Steinberg V. Chicago Medical School

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• Supreme Courtroom of Illinois.
• 1977
• December
• STEINBERG five. CHICAGO MEDICAL SCHOOL

• STEINBERG v. CHICAGO MEDICAL School Supreme Court of Illinois. Dec 12, 1977
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69 Ill.second 320 371 N.E.2d 634

Important Paras

• It is immaterial here that the misrepresentation consisted of a statement in the medical school catalog, referring to future conduct, that "the student's potential for the study and practice of medicine volition exist evaluated on the footing of academic achievement, Medical Higher Admission Test results, personal appraisals past a pre-professional advisory committee or private instructors, and the personal interview, if requested past the Committee on Admissions." We concede the general rule denies recovery for fraud based on a false representation of intention or time to come conduct, merely there is a recognized exception where the imitation hope or representation of futurity behave is alleged to be the scheme employed to accomplish the fraud. ( Willis five. Atkins (1952), 412 Ill. 245, 260; Roda v. Berko (1948), 401 Ill. 335, 340; Carroll five. Outset National Banking company (seventh Cir. 1969), 413 F.2d 353, 358; Howard v. Howe (7th Cir. 1932), 61 F.second 577, 579.) Such is the situation here.Go to

• "Prerequisites for the Maintenance of a Form Action.

  (a) An activeness may be maintained equally a class action in any court of this Country and a party may sue or exist sued every bit a representative party of the class merely if the court finds:

  (1) The class is so numerous that joinder of all members is impracticable.

  (2) There are questions of fact or police force common to the class, which common questions predominate over whatsoever questions affecting only individual members.

  (3) The representative parties will fairly and adequately protect the involvement of the course.

  (four) The grade action is an appropriate method for the fair and efficient adjudication of the controversy."

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• Consideration is a bones chemical element for the being of a contract. ( Moehling v. West.E. O'Neil Construction Co. (1960), xx Sick.2d 255, 265; Green v. Ashland Sixty-Third State Bank (1931), 346 Ill. 174, 178.) Any act or promise which is of benefit to i party or disadvantage to the other is a sufficient consideration to support a contract. ( Dark-green v. Ashland Sixty-Tertiary State Bank (1931), 346 Ill. 174, 178.) The awarding fee was sufficient consideration to support the understanding betwixt the bidder and the school.Become to
• That the Consumer Fraud and Deceptive Business concern Practices Act (Sick. Rev. Stat. 1973, ch. 121 1/2, par. 261 et seq.) is inapplicable is patent from the title of the Deed: "An Act to protect consumers and borrowers and businessmen against fraud, unfair methods of competition and unfair or deceptive acts or practices in the bear of whatever trade or commerce * * *." A "consumer" is "whatsoever person who purchases or contracts for the purchase of merchandise * * *." (Ill. Rev. Stat. 1973, ch. 121 1/ii, par. 261(e).) Obviously, plaintiff and those whom he represents were non consumers. The Compatible Deceptive Trade Practices Act (Ill. Rev. Stat. 1973, ch. 121 1/2, par. 311 et seq.) is limited to goods or services. It is not relevant.Go to
• Robert Steinberg received a catalog, applied for admission to defendant, Chicago Medical School, for the academic year 1974-75, and paid a $15 fee. He was rejected. Steinberg filed a course action against the school claiming information technology had failed to evaluate his awarding and those of other applicants according to the academic criteria in the school's bulletin. According to the complaint, defendant used nonacademic criteria, primarily the ability of the applicant or his family to pledge or make payment of big sums of coin to the school.Go to
• Here an action for fraud is consequent with the recognition of a contract action. The law creates obligations "on the ground that they are dictated by reason and justice." ( People v. Dummer (1916), 274 Ill. 637, 641.) The right to recover on a "effective contract," although phrased in contract terminology, is not based on an agreement between parties but is an obligation created by law. "Such contracts are contracts just in the sense that [they] * * * are created and governed past the principles of equity." ( People v. Dummer (1916), 274 Ill. 637, 642.) And then here the facts of this situation mandate that equity imply an obligation by the accused. We note this since the circumstances before u.s. justify a contract activeness, as well every bit a fraud activeness, or, in the effect no contract in fact can exist proven, an action on an implied-in-law obligation of the accused.Go to

• "A misrepresentation in lodge to plant a fraud must consist of a statement of material fact, false and known to exist so past the party making it, made to induce the other party to deed, and, in acting, the other party must rely on the truth of the statement. ( Roda five. Berko, 401 Sick. 335.)"

