Opinion ID: 2082593
Heading Depth: 2
Heading Rank: 2

Heading: Scienter Requirement

Text: The second issue that must be addressed is the scienter requirement for a violation of the Ordinance. Turning to section 5-12-080 of the Ordinance, I note that it provides the tenant shall be awarded damages in an amount equal to two times the security deposit, together with interest, court costs and attorney fees for a violation of the section. Thus, section 5-12-080 is penal in nature. As noted in the bystanders' report, the circuit court concluded that a finding of willfulness was required in order for Lawrence to recover damages pursuant to section 5-12-080. In this appeal, Lawrence maintains that the circuit court erred in holding that a finding of willfulness was required in order for Lawrence to recover damages pursuant to section 5-12-080 of the Ordinance. Pointing to the lack of express language describing a mental state, Lawrence explains that the Chicago city council intended to impose strict and certain liability for violations of section 5-12-080. Lawrence concludes that a finding of willfulness, or any other scienter requirement, is not necessary for recovery under section 5-12-080. The majority agrees. In considering whether a statute imposes absolute liability for certain conduct, the fact that the statute does not contain express language calling for a mental state does not, of itself, lead to a conclusion that no mental state is required. People v. Farmer, 165 Ill.2d 194, 202-03, 209 Ill.Dec. 33, 650 N.E.2d 1006 (1995); People v. Whitlow, 89 Ill.2d 322, 332, 60 Ill.Dec. 587, 433 N.E.2d 629 (1982); People v. Nunn, 77 Ill.2d 243, 250, 32 Ill.Dec. 914, 396 N.E.2d 27 (1979). This court looks, instead, to sources beyond the statutory language to ascertain the intent of the legislature and determine whether the conclusion that the statute imposes absolute liability is warranted. Farmer, 165 Ill.2d at 205-06, 209 Ill.Dec. 33, 650 N.E.2d 1006; People v. Sevilla, 132 Ill.2d 113, 118-19, 138 Ill.Dec. 148, 547 N.E.2d 117 (1989). This court has heretofore recognized that the penalty for a violation of a statute is an important factor in determining whether the legislature intended to impose absolute liability. Gean, 143 Ill.2d at 287, 158 Ill.Dec. 5, 573 N.E.2d 818; Sevilla, 132 Ill.2d at 122, 138 Ill.Dec. 148, 547 N.E.2d 117. Where the penalty for a violation of a statute is great, it is less likely that the legislature intended to create an absolute liability offense. Farmer, 165 Ill.2d at 206, 209 Ill.Dec. 33, 650 N.E.2d 1006; People v. Valley Steel Products Co., 71 Ill.2d 408, 425, 17 Ill.Dec. 13, 375 N.E.2d 1297 (1978). Absent either a clear indication that the legislature intended to impose absolute liability, or an important public policy favoring absolute liability, this court has generally not been willing to interpret a statute as imposing absolute liability. See Gean, 143 Ill.2d at 286, 158 Ill.Dec. 5, 573 N.E.2d 818 (and cases cited therein). As Lawrence notes, section 5-12-080 does not contain a mental state element. Moreover, the balance of the Ordinance does not contain a clear indication that the Chicago city council intended to impose absolute liability for violations of the section. [1] The penalty imposed under section 5-12-080 (twice the amount of the security deposit plus interest, court costs, and attorney fees) can be substantial. And, with respect to a landlord's failure to pay interest on the security deposit, as well as the landlord's failure to segregate the security deposit from other assets, the damages recovered by the tenant will be totally disproportionate to the loss he suffers. Given the lack of clear legislative intent and the implications to the landlord for failure to pay interest on the security deposit, I am of the opinion that the Chicago city council did not intend to impose absolute liability for violations of section 5-12-080. The majority disagrees. It finds that the Ordinance is clear and unambiguous. From there, it concludes that the Ordinance must be enforced as written, without resort to extrinsic aids for construction. See 197 Ill.2d at 10, 257 Ill.Dec. at 681, 754 N.E.2d at 339. The majority fails to recognize, however, that in considering whether a statute imposes absolute liability for certain conduct, the fact that the statute does not contain express language calling for a mental state does not, of itself, lead to a conclusion that no mental state is required. By limiting its analysis to the clear and unambiguous language of the Ordinance, the majority fails to determine the actual intent of the Chicago city council in enacting the Ordinance. [2] When a statute neither prescribes a particular mental state nor creates an absolute liability offense, either intent, knowledge or recklessness applies. Anderson, 148 Ill.2d at 23, 169 Ill.Dec. 288, 591 N.E.2d 461; Gean, 143 Ill.2d at 288, 158 Ill.Dec. 5, 573 N.E.2d 818. In determining the appropriate mental state, this court looks to other provisions in the statute, or to the language of any parallel statute. Sevilla, 132 Ill.2d at 123-24, 138 Ill.Dec. 148, 547 N.E.2d 117. Three other provisions of the Ordinance are instructive. Section 5-12-150 provides that a landlord may not knowingly terminate a tenancy or refuse to renew a lease because the tenant has complained of code violations, sought assistance to remedy a code violation or requested that the landlord make repairs to the premises. A tenant shall recover an amount equal to two months' rent or twice the damages sustained by him, whichever is greater, for a violation of this provision. Section 5-12-160 provides that it is unlawful for any landlord knowingly to oust or dispossess or threaten or attempt to oust or dispossess a tenant from a dwelling unit without authority of law. A tenant shall recover an amount equal to two months' rent or twice the damages sustained by him, whichever is greater, for a violation of this provision. Lastly, section 5-12-110 provides that if a person's failure to deliver possession of a dwelling unit is willful, an aggrieved person may recover from the person withholding possession an amount not more than two months' rent or twice the actual damages sustained, whichever is greater. All three provisions thus require that the landlord have acted with knowledge in committing the particular infraction. See 720 ILCS 5/4-5 (West 1998) (conduct performed knowingly or with knowledge is performed willfully, within the meaning of a statute using the term wilfully, unless the statute clearly requires another meaning). I also find instructive the language of the Security Deposit Interest Act (765 ILCS 715/1 et seq. (West 1998)). Section 1 of the Security Deposit Interest Act provides that, with respect to buildings or complexes containing at least 25 units, a landlord who receives a security deposit from a tenant shall pay interest to the tenant if the landlord holds the deposit for more than six months. 