Friday, February 18, 2011

Illegality of Contract Not a Bar to Illinois Consumer Protection Act Claim

This posting was written by Jody Coultas, Editor of CCH State Unfair Trade Practices Law.

A group of Mexican citizens living in the United States could bring an Illinois Consumer Fraud and Deceptive Business Practices Act (CFA) claim, despite a trial court finding that the claim was barred by the doctrine of illegality of contract and the statute of limitations, according to an Illinois appellate court.

The Mexican citizens alleged that the defendants falsely promised citizenship documents and adjustment to legal permanent residency status in exchange for $15,000. The trial court agreed with the defendants that the claims must be dismissed because the agreement between the parties was illegal and could not be enforced by the courts.

Immigration Services

The CFA, however, contains provisions created to deter abuses of people seeking immigration services. The statute requires a person offering such services to register with the Illinois Attorney General, provide written contracts, and post fees and other information in the primary language of the customer.
While the agreement was clearly illegal, the plaintiffs were not seeking to enforce the contract; they were attempting to recover money lost as a result of the CFA violation.

Allowing the claim to proceed would not be equivalent to enforcing an illegal contract, the court ruled. The defendants argued that the very actions the CFA prohibits could be used as a defense to CFA claims. Thus, the CFA claim was remanded for further proceedings.

Statute of Limitations

Claims under the CFA are subject to a three-year statute of limitations. Claims begin to accrue when the plaintiff knows or reasonably should know of his injury and also knows or reasonably should know that it was wrongfully caused.

Because the Mexican citizens were not reasonably aware of the injury until 2007—and the claim was filed in 2009—the claim was not barred.

The decision is Gamboa v. Alvarado, CCH State Unfair Trade Practices Law ¶32,195.

Further information about CCH State Unfair Trade Practices Law appears here.

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