Kay v. Department of Central Management Services

2024 IL App (1st) 221102-U

• Court: Appellate Court of Illinois
• Decided: March 11, 2024
• Docket: 1-22-1102
• Status: Unpublished

Opinion

2024 IL App (1st) 221102-U No. 1-22-1102

FIRST DIVISION March 11, 2024

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). ____________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT _________________________________________________________________________

MELISSA KAY, on behalf of herself and a class ) Appeal from the Circuit Court of all others similarly situated, ) of Cook County, Illinois, ) Chancery Division Plaintiff-Appellee, ) ) v. ) ) No. 2019 CH 12160 DEPARTMENT OF CENTRAL ) MANAGEMENT SERVICES, as surety of the ) Illinois Treasurer, ) The Honorable ) Pamela McLean Meyerson, Defendant-Appellant. ) Judge Presiding.

JUSTICE PUCINSKI delivered the judgment of the court. Presiding Justice Fitzgerald Smith and Justice Lavin concurred in the judgment.

ORDER

¶1 Held: We answer the circuit court’s certified questions as follows: (1) The Illinois General Assembly did not waive sovereign immunity to allow a participant in the College Savings Pool to initiate an action in the circuit court against the surety on the bond posted pursuant to section 16.5(o) of the College Savings Pool Act, 15 ILCS 505/16.5(o); and (2) The College Savings Pool Act did not create a private right of action allowing individual participants in the College Savings Pool to have standing to pursue an action to recover from the bond.

¶2 This appeal stems from a putative class action suit brought by participants in Illinois’

College Savings Pool against Defendant-Appellant Department of Central Management Services 1-22-1102

(CMS) as surety of the Illinois Treasurer on the bond required pursuant to the College Savings

Pool Act. Plaintiff-Appellee Melissa Kay sued on behalf of herself and the putative class, alleging

that the Treasurer improperly managed the College Savings Pool by retaining excessive sums of

administrative fees and unevenly assessing fees against the pool participants. Following the circuit

court’s rejection of CMS’s motion to dismiss, the court granted CMS’s motion to certify two

questions for interlocutory appeal pursuant to Ill. Sup. Ct. R. 308. We allowed the appeal of the

following issues: 1) whether the Illinois legislature waived sovereign immunity to allow

participants in the College Savings Pool to sue the surety on the bond posted pursuant to section

16.5(o) of the College Savings Pool Act; and 2) whether the College Savings Pool Act created a

private right of action for participants to have standing to sue on the bond.

¶3 BACKGROUND

¶4 The College Savings Pool

¶5 In 1996, to address the rising costs of higher education, Congress authorized the states to

create “qualified tuition plans,” also known as 529 plans. These plans allowed individuals to make

contributions to investment accounts to save for college, and the gains on these investments were

exempt from federal and state taxes. In 2000, the Illinois legislature passed section 16.5 of the

State Treasurer Act (Act). Pub. Act 91-607, § 5 (eff. Jan. 1, 2000) (adding 15 ILCS 505/16.5). 1

¶6 Under section 16.5, the General Assembly created the College Savings Pool (Pool), which

operated as Illinois’ 529 plan. The State Treasurer was given the authority to establish and

administer one or more college savings programs, which would collectively comprise the Pool. In

administering the Pool, the Treasurer “may receive, hold, and invest moneys paid into the Pool

and perform such other actions as are necessary to ensure that the Pool operates as a qualified

1 This section of the State Treasurer Act is also referred to as the College Savings Pool Act.

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tuition program.” 15 ILCS 505/16.5(b) (West 2022). The Treasurer established two college savings

programs that together constitute the Pool: Bright Start and Bright Directions. Both programs are

trusts, with the Treasurer serving as the trustee.

¶7 The Act further requires that the Treasurer “shall give bond with at least one surety, payable

to and for the benefit of the account owners in the College Savings Pool, in the penal sum of

$10,000,000, conditioned upon the faithful discharge of his or her duties in relation to the College

Savings Pool.” 15 ILCS 505/16.5(o). Pursuant to the Official Bond Act (Bond Act), CMS is the

surety on the above-mentioned bond. See 5 ILCS 260/14.1 (“Wherever State officers *** are

required by law *** to obtain a fidelity or surety bond ***, the bonding requirement shall be

satisfied by a blanket bond or bonds contracted for *** by the Department of Central Management

Services.”)

¶8 Original Action

¶9 Plaintiff-Appellee Kay has been a Bright Start participant since 2018. February 16, 2018,

she filed a putative class action suit against the State Treasurer in his official capacity, alleging

that he violated the Act and its related regulations through improperly managing the Pool. See Kay

v. Frerichs, 2021 IL App (1st) 192271, ¶ 5. She specifically alleged that the Treasurer illegally

charged fees based off of the Pool's assets rather than its earnings, illegally retained excess

administrative fees that should have been returned to the participants, and illegally exempted some

funds from administrative fees while charging other funds more than their share. Id. She sought

various damages and injunctive relief.

¶ 10 The Treasurer moved for summary determination of a major issue, arguing that sovereign

immunity barred Kay’s claim for monetary damages, because she sought money that would come

from the State Treasury. Kay responded that sovereign immunity did not apply because the

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monetary damages she was seeking would not come from state funds, but from an account

specifically established to pay the Pool’s operational expenses, known as Trust Fund No. 6682

(Trust 668), and the statutorily-required bond.

¶ 11 The circuit court granted the Treasurer’s motion, holding that sovereign immunity barred

Kay from seeking any recovery other than prospective injunctive relief. The court rejected her

argument that her recovery would come fees from the Pool's participants’ accounts rather than the

State's general revenue fund. Rather, the court found that Trust 668 did contain state funds, and

that it was not set up for the purpose of paying claims like those bought by Kay. Furthermore,

pursuant to the Act, the Treasurer was given the discretion to establish Trust 668 for the purpose

of receiving administrative fees that were charged and collected from the Pool. Therefore,

according to the circuit court, a large withdrawal from the trust—as might occur if the court ruled

in Kay’s favor—could interfere with the State’s discretion in determining the appropriate level of

reserves in accord with fiscally responsible practices. See Kay, 2021 IL App (1st) 192271 at ¶ 10.

¶ 12 While Kay’s action was pending, the legislature amended section 16.5 of the Act to

explicitly allow the Treasurer to collect administrative fees from the assets of the Pool. See Pub.

Act 100-905, § 5 (eff. Aug. 17, 2018); Pub. Act 101-26, § 5 (eff. June 21, 2019). Kay conceded

that these amendments rendered her claims for injunctive relief moot. Because she could no longer

pursue her claims for either monetary or injunctive relief—in light of the Treasurer’s sovereign

immunity defense and the amendments to the Act, respectively—the circuit court entered a final

judgment disposing of the entire suit. Kay then filed an appeal of the circuit court’s ruling in favor

of the Treasurer on his summary judgment motion. Around the same time, she also commenced a

new suit against CMS, discussed further below.

