Thi rd D i vi si on February 9, 2011

Nos. 1-10-0212, 1-10-0554 & 1-10-0642 (Consolidated)

I NN OV AT I VE MO DU LAR SO LU T I ON S, an I llino is ) Appe al fro m the Co rp or at ion, ) Ci rcu i t Cou rt of ) Co o k C o un t y. Plai ntif f-A ppella nt and Cross-Appel

le e, )

) v. ) ) HAZEL CREST SCHOOL DISTRICT 152.5, ) ) No. 06 CH 05767 Defe ndan t-Appell ee ) ) ) ( Ha ze l Cr es t S ch o o l Di st r ict Fin an ce Au t ho r it y, ) Ho no r ab le ) Barbara A . McDonald, Def endan t and Cross -Ap

pel l an t). ) Judge Presidin g. JUS TI CE NE VI LLE deliver ed t he judg ment o f the co ur t , w ith o pinion. Pr esiding J ust ice Qu inn and Ju st ice St eele c onc ur re d in t he judg ment a nd o pinion. OPINION In 200 2, Haz el Cre st Scho ol Dist rict 152 .5 (t he Dist rict ) leas ed p or t abl e c la ssrooms f rom Inno vat iveModul

ar Sol uti ons ( IMS). The Dist rict agr eed t o p ay a ca ncellat ion fee if it c ance lled t he le asesbe f ore the ter m i na tion of the leas e term

s. Later in

2002, due to the Di strict’s f in anci al distress, t he St at e invok ed t he Downstate Schoo l F in ance A uthority f or Elem entary Di stricts Law

(School Fi nan ce Law) (105 ILCS 5/1F-1 e t seq . (West 2004)) and gave the Hazel Crest School Di strict Sch ool Finance Au t hor ity (t he Authority) respo nsi bili ty for the District’s fi

nances. In 2 004 , 2 005 and1-10-0212, 1-10-0554 & 1-10-0642 (Co nsolida ted)

2 2006, the A

uthori ty c ancel l ed th e District’sl eas es wi

th IMS . The Aut hor ity did no t dire ct t he Dis trict t o p ay the canc ellatio n fees e st ablished in t he lease s, a nd the Di strict did n

ot pay the fee s. In 2006, IMS sued t he Aut hor ity and t he Dist rict , se eking a judg ment d eclar ing t hat t he Authority could can cel t he Dist rict ’s co nt ra ct s o nly i n acc or d wit h t he canc ellatio n pr ovisio ns o f tho se c ont ra ct s, a ndsee king a jud gme nt ag ain st t he Dis t r ict fo rt he amo un t o f t he ca nc ella t io n f ee s. On c

ros s- moti ons

f or sum mary j udgm en t, the tri al

court gran

ted a j udgm

en t in f avor of the District, findi ng t hat t he A uth ori ty orde red the Di stri ct n ot to pay the ca nc el l ati on fees and that the order ma

de perform

ance by the D istr ict leg ally i

mpo ssible. T he court separatel y granted IM S a

judg ment d eclar ing t hat t he A uth ori ty la cked th e p owe r to cancel contr acts except in

accord with contract cancellation provisi ons. The Au thori ty a ppea l s f rom th e dec l aratory

judgm ent in docket num

bers 1-10-0554 and 1-10-0642; IMS appeal s f

rom the j udgme

nt in fav or o f the Di

strict in docket numb ers 1-10-0212. We vacate the decl

arator y judgme

nt as moo t , a nd

we af fi rm the s umm ary judgme

nt entered in f av orof the Di strict. We f

in d that once the Stat e i

nvoked the Sch

ool Fi nan ce Law, whi

ch created t he A uth ori ty and gave the Authority excl usiv e contr ol over t he Di strict’s fi nances, the Di strict was di ve ste d of co nt ro l over its finance s and had no st at ut or y aut hor ity t o p ay its d ebt s. T hus, we find that the School Fi

nan ce Law, whi

ch em pow ered th e A uth ori ty to assume cont ro l over t he District’s fi nances, mad e p erf

orm an ceby the Di stri ct l eg al l y i m pos si bl e. A cc ordi ngl y , gi ve n ou r f i nd i ng of imp o ss ibilit y, t he issue co ncer ning t he ext ent of t he Authority ’s power to cancel the Di strict’s l

eases b ec om es moot.

