author: JUSTICE VAN DEUSEN

text:
    JAMES ROBERT BUZZARD et al., Plaintiffs-Appellants, v. VINCENT J. BOLGER et al., Defendants-Appellees.
    Second District
    No. 82 — 762
    Opinion filed August 26, 1983.
    Rehearing denied October 6,1983.

      E. Paul Lanphier, of Elmhurst, for appellants.
    Jeffrey M. Weston, of Friedman, Weston, Sternberg & Rakich, Charles T. Kropik, and Kenneth K. Shaw, Jr., all of Chicago, for appellee Alphonse Klecka.
    Frank B. May, Jr., of Oak Brook, for appellees Thorsen Realtors and Jeanne Stone.
   JUSTICE VAN DEUSEN

delivered the opinion of the court:

Plaintiffs appeal the dismissal of counts III and IV of their fourth amended complaint directed against defendants Thorsen Realtors and Jeanne Stone as well as the dismissal of count IV of their second amended complaint against defendant Alphonse Klecka.

In ruling on these motions to dismiss, this court, as well as the trial court, is required to accept all facts well pleaded as true and to draw all reasonable inferences therefrom in favor of the plaintiff. However, the motion to dismiss does not admit conclusions of fact or of law unsupported by allegations of specific facts upon which such conclusions rest. (Pierce v. Carpentier (1960), 20 Ill. 2d 526, 531; Zaborowski v. Hoffman Rosner Corp. (1976), 43 Ill. App. 3d 21, 25; Zickur v. Irmiger (1973), 15 Ill. App. 3d 805, 807.) While pleadings are to be liberally construed with a view to- do substantial justice between the parties, section 2 — 603 of the Code of Civil Procedure also requires that the pleadings shall contain a plain and concise statement of the pleader’s cause of action and that each separate cause of action upon which a separate recovery may be had shall be stated in a separate count as the case may be (Ill. Rev. Stat. 1981, ch. 110, par. 2— 603).

On appeal, plaintiffs first contend that the allegations of count III of their fourth amended complaint contained sufficient factual allegations upon which to base a cause of action on either one or both of the following theories: (1) the existence of a principal/agent relationship which gives rise to a duty owed by defendants Thorsen and Stone to plaintiffs and a breach of that duty by defendants’ failure to disclose the condition of the premises to plaintiffs and (2) a cause of action for negligent misrepresentation.

Our examination of count III discloses it to be a hodgepodge of allegations in which plaintiffs, contrary to section 2 — 603 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 603), have attempted to set forth two causes of action.

Plaintiffs have failed to do either. The trial court correctly found that the allegations of count III of the fourth amended complaint were insufficient to support the pleader’s conclusion that a relationship of principal and agent existed between plaintiffs and defendants Thorsen and Stone which gave rise to a duty owed by defendants to plaintiffs.

The specific allegations contained in the complaint upon which plaintiffs rely to support their conclusion that an agency relationship existed between themselves and defendants Thorsen Realtors and Stone were that plaintiffs sought services of defendants in purchasing a residence and that in the course of showing residential property, defendants gave plaintiffs counsel and advice concerning value and the conditions of single-family residences and advice concerning the applicability of the Veteran’s Administration financing that might be available. These allegations are insufficient to support the conclusion that an agency relationship existed between plaintiffs and defendants, particularly when read in the context of the contract in question.

The contract to purchase the property in question is a part of the complaint. According to the -contract, defendant Gladstone Realty was the listing broker and defendant Thorsen Realtors, was the cooperating broker whose fees were to be paid by the seller. The only reasonable inference that can be drawn from the contract is that defendant, Thorsen Realtors, and its employee, defendant Stone, were acting on behalf of the sellers and expected compensation from them. The relationship existing between broker and an owner of property is one of agency and is created by a contract of employment between the parties. (Arthur Rubloff & Co. v. Drovers National Bank (1980), 80 Ill. App. 3d 867, 871.) The contract in question would establish that defendants were agents of the seller and not of plaintiffs.

Plaintiffs’ reliance upon Duhl v. Nash Realty Inc. (1981), 102 Ill. App. 3d 483, is misplaced. In Duhl, the plaintiffs as buyers, contacted defendant Reigel, who was a licensed real estate broker and agent of Nash Realty. Plaintiffs told Reigel that they wanted to engage her services for the purchase of a new home and the sale of their present residence. Reigel agreed to act as their agent. (102 Ill. App. 3d 483, 485.) No such agreement is alleged here. Plaintiffs have failed to state a cause of action for negligence based upon the breach of a duty arising from an agency relationship.

Nor are the allegations of count III of the fourth amended complaint sufficient to state a cause of action on the theory of negligent misrepresentation. We recognize that our supreme court has held that real estate brokers occupy a position of trust with respect to purchasers with whom they are negotiating and owe a duty to exercise good faith in their dealings with such purchasers even absent the existence of an agency relationship. (Sawyer Realty Group, Inc. v. Jarvis Corp. (1982), 89 Ill. 2d 379, 385-86.) Misrepresentations of material facts made intentionally by a broker could well be the basis for a cause of action based upon fraud and deceit, and misrepresentations of material fact made negligently could well be the basis for a cause of action for negligent misrepresentation. From our examination of the pleadings, we cannot ascertain whether plaintiffs sought to bring a cause of action based upon fraud or upon negligent misrepresentation. Nowhere in count III of the fourth amended complaint do plaintiffs allege that the alleged misrepresentations of defendants were made negligently or constituted negligent conduct or that plaintiffs’ damages were proximately caused as a result of any negligent conduct. These are essential allegations to state a cause of action for negligence. Lyons v. Christ Episcopal Church (1979), 71 Ill. App. 3d 257, 259.

In addition, the alleged material facts which were purported to be misrepresented were that plaintiffs need not concern themselves with the condition of the property; that in view of the fact that plaintiffs were applying for V.A. financing, they would not be required to purchase the property unless the Veteran’s Administration appraisal was approved; and that any substantial material defects would be required to be repaired or replaced by the sellers. An additional alleged misrepresentation was to the effect that the services of an attorney were not necessary for plaintiffs’ representation in connection with the purchase of the residence. These representations are not representations of existing facts, rather they constituted a mixture of opinion and promises of future action. Ordinarily, the material facts upon which misrepresentation cases rest must be a past or existing fact rather than an opinion or promise of future action. (See Knightsbridge Realty Partners, Ltd-75 v. Pace (1981), 101 Ill. App. 3d 49, 54.) Nor is there any suggestion in the pleadings that the misrepresentations made were a part of a scheme to defraud which might make false promises of future conduct actionable. (See Ronan v. Rittmueller (1982), 105 Ill. App. 3d 200, 206.) The allegations of count III of the fourth amended complaint as they presently stand are insufficient to state a cause of action for negligent misrepresentation.

