author: MR. JUSTICE RYAN

text:
    (No. 53339.
    THE FIRST NATIONAL BANK OF CHICAGO, Trustee, v. CANTON COUNCIL OF CAMPFIRE GIRLS, Inc., et al., Appellees (Board of Trustees of the Canton Park District, Appellant).

      Opinion filed May 22, 1981.

    — Rehearing denied October 19, 1981.

      Biggam, Cowan 8c Lunding, of Chicago (Edward V. Scoby, of counsel), for appellant.
    Defrees & Fiske, of Chicago, and Baymiller & Christi-son, of Peoria (Richard E. Voland, Edward J. Griffin, Marvin S. Helfand, John K. Silk, and John M. Cregor, Jr., of counsel), for appellee Kickapoo Council of Girl Scouts.
   MR. JUSTICE RYAN

delivered the opinion of the court:

In an inter vivos trust, William Ingersoll provided that at his death certain income be paid to the Girl Scouts of Canton, Illinois. The trust also provided that the portion of the income of the trust payable to any organization that ceased to exist was to be paid to the Canton Park District. Since no Girl Scout troops met regularly in Canton at the time of Ingersoll’s death, the trustee filed suit in the circuit court of Cook County, seeking instmctions as to how to dispose of that share of the income. The court directed the income be paid to the Canton Council of Campfire Girls. The appellate court, with one justice dissenting, reversed and directed the income be paid to the Kickapoo Council of Girl Scouts. (81 Ill. App. 3d 932.) We granted the Canton Park District leave to appeal under our Rule 315 (73 Ill. 2d R. 315).

The share of the income in question under the trust was to be paid to the “Girl Scouts of Canton, Illinois.” As above indicated, if the organization ceased to exist, the income was payable to the Canton Park District. The trustee in its suit suggested three possible recipients as defendants: the Kickapoo Council of Girl Scouts, the Canton Council of Campfire Girls, Inc., and the board of trustees of the Canton Park District.

On May 23, 1949, Ingersoll executed his original trust agreement. Under the agreement, the settlor reserved for himself both the income from the trust during his life, as well as the power to amend the trust. Upon his death much of the income of the trust was to be divided among various charitable beneficiaries. Aware that the name ascribed to a certain charity may be a misnomer, the settlor inserted the following into the agreement:

“The Donor does not have available the correct corporate name of the organizations referred to above and has used the name by which they are commonly known in the locality which they serve. It is the Donor’s intention that payments be made to the legal corporation regardless of what its name may be which is in the judgment of the trustee, commonly known by the name used herein.”

On December 14, 1956, Ingersoll amended the trust. Among other changes, he added the Girl Scouts of Canton, Illinois, to the list of charitable beneficiaries. It was to receive $5,000 per year. On September 28, 1959, Ingersoll again amended the trust. He increased the amount of the gift to the Girl Scouts of Canton, Illinois, to $10,000 per year.

Between 1959 and 1967 Ingersoll amended the trust several more times. As a result, on May 31, 1967, the settlor again changed the trust and on this occasion executed a totally new trust instrument. He also changed the benefit each charity would receive from a dollar amount to a percentage of the net income of the trust. Under this instrument, the Girl Scouts of Canton, Illinois, was to receive 5% of the income. Ingersoll died in 1973.

Girl Scouting began in Canton in 1947. Until 1951 it functioned as a “lone troop,” associated only with the national office of the Girl Scouts of America. In 1951, however, Girl Scouting in Canton came under the authority of a regional council. This council, the Kickapoo Council of Girl Scouts, was headquartered in Peoria. It eventually became responsible for Girl Scouting activities in a 10-county area. Girl Scouting flourished in Canton during most of the 1950’s. By 1959, there were several troops in Canton, comprised of girls from Canton and surrounding areas.

In 1959, following a disagreement between Canton troop leaders and representatives of the Kickapoo Council, the Canton troop leaders, as well as the girls belonging to those troops, resigned. They then joined the Campfire Girls, establishing their own council in Canton. The Campfire Girls provides services similar to those rendered by the Girl Scouts. After this rift, Girl Scouting ceased to exist in Canton, except for one senior troop which briefly continued in a nearby town. This, too, ceased by the middle 1960’s.

Since that time, Canton girls wishing to join the Girl Scouts have joined troops which met in other towns. Attempts to recruit leaders and members from Canton have been unsuccessful. The Kickapoo Council continues to have jurisdiction over Canton for any Girl Scout activities that may be instituted. There has never been an association whose legal name was the Girl Scouts of Canton, Illinois.

After a trial without a jury, the court found that through this gift Ingersoll intended to benefit the young ladies of Canton and that the jurisdiction and background of the Campfire Girls make it the only group which could achieve the settlor’s intent. As a result, the trial court directed that the Campfire Girls receive the trust income.

On appeal, the appellate court reversed the circuit court, finding that the Kickapoo Council, although inactive in Canton, continued to exist as the sole legal authority for the Girl Scouts in that area. As a result, the court held it to be the sole organization entitled to the income from the trust.

The Campfire Girls has abandoned any claim to the gift and by a motion filed in this court has adopted the brief of the Canton Park District, and opposes the payment of the money to the Kickapoo Council of the Girl Scouts.

The Canton Park District contends that the organization known as the Girl Scouts of Canton, Illinois, no longer exists. It contends that Ingersoll had always had a great affinity for the people of Canton, and all but a very few of the charities to which he donated were located in Canton. The park district argues that the same intent was true regarding the Girl Scouts. He wanted the gift to go to the scouting organization in Canton, not one covering central Illinois. Since the early 1960’s there has been no Girl Scout troop in Canton. As a result, the donor’s intent to benefit Girl Scouts in Canton cannot be achieved. The gift over in favor of the Canton Park District, it is argued, must take effect.

The Kickapoo Council, on the other hand, argues that the appellate court was correct in awarding the share in question to it. It argues that Ingersoll made it clear in the trust that he wanted the money to go to the group commonly known as the Girl Scouts of Canton, Illinois. He did not want the fact that he was unaware of the legal name to defeat his intent. In 1956, when the Girl Scouts was first mentioned in the trust, the Canton group was already part of the Kickapoo Council. The Kickapoo Council contends that it remains the only legal entity which can satisfy the intention expressed by Ingersoll. Since it continues to exist, it is argued that the Kickapoo Council is entitled to the income.

The trial court, applying cy pres, awarded the proceeds in question to the Canton Council of Campfire Girls. Cy pres may be applied in cases involving a charitable beneficiary where the charity intended to receive a gift no longer exists, and where the settlor evidenced a general charitable intent. In such a case the court will award the gift to the charity which would most closely achieve the settlor’s intent. (In re Estate of Tomlinson (1976), 65 Ill. 2d 382, 389; Village of Hinsdale v. Chicago City Missionary Society (1940), 375 Ill. 220, 233.) This assumes, of course, that the settlor did not provide for an alternative disposal of the gift upon a failure of beneficiary. (Village of Hinsdale v. Chicago City Missionary Society (1940), 375 Ill. 220; see generally Restatement (Second) of Trusts sec. 413, at 348 (1959).) The trust provides:

“To the CANTON PARK DISTRICT, Canton, Illinois, for the general use of the Park District, Fifteen percent (15%), and the portion of the income payable to any of the above organizations which shall cease to be in existence at any time.”

Thus the provisions in the trust for payment to the Canton Park District in the event an organization ceases to exist precludes the application of cy pres and the awarding of the disputed gift to the Canton Council of Campfire Girls.