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• The trial court dismissed the complaint for failure to state a crusade of action. The appellate courtroom reversed as to count I, the contract action, and permitted it to be maintained as a limited class activity. It affirmed the circuit court's dismissal of the remaining counts II, 3, and Iv. 41 Sick. App.3d 804.Go to
• However the importance of this litigation tool, until the very recent enactment of a law, Illinois had no statute or dominion of procedure pertaining to grade actions other than a provision of the Civil Practice Act relating to compromise or dismissal of class actions (Ill. Rev. Stat. 1975, ch. 110, par. 52.1). Hence, all form activeness questions were determined by instance police. (Tornquist, Roadmap to Illinois Class Actions, v Loy. Chi. L.J. 45, 53 (1974); Forde, Class Actions In Illinois: Toward A More Attractive Forum For This Essential Remedy, 26 DePaul L. Rev. 211 (1977).) According to i police review (Comment, Illinois: A Common Police force Approach, 68 Nw. U.Fifty. Rev. 1094 (1974)), Illinois, as of 1974, was one of just seven States relying on the common law to determine grade actions. See also Fox, Representative Actions and Proceedings, 1954 U. Ill. L.F. 94, 110; Gordon, The Common Question Grade Arrange Under the Federal Rules and in Illinois, 42 Sick. L. Rev. 518, 532 (1947); Forde, Class Actions In Illinois: Toward A More than Attractive Forum For This Essential Remedy, 26 DePaul L. Rev. 211 (1977); Comment, 4 J. Mar. J. Prac. Proc. 217, 243 (1971).Go to
• Defendant contends that a further requisite for contract germination is a meeting of the minds. Only a subjective understanding is not requisite. It suffices that the conduct of the contracting parties indicates an agreement to the terms of the alleged contract. (Restatement (2d) of Contracts sec. 19, annotate c, sec. 21 (Tent. Draft No. 1, 1964).) Williston, in his work on contracts, states:Go to
• Who constitutes the class Steinberg represents? The appellate courtroom express the class to those who practical to the medical schoolhouse in the same year as Steinberg on the basis that the complaint was predicated on the standards described in the 1974-75 itemize. However, the complaint makes allegations broad enough to state a crusade of activity for all who applied and paid a fee predicated on a brochure containing the alleged misrepresentations. Nosotros hold that each of these can be members of this class. The commencement of the grade action suspends the applicable statute of limitations every bit to all asserted members of the class who would have been parties had the adjust connected as a class activity. American Pipage Structure Co. 5. Utah (1974), 414 U.South. 538, 554, 38 L.Ed.2d 713, 727, 94 S.Ct. 756, 766.Become to
• A contract, by ancient definition, is "an understanding between competent parties, upon a consideration sufficient in law, to do or not to do a particular thing." People v. Dummer (1916), 274 Ill. 637, 640.Become to
• Count I of the complaint alleged breach of contract; count Ii was predicated on the Consumer Fraud and Deceptive Business organisation Practices Human action (Ill. Rev. Stat. 1973, ch. 121 one/ii, par. 261 et seq.) and the Uniform Deceptive Trade Practices Act (Sick. Rev. Stat. 1973, ch. 121 1/2, par. 311 et seq.); count III charged fraud; and count IV declared unjust enrichment. This was sought to be brought as a class action. Accordingly, there were the customary allegations common to such an action.Go to
• Accused urges People ex rel. Tinkoff v. Northwestern University (1947), 333 Ill. App. 224, controls. There the plaintiff declared that since he met the stated requirement for access, it was the obligation of the academy to take him. Plaintiff was first rejected because he was xiv years of age. He so filed a mandamus activeness, and after the university denied his access, manifestly because of the court action. That decision turned on the fact that Northwestern University, a private educational establishment, had reserved in its charter the right to decline whatever applicant for any reason it saw fit. Hither, of course, defendant had no such provision in its charter or in the brochure in question. But, more than important, Steinberg does not seek to compel the school to admit him. The substance of his activity is that under the circumstances it was accused's duty to assess his application and those of the others on the terms defendant represented. Get to
• These allegations support a cause of action for fraud. Misrepresentation of an existing material fact coupled with scienter, deception, and injury are more than acceptable. ( Majewski v. Gallina (1959), 17 Ill.2d 92, 99; 19 Ill. 50. Prac. Fraud sec. 3 (1956).) Roth v. Roth (1970), 45 Ill.2nd nineteen, 23, succinctly stated when a misrepresentation may constitute fraud:Get to
• In equity a constructive trust may be imposed to redress unjust enrichment where there is either actual fraud or implied fraud resulting from a fiduciary relationship. ( Hofert v. Latorri (1961), 22 Sick.2d 126, 130; Carroll v. Caldwell (1957), 12 Ill.2d 487, 494.) Hither there is no fiduciary relationship to support a constructive trust and the fraud charges are subsumed in count III. Accordingly, we affirm the appellate court'due south dismissal of counts II and IV.Go to
