APPEAL from the Circuit Court of Lake County; the Hon. LLOYD
A. VAN DEUSEN, Judge, presiding.
MR. JUSTICE SEIDENFELD DELIVERED THE OPINION OF THE COURT:
Rehearing denied June 6, 1979.
The People of the State of Illinois and Dennis P. Ryan, as State's Attorney of Lake County (collectively referred to as the People) appeal from a summary judgment entered in favor of Glenn E. Miller and from an order which denied the declaratory relief sought by the People. This case raises the essential issue whether a member of the county board of supervisors who owns stock in a bank which either has been or may be designated as a depository of county funds is called upon to vote or act in the making or letting of a contract of deposit between a county treasurer and a bank as to be in violation of section 3 of the corrupt practices act (Ill. Rev. Stat. 1975, ch. 102, par. 3). The further issue is whether a county board member can vote on the designation of the particular depository in which he has an interest.
On July 13, 1977, Miller filed a complaint for a declaratory judgment and injunctive relief against the County of Lake, Ryan as State's Attorney of the County and the Wheeling Trust and Savings Bank. The complaint alleged that prior to Miller's election to the board he had been a shareholder of the Wheeling Bank; that prior to his election the bank had been designated as an approved depository for Lake County funds; that since his election the Wheeling Bank had continued to be so designated; that he had participated in the vote for such purposes; that he had never concealed his interest but had disclosed it on statements filed with the county; that there had been no increase in deposits since his election but rather a decline in the funds deposited by the county at the Wheeling Bank; that the interest paid by the bank was competitive with all other banks and often paid a greater return than paid by certain of the other designated depositories; and that at no time had he directly or indirectly attempted to influence, persuade or induce the Lake County treasurer to enter into contracts of deposit with the Wheeling Bank. The complaint further alleged that there was an actual controversy in that the State's Attorney of Lake County had stated his opinion that plaintiff's conduct was in violation of the corrupt practices act and had threatened to initiate civil and criminal proceedings. Miller sought a binding determination that he was not violating the corrupt practices act by being both a member of the county board and a shareholder of the Wheeling Bank. He also sought a judgment declaring that the acceptance of deposits by the Wheeling Bank from the Lake County treasurer constituted valid contracts and further sought to enjoin the State's Attorney from proceeding either against him or the bank "during the pendency of these proceedings and permanently thereafter" based upon the alleged violation of the corrupt practices act.
On July 20, 1977, the People filed a separate complaint for declaratory judgment and an accounting naming Miller, the county treasurer of Lake County and the Wheeling Bank as defendants. They sought a determination that the contracts of deposit were void and that all profits from the deposits be returned to the County of Lake.
The Wheeling Bank filed a motion to dismiss under section 45 of the Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 45). In that motion the bank alleged that any contract for the deposit of county funds was between the treasurer of Lake County and the bank and that its director and stockholder Miller did not vote on the making or letting of such contract. Ryan filed a motion to dismiss Miller's complaint which was denied as to Ryan but allowed as to the County of Lake.
On December 20, 1977, the cases were consolidated and Ryan filed his answer to Miller's complaint moving at the same time for an accelerated discovery to determine the extent of Miller's interest in the bank. The motion was continued pending the resolution of Miller's motion for summary judgment. In an affidavit Ryan stated his belief that there was a conflict of interest if a board member voted to use as a depository a bank in which the member held stock, but stated that he had not publicly threatened to initiate criminal action against Miller. It was further alleged in Ryan's complaint on information and belief that Miller had more than one percent but less than two percent of an ownership interest in the Wheeling Bank and that there was an actual controversy between the parties.
On February 2, 1978, the trial judge in a memorandum opinion containing a thorough analysis of the arguments, statute and case law, concluded that (1) an actual controversy existed, (2) there remained no genuine issue of fact, (3) Miller in voting on the ordinance or resolution of the county board designating the Wheeling Bank as a depository for Lake County funds did not violate section 3 of the corrupt practices act and (4) the deposit contracts were valid. The court then granted Miller's motion for summary judgment and dismissed Ryan's complaint against both the county treasurer and the Wheeling Bank. No injunction was ordered, the court finding that it was unnecessary based on its opinion that the State's Attorney would abide by the decision while it remained in force. This appeal followed.
