Village of McCook v. Illinois Bell Telephone Co.

Case Date: 11/07/2002
Court: 1st District Appellate
Docket No: 1-01-1848 Rel

FOURTH DIVISION

NOVEMBER 7, 2002



1-01-1848



VILLAGE OF MCCOOK, a municipal ) Appeal from the
corporation, ) Circuit Court of
) Cook County.
                           Plaintiff-Appellee,  )
)
          v. )
)
ILLINOIS BELL TELEPHONE COMPANY, )
d/b/a Ameritech Illinois, ) Honorable
) Thomas P. Durkin,
                          Defendant-Appellant. ) Judge Presiding.

 

JUSTICE HARTMAN delivered the opinion of the court:

Defendant, Illinois Bell Telephone Company, d/b/a AmeritechIllinois, seeks reversal of the circuit court's order denying itsmotion to dismiss the complaint filed by plaintiff, Village ofMcCook, a municipal corporation, for lack of standing. Plaintiffbrought suit on behalf of itself and all other Illinoismunicipalities and other units of government which, during theperiod of May 1993 through the present, sustained damages by reasonof defendant's failure to collect and remit to plaintiff and theputative class full surcharge amounts allegedly due under theIllinois Emergency Telephone System Act (the Act) (50 ILCS 750/0.01et seq. (West 2000)).

On June 14, 2001, this court denied defendant's applicationfor leave to appeal the circuit court's order under Supreme CourtRule 308 (155 Ill. 2d R. 308 (Rule 308)), accompanied by acertified question. On October 3, 2001, the supreme court denieddefendant's petition for leave to appeal, but entered a supervisoryorder directing this court to "accept this case for a determinationas to the certified question." Leave to appeal pursuant to Rule308 was granted on November 9, 2001. The certified question is asfollows:

"Whether the Village of McCook is authorized,empowered or has standing under the [Act] tobring an action for enforcement or for aviolation of sections 15.3(f) and (g) of the[Act], or whether the [Act] empowers andauthorizes only the Attorney General of theState of Illinois to bring such an action. IfMcCook is not so authorized, whether theclaims McCook asserted are an impermissibleattempt to enforce the [Act]."

Emergency communication service 9-1-1 is provided to units oflocal government by telecommunications carriers, such as defendant,for a fee based upon the number of exchange access lines in themunicipality. In order to pay for 9-1-1 services, the Actauthorizes units of local government to impose by ordinance amonthly surcharge on billed subscribers or customers of thetelecommunications carrier's services. 50 ILCS 750/15.3(a) (West2000). The surcharge, which is collected by the telecommunicationscarrier as a separately stated item on the customer's bill (50 ILCS750/15.3(f) (West 2000) (section 15.3(f))), and then paid to themunicipality, less a 3% commission for the telecommunicationscarrier (50 ILCS 750/15.3(g) (West 2000) (section 15.3(g))),applies to "in service network connections" located within themunicipality (50 ILCS 750/15.3(b) (West 2000)).

Plaintiff in its first amended complaint alleged that in1992, it adopted an ordinance pursuant to section 15.3 of the Act(50 ILCS 750/15.3 (West 2000) (section 15.3)), imposing a monthlysurcharge of $.85 per network connection. In March 1993, defendantbegan surcharge collection as required by sections 15.3(f) and (g). On May 25, 1993, plaintiff and defendant entered into a writtenagreement (the Agreement) pursuant to which defendant agreed toprovide plaintiff with 9-1-1 telephone service in exchange for amonthly fee, based on the number of exchange access lines in themunicipality. On June 4, 1993, plaintiff notified defendant thatthe 9-1-1 surcharge amounts it had collected were below theanticipated revenues based upon the number of exchange accesslines, including Centrex and PBX lines, located within plaintiff'sboundaries.(1) Plaintiff contends that since 1993, defendant hascollected 9-1-1 surcharge amounts in a manner inconsistent with theAct's definition of network connection, thereby breaching itscontractual and fiduciary duties to plaintiff and the class.Plaintiff maintains that the surcharge revenues collected bydefendant were computed using a ratio-based discount that failed tocharge subscribers for each individual PBX and Centrex telephoneline they possessed.(2)

