Illinois Supreme Court to Debate Strict vs. Substantial Compliance With Withholding Orders

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Tomorrow morning, the Illinois Supreme Court will hear oral arguments in Schultz v. Performance Lighting, Inc., which poses an important question for domestic relations law: must a Withholding Notice under the Income Withholding for Support Act strictly comply with the requirements of the statute in order to be valid, or is substantial compliance enough? Our detailed summary of the facts and lower court opinions in Schultz is here.

The plaintiff in Schultz was awarded $600 every two weeks in child support upon her divorce. She served a notice to withhold income for support on the defendant, her ex-husband’s employer at the time. The defendant made no payments to the State Disbursement Unit on the ex-husband’s account. Ultimately, the plaintiff sued the defendant, alleging that the defendant had breached a statutory duty to pay, triggering a statutory $100 per day penalty. The Circuit Court found that the plaintiff’s notice didn’t include either the ex-husband’s social security number or the termination date of the obligation. The Court held that strict compliance with the statute was required and dismissed the complaint. The Appellate Court affirmed.

The argument in Schultz is likely to turn on conflicting interpretations of Section 20(c) of the Act. According to the Act, the notice “shall . . . include the Social Security number of the obligor,” it shall “include the date that withholding for current support terminates, which shall be the date of termination of the current support obligation set forth in the order for support,” and it shall “contain the signature of the obligor or the printed name and telephone number of the authorized representative of the public office.” 750 ILCS 28/20(c).

“Shall” is typically interpreted as being mandatory, but that doesn’t answer our question; there are cases holding that “shall” doesn’t necessarily require strict compliance. As the Appellate Court noted, there is a line of authority holding that where “shall” is coupled with a penalty or consequence of some kind, substantial compliance is required. The Appellate Court relied on the fact that non-compliance with a withholding notice triggers a per-day fine for the employer, but the plaintiff will likely point out that this doesn’t really help the analysis. A consequence for the receiver of the notice (i.e., “do this or the target gets penalized”) doesn’t support the same inference that a consequence for the maker of the notice (i.e., “do this or you get penalized”) does.

The defendant is likely to argue the same negative inference relied on by the Appellate Court: because the legislature found it appropriate to provide in the statute that omitting the signature of the obligor or the printed name and telephone number of the authorized representative of the public office doesn’t affect the validity of the notice, it follows that omitting other required data does affect the validity of the notice. The plaintiff is likely to respond by arguing that all the necessary information was either expressly included, could have been easily inferred, or could have been determined by contacting her attorney, whose contact information was included on the notice. It will be interesting to see what the Court ultimately does with Schultz; on the one hand, the Kilbride Court has shown a pragmatic streak in a number of cases, finding for substance over form, but on the other hand, in their most recent strict-vs.-substantial-compliance case, State Bank of Cherry v. CGB Enterprises, Inc., strict compliance won.

We expect Schultz to be decided in the next two to four months.

 

Topics:  Child Support, Divorce, Social Security Numbers, Withholding Requirements

Published In: Business Torts Updates, Civil Procedure Updates, Family Law Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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