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12/19/96 WENDELL WRIGHT ET AL. v. CITY DANVILLE

December 19, 1996

WENDELL WRIGHT ET AL., APPELLEES,
v.
THE CITY OF DANVILLE, APPELLANT.



Appeal from the Appellate Court for the Fourth Districtl heard in that court on appeal from the Court of Vermilion Cournt, the Hon. Robert B. Cochonour, Judge, presiding.

The Honorable Justice Nickels delivered the opinion of the court. Chief Justice Bilandic took no part in the consideration or decision of this case.

The opinion of the court was delivered by: Nickels

JUSTICE NICKELS delivered the opinion of the court:

Plaintiffs, Ernie A. Cox, Jerome D. Brown, and Raymond T. Randall, former commissioners of the City of Danville, Kevin Scharlau, as executor of the estate of former commissioner Wilbur Scharlau, and Wendell Wright, former corporation counsel, filed a complaint seeking reimbursement from the city of attorney fees and litigation expenses incurred in defending the criminal prosecution of the commissioners and corporation counsel. The circuit court of Vermilion County found that indemnity was not warranted and dismissed the complaint under sections 2-615 and 2-619 of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619 (West 1994)). The appellate court reversed, holding that genuine issues of material fact existed which precluded judgment as a matter of law for the city. 267 Ill. App. 3d 375, 642 N.E.2d 143, 204 Ill. Dec. 681. We granted the city's petition for leave to appeal (155 Ill. 2d R. 315), and we reverse.

BACKGROUND

The present appeal arises out of attempts by plaintiffs to recover attorney fees and litigation expenses incurred by the former commissioners and corporation counsel in their defense of criminal charges of official misconduct and conflict of interest. The criminal prosecutions resulted from the manner in which the group negotiated the settlement of a lawsuit filed against the commissioners and the city.

In January 1987, a group of African-American residents of Danville filed a lawsuit in federal district court against the city and its commissioners alleging that the nonpartisan, at-large, citywide process for electing commissioners excluded African-American representation and diluted minority voting strength, thereby violating the Voting Rights Act of 1965 (42 U.S.C. ยง 1973b (1982 & Supp. V 1987)). The commissioners and corporation counsel negotiated a proposed settlement of the voting rights lawsuit which would change the form of government from a mayor-commissioner system to a mayor-alderman system with aldermen elected from seven two-member districts. The settlement also provided that the present commissioners would be appointed as administrators of the various departments that corresponded with their current respective commission duties. These newly created administrative positions would be guaranteed for a minimum of three years at salaries the commissioners would set themselves.

The Vermilion County State's Attorney, arguing that the proposed settlement was a conflict of interest, issued subpoenas for the commissioners and corporation counsel to appear before the grand jury. The federal district court enjoined the grand jury proceedings and added the State's Attorney to the proceedings before it. Subsequently, the federal district court held hearings on the proposed settlement. These hearings revealed that the commissioners and the corporation counsel knew that they could not prevail in the voting rights litigation. The commissioners contended, however, that they needed to stay in office for a period of time after the new aldermen were elected in order to ensure a smooth transition into the new system of government. The federal district court approved and entered the consent decree settling the voting rights suit and dissolved the injunction against the State's Attorney.

Less than two weeks later, the commissioners enacted a new indemnity ordinance. The ordinance, suggested by the corporation counsel, added indemnification for city appointees, which included the positions of corporation counsel and the new department administrators. In addition to civil indemnity, the ordinance provided indemnity for criminal actions if the person seeking indemnity had no reasonable cause to believe his conduct was unlawful and the act or omission was within the scope of the office or employment.

Soon thereafter, the State's Attorney reconvened the grand jury. At the grand jury proceedings, the commissioners testified that they would receive personal benefits under the federal consent decree and that they would never have agreed to the settlement without the retention provisions. In addition, the corporation counsel testified that the group felt that they were being asked to sacrifice their personal positions and that "if they were going to give up something, they were entitled to something in return." Subsequently, the grand jury returned an eight-count indictment against the commissioners and corporation counsel charging official misconduct and conflict of interest.

The federal district court again enjoined the state prosecution on the grounds that it had previously resolved the issue of the commissioners' and corporation counsel's criminal liability. However, the federal court of appeals reversed, finding that the district court had only determined that the city had the power to enter into the decree, and not that the negotiation process was lawful. Derrickson v. City of Danville, 845 F.2d 715, 723 (7th Cir. 1988).

Subsequently, the group stood trial in the circuit court of Vermilion County on the criminal charges of violating conflict of interest (Ill. Rev. Stat. 1989, ch. 24, par. 3-14-4; ch. 102, par. 3) and official misconduct (Ill. Rev. Stat. 1989, ch. 38, par. 33-3) statutes. During the bench trial, the commissioners and corporation counsel admitted that they had no right to require that they retain their jobs as a condition of settling the voting rights litigation and that they were not legally entitled to retention. The circuit court found all of the commissioners and the corporation counsel guilty of official misconduct (Ill. Rev. Stat. 1989, ch. 38, par. 33-3(c)) and violating the prohibitions against municipal officials holding pecuniary interests in governmental contracts (Ill. Rev. Stat. 1989, ch. 24, par. 3-14-4(a); ch. 102, par. 3(a)). The commissioners were each sentenced to two years' conditional discharge and fined $1,000. The corporation counsel was sentenced to two years' conditional discharge, 90 days' imprisonment, and fined $5,000.

While the appeal of their convictions was still pending before the appellate court, Commissioner Wilbur Scharlau died. The appellate court abated all proceedings against Scharlau ab initio and vacated his conviction. Subsequently, the appellate court reversed the convictions ( People v. Scharlau, 193 Ill. App. 3d 280, 140 Ill. Dec. 260, 549 N.E.2d 911 (1990)); however, this court reversed the appellate court and reinstated the convictions ( People v. Scharlau, 141 Ill. 2d 180, 152 Ill. Dec. 401, 565 N.E.2d 1319 (1990)). Thereafter, the commissioners and corporation counsel were unsuccessful in seeking a writ of habeas corpus in federal court. Wright v. DeArmond, 977 F.2d 339, 343-44 (7th Cir. 1992). As a result of this prolonged litigation, the group incurred attorney fees and litigation expenses of $321,311.47.

The present appeal arises out of plaintiffs' two-count complaint filed in the circuit court of Vermilion County seeking reimbursement of the attorney fees and litigation expenses, but not criminal fines, from the city. The complaint was based on two Danville indemnity ordinances, number 7192 (Danville, Ill., Ordinance No. 7192 (eff. July 8, 1986)) and number 7237 (Danville, Ill., Ordinance No. 7237 (eff. March 10, 1987)) (count I), and on common law indemnity (count II). The pertinent ordinance was passed by the ...


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