author: JUSTICE COLWELL

text:
    TERRY REGAN et al., Plaintiffs-Appellants, v. CARL IVANELLI, SR., et al., Defendants-Appellees.
    Second District
    No. 2 — 92—1096
    Opinion filed July 1, 1993.

      Donald E. Schlyer, of Schlyer & Associates, P.C., of Lemont (William P. Ryan, of counsel), for appellants.
    Anthony F. Mannina, of Wheaton, for appellees.
   JUSTICE COLWELL

delivered the opinion of the court:

Plaintiffs, Terry Regan and Dennis Egan, appeal from the circuit court of Du Page County’s orders dismissing their action for fraudulent conveyance and entering judgment against plaintiffs and their counsel for a total of $3,909.75 in fees and costs pursuant to Illinois Supreme Court Rule 137 (134 Ill. 2d R. 137). Plaintiffs contend that: (1) the trial court improperly dismissed plaintiffs’ complaint under section 2 — 619 of the Code of Civil Procedure (Code) (Ill. Rev. Stat. 1991, ch. 110, par. 2 — 619)); (2) plaintiffs’ complaint set forth a cause of action for fraudulent conveyance under both fraud in fact and fraud in law principles; and (3) the trial court’s award of attorney fees to defendants was an abuse of discretion. We reverse.

Plaintiffs filed the present complaint to avoid a fraudulent transfer of beneficial interest in a land trust and for other relief on January 6, 1992. The following facts, which plaintiffs contend give rise to this claim, all took place prior to the original adjudication between these parties which was affirmed by this court in Regan v. Garfield Ridge Trust & Savings (1991), 220 Ill. App. 3d 1078.

Plaintiffs executed a contract with a land trust on March 6, 1986, for the purchase of a 34-acre parcel of land in Lemont, Illinois. The land trust beneficiaries, all defendants in this action, included Carl Ivanelli, Jr., James Ivanelli, Gerald Ivanelli, Jeanine Ivanelli, and Janice Ivanelli-Altice. The beneficiaries entered into the contract with plaintiffs for a purchase price of $400,000. Pursuant to this contract, the plaintiffs were to make a partial payment of $100,000 on or before September 6, 1986, and the beneficiaries were to transfer to the plaintiffs four one-acre lots. Due to an existing lien encumbering the subject property, the beneficiaries were unable to transfer the title free and clear of all encumbrances, and the parties entered into an extension for the performance of the contract. Plaintiffs deposited $25,000 with beneficiaries on September 8, 1986, and the parties later' entered into an escrow agreement. The lien was released on October 21, 1986, after which plaintiffs tendered $100,000 to defendants.

Plaintiffs did not make the $150,000 payment due on or before March 6, 1987, and beneficiaries did not send plaintiffs a title commitment for the lots to be conveyed at that time. There was conflicting testimony over whether the beneficiaries even demanded payment since the plaintiffs were plagued with structural problems on the property. Starting in July 1987, the beneficiaries’ father, Carl Ivanelli, Sr. (Carl, Sr.), began negotiating with plaintiffs in order to facilitate progression of the sale so that the parties could close in September. In September 1987, Carl, Sr., proposed a plan in which he and a friend would receive 30% of Bluff Point Development, plaintiffs’ development company, in return for providing financing. Plaintiffs rejected this proposal.

The September 6, 1987, closing date was set and continued twice. The beneficiaries then anticipatorily breached the contract on September 18, 1987, by attempting to terminate said contract. The beneficiaries assigned their beneficial interest in the trust on the same day to Carl, Sr. After September 1987, Carl, Sr., made further efforts to develop the subject property and held himself out as Bluff Point Development’s owner. On May 23, 1988, Carl, Sr., assigned his interest in the land trust back to his children, who resumed as beneficiaries.

Plaintiffs filed a three-count complaint on March 10, 1988, against the beneficiaries, Carl, Sr., and Garfield Ridge Trust & Savings Bank as trustee. In count I, plaintiffs sought specific performance of a contract for the purchase of certain real estate from the land trust. In count II, they alleged that Carl, Sr., tortiously interfered with the contract, and in count III, they alleged that the children who were land trust beneficiaries when the contract was executed conspired with Carl, Sr., to interfere tortiously with the contract. In an order dated June 19, 1990, the trial court granted plaintiffs specific performance as alleged in count I. A jury entered a verdict against Carl, Sr., on the other two counts, awarding plaintiffs $400,000 on count II and $200,000 on count III. The trial court entered judgment notwithstanding the verdict in favor of Carl, Sr., on count III. Plaintiffs appealed, contending the entry of judgment notwithstanding the verdict was error and that they are entitled to a new trial on count III because the jury’s finding that only one defendant was involved in the alleged conspiracy was inconsistent. The remaining jury verdict on count II in favor of plaintiffs and the trial court’s judgment for specific performance were affirmed by this court in Regan v. Garfield Ridge Trust & Savings Bank (1991), 220 Ill. App. 3d 1078. The plaintiffs, pursuant to the decree of specific performance, purchased the parcel of real estate for a sum in excess of $300,000.

Plaintiffs then filed the present complaint on January 6, 1992, to avoid a fraudulent transfer of beneficial interest. The complaint alleged that Carl, Sr., gratuitously transferred the beneficial interest in the land trust to his children on May 23, 1988, after the commencement of plaintiffs’ action for tortious interference with contract was filed on March 10, 1988. Such transfer left Carl, Sr., without sufficient assets or income to satisfy the subsequent judgment entered against him. Defendants filed a motion to dismiss plaintiffs’ complaint, pursuant to section 2 — 619 of the Code, which alleged (1) that plaintiffs’ fraudulent conveyance action was barred by the judgment entered in the action for breach of contract and tortious interference with contract; (2) that the appellate court ruled that the transfer of the beneficial interest by the Ivanelli children to their father, Carl, Sr., was a “matter of convenience” for negotiation purposes; (3) that the transfer of the beneficial interest back to the children was a return of the property to its original rightful owners and was not a transfer to defraud creditors; and (4) that the appellate court affirmed the findings of fact that the debtor, Carl, Sr., was an agent of the children and that he never acquired ownership of the trust property.

The trial court determined that the children transferred the beneficial interest in the property to Carl, Sr., and for purposes of defendants’ motion, it did not matter whether that transfer was for consideration. The trial court also determined there was a transfer of the property back to the children from Carl, Sr., for no consideration. On the basis of the undisputed facts presented, the trial court concluded there could not be a fraudulent transfer as intended under the Uniform Fraudulent Transfer Act (Ill. Rev. Stat. 1991, ch. 59, par. 101 et seg.) and thus there was no genuine issue of material fact.

Defendants filed a motion for attorney fees and costs pursuant to Supreme Court Rule 137 (134 Ill. 2d R. 137). Defendants argued that plaintiffs’ complaint, which alleged that the assignment of beneficial interest was a transfer of property owned by Carl, Sr., contradicted the fact that plaintiffs knew that the children, and not Carl, Sr., were the original owners of the property before it was transferred to Carl, Sr. Defendants further alleged the plaintiffs knowingly misrepresented the true facts to the court. The trial court granted defendants’ motion for fees and stated in its order that the plaintiffs’ complaint was “wholly unfounded in fact and law and that said complaint was not brought in good faith.” Plaintiffs filed a timely appeal.

We first address defendants’ oral motion presented at arguments before this court pertaining to their motion for fees and costs filed in the previous trial court action. Defendants attached to their motion and made a part thereof the statement of facts contained in plaintiffs’ appellate brief from the tortious interference action. Defendants stated that this document did not become a part of the court file even though it was part of the common-law record. Defendants’ motion requests that the portion of the brief referred to in their motion be made a part of the record in the instant case.

Defendants’ request relates to their claim that the plaintiffs made an admission by including in the statement of facts of their appellate brief that the Ivanelli children were the owners of the beneficial interest in the land trust and that the beneficial interest was initially transferred by the children to Carl, Sr. Plaintiffs’ complaint for fraudulent conveyance does not contain this fact. Defendants contend plaintiffs were trying to hide the fact that the children initially owned the beneficial interest so that the trial court in the instant action would not be fully informed.

A judicial admission is a clear, deliberate, unequivocal statement of a party regarding a concrete fact within that party’s particular knowledge. (Caponi v. Larry’s 66 (1992), 236 Ill. App. 3d 660, 671.) Plaintiffs’ previous appellate brief included the fact that the children initially owned the beneficial interest because it was relevant to the tortious interference claim. However, such fact need not have been stated in the present complaint since its inclusion was not necessary in order to state a basic claim for fraudulent conveyance. We therefore deny defendants’ motion since this statement is not necessary to plead a fraudulent conveyance claim and its inclusion in the record would not change our decision here.

Plaintiffs next contend that the trial court improperly dismissed plaintiffs’ complaint pursuant to section 2 — 619 of the Code, which states in pertinent part as follows:

“(a) Defendant may, within the time for pleading, file a motion for dismissal of the action or for other appropriate relief upon any of the following grounds ***.
* * *
(4) That the cause of action is barred by a prior judgment.” (Ill. Rev. Stat. 1991, ch. 110, par. 2 — 619.)

