Opposition Brief — Toledo, Peoria & Western Railroad v. Illinois Department of Transportation

IN THE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1984

TOLEDO, PEORIA & WESTERN RAILROAD COMPANY

a Corporation, PETITIONER

STATE OF ILLINOIS, DEPARTMENT OF

TRANSPORTATION; JOHN D. KRAMER; J. E.

HARLAND; and ALLEN AUSTIN, RESPONDENTS

BRIEF IN OPPOSITION TO

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Neil F. Hartigan

Attorney General

Roy E. Frazier, Jr.

Assistant Attorney General

Springfield, Illinois

*Richard E. Quinn

Special Assistant

Attorney General

227 N. E. Jefferson Street

Peoria, Illinois 61602

(309) 674-1133

January 1985 2

YP

TABLE OF CONTENTS

Page

Table of Authorities oe 1-2

Summary of Argument avs 3-4

Argument a 5-22

Conclusion a 22°23

Appendix se é 24-41

Hicks v. State, 32 Ill.

Ct.Cl. 529 (1978) oe « 24-29

Orr Construction Co. v.

State, 30 I11.Ct.Cl. 266

(1975) a 29-41

TABLE OF AUTHORITIES

CASES

Page

Alabama v. Pugh, 438 U.S. 781 (1978). . 5

Black v. Chicago B & Q R.R. Co.,

237 Ill. 500 86 N.E 1065 (1909) » «ah

Edleman v. Jordan, 415 U.S. 651

(1974) : a

Edwardsville v. County of Madison,

251 I11. 265 96 N.E. 238 (1911) » « big 38

Ex Patre Young, 209 U.S. 123 (1908) ..7

Florida Department of State v.

Treasure Salvors, Inc., 458 U.S.

670 (1982) se « @

G. H. Sternberg Co. v. Bond, 30

I11.App.3d 874, 333 N.E.2d 261

(5th Dist. 1975) + Be

Gordon v. Dept. of Transportation,

109 I111.App.3d 1071, 441 N.E.2d

904, 65 I111.Dec. 589 (2d Dist. 1982). . 16

Harris v. Board of Supervisors,

105 Ill. 445 (1883) o« of

Hicks v. State, 32 I11.Ct.Cl.

529 (1978) ew oe

Larson v. Domestic and Foreign

Commerce Corp., 337 U.S. 682 (1949) .. 7,8,9,

10

Liebman v. Board of Governors of

State Colleges & Universities, 79

I1l.App.3d 89, 398 N.E.2d 305, 34

I11.Dec. 630 (lst Dist. 1979) eo « &8

iii aeiaiiaa ti elille

Orr Construction Co. v. State, 30

EidbcheecGae cee tania .

Parratt v. Taylor, 451 U.S. 527

(1981) °

Pennhurst State School and Hospital

v. Halderman, U.S. , 104 S.

Ct. 900 (1984) °

Poe v. Department of Transportation,

32 Or.App. 493. 600 p.2d 939 (1979).

Quern v. Jordan, 440 U.S. 332 (1979).

Sass v. Kramer, 72 I1l1l.2d 485, 381

N.E.2d 975, 21 111.Dec. 528 (1978) .

Seifert v. Standard Paving Co., 64

I11.2d 109, 355 N.E.2d 537 (1976) °

S. J. Groves and Sons v. State, 93

I1l1l.2d 397, 444 N.E.2d 131, 67 Ill.

Dec. 92, App. dismissed 103 S.Ct.

3103 (1983)

OTHER

42 U.S.C. sec. 1983

Const. Art. 1 sec. 2 (1970)

I11.Rev.Stat., ch. 37 sec. 439.1

et seg

I11.Rev.Stat., ch. 121, sec. 9-127

I11.Rev.Stat., ch. 121, sec. 4-508

1912 Op.Atty.Gen. 1077

16

RR ee ta meas Ie oe et rn > —

SUMMARY OF ARGUMENT

The decision of the Seventh Circuit in this

case is in accordance with recent decisions of

this court on the issue of sovereign immunity

of the states. Such immunity was not

abrogated by Congress with enactment of the

Civil Rights Act of i871.

This case is an action against the State of

Illinois, not against the named individuals,

Since the issue is the state's own interest in

real property. Therefore, the legal fiction

which permits civil rights suits against

officials as distinct from the state is not

applicable.

With respect to Petitioner's Fourteenth

Amendment claim, issues of state law are

controlling. The Petitioner assumes the state

can abandon its interest in real property, and

that the Illinois Court of Claims cannot

provide a remedy. These are untrue, or, at

best questionable, assumptions which should

not be used as a basis for action by this

court.

I. THE DECISION OF THE SEVENTH CIRCUIT IS IN

ACCORDANCE WITH PRONOUNCEMENTS OF THIS

COURT.

The Petitioner asks this Court to decide,

once again, whether the Civil Rights Act, 42-

U.S.C. sec. 1983, abrogates the constitutional

immunity enjoyed by the State of Illinois

pursuant to the Eleventh Amendment to the

Constitution. This Court has repeatedly held,

as did the Seventh Circuit, that it does not.

Quern v. Jordan, 440 U.S. 332 (1979); Alabama

v. Pugh, 438 U.S. 781 (1978); Edelman v.

Jordan, 415 U.S. 651 (1974). The rule was

recently restated in Pennhurst State School

and Hospital v. Halderman, _U.S. _ _—s_,104

S.Ct. 900 (1984).

The Petitioner suggests that the Seventh

Circuit “confuses the constitutional immunity

issue with the statutory “person” issue and

treats the two questions as one." (Petition

p. 28). Petitioner ignores the fact that, as

set forth in this Court's analysis in the

Edelman and Quern cases, the two questions are

one. The State and its agencies are entitled

to constitutional immunity unless that

immunity is waived either by an act of the

State or an act of Congress. Because Congress

in enacting sec. 1983 did not override the

traditional sovereign immunity of the states,

the states are not statutory persons.

There can be little question that this is a

Suit against the State of Illinois. While

three state officers are nominally defendants,

along with the Illinois Department of

Transportation, it is clear that the relief

sought is against the State, not against the

officers.

