Court Opinion

ID: 2643808
Source: CourtListenerOpinion
Date Created: 2013-11-22 22:56:43.094772+00
Date Added: 2024-06-11T12:52:21.976274
License: Public Domain

ILLINOIS OFFICIAL REPORTS
                                  Appellate Court

                   Lutkauskas v. Ricker, 2013 IL App (1st) 121112

Appellate Court      ANTHONY LUTKAUSKAS, TAXPAYER FOR AND ON BEHALF OF
Caption              LEMONT-BROMBEREK COMBINED SCHOOL DISTRICT 113A,
                     Plaintiff-Appellant, v. DR. TIMOTHY RICKER, ROBERT BECKWITH,
                     JOHN WOOD, DR. MARY GRICUS, LISA WRIGHT, KEVIN
                     DOHERTY, DAVID LEAHY, GWEN O’MALLEY, SUE MURPHY,
                     AL ALBRECHT, UNDERWRITERS AT LLOYD’S, LONDON,
                     KNUTTE ASSOCIATES P.C. AND OTHER PERSONS WHOSE
                     NAMES ARE NOT YET KNOWN, Defendants-Appellees.–LAURA
                     REIGLE, DUANE BRADLEY, LOUIS EMERY, AND JANET
                     HUGHES, TAXPAYERS FOR AND ON BEHALF OF LEMONT
                     BROMBEREK COMBINED SCHOOL DISTRICT 113A, Plaintiffs-
                     Appellants, v. DR. TIMOTHY RICKER, ROBERT BECKWITH, JOHN
                     WOOD, DR. MARY GRICUS, LISA WRIGHT, KEVIN DOHERTY,
                     DAVID LEAHY, GWEN O’MALLEY, SUE MURPHY, AL
                     ALBRECHT, UNDERWRITERS AT LLOYD’S, LONDON, KNUTTE
                     ASSOCIATES P.C. AND OTHER PERSONS WHOSE NAMES ARE
                     NOT YET KNOWN, Defendants-Appellees.

District & No.       First District, Fourth Division
                     Docket No. 1-12-1112

Filed                September 30, 2013
Rehearing denied     November 18, 2013
Held                       The trial court’s dismissal of a complaint against two employees of a
(Note: This syllabus       school district and seven members of the school board alleging that
constitutes no part of     section 20-5 of the School Code was violated when money from the
the opinion of the court   district’s working cash fund was spent without a school board resolution
but has been prepared      approving the transfer of funds from the working cash fund was affirmed,
by the Reporter of         since plaintiffs failed to allege that the money was spent for anything
Decisions for the          other than legitimate school expenses, and in the absence of such
convenience of the         allegations, plaintiffs did not have standing under section 20-5 to recover,
reader.)
                           on behalf of the district, money transferred without a board resolution.

Decision Under             Appeal from the Circuit Court of Cook County, Nos. 11-CH-35191, 10-
Review                     CH-53428, 10-CH-53429; the Hon. LeRoy K. Martin, Jr., Judge,
                           presiding.

Judgment                   Affirmed.

Counsel on                 Natalie Brouwer Potts, of Center for Open Government, Law Offices of
Appeal                     IIT Chicago-Kent College of Law, and Clinton A. Krislov, of Krislov &
                           Associates, Ltd., of Chicago, for appellants.

                           Raymond J. Jast and Kimberly E. Blair, both of Wilson, Elser,
                           Moskowitz, Edelman & Dicker LLP, of Chicago, for appellee Certain
                           Underwriters at Lloyd’s London.

                           Thomas F. Falkenberg, Alyssa M. Reiter, and Kirstin B. Ives, all of
                           Williams Montgomery & John Ltd., of Chicago, for appellee Knutte &
                           Associates, P.C.

                           Edward M. Kay, Paige M. Neel, and Mark J. Sobczak, all of Clausen
                           Miller P.C., for appellee Timothy Ricker.

                           Justino D. Petrarca, Kevin B. Gordon, and James A. Petrungaro, all of
                           Scariano, Himes & Petrarca, Chtrd., of Chicago, for other appellees.

                                                 -2-
Panel                      JUSTICE EPSTEIN delivered the judgment of the court, with opinion.
                           Justice Fitzgerald Smith concurred in the judgment and opinion.
                           Justice Pucinski dissented, with opinion.

                                             OPINION

¶1          In this consolidated appeal, five taxpayer plaintiffs, acting on behalf of the Lemont
        Bromberek Combined School District 113A, seek reversal of the circuit court’s dismissal of
        their claims brought against two school district employees, seven school board members, the
        district’s accounting firm, and the district’s surety. Plaintiffs alleged that the district
        employees and board members violated section 20-5 of the School Code (105 ILCS 5/20-5
        (West 2010)) when they engaged in or permitted a pattern of spending money from the
        district’s working cash fund without a school board resolution approving the transfer of funds
        from the working cash fund. For the reasons that follow, we affirm.

¶2                                        BACKGROUND
¶3                                  Article 20 of the School Code
¶4          Plaintiffs’ complaints center on a violation of article 20 of the School Code, which
        authorizes certain school districts to create working cash funds. See 105 ILCS 5/20-1 (West
        2010). The working cash fund allows a district to “have in its treasury at all time sufficient
        money to meet demands thereon for expenditures for corporate purposes” before the district
        receives taxes designated for those purposes. Id. In other words, “the purpose of the working
        cash fund is to provide a reserve upon which school districts may draw in anticipation of tax
        collections.” In re Application of Walgenbach, 104 Ill. 2d 121, 125 (1984). To fund the
        working cash fund, the district “may incur an indebtedness and issue bonds as evidence
        thereof” (105 ILCS 5/20-2 (West 2010)) or may levy taxes (105 ILCS 5/20-3 (West 2010)).
        Money from the working cash fund “may be used by the school board for any and all school
        purposes and may be transferred in whole or in part to the general funds or both of the school
        district and disbursed therefrom in anticipation of the collection of taxes lawfully levied for
        any or all purposes.” 105 ILCS 5/20-4 (West 2010). When the district receives taxes as
        anticipated, “the fund shall immediately be reimbursed therefrom until the full amount so
        transferred has been retransferred to the fund.” Id. Under Section 20-5 of the School Code,
        the board must pass a resolution directing the transfer of monies from the working cash fund:
                 “Moneys in the working cash fund shall be transferred from the working cash fund
            to another fund of the district only upon the authority of the school board which shall
            from time to time by separate resolution direct the school treasurer to make transfers of
            such sums as may be required for the purposes herein authorized.” 105 ILCS 5/20-5
            (West 2010).

