Schultz v. Performance Lighting, Inc. ( 2013 )

2013 IL 115738
IN THE
SUPREME COURT
OF
THE STATE OF ILLINOIS
(Docket No. 115738)
JENNIFER SCHULTZ, Appellant, v. PERFORMANCE LIGHTING,
INC., Appellee.
Opinion filed November 21, 2013.
JUSTICE THOMAS delivered the judgment of the court, with
opinion.
Chief Justice Garman and Justices Freeman, Kilbride, Karmeier,
Burke, and Theis concurred in the judgment and opinion.
OPINION
¶1 Plaintiff, Jennifer Schultz, filed a complaint in the circuit court of
Lake County, seeking to recover a $100 per day statutory penalty
from defendant, Performance Lighting, Inc., pursuant to section 35 of
the Income Withholding for Support Act (the Act) (750 ILCS 28/35
(West 2010)). Plaintiff’s claim was based on defendant’s failure to
withhold sums for child support that allegedly should have been
withheld from her ex-husband’s paychecks. The circuit court
dismissed the complaint with prejudice, finding that plaintiff’s notice
of withholding was not in strict compliance with the requirements of
the Act for creating a valid notice. See 750 ILCS 28/20(c) (West
2010). The appellate court affirmed, rejecting plaintiff’s argument
that she sufficiently complied with the notice requirements so as to
trigger defendant’s obligation to withhold funds from her ex-
husband’s paychecks. 2013 IL App (2d) 120405. For the following
reasons, we affirm the judgment of the appellate court.
¶2 BACKGROUND
¶3 In 2009, plaintiff filed for a dissolution of her marriage to her now
ex-husband. On November 19, 2009, the circuit court entered an
order that required the ex-husband to pay child support to plaintiff in
the amount of $600 every two weeks. The order was prepared by
plaintiff’s attorney and did not include the obligor’s (the ex-
husband’s) social security number, even though section 20(a)(3) of
the Act specifically requires that “every order for support ***
[i]nclude the obligor’s Social Security Number, which the obligor
shall disclose to the court.” See 750 ILCS 28/20(a)(3) (West 2010).1
On that same day, the court also issued a “Uniform Order for
Support,” which also set forth the $600 bi-weekly child support
obligation. This order was also prepared by plaintiff’s attorney, and
it too did not include the social security number of the obligor.
Additionally, it did not fill in the blank for the name of the obligor.
At the time of the entry of the orders, the ex-husband worked for
defendant. The uniform order for support stated that a notice to
withhold income shall issue immediately and shall be served on the
employer listed in the order. But no employer was actually listed in
that order. The uniform order for support also stated that the employer
was to make payments to the State Disbursement Unit and was
required to include the obligor’s name and social security number
with those payments.
¶4 Plaintiff sought to acquire the court-ordered support by
withholding from her ex-husband’s wages. Plaintiff served a notice
to withhold income for support on defendant and filed the notice with
the circuit clerk on November 19, 2009. Plaintiff attached the notice
she served on defendant, as well as the uniform order for support, to
her complaint. The notice, however, did not include the ex-husband’s
social security number or the termination date of defendant’s income-
withholding obligation, even though the Act states that these items
1
Compare with Supreme Court Rule 15, which provides among other
things, that if the disclosure of a social security number is required for a
document to be filed with the court, only the last four digits of the number
shall be used in the document and the disclosure must be accompanied by
a confidential information notice, which includes the full social security
number to which the parties are privy. This requirement, however, did not
become effective until January 1, 2012. Ill. S. Ct. R. 15 (former Rule 138
(eff. Jan. 1, 2012); renumbered as Rule 15 (eff. Apr. 26, 2012)).
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are required to be placed in the notice.2 See 750 ILCS 28/20(c)(9),
(c)(10) (West 2010). Plaintiff also served the ex-husband’s attorney
in court with the notice but did not serve the ex-husband himself.3
¶5 Plaintiff’s ex-husband continued to work for defendant through
May 2010. It is undisputed that defendant did not withhold any sums
for support from the ex-husband’s paycheck and did not forward any
amounts to the State Disbursement Unit on plaintiff’s behalf.