In 1956 the State of Illinois acquired from

Plaintiff a possessory interest in certain

real estate, paying the full appraised value

of the fee interest. The Plaintiff in this

suit seeks a ruling that the State has, by its

action or inaction, forfeited its right to

that possessory interest. The whole purpose

of the suit is to determine what, if any,

right the State retains with respect to the

property. This is not a case subject to the

doctrine of Ex parte Young, 209 U.S. 123

(1908). The individual state officers have no

interest in the property, nor can they

transfer any interest held by the State absent

specific statutory authority to do so. In

fact, it is questionable whether, in their

official capacity, they have any authority to

quiet title in the Plaintiff as originally

directed by the district court. (See section

II B, infra). The trial court recognized this

fact in its order of June l, 1983. (Petition,

p. A-45-46).

The Petitioner suggests the principles of

sovereign immunity do not prevent a federal

Court's initial inquiry concerning the

validity of the Plaintiff's claim to title.

This is an argument initially rejected by this

court in Larson v. Domestic and Foreign

Commerce Corp., 337 U.S. 682 (1949). As

stated by the Court in Larson, such an

argument confuses the doctrine of sovereign

immunity with the requirement that a plaintiff

state a cause of action. 337 U.S. at 692.

The court has recently had occasion to

reexamine the principle in Florida Department

of State v. Treasure Salvors, Inc., 458

U.S.670, 102 S.Ct. 3304 (1982). Therein, both

Justice Stevens' plurality opinion and Justice

White's separate opinion rejected a court of

appeals holding which was in accordance with

the argument made by Petitioner in this case.

As observed by Justice White, it is equivalent

to asserting that suits against a state are

permitted by the Eleventh Amendment if the

result is that the state loses. 458 U.S. at

703.

In Florida Department of State it was

observed that the state had no colorable claim

to the property in question. The same cannot

be said in the case at bar, as the only

documentary evidence shows the State of

Illinois has a permanent easement for highway

purposes with respect to the land in question.

Petitioner seeks to have that easement

extinguished and would have the federal court

find jurisdiction on the basis that the

easement has been abandoned, notwithstanding

the State's repeated and vigorous denials of

the abandonment.

II. THE ISSUE OF WHETHER THE EXISTENCE OF A

STATE COURT OF CLAIMS DEFEATS FEDERAL

JURISDICTION OVER FIFTH AND FOURTEENTH

AMENDMENT PROPERTY CLAIMS IS NOT RIPE FOR

DECISION IN THIS CASE

Apparently as an alternative to its sec.

1983 claim, the Petitioner asserts federal

jurisdiction on the basis of the Fourteenth

Amendment. The Petitioner acknowledges that,

as set out in this court's opinions in Parratt

v. Taylor, 451 U.S. 527 (1981) and in Larson

v. Domestic and Foreign Commerce Corp., 337

U.S. 682 (1949), the existence of an adequate

state Court of Claims remedy defeats federal

jurisdiction in a Fourteenth Amendment

property claim case. The petitioner reasons,

however, that where a Court of Claims remedy

is inadequate federal jurisdiction should

attach to vindicate plaintiff's Fourteenth

Amendment right.

The difficulty with Piaintiff's argument is

that it assumes, first, that Illinois law

permits a state agency to abandon an interest

in land, and second, that the state Court of

Claims remedy is inadequate. Both are issues

cf state law on which there is no authority to

support Plaintiff's position, and which the

lower courts in this case have failed to

consider.

10

A. THE ILLINOIS COURT OF CLAIMS AFFORDS

PLAINTIFF DUE PROCESS

Other than the bare allegations of the

Plaintiff's Complaint that it could not attain

a complete remedy in the Illinois Court of

Claims pursuant to the Court of Claims Act,

I11l.Rev.Stat. Ch. 37, sec. 439.1 et seq.

(1981), there has been no showing whatsoever

on the part of the Plaintiff that it has been

denied due process. There was no finding by

the district court of a denial of due process.

The trial court did mention in its September

4, 1981 order, with reference to Defendants'

contention that a remedy may be had in the

Court cf Claims, that "it is far from certain

that that is a valid position." However, the

trial court found that it did not need to

determine whether the Court of Claims accorded

due process, as the existence of a state

remedy did not bar the federal action.

(Petition p. A-20). The lower court

1l

considered no evidence and made no ruling on

whether the Illinois Court of Claims Act, and

the procedures therein, would provide

Plaintiff with due process in accordance with

the State and United States Constitutions.

The Court of Claims Act has previously been

held to be constitutional. Seifert v.

Standard Paving Company, 64 I11.2d 109, 355

N.E.2d 537 (1976). In addition, as a matter

of law it is clear that several of the

conclusions in Plaintiff's complaint with

respect to the jurisdiction of that court, and

the availability of a remedy to Plaintiff

there, are incorrect. In fact, it appears,

after a thorough review of the Court of Claims

jurisdiction, that the remedies available in

that forum are greater than those which have

been accorded to the Plaintiff in the federal

court.

The Plaintiff contends in his Complaint

that “the maximum amount that can be awarded

to any claimant is $100,000 regardless of the

12

loss sustained and the Court of Claims lacks

equity jurisdiction.” (Complaint, p. 4).

While it is true that the Court of Claims

lacks general equity jurisdiction, it can and

does grant equitable relief in certain

instances. For example, in Hicks v. State, 32

I11.Ct.Cl. 529 (1978), the court exercised

such equitable power to reform a deed, after

discussing its jurisdiction to do so.

Further, the Court of Claims can entertain a

Declaratory Judgment action. Orr Construction

Company v. State, 30 I11.Ct.Cl. 266 (1975).

Court of Claims use of such equitable remedies

has been approved by the Circuit courts of the

state. G. H. Sternberg Company v. Bond, 30

I1l1.App.3d 874, 333 N.E.2d 261 (5th Dist.

1975)); Liebman v. Board of Governors of State

Colleges and Universities, 79 I11.App.3d 89,

398 N.E.2d 305, 34 I111.Dec. 63 (lst Dist.

1979). A similar action could have

adjudicated the rights of the parties in the

present case, just as the federal court has

13

done. The Court of Claims, in addition to

adjudicating the rights of the parties to the

property in dispute, could have granted the

Plaintiff a money judgment for invasion of its

property rights. The federal court could not.

