author: JUSTICE DUNN

text:
    THE PEOPLE ex rel. NEIL F. HARTIGAN, Attorney General, Plaintiff-Appellee, v. GREAT AMERICA HOMES OF ILLINOIS, INC., et al, Defendants-Appellants.
    Second District
    No. 2—88—0383
    Opinion filed February 23, 1989.
    J. Michael Fitzsimmons, of Fitzsimmons & Bowen, of Oak Brook, and Jerome J. Roberts, of Berman, Roberts & Kelly, of Chicago, for appellants.
    Robert J. Long, of Law Offices of Robert J. Long, Ltd., of Antioch, for appellee.
   JUSTICE DUNN

delivered the opinion of the court:

The Illinois Attorney General instituted an action on behalf of the People of the State of Illinois against Great America Homes of Illinois, Inc. (GAH), Ameriwest Mortgage Corporation (Ameriwest), Thomas McManus, and two other defendants alleging violations of the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1987, ch. 121½, par. 261 et seq.) and the Uniform Deceptive Trade Practices Act (Ill. Rev. Stat. 1987, ch. 121½, par. 311 et seq.). The trial court appointed a receiver to administer defendants’ assets and entered a preliminary injunction against defendants. The defendants named above later executed a consent decree in which they agreed to entry of judgment in favor of plaintiff. The trial court denied the motion of defendants GAH, Ameriwest, and McManus for payment of their attorney fees from the receivership assets. On appeal, defendants contend that the trial court’s order denied them due process of law and that the trial court erroneously focused on defendants’ lack of good faith in dealing with their customers rather than considering whether defendants acted in good faith in presenting their defense to the action. We affirm.

Plaintiff’s complaint alleged, inter alia, as follows. Thomas Mc-Manus was the president of GAH and Ameriwest. GAH engaged in the business of developing and selling real estate. Ameriwest engaged in the business of making and negotiating home mortgage loans. Commencing on or about April 1, 1987, GAH solicited and offered for sale certain real estate in subdivisions known as Evergreen and Casidas in Warren Township. At the same time, Ameriwest solicited and accepted applications for mortgages for residences to be built in these subdivisions. McManus and the two corporate defendants falsely represented to consumers that they held title to certain lots in the above subdivisions, had the financial resources to construct single-family residences on the lots, and intended to build such residences. They also falsely represented that earnest money paid by consumers would be kept in a segregated escrow account and applied as a down payment toward the purchase of a home.

In the consent decree, defendants admitted that if a hearing were held regarding the issuance of a permanent injunction, the evidence would be the same as that presented at the prior hearing for a preliminary injunction. Defendants consented to the entry of judgment against them in the amount of $631,424.99 and to the issuance of a permanent injunction restraining them from engaging in certain activities.

On the same day that the consent decree was entered, defendants’ attorneys presented a petition to the trial court requesting that $48,282.75 in attorney fees be paid to them from the funds held by the court-appointed receiver. The trial judge denied the petition on the basis that the defense of the instant action was not undertaken in good faith by the corporate defendants. In making this finding, the trial judge relied upon the consent decree and the stipulation of the parties contained therein; the testimony presented at the hearing on plaintiff’s request for a preliminary injunction, and appointment of a receiver; and a criminal conviction against defendant McManus, of which the court took judicial notice. Defendants filed a timely notice of appeal from the denial of the petition for payment of attorney fees.

In People ex rel. Schacht v. Main Insurance Co. (1983), 114 Ill. App. 3d 334, 448 N.E.2d 950, the court stated as follows:

“It is well established that as a general rule where an application has been made for the appointment of a receiver for a corporation, attorney fees and expenses, if incurred in good faith, may become a valid claim against the receiver, such claim being addressed to the sound discretion of the trial court.” (Schacht, 114 Ill. App. 3d at 338, 448 N.E.2d at 953.)

Our supreme court has cited the above language with approval. (See W.E. Erickson Construction, Inc. v. Congress-Kenilworth Corp. (1986), 115 Ill. 2d 119, 131, 503 N.E.2d 233, 239.) Much earlier, our supreme court stated that in cases of this nature, representatives of a corporation whose existence is attacked should be afforded reasonable means of defending the corporation if the circumstances justify resistance, but that receivership assets should not be wasted on needless and vexatious litigation in light of the trial court’s duty to preserve those assets to as great an extent as possible. Assets Realization Co. v. Defrees, Brace & Ritter (1907), 225 Ill. 508, 513, 80 N.E.263, 265.

Defendants do not challenge the general rule set forth in Schacht. Instead, they assert that the trial court misapplied the rule by focusing on defendants’ lack of good faith in their dealings with consumers rather than the question of whether the corporations presented their defense in good faith and that they were denied due process as a result of this misapplication of the general rule. Apparently, the defense presented is that defendants did own some of the land in question and did undertake some home construction, indicating that they did not intend to defraud their customers.

It is clear from the record that the trial judge believed that defendants’ attorneys had acted in good faith. In cases of this nature, however, the right of the attorneys to recover their fees from the receivership assets is dependent upon the good faith of the corporate directors or officers employing them. (Schacht, 114 Ill. App. 3d at 343, 448 N.E.2d at 956.) The trial judge’s belief that the attorneys had acted in good faith is therefore not inconsistent with his denial of their motion for payment of fees from the receivership assets.

While issuing his ruling, the trial judge stated that he had heard nearly three weeks of testimony at the hearing on plaintiff’s application for a preliminary injunction and the appointment of a receiver. The judge later stated:

“The victims are obvious. The lack of good faith of the victimizer is overwhelming, and it was, in fact, difficult for this Court to read again the testimony of those witnesses at the preliminary injunction hearing, but I have, of those without substantial resources who withdrew their savings and who, in part, had to borrow funds in addition to withdrawing all their savings to afford that down payment and who never received any benefit for the bargain.”

Shortly thereafter, the court made the following findings:

“That the defense of these actions from the start was not undertaken by the defendant corporations in good faith. A pattern of fraud was well established prior thereto and well prior to the beginning of these cases. *** Therefore, the Court would find that, in fact, the defense of these claims from the start was neither reasonable nor necessary.”

The court then denied the petition for attorney fees.

The above-quoted statements indicate that the trial court believed that the evidence of fraud against defendants was clear and overwhelming. If the evidence against defendants was as compelling as the trial court apparently believed, it would have been reasonable for the court to conclude that the two corporations did not defend the action in good faith because it was apparent from the outset that there was no valid defense. It is apparent from the record that the trial court relied on evidence produced at the hearing on plaintiff’s application for preliminary injunction and appointment of a receiver, a hearing which lasted nearly three weeks. There are no transcripts from that hearing in the record on appeal, however.

Defendants, as appellants, have the burden of presenting a sufficiently complete record of the proceedings in the trial court to support their claim of error; in the absence of such a record, we will presume that the trial court’s ruling was in conformity with the law and had a sufficient factual basis. (Pecora Oil Co. v. Johnson (1987), 156 Ill. App. 3d 521, 523, 509 N.E.2d 495, 497.) Any doubts which arise from the incompleteness of the record will be resolved against the appellants. (Foutch v. O’Bryant (1984), 99 Ill. 2d 389, 391-92, 459 N.E.2d 958, 959.) Here, the trial judge’s conclusion that the two corporations did not incur the attorney fees in question in good faith appears to have been based in large part upon testimony which has not been included in the record on appeal. We must therefore presume that the trial judge acted in conformity with the law and that there was a sufficient factual basis to support his denial of the petition for payment of attorney fees from the funds held by the receiver.

Accordingly, the judgment of the circuit court of Lake County is affirmed.

Affirmed.

McLaren and WOODWARD, JJ., concur.


source: Caselaw Access Project

author: JUSTICE REINHARD

license: Public Domain

text:
    THE TOWN OF LIBERTYVILLE, Plaintiff-Appellant, v. LYNNE M. MORAN et al., Defendants-Appellees.
    Second District
    No. 2—88—0479
    Opinion filed February 28, 1989.
    Rehearing denied March 31, 1989.

      William D. McElyea, of Siemon, Larsen & Purdy, of Chicago (Charles L. Siemon and Gerald P. Callaghan, of counsel), for appellant.
    Snyder, Clarke, Dalziel & Johnson, of Waukegan (Clayton P. Voegtle, of counsel), for appellees.
   JUSTICE REINHARD

delivered the opinion of the court:

Plaintiff, the Town of Libertyville, appeals from a judgment of the circuit court of Lake County entered on a jury award of $713,528 as just compensation for a 52.3-acre parcel of real property owned by defendants, Lynne M. Moran and Joyce H. Diserio, as trustee under a trust agreement, which plaintiff sought to acquire by condemnation pursuant to the Township Open Space Act (Ill. Rev. Stat. 1985, ch. 139, par. 321 et seq.).

Plaintiff raises numerous trial errors and the amount of the jury award as issues on appeal. Defendants have filed a motion to dismiss the appeal for mootness, which we have taken with the case.

Defendants are the owners of approximately 52 acres of unimproved property in Libertyville Township in Lake County, Illinois. On May 29, 1986, plaintiff filed this condemnation action to acquire the property under the Township Open Space Act. Following a jury trial, the jury returned an award of just compensation of $713,528. On January 27, 1988, the circuit court entered judgment on the verdict and ordered payment within 30 days to the treasurer of Lake County for the benefit of defendants. The court further ordered that upon payment plaintiff would be vested with fee simple title to the property.

