Court Opinion

ID: 9819406
Source: CourtListenerOpinion
Date Created: 2023-09-01 06:24:36.378337+00
Date Added: 2024-06-11T12:10:16.548509
License: Public Domain

JUSTICE MYERSCOUGH, dissenting: I respectfully dissent. A. Reimbursement of the Insurance Fund The preeminent rule of statutory construction is to give effect to the language and intent of the legislature. People v. Hicks, 164 Ill. 2d 218, 222, 647 N.E.2d 257, 259 (1995). The express legislative intent of the Act is as follows: “It is the purpose of this Act to promote the State’s welfare by improving the economic stability of agriculture through the establishment of the *** Insurance Fund in order to protect grain producers in the event of the financial failure of a grain dealer *** and to ensure the existence of an adequate fund so that grain producers and claimants may be compensated for losses occasioned by the failure of a grain dealer ***.” (Emphasis added.) Ill. Rev. Stat. 1991, ch. 114, par. 701(b) (now 240 ILCS 25/l(b) (West 1992)). The clear legislative intent of the Act is to protect grain producers and to compensate claimants for their losses. Notwithstanding this clear legislative intent, the Department argues in essence that “ensur[ing] the existence of an adequate fund” (Ill. Rev. Stat. 1991, ch. 114, par. 701(b) (now see 240 ILCS 25/1 (West 1992))) has priority over the protection of grain producers, especially merchandising claimants. This argument, however, ignores the balance of the sentence, which makes clear that the Insurance Fund exists for one purpose: “so that grain producers and claimants may be compensated for losses.” Ill. Rev. Stat. 1991, ch. 114, par. 701(b) (now see 240 ILCS 25/l(b) (West 1992)). Clearly the purpose behind the Act was to protect fully all grain producers from losses caused by a failed grain dealer: “Brummer: ‘You mean the ... the individual recovers 100 percent of the loss?’ Richmond: ‘He would recover 85 percent that’s covered in this Fund, and then the assets in a bankruptcy ...’ Brummer: ‘So, in effect, there’s a 15 percent coinsurance, if you will, or a 15 percent of the loss ...’ Richmond: ‘*** [T]he warehouseman is covered 100 percent. And those who are covered the 85 percent is by the dealer ... in the dealer’s situation. The additional 15 percent could very well be brought to zero as a result of the liquidation of the bankrupt assets.’ ” 83d Ill. Gen. Assem., House Proceedings, June 27, 1983, at 307-08 (Statements of Representatives Brummer and Richmond). Moreover, two specific provisions in the Act already ensure the continued existence of an adequate fund without the necessity of shorting any of the grain dealers. Section 5(d) of the Act requires that additional grain dealer fees be assessed if the Insurance Fund balance falls below $3 million. Ill. Rev. Stat. 1989, ch. 114, par. 705(d) (as amended, 240 ILCS 25/5(d) (West 1992)). In addition, section 7 of the Act mandates that, in the event the Insurance Fund is insufficient to pay all approved claims, the General Assembly shall appropriate money to the Insurance Fund to pay all valid claims. Ill. Rev. Stat. 1991, ch. 114, par. 707 (now 240 ILCS 25/7 (West 1992)). Nevertheless, instead of using the express statutory mechanisms provided to ensure the existence of an adequate fund, the Department creates a third method by reading risk distribution principles into the statute that are not readily evident in the plain language, using rationales based on the history of the grain industry. In short, the Department asks this court to stand the statute on its head and prioritize the Insurance Fund over the people whom the fund was created to protect. The plain and ordinary meaning of section 8(a) requires that claimants be “compensated for 85% of a valid claim *** with monies from the Illinois Grain Insurance Fund.” (Emphasis added.) Ill. Rev. Stat. 1991, ch. 114, par. 708(a) (now 240 ILCS 25/8(a) (West 1992)). Section 8(a) also mandates that, “[t]o the maximum extent that funds are or may be made available for. such purpose, the remaining balance of [their] claim shall be paid by the Department from the assets and other security of the failed grain dealer.” (Emphasis added.) Ill. Rev. Stat. 1991, ch. 114, par. 708(a) (now 240 ILCS 25/8(a) (West 1992)). The Department’s interpretation, however, requires that claimants be initially compensated for 85% of a valid claim with monies from the failed grain dealer’s liquidated assets in the Trust Fund and the remaining balance of their claims out of the Insurance Fund. This conclusion is the exact opposite of the plain language in the statute. The Department attempts to minimize this peculiar conclusion by asserting that the language preceding section 8(a) dictates that all claims be initially paid out of the Trust Fund. That language, however, only imposes a 90-day time limit on the Department to pay all valid claims from the Trust Fund. It does not contradict section 8(a). It does not state that the Trust Fund is the fund of first resort. It does not state that the Insurance Fund has priority over the liquidated assets of the failed grain dealer. The Department’s interpretation of the Act, therefore, is not only contrary to the plain reading of the statute, it is also inconsistent with the legislative intent to compensate claimants because it effectively prioritizes the Insurance Fund over the people whom the Insurance Fund was created to protect. The Department’s regulation regarding liquidated assets also supports claimants: “Proceeds from liquidated *** assets of the failed grain dealer *** which the Department has deposited in the Grain Indemnity Trust Fund *** shall be used for the purposes and payments as follows: (a) A claimant under Section 8(a) and (b) of [t]he Illinois Grain Insurance Act. (b) Repayment to the Illinois Grain Insurance Fund as set forth in Section 9(c) of [t]he Illinois Grain Insurance Act. (c) Any funds remaining in the Grain Indemnity Trust Fund shall be paid to the failed grain dealer *** after the payments have been made as set forth in 8 Ill. Adm. Code 285.90 (a) and (b).” (Emphasis added.) 