author: JUSTICE UNDERWOOD

text:
    (No. 56733.
    JOSIE STARKEY, Appellee, v. THE CIVIL SERVICE COMMISSION et.al., Appellants.

      Opinion filed June 9, 1983.

    Rehearing denied September 30, 1983.

      Tyrone C. Fahner and Neil F. Hartigan, Attorneys General, of Springfield (Karen Konieczny, Assistant Attorney General, of Chicago, of counsel), for appellant.
    Gerald A. Goldman, of Gerald A. Goldman, Chartered, of Chicago (Benjamin P. Hyink, of counsel), for appellee.
   JUSTICE UNDERWOOD

delivered the opinion of the court:

Plaintiff, Josie Starkey, an unemployment insurance claims supervisor for the Illinois Department of Labor (Department), was discharged on July 6, 1979, for allegedly “establishing” a fraudulent claim for her mother, Lillie McCoy. Following a hearing, the Civil Service Commission’s hearing officer recommended that respondent be retained. •That recommendation was rejected by the Commission, which found that the charges against respondent had been proved. Pursuant to a complaint for administrative review (Ill. Rev. Stat. 1979, ch. 110, par. 267), the circuit court of Cook County affirmed the Commission’s decision. A divided appellate court reversed (105 Ill. App. 3d 904), and we allowed the State’s petition for leave to appeal.

The original charges filed against plaintiff on June 15, 1979, stated that she was suspended pending discharge for conduct unbecoming a State employee. Specifically, she was charged with improperly establishing a Special Unemployment Assistance (SUA) claim for Lillie McCoy “by entering an affidavit of wages from an employer for whom Lillie L. McCoy had not worked during the base period.” Further it was stated that, based upon the fraudulently declared wages shown in the claim, eight benefit checks totaling $2,028 were issued to Mrs. McCoy. On July 2, plaintiff was personally served with notice that she was discharged, effective July 6. The written charges previously referred to had been approved by the Director of the Department of Personnel, and plaintiff was advised of her right to be heard in her own defense. The charges were accompanied by a summary of an investigative report advising plaintiff of the outcome of the Department’s internal investigation. The specific discrepancies and the false information contained in the McCoy application, which respondent was charged with preparing, were outlined, and the report concluded with the following: “An unsigned application with false statements supported by unverified wages is a false claim. A false claim prepared by [a Department] employee for friends or family is fraud.”

On July 13 plaintiff requested a hearing pursuant to section 11 of the Personnel Code (Ill. Rev. Stat. 1979, ch. 127, par. 63blll). At the commencement of the August 6 hearing the State moved to orally amend the charges in two respects: to change the language that plaintiff established an improper claim “by entering an affidavit of wages” to read “by causing to be entered an affidavit of wages,” and to change .the total number of checks received by the mother from eight to 13. Plaintiff’s counsel objected, but declined a proffered continuance for any necessary further investigation, and the hearing officer allowed the amendment.

The evidence presented at the hearing included the testimony of plaintiff’s immediate supervisor, two officers of the Illinois Department of Law Enforcement, a supervisor for the Department’s internal investigations section, the evidence depositions of Mabel and William Holmquist and Julian Johnson, employers for whom the mother had previously worked, the testimony of the mother, and several exhibits; plaintiff testified in her own behalf. The testimony of each witness need not be detailed here for the purpose of establishing that Mrs. McCoy, a domestic worker, fraudulently received unemployment benefits totaling over $2,000, for that fact is undisputed. Her application for benefits, which was admittedly prepared in part by plaintiff, contained false information and was necessary to initiate the process which resulted in the fraud. Mrs. McCoy had not been employed by the named employer, Holmquist, for several years, and while she may have worked sporadically for another family, the Johnsons, during the 1976 period in question, it is conceded here that she clearly did not earn a salary which would have entitled her to any unemployment benefits. In fact, while she did not produce pay stubs or income tax returns although ordered by subpoena to do so, Mrs. McCoy admitted that she reported no personal income on her tax return, filed jointly with her husband, for the year 1976 or the previous year. In addition to the false employer and wage information submitted to the State, a dependent was falsely claimed, resulting in over $500 in increased benefits.

The front side of the application, which was ordinarily prepared by a claims examiner, was dated September 10, 1976, and listed “H. Holnquist,” Waukegan, Illinois, as Mrs. McCoy’s last employer; a dash appeared in place of a street address. A dash was also used in place of the claimant’s signature. It appeared that the name “W Holmquist” was originally written as last employer and erased. The date of the benefit year was listed as August 29, 1976. It appeared that a different date was originally written and also erased. The claim was identified as a “new” SUA claim, and Mrs. McCoy was declared eligible. One dependent was listed, and several office codes were marked. At the bottom of the application, the erased initials “J.S.T.” and the date September 10, 1976, were discernible. The initials “M.B.” and the date September 13 appeared below the erasure. The reverse side of the application, which requested eligibility information from the claimant as well as her signature, was not completed.

In addition to an application, a claimant was required to submit an affidavit of wages, together with documentary verification. No affidavit from the mother could be located by the investigators; however, the computer printout, contained in the record, indicates that the affidavit represented that she earned $1,997 during the 1976 period from “H. Holnquist.” Based upon the wage information submitted by the claimant, the Department’s policy was to send a verification letter to the employer; if there was no response, the claimant would receive benefits. In this case, since the employer’s street address was not listed, the verification letter would have been undeliverable; the misspelled employer name and incorrect initial, together with the incomplete Waukegan address, virtually guaranteed that a verification letter would not have reached either Mabel or William Holmquist.

The dispositive question concerning the propriety of plaintiff’s discharge was the extent of her participation, if any, in her mother’s fraudulent claim. The Commission essentially rejected plaintiff’s testimony concerning her non-involvement in the fraud and determined that the charges had been proved. The statutory directive provides that “[t]he findings and conclusions of the administrative agency on questions of fact shall be held to be prima facie true and correct” (Ill. Rev. Stat. 1979, ch. 110, par. 274), and, as we have recently reiterated, the standard of review is whether the Commission’s findings of fact are contrary to the manifest weight of the evidence and whether they provide a sufficient basis for the Commission’s decision that cause for discharge does or does not exist. (Sutton v. Civil Service Com. (1982), 91 Ill. 2d 404, 409; Department of Mental Health & Developmental Disabilities v. Civil Service Com. (1981), 85 Ill. 2d 547, 550.) Our review of the full record convinces us that the Commission’s findings are not against the manifest weight of the evidence, provide sufficient cause for discharge, and must therefore be affirmed.

While there was ho direct evidence indicating that plaintiff actually prepared and approved the fraudulent affidavit of wages for her mother, it is clear that the initial application for benefits contained false information and apparently intentional discrepancies. The information contained therein was necessary to process the claim and was used in part to generate the affidavit of wages and to activate the computer. The mother testified that her daughter prepared her application, a fact which could have resulted in some type of disciplinary action even if the claim had been legitimate, since there was a departmental policy which prohibited employees from processing claims for relatives. Indeed, plaintiff’s supervisor testified that he received a 29-day suspension for processing a claim for a relative who was in fact eligible for benefits.

It is apparently plaintiffs position that another employee, Marilyn Blye, whom the mother testified she had known for several years, actually completed the mother’s claim. Although the State subpoenaed Marilyn Blye to testify at the discharge hearing, she did not appear. She was apparently under indictment in connection with the processing of fraudulent claims. During the initial investigation by the Department in 1977 of employees at the Waukegan office, Marilyn Blye had implicated plaintiff in the McCoy fraud. Two officers, testifying at the hearing, related that Marilyn Blye had stated that plaintiff explained to her the process by which benefits could be obtained by using a false employer and incomplete information, and that plaintiff had brought her mother’s application to Marilyn Blye, who was working at the cómputer terminal, to process. According to the officers, it was Marilyn Blye’s recollection that plaintiff had told her that her mother had not been employed as listed on the application.

Plaintiff testified at the hearing that she only partially completed the application for her mother, to whom, she said, she spoke nearly every day of her life. She did so from her personal knowledge, and, in fact, had advised her mother to apply for benefits for which she told her she was eligible. As claims manager, she did not ordinarily process applications; however, she began the process for her mother to expedite the initial stage and avoid having her mother wait in line. Plaintiff denied placing and erasing her initials at the bottom of the application, explaining that it was the claim examiner’s responsibility to sign the application. She similarly denied that she declared one dependent for her mother, and she did not recall erasing the correct spelling of the name Holmquist. She admitted that she identified her mother’s last employer as “H. Holnquist,” whom, she stated, she knew to be her mother’s employer during the relevant time period as well as several previous years. The initial “H.”, she said, referred to Helen. In fact, plaintiff testified that she, too, worked for the Holmquists during 1976, although she did not know their street address at the time she prepared the application. She indicated that she was not aware of the rule prohibiting employees from processing claims for relatives, stating that most employees had done so, including her immediate supervisor. She denied making any incriminating statements to Marilyn Blye, who, she stated, did not know her mother. She testified that she did not prepare an affidavit of wages for her mother or further participate in the process.

We are of the opinion that there is ample evidence in the record to sustain the Commission’s findings without regard to Marilyn Blye’s statements, which plaintiff complains were unsworn and un-cross-examined hearsay. Despite her denial, the record clearly shows that plaintiff prepared her mother’s fraudulent application, and the Commission’s determination that her defense that she did so innocently was not credible is not against the manifest weight of the evidence. As we have related, plaintiff’s testimony was fraught with inconsistencies and, in some instances, incompatible with that of her mother. The Commission was thus fully justified in rejecting the proposition that plaintiff, “an experienced employee, could have by innocent happenstance processed a fraudulent claim for her mother.” Further, plaintiff admitted identifying an employer for whom, the record shows, her mother had not worked for several years. Plaintiff’s testimony that she listed “H. Holnquist,” with the first name referring to Helen, and the last date employed as August 29, 1976, from her own personal knowledge is simply inexplicable as counsel conceded on oral argument.

