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Canel v. Topinka

June 30, 2003

JAMES H. CANEL, INDIVIDUALLY AND ON BEHALF OF A CLASS OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFF-APPELLANT,
v.
JUDY BARR TOPINKA, TREASURER OF THE STATE OF ILLINOIS, AND MITCHELL MURDOCK, DIRECTOR, UNCLAIMED PROPERTY DIVISION, OFFICE OF THE TREASURER OF THE STATE OF ILLINOIS, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. No. 00 CH 13279 Honorable Stephen Schiller Judge Presiding.

The opinion of the court was delivered by: Justice Hall

UNPUBLISHED

The plaintiff, James H. Canel, appeals from an order of the circuit court of Cook County granting the motion of the defendants, Judy Barr Topinka, Treasurer of the State of Illinois, and Mitchell Murdock, Director of the Unclaimed Property Division of the office of the Treasurer of the State of Illinois, to dismiss his class action complaint.

On September 11, 2000, the plaintiff filed a class action lawsuit against the defendants on behalf of himself and all others similarly situated.

The complaint alleged that section 15 of the Uniform Disposition of Unclaimed Property Act (the Act) (765 ILCS 1025/15 (West 2000) violated section 15 of the Illinois Constitution of 1970 (Ill. Const. 1970, art. I, §15). The complaint also alleged that section 15 deprived the plaintiff of his Fifth and Fourteenth Amendment rights under the United States Constitution (U.S. Const. amends. V, XIV) and thus violated 42 U.S.C. §1983 (42 U.S.C. §1983 (1996)).

Specifically, the complaint alleged that, pursuant to section 15 of the Act, the defendants retained interest and dividends paid on stock, after the funds and the stock had been claimed by the owners. The complaint further alleged that such taking violated both the Illinois and the United States constitutional prohibition against the taking of private property without payment of just compensation.

On November 21, 2000, the defendants filed a motion to dismiss the complaint pursuant to both section 2-615 and section 2-619 of the Code of Civil Procedure (the Code) (735 ILCS 5/2-615, 2-619 (West 2000)).

In their memorandum of law in support of their motion to dismiss pursuant to section 2-615, the defendants contended that the complaint failed to state a cause of action in that the plaintiff failed to meet all the prerequisites for a class action suit, that the retention of dividends or interest on unclaimed property did not violate the plaintiff's constitutional rights and that the plaintiff failed to state a claim under section 1983.

In support of their motion to dismiss pursuant to section 2-619, the defendants contended that the plaintiff failed to establish the existence of an actual justiciable controversy and that the complaint was barred by sovereign immunity, and therefore, the circuit court lacked subject matter jurisdiction.

On May 30, 2001, the circuit court granted the defendants' motion to dismiss. The circuit court ruled that the plaintiff's remedies were under administrative review and the Court of Claims. The plaintiff filed a timely notice of appeal.

At oral argument in this case, the defendants conceded that the plaintiff was not required to exhaust his administrative remedies and was not required to seek relief in the Court of Claims. *fn1 The circuit court did not address the constitutionality of section 15 of the Act. However, on appeal, both parties have addressed the issue. Since the constitutionality of a statute is a question of law which this court considers de novo, we address the issue of the constitutionality of section 15 of the Act.

I. Standard of Review

This court reviews the granting of motions to dismiss pursuant to sections 2-615 and 2-619 de novo. See Nosbaum v. Martini, 312 Ill. App. 3d 108, 726 N.E.2d 84 (2000); Carroll v. Faust, 311 Ill. App. 3d 679, 725 N.E.2d 764 (2000).

The constitutionality of a statute is also reviewed de novo. Arangold Corp. v. Zehnder, No. 93836, slip. op. at 2 (Ill. March 20, 2003). Statutes carry a strong presumption of constitutionality. Arangold Corp., slip op. at 2. The party challenging a statute carries the burden of rebutting that presumption and "'clearly' establishing its constitutionality. [Citation.]" Arangold Corp., slip op. at 2. The court has a duty to uphold the constitutionality of a statute when ever reasonably possible. Arangold Corp., slip op. at 2.

II. Unclaimed Property Act

The Act provides a procedure whereby certain personal property, presumed abandoned, is placed in the custody of the State for its eventual return to its rightful owner. See 765 ILCS 1025/1 et seq. (West 2000)

Under the Act, persons holding property, presumed to be abandoned under the Act, must remit the property to the State, together with certain specified information regarding the owner of the property and the efforts to contact the owner. 765 ILCS 1025/11 (West 2000). After the State receives the report and the property, the State then publishes a notice advising that the property has been turned over to the State, to whom all further claims to the property must be directed. 765 ILCS 1025/12 (West 2000). Upon payment and delivery of the property, the State "shall assume custody and shall be responsible for the safekeeping thereof." 765 ILCS 1025/14 (West 2000).

At issue in the present case is section 15 of the Act, which provides as follows:

"When property is paid or delivered to the State Treasurer under this Act, the owner is not entitled to receive income or other increments accruing thereafter, except that income accruing on unliquidated stock and mutual funds after July 1, 1993, may be paid to the owner. 765 ILCS 1025/15 (West 2000).

In order to obtain the return of property turned over to the State under the Act, an owner submits a claim on a form prescribed by the State Treasurer. 765 ILCS 1065/19 (West 2000). The State Treasurer is required to consider any claim filed but has the discretion whether or not to hold a hearing and receive evidence on the claim. 765 ILCS 1025/20 (West 2000). The final decision by the State Treasurer with respect to a claim "shall be subject to judicial review pursuant to the provisions of the Administrative Review Law and the rules adopted pursuant thereto." 765 ILCS 1025/21 (West 2000).

III. Whether Section 15 of the Act Is Unconstitutional

The parties' positions may be summarized as follows. The defendants contend that section 15 does not take the plaintiff's private property without just compensation because the plaintiff does not have any property rights in the dividends earned on abandoned property while in the State's custody. The defendants rely on the principles of escheat and bona vacantia. The plaintiff responds that ...


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