Schultz v. Lakewood Elec. Corp.

• Decision Date: 19 December 2005
• Docket Number: No. 1-04-3393.,1-04-3393.
• Citation: Schultz v. Lakewood Elec. Corp., 841 N.E.2d 37, 362 Ill. App. 3d 716 (Ill. 2005)
• Parties: Henry SCHULTZ, Plaintiff-Appellee, v. LAKEWOOD ELECTRIC CORPORATION, Defendant-Appellant (Osman Construction Corporation, Defendant).
• Court: Illinois Supreme Court

841 N.E.2d 37

Henry SCHULTZ, Plaintiff-Appellee, v. LAKEWOOD ELECTRIC CORPORATION, Defendant-Appellant (Osman Construction Corporation, Defendant).

No. 1-04-3393.

Appellate Court of Illinois, First District, First Division.

November 21, 2005.

Rehearing Denied December 19, 2005.

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Kralovec & Marquard, Chtd. (William E. Spizzirri, of counsel), Chicago, for Appellant.

Goldberg, Weisman & Cairo, Ltd. (Kirsten M. Dunne, of counsel), Chicago, for Appellee.

Justice BURKE delivered the opinion of the court:

This case is before us for a second time. On March 9, 2004, we reversed the circuit court's order granting defendant Lakewood Electric Corporation (Lakewood) a new trial and ordered the trial court to enter judgment on the jury verdict in favor of plaintiff Henry Schultz. Schultz v. Lakewood Electric Corp., No. 1-03-0395 (March 9, 2004) (unpublished order under Supreme Court Rule 23). Lakewood now appeals from an order of the circuit court entering statutory interest on the judgment at the rate of 9% pursuant to section 2-1303 of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-1303 (West 2004)). On appeal, Lakewood contends that section 2-1303 is unconstitutional because it violates due process and equal protection of the law. For the reasons set forth below, we affirm.

STATEMENT OF FACTS

On January 26, 1998, plaintiff was injured as a result of coming into contact with a live 277-volt wire while working as an electrician for construction of a Carmax, located in Tinley Park, Illinois. The general contractor for the project was Osman Construction Corporation (Osman). Osman employed Lakewood as the prime electrical contractor. In turn, Lakewood employed Advanced Systems Technology (Advanced) as a subcontractor on the project to perform low voltage electrical work. Plaintiff was employed by Advanced.

On May 13, plaintiff filed a complaint against Osman and Lakewood, alleging negligence. Thereafter, Lakewood and Osman filed a third-party complaint against Advanced. Prior to a trial, plaintiff entered into a settlement agreement with Osman for $17,500. The matter then proceeded to trial in July 2002 against Lakewood only. The jury returned a verdict in favor of plaintiff against Lakewood in the amount of $1,110,400 and in favor of Lakewood against Advanced. The jury apportioned fault as follows: plaintiff 20%; Lakewood 75%; and Advanced 5%. On August 3, the trial court entered judgment on the jury's verdict, awarding plaintiff $870,820 against Lakewood after the setoff for Osman's settlement and the amount representing plaintiff's comparative negligence.

Thereafter, Lakewood filed a posttrial motion, asking the court to vacate the judgment entered against it and sustain its previously made, but reserved for ruling, motion for a mistrial or, in the alternative, grant it a new trial or enter judgment notwithstanding the verdict. On February 26, 2003, the trial court granted Lakewood's motion for a new trial. Plaintiff filed a notice of appeal from this order and, as noted above, we reversed the trial court's order granting a new trial and remanded this cause, ordering the trial court to enter judgment in favor of plaintiff on the jury verdict.

On April 26, 2004, Lakewood tendered a draft to plaintiff in the amount of $870,820. Thereafter, on May 21, it tendered another draft to plaintiff in the amount of $14,171.80, the amount of statutory interest it believed would accrue upon reentry of judgment. On July 9, the case was reinstated in the circuit court. On July 13, plaintiff filed a motion for costs in the amount of $9,555.31. On July 27, Lakewood filed a motion to strike certain costs, although admitting it owed $585.40. On August 12, plaintiff filed his reply in support of his motion for costs and, on August 13, he filed a motion for entry of judgment on the jury verdict and for computation of statutory interest. Plaintiff sought interest from the date of the jury verdict.

On September 14, Lakewood filed its response to plaintiff's motion for entry of judgment and interest, alleging that interest should begin to accrue from the date the circuit court reenters judgment on the jury verdict, not from the date of the original jury verdict. Thereafter, Lakewood filed its notice of claim of unconstitutionality of section 2-1303 as violative of due process and equal protection.

