Court of Appeals of Illinois, First District, Fourth Division
ILLINOIS COLLABORATION ON YOUTH; ABCOR HOME HEALTH, INC.; ACCESS LIVING OF METROPOLITAN CHICAGO; ADDUS HEALTHCARE, INC.; AIDS FOUNDATION OF CHICAGO; ALTERNATIVES, INC.; ASI, INC.; ASSOCIATION FOR INDIVIDUAL DEVELOPMENT; AUNT MARTHA'S YOUTH SERVICES CENTER; CARITAS FAMILY SOLUTIONS; CARROLL COUNTY HEALTH DEPARTMENT; CENTER ON HALSTED; CENTER FOR HOUSING AND HEALTH; CENTERSTONE; CHADDOCK; CHICAGO COMMONS; CHICAGO HOUSE AND SOCIAL SERVICE AGENCY, CENTER FOR YOUTH AND FAMILY SOLUTIONS; CHILDREN'S HOME AND AID; CHILDRENS' HOME ASSOCIATIOIN OF ILLINOIS; CJE; COMMUNITY YOUTH NETWORK, INC.; CONNECTIONS FOR THE HOMELESS; CUNNINGHAM CHILDREN'S HOME OF UBANA, IL; DU PAGE YOUTH SERVICES COALITION; FAMILY ALLIANCE; FAMILY COUNSELING CENTER, INC.; FAMILY FOCUS; FEATHERFIST; FOX VALLEY OLDER ADULT SERVICES; GAREDA HOME SERVICES; HAVEN YOUTH AND FAMILY SERVICES; HEARTLAND HUMAN CARE SERVICES;HEALTHY FAMILIES CHICAGO; HENRY COUNTY HEALTH DEPARTMENT; HOUSING FORWARD; HOUSING OPPORTUNITIES FOR WOMEN; HUMAN SUPPORT SERVICES; ILLINOIS COALITION AGAINST SEXUAL ASSAULT; ILLINOIS PUBLIC HEALTH ASSOCIATION; INDIAN OAKS ACADEMY; INTERFAITH HOUSING DEVELOPMENT CORPORATION; INSPIRATION CORP.; JEWISH CHILD AND FAMILY SERVICES; JEWISH VOCATIONAL SERVICE AND EMPLOYMENT CENTER; KEMMERER VILLAGE; KNOX COUNTY HEALTH DEPARTMENT; LA CASA NORTE; LESSIE BATES DAVIS NEIGHBORHOOD HOUSE; LUTHERAN CHILD AND FAMILY SERVICES; MEDICAL GEAR, LLC; METROPOLITAN FAMILY SERVICES; MIDWEST YOUTH SERVICES; NEW AGE ELDER CARE; NEW MOMS; NEXUS, INC.; NICASA; NORTH CENTRAL BEHAVIORAL HEALTH SYSTEMS, INC.; OMNI YOUTH SERVICES; ONE HOPE UNITED, CHICAGO; PREVENTION INITIATIVE; THE OUNCE OF PREVENTION FUND; POLISH AMERICAN ASSOCIATION; PROJECT OZ; PUBLIC ACTION TO DELIVER SHELTER; PUERTO RICAN CULTURAL CENTER; RAMP, INC.; RENAISSANCE SOCIAL SERVICES; REVIVE CENTER FOR HOUSING AND HEALING; RIVER TO RIVER SENIOR SERVICES; ROCK ISLAND COUNTY HEALTH DEPARTMENT;SAN JOSE OBRERO MISSION; SENIOR HELPERS; SERIOR SERVICES PLUS INC.; SHELTER, INC.; SINNISSIPPI CENTERS; STARK COUNTY HEALTH DEPARTMENT; STEPHENSON COUNTY HEALTH DEPARTMENT; STEPPING STONES OF ROCKFORD, INC.; TASC; TEEN LIVING PROGRAMS; TEEN PARENT CONNECTION; THE BABY FOLD; THE BRIDGE YOUTH AND FAMILY SERVICES; THE CENTER FOR YOUTH AND FAMILY SOLUTIONS; THE FELLOWSHIP HOUSE; THE HARBOUR; THE NIGHT MINISTRY; THE RESURRECTION PROJECT; TURNING POINT BEHAVIORAL HEALTH CARE CENTER;TREATMENT ALTERNATIVES FOR SAFE COMMUNIITES; UNIVERSAL FAMILY CONNECTION; UNION COUNTY; UNITY PARENTING AND COUNSELING; WESTERN ILLINOIS MANAGED HOME SERVICES; THE WHITESIDE COUNTY HEALTH DEPARTMENT; YOUTH ADVOCATE PROGRAM; YOUTH CROSSROADS; YOUTH OUTREACH SERVICES; and YOUTH SERVICE BUREAU OF ILLINOIS VALLEY; Plaintiffs,