Plaintiff argues-here that the Commission acted arbitrarily in rejecting the hearing officer’s finding that plaintiff’s testimony was credible. The appellate court majority had agreed, holding that the Commission’s action, based only upon a review of the transcript, denied plaintiff a full and fair hearing. That holding is difficult to understand in view of this court’s decision in Homefinders, Inc. v. City of Evanston (1976), 65 Ill. 2d 115, 128-29, and other cases which are virtually dispositive of this contention.

In Homefinders, Inc., this court reviewed the relevant Supreme Court and other Federal decisions and stated that those “decisions have consistently recognized that, in the absence of statutory provisions to the contrary, it is not necessary that testimony in administrative proceedings be taken before the same officers who have the ultimate decision-making authority. [Citations.] *** [A]dministrative proceedings may be conducted by hearing officers who refer the case for final determination to a board which has not ‘heard’ the evidence in person. The requirements of due process are met if the decision-making board considers the evidence contained in the report of proceedings before the hearing officer and bases its determination thereon. [Citations.]” (65 Ill. 2d 115, 128; see also Stojanoff v. Department of Registration & Education (1980), 79 Ill. 2d 394, 397.) It is thus clear that where, as here, the ultimate decision-making authority regarding employee discipline more serious than a 30-day suspension is vested in the Civil Service Commission (Ill. Rev. Stat. 1979, ch. 127, pars. 63b110, 63b111), and its decision is based upon a review of the evidence presented to the hearing officer, there is no due process or statutory impediment. The Commission may appoint a hearing officer or board to conduct the hearing and investigation. The Commission’s finding and decision or the approval by the Commission of the finding and decision of the hearing officer is to be rendered within 60 days after the receipt of the transcript of proceedings (Ill. Rev. Stat. 1979, ch. 127, par. 63b111), but there is no requirement, as plaintiff suggests, that the Commission rehear the evidence in order to reject its officer’s findings and recommendations. In an analogous context this court has consistently held that questions of fact are within the province of the Industrial Commission, which has original jurisdiction in the workmen’s compensation area, and regardless of whether the Commission hears additional evidence, it is not bound to accept the findings of the arbitrator; whether or not it disagrees with the arbitrator, the Commission’s findings will not be disturbed on review unless contrary to the manifest weight of the evidence. (E.g., Zarley v. Industrial Com. (1981), 84 Ill. 2d 380, 386, and cases cited therein; Luby v. Industrial Com. (1980), 82 Ill. 2d 353, 363, and cases cited therein; Scuderi v. Industrial Com. (1978), 73 Ill. 2d 277, 281.) As we stated earlier, the court’s scope of review of an administrative agency’s findings of fact regarding discharge is whether the administrative agency’s findings are contrary to the manifest weight of the evidence (Department of Mental Health & Developmental Disabilities v. Civil Service Com. (1981), 85 Ill. 2d 547, 550); the Commission’s findings here clearly were not, and no argument is made that these findings do not provide sufficient cause for discharge.

Plaintiff also argues, citing Pye v. Marco (1973), 13 Ill. App. 3d 923, that she was entitled to a hearing prior to her discharge. The statute provides:

“No officer or employee under jurisdiction B, relating to merit and fitness, who has been appointed under the rules and after examination, shall be removed or discharged, demoted or suspended for a period of more than 30 days, except for cause, upon written charges approved by the Director of Personnel, and after an opportunity to be heard in his own defense if he makes written request to the Commission within 15 days after the serving of the written charges upon him.” (Ill. Rev. Stat. 1979, ch. 127, par. 63b111.)

While we have not previously construed the above statutory requirements relating to discharged employees, in Powell v. Jones (1973), 56 Ill. 2d 70, the court did discuss the various procedural protections accorded discharged and laid-off employees. Powell held that due process does not require a plenary prelayoff hearing with the right to counsel, witnesses, confrontation and cross-examination. Noting the qualitative differences between a discharge and a layoff, the court considered that the laid-off employee’s right to request reconsideration, request demotion, and request a Commission hearing satisfied due process standards. With respect to the applicable rules and statutes, the court stated: “While the rules [governing laid-off employees] are confusing in that they provide for reconsideration and appeal within the same 15 days, it is clear that an individual is not entitled to remain at his employment and receive compensation until his petitions are acted upon. The pattern envisaged by the statute affords the discharged employee 15 days within which to request a hearing and specifically provides, in the case of reinstatement, for reimbursement for salary lost subsequent to the effective date of the discharge. [Citations.] A laid-off employee is obviously not entitled to any greater protection.” 56 Ill. 2d 70, 81.

Following Powell, our appellate court considered directly the question here raised and held that neither due process nor the statutory provisions of our Personnel Code prohibited removing an employee charged with misconduct or incompetence, pending a discharge hearing. (Haverly v. Boys (1979), 77 Ill. App. 3d 312; accord Lee v. Illinois Racing Board Laboratory (1980), 87 Ill. App. 3d 667; see also Hoban v. Rochford (1979), 73 Ill. App. 3d 671; People ex rel. Cotter v. Conlisk (1974), 17 Ill. App. 3d 346; McReynolds v. Civil Service Com. (1974), 18 Ill. App. 3d 1062.) We agree. As the Haverly court recognized, the Supreme Court, in Arnett v. Kennedy (1974), 416 U.S. 134, 40 L. Ed. 2d 15, 94 S. Ct. 1633, rejected the proposition that due process required that nonprobationary Federal employees discharged for cause be accorded an evidentiary hearing before removal. In a concurring opinion, Justice Powell noted that resolution of the due process question depended on balancing the government’s interest in expeditious removal of an unsatisfactory employee against the interest of the employee in continued public employment. Since the employee was entitled to reinstatement and backpay if, following the later evidentiary hearing, he prevailed on the merits, his actual injury was limited to a temporary interruption of income. In contrast, “[prolonged retention of a disruptive or otherwise unsatisfactory employee can adversely affect discipline and morale in the work place, foster disharmony, and ultimately impair the efficiency of an office or agency. Moreover, a requirement of a prior evidentiary hearing would impose additional administrative costs, create delay, and deter warranted discharges. Thus, the Government’s interest in being able to act expeditiously to remove an unsatisfactory employee is substantial.” 416 U.S. 134, 168, 40 L. Ed. 2d 15, 41, 94 S. Ct. 1633, 1651 (Powell, J., concurring in part).

Our statute provides for notice, written charges, a plenary hearing with counsel as a matter of right, and reinstatement and full compensation for an employee who was suspended, discharged or improperly laid off. (Ill. Rev. Stat. 1979, ch. 127, pars. 63b111, 63b111b.) We agree with the appellate court that the statutory provisions evince a “legislative intent and authority for separating from the work force an employee charged with misconduct or incompetence, with the understanding that he be granted full compensation and benefits that he would have earned during the suspension and discharge period should he be reinstated” (Haverly v Boys (1979), 77 Ill. App. 3d 312, 318-19), and that the time limitations insure the suspended or discharged employee a speedy adjudication of the disciplinary charges.

Plaintiff’s final argument that the Commission’s decision is void because the amended charges were not approved by the Director of the Department of Personnel is without merit. Plaintiff was served with approved written charges which detailed the extent of her alleged wrongdoing. She declined the opportunity for a continuance when notified of the State’s intention to amend by changing only slightly the language contained in the notice of charges, and did not object for the reason now advanced. The modification was insubstantial, and it is apparent that plaintiff suffered no prejudice therefrom.

For the reasons stated, the appellate court’s judgment is reversed; the circuit court’s judgment affirming the Commission’s discharge order is affirmed.

Appellate court reversed; circuit court affirmed.


source: Caselaw Access Project

author: JUSTICE MORAN

license: Public Domain

text:
    (No. 56306.
    JACK A. CONEY, Adm’r, Appellee, v. J. L. G. INDUSTRIES, INC., Appellant.

      Opinion filed May 18, 1983.
    Modified on denial of rehearing September 30, 1983.

      Cassidy & Mueller, of Peoria (David B. Mueller and David E Buysse, of counsel), for appellant.
    Richard L. Steagall and John P. Nicoara, of Peoria, for appellee.
    Kiesler & Berman, of Chicago (Robert L. Kiesler and Lyle F. Koester, of counsel), for amicus curióte Chicago Park District.
    Abramson & Pox, of Chicago (John E. Guy, of counsel), for amicus curiae Illinois Defense Counsel.
    John Bernard Cashion, George M. Elsener, and William J. Harte, Ltd., all of Chicago, for amicus curiae Illinois Trial Lawyers Association.

      Phelan, Pope & John, Ltd., of Chicago (Michael A. Pope, Peter C. John, Mary Patricia Benz, and Suzanne M. Metzel, of counsel), for amicus curiae Commonwealth Edison Company.
    Baker & McKenzie, of Chicago (Francis D. Morrissey, Thomas F. Tobin, John T. Coleman, and J. Kent Mathewson, of counsel), for amicus curia¡e Motor Vehicle Manufacturers Association of the United States, Inc.
   JUSTICE MORAN

delivered the opinion of the court:

Clifford M. Jasper died as a result of injuries sustained on January 24, 1978, whñe operating a hydraulic aerial work platform manufactured by defendant, J. L. G. Industries, Inc. Plaintiff, Jack A. Coney, administrator of Jasper’s estate, filed a two-count complaint in the circuit court of Peoria County under the wrongful death and survival acts (Ill. Rev. Stat. 1977, ch. 70, par. 1 et seq., ch.1 IIOV2, par. 27 — 6) based on a strict products liability theory. Defendant filed two affirmative defenses. The first asserted that Jasper was guilty of comparative negligence or fault in his operation of the platform. The second contended that Jasper’s employer, V. Jobst & Sons, Inc., was also guilty of comparative negligence in failing to instruct and train Jasper on the operation of the platform and by failing to provide a “groundman.” In these defenses, defendant requested that its fault, if any, be compared to the total fault of all parties and any judgment against defendant reflect only its percentage of the overall liability, i.e., that defendant not be held jointly and severally liable.

On plaintiff’s motion, the trial court struck the defenses, but it certified three questions for appeal pursuant to Supreme Court Rule 308 (73 Ill. 2d R. 308). In an unpublished order, the appellate court denied defendant’s application for leave to appeal, indicating the short record supplied did not provide sufficient facts to allow proper consideration of the policy questions involved. We allowed defendant leave to appeal.

