Claxton v. Bd. of Tr. of City of Alton Firefighters' Pension Fund

228 N.E.3d 214

2023 IL App (5th) 220200

Davi CLAXTON, Plaintiff-Appellee,

v.The BOARD OF TRUSTEES OF the CITY OF ALTON FIREFIGHTERS’ PENSION FUND, and Robert Franke, Cameo Holland, Kirby Ontis, Gary Heininger, John Bolling, and John Davis, All in Their Capacities as Trustees of the City of Alton Firefighters’ Pension Fund, Defendants-Appellants.

NO. 5-22-0200

Appellate Court of Illinois, Fifth District.

Filed March 9, 2023

Appeal from the Circuit Court of Madison County. No. 20-MR-621, Honorable Ronald J. Foster, Judge, presiding.

Joseph Weishampel and Jerry J. Marzullo, of Asher, Gittler & D’Alba, Ltd., of Chicago, for appellants.

Gary A. Meadows, HeplerBroom LLC, of Edwardsville, for appellee.

OPINION

JUSTICE VAUGHAN delivered the judgment of the court, with opinion.

¶ 1 Defendants, the Board of Trustees of the Alton Firefighters’ Pension Fund and Robert Franke, Cameo Holland, Kirby Ontis, Gary Heininger, John Bolling, and John Davis, all in their capacities as Trustees of the City of Alton Firefighters’ Pension Fund Board (collectively the Board), appeal the circuit court’s order reversing the Board’s order denying surviving spouse firefighter pension benefits to plaintiff, Davi Claxton. For the following reasons, we vacate the circuit court’s order.

¶ 2 I. BACKGROUND

¶ 3 Gary Claxton was hired as a firefighter for the City of Alton on June 6, 1978. He married plaintiff, Davi Claxton, on July 27, 1996. Prior to the marriage, the parties entered into an antenuptial agreement in which both parties relinquished, inter alia, all claims to maintenance and the other party’s retirement accounts or employment pensions whether "vested" or "non-vested" upon the issuance of a judgment of dissolution of marriage or legal separation. Gary retired from the fire department on December 3, 2013. Thereafter, he began receiving his retirement pension benefits from the City of Alton Firefighters’ Pension Fund.

¶ 4 On April 21, 2014, Davi filed a petition for legal separation from Gary. On May 6, 2014, Gary responded by filing a counterpetition seeking dissolution of the marriage and a complaint for declaratory judgment related to the antenuptial agreement.¹

¶ 5 That case proceeded to trial on January 26, 2017, with the circuit court first addressing the antenuptial agreement. During the hearing, Davi’s counsel wanted to question Gary about his health due to medications he was taking, and such questions drew objections from Gary’s counsel. Davi’s counsel provided numerous reasons for the inquiry including that Davi’s pension rights were tied to the marriage stating, "So when he passes away, which we all believe will be sooner than later, she will be unduly *** harmed by that because she won’t have a retirement when it is time to retire." The court allowed limited inquiry and, upon completion of the testimony and review of the evidence, found the antenuptial agreement was valid and enforceable.

¶ 6 Thereafter, the court proceeded with a hearing on the dissolution of marriage. Following additional but remarkedly vague testimony from Gary regarding his health problems, the parties’ property, and claims of dissipation, Gary’s attorney asked the court "in light of the evidence you heard today and the testimony and the determination on the antenuptial agreement *** to enter judgment dissolving the parties’ marriage today." Davi’s counsel objected stating that "given the precariousness of the health of the respondent" and the fact that the property was not yet divided "it would be detrimental to [Davi] to have a dissolution." The court deferred entry of the judgment of dissolution of marriage.

¶ 7 The proceedings continued on March 6, 2017, at which time the court addressed Davi’s motion to continue. After noting the complexity of the case, Gary’s health issues, multiple transfers of money, and additional accounts that were recently disclosed, the court granted a continuance until March 20, 2017, to allow Davi’s counsel to review the additional information.

¶ 8 The dissolution hearing proceeded on March 20, 2017, with both parties present and resumed again on March 31, 2017. On March 31, 2017, Gary’s counsel advised the court that Gary could not appear because he was hospitalized. Davi objected to proceeding in Gary’s absence, but the court elected to proceed. Following the completion of testimony, and the court’s request for written proposed orders, Gary’s attorney renewed his earlier request for a judgment of dissolution. The court made inquiries regarding Gary’s health. Gary’s attorney stated that Gary was hospitalized and waiting for a liver transplant. Davi disagreed that Gary needed a transplant but agreed he had "significant health issues." Thereafter, the court found, based on Gary’s "serious medical condition," that "appropriate circumstances" existed to warrant a bifurcated judgment and entered a judgment of dissolution, reserving the other issues pursuant to section 401 of the Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5/401 (West 2016)).

