White v. Sunside Healthcare

No. 2--97--0481
_________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT
_________________________________________________________________

PAUL P. WHITE, as Special Adm r ) Appeal from the Circuit Court
of the Estate of Jeanette V. ) of Lake County.
White, Deceased, )
)
Plaintiff-Appellant, ) No. 96--L--244
)
v. )
)
SUNRISE HEALTHCARE )
CORPORATION, )
)
)
Defendant-Appellee ) Honorable
) Bernard E. Drew,
(Seymon Maslovsky, Defendant). ) Judge, Presiding.
_________________________________________________________________

JUSTICE THOMAS delivered the opinion of the court:

This is a permissive interlocutory appeal (155 Ill. 2d R. 308)
in a suit brought partly under the Nursing Home Care Act (Act)(210
ILCS 45/1--101 et seq. (West 1996)). The question certified for
review is whether an amendment to section 3--602 of the Act (210
ILCS 45/3--602 (West 1996)(Act)) applies to a cause of action that
accrued before the amendment took effect on July 21, 1995.
Formerly, section 3--602 (210 ILCS 45/3--602 (West 1994)) required
a licensee to pay treble damages plus costs and attorney fees to a
facility resident for the violation of the resident s rights under
article II, part 1, of the Act (see 210 ILCS 45/2--101 et seq.
(West 1994)). After the amendment, which took effect upon becoming
law on July 21, 1995 (see Pub. Act 89--197, eff. July 21, 1995
(amending 210 ILCS 45/3--602 (West 1994)), recovery for violations
of the Act is limited to actual damages, costs, and attorney fees.
210 ILCS 45/3--602 (West 1996).
We answer the certified question affirmatively. We hold that
the amended section 3--602, abolishing triple damages for
violations of the Act, applies to a pending suit no matter when the
cause of action accrued. We decline to follow the contrary
holdings of Hernandez v. Woodbridge Nursing Home, 287 Ill. App. 3d
641 (1st Dist. 1997) and Weimann v. Meadow Manor, Inc., 285 Ill.
App. 3d 455 (5th Dist. 1996). Briefly, we conclude that, under
First of America Trust Co. v. Armstead, 171 Ill. 2d 282 (1996), the
application of the amended section 3--602 to this case is not truly
retroactive because plaintiff had acquired no vested right to the
punitive damages the former section 3--602 authorized. Therefore,
the court must apply the current version of the statutory remedy.
The facts pertinent to this appeal are as follows. From
December 12, 1994, through February 20, 1995, Jeanette White
resided in Crown Manor Healthcare, a nursing home owned by
defendant Sunrise Healthcare (Sunrise). She received treatment
from Sunrise s agent, defendant Dr. Seymon Maslovsky. On April 4,
1996, Paul White (plaintiff), as Jeanette White s attorney-in-fact
(see 755 ILCS 45/2--1 (West 1996)), sued on her behalf. As
amended, the complaint alleged that defendants negligent care of
Jeanette White caused her various injuries and that Sunrise
violated the Act, requiring treble damages under section 3--602.
Sunrise moved to strike the prayer for treble damages, arguing
that the amended section 3--602 applied to this suit. Plaintiff
responded that, under authority such as Rivard v. Chicago Fire
Fighters Union, 122 Ill. 2d 303 (1988), amendments to statutes are
presumed to be prospective and not to change the law governing an
accrued cause of action. Sunrise replied that the presumption of
prospectivity applies only to changes in the substantive law; as no
party has a vested right in a particular procedure or remedy,
courts normally give retroactive effect to changes in this type of
statute. See Nelson v. Miller, 11 Ill. 2d 378, 382-83 (1957);
Ogdon v. Gianakos, 415 Ill. 591, 597 (1953).
The trial court granted Sunrise s motion to strike and
certified the question for an interlocutory appeal under Supreme
Court Rule 308. We granted plaintiff s petition for leave to
appeal. After Jeanette White died, plaintiff proceeded as the
special administrator of her estate.
The application of new legislation to pending suits or
preexisting causes of action is governed by our supreme court s
opinion in Armstead. There, the court held that an amendment to
the Gasoline Storage Act (430 ILCS 15/4(b)(1)(A)(West Supp. 1993))
governed the administrative review of the denial of the plaintiff s
request to register its storage tank with the State Fire Marshal.
While the administrative review action was pending in the circuit
court, the legislature amended the statute by expressly prohibiting
registering certain tanks, including those involved in the
plaintiff s case.
