Court of Appeals of Illinois, First District, First Division
from the Circuit Court of Cook County. No. 15 CH 13301
Honorable Rita M. Novak, Judge Presiding.
JUSTICE delivered the judgment of the court, with opinion.
Presiding Justice Connors and Justice Mikva concurred in the
judgment and opinion.
1 Plaintiff, Lainie Krozel, appeals the order of the circuit
court granting defendants' motion to dismiss her
complaint for writ of certiorari, which sought
review of the Court of Claims' dismissal of her indemnity
claim. On appeal, plaintiff contends her complaint should be
reinstated because (1) the Court of Claims erroneously
applied the two-year general statute of limitations contained
in section 22(h) of the Court of Claims Act (705 ILCS 505/22
(West 2014)) instead of the five-year statute of limitations
in section 22(a) for claims arising out of a contract; and
(2) her due process rights were violated where the Court of
Claims did not consider her complaint on the merits. For the
following reasons, we affirm.
3 The trial court dismissed plaintiff's complaint on May
17, 2016. Plaintiff filed a motion to reconsider and vacate,
which the trial court denied on June 23, 2016. Plaintiff
filed her notice of appeal on July 21, 2016. Accordingly,
this court has jurisdiction pursuant to Illinois Supreme
Court Rule 301 (eff. Feb. 1, 1994) and 303 (eff. May 30,
2008) governing appeals from final judgments entered below.
5 The following facts are relevant to this appeal. On
December 12, 2008, the office of the Executive Inspector
General (EIG) filed a complaint with the Illinois Executive
Ethics Commission (EEC) alleging that plaintiff, the acting
chief of staff for the Illinois Department of Revenue,
violated the Illinois State Offices and Employees Ethics Act
(5 ILCS 430/1-1 et seq. (West 2014)). Plaintiff
sought legal representation from the Attorney General
pursuant to section 2 of the Employee Indemnification Act
(Indemnification Act) (5 ILCS 250/2 (West 2014)). The
Attorney General, however, represented EIG in the matter and
denied plaintiff's request. Plaintiff therefore retained
private counsel to represent her. Plaintiff continued to
request representation by the Attorney General's office,
and she argued for dismissal of the charge against her.
Motions were filed and discovery conducted in preparation for
trial on June 29, 2010. However, on the eve of trial, the
Attorney General's office voluntarily dismissed the
complaint against plaintiff. Plaintiff subsequently sought
indemnification for her attorney fees under section 2(b) of
the Indemnification Act. In April 2011, the Illinois
Department of Revenue notified plaintiff it would not
indemnify her for her attorney fees and costs.
6 On March 5, 2014, plaintiff filed a claim with the Court of
Claims to recover her costs and attorney fees under section
2(b). The State filed a motion to dismiss pursuant to section
2-619 of the Illinois Code of Civil Procedure (Code) (735
ILCS 5/2-619 (West 2014)), arguing that section 22(h) of the
Court of Claims Act requires plaintiff to file her claim
within two years after its accrual. The State alleged that
plaintiff's claim accrued "either when the EEC
matter was voluntarily dismissed by the EIG on June 29, 2010,
ending [her] need for legal representation, or at the very
latest, when her subsequent request for attorneys' fees
was denied, in April 2011." The State argued that since
plaintiff filed her claim on March 5, 2014, it is barred by
the limitations period set forth in section 22(h) and
"must be dismissed in its entirety." The State also
argued that plaintiff's claim should be dismissed under
section 2-615 of the Code for failure to state a claim under
the Indemnification Act.
7 Plaintiff filed a response to the State's motion to
dismiss, in which she argued that the proper limitations
period for filing her claim is found in section 22(a) of the
Court of Claims Act for claims "arising out of a
contract." 705 ILCS 505/22(a) (West 2014). Such claims
"must be filed within 5 years after it first
accrues" rather than the two years under section 22(h)
for "[a]ll other claims." 705 ILCS 505/22(a), (h)
(West 2014). Plaintiff argued that section 22(a) applies
because she "seeks reimbursement for her attorneys'
fees, costs, and expenses under the terms and conditions of
her employment contract with the State, as those terms and
conditions are set out in the Indemnification Act."
Plaintiff argued that the State "was required to pay
reasonable court costs, litigation expenses, and
attorneys' fees pursuant to the Indemnification Act"
where the Attorney General could not represent her due to a
conflict of interest. In response, the State argued that the
two year limitations period applied because plaintiff was
seeking payment pursuant to a statute (the Indemnification
Act), rather than asserting a contract claim.
8 After the Court of Claims heard argument from both parties
on the issue, it dismissed plaintiff's claim in its
entirety. The Court of Claims acknowledged that the
appropriate statute of limitations for claims arising under
the Indemnification Act is an issue of "first
impression." It noted that the Indemnification Act
encompasses statutory duties "distinct from other
theories of liability." Therefore, it concluded that
plaintiff's "potential right to reimbursement
pursuant to the Indemnification Act is independent from the
underlying contract with the State of Illinois." It
applied the two-year limitations period because
plaintiff's right to recovery arose from a statute rather
than a contract, and since plaintiff did not file her claim
within two years of April 2011, when her reimbursement
request was denied, her claim was untimely.
9 Plaintiff filed a petition for rehearing in which she again
alleged that her claim arose out of a contract and therefore
the five-year limitations period of section 22(a) applied.
Plaintiff argued that her right to indemnification under the
Indemnification Act arose from her employment and service;
therefore, it was a matter arising out of contract. The State
filed a response and plaintiff replied, reiterating her
argument that her claim is a contract claim. The Court of
Claims denied the petition and upheld its previous order
dismissing plaintiff's complaint as untimely. In the
order, the Court of Claims disagreed that "the
Indemni[fication] Act must be construed as a contractual term
of [plaintiff's] employment with the State." It
found that "[t]he law is clear. Statutes are presumed
not to create contractual rights unless there is clear and
explicit intent to do so by the legislature. The
Indemni[fication] Act does not demonstrate a clear and
explicit intent by the legislature to create a vested
contractual right." The Court of Claims found
"unconvincing" plaintiff's argument that the
word "agreement" in the latter part of section 2(a)
of the Indemnification Act shows legislative intent to create
a contractual right. Rather, plaintiff's argument
"discounts the context in which the word
'agreement' is used and isolates it from the proper
context, " and the mere use of the word "does not
explicitly create a contract, covenant, or vested right that
obligates the State, its agents, or the Attorney General to
appear on behalf of the employee and defend the action."
It affirmed the dismissal of plaintiff's claim as
10 Plaintiff filed a complaint for writ of
certiorari, seeking review and reversal of the Court
of Claims' decision. In her complaint, plaintiff alleged
that the Court of Claims failed to apply the five-year
statute of limitations on her contract claim and by failing
to follow the law, the decision "denied her both
constitutional due process and equal protection."
Plaintiff also argued that she "had no opportunity to be
heard in a meaningful manner based on the Court's
unlawful failure to follow the law." Defendants moved to
dismiss the complaint pursuant to section 2-619.1 of the
Code, arguing that the trial court lacked jurisdiction to
review the correctness of the Court of Claims'
determination and that plaintiff was not denied due process
where she received a meaningful opportunity to be heard
before the Court of Claims.
11 The trial court granted defendants' motion to dismiss,
and found the following cases controlling: Klopfer v.
Court of Claims, 286 Ill.App.3d 499 (1997); Reyes v.
Court of Claims, 299 Ill.App.3d 1097 (1998); and
Hyde Park Medical Laboratory, Inc. v. Court of
Claims, 259 Ill.App.3d 889 (1994). Plaintiff filed ...