A motion to dismiss admits facts well-pleaded together with all reasonable inferences which can be gleaned from those facts, but does not admit conclusions of law or conclusions unsupported by allegations of specific facts on which such conclusions rest. (Munizza v. City of Chicago (1991), 222 Ill. App. 3d 50, 52.) A trial court should dismiss an action only if it is apparent that no set of facts can be proven that will allow plaintiff to recover. (Munizza, 222 Ill. App. 3d at 51.) A reviewing court must determine whether the allegations in the complaint, when read in the light most favorable to the plaintiff, are sufficient to set forth a cause of action upon which relief may be granted. Munizza, 222 Ill. App. 3d at 52.

Plaintiffs argue their complaint set forth a cause of action to set aside the fraudulent conveyance of the land trust under the Uniform Fraudulent Transfer Act (Act), which Illinois has adopted (see Ill. Rev. Stat. 1991, ch. 59, par. 101 et seq.). Plaintiffs allege that Carl, Sr., gratuitously assigned his beneficial interest in the trust to the children, that Carl, Sr., did not receive consideration for such conveyance, and that Carl, Sr., became insolvent as a result of this transfer, leaving him without sufficient property to discharge plaintiffs’ claim for tortious interference. Under the Act, the transfer of an interest in property may be set aside as fraudulent if the transfer tends to hinder or defeat the rights of a grant- or’s creditor. Illinois recognizes two categories of fraudulent conveyance — those transfers which are “fraud in fact” and those which are “fraud in law.” Section 5(a)(1) of the Act defines fraud in fact as follows:

“(a) A transfer made of obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:
(1) with actual intent to hinder, delay, or defraud any creditor of the debtor.” (Ill. Rev. Stat. 1991, ch. 59, par 105(a)(1).)

Such “fraud in fact” conveyances require a specific intent to “disturb, delay, hinder or defraud” a creditor. Gendron v. Chicago & North Western Transportation Co. (1990), 139 Ill. 2d 422, 437.

A presumption of fraud occurs where there is a voluntary transfer for no consideration and there is an existing or contemplated debt for payment of which the transferor did not retain sufficient assets. Such a transaction is considered “fraud in law,” as contained in section 6(a) of the Act:

“(a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation.” (Ill. Rev. Stat. 1991, ch. 59, par. 106(a).)

Thus, “[i]n order to establish that a conveyance is fraudulent in law, three elements must be present: (1) there must be a transfer made for no or inadequate consideration; (2) there must be existing or contemplated indebtedness against the transferor; and (3) it must appear that the transferor did not retain sufficient property to pay his indebtedness.” (Gendron, 139 Ill. 2d at 438.) Since fraud is presumed in these circumstances, the transferor’s actual intent is irrelevant. (Anderson v. Ferris (1984), 128 Ill. App. 3d 149, 153.) Once the three elements showing fraud in law have been proved, the presumption of fraud becomes conclusive unless rebutted. First Security Bank v. Bawoll (1983), 120 Ill. App. 3d 787, 792.

Section 7(d) of the Act states that “a transfer is not made until the debtor has acquired rights in the asset transferred.” (Ill. Rev. Stat. 1991, ch. 59, par. 107(d).) Section 2(b) defines an “[a]s-set” as “property of a debtor.” (Ill. Rev. Stat. 1991, ch. 59, par. 102(b).) Section 2(1) defines a “[transfer” as “disposing of or parting with an asset.” (Ill. Rev. Stat. 1991, ch. 59, par. 102(b).) Thus the only property which can be conveyed to defraud creditors is that in which the debtor has an interest.

The trial court found that the undisputed facts as presented could not sustain an action for fraudulent transfer under the Act. The facts as pleaded indicated that Carl, Sr., transferred the beneficial interest for no consideration, that Carl, Sr., contemplated an indebtedness to plaintiffs at the time of the transfer, and that Carl, Sr., did not retain sufficient funds to pay his indebtedness. Yet the trial court found in favor of defendants. Apparently, the trial court believed the undisputed facts here did not demonstrate an intent by the children irrevocably to relinquish control and dominion over the property when they transferred their interest to Carl, Sr. Since the children’s transfer to Carl, Sr., was not intended to be a gift, the court found the reassignment by the father was not a transfer of ownership interest as contemplated by the Uniform Fraudulent Transfer Act and thus the Act did not apply.

Plaintiffs argue that, since Carl, Sr., transferred his interest to the beneficiaries without consideration, both fraud in fact and fraud in law can be proved here. Plaintiffs rely on several cases in which the conveyance was made by the debtor for a wife or other family member and was thus presumed by the court to be a voluntary gift. (See Stoller v. Exchange National Bank (1990), 199 Ill. App. 3d 674; Bawoll, 120 Ill. App. 3d at 791; Gary-Wheaton Bank v. Meyer (1984), 130 Ill. App. 3d 87; Anderson v. Ferris (1984), 128 Ill. App. 3d 149.) In Stoller, the parents deeded property into a land trust with their son and daughter as beneficiaries and joint tenants in 1976. The debtor son lived on the property from 1975 until 1984. In 1979, the son borrowed $400,000 which was secured by a 100% assignment of the beneficial interest in the property. When the son later defaulted, the bank sued to recover on the notes. The son then conveyed his interest to a third party who then quitclaimed the son’s interest to his sister without consideration. The court concluded the transfer of the son’s interest in the property was a voluntary gift to the sister, that the son failed to retain assets to pay an existing debt, and thus the requirements for fraud in law were satisfied. Stoller, 199 Ill. App. 3d at 683.

Similarly, Carl, Sr., here conveyed property back to his children after the contemplated debt to plaintiffs became apparent. Carl, Sr.’s action in putting himself forward as the owner of the property before he transferred his interest exhibited an exercise of dominion and control. Carl, Sr., also instructed the trustee to terminate the contract with the plaintiffs. Since this case comes to us on a judgment granting a motion to dismiss, all well-pleaded facts must be taken as true. (Rodgers v. St. Mary’s Hospital (1992), 149 Ill. 2d 302, 310.) These facts, standing alone, suggest that Carl, Sr., was acting as the beneficial owner who fraudulently conveyed his interest in order to avoid the contemplated debt to plaintiffs.

Plaintiffs have not cited any cases that found a fraudulent conveyance where the debtor received a beneficial interest from the beneficiaries and then transferred the interest back to the same beneficiaries after a debt was contemplated. However, the factual situation here would not preclude a. properly filed complaint containing such facts from ever stating a viable cause of action under fraudulent conveyance principles. As this court previously stated, “there is substantial evidence that Carl, Sr., was acting in his own interest” and the evidence showed he repudiated the contract immediately after taking the assignments from the beneficiaries “with the intent of causing a breach.” (Regan, 220 Ill. App. 3d at 1088.) Although Carl, Sr., only had the beneficial interest in the property for eight months, the evidence in the previous trial action indicated Carl, Sr., exercised “dominion and power” by attempting to develop the subject property and holding himself out as the development company’s owner. Carl, Sr.’s actions indicate that when he transferred his beneficial interest in the property, he acted as a beneficial owner contemplating a debt. Carl, Sr., himself testified during the previous trial action that, when he transferred his interest back to the children, he did so knowing that “there was going to be trouble.” We find the facts here, taken as true, have stated a cause of action for fraudulent conveyance.

Since we find plaintiffs have properly pleaded a claim for fraudulent conveyance, we must now determine whether, as defendants argue, plaintiffs’ complaint is barred by the doctrine of res judicata. Under this doctrine, the final judgment of a court is conclusive of the rights of the parties and their privies and absolutely bars subsequent actions involving the same claims or demands by the same parties. (Catlett v. Novak (1987), 116 Ill. 2d 63, 67.) The bar extends not only to the issues that were actually decided in the former proceeding but also to any other matters made relevant by the subject matter which might have been raised or decided. (Best Coin-Op, Inc. v. Paul F. Ilg Supply Co. (1989), 189 Ill. App. 3d 638, 649-50.) Even though a single group of operative facts may give rise to the assertion of different types of relief, a single cause of action may still exist. (Meyers v. Kissner (1991), 217 Ill. App. 3d 136, 144.) Thus, an action in equity can bar a subsequent suit in law, or vice versa. Meyers, 217 Ill. App. 3d at 144.

Illinois courts have used either the “same evidence” test or the “transactional” approach to determine whether there is an identity of the causes of actions. (Best Coin-Op, 189 Ill. App. 3d at 652-54.) Under the same evidence test, res judicata will apply if the evidence needed to sustain the second cause of action would have sustained the first cause of action or the same facts were essential to maintain both actions. (Rodgers, 149 Ill. 2d at 311-12; Best Coin-Op, 189 Ill. App. 3d at 652.) The “transactional” approach considers whether both suits arose from the same transaction, incident, or factual situation. Under this test, the assertion of different kinds of theories of relief still constitutes a single cause of action if a single group of operative facts give rise to the assertion of relief. Rodgers, 149 Ill. 2d at 312; Best Coin-Op, 189 Ill. App. 3d at 654.

