Hampton v. Chi. Transit Auth.

Decision Date20 December 2018
Docket NumberNo. 1-17-2074,1-17-2074
Citation138 N.E.3d 751,2018 IL App (1st) 172074,435 Ill.Dec. 137
Parties Eric HAMPTON, Plaintiff-Appellant, v. The CHICAGO TRANSIT AUTHORITY; The Retirement Plan for Chicago Transit Authority Employees; and The Chicago Transit Authority Retiree Health Care Trust, Defendants-Appellees.
CourtUnited States Appellate Court of Illinois

Margaret A. Lundahl, of Chicago, for appellant.

Karen G. Seimetz and Stephen L. Wood, of Chicago, for appellee Chicago Transit Authority.

Richard W. Burke, Aaron H. Stanton, and Victoria R. Collado, of Burke, Warren, MacKay & Serritella, P.C., of Chicago, for appellee Retirement Plan for Chicago Transit Authority Employees.

PRESIDING JUSTICE McBRIDE delivered the judgment of the court, with opinion.

¶ 1 Plaintiff Eric Hampton was employed as a bus operator for defendant Chicago Transit Authority (CTA) for approximately 28 years. His last day of employment was December 31, 2006, and he began his retirement on January 1, 2007. Beginning in July 2009, premiums for plaintiff's health care were deducted from his retirement annuity payments as established under a 2007 collective bargaining agreement (CBA). He subsequently filed a complaint against defendants, the CTA, the Retirement Plan for Chicago Transit Authority Employees (Retirement Plan), and the Chicago Transit Authority Retiree Health Care Trust (Health Care Trust) (collectively defendants), alleging claims of breach of contract, declaratory judgment, and a constitutional violation based on the reduction of his retiree health care benefits under the 2007 CBA. Plaintiff maintained that his retirement benefits were governed by the 2004 CBA, which expired on December 31, 2006. Defendants moved to dismiss plaintiff's verified second amended complaint under a combined motion pursuant to section 2-619.1 of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-619.1 (West 2014) ) for a lack of standing under section 2-619(a)(9) of the Code (id. § 2-619(a)(9) ) and for failure to state a claim under section 2-615 of the Code (id. § 2-615). Following a hearing, the trial court granted defendants' motions and dismissed plaintiff's complaint with prejudice.

¶ 2 Plaintiff appeals, arguing that the trial court erred in (1) concluding that he lacked standing to challenge the 2007 CBA and (2) finding that each of the counts in his complaint failed to state a cause of action under the 2004 CBA.

¶ 3 Plaintiff began working for the CTA on December 27, 1978. His last day of employment with the CTA was December 31, 2006. During his employment, plaintiff was a member of the Local 241 Amalgamated Transit Union (Union), which represents bus operators and negotiates the CBA with the CTA. He began receiving his monthly retirement payments in January 2007. Both the Retirement Plan and the Health Care Trust were established by the Illinois Pension Code. 40 ILCS 5/22-101, 22-101B (West 2014). The CTA is a "political subdivision, body politic and municipal corporation" created in 1945 by the Metropolitan Transit Authority Act. 70 ILCS 3605/3 (West 2014).

¶ 4 The operative documents in this case are the CBAs from 2004 and 2007. Each CBA is comprised of the Wages and Working Conditions Agreement (WWCA) and the Retirement Plan Agreement. The 2004 CBA was in effect from January 1, 2004, to December 31, 2006. The term of the 2007 CBA was January 1, 2007, to December 31, 2011. The 2007 CBA was not signed until October 2009, but the effective date was retroactive to January 1, 2007. The process to reach the agreement with the 2007 CBA involved an interest arbitration. The Supreme Court has described an interest arbitration as " [a] proceeding that relates to terms of the CBA applicable to multiple employees or employees as a group, rather than to a single employee's grievance.’ " Matthews v. Chicago Transit Authority , 2016 IL 117638, ¶ 13 n.1, 402 Ill.Dec. 1, 51 N.E.3d 753 (quoting the plaintiffs' complaint in the case). An arbitrator issued a decision that modified retiree health care benefits in accordance with proposed legislation and required retirees to pay a portion of their health insurance premiums.

¶ 5 The proposed legislation was enacted as Public Act 95-708 (eff. Jan. 18, 2008) (the Act). The Act created the Health Care Trust to administer the retiree health care benefits. Beginning in July 2009, the Health Care Trust began to deduct portions of health care premiums from the retirees, including plaintiff.

¶ 6 Plaintiff filed his initial complaint in July 2014, asserting claims for breach of contract, promissory estoppel, and declaratory judgment, as well as a challenge to the constitutionality of the Act. Plaintiff asserted that he retired from the CTA on "on or about December 31, 2006," and his health care benefits had been improperly reduced. Defendants filed motions to dismiss plaintiff's complaint under sections 2-615 and 2-619 of the Code ( 735 ILCS 5/2-615, 2-619 (West 2014) ).