The three certified questions are:

“Whether the doctrine of comparative negligence or fault is applicable to actions or claims seeking recovery-under products liability or strict liability in tort theories?
Whether the doctrine of comparative negligence or fault eliminates joint and several liability?
Whether the retention of joint and several liability in a system of comparative negligence or fault denies defendants equal protection of the laws in violation of U.S. Const. Amend. XIV, §1 and Ill. Const. 1970, §2 as to causes of action arising on or after [sic] March 1, 1978. (Ill. Rev. Stat. 1979, ch.70, §301 et seq.)T’

I

COMPARATIVE FAULT AND STRICT LIABILITY

In Suvada v. White Motor Co. (1965), 32 Ill. 2d 612, this court eliminated the need for privily of contract or proving the negligence of the manufacturer and instead imposed strict liability in tort as set out in Restatement (Second) of Torts section 402A (1965):

“(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if
(a) the seller is engaged in the business of selling such a product, and
(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.
(2) The rule stated in Subsection (1) applies although
(a) the seller has exercised all possible care in the preparation and sale of his product, and
(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.”

In adopting strict liability in tort, this court said:

“[P]ublic interest in human life and health, the invitations and solicitations to purchase the product and the justice of imposing the loss on the one creating the risk and reaping the profit are present and as compelling in cases involving motor vehicles and other products, where the defective condition makes them unreasonably dangerous to the user, as they are in food cases.” 32 Ill. 2d 612, 619.

But imposition of strict liability was not meant to make the manufacturer an absolute insurer. (Liberty Mutual Insurance Co. v. Williams Machine & Tool Co. (1975), 62 Ill. 2d 77, 85; Suvada v. White Motor Co. (1965), 32 Ill. 2d 612, 623.) The plaintiff must prove that the injury or damage resulted, from the condition of the product, that the condition was an unreasonably dangerous one, and that the condition existed at the time the product left the manufacturer’s control. (Woodill v. Parke Davis & Co. (1980), 79 Ill. 2d 26, 31; Rios v. Niagara Machine & Tool Works (1974), 59 Ill. 2d 79, 83; Suvada v. White Motor Co. (1965), 32 Ill. 2d 612, 623.) Moreover, the court has heretofore followed the reasoning of the Restatement concerning the available defenses to a strict liability, action. It has been held that a manufacturer can assert a user’s negligence as a complete bar to recovery when it rises to the level of misuse of the product, or assumption of the risk; but contributory negligence is not a defense. Liberty Mutual Insurance Co. v. Williams Machine & Tool Co. (1975), 62 Ill. 2d 77, 81; Williams v. Brown Manufacturing Co. (1970), 45 Ill. 2d 418; Restatement (Second) of Torts sec. 402A, comment n (1965).

Traditionally in negligence actions, however, any contributory negligence by the plaintiff was an absolute defense which barred recovery. (Mueller v. Sangamo Construction Co. (1975), 61 Ill. 2d 441, 446; Maki v. Frelk (1968), 40 Ill. 2d 193, 195.) In response to the harshness of this doctrine, the court adopted comparative negligence in Alvis v. Ribar (1981), 85 Ill. 2d 1, and indicated that this concept produced “a more just and socially desirable distribution of loss” and was “demanded by today’s society.” (85 Ill. 2d 1, 17.) In Alvis, we adopted the “pure” form of comparative negligence, reasoning that it “is the only system which truly apportions damages according to the relative fault of the parties and, thus, achieves total justice.” 85 Ill. 2d 1, 27.

In the instant case, defendant argues that Alvis requires the adoption of a comparative fault system in strict products liability cases. Defendant maintains “total justice” can only be achieved where the relative fault of all the parties is considered in apportioning damages. To illustrate its argument, defendant points to the anomalous situation where, in a single case with alternate counts of negligence and strict liability, the identical conduct by the plaintiff which amounts to an assumption of the risk will completely bar recovery in the strict liability count, yet, as a result of Alvis, will only reduce his award under the negligence count. Moreover, if the plaintiff is only contributorily negligent, he recovers all his damages under strict liability, but his recovery is diminished under the negligence count. Defendant argues that common sense mandates an approach which is consistent in its treatment of all the parties to an action, whether founded on common law negligence or strict liability.

We are not the first to consider the impact of comparative negligence upon strict liability. Some jurisdictions have declined to apply comparative negligence or fault principles in strict liability actions:

Colorado Kinard v. Coats Co. (1976), 37 Colo. App. 555, 553 P.2d 835; but see Colo. Rev. Stat. sec. 13—21—406 (Supp. 1982), as interpreted in Welch v. F. R. Stokes, Inc. (D. Colo. 1983), 555 F. Supp. 1054.

Nebraska Melia v. Ford Motor Co. (8th Cir. 1976), 534 F.2d 795 (applying Nebraska law).

Oklahoma Kirkland v. General Motors Corp. (Okla. 1974), 521 P.2d 1353 (comparative negligence statute not applicable to products liability).

Rhode Island Roy v. Star Chopper Co. (1st Cir. 1978), 584 F.2d 1124, cert. denied (1979), 440 U.S. 916, 59 L. Ed. 2d 466, 99 S. Ct. 1234 (applying Rhode Island law).

South Dakota Smith v. Smith (S.D. 1979), 278 N.W.2d 155.

The vast majority, though, have found comparative negligence theory applicable in strict liability cases.

Alaska Butaud v. Suburban Marine & Sporting Goods, Inc. (Alaska 1976), 555 P.2d 42.

Arkansas Ark. Stat. Ann. secs. 27—1763 to 27—1765 (1979).

California Daly v. General Motors Corp. (1978), 20 Cal. 3d 725, 575 P.2d 1162, 144 Cal. Rptr. 380.

Florida West v. Caterpillar Tractor Co. (Fla. 1976), 336 So. 2d 80.

Idaho Sun Valley Airlines, Inc. v. Avco-Lycoming Corp. (D. Idaho 1976), 411 F. Supp. 598 (applying Idaho law).

Kansas Kennedy v. City of Sawyer (1980), 228 Kan. 439, 618 P.2d 788.

Maine Me. Rev. Stat. tit. 14, sec. 156 (1964).

Michigan Mich. Comp. Laws Ann. sec 600.2949 (Supp. 1982).

Minnesota Busch v. Busch Construction, Inc. (Minn. 1977), 262 N.W.2d 377.

Mississippi Edwards v. Sears, Roebuck & Co. (5th Cir. 1975), 512 F.2d 276 (applying Mississippi law).

Montana Zahrte v. Sturm, Ruger & Co. (D. Mont. 1980), 498 F. Supp. 389 (stating Montana law).

New Hampshire Reid v. Spadone Machine Co. (1979), 119 N.H. 457, 404 A.2d 1094; Thibault v. Sears, Roebuck & Co. (1978), 118 N.H. 802, 395 A.2d 843.

New Jersey Suter v. San Angelo Foundry & Machine Co. (1979), 81 N.J. 150, 406 A.2d 140.

New York N.Y. Civ. Prac. Law sec. 1411 (McKinney 1976).

Oregon Wilson v. B. F. Goodrich (1982), 292 Or. 626, 642 P.2d 644; Baccelleri v. Hyster Co. (1979), 287 Or. 3, 597 P.2d 351.

Utah Mulherin v. Ingersoll-Rand Co. (Utah 1981), 628 P.2d 1301.

Washington Wash. Rev. Code Ann. secs. 4.22.005 to 4.22.015 (Supp. 1982).

Wisconsin Dippel v. Sciano (1967), 37 Wis. 2d 443,155 N.W.2d 55.

In the case at bar, plaintiff argues that applying comparative fault principles in strict liability actions would raise the conduct of the product user to a position equal to that of the manufacturer in regard to the prevention of injury; and that it would thereby give undue advantage to the manufacturer. The Illinois Trial Lawyers Association, in their amicus curiae brief, assert that comparative fault applied in this instance would undermine the policy basis that led to the imposition of strict liability. Further, they argue that reducing a plaintiff’s recovery according to his fault would lessen the manufacturer’s incentive to design and market a defect-free, safe product. As authority for their position, plaintiff and amicus curiae rely primarily on Smith v. Smith (S.D. 1979), 278 N.W.2d 155, Seay v. Chrysler Corp. (1980), 93 Wash. 2d 319, 609 P.2d 1382, Kinard v. Coats Co. (1976), 37 Colo. App. 555, 553 P.2d 835, and the dissenting opinions in Daly v. General Motors Corp. (1978), 20 Cal. 3d 725, 575 P.2d 1162, 144 Cal. Rptr. 380. We find this authority unpersuasive.

In Smith v. Smith (S.D. 1979), 278 N.W.2d 155, the issue before the court was which defenses were available to a manufacturer in a strict products liability action. Following the traditional analysis set out in section 402A, comment n of the Restatement, the court held that contributory negligence was not a defense, but misuse and assumption of the risk would bar recovery. In a footnote, without extended discussion, the court summarily rejected applying comparative fault principles, indicating it would negate the underlying basis of strict liability and present unworkable problems for the jury.

In Kinard v. Coats Co. (1976), 37 Colo. App. 555, 553 P.2d 835, the court refused to extend the concept of comparative fault found in the Colorado comparative negligence statute (Colo. Rev. Stat. sec. 13 — 21—111 (1973)) to actions sounding in strict liability. However, the recent enactment of a comparative fault provision in Colorado’s product liability statute (Colo. Rev. Stat. sec. 13 — 21—406 (Supp. 1982)) renders this case of little precedential value to the issue at bar. See Welch v. F. R. Stokes, Inc. (D. Colo. 1983), 555 F. Supp. 1054.

Similarly, the court in Seay v. Chrysler Corp. (1980), 93 Wash. 2d 319, 609 P.2d 1382, held that the Washington comparative negligence statute did not apply to strict liability cases. A recent Washington statute, however, has been interpreted as mandating that comparative fault be applied in strict liability cases as a damage-reducing factor. See South v. A. B. Chance Co. (1981), 96 Wash. 2d 439, 635 P.2d 728.

