Appeal from the Circuit Court of Cook County. Nos. 00 CH 419, 99 CH 17918, 99 CH 15713, 99 CH 12637, 00 CH 12763, 00 CH 12720, 98 CH 8721, 97 CH 12802 & 99 CH 7566. Honorable Richard Siebel, Judge Presiding.
The opinion of the court was delivered by: Presiding Justice Campbell
In these nine consolidated cases, defendants appeal from orders of the circuit court of Cook County dismissing their counterclaims and affirmative defenses in foreclosure actions brought by the plaintiff creditors. The defendants alleged that the creditors violated the Illinois Interest Act by imposing fees in excess of 3% on loans with an interest rate in excess of 8%. 815 ILCS 205/4.1a(f) (West 2000). The creditors filed motions to dismiss pursuant to sections 2-- 615 and 2--619 of the Illinois Code of Civil Procedure. 735 ILCS 5/2--615, 2-- 619 (West 2000). On May 16, 2001, the trial court issued a memorandum opinion holding that the defendants' counterclaims and affirmative defenses under the Interest Act were preempted by the federal Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) and, in certain cases, the federal Alternative Mortgage Transaction Parity Act of 1982 (Parity Act). 12 U.S.C. §1735 et seq. (2000); 12 U.S.C. §3801 et seq. (2000). Three defendants also seek to appeal an February 2, 2001, order denying their motions to file class countercomplaints alleging violations of the Interest Act and various other consumer protection statutes.
Initially, this court addresses the standards of review. The debtors appeal dismissals entered pursuant to sections 2--615 and 2--619 of the Code. A section 2--615 motion admits all well-pleaded facts and attacks the legal sufficiency of the complaint; a section 2--619 motion admits the legal sufficiency of the complaint, but raises defects, defenses or other affirmative matter that defeat the action. Joseph v. Chicago Transit Authority, 306 Ill. App. 3d 927, 930, 715 N.E.2d 733, 736 (1999). The preemption of Illinois law by a federal statute is generally considered "affirmative matter" properly raised under section 2--619, not section 2--615. Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469, 487, 639 N.E.2d 1282, 1290-91 (1994). However, as the trial court noted in its opinion, where the affirmative matter is apparent on the face of the pleading, a motion to dismiss may fall within an area of confluence between section 2--615 and section 2-619(a)(9). Nickum, 159 Ill. 2d at 486, 639 N.E.2d at 1290. Accordingly, this court will not penalize those creditors that filed motions pursuant to section 2--615. Dismissals under either section are reviewed de novo. R-Five, Inc. v. Shadeco, Inc., 305 Ill. App. 3d 635, 639, 712 N.E.2d 913, 915 (1999).
The supremacy clause of the United States Constitution states that "the Laws of the United States *** shall be the supreme Law of the Land; *** any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. Const., art. VI, cl. 2. Congress' purpose "'is the ultimate touchstone' of pre-emption analysis." Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 120 L.Ed. 2d 407, 422, 112 S.Ct. 2608, 2617 (1992), quoting Malone v. White Motor Corp., 435 U.S. 497, 504, 55 L.Ed. 2d 443, 450, 98 S.Ct. 1185, 1190 (1978). "Congress' intent to preempt State law may be manifested 'by express provision, by implication, or by a conflict between federal and state law.'" Busch v. Graphic Color Corp., 169 Ill. 2d 325, 335, 662 N.E.2d 397 (1996), quoting New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Insurance Co., 514 U.S. 645, 654, 131 L.Ed. 2d 695, 704, 115 S.Ct. 1671, 1676 (1995). The creditors argue that the homeowners' counterclaims and affirmative defenses under the Interest Act were preempted by the DIDMCA and the Alternative Mortgage Transaction Parity Act of 1982 (Parity Act). This court will address each statute in turn.
