text:
    (No. 55329.
    MOBIL OIL CORPORATION, Appellee, v. J. THOMAS JOHNSON, Director of Revenue, et al., Appellants.

      Opinion filed October 22, 1982.
    Rehearing denied December 10, 1982.

      SIMON, J., and RYAN, C.J., concurring in part and dissenting in part.
    Tyrone C. Fahner, Attorney General, of Springfield (Patricia Rosen, Assistant Attorney General, of Chicago, of counsel), for appellants.
    Charles G. Chester, Thomas H. Donohoe, and Cathleen M. Keating, of Martin, Craig, Chester & Sonnenschein, of Chicago (Forrest Smith, of Dallas, Texas, of counsel), for appellee.
    Michael J. Koenigsknecht, of Gardner, Carton & Douglas, of Chicago, for amicus curiae American Airlines, Inc.
    George B. Christensen, Edmund J. Kenny, Arthur I. Gould, and Jeffry S. Spears, of Winston & Strawn, of Chicago, for amici curiae Amoco Oil Company et al.

   JUSTICE UNDERWOOD

delivered the opinion of the court:

Plaintiff, Mobil Oil Corporation, brought an action in the circuit court of Sangamon County under “An Act in relation to the payment and disposition of moneys received by officers and employees of the State of Illinois by virtue of their office or employment,” commonly referred to as the “Monies Act” (Ill. Rev. Stat. 1977, ch. 127, par. 170 et seq.) to compel the return of approximately $8 million which it paid under protest pursuant to an assessment by the Department of Revenue under the Use Tax Act (Ill. Rev. Stat. 1979, ch. 120, par. 439.1 et seq.). The tax was assessed upon Mobil’s use of three “refinery fuels,” which are produced incidentally during the process of refining crude oil. The court held that the Department violated provisions of the Illinois Administrative Procedure Act (Ill. Rev. Stat. 1979, ch. 127, par. 1001 et seq.) when it developed its policy and method of imposing the tax, and that, if the use of refinery fuels was taxable at all, the Department did not use the proper method of calculating the tax. The court held that Mobil was entitled to a refund of the tax paid under protest, plus interest. The Department appealed, and Mobil cross-appealed, asserting that the Use Tax Act is unconstitutionally ambiguous as applied to the facts of this case. We allowed the Department’s motion for direct appeal under Rule 302(b) (73 Ill. 2d R. 302(b)). American Airlines, Inc., has, by leave of court, filed an amicus brief limited to disposition of income earned on the protest fund.

The facts of this case are undisputed although the conclusions drawn by the parties differ. For the purpose of refining it into saleable products, Mobil purchases crude oil from various producers, including Illinois producers, and from “resellers” who act as middlemen between producers and refineries. All the crude oil is refined; none is used in its unrefined state, and none is left over after the refinery process is complete. However, not all of the crude oil can be successfully refined into sale-able products, and some of those products have no market value.

Three products of the refinery process are used by Mobil in the refinery, are not resold in any form, and are at issue here as the subject of the use tax. Two of them, catalytic coke and process gas, are waste products which have no market value. The third, heavy oil, is a by-product which can be and is sold to heavy industry as a high sulphur fuel, but it commands a much lower market price than the “premium products” (e.g., gasoline, jet fuel, diesel fuel, and home heating oil). The catalytic coke, process gas and heavy oil, called “refinery fuels” because Mobil burns them for heat, are derived from crude oil, but, because they are chemically different from crude oil (different in molecular structure), they are said not to “exist” in the crude oil. They are, however, produced solely from the material that makes up the crude oil; no other matter is added to crude oil which becomes a part of these refinery fuels. A brief description of the refining process will indicate how these fuels are produced and used.

The refining process begins with the distillation of crude oil which yields several products, some of which are sold without further refining. One of the distillates, gas oil, is further refined in the fluid catalytic cracking (FCC) unit. Gas oil is injected under pressure into the FCC unit at approximately 650° F. It vaporizes upon contact with a sand-like catalyst, heated to about 1250° F, which is also circulated through the FCC unit. The catalyst causes the vaporized gas oil molecules to be “cracked” — that is, chemically altered — into smaller, lighter molecules. The catalyst, although it causes the chemical reaction, does not itself become a part of the newly formed substances, nor is it either chemically altered or consumed by the reactions. It does, however, become neutralized by a fine coating of carbon, released from the gas oil as it is cracked, which adheres to it. This coating is called “catalytic coke.”

Because it is not economically feasible to discard the spent catalyst, Mobil regenerates it by oxidizing the catalytic coke; the regenerated catalyst is recirculated in the FCC unit. The oxidation of the catalytic coke creates heat which maintains the temperature of the catalyst, thus sustaining the operation of the FCC unit. Two waste gases, carbon monoxide and carbon dioxide, are also produced from the oxidation of catalytic coke. They are very hot and must be cooled before release to the atmosphere. (Carbon monoxide, a poison, is burned before the gas is cooled.) The gases are routed through a boiler for this purpose, and their heat is used to generate steam for the refinery’s steam system.

Process gas is produced in the FCC unit and two other refinery units. It is a highly contaminated, flammable mixture of gases. Mobil does not have the capability of storing it and cannot sell it. Before it can be safely vented or “flared” to the atmosphere it must be burned. Mobil uses the heat generated by the burning in the refinery process.

Heavy oil is also produced in the refining of crude oil. Although its market value is low compared to the premium products, it can be sold as an industrial fuel. Mobil, however, does not sell all of its production of heavy oil; some is burned, and the heat is used in the refinery.

The Department assessed Mobil’s use of these refinery fuels according to a formula which, in essence, was based upon the difference between the volume of crude oil purchased and the volume of products resold, measured by the purchase price of crude oil. The cornerstone of Mobil’s argument is that the refinery fuels, catalytic coke, process gas and heavy oil, do not exist as such in the crude oil it purchases. Upon this premise rest its arguments that the Use Tax Act does not apply to the use of refinery fuels, and that if it does apply, the Department incorrectly valued them.

The Use Tax Act imposes a tax upon “the privilege of using in this State tangible personal property *** purchased at retail from a retailer.” (Ill. Rev. Stat. 1979, ch. 120, par. 439.3.) Mobil contests the application of this language arguing that since catalytic coke, process gas and heavy oil do not “exist” in crude oil, they could not have been purchased, and, in any event, the crude oil was not purchased at retail from a retailer.

In American Can Co. v. Department of Revenue (1971), 47 Ill. 2d 531, this court rejected the argument that the use of a material in a form or identity different from that in which it existed at the time of purchase cannot be taxed. Although in that case the material at issue had undergone a physical change in form, we see no reason to differentiate between the chemical change here and the physical change in American Can. While catalytic coke, process gas and heavy oil may not exist in the chemical sense in crude oil, they are produced from it by chemically restructuring the molecules therein. The substance purchased as crude oil contains the substance which in its restructured form constitutes catalytic coke, process gas and heavy oil, and it is entirely clear to us that the refinery fuels were purchased in the statutory sense when the crude oil was bought. In American Can we were concerned with purchased materials which were put together before their use (raw materials to make machinery); we see no reason to reach a different result where the purchased material is altered before use.

Mobil also argues that it did not purchase crude oil “at retail” because its sole purpose in purchasing crude oil is to refine it, not to use it. Under section 2 of the Act “sale at retail” is defined as “any transfer of the ownership of or title to tangible personal property to a purchaser, for the purpose of use, and not for the purpose of resale in any form as tangible personal property to the extent not first subjected to a use for which it was purchased, for a valuable consideration: Provided that the property purchased is deemed to be purchased for the purpose of resale, despite first being used, to the extent to which it is resold as an ingredient of an intentionally produced product or by-product of manufacturing. ***” (Ill. Rev. Stat. 1979, ch. 120, par. 439.2.) This court has held that a single sale is not an indivisible unit but taxability is determined by the uses to which the property is put. (Columbia Quarry Co. v. Department of Revenue (1968), 40 Ill. 2d 47, 51; Granite City Steel Co. v. Department of Revenue (1964), 30 Ill. 2d 552, 559.) In Granite City this court rejected a “dominant purpose” test urged by the taxpayer which would have resulted in excluding an entire purchase from the use tax if a portion of it was incorporated into a finished product for resale, even if the remaining portion was “used” within the meaning of the Act. In Columbia Quarry this court followed the same reasoning in upholding an assessment under the Retailers’ Occupation Tax Act (Ill. Rev. Stat. 1961, ch. 120, par. 440) upon that portion of the purchased material which was used by the buyer and did not become part of a saleable product. In both of these cases the property purchased underwent chemical changes (metallurgical coal to coke in Granite City, limestone to calcium oxide and carbon dioxide in Columbia Quarry), and in both the chemically altered remainder, used but not resold, was held taxable. Despite Mobil’s contrary contention, we believe these two cases are fundamentally indistinguishable from the one before us. In all three cases, the purchaser intends to use the material purchased in both its original and in its chemically altered form. The fact that the factor motivating Mobil in its purchase was not the use of the refinery fuels is not relevant as long as their use is intentional. That the use is intentional is not disputed by Mobil, and testimony established that the refinery was designed to use the refinery fuels and that their use is necessary to its successful operation. It is quite clear to us that Mobil purposefully uses these products, which are invariably created in the refining process. As in Granite City and Columbia Quarry it is this intentional, purposeful use which triggers the application of the Act.