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     Section 20-5 sets forth specific information to be contained within the resolution (e.g., “the
     taxes in anticipation of which [a] transfer is to be made and from which the working cash
     fund is to be reimbursed”). See id.
¶5       Section 20-10 allows a school district to abate the working cash fund at any time, by
     adoption of a resolution, and “direct the transfer at any time of moneys in that fund to any
     fund or funds of the district most in need of the money.” 105 ILCS 5/20-10 (West 2010).
     Similarly, section 20-8 allows a district to abolish its working cash fund, by adoption of a
     resolution, and “direct the transfer of any balance in such fund to the educational fund at the
     close of the then current school year.” 105 ILCS 5/20-8 (West 2010).

¶6                                Original Taxpayer Complaints
¶7       On December 17, 2010, four taxpayer plaintiffs filed two separate, but nearly identical,
     lawsuits, which were subsequently consolidated into one action. Hughes brought the first
     complaint and Reigle, Bradley, and Emery brought the second. The lawsuits named as
     defendants the district superintendent, the district treasurer, and seven school board members
     (collectively, the district defendants) in their individual capacities.
¶8       Plaintiffs alleged that the district defendants violated section 20-5 of the School Code,
     when they repeatedly transferred (or allowed the transfer of) money from the district’s
     working cash fund without board resolution. Plaintiffs alleged that between 2007 and 2010,
     the district spent in excess of the amounts allocated to a number of individual funds that
     provide capital for the district’s annual activities. To make up for shortfalls in these funds,
     the district drew money from the working cash fund. Plaintiffs further alleged that the district
     defendants never reimbursed the working cash fund, and instead the school board passed
     resolutions to abate and abolish the working cash fund. On December 2, 2009, members of
     the board passed a resolution to partially abate the working cash fund in the amount of
     $4,849,442, leaving a remainder of $643,500. On April 28, 2010, the board approved a
     resolution to abolish the working cash fund, with the money to be permanently transferred
     to the education fund.
¶9       Plaintiffs sought relief under section 20-6 of the School Code, which provides:
         “Any member of the school board of any school district to which this Article is
         applicable, or any other person holding any office, trust, or employment under such
         school district who wilfully violates any of the provisions of this Article shall be guilty
         of a business offense and fined not exceeding $10,000, and shall forfeit his right to his
         office, trust or employment and shall be removed therefrom. Any such member or other
         person shall be liable for any sum that may be unlawfully diverted from the working cash
         fund or otherwise used, to be recovered by such school district or by any taxpayer in the
         name and for the benefit of such school district in an appropriate civil action; provided
         that the taxpayer shall file a bond for all costs and be liable for all costs taxed against the
         school district in such suit, and judgment shall be rendered accordingly. Nothing herein
         shall bar any other remedies.” 105 ILCS 5/20-6 (West 2010).
     Under the authority of section 20-6, plaintiffs sought an order declaring the district
     defendants forfeit their offices and employment with the district, assessing a $10,000

                                                -4-
       statutory fine against each of the district defendants, and entering judgment against the
       defendants personally for “an amount sufficient to make [the district] whole and replace the
       public funds shown by the evidence to have been unlawfully diverted” from the working cash
       fund.
¶ 10       Along with these claims, plaintiffs brought a single count for “accountant negligence”
       against the district’s former accountant, Knutte and Associates, alleging that Knutte issued
       clean audit reports, but knew or should have known of the district defendants’ transfer of
       funds in violation of the School Code. Plaintiffs also brought claims against an entity
       affiliated with Certain Underwriters at Lloyd’s London (Underwriters), the surety that
       bonded the school treasurer. Plaintiffs alleged that the surety was obligated to pay damages
       caused to the district by the treasurer’s “failure to faithfully discharge the duties of his office
       according to law.”
¶ 11       On July 27, 2011, the circuit court struck the claims against the district defendants with
       leave to replead. Judge Novak ruled that plaintiffs did not have standing to seek criminal
       penalties prescribed in section 20-6, and as to any civil recovery, the court ruled that the
       allegations were insufficient to allege a violation of section 20-5. The court dismissed the
       claims against Knutte with prejudice, finding that plaintiffs did not have standing to bring
       the claim. Pursuant to Illinois Supreme Court Rule 304(a) (eff. Jan. 1, 2006), the court ruled
       that there was no just cause to delay appeal of the claim against Knutte. The surety was
       apparently not properly named as a defendant, and plaintiffs later voluntarily dismissed their
       complaints against the improperly named entity.

¶ 12                        The First Amended Consolidated Complaint
                                   and the Lutkauskas Complaint
¶ 13       On August 29, 2011, plaintiffs filed a first amended consolidated complaint, again
       alleging that the district defendants violated article 20 of the School Code, but adding a
       breach of fiduciary duty claim against the district defendants. Plaintiffs restated their claims
       against the properly named entity for the surety, Underwriters at Lloyd’s. On October 11,
       2011, a fifth taxpayer plaintiff, Lutkauskas, filed his complaint, which was later consolidated
       with the other two taxpayer complaints. The Lutkauskas complaint was identical to the first
       amended consolidated complaint of the other plaintiffs, but added new claims against Knutte
       for accounting malpractice, negligence, breach of fiduciary duty, and aiding the district
       defendants in violating the School Code.
¶ 14       Both the amended consolidated complaint and the Lutkauskas complaint provided
       additional detail regarding the alleged illegal transfer of funds. Specifically, plaintiffs alleged
       “[i]t appears that the District monies, though specifically appropriated to specific
       funds/purposes, were held in a commingled account. Thus, when money was spent beyond
       the legal appropriation for a particular fund, it actually drained or diverted the Working Cash
       Fund, without the appropriate Board Action and documentation for such dispersions.” The
       complaint also cited email correspondence among the district defendants purporting to show
       that they were aware that the working cash funds were being used between 2007 and 2010
       without board resolutions approving any transfers.

                                                  -5-
¶ 15       On March 15, 2012, the district defendants and Underwriters at Lloyd’s moved to dismiss
       plaintiffs’ first amended consolidated complaint and the Lutkauskas complaint. Knutte filed
       a motion to dismiss the Lutkauskas complaint. The trial court granted these motions. While
       the defendants asserted various bases on which to dismiss the complaints, Judge Martin ruled
       that plaintiffs’ complaint failed to state a claim and the district defendants had legislative
       immunity. Judge Martin also stated that plaintiffs were “basically arguing a windfall” and
       that “nothing in the complaint *** would tell the reader that money was used for some
       purpose other than for school purposes.” As a result, the court ruled that Underwriters at
       Lloyd’s had no liability as surety and dismissed the complaints against it. With respect to
       Knutte, the circuit court dismissed Lutkauskas’s claims with prejudice on the basis of res
       judicata. Plaintiffs appealed.