The court’s primary concern in construing a trust is to discover the settlor’s intent, which the court will effectuate if it is not contrary to law or public policy. (2416 Corporation v. First National Bank (1976), 64 Ill. 2d 364, 371; United States Trust Co. v. Jones (1953), 414 Ill. 265, 270.) The settlor’s intent is determined as of the time the instrument is executed. See Continental Illinois National Bank & Trust Co. v. Clancy (1959), 18 Ill. 2d 124; Weir v. Leafgreen (1962), 26 Ill. 2d 406; see generally 76 Am. Jur. 2d Trusts sec. 17, at 266 (1975).

In construing trusts in this regard the court will apply the same rules of construction that are applicable in construing wills. (Storkan v. Ziska (1950), 406 Ill. 259, 263; see generally 76 Am. Jur. 2d Trusts sec. 17, at 264 (1975); 35 Ill. L. & Prac. Trusts sec. 81, at 268 (1958).) Where an instrument has been reexecuted, the intent is determined in light of circumstances existing as of the date of the reexecution. (See generally 79 Am. Jur. 2d Wills sec. 696, at 776 (1975).) In determining that intent the court must consider the plain and ordinary meaning of the words used (Bergendahl v. Stiers (1956), 8 Ill. 2d 257; Storkan v. Ziska (1950), 406 Ill. 259), and the intent must be ascertained by considering the entire document. (Ford v. Newman (1979), 77 Ill. 2d 335; Continental Illinois National Bank & Trust Co. v. Clancy (1959), 18 Ill. 2d 124.) If the intent may be gathered from the language of the document without reference to rules of construction, there is no need to use them. (Wiener v. Severson (1957), 11 Ill. 2d 347.) The court may also consider the surrounding circumstances at the time the instrument was executed, to the extent they may aid in determining the settlor’s intention in using certain language. (Continental Illinois National Bank & Trust Co. v. Clancy (1959), 18 Ill. 2d 124.) Where an ambiguity exists as to the identity of a beneficiary, extrinsic evidence is admissible. In re Estate of Tomlinson (1976), 65 Ill. 2d 382; Board of Education v. City of Rockford (1939), 372 Ill. 442; Hitchcock v. Board of Home Missions (1913), 259 Ill. 288.

Reference to the Girl Scouts first appeared in the trust instrument in 1956. Two subsequent amendments also mention the Girl Scouts. On May 31, 1967, there was a reexecution of the trust instrument.

The language of the instrument stated:

“In order to avoid confusion and the need for reference to several documents, the Donor hereby restates said instrument in its entirety by striking, deleting and annulling Articles I to III, both inclusive, of said instrument, as amended, and by substituting in lieu thereof the following new Articles I to V:”

Previous references to the Girl Scouts were contained in Article II. That was thus annulled and superseded by the amendment of 1967. The settlor’s intent, therefore, will be determined as of 1967 and from the 1967 instrument.

The words “Girl Scouts of Canton, Illinois” can be given two interpretations: The settlor wished to benefit either the Girl Scout troops in Canton, or the Girl Scout organization which had authority for Girl Scouting activities in that part of Illinois. The former benefits the girls of Canton, while the latter benefits the organization sponsoring these activities.

We are unable, from the plain meaning of the language used alone, to ascertain the settlor’s intent. As previously mentioned, at the time of the execution of the 1967 instrument, no group existed which was known, either commonly or legally, as the Girl Scouts of Canton, Illinois, and no Girl Scout troop existed in Canton at that time. However, the Kickapoo Council of Girl Scouts had general authority for all Girl Scouting activities in that part of the State. If the settlor wished to benefit only Girl Scout troops of Canton, that intention cannot be achieved. If, however, he intended to generally benefit the Girl Scout organization, then the “Girl Scouts of Canton, Illinois” continues to exist for purposes of the trust.

In ascertaining intent, consideration is not limited to the language of a particular phrase, sentence, or clause. The language must be considered in light of the entire instrument. (Williams v. Fulton (1954), 4 Ill. 2d 524, 528.) In analyzing the 1967 instrument, it is apparent that the settlor intended to limit his gifts to organizations of the Canton area. Article IV of that instrument, which contains the provision in question, makes gifts to 17 charitable organizations. Of these, 16 were located in Canton. The other gift was to the Boy Scouts of America, Creve Coeur Council, with headquarters in Peoria. However, it was specified that this gift “be used for maintenance, development and furtherance of the Boy Scout Camp, which is maintained by said council at or near London Mills, Illinois.” London Mills is located in the northern part of Fulton County, and the camp is about 20 miles from Canton. This makes its facilities conveniently available for use by Boy Scouts residing in Canton. It should also be noted that of the 17 charitable gifts listed in this clause of the trust instrument two others were to local chapters of national organizations. They were: “to the Salvation Army, Canton, Illinois” and “to American Red Cross, Canton Chapter.” However, in each of these gifts there was the provision: “for use only in Canton, Illinois and Fulton County, Illinois.” The scheme of Ingersoll’s philanthropy was clearly to benefit the residents of Canton and Fulton County. We will therefore construe his gift to the Girl Scouts of Canton, Illinois, to conform to this scheme.

At the time the settlor originally inserted the provision for a gift to the Girl Scouts of Canton, Illinois, in the trust instrument, several Girl Scout troops were in existence in that city at that time. When Ingersoll executed the 1967 trust instrument, there were no local Girl Scout troops in Canton. We do not view this circumstance as indicating an intention that the gift, which previously would have been for the benefit of the girls in Canton, should now be for the benefit of Girl Scouting in the entire Kickapoo Council area. The charitable beneficiaries of the trust would receive no income therefrom until after the death of the settlor. In the event Girl Scout troops were again organized in Canton before that event, the gift would not fail. Inasmuch as this did not occur and the group intended to be benefited by the gift did not exist when the gift was to become effective, the provision for the gift over to the park district must take effect. We conclude that it was not the intent of Ingersoll that the share of his trust designated to be paid to the Girl Scouts of Canton, Illinois, be paid to the Kickapoo Council of Girl Scouts.

At the trial an offer of proof was made by the Kickapoo Council after the court had sustained an objection to evidence concerning a conversation between Ingersoll and representatives of Kickapoo Council. The offer was to the effect that in 1951 or 1952 representatives of the Council visited Ingersoll for the purpose of soliciting funds for Kickapoo Council and for its camp. Ingersoll allegedly stated “I would prefer to see that the money [presumably his money] went to central Illinois and not to any national organizations.” He was then informed that he could leave money specifically to Kickapoo Council as opposed to the Girl Scouts of the United States of America. Objections were made to this testimony on the grounds that it violated the Dead Man’s Act (Ill. Rev. Stat. 1975, ch. 51, par. 2); that it was hearsay, and that a statement made prior to the execution of the trust instrument was not admissible to show the settlor’s intent. The trial court sustained the objection but would not specify the reason for doing so. The appellate court found that the trial court erred in not receiving the evidence but also found it unnecessary to consider the question since it ruled in favor of the Kickapoo Council on other grounds. The Kickapoo Council in this court refers to the exclusion of this evidence only in a footnote and has not requested this court to take any action in regard to the trial court’s ruling. Since this question has not been briefed or argued we will not pass on the correctness of the trial court’s ruling. However, even if the objections to this testimony had not been sustained, the evidence offered would not change our finding that Ingersoll intended to benefit the Girl Scouts of Canton and not the Kickapoo Council. In fact, the offered evidence would seem to strengthen that conclusion. The conversation occurred in 1951 or 1952. The first time Ingersoll mentioned the Girl Scouts of Canton in his trust was in his amendment executed December 14, 1956, some four or five years after the alleged conversation. In spite of the fact that he had been specifically solicited to leave money to the Kickapoo Council of Girl Scouts, he did not do so, but, instead, in the 1956 amendment to the trust instrument and in the revised trust instrument executed in 1967, he directed that the money be paid to the Girl Scouts of Canton, Illinois, and did not mention the Kickapoo Council of Girl Scouts.

