Opinion
2-21-0081
04-14-2022
PATRICIA J. WALKER, Plaintiff-Appellee, v. QUALITY CRAFT, INC., a/k/a QCI Restoration; and GARY SKOTT, Defendants-Appellants.
This order was filed under Supreme Court Rule 23(b) and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).
Appeal from the Circuit Court of Kane County. No. 14-L-289 Honorable Sandra T. Parga, Judge, Presiding.
JUSTICE BRENNAN delivered the judgment of the court. Justice JORGENSEN concurred in the judgment.
ORDER
BRENNAN JUSTICE
¶ 1 Held: The trial court's findings that defendants violated the Consumer Fraud and Deceptive Business Practices Act were in error. The finding that defendants' alleged forgery was cognizable under the Act was erroneous because the allegation embraced no more than a breach of contract. The court's finding that defendants violated the Act by bribing inspectors with gift cards was against the manifest weight of the evidence. The court's finding that defendants misrepresented that a "door expert" had approved its work was against the manifest weight of the evidence. Accordingly, the court's award of attorney's fees under the act was also in error. Reversed.
¶ 2 Defendants, Quality Craft, Inc. (QCI) and Gary Skott, former President of QCI, appeal from the trial court's judgment that defendants violated the Illinois Consumer Fraud and Deceptive Business Practices Act (Act) in the course of performance under a fire restoration contract with plaintiff, Patricia J. Walker. The court found that defendants had violated the Act by (1) forging Walker's name onto an insurance proceeds check and depositing the funds into QCI's own account, (2) purchasing gift cards using insurance proceeds to bribe building inspectors and prevent Walker from receiving accurate inspection results, and (3) misrepresenting that a "door expert" had approved work completed by QCI. For the reasons that follow, we reverse.
¶ 3 I. BACKGROUND
¶ 4 Walker hired defendants to restore her home after a July 2012 fire. The parties entered into a contract in which Walker assigned the proceeds of her homeowner's insurance to QCI. QCI began work on Walker's home in February 2013 and filed a mechanic's lien the same month. Upset with the progress and quality of the work, Walker prevented QCI from finishing the job and directed her insurance carrier to cease sending proceed checks to QCI.
¶ 5 Walker filed a complaint against QCI in June 2014 alleging (1) breach of contract, (2) violation of the Act, and (3) constructive fraud. The complaint also sought to quiet title to her home, requesting that the trial court rule QCI's mechanic's lien unenforceable. Walker later filed an amended complaint after QCI sold its assets to a competitor and was renamed. The amended complaint included both "Old QCI" and "New QCI" and added Gary Skott, president of QCI during the Walker project, as defendants.
¶ 6 Walker requested compensatory damages to be proven at trial and $1 million in punitive damages. The gravamen of the complaint was that QCI breached its contract with Walker by failing to complete all the work, as outlined the parties' scope of work addendum, in a workmanlike manner and in a timely fashion; by using inferior materials; and by refusing to correct or complete defective work. Moreover, QCI allegedly violated the Act by misrepresenting the quality of its work, how quickly the work would be completed, the qualifications of its workers, and that the insurance proceeds would be insufficient to complete all the work she wanted, as well as by "tricking" Walker into accepting inferior materials and workmanship. Walker's constructive fraud claim added that she relied on QCI's misrepresentations when she entered into the contract.
¶ 7 QCI filed counterclaims, none of which are at issue in this appeal.
¶ 8 A. The Trial
¶ 9 The case went to trial in September 2019. The trial court ruled on the claims under the Act while a jury considered the other claims. We recount the evidence and testimony pertinent to this appeal, which concerns only three specific instances of conduct that the trial court ruled violated the Act. Conduct forming the basis of the parties' breach of contract claims are not at issue.
¶ 10 1. The Contract
¶ 11 The contract was admitted and provided, in relevant part, as follows:
"Owner hereby assigns all insurance proceeds to QCi and hereby directs insurer to include QCi's name on all drafts of the insurer in payment of said claim. Owner further authorizes QCi to endorse on its behalf all drafts of the insurer in payment for the work. Owner agrees that the cost of such repairs, additions, and extras not covered by insurance shall be paid by owner to QCI before work begins. Owner hereby directs mortgagee to deliver all proceeds received by mortgagee from insurer directly to QCi. Owner hereby agrees to promptly execute all claim forms, disbursement authorizations, and directions for disbursements as shall be reasonably required by QCi.