¶6 On November 10, 2011, plaintiff filed the instant complaint,
alleging that defendant knowingly failed to pay over to the State
Disbursement Unit the amounts ordered to be withheld from her ex-
husband’s paychecks. Plaintiff further alleged that defendant had a
statutory duty to withhold and pay over to the State Disbursement
Unit the ordered amounts from her ex-husband’s paychecks within
seven days after the pay would have been given to her ex-husband.
Plaintiff alleged that under section 35 of the Act, defendant owed a
duty to plaintiff to comply with the notice of withholding and that
defendant breached this statutory duty, thereby triggering a penalty of
$100 for each day defendant failed to pay over to the State
Disbursement Unit the ordered amounts.
¶7 On January 24, 2012, defendant filed a motion to dismiss
plaintiff’s complaint pursuant to section 2-615 of the Code of Civil
Procedure (735 ILCS 5/2-615 (West 2010)). Defendant argued that
plaintiff’s notice of withholding did not comply with the statutory
requirements of section 20(c) of the Act (750 ILCS 28/20(c) (West
2010)) and that plaintiff did not properly effect service on the obligor
under section 20(g) of the Act (750 ILCS 28/20(g) (West 2010)).
Defendant maintained that because plaintiff’s notice of withholding
did not comply with the statute, the notice was invalid and therefore
defendant’s duty to withhold and pay over a portion of her ex-
husband’s paychecks was never operative.
2
But the notice did contain sufficient information to allow defendant to
infer the termination date of the withholding obligation, as the notice
included the birth dates of the couple’s children and a definition section
that stated that child support terminated upon the later-occurring of the
younger child’s eighteenth birthday or graduation from high school.
3
The Act states that the obligor is to be served notice by ordinary mail
to his last known address. See 750 ILCS 28/20(g) (West 2010).
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¶8 In response to the motion to dismiss, plaintiff argued that the
omissions in the notice were minor and did not obviate defendant’s
obligation to withhold under section 35(a) of the Act. She further
argued that because defendant was adequately informed of the
amount to withhold and the obligor’s name was included in the
notice, defendant should have been able to comply with the notice.
¶9 The circuit court rejected plaintiff’s response and instead agreed
with defendant’s arguments. Accordingly, it dismissed plaintiff’s
complaint with prejudice. The appellate court affirmed, holding that
the omission of the required information, in particular the ex-
husband’s social security number, invalidated the notice of
withholding and mandated dismissal of the case. 2013 IL App (2d)
120405, ¶ 26. We allowed plaintiff’s petition for leave to appeal. Ill.
S. Ct. R. 315 (eff. Feb. 26, 2010).
¶ 10 ANALYSIS
¶ 11 The central issue in this case is whether a notice of withholding
that is statutorily deficient because it fails to include the required
social security number of the obligor can nonetheless be deemed
sufficient to impose a duty on an employer to withhold the obligor’s
income. Plaintiff argues that including the obligor’s social security
number is not mandatory and only substantial compliance with the
statutory elements of a withholding notice is required to make a
notice effective and binding. Thus, the issue before us requires that
we interpret the provisions of the Act to determine whether plaintiff’s
notice of withholding was sufficient to impose a duty to withhold in
this case.
¶ 12 The fundamental rule of statutory construction is to ascertain and
give effect to the legislature’s intent. Michigan Avenue National Bank
v. County of Cook, 191 Ill. 2d 493, 503-04 (2000). The best indicator
of legislative intent is the statutory language itself, given its plain and
ordinary meaning. Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469,
479 (1994). We consider the statute in its entirety, keeping in mind
the subject it addresses and the apparent intent of the legislature in
enacting it. People v. Perry, 224 Ill. 2d 312, 323 (2007). Moreover,
to the extent there is any ambiguity, penal statutes and statutes that
create “new liabilities” should be strictly construed in favor of
persons sought to be subjected to their operation and will not be
extended beyond their terms. See, e.g., Nowak v. City of Country
Club Hills, 2011 IL 111838, ¶¶ 19, 27 (statute creating a new liability
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strictly construed in favor of entity that would have been subjected to
the liability); Croissant v. Joliet Park District, 141 Ill. 2d 449, 455
(1990) (penal statute to be construed strictly). Similarly, statutes in
derogation of the common law are to be strictly construed in favor of
persons sought to be subjected to their operation. Nowak, 2011 IL
111838, ¶ 19. The proper construction to be placed on a statute is a
question of law that we review de novo. Id. ¶ 11.
