many times,” along

with people who “have good intentions when they buy something and then they find it faulty”);

81st Ill. Gen. Assem., House Proceedings, June 29, 1979, at 22 (statements of Representative

Leinenweber) (“Now, by eliminating the commercial transactions from the Bill, we have

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eliminated those persons who are sophisticated and who know exactly what they’re doing when

they sign a note which contains the confession clause.”).

¶ 20 The concerns that prompted the prohibition against using confession-of-judgment

provisions in consumer transactions are not present here. Defendant did not purchase a faulty

product. To the contrary, there was no dispute that (1) plaintiff fulfilled its contractual duties in a

“workmanlike and satisfactory manner” and (2) such work “improved” defendant’s property and

made it “more valuable.” Nor does it appear that there was any disparity in bargaining power

between the parties. We note that defendant received rather favorable treatment under the

Settlement Agreement, as plaintiff agreed to accept 58% of what it was owed. Accordingly,

although the plain language of section 2-1301(c) of the Code convinces us that the Settlement

Agreement was not a “consumer transaction,” the legislative history further underscores that a

settlement agreement like this was not what the legislature had in mind when it enacted the statute.

¶ 21 Case law from other jurisdictions, though arising in different contexts, lends additional

support to our conclusion that the Settlement Agreement was not a “consumer transaction.”

Specifically, courts have held that, where parties settle a dispute that arose from a consumer

transaction, the settlement itself is not a consumer transaction that can form the basis for a

consumer fraud claim. See Wagner Equipment Co. v. Wood, Civ. No. 11-466 MV/GBW, 2013

WL 12089509, *8 (D. N.M. Sept. 26, 2013) (“[P]romises made in connection with a settlement

agreement are not actionable under the [New Mexico Unfair Practices Act], because neither party

to the settlement agreement is a buyer of goods or services when seeking to settle a claim.”); Ortiz

v. Collins, 203 S.W.3d 414, 425 (Tex. App. 2006) (“Negotiations to settle litigation do not

constitute consumer transactions, even when the subject of the litigation involves a good such as

a house. [Citation.] Otherwise, every lawsuit concerning a dispute over the purchase or lease of a

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good or service would itself constitute a consumer transaction.”); Kincaid v. Cummins Engine Co.,

No. 05-04-01803-CV, 2005 WL 1744959, *1 (Tex. App. July 26, 2005) (reasoning that a

settlement agreement “itself was not a good or service[,] nor were the [plaintiffs] looking to

purchase goods or services when settling the claim”). The reasoning of these cases is persuasive

and applicable here.

¶ 22 In arguing to the contrary, defendant relies on cases reciting that multiple instruments may

collectively constitute a single contract. See, e.g., Peters & Fulk Realtors, Inc. v. Shah, 140 Ill.

App. 3d 301, 305 (1986) (“The general rule is that ‘in the absence of evidence of a contrary

intention, where two or more instruments are executed by the same contracting parties in the course

of the same transaction, the instruments will be considered together and construed with reference

to one another because they are, in the eyes of the law, one contract.’ ” (quoting Tepfer v. Deerfield

Savings & Loan Ass’n, 118 Ill. App. 3d 77, 80 (1983))). From this premise, defendant argues that,

because the Settlement Agreement “arose from” the parties’ initial consumer transaction, the

Settlement Agreement “merged into the original consumer transaction,” thereby implicating

section 2-1301(c) of the Code.

¶ 23 This argument is unpersuasive. The Settlement Agreement specified that it was intended

to “supersede[ ] and replace[ ]” all prior agreements, not merge into them. Additionally, as

explained above, section 2-1301(c) of the Code voids only confession-of-judgment provisions that

appear “in any instrument used in a consumer transaction.” 735 ILCS 5/2-1301(c) (West 2018).

The statute does not nullify confession-of-judgment provisions merely because they “arise out of”

a consumer transaction. Moreover, defendant’s argument presupposes that the initial interaction

between the parties and their Settlement Agreement two years later were part of the same

transaction. This assumption is untenable. As explained above, the Settlement Agreement did not

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meet the statutory definition of a “consumer transaction,” as it did not effectuate any “sale, lease,

assignment, loan, or other disposition of an item of goods, a consumer service, or an intangible.”

