MARY TERRY CARMICHAEL, Appellant, v. UNION PACIFIC RAILROAD COMPANY et al. (Professional Transportation, Inc., Appellee; Jesse White, Secretary of State, Intervenor-Appellant).
123853
Supreme Court of Illinois
September 19, 2019
November 25, 2019
2019 IL 123853
JUSTICE BURKE delivered the judgment of the court, with opinion. Chief Justice Karmeier and Justices Thomas, Kilbride, Garman, Theis, and Neville concurred in the judgment and opinion.
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. Judgments vacated. Cause remanded.
Counsel on Appeal
John S. Bishof Jr., of Chicago, for appellant.
Kwame Raoul, Attorney General, of Springfield (Evan Siegel and Bridget Dibattista, Assistant Attorneys General, of Chicago, of counsel), for intervenor-appellant.
Hugh C. Griffin, of Hall Prangle & Schoonveld, LLC, of Chicago, and George H. Brant, of Judge, James, Hoban & Fisher, LLC, of Park
OPINION
¶ 1 The plaintiff in this case was injured in a motor vehicle accident caused by a third party while riding in an employee transport van owned by defendant Professional Transportation, Inc. (PTI). She filed a declaratory judgment action in the circuit court of Cook County seeking a declaration that defendant was legally responsible for her damages due to a statutory violation. Specifically, plaintiff alleged that defendant‘s vehicle insurance policy did not contain the minimum coverage required by
¶ 2 BACKGROUND
¶ 3 In 2010, plaintiff, Mary Terry Carmichael, was an employee of Union Pacific Railroad Company (Union Pacific). Union Pacific contracted with PTI to transport its employees to and between job sites. On November 13, 2010, plaintiff was riding in one of PTI‘s vans in the course of her employment when the van collided with another vehicle, causing plaintiff severe injuries. The driver of the other vehicle, Dwayne Bell, carried an automobile insurance policy with liability coverage of $20,000 per person and $40,000 per accident, the minimum coverage required by Illinois law.
¶ 4 On September 15, 2011, plaintiff filed a complaint in the law division of the circuit court of Cook County against Union Pacific, PTI, and Bell. Plaintiff sought money damages for her injuries based on negligence and violations of the
¶ 5 On October 17, 2012, while her negligence action was pending, plaintiff filed a three-count complaint for declaratory judgment and other relief in the chancery division of the circuit court against PTI, Union Pacific, and ACE American Insurance Company (ACE). In count I, plaintiff alleged that PTI was legally responsible for her damages because it was in violation of
¶ 6 Plaintiff alleged that PTI‘s liability policy did not meet the statutory minimum because its uninsured and underinsured motor vehicle coverage was limited to $20,000 per passenger and $40,000 per occurrence. She sought a judicial declaration that PTI was legally responsible for her damages sustained in the accident in excess of Bell‘s insurance policy limits, up to a maximum of $250,000.1
¶ 7 PTI initially filed an answer and affirmative defenses on April 23, 2013. On October 2, 2013, PTI filed its amended answer, five affirmative defenses, and counterclaim. The first four affirmative defenses alleged that
¶ 8 Second, PTI alleged that the statutes violate the equal protection clauses in the state and federal constitutions (
¶ 9 Third, PTI alleged that the statutes violate the due process clauses in the state and federal constitutions (
¶ 10 Fourth, PTI alleged that the statutes “constitute an undue and unreasonable burden on interstate commerce,” in violation of the commerce clause of the United States Constitution (
¶ 11 PTI‘s fifth affirmative defense alleged that
¶ 12 Along with its amended answer and affirmative defenses, PTI filed a separate counterclaim seeking a declaratory judgment against plaintiff and the State of Illinois, by and through the Illinois Attorney General and the Illinois Secretary of State. The counterclaim restated the identical constitutional arguments alleged in PTI‘s first four affirmative defenses. The constitutional claims were the only legal grounds set forth in the counterclaim. In its prayer for relief, PTI asked that the trial court declare unconstitutional
¶ 13 On December 3, 2013, then-Attorney General Lisa Madigan filed a motion to dismiss the counterclaim pursuant to
¶ 15 In response, PTI argued that deciding the case on nonconstitutional grounds would not completely resolve its counterclaim, for the following reasons:
“This Court‘s declaration that 5/8-101(c) does not provide a civil remedy would not be binding in other civil cases brought by other plaintiffs against PTI under the statute. Moreover, such a finding would not fix PTI‘s rights regarding any criminal prosecution that might be conducted against PTI under the statute. Resolving PTI‘s counterclaim, which seeks a determination that the offending UM/UIM insurance obligation imposed by 5/8-101(c) is unconstitutional, is the only way to finally determine the rights of all of the parties to this case.”
