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King v. First Capital Financial Services Corp.4/21/2005
Docket Nos. 97263 & 97761 cons.-Agenda 26-September 2004.
In these consolidated appeals from Cook County and Rock Island County, plaintiff mortgagors brought actions against defendant mortgagees alleging that defendants had engaged in the unauthorized practice of law. Plaintiffs alleged that defendants had prepared notes, mortgages, and other documents in connection with plaintiffs' mortgage loan transactions and had unlawfully charged plaintiffs fees for those services. Plaintiffs also alleged claims for money had and received and for violations of the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) ( 815 ILCS 505/2 (West 2002)). The circuit court in the King case granted First Capital's section 2-615 motion to dismiss (735 ILCS 5/2-615 (West 2002)) the claim for unauthorized practice of law, but denied the motion as to the other counts of the complaint. Defendants in the consolidated cases (hereafter, the Jenkins case) filed motions to dismiss under sections 2-615 and section 2-619 (735 ILCS 5/2-619 (West 2002)). The motions were heard by one judge, who dismissed the complaints after hearing on the motions.
BACKGROUND
In No. 97263, the King case, all but one of the four counts of the complaint contained class action claims. Count I, the individual claim, alleged that First Capital violated the federal Truth in Lending Act (15 U.S.C. ยง1638 (2000)) and regulations thereunder by failing to accurately disclose the finance charge and amount financed. Count I prayed for statutory damages, attorney fees and costs. Count II alleged a cause of action for the unauthorized practice of law based upon First Capital's preparation of the loan documents for a fee. Count III alleged that First Capital had violated the Consumer Fraud Act by failing to disclose to the Kings and the class members the material fact that the document preparation services for which it charged a fee constituted the practice of law, but were not performed by an attorney. Count IV alleged a claim for money had and received. It alleged that First Capital had obtained money through inequitable conduct in charging the document preparation fees and was obligated to make restitution. Counts II and III prayed for compensatory and punitive damages, in addition to attorney fees and costs. Count IV prayed for restitution and costs.
First Capital moved to dismiss counts II, III, and IV of the complaint. The motion alleged that there is no private right of action for the unauthorized practice of law absent allegations of negligence or misrepresentation, allegations not made by the Kings in their complaint. In addition, the motion alleged that because First Capital's preparation of the loan documents was incidental to its business, it did not constitute the unauthorized practice of law. With regard to the complaint's claims under the Consumer Fraud Act and for money had and received, the motion alleged that these claims were insufficient because they relied on the unauthorized practice of law claim.
The circuit court of Rock Island County granted First Capital's motion to dismiss count II of the complaint, but denied the motion as to counts III and IV. The court granted First Capital's request for a finding under Supreme Court Rule 308(a) (155 Ill. 2d R. 308(a)). The court certified the following questions: (1) whether a lender that prepares documents for use in loan transactions in which the lender is involved and charges the borrower for the preparation of those documents is engaged in the unauthorized practice of law, and (2) assuming arguendo that the answer to the first issue is "yes," whether a private cause of action exists for the lender's unauthorized practice
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