author: JUSTICE LINDBERG SEIDENFELD, P.J., JUSTICE LINDBERG

text:
    LIBERTYVILLE TOWNSHIP, Plaintiff-Appellant, v. PATRICIA WOODBURY, Defendant-Appellee.
    Second District
    No. 83—193
    Opinion filed January 19, 1984.
    Supplemental opinion filed on denial of rehearing March 6, 1984.

      SIEDENFELD, P.J., dissenting.
    M. R. Conzelman and Ann E. Conzelman, both of Conzelman, Schultz, Snarski & Mullen, of Waukegan, for appellant.
    Gary L. Schlesinger, of Ray & Glick, of Libertyville, for appellee.
   JUSTICE LINDBERG

delivered the opinion of the court:

This case addresses the question whether a township may require an applicant for General Assistance to enter into a contract to repay as a condition to the receipt of benefits from the township. Because we hold such a contract to be permissible in this case, we reverse the judgments of the trial court in favor of the applicant.

On February 1, 1980, defendant Patricia Woodbury applied to the plaintiff, Libertyville Township (township), for General Assistance (GA) benefits. On the application form, Woodbury listed her house as real estate owned. At the end of the form were two statements relevant to this case: one stating that a lien would be placed on the recipient’s real estate and the other being a promise by the recipient to repay the township for aid given. Woodbury signed the form and received $1,090.26 in GA benefits from the township between February 1, 1980, and March 18, 1981. On February 2, 1980, a notice of lien was filed by the township on Woodbury’s house. The township supervisor testified that he would not have disbursed any aid to Wood-bury if she had not agreed to repay the township. Woodbury did not repay any part of the benefits she received.

On or about April 30, 1981, Woodbury sold her house for $42,000, receiving after all prorations a balance of $15,705.49. Defendant Mid America Title Company issued a title commitment on Woodbury’s house indicating the existence of the township’s lien against the property. Mid America Title Company holds an escrow account in an amount sufficient to pay the lien.

On May 8, 1981, the township initiated this action in the circuit court of Lake County in a complaint seeking contractual recovery from Woodbury and seeking recovery from Mid America Title Company of the money it holds in escrow. Count I was based on a written contract to repay; count II was based on an oral agreement to repay out of .specific proceeds; and count III, against Mid America Title Company, sought recovery on a lien securing the debt created by the alleged contract. Defendants’ motion for summary judgment on all counts was denied as to the first two counts and granted as to the third. On the day of trial, count II was dismissed. After trial on count I, the trial court entered judgment for Woodbury, but based its decision solely on the legal issues without reference to findings of fact. The township filed timely notice of appeal, specifying the summary judgment on count III and the judgment on count I. Thus, the dismissal of count II is not before this court. See 87 Ill. 2d R. 303(c)(2).

On appeal, three issues are raised: (1) whether the township was authorized to enter into the contract to repay, (2) whether there was consideration to support the promise to repay, and (3) whether the township was authorized to impose a lien to secure the contract.

While a township has the general power to enter into contracts (Ill. Rev. Stat. 1979, ch. 139, par. 38), Woodbury argues and the trial court held that the contract at issue is not enforceable because the township had no statutory authorization to make a contract requiring repayment of GA benefits. Although the Illinois Public Aid Code provides various means of recovery by the State or a unit of local government from the recipient of benefits or his relatives, estate or insurer (see Ill. Rev. Stat. 197.9, ch. 23, pars. 3 — 9, 5 — 13, 7 — 6, 11 — 22, 11 — 22a), including voluntary repayment (Ill. Rev. Stat. 1979, ch. 23, par. 11 — 14), there is no statutory right of recovery by a township against a nonmedical GA recipient. However, the Illinois Public Aid Code does not expressly answer the question of whether a township may properly obtain a contractual right of recovery of GA benefits. Thus, the question becomes one of statutory construction.

In addressing another issue of interpretation of the GA article of the Illinois Public Aid Code (Ill. Rev. Stat. 1979, ch. 23, pars. 6 — 1 through 6 — 7), the court in Miller v. Department of Public Aid (1981), 94 Ill. App. 3d 11, 418 N.E.2d 178, expressed a policy favoring a broad reading of governmental discretion. The Miller court, noting that the purposes of the GA program are limited in achievability by fiscal considerations, opined that constriction of that discretion which is granted to the Department of Public Aid to cope with economic concerns would defeat the legislature’s aim. (94 Ill. App. 3d 11, 17, 418 N.E.2d 178, 184.) Similarly here, discretion statutorily granted to the township should be read broadly so as to further the legislature’s aim to provide the greatest benefit possible under the fiscal constraints present.

Section 6 — 2 of the Illinois Public Aid Code provides that the “amount and nature” of GA benefits “shall be determined in accordance with local budget standards.” (Ill. Rev. Stat. 1979, ch. 23, par. 6 — 2.) Article XII gives GA administrative powers to the township supervisor. (Ill. Rev. Stat. 1979, ch. 23, pars. 12 — 21, 12 — 21.2, 12 — 21.8; Johnson v. Town of City of Evanston (1976), 39 Ill. App. 3d 419, 350 N.E.2d 70.) In Johnson, the court held that the supervisor has the authority to set the basic maintenance level in the community, from which the amount of aid is to be determined under section 6 — 2. (39 Ill. App. 3d 419, 425, 350 N.E.2d 70, 74-75.) In Cozart v. Winfield (7th Cir. 1982), 687 F.2d 1058, the court stated that section 6 — 2 authorizes township supervisors to create regulations governing the “amount and nature” of GA benefits; hence, it interpreted the statute to permit a township regulation barring benefits to employees fired for cause until 30 days after termination as a regulation governing the “nature” of GA benefits. Similarly here, we view the township supervisor’s requirement of an agreement to repay as relating to the “nature” of GA benefits.

Woodbury attempts to distinguish Cozart v. Winfield (7th Cir. 1982), 687 F.2d 1058, by asserting that that case involved a formal regulation adopted by the town board. In fact, the regulation in Cozart was apparently promulgated by the supervisor. Still, the evidence in this case shows the requiring of an agreement to repay to be merely a practice of the supervisor. The formal, written set of standards for the township’s GA program, entitled “Rules, Procedures and Eligibility,” does not mention agreements to repay, although it does state that “[ljiens will be placed against real estate property whenever possible.” Section 6 — 2, in providing for the determination of the “nature” of the GA benefits, does not specify whether that determination must be by formal regulation or may be by administrative practice. While this question might serve as the basis of a procedural due process claim (see White v. Roughton (7th Cir. 1976), 530 F.2d 750), no such claim has been raised here.

Woodbury also argues that the regulation in Cozart was a reasonable one and the requirement at issue here is not. Since the requirement of a repayment agreement is aimed directly at easing local budgetary concerns and would facilitate the giving of greater benefits, it directly serves the legislature’s intent. As applied in this case, the requirement served to aid a property-owning individual who was without cash for a time. The attempt to enforce the promise to repay did not occur until Woodbury voluntarily sold her real property and, thus, had the cash to repay the township. We view the township’s precondition to GA benefits to be reasonable under the facts of this case.

While no further Illinois cases can be found on point, two recent decisions from other States lend persuasive support to our interpretation that the township was authorized to enter into the contract here. In Oliver v. Petit (Me. 1981), 432 A.2d 428, a statute specifically gave municipalities and the State the right to recover general assistance costs from recipients in a civil action while barring such an action where repayment would make the recipient again eligible for more assistance or where the recipient is currently receiving any public assistance. The recipient in Oliver had requested general assistance during the time her application to the Federal Social Security Administration for Supplemental Security Income was pending. She signed an agreement by which she authorized the Social Security Administration to, in effect, reimburse the municipality and the State for their general assistance to her out of the initial SSI payment. In exchange, she received the municipality’s prompt aid during the Federal application pendency. The Supreme Judicial Court of Maine determined that the statute did not bar the contract. More significant to the present case, the court held that the State’s department of human services had the authority to enter into such a reimbursement contract under general statutory provisions giving the department “general supervision of the interests of health and life of the citizens of the State” and authority to “issue rules and regulations considered necessary and proper for the protection of life, health and welfare, and the successful operation of the health and welfare laws.” (432 A.2d 428, 431.) In Tunnicliff v. Pennsylvania Department of Public Welfare (1978), 483 Pa. 275, 396 A.2d 1168, a similar contractual reimbursement scheme was upheld by the Supreme Court of Pennsylvania. These cases permit the State or local government to require a promise to reimburse as a condition to the extension of benefits to an applicant whose need is temporary because of expected federal assistance. Here, the township likewise required a promise to reimburse as a condition to the extension of GA benefits where Woodbury faced a cash-flow problem subsequently resolved by the voluntary sale of her home.