¶ 13 Section 35 of the Act places a duty on the payor who has been
served with notice to pay over to the State Disbursement Unit the
ordered portion of the obligor’s income. 750 ILCS 28/35(a) (West
2010). Under the Act, an “[o]bligor” is defined as the “individual who
owes a duty to make payments under an order for support.” 750 ILCS
28/15(e) (West 2010). A “[p]ayor” is defined as “any payor of income
to an obligor.” 750 ILCS 28/15(g) (West 2010). Section 35 imposes
a $100 a day penalty on a payor who knowingly fails to withhold
income of an obligor in the amount of an income withholding notice
served under the Act. 750 ILCS 28/35 (West 2010).
¶ 14 The statute requires the “obligee,” the plaintiff in this case, to
serve the income withholding notice on the payor and the obligor. 750
ILCS 28/20(g) (West 2010). Section 20(c) of the Act sets forth the
information that must be included in the notice of withholding. It
provides in relevant part as follows:
“The income withholding notice shall:
(1) be in the standard format prescribed by the federal
Department of Health and Human Services; and
(2) direct any payor to withhold the dollar amount
required for current support under the order for support;
and
***
(9) include the Social Security number of the obligor;
and
(10) include the date that withholding for current
support terminates, which shall be the date of termination
of the current support obligation set forth in the order for
support; and
(11) contain the signature of the obligee *** except
that the failure to contain the signature of the obligee ***
shall not affect the validity of the income withholding
notice; and
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(12) direct any payor to pay over amounts withheld for
payment of support to the State Disbursement Unit.” 750
ILCS 28/20(c) (West 2010).
¶ 15 The above-quoted statute unequivocally requires that the obligor’s
social security number be included in the notice of withholding.
Notably, the obligee’s signature is the only one of the 12 requirements
mentioned in the statute that is expressly excepted from affecting the
validity of the notice of withholding. It is undisputed that plaintiff, as
the obligee sending the notice, failed to include her ex-husband’s
social security number in her notice. We agree with the appellate
court that the omission of the social security number is dispositive
and that it rendered the notice invalid.
¶ 16 The use of the word “shall” generally indicates that the legislature
intended to impose a mandatory obligation. People v. Boeckmann,
238 Ill. 2d 1, 15-16 (2010); Holly v. Montes, 231 Ill. 2d 153, 160
(2008). Moreover, a statute is considered mandatory, as opposed to
merely directory, if it indicates a legislative intent to dictate a
particular consequence for failure to comply with the provision. In re
M.I., 2013 IL 113776, ¶ 16.
¶ 17 Here, we find that the legislature intended a particular
consequence for failing to comply with the requirements of section
20(c) of the Act other than the signature requirement. That
consequence is that the notice be rendered invalid. We know this
because the legislature specifically singled out the lack of an obligee’s
signature as an omission that would not affect the validity of the
notice. Under the maxim of expressio unius est exclusio alterius, the
enumeration of an exception in a statute is considered to be an
exclusion of all other exceptions. People ex rel. Sherman v. Cryns,
203 Ill. 2d 264, 286 (2003). This rule “ ‘is based on logic and
common sense,’ as ‘[i]t expresses the learning of common experience
that when people say one thing they do not mean something else.’ ”
Id. (quoting Bridgestone/Firestone, Inc. v. Aldridge, 179 Ill. 2d 141,
152 (1997)).
¶ 18 Accordingly, application of the rule supports the notion that
“shall” is to be given a mandatory interpretation in this case so that
the information in each of the other 11 subsections is absolutely
required to be present in the notice and any absence of the
information required by the other 11 subsections must affect the
validity of the notice of withholding. In sum, there can be a lack of
compliance with the signature requirement, but there must be strict
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compliance with all the other subsections. From our reading of the
statute, there is no contrary legislative intent which would overcome
this rule of construction in this case.