On January 30, 1989, following the filing of the parties’ appellate briefs, defendants filed a motion to dismiss this appeal as moot. In the motion, and in an accompanying affidavit, defendants stated that the plaintiff had not deposited the funds representing the jury award with the treasurer of Lake County, that plaintiff had appealed and had not requested a stay of the judgment, and that the subject property had subsequently been sold for $832,000 on January 27, 1989, to Regency Woods Limited Partnership (Regency Woods), a nonparty to the litigation in which defendants had no ownership interest. The general manager of Regency Woods filed an affidavit representing that defendants had no interest in the limited partnership and that Regency Woods was not acting as a nominee for defendants.

In their motion, defendants have cited Supreme Court Rule 305(i) (107 Ill. 2d R. 305(i)), which provides, in pertinent part, that “the reversal or modification of the judgment does not affect the right, title, or interest of any person who is not a party to the action in or to any real or personal property that is acquired after the judgment becomes final and before the judgment is stayed.” Defendants further argue that the appeal is now rendered moot because the relief being sought on appeal necessarily involves possession or ownership of specific property which has been conveyed to a third party, not a party or nominee of a party to this action, where no stay of the judgment has been obtained by plaintiff, citing Illinois Housing Development Authority v. La Salle National Bank (1985), 139 Ill. App. 3d 985, 487 N.E.2d 772, Arnold v. Leahy Home Building Co. (1981), 95 Ill. App. 3d 501, 420 N.E.2d 699, Jones v. Matthis (1980), 89 Ill. App. 3d 929, 412 N.E.2d 649, Horvath v. Loesch (1980), 87 Ill. App. 3d 615, 410 N.E.2d 154, and Schwind v. Mattson (1974), 17 Ill. App. 3d 182, 307 N.E.2d 673.

Plaintiff filed an objection and response to the motion to dismiss in which it contends that the judgment below was automatically stayed by its filing of a notice of appeal and, further, that the third-party purchasers take subject to the condemnation action because plaintiff’s rights in the property are protected by the lis pendens notice it filed with the Lake County recorder of deeds on May 29, 1986, and because title, which passes to plaintiff upon payment of the judgment, relates back by operation of law to the date of the filing of the complaint for condemnation. The affidavits submitted with defendants’ motion which state, in pertinent part, that the third-party purchaser is not a party or a nominee of defendants, are not controverted by plaintiff.

The motion to dismiss and the response were taken with the case, and the parties were permitted to present arguments thereon at oral argument. We find this issue dispositive of the appeal.

In support of its argument that its filing of an appeal in this case automatically stayed the judgment of the trial court entered on the just compensation award, plaintiff cites County Board of School Trustees v. Boram (1962), 26 Ill. 2d 167, 186 N.E .2d 275, City of Winchester v. Ring (1925), 315 Ill. 358, 146 N.E. 541, and City of Chicago v. Schorsch Realty Co. (1972), 6 Ill. App. 3d 1074, 287 N.E.2d 93. None of these cases, however, stand for the proposition suggested by plaintiff, that an appeal in a condemnation case automatically stays the judgment. Rather, those cases stand for the narrower proposition that when the property owner appeals the amount of a condemnation award, the amount of the award is not finally determined until the appeal is disposed of, and, therefore, the time allowed in the judgment for payment is stayed and does not begin to run until the mandate is issued. Schorsch Realty Co., 6 Ill. App. 3d at 1078, 287 N.E.2d at 95.

Plaintiff argues, alternatively, that its rights in the subject property are protected because it filed a lis pendens notice pursuant to section 2—1901 of the Civil Practice Law (Ill. Rev. Stat. 1987, ch. 110, par. 2—1901) on May 29, 1986, the day it filed the condemnation action, and that the lis pendens notice remains effective during the pendency of this appeal. Such an argument, however, ignores Supreme Court Rule 305 (107 Ill. 2d R. 305), which establishes the procedures to be followed by a party to obtain a stay of a judgment and thereby protect its interest in real or personal property pending an appeal. (See 107 Ill. 2d R. 305, Committee Comments, at 406.) Rule 305(b)(1) provides that, upon notice and motion, the trial court or the reviewing court may stay, pending appeal, the enforcement of a judgment for money not stayed pursuant to Rule 305(a) or the enforcement, force and effect of any other final or interlocutory judgment or order. (107 Ill. 2d R. 305(b)(1).) The stay shall be conditioned upon such terms as are just, including a bond in the case of a judgment for money or a stay for the protection of interests in property. (107 Ill. 2d R 305(b)(3).) In the case of an appeal by a public or governmental body, the court may stay the judgment pending appeal without requiring any bond. (107 Ill. 2d R. 305(g).) Finally, Rule 305(i) states:

“(i) Effect on Interests in Property of Failure to Obtain Stay. If a stay is not perfected within 30 days of the entry of the judgment appealed from, or within any extension of time granted under subparagraph (a)(2) of this rule, the reversal or modification of the judgment does not affect the right, title, or interest of any person who is not a party to the action in or to any real or personal property that is acquired after the judgment becomes final and before the judgment is stayed; nor shall the reversal or modification affect any right of any person who is not a party to the action under or by virtue of any certificate of sale issued pursuant to a sale based on the judgment and before the judgment is stayed. This paragraph applies even if the appellant is a minor or a person under legal disability or under duress at the time the judgment becomes final.” (107 Ill. 2d R. 305(i).)

Rule 305 clearly establishes procedures which must be followed in obtaining a stay of judgment pending appeal and the resulting effect on an appellant’s interest in property by failing to so obtain a stay when the property is acquired by a third person after the judgment becomes final.

The section of the Civil Practice Law providing for lis pen-dens notice applicable hereto, on the other hand, does not address the applicability of lis pendens to an appeal. (See Ill. Rev. Stat. 1987, ch. 110, par. 2 — 1901; see also Ill. Rev. Stat. 1985, ch. 30, par. 121.) The historical and . practice notes to this section, however, do refer the reader to Supreme Court Rule 305(i), concerning the effect of an unstayed judgment on interests in real or personal property. (Ill. Ann. Stat., ch. 110, par. 2—1901, Historical and Practice Notes, at 68 (Smith-Hurd 1988 Supp.); see also Carlson & Tillery, Lis Pendens, in Illinois Civil Practice Before Trial ch. 7, §7.16 (Ill. Inst, for Cont. Legal Educ. 1978) (appeal does not act as lis pendens as to third parties).) Moreover, Supreme Court Rule 1 provides, in part, that “[t]he rules on appeals shall govern all appeals.” (107 Ill. 2d R. 1.) Thus, supreme court rules as to appeals supersede all statutory provisions. (In re Marriage of Lentz (1980), 79 Ill. 2d 400, 405, 403 N.E.2d 1036; People ex rel. Stamos v. Jones (1968), 40 Ill. 2d 62, 66, 237 N.E.2d 495; Smith v. Goldstick (1982), 110 Ill. App. 3d 431, 435, 442 N.E.2d 551.) Consequently, Supreme Court Rule 305 provides the exclusive means by which an appellant may protect its interests in property pending appeal and makes no exception for a condemnation proceeding.

Plaintiff, however, cites O’Laughlin v. City of Chicago (1976), 65 Ill. 2d 183, 357 N.E.2d 472, in support of its argument that the lis pendens notice it filed pursuant to section 2 — 1901 of the Civil Practice Law at the time it instituted this suit continues to protect its interests in the subject property during pendency of this appeal. In O’Laughlin, our supreme court held that the filing of a lis pendens notice during pendency of the appeal bound the third-party purchasers to the judgment of the appellate court and that they took the property subject to the lis pendens notice. (O’Laughlin, 65 Ill. 2d at 193, 357 N.E.2d at 477.) In O’Laughlin, however, the issue of whether the filing of a lis pendens notice is sufficient to protect a party’s interests in property involved in the litigation pending appeal was apparently not raised by the parties, nor did the court engage in any discussion of that question. Furthermore, the opinion does not mention Rule 305(i), which was in existence at that time. Thus, we do not find O’Laughlin controlling as to the issues presented here.

Finally, plaintiff argues that, even if there is no stay in this case, the third-party purchaser took the property subject to plaintiff’s prior right to the property which arose at the time of filing of its condemnation petition. Plaintiff cites Board of Junior College District 504 v. Carey (1969), 43 Ill. 2d 82, 250 N.E.2d 644, in support of its contention. Board of Junior College District 504 did not address the issue, however, of whether the filing of a condemnation petition alone secures the condemnor’s interest in the property pending appeal. Furthermore, in that case the court stated that title to the condemned property passes upon payment of the compensation award and that such title passes in the condition it was in at the time the condemnation action was commenced. 43 Ill. 2d at 85-86, 250 N.E.2d at 646-47.

Here, plaintiff never paid the award which would pass title to it, but rather, it argues that the appeal is a continuation of the proceeding and, therefore, the interest it acquired in the title at the time of filing the condemnation petition is protected during the appeal as well. In this latter regard, plaintiff points out that an appeal is considered to be a continuation of the trial court proceeding. (See 107 111. 2d R. 301.) Plaintiff cites no authority, however, nor do we find any, which holds that the interest of a condemnor in the condemned property is automatically protected during the pendency of an appeal. Moreover, such a rule would be inconsistent with the purpose of Rule 305(i), which is to require the appealing party to obtain a stay pending appeal to protect its interest in real or personal property from third parties. To hold otherwise would be to allow a condemning party to tie up the subject property without any protection for the property owner. Thus, we hold that, absent a stay pursuant to Rule 305(i), an appeal in a condemnation suit by the condemnor does not protect its interest in the subject property from the interest acquired by a third-party purchaser subsequent to the judgment, and such third-party purchaser is not bound by the reversal or modification of the judgment on appeal.