JAMES DIMAS, in His Official Capacity as Secretary of Human Services; JEAN BOHNHOFF, in Her Official Capacity as Acting Director of Aging; NIRAV SHAH, in His Official Capacity as Director of Public Health; FELICIA NORWOOD, in Her Official Capacity as Director of Healthcare and Family Services; JOHN R. BALDWIN, in His Official Capacity as Director of Corrections; MICHAEL HOFFMAN, in His Official Capacity as Acting Director of Central Management Services; AUDRA HAMERNIK, in Her Official Capacity as Director Of The Illinois Housing Development Authority; LESLIE GEISSNER MUNGER, in Her Official Capacity as Comptroller of the State of Illinois; BRUCE RAUNER, in His Official Capacity as Governor of the State of Illinois; Illinois Collaboration on Youth; Addus Healthcare, Inc.; Aids Foundation of Chicago; Caritas Family Solutions; Center for Housing and Health; Center for Youth and Family Solutions; Children's Home and Aid; Connections for the Homeless; Du Page Youth Services Coalition; Family Focus; Haven Youth and Family Services; Housing Opportunities for Women; Illinois Coalition Against Sexual Assault; Interfaith Housing Development Corporation; Inspiration Corp.; Jewish Child and Family Services; Jewish Vocational Service and Employment Center; Kemmerer Village; Lessie Bates Davis Neighborhood House; Lutheran Child and Family Services; Medical Gear, LLC; Midwest Youth Services; New Age Elder Care; New Moms Metropolitan Family Services; Omni Youth Services; One Hope United; Polish American Association; Project Oz; Puerto Rican Cultural Center; RAMP, Inc.; Renaissance Social Services; Revive Shelter, Inc.; Sinnissippi Centers; Stepping Stones of Rockford, Inc.; The Baby Fold; The Fellowship House; The Harbour; The Night Ministry; The Ounce of Prevention Fund; Treatment Alternatives for Safe Communiites; Universal Family Connection; Union County; Unity Parenting; Western Illinois Managed Home Services; The Whiteside County Health Department; Youth Advocate Program; Youth Crossroads; and Youth Outreach Services, Plaintiffs- Appellants.
from the Circuit Court of Cook County No. 16 CH 06172
Honorable Rodolfo Garcia, Judge Presiding.
JUSTICE BURKE delivered the judgment of the court, with
opinion. Justices McBride and Howse concurred in the judgment
1 The underlying dispute in this case involves the ongoing
state budget impasse between the legislature and the
Governor. Plaintiffs are social service organizations that
have contracts with different state agencies to provide
various human services for the State of Illinois in fiscal
year 2016. During the fiscal year 2016, plaintiffs
did not receive payments on the contracts, despite providing
services. The contracts provide that they are subject to
legislative appropriations, which were not enacted by the
beginning of fiscal year 2016. Plaintiffs filed a complaint
seeking payment for their services despite the lack of
appropriations, arguing that defendants-Governor Bruce Rauner
and officers and heads of various state agencies and
departments-were acting beyond the scope of their legal
authority, unconstitutionally impairing contractual
obligations, denying equal protection of the laws, and
depriving them of property without due process. Defendants
moved to dismiss on grounds that the complaint was barred by
sovereign immunity and failure to state a valid claim for
relief. The Circuit Court of Cook County granted the motion
to dismiss. Plaintiffs now appeal.
