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Illinois Collaboration on Youth v. Dimas

Court of Appeals of Illinois, First District, Fourth Division

June 15, 2017

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,
v.
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.

         Appeal 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 and opinion.

          OPINION

          BURKE, JUSTICE

         ¶ 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.[1] 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 2016 contracts.

         ¶ 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 injunction.

         ¶ 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, enacted appropriations.

         ¶ 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. Id.

         ¶ 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 reasoning ...


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