Opinion
1-21-1338
03-31-2022
DOLORES LANE, Plaintiff-Appellant, v. THE VILLAGE OF HANOVER PARK POLICE PENSION FUND and THE BOARD OF TRUSTEES OF THE VILLAGE OF HANOVER PARK POLICE PENSION FUND, Defendants-Appellees.
This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).
Appeal from the Circuit Court of Cook County No. 20 CH 1387 Honorable Eve M. Reilly, Judge presiding.
JUSTICE BURKE delivered the judgment of the court. Justices McBride and Ellis concurred in the judgment.
ORDER
BURKE JUSTICE.
¶ 1 Held: We affirm the circuit court's dismissal of plaintiffs declaratory judgment action where she failed to file her complaint before the statute of limitations for seeking review of administrative decisions had expired and the defendant-administrative agency had subject-matter jurisdiction to render the administrative decision at issue.
¶ 2 During the time that Michael Lane, the husband of plaintiff Dolores Lane, was alive, he received a pension from the Village of Hanover Park Police Pension Fund (Fund). Several years after he began receiving that pension, the Board of Trustees of the Village of Hanover Park Police Pension Fund (Board) became aware that his pension was mistakenly set too high. Due to the law at the time, however, the Board believed it was unable to correct this error. Seven years after the Board learned of the mistake, Lane passed away. Plaintiff, as his surviving spouse, applied to the Board for a survivor pension. The Board approved her application, but set her survivor pension to be commensurate with what Lane should have been receiving had his pension been accurately calculated, not commensurate with what Lane was actually receiving at the time he passed away. Thereafter, plaintiff brought a declaratory judgment action against the Fund and the Board (collectively, defendants), arguing that the Board acted without subject-matter jurisdiction when it approved her survivor pension but at the reduced amount. On defendants' motion, the circuit court dismissed her complaint, finding that she failed to challenge the Board's final administrative decision on her application for a survivor pension within the time period required by law.
¶ 3 Plaintiff now appeals the court's dismissal, contending that it erred in dismissing her complaint where the Board lacked subject-matter jurisdiction to reduce her survivor pension. For the reasons that follow, we affirm the dismissal of the circuit court.
¶ 4 I. BACKGROUND
¶ 5 Plaintiff and Lane married in 1971. Two years later, Lane began working as a police officer in Hanover Park. However, while on the job, he became injured and subsequently was awarded a line-of-duty disability pension beginning in May 1986. Around November 2001, after turning 50 years old and accumulating enough years of creditable service in the Fund, Lane applied to convert his disability pension into a regular pension, as permitted by the Illinois Pension Code (Pension Code). See 40 ILCS 5/3-116.1 (West 2000). The Board approved that conversion, and Lane began receiving a regular pension.
¶ 6 In 2011, the Board hired an accounting firm to manage the Fund. Shortly after, the accounting firm discovered that the Board had miscalculated Lane's pension. Instead of awarding Lane a pension based on the calculation provided in section 3-116.1 of the Pension Code (id.), which involved the conversion of pensions of disabled officers, the Board awarded Lane a pension based on the calculation provided in section 3-111 of the Pension Code (id. § 3-111). As a result, following Lane's pension conversion in 2001, the Fund began overpaying Lane by approximately $1230 per month. However, due to the compounding of cost-of-living increases, by the time the accounting firm discovered the error, the Fund was overpaying Lane by approximately $1640 per month. Upon discovering the mistake, the accounting firm alerted the Board. Although, at the time, the Pension Code had a section detailing a process to recover overpayments via deductions from future pension payments (see id. § 3-144.2), the Board believed it was unable to avail itself of this provision due to the length of time that Lane had been receiving the overpayments. The Board did, however, attempt to rectify the situation by working directly with Lane and his attorney to adjust his future pension payments, but they rejected such attempts. As such, the Fund had to continue paying Lane the improper amount until his death.
