author: JUSTICE BARRY PRESIDING JUSTICE STOUDER,

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. DONALD SEIDEL, Defendant-Appellant.
    Third District
    No. 82—349
    Opinion filed June 9, 1983.
    STOUDER, P.J., dissenting.
    Robert Agostinelli and Frank W. Ralph, both of State Appellate Defender’s Office, of Ottawa, for appellant.
    Gary L. Spencer, State’s Attorney, of Morrison (John X. Breslin and Gary F. Gnidovec, both of State’s Attorneys Appellate Service Commission, of counsel), for the People.
   JUSTICE BARRY

delivered the opinion of the court:

Following a bench trial in the circuit court of Whiteside County, the defendant, Donald Seidel, was found guilty of unlawful possession of cannabis and unlawful possession of a controlled substance (LSD) in violation of section 4(d) of the Cannabis Control Act (Ill. Rev. Stat. 1979, ch. 56^2, par. 704(d)) and section 402(b) of the Illinois Controlled Substances Act (Ill. Rev. Stat. 1979, ch. 56xlz, par. 1402(b)), respectively. Defendant was sentenced to serve 30 days in the county jail and two years on probation. He appeals his convictions. We affirm.

On June 24, 1981, Officer Pete Zolli of the Rock Falls police department was patrolling the neighborhood of 601 Third Avenue in Rock Falls, where defendant resided with his grandmother. Around 4:04 p.m., Zolli observed the defendant as he met another male, later identified as Mike Bushaw, at the rear door of the residence. A bag containing what appeared to the officer to be cannabis was exchanged during the encounter.

Bushaw appeared to have seen Zolli’s car which was partially concealed by a garage. Bushaw got into his car and drove off. Zolli followed for several blocks. At one point Bushaw hesitated as if to throw something from the car as he proceeded down an alley. Bushaw ran a stop sign and was ultimately stopped and given a traffic warning by Zolli. Zolli then returned to the alley; and he located, near the point where Bushaw had hesitated, a bag which was later determined to contain 13 grams of a variety of cannabis known as “Mexican Sensimillion.”

Zolli returned to the defendant’s residence where he met Mr. and Mrs. Thicksten, the defendant’s grandparents. The Thickstens stated that they owned the residence and that the defendant occupied a room on the second floor. Officer Zolli asked whether the defendant rented the room, and Mrs. Thicksten stated that he did not. Mr. Thicksten said nothing. After explaining that he suspected that the defendant may have been involved in a recent cannabis transaction, Zolli requested permission to search the defendant’s room. Mrs. Thicksten picked up a key and led the officer to the defendant’s room, opened the door and allowed him to enter. Officer Zolli observed a mattress on the floor with a plant-like substance on it, both loose and in a plastic bag. On the floor beside the mattress were plastic bags and bottles containing capsules. Zolli told Mrs. Thicksten that he would be coming back later to do a more thorough search of the room if she would permit it.

Zolli returned to the police station and consulted with the State’s Attorney concerning the investigation. That evening, Zolli returned to the Thicksten residence with Lieutenant Mangan. Mrs. Thicksten signed a consent-to-search form and gave the officers the key to the defendant’s room. The officers proceeded upstairs, entered the room and gathered various containers of material, later determined to be cannabis, weighing just under 17.3 grams.

Around 8 p.m., while the search of the defendant’s room was underway, the defendant entered the room. The defendant was read his Miranda rights, he waived them, and agreed to talk to the officers. Defendant asked what was the fine for having 28.8 grams of cannabis. Zolli said that was a Class A misdemeanor. The defendant admitted that the material found in the room belonged to him as did the “Mexican Sensimillion,” which Zolli had retrieved from the alley after chasing Mike Bushaw earlier in that day.

The defendant was taken to the Rock Falls police station. A search of the defendant’s person revealed a plastic bag containing a piece of white, perforated paper located between the laces and the tongue of his left tennis shoe. The defendant again waived his Miranda rights and admitted that the paper contained LSD. The defendant was charged in two counts with unlawful possession of cannabis and LSD. He pleaded not guilty and filed a motion to suppress evidence based on illegal search and seizure.

At the suppression hearing, Mrs. Thicksten stated that the defendant had come to live with her about six months earlier because of family problems at home. At the time of the search, defendant was one month over age 18. According to Mrs. Thicksten, the defendant paid rent of $10 per week. In addition to the defendant’s room, Mrs. Thicksten said she rented out two other rooms on the second floor of her house. Although Mrs. Thicksten neither cleaned the rooms nor did the laundry for her guests, she had, on two or three occasions, gone into the defendant’s room to remove various items of personal belongings that she had stored there. Generally, though, she would ask the defendant to get for her what she needed from the room. The particular room occupied by the defendant had not been rented out prior to the defendant’s arrival in the household. Mrs. Thicksten’s renters generally locked their doors to their rooms; however, the defendant had never specifically told Mrs. Thicksten not to enter his room.

Based upon the testimony of Mrs. Thicksten and Officer Zolli, the trial court made findings of fact and concluded that Mrs. Thicksten “had (a) common authority over the premises, and-or (b) she possessed sufficient relationship to the premises sought to be inspected to give her own consent.” Defendant’s motion to suppress was denied accordingly.

The matter proceeded to trial, the defendant was found guilty, convicted, and sentenced as aforesaid. In this appeal, defendant raises two issues: (1) whether Mrs. Thicksten had authority to consent to a warrantless search of the defendant’s locked bedroom; and (2) whether the State proved beyond a reasonable doubt that the defendant possessed more than 30 grams of cannabis where the evidence established that he had lesser quantities in his possession on two separate occasions.

One of the exceptions to the constitutional requirement that law enforcement officials obtain a valid search warrant prior to conducting a search of private property is that the search be conducted pursuant to the voluntary consent of a person with authority to waive the warrant requirement and authorize the search. The defendant himself need not have given consent if the prosecution proves “that permission to search was obtained from a third party who possessed common authority over or other sufficient relationship to the premises or effects sought to be inspected.” (United States v. Matlock (1974), 415 U.S. 164, 171, 39 L. Ed. 2d 242, 250, 94 S. Ct. 988, 993.) Whether a third party possessed the requisite authority over or relationship to the premises sought to be searched is clearly a question of fact. Some guidance to the decision-making process can be found, however, in footnote 7 of the Matlock opinion. There the Supreme Court states:

“Common authority is, of course, not to be implied from the mere property interest a third party has in the property. The authority which justifies the third-party consent does not rest upon the law of property, with its attendant historical and legal refinements, [citations] but rests rather on mutual use of the property by persons generally having joint access or control for most purposes, so that it is reasonable to recognize that any of the co-inhabitants has the right to permit the inspection in his own right and that the others have assumed the risk that one of their number might permit the common area to be searched.” (415 U.S. 164, 171 n.7, 39 L. Ed. 242, 250 n.7, 94 S. Ct. 988, 993 n.7.)

Illinois courts, faced with third-party consent issues, have attempted to resolve them by applying a “mutual use” or “common authority” test. (People v. Stacey (1974), 58 Ill. 2d 83, 317 N.E.2d 24; People v. Heflin (1978), 71 Ill. 2d 525, 376 N.E.2d 1367; People v. Johnson (1974), 23 Ill. App. 3d 886, 321 N.E.2d 38.) Both Matlock and Stacey involved searches of bedrooms shared by the defendants and their respective wives (Matlock involved a defacto, as opposed to legal, relationship). In both cases, obviously, the wives, as co-inhabitants of the bedrooms, could be said to have had mutual use of the premises. Based on the conjugal relationships existing between the defendants and the persons consenting to the searches in these cases, it could be generally stated that the persons consenting had joint access or control for most purposes over the premises searched.