It would seem that if one has made a purchase at retail, the purchase was made from a retailer. Mobil argues, however, that this court’s decision in Dearborn Wholesale Grocers, Inc. v. Whitler (1980), 82 Ill. 2d 471, indicates that the determination of whether a seller is a retailer is based upon the nature of the seller’s business and not the use to which the object of the sale is put. Dearborn, however, does not so hold. Rather, it simply-held that the Department’s prima facie case of retailers’ occupation tax liability, built upon the taxpayer’s lack of documentation that several sales were to buyers for resale, was rebutted by Dearborn’s uncontroverted evidence that it made no retail sales. It has long been the rule in this State that one who sells "tangible personal property for use or consumption and not for re-sale, and does so not occasionally but as a business or occupation” is making retail sales subject to the Retailers’ Occupation Tax Act. (Franklin County Coal Co. v. Ames (1934), 359 Ill. 178, 183.) The application of the Act to the sale depends upon whether the purchased property was used or consumed by the buyer or whether it was resold by the buyer. (See, e.g., American Airlines, Inc. v. Department of Revenue (1974), 58 Ill. 2d 251; Burrows Co. v. Hollingsworth (1953), 415 Ill. 202; Modern Dairy Co. v. Department of Revenue (1952), 413 Ill. 55.) It matters not that the seller holds himself out as a wholesaler (Franklin County Coal Co. v. Ames (1934), 359 Ill. 178) nor that he is engaged in a business not typically associated with retail sales (cf. Bradley Supply Co. v. Ames (1934), 359 Ill. 162, 170 (building contractors)). Although the court did not address this argument in American Can, Granite City and Columbia Quarry, the rule of Franklin County Coal Co. was applied in those cases — if one purchases a product for use or consumption from a seller who is in the business of selling that product, one has purchased the product at retail from a retailer for purposes of the Retailers’ Occupation Tax Act and the Use Tax Act. To the extent that Trans-Air Corp. v. Department of Revenue (1980), 86 Ill. App. 3d 750, Humphrey Cadillac & Olds, Inc. v. Department of Revenue (1979), 68 Ill. App. 3d 27, and Du Page Aviation Corp. v. Department of Revenue (1976), 37 Ill. App. 3d 587, may indicate otherwise they are no longer authoritative.

Nor do we believe that the Department’s failure to assess Illinois producers/sellers under the Retailers’ Occupation Tax Act for sales of crude oil supports Mobil’s argument that Illinois producers are not retailers. Under Granite City and Columbia Quarry Mobil’s suppliers are clearly making retail sales subject to the Retailers’ Occupation Tax Act to the extent that components of the crude oil are used or consumed but not resold. Where the sale of personal property is subject to the tax the State may proceed against either the seller or the buyer (People v. Buffalo Confectionery Co. (1980), 78 Ill. 2d 447, 460; Klein Town Builders, Inc. v. Department of Revenue (1966), 36 Ill. 2d 301, 304), and the State will not be estopped except under extraordinary circumstances (People ex rel. Scott v. Thoroughbred Enterprises, Inc. (1973), 56 Ill. 2d 210; Austin Liquor Mart, Inc. v. Department of Revenue (1972), 51 Ill. 2d 1). Such circumstances do not exist here.

Mobil also argues that the Use Tax Act as applied to the facts of this case is so vague and ambiguous as to render it unconstitutional. In support Mobil again notes that the Department has never assessed the use of refinery fuels under the Use Tax Act or the sales of crude oil by Illinois producers under the Retailers’ Occupation Tax Act. Mobil also cites the testimony and memoranda of various Department personnel to demonstrate the uncertainty and misunderstanding the Department itself exhibited during the course of the audit of Mobil. This testimony, it seems to us, demonstrates more the auditors’ lack of understanding of the technical and complex process of refining crude oil than their lack of understanding of the operation and application of the Use Tax Act. This lack of technical expertise also explains why tax liability had not been asserted by the Department in this area previously. This lack of knowledge, however, cannot be attributed to Mobil, which was certainly aware it was using or consuming a portion of its crude-oil purchases. The statute and the decisions in Granite City and Columbia Quarry clearly indicate such use is taxable. The ambiguity arises, we believe, only if one accepts the disingenuous argument that catalytic coke, process gas and heavy oil are not “purchased at retail.” For the reasons earlier discussed, we believe there is no merit in this argument. Once it is discarded, the “ambiguity” disappears and the use of the refinery fuels is clearly taxable, the “confusion” of Department personnel notwithstanding. (Cf Illinois Power Co. v. Mahin (1978), 72 Ill. 2d 189, 195.) Therefore, we hold the statute is not unconstitutionally vague or ambiguous as applied to the use of refinery fuels. For these same reasons we cannot accept Mobil’s argument that it was deprived of notice, and therefore of due process, by the Department’s late recognition that the use of the refinery fuels was subject to the Use Tax Act.

Mobil argues, too, that it was prejudiced and denied due process because it was not given proper notice of what it characterizes as the Department’s change in policy regarding the taxability of the use of refinery fuels. This contention is made in connection with its argument that the Department failed to comply with the Illinois Administrative Procedure Act (Ill. Rev. Stat. 1979, ch. 127, par. 1001 et seq.). The trial court held that the Department violated this act when it decided to tax the refinery fuels, but that court apparently ignored a rule, adopted by the Department in 1969, prior to the enactment of the Illinois Administrative Procedure Act, which we think clearly governs. The rule was adopted following this court’s decision in Granite City and Columbia Quarry. Use Tax Rule 11, which adopted by reference article 2(3) of the Retailers’ Occupation Tax Act rules, states:

“Divisible Type of Sale. There can also be a divisible type of sale where the tangible personal property is bought partly for “use” and partly for “resale” in the first place. An example of this is the sale of coal and coke to a steel manufacturer who buys coal and coke partly to produce heat for “use” in the manufacturing operation, and partly to provide carbon as an ingredient of the steel as well as various by-products which the purchasing manufacturer will sell. In this case, the coal and coke bought for “use” in the manufacturing operation are taxable, and the sale of the coal and coke which the purchaser bought to provide carbon is a nontaxable sale for resale.”

Mobil does not argue that this rule does not apply or cannot be applied to its purchase of crude oil and use of the refinery fuels. Rather, the argument appears to be that the Department’s failure to assess the tax in the past amounts to a policy rule which cannot be changed without first complying with the publication, notice and hearing requirements of the Illinois Administrative Procedure Act. At trial, Mobil introduced various letters and memoranda written by Department employees and consultants which evince some confusion and disagreement within the Department on the issue of the taxability of refinery fuels. Also introduced was a Department memorandum to its auditors which explained how to assess the tax. It is this memorandum which is asserted to be the “rule” subject to the Illinois Administrative Procedure Act. Mobil also notes that the Department failed to assert the applicability of Use Tax Rule 11 until the “eve of trial.”

As we have previously stated here, we believe the applicability of the tax was evident from the opinions of this court in Granite City and Columbia Quarry. Use Tax Rule 11 is a clear expression of Department policy; it adequately states the rule of Granite City; and it clearly applies to the use of refinery fuels. The Mobil refinery was constructed between June 1970 and December 1972, and Mobil was on notice of the policy long before the audit began. Nor do we believe that the failure to previously assess the tax amounts to a “policy” within the meaning of the Illinois Administrative Procedure Act. The Department’s policy was clearly set out in Rule 11, which incorporated our earlier holdings. Although the Department may have been late in recognizing and implementing its full scope, we do not believe that the Illinois Administrative Procedure Act requires republication of the rule. The Department’s memorandum, although not mentioning Rule 11 specifically, was simply an explanation to its auditors of the mechanics involved in computing the tax. The memorandum, we believe, is the kind of “intra-agency memoranda” which is excepted from the Illinois Administrative Procedure Act’s definition of a “rule.” (Ill. Rev. Stat. 1979, ch. 127, par. 1003.09.) In our judgment the Act was not intended to apply to every agency explanation of existing policy to its employees, where they had either applied it incorrectly or failed to apply it at all. Mobil’s interpretation, which would seem to require publication in each such instance, would, it seems to us, virtually immobilize the Department. We hold, therefore, that Mobil had adequate notice of the taxability of the use of refinery fuels and that the Department did not violate the provisions of the Illinois Administrative Procedure Act in assessing the tax.

Mobil next argues, and the trial court held, that if the use of refinery fuels is taxable they must be valued by their “relative sales value” rather than by the cost of the crude oil. The formula used by the Department allocated an ascertainable percentage of the volume of the purchased crude oil to the production of refinery fuels. The tax was assessed on the cost of the crude oil. The relative-sales-value method assigns to each product a cost figure based upon its relative share of the total price received when all the products are sold. Under this method, since catalytic coke and process gas have no market value, there would be no tax due on them; and since the market value of heavy oil is very low compared to the premium products, it would be assigned a cost far below that of crude oil. Mobil’s argument, supported by the only witness on the issue, is that the relative-sales-value approach “is the only method of cost allocation recognized by the seven major oil companies and the American Petroleum Institute.” The Department argues that the refinery fuels were purchased as crude oil and that the formula used correctly allocates a portion of the crude oil to the production of them and correctly measures the tax by the price of the crude oil. Mobil does not dispute the mechanics of the formula used by the Department.

