{ "id": 3142275, "name": "TELEGRAPH SAVINGS & LOAN ASSOCIATION OF CHICAGO et al., Appellees, v. WILLIAM J. SCHILLING, Indiv. and as Commissioner of Savings and Loan Associations, Appellant", "name_abbreviation": "Telegraph Savings & Loan Ass'n v. Schilling", "decision_date": "1984-11-30", "docket_number": "No. 59149", "first_page": "166", "last_page": "186", "citations": [ { "type": "official", "cite": "105 Ill. 2d 166" } ], "court": { "name_abbreviation": "Ill.", "id": 8772, "name": "Illinois Supreme Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "89 Ill. App. 3d 874", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5541658 ], "pin_cites": [ { "page": "879" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/89/0874-01" ] }, { "cite": "564 F. Supp. 862", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 136043 ], "pin_cites": [ { "page": "880" } ], "opinion_index": 0, "case_paths": [ "/f-supp/564/0862-01" ] }, { "cite": "4 Ill. 2d 273", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2702038 ], "pin_cites": [ { "page": "289-90" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/4/0273-01" ] }, { "cite": "260 U.S. 340", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11925976 ], "pin_cites": [ { "page": "342" } ], "opinion_index": 0, "case_paths": [ "/us/260/0340-01" ] }, { "cite": "101 Ill. 2d 246", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3160495 ], "pin_cites": [ { "page": "252" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/101/0246-01" ] }, { "cite": "564 F. Supp. 880", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 136339 ], "opinion_index": 0, "case_paths": [ "/f-supp/564/0880-01" ] }, { "cite": "18 Ill. 2d 572", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5327668 ], "pin_cites": [ { "page": "586" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/18/0572-01" ] }, { "cite": "547 F. Supp. 988", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 5684042 ], "year": 1983, "opinion_index": 0, "case_paths": [ "/f-supp/547/0988-01" ] }, { "cite": "531 F. Supp. 251", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 3397690 ], "year": 1982, "opinion_index": 0, "case_paths": [ "/f-supp/531/0251-01" ] }, { "cite": "703 F.2d 1019", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1851656 ], "weight": 4, "year": 1980, "pin_cites": [ { "page": "1029-30" } ], "opinion_index": 0, "case_paths": [ "/f2d/703/1019-01" ] }, { "cite": "115 Ill. App. 3d 331", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3557570 ], "weight": 4, "pin_cites": [ { "page": "340" }, { "page": "340" }, { "page": "341" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/115/0331-01" ] }, { "cite": "56 Ill. 2d 56", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5405525 ], "year": 1972, "pin_cites": [ { "page": "64" } ], "opinion_index": 1, "case_paths": [ "/ill-2d/56/0056-01" ] }, { "cite": "564 F. Supp. 880", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 136339 ], "pin_cites": [ { "page": "888-89" } ], "opinion_index": 1, "case_paths": [ "/f-supp/564/0880-01" ] }, { "cite": "703 F.2d 1019", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1851656 ], "year": 1980, "pin_cites": [ { "page": "1025" } ], "opinion_index": 1, "case_paths": [ "/f2d/703/1019-01" ] }, { "cite": "101 Ill. 2d 246", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3160495 ], "pin_cites": [ { "page": "252" } ], "opinion_index": 2, "case_paths": [ "/ill-2d/101/0246-01" ] } ], "analysis": { "cardinality": 1080, "char_count": 31546, "ocr_confidence": 0.728, "pagerank": { "raw": 1.5221187660466862e-07, "percentile": 0.6694683744110178 }, "sha256": "03814ec0bf5d2d20ecd9c716fbfd4883e53b58b90aa5065d747c746f2a685dcf", "simhash": "1:8a0efc923018f454", "word_count": 5071 }, "last_updated": "2023-07-14T18:22:55.614984+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "TELEGRAPH SAVINGS & LOAN ASSOCIATION OF CHICAGO et al., Appellees, v. WILLIAM J. SCHILLING, Indiv. and as Commissioner of Savings and Loan Associations, Appellant." ], "opinions": [ { "text": "JUSTICE MORAN\ndelivered the opinion of the court:\nPlaintiffs, Telegraph Savings and Loan Association of Chicago and the officers and directors thereof (collectively referred to as Telegraph), filed a complaint in the circuit court of Cook County against defendant, William J. Schilling, individually and as Commissioner of Savings and Loan Associations for the State of Illinois (Commissioner). Telegraph challenged the Commissioner\u2019s closing of the Association without advance written notice or a valid finding of an \u201cemergency\u201d situation which would excuse the advance-written-notice requirement (Ill. Rev. Stat. 1979, ch. 32, par. 848, now Ill. Rev. Stat. 1983, ch. 17, par. 3191). The Commissioner filed a motion to dismiss the action, which was granted. Telegraph appealed from the order of the circuit court, which dismissed the action against the Commissioner with prejudice. The appellate court reversed the dismissal order and remanded for further proceedings. (115 Ill. App. 3d 331.) We allowed the Commissioner\u2019s petition for leave to appeal (87 Ill. 2d R. 315(a)).