We recognize that pleadings are to be liberally construed and that a complaint should not be dismissed unless it clearly appears that no set of facts could be proven under the pleadings which would entitle plaintiffs to relief. (Brooks v. Village of Wilmette (1979), 72 Ill. App. 3d 753, 756.) However, the statutory requirements are that pleadings shall contain a plain and concise statement of the pleader’s cause of action and each separate cause of action shall be stated in a separate count. (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 603.) Significant policy considerations favor adherence to these rules. In particular is the interest in the efficient and orderly administration of justice. To allow a party to proceed to trial on the basis of the allegations contained in count III of the fourth amended complaint would result in confusion and place an unnecessary burden upon the trial judge. (See Foxcroft Townhome Owners Association v. Hoffman Rosner Corp. (1983), 96 Ill. 2d 150.) Plaintiff has filed five complaints in this matter over a period of almost two years and the allegations of count III still does not set forth a clear and concise statement of his cause of action. Enough is enough. The trial court did not err in dismissing count III of the fourth amended complaint.

We find, however, that the trial court did err in dismissing count IV of the fourth amended complaint at the pleadings stage. Relying upon the same alleged misrepresentations that were the basis of their claim for a cause of action for negligent misrepresentation, plaintiffs assert in count IV a cause of action for an unlawful deceptive trade practice under section 2 of the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1981, ch. 121½, par. 262 (Consumer Fraud Act)), as defined in section 2 of the Uniform Deceptive Trade Practices Act (Ill. Rev. Stat. 1981, ch. 121½, par. 312). The Consumer Fraud Act provides an even broader consumer protection than does the common law action of fraud or negligent misrepresentation since the Act also prohibits any “deception” or “false promise.” (Ill. Rev. Stat. 1981, ch. 121½, par. 262; see Perlman v. Time, Inc. (1978), 64 Ill. App. 3d 190, 198.) It has been stated that there is a clear mandate from the legislature to the courts to use the Consumer Fraud Act to the utmost degree to eradicate all forms of deception and unfair business practices. 64 Ill. App. 3d 190, 198.

Beard v. Gress (1980), 90 Ill. App. 3d 622, holds that by the express terms of section 2 of the Consumer Fraud Act (Ill. Rev. Stat. 1979, ch. 121½, par. 262), a misrepresentation made by a broker to a party as to a material fact in a real estate sales transaction constitutes an actionable violation of the Consumer Fraud Act. (90 Ill. App. 3d 622, 626.) If the purchasers in this matter were misled into believing that they need not concern themselves with the conditions of the premises while they were purchasing the same, since any substantial material defects would be required to be repaired or replaced by the seller and they were in fact material defects which were not repaired or replaced, one could conclude that the purchasers would indeed be damaged. Subsection 12 of section 2 of the Uniform Act states that person commits a deceptive practice when he “engages in any other conduct which similarly creates a likelihood of confusion or of misunderstanding.” (Ill. Rev. Stat. 1979, ch. 121½, par. 312.) The misstatement that the sellers would be required to repair any substantial material defect taken together with the other allegations of the complaint can be considered to be conduct which creates a likelihood of misunderstanding and therefore a deceptive trade practice as defined in section 2 of the Uniform Act (Ill. Rev. Stat. 1979, ch. 121½, par. 312). Contrary to defendants’ contention, the 1982 amendment to the Consumer Fraud Act (1982 Ill. Laws 148) can have no application to the cause of action alleged here which arose in 1978. See Board of Trustees v. Illinois Community College Board (1978), 63 Ill. App. 3d 969, 974, citing People ex rel. County of St. Clair v. Reinhardt (1964), 51 Ill. App. 2d 110, 115.

Plaintiffs also contend that the trial court erred in dismissing count IV of plaintiffs’ first amended complaint against the appraiser, Alphonse Klecka, for failure to state a cause of action. According to the allegations of that count, Banco Mortgage Corporation, as agent of defendants Bolger and Hall, hired Klecka to render an opinion as to the reasonable value of the property for purposes of securing Veteran’s Administration approval; Klecka submitted his written appraisal, the V.A. loan was granted and plaintiffs closed the real estate transaction.

We do not reach the issue of whether or not Klecka owed any duty to the plaintiffs since the allegations of count IV of plaintiffs’ first amended complaint are otherwise insufficient to state a cause of action based on negligence against defendant Klecka. The only negligence charged against defendant Klecka was that he conducted his inspection in a negligent manner and improperly rendered his opinion. Such an allegation is a conclusion of the pleader. Since it is not substantiated by any underlying facts whatsoever, it must be disregarded. (Treister v. American Academy of Orthopaedic Surgeons (1979), 78 Ill. App. 3d 746, 757.) Count IV of plaintiffs’ first amended complaint is insufficient to state a cause of action against defendant Klecka and the trial court did not err in dismissing it.

The portion of the trial court’s order dismissing count IV of the first amended complaint against defendant Klecka and count III of the fourth amended complaint (improperly designated as first amended complaint) is affirmed, and that part of the order of the trial court dismissing count IV of the fourth amended complaint is reversed and the cause is remanded for further proceedings on that count.

Affirmed in part; reversed in part and remanded.

NASH and UNVERZAGT, JJ., concur.


source: Caselaw Access Project

author: JUSTICE BARRY

license: Public Domain

text:
    TONI SCHALEY POWELL, Plaintiff-Appellant, v. KIMBERLY K. INGHRAM, Defendant—(Country Mutual Insurance Company, Respondent-Appellee).
    Third District
    No. 82 — 424
    Opinion filed September 12, 1983.
    James N. Vail, of Chicago, for appellant.
    James J. Elson, of James J. Elson, Chartered, of Canton, and Robert C. Stoerzbach, of Barash, Stoerzbach & Henson, of Galesburg, for appellee.
   JUSTICE BARRY

delivered the opinion of the court:

Plaintiff Toni Schaley Powell appeals from an order of the circuit court of Henderson County allowing the subrogation claim of Country Mutual Insurance Company to be paid out of the $40,000 settlement proceeds of her personal injury lawsuit.

This litigation arose out of a single-car accident on May 18, 1977, when the car in which plaintiff was a passenger and which was driven by her sister Kimberly Inghram (defendant herein) went out of control on Carman Road in Henderson County and rolled over several times. Plaintiff received a fractured neck. She was hospitalized at Iowa City Hospital from the date of the injury until July 2, 1977, and continued to receive outpatient care at the Hospital until May 31, 1978. Her medical bills totalled $5,049.33. Plaintiff was 17 years old at the time of the accident; she became 18 on April 26, 1978. Both plaintiff and her mother were named insureds under an automobile liability policy issued by Country Mutual Insurance Company. The car in which plaintiff was riding was insured by a different company, Allstate.

