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                                    Appellate Court                             Date: 2019.03.18
                                                                                10:16:11 -05'00'




             Carmichael v. Union Pacific R.R. Co., 2018 IL App (1st) 170075



Appellate Court        MARY TERRY CARMICHAEL, Plaintiff, v. UNION PACIFIC
Caption                RAILROAD COMPANY; PROFESSIONAL TRANSPORTATION,
                       INC., d/b/a PTI; and ACE AMERICAN INSURANCE COMPANY,
                       Defendants (Professional Transportation, Inc., Counterplaintiff-
                       Appellant; Mary Terry Carmichael and Jesse White, Illinois Secretary
                       of State; Counterdefendants-Appellees).



District & No.         First District, Second Division
                       Docket No. 1-17-0075


Filed                  June 26, 2018



Decision Under         Appeal from the Circuit Court of Cook County, No. 12-CH-38582; the
Review                 Hon. Sophia H. Hall, Judge, presiding.



Judgment               Affirmed.


Counsel on             Hugh C. Griffin, of Hall Prangle & Schoonveld, LLC, of Chicago, and
Appeal                 George H. Brant, of Judge, James, Hoban & Fisher, LLC, of Park
                       Ridge, for appellant.

                       John S. Bishof Jr., of Law Office of John Bishof, P.C., of Chicago, for
                       appellee Mary Terry Carmichael.

                       Lisa Madigan, Attorney General, of Chicago (David L. Franklin,
                       Solicitor General, and Evan Siegel, Assistant Attorney General, of
                       counsel), for other appellee.
     Panel                      PRESIDING JUSTICE MASON delivered the judgment of the court,
                                with opinion.
                                Justice Hyman concurred in the judgment and opinion.
                                Justice Pucinski specially concurred, with opinion.


                                                  OPINION

¶1         Plaintiff Mary Carmichael was injured in a car accident while she was a passenger in a van
       owned and operated by defendant Professional Transportation, Inc. (PTI). Carmichael brought
       suit against PTI, alleging that PTI failed to obtain the required limits of uninsured (UM) and
       underinsured (UIM) coverage under section 8-101(c) of the Illinois Vehicle Code (625 ILCS
       5/8-101(c) (West 2010)). PTI argued as an affirmative defense that no private right of action
       could be implied under section 8-101(c). PTI also filed the counterclaim at issue in this appeal,
       challenging the constitutionality of section 8-101(c).
¶2         The trial court found that a private right of action could be implied under section 8-101(c)
       and dismissed PTI’s counterclaim, finding that the section survived constitutional scrutiny.
       Following Carmichael’s voluntary dismissal of her claim against PTI, PTI appealed the
       dismissal of its counterclaim. We find that we do not need to reach the constitutional issues
       raised by PTI because section 8-101(c) does not give rise to a private right of action. Therefore,
       Carmichael’s complaint against PTI should have been dismissed. Accordingly, PTI’s
       counterclaim is moot.

¶3                                           BACKGROUND
¶4         Carmichael, a Union Pacific Railroad Company (Union Pacific) employee, was injured
       when the van in which she was a passenger collided with a vehicle driven by Dwayne Bell. The
       six-passenger van was owned and operated by PTI and was used to transport Union Pacific
       employees between railroad jobsites pursuant to a service contract between PTI and Union
       Pacific. Although Carmichael originally sought recovery for her injuries in a lawsuit against
       PTI, Bell, and others, she dismissed PTI after it became apparent that the accident was caused
       solely by Bell’s negligence.
¶5         Bell carried the minimum liability coverage required under the Vehicle Code at the time:
       $20,000 per person and $40,000 per occurrence. Id. § 7-203. Carmichael settled with Bell for
       the $20,000 per-person policy limit. PTI was insured by defendant ACE American Insurance
       Company (ACE). The ACE policy provided for $5 million in liability limits, but provided the
       minimum UM/UIM coverage of $20,000 per person and $40,000 per occurrence.
       Consequently, no additional sums were available to Carmichael under the ACE policy.
¶6         In October 2012, Carmichael filed this action against PTI, ACE, and Union Pacific. As it
       relates to PTI, Carmichael’s complaint sought a declaration that PTI should be liable for her
       damages arising from the accident in excess of $20,000 up to $250,000 based on her allegation
       that PTI failed to obtain the required limits of UM/UIM coverage under section 8-101(c) of the
       Vehicle Code. Id. § 8-101(c).1 That section, amended in 2006, requires “contract carrier[s]
             1
            Carmichael asserted other claims against Union Pacific and ACE. Union Pacific eventually settled
       with Carmichael, and the trial court granted ACE’s motion to dismiss; neither is a party to this appeal.

