APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION
545 N.E.2d 252, 189 Ill. App. 3d 233, 136 Ill. Dec. 728 1989.IL.1474
Appeal from the Circuit Court of Cook County; the Hon. Joseph M. Wosik, Judge, presiding.
JUSTICE PINCHAM delivered the opinion of the court. LORENZ and COCCIA, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE PINCHAM
Plaintiff, City of Evanston, filed a complaint for a declaratory judgment and an injunction. The complaint alleged that the defendant Evanston Fire Fighters Association, Local 742, International Association of Fire Fighters, AFL-CIO-CLC (Evanston Fire Fighters Association or Association) and the defendant Blair Haltom (Haltom), president of the Evanston Fire Fighters Association, violated section 11(d) of the solicitation of funds for charitable purposes act of the State of Illinois (the Solicitation Act) (Ill. Rev. Stat. 1985, ch. 23, par. 5111(d)). The complaint further alleged that the defendants also violated various rules and regulations of the Evanston fire department by soliciting funds for various civic-related activities of the Evanston Fire Fighters Association. The injunction sought was to prohibit the defendants from utilizing the name "Evanston Fire Fighters Association" and their Maltese cross fire emblem in their solicitation campaigns.
Defendants moved to dismiss the City of Evanston's complaint on the grounds that the City of Evanston lacked authority and standing and was not empowered to bring an action under the Solicitation Act. The defendants' motion to dismiss the City's complaint was based on the premise that section 9 of the Solicitation Act empowered only the Attorney General of the State of Illinois to bring an action for a violation of or for injunctive relief under the Solicitation Act. The defendants contended that section 9 conferred enforcement powers of the Solicitation Act only upon the Attorney General and that the City of Evanston lacked authority or standing to bring the instant action for an alleged violation of the Solicitation Act.
The trial court held that section 9 of the Solicitation Act did not preclude parties other than the Attorney General of the State of Illinois from bringing an action to enforce and for a violation of provisions of the Solicitation Act and denied the defendants' motion to dismiss the City of Evanston's complaint.
The defendants filed their answer and counterclaim in which they denied that their solicitation campaign was in violation of section 11(d) of the Solicitation Act. The defendants also alleged that the trial court lacked jurisdiction to declare the defendants in violation of the rules and regulations of the Evanston fire department. The defendants' answer also denied that their solicitation campaign was in violation of these rules and regulations. The defendants' counterclaim sought damages for Haltom's lost wages which he incurred while on suspension by order of the Evanston fire department fire chief, Sanders Hicks (Chief Hicks), because of Haltom's alleged violations of the Solicitation Act and the Evanston fire department's rules and regulations.
Following an evidentiary hearing on the permanent injunction, the trial court found that "the solicitation of funds by the defendants utilizing the name and logo Evanston Fire Fighters Association is unlawful and contrary to chapter 23, section 5111(d) of Ill. Rev. Stat. 1985 (The Solicitation Act) and Rule 5, paragraphs 17 and 18 of the Rules of the Evanston Fire Department." The trial court entered judgment in favor of the City of Evanston, plaintiff, and against defendants, ordered that the defendants' counterclaim be dismissed and that the defendants be "permanently enjoined from the solicitation of funds utilizing the name and logo of Evanston Fire Fighters Association, in accordance with the complaint."
The defendants appeal. One of the issues presented for review is whether the trial court erred in denying the defendants' motion to dismiss the City of Evanston's complaint, i.e., whether the City of Evanston was authorized, empowered or had standing under section 9 of the Illinois Solicitation Act to bring an action for enforcement or for a violation of the Solicitation Act, or whether said act only empowered and authorized the Attorney General of the State of Illinois to bring such an action. Another issue presented for review is whether, on the evidence before it, the trial court erred in granting plaintiff, the City of Evanston, a permanent injunction and in holding that the defendants' use of the logo and name of "Evanston Fire Fighters Association" in soliciting funds was unlawful and contrary to section 11(d) of the Solicitation Act and Rule 5, paragraphs 17 and 18, of the rules of the Evanston fire department. Also presented for review is whether the trial court had jurisdiction to determine whether the defendant Haltom violated the rules and regulations of the Evanston fire department. The final issue presented for our review is whether the trial court erred in dismissing the defendants' counterclaim for monetary damages.
We reverse and remand with directions.
The following facts are pertinent to our resolution of the aforementioned issues and this appeal.
The defendants in the instant complaint are the Evanston Fire Fighters Association, Local 742, International Association of Fire Fighters, AFL-CIO-CLC and its president, Blair Haltom. At the time the complaint was filed by the City of Evanston, Haltom had been employed by the City of Evanston fire department for 10 years and had been a captain for two years. Captain Haltom was a crew chief of an engine company and as such was responsible for the apparatus and the men assigned to the engine. Haltom had been a member of the Evanston Fire Fighters Association for nine years and had been the Association's president for seven years.
