A conflict between a home rule ordinance and a state statute does not render the ordinance invalid or beyond constitutional home rule authority, and if the legislature wishes to preempt a home rule power, it must do so specifically—city ordinance on production of condominium records upheld.
Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Sophia H. Hall, Judge, presiding.
Mark D. Roth, of Orum & Roth, LLC, of Chicago, for appellants.
Gary H. Palm, of Chicago, appellee pro se.
Mara S. Georges, Corporation Counsel, of Chicago (Benna Ruth Solomon, Myriam Zreczny Kasper and Christopher S. Norborg, of counsel), for intervenor-appellee.
Justices Garman, Karmeier, and Theis concurred in the judgment and opinion.
KILBRIDE, CHIEF JUSTICE
¶ 1 The primary issue in this appeal is whether a City of Chicago ordinance allowing condominium unit owners to inspect condominium association financial books and records is a valid exercise of the City's home rule power. We affirm the appellate court's holding that the City's ordinance is valid and enforceable. We also affirm the appellate court's decision that the trial court did not err in awarding the plaintiff interim attorney fees.
¶ 2 I. BACKGROUND
¶ 3 Plaintiff Gary Palm owns a unit in the 2800 Lake Shore Drive condominium building in Chicago. He served on the board of directors of the condominium association from 1992 to 1998.
¶ 4 On September 15, 1999, Palm sent a letter to the president of the Association board of directors asking for production of specific documents and records related to the building's management. Palm explained that he needed the documents to investigate the board's actions, including whether: (1) the board awarded contracts improperly; (2) the board used improper investment and banking practices; (3) the board held unlawful private meetings; (4) board president Kay Grossman used Association funds without proper approval; (5) the 1998 board election was compromised by "irregularities or improprieties"; and (6) legal action should have been pursued against the builder.
¶ 5 When his request was denied, Palm filed a complaint seeking to examine, inspect, and copy the documents. The Association moved to dismiss the complaint, and the circuit court of Cook County dismissed it without prejudice.
¶ 6 Palm then filed a four-count first amended complaint. In count IV, the only claim at issue in this appeal, Palm challenged the denial of his request for production of documents. Palm sought an order compelling production of the documents under various laws, including a provision of the City's condominium ordinance. The ordinance allows condominium unit owners to inspect a condominium association's financial books and records within three business days of delivering a written request to examine the records. Chicago Municipal Code § 13-72-080 (2009).
¶ 7 The Association moved to dismiss the complaint under section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 2000)). On December 11, 2000, the trial court granted the motion to dismiss all four counts of the complaint, ruling that section 107.75 of the General Not For Profit Corporation Act of 1986 (805 ILCS 105/107.75 (West 2000)) preempted the City's ordinance and Palm was not entitled to the requested documents under that statute. The trial court allowed Palm 14 days to file a second amended complaint.
¶ 8 On December 19, 2000, Palm filed a motion to reconsider the dismissal of his first amended complaint. The City petitioned to intervene to defend the validity of its ordinance and submitted a brief in support of Palm's motion to reconsider. The trial court allowed the City to intervene.
¶ 9 The trial court entered an order on April 3, 2001, stating it had reconsidered the previous dismissal order. The trial court dismissed with prejudice counts I, II, and III of the first amended complaint. Count IV was dismissed without prejudice and Palm was given until April 17, 2001, to file a second amended complaint. The trial court denied the City's request for a finding under Supreme Court Rule 304(a) (Ill. S.Ct. R. 304(a) (eff. Feb. 1, 1994)) that there was no just reason to delay an appeal.
¶ 10 On April 17, 2001, Palm filed a motion to reconsider the order entered on April 3, 2001. A new trial judge was assigned due to the retirement of the original judge. The trial court granted Palm's motion in part, vacating the dismissal of count IV based on its finding that the City's ordinance was a valid exercise of its home rule authority and the ordinance was not preempted by a state statute. The Association's motion to dismiss was, therefore, denied.
¶ 11 The trial court later granted in part Palm's motion for summary judgment on count IV of his complaint. The Association was ordered to produce the requested documents as required by the City's ordinance.
¶ 12 Palm petitioned for an award of interim attorney fees, alleging that as the prevailing party he was entitled to fees under the ordinance. Palm submitted that $300 per hour was reasonable and appropriate. He acknowledged that he paid his attorney in accordance with a fee agreement at a rate of $200 per hour, but claimed it was a reduced rate. He asserted that when attorney fees are recoverable under a statute, it is typical for a fee agreement to provide for a reduced hourly rate with reasonable attorney fees determined upon completion of the case.