The appellate court opinion, in coming to a contrary conclusion, places great emphasis upon Northern Trust Co. v. Winona Lake School of Theology (1978), 61 Ill. App. 3d 966. Similar to the case at bar, Winona dealt with a trustee seeking instruction as to a trust provision. The provision in question stated:

“[T]he entire residue shall be conveyed, transferred and assigned to WINONA LAKE SCHOOL OF THEOLOGY, INCORPORATED, Winona Lake, Indiana, or to any corporate successor of said corporation which shall then be the owner of the real estate and improvements at Winona Lake, Indiana, now owned by said corporation, and which shall then be operating and conducting a school of theology at that location.” (Northern Trust Co. v. Winona Lake School of Theology (1978), 61 Ill. App. 3d 966, 970.)

Although the Winona school continued to exist and retained ownership of the assets in question, it terminated those aspects of its program associated with the theology school in 1970. It was argued in Winona that, with the termination of the theology school, it ceased to exist from the standpoint of the trust. The court in that case found that where the object of a gift continued to exist, albeit in a semi-moribund condition, that charity will still receive the gift. (Northern Trust Co. v. Winona Lake School of Theology (1978), 61 Ill. App. 3d 966, 972.) Unlike in Winona, in our case the organization which was to receive the gift does not exist. Therefore, the alternate use for the gift must be considered.

The appellate court in the case at bar concluded that, like the charity in Winona, the Kickapoo Council was in a semi-moribund condition. Nonetheless, it continued to exist and was the only legal corporation that could satisfy the settlor’s desire to leave a gift to the Girl Scouts. Since the Kickapoo Council had authority for Canton area Girl Scouting, and since it continues to exist, the appellate court held that the Council should receive the trust income.

There is a significant difference between Winona and the case at bar. There was no question in Winona as to the institution that was to receive the gift. Only one group existed which matched the name and description provided in the trust. The settlor clearly intended the benefit to go to the Winona Lake School of Theology. If Winona Lake School existed in any form, it was to receive the gift.

In our case, on the other hand, the settlor’s intent as to what charity is to receive the gift is questioned. Thus we must determine the settlor’s intent, as well as whether any group satisfying that intent continues to exist. We do not find Winona apposite. Ingersoll never intended to benefit Kickapoo Council of Girl Scouts but the Girl Scouts of Canton, Illinois. Thus the fact that the Kickapoo Council continues to exist in no way justifies its claim to the income from the trust.

It is clear that the organization intended to receive the gift does not exist. Consequently, that portion of the Ingersoll trust income designated to the Girl Scouts of Canton, Illinois, must be paid, as directed by the gift over, to the Canton Park District. We therefore reverse the judgment of the appellate court and the judgment of the circuit court of Cook County and remand the cause to the circuit court of Cook County to enter judgment in accordance with the views expressed herein.

Reversed and remanded, with directions.

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


source: Caselaw Access Project

author: MR. JUSTICE WARD

license: Public Domain

text:
    (No. 53572.

      In re ROBERT EDWARD CLEVELAND, Attorney, Respondent.

      Opinion filed May 22, 1981.

    — Rehearing denied October 19, 1981.

    Mary M. Conrad, of Chicago, for the Administrator of the Attorney Registration and Disciplinary Commission.
    Sidney Z. Karasik, of Chicago, for respondent.
   MR. JUSTICE WARD

delivered the opinion of the court:

A panel of the Hearing Board of the Attorney Registration and Disciplinary Commission found that Robert E. Cleveland, who was admitted to the bar in 1949, commingled and converted escrow funds deposited with him and was guilty of conduct which tended to defeat the administration of justice and bring the legal profession into disrepute. The panel recommended that the respondent be suspended from the practice of law for a period of one year and until further order of this court. A majority of the members of the Review Board of the Commission agreed with the conclusion and the recommendation of the panel. One member did not participate in the decision, and one member of the Board recommended censure. Two members recommended that the respondent be suspended for two years and until further order of the court.

The complaint filed with the Commission and the evidence showed that the respondent was asked by another attorney, Arthur Zimmerman, to represent the sellers of a franchise business at the closing of its sale. An escrow agreement, drawn by the buyers’ attorney, was entered into at the closing, and $36,729.74 was deposited by the buyers with the respondent as the escrow agent, to be held by him until he received authorization from the buyers’ attorney to release the funds to the sellers. The purpose of the escrow was to withhold payment until certain bulk-sales affidavits and tax releases were obtained. The closing was conducted on March 6, 1978, and the respondent deposited the escrow funds in a personal checking account, though it appears that the account had been used earlier as an escrow account. The buyers’ attorney authorized the respondent in writing on May 11, 1978, to release the escrow funds to the sellers, and on that date the sellers made an oral demand on the respondent for the funds. The funds were not released by the respondent, and four days later the sellers complained to the Attorney Registration and Disciplinary Commission. The respondent conferred with an attorney regarding the matter and on the advice of the attorney did not at that time turn over the escrow funds. The funds were not delivered to the sellers until September 8, 1978. Cleveland denied any intention to convert the funds and claimed that he did not disburse them upon the sellers’ request because he did not have in his possession a legible copy of the escrow agreement. He further claimed that at all times his assets exceeded the amount of the funds in escrow, and he testified that at the time concerned he was under great mental stress because of severe personal problems.

Attorney Zimmerman, who had asked the respondent to handle the closing, forwarded the respondent a legible copy of the agreement sometime before May 24, 1978. It appears that a complaint against the respondent was filed with the State’s Attorney of Cook County, and that the respondent endeavored to have the complaint withdrawn before he turned over the escrow funds. The record does not show the disposition of the complaint, but it appears as if no action was taken on it.

There is no doubt that the respondent commingled and converted the escrow funds for his personal use. They were used to satisfy income tax and other personal obligations and to speculate on the commodities exchange. The hearing panel found, at one period of the respondent’s possession of the escrow funds, his personal use of them had reduced the fund to approximately $8,000. The asserted defense that respondent did not have a legible copy of the escrow agreement is, of course, no defense at all. In no way could it provide justification for the misuse of the clients’ funds. In any event, this explanation was not in good faith available to the respondent, for he was provided with a legible copy by attorney Zimmerman. Apart from this, he of course was present at the closing when the escrow agreement was made and certainly knew its simple terms. Too, the buyers’ attorney gave written authorization to the respondent to release the escrow funds to the sellers, eliminating the possibility of a claim of violation of the agreement.

We consider that the sanction of suspension for one year from the practice of law which the hearing panel and a majority of the Review Board recommended is not inappropriate, and we order the respondent suspended for that period. (In re Brody (1976), 65 Ill. 2d 152; In re Bloom (1968), 39 Ill. 2d 250.) An additional recommendation to us was that the respondent remain suspended until further order of this court. We do not consider that under the circumstances shown the imposition of this further measure is required.

Respondent suspended.


text:
    (No. 53764.

      In re MARRIAGE OF RAE A. EVANS, Appellee, and DUANE E. EVANS, Appellant.

      Opinion filed. June 4, 1981.

    — Rehearing denied October 19, 1981.

      Joe Billy McDade, of Peoria, for appellant.
    James L. Hafele, of Peoria, for appellee.
   MR. JUSTICE WARD

delivered the opinion of the court:

The petitioner, Rae A. Evans, filed a petition in the circuit court of Peoria County for the dissolution of her marriage to the respondent, Duane E. Evans. The circuit court entered a judgment dissolving the marriage on June 15, 1978, and on December 11 the court entered an order disposing of the property held by the parties. The petitioner appealed to the appellate court from the property disposition order. The appellate court, with one judge dissenting in part, reversed the order and remanded the cause (85 Ill. App. 3d 260), and we granted the respondent’s petition for leave to appeal under Rule 315 (73 Ill. 2d R. 315). No question relating to the judgment of dissolution is presented on this appeal.