The Evanston Fire Fighters Association was founded in 1872 and became chartered with the International Association of Fire Fighters as Local 742 in 1942. The International Association of Fire Fighters is the parent organization of all the local fire fighter associations in the United States and Canada. It lobbies on behalf of fire fighters regarding fire safety, pension rights and other matters related to the employment and working conditions of fire fighters.
The Evanston Fire Fighters Association negotiated with the City of Evanston over wages, hours, and terms and conditions of employment beginning in the 1950s and has had a formal written collective bargaining agreement with the City since 1972. In addition to its collective bargaining activities, the Association also engaged in fund raising to sponsor Thanksgiving dinners for the needy and toy collections during the Christmas season for needy children.
Haltom, as president of the Evanston Fire Fighters Association, was chief executive officer of the executive board as well as chairman of all the Association's committees. Haltom was also responsible for the Association's fund raising. As part of this responsibility, Haltom, on behalf of the Association, entered into a contract with Ward Keil of Communication Publication in August 1986 to solicit money for the Association. Haltom and Keil agreed that Keil would sell advertisement space in a fire safety magazine in exchange for a donation to the Association. The magazine was to contain fire safety tips, fire awareness articles and instructions for dealing with other fire department-related emergencies and was to be distributed to the family homes in the City of Evanston.
Haltom directed Keil on the procedures that he and his solicitors were to follow while soliciting. The solicitor was required to present a letter, drafted by the Evanston Fire Fighters Association on the Association's stationery and signed by Haltom, to the person solicited, which letter introduced the solicitor and described the solicitation program. The Association had used this particular form letter on the Association's stationery since 1980 and had used a similar letter throughout prior years. The Association's stationery also included the Association's logo, a Maltese cross, which is a registered trademark of the International Association of Fire Fighters and which had been used by the Evanston Fire Fighters Association since 1942. The letter contained an introduction of the solicitor, a statement that he was receiving advertisement orders in support of the Association's first annual community awareness magazine, and a statement that the money was to be used to initiate a smoke detector program for Evanston homes. The letter and a more detailed description of the Maltese cross emblem are fully set forth later in this opinion.
Haltom also instructed the solicitors that they were to represent themselves as representatives of the Evanston Fire Fighters Association, that the solicitors were to contact the person to be solicited in a face-to-face meeting and not by telephone, and the solicitors were to provide Haltom's home telephone number to the persons solicited in the event they had any questions regarding the solicitation.
Pursuant to the agreement with Keil, the solicitor would receive a percentage of the funds raised by the solicitations to cover overhead costs, payment of employees, printing of the magazine, collecting information to be placed in the magazine and the distribution of the magazine to all the Evanston homes. The remaining funds were to be used to purchase smoke detectors by the Association. The Association would then sell the smoke detectors to the Evanston public at half price. The funds from the resale to the public would be used to fund the Association's related activities and expenses, such as a memorial for Marty Leoni, a recently deceased City of Evanston fire fighter, gifts for retirees, and costs related to the Association's collective bargaining duties.
Haltom became aware of the City of Evanston's objections to the solicitation campaign when he was contacted by Joel Asprooth, city manager of the City of Evanston. Asprooth stated that he possessed one of the Evanston Fire Fighters Association introductory solicitation letters and he wanted to know if a solicitation campaign was being conducted by the Association. After Haltom informed Asprooth that a solicitation campaign was being conducted, Asprooth stated that this action would subject Haltom to discipline.
Haltom was ordered into the office of City of Evanston fire department fire chief Sanders Hicks, where he was told by Chief Hicks that he would be suspended on his next duty if the Association did not halt the solicitation campaign. Prior to Haltom's next scheduled duty day, he contacted counsel who represented the Evanston Fire Fighters Association, Roy D. Winn, and informed attorney Winn of the dispute between Chief Hicks, the Association and him. Shortly thereafter Haltom and attorney Winn met with City Manager Asprooth, Chief Hicks and Donald Anderson, counsel for the city of Evanston. During the meeting, the Evanston Fire Fighters Association offered to place a disclaimer in the introduction letter which would state that the City of Evanston had no connection with nor supported the Association's solicitation campaign. The City of Evanston, however, rejected the Association's offer and instead proposed that if the Association removed its Maltese cross logo and the word "Evanston" from the introduction letter, Haltom would be reinstated and the City of Evanston and the Evanston fire department would allow the Association to continue its solicitation. This proposal was rejected by attorney Winn and Haltom because they were of the opinion that the Evanston Fire Fighters Association had the lawful right to use its logo and name in its solicitation campaign.
