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03/26/97 BOARD TRUSTEES BARRINGTON POLICE PENSION

March 26, 1997

BOARD OF TRUSTEES OF THE BARRINGTON POLICE PENSION FUND, PLAINTIFF-APPELLANT,
v.
VILLAGE OF BARRINGTON ETHICS BOARD, JAMES CONDILL, VIRGINIA GRIFFITH, LYDIA FRANZ, GLENN LOAFMAN AND DONN BRANSTRATOR, ITS MEMBERS, DEFENDANTS-APPELLEES.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE LESTER D. FOREMAN, JUDGE PRESIDING.

Released for Publication May 12, 1997.

The Honorable Justice Gordon delivered the opinion of the court. Cousins, Jr., P.j. and Cahill, J., concur.

The opinion of the court was delivered by: Gordon

The Honorable Justice GORDON delivered the opinion of the court:

The plaintiff, the Board of Trustees of the Barrington Police Pension Fund (the Pension Fund Trustees), brought this action against the Village of Barrington Ethics Board and its members, James Condill, Virginia Griffith, Lydia Franz, Glenn Loafman and Donn Branstrator (hereinafter collectively referred to as the Ethics Board), the defendants, seeking declaratory and injunctive relief. The plaintiff argued that the defendants had no authority to regulate ethical conduct or to require the Pension Fund Trustees to file ethics statements. The parties filed cross-motions for summary judgment, and the trial court granted summary judgment in favor of the Ethics Board. The Pension Fund Trustees appeal.

On appeal, the Pension Fund Trustees raise two issues: whether the Illinois Pension Code (the Pension Code) (40 ILCS 5/1-101 et seq. (West 1994)) preempts all local regulation of pension fund trustees and whether the Barrington ethics ordinance violates section 3-150 of the Pension Code (40 ILCS 5/3-150 (West 1994)). *fn1

The facts are not in dispute. Article 3 of the Pension Code (40 ILCS 5/3-101 through 3-152 (West 1994)) provides for the establishment of a police pension board by each municipality having a population of 500,000 or less. 40 ILCS 5/3-101 (West 1994). Pursuant to that provision, the Village of Barrington established the Board of Trustees of the Barrington Police Pension Board, the plaintiff herein, to administer the pension fund for the Barrington police officers. That board, and all other police pension boards governed by Article 3 of the Pension Code, is comprised of five trustees of which two are appointed by the mayor or president of the board of trustees of the municipality, two are elected by the active police officer participants of the pension fund and one is elected by the beneficiaries of the pension fund. 40 ILCS 5/3-128 (West 1994). In addition to other powers and duties set forth in sections 3-133 through 3-140.1 of Article 3 of the Pension Code (40 ILCS 3/133 through 3-140.1 (West 1994)), the pension fund trustees have exclusive authority to control and manage the police pension fund (40 ILCS 5/3-132 (West 1994)). They also owe fiduciary duties to the pension fund participants and beneficiaries; can allocate and delegate their fiduciary duties as provided in the Pension Code; and are prohibited from engaging in certain designated transactions involving conflicts of interest. 40 ILCS 5/1-109, 1-109.1, 1-109.2, 1-110 (West 1994). See 40 ILCS 5/3-149 (making provisions of Article 1 applicable to Article 3). Those prohibited transactions include the sale, exchange or lease of property; the loaning of money; and the furnishing of goods, services or facilities from the pension fund to a party in interest for less than adequate consideration or from the party in interest to the pension fund for more than adequate consideration. 40 ILCS 5/1-110(a) (West 1994). Pension fund trustees also are prohibited from dealing with the assets of the pension fund for their own interest; from receiving consideration for their personal accounts from any party dealing with the pension fund; and from acting on behalf of any party whose interests are adverse to the pension fund in a transaction involving the pension fund. 40 ILCS 5/1-110(b) (West 1994).

The Village of Barrington Ethics Board, the defendant, is an entity created by municipal ordinance to administer Barrington's Code of Ethics applicable to all Barrington public officials, elected or appointed, who were not employed by that village. The Ethics Board is empowered to hold hearings, consider evidence, and make findings and recommendations to the Village of Barrington Board of Trustees regarding alleged violations of the ethics code. Based upon those recommendations, the Village could direct the filing of administrative or legal proceedings for the purpose of imposing fines and/or removal of public officials from office. Barrington Village Code, ch. 2, art. XIV, ยงยง 2-195, 2-196, 2-199 (1993).