Count I of plaintiff's complaint sought an accounting and amandatory injunction "directing defendant to begin collectingplaintiff's and the [c]lass's surcharge revenues based upon thetotal number of plaintiff's and the [c]lass's telephone accesslines located respectively within each municipality's boundaries." Count II stated a claim for breach of contract, alleging thatdefendant "breached its duties under the contract andsimultaneously its duties under the [Act] when it failed to collectand remit full and proper surcharges to plaintiff and the [c]lassin accordance with the [Act's] definition of the term 'networkconnection.'" Count III alleged a breach of statutory duty. CountIV, which claimed a cause of action for breach of fiduciary duty,alleged that defendant "breached its fiduciary duty to plaintiffand the [c]lass by collecting and remitting 9-1-1 surcharge amountsbased upon less than half the number of telephone access lines,including Centrex and PBX lines, located within the boundaries ofplaintiff and each Class member, respectively."

On February 5, 2001, the circuit court denied defendant's section 2-619 motion to dismiss (735 ILCS 5/2-619 (West 2000)(section 2-619)), which had sought dismissal of the cause basedupon plaintiff's lack of authority or capacity to sue defendant forviolations of the Act.(3) The court stated that it "did not read theAct to confer enforcement authority only with the AttorneyGeneral." The court further found that plaintiff was seekingdamages for breach of contract.

The circuit court certified the question of law concerningstanding under the Act following its denial of defendant's section2-619 motion to dismiss. The standard of review on appealtherefore, is de novo. Weatherman v. Gary-Wheaton Bank of FoxValley, N.A., 186 Ill. 2d 472, 713 N.E.2d 543 (1999).

I

The first part of the certified question is whether plaintiffhas standing under the Act to bring an action for enforcement or aviolation of sections 15.3(f) and (g). Defendant makes severalarguments in support of its contention that plaintiff lacksstanding to bring such an action.(4)

First, defendant argues that the provisions of the Actdemonstrate the legislature's intent that only the Attorney Generalcan enforce compliance with the Act. In interpreting a statute,the court must ascertain and give effect to the intent of thelegislature. Board of Education of Rockford School District No.205 v. Illinois Educational Labor Relations Board, 165 Ill. 2d 80,649 N.E.2d 369 (1995). The language of the statute provides thebest evidence of that intent. Kraft, Inc. v. Edgar, 138 Ill. 2d178, 561 N.E.2d 656 (1990). Statutes should be evaluated in theirentireties and each provision should be construed in connectionwith every other section. Newland v. Budget Rent-A-Car Systems,Inc., 319 Ill. App. 3d 453, 744 N.E.2d 902 (2001).

Sections 12 and 15.1 of the Act (50 ILCS 750/12, 15.1 (West2000)), clearly demonstrate the legislature's intent that only theAttorney General would enforce compliance with the Act. Section12, the general enforcement provision, provides that "[t]heAttorney General may, in behalf of the Commission or on his owninitiative, commence judicial proceedings to enforce compliance byany public agency or public utility providing telephone servicewith this Act." 50 ILCS 750/12 (West 2000). Section 15.1, thegovernmental immunity provision, expressly states that "[t]hisSection may not be offered as a defense in any judicial proceedingbrought by the Attorney General under Section 12 to compelcompliance with this Act." 50 ILCS 750/15.1 (West 2000) (section15.1).

Pointing to section 15.1, as well as, sections 15.5 and 15.6of the Act (50 ILCS 750/15.5, 15.6 (West 2000) (section 15.5,15.6)), plaintiff responds that the Act contemplates privatelawsuits. Section 15.1 provides that no local government or anyof its officers, agents, or employees shall be liable for civildamages resulting from any act or omission in connection withoperating a 9-1-1 system, except for wilful and wanton misconduct. Sections 15.5 and 15.6, which require that providers of private orbusiness switch services provide all end-users with 9-1-1 servicesof uniform quality, expressly prescribe for a private right ofaction: "[n]othing in this Section shall be construed to precludethe Attorney General on behalf of the Commission or on his or herown initiative, or any other interested person, from seekingrelief, by mandamus, injunction, or otherwise, to compel compliancewith this Section." 50 ILCS 750/15.5(e), 15.6(e) (West 2000).