On October 27, the trial court held a hearing on plaintiff's motion for interest. At this time, the trial court indicated that it did not agree with Lakewood's argument that the interest statute was unconstitutional and noted that the rate of interest was up to the legislature to set. The court further indicated that interest accrued from the date of the original jury verdict. Accordingly, the trial court entered an order entering judgment on the jury verdict in favor of plaintiff for $870,820. The order further provided that interest began to run as of August 3, 2002, and that, to date, the amount of interest was $126,297.39, which would continue to accrue at the rate of $30.40 per day until Lakewood paid the entire amount. The court also awarded plaintiff $675.40 in costs. This appeal followed.

ANALYSIS

Lakewood asks this court to declare section 2-1303 of the Code unconstitutional as violative of due process and equal protection under Article I, sections 2 (due process and equal protection clauses) and 12 (access to courts clause) of the Illinois Constitution and the fourteenth amendment (due process and equal protection clauses) to the United States Constitution. According to Lakewood, the 9% rate has been in effect since 1980 and, because times have changed, there is no longer any reasonable objective in having an inflexible rate of interest.

Section 2-1303 of the Code provides:

"Judgments recovered in any court shall draw interest at the rate of 9% per annum from the date of the judgment until satisfied or 6% per annum when the judgment debtor is a unit of local government * * *. The judgment debtor may by tender of payment of judgment, costs and interest accrued to the date of tender, stop the further accrual of interest on such judgment notwithstanding the prosecution of an appeal, or other steps to reverse, vacate or modify the judgment." 735 ILCS 5/2-1303 (West 2004).

In addressing a challenge to the constitutionality of a statute, we begin with the presumption that it is constitutional. In re D.W., 214 Ill.2d 289, 310, 292 Ill.Dec. 937, 827 N.E.2d 466 (2005). If reasonably possible, a reviewing court must construe the statute so as to uphold its constitutionality and validity. In re D.W., 214 Ill.2d at 310, 292 Ill.Dec. 937, 827 N.E.2d 466. The party challenging the constitutionality of a statute bears the burden of demonstrating its invalidity. People v. Malchow, 193 Ill.2d 413, 418, 250 Ill.Dec. 670, 739 N.E.2d 433 (2000). Whether a statute is constitutional presents a question of law that we review de novo. In re D.W., 214 Ill.2d at 309, 292 Ill.Dec. 937, 827 N.E.2d 466. When a statute is challenged as unconstitutional under substantive due process or equal protection, our analysis is essentially the same.

I. Due Process

Under substantive due process, if the statute does not affect a fundamental constitutional right, the rational basis test applies to determine whether the statute comports with due process. People v. Cornelius, 213 Ill.2d 178, 203, 290 Ill.Dec. 237, 821 N.E.2d 288 (2004). "The rational basis test is satisfied where the challenged statute bears a rational relationship to the purpose the legislature intended to achieve in enacting the statute." Cornelius, 213 Ill.2d at 203-04, 290 Ill.Dec. 237, 821 N.E.2d 288. Under the rational basis test, we give high deference to the judgments made by the legislature. Village of Lake Villa v. Stokovich, 211 Ill.2d 106, 125, 284 Ill.Dec. 360, 810 N.E.2d 13 (2004). "Thus, we are not concerned with the wisdom of the statute or with whether it is the best means to achieve the desired result." Village of Lake Villa, 211 Ill.2d at 125-26, 284 Ill.Dec. 360, 810 N.E.2d 13. "So long as there is a conceivable basis for finding the statute rationally related to a legitimate state interest, the law must be upheld." Village of Lake Villa, 211 Ill.2d at 126, 284 Ill.Dec. 360, 810 N.E.2d 13. Conversely, "where the right infringed upon is among those rights considered `fundamental' constitutional rights, the challenged statute is subject to strict scrutiny analysis." Cornelius, 213 Ill.2d at 204, 290 Ill.Dec. 237, 821 N.E.2d 288. "To survive strict scrutiny, the means employed by the legislature must be necessary to achieve a compelling state interest, and the statute must be narrowly tailored to accomplish this goal, i.e., the legislature must employ the least restrictive means consistent with the attainment of the intended goal." Cornelius, 213 Ill.2d at 204, 290 Ill.Dec. 237, 821 N.E.2d 288.

Lakewood contends that section 2-1303 of the Code violates substantive due process because it contravenes the right of access to the courts under section 12 of the Illinois Constitution and the fourteenth amendment since the fixed 9% interest rate is arbitrary and has no relationship to present economic conditions and penalizes it for appealing, thus hampering its access to the courts. According to Lakewood, it was either required to tender the entire judgment amount to plaintiff, who was no longer a judgment creditor since the trial court awarded Lakewood a new trial, or abandon its appeal rights. Although Lakewood notes that either a strict scrutiny or rational basis test applies to due process challenges, it does not present any cohesive, reasoned, or well-developed argument as to which standard applies here. Lakewood maintains that the purpose of section 2-1303 is to make a plaintiff whole and, as applied here, the provision is unconstitutional since current economic factors do not warrant a 9% rate of interest because it...