2 According to Kay’s response, the money in this trust came exclusively from participants in the Pool.

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¶ 13 First Appeal

¶ 14 On appeal, Kay argued that the circuit court erred in determining that the funds in Trust

668 were state funds and that sovereign immunity therefore applied to bar her claims. She again

raised her allegations that these were private funds, “’illegally taken from participants and held in

a segregated account’ from the general revenue fund.” Kay, 2021 IL App (1st) 192271, ¶ 17. 3 On

May 28, 2021, we issued an opinion affirming the circuit court. Id. at ¶ 24.

¶ 15 We found that, despite Kay’s allegations that the Treasurer acted outside of his authority,

her claims exclusively related to the Treasurer’s administration of the Pool's finances, a duty which

he is authorized to perform in his official capacity pursuant to the Act. Id. at ¶ 21. We further

affirmed the circuit court’s finding that “any damages awarded in this matter would be taken from

Trust 668, which would control how the Treasurer manages the remaining funds and, in turn,

control the actions of the State.” Id. at ¶ 22. Therefore, her claims fell within the “precise

circumstances for which the sovereign immunity doctrine is designed.” Id. at ¶ 21.

¶ 16 Second Action

¶ 17 On October 21, 2019, Kay filed an action in the circuit court against CMS, “as surety of

the Illinois Treasurer.” Her complaint raised the same claims previously brought against the

Treasurer, adding that, under section 13 of the Bond Act, she was able to bring a direct action

against the surety of the College Savings Pool bond. See 5 ILCS 260/13 (“Whenever the condition

of the bond of any public officer is violated, action may be instituted on the bond, and prosecuted

to final judgment against the officer, and any or all of the sureties ***.”) She sought relief in the

form of monetary damages; specifically, she asked that the Treasurer return the allegedly illegally-

3 She also challenged the circuit court’s dismissal of her mandamus action asking the court to compel the Treasurer to return the fees to participants. On appeal, we agreed with the circuit court that the extraordinary remedy of mandamus was not appropriate in this matter, where the court would override the discretion of the Treasurer in managing the Pool.

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withheld excess fees and any earnings that would have accrued on those amounts, and she

requested damages incurred due to the Treasurer’s allegedly assessing fees unequally among the

Pool funds.

¶ 18 CMS filed a combined motion to dismiss, arguing: 1) that the complaint failed to state a

claim; 2) that Kay, as a private citizen, lacked standing to bring an action on a statutorily mandated

public official bond; and 3) that her claims were barred by sovereign immunity for similar reasons

raised by the Treasurer in Kay’s prior suit. On February 2, 2022, following a hearing, the circuit

court denied CMS’s motion in an oral ruling. The court found that Kay had sufficiently pled her

claims to survive a section 615 motion to dismiss.

¶ 19 Turning next to the two affirmative defenses, the circuit court ruled that Kay and the

putative class of account holders had standing to bring their suit against CMS pursuant to the

holding in Bueker v. Madison County, 2016 IL 120024. The court explained that although the

Treasurer is the obligee on the bond, the Act specifically states that the bond must be payable to

and for the benefit of the account holders. Therefore, Kay and the putative class of participants in

the Pool had standing to bring an action on the bond because the legislature indicated an intent to

allow account holders to do so under the Act.

¶ 20 Regarding CMS’s second affirmative defense, the circuit court also rejected the argument

that Kay’s claims were barred by sovereign immunity. It found that a judgment against CMS in

this case would not improperly control the actions of or impose liability on the State. The court

also agreed with Kay’s argument that the State had waived sovereign immunity on the bond “by

providing in the Bond Act that actions on official bonds are to be brought in the circuit court and

not in the court of claims.” Furthermore, the court noted that while the Treasurer was allowed to

satisfy the statutory bond requirement by obtaining it from CMS (as he did here), he equally could

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have chosen a third-party surety instead; in the latter option, there would be no potential sovereign

immunity argument. The circuit court stated that an account holder’s ability to recover on the bond

should not depend on the bond’s issuer.

¶ 21 Present Appeal

¶ 22 Following the circuit court’s ruling on its motion to dismiss, CMS filed its Motion to

Certify Questions for Appeal and Motion to Stay. On July 6, 2022, the court granted both motions

and certified the following two questions for interlocutory appeal:

1. Did the Illinois General Assembly waive sovereign immunity to allow a participant in the College Savings Pool to initiate an action in the circuit court against the surety on the bond posted pursuant to section 16.5(o) of the College Savings Pool Act, 15 ILCS 505/16.5(o) (2020)?

2. Does the College Savings Pool Act create a private right of action allowing individual participants in the College Savings Pool to have standing to pursue an action to recover from the bond?

¶ 23 We granted CMS’s petition for leave to appeal the two certified questions on August 22,

2022. 4

¶ 24 ANALYSIS

¶ 25 Standard of Review

¶ 26 Illinois Supreme Court Rule 308 allows for the appeal of interlocutory orders “where the

trial court has deemed that they involve a question of law as to which there is substantial ground

for difference of opinion and where an immediate appeal from the order may materially advance

the ultimate termination of the litigation.” Dartt v. Pegman, 2022 IL App (1st) 210633, ¶ 11

(quoting Apollo Real Estate Investment Fund, IV, L.P. v. Gelber, 398 Ill. App. 3d 773, 778 (1st

Dist. 2009)); see also Ill. S. Ct. R. 308(a) (eff. Oct. 1, 2019). The standard of review for legal

4 While the circuit court addressed CMS’s standing and sovereign immunity arguments in the order discussed here, we will proceed with the certified questions in the order in which they were listed in the circuit court’s ruling, turning first to the question of sovereign immunity and next to the issue of standing.

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questions presented on interlocutory appeal pursuant to Rule 308(a) is de novo. Dartt, 2022 IL

App (1st) 210633 at ¶ 11. Our review is strictly limited to the certified questions; we do not render

any opinion on any of the trial court’s underlying rulings. Id. (quoting Apollo 398 Ill. App. 3d at

778).

¶ 27 Both certified questions pose the issue of statutory construction. The primary rule of

statutory construction is to ascertain and give effect to the legislature's intent. Bettis v. Marsaglia,

2014 IL 117050, ¶ 13. “The best indication of legislative intent is the language used in the statute,

which must be given its plain and ordinary meaning.” Id. (citing Gillespie Community Unit School

District No. 7 v. Wight & Co., 2014 IL 115330, ¶ 31). If the statutory language is clear on its face,

the court should not resort to other aids of construction. Id. The court cannot depart from the plain

language of the statute by reading into it any exceptions, limitations, or conditions that conflict

with the clearly-expressed legislative intent. Id. (citing Metropolitan Life Insurance Co. v. Hamer,

2013 IL 114234, ¶ 18). Each word, clause, and sentence of the statute must be given a reasonable

construction, and no term should be rendered superfluous. Id. (citing Prazen v. Shoop, 2013 IL

115035, ¶ 21). When reviewing a matter of statutory interpretation, we presume that the legislature

passed the statute “with full knowledge of all existing and prior statutory and case law.” People v.