¶ 13 Palm's petition further alleged that the fee award would be retained by his attorney. According to the petition, Palm would receive no part of the award other than reimbursement of his actual payments to his attorney. Palm submitted an affidavit of retired Cook County Circuit Court Judge Kenneth L. Gillis, asserting that the rate of $300 per hour was "well within the prevailing market rates charged in comparable cases by Chicago attorneys of similar qualifications, skill and experience."
¶ 14 On August 26, 2008, the trial court granted Palm's interim fee petition under the ordinance. Palm was awarded attorney fees at the rate of $300 per hour. The trial court certified for immediate appeal under Supreme Court Rule 304(a) the order granting Palm partial summary judgment on count IV of his complaint and the award of interim attorney fees.
¶ 15 The appellate court held that the Chicago ordinance authorizing inspection of the Association's records was a valid exercise of the City's home rule power and the trial court did not abuse its discretion in entering the award for interim attorney fees. Accordingly, the appellate court affirmed the trial court's judgment. 401 Ill.App.3d 868.
¶ 16 We allowed the defendants' petition for leave to appeal. Ill. S.Ct. R. 315 (eff. Feb. 26, 2010).
¶ 17 II. ANALYSIS
¶ 18 A. Jurisdiction
¶ 19 First, we identified a potential jurisdictional issue in our initial review of the briefs in this case. The briefs describe a complicated procedural background suggesting that the trial court may have entered a final judgment on April 3, 2001. The briefs indicate that the April 3, 2001, order denied the motion to reconsider the dismissal of the first amended complaint. According to the briefs, that order was followed by a second motion to reconsider filed more than 30 days later on May 8, 2001.
¶ 20 The jurisdictional concerns were raised by this court during oral argument, and we subsequently entered an order allowing the parties to file supplemental briefs addressing whether the circuit court lost jurisdiction before entering the orders subject to this appeal. The parties filed supplemental briefs clarifying that the April 3, 2001, order dismissed count IV without prejudice and with leave to refile. The parties assert that the order was not a final judgment subject to appeal and the trial court never entered a final order dismissing count IV of the first amended complaint. The parties, therefore, agree that the trial court did not lose jurisdiction before entering the orders subject to appeal in this case.
¶ 21 The jurisdictional concerns that arose in our initial review of this case centered on whether the April 3, 2001, order constituted a final judgment. A civil ruling is final if it terminates the litigation and fixes the parties' rights leaving only enforcement of the judgment. In re Detention of Hardin, 238 Ill.2d 33, 42-43 (2010). A review of the record confirms that the April 3, 2001, order dismissed count IV of the first amended complaint without prejudice and with leave to refile. An order dismissing a complaint with leave to amend is not a final judgment. See Smith v. Central Illinois Regional Airport, 207 Ill.2d 578, 585-87 (2003). The order did not terminate the litigation or fix the parties' rights. Additionally, the order was subject to reconsideration by the trial court at any time prior to entry of a final judgment. See Towns v. Yellow Cab Co., 73 Ill.2d 113, 119-21 (1978). Thus, after reviewing the record, we agree with the parties that the trial court did not lose jurisdiction before entering the orders subject to this appeal.
¶ 22 B. Validity of Ordinance
¶ 23 The central issue in this appeal is whether the Chicago ordinance allowing condominium unit owners access to association financial books and records is a valid exercise of the City's home rule power. The defendants contend that the ordinance conflicts with and renders unenforceable within the City of Chicago portions of the Condominium Property Act (765 ILCS 605/1 et seq. (West 2000)) and the General Not For Profit Corporation Act of 1986. Those statutes require condominium unit owners to state a proper purpose for obtaining association financial books and records, require production of only 10 years of records, and allow an association 30 days to gather and produce the records. Under the Chicago ordinance, a unit owner is not required to state a proper purpose for requesting the records, there is no restriction on the age of the documents, and the documents must be produced within three business days of the request. The defendants contend that the ordinance exceeds the City's home rule authority because it conflicts with the statutory provisions and renders them unenforceable. The defendants, therefore, maintain that the appellate court's judgment upholding the ordinance should be reversed.
