Court Opinion

ID: 3146215
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:14:18.188496+00
Date Added: 2024-06-11T09:48:38.191853
License: Public Domain

FOURTH DIVISION
                                                                            JUNE 15, 2006

No. 1-04-2228

HILARY KRAWCZYK and                                          )       Appeal from the
ELIZABETH KRAWCZYK,                                          )       Circuit Court of
     Plaintiffs-Appellants,                                  )       Cook County.
                                                             )
                v.                                           )
                                                             )
TOM LIVADITIS,                                               )
    Defendant-Appellee                                       )       No. 02 M1 101178
                                                             )
(BERTON N. RING, P.C.,                                       )
     Appellant;                                              )
                                                             )       Honorable
SOULA J. SPYROPOULOS,                                )       John J. Hynes,
     Appellee).                                              )       Judges Presiding.

       JUSTICE CAMPBELL delivered the opinion of the court:

       Plaintiffs Hilary and Elizabeth Krawczyk, and appellant Berton N. Ring, P.C., appeal an

order of the circuit court of Cook County awarding plaintiffs $4,200 in damages for defendant

Tom Livaditis's breach of a lease and violations of the Chicago Residential Landlord and Tenant

Ordinance (Chicago Municipal Code '' 5-12-080, 5-12-100 (amended November 6, 1991))

(RLTO), arguing that the trial court: (1) improperly merged the damages from the contract claim

with those for multiple violations of section 5-12-080 and a violation of section 5-12-100; (2)

abused its discretion in reducing the attorney fees and costs from $19,624 to $5,601.25; and (3)

abused its discretion in failing to award sanctions under Illinois Supreme Court Rule 137 (155

Ill. 2d R. 137) against Livaditis and his counsel, appellant Soula J. Spyropoulos.
1-04-2228

       The issues relating to the improper merger of damages are best understood by briefly

summarizing plaintiffs' seven-count complaint. Count I alleged breach of contract, demanding

the return of the security deposit. Count II alleged that defendant failed to return the security

deposit within the time stated by section 5-12-080 of the RLTO. Count III alleged that

defendant commingled the security deposit with defendant's personal assets in violation of

section 5-12-080 of the RLTO. Count IV alleged that defendant failed to provide the tenant with

a summary of the RLTO, in violation of section 5-12-170 of the RLTO. Count V alleged that

defendant failed to issue a receipt for the security deposit in violation of section 5-12-080 of the

RLTO. Count VI alleged that defendant failed to maintain the leased premises, allowing tenant

to vacate and have the security deposit refunded under section 5-12-110 of the RLTO. Count

VII alleged that defendant violated section 5-12-100 of the RLTO by failing to notify the tenant

of citations from the City of Chicago and a notice from People's Gas that it would discontinue

utility service to the building. The trial court entered an award of $4,200, representing $1,400 on

count VI and merging damages on counts I, II, III, V and VII. The trial court did not enter

judgment on count IV.

       The resolution of the damages issues are controlled by the text of the RLTO and this

court's decisions in Plambeck v. Greystone Management & Columbia National Trust Co., 281
Ill. App. 3d 260 (1996), and Szpila v. Burke, 279 Ill. App. 3d 964 (1996). The award in this case

was in the amount of $4,200--which includes the $1,400 security deposit (as damages for the

failure to maintain). The $1,400 is separately marked in the judgment order, so it cannot be said

that it was "merged" into the other damages. The damages for the breach of contract claim also

represent the return of the security deposit and are properly merged with the damages for the

failure to maintain, not with the other claims under the ordinance. However, this error is purely

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technical. The trial court also awarded $2,800--twice the security deposit, which is the measure

of damages under section 5-12-080(f) of the RLTO. As for the remaining $2,800, both

Plambeck and Szpila provide for this singular award in cases of multiple violations of other

portions of section 5-12-080.

        Appellants argue that Szpila was overruled by our supreme court in Lawrence v. Regent

Realty Group, Inc., 197 Ill. 2d 1, 12 (2001), but the sole issue in Lawrence was whether the

RLTO required a landlord's violation of the interest payment provisions to have been willful

before the tenant was entitled to recover the damages, attorney fees and costs. Our supreme

court overruled Szpila to the extent that it conflicted with the court's decision, but otherwise

stated that Szpila was "properly distinguished" by this court. Lawrence, 197 Ill. 2d at 12. This

court distinguished Szpila on the grounds that there were multiple violations of the RLTO

alleged in multiple counts and--secondarily--that the plaintiff in Szpila contributed to the

compounding of violations by not acting earlier. Lawrence v. Regent Realty Group, Inc., 307 Ill.

