Hicks v. Williams

432 N.E.2d 1278, 104 Ill. App. 3d 172, 60 Ill. Dec. 379, 1982 Ill. App. LEXIS 1474
CourtAppellate Court of Illinois
DecidedMarch 1, 1982
Docket80-554
StatusPublished
Cited by10 cases

This text of 432 N.E.2d 1278 (Hicks v. Williams) 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
Hicks v. Williams, 432 N.E.2d 1278, 104 Ill. App. 3d 172, 60 Ill. Dec. 379, 1982 Ill. App. LEXIS 1474 (Ill. Ct. App. 1982).

Opinion

PRESIDING JUSTICE KARNS

delivered the opinion of the court:

Plaintiffs, grain producers in Illinois, brought an action in the circuit court of Jackson County against the director, assistant director, officers and employees of the Illinois Department of Agriculture and Aetna Insurance Company for damages allegedly sustained when a grain elevator became insolvent. We affirmed the trial court’s dismissal of the action against Aetna Insurance Company. (See Hicks v. Aetna Insurance Co. (1981), 97 Ill. App. 3d 828, 423 N.E.2d 584.) The remaining defendants moved to strike the second amended complaint and dismiss the action for, among other things, failure to state a cause of action. Defendant’s motion was granted and plaintiffs appeal, contending the following: (1) that as provided by statute (Ill. Rev. Stat. 1977, ch. 111, par. 301 et seq.) (hereinafter referred to as the Grain Dealers Act), defendants owed a duty not only to the State of Illinois, but also to individual grain producers; (2) that the distribution of the dealer’s surety bond, as provided in section 3 of the Grain Dealers Act, was not an exclusive remedy; (3) that the complaint alleged malicious breach of duty; and (4) that the doctrine of sovereign immunity did not bar the suit. Because we find that the complaint does not state a cause of action, we do not reach plaintiff’s fourth contention.

On December 11,1979, plaintiffs filed their initial complaint. Defendants filed a motion to dismiss the complaint which was granted, but with leave to amend. In their amended complaint filed on July 11, 1980, plaintiffs stated that from June 15,1976, to December 12, 1978, they sold grain on credit to Murphysboro Grain Elevator in Murphysboro, Illinois. On or about March 1, 1978, the grain elevator became insolvent and was declared insolvent and closed on December 12, 1978. A petition in bankruptcy was filed on January 12, 1979. The complaint alleged that defendants breached the statutory duty of protecting the grain producers from financial loss as provided in the Grain Dealers Act (Ill. Rev. Stat. 1977, ch. 111, par. 301 etseq.), and as a result, plaintiffs suffered damages in the amount of the value of the grain deposited at the grain elevator. Plaintiffs supported their claim to relief by alleging essentially the following acts or omissions:- (1) that defendant allowed the grain elevator to operate for a period of time without a license and without posting a surety bond as required by the Act; (2) that defendants, having knowledge that the grain elevator was operating without a license, failed to hold a hearing on the expiration of the license as allegedly required by section 6 of the Act and failed to report the grain elevator’s continued operation to the State’s Attorney as allegedly required by section 9 of the Act; (3) that defendants failed to detect the insolvency of the grain elevator after a field audit, and (4) that defendants failed to protect the producers’ interests after receipt of verbal notice from a producer that Tri-State Grain Company, operating as a subsidiary of the grain elevator, would be one month tardy in making payments for grain purchased. Plaintiffs alleged that they relied on the defendants’ performance of their statutory duties and that defendants’ breach thereof caused plaintiffs’ damages. The complaint characterized defendants’ alleged breach of their duties as “negligent,” “wanton and willful,” “intentional,” “derelict,” and “with reckless disregard.”

Following argument and the submission of memoranda, the trial court ruled that the complaint was insufficient in law because the Grain Dealers Act created no duties owed to individuals other than to the citizens of Illinois as a whole and that plaintiffs failed to plead and could not plead malice or corrupt conduct to state a cause of action at common law.

On appeal, plaintiffs argue that the second amended complaint was sufficient to state a cause of action. Their initial contention in that regard is that the trial court erred in finding that the duties imposed on defendants by the Grain Dealers Act (Ill. Rev. Stat. 1977, ch. 111, par. 301 et seq.) were owed to the State of Illinois and not to the individual grain producers. As a corollary to their initial contention, plaintiffs argue that the distribution of the dealers’ surety bond as provided in section 3 of the Grain Dealers Act was not intended as an exclusive remedy for the redress of financial loss caused to the grain producers. We have examined the authorities cited by plaintiff and conclude that they are not supportive of the plaintiffs’ arguments.

Plaintiffs discuss the legislative history of “An Act to regulate public warehouses * * *” (Ill. Rev. Stat. 1953, ch. 114, par. 189 et seq.) (hereinafter referred to as the Public Warehouses Act) in support of the contention that the alleged breach of the defendants’ statutory duties constituted a private injury. The Public Warehouses Act was enacted pursuant to article 13 of the 1870 Illinois Constitution and was repealed by the Public Grain Warehouse and Warehouse Receipts Act (Ill. Rev. Stat.

1955, ch. 114, par. 214.1 et seq.). We are of the opinion that the history of the repealed Public Warehouses Act is not dispositive of the issue before the court. No provision of the Grain Dealers Act requires a different conclusion. Moreover, the central focus of plaintiffs’ discussion of the Public Warehouses Act is the official bond requirement. Even though officials of the Department of Agriculture similarly are required to execute an official bond (Ill. Rev. Stat. 1977, ch. 127, pars. 15, 40 et seq.), this requirement does not support plaintiffs’ argument. As we noted in Hicks v. Aetna Insurance Co. (1981), 97 Ill. App. 3d 828, 423 N.E.2d 584, at common law, a third party could not bring an action on an official bond in the absence of specific authority. We find nothing in the Grain Dealers Act that indicates the legislature’s intention to provide a private cause of action by the official bond requirement.

Plaintiffs also cite Tcherepnin v. Franz (7th Cir. 1978), 570 F.2d 187. In Tcherepnin, the court held the director of the Illinois Department of Financial Institutions liable to the depositors of a savings and loan institution for breach of certain statutory duties imposed on the director by the Illinois Savings and Loan Act (Ill. Rev. Stat. 1963, ch. 32, par. 701 et seq.). The court found nothing in the Act to suggest that the statutory duties of the director were owed only to the State of Illinois. The court reasoned that the repeated references to the “protection of the Association” in defining the director’s duties indicated that these duties were owed to the depositors.

Tcherepnin, however, is distinguishable from the instant case because the Illinois Savings and Loan Act and the Grain Dealers Act are different in several important respects. Section 6 of the Grain Dealers Act (Ill. Rev. Stat. 1977, ch. 111, par. 306) defines the duties of the department officials. As contrasted with the Illinois Savings and Loan Act, section 6 of the Grain Dealers Act does not contain repeated references to the protection of the grain producers. In addition, the supervisory duties and corresponding powers of the department officials defined in the Grain Dealers Act are more limited than those of the director of the Illinois Department of Financial Institutions.

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Bluebook (online)
432 N.E.2d 1278, 104 Ill. App. 3d 172, 60 Ill. Dec. 379, 1982 Ill. App. LEXIS 1474, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hicks-v-williams-illappct-1982.