Schultz v. Performance Lighting, Inc.Schultz v. Performance Lighting, Inc.
(Note: This syllabus constitutes no part of the opinion of the court but has been prepared by the Reporter of Decisions for the convenience of the reader.)
An employer could not be assessed the $100 per day statutory penalty for failure to withhold child support where the notice it received in 2009 was invalid as irregular on its face for failure to include the obligor father‘s social security number as required by statute—2012 legislation not applicable.
¶ 1 Plaintiff, Jеnnifer Schultz, filed a complaint in the circuit court of Lake County, seeking to recover a $100 per day statutory penalty from defendant, Performance Lighting, Inc., pursuant to section 35 of the Income Withholding for Support Act (the Act) (
¶ 2 BACKGROUND
¶ 3 In 2009, plaintiff filed for a dissolution of her marriage to her now ex-husband. On November 19, 2009, the circuit court entered an order that required the ex-husband to pay child support to plaintiff in the amount of $600 evеry two weeks. The order was prepared by plaintiff‘s attorney and did not include the obligor‘s (the ex-husband‘s) social security number, even though section 20(a)(3) of the Act specifically requires that “every order for support *** [i]nclude the obligor‘s Social Security Number, which the obligor shall disclose to the court.” See
¶ 4 Plaintiff sоught to acquire the court-ordered support by withholding from her ex-husband‘s wages. Plaintiff served a notice to withhold income for support on defendant and filed the notice with the circuit clerk on November 19, 2009. Plaintiff attached the notice she served on defendant, as well as the uniform order for support, to her complaint. The notice, however, did not include the ex-husband‘s social security number or the termination date of defendant‘s income-withholding obligation, even though the Act states that these items are requirеd to be placed in the notice. See
¶ 5 Plaintiff‘s ex-husband continued to work for defendant through May 2010. It is undisputed that defendant did not withhold any sums for support from the ex-husband‘s paycheck and did not forward any amounts to the State Disbursement Unit on plaintiff‘s behalf.
¶ 6 On November 10, 2011, plaintiff filed the instant complaint, alleging that defendant knowingly failed to pay over to the State Disbursement Unit the amounts ordered to be withheld from her ex-husband‘s paycheсks. Plaintiff further alleged that defendant had a statutory duty to withhold and pay over to the State Disbursement Unit the ordered amounts from her ex-husband‘s paychecks within seven days after the pay would have been given to her ex-husband. Plaintiff alleged that under section 35 of the Act, defendant owed a duty to plaintiff to comply with the notice of withholding and that defendant breached this statutory duty, thereby triggering a penalty of $100 for each day defendant failed to pay over to the State Disbursement Unit the ordered amounts.
¶ 7 On January 24, 2012, defendant filed a motion to dismiss plaintiff‘s complaint pursuant to section 2-615 of the Code of Civil Procedure (
¶ 8 In response to the motion to dismiss, plaintiff argued that the omissions in the notice were minor and did not obviate defendant‘s obligation to withhold under section 35(a) of the Act. She further argued that because defendant was adequately informed of the amount to withhold and the obligor‘s name was included in the notice, defendant should have been able to comply with the notice.
¶ 9 The circuit court rejected plaintiff‘s response and instead agreed with defendant‘s arguments. Accоrdingly, it dismissed plaintiff‘s complaint with prejudice. The appellate court affirmed, holding that the omission of the required information, in particular the ex-husband‘s social security number, invalidated the notice of withholding and mandated dismissal of the case. 2013 IL App (2d) 120405, ¶ 26. We allowed plaintiff‘s petition for leave to appeal.
¶ 10 ANALYSIS
¶ 11 The central issue in this case is whether a notice of withholding that is statutorily deficient because it fails to include the required social security number of the obligor can nonetheless be deemed sufficient to impose a duty on an employer to withhold the obligor‘s incomе. Plaintiff argues that including the obligor‘s social security number is not mandatory and only substantial compliance with the statutory elements of a withholding notice is required to make a notice effective and binding. Thus, the issue before us requires that we interpret the provisions of the Act to determine whether plaintiff‘s notice of withholding was sufficient to impose a duty to withhold in this case.