\nThe central issue raised on appeal is whether Telegraph is entitled to a State court determination of the State-law \u201cemergency\u201d issue raised in its complaint.\nThe general background information necessary for an understanding of the issue is disclosed in the Seventh Circuit Court of Appeals opinion, Telegraph Savings & Loan Association v. Schilling (7th Cir. 1983), 703 F.2d 1019. In the late 1970\u2019s, Telegraph, an Illinois chartered savings and loan association, failed to meet the reserve and net worth m\u00ednimums required by 12 C.F.R. section 563.13 (1980). As such, State and Federal officials responsible for the regulation of savings and loan associations met to analyze the source of Telegraph\u2019s financial difficulties. It was concluded that undercapitalization was responsible for Telegraph\u2019s financial decline. At this time, the Commissioner indicated that the State would be forced to assume custody if the situation were not remedied.\nTelegraph\u2019s financial condition was the subject of subsequent meetings held in 1979 and 1980. A take-over plan was devised which involved the joint efforts of the Commissioner, the Federal Home Loan Bank Board (FHLBB), and the Federal Savings and Loan Insurance Corporation (FSLIC).\nThe record reveals that on May 22, 1980, the Commissioner took custody of Telegraph pursuant to section 7 \u2014 8 of the Illinois Savings and Loan Act (Act) (Ill. Rev. Stat. 1979, ch. 32, par. 848). Section 7 \u2014 8(e) provides in relevant part:\n\u201cUnless the Commissioner finds that an emergency exists which may result in loss to members or creditors and requires that he take custody immediately, he first shall give written notice to the directors, trustees, or liquidators specifying the conditions criticized and state a reasonable time within which correction may be made.\u201d\nThe Commissioner did not give advance written notice of intent to take custody. Rather, he appeared at Telegraph\u2019s offices on the day of the seizure with a document entitled \u201cNOTICE OF TAKING CUSTODY OF TELEGRAPH SAVINGS AND LOAN ASSOCIATION OF CHICAGO.\u201d This notice states that the Commissioner had made a finding that the withdrawable and permanent reserve capital of Telegraph were impaired, creating an emergency situation and necessitating immediate custody by the Commissioner.\nAlmost immediately after the Commissioner presented Telegraph\u2019s president with the notice, the FHLBB appointed the FSLIC as receiver of Telegraph, pursuant to 12 U.S.C. section 1729(e)(2) (1976). The FSLIC immediately transferred Telegraph\u2019s assets to First Federal Savings and Loan Association under a purchase and assumption agreement.\nIn the instant appeal, the Commissioner has raised several issues for review by this court. Before we reach those issues, we must address an issue raised by Telegraph. It argues that this court lacks jurisdiction because the Commissioner failed to file his petition for leave to appeal within 35 days after the entry of the judgment appealed from, as mandated by Supreme Court Rule 315(b) (87 Ill. 2d R. 315(b)). Rule 315(b) provides, on motion, for an extension of time for petitioning for leave to appeal. While the rule expressly states that \u201csuch motions are not favored and will be allowed only in the most extreme and compelling circumstances,\u201d this court, nonetheless, granted the Commissioner's motion based on the circumstances set forth therein. Accordingly, Telegraph\u2019s argument is without merit.\nBecause we find that this court does have jurisdiction, we turn to the arguments raised by the Commissioner. Initially he contends that Telegraph lacks capacity to maintain this action. In support of this contention he relies on 12 C.F.R. section 569a.4 (1980). Pursuant to this Federal regulation, the FSLIC, as receiver, succeeds to \u201call the rights, titles, powers and privileges of the insured institution * * * [as well as those of] its officers and directors ***.\u201d Further, under the regulation, the officers and directors of the seized institution \u201cshall not thereafter have or exercise any such rights, powers, or privileges or act in connection with any asset or property of any nature of the institution in receivership.