On May 11, 1979, about two years subsequent to the accident, plaintiff and her mother signed and submitted a claim for medical expenses to Country Mutual. The claim included an agreement to reimburse Country Mutual in the event damages were recovered, either by settlement or judgment, as a result of the injuries for which the listed bills were incurred. Country Mutual made a final payment of $4,814.83 on May 18, 1979, and on the same date, Country Mutual sent to Allstate, the insurer of defendant, a notice of lien and subrogation interest in the amount of $5,049.33 for plaintiff’s medical expenses. On May 23, 1979, Country Mutual sent plaintiff’s attorney a letter which stated:

“[W]e are not employing you to recover our subrogation money paid under the medical benefits of the policy, but merely notifying you of our subrogation rights so you might protect our interests in the event settlement is reached with Allstate.”

Plaintiff and defendants’ liability carrier, Allstate, subsequently agreed upon a $40,000 settlement of the personal injury action, and Allstate issued one check for $34,950.67 payable to plaintiff and her attorney and a second check for $5,049.33 payable to plaintiff, her attorney, and Country Mutual. Plaintiff then filed a motion to have Country Mutual’s lien declared void. Allstate responded by depositing the money with the clerk of the circuit court pursuant to a counterclaim of interpleader. After hearing arguments of counsel the trial court ruled that Country Mutual was entitled to subrogation rights in the settlement in the amount of $5,049.33 and that plaintiff’s attorney was entitled to $1,800 fees and costs payable from Country Mutual’s portion of the settlement. Later, after a motion to vacate filed by Country Mutual, the trial court reversed and vacated the award of attorney fees and costs. Plaintiff has appealed, contending (1) that Country Mutual was erroneously awarded its subrogation claim and (2) in the alternative, that if the subrogation claim was properly allowed, Country Mutual should be required to pay its proportionate share of the fees and expenses incurred by plaintiff in creating the settlement fund.

Plaintiff disputes the subrogation award on the ground that plaintiff was a minor when the medical expenses were incurred and, under Illinois law, the parents of a minor are primarily responsible for medical expenses. (Kennedy v. Kiss (1980), 89 Ill. App. 3d 890, 412 N.E.2d 624.) Plaintiff argues that Country Mutual’s payments of medical expenses were for the benefit of plaintiff’s mother, not plaintiff, and consequently that Country Mutual has no subrogation right against the settlement of a tort claim by the minor. Plaintiff relies upon Estate of Woodring v. Liberty Mutual Fire Insurance Co. (1979), 71 Ill. App. 3d 158, 389 N.E.2d 211, where a four-year-old child was injured, and the court held that the medical expense payments were for the benefit of the child’s parents and could not be subrogated to the settlement of the tort claim by the child’s estate.

The facts of the instant case contain some substantial variances from the facts in Woodring. Although plaintiff here was a minor at the time of the accident, she had reached her majority before her medical treatment was concluded. At the time of the accident, she was a named insured along with her mother on the policy of insurance issued by Country Mutual. Furthermore, after her 18th birthday and acting as insured under the policy, she signed a claim directing Country Mutual to pay her medical expenses and agreeing to reimburse Country Mutual from any money recovered by judgment or settlement as damages for her injuries. In effect, plaintiff assumed responsibility for her medical bills when she became an adult, and she sought payment of insurance benefits due her as a named insured.

Although plaintiff argues that Country Mutual somehow acted improperly in obtaining plaintiff’s signature on the subrogation agreement after she reached her majority, the record contains no allegations of fraud or deception on the part of Country Mutual. Courts should not presume fraud or impropriety where none is alleged or proved.

We believe the trial court correctly ruled that Country Mutual was entitled to enforce its subrogation rights as to the settlement obtained by plaintiff, and we affirm that portion of the court’s order.

Plaintiff next asserts an alternative argument: Assuming the subrogation claim was properly allowed, then the trial court erred in not requiring Country Mutual to pay a proportionate share of plaintiff’s attorney fees and costs. Plaintiff seeks application of the “fund doctrine” to the facts of this case. The fund doctrine is an equitable concept which provides that an attorney who performs services in creating a fund is entitled to be compensated out of the entire fund by all those who benefit from the creation of the fund. (Baier v. State Farm Insurance Co. (1977), 66 Ill. 2d 119, 361 N.E.2d 1100.) The requirements for recovery under the fund doctrine have been stated as follows:

“In order to recover under the doctrine it is necessary for a plaintiff seeking recovery from a subrogee to show (1) that the fund was created as a result of legal services performed by an attorney employed by him, (2) that the subrogee did not participate in the creation of the fund, and (3) that the subrogee benefited out of the fund that was created. [Citation.] When these conditions are shown to exist, then equity will apportion the fees and expenses incurred in creating the fund among those who benefit from its creation.” (Emphasis added.) Smith v. Marzolf (1980), 81 Ill. App. 3d 58, 64, 400 N.E.2d 949, 953.

Those requirements have been met in this case before us. The settlement fund was created as a result of the legal services performed by plaintiff’s attorney; the subrogee, Country Mutual, did not participate in the creation of the fund; and Country Mutual benefited from the fund in that it was reimbursed in full for the medical expenses previously paid. Country Mutual argues that the test is not whether the subrogee benefited from the fund but rather whether there was an express or implied agreement that the subrogee would pay its share of the cost of creating the fund. Country Mutual then points to the letter of May 23, 1979, to plaintiff’s attorney expressly stating that Country Mutual was not employing him to recover its subrogation claim as proof that no such agreement existed. In other words, Country Mutual insists that its express disclaimer of employment should except it from any liability under the fund doctrine.

Illinois courts have recognized that the fund doctrine should be used with caution. (Boehm & Weinstein, Chtd. v. City of Chicago (1978), 62 Ill. App. 3d 68, 379 N.E.2d 4; Maynard v. Parker (1977), 54 Ill. App. 3d 141, 369 N.E.2d 352, aff’d (1979), 75 Ill. 2d 73, 387 N.E.2d 298.) In Maynard it was held that a hospital was not required to pay a portion of the plaintiff’s attorney fees even though that hospital’s statutory lien against the plaintiffs personal injury claim was satisfied with funds obtained by the settlement of plaintiff’s claim. The supreme court noted that there is a difference between the situation where the plaintiff is obligated to pay the subrogee only in the event and to the extent that any net recovery is made, as was the case in Baier v. State Farm Insurance Co. (1977), 66 Ill. 2d 119, 361 N.E.2d 1100, and where the plaintiff was a debtor obligated to pay a debt out of any resources available. The plaintiff in Maynard v. Parker (1979), 75 Ill. 2d 73, 387 N.E.2d 298, was, of course, obligated to pay his hospital bill whether he recovered anything on his personal injury claim, and the fund doctrine was held not to apply.

