Presiding Justice CAMPBELL delivered the opinion of the court:
In these nine consolidated cases, defendants appeal from orders of the circuit court of Cook County dismissing their counterclaims and affirmative defenses in foreclosure actions brought by the plaintiff creditors. The defendants alleged that the creditors violated the Illinois Interest Act by imposing fees in excess of 3% on loans with an interest rate in excess of 8%. 815 ILCS 205/4.1a(f) (West 2000). The creditors filed motions to dismiss pursuant to sections 2-615 and 2-519 of the Illinois Code of Civil Procedure. 735 ILCS 5/2-615,
Initially, this court addresses the standards of review. The debtors appeal dismissals entered pursuant to sections 2-615 and 2-619 of the Code. A section 2-615 motion admits all well-pleaded facts and attacks the legal sufficiency of the complaint; a section 2-619 motion admits the legal sufficiency of the complaint, but raises defects, defenses or other affirmative matter that defeat the action. Joseph v. Chicago Transit Authority, 306 Ill.App.3d 927, 930, 240 Ill.Dec. 46, 715 N.E.2d 733, 736 (1999). The preemption of Illinois law by a federal statute is generally considered "affirmative matter" properly raised under section 2-619, not section 2-615. Illinois Graphics Co. v. Nickum, 159 Ill.2d 469, 487, 203 Ill.Dec. 463, 639 N.E.2d 1282, 1290-91 (1994). However, as the trial court noted in its opinion, where the affirmative matter is apparent on the face of the pleading, a motion to dismiss may fall within an area of confluence between section 2-615 and section 2-619(a)(9). Nickum, 159 Ill.2d at 486, 203 Ill.Dec. 463, 639 N.E.2d at 1290. Accordingly, this court will not penalize those creditors that filed motions pursuant to section 2-615. Dismissals under either section are reviewed de novo. R-Five, Inc. v. Shadeco, Inc., 305 Ill.App.3d 635, 639, 238 Ill.Dec. 809, 712 N.E.2d 913, 915 (1999).
The supremacy clause of the United States Constitution states that "the Laws of the United States * * * shall be the supreme Law of the Land; * * * any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. Const., art. VI, cl. 2. Congress' purpose "`is the ultimate touchstone' of pre-emption analysis." Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112 S.Ct. 2608, 2617, 120 L.Ed.2d 407, 422 (1992), quoting Malone v. White Motor Corp., 435 U.S. 497, 504, 98 S.Ct. 1185, 1190, 55 L.Ed.2d 443, 450 (1978). "Congress' intent to preempt State law may be manifested by express provision, by implication, or by a conflict between federal and state law."' Busch v. Graphic Color Corp., 169 Ill.2d 325, 335, 214 Ill.Dec. 831, 662 N.E.2d 397 (1996), quoting New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Insurance Co., 514 U.S. 645, 654, 115 S.Ct. 1671, 1676, 131 L.Ed.2d 695, 704 (1995). The creditors argue that the homeowners' counterclaims and affirmative defenses under the Interest Act were preempted by the DIDMCA and the Alternative Mortgage Transaction Parity Act of 1982 (Parity Act). This court will address each statute in turn.
First, we address whether section 4.1a of the Interest Act is preempted by section 501 of the DIDMCA. Section 4.1a of the Interest Act provides in part as follows:
Section 501(a) of the DIDMCA provides in relevant part as follows:
In these cases, the parties stipulated that the loans at issue: (1) were made after March 1, 1980; (2) satisfy the terms of section 527(b) of the National Housing Act; and (3) are not purchase-money first liens on defendants' residential real estate.