\u201d As such, it is the Commissioner\u2019s position that Telegraph is precluded from prosecuting this action because \u201call property rights, including choses in action have been vested in the FSLIC.\u201d\nThe Commissioner cites three Federal cases which, he contends, adopt this position. (First Savings & Loan Association v. First Federal Savings & Loan Association (D. Hawaii 1981), 531 F. Supp. 251; First Savings & Loan Association v. First Federal Savings & Loan Association (D. Hawaii 1982), 547 F. Supp. 988; Manning Savings & Loan Association v. Federal Savings & Loan Insurance Corp. (N.D. Ill. Sept. 14, 1983), No. 83 \u2014 C\u2014 757.) The Commissioner\u2019s reliance on these cases is misplaced. It is true that these cases expressly recognize that the FSLIC acquires all powers necessary to administer the operations of a seized institution pursuant to the regulations (12 C.F.R. sec. 569a.4 (1980)) promulgated under 12 U.S.C. section 1729(d) (1976). This includes the power to represent the institution in any legal action. (12 C.F.R. sec. 569a.6(a)(2-3) (1980).) At the same time, however, these cases acknowledge the limited right of an association to challenge the appointment of a receiver pursuant to 12 U.S.C. section 1464(d)(6)(A) (1976). The Illinois Savings and Loan Act contains similar provisions. Thus, pursuant to section 7 \u2014 10 of the Act, the Commissioner, if he takes custody of an association, succeeds to \u201call powers necessary to accomplish the purposes of custody, including (but not limited to) the powers, privileges and authority previously vested in the officers, directors, liquidators or trustees ***.\u201d (Ill. Rev. Stat. 1979, ch. 32, par. 850, now Ill. Rev. Stat. 1983, ch. 17, par. 3193.) In a provision analogous to 12 U.S.C. section 1464(d)(6)(A) (1976), section 7 \u2014 12 of the Act expressly authorizes a challenge to the Commissioner\u2019s custodial action. Section 7 \u2014 12 provides:\n\u201cImmediately upon taking custody of an association or trust, the Commissioner shall mail a written notice thereof to the president or secretary and not less than 2 directors of such association, or to 2 or more of the trustees of any trust, or 2 or more of the liquidators of an association in liquidation. If the contention is made that the Commissioner has no legal grounds for taking custody of the association or trust, the directors or officers of the association or the trustees or liquidators thereof, as the case may be, at any time within 10 days after the mailing of such notice, or within such further periods of time as the Commissioner may extend, but not to exceed an additional 60 days, may file a complaint in the Circuit Court of Sangamon County, Illinois or in the Circuit Court of the county in which the association is located, to enjoin further custody. The court thereupon shall cite the Commissioner to show cause why further custody should not be enjoined. If upon a hearing thereon, the court finds that such grounds did not or do not then exist, it may enter an appropriate order in accordance with the findings of fact, or an order enjoining the Commissioner or any appointees acting under his direction from further custody.\u201d Ill. Rev. Stat. 1979, ch. 32, par. 852, now Ill. Rev. Stat. 1983, ch. 17, par. 3195.\nThe powers granted to the Federal receiver, pursuant to the Federal regulation, and the Commissioner pursuant to section 7 \u2014 10 of the Act are merely the administrative powers necessary for the receiver to conduct the business operations of the seized institution. The bestowal of such powers does not deprive the seized institution of its statutory right to challenge the Commissioner\u2019s original take-over. The clear language of the statute indicates otherwise. Thus, by bringing its State action pursuant to section 7 \u2014 12 of the Act, Telegraph was merely exercising its statutory right to judicial review of the Commissioner\u2019s actions. Furthermore, as Telegraph correctly observes, this court has previously stated \u201cthat if the legislature did not accord the right to obtain judicial review and control of the [Commissioner\u2019s] conduct the Savings and Loan Act would be constitutionally suspect. [Citations.]\u201d Mensik v. Smith (1960), 18 Ill. 2d 572, 586.