Armstrong v. Hedlund Corp.

Case Date: 09/29/2000
Court: 1st District Appellate
Docket No: 1-99-1280 Rel

                                                                                                           THIRD DIVISION
                                                                                                           September 29, 2000

 

No. 1--99--1280

KATE ARMSTRONG,

                                        Plaintiff-Appellant,

                                                  v.

HEDLUND CORPORATION and DAVID HEDLUND,

                                        Defendants-Appellee.

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Appeal from the
Circuit Court of
Cook County.



Honorable
James Grogan,
Judge Presiding.

JUSTICE BURKE delivered the opinion of the court:

Plaintiff Kate Armstrong appeals from an order of the circuitcourt dismissing her complaint for unpaid commissions againstdefendants Hedlund Corporation and David Hedlund, with prejudice,based on the running of the five-year statute of limitations fororal contracts pursuant to section 2--619 of the Illinois Code ofCivil Procedure (Code) (735 ILCS 5/2--619 (West 1998)). On appeal,plaintiff contends that the trial court erred in finding that hercause of action accrued on the last day of her employment, October18, 1993, as opposed to her next regularly scheduled payday, onOctober 31, 1993. For the reasons set forth below, we affirm.

In a letter dated October 15, 1998, plaintiff's counseldemanded that defendants make payment to plaintiff for certainunpaid wages, commissions, and "other related sums" she had earnedwhile employed by defendants. The letter further stated thatplaintiff's records showed that Hedlund Corporation owed her$11,152.89, including wages, commissions, and bonuses, but she onlydemanded that defendants pay $8,230 within three days of theirreceipt of the letter, as full and final payment, or she would filea lawsuit to collect the full amount plus interest, costs, andattorney fees.

On October 27, 1998, plaintiff filed a two count complaintagainst defendants, alleging breach of contract (count I) againstHedlund Corporation and a violation of the Wage Payment andCollection Act against Dave Hedlund (count II). In support of herclaims, plaintiff alleged that she worked for Hedlund Corporationfrom October 7, 1990, to October 18, 1993, and that the corporationwas involuntarily dissolved on November 1, 1993. Plaintiff furtheralleged that at the time her employment with the corporationceased, her contract provided:

"7. *** [Plaintiff's] wages would includea commission of 30% of all placement fees paidby companies for workers she placed with them;a commission of 10% of all placement fees paidby companies that she attracted to acceptHedlund Corporation's placement workers; and abonus of 5% of her gross yearly commissions.

8. *** Hedlund was to pay [plaintiff]twice per month, once on the fifteenth of eachmonth and once on the last day of each month.

9. At the time [plaintiff's] employmentceased, she was owed $11,152.89."

In her prayer for relief under each count, plaintiff also requestedprejudgment interest at five percent per year and attorney fees andcosts. Plaintiff attached a copy of her October 15, 1998, letterto the complaint. No other documents were attached as exhibits.

On November 10, 1998, defendants filed a section 2--619 motionto dismiss plaintiff's complaint, arguing that plaintiff failed tofile her action within the five-year statute of limitationsapplicable to oral contracts. Defendants attached a copy of acomplaint filed by plaintiff against them in 1995 as an exhibit totheir motion. The 1995 complaint contained a single count allegingthat defendants violated the Wage Payment and Collection Act (WageAct) (820 ILCS 115/1 et seq. (West 1998)) based on the same factsas the complaint filed by plaintiff in the present case in 1998. Also attached as an exhibit to defendants' motion to dismiss was atrial court order, dated December 7, 1995, striking plaintiff'soriginal complaint pursuant to defendants' section 2--615 motion todismiss, and allowing plaintiff 28 days to file an amendedcomplaint. Defendants further stated in their section 2--619motion to dismiss that plaintiff's 1995 lawsuit was dismissed forwant of prosecution after plaintiff failed to file an amendedcomplaint or to otherwise respond to their counterclaim ordiscovery requests filed in that case.

In her response to defendant's motion to dismiss, plaintiffargued that because defendants were only required to pay her on thefifteenth day and the last day of every month, the fact that heremployment with the corporation ended on October 18, 1993, gavedefendants the right to deliver her final paycheck by October 31and that her cause of action, therefore, accrued on November 1,1993, when defendants failed to make the payment. Plaintiffclaimed that a cause of action for breach of contract did notaccrue until payment of money under the contract was due and thatthe filing of her complaint on October 27, 1998, therefore, fellwithin the applicable five-year statute of limitations.

