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Gilmore v. The City of Mattoon

Court of Appeals of Illinois, Fourth District

October 16, 2019

ALAN GILMORE, CHARLES ELLIOTT, DAVID GRIFFITH, BRIAN JANES, JOSEPH BUTLER, MICHAEL CHISM, MAX COX, DONALD ARTHUR HALL, ANDY ADAIR, JOE REESE, OREN LOCKHART, DAVID McSCHOOLER, GERRY PROTZ, JUD McKENZIE, DARRYL CARMAN, W. TIM BRAGG, GINA LOCKHART, MORRIS SPARR, BRUCE GRAFTON, STEVE HORATH, JUDY O'DELL, MICK WELCH, RONALD SCOTT, CHARLES APPLEGATE, WILLIAM BOYLE, JIM NEASON, ROBERT ZSCHAU, GEORGE GULLION, GERALD NICHOLS, CLARENCE GILLESPIE, DENNIS WILSON, JOHN ARNETT, JAMES VAUGHT, JACK HELDMAN, MITCH STRADER, TERRY BARTELS, EDWARD JOHNSON, STEVEN WILLIAMS, and ROGER CLAXON, Plaintiffs-Appellants,
v.
THE CITY OF MATTOON, Defendant-Appellee.

          Appeal from the Circuit Court of Coles County No. 12L1 Honorable Steven L. Garst, Judge Presiding.

          Attorneys for Appellant: Jennifer Stuart and H. Kent Heller, of Heller, Holmes & Associates, P.C., of Mattoon, for appellants.

          Attorneys for Appellee: Julia A. Proscia and Michael D. Wong, of SmithAmundsen LLC, of St. Charles, and Michael Resis, of SmithAmundsen LLC, of Chicago, for appellee.

          JUSTICE DeARMOND delivered the judgment of the court, with opinion. Justices Steigmann and Harris concurred in the judgment and opinion.

          OPINION

          DeARMOND, JUSTICE

         ¶ 1 In October 2017, plaintiffs Alan Gilmore, Charles Elliott, David Griffith, Brian Janes, Joseph Butler, Michael Chism, Max Cox, Donald Arthur Hall, Andy Adair, Joe Reese, Oren Lockhart, David McSchooler, Gerry Protz, Jud McKenzie, Darryl Carman, W. Tim Bragg, Gina Lockhart, Morris Sparr, Bruce Grafton, Steve Horath, Judy O'Dell, Mick Welch, Ronald Scott, Charles Applegate, William Boyle, Jim Neason, Robert Zschau, George Gullion, Gerald Nichols, Clarence Gillespie, Dennis Wilson, John Arnett, James Vaught, Jack Heldman, Mitch Strader, Terry Bartels, Edward Johnson, Steven Williams, and Roger Claxon, who are retired firefighters, police officers, and municipal employees, filed a sixth amended complaint against the City of Mattoon (City), alleging violations of the Illinois Insurance Code (215 ILCS 5/367f, 367g, 367j (West 2010)), violations of the equal protection clause of the fourteenth amendment of the United States Constitution (U.S. Const., amend. XIV), breach of contract, promissory estoppel, unjust enrichment, and violation of the pension protection clause of the Illinois Constitution (Ill. Const. 1970, art. XIII, § 5) based upon the claim the City required them to pay a higher contribution toward health insurance premiums, as retired employees, than the contribution paid by active employees. The trial court, prompted by the City's combined section 2-615 and 2-619 (735 ILCS 5/2-615, 2-619(a)(9) (West 2010)) motions, dismissed the counts claiming violations of the Insurance Code, breach of contract, promissory estoppel, unjust enrichment, and a violation of the pension protection clause. The court allowed plaintiffs' allegations pursuant to the equal protection clause to proceed; however, the plaintiffs' request for attorney fees was stricken.

         ¶ 2 On appeal, plaintiffs argue the trial court erred by finding (1) they did not have standing under the Insurance Code, (2) their claims for breach of contract and promissory estoppel are barred by the Frauds Act (740 ILCS 80/0.01 et seq. (West 2010)), (3) they failed to state a claim for breach of contract, promissory estoppel, or unjust enrichment, and (4) they failed to state facts sufficient to constitute a violation of the pension protection clause. We affirm.