The only question that remains to be decided then is whether this case is rendered moot by Rule 305(i). It is well established that in the absence of a stay, an appeal is moot if a specific property, possession or ownership of which is the relief being sought on appeal, has been conveyed to third parties. (People ex rel. First National Bank v. City of North Chicago (1987), 158 Ill. App. 3d 85, 94-95, 510 N.E.2d 577; Illinois Housing Development Authority v. La Salle National Bank (1985), 139 Ill. App. 3d 985, 987, 487 N.E.2d 772; Arnold v. Leahy Home Building Co. (1981), 95 Ill. App. 3d 501, 514, 420 N.E.2d 699; Horvath v. Loesch (1980), 87 Ill. App. 3d 615, 619, 410 N.E.2d 154.) Additionally, the record must unequivocally disclose that the third-party purchaser was not a party or a nominee of a party to the litigation. People ex rel. First National Bank, 158 Ill. App. 3d at 95, 510 N.E.2d at 583; Illinois Housing Development Authority, 139 Ill. App. 3d at 987, 487 N.E.2d at 774.

There is no doubt in this case that plaintiff sought title to the subject property by way of condemnation. Defendants, however, conveyed that title to a third-party purchaser during the pendency of this appeal. Additionally, defendants submitted their affidavit as well as that of the general partner of the third-party purchaser, both of which establish that the limited partnership that purchased the subject property is not a party to the litigation or a nominee of defendants. Plaintiff offered no evidence to rebut the status of the third-party purchasers. Thus, based on this uncontroverted record, the title in the subject property was conveyed to neither a party nor a nominee of a party to the litigation and, therefore, absent a stay under Rule 305, this appeal is moot.

Appeal dismissed.

WOODWARD and DUNN, JJ., concur.


author: JUSTICE WOMBACHER

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. LLOYD F. TOMPKINS, SR., Defendant-Appellant.
    Third District
    No. 3—88—0227
    Opinion filed February 23, 1989.

      Peter A. Carusona, of State Appellate Defender’s Office, of Ottawa, for appellant.
    David Zwicker, State’s Attorney, of Aledo (William L. Browers and David A. Bernhard, both of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
   JUSTICE WOMBACHER

delivered the opinion of the court:

A Mercer County jury found the defendant, Lloyd E Tompkins, Sr., guilty of murder. (Ill. Rev. Stat. 1987, ch. 38, par. 9 — 1(a)(2).) After a hearing, the defendant was sentenced to 30 years’ imprisonment. He appealed the sentence and we reversed and remanded for resentencing. The defendant now appeals the 30 years’ imprisonment he again received upon remandment.

A summary of the evidence introduced at trial and at the first sentencing hearing can be found in our opinion issued in the first appeal. (People v. Tompkins (1987), 155 Ill. App. 3d 380, 508 N.E.2d 481.) It is sufficient to note that in our prior opinion we found that the sentencing court had improperly considered the victim’s death as an aggravating factor, since death was an element of the offense. See People v. Saldivar (1986), 113 Ill. 2d 256, 497 N.E.2d 1138.

At the resentencing hearing, the trial court found in mitigation that the defendant had a supportive family, a good job record, and a good military record. The court also found that the defendant was an industrious man, that he had reported the offense himself, and that he had not fled after committing the offense. However, the court specifically refused to find as a mitigating factor that the defendant had led a law-abiding life for a substantial period of time before his commission of the murder. The original sentencing judge had found that this was a mitigating factor.

In aggravation, the resentencing court found that the sentence was necessary to deter others from committing the same crime and that the victim was recovering from an operation. The court, in compliance with our direction in the first appeal of this cause, specifically did not find that the victim’s death was an aggravating factor. The resentencing judge also did not consider in aggravation certain other factors that the first sentencing judge had found. Those factors were that the victim may have lived for awhile and suffered, that the defendant had threatened his previous wife with a shotgun shortly before their divorce, and that the defendant had attempted to find someone who would burn down his wife’s place of employment.

On appeal, the defendant argues that the trial court erred in not finding in mitigation that he had led a law-abiding life for a substantial period of time before the commission of the murder. The defendant further contends that, in light of the significant mitigating factors, his sentence should be reduced, or in the alternative, that his sentence should be vacated and the cause remanded for resentencing.

We find that the judge properly refused to find that the defendant had led a law-abiding life for a substantial period of time before the commission of the murder. The court’s finding is supported by the fact that the defendant had threatened his previous wife with a shotgun and that he had threatened arson at least two weeks prior to the murder.

We find insignificant the fact that the first sentencing judge found in mitigation that the defendant had led a law-abiding life. Section 5—4—1(b) of the Unified Code of Corrections (Ill. Rev. Stat. 1987, ch. 38, par. 1005—4—1(b)) requires that a judge impose sentence based on his independent assessment of the sentencing elements. When a trial court’s sentencing order is vacated on appeal and remanded for a new sentencing hearing, the judge should simply consider the matter anew, without relying on any factors which were held to be improper. (People v. Morton (1981), 102 Ill. App. 3d 280, 430 N.E.2d 383.) The sentencing judge may make an independent assessment of the appropriate aggravating and mitigating factors present in a case. See People v. Goodman (1983), 116 Ill. App. 3d 125, 451 N.E.2d 607.

We reject the defendant’s contention that since his attempt to find someone to commit arson was a part of the same event that led to the murder, it should not preclude a finding that he was law abiding. The defendant in support of his position cites People v. Carlson (1980), 79 Ill. 2d 564, 404 N.E.2d 233, and People v. Buggs (1986), 112 Ill. 2d 284, 493 N.E.2d 332. In both of those cases, the events leading up to the murder occurred within a few hours of the offense. In the instant case, the defendant attempted to find someone to commit arson at least two weeks and perhaps as much as two months before the murder. As such, the criminal activity at issue here was not “a part of one unfortunate and tragic event precipitated by the events leading up to the [murder].” People v. Carlson (1980), 79 Ill. 2d 564, 588, 404 N.E.2d 233, 244.

We further do not agree with the defendant that in light of the mitigating factors we should reduce his sentence. A reviewing court considering the appropriateness of a sentence must give great weight to the judgment of the trial court and should not alter the sentence imposed unless the court abused its discretion. People v. Cox (1980), 82 Ill. 2d 268, 412 N.E.2d 541.

The instant trial court did not abuse its discretion in sentencing the defendant to 30 years in prison. The defendant shot and killed his wife while she was recovering from surgery. There was no evidence presented that she said or did anything on the morning in question to provoke this act. Merely because we might have balanced the appropriate factors differently is no reason to substitute our judgment for that of the trial court. People v. Morton (1981), 102 Ill. App. 3d 280, 430 N.E.2d 383.

For the foregoing reasons, the judgment of the circuit court of Mercer County is affirmed.

Affirmed.

HEIPLE and SCOTT, JJ., concur.


author: JUSTICE STOUDER

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellant, v. JOHN ARIAS, Defendant-Appellee.
    Third District
    No. 3—88—0288
    Opinion filed February 28, 1989.

      Edward F. Masters, State’s Attorney, of Joliet (Terry A. Mertel, of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.

      Mary E. Rosiek, of Kozlowski, Polito & Feeley, of Joliet (Joseph C. Polito, of counsel), for appellee.
   JUSTICE STOUDER

delivered the opinion of the court:

Pursuant to Supreme Court Rule 604(a)(1) (107 111. 2d R. 604(a)(1)), the State appeals from the judgment of the circuit court of Will County, granting the defendant’s motion to quash his arrest and to suppress evidence obtained following the arrest. At the suppression hearing, Joliet police officer Brenczewski testified that he was an investigator assigned to the case involving Willie Ray, who was shot to death on December 6, 1987. Having interviewed several people, the officer learned that two rival gangs were playing football when they spotted the victim, who was wearing his hat in a manner which indicated that he belonged to a different gang. Someone waved a gun at the victim, he ran, and the group chased after him. The defendant, John Arias, was a member of that group. When the group caught up with the victim, Edgar Pacheco fired a shot at him. Other shots were fired, and Arias was seen leaving the area where the shots were fired. The officer also learned that Arias subsequently gave a .38 caliber handgun, which smelled as if it had recently been fired, to another boy. The victim was shot with a .38 caliber handgun.

The officer interviewed Arias on December 9, 1987, at the police station. The defendant had agreed to come to the police station to answer questions. At that time Arias admitted that he was at the football field and chased the victim with a group of other men. However, he told the officers that he lost sight of the victim, heard shots, and walked away.

Brenczewski further testified that he subsequently met with Officers Boucher and Hulbert on December 16, 1987, at approximately 3 or 4 p.m. He discussed with the officers that he felt that he had probable cause to arrest Arias and informed Boucher that Arias should be questioned further in reference to the Willie Ray case. He did not tell Officer Boucher either to arrest or not to arrest the defendant. They did not have a warrant for Arias’ arrest at that time, but nothing prevented them from procuring such a warrant. They had already arrested Edward Pacheco, pursuant to an arrest warrant signed before a judge.

At approximately 4:45 p.m., Officers Boucher and Powers went to Arias’ home to ask him to accompany them to the police station for questioning. Upon their arrival at the defendant’s residence, a second-floor apartment of a two-unit apartment building, the officers proceeded to the back of the building to the only entrance of the upper apartment. The officers ascended the outside staircase, opened and entered the porch door at the top of the stairs and proceeded to knock on the door of the house. When the defendant’s 27-year-old brother, Mario, answered the door, the officers identified themselves as police officers and asked if the defendant was home. They told Mario that they had more questions to ask the defendant. Mario invited the officers into the house and beckoned the defendant.

When the defendant appeared, Officer Boucher asked him if he would accompany the officers to the Joliet police department because the police wanted to talk to him further regarding the Willie Ray incident. The officers did not order the defendant to accompany them and did not threaten him in any way. Arias responded, indicating that he would have to get his coat and then wash his hands, which actions he did under the supervision of the officers. Arias asked the officers how long he would be at the police station. Boucher indicated that it would probably take an hour or two. Both the defendant and his girlfriend, who was present at the time, testified that Arias was denied permission to call his father. They further testified that he was denied permission to wait for his father, who would be returning around 6 p.m. Officer Powers testified that the defendant did not ask to call or to wait for his father.