Where the same factual allegations form the basis for two allegedly different causes of action, the fact that a party proceeds on different theories or seeks different relief does not prevent the operation of res judicata. (Best Coin-Op, 189 Ill. App. 3d at 52.) Therefore, in determining whether the prior judgment in the tortious interference case bars plaintiffs’ action here, it is necessary to compare the nature, purpose, and allegations of the present cause of action with the earlier proceedings while considering that two causes of action are not necessarily the same merely because they arise out of the same set of facts. See Best Coin-Op, 189 Ill. App. 3d at 652.

In order to prevail on the tortious interference claim, plaintiffs had to prove the following elements: (1) the existence of a valid, enforceable contract between plaintiffs and the children; (2) Carl, Sr.’s awareness of this contractual relationship; (3) Carl, Sr.’s intentional and unjustified inducement of a contractual breach; (4) a subsequent breach by the other party as a result of Carl, Sr.’s wrongful acts, and (5) damages. (Regan, 220 Ill. App. 3d at 1088.) The law of tortious interference with contract is intended to protect the interests of the parties to a contract. To establish fraudulent conveyance in law, three elements must be present: (1) a transfer made for no or inadequate consideration; (2) existing or contemplated indebtedness against the transferor; and (3) the transferor did not retain sufficient property to pay his indebtedness. (Gendron, 139 Ill. 2d at 438.) This Act is intended to protect the interest of creditors. See generally Ill. Rev. Stat. 1991, ch. 59, par. 101 et seq.

We conclude that plaintiffs’ claim is not barred by res judicata. Plaintiffs' complaint against defendants is based on different operative facts than their underlying prior claim against defendant for tortious interference with contract. Although much of the same evidence would be required to support either plaintiffs’ tortious interference claim or fraudulent conveyance claim, we cannot say that the evidence necessary to sustain the first complaint would sustain the second. Clearly, fraudulent conveyance by Carl, Sr., was not among the findings of fact in the trial court. Indeed, plaintiffs could not have filed a fraudulent conveyance claim until judgment was entered in the underlying prior claim since they would only then know that Carl, Sr., did not have adequate funds to pay the judgment against him.

Further, plaintiffs would have a claim of tortious interference of contract regardless of whether Carl, Sr., conveyed his beneficial interest in the land trust back to the children or not. In addition, plaintiffs brought their tortious interference claim against Carl, Sr., as a party to the contract at issue. However, plaintiffs proceeded on the cause of action here as judgment creditors of Carl, Sr. Therefore the nature, purpose and allegations of the present cause of action differ from those in the previous proceedings.

Where, as here, two suits are grounded upon different duties owed to plaintiffs, and the same evidence would not necessarily sustain both claims, despite the involvement of the same parties, we cannot say that all that has been substituted in the second suit is a different theory of recovery. We find the plaintiffs’ claim, taking all well-pleaded facts to be true, sufficiently states a cause of action for fraudulent conveyance and is not barred by res judicata. Therefore, we reverse the trial court’s dismissal of this action.

Plaintiffs also contend that the trial court’s award of sanctions under Rule 137 was an abuse of discretion. Defendants here filed a petition for sanctions and fees which alleged that plaintiffs’ complaint contained false statements and was not brought in good faith because the plaintiffs withheld material facts from the court. Defendants alleged plaintiffs were attempting to trick the court into believing the present action merely involved a transfer of property from Carl, Sr., to the children, since the complaint for fraudulent conveyance did not state the fact that the children initially owned the property when the contract with plaintiffs was executed.

The trial court granted defendants’ petition and stated:

“Counsel, I think there is no law (precedential cases) because your assertions are so totally preposterous that no one would be, no one would have the gall to bring an action of this type.
* * *
This is in no way, shape, or form a conveyance in defraud of your clients’ rights. What happened was they contracted to get a piece of property. The property was conveyed from the children to the father, ultimately back to the children, and your clients paid for that property after the decree of specific performance by Judge Henninger.
What your clients are trying to do is have the property and the money they paid for it, and that in no way, shape, or form comes within the meaning of the statute dealing with fraudulent conveyances.”

Illinois Supreme Court Rule 137 provides in pertinent part:

“The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good-faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.” (134 Ill. 2d R. 137.)

Thus, Rule 137 imposes upon both client and counsel the duty to make a reasonable inquiry into the facts to support a legal claim or defense before pleadings and other legal papers are filed with the court. (Chicago Title & Trust Co. v. Anderson (1988), 177 Ill. App. 3d 615, 623.) The purpose of the rule is not to penalize the litigants simply because they were not successful in the litigation, but rather to prevent abuse of the judicial process by penalizing the litigant who brings vexatious or harassing actions that are based on false statements or are without legal foundation. (Singer v. Brookman (1991), 217 Ill. App. 3d 870, 879.) The rule requires an attorney objectively to review the information submitted by the client, to determine if it factually supports the client’s claim. (Chicago Title & Trust, 177 Ill. App. 3d at 625.) If such review reveals important discrepancies, inconsistencies, or gaps in the information provided, the attorney must investigate further prior to filing the relevant legal paper with the court. Chicago Title & Trust, 177 Ill. App. 3d at 625.

Rule 137 may only be applied when the party seeking the sanctions has sustained his burden of proving that each of its requirements had been met. (Hazel Crest Federation of Teachers, Local 2077 v. Board of Education of School District 1521/2 (1990), 206 Ill. App. 3d 69, 80.) The allowance of fees and expenses under this provision is entrusted to the discretion of the trial court, and we will not disturb a trial court’s imposition of sanctions absent an abuse of discretion. Hazel Crest Federation of Teachers, 206 Ill. App. 3d at 80.

Since we find plaintiffs have properly stated a cause of action for fraudulent conveyance and such claim was not barred by res judicata, there is no basis for sanctions against plaintiffs, and we reverse the trial court’s decision on this issue.

For the foregoing reasons, we reverse the decision of the circuit court of Du Page County and remand the cause for further proceedings.

Reversed and remanded.

UNVERZAGT and WOODWARD, JJ., concur.


source: Caselaw Access Project

author: JUSTICE BOWMAN

license: Public Domain

text:
    GEORGE W. BRECKENRIDGE, JR., et al., Plaintiffs-Appellees and Cross-Appellants, v. CAMBRIDGE HOMES, INC., d/b/a Cambridge Properties, Defendant-Appellant and Cross-Appellee.
    Second District
    No. 2 — 92—1044
    Opinion filed July 1, 1993.

      Donald G. Mulack and Tracey E. Donner, both of Keck, Mahin & Cate, of Oakbrook Terrace, for appellant.
    Joseph T. Morrison, of Morrison & Morrison, P.C., of Waukegan, for appellees.
   JUSTICE BOWMAN

delivered the opinion of the court:

Plaintiffs, George and Tricia Breckenridge, filed the present lawsuit in the circuit court of Lake County against defendant, Cambridge Homes, Inc., for common-law fraud (count I), violations of section 2 of the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1989, ch. 1211/2, par. 262) (count II), and breach of implied warranty of habitability (count III) in the context of the plaintiffs’ purchase of a new residence from the defendant in December 1989. The case went to a jury trial, and a verdict was entered in favor of the plaintiffs on the breach of implied warranty count and against the plaintiffs on the common-law fraud count. The consumer fraud count was tried without a jury, and the court entered a judgment against the plaintiffs. On appeal, defendant asserts that (1) the plaintiffs waived their right to pursue a claim for breach of the implied warranty of habitability when they signed and initialed the contract provision containing a disclaimer of the implied warranty of habitability and therefore the trial court erred in failing to grant defendant’s motion for directed verdict on count III, and (2) the trial court erred in denying defendant’s post-trial motions for directed verdict and judgment notwithstanding the verdict on count III. On cross-appeal, the plaintiffs assert that the trial court erred in applying the elements of common-law fraud to the consumer fraud count, and that the finding of the trial court on that count was against the manifest weight of the evidence. We affirm in part and reverse in part.

In September 1989, the plaintiffs, George and Tricia Breckenridge, decided to purchase a new home from the defendant, Cambridge Homes, Inc. (Cambridge). George Breckenridge was a regional sales manager for several Japanese corporations, and his wife, Tricia, had been a chief lobbyist for the telecommunications industry as well as having owned two companies in the past. Plaintiffs had stopped and looked at model homes in the new Mill Creek Crossing subdivision in Gurnee being developed by the defendant. Plaintiffs were shown models by a salesman for the defendant named John Horowitz. On September 10, 1989, the plaintiffs viewed a home being built on lot 44 which was 70% to 75% completed. The plaintiffs decided to purchase this residence and gave the salesman a deposit of $1,000.

