Carmichael v. Union Pacific Railroad Company

2018 IL App (1st) 170075FIRST DISTRICT,
SECOND DIVISION
June 26, 2018
No. 1-17-0075
MARY TERRY CARMICHAEL, )
)
Plaintiff, )
Appeal from the
v. )
Circuit Court of
)
Cook County, Illinois,
UNION PACIFIC RAILROAD COMPANY, )
County Department
PROFESSIONAL TRANSPORTATION, INC., )
Chancery Division
d/b/a PTI, and ACE AMERICAN INSURANCE )
COMPANY, )
No. 12 CH 38582
)
Defendants )
Honorable
)
Sophia H. Hall,
(Professional Transportation, Inc., Counter-Plaintiff- )
Judge Presiding.
Appellant; Mary Terry Carmichael and Jesse White, )
Illinois Secretary of State; Counter-Defendants- )
Appellees). )
PRESIDING JUSTICE MASON delivered the judgment of the court, with opinion.
Justice Hyman concurred in the judgment and opinion.
Justice Pucinski specially concurred, with opinion.
OPINION
¶1 Plaintiff Mary Carmichael was injured in a car accident while she was a passenger
in a van owned and operated by defendant Professional Transportation, Inc. (PTI).
Carmichael brought suit against PTI, alleging that PTI failed to obtain the required limits
of uninsured (UM) and underinsured (UIM) coverage under section 8-101(c) of the
Illinois Vehicle Code (Vehicle Code) (625 ILCS 5/8-101(c) (West 2010)). PTI argued as
an affirmative defense that no private right of action could be implied under section 8­
101(c). PTI also filed the counterclaim at issue in this appeal, challenging the
constitutionality of section 8-101(c).
No. 1-17-0075
¶2 The trial court found that a private right of action could be implied under section
8-101(c) and dismissed PTI’s counterclaim, finding that the section survived
constitutional scrutiny. Following Carmichael’s voluntary dismissal of her claim against
PTI, PTI appealed the dismissal of its counterclaim. We find that we do not need to reach
the constitutional issues raised by PTI because section 8-101(c) does not give rise to a
private right of action. Therefore, Carmichael’s complaint against PTI should have been
dismissed. Accordingly, PTI’s counterclaim is moot.
¶3 BACKGROUND
¶4 Carmichael, a Union Pacific Railroad Company (Union Pacific) employee, was
injured when the van in which she was a passenger collided with a vehicle driven by
Dwayne Bell. The six-passenger van was owned and operated by PTI and was used to
transport Union Pacific employees between railroad jobsites pursuant to a service
contract between PTI and Union Pacific. Although Carmichael originally sought recovery
for her injuries in a lawsuit against PTI, Bell, and others, she dismissed PTI after it
became apparent that the accident was caused solely by Bell’s negligence.
¶5 Bell carried the minimum liability coverage required under the Vehicle Code at
the time: $20,000 per person and $40,000 per occurrence. Id. § 7-203. Carmichael settled
with Bell for the $20,000 per-person policy limit. PTI was insured by defendant ACE
American Insurance Company (ACE). The ACE policy provided for $5 million in
liability limits, but provided the minimum UM/UIM coverage of $20,000 per person and
$40,000 per occurrence. Consequently, no additional sums were available to Carmichael
under the ACE policy.
¶6 In October 2012, Carmichael filed this action against PTI, ACE, and Union
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Pacific. As it relates to PTI, Carmichael’s complaint sought a declaration that PTI should
be liable for her damages arising from the accident in excess of $20,000 up to $250,000
based on her allegation that PTI failed to obtain the required limits of UM/UIM coverage
under section 8-101(c) of the Vehicle Code. Id. § 8-101(c). 1 That section, amended in
2006, requires “contract carrier[s] transporting employees in the course of their
employment” in a vehicle “designed to carry 15 or fewer passengers” to obtain UM/UIM
coverage of not less than $250,000 per person. Id. Carmichael alleged that PTI’s six-
person van, used to transport her in the course of her employment, fell into the foregoing
category and that PTI’s violation of this statutory provision gave rise to a private right of
action, entitling her to recover from PTI the difference between her $20,000 settlement
with Bell and the $250,000 UIM limit mandated by the statute.
¶7 PTI raised a number of defenses to Carmichael’s complaint, including that no
private right of action could be implied under section 8-101(c) and that the amendment to
section 8-101(c) violated the special legislation, equal protection, due process, and
commerce clauses of the state and federal constitutions. PTI also filed a counterclaim in
which it challenged the constitutionality of the amendment on the same grounds and
asserted that a related penal statute, section 8-116 of the Vehicle Code (id. § 8-116
(providing that failure to comply with, inter alia, the Vehicle Code’s minimum insurance
requirements constitutes a Class A misdemeanor)), was constitutionally infirm for the
same reasons. PTI joined the State of Illinois as a counterclaim defendant.