We believe that application of comparative fault principles in strict products liability actions would not frustrate this court’s fundamental reasons for adopting strict products liability as set out in Suvada. The plaintiff will still be relieved of the proof problems associated with negligence and warranty actions. Privity and a manufacturer’s negligence continue to be irrelevant. Nor would comparative fault lessen the manufacturer’s duty to produce reasonably safe products. The manufacturer’s liability remains strict; only its responsibility for damages is lessened by the extent the trier of fact finds the consumer’s conduct contributed to the injuries. Daly v. General Motors Corp. (1978), 20 Cal. 3d 725, 575 P.2d 1162, 144 Cal. Rptr. 380.

Further, the risk associated with the product defect is still spread among all consumers. Only that portion due to plaintiff’s own conduct or fault is borne by the plaintiff. Where the allocation of losses properly can be apportioned, we see no reason to spread the cost of the loss resulting from plaintiff’s own fault on to the consuming public. See Daly v. General Motors Corp. (1978), 20 Cal. 3d 725, 737-38, 575 P.2d 1162, 1169, 144 Cal. Rptr. 380, 387; D. Fischer, Products Liability — Applicability of Comparative Negligence, 43 Mo. L. Rev. 431, 433 (1978).

Plaintiff and amicus curiae next argue that the comparison of the plaintiff’s fault with the defendant’s defective product is a comparison of noncomparables, an attempt to compare “apples and oranges,” and that this comparison cannot be applied logically and consistently in strict products liability cases. See Daly v. General Motors Corp. (1978), 20 Cal. 3d 725, 575 P.2d 1162, 144 Cal. Rptr. 380 (Jefferson and Mosk, JJ., dissenting).

Although it appears theoretically difficult to balance the defendant’s strict liability against the user’s negligence, other courts and their juries have been able to do so. In this regard, Professor Schwartz said:

“It is true that the jury might have some difficulty in making the calculation required under comparative negligence when defendant’s responsibility is based on strict liability. Nevertheless, this obstacle is more conceptual than practical. The jury should always be capable, when the plaintiff has been objectively at fault, of taking into account how much bearing that fault had on the amount of damage suffered and of adjusting and reducing the award accordingly. Triers of fact are apparently able to do this, and the benefits from the approach suggest that it be applied in all comparative negligence jurisdictions.” V. Schwartz, Comparative Negligence sec. 12.7, at 208-09 (1974).

A manufacturer is under a nondelegable duty to produce a product which is reasonably safe. (Anderson v. Hyster Co. (1979), 74 Ill. 2d 364, 368; Rios v. Niagara Machine & Tool Works (1974), 59 Ill. 2d 79, 85.) Defendant contends that when a manufacturer breaches this duty and places a defective product on the market, he is at “fault.” Correspondingly, it argues, the plaintiff has a duty to exercise ordinary care in using the product; breach of this duty creates his “fault.” Defendant maintains that these two types of “fault” should not be compared against each other in determining liability. Rather, they should be compared in terms of the causative role each played in producing the total damages sustained. Defendant postulates that once plaintiff has established his prima facie case and after defendant is found strictly liable, then plaintiff’s recovery should be reduced by that amount which his fault contributed to the damages.

The court in Murray v. Fairbanks Morse (3d Cir. 1979), 610 F.2d 149, came to a similar result. The court there said the key conceptual distinction between strict products liability and negligence is that in strict liability the plaintiff need not prove faulty conduct on the part of the defendant in order to recover. The focus is on the condition of the product. In applying comparative negligence to strict products liability, the court stated a direct comparison of the defective product with the plaintiffs negligence is both conceptually and pragmatically inappropriate. “[T]he only conceptual basis for comparison is the causative contribution of each to the particular loss or injury. In apportioning damages we are really asking how much of the injury was caused by the defect in the product versus how much was caused by the plaintiff’s own actions.” 610 F.2d 149, 159. See also Butaud v. Suburban Marine & Sporting Goods, Inc. (Alaska 1976), 555 P.2d 42, 47 (Rabinowitz, J., concurring); Busch v. Busch Construction, Inc. (Minn. 1977), 262 N.W.2d 377; Thibault v. Sears, Roebuck & Co. (1978), 118 N.H. 802, 395 A.2d 843.

In Skinner v. Reed-Prentice Division Package Machinery Co. (1977), 70 Ill. 2d 1, cert. denied (1978), 436 U.S. 946, 56 L. Ed. 2d 787, 98 S. Ct. 2849, this court resolved the issue of contribution between concurrent tortfeasors under the principles of comparative negligence. There it was said that “governing equitable principles require that ultimate liability for plaintiff’s injuries be apportioned on the basis of the relative degree to which the defective product and the employer’s conduct proximately caused them.” 70 Ill. 2d 1, 14.

Similarly, we believe that equitable principles require that the total damages for plaintiff’s injuries be apportioned on the basis of the relative degree to which the defective product and plaintiff’s conduct proximately caused them. Accordingly, we hold that the defense of comparative fault is applicable to strict liability cases.

Amicus curiae argues that, if comparative fault is to be applied in strict products liability cases, we should not reduce a plaintiff’s award if he merely fails to “inspect,” “discover,” or “guard against” a defective product. Butaud v. Suburban Marine & Sporting Goods, Inc. (Alaska 1976), 555 P.2d 42, 46; Busch v. Busch Construction, Inc. (Minn. 1977), 262 N.W.2d 377, 394; Thibault v. Sears, Roebuck & Co. (1978), 118 N.H. 802, 395 A.2d 843; Suter v. San Angelo Foundry & Machine Co. (1979), 81 N.J. 150, 406 A.2d 140.

Following the Restatement, this court, in Williams v. Brown Manufacturing Co. (1970), 45 Ill. 2d 418, adopted misuse and assumption of the risk as complete defenses to a strict products liability action. But, at the same time, it was said there that “[c]ontributory negligence of the plaintiff is not a defense when such negligence consists merely in a failure to discover the defect in the product, or to guard against the possibility of its existence.” (45 Ill. 2d 418, 423.) We adhere to this statement. We believe that a consumer’s unobservant, inattentive, ignorant, or awkward failure to discover or guard against a defect should not be compared as a damage-reducing factor. As the court in West v. Caterpillar Tractor Co. (Fla. 1976), 336 So. 2d 80, 92, said: “The consumer or user is entitled to believe that the product will do the job for which it was built.”

However, the defenses of misuse and assumption of the risk will no longer bar recovery. Instead, such misconduct will be compared in the apportionment of damages. Specifically, we hold: Once defendant’s liability is established, and where both the defective product and plaintiff’s misconduct contribute to cause the damages, the comparative fault principle will operate to reduce plaintiff’s recovery by that amount which the trier of fact finds him at fault.

Thus, the defendant remains strictly hable for the harm caused by its defective product, except for that part caused by the consumer’s own misconduct.

n

JOINT AND SEVERAL LIABILITY

The common law doctrine of joint and several liability holds joint tortfeasors responsible for the plaintiff’s entire injury, allowing plaintiff to pursue all, some, or one of the tortfeasors responsible for his injury for the full amount of the damages. Paul Harris Furniture Co. v. Morse (1956), 10 Ill. 2d 28, 43; Nordhaus v. Vandalia R.R. Co. (1909), 242 Ill. 166, 174; Wabash, St. Louis & Pacific Ry. Co. v. Shacklet (1883), 105 Ill. 364, 381.

Defendant asserts joint and several liability is a corollary of the contributory negligence doctrine. Prior to Alvis, a plaintiff who was guilty of even slight contributory negligence was barred from recovery. Defendant maintains that joint and several liability balanced this inequity by permitting a faultless plaintiff to collect his entire judgment from any defendant who was guilty of even slight negligence. With the adoption of comparative negligence where dam,ages are apportioned according to each party’s fault, defendant argues it is no longer rational to hold a defendant liable beyond his share of the total damages. Defendant relies primarily on a line of cases where joint and several liability was abolished or limited in the course of construing a statutory scheme of liability. Brown v. Keill (1978), 224 Kan. 195, 580 P.2d 867; Laubach v. Morgan (Okla. 1978), 588 P.2d 1071; Howard v. Stafford (1974), 132 Vt. 434, 321 A.2d 74; and Bartlett v. New Mexico Welding Supply, Inc. (1982), 98 N.M. 152, 646 P.2d 579.

The vast majority of jurisdictions, however, which have adopted comparative negligence have retained joint and several liability as a part of their comparative negligence doctrine:

Alaska Arctic Structures, Inc. v. Wedmore (Alaska 1979), 605 P.2d 426.

Arkansas Ark. Stat. Ann. secs. 34—1001 to 34—1009 (1981).

California American Motorcycle Association v. Superior Court (1978), 20 Cal. 3d 578, 578 P.2d 899, 146 Cal. Rptr. 182.

Colorado Colo. Rev. Stat. sec. 13—50.5—103 (1977).

Connecticut Conn. Gen. Stat. Ann. sec. 52—572o (Supp. 1982).

Georgia Gazaway v. Nicholson (1940), 190 Ga. 345, 9 S.E.2d 154.

Idaho Tucker v. Union Oil Co. (1979), 100 Idaho 590, 603 P.2d 156.

Maine Me. Rev. Stat. tit. 14, sec. 156 (1965).

Michigan Conkright v. Ballantyne of Omaha, Inc. (W.D. Mich. 1980), 496 F. Supp. 147.

Minnesota Maday v. Yellow Taxi Co. (Minn. 1981), 311 N.W.2d 849.

Nebraska Royal Indemnity Co. v. Aetna Casualty & Surety Co. (1975), 193 Neb. 752, 229 N.W.2d 183.

New Jersey N.J. Stat. Ann. sec. 2A: 15—5.1 (Supp. 1982).

New York Kelly v. Long Island Lighting Co. (1972), 31 N.Y.2d 25, 286 N.E.2d 241.

North Dakota N.D. Cent. Code sec. 9—10—07 (1973).

Washington Wash. Rev. Code Ann. sec. 4.22.030 (Supp. 1982).

Wisconsin Wisconsin Natural Gas Co. v. Ford, Bacon & Davis Construction Corp. (1980), 96 Wis. 2d 314, 291 N.W.2d 825.