• Hither the description in the brochure containing the terms under which an application will be appraised constituted an invitation for an offering. The tender of the application, likewise equally the payment of the fee pursuant to the terms of the brochure, was an offering to apply. Acceptance of the application and fee constituted acceptance of an offer to apply under the criteria defendant had established.Go to
• Another requisite of the statute concerns adequate protection of the involvement of the class past the representative party. Absentee class members must be so represented that their rights volition receive adequate protection. Here plaintiffs' interests are not antithetical to those of other members of the class, but are the same. This certainly does non announced to be a collusive or friendly activeness. As far every bit we tin can determine, representation by the plaintiff will beget protection to other members of the course who must exist afforded due process. ( Hansberry v. Lee (1940), 311 U.Southward. 32, 42, 85 Fifty.Ed. 22, 27, 61 South.Ct. 115, 118; Eisen v. Carlisle Jacquelin (second Cir. 1968), 391 F.2nd 555, rev'd on other grounds (1974), 417 U.Due south. 156, 40 L.Ed.2d 732, 94 S.Ct. 2140.) Due process includes the requisite that the representative parties' "chaser must be qualified, experienced and generally able to conduct the proposed litigation." ( Eisen five. Carlisle Jacquelin (2d Cir. 1968), 391 F.second 555, 562, rev'd on other grounds (1974), 417 U.S. 156, 40 L.Ed.2d 732, 94 S.Ct. 2140.) These, of course, are matters which the excursion court tin can determine on a preliminary hearing.Go to
• This situation is similar to that wherein a merchant advertises appurtenances for auction at a stock-still toll. While the advertizement itself is not an offer to contract, it constitutes an invitation to deal on the terms described in the advert. (1 A. Corbin, Contracts sec. 25 (1950); Restatement (Second) of Contracts sec. 25, comment b, analogy one, and annotate f (Tent. Draft No. 1, 1964); O'Keefe 5. Lee Calan Imports, Inc. (1970), 128 Ill. App.2d 410; Montgomery Ward Co. v. Johnson (1911), 209 Mass. 89, 95 N.E. 290; Lovett five. Frederick Loeser Co. (1924), 124 Misc. 81, 207 N.Y.S. 753; Ehrlich five. Willis Music Co. (1952), 93 Ohio App. 246, 113 N.East.2d 252, 51 Ohio Op. 8.) Although in some cases the advertisement itself may be an offer (run across Lefkowitz five. Great Minneapolis Surplus Store, Inc. (1957), 251 Minn. 188, 86 N.W.2d 689), usually it constitutes merely an invitation to deal on the advertised terms. Only when the merchant takes the coin is in that location an acceptance of the offer to purchase.Become to
• So long equally there are questions of fact or law mutual to the class and these predominate over questions affecting only individual members of such class, the statutory requisite is met. It would be needless to consider the variations in our case law on this aspect. With the appearance of the statute many of the prior decisions have get corpses.Become to
• No doubt there volition exist situations where there may be questions peculiar to certain members of the form. However, once in that location is a determination that there exists a question of fact or law mutual to the class and that this predominates the question affecting only private members, the statute is satisfied.Go to
• On motion to dismiss we accept as true all well-pleaded facts. ( Acorn Automobile Driving School, Inc. v. Board of Education (1963), 27 Ill.2d 93, 96.) Count I alleges Steinberg and members of the class to which he belongs applied to defendant and paid the $xv fee, and that defendant, through its brochure, described the criteria to be employed in evaluating applications, but failed to assess the applications on the stated criteria. On the contrary, defendant evaluated such applications according to monetary contributions made on behalf of those seeking admission.Go to
• Plaintiff's allegations meet the test of common police force fraud.Go to
• That i count is based on fraud does not prohibit a class action. As we have already noted, the facts here would be such that equity would view this as an obligation imposed by law upon the defendant. This is another surface area clarified by the statute. One case prohibited a class action based upon fraud considering individual proof was required. It was Langson v. Goldberg (1940), 373 Sick. 297, a bondholder's action for fraud in the signing of waivers of certain covenants involving repayment of principal. Yet in Kimbrough v. Parker (1951), 344 Ill. App. 483, 486, a class activeness was allowed on behalf of iii,300 participants in an allegedly fraudulent puzzle contest. And very recently in Brooks v. Midas-International Corp. (1977), 47 Ill. App.3d 266, a course action was permitted under the Consumer Fraud Act (Ill. Rev. Stat. 1971, ch. 121 1/2, par. 261 et seq.).Go to
• Run into also Kahan v. Rosenstiel (3d Cir. 1970), 424 F.second 161, 173-74, cert. denied (1970), 398 U.S. 950, 26 L.Ed.2d 290, 90 S.Ct. 1870; Mills v. Electric Auto-Lite Co. (1970), 396 U.Southward. 375, 24 L.Ed.2d 593, xc Southward.Ct. 616.Go to
• The judgment of the appellate courtroom is affirmed in function and reversed in role, and the judgment of the circuit court of Cook County is affirmed in part and reversed in function. The cause is remanded to the circuit court with directions to keep in a manner non inconsistent with this opinion.Go to