In Heflin, the defendant’s brother Jon turned over to authorities letters found in the defendant’s bedroom. The defendant had requested that Jon collect the defendant’s personal belongings from the room and store them in Jon’s house. The defendant did not mention the letters or give specific instructions forbidding others to have access to them. On review, the court found that, under the Matlock test, Jon had “common authority” over the letters.

In Johnson, the appellate court applied the “common authority” test to a warrantless search of the defendant’s bedroom which was authorized by his mother. The defendant was married, but not living with his wife. He occupied a bedroom in his parents’ house. The room was “freely accessible to the mother at all times. She cleaned it every weekend and changed the linen.” (23 Ill. App. 3d 886, 892, 321 N.E.2d 38, 43-44.) There was no indication that the door to the room was ever locked or that the defendant’s mother had been instructed not to enter the room. On review, the court determined that these facts were sufficiently distinct from People v. Nunn (1973), 55 Ill. 2d 344, 304 N.E.2d 81, cert. denied (1974), 416 U.S. 904, 40 L. Ed. 2d 108, 94 S. Ct. 1608 (a pre-Matlock decision in which an “expectation of privacy” test was determined applicable to third-party consent-to-search cases), to sustain the trial court’s denial of defendant’s motion to suppress.

Although Nunn can no longer be said to state the proper constitutional test for third-party consent cases, the facts therein should nonetheless be analogized to those presently before us, inasmuch as the Stacey court has made it clear that the result of Nunn would have been the same— i.e., evidence obtained as a consequence of warrant-less search based on third-party consent should have been suppressed — regardless of which tests were applied. In Nunn, defendant resided in a bedroom and adjoining kitchenette located within his mother’s house. Defendant paid no rent, at least not on a regular basis. Defendant was age 19 on the date of the search. Ten to 14 days prior to the search, defendant left the residence, locked the door to his quarters and instructed his mother to allow no one to enter the room. Defendant’s mother did not object to his request that she not open the locked door. Based on these facts, the Nunn court held that the defendant had an expectation of privacy and that it was reasonable. Defendant had not waived his fourth amendment rights, and his mother had no authority to do so. Thus, the warrantless search of defendant’s rooms was held unreasonable, requiring suppression of the fruits of that search.

The Stacey court reanalyzed the Nunn factual setting under the Matlock “mutual use” test and concluded that, because the mother in Nunn had been specifically instructed not to enter the locked rooms and because she had previously been permitted to enter it only for cleaning purposes and because the rooms were otherwise set aside for the defendant’s exclusive use, the mother “did not have ‘mutual use’ of the defendant’s room, nor could it be said that the mother ‘generally had joint access or control for most purposes’ of the room.” People v. Stacey (1974), 58 Ill. 2d 83, 89, 317 N.E.2d 24, 27.

In People v. Nolan (1978), 59 Ill. App. 3d 177, 375 N.E.2d 445, the court reversed an order of suppression of evidence obtained during a warrantless search of defendant’s bedroom located in his parents’ home. Defendant’s mother had consented to the search. The court stated that “there is no question that Mrs. Nolan had authority to consent to a search of her son’s bedroom.” Unlike Nunn, the facts of Nolan disclosed that the defendant did not lock the door to his room and had not instructed his parents to keep anyone out of it. Furthermore, defendant acknowledged that his parents had access to the room. 59 Ill. App. 3d 177, 187, 375 N.E.2d 445, 453.

In In re Salyer (1977), 44 Ill. App. 3d 854, 358 N.E.2d 1333, this court considered the validity of a consent to search by a juvenile respondent’s mother. The minor’s bedroom was occupied exclusively by him. At the time of the search, the minor was age 15. There was no evidence that he had instructed his mother not to enter the room. The minor cleaned the room himself and removed laundry from it. The minor kept the room locked with a combination lock. The combination was known only to him. There was no formal arrangement for rent, although the minor has occasionally contributed to household expenses. The minor’s mother would enter the bedroom after first knocking, and then only for the purpose of asking her son a question. During the three-month period preceding the search, the minor had left the door to the room unlocked. On these facts, the trial court denied the juvenile respondent’s motion to suppress, finding that the minor’s mother retained ultimate authority over the premises such that her consent to search was valid. On appeal, this court affirmed, finding that the mother had an implied “right to exert parental authority and control over a minor son’s surroundings and that such implied right to control obviously includes a room in the home of the mother.” (44 Ill. App. 3d 854, 859, 358 N.E.2d 1333, 1336.) This court further found that the mother had “at least common authority” as to the minor’s bedroom. Finally, the court distinguished the case from Nunn by noting that there had been no showing of any instruction to the mother to keep others from entering the room.

Without attempting to analyze every reported third-party consent case decided in Illinois, we believe that we nonetheless should consider the recent Fifth District decision in People v. Shaffer (1982), 111 Ill. App. 3d 1054, 444 N.E.2d 1096, before explaining our resolution of the issue in the present case. In Shaffer, the defendant’s younger brother, who did not live in the defendant’s residence, had admitted police officers into the defendant’s house. A warrantless search of the house disclosed cannabis by a chair in the living room. Defendant’s motion to suppress the cannabis was allowed by the trial court on grounds that the defendant’s brother lacked authority to consent to the officers’ entry in the house. On appeal, the court reversed, finding that the defendant’s brother was “a frequent visitor who had never been prevented from inviting friends into defendant’s home. Under the circumstances we think that Scott [the defendant’s brother] had sufficient relationship to the premises to allow others to enter and, hence, had actual authority to permit police to enter an area where a visitor would normally be received.” (Emphasis added.) 111 Ill. App. 3d 1054,1059, 444 N.E.2d 1096, 1099.

Our research of Illinois case law indicates that Shaffer is the first reported decision in which third-party consent has been determined on the basis of “other sufficient relationship to the premises” rather than on a finding of “mutual use” or “common authority.” The trial court’s finding in that instant case comports with Shaffer to the extent that it recognizes that the Matlock “common authority” analysis, generally applicable where the relationship between the defendant and the consenting third party is particularly close, may be considered as an alternative to the “other sufficient relationship” analysis under proper circumstances.

The facts of the instant case relevant to our determination are these: The defendant was over age 18 at the time of the search. He was related to the person giving consent to search as a grandson. The home in which defendant resided was also occupied by defendant’s grandparents who owned it. The defendant kept his bedroom door locked; however, the defendant’s grandmother had a key to the defendant’s bedroom door. The grandmother stored personal belongings in the room. She had entered the room on two or three occasions during the six-month period prior to the search without consent. During these entries, the grandmother had removed certain of her personal items. There was no formal rental agreement between th: defendant and his grandmother. Finally, the defendant had not instructed his grandmother to keep others out of the room.

In our opinion, these facts present a situation in which “other suf ficient relationship to the premises” has been established sufficient to sustain the trial court’s denial of defendant’s motion to suppress. Unlike Nunn, the defendant’s bedroom was not used “exclusively” by him. It is uncontroverted that his grandmother used it for storing furniture and clothes. There is no indication of record that the defendant objected to the fact that on occasion his grandmother had entered the room to retrieve her stored belongings; and of course there is no indication that the defendant specifically instructed his grandmother to keep others out of the room. Even though at trial Mrs. Thicksten referred to the defendant as a “roomer,” we find sufficient support in Officer Zolli’s testimony for the trial court’s conclusion that the defendant’s relationship to his grandmother was not merely that of landlord-tenant. We find, as did the trial court, that under the circumstances presented, Mrs. Thicksten retained a sufficient relationship to the premises — i.e., defendant’s bedroom — so that it was reasonable to recognize that the grandmother had the right to permit the inspection of the room in her own right and that the defendant had assumed the risk that she might permit the room to be searched. Mrs. Thicksten’s consent to the officers’ warrantless searches constituted a valid waiver of the defendant’s fourth amendment rights. We affirm the trial court’s denial of defendant’s motion to suppress.