In Fidelity Financial Services, Inc. v. Hicks, 214 Ill.App.3d 398, 405-06, 158 Ill.Dec. 221, 574 N.E.2d 15, 20-21 (1991), this court considered this very issue, concluding that the loan at issue was not within the scope of DIDMCA because it was unclear that the trust deed securing the loan was a "first lien" and that the "first lien on residential real property" language in section 501 of the DIDMCA applied only to purchase-money mortgages. In addition, the Hicks court held that when section 4 of the Interest Act, which permits any rate or amount of interest or compensation with respect to loans secured by a mortgage on real estate, was enacted in 1979, the three-point limit found in section 4.1a was not implicitly repealed. Hicks, 214 Ill.App.3d at 401-04, 158 Ill.Dec. 221, 574 N.E.2d at 18-19. In so holding, this court declined to follow the alternative analysis found in dicta in Currie v. Diamond Mortgage Corp. of Illinois, 859 F.2d 1538, 1542 (7th Cir.1988). Hicks, 214 Ill.App.3d at 401-02, 158 Ill.Dec. 221, 574 N.E.2d at 18. The Hicks court noted that Currie held that section 4.1a was preempted by section 501 of the DIDMCA. Hicks, 214 Ill.App.3d at 402, 158 Ill.Dec. 221, 574 N.E.2d at 18.
In these cases, the debtors rely on Hicks to argue that section 4.1a of the Interest Act was not preempted because their loans are not purchase-money mortgages. The creditors argue that the discussion of preemption in Hicks was dicta. The creditors seek to rely on federal case law holding that the Interest Act is preempted by section 501 of the DIDMCA. See Currie, 859 F.2d at 1542; In re Smith, 280 B.R. 436, 443-44 (Bankr.N.D.Ill.2002).
However, neither the trial court nor this court is required to rely on the authorities cited above. We accord considerable deference to a federal agency's interpretation of a federal statute, provided that its interpretation is reasonable and Congress has not expressed a contrary intent. Weatherman v. Gary-Wheaton Bank of Fox Valley, N.A., 186 Ill.2d 472, 483, 239 Ill.Dec. 12, 713 N.E.2d 543, 548 (1999). Uniformity of decision is an important consideration in interpreting federal statutes such that an Illinois court may elect to give "considerable weight" to lower federal court opinions interpreting a federal statute, but those decisions are not controlling on an Illinois court. Sprietsma v. Mercury Marine, 197 Ill.2d 112, 120, 258 Ill.Dec. 690, 757 N.E.2d 75, 80 (2001), rev'd on other grounds, 537 U.S. 51, 123 S.Ct. 518, 154 L.Ed.2d 466 (2002). However, an unpublished federal decision is not precedential in federal courts, let alone Illinois courts. See Illinois State Toll Highway Authority v. Amoco Oil Co., 336 Ill.App.3d 300, 317, 270 Ill.Dec. 696, 783 N.E.2d 658, 672 (2003). Similarly, private letter rulings issued by an administrative agency generally have no precedential effect. See Union Electric Co. v. Department of Revenue, 136 Ill.2d 385, 400, 144 Ill.Dec. 769, 556 N.E.2d 236, 243 (1990). An opinion of the Attorney General is to be given considerable weight, especially on matters of first impression, but is not binding on the courts. Bonaguro v. County Officers Electoral Board, 158 Ill.2d 391, 399, 199 Ill.Dec. 659, 634 N.E.2d 712, 715 (1994).
On the other hand, it is the absolute duty of the circuit court to follow the decisions of the appellate court. If a circuit court genuinely doubts the vitality of a reviewing court decision, the proper manner in which to proceed in a complex or protracted case is to rule in accord with the existing law and to enter a Rule 304(a) (155 Ill.2d R. 304(a)) finding or certify the question for interlocutory appeal under Rule 308 (155 Ill.2d R. 308). In re R.C., 195 Ill.2d 291, 297-298, 253 Ill.Dec. 699, 745 N.E.2d 1233, 1238 (2001). A trial court cannot simply dismiss a ruling of this court on the ground that it is dicta.
Thus, to depart from a decision of this court, the trial court would have to conclude not only that the analysis was dicta, but also that it was not judicial dicta. A trial court cannot ignore an analysis of this court that has dispositive weight in favor of other authorities of lesser weight.
