text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. ROBERT E. JOLLIFF, Defendant-Appellant.
    Fourth District
    No. 4—88—0282
    Opinion filed June 1, 1989.

      Daniel D. Yuhas and Gloria A. Carroll, both of State Appellate Defender’s Office, of Springfield, for appellant.
    Richard E. Goff, State’s Attorney, of Clinton (Kenneth R. Boyle, Robert J. Biderman, and Michael K. Blazicek, all of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
   PRESIDING JUSTICE McCULLOUGH

delivered the opinion of the court:

Defendant Robert E. Jolliff appeals the revocation of his probation and the imposition of concurrent prison sentences of 10 years for aggravated kidnapping (Ill. Rev. Stat. 1987, ch. 38, par. 10—2(a)(3)) and four years for aggravated battery (Ill. Rev. Stat. 1987, ch. 38, par. 12—4(a)). Defendant raises four issues for our consideration: (1) whether the trial court erred in sentencing defendant on aggravated battery, an included offense of kidnapping; (2) whether the revocation of defendant’s probation was proved by a preponderance of the evidence; (3) whether reversible error was committed in the State’s cross-examination of defendant at the probation revocation hearing; and (4) whether the trial court abused its discretion when it ordered defendant to reimburse the county for the services of a public defender. We affirm in part and reverse in part.

On January 29, 1987, defendant was charged by amended information with five counts of aggravated kidnapping (Ill. Rev. Stat. 1987, ch. 38, par. 10 — 2(a)(3)), one count of aggravated battery (Ill. Rev. Stat. 1987, ch. 38, par. 12 — 4(a)), and one count of armed robbery (Ill. Rev. Stat. 1987, ch. 38, par. 18 — 2). The charged offenses occurred on October 27, 1986, when defendant and another man, John Butts (Butts), were picked up by the victim in Peoria, Illinois. After travelling a short distance, defendant and Butts threatened the victim with a knife and demanded money. The three travelled farther in the victim’s car, to Clinton, where the victim was repeatedly beaten and kicked, threatened again with a knife, and later left in an abandoned railroad car north of Clinton.

Prior to the commencement of a jury trial, defendant’s court-appointed counsel withdrew as defendant’s counsel and substitute counsel filed an appearance. The court-appointed counsel filed a petition for attorney fees pursuant to section 113 — 3(c) of the Code of Criminal Procedure of 1963 (Ill. Rev. Stat. 1987, ch. 38, par. 113-3(c)). This petition was granted on February 4,1987.

On April 30, 1987, defendant was found guilty of one count of aggravated kidnapping and one count of aggravated battery. On June 17, 1987, defendant was sentenced to three years’ probation, the first six months to be served in the county jail. The court also ordered defendant to reimburse the county for $850.60 in attorney fees paid to defendant’s court-appointed counsel. No appeal was taken from defendant’s convictions or sentence of probation or from the order directing defendant to reimburse the county.

On November 20, 1987, a petition for revocation of defendant’s probation was filed. The petition alleged that on October 30, 1987, defendant, while incarcerated at the De Witt County jail, committed various criminal acts against another inmate, James Brewer. A hearing on the petition was held on January 29,1988.

At the hearing, James Brewer testified to the events of October 30 and October 31, 1987, in the jail. Brewer, a victim of cerebral palsy, testified that the defendant and another inmate forced him, at knife-point, to perform various sexual acts, urinate into a cup and drink the urine, and eat ketchup, mustard, salt, and pepper. Brewer also stated defendant tied him to the cell bars and punched him in the stomach and chest with his fists. Brewer stated that the incident took place between 11 p.m. and 7 a.m. on the night of October 30, that no guards were in the area, and that he tried to call out for help and resist the attacks. On cross-examination, Brewer indicated other inmates were present in the cell block and observed the incident. During cross-examination, Brewer contradicted some of his testimony.

Steven Lenchner, a detective with the De Witt County sheriff’s department, testified that he interviewed the defendant about the incidents shortly after October 30. Lenchner stated that defendant told him he was unaware of the incidents except he thought the other inmate was responsible for the urine incident. Lenchner stated that during the interview, defendant presented a joking demeanor. The defendant denied involvement in the incidents during the interview with Lenchner and later at the hearing on January 29, 1988. Defendant stated that the incidents occurred prior to his arrival in the cell on October 30,1987.

The court found defendant violated his probation by the acts complained of by Brewer. Defendant’s motion for reconsideration of the order revoking probation was denied on March 2, 1988. On March 23, 1988, a second sentencing hearing was held on defendant’s convictions of aggravated battery and aggravated kidnapping. In aggravation, the State presented the other inmate involved in the incidents with Brewer, who admitted he was involved in some of the incidents but denied any knowledge of what defendant was doing at the time. The court found no mitigating factors and sentenced defendant to concurrent prison sentences of 10 years for aggravated kidnapping and four years for aggravated battery. The court again ordered defendant to reimburse the county for the attorney fees paid to his court-appointed counsel.

Defendant’s first claim of error concerns the separate sentences imposed for aggravated kidnapping and aggravated battery at the second sentencing hearing. Defendant contends aggravated battery is an included offense of aggravated kidnapping and, therefore, judgment and sentence on both offenses is erroneous.

The State first contends this appeal concerns only issues arising out of the probation revocation proceedings and, therefore, this court is without jurisdiction to consider this issue, which should have been appealed after the first sentence of probation was imposed. Alternatively, the State argues aggravated battery is not an included offense and thus, judgment on two separate offenses was proper. In response to the State’s claim that this court is without jurisdiction to consider the underlying convictions, defendant contends that until the separate sentences were entered in the probation revocation proceedings, no error in senténcing defendant on two offenses was apparent. Defendant maintains that the original sentence of probation on both offenses evidenced the trial court’s intent that the included offense of aggravated battery merge with the greater offense of aggravated kidnapping.

Supreme Court Rule 604(b) (107 Ill. 2d R. 604(b)) allows a defendant sentenced to probation to appeal the judgment of conviction, the conditions of the sentence, or both. Supreme Court Rule 606 (107 Ill. 2d R. 606) provides a notice of appeal is jurisdictional and must be filed within 30 days after the entry of the final judgment appealed from.

An appeal from proceedings revoking probation is generally limited to issues arising out of the revocation proceedings. (People v. Eisenberg (1982), 109 Ill. App. 3d 98, 100-01, 440 N.E.2d 259, 261.) Such an appeal does not confer jurisdiction on the reviewing court to review the initial judgment of conviction unless that judgment is void. People v. Stueve (1977), 66 Ill. 2d 174, 178, 361 N.E.2d 579, 581.

The record establishes that at the first sentencing hearing, when the sentence of probation was entered on the aggravated kidnapping offense, the trial judge stated the aggravated battery conviction merged into the kidnapping offense. However, at the second sentencing hearing, after revocation, the trial judge entered a separate sentence on defendant’s aggravated battery conviction to run concurrently with the sentence on aggravated kidnapping. We find defendant has not waived this issue and, therefore, we consider the merits of defendant’s claim.

Multiple convictions carved out of a single act are not permissible. (People v. King (1977), 66 Ill. 2d 551, 363 N.E.2d 838.) Multiple convictions and concurrent sentences are supportable where a defendant has committed several interrelated acts. “Act” in this context means any overt or outward manifestation which will support a different offense. King, 66 Ill. 2d at 566, 363 N.E.2d at 844-45.

Defendant was convicted on count I of the second-amended information, which alleged defendant committed aggravated kidnapping by knowingly and secretly confining the victim against his will (Ill. Rev. Stat. 1987, ch. 38, par. 10 — 1(a)(1)) and inflicting great bodily harm upon him, and on count VII, which alleged defendant committed aggravated battery against the victim when he intentionally caused great bodily harm to the victim (Ill. Rev. Stat. 1987, ch. 38, par. 12 — 4(a)).

The victim’s testimony at trial established that the victim first met the defendant and Butts in a parking lot in Peoria. All three talked for a few minutes and decided to drive to get some beer. Butts got into the backseat of the victim’s car and the defendant was in the passenger seat in front. The victim was driving. At the liquor store, the victim remained in the car while defendant and Butts went inside to purchase the beer. The defendant and Butts reentered the car with the beer and the victim proceeded to drive back to the original location. Butts then pulled a knife, put it at the victim’s neck, and told the victim to turn onto Interstate 74 and head toward Bloomington. The victim was then told to exit onto Route 121 from Interstate 74. The victim was ordered to stop on Route 121, where the defendant changed seats with the victim and began driving. The victim was then blindfolded.