Finally, we turn to defendant's second issue on appeal. Without citation to any authority for his theory, defendant asserts that his conviction for possession of more than 30 grams of cannabis cannot be sustained absent proof that he simultaneously possessed the bag of cannabis recovered from the alley and that which was found in his bedroom hours later. We agree that in order to convict a defendant for criminal possession of a designated amount of a substance, it must be established beyond a reasonable doubt that the total amount was possessed at some time, rather than proving merely that lesser amounts were possessed at various times over some extended period and cumulated by the prosecution in order to obtain a conviction of a greater degree. Proof of the element of simultaneity of possession may be by uncontroverted circumstantial evidence where, as here, lesser quantities of the substance are gathered by the police from two separate locations and combined to form the basis for a single conviction.

Around 8 p.m., the defendant admitted that he owned both the bag recovered from the alley following Officer Zolli’s encounter shortly after 4 p.m. with Mike Bushaw and the substance gathered from defendant’s bedroom that evening. Zolli testified that the defendant had voluntarily inquired of him, upon, defendant’s arrival to his bedroom, what the fine was for possession of 28.8 grams of cannabis. Only 17.2 grams was gathered from the room during the officers’ search at 8 p.m. A reasonable inference to be drawn from the evidence was that the defendant himself impliedly acknowledged that he had simultaneously possessed the bag found in the alley (13 grams) and the quantity remaining in his bedroom (17.2 grams) at 4:04 p.m. when the defendant was observed handing a bag to Bushaw. Although the defendant was not present in the bedroom on either occasion when his grandmother admitted the officers into the room, we need not speculate that it was after the transaction with Bushaw that the defendant acquired and deposited within his bedroom some or all of the cannabis found therein by the officers. The State’s uncontradicted circumstantial evidence of simultaneous possession of more than 30 grams of cannabis, together with reasonable inferences based on the evidence, was sufficient to support the defendant’s conviction.

For the reasons stated, we affirm the defendant’s convictions.

Affirmed.

ALLOY, J., concurs.

PRESIDING JUSTICE STOUDER,

dissenting:

I respectfully disagree with the reasoning and result reached by my colleagues. In my opinion consent for the search was not given by a person having the right or authority to consent to the search and hence the search and seizure made without valid consent was constitutionally impermissible and the evidence seized should have been suppressed.

The general rule is that to conform to constitutional requirements, a search must be based on a search warrant unless the search comes within one of the recognized exceptions to the warrant requirements. (Stoner v. California (1964), 376 U.S. 483, 11 L. Ed. 2d 856, 84 S. Ct. 889.) Consent, of course, of a party having the right and authority to permit a search, is one of the recognized exceptions. Ordinarily the consent to a search is that of the person charged with being in possession of the property, but consent may be given by a third person under proper circumstances. United States v. Matlock (1974), 415 U.S. 164, 39 L. Ed. 2d 242, 94 S. Ct. 988.

I believe the majority has misinterpreted and misapplied the cases which it relies on to support its result. In my opinion People v. Nunn (1973), 55 Ill. 2d 344, 304 N.E.2d 81, and In re Salyer (1977), 44 Ill. App. 3d 854, 358 N.E.2d 1333, are controlling authorities in support of the proposition the third party purporting to consent to the search involved in this case had no authority to consent to the search.

The facts in People v. Nunn are in my opinion legally indistinguishable from those in the instant case. The Nunn decision was reaffirmed in People v. Stacey (1974), 58 Ill. 2d 83, 317 N.E.2d 24, after re-examination in light of the Matlock decision. In Stacey, the court emphasized that part of footnote 7 to the Matlock opinion which stated “ '*** but rests rather on mutual use of the property by persons generally having joint access or control for most purposes, so that it is reasonable to recognize that any of the co-inhabitants has the right to permit the inspection in his own right and that the others have assumed the risk that one of their number might permit the common area to be searched.’ ” (58 Ill. 2d 83, 88, 317 N.E.2d 24, 27.) As in the Nunn case, the facts disclose the grandmother did not have “mutual use” or “joint access or control for most purposes.” 58 Ill. 2d 83, 89, 317 N.E.2d 24, 27.

In In re Salyer (1977), 44 Ill. App. 3d 854, 358 N.E.2d 1333, the mother’s consent to the search of her minor son’s locked room was approved not because of her actual mutual use or joint and general access but substantially because of her role and statutory duties and responsibilities as mother. Numerous statutes are cited and quoted which according to the court, granted her paramount authority over all premises occupied by her minor children. In relying on the minority of the son and the statutory duties to support the authority of the third party to consent to the search, the conclusion is inescapable that absent the relation of parent and minor child the authority to consent to the search would have been lacking. In this case the defendant was not a minor and the third person granting the consent was not a parent nor standing in the relationship of parent.

The majority has cited and discussed People v. Shaffer (1982), 111 Ill. App. 3d 1054, 444 N.E.2d 1096, and has suggested it offers some support for its decision. I find the Shaffer opinion of little assistance in the decision of the case. So far as the opinion is concerned, some of the language of third-party consent searches appear, but how such language affects or is affected by the underlying facts is confusing. The opinion holds that a younger brother of the defendant had the right to invite a police officer into the living room of the defendant’s house, but nowhere does the opinion suggest the younger brother consented to a search of the living room or any other portion of the premises. Additionally, the facts suggest the defendant himself was also present in the living room and he consented to a search of the premises. However the facts in Shaffer are viewed, they are substantially different from those in Nunn, Salyer and in the instant case and accordingly, may not by way of analogy support the propriety of the consent in the instant case.

In summary, I believe the cases require the conclusion that the person granting the consent in this case did not have the authority to do so and consequently the motion to suppress the evidence should have been granted.


source: Caselaw Access Project

author: JUSTICE WHITE

license: Public Domain

text:
    PAT WITT, Plaintiff-Appellee, v. FOREST HOSPITAL, INC., et al., Defendants-Appellants.
    First District (3rd Division)
    No. 81—2897
    Opinion filed May 25, 1983.

      Richard H. Hoffman, Glen E. Amundsen, and Victor J. Piekarski, all of Querrey, Harrow, Gulanick & Kennedy, Ltd., of Chicago, for appellants.
    Patrick T. Driscoll, Jr., of Chicago (David J. O’Keefe, of counsel), for appellee.
   JUSTICE WHITE

delivered the opinion of the court:

Plaintiffs, Pat Witt and Sheila Mroczkowski, filed a complaint in the circuit court of Cook County seeking compensatory and punitive damages and injunctive relief against their ex-employer, Forest Hospital, Inc., and Dr. Robert Simon, administrator of the hospital. Each alleged that her employment as a nurse at the hospital had been terminated because she had provided information to the Guardianship and Advocacy Commission (GAC) and that this violated section 34 of the Guardianship and Advocacy Act (Ill. Rev. Stat. 1979, ch. 911/2, par. 734). The GAC was permitted to intervene as a plaintiff, and it filed a complaint in intervention. After a bench trial, the trial court entered judgment in favor of the individual plaintiffs, awarded compensatory damages, awarded punitive damages in the amount of $5,000 to each individual plaintiff, and entered an order requiring Forest Hospital to restore them to the positions of employment they held prior to their terminations. Subsequently, the trial court entered an order establishing $2,976 as the amount of compensatory damages due to plaintiff Witt. Coplaintiff Mroczkowski filed a release and satisfaction of judgment and is not involved in this appeal. Defendants, Forest Hospital and Simon, argue on appeal that the trial court’s findings that Witt was terminated and that she was penalized, sanctioned or restricted as a consequence of her dealings with the GAC were not supported by the evidence; that the award of compensatory damages to Witt was contrary to the manifest weight of the evidence; that Witt was not entitled to punitive damages; and that the order requiring Witt’s reinstatement to her prior position of employment was erroneous. On cross-appeal, Witt contends that the finding of the trial court that she failed to mitigate her damages was erroneous.