In Hicks, this court addressed the preemption issue, despite the fact that the plaintiff creditor there had not raised the issue on appeal, because the creditor had briefed and argued the issue in the trial court and this court had reversed the dismissal in all other respects. The creditor argued in the alternative that the preemption issue would remain as an issue of fact on remand. Hicks, 214 Ill.App.3d at 405, 158 Ill.Dec. 221, 574 N.E.2d at 20. In granting an appeal of a certified question under Rule 308, this court is required to consider whether the appeal will materially advance the termination of the litigation. 155 Ill.2d R. 308(a). Moreover, it is well-established that this court should affirm a correct dismissal for any reason appearing in the record. E.g., Nielsen-Massey Vanillas, Inc. v. City of Waukegan, 276 Ill.App.3d 146, 151, 212 Ill.Dec. 856, 657 N.E.2d 1201, 1205 (1995). The preemption issue went directly to the applicability of section 4.1a of the Interest Act; avoiding the issue would not have materially advanced the termination of the litigation. Thus, our analysis was necessary to the proper disposition of the case. Accordingly, we conclude that the discussion of preemption in Hicks is judicial dicta that should have received dispositive weight in the circuit court.
The creditors argue in the alternative that Hicks was incorrectly decided. For the reasons that follow, we conclude that we need not reach that question, as circumstances have changed following Hicks.
Section 501(a) of the DIDMCA does not operate without exception. For example, section 501(b)(2) of the DIDMCA provided that if between April 1, 1980, and April 1, 1983, a state declined to have federal preemptions apply, the state usury laws would become effective. 12 U.S.C. § 1735f-7a(b)(2) (2000). The defendants do not claim that Illinois exercised this option. Rather, the defendants claim that section 4.1a of the Interest Act falls within section 501(b)(4) of the DIDMCA, which provides that:
Defendants note that, after Hicks was decided (and after March 31, 1980), the General Assembly passed and the Governor signed Public Act 87-496, which passed an amended version of section 4.1a of the Interest Act. Pub, Act 87-496 (eff. January 1, 1992). Thus, defendants contend that section 4.1a(f) is not preempted.
Plaintiffs respond that the amendment to section 4.1a(f) of the Interest Act did not change the limitations on imposing fees in excess of 3% on loans with an interest rate in excess of 8%. Thus, plaintiffs argue that where an amendatory statute is
Wojciechowski and Gordon are clearly distinguishable, as neither case involved the situation where, as here, Congress passed an allegedly preemptive statute between the initial enactment and the reenactment of the Illinois statute. The parties have cited no Illinois case addressing the precise situation presented here.
The debtors cite Davis v. City of Chicago, 59 Ill.2d 439, 322 N.E.2d 29 (1974), as relevant to the issue on appeal here. Davis involved personal injury suits filed by minors against the City of Chicago in which the Department of Public Aid intervened pursuant to section 11-22 of the Public Aid Code (Ill.Rev.Stat.1967, ch. 23, par. 11-22) to assert against any recovery by the plaintiffs a lien for medical treatment rendered and paid for by the Department. Davis, 59 Ill.2d at 440-41, 322 N.E.2d at 30.
At the time the minors filed their complaints, section 11-22 of the Public Aid Code provided that:
At the same time, section 23 of article IV of the 1870 Constitution provided:
However, the claims in Davis were settled after the effective date of the Constitution of 1970, which contained no prohibition similar to section 23. Davis, 59 Ill.2d at 442, 322 N.E.2d at 31. In considering the constitutionality of the statute, our supreme court stated that:
The creditors correctly note that the consolidated appeals here do not involve the exact circumstances present in Davis. Nevertheless, the Davis court's reasoning is instructive. Our supreme court departed from the rule that in reenacting a statute, any language that is the same as in the prior statute shall be construed as a continuation of such prior provision, not as a new enactment. The Davis court departed from that rule because the case law raised questions as to the validity of the statute under a superior law, i.e., the Illinois Constitution of 1870. The Davis court ruled that the reenactment of the statute years after the adoption of the Illinois Constitution of 1970 showed a legislative intent to resolve questions of the statute's validity. The Davis court did so even though it could have concluded that the legislature meant only to add the provision authorizing the service of notice of the State's claim by certified mail.
In this case, Currie and Hicks raised questions as to whether the three-point limit in section 4.1a of the Interest Act had been implicitly repealed by the adoption of section 4 of the Interest Act, and if not, whether section 4.1a of the Interest Act was preempted by a superior law, i.e., section 501 of the DIDMCA. As in Davis, the reenactment at issue here did not change the statutory language at the heart of the dispute. Unlike Davis, the relevant text of the superior law did not change. However, the superior law here specifically allows states to override the federal law and adopt limits on discount points. Thus, following the reasoning in Davis, the reenactment of section 4.1a may be fairly be said to show a legislative intent to dispel the questions raised by the tensions between Currie and Hicks.
