Steenes v. Mac Property Management, LLC

2014 IL App (1st) 120719, 16 N.E.3d 243
Appellate Court of Illinois·Decided July 23, 2014·No. 1-12-0719·Unpublished·Cited by 7 cases

Opinion

2014 IL App (1st) 120719

No. 1-12-0719

THIRD DIVISION

JULY 23, 2014

IN THE

APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT

ALTHERA STEENES, ) Appeal from the ) Circuit Court of

Plaintiff-Appellant, ) Cook County.

)

v. ) No. 10 M1 101010 )

MAC PROPERTY MANAGEMENT, LLC, and ) 5405-5407 S.WOODLAWN AVE., LLC, ) Honorable ) Rita M. Novak,

Defendants-Appellees. ) Judge Presiding.

JUSTICE PUCINSKI delivered the judgment of the court, with opinion.

Presiding Justice Hyman and Justice Mason concurred in the judgment and opinion.

OPINION

¶1 Plaintiff, Althera Steenes, a former tenant of a building managed by defendant, MAC Property Management, LLC (MAC), and owned by defendant, 5405-5407 S. Woodlawn Ave., LLC, (Woodlawn), filed this action seeking redress for defendants' alleged violations of the City of Chicago Residential Landlord and Tenant Ordinance (RLTO) (Chicago Municipal Code § 5- 12-010 et seq. (amended Mar. 31, 2004)). The dispute relates to defendants' collection and treatment of a nonrefundable "move in" fee which, plaintiff contends, must be considered a security deposit or prepaid rent under the RLTO. Plaintiff appeals from an order granting defendants' motion to dismiss, with prejudice, under section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2010)) as to certain counts of her amended complaint. We affirm.

¶2 In January 2010, plaintiff filed her initial five-count complaint against defendants in the municipal division of the circuit court of Cook County (municipal division) alleging causes of action for: (1) violations of section 5-12-080 of the RLTO; (2) breach of fiduciary duty; (3) failure to maintain; (4) breach of implied warranty of habitability; and (5) negligence. In response to defendants' motion to dismiss, plaintiff sought leave to file an amended complaint, which was granted.

¶3 Thereafter, plaintiff's first-amended class action complaint (amended complaint) was filed on April 7, 2010. Pursuant to plaintiff's motion to transfer and, based on the newly asserted class claims, the case was transferred to the chancery division of the circuit court of Cook County.

¶4 The amended complaint sets forth the following allegations. Plaintiff entered into a written one-year lease (lease) with defendants for apartment 1A of a 25-unit building located at 5405 S. Woodlawn Avenue in Chicago (the building) on March 25, 2008. The building was not owner occupied. The lease period was to run from March 29, 2008, to March 28, 2009, with a monthly rent of $715. The lease included a paragraph which stated: "Lessee has deposited with Lessor the security deposit *** to be retained by Lessor to ensure that Lessee shall fully perform each and every obligation provided in the lease." However, the lease did not provide an amount for the security deposit. Plaintiff does not allege she paid a security deposit. An addendum to the lease also signed by plaintiff on March 25, 2008, gave plaintiff a concession for rent covering April and May 2008, in the total amount of $1,400 (concession addendum) and became void if the lease was not fulfilled. Plaintiff moved out of the building before the lease terminated in January 2009.

¶5 During the application process, plaintiff received a document entitled, "Welcome to MAC Property Management" (welcome statement) and provided "Move In Information." The welcome statement listed nonrefundable fees, including an application fee of $50 and a "Move-in Fee" of $350 (move-in fee), which was to be paid by March 20, 2008, five days before plaintiff signed the lease. Plaintiff timely paid the move-in fee. The welcome statement listed plaintiff's move-in date as April 1, 2008, and stated plaintiff's first rent payment would not be due until June 1 based on the concession addendum. The welcome statement indicated that plaintiff's rental of the apartment was dependent on documentation of her income and approval of her application.

¶6 As to the move-in fee, plaintiff contended she did not receive consideration from defendants in exchange for the move-in fee; the move-in fee was "a fictitious or illusory fee for the purpose of enriching Defendants at the tenant's expense" and "was a disguised security deposit or prepaid rent" and subject to the RLTO provisions regulating such items. As to the class, plaintiff alleged that beginning in 2007, MAC began imposing a move-in fee for all units under its management within the city of Chicago (alleged to be more than 3,000 units) where the lease contained no security deposit.

¶7 The lease, concession addendum, and welcome statement were attached to the amended complaint as exhibits.

¶8 The amended complaint included six causes of action.1 Counts I through III were brought on behalf of a class against MAC only. In count I, plaintiff alleged MAC: commingled and held the move-in fee for more than 6 months without paying interest; failed to return the

1 Plaintiff misnumbered certain counts of her amended complaint. We refer to the counts in correct numerical order.

move-in fee within 45 days of termination of the tenancy; and failed to notify plaintiff of deductions within 30 days in violation of sections 5-2-080(c) and (d) of the RLTO, which govern security deposits. Chicago Municipal Code § 5-2-080(c), (d) (amended July 28, 2010). Count II was pled "in the alternative to count I" and alleged MAC's conduct, as to the move-in fee, was deceptive and unfair for failing to reveal the move-in fee was actually a security deposit or unpaid rent in order to avoid the provisions of the RLTO and, therefore, violated the Illinois Consumer Fraud Act and Deceptive Business Practices Act (the Act) (815 ILCS 505/2 (West 2008)). In count III, plaintiff contended MAC, by disguising plaintiff's security deposit or prepaid rent as a move-in fee, caused her to waive her rights under the RLTO as to security deposits or prepaid rents and, thus, the lease violated section 5-12-140 of the RLTO (Chicago Municipal Code § 5-12-140 (amended Nov. 6, 1991)). Count IV, V, and VI were individual counts brought against both defendants. In count V, plaintiff alleged a breach of implied warranty of habitability. In counts IV and VI, plaintiff sought damages for an injury she suffered because defendants did not properly install the kitchen cabinets in her apartment.

¶9 Defendants filed their answers to the individual counts IV and VI of the amended complaint and moved to dismiss the remaining counts pursuant to section 2-615, and to strike plaintiff's class allegations. In their motion to dismiss, defendants argued, in part, the move-in fee was neither a security deposit nor prepaid rent and, therefore, plaintiff failed to sufficiently allege violations of the RLTO and the Act.

¶ 10 Plaintiff then filed a motion for leave to file a second-amended complaint and attached the proposed pleading (proposed second-amended complaint). Plaintiff, in her motion, stated generally, the proposed second-amended complaint would "cure the purported defects" raised in the motion to dismiss. The proposed second-amended complaint included allegations as to a

second class of plaintiffs and added an action for restitution against both defendants on behalf of a class based on the move-in fee. The proposed second-amended complaint also added three paragraphs, which were each labeled: "HYPOTHETICAL SET OF FACTS," in an attempt to support plaintiff's claim that the move-in fee was actually a security deposit.

¶ 11 On September 29, 2010, in a written order, the circuit court denied plaintiff's motion for leave to file the proposed second-amended complaint "for the reasons stated in open court." The record does not include a report of the proceedings from that date. In the same order, the circuit court set a briefing schedule on defendants' motion to dismiss.

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Steenes v. Mac Property Management, LLC, 2014 IL App (1st) 120719, 16 N.E.3d 243 (Ill. Ct. App. 2014).

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