In Boehm & Weinstein, Chtd. v. City of Chicago (1978), 62 Ill. App. 3d 68, 379 N.E.2d 4, the fund doctrine was again held not to apply to a case where the plaintiff’s employer, the city of Chicago, merely had a lien for plaintiff’s medical expenses which was satisfied from the proceeds of settlement of plaintiff’s tort action. The reviewing court in Boehm indicated that the fund doctrine should be applied only in cases where the subrogee is an insurance carrier and where there is an express agreement between the insured and insurer, subrogating the insurer to any claim the insured had against a third-party tortfeasor, and requiring the insured to initiate legal action against the third-party tortfeasor. Country Mutual insists that the absence of any agreement requiring plaintiff to bring suit against defendant distinguishes this case from Baier and from the statements in Boehm.

We believe that the important fact is not whether plaintiff was expressly required by the terms of the subrogation agreement to seek a recovery of damages, but rather whether the subrogee’s rights were expressly payable only from the damages recovered — that is, the “fund.” In the case before us, plaintiff agreed to pay Country Mutual from any damages recovered by judgment or settlement, but did not promise to initiate a personal injury action. Actually, such a promise was not necessary under the facts and circumstances presented to us. Plaintiff had filed a complaint for damages against defendant in July of 1978, about 10 months before she signed the subrogation agreement.

Country Mutual promptly notified plaintiff’s attorney of its subrogation lien and at the same time disclaimed any intention to employ plaintiff’s attorney to collect the lien, merely requesting him to “protect” its interests in the event of settlement. Country Mutual’s refusal to employ plaintiff’s attorney while seeking to benefit from his services in obtaining a settlement fund from which it should be reimbursed strikes us as a situation most suitable for the application of the fund doctrine. Principles of equity are intended to be used to prevent an injustice and the Illinois case law dictates the results we reach.

Accordingly, we hold that the trial court erred in vacating its award of $1,800 costs and attorneys fees to be paid from Country Mutual’s portion of the settlement. We reverse the order of June 4, 1982, which vacated the award and we reinstate that portion of the judgment order of April 26,1982, which awarded fees and costs to plaintiffs attorney.

As indicated above, we also affirm that portion of the order allowing Country Mutual’s subrogation right.

Affirmed in part; reversed in part.

ALLOY and SCOTT, JJ., concur.


author: PRESIDING JUSTICE STOUDER

text:
      In re ESTATE OF DONALD N. GRAFF, Deceased—(Morton Community Bank, Claimant-Appellee, Margaret K. Graff, Ex’r of the Estate of Donald N. Graff, Respondent and Counterclaimant-Appellant).
    Third District
    No. 82 — 702
    Opinion filed September 7, 1983.

      John T. Pratt and Catherine A. Pratt, both of Pratt, Sternberg & Finegan, P.C., of Bloomington, for appellant.
    David A. Benckendorf, of Benckendorf & Benckendorf, of Peoria, for appellee.
   PRESIDING JUSTICE STOUDER

delivered the opinion of the court:

This appeal is a result of an order entered by the circuit court of Tazewell County allowing a claim filed by the Morton Community Bank against the estate of Donald Graff, deceased, in the amount of $21,027.70, representing the amount due on a collateral promissory note executed by decedent, and dismissing certain counterclaims filed by the executor of the estate, Margaret Graff.

The decedent, Donald Graff, agreed with the Morton Community Bank to consolidate several of the decedent’s outstanding loans with a single loan and to procure credit life insurance insuring the principal of that consolidated loan. The decedent made arrangements with the bank to execute the loan and insurance documents on June 9, 1981, and the note and insurance certificate were prepared on that date. However, the decedent did not sign the refinancing note until June 16,1981, and the note remained dated June 9,1981.

The note was to mature seven months from the date appearing on its face. Its term was calculated on a 30-day month basis and, therefore, the note had a maturity date of January 2, 1982. The term of the insurance policy was established to coincide with the term of the note. Its term was calculated on a calendar month basis, expiring on January 9,1982.

The decedent failed to pay or refinance the loan on its maturity date of January 2, 1982, or thereafter. The decedent then died on January 13,1982.

The bank filed a timely claim with the Tazewell County circuit court for the balance due on the promissory note including interest. The executor of the decedent’s estate objected to the claim and counterclaimed for breach of contract to procure credit life insurance, for negligence in procuring credit life insurance and for violations of the Illinois Insurance Code and Federal Regulation Z. On July 21, 1982, the trial court issued an order allowing the bank’s claim and dismissing the executor’s counterclaims. The executor is appealing from that order.

The executor has presented the following issues for our review: (1), whether the bank acted negligently or in breach of contract in the procurement of the credit life insurance policy in that said policy expired seven calendar months from June 9, 1981, the date of the note, and not seven calendar months from June 16, 1981, the date the decedent actually signed the note; (2), whether the executor is entitled to recover twice the total of all interest, discounts and charges determined by the loan contract and reasonable attorney fees and court costs under section 6 of the Interest Act (Ill. Rev. Stat. 1981, ch. 17, par. 6413) for the bank’s failure to comply with the provisions of section 155.56 of the Illinois Insurance Code (Ill. Rev. Stat. 1981, ch. 73, par. 767.56); and (3), whether the executor is entitled to recover under 15 U.S.C. sec. 1640 (1976) for the bank’s failure to include the charge for the credit life insurance premium in the finance charge disclosure pursuant to Federal Regulation Z of the Truth-in-Lending Act (15 U.S.C. sec. 1605(b) (1976)).

We do not believe that the bank acted either negligently or in breach of contract in the procurement of credit life insurance for the decedent. Arrangements had been made by the bank and the decedent to execute the consolidation note and insurance documents on June 9, 1981. The documents had been prepared on this date, however, the decedent did not sign the documents until June 16, 1981. He, of course, remained liable for monies previously received during this interim period.

It being undisputed that the decedent signed the note dated June 9, 1981, this is prima facie evidence that the contents of the note were known to the decedent. (Hartford Life & Annuity Insurance Co. v. Gray (1875), 80 Ill. 28.) Thus, the decedent’s act of signing the note, with the knowledge that it was dated June 9, 1981, was an adoption and ratification of the effective date of the note, namely June 9, 1981.