\nThe Commissioner further argues that the resolution of Telegraph\u2019s claims in Federal court, under 12 U.S.C. section 1464(d)(6)(A) (1976), operates as a bar to the State action. Applying the doctrine of collateral estoppel, the Commissioner argues that the findings of fact made by the Federal court, pursuant to Telegraph\u2019s attempt to remove the FSLIC as receiver, demonstrate that his actions were reasonable. As such, Telegraph is estopped from attacking that conduct. The resolution of this argument necessitates a recitation of the chronological course this controversy has taken in both State and Federal courts.\nOn June 2, 1980, Telegraph filed lawsuits in the circuit court of Cook County (No. 80 \u2014 CH\u20143860) and the United States District Court for the Northern District of Illinois (No. 80 \u2014 C\u20142792) (original Federal action). The original Federal action involved a determination of whether the statutory requirements for the appointment of an FSLIC receivership had been satisfied. (12 U.S.C. sec. 1729(c)(2) (1976).) In both the State and Federal actions, Telegraph sued the Commissioner, as well as the FHLBB and the FSLIC. Upon petition of the Federal defendants, the State action was removed to Federal court (No. 80 \u2014 C\u20142782) (removed Federal action). The removed Federal action was dismissed, on June 12, 1980, for lack of derivative jurisdiction. The court refused to remand the State-law claim against the Commissioner. It found that the State \u201cemergency\u201d issue was \u201cpart and parcel\u201d of the claim against the FSLIC and FHLBB, over which the State court had no jurisdiction. The same day that the removed Federal action was dismissed, therefore, Telegraph filed a new State court action (No. 80 \u2014 CH\u20144170). This new State action, which is the subject of the instant appeal, named only the Commissioner as a defendant, bringing the action pursuant to section 7 \u2014 12 of the Act (Ill. Rev. Stat. 1979, ch. 32, par. 852).\nTelegraph, by its complaint filed in State court on June 12, 1980, contended that \u201cno emergency existed with respect to [the Association] and further the Commissioner did not purport to make a valid finding that such an emergency existed.\u201d As such, Telegraph maintained that the Commissioner acted in abuse of his discretion by taking custody of the Association without advance written notice. (Ill. Rev. Stat. 1979, ch. 32, par. 848.) Accordingly, injunctive and declaratory relief were sought.\nThe Commissioner\u2019s motion to dismiss was granted by the trial court. The transcript from the hearing on that motion indicates that the trial court, relying on the June 12 dismissal of the removed Federal action, found that the Federal court had assumed jurisdiction on the merits of the case. In addition, the court concluded that injunctive relief was no longer possible under the circumstances of the case. Finally, it indicated that if an action were sustained in the State court, the action would be in damages. The judge, however, declined to grant Telegraph\u2019s oral motion to transfer the complaint to the law division.\nAt this point, therefore, Telegraph was limited to its original Federal action (No. 80 \u2014 C\u20142792) wherein State and Federal statutory violations were asserted. This action was ultimately resolved in favor of the Federal defendants. The Federal court, however, refused to consider the State-law claim. In a February 19, 1982, order for a status hearing, the district court indicated that it was of the opinion that it should refuse to exercise pendent jurisdiction over the State-law claims since they involved \u201cdifficult questions of state law which are of first impression.\u201d (Telegraph Savings & Loan Association v. Federal Savings & Loan Insurance Corp. (N.D. Ill. 1982), 564 F. Supp. 880 (order for status hearing).) Further, in an order dated March 18, 1982, the district court found that the State counts involve \u201cnovel questions of state statutory construction which are neither addressed nor resolved\u201d by the findings of the district court on the other counts. (Telegraph Savings & Loan Association v. Federal Savings & Loan Insurance Corp. (N.D. Ill. March 18, 1982), No. 80 \u2014 C\u20142791.) As such, it dismissed the State-law issues without prejudice. Finally, in the Seventh Circuit opinion the court concluded:\n\u201cThe fact that [the district court] dismissed the separately pleaded state law counts without prejudice merely indicates that these claims are independent of Telegraph\u2019s challenge to a federal receivership under federal law. The dismissal cannot be read as a ruling on the validity of the state claims.\u201d Telegraph Savings & Loan Association v. Schilling (7th Cir. 1983), 703 F.2d 1019, 1029-30.