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       transporting employees in the course of their employment” in a vehicle “designed to carry 15
       or fewer passengers” to obtain UM/UIM coverage of not less than $250,000 per person. Id.
       Carmichael alleged that PTI’s six-person van, used to transport her in the course of her
       employment, fell into the foregoing category and that PTI’s violation of this statutory
       provision gave rise to a private right of action, entitling her to recover from PTI the difference
       between her $20,000 settlement with Bell and the $250,000 UIM limit mandated by the statute.
¶7          PTI raised a number of defenses to Carmichael’s complaint, including that no private right
       of action could be implied under section 8-101(c) and that the amendment to section 8-101(c)
       violated the special legislation, equal protection, due process, and commerce clauses of the
       state and federal constitutions. PTI also filed a counterclaim in which it challenged the
       constitutionality of the amendment on the same grounds and asserted that a related penal
       statute, section 8-116 of the Vehicle Code (id. § 8-116 (providing that failure to comply with,
       inter alia, the Vehicle Code’s minimum insurance requirements constitutes a Class A
       misdemeanor)), was constitutionally infirm for the same reasons. PTI joined the State of
       Illinois as a counterclaim defendant.
¶8          The State moved to dismiss PTI’s counterclaim, arguing both the insufficiency of PTI’s
       allegations under section 2-615 and the merits of PTI’s constitutional challenges under section
       2-619 of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619 (West 2012)). The State
       pointed out that the proper procedure in the event of a challenge to a statute on constitutional
       grounds was to provide notice of the challenge and “afford the State, political subdivision,
       agency or officer, as the case may be, the opportunity, but not the obligation, to intervene in the
       cause or proceeding for the purpose of defending the law or regulation challenged.” Ill. S. Ct.
       R. 19(c) (eff. Sept. 1, 2006). In addition to defending the amendment to section 8-101(c)
       against PTI’s constitutional challenges, the State requested that the court defer addressing such
       issues until it resolved whether Carmichael was entitled to maintain a private right of action for
       violation of the statute’s provisions.
¶9          PTI later filed a motion to dismiss Carmichael’s complaint, in which it raised the issue of
       Carmichael’s right to sue. Although the trial court initially directed the parties to brief PTI’s
       motion, the court proceeded to first resolve the constitutional issues. On January 30, 2015, the
       court granted the State’s motion to dismiss PTI’s counterclaim, finding that the amendment
       survived constitutional scrutiny. 2 The court then addressed PTI’s motion to dismiss
       Carmichael’s complaint. On July 24, 2015, the court denied PTI’s motion to dismiss, finding
       that Carmichael could pursue a claim for violation of section 801(c)’s mandated UM/UIM
       coverage.
¶ 10        After its motion to reconsider was denied and after Carmichael eventually voluntarily
       dismissed her remaining claims, PTI timely filed its notice of appeal. 3 Carmichael originally
       filed a separate notice of appeal from the dismissal of her claim against ACE, but she
       dismissed that appeal on August 9, 2017. Carmichael refiled her complaint for declaratory
       judgment against PTI, and that case has been stayed pending the outcome of this appeal.