The credit life insurance policy was procured to coincide with the term of the note and, therefore, to protect the decedent’s interest during the period of time when the note would be outstanding. The decedent’s death on January 13, 1982, after his default on the note and after the insurance had lapsed, was simply a fortuitous event. Therefore, no basis exists for a claim of negligence or breach of contract with reference to the bank in its procurement of credit life insurance for the decedent.

The executor next claims that the estate is entitled to recover twice the total of all interest, discounts and charges determined by the loan contract under section 6 of the Interest Act (Ill. Rev. Stat. 1981, ch. 17, par. 6413) for the bank’s failure to comply with the provisions of section 155.56 of the Illinois Insurance Code (Ill. Rev. Stat. 1981, ch. 73, par. 767.56).

Section 155.56 of the Insurance Code provides that if an individual policy or group certificate of credit life insurance is not delivered to the debtor at the time the indebtedness is incurred, a copy of the application for such policy or a notice of the proposed insurance must be delivered to the debtor at such time. In Merchandise National Bank v. Scanlon (1980), 86 Ill. App. 3d 719, 408 N.E.2d 248, the court tied section 4a(c) of the Interest Act (Ill. Rev. Stat. 1981, ch. 17, par. 6410(c)) to section 155.56 of the Illinois Insurance Code in holding that the Merchandise National Bank was liable to the debtor for twice the amount of interest, discounts and charges determined by the loan contract pursuant to section 6 of the Interest Act (Ill. Rev. Stat. 1981, ch. 17, par. 6413).

Section 4a of the Interest Act relates to installment loans, loans requiring payment in two or more substantially equal periodic installments over a period of not more than 181 months. Subsection (c) thereof indicates that credit life insurance and any charges therefor in connection with the loan, must comply with article IX½ of the Illinois Insurance Code (Ill. Rev. Stat. 1981, ch. 73, pars. 767.51 through 767.65).

The loan involved in the instant case is not an installment loan. The note executed by the decedent was due in one payment at the end of a seven-month term. Therefore, section 4a(c) of the Interest Act, applicable only to installment loans, is ineffective in establishing liability under section 6 of the Interest Act for any alleged failure by the bank to comply with the provisions of section 155.56 of the Illinois Insurance Code.

The executor also contends that the bank violated Federal Regulation Z, promulgated pursuant to the Truth-in-Lending Act (15 U.S.C. sec. 1605(b) (1976)) and is, therefore, liable to the estate for $1,000 and reasonable attorney fees and costs under 15 U.S.C. secs. 1640(a) (2)(A)(i), (B)(3) (1976).

It is necessary to first establish that the one year limitation period contained in 15 U.S.C. sec. 1640(e) (1976), applicable to actions alleging violations of the Truth-in-Lending Act and Regulation Z, would not bar the executor’s counterclaim thereunder.

In Wood Acceptance Co. v. King (1974), 18 Ill. App. 3d 149, 309 N.E.2d 403, and National Boulevard Bank v. Thompson (1980), 85 Ill. App. 3d 1145, 407 N.E.2d 739, the court determined that the purpose of the Truth-in-Lending Act would be circumvented if the one-year limitation period were employed to bar a counterclaim falling within section 17 of the Limitations Act (Ill. Rev. Stat. 1981, ch. 83, par. 18, now Ill. Rev. Stat. 1981, ch. 110, par. 13 — 207). The executor’s counterclaim is such a counterclaim and, therefore, would not be barred by the one-year limitation statute.

Regulation Z requires that any charges or premiums for credit life insurance be included in the disclosure of finance charges unless (1), the insurance coverage is not required by the creditor and this is disclosed in writing to the customer; and (2), any customer desiring such insurance coverage gives a “specific dated and separately signed” written indication of such desire after receiving written disclosure of the cost of said insurance coverage.

In the case at hand, no other date appeared on the face of the note except the date of June 9, 1981, and the space for the date in the insurance block of the note was left blank. The executor contends that this did not constitute a “specific dated and separately signed” indication of the decedent’s desire for insurance coverage; however, the executor also concedes that a separate date next to the borrower’s signature indicating a desire for insurance is unnecessary when there is no question that the request for insurance was signed on the same date as appears elsewhere on the document. Porter v. Household Finance Corp. (S.D. Ohio 1974), 385 F. Supp. 336; In re Warren (S.D. Ohio 1975), 387 F. Supp. 1395.

As indicated previously, the act of the decedent in signing the note dated June 9, 1981, on June 16, 1981, was an adoption and ratification of the effective date of the note, namely June 9, 1981. Therefore, the decedent, by his adoption of June 9, 1981, as the effective date of the note and the entire loan transaction, also adopted June 9, 1981, as the effective date of his request and receipt of credit life insurance coverage. Thus, the request for insurance coverage and the decedent’s signature were effective as of the date appearing on the face of the note, June 9, 1981. This constituted a “specific dated and separately signed” written indication of the decedent’s desire for insurance coverage. Federal Regulation Z was, therefore, not violated in this instance.

Accordingly, for the foregoing reasons the order of the circuit court of Tazewell County is affirmed.

Affirmed.

ALLOY and HEIPLE, JJ., concur.


author: JUSTICE HEIPLE PRESIDING JUSTICE STOUDER,

text:
      In re MARRIAGE OF CATHERINE L. McKEEVER, Plaintiff-Appellant, and NICHOLAS L. McKEEVER, Defendant-Appellee.
    Third District
    No. 82 — 735
    Opinion filed September 7, 1983.

      STOUDER, PJ., dissenting.
    Glenn J. Church and Don B. Harmening, both of Glenn J. Church, Ltd., of Peoria, for appellant.
    Michael A. Fleming, of Peoria, for appellee.
   JUSTICE HEIPLE

delivered the opinion of the court:

This is an appeal from a permanent child custody award. On September 10, 1981, Catherine and Nicholas McKeever were divorced. Temporary custody of their minor children, James, then six, and Katie, age two, was awarded to Catherine McKeever.

During the next nine months, six hearings were held on the issue of permanent custody. Following the hearing on March 19, 1982, the proofs were closed but, on motion of Nicholas McKeever, they were reopened on May 7, 1982, and additional evidence by both parties was presented. At the beginning of the May 7 hearing, the trial judge made the statement that this was a “very, very close case.”

At the conclusion of the May 7 hearing, the matter was taken under advisement, and both parties were asked to file summations and arguments with the trial court. On July 23, 1982, the parties were in court on pending property issues. Written arguments on the property issues were requested of each attorney. Attorney Joe R. Vespa, representing Catherine McKeever, stated that it might be easier to prepare his argument if the court’s decision on the issue of child custody was known. The trial judge then announced substantially as follows:

“In view of all the testimony in this case, especially the testimony at the last hearing, I think it would be in the best interest of the children to award custody to the Father. Child support is set at $50 per week.”

