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Appeals panel: City of Harvey can't argue its way out of paying police pension fund $7M

COOK COUNTY RECORD

Sunday, December 22, 2024

Appeals panel: City of Harvey can't argue its way out of paying police pension fund $7M

Law money 05

Perhaps ending a dispute that dates back more than a decade, an Illinois appeals court has ordered the city of Harvey to pay more than $7 million to its police pension fund. 

First District Appellate Justice Sheldon A. Harris wrote the opinion filed Jan. 23; Justices John B. Simon and Mary L. Mikva concurred. 

At issue in the appeal was a Cook County Circuit Court decision enforcing the terms of a February 2008 settlement regarding a 2006 lawsuit the Harvey Police Pension Fund filed against the city alleging violations of state pension law. 

As part of the settlement, the city had agreed to pay $551,079 in owed contributions to the pension fund at a rate of $50,000 per month, paid from property taxes. It also agreed, beginning in fiscal 2007, to levy an annual property tax directed toward the pension fund. Both parties agreed the circuit court would retain jurisdiction to enforce the settlement deal until the contributions were repaid. 

In December 2010, pension fund trustees filed a motion alleging the city wasn’t meeting its obligations. The city, admitting it owed money but disputing the amount, filed for summary judgment. It argued the court had no jurisdiction over the tax collection beginning in fiscal 2007. The court rejected the city’s argument and also found it failed to collect taxes beginning in 2006, though the amount that should have been collected was disputed. 

The parties hired Foster & Foster, an actuarial firm, which determined the amount the city should have collected and remitted, as well as what should be levied through fiscal 2014. In response the city again moved for summary judgment, arguing it owed only the amount listed for 2014. Circuit Court Judge Kathleen M. Pantle rejected that argument and on Sept. 29, 2015, entered judgment for the pension fund in the amount of $7.33 million, as well as $45,569 in legal fees. 

The city appealed that judgment, again arguing the court lacked the authority to enforce back taxes, questioning the method for calculating the damages and challenging the legal fees award. 

Harris wrote the settlement language agreement was clear in the power it granted the circuit court to enforce up until the initial $551,079 was repaid, as well as $6,404 in legal fees the city agreed to pay. He further said the city admitted both to Pantle and the appellate justices it had not fully repaid that amount when the pension fund filed the 2010 motion for court intervention. 

Moving to the issue of how the court calculated the $7.33 million award, the pension fund argued the city could not raise the issue before the appellate panel because it did not do so before the circuit court. The justices said the city’s motion for summary judgment argued it “should only ‘contribute the recommended amount from the most recent actuarial valuation, not the sum total of all prior actuarial valuations.’ 

“Put a different way, the city argued to the circuit court they should pay only the amount in the Franken Report listed for the 2013-2014 fiscal year instead of the combined sum,” the justices wrote. “Since this argument is different than the argument put forth on appeal, the city has waived consideration of this argument, and we will not consider it.” 

With respect to dispute over awarding of legal fees, the justices again ruled against the city because they had already upheld the circuit court’s jurisdictional authority. 

According to Cook County court records, the police pension fund was represented by the firm of Moirano Gorman Kenny LLC, of Chicago. 

The city of Harvey was represented by Quintairos, Prieto, Wood & Boyer P.A., of Chicago.

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