De Jesus v. Policemen's Annuity & Benefit Fund of Chi.

2019 IL App (1st) 190486

145 N.E.3d 573

438 Ill.Dec. 37

Steve DE JESUS, Sabrina Dudley Johnson, and Maria Kouzoukas, Individually and on Behalf of Other Similarly Situated Chicago Police Officers and Retirees, Plaintiffs-Appellants,

v.POLICEMEN'S ANNUITY AND BENEFIT FUND OF the CITY OF CHICAGO, Defendant-Appellee.

No. 1-19-0486

Appellate Court of Illinois, First District, Fourth Division.

Opinion filed November 14, 2019

Rehearing denied December 11, 2019

Paul D. Geiger and Ronald C. Dahms, both of Northfield, for appellants.

Mary Patricia Burns, Vincent D. Pinelli, and Sarah A. Boeckman, of Burke Burns & Pinelli, Ltd., David Kugler, of David R. Kugler & Associates, and Justin Kugler, all of Chicago, for appellee.

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

¶ 1 Plaintiffs Steve De Jesus, Sabrina Dudley Johnson, and Maria Kouzoukas brought a class action lawsuit against defendant Policemen's Annuity and Benefit Fund of the City of Chicago, alleging that they and other similarly situated Chicago police officers had been receiving reduced disability benefits because defendant failed to properly calculate their salaries—the metric that determined the amount of their disability benefits—by not including an additional form of compensation known as duty availability allowance. On defendant's motion, the circuit court dismissed plaintiffs' complaint, finding that they had failed to timely initiate administrative review of their allegedly miscalculated disability benefits pursuant to the procedures set forth in the Administrative Review Law ( 735 ILCS 5/3-101 et seq. (West 2018)).

¶ 2 On appeal, plaintiffs contend that, because their complaint's claims were based on defendant's systematic miscalculation of their disability benefits, they were not challenging administrative decisions and, thus, did not need to follow the procedures set forth in the Administrative Review Law. Because we agree with the circuit court that plaintiffs were required to follow the procedures set forth in the Administrative Review Law to review defendant's alleged miscalculation of their disability benefits, we affirm the dismissal of plaintiffs' complaint.

¶ 3 I. BACKGROUND

¶ 4 In 1963, the Illinois Pension Code created the Policemen's Annuity and Benefit Fund of the City of Chicago to benefit Chicago police officers, their widows or widowers, and their children. 1963 Ill. Laws 213 (§ 5-101); see also 40 ILCS 5/5-101 (West 2018). The fund provides not only for retired police officers and their families, but also officers who become disabled. See 40 ILCS 5/5-101 et seq. (West 2018). For an officer who suffers a duty-related disability, he or she has the right to receive disability benefits "equal to 75% of his salary." Id. § 5-154(a). The fund also provides disability benefits for officers who suffer an occupational disease disability and ordinary disability, also based on a percentage of their salary. Id. §§ 5-154.1, 5-155.

¶ 5 For Chicago police officers, salary is defined as the "annual salary of a policeman appropriated for members of his rank or grade in the city's annual budget or appropriation bill." Id. § 5-114(d). However, since January 1, 1998, their salary must also include "any duty availability allowance received by the policeman." Id. § 5-114(f). The duty availability allowance is an additional form of remuneration to compensate officers for being available to perform their jobs. See Hooker v. Retirement Board of the Firemen's Annuity & Benefit Fund , 2013 IL 114811, ¶ 17, 378 Ill.Dec. 416, 4 N.E.3d 15 (in the context of compensation for Chicago firefighters); Collins v. Retirement Board of the Policemen's Annuity & Benefit Fund , 334 Ill. App. 3d 909, 914, 268 Ill.Dec. 639, 779 N.E.2d 253 (2002) (in the context of compensation for Chicago police officers). As the statutory language indicates, the officer must have actually received the duty availability allowance while an active duty officer. See Hooker , 2013 IL 114811, ¶ 23, 378 Ill.Dec. 416, 4 N.E.3d 15 (rejecting an argument under a similar provision of the Pension Code related to Chicago firefighters that the firefighters' pension board was required to include a duty availability allowance in the calculation of widows' benefits, even if the decedents never actually received the allowance as active duty firefighters). The fund has a board responsible for administering the provisions of the Pension Code related to the fund. 40 ILCS 5/5-178 (West 2018). Under those provisions, the Administrative Review Law "shall apply to and govern all proceedings for the judicial review of final administrative decisions of the retirement board." Id. § 5-228(a).

