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08/19/94 LOUIS WRIGHT v. CHICAGO MUNICIPAL

August 19, 1994

LOUIS WRIGHT, PLAINTIFF-APPELLANT,
v.
CHICAGO MUNICIPAL EMPLOYEES CREDIT UNION, CITY OF CHICAGO MUNICIPAL EMPLOYEES' ANNUITY AND BENEFIT FUND, WAYNE N. MARSHALL, AS PRESIDENT AND TRUSTEE OF THE FUND, MIRIAM SANTOS, AS TREASURER OF THE FUND, WILLIAM J. MCMAHON, AS RECORDING SECRETARY AND TRUSTEE OF THE FUND, AND THOMAS G. SULLIVAN, AS TRUSTEE OF THE FUND, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. The Honorable Thomas J. O'Brien Judge Presiding.

The Name of this Case has been Corrected August 29, 1994. Released for Publication September 27, 1994.

Egan, McNAMARA, Rakowski

The opinion of the court was delivered by: Egan

PRESIDING JUSTICE EGAN delivered the opinion of the court:

The plaintiff, Louis Wright, appeals from an order granting summary judgment in favor of the defendants, Chicago Municipal Employees' Credit Union (Union), the City of Chicago Municipal Employees' Annuity and Benefit Fund (Fund) and Trustees of the Fund. The case involves only questions of law: the interpretation of a statute and the effect of a judgment in the Federal district court.

The plaintiff borrowed $2,305.16 from the Union on October 5, 1987, and executed a power of attorney permitting the Union to collect any balance due on the loan from any amounts to be refunded to the plaintiff at the time of his separation from service as a municipal employee; the amount to be refunded consisted of contributions the plaintiff had made to the Fund. The plaintiff left city employment sometime in June 1990. On June 28, 1990, at the request of the Union, the Fund deducted $2,305.16 from the plaintiff's account in the Fund and paid it to the Union.

In 1992, the plaintiff filed a complaint individually and as a member of a class alleging that the actions of the Fund and the Union were contrary to Section 8-244 of the Illinois Pension Code (Ill. Rev. Stat. 1989, ch. 108 1/2, par. 8-244). The plaintiff later argued in his motion for summary judgment that the defendants were collaterally estopped from deducting from the amount of his refund because the same issue, that is, the interpretation of section 8-244, had been adjudicated against the Fund in a bankruptcy case in the Federal district court in the Northern District of Illinois. In re Davis (N.D. Ill. 1988), 86 B.R. 556.

The trial Judge denied the plaintiff's motion for summary judgment and granted the defendants' motion for summary judgment. He held that the Federal district court's decision in Davis did not collaterally estop the Fund, and he interpreted section 8-244 to permit the plaintiff to grant power of attorney to the Fund to pay the Union from the amount due him as a refund of contributions.

We will first address the question of collateral estoppel. James Davis was employed by the City of Chicago and was a member of the Fund. In 1984 he assigned to the Union, in consideration for a loan, any refund of his contributions to the Fund which would become payable to him upon his termination of employment with the City. He filed a petition for bankruptcy and filed a complaint to determine the validity of the Union's lien. The bankruptcy Judge construed the applicable Illinois statute and held that the Pension Code did not prohibit assignment of refunds but applied only to annuities or disability benefits.

On review the district Judge construed the same statute that is in issue before us, section 8-244 of the Illinois Pension Code, which then provided as follows:

"All annuities, pensions, and disability benefits granted under this Article, shall be exempt from attachment or garnishment process and shall not be seized, taken, subjected to, detained, or levied upon by virtue of any judgment, or any process or proceeding whatsoever issued out of or by any court in this State, for the payment and satisfaction in whole or in part of any debt, damage, claim, demand, or judgment against any annuitant, pensioner, or other beneficiary hereunder.

No annuitant, pensioner or other beneficiary shall have any right to transfer or assign his annuity or disability benefit or any part thereof by way of mortgage or otherwise."

The district Judge disagreed with the bankruptcy Judge and construed the language of the statute to be a prohibition of the assignment of refunds. Davis, 86 B.R. at 559.

The plaintiff in this case now contends that that holding of the district Judge bars the Union and the Fund from claiming that the Fund properly paid the ...


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