We have previously held that, for purposes of the use tax, the refinery fuels were purchased as crude oil. The Use Tax Act must be computed upon the “selling price” (Ill. Rev. Stat. 1979, ch. 120, pars. 439.3, 439.2), which in this case is the price paid for the crude oil. Although Mobil’s argument here was not specifically addressed by the court in Granite City, the court there held that the use tax was measured by the purchase price of the metallurgical coal and coke. (30 Ill. 2d 552, 560.) We see no meaningful distinction between that case and this. Although we do not doubt that as a method of cost accounting the relative-sales-value approach has great merit, the “selling price,” as it is used in the statute, refers not to potential resale value but rather to the price paid for the property. The potential resale value of the components of a barrel of crude oil is wholly irrelevant to the imposition of a tax measured by the price paid for the barrel. The method used by the Department to assess the tax was, therefore, proper.

Since we hold that the tax was properly assessed and Mobil is not entitled to a refund, we do not reach the question of Mobil’s right to interest under the Monies Act.

Accordingly, the judgment of the circuit court is reversed, and the cause is remanded for entry of judgment in favor of defendant.

Reversed and remanded, with directions.

JUSTICE SIMON,

concurring in part and dissenting in part:

While I agree with the majority’s conclusion that Mobil’s use of its refinery fuels is subject to the use tax, I disagree with the method adopted to calculate that tax.

As the majority explains, Mobil purchases crude oil from a source not subject to the Illinois retailers’ occupation tax. From that oil, Mobil makes two kinds of products: “Premium products” and “refinery fuels.” The premium products are sold on the open market and thus are not subject to the use tax. The refinery fuels, catalytic coke, process gas and heavy oil, are essentially by-products of the process by which the premium products are made. They have little or no value on the open market. Mobil itself uses them, however, for heating. Thus, they become subject to the use tax.

The issue on which I disagree with the majority is how much tax. The use tax is calculated on the selling price of the item taxed. (Ill. Rev. Stat. 1977, ch. 120, par. 439.3.) There is no selling price here for refinery fuels, however, because Mobil never purchased refinery fuels. It purchased crude oil. The two products contained in it were a package deal. Thus, the difficult issue the court is faced with is how to allocate the price paid for the crude oil between the premium and the lower-grade products.

There is no obvious way to make such an allocation. Any method will involve some element of fiction, because it is impossible to attach separate price tags to two items that were in fact purchased together. Nonetheless, there are fair and realistic ways to go about making the allocation which approximate what the selling prices of the two items would have been had they been sold separately. The majority unfortunately has not chosen such a method.

The majority allocates the selling price solely on the basis of volume. Thus, if we can assume for the purpose of easy calculation that a barrel of crude oil sells for $100 and yields one-half barrel of the low-grade refinery fuels and one-half barrel of the premium products, the tax would be calculated as if Mobil had paid $50 for the low-grade fuels.

That adds up to quite a high tax on the privilege of using something that is practically worthless. An example will illustrate the absurd results such a method of calculation can lead to.

A maker of chinchilla coats might purchase live chinchillas for $500. When they arrive at his workshop, he slaughters them, takes their pelts to make coats, and grinds the rest of their bodies into cat food to feed the cats he keeps around to control mice. If the animal’s body without its pelt constitutes three-fifths of its total volume, the tax will be figured as if the coat maker paid $300 for his cat food. At a tax rate of 4% (Ill. Rev. Stat. 1977, ch. 120, par. 439.3), he will pay $12 in tax for an amount of cat food that he could have purchased at retail for 37 cents.

I believe a better way to allocate the price of crude oil between premium and low-grade products is the relative-sales-value method. Under such a method, the ratio of the market prices of the two products plays a big part in allocating the purchase price of the raw combined commodity. The price paid for each part of the whole is thereby made to bear some resemblance to its actual value. Thus if a barrel of the premium-grade product is worth nine times what a barrel of the low-grade product is worth, and one barrel of crude oil produces one-half barrel of each product and sells for $100, $90 would be allocated to the premium products and $10 to low-grade refinery fuels.

The majority’s formula encourages waste. The fuels in issue here are essentially by-products of the refining process. They command a low price on the open market, presumably because they are not very useful. There must be drawbacks to using these fuels rather than the premium products. Taxing their use at excessive rates may well discourage their use entirely. Yet because the premium products cannot be made without also making the low-grade products, the only thing to do with the by-product may be to throw it away and use premium products instead — a foolish waste of not inexhaustible resources.

Moreover, I cannot believe that such a result is required by the statute. The statute requires that the selling price be used to determine the amount of tax. Both the method approved by the majority and the one I advance are based on the selling price. The statute says nothing about how to allocate that price between two products made from the purchased commodity.

The use tax was enacted to fill in the gaps left by the retailers’ occupation tax (commonly known as the sales tax). The use tax prevents the avoidance of tax by purchasing goods out of State and shipping them into Illinois for use. Because of the use tax, no one will be tempted to buy goods at retail outside Illinois and bring them here. The State tax will be the same in any event: 4%.

The trouble with the majority’s calculation of the use tax is that it will ultimately generate a tax greater than 4% on Mobil’s total purchase. It will more than fill the gap left by the sales tax.

If Mobil had purchased the entire barrel of crude for $100 out of State wholly for its own use in Illinois, it would have been subject to a use tax of $4. Similarly, if it had purchased the barrel in Illinois from a retailer, a $4 sales tax would have to be paid. The tax is the same because the use tax is designed to neither encourage nor discourage commercial transactions not subject to the sales tax.

Now assume for the sake of isolating the relevant issue that crude oil can be separated into the two products at no cost. Thus a $100 barrel of crude can be separated into a half barrel of premium product that will sell for $90 and a half barrel of low-grade refinery fuel that will sell for $10. If both products were sold by the refiner, the tax would be the same — $4 (4% of $90 and 4% of $10). Only when the refiner uses one product and sells the other and the majority’s formula is employed does that figure vary. Under the majority’s formula Mobil must pay $2 in use tax (4% on $50 which is one-half of the original cost). When it comes time to sell the premium product, however, its market value will still be $90. The sales tax on it will therefore be $3.60, bringing the total tax receipts by the State of Illinois to $5.60. Under my formula, the tax would remain $4.

This peculiarity in the majority’s formula can work to the Department of Revenue’s disadvantage too. Using the same example, suppose Mobil had used its premium product and sold its low-grade product. Allocating the $100 purchase price by volume, only a $2 tax could be collected for the use of the premium product. The low-grade product will not, however, command any higher price on the open market than it would in the absence of the tax. It will still be sold for $10. The tax on it will be 40 cents, making the total tax only $2.40.

Such a result is neither logical nor fair; clearly it is not consistent with the purpose of the statute. I therefore dissent from that portion of the majority’s conclusion.

CHIEF JUSTICE RYAN joins in this partial concurrence and partial dissent.


source: Caselaw Access Project

author: CHIEF JUSTICE RYAN JUSTICE SIMON,

license: Public Domain

text:
    (No. 55593.
    FRANKIE CHILDRESS, Appellee, v. THE INDUSTRIAL COMMISSION et al. (St. Mary’s Hospital, Appellant).

      Opinion filed October 22, 1982.

      GOLDENHERSH, J., took no part.
    SIMON, J., concurring in part and dissenting in part.
    James A. Thoenen and Richard J. Zalasky, of Evans and Dixon, Inc., of St. Louis, Missouri, for appellant.
    Jack Randall, of Jack Randall, Inc., and Thomas Q. Keefe, Jr., of Cook, Shevlin & Keefe, Ltd., of Belleville, for appellee.
   CHIEF JUSTICE RYAN

delivered the opinion of the court:

This action is a direct appeal (73 Ill. 2d R. 302(a)) by respondent, St. Mary’s Hospital, of an award of attorney fees pursuant to section 16 of the Workmen’s Compensation Act (Ill. Rev. Stat. 1977, ch. 48, par. 138.16), and of the amount of an award of temporary total disability.

The essential facts are not in dispute. Petitioner, Frankie Childress, a nurse’s aide at St. Mary’s Hospital, injured her back on May 13, 1978, while lifting a patient into a wheelchair. She continued to work for approximately a week and was then hospitalized at St. Mary’s for her back injury. She was off work for approximately five months, during which time respondent voluntarily paid her temporary total disability benefits.

Thereafter, petitioner was released by her doctor to return to work on “light duty.” She worked approximately one week until respondent informed her there were no light-duty jobs available. Respondent then resumed payment of temporary total disability benefits to petitioner.

On February 6, 1979, petitioner was examined by respondent’s physician, Dr. Michael Winer. On the basis of his examination Dr. Winer determined that petitioner was able to return to work without any restrictions. Petitioner did not return to work, however, until July of that year.

After a hearing, the arbitrator found that petitioner’s condition had not yet reached permanent status and awarded her 48% weeks of compensation pursuant to section 19(b) (Ill. Rev. Stat. 1977, ch. 48, par. 138.19(b)). The period of temporary total disability was held to have occurred, intermittently, from May 13, 1978, the date of the injury, through May 8, 1979, the date of the hearing. The arbitrator also awarded petitioner $394.75 for necessary medical expenses. The award was entered on June 22, 1979. Shortly thereafter petitioner Childress returned to work.

On review before the Industrial Commission, the award of temporary total disability was reduced to 38% weeks, corresponding to the date respondent’s physician determined petitioner was able to return to work without restrictions, February 6, 1979. The Commission also affirmed the award of $394.75 in necessary medical expenses and ordered respondent to pay $78.79 in attorney fees, pursuant to section 16 of the Act, as a penalty for unreasonable and vexatious delay in the payment of medical expenses.

