Village of Oak Lawn v. Faber

• Decision Date: 21 December 2007
• Docket Number: No. 1-06-2622.,1-06-2622.
• Citation: 880 N.E.2d 659
• Parties: The VILLAGE OF OAK LAWN, Plaintiff-Appellant, v. Joseph FABER, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

880 N.E.2d 659

The VILLAGE OF OAK LAWN, Plaintiff-Appellant, v. Joseph FABER, Defendant-Appellee.

No. 1-06-2622.

Appellate Court of Illinois, First District, Sixth Division.

December 21, 2007.

Barry L. Moss, David J. Freeman, Jeffrey M. Alperin, Tressler Soderstrom Maloney & Priess, LLP, Chicago, for Plaintiff-Appellant.

Mathias W. Delort, Sara M. Gadola, Camille Cribaro-Mello, Robbins, Schwartz, Nicholas, Lifton & Taylor, Ltd., Chicago, for Defendant-Appellee.

Justice JOSEPH GORDON delivered the opinion of the court:

Plaintiff, the Village of Oak Lawn (Oak Lawn), brought a declaratory judgment action against defendant, Joseph Faber, its former long-time employee and village manager, alleging that prior to the date a newly elected village board of trustees was to take office, the outgoing village board voted to terminate Faber's employment so that he could claim a severance package totaling nine months of his salary. Oak Lawn contended that the severance was improper in five respects: that it constituted a gift of public funds (count I), that it was contrary to statutory provisions requiring that a village manager's term be indefinite and that he be terminable at will (count II), that it constituted unjust enrichment (count III), that it was contrary to statutory provisions requiring that the village manager's term not exceed the term of the village president (count IV), and that it violated the prior appropriation rule (count V). The parties brought cross-motions for summary judgment and the circuit court ruled in favor of Faber. Oak Lawn now appeals the circuit court's ruling with respect to counts 1 through IV. For the reasons t hat follow, we affirm.

I. BACKGROUND

Faber was employed by Oak Lawn as "Director of Administrative Services" from 1985. through 1992, and in 1993, Faber became the village manager of Oak Lawn. In issue in this case are the contracts Faber and Oak Lawn subsequently entered into continuing Faber's employment as village manager.¹ The first of those contracts, executed, May 11, 1999, stated that Faber would act as village manager from June 1, 1999, through April 24, 2001. That agreement, which was attached as an exhibit to Oak Lawn's complaint, further states in pertinent part as follows:

"I. TERM OF AGREEMENT

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At any time during the term of this Agreement, in the event that a majority of the Corporate Authorities (4 votes), no longer wish to retain the professional services of FABER, the VILLAGE shall be required to provide written notification thereof to FABER. In the event that such written notification of termination is provided to FABER, the VILLAGE shall be obligated to continue to pay FABER for a period of nine (9) months after notification of termination the herein agreed remunerations and deferred compensation and maintain standard employee benefits for FABER pursuant to the VILLAGE's Pay and Benefits Ordinance and Title 1 of the Oak Lawn Village Code (excluding the accrual of additional benefits effective with notification). In addition, the VILLAGE shall provide FABER with a lump sum payment for all accrued unused vacation days and up to a maximum of ninety (90) accrued unused sick days at FABER's then current rate of pay. The, Village may demand that FABER no longer continue to be the actual employee and/or work in the capacity of Village Manager. The intent herein is to provide a minimum of nine (9) months of continued severance benefits to FABER after his receipt of any written notification of termination, in order to provide FABER with sufficient economic security during the time he is seeking alternative employment.

II. EXTENDING THE TERM/FAILURE TO RENEW

It is hereby agreed by the parties that the employment term may be extended for an additional period anytime during the term of this Agreement, thereby allowing this Agreement to continue in full force and effect in accordance with the desires of the parties involved. In the event the VILLAGE does not, within thirty days (30) after the expiration of the term of this Agreement, renew this Agreement to retain the services of FABER for a period of at least twelve (12) months, under similar terms and conditions of employment, then the VILLAGE shall pay to FABER severance pay in an amount equal to nine (9) months o f his then current salary. In addition, the VILLAGE shall continue to maintain, for FABER, standard employee benefits pursuant to the VILAGE's Pay and Benefits Ordinance and Title 1 of the Oak Lawn Village Code for a period of nine (9) months. Finally, the VILLAGE shall provide FABER with a lump sum payment for all accrued unused vacation days and up to a maximum of ninety (90) accrued unused sick days at FABER's then current rate of pay. The severance pay and benefits are provided in consideration of his years of service to the VILLAGE and in recognition of the nature of the position held by FABER and the difficulty municipal managers have in obtaining comparable alternative employment. Any severance pay due under the Agreement shall be paid in either a lump sum thirty-one (31) days after the expiration of this Agreement or over a nine (9) month period pursuant to the VILLAGE's normal payroll process at the discretion of FABER, unless the parties agree in writing to an alternative payment schedule.