Johnson, 2019 IL 123318, ¶ 42.

¶ 28 Whether the Legislature Waived Sovereign Immunity

¶ 29 Before rendering its ruling on CMS’s sovereign immunity argument, the circuit court stated

that while this defense barred Kay’s suit against the Treasurer in Kay v. Frerichs, it did not

automatically follow that this would apply to the suit against CMS as well. The circuit court had

previously determined—and we affirmed on appeal—that the recovery Kay sought against the

Treasurer from Trust 668 would draw from state funds, and could control how the Treasurer

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manages the remaining funds. However, turning to Kay’s present suit, the court noted that the

Treasurer was not required to use a self-insured state agency like CMS as surety, and could have

selected a private third-party surety instead. Therefore, Pool participants’ right to sue on the bond

could hinge on the Treasurer’s decision. According to the circuit court, this should not be the

case—“an account holder’s ability to recover should not depend on who issued the bond.” The

court further asserted that “the bond would be elusory [sic] if CMS could say, ‘We’re an arm of

the state, and you can’t control the state by filing a claim on the bond.’” The court further stated

that it agreed with Kay’s argument that the State waived sovereign immunity on the bond by stating

in the Bond Act that actions on official bonds are to be brought in the circuit court rather than the

court of claims.

¶ 30 On appeal, the issue of sovereign immunity is limited to the question of whether the

General Assembly waived sovereign immunity. Therefore, we need not consider CMS’s prior

arguments on its motion to dismiss regarding whether a judgment against CMS would impose

liability on and constrain the actions of the Treasurer. CMS’s argument before the circuit court

and on appeal is that neither the College Savings Pool Act nor the Bond Act contain clear and

explicit language waiving sovereign immunity; therefore, there is no statutory support for the

position that the General Assembly intended to subject the State to liability.

¶ 31 Sovereign immunity is codified in the State Lawsuit Immunity Act (Immunity Act), which

states that, except as provided in the Court of Claims Act and other listed statutes, “the State of

Illinois shall not be made a defendant or party in any court.” 745 ILCS 5/1 (West 2022); see also

Watkins v. Office of State Appellate Defender, 2012 IL App (1st) 111756, ¶ 21. The Court of

Claims Act, 705 ILCS 505/1 et seq., states that, with limited exceptions, the Court of Claims has

exclusive jurisdiction over all claims against the State “founded upon any law of the State of

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Illinois,” “founded upon any contract entered into with the State of Illinois,” and certain other

enumerated matters. 705 ILCS 505/8 (West 2022).

¶ 32 The General Assembly may consent to the liability of the State by waiving sovereign

immunity via statute. See Parmar v. Madigan, 2018 IL 122265, ¶ 31. Waiver of sovereign

immunity must be clear and unequivocal, explicitly indicating through affirmative language the

legislature’s specific authorization of waiver. Id.; see also Watkins, 2012 IL App (1st) 111756 at

¶ 23. In our review of whether the State has waived sovereign immunity, “the critical issue is

whether the legislature intended to impose liability upon the State, not how or where the intent is

expressed.” Grey v. Hasbrouck, 2015 IL App (1st) 130267, ¶ 18 (quoting Martin v. Giordano, 115

Ill.App.3d 367, 370 (4th Dist. 1983)).

¶ 33 Examples where our courts have found that the legislature intended to waive sovereign

immunity include sections 19 and 25 of the Illinois Educational Labor Relations Act (115 ILCS

5/19 (West 2022)) and the Illinois Public Labor Relations Act (5 ILCS 315/1, et (West 2022)),

respectively, both of which state: “For purposes of this Act, the State of Illinois waives sovereign

immunity.” See also Parmar, 2018 IL 122265 at ¶ 31 (discussing the Illinois Educational Labor

Relations Act); Leetaru v. Board of Trustees of University of Illinois, 2015 IL 117485, ¶ 74

(discussing the Illinois Public Labor Relations Act).

¶ 34 However, not all expressions of waiver must adhere to this phrasing—we found that the

legislature intended to waive sovereign immunity in section 5 of the Illinois Civil Rights Act of

2003 (Civil Rights Act) (740 ILCS 23/5 (West 2022)), and that the legislature’s consent extended

to the obligation of paying attorney fees and costs as listed in section 5(c). See Grey, 2015 IL App

(1st) 130267, ¶¶ 18-21. The parties in Grey agreed that the Civil Rights Act specifically subjected

the State to claims brought under this statute. See 740 ILCS 23/5(b) (“Any party aggrieved by

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conduct that violates subsection (a) may bring a civil lawsuit, in a federal district court or State

circuit court, against the offending unit of government.”) We held that the language stating, “Upon

motion, a court shall award reasonable attorneys' fees and costs *** to a plaintiff who is a

prevailing party ***” (740 ILCS 23/5(c)) was sufficiently clear and explicit to permit such an

award against the State when read within the context of section 5 as a whole, and the legislature

did not intend to exempt the State from paying attorney fees and costs by not including a specific

reference to the State in section 5(c). Grey, 2015 IL App (1st) 130267, ¶¶ 20-21.

¶ 35 Conversely, there are various examples of our courts rejecting the waiver argument. Our

supreme court found that section 2-1303 of the Code of Civil Procedure, 735 ILCS 5/2-1303, did

not contain waiver where it provided for a 6% interest rate on judgments when the judgment debtor

is “a unit of local government, *** a school district, a community college district, or any other

governmental entity.” In re Walker, 131 Ill.2d 300, 303 (1989) (finding that the language “or any

other government entity” was not a sufficiently clear expression of waiver).

¶ 36 The legislature also did not waive sovereign immunity in its 2008 amendments to the

Illinois Human Rights Act (775 ILCS 5/Art. I et seq. (West 2022)) by allowing complainants to

seek review by filing a civil action in the circuit court, where, prior to the amendments, review

was only available before the Human Rights Commission. See Watkins, 2012 IL App (1st) 111756

at ¶ 23 (finding that there was no affirmative language in the Human Rights Act which stated that

the State waived its immunity). In a later decision also rejecting the argument that the 2008

amendments waived sovereign immunity, the Fourth District explained that the language of the

amendments was too ambiguous to indicate waiver, because it could either be read to mean that a

complainant could choose between seeking review before the Commission or the circuit court, or

be read to mean that a complainant may commence an action in the circuit court if that is an

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appropriate forum (i.e., when sovereign immunity does not apply.) See Lynch v. Department of

Transportation, 2012 IL App (4th) 111040, ¶ 30.