¶ 16 With leave of court, on May 16, 2014, PTI filed its third amended counterclaim naming Illinois Secretary of State Jesse White and plaintiff as the only counterdefendants. On the same day, PTI filed a motion to dismiss count I of plaintiff‘s complaint, arguing that
¶ 17 On January 30, 2015, the trial court entered an order granting the State‘s motion to dismiss the third amended counterclaim with prejudice. In a written decision, the court examined all of PTI‘s constitutional claims and determined that each of the claims lacked merit. The court did not address any procedural irregularities presented by the counterclaim, nor did it address the private right of action or statutory interpretation issues raised by PTI.
¶ 18 On May 12, 2015, PTI filed a renewed motion to dismiss count I of the complaint. On July 24, 2015, the trial court entered an order denying the motion. The court held that the statute did provide for an implied private right of action and, therefore, that count I need not be dismissed on that basis. PTI filed a motion to reconsider or for certification under Illinois Supreme Court Rule 308 (eff. July 1, 2017). The trial court denied the motion to reconsider but granted the motion to certify a question under Illinois Supreme Court Rule 308. However, on January 13, 2016, the appellate court exercised its discretion to deny PTI‘s appeal.
¶ 19 Subsequently, plaintiff filed a motion in the trial court to voluntarily dismiss her complaint. On December 13, 2016, the trial court ordered the case dismissed without prejudice upon plaintiff‘s motion.
¶ 20 After the voluntary dismissal of the case, PTI filed a timely notice of appeal seeking review of the court‘s January 30, 2015, order dismissing its counterclaim. PTI alleged the appellate court had jurisdiction because the December 13, 2016, voluntary dismissal of the case rendered all prior final orders in the case appealable.2 While the appeal was pending, on January 26, 2017, plaintiff refiled her
¶ 21 In the appellate court, PTI reversed its previous position. It argued that there was no need for the appellate court to reach the constitutional issues if the court determined that plaintiff had no private right of action under the statute. PTI conceded that the trial court‘s order denying its motion to dismiss based on the private right of action issue was a nonfinal order. Nevertheless, PTI argued that the appellate court could address the legal basis for its motion as a means of resolving the case on nonconstitutional grounds. See Marconi v. City of Joliet, 2013 IL App (3d) 110865, ¶ 16 (the appellate court has a duty to “avoid the adjudication of constitutional questions when a case can be decided on other grounds“).
¶ 22 On June 26, 2018, the appellate court filed a published opinion affirming the trial court‘s dismissal of the counterclaim, but on different grounds than those relied on by the trial court. 2018 IL App (1st) 170075, ¶¶ 24-25. Addressing the issue of whether a private right of action was implied in the statute, the court held that the criminal and civil penalties for violations of
¶ 23 This court allowed plaintiff‘s petition for leave to appeal (Ill. S. Ct. R. 315(a) (eff. July 1, 2018)) and granted the State‘s motion for leave to intervene. PTI requests cross-relief on the constitutional issues raised in its counterclaim.