¶ 12 The fundamental rule of statutory construction is to ascertain and give effect to the legislature‘s intent. Michigan Avenue National Bank v. County of Cook, 191 Ill. 2d 493, 503-04 (2000). The best indicator of legislative intent is the statutоry language itself, given its plain and ordinary meaning. Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469, 479 (1994). We consider the statute in its entirety, keeping in mind the subject it addresses and the apparent intent of the legislature in enacting it. People v. Perry, 224 Ill. 2d 312, 323 (2007). Moreover, to the extent there is any ambiguity, penal statutes and statutes that create “new liabilities” should be strictly construed in favor of persons sought to be subjected to their operation and will not be extended beyond their terms. See, e.g., Nowak v. City of Country Club Hills, 2011 IL 111838, ¶¶ 19, 27 (statute creating a new liability strictly construed in favor of entity that would have been subjected to the liаbility); Croissant v. Joliet Park District, 141 Ill. 2d 449, 455 (1990) (penal statute to be construed strictly). Similarly, statutes in derogation of the common law are to be strictly construed in favor of persons sought to be subjected to their operation. Nowak, 2011 IL 111838, ¶ 19. The proper construction to be placed on a statute is a question of law that we review de novo. Id. ¶ 11.
¶ 14 The statute requires the “obligee,” the plaintiff in this case, to serve the income withholding notice on the payor and the obligor.
“The income withholding notice shall:
(1) be in the standard format prescribed by the federal Department of Health and Human Services; and
(2) direct any payor to withhold the dollar amount required for current support under the order for support; and
* * *
(9) include the Social Security number of the obligor; and
(10) include the date that withholding for current support terminates, which shall be the date of termination of the current support obligation set forth in the order for support; and
(11) contain the signature of the obligee *** except that the failure to contain the signature of the obligee *** shall not affect the validity of the income withholding notice; and
(12) direct any payor to pay over amounts withheld for payment of support to the State Disbursement Unit.”
750 ILCS 28/20(c) (West 2010).
¶ 15 The above-quoted statute unequivocally requires that the obligor‘s social security number be included in the notice of withholding. Notably, the obligee‘s signature is the only one of the 12 requirements mentioned in the statute that is expressly excepted from affecting the validity of the notice of withholding. It is undisputed that plaintiff, as the оbligee sending the notice, failed to include her ex-husband‘s social security number in her notice. We agree with the appellate court that the omission of the social security number is dispositive and that it rendered the notice invalid.
¶ 16 The use of the word “shall” generally indicates that the legislature intended to impose a mandatory obligation. People v. Boeckmann, 238 Ill. 2d 1, 15-16 (2010); Holly v. Montes, 231 Ill. 2d 153, 160 (2008). Moreover, a statute is considered mandatory, as opposed to merely directory, if it indicates a legislative intent to dictate a particular consequence for failure to comply with the provision. In re M.I., 2013 IL 113776, ¶ 16.
¶ 17 Here, we find that the legislature intended a particular consequence for failing to comply with the requirements of section 20(c) of the Act other than the signature requirement. That
¶ 18 Accordingly, application of the rule supports the notion that “shall” is to be given a mandatory interpretation in this case so that the information in each of the other 11 subsections is absolutely required to be present in the notice and any absence of the information required by the other 11 subsections must affect the validity of the notice of withholding. In sum, there can be a lack of compliance with the signature requirement, but there must be strict compliance with all the other subsections. From our reading of the statute, there is no contrary legislative intent which would overcome this rule of construction in this case.