¶ 24 Palm and the City contend that the General Assembly may limit home rule authority to regulate in a given field by expressly reserving that power for itself or prohibiting home rule units from exercising that power. They contend that in rare cases involving interference with a vital state interest, this court has intervened to compensate for legislative inaction or oversight and preempted the exercise of home rule authority. This court has intervened, however, only in cases involving environmental regulations based on specific language in the Illinois Constitution establishing the state's supremacy in that field. The legislature has not specifically limited the authority of home rule units to regulate condominiums or reserved that power for itself, and the state does not have a vital interest in regulating condominiums necessary to justify preemption of the City's ordinance. Accordingly, Palm and the City contend that the appellate court's judgment should be affirmed.
¶ 25 Palm also asserts that in response to his September 15, 1999, letter requesting production of documents, the Association's attorney provided a copy of a monthly income-expense report with a letter claiming to comply with the ordinance. Palm contends that the letter claiming to comply with the City's ordinance constitutes a waiver of any challenge to the validity of the ordinance. Palm does not cite any authority in support of his claim.
¶ 26 Waiver is the "intentional relinquishment or abandonment of a known right." (Internal quotation marks omitted.) People v. Phipps, 238 Ill.2d 54, 62 (2010) (quoting People v. Blair, 215 Ill.2d 427, 444 n.2 (2005), quoting United States v. Olano, 507 U.S. 725, 733 (1993)). In contrast, forfeiture applies when an issue is not raised in a timely manner. Waiver is, therefore, distinct from forfeiture. People v. Houston, 229 Ill.2d 1, 9 n.3 (2008).
¶ 27 Palm has not established that the defendants intentionally relinquished or abandoned their claim that the ordinance exceeds the City's home rule power. The letter from the Association's attorney purports to comply with the ordinance but does not make any statement relinquishing or abandoning any challenge to the ordinance. The letter does not even mention or recognize the availability of a potential claim under the home rule provisions of the Illinois Constitution. Accordingly, we conclude that the defendants did not waive their claim in this case.
¶ 28 The appeal in this case is from the trial court's entry of partial summary judgment ordering production of the requested documents under the City's ordinance. Summary judgment is appropriate when "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." 735 ILCS 5/2-1005(c) (West 2008). We review de novo an order granting summary judgment. Millennium Park Joint Venture, LLC v. Houlihan, 241 Ill.2d 281, 309 (2010).
¶ 29 Home rule is based on the assumption that municipalities should be allowed to address problems with solutions tailored to their local needs. Schillerstrom Homes, Inc. v. City of Naperville, 198 Ill.2d 281, 286 (2001). The home rule provisions of the 1970 Illinois Constitution were designed to alter drastically the relationship between our local and state governments. City of Chicago v. Roman, 184 Ill.2d 504, 512 (1998). Article VII, section 6(a), of the Illinois Constitution provides:
"Except as limited by this Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs including, but not limited to, the power to regulate for the protection of the public health, safety, morals and welfare; to license; to tax; and to incur debt." Ill. Const. 1970, art. VII, § 6(a).
¶ 30 Section 6(a) was written with the intention to give home rule units the broadest powers possible. Scadron v. City of Des Plaines, 153 Ill.2d 164, 174 (1992). The Illinois Constitution further provides that the "[p]owers and functions of home rule units shall be construed liberally." Ill. Const. 1970, art. VII, § 6(m).
¶ 31 The General Assembly may, however, preempt the exercise of a municipality's home rule powers by expressly limiting that authority. Schillerstrom Homes, 198 Ill.2d at 287; Scadron, 153 Ill.2d at 185-86. Under article VII, section 6(h), the General Assembly "may provide specifically by law for the exclusive exercise by the State of any power or function of a home rule unit." Ill. Const. 1970, art. VII, § 6(h). If the legislature intends to limit or deny the exercise of home rule powers, the statute must contain an express statement to that effect. City of Evanston v. Create, Inc., 85 Ill.2d 101, 108 (1981) (citing Stryker v. Village of Oak Park, 62 Ill.2d 523, 528 (1976)). If the legislature does not expressly limit or deny home rule authority, a municipal ordinance and a state statute may operate concurrently as provided in article VII, section 6(i):
"Home rule units may exercise and perform concurrently with the State any power or function of a home rule unit to the extent that the General Assembly by law does not specifically limit the concurrent exercise or specifically declare the State's exercise to be exclusive." Ill. Const. 1970, art. VII, § 6(i).
