Elmhurst ex rel. Mastrino v. Elmhurst

• Decision Date: 07 June 1995
• Docket Number: No. 2-93-0278.,2-93-0278.
• Parties: The CITY OF ELMHURST ex rel. James M. MASTRINO et al., Plaintiffs-Appellants, v. The CITY OF ELMHURST et al., Defendants-Appellees.
• Court: United States Appellate Court of Illinois

649 N.E.2d 1334

272 Ill.App.3d 168

208 Ill.Dec. 673

The CITY OF ELMHURST ex rel. James M. MASTRINO et al., Plaintiffs-Appellants, v. The CITY OF ELMHURST et al., Defendants-Appellees.

No. 2-93-0278.

Appellate Court of Illinois, Second District.

December 2, 1994.

Rehearing Denied June 7, 1995.

COPYRIGHT MATERIAL OMITTED

George C. Pontikes, George C. Pontikes & Associates, Chicago, for City of Elmhurst, James M. Mastrino, Eric Van Berschot, Robert Oliver Williams, Jr.

Kenneth T. Kubiesa, Barbara J. Gosselar, Kubiesa, Power & Adams, Ltd., Oakbrook Terrace, for Florence 'Betsy' Aldred, Thomas P. Borchert, City of Elmhurst, Cynthia C. Cronin, Charles H. Garrigues, Phillip D. Jordan, Phillip D. Jordan, Carol L. Josefowicz, Edward Moran, Donald F. Olson, Norman T. Reinertsen, Larry Schoenbeck, Janice A. Vanek, Gerald 'Jerry' Wolin.

Justice QUETSCH delivered the opinion of the court:

Plaintiffs, the City of Elmhurst ex rel. James M. Mastrino, Robert Oliver Williams, Jr., and Eric Van Berschot, brought this action in the circuit court of Du Page County as taxpayers of the City of Elmhurst (Elmhurst) seeking a declaratory judgment invalidating resolutions approved by the Elmhurst city council which authorized Elmhurst to provide for the defense of two Elmhurst aldermen in a libel lawsuit. Plaintiffs also sought an injunction prohibiting Elmhurst from retaining or paying the fees of counsel for the aldermen in connection with the defense of the libel suit. The trial court dismissed the action pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 1992)) and plaintiffs brought this appeal.

I. BACKGROUND

In September 1992, Joseph Joseph, Guy Spinelli and Mark Entwistle filed a libel action against various individuals. Plaintiffs Spinelli and Entwistle were Elmhurst aldermen, as were four of the defendants: Carol Josefowicz, Janice Vanek, Donald Olson, and Lawrence Schoenbeck. Several other individual defendants named in the libel complaint were not alleged to hold any public office. According to the libel complaint, in August 1992, Joseph, Spinelli and Entwistle were involved in an effort to have a referendum conducted on a question of public policy whether Elmhurst should restrict the number of aldermen to one per ward. The libel complaint alleged that the individual defendants formed a voluntary association known as the "Elmhurst petition integrity committee" for the purpose of opposing the referendum and that certain members of the committee, acting on behalf of all members of the committee, made statements or released documents falsely accusing the plaintiffs of fraud and perjury in connection with their efforts to cause the referendum question to be placed on the ballot.

Aldermen Josefowicz and Vanek both requested that Elmhurst defend and indemnify them in the libel action. Aldermen Olson and Schoenbeck, who were also named as defendants in the libel action, did not make such a request. On November 23, 1992, by a vote of eight to five, the Elmhurst city council authorized Elmhurst to provide for the defense of Alderman Josefowicz. Aldermen Vanek, Olson, and Schoenbeck cast "yea" votes and Alderman Josefowicz abstained from voting. On December 7, 1992, by a vote of eight to three, the Elmhurst city council authorized Elmhurst to provide for the defense of Alderman Vanek. Aldermen Josefowicz, Olson, and Schoenbeck voted "yea" and Alderman Vanek abstained.

On December 15, 1992, plaintiffs filed this action for declaratory and injunctive relief against Elmhurst, its mayor, treasurer, and city manager, and the aldermen who voted in favor of providing a defense for Aldermen Josefowicz and Vanek. Count I of plaintiffs' complaint sought a declaratory judgment that the resolutions approving the defense of Aldermen Josefowicz and Vanek were void because they provided for the unlawful expenditure of city funds for a private purpose. Count II sought a declaratory judgment that the resolutions were invalid because the aldermen named as defendants in the libel suit were disqualified from voting due to a conflict of interest and, therefore, the resolutions failed to receive the affirmative votes of a majority of the members of the city council necessary for passage. Count III sought injunctive relief based on the allegations of counts I and II. Count IV, which is not at issue in this appeal, sought an award of attorney fees.