On certiorari, the circuit court of St. Clair County increased the award of temporary total disability to 486/t weeks, the amount awarded by the arbitrator, and also increased the amount of attorney fees awarded by the Industrial Commission to $950.

Two issues are raised on appeal before this court: (1) whether the award of 383/7 weeks’ temporary total disability by the Industrial Commission is against the manifest weight of the evidence, and (2) whether the award of attorney fees for unreasonable and vexatious delay in the payment of medical expenses is proper under section 16 of the Act.

With respect to the first issue, in addition to the testimony of petitioner, conflicting medical evidence was presented to the arbitrator and subsequently reviewed by the Commission. The petitioner presented the testimony of Dr. J. H. Monrow, Jr., by evidence deposition. Dr. Monrow is an osteopathic physician who examined petitioner at the request of her attorney. Dr. Monrow diagnosed petitioner’s condition and evaluated it as permanent. In his opinion, petitioner would not be employable in the open labor market because she is unable to perform “manual duty.” On cross-examination, Dr. Monrow testified that petitioner would be able to perform light work with no lifting, i.e., “writing, answering a phone, or something of this nature.” The date of Dr. Monrow’s examination was January 10, 1979.

On behalf of respondent, St. Mary’s Hospital, the evidence deposition of Dr. Michael Winer was read into the record. Dr. Winer is an orthopedic surgeon who examined petitioner on February 6, 1979, at respondent’s request. Dr. Winer’s diagnosis was low back pain, with no objective evidence of nerve-root compression, which he classified as lumbosacral strain. He further testified that in his opinion Frankie Childress was at that time able to work without restriction or limitation.

Resolving conflicts in the evidence, drawing inferenees from testimony, and determining the credibility of witnesses and the weight to be given to their testimony are matters within the province of the Industrial Commission, and this court will not disturb the Commission’s findings unless they are against the manifest weight of the evidence. (Elliott v. Industrial Com. (1982), 91 Ill. 2d 100, 107; Hart Carter Co. v. Industrial Com. (1982), 89 Ill. 2d 487, 494.) The conflict in the instant case consists of differing medical opinions as to whether the employee’s condition permitted her to return to work. The resolution of conflicting medical opinions is clearly within the purview of the Industrial Commission. (Avon Products, Inc. v. Industrial Com. (1980), 82 Ill. 2d 297, 300; Eagle Sheet Metal Co. v. Industrial Com. (1980), 81 Ill. 2d 31, 36.) Here, it was clearly not against the manifest weight of the evidence for the Commission to accept the evaluation of the physician who testified on behalf of the employer. Accordingly, the Commission’s award of temporary total disability for 383/t weeks is affirmed.

With respect to the second issue, the employer argues that an award of attorney fees for unreasonable and vexatious delay in the payment of medical expenses is not proper under section 16 of the Act (Ill. Rev. Stat. 1977, ch. 48, par. 138.16). It is the employer’s position that an award of attorney fees under that section is only proper for an unreasonable and vexatious delay in the payment of compensation, i.e., compensation for lost wages during the period the employee is unable to work. We agree. Section 16 of the Act provides:

“Whenever the Commission shall find that the employer *** has been guilty of unreasonable or vexatious delay, intentional underpayment of compensation benefits, or has engaged in frivolous defenses which do not present a real controversy, within the purview of the provisions of paragraph (k) of Section 19 of this Act, the Commission may assess all or any part of the attorney’s fees and costs against such employer and his insurance carrier.” (Emphasis added.) (Ill. Rev. Stat. 1977, ch. 48, par. 138.16.)

We believe that the phrase “unreasonable or vexatious delay” in section 16 must be read in the context of, and as limited by, the phrase “within the provisions of paragraph (k) of Section 19 of this Act.”

Paragraph (k) of section 19 provides:

“In case where there has been any unreasonable or vexatious delay of payment or intentional underpayment of compensation, or proceedings have been instituted or carried on by the one liable to pay the compensation, which do not present a real controversy, but are merely frivolous or for delay, then the Commission may award compensation additional to that otherwise payable under this Act equal to 50% of the amount payable at the time of such award. Failure to pay compensation in accordance with the provisions of Section 8, paragraph (b) of this Act, shall be considered unreasonable delay.” (Emphasis added.) (Ill. Rev. Stat. 1977, ch. 48, par. 138.19(k).)

The language of paragraph (k) of section 19 mirrors the language of the provisions of section 16 in question in this case. By the direct reference to paragraph (k) of section 19, the award of attorney fees is limited under section 16.

Furthermore, paragraph (k) of section 19 defines “unreasonable delay” as referring to compensation as awarded under section 8(b) of the Act (Ill. Rev. Stat. 1977, ch. 48, par. 138.8(b)). Section 8(b) of the Act pertains solely to the payment of compensation for lost wages. This is clearly different from the payment by the employer for all necessary medical and surgical services as delineated by section 8(a) of the Act (Ill. Rev. Stat. 1977, ch. 48, par. 138.8(a)). Section 8(a) also provides that “[t]he furnishing of any such services *** by the employer is not the payment of compensation.” (Emphasis added.) Ill. Rev. Stat. 1977, ch. 48, par. 138.8(a).

This reading of the applicable provisions of the Act is consistent with this court's decision in Colclasure v. Industrial Com. (1958), 14 Ill. 2d 455, which distinguished between the payment for medical services and the payment of disability benefits. The issue before this court in Colclasure was whether proceedings commenced by an employee to recover a workmen’s compensation award must abate in toto upon petitioner’s death from independent causes prior to the time the Industrial Commission order is rendered. (14 Ill. 2d 455, 456.) In Colclasure this court observed that the Workmen’s Compensation Act is designed to furnish financial protection to employees and their dependents by insuring both weekly payments during periods of disability and proper medical attention. The primary purpose of the payment of weekly benefits is to replace lost earning power, while the required medical and hospital attention is designed to relieve the employee and his family from the costs and burdens of such care. (14 Ill. 2d 455, 458.) This court concluded in Colclasure:

“Considering that our own statute expressly differentiates between medical services and disability benefits, it is our opinion that the term ‘compensation’ as used in section 22 of the Illinois Workmen’s Compensation Act [citation] refers solely to the compensation embodied in the right to temporary and permanent disability benefits conferred by the act, and that it was not intended to bar or abate the claim or recovery of necessary hospital, surgical and medical expenses incurred or paid for by the deceased employee as the result of injuries arising out of and in the course of his employment.” Colclasure v. Industrial Com. (1958), 14 Ill. 2d 455, 460.

It is possible for attorney fees to be assessed against an employer for refusal to pay the injured employee’s expenses under section 8(a) of the Act, but the proper statutory provision under which such fees are awarded is section 19(g) (Ill. Rev. Stat. 1979, ch. 48, par. 138.19(g)). In Ahlers v. Sears, Roebuck Co. (1978), 73 Ill. 2d 259, the employee, as a result of her injury, was unable to be self-sufficient and required continuous nursing care. Attorney fees were assessed against the employer for the unilateral termination of payments. Section 19(g) applies to the employer’s refusal to pay after a final award rather than mere delay in payment as in section 19(k).

In the instant case the charge of unreasonable and vexatious delay concerned the payment of medical expenses under section 8(a), not disability compensation under section 8(b). The sanction of attorney fees under section 16, by its terms, does not apply. Accordingly, we hold that the award of attorney fees for an unreasonable and vexatious delay in the payment of medical expenses is not proper under section 16 of the Workmen’s Compensation Act.

The judgment of the circuit court of St. Clair County is reversed. The award by the Industrial Commission for 38% weeks’ temporary total disability is affirmed and the award of attorney fees under section 16 is reversed. The cause is remanded to the Industrial Commission for entry of an award in accordance with this opinion.

Judgment reversed; order affirmed in part and reversed in part; cause remanded with directions.

JUSTICE GOLDENHERSH took no part in the consideration or decision of this case.

JUSTICE SIMON,

concurring in part and dissenting in part:

I have no quarrel with the majority’s holding that the Industrial Commission’s award was not against the manifest weight of the evidence. My dispute is with its holding that attorney fees may not be awarded for unreasonable or vexatious delay in payment of medical expenses under section 8(a) of the Workmen’s Compensation Act (Ill. Rev. Stat. 1977, ch. 48, par. 138.8(a)). Common sense tells me that the Commission should have the discretion to award attorney fees in such a case, and I see nothing in the relevant statutory sections or the case law which convinces me that I am wrong.

I agree that section 8(a) of the Act differentiates between “[t]he furnishing of [medical] services” by the employer and the “payment of compensation.” (Ill. Rev. Stat. 1977, ch. 48, par. 138.8(a).) However, section 16 of the Act, in providing for the assessment of attorney fees, is phrased in the disjunctive rather than the conjunctive, the alternative grounds being “unreasonable or vexatious delay” (as found in this case), “intentional underpayment of compensation benefits,” and “engagpng] in frivolous defenses which do not present a real controversy.” (Ill. Rev. Stat. 1977, ch. 48, par. 138.16.) I read the second of these alternatives as providing an example of the first alternative, not as limiting that alternative. If “unreasonable or vexatious delay” applied only to compensation benefits, as the majority concludes, the phrase “intentional underpayment of compensation benefits” would not be needed even to illustrate unreasonable or vexatious delay, as intentional underpayment without good reason is obviously an example of such delay. Such an interpretation would be contrary to the maxim of statutory construction that each phrase or provision be given independent meaning where possible. People v. Warren (1977), 69 Ill. 2d 620, 627; Hirschfield v. Barrett (1968), 40 Ill. 2d 224, 230, cert. denied (1969), 393 U.S. 1062, 21 L. Ed. 2d 706, 89 S. Ct. 716.