\nBecause the Federal court refused to assert pendent jurisdiction over the counts based entirely on State law, and dismissed the claims without prejudice for lack of jurisdiction, the appellate court, in the instant case, determined that Telegraph was entitled to a State-court adjudication of those issues. Accordingly it reversed the circuit court\u2019s dismissal of the action, stating:\n\u201cWhatever the binding effect of the opinion of the Court of Appeals [Seventh Circuit] may be on certain facets of the litigation, it does not necessarily foreclose a finding by the State court of a lack of an emergency. *** Telegraph has a right to have its State law claims resolved in a State court.\u201d 115 Ill. App. 3d 331, 340.\nWe agree.\nThe doctrine of collateral estoppel has been defined by this court as applying \u201cwhen a party or someone in privity with a party participates in two separate and consecutive cases arising on different causes of action and some controlling fact or question material to the determination of both causes has been adjudicated against that party in the former suit by a court of competent jurisdiction. [Citation.] The adjudication of the fact or question \u2018in the first cause will, if properly presented be conclusive of the same question in the later suit\u2019 [citation], but \u2018the judgment in the first suit operates as an estoppel only as to the point or question actually litigated and determined and not as to other matters which might have been litigated and determined.\u2019 \u201d (Emphasis in original.) (Housing Authority v. Young Men\u2019s Christian Association (1984), 101 Ill. 2d 246, 252.) When determining whether the doctrine of collateral estoppel precludes the resolution of the State-law claim, therefore, the only relevant inquiry is whether the Federal court decided that an emergency existed. We need not speculate as to whether the factual inquiry regarding the State \u201cemergency\u201d issue was ever resolved by the Federal courts. The Federal district court, as well as the Seventh Circuit court, expressly recognized that the State-law claims were distinct from Telegraph\u2019s challenge of the Federal receivership and declined to address the State claims. It follows, therefore, that the doctrine of collateral estoppel will not act as a bar to a State court adjudication of the emergency issue.\nIn the third issue raised by the Commissioner, he maintains that Telegraph\u2019s complaint fails to state a cause of action under section 7 \u2014 12 of the Act (Ill. Rev. Stat. 1979, ch. 32, par. 852). The complaint filed on June 2, 1980, named only Telegraph, the association, as plaintiff. The statute authorizes a suit to be filed against the Commissioner by \u201cthe directors or officers of the association or the trustees or liquidators thereof ***.\u201d As such, the Commissioner maintains that Telegraph lacks standing to sue pursuant to section 7 \u2014 12 of the Act. While the suit filed on June 12, 1980, named the officers and directors of Telegraph, as well as the association, as party plaintiffs, this action was filed past the 10-day period (custody occurred on May 22, 1980) mandated by section 7 \u2014 12 of the Act. Thus, the Commissioner contends, the officers and directors, the only proper party plaintiffs, failed to timely seek relief. We do not agree.\nTelegraph\u2019s complaint, filed June 2, 1980 (No. 80\u2014 CH \u2014 3860), while brought only in the name of the Association, was filed within the 10-day period required by section 7 \u2014 12 of the Act. When this action was removed to Federal district court (No. 80 \u2014 C\u20142782), through no fault of Telegraph but upon petition of the Federal defendants, the time for filing an action challenging the Commissioner\u2019s actions was tolled. Thus, when Telegraph filed the instant State action (No. 80 \u2014 CH\u20144170) on June 12, 1980, the very day the removed Federal action was dismissed, it was as if Telegraph was filing on the 10th day following the take-over.\nFurther the 10-day limitation period mandated by section 7 \u2014 12 should be analyzed in view of its purpose. As succinctly stated in a 1954 decision of this court:\n\u201cThe basic policy of [statutes of limitation] is to afford a defendant a fair opportunity to investigate the circumstances upon which liability against him is predicated while the facts are accessible. *** As observed by Mr. Justice Holmes in New York Central Railroad v. Kinney, 260 U.S. 340, 342, \u2018Of course an argument can be made on the other side, but when a defendant has had notice from the beginning that the plaintiff sets up and is trying to enforce a claim against it because of specified conduct, the reasons for the statute of limitations do not exist, and we are of opinion that a liberal rule should be applied.