Lyons Twp. ex rel. Kielczynski v. Vill. of Indian Head Park

• Decision Date: 24 March 2017
• Docket Number: No. 1-16-1574.,1-16-1574.
• Parties: LYONS TOWNSHIP EX REL. John H. KIELCZYNSKI, Plaintiff-Appellant, v. VILLAGE OF INDIAN HEAD PARK, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

2017 IL App (1st) 161574

84 N.E.3d 1118

LYONS TOWNSHIP EX REL. John H. KIELCZYNSKI, Plaintiff-Appellant,

v.VILLAGE OF INDIAN HEAD PARK, Defendant-Appellee.

No. 1-16-1574.

Appellate Court of Illinois, First District, FIFTH DIVISION.

Opinion filed March 24, 2017

Modified Upon Denial of Rehearing June 23, 2017

Loevy & Loevy, of Chicago (Matthew Topic, of counsel), for appellant.

Querrey & Harrow, Ltd., of Chicago (Paul A. Rettberg and Jason Callicoat, of counsel), for appellee.

OPINION

JUSTICE LAMPKIN delivered the judgment of the court, with opinion.

¶1 Relator, John Kielczynski, appeals the dismissal of his two-count complaint against defendant, Village of Indian Head Park (Village), under the Illinois False Claims Act (Act) ( 740 ILCS 175/1 et seq. (West 2014)) pursuant to section 2-619 of the Code of Civil Procedure ( 735 ILCS 5/2-619 (West 2014) ). Relator alleged the Village overbilled for policing services (count 1) and failed to remit collections from traffic fines (count 2) in violation of its contract with plaintiff, Lyons Township. On appeal, relator contends the circuit court erred in finding that his claims were barred by the Act's public disclosure provision and that the Village was immune from liability based on section 2-106 of the Illinois Local Governmental and Governmental Employees Tort Immunity Act (Tort Immunity Act) ( 745 ILCS 10/2-106 (West 2014) ). Based on the following, we reverse and remand for further proceedings.

¶2 FACTS

¶3 During the relevant time period, relator was a retired Lyons Township police officer. From June 2014 to October 2014, relator submitted a number of Freedom of Information Act (FOIA) requests. In response, relator received a 2014-2016 contract for police services between the Village and Lyons Township, as well as copies of traffic tickets written by the Village while in Lyons Township. The contract expressly stated that its purpose was "to provide mobile, well-equipped and trained police officers from [the Village] police department to patrol and provide [p]olice [p]rotection in unincorporated areas within [Lyons Township] on a contract basis." Pursuant to the terms of the contract, the Village was to provide a minimum of 3,120 "man hours per year" in police services for which Lyons Township would compensate a specified dollar amount. Then, on February 11, 2015, relator filed a lawsuit, asserting that the Village had billed Lyons Township for police services not actually provided and that the Village retained revenue from tickets written within Lyons Township in violation of the contract.

¶4 The Village responded by filing a section 2-619 motion to dismiss the suit. The circuit court granted the motion with prejudice, finding relator's claims were barred by the public disclosure provision of the Act because relator's investigation was based on records obtained under FOIA. In addition, the circuit court found the Village was immune from any liability pursuant to section 2-106 of the Tort Immunity Act.

¶5 This appeal followed.

¶6 ANALYSIS

¶7 Relator contends the circuit court erred in dismissing his claims where the public disclosure provision of the Act and section 2-106 of the Tort Immunity Act do not apply to his suit.

¶8 A motion to dismiss pursuant to section 2-619 admits the legal sufficiency of the complaint, but asserts an affirmative matter to otherwise defeat the claim. Patrick Engineering, Inc. v. City of Naperville , 2012 IL 113148, ¶ 31, 364 Ill.Dec. 40, 976 N.E.2d 318. In considering a section 2-619 motion to dismiss, a court reviews all pleadings and supporting documents in a light most favorable to the nonmoving party. Van Meter v. Darien Park District , 207 Ill.2d 359, 367-68, 278 Ill.Dec. 555, 799 N.E.2d 273 (2003). In so doing, the court must determine whether the existence of a genuine issue of material fact precludes dismissal or, absent such an issue of fact, whether the asserted affirmative matter makes dismissal proper as a matter of law. Kedzie & 103rd Currency Exchange, Inc. v. Hodge , 156 Ill.2d 112, 116-17, 189 Ill.Dec. 31, 619 N.E.2d 732 (1993). We review the dismissal of a complaint pursuant to section 2-619de novo . Id . at 116, 189 Ill.Dec. 31, 619 N.E.2d 732.