First, we address whether section 4.1a of the Interest Act is preempted by section 501 of the DIDMCA. Section 4.1a of the Interest Act provides in part as follows: "Where there is a charge in addition to the stated rate of interest payable directly or indirectly by the borrower and imposed directly or indirectly by the lender as a consideration for the loan, or for or in connection with the loan of money, whether paid or payable by the borrower, the seller, or any other person on behalf of the borrower to the lender or to a third party, or for or in connection with the loan of money, other than as hereinabove in this Section provided, whether denominated 'points,' 'service charge,' 'discount,' 'commission,' or otherwise, and without regard to declining balances of principal which would result from any required or optional amortization of the principal of the loan, the rate of interest shall be calculated in the following manner: The percentage of the principal amount of the loan represented by all of such charges shall first be computed, which in the case of a loan with an interest rate in excess of 8% per annum secured by residential real estate, other than loans described in paragraphs (e) and (f) of Section 4, shall not exceed 3% of such principal amount." 815 ILCS 205/4.1a(f) (West 2000). Section 501(a) of the DIDMCA provides in relevant part as follows: "(1) The provisions of the constitution or the laws of any State expressly limiting the rate or amount of interest, discount points, finance charges, or other charges which may be charged, taken, received, or reserved shall not apply to any loan, mortgage, credit sale, or advance which is-- (A) secured by a first lien on residential real property, by a first lien on all stock allocated to a dwelling unit in a residential cooperative housing corporation, or by a first lien on a residential manufactured home ***; (B) made after March 31, 1980; and (C) described in section 527(b) of the National Housing Act ***." 12 U.S.C. §1735f - 7a(a)(1) (2000). In these cases, the parties stipulated that the loans at issue: (1) were made after March 1, 1980; (2) satisfy the terms of section 527(b) of the National Housing Act; and (3) are not purchase-money first liens on defendants' residential real estate. In Fidelity Financial Services, Inc. v. Hicks, 214 Ill. App. 3d 398, 405-06, 574 N.E.2d 15, 20-21 (1991), this court considered this very issue, concluding that the loan at issue was not within the scope of DIDMCA because it was unclear that the trust deed securing the loan was a "first lien" and that the "first lien on residential real property" language in section 501 of the DIDMCA applied only to purchase-money mortgages. In addition, the Hicks court held that when section 4 of the Interest Act, which permits any rate or amount of interest or compensation with respect to loans secured by a mortgage on real estate, was enacted in 1979, the three-point limit found in section 4.1a was not implicitly repealed. Hicks, 214 Ill. App. 3d at 401-04, 574 N.E.2d at 18-19. In so holding, this court declined to follow the alternative analysis found in dicta in Currie v. Diamond Mortgage Corp. of Illinois, 859 F. 2d 1538, 1542 (7th Cir. 1988). Hicks, 214 Ill. App. 3d at 401-02, 574 N.E.2d at 18. The Hicks court noted that Currie held that section 4.1a was preempted by section 501 of the DIDMCA Hicks, 214 Ill. App. 3d at 402, 574 N.E.2d at 18. In these cases, the debtors rely on Hicks to argue that section 4.1a of the Interest Act was not preempted because their loans are not purchase-money mortgages. The creditors argue that the discussion of preemption in Hicks was dicta. The creditors seek to rely on federal case law holding that the Interest Act is preempted by section 501 of the DIDMCA. See Currie, 859 F.2d at 1542; In re Smith, 280 B.R. 436, 443-34 (Bankr. N.D. Ill. 2002). Indeed, the creditors cited several unpublished decisions of the federal district court for the Northern District of Illinois. See Smith v. First Union National Bank, No. 01 C 1719 (N.D. Ill. April 24, 2002); Reed v. World Wide Financial Services, Inc., No. 98 C 4294 (N.D. Ill. November 27, 1998); Gora v. Banc One Financial Services, Inc., No. 95 C 2542 (N.D. Ill. October 17, 1995). The creditors also relied on an opinion letter issued by this state's Attorney General in 1996. 1996 Ill. Atty. Gen. Op. No. 96--37. In addition, the creditors submitted a 1998 interpretive letter issued by the state Office of Banks and Real Estate supporting preemption. The trial court agreed with the creditors on this point and relied on these authorities.*fn1 However, neither the trial court nor this court is required to rely on the authorities cited above. We accord considerable deference to a federal agency's interpretation of a federal statute, provided that its interpretation is reasonable and Congress has not expressed a contrary intent. Weatherman v. Gary-Wheaton Bank of Fox Valley, N.A., 186 Ill. 2d 472, 483, 713 N.E.2d 543, 548 (1999). Uniformity of decision is an important consideration in interpreting federal statutes such that an Illinois court may elect to give "considerable weight" to lower federal court opinions interpreting a federal statute, but those decisions are not controlling on an Illinois court. Sprietsma v. Mercury Marine, 197 Ill. 2d 112, 120, 757 N.E.2d 75, 80 (2001), rev'd on other grounds, 537 U.S. 51, 154 L.Ed. 2d 466, 123 S.Ct. 518 (2002). However, an unpublished federal decision is not precedential in federal courts, let alone Illinois courts. See Illinois State Toll Highway Authority v. Amoco Oil Co., 336 Ill. App. 3d 300, 317, 783 N.E.2d 658, 672 (2003). Similarly, private letter rulings issued by an administrative agency generally have no precedential effect. See Union Electric Co. v. Department of Revenue, 136 Ill. 2d 385, 400, 556 N.E.2d 236, 243 (1990). An opinion of the Attorney General is to be given considerable weight, especially on matters of first impression, but is not binding on the courts. Bonaguro v. County Officers Electoral Board, 158 Ill. 2d 391, 399, 634 N.E.2d 712, 715 (1994).