¶ 24 Defendant’s other argument is that the Settlement Agreement is unenforceable for lack of

consideration, given that the mechanic’s lien that plaintiff filed purportedly had defects on its face

and was not properly perfected. “Whether a contract contains consideration is a question of law,

which we review de novo.” Dohrmann v. Swaney, 2014 IL App (1st) 131524, ¶ 23. “Forbearance,

including the compromise of a disputed claim or a promise to forgo legal action, is ***

consideration.” Tower Investors, LLC v. 111 East Chestnut Consultants, Inc., 371 Ill. App. 3d

1019, 1027-28 (2007). “Where a party’s compromise of its claim is made in good faith, even if

that claim is ultimately shown to be invalid, the forbearance is nevertheless sufficient consideration

to support a contract.” Tower Investors, 371 Ill. App. 3d at 1030; see In re Estate of Herwig, 237

Ill. App. 3d 737, 741 (1992) (“The compromise of a disputed claim, even if that claim is not valid,

will serve as sufficient consideration for the formation of a contract as long as that claim is made

in good faith.”).

¶ 25 Here, defendant does not argue in her brief that plaintiff acted in bad faith in pursuing its

mechanic’s lien or entering into the Settlement Agreement. In response to questions at oral

argument, however, defendant’s counsel argued that plaintiff settled in bad faith because there

were defects on the face of the mechanic’s lien.

¶ 26 In Heaps v. Dunham, 95 Ill. 583 (1880), our supreme court distinguished between dubious

claims and claims that the prosecuting party has no legal right to pursue. In that case, a young

woman alleged that she was impregnated by a man. She filed a complaint alleging bastardy, and

she threatened to have him charged with seduction. The parties settled: $550 for the bastardy claim

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and $500 for the seduction claim. The man subsequently challenged the settlement agreement,

arguing that the woman was never pregnant. The supreme court acknowledged that there was

“great doubt” as to whether the woman had been pregnant. Heaps, 95 Ill. at 590. Nevertheless, in

the absence of evidence of “fraud or oppression,” the man was bound by his decision to settle the

bastardy claim. Heaps, 95 Ill. at 590. By contrast, the woman had “no legal right” to bring a

seduction claim, as such claim could be asserted only by her parents. Heaps, 95 Ill. at 591. Thus,

with respect to the seduction claim, “[t]here was no legal right to settle, or doubtful claim to

compromise.” Heaps, 95 Ill. at 592. Under these circumstances, the supreme court upheld the

settlement with respect to the bastardy claim but determined that there was no consideration

supporting the $500 that the man promised to pay to settle the seduction claim. Heaps, 95 Ill. at

592.

¶ 27 Here, plaintiff had a legal right to pursue a mechanic’s lien, as defendant allegedly did not

pay for the work that plaintiff performed. There is no hint in the record that plaintiff defrauded

defendant or that the Settlement Agreement resulted from “oppression.” The record contains no

evidence documenting the circumstances surrounding the settlement, so there simply is no basis

for a charge of bad faith. Just as the man in Heaps waived his right to challenge the facts supporting

a dubious bastardy claim, defendant’s decision to settle here was “conclusive and binding between

the parties.” Heaps, 95 Ill. at 590. The fact that defendant now identifies purported technical

defects with the mechanic’s lien does not mean that the Settlement Agreement lacked

consideration.

¶ 28 Plaintiff requests an award of contractual attorney fees incurred in the defense of this

appeal. Defendant does not respond to that request in her brief. At oral argument, defendant’s

counsel acknowledged that, if we affirm the judgment, we have the discretion to remand the matter

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for “determination of further attorney’s fees.” The Settlement Agreement includes language

entitling plaintiff to “any and all attorneys’ fees necessarily incurred to enforce the terms of this

Agreement.” We remand the matter for the trial court to determine the amount of contractual

attorney fees that defendant owes to plaintiff in connection with this appeal.

¶ 29 III. CONCLUSION

¶ 30 The judgment of the circuit court of Kane County is affirmed, and the matter is remanded

for a determination of the contractual attorney fees that defendant owes to plaintiff in connection

with this appeal.

¶ 31 Affirmed and remanded.

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No. 2-21-0331

Decision Under Review: Appeal from the Circuit Court of Kane County, No. 20-CH-304; the Hon. Kevin T. Busch, Judge, presiding.

Attorneys Stuart A. Petersen, of Ruddy & Petersen Law Group, LLC, of for Aurora, for appellant. Appellant:

Attorneys Tait J. Lundgren, of Foster, Buick, Conklin & Lundgren, LLC, for of Sycamore, for appellee. Appellee:

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