According to the victim, the defendant drove for approximately one-half hour to 45 minutes before stopping somewhere in Clinton. All three then got out of the victim’s car and defendant and Butts demanded the victim’s money. After giving them the money in his pants pockets, the victim attempted to run away but he was caught by Butts some distance away from his car in a field. Then defendant and Butts dragged the victim through a ditch and began kicking him in the face. Back near the victim’s car, the defendant punched the victim in the face six to seven times while Butts held the knife. The defendant also kneed the victim in the groin and in the face.

All three men then got back into the car, the victim was blindfolded again, and the defendant was driving. The victim stated they were travelling fast and the defendant and Butts talked about taking him to a dump. The defendant drove for 15 to 20 minutes and stopped at “the dump.” The victim was taken from the car, punched in the stomach three to four times by the defendant while still blindfolded and brought to a railroad car where he was told to stay. After 15 to 20 minutes passed, the victim left the railroad car and ran to a house approximately one mile away.

The defendant testified that Butts was the one who hit the victim, demanded money, and placed the victim in the railroad car while the defendant sat in the backseat of the victim’s car.

Defendant urges that aggravated battery is, by definition, an included offense of the aggravated offense of kidnapping. An included offense is an offense which is established by proof of the same or less than all of the facts or a less culpable mental state than is required to establish the offense charged. (Ill. Rev. Stat. 1987, ch. 38, par. 2 — 9(a).) It may be established by comparison of the relevant statutory sections or by considering the offenses charged in the information. People v. Casey (1989), 179 Ill. App. 3d 737, 741, 534 N.E.2d 1036, 1038; People v. Dace (1984), 104 Ill. 2d 96, 470 N.E.2d 993.

Section 10 — 2(a)(3) of the Criminal Code of 1961 provides:

“Aggravated Kidnaping, (a) A kidnaper within the definition of paragraph (a) of Section 10 — 1 is guilty of the offense of aggravated kidnaping when he:
* * *
(3) inflicts great bodily harm or commits another felony upon his victim.” (Ill. Rev. Stat. 1987, ch. 38, par. 10 — 2(a)(3).)

Section 12 — 4(a) of the Criminal Code of 1961 provides:

“Aggravated Battery, (a) A person who, in committing a battery, intentionally or knowingly causes great bodily harm *** commits aggravated battery.” (Ill. Rev. Stat. 1987, ch. 38, par. 12 — 4(a).)

The information alleged the same aggravating factor, great bodily harm, for both offenses. The evidence established that the victim was beaten the first time approximately 45 minutes after he was blindfolded. The second beating took place at or near the railroad car in Clinton, approximately 20 minutes later, according to the victim. While the occurrences were distinct from each other due to intervening events, the kidnapping was the ongoing event and the evidence sustains the aggravated kidnapping charge. (People v. Turner (1989) 128 Ill. 2d 540, 577.) We conclude the aggravated battery offense merged into the aggravated kidnapping offense, and thus, the sentence entered on the aggravated battery conviction was error.

Next, we consider whether the State met its burden of proving the defendant violated his probation. Section 5 — 6—4(c) of the Unified Code of Corrections (Ill. Rev. Stat. 1987, ch. 38, par. 1005 — 6—4(c)) establishes that the State has the burden of proving a violation of probation by a preponderance of the evidence. The defendant argues the State did not meet its burden of proof because Brewer’s testimony was incoherent, contradictory and, therefore, not credible. Defendant also argues the court considered improper evidence obtained during cross-examination of the defendant.

A reviewing court will not disturb an order revoking probation unless it is against the manifest weight of the evidence. (People v. Crowell (1973), 53 Ill. 2d 447, 292 N.E.2d 721.) The trial judge who hears the evidence is in a better position to weigh the testimony of witnesses than is a reviewing court. (People v. Owens (1983), 116 Ill. App. 3d 51, 451 N.E.2d 988.) While the trial judge, as trier of fact, is presumed to have considered only competent evidence, the presumption is overcome where the record affirmatively shows the contrary. People v. Gilbert (1977), 68 Ill. 2d 252, 258-59, 369 N.E.2d 849, 852.

In the instant case, the evidence at the revocation hearing consisted of testimony from Brewer, the defendant, and a De Witt County detective who talked to defendant about the October 30 incidents. Brewer’s testimony is confused regarding the time of the occurrence, whether he resisted his attackers, and whether jail guards were aware of the attacks. However, as noted by the trial judge, Brewer maintained on cross-examination that the defendant and another inmate were his attackers and that they prevented him from reporting the incident to the jail authorities. The defendant denied participation in the incident but stated that he was aware of one incident between Brewer and the other inmate. The trial judge recognized the conflicting testimony and stated he believed Brewer’s testimony.

Defendant maintains that certain questions during his cross-examination were improper and, further, the testimony was considered by the trial judge in his determination that defendant violated his probation. Defendant urges the errors were not harmless and, therefore, a new hearing is required. The remarks during cross-examination of the defendant are as follows:

“PROSECUTOR: Would [Brewer] have any reason to be upset or angry with you?
DEFENDANT: Not that I can think of.
PROSECUTOR: Would [Brewer] have any reason to come to court to tell these things he’s testified to about?
DEFENDANT: I don’t see why he would.”

Defendant argues he was prejudiced by this testimony because the trial court considered it in its decision. Defendant directs us to the following comments of the trial judge:

“[D]espite [Brewer’s] inconsistencies in his testimony *** apparently, from the initial time and incident in question, when he first talked to the deputies, he said these things were done to him by Mr. Jolliff and Mr. Russell and as suggested by [the prosecutor], there is no reason to include Mr. Jolliff in this manner and none given to the court.”

The State urges and we agree that defendant has waived this issue on appeal because no objection to defendant’s testimony was tendered below. (People v. Cornes (1980), 80 Ill. App. 3d 166, 174, 399 N.E.2d 1346, 1351.) On the merits, we agree with defendant that it was improper for the prosecution to raise an issue on the veracity of Brewer’s testimony during its examination of the defendant. (Cornes, 80 Ill. App. 3d at 174, 399 N.E.2d at 1352.) However, after reviewing the record, we do not find the court relied on the testimony elicited during cross-examination of the defendant.

The record establishes that the court referred to the State’s closing argument where the prosecution urged that there was no reason for Brewer to include the defendant in the attacks unless the defendant was actually involved. The State did not refer to defendant’s testimony on cross-examination in closing argument. In our view, the prosecutor’s comments were based on inferences that could be drawn from Brewer’s testimony and, thus, were not improper. (People v. Jackson (1966), 35 Ill. 2d 162, 171, 220 N.E.2d 229, 235; People v. Williams (1962), 26 Ill. 2d 190, 193, 186 N.E.2d 353, 355.) We find this case substantially dissimilar from People v. Nuccio (1969), 43 Ill. 2d 375, 253 N.E.2d 353, a case relied upon by the defendant. We also conclude that the court’s decision was based on Brewer’s testimony, which it found more credible. We find no error in the order revoking defendant’s probation.

Defendant next argues the reimbursement order, directing defendant to reimburse De Witt County for the attorney fees paid to court-appointed counsel, was an abuse of discretion. Defendant points out there is no evidence in the record of defendant’s ability to pay the debt and no hearing was held as required by section 113 — 3.1(a) of the Code of Criminal Procedure of 1963 (Code) (Ill. Rev. Stat. 1987, ch. 38, par. 113 — 3.1(a)). The State urges that the defendant waived this issue for failure to appeal after the first sentence was imposed. The State also contends that the defendant’s counsel waived hearing on this issue at the first sentencing hearing. In response, defendant urges he is appealing from the order for reimbursement ordered at the second sentencing hearing, the original order of reimbursement having been revoked when defendant’s probation was revoked.