The parties were married in 1949. There were two children of the marriage, who are now adults and are not living with their parents. The parties separated on January 29, 1978, and on February 1, 1978, the petitioner filed her petition, which alleged that the respondent was guilty of extreme and repeated mental cruelty.

The petitioner was 50 years old at the time of the divorce. She had secured a degree in education in 1972, and had been employed since 1975 as a full-time teacher in a school district in Peoria. Her income for the school year 1977-78 was $11,500. The respondent was 49 years old. He held a degree in mechanical engineering and was employed at the Caterpillar Tractor Company, where he had been hired in 1952. In 1978 he earned $28,000.

The circuit court denominated as nonmarital property, and awarded to the petitioner, a parcel of real estate in Iowa which she had inherited in 1960 and had sold under contract in 1973 for $40,000, along with those proceeds of the sale already received, amounting to $24,879. The respondent was assigned a parcel of real estate in Peoria which he had contracted to purchase for a new home.

The court characterized as marital property the jointly owned marital home, which had been purchased in 1956 for $13,900. The record does not show the source of the funds with which the home was purchased. At the time of the divorce $2,500 of mortgage indebtedness remained outstanding. The court found the home to be worth $45,000 and divided it between the parties. The petitioner was given sole title to the home and its furnishings, subject to the obligation to pay the mortgage installments and real estate taxes for 1978 and subsequent years. The respondent was awarded $21,500 as his interest in the residence. The court also divided between the parties three automobiles, 30 shares of stock, and several bank accounts totaling about $17,000.

The circuit court awarded the petitioner a one-half share in some 527 shares of stock in Caterpillar Tractor Company, referred to by the court as “vested,” held in the respondent’s account in an employees’ investment program established by the company. The respondent was directed to pay the petitioner $15,051, this being one-half the value of the stock, calculated at its market price of $57 1/8 per share on the date the judgment of dissolution was entered. The order provided, however, that the respondent need not pay this amount until “the first opportunity that such shares can be released from the Investment Program without penalty.” Ownership of the other half of the 527 shares was awarded to the respondent, as were also “all rights to any and all unvested shares.”

Both the petitioner and the respondent were participants in pension programs established by their respective employers. The trial court’s order, without characterizing the pension benefits as being either marital or nonmarital property, provided:

“The respective pension benefits of each of the parties under their respective pension plans or programs with their respective employers shall remain their separate property, and neither party shall have any right, title, or interest in and to such pension or pension benefits or any part thereof of the other party.”

The court held that neither party was entitled to maintenance from the other.

A majority of the appellate court held that, with respect to the stock held in the respondent’s investment-program account, the trial court should have classified all the stock as marital property, thus including an additional 72 shares, referred to by the majority as “nonvested.” The majority also held that the trial court had likewise erred in failing to classify as marital property the pension rights of each party. The majority did not express an opinion as to the value of the “nonvested” shares of stock or of the pension rights, nor did it specify how their value should be determined, an operation which the opinion acknowledged would present “vexatious problems.” Instead, it remanded the cause with directions that the circuit court reconsider its property settlement order on the basis of the evidence already before it. 85 Ill. App. 3d 260, 264-65.

The majority’s treatment of both the shares of Caterpillar stock and of the pension rights rested upon the proposition that any benefits which may be received by one spouse following the divorce, under a contract incident to his or her employment during the marriage, constitute marital property in which the other spouse is entitled to share under section 503 of the Illinois Marriage and Dissolution of Marriage Act (Ill. Rev. Stat. 1979, ch. 40, par. 503), even though the benefits in question may never be received by the employee because of the termination of his employment prior to the date when their payment becomes due, as the result of his death or his discharge or resignation. In reaching its decision the majority relied on previous decisions of the appellate court in In re Marriage of Donley (1980), 83 Ill. App. 3d 367, and In re Marriage of Hunt (1979), 78 Ill. App. 3d 653, and on the decision of the Supreme Court of California in In re Marriage of Brown (1976), 15 Cal. 3d 838, 544 P.2d 561, 126 Cal. Rptr. 633.

The third judge of the appellate court panel took the view that the trial court should have included the parties’ pension rights as marital property but only to the extent that those rights were vested. He considered that the trial court was correct, however, in refusing to treat as marital property any additional stock in the respondent’s investment account, since the respondent’s receipt of further shares was contingent upon his continued employment.

The question whether potential future benefits arising out of employment should be treated as marital property has been before the appellate court in several cases. (See In re Marriage of Musser (1979), 70 Ill. App. 3d 706; In re Marriage of Pickell (1979), 76 Ill. App. 3d 855; In re Marriage of Hunt (1979), 78 Ill. App. 3d 653; In re Marriage of Pieper (1979), 79 Ill. App. 3d 835; In re Marriage of Donley (1980), 83 Ill. App. 3d 367; In re Marriage of Smith (1980), 84 Ill. App. 3d 446; In re Marriage of Musser (1980), 90 Ill. App. 3d 18.) It has also been the subject of consideration in other jurisdictions (see Annot., 94 A.L.R.3d 176 (1979)), including some which recognize the community property doctrine, others, like Illinois, which adhere to the common law doctrine of marital property but which have enacted legislation patterned after section 307 of the Uniform Marriage and Divorce Act (see 9A Unif. Laws Ann. 142 (1979)), and still others which fall in neither of those categories. The question has not hitherto been presented to this court.

The status of income payable to a spouse after the divorce but attributable to his or her employment during the marriage raises a number of questions under section 503 of the Illinois Marriage and Dissolution of Marriage Act and under section 307 of the Uniform Marriage and Divorce Act as amended in 1971, upon which the Illinois Act is.modeled. (See Ill. Ann. Stat. 1979, ch. 40, par. 503, Historical and Practice Notes (Smith-Hurd 1980).) Thus a question arises initially whether a contractual right to future income is “property” as that term is employed in section 503, since section 503(c) calls for marital property to be “divided,” whereas the personal right of an employee to receive future payments from his employer is not susceptible to being divided in the same sense that real estate or personal property may be. Again, if the payment of benefits is contingent upon future events, such as the continuation of employment, a present award based on the discounted value of future payments to the employed spouse will prove excessive if the amount of benefits which he actually receives is less than the amount which was assumed.

Not surprisingly, treatment of the matter in other jurisdictions has not been uniform. In some a right to future income has been held not to constitute property at all. (See, e.g., Savage v. Savage (1978),--Ind. App. ---, 374 N.E.2d 536; In re Marriage of Ellis (1975), 36 Colo. App. 234, 538 P.2d 1347, aff'd (1976), 191 Colo. 317, 552 P.2d 506.) In others such a right has been considered to be a form of property which is susceptible to division only if it is presently vested. (See, e.g., White v. White (1975), 136 N.J. Super. 552, 347 A.2d 360; Blitt v. Blitt (1976), 139 N.J. Super 213, 353 A.2d 144.) In still others future income has been given the status of property even though the right to it is nonvested. See, e.g., In re Marriage of Brown (1976), 15 Cal. 3d 838, 544 P.2d 561, 126 Cal. Rptr. 633.

As did the appellate court, the parties, in their briefs and on oral argument, proceed on the assumption that the disposition of this appeal requires a decision as to which of these doctrines should be adopted as the law of this State. We believe, however, that the case should be disposed of on a different ground.