¶8 The State moved to dismiss PTI’s counterclaim, arguing both the insufficiency of
1
Carmichael asserted other claims against Union Pacific and ACE. Union Pacific
eventually settled with Carmichael, and the trial court granted ACE’s motion to dismiss; neither
is a party to this appeal.
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No. 1-17-0075
PTI’s allegations under section 2-615 and the merits of PTI’s constitutional challenges
under section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619 (West
2012)). The State pointed out that the proper procedure in the event of a challenge to a
statute on constitutional grounds was to provide notice of the challenge and “afford the
State, political subdivision, agency or officer, as the case may be, the opportunity, but not
the obligation, to intervene in the cause or proceeding for the purpose of defending the
law or regulation challenged.” Ill. S. Ct. R. 19(c) (eff. Sept. 1, 2006). In addition to
defending the amendment to section 8-101(c) against PTI’s constitutional challenges, the
State requested that the court defer addressing such issues until it resolved whether
Carmichael was entitled to maintain a private right of action for violation of the statute’s
provisions.
¶9 PTI later filed a motion to dismiss Carmichael’s complaint, in which it raised the
issue of Carmichael’s right to sue. Although the trial court initially directed the parties to
brief PTI’s motion, the court proceeded to first resolve the constitutional issues. On
January 30, 2015, the court granted the State’s motion to dismiss PTI’s counterclaim,
finding that the amendment survived constitutional scrutiny. 2 The court then addressed
PTI’s motion to dismiss Carmichael’s complaint. On July 24, 2015, the court denied
PTI’s motion to dismiss, finding that Carmichael could pursue a claim for violation of
section 801(c)’s mandated UM/UIM coverage.
¶ 10 After its motion to reconsider was denied and after Carmichael eventually
voluntarily dismissed her remaining claims, PTI timely filed its notice of appeal. 3
2
The court ultimately determined that the proper party to respond was Jesse White,
Illinois Secretary of State, and the caption of the case was amended accordingly.
3
The trial court originally certified issues relating to the constitutionality of the
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Carmichael originally filed a separate notice of appeal from the dismissal of her claim
against ACE, but she dismissed that appeal on August 9, 2017. Carmichael refiled her
complaint for declaratory judgment against PTI, and that case has been stayed pending
the outcome of this appeal.
¶ 11 ANALYSIS
¶ 12 Chapter 8 of the Vehicle Code generally requires persons who operate motor
vehicles and transport passengers for hire to file with the Secretary of State proof of
financial responsibility, which may consist of an insurance policy, a surety bond, or a
certificate of self-insurance. 625 ILCS 5/8-101(a) (West 2010) (rendering unlawful the
operation of a motor vehicle for hire without proof of financial responsibility filed with
the Secretary of State); Id. § 8-102 (proof of financial responsibility may consist of an
insurance policy or other proof of insurance). Before 2006, the Vehicle Code provided
that an insurance policy presented as proof of financial responsibility was required to
have a bodily injury liability limit of at least $250,000 and a property damage limit of
$50,000. Id. § 8-109. Section 8-109 was silent regarding the amount of required
UM/UIM coverage, leaving covered carriers for hire free to purchase the minimum
UM/UIM coverage of $20,000 per person and $40,000 per occurrence.
¶ 13 The 2006 amendment to section 8-101(c), which, as noted, applies only to
contract carriers transporting employees in the course of their employment in a vehicle
designed to carry 15 or fewer passengers, 4 requires such carriers to verify, as part of their
proof of financial responsibility, UM/UIM coverage of “not less than $250,000 per
amendment to section 8-101(c) pursuant to Illinois Supreme Court Rule 308 (eff. Jan. 1, 2016),
but this court denied PTI’s petition for leave to appeal.
4
PTI suggests that this carve-out provision was the result of lobbying efforts by railroad
labor unions in lieu of negotiating the issue through collective bargaining.
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passenger.” Id. § 8-101(c). It is undisputed that PTI did not comply with this provision
and that the ACE policy contained only the minimum UM/UIM limits of coverage.
¶ 14 PTI contends that we need not reach the constitutional issues relating to the 2006
amendment to section 8-101(c) because, as a threshold matter, the trial court erred in
finding that a private right of action exists to enforce that section’s mandatory increased
UM/UIM insurance requirements. See People v. Waid, 221 Ill. 2d 464, 473 (2006) (courts
do not address constitutional issues that are unnecessary for the disposition of a case).