¶ 7 In May 2018, Lane passed away. By this time, the Fund was overpaying Lane by approximately $2017 per month due to further compounding of cost-of-living increases. Following his death, plaintiff applied for a survivor pension, which entitled her "to the pension to which [Lane] was then entitled." Id. § 3-112. Because of the overpayments that Lane had received, George Sullivan, the president of the Fund and a trustee of the Board, wrote the public pension division of the Illinois Department of Insurance (Department), seeking an advisory opinion as to the proper calculation of plaintiff's survivor pension. In April 2019, Mark Thielen, an assistant general counsel for the Department, responded to Sullivan's letter. Thielen advised that the Board should conduct a hearing and render an administrative decision on the merits of plaintiff's application for a survivor pension. Additionally, Thielen stated that "[t]he Fund's administrative decision in November 2001," when it approved Lane's pension conversion, "may not be res judicata, estoppel, waiver or law of the case in this current administrative decision" concerning plaintiff's application for a survivor pension. In June 2019, plaintiff received a letter from Sullivan notifying her that the Board would be formally considering her application for a survivor pension at its next regular meeting the following month. Meanwhile, the overpayments continued after Lane passed away and through June 2019 while the Board considered plaintiff's application for a survivor pension. Through June 2019, the overpayments to Lane and plaintiff totaled $336,226.15.
¶ 8 On July 9, 2019, at the Board's regular meeting, which plaintiff and her attorney attended, it unanimously voted to approve her application for a survivor pension and set her monthly benefit at $1797.57. This figure was based on a calculation by the Board's accounting firm using the parameters set by the relevant provisions of article 3 of the Pension Code (id. § 3-101 et seq). According to the minutes of the Board's meeting, the Board also voted unanimously to not seek restitution from plaintiff based on her and Lane's receipt of the overpayments.
¶ 9 On August 7, 2019, Sullivan sent plaintiff a letter via certified mail informing her that the Board approved her application for a survivor pension. Sullivan stated that the basis for the award was reflected in documentation attached to the letter and had been calculated by the Board's accounting firm. Sullivan further noted that the letter was the Board's final decision on her application. At the bottom of the letter, in bold, it stated: "THIS IS A FINAL AND APPEALABLE DECISION OF THE HANOVER PARK POLICE PENSION FUND. THIS DECISION CAN BE REVIEWED IN THE CIRCUIT COURT BY FILING A COMPLAINT FOR ADMINISTRATIVE RELIEF WITHIN 35 DAYS FROM THE DATE THAT A COPY OF THIS DECISION WAS SERVED UPON THE PARTY AFFECTED THEREBY." Plaintiff received the letter 13 days later.
¶ 10 In early January 2020, after receiving documents pursuant to a Freedom of Information Act (5 ILCS 140/1 et seq. (West 2020)) request, an attorney representing plaintiff wrote the public access counselor of the Office of the Attorney General and stated that his review of the documents revealed an Open Meetings Act (OMA) (5 ILCS 120/1 et seq. (West 2020)) violation. The attorney requested that the public access counselor review the potential violation and issue an appropriate decision. Ten days later, an assistant Attorney General responded to the letter and asserted that the request for review was untimely under the OMA. See id. § 3.5(a).
¶ 11 On February 3, 2020, plaintiff filed a complaint for a declaratory judgment against the Fund and the Board, in which she alleged that the Board committed a violation of the OMA. After appearing, defendants moved to dismiss the complaint based on the claim being untimely. Thereafter, plaintiff moved for leave to file an amended complaint, which the circuit court granted.
¶ 12 In January 2021, plaintiff filed an amended complaint against the Board and the Fund, where she withdrew her OMA violation claim. In its place, plaintiff alleged that the Board's August 2019 decision was void ab initio for a lack of subject-matter jurisdiction. Plaintiff contended that, once the Board converted Lane's pension in 2001, it had 35 days to administratively review its decision. According to plaintiff, because the Board did not seek review within 35 days, it had no jurisdiction to review that award, including to reduce plaintiff's survivor pension that was based on Lane's pension award in 2001. Plaintiff concluded that the Board could only award her a survivor pension based on the amount of the pension Lane was actually receiving at the time of his death. As relief, plaintiff requested, inter alia, that the circuit court declare the August 2019 decision of the Board void ab initio for lack of subject-matter jurisdiction, order the Board to calculate plaintiff's survivor pension based on the pension Lane had actually been receiving at the time of his death, and order the Board to provide plaintiff with back benefits.
¶ 13 Two months later, defendants filed a joint motion to dismiss pursuant to section 2-619 (a) (5) of the Code of Civil Procedure (735 ILCS 5/2-619(a) (5) (West 2020)). They primarily posited that plaintiff's complaint was untimely, as she failed to challenge the Board's final administrative decision on her application for a survivor pension within 35 days, as required by the Administrative Review Law (735 ILCS 5/3-101 et seq. (West 2020)). Following a hearing on defendants' motion, the circuit court found that the Board had subject-matter jurisdiction to determine the amount of plaintiff's survivor pension. As such, the court concluded that she had 35 days to seek administrative review of the Board's final administrative decision on her application for a survivor pension, which she failed to do. Consequently, the court found that the statute of limitations had expired, and it granted defendants' motion to dismiss.
