No. 2--01--0097

JUSTICE BYRNE delivered the opinion of the court:

Plaintiff, Juan Delarosa, filed a two-count complaint againstdefendant, Approved Auto Sales, Inc., alleging a violation of theConsumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1et seq. (West 2000)) and common-law fraud. After an arbitrationproceeding, plaintiff moved to amend the complaint to add a thirdcount for breach of contract, and the trial court denied themotion. Following a bench trial, the court entered directedfindings for defendant on the two fraud counts. The court then suasponte reversed its earlier ruling on the proposed amendment, filedthe complaint as amended, and entered a directed finding againstplaintiff on the breach of contract claim.

On appeal, plaintiff does not challenge the court's findingson the two fraud counts. However, plaintiff contends that (1) thetrial court violated his due process rights when it sua sponterevived the breach of contract count and then granted defendant adirected finding on that count; and (2) the court's finding fordefendant on plaintiff's breach of contract claim was against themanifest weight of the evidence. We affirm in part, reverse inpart, and remand the cause with directions.

In November 1998, plaintiff purchased a used Ford Explorerfrom defendant. Because he was buying it for one of his daughtersand the car was being sold "as is," he wished to purchase anextended warranty. Plaintiff paid defendant $1,495 for a warrantyplan issued by Buyer's Choice, but defendant failed to purchase thewarranty.

In January 1999, plaintiff's daughter, Lorena Medina, thoughtthat the car was experiencing transmission problems. Shetelephoned defendant and explained that she had discovered that thewarranty was not in effect.

Defendant's president, Earl Fisher, learned that plaintiff wascomplaining about transmission problems with the Explorer and aboutthe warranty. He discovered that his brother had not sent in thewarranty application and the initial $640 payment to Buyer'sChoice. Buyer's Choice refused to issue the warranty, and Fisherobtained a substitute warranty from American Underwriters Limited(AUL) for $900. Although he was not familiar with the warranties'specific terms, he believed the AUL warranty was better than thewarranty to which the parties originally agreed because it coveredmore services.

On May 21, 1999, plaintiff filed his complaint alleging thetwo fraud counts. A panel of arbitrators found for plaintiff, butdefendant rejected the award. On October 17, 2000, plaintiffsought leave to amend his complaint to add the cause of action forbreach of contract. The certified bystander's report in the recordstates that the trial court denied the motion even though defendantoffered no evidence that it would be prejudiced by the proposedamendment.

The cause proceeded to trial on November 1, 2000. Afterplaintiff rested his case, the trial court granted defendantdirected findings on both fraud counts. The court found that,among other things, plaintiff had failed to prove damages. Thecourt also revived and granted plaintiff's motion to amend hiscomplaint and granted defendant a directed finding on the breach ofcontract count as well. Plaintiff timely appealed.

Plaintiff contends that the trial court violated his right todue process by reversing its ruling on his motion to amend afterplaintiff had rested his case, then immediately granting defendanta directed finding on the newly added count. He also argues thatthe trial court's finding on the breach of contract count wasagainst the manifest weight of the evidence. We agree withplaintiff that the trial court abused its discretion in ruling onhis motion to amend. We therefore reverse the judgment fordefendant on count III and remand the cause for further proceedingson that count. We affirm the trial court's ruling on counts I andII.

Generally, a trial court's decision to allow or deny anamendment will not be reversed absent an abuse of discretion.Hiscott v. Peters, 324 Ill. App. 3d 114, 128 (2001). However,section 2--616 of the Code of Civil Procedure (the Code) providesfor the liberal amendment of pleadings at any time before finaljudgment to add new causes of action. 735 ILCS 5/2--616 (West2000). In deciding whether to grant leave to amend a pleading, thecourt should consider the timeliness of the amendment and whetherthe other parties have been prejudiced or surprised by the proposedamendment. Scentura Creations, Inc. v. Long, 325 Ill. App. 3d 62,72 (2001).