Plaintiff is not suing under sections 15.1, 15.5, or 15.6, butrather under section 15.3 which is silent as to a private right ofaction. The 1994 amendment to the Act, which added sections 15.5and 15.6, demonstrates that when the legislature intended toprovide for a private right of action it did so expressly. SeeHamilton v. Safeway Insurance Co., 104 Ill. App. 3d 353, 432 N.E.2d996 (1982) (finding that if the legislature had intended to granta private right of action under section 154-6 of the Insurance Codeit would have done so explicitly.)

Defendant relies on City of Evanston v. Evanston FireFighter's Ass'n, 189 Ill. App. 3d 233, 545 N.E.2d 252 (1989)(Evanston), in which the issue on appeal was whether the city hadstanding to bring an action for enforcement or for a violation ofthe Solicitation for Charity Act (225 ILCS 460/0.10 et seq. (West2000) (Solicitation Act)). In holding that the Solicitation Actconferred the power to enforce its provisions on the AttorneyGeneral only, the court noted that the act contained numerousprovisions setting forth the Attorney General's responsibilities,including section 9(a) which stated "an action for violation ofthis Act may be prosecuted by the Attorney General in the name ofthe People of the State." 225 ILCS 460/9(a) (West 2000) (section9(a)). The court found that the word "may" in section 9(a) was notintended to convey that other parties were empowered to bring anaction for an alleged violation of the Solicitation Act, but wasused to allow the Attorney General to exercise his discretion inenforcing the Solicitation Act. The court noted that if thelegislature had intended to confer the Acts enforcement powers onothers, it "simply would have said so." Evanston, 189 Ill. App. 3dat 259.

Defendant argues that the present case is similar to Evanston. As in Evanston, the Act contains numerous provisions detailing theAttorney General's compliance and enforcement role. See 50 ILCS750/7, 8, 13, 12, 15, and 15.1 (West 2000).(5) The Act's general enforcement provision is also similar to that found in theSolicitation Act. See 50 ILCS 750/12 (West 2000).

Defendant further argues that private enforcement of section15.3 contravenes Article V, section 15 of the IllinoisConstitution, which provides that "[t]he Attorney General shall bethe legal officer of the State, and shall have the duties andpowers that may be prescribed by law." The supreme court construedthis provision in People ex rel. Scott v. Briceland, 65 Ill. 2d485, 500, 359 N.E.2d 149 (1976), and found that "the AttorneyGeneral is the sole officer authorized to represent the People ofthis State in any litigation in which the People of the State arethe real party in interest, absent a contrary constitutionaldirective." See also Evanston, 189 Ill. App. 3d at 249.

The People of the State of Illinois are the real party ininterest here because the Act was intended to benefit the publicgenerally (see 50 ILCS 750/1 (West 2000) ("The General Assemblyfinds and declares that it is in the public interest to shorten thetime required for a citizen to request and receive emergency aid"and "that the establishment of a uniform statewide emergency numberis a matter of statewide concern and interest to all inhabitantsand citizens of the State")), and it is the general public thatpays the surcharge. If there is going to be a substantial increasein 9-1-1 surcharges on business phone systems statewide, theAttorney General should be representing the public interest. Atoral argument plaintiff's counsel admitted that the AttorneyGeneral could secure all relief requested by plaintiff in thiscase. Plaintiff's counsel further admitted that it never asked theAttorney General to file suit in this case.