***
Owner agrees that a copy of this Agreement may be sent to owner's insurer and mortgagee and shall be deemed a binding authorization for payment and delivery to insurer and mortgagee of payment to QCi.
***
Payment terms: ***. [Jobs] [o]ver $10,000 - Progress payments to be determined by Qci." (Emphasis added.)
In addition, a letter from QCI to Walker outlining Walker's payment schedule, dated December 14, 2012, was admitted as Plaintiff's Exhibit No. 24. According to the letter, Walker's insurer agreed to pay $221,718.18 for her home repairs. The payment schedule was as follows: Walker would provide a $10,000 deposit upfront; pay $35,730.06 once building permits were issued; and make three additional payments of $45,730.06 once specified work was completed. The fourth payment was to be due at "substantial completion," defined as "the issuance of certificate of occupancy by the County of Cook." Once those payments were made and Walker signed a Certificate of Substantial Completion, Walker's insurer would release the remaining proceeds, after which Walker would pay the remaining balance for costs not covered by her insurance.
¶ 12 2. Walker's Testimony
¶ 13 Preliminarily, we note that the beginning of Walker's testimony is not in the record. The report of proceedings suggests that Walker's testimony began on the morning of September 23, 2019, without a court reporter present and resumed in the afternoon with a court reporter. Counsel's direct examination suggests that the earlier testimony was limited to introducing the contract between Walker and QCI, and neither party suggests that the absence of this testimony is relevant. Accordingly, we do not presume that the absence of that portion of the trial record creates any conflict pursuant to Foutch v. O'Bryant, 99 Ill.2d 389, 394 (1984).
¶ 14 Walker testified as follows. The contract called for QCI to repair Walker's home to its pre-fire condition using the proceeds of her insurance claim. QCI agreed to, and did, provide Walker a document outlining the scope of work to be completed, as well as documents supplementing the scope of work. The total amount QCI sought to be paid for this work was approximately $240,000. Walker's insurer paid her $182,000 for the repairs.
While Walker's testimony regarding the amount her insurer agreed to pay differs from the amount reflected in QCI's payment schedule letter, that discrepancy is not relevant here.
¶ 15 Plaintiff's Exhibit No. 22, a "Home Repair: Know Your Consumer Rights" brochure, was admitted. Walker testified that she and QCI signed the acknowledgement form on the brochure and that she relied on it in entering into the contract with QCI. Counsel followed up:
"Q. Okay. And can you read for me the Paragraph 9 on the second page?
A. 'Do not sign a certificate of completion of final payment until the work is done to your satisfaction.'
Q. Just so it's clear on the record, it says, 'Do not sign a certificate of completion or make final payment until the work is done to your satisfaction'?
A. That's correct.
Q. So you understood that QCI was telling you to follow these guidelines, right?
A. Absolutely.
Q. And did you do what these guidelines told you to do?
A. I did."
¶ 16 a. The Fourth Proceeds Check
¶ 17 Walker testified that she made the first two payments on schedule, stating, "I paid them the second payment in good faith, even though they did not finish everything that they were supposed to do to get that second payment." Counsel followed up:
"Q. So you made a second payment. Did you make a third payment?
A. I made a third payment also in good faith, even though -- and I had written a letter, I pay you in good faith, even though you did not complete what you were supposed to do for the second payment, and I pay you in good faith for the third, assuming both the third and the second would be done, yes.
Q. What about the fourth payment?
A. The fourth payment I withheld. I was forced to withhold it. How else am I going to get them to finish my house? Per Lisa Madigan's instructions I withheld the last payment.
Q. Okay. So did you withhold that last payment because you believed that QCI was not performing its obligations under the contract?
A. Absolutely."
¶ 18 Walker testified that she sent an e-mail dated October 8, 2013, to her insurance company, and a document displaying that email was admitted as Plaintiff's Exhibit 28. The email was addressed to John Olson, Walker's insurance adjuster. The e-mail read:
"Hi John,
Do not send any more checks/money to Qci.
Under no circumstances should any more money be paid to them." Walker said she sent the email because QCI had not performed the work as expected up to that point. Counsel continued:
"Q. And what happened in response to this email?
A. They sent a check written to me for $55,000, an additional $55,000. They wrote the check to me only, payable to me only, but they sent it to QCI. QCI took that check. They were supposed to deliver it to me, remember. The insurance agent said that and wrote that to QCI. They did not deliver it to me. Instead they signed, forged my name and cashed the check.