¶ 37 On appeal, CMS argues that the circuit court erred in inferring a waiver of sovereign

immunity in sections 13 and 14 of the Bond Act for four reasons. The first is that the Bond Act

actually makes it clear that the legislature did not intend to waive sovereign immunity. CMS

references section 14.1, which, as previously discussed, states that when a state officer is required

to obtain a surety bond, that requirement may be satisfied through a self-insurance program

established by CMS—which the Treasurer chose here. The Department of Central Management

Law provides that “[a]ny claims against the State of Illinois under a self-insurance plan *** shall

be heard and determined by the Court of Claims and may not be filed or adjudicated in any other

forum.” 20 ILCS 40/405-105(11) (West 2022). This, as CMS further contends, clearly shows that

sovereign immunity applies to suits seeking to hold CMS liable for the Treasurer’s alleged

mismanagement of the Pool.

¶ 38 CMS’s second argument is that our courts have declined to find waiver in statutory

language that generally refers to the circuit court, similar to sections 13 and 14 of the Bond Act.

Specifically, in Parmar, our supreme court found that the legislature did not waive sovereign

immunity in the jurisdiction and venue provisions of the Illinois Estate and Generation-Skipping

Transfer Tax Act by mentioning the circuit court, as follows:

“(a) Jurisdiction. Jurisdiction to hear and determine all disputes in relation to a tax arising under this Act shall be in the circuit court for the county having venue as determined under subsection (b) of this Section, and the circuit court first acquiring jurisdiction shall retain jurisdiction to the exclusion of every other circuit court.

(b) Venue. (1) Venue for disputes involving Illinois estate tax of a decedent who was a resident of Illinois at the time of death shall lie in the circuit court for the county in which the decedent resided at death.” Parmar, 2018 IL 122265 at ¶ 29 (quoting 35 ILCS 405/15 (West 2014)).

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The court explained that this language was not a clear and unequivocal waiver of sovereign

immunity, despite referring to the circuit court having jurisdiction to hear all tax disputes under

the act, because “it does not reference the State or its immunity.” Id. at ¶ 32. Elaborating further,

the court stated that statutes which “use only general terms without an expressed intent to subject

the State to liability will not be construed to impair or negate the State’s immunity from suit

established in the State Lawsuit Immunity Act.” Id. CMS also cites to the decisions in Watkins

and Lynch, discussed above, which made similar findings regarding the 2008 amendments to the

Illinois Human Rights Act. Arguing further, CMS notes that the Bond Act does not even mention

the circuit court, making it an even clearer example than the two statutory examples provided.

¶ 39 Its third point is that the Bond Act does not create a public right of action, and therefore

cannot be construed as a clear expression of the legislature’s intent to waive sovereign immunity.

See Hicks v. Aetna Ins. Co., 97 Ill. App. 3d 828, 831 (5th Dist. 1981) (“Neither the general laws

governing the Department of Agriculture nor the Grain Dealers Act specifically authorize suit by

a private party on the Department of Agriculture's performance bond”) (internal citations omitted.)

In Hicks, the Fifth District further noted that while there have been several cases that allowed for

recovery on a public official's performance bond, none involved suits brought by private parties;

this tracks with the longstanding rule that “a third party may not bring an action on an official bond

in the absence of specific authority.” Id. (citing 63 Am. Jur. 2d, Public Officers and Employees, §

463 (1972)); see also Bueker, 2016 IL 120024 at ¶ 10 (“The proper claimant on a statutory public

official bond is the named obligee, unless the legislature has expressed in the statutory language

its intent to allow others to sue directly on the bond.”)

¶ 40 Fourth, CMS contends that a finding of waiver here would create a “significant exception”

to the Immunity Act that is not present in the plain text, because the Bond Act applies to “[a]ll

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official bonds required by law to be given by any public officer or public employee.” 5 ILCS 260/1

(West 2022). In support, CMS argues that a finding of waiver in the Bond Act would mean that

the General Assembly intended to subject numerous state officers and employees to liability in the

circuit court, as there are several other laws in addition to the College Pool Savings Act that require

public officers to post a bond. Relatedly, CMS notes that the Immunity Act does not include the

Bond Act in its list of statutes that provide for exceptions to sovereign immunity, despite the fact

that in 1972, when the General Assembly codified sovereign immunity, the Bond Act contained

the same provisions that supposedly waive sovereign immunity and allow Kay to pursue her claims

in the underlying matter. Therefore, the fact that the General Assembly did not include the Bond

Act as an exception to the rule that “the State of Illinois shall not be made a defendant or party in

any court” is further indication that it did not intend to carve out an exception allowing suits on

official bonds.

¶ 41 Additionally, CMS addresses the circuit court’s concern that the bond would be illusory if

beneficiaries could not sue on the bond. It contends that, if the Treasurer failed to faithfully

discharge his duties as to the Pool, the Illinois Attorney General could bring an action against him

in the circuit court to collect on the bond for the benefit of the Pool participants. Such an action

would not be barred by sovereign immunity. See 15 ILCS 205/4 (West 2022) (Duties of the

Attorney General include “institute[ing] and prosecut[ing] all actions and proceedings in favor of

or for the use of the State, *** enforc[ing] the proper application of funds appropriated to the

public institutions of the State, [and] prosecut[ing] breaches of trust in the administration of such

funds.”) Kay also could have commenced an action against the Treasurer in the Court of Claims,

as we explained in the appeal of her first action. See Kay, 2021 IL App (1st) 192271 at ¶ 23.

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¶ 42 In response, Kay alleges that the legislature waived sovereign immunity and consented to

lawsuits on the bond in three separate statutes—the College Savings Pool Act, the Official Bond

Act, and the Official Bond Payment Act (Payment Act). According to Kay, the College Savings

Pool Act includes affirmative language waiving sovereign immunity by making account holders

the beneficiaries of the bond that the Treasurer is required to post, stating that the “Treasurer shall

give bond with at least one surety, payable to and for the benefit of the account owners in the

College Savings Pool.” 15 ILCS 16.5(o). Kay argues that the legislature specifically chose

language making the official bond for the benefit of, and payable to, the individual account holders

rather than to the “People of the State of Illinois,” as it had in the Counties Code and Property Tax

Code discussed in Bueker. See Bueker, 2016 IL 120024, ¶ 17 (“We find nothing, either expressly

or by implication, in section 3–10003 of the Counties Code or section 19–40 of the Property Tax

Code indicating a legislative intent that private citizens may sue for damages on the public official

bond running only to ‘the People of the State of Illinois’ as obligee.”)

¶ 43 Kay further argues that whenever a statute provides that the State will pay for something,

the legislature has indicated a waiver of sovereign immunity. One such alleged example that she

cites to in support of this argument is Martin v. Giordano, 115 Ill.App.3d 367 (4th Dist. 1983). In

that decision, the Fourth District found that the State waived immunity from a section of the

Workers' Compensation Act authorizing additional payment for vexatious and unreasonable delay

in payment of a claim because various statutory provisions indicated the submission of the State

to liability; for example, section 2 of this act states that “[t]he State of Illinois hereby elects to

provide and pay compensation according to the provisions of this Act.” Id. at 369-70.