From this July 23, 1982, award of permanent child custody to Nicholas, Catherine McKeever has appealed.

Parenthetically, we note that a dispute exists regarding the exact wording used by the trial judge in announcing the permanent custody award. No court reporter was present at the July 23 hearing, and each party and the trial judge have filed certified bystander’s reports of what transpired then regarding child custody. The bystander’s report filed by Nicholas McKeever is essentially the same as that quoted above, which was submitted by trial judge John D. Sullivan. Catherine McKeever’s report indicates that Judge Sullivan stated: “It is my opinion that because of the evidence introduced at the last hearing, it is in the best interest of the children to be awarded to the father.”

The differences in the language becomes significant in light of the evidence presented at the May 7 hearing. That evidence included testimony of John Dare regarding his physical and emotional involvement with Catherine McKeever; the admission of Nicholas McKeever that he had spent the night on two or three occasions with Dorenda Dare, and the testimony of Father Michael Joseph Ferran who appeared as a character witness for Catherine McKeever.

In this appeal, Catherine McKeever contends that the trial court erred in failing to give adequate consideration both to nonstatutory factors and to those statutory factors found in section 602(a) of the Illinois Marriage and Dissolution of Marriage Act; that the trial court erred in considering the conduct of a present or proposed custodian in violation of section 602(b) of the Act; and that undue emphasis was placed on the May 7, 1982, hearing. Ill. Rev. Stat. 1981, ch. 40, par. 602.

Section 602(a) of the Illinois Marriage and Dissolution of Marriage Act lists factors to be considered by the court in the determination of child custody. Those factors include:

“(1) the wishes of the child’s parent or parents as to his custody;
(2) the wishes of the child as to his custodian;
(3) the interaction and interrelationship of the child with his parent or parents, his siblings and any other person who may significantly affect the child’s best interest;
(4) the child’s adjustment to his home, school and community;
(5) the mental and physical health of all individuals involved; and
(6) the physical violence or threat of physical violence by the child’s potential custodian, whether directed against the child or directed against another person but witnessed by the child.” (Ill. Rev. Stat. 1981, ch. 40, par. 602(a).)

Other factors, not included in the statute, are to be considered as well. (In re Custody of Switalla (1980), 87 Ill. App. 3d 168, 408 N.E.2d 1139.) Our review of the record indicates the court heard and considered testimony on nearly all of the statutory factors and some nonstatutory factors as well. Each parent’s desire for custody was considered, as was the interrelationship of the children with each other, their parents, their grandparents, and John Dare, the man with whom Catherine McKeever had a relationship. In addition, the mental and physical health of the parties and the children was examined. Clearly, the relevant statutory factors were considered.

Catherine specified her regular attendance at church with the children as a nonstatutory factor given inadequate consideration. We do not think the record supports this claim. The testimony of Father Ferran, the pastor of Catherine’s local parish, was heard at the May 7 hearing. He spoke highly of Catherine’s devotion to the church and corroborated Catherine’s testimony regarding her taking the McKeever children to church on a regular basis. Catherine contends that this evidence demonstrates that she is a loving mother who cares deeply about her children’s spiritual development. We agree that the evidence indicates that Catherine is concerned about the spiritual well-being of her children. However, there is nothing in the record to show, as Catherine asserts, that the trial judge did not give adequate consideration to this evidence.

Catherine also contends that the trial court erred in refusing to interview six-year-old James regarding his custodial preferences. Such interviews are discretionary. (Ill. Rev. Stat. 1981, ch. 40, par. 604.) Catherine asserts that James is mature for his age; yet, no evidence to support this assertion was presented. In fact, no request was made that James be interviewed until a post-trial motion was filed by Catherine. Under these circumstances and considering the young age of the child, we find no abuse of the trial court’s discretion in electing not to interview James. In re Padiak (1981), 101 Ill. App. 3d 306, 427 N.E.2d 1372; In re DeFranco (1978), 67 Ill. App. 3d 760, 384 N.E.2d 997.

Furthermore, the record indicates that some evidence of James’ custodial preference was before the court. A letter written by James, which expressed his desire and, purportedly, that of his two-year-old sister Katie, that they remain with their mother was admitted into evidence. The letter also expressed love for their father.

At the May 7, 1982, hearing, John Dare testified regarding his involvement with Catherine McKeever. He admitted spending the night with her on several occasions at her home while the children were in the house. In addition, he stated that he and his two minor children and Catherine and her two children had spent a weekend night in a motel in Galesburg. Everyone shared the same room and he, Catherine and Katie shared a double bed. Testimony was given by John Dare and by Catherine that this outing was for the purpose of allowing the children to swim in the motel’s pool and to visit a nearby shopping mall.

A physical relationship between Catherine and John Dare apparently existed from some time shortly after the McKeever divorce. A love letter written by Catherine to John was established to have been written in the summer of 1980, more than one year before the McKeever divorce. However, no conclusive evidence of a physical relationship existing between the two at that time was presented.

During his testimony at the May 7 hearing, Nicholas McKeever admitted a physical relationship on a few occasions with Dorenda Dare. Dorenda is the wife of John Dare, and the Dares were engaged in a bitter divorce action at the time of the McKeever child custody hearings. Nicholas McKeever stated that he saw nothing wrong with two consenting adults not married to each other having sex even when children were present in the house. The Dare children were present when Nicholas and Dorenda engaged in sexual intercourse but the McKeever children were not.

It is submitted by Catherine McKeever that undue consideration was given to the evidence of her relationship with John Dare while the evidence of Nicholas McKeever’s relationship -with Dorenda was ignored. She contends that a double standard was applied by the trial judge.

While the record indicates that the trial judge placed emphasis on the testimony given at the May 7 hearing, we cannot agree that this fact indicates a double standard was applied. It must be remembered that the testimony of Father Farran was also presented at the May 7 hearing. In a case such as this, where a large amount of evidence presented over a period of months, we must defer to the broad discretion accorded the trial judge in custody cases. He is in a position to observe and evaluate the parties over a period of time and to assess their credibility. The presumption in favor of the trial court’s decision is strong and compelling. In re Brooks (1981), 97 Ill. App. 3d 921, 424 N.E.2d 81.