Q. Did they ever offer to return the money to you?
A. No. I had to write a police report for forgery and deception.
Q. I'm sorry, you said the amount of the check was $55,000?
A. 55, 000 something."
Plaintiff's Exhibit No. 53 was admitted. It contained photocopies of three checks made out to QCI, from Walker's account, in the amount of $45,730.06 and bearing what appears to be Walker's signature on the front. The checks are dated February 8, 2013; May 30, 2013; and June 11, 2013. The exhibit also contained checks made out to different vendors, who Walker explained performed work that QCI did not complete.
¶ 19 Plaintiff's Exhibit No. 8 was admitted next. Counsel directed Walker's attention to the last page of the document, which contained a photocopy of a check made out to Walker, from her insurer, in the amount of $55,912.52 and dated September 20, 2013:
"Q. And do you recognize that document?
A. Yes, sir, I do.
Q. Okay. First of all, is it true that those again are just copies of cashed checks for this project?
A. Right, from QCI, yes.
***
Q. So describe for us what's on the last page of this exhibit.
A. This is a check that we talked about earlier that was made out just to me from my insurance company, my name only, for $55,912.52.
Q. Did you sign this check?
A. No. Somebody forged my name.
Q. Does it say QCI on there on the signature area?
A. It says Patricia Walker. Quality Craft, yes. It says Quality Craft."
On cross examination, counsel for defendants asked Walker about the check bearing her allegedly forged signature:
"Q. Yes. Do you have that check in front of you?
A. I do, yes.
Q. Now, you previously testified to this check and you had accused QCI of forging your name on the check. Do you remember that?
A. Correct.
Q. But isn't it true that the contract you signed with QCI authorized QCI to endorse, on its behalf, all drafts of the insurer and payment for work?
A. For work done satisfactorily. On this particular check, it was after I talked to my insurance agent and told him of the problems.
Q. Miss Walker, if you could just please answer the question.
A. Okay. I'm sorry. Say it again.
Q. That's okay. Isn't it true that the contract you signed with QCI authorized QCI to endorse, on its behalf, all drafts of the insurer and payment for the work?
A. Yes, but in both our names. This one was not in both our names.
Q. Miss Walker, I'd like to direct your attention to Plaintiff's Exhibit 8 where the check was endorsed.
A. Yes.
Q. Can you please read how the check was endorsed for the Jury?
A. Patricia Walker, and then something I can't really read. But typed under that is Quality Craft."
On redirect, counsel for Walker again asked about QCI's endorsement of the fourth proceeds check:
"Q. At the time that QCI signed that check or forged your name to that check, had you told QCI that you were not going to pay them anymore money?
A. I told them that I wasn't going to pay them any money until they had done the work, finished the job as expected in the scope with good workmanship.
Q. So do you believe that at the time they signed the check, they knew that you were withholding money from them?
A. Correct.
Q. And you, in fact, told your insurer not to send QCI anymore money?
A. Correct."
¶ 20 b. The Gift Cards
¶ 21 Walker's counsel asked her about a single-page document she received from QCI listing various charges:
"Q. Thank you. I'm going to show you a document that we have marked Plaintiff's Exhibit 13. Do you recognize this document?
A. Yes, I do.
Q. What is this document?
A. It's another printout from QCI.
Q. This is a printout of costs?
A. Costs of QCI, right.
Q. That QCI indicated that it paid out on your project?
A. That is correct.
Q. Okay. Did you review this document?
A. I did.
Q. And when did you review it?
A. I reviewed it when everything was done and I asked for the paperwork to see what the costs were.
Q. Okay. So you reviewed it when you received it, right?
A. Correct.
Q. And were there any items in this document which gave you concern about the project?
A. Well yes. You have right here gift certificates for Chicago? Also parking fee Chicago, lunches on my insurance costs?
Q. So this document shows that they bought a gift card for Chicago for over $100, correct?
A. Yes. It says -- it doesn't say how many, it just says gift cards.
Q. Did you ever approve QCI -
A. Oh, no.
Q. -- giving a gift card to the Chicago building inspector?
A. No."
The court admitted Plaintiff's Exhibit No. 13 without objection. Plaintiff's Exhibit No. 13 depicts what appears to be a photocopy of a list of charges. One of the lines indicates a charge on November 21, 2012, in excess of $100. The charge is described as "GIFT CARDS FOR CHICAGO," the supplier is listed as "SCOTT BECK," and a note indicates "SCOTT BECK PAID OUT OF POCKET." Nothing on the document indicates any connection to plaintiff or her home restoration project. Moreover, the document lists various other charges, including two for "LUNCH" and seven for "PARKING FEE," none of which are referenced in the trial court's order.