\u2019 \u201d (Geneva Construction Co. v. Martin Transfer & Storage Co. (1954), 4 Ill. 2d 273, 289-90.)\nUnder the circumstances of the instant case, we find that the objective of the 10-day limitation period of section 7 \u2014 12 of the Act has been fully served.\nFinally, the Commissioner argues that the appellate court erred in finding that the issue of damages was not waived by Telegraph. While conceding that injunctive relief was not viable, because the Commissioner no longer had custody of Telegraph, the appellate court concluded that Telegraph was not necessarily barred from relief. Section 7 \u2014 12 of the Act, in addition to providing for injunctive relief, provides in relevant part: \u201cIf upon a hearing thereon, the court finds that such grounds [for taking custody] did not or do not then exist, it may enter an appropriate order ***.\u201d (Ill. Rev. Stat. 1979, ch. 32, par. 852.) The court found that this provision \u201cmay give a right to damages.\u201d (115 Ill. App. 3d 331, 340.) The court cited the Seventh Circuit opinion, Telegraph Savings & Loan Association v. Schilling (7th Cir. 1983), 703 F.2d 1019, which also recognized the possible right to damages. In a footnote in the Seventh Circuit opinion, the court observed:\n\u201cAlthough it held that the federal appointment could not be challenged under state law, the district court [564 F. Supp. 862, 880] noted that if either the state or federal authorities violated state law, Telegraph may have an action for damages under Illinois law, Ill. Rev. Stat. ch. 32, sec. 852, or under federal law, 42 U.S.C. sec. 1983.\u201d 703 F.2d 1019, 1024 n.4.\nFurther, the appellate court, in the instant case, held that Telegraph had not waived its right to such relief because it failed to specifically seek damages or submit a proposed amendment. Telegraph made two general requests to amend its complaint, in a reply to the Commissioner\u2019s brief in support of his motion to dismiss and orally during the hearing on the motion to dismiss. During that hearing, the court noted \u201cthat if an action were sustained in the State Court the action would be in damages.\u201d In addition, the court stated \u201cthat if the suit was sustainable in the Circuit Court at the present time it would be a matter for the Law Division rather than for the Chancery Division.\u201d Nevertheless, the court denied Telegraph\u2019s oral motion to transfer the action to the law division and granted the motion to dismiss.\nSection 34 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 34) provides that \u201cthe prayer for relief does not limit the relief obtainable\u201d except in the case of default judgments and cases involving prejudice to the adverse party by reason of surprise. \u201c \u2018Courts may disregard labels, and may grant relief to which a plaintiff is entitled upon the evidence.\u2019 \u201d (Nugent v. Collins (1980), 89 Ill. App. 3d 874, 879.) It would seem that the same discretion would be allowed to a reviewing court when reversing and remanding a cause previously dismissed. Based on the pleadings and in light of Telegraph\u2019s two requests to amend as well as the judicial commentary on the possible right to damages, we do not find that the Commissioner will be prejudiced by allowing Telegraph to amend its complaint on remand. Accordingly, we find that the appellate court did not err in affording Telegraph \u201cthe opportunity to move to amend [on remand] to specifically seek damages and to transfer the cause to the law division.\u201d 115 Ill. App. 3d 331, 341.\nFor the reasons stated herein, the judgment of the appellate court reversing the dismissal of the circuit court and remanding for further proceedings, is affirmed.\nJudgment affirmed.", "type": "majority", "author": "JUSTICE MORAN" }, { "text": "JUSTICE UNDERWOOD,\ndissenting:\nI do not share my colleagues\u2019 opinion that the doctrine of collateral estoppel is inapplicable here, nor do I believe that an action for damages is permissible in these circumstances.