We find defendant has waived this issue in this appeal for failure to object at the first sentencing hearing, and we reject defendant’s assertion that the revocation of his probation revoked also the reimbursement order. (People v. Cozad (1987), 158 Ill. App. 3d 664, 671, 511 N.E.2d 211, 216, cert. denied (1988), 485 U.S. 964, 99 L. Ed. 2d 432, 108 S. Ct. 1233.) The record reveals that an order requiring defendant to reimburse the county for attorney fees was first entered at the original sentencing hearing. At that hearing, the trial judge sentenced defendant to probation and enumerated the conditions of his probation. After a short recess, the trial judge then addressed the reimbursement issue. Defendant’s counsel failed to offer any evidence on the defendant’s ability to pay after the court asked counsel if any evidence would be submitted. The record establishes that only one order directing reimbursement was entered at the first sentencing hearing. The reimbursement issue did not arise in the probation revocation proceedings and, therefore, defendant’s claims of error are not timely. People v. Stueve (1977), 66 Ill. 2d 174, 361 N.E.2d 579.

For the foregoing reasons, we affirm the order revoking defendant’s probation and the sentence entered on the conviction of aggravated kidnapping. We reverse the sentence entered on the aggravated battery conviction.

Affirmed in part; reversed in part.

KNECHT and SPITZ, JJ., concur.


source: Caselaw Access Project

author: PRESIDING JUSTICE McCULLOUGH

license: Public Domain

text:
    BOARD OF EDUCATION OF JACKSONVILLE, SCHOOL DISTRICT NO. 117, Petitioner, v. ILLINOIS EDUCATIONAL LABOR RELATIONS BOARD et al., Respondents.
    Fourth District
    No. 4—88—0691
    Opinion filed June 1, 1989.
    Rehearing denied July 6, 1989.

      David M. Smith, of Springfield, for petitioner.
    Neil F. Hartigan, Attorney General, of Springfield (Robert J. Ruiz, Solicitor General, and Ann Plunkett-Sheldon, Assistant Attorney General, of Chicago, of counsel), for respondent Illinois Educational Labor Relations Board.
    Sandra J. Holman, of Illinois Education Association, of Springfield, for respondent Consolidated School District No. 117 Support Personnel, IEA-NEA.
   PRESIDING JUSTICE McCULLOUGH

delivered the opinion of the court:

The Board of Education of Jacksonville District No. 117 (District) appeals a determination of the Illinois Educational Labor Relations Board (Board). The District argues the Board’s determination was contrary to the manifest weight of the evidence. Since we have no jurisdiction over the cause, we dismiss the appeal. Therefore, we need not reach the merits of the District’s argument.

Only the facts necessary to an understanding of our disposition will be reviewed. On May 17, 1988, the Board found the District committed an unfair labor practice when it refused to bargain over the impact of its decision to eliminate a maintenance foreman position. (Ill. Rev. Stat. 1987, ch. 48, pars. 1714(a)(5), (a)(1).) Additionally, the Board ruled the transfer of the maintenance foreman to a custodial position, rather than a maintenance technician position, was motivated by antiunion animus. (Ill. Rev. Stat. 1987, ch. 48, pars. 1714(a)(3), (a)(1).) The Board ordered reinstatement of the employee to a maintenance technician position, back pay, and impact bargaining. (Jacksonville District No. 117, 4 Pub. Employee Rep. (Ill.) par. 1075, case Nos. 85 — CA—0025—S, 85 — CA—0029—S (Illinois Educational Labor Relations Board, May 17, 1988).) The District filed a motion for reconsideration of the May 17, 1988, order which was denied on August 26, 1988. (Jacksonville School District No. 117, 4 Pub. Employee Rep. (Ill.) par. 1123, case Nos. 85-CA-0025-S, 85-CA-0029-S (Illinois Educational Labor Relations Board, Aug. 26, 1988).) Subsequently, the District filed a petition for review in this court. The petition for review was not filed within 35 days of the May 17, 1988, order but was filed within 35 days of the August 26, 1988, order. The District No. 117, Support Personnel, IEA-NEA (Association), moved to dismiss the petition for review as untimely. The motion was taken with the case and for the following reasons is granted.

In Board of Education of Mundelein Elementary School District No. 75 v. Illinois Educational Labor Relations Board (1989), 179 Ill. App. 3d 696, 534 N.E.2d 1022, this court held the Board did not have authority to reconsider its decisions. The Board of Education in Mundelein appealed a revised order issued by the Board after it had reconsidered its original order. The Board of Education argued the Board did not have authority by statute or rule to reconsider its decisions. The Board argued its past practice created de facto authority to review the decision. This court rejected the argument, noting the Illinois Educational Labor Relations Act (Act) (Ill. Rev. Stat. 1987, ch. 48, par. 1701 et seq.) does not expressly grant the Board the authority to reconsider its orders nor does it provide guidelines. We did not decide whether the Board could enact rules for reconsideration pursuant to section 5(h) of the Act, since the Board had conceded it had not adopted such rules. This court vacated the order issued upon reconsideration as it found it was void. No appeal was taken.

Section 3 — 102 of the Code of Civil Procedure (Code) provides:

“Unless review is sought of an administrative decision within the time and in the manner herein provided, the parties to the proceeding before the administrative agency shall be barred from obtaining judicial review of such administrative decision.” Ill. Rev. Stat. 1987, ch. 110, par. 3 — 102.

The Mundelein case was decided after the petition for rehearing was filed in the instant case. In denying the rehearing in this case, the Board expressed no opinion on whether the District’s petition for rehearing tolled the time period for filing a petition for administrative review in this court. (Jacksonville School District No. 117, 4 Pub. Employee Rep. (Ill.) par. 1123, case Nos. 85—CA—0025—S, 85—CA—0029 — S (Ill. Educational Labor Relations Board, Aug. 26, 1988).) The Association and Board argue the decision in Mundelein will control the determination of the timeliness of the petition for review. The District in its objections to the motion to dismiss argues section 3— 104 of the Code and article VI, section 6, of the Illinois Constitution confer jurisdiction on the court. (Ill. Rev. Stat. 1987, ch. 110, par. 3— 104; Ill. Const. 1970, art. VI, §6.) The District contends the motion to dismiss is not timely since sections 3 — 101 and 3 — 102 of the Code establish limitation periods only. (Ill. Rev. Stat. 1987, ch. 110, pars. 3— 101, 3 — 102.) Since the Association did not object to the filing of the petition below, the District contends it waived its objections to the timeliness of the petition.

Section 3 — 103 provides every action shall be commenced by the filing of a complaint and issuance of a summons within 35 days from the date the decision was served upon the affected party. (Ill. Rev. Stat. 1987, ch. 110, par. 3—103.) Section 3 — 104 of the Code provides:

“Jurisdiction to review final administrative decisions is vested in the Circuit Courts, except as to a final order of the Illinois Educational Labor Relations Board in which case jurisdiction to review a final order is vested in the Appellate Court of a judicial district in which the Board maintains an office.” Ill. Rev. Stat. 1987, ch. 110, par. 3—104.

In Fredman Brothers Furniture Co. v. Department of Revenue (1985), 109 Ill. 2d 202, 486 N.E.2d 893, the court held that the 35-day time stated in the Administrative Review Act (Ill. Rev. Stat. 1981, ch. 110, par. 267 (now section 3 — 103 of the Code)) was a jurisdictional limitation and could not be waived. The court held that the Administrative Review Act conferred special statutory jurisdiction on the circuit court; thus, the jurisdiction was limited by the language of the Act conferring it. See also Board of Education of North Boone Community School District No. 200 v. Regional Board of School Trustees (1987), 156 Ill. App. 3d 504, 509 N.E.2d 132 (where the court held the 35-day period was jurisdictional); see generally Board of Education of Plainfield Community Consolidated School District No. 202 v. Illinois Educational Labor Relations Board (1986), 143 Ill. App. 3d 898, 493 N.E.2d 1130; Board of Education of St. Charles Community Unit School District, No. 303 v. Adelman (1985), 137 Ill. App. 3d 965, 485 N.E.2d 584.

Under the analysis of Fredman Brothers, the District’s argument that the 35-day time period set forth in section 3 — 103 of the Code is a statute of limitations is not well founded. While Fredman Brothers addressed the circuit court’s exercise of special jurisdiction, the same factors apply to the appellate court’s exercise of special jurisdiction. A lack of subject-matter jurisdiction may be raised for the first time on appeal (Burns v. Edgar (1989), 178 Ill. App. 3d 708, 533 N.E.2d 570) even if raised on the appellate court’s own motion (Plainfield, 143 Ill. App. 3d 898, 493 N.E.2d 1130). Since the Board did not have the statutory authority to reconsider its orders, the time limit set forth in the Code for review would start upon service of the final order. (Mundelein, 179 Ill. App. 3d 696, 534 N.E.2d 1022; Plainfield, 143 Ill. App. 3d 898, 493 N.E.2d 1130.) No stay would be effective to toll the running of the 35 days. Therefore, the petition for review here, which was filed some 100 days after the service of the order, is untimely.