¶ 22 c. The "Door Expert"
¶ 23 Walker further testified that, on numerous occasions, she emailed QCI employees to explain that they needed to reinstall the door to her powder room because it swung in the wrong direction:
"Q. Okay. What other items concerned you about the manner in which QCI was performing the renovation?
A. Well I have a bathroom, a powder room where you cannot close the door because it hits a sink, and the superintendent, Mike Sobanski again told the plumber to put in the sink anyways, even though the plumber had said if I put the sink in you're not going to be able to close the door. But that is after I had told him several times the door swings out, not into the powder room. They disregarded my comments.
Q. So with regard to that, can you use that bathroom now?
A. No. Well it depends on how much your girth is. I'm sorry. No, there's no door. You could use it with no privacy.
Q. So you can't close the door when you go in there?
A. No. Even if the door's open, there's only 14 inches between the handle and the sink.
Q. And I'm sorry, where is that powder room located?
A. The powder room is in the addition, right off the kitchen, in-law kitchen.
Q. Do you call that the in-law suite?
A. I do.
Q. So is that area of your home designed to possibly be used for an in-law or somebody else, possibly a tenant to reside in that section?
A. Right. That's where my grandmother used to live. She built that addition.
Q. Because does that section have its own kitchen?
A. Yes, its own kitchen, two bathrooms and two bedrooms.
Q. Okay. How many bathrooms?
A. Two.
Q. Where is the second bathroom?
A. Upstairs.
Q. Okay. But you cannot use the lower level bathroom off the kitchen?
A. The powder room you're talking about, no, not with privacy.
Q. What else? Is there anything else about that room that's a problem?
A. Right. Yeah, they never put the medicine cabinet in. In fact, you can still see soot that wasn't cleaned up where the medicine cabinet goes, and the lights above the medicine cabinet don't line up with the sink. They replaced a window with window grille or muntin I think it's called. They didn't stain that, plus it's broken.
Q. The medicine cabinet. You said they didn't put a medicine cabinet in. So what's the condition of where a medicine cabinet should be?
A. It's just a cut-out in the wall where it used to be.
Q. So there's a hole the size of what a medicine cabinet should be, but there's no medicine cabinet?
A. Right. And there's still soot. You can see soot drip.
Q. Okay. Did you draw all these things to QCI's attention?
A. I did.
Q. Whose attention did you bring them to?
A. Mike Sobanski.
Q. Okay. Do you know whether Mr. Skott ever saw those things?
A. Mr. Skott was in the house, and I know he had knowledge of it. I don't recall if he actually walked in the bathroom.
Q. Would it be fair to say that you advised Mr. Skott of those deficiencies?
A. Right.
Q. And did he ever agree to repair those?
A. No.
Q. Or to complete the work?
A. No.
Q. Do you know why?
A. I don't know why."
Plaintiff's Exhibit Nos. 86 and 87, depicting the powder room, were admitted.
¶ 24 3. Skott's Testimony
¶ 25 Skott testified that he was the President of QCI at the time of Walker's restoration project. QCI did not finish the job because Walker would not let them. Among other things, Defendant's Exhibit No. 5 was admitted. Skott testified that the exhibit was a printout of a communications log for Walker's file. The log was for internal use and was maintained on a QCI server.
¶ 26 Walker's counsel asked Skott about Plaintiff's Exhibit No. 13, the printout showing a gift card purchase:
¶ 27 "BY MR. KUHN:
Q. You had to apply for the permit within a reasonable period of time, correct?
A. I guess, yes.
Q. All right. You were here yesterday and today and you heard Miss Walker testify. And I believe this document was entered into evidence, the one that refers to the gift card that was purchased for the building inspector, correct?
A. I heard her say that, yes.
Q. Do you deny that that happened?
A. I have no clue. Not typical.
Q. It's not typical?
A. Ever.
***
Q. When we were talking about, I think, the time to apply for the permit. Was it a policy for QCI to buy gift cards for building inspectors?
A. No.
***
Q. Do you deny that that document that QCI gave to Patty Walker stating that a gift card was purchased is correct? Do you deny that it's correct?