¶9 I. False Claims Act

¶10 The Illinois False Claims Act is an anti-fraud statute modeled after the federal False Claims Act ( 31 U.S.C. §§ 3729 - 3733 (2006) ). State ex rel. Schad, Diamond & Shedden, P.C. v. National Business Furniture, LLC , 2016 IL App (1st) 150526, ¶ 28, 407 Ill.Dec. 139, 62 N.E.3d 1061. Pursuant to the Act, a party that perpetrates fraud against the State is liable for civil penalties and triple damages. 740 ILCS 175/3(a)(1) (West 2014). A claim under the Act may be raised on the State's behalf by the Attorney General or by a private person, known as a "relator," in a qui tam action. 740 ILCS 175/4(a) - (c) (West 2014). With regard to a qui tam action, the State may choose to intervene or, as in this case, may allow the relator to proceed with the litigation. 740 ILCS 175/(b)(4) (West 2014). In the latter, the relator is considered a party to the action and is entitled to a percentage of the proceeds or settlement if the lawsuit is successful. 740 ILCS 175/4(c)(1), (d) (West 2014).

¶11 The following provisions of the Act are relevant to our analysis and are considered the public disclosure bar to qui tam actions:

"(4)(A) The court shall dismiss an action or claim under this Section, unless opposed by the State, if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed:

* * *

(ii) in a State legislative, State Auditor General, or other State report, hearing, audit, or investigation; or * * *

* * *

unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.

(B) For purposes of this paragraph (4), ‘original source’ means an individual who either (i) prior to a public disclosure under subparagraph (A) of this paragraph (4), has voluntarily disclosed to the State the information on which allegations or transactions in a claim are based, or (ii) has knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions, and who has voluntarily provided the information to the State before filing an action under this Section." 740 ILCS 175/4(e)(4) (West 2014).

The Act defines "State" as:

"(a) ‘State’ means the State of Illinois; any agency of State government; the system of State colleges and universities, any school district, community college district, county, municipality, municipal corporation, unit of local government, and any combination of the above under an intergovernmental agreement that includes provisions for a governing body of the agency created by the agreement." 740 ILCS 175/2 (West 2014).

Accordingly, there are four inquiries that must be conducted by a court to determine whether it has jurisdiction to hear a qui tam suit. State ex rel. Beeler, Schad & Diamond, P.C. v. Target Corp. , 367 Ill.App.3d 860, 868, 306 Ill.Dec. 1, 856 N.E.2d 1096 (2006) ; see also Glaser v. Wound Care Consultants, Inc. , 570 F.3d 907, 913 (7th Cir. 2009). The questions are: (1) whether the alleged "public disclosure" contains allegations or transactions from one of the listed sources of section 4(e)(4)(A) of the False Claims Act ( 740 ILCS 175/4(e)(4)(A) (West 2014)); (2) whether the alleged disclosure was made "public" within the meaning of the False Claims Act; (3) whether the relator's complaint is "based upon" the "public disclosure"; and (4) if the answer is positive for the prior three inquiries, whether the relator qualifies as an "original source" under section 4(e)(4)(B) of the False Claims Act. Id .; 720 ILCS 175/4(e)(4)(B) (West 2014)

¶12 Turning to the case before us, the first question we must address is whether substantially the same allegations or transactions as alleged in relator's claims were publicly disclosed in "a State legislative, State Auditor General, or other State report, hearing, audit, or investigation." Relator contends the circuit court erroneously concluded, in reliance on the United States Supreme Court case Schindler Elevator Corp. v. United States ex rel. Kirk , 563 U.S. 401, 131 S.Ct. 1885, 179 L.Ed.2d 825 (2011), that the FOIA information supporting his claims qualified as "State reports." More specifically, relator argues that, pursuant to the language of the Act, the "State" in this matter is Lyons Township, the government unit on whose behalf the lawsuit was raised, and not Indian Head Park. Therefore, relator maintains that the records supporting his claims that were produced by Indian Head Park pursuant to his FOIA requests do not qualify as "State reports" and, thus, do not bar his claims. Indian Head Park counters that the FOIA documents do qualify as "State reports" under Schindler Elevator Corp. and the Act, where "State" is defined broadly as any State or local government actor. Indian Head Park continues that, because relator's complaint was entirely based upon information provided in the FOIA documents, the complaint was properly dismissed pursuant to the public disclosure provision.

¶13 Our research has not revealed any Illinois case law on the question presented. That said, our analysis requires application of the well-known principles of statutory interpretation. The primary rule of statutory construction is to ascertain and give effect to the intent of the legislature by applying the plain and ordinary meaning of the language of the statute. Hamilton v. Industrial Comm'n , 203 Ill.2d 250, 255, 271 Ill.Dec. 645, 785 N.E.2d 839 (2003). When the statutory language is clear, courts must apply the statute as written. Id . at 256, 271 Ill.Dec. 645, 785 N.E.2d 839. However, if a statute is capable of being understood by reasonably well-informed persons in two or more different ways, the statute is considered ambiguous.

Solon v. Midwest Medical Records Ass'n , 236 Ill.2d 433, 440, 338...