The District raises two “reliance” arguments. First, the District contends the Board considered its decision in the instant case as nonfinal. Since the Mundelein board’s decision was considered a final order, Mundelein need not apply to the instant case. In the letter attached to the District’s brief, the Executive Director of the Board states the District’s assessment that the Board considers its orders nonfinal while a motion for reconsideration is pending is correct. We note that the letter upon which the District bases the first part of its reliance argument is not a part of the record on appeal. We, therefore, need not consider this argument. Second, the District argues it relied on the past practice of the Board, so any change in that practice should be prospective only.

Parties have a right to rely on decisions of the supreme court. Reliance on administrative interpretation is entitled to weight in determining whether a decision should be given retroactive or prospective application but it is not controlling. Lower court decisions as well as agency decisions are subject to modification by the supreme court. The agency’s interpretation of statutes which it enforces is persuasive but not binding on the court. However, an agency is bound by an uncontested judicial interpretation of a statute. Larrance v. Human Rights Comm’n (1988), 166 Ill. App. 3d 224, 519 N.E.2d 1203.

In the instant case, although the result seems harsh, the District did not have the right to rely on the Executive Director’s interpretation of the Board’s authority to reconsider its decisions. It should be noted that the Board, in the order denying reconsideration, noted that its authority to reconsider was under review. It, therefore, offered no opinion on the tolling of the 35-day period. Additionally, we note the communication between the District and the Board was an ex parte one.

The District also argues Mundelein should be applied prospectively only. The criteria for determining prospective or retrospective application of a decision are: (1) the decision to be applied prospectively must establish a new principle of law; (2) the purpose of the new decision is best served by prospective application; and (3) the equities of the cause. (Larrance, 166 Ill. App. 3d 224, 519 N.E.2d 1203; Revoal v. Illinois Human Rights Comm’n (1984), 128 Ill. App. 3d 70, 470 N.E.2d 54.) Generally, decisions are applied retrospectively unless the court: (1) expressly states its decision is a clear break with its past decisions; (2) overrules its own past practice; (3) disapproves a prior practice it has previously approved; or (4) overturns a well-established body of lower court precedent. (Larrance, 166 Ill. App. 3d 224, 519 N.E.2d 1203.) Here, Mundelein was the first appellate court to address the Board’s authority to reconsider its orders. Therefore, the first three factors weigh in favor of retrospective application. The Board had been allowing reconsiderations. This could be considered “lower court precedent” in an agency setting. However, the agency had been acting in excess of its statutory authority. In light of the above considerations, we will not apply Mundelein prospectively.

For the above reasons, we dismiss the petition for review.

Dismissed.

LUND and GREEN, JJ., concur.


author: JUSTICE SPITZ

text:
    THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, Plaintiff-Appellant, v. JOHN WASHBURN, Director of Insurance, et al., DefendantsAppellees.
    Fourth District
    No. 4—88—0816
    Opinion filed June 1, 1989.

      William S. Hanley and Patrick V. Reilly, both of Sorling, Northrup, Hanna, Cullen & Cochran, Ltd., of Springfield, for appellant.
    Neil F. Hartigan, Attorney General, and Pfeifer & Kelty, P.C., both of Springfield (Robert J. Ruiz, Solicitor General, and Robert E. Wagner, Special Assistant Attorney General, of counsel), for appellees.
   JUSTICE SPITZ

delivered the opinion of the court:

This is an appeal by plaintiff the Mutual Life Insurance Company of New York (MONY), a life insurance company organized under the laws of the State of New York and authorized to do business and doing business in Illinois, from an order of the circuit court of Sangamon County granting summary judgment in favor of defendants John Washburn, Director of Insurance of the State of Illinois (Director), and James Donnewald, State Treasurer of the State of Illinois (Treasurer). The action was initiated by MONY pursuant to the State Officers and Employees Money Disposition Act (Act) (Ill. Rev. Stat. 1987, ch. 127, par. 170 et seq.) to contest the assessment of the foreign insurance company retaliatory tax for the year 1980 of $321,129.54 pursuant to section 444 of the Illinois Insurance Code (Ill. Rev. Stat. 1987, ch. 73, par. 1056). Plaintiff paid this sum under protest, and plaintiff’s complaint sought a temporary restraining order, a preliminary injunction and a permanent injunction, each without bond, to: (1) restrain the Treasurer from transferring the monies out of the protest fund; (2) restrain the Director from depositing the monies into any fund other than the protest fund or disposing of the monies in any way other than as provided by the Act; and (3) restraining defendants from assessing against, imposing on, or collecting from plaintiff any tax, deficiencies, interest, or penalties connected with this matter and from taking any action to collect or recover from plaintiff the monies paid under protest. The complaint further prayed the court to declare the collection of the tax to be unwarranted and to order a refund of all monies paid under protest, plus interest.

On April 23, 1984, the Illinois Department of Insurance (Department) assessed plaintiff $234,401.12 as a retaliatory tax for the calendar year 1980, plus $86,728.42 interest thereon. Plaintiff paid the assessment under protest and obtained an injunction prohibiting the Treasurer from dispersing the funds pending a resolution of this action.

MONY was audited for the years 1980, 1981, and 1982 and was found by the Department to owe a retaliatory tax for 1980 only. At the time of the audit, the Department requested MONY to furnish it with New York’s Franchise Tax Form CT 33, which would reflect the calculation of the New York tax against the substituted Illinois amounts for each of the years under audit. On April 12, 1984, MONY complied. However, the plaintiff objected to the application of the retaliatory tax against its experience “[ujnless or until the Insurance Department can establish that Illinois domiciled insurers are more heavily burdened by the New York tax formula than they would be under Illinois law.” The Department responded by submitting a letter and invoice for the retaliatory tax in 1980, stating “we feel that the State of New York, in certain instances, charges insurance companies a premium tax at the rate of 2.6% which is a rate higher than that of Illinois.” Again MONY objected, on the basis of the 1981 decision of the Fourth District Appellate Court in Minnesota Mutual Life Insurance Co. v. O’Connor (1981), 98 Ill. App. 3d 1040, 425 N.E.2d 38, contending the Illinois retaliatory tax could only be invoked against New York insurers after a determination had been made of the impact of New York taxes on actual insurers domiciled in Illinois. Subsequently, the Department’s legal staff reviewed this matter and explained that where the Minnesota Mutual case involved only one method utilized by a foreign State to assess privilege taxes against Illinois companies, New York employs seven or eight different methods. Therefore, the Department examines the business experience of each New York insurer to ascertain which of the New York tax computation methods is to be applied and then computes the retaliatory tax by applying the New York calculation method employed to the company’s Illinois business experience for the given tax year. For this reason, some, but not all, New York companies pay a retaliatory tax, although all are subject to it.

On April 10, 1986, MONY paid the assessment under protest and thereafter commenced this action challenging the Department’s interpretation of the retaliatory act. Upon cross-motions for summary judgment and after extensive briefing and oral argument, the circuit court found there was no genuine issue of material fact and entered summary judgment for the defendants. The trial court specifically found:

“The State of New York imposes a tax on Illinois insurance companies, when stripped of all its apparent complexities, of as much as 2.6 percent of gross premiums; whereas Illinois imposes a tax of not more than 2 percent of gross premiums.”

The trial court’s findings were entered on July 20, 1988, as a docket entry, with the special assistant Attorney General to prepare a written order. The written order was entered on July 29, 1988. On August 26, 1988, MONY filed a motion to vacate judgment and reopen the record. At the hearing on the motion, the record was reopened and MONY was allowed to file a copy of plaintiff’s 1980 IL 1120 and copies of estimated 1980 privilege tax returns. Following the hearing held on October 24, 1988, the motion to vacate was denied.