2 I. BACKGROUND
3 A. Plaintiffs' Complaint
4 In May 2015, the General Assembly passed an appropriation
bill for fiscal year 2016, which authorized sufficient
appropriations to cover plaintiffs' contracts. However,
Governor Rauner vetoed the appropriations bill on June 25,
2015. The General Assembly passed another appropriations bill
on April 13, 2016, which similarly provided appropriations
for most of plaintiffs' contracts. The Governor again
vetoed the bill on June 10, 2016.
5 On June 30, 2016, the General Assembly passed, and the
Governor signed into law, Public Act 99-524 (Pub. Act 99-524
(eff. June 30, 2016)). This "stop gap" or interim
bill provided some appropriations for the first half of
fiscal year 2017, with the option to use these appropriations
to pay obligations from fiscal year 2016.
6 Plaintiffs initially filed a two-count complaint on May 4,
2016, against defendants requesting declaratory and
injunctive relief regarding the State's failure to pay on
the contracts. Plaintiffs filed a third amended complaint on
July 20, 2016. Plaintiffs alleged that the most of their
contracts with defendants contained the following clause:
"This contract is contingent upon and subject to the
availability of funds. The State, at its sole option, may
terminate or suspend this contract, in whole or in part,
without penalty or further payment being required if, (1) the
Illinois General Assembly or the federal funding source fails
to make an appropriation sufficient for any reason, (2) the
Governor decreases the Department's funding by reserving
some or all of the Department's appropriation(s) pursuant
to power delegated to the Governor by the Illinois General
Assembly, or (3) the Department determines, in its sole
discretion or as directed by the Office of the Governor, that
a reduction is necessary or advisable based upon actual or
projected budgetary considerations. Contractor will be
notified in writing of the failure of appropriation or of a
reduction or decrease."
7 Plaintiffs asserted that before and after the
Governor's vetoes, defendant directors induced plaintiffs
to enter into the contracts for the provision of services.
Plaintiffs alleged that defendants never invoked the
termination provision but continued the contracts, and it was
not feasible for plaintiffs to withdraw from the contracts
because they would have to give 30 days' notice, would
risk never receiving any payment, could potentially face
liability to their service populations, and were obligated to
other foundations and funding sources.
8 In count I, plaintiffs alleged ultra vires conduct
by the Governor and other defendant agency heads in entering
into, continuing, and enforcing the contracts, while at the
same time vetoing the appropriations bills that provided
funding for the contracts. Plaintiffs sought a declaration
that defendants exceeded their legal and constitutional
authority, injunctive relief in the form of payments of
vouchers for services rendered in fiscal year 2016, and
preliminary injunctive relief requiring defendants and the
Comptroller to immediately pay plaintiffs for bills overdue
by 90 days or more.
9 In count II, plaintiffs alleged that defendants'
actions in vetoing the legislative appropriation bills,
continuing the contracts, enacting Public Act 99-524, and
operating the State without a budget as required by Article
VIII, section 2(b) (Ill. Const. 1970, art. VIII, §
2(b)), defendants have violated the constitutional protection
against the impairment of the obligation of contracts.
Plaintiffs asserted that Public Act 99-524 permitted agencies
to reallocate money appropriated for fiscal year 2017 to pay
obligations from fiscal year 2016, but this was subject to
defendants' discretion, there were insufficient funds to
pay for all obligations incurred in 2016, and plaintiffs have
been unpaid for fiscal year 2017. Plaintiffs alleged that
defendants impaired both the security of payment and the
remedy as (1) Public Act 99-524 resulted in a permanent
impairment regarding the amounts due plaintiffs under the
contracts and (2) the remedy for nonpayment-an action in the
Court of Claims-is feasible only where there are sufficient
appropriations of funds from which the claim can be paid.
Plaintiffs sought preliminary and permanent injunctive relief
and a declaration that defendants' actions and Public Act
99-524 violated the obligation of contracts, rights to due
process of law under article I, section 2, of the Illinois
Constitution (Ill. Const. 1970, art. I, § 2) and
impaired their remedies in the Court of Claims. They
requested an injunction barring defendants' actions,
requiring payment of vouchers that were overdue by 90 days or
more, and ensuring they receive full payment for fiscal year
10 In plaintiffs' count III, they asserted that Public
Act 99-524 violated due process and equal protection because
(1) it did not guaranty any meaningful payment on the
contracts, (2) it provided defendants with unchecked
discretion as they were not required to treat all claims
equally in determining whom to pay and how much to pay for
contractual services already rendered, (3) plaintiffs have no
opportunity to be heard, and (4) their contractual rights and
services are forfeited without compensation.