The supreme court agreed with the appellate court that the
amendment governed the case but not with the appellate court s
assumptions that (1) the issue was whether to give the amendment
retroactive effect; and (2) resolution of this question depended
on whether the legislature intended such a retroactivity. Noting
that the law in this area was lengthy but inconsistent, the court
divined two competing strands of precedent.
Under one line of cases, whether an amendment applied to an
ongoing case depended on whether the legislature intended the
amendment to have prospective effect; in turn, this determination
of intent often hinged on whether the amendment was substantive or
procedural. Substantive amendments enjoyed a presumption of
prospectivity, but a change in procedures or remedies would be made
retroactive if the legislature so intended. Armstead, 171 Ill. 2d at 287-88, citing Rivard, 122 Ill. 2d at 309-10.
Armstead observed that the legislative intent approach has
been difficult to use because often there is no clear way to decide
whether an amendment is substantive or procedural. Armstead,
171 Ill. 2d at 288-89, citing Orlicki v. McCarthy, 4 Ill. 2d 342,
348 (1954), and Rivard, 122 Ill. 2d at 310. In part because of
this difficulty, the Armstead court endorsed the alternative line
of precedent, which used the vested rights approach. Under this
method, reviewing courts must apply the law as it exists at the
time of the appeal unless doing so would affect a vested right,
i.e., an interest that constitutional due process protects from
legislative interference. Armstead, 171 Ill. 2d at 289. Applying
a new law to an existing controversy is not retroactive unless it
impairs a vested right. Armstead, 171 Ill. 2d at 289-90.
Although the court in Armstead disapproved of the legislative
intent approach because it involves elusive distinctions between
procedure and substance, the court s adoption of the vested
rights approach retained a vital role for the substance-procedure
dichotomy. The court specified that interests or expectations
created by prior law may fall short of being vested rights either
because they are not yet perfected, or because the amendment is
procedural in nature. (Emphasis added.) Armstead, 171 Ill. 2d 290. Thus, even after Armstead, whether an amendment is
substantive or procedural may still dispose of whether it applies
to a preexisting cause of action--not because resolving that issue
will disclose the legislature s intent but because it may determine
whether the amendment actually affects vested rights.
(Parenthetically, we note that, after Armstead, the court
decided People v. DiGirolamo, 179 Ill. 2d 24 (1997). There, the
court refused to apply an amendment to the general venue provision
for criminal cases (see 720 ILCS 5/1--6 (West 1992)) where the
defendant was tried before the statute was amended. Without citing
Armstead, the court relied on the legislative intent approach
Armstead criticized. Also, the court departed from Armstead s
semantic instruction that a statute is not retroactive unless it
impairs vested rights. The DiGirolamo court explained that
[w]here the legislature intends a retroactive application of the
amendment and the statutory amendment relates to changes in
procedures or remedies, and not substantive rights, it applies
retroactively to pending cases. DiGirolamo, 179 Ill. 2d at 50.
The court held specifically that an amendment eliminating venue as
an element of an offense did not apply retroactively because it
effected a change in substantive law (DiGirolamo, 179 Ill. 2d at
50). DiGirolamo did not purport to overrule Armstead in any
respect, and, in view of Armstead s disapproval of the legislative
intent approach, we shall not apply DiGirolamo outside its
distinctive context. In any event, DiGirolamo is consistent with
the result we reach here even if it requires us to depart in some
degree from Armstead.)
The Armstead court recognized that, although vested rights
has no precise definition, a right has not vested until it is so
perfected, complete, and unconditional that it may be equated with
a property interest. Armstead, 171 Ill. 2d at 290-91; see also
Smith v. Hill, 12 Ill. 2d 588, 594 (1958); Martin v. Department of
Professional Regulation, 284 Ill. App. 3d 591, 596 (1996).
Because not all expectations are vested rights, a new law is
not retroactive just because it relates to antecedent events, or
because it draws upon antecedent facts for its operation. United
States Steel Credit Union v. Knight, 32 Ill. 2d 138, 142 (1965).
As Armstead implies, this is especially true of statutes that leave
substantive rights in place and change only the procedures and
remedies used to enforce those rights. Most directly pertinent
here, the case law leaves no doubt that, prior to judgment, a
plaintiff has no vested right to a statutory penalty such as the
punitive damages the former section 3--602 authorized. We see
nothing in Armstead that disturbs these settled principles.
Rather, Armstead reaffirms the body of law from which these
principles are derived.