¶ 32 Thus, the Illinois Constitution provides home rule units with the same powers as the sovereign, except when those powers are limited by the General Assembly. Roman, 184 Ill.2d at 513 (citing Triple A Services, Inc. v. Rice, 131 Ill.2d 217, 230 (1989)). Under section 6(i), home rule units may continue to regulate activities even if the state has also regulated those activities. Schillerstrom Homes, 198 Ill.2d at 287-88. To restrict the concurrent exercise of home rule power, the General Assembly must enact a law specifically stating home rule authority is limited. Scadron, 153 Ill.2d at 185-86. The General Assembly has codified that principle in section 7 of the Statute on Statutes (5 ILCS 70/7 (West 2010)), providing:
"No law enacted after January 12, 1977, denies or limits any power or function of a home rule unit, pursuant to paragraphs (g), (h), (i), (j), or (k) of section 6 of Article VII of the Illinois Constitution, unless there is specific language limiting or denying the power or function and the language specifically sets forth in what manner and to what extent it is a limitation on or denial of the power or function of a home rule unit."
Section 7 has been formally adopted as part of this court's home rule jurisprudence. Schillerstrom Homes, 198 Ill.2d at 287.
¶ 33 Additionally, the legislature has enacted the Home Rule Note Act, providing "[e]very bill that denies or limits any power or function of a home rule unit shall have prepared for it before second reading in the house of introduction a brief explanatory note that includes a reliable estimate of the probable impact of the bill on the powers and functions of home rule units." 25 ILCS 75/5 (West 2010). Accordingly, the legislature has recognized its principal role in determining whether to preempt or limit home rule power and its responsibility to use specific language when preempting or limiting that power.
¶ 34 We have consistently recognized that the home rule provisions of the Illinois Constitution are intended to " 'eliminate or at least reduce to a bare minimum the circumstances under which local home rule powers are preempted by judicial interpretation of unexpressed legislative intention.' " Scadron, 153 Ill.2d at 186 (quoting David C. Baum, A Tentative Survey of Illinois Home Rule (Part II): Legislative Control, Transition Problems, and Intergovernmental Conflict, 1972 U. Ill. L.F. 559, 571); see also Schillerstrom Homes, 198 Ill.2d at 288; Roman, 184 Ill.2d at 516. "The Illinois approach places almost exclusive reliance on the legislature rather than the courts to keep home rule units in line." (Internal quotation marks omitted.) Roman, 184 Ill.2d at 517 (quoting Scadron, 153 Ill.2d at 187-88). " '[I]f the constitutional design is to be respected, the courts should step in to compensate for legislative inaction or oversight only in the clearest cases of oppression, injustice, or interference by local ordinances with vital state policies.' " (Emphasis in original.) Scadron, 153 Ill.2d at 190 (quoting David C. Baum, A Tentative Survey of Illinois Home Rule (Part I): Powers and Limitations, 1972 U. Ill. L.F. 137, 157).
¶ 35 Prior to our recent decision in City of Chicago v. StubHub, Inc., 2011 IL 111127, this court had used a three-part test to review the constitutionality of the exercise of home rule power. Schillerstrom Homes, 198 Ill.2d at 289-90. Under that test, we first determined whether the disputed exercise of local government power pertains to local government and affairs as required under section 6(a). If so, we determined whether the General Assembly preempted the exercise of home rule powers in the area. If not, we determined the "the proper relationship" between the local legislation and the state statute. Schillerstrom Homes, 198 Ill.2d at 289-90.
¶ 36 The "vital state policy" analysis was treated as the third part of that test, to be considered after determining whether the local ordinance pertains to the home rule unit's government and affairs under section 6(a) and whether the legislature expressly preempted the exercise of home rule authority. Roman, 184 Ill.2d at 512-19; Scadron, 153 Ill.2d at 174-90. In StubHub, however, this court recognized that "the concept of a vital state policy trumping municipal power is analytically appropriate under section 6(a)" rather than section 6(i). City of Chicago v. StubHub, Inc., 2011 IL 111127, ¶ 22 n.2. Accordingly, "[i]f a subject pertains to local government and affairs, and the legislature has not expressly preempted home rule, municipalities may exercise their power." StubHub, Inc., 2011 IL 111127, ¶ 22 n.2. In those circumstances, the "proper relationship" between the local legislation and the state statute is established by section 6(i), providing that home rule units "may exercise and perform concurrently with the State any power or function of a home rule unit to the extent that the General Assembly by law does not specifically limit the concurrent exercise or specifically declare the State's exercise to be exclusive." Ill. Const. 1970, art. VII, § 6(i).
