Krawczyk v. Livaditis ( 2006 )

FOURTH DIVISION
JUNE 15, 2006
No. 1-04-2228
HILARY KRAWCZYK and ) Appeal from the
ELIZABETH KRAWCZYK, ) Circuit Court of
Plaintiffs-Appellants, ) Cook County.
)
v. )
)
TOM LIVADITIS, )
Defendant-Appellee ) No. 02 M1 101178
)
(BERTON N. RING, P.C., )
Appellant; )
) Honorable
SOULA J. SPYROPOULOS, ) John J. Hynes,
Appellee). ) Judges Presiding.
JUSTICE CAMPBELL delivered the opinion of the court:
Plaintiffs Hilary and Elizabeth Krawczyk, and appellant Berton N. Ring, P.C., appeal an
order of the circuit court of Cook County awarding plaintiffs $4,200 in damages for defendant
Tom Livaditis's breach of a lease and violations of the Chicago Residential Landlord and Tenant
Ordinance (Chicago Municipal Code '' 5-12-080, 5-12-100 (amended November 6, 1991))
(RLTO), arguing that the trial court: (1) improperly merged the damages from the contract claim
with those for multiple violations of section 5-12-080 and a violation of section 5-12-100; (2)
abused its discretion in reducing the attorney fees and costs from $19,624 to $5,601.25; and (3)
abused its discretion in failing to award sanctions under Illinois Supreme Court Rule 137 (155
Ill. 2d R. 137) against Livaditis and his counsel, appellant Soula J. Spyropoulos.
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The issues relating to the improper merger of damages are best understood by briefly
summarizing plaintiffs' seven-count complaint. Count I alleged breach of contract, demanding
the return of the security deposit. Count II alleged that defendant failed to return the security
deposit within the time stated by section 5-12-080 of the RLTO. Count III alleged that
defendant commingled the security deposit with defendant's personal assets in violation of
section 5-12-080 of the RLTO. Count IV alleged that defendant failed to provide the tenant with
a summary of the RLTO, in violation of section 5-12-170 of the RLTO. Count V alleged that
defendant failed to issue a receipt for the security deposit in violation of section 5-12-080 of the
RLTO. Count VI alleged that defendant failed to maintain the leased premises, allowing tenant
to vacate and have the security deposit refunded under section 5-12-110 of the RLTO. Count
VII alleged that defendant violated section 5-12-100 of the RLTO by failing to notify the tenant
of citations from the City of Chicago and a notice from People's Gas that it would discontinue
utility service to the building. The trial court entered an award of $4,200, representing $1,400 on
count VI and merging damages on counts I, II, III, V and VII. The trial court did not enter
judgment on count IV.
The resolution of the damages issues are controlled by the text of the RLTO and this
court's decisions in Plambeck v. Greystone Management & Columbia National Trust Co., 281
Ill. App. 3d 260 (1996), and Szpila v. Burke, 279 Ill. App. 3d 964 (1996). The award in this case
was in the amount of $4,200--which includes the $1,400 security deposit (as damages for the
failure to maintain). The $1,400 is separately marked in the judgment order, so it cannot be said
that it was "merged" into the other damages. The damages for the breach of contract claim also
represent the return of the security deposit and are properly merged with the damages for the
failure to maintain, not with the other claims under the ordinance. However, this error is purely
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technical. The trial court also awarded $2,800--twice the security deposit, which is the measure
of damages under section 5-12-080(f) of the RLTO. As for the remaining $2,800, both
Plambeck and Szpila provide for this singular award in cases of multiple violations of other
portions of section 5-12-080.
Appellants argue that Szpila was overruled by our supreme court in Lawrence v. Regent
Realty Group, Inc., 197 Ill. 2d 1, 12 (2001), but the sole issue in Lawrence was whether the
RLTO required a landlord's violation of the interest payment provisions to have been willful
before the tenant was entitled to recover the damages, attorney fees and costs. Our supreme
court overruled Szpila to the extent that it conflicted with the court's decision, but otherwise
stated that Szpila was "properly distinguished" by this court. Lawrence, 197 Ill. 2d at 12. This
court distinguished Szpila on the grounds that there were multiple violations of the RLTO
alleged in multiple counts and--secondarily--that the plaintiff in Szpila contributed to the
compounding of violations by not acting earlier. Lawrence v. Regent Realty Group, Inc., 307 Ill.