The defendant’s mother, who did not speak English, was present. The defendant asked his mother for a quarter to call his father from the station, but the officers indicated that the defendant could use their phone if he needed to make a call. Arias testified that he felt that he had to go with the officers but thought that he would be returning in a couple of hours.

Officer Boucher gave his calling card to Mario and asked him to explain to the defendant’s mother that they wanted the defendant to come with them to the police station for a couple of hours. Mario spoke to his mother in Spanish, his mother nodded her head affirmatively, and Mario said that it was okay.

After the officers left with the defendant, the three all helped push a car, which was stuck because of snow and ice, from the driveway before getting into the unmarked squad car and proceeding to the station. Arias was not handcuffed as he left his residence, and the officers did not have hold of his arm. Boucher further testified that Arias was free to leave and would have been allowed to leave if he had asked to do so.

Upon their arrival at the station, Arias was formally arrested by Officer Hulbert, who then gave the defendant Miranda warnings and proceeded to interview him. Arias testified that he asked at this point if he could call his father but was not permitted to do so. Arias admitted that no promises or threats were given to him, and he agreed to be interviewed. The interview began at approximately 5:12 p.m. Arias testified that an hour into the interview he repeated his request to call his father but was again denied permission. Officer Hulbert did not inform the defendant’s parents that the defendant had been arrested.

The defendant told Hulbert that he was playing football with friends when someone pointed out a black guy with his hat tilted to indicate that he was a Black Gangster Disciple. He further stated that while the others chased the victim, the defendant stayed at the football field. Hulbert testified that he interviewed the defendant for approximately 30 to 40 minutes before Officer Brenczewski took over.

Prior to Brenczewski’s interview, Officer Hulbert told Brenczewski that the defendant said that he had been playing football on the day in question and denied being at the shooting. During Brenczewski’s interview, the defendant at first said that he was not involved in the shooting of Willie Ray. After further questioning, however, the defendant admitted that he had a .38 caliber revolver with one round in it. He told Officer Brenczewski that he had come up behind Edward Pacheco, that he saw Pacheco pull out and shoot a gun, and that he, the defendant, then shot a round at the victim while the victim was on the ground. During this interview, the defendant never indicated that he did not want to talk to Officer Brenczewski. The interview lasted from 45 minutes to an hour, and a taped statement was made of the defendant's confession between 8:58 and 9:02 p.m.

Boucher testified that he had called the defendant’s father at approximately 8 that evening. During the phone call, Boucher told the defendant’s father that they were still talking to the defendant, that the defendant would likely be detained, and that the officer would call the defendant’s father back. Boucher did not tell the defendant’s father at that time that the defendant had already been placed under arrest.

Arias testified that the police called his father at approximately 9 p.m., and he spoke with his father at that time. He did not know whether his father had been called earlier. The officers informed his father that he had been placed under arrest and that he would be detained. The defendant’s father, Miguel, testified that he received only one phone call from the police sometime after 6 p.m. and was told at that time that his son had been arrested.

Following the presentation of evidence, the defendant’s concession that the officers had probable cause to arrest, and arguments, the trial court quashed the arrest and suppressed Arias’ confession. The court found that the defendant was arrested commencing from his departure from his home. The court then concluded that the officers violated the defendant’s constitutional rights as outlined in Payton v. New York (1980), 445 U.S. 573, 63 L. Ed. 2d 639, 100 S. Ct. 1371, and People v. White (1987), 117 Ill. 2d 194, 512 N.E.2d 677, in that they entered the exterior door of the porch without a warrant, without exigent circumstances and without consent. Having further found that there was not sufficient attenuation between the defendant’s arrest and his confession, the trial court suppressed the confession. The State then brought this appeal.

The Supreme Court of the United States in Payton held that the fourth amendment “prohibits the police from making a warrant-less and nonconsensual entry into a suspect’s home in order to make a routine felony arrest.” (445 U.S. at 576, 63 L. Ed. 2d at 644, 100 S. Ct. at 1375.) The Supreme Court of Illinois in White extended the rule of Payton, concluding that the suspect’s “home” for purposes of fourth amendment protection could be any place where the suspect dwells with the intent to remain there indefinitely. (White, 117 Ill. 2d at 210-12, 512 N.E.2d at 682-83.) In this case the defendant argues and the trial court concluded that the officers’ entry of the porch violated the defendant’s rights as described by the courts in Payton and White. We disagree.

Initially, we note that the porch in this case does not possess the characteristics concomitant to the “home” described by the court in White. Neither the defendant nor anyone in his family dwelled on the porch with the intent to remain there indefinitely. On the occasion of the officers’ entry, the porch was, in fact, functionally and structurally different and distinct from the house. As Mario testified, the porch functioned as a storage place for furniture and other things which were not being used. The porch is surrounded by windows, and its entry door is only a single-screen door. The door between the porch and the house on the other hand is a heavy wooden door with two key locks and a “peek” hole. The only window between the porch and the house is covered by a shade and is blocked on the inside of the house by a large dining-room cabinet. There is no doorbell on the outside door, and the screen door at the time of the officers’ entry was not locked. Mario testified that a knock on the outside door usually could not be heard from inside. While several people were in the house when the officers arrived, the porch was unoccupied. From these facts it appears that the expectation of privacy on the porch was relatively slight compared to that enjoyed within the house.

Moreover, we emphasize the fact that the officers here did not enter the porch in order to search the porch or to effect an arrest on the porch. They entered the porch merely to knock on the door of the house — to make their presence known. The officers’ actions are not proscribed under the fourth amendment; on the contrary, their actions are encouraged by the requirement that officers knock on the suspect’s door and announce their presence. (People v. Marinez (1987), 160 Ill. App. 3d 349, 353, 513 N.E.2d 607, 610.) Their entry of the porch to knock on the interior door was no more intrusive than that of a man delivering packages, “a boy collecting for the newspaper or a little girl selling girl scout cookies.” (People v. Jones (1983), 119 Ill. App. 3d 615, 622, 456 N.E.2d 926, 933). Other State supreme courts have held that the entry by police officers into an enclosed back porch in order to knock on an interior door did not violate the principles of reasonableness imposed upon those conducting government searches and seizures. (Commonwealth v. McDonnell (1986), 512 Pa. 172, 516 A.2d 329; State v. Prudhomme (Minn.1979), 287 N.W.2d 386).) Like the officers’ entries in those cases, the officers’ entry in this case was not unreasonable under the circumstances. (People v. Abney (1980), 81 Ill. 2d 159, 173, 407 N.E.2d 543, 549 (“The guiding principle is reasonableness under constitutional provisions governing searches and seizures”).) Accordingly, we conclude that the trial court erred in holding that the police violated the defendant’s rights when they entered the porch to knock on the door of the house.

The defendant argues that even if their entry of the porch was permissible, the officers’ entry of the apartment itself violated the defendant’s rights. The defendant asserts that Mario’s consent is vitiated by the fact that the officers did not tell Mario their true intention, which was to arrest the defendant. We disagree. The entry into the defendant’s home by Mario’s invitation was effected with no more subterfuge than was used by the officers in People v. Moore (1981), 105 HI. App. 3d 264, 434 N.E.2d 300. In that case, police officers, having probable cause to arrest the defendant, went warrantless to the defendant’s apartment, where they met the defendant’s wife. The officers told her that they knew her husband did not commit the robbery they were investigating but wanted to talk to him because they thought that he knew who did. Later, the officers called the defendant, asking him to come to the station to answer some questions. When the officers returned to the defendant’s house, the defendant accepted the officers’ invitation to ride with them to the station, where he was arrested. The defendant asserted that the arrest was invalid under Payton because the officers deceitfully designed to remove him from his house. The court disagreed, however, concluding that “the subterfuge allegedly used [did] not violate fundamental fairness and [did] not illegally circumvent the rule announced in Payton." Moore, 105 Ill. App. 3d at 269, 434 N.E.2d at 304.

Arias argues that Moore is distinguishable because the defendant in that case was arrested outside of his home. However, where the defendant alleges that his arrest was effected through deceitful conduct, the fairness of the arrest does not turn on whether it occurred inside or outside of his home. (See People v. Bean (1981), 84 Ill. 2d 64, 417 N.E.2d 608.) In Bean, police officers with probable cause, without a warrant and without exigent circumstances knocked on the door of the defendant’s home. The defendant’s mother answered, and the officers identified themselves and told her that they wanted to see the defendant. After the mother invited them inside, the officers proceeded to arrest the defendant. Notwithstanding the fact that the officers indicated their intention merely “to see” the defendant while they actually intended to arrest him, the supreme court of Illinois concluded that the defendant’s mother voluntarily invited the officers into the apartment and that the arrest was, therefore, valid. (Bean, 84 Ill. 2d at 70, 417 N.E.2d at 611.) In this case, the officers’ actions were little different from those of the officers in Bean. After identifying themselves to Mario and indicating that they wanted to question the defendant, Mario invited the officers into the house. No one else in the house objected to the presence of the officers. Under these circumstances, we conclude that Mario’s inviting the police to enter the apartment was voluntary and did not affect the legality of the defendant’s subsequent arrest.