           2
             The court ultimately determined that the proper party to respond was Jesse White, Illinois
       Secretary of State, and the caption of the case was amended accordingly.
           3
             The trial court originally certified issues relating to the constitutionality of the amendment to
       section 8-101(c) pursuant to Illinois Supreme Court Rule 308 (eff. Jan. 1, 2016), but this court denied
       PTI’s petition for leave to appeal.

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¶ 11                                               ANALYSIS
¶ 12       Chapter 8 of the Vehicle Code generally requires persons who operate motor vehicles and
       transport passengers for hire to file with the Secretary of State proof of financial responsibility,
       which may consist of an insurance policy, a surety bond, or a certificate of self-insurance. 625
       ILCS 5/8-101(a) (West 2010) (rendering unlawful the operation of a motor vehicle for hire
       without proof of financial responsibility filed with the Secretary of State); Id. § 8-102 (proof of
       financial responsibility may consist of an insurance policy or other proof of insurance). Before
       2006, the Vehicle Code provided that an insurance policy presented as proof of financial
       responsibility was required to have a bodily injury liability limit of at least $250,000 and a
       property damage limit of $50,000. Id. § 8-109. Section 8-109 was silent regarding the amount
       of required UM/UIM coverage, leaving covered carriers for hire free to purchase the minimum
       UM/UIM coverage of $20,000 per person and $40,000 per occurrence.
¶ 13       The 2006 amendment to section 8-101(c), which, as noted, applies only to contract carriers
       transporting employees in the course of their employment in a vehicle designed to carry 15 or
       fewer passengers, 4 requires such carriers to verify, as part of their proof of financial
       responsibility, UM/UIM coverage of “not less than $250,000 per passenger.” Id. § 8-101(c). It
       is undisputed that PTI did not comply with this provision and that the ACE policy contained
       only the minimum UM/UIM limits of coverage.
¶ 14       PTI contends that we need not reach the constitutional issues relating to the 2006
       amendment to section 8-101(c) because, as a threshold matter, the trial court erred in finding
       that a private right of action exists to enforce that section’s mandatory increased UM/UIM
       insurance requirements. See People v. Waid, 221 Ill. 2d 464, 473 (2006) (courts do not address
       constitutional issues that are unnecessary for the disposition of a case). The State agrees that if
       we accept PTI’s argument and find that Carmichael has no right to sue for a violation of section
       8-101(c), the constitutional issues are moot.
¶ 15       Because the statute on its face does not provide for a private right of action to enforce
       violations of its provisions, we must determine whether such a right can be implied. We review
       de novo the trial court’s finding that Carmichael was entitled to maintain a cause of action
       against PTI for failure to comply with section 8-101(c)’s increased UM/UIM requirements.
       See Kagan v. Waldheim Cemetery Co., 2016 IL App (1st) 131274, ¶¶ 26, 39.
¶ 16       Judicial implication of a private right of action for violation of a statute that does not
       expressly provide a private remedy should be undertaken with caution. Metzger v. DaRosa,
       209 Ill. 2d 30, 42-43 (2004); Fisher v. Lexington Health Care, Inc., 188 Ill. 2d 455, 460 (1999).
       The fact that a statute was enacted to protect a segment of the public does not, standing alone,
       indicate that the legislature meant to create a private right of action to redress a statutory
       violation. Rhodes v. Mill Race Inn, Inc., 126 Ill. App. 3d 1024, 1027 (1984) (citing Hoover v.
       May Department Stores Co., 77 Ill. 2d 93, 103-04 (1979)).
¶ 17       Our supreme court has determined that the following four factors must be established in
       order to judicially imply a private right of action:
                “ ‘(1) [T]he plaintiff is a member of the class for whose benefit the statute was enacted;
                (2) the plaintiff’s injury is one the statute was designed to prevent; (3) a private right of
                action is consistent with the underlying purpose of the statute; and (4) implying a
           4
           PTI suggests that this carve-out provision was the result of lobbying efforts by railroad labor
       unions in lieu of negotiating the issue through collective bargaining.