765 ILCS 715/1 (West 1998). A landlord who willfully fails or refuses to pay the interest required by the act shall, upon a finding by a circuit court that the landlord has willfully failed or refused to pay, be liable for an amount equal to the amount of the security deposit together with court costs and reasonable attorney fees. 765 ILCS 715/2 (West 1998); see also Gittleman v. Create, Inc., 189 Ill.App.3d 199, 136 Ill.Dec. 713, 545 N.E.2d 237 (1989) (finding a violation of the Security Deposit Interest Act where the landlord was fully aware of its legal obligation to pay interest on the security deposits but attempted to circumvent the statute by claiming, contrary to a lease provision setting the rent at $300, that the gross rent was actually $301.25; that the tenant paid only $300 per month; and that $1.25 was credited each month to the tenant's account as interest on the security deposit). Many of our sister states have adopted legislation regulating payment of interest on security deposits and the return of the security deposits. The enactments fall into four categories: (1) those imposing absolute liability for any retention of the security deposits in violation of the statute; (2) those prohibiting unreasonable retention of the security deposits, that is a retention without reasonable justification or basis as determined by a fact finder; (3) those prohibiting wrongful and willful retention of the security deposits; and (4) those prohibiting bad-faith retention of the security deposits. See Annot., 63 A.L.R.4th 901, 1988 WL 546546 (1988). Within the enactments proscribing wrongful and willful retention, certain statutes have been interpreted as requiring only deliberate or intentional conduct (see Martinez v. Steinbaum, 623 P.2d 49 (Colo. 1981)), while others have been interpreted as requiring bad-faith retention (see Karantza v. Salamone, 435 A.2d 1384 (Me. 1981)) or an arbitrary and unjustified withholding (see Calix v. Whitson, 306 So.2d 62 (La.App.1974)). My review of the other portions of the Ordinance, the Security Deposit Interest Act, and parallel enactments in our sister states convinces me that knowledge, as opposed to either intent or recklessness, is the appropriate mental state for a violation of section 5-12-080 of the Ordinance. Knowledge generally refers to an awareness of the existence of the facts which make an individual's conduct unlawful. See Sevilla, 132 Ill.2d at 125, 138 Ill.Dec. 148, 547 N.E.2d 117. In arriving at this conclusion, I am keenly aware that the Ordinance is both penal and remedial. I believe that a requirement that the landlord have acted intentionally or with bad faith is not in keeping with the remedial purpose of the Ordinance. Such a holding would set too high a bar to recovery under section 5-12-080 of the Ordinance. On the other hand, I believe that knowledge is required for a violation of the section. Such a requirement furthers the remedial purpose of the Ordinance while appropriately restricting the penal consequences of the section by excluding violations which are merely inadvertent. The majority rejects my conclusion. The majority states that: The body of law concerned with the implication of mental states in criminal cases does not support a contrary result. 197 Ill.2d at 11, 257 Ill.Dec. at 682, 754 N.E.2d at 340. Further, the Chicago city council has not promulgated rules allowing implication of mental states for ordinance violations where no mental state has been expressly provided. 197 Ill.2d at 11, 257 Ill.Dec. at 682, 754 N.E.2d at 340. Thus, the majority concludes that the law regarding scienter does not apply to a municipal ordinance. The majority's reasoning is based on the premise that the title of a statute is more important than its substance, a premise this court has heretofore rejected. See Bell, 176 Ill. at 496, 52 N.E. 346 (It is the effectnot the formof the statute that is to be considered, and when its object is clearly to inflict a punishment on a party for violating it, i.e., doing what is prohibited or failing to do what is commanded to be done,it is penal in its character). What matters that the Ordinance is a municipal ordinance if the relevant provisions are penal in nature? If the provisions are intended to impose significant penalties upon a landlord, and, if the Ordinance does not contain a clear indication that the Chicago city council intended to impose absolute liability for violations of the Ordinance, this court must impose a scienter requirement. I note that in People v. O'Brien, 197 Ill.2d 88, 257 Ill.Dec. 669, 754 N.E.2d 327 (2001), a case filed concurrently with the case at bar, this court rejects the narrow approach to the application of scienter the majority here advances. Instead, in O'Brien, this court recognizes that the scienter requirement of section 4-9 of the Criminal Code of 1961 (720 ILCS 5/4-9 (West 1998)): applies to all criminal penalty provisions, including those outside the Criminal Code of 1961. O'Brien, 197 Ill.2d at 91, 257 Ill.Dec. 671, 754 N.E.2d 329. Thus, the O'Brien court applies [t]he body of law concerned with the implication of mental states in criminal cases (197 Ill.2d at 11, 257 Ill.Dec. at 682, 754 N.E.2d at 340 ( supra )) in determining whether section 3-707 of the Illinois Vehicle Code (625 ILCS 5/3-707 (West 1998)) creates an absolute liability offense. The O'Brien court recognizes that the substance of a statute and the nature of the penalties imposed by the statute are to be taken into account in determining whether the legislative body intended to create an absolute liability statute.