¶ 14 Plaintiff timely appealed the circuit court's dismissal order.
¶ 15 II. ANALYSIS
¶ 16 A motion to dismiss brought under section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 2020)) admits the legal sufficiency of the complaint but asserts that certain external defects or defenses defeat the claims therein. Sandholm v. Kuecker, 2012 IL 111443, ¶ 55. One such defect or defense is that the plaintiff's "action was not commenced within the time limited by law." 735 ILCS 5/2-619(a) (5) (West 2020). When reviewing such a motion, the circuit court must accept all well-pled facts in the complaint as true, as well as any reasonable inferences from those facts. Sandholm, 2012 IL 111443, ¶ 55. In addition, the pleadings and supporting documents must be viewed in the light most favorable to the nonmoving party. Id. We review a dismissal pursuant to section 2-619 de novo. Id.
¶ 17 An administrative agency, such as the board of trustees of a pension fund (see Ray v. Beussink & Hickam, P.C., 2018 IL App (5th) 170274, ¶ 19), has no common law authority and "is limited to those powers granted to it by the legislature in its enabling statute." Julie Q. v. Department of Children & Family Services, 2013 IL 113783, ¶ 24. As such, an agency's ability to alter its decisions is limited by statute. Weingart v. Department of Labor, 122 Ill.2d 1, 15 (1988). If an agency acts in a manner not conferred by statute, it lacks jurisdiction to act and its decision is void. Julie Q., 2013 IL 113783, ¶ 24.
¶ 18 As Hanover Park has a population of 500, 000 residents or less, a fact we may judicially notice (see U.S. Bank National Ass 'n v. Rahman, 2016 IL App (2d) 150040, ¶ 33), the Board has, at all relevant times, been governed by article 3 of the Pension Code. 40 ILCS 5/3-101 et seq. (West 2020) (regulating police pension funds in municipalities of 500, 000 or less). This article establishes various powers and duties of a pension fund board (see id. § 3-131), such as the duty to control and manage the pension fund, including all disbursements to disabled police officers, retired police officers, their surviving spouses, their minor children and their dependent parents. Id. § 3-132. A pension board also has a fiduciary duty to the Fund's participants and beneficiaries. Id. § 1-101.2; 1-109; see also Marconi v. Chicago Heights Police Pension Board, 225 Ill.2d 497, 543 (2006) ("[T]he Pension Code establishes that a pension board owes a fiduciary duty toward its participants and beneficiaries."). As a fiduciary, each trustee of a pension board must "discharge his or her duties with respect to the retirement system or pension fund solely in the interest of the participants and beneficiaries." 40 ILCS 5/1-109 (West 2020).
¶ 19 Turning to the instant case, after Lane passed away in May 2018, plaintiff applied for a survivor pension and became statutorily "entitled to the pension to which [Lane] was then entitled." Id. § 3-112. The Board then considered plaintiff's application, and, at a regular meeting she and her attorney attended, it voted unanimously to approve her application and set her monthly survivor pension at $1797.57. The Board's accounting firm arrived at this calculation using the parameters set by the relevant provisions of article 3 of the Pension Code (id. § 3-101 et seq). Sullivan, as president of the Fund and a trustee of the Board, subsequently sent plaintiff a letter via certified mail informing her that the Board approved her application for a survivor pension, providing documentation supporting the calculation of her survivor pension and explaining to her in bolded capitalized letters the process for challenging the Board's decision.
¶ 20 In resolving plaintiff's appeal of the circuit court's dismissal, there are essentially two questions that must be resolved: (1) whether the Board issued a final administrative decision when it approved her application for a survivor pension in the amount of $1797.57 per month and (2) whether the Board had subject-matter jurisdiction to do so. The initial, threshold question is whether the Board's issuance of the approval letter constituted a final administrative decision because, if so, there are temporal limitations to challenging such a decision. Section 3-148 of the Pension Code (40 ILCS 5/3-148 (West 2020)) provides that, "[e]xcept as it relates to any time limitation to correct a mistake as provided in Section 3-144.2 [of the Pension Code], the provisions of the Administrative Review Law *** govern all proceedings for the judicial review of final administrative decisions" of a police pension board in a municipality with 500, 000 residents or less. According to the Administrative Review Law, an administrative decision is "any decision, order or determination of any administrative agency rendered in a particular case, which affects the legal rights, duties or privileges of parties and which terminates the proceedings before the administrative agency." 735 ILCS 5/3-101 (West 2020). In order to judicially challenge a final administrative decision, the challenging party must file a complaint and issue a summons "within 35 days from the date that a copy of the decision sought to be reviewed was served upon the party affected by the decision." Id. § 3-103. The 35-day clock begins to run on the date the agency mails the decision to the affected party. Grimm v. Calica, 2017 IL 120105, ¶¶ 16-17. The 35-day time period for seeking administrative review is jurisdictional, and if the challenging party fails to seek judicial review within that time period, that party is barred from seeking judicial review. Rodriguez v. Sheriff's Merit Comm'n of Kane County, 218 Ill.2d 342, 350 (2006).