On September 17, 1989, John Horowitz prepared a standard home purchase agreement. Plaintiffs were asked to sign the contract and place their initials next to the bold-type language in paragraph 15, which was entitled “Limited Warranty.” Plaintiffs each testified that they read the -bold-type language of the contract, although neither plaintiff read the entire contract before initialing and signing. The bold type of the contract constituted about half of the “Limited Warranty” paragraph and most of the “Entire Agreement” paragraph, which was paragraph 19. The “Limited Warranty” paragraph contained the following language in bold type:

“15. LIMITED WARRANTY: *** NO WARRANTY, GUARANTEE, OR UNDER-TAKING WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO THE HOUSE AND CONSTRUCTION THEREOF, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE HOW WARRANTY, SHALL BIND OR OBLIGATE THE SELLER. ALL OTHER WARRANTIES, GUARANTEES AND UNDERTAKINGS ARE HEREBY EXPRESSLY DISCLAIMED. Specifically, but without limiting the generality of the fore-going, SELLER HEREBY EXPRESSLY DISCLAIMS THE IMPLIED WARRANTY OF HABITABILITY CREATED BY THE ILLINOIS CASE OF PETERSEN v. HUBSCHMAN CONSTRUCTION COMPANY, INC., AND ANY OTHER STATUTORY OR COMMON LAW IMPLIED WARRANTY OF HABITABILITY. THE CONSEQUENCE OF SUCH DISCLAIMER BY SELLER IS THAT SELLER’S SOLE AND EXCLUSIVE WARRANTY GIVEN TO PURCHASER IN CONNECTION WITH THIS AGREEMENT IS THE HOW WARRANTY. PURCHASER’S INITIALS ADJACENT TO THIS PARAGRAPH ARE INTENDED AS AND SHALL BE EVIDENCE OF PURCHASER’S ACKNOWLEDGEMENT OF SELLER’S DISCLAIMER OF SUCH IMPLIED WARRANTY OF HABITABILITY AND OF PURCHASER’S ACCEPTANCE OF THE HOW WARRANTY AS THE SOLE AND EXCLUSIVE WARRANTY OFFERED BY SELLER IN CONNECTION WITH THE SALE OF THE HOUSE.”

The “Entire Agreement” paragraph read as follows:

“19. ENTIRE AGREEMENT. This agreement and the matters expressly referred to herein constitute the entire Agreement between the Seller and Purchaser. NO REPRESENTATIONS, WARRANTIES, UNDERTAKINGS OR PROMISES, WHETHER ORAL, IMPLIED OR OTHERWISE, CAN BE MADE OR HAVE BEEN MADE BY EITHER SELLER, ITS AGENTS OR BROKERS, OR PURCHASER TO THE OTHER UNLESS EXPRESSLY STATED HEREIN OR UNLESS MUTUALLY AGREED TO IN WRITING BETWEEN SELLER AND PURCHASER. ALL AMENDMENTS, SUPPLEMENTS, OR RIDERS HERETO, IF ANY, SHALL BE IN WRITING EXECUTED BY BOTH PARTIES AND ATTACHED TO THIS AGREEMENT.”

Plaintiffs then placed their initials in the margin next to the disclaimer language indicating that they read the language and were accepting the HOW warranty. In addition, the “Limited Warranty” paragraph also contained the following language in small type: “Seller has delivered to Purchaser a booklet containing specimen copies of the insurance/warranty documents for the HOW Warranty and Purchaser hereby acknowledges receipt thereof and acceptance of the terms of said HOW Warranty.” At trial, Trida Breckenridge testified that the defendant’s salesman, John Horowitz, told plaintiffs “not to worry *** because the HOW warranty that [they] would get with the house would cover all defects or problems that [they] discovered in [their] house.” The plaintiffs also put down an additional $9,000 in earnest money at the time they signed the purchase agreement.

At trial, the defendant admitted that it has a policy of providing a specimen HOW warranty to prospective purchasers at the time of signing of the home purchase agreement. In this case, the defendant’s salesman did not provide the plaintiffs with the specimen HOW warranty before the purchase agreement was. executed. In addition, there was no evidence presented at trial that indicated that the plaintiffs requested a copy of the HOW warranty before signing the contract.

Although the defendant had the home scheduled for completion in mid-January 1990, the defendant agreed to accelerate the completion date on a rush basis to sometime in December 1989 at the plaintiffs’ request. A closing date was set for December 15,1989.

Prior to closing, defendant has-a policy of performing a procedure known as a “pre-walk inspection.” This inspection is done by the defendant’s service department one week prior to closing to see what needs to be done to get the house ready for closing. On December 8, 1989, Bruce Wilde, an employee of the defendant’s service department, examined the residence. However, Mr. Wilde did not conduct a typical prewalk inspection because the house was still being worked on.

On December 15, 1989, the home was not completed and ready for delivery to plaintiffs. Plaintiffs were given the option to close one week later to allow defendant to complete the house. Plaintiffs, against the advice of their attorney, decided to close on December 15, 1989, and take delivery subject to the unfinished work on the house. Their decision was based on the fact that they had movers scheduled to bring their belongings to the home that day. On the afternoon of December 15,1989, plaintiffs paid $367,370 for the property.

Due to delays caused by the holidays and plaintiffs’ travel schedules, it was not until January 27, 1990, that defendant’s employees were invited to the home to review a “punch list” prepared by plaintiffs of 198 finish items which plaintiffs wanted corrected. Representatives of the defendant spent three consecutive days in March 1990 at the plaintiffs’ home making repairs and addressing the items on the plaintiffs’ punch list. Following this work, defendant sent a new sales representative, Stephen Norris, to the plaintiffs’ house. After going through the punch list, plaintiffs and Norris agreed that only 37 items at that point were fixed properly. Between March 26, 1990, and early May 1990 defendant worked to finish certain repairs. On May 3, 1990, the plaintiffs filed the present lawsuit charging defendant with fraud and breach of implied warranty and thereafter refused to let defendant into their home to conduct any repairs. The evidence at trial revealed that the alleged defects included: windows which leaked, nail pops on multiple walls, water stains indicating a leaking roof on rafters in the attic, and random cracks in the basement floor, among others.

Count I of the complaint alleged common-law fraud; count II charged violation of the Consumer Fraud and Deceptive Business Practices Act; and count III alleged a breach of the implied warranty of habitability. Defendant filed its answer and counterclaim for defamation and interference with contract. On November 27, 1990, the trial court ordered the claim for damages for breach of implied warranty of habitability stayed pending arbitration by a neutral third-party dispute settler as required by the HOW warranty. On April 26, 1991, the arbitration was conducted at plaintiffs’ home. To that end, an impartial arbitrator, Gerald Hillman, was appointed by the National Academy of Conciliators to review, in the presence of the parties, plaintiffs’ punch list items. He decided whether the work performed by the defendant was within industry standards. Defendant agreed during that arbitration to complete the work on 34 items which it had earlier agreed to perform, and the arbitrator found that additional work was required on 53 other items.

As per the terms of the HOW warranty, in May 1991, the defendant accepted the decision of the arbitrator and agreed to perform all warranty work recommended by him. Plaintiffs refused to accept the decision of the arbitrator and refused to allow the defendant to fix the items recommended, as well as refusing to accept money in lieu of the repairs which was an option under the HOW warranty.

On August 21, 1991, plaintiffs filed a first amended complaint which repleaded count I, alleging common-law fraud. On April 28, 1992, plaintiffs filed a second amended complaint. On June 15, 1992, a jury was selected and the trial commenced. Eight witnesses were called by the plaintiffs, and eight additional witnesses were called by the defendant. Testimony at trial by plaintiffs’ witnesses indicated the repair of these items would involve major amounts of work. The testimony of plaintiffs’ witnesses and defendant’s witnesses was conflicting as to the cost of repairs and whether certain items should be repaired. However, no one disputed that the house was at least habitable in that the plaintiffs could live in it and it was not unsafe. Five witnesses were called on defendant’s counterclaim. On June 22, 1992, the jury returned a verdict in favor of the defendant on the common-law fraud count and in favor of the plaintiffs on the breach of implied warranty of habitability count. Judgment was entered for damages for plaintiffs in the amount of $58,519 on that verdict. Based on the same evidence, the court sitting without a jury found in favor of defendant on the Consumer Fraud and Deceptive Business Practices Act claim. The jury also returned a verdict in favor of the plaintiffs on defendant’s counterclaim.

Defendant filed a post-trial motion for a directed verdict and for judgment notwithstanding the verdict on the basis of all the evidence presented on the breach of implied warranty of habitability count pursuant to section 2 — 1202 of the Civil Practice Law (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 1202). Plaintiffs filed a post-trial motion requesting the trial court to reconsider its decision on the consumer fraud count. Both motions were denied. On August 28, 1992, defendant filed its timely notice of appeal related to count III only, and on September 4, 1992, plaintiffs filed their notice of cross-appeal.

The first issue on appeal is whether the trial court erred in failing to grant defendant’s motion for directed verdict on the breach of implied warranty of habitability count. The standard for a directed verdict was put forth in the seminal case of PedricJc v. Peoria & Eastern R.R. Co. (1967), 37 Ill. 2d 494, 510 (“verdicts ought to be directed and judgments n.o.v. entered only in those cases in which all of the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors movant that no contrary verdict based on that evidence could ever stand”). In that case, the court was called upon to resolve conflicting testimony as to whether railroad crossing lights were working as testified to by several different witnesses. Notwithstanding the conflict in testimony, the supreme court concluded that the presence of conflicting testimony does not necessarily preclude the entry of a directed verdict. The court indicated that it must be a factual dispute of “some substance” to prevent a directed verdict. Pedrick, 37 Ill. 2d at 505.

