Howard v. Chicago Transit Authority ( 2010 )

FIRST DIVISION
June 7, 2010
No. 1-08-3177
HUGH HOWARD, Individually and on Behalf ) Appeal from the
of All Similarly Situated Persons, ) Circuit Court of
) Cook County.
Plaintiff-Appellant, )
) No. 05CH19182 cons.
v. ) with Nos. 03CH116 &
) 06CH23586
CHICAGO TRANSIT AUTHORITY, an Illinois )
Municipal Corporation, ) The Honorable
) Stuart E. Palmer,
Defendant-Appellee. ) Judge Presiding.
JUSTICE LAMPKIN delivered the opinion of the court:
Plaintiff, Hugh Howard, filed a putative class action
complaint against defendant, Chicago Transit Authority (CTA),
alleging defendant’s practice of allowing transit cards to expire
one year after issuance while retaining any unused money left on
the transit cards violates passengers’ constitutional and
statutory rights, breaches the CTA’s fiduciary obligations, and
entitles passengers to equitable relief. The trial court
dismissed the complaint pursuant to section 2-619(a)(9) of the
Code of Civil Procedure (Code) (735 ILCS 5/2-619(a)(9) (West
2004)). Plaintiff contends the trial court erred in dismissing
his complaint. Based on the following, we affirm.
FACTS
In 1997, plaintiff began using CTA transit cards. A CTA
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passenger can preload a self-designated amount of money on a
transit card and the per-ride fee is deducted each time a
passenger uses the card as payment for transport. In 2005,
plaintiff attempted to use one of his transit cards; however, it
was denied. Plaintiff learned that his transit card had expired.
Up until that time, plaintiff was unaware that transit cards
carried expiration dates printed on the back side of the cards.
Once a transit card expired, plaintiff lost any remaining balance
on that card.
On December 5, 2005, plaintiff filed his second amended
class action complaint, which is the subject of this appeal. Two
other individuals, Edwin Pilcher and Kecia Jones, similarly filed
class action complaints based on the same operative facts.
Eventually, Howard’s and Pilcher’s complaints were consolidated
and Jones’ complaint was dismissed for want of prosecution.1
In his second amended complaint, plaintiff asserted eight
causes of action: (count I) violations of the due process and
equal protection clauses of the federal Constitution; (count II)
violations of the due process and equal protection clauses of the
Illinois Constitution; (count III) a request for a declaratory
1
In the background of the case, there were numerous disputes
among the attorneys of record in the various cases to disqualify
one another from representing the named parties.
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judgment imposing a constructive trust; (count IV) breach of
fiduciary duty; (count V) unjust enrichment; (count VI)
conversion; (count VII) violation of the Illinois Consumer Fraud
and Deceptive Business Practices (815 ILCS 505/1 et seq. (West
2004)); and (count VIII) violation of the Illinois Uniform
Deceptive Trade Practices Act (Deceptive Trade Practices Act)
(815 ILCS 510 et seq. (West 2004)). The CTA filed a section 2-
619.1 (735 ILCS 5/2-619.1 (West 2004)) motion to dismiss,
alleging plaintiff’s claims failed to sufficiently state the
named causes of action pursuant to section 2-615 of the Code (735
ILCS 5/2-615 (West 2004)) and, in the alternative, the claims
were defeated by an affirmative matter, namely, plaintiff’s
acceptance of the CTA’s contract of carriage, pursuant to section
2-619(a)(9) of the Code (735 ILCS 5/2-619(a)(9) (West 2004)). In
response, plaintiff withdrew counts I and VII of his second
amended complaint.
The circuit court granted the CTA’s motion to dismiss
pursuant to section 2-619(a)(9).2 The court found plaintiff’s
claims based on the CTA’s alleged “wrongful conduct” could not
stand because of the contractual relationship between the
parties. The court said plaintiff failed to account for the fact
2
The court did not rule on the CTA’s section 2-615 motion to
dismiss.