The Plaintiff contends that awards in the

Court of Claims are limited to $100,000. But,

while it is true that tort claims in the Court

of Claims limit a claimant to $100,000 in

recovery, the limit on tort awards would not

necessarily apply to the Plaintiff's claim for

the alleged taking of its property. Further,

there is apparently no limit on the court's

jurisdiction to order the return of specific

property, within its jurisdiction to hear "all

claims against the State founded upon any law

of the State of Illinois...". I11.Rev. Stat.

Ch. 37, Sec. 439.8(a). The Illinois

Constitution provides that property shall not

be taken without due process. Const. Art. l

sec. 2. (1970). This is surely a law of the

14

State pursuant to which the Court of Claims

should have jurisdiction.

The Plaintiff also claims the Court of

Claims Act is unconstitutional by reason of

the fact that it does not accord to Plaintiff

all the procedures which would be available to

it in federal court. Again, there is no

evidence in the record as to the procedures of

the Court of Claims. However, it is

elementary that a litigant need not be

accorded the full protection of the Federal

Rules of Civil Procedure in order to be

accorded due process of law. Parratt v.

Taylor, 451 U.S. 527 (1981). The Plaintiff in

this case has not shown that it has been

denied the opportunity to make a claim against

the State, provide evidence on its own behalf,

and have its claim decided fairly and

impartially by an unbiased decisionmaker. The

lower court in this case effectively refused

to hear any such argument, and simply

discounted the numerous State authorities

15

which have upheld the Court of Claims Act and

ruled that its jurisdiction is exclusive with

respect to claims such as Plaintiff's. E.g.

S. J. Groves and Sons v. State, 93 I1l1.2d 397,

444 N.E.2d 131, 67 I11.Dec. 92, appeal

dismissed, 103 S. Ct. 3103 (1983); Gordon v.

Department of Transportation, 109 I11.App.3d

1071, 441 N.E.2d 904, 65 I11.Dec. 589 (1982);

Sass v. Kramer, 72 I11.2d 485, 381 N.E.2d 975,

21 111.Dec. 528 (1978).

If there is a legitimate question as to

whether the Court of Claims has jurisdiction

to provide Plaintiff with a remedy in this

case, that is a question to be determined by

the legislature and courts of the State of

Illinois, not by federal courts. Plaintiff

should, at least, be required to seek his

remedy in the Court of Claims, and only upon a

finding by that forum of its inability to

provide Plaintiff with complete relief

(assuming Plaintiff were to prove its claim)

should the Plaintiff be allowed to claim, in

16

essence, that the Illinois Court of Claims Act

is unconstitutional as applied to it.

B. UNDER ILLINOIS LAW, THE DEPARTMENT OF

TRANSPORTATION CANNOT ABANDON AN

INTEREST IN REAL PROPERTY WITHOUT

COMPENSATION.

The Plaintiff's position, and the premise

upon which the above arguments are made, is

that common law principles of abandonment

apply to the Defendant State. Defendants

submit that such an assumption is unwarranted,

and that common law principles of abandonment

have been changed by statute with respect to a

property interest held by the State or its

agencies.

The authority to dispose of property of the

state is vested in the General Assembly and,

in the absence of statutory authorization, a

department, board, or commission lacks power

to dispose of any interest in such property.

17

I

+ ; *

a

"4

7

- ‘

‘

,

4

ey

,

.

d

'

‘

;

-

l ' :

ra ’

.

:

.

‘

°

‘

é

7

»

a ~! Pa ee

LS aca ot as alae oa mei tat met

+ ace = eet a dS oy noe ah sath ee ro i

: = sl - — ee ‘ ——-

= ee Ua a et — : . ba ee ti ao oe ates ge os RTT Ta : ; -

Edwardsville v. County of Madison, 251 Ill.

265, N.E.238 (1911); Harris v. Board of

Supervisors, 105 Ill. 445 (1883); 1912 Op.

Atty. Gen. 1077. There are currently two

statutes which deal with the vacation, sale or

exchange of highway lands or properties by the

State. One of them, I11.Rev.Stat. Ch. 121,

sec. 9-127, concerns the title to highways

"vacated under or by virtue of any Act of this

State or by the highway authority authorized

to vacate" highways. The other, I11.Rev.Stat.

Ch. 121, Sec. 4-508, provides:

"4-508.(a) Except as provided in

paragraph (c) of this Section, and

subject to written approval of the

Governor, the Department may dispose of,

by public sale, at auction or by sealed

bids, any land, rights or other

properties, real or personal, acquired

for but no longer needed for highway

purposes or remnants acquired under the

provisions of Section 4-501, provided

that no such sale may be made for less

than the fair appraised value of such

land, rights, or property.

"(b) except as provided in paragraph (c)

of this Section, and subject to the

written approval of the Governor, the

Department may echange any land, rights

or property no longer needed for highway

purposes, or remnants, acquired under the

18

provisions of Section 4-501 of this Code

for equivalent interests in land, rights

or property needed for highway pruposes.

Where such interests are not of

equivalent value cash may be paid or

received for the difference in value.”

Subsection (c) of the statute concerns

disposition of residential property and is not

relevant to the current matter.

Section 9-127 clearly shows that highway

right of way is to be vacated only by an Act

of the State or in a manner authorized by the

highway department. Section 4-508 clearly

provides that an interest in real property may

be disposed of only with approval of the

governor and for cash or property of

equivalent value. Neither provision allows

the department to simply walk away and abandon

an interest in a piece of property which has

some considerable value to the State. Thus,

the department, as an agency of the State,

cannot, by mere non-use, abandon a property

interest of value to the State without the

express authorization of the General Assembly,

19

which has sole authority to dispose of State

owned property. Defendant Kramer herein, as

Director of the Department of Transportation,

cannot quiet title to property in Plaintiff

without approval of the governor or

legislature.

The proposition that the State cannot

abandon property absent authorization by the

legislature is one which has not been decided

by the courts of Illinois. However, it is not

unprecedented. In Poe v. Department of

Transportation, 32 Or.App. 493, 600 P.2d 939

(1979), the Oregon Appellate Court decided

that, where the state legislature had provided

a statutory scheme for the Simposition of

highway department property, the department

could not abandon property without following

the scheme, no matter how indefinite it may

be. Similarly, in this case the Illinois

legislature has provided a statutory scheme

for the disposition of property no longer

needed for highway purposes, so the department

20

cannot abandon an interest in property without

following that scheme.

