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Bd of Educ. v. Ill. State Bd of Educ.

OPINION FILED MARCH 9, 1984.

THE BOARD OF EDUCATION OF SCHOOL DISTRICT NO. 170, COOK COUNTY, PLAINTIFF-APPELLANT,

v.

THE ILLINOIS STATE BOARD OF EDUCATION ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County; the Hon. Arthur L. Dunne, Judge, presiding. JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT:

Plaintiff Board of Education of School District No. 170 (district) appeals from the dismissal of its petition to recover the expenses of litigation, including attorney fees, pursuant to section 14.1(b) of the Illinois Administrative Procedure Act (section 14.1(b)) (Ill. Rev. Stat. 1981, ch. 127, par. 1014.1(b)). The sole issue before us is the applicability of section 14.1(b) to litigation commenced prior to its January 1, 1982, effective date.

In 1971, the Illinois Superintendent of Public Instruction promulgated Rules and Procedures for the Elimination and Prevention of Racial Segregation in Schools (rules) which were subsequently adopted by the Illinois State Board of Education (Board). Shortly thereafter, the district was notified that it was not in compliance with those rules and was required to take affirmative steps to correct alleged racial imbalance in its schools. On April 21, 1976, after several years of discussion regarding the situation, the district was placed on probationary recognition status for its purported noncompliance and directed to submit a comprehensive desegregation plan. Two such plans were submitted, but the Board rejected them and, in July of 1977, the district was notified that unless it requested an administrative hearing within 30 days, it would be placed on non-recognition status, jeopardizing its receipt of Federal funds. In response to this threatened action, the district filed suit on August 27, 1977, seeking a declaration that the rules were invalid, and on November 21, 1979, the trial court entered an order finding that the rules were arbitrary, capricious, and illegal and enjoining their enforcement. That determination was subsequently affirmed on appeal by decisions of this court (Chicago Heights Public School District 170 v. Illinois State Board of Education (1981), 97 Ill. App.3d 246, 422 N.E.2d 898) and of the supreme court (Aurora East Public School District No. 131 v. Cronin (1982), 92 Ill.2d 313, 442 N.E.2d 511), holding that the Board had acted beyond the scope of its statutory authority in promulgating the rules.

While the Board's appeal was pending before the supreme court, the General Assembly enacted section 14.1(b), effective January 1, 1982, which provides in relevant part:

"In any case in which a party has any administrative rule invalidated by a court for any reason, including but not limited to the agency's exceeding its statutory authority * * *, the court shall award the party bringing the action the reasonable expenses of the litigation, including reasonable attorney's fees." (Ill. Rev. Stat. 1981, ch. 127, par. 1014.1(b).)

Pursuant thereto, the district filed the instant petition in the circuit court on February 23, 1983, seeking to recover $130,417.78 in expenses, including attorney fees, purportedly incurred in the above litigation. The Board moved to dismiss the petition on the grounds that section 14.1(b) was unconstitutional and contrary to public policy and that it could not be applied retroactively. Without reaching the other issues, the trial court ruled that section 14.1(b) was inapplicable because it was not in effect when the rules were declared invalid in 1979. The petition was therefore dismissed, and this appeal followed.

OPINION

The district acknowledges that litigation expenses, including attorney fees, are not recoverable unless specifically authorized by statute or provided for by contract (Midwest Concrete Products Co. v. La Salle National Bank (1981), 94 Ill. App.3d 394, 418 N.E.2d 988), and that, ordinarily, statutes which create new obligations are applied only prospectively in the absence of express language to the contrary (Nelson v. Miller (1957), 11 Ill.2d 378, 143 N.E.2d 673). Nevertheless, it contends that section 14.1(b) may be applied retroactively, arguing that it is a mere change in remedy or procedure of the type courts> have found applicable to litigation pending at the time of enactment.

The general rule regarding the retroactive application of statutes is well established:

"When a change of law merely affects the remedy or law of procedure, all rights of action will be enforceable under the new procedure, without regard to whether they accrued before or after such change of law and without regard to whether or not the action has been instituted, unless there is a saving clause as to existing litigation. [Citations.] Changes in procedure or existing remedies will not be applied retrospectively, however, where a vested, constitutionally protected right will be deprived by such application. [Citation.]" (Maiter v. Chicago Board of Education (1980), 82 Ill.2d 373, 390-91, 415 N.E.2d 1034, 1042.)