¶ 44 In the Bond Act, Kay specifically points to section 13 of the Bond Act, which states:

“Whenever the condition of the bond of any public officer is violated, action may be instituted on the bond, and prosecuted to final judgment against the officer, and any or all

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of the sureties, or against one or more of them, jointly and severally, without first establishing the liability of the principal by obtaining judgment against him or her alone.” 5 ILCS 260/13. 5

Her reasoning is that the inclusion of language such as “prosecuted to final judgment” and “by

obtaining judgment” indicates the legislature’s intent to allow actions on official bonds to proceed

in the circuit court as a way to protect account holders, and any reading to the contrary would

render this bond meaningless and thwart the legislature’s mandate. Kay further explains that the

only courts that can render “judgments” are Article VI courts, like the circuit court, whereas the

Court of Claims enters “awards.” See Ill. Const., Art. VI, § 6; 735 ILCS 5/2-1301 et seq.; compare

705 ILCS 505/26.

¶ 45 She notes the distinction between judgments and awards, with the former being

enforceable, appealable, and subject to a 9% statutory interest rate until satisfied, while the latter

are not. See, e.g., 705 ILCS 505/17 (“Any final determination against the claimant on any claim

prosecuted as provided in this Act shall forever bar any further claim in the court arising out of the

rejected claim”); Lucky Stores, Inc. v. State, 47 Ill. Ct. Cl. 440, 441 (1994) (“[T]here is no statute

expressly subjecting the State to liability for interest on Court of Claims awards”); State

Employees' Retirement System v. State, 37 Ill. Ct. Cl. 288, 290 (1984) (where General Assembly

did not appropriate sufficient funds to cover claimant’s claim, the claim was denied).

¶ 46 Kay additionally argues that the language of the Bond Act evinces the legislature’s intent

to waive immunity by the fact that it applies only to State officers and employees. See 5/ILCS

260/1 (“All official bonds required by law to be given by any public officer or public employee

*** shall be signed by that officer or employee ***.”) The entire act also deals exclusively with

5 She also cites to section 14 for additional language regarding judgments on official bonds: “Enforcement may be had on any judgment so entered as in other civil cases ***; however, the judgment shall be a lien upon the property of the sureties as in other civil cases.” 5 ILCS 260/14.

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public official bonds. Therefore, she continues, the legislature contemplated the possibility that

public funds would be at issue, yet still “made it clear that it expected the property of the surety,

which is an arm of the State itself, to be subject to judicial enforcement.”

¶ 47 She finds further support in section 14.5 of the Bond Act, which states, in pertinent part,

“Claims *** of a self-insurance program shall be paid on a pro rata and per occurrence basis out

of appropriate funds of the self-insurance agency.” 5 ILCS 260/14.5 (West 2022). She concludes

that this undoubtedly signals the legislature’s intent that the funds of the agency—whether it be

CMS or the Treasurer—be available as a remedy for a breach of the public trust.

¶ 48 She also cites to the Payment Act for additional language, similar to the above, stating that

the State is required to pay on an official bond:

“The State *** shall pay out of its funds the cost of any official bond furnished by any officer of the State *** required by its laws, rules, or regulations to execute the bond if the officer furnishes the bond with a surety company or companies authorized to do business in this State under the laws of this State and, if the surety on any official bond is not such a surety company or companies, the State *** shall pay out of its funds the cost of any bond or bonds indemnifying the surety against liability on the official bond.” 5 ILCS 270/1.

Kay concludes that the combined examples from the abovementioned three acts indicate through

clear and unequivocal language that the legislature intended to waive sovereign immunity and to

allow judgments on the bond in question to be available and enforceable “as in other civil cases”

(5 ILCS 260/14) and that the State “shall pay out of its funds the cost of any bond or bonds

indemnifying the surety against liability on the official bond” (5 ILCS 270/1); furthermore, Pool

participants are the beneficiaries and payees of that bond. See 15 ILCS 505/16.5(o).

¶ 49 Kay further distinguishes the present matter from the statutory examples cited by CMS in

its argument that our courts have not found waiver where the statutory language includes general

references to the circuit court, such as the 2008 amendments to the Human Rights Act. See

Watkins, 2012 IL App (1st) 111756 at ¶ 23; Lynch, 2012 IL App (4th) 111040 at ¶ 30. She argues

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that the Human Rights Act specifies two potential forums in which to bring claims—a commission

and the circuit court. She notes that the court in Lynch declined to find waiver because of the

ambiguity of the language. See Lynch, 2012 IL App (4th) 111040 at ¶ 30 (stating that the

amendments could be read as providing the option to sue in the circuit court only when the

employer was not a state employer subject to sovereign immunity). She compares this to the

present matter, arguing that the legislature’s repeated use of “judgment” and its allowance of

enforcement “as in other civil cases” clearly indicate an intent to designate the circuit court as the

only appropriate forum, without any of the ambiguity of the Human Rights Act as discussed in

Lynch.

¶ 50 As to CMS’s reliance on Hicks to argue that, in the absence of specific authority creating

a private right of action, private parties cannot bring an action on an official bond, Kay contends

that Hicks is distinguishable because the plaintiffs were third parties, not named in the bond or the

statute. The court held that without any consent from the State to sue the insurer directly, nothing

permitted a third party to sue on the bond. Hicks, 97 Ill. App. 2d at 831. In the present case, Kay

argues that the Act specifically states that the bond is “payable to and for the benefit of the account

owners in the College Savings Pool.” 15 ILCS 505/16.5(o). And when a contract exists for the

direct benefit of a third party, that party is allowed to sue for breach; this extends to bonds, as

contracts between the surety and obligor. See Ardon Electric Co., Inc. v. Winterset Construction,

Inc., 354 Ill.App.3d 28, 39 (1st Dist. 2004) (Subcontractor plaintiffs were third-party beneficiaries

of a contract between municipality and general contractor, in which the general contractor agreed

to obtain a surety bond pursuant to the Public Construction Bond Act to ensure payment to

subcontractors); Shaw Industries, Inc. v. Community College District No. 515, 318 Ill.App.3d 661,

669 (1st Dist. 2000) (same).

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¶ 51 Kay also rejects CMS’s position that a finding of waiver in this matter would have far-

reaching effects in any instance in which a public officer or employee is required by law to post a

bond. She argues that the College Savings Pool bond is unique as being the only official bond that

makes members of the public beneficiaries and payees of the bond. She also claims that, if it is

CMS’s position that there is no explicit statutory waiver of sovereign immunity that would allow

her to proceed in the underlying case, then CMS cannot also argue that the Attorney General can

bring suit on behalf of the Pool participants—there is no explicit waiver of sovereign immunity in

the Attorney General Act. Therefore, she concludes, if sovereign immunity bars her suit, it bars

the Attorney General from suing as well.

