Illinois court holds that tender of amount sought before class certification motion moots claim

The Illinois Supreme Court recently allowed an appeal from an order finding that the tender to the plaintiffs of the requested relief before a motion for class certification is made served to moot the plaintiffs’ claims.

In Joiner v. SVM Mgmt., LLC, 2019 IL App (1st) 172336-U (Feb. 14, 2019) the plaintiffs, tenants of the defendant landlord, brought a complaint against the landlord alleging a violation of Illinois’ Security Deposit Interest Act, Consumer Fraud and Deceptive Business Practices Act, both arising from the landlord’s failure to pay interest on her security deposit, and a violation of the Rental Property Utility Service Act for the landlord’s failure to provide notice that the tenants were paying the cost to operate some utilities.

Defendant immediately tendered a check to tenant’s counsel “representing your clients’ maximum individual recovery under the” Security Deposit Interest Act and “all court costs and reasonable attorney’s fees as allowed by the court *** ”. Counsel rejected the offer and landlord moved to dismiss the suit contending that the tender of the requested relief mooted tenants’ claims.

The circuit court dismissed the claims which alleged that the failure to pay interest on security deposits as moot and the Rental Property Utility Service Act claim because the plaintiff did not attach a copy of the operative instrument to the complaint. The appellate court upheld the dismissal of the claims for failure to pay interest as moot, but reversed the dismissal on the Rental Property Utility Service Act claim.

On the mootness argument, the court observed that generally, if a defendant tenders the requested relief to the named plaintiff in a class action lawsuit before the plaintiff files a motion for class certification, the underlying cause of action must be dismissed as moot because an actual controversy is no longer pending. In the case before it, the court found that the tender was valid. The tender was for the requested relief: an amount equal to their security deposit along with costs and attorney fees. This relief also matched the statutorily provided remedy set forth in the Security Deposit Act of “an amount equal to the amount of the security deposit, together with court costs and reasonable attorneys fees.”

It did not make a difference to the validity of the tender that the check was payable to the tenants’ attorney, not themselves or even the client fund account of their attorney. This “technical defeat” did not render the tender invalid as it is the intent and action of the party making the tender which is important. And the landlord’s intent was undoubtedly to provide the tenants the entirety of their desired relief.

The court also addressed whether the circuit court relied on current law in finding the claims moot. The circuit court relied on Illinois Supreme Court authority which held that a claim will be dismissed on mootness grounds where the defendant makes a valid tender to plaintiffs before they moved for class certification. The tenants argued that this law is no longer valid in light of the United States Supreme Court’s decision in Campbell-Ewald Co. v. Gomez, 577 U.S. ––––, 136 S.Ct. 663 (2016) where the Supreme Court held that “an unaccepted settlement offer or offer of judgment does not moot a plaintiff’s case.” The appellate court stated that “[d]espite what has occurred federally ***, our supreme court ‘has not yet considered whether, in light of Campbell-Ewald, Illinois courts should continue to draw no distinction between accepted and rejected settlement offers when determining whether a case is moot.’” Because of this, and until the Illinois supreme court says otherwise, the Illinois supreme court cases remain the controlling authority in Illinois. The circuit court therefore relied on the proper law in dismissing the claims as moot.

On May 22, 2019 the Illinois Supreme Court accepted the tenants’ petition for appeal. So this is not the last word on the subject. Watch this space.

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