As a final matter, we note that while he did not urge the argument on appeal, the defendant asserted in his motion to suppress that his confession should be suppressed solely because the officers violated section 3—2 of the Juvenile Court Act (Ill. Rev. Stat. 1985, ch. 37, par. 703—2) in refusing to honor the defendant’s request to contact his father. In support of his argument, he cited to People v. Travis (1984), 122 Ill. App. 3d 671, 462 N.E.2d 654, and People v. McGhee (1987), 154 Ill. App. 3d 232, 507 N.E.2d 33, appeal denied (1987), 116 Ill. 2d 570, 515 N.E.2d 120. Neither case, however, stands for the argued proposition. Rather, the courts in both cases observed that violation of section 3—2 of the Juvenile Court Act is only one factor in determining whether a minor defendant’s confession is voluntary. (Travis, 122 Ill. App. 3d at 677, 462 N.E.2d at 656; McGhee, 154 Ill. App. 3d at 236-37, 507 N.E.2d at 35.) While both courts concluded that the minors in their respective cases gave inculpatory statements involuntarily, we note that a significant factor contributing to the “totality of the circumstances” in both cases was the fact that the minors in both cases were arrested and detained without probable cause in violation of their rights as defined by the Supreme Court of the United States in Dunaway v. New York (1979), 442 U.S. 200, 60 L. Ed. 2d 824, 99 S. Ct. 2248. (Travis, 122 Ill. App. 3d at 675-77, 462 N.E.2d 657-58; McGhee, 154 Ill. App. 3d at 237, 507 N.E.2d at 38.) No such factor exists here. In fact, the defendant concedes that the officers had probable cause to arrest Arias.

Moreover, considering the “totality of the circumstances” here, we conclude that Arias’ inculpatory statements were not given involuntarily. He testified that he fully understood the Miranda warnings which were explained to him prior to his giving the statements. He testified that he was not under the influence of drugs or alcohol at the time of his arrest and interview. He testified that he was not beaten, struck, threatened or promised anything before he gave the statements and that he was not influenced by any type of duress. He was given juice and permitted to use the restroom. Though his parents were not immediately contacted upon the defendant’s arrival at the station, the defendant’s mother, elder brother and girlfriend all knew that he had been taken to the police station, and his mother and brother knew that there was a phone number on the card which had been handed to them by the officers. Moreover, though the defendant indicated that he wanted to call his father, he testified that he only wanted to inform his father of his arrest, and he further testified that his giving the statements was not influenced by his inability to contact his father. Therefore, though the police erred in not immediately attempting to notify the defendant’s parents of his arrest, their failure did not, in view of all of the surrounding circumstances, render the defendant’s statement involuntary.

For these reasons we conclude that the trial court erred in quashing the defendant’s arrest and suppressing his inculpatory statements.

We accordingly reverse its judgment and remand the cause for proceedings consistent with this opinion.

Reversed and remanded.

BARRY and HEIPLE, JJ., concur.


text:
    RALPH W. SHANKLAND, Plaintiff-Appellant, v. MORRIS LANG et al., Defendants-Appellees.
    Third District
    No. 3—88—0342
    Opinion filed February 28,1989.
    Louise B. Bigott, of Kankakee, for appellant.
    Robert J. Baron, of Rooks, Pitts & Poust, of Joliet (Pamela Davis, of counsel), for appellees.
   JUSTICE STOUDER

delivered the opinion of the court:

The plaintiff, Ralph Shankland, appeals from the judgment of the circuit court of Kankakee County, denying his petition for relief from a final judgment, filed pursuant to section 2 — 1401 of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 1 — 101 et seq.). Shankland filed his medical malpractice action against the defendants, Morris Lang and Richard Stoval, on May 21, 1984. The defendants filed their appearance and answer along with interrogatories, and the case was called for a pretrial conference on October 25, 1984. Defense counsel appeared for the conference, but plaintiff’s counsel did not. Thereupon, on its own motion, the trial court dismissed the case for want of prosecution.

On June 12, 1985, defendants filed a motion to compel answers to interrogatories. At the hearing on the defendants’ motion on June 14, 1985, the plaintiff did not appear, and the court entered an order granting the defendants’ motion. The plaintiff did not comply with that order, and defendants filed a motion for sanctions on October 24, 1985. Thereafter defense counsel appeared in court on November 7, 1985, and an order was entered by agreement of the parties, giving the plaintiff 14 days to answer the defendants’ interrogatories and request for production, and ordering the plaintiff to pay costs and fees of $240 within seven days. When the plaintiff failed to comply with this order, the defendants filed a second motion for sanctions. At the hearing on their motion on January 16, 1986, the defendants asked the court to dismiss the plaintiff’s action for failure to comply with a discovery order. The court concluded that it could not enter such a dismissal since the case had already been dismissed for want of prosecution on October 24, 1984, and that the case had never been reinstated.

On November 2, 1987, the plaintiff, by another attorney, filed a motion to reinstate the complaint. He thereafter filed an amended motion to reinstate the complaint and then filed a motion to supplement the amended motion. The plaintiff also tendered the sum of $240, representing the costs assessed on November 7, 1985. The defendants, in response, filed a motion to dismiss. After a hearing on the defendants’ motion to dismiss, the trial court denied the plaintiff’s motion to reinstate the complaint. The plaintiff then brought this appeal.

The problem in this case arises because of the events following the dismissal for want of prosecution. The dismissal apparently was not noted by defense counsel or acknowledged by plaintiff’s counsel, because the parties in November of 1987 had an order entered by agreement pertaining to the plaintiff’s answering interrogatories and paying sanctions.

We agree with the defendants’ assertion that it is the duty of every litigant to follow the progress of his case. We note, however, that this duty was overlooked by both parties. Indeed, had the defendants complied with this duty, they should not have filed motions to compel answers to interrogatories and motions for sanctions after the case had been dismissed for want of prosecution. Because such motions were filed, the proceedings continued inconsistently with the court’s prior judgment, thereby revesting the trial court with jurisdiction. (People v. Kaeding (1983), 98 Ill. 2d 237, 240-41, 456 N.E.2d 11, 14.) Under these circumstances, there was no basis for the trial court to grant or deny the plaintiff’s petition to reinstate the cause as it had been reinstated by the actions of the parties. (See Ridgely v. Central Pipe Line Co. (1951), 409 Ill. 46, 50, 97 N.E.2d 817, 820.) Therefore, since at the time the court ruled on plaintiff’s petition there was no dismissal judgment to be vacated, the court’s order represented a decision regarding a nonexistent judgment. Accordingly, we vacate the judgment of the circuit court of Kankakee County and remand the cause for proceedings consistent with this opinion.

Reversed and remanded.

BARRY and SCOTT, JJ., concur.


author: JUSTICE LUND

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellant, v. JOHN D. RHOADES, Defendant-Appellee.
    Fourth District
    No. 4—88—0617
    Opinion filed February 23, 1989.
    Rehearing denied March 30, 1989.

      Vince Moreth, State’s Attorney, of Carlinville (Kenneth R. Boyle, Robert J. Biderman, and Michael K. Blazicek, all of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
    No brief filed for appellee.
   JUSTICE LUND

delivered the opinion of the court:

Defendant’s driver’s license was suspended pursuant to section 11—501.1 of the Illinois Vehicle Code (Code) (Ill. Rev. Stat. 1987, ch. 95½, par. 11—501.1). Defendant filed a petition to rescind summary-suspension pursuant to section 2 — 118.1 of the Code (Ill. Rev. Stat. 1987, ch. 95½, par. 2 — 118.1). The circuit court of Macoupin County granted the petition and ordered the clerk of the court to notify the Secretary of State of the rescission. The State appeals.

The appellee has filed no brief in this court. However, the record is simple, and the claimed error may be decided on the merits without the assistance of such brief. First Capitol Mortgage Corp. v. Talandis Construction Corp. (1976), 63 Ill. 2d 128, 133, 345 N.E.2d 493, 495.

Defendant was arrested for driving under the influence of alcohol following a one-car collision, which occurred in the early morning hours of May 26, 1988. At the hearing on the petition to rescind, the arresting officer, Don Albrecht, was called as an adverse witness for defendant. He testified that while on duty, at approximately 1:20 a.m., he heard a collision and went to investigate. Approximately IV2 blocks north of Officer Albrecht’s location, Albrecht found defendant standing outside a vehicle in a parking lot. The vehicle had damage on one side. In conversation, defendant told Albrecht that he had hit a utility pole several blocks away and had stopped in the parking lot to examine the damage. Albrecht noticed an odor of alcohol about defendant and administered the horizontal gaze nystagmus test. The officer testified defendant failed the test and was placed under arrest for driving under the influence of alcohol. Defendant was placed in the police vehicle, and they drove to the utility pole, which showed evidence of damage. Albrecht and defendant then drove to the police station where Albrecht began processing defendant for the alcohol-related offense. Officer Albrecht was called away to answer a burglar alarm, but he returned some 20 minutes later. Albrecht finished processing defendant. As part of this process, defendant was asked to take the breathalyzer test. He agreed, and Albrecht stated he administered the test several times.

Defendant also testified on his own behalf. He corroborated Albrecht’s testimony in most respects. As to the breathalyzer test, defendant testified he blew into the machine but was told he was not blowing hard enough. The machine indicated a foreign substance was in defendant’s mouth. The test was administered again with the same result. Another officer appeared and examined defendant’s mouth. The test was administered a third time, and the machine again indicated the presence of a foreign substance. Defendant stated he was then taken to jail. Defendant rested his case.

The State moved for a directed verdict. The trial court denied the motion, but stated the only issue in contest was whether defendant refused to complete an alcohol test.

The State recalled Officer Albrecht as its only witness. Albrecht stated he followed the standard procedure for administering the breathalyzer test. After the first attempt, the machine registered mouth alcohol, meaning defendant had burped alcohol into the mouthpiece. The test was twice readministered. The other tests simply indicated the presence of a foreign substance. Albrecht was unable to determine the nature of the foreign substance. Following the third attempt, Albrecht asked defendant to submit to a blood test. The officer informed defendant that a refusal to take the blood test was a refusal to comply with the Code and would result in a suspension of defendant’s driving privileges. However, defendant refused the blood test. The court determined there was no refusal to take the appropriate tests and granted defendant’s petition to rescind his summary suspension.