Where one spouse has acquired a right to potential future benefits through his employment there is no way in which the other spouse may be awarded some defined interest in those benefits as marital property without a determination of the value they have to the employed spouse. A profit-sharing or retirement plan is a complex entity in which many factors must be taken into account in order to ascertain the monetary impact of the plan upon a given employee. (See Bonavich, Allocation of Private Pension Benefits as Property in Illinois Divorce Proceedings, 29 De Paul L. Rev. 1 (1979).) Without evidence of the value of the benefits here in question the circuit court could not award an interest in them to the other spouse as a just apportionment of marital property. (See In re Marriage of Donley (1980), 83 Ill. App. 3d 367, 370.) No evidence was introduced to show what value the nonvested shares of stock and the retirement benefits had to the spouse who was entitled to receive them, and the petitioner having shown no error, the judgment of the circuit court must be affirmed.

We turn first to the evidence with regard to the stock held under the employees’ investment program. The petitioner did not call any official of the employer to testify about the operation of the program, and no comprehensive description of it is included among the exhibits. The only evidence concerning the plan is a one-page letter from the manager of the employer’s employee-benefit division furnished to counsel for the petitioner.

The letter states that as of June 1, 1978, the respondent’s account held 527 shares, including 263 which had been purchased with the respondent’s contributions and with dividends paid on that stock, and another 263 shares said to represent the “vested portion of shares purchased with company contributions and dividends.” The letter states further that if the respondent should “withdraw from the Plan as of June 1, 1978,” he would receive the 527 shares referred to above, but he would “forfeit” an additional 72 “unvested shares.”

It is doubtless the last-mentioned statement which led the trial judge to insert in his order the provision that the respondent was not obligated to pay the petitioner the $15,051 found due her until the 527 shares could be withdrawn from the investment account “without penalty.” Neither the letter nor any other evidence indicates that the forfeiture clause is at some point to become inoperative, or in what manner and on what date. The trial court’s award of $15,051 to the petitioner will therefore not be effectuated until it is determined, upon application to the circuit court, if that should be necessary, that the award has become payable. The respondent did not appeal from the order of the circuit court, and this aspect of the order is not challenged here, however, so that there is no reason to set aside the award of the 527 shares.

The absence of evidence on the operation of the plan makes it impossible for the trial court to enlarge the award to the petitioner by taking nonvested shares into account, however. This is so because neither the 72 shares nor any subsequent increment to the respondent’s account was shown to be attributable to that segment of his employment which took place during the marriage rather than after the divorce, and because there is no basis in the record for assigning any dollar value to such shares of stock as may be purchased or contributed in the future.

As to the parties’ retirement benefits, the only evidence with respect to the retirement income plan maintained by the respondent’s employer was a letter written by the manager of employee benefits in reply to an inquiry by the petitioner’s counsel as to what retirement benefits had accrued under the plan during the respondent’s service, and what his retirement benefit would be if he were now 65 years old.

The letter notes that the entire pension was provided by the employer’s contributions, and also that no benefits were currently payable because the respondent was not presently eligible to retire. The letter goes on to state:

“If he left Company employment, however, the vested pension under the Caterpillar retirement Income Plan for Mr. Duane E. Evans as of June 15, 1978 would amount to $805 per month. That is the amount payable if payments commence on July 1, 1993 which is the first of the month following his 65th birthday. Such amount would be discounted 6% for each year {Vi of 1% for each month) that payment commences prior to such date. There is no cash value to the vested benefit and no payments would be payable to anyone under the Plan after Mr. Evans’ death unless he is then receiving his vested benefit and has elected a survivor option. The earliest date on which he could start receiving a vested benefit is July 1, 1983.”

The figure of $805 per month presumably refers to the amount which the respondent would receive on the basis of his service up to the date of his divorce. Although testimony by the employer’s director of employee benefits might have clarified the point, it is not clear from the letter alone that the respondent would be entitled to any benefits from his employer were he to retire prior to reaching age 55.

In her post-trial motion, which was denied, the petitioner represented that depending upon the date of his retirement the respondent would enjoy pension benefits “somewhere between $194,000 and $286,000,” and that her share would have a value of between $90,000 and $140,000. The factual basis for these figures is not made apparent, and the record does not show that there was any testimony to support them.

In her brief in this court, on the other hand, the petitioner asserts that the respondent’s benefits would total $114,945. She arrives at that figure on the assumption that the respondent would retire at age 65, i.e., in the year 1993, and would receive benefits until his death, which she assumed would occur in the year 2001 on the basis of his having an actuarial life expectancy of 24 years at the time of the divorce. The petitioner also states that the figure of $114,945 is predicated upon a monthly pension payment of $1,185. The latter figure is contrary to the evidence. In view of the state of the evidence, we conclude that the trial court did not err in ordering that whatever benefits the respondent might have under his employee’s pension plan should remain his separate property. The petitioner’s claim to an interest in the respondent’s social security benefits must similarly be rejected. The petitioner’s assertion as to the monthly amounts which the respondent will receive is not based on definitive information obtained from the Social Security Administration but only on a statement in the letter from the employer’s manager of employee benefits that he “estimates” that these amounts would be available.

We reach a parallel conclusion as to the pension plan of the Teacher’s Retirement System of Illinois, which applied to the petitioner’s employment. No official from the retirement system was called to testify concerning the structure and operation of the plan, and petitioner was not interrogated on the subject during her direct examination. On cross-examination the respondent introduced without objection a bulletin and a brochure subpoenaed from the retirement system which contained some particulars of the program. The petitioner, as a teacher employed on a full-time basis, was required to contribute 8% of her earnings each pay period to the retirement system, while the employer contributed 1%. The exhibits stated that a teacher would become eligible for a retirement allowance after completing one of several combinations of “attained age and years of creditable service,” i.e., 20 years of service at age 55, 10 years of service at age 60, or 5 years of service at age 62. Since the petitioner was 50 years old in 1978 and had been employed as a teacher for three years, under the schedule she would not be eligible for a pension until she reached 60, although by that time she would already have completed more than the requisite 10 years of service.

According to the provisions of the plan set forth in the exhibit, ascertainment of the amount of the monthly payment requires that the employee’s “average” salary over a period of years be determined, and that there be applied to that figure a percentage which varies according to the number of years of service. It would then, of course, be necessary to isolate that part of the monthly payment which was attributable to the portion of the petitioner’s employment which antedated the divorce. No evidence was introduced to show what the resulting amount would be.

In summary, we conclude that there was insufficient evidence introduced by the parties to establish a value for the “nonvested” shares of stock and for the retirement benefits, and that the trial court accordingly did not err in failing to characterize these items as marital property and to award a marital share in them. We intimate no opinion as to the circumstances, if any, in which a right to future payments of income should be treated as marital property.

The judgment of the appellate court is accordingly reversed, and that of the circuit court is affirmed.

Appellate court reversed; circuit court affirmed.


author: MR. JUSTICE CLARK

text:
    (No. 53679.
    ROY KIDD, Appellant, v. THE INDUSTRIAL COMMISSION et al. (Caterpillar Tractor Company, Appellee).

      Opinion filed May 22, 1981.

    — Rehearing denied October 19, 1981.

      James C. Serkland, of Scheele, Serkland & Boyle, Ltd., of Chicago, for appellant.
    Robert F. Fahey, of Peoria, for appellees.
   MR. JUSTICE CLARK

delivered the opinion of the court:

The claimant, Roy Kidd, was awarded compensation by an arbitrator for temporary total incapacity for work and for the permanent and complete loss of 50% of the use of his left foot. The Industrial Commission affirmed the arbitrator’s award and made special findings to the effect that the claimant was not entitled to be compensated for lost earnings under section 8(d)(1) of the Workmen’s Compensation Act (Ill. Rev. Stat. 1975, ch. 48, par. 138.8(d)(1)), because section 10(g) of the Act (Ill. Rev. Stat. 1975, ch. 48, par. 138.10(g)) bars the use of overtime earnings in computing lost earnings. The circuit court of Macon County confirmed the Commission’s decision. The claimant appeals to this court pursuant to Rule 302(a). 73 Ill. 2d R. 302(a).