A. It doesn't sound like it's correct to me.
Q. But you don't know.
A. I don't know.
Q. If it's correct, that was not a proper thing to put on her job, correct?
A. I don't think it's correct. But if it is, I agree, uhm-uhm. It had to be an accounting error is what I feel.
***
Q. You don't know that.
A. No.
Q. You're just speculating, correct?
A. Correct.
¶ 28 Walker's counsel also asked Skott about an entry dated July 22, 2013, on Defendant's Exhibit No. 5, the internal communications log. The entry read, "Called the inspector his is not going and is just going to pass us. Vdipresio 847.470.5013":
"Q. I want you to go down. Skip the next one that says submit a check. What does the next one say?
A. Called the inspector. He is not going and is just going to pass us. V. DePressio (phonetic) 847. So he sent an engineer on his behalf to do the inspection.
Q. Where does it say what you just said?
A. It says called the inspector. He is not going and is just going to pass us. V. DePressio. And what they will do a lot of times is they will -- because they are independent,
they don't work for the city, or sometimes they do. I don't know this case, who works for who. They will have subcontractors working for the city to do all inspections.
Q. Really? That's really what you think? Do you understand V. DePressio, and his or her phone number after that, you think that means that he sent somebody else?
A. It could be."
¶ 29 4. Walker's Second Amended Complaint
¶ 30 Prior to the final day of trial proceedings, Walker filed a second amended complaint which reflected that Skott was added as a defendant and alleged violations of the Act and fraud by Skott. "New QCI" was also removed as a defendant. The count seeking to quiet title was removed.
Skott testified that QCI had placed a mechanic's lien on Walker's property in February 2013, the lien was in effect for two years, and it had expired by operation of law in approximately 2015.
¶ 31 B. Jury Verdict
¶ 32 The parties submitted several verdict form questions to the jury. See 735 ILCS 5/2-1108 (West 2018) ("The jury may be required by the court*** to find specially upon any material question or questions of fact submitted to the jury in writing."). In response to these questions, the jury found that (1) QCI performed its obligations under the contract, (2) Walker breached the contract, and (3) QCI did not suffer damages.
¶ 33 The jury found in favor of QCI on Walker's breach-of-contract claim, in favor of Skott on Walker's fraud claim, and in favor of Walker on QCI's counterclaim. Accordingly, the jury found neither party liable for damages.
¶ 34 In November 2019, Skott filed a motion for a judgment on the claim against him under the Act, while Walker filed a cross-motion for judgment on the claims against both Skott and QCI under the Act. The trial court rendered its decision on June 2, 2020.
¶ 35 C. Bench Finding
¶ 36 The trial court denied Skott's motion for judgment on the claim under the Act but granted Walker's motion for the same, awarding $55,912.52 plus attorney's fees. The court made the following factual findings:
"1. That, as found by the jury, the parties had valid contract upon which both parties relied.
2. That as part of that contract the Defendant(s) were authorized to obtain payments from the insurance company and to deposit certain payments directly into their account.
3. That at some point the relationship deteriorated and the Plaintiff asked Defendant to no longer accept or deposit additional funds directly into their accounts.
4. That after that direction the Defendant obtained an additional check, forged the name of the Plaintiff, and deposited that check into their account.
5. That during the course of this relationship QCI purchased certain gift cards with funds obtained from and utilizing insurance proceeds.
6. That gift cards are not an authorized purchase as part of the agreement between the parties. [Citation.]
7. That the purpose and use of those gift cards, according to the evidence, was to provide an "incentive" to inspectors regarding the work done at the Plaintiff's residence.
8. This Court finds that there could have been no possible legitimate use of those gift cards.
9. That after the relationship between the parties had broken down the Plaintiff requested that the powder room door be repaired.
10. That the Defendant, or his agents, replied that the door installation had been cleared by the' door expert.'
The court then made its legal findings:
"1. The endorsing of the check referenced in Exhibit 8 [citation] of the transcript was deceptive act or practice as contemplated by the [Act.]
2. That the deposited funds were placed into the Defendant's bank account for their use.
3. That the use of gift cards to attempt to secure favorable work from the building inspectors was deceptive act or practice as contemplated by the [Act].
4. That the use of these cards was to prevent the Plaintiff from having an independent inspection and causing the Plaintiff to rely only on Defendant's representations that the work was acceptable, which were false.
5. That theses [sic] actions of the Defendant were intended by the Defendant to have the Plaintiff rely on said representations.
6. That the Defendant responded to the Plaintiff's requests regarding the powder room door by representing that the "door expert" had accepted the work.