¶ 16                                           ANALYSIS
¶ 17        Defendants moved to dismiss under sections 2-619 and 2-615 of the Code of Civil
       Procedure (735 ILCS 5/2-615, 2-619 (West 2010)). A motion to dismiss under section 2-615
       of the Code (735 ILCS 5/2-615 (West 2010)) challenges the legal sufficiency of the
       complaint. Wakulich v. Mraz, 203 Ill. 2d 223, 228 (2003). Section 2-619 of the Code of Civil
       Procedure allows dismissal where, in pertinent part, plaintiff does not have standing to bring
       an action. 735 ILCS 5/2-619(2) (West 2010).
¶ 18        We review the circuit court’s dismissal of plaintiffs’ complaints de novo. Feltmeier v.
       Feltmeier, 207 Ill. 2d 263, 266 (2003). This court may affirm the circuit court’s dismissal for
       any reason appearing in the record. See Gunthorp v. Golan, 184 Ill. 2d 432, 438 (1998) (the
       trial court may be affirmed on any basis in the record without regard to whether the trial court
       relied upon that ground or whether the trial court’s rationale was correct); Geick v. Kay, 236
       Ill. App. 3d 868, 873 (1992) (although the trial court’s order did not specify whether the
       counts were being dismissed under section 2-615 or section 2-619, the reviewing court may
       affirm a correct decision for any reason appearing in the record, regardless of the basis relied
       upon by the trial court); Mitsias v. I-Flow Corp., 2011 IL App (1st) 101126, ¶ 47 (appellate
       court has jurisdiction to consider issue not reached by circuit court on motion to dismiss,
       where issue was properly raised in the circuit court but court granted motion to dismiss on
       another basis).
¶ 19        On appeal, defendants raise a host of arguments in support of affirming the district
       court’s dismissal of the taxpayers’ complaints. Defendant Timothy Ricker filed a brief on his
       own behalf, arguing that: (1) plaintiffs are not entitled to any relief because the district did
       not suffer any monetary damages and any recovery would constitute an unjust windfall; (2)
       the breach of fiduciary duty claims fail because plaintiffs have not alleged damages; (3)
       plaintiffs lack standing to seek criminal penalties prescribed in section 20-6; (4) legislative
       immunity bars any claim against Ricker; (5) plaintiffs failed to plead a cause of action under
       section 20-6 or for breach of fiduciary duty; (6) claims in the Lutkauskas complaint are time-
       barred; (7) plaintiffs lack standing to bring the instant case because they never demanded the
       district bring the action itself; and (8) plaintiffs’ complaints were properly dismissed because
       they fail to name an indispensable party. The remaining district defendants raise many of the

                                                 -6-
       same arguments, but also argue that (1) claims against certain district defendants should be
       dismissed because none of the allegations in the complaint as to the working cash fund
       transfers were directed at these individuals; and (2) the claims should be dismissed against
       the school district defendants in their individual capacities. Defendant Knutte asserts that the
       trial court properly dismissed all counts against it by Lutkauskas based on the doctrine of res
       judicata. Finally, defendant Underwriters at Lloyd’s raises several arguments as to why it has
       no obligation to pay under the treasurer bond, assuming that any of the allegations against
       defendant Beckwith are not dismissed for other reasons.

¶ 20                           Claims Against the District Defendants
¶ 21       Among the various arguments raised in support of dismissal by the district defendants,
       we need only address two narrow issues relating to the remedies sought by the taxpayer
       plaintiffs against the district defendants.
¶ 22       In their complaints, plaintiffs first ask the court to fine each of the defendants and order
       their removal from office under the first sentence of section 20-6:
           “Any member of the school board of any school district to which this Article is
           applicable, or any other person holding any office, trust, or employment under such
           school district who wilfully violates any of the provisions of this Article shall be guilty
           of a business offense and fined not exceeding $10,000, and shall forfeit his right to his
           office, trust or employment and shall be removed therefrom.” 105 ILCS 5/20-6 (West
           2010).
       The district defendants argue that the forfeiture of office and fines prescribed in the first
       sentence of section 20-6 are penalties only the State of Illinois can impose. In its July 27,
       2011 ruling dismissing Reigle’s and Hughes’ original complaints, the circuit court agreed.
       Judge Novak held that only an appropriate government actor, not taxpayer plaintiffs, would
       have standing to pursue these remedies under the statute. The Lutkauskas complaint, which
       postdated the July 27, 2011 dismissal decision, also sought forfeiture and fines from
       defendants. In dismissing the Lutkauskas complaint, Judge Martin agreed with Judge
       Novak’s ruling, stating that the School Code “contemplate[s] the State’s Attorney or the
       [Attorney General’s] office really being the entity to bring a cause of action and look for
       penalties or removal from office.”
¶ 23       When considering the proper construction of section 20-6, we strive to “ascertain and
       give effect to the legislature’s intent.” See, e.g., Citizens Opposing Pollution v. ExxonMobil
       Coal U.S.A., 2012 IL 111286, ¶ 23 (citing In re Donald A.G., 221 Ill. 2d 234, 246 (2006)).
       “The best indication of this intent remains the language of the statute itself, which must be
       given its plain and ordinary meaning.” Id. We presume that the legislature did not intend
       absurdity, inconvenience, or injustice. Id.
¶ 24       In this case, we agree with the circuit court that the first sentence of section 20-6 sets
       forth criminal penalties. The first sentence of section 20-6 speaks to a party “guilty of a
       business offense.” 105 ILCS 5/20-6 (West 2010). The term “business offense” is specifically
       defined in the Unified Code of Corrections. See 730 ILCS 5/5-1-2 (West 2008) (“ ‘Business
       Offense’ means a petty offense for which the fine is in excess of $1,000.”). Our supreme