The cases cited by the parties are not helpful. The township relies upon City of Champaign v. City of Champaign Township (1959), 16 Ill. 2d 58, Dandurand v. County of Kankakee (1902), 196 Ill. 537, and Tazewell County v. Cooney (1919), 215 Ill. App. 617, for the proposition that public policy, even in the absence of statutory authorization, would permit recovery by the State of disbursed public aid in appropriate cases. Those cases involved recovery from a deceased’s estate or for medical benefits, recoveries of the type now authorized by statute. (See Ill. Rev. Stat. 1979, ch. 23, pars. 3 — 9, 5 — 13, 7 — 6, 11 — 22.) They do not necessarily indicate that recovery is appropriate here and we therefore do not rely upon them for our disposition.

Woodbury relies upon Nelson v. Fogelstrom (1972), 5 Ill. App. 3d 804, 284 N.E.2d 339, for the proposition that no debtor-creditor relationship is created by the giving of public aid benefits authorized by statute. Nelson so held by approving the reasoning of another case which stated that the benefit payments at issue “were not made in pursuance of any contract between the parties.” (City of Worcester v. Quinn (1939), 304 Mass. 276, 277, 23 N.E.2d 463, 464, quoted in Nelson v. Fogelstrom (1972), 5 Ill. App. 3d 804, 807, 284 N.E.2d 339, 341.) Thus, Nelson cannot be said to deny the existence of a debtor-creditor relationship where public aid benefits are made in pursuance of a contract between the parties.

In sum, in light of the policy to broadly read governmental discretion under the Public Aid Code so as to provide the greatest benefits possible under the fiscal constraints present, we hold that the township was authorized to enter into the agreement at issue in this case.

Woodbury next contends that her agreement to repay the township is unenforceable for lack of consideration. She notes that the only thing she received in exchange for her promise to repay was the GA payments. Woodbury argues that because the township was already obligated to make those payments, they cannot constitute legal consideration.

Consideration is a basic element for the existence of contract and any act or promise which is of benefit to one party or disadvantage to the other is a sufficient consideration to support a contract. (Steinberg v. Chicago Medical School (1977), 69 Ill. 2d 320.) However, the promise to do something which one is already legally obligated to do is not consideration and creates no new obligation. (Moehling v. W E. O’Neil Construction Co. (1960), 20 Ill. 2d 255; In re Marriage of Roth (1981), 99 Ill. App. 3d 679, 426 N.E.2d 246.) Thus, if the township would have been legally obligated to pay Woodbury the benefits she received even without the agreement, then there was no consideration.

However, as the previous discussion demonstrated, the township supervisor possesses discretion in the granting or denial of GA benefits. While he is subject to the guidelines of the Public Aid Code and “shall provide public aid to all persons eligible” to receive GA benefits (Ill. Rev. Stat. 1979, ch. 23, par. 12 — 21.8), the township supervisor has discretion in determining the standards of eligibility. (See Johnson v. Town of City of Evanston (1976), 39 Ill. App. 3d 419, 350 N.E.2d 70; Cozart v. Winfield (7th Cir. 1982), 687 F.2d 1058.) We must give wide latitude to the township supervisor in the exercise of that discretion. (See Miller v. Department of Public Aid (1981), 94 Ill. App. 3d 11, 418 N.E.2d 178.) His determination to provide benefits only upon a promise to repay was a valid exercise of his discretion. By providing benefits to Woodbury, the supervisor decreased the limited funds from which other eligible GA applicants might receive benefits. The supervisor’s discretionary acts of determining Woodbury’s eligibility and awarding her benefits from the limited township GA funds constituted sufficient consideration for Woodbury’s promise to repay.

Finally, we address the issue of the township’s authorization to impose the lien in this case. The trial court, in granting summary judgment on count III, concluded that there was no such authorization under the statutes. The township contends that the lien was a valid means of enforcing the contractual debt Woodbury owed.

There is no express statutory imposition of a township lien such as the one asserted here. The Illinois Public Aid Code does grant to the State or local governmental unit a charge or lien under certain circumstances as a means of recovery (Ill. Rev. Stat. 1979, ch. 23, pars. 3 — 10, 11 — 22), but does not specifically create a lien as a means for recovery of nonmedical GA benefits. None of the acts relating to liens creates a lien in the present case. (Ill. Rev. Stat. 1979, ch. 82, par. 1 et seq.) The township act (Ill. Rev. Stat. 1979, ch. 139, par. 1 et seq.) creates a township lien in only one provision unrelated to the present case. Ill. Rev. Stat. 1979, ch. 139, par. 126.16.

However, while none of the relevant statutes expressly provides for the type of lien asserted here, it is equally true that none of the statutes specifically or impliedly exclude the creation of such a lien. A lien may be created by agreement or by statute. (Streams Sports Club, Ltd. v. Richmond (1982), 109 Ill. App. 3d 689, 440 N.E.2d 1264, aff’d (1983), 99 Ill. 2d 182; Sullivan v. Sudiak (1975), 30 Ill. App. 3d 899, 333 N.E.2d 60.) In Streams Sports Club, this court held valid a lien which, while not provided for by statute, was expressly created by contract. (109 Ill. App. 3d 689, 692, 440 N.E.2d 1264, 1267.) In the application form signed by Woodbury, just above the promise to repay, it is stated, “A lien will be placed against any and all real estate property owned by a recipient.” Thus, the lien asserted here was expressly provided for by contract.

While a lien in general may be contractually created in the absence of statute, the township may only have contracted for the lien if it had authority to do so. This is because townships have no inherent powers, but only those granted to them by the constitution or authorized by statute. (Diversified Computer Services, Inc. v. Town of York (1982), 104 Ill. App. 3d 852, 433 N.E.2d 726.) Among the powers of townships granted by statute are the power to make contracts and the power to acquire and to hold real and personal property for the use of its inhabitants. (Ill. Rev. Stat. 1979, ch. 139, par. 38.) Since a lien is property (A.S.S. Wrecking Co. v. Guaranty Bank & Trust Co. (1971) , 2 Ill. App. 3d 66, 275 N.E.2d 724, rev’d on other grounds (1972) , 53 Ill. 2d 249), there exists general statutory authority for a township to acquire a lien by contract.

Woodbury relies upon Nelson v. Fogelstrom (1972), 5 Ill. App. 3d 804, 284 N.E.2d 339, to deny the township’s authority to impose a lien. In Nelson, the State attempted to assert a lien on a trust property interest of the estate of a deceased recipient of Old Age Assistance. The appellate court first denied the existence of the lien under section 3 — 10 of the Illinois Public Aid Code (Ill. Rev. Stat. 1967, ch. 23, par. 3 — 10) because that section establishes a lien only on real property while the beneficial interest at issue was personal property. (5 Ill. App. 3d 804, 805-06, 284 N.E.2d 339, 340-41.) The court secondly denied the existence of an equitable charge or lien on the reversionary interest of the plaintiff-settlor. In so holding, the court quoted Corpus Juris Secundum as follows: “ ‘Statutory provisions relating to the creation and satisfaction of the lien are controlling; and it is only pursuant to statutory provisions that the authorities may have a lien for assistance furnished.’ ” 5 Ill. App. 3d 804, 806, 284 N.E.2d 339, 341, quoting 81 C.J.S. Social Security and Public Welfare sec. 31 (now sec. 110 (1977)).

This stated rule runs counter to the township’s assertion that public policy, in the absence of statute, would support the lien claimed here. However, it does not contradict our position that the lien is sustainable as contractually created pursuant to the general statutory powers of the township.

Accordingly, we reverse the summary judgment of the circuit court of Lake County on count III; we reverse the judgment of that court on count I; and we remand for further proceedings consistent with this opinion.

Reversed and remanded.

UNVERZAGT, J., concurring.

SEIDENFELD, P.J.,

dissenting:

I would affirm the decision of the trial court. As that court noted, although official attempts to conserve limited public funds are to be commended, the general assistance article of the Illinois Public Aid Code (Ill. Rev. Stat. 1979, ch. 23, pars. 6 — 1 through 6 — 7) does not allow the township supervisor to treat a grant of general assistance benefits as a loan.

The general assistance article of the Code, which is involved here, provides neither for requiring repayment of benefits nor for placing a lien on real estate to secure repayment of benefits. In contrast, other articles of the Code do so provide. For example, only the article governing aid to the aged, blind, and disabled (Ill. Rev. Stat. 1979, ch. 23, pars. 3 — 1 through 3 — 15) allows the State to place a lien on real property of the recipient, and this provision exempts that property occupied by the recipient as a homestead and valued at less than $25,000. (Ill. Rev. Stat. 1979, ch. 23, par. 3 — 10.) This article also allows the State to file a claim against the estate of the deceased recipient for the full amount of benefits paid. (Ill. Rev. Stat. 1979, ch. 23, par. 3— 9.) The medical assistance article allows the State to have a charge against all claims, demands and causes of action for injuries for which persons received medical assistance benefits. Ill. Rev. Stat. 1979, ch. 23, par. 11 — 22.

