Chappell v. Bd. of Trs. of Ill. Mun. Ret. Fund
| Decision Date | 31 August 2020 |
| Docket Number | No. 1-19-2255,1-19-2255 |
| Citation | 445 Ill.Dec. 204,2020 IL App (1st) 192255,166 N.E.3d 233 |
| Parties | Richard CHAPPELL, Plaintiff-Appellee, v. The BOARD OF TRUSTEES OF ILLINOIS MUNICIPAL RETIREMENT FUND and River Forest Township, Defendants-Appellants. |
| Court | United States Appellate Court of Illinois |
Vladimir Shuliga Jr., of Oak Brook, for appellant Board of Trustees of Illinois Municipal Retirement Fund.
Patrick E. Deady and Mikayla S. Hamilton, of Hogan Marren Babbo & Rose, Ltd., of Chicago, for other appellant.
Jerome F. Marconi, of Chicago, for appellee.
¶ 1 In 2002, plaintiff Richard Chappell applied to purchase omitted service credit from the Illinois Municipal Retirement Fund (IMRF) for years 1986 to 2002. During that period, plaintiff was employed as the executive director of a not-for-profit community center that worked under contract with the River Forest Township (Township). Plaintiff knew that the community center was not an IMRF participating employer, and community center employees were ineligible for fund participation. Plaintiff previously considered the community center's participation in IMRF but rejected it as cost prohibitive. Plaintiff applied to purchase omitted service for years 1986 to 2002 credit anyway.
¶ 2 The Township erroneously certified to IMRF that plaintiff was a Township employee from 1986 to 2002. IMRF approved plaintiff's application to purchase 198 months of omitted service credit. In 2015, plaintiff retired and began drawing an IMRF pension, based in part on the omitted service credit. In 2017, an internal audit revealed that the Township had certified plaintiff's pension eligibility in error: plaintiff was not a Township employee from 1986 to 2002. IMRF informed plaintiff that his pension benefits would be recalculated, and he objected. The matter proceeded to an administrative hearing. The hearing officer recommended that board of trustees of the IMRF (IMRF Board) recalculate plaintiff's benefits. The IMRF Board accepted the recommendation. The circuit court on administrative review reversed the IMRF Board's determination. IMRF appeals, and the Township joins in the appeal.
¶ 3 IMRF, and the Township, ask us to reverse the trial court's judgment and to affirm the IMRF Board's determination. They claim the trial court erred when it found that IMRF (1) lacked jurisdiction to reconsider its approval of plaintiff's application to purchase omitted service credit, (2) did not have the statutory authority to recover pension benefits paid to plaintiff in error, and (3) was equitably estopped from recalculating plaintiff's benefits. Based on the foregoing, we reverse the judgment of the circuit court of Cook County, confirm the determination of the IMRF Board, reinstate plaintiff's claim for promissory estoppel raised in count II of his complaint, and remand this case for further proceedings not inconsistent with this opinion.
¶ 5 Plaintiff Richard Chappell was hired as executive director of the River Forest Community Center (Community Center) in February 1986. The Community Center was a not-for-profit organization that contracted with the Township to provide youth and recreational services to River Forest residents. Plaintiff received his salary from the Community Center, not the Township.
¶ 6 On August 1, 2002, the Township hired plaintiff as a facilities manager for the civic center building (Civic Center) that housed the Community Center. The Civic Center was owned by a different entity, the River Forest Civic Center Authority (Civic Center Authority). However, plaintiff received his salary directly from the Township. After August 1, 2002, plaintiff received salaries from both the Township and the Community Center.
¶ 7 Before his formal date of employment with the Township, plaintiff received enrollment information from IMRF, which is a public-employee pension plan with its retirement annuities, death benefits, and disability benefits defined by Illinois law. The Township was an IMRF participant. Therefore, Township employees were eligible to participate in the fund.
¶ 8 On July 31, 2002, plaintiff filled out and submitted a "Notice of Enrollment" application, seeking to participate in a regular IMRF fund. Plaintiff listed the Civic Center Authority as his employer, using the letters "RFCCA," and used the Township's IMRF employer identification number, No. 3227. Based on these representations, plaintiff was successfully enrolled as an IMRF participant, effective August 1, 2002.
