Court Opinion

ID: 9521569
Source: CourtListenerOpinion
Date Created: 2023-08-07 02:07:43.696322+00
Date Added: 2024-06-11T12:49:55.144618
License: Public Domain

JUSTICE HOFFMAN, specially concurring in part and dissenting in part: The trial court dismissed all three counts of the plaintiff’s complaint, finding both that the claims asserted therein could only be brought in the Illinois Court of Claims and that the plaintiff had failed to exhaust his remedies under the Administrative Review Law (735 ILCS 5/3 — 101 et seq. (West 2000)). The majority has reversed the trial court’s order and remanded the cause for further proceedings. I write separately for two reasons. Although I agree that counts I and II of the plaintiffs complaint were erroneously dismissed, I feel compelled to set forth my reasons for so concluding. Further, I dissent in part from the majority opinion as I believe that the dismissal of count III of the plaintiffs complaint should be affirmed. The plaintiff filed a three-count complaint predicated upon the State’s retention of the dividends, interest and other accruals earned on property held by the Illinois Treasurer (Treasurer) pursuant to the Uniform Disposition of Unclaimed Property Act (Act) (765 ILCS 1025/ 0.05 et seq. (West 2000)). Counts I and II were brought on behalf of the plaintiff and all persons or entities who owned property that was held by the Treasurer pursuant to the Act and who, upon return of that property, did not receive the earnings, which had accrued thereon while the property was in the possession /of the State. Count I alleged that the State’s retention of the earni ngs violates the prohibition against taking private property without the payment of just compensation contained in article I, section 15, of the Illinois Constitution (Ill. Const. 1970, art. I, § 15). Count II, also a class action claim, asserted a violation of 42 U.S.C. § 1983 (1996), alleging that the State’s retention of the earnings violates the prohibition against taking private property without the payment of just compensation contained in the fifth amendment to the United States Constitution (U.S. Const., amend. V). In count III, the plaintiff pled an individual claim, seeking to recover the income and accruals on certain corporate stock owned by him and earned while the stock was in the custody of the Treasurer pursuant to the Act. By way of relief, the plaintiff sought, inter alia: a declaration that the State’s retention of dividends, interest and other accruals on private property in the custody of the Treasurer pursuant to the Act violates article I, section 15, of the Illinois Constitution and the fifth amendment to the United States Constitution; an injunction enjoining the defendants from retaining such earnings; and an accounting identifying all persons whose property has been returned to them pursuant to the Act without the payment of the dividends, interest or other accruals earned on such property while in the possession of the Treasurer. The defendants filed a combined motion to dismiss the plaintiffs complaint pursuant to section 2 — 619.1 of the Code of Civil Procedure (Code) (735 ILCS 5/2 — 619.1 (West 2000)). For their section 2 — 615 (735 ILCS 5/2 — 615 (West 2000)) grounds, the defendants alleged that: the plaintiffs complaint does not allege the necessary prerequisites for the maintenance of a class action; the State’s retention of income, dividends or interest on unclaimed property in the possession of the Treasurer pursuant to the Act does not violate either the Illinois or federal constitutional prohibitions against the taking of private property without the payment of just compensation; count II of the complaint fails to state a claim for a section 1983 violation; and the plaintiffs remedy, if any, is through the Administrative Review Law. As grounds for dismissal pursuant to section 2 — 619 of the Code (735 ILCS 5/2 — 619 (West 2000)), the defendants asserted that the complaint fails to allege facts establishing the existence of “an actual justiciable controversy” and the Illinois Court of Claims has exclusive subject matter jurisdiction over the controversy. As noted earlier, the circuit court granted the defendants’ motion to dismiss, holding both that the claims asserted in the complaint could only be brought in the Illinois Court of Claims and that the plaintiff had failed to exhaust his remedies under the Administrative Review Law. Thereafter, the plaintiff filed a timely notice of appeal. In his brief before this court and again at oral argument, the plaintiff stated that he is not appealing the dismissal of count III of his complaint and made no argument attacking that portion of the trial court’s order. For this reason, I believe that the plaintiff has waived any claim of error in the dismissal of count III (see 188 Ill. 2d R. 341(e)(7)) and that the trial court’s order dismissing that count should be affirmed. In urging