App. 3d 155, 159 (1999). Thus, the supreme court approved treating multiple violation cases

differently.

        Appellants also argue that People ex rel. Department of Public Health v. Wiley, 218 Ill.
2d 207 (2006), and City of Chicago v. Elevated Properties, L.L.C., 361 Ill. App. 3d 824 (2005),

are persuasive authority for imposing a separate penalty for each violation of the RLTO. Wiley

involved the Family Practice Residency Act (110 ILCS 935/1 et seq. (West 2002)), which

created medical scholarship contracts that require the recipient to perform a term of service in

designated shortage areas after becoming licensed to practice medicine. Section 10 of the statute

provides that if a recipient fails to perform, the recipient "shall pay to the Department a sum

equal to 3 times the amount of the annual scholarship grant for each year the recipient fails to

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fulfill such obligation." 110 ILCS 935/10 (West 2002). This language expressly refers to

penalties for "each year" of an annual scholarship. In contrast, the payment of a security deposit

is a singular event and the RLTO does not specify double damages for "each" violation of 5-12-

080. Similarly, in Elevated Properties, the vacant building registration ordinance specifically

provided that every day a violation continued constituted a distinct and separate offense, with a

mandatory fine for each offense. Wiley and Elevated Properties demonstrate that the City of

Chicago could have employed such language, but chose not to do so.

       However, section 5-12-080(f) provides that it "does not preclude the tenant from

recovering other damages to which he may be entitled under this chapter." Chicago Municipal

Code '' 5-12-080(f) (amended November 6, 1991). Accordingly, plaintiffs are correct that the

trial court erred in failing to award separate damages for the violation of section 5-12-100

(requiring disclosure to tenants regarding legal proceedings, cutoff of utilities), as the ordinance

specifically states that such violations shall entitle the tenant to remedies under section 5-12-090.

       In short, the trial court did not err in its calculation of damages for the breach of contract

claim or the violations of section 5-12-080 of the RLTO. The trial court did err in failing to

assess damages under section 5-12-090 for the violation of section 5-12-100. That error may

have affected the amount of attorney fees and costs awarded, as any such calculation includes a

consideration of the results achieved for the client. Kaiser v. MEPC American Properties, Inc.,

164 Ill. App. 3d 978, 984 (1987). Thus, the trial court must reconsider these issues on remand.

       Finally, appellants argue that the trial court erred in refusing to impose Rule 137

sanctions against defendant and defense counsel. Pursuant to Rule 137, the trial court may

impose sanctions against a party or his counsel for filing a motion or pleading that is not well

grounded in fact, not supported by existing law, or lacks a good-faith basis for modification,

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reversal, or extension of the law, or is interposed for any improper purpose. Peterson v.

Randhava, 313 Ill. App. 3d 1, 6-7 (2000). As the Peterson court explained, "[t]he purpose of

Rule 137 is to prevent the filing of frivolous and false lawsuits." Peterson, 313 Ill. App. 3d at 7.

Yet, "the rule is not intended to penalize litigants and their attorneys merely because they were

zealous, yet unsuccessful." Peterson, 313 Ill. App. 3d at 7. Because the rule is penal in nature, it

must be strictly construed. Peterson, 313 Ill. App. 3d at 7. When called upon to determine

whether sanctions were appropriate in a given case, we employ an abuse of discretion standard

of review. Baker v. Daniel S. Berger, Ltd., 323 Ill. App. 3d 956, 963 (2001). A trial court

abuses its discretion when no reasonable person could take the view it adopted. Technology

Innovation Center, Inc. v. Advanced Multiuser Technologies Corp., 315 Ill. App. 3d 238, 244

(2000).

          In this case, the trial court found that this was one of many cases where the lawyers

seemed incapable of getting along, but ultimately concluded that under the circumstances,

sanctions were unwarranted. Following a review of the record, we cannot say that no reasonable

person would take this view. Accordingly, the trial court did not abuse its discretion in denying

plaintiffs' motion for sanctions.

          For all of the aforementioned reasons, this case is reversed and remanded for a

recalculation of damages, fees and costs consistent with this opinion.

          Affirmed in part and reversed in part; cause remanded.

          QUINN, P.J., and MURPHY, J,, concur.

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