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Association of Mid-Continent Universities v. Board of Trustees of Northeastern Illinois University

December 03, 1999

ASSOCIATION OF MID-CONTINENT UNIVERSITIES,
PLAINTIFF-APPELLANT,
V.
THE BOARD OF TRUSTEES OF NORTHEASTERN ILLINOIS UNIVERSITY AND NORTHEASTERN ILLINOIS UNIVERSITY,
DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Du Page County. No. 98--L--0706 Honorable Kenneth Moy, Judge, Presiding.

The opinion of the court was delivered by: Justice Inglis

3 December 1999

Plaintiff, the Association of Mid-Continent Universities, appeals the judgment of the circuit court of Du Page County dismissing the complaint for breach of contract against defendants, the Board of Trustees of Northeastern Illinois University (the Board) and Northeastern Illinois University (NEIU), on the ground that the Court of Claims was the appropriate forum and, therefore, the claim was barred by sovereign immunity. We affirm.

The facts are drawn from the pleadings. Plaintiff is an intercollegiate athletic conference that is part of the National Collegiate Athletic Association (NCAA). NEIU became a member of plaintiff in 1994, after entering into a membership agreement with the conference. The conference membership agreement stated that member universities were required to abide by plaintiff's constitution and bylaws.

In September 1997, NEIU announced that it would withdraw from NCAA Division 1 athletics effective June 30, 1998, in order to enable the school to devote further resources to the educational needs of its students. Because NEIU had not given two years' notice of its intention to withdraw, plaintiff considered the withdrawal untimely under the conference constitution. Accordingly, plaintiff demanded payment of a $200,000 liquidated damages penalty imposed by plaintiff's constitution for an untimely withdrawal from the conference.

NEIU refused to pay plaintiff the $200,000 liquidated damages, and plaintiff filed suit in the circuit court of Du Page County for breach of contract. NEIU filed a motion to dismiss plaintiff's complaint under section 2--619 of the Code of Civil Procedure (735 ILCS 5/2--619 (West 1996)) on the ground that sovereign immunity barred any breach of contract action in the circuit court against an arm of the State of Illinois such as NEIU and required instead that the action be brought in the Court of Claims. Plaintiff responded that certain 1996 statutory amendments made NEIU a separate entity apart from the State of Illinois (State) that could be sued for breach of contract in the circuit court, although tort actions against NEIU must be brought in the Court of Claims. The circuit court disagreed and dismissed the action as barred by sovereign immunity. Plaintiff timely appeals.

The sole issue presented by this appeal is whether a breach of contract claim against a state university and its board of trustees can be brought in the circuit court or whether it is barred by sovereign immunity. The standard of review for a dismissal based on section 2-- 619 is de novo. Village of Riverwoods v. BG Limited Partnership, 276 Ill. App. 3d 720, 724 (1995).

Sovereign immunity in Illinois exists pursuant to statute and mandates that the State or a department of the State cannot be sued in its own court or any other court without its consent. The legislature enacted the State Lawsuit Immunity Act (Lawsuit Immunity Act) (745 ILCS 5/1 (West 1998)), which provides that the State shall not be made a defendant or party in any court except as provided in the Court of Claims Act (705 ILCS 505/1 et seq. (West 1998)). The Court of Claims Act created the Court of Claims as the "exclusive" forum for resolving lawsuits against the State. 705 ILCS 505/8 (West 1998). The Court of Claims has exclusive jurisdiction to hear and determine:

"(b) All claims against the State founded upon any contract entered into with the State of Illinois.

***

(d) All claims against the State for damages in cases sounding in tort, if a like cause of action would lie against a private person or corporation in a civil suit, and all like claims sounding in tort against *** the Board of Trustees of Northeastern Illinois University, *** provided, that an award for damages in a case sounding in tort, other than certain cases involving the operation of a State vehicle described in this paragraph, shall not exceed the sum of $100,000 limit to or for the benefit of any claimant. The $100,000 limit prescribed by this Section does not apply to an award of damages in any case sounding in tort arising out of the operation by a State employee of a vehicle owned, leased or controlled by the State. The defense that the State or *** the Board of Trustees of Northeastern Illinois University *** is not liable for the negligence of its officers, agents, and employees in the course of their employment is not applicable to the hearing and determination of such claims." 705 ILCS 505/8(b), (d) (West 1998).

The purpose of sovereign immunity is to protect the State from interference with the performance of governmental functions and to preserve and to protect State funds. People ex rel. Manning v. Nickerson, 184 Ill. 2d 245, 248 (1998). Additionally, those entities that can be considered as arms of the State are also immune from suit. Therefore, in determining whether sovereign immunity applies, the analysis should focus first on whether an entity is considered an arm of the State. See City of Chicago v. Board of Trustees of the University of Illinois, 293 Ill. App. 3d 897, 901 (1997). However, because plaintiff's first argument is based on the terms of the statute rather than on NEIU's characteristics as an arm of the State, we will address this contention first.

Plaintiff points out that section 8(d) of the Court of Claims Act was amended on January 1, 1996, to include specific references to "the Board of Trustees of Northeastern Illinois University" in the list of entities against which tort claims can be brought in the Court of Claims (Pub. Act 89--4, eff. January 1, 1996, amending 705 ILCS 505/8(d) (West 1994)), while section 8(b) refers only to contract claims against "the State" (705 ILCS 505/8(b) (West 1998)). Plaintiff asserts that adding the Board to the section dealing with tort claims indicates the legislature's intent that the Board is to be considered separate from the State. Relying on statutory rules of construction, plaintiff further argues that, by inserting the word "and" as to "[a]ll claims against the State for damages in cases sounding in tort *** and all like claims sounding in tort against the State or the *** Board" (emphasis added) (705 ILCS 505/8(d) (West 1998)), both contract and tort claims against "the State" must be brought in the Court of Claims but only tort claims against the Board need be brought in the Court of Claims. Plaintiff also argues that, if the Board were to be included within the term "State," section 8(d) would be rendered entirely superfluous. Therefore, plaintiff contends that sovereign immunity does not apply to the Board and that the circuit court has jurisdiction over its contract claim. We disagree for several reasons.

First, the legislature amended section 8(d) of the Court of Claims Act to make specific reference to "the Board of Trustees of Northeastern Illinois University" and deleted references to the now defunct "Board of Regents of the Regency Universities System and the Board of Governors of State Colleges and Universities." Pub. Act 89--4, eff. January 1, 1996, amending 705 ILCS 505/8(d) (West 1994). All other language under section 8 remained unaltered by the amendment. The amendments did not otherwise alter the wording of the tort and contract provisions. Therefore, the statutory language in this case remains the same as that previously considered by Illinois courts that have held that the statute's silence regarding breach of contract claims against different defendant boards does not deprive the Court of Claims of jurisdiction. See, e.g., Raymond v. ...


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