BACK GROUND1-10-0212, 1-10-0554 & 1-10-0642 (Co nsolida ted)

3 In Ju ly 2002 , t he Distr

i ct l ea se d p orta

b l e c l as srooms f

rom IM S i n f our se pa ra te l ea se s, wi th each lea se pe r t ain ing t o o ne o f t he fo ur sc ho o ls d es ign at ed t o r ec eiv e t he cla ss r o o ms. T he Pa lm Ac ad emy, Li

nc oln El em en tary Scho ol, Fro st Middle S cho ol, and Bunc he Pr imary Scho ol u sed t he classrooms. In each

le ase, the District agreed t o lease the classrooms for a term of fi ve y ears, wi th t he Dis trict agreein

g to pay certain a mounts if the Di

strict canc elled t he lease pr ior t o t he end o f the five yea rlea se t er m. Due to the Di strict’s f

in an ci al di str ess, t he St at e invok ed t he st at ut e t hat cr eat ed t he Au t ho r it y, the School Fi

nan ce Law (105 ILCS 5/1F-1 et seq. (West 200 4)) . A cc ordi ng to the Sch ool Finance L aw, t he St at e ga ve the Authority the power “to exercise f

in anci al contro l ove

r the district and to furnish

fi nan ci al assi stance so that the distri ct can provide public ed uca t ion wit hin the d istr ict's j urisd i cti on while per mitt ing t he dist rict t o mee t its o bligat ions to its credi tors an d th e h ol dersof i ts debt.” 10 5 I LC S 5 /1 F- 25 (West 20 04 ). Th e S tate also g av e th e A uth ori ty al l pow er s “ n ec es sa ry to me et i ts res ponsi b i l i ti es an d to c ar ry out i ts purposes and the purposes of thi s Artic le , in cl udin g *** [the] powers

*** [t]o make, cancel , modif y, and execute co ntract s, leases, subl eases, and al

l other i nstrumen ts or agree

men ts.”105 ILCS 5/1F -25 (W est 200 4). On February

18, 2004 , t he Authority wrot e to IMS as foll ows: “[T]he Il li nois le gis la ture has gr an t ed t he [ Au t ho r it y] the extraordinary le gal power to cancel an d/or m odi f y an y Ha ze l Crest l ea se

ag re em en t. [ Cit at io n. ] Co ns eq ue nt ly, t he [Authority] has di

rected me to notify

you th at i

t is termi

nating the lease agreem ents f or t he m odular bui ldi ngs l ocated at Li

ncol n an d *** Palm

Schools due to the Di strict’si

na bi l i ty to m ake p ay men ts under the leas es.”1-10-0212, 1-10-0554 & 1-10-0642 (Co nsolida ted)

4 On Ju ly 25 , 2 00 5, t he A ut ho rit y t er minat ed t he le as e fo r F ros t Middle School, and on A

ugust 31, 2006, the Authority

ter m i n ate d th e l ea se f or B un ch e P ri mar y Sc h ool . Al

th oug h th e A uth ori ty cancel le d the le ases, i

t did not offe

r to pay IMS the sums due unde r t he lease can cell ation pro vi sions, and the Authority did not direct t he Di strict t o pay those sums. On March 22, 2006, I M S sue d th e D i str i ct a n d th e A uth ori ty . In cou n t I, I MS sou

gh t a judg ment de cl

ari ng tha t the A uthori ty coul d n ot ca nc el t he leases except in accord with the lease ca nc el l ati on provi si ons . In cou nt I I, IM S pray

