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Thomas v. Diener

August 04, 2004

APRIL L. THOMAS, PLAINTIFF-APPELLEE,
v.
DANNY DIENER; DANNY DIENER, D/B/A CHESTERVILLE ELEVATOR; AND CHESTERVILLE ELEVATOR, DEFENDANTS-APPELLANTS.



Appeal from Circuit Court of Douglas County. No. 01LM32. Honorable Frank W. Lincoln, Judge Presiding.

The opinion of the court was delivered by: Justice Appleton

PUBLISHED

Defendant, Danny Diener, owner of a business known as Chesterville Elevator, appeals the trial court's judgment ordering the business to pay $87,300 to plaintiff as a penalty for knowingly failing to pay, within seven business days, child support from its employee's wages. He argues the trial court misinterpreted several provisions within the applicable statute (750 ILCS 28/35 (West 2000)). We reverse.

I. BACKGROUND

On September 3, 1999, an order to withhold income for child support was served upon Danny as the employer of Jerry Jean. Jean was obligated to pay $77 each week in child support to plaintiff initially through the Douglas County circuit clerk's office in Tuscola, Illinois, and later, through the State Disbursement Unit (SDU) in Wheaton, Illinois. Pursuant to the order, Danny was responsible for deducting $77 each week from Jean's pay.

In July 2001, plaintiff brought suit against Danny, seeking a penalty for the business's failure to comply with the statute governing an employer's duty to withhold child support (750 ILCS 28/35 (West 2000)). In November 2001, plaintiff filed an amended complaint, seeking a penalty from Danny in the amount of $153,500 for several payments that allegedly were timely withheld, but were mailed 1,535 days late.

At trial, plaintiff called Danny as an adverse witness who testified that his business partner and son, Darrell, was responsible for the business's payroll and payables. According to Danny, Darrell typically wrote checks on Fridays, including paychecks. Employees' wages were paid one week in arrears. Jean worked for Danny from September 1999 through the latter part of April 2001 as a truck driver.

Danny was unable to answer specific questions posed by plaintiff's counsel as to when certain child support checks were written and mailed because Darrell was the person in charge of those tasks, and Danny had no personal knowledge thereof. He knew that it was the business's regular and common practice to withhold Jean's wages every week and send two checks together every two weeks to the appropriate child support agency.

Danny testified that in February 2001, before plaintiff's suit was filed, he received a letter from plaintiff's counsel advising him of a $100-per-day penalty that could be imposed upon him if he did not withhold and forward the appropriate child support amount within seven business days from the date Jean was paid. For the remainder of the time that Jean was employed, from February 2001 through the end of April 2001, he believed Darrell continued his practice of forwarding two checks every two weeks.

In October 2001, after perusing, checking, and matching payroll checks with child support checks, Danny realized that a child support check was not written or mailed from the pay period ending January 28, 2000. He attempted to deliver a check for $77 to plaintiff's counsel's office on October 12, 2001. He testified that Jean only worked one day that week, which may have caused confusion when writing the checks. However, Darrell had cut Jean a check on January 28, 2000, even though he did not work. The failure to issue the child support check was an oversight. Plaintiff called no other witnesses.

Darrell testified for the defense. He drives a truck and does the dispatching, payroll, and billing for the business. This was the first time he had ever been required to withhold child support payments from an employee's wages. He paid the employees one week in arrears every Saturday morning. On occasion, he would write checks on Fridays, but it was commonly understood among employees that Saturday morning was payday.

After first receiving the order, Darrell mailed the child support checks every Saturday to the Douglas County courthouse as directed. He then received notification that the checks should be sent to Wheaton, Illinois, to SDU. The notification included the rules. Darrell read the notification, which indicated that the checks should be mailed within seven business days of when the employee was paid. He called "them" and advised that he would be sending two checks every other week. Darrell explained his procedure as follows:

"A. He'd [(Jean)] work a week, and the following week, on a Saturday morning when the check was due to him, we would write him a check and would also make out the check for child support, and the first check would stay until the next--the following Saturday, and I'd mail both checks in. That is when we were going to Wheaton."

