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Cook County Fed. Sav. & Loan v. Griffin





APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR L. DUNNE, Judge, presiding. MR. JUSTICE DOWNING DELIVERED THE OPINION OF THE COURT.

Rehearing denied July 5, 1979.

Plaintiff, Cook County Federal Savings and Loan Association, appeals two orders of the circuit court of Cook County entered pursuant to the Administrative Review Act. (Ill. Rev. Stat. 1977, ch. 110, par. 264 et seq.) The first order denied plaintiff's motion to compel defendant Timothy J. Griffin, Commissioner of the Illinois Savings and Loan Associations ("Commissioner"), to file supplemental documents in answer to the plaintiff's complaint. The second order affirmed the Commissioner's approval of defendant Wabash Building and Loan Association's ("Wabash's") application to relocate in Chicago, Illinois, contingent upon the sale of its assets to defendant Unity Savings Association ("Unity").

Although several issues were raised on this appeal, the determinative question is whether the Commissioner's refusal to supply the plaintiff, the trial court, and this court with all of the evidence he considered in approving defendants Unity and Wabash's applications deprived plaintiff of a fair hearing and precluded judicial review of his decision. Because we find that this question must be answered affirmatively, we need not, and indeed cannot consider the plaintiff's contention that the Commissioner's decision was against the manifest weight of the evidence and was therefore improperly affirmed by the trial court. *fn1 Therefore, only those facts relevant to the foregoing inquiry need be set forth.

Effective October 1, 1973, section 1-11 of the Illinois Savings and Loan Act (the Act) (Ill. Rev. Stat. 1973, ch. 32, par. 711) was enacted to require all Illinois savings and loan associations to acquire insurance prior to June 30, 1975. At that time Wabash was an uninsured building and loan association located in Louisville, Illinois. Upon being advised of the foregoing insurance requirement, Wabash entered into an "Agreement of Purchase and Sale" with Unity on March 30, 1974. This agreement was conditioned upon the Commissioner's approval of Wabash's application to relocate in Chicago and to maintain its present facility in Louisville. The record establishes that in late August of 1974, the Commissioner received copies of this agreement, Unity and Wabash's resolutions approving the transaction, and a three-year projection of Unity's financial condition ending in 1977. At oral argument before this court the attorney for defendants Unity and Wabash stated that they were required to file such financial projections with their applications pursuant to a regulation of the Commissioner.

Thereafter, Unity filed an application to maintain a facility in Wabash's Louisville offices and to organize a facility in the vicinity of Lincoln, Devon, and Kimball Avenues in Chicago, Illinois. Wabash later filed a similar application to relocate to the aforementioned Chicago location and to maintain its Louisville facility. Written objections were received from plaintiff and several other savings and loan associations and banks located within the vicinity of the proposed Chicago office. Thereupon the Commissioner held a public hearing on June 30, 1975, in which the parties presented evidence of the need for the proposed Chicago office, the injury to existing associations in the vicinity of the proposed office, and Wabash's ability to meet the capital requirements of the Act. Upon his review of the complete record in the matter, the evidence and testimony recorded at the public hearing, and the recommendation of the "hearing officer," the Commissioner approved the defendant's application. *fn2

Pursuant to the Administrative Review Act (Ill. Rev. Stat. 1977, ch. 110, par. 264 et seq.), the plaintiff filed a complaint in the circuit Court of Cook County alleging inter alia that the findings of the hearing officer and of the Commissioner were not supported by the record. The plaintiff's complaint sought an order requiring the Commissioner to file the complete record in the matter with the court and an order for a new hearing. Shortly thereafter, the Commissioner approved the bulk sale of Wabash's assets to Unity and answered plaintiff's complaint.

Plaintiff filed, in the trial court, a motion to strike the answer or to order a more full and complete answer which would include all interoffice memoranda, all analyses and marketing studies, and all applications relating to the bulk sale. The trial court's order granting this motion was subsequently vacated. During the trial court hearing, plaintiff's renewed motion to strike or supplement the answer was again denied. However, finding the record of the June 30, 1975, hearing to be both procedurally and substantively inadequate, the trial court remanded the matter to the Commissioner for a supplemental hearing. Although the trial court ordered that evidence concerning the bulk sale was to be admitted at the supplemental hearing, it thereafter quashed the plaintiff's subpoena requiring the Commissioner to appear before the hearing officer with certain documents relating to that bulk sale.

Before, during, and after the March-April 1977 supplemental hearing, plaintiff made numerous requests for the Commissioner's file relating to the bulk sale and other documents pertaining to Unity's financial condition. In response to one of these requests, the Commissioner wrote to the hearing officer in part as follows:

"It has been my position that the question of the bulk sale and financial stability of any parties involved in the Application to Relocate having nothing to do with the hearing that you were charged to conduct. Those issues are not for public consumption; but, rather, are highly confidential, supervisory in nature and are being dealt with internally by this Office. * * * Let me assure you that it was my intention to pull every item from the file that referred to financial data, because that is my responsibility."

After noting the testimony and exhibits introduced at the supplemental hearing pertaining to Unity's capital and its ability to support the transaction, the hearing officer made no recommendation on these questions finding that "the question of capital requirements lies solely within the purview of the Commissioner's expertise and discretion." In approving the defendants' applications, the Commissioner again stated that his decision was based on his review of "the file before the Office of the Commissioner of the Savings and Loan Association relative to this matter" and on "the evidence before the duly authorized Hearing Officer."

Upon its review of the supplemental hearing, the trial court again denied plaintiff's renewed motion to compel the Commissioner to supplement his answer with the documents in his bulk sale file. Thereafter, the plaintiff amended its complaint to allege inter alia that the Commissioner's failure to supply it with these documents violated its due process rights. The trial court subsequently affirmed the Commissioner's decision approving the defendants' applications.


The Commissioner's consideration of Wabash's application to relocate to Chicago in conjunction with the bulk sale of its assets to Unity was statutorily sanctioned by Public Act 79-968 effective October 1, 1975, amending section 1-9 of the Illinois Savings and Loan Act (Ill. Rev. Stat. 1975, ch. 32, par. 709; see also Skokie Federal Savings & Loan Association v. Illinois Savings & Loan Board (1st Dist. 1978), 61 Ill. App.3d 977, 983-90, 378 N.E.2d 1090). Also effective on October 1, 1975, shortly before the Commissioner's initial decision, section 3-4(h) of the Act was amended to provide in pertinent part that:

"(h) If a by-law amendment provides for a change in the location of an association's business office or the establishment of an additional office, the Commissioner shall not approve the amendment unless he finds that * * * (2) the capital of the association meets the minimum initial capital requirements for a new office as established by regulation of the Commissioner; [and] * * * (5) there are no matters pertaining to the ...

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