¶ 21 Initially, we note that, in plaintiff's amended complaint, she acknowledged that the Board's August 2019 letter to her was "a final Decision and Order." Furthermore, it is clear that, based on our prior decisions, a pension board's decision regarding an application for a survivor pension is a final administrative decision. See Sola v. Roselle Police Pension Board, 342 Ill.App.3d 227, 232 (2003) (finding a pension board's approval of a survivor pension to be a final administrative decision even in the absence of a formal written decision); see also Village of Buffalo Grove v. Board of Trustees of Buffalo Grove Firefighters' Pension Fund, 2020 IL App (2d) 190171, ¶¶ 23-26 (treating a pension board's approval of an application for a survivor pension as a final administrative decision); Gatz v. Board of Trustees of Village of Maywood Police Pension Fund, 2019 IL App (1st) 190556, ¶¶ 20-33 (treating a pension board's denial of an application for a survivor pension as a final administrative decision). It follows that, in this case, the Board's approval of plaintiff's application for a survivor pension in the amount of $1797.57 per month was a final administrative decision.
¶ 22 Furthermore, in Thielen's advisory letter to Sullivan in response to his inquiry as to the proper calculation of plaintiff's survivor pension, he asserted that the Board should conduct a hearing and render an administrative decision on the merits of plaintiff s application for a survivor pension. As such, the Department interpreted a decision on an application for a survivor pension to be a final administrative decision, an interpretation that "is entitled to considerable deference." Roselle Police Pension Board v. Village of Roselle, 232 Ill.2d 546, 559 (2009). Given plaintiff's acknowledgement in her complaint, our previous decisions and the Department's interpretation, the Board issued a final administrative decision on plaintiff's application for a survivor pension. And thus, when Sullivan sent that decision letter to plaintiff via certified mail on August 7, 2019, the 35-day clock to judicially challenge that final administrative decision begun. See 735 ILCS 5/3-103 (West 2020); Grimm, 2017 IL 120105, ¶¶ 16-17. To this end, plaintiff had until September 11, 2019, to seek judicial review of Board's decision. However, plaintiff waited until February 3, 2020, to file her initial complaint, far beyond the time limitation imposed the Administrative Review Law. See 735 ILCS 5/3-103 (West 2020). Consequently, plaintiff filed her complaint for a declaratory judgment beyond the time period allowed by the applicable statute of limitations.
¶ 23 Nevertheless, "a decision rendered by an administrative agency that lacks jurisdiction over the parties or the subject matter, or a decision that is beyond the statutory authority of the administrative agency, is void and can be collaterally attacked in any court, at any time." Wabash County v. Illinois Municipal Retirement Fund, 408 Ill.App.3d 924, 930 (2011). This principle leads us to the second critical question in this appeal, and the one over which plaintiff most adamantly argues. She claims that the Board acted without subject-matter jurisdiction when it decided to reduce her survivor pension from an amount commensurate with what Lane had been receiving at the time of his death to an amount commensurate with what he should have been receiving at the time of his death had his pension been accurately calculated initially. According to plaintiff, if the circuit court lacked subject-matter jurisdiction, then her failure to timely file her complaint for administrative review is inconsequential.
¶ 24 However, plaintiff's argument presupposes that a survivor pension is a continuation of the benefit received by the retired pensioner. It is not, a point plaintiff even acknowledges when, in her brief, she notes that a survivor pension is "a separate and distinct benefit" unavailable until the retired pensioner passes away." [U]nlike other pension rights, survivor benefits have no possibility of becoming available for the employee's direct enjoyment. Rather, they are statutorily designated for survivors and not for the control of the employee." In re Marriage of Hannon, 207 Ill.App.3d 329, 335-36, (1991). Notably, the pension for a retired police officer is controlled by a different section of the Pension Code than the pension for a survivor of the police officer. See 40 ILCS 5/3-112 (West 2020) (titled "Pension to survivors"). Section 3-117.1 (id. § 3-117.1) of the Pension Code buttresses this conclusion by providing that, "[a] retired police officer or surviving spouse may execute a written waiver of the right to receive all or part of his or her pension." (Emphasis added.) In other words, section 3-117.1 demonstrates that a retired police officer's pension is independent from the survivor's pension.