Generally, four reasons have been advanced for retaining joint and several liability:

(1) The feasibility of apportioning fault on a comparative basis does not render an indivisible injury “divisible” for purposes of the joint and several liability rule. A concurrent tortfeasor is liable for the whole of an indivisible injury when his negligence is a proximate cause of that damage. In many instances, the negligence of a concurrent tortfeasor may be sufficient by itself to cause the entire loss. The mere fact that it may be possible to assign some percentage figure to the relative culpability of one negligent defendant as compared to another does not in any way suggest that each defendant’s negligence is not a proximate cause of the entire indivisible injury.
(2) In those instances where the plaintiff is not guilty of negligence, he would be forced to bear a portion of the loss should one of the tortfeasors prove financially unable to satisfy his share of the damages.
(3) Even in cases where a plaintiff is partially at fault, his culpability is not equivalent to that of a defendant. The plaintiff’s negligence relates only to a lack of due care for his own safety while the defendant’s negligence relates to a lack of due care for the safety of others; the latter is tortious, but the former is not.
(4) Elimination of joint and several liability would work a serious and unwarranted deleterious effect on the ability of an injured plaintiff to obtain adequate compensation for his injuries. American Motorcycle Association v. Superior Court (1978), 20 Cal. 3d 578, 578 P.2d 899, 146 Cal. Rptr. 182. See Arctic Structures, Inc. v. Wedmore (Alaska 1979), 605 P.2d 426; Tucker v. Union Oil Co. (1979), 100 Idaho 590, 603 P.2d 156; Seattle First National Bank v. Shoreline Concrete Co. (1978), 91 Wash. 2d 230, 588 P.2d 1308. See also Wisconsin Natural Gas Co. v. Ford, Bacon & Davis Construction Corp. (1980), 96 Wis. 2d 314, 291 N.W.2d 825.

In adopting comparative negligence, this court eliminated the total bar to recovery which a plaintiff had faced under contributory negligence. In return for allowing a negligent plaintiff to recover, this court said fairness requires that a plaintiff’s damages be “reduced by the percentage of fault attributable to him.” (Emphasis added.) (Alvis v. Ribar (1981), 85 Ill. 2d 1, 25.) Were we to eliminate joint and several liability as the defendant advocates, the burden of the insolvent or immune defendant would fall on the plaintiff; in that circumstance, plaintiff’s damages would be reduced beyond the percentage of fault attributable to him. We do not believe the doctrine of comparative negligence requires this further reduction. Nor do we believe this burden is the price plaintiffs must pay for being relieved of the contributory negligence bar. The quid pro quo is the reduction of plaintiff’s damages. What was said in American Motorcycle Association v. Superior Court (1978), 20 Cal. 3d 578, 590, 578 P.2d 899, 906, 146 Cal. Rptr. 182, 189, is applicable here: “[F]aimess dictates that the ‘wronged party should not be deprived of his right to redress,’ *** ‘[t]he wrongdoers should be left to work out between themselves any apportionment.’ ”

Further support for retaining joint and several liability is found in “An Act in relation to contribution among joint tortfeasors” (Act) (Ill. Rev. Stat. 1979, ch. 70, par. 301 et seq.). Although the instant case accrued prior to its effective date, the Act expresses the intent of our legislature concerning joint and several liability:

“Sec. 4. Rights of Plaintiff Unaffected. A plaintiff’s right to recover the' full amount of his judgment from any one or more defendants subject to liability in tort for the same injury to person or property, or for wrongful death, is not affected by the provisions of this Act.” Ill. Rev. Stat. 1979, ch. 70, par. 304.

Moreover, under the Act, it is the defendant or defendants who must bear the burden of the insolvent or immune defendant:

“Sec. 3. Amount of Contribution. The pro rata share of each tortfeasor shall be determined in accordance with his relative culpability. However, no person shall be required to contribute to one seeking contribution an amount greater than his pro rata share unless the obligation of one or more of the joint tortfeasors is uncollectible. In that event, the remaining tortfeasors shall share the unpaid portions of the uncollectible obligation in accordance with their pro rata liability.
If equity requires, the collective liability of some as a group shall constitute a single share.” 111. Rev. Stat. 1979, ch. 70, par. 303.

Defendant concedes that where the plaintiff is free from fault each defendant should still be held jointly and severally liable. It also admits in its reply brief that the Act leaves unaffected the common law doctrine of joint and several liability. Defendant points out, however, that it was subsequent to the enactment of the Act that this court adopted comparative negligence. Now, under Alvis, damages are allocated according to fault. As such, defendant argues, Alvis mandates that a tortfeasor should be liable only to the extent that his negligent acts or omissions produced the damages.

We find nothing in Alvis which mandates either a shift in who shall bear the risk of the insolvent defendant or the elimination of joint and several liability. Defendant has not cited nor have we found persuasive judicial authority for the proposition that comparative negligence compels the abolition of joint and several liability. On the contrary, most jurisdictions which have adopted comparative negligence have retained the doctrine. Therefore, we hold that our adoption of comparative negligence in Alvis does not change the long-standing doctrine of joint and several liability.

ill

EQUAL PROTECTION

Initially, defendant notes that contribution in strict liability actions may be sought from joint tortfeasors only for causes of action arising out of occurrences on or after March 1, 1978 (Ill. Rev. Stat. 1979, ch. 70, par. 301; Skin ner v. Reed-Prentice Division Package Machinery Co. (1977), 70 Ill. 2d 1, 16-17). Here the accident occurred on January 24, 1978. As a result, defendant argues, it runs the risk of bearing not only its proportionate share of plaintiff’s damages, but also the damages attributed to the fault of insolvent, immune, or unjoined tortfeasors. Defendant contends that judicial application of joint and several liability under these circumstances is an arbitrary and invidious discrimination against a class of tortfeasors in violation of the Federal and Illinois constitutional guarantees of equal protection of the laws (U.S. Const., amend. XIV, sec. 1; Ill. Const. 1970, art. I, sec. 2.) Defendant cites no case upholding its position.

Basically, defendant’s argument is directed toward the prospective application of Skinner, wherein the court set forth a new rule of law in strict liability cases. Since the rule was not applied retroactively, so as to include the instant case, defendant reasons it was denied equal protection under the law. Based upon this premise, it argues joint and several liability should be abrogated in cases where comparative fault principles control. We find defendant’s argument to be without merit.

Prospective application of a new doctrine or rule of law does not violate the equal protection of laws under either the Federal or Illinois constitution. (See Great Northern Ry. Co. v. Sunburst Oil & Refining Co. (1932), 287 U.S. 358, 364, 77 L. Ed. 360, 366, 53 S. Ct. 145, 148.) Moreover, Skinner’s prospective rule was adopted to provide a more equitable apportionment of a plaintiff’s losses among concurrent tortfeasors. In our opinion, the operation of this rule is neither arbitrary nor an invidious discrimination.

Further, we question defendant’s standing to raise its constitutional objections in the instant case, where it seeks to apply the holding in Skinner. There, the court had before it a third-party complaint by the manufacturer against the employer setting forth a cause of action for contribution. Here, however, defendant has not filed a third-party complaint. Instead, by way of defense, it attempts to classify the employer as a joint tortfeasor and have the employer’s negligence compared even though it was not joined as a party. In this manner, defendant attempts to circumvent the prospective rule established in Skinner which was codified in “An Act in relation to contribution among joint tortfeasors.” This it cannot do. See Buehler v. Whalen (1977), 70 Ill. 2d 51, 63-64.

The doctrine of joint and several liability like contribution, operates only where two or more persons are subject to liability in tort arising out of the same injury to a plaintiff. (See Ill. Rev. Stat. 1979, ch. 70, par. 302; Paul Harris Furniture Co. v. Morse (1956), 10 Ill. 2d 28, 43.) Such is not the case here, and the doctrine of joint and several liability has no application.

Therefore, in response to the questions posed, we conclude that (1) comparative fault is applicable to strict products liability actions; (2) comparative fault does not eliminate joint and several liability; and (3) retention of joint and several liability does not deny defendants equal protection of the laws.

The order of the circuit court striking the affirmative defenses is affirmed, and the cause is remanded to the circuit court of Peoria County with directions to allow defendant to amend his first defense so as to be consistent with the views expressed herein.

Affirmed and remanded, with directions.


author: JUSTICE GOLDENHERSH

text:
    (No. 57378.

      In re PHILIP HAROLD BIZAR, Attorney, Respondent.

      Opinion filed June 9, 1983.

    Rehearing denied September 30, 1983.

      Charles S. Morgan, of Chicago, for the Administrator of the Attorney Registration and Disciplinary Commission.
    Warren Lupel and Philip H. Bizar, pro se, of Chicago, for respondent.
   JUSTICE GOLDENHERSH

delivered the opinion of the court:

On May 18, 1981, the Administrator of the Attorney Registration and Disciplinary Commission filed a two-count complaint against respondent, Philip Harold Bizar, who was licensed to practice law in Illinois on November 29, 1966, charging him with “the failure to account for the proceeds of a settlement, the failure to preserve the identity of funds and property of a client in violation of Canon 9, DR 9 — 102, of the Illinois Code of Professional Responsibility (1970), the wrongful conversion and commingling of clients’ funds, [and] overreaching,” tending to bring the legal profession into disrepute. A panel of the Hearing Board recommended that respondent be suspended from the practice of law for a period of 18 months and until further order of this court. Both respondent and the Administrator filed exceptions to the report of the Hearing Board. The Review Board found that the Administrator had proved by clear and convincing evidence that respondent had converted and commingled a client’s funds and recommended that respondent be suspended for one year.

The testimony shows that respondent was retained by Robert and Annette Scheid to represent them in a claim for personal injuries arising from an occurrence in Florida in 1978. After receiving an initial settlement offer of $750, which the Scheids rejected, respondent negotiated a settlement in the amount of $7,500. Under his agreement with the Scheids, respondent was entitled to a fee of $2,500. In April 1979 the Scheids executed releases and returned them to the respondent. Respondent then received a draft from an insurance carrier in the full amount of the settlement and deposited it in a “special account.” The “special account” was in the name of the firm in which respondent had been a partner. Although the firm had been dissolved, respondent was using the account to close out some matters. Although the Scheids did not sign the settlement draft, endorsements purporting to be theirs appeared on it.