On appeal, the State argues the court erred in finding defendant had made no refusal to take the proper tests. We agree. Under certain circumstances, it is permissible to require a defendant to undergo multiple tests. (People v. Klyczek (1987), 162 Ill. App. 3d 557, 561, 516 N.E.2d 783, 786.) In this case, the breathalyzer test samples were inconclusive. We have previously held that a failure to give a proper breath sample may constitute a refusal under the Code. (People v. Bates (1987), 165 Ill. App. 3d 80, 82, 518 N.E.2d 628, 630.) While the circumstances surrounding defendant’s inability to register an adequate breath sample are suspicious, we need not rest our decision on that ground. It was clearly reasonable to require defendant to submit to a blood test following the failure to get a conclusive result from the breathalyzer machine. Without the ability to obtain a second test, a defendant may be able to circumvent the statutory summary suspension process by wilfully fouling the breathalyzer machine. Defendant’s refusal to take the blood test warranted the suspension of his driver’s license.

For the reasons stated above, the order of the circuit court of Macoupin County is reversed and the cause is remanded to the circuit court for further proceedings in conformity with this order.

Reversed and remanded.

McCULLOUGH, P.J., and SPITZ, J., concur.


author: JUSTICE GREEN

text:
    ERNEST H. HULS et al., Plaintiffs-Appellants, v. CLIFTON, GUNDERSON AND COMPANY, Defendant-Appellee.
    Fourth District
    No. 4—88—0633
    Opinion filed February 23, 1989.
    Rehearing denied March 28, 1989.

      William M. Goldstein, of Urbana, for appellants.
    D. Cameron Dobbins, of Dobbins, Fraker, Tennant, Joy & Perlstein, of Champaign, for appellee.
   JUSTICE GREEN

delivered the opinion of the court:

Plaintiffs Ernest H. Huís and Dorothy Marlene Huls appeal from an order of the circuit court of Champaign County dated July 28, 1988, which dismissed plaintiffs’ third-amended complaint against defendant Clifton, Gunderson and Company for failure to state a cause of action. (Ill. Rev. Stat. 1985, ch. 110, par. 2 — 615.) We affirm.

Plaintiffs filed their original complaint on August 12, 1986. After various procedures, on June 6, 1988, they filed a three-count, third-amended complaint which generally alleged defendant, a certified public accounting (CPA) firm for two business entities (sellers), had breached a duty it owed to plaintiffs, the subsequent purchasers of those businesses. Count I contained the following allegations: (1) a partner of defendant made plaintiffs aware of the two businesses which were for sale; (2) defendant prepared audited financial statements on and expressed in writing opinions concerning the businesses and provided them to plaintiffs during the negotiations to purchase the two businesses; (3) the audited financial statements showed a total equity value in both businesses of $1,066,553; and (4) defendant knew or should have known plaintiffs would base their decision to offer and contract to pay the final negotiated purchase price partially upon those audited financial statements.

Plaintiffs further alleged in count I that: (1) defendant is a member of the American Institute of Certified Public Accountants (AICPA); (2) AICPA Rule 101.01 requires CPA firms to maintain a certain degree of independence when expressing an opinion about a company in financial statements; (3) individual partners of defendant had “acted as a member of management” of sellers and had “provided substantial business advice” to them; (4) defendant owed a duty to plaintiffs to disclose their relationship with sellers, and their failure to disclose constituted a breach of that duty; (5) defendant’s failure to make disclosure affected plaintiffs’ ability to fairly negotiate the purchase of the two businesses; and (6) as a proximate cause of defendant’s failure to disclose, plaintiffs contracted to pay $1,433,447 in excess of the combined stated equity value of the two businesses, an amount it “might not [have been] willing to pay had such disclosures been made.”

Count II contained the following allegations: (1) AICPA Rule 302.01 provides that a CPA firm shall not charge a contingent fee for professional services rendered; (2) sellers and defendant entered into a contingent fee agreement whereby sellers agreed to pay 5% of the combined sales prices of the two businesses to defendant; (3) defendant prepared audited financial statements on the two businesses and failed to disclose the contingent fee agreement in them; (4) plaintiffs relied upon the statements prepared by defendant; (5) as a proximate result of defendant’s failure to disclose, plaintiffs offered and agreed to pay a purchase price to sellers that “included a contingent fee that the sellers were obligated to pay defendant” in the amount of $125,000; and (6) defendant’s failure to disclose information further prevented plaintiffs from making informed negotiations, thereby causing them to pay more for the two businesses than they would have paid had the disclosures been made. Plaintiffs further sought punitive damages in count II of their third-amended complaint for defendant’s “wilful misconduct.”

Finally, count III contained the following allegations: (1) in the audited financial statements which it prepared, defendant misrepresented its independence with regard to sellers; (2) defendant intended to induce plaintiffs to purchase the two businesses by presenting those statements to plaintiffs; (3) in partial reliance on those statements, plaintiffs contracted to purchase the two businesses for a total price of $2,500,000; (4) had defendant truthfully represented its total relationship with sellers, plaintiffs would not have agreed to pay a purchase price in excess of the combined equity value of the businesses; (5) further, due to defendant’s misrepresentations, plaintiffs were “deprived of having another CPA review [sellers’] *** books and financial records”; and (6) as a proximate result of defendant’s misrepresentations, plaintiffs sustained damages in the amount of $1,433,447, the amount in excess of the stated combined equity values of the two businesses. Plaintiffs further sought punitive damages in count III of their third-amended complaint for defendant’s “wilful misconduct.”

On June 27, 1988, defendant moved to dismiss plaintiffs’ third-amended complaint. It contended the complaint was insufficient in law because no facts were alleged which created a duty on behalf of defendant to disclose their involvement with sellers or their fee arrangement, contingent or otherwise. Further, it claimed plaintiffs nowhere alleged defendant’s opinions failed to fairly present sellers’ financial position or that defendant had negligently prepared the financial statements for the two businesses. Finally, defendant maintained the complaint contained no facts which demonstrated any proximate cause between any alleged act or omission and the damages claimed.

On July 28, 1988, the circuit court dismissed plaintiffs’ third-amended complaint with prejudice. In favorably ruling on defendant’s motion to dismiss that complaint, the court determined “the alleged breach of duty is not and cannot be a proximate cause of the damages claimed and that the pleading fails to set forth facts upon which the relief requested by plaintiffs can be granted.” On appeal, plaintiffs contend each count of their third-amended complaint stated a cause of action against defendant.

Plaintiffs first maintain count I of their third-amended complaint sufficiently stated a cause of action against defendant for fraudulent concealment. They contend AICPA Rule 101.01 created a duty on the part of defendant to disclose its relationship with the sellers, especially since defendant stated the audit “was made in accordance with generally accepted auditing standards,” that defendant breached its duty by failing to disclose the information and, as a proximate result of the omissions by defendant, plaintiffs sustained damages.

AICPA Rule 101.01 states as follows:

“A member or a firm of which he is a partner or shareholder shall not express an opinion on financial statements of an enterprise unless he and his firm are independent with respect to such enterprise. Independence will be considered to be impaired if, for example:
* * *
B. During the period covered by the financial statements, during the financial statements, during the period of the professional engagement, or at the time of expressing an opinion, he or his firm
1. Was connected with the enterprise as a promoter, underwriter or voting trustee, a director officer or in any capacity equivalent to that of a member of management dr of an employee.” (Emphasis added.)

The Second District Appellate Court has concluded that accountants owe a duty to third parties when the purpose and intent of the accountant-client relationship is to benefit or influence a third party. (Brumley v. Touche, Ross & Co. (1985), 139 Ill. App. 3d 831, 487 N.E.2d 641.) There, as alleged here, a partnership of certified public accountants audited the books and records of a corporation and issued an audit report on that corporation. The CPA firm became aware that plaintiff was interested in purchasing the corporation and knew that plaintiff would use the information contained in the audit report to formulate his offer of purchase.

The CPA firm told that plaintiff the report accurately reflected the financial position of the company. In reality, however, the report failed to accurately present the company’s financial position. That plaintiff contended that, because the CPA firm negligently prepared its audit report on the company, he paid $750,000 more for the company than would have been required had the company’s financial position been accurately portrayed. The Second District concluded plaintiff’s complaint, which “also allege[d] the traditional elements of negligence in tort,” was sufficient to state a cause of action against the CPA firm. Brumley, 139 111. App. at 836, 487 N.E.2d at 645.

The appellate court in the Brumley decision, then, imposed a duty of care on accountants with regard to third-party purchasers like those involved here. Under Brumley, defendant here possesses only the duty to fairly and accurately present the financial position of the two businesses. Here, no contention exists that defendant here failed to properly represent the companies’ financial position. Plaintiffs only allege defendant failed to disclose the extent of its relationship with the two companies.

Plaintiffs urge us to also impose on defendant a duty of independence in order to promote the accuracy of the information given in the financial reports or to disclose the lack of that independence. AICPA Rule 101.01 does not require disclosure of this information. Rather, the rule prohibits a certified public accountant from expressing an opinion about a company if he is not independent with respect to that company. An accountant’s independence is considered to be impaired if he is a member of management of the company. Plaintiffs here allege one of defendant’s partners “acted as a member of management of both of said companies.” Arguably, defendant could have owed a duty to plaintiffs to disclose its relationship with the two businesses.