The principle that the State cannot abandon

property absent specific authorization by the

legislature is also supported by the rule that

a statute of limitations does not run against

the State. It was a principle of English

common law, later adopted by the courts of

this country, including those of the State of

Illinois, that title to property by adverse

possession cannot be gained as against the

sovereign. Black v. Chicago B&QR. R.

Company, 237 Ill. 500, 86 N.E. 1065 (1909).

Thus, one who possesses and uses property of

the State without authorization or right for a

period of twenty years cannot gain title to

the property by adverse possession. Such a

rule would be of little use if that same

individual could, merely by claiming that the

State's lack of use of the property

constituted abandonment, claim title to it as

abandoned property. A much more logical, and

21

‘ecco 4

consistent, rule would be that the State does

not lose title to an interest in property by

non-use or abandonment absent some affirmative

official act on the part of the State showing

its clear intention to give up its interest.

Such a rule is particularly suitable where, as

in Illinois, the legislature has provided a

means of disposition of unused or unneeded

property.

Once again, this is a question of state

law, which shouid be determined by the courts

of the State of Illinois, not by a federal

court which must assume a decision against the

interest of the state in order to uphold its

own jurisdiction.

CONCLUSION

This honorable court should deny the

Petition for a Writ of Certiorari in this case

because the constitutional issues raised by

the Petitioner are points that are well

22

=

settled by recent opinions of this court. The

decision of the Seventh Circuit is in

accordance with these recent decisions.

Further, a proper discussion of and decision

in this case would necessarily require the

discussion of at least two matters which are

strictly questions of state law and which

should be decided by the State of Illinois and

its courts. The District Court chose to

ignore the issues of state law in order to

maintain its own jurisdiction. The Apellate

Court reversed. The Petition for a Writ of

Certiorari should be denied.

Respectfully submitted,

Neil F. Hartigan

Attorney General

Roy E. Frazier, Jr.

Assistant Attorney General

Springfield, Illinois

Richard E. Quinn

Special Assistant

Attorney General

227 N. E. Jefferson Street

Peoria, Illinois 61602

Telephone: (309) 674-1133

23

APPEROI 2

529

Motion to dismiss is hereby granted and said cause

dismissed.

(No. 74-CC-0847—Claim denied.)

ALuI£ Hicks and Erma E. Hicks, Claimant, v. STATE OF

ILLINOIS, Respondent.

Opinion filed December 22, 1978.

JURISDICTION—Equity and reformation of deeds. The Court of Claims

has limited equitable powers, including authority to enter an award reform-

ing a deed, but such an award would still require some legislative action to

carry out the award.

HOLDERMAN, J.

Claimants seek herein to reform a aeed conveying

certain real estate to the State of Illinois by adding an

exception reserving to them the oil, gas and other min-

erals under said land. No request has been made for an

award for damages, though they do ask that they have

such other relief as the Court deems proper.

On the hearing, no evidence of any money dam-

ages was introduced and therefore the claim was nar-

rowed to sole request that this Court reform the deed.

The evidence shows that on or about May 15, 1972,

Claimants discussed the sale of their property with one

Roger Hazlett, a representative of a firm having a con-

tract with the State to acquire or purchase property for

the State. Claimants testified that they told Hazlett

that they would sell the surface of their f )-acre farm

near Dolan Lake, but that they had leased the coal to

Amax Coal Company for 20 years. Claimants testified

that on or about June 5, 1972, Hazlett returned to their

farm and gave them a check for $28,000.00. Hazlett

brought a deed with him and Hicks and his wife signed

it. Claimants state that Hazlett told them he had

24

530

excluded the minerals rights from the sale of the sur-

face. In fact, the deed did not exclude the minerals

rights.

Hazlett was called as a witness by Claimants. He

testified that he was employed by David Sullivan Land

Services, Inc., which had a contract with the Illinois

Department of Conservation. He stated that on May

15, 1972, he offered Claimants $26,000.00 for their pro-

perty, but that no agreement was made. Hazlett testi-

fied that on May 15, Mr. Hicks told him that he wanted

to retain the minerals. Hazlett advised

Hicks that he would see if there could be a conveyance

without the minerals.

Hazlett further testified that the State would not

accept a deed to the surface only, and that on June 5,

1972, he returned home and read the deed to Mr. Hicks

in its entirety. Hazlett stated that in his opinion, Mr.

Hicks understood that he was conveying both the sur-

face and the mineral rights. The consideration for the

purchase had been increased from the original amount

of $26,000.00 to $28,000.00. Hazlett said he told Mr.

Hicks that the State would not accept a conveyance of

the surface only.

Two issues are before this Court. The first is

whether or not this Court has jurisdiction to reform the

deed as requested by Claimants. The second is whether

the Claimants have proved that there was fraud in the

procurement of the deed.

Claimants argue that unless this Court takes

jurisdiction, they will be without remedy. They point

out that they had originally brought suit in the Circuit

Court of Hamilton County, Illinois, but that the case

was dismissed, based on Ch. 127, Sec. 801, which pro-

vides:

25

531

Ҥ801. Immunity of State as defendant or party in

Court.

Except as provided in ‘an Act to create the Court of

Claims, to prescribe its powers and duties, and to

repeal an Act herein named,’ filed July 17, 1945, as

amended, the State of Illinois shall not be made a

defendant or party in any Court.”

Section 4 of Article 13 of the Illinois Constitution of

1970 provides:

“Except as the General Assembly may provide by

law, sovereign immunity in this State is abolished.”

The Circuit Court of Hamilton County was correct

in dismissing the Claimant’s case against the State.

But the question remains, has the legislature granted

jurisdiction tv this Court to entertain a claim to reform

a deed? In arguing that the Court has jurisdiction to

entertain such a claim, Claimants point out that the

Illinois Constitution of 1970 provides, in part, that:

“every person shall find certain remedy in the laws for all injuries and

wrongs he receives to his person, privacy, property or reputation.”

