LARRY DAWSON, Plaintiff-Appellant, v. CITY OF GENESEO, Defendant-Appellee.
No. 3-17-0625
Appellate Court of Illinois, Third District
October 23, 2018
2018 IL App (3d) 170625
PRESIDING JUSTICE CARTER
Illinois Official Reports; Appeal from the Circuit Court of Henry County, No. 16-L-24; the Hon. Jeffrey W. O‘Connor, Judge, presiding.
John E. Remus, of McCarthy, Callas, & Feeney, P.C., of Rock Island, for appellant.
Margaret Kostopulos, Darcy L. Proctor, and Kurt S. Asprooth, of Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer, P.C., of Chicago, for appellee.
PRESIDING
OPINION
¶ 1 Plaintiff, Larry Dawson, a retired former employee of defendant, the City of Geneseo (City), filed a class action lawsuit against the City to challenge the City‘s reduction of the percentage it contributed to retiree health insurance premiums. Plaintiff alleged in his first amended complaint a violation of the pension protection clause of the
¶ 2 I. BACKGROUND
¶ 3 Plaintiff previously worked for the City and subsequently retired. At the time of his retirement, the City‘s Personnel Ordinance allowed employees who retired with 10 or more years of service to continue to participate in the City‘s group health insurance program on a shared-cost basis with the City. The fixed percentage of the cost that the City would pay/contribute to a retiree‘s health insurance premium was specified in the ordinance and varied depending upon the employee‘s years of service. In November 2011, however, the City amended its Personnel Ordinance due to rising healthcare costs, reduced the contribution percentage, and capped the amount that it would contribute to an existing retiree‘s health insurance premium. The amendment went into effect in January 2012.
¶ 4 In December 2016, plaintiff, on behalf of himself and a proposed class of retired City employees, filed the instant class action lawsuit against the City regarding the reduction of the health insurance contribution.1 The complaint was later amended. In count I of the first amended complaint, plaintiff alleged that the health insurance contribution was a retirement or pension benefit that was protected under the pension protection clause of the Illinois Constitution and that the City violated
¶ 5 In June 2017, the City filed a combined motion to dismiss plaintiff‘s first amended complaint. In the combined motion, the City sought to dismiss count I of the first amended complaint pursuant to section 2-615 of the Code because count I allegedly failed to state a cause of action for violation of the pension protection clause. The City also sought to dismiss counts II, III, and IV of the first amended complaint pursuant to section 2-619 of the Code because the counts were allegedly barred by a disclaimer clause in the Personnel Ordinance that precluded the formation of a contract between the City and the retirees. The City attached to its combined motion to dismiss a full copy of the Personnel Ordinance. Of relevance to this appeal, the first page of the Personnel Ordinance indicated that the ordinance had been enacted in 1995 and had been amended several times over the years. Also of relevance to this appeal, section 1.01 of the ordinance, titled “Personnel Ordinance Declaration,” (emphasis omitted) provided:
“Terms, conditions and policies set forth in this ordinance are not intended to create a contract, nor are they to be construed to constitute contractual obligations of any kind or a contract of employment between the City and any of its employees for a specified period of time. Contents of the Personnel Ordinance are for informational purposes only.
This ordinance has been developed at the discretion of the Council and may be amended or cancelled at anytime, at the City‘s sole discretion upon the advice and recommendation of the City Boards.”
Plaintiff filed a response and opposed the City‘s combined motion to dismiss, and the City filed a reply to that response.
¶ 6 In August 2017, a hearing was held on the City‘s combined motion to dismiss. After listening to the arguments of the attorneys, the trial court granted the City‘s combined motion, dismissed count I of the first amended complaint with prejudice pursuant to section 2-615 of the Code, and dismissed counts II, III, and IV of the first amended complaint with prejudice pursuant to section 2-619 of the Code. Plaintiff appealed.
¶ 7 II. ANALYSIS
¶ 8 A. The Trial Court‘s Grant of the City‘s Section 2-615 Motion to Dismiss Count I
¶ 9 As his first point of contention on appeal, plaintiff argues that the trial
¶ 10 The City argues that the trial court‘s ruling was proper and should be upheld. In support of that argument, the City asserts that (1) the pension protection clause applies only to benefits derived from membership in one of the State‘s public pension or retirement systems (those governed by the
¶ 11 A section 2-615 motion to dismiss challenges the legal sufficiency of a complaint based upon defects that are apparent on the face of the complaint. See
¶ 12 The pension protection clause of the Illinois Constitution provides that “[m]embership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”
¶ 13 In the present case, after having reviewed the record, we find that the benefit plaintiff seeks to enforce, a contribution by the City to health insurance premiums for employees and retirees, is not a pension or retirement system in and of itself, as plaintiff seems to imply. Nor is it a benefit that results from membership in one of the protected public pension or retirement systems—those provided
¶ 14 B. The Trial Court‘s Grant of the City‘s Section 2-619 Motion to Dismiss Counts II, III, and IV
¶ 15 As his second point of contention on appeal, plaintiff argues that the trial court erred in granting the City‘s section 2-619(a)(9) motion to dismiss counts II, III, and IV (the breach of contract, promissory estoppel, and equitable estoppel claims) of plaintiff‘s first amended complaint. Plaintiff asserts that the trial court did not have sufficient information before it to grant the City‘s section 2-619 motion to dismiss because the first page of the Personnel Ordinance that the City tendered indicated that the ordinance had been amended several times over the years but did not indicate whether the disclaimer upon which the City relies was present in the applicable prior version of the ordinance. Rather, plaintiff contends, a more thorough review of the history of the ordinance should be undertaken through the discovery process to determine if the disclaimer was present in the applicable prior version. Plaintiff asks, therefore, that we reverse the trial court‘s grant of the City‘s section 2-619 motion to dismiss counts II, III, and IV of plaintiff‘s first amended complaint and that we remand this case with directions for further proceedings.