Chief Hicks suspended Haltom on October 23, 1986, for 24 hours without pay. Chief Hicks met with Haltom again on October 26, 1986, and asked him whether he had complied with the order to cease the solicitation. Haltom told Hicks that he had not complied with the order, and Hicks suspended him without pay pending a due cause meeting and a predisciplinary hearing. A due cause meeting was held on October 27, 1986, between Chief Hicks, the City of Evanston's deputy city manager Tom Carlson, the City of Evanston's city personnel director Judy Witt, and Herb Hill from the City of Evanston's legal department to determine whether a rule infraction occurred and to set the maximum disciplinary penalty. At the meeting, a maximum penalty of a 30-calendar-day suspension for Haltom was determined.
A predisciplinary hearing was held on October 29, 1986, with the defendants' attorney, Winn, Haltom, Hicks and Sharon Eiseman, an attorney from the City of Evanston's legal department. At the Conclusion of the hearing, Chief Hicks found Haltom guilty of the alleged violations and suspended him for 30 days. The suspension was effective from November 1 to December 1, 1986.
Following the October 29, 1986, hearing, the Evanston Fire Fighters Association revised the solicitation introductory letter to include a description of the Evanston Fire Fighters Association and a statement that it was the Evanston Fire Fighters Association, and not the City of Evanston or the Evanston fire department, which was promoting the magazine and the solicitation. The Fire Fighters Association further revised the solicitation introductory letter by including therein a statement that the Fire Fighters Association was neither sanctioned nor supported by the City of Evanston or the Evanston fire department. This letter is also herein set forth in full.
Plaintiff, the City of Evanston, brought its complaint for a declaratory judgment and for injunctive relief under the solicitation of funds for a charitable purpose act (Ill. Rev. Stat. 1985, ch. 23, par. 5101 et seq.) (the Solicitation Act). The defendants urged in their motion to dismiss plaintiff's complaint that the Solicitation Act authorized only the Attorney General of the State of Illinois, and not the City of Evanston, to bring such a complaint. The trial Judge denied the defendants' dismissal motion and, after an evidentiary hearing, granted plaintiff's requested injunctive and other relief. In so doing, the trial court held that the Solicitation Act empowered the City of Evanston to bring the action. We do not agree with this holding by the trial court.
The defendants persuasively argue that the legislature conferred the Solicitation Act's enforcement powers exclusively on the Attorney General of the State of Illinois and that the Act does not empower the City of Evanston to bring an action to enforce or for a violation of the Act's provisions, and the trial court therefore erred in denying the defendant's motion to dismiss the City of Evanston's complaint.
It is clear from the language of the Solicitation Act that the Act was designed and intended to confer exclusively upon the Attorney General of the State of Illinois the power and authority to regulate, control, and to enforce its regulations for the solicitation of funds for charitable purposes in Illinois. The Solicitation Act sets out an elaborate procedure for the Attorney General's performance of these responsibilities and duties conferred upon him by the Act. The following synoptic review of the paragraphs and provisions of the Act establishes these principles.
The initial section 1 of the Solicitation Act defines charitable organizations, contribution, person, professional fund raiser, professional solicitation and charitable purpose. The initial section 1 is one of the few sections of the Solicitation Act which does not mention the Attorney General. Practically every other section of the Act which follows mentions and sets forth the Attorney General's duties and responsibilities.
Section 2 of the Act requires every charitable organization which solicits contributions in the State of Illinois, prior to such solicitation, to file a registered statement, on a form prescribed by the Attorney General, setting forth the names of the soliciting organization, the names and addresses of the organization's officers, when and where the organization was legally established and its tax-exempt status, the purpose of the organization and the solicitation, and other similar information. The registered statement must be signed by the organization's president or other authorized officer. Section 2 also requires the soliciting organization to maintain accurate books and records at the organization's principal office, subject to inspection by the Attorney General. Most importantly, subparagraph (h) of section 2 provides, "The Attorney General may make rules of procedure and regulations necessary for the administration of this Act" (Ill. Rev. Stat. 1985, ch. 23, par. 5102(h)).
It is provided in paragraph (a) of section 3 of the Act that upon the soliciting organization filing the registered statement required by section 2, and notice by the Attorney General of his determination that the organization's purposes are genuine, the Act is not to apply to such organization. The nine subparagraphs of paragraph b of section 3 name and identify those organizations which are exempted from registering with the Attorney General.
Written annual certified reports of the funds and of the soliciting organization, signed by the organization's chief executive officer, are required to be submitted to the Attorney General by section 4 of the Act, and the Attorney General is empowered to cancel the registration of any non-complying organization.
