Illinois State Toll Highway Authority v. Heritage Standard Bank and Trust Co.

• Decision Date: 16 December 1993
• Docket Number: No. 73660,73660
• Citation: 626 N.E.2d 213,157 Ill.2d 282
• Court: Illinois Supreme Court
• Parties: The ILLINOIS STATE TOLL HIGHWAY AUTHORITY, Appellant, v. HERITAGE STANDARD BANK AND TRUST COMPANY, as Trustee Under Trust Agreement Dated

Page 213

626 N.E.2d 213 157 Ill.2d 282

193 Ill.Dec. 180

The ILLINOIS STATE TOLL HIGHWAY AUTHORITY, Appellant,
v.
HERITAGE STANDARD BANK AND TRUST COMPANY, as Trustee Under
Trust Agreement Dated March 22, 1979, and Known as
Trust No. 6266, et al., Appellees. No. 73660. Supreme Court of Illinois. Dec. 16, 1993.

Page 215

[193 Ill.Dec. 182] Stephen D. Helm, Scott M. Day and David W. Krula, Helm & Day, Naperville (Frank J. Howard, and [157 Ill.2d 283] Malcolm E. Erickson, Downers Grove, of counsel), for appellant.

Righeimer, Martin & Cinquino, P.C. and Sandra L. Hebenstreit, Chicago, and S. Louis Rathje, Rathje, Woodward, Dyer and Burt, Wheaton, for appellees.

Justice McMORROW delivered the opinion of the court:

In this appeal, the condemnor in a quick-take eminent domain proceeding requests this court to reinstate the trial court's award of interest on a refund of compensation retained by the owner of the condemned property, in violation of the court's order and a provision of the Eminent Domain Act. Ill.Rev.Stat.1989, ch. 110, par. 7--109.

BACKGROUND

Plaintiff, the Illinois State Toll Highway Authority (Highway Authority), filed an eminent domain action to take a portion of land owned by Heritage Standard Bank and Trust Company (Heritage) for use in building a toll road. The Highway Authority chose to take immediate title to the land under the "quick-take" provision of the Eminent Domain Act (Ill.Rev.Stat.1989, ch. 110, par. 7--103) and as part of that process agreed to pay Heritage preliminary compensation for the land in the amount of $1,164,000. The Highway Authority deposited that amount with the county treasurer, pursuant to the Act (Ill.Rev.Stat.1989, ch. 110, par. 7--105). On August 26, 1987, the trial court entered a quick-take order that caused title to vest immediately in the Highway Authority. The court order also authorized Heritage to withdraw its preliminary compensation from deposit with the county treasurer and provided, in accordance [157 Ill.2d 284] with section 7--106 of the Act, that if the jury's final verdict of just compensation was less than the preliminary amount paid, Heritage would be required to return the difference.

At the trial to determine the value of the land taken, the jury returned a verdict in the amount of $805,000, which represented the amount of just compensation to which Heritage was entitled. Because Heritage previously had received $1,164,000 as preliminary compensation, the jury's verdict of $805,000 resulted in an "overpayment" of $359,000 to Heritage that was subject to refund. On February 10, 1989, the trial court entered judgment on the jury's verdict of just compensation and ordered Heritage to pay the $359,000 excess compensation by April 14, 1989. Heritage failed to comply with this order. Heritage filed a notice of appeal from the jury's verdict of just compensation. While that appeal was pending, the Highway Authority twice moved in the circuit court, pursuant to section 7--109 of the Act, for entry of judgment in its favor on the overdue refund of $359,000.

Section 7--109 provides:

"If the amount withdrawn from deposit by any interested party * * * exceeds the amount finally adjudged to be just compensation (or damages, costs, expenses, and attorney fees) due to such party, the court shall order such party to refund such excess to the clerk of the court, and if refund is not made within a reasonable time fixed by the court,

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[193 Ill.Dec. 183] shall enter judgment for such excess in favor of the plaintiff and against such party." (Emphasis added.) (Ill.Rev.Stat.1989, ch. 110, par. 7--109.)

Heritage objected to the Highway Authority's motions for entry of judgment on the amount of excess compensation, arguing that such relief was premature pending Heritage's appeal from the jury's verdict of what was just compensation for the property. The trial court [157 Ill.2d 285] agreed with Heritage and denied the Highway Authority's motion for judgment on the refund under section 7--109 of the Act. On January 9, 1991, following the completion of Heritage's appeal from the jury's verdict of just compensation, the trial court entered judgment in favor of the Highway Authority for the principal amount of $359,000 and also granted statutory judgment interest at the rate of 9% from April 14, 1989, the date on which the court previously ordered the refund to be made. Ill.Rev.Stat.1989, ch. 110, par. 2--1303.