Our courts have long recognized that there can be no vested
right in any particular remedy or method of procedure (Chicago &
Western Indiana R.R. Co. v. Guthrie, 192 Ill. 579, 581 (1901)) and
no vested right in any statutory remedy (Orlicki v. McCarthy, 4 Ill. 2d 342, 346 (1954)). A change in the law that affects merely
procedures or remedies will ordinarily be applied to existing
rights of action. Maiter v. Chicago Board of Education, 82 Ill. 2d 373, 391 (1980). This is what courts did in Shelton v. City of
Chicago, 42 Ill. 2d 468, 474 (1969)(suits against municipality
under mob violence law); Woods v. Soucy, 166 Ill. 407, 414
(1897)(forcible entry and detainer law); Space v. E.F. Hutton Co.,
188 Ill. App. 3d 57, 62-63 (1989)(securities law); Levy v. McKiel,
185 Ill. App. 3d 240 (1989)(statute regulating hospitals potential
liability to agents and employees); and Clouse v. Heights Finance
Corp., 156 Ill. App. 3d 975, 978 (1987)(consumer lending law).
These opinions refused to find that applying statutory amendments
to accrued causes of action impaired any vested rights. Although
a restriction on available remedies may be impermissibly
retroactive legislation where it is so severe as to work a
deprivation of the underlying substantive right (see Niven v.
Siqueira, 109 Ill. 2d 357, 364-65 (1985); Hogan v. Bleeker, 29 Ill. 2d 181, 187 (1963)), no authority holds that the elimination of a
particular remedy, without more, is a denial of any vested rights.
The claim of a vested right is most clearly untenable where
the remedy eliminated is a statutory penalty that goes beyond what
is necessary to compensate the plaintiff. The rule that no party
has a vested right in a statutory penalty or punishment is ancient
and fundamental. Our courts have consistently viewed any interest
in such a penalty as an expectancy that the legislature may negate
any time before a final judgment creates a property interest in the
award.
In Coles v. County of Madison, 1 Ill. 154 (1826), the county
obtained a verdict against an individual who had imported and freed
several slaves without posting a bond as a statute required. After
the county obtained a verdict, the legislature repealed the
statute. Judgment for the county was entered, but the supreme
court reversed. The court recognized that the commencement of
suit does not of itself *** vest a right in the penalty sued for.
Coles, 1 Ill. at 157. Thus, if no judgment has been rendered, any
property right in the penalty is merely contingent and will be
destroyed by the repeal of the statute that created the penalty.
Coles, 1 Ill. at 157-58, citing Yeaton v. United States, 9 U.S. 281, 3 L. Ed. 101 (1809).
Coles is dated insofar as its specific facts are concerned,
but its reasoning is still valid. In the 170 years between Coles
and Weimann, our courts routinely refused to award plaintiffs
statutory penalties that the legislature saw fit to abolish before
the plaintiffs rights were reduced to judgment. Thus, it has long
been the rule that, where the legislature has changed the penalties
for usury, the plaintiff in a pending suit loses any chance to
recover the penalties in effect when he filed his suit. The reason
is that there is no principle of law better settled than that the
legislature can at any time take away the right of action in a
penalty. The law recognizes no vested right in a penalty.
(Emphasis added.) Parmelee v. Lawrence, 44 Ill. 405, 415 (1867).
Recent cases apply this principle with equal vigor. In Jacobson v.
General Finance Corp., 227 Ill. App. 3d 1089 (1992), this court
refused to allow the plaintiffs to recover penalties the
legislature had abolished while the appeal was pending. We
explained that, because the judgment was not final while the review
was pending, the applicable law was that in effect at the time of
the appeal. Jacobson, 227 Ill. App. 3d at 1100-01. The new
legislation was not retroactive because the plaintiffs had no
vested right to the penalties or, indeed, to the defense of usury,
which was in no way a part of the original contractual obligation.
Jacobson, 227 Ill. App. 3d at 1100; see also Sweeney v. Citicorp
Person-to-Person Financial Center, Inc., 157 Ill. App. 3d 47, 55
(1987)(applying law at time of appeal in usury case to bar recovery
of windfall under repealed part of statute).
Decisions under numerous other statutes follow the rule that,
while a suit is pending, a party has no vested right in a
statutory penalty that no longer exists. In People ex rel. Eitel
v. Lindheimer, 371 Ill. 367 (1939), the supreme court rejected the
taxpayers argument that they had a vested right in a law that
required refunds of excess taxes paid. Because the legislature
repealed this provision, the taxpayers could not collect their
refunds, even though the repeal did not occur until after the suit
was filed. The court relied on a long line of cases establishing
that parties have no vested rights in special statutory remedies.
See Lindheimer, 371 Ill. at 371-75, and cases cited therein.