It is generally held that the Court of Claims has

limited jurisdiction and has only such powers as are

conferred on it by the legislature. See, 33A Jil. Law &

Practice, Ch. 7, §142. The State refers the Court to

Taylor v. Michigan, 360 Mich. 146, 103 N.W.2d 769,

where the Michigan Court of Claims held that it did not

have jurisdiction to hear a declaratory judgment ac-

tion or to reform a contract. The State also cites Blue

Water Excavating Co. v. State, 144 N.W.2d 630, and

Montgomery v. State, 328 N. Y.S.2d 189, where the New

York Court of Claims held that it had jurisdiction to

hear claims for money only, with its equitable powers

limited solely to those set forth in the Act or incidental

to enforcement of a claim for money judgment.

26

‘3 i (> yp att mare top PEG att 45-48

} “77 4

“4 é

eats five trl as grt? RNs 63.3) |

By a a of) Goi vw) Pout) ol & Te, 9 . Pc 7

4 fir > de Enid 1% #3 ,* df) J = ane 4

Jed Pyrie “wi ie Vale ee ek 7 heads 4

Lf fapu ! ,° ae > on z a) , 44 Far

‘

™ P ,% 4 rare >| pIAIe en 1 410 4 ii

2 , at a? we Bike ~ » Sey?

bi pw GF, ¢ oo mre piv

‘ 4 ot fl id << A ee i;

j A 4 |

’ - nl 4 ¥ al tar ste ria ery De e271 £771

u rs - 5. ga 4 ¢ - Geo! net

- “a. « { we m [tL Cc , She yu Si ; yr) ithe

= 4 bd : ie a _*

¥ ow me 71ND Meigs? WAI Fs vets > 2 Se ei 4

«

7 ' f 2 ; tad, «4

0 od’ = M ‘ie 4 ti ¥ 7 iW be ‘ a 5 oth 4 a J a ee A

Joy. Rak bt * _ an rts Hise. Me fete fs a rLt-er re) &

o¢ scans

ei: eat? 6

pag See BEA abe 4

| vest ec ei 2A BGs “ ELE othe

BY at welieibernd] Ged shieds bled acu ae

+= eS widesurye ati dale Sahin qeateee 7

Pi bo

~—esnyalshe B Leon 2 gartiipe yl a¥8G

rele hese “is 6 inepee a atenie: af Jo Wert

oa. Vad Sy Cotes | =pioW

Vee abs ogra

aod ae

eptth be est

wen de! aiid at sath eee elton Soaclamt]

7, 7

532

However, as Claimants point out, there is Illinois

authority to the contrary. In Struve v. State of Illinois,

14 Ill. App. 3d 1092, 303 N.E.2d 32, suit was brought in

the Circuit Court to determine whether the terms of a

lease between the State and the Plaintiff were being

violated. No claim was made for money damages. The

defendants moved to dismiss the case on the grounds

that such an action was one against the State, and was

for the Court of Claims. The Court said:

“We agree with the contention of the defendants that the plaintiffs

dispute should be submitted to the Illinois Court of Claims. Section 8 of the

“Court of Claims Act” [Ill. Rev.Stat. Ch. 27, Para. 439.8(b)], relates the

jurisdiction of the Court of Claims and provides that the Court shall have

jurisdiction to hear and determine:

‘(b) All claims against the State founded upon any contract entered into

with the State of Illinois.’

Regardless of the relief sought, the plaintiff has made a claim against the

State, founded on a contract. These claims should be resolved in the Court of

Claims...”

Claimants also cite Sternberg Co. v. Langhorne

Bond, Director of the Department of Transportation,

30 Ill. App. 3d 874, 333 N.E.2d 260. There, plaintiffs

sought and obtained a temporary injunction against

the Department. On appeal, the Court reversed, hold-

ing that the action was a suit against the State of

Illinois, which the Circuit Court was without jurisdic-

tion to entertain. The Court said:

“The holding does not mean the plaintiff, if wronged, is without

remedy. Plaintiff may avail itself af any remedy provided in the Court of

Claims. Allen v. State, 2 Ill. Ct. Cl. 404, New Era Construction v. State, 6 Ill.

Ct. Cl. 88 and Fuhrer v. State, 22 Ill. Ct. Cl. 144. It is clear that the jurisdic-

tion of the Court of Claims is not limited to money claims, and that one may

pursue remedies in the Court of Claims other than for recovery of a sum of

money. Plaintiff can also raise any fraud as a defense in any action by the

State or the insurance company on the bond.”

Recently, in Hartford Accident & Indemnity Co. v.

State, this Court held that it had jurisdiction to enter a

declaratory judgment, construing an insurance policy.

27

533

The history of the Court of Claims, as described in

“The Illinois Court of Claims: A Study of State Liabil-

ity,”’ published by the University of Illinois Press,

lends further support to this view.

The Constitution of 1870 applied the principle of

sovereign immunity, and only in the General Assem-

bly could one seek relief for wrongs for which the State

was responsible. In 1877, a Claims Commission was

created to hear “all unadjusted claims of all persons

against the State of Illinois... according to the princi-

ples of equity and justice...”

In 1903, the Claims Commission was abolished

and the Court of Claims established with jurisdiction

identical to that of the Claims Commission.

In 1917, the old Court of Claims was abolished and

a new one established “to hear and determine all

claims and demands, legal and equitable, liquidated

and unliquidated, ex contractu and ex delictu, which |

the State, as a sovereign Commonwealth, should in

-quity and good conscience discharge and pay.” (em- .

phasis supplied)

In 1945, the present “Court of Claims Act’ was -

passed. We note that the first three provisions relating _

to the Court’s jurisdiction speaks in broad terms:

“A. Allclaims against the State founded upon any law of the State. . .;

B. All claims against the State founded upon any contract... withthe ©

State...;

C. Allclaims against the State for damages in cases sounding in tort..

We have found no Illinois authority that limits the

Court’s jurisdiction to cases involving monetary dam-

ages. While this is the usual redress sought, what is

there says that we can recommend to the legislature

the payment of damages arising out of deed procured

28

534

by fraud, but we cannot recommend that the legisla-

ture reform the deed itself. Such a conclusion is within

the expressions of the foregoing Appellate Court deci-

sions, and within the spirit for which the Court was

established.

We believe that this Court does possess limited

equitable powers including authority to enter an award

reforming a deed. It must be remembered that such an

award would still require some legislative action to

carry out the award, and that in so holding, the Court

does not imply that it has general equitable powers.

Having decided that we have jurisdiction to enter

an award reforming the deed herein question, we must

next determine whether Claimants have established

the right to reformation.