                                                 -7-
       court has described the specific penalties imposed in section 20-6 (a “fine” and “forfeit[ure]”
       of the “right to office”) as criminal in nature. See In re Walgenbach, 104 Ill. 2d 121, 125
       (1984) (stating that section 20-6 “provides for criminal sanctions against any member of a
       school board who wilfully violates the provisions of article 20”). And we have recognized
       that the General Assembly may seek to enforce compliance with a statute by specifying that
       a violation constitutes a “business offense,” which we described as a “criminal penalty.” See
       Parra v. Tarasco, Inc., 230 Ill. App. 3d 819, 823 (1992) (noting that Illinois Choke-Saving
       Methods Act imposed a “criminal penalty,” where it provided that anyone violating it “is
       guilty of a business offense and shall be fined $500” ).
¶ 25       In response, plaintiffs claim that they “are asking for–and entitled to–forfeiture of office
       by the District 113A Defendants still holding office (not Ricker, who resigned as
       Superintendent) and monetary penalties, notably that will go to the District, not Plaintiffs.”
       Beyond this mere assertion, however, plaintiffs provide no authority for why they, as private
       taxpayers acting on behalf of the school district, have the power to impose criminal penalties
       for what is a criminal violation. Nor do plaintiffs provide any authority for the proposition
       that statutory penalties for a “business offense” can be awarded as a remedy in a civil action.
       Accordingly, we agree with the circuit court that plaintiffs did not have standing to seek
       forfeiture of office or to impose fines in a civil suit.
¶ 26       While the first sentence of section 20-6 speaks to criminal violations, the second sentence
       of section 20-6 references “an appropriate civil action” brought by the district or “by any
       taxpayer in the name and for the benefit of such school district.” Private taxpayers may bring
       suit on behalf of the district to recover “any sum that may be unlawfully diverted from the
       working cash fund or otherwise used.” 105 ILCS 5/20-6 (West 2010).
¶ 27       Plaintiffs seek to recover “an amount sufficient to make District 113A whole and replace
       the public funds shown by the evidence to have been unlawfully diverted from the Working
       Cash Fund.” The complaint alleges that at times between 2007 and 2010, the district drew
       money out of the working cash fund in order to cover shortfalls in other funds. Later in 2009
       the board formally approved the fund’s abatement, with all money being transferred to some
       other funds (the complaint does not specify which funds). In 2010, the board formally
       approved the fund’s abolishment, with the remaining money being transferred to the
       education fund.
¶ 28       The district defendants argue that there are no allegations that they used the funds at issue
       “for anything other than legitimate District expenses.” According to defendants, allowing the
       taxpayer plaintiffs to recover from defendants in this circumstance “would result in a
       windfall to the District by reimbursing it for money it never lost.” Judge Martin agreed,
       stating that plaintiffs were “basically arguing a windfall” and that “nothing in the complaint
       *** would tell the reader that money was used for some purpose other than for school
       purposes.” Plaintiffs argue that because section 20-5 plainly forbids interfund transfers
       without board resolution, any money transferred without board resolution should be
       considered a “sum *** unlawfully diverted from the working cash fund” recoverable by the
       taxpayer plaintiffs on behalf of the district. 105 ILCS 5/20-6 (West 2010). According to

                                                 -8-
       plaintiffs, defendants are personally liable for $5,492,942.1
¶ 29        The parties’ dispute about the proper remedy reflects an underlying disagreement about
       whether the monies at issue were “unlawfully diverted.” The School Code does not define
       “unlawful diversion” or “diversion,” and we may consult a dictionary to ascertain the plain
       and ordinary meaning of those terms. Gaffney v. Board of Trustees of the Orland Fire
       Protection District, 2012 IL 110012, ¶ 60. Moreover, “words and phrases having well-
       defined meanings in the common law are interpreted to have the same meanings when used
       in statutes dealing with the same or similar subject matter as that with which they were
       associated at common law.” Scott v. Dreis & Krump Manufacturing Co., 26 Ill. App. 3d 971,
       983, 326 N.E.2d 74 (1975); People v. Bailey, 375 Ill. App. 3d 1055, 1061 (2007). We look
       to the common law meaning of terms even in statutes dealing with new or different subject
       matter, to the extent that they appear fitting and absent evidence indicating a contrary
       meaning. Advincula v. United Blood Services, 176 Ill. 2d 1, 17 (1996).
¶ 30        At the time section 20-6’s predecessor statute (1933 Ill. Laws 265) was enacted, Black’s
       Law Dictionary defined “diversion” as “[a] turning aside or altering the natural course of a
       thing,” with the term being “chiefly applied to the unauthorized changing the course of a
       water course to the prejudice of a lower proprietor, or to unauthorized or illegal use of
       corporate funds.” Black’s Law Dictionary 600 (3d ed. 1933). In a line of cases considering
       interfund loans, our supreme court has repeatedly defined the “diversion” of funds or the
       “unlawful diversion” of funds as use for some improper purpose or some purpose specifically
       prohibited by statute. As relevant to the issue here, the court explained, “Municipal officers
       have no right to divert moneys from one fund to another and different fund for which it was
       not appropriated. But the word ‘divert’ is used in the sense of turning such fund permanently
       from its purpose or the final appropriation of it to some other use.” Gates v. Sweitzer, 347
       Ill. 353, 359 (1932); see also Michaels v. Barrett, 355 Ill. 175, 185-86 (1934) (rejecting
       argument that statute providing for use of part of motor fuel tax to pay interest and principal
       on emergency relief bonds is an “unlawful diversion” of portion of privilege tax allotted to
       counties for road purposes, where collected taxes become public money and may be applied
       to whatever purpose legislature determines).
¶ 31        Building from Gates and similar cases, our supreme court has found an improper
       diversion of funds where funds are used for a different purpose than allowed by statute. In
       People ex rel. Brenza v. Gilbert, 409 Ill. 29 (1951), for example, the court considered a
       temporary transfer of funds from a working cash fund for corporation purposes to the county
       highway fund. The court distinguished those cases finding no “diversion” of funds when
       monies were loaned from one fund to another: “The present case is different from [those
       cases] in that there is at least an implied prohibition against using the working cash fund for
       anything except the purpose of financing the corporate fund of the county.” Brenza, 409 Ill.

               1
                  Plaintiffs actually claim that defendants could be liable for as much as $12 million, but that
       figure is only used in the complaint with reference to plaintiffs’ allegations that Knutte issued
       improper audits: “The effect of these audits was that the illegal misspending, overspending and
       illegal transfers described above were concealed, resulting in losses to the district of more than $12
       million.”