In Clouse v. Heights Finance Corp., 156 Ill. App. 3d 975
(1987), the court held that the plaintiff, who sued under a statute
regulating consumer installment loans, was not entitled to a
statutory penalty that was repealed after he filed his suit.
Clouse, 156 Ill. App. 3d at 978; see also Winter & Hirsch v.
Passarelli, 122 Ill. App. 2d 372 (1970)(defendant subject to
increased penalties even though suit was brought before amendment
increasing penalties took effect).
Similarly, courts have not hesitated to hold that an existing
suit is governed by new legislation denying a municipality the
right to include certain court costs in a judgment confirming a
special assessment (Gage v. City of Chicago, 195 Ill. 490, 493-94
(1902)) or changing the standard for awarding attorney fees to a
petitioner who enforces an order for child support (Sostak v.
Sostak, 113 Ill. App. 3d 954, 959-60 (1983)).
Our examination of the case law convinces us that the amended
section 3--602 is the sort of legislation that courts routinely
apply to pending suits and that to do so here impairs no vested
rights. The amendment is remedial, not substantive: it deprives no
party of her cause of action under the Nursing Home Care Act, but
merely limits her recovery to her actual damages plus attorney fees
and costs. Applying the new law here treats the plaintiff no worse
than plaintiffs in the vast majority of lawsuits.
The elimination of damages that go beyond what is needed to
make the plaintiff whole does not infringe on a vested right but
merely deprives the plaintiff of an inchoate interest in a
statutory penalty or punishment. It is settled that what the
amendment eliminates is a species of punitive damages. Harris v.
Manor Healthcare Corp., 111 Ill. 2d 350, 361 (1986); Paulson v.
County of De Kalb, 268 Ill. App. 3d 78, 80-81 (1994). As the name
implies, punitive damages are not awarded to compensate the
plaintiff but to punish the offender and deter further wrongdoing.
Kleinwort Benson North America, Inc. v. Quantum Financial Services,
Inc., No. 82444, slip op. at 10 (Ill. February 20, 1998). They
exist for the defendant s pain, not the plaintiff s gain. The
latter is essentially a fortuity. Therefore, it makes little sense
to speak of a party having a vested right in the expected receipt
of an incidental (if substantial) benefit from a law passed
primarily for its effect on other parties.
We recognize that two other districts of the appellate court
have held that the former section 3--602 gave plaintiffs a vested
right in the treble damages it allowed. However, we believe these
opinions misread Armstead and essentially ignore the substantial
body of vested rights precedent on which Armstead draws.
Thus, in Weimann v. Meadow Manor, Inc., 285 Ill. App. 3d 455
(1996), where the suit was filed before the amendment took effect,
the Appellate Court, Fifth District, held that the amended section
3--602 could not be applied retroactively to actions occurring
[sic] prior to July 21, 1995, (Weimann, 285 Ill. App. 3d at 456)
because the alleged wrongs that formed the basis for liability
under the Nursing Home Care Act all occurred before July 21, 1995
(Weimann, 285 Ill. App. 3d at 458). Although the court
acknowledged Armstead s holding that there is generally no
impermissible retroactivity where the amendment is procedural
(Weimann, 285 Ill. App. 3d at 457), the court did not discuss
whether the elimination of punitive damages was a procedural
change. Instead, apparently confusing the right to recover the
statutory penalty with the right to any recovery, the court
reasoned that, because the plaintiff s cause of action accrued
before the amendment took effect, she had acquired a vested right
in the treble damages provided by the preamendment statute.
Weimann, 285 Ill. App. 3d at 458-59.
In Hernandez v. Woodbridge Nursing Home, 287 Ill. App. 3d 641
(1997), the Appellate Court, First District, following Weimann,
also equated the loss of a punitive remedy with the deprivation of
an entire substantive cause of action. The court also explained
that applying the amended section 3--602 to a pending cause of
action would effect a substantive change in the law by altering the
elements the plaintiff needed to prove to recover more than actual
damages. Hernandez, 287 Ill. App. 3d at 641. We believe that this
reasoning begs the question. It acknowledges the centrality of the
substance-procedure distinction, but assumes (with no support) that
the recovery of punitive damages falls on the substance side of
that divide rather than on the procedure side. As we have tried
to show in some detail, the rule has long been otherwise.
Therefore, we adhere to that authority and decline to follow the
reasoning or result in Hernandez or Weimann.
The order of the circuit court of Lake County is affirmed, and
the cause is remanded for further proceedings.
Affirmed and remanded.
GEIGER, P.J., and BOWMAN, J., concur.