¶ 19 Plaintiff attempts to explain away the special mention in section
20(c)(11) of the omission of the signature as not affecting the validity
the notice, by claiming this exception was placed there to distinguish
it from other statutory situations where a signature would be required,
such as the provision stating that the initial pleading in a dissolution
of marriage action be verified (see 750 ILCS 5/403(a) (West 2010)).
We find plaintiff’s contention to be without merit. There was no
reason for the legislature to note in section 20(c)(11) of the Act that
the signature of the obligor does not affect the validity of the notice
other than to distinguish that item from the other items mentioned,
which are necessary to constitute a valid withholding notice that is
regular on its face.
¶ 20 Plaintiff’s interpretation of the statute is wrong for the additional
reason that it would lead to an absurd result. This court has repeatedly
held that statutes should be construed in a way that avoids absurd or
unjust results. Township of Jubilee v. State of Illinois, 2011 IL
111447, ¶ 36; Roselle Police Pension Board v. Village of Roselle, 232
Ill. 2d 546, 558-59 (2009); Harris v. Manor Healthcare Corp., 111
Ill. 2d 350, 362-63 (1986). Under plaintiff’s interpretation, a payor
would face a catch-22 situation of having to choose between honoring
an irregular notice to avoid penalties under section 35(a) of the Act
or dishonoring an irregular notice so as to keep itself in line with the
immunity from civil liability afforded under section 35(c) of the Act.
Section 35(c) provides that “[a] payor who complies with an income
withholding notice that is regular on its face shall not be subject to
civil liability with respect to any individual, any agency, or any
creditor of the obligor for conduct in compliance with the notice.”
(Emphasis added.) 750 ILCS 28/35(c) (West 2010). Thus, section
35(c) creates a safe harbor for an employer complying with a
withholding notice only to the extent that the notice is regular on its
face, meaning that the notice contains the information required by
section 20(c), which includes the obligor’s social security number.
¶ 21 Plaintiff makes no argument that leaving the social security
number of the obligor out of the notice of withholding can
nonetheless result in the notice being considered “regular on its face.”
But we find that any such argument would be rejected. A social
security number is an essential piece of identifying information,
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especially considering that there may be more than one employee
with the same name working for the employer. It would be hard to
fathom, then, how a notice lacking this essential information could be
considered regular on its face.
¶ 22 There is also an additional reason why a notice lacking the
obligor’s social security number cannot be considered “regular on its
face,” and it has to do with the interplay between the Illinois statute
and federal law. Even though the Illinois Income Withholding for
Support Act does not define the term “regular on its face,” our Act
must be read in conjunction with the federal Child Support
Enforcement Act (the federal Act) (42 U.S.C. § 651 et seq.). Section
20(c)(1) of the Illinois Act provides that “[t]he income withholding
notice shall *** be in the standard format prescribed by the federal
Department of Health and Human Services.” 750 ILCS 28/20(c)(1)
(West 2010). The federal Act in turn provides that in order to receive
federal funds in connection with a state’s enforcement of its child
support statute, a state must enact and have in effect the same
procedures “to improve child support enforcement effectiveness”
which are required by section 666 of the federal Act. 42 U.S.C.
§§ 654(20)(A), 666(a), (b) (2012).
¶ 23 Section 666(b)(6)(A)(i), (ii) of the federal Act provides that the
duty of the employer to withhold is triggered only upon being given
notice of withholding in the “standard format prescribed by the
Secretary,” which is deemed “necessary for the employer to comply
with the withholding order.” 42 U.S.C. § 666(b)(6)(A)(i), (ii). The
federal Act, like the Illinois Act, provides immunity from civil
liability for “[a]n employer who complies with an income
withholding notice that is regular on its face.” 42 U.S.C.