In the present case, the plaintiffs brought suit for breach of implied warranty of habitability. The defendant raised the affirmative defense that the plaintiffs knowingly waived their right to sue for breach of the implied warranty of habitability by signing the agreement and initialling the purchase agreement provisions in the margin. On appeal, the defendant contends that by so signing and initialling, the plaintiffs accepted the express HOW warranty in lieu of the implied warranty of habitability. The defendant argues that the trial court erred, as a matter of law, by failing to grant the defendant’s motion for directed verdict on the breach of implied warranty of habitability count. On the other hand, the plaintiffs contend that there was no voluntary and intentional waiver of the implied warranty of habitability because the plaintiffs signed the contract under a misrepresentation of material facts. Specifically, the plaintiffs argue that material facts were misrepresented to them since (1) they were not given a copy of the HOW warranty prior to signing the contract, and (2) John Horowitz made an alleged misrepresentation that the HOW warranty would cover all defects and problems in the house to induce them to sign the contract.

Our supreme court recognized the existence of an implied warranty of habitability which permits a purchaser to recover from the builder-seller for latent defects in a newly constructed home in Petersen v. Hubschman Construction Co. (1979), 76 Ill. 2d 31. The court also determined that a disclaimer provision could be given effect. To do so, the court determined that the disclaimer must be a conspicuous provision which fully discloses the consequences of its inclusion and that the agreement of the parties in fact included the disclaimer. (Petersen, 76 Ill. 2d at 43; Country Squire Homeowners Association v. Crest Hill Development Corp. (1986), 150 Ill. App. 3d 30.) Such a disclaimer must be strictly construed against the builder-vendor. (Petersen, 76 Ill. 2d at 43.) A waiver has been defined as the “intentional relinquishment of a known right.” (Schuster v. East St. Louis Jockey Club, Inc. (1976), 37 Ill. App. 3d 483, 487.) Waiver is not established where consent was given under a mistake or misapprehension of fact. (Hamilton v. Williams (1991), 214 Ill. App. 3d 230, 241.) Since the defendant is claiming waiver, it had the burden of proving at trial that the plaintiffs knew of their right to an implied warranty of habitability and that the plaintiffs knowingly waived that right. Ryder v. Bank of Hickory Hills (1991), 146 Ill. 2d 98, 105.

In the present case, the evidence showed that the plaintiffs are intelligent and experienced business people. We note that the plaintiffs testified that they read the portion of the “Limited Warranty” paragraph that stated that the seller expressly disclaimed the implied warranty of habitability and that the consequence of that disclaimer by the seller is that the seller’s sole warranty given to purchaser in connection with the agreement is the HOW warranty. Furthermore, the bold language asserted that “PURCHASER’S INITIALS ADJACENT TO THIS PARAGRAPH ARE INTENDED AS AND SHALL BE EVIDENCE OF PURCHASER’S ACKNOWLEDGEMENT OF SELLER’S DISCLAIMER OF SUCH IMPLIED WARRANTY OF HABITABILITY.” Such language was conspicuous, and the plaintiffs initialed the paragraph indicating that they had accepted the terms of the paragraph.

In addition, John Horowitz told the plaintiffs when they initialed the contract that their initials indicated that they understood that all other warranties other than the HOW warranty were disclaimed. The following colloquy occurred during George Breckenridge’s testimony:

“Q. Now, you recall that John asked you to put your initials in that column which would indicate that you read the language of that paragraph, isn’t that correct?
A. [George Breckenridge] Yes, that is correct.
Q. And you knew what you were doing at the time that you put your initials there, isn’t that so?
A. [George Breckenridge] Yes, I did.”

The following colloquy occurred during Trida Breckenridge’s testimony:

“Q. Now, looking at the original exhibit that you have on the rear side, John asked you to put your initials next to that language, did he not?
A. [Trida Breckenridge] He told us we had to put them there.
* * *
Q. Thank you, ma’am. Now, John told you that those initials were a disclaimer of thp warranties other than a HOW Warranty, isn’t that correct?
A. [Trida Breckenridge] Correct.”

The evidence thus showed that the disclaimer language was brought to their attention, that the consequences of agreement were made known to them, and that they knowingly waived their rights to pursue an action against defendant for any alleged breach of the implied warranty of habitability. Thus, it is evident that under Petersen an effective disclaimer of the implied warranty of habitability occurred when the plaintiffs entered into the purchase agreement. Petersen, 76 Ill. 2d at 43.

We note the plaintiffs’ argument that they were in misapprehension of the material facts of the HOW warranty because the defendant did not give them a copy of the HOW warranty prior to executing the purchase agreement. The failure to read a document before signing it is normally no excuse for a party who signs it. (State Bank v. Sorenson (1988), 167 Ill. App. 3d 674, 681.) A party who has had an opportunity to read a contract before signing, but signs before reading, cannot later plead lack of understanding. (Sorenson, 167 Ill. App. 3d at 681.) In Sorenson, the defendant sought to avoid her responsibility to pay off a note to a bank from which she had taken a loan. She argued that she had not known the terms of the transaction when she entered into it. The court found that such unawareness was inexcusable. (Sorenson, 167 Ill. App. 3d at 681.) The court observed that the face of the note provided numerically and in written form how much money she had to pay the bank. Furthermore, the defendant’s signature appeared directly below the terms on the document. Thus, the court concluded, if the defendant did not know the terms of the note, it was because she did not read the terms on the face of the note. Sorenson, 167 Ill. App. 3d at 681.

In the present case, the “Limited Warranty” paragraph itself stated that the seller had delivered to the purchaser a specimen copy of the HOW warranty and that the purchaser thereby acknowledged receipt thereof and accepted the terms of the HOW warranty. We note that there is no evidence in the record that the plaintiffs asked for the specimen copy of the HOW warranty. The small print in the “Limited Warranty” paragraph incorporated by reference the terms of the HOW warranty. The plaintiffs could have requested the specimen copy of the HOW warranty after reading the “Limited Warranty” paragraph that stated that the HOW warranty was the exclusive warranty offered by the seller in connection with the sale of the house. They did not do that. By signing the agreement, initialing the agreement, and discussing the consequences of the placement of their initials at that paragraph, the plaintiffs accepted the terms of said HOW warranty. Thus, plaintiffs cannot now claim that they were under a misapprehension about the HOW warranty.

We also note plaintiffs’ argument that John Horowitz made a misrepresentation that the HOW warranty would “cover all defects or problems that [they] discovered in [their] house.” To demonstrate that Horowitz’ statement was true, the defendant presented the testimony of the arbitrator, who made a recommendation as to which of the plaintiffs’ punch list items where covered by the HOW warranty. The arbitrator, Hillman, testified that he reviewed every item on plaintiffs’ punch list and applied the industry standard adhered to by the HOW warranty to each item. He reported that every complaint on the punch list was covered by the warranty in some fashion. However, Hillman testified, just because an item is covered by the warranty does not mean that the defendant need repair or replace it. Only those that do not meet the industry standard adhered to by the HOW warranty are supposed to be repaired by the defendant. Therefore, Hillman decided that 87 out of plaintiffs’ punch list of 198 items were in need of repair, although one may infer from his testimony that all 198 were covered by the HOW warranty. Thus, the evidence supported the statement that any unfinished item or problem which may arise in the plaintiffs’ home was covered by defendant under the HOW warranty. Had plaintiffs requested to see the HOW warranty before signing the agreement, they could have read the terms of the warranty and ascertained that an industry standard was to be applied. That could have alerted them to the fact that their own standards for the condition of the home would not be considered in the application of the HOW warranty. In conclusion, plaintiffs did not introduce evidence that Horowitz’ statement was false.

Plaintiffs did introduce testimony from experts as to the condition of different items in their home such as the condition of nail pops on the dry wall in the home, the condition of shingles on the roof, the condition of the basement floor, and the cost of repairing these items. This testimony also conflicted with some of defendant’s witnesses’ testimony as to the cost of repairs, the number of repairs necessary, and whether certain items needed repair. None of this testimony conflicted with Hillman’s statements that all the items on the punch list were covered by the HOW warranty. Thus, the evidence material to the issue of the falsity of Horowitz’ statement was not in conflict.

Defendant contends that the circumstances surrounding this disclaimer of the right to sue for implied warranty of habitability are analogous to the circumstances surrounding such a disclaimer in Country Squire. Plaintiffs distinguish Country Squire on the basis that the circumstances were different in that case from the present case: in that case, (1) there was no policy by the vendor to provide a copy of the HOW warranty to the buyers before the execution of the sales agreement, and (2) there was no misrepresentation by the vendor’s agent. In Country Squire, the court found, as a matter of law, that the disclaimer was a bar to the cause of action for breach of implied warranty of habitability. The plaintiff in that case argued that the trial court did not grant a motion for summary judgment or directed verdict on the basis that the disclaimer did not use the phrase “warranty of habitability” but used the phrase the “implied warranties of merchantability and fitness.” However the appellate court found the disclaimer to be in a conspicuous location, in large-size print, and in plain language, and thus was an agreement between the parties, satisfying the standard set out by Petersen. Country Squire, 150 Ill. App. 3d at 32.