• "A contract between a private institution and a pupil confers duties upon both parties which cannot be arbitrarily overlooked and may be judicially enforced. ( People ex rel. Cecil v. Bellevue Hospital Medical Higher (N.Y. 1891), sixty Hun. 107, 14 N.Y.S. 490; Baltimore University five. Colton (1904), 98 Md. 623, 57 A. 14; State ex rel. Nelson v. Lincoln Medical College (1908), 81 Neb. 533, 116 Due north.W. 294.)" DeMarco v. University of Wellness Sciences (1976), 40 Sick. App.3d 474, 480.

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• The appellate court was correct in affirming the dismissal of counts II and IV of plaintiff's complaint and in reversing the dismissal of count I of the complaint. Information technology erred in affirming the dismissal of count III and abbreviating the course represented by plaintiff.Go to
• An offering, an credence ( Milanko 5. Jensen (1949), 404 Ill. 261, 266; Geary v. Great Atlantic Pacific Tea Co. (1937), 366 Ill. 625, 627; Dick v. Halun (1931), 344 Ill. 163, 165-66; Restatement (Second) of Contracts secs. nineteen, 22 (Tent. Typhoon No. ane, 1964)), and consideration ( Moehling 5. W.E. O'Neil Construction Co. (1960), 20 Sick.2d 255, 265; Green v. Ashland Sixty-Tertiary Land Bank (1931), 346 Ill. 174, 178) are basic ingredients of a contract. Steinberg alleges that he and others similarly situated received a brochure describing the criteria that accused would employ in evaluating applications. He urges that such constituted an invitation for an offer to apply, that the filing of the applications constituted an offer to have their credentials appraised under the terms described by defendant, and that defendant's voluntary reception of the awarding and fee constituted an credence, the final human action necessary for the creation of a binding contract.Go to
• That the class hither is and so numerous that joinder of all parties would exist impracticable is obvious if for no reason other than economic science. More than that, multiple separate claims would be an imposition on all litigants likewise every bit the courts.Go to
• It is, of class, well established that the elemental determination that some members of a class are non entitled to relief because of some particular factor volition not bar the grade action. Rosen 5. Village of Downers Grove (1960), xix Ill.2d 448, 456.Go to

• "In the formation of contracts it was long ago settled that hugger-mugger intent was immaterial, only overt acts beingness considered in the determination of such mutual assent as that branch of the law requires. During the kickoff one-half of the nineteenth century there were many expressions which seemed to indicate the opposite. Main of these was the familiar cliche, still reechoing in judicial dicta, that a contract requires the `meeting of the minds' of the parties." (i Williston, Contracts sec. 22, at 46-48 (3d ed. 1957).)