¶ 24 ANALYSIS
¶ 25 The order at issue in this appeal is the trial court‘s January 30, 2015, order dismissing PTI‘s third amended counterclaim with prejudice.
Ҥ 2-608. Counterclaims. (a) Any claim by one or more defendants against one or more plaintiffs, or against one or more codefendants, whether in the nature of setoff, recoupment, cross claim or otherwise, and whether in tort or contract, for liquidated or unliquidated damages, or for other relief, may be pleaded as a cross claim in any action, and when so pleaded shall be called a counterclaim.
(b) The counterclaim shall be a part of the answer, and shall be designated as a counterclaim. Service of process on parties already before the court is not necessary.
(c) Every counterclaim shall be pleaded in the same manner and with the same particularity as a complaint, and shall be complete in itself, but allegations set forth in other parts of the answer may be incorporated by specific reference instead of being repeated.
(d) An answer to a counterclaim and pleadings subsequent thereto shall be filed as in the case of a complaint and with like designation and effect.” (Emphasis added.) Id.
¶ 26 This court has defined a counterclaim as “an independent cause of action” “in favor of the defendant against the plaintiff, which the defendant is authorized to litigate in opposition to the plaintiff‘s claim in the same action.” Wilson v. Tromly, 404 Ill. 307, 309-10 (1949). As an independent action, a counterclaim “must stand or fall on its own merits, regardless of the disposition of the complaint.” Health Cost Controls v. Sevilla, 307 Ill. App. 3d 582, 589 (1999); see also
¶ 27 A purported counterclaim that fails to allege an independent, substantive cause of action against the plaintiff and fails to make a specific prayer for relief is not a true counterclaim. See Rayman v. Peoples Savings Corp., 735 F. Supp. 842, 852 (N.D. Ill. 1990) (“The label ‘counterclaim’ has no magic. What is really an ‘answer or defense to a suit does not become an independent piece of litigation because of its label ***.’ ” (quoting Tenneco Inc. v. Saxony Bar & Tube, Inc., 776 F.2d 1375, 1379 (7th Cir. 1985))). For instance, in Kendle v. Village of Downers Grove, 156 Ill. App. 3d 545, 554 (1987), the court held that neither of the defendants’ answers “contained a specific prayer for relief or raised a substantive cause of action against plaintiffs.” Thus, they could not be considered counterclaims. Id. at 553-54.
¶ 28 By contrast, in Soderholm, 127 Ill. App. 3d 871, the court held that a responsive pleading was, in actuality, a counterclaim. The plaintiffs in that case filed a declaratory judgment action seeking a judicial determination that Myrtle B. Soderholm, an incompetent person, had the requisite mental capacity to create a number of trust accounts under which the plaintiffs were the beneficiaries. Id. at 873. In response, LaSalle National Bank, the conservator of Soderholm‘s estate, filed an answer alleging in part that plaintiffs had fraudulently abused a fiduciary relationship they owed to her. Id. In its prayer for relief, the bank asked the court to order plaintiffs to turn over
¶ 29 A counterclaim that requests no affirmative relief and only seeks to defeat the plaintiff‘s claims is really an affirmative defense, not a counterclaim. See Rayman, 735 F. Supp. at 852-53. For this reason, the federal courts routinely hold that counterclaims that essentially duplicate the parties’ affirmative defenses should be dismissed or disregarded by the trial court as repetitious and unnecessary. See Malibu Media, LLC v. Parsons, No. 12-1331 (BAH), 2013 WL 12324463, at *10 (D.D.C. May 31, 2013) (“[I]f the defendant prevails on these [affirmative] defenses, the result she seeks in the counterclaims will be moot. In these circumstances, the redundant counterclaims are simply superfluous ***.“); Malibu Media, LLC v. Doe 1, No. DKC 12-1198, 2012 WL 6681990, at *3 (D. Md. Dec. 21, 2012) (“Courts have typically declined to consider counterclaims for declaratory relief that are duplicative of affirmative defenses.” (collecting cases)); Rayman, 735 F. Supp. at 853 (count of counterclaim that duplicated affirmative defense added nothing to the pleadings already before the court and would be disregarded).