A well-settled rule of statutory construction requires that the enumeration of a power in one section of a statute implies the prohibition of that power in another, silent, section of the statute. (Roth v. Department of Public Aid (1982), 109 Ill. App. 3d 457, 460.) Applying that rule here, since the legislature provided for repayment of medical benefits and for a lien to secure the repayment of aid to the aged, blind, and disabled, it prohibits a lien to secure repayment of general assistance benefits. This conclusion is supported by the fact that the administrative article provides for voluntary repayment benefits. (Ill. Rev. Stat. 1979, ch. 23, par. 11 — 14.) This provision would not be necessary if compulsory repayment were generally permitted.

The majority found that imposing the lien here was within the township supervisor’s discretion under section 6 — 2 to determine the “amount and nature” of general assistance benefits (Ill. Rev. Stat. 1979, ch. 23, par. 6 — 2), and within the supervisor’s general assistance administrative powers. (Ill. Rev. Stat. 1979, ch. 23, pars. 12 — 21, 12— 21.2, 12 — 21.8.) It found that this discretion gave the supervisor the authority to impose the lien.and also found that the exercise of that discretion provided consideration for the contract. The majority, applying the reasoning in Miller v. Department of Public Aid (1981), 94 Ill. App. 3d 11, 17, holds that the broad governmental discretion granted in the general assistance program allows the supervisor to obtain a contractual right to recover general assistance benefits as a condition of granting them and that to hold otherwise would unreasonably constrict that discretion.

The Miller court found that the language in section 6 — 2 (Ill. Rev. Stat. 1979, ch. 23, par. 6 — 2), “[pjayments may also be made to provide persons receiving basic maintenance support with necessary treatment, care and supplies required because of illness or disability” (emphasis added) (Ill. Rev. Stat. 1979, ch. 23, par. 6 — 2), gave the Illinois Department of Public Aid discretion not to make additional payments for optical and nonemergency dental services.

Miller does not provide support for the conclusion that the township supervisor may determine whether persons found eligible for general assistance benefits may receive those benefits, themselves, based on criteria not found in the statute and contrary to statutory intent. This goes beyond the statutory discretion allowed. As the Miller court stated, “IDPA is given discretion under the Code to determine the extent and types of assistance to be forthcoming under the GA program within the broad borders which the statute outlines.” (Emphasis added.) 94 Ill. App. 3d 11, 19.

Under the Illinois Public Aid Code, the local governmental unit charged with administering general assistance benefits, in this case the township, must give aid to eligible persons. (Ill. Rev. Stat. 1979, ch. 23, pars. 2 — 14, 6 — 1, 12 — 3, 12 — 21.8.) Although responsibility for the administration of the general assistance program is “vested” in the township units (Ill. Rev. Stat. 1979, ch. 23, par. 12 — 21), this power is subject to the supervision of the Illinois Department of Public Aid. (Ill. Rev. Stat. 1979, ch. 23, par. 12 — 3.) The township’s discretion may be increased if it accepts no State money (see Ill. Rev. Stat. 1981, ch. 23, par. 6 — 2), but there is no evidence in the record that Libertyville Township accepts no State money. The aid given is a grant. (Ill. Rev. Stat. 1979, ch. 23, par. 2 — 3.) The recipient may repay this grant voluntarily, but the repayment must state clearly that it was made without compulsion. (Ill. Rev. Stat. 1979, ch. 23, par. 11— 14.) Thus, the township supervisor lacks the broad discretion the majority found.

The majority, applying the reasoning in Cozart v. Winfield (7th Cir. 1982), 687 F.2d 1058, found that the requirement of an agreement to repay general assistance benefits regulated the “nature” of benefits granted, within section 6 — 2 of the Illinois Public Aid Code (Ill. Rev. Stat. 1981, ch. 23, par. 6 — 2), much as the requirement of a 30-day wait before an employee fired for cause could receive general assistance benefits regulated the “nature” of benefits. However, the regulation in Cozart required the eligible recipient only to wait 30 days before receiving benefits, whereas under the practice considered here, the eligible recipient may not receive benefits without agreeing to repay them by contracting for a lien on realty. This does not regulate the “nature” of benefits, but rather the grant, itself, of the benefits.

While the township may have general statutory authority to acquire a lien by contract, the township has no authority to impose a lien to recover a general assistance grant absent a statutory provision. (See Nelson v. Fogelstrom (1972), 5 Ill. App. 3d 804, 806 (aid to aged, blind and disabled; no lien on personalty allowed where a statute provided only for a lien on realty).) Further, to hold that this contract to create a lien is supported by consideration is to hold that the supervisor had discretion to deny an eligible person aid and to declare the State-created grant a loan. Since the legislature has specifically provided for liens only to recover aid to the aged, blind and disabled, and since it specifically exempts liens against homesteads in that case, I would find that conditioning the receipt of general assistance on executing a contract creating a lien on the homestead exceeds the supervisor’s discretion and is contrary to legislative intent.

SUPPLEMENTAL OPINION UPON DENIAL OF REHEARING

JUSTICE LINDBERG

delivered the opinion of the court:

While we are satisfied that our opinion fully addresses most of the arguments raised by defendant Woodbury in her petition for rehearing, there are two additional points that we should discuss.

Woodbury contends that the statutory “workfare” provision (Ill. Rev. Stat. 1981, ch. 23, par. 6 — 1.7) is the sole method by which a nonmedical GA award may be recovered. This provision became effective November 26, 1979, shortly before Woodbury applied to the township for GA benefits. As with the other statutory recovery procedures in the Illinois Public Aid Code, its existence may imply the exclusion of any other statutory rights of public aid recovery, but it implies nothing regarding the legislature’s intent to permit or to bar the creation of a governmental unit’s contractual right to recovery. We continue to interpret the Illinois Public Aid Code to permit a contract of the type at issue here.

Woodbury criticizes our reliance upon the general corporate powers of the township (Ill. Rev. Stat. 1979, ch. 139, par. 38) as authority for the supervisor’s power to contract for the township’s lien here. While we recognize that a township supervisor is generally not authorized to exercise the corporate contracting power by himself (see Gregg v. Town of Bourbonnais (1945), 327 Ill. App. 253, 64 N.E.2d 106), we believe that the Illinois Public Aid Code provides such authority in this case. Townships are charged with the responsibility of providing funds for and administering GA programs. (Ill. Rev. Stat. 1979, ch. 23, par. 12 — 3.) In contrast to the former statute which subjected the supervisor in Gregg to “such restrictions and regulations as may be prescribed by the *** board of town auditors” (Ill. Rev. Stat. 1945, ch. 107, par. 20, quoted in Gregg v. Town of Bourbonnais (1945), 327 Ill. App. 253, 262, 64 N.E.2d 106, 110), administration of GA programs for the townships is now entrusted to township supervisors unhampered by the rules and regulations of the boards of town trustees (formerly, “boards of town auditors”). Ill. Rev. Stat. 1979, ch. 23, pars. 12 — 21, 12 — 21.2, 12 — 21.8; Johnson v. Town of the City of Evanston (1976), 39 Ill. App. 3d 419, 350 N.E.2d 70.

Even if the supervisor did not have authority to contract for a township lien, his action has been ratified. A township may ratify the unauthorized contracts of its agents or officers which are within its corporate powers; ratification may frequently be inferred from acquiescence after knowledge of all the material facts, or from acts inconsistent with any other supposition. (Town of Bruce v. Dickey (1886), 116 Ill. 527.) Here, the fact that the present suit to enforce the contract and the lien it created was filed by the township is a clear sign of ratification by the governmental unit of its supervisor’s conduct.

We therefore adhere to our opinion.

UNVERZAGT, J., concurs.


source: Caselaw Access Project

author: JUSTICE ALLOY PRESIDING JUSTICE STOUDER,

license: Public Domain

text:
    PHILIP J. FERENTCHAK et al., Plaintiffs-Appellees, v. THE VILLAGE OF FRANKFORT et al., Defendants-Appellants (Albert H. Krusemark, Jr., et al., Defendants).
    Third District
    Nos. 3—83—0116, 3—83—0138 cons.
    Opinion filed January 26, 1984.

      STOUDER, P.J., concurring in part and dissenting in part.
    Mark A. Pheanis and John C. Bartler, both of McKenna, Storer, Rowe, White & Farrug, of Wheaton, for appellant Village of Frankfort.
    Robert J. Baron, of Thomas, Wallace, Feehan, Baron and Kaplan, Ltd., of Joliet, for appellant Robert E. Hamilton.
    Harry D. Leinenweber, of Dunn, Leinenweber & Dunn, Ltd., of Joliet, for appellees.
   JUSTICE ALLOY

delivered the opinion of the court:

This is a consolidated appeal from judgments entered by the circuit court in favor of plaintiffs Philip and Caroline Ferentchak and against defendant Robert E. Hamilton and defendant village of Frankfort, a municipal corporation. The case is based upon property damage to the plaintiffs’ home in the village of Frankfort as a result of alleged negligence by the defendants. The jury found against both defendants. The separate appeals by the defendants have been consolidated for appeal. A threshold issue, raised by both defendants, is whether the plaintiffs’ negligence actions seek merely “economic damages,” and are, therefore, barred by the decisions of the Illinois Supreme Court in Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, 435 N.E.2d 443, and Redarowicz v. Ohlendorf (1982), 92 Ill. 2d 171, 441 N.E.2d 325. Since we find no bar to the negligence actions under Moorman, we also address the other issues raised by the defense. Defendant Robert Hamilton contends that his liability, as architect and subcontractor, terminated upon completion of his contract with the builder and acceptance of his work. He also contends that the trial court committed prejudicial error in permitting plaintiffs’ expert to testify to his opinion as to unethical conduct by Hamilton. The municipal defendant, village of Frankfort (hereinafter Frankfort), argues that the plaintiffs failed to both state and prove any cause of action against it. We turn to the facts as found in the record.

