Appeal from the Appellate Court, First District, Cook County. Case Numbers: AC1-96-0336, TR95L881. Trial Judge: Hon. Sidney A. Jones III.
The Honorable Justice Bilandic delivered the opinion of the court. Justice Heiple, dissenting. Justice Harrison joins in this dissent.
The opinion of the court was delivered by: Bilandic
The Honorable Justice BILANDIC delivered the opinion of the court:
In this appeal we must determine how the statutory $10,000 limit on recovery from the Real Estate Recovery Fund (225 ILCS 455/23 (West 1992)) operates where multiple parties have been injured as a result of a single transaction.
In 1993, the two plaintiffs, John and Barbara Paris, entered into a written agreement to purchase certain real estate located in Skokie, Illinois, from the owner of record. Plaintiffs deposited $20,750 in earnest money with the seller's licensed real estate broker, Liberty Real Estate, Inc. The purchase agreement terminated without default, but Liberty Real Estate failed to return plaintiffs' earnest money.
According to the record, one of the owners of Liberty Real Estate stole plaintiffs' earnest money and disappeared. The company's president, Samuel Feder, later signed a promissory note agreeing to repay the stolen earnest money to plaintiffs, but never did so.
Plaintiffs brought an action against Liberty Real Estate, Feder, and others for conversion and breach of the promissory note in the circuit court of Cook County. Ultimately, the circuit court entered a default judgment in favor of plaintiffs and against Liberty Real Estate and Feder for $20,750 plus costs. A separate, punitive damages award was also entered.
Unable to collect on their $20,750 judgment, plaintiffs filed a verified claim against the Real Estate Recovery Fund (the Fund). Although the verified claim is not contained in the record, the parties agree that plaintiffs sought recovery from the Fund in the amount of $20,000, plus an additional 15% for attorney fees, for a total of $23,000. Plaintiffs apparently did not seek to recover any costs of suit from the Fund. See 225 ILCS 455/23 (West 1992).
The Department of Professional Regulation, then the governmental entity in charge of maintaining the Fund (225 ILCS 455/23 (West 1992)), intervened and filed a response to the verified claim. The Department argued that the statute governing the Fund limits recovery from the Fund to a maximum of $10,000 for each transaction, plus an additional 15% for attorney fees, regardless of the number of parties aggrieved in the transaction. The Department relied on the appellate court decision of Von Meeteren v. Sell-Sold, Ltd., 274 Ill. App. 3d 993, 211 Ill. Dec. 115, 654 N.E.2d 577 (1st Dist. 1995). Accordingly, the Department contended, the Fund's maximum liability to plaintiffs was $10,000 plus $1,500 for attorney fees.
Plaintiffs argued in reply that the statutory $10,000 limit on recovery does not apply to each transaction, but rather only to each aggrieved party. Relying on the appellate court opinion of Reda v. Otero, 251 Ill. App. 3d 666, 190 Ill. Dec. 795, 622 N.E.2d 825 (2d Dist. 1993), plaintiffs claimed that, under the statute, each and every aggrieved party is entitled to recover from the Fund $10,000 plus $1,500 in attorney fees. Plaintiffs therefore maintained that, as two aggrieved parties, they were entitled to recover from the Fund a total of $23,000.
The circuit court rejected plaintiffs' contention and directed the Fund to pay them $10,000 plus $1,500 for attorney fees. The appellate court affirmed, following Von Meeteren. 285 Ill. App. 3d 1016, 675 N.E.2d 269, 221 Ill. Dec. 362. We allowed plaintiffs' petition for leave to appeal (155 Ill. 2d R. 315(a)) and now affirm the circuit and appellate courts.
Illinois' Real Estate Recovery Fund, conceived in legislation enacted in 1973 (1973 Ill. Laws 2746, 2749-50), is now governed by certain provisions of the Real Estate License Act of 1983 (the Act) (225 ILCS 455/23 through 30 (West 1992)). Supported by fees paid by real estate professionals, the Fund provides a pool of money from which persons who are injured by the misconduct of licensed real estate professionals, and who are not able to collect on a judgment obtained against such professionals, may be able to receive payment. 225 ILCS 455/15, 23 through 25 (West 1992). Recoveries from the Fund are limited and are not intended to ...