¶ 30 Turning to the language in PTI‘s third amended counterclaim, the first seven paragraphs summarize the declaratory judgment action filed by plaintiff against PTI. Following these summary paragraphs, paragraph eight alleges:
“8. PTI‘s Amended Answer raises affirmative defenses I-IV, directed against 625 ILCS 5/8-101(c) which assert that said statute is unconstitutional, and the claims of unconstitutionality are hereby restated as follows:”
Paragraphs 8(a) through 8(d) then restate the identical constitutional arguments set forth in PTI‘s affirmative defenses. The remaining paragraphs in the counterclaim allege:
“9. JESSE WHITE, ILLINOIS SECRETARY OF STATE, is an appropriate party in this case because he is charged with enforcing the Illinois Vehicle Code, particularly 625 ILCS 5/8-101(c), which is relied upon by MARY TERRY CARMICHAEL, and which PTI alleges is unconstitutional.
10. No other motor carriers in Illinois, other than those who contract to transport employees in the course of their employment in vehicles designed to carry 15 or fewer passengers, are required to carry underinsured motorist insurance coverage in the amount of $250,000 per passenger.
11. There is no reasonable basis for concluding that those motor carriers who transport employees in the course of their employment in motor vehicles designed to carry 15 passengers or less, are more likely to have their vehicles struck by underinsured motorists, or that motor carriers, such as PTI, should be singled out by law and burdened with the unique obligation to secure $250,000 in underinsured motorist coverage, per passenger, to guard against such an eventuality.
12. According to the terms of 625 ILCS 5/8-101(c) and related penal statute, 625 ILCS 5/8-116, PTI, and others similarly situated, could avoid the penal terms of the statute by owning and operating motor vehicles designed to carry 16 or fewer passengers, rather than 15 or fewer passengers, and there is no reasonable basis for making such a distinction in the penal reach of said statute.
13. House Transcript, 2005 Regular Session No. 28, which pertains to the passage of 625 ILCS 5/8-101(c), documents that the underinsured motorist insurance provision at issue was enacted at the behest of railroad labor unions
which sought to burden contract motor carriers who transported their union membership with the unique obligation to carry underinsured motorist insurance coverage in no less an amount than $250,000 per passenger. (See, EXHIBIT C attached hereto). 14. Plaintiff, MARY TERRY CARMICHAEL, is a railroad union member who has brought her declaratory judgment action against PTI, in an attempt to benefit from the special legislation that was enacted at her union‘s behest, allegedly burdening PTI, and others similarly situated, with the obligation to obtain underinsured motorist insurance coverage in an amount no less than $250,000 per passenger.
15. That by virtue of the foregoing, there is a case or controversy existing between PTI, MARY TERRY CARMICHAEL and JESSE WHITE, ILLINOIS SECRETARY OF STATE, and according to the terms and provisions of 735 ILCS 5/2-701, this Court is vested with the power to declare the rights and liabilities of the parties hereto, as regards the constitutionality of 625 ILCS 5/8-101(c).
WHEREFORE, Defendant/Counter-Plaintiff, PROFESSIONAL TRANSPORTATION, INC. prays that 625 ILCS 5/8-101(c) which is cited as the basis for MARY TERRY CARMICHAEL‘S cause of action against PROFESSIONAL TRANSPORTATION, INC., be declared unconstitutional, null and void; that the penal provision in 625 ILCS 5/8-116 be declared unconstitutional as applied to the provisions of 625 ILCS 5/8-101(c) here at issue; that MARY TERRY CARMICHAEL‘S declaratory judgment action be dismissed with prejudice as to PTI; and that PTI be awarded such further relief as seems just and proper.”