In 1971, Albert Krusemark (hereinafter developer) engaged defendant Robert Hamilton, an Illinois civil engineer and sole proprietor of his own consulting firm, to design and oversee the construction work on a subdivision in Frankfort. The contract called upon Hamilton to design and construct the subdivision so as to meet applicable code requirements of the village. Included in the subdivision design and construction work was a surface water drainage system for the project. Hamilton, pursuant to his contract with developer, did the engineering work on the project.

Hamilton, at the same time, was also the village engineer for Frankfort. In that capacity, he reviewed the subdivision plans submitted by developer to the village planning commission. Such review required him to assess if the proposed plans complied in all respects with the village’s building and zoning codes. Hamilton reviewed the plans and passed them, advising the board in writing that they conformed to applicable village standards. The subdivision plat was accepted by the village and the plat was recorded in 1973.

Hamilton’s plans concerning the surface water drainage system for the subdivision included a 20-foot wide channel easement for surface water drainage between the northern boundary of Lot 82 and the southern boundary of Lot 81 in the subdivision. The designation “channel easement” was on the plat of the subdivision between those two lots, although there were no specifications on the plans indicating the shape or depth of any channel to be constructed. The village’s 1971 ordinances did not require that such specifications be included on subdivision plats. Hamilton would testify later at trial that the omission of specifics was intentional, to permit individual development of the lots, while reserving to the village the right to restore the natural drainage, through use of the channel easement. Hamilton also testified that no specifics were set forth because there was no way of knowing how the adjacent properties would be developed, which development would affect the design of the channel.

Lot 81, the property at issue herein, was sold by developer to Lidio Filippo (hereinafter builder) in 1975. Builder then applied to the village for a building permit for construction of a single-family residence on Lot 81. At the time of his application, he was informed by William Knippel, building and zoning codes administrator for the village (hereinafter Code Administrator), that the foundation grade of the home had to be a certain number of inches about the mid-level of the curb or street. Builder testified at trial that Code Administrator informed him specifically of what foundation grade to build for the house. Code Administrator testified that he informed the builder of the standard minimum foundation level required by the city, thereby leaving a final decision as to foundation grade above that level to the builder. Code Administrator also stated that the plans submitted by builder in his application for building permit did not contain any specification as to foundation grade level. When the builder indicated that he was ready to pour the footings, Code Administrator visited the premises for an on-site inspection prior to commencement of the cement pour. At that time, Code Administrator directed that the foundation be raised as much as possible and still remain on good, bearing soil. The foundation height was raised several inches above the minimum, or approximately 20 inches above middle of the lot. The home was built on Lot 81 with the foundation at the height indicated by the Code Administrator at the time of construction, approval of building having been given.

Subsequent to construction of the home, builder sold the property to plaintiffs Caroline and Philip Ferentchak, in August of 1976. There was some delay in the Ferentchaks’ taking possession as a result of problems obtaining the occupancy permit from the village. Code Administrator, prior to approving an occupancy permit for the home, insisted that builder put in a drainage swale, as indicated on the plat of the subdivision. Builder testified at trial that he was unaware that a drainage swale had to be constructed until so informed by the Code Administrator during the attempt to obtain the occupancy permit. The permit was withheld until the drainage matters were addressed. Since the plat contained no specifics as to construction of the swale, builder asked Code Administrator what needed to be done to get the approval on the permit. Code Administrator, after consulting with Bruce Hamilton, an employee of defendant, Robert Hamilton, gave builder specific directions for construction of the drainage swale on Lot 81. In the same period of time, Code Administrator, during a visit to the site, objected to a crown, or gentle slope, that ran across the rear portion of Lot 81. He felt that the crown would impede proper drainage and was, therefore, unacceptable. On his directions, the builder flattened the crown so that water would drain from north to south, from the back of the lot to the front. Builder also dug the drainage swale and sodded it according to directions from the Code Administrator. Code Administrator thereafter visited the site and approved the occupancy permit, the required changes having been made.

In January 1977 the Ferentchaks began to experience water problems at their new home. They noticed water in the back portion of the rear yard, as well as the water running in the swale to the street. In February 1977, water was observed in the family room down in the basement. The problems with water oozing into the lower level of the house have continued since that time, without significant abatement, whenever there is a heavy rain in the area. Their attempts to solve the problem, through basement waterproofing, were unsuccessful. In the spring of 1978, Colin Gray, a civil engineer obtained by the Ferentchaks’ attorney, examined the property. He later would testify as their chief expert witness at trial.

The Ferentchaks also continued to complain to builder and to the village concerning their problems. In the spring of 1978, after discussions between plaintiffs’ counsel and the village board and its engineering department, the Hamilton firm was instructed by the board to visit the Ferentchak property to make observations. Bruce Hamilton did so and noted two problems already referred to, that is, the surface ponding in the southwest corner of the lot and water leaking into the lower level of the home. As a result of his recommendations for modifications, the village regraded the swale in the summer of 1978. This action had no apparent effect on the problem, as plaintiffs’ evidence indicated that the flooding continued with the same regularity as prior to the changes in the swale made by the village.

Plaintiffs’ expert was Colin Gray. Gray testified that it was his opinion that the basic problem with the home was that the foundation grade had been set too low, and that this fact, coupled with an inadequate and improper drainage system, resulted in the damage to plaintiffs’ home. Gray gave, his expert opinion that the subdivision plans drawn by Robert Hamilton failed to meet sound engineering standards, in that they (1) lacked specifics as to foundation levels for the homes in the subdivision; (2) lacked specifics as to design criteria for the drainage swale; and (3) contained inadequate specifics for the grading of the subdivision. Gray concluded that the design in the plans was inadequate to properly drain the contributory drainage area in the subdivision and that the house was set too low in relation to nearby houses.

The defense experts varied in their appraisal of the causes and the duties involved herein. One defense expert, Joseph Schudt, agreed that the foundation was too low, given all the other factors involved. Two other experts found no fault with the foundation grade. All of the experts who testified indicated that the lot grade drainage was improper, with Gray concluding that no amount of further lot grading would cure the problem, because of the foundation level and the amount of drainage area to be drained. As to the sufficiency of the surface water drainage system plans, designed by Hamilton, the defense witnesses found that they were adequate to meet standards in existence in 1971 in Will County. Gray, as noted, disagreed, and testified that the plat failed to meet sound engineering standards applicable at the time. Gray also testified, over objection, that it was improper, in his opinion, for an engineer to design a subdivision plat and review his own design as village engineer, absent an express recommendation by him to the village to retain another engineer to review his work. The defense experts found no impropriety in the manner in which the plans were drawn and approved.

The jury returned verdicts in favor of the plaintiffs and against both Hamilton and the village of Frankfort. From judgments on those verdicts, the parties now appeal.

A threshold issue, common to both appeals, is whether the Ferentchaks’ causes of action against each defendant, sounding in negligence, are barred by the decisions of the Illinois Supreme Court in Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, 435 N.E.2d 443, and Redarowicz v. Ohlendorf (1982), 92 Ill. 2d 171, 441 N.E.2d 325. In seeking to apply the Moorman decision, the defendants place undue emphasis on the nature of the damages involved, thereby proceeding to an erroneous conclusion as to the “economic loss” doctrine’s scope and applicability. The argument is essentially that since the Ferentchaks’ claim for damages, as against all three defendants, was for the costs of repair to their home and diminution in value, due to the water damage; therefore, they suffered only economic losses for which no tort recovery is available. Put differently, the village contends that since these economic losses could not be recovered under a tort theory as against the builder, therefore, tort recovery is also barred as to other parties. This approach adopts too simplistic an analysis of Moorman, focusing solely on the nature of damages while ignoring the policy behind and analytical underpinnings of that opinion. As this court noted in Vaughn v. General Motors Corp. (1983), 118 Ill. App. 3d 201, 454 N.E.2d 740, the Illinois Supreme Court in Moorman and its progeny did not intend that the nature of damages be the sole factor used in distinguishing a tort claim from a contract claim. As insightful commentary has noted, Moorman’s bar to tort recovery for economic losses does not focus on a particular type of damage, so much as it identifies harm originating from a particular context, the commercial context wherein harm is to a consumer’s commercial expectations. (See Bertschy, The Economic Loss Doctrine in Illinois after Moorman, 71 Ill. B.J. 346 (1983).) The court in Moorman cited with approval the following passage from Pennsylvania Glass Sand Corp. v. Caterfillar Tractor Co. (3d Cir. 1981), 652 F.2d 1165:

“ '*** [T]he items for which damages are sought, such as repair costs, are not determinative. Rather, the line between tort and contract must be drawn by analyzing interrelated factors such as the nature of the defect, the type of risk, and the manner in which the injury arose. These factors bear directly on whether the safety-insurance policy of tort law or the expectation-bargain protection policy of warranty law is most applicable to a particular claim.’ ” (Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, 85.)