ed f ora j udgme

nt decl arin

g the School Fi

nan ce Law unconsti tut iona l if it perm i tted th e A uth ori ty to null if y al l of the part ies’ rights under t he District’s contr acts. In count III, I MS sought damage s f rom the Di strict for breach of t he lease s re lating t o t he Pa lm, Li nc oln and Frost sch

ools . IMS a

mended the com

plai nt i n Jan uary 2007 to add cl ai

ms related to the Bunch

e l ease. The par t ies move d fo r su mmary judgment on t he co mplaint. The A uth ori ty , i n i ts brief, rel

ie d on Faitoute Iron &

Steel Co. v. Cit y of A sbury Park, 316 U. S. 502 (1 942 ), as p re ced ent est ablishing t he extent of the S tat e’s po wer t o affect t he rights o f a m unici pality’s credi tors wit hou t violat ing t he constitutional

prohib ition agai

nst i mpa iri ng the obl iga tion of contracts. See U.S. Co nst., art. I, §10. The parties an

d the court deci ded to focus fi rst on t he i ssue of wh

ether the School Fi

nan ce Law gave t he Au t hor ity t he po wer t o nu lli fy all of I MS’ s right s und er t he lease agr eement s. T he courtch ara cteri ze d the p arti

es ’ m oti ons asmoti ons

f or“ su m mary de term i na ti on of a m aj or i ss ueof la w wi thin Count III. ” The court said: “Un der the A uthori ty ’s i nte rpreta ti on [ of the School Fi

nan ce Law], i t has unf etter ed discr et io n to ca nc el an y con tract i t wi sh esat a ny ti me w i thou t an y reg ard f or or1-10-0212, 1-10-0554 & 1-10-0642 (Co nsolida ted)

5 prote cti on of the i nterest of the other cont racting party . T hu s, if t he st at ut e is in terpret ed as the Authori

ty urges, the statute is uncons titutional . The C ourt w ill in terpret t he statute as

i t mu st i n the m an ner that ren

ders i t consti tution al . The Court willt her efo re pr esu me tha t t he legislat ur e inte nded t hat t he Aut hor ity abide by t he cond i tions se t on can cel l ati on con tai ne d i n the con tracts.” Ac co r di ng ly, in

its wri tt en o r de rda t ed Ma y 8, 20 08 , t he co ur t he ld that “the Authority

did n ot act wi thi n th e b oun dsof the la w when it can celle d the le ases at i ssue[.]” The orderset a ti me f ram e f or be gi nni ng wr it t en di sc o ve ry. In i ts s ub se qu en t m oti o n f or summ ary judgme

nt, the District relied on section 1F -150(c) 150(c) of t he School Fi

nan ce Law, whi

ch provides that “No mem ber, off ic er, empl oyee, or ag en

t of t he distr ict may tak e any act ion in vi olat ion o f any v

alid ord er o f the Aut hor ity.” 10 5 ILC S 5/ 1F150(c) (Wes t 200 4) . D istr ict a gent s who violat e t he Aut hor ity’s valid o rd er s may face ad mini st ra t ive dis ci pli ne, sus pens ion, or re mova l f rom off ic e. 105 ILCS 5/1F-150(d) (West 2004). The Dis trict cl ai me d t hat t he Aut hor ity’s d ecisio n t o c ance l the lea se s w it h I MS mad e it leg ally imposs ible for t he Dis trictt o p er for m its du t ies und er t he leases, in cludi ng the duties upon cancell ation of the leases. IMS re spo nded t hat t he o rd er s ca ncelling the IM S contracts di

d not qua l i f y as “ va l i d order[s ]” wit hin t he me ani ng of the Sch

ool Fi nan ce Law b ecause the A

uthority l acked the po wer t o nu l l i f y al l of IMS’s rights under the leases. The t rial co ur t not ed t hat in its o rd er of Ma y 8, 2 008 , t he co ur t only ru led o n t he issue of t he ext ent of th e A uth ori ty ’s l eg al pow er to ca n ce l th e l eas es. The co ur t fou nd t hat t he co nt ra ct ing pa rties di d n ot co n tem pl ate the possibil

ity of the Authori

ty preven ting the Di

strict fro m per for ming1-10-0212, 1-10-0554 & 1-10-0642 (Co nsolida ted)