We have carefully reviewed the record herein, and

conclude that Claimants have failed to meet their

burden of proving that they were mislead by the agent

negotiating the purchase of their property.

It is therfore ordered that this claim be denied.

29

266

Ch. 15, Sec. 210.10, Ill.Rev.Stat., 1973, to request a replacement warrant may

file an action in the Court of Claims for payment.

PER CuRIAM.

(No. 6777—Declaration of rights awarded.)

Orr CONSTRUCTION Company, Claimant, vs. STATE OF

ILLINOIS, DEPARTMENT OF PuBLIC WORKS AND BUILDINGS,

Respondent.

Opinion filed February 3, 1975.

Harry M. Brostorr, Attorney for Claimant.

Witutiam J. Scorr, Attorney General; Saut R.

WEXLER and Martin A. SOL, Assistant Attorneys Gen-

eral, for Respondent.

Contrracts—ambiguity. In construing construction contract, “may” does

not mean “shall” and it is not so construed.

Same—same. If contract is subject to more than one reasonable interpre-

tation, the doubt must be resolved against the party who prepared the contract

and chose the language.

Same—same. Clear and unambiguous language of written contract must

override custom and usage of one of the parties.

Same—damages. Where state improperiy required contractor to use ma-

terial not required by contract, contractor was entitled to damages sustained.

HOLDERMAN, J.

This claim is founded upon a contract entered into by

the respondent with the claimant, a general contractor,

for the construction of a particular section of Illinois

Route 57 Highway in Fayette County.’

The facts are not in dispute. The issues, under which

claimant’s five-count complaint seeks damages in the

,

'The contract is described by the Department of Public Works and Build-

ings as FAI Route No. 57, Project 1-57-3 (73) 134, Section 26 (1A, 1B-1, 2A,

2B-1 Fayette County. Job No. 97-133-68.

30

267

sum of $572,408.12, arise out of a dispute in the

interpretation of “Special Provisions” in the contract

entitled, “Removal and Replacement of Silty Topsoil

Materials”.

This court is called upon to resolve the legal issues

by making a judicial interpretation of the contract pro-

vision in dispute. Hence, without any objections from the

respondent, we granted claimant’s motion to render a

declaratory judgment in this cause pursuant to $57.1 of

the Civil Practice Act. The parties voncede that a dec-

laration of their respective rights under the disputed

provision of the contract which they request this court to

construe may obviate the necessity for further litigation

on the question of damages.

Both parties have informed the court that, if the

legal question is decided in favor of the claimant, there is

a possibility that the parties hereto in conference may

reach a settlement on the amount of claimant’s damages

making it unnecessary to go to trial on that factual issue.

Conversely, if the ruling is favorable to the respondent,

there would be no need for further proceedings in this

cause.

As essential prologue to our interpretation of the

disputed section of the contract, we restate the undis-

puted pertinent facts. On January 24, 1969, the claimant

submitted its sealed propogal for contract with the re-

spondent under which claimant would construct the fol-

lowing: certain mainline grading and drainage for future

pavement and ramps, as Well as frontage roads, drainage

structures, fencing, seeding, clearing and other work; a

triple barrel box culvert; and two steel bridges. This

contract, as bid upon, was prepared and drafted solely by

respondent. It consists of: (a) Plans, (b) Standard Speci-

31

268

fications for Road and Bridge Construction and (c) Spe-

cial Provisions (which supplement the Standard Specifi-

cations.)

The Special Provisions (on page 3 of the contract)

provide, in relevant part:

REMOVAL AND REPLACEMENT OF SILTY TOPSOIL MATERIAL:

Within the following station limits, and, as shown on the cross sections, the

silty topsoil horizon is to be removed and replaced with suitable material.

This silty material shall be removed to a depth sufficient to provide a

minimum thickness of 24 inches of suitable material between the bottom of

the subbase and the remaining soil. The minimum depth of excavation shall be

six (6) inches. The width of excavation shall extend beneath the pavement and

the stabilized portions of the shoulders. The excavated material may be used in

embankments greater than two feet in height and placed in alternate layers

with suitable material. The height of embankment is to be measured from

original ground to bottom of subbase. (Emphasis supplied to the keyword

“may”.)

The silty material as well as material excavated from ditches or other

excavations which has an A-4 classification (HRB classifications) and a silt

content greater than 50% shal! not be placed in embankments less than two (2)

feet in height.

It is hereby understood and agreed that the final determination as to the

materials to be removed and replaced wil! be made by the Engineer in the field

and the plan quantity for Earth Excavation adjusted accordingly.

(Here the contract contains a table listing 21 areas in both the northbound

and southbound pavement, from station number to station numbers, in which

the silty topsoil material was to be removed and replaced.)

Standard Specifications Section 202.03 (p. 31) in

relevant part provides as follows:

“Unless otherwise provided in the plans or specifications, unstable and

unsuitable material shall be disposed of by the contractor at his expense,

outside the limits of the right of way.”

Claimant, in preparing its bid for the contract, un-

derstood the above quoted special provisions and stand-

ard specifications to mean: (1) that the silty topsoil ma-

terial between the indicated stations was unsuitable

material and was to be removed and replaced with suit-

able material; (2) that the unsuitable material was to be

disposed of by the contractor at his expense; (3) that, at

Be.

269

the contractor’s election, he could use the unsuitable

material for fill in embankments greater than two feet in

height, provided claimant placed it in alternate layers

with suitable material; and (4) that, notwithstanding the

quantity for such excavation shown on the plans, the

determination of what was silty material to be removed

and replaced would be made by the State’s Engineer and

the plan quantity for excavation would be adjusted ac-

cordingly.

Claimant, relying on this understanding of the lan-

guage of (3) above, determined that it could furnish a

suostantially lower bid by not using said unsuitable

material in embankments over two feet high, but rather

by disposing of it and providing and using suitable ma-

terial in the embankments. Accordingly, claimant deter-

mined and submitted its bid on that basis; namely, on

claimant’s election to dispose of the silty topsoil material

and to use, instead, suitable borrow material in the

embankments.

Thereafter, the claimant, having submitted the

lowest bid, was awarded the job. Accordingly, on Febru-

ary 24, 1969, claimant entered into the aforesaid con-

tract with the respondent. Except for the insertions of

claimant’s bid prices, this contract is exactly the same as

that drafted by respondent for submission to all contrac-

tors for bidding.