The question remains as to whether the reenactment of section 4.1a actually satisfies the override provision found in section 501(b)(4) of the DIDMCA. Again, the parties found no case law directly on point. However, the United States Court of Appeals for the Eleventh Circuit, when faced with a similar situation, held that, in the absence of a contrary statement, when a state reenacts or raises its usury limit on a particular class of loans, at overrides the Federal Housing Authority (FHA) and Veterans Administration (VA) preemptions of state usury laws for certain FHA- and VA-insured mobile home agreements
The creditors respond that the Doyle court specifically noted that, "[u]nlike the FHA preemption, the DIDMCA preemption is clear in mandating specific language in the state override provision." Doyle, 795 F.2d at 913. However, this statement in Doyle is immediately followed by a footnote citing section 501(b)(2) of the DIDMCA, not section 501(b)(4). Doyle, 795 F.2d at 913 n. 15. The Doyle court then stated that "Congress knew the type of language to use when it intended that state override provisions make specific reference to the federal preemption." Doyle, 795 F.2d at 913. The difference between section 501(b)(2) and section 501(b)(4) of the DIDMCA similarly demonstrates that Congress did not require specific language in a state law to override the federal preemption under the latter section.
Doyle is consistent not only with the reasoning of Davis, but also with the rule of statutory construction that, if the legislature amends a statute after the courts have interpreted a prior version of that statute, the legislature is presumed to have been aware of the judicial decisions and to have acted with that knowledge. Clark v. Han, 272 Ill.App.3d 981, 989, 209 Ill.Dec. 371, 651 N.E.2d 549, 554 (1995), citing People v. Hickman, 163 Ill.2d 250, 262, 206 Ill.Dec. 94, 644 N.E.2d 1147, 1153 (1994). In this case, our General Assembly passed amendments to section 4.1a of the Interest Act on June 26, 1991, after Currie and Hicks were decided. The General Assembly, which is presumed to have been aware of these cases (and the tension between them), did not amend or strike language in section 4.1a to conform it to either Currie or Hicks on the issue of preemption. Instead, the legislature reenacted the broad pre-DIDMCA language regarding the calculation of fees for loans with an interest rate exceeding eight percent. When a state reenacts a usury limitation, it is unlikely that it will do so in ignorance of the federal preemptions or of market forces. Doyle, 795 F.2d at 914.
In this case, the plain language of section 501(b)(4) provides that "any State may adopt a provision of law placing limitations on discount points." 12 U.S.C. § 1735f-7a(b)(4) (2000). There is nothing; in this language that requires that the provision of law adopted be "new," either in the sense of being different from a state's prior limitation on discount points (or lack thereof) or in the sense of occupying a different or new section of a state's constitution or statutory code. To the contrary, the breadth of the override provision in section 501(b)(4) reflects the express recognition of Congress in section 501(a) that usury limitations in state law may be found in state constitutions as well as state statutes. Congress thus recognized that a state law may be adopted by a variety of methods. There is no reason' to base the interpretation of a federal statute on a single word found in the legislative history that did not find its way into the legislation itself. See, e.g., City of Chicago v. Environmental Defense Fund, 511 U.S. 328, 337, 114 S.Ct. 1588, 1593, 128 L.Ed.2d 302, 311 (1994).
The creditors rely on a footnote in a federal case stating that "Illinois has not exercised its right to invoke its own usury statute, even though it effectively amended portions of Section 4.1a in 1992." Smith, 280 B.R. at 443 n.5. The bankruptcy court did not explain what it meant by "invoking" the usury statute or where that concept may be divined in the plain text of the DIDMCA. Nor did the bankruptcy court discuss Doyle on this point; indeed, it may be that the parties in Smith did not cite Doyle. Perhaps more significantly, the creditors fail to note that in Smith, the court ultimately ruled that the debtor would have a chance at trial to show that DIDMCA did not apply to her case. Smith, 280 B.R. at 444. Accordingly, this court is not persuaded it should follow In re Smith.