\nThe majority cites section 7 \u2014 12 of the Illinois Savings and Loan Act (Ill. Rev. Stat. 1979, ch. 32, par. 852, now Ill. Rev. Stat. 1983, ch. 17, par. 3195) to support its conclusion that Telegraph could proceed with a State court action for damages. However, that section, which is entitled in part \u201cNotice of Custody \u2014 Action to Enjoin\u201d (emphasis added), provides:\n\u201c*** If the contention is made that the Commissioner has no legal grounds for taking custody of the association or trust, the directors or officers of the association or the trustees *** may file a complaint * * * to enjoin further custody. The court thereupon shall cite the Commissioner to show cause why further custody should not be enjoined. If upon a hearing thereon, the court finds that such grounds did not or do not then exist, it may enter an appropriate order in accordance with the findings of fact ***.\u201d (Emphasis added.)\nIt seems to me that this provision unambiguously limits the plaintiff association to injunctive relief. There is simply nothing to suggest that damages are recoverable. The term \u201cappropriate order,\u201d emphasized by the majority, obviously refers to the provisions of an order granting or denying the injunction, as that is the only purpose of the hearing. Too, if the General Assembly had intended to provide for damages in these circumstances, it seems likely that it would have explicitly stated so, for \u201c[t]he body of the statute cannot encompass a broader subject than is stated in the title.\u201d People v. Tibbitts (1973), 56 Ill. 2d 56, 64; 1A Sutherland, Statutory Construction sec. 18.01 et seq. (4th ed. 1972).\nHowever, even if I were to concede that damages are recoverable under section 7 \u2014 12, the Federal court proceedings involved here would, in my judgment, bar Telegraph\u2019s State court action on collateral estoppel grounds. As the majority points out, to prevail in its suit for damages Telegraph must prove that no \u201cemergency\u201d existed which could have justified the Commissioner\u2019s taking custody of the institution without written notice. Although the Illinois Savings and Loan Act does not specify what constitutes an \u201cemergency,\u201d the Federal district court found that Telegraph was on the brink of financial collapse and that the take-over was imperative to safeguard the depositors\u2019 funds. The court noted:\n\u201cFrom July 1, 1979, to April 30, 1980, Telegraph\u2019s book net worth steadily declined from nearly $5 million to $450,000.00. The operational losses for April 1980 alone exceeded $734,000.00. On May 19, Telegraph\u2019s comptroller made the following projection:\n\u2018Based upon my review of the books and records of Telegraph as of May 19, 1980 and taking into consideration my knowledge of the financial circumstances of Telegraph, I estimate that for the period May 1 through 19, 1980, Telegraph had lost $591,778.29 and I projected that for the entire month of May, Telegraph would lose $983,147.86.\u2019 [citation.] On the basis of the projections of Telegraph\u2019s own comptroller, Telegraph had a negative book net worth of approximately $142,000.00 on May 19 and of approximately $240,000.00 on May 22.\u201d (Telegraph Savings & Loan Association v. Federal Savings & Loan Insurance Corp. (N.D. Ill. 1982), 564 F. Supp. 880, 888-89.)\nIn addition, the Seventh Circuit Court of Appeals observed that \u201c[t]he evidence overwhelmingly establishes that Telegraph was in precarious financial condition and was continuing to decline.\u201d Telegraph Savings & Loan Association v. Schilling (7th Cir. 1983), 703 F.2d 1019, 1025.\nCuriously, the majority apparently does not believe these findings would be binding or relevant in a State court proceeding aimed at determining Telegraph\u2019s financial status. Of course, to actually recover damages Telegraph will also have to show that it has suffered some loss that can be monetarily compensated. Should our courts also disregard the Federal findings on that issue? I think it is abundantly clear that any State court proceeding will involve precisely the same factual issues that have already been resolved by the Federal courts. In fact, a more appropriate case for application of the collateral estoppel doctrine is difficult to imagine.\nI would accordingly reverse the judgment of the appellate court and affirm the judgment of the circuit court of Cook County.