6 it s du t ies un de rt he le ase s. T he co ur t held t hat beca use “the Aut hor ity’s p os t -c ont ra ct act ion and I llino is la w prohib ited

t he Dist rict ’s pe rfo rmance of t he Lea se Ag re ement s, t he Dis trict was excus ed from performa nce un der the doctr in

e of comm

ercia l f rustrat ion.” The court t hen addressed

IMS’s argu men t: “[F]indi ng the Distr ict liable herein because t he Autho rity’s order wa s s ub se qu en t ly deem ed inva lid w o uld re quir e t he Dist rict t o p re judg e t he va

l i di ty of every orde r of t he Authority , thereby

dis rupting the acti

vi tiesof bo t h t he Aut hor ity and t he Distr i ct. Because such prej udgme

nt would ha

ve b een in appropriate, the Distri ct had no choi ce butto foll ow the A

uthori ty’ s order. Th

e District, there f

ore , i s not liable for t he term i na tion of the Le ase

Ag reem en ts.” Ac co r di ng ly, in a wr itt en o rd er dat ed D ece mber 1 8, 200 9, t he co ur t ent er ed jud gment for t he Dis trict on count III o f the com

pla in t and set the case f

or a stat us heari

ng. On January 15, 2010, IMS fi

le d a noticeof appeal , nam in g the order o f Dec em

ber 18, 2009, as the sub je ct of the appeal . The appella te court assi

gned that appeal

docket numb er 1-10-0212. On February 22, 201 0, t he t rial co ur t fou ndthat t he j udgme nt on count III moo ted the issue s re maining in count I and count II. T herefore, t he court dism issed those count s with prejudi ce. IMS move d f or cl arif i cati on, an d the courtresp onde d by

vacati ng th e order of Feb ruary 22, 201 0. Instead, by an order dated February

26, 201 0, t he co ur t gr ant ed I MS a judg ment o n co unt I, dec laring that t he Sc ho o l Fina nc e L aw did not give t he Aut hor ity t he po wer t o nu lli fy all of I MS’ s right s und er t he leases. The j udgm

en t on cou n t I s ti l l l ef t cou n t I I m oot, s o th e c our

t dism i ss ed th at c oun

t wi th pr eju di ce . T he co ur t no t ed t ha t t he o r de rdi sp o se d o f t he ca se in it s e nt ir et y.1-10-0212, 1-10-0554 & 1-10-0642 (Co nsolida ted)

7 The Authority

fi le d a noticeof

appe al , f i l e s tam pe d M arc h 2 , 20 10, ch

al l en gi ng the orde r of May 8, 200 8. The A

pp el l ate Court assi

gned the appeal

docket numb er 1-10-0554. Als o on March 2, 2010, t he Aut hor ity fil

ed a sec ond not ice o f app eal, given do cke t number 1- 10- 064 2, naming t he final j udg ment of Feb

ruary 26, 201 0, a s th

e ord er a ppe al ed . The A

uthori ty sough t onl y rev ers al of the decl aratory j udgm en t entere d on c ount I of

the c omp l ai

nt. IMS amende d it s no t ice o f app eal o n Mar ch 17 , 2 010 , list ing the f i na l j udgm en t of F ebruary 26, 2010 , as the subject of the appeal. This court consolidated the appeals. AN AL YSIS Ju ri sd i cti on The partiesdisagree about o ur jurisdi ction over each of the separa tely docketed appe als. IMS contends that t he order dated May 8, 2008 , f

i na l l y di spose d of

coun t I and coun t II of th e c om pl ai n t, so that the

j udg men t en tere d on co unt II I, by or der dat ed D ece mber 1 8, 200 9, finall y dispo sed of t he en tire case, maki

ng tim ely the not ice of appeal

IMS fi le d on January

15, 2010. We disag re e. In t he order of May

8, 2008, t he t rial co ur t ent er ed no judg ment o n any count, and the court did n ot even men ti on cou n t I or cou n t II i n i ts written order. The order of May 8, 2008, only