However, even if we conclude plaintiffs’ complaint set out facts sufficient to support a breach of duty by defendant, plaintiffs still had to set out all of the necessary elements for a cause of action for fraudulent concealment. For concealment to amount to a misrepresentation, not only must it have been done with the intent to deceive under circumstances creating an opportunity and duty to speak (Lindsey v. Edgar (1984), 129 Ill. App. 3d 718, 473 N.E.2d 92), the concealed information must also have been such that the other party would have acted differently had he been aware of it. (Obermaier v. Obermaier (1984), 128 Ill. App. 3d 602, 470 N.E.2d 1047.) Proof of damage resulting from an alleged fraud is also an essential element in an action for fraud. In re Application of Busse (1984), 124 Ill. App. 3d 433, 438, 464 N.E.2d 651, 655.

In count I, plaintiffs alleged defendant’s breach of its duty of disclosure caused it to offer “to pay a price greater than the equity value of said businesses, *** which excess value such purchaser might not [have been] willing to pay had such disclosures been made.” (Emphasis added.) Apparently, plaintiffs do not seek to overturn the sale and recover the purchase price paid but rather attempt to recover as damages that amount over and above the $1,066,553 equity value of the entities listed in the financial statements which they paid to purchase the companies.

However, plaintiffs fail to allege that what they received was not worth the money they paid for it or that they could have purchased the companies for less. Furthermore, they do not state they would not have purchased the companies had they known of the lack of independence between the businesses and defendant. Thus, even assuming, arguendo, that count I of plaintiffs’ third-amended complaint contained allegations sufficient to establish a duty, a breach of that duty, and a causal connection between the breach and the damages they alleged they sustained, plaintiffs failed to sufficiently allege an element of damages. Count I of plaintiffs’ third-amended complaint failed to state a cause of action for fraudulent concealment.

Similar reasoning as applied to count I of plaintiffs’ third-amended complaint also applies to plaintiffs’ count III. In count III, plaintiffs claimed defendant misrepresented its independence to plaintiffs when it failed in its duty to disclose its relationship with sellers; defendant’s failure to disclose that information constituted wilful misconduct; defendant’s omission of its relationship in the financial statements they prepared created the appearance of independence; defendant intended to induce plaintiffs to purchase the businesses with the financial statements; that plaintiffs relied upon the information contained in the statements; and that plaintiffs agreed to pay a purchase price in excess of what they would have paid had they known of defendant’s relationship and fee arrangement with sellers.

Here, plaintiffs appear to allege in count III that defendant possessed a duty to disclose its lack of independence to plaintiffs and the omission of that information from its financial statement on the two entities constituted negligent conduct. Even if defendant had a fiduciary duty outside of the common law duty set forth in Brumley to disclose this information, plaintiffs again failed to adequately allege any damages they sustained. They claim they would not have purchased the entities for the agreed upon price had they known of the connection between sellers and defendant. However, they did not indicate whether they could have purchased the companies at a lesser price or whether they would have foregone the purchase altogether. Nor did they allege the property they purchased was not worth the money they paid. Count III failed to state a cause of action for fraudulent misrepresentation.

Finally, in count II of their third-amended complaint, plaintiffs alleged AICPA Rule 302.01 prohibits a CPA firm from charging a contingent fee for professional services it renders. Plaintiffs further contended that, because defendant and sellers did, in fact, have a contingent fee arrangement, defendant had a duty to disclose the arrangement in the audited financial statements it prepared. They maintained defendant breached its duty by failing to disclose the information and, as a proximate result of the omissions by defendant, they sustained damages, in that “they offered and agreed to pay a purchase price for the two businesses that included the contingent fee” which sellers were required to pay to defendant.

We agree with plaintiffs that the existence of a sales commission to be paid by a seller to an agent for obtaining the buyer tends to increase the price required by the seller. However, plaintiffs have cited no cases which indicate buyers of property, such as plaintiffs here, are entitled to recover a portion of the purchase price from the agent because the sales commission was improper and not disclosed to the buyers. Nor are we aware of any such case. We hold that count II also failed to state a cause of action.

For the reasons stated, the order of the circuit court of Champaign County is affirmed.

Affirmed.

LUND and KNECHT, JJ., concur.


author: JUSTICE McNAMARA

text:
    INDEPENDENCE TUBE CORPORATION, Petitioner-Appellee, v. AARON LEVINE, as Trustee for Philip Yontez, et al., Respondent-Appellant.
    First District (3rd Division)
    No. 87—3640
    Opinion filed December 28, 1988.
    Modified on denial of rehearing March 15, 1989.

      Edwin H. Conger and Edward Eshoo, Jr., both of Chicago (Tenney & Bentley, of counsel), for appellant.
    Bell, Boyd & Lloyd, of Chicago (John P. Scotellaro and Karen A. Suizzo, of counsel), for appellee.
   JUSTICE McNAMARA

delivered the opinion of the court:

Petitioner, Independence Tube Corporation, filed a petition in the trial court to determine the value of 100 Class A shares of its stock held by the respondent, Aaron Levine, as trustee for Philip, Christopher, Heather, and Steven Yontez. After a bench trial, the trial court entered an order assessing the fair value of Independence’s Class A shares at $550 per share and awarding judgment interest at the rate of 6% from April 1986. The trial court denied Levine’s request for expenses and costs incurred in connection with the proceeding. Levine appeals, contending that the trial court erred in discounting the fair value of Independence’s shares; the trial court’s valuation of Independence’s shares was against the manifest weight of the evidence; and that the trial court erred in denying Levine the expenses of his appraiser and attorney.

Independence is a closely held Illinois corporation engaged in the manufacture of welded steel tubing. Prior to March 20, 1986, it had issued and had outstanding 14,479 shares of Class A stock and 318,600 shares of Class B stock. On March 20, 1986, Independence sent its shareholders a notice of a shareholders’ meeting to be held on April 10, 1986. The notice recited that the purpose of the meeting was to vote on a proposed amendment to Independence’s articles of incorporation. The amendment would enable the company to make a subchapter S election by making Class A and Class B shares equal in economic respects.

Independence included with the notice an offer to purchase its Class A shares for $500 per share and its Class B shares for $25 per share. David Grohne, Independence’s president, testified that the offer was made both to reduce the number of shareholders to 35 in order to qualify for subchapter S status and to allow those shareholders who wished to sell their closely held and nontraded stock an opportunity to do so. Grohne stated that the offer price for both classes of stock was determined by Independence’s three directors. This determination involved a review of Independence’s audited financial statements, bank appraisals for the preceding three years, two valuations acceptable to the Internal Revenue Service, recent sales of its stock, and each director’s personal knowledge of Independence and its past performance. The goal was to set a fair price, high enough to encourage sufficient tenders so that Independence could qualify for subchapter S status, but not so high as to shortchange those who wished to remain shareholders. The three directors each determined a range of acceptable values. They agreed that $500 per share, common to each of their opinions of value, was a fair price to offer.

On April 9, 1986, Levine formally elected to dissent from the proposed amendment pursuant to sections 11.65(a)(3)(i) and 11.70 of the Illinois Business Corporation Act of 1983 (Ill. Rev. Stat. 1985, ch. 32, par. 1.01 et seq.), and demanded payment for the value of the 500 Class A shares which he held as trustee. On April 10, 1986, the shareholders approved the proposed amendment by the requisite vote of holders of both classes of shares. On May 14, 1986, Independence purchased 8,925 Class A shares and 31,400 Class B shares. Among those tendered and purchased were 400 of the 500 Class A shares held by Levine. On May 20, 1986, Independence filed the amendment to the articles of incorporation with the Illinois Secretary of State.

On May 21, 1986, Independence notified Levine in writing that, in its opinion, the value of the 100 Class A shares held by him was $500 per share. Independence committed to deliver a check for $50,000 upon receipt of the certificate for Levine’s shares. Levine informed Independence that, in his opinion, the shares were worth $774.51 per share and accordingly demanded payment of an additional $27,451. Independence responded that it intended to file a petition in the circuit court to determine the value of the shares as it appeared unlikely that Levine and Independence would reach an agreement as to value. At that time, Independence tendered its check in the sum of $50,000. On June 30, 1986, Independence filed a petition seeking an appraisal of Levine’s 100 Class A shares.

At trial, each side presented testimony as to the value of Levine’s shares. Independence offered the testimony of Robert Schweihs, the national director of the valuation and appraisal services at Touche Ross. Schweihs determined that the value of a Class A share was $500. Schweihs valued the shares as of May 20, 1986, the effective date of the amendment to the articles of incorporation.

Schweihs testified that he began his valuation by conducting a background investigation of Independence. He toured the facility, examined financial statements for the preceding five years, and reviewed information on shipments, price lists, inventory levels, customer profiles, strength of Independence’s markets, growth prospects, prospective budgets, expansion plans, business plans, and strategic plans. Schweihs then applied four valuation methods to arrive at the following range of values: (1) discounted net cash flow— $546 per share; (2) asset accumulation — $509 per share; (3) market comparable — $500 per share; and (4) capital market — $453 per share. Under each method, Schweihs applied a 20% discount factor for lack of market. Schweihs arrived at his $500 valuation by weighting the four approaches, giving the most weight to that approach which best reflected real life transactions, the market comparable approach. The market comparable approach evaluates other sales of the same or similar property. Schweihs believed that this case was well suited to the market comparable approach as there were other transactions, including contemporaneous ones, involving Class A shares of Independence.

Edward M. Murray, Jr., a vice-president of the Continental Bank of Illinois, also testified for Independence. In the preceding three years he had conducted valuations of Independence’s Class A stock and found values as follows: 1983 — $539 per share; 1984 — $410 per share; and 1985 — $540 per share. These values were established after a review of Independence’s audited financial statements and income tax returns for the preceding five years, a tour of the facility, an interview of management, and the gathering of other information.