¶ 52 We begin our analysis by noting that Kay is correct in identifying that there is no one fixed

phrasing by which the legislature can indicate its affirmative intent to waive sovereign immunity.

Certainly, our analysis is more straightforward where the legislature has chosen to directly state,

“For purposes of this Act, the State of Illinois waives sovereign immunity,” as in some of the

examples to which we cite above. However, that is not the only way to indicate waiver, as we have

seen in the examples of the Illinois Civil Rights Act. See Grey, 2015 IL App (1st) 130267, ¶¶ 20-

21.

¶ 53 Nevertheless, whatever the statutory language may be, we will not make a finding of

waiver if it is insufficiently explicit and affirmative. Our courts have previously declined to find

waiver where a statute authorized prejudgment interest on judgments against governmental

entities. See Walker, 131 Ill.2d at 307. While the decision in Walker did not turn on an analysis of

the word “judgment,” we note that neither this decision nor any other opinion from our courts has

found a waiver of sovereign immunity based on the legislature’s use of language that indirectly

suggests the possibility of bringing an action in circuit court pursuant to that statute. This is to be

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expected, as such a finding would be contrary to the long-established caselaw on waiver, which,

as we have explained, requires that the statutory language be “clear and unequivocal, explicitly

indicating through affirmative language the legislature’s specific authorization of waiver.”

Parmar, 2018 IL 122265 at ¶ 31. That simply cannot apply to any of Kay’s statutory examples she

cites in support of her position.

¶ 54 Looking at another example, we find that the language at issue here is distinguishable from

the clear, definitive expression of waiver that we found in Grey. 2015 IL App (1st) 130267 at ¶¶

20-21. In Grey¸ we determined that the legislature intended to subject the State to liability for

attorney’s fees and costs pursuant to section 5(c) of the Civil Rights Act. Id. However, there was

no dispute in that case as to whether the statute allows for claims to be brought against the State at

all—section 5(b) permits any aggrieved party to “bring a civil lawsuit, in a federal district court or

State circuit court, against the offending unit of government.” 740 ILCS 23/5(b). This only further

demonstrates that when the legislature intends to allow parties to bring claims against the State in

the circuit court, it says so directly. Therefore, we do not agree with Kay’s position that the circuit

court is implicitly mentioned as a proper venue for suits such as hers. Indeed, pursuant to the Court

of Claims Act, she could have sought recovery in the court of claims instead.

¶ 55 Furthermore, Kay is incorrect in claiming that the College Savings Pool bond would be a

“nullity” if we do not find that the legislature waived sovereign immunity. Sovereign immunity

and the existence of a bond for the benefit of Pool participants are entirely consistent. The Attorney

General is authorized to file an action on behalf of the People of the State, and can certainly do so

in the circuit court. See 15 ILCS 205/4. The Attorney General could collect on the bond, for the

benefit of Pool participants. Kay’s argument that sovereign immunity would bar a suit by the

Attorney General as well as suits brought by Pool participants is unfounded, as the Attorney

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General brings actions on behalf of the State, which are not subject to sovereign immunity.

Therefore, it is entirely possible for private individuals to be barred from filing actions on the bond,

and for the bond to exist for the benefit of those individuals, as a source of recovery in actions

brought by the Attorney General. See also Bueker, 2016 IL 120024 at ¶¶ 18-22 (distinguishing

various historic examples of suits brought by public entities bringing suits on official bonds on

behalf of injured parties.) Kay is mistaken in arguing that, if her suit is barred by sovereign

immunity, then an action brought by the Attorney General would be similarly barred.

¶ 56 The abovementioned point is also relevant to Kay’s arguments that the Bond Act and

Payment Act indicate waiver of sovereign immunity by allowing for “judgments” from the circuit

court on public bonds and by requiring the State to pay out of its funds the cost of official bonds,

respectively. Such provisions are not inconsistent with the Immunity Act; they do not indicate the

legislature’s blanket intent to allow the public to sue on official bonds. If the legislature intended

for such a far-reaching exception to the general rule of sovereign immunity, it would not be worded

so cryptically as to require our courts to, for example, read “circuit court” where the legislature

uses the word “judgment.” It is far more likely that the legislature would have directly, plainly

stated that a private right of action exists on a public bond.

¶ 57 In ruling on CMS’s motion to dismiss, the circuit court acknowledged our finding in Kay

v. Frerichs that Kay’s original suit against the Treasurer sought recovery that would draw from

state funds, but went on to consider whether sovereign immunity could bar a suit against the surety

on the bond when the Treasurer was authorized to choose whether to use a self-insured state agency

or a private third party as surety. However, the question of whether sovereign immunity would bar

a hypothetical suit brought by account holders against the surety if the Treasurer had selected a

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private insurer is beyond the scope of the certified question on appeal. We are asked to review the

text of the Act and to determine whether it contains language waiving sovereign immunity.

¶ 58 We are also unconvinced by Kay’s contention that a finding of waiver in the Bond Act

would not have the unintended, far-reaching consequence of subjecting the State to liability in the

numerous other instances where State officers are required by statute to post a public bond.

Whether Kay is correct or not in stating that the College Savings Pool Act is unique in stating that

the bond is “payable to and for the benefit of the account owners,” we have explained above that

this language is insufficient to affirmatively, explicitly waive sovereign immunity. Kay’s only

support for her position here is that the legislature declined to write that the bond is payable to “the

People of the State of Illinois,” language that the court in Bueker found insufficient to evince a

legislative intent to allow private citizens to sue on the official bond. See Bueker, 2016 IL 120024,

¶ 17. If the General Assembly was aware of the possibly unprecedented phrasing it used in creating

the Act’s bond requirement, and it intended to waive sovereign immunity, it stands to reason that

the General Assembly would have made this waiver explicit, rather than inferred through process

of elimination by comparing the Act with other examples of statutory language that did not

constitute waiver.

¶ 59 We emphasize again that we are not looking for one set phrase when conducting the waiver

analysis. However, we have not been presented with any example of statutory language which our

courts have found to be a waiver of sovereign immunity that is similar to the language of the Act.

We similarly have not been presented with any authority finding either the Bond Act or the

Payment Act to be a basis for the waiver of sovereign immunity in any other statute, or that implied

references to recovery in the circuit court through the use of “judgment” can be construed as

waiver. There were several ways in which the General Assembly could have waived sovereign

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immunity to allow Pool participants to maintain an action on the official bond in the circuit court.

None are present here.