resolved a

significant issue u nder lyi

ng co unt II I. It did no t finall y dispo se o f any

cou n t. The judg ment e nt er ed o n co unt III, on Decem ber 18, 2009, stil

l l eft count I and count II unresolved, and the court’s deci si on to set t he matte r f

ora status hearin

g shows that the court recognized, in the order o f Dec em

ber 18, 2009, that it had n

ot entered a fi

nal judgm ent disposing of the case. Because the court did n ot add l anguage to ma ke the j udgme

nt on count III separat el

y a ppea labl e (see Ill. S. Ct. R. 304(a) (eff. F eb. 26, 2010) ), we hav

e no j urisdi

ction over an a

ppeal from the order dat ed Decem

ber 18, 2009, and t he1-10-0212, 1-10-0554 & 1-10-0642 (Co nsolida ted)

8 noticeof appeal

IMS fi le d on January

15, 2010, did not confer j urisdi ction on thi s court. See Ferguson v. Rivers ide Medical Center , 111 Il l . 2d 436 , 441-4 2 (198 5). S imila r ly, t he Authority ’s appeal whi ch ch alle nged the order of May

8, 2008, fai

le d to confer juri sd i cti on on t his co ur t beca use t he no t ice o f app eal did no t list t he final judgment ent ered o n Feb ruary 26, 2010, as the order appealed. See Fergu son , 11 1 I ll . 2 d at 441 -4 2. We dismiss t he appeal giv en docket num

ber 1-10-0554 for lack of j urisdi ction. See Ferguson , 11 1 I ll. 2d at 441-42, 444. In the appeal

giv en docket num

ber 1-10-0642, the Authority correct ly nam ed the fi nal judg ment of Feb

ruary 26, 2010, as the o rd er app ealed . We have jur isdict ion t o c ons ider t he Authority ’s ch

alle ngeto t he d ec lar at o ry ju dg ment in do ck et numb er 1- 10 -0 64 2. S. Ct . R . 3 03 (e ff. May 30, 2008). The amen

ded notice of a

ppeal in docket numb er 1-10-0212, which IMS tim el y f il ed and in whic h I MS name d t he fina l jud gme nt o f February 26, 20 10, as

the orde r appe aled, con

f ers j urisd i cti on on this court to consider IMS’s appeal from the judgm

ent entered i

n f avor of the Di strict on coun t III. S. Ct. R. 30 3 (ef

f . May 30, 200 8). Dec larat or y Judg ment The Au t ho r it y ar gu es t ha t we sho uld vaca t e t he de clara t or y judgment beca use t he judg ment entered i n f av or of t he Dis trict on count III mooted t he issue of wh ether the Authority

had the power to nul l i f y al l of IM S’s ri ghts und er the l eas es. Th e c ourt sho uld no t gr ant a de clara t or y judgment unless t he judgm

ent resolves an “actual controversy ” concerni ng the parties ’ opposing i

nterests. 735 ILCS 5/2-701(a) (West 2008); see Northern Trust C o. v. County of

Lake , 353 Ill . App. 3d 268, 273 (2004 ). We rev

ie w de novo the

que sti on of whether the parti es f

aced an act ual co nt ro ver sy at t he1-10-0212, 1-10-0554 & 1-10-0642 (Co nsolida ted)

9 t ime of t he j udgm

en t. State Farm Mutual Automobile Insurance Co. v. City of Chicago , 39 8 I ll. App. 3d 832 , 833 (2 010). In construin

g the actual controversy

requirem ent, our supreme court explai ned:

“‘Ac t ua l’ inthis

context does not me an that a wrong mus t have b een com

mi tt ed and i nj ury inflict ed . Ra t he r , it requires a showi ng that the un derl y i ng f ac ts a nd i ss ue s of t he case are

not moot or prem

atu re, so a s to re qui

re th e c ourt to p as s j udg

men t on mereab stra

ct p ropos i ti ons of l aw , rend er a n a dv i sor y opi ni on, orgiv e l egal advi ce as to future events." Unde

rgr ound C ontr acto rs As s'n v. City of Chicago , 66 Ill . 2d371, 375 (1 977). Wh erethe determi

nation of an i ss uewi l l not affe ct t he r elie f eit he rpa r t y will o bt ain , t he co ur t sho uld not con sider the i ssue. R.L. Polk & C o. v. Ryan , 296 Il

l . Ap p. 3d 13 2, 136 ( 1998) . We agree with the A

uthority that

the j udgm

en t entere d i n f avor of the District on coun t III m oote d co unt I a nd co unt II . Wit h t he judgm ent on co unt III , t he trial court decided t hat IMS co uld not obtain a ny reli ef, ev en if the A uthority l acked the po wer t o nulli

fy IMS’s contractual righ

ts when it ca nceled t he leases . T he de t er minatio n of t he Aut hor ity’s p ow er had no effect on I MS o nce t he tria l courtdeci ded that IM S c oul d n ot re cov er f rom th e D i str i ct f or b re ach of con tra ct. W e v

ac ate as mo ot t he judg ment entered on count I, where the court hel d that t he A

uthority h ad th e p owe r to cancel the District’s contr acts o nl y i n accord with cont ract c ancellation provisi ons.
Breach of Contract We review de novo t he t rial co ur t ’s de cision t o g ra nt t he Dis trictsummary judg ment o n co unt1-10-0212, 1-10-0554 & 1-10-0642 (Co nsolida ted)

10 III. Travelers Insur

ance Co. v. Eljer Manufacturing, Inc. , 197 I ll . 2d 278, 292 (200 1). I MS argues that t he t rial co ur t misapplied t he doctri n e of l eg al i m pos si b i l i ty or com merc i al f rustrati on b as ed on a m i sc ons tructi on of t he Sc hoo l Finance Law . T he Sc hoo l Finance Law pr ovid es t hat t he Dis trict mus t co mply

wit h t he Au t ho r it y’s “va lid o r de r [ s] , ” a nd an y o ffice rwh o fails t o co mply w it h a va lid order ex po se s hims elf o rhe r se lf to severe sanctions. 105 ILCS 5/1F-1 50(c), (d) (West 200 4) . T he cour t decided that the District’s offi cers must comply

with al l of the Authority’s orders, reg ardless of val idi ty, because the offi

cers cannot det ermi

ne the val idi ty of the ord ers. We fi nd that we ne ed

not ad dr es s I MS ’s ar gu men t . Pe r fo rman ce be ca me le ga lly impo ss ible once t he St at e cr eat ed t he Aut hor ity, be cau se t he Aut hor ity alo ne co nt ro ls the Dist rict ’s finances and t he Dis trict no longer h

as the powerto pa

y i ts d eb ts w i th out th e A uth ori ty ’s approv al of th e p ay men t. Ou rsu pr eme co ur t , in People v. Deatherage , 401 Il l . 25, 31
- 32 ( 19 48 ) , fo rmula t ed t he ap plic ab le princi ples:

“ A

commun ity un it school district, li

ke any ot her school district establi sh e d un de ren ab ling leg isla t io n, is entirel y s ubj ect to the wi

l l of the legi slature thereaf

ter. W i th or without t he co nse nt o f t he inha bit an t s o f a s ch o o l dis t r ict , o ve rt he irpro test s, even wit hou t not ice o r he ar ing, t he Sta te may tak e th e s ch ool f ac i l i ti es i n th e d i str i ct, withoutgiving co mpensa t ion t he ref or, and vest them i

n other distr icts or agencies. The S tate may ho ld or manage t he facilities d irect ly or indire ct ly. *** All this at t he willof the legi sl at ur e. T he ‘p r o pe r t y o f t he sc ho o l dis t r ict ’ is a p hr as e w hic h is misle ad in g. T he dis trict o wns no prope rty, all school faci

li ties, such as grounds, buildi ngs, equi pme nt, etc., bei

ng i n f act and lawthe

prop erty of the Stat e and sub

je ct1-10-0212, 1-10-0554 & 1-10-0642 (Co nsolida ted)