Here, it is true that plaintiff sought the amendment only twoweeks before trial. Plaintiff must have been aware of thepotential contract claim well before then. On the other hand,defendant has not demonstrated any particular prejudice fromallowing the amendment. Defendant knew all along that plaintiff'sclaims were based on the sale contract and defendant's allegedfailure to procure the warranty. Defendant argues that the court'sdenial of the amendment was harmless because plaintiff failed toprove his damages on the fraud counts at trial. We reject thiscontention because it relies on hindsight to judge the propriety ofthe denial of the amendment before trial. Thus, given the Code'spolicy in favor of liberal amendment, we hold that the trial courtabused its discretion in denying plaintiff leave to amend thecomplaint before trial.

The court's subsequent reversal of its decision, rather thancuring the error, appears to have compounded it. Plaintiffprepared for and conducted the trial on the assumption that thecontract claim was not going to be allowed. Only after plaintiffhad rested his case did the court allow the amendment, and then itimmediately granted judgment for defendant on the newly addedcount. Plaintiff never had an opportunity to present evidence onthat count.

Defendant asserts that plaintiff renewed his motion for leaveto amend on the day of trial. Defendant, therefore, implicitlyassumes that the court reserved ruling on the motion and, as aresult, actually did allow plaintiff to present evidence in supportof the contract claim. Nothing in the bystander's report supportsthe assertion that plaintiff renewed his motion before trial. Moreover, even if this claim were true, our decision would notchange. Plaintiff could not be expected to adequately prepare toprosecute the contract claim without knowing whether the courtwould allow it. The court had already denied the motion once, andplaintiff could not anticipate that the court would abruptly changeits mind.

In Pettigrew v. National Accounts System, Inc., 67 Ill. App.2d 344 (1966), this court stated as follows:

"A fundamental requisite of procedural due process isthat every man shall have the protection of his day in courtand the benefit of an orderly proceeding according to thegeneral law or established rules; and that the hearing shallnot be arbitrary, but rather shall afford to him anopportunity to be heard in his defense and shall assure to himan inquiry on the issues of the case, wherein judgment isrendered only after trial." Pettigrew, 67 Ill. App. 2d at351.

In that case, Pettigrew, believing that he was appearing fora hearing on National's motion for a preliminary injunction, foundhimself forced both to prosecute his action for a declaratoryjudgment--to which National had just filed its answer--and todefend National's complaint for a permanent injunction--whichPettigrew had not yet answered. This court held that thoseproceedings violated Pettigrew's due process rights. Pettigrew, 67Ill. App. 2d at 351. Similarly, in Koplin v. Hinsdale Hospital,207 Ill. App. 3d 219 (1990), we held that the defendant was denieddue process when the plaintiff was allowed to amend his complainton the day of trial to add five new counts. In Hiscott, we heldthat the court abused its discretion in allowing the plaintiffs toamend their complaint after judgment to add new counts because thedefendants could not address those counts during trial. Hiscott,324 Ill. App. 3d at 128.

Those cases, while different procedurally from this case, showthat due process requires that both parties know in advance of aproceeding what issues will be tried at that proceeding. Theproceedings here involving plaintiff's count III did not comportwith this standard and the judgment on that count must be reversed.

In its brief, defendant requests sanctions against plaintiffpursuant to Supreme Court Rule 375 (155 Ill. 2d R. 375) for filinga frivolous appeal. In light of our conclusion that plaintiff'sappeal is meritorious, we deny defendant's request for sanctions.

The judgment of the circuit court of Winnebago County grantingjudgment for defendant on count III is reversed; the remainder ofthe judgment is affirmed. The cause is remanded to the circuitcourt with directions to grant plaintiff's motion for leave toamend his complaint. Defendant may answer or file any appropriatemotion directed against the complaint.

Affirmed in part and reversed in part; cause remanded withdirections.

O'MALLEY and CALLUM, JJ., concur.