                                                     -9-
       2d at 37. Similarly, in People ex rel. Redfern v. Penn Central Co., 47 Ill. 2d 412 (1971), the
       court considered whether the transfer from the education to the Illinois municipal retirement
       fund amounted to “an unlawful diversion of monies from one fund to another.” Redfern, 47
       Ill. 2d at 416. The court found that the transfer did amount to an unlawful diversion, where
       the statute at issue did not allow for “loans between the educational fund and the Illinois
       municipal retirement fund.” Id. at 418.
¶ 32        In accord with these cases considering the “unlawful diversion” of funds, we conclude
       that the plaintiffs cannot recover a monetary award from the defendants, for they have not
       alleged that the money transferred from the working cash fund was put toward some
       improper purpose forbidden by the statute. Plaintiffs do not allege that defendants violated
       the School Code by spending monies from the working cash fund on something other than
       legitimate school expenses. See 105 ILCS 5/20-4 (West 2010) (“Moneys in the fund may be
       used by the school board for any and all school purposes and may be transferred in whole or
       in part to the general funds or both of the school district and disbursed therefrom in
       anticipation of the collection of taxes lawfully levied for any or all purposes ***.”). Rather,
       plaintiffs allege that the board did not pass any resolution as to the transfer of funds (at least
       until the board passed resolutions to abate and then abolish the fund, thereby permanently
       transferring the working cash funds). We acknowledge that article 20 also contemplates that
       money is to be temporarily loaned for tax anticipation purposes, and the working cash fund
       is to be reimbursed when those taxes are collected. Plaintiffs alleged that defendants were
       using working cash funds to cover shortfalls due to deficit spending, without ever
       reimbursing the working cash fund. But here, the school board effected a permanent transfer
       of the money by passing resolutions to abate and abolish the working cash fund. While
       plaintiffs contend that the resolutions to abate and then abolish the working cash fund were
       simply made to “cover up” earlier transfers, they do not allege that the resolutions were
       improper. Where plaintiffs do not allege that the funds were spent for an improper purpose,
       and where the defendants have effected a permanent transfer of working cash funds as
       allowed by article 20, plaintiffs cannot show any loss to the district as a result of defendants’
       alleged actions.
¶ 33        Although plaintiffs offer no authority for their proposed interpretation of the statute, they
       suggest that the legislature must have meant to allow recovery in a civil suit under these
       circumstances to ensure compliance with the statute. Plaintiffs contend that district officials
       “could evade any accountability for their illegal conduct regarding the Working Cash Fund
       by, even after the fact, simply abolishing the fund.” Our holding is not so broad. We
       conclude only that plaintiffs here cannot seek to recover personally from district officials
       under the civil recovery provision of section 20-6. If defendants did willfully violate section
       20-5, a party with standing could seek to impose the serious criminal penalties prescribed in
       section 20-6. Indeed, the statute provides for criminal penalties for willful violations of “any
       of the provisions of this Article” and then separately provides for a civil suit to recover funds
       “unlawfully diverted.” As defendants acknowledge, “the statute contains a means to enforce,
       where appropriate, willful violations of Article 20 where no actual damages result.”
¶ 34        Accordingly, we affirm the circuit court’s dismissal of plaintiffs’ complaints under
       section 2-619. Under section 20-6, the taxpayer plaintiffs do not have standing to seek the

                                                 -10-
       criminal penalties of forfeiture of office or fines. Section 20-6 also does not authorize a civil
       suit to recover vast sums of money personally from district defendants for the alleged
       violation of section 20-5, where there are no allegations that monies from the working cash
       fund was spent on something other than legitimate school expenses. Without those
       allegations, plaintiffs do not otherwise have standing to recover, on behalf of the district,
       money transferred without board resolution, notwithstanding the alleged violation of section
       20-5.
¶ 35        Plaintiffs’ breach of fiduciary duty count fails for a similar reason. Like the alleged
       section 20-5 violation, the breach of fiduciary duty claim rests on the district defendants’
       failure to pass a board resolution to approve the withdrawal of money from the working cash
       fund. As with the School Code violation, plaintiffs seek to recover “an amount sufficient to
       make [the district] whole and replace the public funds shown by the evidence to have been
       unlawfully diverted from the Working Cash Fund.” As explained above, however, plaintiffs
       fail to allege any loss to the district resulting from the district defendants’ failure to obtain
       approval for fund transfers. Plaintiffs have thus failed to allege any damages to support their
       claim for breach of fiduciary duty. See Bernstein & Grazian, P.C. v. Grazian & Volpe, P.C.,
       402 Ill. App. 3d 961, 976 (2010) (To prevail on a claim for breach of fiduciary duty, plaintiff
       must show the existence of a fiduciary duty, the breach of that duty, and damages
       proximately caused by the breach.).
¶ 36        Plaintiffs respond that the complaint describes the “deleterious effects of overspending
       and damages caused to the district.” Specifically, plaintiffs point to the complaints’
       allegations that “spending beyond appropriation in one year produces negative balances in
       cash accounts, which carry over to the next year. Further expenditures beyond appropriations
       in the years following dig an even deeper fiscal deceit upon the taxpayers, and others, that
       keeps growing, until the District simply runs out of cash, as it appears to be nearing.” On
       appeal, however, plaintiffs make clear that there is no cause of action based on this alleged
       budget deficit spending; according to plaintiffs, those allegations only “provide context” for
       the causes of action. Moreover, as noted above, plaintiffs specifically seek to recover those
       funds that have been transferred without board approval. We therefore affirm the circuit
       court’s dismissal of the breach of fiduciary duty claim. As both counts against the district
       defendants were properly dismissed, we also affirm the district court’s dismissal of any
       claims against Underwriters for Lloyd’s.

¶ 37                           Lutkauskas’s Claims Against Knutte
¶ 38       The only remaining claims for consideration are Lutkauskas’s claims against Knutte. The
       circuit court dismissed Lutkauskas’s claims on the basis of res judicata, finding that the final
       judgment in favor of Knutte in the previous taxpayer suit barred Lutkauskas’s claims. On
       appeal, Lutkauskas challenges this ruling and also argues that “[d]ue process considerations
       were not given appropriate deference” when the circuit court dismissed his claims against
       Knutte.
¶ 39       The doctrine of res judicata provides that “a final judgment on the merits rendered by a
       court of competent jurisdiction bars any subsequent actions between the same parties or their

