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09/30/96 KARL KLOMANN v. ILLINOIS MUNICIPAL

September 30, 1996

KARL KLOMANN, PLAINTIFF-APPELLANT,
v.
ILLINOIS MUNICIPAL RETIREMENT FUND, AN ADMINISTRATIVE AGENCY, AND VILLAGE OF LYONS, A MUNICIPAL CORPORATION, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. No. 90-CH-9372. Honorable John N. Hourihane, Judge Presiding.

Released for Publication November 18, 1996.

The Honorable Justice Theis delivered the opinion of the court: Cahill and O'brien, JJ., concur.

The opinion of the court was delivered by: Theis

JUSTICE THEIS delivered the opinion of the court:

Plaintiff appeals the trial court's denial of his motion to review findings of fact and reinstate pension rights. The trial court found that the record supported the Village of Lyons' (Village) and the Illinois Municipal Retirement Fund's (IMRF) determination that plaintiff was an independent contractor with the Village of Lyons and not an employee entitled to pension benefits under the Illinois Pension Code. We affirm.

Plaintiff, Karl Klomann, served as an attorney for the Village of Lyons from 1963 until 1989. Klomann also maintained a private law practice in Chicago and Lyons during that period. On November 1, 1988, the Village Board of Trustees passed a resolution declaring Klomann an eligible participant in the IMRF. The IMRF accepted the Village's resolution and enrolled Klomann as a participant in the fund. Klomann retired and the IMRF awarded Klomann benefits effective June 1, 1989.

On May 2, 1989, the new Village attorney wrote the IMRF claiming that Klomann did not qualify to participate in the fund. The new attorney opined that Klomann was never an employee, but rather acted as an independent contractor. The IMRF, however, continued to acknowledge Klomann's status as a fund participant.

On September 5, 1989, the Village Board passed a second resolution. The resolution stated that Klomann was ineligible for participation in the fund and directed the new Village attorney to initiate litigation. On June 1, 1990, the Village attorney again wrote the IMRF stating that Klomann did not qualify to participate in the fund. The IMRF held a hearing on August 16, 1990. The IMRF found that Klomann was not an employee, Klomann was erroneously enrolled in the fund, and the error must be corrected. The IMRF terminated Klomann's pension benefits.

Klomann filed a timely suit seeking administrative review of the IMRF's determination. On August 20, 1991, the trial court ruled that a further evidentiary hearing was required to enter a ruling. Over Klomann's objection, the court remanded the case to the Village, not the IMRF, for an evidentiary hearing. The Village Board held the hearing on March 22, 1994. After hearing the evidence, the Village determined that Klomann was an independent contractor and not an employee and the Village corporate authorities concurred in the Board's findings. On June 30, 1994, the IMRF formally adopted the Village's findings of fact and reaffirmed its revocation of Klomann's pension.

Klomann filed a motion to review the Village's findings of fact. The trial court denied the motion and entered judgment in favor of the IMRF and the Village. Klomann filed this appeal.

On appeal, Klomann first argues that his pension rights should be reinstated retroactively because: (a) the Illinois Constitution requires such a ruling; and (b) the Village's protest against the IMRF's initial award of benefits was barred by the statute of limitations. Next, Klomann claims that the March 22 hearing was unconstitutional and unfair because it should have been held by the IMRF, not the Village. Finally, Klomann argues that the findings of fact were against the manifest weight of the evidence. We affirm.

Initially, Klomann states that the Illinois Constitution provides that "membership in any pension *** system of the State *** shall be an enforceable contractual relationship ***." Ill. Const. 1970, art. XIII, ยง 5. Klomann argues that, pursuant to the Illinois Constitution, a contractual relationship was created when the IMRF initially accepted the Village's resolution declaring Klomann an employee. Therefore, Klomann claims that the IMRF could only avoid the contract by asserting contract defenses.

Klomann's argument must fail, however, as it is contingent upon the premise that the IMRF's initial acceptance of the Village's resolution constituted a final determination as to pension eligibility. A village ordinance which conflicts with the Pension Code is void. Billik v. Village of Brookfield, 80 Ill. App. 3d 907, 910, 400 N.E.2d 702, 704, 36 Ill. Dec. 282 (1980). Rather, the terms of the Code control who is a qualified employee and no act by the Village can make an ineligible employee eligible. Billik, 80 Ill. App. 3d 907, 400 N.E.2d 702, 36 Ill. Dec. 282. Therefore, Klomann cannot avail himself of the protections afforded by the Illinois Constitution to pension fund participants where the terms of the Code exclude Klomann from participation.

Because it is the terms of the Code which define eligibility, we reject Klomann's argument that the Village's resolution, combined with the IMRF's acceptance of that resolution, distinguishes the instant case from Billik. We find that neither the Village nor the IMRF has the "authority to supplement or change the requirements of the Fund." Billik, 80 Ill. App. 3d 907, 909, 400 N.E.2d 702, 704, 36 Ill. Dec. 282. Klomann's pension eligibility is not a question of procedure, but a question of fact. The ...


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