Likewise, we determine that under the circumstances existing in the present case, the disclaimer is effective and bars the cause of action for breach of implied warranty of habitability. To address plaintiffs’ contentions about Country Squire, we do not believe that defendant should be penalized for having a policy of providing the HOW warranty prior to the execution of the sales agreement and not following through on it. If plaintiffs had read the contract that they were signing, they would have known that the HOW warranty was incorporated by reference, and they did have the opportunity to ask to see a copy of its terms. Furthermore, we determine that the evidence discussed above shows that Horowitz’ statement was not false. Thus, in light of the circumstances surrounding the signing of the purchase agreement, we have viewed the evidence regarding whether plaintiffs knowingly waived their right to sue for breach of implied warranty of habitability in its aspect most favorable to the plaintiffs. In doing so, we determine that the evidence so overwhelmingly favors the movant that no contrary verdict based on the evidence could stand. Thus, the trial court erred in not awarding a directed verdict to defendant pursuant to section 2 — 1202 of the Civil Practice Law. The disposition of the trial court on the issue of defendant’s alleged breach of implied warranty of habitability is reversed.

In light of our determination that the evidence showed that Horowitz’ statement was not false, we determine it is unnecessary for us to address plaintiffs’ argument that Cambridge is estopped from claiming the plaintiffs waived the implied warranty of habitability, since one of the elements of estoppel is misrepresentation and that element is not present in the facts of this case. (Vaughn v. Speaker (1988), 126 Ill. 2d 150, 162.) Furthermore, in light of our determination that the trial court erred in not directing the verdict for defendant, we need not address the issue whether it should have granted a judgment notwithstanding the verdict for defendant.

In their cross-appeal, plaintiffs contend that the trial court erred in applying the elements of common-law fraud to the consumer fraud count. Furthermore, plaintiffs contend that the finding of the trial court on the consumer fraud count was against the manifest weight of the evidence, that this court should reverse the trial court’s ruling on that count, and that the cause should be remanded to the trial court to determine damages on the consumer fraud count. The defendant argues that the trial court did not apply the wrong standard to the consumer fraud count, and even if it did apply the wrong standard, its decision should be sustained as its decision was not against the manifest weight of the evidence.

A claim for consumer fraud comes under the Consumer Fraud and Deceptive Business Practices Act (Act) (Ill. Rev. Stat. 1989, ch. 1211/2, par. 261 et seq.). Under section 2 of the Act, the plaintiff must show: (1) a deceptive act or practice; (2) an intent by the defendant that plaintiff rely on the act or practice; and (3) the deception occurred in the course of conduct involving trade or commerce. (Ill. Rev. Stat. 1989, ch. 1211/2, par. 262; Hoke v. Beck (1992), 224 Ill. App. 3d 674, 679.) The “intent” required by the Act is merely the defendant’s intent that the plaintiff in the action rely on the act that defendant performed, or information defendant gave to plaintiff, as opposed to any intent on the defendant’s part to deceive. (Hoke, 224 Ill. App. 3d at 679; Carl Sandburg Village Condominium Association No. 1 v. First Condominium Development Co. (1990), 197 Ill. App. 3d 948, 953.) The Act should be liberally construed to effect its purposes. (Hoke, 224 Ill. App. 3d at 679.) Plaintiff’s complaint under the Act need not prove a pattern or practice of deceptive acts; a single deceptive act is sufficient to support recovery under the Act. (Rubin v. Marshall Field & Co. (1992), 232 Ill. App. 3d 522, 532.) The legislature intended claims under the Act to be heard by a judge sitting without a jury. (Richard/Allen/Winter, Ltd. v. Waldorf (1987), 156 Ill. App. 3d 717, 724-25.) A reviewing court will not disturb a trial court’s finding unless the holding of the trial court is manifestly erroneous. Century 21 Castles by King, Ltd. v. First National Bank (1988), 170 Ill. App. 3d 544, 549.

On June 23, 1992, the trial court ruled on count II. We have reviewed the record and determine that the trial court erroneously applied an element of common-law fraud to the consumer fraud analysis. The pertinent statement by the trial court follows:

“[A]s a result of what I just said, the facts must support a claim that is brought under 1211/2 and it directed me to Maguire versus Holcomb in that regard, 169 Ill. App. 3d, 238. You may also look at 150 Ill. App. 3d, 597, and 139 [Ill.] App. 3d, 172. And the cause of action under 1211/2 must be as to a material fact; okay? And to be under the scope of this Act you must have an intentional misrepresentation, or misrepresentations to a prospective buyer; and, second, the seller must have knowledge of the false, misleading, or deceptive nature of the information conveyed.”

In that colloquy, the court discussed a claim brought under the consumer fraud statute (Ill. Rev. Stat. 1989, ch. 1211/2, par. 262), and it cited some of the cases in which that statute is applied. Then it went on to discuss the elements of consumer fraud and properly stated that the fact must be a material fact and that there must be an intentional misrepresentation or merely a misrepresentation. Then the court erroneously stated that the defendant must have knowledge of the deceptive nature of the information. This is not an element of consumer fraud and is an element of common-law fraud, since to prevail on a common-law fraud claim, the plaintiff must show the defendant intentionally made a false statement. (Zimmerman v. Northfield Real Estate, Inc. (1986), 156 Ill. App. 3d 154, 161.) Thus, the trial court utilized an improper standard in deciding the consumer fraud count.

This error by the trial court, nevertheless, is harmless error, as we determine that the result reached by the court was proper, since no deceptive act or practice existed on these facts. Plaintiffs argue that there are several examples of misrepresentations of facts by the defendant which qualify as deceptive acts under the Act. For instance, plaintiffs were told the home would be built with “expert workmanship” and “custom quality”; the home would have a quality similar to the models plaintiffs saw; plaintiffs were told that the defendant expected a “perfect” home to be delivered to plaintiffs; and the condition of the residence would be “perfect” upon delivery. We determine that such statements are to be reasonably construed as “puffing” and do not violate even the broad scope of the Act. See Zimmerman, 156 Ill. App. 3d at 163 (where multiple listing descriptions of a house as “magnificent” and “comfortable” do not qualify as fraudulent misrepresentations); Spiegel v. Sharp Electronics Corp. (1984), 125 Ill. App. 3d 897, 902 (where distributor’s statements that photocopier would make “picture perfect copies” and would “reduce error and paper waste” did not qualify as fraudulent misrepresentations).

Plaintiffs further argue that (1) the fact that they were not given a copy of the HOW warranty before the signing of the purchase agreement, (2) the fact that the prewalk inspection did not take place and they were not informed of this, and (3) the alleged misrepresentation by Horowitz are all examples of misrepresentations of fact. As discussed above, we believe that plaintiffs cannot enter into a written agreement which incorporated the HOW warranty by reference, not read the agreement they entered into, and now prevail on the fact that the defendant did not provide them with a copy of the HOW warranty. Furthermore, the plaintiffs do not make the argument or present evidence to support the fact that the execution of the prewalk inspection was material to their decision on whether to go through with the closing on the house. Lastly, we determined in the issue addressed above that the statement made by Horowitz was not a misrepresentation. Thus, we determine that no deceptive act took place. Thus, since one of the elements of consumer fraud is not present on these facts, we determine that the trial court’s ruling was not against the manifest weight of the evidence, and we sustain the trial court’s decision in favor of the defendant on the consumer fraud count.

The decision of the circuit court of Lake County is affirmed in part and reversed in part.

Affirmed in part; reversed in part.

INGLIS, P.J., and UNVERZAGT, J., concur.


author: PRESIDING JUSTICE MANNING

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. PAUL G. NELSON, Defendant-Appellant.
    First District (1st Division)
    No. 1 — 91—1199
    Opinion filed March 2, 1993.
    Rehearing denied June 24, 1993.
    Modified opinion filed June 30, 1993.

      Michael J. Pelletier and Todd Avery Shanker, both of State Appellate Defender’s Office, of Chicago, for appellant.
    Jack O’Malley, State’s Attorney, of Chicago (Renee Goldfarb, Kenneth McCurry, and Michael Latz, Assistant State’s Attorneys, of counsel), for the People.
   PRESIDING JUSTICE MANNING

delivered the opinion of the court:

Defendant Paul G. Nelson was charged by indictment number 90 — CR—5406 with felony murder of Michael Guzzetta, home invasion and residential burglary (Ill. Rev. Stat. 1989, ch. 38, pars. 9— 1(a)(1), 12 — 11(a)(2), 19 — 3). Following a bench trial defendant was convicted of murder and home invasion and sentenced to 25 years in the Illinois Department of Corrections on the murder count, and a concurrent six-year sentence on the home invasion count. On appeal defendant alleged that: (1) he was denied a fair trial where the court drew inferences about the effects of PCP on the decedent; (2) he was denied his constitutional right to confront witnesses where the trial court restricted his cross-examination of a State witness; and (3) the Illinois homicide statute is unconstitutional. For the reasons set forth below, we affirm the judgment of the trial court.

The following evidence was presented at trial.