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• What about the propriety of a class action hither? A class activity is a strong procedural vehicle. Under its terms claims by multiple persons tin can be decided without the necessity of the appearance of each. A vindication of the rights of numerous persons is possible in a single action when for many reasons private deportment would be impracticable. ( Adams v. Jewel Companies, Inc. (1976), 63 Ill.2d 336, 347; Smyth five. Kaspar American State Banking concern (1956), ix Sick.2nd 27, 44.) The origins of this invention of equity, co-ordinate to Professor Chafee (Some Problems of Disinterestedness 157 et seq.), go back almost 300 years. Its purpose has been described every bit "to enable information technology [disinterestedness] to proceed to a decree in suits where the number of those interested in the subject of the litigation is and then great that their joinder equally parties in conformity to the usual rules of procedure is impracticable." Hansberry v. Lee (1940), 311 U.S. 32, 41, 85 L.Ed. 22, 27, 61 S.Ct. 115, 118.Go to
• The statute simplifies with this language, "[t]hither are questions of fact or law common to the grade, which common questions predominate over whatever questions affecting simply individual members," what had been a problem under Illinois instance law. A customs of involvement in both the subject thing and the remedy was the original requisite. ( Peoples Store v. McKibbin (1942), 379 Ill. 148.) The pedagogy was nullified in Newberry Library five. Board of Education (1944), 387 Ill. 85, but revived in Smyth v. Kaspar American State Bank (1956), 9 Ill.2nd 27, 44, and particularly in Harrison Sheet Steel Co. five. Lyons (1959), 15 Ill.2nd 532, 538.Go to
• Some other surface area resolved by the statute has to do with the common-fund doctrine. The necessity of a common fund for a class action first appeared in Peoples Store v. McKibbin (1942), 379 Sick. 148, a taxpayer's activeness to enjoin collection of taxes on sales to exempt vendors. Just there none of the members of the form except plaintiff had paid under protest, so that taxes on which refunds were sought had been deposited in the general fund of the Country. Once more in Reardon five. Ford Motor Co. (1972), 7 Ill. App.3d 338, an action on behalf of a large class of purchasers of allegedly defective Ford products, the appellate court held a common fund was a necessity. But in Perlman v. Commencement National Banking concern (1973), 15 Ill. App.3d 784, entreatment dismissed (1975), 60 Sick.2d 529, a class action on behalf of borrowers from the bank alleging a violation of the Interest Act (Ill. Rev. Stat. 1971, ch. 74, pars. 9, 10), the appellate court held that a sequestered fund was not required. Defendant had urged that there was no common fund since any moneys owing plaintiffs had been commingled with other bank assets. "The liability or wrongdoing creates the fund, and any is taken wrongfully constitutes the fund." ( 15 Sick. App.3d 784, 801; see also Brooks v. Midas-International Corp. (1977), 47 Ill. App.3d 266, assuasive a class activeness under the Consumer Fraud Human activity (Ill. Rev. Stat. 1971, ch. 121 1/ii, par. 262).) The decisional law on the question of a common fund is superseded by the statute. There is no longer a requisite of a common fund.Become to
• An Illinois court determining that an essential element of the proof is common to only certain members of the grade could order carve up trials on that detail issue. (Ill. Rev. Stat. 1975, ch. 110, par. 23.) Or the class could be broken into various subclasses, equally the Federal decisions point out. The class activeness, even so, is not to be dismissed considering of these differences in elements of proof between members of the class.Go to
• Hither our scope of review is exceedingly narrow. Does the complaint set forth facts which could mean that defendant contracted, under the circumstances, to assess applicants and their applications according to the criteria it described? This is the sole inquiry on this movement to dismiss. We believe the allegations suffice and affirm the appellate court in property count I stated a cause of action.Get to
• Since this statute is procedural in nature, it is applicable to awaiting litigation. ( Orlicki five. McCarthy (1954), iv Ill.2d 342, 347; Lath of Education 5. City of Chicago (1949), 402 Ill. 291, 296; Weil-McLain Co. v. Collins (1946), 395 Ill. 503, 508.) Accordingly, nosotros shall measure this action in terms of the statute.Become to
• Lastly, the facts nosotros have considered make manifest that the concluding requirement of the statute, that a class action be an appropriate method for the off-white and efficient adjudication of the controversy, is fulfilled.Go to
• On remand the trial courtroom should, by a preliminary hearing, determine the post-obit: (a) the proper members of the course; (b) whether the plaintiff will exist able to adequately correspond the class and then that there volition be no denial of due process; (c) whether notice is required to other members of the form and the character of such notice; and (d) other such pretrial findings proper to grade action litigation.Go to

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Steinberg V. Chicago Medical School,

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