¶ 60 In interpreting the Act, we are tasked with ascertaining and giving effect to the legislature’s

intent, without reading into the text anything that is not consistent with that legislative intent. We

do not find any sort of clear, affirmative, and specific waiver of sovereign immunity in the matter

at issue. Therefore, we answer the first of the circuit court’s certified questions in the negative, and

find that the General Assembly did not waive sovereign immunity to allow a participant in the

College Savings Pool to initiate an action in the circuit court against the surety on the bond.

¶ 61 Whether the Act Created a Private Right of Action

¶ 62 Having answered the first question in the negative, we note that we need not go further in

analyzing whether Kay can maintain her suit—it is barred by sovereign immunity. However, we

will address the second certified question below.

¶ 63 In denying CMS’s motion to dismiss, the circuit court noted that the leading case on the

standing issue is Beuker. In that case, our supreme court held that “[t]he proper claimant on a

statutory public official bond is the named obligee, unless the legislature has expressed in the

statutory language its intent to allow others to sue directly on the bond.” Beuker, 2016 IL 120024

at ¶ 10 (discussing whether private citizens could bring an action on a public official bond

mandated under the Property Tax Act). Explaining further, the Bueker court discussed the Supreme

Court decision Midland Loan Finance Co. v. National Surety Corp., 309 U.S. 165 (1940), which,

in holding that a private citizen did not have standing to sue on a public official bond, wrote,

“Whether as a matter of right a third party may sue on the instrument for loss covered by an official bond running only to the statutory obligee depends upon the intention of the legislative body which required the bond. This intention may be evidenced by express statutory language or by implication.” Midland Loan Finance Co., 309 U.S. at 170 (quoted in Bueker, 2016 IL 120024 at ¶ 11).

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¶ 64 The circuit court disagreed with CMS that Bueker broadly held that private citizens cannot

be the proper claimants on a statutorily-mandated public official bond. Rather, the court stated that

it must look to the statutory language and the language of the bond, to determine whether the

General Assembly expressly or implicitly indicated an intent to create a private right of action on

the College Savings Pool bond. In conducting that determination, the court stated:

“The obligee on the bond is the treasurer, but the statute says that the bond must be payable to and for the benefit of the account owners in the college savings pool. In case of a conflict between the bond and the statute, the terms of the statute control. And, in fact, *** there's not really a conflict here because the certificate of coverage for the bond says that it's provided to comply with the statutory requirements here because the statute says that the bond should be payable to and for the benefit of the account holders. And plaintiffs in this case are a class of account holders. Plaintiffs have standing to bring this suit on the bond.”

¶ 65 On appeal, CMS argues that when the General Assembly established the College Savings

Pool in 2000, our courts had already interpreted the Bond Act as not authorizing a private right of

action, based on the common-law rule that private parties could not sue on an official bond absent

specific authority. See Hicks, 97 Ill. App. 3d at 831. It further states that in the absence of clear

language stating that Pool participants may sue to collect on the bond, we cannot read a private

right of action into the Act. Kay broadly argues that the Pool participants have standing to bring

an action on the bond because the Act makes them the named obligees—or at least intended

beneficiaries—on that bond. See Shaw Industries, 318 Ill.App.3d at 669 (subcontractor had

standing as third-party beneficiary to pursue breach of contract claim under the Public

Construction Bond Act).

¶ 66 As in our review of the sovereign immunity question, there is no set phrase that the General

Assembly must use to create a private right of action, and there are various examples of statutory

language that our courts have found to authorize or not authorize a private right of action. In our

review of the Act, we presume that the General Assembly was aware of the relevant existing

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statutes and caselaw, and, based on that knowledge, knew how to include language allowing

private parties to sue directly on the bond. See Bueker, 2016 IL 120024 at ¶ 24 (“The legislature

clearly knows how to include language allowing private citizens to bring claims directly for their

own use and benefit.”)

¶ 67 Our prior discussion of Bueker is relevant here as well. In Beuker, our supreme court held

that the legislature did not allow private citizens to bring direct actions on the official bond by

naming “the People of the State of Illinois” as obligee on the public bond in section 3–10003 of

the Counties Code and section 19–40 of the Property Tax Code. Id. In doing so, the supreme court

contrasted these sections with a different section of the Property Tax Code, section 20–155, which

“specifically provides that ‘persons aggrieved, may prosecute suit against any collector *** by suit

upon the bond, in the name of the People of the State of Illinois, for their use,’ but only when the

collector's breach involves the failure to make the reports and payments required by the Property

Tax Code.” Id. (quoting 35 ILCS 200/20–155 (West 2014)). Therefore, the court concluded, the

legislature intentionally circumscribed the situations in which private individuals could bring

direct actions on statutory official bonds, and the plaintiffs’ claims did not fall within such

circumstances. Id.

¶ 68 CMS further contends that Kay’s argument that individual Pool participants are necessarily

the obligees on the bond is not supported by the plain language of the Act, and that the General

Assembly would have specified as such had this been the intent—just as it would have specified

that private individuals may sue to collect on the bond. Again discussing Bueker, CMS notes that

the relevant section of the Counties Code stated that the County treasurer must post a bond that

substantively follows a form that includes language that the principal and surety “are obligated to

the People of the State of Illinois.” Id. at ¶ 14 (quoting 55 ILCS 5/3–10003 (West 2014)). The Act

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here states that the bond is “payable to and for the benefit of the account owners” 15 ILCS

505/16.5(o). On this point, CMS concludes that this does not rise to the level of providing specific

authority for private actors to sue on an official bond; while “it is usually provided that bonds given

by officers to States and counties shall be available to protect the interests of private persons who

may be aggrieved by the breach of such bonds,” such bonds cannot be used “for these purposes in

cases unprovided for by such statutory enactment.” Hicks, 97 Ill. App. 3d at 831 (quoting City of

Eaton Rapids for use of Snyder v. Stump, 86 N.W. 438, 439 (Mich. 1901)).

¶ 69 Kay argues that if section 16.5(o) does not create a private right of action, then the provision

that the bond shall be “payable to and for the benefit of the account owners” is meaningless. CMS’s

position is that the legislature may indicate that an official bond is created for the use of certain

parties for whose benefit a public body may bring actions to collect on the bond. As discussed in

the previous section, the Attorney General or other public representative of the People may bring

an action on behalf of the private parties. See Bueker, 2016 IL 120024 at ¶ 19.

¶ 70 CMS also argues that the General Assembly did not authorize actions such as Kay’s,

brought by a class of plaintiffs representing only a set of Pool participants, as this would run

counter to its intent that the bond be payable to and for the benefit of all account owners in the

Pool. It contends that if individual account holders could bring actions on the bond, the bond would

be depleted, leaving any other account holders with valid claims on the bond without recourse.

Additionally, in her putative class action suit, Kay attempts to represent only a subset of Pool

participants, and any recovery on the bond would only go to that subset, not account holders as a

whole. Not only would judgment in her favor exclude Pool participants who are not part of the

putative class, but it could also result in bond funds going to individuals who are not Pool

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participants, because she seeks attorney fees from the bond. This, CMS concludes, is counter to

the legislature’s intent in establishing a bond for the benefit of Pool account owners.

