Fields v. Schaumburg Firefighters' Pension, 1-07-2721.

Citation889 N.E.2d 1167
Decision Date30 May 2008
Docket NumberNo. 1-07-2721.,1-07-2721.
PartiesJohn M. FIELDS, Plaintiff-Appellant, v. SCHAUMBURG FIREFIGHTERS' PENSION BOARD, and Roger Turk, Individually, as President of the Schaumburg Firefighters' Pension Board, Defendants-Appellees.
CourtUnited States Appellate Court of Illinois

Richard J. Reimer, Keith A. Karlson and Chris W. Potthoff, Jr. of Richard J. Reimer & Associates LLC, Hinsdale, for Plaintiff-Appellant.

Thomas R. Allen of Chapekis, Marcus, Allen & Chapekis and Donald L. Bertelle, Chicago, for Defendants-Appellees.

Presiding Justice McBRIDE delivered the opinion of the court:

John M. Fields, a former fire captain of the Village of Schaumburg, filed an action in March 2004 against the Schaumburg Firefighters' Pension Fund and the pension board's president, Roger Turk, regarding a village employee's miscalculation of Fields' retirement pension benefits by almost 43%. Fields alleged the village employee's recalculation of his benefits in 2003 to implement an annual cost-of-living increase was a "final administrative decision" by the board. He further alleged he could retain the recalculation because the board was never given statutory authority to rescind a pension benefits "award" and lost any jurisdiction it might have had by failing to pursue the issue within the 35 day period provided by the Administrative Review Law. 735 ILCS 5/3-101 et seq. (West 2004); 40 ILCS 5/4-139 (West 2004). In addition to a declaratory judgment to that effect, Fields sought an injunction preventing the board from meeting to reduce or withhold the 43% increase. Cross-motions for summary judgment were filed and resolved in favor of the defense. Fields appeals.

An appeal involving undisputed facts and the interpretation of statutory provisions presents a question of law we address de novo. Sola v. Roselle Police Pension Board, 342 Ill.App.3d 227, 230, 276 Ill.Dec. 805, 794 N.E.2d 1055, 1057 (2003); Shields v. Judges' Retirement System of Illinois, 204 Ill.2d 488, 491-92, 274 Ill.Dec. 424, 791 N.E.2d 516, 518 (2003). The standard for reviewing the entry of summary judgment is also de novo. Financial Freedom v. Kirgis, 377 Ill.App.3d 107, 130, 315 Ill.Dec. 537, 877 N.E.2d 24, 44 (2007).

The following legal principles and undisputed facts are pertinent. The composition of the Schaumburg Firefighters' Pension Fund Board is specified by statute. See 40 ILCS 5/4-121 (West 2004). Members of the board are deemed fiduciaries with respect to the pension fund or retirement system (40 ILCS 5/1-101.2 (West 2004)), and may be held personally liable for breach of any fiduciary duty established by the Illinois Pension Code. 40 ILCS 5/1-109, 1-114 (West 2004). The board is charged with controlling and managing the pension fund, including any investment expenditures and income and all payments to disabled and retired firefighters, their surviving spouses, and other dependents. 40 ILCS 5/4-123 (West 2004). The Pension Code specifies how one becomes entitled to a disabled or retired firefighter's pension. See e.g., 40 ILCS 5/4-107 (West 2004). The Pension Code also specifies how creditable service as a firefighter of a municipality is to be calculated (see 40 ILCS 5/4-108 through 4-108.5 (West 2004)), and how an individual's monthly base pension is be calculated. 40 ILCS 5/4-109 (West 2004). The Pension Code further states that a monthly pension of a disabled or retired firefighter is to be increased by 3% annually. 40 ILCS 5/4-109.1 (West 2004). The language of the pension statutes is to be liberally construed in favor of the rights of the pensioner. Shields, 204 Ill.2d at 494, 274 Ill.Dec. 424, 791 N.E.2d at 519.

In December 1991, Fields began receiving nonduty disability benefits of $1,881.88 per month from the Village of Schaumburg. The monthly payments were adjusted to $2,201.67 in January 1993. In April 1997, the payments were recategorized as a retirement pension rather than a disability pension. In April 2002, Fields' $2,201.67 monthly payment was increased by 15% to $2,531.92 because Fields attained the age of 55 and five years had elapsed since he converted from disability to retirement payments.