Before addressing the factual issues raised by defendants, we must determine whether a nurse whose employment has been terminated by a hospital in violation of section 34 of the Guardianship and Advocacy Act has a private cause of action for retaliatory discharge against the hospital to remedy the violation. Section 34 provides:

“A person, who in good faith, files a complaint or provides information to the Commission or any division thereof, including private citizens and employees of service providers, shall not be subject to any penalties, sanctions, or restrictions as a consequence of filing the complaint or providing the information.” (Ill. Rev. Stat. 1979, ch. 911/2, par. 734.)

There is no dispute that Forest Hospital is a “service provider.” Thus, if Witt, an employee of Forest Hospital, was penalized, sanctioned or restricted as a consequence of providing information to the GAC, she is entitled to any protection provided by section 34. Section 34, however, does not specifically authorize a private right of action.

Our supreme court has recognized the tort of retaliatory discharge as “an exception to the general rule that an ‘at-will’ employment is terminable at any time for any or no cause.” (Palmateer v. International Harvester Co. (1981), 85 Ill. 2d 124, 128, 421 N.E.2d 876; Kelsay v. Motorola, Inc. (1978), 74 Ill. 2d 172, 181, 384 N.E.2d 353.) In Palmateer, the supreme court established the contours of the tort: “The cause of action is allowed where the public policy is clear, but is denied where it is equally clear that only private interests are at stake.” (85 Ill. 2d 124, 131.) In other words, the foundation of the tort lies in the protection of public policy. 85 Ill. 2d 124, 133.

By enacting the Guardianship and Advocacy Act, the General Assembly intended “to create the Guardianship and Advocacy Commission, to safeguard the rights and to provide legal counsel and representation for [the mentally ill and the developmentally disabled] and to create the Office of State Guardian for disabled persons.” (See 1978 Ill. Laws 2020, 2028.) And section 34 of the Act clearly establishes that the public policy of this State is to protect employees of service providers, who in good faith, provide information to the GAC. Accordingly, we hold that a nurse whose employment has been terminated by a service provider, because she in good faith provided information to the GAC, has a private cause of action for retaliatory discharge against the service provider. Such an action is necessary to uphold and implement the public policy behind section 34 and the Guardianship and Advocacy Act as a whole. If we were to hold otherwise, the ability of the GAC to safeguard the rights of the mentally ill and the developmentally disabled would be substantially hampered.

Furthermore, we believe that an employee of a service provider is a member of a protected class for whose benefit section 34 was enacted; that implication of a private right of action for violations of section 34 is consistent with the underlying purpose of section 34 and of the Guardianship and Advocacy Act in general; that termination is an injury which section 34 was designed to prevent; and that implication of a civil private right of action is necessary to provide an adequate remedy for violations of section 34. All of these factors support the existence of a private remedy. See Sawyer Realty Group, Inc. v. Jarvis Corp. (1982), 89 Ill. 2d 379, 391, 432 N.E.2d 849; Sherman v. Field Clinic (1979), 74 Ill. App. 3d 21, 29-30, 392 N.E.2d 154.

Defendants argue, however, that the trial court’s findings that Witt was terminated and that she was penalized, sanctioned or restricted as a consequence of her dealings with the GAC were not supported by the evidence. The parties agree, with respect to these arguments, that the findings of fact of a trial court, sitting without a jury, will not be disturbed unless manifestly erroneous.

Pat Witt testified at trial that on September 24, 1979, she was hired to work as the head nurse of the Manor House Unit of Forest Hospital, a private psychiatric hospital located in Des Plaines, Illinois. Her duties included administration and the supervision of three patient treatment teams, and one of these teams was the orthomolecular team. During her employment at the hospital, she never received a written “work warning” from any employee superior in rank to her. Such warnings were used by the hospital as disciplinary measures.

According to Witt, on August 20, 1980, she had a telephone conversation with Dr. Melvin Nudelman, the physician in charge of the Manor House Unit, concerning a patient in the orthomolecular program who wanted to terminate his participation in the program. She told Nudelman that a doctor had threatened to have the patient committed, and that she intended to support the patient’s position. Subsequently, the patient contacted the GAG, and on August 21, 1980, a staff attorney from the GAG, named Jerry Brost, came to the hospital and had two conversations with Witt. The following day, Witt made a telephone call from her home to the Human Rights Authority (HRA), a division of the GAG. She spoke to Ms. Betty McKee concerning rights violations and patient care issues. During the conversation, McKee told Witt that the GAG had already planned an investigation of Forest Hospital. On August 23, 1980, Witt spoke to Dr. Robert Simon, administrator of the hospital. She told him that the HRA was planning an investigation of the hospital, and that she had spoken to the HRA. She asked for his advice on how to prepare for the investigation, but he did not respond. On August 26, 1980, Witt spoke to Michael Artery, general attorney for the hospital, in his office at the hospital. She also told him that she had spoken to the HRA. On August 27, 1980, Witt had a conversation with Karen Sarasin, director of nursing at the hospital, and Witt told her about the upcoming investigation. Witt’s next work day after the day of this last conversation was September 2, 1980. On that day, Witt met with Sarasin and Dr. Simon in Sarasin’s office. Dr. Simon told Witt that he was relieving her from her position as head nurse, and he offered her a position as a staff nurse in another unit. That position was three grades below head nurse. Witt refused the offer, and after finishing her shift that day, she took accrued sick days off of work until September 10, 1980. On September 16, 1980, Witt testified at a commitment hearing on behalf of the patient. She had been subpoenaed by the GAG. On September 19, 1980, Witt and coplaintiff Mroczkowski, who also testified that her employment status at Forest Hospital was uncertain after she had had contact with the GAG, went to Sarasin’s office at the hospital and requested from Sarasin a written statement of their employment status. Sarasin did not respond, and Witt told her that the Illinois Nursing Association had advised them that in the absence of such a written statement, they should report for duty to their respective positions at the hospital. Subsequently, Dr. Simon came to Sara-sin’s office. Dr. Simon shouted at them, and Witt asked him about her and Mroczkowski’s employment status. Dr. Simon would not answer this inquiry, so Witt told him about the advice they had received from the Illinois Nursing Association. Dr. Simon responded that Witt and Mroczkowski were trespassing on hospital property and that if they reported for duty the next morning and entered any clinical areas, they would be arrested for assault and battery as well as trespassing. After this exchange, no one from the hospital, including Dr. Simon and Sarasin, ever called Witt concerning a position of employment for her at the hospital. Mroczkowski’s testimony as to the confrontation with Dr. Simon on September 19, 1980, was substantially similar to that of Witt.

Defendants suggest it was merely coincidental that Forest Hospital’s action with respect to Witt occurred at about the same time as her dealings with the GAG. They contend that the action in relieving her of her duties as head nurse was taken because of Witt’s lack of support for the orthomolecular treatment program and because of an incident involving the mishandling of a patient by Witt. They rely primarily on certain testimony by Karen Sarasin and Dr. Robert Simon. Sarasin testified that Witt had difficulty administering and supervising the orthomolecular treatment program because of her negative and antagonistic attitude toward that program, and that Witt had made derogatory comments in her presence about Dr. Thomas Stone, the physician in charge of the orthomolecular team, and about the orthomolecular program itself. As director of nursing, it was Sarasin’s job to evaluate the head nurses, including Witt. Sarasin made written good evaluations of Witt every two months, and according to Sarasin, Witt received evaluations. In the written evaluation of Witt’s performance for February and March of 1980, however, Sarasin had written: “Pat is efficient in planning and organizing work, however, her disagreement with one of the treatment programs in the hospital contributes to an uncomfortable situation on the unit.” The program referred to by this remark was the orthomolecular program. Dr. Simon testified that an incident involving Witt’s mishandling of a certain patient on August 27 or 28, 1980, led to the decision to relieve Witt from her position as head nurse.

