{ "id": 2690791, "name": "INTERNATIONAL BUREAU OF FRAUD CONTROL, LTD., Plaintiff-Appellant and Cross-Appellee, v. GARY L. CLAYTON, Director of the Department of Registration and Education, et al., Defendants-Appellees and Cross-Appellants", "name_abbreviation": "International Bureau of Fraud Control, Ltd. v. Clayton", "decision_date": "1989-09-14", "docket_number": "No. 4-88-0792", "first_page": "703", "last_page": "711", "citations": [ { "type": "official", "cite": "188 Ill. App. 3d 703" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "489 N.E.2d 1374", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "opinion_index": 0 }, { "cite": "111 Ill. 2d 350", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3167435 ], "weight": 3, "opinion_index": 0, "case_paths": [ "/ill-2d/111/0350-01" ] }, { "cite": "447 N.E.2d 394", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "95 Ill. 2d 211", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3111336 ], "opinion_index": 0, "case_paths": [ "/ill-2d/95/0211-01" ] }, { "cite": "469 N.E.2d 167", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "103 Ill. 2d 266", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3152411 ], "opinion_index": 0, "case_paths": [ "/ill-2d/103/0266-01" ] }, { "cite": "522 N.E.2d 1219", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "122 Ill. 2d 353", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5549519 ], "opinion_index": 0, "case_paths": [ "/ill-2d/122/0353-01" ] }, { "cite": "527 N.E.2d 307", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "123 Ill. 2d 291", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5550803 ], "opinion_index": 0, "case_paths": [ "/ill-2d/123/0291-01" ] }, { "cite": "201 N.E.2d 1", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "51 Ill. App. 2d 125", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5278346 ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/51/0125-01" ] }, { "cite": "194 N.E.2d 922", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "359 Ill. 504", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5276765 ], "opinion_index": 0, "case_paths": [ "/ill/359/0504-01" ] }, { "cite": "312 N.E.2d 806", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "19 Ill. App. 3d 980", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2692706 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/19/0980-01" ] }, { "cite": "531 N.E.2d 839", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "176 Ill. App. 3d 697", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3588750 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/176/0697-01" ] }, { "cite": "481 N.E.2d 1004", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "opinion_index": 0 }, { "cite": "135 Ill. App. 3d 372", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3600835 ], "weight": 3, "opinion_index": 0, "case_paths": [ "/ill-app-3d/135/0372-01" ] }, { "cite": "515 N.E.2d 1244", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 4, "opinion_index": 0 }, { "cite": "118 Ill. 2d 465", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3188110 ], "weight": 4, "opinion_index": 0, "case_paths": [ "/ill-2d/118/0465-01" ] }, { "cite": "498 N.E.2d 267", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "opinion_index": 0 }, { "cite": "147 Ill. App. 3d 710", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3605021 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ill-app-3d/147/0710-01" ] } ], "analysis": { "cardinality": 809, "char_count": 16551, "ocr_confidence": 0.763, "pagerank": { "raw": 1.273092736883265e-07, "percentile": 0.6152474526507143 }, "sha256": "d54d0cd77483903ec9e885f18d646f88156f461b7e99c02391381a7d87dc33a7", "simhash": "1:ecdf9ebda686779e", "word_count": 2760 }, "last_updated": "2023-07-14T17:36:06.130198+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "INTERNATIONAL BUREAU OF FRAUD CONTROL, LTD., Plaintiff-Appellant and Cross-Appellee, v. GARY L. CLAYTON, Director of the Department of Registration and Education, et al., Defendants-Appellees and Cross-Appellants." ], "opinions": [ { "text": "PRESIDING JUSTICE McCULLOUGH\ndelivered the opinion of the court:\nPlaintiff, International Bureau of Fraud Control, Ltd. (IBFC), brought a declaratory judgment action, seeking a determination that its