App. 3d 155, 159 (1999). Thus, the supreme court approved treating multiple violation cases
differently.
Appellants also argue that People ex rel. Department of Public Health v. Wiley, 218 Ill.
2d 207 (2006), and City of Chicago v. Elevated Properties, L.L.C., 361 Ill. App. 3d 824 (2005),
are persuasive authority for imposing a separate penalty for each violation of the RLTO. Wiley
involved the Family Practice Residency Act (110 ILCS 935/1 et seq. (West 2002)), which
created medical scholarship contracts that require the recipient to perform a term of service in
designated shortage areas after becoming licensed to practice medicine. Section 10 of the statute
provides that if a recipient fails to perform, the recipient "shall pay to the Department a sum
equal to 3 times the amount of the annual scholarship grant for each year the recipient fails to
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fulfill such obligation." 110 ILCS 935/10 (West 2002). This language expressly refers to
penalties for "each year" of an annual scholarship. In contrast, the payment of a security deposit
is a singular event and the RLTO does not specify double damages for "each" violation of 5-12-
080. Similarly, in Elevated Properties, the vacant building registration ordinance specifically
provided that every day a violation continued constituted a distinct and separate offense, with a
mandatory fine for each offense. Wiley and Elevated Properties demonstrate that the City of
Chicago could have employed such language, but chose not to do so.
However, section 5-12-080(f) provides that it "does not preclude the tenant from
recovering other damages to which he may be entitled under this chapter." Chicago Municipal
Code '' 5-12-080(f) (amended November 6, 1991). Accordingly, plaintiffs are correct that the
trial court erred in failing to award separate damages for the violation of section 5-12-100
(requiring disclosure to tenants regarding legal proceedings, cutoff of utilities), as the ordinance
specifically states that such violations shall entitle the tenant to remedies under section 5-12-090.
In short, the trial court did not err in its calculation of damages for the breach of contract
claim or the violations of section 5-12-080 of the RLTO. The trial court did err in failing to
assess damages under section 5-12-090 for the violation of section 5-12-100. That error may
have affected the amount of attorney fees and costs awarded, as any such calculation includes a
consideration of the results achieved for the client. Kaiser v. MEPC American Properties, Inc.,
164 Ill. App. 3d 978, 984 (1987). Thus, the trial court must reconsider these issues on remand.
Finally, appellants argue that the trial court erred in refusing to impose Rule 137
sanctions against defendant and defense counsel. Pursuant to Rule 137, the trial court may
impose sanctions against a party or his counsel for filing a motion or pleading that is not well
grounded in fact, not supported by existing law, or lacks a good-faith basis for modification,
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reversal, or extension of the law, or is interposed for any improper purpose. Peterson v.
Randhava, 313 Ill. App. 3d 1, 6-7 (2000). As the Peterson court explained, "[t]he purpose of
Rule 137 is to prevent the filing of frivolous and false lawsuits." Peterson, 313 Ill. App. 3d at 7.
Yet, "the rule is not intended to penalize litigants and their attorneys merely because they were
zealous, yet unsuccessful." Peterson, 313 Ill. App. 3d at 7. Because the rule is penal in nature, it
must be strictly construed. Peterson, 313 Ill. App. 3d at 7. When called upon to determine
whether sanctions were appropriate in a given case, we employ an abuse of discretion standard
of review. Baker v. Daniel S. Berger, Ltd., 323 Ill. App. 3d 956, 963 (2001). A trial court
abuses its discretion when no reasonable person could take the view it adopted. Technology
Innovation Center, Inc. v. Advanced Multiuser Technologies Corp., 315 Ill. App. 3d 238, 244
(2000).
In this case, the trial court found that this was one of many cases where the lawyers
seemed incapable of getting along, but ultimately concluded that under the circumstances,
sanctions were unwarranted. Following a review of the record, we cannot say that no reasonable
person would take this view. Accordingly, the trial court did not abuse its discretion in denying
plaintiffs' motion for sanctions.
For all of the aforementioned reasons, this case is reversed and remanded for a
recalculation of damages, fees and costs consistent with this opinion.
Affirmed in part and reversed in part; cause remanded.
QUINN, P.J., and MURPHY, J,, concur.
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