8 Ill. Adm. Code § 285.80 (1992-93) (eff. April 7, 1986). The language “shall be used for the purposes and payments as follows” (emphasis added) (8 111. Adm. Code § 285.80 (1992-93) (eff. April 7, 1986)) indicates a clear prioritization of the Trust Fund: (a) claimants, (b) repayment of the insurance fund, and (c) any funds remaining to the failed grain dealer. Additionally, the Illinois Administrative Code clearly indicates that the fund of first resort is the Insurance Fund and not the Trust Fund. Section 285.90 of Title 8 states that it is the priority of the “[Insurance] Fund and not with the assets of the Grain Indemnity Trust Fund” to pay all “valid claims of claimants who are entitled to payment under Section 8(a) of [t]he Illinois Grain Insurance Act.” 8 Ill. Adm. Code § 285.90 (1992-93) (eff. April 7, 1986). Moreover, this language in the statute, the Illinois Administrative Code, and the legislative history make clear that the 1996 amendment reflects a change in the law rather than a clarification. Cf. Church, 164 Ill. 2d at 163-64, 646 N.E.2d at 578; Harris Bank St. Charles, 298 Ill. App. 3d at 1079, 700 N.E.2d at 727. B. Attorney Fees The Department argues that the record is clear that the hearing officer did not actually invalidate the 270-day delayed-pricing rule; he simply did not apply it based on the circumstances of the case. I agree. The hearing officer did not invalidate the rule; the circuit court did. Therefore, the claimants are entitled to attorney fees and costs under section 10 — 55(c) of the Procedure Act because the Department failed to promulgate the 270-day time-limitation rule relating to Insurance Fund claims consistent with the statutory procedures required. Ill. Rev. Stat. 1991, ch. 127, par. 1014.1(b) (as amended, 5 ILCS 100/10— 55(c) (West 1996)). In 1983, the Department approved and published price-later contracts that, either purposefully or erroneously, omitted the required 270-day time-limitation notice (see 68 Ill. Adm. Code § 600.80(a) (1985) (eff. January 1, 1979 (emergency rule adopted at 3 Ill. Reg. 43, 52))) relating to claims against bonds on the face of all price-later contracts. Then, in 1989, the Department passed new regulations and declared that the time frames were no longer required to be printed on the face of price-later contracts because “the establishing of time periods no longer has the importance that it once did for protecting depositors’ interests nor are time requirements necessary.” See 13 Ill. Reg. 3665, 3666 (eff. March 13, 1989) (summary and purpose of amendments); see also 13 Ill. Reg. 3672-74, amending 68 Ill. Adm. Code § 600.80 (1985) (eff. January 5, 1984) (price-later contracts) and adding 68 Ill. Adm. Code § 600.90 (1992-93) (printing price-later contracts) (eff. March 13, 1989). The 270-day rule and its reference to bonds, however, was neither modified nor eliminated from the grain dealers’ statute until January 1992, when the Act was finally amended to include a reference to the Insurance Fund, instead of bonds. Compare Ill. Rev. Stat. 1989, ch. 111, par. 307, with Ill. Rev. Stat. 1991, ch. 111, par. 307 (as amended by Pub. Act 87 — 262, § 1, eff. January 1, 1992 (1991 Ill. Laws 1681, 1686)) (now see 225 ILCS 630/6.1 (West 1992)). Claimants were clearly correct, therefore, in challenging the hearing officer’s preliminary ruling that the 270-day time restriction applied to Insurance Fund claims because, at that point in time, no regulations or statutes existed authorizing such a rule. Additionally, but for the timely challenge by claimants, the Department would have applied a 270-day time restriction to claims against the Insurance Fund without statutory or regulatory authorization to do so. The circuit court justifiably ordered attorney fees and costs for claimants’ successful challenge of the Department’s 270-day rule as it would have applied to Insurance Fund claims because the court found, consistent with section 10 — 55(c) of the Procedure Act, that the Department failed to follow statutory procedures in the adoption of the rule. The claimants properly challenged a rule in an administrative proceeding that had not been properly promulgated. The circuit court subsequently found that the 270-day rule, as it related to Insurance Fund claims, was improperly promulgated. The claimants, therefore, are entitled to fees under section 10- — 55(c). The circuit court’s invalidation of the hearing officer’s determination that the rule was still valid, even though not applied, dictates such an award. To rule otherwise would allow administrative agencies to impose new rules without restraint and without consequences, so long as the agency chooses not to apply the rule when challenged in ,an administrative hearing. In Citizens Organizing Project v. Department of Natural Resources, 189 Ill. 2d 593, 597-98 (2000), the Supreme Court of Illinois held the award of attorney fees and expenses to be mandatory where an administrative rule has been invalidated by a court, regardless of which party prevailed on any other aspect of the case. The court stated: “If you are a party who has brought any case and you succeed in that case in having any administrative rule invalidated by a court for any reason, you are entitled to recover all of your reasonable litigation expenses, including attorney fees.” (Emphasis in original.) Citizens Organizing Project, 189 Ill. 2d at 599. The claimants are, therefore, entitled to all litigation expenses incurred throughout this action, including in this appeal.