Officer Shaffer testified that on November 26, 1989, he was employed as a Chicago police officer and assigned to the 16th district. He responded to a call of a disturbance and headed to 5658 West Leland Street. Once there, Shaffer was directed by two men standing in front of the building to the basement apartment, where the door was ajar. Shaffer testified that he saw the decedent’s bloody body inside the apartment lying nude on the floor. At that time, he spoke with defendant and defendant said that decedent was an intruder. Shaffer also stated that defendant acted nervous and anxious. Shaffer walked into the kitchen where he observed Collen Brueck crying. He stated that Brueck was injured in her head and face, but that he did not observe any injuries to defendant. Shaffer later arrested defendant.

Richard Provax testified for the State that at about 1:30 a.m. on November 25, 1989, he and defendant left a party after heavily drinking. Provax stated that defendant asked him to drive to Collen Brueck’s (defendant’s girl friend’s) home and he did so. Provax drove to her building and double parked his vehicle while defendant went inside the apartment. He stated that after a few minutes he heard a woman scream, parked the vehicle and went inside the apartment. Provax stated that as he entered the apartment, he saw defendant fighting with decedent while Brueck lay in bed. Provax testified that defendant hit Brueck, then continued fighting with decedent inside the kitchen. Provax stated that decedent begged defendant to stop hitting him; Provax then left the apartment and walked out to his vehicle.

Provax testified that he continued to hear noises and went back into the apartment, where he saw the decedent’s body lying on the floor in the kitchen. Provax stated that he observed defendant again hit Collen and return to the kitchen, where he punched and kicked the decedent. Provax stated that defendant asked him to help remove decedent’s body to Provax’s vehicle, but Provax refused to do so.

Provax returned to his car a second time, then reentered the apartment, where he saw defendant dragging decedent’s body toward the kitchen door. He stated that decedent was breathing at that time and that defendant did not hit or kick decedent. Defendant hit Collen and shouted names at her. Provax testified that he never heard defendant threaten to kill decedent on the three occasions that he entered the apartment.

The State questioned Provax about his statement given to police on November 26, 1989, in which he did not mention that a struggle or fight had occurred between defendant and decedent. Provax admitted that he had not mentioned that fact. However, on cross-examination Provax stated that he saw defendant and decedent fighting when he entered the apartment and that both men were standing. The State also produced Provax’s grand jury testimony in which he had not mentioned that the decedent and defendant were fighting.

Kirk Duncan, called as a State witness, testified that in early November 1989, he was at defendant’s mother’s home with Brueck when defendant walked inside the house. Duncan stated that defendant asked him whether he knew Guzzetta (the decedent), to which Duncan replied that decedent was once his roommate. Duncan testified that defendant then said that he did not like Guzzetta and that he would kill Guzzetta the next time that he saw him.

Michael Chambliss, deputy medical examiner for Cook County, testified that he performed an autopsy on decedent. Chambliss stated that decedent was 5 feet 7 inches tall and weighed 136 pounds. He testified that decedent died as a result of multiple blunt trauma injuries to the head. Chambliss further testified that decedent’s toxicology report indicated that he had a blood-alcohol level of .085 and a PCP blood level of 29 nanograms per milliliter. Chambliss opined that this was a low level of PCP in the blood stream. He stated that 100 nanograms would be a high PCP blood level. Chambliss stated that there were 640 nanograms per milliliter of PCP in decedent’s urine. He opined that PCP normally stays in the body from 7 to 16 hours, and that PCP in the urine does not affect a person as it would if it was in the blood. This is true because PCP in the urine does not affect any particular active centers in the body.

On cross-examination Chambliss stated that he knew about the effects of PCP. He stated that PCP is generally used as an animal tranquilizer, but that humans often ingest the drug. He explained that he had seen PCP cause death in humans. Although Chambliss testified that he was unsure if PCP was classified as a “volatile” drug, in response to a later question by defense counsel he stated that PCP caused mood changes, euphoria and depression. When defense counsel asked Chambliss whether PCP could cause a human user to become aggressive, the prosecution objected and the court sustained the objection, finding that the question was outside Chambliss’ expertise. Chambliss was asked by defense counsel whether PCP deadened pain, caused flashbacks, or ignited aggression, the State again objected, and the court also sustained that objection.

Chambliss admitted that he had studied PCP from the point of view of toxicology and what some of the symptoms and signs of PCP are. He also stated that he had read an article of PCP, but the court did not allow defense counsel to ask questions about the article.

Collen Brueck testified that on the evening of November 25, 1989, she and the decedent had been drinking at a bar. Decedent drank beer and whiskey and had been involved in three fights with patrons at the bar. Collen and decedent left the bar and went to her apartment, where they continued to drink, watched television and later had sex. The two fell asleep in the bed.

Brueck testified that about .2:30 a.m. she awoke when defendant pulled decedent from the bed. Defendant began to kick and punch decedent, then pushed his head into a wall. Brueck testified that defendant told decedent “I am going to kill you,” and continued to punch and kick decedent into the bathroom area. Decedent begged defendant to stop. Brueck stated that defendant returned to the bedroom, screamed at her, asked her where the drugs were and then hit her across the face. Defendant told her that he had warned her that “if he ever caught her with this hippie he’d kill him.” She testified that he then returned to the bathroom and dragged decedent into the kitchen and began stomping him. Brueck stated that she saw Provax in the doorway of her apartment and told him to get defendant out of her house.

Brueck testified that she heard defendant ask Provax to assist him in removing decedent’s body from her apartment and that Provax refused to do so. Defendant then dragged decedent’s body to the kitchen doorway.

Brueck told the police who arrived on the scene that she had been raped and beaten by the decedent. While at the hospital that evening she also told a detective that she had been raped and beaten by the decedent. She testified that later on the morning of November 26, 1989, she told the police the truth and signed a statement regarding the events. She also stated that she told the true story to the grand jury the following day. In her grand jury testimony she stated that on the night of the incident she awoke and saw defendant beating decedent, but failed to state that she saw defendant pull decedent out of bed.

Brueck testified that before her meeting with defense counsel she visited with defendant in jail and that he told her to “make it a self defense case.” She met with defense counsel and told him that she did not know how the fight started between defendant and decedent. However, during cross-examination, Brueck testified that much of her statement to defense counsel was a lie, but that her statements about decedent’s drinking and fights that evening were truthful.

The parties stipulated that paramedics Sassana and Wallace would testify that when they arrived at the scene of the crime the decedent displayed no vital signs. The decedent was pronounced dead on arrival at the hospital at 3:11 a.m. November 26, 1989. Wallace would further testify that he examined defendant on November 26, 1989, and defendant neither displayed signs of injury nor complained of any injury.

Defendant testified at trial that Brueck had been his girl friend for six years and that he had not dated other women. He stated that Brueck had accepted his engagement ring. He testified that on the date of the incident he and Brueck were still dating.

Defendant testified that on November 25, 1989, he was very drunk when he went to Brueck’s apartment. He arrived there about 2:15 a.m. and found the door slightly open. He testified that he walked inside the apartment, where he saw Brueck in bed and walked over to her. Defendant testified that before he reached the bed decedent hit him in the head and face, then pulled him into the kitchen. While in the kitchen, the two began to fight as Brueck screamed. Decedent fell to the ground, and defendant punched and kicked him several times. Defendant testified that decedent was naked and, after seeing his naked body, he lost control of himself realizing that decedent and Brueck had engaged in sex.

Defendant testified that he remembered hitting Brueck and calling her a bitch and a whore and asking her where the drugs were. He stated that he saw Provax at the front door and told him to go back to the vehicle. Defendant stated that after that point he remembered very little.

On cross-examination defendant testified that after decedent fell to the kitchen floor, decedent got up and the fighting resumed. He testified that he did not remember telling the police that he hit decedent only one or two times, or that he saw decedent raping Brueck. Defendant testified that as a result of the fight he suffered a bump to the back of his head and a bruise on his chin.

Defendant stated that he never discussed his case with Brueck or Provax and that he never told Brueck to make the case look like one of self-defense, nor did he concoct a rape story.

At the close of the evidence the court rendered its findings, concluding that the reasonable inference to be drawn regarding the narcotics and alcohol was that the decedent was not in any condition to defend himself. The court concluded that defendant invaded Brueck’s home and murdered the decedent.

Defendant first argues that he was denied a fair trial where the trial court relied on speculation and extra-evidentiary conclusions regarding the effects of PCP on the decedent. Specifically, defendant contends that there were no facts in the record from which the court could conclude, as it did, that the PCP in the decedent’s body rendered the decedent helpless. Defendant asserts that this is particularly true where the court restricted his ability to cross-examine the medical examiner about the effects of PCP on human beings, and that the court looked outside the record to reach its conclusion. The State maintains that the trial court did not indulge in extra-evidentiary speculation, and that there was sufficient evidence in the record upon which the court properly relied in finding that the decedent could not and did not defend himself.

It is fundamental that a fair bench trial is one based on the consideration of only that evidence introduced at trial and reasonable inferences to be drawn therefrom. (People v. Gonzalez (1988), 175 Ill. App. 3d 466, 529 N.E.2d 1027.) Further, in a bench trial, there is a rebuttable presumption that the trial court considered only relevant evidence. (People v. Christiansen (1987), 116 Ill. 2d 96, 506 N.E.2d 1253.) The trial court is free to accept or reject as much or as little as it pleases of a witness’ testimony. (People v. Thompson (1981), 93 Ill. App. 3d 995, 418 N.E.2d 112.) Any deliberations utilizing evidence based on private speculation of the trial court, untested by cross-examination or the rules of evidence, constitute a denial of due process of law. People v. Nelson (1974), 58 Ill. 2d 61, 317 N.E.2d 31.