activities in collecting bad checks were not debt collection pursuant to the Collection Agency Act (Act) (Ill. Rev. Stat. 1987, ch. 111, par. 2001 et seq.). IBFC also sought a declaration that section 3 \u2014 806 of the Uniform Commercial Code \u2014 Commercial Paper (UCC) (Ill. Rev. Stat. 1987, ch. 26, par. 3 \u2014 806) did not limit the imposition fees and costs in excess of $10 to collections involving court proceedings. It sought a declaration that it could recover its reasonable costs from the drawer. IBFC also sought to enjoin the Hlinois Department of Registration and Education and its director (DRE) from seeking sanctions against IBFC\u2019s license for collecting excessive service fees.\nBoth parties moved for summary judgment. The trial court found no disputed issues of fact existed. It held IBFC was acting as a collection agency under the Act. It also found section 3 \u2014 806 of the UCC did not limit the service fee charged to the drawer in a nonlitigation collection to $10. IBFC appeals, arguing collecting cash for bad checks is not debt collection. DRE cross-appeals, arguing the trial court erred in construing section 3 \u2014 806 of the UCC. We affirm in part, reverse in part, and remand.\nThe facts are undisputed. IBFC is a licensed collection agency, whose sole activity is reducing to money checks which have been returned to the payee because the drawer did not have an account with the drawee bank or did not have sufficient funds to cover the check. IBFC\u2019s principal clients are retail merchants and service providers to retail merchants. Upon specific referral, IBFC contacts the drawer of the dishonored check and requests he make good the check by paying IBFC as agent for the payee. Funds thus received are sent to the payee after fees, costs, and expenses are deducted.\nIBFC attempts to collect money for the checks only after the drawer\u2019s bank has notified the drawer of the dishonor and the payee has sent out one or more written notices of dishonor to the drawer and demanded payment. In addition to the written notice, according to the payee\u2019s business practice, it may have orally communicated the notice of dishonor to the drawer and orally demanded payment. In most cases, the drawer will have been contacted by an agency which collects debts and bad checks. After the drawer fails to act in response to the notices and actions of the payee\u2019s collection agency, the matter is handled by IBFC.\nApproximately 90% of the checks referred to IBFC are two to six years old. IBFC incurs costs and expenses in seeking payment for the dishonored checks. It seeks reimbursement for these expenditures from the drawers. On July 16, 1986, the DRE sent IBFC a letter stating its expense recovery from the drawer in nonlitigation collections was limited to $10 pursuant to section 3 \u2014 806 of the UCC. (Ill. Rev. Stat. 1987, ch. 26, par. 3 \u2014 806.) The IBFC instituted the instant action.\nBefore we address the merits of the cause, we must first address the DRE\u2019s contention that the trial court and this court lack jurisdiction to entertain this cause as it is barred by sovereign immunity. The DRE argues the action is an action against a State agency and public official who were acting in the exercise of their official duties.\nTechnically, sovereign immunity has been abolished in Illinois, except as the General Assembly may provide by law. (Ill. Const. 1970, art. XIII, \u00a74.) Section 1 of \u201cAn Act in relation to immunity for the State of Illinois\u201d (Ill. Rev. Stat. 1987, ch. 127, par. 801) provides the State may not be a defendant except as provided in the Illinois Public Labor Relations Act (Ill. Rev. Stat. 1987, ch. 48, par. 1601 et seq.) and the Court of Claims Act (Ill. Rev. Stat. 1987, ch. 37, par. 439.1 et seq.). The Court of Claims has exclusive jurisdiction over all tort actions against the State. (Robb v. Sutton (1986), 147 Ill. App. 3d 710, 498 N.E.2d 267.) Thus, sovereign immunity precludes actions against State agencies or public officials acting pursuant to their lawful authority. (Board of Trustees of Community College District No. 508 v. Burris (1987), 118 Ill. 2d 465, 515 N.E.2d 1244.) However, where an action against an agency or official alleges an unwarranted assumption of authority, the action is not an action against the State. (Board of Trustees, 118 Ill. 2d 465, 515 N.E.2d 1244; Hernandez v. Fahner (1985), 135 Ill. App. 3d 372, 481 N.E.2d 1004.) Where the action is to enjoin a public official from acting in excess of his authority in the future, the trial court has jurisdiction and principles of sovereign immunity do not apply. Board of Trustees, 118 Ill. 2d 465, 515 N.E.2d 1244; Hernandez, 135 Ill. App. 3d 372, 481 N.E.2d 1004.