reversal of the dismissal of counts I and II, the plaintiff argues that: (1) he was not required to exhaust any administrative remedies prior to challenging the constitutionality of the income retention provisions of the Act; and (2) claims seeking injunctive relief predicated upon a State agent having acted in violation of a constitutional provision may be brought in the circuit court. At oral argument, counsel for the defendants candidly conceded that the trial court erred in dismissing counts I and II of the plaintiffs complaint on the grounds stated. I agree with the concession. Where, as here, a party attacks the constitutionality of a statute on its face, he need not exhaust administrative remedies. Phillips v. Graham, 86 Ill. 2d 274, 289, 427 N.E.2d 550 (1981). Further, an action seeking an injunction to restrain a State officer from acting in violation of constitutional law is not an action against the State and may be brought in the circuit court. Healy v. Vaupel, 133 Ill. 2d 295, 308, 549 N.E.2d 1240 (1990); City of Springfield v. Allphin, 74 Ill. 2d 117, 124, 384 N.E.2d 310 (1978). Their concession notwithstanding, the defendants contend that the dismissal of counts I and II should be affirmed by reason of the plaintiffs failure to allege facts supporting claims for the unconstitutional taking of private property. The defendants argue that section 15 of the Act (765 ILCS 1025/15 (West 2000)), which is at the heart of this controversy, does not provide for an unconstitutional taking of private property without just compensation because the State has the power to determine the disposition of abandoned property and to assume title thereto. They assert that the enactment of section 15 of the Act, which provides that the owner of property in the possession of the Treasurer under the Act is not entitled to receive the income or other increments accruing thereon, is a proper exercise of the State’s power to dispose of abandoned property. I believe that the flaw in the defendants’ argument is its failure to recognize that the power which the State exercises over property pursuant to the Act is custodial in nature. The Act does not provide for the loss of an owner’s rights in and to the underlying property which is presumed abandoned pursuant to its provisions; rather, it provides that the Treasurer will take custody of the property, be responsible for the safekeeping thereof (see 765 ILCS 1025/14 (West 2000)), and deliver the property, or the proceeds of the sale thereof, to the owner in accordance with the claim provisions set forth in sections 19 and 20 of the Act (see 765 ILCS 1025/19, 20 (West 2000)). The Act places no time limit within which an owner is required to file a claim seeking the return of property held by the Treasurer and, as a consequence, the Treasurer remains the custodian in perpetuity. See 8 U.L.A. 74 (1972). If the owner does not lose his rights to the underlying property, then I believe that any income earned thereon is also the property of the owner. As the Supreme Court noted in Phillips v. Washington Legal Foundation, 524 U.S. 156, 165, 141 L. Ed. 2d 174, 184, 118 S. Ct. 1925, 1930 (1998): “The rule that ‘interest follows principal’ has been established under English common law since at least the mid-1700’s.” See also Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 162, 66 L. Ed. 2d 358, 365, 101 S. Ct. 446, 451 (1980). As noted earlier, section 15 of the Act provides that the owner of property held by the Treasurer pursuant to the Act is not entitled to the income or other increments accruing thereon. However, the State cannot, by legislation or otherwise, transform private property into public property simply by abrogating the traditional rule that the earnings on property are incidents of its ownership and are also the property of the owner. Webb’s Fabulous Pharmacies, 449 U.S. at 164, 66 L. Ed. 2d at 366-67, 101 S. Ct. at 452. Since the income or other increments that accrue on property in the custody of the Treasurer attach as a property right incident to the ownership of the underlying property (see Phillips, 524 U.S. at 168, 141 L. Ed. 2d at 186, 118 S. Ct. at 1932), it cannot be taken for public use without just compensation. Ill. Const. 1970, art. I, § 15; U.S. Const., amend. V. I conclude, therefore, that the State’s retention of the income or other increments accruing on property in the custody of the Treasurer under the Act pursuant to section 15 is a taking for public use and, in the absence of the payment of just compensation, violates both the Illinois and federal constitutions. Based on the foregoing analysis, I believe that counts I and II of the plaintiffs complaint state causes of action upon which relief might be granted. I, therefore, concur in the reversal of the trial court’s dismissal of counts I and II of the plaintiffs complaint and in the remandment of the cause to the circuit court for further proceedings.