Defendants filed a combined motion to dismiss pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 1992)) and for summary judgment. In the summary judgment portion of their motion, defendants asserted that the expenditure of funds in the defense of Aldermen Josefowicz and Vanek served a proper public purpose. In the portion of their motion seeking dismissal pursuant to section 2-619, defendants challenged count II, asserting that the aldermen defending against libel allegations had no personal financial interest in the decision to defend the other aldermen. In the portion of their motion seeking dismissal pursuant to section 2-619, defendants also asserted, inter alia, that the plaintiffs lacked standing to bring a taxpayer's action and that the court lacked subject-matter jurisdiction because the action was a "political case."

The trial court granted defendants' motion to dismiss pursuant to section 2-619. The trial court's comments from the bench in announcing its ruling indicate that the court concluded that the conduct alleged in the libel complaint might arguably be within the scope of the official duties of an aldermen and this possibility gave rise to a duty on Elmhurst's part to provide a defense. With respect to count II, the court concluded that no pecuniary interest was alleged that would disqualify any of the four alderman named in the libel action from voting. The trial court explicitly declined to rule on defendants' standing argument and made no mention of defendants' argument regarding subject-matter jurisdiction.

II. LEGALITY OF EXPENDITURE FOR DEFENSE IN THE LIBEL CASE

We first consider whether the trial court properly dismissed count I of plaintiff's complaint—which sought a declaration that the expenditure of funds for the defense of Aldermen Josefowicz and Vanek was improper—and the corresponding request for injunctive relief in count III. Initially we note that although the trial court entered an order of dismissal pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 1992)), the court essentially adopted the reasoning set forth in the portion of defendants' motion seeking summary judgment. Nonetheless, the procedural discrepancy is of no consequence in this case. As explained below, with respect to count I, the record does not support either dismissal under section 2-619 or summary judgment in favor of defendants, and the trial court's order must be reversed.

Section 2-302 of the Local Governmental and Governmental Employees Tort Immunity Act (Immunity Act) provides in pertinent part:

"If any claim or action is instituted against an employee of a local public entity based on an injury allegedly arising out of an act or omission occurring within the scope of his employment as such employee, the entity may elect to do any one or more of the following:

* * * * * *

(b) Indemnify the employee * * * for his court costs incurred in the defense of such claim or action;

(c) Pay, or indemnify the employee * * * for a judgment based on such claim or action." 745 ILCS 10/2-302 (West 1992).

Section 3.21 of the Elmhurst Municipal Code provides, in pertinent part:

"(a) To the fullest extent permitted by the constitution of the State of Illinois and applicable law * * * each of the following officials and employees of the city viz: * * * Each Alderman * * * shall be indemnified, defended and held harmless by the city from and against all liabilities for compensatory damages, expenses of investigation, judgments and amounts paid in settlement which may be imposed upon or reasonably incurred or paid by such official or employee in connection with or resulting from any claim made against him * * * by reason of his being or having been such official or such employee of the city and acting within the scope of his employment or official duties." (Emphasis added.) Elmhurst, Ill., Municipal Code § 3.21 (19—).

Before proceeding, we address defendants' argument that the determination of the Elmhurst city council that the defense of Aldermen Josefowicz and Vanek serves a valid public purpose is entitled to great deference from this court. They cite Clayton v. Village of Oak Park (1983), 117 Ill.App.3d 560, 73 Ill.Dec. 112, 453 N.E.2d 937 and People ex rel. City of Salem v. McMackin (1972), 53 Ill.2d 347, 291 N.E.2d 807, for the propositions that whether a proposed expenditure serves a public interest is, in the first instance, a determination to be made by the legislative body empowered to expend the funds and that the legislative body has broad discretion in making this determination. (See Clayton, 117 Ill.App.3d at 567, 73 Ill. Dec. 112, 453 N.E.2d 937; McMackin, 53 Ill.2d at 355, 291 N.E.2d 807.) Defendants also point out that if the principal purpose of an expenditure is public, the expenditure may not be challenged simply because there is an incidental benefit to private interests. McMackin, 53 Ill.2d at 355, 291 N.E.2d 807; Clayton, 117 Ill.App.3d at 567, 73 Ill.Dec. 112, 453 N.E.2d 937.

Both McMackin and Clayton addressed the question of whether proposed expenditures violated section 1(a) of article VIII of the Illinois Constitution of 1970 which provides that "public funds, property or credit shall be used only for public purposes." (Ill. Const.1970, art. VIII, § 1(a).) However, the subject of the case at bar, a local public entity's authority to expend funds defending or indemnifying its officers and employees, is not governed solely by this constitutional provision. The General Assembly has enacted legi...