Citing Barth by Barth v. Board of Education of the City ofChicago, 141 Ill. App. 3d 266, 490 N.E.2d 77 (1986) (Barth)(6) andCity of Chicago v. Illinois Commerce Comm'n, 294 Ill. App. 3d 129,689 N.E.2d 241 (1997) (City of Chicago), plaintiff argues thiscourt previously decided that parties other than the AttorneyGeneral may sue under the Act. Neither case supports plaintiff'scontention. Barth addressed neither the issue of standing underthe Act, nor involved an alleged violation of the Act. Rather,Barth involved a negligence claim in which a child's mother allegedthat her son did not receive medical treatment for one hour aftera playground injury from which he later died. The court found thatthe city's 9-1-1 system was an emergency service under the Act andnot a police protection service so that section 4-102 of the TortImmunity Act (745 ILCS 10/4-102 (West 2000)), was inapplicable andthe applicable standard of liability was that found in section 15.1of the Act (50 ILCS 750/15.1 (West 2000)). Nor did City of Chicagoinvolve attempts to enforce the Act, but was an administrativeappeal of regulations adopted by the Illinois Commerce Commissionwhere jurisdiction and standing existed by virtue of Supreme CourtRule 335(a) (155 Ill. 2d R. 335(a)) and section 10-201(a) of thePublic Utilities Act (220 ILCS 5/10-201(a) (West 2000)).(7)

Plaintiff lacked standing under the Act to bring an action forenforcement or a violation of sections 15.3(f) and (g). The Actempowers only the Attorney General to bring such an action.

II

The second part of the certified question is whetherplaintiff's claims constitute impermissible attempts to enforce theAct. According to defendant, plaintiff is attempting to evade theAttorney General's enforcement jurisdiction by asserting a barredstatutory violation claim as a breach of contract claim. Count Iseeks a mandatory injunction. Although termed breach of contractand breach of fiduciary duty, counts II and IV are premised solelyupon alleged statutory violations. "Artful pleading" will notdisguise plaintiff's endeavors to enforce the Act. See SundanceHomes, Inc. v. County of DuPage, 195 Ill. 2d 257, 746 N.E.2d 254(2001).

Plaintiff insists that it is merely suing to recover damagesfor defendant's breach of contract and fiduciary duties and is notseeking to enforce the Act. According to plaintiff, the statutoryduties found in sections 15.3(f) and (g) were incorporated into theAgreement as implied terms. Plaintiff cites authorities which holdthat, in the absence of language to the contrary, the laws andstatutes pertinent to a contract and in force at the time thecontract is executed are considered a part of that contract asthough they were expressly incorporated therein. Brandt v. TimeInsurance Co., 302 Ill. App. 3d 159, 704 N.E.2d 843 (1998) (holdingthat requirement in section 154 of the Insurance Code that a copyof the application be attached to a policy before an insurer couldrely on a misrepresentation contained therein to avoid the policy,became an implied term of the insurance policy); Lincoln TowersInsurance Agency, Inc. v. Boozell, 291 Ill. App. 3d 965, 684 N.E.2d900 (1997) (holding that set off provision in section 206 of theInsurance Code is deemed a part of any contract executed by theinsurer and the producers); S&D Service, Inc. v. 915-925 W.Schubert Condominium Ass'n, 132 Ill. App. 3d 1019, 478 N.E.2d 478(1985) (section 18.2 of the Condominium Act was an implied term ofplaintiff's lease with the developer in the absence of contrarylanguage in lease); Selcke v. New England Insurance Co., 995 F.2d688 (7th Cir. 1993).

Based on the foregoing cases, plaintiff argues that whendefendant entered into the Agreement to provide 9-1-1 service, itwas deemed to have accepted every duty imposed by the Act as partof the Agreement, including section 15.3's duty to collect andremit surcharge revenue in a manner consistent with the Act'sdefinition of network connection. The cases relied upon byplaintiff do not involve a situation, as here, where the plaintiffalleged a barred statutory violation claim as a breach of contractclaim.

In Lehmann v. Arnold, 137 Ill. App. 3d 412, 484 N.E.2d 473(1985), the court rejected the plaintiffs' attempt to assert abarred statutory violation claim as a breach of contract claim. Plaintiffs brought a breach of contract action against the bankfrom which they had borrowed funds to buy their home, after theyexperienced flooding problems on their property. Plaintiffsalleged that the bank had failed to comply with the provisions ofthe National Flood Insurance Act of 1968 (42 U.S.C. sec. 4001 etseq. (1982) (Flood Insurance Act)). The court recognized thegeneral rule that "the law existing at the time and place of themaking of a contract is deemed a part of the contract as thoughexpressly referred to or incorporated in it," but affirmed thedismissal of plaintiffs' breach of contract claim after noting thatthe Flood Insurance Act did not create a federal private cause ofaction for borrowers. The court refused to recognize a state causeof action for violation of the Flood Insurance Act.

