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December 26, 1997


Appeal from the Circuit Court of Cook County. No. 95-CH-1998. Honorable Ellis E. Reid, Judge Presiding.

The Honorable Justice Theis delivered the opinion of the court. Greiman and Quinn, JJ., concurring.

The opinion of the court was delivered by: Theis

The Honorable Justice THEIS delivered the opinion of the court:

The plaintiff, Steven Rhoads (Rhoads), brought this action seeking review of an administrative decision of the City of Calumet City Police Pension Board (Pension Board) granting him a not-on-duty disability pension under section 3-114.2 of the Illinois Pension Code (the Pension Code) (40 ILCS 5/3-114.2 (West 1994)), based upon the salary of $49,800. The circuit court reversed the Pension Board's decision and order as against the manifest weight of the evidence. The circuit court concluded Rhoads should have received a line-of-duty pension under section 3-114.1 of the Pension Code (40 ILCS 5/3-114.1 (West 1994)), which pays 65% of salary, rather than a not-on-duty pension, which pays 50% of salary. The circuit court also determined Rhoads' pension was affected by a retroactive pay raise, finding his pension should have been based on a salary of $59,556. We disagree.

The Pension Board presents three issues for resolution: (1) whether Rhoads' failure to name the individual Pension Board trustees as defendants deprived the circuit court of jurisdiction; (2) whether the Pension Board's decision to award Rhoads a not-on-duty disability pension rather than a duty disability pension was against the manifest weight of the evidence; and (3) whether the Illinois Pension Code permits the city council to retroactively alter a police officer's salary for purposes of pension calculation after the officer's employment has ended, when no future service is contemplated and no contribution provision is attached. The Pension Board also counters Rhoads' argument that the City of Calumet City's lump-sum settlement of Rhoads' workers' compensation claim is binding on the Pension Board under the doctrine of collateral estoppel as to the causation of Rhoads' injury.

Before commencing employment with the City of Calumet City, Rhoads sustained a knee injury to his right leg, which required arthroscopic surgery and resulted in a workers' compensation award against his former employer, the City of East Hazel Crest. Rhoads received his appointment as chief of police of the City of Calumet City on May 24, 1988, and was accepted into the policemen's pension fund in August of 1988. On May 11, 1993, Rhoads submitted his application for a line-of-duty disability pension. Rhoads was terminated from his position as police chief on May 13, 1993.

On November 29, 1993, Rhoads amended his disability pension application to reflect that he was seeking either a line-of-duty pension or a not-on-duty pension. In his application, Rhoads sought a disability pension based upon the stated salary of $49,800, the salary under which he had made pension contributions. In March of 1994, approximately 10 months after Rhoads' discharge on May 13, 1993, the city council passed an ordinance granting the chief of police a pay increase to the salary of $59,556. The ordinance purportedly was made retroactive to May 1, 1993.

Before the Pension Board, Rhoads alleged two incidents caused him to become disabled, one occurring on September 24, 1988, and a second occurring on July 30, 1991. As to the 1988 incident, Rhoads alleged he injured his left knee when his arm became trapped in the window of a car whose driver attempted to drive away to avoid being snared in a prostitution "sting," dragging Rhoads. In August of 1991, the Industrial Commission approved a lump-sum workers' compensation settlement from Calumet City in the amount of $21,945.70 for Rhoads in regard to the 1988 incident. In addition, Calumet City later obtained a workers' compensation lien in connection with a settlement Rhoads received in a civil suit against the employer of the person driving the car involved in the 1988 incident. As to the 1991 incident, Rhoads claimed he reinjured his knee when he was kicked in the left shin while subduing a violent arrestee.

Rhoads was sent to three physicians selected by the Pension Board, and each of these physicians certified that Rhoads was disabled when the doctor examined him. Rhoads was examined by these doctors during the months of May and June 1993.

A fourth physician, Dr. Meis, testified he had performed three separate surgeries on Rhoads' knee: the first on December 1, 1988, the second on August 2, 1989, and the third on May 22, 1990. In Dr. Meis' opinion, Rhoads was disabled and unable to perform the duties of a police officer since October 8, 1990. Dr. Meis also rendered the opinion there was a possible causal connection between Rhoads' left knee injury and the 1988 incident in which Rhoads alleged his left arm was trapped in the window of a car.

Given the medical evidence and certificates of disability, the Pension Board concluded that Rhoads was unable to perform the duties of a police officer and that he had been medically disabled from approximately October 8, 1990. Although the Pension Board determined Rhoads was disabled, it found he had not proved he received his injuries in the line of duty. The Pension Board found Rhoads' demeanor and his account of the incidents alleged to have caused his injuries "unpersuasive [and deemed] *** his testimony *** not credible, not honest, inconsistent and unreliable and at best, both are suspect."

The Pension Board further concluded that Rhoads' not-on-duty disability pension should be based on a salary of $49,800, not $59,556, the salary recently allocated to the office of police chief. All five members of the Pension Board signed the administrative decision on January 31, 1995, granting Rhoads a not-on-duty disability pension pursuant to section 3-114.2 of the Illinois Pension Code. 40 ILCS 5/3-114.2 (West 1994).

Reversing the Pension Board's decision, the circuit court stated the Board failed to suggest plausible alternative theories regarding Rhoads' injuries, and faulted the Board for failing to present evidence to refute either the 1988 or the 1991 incidents. The circuit court concluded the Pension Board had exercised its authority in an arbitrary and capricious manner and that its decision was against the manifest weight of the evidence.

The circuit court further determined there was sufficient medical evidence in the record to show that Rhoads was injured while on duty. The court also concluded the city council had the authority to pass a retroactive pay raise for the chief of police in the amount of $59,556, and that it passed such a raise on March 11, 1994. Observing that the ordinance passed by the city council was retroactive to May 1, 1993, the circuit court determined the ordinance ...

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