995 F.2d 1393 (7th Cir. 1993), 91-3277, Evans v. City of Chicago

Docket Nº:91-3277.
Citation:995 F.2d 1393
Party Name:Sylvia EVANS, Administrator of the Estate of Andrew Evans, Deceased, and Bertha Balark, Dana Balark, Anne Balark, and Dane Balark, by themselves and for all others similarly situated, Plaintiffs-Appellees, v. CITY OF CHICAGO, a municipal corporation, Defendant-Appellant.
Case Date:June 03, 1993
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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Page 1393

995 F.2d 1393 (7th Cir. 1993)

Sylvia EVANS, Administrator of the Estate of Andrew Evans, Deceased,

and

Bertha Balark, Dana Balark, Anne Balark, and Dane Balark, by

themselves and for all others similarly situated,

Plaintiffs-Appellees,

v.

CITY OF CHICAGO, a municipal corporation, Defendant-Appellant.

No. 91-3277.

United States Court of Appeals, Seventh Circuit

June 3, 1993

Argued Sept. 30, 1992.

Order Granting Rehearing with Suggestion for Rehearing En

Banc; Judgment Opinion Vacated Aug. 19, 1993.

Page 1394

Easterbrook, Circuit Judge, dissented and filed opinion.

John B. Cashion, Edward T. Stein (argued), Chicago, IL for Sylvia Evans.

Edward T. Stein, Clifford Zimmerman, Cecile Singer, Chicago, IL, for Bertha Balark, Dana Balark, Anne Balark and Dane Balark.

Ruth M. Moscovitch, Asst. Corp. Counsel, Lawrence Rosenthal, Deputy Corp. Counsel, Kelly R. Welsh, Asst. Corp. Counsel, Brian Trubitt, Benna R. Solomon (argued), Office of Corporation Counsel, Appeals Div., Chicago, IL, for City of Chicago.

Before CUDAHY and EASTERBROOK, Circuit Judges, and LEE, District Judge. 1

WILLIAM C. LEE, District Judge.

This is an appeal from a district court order reinstating and modifying a consent decree.

Procedural Background

This case began on November 4, 1977, when plaintiff Sylvia Evans filed suit under 42 U.S.C. § 1983 against officers of the City of Chicago. In this suit, Evans claimed that the City's practice of paying small tort judgments before large ones regardless of the dates on which the judgments were entered, and the City's practice of delaying payment of large tort judgments, violated the Equal

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Protection and Due Process clauses of the United States Constitution. The City of Chicago was later added as a defendant, and the case was certified as a class action on January 2, 1980. On May 14, 1979, plaintiffs Bertha Balark, Dana Balark, Anne Balark, and Dane Balark filed suit under 42 U.S.C. § 1983 against the City of Chicago and certain of its officers asserting similar violations. The Balark case was certified as a class action on August 15, 1980. On June 18, 1979, plaintiff Curtis Collum also filed suit under 42 U.S.C. § 1983 against the City of Chicago and certain of its officers, asserting similar violations of the United States Constitution. The Collum case was also certified as a class action on August 15, 1980. On January 28, 1981, the district court consolidated these cases. However, the Collum class is not a party to this appeal.

The class certified in Evans consisted of persons holding large judgments against the City who had not been paid within the first two fiscal years after the entry of their judgments. Evans v. City of Chicago, 689 F.2d 1286, 1290 n. 6 (7th Cir.1982) ("Evans I "). The class certified in Balark consisted of persons holding large unpaid judgments against the City, which judgments were less than two years old. Id. at 1291 n. 7.

On January 28, 1981, the district court entered partial summary judgment in favor of the Evans and Balark plaintiff classes and against the defendant City of Chicago, and certified its order for immediate appeal under Rule 54(b) of the Federal Rules of Civil Procedure. The district court's order (1) directed the City to pay all members of the Evans class immediately; (2) declared that Ill.Rev.Stat. ch. 85 para. 9-104(b) (1981), violated the Due Process clause of the United States Constitution; 2 (3) specified procedural safeguards to be followed before the City could properly pay judgments in installments; (4) ordered small judgments along with judgments over $1000 to be paid in the order in which they were entered; (5) declared that Ill.Rev.Stat. ch. 24, para. 8-1-16 (1981), violated the Equal Protection clause of the United States Constitution; (6) reserved the question of attorney's fees; and (7) certified the order for immediate appeal under Rule 54(b). The City of Chicago filed a timely notice of appeal from the district court's judgment.