The trial court, after hearing the evidence, found that on September 2, 1980, Witt was demoted and that she was later terminated. Further, the trial court found that Witt was terminated because of her communication with the GAC, not because of apparent deficiencies in her work. These findings of fact cannot be said to be against the manifest weight of the evidence. Witt’s testimony concerning the events of September 19, 1980, was sufficient to support a finding that her employment was terminated. Furthermore, her testimony was sufficient to support a conclusion that she was terminated because she had provided information to the GAC, notwithstanding the testimony of Sarasin and Dr. Simon. The trial judge, as the trier of fact, was in a position superior to this court to observe the conduct of the witnesses while testifying, to determine their credibility, and to weigh the evidence and determine the preponderance thereof. We will not disturb his finding that Witt was terminated because of her communication with the GAC.

Defendants also argue that the relief awarded to Witt was improper. We first address the propriety of the order of the trial court enjoining defendants to restore Witt to her position as head nurse at Forest Hospital. Defendants rely on the well-settled rule that personal service contracts should not be specifically enforced. In Zannis v. Lake Shore Radiologists, Ltd. (1979), 73 Ill. App. 3d 901, 904, 392 N.E.2d 126, the court stated: “Plaintiff’s contract with defendant *** was a personal service contract. It is well settled that, with reference to such contracts, when specific performance is sought, a court should not compel an employee to work for his employer, nor compel an employer to retain an employee in his service. [Citations.]” (See also Kurle v. Evangelical Hospital Association (1980), 89 Ill. App. 3d 45, 53-54, 411 N.E.2d 326.) The Zannis court stated the reasons behind this rule. First, it would be impractical, if not impossible, for a court to provide the continuous supervision necessary to enforce an order for specific performance, especially where the contract calls for services which require special skill, knowledge, judgment or discretion. (73 Ill. App. 3d 901, 904.) Secondly, since personal service contracts often require a relationship of cooperation and trust between the parties to the contract, as a matter of public policy courts will avoid the friction that would be caused by compelling an employee to work, or an employer to hire or retain someone against their wishes. 73 Ill. App. 3d 901, 905.

Witt contends that Zannis and Kurle are distinguishable, because this case involves the tort of retaliatory discharge, not specific performance of a contract. She further contends that section 34 of the Guardianship and Advocacy Act would not provide effective protection for employees discharged in violation thereof, unless reinstatement was available as a remedy, and that an order of reinstatement may be necessary to make an injured plaintiff whole.

Section 34, however, does not authorize reinstatement as a remedy for its violation. Additionally, Witt does not cite any Illinois case law supporting the availability of reinstatement as a remedy for a retaliatory discharge.

Although we are unwilling to say that reinstatement should never be available as a remedy for violations of section 34 (see Kurle v. Evangelical Hospital Association (1980), 89 Ill. App. 3d 45, 56 (Seidenfeld, P.J., specially concurring)), we are of the opinion that reinstatement is not an appropriate remedy under the facts and circumstances of the instant case. In this case, the trial judge made a written finding of fact that Witt was insubordinate, disruptive and openly critical of and insulting to employees superior in rank to her at the hospital. Although the trial judge also found that Witt’s communication with the GAG triggered the action taken by the hospital against her, we believe that the former finding makes an award of reinstatement inappropriate. To compel the hospital to reinstate Witt under these circumstances, we would have to ignore the relationship of cooperation and trust required between a nurse and the hospital that employs her.

The trial court’s award of compensatory damages to Witt assumed that she would be reinstated to her position as head nurse. In a written opinion, the trial court stated: “[T]he measure of damages [as to Witt] is the difference between the amount she would have earned as head nurse from the date of her last employment in that position until her reinstatement to such position less the amount she would have earned as a staff nurse at Forest.” Accordingly, since we reverse the order requiring reinstatement, this action must be remanded to the trial court on the issue of compensatory damages.

Since we are remanding on the issue of compensatory damages, we also authorize the trial court to reconsider its holding that Witt failed to discharge her duty to mitigate her damages because “Witt had an obligation to accept the employment offered by defendants pending the outcome of this litigation or to obtain other employment.” The evidence shows that on September 2, 1980, Witt was offered a position as a staff nurse at the hospital. The trial court’s statement in its opinion that Witt had an obligation to accept this offer assumes that the offer could have been accepted by her after she was terminated. On remand, the trial court will be able to determine the validity of this assumption. Since we agree with the parties that the trial court’s ruling that Witt failed in her duty to mitigate damages may be inconsistent with its finding of fact that Witt’s employment had been terminated by the hospital, we believe the trial court should reconsider this issue. We also observe in this regard, that the trial court, in its opinion, stated that “her [Witt’s] explanation for failure to obtain other employment [was] inadequate to discharge her legal obligation.” Such language appears to be contrary to the general rule that the burden of proof on the issue of a plaintiff’s alleged failure to mitigate his damages is on the defendant. (Ashe v. Sunshine Broadcasting Corp. (1980), 90 Ill. App. 3d 97, 100-01, 412 N.E.2d 1142.) Under these circumstances, we feel that it is appropriate to remand the question of mitigation of damages to the trial court for reconsideration. See Annot., 44 A.L.R.3d 629 (1972).

Defendants also argue that Witt failed to establish the amount of compensatory damages to which she was entitled. Without specifying their arguments, we observe that the arguments assume that Witt failed to mitigate her damages because she did not accept the staff nurse position at the hospital. Since we have remanded the issue of mitigation of damages to the trial court, we do not consider this issue.

Witt was also awarded $5,000 in punitive damages. In Kelsay, our supreme court recognized that “there is no persuasive reason to totally rule out an award of punitive damages in an action for retaliatory discharge,” and that “when the facts permit, punitive damages may be properly awarded.” (74 Ill. 2d 172, 187.) The Kelsay court, however, held that punitive damages should not be awarded in that case because the cause of action forming the basis for their award was a novel one. (74 Ill. 2d 172, 187-90.) Since the facts which form the basis for the instant lawsuit occurred after our supreme court filed its opinion in Kelsay, an award of punitive damages in this case would not be subject to the infirmity present in Kelsay. (See also Palmateer v. International Harvester Co. (1981), 85 Ill. 2d 124, 134-35.) Moreover, the Kelsay court, in reaching its conclusion that punitive damages were inappropriate because the cause of action was novel, observed that at the time of the plaintiff’s discharge, there was no provision in the Workmen’s Compensation Act making it unlawful to discharge an employee for seeking relief under its provisions. (74 Ill. 2d 172, 181.) Contrary to the situation in Kelsay, section 34 of the Guardianship and Advocacy Act clearly made it unlawful to discharge an employee for providing information to the GAG.

Defendants argue, nevertheless, that in September 1980, they could not have foreseen that the tort of retaliatory discharge would be expanded beyond its application to discharges of employees who exercise rights under the Workmen’s Compensation Act. They rely on Rozier v. St. Mary’s Hospital (1980), 88 Ill. App. 3d 994, 411 N.E.2d 50, and the appellate court decision in Palmateer v. International Harvester Co. (1980), 85 Ill. App. 3d 50, 406 N.E.2d 595, modified on appeal (1981), 85 Ill. 2d 124. In Rozier, a case which involved an employee who brought an action alleging that she was fired from her job at the defendant hospital in retaliation for reporting incidents which occurred at the hospital to a local newspaper, the court stated: “the cause of action recognized in Kelsay is and should be limited to discharge in retaliation for the employee’s exercise of his rights under the Workmen’s Compensation Act.” (88 Ill. App. 3d 994, 998.) In the paragraph immediately preceding this statement, however, the court implicitly recognized that there may be other public policy mandates which support causes of action for retaliatory discharge. The court stated: “Few, if any, considerations of public policy justify a deviation from the employer’s general privilege to fire an at-will employee, with or without just cause.” (88 Ill. App. 3d 994, 998.) Moreover, the appellate court in Palmateer, in declining to expand the tort of retaliatory discharge to cover an employee who alleged that he was fired because he provided information to local law enforcement authorities and agreed to assist in the investigation and trial of a fellow employee, stated: “In Illinois, an employer is liable when he terminates a contract at will if that termination violates a contract provision, a statute, or public policy.” (85 Ill. App. 3d 50, 52.) Thus, we do not think that defendants can reasonably argue that it was unforeseeable that the tort of retaliatory discharge would be expanded to situations other than employees who are fired for exercising rights under the Workmen’s Compensation Act. Indeed, we do not feel that the opinion in Kelsay can be read to restrict the tort of retaliatory discharge to that context. Accordingly, we do not feel that the appellate court opinions in Rozier and Palmateer preclude an award of punitive damages in the instant case.