There was conflicting testimony concerning whether the Scheids had authorized respondent to endorse the draft in their behalf, and also as to subsequent events. Respondent testified that he informed the Scheids in early April 1979 that the settlement check had been received, and that Mr. Seheid agreed to lend respondent $3,000 of the $5,000 to which the Scheids were entitled. Mr. Seheid testified that he was not informed as to receipt of the check until approximately June 1, 1979, and that he agreed to accept less than the full $5,000 immediately because respondent told him that he was having financial difficulties and did not have the funds to pay him the full amount.

On June 6, 1979, respondent forwarded $2,000 of the settlement to the Scheids. On July 25, 1979, respondent executed a demand note for $3,200 payable to the Scheids. This note was not paid, and a second demand note in the amount of $4,400 was executed by respondent on April 14, 1980. The Scheids began receiving $200 monthly payments on the note from respondent, but became dissatisfied with the arrangement. They retained another attorney for the purpose of collecting the unpaid portion of the settlement. On April 1, 1981, a judgment was entered in favor of the Scheids and against respondent in the amount of $4,220.62.

Bank records in evidence show that in early April 1979 the balance in respondent’s “special account” was $35.50, that the $7,500 settlement draft was deposited into that account on April 11, 1979, and that four checks totaling $2,800 were written on the account during the remainder of the month. Checks written on the account by respondent over the next two months were payable to “Cash,” Illinois Bell Telephone Company, Commonwealth Edison, respondent’s secretary, and respondent himself.

,■ Subsequent to the filing of the disciplinary proceeding, respondent and the Scheids appear to have reached an agreement for payment. As of December 8, 1981, the Scheids released the judgment obtained against respondent.

In this court respondent filed exceptions, and after leave given (87 Ill. 2d R. 753(e)), the Administrator also filed exceptions to the report of the Review Board. Respondent contends that the testimony of Robert Seheid was insufficient to prove the misconduct alleged. He argues that it is apparent from its findings that the Hearing Board did not find Mr. Scheid’s testimony to be credible on a number of points. An examination of the findings, however, shows this contention to be without merit. Respondent argues that when two equally credible witnesses (Mr. Scheid and the respondent) have given clearly inconsistent testimony, the party with the burden of proof (the Administrator) has not proved that issue by a preponderance of the evidence. We do not agree. The record contains clear and convincing evidence of respondent’s misconduct.

Respondent contends that the Hearing Board erred in its refusal to permit respondent’s secretary, Ms. Hendricks, to testify to one side of a telephone conversation between Mr. Scheid and respondent. The record shows that the witness could not testify as to an exact time or date of the conversation or who initiated the call. Under these circumstances, we cannot agree with respondent that testimony relating to what the witness heard one party say over the telephone to another, whose identity must be presumed, was competent. Furthermore, respondent made no offer of proof, and the record fails to reflect the content of the proffered testimony.

Respondent contends next that the Administrator failed to prove, by clear and convincing evidence, that respondent commingled his own funds with those of his client in violation of DR 9 — 102 of the Illinois Code of Professional Responsibility, and argues that the evidence of the conduct of the complainants and respondent shows a debtor-creditor relationship. Assuming that, as testified by respondent, complainants agreed to lend respondent $3,000 of the settlement proceeds, the deposit of the entire settlement check in respondent’s account, from which respondent wrote checks to pay various personal expenses, and other checks made out to “Cash,” nevertheless violated DR 9— 102(a), which provided:

“All funds of clients paid to a lawyer or law firm shall be deposited in one or more identifiable bank accounts maintained in the state in which the law office is situated and no funds belonging to the lawyer or law firm shall be deposited therein ***.”

While the rule provides for limited exceptions, it is clear that respondent used his “special account,” into which the settlement draft was deposited, as an operating account, and his clients’ funds should not have been deposited therein. (See In re Kramer (1982), 92 Ill. 2d 305, 310; In re Clayter (1980), 78 Ill. 2d 276, 280-81.) The record supports the finding of the Review Board that it is incredible that the unpaid portion of the settlement was a loan.

Respondent argues that since complainants have now received all the funds to which they were entitled, suspension is unwarranted. Respondent contends that censure is sufficient to protect the integrity of our profession and is in the best interest of the public at large. We cannot agree. It is the risk of the loss of the funds while they are in the attorney’s possession, and not only their actual loss, which the rule is designed to eliminate. (In re Saladino (1978), 71 Ill. 2d 263, 276.) While in the respondent’s checking account which he used for his own expenses, the funds were subject to the claims of creditors and could have been lost to the Scheids permanently.

Absent mitigating factors, conversion of a client’s funds may constitute grounds for disbarment. (In re Stillo (1977), 68 Ill. 2d 49.) In view of the fact that this appears to be respondent’s first violation of the disciplinary rules, that respondent appears to enjoy a good reputation in the community, and that his clients received all the money to which they were entitled, with interest, albeit more than 2V2 years after the date on which it should have been received, suspension appears to be an appropriate sanction.

Respondent is, accordingly, suspended for a period of one year.

Respondent suspended.


author:
JUSTICE GOLDENHERSH
      JUSTICE MORAN, JUSTICE SIMON,

text:
    (No. 56106.
    THE PEOPLE OF THE STATE OF ILLINOIS, Appellant, v. DALE M. CARTER, Appellee.

      Opinion filed December 17, 1982.

    Rehearing denied September 30, 1983.

      Tyrone C. Fahner, Attorney General, of Springfield (Donald Townsend and Greig R. Siedor, Assistant Attorneys General, of counsel), for the People.
    Donald Page Moore and Jo-Anne F. Wolfson, of Chicago, for appellee.
    Joseph C. Long, of Norman, Oklahoma, for amicus curiae North American Securities Administrators, Inc.
   JUSTICE GOLDENHERSH

delivered the opinion of the court:

Following a jury trial in the circuit court of Cook County, defendant, Dale M. Carter, was convicted of violations of the Franchise Disclosure Act (hereafter the Act) (Ill. Rev. Stat. 1977, ch. 1211/2, par. 701 et seq.) and sentenced to three years in the custody of the Department of Corrections. Defendant appealed and the appellate court, holding that section 12 of the Act was unconstitutional (Ill. Rev. Stat. 1977, ch. 1211/2, par. 712), reversed the judgment. (102 Ill. App. 3d 796.) We allowed the People’s petition for leave to appeal as a matter of right. 73 Ill. 2d R. 317.

The facts are adequately stated in the opinion of the appellate court. In a four-count indictment it was charged that defendant, chairman of the board of Pie Tree, Inc., violated various provisions of the Act in the sale of a franchise to Roger Collier. Count I charged the sale of an unregistered franchise, a violation of sections 4(1) and 16 of the Act; count II charged failure to provide Collier with a disclosure document as required by section 4(2) of the Act; count III charged failure to place into escrow the moneys received in the sale, in violation of section 6 of the Act; and count IV charged the failure to register all franchise sale persons, in violation of section 16.1 of the Act.

In pertinent part section 12 provided:

“The [Attorney General] may by rule or order, and subject to such terms and conditions as he may prescribe, exempt any franchise, franchisor, subfranchisor, franchise broker, or salesperson from Sections 4, 16 *** of this Act if he finds that the enforcement of this Act is not necessary in the public interest ***.” (Ill. Rev. Stat. 1977, ch. 1211/2, par. 712.)

The appellate court concluded:

“[T]he phrase ‘in the public interest’ is not an intelligible limitation on the exemption power in the context of an F.D.A. criminal prosecution. Consequently, when considered in conjunction with section 20, section 12 of the F.D.A. is an unconstitutional delegation of legislative power.” 102 Ill. App. 3d 796, 800.

The People contend that the defendant was without standing to attack the validity of the Act. Although this contention is not entirely without merit, we have elected to consider the constitutional question presented. Defendant contends that “in the public interest” is “not an intelligible standard” and that the statute creates an invalid delegation of legislative authority. We do not agree.

This court has enunciated the criteria relevant to examining the validity of a legislative delegation of power to an administrative agency. In Hill v. Relyea (1966), 34 Ill. 2d 552, 555, this court stated:

“Absolute criteria whereby every detail necessary in the enforcement of a law is anticipated need not be established by the General Assembly. The constitution merely requires that intelligible standards be set to guide the agency charged with enforcement [citations], and the precision of the permissible standard must necessarily vary according to the nature of the ultimate objective and the problems involved. [Citations.]”

See also Polich v. Chicago School Finance Authority (1980), 79 Ill. 2d 188, 206; Polyvend, Inc. v. Puckorius (1979), 77 Ill. 2d 287, 300.

We are of the opinion that “in the public interest” is not an improper standard for delegation. In International Ry. Co. v. Public Service Com. (1942), 264 A.D. 506, 36 N.Y.S.2d 125, the Appellate Division of the Supreme Court of New York persuasively refuted defendant’s argument:

“It must be conceded that a criterion of ‘public interest,’ standing alone, presents a standard of immense and varied implications. And if it can only be interpreted as setting up a standard so embracive and indefinite as to confer unlimited power, then, of course, it runs counter to the rule against the complete delegation of legislative power. [Citation.] But in our opinion it need not be and should not be so interpreted. Rather, it should be construed with reference to the general purposes and the subject matter of the [law in question], and if it may be logically found that the criterion of ‘public interest’ is directly related and limited to the general purposes of such law then it is a sufficient guide. [Citations.]” (264 A.D. 506, 510, 36 N.Y.S.2d 125, 131, aff'd (1943), 289 N.Y. 830, 47 N.E.2d 435.)

In American Power & Light Co. v. Securities & Exchange Com. (1946), 329 U.S. 90, 104, 91 L. Ed. 103, 115, 67 S. Ct. 133, 142, the Supreme Court noted that delegation standards should not be tested in isolation because “They derive much meaningful content from the purpose of the Act, its factual background and the statutory context in which they appear.” In Northern Illinois Auto Wreckers & Rebuilders Association v. Dixon (1979), 75 Ill. 2d 53, 61, this court recognized that in order to determine whether a rule promulgated by the Secretary of State was consistent with the “public interest” depended upon the purposes of the pertinent statute.