In applying this general principle, courts> have permitted retroactive application of statutory amendments affecting jurisdiction and procedures for service of process (Nelson v. Miller (1957), 11 Ill.2d 378, 143 N.E.2d 673; Ogdon v. Gianakos (1953), 415 Ill. 591, 114 N.E.2d 686; In re Marriage of Levy (1982), 105 Ill. App.3d 355, 434 N.E.2d 400), since such changes do not affect the substantive rights of the parties, but merely govern the manner and forum in which those rights may be enforced. Similarly, changes in a statute of limitations have been applied retroactively where the party affected has a reasonable time within which to bring an action after enactment of the change (Orlicki v. McCarthy (1954), 4 Ill.2d 342, 122 N.E.2d 513; cf. In re Petition of Monaco (1936), 287 Ill. App. 540, 5 N.E.2d 755 (amendment which affected merely choice of remedies, without destroying cause of action, applied retroactively)), but denied where the effect would be to totally bar a cause of action without allowing the party a reasonable time within which to commence suit (Hogan v. Bleeker (1963), 29 Ill.2d 181, 193 N.E.2d 844; cf. Matviuw v. Johnson (1982), 111 Ill. App.3d 629, 444 N.E.2d 606 (amendment barring discovery, through procedural in nature, would not be applied retroactively where effect would be to destroy substantive rights)).

• 1 It is the district's position that these cases are dispositive of the issue before us, maintaining that the Board has no "vested right" which would be disturbed by retroactive application of section 14.1(b), and that, since the statute is remedial in nature, the general principle set forth above mandates retrospective application. However, we do not find the concept of "vested rights" particularly helpful in the instant case where we are concerned not with a mere change in an existing procedure or remedy, but imposition of an obligation on defendant which heretofore did not exist. If the existence of a "vested right" were the sole criterion, then defendants would have no protection from the imposition of newly created remedies for past actions, for it can hardly be said that anyone has a "vested right" in that which does not exist. Yet, despite the absence of a "vested right," courts> have not uniformly imposed new remedies retroactively. For this reason, we have found it necessary to consider cases in which other courts> have confronted this issue, and it appears from our analysis of those decisions that while courts> employ varying reasoning, certain common elements are discernable and, we believe, determinative of this question.

We begin our analysis with two cases cited by the district which purport to apply retroactively statutory changes adversely impacting on a defendant. In Songer v. State Farm Fire & Casualty Co. (1980), 91 Ill. App.3d 248, 414 N.E.2d 768, the court considered the applicability of an amendment to section 155 of the Illinois Insurance Code (section 155) (Ill. Rev. Stat. 1981, ch. 73, par. 767) providing for the imposition of attorney fees upon a finding that an insurance company's refusal to settle a claim was vexatious and unreasonable. At the time of the incident giving rise to liability under the policy in Songer, section 155 provided for recovery of attorney fees not to exceed $1,000 (Ill. Rev. Stat. 1975, ch. 73, par. 767); however, prior to issuance of a declaratory judgment in that action, section 155 was amended to remove the fixed limit on the amount of attorney fees recoverable (Ill. Rev. Stat. 1979, ch. 73, par. 767). In reversing the trial court's decision to apply the statute as it existed prior to the amendment, this court stated:

"We believe that the trial court erred in applying the earlier version of the statute. Both versions provide for the recovery of attorney's fees `* * * as part of the taxable costs in the action * * *.' [Citations.] It has been held that there is no vested right in any particular remedy or method of procedure, and statutory amendments affecting procedural rights, including recovery of costs and attorney's fees, should be applied in litigation instituted prior to the amendment, in the absence of a savings clause pertaining to existing litigation." (91 Ill. App.3d 248, 254, 414 N.E.2d 768, 772.)

Similarly, in People v. Frieder (1980), 90 Ill. App.3d 116, 413 N.E.2d 432, the court applied retroactively an amendment to section 41 of the Civil Practice Act (section 41) (Ill. Rev. Stat. 1979, ch. 110, par. 41), which provides for the recovery of expenses, including attorney fees, incurred in responding to untrue pleadings. At the time the allegedly false pleadings were filed in Frieder, section 41 required the party seeking recovery to show that the opponent's allegations were made without reasonable cause, were not made in good faith, and were found to be untrue. (Ill. Rev. Stat. 1975, ch. 110, par. 41.) Shortly thereafter, during the pendency of litigation and prior to the filing of a petition pursuant to section 41, an amendment eliminated the requirement that the movant prove lack of good faith. (Ill. Rev. Stat. 1979, ch. 110, par. 41.) We affirm the trial court's application of the amended version of ...


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