¶ 37 The defendants' brief specifically states no argument is raised on whether the City's ordinance pertains to local affairs or whether the legislature has expressly preempted home rule authority. In fact, in their reply brief the defendants criticize the City for addressing those parts of the home rule analysis because "those factors are not even at issue in this appeal." The defendants assert that "the only issue on appeal related to the enforceability of the City's ordinance is the third test [, ] whether there is 'a proper relationship between the local ordinance and the state statute.' " The defendants contend that the City's ordinance is invalid because it renders unenforceable within Chicago portions of the Illinois Condominium Property Act and the General Not For Profit Corporation Act of 1986. The City's ordinance states:
"No person shall fail to allow unit owners to inspect the financial books and records of the condominium association within three business days of the time written request for examination of the records is received." Chicago Municipal Code § 3-72-080 (2009).
Section 19 of the Condominium Property Act and section 107.75 of the General Not For Profit Corporation Act of 1986 require condominium unit owners to state a "proper purpose" for inspecting condominium financial books and records. 765 ILCS 605/19(e) (West 2000); 805 ILCS 105/107.75(a) (West 2000). Additionally, section 19 of the Illinois Condominium Property Act requires production of only the current and previous 10 years of financial books and records and allows 30 business days to produce those records. 765 ILCS 605/19(a)(9), (e) (West 2000).
¶ 38 The defendants assert that the City's ordinance directly conflicts with the statutory provisions because: (1) it does not require unit owners to state a proper purpose for inspecting financial books and records; (2) it does not limit production to a certain number of years; and (3) it contains a much shorter time period for producing the records. Relying on Schillerstrom Homes, the defendants argue that the ordinance exceeds the City's home rule power given the direct conflict with the statutory provisions. The defendants contend that in Schillerstrom Homes this court upheld an ordinance only because it did not conflict with a state statute. The defendants, therefore, maintain that an ordinance exceeds home rule power if it conflicts with a state statute.
¶ 39 The defendants further contend that an ordinance may be a valid exercise of home rule power only if it is more restrictive than a state statute addressing the same subject. A more restrictive ordinance leaves the statute intact and enforceable. The defendants contend that the ordinance here is less restrictive than the statutes in granting access to association financial books and records. The ordinance, therefore, is invalid because it eliminates the statutory requirement of stating a "proper purpose" to obtain records, changes the scope of documents subject to production, and alters the time frame for producing those documents.
¶ 40 In Schillerstrom Homes, a real estate development company filed a complaint against the City of Naperville, alleging that the City willfully failed to approve the company's final subdivision plat within the 60-day period required by a state statute. Schillerstrom Homes, 198 Ill.2d at 282-83. The company sought damages under the statutory remedy provision. Schillerstrom Homes, 198 Ill.2d at 283. While the City's ordinance also set forth a 60-day period for plat approval and was "strikingly similar" to the statute, the ordinance was silent on a remedy for a violation of its provisions. Schillerstrom Homes, 198 Ill.2d at 288-89. The dispute centered on whether the ordinance superseded the statutory remedy provision. Schillerstrom Homes, 198 Ill.2d at 283.
¶ 41 In analyzing the issue, we considered whether the ordinance superseded the entire statute, including its remedy provision. See Schillerstrom Homes, 198 Ill.2d at 291-93. We concluded that the ordinance, by remaining silent on the remedy, did not supersede or limit the remedy provision of the statute. Schillerstrom Homes, 198 Ill.2d at 293. The statutory remedy provision simply filled the gap in the ordinance. Schillerstrom Homes, 198 Ill.2d at 293. Importantly, we did not question whether the ordinance could supersede a conflicting state statute. Rather, we clearly accepted the basic principle that an ordinance may supersede or limit a conflicting statute. Schillerstrom Homes, 198 Ill.2d at 291-93. We only held that the ordinance, by remaining silent, did not supersede the portion of the statute providing a remedy.
¶ 42 Contrary to the defendants' argument, the conflict between the City's ordinance and the state statutes here does not render the ordinance invalid or beyond home rule power. " 'The fact that the state has occupied some field of governmental endeavor, or that home rule ordinances are in some way inconsistent with state statutes, is not in itself sufficient to invalidate the local ordinances.' " Scadron, 153 Ill.2d at 194 (quoting David C. Baum, Tentative Survey of Illinois Home Rule (Part II): Legislative Control, Transition Problems, and Intergovernmental Conflict, 1972 U. Ill. L.F. 559, 572). In ...