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                private right of action is necessary to provide an adequate remedy for violations of the
                statute.’ ” Metzger, 209 Ill. 2d at 36 (quoting Fisher, 188 Ill. 2d at 460).
       PTI does not raise any argument regarding the first three factors, but it argues that the fourth
       element of necessity is not met because the statute’s own enforcement mechanisms provide an
       adequate remedy for violations. See Abbasi v. Paraskevoulakos, 187 Ill. 2d 386, 393 (1999)
       (unnecessary to consider first three elements where element of necessity is not met).
¶ 18        Regarding the element of necessity, courts will only imply a private right of action under a
       statute if “ ‘the statute would be ineffective, as a practical matter, unless such an action were
       implied.’ ” Metzger, 209 Ill. 2d at 39 (quoting Fisher, 188 Ill. 2d at 464). Metzger and Fisher
       are instructive on this issue. Metzger, a state police employee, pursued a claim based on the
       state police’s violation of the whistleblower protection provision of the Personnel Code (20
       ILCS 415/19c.1 (West 2002)). Metzger, 209 Ill. 2d at 32. She claimed she experienced adverse
       disciplinary action in retaliation for reporting coworkers’ improper conduct. Our supreme
       court refused to imply a private right of action, finding that the statute’s own enforcement
       mechanisms were sufficient to prevent and punish retaliation against whistleblowers. Id. at 41.
       The court noted that one who violated the Personnel Code could be subject to demotion,
       suspension, or discharge; additionally, violation was a Class B misdemeanor punishable by a
       $1500 fine and imprisonment for up to six months. Id. Accordingly, Metzger concluded: “We
       cannot say that the statutory framework of the Personnel Code is so deficient that it is
       necessary to imply a private right of action for employees to effectuate its purpose.” Id. at 42.
¶ 19        Similarly, in Fisher, plaintiffs sought to pursue an action for damages under section 3-608
       of the Nursing Home Care Act (210 ILCS 45/3-608 (West 1996)), which prohibits a nursing
       home from retaliating against employees who report improper patient treatment. Fisher, 188
       Ill. 2d at 456. Plaintiffs were nurses who were allegedly harassed and, in one case, fired for
       reporting patient neglect. Fisher held that it was not necessary to imply a private right of action
       because “the Act contains numerous mechanisms to encourage the reporting of violations of
       the Act and to prevent and punish retaliation against those who make such reports.” Id. at 464.
       Notably, the statute expressly authorized nursing home residents to bring suit for violations. Id.
       at 464-65. Additionally, a facility that violated the statute’s provisions could be subject to fines
       and suspension or revocation of its license. Id. at 465-66. Because the statute “provided a
       statutory framework to encourage reporting of violations and to punish retaliation,” Fisher
       held that a private right of action for employees was unnecessary to effectuate the statute’s
       purpose. Id. at 467.
¶ 20        The rationale of Metzger and Fisher has been adopted in numerous other Illinois cases that
       decline to imply a private cause of action from statutes that have robust built-in enforcement
       mechanisms. See Kagan, 2016 IL App (1st) 131274, ¶¶ 44, 46 (no implied private right of
       action under Cemetery Care Act (760 ILCS 100/1 et seq. (West 2012)), which “is replete with
       sanctions and remedies for violations of its provisions,” including felony criminal penalties,
       fines, and license revocation); Davis v. Kewanee Hospital, 2014 IL App (2d) 130304, ¶ 38 (no
       implied private right of action under confidentiality provision of Medical Studies Act (735
       ILCS 5/8-2101 (West 2008)), where the Act provides that improper disclosure of privileged
       information is a Class A misdemeanor); Rekosh v. Parks, 316 Ill. App. 3d 58, 73-74 (2000) (no
       implied private right of action under the Funeral Directors and Embalmers Licensing Code
       (225 ILCS 41/1-1 et seq. (West 1998)), which provides penalties for noncompliance including
       fines and suspension or revocation of licenses), abrogated on other grounds by Cochran v.