                                                 -11-
       privies on the same cause of action.” Rein v. David A. Noyes & Co., 172 Ill. 2d 325, 334
       (1996). “Res judicata bars not only what was actually decided in the first action but also
       whatever could have been decided.” Hudson v. City of Chicago, 228 Ill. 2d 462, 467 (2008).
       The doctrine applies if three requirements are met: (1) a final judgment on the merits has
       been rendered by a court of competent jurisdiction; (2) the parties or their privies are
       identical in both actions; and (3) an identity of cause of action exists. Id. A determination of
       whether a claim is barred under the doctrine of res judicata is a question of law, which is
       subject to de novo review. Arvia v. Madigan, 209 Ill. 2d 520, 526 (2004).
¶ 40       Lutkauskas and Knutte agree that the first requirement for res judicata is met: where the
       circuit court dismissed plaintiffs’ complaints against Knutte with prejudice on July 27, 2011,
       there was a final judgment on the merits. As to the second requirement, Lutkauskas argues
       that because “he was not a party in the previous lawsuit and his claims were brought as a
       separate taxpayer acting in his individual capacity,” the parties were not identical or were not
       in privity.
¶ 41       At the outset, we emphasize that Lutkauskas was not “acting in his individual capacity.”
       Lutkausas’s complaint leaves no doubt on that point: the complaint is brought “as a taxpayer
       derivative action in the name and for the benefit of the School Board District 113A.” A
       “taxpayer derivative action,” by contrast, is “brought by a taxpayer on behalf of a local
       governmental unit to enforce a cause of action belonging to the local governmental unit.”
       Scachitti v. UBS Financial Services, 215 Ill. 2d 484, 494 (2005). The claimed injury in such
       an action “is not personal to the taxpayers, but rather impacts the governmental entity on
       whose behalf the action is brought.’ [Citation.]” Id.
¶ 42       We have rejected these same arguments in Nelson v. Chicago Park District, 408 Ill. App.
       3d 53 (2011), a taxpayer action.2 In Nelson, three individual Chicago taxpayers and a
       community organization sued the Latin School, the Chicago Park District, and others,
       seeking a declaratory judgment as to an agreement between the Chicago Park District and
       the Latin School regarding funding and construction of a soccer field. The parties settled, and
       the suit was dismissed with prejudice. Three different taxpayers later filed suit against the
       same defendants, challenging aspects of the settlement. This court affirmed the dismissal of
       the suit on the basis of res judicata. We held that “[a]lthough the Latin II plaintiffs were not
       parties to the Latin I lawsuit, as Chicago taxpayers, they were in privity with the individual
       Latin I plaintiffs, who were also Chicago taxpayers.” Id. at 61. This court explained that “the
       relevant inquiry is whether the interests of the Latin II plaintiffs were adequately represented
       in Latin I.” Id. On that question, we concluded that “the interests of the Latin II plaintiffs
       were the same as those represented in Latin I because the overriding concern in both cases
       was an unlawful transfer of public property to a private party.” Id. at 62.
¶ 43       As in Nelson, Lutkauskas and the other taxpayer plaintiffs here were in privity. The

               2
                Unlike a taxpayer derivative action, a “taxpayer action” is a suit brought by private persons
       “on behalf of themselves and as representatives of a class of taxpayers similarly situated within a
       taxing district or area.” (Emphasis added and internal quotation marks omitted.) Scachitti v. UBS
       Financial Services, 215 Ill. 2d 484, 493 (2005).

                                                   -12-
       plaintiffs represent the same legal interests, even more so than in Nelson, where the Latin II
       plaintiffs were challenging the settlement reached in Latin I and where plaintiffs were acting
       as taxpayers acting for themselves and on behalf of a class. In this case, all plaintiffs filed
       taxpayer actions “in the name and for the benefit of” the district under the authority of
       section 20-6 of the School Code. Moreover, Lutkauskas and his fellow taxpayers sought
       recovery from the district defendants on identical grounds, and all their claims against Knutte
       related to Knutte’s complicity in the district defendants’ alleged violation of the School
       Code. We agree with the circuit court that there is an identify of plaintiffs among their
       taxpayer suits.
¶ 44        As to the third requirement, Lutkauskas somewhat confusingly suggests that it was not
       met, because he “alleged several new claims against Knutte” and these claims “sufficiently
       differ from those of the preceding consolidated [c]omplaint.” Lutkauskas does not further
       explain his position or cite any authority. As Knutte points out, “separate claims will be
       considered the same cause of action for purposes of res judicata if they arise from a single
       group of operative facts, regardless of whether they assert different theories of relief.” River
       Park, Inc. v. City of Highland Park, 184 Ill. 2d 290, 311 (1998); Cooney v. Rossiter, 2012
       IL 113227, ¶ 21. Put another way, “assertions of different kinds or theories of relief arising
       out of a single group of operative facts constitute but a single cause of action.” Cooney, 2012
       IL 113227, ¶ 22 (quoting Torcasso v. Standard Outdoor Sales, Inc., 157 Ill. 2d 484, 490-91
       (1993)). Here, the factual allegations relating to Knutte in all three complaints are parallel:
       each suit alleges that Knutte improperly issued clean audit opinions that failed to disclose the
       district defendants’ alleged misappropriations and thereby concealed the district’s losses.
       Lutkauskas offers no argument to the contrary,3 and we thus conclude that an identity of
       cause of action exists. As a result, we affirm the court’s dismissal of Lutkauskas’s claims
       against Knutte.
¶ 45        Lutkauskas finally argues that his due process rights were violated when the circuit court
       denied him a fair opportunity to litigate “his own claims.” In Hansberry v. Lee, 311 U.S. 32
       (1940), the United States Supreme Court held that it would violate the due process clause of
       the fourteenth amendment to bind litigants to a judgment rendered in an earlier litigation to
       which they were not parties and in which they were not adequately represented. Yet the court
       has held that states “are generally free to develop their own rules for protecting against the
       relitigation of common issues or the piecemeal resolution of disputes.” Richards v. Jefferson
       County, 517 U.S. 793, 797 (1996). More specifically, in cases “in which the taxpayer is using
       that status to entitle him to complain about an alleged misuse of public funds,” the court
       reasoned that “the States have wide latitude to establish procedures not only to limit the
       number of judicial proceedings that may be entertained but also to determine whether to
       accord a taxpayer any standing at all.” Id. at 803.

               3
                In fact, Lutkauskas apparently concedes the third res judicata requirement in his reply brief,
       though his position again is not set forth with clarity. The reply brief states, without further
       elaboration: “As to the third requirement, Plaintiff Lutkauskas submits that identity of cause of
       action may be similar with respect to the core operative facts.”

                                                   -13-
¶ 46       Lutkauskas principally relies on three United States Supreme Court cases to support his
       due process argument. In Richards v. Jefferson County, 517 U.S. 793 (1996), three county
       taxpayers and the director of finance for the city of Birmingham had sued the county
       challenging the validity of an occupation tax. The tax was upheld in that case (the original
       suit), and two classes of taxpayers later sought declaratory judgment challenging the
       constitutionality of the tax. The United States Supreme Court held that the judgment in the
       original suit did not have res judicata effect, reasoning that plaintiffs “did not sue on behalf
       of a class; their pleadings did not purport to assert any claim against or on behalf of any
       nonparties; and the judgment they received did not purport to bind any *** taxpayers who
       were nonparties.” Id. at 801. The Richards Court distinguished the case before it from a case
       (similar to the one here) where “the taxpayer is using that status to entitle him to complain
       about an alleged misuse of public funds *** or about other public action that has only an
       indirect impact on his interest.” Id. at 803.
¶ 47       In South Central Bell Telephone Co. v. Alabama, 526 U.S. 160 (1999), the Court
       confronted similar facts. There, South Central Bell Telephone Company filed a suit
       challenging an Alabama tax. Prior to South Central Bell’s suit, four foreign corporations had
       challenged the same Alabama tax and lost. The Court held that the earlier judgment against
       the foreign corporations did not have a res judicata effect on the South Central Bell suit.
       Relying on Richards, the Court explained that the two relevant cases involved different
       plaintiffs and different tax years; that neither was a class action; and that no party claimed
       there was privity or some other special relationship between the two sets of plaintiffs.
¶ 48       In Taylor v. Sturgell, 553 U.S. 880 (2008), two individuals, Herrick and Taylor, each
       brought separate claims under the Freedom of Information Act, seeking the same public
       records. Addressing a question of federal common law, the Supreme Court rejected the
       doctrine of preclusion by “virtual representation,” holding that the prior judgment against
       Herrick did not bar Taylor from maintaining his lawsuit because Herrick had not adequately
       represented Taylor in the prior suit. Taylor, 553 U.S. at 885.
¶ 49       While Lutkauskas again characterizes himself as an “individual taxpayer” or an
       “individual plaintiff” bringing “his own claims,” we reiterate that he brought his claims on
       behalf of the district. That critical fact, repeatedly ignored by Lutkauskas on appeal, renders
       inapposite the cases he relies on to support his due process argument. Unlike all of those
       cases, here Lutkauskas and his fellow taxpayers were representing the interests of the district.
       They sought recovery from the district defendants on the same grounds, and all their claims
       against Knutte related to Knutte’s concealment of the district defendants’ alleged violation
       of the School Code. We find no merit to Lutkauskas’s due process argument.

