Saltiel v. Olsen

• Decision Date: 26 June 1981
• Docket Number: No. 53137,53137
• Citation: 426 N.E.2d 1204,55 Ill.Dec. 830,85 Ill.2d 484
• Parties: , 55 Ill.Dec. 830 Clarice R. SALTIEL v. Sidney R. OLSEN, Recorder of Deeds and Registrar of Titles, et al. (William J. Scott, Appellant and Cross-Appellee; Harry A. Young, Jr., et al., Appellees and Cross-Appellants).
• Court: Illinois Supreme Court

Page 1204

426 N.E.2d 1204

85 Ill.2d 484, 55 Ill.Dec. 830

Clarice R. SALTIEL v. Sidney R. OLSEN, Recorder of Deeds and Registrar of Titles et al. (William J. Scott, Appellant and Cross-Appellee; Harry A. Young, Jr., et al., Appellees and Cross-Appellants).

No. 53137.

Supreme Court of Illinois.

June 26, 1981.

Tyrone C. Fahner, Atty. Gen., Chicago (Robert G. Epsteen, Sp. Asst. Atty. Gen., of counsel), for intervenor-respondent-appellant-cross-appellee.

Sidney Z. Karasik, Chicago, pro se, for trustee-appellee.

Bilandic, Neistein, Richman, Hauslinger & Young, Ltd., Chicago (Harry A. Young, Jr. and Lee J. Schwartz, Chicago, of counsel), for petitioners-appellees-cross-appellants.

WARD, Justice:

In a prior appeal of this case, reported as Saltiel v. Olsen (1979), 77 Ill.2d 23, 31 Ill.Dec. 820, 394 N.E.2d 1197, we affirmed a judgment of the circuit court of Cook County in favor of the plaintiff, Clarice R. Saltiel, holding that section 3 of the Real Estate Transfer Tax Act (Ill.Rev.Stat. 1977, ch. 120, par. 1003), as it stood prior to its amendment in 1978 (1978 Ill.Laws 985), violated article VII, section 9(a), of the Illinois Constitution. After the filing of our opinion, further proceedings were held in the circuit court in which the court awarded attorney fees to the plaintiff. The Attorney General, who had been permitted to intervene in the post-appeal proceeding, appealed to the appellate court, and we allowed his motion for a direct appeal under Rule 302(b) (73 Ill.2d R. 302(b)).

The proceeding began with the filing of a complaint in the circuit court of Cook County by the plaintiff, an Illinois taxpayer, on her own behalf and on behalf of all other taxpayers, against the defendants, Sidney R. Olsen, as the recorder of deeds and registrar of titles for Cook County, and Edward J. Rosewell, as the Cook County treasurer. The complaint, which was filed February 16, 1978, sought a judgment enjoining the defendants from retaining for the county's use one half of the proceeds received from the sale of revenue stamps, and directing the defendants to pay that portion of the proceeds to the Department of Revenue. The Department of Revenue was not made a party to the case. The defendants were represented by the State's Attorney of Cook County.

On June 20, the circuit court issued a temporary injunction requiring the defendants to pay the tax proceeds retained by the county into a special fund administered by a court-appointed trustee. The sums subject to the injunction continued to accumulate until August 7, when an amendment to section 3 deleted the provision challenged by this suit. On August 24, when the sums in dispute were turned over to the trustee, they amounted to $516,117. Thereafter the trustee invested the fund in interest-bearing obligations, and by October 31, 1980, the fund had grown to $621,212, according to a statement in the trustee's brief which the Attorney General does not challenge.

The circuit court's judgment in favor of the plaintiff was entered October 4, 1978. In it the court retained jurisdiction of the cause to determine what sums, if any, should be awarded from the fund for the fees and expenses of the plaintiff's attorneys and those of the trustee, and to deliver what remained to the Department of Revenue or the State Treasurer. On October 31 the defendants filed a notice of appeal from the judgment, and the appeal was transferred to this court under Rule 302(b). On November 8 the plaintiff's attorneys filed a petition in the circuit court for fees and costs. A like petition was filed by the trustee. The defendants moved that disposition of these petitions be deferred pending the outcome of the appeal. The defendants also filed objections to the allowance of attorney fees in which they contended, inter alia, that any allowance would violate the sovereign immunity of the State.

No action was taken by the circuit court on the matter of fees while the case was pending on appeal. On September 24, 1979, shortly after this court's opinion was filed, the Attorney General filed a petition in circuit court to intervene, and also filed objections to the petitions for fees. The Attorney General represents that he never received any notice of the institution of this litigation, of the judgment of the circuit court, or of the decision of this court, and that he did not become aware of the latter until a few days before he filed his petition to intervene.