Darrell placed the checks in the mailbox in front of the business every other Saturday morning, and the mail carrier picked them up from there. That was how all of the outgoing mail from the business was normally handled. The mail was typically delivered around 10:30 a.m.

The record includes all of the original cancelled checks made payable to the Douglas County circuit clerk or to SDU for child support and to Jean for work performed. Several discrepancies in terms of dates and check numbers are evident when comparing the two sets of checks. On the stand, Darrell attempted to explain those discrepancies.

On a few occasions, he inexplicably cut the child support check on Friday and Jean's paycheck on Saturday. On a few other occasions (April 14, 2000, for example), Jean did not work a week and was not issued a paycheck, but Darrell cut a child support check regardless. Darrell stated: "I know that the child support was due, and we made a check whether he earned it or not. We took care of child support."

Darrell said plaintiff's counsel contacted him (the record does not indicate when) about a support check missing from November 24, 2000. Darrell reviewed his records and found the cancelled check that counsel claimed was missing. It had been endorsed by Jean's current wife. Darrell issued another check, dated it November 24, 2000, and mailed it to SDU. The date on the replacement check indicates that it was posted on or about December 15, 2000.

Not recalling exactly when, but after he had been sending checks to Wheaton, Darrell testified that a group of three checks were returned from SDU with a notice that the checks contained insufficient information. SDU wanted Jean's Social Security number and address referenced on the checks. Darrell added the requested information and mailed the checks back. The notice from SDU does not appear in the record.

On cross-examination, Darrell acknowledged that the checks began going to SDU in November 1999, one month after he received the order to withhold. Plaintiff's counsel questioned him on the "missing" November 24, 2000, check. SDU records (admitted as plaintiff's exhibit) indicated that on November 22, 2000, it received two checks and then none again until December 16, 2000. Because at the time Darrell did not realize the November 24, 2000, check was missing, he waited until he had two checks to mail before sending them. He said, "I wasn't sure. I messed up, I guess, I thought I mailed it last week, but I didn't." He continued, "[n]o, I didn't mail one check. I mailed two checks but I probably fell a week behind."

One of plaintiff's exhibits was an undated notice from SDU, which indicated that two support checks were being returned (one dated December 1, 2000, and the "missing" check dated November 24, 2000) because they were "made payable to an unacceptable payee." Darrell acknowledged receiving the notice. He said he had always made the checks out the same way, and it was not until the time of the above-referenced notice that SDU returned the checks to him for the stated reason. He changed the payee on the checks and mailed them back to SDU.

He again testified that every other Saturday, he put two checks in one envelope and put the envelope in the business's mailbox for the mail carrier to pick up.

On redirect, Darrell testified that the daily mail carrier picks up the business's mail from the mailbox. On re-cross-examination, Darrell testified that his mother balanced the checking account for the business. The checks are loose, not in a bound checkbook, and kept at his mother's house. His mother sends a week's supply of checks to the business with Darrell's father, Danny. The checks have duplicates, and after they are written, Darrell sends the duplicates back with Danny for Darrell's mother.

Upon examination by the trial court, Darrell stated that since the checks are loose, it was possible that they were not kept or written in consecutive order. He testified that he placed the checks in the mailbox in front of the business between 8 and 9:30 a.m. on Saturday mornings.

After the completion of the evidence, the trial court took the case under advisement and asked counsel to submit written closing arguments. On August 12, 2003, the court issued a memorandum opinion with an attached exhibit that the court prepared that listed (1) the check number of each check made payable to Jean, (2) the date of each check to Jean, (3) the date that each check was due to Jean, (3) the check number of each child support check, (4) the date of each support check, (5) the "earlier of date received or date deposited," and (6) a calculation of the number of days after seven business days that the check was delinquent. The court totaled the final column, which revealed that the business was responsible for a delinquency of ...


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