In assessing those factors in the instant case it is important to look at the asserted causes of plaintiffs’ damages (“manner in which injury arose”) and relative position of the defendants and their actions, respecting the injury and the plaintiffs (“nature of the defect” and “type of risk”).

In this case, the plaintiffs’ proof indicated that the damages resulted (1) from Hamilton’s (architect for the developer) failure to adequately design the subdivision’s surface water drainage system and (2) from the village’s incorrect design of the foundation grade, yard grade and drainage swale. As against the municipal defendant, the plaintiffs’ theory was that their damages had resulted from a defect in the house and a defect in the surface drainage, both caused by improper and incorrect village action in enforcing its code and building requirements. As against Hamilton, the architect, the theory was that he had contributed to the damage through his improper design of the subdivision and its drainage system. Thus, one alleged cause is a defect in qualitative nature of the home, but the defect is not the result of acts or omissions of the builder. Rather it is the result of acts or omissions of a third party, here the village, coupled with a contributory cause grounded upon the acts and omissions of another third party, here the architect. Neither of these third-party defendants are persons for whom the builder of the home assumed responsibility. While the defendants are correct in saying that the nature of the damages are the same as suffered by the plaintiffs in Redarowicz, they are incorrect in concluding that Redarowicz, therefore, bars recovery in tort as against any and all defendants who may have contributed to those economic damages. As against the builder, who was alleged to have constructed a defective home and who was also a party defendant in this case, Redarowicz bars recovery in tort by these plaintiffs. As to the builder, plaintiffs’ injuries related to their commercial expectations as to the quality of the product furnished by him. They reasonably expected a home they could live in without water damage, and he did not provide that. As to injuries the fault of the builder, plaintiffs suffered economic losses not recoverable in tort. However, as against the village and the architect for the developer, who allegedly caused and contributed to the damages, in the manner stated above, the same bar is not applied, even though the nature of the damages is identical. We read Moorman and subsequent cases to establish that economic losses are not recoverable in tort against a defendant where the injuries caused by that defendant relate directly to plaintiff’s reasonable commercial expectations respecting the defendant’s actions and where plaintiff has or had appropriate and adequate contract or warranty actions as against the defendant for such harm. In such circumstances, and where the injury is to the item supplied or produced by that defendant, contractual benefit-of-bargain expectations damages are the appropriate measure of recovery. However, the same economic losses are recoverable in tort, as against defendants who by their own negligence, as measured by traditional tort analysis, have caused the injuries and against whom no contract or warranty recovery is available. As to these defendants, when unconnected with the contract-warranty defendant, the harm caused by them is not related to the plaintiff’s commercial expectations, but to traditional societal expectations and conduct. See, e.g., Rozny v. Marnul (1969), 43 Ill. 2d 54, 250 N.E.2d 656, discussed in Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, 89, wherein the court found economic loss, but concluded that the surveyor was nevertheless liable in tort to the plaintiffs who had subsequently been injured by his acts and omissions.

Moorman, Redarowicz and Foxcroft Townhome Owners Association v. Hoffman Rosner Corp. (1983), 96 Ill. 2d 150, 449 N.E.2d 125, have all dealt with situations and parties wherein the alleged harm was caused by a defendant, was related to plaintiff’s legitimate and reasonable commercial expectations as to defendant’s actions, and where either the law of contract or warranty provided appropriate remedy to the injured plaintiffs. In Redarowicz, the court supplied the adequate and appropriate remedy by creating a warranty of habitability running to the subsequent purchaser from the original builder. The court in that case acknowledged and concluded that subsequent purchasers of residential property have valid and reasonable commercial expectations concerning the quality of the product and the builder’s performance and that those expectations were more appropriately protected by traditional contract-warranty theories. The emphasis in Moorman, carried over into Redarowicz, was upon legitimate consumer expectations of a plaintiff against a defendant and upon the appropriateness and availability of contract and warranty protections to cover the harm to those expectations. In the instant case, as against defendants Hamilton and the village of Frankfort, plaintiffs had no direct or indirect contractual relationship, the harm they suffered from these defendants did not relate directly to reasonable commercial expectations about their actions, and they had no contract or warranty recovery. While Moorman, after Redarowicz, clearly cannot be restricted to products liability actions and situations with available UCC remedies, nevertheless, we view the court’s intention in Moorman to confine its doctrine barring tort recovery for economic losses to commercial contexts, wherein the harm was to a plaintiff’s reasonable commercial expectations and where the plaintiff’s remedies against the party causing the harm are sufficient under contract or warranty theories of recovery. This view of Moorman is not without conceptual difficulties, to be sure, for Redarowicz indicates that purchasers of homes and products have valid reasonable commercial expectations as against persons responsible for the products, totally apart from questions of privity, and harm to those expectations are more appropriately handled by contract-warranty law. In the instant case, while the architect was not an employee or in any direct relation with the builder, being the architect for the subdivision developer, nevertheless it can be arguably maintained, under a Redarowicz analysis, that these plaintiffs had reasonable commercial expectations concerning the quality of work and performance of all persons whose activities combined to produce the product they purchased, their home and lot in this subdivision. This would include both those supplying a product as well as those supplying services, for commercial-contractual and warranty-like expectations pertain to both. However, as noted, there is no existing adequate remedy against the architect, for there is no warranty-like remedy against all persons in the chain of production. To conclude that the harm was to plaintiffs’ consumer expectations as against the architect for the developer, but that they had no remedies as to him, would be to leave plaintiffs with no action, except as against the ultimate supplier, here the builder, who would then be left to possible third-party actions against those responsible in the chain of production. We find that result inadequate, however conceptually sound, and not intended by the court in Moorman. We do not believe the court in Moorman intended its decision therein to bar tort recovery as against the architect in the instant case, if he were otherwise negligent in the performance of his duties (see Rozny v. Marnul (1969), 43 Ill. 2d 54, discussed and approved in Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, 89) simply because the plaintiffs might have an adequate contract-warranty remedy against the builder. We note that the architect herein was not an employee of the builder or otherwise in privity with him, and the architect’s contractual obligations ran to the developer who eventually sold the lot to the builder. If the direction of the Illinois Supreme Court is to broadly apply the Moorman doctrine against tort recovery for economic loss to situations such as the instant case, then this case presents an opportunity for them to so state. We conclude that the plaintiffs’ tort actions against the village and against the architect were not barred by the decisions of the court in Moorman and Redarowicz. As against these defendants, the plaintiffs suffered economic losses for which Moorman does not bar tort recovery. We turn then to the other issues raised by these defendants.

Defendant Robert Hamilton, architect for the developer, raises the issue of whether his liability, as an independent contractor for the developer, terminated upon completion and acceptance of his work by the developer. Hamilton argues that it did, citing to Empire Laundry Machinery Co. v. Brady (1896), 164 Ill. 58, 45 N.E. 486, and Paul Harris Furniture Co. v. Morse (1956), 10 Ill. 2d 28, 139 N.E.2d 275. Hamilton argues that the facts of the instant case do not bring it within any of the exceptions set forth in the Paul Harris opinion. The plaintiffs argue that traditional tort analysis, focusing upon foreseeability of the injury, should be applied, rather than artificial concepts such as privity. We agree. In Rozny v. Marnul (1969), 43 Ill. 2d 54, 250 N.E.2d 656, the court found that a surveyor for the builder was liable in tort to subsequent purchasers of a home for his negligence in performing his duties as a surveyor. There were no personal injuries involved in the case and no question of any dangerous condition re-suiting from his negligence. The court discarded the privity requirement and replaced it with a traditional tort analysis of the scope of duty, based upon foreseeability. (43 Ill. 2d 54, 62-67.) Then in Hunt v. Blasius (1978), 74 Ill. 2d 203, 208-09, 384 N.E.2d 368, the court explicitly discarded the general rule of nonliability for independent contractors who negligently make, rebuild or repair chattels for another, indicating a traditional negligence analysis as to duty should apply. Other cases have indicated the continued erosion of the doctrine of nonliability set forth in Paul Harris. (Johnson v. Equipment Specialists, Inc. (1978), 58 Ill. App. 3d 133, 138-42, 373 N.E.2d 837; Fournier v. 3113 West Jefferson Partnership (1981), 100 Ill. App. 3d 820, 821-22.) While most of these cases, with the exception of Rozny v. Marnul, could be confined to instances wherein independent contractors have supplied chattels or created conditions giving rise to foreseeable injury to persons on or about the premises (see Restatement (Second) of Torts secs. 352, 353, 404, 385 (1965), given the broad statement of repudiation in Hunt v. Blasius and the decision in Rozny v. Marnul, we conclude that the general rule of nonliability in Paul Harris has been discarded, to be replaced by traditional tort analysis of any alleged negligence. No issue is properly raised by defendant Hamilton as to his liability under traditional tort analysis for duty and foreseeability.