¶ 6 Steve De Jesus is a disabled Chicago police officer and has received duty disability benefits continuously since September 1998. Sabrina Dudley Johnson is a disabled Chicago police officer and has received duty disability benefits continuously since October 1995. Maria Kouzoukas is a limited active duty Chicago police officer, who was previously disabled and received duty disability benefits between December 2005 and December 2014.

¶ 7 In May 2018, De Jesus, Johnson, and Kouzoukas, individually and on behalf of other similarly situated Chicago police officers, filed a three-count class action complaint against the Policemen's Annuity and Benefit Fund of the City of Chicago. Plaintiffs raised causes of action under the pension protection clause of the Illinois Constitution ( Ill. Const. 1970, art. XIII, § 5 ), common law breach of contract, and the equal protection clause of the Illinois Constitution ( Ill. Const. 1970, art. I, § 2 ).¹ According to their complaint, several disabled Chicago police officers "recently" learned that their monthly disability benefits had been paid without the statutorily mandated duty availability allowance being included in the calculation of their salary, though some disabled officers had the allowance included. The complaint stated that, at present time, the duty availability allowance was a quarterly $900 payment ($3600 annually).

¶ 8 The complaint asserted that, in December 2017, defendant was asked to explain the inconsistency. Defendant's executive director responded the following month, stating the following:

" ‘The Fund's staff, in determining whether to include duty availability allowance in a particular officers['s] salary for purpose[s] of calculating his/her duty disability benefits, ascertains whether the officer actually received the duty availability allowance as part of his/her last payroll check from the Chicago Police Department. If [the officer] received it, the Fund includes it as part of the officer['s] salary; if [the officer] did not receive it, the Fund does not include it as part of the officer['s] salary.’ " (Emphasis in original.)

The complaint stated that defendant later explained that

"[T]he way it has been systemically calculating disability benefits, all disabled officers whose last day on the Chicago Police Department's (CPD) payroll was before the 15th day of a given month do/did not receive a monthly annuity that includes duty availability. Disabled officers whose last day on the Chicago Police Department payroll was on or after the 15th day of a given month receive(d) a monthly annuity that includes/included duty availability pay in the calculation of salary." (Emphasis in original.)

Based on defendant's alleged failure to include the duty availability allowance in the salary computation for all disabled officers, the complaint claimed that defendant had been systematically miscalculating their monthly disability benefits. The complaint asserted that, in addition to plaintiffs, hundreds of other Chicago police officers had been affected by this systematic miscalculation. Plaintiffs sought various relief, including allowing the lawsuit to proceed as a class action, damages in the form of the unpaid disability benefits, and an injunction enjoining defendant from excluding the duty availability allowance in future benefit calculations.

¶ 9 In response to plaintiffs' complaint, defendant filed a combined motion to dismiss pursuant to section 2-619.1 of the Code of Civil Procedure ( 735 ILCS 5/2-619.1 (West 2018) ). Initially, defendant noted that its board, not itself, was the proper party to be sued. Nevertheless, while tacitly acknowledging that plaintiffs had not been receiving the proper amount of disability benefits, defendant asserted that it calculated disability benefits based on salary information compiled and maintained by the City of Chicago (City). According to defendant, the City sent it "salary information that failed to include duty availability pay because of City management policies that require that CPD officers be in ‘pay status’ for at least 50% of the month in order to receive duty availability pay as part of their respective salaries."

¶ 10 Regardless, defendant argued that plaintiffs had ample notice and opportunity to contest the calculations of their respective disability benefit awards but failed to file their complaint within the applicable five-year statute of limitations period and failed to initiate administrative review within 35 days of the notice of their disability benefit awards. Defendant noted that each plaintiff had waited between 9 and 20 years from the date they were notified of their duty disability awards to file their complaint and supported this assertion by attaching to its motion to dismiss correspondences sent to each plaintiff concerning their awards.

¶ 11 In those correspondences, defendant's executive director informed them that they had been awarded a duty disability benefit of 75% of their monthly salary, provided their monthly salary at the time they filed for disability benefits, and listed their monthly benefit award based on those two figures. In each correspondence, defendant's executive director stated that if they had any questions about their award, they should contact defendant's office. Defendant's...