This Court affirmed the district court's judgment on September 27, 1982, stating as follows:

The defendants contend that the City's practice of paying tort judgments of $1,000 or less before tort judgments in excess of $1,000 related rationally to the City's attempt to reduce litigation and interest costs by encouraging quick settlements for $1,000 or less without interest in a large amount of nuisance litigation. The explanation does not survive examination for two reasons. First, the City's practice included immediate payment of fully litigated claims which resulted in judgments of $1,000 or less. Second, the practice did not reduce interest costs since interest accumulated on the sum of the unpaid judgments. The priority given smaller judgments did not reduce that total. Nor does the payment of many small judgments before an equal amount due on large judgments allow the City more effectively to manage its yearly appropriations and limit the City's debt. We discern no rational basis for the City's challenged classification.

Page 1396

See Zobel v. Williams, U.S. , [56-57], 102 S.Ct. 2309, 2311, 72 L.Ed.2d 672 (1982). The district court correctly held the practice and Ill.Rev.Stat., ch. 24, § 8-1-16, insofar as the statute incorporates the practice, unconstitutional. (Footnote omitted.)

Evans I, 689 F.2d at 1299-1300.

With respect to the due process challenge to paragraph 9-104(b), this Court ruled that:

Upon review of the relevant statutes and decisions, we agree with the district court that under Illinois law, if the City has not invoked § 9-104(b) before the end of the fiscal year following the year in which the tort judgment became final, the tort judgment holder may legitimately claim entitlement to immediate payment. Thus, at least in that situation, the right to immediate payment of a tort judgment against a municipal corporation becomes a property right under Illinois law.

* * * * * *

The record discloses that the governing body of the City never determined that undue hardship would arise if the entire amount of unpaid judgments were paid out of revenues for the fiscal year following the fiscal year in which the judgments became final. Furthermore, the City never subjected the named plaintiffs or any class member to the installment plan method of payment permitted by Ill.Rev.Stat., ch. 85, § 9-104(b). Nor did the City ever tell the named plaintiffs or any class member that it would implement such a plan. Thus the plaintiffs had no standing to attack the constitutionality of that provision. Blum v. Yaretsky, U.S. , , 102 S.Ct. 2777, 2783, 73 L.Ed.2d 534 (1982); Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 65 S.Ct. 1384, 89 L.Ed. 1725 (1945). Because the district court improperly reached this issue, we vacate paragraph four of the district court's January 28, 1981 order, which declared Ill.Rev.Stat., ch. 85, § 9-104(b) unconstitutional and set forth the minimum procedural safeguards that due process requires before the City may decide to pay a judgment in installments over ten years. In vacating this portion of the court's order, we, of course, express no opinion about the constitutionality of the statute or the appropriateness of the order's procedural safeguards.

Id. at 1297, 1299.

The case returned to the district court for further proceedings. Subsequently, the parties entered into negotiations and on May 30, 1984, Judge Grady approved a consent decree. This decree stated in part:

III.

PURPOSES OF CONSENT DECREE

1. The parties state that they are entering into this Consent Decree for the purpose of avoiding the further expense of protracted litigation over the matters resolved and decided by this Consent Decree. The parties intend this Consent Decree to fully and finally resolve the budgetary and equitable aspects of Plaintiffs' class complaint, reserving only plaintiffs' claims for damages and claims for attorneys' fees. All equitable and legal rights of the plaintiffs are merged into this Consent Decree unless otherwise specified.

5. In consideration of the execution of this Consent Decree, the Defendants, CITY OF CHICAGO, et al., and the Plaintiffs as class representatives, hereby covenant and agree to abide by the Terms of Settlement described in this Consent Decree, thereby fully settling all matters decided therein. The parties, as indicated by the signatures of their counsel below, who are acting with express authority from their respective clients, have determined to finally settle Plaintiffs' claims as described herein by entry of this consent decree subject only to notice to the class and hearing on January 9, 1983 to determine whether the proposed settlement as provided by this Consent Decree should be approved by the court under Rule 23(e) of the Federal Rules of Civil Procedure.

IV.

TERMS OF SETTLEMENT

1. In consideration of the execution of this Consent Decree and the Release herein

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contained, and in consideration of the dismissal of this lawsuit in all respects, with prejudice and without costs and/or attorneys' fees, against Defendants CLARK BURRUS, Defendant DANIEL GRIM and Defendant WILLIAM QUINLAN, individually and as past Comptrollers and Corporation Counsel, respectively, of the City of Chicago, Defendant CITY OF CHICAGO hereby covenants and agrees to do the things and perform the acts described herein, at the time and in the manner set forth in this Decree, all of which shall be subject to the conditions set forth herein.

* * * * * *

3. Plaintiffs understand, upon advice of counsel, and agree that except as otherwise provided herein, this Decree is a final and total settlement of all claims they now have or may have in the future, arising either directly or...

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