Madlener v. Finley

• Decision Date: 24 September 1987
• Docket Number: No. 86-1278,86-1278
• Citation: 161 Ill.App.3d 796,515 N.E.2d 697
• Parties: , 113 Ill.Dec. 712 Mary S. MADLENER, et al., Plaintiffs-Appellants, v. Morgan M. FINLEY, Clerk of the Circuit Court, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 697

515 N.E.2d 697

161 Ill.App.3d 796, 113 Ill.Dec. 712

Mary S. MADLENER, et al., Plaintiffs-Appellants, v. Morgan M. FINLEY, Clerk of the Circuit Court, Defendant-Appellee.

No. 86-1278.

Appellate Court of Illinois,

First District, Fourth Division.

Sept. 24, 1987.

Samuel H. Young Professional Corp., Skokie, for plaintiffs-appellants.

Richard M. Daley, State's Atty. of Cook County, Chicago (Joan S. Cherry, Deputy State's Atty., Susan Condon and James McVane, Jr., Asst. State's Attys., of counsel), for defendant-appellee.

Justice LINN delivered the opinion of the court:

Plaintiff Mary S. Madlener brings this appeal seeking reversal of several trial court orders issued in connection with her class action lawsuit. In her lawsuit, Madlener alleges that the defendant, Morgan M. Finley, the Clerk of the Circuit Court of Cook County (the Clerk), breached his fiduciary duty when he failed to deposit litigants' funds in interest bearing accounts. Madlener asserts that she, along with other litigants in Cook County who are "trust account beneficiaries" are deprived of any interest which those accounts could accumulate because of the Clerk's practice of placing those funds in non-interest bearing accounts. Through her class action, Madlener seeks the interest that she and the members of her class could have earned on their funds had the Clerk properly deposited their funds in interest bearing accounts. In addition, Madlener seeks an injunction prohibiting the Clerk from continuing to place litigants' funds in non-interest bearing accounts.

Pursuant to the Clerk's motion, the trial court dismissed Madlener's amended complaint. The trial court found that no breach of fiduciary relationship occurred for the Clerk, in Madlener's particular case, was not specifically ordered by the trial court to deposit her funds in an interest bearing account.

Madlener now appeals contending: (1) that a fiduciary relationship exists between the Clerk and those litigants whose funds he holds; (2) that the Clerk breached the aforesaid fiduciary duty when he placed litigants' funds in non-interest bearing rather than interest bearing accounts; and (3) that Madlener's amended complaint sufficiently alleges the requisites for a class action.

We reverse and remand.

Background

This matter is before the court following the trial court's ruling that Madlener's complaint fails to state a cause of action under Illinois law. Accordingly, we must accept as true all of Madlener's well-pled allegations and must draw all reasonable inferences in her favor. Cook v. Askew (1975), 34 Ill.App.3d 1055, 341 N.E.2d 13.

Madlener's amended complaint reveals that she is the guardian of Scott Madlener, a minor. As guardian, Madlener was named a defendant in an Interpleader Complaint filed by the Kansas City Life Insurance Company (K.C. Life). On January 13, 1982, K.C. Life was ordered by the trial court to deposit monies in an amount representing its admitted liability with the Clerk. The trial court's order did not specifically direct the Clerk to place K.C. Life's monies in an interest bearing account.

Soon thereafter, a settlement was reached between Madlener and the other parties to the lawsuit. The trial court approved an order providing for Madlener to receive her share of the funds "plus any interest accrued thereon." The Clerk objected to the provision calling for interest and was successful in having it stricken from the order. Thereafter, the Clerk paid to Madlener $2,468.65, which the Clerk had held on Madlener's behalf for 149 days. Madlener demanded that interest be paid on the sum, but the Clerk refused her demands.

In her complaint, Madlener alleges that the Clerk's normal practice is to deposit litigants' funds in interest bearing accounts only where a trial court order specifies such. According to Madlener, if a trial court does not specifically order the Clerk to place funds in an interest bearing account, the Clerk's practice is to merely deposit the funds in a non-interest bearing account. Madlener further alleges that the Clerk has several million dollars in non-interest bearing accounts and that there are many financial institutions which would readily pay interest on such a sum. In addition, Madlener alleges that as a fiduciary, the Clerk has a duty to act as a reasonably prudent person and that such a person would necessarily place litigants' funds in interest bearing accounts.

The Clerk moved to dismiss Madlener's complaint contending that the Clerk has a duty to place litigants' funds in interest bearing accounts only where the trial court has so ordered. Following the trial court's dismissal, Madlener filed this appeal.

