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Board of Trustees of Harvey Police Pension Fund v. City of Harvey

Court of Appeals of Illinois, First District, First Division

April 10, 2017

BOARD OF TRUSTEES OF THE HARVEY POLICE PENSION FUND, Plaintiff-Appellee,
v.
CITY OF HARVEY, an Illinois Municipal Corporation, Defendant-Appellant.

         Appeal from the Circuit Court of Cook County. No. 06 CH 15468 Honorable Kathleen M. Pantle, Judge Presiding

          JUSTICE HARRIS delivered the judgment of the court, with opinion. Presiding Justice Connors [1] and Justice Simon concurred in the judgment and opinion.

          OPINION

          HARRIS JUSTICE

         ¶ 1 The City of Harvey appeals from a circuit court order enforcing the terms of a settlement agreement entered into between the City of Harvey and the Board of Trustees of the Harvey Police Pension Fund. In 2006, the Board of Trustees of the Harvey Police Pension Fund filed suit against the City of Harvey for various violations of the Illinois Pension Code. In February 2008, the parties entered into a settlement agreement by which the City of Harvey agreed to pay the Harvey Police Pension Fund $551, 079.83 in back property taxes the City of Harvey had collected but failed to remit. The City of Harvey also agreed, commencing with the 2006-2007 fiscal year, to annually levy a tax upon all taxable property as required in section 3-125 of the Illinois Pension Code. The parties agreed that the circuit court would retain jurisdiction to enforce the agreement until the back property taxes were repaid.

         ¶ 2 In December 2010, the Harvey Police Pension Fund filed a motion to compel enforcement of the settlement agreement. It alleged the City of Harvey was failing to honor its obligations under the settlement agreement. The City admitted it had outstanding obligations under the settlement agreement but disputed the amount being claimed by the Harvey Police Pension Fund. The City of Harvey filed a motion for summary judgment, alleging that the circuit court could only enforce the provision dealing with back property taxes and not the provision concerning the collection of taxes beginning with the 2006-2007 fiscal year. The circuit court rejected this argument and found it could enforce the entire agreement. The court also found the City of Harvey had failed to collect taxes beginning in 2006 but found there was a dispute as to the amount which should have been collected.

         ¶ 3 The parties agreed to hire the actuarial firm of Foster & Foster to determine the amount of property taxes the City of Harvey should have collected and remitted beginning in 2006. The report was filed with the circuit court and showed what the City of Harvey should have levied commencing in the 2006-2007 fiscal year through the 2013-2014 fiscal year. Thereafter, the City moved for summary judgment, arguing that it owed the Harvey Police Pension Fund only the amount listed for the 2013-2014 fiscal year and not the previous years. The circuit court rejected this argument and entered judgment for the Pension Fund in amount of $7, 334, 181.88. After additional briefing, the circuit court also awarded the Harvey Police Pension Fund attorney fees. This timely appeal followed.

         ¶ 4 On appeal, the City of Harvey challenges the circuit court's authority to enforce the back property tax provision, which resulted in the majority of the money damages entered against it. It also challenges how the circuit court calculated those damages. Finally, it challenges the award of attorney fees in favor of the Harvey Police Pension Fund. For the reasons set forth more fully below, we reject the City's arguments and affirm the judgment of the circuit court entered in favor of the Board of Trustees of the Harvey Police Pension Fund.

         ¶ 5 JURISDICTION

         ¶ 6 On September 29, 2015, the circuit court entered a final judgment in favor of the Board of Trustees of the Harvey Police Pension Fund and against the City of Harvey in the amount of $7, 334, 181.88, plus $45, 568.75 in attorney fees. On October 28, 2015, the City filed its notice of appeal. Accordingly, this court has jurisdiction over this matter pursuant to Article VI, Section 6 of the Illinois Constitution, and Illinois Supreme Court Rules 301 and 303. Ill. Const. 1970, art. VI, § 6; Ill. S.Ct. R. 301 (eff. Feb. 1, 1994); Ill. S.Ct. R. 303 (eff. May 30, 2008).

         ¶ 7 BACKGROUND

         ¶ 8 This action stems from a settlement agreement entered into by Plaintiff-Appellee, Board of Trustees of the Harvey Police Pension Board (hereinafter "the Pension Fund"), and Defendant-Appellant, the City of Harvey (hereinafter "the City"). On August 2, 2006, the Pension Fund filed a complaint against the City, seeking a declaratory judgment that the City failed to levy a tax pursuant to section 3-125 of the Illinois Pension Code. On February 2, 2008, the parties entered into a settlement agreement (hereinafter "the Settlement Agreement"), and on February 19, 2008, the case was dismissed.

         ¶ 9 Under the terms of the Settlement Agreement, the City agreed to pay the Pension Fund the sum of $551, 079.83 as payment for property taxes levied and received by the City and not remitted to the Pension Fund. The City also agreed to pay $6, 404.21 in attorney fees. The Settlement Agreement required the City to pay the Pension Fund $50, 000 per month until the sum of $551, 079.83 was repaid. Additionally, pursuant to the Settlement Agreement, the City agreed that beginning in the fiscal year 2006-2007, "the City shall annually levy a tax upon all taxable property of the City, as required in Section 3-125 of the Illinois Pension Code." Finally, the parties agreed that the circuit court would retain jurisdiction over the action for the purpose of enforcing the agreement "only until the City has re-paid the Pension Fund the sum owed to it under section A(1) of this agreement, including the attorney's fees provided herein."

         ¶ 10 On December 6, 2010, the Pension Fund filed a motion to compel enforcement of the Settlement Agreement, alleging that the City had failed and refused to perform its obligations under it. The motion to compel alleged that the City failed to remit approximately $494, 005.84 to the Pension Fund. On May 24, 2011, the City filed its response to the motion to compel, admitting it owed money to the Pension Fund but denying it was the amount stated in the motion. On May 31, 2011, the circuit court granted the Pension Fund's motion to compel and ordered an accounting in order to determine the exact amount owed by the City to the Pension Fund.

         ¶ 11 Thereafter, both parties moved for cross-summary judgment on the amount owed to the Pension Fund. In moving for summary judgment, the City asserted, pursuant to the 2008 Settlement Agreement, the circuit court only had the authority to order the City to pay the outstanding balance owed pursuant to section A(1) of the Settlement Agreement. Based on this argument, the City asserted it owed only $227, 812.23. The Pension Fund disagreed and asserted in its motion for summary judgment that the City owed it money under both A(1) and A(8) of the Settlement Agreement. The Pension Fund claimed it was entitled to $1, 312, 750.84. The circuit court agreed with the Pension Fund that the City was liable under both A(1) and A(8) of the Settlement Agreement and entered judgment in the ...


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