§ 666(b)(6)(A)(i); 750 ILCS 28/35(c) (West 2010). It would be
reasonable then to assume that a withholding notice is considered
“regular on its face” under both Illinois and federal law when it is a
completed document that contains the necessary information required
by the form adopted by the United States Secretary of Health and
Human Services. We have reviewed that form and it unequivocally
requires that the sender of the notice must include in the notice the
“[e]mployee/obligor’s Social Security number or other taxpayer
identification number.”4
4
The Instructions to the Secretary’s income withholding for support
notice state that the notice must be regular on its face and must be rejected
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¶ 24 We thus recognize the absurdity, as well as the incongruence, of
plaintiff’s position of requiring defendant’s compliance with the
withholding notice in the absence of full compliance by plaintiff with
the requirements for a valid notice. As noted, plaintiff’s position
would place employers in the difficult position of deciding whether
to subject themselves to the possibility of civil liability for payment
pursuant to an irregular withholding notice or instead subject
themselves to stiff statutory penalties for noncompliance with an
irregular notice. We believe that if the obligee of a support order
wants to take advantage of the significant penalties that may be
recovered against an employer under the Act, the obligee must
comply fully with the statutory notice requirements so that the notice
is “regular on its face.”
¶ 25 Citing In re Marriage of Gulla, 382 Ill. App. 3d 498 (2008), aff’d,
234 Ill. 2d 414 (2009), plaintiff argues that any confusion that the
employer had about the notice should have been resolved by
defendant contacting the attorney who served the notice. She
maintains that as long as the employer is served with a notice
informing it of where to send the support and how to contact the
attorney serving the notice, the law demands compliance with the
notice. We find that Gulla does not support plaintiff’s position.
¶ 26 In Gulla, there was no claim that the notice did not include the
obligor’s social security number or that it omitted any of the other
mandatory information required by section 20(c) of the Act. In that
case, the obligor, under an order of support that required him to pay
$3,000 per month, worked for the defendant-employer in the State of
Mississippi. A withholding notice was issued in Illinois and sent to
the employer in Mississippi. The notice stated that the defendant
should withhold $3,000 per month from the obligor’s pay. The notice
also specifically explained that if the amount to be withheld exceeded
the amount allowed by the law of its state, the employer should
if it is not. Among the items that the instructions specifically state must be
included in the notice and filled out by the sender is the obligor’s social
security number or other taxpayer identification. See
h t tp : / / www.a c f .h h s .go v / s i t e s / d e f a u l t / f i l e s / o c s e / o mb _ 0 9 7 0 -
0154_instructions.pdf. We also know that the social security number itself
is a necessary piece of information because the Secretary’s standard form
requires a space for it and section 666(b)(6)(A)(ii) states that the form must
“contain only such information as may be necessary for the employer to
comply with the withholding order.” 42 U.S.C. § 666(b)(6)(A)(ii).
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withhold only the amount allowed by its state. Gulla, 382 Ill. App. 3d
at 503. Despite this clear notice, the employer argued that it did not
knowingly violate the duty to withhold under the Illinois Act because
the amount of the support payment listed was more than the obligor
made in a month and Mississippi law prohibited the employer from
paying more than 50% of the obligor’s net income. Gulla, 382 Ill.
App. 3d at 501.
¶ 27 The appellate court in Gulla rejected the employer’s argument. It
held that “[b]ased on the clarity of the notice and [the employer’s]
failure to adhere to its terms, [the employer] cannot rebut the
presumption in the [Act] that it knowingly failed to pay over the
amounts that it was obligated to.” Gulla, 382 Ill. App. 3d at 503.
Gulla basically held that the employer should have paid, as the notice
clearly explained, the amount that was allowed by Mississippi state
law, which was 50% of the obligor’s actual net income. No issue with
respect to the validity of the notice was raised in Gulla. Rather, the
notice was conceded to be valid.
¶ 28 This court affirmed the appellate court’s decision in Gulla. But in
doing so, it was not asked to address whether the employer’s violation
of the Act was “knowing.” Instead, this court was called upon to
address the issue of which state’s law should apply—Illinois or
Mississippi—to govern the penalty for the employer’s knowing
failure to withhold and pay over the required amount of support.
Gulla, 234 Ill. 2d at 425. This court noted that the Illinois statute
provided for a $100 per day penalty for each violation of the Act. Id.
