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Hoffman Estates Professional Firefighters Association v. Village of Hoffman Estates

March 31, 1999

HOFFMAN ESTATES PROFESSIONAL FIREFIGHTERS ASSOCIATION, AND CHARLES O'CONNOR, PLAINTIFFS-APPELLEES,
v.
VILLAGE OF HOFFMAN ESTATES; VILLAGE OF HOFFMAN ESTATES MAYOR MICHAEL O'MALLEY, IN HIS OFFICIAL CAPACITY; VILLAGE OF HOFFMAN ESTATES TRUSTEES SUSAN KENLEY, RICHARD COCHRAN, GAIL GIACALONE, WILLIAM MCLEOD, EDWIN FRANK, AND KAREN MILLS, IN THEIR OFFICIAL CAPACITIES; VILLAGE OF HOFFMAN ESTATES VILLAGE MANAGER PETER BURCHARD; VILLAGE OF HOFFMAN ESTATES FINANCE DIRECTOR HELLA TOMCZAK; AND VILLAGE OF HOFFMAN ESTATES CLERK/TREASURER VIRGINIA HAYTER, DEFENDANTS-APPELLANTS.



The opinion of the court was delivered by: Justice Burke

Appeal from the Circuit Court of Cook County.

Honorable Ronald C. Riley, Judge Presiding.

Defendants, the Village of Hoffman Estates, a municipal corporation, and the Village's mayor, trustees, manager, finance director, and clerk/treasurer (the Village) appeal from an order of the circuit court granting plaintiff Hoffman Estates Professional Firefighters Association (the Association) and its president Charles O'Connor's motion for summary judgment and denying the Village's motion for summary judgment. The court's order required the Village to comply with section 11--10--2 of the Illinois Municipal Code (Code) (65 ILCS 5/11--10--2 (West 1996)) by creating a foreign fire insurance board *fn1 (Board), and upon doing so, to turn over to the Board all foreign fire insurance tax proceeds authorized and collected by the Village pursuant to section 11--10--1 of the Code (65 ILCS 5/11--10--1 (West 1996)) "from January 1, 1985, to the present."

On appeal, the Village argues that it was not subject to the requirements of section 11--10--2 to create the Board and fund it with the proceeds of the foreign fire insurance tax "from January 1, 1985 to the present" because the Village: (1) was not required by statute "to create and fund the Board prior to 1990"; (2) the State Mandates Act (30 ILCS 805/1 et seq. (West 1996)) relieved the Village from compliance with the statutory requirement to create and fund the Board with foreign fire insurance tax proceeds after the 1990 amendment; and (3) the collective bargaining agreement between the Village and the Association barred the Association from bringing a cause of action against the Village to make it pay the tax proceeds to the Association from 1990 to 1995. For the reasons set forth below, we reverse and remand.

The Association is a labor association affiliated with the International Association of Firefighters, AFL-CIO, CLC. The Association was organized to provide for the "general welfare" of the Hoffman Estates firefighters and the Hoffman Estates fire department. The Village is an Illinois municipality which has an organized fire department. The Village's population is less than 50,000.

Section 11--10--1 of the Code, prior to and since 1990, is entitled, "Foreign Fire Insurance Company Fees," and provides for the Village's collection of a tax, not to exceed two percent of the gross receipts from fire insurance, upon property situated within the Village where fire insurance is provided by an insurance company not incorporated under the laws of Illinois. 65 ILCS 5/11--10--1 (West 1996). The Village levied the tax from 1985 until 1997, collected the proceeds, and placed them in the firefighters' pension fund. According to the Village, the amount of taxes collected by it from 1985 through 1996, and the 1997 estimated amount, was $283,483.

The parties' dispute arose in 1996 when the Association requested that the Village transfer the foreign fire insurance tax proceeds to the Hoffman Estates' fire department pursuant to section 11--10--2 of the Code. The Village refused to transfer the funds to the fire department and continued to collect the tax. As a result, the Association filed a complaint for a writ of mandamus and declaratory judgment on February 18, 1997, to require the Village to create the Board and turn over to the Board all foreign fire insurance tax proceeds the Village collected pursuant to section 11--10--1 "from January 1, 1985, to the present." The Association alleged in its complaint that the Village did not transfer the collected tax proceeds to the firefighters' pension fund or to the fire department, but instead transferred the tax proceeds into the Village's "General Fund."

The Village filed a motion for summary judgment, arguing that prior to the 1990 amendment of section 11--10--2 it had the option of paying the fire insurance tax proceeds to the fire department treasurer or to the firefighters' pension fund, and it opted to pay into the pension fund. The Village further argued that upon amendment of the statute, and the elimination of the option to pay the tax proceeds to the firefighters' pension fund, it did not comply with section 11--10--2 because the statute "is a violation of" the State Mandates Act (30 ILCS 805/1 et seq. (West 1996)). More specifically, the Village maintained that the creation of the Board, under the amended statute, created a personnel mandate within the meaning of the State Mandates Act because the Village would have to pay overtime wages to firefighter members elected to the Board for their service on the Board pursuant to the Fair Labor Standards Act (FLSA). 29 U.S.C. §203(e)(4)(a)(1994). The Village therefore argued that since section 11--10--2 is a personnel mandate which is not exempted from reimbursement by the State to local governments under the State Mandates Act, the Village was not required to comply with the statute because no appropriation for reimbursement had been made by the General Assembly for additional costs that the Village alleged it would incur.