Nicholas McKeever asserts that the case of Jarrett v. Jarrett (1979), 78 Ill. 2d 337, 400 N.E.2d 421, is controlling. In Jarrett, our supreme court stated that open cohabitation offends prevailing public policy and concluded that the values exhibited by Mrs. Jarrett contravened statutorily declared standards of conduct and endangered the children’s moral development. Jarrett is not controlling in the case at bar. The conduct proscribed in Jarrett was more open and notorious than that of Catherine McKeever. In addition, the Illinois Supreme Court in the recent case of Thompson v. Thompson (1983), 96 Ill. 2d 67, 78, 449 N.E.2d 88, clarified the Jarrett holding in these words:

“Jarrett v. Jarrett (1979), 78 Ill. 2d 337, is authority for the proposition that a child should be placed with the parent who can best serve that child. The Jarrett case does not establish a conclusive presumption that, because a custodial parent cohabit-states] with a member of the opposite sex, the child is harmed. No such presumption exists in this State. The court in Jarrett indicated that a custody award is not arrived at by pressing one lever and mechanically denying custody to one parent; rather all of the circumstances must be considered that affect the best interests of the child. Jarrett v. Jarrett (1979), 78 Ill. 2d 337, 344-45; Ill. Rev. Stat. 1979, ch. 40, par. 602.”

Catherine McKeever was represented in post-trial matters by new counsel. In a post-trial motion (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 1203), Catherine’s new counsel stated that she repeatedly asked her first attorney to put certain matters into evidence but that her attorney denied her the right to do so. She asserted in the motion that her attorney’s position was “continually that ‘they have to prove that you are not entitled to the children.’ ”

On appeal, Catherine contends the trial judge erred in refusing to consider the issue of the ineffectiveness of her first attorney. We find no error since the language contained in Catherine’s motion was insufficient to raise the issue of ineffectiveness of counsel, and the issue cannot be raised for the first time on appeal.

Deferring to the broad discretion of the trial judge, we affirm the judgment of the circuit court of Peoria County awarding permanent custody of the McKeever children to Nicholas McKeever.

Affirmed.

BARRY, J., concurs.

PRESIDING JUSTICE STOUDER,

dissenting:

I believe this case should be remanded to the trial court for reconsideration in light of the decision in In re Marriage of Thompson (1983), 96 Ill. 2d 67, 449 N.E.2d 88. My colleagues recognize, as does the Thompson case, a perspective different from that applied in the prior case of Jarrett v. Jarrett (1979), 78 Ill. 2d 337, 400 N.E.2d 421, when misconduct of the custodial parent is an issue. The majority suggest that even under the perspective or standard of Thompson the trial court’s action ought to be affirmed. I do not think this is an appropriate process to be indulged in by a court of review since it would require us to weigh and evaluate the evidence in the first instance rather than reviewing such a determination by the trial court. The Thompson case having only been recently decided, the trial court did not have the benefit of its teachings and could not have weighed and evaluated the evidence in accord with its more flexible guidelines. It might well be, and I think we should not decide the issue as a matter of law, that the trial court might come to a different conclusion applying the Thompson rather than the rules of Jarrett which it did apply, and for that reason I respectfully dissent from the views of my colleagues.


author: JUSTICE SCOTT

text:
    CENTRAL ILLINOIS LIGHT COMPANY et al., Plaintiffs-Appellees, v. THE DEPARTMENT OF REVENUE, Defendant-Appellant.
    Third District
    No. 82 — 869
    Opinion filed September 12, 1983.

      Neil F. Hartigan, Attorney General, of Springfield (Paul J. Bargiel, of Doss, Puchalski, Keenan & Bargiel, Ltd., Special Assistant Attorney General, of counsel), for appellant.
    Thomas Atherton, of Frings, Bagley, Atherton & Clark, of Pekin, and Michael R. Levinson, James R. Browne, and Thomas F. Dean, all of Kirkland and Ellis, of Chicago, for appellees.
   JUSTICE SCOTT

delivered the opinion of the court:

This case is before this court on the appeal of the Department of Revenue of the State of Illinois (the Department) from a judgment of the circuit court of Tazewell County which reversed an administrative decision imposing sales and use taxes on Central Illinois Light Company (CILCO) as to purchase of certain items which CILCO claims to be components for various pollution control facilities.

The facilities in question are a closed cycle cooling pond including a dam and pumphouse and an electronic scale at a dry ash collection facility.

On those purchases. where CILCO was to have paid use tax directly to the Department, CILCO did not pay the tax because of its claim that the facilities in question were for pollution control and hence such purchases were tax exempt. On those purchases where CILCO paid use taxes to the supplier, the suppliers in turn paid an equal amount of tax to the Department. At CILCO’s request each supplier issued CILCO an unconditional promissory note in the amount of the tax paid and at CILCO’s expense and direction filed a claim for credit for the retailers’ occupation tax. This procedure was followed in an effort to meet the requirement of the Retailers’ Occupation Tax Act, which provides that a retailer may be granted a claim for credit or refund where it appears that the claimant has unconditionally repaid the purchaser any amount of tax collected from the purchaser. See Ill. Rev. Sat. 1981, ch. 120, par. 445.

A further recitation of facts will be set forth as they become pertinent to the determination of the issues presented in this appeal. We are mindful that in addition to CILCO there are other parties (suppliers) who are claiming a tax refund. In determining the issues presented in this appeal we will refer only to the claimant CILCO; however, the determination of the issues will apply to all claimants unless otherwise specified.

The Department argues that CILCO is not entitled to the tax exemption contained in section 2a of the Use Tax Act (Ill. Rev. Stat. 1979, ch. 120, par. 439.2a) because the Duck Creek Station cooling pond and the E. D. Edwards electronic truck scale do not qualify as pollution-control facilities.

Section 2a provide as follows:

“ ‘Pollution control facilities’ means any system, method, construction, device or appliance appurtenant thereto sold or used or intended for the primary purpose of eliminating, preventing, or reducing air and water pollution as the term ‘air pollution’ or ‘water pollution’ is defined in the ‘Environmental Protection Act,’ enacted by the 76th General Assembly, or for the primary purpose of treating, pretreating, modifying, or disposing of any potential solid, liquid or gaseous pollutant which if released without such treatment, pretreatment, modification or disposal might be harmful, detrimental or offensive to human, plant or animal life, or to property. ***.” Ill. Rev. Stat. 1979, ch. 120, par. 439.2a.

Section 2a of the Use Tax Act has an identical counterpart in the Retailers’ Occupation Tax Act. (See Ill. Rev. Stat. 1979, ch. 120, par. 440a.) The Revenue Act of 1939 also gives favored treatment to pollution control facilities in the property tax provisions of our Revenue Act of 1939. See Ill. Rev. Sat. 1979, ch. 120, par. 502a — 1 et seq.