With respect to the act involved here, the legislative findings and statement of purposes contained in the Act (see Ill. Rev. Stat. 1977, ch. 1211/2, par. 702) make it clear that the purposes of the Act are to protect the investments of people buying franchises and to insure that before entering into a franchise agreement they are fully informed of the franchisor’s financial condition. Section 5 of the Act sets forth the information that must be contained in the disclosure statement which under section 4 of the Act must be provided a purchaser and under section 16 must be filed with the Attorney General. Franchisors whose shares are registered with Securities Commissions and listed on Securities Exchanges are required to furnish statements containing at least as much information as is required under section 5. Where the information is thus readily available through other sources, the Attorney General might find that enforcement of the Act is not necessary. When considered in light of the purposes of the Act the standard “in the public interest” is an intelligible standard which survives constitutional scrutiny.

The delegation here is certainly no broader or more unintelligible than the delegation in Hill v. Relyea (1966), 34 Ill. 2d 552. In Hill, the statute gave the superintendent of the hospital in which a mentally retarded person was being treated the power and authority to discharge patients “as the welfare of such person and the community may require.” (34 Ill. 2d 552, 555.) This court noted that the superintendent of the hospital and his staff were in a much more advantageous position to determine when the welfare of the person and of the community required a discharge of a hospitalized mentally retarded person and that “The nature of the objectives to be achieved and the problems to be solved negate the usefulness of setting more precise legislative standards.” (34 Ill. 2d 552, 556.) Here the expertise and the availability of the information necessary to determine when prospective franchisees do not require the protection of escrowed moneys and financial disclosure statements place the Attorney General in a position to determine when “the enforcement of this Act is not necessary in the public interest” (Ill. Rev. Stat. 1977, ch. 1211/2, par. 712) and negate the desirability of more precise standards.

Defendant contends that the statute, in violation of the equal protection and due process clauses of the United States and Hlinois constitutions, grants the Attorney General “unrestricted future exemption power.” He contends further that delegation to the Attorney General of such unrestricted criminal-exemption power violates the separation of powers clause found in section 1 of article II of the 1970 Constitution. The rules promulgated by the Attorney General pursuant to section 27 of the Franchise Disclosure Act (Ill. Rev. Stat. 1977, ch. 1211/2, par. 727) and in accordance with the Illinois Administrative Procedure Act (Ill. Rev. Stat. 1977, ch. 127, par. 1001 et seq.) provide the procedure for securing an order of exemption. The Hlinois Administrative Procedure Act (Ill. Rev. Stat. 1977, ch. 127, par. 1001 et seq.) provided:

“No action by any agency to adopt, amend or repeal a rule after this Act has become applicable to the agency shall be valid unless taken in compliance with this Section.” (Ill. Rev. Stat. 1977, ch. 127, par. 1005(c).)

Section 5(aXl) of the Hlinois Administrative Procedure Act provided for the giving of notice to the general public, at least 45 days in advance of a rule’s effective date, as to the text of the rule, the statutory authority giving the agency the power to promulgate the rule, and other pertinent information. (Ill. Rev. Stat. 1977, ch. 127, par. 1005(a)(1).) Section 29 of the Franchise Disclosure Act (Ill. Rev. Stat. 1977, ch. 1211/2, par. 729) provided that all final administrative decisions of the administrator are reviewable under the Administrative Review Act. With these safeguards it is difficult to conclude that the Attorney General is vested with either “unrestricted criminal exemption power” or that the statute, as applied, fails to provide either equal protection or due process. Defendant’s contention that the “delegation to the Attorney General of an unrestricted criminal exemption power violates the separation of powers” rests on the erroneous premise that the power is arbitrary and unrestricted. Clearly, the power, as delegated, does not violate the separation of powers.

Defendant contends that the indictment is insufficient in that it fails to charge a criminal offense. Insofar as his challenge is directed to counts I, II and IV it falls with our holding that sections 12 and 20 of the Act are not invalid. The challenge to count III presents a different question.

Count III charges that defendant engaged “in an act, practice or course of business which operated as a fraud and deceipt [sic] upon Roger Collier, in violation of Illinois Revised Stats., 1977, as amended Chapter 12D/2 par. 706. to wit: failing to place the franchise fee paid by Roger Collier in an escrow account as required by the Illinois Attorney General’s Office.” It is defendant’s contention that count III “charges an offense never created by the legislature.” He argues that no statute makes it a crime to fail to do anything “as required by the Illinois Attorney General’s Office.”

Section 11 of the Franchise Disclosure Act (Ill. Rev. Stat. 1977, ch. 121½, par. 711) provides that if the Attorney General finds that a franchisor has failed to demonstrate that adequate financial arrangements have been made to fulfill his obligations he may, by rule or order, require the escrow of franchise fees until the obligations have been fulfilled. Section 11 also provides that at the option of the franchisor a surely bond may be furnished in lieu of the escrow.

In our opinion count III is adequate to charge a violation of section 6, alleging that the device to defraud was the failure to place the franchise fee in an escrow account. Section 6(lXa) of the Act (Ill. Rev. Stat. 1977, ch. 121½, par. 706(1)(a)) provides that it is unlawful to employ any device, scheme or artifice to defraud, and the offense alleged is a violation of section 6(1)(a) based on a requirement contained in section 11. Furthermore, it was clearly adequate to enable the defendant to be fully advised of the nature of the charge and to prepare his defense. (See People v. Pujoue (1975), 61 Ill. 2d 335, 339; People v. Walker (1980), 83 Ill. 2d 306, 313-14.) Any additional information which he might have required could have been obtained by filing a motion for a bill of particulars. We hold that counts I, II, III, and IV of the indictment do not fail to meet the requirements of either the Federal or Elinois constitutions.

Defendant contends that the evidence fails to prove him guilty beyond a reasonable doubt. He argues that there is no showing that the attorney, to whom the Attorney General directed the letter concerning the escrow of funds, received the letter, or that its contents were in any manner communicated to the defendant.

The record shows that all communications with defendant of the Attorney General, as administrator under the Act, were through the attorney, Mr. Beatty. There was no requirement that the Attorney General advise the defendant of the statutory provision or of the rules promulgated under the authority of the statute. The testimony shows that the letter was sent to Mr. Beatty, to whom all correspondence with Pie Tree was to be directed. That fact, when considered with other correspondence in evidence, was sufficient proof that the information concerning the need for the escrow was conveyed to defendant.

As previously noted, the rules provided the method for obtaining an exemption and for administrative review in the event of a denial of an application for such exemption. There is no evidence of any attempt to comply with the statute or in any manner pursue the procedures which would have exempted the defendant from such compliance. We hold that the evidence is sufficient to prove the defendant guilty of the offense charged beyond a reasonable doubt.

Defendant contends that the circuit court erred in the giving of the issues instruction. The record shows that in the conference no question was raised concerning the instruction and that it was given without objection. “[T]he waiver rule does not apply to substantial defects in instructions if the interests of justice require.” (People v. Roberts (1979), 75 Ill. 2d 1, 11.) From our examination of the instructions we conclude that there were no substantial defects and the record presents no plain error and no reason for the application of our rule concerning waiver.

Finally defendant contends that his sentence is excessive. He states that shortly after he was sentenced in this case he was sentenced to a five-year term in Georgia which was to be served concurrently with the sentence imposed in this case. He argues that because he had not as yet been sentenced in Georgia there was no way in which the Illinois sentence could be made concurrent with that in Georgia, and that he will be required to serve a total of eight years on the two commitments. Under the circumstances existing at the time the sentence was imposed it is apparent that there was no basis on which the circuit court could have considered making the sentence concurrent with that in Georgia. There is, however, no impediment to the defendant’s applying to the circuit court for a reduction of sentence in accordance with section 5—8—1(f) of the Unified Code of Corrections (Ill. Rev. Stat. 1981, ch. 38, par. 1005-8-1(f)).

For the reasons herein stated, the judgment of the appellate court is reversed and the judgment of the circuit court of Cook County is affirmed.

Appellate court reversed; circuit court affirmed.

JUSTICE MORAN,

concurring in part and dissenting in part:

I concur in the judgment as to counts I, II and IV but dissent from the results reached as to count III. In my opinion the specific section of the statute under which the defendant was charged in this count is invalid due to vagueness.

The indictment charged defendant with a fraudulent practice in that he wilfully sold a franchise by engaging in an act, practice or course of business which operated as a fraud and deceit, to-wit: failing to place the franchise fee paid by the complainant in an escrow account as required by the Illinois Attorney General’s office.

The Franchise Disclosure Act (Act) provides for both civil and criminal sanctions for violation of its provisions. Section 6(lXc), under which the defendant was indicted in count III, states:

“Fraudulent practices.
(1) It is unlawful for any person, in connection with the offer or sale of any franchise, to directly or indirectly:
(c) Engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.” (Ill. Rev. Stat. 1977, ch. 121½, par. 706(c).)

Anyone found guilty of violating this section commits a Class 4 felony and is subject to imprisonment for a term of one to three years.

The use of the words “fraud or deceit” under section 6(lXc) would, ordinarily, create no problem since they have a well-settled meaning in the common law. But the Act goes further. Section 3(11) states that the words “ ‘Fraud’ and ‘deceit’ are not limited to common law fraud or deceit.” (Ill. Rev. Stat. 1977, ch. 121½, par. 703(11).) Since the words are not limited to their common law meaning, then what are the elements of this new, open-ended crime of “fraud and deceit”? I suggest there are none. Without knowing the elements of a crime, how will a person be able to conform his conduct so as to be within the law?

Over 50 years ago, the United States Supreme Court expressed, better than I, why a penal statute must be explicit, when it stated:

“That the terms of a penal statute creating a new offense must be sufficiently explicit to inform those who are subject to it what conduct on their part will render them liable to its penalties, is a well-recognized requirement, consonant alike with ordinary notions of fair play and the settled rules of law. And a statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application, violates the first essential of due process of law.” Connally v. General Construction Co. (1926), 269 U.S. 385, 391, 70 L. Ed. 322, 328, 46 S. Ct. 126, 127.

