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Libertyville Township v. Woodbury





Appeal from the Circuit Court of Lake County; the Hon. A.I. Singer, Judge, presiding.


JUSTICE LINDBERG delivered the opinion of the court:

This case addresses the question whether a township may require an applicant for General Assistance to enter into a contract to repay as a condition to the receipt of benefits from the township. Because we hold such a contract to be permissible in this case, we reverse the judgments of the trial court in favor of the applicant.

On February 1, 1980, defendant Patricia Woodbury applied to the plaintiff, Libertyville Township (township), for General Assistance (GA) benefits. On the application form, Woodbury listed her house as real estate owned. At the end of the form were two statements relevant to this case: one stating that a lien would be placed on the recipient's real estate and the other being a promise by the recipient to repay the township for aid given. Woodbury signed the form and received $1,090.26 in GA benefits from the township between February 1, 1980, and March 18, 1981. On February 2, 1980, a notice of lien was filed by the township on Woodbury's house. The township supervisor testified that he would not have disbursed any aid to Woodbury if she had not agreed to repay the township. Woodbury did not repay any part of the benefits she received.

On or about April 30, 1981, Woodbury sold her house for $42,000, receiving after all prorations a balance of $15,705.49. Defendant Mid America Title Company issued a title commitment on Woodbury's house indicating the existence of the township's lien against the property. Mid America Title Company holds an escrow account in an amount sufficient to pay the lien.

On May 8, 1981, the township initiated this action in the circuit court of Lake County in a complaint seeking contractual recovery from Woodbury and seeking recovery from Mid America Title Company of the money it holds in escrow. Count I was based on a written contract to repay; count II was based on an oral agreement to repay out of specific proceeds; and count III, against Mid America Title Company, sought recovery on a lien securing the debt created by the alleged contract. Defendants' motion for summary judgment on all counts was denied as to the first two counts and granted as to the third. On the day of trial, count II was dismissed. After trial on count I, the trial court entered judgment for Woodbury, but based its decision solely on the legal issues without reference to findings of fact. The township filed timely notice of appeal, specifying the summary judgment on count III and the judgment on count I. Thus, the dismissal of count II is not before this court. See 87 Ill.2d R. 303(c)(2).

On appeal, three issues are raised: (1) whether the township was authorized to enter into the contract to repay, (2) whether there was consideration to support the promise to repay, and (3) whether the township was authorized to impose a lien to secure the contract.

• 1 While a township has the general power to enter into contracts (Ill. Rev. Stat. 1979, ch. 139, par. 38), Woodbury argues and the trial court held that the contract at issue is not enforceable because the township had no statutory authorization to make a contract requiring repayment of GA benefits. Although the Illinois Public Aid Code provides various means of recovery by the State or a unit of local government from the recipient of benefits or his relatives, estate or insurer (see Ill. Rev. Stat. 1979, ch. 23, pars. 3-9, 5-13, 7-6, 11-22, 11-22a), including voluntary repayment (Ill. Rev. Stat. 1979, ch. 23, par. 11-14), there is no statutory right of recovery by a township against a non-medical GA recipient. However, the Illinois Public Aid Code does not expressly answer the question of whether a township may properly obtain a contractual right of recovery of GA benefits. Thus, the question becomes one of statutory construction.

In addressing another issue of interpretation of the GA article of the Illinois Public Aid Code (Ill. Rev. Stat. 1979, ch. 23, pars. 6-1 through 6-7), the court in Miller v. Department of Public Aid (1981), 94 Ill. App.3d 11, 418 N.E.2d 178, expressed a policy favoring a broad reading of governmental discretion. The Miller court, noting that the purposes of the GA program are limited in achievability by fiscal considerations, opined that constriction of that discretion which is granted to the Department of Public Aid to cope with economic concerns would defeat the legislature's aim. (94 Ill. App.3d 11, 17, 418 N.E.2d 178, 184.) Similarly here, discretion statutorily granted to the township should be read broadly so as to further the legislature's aim to provide the greatest benefit possible under the fiscal constraints present.