Whether an actual controversy exists is the preliminary question before us. (Ill. Rev. Stat. 1975, ch. 110, par. 57.1.) The State's Attorney argues that a suit for declaratory judgment which seeks to determine the legality of past conduct and to challenge the correctness of an opinion by the State's Attorney and seeks an injunction to bar the State's Attorney from bringing any criminal or civil action respecting past conduct does not present a justiciable controversy.
1, 2 We agree with the finding of the trial court that an actual controversy exists. The purpose of a declaratory judgment action is to obtain judicial resolution of an actual dispute before the parties irrevocably jeopardize their rights. (Richards v. Liquid Controls Corp., 26 Ill. App.3d 111, 130 (1975).) The actuality of the dispute is here found in the pleaded and admitted facts that the State's Attorney of Lake County had given a formal written opinion that the conduct of Miller was a violation of law and had at least privately threatened to institute civil or criminal proceedings. Where there is in fact no real threat of a proceeding being initiated against a party and the only basis for his fear is a report by a subordinate stating that the prosecution might be in order, there is no "actual controversy" justifying declaratory relief. (Howlett v. Scott, 69 Ill.2d 135, 143 (1977).) Where, however, a legal opinion has been issued by the prosecuting authority indicating his intent to prosecute this supposed violation, a clear controversy would appear to exist. (Shoresman v. Burgess, 412 F. Supp. 831, 835 (E.D. Ill. 1976).) Here the top prosecuting authority in the county had determined that the plaintiff's conduct was in violation of the corrupt practices act and had threatened to initiate proceedings against Miller. Therefore the trial court did not abuse its discretion in hearing the cause as a declaratory judgment action. Cf. Howlett v. Scott, 69 Ill.2d 135, 142 (1977).
The judgment of the trial court is based upon its finding that on the undisputed facts, Miller in voting on an ordinance or resolution of the county board designating the Wheeling Bank as an approved depository for county funds did not violate section 3 of the corrupt practices act. Ill. Rev. Stat. 1975, ch. 102, par. 3.
The only undisputed facts involved, however, were that Miller was a member of the Lake County Board of Supervisors, that he voted to designate the Wheeling Bank as an approved depository for county funds while he was a stockholder with no less than a one-percent and no more than a two-percent interest in the Wheeling Bank and that he was also later a director of that bank. There were other facts which were disputed but which, in the judgment of the trial court, did not call for an inquiry as a matter of law. These included the allegations by the State that, contrary to Miller's statements in his complaint, he had concealed his interest in the Wheeling Bank, that the nature and extent of Miller's participation in the county board's vote to designate the depository included votes against various amendments which would have removed the Wheeling Bank from the list of qualified depositories, votes to reconsider the action of the board after it had removed the bank and which resulted in the restoration of the bank as a qualified depository. The trial court did not consider these facts material based upon its conclusion that a contract of deposit was not a contract in the making or letting of which Miller was called upon to vote or act.
The trial court held that Miller, as a shareholder and director of the Wheeling Bank, did have an interest in the contracts of deposit entered into by the county treasurer and the bank. The court, however, decided that Miller, as a county board member, was not in a position where he, in his official capacity, might be called upon to act or vote in the making or letting of these contracts. In the trial court's view, the county board, in conferring depository status upon the Wheeling Bank pursuant to section 4 of the county treasurer's act (Ill. Rev. Stat. 1975, ch. 36, par. 20), did nothing more than insulate the treasurer from personal liability for any loss to the county that might occur were the Wheeling Bank, at some future date, to become insolvent.
It is, of course, true that the conferral of depository status upon the Wheeling Bank by the board did not, in any way, have the effect of compelling the treasurer to deposit county funds with that bank. Further, despite the board's action, the decision whether to deposit such funds with the Wheeling Bank would remain wholly within the treasurer's discretion. Also, the treasurer could have deposited money at the Wheeling Bank even if it were not an official county depository; of course, in this last situation, the treasurer ...