The plaintiff in that case was seeking a judgment of $369,000 based
on the Illinois statute. In contrast, the Mississippi statute capped the
payor’s liability at $500 for willfully failing to withhold, or $1,000
where the failure to comply is the result of collusion between the
employer and employee. Id. This court found that the conflict
between the states’ laws did not invalidate the notice and that the
penalty must be calculated in accord with the payor’s state of
residence. Id. at 428. Thus, Mississippi law governed the penalty to
be applied. Id. The validity of the notice itself was also not before this
court. Instead, the issue was simply what law should control the
withholding and the penalty to be imposed due to the knowing failure
to withhold. Thus, Gulla is not helpful to plaintiff’s position here.
¶ 29 We acknowledge that at the time the notice in this case was
served in November 2009, the Act was silent as to how an invalid
notice such as the one in the present case was to be handled. It is
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indeed a troubling aspect of this case that defendant received the
notice and seemingly ignored it without picking up the phone to
inform the obligee’s attorney that the notice was not regular on its
face and was therefore invalid. However, the statute at the time did
not require the employer to contact the obligee’s attorney to inform
the obligee that its notice was invalid, and we will not read such a
requirement into the statute. See Shields v. Judges’ Retirement System
of Illinois, 204 Ill. 2d 488, 497 (2003) (it is the dominion of the
legislature to enact laws and the courts to construe them, and we can
neither restrict nor enlarge the meaning of an unambiguous statute).
¶ 30 We also note that it is equally troubling that the obligee’s attorney
did not follow up when it soon became clear that the obligee was not
receiving payment. Instead it appears that the obligee’s attorney
waited silently for nearly two years before filing the instant
complaint, alleging the failure to withhold and pay over to the State
Disbursement Unit and seeking stiff statutory penalties.
¶ 31 We conclude that irrespective of the parties’ failure to
communicate, the statute is unambiguous in providing that the lack
of the obligee’s social security number rendered the notice invalid
and that the employer, at the time of the relevant events in this case,
was not burdened with any statutory duty to contact the obligee of the
notice’s invalidity. We note that recent amendments to the statute
seem to address the problem at issue here. We further note, however,
that it is well settled that an amendment of an unambiguous statute
creates a presumption that the amendment has worked a change in the
law, while the amendment of an ambiguous statute creates no such
presumption and might instead indicate that the legislature intended
a clarification of the law. Metropolitan Life Insurance Co. v. Hamer,
2013 IL 114234, ¶ 25; State of Illinois v. Mikusch, 138 Ill. 2d 242,
252 (1990).
¶ 32 The recent amendments to the Act, effective August 17, 2012,
now place the duty on the recipient of support to timely contact the
employer for an explanation as to why support is not being withheld.
750 ILCS 28/45(j) (West 2012). Specifically, a recipient of support
must notify the employer in writing if a support payment is not
received. 750 ILCS 28/45(j) (West 2012). Then, within 14 days of
receiving this written notice of nonreceipt of payment, the payor must
either notify the obligee of the reason for the nonreceipt of payment,
or make the payment with 9% interest. A payor who fails to comply
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with this provision is subject to the $100 per day penalty in section 35
of the Act. 750 ILCS 28/45(j) (West 2012).5
¶ 33 We need not address the question of whether these amendments
could be applied retroactively to the case at bar because we find that
even assuming that the amendments can be applied prospectively only
as plaintiff suggests, they would then merely indicate a presumption
that the legislature has changed the law from not requiring any action
from the employer faced with an invalid notice to now requiring the
employer to respond with its reason for noncompliance, but only
provided that the obligee first gives notice of the non-receipt of
payment.
¶ 34 CONCLUSION
¶ 35 For the reasons set forth above, we hold that plaintiff’s failure to
comply with the mandatory requirement of section 20(c)(9) of the
Act, requiring inclusion of the obligor’s social security number,
rendered the notice invalid. Plaintiff consequently could not maintain
her action seeking the penalties allowed by the Act in the absence of
a conforming withholding notice. Moreover, the statute in effect at
the time relevant here did not place any burden on defendant to
respond to the invalid notice.
¶ 36 We therefore affirm the judgment of the appellate court.
¶ 37 Affirmed.
5
Additionally, the penalties available under the Act are now capped and
the limitations period for bringing an action for penalties has been reduced.
See 750 ILCS 28/35(a) (West 2012) (capping the penalties for failure to
withhold “on one occasion” at $10,000 and requiring an action for failure
to withhold to be brought within one year).
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