The claimant was employed as a finish painter by respondent, Caterpillar Tractor Company, on March 25, 1976, the day of the accident. As he descended a ladder, the claimant stepped into a paint pot with his left foot and caught his heel. The resulting injury was a fracture of two bones in his left foot. The claimant underwent surgery and needed to wear a short leg cast for some time. When the claimant returned to work in November 1976 he was advised by respondent’s doctor not to return to his job as a finish painter but to return to light duty. The claimant took an assembly job, at the same rate of compensation as before his injury. The claimant was unable to take advantage of offers of overtime in his new job, due to both the lingering effects of his injury and the fact that there was less overtime to be had in his new job. There is no dispute but that, except for the loss of overtime earnings, the claimant is earning as much now as before the accident.

On appeal the claimant contends, first, that his lost overtime earnings should be included in computing lost earning capacity under section 8(d)(1). The claimant offers as support for this contention the fact that section 8(d)(1) was amended in 1975 to provide that lost earnings are to be recoverable “subject to the limitations as to maximum amounts fixed in paragraph (b) of this section, equal to 66 2/3% of the difference between the average amount which he would be able to earn in the full performance of his duties in the occupation in which he was engaged at the time of the accident and the average amount which he is earning or is able to earn in some suitable employment or business after the accident.” (Emphasis added.) (Ill. Rev. Stat. 1975, ch. 48, par. 138.8(d)(1).) Prior to the amendment of section 8(d), a claimant was entitled to 65% of the difference between the average amount which he “earned before the accident” and the average amount earned afterwards. III. Rev. Stat. 1973, ch. 48, par. 138.8(d)(1).

The claimant asserts that the amendment evinces a legislative intent that overtime earnings are to be included in computing lost earnings based on what a claimant would earn in the “full performance of his duties.” We must disagree due to the express terms of section 10(g) of the Act, which provide:

“The basis for computing the compensation provided for in Sections 7 and 8 of the Act shall be as follows:
(g) Earnings, for the purpose of this section, shall be based on the earnings for the number of hours commonly regarded as a day’s work for that employment, and shall exclude overtime earnings. ***” (Ill. Rev. Stat. 1975, ch. 48, par. 138.10(g).)

We do not see how the amendment to section 8(d) could seriously be thought to supersede or implicitly repeal section 10(g), especially since the amendment is somewhat ambiguous, whereas the meaning of section 10(g) is not at all obscure.

The claimant alternatively urges that overtime earnings are to be included in computing lost earning capacity under section 8(d)(1) because section 10(g) limits only the maximum compensation payable and does not refer to the computation of lost earnings. Thus, continues the argument, section 10(g)’s exclusion of overtime earnings is designed to prevent the total compensation payable from exceeding 66 2/3% of the regular weekly earnings. We are constrained to disagree with this argument, however, for the reason that section 10(g), by its terms, clearly does relate to earnings, and unambiguously excludes overtime earnings from being considered. (Sroka v. Industrial Com. (1952), 412 Ill. 126, 129; Franklin County Coal Corp. v. Industrial Com. (1947), 398 Ill. 528, 535.) (These two preamendment cases held that overtime earnings were not includible in computing lost earning capacity.)

The claimant next asserts that if overtime earnings are not to be included in computing lost earning capacity, then section 10(g) is violative of the State and Federal guarantees of due process and equal protection and constitutes class legislation contrary to the State and Federal constitutions. The essence of claimant’s argument is that since the Workmen’s Occupational Diseases Act allows overtime earnings to be included in computing lost earning capacity (Ill. Rev. Stat. 1975, ch. 48, par. 172.45(g)), but the Workmen’s Compensation Act does not, an unconstitutionally discriminatory scheme is established.

“Whether a law is attacked as special legislation or as violative of equal protection, it is still the duty of the courts to decide whether the classification is unreasonable in that it preferentially and arbitrarily includes a class (special legislation) to the exclusion of all others, or improperly denies a benefit to a class (equal protection).” (Illinois Polygraph Society v. Pellicano (1980), 83 Ill. 2d 130, 138.) The requirements of due process are met if a law bears a reasonable relationship to a proper legislative purpose and is neither arbitrary nor discriminatory. The courts will not substitute their judgment for that of the legislature. Illinois Gamefowl Breeders Association v. Block (1979), 75 Ill. 2d 443, 454.

We agree with the respondent that the General Assembly could very well have decided that since there is a direct causal relationship between prolonged exposure to harmful work conditions and occupational diseases, it is appropriate to include overtime earnings in computing lost earning capacity under that particular act. On the other hand, an accidental injury at work, which usually is an instantaneous event, is not as closely related to the number of hours spent on the job. Thus, the different legislative purposes of the two acts justified the General Assembly in treating overtime earnings differently. There is nothing unreasonable about such a distinction. The claimant’s assertion of unconstitutionality must therefore fail.

Accordingly, for the reasons stated, the judgment of the circuit court of Macon County is affirmed.

Judgment affirmed.


author: MR. JUSTICE SIMON

text:
    (No. 54047.
    GENERAL MOTORS CORPORATION, Appellee, v. WILLIAM M. BOWLING, Director of Labor, et al. (UAW Local 694 et al., Appellants).

      Opinion filed, June 26, 1981.

    — Rehearing denied October 19, 1981.

      Harold A. Katz, Irving M. Friedman, Michael B. Erp, and Stanley Eisenstein, of Katz, Friedman, Schur & Eagle, of Chicago, for appellant.
    Ellis A. Ballard, of Pope, Ballard, Shepard & Fowle, of Chicago (Otis M. Smith and James R. Wheatley, of Detroit, of counsel), for appellee.
    Tyrone C. Fahner, Attorney General, of Springfield (Joseph D. Keenan III, Assistant Attorney General, of Chicago, of counsel), for William A. Bowling, Director of Labor.

      Asher, Goodstein, Pavalon, Gittler, Greenfield 8c Segall, of Chicago, for amicus curiae Illinois State Federation of Labor and Congress of Industrial Organizations.
   MR. JUSTICE SIMON

delivered the opinion of the court:

The question raised by this appeal is whether certain employees of General Motors Corporation (GM) are entitled to unemployment compensation benefits. Claimants were shop clerks employed at GM’s Electro-Motive Division plants in Chicago and La Grange, and belonged to United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) Local No. 694. These plants employed 275 shop clerks. There were approximately 7,000 production workers in the two plants, and they belonged to UAW Local No. 719.

The collective bargaining agreement for members of Local No. 719 was negotiated separately from the agreement covering the shop clerks. The bargaining on behalf of production workers was conducted in national negotiations held in Detroit; the contract for the shop clerks was negotiated by their own local. When negotiations for the production workers had been concluded nationally, the contract covering shop clerks was negotiated, and certain items in the national agreement were usually incorporated into that contract.

During national negotiations in 1970, members of Local 719 struck at both the Chicago and La Grange plants, along with other GM employees in other places, as part of a selective strike designated by the UAW. The shop clerks did not strike and they did not picket. They crossed the picket lines and continued to work. Eventually, because of a shortage of work, some of the shop clerks were laid off, although some continued to work throughout the strike. The shop clerks who were laid off are the claimants in this case.

