Gittleman v. Create, Inc.

545 N.E.2d 237, 189 Ill. App. 3d 199, 136 Ill. Dec. 713, 1989 Ill. App. LEXIS 1423
CourtAppellate Court of Illinois
DecidedSeptember 21, 1989
Docket1-87-2712
StatusPublished
Cited by16 cases

This text of 545 N.E.2d 237 (Gittleman v. Create, Inc.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gittleman v. Create, Inc., 545 N.E.2d 237, 189 Ill. App. 3d 199, 136 Ill. Dec. 713, 1989 Ill. App. LEXIS 1423 (Ill. Ct. App. 1989).

Opinions

JUSTICE JOHNSON

delivered the opinion of the court:

Plaintiffs, Nancy Gittleman and Debra Hanch, appeal from the order of the circuit court of Cook County finding that they were not entitled to the full statutory penalty of an amount equal to their security deposits, costs, and reasonable attorney fees, pursuant to section 2 of the security deposits on residential leases act (Ill. Rev. Stat. 1985, ch. 80, par. 122) (hereinafter the Act). Defendant herein is Create, Incorporated, an Illinois corporation engaged in the business of managing residential apartment buildings. The sole issue on review is whether the trial court erred in failing to impose the statutory penalty.

We reverse.

Plaintiffs were tenants of apartments leased by defendant under a one-year written lease dated September 30, 1986. Gittleman resided at 1371 West Estes, Apartment 2F, Chicago, Illinois, and Hanch resided at 1367 West Estes, Apartment K, Chicago, Illinois. Under the terms of each lease, the security amount and the amount of rent per month would be $300.

Prior to the termination of their leases, plaintiffs made oral and written demands for the return of their security deposits. Subsequently, plaintiffs moved to new residences. An inspection checklist prepared by defendant revealed no damages to plaintiffs’ apartments at the end of their tenancies.

On October 27, 1986, defendant mailed a $300 check to Hanch and to Gittleman. Both checks were sent certified mail to their respective former addresses, i.e., 1367 West Estes, Apartment K, and 1371 West Estes, Apartment 2F. Hanch’s check was returned “addressee unknown” and not forwarded to any other address. Gittleman’s check was returned, marked “unclaimed.” On March 3, 1987, another check was mailed to Hanch, which she did receive. The check was mailed prior to defendant being served with summons in this case. A second check was mailed to Gittleman in December 1986; however, it was again returned unclaimed.

On February 17, 1987, plaintiffs filed suit against defendant and Earl Niemoth for their security deposits and interest refunds. Defendant was served on March 10, 1987. A special appearance was filed on behalf of both defendants. The trial date was set for April 2, 1987, but was continued pending a hearing on the special appearance and defendant’s motion to quash service. The motion was denied on April 30, 1987. Also on that date voluntary nonsuit was taken against Niemoth, who was dismissed as a party defendant.

Plaintiffs filed their motion for summary judgment on June 10, 1987, but it was stricken due to improper notice. On June 16, 1987, defendant filed its motion for summary judgment, which was scheduled to be heard on June 29, 1987. Plaintiffs refiled their motion for summary judgment on June 18, 1987, which was scheduled to be heard on June 25, 1987, but was continued to June 29 pending the hearing on defendant’s motion for summary judgment.

On July 27, 1987, arguments were heard on the cross-motions for summary judgment. The court rendered a decision in favor of plaintiffs. It ordered defendant to pay each plaintiff $15 in interest on their security deposits and to pay Gittleman $300 as her security deposit return. The court further ordered defendant to pay costs; however, the court found that plaintiffs were not entitled to an amount equal to the security deposits or attorney fees. This appeal followed.

Plaintiffs contend on appeal that the trial court erred in failing to award them the statutory penalty for refusal to pay interest on their security deposits, pursuant to sections 1 and 2 of the Act. (Ill. Rev. Stat. 1985, ch. 80, pars. 121, 122.) Defendant argues that the leases expressly provided for the disposition of interest on the deposit. A provision stamped onto the lease provided in relevant part: “It is understood that the security deposit is net of security deposit interest, if any.” Defendant claims that the interest on the $300 security deposit is $15 per year, or $1.25 per month, which is deducted from the rent. Thus, defendant asserts that the gross rent is 301.25; net rent of $300, and $1.25 credited monthly as interest on the security deposit.

Defendant further argues that its refusal to pay the interest was not willful. It claims that in order to impose the statutory penalty the court must find its failure to pay the interest was willful. Defendant primarily relies on Mallah v. Barkauskas (1985), 130 Ill. App. 3d 815, to support this argument.

Mallah involved the refusal of a lessor to return a security deposit. The court ordered the lessor to return the security deposit, but did not impose the statutory penalty pursuant to section 1 of the security deposits for rent or compensation for damages act (Ill. Rev. Stat. 1983, ch. 80, par. 101), since it found that the lessor did not act in bad faith.

Mallah is not dispositive of the present issue. Mallah involves a different issue governed by a different provision. Under the provision relied on in Mallah, in order to impose the statutory penalty one must prove that the lessor acted in bad faith. However, under section 2 of the Act, which is applicable in the present case, the statutory penalty will be imposed if it is determined that the lessor’s conduct is willful. Hence, Mallah is inapplicable to the case at bar.

The law is well settled that when construing statutes this court must give effect to the legislative intent. (Village of Schaumburg v. Franberg (1981), 99 Ill. App. 3d 1, 5.) “In ascertaining legislative intent, the entire statute must be considered [citation] as well as giving effect to ‘the evil to be remedied and the object to be attained’ [citation].” (Chastek v. Anderson (1981), 83 Ill. 2d 502, 511.) In those instances where the legislative intent is clear from the plain and ordinary language of the statute, we are without authority to construe it otherwise. Weisberg v. Byrne (1981), 92 Ill. App. 3d 780, 784.

Section 1 of the Act provides:

“A lessor of residential real property, containing 25 or more units, who receives a security deposit from a lessee to secure the payment of rent or compensation for damage to property shall pay interest to the lessee computed from the date of the deposit at a rate of 5% per year on any such deposit held by the lessor for more than 6 months.” (Ill. Rev. Stat. 1985, ch. 80, par. 121.)

Section 2 of the Act provides:

“The lessor shall, within 30 days after the end of each 12 month rental period, pay to the lessee any interest, by cash or credit to be applied to rent due, except when the lessee is in default under the terms of the lease.
A lessor who willfully fails or refuses to pay the interest required by this Act shall, upon a finding by a circuit court that he has willfully failed or refused to pay, be liable for an amount equal to the amount of the security deposit, together with court costs and reasonable attorney’s fees.” Ill. Rev. Stat. 1985, ch. 80, par. 122.

The words of the above two provisions are clear. We find no ambiguities in their meaning. A lessor who receives a security deposit which is held over six months must pay 5% interest per year on that deposit. Within 30 days from the end of a 12-month period the lessor must pay the lessee the interest.

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Gittleman v. Create, Inc.
545 N.E.2d 237 (Appellate Court of Illinois, 1989)

Cite This Page — Counsel Stack

Bluebook (online)
545 N.E.2d 237, 189 Ill. App. 3d 199, 136 Ill. Dec. 713, 1989 Ill. App. LEXIS 1423, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gittleman-v-create-inc-illappct-1989.