Claimant commenced work on the job. During the

course of the work, respondent’s field engineer ordered

claimant to use said excavated silty material in em-

bankments of two feet or higher, contending that the

election to use said materials sosted with respondent.

Claimant protested this interpretation of the Special

Provisions; informed the respondent that the election to

use said excavation in the embankments rested with the

33

270

claimant; that his proposal had not been based on such

re-use; and apprised respondent that its order would

necessitate substantial additional expense not provided

for in its bid. Respondent, nevertheless, ordered claimant

to use this material. Claimant complied under protest.

The issue thus presented to the court is, whether the

election to use the silty topsoil (unsuitable material)

rests with the claimant contractor or with the State’s

Engineer. The correct answer depends upon whether the

grant of discretion by the word “may” in the following

sentence from the “Special Provisions” supra, is ad-

dressed to the contractor to respondent’s field engineer:

“The excavated material may be used in embankments greater than two

feet in height and placed in alternate layers with suitable material.”

The court takes notice that all of the other four

sentences in the same paragraph from which the above

sentence is lifted, are obviously all addressed to the

contractor, and speak directly to him. They instruct him

as to what he shall or may do, viz.

[1] The silty material shall be removed toadepth................

(2) The minimum depth of excavation shall be 6 inches.

{3} The width of excavation shall extend beneath the pavement .....

[4] The excavated material may be used in embankments ..........

[5] The height of embankments is to be measured from ............

Respondent admits that the sentences we have

numbered 1, 2, 3 and 5 from the paragraph in question

speak to the contractor.

Respondent contends, however, that only one of the

sentences in the paragraph [the sentence we numbered 4]

speaks to the engineer, and grants him discretion

whether to use the excavated material in embankments

over two feet. The language of this paragraph plainly

gives no support to respondent’s contention.

Nor does the language elsewhere in the contract. We

34

271

find that, where the contract does give an election or

judgment to respondent’s engineer, there is an explicit

reference to him. For example, at page 4 of the contract,

under “Filling Existing Wells”:

5. .. . The material of this portion of the fill, its manner of placement

and compaction is subject to the approval of the engineer. . .

8. The balance of the hole is to be filled with sand, embankment mate-

rial, or other soil approved by the engineer; it shall be placed in lifts and

compacted as directed by the engineer. (Emphasis added.)

Again, following page 18 of the contract, at Special

Provisions — “Steady Burning Barricade Lights”:

_ . . The contractor shall replace all batteries on a group basis at 45 days

or such other intervals as may be specified by the engineer. (Emphasis added.)

Unlike any of the foregoing provisions, the sentence

in dispute (“The excavated material may be used in

embankments greater than two feet . . .”] contains no

such explicit reference to the engineer. It logically fol-

lows that no such reference was intended.

The disputed language, it seems to use, is plain and

unambiguous. It tells the contractor he has the choice;

that he “may” use the excavated material. Plainly, it

does not tell him he “may” use the excavated material if

the State so decides, an interpretation which would still

place the election with the contractor. Equally plain, the

language contains no explicit directions or reference to

the engineer. We must disagree with respondent’s con-

tention that none is needed. If the intention had been, as

respondent contends, it would have said: the contractor

shall use the excavated material if the engineer so de-

cides.

“May” does not mean “shall” and it is not so

construed in private contracts. Northwestern Traveling

Men’s Association v. Crawford, 126, Ill. App. 468, 480

(1906) aff'd. 226 Ill. 57.

33

272

In support of its position, respondent points to 94 in

the quoted section of the Special Provisions, which reads:

“It is hereby understood and agreed that the final determination as to the

materials to be removed and replaced will be made by the Engineer in the field

and the plan quantity for earth excavation adjusted accordingly.” (Emphasis

added.)

This paragraph relates to the first paragraph and

merely places the final determination of what is to be

removed with respondent’s engineer. It is apparent, that

this authority was given to the engineer to prevent the

contractor from performing excessive excavation, with a

resulting excessive cost to the State, inasmuch as the

compensation to the contractor for excavation was on a

cubic yard basis. Our interpretation as to the intent and

purpose of the above 44 is further supported by the

closing clause of that paragraph: “... and the plan

quantity for earth excavation adjusted accordingly.” If

there were any question as to the interpretation of this

paragraph, the closing clause eliminates it. The closing

clause makes it clear that the authority of the engineer

in this paragraph is solely to determine and control, for

the protection of the State, the quantity of unsuitable

material to be excavated, and it informs the contractor

that payment would be made on the basis of the actual

quantity excavated, as determined by the engineer, and

not based on the plan quantity of excavation (the quan-

tity shown on the plans). To give this paragraph any

other interpretation, we believe, would emasculate and

give no’meaning to the words, “and the plan quantity for

earth excavation adjusted accordingly’.

We do not see any inconsistency, as respondent sug-

gests, in the language of the two paragraphs in question.

The first one says that the contractor may use excavated

material. The other says that the field engineer shall

make the final determination as the quantity of materi-

als to be removed and replaced. |

36

273

Even if we could in good conscience find that there is

more than one reasonable interpretation of the language

in question, the doubt must be resolved against the

respondent, since the respondent prepared the contract

and chose the language. This venerable rule of contract

construction, firmly established in Illinois, is restated in

ILL.P. Contracts §221 as follows:

“Words which are ambiguous or of doubtful construction are to be con-

strued most strongly against the party who prepared the contract, for the

reason that he chose the language and is responsible for the ambiguities in

his own expression.

“This rule obtains nct only in grants, but extends in principle to all other

engagements and undertakings; and in construing reservations or conditions

inserted in a contract for the benefit of the party who makes them, where there

are clauses which are doubtful or ambiguous, that construction will be adopted

which is least favorable to the party making them.”

Repondent’s brief does not address itself to the “re-

solve-doubts-against-the draftsman” rule. Rather, it

suggests that the intent of the disputed language in the

contract is better understood by (1) reading the contract

as a whole and (2) taking judicial notice of a “custom and

usage” of which the claimant allegedly had or should

have had prior knowledge, viz., “The State has for many

years followed the custom of utilizing the silty material

in embankments as much as possible for economic rea-

sons.” [Departmental Report p. 4.]