The only remaining issue raised by Hamilton is whether the trial court committed prejudicial error by permitting plaintiffs’ expert to testify to his opinion that Hamilton’s conduct in both designing the subdivision and reviewing those plans as village engineer was unethical, in that it created a conflict of interest. We find no reversible error. Plaintiffs’ expert stated his opinion that it was a conflict of interest, indicating that the proper procedure would have been for Hamilton to have recommended an independent evaluation. The defense countered with testimony from other experts that concluded there was no unethical or improper conduct by Hamilton. Evidentiary questions are largely within the discretion of the trial judge, and while the relevancy of this evidence is slight, we find no abuse of discretion in the court’s admission of the testimony sufficient to justify reversal. In those cases cited by the defendant there were highly prejudicial remarks made by counsel without evidence in the record to support them. Here the evidence arguably supported the opinion testimony of plaintiffs’ expert and we will not reverse thereon.

We turn next to the issues raised by the appellant village of Frankfort. The village argues that the evidence in the record fails to demonstrate that it had any duty to plaintiffs and also fails to establish that any acts of the village were negligent or were a proximate cause of the plaintiffs’ damages. We agree. Except for the village’s action in 1978 wherein its crew modified the drainage swale, all of the village’s actions were taken pursuant to its zoning and building code enforcement authority and duties. Thus, the Code Administrator’s actions in specifying the height of the foundation grade was taken pursuant to his authority and duty to enforce applicable rules and ordinances for building permits. Issuance of the building permit, after compliance with applicable requirements, was within his jurisdiction as Code Administrator. Similarly, his action in setting forth the specifics of the drainage swale, in 1976, and the grade for the back yard, were taken within his authority and duty as enforcement officer charged with overseeing the issuance of occupancy permits after compliance with applicable requirements. The fact that the municipality was insured, thereby waiving defenses granted it by the Local Governmental and Governmental Employees Tort Immunity Act (Ill. Rev. Stat. 1981, ch. 85, par. 1 — 101 et seq.), does not serve to impose duties upon the municipality. (Hannon v. Counihan (1977), 54 Ill. App. 3d 509, 512, 369 N.E.2d 917.) Rather, a plaintiff must still premise a negligence action against a municipality upon a duty to him in the factual circumstances of each case. (54 Ill. App. 3d 509, 512; Konicki v. Village of Hinsdale (1981), 100 Ill. App. 3d 560, 563, 427 N.E.2d 325.) In Hannon, where a village’s alleged negligence in failing to enforce its building ordinances was asserted, the court examined the question of duty within a similar context:

“The analogous cases, however, draw a distinction between ordinances which are designed to benefit the public at large and those designed for the benefit of individual members of that public. The failure to enforce the former will not raise a duty the violation of which could support a cause of action for damages against the municipality.

In Stigler v. City of Chicago (1971), 48 Ill. 2d 20, 268 N.E.2d 26, an infant brought an action against the city for injuries resulting from ingestion of lead-based paint on the theory the city

negligently failed to enforce a section of its housing code requiring that buildings be in good repair and habitable. While plaintiff also contended the Tort Immunity Act did not protect the city under the circumstances, the court did not reach that issue in determining defendants did not owe a special duty to plaintiff and affirmed the trial court’s dismissal of the complaint reasoning that:

‘This ordinance was enacted to benefit the public health and safety of the people of the city. Its enforcement was a governmental function rather than a ministerial or proprietary act. The ordinance did not give rise to any special duty to the plaintiff or to any particular person different from the public at large. (See: Gardner v. Village of Chicago Ridge, 71 Ill. App. 2d 373.) If the failure of the city to enforce this ordinance should render it liable for injuries sustained thereby, the tremendous exposure to liability would certainly dissuade the city from enacting ordinances designed for the protection and welfare of the general public, and thereby the general public would lose the benefit of salutary legislative enactments.’ 48 Ill. 2d 20, 24-25, 268 N.E.2d 26, 29.

Similar analysis was applied in O’Fallon Development Co. v. City of O’Fallon (1976), 43 Ill. App. 3d 348, 356 N.E.2d 1293, where the *** court considered the element of a legal duty was determinative of plaintiff’s claim and found there was none, stating:

‘Where the duty is owed to the public generally, no action lies on behalf of an individual for failure of performance, but where the duty is intended to benefit the individuals composing the public, failure to perform such duty gives rise to a cause of action in favor of anyone injured by such failure. (65 C.J.S., Negligence sec. 4(8), at 499 (1966).) *** Here, the City of O’Fallon owed a duty to the general public to protect public property from subversion to purely private uses. This duty is not transferable to an individual in the event the city is negligent in performing the duty.’ 43 Ill. App. 3d 348, 358-59, 356 N.E.2d 1293, 1302.

Other jurisdictions have persuasively considered this question on a factual basis similar to that in the instant case. In Hoffert v. Owatonna Inn Towne Motel, Inc. (1972), 293 Minn. 220, 199 N.W.2d 158 ***. *** The court stated plaintiffs were required to show a breach of a duty owed them in their individual capacities and not merely a breach of some obligation owed the general public, stating:

‘The purpose of a building code is to protect the public. This is well stated in 7 McQuillin, Municipal Corporations (3 ed.) sec. 24.507, p. 523:

“*** The enactment and enforcement of building codes and ordinances constitute a governmental function. The primary purpose of such codes and ordinances is to secure to the municipality as a whole the benefits of a well-ordered municipal government, or, as sometimes expressed, to protect the health and secure the safety of occupants of buildings, and not to protect the personal or property interests of individuals.”

Building codes, the issuance of building permits, and building inspections are devices used by municipalities to make sure that construction within the corporate limits of the municipality meets the standards established. As such, they are designed to protect the public and are not meant to be an insurance policy by which the municipality guarantees that each building is built in compliance with the building codes and zoning codes. The charge for building permits is to offset expenses incurred by the city in promoting this public interest and is in no way an insurance premium which makes the city liable for each item of defective construction in the premises.’ 293 Minn. 220, 222-23, 199 N.W.2d 158, 160.” (Hannon v. Counihan (1977), 54 Ill. App. 3d 509, 513-15.)

These rules, refusing to impose a duty upon municipalities in the enforcement of their zoning and building rules and regulations, were applied in Konicki to deny liability on the part of the municipality for alleged negligent interpretation of its zoning ordinance and building code. (Konicki v. Village of Hinsdale (1981), 100 Ill. App. 3d 560, 564-65.) The court there also rejected plaintiff’s contention that having interpreted its ordinance for him, the municipality had thereby assumed a “special duty” to him, such that liability would lie against it.

The zoning ordinance and building code of the village of Frankfort, as with those other municipalities, were enacted for the purpose of assuring protection to the public generally in the construction of buildings within the municipality. This is achieved through the imposition of minimum requirements and regulations designed to apply generally to all such construction. As in the above cases, the enforcement and interpretation of its building and zoning codes were governmental functions of this village, from which no duty to individual members of the public arose. The Code Administrator’s actions in specifying foundation grade and lot grade, as well as swale specifications, were taken pursuant to his duties and authority for enforcement of the zoning and building codes of the village of Frankfort. In so acting, he was specifying what was necessary and required to satisfy municipal standards applying to all construction. He was not specifying what would be sufficient and adequate to insure the habitability of this particular house in these particular circumstances. He was not guaranteeing or asserting that the municipality’s requirements were sufficient to solve any potential drainage problem with this particular home. In adopting and enforcing building requirements a municipality is not warranting to a subsequent purchaser that its requirements will ensure construction of a habitable building, regardless of surrounding circumstances. The ultimate responsibility for the engineering soundness of a building in particular circumstances lies with the builder, and one of the circumstances to be considered in meeting that responsibility is applicable zoning and building requirements. The actions of the Code Administrator in specifying requirements for construction to the builder herein were in fulfillment of the same duties which he performs for others in the general public in similar circumstances. He was interpreting and enforcing the applicable rules and regulations governing construction within the village. Therefore, no duty arose in relation to these plaintiffs such that liability may be imposed upon the municipality when those requirements do not insure a habitable building.

With respect to the village’s action in 1978, wherein a crew from the village made changes in the drainage swale, in an attempt to cure the water problem, it is a different situation. In this context, the village, both in specifying design and undertaking construction, was not enforcing general rules and regulations applying to the general public as a whole. It was responding affirmatively to a set of circumstances unique to this property and to the specific problem of water damage to plaintiffs’ home. Furthermore, its employees undertook the construction of the swale modification. These actions were not pursuant to governmental functions attendant to building and code enforcement duties. However, we need not determine the extent of liability or whether the voluntary nature of the work had any effect upon liability, for the evidence clearly establishes that the work had no effect upon the problem. There was no testimony that the 1978 construction work by municipal employees had any effect upon the pre-existing water damage to plaintiffs’ property. Thus, no proximate cause was established between that 1978 work by the village and the damages complained of by plaintiffs.

