In November 2006, Jose Lopez lent Jesus Quintana $20,570. The purpose of the loan was for Quintana to purchase a car. There was no written agreement for the loan, just an oral contract.
According to Lopez’s lawsuit, Quintana defaulted on the loan by choosing not to make his payments in November 2009. Lopez filed a lawsuit to collect the balance of the loan. Quintana responded by moving to dismiss.
Quintana raised the statute of frauds, seeking to bar Lopez’s suit because he wanted enforcement of an oral agreement that would not be completed within a year of the date agreed upon in violation of the statute of frauds. The statute of frauds is a legal principle that requires certain contracts to be reduced to writing.
Quintana stated in his affidavit, which he supplied with the motion, that he did not borrow the money from Lopez to purchase a car. Before the court ruled on the motion to dismiss, the parties entered into an agreed order. It was agreed that Quintana would pay Lopez $10,285, which was half the amount Lopez claimed he was owed. The agreed order called for Quintana to make 12 equal monthly installment payments of $857.08.
In the agreed order, it was noted that if Quintana defaulted on the payment plan or was late 15 days or more in any given month, a judgment would be entered against Quintana for the full $20,570.
On Feb. 1, 2013, Lopez filed a motion to enforce the terms of the agreed order. The motion was titled “Motion to Vacate the Agreed Order” and it requested that a judgment be entered against Quintana in the amount of $13,682, which was the balance of the amount unpaid.
Lopez claimed that Quintana had repeatedly been over 15 days late in making payments. Lopez attached checks from Quintana indicating late payments. The trial judge entered an order vacating the agreed order and entered judgment against Quintana. Quintana moved to reconsider the court’s decision. He argued that Lopez was asking for rescission of the contract. He said it should be denied because Lopez failed to allege substantial non-performance or that he had been prejudiced by the late payments.
Rescission of contract is an action that, if successful, would place the parties in the same place they were before the contract was entered into and performed. In other words, undo the contract and return the parties to the starting point and return any monies paid or any property transferred.
In addition, Quintana said that Lopez had, by accepting the late payments, waived any right he may have had to object about the payments being late. The trial court disagreed and found for Lopez. Quintana appealed.
The appellate court was not any more amenable to Quintana’s arguments. Despite the fact that Lopez titled his motion as motion to vacate the agreed order, the trial judge and the appellate panel felt that the content of Lopez’s motion was a request for enforcement.
Lopez was seeking enforcement of the terms of the agreed order, which related to Quintana making late payments. The appellate court noted that the motion itself was a more significant determiner of how it should be treated than the title of the motion.
The court found that it was not a motion to vacate at all and it wasn’t a request for rescission because that would require Lopez returning $6,888 that was already paid to him by Quintana. Therefore, Quintana was incorrect in asserting that Lopez had to prove substantial non-performance and detrimental reliance.
The appeals panel held that Lopez had to show only that the payments had been made late to invoke the relevant clause of the contract. Quintana also argued that Lopez had repeatedly accepted Quintana’s late payments without any objection and therefore waived his right to complain about the breach of contract.
The appellate court noted that Quintana chose not to cite any authority to support this principle of law and that the relevant case law requires an explicit manifestation of intent to waive this sort of right.
The contract contained no terms whereby Lopez would have waived his right to enforce the agreement if he accepted late payments. Therefore, the appellate court found that Lopez had not waived that right. The court affirmed the trial court’s decision.
Jose Lopez v. Jesus Quintana, No. 2014 IL App (1st) 131518-U.
Kreisman Law Offices has been handling breach of contract cases for individuals and families for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Lincolnwood, Lincolnshire, Homewood, Orland Park, Maywood, Richton Park, Lansing, Elmhurst, Elmwood Park, Melrose Park and Hinsdale, Ill.
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