In re ILLINOIS BELL TELEPHONE LINK-UP II and Late Charge Litigation.
Rehearing Denied July 25, 2013.
Krislov & Associates, Ltd., of Chicago (Clinton A. Krislov and Eli Korer, of counsel), for appellant.
Mayer Brown LLP, of Chicago (John E. Muench and Demetrios G. Metropoulos, of counsel), for appellee.
[373 Ill.Dec. 785] ¶ 1 Class counsel appeals the ruling of the circuit court denying the class's motion for summary judgment and the second amended motion to enforce the settlement agreement. On October 24, 2011, the circuit court granted defendant's motion to terminate the proceedings. The notice of appeal was timely filed on November 23, 2011. Appellant filed a motion to consolidate this appeal with Cahnman v. SBC Illinois, No. 1-11-3350, on June 5, 2012. This court denied the motion to consolidate on June 21, 2012; however, the court agreed to consider the cases as related. Plaintiff then filed a motion to reconsider that decision, which was subsequently denied on July 3, 2012. After oral argument this court permitted supplemental briefing on the issue of whether disgorgement is an appropriate remedy under the facts of this case.
¶ 2 Class counsel argues on appeal: (1) that the circuit court erred in denying class counsel's motion for summary judgment and requested order to refund late fees collected during the period defendant was in breach of the settlement agreement; and (2) the circuit court erred when it ruled that evidence was required to show the improper billing procedures (no postmark on the envelope) induced class members to pay the bills late and thereby incur damages and late fees before granting the motion and awarding damages.
¶ 3 BACKGROUND
¶ 4 This matter has a long procedural history. In 1991, a class action suit was [373 Ill.Dec. 786]
filed against defendant Illinois Bell (now AT & T) in the circuit court of Cook County for damages arising from its assessment of late payment charges on consumer bills which were mailed without a dated postmark (the Morrison Litigation). Generally, bills were payable within 21 days of mailing. The class maintained it could not determine the due date without a postmarked envelope that showed the mailing date as required by law. Allegedly defendant sent bills to customers without postmarks and at times set due dates earlier than 21 days from the time the bill was placed in the mail. As a result, the class alleged that customers were then improperly charged late fees prior to the actual date the charge legally accrued.
¶ 5 The class also filed a complaint with the Illinois Commerce Commission (ICC). Krislov v. AT & T Illinois, No. 06-0421. The circuit court stayed the class action proceedings while the ICC complaint was pending. Prior to trial before the ICC, the class action litigation settled. The circuit court approved the settlement agreement on March 4, 1994, and retained jurisdiction to enforce the agreement.
¶ 6 The settlement agreement recited historical facts and claims, including, that the class claimed AT & T violated the law in assessing late fees. AT & T " denied all liability." The settlement agreement provides that AT & T would place the dated mark on the billing envelope " for so long as the applicable statutes and/or regulations have not been changed, or a waiver granted, to eliminate the requirement of bill dating on customer bills or bill envelopes." The agreement does not address the circumstances necessary for the assessment of a late payment fee. The terms of the settlement agreement required defendant to place a date mark on each bill's envelope indicating the actual date of mailing as long as any applicable regulations or statutes so required. The agreement also provided that the members of the class were enjoined from bringing any future claim based on a lack of dated postmarks on the envelopes. Class counsel was permitted the right to monitor AT & T's implementation of the settlement. The settlement agreement did not provide for damages or other relief resulting from a breach of the agreement by either party. The class elected to settle instead of " pursuing their individual damage claims."
¶ 7 In July 2005, class counsel discovered that defendant changed its bill dating procedures. Specifically, class counsel asserts that beginning in 2002 defendant no longer dated the outside of the envelope with the mailing date. Rather, AT & T printed a string of unidentifiable numbers on the bill itself. These numbers were visible in the envelope's window; however, what the number represented was only understood by defendant. Class counsel asserts that it addressed the matter with a representative of AT & T who contended that this new practice was in conformance with the settlement agreement. Class counsel asserts that this changed dating process was improper resulting in improper assessment of late fees from July 1, 2002 to February 2010.
¶ 8 Class counsel then filed a motion to enforce the 1994 settlement agreement in the circuit court. Class counsel alleged that the printed string of numbers on the bill insert, rather than on the envelope, was a violation of section 735.160 of title 83 of the Illinois the Administrative Code ( [373 Ill.Dec. 787]
83 Ill. Adm.Code 735.160(a)(d), amended at 8 Ill. Reg. 5161 (eff. Apr. 13, 1984)) and a breach of the settlement agreement. Class counsel requested that the settlement agreement be enforced; an accounting for all late charges collected since the change in AT & T's postmark procedure; and other relief, including an award of costs and fees. According to class counsel, AT & T unlawfully collected late fee charges in the amount of $126,068,865 during the relevant period. After limited discovery, on May 9, 2006, the circuit court denied the motion to enforce the settlement agreement. The circuit court found that the ...