Opinion

As set forth above, Madlener raises three arguments on appeal: (1) that the Clerk is a fiduciary with regard to those funds deposited with the Clerk pursuant to a court order; (2) that the Clerk breaches its fiduciary duty when it fails to place those funds in an interest bearing account; and (3) that this is an appropriate circumstance for the utilization of the class action device.

I.

We first address Madlener's claim that the Clerk is a fiduciary with respect to the funds deposited with him pursuant to court order.

There is no dispute that the Clerk is an elected public official. As a public official, the Clerk is held in public trust and owes a fiduciary duty to the people he represents. (People v. Savaiano (1976) 66 Ill.2d 7, 15, 3 Ill.Dec. 836, 359 N.E.2d 475; City of Chicago ex rel. Cohen v. Keane (1976), 64 Ill.2d 559, 565, 2 Ill.Dec. 285, 357 N.E.2d 452.) The fiduciary responsibilities of a public official are the same as those owed by a private individual. (Keane (1976), 64 Ill.2d 559, 565, 2 Ill.Dec. 285, 357 N.E.2d 452.) Fiduciaries, in general, owe a duty of good faith toward those who repose confidence in them and must act in the best interests of those whose trust the fiduciary receives. Neagle v. McMullen (1929), 334 Ill. 168, 165 N.E. 605; Petrillo v. Syntex Laboratories, Inc. (1986), 148 Ill.App.3d 581, 102 Ill.Dec. 172, 499 N.E.2d 952.

In the case at bar, Madlener claims that she is one of the persons whom the Clerk represents as a public official; that the Clerk has a fiduciary duty to protect Madlener's best interests; and that in so doing, the Clerk should, as a matter of course, place her funds (as well as those of all other litigants) in interest bearing, rather than non-interest bearing accounts.

The Clerk responds, however, that he has no authority to place litigants' funds in interest bearing accounts absent a court order to that effect. The Clerk contends that in handling litigants' funds, the Clerk is merely acting in a ministerial fashion. The Clerk points out that where a court order specifically authorizes the Clerk to deposit the funds in an interest bearing account, such is done; likewise, where the court order is silent regarding placing the funds in an interest bearing account, the Clerk reads such an omission as meaning that the funds should be placed in a non-interest bearing account. With that being the case, the Clerk contends that no wrong has been committed for the Clerk has been, in fact, merely following a court's order in depositing the funds in non-interest bearing accounts.

The Clerk further argues that it is not possible for the Clerk to deposit litigants' funds in the type of account Madlener is requesting. The Clerk posits that thousands of litigants have deposited millions of dollars with the Clerk and that to satisfy court orders and make payouts on short notice, the Clerk needs a special type of demand account. Some funds, according to the Clerk, are left in the account for days, while others are deposited for years. Furthermore, the funds held by each litigant vary from $100.00 to over $100,000.00. If interest had to be calculated on each of these accounts, the Clerk asserts that insurmountable administrative problems would surface. Thus, it is the Clerk's contention that the non-interest bearing demand account presently being used is the only viable method of dealing with the vast array of litigants' funds.

We must agree with Madlener's position. Clearly, the Clerk, as a fiduciary, has a duty to protect and foster the interests of those individuals who have placed their trust and confidence in him as a public official. Madlener, and every other litigant on whose behalf the Clerk retains funds, should have the right to rest assured that the Clerk is fostering their best interests. The Clerk, therefore, should place litigants' funds in that account which benefits litigants to the greatest degree possible. Accepting Madlener's allegations as being true, as we must in reviewing a motion to dismiss, the Clerk should place litigants' funds in an interest bearing account.

Furthermore, the arguments raised by the Clerk do not explain, legally at least, why litigants' funds could not be deposited in an interest bearing account as easily as they are currently being deposited in a non-interest bearing account. In fact, the Clerk is unable to explain why it is possible for him to successfully deposit the funds of some litigants in interest bearing accounts (e.g. where the court order specifies), while at the same time, it is not possible to follow the same procedure with all litigants' funds. If a court orders litigants to deposit funds with the Clerk, the Clerk is in no way restricted from depositing those funds in interest bearing accounts, providing, of course, that such accounts exist.

This case, however, is before us on a motion to dismiss. The discovery that has taken place does not address whether financial institutions exist which could accommodate the Clerk's needs (regarding the need for prompt withdrawal) and at the same time, provide interest on litigants' funds. Madlener claims that there are many banks which will gladly provide such a service while the Clerk contends differently. This is a factual matter and based on the...