Jon Paulsen, the midwest regional director of appraisal services for Arthur Young & Co., testified for Levine. Paulsen used two approaches to value Independence’s stock, the market comparable approach and the discounted cash flow approach. Paulsen valued the stock as of March 20, 1986. Under the market comparable approach, Paulsen arrived at a value of $1,080 per share; under the discounted cash flow approach, Paulsen arrived at a value of $1,226 per share. Paulsen opined that the value of Independence’s Class A shares as of March 20, 1986, was $1,000 per share. Paulsen later valued the shares as of May 20, 1986, and determined a value of $1,405. Paulsen examined various factors in arriving at his valuations, including adjusted earnings per share, various financial statistics, cash flow, projected revenue growth as well as historical growth patterns, projected expenses, and estimated taxes. He testified that in his calculations, he applied a discount for lack of market. Paulsen did not apply a discount for the minority posture of the shares because each of the approaches which he used assumes a minority interest.

The trial court concluded the value of Independence’s Class A shares as of March 20, 1986, was $550 per share. The trial court arrived at this value by considering the factors set forth in Stewart v. D.J. Stewart & Co. (1976), 37 Ill. App. 3d 848, 346 N.E.2d 475, as well as the factors set forth in Internal Revenue Service bulletins. The trial court specifically named the following factors: nature and history of the business, general economic outlook and the outlook of the specific industry, book value of the stock, financial condition of the business, earning capacity, dividend-paying capacity, value of Independence’s goodwill and other intangibles, sales of stock, size of the block of stock to be valued, and market price of stock of corporations engaged in like businesses. The trial court determined that its valuation did not represent a material difference from the $500-per-share offer by Independence and accordingly denied Levine’s request to assess expenses of the proceeding against Independence. The trial court awarded interest at 6%.

Levine contends that the trial court improperly discounted the fair value of the dissenting shares to reflect that they represented a minority interest and that they lacked marketability. Levine also contends that the trial court’s valuation of Independence’s shares at $550 per share was against the manifest weight of the evidence. We do not agree.

Section 11.70(e) of the Business Corporation Act provides that a corporation may file a petition requesting the court to determine the “fair value” of shares of stock. (Ill. Rev. Stat. 1985, ch. 32, par. 11.70(e).) The statute does not define the term “fair value” nor does the statute provide any criteria for determining “fair value.” Moreover, our courts have noted that there are no precise rules for determining the value of dissenter’s shares. Rather, our courts have held that stock valuation calls for the exercise of judgment after consideration of all relevant factors. (Ahlenius v. Bunn & Humphreys, Inc. (1934), 358 Ill. 155, 192 N.E. 824; Stewart v. D.J. Stewart & Co. (1976), 37 Ill. App. 3d 848, 346 N.E.2d 475.) The factors which may be considered in valuing stock include investment value, dividend history, projected dividend policy, selling prices of stock of like character, ratio of preferred stock to common stock, size of accumulated surplus applicable to dividends, record of the corporation and its prospects for the future, goodwill, book value of shares, and Internal Revenue Service valuation guidelines. (Ahlenius v. Bunn & Humphreys, Inc. (1934), 358 Ill. 155, 192 N.E. 824; Stewart v. D.J. Stewart & Co. (1976), 37 Ill. App. 3d 848, 346 N.E.2d 475. The weight to be given the various valuation factors is a matter for the trial judge under the circumstances. Stewart v. D.J. Stewart & Co. (1976), 37 Ill. App. 3d 848, 346 N.E .2d 475.

The trial court indicated that it had examined these factors in determining its valuation figure. The trial court heard the testimony of Independence’s president, who indicated that in the years preceding the amendment to the articles of incorporation Independence had paid only modest dividends, approximately 10% of its earnings. Further, the trial court heard extensive testimony from two appraisers for Independence and one appraiser for Levine. Each appraiser explained the valuation approaches he used. The trial court also heard testimony that Independence was experiencing increased foreign competition, that there was excess capacity in the industry, and that the growth prospects were not favorable. Finally, the trial court reviewed the record of Class A stock sales made during the preceding years: (1) in October 1984, 500 Class A shares were sold for $400 per share; (2) in April 1985, 36 Class A shares were sold for $440 per share; (3) in December 1985, 15 Class A shares were sold for $440 per share; and (4) in May 1986, pursuant to the offer to purchase, 8,925 Class A shares held by 43 shareholders were sold for $500 per share.

We believe that the trial court had adequate information upon which to base its conclusion that neither the valuation of Levine’s appraiser nor that of Independence’s appraiser was completely accurate. The trial court’s valuation of $550 per share properly reflects the consideration of Independence’s modest dividend policy, cyclical revenue performance, and plans for expansion. Moreover, the valuation reflects the fact that Independence conducts its business in a market with increasing foreign competition and unfavorable growth potential. Finally, the trial court’s valuation is consistent with historical sales figures.

Levine complains that the trial court improperly applied both a minority discount and an illiquidity discount in arriving at its valuation figure. Although our courts never have addressed the propriety of such discounts in the context of the Act’s “fair value” dissenter’s provision, we find persuasive the fact that other States which have similar provisions do use such discounts when appropriate. These States recommend valuation by three methods — market value, investment value, and net asset value. (See Atlantic States Construction, Inc. v. Beavers (1984), 169 Ga. App. 584, 314 S.E.2d 245; Ford v. Courier-Journal Job Printing Co. (Ky. App. 1982), 639 S.W.2d 553; Blake v. Blake Agency, Inc. (1985), 107 A.D.2d 139, 486 N.Y.S.2d 341.) These cases caution, however, that the trial court must consider any factor which bears on the stock’s intrinsic worth. (Atlantic States Construction, Inc. v. Beavers (1984), 169 Ga. App. 584, 314 S.E.2d 245.) Thus it may be appropriate for the trial court to consider a minority interest factor or a lack of marketability factor. There may be situations in which the minority or the illiquid nature of the stock diminishes its value. In such instances, these factors should be considered in determining fair value. Atlantic States Construction, Inc. v. Beavers (1984), 169 Ga. App. 584, 314 S.E.2d 245.

• 5 The trial court here indicated that it had considered the size of the block of stock being sold when reaching its valuation. Further, the trial court heard various witnesses testify as to the illiquid nature of the shares. Significantly, during the trial, both sides’ appraisers indicated they considered these factors in arriving at their valuation figures. Independence’s appraiser testified that he evaluated the stock as a minority positioned asset, but that he specifically discounted for the minority posture of the stock only under the evaluation approach which did not automatically account for that posture. He further testified that he applied a 20% illiquidity factor in his calculations. Levine’s appraiser testified that in his calculations he also applied a 20% illiquidity factor. He testified further that both approaches which he used “assume a minority interest.” Thus Levine’s appraiser used the two factors which Levine now contends are improper. We believe that the trial court properly considered both the minority factor and the illiquidity factor.

Levine next contends that the court erred in refusing to assess against Independence the costs of the reasonable compensation and expenses of the appraiser employed by Levine and in refusing to assess against Independence the fees and expenses of Levine’s counsel. Levine maintains that the Act mandates the taxation of costs and expenses of the parties’ appraisers and experts in all appraisal proceedings, and permits the taxation of attorney’s fees and expenses when the court determines that fair value materially exceeds the corporation’s offer. We do not agree with Levine’s interpretation of the statute.

Section 11.70(h) of the Business Corporation Act governs the allocation of costs in this case. It provides as follows:

“The court, in an appraisal proceeding commenced under subsection (e), shall determine all costs of the proceeding, including the reasonable compensation and expenses of the appraisers, if any, and experts employed by any party, but shall exclude the fees and expenses of counsel for any party. If the fair value of the shares as determined by the court materially exceeds the amount which the corporation offered to pay for those shares, or if no offer was made, then all or any part of such expenses may be assessed against the corporation. Except as otherwise provided in this Section, the practice, procedure, judgment and costs shall be governed by the Code of Civil Procedure.” (Ill. Rev. Stat. 1985, ch. 32, par. 11.70(h).)

It is well established that statutory language is to be given its ordinary meaning and, in enforcing statutory provisions, courts are bound by the clear and unambiguous language of the statute itself. (Mack v. Seaman (1983), 113 Ill. App. 3d 151, 446 N.E.2d 1217.) Here, the plain language of the statute directs the court to determine all costs and expenses of the proceeding, exclusive of attorney fees and expenses. The statute then provides that the court may assess these expenses against the corporation if the court-determined valuation materially exceeds that offered by the company. Thus, we believe the Act does not mandate the taxation of any costs. Rather, the Act permits the taxation of appraiser and expert costs and expenses, exclusive of attorney fees and expenses, if the court determines that fair value materially exceeds the corporation’s offer. The statute, however, does not define the parameters of materiality.

The trial court determined that its valuation, which exceeded the price offered by $50 per share, did not materially exceed the price per share offered by Independence. The trial court’s valuation represents a 10% increase over the price offered. Levine is unable to cite, and we are unable to find, any case in which a 10% difference was found to be a material valuation increase. In the absence of statutory language or case law to the contrary, we cannot find erroneous the trial court’s ruling that its valuation did not materially exceed the offered price. Because the court’s valuation did not materially exceed the offered price, the trial court properly refused to charge Independence with the costs and expenses of the appraiser employed by Levine.

In view of our holding as to the propriety of the court’s ruling that its valuation did not materially exceed the price per share offered by Independence, we need not reach the issue as to Levine’s right to be reimbursed by Independence for his attorney fees. We note, however, that, as previously mentioned, the Act does not provide for the inclusion of attorney fees and expenses. Rather, it specifically excludes attorney fees and costs. (Ill. Rev. Stat. 1985, ch. 32, par. 11.70.) In light of such exclusionary language, we will not interpret the statute otherwise.

For the foregoing reasons, the judgment of the circuit court of Cook County is affirmed.

Judgment affirmed.

FREEMAN, P.J., and RIZZI, J., concur.