Section 5 of the Act provides the means of service of process on an organization which solicits contributions in the State of Illinois, but which does not maintain an office within the State.
Section 6 of the Act prohibits fund raising within the State before registration with and on the form prescribed by the Attorney General, or after the expiration or cancellation of such registration. The application for the registration is required to be in writing under oath, also on a form prescribed by the Attorney General. A bond to be approved by the Attorney General is required to accompany the organization's application for registration. Section 6 further requires that the bond shall run to the Attorney General "for the use of the State and to any person who may have a cause of action against the obligor of the bond for any malfeasance or misfeasance in the conduct of such solicitation." (Ill. Rev. Stat. 1985, ch. 23, par. 5106.) Section 6 significantly further provides, "Every professional fund raiser required to register pursuant to this act shall file an annual written report with the Attorney General containing such information as he may require by the rule," and that a violation of the provisions of section 6 is a Class A misdemeanor. Ill. Rev. Stat. 1985, ch. 23, par. 5106.
All contracts between professional fund raisers and charitable organizations are mandated by section 7 of the Act to be in writing and a copy thereof filed with the Attorney General and a copy kept in the office of the charitable organization. A violation of section 7 is also a Class A misdemeanor.
Section 8 prohibits a person from acting as a professional solicitor in the employ of a professional fund raiser unless requested, in writing, under oath on the form prescribed by and with the Attorney General, a violation of which is likewise a Class A misdemeanor.
Section 9(a) provides that "[a]n action for violation of this Act may be prosecuted by the Attorney General in the name of the People of the State, and in any such action, the Attorney General shall exercise all the powers and perform all the duties which the State's Attorney would otherwise be authorized to examine or perform therein." (Ill. Rev. Stat. 1985, ch. 23, par. 5109(a).) Paragraph (b) of section 6 decrees, "This Act shall not be construed to limit or restrict the exercise of the powers or the performance of the duties of the Attorney General which he otherwise is authorized to exercise or perform under any provision of law by statute or otherwise." (Ill. Rev. Stat. 1985, ch. 23, par. 5109(b).) It is required in paragraph (c) that whenever the Attorney General shall have reason to believe that any charitable organization, professional fund raiser, or professional solicitor is violating any provision of the Act, or there is employed or about to be employed in a solicitation for a charitable organization a scheme, or artifice to defraud, or for obtaining money or property by false pretenses, misrepresentation, or false statement, the Attorney General "may bring in the circuit court an action in the name, and on behalf of the People of the State of Illinois against such" organization or person to enjoin such action and solicitation. "In connection with such proposed [injunction] action," section 9(c) further provides that "the Attorney General is authorized to take proof in the manner provided in section 2-1003 of the Code of Civil Procedure." Ill. Rev. Stat. 1985, ch. 23, par. 5109(c).
It is provided in section (d) of the Act (Ill. Rev. Stat. 1985, ch. 23, par. 5109(d)) that "[u]pon a showing by the Attorney General in an application for an injunction" any person, as an individual or as a member, officer or agent of a corporation that has been convicted of a felony or a misdemeanor which involves misuse of another's property or money, the Attorney General "may enjoin such persons from engaging in any solicitation or collection of funds for charitable purposes." Section 9(e) authorizes the Attorney General to exercise the injunction, etc., powers conferred by section 9 against any charitable organization or person exempted under section 3. The Attorney General is further entitled, under section 9(f), to recover costs for the use of the State in any action brought under the provisions of the Act.
Section 10 of the Act provides that when the Attorney General requires the attendance of any person in a proceeding for an injunction or in the Attorney General's investigation under section 9, the Attorney General need only order and give the person 14 days' notice of the time and place of such person's appearance and such order and notice "shall have the same force as a subpoena" and failure to comply is punishable by the court as contempt. (Ill. Rev. Stat. 1985, ch. 23, par. 5110.) Additionally, under section 10, the assistant Attorney General is authorized to conduct investigations, hearings and administer oaths in investigatory proceedings brought under section 9.
Section 11(a) prohibits a person from using the name of another person in soliciting contributions in this State. Specifically regarding the case at bar, section 11(d) provides that "[n]o charitable organization or professional fund raiser soliciting contributions shall use a name, symbol, or statement so closely related or similar to that used by another charitable organization or governmental agency that the use thereof would tend to confuse or mislead the public." (Ill. Rev. Stat. 1985, ch. 23, par. 5111(d).) A violation thereof is also a Class A misdemeanor.
Registration under the Act shall not be deemed an endorsement by the State of Illinois of the organization or of the fund raiser, as proclaimed in section 12, which also prohibits any organization from advertising that it has registered or complied with the Act, and the Attorney General is empowered to revoke the ...