The Director of Labor allowed benefits, and the circuit court of Cook County confirmed that decision, over the employer’s challenge. The appellate court reversed, holding that by paying union dues, part of which went to a strike fund which contributed to the production workers’ strike, the shop clerks financed the strike that caused their unemployment, and so were ineligible for benefits. (87 Ill. App. 3d 204.) We granted the claimants leave to appeal.

Section 604 of the Unemployment Compensation Act provided:

“Labor dispute. An individual shall be ineligible for benefits for any week with respect to which *** his *** unemployment is due to a stoppage of work which exists because of a labor dispute at the factory, establishment, or other premises at which he is *** employed, provided, that this Section shall not apply if *** (A) he is not participating in or financing or directly interested in the labor dispute which caused the stoppage of work and (B) he does not belong to a grade or class of workers *** any of whom are participating in or financing or directly interested in the dispute." (Emphasis added.) (Ill. Rev. Stat. 1969, ch. 48, par. 434.)

The italicized clause is commonly known as the “relieving proviso.” The Act has since been amended; but the provisions at issue here have not materially changed.

The claimants are ineligible only if both (1) their unemployment was due to a stoppage of work which existed because of a labor dispute at the premises where they worked, and (2) they or others of their grade or class were participating in, financing, or directly interested in the labor dispute. We conclude that the claimants are within the relieving proviso, in that neither they nor anyone of their grade or class participated in, financed, or had a direct interest in the dispute. It is therefore unnecessary to decide whether their unemployment was due to a stoppage of work caused by a labor dispute at their premises. Regardless of the answer to that question, the claimants are eligible for unemployment benefits.

GM does not contend that the claimants were of the same grade or class as the striking production workers. Clearly, at least for the purposes of this case, the grades or classes of workers to which the claimants belong do not extend beyond the shop clerks’ unit. See Shell Oil Co. v. Cummins (1955), 7 Ill. 2d 329.

None of the shop clerks — the claimants or other workers of their grade or class — participated in the labor dispute. They did not strike or picket or otherwise interfere with GM’s operations. They came to work every day, crossing the production workers’ picket lines with passes from the international union, until GM laid them off.

Nor were the shop clerks “directly interested” in the dispute. Certain parts of the production workers’ national agreement would customarily be copied into the shop clerks’ own agreement. The shop clerks, therefore, might anticipate that the strike would influence their terms of employment. That, however, is at most an indirect interest. All they had was a hope, not any assurance. A mere expectancy without any legal right, subject to GM’s views on the fairness and convenience of adopting parts of another agreement, does not disqualify the shop clerks for unemployment benefits. It is no greater an interest than, say, a Ford worker had at the time; for in 1970 it was usual for the other auto makers to go along with the deal worked out by the union and its “target” company, in the case of these negotiations GM. The appellate court’s opinion includes a more thorough discussion of this point, which we need not repeat. 87 Ill. App. 3d 204.

The issue, then, is whether the shop clerks financed the strike. Some of them, in the spirit of labor solidarity, volunteered their skills to help the striking local in its office, for example by making out the checks from the strike fund to the strikers. That, however, is not “financing” the strike, as GM recognizes. This case is about whether the shop clerks financed the strike by paying union dues.

The strike was financed by the international union’s strike fund. The international doled out money to those locals that went on strike, including the production workers’ local (Local No. 719) at the Electro-Motive plants in Chicago and La Grange, for the support of the strikers. Part of each member’s regular monthly dues, including the dues of the shop clerks, was earmarked for the strike fund; in addition, the international union assessed special double dues in anticipation of the strike, to build up the fund. After the strike, the international union also assessed special dues against members who had worked through the strike, including some of the shop clerks. However, the payments were indirect, small, and hard to trace. The claimants paid no money directly to the striking local; they paid their dues to the international, where the money was commingled with the dues of all other UAW members around the country. Then, Local No. 719 was not the only local on strike; it got only some small part of the available funds. There is no way to say exactly what money, or how much money, passed from the claimants through the international to the striking workers at the claimants’ own plant; and if we assume some sort of fair prorating, the amount in question is clearly insignificant.

The word “financing,” moreover, implies something active and voluntary. If the city paid strike benefits, that would not make every taxpayer a financer of the strike. The claimants assert that they had no real choice but to pay their dues and assessments. They worked in a union shop; anyone who refused to pay would have been fired. The General Assembly, the claimants contend, did not mean to force workers to risk imminent unemployment to maintain their eligibility for unemployment benefits if they later got caught in the middle of someone else’s strike. That would be too hard a choice.

GM responds that if union dues are compulsory, that is the union’s doing, not the company’s; and it is the shop clerks themselves who vote in the union and instruct it how to behave. At least a majority of the shop clerks freely chose to join the international and pay its dues, including such special assessments as the international might levy from time to time in accordance with its constitution.

The Director of Labor agreed with the claimants on this point, as did the circuit court. The Department of Labor has long taken the position that paying union dues is not financing a labor dispute. (See Sangamo Electric Co. v. Donnelly (1962), 26 Ill. 2d 348, 360.) Its interpretation of the statute, although not binding on a court, is entitled to respect; if it is reasonable, the court should incline to sustain it.

We agree with the Director and the claimants. A payment of money is not “financing” a labor dispute unless there is a meaningful connection between the payment and the dispute (Baker v. General Motors Corp. (1980), 409 Mich. 639, 297 N.W.2d 387), such as a purpose to support the strike. Thus, in Outboard, Marine & Manufacturing Co. v. Gordon (1949), 403 Ill. 523, the court held that the claimants were not financing a strike even though their union regularly paid part of their dues to the striking union: the payments were for administrative services and were not meaningfully related to the strike. Here, when a connection developed between the shop clerks’ dues and the production workers’ strike, the shop clerks had no choice about paying them. The shop clerks’ voluntary choice was to join the international, establish a union shop, and pay whatever dues might be called for from time to time. They made that decision not to aid the present strike, which was then unimagined, but rather to assure themselves adequate support in their own labor disputes, when necessary. The strike fund is a sort of private insuranee against unemployment due to strikes. One does not pay insurance premiums to finance other people’s claims, but to provide for one’s own need. To the extent the shop clerks’ payments were voluntary, they were not meaningfully connected to the labor dispute; to the extent they were sufficiently related, they were not voluntary. The union dues, therefore, did not constitute financing.

The essential fact of this case is that it is only coincidence that the shop clerks belonged to the same international union as the strikers. That membership did not affect the progress of the labor dispute; had the shop clerks belonged to some other union, and paid their dues into some other strike fund, while persons similarly employed at another plant belonged to Local No. 694, everything would have happened just as it did, except that the striking union (Local No. 719) might not have been so willing to let the shop clerks keep working. The shop clerks in that hypothetical would clearly have been covered by the relieving proviso and so eligible for benefits; the members of the other local of UAW would also have been eligible because they would be at a different establishment. The shop clerks should not be denied benefits simply because they were unlucky enough to get caught in the repercussions of a strike at their own plant by people fortuitously associated with the same strike fund. Such a discrimination would be unrelated to any purpose or policy of the statute.

The effect of interpreting “financing” as GM suggests would be to burden, arbitrarily, affiliations among bargaining units at the same establishment. Only by remaining independent, or affiliating solely with workers at other plants, could local bargaining units assure that no innocent bystanders would be denied unemployment compensation. As GM itself urges, the policy of this State is to remain neutral in labor disputes (Buchholz v. Cummins (1955), 6 Ill. 2d 382) and collective bargaining generally. To favor one form of labor organization — or disorganization-over another would not be neutral. This court should not lightly impute to the legislature a policy of discouraging various workers at a plant from pooling their resources in one large union. The Act judges claimants by where they work and in what grade or class, not by what international union they belong to. The shop clerks and the international should not have to bear the cost of their unemployment simply because they are members.