Defendants also contend that punitive damages are inappropriate in this case because of the trial court’s findings that Witt was insubordinate and disruptive. We observe, however, that the trial court specifically held that Witt was not terminated for this reason. Rather, the trial court held that Witt was terminated because of her communication with the GAC. In Kelsay, our supreme court stated: “Where punitive damages may be assessed, they are allowed in the nature of punishment and as a warning and example to deter the defendant and others from committing like offenses in the future.” (74 Ill. 2d 172, 186.) Given the trial court’s finding that Witt was terminated in violation of section 34 of the Guardianship and Advocacy Act and the deterrent purpose of punitive damages, we conclude that an award of punitive damages in the instant case would not be improper.

However, since we have held that Witt should not have been reinstated to her position as head nurse at the hospital, and that the trial court must on remand reconsider the issue of compensatory damages, we feel that the award of punitive damages in the amount of $5,000 should be vacated. In that way, the trial court will have the opportunity to fashion a complete remedy, without an award of reinstatement.

For the aforementioned reasons, the judgment of the circuit court of Cook County finding that Witt was wrongfully terminated from her position as head nurse at Forest Hospital is affirmed, the order requiring that she be reinstated to that position is reversed, and the cause is remanded for further proceedings consistent with this opinion.

Affirmed in part; reversed in part and remanded.

McNAMARA, P.J., and McGILLICUDDY, J., concur.


author: JUSTICE CAMPBELL

text:
    CMO GRAPHICS, INC., Plaintiff-Appellant, v. CNA INSURANCE, a/k/a Continental Casualty Company, Defendant-Appellee.
    First District (1st Division)
    No. 82—222
    Opinion filed May 31, 1983.
    Rehearing denied July 11, 1983.

      Alex Devience, Jr., and John F. O’Meara, both of Chicago, for appellant.
    Willis R. Tribler and Douglas C. Crone, both of Haskell & Perrin, of Chicago, for appellee.
   JUSTICE CAMPBELL

delivered the opinion of the court:

Plaintiff, CMO Graphics, Inc., appeals from the dismissal of its complaint alleging breach of a policy of insurance by defendant CNA Insurance Company. On appeal, plaintiff contends: (1) that the loss suffered by its client Chase/Ehrenberg & Associates as a result of a defective product produced by plaintiff is covered by the “tangible property damage” provision of the comprehensive general policy issued by defendant; (2) that the pleadings filed by Chase/Ehrenberg against CMO adequately establish that its claim against CMO is covered in part by the policy; and (3) that the “tangible property damage” suffered by Chase/Ehrenberg is not subject to the various exclusions in the policy.

The parties are in agreement as to the basic facts. The pleadings establish that CMO Graphics, Inc. (hereinafter CMO), is in the business of producing artwork for use in printed advertisements. In May 1975, CMO agreed to produce for Chase/Ehrenberg & Associates graphics for use in toy advertising supplements to be inserted into newspapers during the 1975 Christmas season. CMO agreed to supply “camera ready art work” including designing the format, providing photographs and pencil drawings of the products and typesetting all pages of copy from manuscripts provided by Chase/Ehrenberg. Plaintiff did not finish producing the graphics until October 1975.

In December 1975, Chase/Ehrenberg notified plaintiff that the graphics provided were defective. Subsequently, in its third amended complaint against CMO, Chase/Ehrenberg sought damages of $200,000. The Chase/Ehrenberg complaint sought two types of damages. First, Chase/Ehrenberg sought to recover damages caused by the fact that CMO delivered the artwork two months late. Second, Chase/Ehrenberg sought to recover damages suffered as a result of CMO’s defective product as follows: the artwork for the advertising inserts, when ready, did not conform with the copy draft layout which Chase/Ehrenberg had, on or about July 15, 1975, supplied to CMO. Said nonconformities included, but were not limited to the following: improper price information; omission of various items that were to be included; and improper photography. Chase/Ehrenberg further alleged that as a result of CMO’s breach of contract it paid money to printers for the printing of inserts that were unusable because of CMO’s errors in preparing the artwork.

In its original complaint Chase/Ehrenberg had also alleged that as a result of CMO’s delayed and defective production: Chase/Ehrenberg had to pay $15,000 to appease each of two sellers whose products had been omitted from the insert or mispriced; Chase/Ehrenberg had to deliver inserts, which cost $31,751 to print, to a seller at no charge; Chase/Ehrenberg had to spend $46,000 to obtain additional advertising inserts to correct erroneous prices in the insert produced by CMO; and Chase/Ehrenberg suffered lost profits of $5,000.

In April 1980, the Chase/Ehrenberg suit against CMO was settled for $20,000. CMO alleges to have spent $9,000 in legal fees and expenses for its defense against Chase/Ehrenberg’s claim.

For the period of January 1, 1975, through January 1, 1976, plaintiff had a “Commercial Casualty Policy” with defendant CNA Insurance Company (hereinafter CNA). Included in the policy was a “comprehensive general liability” section, which provided in pertinent part:

“The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of ***
B. property damage
To which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such *** property damage, even if any of the allegations of the suit are groundless, false or fraudulent ***.” (emphasis in the original)

The policy defined property damage as:

“(1) physical injury to or destruction of tangible property which occurs during the policy period, including the loss thereof ***, or (2) loss of use of tangible property which has not been physically injured or destroyed provided such loss of use is caused by an occurrence during the policy period.”

CMO referred the claim to CNA but CNA declined to accept the claim. In a letter dated March 18, 1976, CNA informed plaintiff that CNA did not consider the loss suffered by Chase/Ehrenberg to be a loss to tangible property. Further, CNA asserted that if the loss was considered to be property damage, such loss was not covered by the policy because of an exclusion to general comprehensive liability insurance. This exclusion provided:

“(m) to loss of use of tangible property which has not been physically injured or destroyed resulting from (1) a delay in or lack of performance by or on behalf of the named insured of any contract or agreement, or (2) the failure of the named insured’s products or work performed by or on behalf of the named insured to meet the level of performance, quality, fitness or durability warranted or represented by the named insured.”

After the third amended complaint was filed by Chase/Ehrenberg, plaintiff again made a demand upon CNA to assume the defense and accept part of the claim. CNA informed plaintiff that in addition to the earlier stated reasons, CNA did not consider that its policy of insurance provided contractual coverage.

Plaintiff filed this action against CNA in January 1981. Plaintiff seeks to recover under the policy for the loss in market value of the completed product produced by Chase/Ehrenberg as a result of incorporating into the inserts the defective artwork supplied by plaintiff. Plaintiff does not claim a right to recover that portion of Chase/ Ehrenberg’s damages which reflect the cost of repairing the defective artwork and the additional expenses caused by delay. The trial court granted CNA’s motion to dismiss and held that CNA had no duty to defend or indemnify CMO in the lawsuit pleaded by Chase/Ehrenberg.