The creditors further rely on the unpublished federal district court decisions it cited in arguing that the discussion of preemption in Hicks was irrelevant dicta. As noted above, such decisions are not precedential. Similarly, the opinion of our Attorney
In sum, the trial court erred in disregarding Hicks. Moreover, regardless of whether Hicks was correctly decided, the trial court erred in dismissing the debtors' defenses and counterclaims as preempted by the DIDMCA, as the reenactment of section 4.1a of the Interest Act overrode the federal law.
The creditors also contend that the debtors' claims in six of the consolidated appeals are preempted by the Parity Act, which governs "alternative mortgage transactions," including adjustable rate loans. See 12 U.S.C. § 3802(1)(A) (2000). Initially, we note that the trial court's memorandum opinion refers to this argument in passing, but does not state that the defenses and counterclaims at issue are preempted by the Parity Act. Nevertheless, as this court may affirm for any reason appearing in the record and briefed and argued by the parties in the trial court, this court will consider the issue.
The Parity Act provides in part as follows:
The creditors assert that in these appeals, the relevant official is the Director of the Office of Thrift Supervision (OTS).
The parties disagree as to the scope of preemption under section 3803. The debtors maintain that preemption under section 3803(c) occurs only to transactions made in accordance with regulations governing alternative mortgage transactions as issued by the appropriate federal official or agency. The creditors maintain that the debtors are reaching this position through a "strained construction of the OTS Parity Act regulation," which at the relevant time provided as follows:
The regulations identified in section 560.220 address only four aspects of mortgage financing: late charges; prepayments; adjustments to home loans; and disclosures for variable rate transactions. 12 C.F.R. §§ 560.33 through 560.35, 560.210(2000).
Nevertheless, the creditors maintain that this plain reading of the regulation must be wrong. The creditors argue that the supposed fallacy in this reading is demonstrated by the example of a fixed-rate balloon loan, which the creditors state is specifically identified in the Parity Act. Although the creditors do not cite Illinois Ass'n of Mortgage Brokers v. Office of Banks & Real Estate, 308 F.3d 762, 767 (7th Cir.2002), the balloon loan example was considered therein. The Seventh Circuit reasoned that "if it is a variable-rate home equity loan that a federal lender could make under OTS regulations—then all state rules regulating that loan are preempted to the extent required for parity." (Emphasis in original.) Illinois Ass'n of Mortgage Brokers, 308 F.3d at 767-68. The Seventh Circuit held that state regulations are preempted "to the extent that they block state lenders from extending credit on terms open under federal regulations, when the lenders actually comply with the federal regulations." Illinois Ass'n of Mortgage Brokers 308 F.3d at 768. However, the Seventh Circuit then remanded the case for further consideration because:
The debtors' reading of the plain language of the regulation is completely consistent with the federal case law the creditors did cite, each of which involved the regulations identified in section 560.220. National Home Equity Mortgage Ass'n v. Face, 239 F.3d 633 (4th Cir.2001), cert, denied, 534 U.S. 823, 122 S.Ct. 58, 151 L.Ed.2d 26 (2001) (prepayment charges); Davis v. GN Mortgage Corp., 244 F.Supp.2d 950, 959 (N.D.Ill. 2003) (prepayment charges and disclosures); Shinn v. Encore Mortgage Services, Inc., 96 F.Supp.2d 419 (D.N.J.2000) (prepayment charges). Moreover, after analyzing Face and Shinn, among other authorities, the United States Court of Appeals for the Ninth Circuit held that the Parity Act did not preempt all state laws relating to alternative mortgage transactions. Ansley v. Ameriquest Mortgage Co., 340 F.3d 858, 864 (9th Cir.2003). Following the rules outlined above, this court gives considerable weight to Ansley, given the importance of maintaining uniformity of decision in interpreting federal statutes.
This court also gives weight to the implementation and historical interpretation of the Parity Act by the OTS. In a recent rulemaking proceeding, the OTS stated as follows:
This statement lends support to the conclusion that OTS has not otherwise issued the kind of blanket preemption of state regulation of loan-related fees that the creditors in the cases here believe exists.