¶ 50                                 CONCLUSION
¶ 51      For the foregoing reasons, we affirm the circuit court’s dismissal of plaintiffs’
       complaints.

¶ 52      Affirmed.

                                                -14-
¶ 53       JUSTICE PUCINSKI’s dissent to be filed later.
¶ 54       JUSTICE PUCINSKI, dissenting.*
¶ 55       I respectfully dissent from the decision of the majority. I would reverse and remand with
       instructions to allow plaintiffs to file amended complaints. This is largely because many of
       the issues raised in these consolidated cases have so little case law that there is a dearth of
       direction from any reliable source. More to the point, the trial court should not have granted
       the section 2-615 and section 2-619 motions to dismiss.
¶ 56       This appeal is the result of various events in three consolidated circuit court of Cook
       County chancery cases:
                (1) No. 10 CH 53428, a declaratory judgment case filed by Laura Reigle, Duane
           Bradley and Louis Emery on behalf of Lemont Bromberek Combined School District
           113A, plaintiffs, v. Dr. Timothy Ricker et al., defendants;
                (2) No. 10 CH 53429, a declaratory judgment case filed by Janet Hughes on behalf
           of Lemont Bromberek Combined School District 113A, plaintiff, v. Dr. Timothy Ricker
           et al., defendants; and
                (3) No. 11 CH 35191, a derivative action filed by Anthony Lutkauskas, taxpayer for
           and on behalf of Bromberek Combined School District 113A, plaintiff, v. Dr. Timothy
           Ricker et al., defendants.
¶ 57       These three cases were consolidated in the circuit court and have also been consolidated
       on appeal; however, the appellate court caption differs slightly.
¶ 58       Plaintiffs are, respectively (at the time the complaints were filed): Laura Reigle, Duane
       Bradley and Louis Emery, residents of and taxpayers in the school district; Janet Hughes,
       resident of and taxpayer in the school district; and Anthony Lutkauskas, resident of and
       taxpayer in the school district.
¶ 59       Defendants consistent to all three cases are, respectively: Dr. Timothy Ricker, a school
       district employee, serving as superintendent; Robert Beckwith, formerly school treasurer and
       business manager for the school district; John Wood, formerly president of the board of
       education of the school district; Dr. Mary Gricus, assistant superintendent of the school
       district; Lisa Wright, former president and vice president of the school district; Kevin
       Doherty, former vice president and current member of the school district; David Leahy,
       former member of the school district; Gwen O’Malley, former secretary of the school
       district; Sue Murphy, former president and current member of the school district; Al
       Albrecht, former member of the school district; and Knutte Associates, P.C., and other
       persons whose names are not yet known.
¶ 60       In the two 2010 chancery cases Lloyd’s Illinois, Inc., was a named defendant. In the 2011
       chancery case, Lloyd’s Illinois, Inc., was dropped as a defendant and Underwriters at Lloyd’s
       London was named instead.

              *
                  Justice Pucinski’s dissent filed October 24, 2013.

                                                    -15-
¶ 61        The two 2010 cases were consolidated on March 15, 2011, and that consolidated case
       was consolidated again with the 2011 case on November 14, 2011. All three are consolidated
       for appeal.
¶ 62        The district defendants’ (employees, past employees, present and past school board
       members and officers) section 2-619 motion to dismiss was granted when the court decided
       that they enjoyed immunity because their actions were the result of budget making, which
       is a legislative act and is discretionary. However, the statute in question, section 20-5 of the
       Illinois School Code, requires a resolution to be passed before any money can be transferred
       out of the working cash fund. That requirement is mandatory: “Moneys [from] the working
       cash fund shall be transferred from the working cash fund to another fund of the district only
       upon the authority of the school board which shall from time to time by separate resolution
       direct the school treasurer to make transfers ***.” (Emphases added.) 105 ILCS 5/20-5 (West
       2010). Further, even if the school board members had some legislative immunity, it is hard
       to see how that legislative immunity covered two current or former employees of the school
       district.
¶ 63        The legislative source of the permission to make the transfers at all is very clear, through
       the use of the mandatory terms: shall, only, and by separate resolution. That language makes
       the act of deciding to transfer the funds discretionary to be sure, but the way it is to be done
       is not discretionary at all; it is mandated or ministerial, which takes it out of the tort
       immunity argument. “ ‘Discretionary acts are those which are unique to a particular public
       office, while ministerial acts are those which a person performs on a given state of facts in
       a prescribed manner, in obedience to the mandate of legal authority, and without reference
       to the official’s discretion as to the propriety of the act.’ ” (Emphases omitted.) Van Meter
       v. Darien Park District, 207 Ill. 2d 359, 371-72 (2003) (quoting Snyder v. Curran Township,
       167 Ill. 2d 466, 474 (1995)).
¶ 64        I agree with plaintiffs that the core actions–or more specifically, inactions–of the district
       defendants were not budget making because the actions were not in the budget; they were
       accomplished by shuffling paper. Beckwith never put the transfers on the agenda. Therefore
       there was no vote. Therefore there was no legislative action. Therefore there is no legislative
       immunity. Further, since the mystery money was never appropriated in a line item it was not
       part of the district defendants’ budget process but was, instead, part of a pattern of
       transferring money without authorization.
¶ 65        The district defendants were also granted dismissal on a section 2-615 motion. However,
       the pleadings clearly show that these defendants’ actions did not conform to the legislative
       requirement for separate resolutions each time a transfer was made, the pleadings contained
       allegations sufficient to demonstrate this fact, and the pleadings, therefore, state a cause of
       action which is granted by the Illinois School Code.
            “Any member of the school board of any school district to which this Article is
            applicable, or any other person holding any office, trust, or employment under such
            school district who wilfully violates any of the provisions of this Article shall be guilty