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that any money lost on the expired transit cards resulted “from
his own negligence” because he had several options to prevent
such a loss. The court pointed to the printed terms on the
transit card, specifically, the expiration date and the language
providing that the transit card could not be redeemed, refunded,
or replaced, and held that those terms were binding on plaintiff
because he entered a contract for carriage with the CTA when he
purchased the transit card. Specifically, the court said, “[t]he
transit card has an expiration date. It cannot be combined with
values on other cards. It cannot be replaced. It cannot be
refunded. It cannot be redeemed for cash. The message is clear,
use it up by the expiration date or lose it.” (Emphasis in
original.)
DECISION
Section 2-619(a)(9) of the Code permits the involuntary
dismissal of a complaint when “the claim asserted against
defendant is barred by other affirmative matter avoiding the
legal effect of or defeating the claim.” 735 ILCS 5/2-619(a)(9)
(West 2004). When considering a motion to dismiss, this court
“must interpret all pleadings and supporting documents in the
light most favorable to the nonmoving party.” In re Chicago
Flood Litigation, 176 Ill. 2d 179, 189, 680 N.E.2d 265 (1997).
Our review is de novo. In re Chicago Flood Litigation, 176 Ill.
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2d at 189.
I. The Parties’ Contract For Carriage
Plaintiff contends the trial court erred in finding that the
terms and conditions found on the back of the transit card were
contractual, thereby defeating his claims of wrongdoing against
the CTA. Plaintiff admits that an expiration date is printed on
the transit card and that there is language providing that the
card cannot be replaced, refunded, or redeemed for cash.
Plaintiff, however, contends the language at issue refers only to
the use of the card itself and not to the use of the money placed
on the card. We disagree.
It is well established that a passenger enters a contract
for carriage with a carrier when the passenger offers himself to
ride on the carrier’s transportation and the carrier expressly or
impliedly accepts by carrying the passenger to the agreed-upon
destination for a designated fare. O’Donnell v. Chicago &
Northwestern Ry. Co., 106 Ill. App. 287 (1903). Plaintiff and
the CTA entered a contract for carriage when plaintiff purchased
a transit card by depositing a chosen monetary amount and then
used that transit card to ride the CTA to his desired
destination, the requisite fair being deducted from the transit
card balance in the process.
Moreover, the terms printed on plaintiff’s transit cards
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became part of the contract for carriage. Our supreme court
said:
“ ‘The settled opinion is, that a passage ticket, in
the ordinary form, is merely a voucher, token or
receipt, adopted for convenience, to show that the
passenger has paid his fare from one place to another,
and does not constitute the contract of carriage,
although it often does have upon it some condition or
limitation which enters into and forms a part of the
contract. Accordingly, it is admissible to prove by
parol evidence the terms of the contract in fact
entered into between the carrier and the passenger.’ ”
(Emphasis added.) Chicago & Alton R.R. Co. v.
Dumser, 161 Ill. 190, 194-95, 43 N.E. 698 (1896).
The terms on a fare pass are incorporated into the carrier’s
contract for carriage and are enforceable as written. See Stack
v. Regional Transportation Authority, 101 Ill. 2d 284, 290, 461
N.E.2d 969 (1984).
Here, the record demonstrates that the back side of the
transit card said the card “must be used by the expiration date
shown” and the “[p]urchaser does not have the right to have
his/her card replaced, refunded or redeemed for cash.” In
addition, the regulations section of the transit card provided
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that “[u]se of the Transit Card is subject to all applicable
tariffs, terms, conditions, rules, regulations, polies and
procedures CTA may in its discretion adopt from time to time.”
Therefore, by purchasing and using the transit card, plaintiff
agreed to its terms and conditions. The terms and conditions
clearly stated that plaintiff was required to use the transit
card by the expiration date provided. Moreover, plaintiff was
not entitled to a refund of any sort. As a result, if plaintiff
failed to redeem the total amount of money deposited on the card
by the date shown, he was not entitled to a refund of the
remaining balance.
The use of the card is part and parcel of using the money
deposited on the card. Without money deposited on the card,
plaintiff could not use the transit card to fulfill his fair
obligation, and the CTA could not accept the transit card as
payment satisfaction if the card was expired or did not have
enough money remaining on balance for the fare.