In Reed v. Bascon (1988), 124 Ill. 2d 386, 393, 530 N.E.2d 417, 420, the Illinois Supreme Court recently reviewed the standards for granting summary judgments:

“Section 2 — 1005(c) of the Civil Practice Law (Ill. Rev. Stat. 1985, ch. 110, par. 2 — 1005(c)) provides that summary judgment shall be granted ‘if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ Although summary judgment is to be encouraged as an aid in the expeditious disposition of a lawsuit (Allen v. Meyer (1958), 14 Ill. 2d 284, 292), it is a drastic measure and, therefore, should be allowed only when the right of the moving party is free from doubt (Purtill v. Hess (1986), 111 Ill. 2d 229, 240; Beverly Bank v. Alsip Bank (1982), 106 Ill. App. 3d 1012, 1016). The court must construe the pleadings, depositions, admissions, exhibits, and affidavits on file strictly against the movant in determining whether a genuine issue of material fact exists. Kolakowski v. Voris (1980), 83 Ill. 2d 388, 398.”

The trial court is not obliged to enter summary judgment just because the parties file cross-motions for summary judgment alleging there exists no genuine issue of material fact. Haberer v. Village of Sauget (1987), 158 Ill. App. 3d 313, 511 N.E.2d 805.

In this case, the facts are undisputed. The determination by the trial court required the construction of the statutes and their application to the facts. Since the matter before the trial court could be determined as a question of law, this was a proper case in which to enter a summary judgment. See Lewis v. Illinois Institute of Technology (1977), 50 Ill. App. 3d 418, 365 N.E.2d 1079.

In this appeal, two issues are raised. These issues are: (1) whether, as a condition precedent to the application of the Illinois retaliatory statute to plaintiff, the laws of New York must be shown to “invariably or even generally” impose a more onerous tax burden on Illinois insurance companies than New York companies would incur under the laws of Illinois; and (2) whether under the facts of this case the uniformity section of the revenue article of the Illinois Constitution of 1970 (Ill. Const. 1970, art. IX, §2) was violated.

The United States Supreme Court has reviewed constitutional challenges to a California statute which imposed a retaliatory tax on foreign insurers doing business in California when the State of incorporation of the insurer imposed higher taxes on California insurers conducting business in the foreign State than California ordinarily imposes on such other State’s insurers doing business in California. The United States Supreme Court found: (1) the statute does not violate the commerce clause of the United States Constitution (U.S. Const., art. I, §8, cl. 3) because the McCarran-Ferguson Act (15 U.S.C. §1011 et seq. (1982)) removed the State’s power to regulate and tax the insurance industry from commerce clause restrictions; (2) the privileges and immunities clause of the United States Constitution (U.S. Const., art. IV, §2) is inapplicable to corporations; and (3) the statute does not violate the fourteenth amendment prohibition against denying any person equal protection under the law since the classification is reasonable and rationally related to a legitimate State purpose, to wit: the promotion of the California insurance industry by deterring barriers to the interstate business of domestic insurers. (Western & Southern Life Insurance Corp. v. State Board of Equalization (1981), 451 U.S. 648, 68 L. Ed. 2d 514, 101 S. Ct. 2070.) Of course, plaintiff’s constitutional challenge to the Illinois statute comes under the uniformity clause of the revenue article of the Illinois Constitution of 1970 (Ill. Const. 1970, art. IX, §2), which states:

“In any law classifying the subjects or objects of non-property taxes or fees, the classes shall be reasonable and the subjects and objects within each class shall be taxed uniformly.”

Article 9, section 1, of the Illinois Constitution of 1870 also required privilege taxes to be uniform as to the classes on which they operated. (See Raymond v. Hartford Fire Insurance Co. (1902), 196 Ill. 329, 63 N.E. 745.) The class upon which the retaliatory statute operates is insurers of foreign States whose laws require companies of this State to pay higher taxes than foreign companies would pay in Illinois. (Home Insurance Co. v. Swigert (1882), 104 Ill. 653.) In Home Insurance, the Illinois retaliatory statute then in effect (1869 Ill. Laws 209, 227-28 (§29)) was held constitutional under the uniformity clause of the Illinois Constitution of 1870, and plaintiff has not brought any good reason to our attention which would alter that result.

In any event, plaintiff does not so much complain that the statute is unconstitutional as that the application of the statute to plaintiff in this case is unconstitutional because the tax is not applied uniformly to the class. However, this constitutional question need not be reached because of the decision on the remaining issue, which does not involve a constitutional question. See Durkin v. Hey (1941), 376 Ill. 292, 33 N.E.2d 463.

The retaliatory statute (Ill. Rev. Stat. 1987, ch. 73, par. 1056), within the context of this case, may be paraphrased this way: when the laws of New York require Illinois insurance companies to pay greater taxes “in the aggregate” than the laws of Illinois impose on companies from New York, then the tax laws of New York will be applied by Illinois to insurance companies from New York which are doing business in Illinois. The purpose of this statute is to promote the interstate business of Illinois insurance companies by preventing other States from burdening Illinois insurers with excessive taxes. (Trinity Universal Insurance Co. v. O’Connor (1983), 113 Ill. App. 3d 560, 447 N.E.2d 937.) In short, the objective of the statute is to promote uniform taxation (Metropolitan Life Insurance Co. v. Washburn (1986), 112 Ill. 2d 486, 493 N.E.2d 1071), and this is accomplished by placing the same restrictions on insurance companies from other States as those other States place on Illinois insurance companies. (Germania Insurance Co. v. Swigert (1889), 128 Ill. 237, 21 N.E. 530.) Nevertheless, the retaliatory statute is penal in nature and therefore must be narrowly construed. Minnesota Mutual Life Insurance Co. v. O’Connor (1981), 98 Ill. App. 3d 1040, 425 N.E .2d 38.

The ultimate question in this case is whether the Department complied with this court’s Minnesota Mutual decision in assessing the retaliatory tax against plaintiff. The Minnesota Mutual case makes it clear that the focus of section 444 is not on the annual fluctuation of one company’s business, but on the laws of the foreign State and the impact of those laws to Illinois companies doing business in the other State. In Minnesota Mutual, this court concluded that the Department failed to demonstrate that Minnesota’s privilege tax was not “invariably or even generally” more onerous than Illinois’ privilege tax.

Since such a tax on foreign insurers may keep Illinois insurers from conducting business in the other State, the Illinois Supreme Court has applied the retaliatory statute even in cases where no Illinois insurers are doing business in the foreign State, but where it was clear the law of the foreign State was more burdensome. (Germania Insurance Co. v. Swigert (1889), 128 Ill. 237, 21 N.E. 530.) In the event Illinois insurers are conducting business in the other State, it seems clear that the first step of the analysis is to determine the effect of the other State’s taxation provisions on Illinois companies doing business there. Where the other State has more than one method of computing the tax of the Illinois insurers, it should be determined which of these methods was actually applied to the Illinois companies because the mere possibility of a higher tax under a foreign statute which was not actually applied to Illinois insurers cannot form the basis for assessing a retaliatory tax. Massachusetts Mutual Life Insurance Co. v. Parkinson (1953), 414 Ill. 120, 110 N.E.2d 256.

Here, the Department incorrectly assessed the retaliatory tax. It took the plaintiff’s business experience in 1980, calculated the tax based on Illinois and New York formulas, determined the New York tax was higher, and demanded the difference. There is no evidence Illinois companies doing business in New York were actually being taxed at a greater rate than they would have been under the Illinois tax laws, although the possibility exists. The fact the plaintiff’s 1981 and 1982 business experience did not result in the imposition of the retaliatory tax indicates that the New York tax does not invariably, or even generally, result in a more onerous tax. Moreover, in response to interrogatories, defendants disclosed the New York insurance companies doing business in Illinois which paid a retaliatory tax in Illinois for 1979-84, inclusive. Of the 118 companies, only 40 paid a retaliatory tax during this six-year span. Thirty-one of these companies paid the tax for only one or two years. On the other extreme, only two companies paid for each of the six years and one company for five of the six years.