Nor can I accept the majority’s contention that the words “within the purview of the provisions of paragraph (k) of Section 19 of this Act” in section 16 must be read as limiting the scope of the words “unreasonable or vexatious delay.” (Ill. Rev. Stat. 1977, ch. 48, par. 138.16.) Three commas, two phrases and the word “or” intervene between the former phrase and the latter. Statutory construction in Illinois follows the last antecedent rule, which requires that in the absence of explicit indications to the contrary, such as statements of legislative purpose, a qualifying phrase is to be read as modifying only the immediately preceding word or phrase rather than as referring back to more remote antecedents. (See, e.g., City of Mount Carmel v. Partee (1979), 74 Ill. 2d 371, 375.) There is no reason to interpret the language referring to section 19(k) of the Act as modifying anything other than the immediately preceding phrase, “or has engaged in frivolous defenses which do not present a real controversy,” particularly as section 19(k) contains a provision very similar to that phrase.

Even if the words “unreasonable or vexatious delay” were subject to the provisions of section 19(k), there is nothing in that section that limits the definition of such delay to delay in payment of compensation benefits. The majority points to the phrase “[failure to pay compensation in accordance with the provisions of Section 8, paragraph (b) of this Act, shall be considered unreasonable delay” (Ill. Rev. Stat. 1977, ch. 48, par. 138.19(k)) as limiting the definition accordingly. Yet section 8(b) contains very detailed provisions as to the timing as well as the amount of payment of disability compensation. Section 8(a), the section governing payment of medical expenses, does not contain comparable timing provisions. The quoted language in section 19(k) is not exclusive. The legislature may well have thought it necessary to reinforce the specific terms of section 8(b) by prescribing penalties and attorney fee awards for conduct falling short of strict compliance with those terms. It does not follow from this that it meant to preclude such awards in other cases of undue delay. I read the phrase cited by the majority in section 19(k) as setting forth merely one example of conduct constituting unreasonable delay, not the sole instance of such delay.

For the reasons stated above, I believe that the phrase “unreasonable or vexatious delay” in section 16 includes delay in payment of medical expenses. The existence of another provision in the Act (Ill. Rev. Stat. 1977, ch. 48, par. 138.19(g)) permitting recovery of attorney fees for such delay after a final award has been entered, I find of no significance; it does not prevent an award of attorney fees for delay of payment of medical expenses at an earlier stage of the litigation any more than it prevents a similar award for an earlier delay of payment of compensation benefits. Also perplexing is the majority’s reliance on Colclasure v. Industrial Com. (1958), 14 Ill. 2d 455. All that case held was that medical expenses were not “compensation” for purposes of a provision which extinguished the right to “compensation” upon the beneficiary’s death. This distinction has no relevance to our inquiry if the phrase “unreasonable or vexatious delay” is not limited to the payment of “compensation.”

Although the Workmen’s Compensation Act distinguishes between medical expenses and disability benefits, it provides expressly for the payment of both. The purpose of the latter is to provide an injured worker with an income stream commensurate with that which the worker would have had if the injury had not occurred, and thereby to prevent such personal hardships as eviction for nonpayment of rent or the cutting off of utility service which may result from not having such income. (Board of Education v. Industrial Com. (1982), 93 Ill. 2d 1, 12.) The purpose of requiring the payment of medical benefits is similarly to insure that the claimant is made medically whole without having to divert income that she would use for other necessary expenses to that end, and so that her physicians will continue to treat her. Medical bills must be paid when due, as must rent and utility bills, and harsh consequences may attend the late payment of either. An unpaid physician may be unwilling to continue his service or may reduce its frequency. Just as “[i]t hardly comports with [the intent of the Act] to permit employers to litigate ad infinitum,” safe in the knowledge that the claimant is being forced to pay attorney fees while attempting to compel payment of disability benefits (Board of Education v. Industrial Com. (1982), 93 Ill. 2d 1, 14), permitting employers vexatiously to delay payment of medical expenses, forcing claimants to sue for the funds on their own time and using their own money, is similarly repugnant to the Act’s purposes. As I see nothing in section 16 which commands different treatment, I presume that similar treatment was intended and would affirm the circuit court’s decision confirming the award of attorney fees.


text:
    (Nos. 55318, 55335 cons.
    THE PEOPLE OF THE STATE OF ILLINOIS, Appellee, v. L. C. DAVIS, Appellant.— THE PEOPLE OF THE STATE OF ILLINOIS, Appellee, v. ELVIN U. ALVARDO, Appellant.

      Opinion filed October 22, 1982.
    Rehearing denied November 24, 1982.

      SIMON, J., dissenting.

      James J. Doherty, Public Defender, of Chicago (Gerald T. Winiecki and John Lanahan, Assistant Public Defenders, of counsel), for appellants.
    Tyrone C. Fahner, Attorney General, of Springfield, and Richard M. Daley, State’s Attorney, of Chicago (Melbourne A. Noel, Jr., Assistant Attorney General, and Michael E. Shabat, Lester M. Joseph, and John A. Ward, Assistant State’s Attorneys, of counsel), for the People.
   CHIEF JUSTICE RYAN

delivered the opinion of the court:

In each of these consolidated cases (People v. Davis, No. 55318, and People v. Alvardo, No. 55335) the defendant was convicted in the circuit court of Cook County and his conviction was affirmed by the appellate court. This court allowed the defendant’s petition for leave to appeal in People v. Alvardo. In People v. Davis, defendant’s petition for leave to appeal was originally denied, but that order was later vacated and the case was consolidated with People v. Alvardo in this court.

These consolidated cases present a single issue for review: Do sections 5—4—1(c) and 5—8—1(b) of the Unified Code of Corrections (Ill. Rev. Stat. 1979, ch. 38, pars. 1005—4—1(c), 1005—81(b)), requiring the trial court to state its reasons for imposing a particular sentence, impose a mandatory, nonwaivable requirement necessitating remandment upon failure to comply? Section 5—4—1(c) provides:

“In imposing a sentence for a felony, the trial judge shall specify on the record the particular evidence, information, factors in mitigation and aggravation or other reasons that led to his sentencing determination.” (Ill. Rev. Stat. 1979, ch. 38, par. 1005—4—1(c).)

And section 5—8—1(b) provides:

“The sentencing judge in each felony conviction shall set forth his reasons for imposing the particular sentence he enters in the case, as provided in Section 5—4—1 of this Code.” Ill. Rev. Stat. 1979, ch. 38, par. 1005—8—1(b).

Defendant Elvin U. Alvardo was charged by indictment with murder, convicted of voluntary manslaughter after a bench trial, and sentenced to seven years’ imprisonment. Defendant L. C. Davis was charged by indictment with rape and robbery, convicted of both offenses after a jury trial, and sentenced to 28 years on the rape conviction and seven years on the robbery conviction. Neither defendant requested or moved for a statement of the court’s reasons for the sentence imposed; neither defendant objected to the omission at the sentencing hearing; nor did either defendant raise the objection in a post-trial motion.

At the sentencing hearing of Elvin Alvardo, the court read the presentence report, heard arguments in aggravation and mitigation, and heard a statement by the defendant through his interpreter. At the conclusion the court, without a statement of reasons, sentenced the defendant to a term of seven years. At the sentencing hearing of L. C. Davis, the court, after denying defendant’s motion for a new trial, hearing arguments in aggravation and mitigation, and offering the defendant the opportunity to make a statement, pronounced the sentence, without a statement of reasons.

On appeal, the appellate court upheld the conviction of Elvin Alvardo in a Rule 23 order (73 Ill. 2d R. 23). (96 Ill. App. 3d 1198.) With regard to the sentencing issue, the court found that defendant’s failure to request a statement of reasons from the trial court and defendant’s failure to object to the imposition of a sentence not in conformity with section 5—4—1(c) waived the matter for consideration on review.

The conviction of L. C. Davis was also affirmed on appeal. (97 Ill. App. 3d 235.) With regard to the sentencing issue, the appellate court observed that the failure of the trial court to state explicit reasons for imposing a sentence normally requires that the sentence be vacated and that a new sentencing hearing be held. The appellate court determined, however, that the trial court’s failure to announce its reasons for imposing a sentence cannot be raised on appeal unless proper objections were made in the trial court. The court held that the failure of the defendant to request an explanation from the trial court and the failure to raise the issue in a post-trial motion waived any objections on that point. 97 Ill. App. 3d 235, 239.

In interpreting the statute, the appellate courts have split in deciding whether the right to a statement of reasons is waived on appeal if the defendant fails to demand compliance with the statute in the trial court. Appellate court decisions finding that the duty to specify reasons at sentencing is an independent duty imposed upon the trial court by statute which cannot be waived by either party are: People v. Rickman (1979), 73 Ill. App. 3d 755; People v. Slack (1980), 81 Ill. App. 3d 557; People v. Wilson (1981), 93 Ill. App. 3d 161. The remedy for failure to comply is remandment of the case for a proper sentencing hearing.