\nIn the instant case, the IBFC is seeking an interpretation of a statute, determination that its activities are not debt collection, and an injunction, to preclude the DRE and its director from future actions in excess of their authority. Sovereign immunity concepts do not, therefore, apply. Board of Trustees, 118 Ill. 2d 465, 515 N.E.2d 1244; Robb, 147 Ill. App. 3d 710, 498 N.E.2d 267; Hernandez, 135 Ill. App. 3d 372, 481 N.E.2d 1004.\nThe IBFC argues its service of collecting cash for checks which have been dishonored based upon insufficient funds or lack of an account with the drawee is not \u201cdebt collection\u201d within the meaning of the Act. It notes the Act does not specifically say a dishonored check is a debt, the legislative history of the Act does not define dishonored checks as debts, and no other statute defines a dishonored check as a debt. The IBFC also states the legislature has provided special penalties for those who dishonor checks under the instant circumstances. Therefore, it argues the legislature distinguished the dishonored check under these circumstances from ordinary debt.\nSection 2.02 of the Act defines collection agencies as:\n\u201c[A]ny person, association, partnership or corporation who, for compensation, either contingent or otherwise, or for other valuable consideration, offers services to collect an alleged debt.\u201d (Ill. Rev. Stat. 1987, ch. 111, par. 2004.)\nThe Act does not apply to persons whose collection activities are directly related to their business. It specifically excepts banks, credit unions, abstract companies, real estate brokers, attorneys, insurance companies, loan companies, condominium associations, and retail merchants who collect their own accounts. Ill. Rev. Stat. 1987, ch. 111, par. 2005.\nAn entity, acts as a collection agency pursuant to section 3(a) of the Act when it \u201c[e]ngages in the business of collection for others of any account, bill or other indebtedness.\u201d (Ill. Rev. Stat. 1987, ch. 111, par. 2006(a).) The Act further provides for registration of collection agencies, the posting of a bond, and makes several types of activities unlawful. (Ill. Rev. Stat. 1987, ch. 111, pars. 2007, 2011, 2012 through 2033.) The purpose of the Act is to make unlawful abusive collection practices. (E. Malstrom, The Illinois Collection Agency Act, 1975 U. Ill. L.F. 441.) The Act does not define \u201caccount, bill, or other indebtedness.\u201d It does not define \u201cdebt.\u201d People ex rel. Daley v. Datacom Systems Corp. (1988), 176 Ill. App. 3d 697, 531 N.E.2d 839.\nThe IBFC first contends a dishonored check is not a debt. It does not seek to collect for the debt underlying the check. Therefore, under the plain language of the Act, collecting cash for dishonored checks is not debt collection. Consequently, we must consider the nature of debts as well as the relation established by the issuance of a check. Debt is defined as \u201c[a] sum of money due by certain and express agreement.\u201d (Black\u2019s Law Dictionary 363 (5th ed. 1979).) \u201cIndebtedness\u201d in a broad sense is anything that is due and owing. Black\u2019s Law Dictionary 691 (5th ed. 1979).\nWe turn now to a consideration of checks. Generally, a check given in exchange for a service or good is a written promise to pay the underlying obligation. (Leavitt v. Charles R. Hearn, Inc. (1974), 19 Ill. App. 3d 980, 312 N.E.2d 806.) The UCC defines a check as a draft or order upon a bank signed by the maker for the payment of a sum certain from the drawer\u2019s account to a definite person or bearer, which is due upon demand. (Ill. Rev. Stat. 1987, ch. 26, par. 3 \u2014 104; Economy Fuse & Manufacturing Co. v. Standard Electric Manufacturing Co. (1935), 359 Ill. 504, 194 N.E.2d 922.) Payment for goods may be made by check. (Ill. Rev. Stat. 1987, ch. 26, par. 2 \u2014 511.) However, such payment is conditional and is defeated by dishonor of the check. (Ill. Rev. Stat. 1987, ch. 26, par. 2 \u2014 511(3).) The drawer is responsible for the payment of the dishonored check (Ill. Rev. Stat. 1987, ch. 26, par. 3 \u2014 413(2)), and the payee has an immediate action against the drawer upon dishonor and notice of dishonor (Ill. Rev. Stat. 1987, ch. 26, par. 3-507(2)).