Gelb v. AIR CON REFRIGERATION AND HEATING

• Court: Appellate Court of Illinois
• Citation: Gelb v. AIR CON REFRIGERATION AND HEATING, 761 N.E.2d 265, 326 Ill. App.3d 809, 260 Ill.Dec. 421 (Ill. App. 2001)
• Decision Date: 30 November 2001
• Docket Number: No. 1-00-2099.,1-00-2099.
• Parties: Dana GELB, Indiv. and on Behalf of Those Similarly Situated, Plaintiff-Appellant, v. AIR CON REFRIGERATION AND HEATING, INC.; Hill Mechanical Corporation; Chicagoland Sheet Metal Contractors Association; and John Does 1 to 99, Defendants-Appellees.

761 N.E.2d 265

326 Ill. App.3d 809

260 Ill.Dec. 421

Dana GELB, Indiv. and on Behalf of Those Similarly Situated, Plaintiff-Appellant, v. AIR CON REFRIGERATION AND HEATING, INC.; Hill Mechanical Corporation; Chicagoland Sheet Metal Contractors Association; and John Does , Defendants-Appellees.

No. 1-00-2099.

Appellate Court of Illinois, First District, Fifth Division.

November 30, 2001.

Rehearing Denied August 8, 2001.

Joel M. Hellman, Jac A. Cotiguala of Jac A. Cotiguala & Associates, Charles Pressman, Robin B. Potter of Potter & Schaffner, P.C., Chicago, for Plaintiff-Appellant.

David J. Lloyd of Berger, Newmark & Fenchel, P.C., Chicago, for Hill Mechanical.

Frederick V. Lochbihler of Chapman and Cutler, Chicago, for Air Con.

James P. DeNardo of McKenna, Storer, Rowe, White & Farrug, Chicago, for Chicagoland Sheet Metal.

Justice GREIMAN delivered the opinion of the court:

Plaintiff Dana Gelb (Gelb) filed this suit on January 28, 2000, alleging that defendants Air Con Refrigeration & Heating, Inc. (Air Con), Hill Mechanical Corp. (Hill), Chicagoland Sheet Metal Contractors Association (the Association), and John Does 1 to 99 conspired to violate and were violating the Illinois Minimum Wage Law (820 ILCS 105/1 et seq. (West 1998)) by providing lower overtime wages than those prescribed by law. Gelb prayed for a determination that the case proceed as a class action for accounting of lost wages for himself and the class, payment of lost wages for himself and the class, a declaration of the illegality of defendants' unlawful practices, an injunction barring defendants' unlawful practices, statutory penalties, interest, and attorney's fees. However, days later on the 15th of March, 2000, before the plaintiff filed a motion for class certification, defendants Hill and Air Con made a settlement offer to pay plaintiff's individual back wages plus interest, statutory penalties, and attorney fees. Plaintiff rejected the settlement offer because the amount of back wages to be paid was not specified, the attorney fees were not specified, and no offer was made to stop the allegedly illegal practice or provide any class relief.

Hill, Air Con, and the Association then filed a joint motion under sections 2-615 and 2-619(a) of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619(a) (West 1998)) to dismiss the plaintiff's complaint on the basis that Hill and Air Con's tender to the plaintiff removed the case or controversy between the plaintiff and the named defendants, and accordingly, plaintiffs case was moot. The trial court agreed and granted the motion to dismiss plaintiffs complaint and cause of action. Plaintiff has appealed, and for the reasons that follow, we reverse and remand.

Plaintiff is a sheet metal worker who was employed by Hill and Air Con and was paid wages on an hourly basis. In his putative class-action complaint, filed on January 28, 2000, he argued that these defendants and John Does 1 to 99 are entities who had entered into a conspiracy to pay their hourly wage earners a lower rate of overtime pay than required by the Minimum Wage Law. Specifically, he alleged that under the Minimum Wage Law, an employer is required to pay its employees an overtime premium—50% of the workers' regular rate of pay—for each hour over 40 hours that was worked in a week. However, defendants calculated their workers' overtime premiums by intentionally lowering the workers' regular rates of pay by $1.62 for "savings plan amounts" or "organization and education amounts." Consequently, he avers, these reductions in the employees' regular rates of pay also resulted in depriving the workers of $0.81 (50% of $1.62) in overtime premiums for every hour of overtime worked. Plaintiff also claimed that, as a part of the conspiracy, the Association instructed the employer-defendants to make the unlawful reductions in overtime pay.

In his prayer for relief, plaintiff sought an express determination that the case should proceed as a class action. As previously noted, he also requested an accounting of lost wages for himself and the class, payment of lost wages for himself and the class, a declaration of the illegality of defendants' unlawful practices, an injunction barring defendants' unlawful practices, statutory penalties, interest, and attorney fees.