                                                    -5-
       Securitas Security Services USA, Inc., 2017 IL 121200 (regarding scope of recoverable
       damages in action for interference with right to possess corpse). But see Pilotto v. Urban
       Outfitters West, L.L.C., 2017 IL App (1st) 160844, ¶ 40 (private right of action was necessary
       to effectuate the purpose of the Restroom Access Act (410 ILCS 39/1 et seq. (West 2014)),
       since the only statutory penalty for violation was a fine not to exceed $100; the court found this
       penalty inadequate to make compliance likely, stating that “a retail store that refuses to comply
       with the Act would not even notice the impact of the petty offense penalty”).
¶ 21       As with the foregoing cases, the Vehicle Code contains its own framework for
       enforcement. A vehicle operator who violates section 8-101(c) is subject to both criminal and
       regulatory penalties. Failure to comply with any of the provisions of Chapter 8 is a Class A
       misdemeanor, which allows for a fine up to $2500 and imprisonment for less than one year.
       625 ILCS 5/8-116 (West 2010); 730 ILCS 5/5-4.5-55(a)-(e) (West 2010). Additionally, if an
       insurance policy or bond is withdrawn for a vehicle subject to section 8-101, the Secretary of
       State “immediately shall suspend” the owner’s registration certificates, plates, and stickers for
       that vehicle. 625 ILCS 5/8-113 (West 2010). We cannot say that these statutory penalties are so
       deficient that it is necessary to imply a private right of action to effectuate the statute’s purpose.
¶ 22       Carmichael nevertheless argues that the statutory penalties are inadequate because they do
       not compensate her for the damages she suffered—e.g., by offsetting her medical expenses and
       lost wages. Our supreme court in Metzger rejected an identical argument. According to
       Metzger, plaintiff’s focus on compensation was “inappropriate[ ]” and the proper
       consideration was whether the statutory penalties were sufficient to make compliance with the
       statute likely. Metzger, 209 Ill. 2d at 41.
¶ 23       Carmichael also argues that the statutory penalties are demonstrably inadequate because
       they did not deter PTI from carrying less than the mandated amount of coverage. But
       compliance only needs to be “likely” (id.), not certain. Every implied-right-of-action suit
       involves a defendant’s alleged failure to comply with the statute at issue. If that were by itself
       sufficient to make a private right of action necessary, the element of necessity would be
       meaningless. Such is not the case in Illinois, where, as discussed, courts in numerous cases
       have found that statutory penalties obviate the need for an implied private right of action even
       where those penalties apparently did not impel the defendant to comply with the statute. See id.
       at 42; Fisher, 188 Ill. 2d at 467; Kagan, 2016 IL App (1st) 131274, ¶¶ 44, 46; Davis, 2014 IL
       App (2d) 130304, ¶ 38; Rekosh, 316 Ill. App. 3d at 73-74.
¶ 24       Accordingly, we conclude that section 8-101(c) of the Vehicle Code does not imply a
       private right of action for passengers in vehicles subject to the provisions of that section and
       PTI’s counterclaim challenging the constitutionality of the amendment to section 8-101(c) is
       therefore moot. We affirm the trial court’s January 30, 2015, dismissal of PTI’s counterclaim,
       although on grounds different than that relied on by the trial court.

¶ 25       Affirmed.

¶ 26       JUSTICE PUCINSKI, specially concurring:
¶ 27       I write to specially concur with my colleagues because while I believe that their analysis of
       the current state of the law in Illinois is correct, I think the law is wrong. The whole reason for
       UM and UIM coverage was to take care of expenses of the victims of vehicle crashes.
       Punishing a license holder under the Vehicle Code does nothing to restore the victim and

                                                     -6-
leaves, in my opinion, a gaping hole in the system of justice. I would urge the legislature to
look into this matter.




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