¶ 19 Plaintiff attempts to explain away the special mention in section 20(c)(11) of the omission of the signature as not affecting the validity of the notice, by claiming this exception was placed there to distinguish it from other statutory situations where a signature would be required, such as the provision stating that the initial pleading in a dissolution of marriage action be verified (see
¶ 20 Plaintiff‘s interpretation of the statute is wrong for the additional reason that it would lead to an absurd result. This court has repeatedly held that statutes should be construed in a way that avoids absurd or unjust results. Township of Jubilee v. State of Illinois, 2011 IL 111447, ¶ 36; Roselle Police Pension Board v. Village of Roselle, 232 Ill. 2d 546, 558-59 (2009); Harris v. Manor Healthcare Corp., 111 Ill. 2d 350, 362-63 (1986). Under plaintiff‘s interpretation, a payor would face a catch-22 situation of having to choose between honoring an irregular notice to avoid penalties under section 35(a) of the Act or dishonoring an irregular notice so as to keep itself in line with the immunity from civil liability affоrded under section 35(c) of the Act. Section 35(c) provides that “[a] payor who complies with an income withholding notice that is regular on its face shall not be subject to civil liability with respect to any individual, any agency, or any creditor of the obligor for conduct in compliance with the notice.” (Emphasis added.)
¶ 21 Plaintiff makes no argument that leaving the social security number of the obligor out of the notice of withholding can nonetheless result in the notice being considered “regular on its face.” But we find that any such argument would be rejected. A social security number
¶ 22 There is also an additional reason why a notice lacking the obligor‘s social security number cannot be considered “regular on its face,” and it has to do with the interplay between the Illinois statute and federal law. Even though the Illinois Income Withholding for Support Act does not define the term “regular on its face,” our Act must be read in conjunction with the federal Child Support Enforcement Act (the federal Act) (
¶ 23 Sectiоn 666(b)(6)(A)(i), (ii) of the federal Act provides that the duty of the employer to withhold is triggered only upon being given notice of withholding in the “standard format prescribed by the Secretary,” which is deemed “necessary for the employer to comply with the withholding order.”
¶ 24 We thus recognize the absurdity, as well as the incongruence, of plaintiff‘s position of requiring defendant‘s compliance with thе withholding notice in the absence of full compliance by plaintiff with the requirements for a valid notice. As noted, plaintiff‘s position would place employers in the difficult position of deciding whether to subject themselves to the possibility of civil liability for payment pursuant to an irregular withholding notice or
¶ 25 Citing In re Marriage of Gulla, 382 Ill. App. 3d 498 (2008), aff‘d, 234 Ill. 2d 414 (2009), plaintiff argues that any confusion that the employer had about the notice should have been resolved by defendant contacting the attorney who served the notice. She maintains that as long as the employer is served with a notice informing it of where to send the support and how to contact the attorney serving the noticе, the law demands compliance with the notice. We find that Gulla does not support plaintiff‘s position.
¶ 26 In Gulla, there was no claim that the notice did not include the obligor‘s social security number or that it omitted any of the other mandatory information required by section 20(c) of the Act. In that case, the obligor, under an order of support that required him to pay $3,000 per month, worked for the defendant-employer in the State of Mississippi. A withholding notice was issued in Illinois and sent to the employer in Mississippi. The notice stated that the defendant should withhold $3,000 per month from the оbligor‘s pay. The notice also specifically explained that if the amount to be withheld exceeded the amount allowed by the law of its state, the employer should withhold only the amount allowed by its state. Gulla, 382 Ill. App. 3d at 503. Despite this clear notice, the employer argued that it did not knowingly violate the duty to withhold under the Illinois Act because the amount of the support payment listed was more than the obligor made in a month and Mississippi law prohibited the employer from paying more than 50% of the obligor‘s net income. Gulla, 382 Ill. App. 3d at 501.