On February 24, 1999, the trial court granted defendants'motion to dismiss, finding that plaintiff's causes of action aroseon October 18, 1993. The order specifically stated:

"Plaintiff's cause of action arose andaccrued on October 18, 1993 (the date of heralleged termination) and not a later date thatthe Defendants could have relied upon under820 ILCS 115/5 [Wage Act], the cause of actionaccrues for statute of limitations purposesunder 820 ILCS 115/5 and 820 ILCS 115/13 as ofthe date of the employee's termination, 735ILCS 5/13-205 applies to bar these claims asthey were filed more than five years aftertermination, therefore, Defendants' jointmotion to dismiss is granted with prejudice."

On March 26, 1999, plaintiff filed a motion to reconsider thetrial court's February 24, 1999, order. Plaintiff argued that shehad specifically pled that the terms of her contract required thatshe wait until October 31, 1994, for payment from defendants. Ina footnote in her motion to reconsider, plaintiff stated:

"In the event that this motion isunsuccessful, Kate further wishes to clarifyfor the record that her claim for damages ***is not alleging that she worked from October16, 1994 [sic] to October 18, 1994 [sic], tobe entitled to that sum of money. Rather, theterms of her employment contract specifiedthat Kate would not be paid commissions untilHedlund Corporation received payments from thecustomers to whom Kate sold, and then, only inthe next pay period after the pay period inwhich Hedlund received payment. Specifically,if Kate made a sale on October 1, 1994, andthe payment was received by Hedlund on October16, 1994, the next pay period would have beenNovember 1, 1994. Kate's commission wouldthen come due on November 15, 1994."

The trial court denied plaintiff's motion for reconsideration, andthis appeal followed.

Following the filing of this appeal, defendants filed a motionto strike plaintiff's appellate brief based on their argument thatit failed to comply with Supreme Court Rule 341. 177 Ill. 2d R.341. Defendants contend that plaintiff included in her brief"certain allegations, and corresponding arguments, which are whollyunsupported by the [r]ecord." The "unsupported allegations" inplaintiff's brief which defendants complain of include: (1)plaintiff's compensation from Hedlund Corporation consistedentirely of commissions and bonuses and not wages; (2) HedlundCorporation paid her commissions in arrears so that they were "duein the next pay period immediately following the pay period inwhich Hedlund Corporation received payments from its clients"; and(3) Hedlund Corporation had not received certain payments from itsclients by October 27, 1993. Defendants request that we strikeplaintiff's appellate brief or, in the alternative, strike thoseportions of the brief not supported by the record. We took thismotion with plaintiff's appeal.

When considering a motion to dismiss pursuant to section 2--619 of the Code, we accept all well-pleaded facts and reasonableinferences therefrom as true for the purpose of the motion. Barber-Colman Co. v. A & K Midwest Insulation Co., 236 Ill. App. 3d1065, 1073, 603 N.E.2d 1215 (1992). A party cannot assert onappeal matters that were not raised in the trial court. Ragan v.Columbia Mutual Insurance Co., 183 Ill. 2d 342, 355, 701 N.E.2d 493(1998). Supreme Court Rule 341(e) states:

"Appellant's Brief. The appellant'sbrief shall contain the following parts in theorder named:

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(6) Statement of Facts, which contain thefacts necessary to an understanding of thecase, stated accurately and fairly withoutargument or comment and with appropriatereference to the pages of the record onappeal[.]" 177 Ill. 2d R. 341(e)(6).

We first address defendants' contention that plaintiff hasfailed to provide any support for her assertion that she receivedonly commissions as her payment from Hedlund Corporation. Paragraph "7" of plaintiff's complaint states that "[plaintiff's]contract with Hedlund Corporation provided, among other things,that her wages would include a commission *** of all placement feespaid by companies[.]" (Emphasis added.) Additionally, paragraph"15" of plaintiff's complaint states that "[plaintiff] made awritten demand upon Hedlund Corporation for payment of her wages." (Emphasis added.) The record does not contain any furtherdescription or explanation of the compensation earned by plaintifffrom Hedlund Corporation. Based on the facts pled in thecomplaint, which we accept as true for purposes of defendants'motion to dismiss, and the record, we agree with defendants thatthe record does not support an assertion that plaintiff receivedonly commissions as her compensation from Hedlund Corporation, andwe, therefore, strike and do not consider any assertions inplaintiff's appellate brief inconsistent with our finding.