Similarly, the instant Act does not provide for a privateright of action for enforcement of sections 15.3(f) and (g). Plaintiff's claims are an impermissible attempt to enforce the Act.

For the reasons stated, the first part of the certifiedquestion regarding whether plaintiff "has standing under the [Act]to bring an action for enforcement or for a violation of sections15.3(f) and (g)," is answered in the negative. The second part ofthe certified question regarding whether "the claims [plaintiff]asserted are an impermissible attempt to enforce the [Act]," isanswered in the affirmative. The circuit court erred in denyingdefendant's motion to dismiss plaintiff's complaint. Accordingly,the judgment of the circuit court of Cook County is reversed.

Reversed.

GREIMAN and KARNEZIS, JJ., concur.

1. PBX and Centrex are comparable business telephone systemswhich provide users with, inter alia, the ability to connect withanother phone in the same system by dialing a four digit extension.

2. In determining the number of exchange access lines andnetwork connections for 9-1-1 purposes, defendant uses a PBX trunkequivalency schedule, pursuant to which a PBX trunk, i.e. the linebetween the customer's PBX switch and defendant's switch, iscounted as one exchange access line, and therefore constitutes onenetwork connection for 9-1-1 surcharge purposes. For Centrexcustomers, the PBX trunk equivalency schedule converts the totalnumber of lines in use into a corresponding number of PBX trunkequivalents, which in turn, provides the number of exchange accesslines and network connections.

3. The court also denied defendant's motion, brought undersection 2-615 of the Code (735 ILCS 5/2-615 (West 2000) (section 2-615)), to dismiss counts I, II, and IV of the amended complaint,but granted its section 2-615 motion to dismiss count III, fromwhich no cross-appeal is taken.

4. In a motion for leave to file supplemental authority, whichthis court granted, defendant argues that this appeal is renderedmoot by a recent amendment to the Act. The Amendment, which iseffective January 1, 2003, provides that for PBX systems, one PBXtrunk line equals one network connection and for Centrex systemsthe number of network connections is equal to the PBX trunkequivalents. Defendant's supplemental authority will not beconsidered because it requires this court to rule on issues outsidethe certified question regarding standing. McCarthy v. LaSalleNational Bank & Trust Co., 230 Ill. App. 3d 628, 595 N.E.2d 149(1992) (review of an appeal under Rule 308 is limited to thequestion identified by the circuit court.)

5. Section 7 of the Act (50 ILCS 750/7 (West 2000)), providesthat the Commission, "with the advice and assistance of theAttorney General," shall secure compliance with the Act by publicagencies within the time frame provided in the Act. Section 8 ofthe Act (50 ILCS 750/8 (West 2000)), provides that the Commission,"with the advice and assistance of the Attorney General," shallassist local public agencies with obtaining financial help toestablish emergency telephone systems. Under section 13 of the Act(50 ILCS 750/13 (West 2000)), the Attorney General is required toassist the Commission in submitting budgets to the Governorspecifying amounts necessary to further implement the organizationof the 9-1-1 systems. Section 15 of the Act (50 ILCS 750/15 (West2000)), provides that "the Attorney General shall commence judicialproceedings to enforce compliance with this Section and Section 14,where a public agency or public safety agency has failed to timelyenter into such agreement or file copies thereof."

6. Barth was overruled on other grounds by In re Chicago FloodLitigation, 176 Ill. 2d 179, 680 N.E.2d 265 (1997).

7. Village of Montgomery v. Illinois Commerce Comm'n, 249 Ill.App. 3d 484, 618 N.E.2d 1295 (1993) and City of Peoria v. IllinoisCommerce Comm'n, 132 Ill. App. 3d 835, 477 N.E.2d 749 (1985),reliedupon by the circuit court, are distinguishable on the same groundsas they both involved administrative review of Illinois CommerceCommission orders.