Finally, we reject plaintiffs’ contention that the village is liable for negligence because of the defects in the construction of the drainage system, under Elliott v. Nordlof (1967), 83 Ill. App. 2d 279, 227 N.E.2d 547, and Burford v. Village of La Grange (1967), 90 Ill. App. 2d 210, 234 N.E.2d 120. The decisions in those cases, and the rule relied upon, were based upon acts of a municipality in relation to municipal streets and sewers, that is for property for which the city had assumed responsibility. Where a city constructs a sewer system, or assumes maintenance responsibilities thereon, it is acting in a ministerial capacity and has been held liable for failure to perform up to standards applied to private parties in similar circumstances. In the instant case, the drainage swale and subdivision system was not located upon village property, was not a public improvement undertaken by the village, and the village had not assumed responsibility for the construction and maintenance of the system. The village’s actions respecting the drainage swale, except those without effect in 1978, were taken pursuant to its governmental duties and were not such as to impose liability upon it when the drainage swale failed to perform adequately so as to prevent injury to plaintiffs’ property.

In summary, we affirm the judgment as to the architect Hamilton, but reverse as to the village of Frankfort. We would also add, consistent with the tenor of our previous remarks, that the builder of residential property has ultimate responsibility for the habitability of his product. Where it does not meet habitability standards, the purchaser has an action against him. However, in the instant case, the jury found in favor of the defendant builder, and no cross-appeal from that judgment is before us at this time.

Reversed in part and affirmed in part.

SCOTT, J., concurs.

PRESIDING JUSTICE STOUDER,

concurring in part and dissenting in part:

I concur with the majority in its decision as to the nonliability of the village. I do not agree however that Hamilton can be held liable under a negligence theory because I do not believe that he breached any duty to the plaintiff. Like the majority, I agree that the privity requirement of traditional tort analysis has been discarded in favor of an analysis of the scope of duty. Where I take exception with the majority is in its analysis of the duty owed to plaintiff. Although Hunt v. Blasius (1978), 74 Ill. 2d 203, 384 N.E.2d 368, may in fact have finally discarded the general rule of nonliability of an independent contractor as the majority suggests, the further analysis of the Illinois Supreme Court regarding the duty owed is directly applicable to this case and mandates the opposite conclusion reached by the majority.

In Hunt the defendant designed, manufactured and installed road signs which plaintiff argued were installed too close to the roadside, were not of a modern construction and should have had “break-away” posts. The Illinois Supreme Court found that

“An independent contractor owes no duty to third persons to judge the plans, specifications or instructions which he has merely contracted to follow. If the contractor carefully carries out the specifications provided him, he is justified in relying upon the adequacy of the specifications unless they are so obviously dangerous that no competent contractor would follow them.” 74 Ill. 2d 203, 209, 384 N.E.2d 368, 371.

Hamilton’s contract with Krusemark, the developer, called upon him to design and provide working drawings of a surface water drainage system for the subdivision which met the applicable code requirements of the village. There was no contention by any party that Hamilton’s plans failed to meet the requirements of the village’s ordinances which did not require specifications indicating the shape or depth of any channel. Furthermore, the depth and shape of a channel would be affected by adjacent development, and it was therefore impracticable to include these specifics in the plans prepared by Hamilton. Therefore, Hamilton had no duty other than to conform his plans to the applicable village ordinances and the record indicates that he did just that. Hamilton was not liable as a matter of law, and the court should have entered a judgment for defendant Hamilton notwithstanding the verdict of the jury.

Since in my view the trial court should have granted a judgment notwithstanding the verdict in favor of both the village and the engineer, it becomes unnecessary to discuss the issue relating to the nature of the damages and the circumstances under which economic loss may be recovered. I have some doubt as to the manner in which this issue was resolved by the majority, since it would appear that different rules should be applicable to the recovery from the defendant builder and from the other parties to the action.

      Our conclusion could well be different, as to the architect, were there available to plaintiffs an “out of privity” system of warranties to protect warranty-like, that is contract-like, interests. (See Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, 98-99 (Simon, J., specially concurring).) The court did not extend the warranty-protections system that far in Redarowicz.


author: JUSTICE HEIPLE JUSTICE STOUDER,

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. REDMOND NEELY, Defendant-Appellant.
    Third District
    No. 82—832
    Opinion filed January 31, 1984.
    STOUDER, P.J., dissenting.
    Robert Agostinelli and Thomas A. Lilien, both of State Appellate Defender’s Office, of Ottawa, for appellant.
    L. Patrick Power, State’s Attorney, of Kankakee (John X. Breslin and Patricia Hartmann, both of State’s Attorneys Appellate Service Commission, of counsel), for the People.
   JUSTICE HEIPLE

delivered the opinion of the court:

After a jury trial in the circuit court of Kankakee County the defendant, Redmond Neely, charged with aggravated battery, was found guilty of the offense but mentally ill.

On this appeal three issues are presented. May the provisions of the statute authorizing a verdict of guilty but mentally ill be applied to a criminal offense occurring before the effective date of the statute? Was the instruction relative to insanity and mental illness so confusing that the defendant was deprived of a fair trial? Did the trial court fail to weigh certain mitigating factors before imposing the maximum sentence for aggravated battery?

In view of the nature of the issues presented any detailing of the circumstances of the incident are unnecessary. It is sufficient to say that the charge of aggravated battery grows out of an incident occurring on August 9, 1981, in which the victim, Henry Washington, was seriously injured after being shot by the defendant as a result of an argument and a fight. The defendant raised the affirmative defenses of insanity and self-defense. Extensive evidence of defendant’s mental history was presented including hospitalizations commencing in 1975, which was the year of his discharge from the army on account of bizarre behavior. A psychiatrist testifying in behalf of the defendant generally supported his claim of insanity at the time of the offense. To refute this testimony the State also proffered the testimony of a clinical psychologist who testified the defendant was suffering from a mental illness but under the usual tests of insanity the defendant was not insane. At the close of the evidence, the State indicated it would not seek a straight guilty verdict, but instead would argue for a verdict of guilty but mentally ill. The court instructed the jury on that verdict and on the affirmative defenses of insanity and justifiable use of force. The jury returned a verdict of guilty but mentally ill on the aggravated battery charge.

The first issue, the constitutionality of applying the verdict of guilty but mentally ill (Ill. Rev. Stat. 1981, ch. 38, pars. 6 — 2(c), 6 — 4) to offenses occurring before the effective date of the statute, has previously been discussed by this court in People v. Dally (1983), 115 Ill. App. 3d 35. In Dally we adopted the position that applying the statute to prior offenses was not constitutionally impermissible, and we adhere to our position in that case.

We next consider whether the court erred in giving an instruction. The State proceeded on the theory that the defendant was guilty of aggravated battery, but mentally ill at the time of the offense. In light of the theories of the defense and prosecution, the jury received instructions defining insanity, mental illness, self-defense and aggravated battery. Further, the State presented its instruction No. 7 to attempt to convey the elements of the case to the jury. The instruction was given over a defense objection that it was a nonpattern instruction and was not consistent with the law in issue in the case. On appeal, the defendant argues the instruction confused the jury by distorting the burden of proof of insanity. The objection of defense counsel at trial was so vague as to warrant a finding that the objection was not sufficiently specific to inform the trial court of the legal basis for the objection. Thus, this court could hold the point of the objection now argued on appeal was waived. However, in light of the probability that the combination of instructions on insanity and mental illness in future cases will give rise to the issue presented here on appeal, we shall decide the issue.

The instruction No. 7 reads as follows:

“To sustain the charge of Aggravated Battery, the State must prove the following propositions:
First: That the defendant knowingly or intentionally caused bodily harm to Henry C. Washington; and
Second: That the defendant used a deadly weapon; and
Third: That the defendant was not justified in using the force which he used; and
Fourth: That the defendant was sane at the time of the offense.
If you find from your consideration of all the evidence that each one of the propositions has been proved beyond a reasonable doubt, and you find, beyond a reasonable doubt, that the defendant was suffering from a mental illness at the time of the occurrence, you should find the defendant guilty but mentally ill.
If you find from your consideration of all the evidence that, first, the defendant knowingly caused bodily harm to Henry C. Washington, second, that the defendant used a deadly weapon, and third, that the defendant was not justified in using the force which he used, but that the defendant was insane at the time of the occurrence, then you should find the defendant not guilty by reason of insanity.
If you find from your consideration of all the evidence that any one of these propositions has not been proved beyond a reasonable doubt, you should find the defendant not guilty.”