11 Plaintiffs sought an injunction ordering the Comptroller
to pay the entire sums due plaintiffs for fiscal year 2016,
regardless of appropriations, and they sought a preliminary
injunction directing the Comptroller to preserve the status
quo by requiring defendants to submit all vouchers from
plaintiffs and to immediately pay all vouchers more than 90
days overdue regardless of appropriations. Plaintiffs argued
they would suffer irreparable injury because (1) they used up
all available lines of credit and their cash reserves, (2)
they will have difficulty meeting payroll, (3) some
organizations faced total closure, (4) their financial credit
had been destroyed, (5) plaintiffs laid off professional
staff and closed critical programs, and (6) these actions
caused the loss of personal networks and relationships in the
communities plaintiffs serve.
12 Plaintiffs also filed a motion for a preliminary
13 B. Defendants' Motion to Dismiss
14 On August 11, 2016, defendants filed a combined motion to
dismiss pursuant to section 2-619.1 of the Code of Civil
Procedure (the Code). 735 ILCS 5/2-619.1 (West 2014).
Defendants argued the complaint should be dismissed under
section 2-619 (735 ILCS 5/2-619(a)(1), (a)(9) (West 2014))
because (1) the claims were barred by sovereign immunity as
the claims were based on contracts with the state, which fell
outside the court's jurisdiction; (2) the Court of Claims
had exclusive jurisdiction over plaintiffs' claims; and
(3) the "officer suit" exception to sovereign
immunity was inapplicable as plaintiffs were attempting to
enforce a present claim for monetary relief against the State
based on existing contracts and defendants did not act
ultra vires in excess of their authority. Defendants
asserted that the complaint should also be dismissed pursuant
to section 2-615 of the Code (735 ILCS 5/2-615) (West 2014))
because (1) the terms of plaintiffs' contracts provide
that they are contingent upon and subject to sufficient
enacted appropriations and such lawsuits must be filed in the
Court of Claims; (2) the Appropriations Clause and Illinois
law preclude the relief sought; (3) there has been no
impairment of contract as the "stop gap budget"
actually provided funding for the contracts and it did not
eliminate any contractual rights or remedies available in the
Court of Claims; (4) plaintiffs were not deprived of due
process because the contracts were contingent upon sufficient
appropriations, the legislative process provided all the
process due, and plaintiffs could pursue their claims in the
Court of Claims; and (5) plaintiffs' equal protection
claim must fail as there was a rational basis for not making
payments for contracts that were contingent on sufficient,
15 Plaintiffs responded that defendants acted ultra
vires, the contracts did not exclude liability for
services already rendered, and they sufficiently stated their
claims. Defendants filed a reply, reiterating many of their
essential arguments raised in the initial motion.
16 The circuit court held a hearing on the motions on August
31, 2016. The judge observed that "the only way to
really get law that is going to guide further future cases is
by getting appellate court review and the quickest way to do
that is by denying the plaintiffs all relief being sought and
granting the State's motion to dismiss based on sovereign
immunity and the absence of circumstances to trigger the
exception that would otherwise preclude the absolute bar of
sovereign immunity" The court also held that "even
in the absence of that, *** I certainly think that the
circumstances you have laid out have met some of the elements
for preliminary injunction, but ultimately I think plaintiffs
would not be able to succeed on this case for the reasons I
think articulated by the State."
17 In an order issued August 31, 2016, the circuit court
denied plaintiffs' motion for a preliminary injunction
and granted defendants' motion to dismiss, with
prejudice. This appeal followed.
18 C. Mootness
19 On appeal, plaintiffs request that this court take
judicial notice that since the dismissal of their complaint,
defendants have reallocated nearly all of the funding for the
2017 fiscal year contracts to pay the outstanding amounts due
under the 2016 fiscal year contracts, except for interest.