Appellate court decisions finding that defendant’s failure to present the question to the trial court, thus providing the court with the opportunity to correct the omission, precludes the defendant from raising the issue on appeal are: People v. Taylor (1980), 82 Ill. App. 3d 1075, and People v. Baseer (1980), 90 Ill. App. 3d 866. The courts agree, however, “that the statute entitles defendant to a statement of reasons and that it would be error for the court to refuse to make a statement if requested.” People v. Taylor (1980), 82 Ill. App. 3d 1075, 1078; People v. Baseer (1980), 90 Ill. App. 3d 866, 874.

Urging that the statutory requirement is a mandatory one, defendants rely on this court’s decision in People v. Youngbey (1980), 82 Ill. 2d 556. In that case, this court held the presentence investigation and report to be a mandatory legislative requirement which cannot be waived, absent an agreement between the parties as to the sentence to be imposed. (People v. Youngbey (1980), 82 Ill. 2d 556, 561. ) That section of the statute provides:

“A defendant shall not be sentenced for a felony before a written presentence report of investigation is presented to and considered by the court.” (Emphasis added.) (Ill. Rev. Stat. 1979, ch. 38, par. 1005—3—1.)

That amendment became effective February 1, 1978, and was originally a companion provision to the statutory requirement before us in the instant case. Both provisions are part of a broader statutory scheme which introduced determinate felony sentencing to Illinois. Pub. Act 80—1099, sec. 3, eff. Feb. 1, 1978.

In Youngbey we found the presentence report to be mandatory because it was not solely for the benefit of the defendant but for the enlightenment of the court as well. Because it was intended to serve as a “useful tool for the sentencing judge,” it was not the defendant’s “personal right” which could be waived. (People v. Youngbey (1980), 82 Ill. 2d 556, 565.) Also, it was noted in Youngbey that the statutory language considered in that case was phrased in the negative, thus prohibiting the imposition of sentence in the absence of compliance with the statute. In that case the statute involved used not merely the word “shall,” but coupled it with the negative limitation by providing that the defendant shall not be sentenced unless the statute is complied with. People v. Youngbey (1980), 82 Ill. 2d 556, 562.

In Youngbey we also held that the mandatory presentence report requirement did not constitute a legislative infringement on the judicial function because “[t]he aspect of the sentencing function involved in this section relates solely to a presentencing procedure.” (Emphasis added.) (People v. Youngbey (1980), 82 Ill. 2d 556, 560.) In the cases now before us, the statute does not relate to a presentencing procedure as in Youngbey. The statute now under consideration attempts to dictate the actual content of the judge’s pronouncement of sentence.

Article VI, section 1, of the Illinois Constitution of 1970 provides: “The judicial power is vested in a Supreme Court, an Appellate Court and Circuit Courts.” Judicial power is not defined in the Constitution, but all such power is exclusively and exhaustively granted to the courts. (People v. Cox (1980), 82 Ill. 2d 268, 274; People v. Jackson (1977), 69 Ill. 2d 252, 256.) It is, of course, indisputable that the power to impose sentence is exclusively a function of the judiciary. (People v. Phillips (1977), 66 Ill. 2d 412, 415; People v. Montana (1942), 380 Ill. 596, 608.) To construe the section of the statute under consideration as mandatory would permit a legislative infringement upon the exercise of the judicial function of imposing sentence.

Article II, section 1, of the Illinois Constitution of 1970 provides: “The legislative, executive and judicial branches are separate. No branch shall exercise powers properly belonging to another.” The General Assembly has the power to enact laws governing judicial practice only where they do not unduly infringe upon the inherent powers of the judiciary. (Strukoff v. Strukoff (1979), 76 Ill. 2d 53, 59; People v. Callopy (1934), 358 Ill. 11.) Furthermore, it is the undisputed duty of the court to protect its judicial powers from encroachment by legislative enactments, and thus preserve an independent judicial department. Agran v. Checker Taxi Co. (1952), 412 Ill. 145, 149.

A statute should be interpreted so as to avoid a construction which would raise doubts as to its validity. (Morton Grove Park District v. American National Bank & Trust Co. (1980), 78 Ill. 2d 353, 363.) It is our duty to construe acts of the legislature so as to affirm their constitutionality and validity, if it can be reasonably done, and further if their construction is doubtful, the doubt will be decided in favor of the validity of the law challenged. Continental Illinois National Bank & Trust Co. v. Illinois State Toll Highway Com. (1969), 402 Ill. 2d 385, 389; Illi nois Crime Investigating Com. v. Buccieri (1967), 36 Ill. 2d 556, 561.

In the instant case, in contrast to Youngbey, it is clear that the pronouncement of sentence is at the heart of the judicial function. A construction which would hold sections 5—4—1(c) and 5—8—1(b) to constitute a mandatory requirement would clearly render the provisions an unconstitutional invasion of the inherent power of the judiciary. However, a construction which rendered the sections to be solely directory would not.

In Youngbey, in construing the import of the term “shall,” we observed:

“Generally, the use of the word ‘shall’ is regarded as indicative of a mandatory intent. [Citations.] We recognize, however, that this is not an inflexible rule; the statute may be interpreted as permissive, depending upon the context of the provision and the intent of the drafters.” (People v. Youngbey (1980), 82 Ill. 2d 556, 562.)

In the instant case, to hold that the term “shall” denominates a mandatory requirement imposed upon the judiciary at sentencing would be to find the statute to be constitutionally invalid. As we presume that the legislature intended'to enact a valid statute, we read “shall” in this context as permissive rather than mandatory. Sutherland, in his treatise on statutory construction, supports such a result. In his words:

“Constitutional principles requiring separation of powers of government weigh in favor of directory interpretations for statutes which give directions to the courts. A statute directing judicial action, although it may be expressed in preemptory terms, will be construed as permissive or directory only, where constitutional principles of separation of powers require a free and unrestrained exercise of judicial discretion.” 2A A. Sutherland, Statutory Construction sec. 57.16, at 439 (4th ed. 1973).

Here, the defendants failed to request a statement of reasons for the sentences given. The statute not being mandatory, there was no independent duty upon the court to give a statement of reasons. Instead, the right is purely personal to the defendants and thus may be waived. Accordingly, we hold that where a defendant fails to request a statement of reasons for a particular sentence, the issue is waived.

The judgments of the appellate court in these consolidated cases are affirmed.

Judgments affirmed.

JUSTICE SIMON,

dissenting:

“The question ‘Why?’ states a primitive and insistent human need. The small child, punished or deprived, demands an explanation. The existence of a rationale may not make the hurt pleasant, or even just. But the absence, or refusal, of reasons is a hallmark of injustice. So it requires no learning in law or political philosophy to apprehend that the swift ukase, without explanation, is the tyrant’s way. The despot is not bound by rules. He need not justify or account for what he does.” Marvin Frankel (former United States district court judge), Criminal Sentences 39 (1972).

I do not agree that sections 5—4—1(c) and 5—8—1(b) of the Unified Code of Corrections (Ill. Rev. Stat. 1979, ch. 38, pars. 1005—4—1(c), 1005—8—1(b)) would be unconstitutional if interpreted as mandatory rather than directory. I believe the majority’s sua sponte application of the separation of powers doctrine goes far beyond the point the purposes of the doctrine dictate.

Article II, section 1, of the Illinois Constitution of 1970 states: “The legislative, executive and judicial branches are separate. No branch shall exercise powers properly belonging to another.” It neatly and compactly expresses a doctrine that has become one of the fundamental principles of good governance since the time of Montesquieu: separation of powers. Similar provisions were in our previous Illinois constitutions. See Ill. Const. 1870, art. III; City of Waukegan v. Pollution Control Board (1974), 57 Ill. 2d 170, 173-74; Field v. People ex rel. McClernand (1839), 3 Ill. (2 Scam.) 79; 6 Record of Proceedings, Sixth Illinois Constitutional Convention 566-67 (indicating the different language in the 1970 Constitution was not meant to change the law of separation of powers).

The doctrine was never meant to create rigidly separated compartments or a divorce among the three departments of government. (See Strukoff v. Strukoff (1979), 76 Ill. 2d 53, 58; In re Estate of Barker (1976), 63 Ill. 2d 113, 119; City of Waukegan v. Pollution Control Board (1974), 57 Ill. 2d 170, 174; Hill v. Relyea (1966), 34 Ill. 2d 552, 557.) As early as 1839, this court stated in Field v. People ex rel. McClernand (1839), 3 Ill. (2 Scam.) 79, 83-84:

“[The constitutional provision calling for separation of powers] does not mean that the legislative, executive, and judicial power should be kept so entirely separate and distinct as to have no connection or dependence, the one upon the other; but its true meaning, both in theory and practice, is, that the whole power of'two or more of these departments shall not be lodged in the same hands, whether of one or many. That this is the sense in which this maxim was understood by the authors of our government, and those of general and State governments, is evidenced by the Constitutions of all. In every one, there is a theoretical or practical recognition of this maxim, and at the same time a blending and admixture of different powers. This admixture in practice, so far as to give each department a constitutional control over the other, is considered, by the wisest statesmen, as essential in a free government, as a separation.”