¶ 7 On April 13, 2015, the trial court entered a stay pending the Illinois Supreme Court's resolution of Matthews v. Chicago Transit Authority , 2014 IL App (1st) 123348, 381 Ill.Dec. 44, 9 N.E.3d 1163, appeals allowed , Nos. 117638, 117713, 117728, 386 Ill.Dec. 477, 20 N.E.3d 1255 (Ill. Sept. 24, 2014). On May 5, 2016, the supreme court issued its opinion in Matthews , 2016 IL 117638, 402 Ill.Dec. 1, 51 N.E.3d 753. Plaintiff subsequently filed a motion to lift the trial court's stay and for leave to file a first amended complaint, which the court granted.

¶ 8 Plaintiff's verified first amended complaint asserted claims of breach of contract against the Retirement Plan (count I) and the Health Care Trust (count II) for the reduction in his health care benefits under the Act, as well as a declaratory judgment prohibiting all defendants—the Retirement Plan, the Health Care Trust, and the CTA—from charging him premiums or diminishing his health care benefits (count III), an order declaring the Act unconstitutional under article XIII, section 5 of the Illinois constitution ( Ill. Const. 1970, art. XIII, § 5 ) (count IV), and a preliminary injunction against the Retirement Plan prohibiting it from deducting health care premiums from his retirement annuity check (count V). Plaintiff also sought a temporary restraining order consistent with his request for a preliminary injunction, which the circuit court denied.

¶ 9 Defendants moved to dismiss plaintiff's verified first amended complaint under sections 2-615 and 2-619 of the Code. After a hearing, the trial court granted the Retirement Plan's section 2-615 motion to dismiss counts I, III, IV, and V without prejudice and gave plaintiff leave to file a second amended complaint.

¶ 10 Plaintiff filed his verified second amended complaint in January 2017.1 In his complaint, he alleged additional facts regarding the 2007 CBA. He alleged that he applied for retirement on December 8, 2006, and received confirmation of his retirement benefits eligibility on December 22, 2006. Plaintiff alleged for the first time that he retired on December 22, 2006. He further alleged that he had agreed to retire on December 31, 2006, pursuant to a settlement agreement with the CTA over a labor grievance. The verified second amended complaint asserted breach of contract claims against the Retirement Plan (count I) and the Health Care Trust (count II), a request for a declaratory judgment that all defendants—the Retirement Plan, Health Care Trust, and the CTA—could not charge him premiums or diminish his health care benefits because he was not represented by the union during the collective bargaining process (count III), and a claim that the Act was unconstitutional under article XIII, section 5 of the Illinois Constitution ( Ill. Const. 1970, art. XIII, § 5 ) (count IV).

¶ 11 Plaintiff attached a copy of a settlement agreement between himself and the CTA, involving the unrelated labor grievance, to the second amended complaint. Section 2 of that settlement agreement provided:

"The CTA agrees to reinstate [plaintiff] to his position of bus operator with full seniority within twenty (20) days of the execution of this Agreement, but in no event later than November 30, 2006, solely for the purpose of retiring on January 1, 2007 [.] * * * The period of time since [plaintiff's] suspension on December 9, 2004[,] and his discharge on February 4, 2005, through December 31, 2006[,] shall be considered Continuous Service as that term is defined in Section 3.7(3) of the Retirement Plan and referenced in Section 4.3 of the Retirement Plan.
From the date of [plaintiff's] suspension through the date before his retirement effective January 1, 2007 , [plaintiff] agrees that he shall be placed on inactive duty. Should Plaintiff fail to apply for retirement on or before December 14, 2006[,] or if the Retirement Allowance Committee fails to approve [plaintiff's] application for retirement, [plaintiff's] employment status with the CTA will be changed to reflect his resignation effective December 31, 2006. " (Emphases added.)

¶ 12 Section 13 of the grievance settlement also stated: "[Plaintiff] understands that he must file for retirement to be effective January 1, 2007[,] on or before December 14, 2006."

¶ 13 Also attached to plaintiff's complaint was his retirement allowance application, a preprinted form provided by the Retirement Plan, dated December 6, 2006, on which plaintiff stated: "My last day of work will be 12/31/2006. My retirement will start on 01/01/2007." The confirmation letter from the Retirement Plan to plaintiff, dated December 22, 2006, stated: "Congratulations on your retirement, which began [sic ] on January 1, 2007. You will receive your benefits no later than the last business day of each month."

¶ 14 Plaintiff also attached to the second amended complaint a copy of his signed designation or change of retirement plan beneficiary (designation of beneficiary), dated December 27, 1978, which included the following language: "I...

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    ...pursuant to section 2-615 of the Code of Civil Procedure attacks the legal sufficiency of the allegations. Hampton v. Chicago Transit Authority, 2018 IL App (1st) 172074, ¶ 19, 138 N.E.3d 751. In contrast, a motion to dismiss pursuant to section 2-619 admits the legal sufficiency of the all......

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