With respect to defendants' next contention that plaintiff hasfailed to support her assertion that Hedlund Corporation paid hercommissions in "arrears," we also find from our review ofplaintiff's complaint and the record that plaintiff did not makeany allegations supporting this assertion and there is no evidencein the record indicating that this assertion was, in fact, a partof plaintiff's employment contract with Hedlund Corporation. Although plaintiff did raise this assertion in the footnote to hermotion for reconsideration, quoted above, the footnote did notproperly raise the issue before the trial court. Motions forreconsideration are intended to bring newly discovered evidence tothe trial court's attention which was unavailable at the time ofthe original hearing (see Continental Casualty Co. v. SecurityInsurance Co. of Hartford, 279 Ill. App. 3d 815, 821, 665 N.E.2d374 (1996)). Plaintiff's assertion in the footnote that HedlundCorporation could pay her commissions in "arrears" pursuant to heremployment contract, entitling her to payment as late as November15, 1993, was not new evidence and could have been raised in hercomplaint or before the trial court prior to its ruling ondefendants' motion to dismiss. We therefore strike this assertionfrom plaintiff's appellate brief and do not address it on appeal.

Lastly, addressing defendants' contention that plaintifffailed to support her assertion in her appellate brief that HedlundCorporation had not received payments from its clients by October27, 1993, we note, as quoted above, that plaintiff's complaint didallege that plaintiff was entitled to commissions on all fees"paid" by companies with which she placed workers. Accepting thisfact as true for purposes of defendants' motion to dismiss, we findthat plaintiff has supported her argument that she would be legallyentitled to commissions on fees paid by companies with whom sheplaced workers after her separation from Hedlund Corporation onOctober 18, 1993. Plaintiff's complaint, however, does not allegethat any such outstanding payments were owed to Hedlund Corporationafter her separation or that such payments were, in fact, made. Additionally, the record does not contain any evidence or argumentsthat such payments were owed or made. We therefore strike anyassertions in plaintiff's appellate brief that payments were madeor owed by clients to Hedlund Corporation after plaintiff'sseparation and do not address these assertions on appeal.

We next address plaintiff's remaining arguments raised in herappellate brief. Plaintiff first contends that the trial courterred in dismissing her breach of contract claim based on the five-year statute of limitations because her claim did not "accrue untilafter the date the money [was] owed" to her under the terms of thecontract between her and defendants. Plaintiff argues that inconsidering defendants' motion to dismiss, the trial court wasrequired to assume that "Hedlund Corporation's clients had not madetheir payments by the date [she] quit." She maintains thatdefendants never presented any evidence that such a payment hadbeen made, and the trial court improperly accepted defendants'"contention" that a cause of action under the Wage Act accrued atthe time of her "separation." Plaintiff further argues that thetrial court's ruling, therefore, ignored the terms of her contractwhich stated that she would not be entitled to a commission untilthe client paid the corporation. She claims that HedlundCorporation had not received payment from its customers by October27, 1993, and that she timely filed her complaint on October 27,1998.

Defendants contend that the trial court properly dismissedplaintiff's complaint because plaintiff failed to allege that hercontract specified that she did not have a right to receivecommissions until Hedlund Corporation's customers first madepayment or that commissions would be paid in arrears so that thecommissions did not become due until the pay period following thatin which the customers paid the corporation. Defendants also arguethat plaintiff failed to allege that Hedlund Corporation had notyet received all customer payments for which she was entitled to acommission by the time her employment was terminated.(1) Defendantsmaintain that the allegations in paragraphs three and nine ofplaintiff's complaint, alleging that when plaintiff's employmentwas terminated on October 18, 1993, she was "owed" $11,152.89,"clearly and unequivocally" alleged that defendants had a "currentand present obligation" to pay her that amount on October 18, 1993. Defendants argue, therefore, that the trial court properly foundthat plaintiff's right to payment accrued on October 18, 1993,which was the beginning of the running of the statute oflimitations on plaintiff's claim.

A motion to dismiss a complaint pursuant to section 2--619(a)(5) of the Code admits all well-pleaded facts in thecomplaint and all reasonable inferences drawn therefrom. Ferrer v.Kuhl, 301 Ill. App. 3d 694, 700, 704 N.E.2d 875 (1998). A trialcourt's dismissal of a complaint under this section is subject tode novo review. Ferrer, 301 Ill. App. 3d at 700.