                                                 -16-
           of a business offense and fined not exceeding $10,000, and shall forfeit his right to his
           office, trust or employment and shall be removed therefrom. Any such member or other
           person shall be liable for any sum that may be unlawfully diverted from the working cash
           fund or otherwise used, to be recovered by such school district or by any taxpayer in the
           name and for the benefit of such school district in an appropriate civil action; provided
           that the taxpayer shall file a bond for all costs and be liable for all costs taxed against the
           school district in such suit, and judgment shall be rendered accordingly. Nothing herein
           shall bar any other remedies.” 105 ILCS 5/20-6 (West 2010).
¶ 66       The law itself makes it clear that there is a cause of action and that a taxpayer is a proper
       person to bring it on behalf of the school district. In these consolidated cases, plaintiff
       Lutkauskas brought a derivative action on behalf of the school district, and as such, he was
       not in the same position as the plaintiffs in the first two of the three cases, who were found
       not to have standing. For this reason, the section 2-615 dismissal of the Lutkauskas case as
       to the district defendants was error.
¶ 67       Lutkauskas’ claims against accountant Knutte were dismissed on the basis of res
       judicata. This presumes that he was in the same position and raised the same claims against
       Knutte as in the earlier two cases, when in fact Lutkauskas’ claims included accountant
       negligence, breach of fiduciary duty and aiding and abetting (illegal) acts. The pleadings
       demonstrate that the accounting firm, Knutte, was the accountant for the school board of the
       school district and it prepared annual financial reports. Those reports indicated that the
       working cash fund had more than $5.4 million in it for several years when in fact the actual
       account balance was $0. Either Knutte was incompetent or it was contriving to assist in
       hiding the actual balance. To let it escape further scrutiny through procedural sleight of hand
       is exactly what should not happen. Let this case go to full discovery. Let both sides make
       their case. That is why we have trial courts.
¶ 68       In addition, during the course of the earlier two cases the accounting firm, Knutte, was
       granted its motion to dismiss with prejudice and, therefore, those plaintiffs were not allowed
       to amend their complaint as to the accountant. Allowing amended complaints is well within
       the discretion of the trial court and would have been appropriate.
¶ 69       The complaint against the insurance company was also dismissed. The issue of Lloyd’s
       being Lloyd’s Illinois was never fully resolved. It is a “Lloyd’s Illinois” stamp on the bond
       in question, yet Lloyd’s Illinois was dismissed when it claimed that the complaint should
       have been against Lloyd’s (of London).
¶ 70       I have a problem with the wholesale dismissal of these claims. The school board’s own
       emails confirm that Beckwith did not submit statutorily required resolutions to the board for
       a vote to transfer funds from the working cash fund to the other appropriated line items.
¶ 71       No one is saying that any of this money was used for exotic vacations or expensive
       personal items. However, the law is very clear that the board must vote on a resolution to
       transfer the funds. This is because without that public notice taxpayers would be unaware–as
       these taxpayers were–that the money in the working cash fund, money which was obtained
       by the issue of bonds, and at taxpayer expense, was being used in excess of the appropriated

                                                  -17-
       amount for some expenses, which means ultimately that the tax levy for the district would
       also be wrong or inflated.
¶ 72        For example (using fictitious numbers), if the school board wanted to spend, say, $1
       million on books, it should appropriate $1 million for that purpose. That way taxpayers and
       parents know what the spending looks like. Instead, in essence, this board appropriated
       $750,000 for books as a line item in its budget, and then without telling anyone, transferred
       in another $250,000 from the working cash fund to cover an expense that was not in the
       budget, was not appropriated, was not in any public meeting or public record and was not
       disclosed by the board or its accountants. That money was obtained by the sale of bonds and
       is expensive money.
¶ 73        The working cash fund is supposed to be used to cover timing gaps in funding, i.e., in
       cases where the property tax money does not come in before the bills are due. It is not
       supposed to be used to add extra to the budgeted line items. That would defeat the whole
       purpose of the resolution requirement, and in fact defeats the purpose of the working cash
       fund itself.
¶ 74        In addition, Beckwith’s bond for $8 million is for him to “faithfully discharge the duties
       of his office according to the law” which he clearly did not do. (Emphasis added.)
¶ 75        Certainly the School Code itself is complicated and this particular part of the legislation
       adds to that complication in that it clearly sets up both a criminal and civil action in the same
       paragraph, but is more specific about the criminal penalties. I believe that a fair reading of
       the statute could be that the failure to consider and vote on the required resolution creates a
       civil liability, which appears to be “for any sum that may be unlawfully diverted from the
       working cash fund or otherwise used.” 105 ILCS 5/20-6 (West 2010). I believe a plain
       reading of the language in section 20-6 makes it clear that while law enforcement officials
       have the responsibility for pursuing the criminal sanctions, a taxpayer on behalf of the school
       district may pursue the civil remedies, and I do not see anything in the statute that makes the
       second dependent on the first.
¶ 76        I also believe that the accounting firm was dismissed prematurely and that Lloyd’s
       Illinois (see seal on the bond) and Lloyd’s London were dismissed without paying enough
       attention to the bond.
¶ 77        In addition, the defendants in their brief take great pains to separate a school board from
       a school district. However, in this case the school district is the entity for which the school
       board is the legislative body. The distinction is important, but could easily and properly be
       corrected with amended pleadings, which, I believe, is the correct course of action.
¶ 78        The board and Beckwith did not follow the law. The accounting firm knew or should
       have known it. The bond on Beckwith covered him for his acts. Taxpayers are correct in
       saying that this finance shell game cost them money because if the board had spent only what
       was appropriated, there would have been no need to raid the working cash fund to add extras
       that were not appropriated, so there would have been no need for that amount of bonds to be
       issued to fund the working cash fund.

                                                 -18-
¶ 79       I believe that the taxpayers should be allowed to amend their complaints, move forward
       with discovery, and pursue recovery from the bonding company, Lloyd’s, for their losses in
       an accounting that includes the cost of the obligation bonds and interest and from the
       accountant, Knutte, for professional negligence.
¶ 80       The Center for Open Government on behalf of the taxpayer plaintiffs was not, in my
       opinion, given its rightful opportunity to pursue robust discovery and amend its complaints.
¶ 81       I believe this case should be allowed to run its course and not be dismissed on the
       motions. There is so little case law on section 20-5 and section 20-6 it is, I believe, an
       important enough set of issues to deserve a full case. Taxpayers have a direct and specific
       interest in transparency in government. I would reverse and remand.

                                               -19-