7. That this representation was obviously false and that the Defendant intended that the Plaintiff rely on these representations.
8. That the Defendants received benefit from these false representations and deceptive acts by taking and depositing the funds into his banking accounts."
Skott filed a motion to reconsider, which the trial court denied. Defendants timely appealed.
¶ 37 II. ANALYSIS
¶ 38 Defendants argue that each of the trial court's three findings underlying its liability decision-that QCI (1) forged Walker's signature on the fourth proceeds check, (2) purchased gift cards to bribe inspectors, and (3) misrepresented that a "door expert" had approved its work on the powder room door-are against the manifest weight of the evidence. It further contends that the trial court's award of attorney's fees was an abuse of discretion.
¶ 39 The Act prohibits "[u]nfair methods of competition and unfair or deceptive acts or practices" in the course of trade or commerce, "including but not limited to the use or employment of any deception, fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon the concealment, suppression or omission of such material fact." 815 ILCS 505/2 (West 2012). The Act authorizes a cause of action for any person who suffers actual damage. Id. § 505/10a(a). To prevail, a plaintiff must prove (1) the defendant committed an unfair or deceptive act or practice, (2) the defendant intended that the plaintiff rely on the deception, (3) the deception occurred in the course of trade or commerce, (4) the plaintiff suffered actual damage, and (5) the deception proximately caused the damage. Avery v. State Farm Mutual Automobile Insurance Co., 216 Ill.2d 100, 180 (2005). ¶ 40 To determine whether conduct is unfair within the meaning of the Act, courts consider: "(1) whether the practice offends public policy; (2) whether it is oppressive; and (3) whether it causes consumers substantial injury." Dubey v. Public Storage, Inc., 395 Ill.App.3d 342, 354 (2009); see also Robinson v. Toyota Motor Credit Corp., 201 Ill.2d 403, 417-18 (2002) (noting that conduct may also be unfair if it is immoral, unethical, or unscrupulous). Conduct may be unfair without meeting all three criteria. Robinson, 201 Ill.2d at 418. Rather, the degree to which it meets each criterion is key. See id. Unfairness is determined on a case-by-case basis. Dubey, 395 Ill.App.3d at 354. "To be oppressive, the conduct must leave the consumer with little alternative but to submit." Fogt v. 1-800-Pack-Rat, LLC, 2017 IL App (1st) 150383, ¶ 66.
¶ 41 The trial court's factual findings in a bench trial under the Act are reviewed under the manifest weight standard. Kirkruff v. Wisegarver, 297 Ill.App.3d 826, 839 (1998); see also Avery, 216 Ill.2d at 179 ("In general, a trial court's decision as to whether these elements have been proven in any case is reviewed under the manifest weight of the evidence standard.") (citing id). "A judgment is against the manifest weight of the evidence only if the opposite conclusion is apparent or when findings appear to be arbitrary, unreasonable, or not based on the evidence presented at trial." Fox v. Heimann, 375 Ill.App.3d 35, 46 (2007). But whether conduct constitutes an unfair or deceptive act is a matter of statutory interpretation, which we review de novo. Avery, 216 Ill.2d at 179; see also Pack v. Maslikiewicz, 2019 IL App (1st) 182447, ¶ 114 (2019) (reviewing de novo whether the Act applied to a specific category of transaction).
¶ 42 A. QCI's Endorsement of the Fourth Insurance Proceeds Check
¶ 43 The trial court erred when it found that endorsing the fourth insurance proceeds check was a deceptive act or practice under the Act. The undisputed evidence at trial showed that Walker authorized QCI to endorse proceeds checks bearing her name "in payment for the work." A subsequent letter from QCI to Walker explained that the fourth proceeds check would be due upon "substantial completion" defined as the "issuance of certificate of occupancy by the County of Cook." A certificate of occupancy was issued by Cook County. The trial court found from this evidence that QCI "forged" Walker's signature. It is unclear whether the trial court used this term in a colloquial or a legal sense, which is significant because the parties' contract specifically authorizes QCI to "endorse on [owner's] behalf all drafts of the insurer in payment for the work." Nevertheless, whether or not QCI "forged" Walker's name on the fourth proceeds check calls for interpretation of the contract and, thus, de novo review. Assuming for the sake of analysis that QCI endorsed Walker's name without contractual authorization (as use of the term "forgery" implies the trial court found), Walker failed to show that this conduct is consumer fraud.