The record does not disclose the defendants ever surveyed Illinois insurance companies doing business in New York to determine their New York tax experience. Instead, the Department and the trial court compared statutory tax provisions and concluded that because it was possible Illinois corporations could be taxed at a higher rate in New York than they would be in Illinois, then the New York rates should apply to plaintiff. Defendant’s brief summarized the steps used to determine the amount of the retaliatory tax as follows: (1) the total Illinois taxes and fees on foreign corporations are calculated; (2) the tax is calculated on the subject company’s business based on the laws of the jurisdiction under whose laws the company is organized; and (3) if the tax would be higher under the laws of the other jurisdiction, then a retaliatory tax is imposed. Defendants concede that, because of the complexity of the New York tax law, it is impossible to determine whether New York taxes are more onerous than Illinois taxes merely from a comparison of the statutes. It is for this reason that the defendants applied the tax laws on a company-by-company basis in order to determine the total aggregate taxes of each State based on the business experience of that company in any given year.

The Illinois privilege tax on foreign insurers is 2% of net taxable premium income (plus the retaliatory tax if applicable). Net taxable premium income is defined as gross taxable premium income less (a) premium returned during preceding calendar year, and (b) dividends paid in cash, except for deferred payments on maturing life insurance policies, which are applied to reduce the premium or left to accumulate to the credit of policyholder or annuitant, but not if used to purchase paid-up insurance or to shorten the premium paying period. There are also $200 in filing fees. (Ill. Rev. Stat. 1987, ch. 73, par. 1021.) Any income tax paid to Illinois is credited against the privilege tax, but defendants explained in order to give full credit to foreign corporations for all taxes paid in Illinois, this credit is not applied as a reduction for retaliatory tax calculations.

By comparison, New York’s franchise tax seems a great deal more complicated. In New York, every domestic insurance corporation and foreign insurance corporation doing business in New York must pay a franchise tax. (N.Y. Tax Law § 1501(a) (McKinney 1987).) The tax imposed is calculated in one of four methods, whichever yields the greater tax: (1) 9% of the portion of the company’s entire net income allocated within New York; (2) 1.6 mill for each dollar of total business and capital allocated within New York; (3) 9% on 30% of the entire net income, plus salaries and other compensation paid to elected or appointed officers and to every shareholder owning more than 5% of issued capital stock, less $15,000 and any net loss for the year; or (4) $125. To the greatest of the above amounts is added .8 mill for each dollar of subsidiary capital allocated within New York. N.Y. Tax Law §1502 (McKinney 1987).

Section 1510(b) of the New York Tax Law applies an additional privilege tax on domestic and foreign life insurance companies of 1% on all gross direct premiums, less return premiums thereon. (N.Y. Tax Law § 1510(b) (McKinney 1987).) Direct premiums generally include all payments received as consideration on insurance contracts, except annuity contracts (N.Y. Tax Law § 1510(c)(1) (McKinney 1987)), and gross direct premiums specifically exclude premiums on: (1) some forms of group health insurance for persons aged 65 and over; and (2) with regard to goods in transit, war risks, marine builder’s risks, and risks of navigation, transit, or transportation. (N.Y. Tax Law § 1510(c)(2) (McKinney 1987); N.Y. Ins. Law §4236 (McKinney 1985).) However, if annuity premiums or the premiums excluded by section 1510(c)(2) constitute more than 95% of the premiums received by an insurance corporation, then these otherwise exempted amounts are includible in the calculation of the privilege tax. (N.Y. Tax Law § 1505(b) (McKinney 1987).) After calculating gross premiums less returns, the taxpayer is also allowed to deduct: (1) premiums, less returns, for reinsurance from insurers authorized to transact business in New York; and (2) dividends, not including deferred dividends paid in cash on maturing policies or cash surrender values. N.Y. Tax Law §1510(c)(3)(A), (c)(3)(B) (McKinney 1987).

Section 1503 defines entire net income. This statute starts with taxable income, and then lists several pages of items which are specifically includable, excludable, and deductible. (N.Y. Tax Law §1503 (McKinney 1987).) The maximum combined tax rate for franchise and privilege taxes under the laws of New York is 2.6%. N.Y. Tax Law §1505(a) (McKinney 1987).

As defendants suggest, an Illinois insurance company doing business in New York would have a varied New York tax experience based on the business experience of that company in any given year. Since no Illinois company doing business in New York will have the exact same business experience as a New York company doing business in Illinois, defendants argue the only way they can determine if the established tax is appropriate is to compare the New York and Illinois taxes on the business experience of the subject company. However, that is not what the statute contemplates.

Strictly construed, the statute requires a State-by-State comparison. If New York law is determined to be more onerous than Illinois law, then New York law is applied to all New York companies. Defendants may not pick and choose which law to apply. Nevertheless, defendants’ procedures do not apparently allow a New York company doing business in Illinois to pay only the equivalent New York tax where that tax would be less than would be imposed under Illinois law.

Although the New York tax imposed on Illinois insurance companies doing business in New York could be greater than the Illinois tax on foreign insurance companies, it could also be less. Therefore, under the holding in Minnesota Mutual, the defendants have not met the prerequisite for imposing a retaliatory tax. Defendants have not demonstrated the New York taxes are invariably, or even generally, more onerous than Illinois tax on foreign insurers.

Accordingly, the judgment of the circuit court of Sangamon County is reversed, and the cause is remanded to the circuit court for entry of summary judgment in favor of plaintiff and such other appropriate relief as is necessary to protect plaintiff’s interests.

Reversed and remanded with directions.

McCULLOUGH, P.J., and KNECHT, J., concur.


text:
    FIRST NATIONAL BANK OF SULLIVAN, Plaintiff-Appellant, v. BRUMLEVE AND DABBS, Defendant-Appellee.
    Fourth District
    No. 4—88—0741
    Opinion filed June 1, 1989.
    Rehearing denied July 6, 1989.

      Harlan Heller, of Harlan Heller, Ltd., of Mattoon, for appellant.

      Hinshaw, Culbertson, Moelmann, Hoban & Fuller, of Chicago (George W. Spellmire, Debra A. Winiarski, and Gerald Haberkorn, of counsel), for appellee.
   PRESIDING JUSTICE McCULLOUGH

delivered the opinion of the court:

Plaintiff the First National Bank of Sullivan (FNBS) appeals an order dismissing its complaint with prejudice pursuant to section 2— 615 of the Civil Practice Law (Ill. Rev. Stat. 1987, ch. 110, par. 2— 615). Plaintiff urges its complaint adequately pleaded a cause of action against the defendant Brumleve and Dabbs (BD) for accountant malpractice and the court erred in finding no proximate cause as a matter of law. We agree and reverse.

FNBS is a national banking corporation located in Sullivan, Illinois. BD is an accounting partnership with an office in Sullivan. Prior to June 30, 1984, FNBS hired BD to perform a certified audit of the financial condition of FNBS. Subsequent to June 30, 1984, BD performed the audit and prepared a report of the financial condition of FNBS for the board of directors of FNBS. According to the parties, the report reflected the financial condition of FNBS as of June 30, 1985.

On August 20, 1987, FNBS filed a complaint against BD, alleging BD’s negligence in conducting the audit and preparing the report of the financial condition of FNBS caused FNBS to sustain huge losses. FNBS listed 15 separate acts of negligence in the complaint. Specifically, FNBS alleged BD: (a) failed and omitted to report improper officer loans; (b) failed and omitted to discover loans in excess of the loan limit; (c) failed and omitted to require reasonable reserves for loan losses; (d) failed and omitted to disclose improper management practices; (e) failed and omitted to review examinations of the bank made by the comptroller of the currency; (f) failed and omitted to properly classify assets; (g) improperly approved deficient reporting systems; (h) reported a profit when in fact, operations resulted in a significant and substantial net loss; (i) failed and omitted to report violations of laws and regulations; (j) failed to discover and report insider transactions; (k) improperly valued noneaming assets; (1) improperly reported accrued interest; (m) improperly capitalized interest; (n) failed to make proper tax computations; and (o) employed improper methods in establishing reserves for loan losses.

FNBS further alleged it relied upon BD’s audit and report in its management of FNBS’ business affairs, and as a result of BD’s actions, FNBS was not informed of the true financial condition of FNBS, sustained huge losses, was obliged to write off loans in excess of $2 million and an additional $1.5 million in loans is subject to criticism by Federal bank regulators.

