Board of Trusteees of the Harvey Police Pension Fund v. City of Harvey
2017 IL App (1st) 153095
| Ill. App. Ct. | 2017Background
- In 2006 the Harvey Police Pension Fund sued the City of Harvey alleging failure to levy/ remit pension taxes under section 3-125 of the Illinois Pension Code. The parties settled in February 2008. The court dismissed the case but retained jurisdiction to enforce the settlement.
- Under the Settlement Agreement the City agreed to pay $551,079.83 in past-collected property taxes, $6,404.21 in attorney fees, $50,000/month until repayment, and to annually levy pension taxes beginning with fiscal year 2006–2007 using an enrolled actuary’s valuation; levied taxes were to be paid to the Fund within 30 days.
- The Pension Fund later moved to compel enforcement, alleging the City had not complied and owed additional sums. The trial court ordered an accounting and both parties sought summary judgment on liability.
- The parties engaged Foster & Foster to produce an actuarial report (the "Franken Report") calculating the annual levies the City should have made for fiscal years 2006–2007 through 2013–2014.
- The trial court held it had jurisdiction to enforce the Settlement Agreement until A(1) (the original sum) and agreed attorney fees were paid, accepted the Franken Report, and entered judgment for the Pension Fund for $7,334,181.88 plus attorney fees. The City appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the circuit court retained jurisdiction to enforce provisions beyond A(1) | Settlement and dismissal expressly retained court jurisdiction to enforce the Agreement until A(1) and fees were repaid; court may enforce the Agreement’s terms. | B(5) limited retained jurisdiction to enforcement only until City repaid A(1), so court could not enforce other provisions (A(8)). | Court had jurisdiction: retention language covered enforcement of the Agreement until A(1) and fees were paid; those had not been fully paid, so jurisdiction continued and could enforce A(8). |
| Whether City was liable for unpaid annual levies under A(8) | The Settlement required annual levies determined by an enrolled actuary and payment to the Fund; Franken Report correctly calculated each year’s levy and damages are cumulative for missed years. | City argued under §3-125 only the latest actuarial valuation governs and incorporates past liabilities, so only 2013–2014 amount would be due. | Held for Pension Fund: Settlement controls; Franken affidavit showed each year’s levy was separate (not cumulative); City accepted the actuarial calculations and did not contest them. |
| Whether the trial court erred in using the Franken Report and affidavit as the basis for damages | Franken’s report used prescribed actuarial methods; parties agreed to be bound by the calculations; no counter-evidence presented. | City contended report/valuation approach produced an inflated, impermissible cumulative award inconsistent with statutory valuation. | Court properly relied on the agreed actuarial determination consistent with the Settlement, and entered summary judgment on damages. |
| Whether attorney fees award exceeded the court’s authority | Because the court had authority to enforce the Settlement, it could award fees as provided in the Agreement. | City argued fee award was unauthorized if court lacked jurisdiction to enforce entire Agreement. | Fee award affirmed: court had jurisdiction and the Settlement provided for attorney fees. |
Key Cases Cited
- In re Estate of Ahern, 359 Ill. App. 3d 805 (Ill. App. Ct.) (trial court subject-matter jurisdiction reviewed de novo)
- Estate of Gebis, 186 Ill. 2d 188 (Ill. 1999) (subject-matter jurisdiction defined; court power to grant relief)
- Director of Insurance v. A&A Midwest Rebuilders, Inc., 383 Ill. App. 3d 721 (Ill. App. Ct.) (trial court may retain jurisdiction to enforce settlement)
- Rose v. Mavrakis, 343 Ill. App. 3d 1086 (Ill. App. Ct.) (settlement agreements treated as contracts)
- Fidelity Nat’l Title Ins. Co. of N.Y. v. Westhaven Props. P’ship, 386 Ill. App. 3d 201 (Ill. App. Ct.) (contract language given effect as written)
- M.H. Detrick Co. v. Century Indem. Co., 299 Ill. App. 3d 620 (Ill. App. Ct.) (settlement agreements encouraged and enforced)