Evans v. City of Chicago

Citation522 F. Supp. 789
Decision Date15 August 1980
Docket NumberNo. 77 C 4119,79 C 1939 and 79 C 2493.,77 C 4119
PartiesSylvia EVANS, etc., Plaintiff, v. CITY OF CHICAGO, et al., Defendants. Bertha BALARK, et al., Plaintiffs, v. CITY OF CHICAGO, et al., Defendants. Curtis COLLUM, etc., Plaintiff, v. CITY OF CHICAGO, et al., Defendants.
CourtUnited States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)

COPYRIGHT MATERIAL OMITTED

Edward T. Stein and Mary Rita Luecke, Singer & Stein, Chicago, Ill., for plaintiffs in 79 C 1939 and 79 C-2493.

Robbins, Coe, Rubinstein & Shafran, Ltd., Sigmund Chavis, Chicago, Ill., for plaintiff in 79 C 2493.

John Bernard Cashion, A Professional Corp., Chicago, Ill., for plaintiff in 77 C 4119.

James Maremont, Asst. Corp. Counsel, Robert Orman, Chicago, Ill., for defendants in 79 C 2493.

William R. Quinlan, Corp. Counsel, Chicago, Ill., for defendants in all cases.

MEMORANDUM OPINION

GRADY, District Judge.

Plaintiffs have brought these § 1983 actions against the City of Chicago challenging the City's practice of delaying the payment of judgments obtained against it.1 Plaintiffs in Evans and Balark are original judgment2 holders — that is, they have not assigned their judgments or obtained them by assignment — whereas plaintiff in Collum is an assignor — that is, he assigned his judgment at a discount. On May 1, 1979, we held that the complaint in the Evans case stated a cause of action under § 1983 and on January 2, 1980, certified a class. Defendants have filed motions to dismiss in Collum and Balark. We will deny those motions and certify separate classes in both cases.

The Collum Case

On January 23, 1976, plaintiff Collum and the City of Chicago and four police officers entered into a Stipulation as to Judgment for $17,500.00 in plaintiff's § 1983 action for an alleged beating by the police. Collum Complaint ¶¶ 6, 7. This court (Austin, J.) thereafter entered a judgment order in accordance with the settlement and on February 6, 1976, the defendants signed a waiver of appeal. Plaintiff alleges that the judgment was then placed on a "waiting list" and that, at the time his judgment was entered, it was the practice and custom of the City to withhold payment of tort judgments3 up to two years. The current waiting period is allegedly four years. Complaint at ¶ 11.

The applicable statute for the payment by the City of tort judgments against it is Chapter 85, §§ 9-102, 9-104, Ill.Rev.Stat. Section 9-102 provides:

A local public entity is empowered and directed to pay any tort judgment or settlement for which it or any employee while acting within the scope of his employment is liable in the manner provided in this Article. A local public entity may make payments to settle or compromise a claim or action which has been or might be filed or instituted against it when the governing body or person vested by law or ordinance with authority to make overall policy decisions for such entity considers it advisable to enter into such a settlement or compromise.

Section 9-104 provides:

(a) If a local public entity does not pay a tort judgment or settlement during the fiscal year in which it becomes final and if, in the opinion of its governing body, the unpaid amount of the tort judgment is not too great to be paid out of revenues for the ensuing fiscal year, the governing body shall pay the balance of the judgment during the ensuing fiscal year.
(b) If the local public entity does not pay the tort judgment or settlement during the fiscal year when it becomes final and its governing body is of the opinion that the unpaid amount of the judgment or settlement is so great that undue hardship will arise if the entire amount is paid out of the revenues for the ensuing fiscal year, the governing body shall pay the judgment or settlement, with interest thereon, in not more than 10 annual installments. Each payment shall be of an equal portion of the principal of the tort judgment or settlement. The governing body, in its discretion, may prepay any one or more installments or any part of an installment.

Plaintiff in Collum alleges that in reliance upon the City's policy and practice of delaying payment of judgments, he assigned his judgment on February 16, 1976, (Complaint, Exhibit B) at a discount of 13 per cent. The judgment was paid to the assignee at the face amount of $17,000.00 plus interest thereon. The City's practice of delaying payment of judgments has allegedly created a "discounting business which in essence preys most heavily upon the poor, the injured and minorities." Complaint, ¶ 19. Presently, assignors are discounting their judgments at a rate of 20 per cent.

Plaintiff's theory of recovery is based upon due process and equal protection arguments. He also seeks certification of a class of assignors under Rule 23, which we will discuss later. In Count I of the twocount complaint, plaintiff alleges that he had a right of entitlement to prompt payment of the judgment and that the City's policy and practice of delay is a deprivation of that interest without due process of law. But for this unconstitutional policy and practice of delay, plaintiff would not have assigned his judgment and suffered the discount amount. The complaint seeks a declaratory judgment that § 9-104 is unconstitutional as applied and on its face in violation of the due process clause and also seeks compensatory damages plus attorneys fees and costs.

In Count II of the Collum complaint, plaintiff alleges that the City pays non-tort judgments (e. g., contract, eminent domain) promptly while it delays payment of tort judgments. It is alleged that this practice violates the equal protection clause.

The Balark Case

In 1977, plaintiffs in Balark brought a § 1983 action against Chicago police officers. The parties settled that case, each of the four plaintiffs receiving $4,250.00. By stipulation, this court (Perry, J.) entered a judgment order in the action on April 10, 1979.