Additionally, contrary to plaintiff’s contention, the
contract between the parties was not an escrow contract. In an
escrow contract, a grantor and a third party execute a written
instrument under which the grantor gives funds to the third party
to hold until a designated time when those funds are delivered to
a grantee. Midwest Decks, Inc. v. Butler & Baretz Acquisitions,
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Inc., 272 Ill. App. 3d 370, 379, 649 N.E.2d 511 (1995). Here,
there is no third party temporarily holding plaintiff’s funds for
later delivery to the CTA. Rather, plaintiff directly delivered
the funds for the transit card to the CTA when he purchased it.
Also, there is no written instrument detailing the alleged escrow
agreement.
II. Plaintiff’s Claims Were Properly Dismissed
A. Violation of the Illinois Constitution (Count II)
Plaintiff contends the trial court erred in dismissing
count II because the CTA engaged in inverse condemnation by
“taking” the remaining balance on his transit card without due
process or just compensation. It is well settled that courts
should avoid constitutional questions where a case may be decided
on other grounds. Beahringer v. Page, 204 Ill. 2d 363, 370, 789
N.E.2d 1216 (2003). Here, we have concluded, based on theories
of contract, that plaintiff entered into a contract for carriage
with the CTA when he purchased his transit card. The terms and
conditions printed on the back of the transit card became part of
the contract. The alleged “taking” fell squarely under those
terms and conditions when plaintiff failed to use the entirety of
his balance prior to the expiration date. Count II was properly
dismissed.
B. Declaratory Relief (Count III)
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Plaintiff contends the trial court erred in failing to award
declaratory relief in the form of a constructive trust.
Declaratory judgment allows a trial court to become involved
in a controversy “ ‘ “after the dispute has arisen, but before
steps are taken which give rise to claims for damages or relief.
The parties to the dispute can then learn the consequences of
their actions before acting.” [Citations.] ’ ” Brandt
Construction Co. v. Ludwig, 376 Ill. App. 3d 94, 101, 878 N.E.2d
116 (2007). “[T]he procedure should be used to afford security
and relief against uncertainty with a view to avoiding
litigation, not toward aiding it.” Lihosit v. State Farm Mutual
Automobile Insurance Co., 264 Ill. App. 3d 576, 580, 636 N.E.2d
625 (1993).
Declaratory judgment was not appropriate here. The parties’
positions were fixed when the controversy was brought to the
trial court; in fact, plaintiff had filed a complaint based on
the actions giving rise to the claim for relief. Plaintiff
asserted a challenge because of his expired transit card and the
CTA refused to replace, refund, or redeem the transit card for
cash. The parties had already acted and litigation had already
ensued. The time for a declaratory action had passed. Count III
was properly dismissed.
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C. Breach of Fiduciary Duty (Count IV)
Plaintiff contends the CTA had a fiduciary duty “for the
unused portion of money on deposit.” Plaintiff’s contention
fails. “It is well established that parties to a contract do not
stand in a fiduciary relationship to one another.” Colmar, Ltd.
v. Fremantlemedia North America, Inc., 344 Ill. App. 3d 977, 994,
801 N.E.2d 1017 (2003). Plaintiff failed to present any facts
outside of the parties’ contractual relationship to demonstrate
that the CTA is plaintiff’s fiduciary. Count IV was, therefore,
properly dismissed.
D. Unjust Enrichment (Count V)
Plaintiff contends the CTA was unjustly enriched by
retaining the balance on the transit cards once they expired.
The theory of unjust enrichment is based upon an implied contract
of law and is not available where the parties’ relationship is
governed by contract. Wheeler-Dealer, Ltd. v. Christ, 379 Ill.
App. 3d 864, 872, 885 N.E.2d 350 (2008). As repeatedly stated,
the parties entered a contract for carriage. Moreover, implied
contracts are not recognized where one of the parties is a
municipal corporation. McMahon v. City of Chicago, 339 Ill. App.
3d 41, 48, 789 N.E.2d 347 (2003). The circuit court properly
dismissed count V.
E. Conversion (Count VI)
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Plaintiff contends the CTA converted the funds remaining on
his transit card when it expired.
