Court Opinion

ID: 9725087
Source: CourtListenerOpinion
Date Created: 2023-08-26 11:28:35.471694+00
Date Added: 2024-06-11T18:25:09.363201
License: Public Domain

JUSTICE MURPHY, dissenting: Upon reviewing the applicable law, and in particular the recent case of Barry v. Retirement Board of the Firemen’s Annuity & Benefit Fund, 357 Ill. App. 3d 749 (2005), I conclude that Barry governs in the instant case and requires that the System pay Shields postjudgment interest at the rate of 9% upon his pension contribution refund. I therefore respectfully dissent from my learned and respected colleagues. The majority distinguishes Barry on the basis that the instant “action is against the State and [sovereign] immunity applies.” 363 Ill. App. 3d at 1006. However, this takes as a given that which should be the result of a considered analysis by the court: is the System a State agency immune from section 2 — 1303 postjudgment interest (In re Special Education of Walker, 131 Ill. 2d 300 (1989)), a “governmental entity” subject to 6% postjudgment interest, or neither and thus subject to the general postjudgment interest rate of 9%? In Barry, though section 2 — 1303 expressly applies 6% postjudgment interest to municipalities, the pension fund of Chicago’s municipal fire department was held not to be part of the municipality, and thus subject to 9% interest, because of its very nature as a pension fund. “[N]either the fund, which the Board characterizes as ‘an administrative body charged with responsibility of administering retirement and disability benefits for Chicago firefighters and their family members,’ nor the Board itself, which actually does administer the firemen’s annuity and benefit fund, qualifies as a type of public body which the exemption was intended to protect.” Barry, 357 Ill. App. 3d at 774. Distinguishing the firefighters’ pension fund from other agencies of local government such as a board of education or a sanitary district, the Barry court stated: “The public bodies in McKee and Calumet — the Board of Education and the Sanitary District — were created to benefit the public at large. In contrast to the public bodies in McKee and Calumet, the fund and the Board in the instant case were created, not to benefit the public at large but, rather, to benefit Chicago firefighters and their family members. [Citation.] This fund consists of moneys contributed not only by the City of Chicago but also by the firemen themselves. [Citation.] Indeed, the Board’s statutory powers and duties include supervising deductions from the salaries of firemen paid into the fund as well as supervising contributions made by the City of Chicago to the fund. [Citation.] In addition, the Board’s powers and duties include investing the money in the fund and authorizing payment of annuities, pensions, and benefits. 40 ILCS 5/6 — 183, 6 — 185 (West 2000). We recognize the City of Chicago contributes an amount to the fund that significantly exceeds the amount contributed by the firemen. We note, however, that unlike the money in the budgets of municipal corporations and public bodies, which can be earmarked for specific expenditures that benefit the public at large, the money in the firemen’s fund is invested and is used to benefit not the public at large, but firemen and their beneficiaries. [Citation.] Between the death of Mr. Nutter and the date the trial court reversed the Board’s denial of duty death benefits to his widow, the Board had control over money to which Nutter was legally entitled and which formed part of a larger fund to which Mr. Nutter had made contributions in the form of deductions from his salary. Furthermore, during this interval of time, the Board had the fiduciary duty to invest this money in the fund on behalf of the firemen and their beneficiaries.” Barry, 357 Ill. App. 3d at 775-76, citing McKee-Berger-Mansueto, Inc. v. Board of Education of the City of Chicago, 626 F.2d 559 (7th Cir. 1980), and Calumet Construction Corp. v. Metropolitan Sanitary District of Greater Chicago, 178 Ill. App. 3d 415 (1988). The Barry court affirmed the trial court’s application of 9% postjudgment interest because: “As previously noted, the Board’s primary statutory function is to administer a pension fund. In the context of the instant case, we find neither the Board nor the fund performed a governmental function. Accordingly, we find the Board and the fund do not qualify as ‘governmental en titiles]’ under section 2 — 1303 of the Code of Civil Procedure.” Barry, 357 Ill. App. 3d at 780. As explained below, I see no basis for distinguishing Barry from the instant case and thus find Barry to be dispositive of the issue of postjudgment interest in the instant case. If the pension fund for municipal firefighters is not an agency of the municipality, then the pension fund for state judges is not an agency of the State and not subject to its immunity. Notably, the Barry court considered that public (in that case, municipal) funds were deposited in the firefighters’ pension fund but concluded that these deposits were made for the benefit of the firefighters and their beneficiaries rather than for the benefit of the public. Similarly, while State funds are deposited into the System, this is done for the benefit of the judges and their beneficiaries rather than the benefit of the citizenry as a whole. Under its enabling statute, the “firemen’s annuity and benefit fund shall be created, set apart, and maintained, for the benefit of its firemen, their widows, children and parents, and of all contributors to, participants in, and beneficiaries of any firemen’s pension fund.” 40 ILCS 5/6 — 101 (West 2002). By comparison, the System’s enabling statute is even more explicit about the distinct and separate nature of the System. “A retirement system is created to be known as the ‘Judges Retirement System of Illinois’. It shall be a trust separate and distinct from all other entities, maintained for the purpose of securing the payment of annuities and benefits as prescribed herein.” 