On May 14, 1979, the Balarks filed the § 1983 action presently before us. In Count I of the two-count complaint, plaintiffs allege a "practice, custom and policy of defendants to arbitrarily and capriciously, in violation of plaintiffs' rights to substantive and procedural due process, withhold payment of tort `judgments' for up to four years." Balark Complaint, ¶ 10. Further, plaintiffs claim a "right of entitlement" to prompt payment of their judgment (¶ 13) and allege that the practice, policy and custom of withholding payment of judgments and paying only 6 (if judgment is against City only) or 8 per cent simple interest during this delay is a taking of plaintiffs' property without due process of law. ¶ 16. It is also alleged that the policy of delay has, in effect, created a discount business where judgment holders sell their judgments at upwards of a 20 per cent discount in order to receive present payment. ¶¶ 14, 15.

Whereas the Collum complaint challenges the constitutionality of § 9-104 on its face and as applied, the Balark complaint does not challenge the facial constitutionality of the statute. The due process attack in Balark is that the City's policy and practice of delay simply ignores the statute.

In Count II, plaintiffs allege that tort judgment creditors are placed on a four year "waiting list" whereas "other" judgment creditors (i. e. contract, eminent domain) are paid promptly. ¶¶ 19, 20. Plaintiffs challenge that practice as violating the equal protection clause of the Fourteenth Amendment.

The following relief is requested in Balark: (1) a declaratory judgment that defendants' denial of payment violates the due process and equal protection clauses; (2) an injunction compelling defendants to pay the judgments; (3) certification of a class under Fed.R.Civ.P. 23(a) and (b)(1) and (3); and (4) compensatory damages and attorneys fees and costs.

Preliminary Arguments in Motions to Dismiss Collum and Balark

Defendants raise a variety of arguments in support of their motions to dismiss: (1) lack of standing; (2) waiver of right to prompt payment; (3) abstention; (4) Comptroller Burris is an improper party defendant; and (5) constitutionality of § 9-104 and defendants' payment policies or practices. We will consider the constitutional questions later. The questions of waiver, abstention and propriety of the Comptroller as a defendant are common to the Collum and Balark motions to dismiss, and thus our rulings on these questions will be dispositive of both cases. The standing issue is unique to Collum.

Standing of Plaintiff in Collum. Defendants argue that plaintiff Collum lacks standing to bring this action because he has assigned his judgment and "received satisfaction of his claim." Motion to Dismiss at 2. Since the claim has been satisfied, so the argument goes, plaintiff has no standing to complain of delay in payment of judgment.

The relevant inquiry to determine standing is whether plaintiffs have alleged an actual or threatened injury to themselves that is likely to be redressed by a favorable decision. Simon v. Eastern Ky. Welfare Rights Organization, 426 U.S. 26, 37-39, 96 S.Ct. 1917, 1923-1924, 48 L.Ed.2d 450 (1976); American Medical Ass'n v. Matthews, 429 F.Supp. 1179, 1189 (N.D.Ill.1977). They need not show that that decision will be in their favor. Id. The Collum complaint clearly alleges an actual injury to assignors who, because of the City's policy and practice of delay, discounted their judgments and thereby received less than they would have absent the practice of delay. Defendants' argument that the assignors' claims have been "satisfied" ignores the fact of the substantial discount suffered. We hold, therefore, that plaintiff has standing to bring this action.

Waiver. In further support of its motion to dismiss in Collum and Balark, defendants argue that in the settlement agreements with the City, plaintiffs waived any right to prompt payment of the judgments.4 The focus of this argument is on Paragraph 9 of the Stipulation which Collum signed on ...

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  • United Indep. Flight Officers v. United Air Lines
    • United States
    • U.S. District Court — Northern District of Illinois
    • 6 Octubre 1983
    ...Differences in the amount of damages suffered by members of a class are not a reason to deny class certification. Evans v. City of Chicago, 522 F.Supp. 789, 806 (N.D.Ill.1980), aff'd in part, vacated in part, 689 F.2d 1286 (7th Cir.1982). Plaintiffs raise common issues of law under § 204(b)......
  • Evans v. City of Chicago
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • 28 Mayo 1981
    ...were entered are in the Evans class. 6 Shorter- term original tort judgment holders comprise the Balark class. 7 Evans v. City of Chicago, 522 F.Supp. 789, 808 (N.D.Ill.1980). The classification does not distinguish between judgments stemming from state law tort claims or federal civil righ......
  • Evans v. City of Chicago
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • 25 Agosto 1989
    ...to full or partial payment, in reliance upon defendant's policy and practice of delaying payments of judgments. Evans v. City of Chicago, 522 F.Supp. 789, 807-08 (N.D.Ill.1980).6 The Collum class was not a party to the appeal in Evans I.7 Although the parties did not raise the issue, we hav......
  • Kolar v. Sangamon County of State of Ill.
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • 4 Marzo 1985
    ...should apply in the Section 1983 context. Id., at 264, 98 S.Ct. at 1052. In the only case expressly in point, Evans v. City of Chicago, 522 F.Supp. 789, 792 n. 3 (N.D.Ill.1980), affirmed on other grounds, 689 F.2d 1286 (7th Cir.1982), District Judge Grady held that "the word 'tort' [as util......
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