To assert a claim for conversion, a plaintiff must establish
that: (1) he has a right to the property at issue; (2) he has an
absolute and unconditional right to the immediate possession of
that property; (3) he made a demand for possession; and (4) the
defendant wrongfully and without authorization assumed control,
dominion, or ownership over the property. Kovitz Shifrin Nesbit,
P.C. v. Rossiello, 392 Ill. App. 3d 1059, 1063-64, 911 N.E.2d
1180 (2009).
Plaintiff cannot assert a claim for conversion. Plaintiff
did not have a right to the property at issue, i.e., the money
deposited on the transit card. Once plaintiff purchased the
transit card with the chosen amount, he relinquished control over
the money and gave the CTA permission to deduct the requisite
fare when he used the card as payment for transit. The transit
card clearly stated that it could not be replaced, refunded, or
redeemed for cash. Therefore, upon purchase of the transit card,
plaintiff no longer had an absolute and unconditional right to
the immediate possession of the money that he paid to obtain the
card. Rather, he permitted the CTA to assume control over the
money by way of deducting the appropriate balance from the
transit card each time it was used to pay a fare. Count VI was
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properly dismissed.
F. Violation of the Deceptive Trade Practices Act (Count VIII)
Plaintiff contends the trial court erred in finding that he
could not seek injunctive relief under the Deceptive Trade
Practices Act. In his complaint, plaintiff alleged the CTA
engaged in deceptive trade practices pursuant to sections
2(a)(5), 2(a)(10), and 2(a)(12) of the Deceptive Trade Practices
Act (815 ILCS 510/2(a)(5), (a)(10), (a)(12) (West 2004)) “when,
in the course of its business, the entity represents that goods
and services have characteristics or qualities that they do not
have, advertises goods and services with intent not to supply
reasonably expectable public demand, or engages in any other
conduct which similarly creates a likelihood of confusion or of
misunderstanding.”
“In order to maintain such an act, the consumer must
‘allege facts which would indicate that he is “likely
to be damaged” in the future.’ [Citations.] The problem
in most consumer actions under the [Deceptive Trade
Practices Act] is the inability to allege facts
indicating the likelihood of damage in the future.
[Citation.]” Popp v. Cash Station, Inc., 244 Ill. App.
3d 87, 99, 613 N.E.2d 1150 (1992).
Plaintiff cannot do so here. Plaintiff admittedly became aware
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of the terms and conditions of the transit card in 2005. The
record demonstrates plaintiff has since ceased using transit
cards. Therefore, plaintiff can, and has, avoided the
consequences of an expired transit card. Glazewksi v. Coronet
Insurance Co., 108 Ill. 2d 243, 253, 483 N.E.2d 1263 (1985).
Plaintiff cannot demonstrate he will likely be damaged by the
CTA’s transit card practices in the future. Count VIII was
properly dismissed.
CONCLUSION
We affirm the judgment of the trial court dismissing
plaintiff’s complaint.
Affirmed.
HALL, P.J., and GARCIA, J., concur.
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REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT
HUGH HOWARD, Individually and on Behalf of
All Similarly Situated Persons,
Plaintiff-Appellant,
v.
CHICAGO TRANSIT AUTHORITY, an Illinois
Municipal Corporation,
Defendant-Appellee.
No. 1-08-3177
Appellate Court of Illinois
First District, FIRST DIVISION
June 7, 2010
Justice Bertina E. Lampkin authored the opinion of the court:
Presiding Justice Hall and Justice Garcia concur.
Appeal from the Circuit Court of Cook County.
The Hon. Stuart E. Palmer, Judge Presiding.
COUNSEL FOR APPELLANT
Zimmerman Law Offices, P.C., Chicago, IL 60603
OF COUNSEL: Thomas A. Zimmerman, Jr. and
Adam M. Tamburelli
and
Vrdolyak Law Group, LLC., Chicago, IL 60610
OF COUNSEL: John K. Vrdolyak
COUNSEL FOR APPELLEE
Kent S. Ray, Acting General Counsel of the Chicago
Transit Authority, Chicago, IL 60680-7564
OF COUNSEL: Brad Jansen, Acting Deputy Counsel
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and Stephen L. Wood, Chief Attorney
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