40 ILCS 5/18 — 101 (West 2002). Also, the Illinois Constitution addresses the pensions of State and local government employees together and without distinction: “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” 111. Const. 1970, art. XIII, § 5. Lastly, there is a clear statutory path to the applicability of section 2 — 1303 to the System. Decisions of the System are subject to review under the Administrative Review Law (735 ILCS 5/3 — 101 et seq. (West 2002)). 40 ILCS 5/18 — 164 (West 2002). The Administrative Review Law provides in relevant part that the circuit court has the power “in case of affirmance or partial affirmance of an administrative decision which requires the payment of money, to enter judgment for the amount justified by the record and for costs, which judgment may be enforced as other judgments for the recovery of money.” 735 ILCS 5/3 — 111(a)(8) (West 2002). Postjudgment interest under section 2 — 1303 “merely preserves the value of the liquidated obligation by compensating the judgment creditor for delays in payment.” Illinois State Toll Highway Authority v. Heritage Standard Bank & Trust Co., 157 Ill. 2d 282, 295 (1993). Stated another way, postjudgment interest “is neither a penalty nor a bonus, but instead a preservation of the economic value of an award from diminution caused by delay.” Heritage Standard Bank & Trust Co., 157 Ill. 2d at 301. Moreover, the application of postjudgment interest is mandatory, so that a trial court has no discretion to refrain from imposing postjudgment interest upon a money judgment. Browning, Ektelon Division v. Williams, 348 Ill. App. 3d 830, 833 (2004). In short, postjudgment interest is directly connected to the enforcement of the judgment, preventing the judgment debtor from benefitting from retention of the money judgment and providing the judgment debtor an incentive to pay the judgment promptly. Finally, the application of postjudgment interest statute to a refund due from the System is not contrary to the provision in the System’s enabling statute that refunds are payable “without interest.” 40 ILCS 5/18 — 129 (West 2002). By comparison, the enabling statute for the firemen’s annuity and benefit fund at issue in Barry did not provide for interest-free refunds (40 ILCS 5/18 — 158 through 18 — 162 (West 2002)), and the Barry court found that fund liable for prejudgment as well as postjudgment interest. It is axiomatic that a contract governs prejudgment interest while, once the contractual debt is merged into a judgment, the contract ceases to exist and the rate of interest is thereafter controlled by statute. Bank of Pawnee v. Joslin, 166 Ill. App. 3d 927, 941 (1988). In light of the fact that a pension of a State or local government employee is “an enforceable contractual relationship” (Ill. Const. 1970, art. XIII, § 5), it is a reasonable interpretation that the System, but not the firefighters’ pension fund, was intended by the Assembly to be exempt from paying prejudgment interest on refunds. As to the application of the postjudgment interest statute, section 2 — 1303, this court has stated: “An award of interest on a money judgment requires that the amount of money to be paid was certain and the judgment debtor enjoyed the improper use of the money during the period for which interest is to be awarded.” Browning, Ektelon Division, 348 Ill. App. 3d at 833. There can be little doubt that both occurred here. The principal amount due Shields, $75,348.77, was fixed and certain under the circuit court judgment of November 17, 2000, as affirmed by the Illinois Supreme Court,2 and the System had the use of that money until it paid Shields the principal on August 27, 2003. Regarding the amount of postjudgment interest due, section 2 — 1303 provides in relevant part that “[ijnterest shall be computed and charged only on the unsatisfied portion of the judgment as it exists from time to time.” 735 ILCS 5/2 — 1303 (West 2002). Interest is due on a judgment during the pendency of an appeal. Browning, Ektelon Division, 348 Ill. App. 3d at 833. Also, “where a money award has been modified on appeal and the only action necessary in the trial court is compliance with the mandate of the appellate court, interest on the award should accrue from the original judgment date.” Phelps v. O’Malley, 187 Ill. App. 3d 150, 157 (1989). The statutory language clearly supports the conclusion that interest is due on the principal up to August 27, 2003, when the System paid Shields, and upon that prior interest from August 28, 2003, onward. Therefore, I would award Shields postjudgment interest (1) on the principal of the refund, $75,348.77, from the judgment of November 17, 2000, until August 27, 2003, and (2) upon the interest described in (1) from August 28, 2003, until the System shall pay Shields in full.  The supreme court recently considered again the effect of a felony conviction on pension contributions and benefits, the original underlying issue herein. Taddeo v. Board of Trustees of the Illinois Municipal Retirement Fund, 216 Ill. 2d 590 (2005). However, Taddeo was limited to the narrow issue of whether a person who held two public offices and committed crimes that affected one office, but not the other, was barred from the pensions for both offices or just the one in which he committed his offenses. The issue of interest was not addressed in Taddeo.