Court Opinion

ID: 9530554
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:01:04.193762+00
Date Added: 2024-06-11T13:28:09.655636
License: Public Domain

JUSTICE KILBRIDE, concurring in part and dissenting in part: I agree with the majority’s analysis regarding the status of defendant Huston-Patterson Corporation as an “employer” under section 2 of the Wage Act and therefore join in that portion of the opinion. I disagree, however, with the analysis regarding defendant Thomas Kowa and must therefore respectfully dissent. The reasoning supporting the determination of Huston-Patterson’s status is not applicable to Thomas Kowa. Kowa clearly is an “employer” under section 13 of the Act, because the trial court found that the evidence in the case established that he is the owner and principal shareholder in Kowa Printing Group, Inc., makes all corporate decisions, and is primarily responsible for corporate operations. According to the express terms of section 13, an officer or agent of the corporation who knowingly permitted the corporation to violate the provisions of the Act “shall be deemed to be the employer [ ] of the employees of the corporation.” 820 ILCS 115/13 (West 2002). The trial court found that Thomas Kowa had knowingly violated the Act and was thus liable for payment of the defaulted wage supplements. The majority has rejected the factual findings of the trial court without affording it the deference due under the manifest weight of the evidence standard of review, and therefore I respectfully dissent from that holding. The trial court conducted an extensive review of evidence offered at trial and made a factual determination that Thomas Kowa was aware of the corporation’s dire financial status and the bank’s intent to take it over. Yet, as the trial court found, he chose not to notify the plaintiffs and thereby allow them time to seek alternative employment and take the vacation and severance payments due under their contracts. Instead, Thomas Kowa kept them on the job right up to the point of the bank takeover. It is well established that factual determinations of the trial court are reviewed under the manifest weight of the evidence standard. Eychaner v. Gross, 202 Ill. 2d 228, 251 (2002). “The court on review must not substitute its judgment for that of the trier of fact.” Kalata v. Anheuser-Busch Cos., 144 Ill. 2d 425, 434 (1991). Findings of fact will not be overturned on appeal “unless they are palpably against the weight of the evidence, even though we might be inclined to find otherwise.” Kolze v. Fordtran, 412 Ill. 461, 468-69 (1952). Nonetheless, the majority conducts its own review of some of the evidence at trial and reaches a conclusion contrary to that of the trial court. 217 Ill. 2d at 112-14. The majority does not identify the standard it applied to reviewing the trial court’s finding that Thomas Kowa knowingly violated the provisions of the Act requiring payment of “the final compensation of separated employees in full, at the time of separation.” 820 ILCS 115/5 (West 2002). Undoubtedly, this finding depended on a review of documentary evidence and witness testimony, as the court had to determine whether a knowing violation had in fact occurred. In reaching its conclusion that Thomas Kowa had committed a knowing violation of section 5 of the Act, the trial court reasoned that documents admitted in evidence establish he was able to make the payments at the time of the takeover because he made similar payments pursuant to a claim filed by the Illinois Department of Labor. The court further found, based on the evidence, that plaintiffs had earned the claimed vacation and severance pay at the time of the takeover and Kowa Printing still maintained its corporate existence at the time of trial. The evidence also showed that negotiations with a prospective buyer collapsed when the unions involved did not concede proposed reductions in accrued vacation pay and other benefits. These negotiations occurred during the extension of the forbearance agreement to March 15, 1998. The evidence established that Thomas Kowa executed a surrender agreement with the bank on March 13, 1998, acknowledging the failure of all reorganization efforts. The surrender agreement referenced an April 6, 1998, takeover date, but the bank did not actually take over the operation and assets of Kowa Printing until April 16, 1998. Thus, as the trial court found, Thomas Kowa, the sole decisionmaker for Kowa Printing, knew the bank takeover was a certainty, but nevertheless allowed the employees to continue working and accruing benefits for more than one full month after executing the surrender agreement. In the agreement, Thomas Kowa acknowledged that the total value of the collateral available from the takeover of Kowa Printing assets was less than the amount of the defaulted debt. Rather than notifying plaintiffs of the certain demise of the company when negotiations broke down, thus affording them an opportunity to pursue other employment and demand their contractual severance and vacation pay, Thomas Kowa told them nothing of the impending imminent takeover. These findings of fact supported the trial court’s conclusion that Thomas Kowa was a statutory employer under section 13 of the Act who knowingly permitted a violation of section 5’s termination requirements. After reviewing the same evidence, however, the majority concluded nothing in the record suggests that either the demise of Kowa Printing or the loss of plaintiffs’ jobs was inevitable. 217 Ill. 2d at 113. Although the majority acknowledges the execution of the March 13, 1998, surrender agreement, it makes no reference to the significance of the April 6, 1998, date set for the surrender of Kowa Printing assets and the application of the assets to corporate debt. Further, the majority speculates that if an agreement had been reached on the day of foreclosure, “operations would have continued, plaintiffs would have kept their jobs, and this case never would have been filed.” 217 Ill. 2d at 113. It perhaps belabors the obvious to point out that negotiations did break down and, as a result, Thomas Kowa executed the surrender agreement. Whether the negotiations broke down because of union intransigence or the buyer’s insistence on the disputed concessions, Thomas Kowa knew with certainty of the imminent cessation of company operations. In any event, the right of employees to accrued wages and benefits pursuant to section 5 is not dependent on their willingness to bargain over those benefits. The majority asserts that once negotiations broke down, it was too late for Thomas Kowa to do anything “as BankIllinois immediately moved in and seized all of Kowa Printing’s assets.” 217 Ill. 2d at 113. This assertion ignores the established fact that Kowa Printing, under Thomas Kowa’s direction, continued operations for more than one full month after the execution of the surrender agreement that expressly acknowledged the failed efforts to reorganize. Finally, the majority concludes the “evidence suggests that Thomas Kowa made every effort to ensure that plaintiffs’ livelihoods survived Kowa Printing’s unexpected financial downturn.” 217 Ill. 2d at 114. Even if this conclusion were justified, the trial court’s contrary conclusion is at least equally justified. The majority has apparently based its conclusion on its own interpretation of the factual record and has afforded no deference to the fact-findings of the trial court on the issue of Thomas Kowa’s liability. This is clearly contrary to the applicable standard of review. The trial court’s application of its factual findings is well supported by the record and is not against the manifest weight of the evidence. Accordingly, I respectfully dissent from the majority’s affirmance of the appellate court’s judgment in favor of defendant Thomas Kowa.