The financing disqualification has been called a “dead letter.” (Shadur, Unemployment Benefits and the “Labor Dispute” Disqualification, 17 U. Chi. L. Rev. 294, 328 (1950).) This is not the case to resurrect it. The claimants are entitled to their benefits.

Appellate court reversed; circuit court affirmed.


author: MR. JUSTICE MORAN MR. JUSTICE WARD,

text:
    (No. 54073.
    THE DEPARTMENT OF MENTAL HEALTH AND DEVELOPMENTAL DISABILITIES, Appellee, v. THE CIVIL SERVICE COMMISSION et al. (Wayne C. DuFrenne, Appellant).

      Opinion filed June 26, 1981.

    — Rehearing denied October 19, 1981.

      Gilbert A. Cornfield, of Cornfield and Feldman, of Chicago, for appellant.
    Tyrone C. Fahner, Attorney General, of Springfield (L. Kent Sezer and Val Gunnarsson, Assistant Attorneys General, of counsel), for appellee.
   MR. JUSTICE MORAN

delivered the opinion of the court:

On August 16, 1979, the Illinois Civil Service Commission (Commission) entered an order suspending defendant, Wayne Du Frenne, from his employment with plaintiff, the Department of Mental Health and Developmental Disabilities (Department), for 120 days. On review sought by the Department, the circuit court of Sangamon County reversed the Commission’s decision and remanded the cause with directions to enter an order of discharge. In a majority decision, the appellate court affirmed the circuit court’s judgment. We allowed leave to appeal. 86 Ill. App. 3d 1072.

The issue before this court is the propriety of the circuit court’s reversal of the Commission’s decision.

On March 8, 1979, the Department suspended defendant for 30 days pending discharge for allegedly mistreating a patient. The Department initiated discharge proceedings on March 21. Thereafter defendant demanded a hearing pursuant to section 11 of the Personnel Code (Ill. Rev. Stat. 1977, ch. 127, par. 63b111). A full hearing was held before a hearing officer. The Commission adopted the findings of the hearing officer, which included the following:

“[Defendant] was involved in an incident which was stressful to say the least and appeared to be more than he could handle. He was attacked with a punch to the face and then scratched. It is not to his credit that he punched and kicked a patient who was under restraint and presented no further danger to him. However, [defendant’s] reaction was not calculated but rather was the result of his sudden loss of control which under the circumstances may be understandable although not condoned.”

The Commission also adopted the hearing officer’s conclusion that due to the presence of mitigating circumstances suspension would be appropriate, and imposed an additional 90-day suspension. The trial court held that the Commission’s finding that defendant acted under substantial stress as a result of a physical altercation was supported by the record and, further, that the Commission did not err in considering this stress as a mitigating factor. However, the court concluded that defendant’s conduct constituted sufficient cause for discharge as a matter of law and remanded the cause to the Commission with instructions to enter an order finding defendant properly discharged as of April 7, 1979.

A court’s scope of review of an administrative agency’s decision regarding discharge is a two-step process. First, the court must determine if the agency’s findings of fact are contrary to the manifest weight of the evidence. (See Basketfield v. Police Board (1974), 56 Ill. 2d 351, 358.) In applying this rule of law, the following statutory provision must be considered: “The findings and conclusions of the administrative agency on questions of fact shall be held to be prima facie true and correct” (Ill. Rev. Stat. 1977, ch. 110, par. 274). In this case, neither the trial court nor the appellate court found the Commission’s findings of fact to be contrary to the manifest weight of the evidence. Our review of the record renders the same conclusion.

The second step in the court’s analysis is to determine if the findings of fact provide a sufficient basis for the agency’s conclusion that cause for discharge does or does not exist. Section 11 of the Personnel Code prohibits discharge of employees except “for cause.” (Ill. Rev. Stat. 1977, ch. 127, par. 63b111.) There is no statutory definition of “cause.” “Cause” has been judicially defined as “some substantial shortcoming which renders the employee’s continuance in office in some way detrimental to the discipline and efficiency of the service and which the law and sound public opinion recognize as good cause for his no longer holding the position.” E.g., Kreiser v. Police Board (1976), 40 Ill. App. 3d 436, 441, aff’d (1977), 69 Ill. 2d 27.

Due to the paucity of specific guidance, several appellate decisions in this State have held that the question of whether there is sufficient cause for discharge is generally for the agency to determine. (Brown v. Sexner (1980), 85 Ill. App. 3d 139, 147; Fox v. Illinois Civil Service Com. (1978), 66 Ill. App. 3d 381, 388; Epstein v. Civil Service Com. (1977), 47 Ill. App. 3d 81, 85; Caliendo v. Goodrich (1975), 34 Ill. App. 3d 1072, 1075; Crowell v. Police Board (1975), 32 Ill. App. 3d 552, 555; Nolting v. Civil Service Com. (1955), 7 Ill. App. 2d 147, 162-63.) Indeed, even the appellate court in this case recognized “the substantial deference that must be given to the Commission’s ruling on the question of cause.” (86 Ill. App. 3d 1072, 1074.) Some appellate opinions have found administrative penalties too severe and subject to reduction. (Fox v. Civil Service Com. (1978), 66 Ill. App. 3d 381, 393; Kreiser v. Police Board (1976), 40 Ill. App. 3d 436, 442, aff'd (1977), 69 Ill. 2d 27, 31; Caliendo v. Goodrich (1975), 34 Ill. App. 3d 1072, 1076-77.) These cases, however, make it clear that the Commission’s determination to discharge might be overturned only if its decision is arbitrary, unreasonable, or unrelated to the requirements of service. See also Parkhill v. Illinois Civil Service Com. (1978), 58 Ill. App. 3d 291, 292.

We agree with the appellate court decisions finding that the question of whether cause for discharge exists should be determined by the administrative agency. We therefore hold that the agency’s decision as to cause will not be reversed unless it is arbitrary, unreasonable, or unrelated to the requirements of service. See DeGrazio v. Civil Service Com. (1964), 31 Ill. 2d 482, 489.

As stated earlier, the Commission, upon full review of the discharge hearing, which involved testimony of many witnesses, found that defendant’s actions were not calculated but occurred in reaction to a patient’s attack on him. The Commission also found that, prior to this incident, in his tenure of employment beginning July 21, 1976, defendant’s performance met expectations. In light of all the surrounding circumstances, the Commission concluded that defendant’s conduct did not constitute sufficient cause for discharge. From our review of the record, we cannot say that, by imposing the maximum suspension allowed by statute rather than discharge, the Commission’s decision was arbitrary, unreasonable, or unrelated to the requirements of the service.

For the above-stated reasons, the judgments of the appellate and circuit courts are reversed and the order of the Commission is reinstated.

Judgments reversed; order affirmed.

MR. JUSTICE WARD,

dissenting:

I respectfully disagree with the conclusion of the majority. I would affirm the judgments of the circuit and appellate courts, which upheld the position of the Department of Mental Health and Departmental Disabilities that the misconduct here constitutes cause for discharge.

The Department is responsible for the treatment of mentally ill persons, who require and have a right to society’s understanding care. The Department is best informed as to the qualifications for those personnel to whom the welfare of these patients is entrusted. It deemed that discharge here would be necessary because of the character of the misconduct and possibly because only that sanction would be an effective deterrent against similar mistreatment of patients. I consider that the Commission’s disposition did not adequately relate to the sensitive requirements for proper care of the mentally ill.

In another setting, a lesser sanction could be appropriate. I do not, however, think that the continued employment of an attendant whose loss of self-control lead him to punch and kick a mental patient who was under restraint can be condoned.