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IX. RESIGNATION

In the event that FABER wishes to terminate his services as provided for by this Agreement, a written notice of resignation shall be submitted to the Corporate Authorities no less than thirty (30) days prior to the effective date of said resignation. * * * FABER, upon his resignation's effective date, shall be eligible only for benefits contained in and previously accrued pursuant to the VILLAGE's Pay and Benefits Ordinance and Title 1 of the Oak Lawn Village Code.

X. JUST CAUSE TERMINATION

In addition to the termination provisions set forth in the Section I above, after an evidentiary hearing upon written charges * * * and a finding of just cause * * * the VILLAGE may terminate this Agreement and the services of FABER. Just cause shall be limited to nonfeasance in official duties and/or any felony conviction. In the event of just cause termination, all remunerations, deferred compensation and standard employee benefits shall immediately cease to be paid or accrue other than previously accrued benefits for which FABER is entitled * * *. IN addition, the nine (9) months of severance benefits, as set forth above, shall not apply in the case of a just cause termination.

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XII. EXPIRATION

In the event a new Agreement is no t negotiated and signed until after this Agreement has expired, but prior to the running of the thirty (30) days referenced in Section II above, the terms and conditions of this Agreement shall extend until a new Agreement is signed or said thirty (30) days has passed."

Oak Lawn's complaint alleged that on April 30, 2001, the board of trustees and Faber entered into an additional agreement, the "First Amendment to Village Manager Agreement" (hereinafter first amended agreement) which extended Faber's term from April 24, 2001, through "the first regular meeting of the president and Board of trustees in April, 2005." This first regular meeting turned out to be April 12, 2005. Apart from extending the term of Faber's employment, this agreement changed none of the terms of the original agreement.

On April 5, 2005, a new village president and two new trustees were elected by Oak Lawn voters. These officials were to take office on May 10, 2005, at the first regular village board meeting in the May. However, prior to that date, on April 27, 2005, the board of trustees and Faber entered into the "Second Amendment to Village Manager Agreement" (hereinafter second amended agreement), which extended the term of Faber's employment until May 10, 2005. In addition, the second amended agreement amended the original agreement by changing the 30-day renewal period to 35 days and by adding an alternative method of paying accrued vacation and sick days.

On May 9, 2005, one day prior to the inauguration of the new president and two new board members, the village board convened a special meeting at which it voted, 4 to 1, with one abstention, to terminate Faber's employment. Following the installation of the newly elected officials on May 10, 2005, Oak Lawn paid Faber his severance package in periodic installments. The payment s were made pursuant to approval of the village board and were eventually made in full.

On May 30, 2006, Oak Lawn filed a motion for summary judgment in which it argued that the circumstances surrounding Faber's termination and the consequent triggering of the severance package "smack[ed] of impropriety, land were] an affront to honest government." Specifically, Oak Lawn argued that it was entitled to summary judgment because the undisputed facts established: (1) that the severance package was an impermissible gift of public funds; (2) that "there was no prior appropriation for the last-minute severance package"; (3) that the severance package extended Faber's employment and was thereby contrary to the "Municipal Code's requirements as to the indefinite term of the village manager and that he be terminable at will"; (4) that the severance package impermissibly extended Faber's employment beyond the term of the president; and (5) that the severance package violated Oak Lawn's code of ethics.

On June 19, 2006, Faber filed a cross-motion for summary judgment and a response to Oak Lawn's motion in which he disputed Oak Lawn's arguments and further contended that Oak Lawn's claims were barred by the voluntary payment and waiver doctrines. On August 10, 2006, the circuit court denied Oak Lawn's motion and granted Faber's motion in its entirety. The record does not reflect that any oral arguments were presented on these motions.

As below, Oak Lawn argues on appeal that the severance pay constituted an impermissible gift of public funds, that Faber...