On the other hand, it is the absolute duty of the circuit court to follow the decisions of the appellate court. If a circuit court genuinely doubts the vitality of a reviewing court decision, the proper manner in which to proceed in a complex or protracted case is to rule in accord with the existing law and to enter a Rule 304(a) (155 Ill. 2d R. 304(a)) finding or certify the question for interlocutory appeal under Rule 308 (155 Ill. 2d R. 308). In re R.C., 195 Ill. 2d 291, 297-298, 745 N.E.2d 1233, 1238 (2001). A trial court cannot simply dismiss a ruling of this court on the ground that it is dicta.(2) Our supreme court has stated as follows:
"Dicta normally comes in two varieties: obiter dicta and judicial dicta. Obiter dicta are comments in a judicial opinion that are unnecessary to the disposition of the case. Black's Law Dictionary 1100 (7th ed. 1999). Judicial dicta are comments in a judicial opinion that are unnecessary to the disposition of the case, but involve an issue briefed and argued by the parties. Black's Law Dictionary 465 (7th ed. 1999). Judicial dicta have the force of a determination by a reviewing court and should receive dispositive weight in an inferior court." People v. Williams, 204 Ill. 2d 191, 206, 788 N.E.2d 1126, 1136 (2003). Thus, to depart from a decision of this court, the trial court would have to conclude not only that the analysis was dicta, but also that it was not judicial dicta. A trial court cannot ignore an analysis of this court that has dispositive weight in favor of other authorities of lesser weight. In Hicks, this court addressed the preemption issue, despite the fact that the plaintiff creditor there had not raised the issue on appeal, because the creditor had briefed and argued the issue in the trial court and this court had reversed the dismissal in all other respects. The creditor argued in the alternative that the preemption issue would remain as an issue of fact on remand. Hicks, 214 Ill. App. 3d at 405, 574 N.E.2d at 20. In granting an appeal of a certified question under Rule 308, this court is required to consider whether the appeal will materially advance the termination of the litigation. 155 Ill. 2d R. 308(a). Moreover, it is well-established that this court should affirm a correct dismissal for any reason appearing in the record. E.g., Nielsen-Massey Vanillas, Inc. v. City of Waukegan, 276 Ill. App. 3d 146, 151, 657 N.E.2d 1201, 1205 (1995). The preemption issue went directly to the applicability of section 4.1a of the Interest Act; avoiding the issue would not have materially advanced the termination of the litigation. Thus, our analysis was necessary to the proper disposition of the case. Accordingly, we conclude that the discussion of preemption in Hicks is judicial dicta that should have received dispositive weight in the circuit court.
The creditors argue in the alternative that Hicks was incorrectly decided. For the reasons that follow, we conclude that we need not reach that question, as circumstances have changed following Hicks.
Section 501(a) of the DIDMCA does not operate without exception. For example, section 501(b)(2) of the DIDMCA provided that if, between April 1, 1980, and April 1, 1983, a state declined to have federal preemptions apply, the state usury laws would become effective. 12 U.S.C. §1735f - 7a(b)*fn2 (2000). The defendants do not claim that Illinois exercised this option. Rather, the defendants claim that section 4.1a of the Interest Act falls within section 501(b)(4) of the DIDMCA, which provides that:
"At any time after [the date of enactment of this Act i.e.,] March 31, 1980, any State may adopt a provision of law placing limitations on discount points or such other charges on any loan, mortgage, credit sale, or advance described in subsection (a)(1) ***." 12 U.S.C. §1735f - 7a(b)(4) (2000). Defendants note that, after Hicks was decided (and after March 31, 1980), the General Assembly passed and the Governor signed Public Act 87-496, which passed an amended version of section 4.1a of the Interest Act. Pub. Act 87-496 (eff. January 1, 1992). Thus, defendants contend that section 4.1a(f) is not preempted. Plaintiffs respond that the amendment to section 4.1a(f) of the Interest Act did not change the limitations on imposing fees in excess of 3% on loans with an interest rate in excess of 8%. Thus, plaintiffs argue that where an amendatory statute is enacted which reenacts some of the provisions of the former statute, such portions of the old statute as are repeated or retained, either literally or substantially, are to be regarded as a continuation of the old statute and not as the enactment of a new statute on the subject or as the repeal of the former statute. Village of Park Forest v. Wojciechowski, 29 Ill. 2d 435, 438, 194 N.E.2d 346, 348 (1963); City of Chicago v. Gordon, 146 Ill. App. 3d 898, 901, 497 N.E.2d 442, 445 (1986). The trial court agreed with plaintiffs on this point. Wojciechowski and Gordon are clearly distinguishable, as neither case involved the situation where, as here, Congress passed an allegedly preemptive statute between the initial enactment and the reenactment of the Illinois statute. The parties have cited no Illinois case addressing the precise situation presented here.
The debtors cite Davis v. City of Chicago, 59 Ill. 2d 439, 322 N.E.2d 29 (1974), as relevant to the issue on appeal here. Davis involved personal injury suits filed by minors against the City of Chicago in which the Department of Public Aid intervened pursuant to section 11--22 of the Public Aid Code (Ill. Rev. Stat. 1967, ch. 23, par. 11-22) to assert against any recovery by the plaintiffs a lien for medical treatment rendered and paid for by the Department. Davis, 59 Ill. 2d at 440-41, 322 N.E.2d at 30.
At the time the minors filed their complaints, section 11 -- 22 of the Public Aid Code provided that:
"The Illinois Department shall have a charge upon all claims, demands and causes of action for injuries to an applicant for or recipient of financial aid under Articles III, IV and V for the total amount of medical assistance provided the recipient from the time of injury ...