¶ 9 On April 24, 2017, Gary’s attorney filed a suggestion of death stating Gary died on April 23, 2017. Two days later, Davi filed a motion to vacate the judgment of dissolution. In a docket entry dated May 2, 2017, the circuit court denied the motion to vacate, and Davi appealed on May 26, 2017. On June 2, 2017, following the trial court’s order disposing of the marital estate, Gary’s attorney cross-appealed the property disposition on behalf of the executor of Gary’s estate, James Pepper. During the appeal, the estate filed a motion to withdraw the cross-appeal and a separate response to Davi’s brief that concurred with and adopted the position taken by Davi in her opening brief. Our decision was issued May 29, 2019. Given the parties’ positions, as well as the lack of information regarding Gary’s health, this court found the trial court’s bifurcation was an abuse of discretion and reversed the judgment of dissolution in the May 29, 2019, decision. Claxton v. Reeves, 2019 IL App (5th) 170200, 432 Ill.Dec. 505, 129 N.E.3d 723.

¶ 10 While the dissolution case was pending on appeal, Davi’s counsel sent correspondence to the Board dated November 15, 2017. The correspondence advised of the judgment of dissolution issued by the circuit court prior to Gary’s death, the pending appeal regarding the judgment of dissolution, and that Davi and Gary’s estate reached a tentative settlement that would allow Davi to be classified as a surviving spouse and entitled to pension benefits. The correspondence ended by asking the Board if it was necessary to issue a third-party claim. The Board’s November 23, 2017, response stated, the Board, "upon receipt of any correspondence and/or documentation in this matter, shall act accordingly given Article 1 and Article 4 of the Illinois Pension Code as well as any relevant case law."

¶ 11 On March 29, 2018, Davi’s counsel sent correspondence to the Board enclosing a copy of the memorandum of settlement (MOS) executed by Davi and the estate’s representative, Mr. Pepper. The correspondence stated the document would be filed with the court and therefore Davi "shall be deemed the surviving spouse of the decedent, Gary Claxton." The correspondence also asked how Davi would begin the process of receiving the surviving spouse benefit and any accrued benefits from the time of Gary’s death.

¶ 12 The MOS declared the antenuptial agreement null and void, vacated the judgment of dissolution, restored the marriage, and deemed Davi the surviving spouse of Gary; however, the MOS was contingent on the Board’s approval of Davi’s designation as Gary’s surviving spouse and her receipt of the pension benefits. The agreement further stated that if the Board denied Davi pension benefits, Davi "shall be granted the right to join the Pension Board in this action instanter." The remainder of the agreement provided for the disposition of the marital property. Gary’s estate would receive two pieces of real property along with approximately $340,000, of which approximately $200,000 would be paid within two months of Davi receiving her pension benefits, a motorcycle, a track, a 46-foot cabin cruiser yacht, and Gary’s personal property. Davi would receive the remainder of the marital property, the ATM business, all the life insurance proceeds, a car, and her personal property.

¶ 13 On April 9, 2018, the Board sent correspondence to Davi’s attorney denying the requested pension benefits and classifying the settlement as "illegal, void ab initio, and repugnant to public policy." On June 12, 2018, the Board issued notice setting Davi’s application for benefits for a public hearing on July 25, 2018. On June 19, 2018, Davi obtained new counsel for the pension case who requested a continuance of the July 25, 2018, hearing. The Board suggested a rescheduled hearing date of October 24, 2018; however, in correspondence dated August 6, 2018, Davi’s pension counsel suggested the parties stay the pension hearing until the appellate court issued its decision. On June 18, 2019, Davi provided the Board with a copy of our Claxton decision. On July 29, 2019, the Board advised Davi’s counsel that Davi was not eligible for benefits pursuant to section 4-114(g) of the Illinois Pension Code (40 ILCS 5/4-114(g) (West 2016)) because the Board was never made a party to the proceedings in which Davi requested the judgment of dissolution be vacated as required by that section.

¶ 14 Davi disagreed with the Board’s interpretation and the claim proceeded to hearing before the Board on January 22, 2020. The evidence consisted of 29 exhibits, as well as Davi’s testimony. Davi could not recall the year the divorce proceedings were initiated but agreed it was in the last few years of Gary’s life. She stated that Gary was sick even before the divorce was filed and the court granted Gary’s request to issue a judgment of dissolution prior to his death reserving the property issues for a later time. Davi stated...