Thus, some plaintiffs have received limited, partial, or no
funding for their 2017 fiscal year contracts with defendants.
Plaintiffs argue that this case is not moot because they are
in the same position of not being paid for fiscal year 2017,
the belated payments did not adequately compensate them, and
injunctive relief is necessary to fully restore
plaintiffs' programs. American Service Insurance Co.
v. City of Chicago, 404 Ill.App.3d 769, 781 (2010)
(" '[M]ootness occurs once the plaintiff has secured
what he basically sought.' " (quoting Hanna v.
City of Chicago, 382 Ill.App.3d 672, 677 (2008))). They
further argue that even if moot, this case falls within an
exception to the doctrine of mootness. Defendants agree that
this appeal is not moot on the assumption that not all
plaintiffs have been fully paid the amounts they claim.
20 II. ANALYSIS
21 A. Standard of Review
22 Pursuant to section 2-619.1 of the Code, a party may file
a combined motion to dismiss invoking sections 2-615 and
2-619. Dratewska-Zator v. Rutherford, 2013 IL App
(1st) 122699, ¶ 13. This court reviews motions to
dismiss de novo. Kean v. Wal-Mart Stores,
Inc., 235 Ill.2d 351, 361 (2009).
23 The question presented by a section 2-615 motion is
"whether the allegations of the complaint, when taken as
true and viewed in a light most favorable to the plaintiff,
are sufficient to state a cause of action upon which relief
can be granted." Turner v. Memorial Medical
Center, 233 Ill.2d 494, 499 (2009). We consider only
those facts apparent from the face of the pleadings, matters
of which this court may take judicial notice, and judicial
admissions in the record. Pooh-Bah Enterprises, Inc. v.
County of Cook, 232 Ill.2d 463, 473 (2009). Any exhibits
attached to the complaint "are considered part of the
pleading for every purpose." Dratewska-Zator,
2013 IL App (1st) 122699, ¶ 14. "Mere conclusions
of law or facts unsupported by specific factual allegations
in a complaint are insufficient to withstand a section 2-615
motion to dismiss." Ranjha v. BJBP Properties,
Inc., 2013 IL App (1st) 122155, ¶ 9.
24 In a motion to dismiss under section 2-619, the moving
party "admits the legal sufficiency of the complaint,
but asserts an affirmative defense or other matter to defeat
the plaintiff's claim." Van Meter v. Darien Park
District, 207 Ill.2d 359, 367 (2003). We consider the
pleadings and any supporting documentary evidence "
'in the light most favorable to the nonmoving party.'
" Id. at 367-68 (quoting In re Chicago
Flood Litigation, 176 Ill.2d 179, 189 (1997)). Grounds
for dismissal include "[t]hat the court does not have
jurisdiction of the subject matter of the action" or
that there is some "other affirmative matter avoiding
the legal effect of or defeating the claim." 735 ILCS
5/2-619(a)(1), (9) (West 2014).
25 Additionally, this case involves the construction of
statutory language, which we review de novo.
People v. Perez, 2014 IL 115927, ¶ 9. We
presume that statutes are constitutional. Arangold Corp.
v. Zehnder, 204 Ill.2d 142, 146 (2003). In
construing statutory language, this court's "primary
objective is to ascertain and give effect to the
legislature's intent, keeping in mind that the best and
most reliable indicator of that intent is the statutory
language itself, given its plain and ordinary meaning."
Perez, 2014 IL 115927, ¶ 9. We also review the
constitutionality of a statute de novo. Kanerva
v. Weems, 2014 IL 115811, ¶ 33. We presume statutes
are constitutional, and the opposing party bears the burden
of rebutting this presumption. American Federation of
State, County, & Municipal Employees, Council 31 v.
State, 2015 IL App (1st) 133454, ¶ 19
(AFSCME). We must, whenever reasonably possible,
construe a statute to uphold its constitutionality.
26 On appeal, "this court reviews the judgment, not the
reasoning, of the trial court, and we may affirm on any
grounds in the record, regardless of whether the trial court
relied on those grounds or whether the trial court's