¶ 44 If the contract, properly analyzed, required QCI to complete more work than it had completed before it became authorized to endorse the fourth proceeds check, QCI would be in breach of contract. An allegation that a breach of contract rises to a violation of the Act, however, requires an additional allegation that such a practice is part of a pattern of the defendant's commercial activities. Exchange National Bank v. Farm Bureau Life Insurance Co. of Michigan, 108 Ill.App.3d 212, 216 (1982); see also Avery, 216 Ill.2d at 169 ("A breach of contractual promise, without more, is not actionable under the Consumer Fraud Act.") (citing id); Bankier v. First Federal Savings & Loan Ass'n of Champaign, 225 Ill.App.3d 864, 875 (1992) ("[T]he Act is intended to reach practices of the type which affect consumers generally and is not available as an additional remedy to address a purely private wrong.").
¶ 45 There is no evidence in the record that QCI's alleged forgery affected consumers generally or that it was part of a pattern of QCI's commercial activities. Rather, the alleged forgery here amounts to a purely private wrong and is not cognizable as an unfair or deceptive practice under the Act. Thus, the trial court erred when it found that QCI's alleged forgery violated the Act.
¶ 46 Walker contends that Avery and Gehrett v. Chrysler Corp., 379 Ill.App.3d 162 (2008), support her position that QCI's conduct is cognizable under the Act. We disagree. Walker neither alleged that QCI engaged in a uniform practice common to all its customers nor a scheme to defraud. See Avery, 216 Ill.2d at 110, 178 (considering, without deciding, whether uniform practice of specifying use of aftermarket parts to repair policyholders' cars, without disclosing the "categorical inferiority" of those parts, fell within the Act); Gehrett, 379 Ill.App.3d at 176 (holding that alleged scheme to defraud by misrepresenting features of vehicle leased to plaintiff was a deceptive act and not merely a breach of contract).
¶ 47 Alternatively, we would hold that the trial court's finding that QCI "forged" Walker's signature was against the manifest weight of the evidence. The contract authorized QCI to endorse proceeds checks with Walker's signature. Walker testified that she instructed her insurance adjuster, in an October 8, 2013, email, not to send the fourth proceeds check to QCI and that she told QCI before it endorsed the check that she was withholding payment. The trial court determined that QCI forged Walker's signature based on this testimony and Walker's conclusory allegation of forgery. However, Walker provided no foundation for her testimony that she communicated her intent to QCI prior to QCI endorsing the check. She did not say whom she spoke to or when the conversation occurred. Nor did Walker introduce documentary evidence that she communicated her intent to QCI prior to QCI endorsing the check. Significantly, this testimony is undermined by evidence that the date on the disputed check was September 20, 2013, whereas the date of Walker's e-mail instructing her insurance adjuster to withhold payment was October 8, 2013. Moreover, the trial court's finding that QCI forged the check is inconsistent with the jury's finding that QCI did not breach the contract. While a jury's findings are not binding on the court in a simultaneous bench trial, see Werderman v. Liberty Ventures, LLC, 368 Ill.App.3d 78, 83-84 (2006), that the jury found that QCI did not breach the contract buttresses our conclusion. Accordingly, the trial court's finding was arbitrary and unreasonable.
¶ 48 B. QCI's Alleged Bribery of Building Inspectors With Gift Cards
¶ 49 The trial court next found that defendants violated the Act by purchasing gift cards using Walker's funds to bribe building inspectors, the purpose of which was to deceive Walker as to the quality and completeness of QCI's work. Walker argues that this finding was supported by (1) Plaintiff's Exhibit 13, (2) Walker's testimony about that exhibit, (3) Plaintiff's Exhibit 5, and (4) Skott's testimony about both exhibits. We conclude that the trial court's finding was arbitrary and unreasonable; thus, it was against the manifest weight of the evidence.
¶ 50 Walker testified that she received a photocopy depicting a list of charges (Plaintiff's Exhibit 13), none of which she authorized. One of those charges was for gift cards. Walker also introduced an internal communications log from QCI (Plaintiff's Exhibit 5) which contained the following entry: "Called the inspector his is not going and is just going to pass us. Vdipresio 847.470.5013." Skott testified, based on his experience, that it appeared as though the inspector sent an engineer to conduct the inspection on his behalf. Regarding the list of charges, Skott also testified that it did not seem correct and speculated that it must have been an accounting error. He also testified that it was neither a policy nor typical for QCI to purchase gift cards for building inspectors. We further note that the list of charges, on its face, did not contain a clear link to Walker or her project.