\nThe drawer may discharge his liability on the instrument by payment or any act which discharges his promise to pay the money. (Ill. Rev. Stat. 1987, ch. 26, par. 3 \u2014 601.) Additionally, section 3 \u2014 802(b) of the UCC provides that if a check is dishonored, an action may be maintained on the instrument or on the obligation. Discharge of the obligor on the instrument discharges him on the obligation. (Ill. Rev. Stat. 1987, ch. 26, par. 3 \u2014 802(b).) Therefore, any action which discharges the drawer on the instrument discharges him on the obligation.\n\u201cObligation\u201d is synonymous with \u201cdebt.\u201d (Roget\u2019s II The New Thesaurus 234 (1980).) We conclude that when a check is given in payment for goods or services and is dishonored, the relation of debtor-creditor is established between the drawer and the payee of the check. (See generally Calvin Watson Motor Sales v. Devaull (1964), 51 Ill. App. 2d 125, 201 N.E.2d 1.) IBFC\u2019s actions in reducing to cash checks which have been dishonored discharges liability on the instrument and the obligation underlying it. Thus, it is the collection of an indebtedness under the Act.\nIBFC argues the legislature\u2019s treatment of checks dishonored for insufficient funds or lack of an account indicates it distinguished these situations from ordinary debt. IBFC contends the legislature did not intend to afford the protection of the Act to drawers in such circumstances. We disagree. If the requisite mental state is found, a person issuing a check under the instant circumstances may have committed a deceptive practice. (Ill. Rev. Stat. 1987, ch. 38, par. 17 \u2014 1.) The drawer who commits a deceptive practice may be liable to the payee for triple the amount of the check or for between $100 and $500 in addition to criminal liability. (Ill. Rev. Stat. 1987, ch. 38, par. 17 \u2014 la.) However, not all persons who issue checks which are dishonored for insufficient funds have committed deceptive practices. The fact that fraudulent conduct is punishable does not mean the legislature intended to exclude all drawers of dishonored checks from the protection afforded by the Act.\nWe turn now to the cross-appeal. The DRE argues the trial court erred in its interpretation of section 3 \u2014 806 of the UCC. (Ill. Rev. Stat. 1987, ch. 26, par. 3 \u2014 806.) Section 3 \u2014 806 states:\n\u201cAny person who issues a check or other draft which is not honored upon presentment because the drawer does not have an account with the drawee, or because the drawer does not have sufficient funds in his account, or because the drawer does not have sufficient credit with the drawee, shall be liable in the amount of $10, or for all costs and expenses, including reasonable attorney\u2019s fees, incurred by any person in connection with the collection of the amount for which such check or other draft was written, whichever is greater, and shall be liable for interest upon the amount of such check or other draft ***.\u201d (Emphasis added.) (Ill. Rev. Stat. 1987, ch. 26, par. 3 \u2014 806.)\nThe trial court found the phrase \u201ccosts and expenses\u201d referred to in the statute need not relate to litigation or be awarded by the court.\nThe primary rule of statutory construction is to ascertain and effectuate the legislature\u2019s intent in drafting the statute. (Faheem-El v. Klincar (1988), 123 Ill. 2d 291, 527 N.E.2d 307.) In doing so, the entire statute must be considered, as well as the evil to be remedied or the object to be attained by the statute. (City of Decatur v. American Federation of State, County & Municipal Employees, Local 268 (1988), 122 Ill. 2d 353, 522 N.E.2d 1219.) The language of the statute should be first considered. If the language is clear, the court should not look to extrinsic aids for construction. (In re Marriage of Logston (1984), 103 Ill. 2d 266, 469 N.E.2d 167.) The words should be given their popularly understood meaning. (Kozak v. Retirement Board of the Firemen\u2019s Annuity & Benefit Fund (1983), 95 Ill. 2d 211, 447 N.E.2d 394.) Courts avoid interpretations which would render any portion of the statute meaningless or void. (Harris v. Manor Healthcare Corp. (1986), 111 Ill. 2d 350, 489 N.E.2d 1374.) When a statute employs words having a well-known legal significance, courts will, absent an expression to the contrary, assume that the legislature intended the words to have that meaning. Harris, 111 Ill. 2d 350, 489 N.E.2d 1374.