Another statutory provision pertinent to CILCO’s claim for tax exemption is section 21a — 5 of our Revenue Act of 1939, which provides as follows:

“Sec. 21a — 5. Certification procedure. Application for a pollution control facility certificate shall be filed with the Pollution Control Board. The application shall be filed in such manner and in such form as may be prescribed by regulations issued by the Pollution Control Board, and shall contain appropriate and available descriptive information concerning anything claimed to be entitled in whole or in part to tax treatment as a pollution control facility as defined in this act. If it is found that the claimed facility or relevant portion thereof is a pollution control facility as defined herein, the Pollution Control Board, acting through its Chairman or his specifically authorized delegate, shall enter a finding and issue a certificate to that effect. Such certificate shall require tax treatment as a pollution control facility in conformity with this State’s taxing provisions providing for such treatment, but only for the portion certified if only a portion be certified. The effective date of a certificate shall be the date of the making of the application for the certificate or the date of the construction of the facility, whichever is later.” Ill. Rev. Stat. 1979, ch. 120, par. 502a — 5.

The foregoing provision section 21a — 5 requires that a facility certified by the Environmental Protection Agency pursuant to the provisions of the Act shall be treated as a pollution control facility for taxation purposes.

In the instant case the Duck Creek cooling pond and the E. D. Edwards fly ash collection station, including the electronic scale, were certified by the Environmental Protection Agency as having as their primary purpose pollution control. CILCO argues that such certification is conclusive evidence that the facilities’ purpose is pollution control and hence it is entitled to the tax exemptions contained in section 2a of the Use Tax Act. Ill. Rev. Stat. 1979, ch. 120, par. 439.2a.

The Department argues that section 21a — 5 of the Revenue Act of 1939 is limited in its application to providing exemption from only ad valorem real and personal property taxes. Stated otherwise, it is the Department’s contention that the section has no application to excise taxes such as the retailers’ occupation tax and the use tax.

The trial court disagreed, as we do, with the argument of the Department.

While section 21a — 5 is found in those provisions of the Revenue Act of 1939 which are concerned with real and personal property taxation, we deem the following portion of the section to be instructive:

“Such certificate shall require tax treatment as a pollution control facility in conformity with the State’s taxing provisions providing for such treatment ***.” Ill. Rev. Stat. 1979, ch. 120, par. 502a — 5.

We note that the foregoing language refers to “this State’s taxing provisions.” The word “provisions,” being in the plural, necessitates an interpretation that the tax treatment referred to was to be from various taxes, i.e., the use tax and the retailers’ occupation tax as well as from property taxation. This argument is buttressed by the observation that in addition to the definition of pollution control facilities as contained in the real and personal property tax act (Ill. Rev. Stat. 1981, ch. 120, par. 502a — 2), the same definitions appear in the Use Tax Act (Ill. Rev. Stat. 1981, ch. 120, par. 439.2a) and the Retailers’ Occupation Tax Act (Ill. Rev. Stat. 1981, ch. 120, par. 440a). It would be incongruous to conclude that the cooling pond and the truck scales conformed to one definition for the purpose of one tax but did not conform to identical definitions for the purpose of other taxes.

Having concluded that the pollution control facilities are exempt from the imposition of use taxes by virtue of statutory enactments, it may well be unnecessary to consider whether the cooling pond and truck scales are pollution control facilities. The Department, however, argues so strenuously that they do not qualify as such facilities we feel constrained to examine the Department’s contention.

The evidence discloses that the Duck Creek cooling pond is an artificial lake created for the purpose of eliminating thermal pollution caused by the discharge of heated cooling water from the Duck Creek facility. Originally heated cooling water from the Duck Creek Station was to have been discharged into the Illinois River. Water would have been taken from the river, circulated in such a manner as to cool turbine condensers and then discharged back into the river. United States and Illinois environmental protection agencies established requirements which prevented CILCO from discharging heated water directly into the river. CILCO as the result of these requirements or regulations constructed a cooling pond into which the heated water could be discharged. It is true as the Department asserts that the water in the pond after being cooled is then again circulated through the plant for the purpose of cooling its turbine condensers. The evidence establishes that the primary purpose of the cooling pond is to capture heated water and to prevent it from getting into the Illinois River in an overheated condition. Had there been no regulations preventing the disposal of heated water into the river there would have been no cooling pond. Its primary purpose was and is to prevent pollution.

The dry fly ash collection facility is designed to remove fly ash from the hoppers of three boilers. Fly ash is a pollutant, and its discharge into the environment is governed by United States and Illinois pollution control regulations. CILCO removes the ash from hoppers and hauls it away in trucks for safe disposal. The electronic truck scale was purchased in order to weigh trucks loaded with ash so that compliance will be had with highway weight requirements. We again have a situation where if it were not for environmental pollution regulations there would be no need for the scales.

The Department in support of its contention that the primary purpose of the cooling pond and scales is not for pollution control relies on the case of Illinois Cereal Mills, Inc. v. Department of Revenue (1976), 37 Ill. App. 3d 379, 346 N.E.2d 69. In Cereal Mills it was the finding of the court that two gas boilers did not have as their primary purpose pollution control even though they were installed at the request of the Environmental Protection Agency to replace coal-fired boilers which caused pollution. The case of Cereal Mills is distinguishable from the situation in the instant case because the primary purpose of the gas-fired boilers was to produce heat, not to prevent pollution. The fact that the new boilers decrease air pollution was an incidental purpose. In Cereal Mills boilers were an absolute necessity, where in the instant case CILCO, were it not for pollution control regulations, could have operated their plant without the cooling pond and truck scales.

The Department lastly argues that CILCO’s suppliers are not entitled to claim for credit or refund of use taxes because the issuance of promissory notes by them to CILCO does not satisfy the requirement of the refund statute that claimant bear the burden of the tax. We disagree.

Our Revenue Act of 1939 provides that a retailer may be granted a claim for credit or refund where it appears that the claimant has unconditionally repaid to the purchaser any amount collected from the purchaser. (Ill. Rev. Stat. 1981, ch. 120, par. 445.) Such a requirement prevents a retailer from being unjustly enriched at the expense of a customer who may have no means of recovering a tax refund if the retailer is successful in obtaining one. The supplier’s use of promissory notes in the instant case satisfies and prevents the unjust enrichment purpose of our Revenue Act of 1939. If CILCO is entitled to a refund of the payment of use taxes a demand will be made for the payment of the notes which will prevent the unjust enrichment of the supplier.

For the reasons stated the judgment of the circuit court of Tazewell County is affirmed.

Affirmed.

HEIPLE and BARRY, JJ., concur.