Briefly summarized, the thrust of the Code of Ethics for the Village of Barrington created under the ethics ordinance is to avert conflicts of interest in public officials who come within its scope. Accordingly, it contains various prohibitions against advancing the personal, private and/or financial interests of the public official or others. It prohibits the use of public property for the public official's personal convenience or profit. It forbids remuneration to the public official or a family member from persons doing or seeking to do business with the village and forbids the public official from having any financial interest in any contract, work or business of the village. The ethics code also forbids the disclosure of confidential information concerning the village; the representation of private interests before any village agency; the private employment of the public official in a capacity that is incompatible with the discharge of his duties as a public official; and remuneration to the public official for appearances on behalf of the Village. It requires the disclosure of any financial interests in proposed legislation or other matters that the Village Board of Trustees could reasonably be expected to consider.

The Barrington ethics ordinance also requires that Barrington public officials file annual disclosure statements. In that statement the public official is required to acknowledge (1) receipt of a copy of the Barrington Code of Ethics; (2) an obligation to read that document; (3) that he or she is subject to the provisions of the Code of Ethics; and (4) that he or she is in compliance with the Code of Ethics (and/or to state the extent of noncompliance). The public official must also make and certify all disclosures required by the Code of Ethics.

On October 12, 1995, a written complaint was filed with the Barrington Ethics Board against Ken Greffin, a trustee for the Board of Trustees of the Barrington Police Pension Fund, alleging that he had failed to file a disclosure statement as required by the Barrington Ethics ordinance. The Ethics Board set the matter for hearing on December 1, 1995. On November 27, 1995 the Board of Trustees of the Barrington Police Pension Fund filed a complaint for declaratory judgment and injunctive relief. The Pension Fund Trustees sought a declaration that the Illinois Pension Code is the exclusive regulatory legislation for pension funds and that the defendants could not regulate the conduct of pension fund trustees through the enactment of the Barrington Ethics ordinance. The complaint also sought to enjoin the defendants from exercising any jurisdiction over the Pension Fund Trustees.

Cross-motions for summary judgment were filed by each of the parties. After hearing, the court granted defendants' motion for summary judgment finding that the Barrington Ethics Board could enforce the Barrington ethics ordinance against the Pension Fund Trustees.

A motion for summary judgment should be granted when "the pleadings, depositions and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." 735 ILCS 5/2-1005(c) (West 1994); Soderlund Brothers v. Carrier Corp., 278 Ill. App. 3d 606, 663 N.E.2d 1, 215 Ill. Dec. 251 (1995). Appellate review of an order granting summary judgment is de novo. E.g., Deloney v. Board of Education, 281 Ill. App. 3d 775, 666 N.E.2d 792, 217 Ill. Dec. 123 (1996); Hesselink v. R.L. Perlow Corp., 265 Ill. App. 3d 473, 637 N.E.2d 575, 202 Ill. Dec. 36 (1994). In reviewing that ruling, the appellate court must consider anew the facts and law related to the case and determine whether the trial court was correct. Shull v. Harristown Township, 223 Ill. App. 3d 819, 585 N.E.2d 1164, 166 Ill. Dec. 142 (1992).

The plaintiff contends that the Illinois Pension Code preempts the Barrington ethics ordinance and renders it unenforceable. See Lily Lake Road Defenders v. County of McHenry, 156 Ill. 2d 1, 619 N.E.2d 137, 188 Ill. Dec. 773 (1993) (when a statute or ordinance is preempted, the subordinate legislative body's enactment is suspended and rendered unenforceable by the existence of the superior legislative body's enactment). In support of this contention, the plaintiff relies upon the following cases in which preemption was found to exist based upon the legislature's adoption of a comprehensive scheme of regulation: Village of Bolingbrook v. Citizens Utilities Co., 231 Ill. App. 3d 740, 597 N.E.2d 246, 173 Ill. Dec. 538 (1992); Kirwin v. Peoples Gas Light & Coke Co., 173 Ill. App. 3d 699, 528 N.E.2d 201, 123 Ill. Dec. 656 (1988); Hutchcraft Van Service, Inc. v. Urbana Human Relations Comm'n, 104 Ill. App. 3d 817, 433 N.E.2d 329, 60 Ill. Dec. 532 (1982); and Illinois Liquor Control Comm'n v. City of Joliet, 26 Ill. App. 3d 27, 324 N.E.2d 453 (1975). Those ...


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