Section 13--205 of the Code (735 ILCS 5/13--205), in relevantpart, states that "actions on unwritten contracts, express orimplied, *** shall be commenced within 5 years next after the causeof action accrued." The statute of limitations begins to run whenfacts exist which authorize the bringing of an action. Kozasa v.Guardian Electric Manufacturing Co., 99 Ill. App. 3d 669, 673, 425N.E.2d 1137 (1981). When a creditor may legally demand paymentfrom a debtor, a cause of action accrues and the statute oflimitations begins to run. Kozasa, 99 Ill. App. 3d at 673.

Neither party in the present case relies on any case lawfactually on point. Here, plaintiff received from defendantscommissions comprised of certain percentages "of all placement feespaid by companies" with whom she placed Hedlund workers and ayearly bonus based on her gross commissions. Additionally,although plaintiff alleged that she was entitled to payment twiceper month, on the fifteenth and the last day of the month, hercomplaint clearly states that "at the time that her employmentceased" on October 18, 1993, "she was owed $11,152.89." As westated above, plaintiff did not allege in her complaint that shewas entitled to commissions on payments that had not yet been madeto Hedlund Corporation, and the allegations of her complaint failedto raise the possible existence of such outstanding payments. Plaintiff also failed to even allege that any companies madepayments after October 16, 1993, for which she allegedly wasentitled to commissions. The complaint, in fact, alleged thatHedlund Corporation was involuntarily dissolved on November 1,1993. Taking plaintiff's argument one step further, if thecompanies with whom she had placed workers never, in fact, paidHedlund Corporation, then plaintiff would not have been entitled tocommissions on those payments. A letter dated October 15, 1998,only stated that the $11,152.89 figure was based on plaintiff's"records." The records were not attached to plaintiff's complaintor included in the trial record. There is no further explanationin plaintiff's complaint or elsewhere in the record regarding theamount plaintiff claims she was owed at the time of her separationor how these commissions were earned by plaintiff.

Based on the allegations of plaintiff's complaint, asdiscussed above, we find that plaintiff's cause of action forbreach of contract accrued at the time of her separation fromHedlund Corporation on October 18, 1993. Plaintiff alleged thatshe was owed the amount claimed at the time her employment ceased. Plaintiff could have legally demanded payment at that point onOctober 18, 1993, and therefore, the five-year statute oflimitations began to run. Accordingly, plaintiff's complaint filedon October 27, 1998, was untimely, and the trial court properlydismissed count I of her complaint.

Plaintiff next contends that the trial court erred in failingto consider all of the language of section 5 of the Wage Act whichshe claims specifies that employers are permitted to wait until theend of the pay period to pay final compensation. Plaintiff argues,therefore, that her cause of action did not accrue until October31, 1993, which meant that her complaint was filed within the five-year statute of limitations. Plaintiff also argues that section 5of the Wage Act is ambiguous because it states that an employer"shall" make final payment to a departed employee at the time ofseparation, but then further states that the employer needs onlymake final payment at the time of separation if "possible" and that"in no case" can the employer wait longer than the next regularlyscheduled payday. Plaintiff claims that this "internalcontradiction" is ambiguous and the section should be interpretedin a manner that avoids an "absurd, inconvenient, or unjust"result. Plaintiff also argues that the term "possible" in section5 cannot be defined and allows the date that a cause of actionmight accrue to vary depending on the employer's ability to pay anemployee at the time of separation. Plaintiff maintains thatdeparted employees would not have access to the employer'sfinancial information or to the work schedules of the payrolldepartment or payroll company which would prevent an employee fromever knowing whether or not it was "possible" for the employer tomake final payment at the time of separation and, therefore, whenthe cause of action actually accrued, leading to the possibility ofincreased litigation costs from the filing of a lawsuitprematurely. Alternatively, plaintiff requests that we remand thiscase to the trial court for a determination of whether it waspossible for defendants to pay her at the time of her separation.

Defendants disagree with plaintiff's interpretation of theWage Act, arguing that "shall," as used in section 5 "has apreemptive, imperative, compulsory, and mandatory sense as opposedto a permissive sense" and that a terminated employee has a "rightand entitlement" to final compensation at the time of separation. Defendants compare the language in section 5 to interpretations ofleases and mortgages when a tenant or mortgagor is allowed a graceperiod to make a payment that has become due but which does notdiminish the landlord or mortgagee's entitlement to that payment oraffect interest or penalties from collection which are stilldetermined from the date payment was originally due. According todefendants, because plaintiff was entitled to her finalcompensation at the time of her separation, her right to sue forthe failure to pay also accrued on that day.