¶ 27 The appellate court in Gulla rejected the employer‘s argument. It held that “[b]ased on the clarity of the notice and [the employer‘s] failure to adhere to its terms, [the employer] cannot rebut the presumption in the [Act] that it knowingly failed to pay over the amounts that it was obligated to.” Gulla, 382 Ill. App. 3d at 503. Gulla basically held that the employer should have paid, as the notice clearly explained, the amount that was allowed by Mississippi state law, which was 50% of the obligor‘s actual net income. No issue with respect to the validity of the notice was raised in Gulla. Rather, the notice was conceded to be valid.
¶ 28 This court affirmed the appellate court‘s decision in Gulla. But in doing so, it was not asked to address whether the employer‘s violation of the Act was “knowing.” Instead, this court was called upon to address the issue of which state‘s law should apply—Illinois or Mississippi—to govern the penalty for the employer‘s knowing failure to withhold and pay over the required amount of support. Gulla, 234 Ill. 2d at 425. This court noted that the Illinois statute provided for a $100 per day penalty for each violation of the Act. Id. The plaintiff in that case was seeking a judgment of $369,000 based on the Illinois statute. In contrast, the Mississiрpi statute capped the payor‘s liability at $500 for willfully failing to withhold, or $1,000 where the failure to comply is the result of collusion between the employer and employee. Id. This court found that the conflict between the states’ laws did not invalidate the notice and that the penalty must be calculated in accord with the payor‘s
¶ 29 We acknowledge that at the time the notice in this case was served in November 2009, the Act was silent as to how an invalid notice such as the one in the present case was to be handled. It is indeed a troubling aspect of this case that defendant received the notice and seemingly ignored it without picking up the phone to inform the obligee‘s attorney that the notice was not regular on its face and was therefore invalid. However, the statute at the time did not require the employer to contaсt the obligee‘s attorney to inform the obligee that its notice was invalid, and we will not read such a requirement into the statute. See Shields v. Judges’ Retirement System of Illinois, 204 Ill. 2d 488, 497 (2003) (it is the dominion of the legislature to enact laws and the courts to construe them, and we can neither restrict nor enlarge the meaning of an unambiguous statute).
¶ 30 We also note that it is equally troubling that the obligee‘s attorney did not follow up when it soon became clear that the obligee was not receiving payment. Instead it appears that the obligee‘s attorney waited silеntly for nearly two years before filing the instant complaint, alleging the failure to withhold and pay over to the State Disbursement Unit and seeking stiff statutory penalties.
¶ 31 We conclude that irrespective of the parties’ failure to communicate, the statute is unambiguous in providing that the lack of the obligee‘s social security number rendered the notice invalid and that the employer, at the time of the relevant events in this case, was not burdened with any statutory duty to contact the obligee of the notice‘s invalidity. We nоte that recent amendments to the statute seem to address the problem at issue here. We further note, however, that it is well settled that an amendment of an unambiguous statute creates a presumption that the amendment has worked a change in the law, while the amendment of an ambiguous statute creates no such presumption and might instead indicate that the legislature intended a clarification of the law. Metropolitan Life Insurance Co. v. Hamer, 2013 IL 114234, ¶ 25; State of Illinois v. Mikusch, 138 Ill. 2d 242, 252 (1990).
¶ 32 The recent amendments to the Act, effective August 17, 2012, now place the duty on the recipient оf support to timely contact the employer for an explanation as to why support is not being withheld.
¶ 34 CONCLUSION
¶ 35 For the reasons set forth above, we hold that plaintiff‘s failure to comply with the mandatory requirement of section 20(c)(9) of the Act, requiring inclusion of the obligor‘s social security number, rendered the notice invalid. Plaintiff consequently could not maintain her action seeking the penalties allowed by the Act in the absence of a conforming withholding notice. Moreover, the statute in effect at the time relevant here did not place any burden on defendant to respond to the invalid notice.
¶ 36 We therefore affirm the judgment of the appellate court.
¶ 37 Affirmed.