In response, the Association contended that section 11--10--2 prior to 1981, the effective date of the State Mandates Act, was not subject to the State Mandates Act because the Act only applies to legislation enacted after its effective date. The Association also argued that to the extent any amendments to section 11--10--2 after 1981 "violates" the State Mandates Act, only the amendment is invalid and the statute would be left in force as it was prior to the amendment. Therefore, the Association maintained that the Village was required to "enact an ordinance providing for the election of foreign fire insurance tax board officers" and "turn over to the [Association] *** all foreign fire insurance tax proceeds *** collected by [the Village] *** from January 1, 1985 until the present." The Association also claimed that the Village's position, that it was not until the 1990 amendment that its home rule unit authority was preempted, was "based upon a fundamental misapprehension of the nature of home rule unit authority." The Association maintained that "home rule units must obey all laws which do not contain an express home rule preemption unless and until a conflicting ordinance is enacted" and, since the Village never enacted an ordinance which in any way conflicted with the terms of section 11--10--2, the Village was at all times bound to obey the statute. The Association further argued that the FLSA was irrelevant to a violation of the State Mandates Act because the FLSA "excludes the [Board] officers from the definition of employees" since the officers' services on the Board would not be the same services for which they are employed by the Village as firefighters. The Association also argued the FLSA was irrelevant to a "violation" of the State Mandates Act because an employment relationship would not exist between the Village and the Board due to the fact that the Village would not have control of hiring and firing the members elected to the Board, control over the manner in which work is performed, fixing of wages, and maintaining of employment records.

The Association also filed a motion for summary judgment, arguing that the Village did not have a right to refuse to comply with section 11--10--2 to create the Board and pay to the Board the foreign fire tax proceeds collected by the Village since 1985. The Association also argued that section 11--10--2 did not violate the State Mandates Act. The Association further argued, as it had in its response to the Village's motion for summary judgment, that to the extent any post-1981 amendment to section 11--10--2 violated the State Mandates Act, the amendment is void, but the statute is still valid as it existed prior to any amendment. The Association also argued that the amendments to section 11--10--2 since 1981 constituted local government organization and structure mandates under section 3(c) of the State Mandates Act and, therefore, the State was not required to reimburse the Village at all for its implementation.

In response, the Village contended that "[a]fter the approval of the Illinois Constitution of 1970, the provisions of the foreign fire insurance legislation were optional with home rule municipalities such as Hoffman Estates." Therefore, the Village argued that "municipalities were no longer subject to legislative provisions without an express exclusivity statement from the General Assembly." The Village maintained that the first time section 11--10--2 applied to it was when the express language of home rule preemption was included in the 1990 amendment. The Village further argued that after this amendment, the State Mandates Act clearly applied, and that the "command" of section 11--10--2 was a personnel mandate and it was relieved from complying with the statute because, pursuant to the FLSA, it would incur overtime costs that were not funded by the General Assembly, but passed on to the municipalities in violation of the State Mandates Act. The Village also argued that the Association's April 17, 1990, collective bargaining agreement "side letter," that permitted the Village to retain the foreign fire insurance tax proceeds and place them in the firefighters pension fund, barred the Association from receiving the fire insurance tax proceeds from April 17, 1990, to April 30, 1993. The Village further argued that the contract remained in effect until August 14, 1995, when a new contract was executed by the Association. Attached to the Village's response was a sworn affidavit from the Village's finance director stating the tax amounts collected from 1985 through 1989, and the amounts placed into the pension fund for the same years. The Village claimed that it collected the tax in the amount of: $7,965 in 1985 and paid $500,000 into the firefighters' pension fund; $8,037 in 1986 and paid $500,000 into the pension fund; $12,230 in 1987 and paid $500,000 into the pension fund; $10,562 in 1988 and paid $95,025 into the pension fund; $12,333 in 1989 and paid $240,545 into the pension fund.

After hearing arguments on the parties' motions, the trial court granted the Association's motion for summary judgment and denied the Village's. The court further ordered that the Village comply with section 11--10--2 and create the Board and, thereafter, turn over the foreign fire insurance tax proceeds "from January 1, 1985, to the present" to the Board. This appeal followed.

A motion for summary judgment should be granted when the pleadings, depositions, admissions, and affidavits before the court establish 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 (West 1996); Brown v. Murphy, 278 Ill. App. 3d 981, 989, 644 N.E.2d 186 (1996). The review of a grant of summary judgment is de novo (Greenberg v. Orthosport, Inc., 282 Ill. App. 3d 830, 832, 668 N.E.2d 1012 (1996)), as is the ...


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