Section 5 of the Wage Act provides:

"Every employer shall pay the finalcompensation of separated employees in full,at the time of separation, if possible, but inno case later than the next regularlyscheduled payday for such employee. Wheresuch employee requests in writing that hisfinal compensation be paid by check and mailedto him, the employer shall comply with thisrequest." 820 ILCS 115/5 (West 1998).

Courts should not construe a statute in a manner which would leadto consequences which are absurd, inconvenient, or unjust. McMahanv. Industrial Comm'n, 183 Ill. 2d 499, 513-14, 702 N.E.2d 545(1998). The fundamental principle of statutory construction is toascertain and give effect to the intention of the legislature. Inre Application of the County Treasurer, 302 Ill. App. 3d 639, 644,707 N.E.2d 60 (1998). A reviewing court must first look to thewords of the statute as the best indication of legislative intent. County Treasurer, 302 Ill. App. 3d at 644. If the words used inthe statute are ambiguous or if the meaning is unclear, the courtmay consult the legislative history as an aid to construction. County Treasurer, 302 Ill. App. 3d at 644. Generally, the use ofthe word "shall" is regarded as mandatory. Andrews v. Foxworthy,71 Ill. 2d 13, 21, 373 N.E.2d 1332 (1978). Where "shall" is usedin reference to any right or benefit to anyone, and the right orbenefit depends on giving a mandatory meaning to the word, itcannot be given a permissive meaning. Andrews, 71 Ill. 2d at 21. A court should avoid an interpretation of a statute that wouldrender any portion of it meaningless or void. McNamee v. FederalEquipment & Supply Store Co., Inc., 181 Ill. 2d 415, 422, 692N.E.2d 1157 (1998).

Civil suits by aggrieved employees under the Wage Act aregoverned by the limitations provisions of the Code. Clark v.Western Union Telegraph Co., 141 Ill. App. 3d 174, 177, 490 N. E.2d 36 (1986). The purpose of the Wage Act is to insure the promptand full payment of wages due workers at the time of separationfrom employment, either by discharge, layoff or quitting. Conlon-Moore Corp. v. Cummins, 28 Ill. App. 2d 368, 373, 171 N.E.2d 676(1960).

Neither party has cited to any case law specificallyaddressing the language of section 5 of the Wage Act, and ourresearch reveals none. According to the language used in section5, the statute states that the employer "shall" pay finalcompensation at the time of separation. As noted above, courtshave found that the purpose of the Wage Act is to ensure promptpayment of wages to workers at the time of separation. The WageAct, therefore, was intended as a benefit to workers, and the term"shall" as used in section 5 should be given a mandatory meaning. Although section 5 also states that payment shall be made at thetime of separation "if possible," interpreting the statute asargued by plaintiff would in effect render the term "shall"meaningless. We are required to avoid an interpretation with thisresult under the rules of statutory construction. The "ifpossible" language does create an exception to the requirement thatfinal compensation shall be paid at the time of separation. Wetherefore find that, based on the intended purpose of the Wage Actand a reasonable construction of section 5, final compensation mustbe paid at the time of separation, creating a cause of action ifpayment is not paid and starting the running of the statute oflimitations.

Even though this result is not an aid to plaintiff here, we donot find that this result creates an absurd or unjust result bypermitting separated workers to file claims for payment of finalcompensation immediately after separation even though the employerwill be allowed to demonstrate why payment was not possible at thattime. An employer's inability to pay an employee at the time ofseparation may excuse payment until the end of the next regularlyscheduled payday, but this does not affect an employee's right todemand payment which still accrues at the time of separation forpurposes of the statute of limitations.

Based on our holding, we need not address the precise meaningof the phrase "if possible," as used in section 5 of the Wage Act,nor remand this cause as requested by plaintiff.

For the reasons stated, we affirm the order of the circuitcourt.

Affirmed.

HALL, P.J., and WOLFSON, J., concur.

1. *Defendants indicate in their appellate brief that plaintiff'semployment with Hedlund Corporation was terminated. Plaintiff,however, states in her reply brief that she voluntarily left heremployment with Hedlund Corporation, and we find no evidence in therecord that plaintiff's employment was, in fact, terminated byHedlund Corporation.