¶ 16 The City argues that the trial court‘s ruling was proper and should be upheld. The City asserts that the disclaimer contained in the Personnel Ordinance is a clear and unambiguous statement by the City that the Personnel Ordinance does not create any contractual rights or constitute a binding unchangeable promise by the City. In fact, the City maintains, the intent of the disclaimer was to prevent any employee from relying upon the terms of the ordinance. Finally, and more directly to plaintiff‘s specific contention, the City asserts that the time for plaintiff to investigate the history of the ordinance was prior to filing this lawsuit. The City notes
¶ 17 Section 2-619 of the Code allows a litigant to obtain an involuntary dismissal of an action or claim based upon certain defects or defenses. See
¶ 18 In resolving the employment-related section 2-619 issue in the present case, we are mindful of the following principles of employment law. It is well established under Illinois law that an employee hired for an indefinite period of time may be terminated at will. See Duldulao v. Saint Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 489 (1987). The presumption of at-will employment, however, may be overcome by demonstrating that the parties contracted otherwise. Id. For example, an employee handbook may create contract rights that may be enforced by an employee if the following three traditional contract elements are present: (1) the language of the handbook contains a promise clear enough that the employee would reasonably believe that an offer has been made, (2) the handbook is disseminated to the employee so that the employee is aware of its contents and reasonably believes the promise contained therein to be an offer, and (3) the employee starts working
¶ 19 In the instant case, when we consider the legal principles set forth above along with the record presented, we find that the trial court correctly granted the City‘s section 2-619 motion to dismiss. As the City rightly notes, the disclaimer contained in the City‘s Personnel Ordinance clearly stated that the terms, condition, and policies set forth in the ordinance were for information purposes only, were not intended to create a contract, and were not to be construed as constituting contractual obligations of any kind or a contract of employment between the City and any of its employees. Based upon the clear language of the instant disclaimer, plaintiff could not reasonably believe that the terms of the Personnel Ordinance constituted an offer. See id. (holding that it was not reasonable for the plaintiff-employee to construe the terms of the employee manual as an offer when the manual contained a clearly worded disclaimer in its introduction, stating that the manual should not be read as ” ‘forming an expressed or implied contract or promise’ “); Hogge v. Champion Laboratories, Inc., 190 Ill. App. 3d 620, 629-30 (1989) (finding that the plaintiff-employee could not reasonably believe that the terms of the employee handbook constituted an offer when the handbook contained an express disclaimer, stating that the handbook was not intended to be all inclusive and should not be “construed as an employment contract“). Furthermore, the disclaimer in this case also made it clear to plaintiff and the other employees that the City could amend or eliminate the provisions of the Personnel Ordinance at any time. Indeed, the City had amended the ordinance numerous times since the ordinance was enacted. Under the present circumstances, we must conclude, therefore, that count II of plaintiff‘s first amended complaint, which alleged a breach of contract, was negated by the disclaimer and was properly dismissed by the trial court.
¶ 20 A similar analysis applies to count III of plaintiff‘s first amended complaint, which alleged promissory estoppel. Based upon the disclaimer that was contained in the Personnel Ordinance, plaintiff could not reasonably rely on any promises made in the ordinance. See Ivory, 365 Ill. App. 3d at 546; Hogge, 190 Ill. App. 3d at 629-30. Lacking reasonable reliance, plaintiff‘s promissory estoppel claim was defeated. See Quake Construction, Inc. v. American Airlines, Inc., 141 Ill. 2d 281, 309-10 (1990) (noting that to establish a valid claim of promissory estoppel, the plaintiff‘s reliance must be reasonable and justifiable). Therefore, plaintiff‘s claim for promissory estoppel was properly dismissed. See id. Finally, count IV of plaintiff‘s first amended complaint, which alleged a claim of equitable estoppel, was properly dismissed as well because the claim was based upon the existence of a contract between plaintiff and the City and we have already determined that such a contract did not exist. In concluding that plaintiff‘s promissory and equitable estoppel claims against the City were properly dismissed, we note that such claims are generally not allowed against a municipality, where public revenues are at stake, absent some exceptional circumstances. See Chicago Limousine Service, Inc. v. City of Chicago, 335 Ill. App. 3d 489, 499 (2002) (recognizing in the context of a promissory estoppel claim that estoppel against a public body is not favored and is allowed only in rare and unusual circumstances when necessary to prevent fraud and injustice); Patrick Engineering, Inc. v. City of Naperville, 2012 IL 113148, ¶ 40 (noting in the context of an equitable estoppel claim that when public revenues are at stake, estoppel is particularly disfavored). The circumstances of the present case are not rare or unusual or indicative of any type of fraud or injustice on behalf of the City and do not justify the imposition of estoppel. See Chicago Limousine Service, Inc., 335 Ill. App. 3d at 499; Patrick Engineering, Inc., 2012 IL 113148, ¶ 40.
¶ 21 As a final matter, we must take a moment to comment upon plaintiff‘s assertion that additional information was necessary before dismissal could be granted. As the City correctly notes, plaintiff did not allege in his first amended complaint that a different version of the Personnel Ordinance applied or that the applicable version lacked the disclaimer at issue. Thus, we cannot agree with plaintiff‘s assertion that more information is needed before dismissal could be allowed. Plaintiff‘s claims in the instant case were negated by the disclaimer, and the trial court properly granted the City‘s section 2-619 motion to dismiss counts II, III, and IV of plaintiff‘s first amended complaint on that basis.
¶ 22 III. CONCLUSION
¶ 23 For the foregoing reasons, we affirm the judgment of the circuit court of Henry County.
¶ 24 Affirmed.