         ¶ 3 I. BACKGROUND

         ¶ 4 In January 2012, a group of 59 retired firefighters, police officers, and municipal employees, including plaintiffs, filed a 13-count complaint, which consisted of four basic categories of claims: (1) violations of the Insurance Code, (2) injunctive and declaratory relief under the Insurance Code, (3) breach of contract based on alleged violations of the collective bargaining agreements between the three different groups of municipal employees and the City, and (4) alleged violations of rights protected by the United States Constitution. All 13 counts were based on the claim the City was requiring higher health insurance contributions by retired employees than the contributions required of those who were actively employed in the three identified categories. Over the course of litigation, the City filed multiple motions to dismiss pursuant to sections 2-615 and 2-619(a)(9) of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619(a)(9) (West 2010)), to which plaintiffs responded by seeking leave to amend their complaint. For their third amended complaint filed in September 2013, plaintiffs filed 14 counts realleging substantially the same claims as they had previously in counts I through XII of their first and second amended versions. Counts I, V, and IX again claimed violations of sections 367f, 367g, 367j of the Insurance Code (215 ILCS 5/367f, 367g, 367j (West 2010)), which cover firefighters, police officers, and municipal employees, respectively. Plaintiffs contended, in those counts, being required to pay a higher contribution toward their health care premiums was discriminatory and entitled them to money damages based on violations of their respective continuation privileges contained in the Insurance Code. Counts II, VI, and X of the complaint sought injunctive relief based on the alleged violation of the statutes, and counts III, VII, and XI requested declaratory relief because of the alleged violations of the Insurance Code. Plaintiffs alleged in counts IV, VIII, and XII that the City violated the equal protection clause of the fourteenth amendment of the United States Constitution by forcing them to pay higher contributions toward their health insurance premiums and treating similarly situated retired and active firefighters, police officers, and municipal employees differently, which was discriminatory, based on their respective pension benefits. Count XIII was a breach of contract claim, alleging the City breached a contract with plaintiffs which they said arose from information and promises contained in an Illinois Municipal Retirement Fund (IMRF) form, a premium deduction authorization form for continuing health insurance through an employer, the IMRF website, and certain unidentified communications from the City. According to plaintiffs, these sources created a contract whereby the City agreed to provide health insurance benefits to retired employees under the same terms and rates as active employees in exchange for plaintiffs' early retirement. The last count, count XIV, claimed a violation of the pension protection clause of the Illinois Constitution as a result of the City increasing the contributions for health insurance premiums to be paid by plaintiffs beyond those paid by active employees, thereby decreasing or diminishing the benefits to which they were otherwise entitled after their retirement.

         ¶ 5 Plaintiffs contended the City adopted an early retirement incentive (ERI) program for its IMRF employees whereby all IMRF employees age 50 and over with 20 years of creditable service were allowed to purchase up to five more years of service in exchange for "immediate retirement." Plaintiffs further contend Bill Pettry, an IMRF representative, informed them at an informational meeting about the ERI program that "in exchange for retaining health insurance benefits at the same rate or cost to them as active employees[, ] they could purchase service credits under ERI." Plaintiffs accepted defendant's offer by submitting a "notice of intent to retire," which they say bound defendant to the agreement that plaintiffs' health insurance contributions would remain at the same level as active employees. Plaintiffs allege defendant breached the contract when it increased the amount of their premium rates compared to active employees.

         ¶ 6 In October 2013, the City filed a fourth motion to dismiss, which asserted plaintiffs (1) lacked standing under the Insurance Code, (2) failed to state a claim under the equal protection clause, (3) were not entitled to injunctive or declaratory relief since plaintiffs' claims were predicated on the Insurance Code, and (4) failed to state a claim under a breach of contract cause of action or a violation of the Illinois Constitution.

         ¶ 7 In March 2014, the trial court issued its ruling on the motion to dismiss and found there is no private right of action "available under the Insurance Code," which resulted in the dismissal of the counts relating to the Insurance Code (counts I, II, III, V, VI, VII, IX, X, and XI) with prejudice under section 2-619. The court dismissed plaintiffs' breach of contract and equal protection claims under section 2-615 and granted leave to refile. The court denied the motion to dismiss for the violation of the pension protection clause claims.

         ¶ 8 In May 2014, plaintiffs filed a fourth amended complaint, which included the same claims raised previously along with an additional claim of promissory estoppel labeled as count XIV, with the pension protection claim renumbered as count XV. The City filed a motion to dismiss all counts except IV, VIII, and XII, which alleged violations of the equal protection clause. The City filed answers and affirmative defenses, contending both failure to state a claim and that plaintiffs did not constitute a protected class. In September 2014, the trial court found plaintiffs had pleaded sufficient facts to proceed to discovery on their breach of contract and promissory estoppel claims.

         ¶ 9 After written discovery, a motion by the City for a more definite statement resulted in the filing of a sixth amended complaint in October 2017, adding a claim of unjust enrichment and reducing the number of plaintiffs from 59 to the 39 named plaintiffs here. Plaintiffs realleged the claims based on the Insurance Code (counts I, II, III, V, VI, VII, IX, X, and XI), which had been dismissed, as well as the equal protection claims (counts IV, VIII, and XII). In counts XIII and XIV, dealing only with plaintiffs who are retired municipal employees, they alleged breach of contract, or alternatively, promissory estoppel. Counts XV and XVI, relating to all plaintiffs, raised claims of unjust enrichment and a violation of the pension protection clause, respectively. The unjust enrichment claim was based on plaintiffs' theory the City was not permitted to require them to contribute more toward their health insurance premiums than current employees and, as a result, plaintiffs should be permitted to recoup the "excess premiums" paid. The City sought dismissal of counts XIII through XVI of the sixth amended complaint, asserting the claims were unenforceable under the Frauds Act (740 ILCS 80/0.01 et seq. (West 2010)), failed to state a claim, or were brought under the Insurance Code, which does not provide a private right of action. In August 2018, the trial court granted the City's motion to dismiss with prejudice. Previously, in December 2017, plaintiffs sought and received a Rule 304(a) finding from the trial court on counts I through XI of the third amended complaint, which had already been dismissed by the court with prejudice. See Illinois Supreme Court Rule 304(a) (eff. Mar. 8, 2016). After the court's order in August, dismissing counts XIII, XIV, XV, and XVI of the sixth amended complaint, plaintiffs sought an additional Rule 304(a) finding as to those counts as well since the court's orders left count XII, the equal protection claim, pending.

         ¶ 10 We note an apparent scrivener's error in the trial court's opinion letter of August 7, 2018, wherein the court mentions count XII, the equal protection claim, as dismissed with prejudice and appealable in its finding, while failing to mention the breach of contract claim in count XIII, which was, in fact, dismissed with prejudice. As such, we will proceed with the ...


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