Commenting on the last contention first, we believe

that it would have been a simple matter for the respond-

ent to have stated the aforesaid custom in its contract,

which is so explicit on countless other matters of much

less importance. If such a provision had been stated in

the written contract, the claimant would not have been

misled in submitting his bid, and this claim would not

have arisen.

We have carefully examined the authority respond-

ent cites in support of its claim that custom should

37

274

override the clear and unambiguous language of a writ-

ten contract. We believe it would be unconscionable for

this court to announce such a rule in the case before us.

Such a rule would permit other bidders in the future to

be deceived by what purports to be a complete written

contract in plain language on which both parties may

rely. Here the specific language of the contract clearly

distinguishes the case at bar from the rule on which

respondent relies in Chicago Bridge & Iron Co. v. Reli-

ance Insurance Co., 46 Ill. 2d 522, 264 N.E. 2d 134

(1970).

We must reject respondent’s argument that “custom

and usage” should control our interpretation of this con-

tract, a contention that is contrary to the rules stated in

I.L.P. Contracts, §211 “Custom and usage” and the au-

thority of Mulliner v. Bronson, 14 Ill. App. 355 in which

the court said:

“. . . the accustomed mode of dealing between parties in many prior

transactions, can not be sustained, for such a private and special custom could

not control the express words of the contract.”

Turning now to respondent’s argument that a dif-

ferent meaning of the contract may be gleaned from

reading the contract as a “whole” to the end that we

would hold with U.S. Trust Co. of N.Y. v. Jones, 414 Ii.

265, Ill. N.E. 2d 144 (1953), that

“In construing a written instrument, its letter should be controlled by its

spirit and purpose, bearing in mind that the terms employed are servants and

not masters of an intent, and are to be interpreted so as to subserve, and not to

subvert, such intent.”

Respondent then states its conclusion that, “the in-

tent of this contract is to give complete and final super-

vision to the State. Nowhere within the document does

any contrary intent exist.” In pursuing respondent’s

thesis, we started with the disputed provision in which

we found that the word “may” clearly gives the election

38

275

to the contractor and not the State’s engineer. We then

examined the rest of the contract in a futile search for

other language that might change our conclusion.

We have previously reported our analysis of the

Special Provisions and concluded that 44 on page 3, the

only part of these provisions on which respondent relies,

merely places the determination of the quantity of that

material which is to be removed and replaced, with the

engineer in the field; and directs that the plan quantity

for each excavation be adjusted accordingly. Thus, the

only authority delegated to the engineer by said {4 is

limited to the quantity of silty topsoil to be removed (and

replaced). Accordingly, %4’s expressly circumscribed

grant of authority to the engineer bears no relevant

relationship to the use or non-use of the silty material.

Our conclusion inescapably follows that the word “may”

in 42 grants to the contractor the sole option to use the

silty topsoil in embankments over two feet, or not to use

it as claimant determines.

This close textual analysis necessitates our agreeing

with claimant’s interpretation of the contract and is only

confirmed by reading the provisions as an entirety.

Finally, we come to that part of the “whole” contract

on which respondent further attempts to support its case,

the Standard Specifications. In this regard, respondent

refers to selected sections therein, some of which are

skillfully paraphrased to imply what respondent no doubt

wishes it had actually said. Others are irrelevant to the

issue here. We find it significant that respondent fails to

mention perhaps the most relevant and important provi-

sion of all, i.e., the opening sentence of the Special

Provisions which declares:

The following Special Provisions supplement the “Standard Specifications

. . .” and in case of conflict with any part or parts of said specifications, the

said Special Provisions shall take precedence and shal! govern.

39

276

This provision not only destroys any support for

respondent’s contentions, but respondent has failed to

show any significant conflict between the Special Provi-

sions and the Standard Specifications. Moreover, if it be

assumed arguendo that there is a conflict, the contract

itself defines the manner of resolution. The Special Pro-

visions take precedence. These we have held, as a matter

of law, clearly support claimant’s interpretation of the

contract, and we find no material or significant ambigui-

ties that would require us to support our conclusion on

the “resolve doubts against the draftsman” rule.

This court has held in a line of cases over many years

that, when the State is responsible for such matters as

delays, changes of plans, lack of coordination of prime

contractors, or faulty plans, an award will be made for

the increased costs incurred, as a result, by claimant

contractors.

In Arcole Construction Company v. State of Illinois,

11 C.C.R. 423, (1941), the government-prepared plans

and specifications, including a “typical cross-section” of

underground conditions, contained a material misrepre-

sentation which caused the contractor to be misled to his

damage. The court held the contractor entitled to recover

for these damages. The thrust of Arcole applies here. For,

whether the focus be on physical condition or right to

election, the State has misled the bidder equally.

In the case at bar, the contract clearly prescribed

that the contractor “may use excavated material”. Noth-

ing in the contract required the claimant to use exca-

vated material. The engineer in the field had no right tu

compel the contractor to use excavated material in place

of suitable material. Clearly, the field engineer only had

final determination as the amount of unsuitable material

40

277

to be removed and replaced, and not as to the re-use of

the unsuitable material to be removed and replaced.

For all of the foregoing reasons, this court declares

that the election to use or not to use the silty topsoil in

embankments greater than two feet in height rested

with the claimant, and that claimant is entitled to the

damages which resulted from being ordered by the re-

spondent, notwithstanding claimant’s protests, to use

said materia! in embankments greater than two feet in

height.

This declaration of rights is the only relief sought by

the parties in this opinion. If the parties cannot agree

and enter into a joint stipulation as to the actual amount

of claimant’s damages, pursuant to this opinion, further

litigation will be necessary on the questions of fact.

(No. 75-CC-575—Claimant awarded $600.00.)

GUARANTY Crepit Corporation, Agents for Seven Drask

Broruers, Claimant, vs. State or ILLIno1s, DEPARTMENT OF

Pus.ic Arp, Respondent.

Opinion filed February 4, 1975.

GUARANTY CREDIT CoRPORATION, Claimant, pro se.

Wiuram J. Scort, Attorney General; Martin A.

So.., Assistant Attorney General, for Respondent.

Contracts—lapsed appropriation. When the appropriation from which a

claim should have been paid has lapsed, the Court will enter an award for the

amount due claimant.

Per CuRIAM.

41