The State agrees that if we accept PTI’s argument and find that Carmichael has no right
to sue for a violation of section 8-101(c), the constitutional issues are moot.
¶ 15 Because the statute on its face does not provide for a private right of action to
enforce violations of its provisions, we must determine whether such a right can be
implied. We review de novo the trial court’s finding that Carmichael was entitled to
maintain a cause of action against PTI for failure to comply with section 8-101(c)’s
increased UM/UIM requirements. See Kagan v. Waldheim Cemetery Co., 2016 IL App
(1st) 131274, ¶¶ 26, 39.
¶ 16 Judicial implication of a private right of action for violation of a statute that does
not expressly provide a private remedy should be undertaken with caution. Metzger v.
DaRosa, 209 Ill. 2d 30, 42-43 (2004); Fisher v. Lexington Health Care, Inc., 188 Ill. 2d
455, 460 (1999). The fact that a statute was enacted to protect a segment of the public
does not, standing alone, indicate that the legislature meant to create a private right of
action to redress a statutory violation. Rhodes v. Mill Race Inn, Inc., 126 Ill. App. 3d
1024, 1027 (1984) (citing Hoover v. May Department Stores Co., 77 Ill. 2d 93, 103-04
(1979)).
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¶ 17 Our supreme court has determined that the following four factors must be
established in order to judicially imply a private right of action:
“ ‘(1) [T]he plaintiff is a member of the class for whose benefit the statute was
enacted; (2) the plaintiff’s injury is one the statute was designed to prevent; (3) a
private right of action is consistent with the underlying purpose of the statute; and
(4) implying a private right of action is necessary to provide an adequate remedy
for violations of the statute.’ ” Metzger, 209 Ill. 2d at 36 (quoting Fisher, 188 Ill.
2d at 460).
PTI does not raise any argument regarding the first three factors, but it argues that the
fourth element of necessity is not met because the statute’s own enforcement mechanisms
provide an adequate remedy for violations. See Abbasi v. Paraskevoulakos, 187 Ill. 2d
386, 393 (1999) (unnecessary to consider first three elements where element of necessity
is not met).
¶ 18 Regarding the element of necessity, courts will only imply a private right of
action under a statute if “ ‘the statute would be ineffective, as a practical matter, unless
such an action were implied.’ ” Metzger, 209 Ill. 2d at 39 (quoting Fisher, 188 Ill. 2d at
464). Metzger and Fisher are instructive on this issue. Metzger, a state police employee,
pursued a claim based on the state police’s violation of the whistleblower protection
provision of the Personnel Code (20 ILCS 415/19c.1 (West 2002)). Metzger, 209 Ill. 2d
at 32. She claimed she experienced adverse disciplinary action in retaliation for reporting
coworkers’ improper conduct. Our supreme court refused to imply a private right of
action, finding that the statute’s own enforcement mechanisms were sufficient to prevent
and punish retaliation against whistleblowers. Id. at 41. The court noted that one who
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violated the Personnel Code could be subject to demotion, suspension, or discharge;
additionally, violation was a Class B misdemeanor punishable by a $1500 fine and
imprisonment for up to six months. Id. Accordingly, Metzger concluded: “We cannot say
that the statutory framework of the Personnel Code is so deficient that it is necessary to
imply a private right of action for employees to effectuate its purpose.” Id. at 42.
¶ 19 Similarly, in Fisher, plaintiffs sought to pursue an action for damages under
section 3-608 of the Nursing Home Care Act (210 ILCS 45/3-608 (West 1996)), which
prohibits a nursing home from retaliating against employees who report improper patient
treatment. Fisher, 188 Ill. 2d at 456. Plaintiffs were nurses who were allegedly harassed
and, in one case, fired for reporting patient neglect. Fisher held that it was not necessary
to imply a private right of action because “the Act contains numerous mechanisms to
encourage the reporting of violations of the Act and to prevent and punish retaliation
against those who make such reports.” Id. at 464. Notably, the statute expressly
authorized nursing home residents to bring suit for violations. Id. at 464-65. Additionally,
a facility that violated the statute’s provisions could be subject to fines and suspension or
revocation of its license. Id. at 465-66. Because the statute “provided a statutory
framework to encourage reporting of violations and to punish retaliation,” Fisher held
that a private right of action for employees was unnecessary to effectuate the statute’s
purpose. Id. at 467.