In this case, the creditors have failed to show that the 3% fee limit on loans with an interest rate in excess of 8% attempts to regulate either the elements of the loans which purportedly make them alternative mortgage transactions or the terms of such loans identified in section 560.220 of the OTS regulations. Thus, the creditors have failed to show that the debtors' defenses and counterclaims are preempted by the Parity Act.
Counterplaintiffs Heath, Coleman and Cushman also seek to appeal an order entered on February 2, 2001, denying them leave to file class counterclaims, again alleging violations of the Interest Act. The lenders respond that this court lacks jurisdiction because the February 2, 2001 order is purely interlocutory.
The decision to enter a Rule 304(a) finding is within the trial court's discretion. Fremont Compensation Insurance Co. v. Ace-Chicago Great Dane Corp., 304 Ill.App.3d 734, 740, 237 Ill.Dec. 709, 710 N.E.2d 132, 137(1999).
An order denying class certification or decertifying a class or an order dismissing class action allegations is not final. Levy v. Metropolitan Sanitary District of Greater Chicago, 92 Ill.2d 80, 84, 65 Ill.Dec. 26, 440 N.E.2d 881, 882 (1982). Thus, the order here could not be appealed independently under Rule 304(a). For suits filed before January 1, 2003, questions regarding class certification were subject to permissive appeals where the trial court had certified the question under Rule 308(a). See Levy, 92 Ill.2d at 84, 65 Ill.Dec. 26, 440 N.E.2d at 882. In suits filed after January 1, 2003, a party may petition this court for leave to, appeal orders granting or denying class certification pursuant to Rule 306(a)(8). Official Reports Advance Sheet No. 5 (March 5, 2003), R. 306(a)(8), eff January 1, 2003.
Counterplaintiffs Heath, Coleman and Cushman do not claim that the order at issue is directly appealable by itself under Rule 304(a). Nor do they contend that the question was certified under Rule 308(a), which would allow this court discretion to hear the matter. Instead, these counterplaintiffs argue that the February 2, 2001 order may be reviewed by this court now because it is a step in the procedural progression leading to the final judgment. Burtell v. First Charter Service Corp., 76 Ill.2d 427, 434-35, 31 Ill.Dec. 178, 394 N.E.2d 380, 383 (1979).
Initially, we note that the rule of Burtell addresses our ability to review judgments not specified in a Notice of Appeal, which is not the problem here. However, even assuming arguendo that Burtell might apply in some cases involving class issues, it cannot be said to apply to a case involving, as here, a partial dismissal and a denial on the class issue that was not based on the substantive dismissal. For example, a motion to certify a class, if granted, presupposes that a cause of action has been stated, but a motion to dismiss is not dependent on a decision on the class-certification issue, since no class action can proceed unless a cause of action is stated. "In the first instance, the two questions are inextricable; in the second instance, they are separate questions which would be raised by different parties." Schlessinger v. Olsen, 86 Ill.2d 314, 318, 56 Ill.Dec. 42, 427 N.E.2d 122, 124 (1981). In this case, the denial of leave to amend was not based on the same reason as the dismissal of the Interest Act defenses and counterclaims. Accordingly, it cannot be said that the order denying leave to amend to include class allegations was a step in the procedural progression leading to the dismissals of the debtors' Interest Act defenses and counterclaims. It is a conditional, interlocutory order subject to change prior to a decision on the merits. See 735 ILCS 5/2-802 (West 2000). Thus,
For all of the aforementioned reasons, the judgment of the circuit court of Cook County is reversed as to the dismissal of the debtors' Interest Act defenses and counterclaims and the case are remanded for further proceeding consistent with this opinion. The appeals of the February 2, 2001, order are dismissed for lack of jurisdiction.
Reversed in part, dismissed in part and remanded.
SHEILA M. O'BRIEN and REID, JJ., concur.
The creditors also note that the legislative history of the amendment of section 4.1a does not refer to Currie or Hicks. Of course, as discussed in greater detail below, absent an ambiguity, statutory interpretation is limited to the plain language of the statute. Moreover, legislative silence upon the judicial interpretation of a statute does not rebut the presumption that the legislature was aware of the case law when the statute was amended. See, e.g., Leischner v. Daniel's Restaurant, Inc., 54 Ill.App.3d 568, 570, 12 Ill.Dec. 534, 370 N.E.2d 157, 158 (1977).