Section 6-2 of the Illinois Public Aid Code provides that the "amount and nature" of GA benefits "shall be determined in accordance with local budget standards." (Ill. Rev. Stat. 1979, ch. 23, par. 6-2.) Article XII gives GA administrative powers to the township supervisor. (Ill. Rev. Stat. 1979, ch. 23, pars. 12-21, 12-21.2, 12-21.8; Johnson v. Town of City of Evanston (1976), 39 Ill. App.3d 419, 350 N.E.2d 70.) In Johnson, the court held that the supervisor has the authority to set the basic maintenance level in the community, from which the amount of aid is to be determined under section 6-2. (39 Ill. App.3d 419, 425, 350 N.E.2d 70, 74-75.) In Cozart v. Winfield (7th Cir. 1982), 687 F.2d 1058, the court stated that section 6-2 authorizes township supervisors to create regulations governing the "amount and nature" of GA benefits; hence, it interpreted the statute to permit a township regulation barring benefits to employees fired for cause until 30 days after termination as a regulation governing the "nature" of GA benefits. Similarly here, we view the township supervisor's requirement of an agreement to repay as relating to the "nature" of GA benefits.

Woodbury attempts to distinguish Cozart v. Winfield (7th Cir. 1982), 687 F.2d 1058, by asserting that that case involved a formal regulation adopted by the town board. In fact, the regulation in Cozart was apparently promulgated by the supervisor. Still, the evidence in this case shows the requiring of an agreement to repay to be merely a practice of the supervisor. The formal, written set of standards for the township's GA program, entitled "Rules, Procedures and Eligibility," does not mention agreements to repay, although it does state that "[l]iens will be placed against real estate property whenever possible." Section 6-2, in providing for the determination of the "nature" of the GA benefits, does not specify whether that determination must be by formal regulation or may be by administrative practice. While this question might serve as the basis of a procedural due process claim (see White v. Roughton (7th Cir. 1976), 530 F.2d 750), no such claim has been raised here.

Woodbury also argues that the regulation in Cozart was a reasonable one and the requirement at issue here is not. Since the requirement of a repayment agreement is aimed directly at easing local budgetary concerns and would facilitate the giving of greater benefits, it directly serves the legislature's intent. As applied in this case, the requirement served to aid a property-owning individual who was without cash for a time. The attempt to enforce the promise to repay did not occur until Woodbury voluntarily sold her real property and, thus, had the cash to repay the township. We view the township's precondition to GA benefits to be reasonable under the facts of this case.

While no further Illinois cases can be found on point, two recent decisions from other States lend persuasive support to our interpretation that the township was authorized to enter into the contract here. In Oliver v. Petit (Me. 1981), 432 A.2d 428, a statute specifically gave municipalities and the State the right to recover general assistance costs from recipients in a civil action while barring such an action where repayment would make the recipient again eligible for more assistance or where the recipient is currently receiving any public assistance. The recipient in Oliver had requested general assistance during the time her application to the Federal Social Security Administration for Supplemental Security Income was pending. She signed an agreement by which she authorized the Social Security Administration to, in effect, reimburse the municipality and the State for their general assistance to her out of the initial SSI payment. In exchange, she received the municipality's prompt aid during the Federal application pendency. The Supreme Judicial Court of Maine determined that the statute did not bar the contract. More significant to the present case, the court held that the State's department of human services had the authority to enter into such a reimbursement contract under general statutory provisions giving the department "general supervision of the interests of health and life of the citizens of the State" and authority to "issue rules and regulations considered necessary and proper for the protection of life, health and welfare, and the successful operation of the health and welfare laws." (432 A.2d 428, 431.) In Tunnicliff v. Pennsylvania Department of Public Welfare (1978), 483 Pa. 275, 396 A.2d 1168, a similar contractual reimbursement scheme was upheld by the Supreme Court of Pennsylvania. These cases permit the State or local government to require a promise to reimburse as a condition to the extension of benefits to an applicant whose need is temporary because of expected federal assistance. Here, the township likewise required a promise to reimburse as a condition to the extension of GA benefits where Woodbury faced a cash-flow problem subsequently resolved by the voluntary sale of her home.

The cases cited by the parties are not helpful. The township relies upon City of Champaign v. City of Champaign Township (1959), 16 Ill.2d 58, Dandurand v. County of Kankakee (1902), 196 Ill. 537, and Tazewell County v. Cooney (1919), 215 Ill. App. 617, for the proposition that public policy, even in the absence of statutory authorization, would permit recovery by the State of disbursed public aid in appropriate cases. Those cases involved recovery from a deceased's estate or for medical benefits, recoveries of the type now authorized by statute. (See Ill. Rev. Stat. 1979, ch. 23, pars. ...

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