11 to the legi slati

ve wil l .” Thus, after the State cr eated t he Dist rict , t he St at e r et ained t he ability t o limit t he po wer s o f the Distr i ct, and e ven t o d ivest t he Di stri ct of i ts powers . Deatherage , 401 Ill . 31-32. The Stat e di vested t he Dis trict of the power to pay

its deb ts when the State created t he Aut hor ity and g ave t he A uth ori ty sole contro l over the District’s fi nances. “Th e doctri ne [of l egal i m possi bi l i ty] e xcuse s perf

orma nc e wh ereperforma

nce is rendered o bje ct ive ly

imposs ible *** byoperation of l aw.” YPI 18 0 N. LaSalle

Ow ner, LLC v

. 180 N. LaSalle II, LLC, 403 Il

l . Ap p. 3d 1, 6 (2010 ). If

the tri al courtwer e t o g ra nt IMS t he r elief it see ks, or der ing t he Dis trict to pay

the cancel

la tion am ounts establi

shed i n the l eases, Stat e l aw wo uld p re vent t he District fro m comply

ing wi th t he cou rt ’s ma

ndate. No of

f i cer of th e D i str i ct h as au th ori ty to wr i te a ch eck di sb ur si n g th e District ’s f

un dswi th out a pp roval of th e A uth ori ty . O n l y th e A uth ori ty “exerci se[s] fi

nan ci al co nt r o l o ve rt he di st r ict . ” 1 05 I LC S 5/ 1F
- 25 ( We st 20 04 ) . Ac co r di ng ly, t he trial courtdid n

ot err when i

t found, due to a legal

im possibil ity created when the State in voked t he Schoo l F in

ance Law, that t he Di strict lacked stat uto ry authority to pay IMS i ts cancell ation fees. CONCLUSION We dism iss the A utho rity’s appeal

in docket num

ber 1-10-0 554 because the order of May 8, 2008, was not fi

nal . We ha

ve j urisdi ction to consider the A

uthority’s appeal in docket numb er

1-10- 0642 from

the Feb ruary 26, 2010, order, because that or der dis

posed of all i

ssuesin the c ase . We v ac ate t he de cla r at o ry ju dg m en t en t er ed o n c o un t I o f I MS ’s co mpla int , be ca us e t he jud gme nt in f av or of th e D i str i ct on cou n t III made th e d i sp osi ti on of cou n t I a n d c oun t II m oot. The am ended n otice of a ppea l i n docket n

um ber 1-10-0 212, w

hi ch ref eren ces the F ebruary1-10-0212, 1-10-0554 & 1-10-0642 (Co nsolida ted)

12 26, 2010, order that disposed o f al l the issues in

the case , gives us jurisdiction to consider I MS’s appeal from the judgm

ent in fav or o f the Di

strict on count III. We f

in d that t he A

uthori ty ’s con trol over t he Dis trict’s f in ances, pursuan

t t o t he Sch

ool Fi nan ce Law, m

akes it leg ally i

mpo ssible for t he Dis trictto pay

IMS the contractually

agr eed can cellat ion p enalt y. Acco rd ingly, we a ffi rm t he judg ment en

tered i n f avor of the District on coun t III; wef i nd tha t the j udg men t on cou n t III moots anyis sue concerni

ng the ex tent of the Authority ’s power to cancel contracts, so we vacat e th e decl aratory j udg men t en tere d on cou n t I of IM S’ s c om

pl ai n t; and w e affirm the dismissal of co unt II, co nc er ning t he co nst it ut io na lit y o f t he Au t ho r it y’s po we rt o ca nc el c ontr acts un der th e Sc

hool Fi nan ce Law. No. 1-10- 0212, Af

fi rmed. No. 1-10- 0554, Appeal

dis mi ssed. No. 1-10- 0642, Judgmen t vacated.