\nRYAN, C.J., and SIMON, J., join in this dissent.", "type": "dissent", "author": "JUSTICE UNDERWOOD," }, { "text": "JUSTICE SIMON,\nalso dissenting:\nWhile I join Justice Underwood\u2019s disagreement with the majority\u2019s decision to allow an additional trial for Telegraph, I would like to point to other areas of dissatisfaction I have with the majority opinion. First, I agree with Justice Underwood\u2019s analysis of the collateral-estoppel issue, which requires a complete bar of a trial at the State level. Even if the majority view that the dismissal of the State-law counts indicates that these are claims independent of the Federal action is accepted, I do not believe the circuit court has a free hand at this new trial to allow adjudication of all facts relating to whether an emergency situation existed at the time of the takeover. Collateral estoppel acts as a bar to relitigation of \u201ccontrolling fact[s] or question[s] material to determination\u201d of the causes of action brought by the same party. (Slip op. at 7, citing Housing Authority v. Young Men\u2019s Christian Association (1984), 101 Ill. 2d 246, 252.) It is clear to me that the factual determinations of the Federal courts concerning the financial stability of Telegraph at the time of the takeover cannot be relitigated, even accepting the majority\u2019s allowance of another trial which deals exclusively with the emergency issue. Instead, all factual issues relevant to the emergency question may have already been established at the trial in the United States district court. All that would be left for the circuit court, if anything, would be the legal judgment of whether these facts constituted an emergency situation under the statute. While I feel an emergency existed, I do not believe the majority opinion allows for anything more than this limited inquiry.\nSecond, I agree with Justice Underwood\u2019s judgment that no damages are contemplated by section 7 \u2014 12 of the Illinois Savings and Loan Act (Ill. Rev. Stat. 1979, ch. 32, par. 852, now Ill. Rev. Stat. 1983, ch. 17, par. 3195). I also believe that this question has been left open by the majority for a later determination by the circuit court. The majority has only afforded Telegraph the opportunity to amend its complaint and seek damages. While I believe this result is incorrect, the majority opinion does not foreclose a finding by the circuit court that an action for damages is improper.\nMoreover, the damage issue involves numerous issues, as yet unexplored, which may immunize the defendant with regard to his actions as commissioner. For example, the defendant should not be personally liable for an inadvertent technical violation of the statute. Instead, a showing of bad faith or a wilful violation of the statute\u2019s requirements would be necessary. See Ill. Rev. Stat. 1979, ch. 85, par. 1 \u2014 101 et seq.\nFinally, I am disturbed by the majority\u2019s conclusion because it may lead to future losses to depositors. The savings and loan industry is regulated by both Federal and State authorities. While State regulation is important, the insurance of depositor accounts is provided by the Federal Savings and Loan Insurance Corporation (FSLIC) in conjunction with the Federal Home Loan Bank Board (FHLBB). If our commissioner of savings and loan associations is held personally accountable for this cooperation with the controlling Federal officials, our commissioner may react to this decision in the future by refusing to cooperate with them. Without such cooperation, purchase and assumption transactions like the one negotiated in this takeover will never occur. The result will be forced closings by the FHLBB, and the FSLIC will be required to provide cash payments to individuals only in amounts insured by Federal law. Those investors with more than the insured amount will lose that money instead of retaining the full amount of their savings as happened in the Telegraph situation. This result is unsound and detrimental to those who are savings and loan depositors.\nRYAN, C.J., and UNDERWOOD, J., join in this dissent.", "type": "dissent", "author": "JUSTICE SIMON," } ], "attorneys": [ "Neil F. Hartigan, Attorney General, of Springfield (Michael J. Hayes and Roger P. Flahaven, Assistant Attorneys General, of Chicago, of counsel), for appellant.", "Baker & McKenzie, of Chicago (Francis D. Morrissey, James G. Staples, Daniel J. O\u2019Connor, and Thomas A. Doyle, of counsel), for appellees." ], "corrections": "", "head_matter": "(No. 59149.\nTELEGRAPH SAVINGS & LOAN ASSOCIATION OF CHICAGO et al., Appellees, v. WILLIAM J. SCHILLING, Indiv. and as Commissioner of Savings and Loan Associations, Appellant.\nOpinion filed November 30, 1984.\n\u2014 Rehearing denied February 1, 1985.\nUNDERWOOD and SIMON, JJ., and RYAN, C.J., dissenting.\nNeil F. Hartigan, Attorney General, of Springfield (Michael J. Hayes and Roger P. Flahaven, Assistant Attorneys General, of Chicago, of counsel), for appellant.\nBaker & McKenzie, of Chicago (Francis D. Morrissey, James G. Staples, Daniel J. O\u2019Connor, and Thomas A. Doyle, of counsel), for appellees." }, "file_name": "0166-01", "first_page_order": 176, "last_page_order": 196 }