¶ 51 The trial court inferred from the above evidence that QCI purchased gift cards with Walker's funds and used those gift cards to bribe inspectors. But there was no testimony as to where, for whom, or with whose funds the gift cards were purchased. In fact, the line item for gift cards further includes the entry "SCOTT BECK PAID OUT OF POCKET," which rebuts an inference that Walker's funds were used. Nor was there testimony about what was done with the gift cards. Moreover, the only testimony regarding the communications log was Skott's belief that the inspector sent a subordinate to conduct the inspection. And no evidence was presented that a building inspector actually gave Walker's home a passing grade without performing an inspection. Thus, the trial court's finding that QCI purchased gift cards using Walker's funds to bribe building inspectors was against the manifest weight of the evidence.
¶ 52 C. QCI's Purported Claim That a "Door Expert" Approved Its Work
¶ 53 Defendants argue that "[n]o evidence or testimony reflected any statement made to Walker with regard to any expert-workmanship of the powder room door related to a refusal to fix the issues with the door." Defendants further contend that the trial court's finding is belied by evidence that QCI responded to Walker's requests to fix the powder room door by including that item on a final punch list for general repair, at no additional cost to Walker, and Skott's testimony that QCI would have repaired the door had Walker allowed them to finish the job. Moreover, they argue that the trial court's finding that defendants intended for Walker to rely on the alleged misrepresentation cannot be reconciled with Walker's allegation that she wanted the powder room door repaired because it swung in the wrong direction and would not close all the way.
¶ 54 Remarkably, Walker does not contest that there was no evidence that Skott or QCI represented to her that a "door expert" had made any statements regarding QCI's work. Upon our review of the record, we cannot identify a single reference to a "door expert," despite the trial court's use of that term in quotations. Further, no evidence was introduced at trial that QCI represented that a "door expert" had evaluated its work. Accordingly, the trial court's finding was against the manifest weight of the evidence in that it was not based on the evidence at all.
¶ 55 We also agree with defendants that the trial court's finding cannot be reconciled with Walker's allegations. Had the alleged misrepresentation that a "door expert" approved the work actually been made, it would be illogical to find that QCI intended for Walker to rely on it because her complaint was that QCI disregarded her instructions regarding the powder room door, which reflected a personal preference.
¶ 56 D. Attorney's fees
¶ 57 Because the trial court erred in finding that defendants violated the Act in all respects, we necessarily conclude that its award of attorney's fees was improper. See 815 ILCS 505/10a(c) (West 2012) (authorizing an award of attorney's fees "to the prevailing party").
¶ 58 Finally, we reject Walker's argument that we can affirm the trial court's order because there is evidence of other violations of the Act. The trial court made no other factual findings that could support a finding that defendants violated the Act, thus the argument has no merit.
¶ 59 III. CONCLUSION
¶ 60 For the reasons stated, we reverse the judgment of the circuit court of Kane County.
¶ 61 Reversed.
¶ 62 JUSTICE McLAREN, specially concurring:
¶ 63 I specially concur because I wish to distance myself from the following analysis:
"But whether conduct constitutes an unfair or deceptive act is a matter of statutory interpretation, which we review de novo. Avery, 216 Ill.2d at 179; see also Pack v. Maslikiewicz, 2019 IL App (1st) 182447, ¶ 114 (2019) (reviewing de novo whether the Act applied to a specific category of transaction)." Supra ¶ 41.
¶ 64 I submit that the issue is not whether the category is included in the act, but whether the incident is included in the category. Therefore, I believe that the proper standard of review, depending on the record, is against the manifest weight of the evidence, or clearly erroneous as a mixed question of law and fact. See Charter Properties, Inc. v. Rockford Mut. Ins. Co., 2018 IL App (2d) 170637, ¶ 47. A mixed question of law and fact is one "involving] an examination of the legal effect of a given set of facts." City of Belvidere v. Illinois State Labor Relations Board, 181 Ill.2d 191, 205 (1998). "Stated another way, a mixed question is one in which the historical facts are admitted or established, the rule of law is undisputed, and the issue is whether the facts satisfy the statutory standard, or * * * whether the rule of law as applied to the established facts is or is not violated." (Internal quotation marks and citations omitted.) AFM Messenger Service, Inc. v. Department of Employment Security, 198 Ill.2d 380, 391-92 (2001).