In the case at hand, the trial court was faced with the difficult problem of combining an instruction on the insanity defense with an instruction on the new status of guilty but mentally ill. Consequently, the trial court tailored standard instructions to be compatible with the new verdict. The issues and elements instruction quoted above is a modification of Illinois Pattern Jury Instruction (IPI), Criminal, No. 11.10 (2d ed. 1981) (issues instruction on aggravated battery) and the Introduction to IPI Criminal ch. 24 — 25.00 (affirmative defenses). The Introduction (IPI Criminal ch. 24 — 25.00, at 547-48 (2d ed. 1981)) provides some guidance in drafting an instruction which will include the elements or issues of an affirmative defense. Nevertheless, the Introduction is not law. The trial court is allowed to deviate from the suggested instructions and format where necessary to conform to unusual facts or new law. 87 Ill. 2d R. 451(a); People v. Gibson (1981), 99 Ill. App. 3d 1068.

The Introduction (IPI Criminal No. 24 — 25.00 (2d ed. 1981)) suggests that elements or issues of an affirmative defense should be treated in two ways; first, by definition following the definition of the crime with which the defendant is charged; second, in the same instruction with the issues or elements of the crime and the State’s burden of proof. The Introduction recommends that the instructions be superimposed so that the jury receives a single instruction covering all the issues in the case. The trial court defined the affirmative defenses of insanity and justifiable use of force with court’s instruction No. 3 and defendant’s instruction No. 2 respectively, and defined the crime charged with People’s instructions Nos. 1 and 2. The instructions are clear, to the point and substantially comply with the suggested first treatment.

The second suggested treatment is satisfied by People’s instruction No. 7. Paragraphs one and two spell out the elements of the crime and the State’s burden of proof and include a reference to the justifiable use of force and the status of guilty but mentally ill. Paragraphs three and four also spell out the elements of the crime and the State’s burden of proof and include a reference to the justifiable use of force and the status of insanity. People’s instruction No. 7 sets forth the elements of the crime, the State’s burden of proof and provides the jury with a single instruction covering all of the issues in the case, as suggested by the Introduction. Furthermore, any doubt in the minds of the jury about the State’s burden was initially dispelled by the court’s instruction No. 5. Court’s instruction No. 5, given before People’s instruction No. 7, unequivoeably states the defendant’s presumption of innocence and places the burden on the State to prove the defendant’s guilt. People’s instruction No. 7, although perhaps not the best possible instruction, when read together with the other instructions, demonstrates a reasonable approach to the difficult problem of combining an instruction on the status of guilty but mentally ill with the affirmative defense of insanity and shall be upheld by this court.

Before moving to the third issue, this court would like to note that it does not subscribe to the arguments of both the State and the defendant which urge this court to evaluate People’s instruction No. 7 under the mandate found in section 115 — 4(j) of the Code of Criminal Procedure of 1963. (Ill. Rev. Stat. 1981, ch. 38, par. 115 — 4(j)). The • above-cited statute is not applicable to People’s instruction No. 7. People’s instruction No. 7 is an issues and elements instruction. The statute is only applicable to special verdicts. See People v. Eckles (1980), 83 Ill. App. 3d 292, 304.

In the third issue, we are asked to determine whether the trial court failed to weigh certain mitigating factors when sentencing the defendant. Statutory mitigating factors are found in section 5— 5 — 3.1 of the Unified Code of Corrections (Ill. Rev. Stat. 1981, ch. 38, par. 1005 — 5—3.1). Specifically, the defendant claims “there were substantial grounds tending to excuse or justify the defendant’s criminal conduct **■*.” (Ill. Rev. Stat. 1981, ch. 38, par. 1005 — 5—3.1(a)(4).) The defendant alleges that his mental illness is a substantial ground which the trial court failed to consider in mitigation. We disagree. The record indicates the trial court methodically reviewed the statutory factors in mitigation and was as aware of the defendant’s mental illness as his propensity for abnormal and dangerous behavior.

A trial court is given wide discretion to exercise its sentencing power and will not be reversed unless there is an abuse of discretion. We find the trial court did not abuse its discretion and imposed a fair sentence.

For the reasons set forth above the judgment of the trial court is affirmed.

Affirmed.

BARRY, J., concurs.

JUSTICE STOUDER,

dissenting:

I must disagree with the majority that the issues and elements instruction adequately instructed the jury as to all of the elements of the crime and adequately set forth the State’s burden of proof. Not only is instruction No. 7 confusing and internally inconsistent, but the format of the instruction does not comply with the Introduction’s recommendations (IPI Criminal ch. 24 — 25.00 (2d ed. 1981)), nor did the judge specially instruct the jury in accordance with the mandate of section 115 — 4(j) of the Code of Criminal Procedure of 1963 (Ill. Rev. Stat. 1981, ch. 38, par. 115 — 4(j)). The result was that the jury was not adequately instructed with respect to the affirmative defense of insanity, and therefore instruction No. 7 should not have been given.

I take exception specifically with paragraph three of instruction No. 7, which attempts to combine two affirmative defenses with the crime of aggravated battery and instruct the jury as to when it should find the defendant not guilty by reason of insanity. As the majority points out, there is no approved instruction combining the affirmative defense of insanity with the finding of guilty but mentally ill. The Introduction suggests how the jury is to be instructed when an affirmative defense is raised.

The Introduction (IPI Criminal ch. 24 — 25.00 (2d ed. 1981)) states: “The Committee believes that elements or issues of an affirmative defense should be treated in two ways: first, by definition following the definition of the crime with which the defendant is charged; second, in the same instruction with the issues or elements of the crime and the State’s burden of proof. See Chapters 6 through 23, supra. The appropriate issues and burden of proof defenses instruction should be superimposed upon the appropriate issues and burden of proof crimes instruction so that the jury receives a single instruction covering all of the issues in the case. See Chapter 27, infra, for examples.” (IPI Criminal ch. 24 — 25.00, at 548 (2d ed. 1981).)

Paragraph three of this instruction does not conform to the Introduction because the wording of paragraph three has been changed and instead of requiring the State to prove defendant’s sanity beyond a reasonable doubt, the instruction requires that the defendant be found insane. This is certainly not an adequate statement of the State’s burden as is required by the Introduction. Although, as the majority suggests, the Introduction does not have the force of law, it is a valuable guideline and should have been followed if possible in this case.

Both parties argue that we should also consider section 115 — 4(j) of the Code of Criminal Procedure of 1963 as it applies to instructing the jury on the insanity defense. Unlike the majority, I do not read People v. Eckles (1980), 83 Ill. App. 3d 292, 404 N.E.2d 358, as limiting the application of section 115 — 4(j) to special verdicts alone. The statute provides:

“(j) Unless the affirmative defense of insanity has been presented during the trial, the jury shall return a general verdict as to each offense charged. When the affirmative defense of insanity has been presented during the trial, the court shall provide the jury not only with general verdict forms but also with a special verdict form of not guilty by reason of insanity, as to each offense charged, and in such event the court shall separately instruct the jury that a special verdict of not guilty by reason of insanity may be returned instead of a general verdict but such special verdict requires a finding by the jury that the defendant committed the acts charged but at the time of the commission of those acts the defendant was insane. In the event of a verdict of not guilty by reason of insanity, the jury shall state in its verdict whether or not the defendant has recovered from his former condition of insanity” (Ill. Rev. Stat. 1981, ch. 38, par. 115 — 4(j))

and clearly refers to instructing the jury. In Eekles the court held the special instruction and verdict form were not subject to the charge that it shifted the burden of proof to the defendant but in doing so the court emphasized that the other instructions which presumably included definitions, issues instructions and burden of proof instructions, had unequivocally cast the burden upon the State. Not only is the third paragraph of People’s instruction No. 7 substantially different from the language of the statute, it is not separate and distinct from those instructions establishing the burden of proof on the State to prove the sanity of the defendant. I believe the procedure described in the statute should have been followed and the third paragraph of the instruction should not have been included in the issues instruction.

The inclusion of paragraph three in People’s instruction No. 7 also gives rise to several other problems. The first of the three propositions described in this paragraph states the defendant “*** knowingly caused bodily harm ***” and yet the jury might find him insane. At best this conflict is confusing. Again in People’s instruction No. 1 the fourth paragraph refers to “*** any one of these propositions ***.” What propositions do “these propositions” refer to? Do they refer to the four propositions in paragraph one, to the fifth proposition on mental illness in paragraph two, or to the three propositions in paragraph three? As a part of the pattern instruction, paragraph four of People’s instruction No. 7 would usually follow the first paragraph of the instruction but when paragraph three is added to the instruction paragraph four becomes highly confusing if not meaningless. Furthermore, because the wording in paragraph three has been changed from IPI Criminal No. 24 — 25.01A, specifically the word “sane” has been changed to “insane” and “guilty” to “not guilty,” the clear implication is that the defendant must prove himself insane. Worse yet, when paragraph three is read together with the final paragraph, the jury is instructed to find the defendant not guilty if the defendant is not proved insane beyond a reasonable doubt. The double negative calls for the jury to find the defendant not guilty if he was sane at the time of the commission of the crime. This is clearly not an adequate instruction.

I believe the inclusion of paragraph three in People’s instruction No. 7 was error and was reversible error because it resulted in the jury not being adequately instructed on the elements of the case. (People v. Jenkins (1977), 69 Ill. 2d 61, 370 N.E.2d 532.) I, therefore, would have reversed the circuit court of Kankakee County.