More recently, in City of Waukegan v. Pollution Control Board (1974), 57 Ill. 2d 170, 174-75, the court, after quoting the above from McClernand, stated:

“It has been generally recognized that separation of powers does not forbid every exercise of functions by one branch of government which conventionally is exercised by another branch. Professor Frank Cooper (1 F. Cooper, State Administrative Law 16 (1965)) observes: ‘[T]he real thrust of the separation of powers philosophy is that each department of government must be kept free from the control or coercive influence of the other departments.’ ”

Accord, Strukoff v. Strukoff (1979), 76 Ill. 2d 53, 58-59; People v. Farr (1976), 63 Ill. 2d 209, 213; see also Hill v. Relyea (1966), 34 Ill. 2d 552, 557.

James Madison, the father of the United States Constitution, agreed. Federalist Paper No. 47, of which Madison is generally credited with being the author, states that the accumulation of powers in the same hands may be called the very definition of tyranny and that such a situation is exactly what the doctrine of separation of powers was intended to prevent. It emphasizes, however, that the doctrine was not meant to so rigidly separate the governmental branches as to allow one branch no control over or no partial agency in the act of the others. It states that in fact some blending of power is inevitable.

The specific issue before us is whether sections 5—4—1(c) and 5—8—1(b) of the Unified Code of Corrections (Ill. Rev. Stat. 1979, ch. 38, pars. 1005—4—1(c), 1005—8—1(b)) are infringements on judicial prerogative. Both sections require the trial judge to specify on the record the factors which led him to the particular sentence pronounced.

The majority notes in passing that previous cases have held that the legislature has the power to enact laws governing judicial practice that do not unduly infringe upon the inherent powers of the judiciary. (See People v. Youngbey (1980), 82 Ill. 2d 556, 560; People v. Cox (1980), 82 Ill. 2d 268, 274; Strukoff v. Strukoff (1979), 76 Ill. 2d 53, 59; Agran v. Checker Taxi Co. (1952), 412 Ill. 145, 149; People v. Callopy (1934), 358 Ill. 11, 15.) In Youngbey this court said:

“The General Assembly has the power to enact law governing judicial practices when the laws do not unduly infringe upon the inherent powers of the judiciary ***.” (Emphasis added.) (People v. Youngbey (1980), 82 Ill. 2d 556, 560.)

Little more than lip service is given to this precedent, however. In fact, reading the majority opinion, one gets the feeling that the conclusion that a mandatory reading of the statutes would be unconstitutional has been reached before this standard is mentioned. No enlightenment as to why this infringement on judicial power is undue is offered. Instead, the majority asserts that, unlike in previous cases, the statutes at issue here involve a procedure to be followed during the actual sentencing. According to the majority, they affect the content of the sentence, and therefore strike at the heart of a clear judicial function. Thus, they are unconstitutional if interpreted to be a mandate to the court.

The statutory sections in issue do not in any way affect the ability of a trial judge to pronounce the sentence he feels is most appropriate. They dictate nothing as to the substance of the sentence. The trial judge has the freedom to sentence a defendant to anything he deems appropriate; all the statutes require is that he state what factors influenced him in arriving at his decision. They “dictate the actual content” only in the sense that they require that reasons for the sentence must be made a part of the record. Thus, they change the substance of the sentence only if we believe that many of the sentences imposed by the judiciary are completely without justification.

This court has tolerated statutes which are at least as intrusive if not more intrusive on judicial power than the statutes involved in this case. In In re Griffin (1982), 92 Ill. 2d 48, we recognized only recently that section 5—1(5) of the Juvenile Court Act (Ill. Rev. Stat. 1981, ch. 37, par. 705—1(5)) is an important safeguard in the process of committing a juvenile to the custody of the Department of Corrections. It provides that “[w]hen commitment to the Department of Corrections is ordered, the court shall state the basis for selecting the particular disposition, and the court shall prepare such a statement for inclusion in the record.” In deciding whether to commit juveniles to the Department of Corrections trial courts exercise the same broad discretion as they exercise in the criminal-sentencing process. We saw no reason to raise a constitutional objection to the statute in Griffin, and I do not see how it was any less intrusive on judicial power than the statutes involved in this case.

Moreover, it seems to me that the statute in Youngbey, which this court upheld despite arguments that it violated the separation of powers provision, was even more intrusive on judicial power than the statute involved in this case. That statute requires that a presentence report be given to and considered by the judge before he sentences a defendant. (Ill. Rev. Stat. 1979, ch. 38, par. 1005—3—1.) Unlike the statutory sections being considered here, it directs a judge to actually consider factors that he might otherwise wish to ignore. He is required to make the content of the presentence report a part of his thought process.

Even more obtrusive are the many statutes in our criminal code that set the maximum and minimum punishments for particular kinds of crime. These, surely, strike at the very heart of the sentencing function that the majority claims is “exclusively” judicial. Yet for centuries legislatures have exercised this power, and courts have accepted the authority of legislatures to fix the punishment for crimes without suggesting that their doing so is a violation of the doctrine of separation of powers.

The legislature of this State obviously has an interest in ensuring that our entire system of criminal justice is workable and fair to all concerned with it. Legislators declare what acts will be illegal and provide the permissible range of punishments. They put the ball in motion and obviously are interested in what comes after. By requiring judges to give reasons for the sentences they impose, legislators may become better informed and able to set punishment ranges. The cause of uniformity in punishment is promoted and appellate review of sentencing errors is facilitated, all without imposing any hardship on or taking any discretion away from the trial judge. The ability of the courts to decide individual cases and sentence individual defendants is completely unimpaired.

It should be noted that this is not a case in which a legislative enactment conflicts with a judicial rule of procedure. There is no rule that prohibits criminal trial judges from giving reasons for the sentences they impose (in fact, the constitutionality of such a rule could be seriously questioned). If such a conflict had existed, the separation of powers issue would be very different. The court would be faced with the question of which law to follow, the rule or the statute, and perhaps then an analysis of whether the subject matter was essentially legislative or judicial would be relevant.

An unfortunate aspect of the majority’s decision is that it emasculates a fair and wise pronouncement of our legislature. The sections of the Unified Code of Corrections in issue here, by requiring that reasons be set forth in sentencing, attempt to prevent the injustice Judge Frankel so eloquently described. Otherwise the sentencing procedure, more than any other aspect of a criminal trial, may appear to be arbitrary and capricious. Numbers may seem to have been taken out of a hat. By interpreting these statutes as directory rather than mandatory, this court has created a situation in which a defendant could request that a trial judge state the factors influencing his sentencing decision and be summarily denied. In such a case the statutes would be merely suggestions to the judiciary; nothing would give the defendant a right to an explanation. The result will be the creation in the eyes of the public of an imperial judiciary — a judiciary that is too busy fighting battles with the legislature over an imaginary encroachment on its independence to understand its relationship with the legislature and the people in proper perspective.


author: JUSTICE GOLDENHERSH

text:
    (No. 55825.
    THE PEOPLE OF THE STATE OF ILLINOIS, Appellee, v. MAURICE PITTMAN, Appellant.

      Opinion filed October 22, 1982.

      Randy E. Blue, Deputy Defender, and Daniel M. Kirwan, Assistant Defender, of the Office of the State Appellate Defender, of Mt. Vernon (Gary Duncan, of counsel), for appellant.
    Tyrone C. Fahner, Attorney General, of Springfield (Ellen M. Flaum and Terence M. Madsen, Assistant Attorneys General, of Chicago, of counsel), for the People.
   JUSTICE GOLDENHERSH

delivered the opinion of the court:

In a jury trial in the circuit court of Madison County, defendant, Maurice Pittman, was convicted of the offense of unlawful delivery of a controlled substance (Ill. Rev. Stat. 1979, ch. 56½, par. 1401(b)) and sentenced to six years’ imprisonment consecutive to a five-year sentence imposed in another case. Defendant appealed, the appellate court affirmed (100 Ill. App. 3d 838), and we allowed defendant’s petition for leave to appeal. 73 Ill. 2d R 315.

The facts are adequately stated in the appellate court opinion and will be reviewed here only to the extent necessary to discuss the issues. On June 25, 1979, Robert Gubin, an informant, met with two law enforcement agents assigned to the Metropolitan Enforcement Group of Southwestern Illinois and advised them that he had arranged to purchase heroin from defendant at 828 Alby Street in Alton. The agents drove Gubin to the vicinity of the Alby Street address in their van, strip-searched him, and gave him $60 with which to make the purchase. They parked the van less than a block from 828 Alby Street. Gubin left the van and walked to the apartment building located at that address. He remained in the building for approximately nine minutes and returned to the agents, giving them an aluminum foil packet which contained a powdered substance later identified as heroin. Gubin testified that he had purchased the heroin from defendant with the money given to him by the agents. On cross-examination Gubin admitted that he had been convicted of numerous drug-related offenses. He also testified that prior to June 25, 1979, he had contacted law enforcement agents in Madison County and discussed with them the possibility of working with them in exchange for their help concerning some drug-related charges pending against him in Madison County. Gubin and the law enforcement agents testified that no specific agreements were made as to these charges.