Roughly two weeks after filing his complaint, plaintiff served Hill, Air Con, and the Association with interrogatories and document requests. Those discovery requests were aimed at obtaining the identities of John Does 1 to 99 and other information necessary to file a motion for class certification. That discovery was stayed.

One month later, Hill and Air Con made a settlement offer. Those defendants offered to:

"[P]rovide Mr. Gelb all overtime wages allegedly due or unpaid to him (pursuant to the allegations set forth in his complaint) in accordance with the Illinois Minimum Wage Law. The [d]efendants will award him pre-judgment interest as he claims he is entitled to receive pursuant to 815 ILCS 205/2. The [d]efendants will award the [p]laintiff individual punitive damages as he claims entitlement pursuant to 820 ILCS 105/12. Finally, the [d]efendants will pay Mr. Gelb's reasonable attorney's fees and costs incurred pursuing his claim against them. It is our understanding that Mr. Gelb is not currently employed by either Hill Mechanical Corp. or Air Con Refrigeration & Heating, Inc., at this time."

Defendants' offer further stated:

"This offer is being made for settlement purposes only. It is not an admission of nor a comment upon the merits of any claim Mr. Gelb may have alleged against any [d]efendant in case 00-CH-1511."

In a letter dated March 24, 2000, plaintiff rejected the settlement offer, and his counsel responded as follows:

"Mr. Gelb would be interested in your offer if it were to provide the offered relief to all members of the class. Furthermore, we believe that it is in all parties' interest for any settlement to include a provision ending your client's unlawful practice (and conspiracy) of deducting `savings plan' amounts and `organizing' amounts from employees regular rate in the calculation of overtime pay.

Please let me know whether you wish to continue pursuing the possibility of settlement at the present time. In any event, I remain open to discussing settlement with you at any time during the litigation."

Also on that date, defendants Hill, Air Con, and the Association filed a motion to dismiss pursuant to section 2-619(a). In that motion, defendants admitted that the employer-defendants were, in fact, subtracting $0.81 per hour of overtime worked. However, they argued that the employer-defendants were required to do so until 2002 under a collective bargaining agreement into which they entered with the Sheet Metal Workers International Association Local No. 73 (the union). Because plaintiff was a member of the union, he was subject to the terms of that agreement. They also argued that by virtue of Hill and Air Con's settlement offer, plaintiff had been offered everything that he was individually requesting in his complaint and that there was no justiciable controversy between the parties. Consequently, they claimed that plaintiff's individual claims had been mooted by the settlement tender and that he could no longer maintain any claim for himself or for any class.

On May 19, 2000, the circuit court granted defendants' motion and dismissed plaintiff's complaint.

As we recently noted in In re Marriage of Buck, 318 Ill.App.3d 489, 493, 252 Ill.Dec. 128, 742 N.E.2d 378 (2000), "[a] motion to dismiss admits all well-pleaded facts. Its purpose is to raise an issue of law as to the legal sufficiency of the allegations of the complaint. Ostendorf [v. International Harvester Corp.], 89 Ill.2d [273] at 280 [60 Ill.Dec. 456, 433 N.E.2d 253 (1982)]. The standard of review for a dismissal based on a section 2-619 motion is de novo. Kedzie & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill.2d 112, 116, 189 Ill.Dec. 31, 619 N.E.2d 732 (1993). A motion to dismiss should not be granted unless it clearly appears that no set of facts could ever be proved that would entitle the plaintiff to recover. Ostendorf, 89 Ill.2d at 280, 60 Ill.Dec. 456, 433 N.E.2d 253."

Our main task in this case is to determine whether defendants' tender mooted plaintiff's putative class action. To reiterate, plaintiff's complaint alleged that defendants were paying their workers $0.81 less per hour of overtime work than required by law. In his prayer for relief, plaintiff requested defendants account for an undetermined number of overtime hours worked and overtime wages due during the class period and up to the date of entry of judgment and that they reimburse an undetermined amount of overtime wages due and unpaid during that period as well. The complaint also sought an undetermined amount of prejudgment interest, punitive damages, and attorney fees and costs.

After plaintiff's complaint was filed but before a motion for class certification came before the trial court, Air Con and Hill offered: (1) "all overtime wages allegedly due or unpaid to him"; (2) "pre-judgment interest as he claims he is entitled to receive"; (3) "individual punitive damages [to which] he claims entitlement"; and (4) "reasonable attorney's fees and costs incurred pursuing his claim." In other words, defendants offered a total reimbursement of the entire amounts demanded by plaintiff in his prayer for relief.

Plaintiff's first argument is that he was never offered a full and complete tender of the relief he requested where: (1) defendants did not provide plaintiff with an accounting of his lost wages as requested; (2) defendants did not offer a declaration as requested that the employer-defendants' practice of paying the workers less than their due, as well as the conspiracy to perpetuate this, was unlawful; and (3) defendants' offer did not provide for a consent decree or anything resembling the injunction...