On February 12, 1991, Heritage deposited the principal amount of $359,000, but not the accrued interest, and appealed from the court's award of interest due on the refund. The appellate court reversed that portion of the trial court's award that allowed interest to accrue beginning on April 14, 1989, and held that interest did not begin to accrue until January 9, 1991, the date that judgment was actually entered on the $359,000 refund amount. (225 Ill.App.3d 567, 167 Ill.Dec. 745, 588 N.E.2d 386.) The appellate court held that the plain terms of section 7--109 of the Eminent Domain Act require a two-step procedure for entry of judgment on the excess preliminary compensation: first, the court must order the party owing the excess compensation to refund it within a reasonable time set in the order; then, if the party owing the refund fails to pay on time, the condemnor is entitled to obtain a judgment on the excess compensation. The appellate court further relied on this court's decision in Department of Transportation v. New Century Engineering & Development Corp. (1983), 97 Ill.2d 343, 73 Ill.Dec. 538, 454 N.E.2d 635, for the proposition that interest did not begin to accrue on the refund of excess preliminary compensation until the trial court entered judgment pursuant to section 7--109. The appellate court accordingly rejected the trial court's attempt to award interest "retroactively" to April 14, 1989, the date on which, by court order and by statute, Heritage [157 Ill.2d 286] was to have returned the excess compensation. The appellate court further held that the Highway Authority had waived its challenge to the propriety of the trial court's denial of the motions for judgment on the unpaid refund during the pendency of the first appeal.

Justice McLaren dissented, arguing that, as a matter of equity, the trial court's order allowing interest to accrue from the April 1989 date should be affirmed because the trial court did that which ought to have been done initially. (225 Ill.App.3d at 573-74, 167 Ill.Dec. 745, 588 N.E.2d 386 (McLaren, J., dissenting).) This court granted the Highway Authority's petition for leave to appeal from the appellate court's decision (134 Ill.2d R. 315).

We reverse the appellate court and affirm in part and vacate in part the trial court's judgment.

ANALYSIS

The ultimate issue in this case is whether a creditor may recover judgment interest on a liquidated obligation that the debtor is under court order to pay, pursuant to statute, and the debtor fails to make timely payment. Both parties to the controversy raise issues in this appeal that neither the trial court nor the appellate court fully addressed but which are necessary for a complete understanding of the disposition of this case. For example, the appellate court majority did not examine the propriety of the trial court's refusal to enter judgment on the two occasions that the Highway Authority moved for judgment; instead, the appellate court invoked the waiver doctrine. In so doing, the appellate court failed to examine the right of a condemnor, in quick-take proceedings, to obtain the timely judgment to which it is entitled, plus statutory interest on the

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[193 Ill.Dec. 184] judgment in the event of a delay in payment. In part I of this opinion we consider the requirements of a section 7--109 judgment and the issues that the appellate court considered waived. In [157 Ill.2d 287] part II of this opinion we examine that provision of the judgment interest statute that allows for the accrual of interest on an "award, report or verdict" before judgment is entered thereon. I

Judgment Under Section 7--109 of the Eminent Domain Act

The Highway Authority argues that the appellate court's decision is both unwarranted under the law of eminent domain and inequitable under the facts of the case. The Highway Authority asserts that "neither section 7--109 nor the New Century decision requires a condemnor to obtain a separate and additional judgment against [the land owner] upon the latter's willful refusal to refund the excess compensation (in contravention of the trial court's order * * *), plus statutory interest." (Emphasis added.)

We reject the Highway Authority's argument that section 7--109 of the Act does not require a condemnor to obtain a judgment on the overdue refund that is separate from and additional to the judgment that is entered on the jury's verdict of just compensation. The terms of section 7--109 are unambiguous and contemplate the entry of judgment only after the party owing the refund of excess preliminary compensation fails to comply with the court's order to pay. Section 7--109 is phrased in mandatory language, directing that the "court shall order " the party who owes the refund of excess preliminary compensation to pay it to the clerk of the court, "and if refund is not made within a reasonable time fixed by the court, shall enter judgment for such excess in favor of the plaintiff and against such party." (Emphasis added.) (Ill.Rev.Stat.1989, ch. 110, par. 7--109.) This provision distinguishes between an order to pay the excess within [157 Ill.2d...