On January 24, 2003, Keith Wendland, a village employee, sent Schaumburg pension recipients a letter indicating that due to "a recent audit" there would be "changes in the way some of the amounts are calculated for increases due at January 1, 2003," and that the annual recalculations would be delayed by one month. Wendland did not state any specific dollar amount or percentage and he did not indicate the pension board was aware of the audit or intended change in recalculation method.

In February 2003, while recalculating Fields' monthly pension payment to include the 3% annual cost-of-living adjustment he was statutorily entitled to as of January 2003, a village employee erroneously determined the 15% increase in Fields' benefits that was implemented in 2002 should have been implemented in 1992. Therefore, instead of increasing Fields' monthly disbursement to $2,607.88, the employee increased the payments nearly 43% to $3,609.92. The employee compounded the calculation error by cutting a check for $8,755.54 as a back payment for pension benefits that Fields was not actually owed. Village employee Patty Fisher sent the check to Fields with a letter stating:

"Due to the change in your status,1 a raise in your pension amount, was overlooked. This raise was due April 2002. I have included a retro check, in the amount of $8,755.74, for the 2002 amount due to you. Your February 2003 check includes the adjustments for January & February.

In March, your pension check will reflect the correct monthly amount of $3,609.92."

This was the full extent of Fisher's letter to Fields and she gave no indication she was speaking on behalf of the board or that the board was aware of the atypical recalculation.

On July 11, 2003, Douglas Ellsworth, the village's director of finance, sent Fields an apologetic letter indicating that a recent review of pension records had disclosed "some errors made in your monthly retirement pension between January 1, 2003 and June 30, 2003." Ellsworth indicated Fields' monthly pension payment would be reduced to the amount he was entitled to, $2,607.88, effective July 2003. Ellsworth enclosed a spreadsheet and summarized that the net effect of the errors was overpayment totaling $14,768.22. He suggested that Fields not spend the recent lump-sum check because the board had an obligation to collect overpayments "received due to miscalculations," intended to address the specifics at its next meeting, and might demand immediate repayment. On July 14, 2003, Ellsworth again corresponded with Fields, indicating that the board was requesting repayment of the $8,756 lump sum within 10 days and would subsequently determine a repayment schedule for the excess $6,012 included in Fields' 2003 monthly payments.

On July 23, 2003, Fields wrote to the finance director to request more information about the recent audit and so-called change in his "status."

On October 27, 2003, an attorney representing the pension fund sent Fields a letter which reiterated the substance of the finance director's two letters. Counsel asked Fields to refund the lump-sum payment within 30 days or prepare for legal action.

On November 25, 2003, Fields' attorney refused to refund the overpayment and demanded that the monthly payments be reinstated to $3,609.92. The attorney characterized the village employee's correspondence on January 24, 2003, as a "decision" of the pension board regarding the amount of Fields' benefits, and asserted that the pension board had only 35 subsequent days in which to "alter, amend or modify" its "decision" before it lost jurisdiction.

On February 10, 2004, the board's attorney sent Fields a letter indicating the board received and discussed Fields' recent correspondence but was not persuaded by it. Furthermore, in lieu of a $14,768.22 lump-sum repayment, the board would begin in March 2004 to deduct $600 from Fields' monthly pension benefits until the overpayment was recouped.

On March 12, 2004, Fields filed the instant suit seeking declaratory and injunctive relief. Consistent with his prior correspondence, he made no mention of the village. Instead, he alleged the pension board "awarded" him a monthly pension of $3,609.92, tendered the lump sum back payment, and then lacked any common law or statutory authority to modify or withhold the amount of pension benefits it had "awarded" or granted to a retiree. He further contended that the pension board's only avenue of relief was to appeal its "final administrative decision" pursuant to the Administrative Review Law (40 ILCS 5/4-139 (West 2002)), and that such review became time-barred 35 days after the "decision" to increase his pension. We note, however, that Fields did not allege the board lacked authority to make deductions from his monthly pension benefits until he had repaid the $14,768.22 overpayment and that he sought no relief to that effect.2

The pension board and its president (hereinafter board) responded to Fields' complaint with an answer denying the material allegations and a motion to dismiss, to which it attached copies of some of the correspondence regarding Fields' benefits. The board did not provide the court with the initial correspondence from the village employees in January and February 2003 which Fields was characterizing as a decision of the board. After full briefing, the circuit court denied the motion to dismiss, finding that the allegation "that the Board had awarded the increased pension at its January meeting" was not disputed by any exhibit with evidentiary value. The court suggested the issue could resolved "if the facts and circumstances surrounding the actions in January and July can be established."

The board subsequently filed a motion for summary judgment and again tendered some of the correspondence and an...

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