¶ 25 Additionally, plaintiff claims that the Board improperly reviewed several of its prior final administrative decisions on Lane's pension in order to reduce her survivor pension. That simply is not true. To be sure, plaintiff and Lane were able to keep all $336,226.15 of miscalculated pension benefits. Contrary to plaintiff's claim, all the Board did in this case was fulfill its statutory obligations, as a fiduciary, to determine the proper pension owed to plaintiff, as the surviving spouse of Lane. See id. §§ 1-101.2; 1-109, 3-112, 3-132. To do otherwise would result in the Board breaching its fiduciary duty and opening itself up to liability for such a breach. See Fields v. Schaumburg Firefighters' Pension Board, 383 Ill.App.3d 209, 210 (2008) ("Members of the board are deemed fiduciaries with respect to the pension fund or retirement system [citation], and may be held personally liable for breach of any fiduciary duty established by the Illinois Pension Code.").
¶ 26 Still, plaintiff relies on multiple cases for support to argue that the Board could not grant her a survivor pension based on an amount less than what Lane was receiving when he passed away, but all of her cases are different than the instant case. In Rossler v. Morton Grove Police Pension Board, 178 Ill.App.3d 769, 772-774 (1989) and Ray, 2018 IL App (5th) 170274, ¶¶ 3-5, 39, this court held that pension boards lacked jurisdiction to modify pensions to retired officers where they sought to do so more than 35 days after they issued their administrative decisions on the officers' benefits. In contrast to Rossler and Ray, in the instant case, the Board did not attempt to modify the benefits of Lane, but rather granted plaintiff a survivor pension commensurate with what Lane should have been receiving had his pension been accurately calculated.
¶ 27 Furthermore, in Sola, 342 Ill.App.3d at 229, a surviving spouse applied for a survivor pension after her husband passed away and, in doing so, also requested annual three percent cost-of-living increases, both of which the pension board granted. More than seven years later, the surviving spouse received a letter informing her that the pension board would not increase her benefits the following year, as the Illinois Department of Insurance's position was that surviving spouses were not entitled to cost-of-living increases. Id. The appellate court concluded that the pension board lacked jurisdiction to modify her survivor pension because it attempted to do so more than 35 days after its final administrative decision. Id. at 232. In contrast to Sola, in the instant case, the Board did not attempt to modify a survivor pension several years after it had approved the pension, but rather set plaintiff's survivor pension at the appropriate amount immediately upon her application.
¶ 28 In light of the foregoing, the Board acted with subject-matter jurisdiction when it approved plaintiff's application for a survivor pension and set her monthly benefit at $1797.57. Because the Board had subject-matter jurisdiction and plaintiff filed her complaint for a declaratory judgment beyond the time period allowed by the applicable statute of limitations, the circuit court properly dismissed her complaint.
¶ 29 Nonetheless, in her brief, plaintiff raises various arguments about the substantive decision of the Board. For instance, she argues that, when she applied for a survivor pension, she was entitled to the pension to which [Lane] was entitled when he passed away. And according to plaintiff, that amount was the amount Lane was actually receiving when he passed away, not the amount he should have been receiving had the Board not miscalculated his pension long ago. However, an argument about what plaintiff was "entitled" to as a survivor pension and the meaning of "entitled" for purposes of section 3-112 of the Pension Code (40 ILCS 5/3-112 (West 2020)) are beyond the scope of what the issues are in this appeal, which are purely procedural.
¶ 30 Lastly, we do feel sympathetic toward plaintiff in that what she had budgeted for in retirement may have to be modified based on her survivor pension being less than what she perhaps expected. But conversely, she has known for some time that Lane received a pension that was mistakenly set too high and resulted in a $336,226.15 windfall they never had to return. All things being equal, plaintiff should be fortunate that controls were not in place to discover the error earlier and the law, as it was, did not allow the Fund to recover any of the windfall.
¶ 31 III. CONCLUSION
¶ 32 For the foregoing reasons, we affirm the judgment of the circuit court of Cook County.
¶ 33 Affirmed.