The circuit court granted the petition to intervene. Its order provided that the Attorney General should be bound by all prior judgments and orders, and that he might raise "only the issue of the right to fees and the amount thereof, if any." The circuit court overruled the Attorney General's objections, and on October 30, 1979, it entered an order awarding the plaintiff's attorneys $108,000 in fees and $904 in costs, and awarding the trustee $6,794 in fees and $478 in costs, for a total allowance of $116,176. The trustee was directed to hold the balance of the fund until further order of the court. The Attorney General's appeal followed. The plaintiff's attorneys have cross-appealed, seeking an award of $148,563 in fees, the amount prayed for in their petition.

The chief ground urged by the Attorney General for reversal of the circuit court is that an award of attorney fees and costs, whatever the amount, violates the sovereign immunity of the State. Sovereign immunity, which formerly had a constitutional basis (Ill.Const. 1870, art. IV, sec. 26), was abolished by article XIII, section 4, of the Constitution of 1970, "(e)xcept as the General Assembly may provide by law * * *." Sovereign immunity thus may now be asserted only if there is some statute which confers it. The statute on which the Attorney General bases his claim of sovereign immunity here is the act (Ill.Rev.Stat. 1979, ch. 127, par. 801) which declares "the State of Illinois shall not be made a defendant or party in any court" except by way of an action brought in the Court of Claims under section 8 of the statute creating that body (Ill.Rev.Stat. 1979, ch. 37, par. 439.8).

A determination of whether sovereign immunity is applicable in the present case requires an analysis of the decisional law of this State as to the right of the prevailing party in civil litigation to recover attorney fees from some other source, be it the State or a private person. Beginning with its decision in Ritter v. Ritter (1943), 381 Ill. 549, 46 N.E.2d 41, this court has followed the prevailing rule in the United States that in the absence of a statute or an agreement the successful litigant in a civil action may not recover attorney fees or the ordinary expenses of litigation from his adversary. (See 1 S. Speiser, Attorneys Fees sec. 12:3 (1973).) This rule has been adhered to in later decisions. See, e. g., House of Vision, Inc. v. Hiyane (1969), 42 Ill.2d 45, 51-52, 245 N.E.2d 468; Meyer v. Marshall (1976), 62 Ill.2d 435, 442, 343 N.E.2d 479; cf. City of Chicago v. Fair Employment Practices Com. (1976), 65 Ill.2d 108, 2 Ill.Dec. 711, 357 N.E.2d 1154. On the other hand we have held in a number of cases that a successful plaintiff may recover attorney fees from other persons to the extent that as an incident to the litigation a fund was created from which the fees could be drawn. Many of these cases are of particular pertinence here since they involved a statute or a local ordinance which diverted the proceeds of tax collections from one governmental entity to another and which was held unconstitutional for that reason. See, e. g., Flynn v. Kucharski (1974), 59 Ill.2d 61, 319 N.E.2d 1; City of East Peoria v. Tazewell County (1975), 60 Ill.2d 263, 327 N.E.2d 331; Leader v. Cullerton (1976), 62 Ill.2d 483, 343 N.E.2d 897; Fiorito v. Jones (1978), 72 Ill.2d 73, 81 Ill.Dec. 383, 377 N.E.2d 1019.

These decisions are not inconsistent with the rule of Ritter v. Ritter, nor are they exceptions to that rule, as the parties would characterize them. In these cases a plaintiff's attorney fees and expenses are not charged against the adversary because the latter lost the case. On the contrary they are charged against a person or an entity that is benefited by the fund which was created or preserved by the plaintiff's success in causing a tax to be invalidated. While the beneficiary thus charged may be a member of the class on whose behalf the suit was brought, the beneficiary may also be the governmental unit whose officer was the defendant in the action.

Flynn v. Kucharski (1974), 59 Ill.2d 61, 319 N.E.2d 1, is illustrative. As is more fully explained in the opinion filed on a prior appeal (Flynn v. Kucharski (1970), 45 Ill.2d 211, 258 N.E.2d 329), this case involved a method of tax collection under which a portion of the taxes collected by township collectors from residents of Cook County living outside the city of Chicago could be diverted from general countywide purposes to local purposes. Certain taxpayers of the city of Chicago brought a class action against the Cook County collector and several township collectors, which terminated in a decision that the statute was invalid. In the course of the litigation the circuit court had ordered the township collectors to deposit the disputed monies with a court-appointed trustee for ultimate payment to the county. Over the objection of the county treasurer the circuit court awarded fees out of this fund to the plaintiffs' attorneys. Although we found the amount of the fee excessive and reduced it, we upheld the principle that payment of attorney fees could properly be made from the fund. Although actions on the part of the Cook County collector formed a part of the invalid system of tax collections, the county was the immediate beneficiary of the plaintiff's victory, since its treasury was thereby augmented. It was for that reason that the county's windfall could properly be reduced by the attorney fees and expenses incident to its creation.

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