On November 3, 1987, BD filed a demand for a bill of particulars, pursuant to section 2 — 607 of the Civil Practice Law (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 607). In the bill, BD sought additional facts to support the complaint’s allegations, including inter alia (1) when the financial condition of the bank was reported to the bank directors; (2) the names of bank directors and officers who relied upon BD’s report; (3) the particular improper officer loans BD failed to report; (4) the loans in excess of the loan limit; (5) the amount of the loan reserves not revealed in the report; (6) the improper management practices not reported; (7) the assets improperly classified; (8) the bank’s deficient reporting system; (9) facts supporting the allegation that BD reported a profit for FNBS when, in fact, FNBS suffered a substantial loss; (10) facts regarding insider transactions; (11) facts supporting the allegations of improper valuation of noneaming assets and improper reporting of accrued interest; and (12) details supporting the allegation of improper tax computations made by BD.

On January 4, 1988, FNBS filed its response to BD’s bill and listed numerous facts to support its allegations of negligence against BD. Regarding the failure of BD to report improper officer loans, FNBS stated that two FNBS directors, John W. Hagen (JWH) and Jan W. Haegen (JH) and Maximiano F. Nunes (MFN), were owners of M.V. Executive, Inc. (MVE), an enterprise involved in building a charter fishing boat. FNBS described in detail in the response the loans given to these three individuals for their joint venture in MVE from August 25, 1982, through June 28, 1984. During this time, 24 individual loans were given either to MFN or JWH for the MVE venture, all alleged to be in excess of legal limits established by Federal banking regulations. All of the loans were later approved by the board of directors of FNBS.

FNBS detailed additional facts to support its allegation of BD’s failure to discover loans in excess of FNBS’ loan limit. According to FNBS, a bank customer, David Mobley, was also given loans in excess of legal limits and these loans were based on false financial statements.

FNBS also revealed that loans to two other bank customers, Southshores, Inc., and Paul Stone, were renewed by FNBS officers, without collateral, in support of its allegation that BD failed to disclose improper management practices. In further support of this allegation, FNBS stated:

(1) BD failed to disclose the relationship between FNBS officers and those officers at Windsor State Bank, which relationship resulted in detriment to FNBS.
(2) BD failed to disclose that FNBS officers transferred bad loans to trusts managed by FNBS.
(3) BD failed to disclose transactions with “Landers borrowers,” where FNBS officers signed a subordination agreement in favor of another lending institution, causing FNBS to lose the security for loans given the Landers borrowers.
(4) BD failed to disclose that FNBS officers purchased municipal bonds inappropriate for a trust.
(5) BD failed to disclose that FNBS officers engaged in a prohibited transaction with a trust.
(6) BD failed to disclose that FNBS officers made loans for a stamp collection to two customers. Later, both loans had to be written off.
(7) BD failed to disclose that FNBS officers were loaning money in excess of the legal limits, were allowing borrowers “in excess” to borrow money in minor’s names and later, the interest was capitalized and written off by the loan officers.
(8) BD failed to disclose untimely entries for transactions between FNBS and State Bank of Windsor.
(9) BD failed to disclose that FNBS officers were making loans to customers with preexisting loans in default or to customers without proper collateral.
(10) BD failed to disclose that FNBS officers regularly capitalized interest on loans.
(11) BD failed to disclose that FNBS officers failed to require, evaluate, or substantiate financial statements for loans.

FNBS also stated in its response to the bill that the practice by FNBS officers of capitalizing interest and “renewing” prior obligations was not reported by BD and led to improper classification of assets (notes), improper valuation of noneaming assets and improper reporting of accrued interest in BD’s report. FNBS also stated the aforementioned improper management practices, not reported by BD, were involved with 42 separate loans made by FNBS officers.

On March 14, 1988, BD filed two motions to dismiss, one pursuant to section 2 — 619 and one pursuant to section 2 — 615 of the Civil Practice Law. (Ill. Rev. Stat. 1987, ch. 110, pars. 2 — 619, 2 — 615.) The trial court did not rule on the section 2 — 619 motion.

In its section 2 — 615 motion, BD alleged FNBS failed to allege facts to support its negligence claim against BD. Further, BD stated that FNBS had failed to establish how the improper loaning of funds to directors-officers was related in any way to BD’s actions in preparing the audit report and that FNBS failed to establish how BD could have prevented some of FNBS’ loans from becoming uncollectible.

The trial court found plaintiff’s complaint sufficient under Illinois fact-pleading rules but concluded that FNBS had failed to plead a cause of action against BD because FNBS could not establish that BD proximately caused FNBS’ damages. Apparently, the trial judge believed that the complaint established that FNBS’ own negligence contributed to its losses and BD could not have caused the huge losses sustained by the plaintiff.

FNBS urges the trial court erred in deciding proximate cause is a question of law. FNBS further contends that the trial court erred in relying on the imputation doctrine, which allows the negligence of corporate officers to be imputed to the corporation.

Motions to dismiss under section 2 — 615 of the Civil Practice Law (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 615) admit all well-pleaded facts and attack only the legal sufficiency of a complaint. (Longust v. Peabody Coal Co. (1986), 151 Ill. App. 3d 754, 756, 502 N.E.2d 1096, 1097.) On review of a trial court’s decision to grant or deny a section 2 — 615 motion, all allegations in a complaint are interpreted in a light most favorable to the plaintiff. (Wait v. First Midwest Bank (1986), 142 Ill. App. 3d 703, 705, 491 N.E.2d 795, 798.) Pleadings should be liberally construed with a view of doing substantial justice between the parties , and “[n]o cause of action should be dismissed on the pleadings unless it clearly appears that no set of facts can be proved to sustain it.” Golden Rule Life Insurance Co. v. Mathias (1980), 86 Ill. App. 3d 323, 332, 408 N.E.2d 310, 317.

We first consider the proximate cause issue. Proximate cause relates to the foreseeability of injury from a negligent act or omission to act. (Neering v. Illinois Central R.R. Co. (1943), 383 Ill. 366, 50 N.E.2d 497.) Proximate cause is ordinarily a question of fact to be determined from all the attending circumstances. (Merlo v. Public Service Co. (1942), 381 Ill. 300, 318, 45 N.E.2d 665, 675.) The Merlo court further stated:

“[I]t can only be a question of law when the facts are not only undisputed but are also such that there can be no difference in the judgment of reasonable men as to the inferences to be drawn from them.” (Merlo, 381 Ill. at 318, 45 N.E.2d at 675.)

The supreme court in Ney v. Yellow Cab Co. (1954), 2 Ill. 2d 74, 84, 117 N.E.2d 74, 80, reiterated:

“The debatable quality of issues such as negligence and proximate cause, the fact that fair-minded men might reach different conclusions, emphasize the appropriateness and necessity of leaving such questions to a fact-finding body.”

We conclude the trial court erred in finding FNBS’ damages could not have been caused, as a matter of law, by the actions attributed to BD in the complaint and the response to the bill. The complaint alleged that BD’s report failed to inform the directors of FNBS of the true financial condition of FNBS. Further, because FNBS directors did not know of the true condition of FNBS, they failed to take action to lessen the losses sustained by the bank. As a further consequence of BD’s negligence, FNBS alleged loans in excess of $2 million had to be written off. In its brief and during argument before this court, BD strenuously argued that the losses FNBS suffered were caused by FNBS’ directors, who approved insider loans to other directors, knowing the loans were illegal at the time they were made. According to BD, there is nothing BD could have done to prevent the losses sustained as a result of fraudulent loans made before BD was retained by FNBS to perform the audit. We believe BD’s arguments ignore the essence of FNBS’ complaint and assume facts not alleged or admitted by FNBS.

A careful reading of the complaint and response reveals there are 15 separate allegations of negligence attributed to BD. The failure to disclose insider loans to directors in the report is only one allegation. Regarding this allegation, contrary to BD’s claim, there is no allegation or admission by FNBS in its pleadings that the directors knew the loans were “illegal” when the directors approved them. Similarly, there is no allegation that the directors knew of (1) the other loans made in excess of the lending limit; (2) the improper management practices of renewing loans without collateral; (3) the improper transactions with trust accounts; or (4) the practice of capitalizing interest on loans.

BD urges that the losses claimed by FNBS in this action would have been incurred despite its audit report. We disagree. The audit report covered the period from June 30, 1984, to June 30, 1985. As a result of BD’s report, FNBS could have sustained losses from other loans made in reliance on the report. On these pleadings, there exists the possibility that FNBS, believing its financial condition to be as reported by BD, continued to make loans in a similar manner and, thereafter, suffered more losses. By our statement regarding a possibility, we seek only to emphasize that FNBS should be given an opportunity to prove its case.