The defense called several witnesses. Robert Belcher testified that while he and Gubin were inmates at the Madison County jail Gubin had told him that in order to obtain leniency on the charges pending against him he intended to “set up” a victim. Gubin denied ever having made such a statement. Reggie Taylor testified that on June 25, 1979, he was at 828 Alby Street from 5 or 6 p.m. until approximately 8:30 p.m. and that he saw neither Gubin nor defendant in the apartment. Taylor stated that the apartment belonged to Henry Smith, and that the only people in the apartment that evening were Henry Smith, Smith’s nephews, and Ben Jones, defendant’s brother. Taylor testified he remembered the date clearly because Smith’s wife had just died. Taylor testified that he had seen defendant on the date in question at about noon at defendant’s home located at 1204 Cave Springs in Alton. During cross-examination Taylor denied that he was a close friend of defendant but, over objection, admitted that he had testified on defendant’s behalf in two proceedings. Henry Smith testified that his sister, Shirley Pittman, was married to defendant and that in June of 1979 defendant and Shirley had been spending quite a bit of time with him and his family at his apartment at 828 Alby because his wife had been murdered on May 18, 1979, and he needed help in taking care of his son. Not specifying a time, Smith stated that on June 25, 1979, Gubin had come to his apartment looking for Shirley Pittman, who then left his apartment with Gubin. Benjamin Jones, defendant’s brother, testified that on June 25, 1979, at approximately 11:30 a.m., he met defendant at defendant’s house on Cave Springs Road. Jones stated that they drove to Edwardsville to meet with an assistant public defender, whom they were unable to contact. Jones stated they subsequently drove to East Alton, where they met with a different attorney. Jones stated they left East Alton at about 4:30 p.m. and drove to their mother’s home in Alton, arriving there a short time after 5 p.m. Jones stated that he dropped defendant off at their mother’s home and then drove to Smith’s apartment, where he picked up defendant’s wife, who accompanied him back to his mother’s home, where he, defendant and defendant’s wife had dinner. The attorney with whom Jones stated he and defendant had visited until 4:30 p.m. on June 25, 1979, could not recall whether he met with defendant on that date.

Relying primarily on People v. Bazemore (1962), 25 Ill. 2d 74, defendant contends that the uncorroborated testimony of the informant, who had been convicted of numerous narcotics offenses, was insufficient to prove him guilty beyond a reasonable doubt. The People argue that the decision in Bazemore has little precedential value here because the record does not show that Gubin was a narcotics addict, although admittedly he had been convicted of crimes involving the possession of marijuana and other unspecified controlled substances. The People point out that the jury was aware of these convictions when it considered Gubin’s testimony.

Bazemore, and the cases cited therein, require that when the People’s case rests solely upon the credibility of an admitted narcotics addict, that testimony must be carefully and closely scrutinized. (People v. Bazemore (1962), 25 Ill. 2d 74, 76-77.) Even though there is no evidence that Gubin was a narcotics addict, we are of the opinion that under the circumstances of this case his testimony must nevertheless be carefully and cautiously scrutinized. The only witness who testified that the drug transaction actually took place, he had been convicted of numerous drug-related offenses. There were charges pending against him in Madison County at the time he was helping law enforcement agents in this case, and the record shows that he hoped to receive leniency as to these charges by cooperating with the agents. Although both he and the agents denied that he had received compensation for his participation in the events leading to defendant’s conviction, the record shows that he did receive approximately $80 from the agents for travel expenses. These facts, however, do not render the evidence of guilt insufficient; they go to the weight to be given the informant’s testimony. The credibility of witnesses is a matter to be determined by the trier of fact, and that determination will not be set aside unless so unsatisfactory as to justify a reasonable doubt of defendant’s guilt. (People v. Wilson (1970), 45 Ill. 2d 581, 586; People v. Perkins (1962), 26 Ill. 2d 230, 235.) The record shows that the jury was well aware of those facts having an adverse bearing on Gubin’s veracity but nevertheless apparently chose to accept his version of the transaction over the testimony of the defense witnesses. Further, as pointed out in the opinion of the appellate court, there is some degree of corroboration of Gubin’s testimony. From our review of the record we find no basis to reject the testimony as incredible. We conclude that the proof presented by the People, if believed, was sufficient to support the conviction. The sufficiency of the evidence was thoroughly reviewed and discussed by the appellate court, and further discussion here would serve no useful purpose.

Defendant argues here, as he did in the appellate court, that the People improperly attempted to inform the jury of other criminal conduct. The transcript shows that a few sentences into his opening statement the assistant State’s Attorney told the jury that Gubin would testify that he had obtained both heroin and cannabis from defendant. Defense counsel immediately objected to the reference to cannabis, and a conference was held outside the presence of the jury. In the course of the conference the People argued that defendant had given notice of the defense of entrapment and the evidence was properly admissible to rebut that asserted defense. Defense counsel stated that no defense of entrapment would be presented. Following the conference the court advised the jury that the objection by defense counsel was sustained and directed the assistant State’s Attorney to start over with his opening statement. The opening statement as presented to the jury contained no reference to cannabis. Under the circumstances shown, assuming arguendo that the reference to cannabis was error, it was not so prejudicial as to require reversal. An improper remark does not constitute reversible error unless it results in substantial prejudice to the accused. People v. Nilsson (1970), 44 Ill. 2d 244.

Defendant also contends that his prior criminal record was improperly brought to the jury’s attention when his witness, Reggie Taylor, was asked whether he had testified on defendant’s behalf on two previous occasions. The appellate court discussed defendant’s contentions (see 100 Ill. App. 3d 838, 843), and we agree that no reversible error occurred.

Finally, defendant contends that the circuit court erred in imposing a consecutive sentence. Section 5—8—4(b) of the Unified Code of Corrections (Ill. Rev. Stat. 1979, ch. 38, par. 1005—8—4(b)) provides:

“(b) The court shall not impose a consecutive sentence unless, having regard to the nature and circumstances of the offense and the history and character of the defendant, it is of the opinion that such a term is required to protect the public from further criminal conduct by the defendant, the basis for which the court shall set forth in the record.”

Defendant argues that the circuit court failed to make the required finding that a consecutive term was required to protect the public from his further criminal conduct. He argues too that there is no basis in the record for the imposition of a consecutive sentence. Defendant contends that the appellate court searched the record and concluded, erroneously, from certain remarks made by the circuit court that it was of the opinion required by the statute for imposition of a consecutive sentence. He argues that the portion of the record relied upon by the appellate court as the basis for the circuit court’s opinion in imposing a consecutive sentence relates to defendant’s history of criminal activity, a factor to be taken into consideration when imposing a sentence in excess of the statutory minimum (Ill. Rev. Stat. 1979, ch. 38, par. 1005—5—3.2(a)(1)), or as one of the statutory factors to be considered in aggravation (Ill. Rev. Stat. 1979, ch. 38, par. 1005—4—1(c)). In support of the contention that the record fails to show that a consecutive sentence is necessary to protect the public from further criminal conduct, defendant states that prior to the instant offense he had never been charged with delivery of narcotics. The People argue that the sentencing court is required to set out explicitly an adequate basis for its opinion, but need not include “a ritualistic recitation” of the statutory language that “a consecutive term is required to protect the public from further criminal conduct by the defendant.” The People argue that the imposition of a consecutive sentence necessarily implies that the court is of the opinion that the added term is necessary to protect the public and argue that the court’s review of defendant’s criminal history, particularly his drug-related criminal conduct, set forth a sufficient basis for the court’s determination that a consecutive sentence was required to protect the public.

This court has not previously considered the precise issue presented, and the decisions of the appellate court are not in agreement. See People v. Miller (1981), 101 Ill. App. 3d 1029, 1041-42; People v. Mathes (1981), 101 Ill. App. 3d 205, 213-14; People v. Thomas (1981), 98 Ill. App. 3d 852, 859; People v. Johnson (1981), 98 Ill. App. 3d 228, 235-36; People v. Gaston (1980), 88 Ill. App. 3d 314, 316; People v. Green (1980), 83 Ill. App. 3d 982, 988.

We do not agree with the People’s contention that it may be implied from the imposition of the consecutive sentence that the court was of the opinion that the consecutive term was necessary. Although it would be better practice to state the opinion in the language of the statute, failure to do so does not necessarily require reversal. (See People v. Davis (1982), 93 Ill. 2d 155; People v. Kuesis (1980), 83 Ill. 2d 402, 409-10; People v. Cox (1980), 82 Ill. 2d 268, 280-81; People v. Meeks (1980), 81 Ill. 2d 524, 534.) What is required is that the record show that the sentencing court is of the opinion that a consecutive term is necessary for the protection of the public. In sentencing defendant, the circuit court stated:

“Mr. Pittman, this Court presided over your trial in the conviction pending before the Court, and that was unlawful delivery of heroin. The court presided over your other conviction which also occurred in 1979 which was unlawful use of weapons. In going through the presentence report and also with you during the trial — in the trial, the Court has been made aware of a prior conviction in California in 1976, approximately 1976, of selling or furnishing cocaine, and in 1970, in St. Louis, there is a conviction for possession of heroin. Three of your four felony convictions pertain to drugs. These are not drugs that are— These are serious drugs. Two of them are heroin and one of them is cocaine. The Court has had you and your wife before it on many occasions. I’m aware of your family situation. ***.”

While it is true that defendant’s criminal history was relevant to sentencing provisions other than section 5—8—4(b), that fact does not make defendant’s criminal history any less valid a basis for the imposition of a consecutive sentence. As to the sufficiency of the reasons set forth in the record for the consecutive sentence, it is settled that a reviewing court will not substitute its judgment for that of a sentencing court merely because it would have balanced the appropriate factors differently. (People v. Perruquet (1977), 68 Ill. 2d 149.) The record demonstrates that defendant had several felony convictions, including a conviction for unlawfully selling or furnishing cocaine. We conclude that the reasons for sentencing set forth in the record are sufficient to satisfy the requirements of section 5—8—4(b).

For the reasons stated the judgment is affirmed.

Judgment affirmed.