For the reasons stated, I would affirm that part of the appellate court judgment reversing the conviction based on count III of the indictment.

JUSTICE SIMON,

dissenting:

The majority upholds section 12 of the Franchise Disclosure Act (Ill. Rev. Stat. 1977, ch. 121½, par. 712), which grants the Hlinois Attorney General the power to exempt individuals from criminal penalties provided in the Act. The Attorney General’s power to grant exemptions is limited only by the highly indefinite requirement that the exemption be “in the public interest.”

This precedent could undermine civil liberties in a time of crisis. The legislation grants the Attorney General the power to create a privileged class that is exempt from the criminal law which the rest of society must obey. At the same time the legislation fails to establish articulable standards for the Attorney General to use in making such a momentous decision.

In reaching its decision the majority principally relies upon precedent arising from civil cases. Given the criminal context of this case, is this reliance not misplaced? I would hold that the public-interest exemption is unconstitutional, violating both equal protection (Ill. Const. 1970, art. I, sec. 2; U.S. Const., amend. XIV, sec. 1) and the nondelegation doctrine (Ill. Const. 1970, art. II, sec. 1, art. IV, sec. 1).

I

Equal protection of the laws: The majority asserts that other courts have approved of the “public interest” standard in many civil contexts and that this court has traditionally applied an extremely deferential scrutiny to legislative classifications in economic-regulatory statutes. In the cases cited by the majority, however, criminal liability never directly hinged upon the “public interest” classification, while in the present case the “public interest” standard determines who is subject to criminal liability and who is exempt.

Because of the criminal context, it is inappropriate to apply in this case the extremely deferential standard of review that this court has used in evaluating the constitutionality of legislative classifications in the field of economic regulation. When a statute grants an executive officer the power- to exempt certain persons from criminal liability, equal protection should require that the legislature clearly and definitely specify under what circumstances the exemption is to apply. Otherwise there is always a danger that the exemption is designed for an illegitimate purpose. Justice Jackson recognized the dangers of arbitrary exemptions from general legislative schemes when he observed:

“[I]t [is] a salutary doctrine that cities, states and the Federal Government must exercise their powers so as not to discriminate between their inhabitants except upon some reasonable differentiation fairly related to the object of regulation. This equality is not merely abstract justice. The framers of the Constitution knew, and we should not forget today, that there is no more effective practical guaranty against arbitrary and unreasonable government than to require that the principles of law which officials would impose upon a minority must be imposed generally. Conversely, nothing opens the door to arbitrary action so effectively as to allow those officials to pick and choose only a few to whom they will apply legislation and thus to escape the political retribution that might be visited upon them if larger numbers were affected. Courts can take no better measure to assure that laws will be just than to require that laws be equal in operation.” Railway Express Agency, Inc. v. New York (1949), 336 U.S. 106, 112-13, 93 L. Ed. 533, 540, 69 S. Ct. 463, 466-67 (Jackson, J., concurring).

To survive analysis under the equal protection clause a statute must have a legitimate purpose. For example, “a bare congressional desire to harm a politically unpopular group” is not a legitimate governmental interest. United States Department of Agriculture v. Moreno (1973), 413 U.S. 528, 534, 37 L. Ed. 2d 782, 788, 93 S. Ct. 2821, 2826.

The majority observes that the purpose of the exemption is evident in the statement of the legislature’s purpose in enacting the Franchise Disclosure Act. But the majority is simply mistaken when it claims that the only purpose of the legislature was to ensure that franchisees receive information about the financial health of the franchisor before they purchase a franchise. Section 2 of the Act clearly sets forth the purpose of the disclosure requirements:

“(1) The General Assembly finds and declares that the widespread sale of franchises is a relatively new business phenomenon which has created numerous problems in Illinois. Illinois residents have suffered substantial losses where the franchisor or his representative has not provided full and complete information regarding the franchisor-franchisee relationship, the details of the contract between the franchisor and franchisee, the prior business experience of the franchisor and other factors relevant to the franchise offered for sale.
(2) It is the intent of this Act: (a) to provide each prospective franchisee with the information necessary to make an intelligent decision regarding franchises being offered for sale; and (b) to protect the franchisee and the franchisor by providing a better understanding of the business and the legal relationship between the franchisor and the franchisee.” (Emphasis added.) (Ill. Rev. Stat. 1977, ch. 121½, par. 702.)

As the emphasized language indicates, the aim of the Act is to ensure that Illinois franchisees have maximum access to information not only about the financial health of the franchisor, but the terms and conditions of the franchise contract as well. (See also Ill. Rev. Stat. 1977, ch. 121½, pars. 705(18) through 705(21) (disclosure statement must contain information about whether franchise must be owner operated; whether franchise contract contains territorial protection clause or covenant not to compete; and whether and upon what conditions the franchisor may terminate the franchise).) This policy is as applicable to franchisors who have already disclosed financial information to the Securities and Exchange Commission and other public agencies as it is to all other franchisors; it is anomalous to view this language as providing support for an exemption from the disclosure requirements created by the Act.

The legislature’s purpose in creating the “public interest” exemption does not appear in either the statute or in the legislative history of the statute. In such circumstances I believe that the legislative classification must bear a fair and substantial relationship to the purposes that the People’s counsel in a litigated proceeding attribute to the legislature. Cf. Schweiker v. Wilson (1981), 450 U.S. 221, 244-45, 67 L. Ed. 2d 186, 204-05, 101 S. Ct. 1074, 1088 (Powell, Brennan, Marshall and Stevens, JJ., dissenting).

The People assert and the majority agrees that the purpose of the “public interest” exemption is to exempt franchisors from the disclosure requirements when the finan cial information that they must disclose under the statute is available from other sources. If this were the real purpose of the exemption, the legislature could easily have stated it in specific language. As stated, the “public interest” standard is too vague to guarantee that is how it will be applied. The “public interest” standard is more of a slogan than an articulable and reviewable standard. This vague standard would sustain an exemption for many franchisors even though information about their financial condition is not available from any other sources. The same vague standard could also be used to deny the exemption to some franchisors even though such information is readily available. The imprecision of the “public interest” standard is too obvious to withstand equal protection scrutiny in this criminal proceeding. Because the exemption power granted to the Attorney General is unconstitutional, the criminal sanctions imposed in this case are void.

n

The “public interest” exemption provided in'section 12 also violates the nondelegation doctrine. This court has often recognized “the guiding principle that intelligible standards or guidelines must accompany legislative delegations of power.” (Thygesen v. Callahan (1979), 74 Ill. 2d 404, 408.) This principle arises both from the separation of •powers doctrine (Ill. Const. 1970, art. II, sec. 1, art. IV, sec. 1) and from the recognition that the delegation of pervasive legislative powers to the executive can ultimately endanger civil liberties.

In Stofer v. Motor Vehicle Casualty Co. (1977), 68 Ill. 2d 361, this court established a three-part test for reviewing legislative delegations of power to the executive. In order to be valid the legislature must sufficiently identify:

“(1) The persons and activities potentially subject to regulation;
(2) the harm sought to be prevented; and
(3) the general means intended to be available to the administrator to prevent the identified harm.” 68 Ill. 2d 361, 372.

The exemption provided for by section 12 of the Franchise Disclosure Act fails to comply with these requirements. Neither section 12 nor any other provision of the Act identifies what persons are to receive the exemption or what harm the legislature sought to avoid by providing this exemption from the statute’s criminal penalties. The “public interest” criteria established in section 12 provides only a vague and inappropriate guide to the Attorney General for evaluating a franchisor’s application for the exemption.

In Thygesen v. Callahan (1979), 74 Ill. 2d 404, this court declared unconstitutional a statute that authorized the Director of Financial Institutions to establish a maximum fee schedule for community currency exchanges. The only limitation on the Director’s power to establish the rates was that they be “reasonable” and “relevant.” (Ill. Rev. Stat. 1977, ch. 16½, par. 49.) The court declared that such “ ‘uncabined discretion’ ” is unconstitutional, especially where the legislature also failed to communicate to the Director the harm that it intended to prevent in mandating a maximum fee schedule. 74 Ill. 2d 404, 411, quoting Stofer v. Motor Vehicle Casualty Co. (1977), 68 Ill. 2d 361, 373.

■ The “public interest” standard involved in this case is no more specific than the “reasonable” and “relevant” standard involved in Thygesen. Moreover, the harm to be alleviated by the exemption is no more precisely identified here than it was in Thygesen. Contrary to the majority’s assertion, the purpose the legislature had in providing the exemption in section 12 is not evident from the statement of the legislature’s purpose in enacting the Franchise Disclosure Act. As noted above, the statute clearly indicates that it aims to provide Hlinois franchisees with easy access to information about both the financial health of the franchisor and the terms and conditions of the franchise contract. (See, e.g., Ill. Rev. Stat. 1977, ch. 121½, pars. 702, 705(18) through 705(21).) This policy is as relevant to franchisors with their shares listed on a national stock exchange as it is to the smaller, less well-capitalized franchisors, and it does not provide any meaningful guidance to the Attorney General on how to use the power to grant exemptions from the disclosure requirements “in the public interest.”

The “public interest” exemption provided in section 12 fails to identify sufficiently the persons who may receive the exemption and the harms that it is intended to alleviate. It therefore violates the nondelegation doctrine and is unconstitutional and void.

ill

In conclusion, I believe that the granting of an untrammeled power to the Attorney General to exempt certain persons from criminal liability violates equal protection and the nondelegation doctrine. The vague “public interest” standard for granting the exemptions creates too great a danger of arbitrary classification to uphold, especially when the personal liberty of the defendant may be at stake in a criminal proceeding. I would declare section 12 unconstitutional; and because it is an integral component of the criminal sanctions imposed under the Act, I would declare void all criminal sanctions that are subject to the exemption.

In the present case I would affirm the appellate court’s conclusion that the convictions based on counts I, II and IV are void. For the reasons stated in Justice Moran’s separate opinion, I would also affirm the appellate court’s judgment which reversed the conviction based on count III.