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09/21/89 Nancy Gittleman Et Al., v. Create

September 21, 1989

NANCY GITTLEMAN ET AL., PLAINTIFFS-APPELLANTS

v.

CREATE, INC., DEFENDANT-APPELLEE



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION

545 N.E.2d 237, 189 Ill. App. 3d 199, 136 Ill. Dec. 713 1989.IL.1465

Appeal from the Circuit Court of Cook County; the Hon. Edward Dittmeyer, Judge, presiding.

APPELLATE Judges:

JUSTICE JOHNSON delivered the opinion of the court. McMORROW, J., concurs. PRESIDING JUSTICE JIGANTI, Dissenting.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE JOHNSON

Plaintiffs, Nancy Gittleman and Debra Hanch, appeal from the order of the circuit court of Cook County finding that they were not entitled to the full statutory penalty of an amount equal to their security deposits, costs, and reasonable attorney fees, pursuant to section 2 of the security deposits on residential leases act (Ill. Rev. Stat. 1985, ch. 80, par. 122) (hereinafter the Act). Defendant herein is Create, Incorporated, an Illinois corporation engaged in the business of managing residential apartment buildings. The sole issue on review is whether the trial court erred in failing to impose the statutory penalty.

We reverse.

Plaintiffs were tenants of apartments leased by defendant under a one-year written lease dated September 30, 1986. Gittleman resided at 1371 West Estes, Apartment 2F, Chicago, Illinois, and Hanch resided at 1367 West Estes, Apartment K, Chicago, Illinois. Under the terms of each lease, the security amount and the amount of rent per month would be $300.

Prior to the termination of their leases, plaintiffs made oral and written demands for the return of their security deposits. Subsequently, plaintiffs moved to new residences. An inspection checklist prepared by defendant revealed no damages to plaintiffs' apartments at the end of their tenancies.

On October 27, 1986, defendant mailed a $300 check to Hanch and to Gittleman. Both checks were sent certified mail to their respective former addresses, i.e., 1367 West Estes, Apartment K, and 1371 West Estes, Apartment 2F. Hanch's check was returned "addressee unknown" and not forwarded to any other address. Gittleman's check was returned, marked "unclaimed." On March 3, 1987, another check was mailed to Hanch, which she did receive. The check was mailed prior to defendant being served with summons in this case. A second check was mailed to Gittleman in December 1986; however, it was again returned unclaimed.

On February 17, 1987, plaintiffs filed suit against defendant and Earl Niemoth for their security deposits and interest refunds. Defendant was served on March 10, 1987. A special appearance was filed on behalf of both defendants. The trial date was set for April 2, 1987, but was continued pending a hearing on the special appearance and defendant's motion to quash service. The motion was denied on April 30, 1987. Also on that date voluntary non-suit was taken against Niemoth, who was dismissed as a party defendant.

Plaintiffs filed their motion for summary judgment on June 10, 1987, but it was stricken due to improper notice. On June 16, 1987, defendant filed its motion for summary judgment, which was scheduled to be heard on June 29, 1987. Plaintiffs refiled their motion for summary judgment on June 18, 1987, which was scheduled to be heard on June 25, 1987, but was continued to June 29 pending the hearing on defendant's motion for summary judgment.

On July 27, 1987, arguments were heard on the cross-motions for summary judgment. The court rendered a decision in favor of plaintiffs. It ordered defendant to pay each plaintiff $15 in interest on their security deposits and to pay Gittleman $300 as her security deposit return. The court further ordered defendant to pay costs; however, the court found that plaintiffs were not entitled to an amount equal to the security deposits or attorney fees. This appeal followed.

Plaintiffs contend on appeal that the trial court erred in failing to award them the statutory penalty for refusal to pay interest on their security deposits, pursuant to sections 1 and 2 of the Act. (Ill. Rev. Stat. 1985, ch. 80, pars. 121, 122.) Defendant argues that the leases expressly provided for the Disposition of interest on the deposit. A provision stamped onto the lease provided in relevant part: "It is understood that the security deposit is net of security deposit interest, if any." Defendant claims that the interest on the $300 security deposit is $15 per year, or $1.25 per month, which is ...


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