BD urges that the complaint establishes there is no proximate cause in this case and directs us to Delmar Vineyard v. Timmons (Tenn. App. 1972), 486 S.W.2d 914, and Flagg v. Seng (1936), 16 Cal. App. 2d 545, 60 P.2d 1004, as further support for its argument.

In Delmar, the court exhaustively reviewed the evidence presented at trial and concluded that any negligence on the part of the accountants was not proved to be the proximate cause of the damages claimed. The plaintiffs in Delmar claimed they relied upon the audit report which contained errors and omissions. The court found no credible evidence in the record to support plaintiff’s assertions and reversed the trial court’s determination in plaintiff’s favor.

Similarly, in Flagg, the court reviewed the evidence presented at trial and concluded the accountant’s actions in preparing an audit report had no causal connection to the company’s losses. The court found that the evidence established the company’s board of directors had full knowledge of the corporate books and gave their full consent to a practice of recording certain transactions in these books.

Both Delmar and Flagg are inapposite to the situation in the present case. Initially, a full trial was conducted in both cases and voluminous evidence was received. That evidence clearly established no causal connection between the auditor’s actions and the claimed losses. Second, the issue of proximate cause in the two cases was decided as a question of fact.

In the instant case, the pleadings do not support a lack of proximate cause as a matter of law. The trial court’s finding to the contrary was erroneous.

The parties also dispute whether the negligence of FNBS’ directors is imputed to FNBS to bar this action. FNBS urges the imputation doctrine is not applicable to this case and relies on Holland v. Arthur Andersen & Co. (1984), 127 Ill. App. 3d 854, 469 N.E.2d 419. In its brief, BD urges this defense operates to bar this action and the facts to support the defense are apparent on the face of the complaint.

The imputation doctrine in accountant malpractice cases allows the wrongdoing of corporate officers to be attributed to the corporation to bar an action for damages if (1) the complaint alleges sufficient facts to establish that the officers and directors of a corporation did in a knowing fashion all that the accountant is charged with; and (2) that such actions by the corporation’s top management amounted to fraud on behalf of the corporation. (Holland, 127 Ill. App. 3d at 865, 469 N.E.2d at 426.) We agree with FNBS that the pleadings do not support the availability of this defense. Assuming that FNBS’ directors were negligent, we further question the future application of this defense to this case where it appears the actions of the directors of FNBS clearly worked to the detriment and not the benefit of FNBS. Nevertheless, to whatever degree this defense was relied upon in this case, it was error at this stage of the proceedings.

During argument before this court, FNBS urged that the dismissal with prejudice was erroneous in this case. According to FNBS, it requested leave to file an amended complaint as an alternative to a dismissal with prejudice under section 2 — 615. A dismissal with prejudice should not be entered unless it clearly appears that no set of facts could be established which would entitle a plaintiff to relief. (Illinois Municipal League v. Illinois State Labor Relations Board (1986), 140 Ill. App. 3d 592, 607-08, 488 N.E.2d 1040, 1051; Edgar County Bank & Trust Co. v. Paris Hospital, Inc. (1974), 57 Ill. 2d 298, 305, 312 N.E.2d 259, 262.) The trial court found FNBS’ complaint was well pleaded, and we conclude it is sufficient to support an inference that one or more of BD’s acts of negligence caused FNBS’ losses. Accordingly, we reverse the order of dismissal and remand this cause for further proceedings.

Reversed and remanded.

LUND and GREEN, JJ., concur.


author: JUSTICE LUND

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. CARLOS E. NEWBERN, Defendant-Appellant.
    Fourth District
    No. 4—88—0752
    Opinion filed June 1, 1989.

      Daniel D. Yuhas and Richard D. Frazier, both of State Appellate Defender’s Office, of Springfield, for appellant.
    Lawrence R. Fichter, State’s Attorney, of Decatur (Kenneth R. Boyle, Robert J. Biderman, and Gwendolyn W. Klingler, all of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
   JUSTICE LUND

delivered the opinion of the court:

On July 25, 1988, defendant Carlos Newbern was tried in absentia and found guilty by a jury sitting in the circuit court of Macon County of the offenses of retail theft, battery, and criminal damage to property, in violation of sections 16A — 3, 12 — 3, and 21 — 1, respectively, of the Criminal Code of 1961 (Ill. Rev. Stat. 1987, ch. 38, pars. 16A — 3, 12 — 3, 21 — 1). On September 6, he was sentenced in absentia to three concurrent 30-day jail sentences. He now appeals. We reverse, finding he was not proved guilty beyond a reasonable doubt.

At trial, the State’s first witness was Raymond Bowers, who was working as a security guard at a local Kroger store on March 30, 1988. At approximately 4:30 p.m. on that date, he observed a black male pocket some cigarettes and attempt to leave the store without paying for them. He stopped the man at the door and, once Bowers identified himself, a fight commenced. During this fight, Bowers’ identification badge case was torn, which is the basis of the criminal damage charge. During the struggle, Bowers ripped the man’s coat off, and the man fled. Found in the coat pocket was an Illinois driver’s license. Bowers identified the man in the photograph on the license as being the man with whom he wrestled.

Also testifying was Michael Smith, the store manager, and Michael Guymon, a retail clerk. Their testimony corroborated that of Bowers, and they both identified the picture on the license as being the man involved. Finally, Officer Marty Lowhom of the Decatur police testified he responded to the store on March 30. At that time, he was given the evidence, including the driver’s license. He testified, over objection, that the name on the license was Carlos Newbern. The State and defendant rested.

It is fundamental that, to sustain a conviction, a person charged with a crime must be proved beyond a reasonable doubt to be the perpetrator of that crime. (See People v. Horodecki (1958), 15 Ill. 2d 130, 135, 154 N.E.2d 67, 69.) The difficulties with such an identification are exacerbated in a trial in absentia where the witnesses cannot point to a defendant in court as the offender. In such cases, the State is obliged to prove the identity by circumstantial evidence.

In four prior cases, this court has dealt with the quantum of proof necessary to show that the person being tried in absentia is the same person as that described by witnesses as having committed the offense. In People v. Collins (1982), 109 Ill. App. 3d 1076, 441 N.E.2d 935, two witnesses observed the arrest of a person they described as having committed the offense. One witness testified to having seen that person in custody shortly after the arrest. That person was also identified as the one who had committed a previous theft and who bore the same name as the accused. The identification evidence was held sufficient. In People v. Stanley (1983), 116 Ill. App. 3d 532, 452 N.E.2d 105, there was again the similarity of names. There was, also, testimony of the victims identifying the perpetrator from a photograph and the testimony of a police officer that the person in the photograph admitted to the offense during an interview. This identification was held sufficient.

More recently, in People v. Broyld (1986), 146 Ill. App. 3d 693, 497 N.E.2d 147, there was again the similarity of names. However, this court noted that this only creates a rebuttable presumption as to the identity of the person and will not support a conviction unless there is corroboration present. (Broyld, 146 Ill. App. 3d at 696, 497 N.E.2d at 149.) The court found this corroboration in the testimony of the arresting officer that he arrested a person named Linda Broyld at the scene of the offense.

Finally, in People v. Johnston (1987), 160 Ill. App. 3d 536, 513 N.E.2d 528, there was again the similarity of names. This court reaffirmed that identical names, without corroboration, will not support a conviction. That corroboration was found in the evidence which established that the arresting officer arrested someone identified by his photo driver’s license as Johnston. At trial, the officer described the offender and identified a photograph of him.

In the case now before us, the evidence establishes beyond a reasonable doubt that the person pictured in the driver’s license committed the charged offenses. However, the evidence fails to establish beyond that same reasonable doubt that the charged defendant is the same person pictured in the driver’s license. The only evidence presented was that the name on the driver’s license was the same as that of defendant, but this similarity of names, without corroboration, is insufficient to sustain a conviction. (Johnston, 160 Ill. App. 3d at 543, 513 N.E.2d at 533; Broyld, 146 Ill. App. 3d at 696, 497 N.E.2d at 149.) In this case, there is none. It would have been a simple matter to have the arresting officer identify the picture in the license as the person that was arrested and charged. This was not done and, therefore, defendant’s identity as the criminal perpetrator has not been established sufficiently to sustain the conviction.

Reversed.

SPITZ and GREEN, JJ., concur.