¶ 31 It is clear that PTI‘s counterclaim does not state an independent cause of action against plaintiff. Instead, it requests a declaratory judgment on the identical legal grounds PTI already asserted in its affirmative defenses. Furthermore, the counterclaim‘s prayer for relief requests that the trial court declare the statutes forming the basis of plaintiff‘s complaint unconstitutional and dismiss the complaint with prejudice. It is apparent from this language that the only purpose of the counterclaim is to defeat plaintiff‘s claim against PTI based on allegations that the statute is unconstitutional, i.e., that “the claim asserted against defendant is barred by other affirmative matter avoiding the legal effect of or defeating the claim” (
¶ 32 With respect to PTI‘s claims against the Secretary of State, its counterclaim is also not a true counterclaim. PTI asserts that it must expend significant sums to procure the uninsured and underinsured motor vehicle coverage required by
¶ 33 PTI‘s claim against the Secretary of State appears to be a claim for declaratory judgment based on the constitutionality of the statutes at issue in this case. PTI inserted its claim against Secretary White into a counterclaim in the present litigation. This was improper. Rather than bringing in Secretary White as a named party to its purported counterclaim, PTI should have followed the procedure in Illinois Supreme Court Rule 19 (eff. Sept. 1, 2006). Rule 19 requires that a litigant raising a constitutional challenge to a statute “shall serve an appropriate notice thereof on the Attorney General, State‘s Attorney, municipal counsel or agency attorney, as the case may be.” Ill. S. Ct. R. 19(a) (eff. Sept. 1, 2006). The purpose of Rule 19 is to “afford the State, political subdivision, agency or officer, as the case may be, the opportunity, but not the obligation, to intervene in the cause or proceeding for the purpose of defending the law or regulation challenged.” Ill. S. Ct. R. 19(c) (eff. Sept. 1, 2006). Accordingly, at the time it filed its answer and affirmative defenses, PTI should have notified the Illinois Attorney General of its intention to challenge the constitutionality of
¶ 34 Although the deficiencies in the counterclaim are readily apparent, the parties and the lower courts nevertheless treated the counterclaim as though it were a complete, independent cause of action seeking affirmative relief against plaintiff and Secretary White. This was error that led to several procedural irregularities. For one, the appellate court‘s decision was based solely on the legal grounds alleged in PTI‘s motion to dismiss plaintiff‘s complaint. As a result, PTI effectively attained appellate review of its motion to dismiss, even though the trial court‘s July 24, 2015, order denying that motion was neither final nor appealable. See Vasquez Gonzalez v. Union Health Service, Inc., 2018 IL 123025, ¶ 10 (an order denying a motion to dismiss is not a final and appealable order).5 This result illustrates why it is improper to treat PTI‘s purported counterclaim as a true counterclaim. By filing a separate “counterclaim” that duplicated its affirmative defenses, PTI was rewarded with appeal rights to which it was otherwise not entitled.
¶ 35 Another odd aspect to this case is that the appellate court declined to address the legal issues raised in the counterclaim. Instead, at PTI‘s request, the appellate court held that plaintiff‘s complaint “should have been dismissed” on the grounds that there was no private cause of action implied in the statute. 2018 IL App (1st) 170075, ¶ 2.
¶ 36 All of the procedural anomalies in this case stem from PTI‘s improperly filed counterclaim. The purported counterclaim is not an actual counterclaim because it does not state an independent cause of action or request affirmative relief against counterdefendants. The only issues raised in the counterclaim—constitutional challenges to
¶ 37 We express no opinion on the constitutional or private right of action issues raised and argued by the parties. Although this court has supervisory authority to evaluate judgments of the lower courts (
¶ 38 CONCLUSION
¶ 39 For the foregoing reasons, the trial court‘s January 30, 2015, order and the appellate court‘s judgment are hereby vacated. The cause is remanded to the circuit court for further proceedings consistent with this opinion.
¶ 40 Judgments vacated.
¶ 41 Cause remanded.