¶ 20 The rationale of Metzger and Fisher has been adopted in numerous other Illinois
cases that decline to imply a private cause of action from statutes that have robust built-in
enforcement mechanisms. See Kagan, 2016 IL App (1st) 131274, ¶¶ 44, 46 (no implied
private right of action under Cemetery Care Act (760 ILCS 100/1 et seq. (West 2012)),
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which “is replete with sanctions and remedies for violations of its provisions,” including
felony criminal penalties, fines, and license revocation); Davis v. Kewanee Hospital,
2014 IL App (2d) 130304, ¶ 38 (no implied private right of action under confidentiality
provision of Medical Studies Act (735 ILCS 5/8-2101 (West 2008)), where the Act
provides that improper disclosure of privileged information is a Class A misdemeanor);
Rekosh v. Parks, 316 Ill. App. 3d 58, 73-74 (2000) (no implied private right of action
under the Funeral Directors and Embalmers Licensing Code (225 ILCS 41/1-1 et seq.
(West 1998)), which provides penalties for noncompliance including fines and
suspension or revocation of licenses), abrogated on other grounds by Cochran v.
Securitas Security Services USA, Inc., 2017 IL 121200 (regarding scope of recoverable
damages in action for interference with right to possess corpse). But see Pilotto v. Urban
Outfitters West, L.L.C., 2017 IL App (1st) 160844, ¶ 40 (private right of action was
necessary to effectuate the purpose of the Restroom Access Act (410 ILCS 39/1 et seq.
(West 2014)), since the only statutory penalty for violation was a fine not to exceed $100;
the court found this penalty inadequate to make compliance likely, stating that “a retail
store that refuses to comply with the Act would not even notice the impact of the petty
offense penalty”).
¶ 21 As with the foregoing cases, the Vehicle Code contains its own framework for
enforcement. A vehicle operator who violates section 8-101(c) is subject to both criminal
and regulatory penalties. Failure to comply with any of the provisions of Chapter 8 is a
Class A misdemeanor, which allows for a fine up to $2500 and imprisonment for less
than one year. 625 ILCS 5/8-116 (West 2010); 730 ILCS 5/5-4.5-55(a)-(e) (West 2010).
Additionally, if an insurance policy or bond is withdrawn for a vehicle subject to section
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8-101, the Secretary of State “immediately shall suspend” the owner’s registration
certificates, plates, and stickers for that vehicle. 625 ILCS 5/8-113 (West 2010). We
cannot say that these statutory penalties are so deficient that it is necessary to imply a
private right of action to effectuate the statute’s purpose.
¶ 22 Carmichael nevertheless argues that the statutory penalties are inadequate because
they do not compensate her for the damages she suffered—e.g., by offsetting her medical
expenses and lost wages. Our supreme court in Metzger rejected an identical argument.
According to Metzger, plaintiff’s focus on compensation was “inappropriate[ ]” and the
proper consideration was whether the statutory penalties were sufficient to make
compliance with the statute likely. Metzger, 209 Ill. 2d at 41.
¶ 23 Carmichael also argues that the statutory penalties are demonstrably inadequate
because they did not deter PTI from carrying less than the mandated amount of coverage.
But compliance only needs to be “likely” (id.), not certain. Every implied-right-of-action
suit involves a defendant’s alleged failure to comply with the statute at issue. If that were
by itself sufficient to make a private right of action necessary, the element of necessity
would be meaningless. Such is not the case in Illinois, where, as discussed, courts in
numerous cases have found that statutory penalties obviate the need for an implied
private right of action even where those penalties apparently did not impel the defendant
to comply with the statute. See id. at 42; Fisher, 188 Ill. 2d at 467; Kagan, 2016 IL App
(1st) 131274, ¶¶ 44, 46; Davis, 2014 IL App (2d) 130304, ¶ 38; Rekosh, 316 Ill. App. 3d
at 73-74.
¶ 24 Accordingly, we conclude that section 8-101(c) of the Vehicle Code does not
imply a private right of action for passengers in vehicles subject to the provisions of that
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section and PTI’s counterclaim challenging the constitutionality of the amendment to
section 8-101(c) is therefore moot. We affirm the trial court’s January 30, 2015, dismissal
of PTI’s counterclaim, although on grounds different than that relied on by the trial court.
¶ 25 Affirmed.
¶ 26 JUSTICE PUCINSKI, specially concurring.
¶ 27 I write to specially concur with my colleagues because while I believe that their
analysis of the current state of the law in Illinois is correct, I think the law is wrong. The
whole reason for UM and UIM coverage was to take care of expenses of the victims of
vehicle crashes. Punishing a license holder under the Traffic Code does nothing to restore
the victim and leaves, in my opinion, a gaping hole in the system of justice. I would urge
the legislature to look into this matter.
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