On appeal, plaintiff argues that the loss in market value of the printed advertising supplements into which plaintiff’s design layouts had been incorporated, constituted “destruction of tangible property” to the extent that it exceeded the cost of plaintiff's product and the repairs thereto. Plaintiff argues that courts have allowed an insured to recover under a comprehensive general liability policy covering tangible property damage in situations where the installation of a defective component or ingredient produced by the insured has resulted in damage to the finished product of a third party. Plaintiff contends that the defective artwork it produced caused tangible property damage to the printed advertising supplements produced by Chase/Ehrenberg and, therefore, a portion of Chase/Ehrenberg’s claim is covered by defendant’s policy. Plaintiff also argues that Chase/Ehrenberg’s complaint adequately establishes that defendant’s policy covers part of the claim and that the claim is not subject to any of the exclusions contained in the policy.

Plaintiff relies upon several cases which have allowed recovery for damage caused by the incorporation of an insured’s defective product into the product of a third party. In Elco Industries, Inc. v. Liberty Mutual Insurance Co. (1977), 46 Ill. App. 3d 936, 361 N.E.2d 589, the insured failed to heat treat governor regulator pins that it manufactured for a third party. The third party installed the defective pins in engines that it produced necessitating later recall of the engines and replacement of the pins. The court remanded the case because the facts were insufficient to show whether the installation of the defective pins was such that the pins became so intertwined with the entire mechanism that the defective pins and their subsequent removal resulted in damage to the completed product. On remand, it was determined that the repair of the defective pins necessarily resulted in damage to several components of the finished product, therefore, property damage occurred within the terms of the policy. (Elco Industries, Inc. v. Liberty Mutual Insurance Co. (1980), 90 Ill. App. 3d 1106, 414 N.E.2d 41.) The insured was allowed to recover the costs of the components that were destroyed and replaced in the process of removing the pins and the costs of the disassembly and the reassembly of the parts of the engines other than the insured’s pins. No recovery was allowed for the value of the defective pins, the cost of the new pins and the cost of replacing the pins themselves. Elco Industries, Inc. v. Liberty Mutual Insurance Co. (1980), 90 Ill. App. 3d 1106, 1112-13, 414 N.E.2d 41, 46-47.

In Pittway Corp. v. American Motorists Insurance Co. (1977), 56 Ill. App. 3d 338, 370 N.E.2d 1271, the insured produced defective valve assemblies that were incorporated into aerosol cans filled with hair spray. The defective valve rendered the cans useless and the cans and their contents had to be scrapped. The court determined that “the term ‘property damage’ includes tangible property which has been diminished in value or made useless irrespective of any actual physical injury to tangible property.” (56 Ill. App. 3d 338, 342, 370 N.E.2d 1271, 1274.) The Pittway court found that there was property damage in that case “in the sense of the diminution in value of the product manufactured and owned by a third party.” (56 Ill. App. 3d 338, 343, 370 N.E.2d 1271, 1275.) The court, however, denied coverage to the insured on other grounds.

CNA urges that the trial court was correct in holding that Chase/ Ehrenberg’s third amended complaint was a claim for contractual economic loss and, therefore, is not covered under the policy. CNA asserts that the complaint contains no allegations of damage to any tangible property owned by Chase/Ehrenberg. Defendant also argues that even if Chase/Ehrenberg’s complaint is held to state a claim for property damage, that claim is subject to exclusion (m) of the policy.

The insurer’s duty to defend and indemnify is determined by the allegations contained in the complaint against the insured. “If the complaint alleges facts within the coverage of the policy or potentially within the coverage of the policy the duty to defend has been established.” (Maryland Casualty Co. v. Peppers (1976), 64 Ill. 2d 187, 193, 355 N.E.2d 24, 28.) Since plaintiff seeks indemnification for the settlement offer it made with Chase/Ehrenberg and for the expenses of its defense, we must look to the allegations in the third amended complaint.

In Ludwig Candy Co. v. Iowa National Mutual Insurance Co. (1979), 78 Ill. App. 3d 306, 396 N.E.2d 1329, the court denied coverage to an insured where the complaint filed against the insured did not claim damage to any tangible property. Rather, the court found that the complaint was limited to damages in the nature of pure economic losses. In Ludwig, a manufacturer had produced and packaged defective candy products for a customer who marketed the candy nationwide. The court determined that since the product was defective when sold to the customer, and the customer ceased to market it, the customer did not claim damage to any tangible property.

In Hartford Accident & Indemnity Co. v. Case Foundation Co. (1973), 10 Ill. App. 3d 115, 294 N.E.2d 7, the insurer sought a declaratory judgment that it was not obligated to defend a suit filed against its insured, an architect and two construction companies, by the land developer who built the John Hancock Center in Chicago. The developer sought to recover for the negligent construction of caissons at the foundation of the building which resulted in delay and additional expense while the caissons were either repaired or replaced. The developer’s complaint alleged breach of contract and negligence which resulted in loss of his investments and anticipated profits. The court found that the insurer was not obligated to defend since the developer did not allege injury to or destruction of property, nor that as a result of what the insured parties did or did not do he suffered damages and were the consequences of injury to or destruction of other property he owned. 10 Ill. App. 3d 115, 123, 294 N.E.2d 7, 13. See also Sentry Insurance Co. v. S & L Home Heating Co. (1980), 91 Ill. App. 3d 687, 414 N.E.2d 1218; Hamilton Die Cast, Inc. v. United States Fidelity & Guaranty Co. (7th Cir. 1975), 508 F.2d 417.

In the case at bar, the complaint is also limited to damages in the nature of economic losses. Chase/Ehrenberg sought to recover financial investments in the printing of the defective advertising inserts as well as lost profits and lost goodwill. Although plaintiff claims that its defective graphics caused tangible property damage to Chase/Ehrenberg’s supplements, Chase/Ehrenberg did not attempt in the third amended complaint to recover for any damage caused to its products or for the diminution in market value of its products. An examination of the complaint, in light of the legal precedent in this area, indicates that the trial court was correct in determining that the settlement paid by plaintiff was not covered by the tangible property damage clause of the comprehensive general policy issued by defendant.

For the foregoing reasons, the judgment of the circuit court of Cook County is affirmed.

Judgment affirmed.

BUCKLEY, P.J., and GOLDBERG, J., concur.


author: JUSTICE SULLIVAN

text:
    THE VILLAGE OF OAK PARK et al., Plaintiffs-Appellees, v. EDWARD J. ROSEWELL, County Treasurer and ex-officio County Collector of Cook County, et al., Defendants-Appellants.
    First District (5th Division)
    No. 82—1763
    Opinion filed June 10, 1983.

      Richard M. Daley, State’s Attorney, of Chicago (Jane Clark Casey, Thomas J. McNulty, James F. Henry, and Paula M. Becker, Assistant State’s Attorneys, of counsel), for appellants.
    Klein, Thorpe and Jenkins, Ltd., of Chicago (Gerard E. Dempsey, of counsel), for appellees.
   JUSTICE SULLIVAN

delivered the opinion of the court:

In an action for injunctive and other relief, an order was entered finding that a parking lot owned by the First Presbyterian Church of Oak Park (the Church) and leased to the Village of Oak Park (the Village) was exempt from general real estate taxes from January 1, 1977, to June 17, 1982, and directing the Cook County Treasurer to refund tax payments made for the years 1976, 1977, and 1978. On appeal, defendants contend that the trial court erred as a matter of law in (1) ruling that the property in question was exempt from real estate taxes, and (2) ordering a refund of taxes voluntarily paid.

The facts of this case are undisputed. The Church owns two adjoining parcels of land located within the Village which it uses as a parking lot in connection with its religious activities from 9 a.m. to 10 p.m. on Sundays. During the balance of the week, the parcels are leased to the Village for use as a municipal parking lot. Pursuant to the terms of the lease, the Church receives one-half of the gross receipts from this use and, from the remaining half, the Village is required to pay the costs of operating and maintaining the lot, including real estate taxes, with the balance of that half, if any, divided equally between the Church and the Village. The monies received by the Church are used for religious purposes, and the share of the monies received by the Village is used for municipal needs.