\nWith these principles in mind, we consider the instant statute. The words \u201ccosts\u201d and \u201cexpenses\u201d in their popularly understood sense are synonyms. (Webster\u2019s Third New International Dictionary 515, 800 (1961).) \u201cCosts\u201d also has a well-known legal significance. It refers to litigation expenses awarded by the court to a successful party. (Black\u2019s Law Dictionary 312 (5th ed. 1979).) Therefore, using the popular meaning of the terms and not tying them to litigation creates a redundancy in the statute. Such a result should be avoided. (Harris, 111 Ill. 2d 350, 489 N.E.2d 1374.) However, if the term \u201ccosts\u201d is given its well-known legal significance, the redundancy is eliminated. We believe the phrase \u201ccosts and expenses\u201d referred to in the statute means those court costs and expenses which are awarded by the court after litigation.\nIBFC urges this court to consider only the language of the statute in seeking the legislative intent. We note an ambiguity exists in the statute, since the ordinary meaning of the words differs from their legal significance. Therefore, we will consider the legislative history. The legislative history supports a conclusion that costs and expenses are tied to litigation. Representative Klemm in introducing the legislation stated:\n\u201cHouse Bill 2536 defines ten dollars as the maximum the retailer may charge without going to court. This will eliminate the necessity of a merchant to prove his actual cost each time he collects a fee of under ten dollars for dishonored checks. This is a maximum amount and does not require merchants to charge any specific fee, and I move its adoption.\u201d (82d Ill. Gen. Assem., May 13, 1982, at 190 (statements of Representative Klemm) (debates on House Bill 2536).)\nSenator Sangmeister stated:\n\u201cHouse Bill 2536 amends the Uniform Commercial Code and very simply establishes that on an NSF check that a retailer would have the fixed sum of ten dollars as his cost for attempting to redeem or make good the check that has been presented to him which has gone bad. He has that alternative or to go to court and get whatever costs the court may give, but it would set ten dollars as the fee.\u201d (Emphasis added.) 82d Ill. Gen. Assem., June 23, 1982, at 124 (statements of Senator Sangmeister) (debates on House Bill 2536).\nWe conclude the drawee\u2019s liability pursuant to section 3 \u2014 806 is limited to $10 or the actual cost and expenses incurred in litigation to collect upon the amount of the check. Therefore, for the above reasons, we affirm in part, reverse in part, and remand.\nAffirmed in part; reversed in part and remanded.\nLUND and GREEN, JJ., concur.", "type": "majority", "author": "PRESIDING JUSTICE McCULLOUGH" } ], "attorneys": [ "Richard W. Cosby, of Cosby & Bell, of Chicago, for appellant.", "Neil F. Hartigan, Attorney General, of Springfield (Robert J. Ruiz, Solicitor General, and William H. London, Assistant Attorney General, of Chicago, of counsel), for appellees." ], "corrections": "", "head_matter": "INTERNATIONAL BUREAU OF FRAUD CONTROL, LTD., Plaintiff-Appellant and Cross-Appellee, v. GARY L. CLAYTON, Director of the Department of Registration and Education, et al., Defendants-Appellees and Cross-Appellants.\nFourth District\nNo. 4-88-0792\nOpinion filed September 14, 1989.\nRichard W. Cosby, of Cosby & Bell, of Chicago, for appellant.\nNeil F. Hartigan, Attorney General, of Springfield (Robert J. Ruiz, Solicitor General, and William H. London, Assistant Attorney General, of Chicago, of counsel), for appellees." }, "file_name": "0703-01", "first_page_order": 725, "last_page_order": 733 }