In this case, the trial court clearly stated how it reached its conclusion that decedent was unable to defend himself:

“The medical examiner talked about the extent of the beating. We know the cause of death to have been injury to the head from blunt trauma, and I think the fact of the matter is that the defendant beat the victim to death. I don’t think there is any question about that. He beat him to death. A big deal was made about the fact that this victim had narcotics and alcohol in his blood. I think this court in determining how on earth the victim in a sense allowed himself to be beat this savagely. It’s a reasonable inference from the evidence that he was not in any condition in fact to defend himself.
If one wants to take the view that these narcotics and the alcohol in his blood were high, as I believe defense counsel managed to and rightfully so, he really probed into that, but at some point the doctor did indicate that he felt what he had found was ‘a high dose.’ I think that might explain one of the curious questions this case presented and that is the complete lack of any substantiated injury to the defendant and the brutal beating sustained by the victim. One can infer that he was not in any condition to defend himself.”

The court’s reasoning here suggests that the court drew a reasonable inference from the evidence. The medical examiner testified that the cause of decedent’s death was blunt trauma to the head. He also testified that the decedent had received a severe beating. The conclusions in the toxicology report prepared by the examiner showed that the decedent had a blood-alcohol level of .085, a PGP level of 29 nanograms in his bloodstream, and 640 nanograms in his urine at the time of death. Further, the paramedics who examined defendant after the incident determined that defendant had suffered no injuries, and defendant himself admitted on cross-examination that a bruise to his chin may have been acne. Moreover, the testimony of Provax and Brueck, although conflicting and inconsistent, was sufficient for the court to infer that the decedent was beaten by the defendant and that drugs and alcohol in his bloodstream hindered decedent from defending himself. Although Provax did not mention in his grand jury testimony that the defendant and decedent were fighting when he walked into the apartment, he did testify that he saw defendant beating decedent. Moreover, at trial he testified that when he entered Brueck’s apartment he saw defendant fighting with decedent in one room and continuing that fight into the kitchen.

Brueck testified before the grand jury that when she awoke on the night of the incident defendant was beating decedent. Although she failed to state in her grand jury testimony that she saw the defendant pull decedent out of bed, at trial she stated that on the night of the incident she was awakened when defendant pulled decedent out of the bed and pushed decedent’s head into a wall. She testified that defendant continued to punch and kick decedent into the bathroom and kitchen, as decedent pleaded with defendant to stop. She testified that defendant finally stomped decedent while in the kitchen. This evidence provided a sufficient basis from which the trial court could properly infer that decedent was helpless.

Defendant maintains that the court’s refusal to allow the medical examiner to testify about the effects of PCP on humans, and the. lack of other evidence to support the conclusion that defendant was defenseless, rendered its determination speculative. We note that, particularly in a bench trial, it is the function of the trial court to determine the credibility of the witnesses, the weight to be given their testimony and the inferences to be drawn from the evidence. (People v. Westfield (1990), 207 Ill. App. 3d 772, 566 N.E.2d 392.) The court may accept or reject as much of the testimony as it wishes and draw reasonable inferences therefrom. (People v. Thompson (1981), 93 Ill. App. 3d 995, 418 N.E.2d 112.) It is not required to believe the defendant’s testimony.

In examining the record, we find that from the evidence presented the court could reasonably infer that decedent was unable to defend himself because he had consumed narcotics and alcohol. This is true even though there was no expert testimony as to the effects of PCP. Defendant cites to People v. White (1989), 183 Ill. App. 3d 838, 539 N.E.2d 456, for the proposition that error occurs where the trial court transgresses the boundaries of the record and bases its findings on its own speculative determinations. In White, the trial court made a distinction between the physical characteristics of lacerations caused by a piece of glass as distinguished from those caused by a knife. This determination was made without the testimony of either an expert or other facts in the record to support that conclusion. White is distinguishable from this case. Here, the court’s conclusion was one that did not require probing into technical and scientific facts, but could properly be inferred based on evidence in the record.

Defendant contends that the evidence in the record could have supported second degree murder, and that one of the factors in his testimony was that decedent’s attack provoked his counterattack. He asserts that there was evidence in the record of mutual combat, and that decedent’s assault of him was prompted by the violent and aggressive behavior resulting from decedent’s use of PCP. Defendant argues that by determining that the effects of PCP in the decedent’s body rendered decedent helpless, the court destroyed defendant’s theory of mutual combat. We find this argument unpersuasive. The testimony of the medical examiner, Provax, and Brueck was sufficient to support the court’s inference. We find that the court’s determination was not based on speculation nor did it transgress the boundaries of the record. Therefore, we find that defendant was not denied a fair trial.

Defendant next argues that he was denied his constitutional right to confrontation and cross-examination of witnesses against him. Specifically, he maintains that the court’s restriction of his questions of the medical examiner regarding the effects of PCP on the human body was an abuse of discretion.

On direct examination the medical examiner discussed the toxicology report prepared in the case, including the amount of PCP and alcohol found in the decedent’s body. He opined that in his experience the level of PCP found inside decedent’s body was a low level. During cross-examination the medical examiner stated that he knew about PCP and that it is generally used as an animal tranquilizer. He also testified that PCP caused mood changes, euphoria and depression in response to separate questions from defense counsel. Defendant argues, however, that when he asked the medical examiner whether PCP deadened pain, caused flashbacks or ignited aggression, the court improperly sustained the State's objection. Defendant contends that because the medical examiner testified that he had studied what the affects of PCP were, had conferred with a forensic toxicologist about PCP and had read an article on PCP, the court should not have restricted defendant’s cross-examination of him on the effects of PCP in humans.

The trial court’s discretion to restrict the scope of cross-examination comes into play only after the court has permitted, as a matter of right, sufficient cross-examination to satisfy the constitutional guarantee. (People v. Edwards (1991), 218 Ill. App. 3d 184, 541 N.E.2d 144.) To determine the constitutional sufficiency of cross-examination, the reviewing court should not look to what a defendant had been prohibited from doing, but to what he had been allowed to do. (People v. Maldonado (1989), 193 Ill. App. 3d 1062, 1069, 550 N.E.2d 1011.) The correct inquiry is whether, assuming that the damaging potential of the cross-examination were fully realized, a reviewing court might nonetheless say that the error was harmless beyond a reasonable doubt. (People v. Allison (1992), 236 Ill. App. 3d 175, 602 N.E.2d 1288.) Whether such an error is harmless in a particular case depends upon a host of factors, all readily accessible to the reviewing courts. These factors include the importance of the witness’ testimony in the prosecution’s case, whether the testimony was cumulative, the presence or absence of evidence corroborating or contradicting the testimony of the witness on material points, the extent of cross-examination otherwise permitted, and the overall strength of the prosecution case. Delaware v. Van Arsdall (1986), 475 U.S. 673, 680, 89 L. Ed. 2d 674, 684, 106 S. Ct. 1431, 1435-36.

In this case, defense counsel sought to elicit testimony on cross-examination regarding the medical examiner’s professional knowledge. The record reveals that the medical examiner was not qualified to give testimony regarding the effects of PCP after being ingested by humans. Both defense counsel and the prosecution stipulated to the medical examiner’s qualifications as a forensic pathologist. He was never qualified to render an expert opinion on the effects of a living person ingesting PCP. During cross-examination, the court admonished defense counsel:

“You have to get another witness [to talk about the effects of living people ingesting drugs.] If you ask him about his background as a forensic pathologist, what he did in this autopsy, this is not a clinical psychiatrist. He is not working in a clinical setting. I think the limits of his expertise are obvious. He himself has indicated them. Let us not waste time with this witness, trying to elicit that testimony.”

Although the testimony of the medical examiner here was a significant factor in the prosecution’s case, we do not believe that the court’s restriction of cross-examination rose to the level of reversible error. (People v. Blommaert (1989), 184 Ill. App. 3d 1065, 1075, 541 N.E.2d 147.) The parties stipulated that the medical examiner was qualified as a forensic pathologist, and not as an expert on the effects of PCP. The medical examiner himself advised defense counsel that he was not capable of rendering an opinion regarding the effect of humans ingesting PCP. The evidence in the record indicates that the witness was not competent to answer questions regarding the effects of PCP on human beings. Therefore, we find that the court’s restriction of cross-examination was not manifestly prejudicial and did not deny defendant his constitutional rights. People v. Sanchez (1989), 131 Ill. 2d 417, 546 N.E.2d 574.

Defendant finally argues that the Illinois homicide statute is unconstitutional on due process grounds and separation of powers grounds. This court has recently rejected identical arguments in People v. Banks (1992), 227 Ill. App. 3d 462, 592 N.E.2d 107. We likewise find defendant’s argument here without merit.

Accordingly, the judgment of the circuit court of Cook County is affirmed.

Affirmed.

BUCKLEY and O’CONNOR, JJ., concur.