In 1975, the Village and the Church, plaintiffs herein, sought an injunction restraining collection of real estate taxes levied against the property in question. The trial court granted plaintiffs’ motion for summary judgment on September 15, 1977, declaring the property exempt for the years 1973, 1974, 1975, and 1976. That order was not appealed. Subsequently, the Church paid portions of the real estate taxes levied against the property in 1976, 1977, and 1978, and received reimbursement therefor from the Village, pursuant to the lease. In 1981, plaintiffs filed a petition for a supplemental injunction asking that the trial court restrain collection of real estate taxes for the years 1977 through 1981 and order a refund of the taxes paid for that period. The trial court found that the use of the real estate by the Church was an exempt use, and that its use by the Village for a municipal parking lot was likewise exempt. The relief requested was granted, and this appeal followed.

Opinion

Defendants first contend that the trial court erred in ruling that the property in question is exempt from real estate taxation. They argue that the property is not used exclusively for religious purposes, as required by section 19.2 of the Revenue Act of 1939 (Ill. Rev. Stat. 1981, ch. 120, par. 500.2), but is leased for profit and therefore taxable. Furthermore, they maintain, the fact that the lessee Village used the property for municipal purposes is irrelevant in determining whether the property is taxable.

Initially, we note that the General Assembly has the exclusive power to raise revenue by taxation (Ill. Const. 1970, art. IX, sec. 1) and may exempt “the property of *** units of local government and *** property used exclusively for *** religious *** and charitable purposes” (Ill. Const. 1970, art. IX, sec. 6). Thus, the legislature is not constitutionally required to exempt any property from taxation and may place restrictions or limitations upon those exemptions it chooses to grant. (North Shore Post No. 21 v. Korzen (1967), 38 Ill. 2d 231, 230 N.E.2d 833.) Consequently, there is a presumption that no exemption is intended (Rotary International v. Paschen (1958), 14 Ill. 2d 480, 153 N.E.2d 4), and the party claiming the exemption has the burden of showing that the property clearly falls within a statutory exemption (People ex rel. Nordlund v. Association of the Winnebago Home for the Aged (1968), 40 Ill. 2d 91, 237 N.E.2d 533). Furthermore, we must construe the exemption provisions strictly (Methodist Old Peoples Home v. Korzen (1968), 39 Ill. 2d 149, 233 N.E.2d 537) and have no power to create an exemption by judicial interpretation (People ex rel. Baldwin v. Jessamine Withers Home (1924), 312 Ill. 136, 143 N.E. 414).

In the instant case, the applicable statutory provisions are sections 19.2 and 19.16 of the Revenue Act of 1939 (Ill. Rev. Stat. 1981, ch. 120, pars. 500.2, 500.16). Section 19.2 exempts from taxation “all property used exclusively for religious purposes * * * and not leased or otherwise used with a view to profit,” and section 19.16 expressly extends the exemption to parking areas “not leased or used for profit, when used as a part of a use for which an exemption is provided hereinbefore and owned by any *** religious *** institution which meets the qualifications for exemption.” Clearly, then, whether property is exempt under these provisions is determined by its primary use (People ex rel. Marsters v. Rev. Saletyni Missionaries, Inc. (1951), 409 Ill. 370, 99 N.E.2d 186) and not by the fact that it is owned by a qualifying nonprofit institution (Turnverein “Lincoln” v. Board of Appeals (1934), 358 Ill. 135, 192 N.E. 780). However, the exclusivity restriction has never been given an unreasonably narrow interpretation, and where otherwise exempt property is leased to further the nonprofit, exempt purposes of the institution, the fact that the lease yields an income or an incidental profit will not defeat an exemption (People ex rel. Goodman v. University of Illinois Foundation (1944), 388 Ill. 363, 58 N.E.2d 33; People ex rel. Hesterman v. North Central College (1929), 336 Ill. 263, 168 N.E. 269). Conversely, where property is leased with a view to profit, it is immaterial whether the income derived is used for religious purposes (People ex rel. Baldwin v. Jessamine Withers Home); in fact, it is irrelevant whether the lease actually generates a profit or a loss, or the revenues are totally offset by operational or maintenance costs (Turnverein “Lincoln” v. Board of Appeals).

Here, the record indicates that the property in question was leased to the Village with a view to profit rather than to furthering some religious purpose of the Church. Plaintiffs do not argue that it is the Church’s ownership of the property, or its use of the funds generated for religious purposes, or its use of the lot on Sundays which provides a basis for exemption here. Instead, they rely on the Village’s use of the land for municipal purposes during the balance of the week to justify a total exemption of the property from real estate taxes. They assert that so long as all uses of the property are exempt, it is immaterial that the Church is receiving a profit from the lease. In support thereof, plaintiffs cite Childrens Development Center, Inc. v. Olson (1972), 52 Ill. 2d 332, 288 N.E .2d 388, where property owned by a religious institution was leased to a not-for-profit corporation which provided programs for educationally handicapped children and qualified as a charitable institution. Although the religious institution received a profit, the supreme court looked to “the primary use to which the property [was] devoted after the leasing” (emphasis added) (52 Ill. 2d 332, 336, 288 N.E.2d 388, 391) in determining whether the property’s tax-exempt status should continue. Since the primary use after leasing was serving a tax-exempt charitable purpose of the lessee, the court ruled that the property remained tax exempt.

Plaintiffs contend that the facts of the present case are analogous. Although the Church leases the property for a profit, the Village uses the property for a municipal purpose which, they maintain, is tax exempt. However, we believe that this case is distinguishable. In Childrens Development Center, the lessee came within section 19.7 of the Revenue Act of 1939 (Ill. Rev. Stat. 1981, ch. 120, par. 500.7), which exempts from taxation all property “actually and exclusively used for *** charitable or beneficient purposes, and not leased or otherwise used with a view to profit.” The section 19.7 exemption, like that in section 19.2 for religious institutions, turns on the primary use of the property. Unlike those provisions, the exemption provided for municipalities turns solely on ownership of the property. Section 19.6 of the Revenue Act of 1939 provides in relevant part for exemption of “all property owned by any city or village located within the incorporated limits thereof, except such as heretofore has been leased or may hereafter be leased by such city or village to lessees who are bound under the terms of the lease to pay the taxes on such property.” (Ill. Rev. Stat. 1981, ch. 120, par. 500.6.) That use of leased land for municipal purposes does not provide an exemption is evident from People ex rel. Carr v. City of Chicago (1926), 323 Ill. 68, 153 N.E. 725. There, the city leased land which was used for public playgrounds, police department buildings, a fire station, and a hospital. Although all of the land served municipal purposes, the supreme court held that it was ownership, not use, which determined exemption. It appears, then, that there is no separate exemption of land used for municipal purposes, as plaintiffs contend. If we were to adopt plaintiffs’ position, we would add to section 19.6 of the Revenue Act of 1939 an exemption clearly not within its contemplation. Therefore, we believe that Childrens Development Center is inapplicable to the situation before us and that plaintiffs have failed to demonstrate any facts which would bring the property within a statutory exemption from taxation. In view of our disposition of this first contention of defendants, we need not reach their second contention.

For the foregoing reasons, the order of the trial court is reversed and this matter is remanded, and the trial court is directed to deny the relief requested.

Reversed and remanded with a direction.

WILSON, P.J., and LORENZ, J., concur.

      The first parcel was purchased in 1958 and the second in 1963. The order appealed from concerns only the second parcel.

      A supplemental petition seeking an exemption for the other parcel was filed in 1978, and summary judgment for plaintiffs was granted thereon. No appeal was taken from that order.