¶ 9 Plaintiff also filled out an "Omitted Service Credit" application (Omitted Service Credit Application), seeking to purchase credit for the years he was employed by the Community Center: 1986 to 2002. Plaintiff listed the Community Center as his employer on the application, using the letters "RFCC," and used the Township's IMRF employer identification number, No. 3227. However, plaintiff knew (1) he was not a Township employee from 1986 to 2002 and (2) the Community Center was not a participating IMRF employer. As its executive director, plaintiff had explored the Community Center's participation in the IMRF but abandoned the idea as cost prohibitive. Nevertheless, plaintiff completed the Omitted Service Credit Application and submitted it for processing.
¶ 10 The Township's supervisor and designated IMRF Agent, Veronica Krawczyk (Krawczyk), signed the Omitted Service Credit Application, certifying to IMRF that plaintiff was a Township employee from 1986 to 2002 ("I certify that the following statements of earnings for the above member are in agreement with the governmental unit's payroll records and represent the entire qualifying employment period determined by the governing body"). The certification, however, was incorrect. From 1986 to 2002, plaintiff was employed and paid by the Community Center, not the Township. As a matter of fact, plaintiff was ineligible for participation in the fund during the 1986 to 2002 period. Nonetheless, plaintiff received confirmation from IMRF's "Past Service Unit" in a letter dated September 19, 2002, indicating that he was eligible to purchase 198 months of service credit for $37,893.13.
¶ 11 Plaintiff was also informed by IMRF, in a letter dated October 30, 2002, that he was eligible to purchase six years' worth of reciprocal, out-of-state service credit for $50,590. Plaintiff had worked for the Indiana Park District from January 1979 to August 1985 and submitted an application to purchase omitted service credit for that period as well. Plaintiff opted to purchase only the 198 months of service credit for $37,893.13. To complete the transaction, plaintiff rolled over funds from a separate tax-deferred retirement plan he funded while working for the Community Center. IMRF confirmed receipt of payment in a letter dated January 13, 2003, and informed plaintiff that he purchased 198 months of creditable service. In April 2015, plaintiff retired from the Township and began drawing an IMRF pension in an amount of $3004.97 per month. The pension payment was funded in part by the Township and in part by IMRF.
¶ 12 In April 2017, the Township conducted an internal audit and determined that plaintiff was employed by the Community Center, not the Township, from 1986 to 2002 and that Krawczyk's 2002 certification to IMRF was erroneous. The Township notified IMRF and asked that plaintiff's pension benefits be recalculated. IMRF informed plaintiff in a letter dated April 20, 2017, that (1) he was not entitled to omitted service credit from 1986 and 2002, (2) his pension benefits would have to be recalculated without the 198 months of service credit, and (3) an amount of $7071.03 was left due and owing to the fund.
¶ 13 IMRF afforded plaintiff the opportunity to refute the Township's representation and to appeal the preliminary determination within IMRF. Plaintiff appealed and requested a formal hearing in writing. A hearing was held before an administrative officer on April 18, 2018. Counsel for plaintiff, the Township, and IMRF were present at the hearing. Plaintiff was the only witness called to testify.
¶ 14 Plaintiff testified that he started working for the Community Center in February of 1986. In August 2002, the Township employed him as a facilities manager for the Civic Center. Plaintiff received "enrollment papers from IMRF," read through the information, and realized there was a potential to buy omitted service credit. He proceeded to speak with IMRF field representative Paul Parise (IMRF Field Representative), who told him that (1) "the community center met the criteria, * * * and they could participate" in the IMRF and (2) all plaintiff needed to do was "fill out the omitted service credit [application] and * * * it would be processed." Plaintiff testified that he filled out two forms, seeking omitted service credit for the years he spent working for the Community Center and the Indiana Park District.
¶ 15 Plaintiff was notified by IMRF that he "could buy the years of service from the Community Center" for "$37,900" and the "6 years and 8 months" worth of service with the Indiana Park District for "$50,590." Plaintiff opted to purchase "the years of service from the community center" because "[i]t was more years and it was a lower cost." He was "not in the financial position to be able to purchase both of them at that time." Plaintiff rolled over a "self-funded retirement plan" to purchase 198 months of omitted service credit. An individual, whom plaintiff believed was an IMRF employee working in the financial department, facilitated the transaction. Plaintiff retired in April 2015 and received monthly pension payments. In April 2017, plaintiff was notified by IMRF that his benefits would be cut by two-thirds.
¶ 16 Plaintiff admitted to the hearing officer that he knew the Community Center was not an IMRF participant. Plaintiff further acknowledged that, when he was acting executive...
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