¶ 71 Kay responds by again emphasizing her position that Pool participants are the named

obligees of the bond, and that it is the individual account holders, not the State, who have an

interest in the bond. She claims that there is no state money in the Pool; it is entirely comprised of

money paid by the participants. Therefore, she contends that the participants have standing to

recover that money directly, and do not need to rely on the Attorney General to choose to bring an

action on their behalf. She further argues that the Attorney General lacks the authority to bring

such an action, because the Attorney General Act only permits suits brought “in favor of or for the

use of the State,” and the State has no interest in the contributions deposited into the Pool. See 15

ILCS 205/4, 15 ILCS 505/16.5(c).

¶ 72 Regarding CMS’s argument that judgment in favor of Kay and a class representing a subset

of Pool participants, she responds that there is no requirement that every beneficiary must be

harmed in order for bond coverage to exist, and that individual participants are permitted to

vindicate their rights. She further claims that it is unclear whether the bond could be depleted

because the $10 million penal sum indicated in the Act only serves as a cap on any given action,

and it is possible that the bond would be considered replenished after CMS paid the claim.

Additionally, she argues that she only might be entitled to attorney fees, and it is not yet known

whether any non-Pool-participants would be entitled to fees.

¶ 73 We agree with CMS that we must presume the General Assembly was aware of the relevant

caselaw finding the creation of a private right of action (or lack thereof) in prior statutory language

creating official bond requirements. Even if Kay is correct in her assertion that the language in the

Act stating that the bond be “payable to and for the benefit of the account owners” is unique to the

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Act, it does not follow that this allows account owners to sue on the bond, particularly when we

consider that the legislature drafted this provision with full knowledge of how to make such an

intent clear. As noted in Hicks, the general rule is that private parties cannot collect on public

official bonds. If the legislature intended to provide an exception here, it would have made this

clear.

¶ 74 Kay urges us to apply the law of suretyship and infer that Pool participants are named as

obligees on the bond, and may therefore bring an action on the bond. She distinguishes Bueker in

stating that the named obligee on the bond at issue in that case was “the People of the State of

Illinois,” which our supreme court explained refers to the body politic, rather than to private

citizens. See Bueker, 2016 IL 120024 at ¶ 17. While we acknowledge the difference between the

obligee in Bueker and the reference to account owners in the Act here, we disagree that this

necessitates the conclusion that section 16.5(o) created a private right of action. Furthermore,

Kay’s citations to cases finding that unnamed third-party beneficiaries had standing to sue on a

bond do not reach the issue here—in order for her to maintain her suit, the legislature must have

specifically created a private right of action to sue on the public bond. Additionally, Kay relies on

authority discussing contractual bonds that are not subject to the rule that private parties cannot

sue on public official bonds without specific authority. See, e.g., City of Elgin v. Arch Insurance

Co., 2015 IL App (2d) 150013; Carson Pirie Scott & Co. v. Parrett, 346 Ill. 252 (1931); see also

Shaw Industries, 318 Ill.App.3d 661 (subcontractor filed a breach of contract action against

contractor for failure to post a bond pursuant the Public Construction Bond Act, which expressly

permits subcontractors to sue on the statutory bond).

¶ 75 Following the rules of statutory interpretation, we are not convinced that the legislature

intended to create a private right of action if, in order to comprehend this intent, we must first read

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“payable to and for the benefit of” to mean “obligees,” and then apply the law of suretyship to

arrive at the conclusion that the individual Pool participants are permitted to directly sue on the

bond. These inferences and departures from the text are precisely what we must avoid in construing

a statute.

¶ 76 Furthermore, for the same reasons stated in our discussion of the sovereign immunity

question, we agree with CMS that we need not find a private right of action in the Act in order to

give meaning to the legislature’s statement that the Pool bond is payable to and for the benefit of

account holders. The Attorney General may sue on the bond for the benefit of Pool participants,

or individual participants may bring actions in the Court of Claims. We have already addressed

Kay’s attempt to show that, based on CMS’s own argument, the Attorney General would be barred

by sovereign immunity, but she now adds the argument that the Attorney General can only bring

actions “in favor of or for the use of the State,” and the Pool bond is for Pool participants, not the

State. See 15 ILCS 205/4. For the same reasons as those we discuss below, addressing her claim

that the legislature drafted the Act’s bond requirement in a novel and unprecedented manner that

bypasses the State and allows individual account holders to sue directly, we are not convinced by

her making the same distinction here. Here, we need not address this argument further, as it goes

beyond the certified question at issue. Similarly, we need not make a determination on the parties’

argument of whether Kay’s proposed suit would deplete the bond, thwart the purpose of the bond,

or result in recovery on the bond by attorneys who are not participants in the Pool.

¶ 77 Kay attempts to present the language of the Act as unique and unprecedented—that if the

legislature intended to make the State the obligee of the bond, it would have used the same

language used in prior statutes instead of referring to account owners in the Pool. Kay’s argument

is unconvincing, because this is not the first and only example of a public official bond that the

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legislature created to protect the interests of private parties. See, e.g., Hicks, 97 Ill. App. 3d at 831

(stating that the primary objective of an official bond is to protect the interests of the named

beneficiary, “the State, county, corporation, etc., as the case may be,” but “it is usually provided

that bonds given by officers to States and counties shall be available to protect the interests of

private persons who may be aggrieved by the breach of such bonds”) (quoting City of Eaton Rapids

for use of Snyder v. Stump, 86 N.W. 438, 439 (Mich. 1901)). It does not follow that such private

parties have standing to bring an action on the official bond at issue, without specific authority

from the legislature. Id.

¶ 78 Kay’s repeated emphasis on the novel language used in the Act to create the Pool bond

merely obscures the fact that there is no specific, clear language either expressly or impliedly

indicating the legislature’s intent to create a private right of action that would give her standing to

pursue her claims. Indeed, if the legislature did truly do something it had never done before with

an official bond, as Kay claims, we still presume that it did so with the same knowledge of the

relevant existing statutory language and caselaw. The legislature would have been aware of the

lack of precedent for what it was doing in creating the Pool bond. It would have been further aware

that it was creating an exception to the common-law rule that private parties lack standing to collect

on public official bonds. See McIntosh v. Walgreens Boots Alliance, Inc., 2019 IL 123626, ¶ 30

(“A legislative intent to alter or abrogate the common law must be plainly and clearly stated.”) It

is reasonable to conclude, therefore, that the legislature would have been especially careful in

drafting the Act to make it explicitly clear that it was creating a private right of action authorizing

account holders to individually sue on the bond. As demonstrated by the parties’ significant debate

on this question before us and the circuit court, such authorization, if it existed, would be far from

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clear. Furthermore, the rules of statutory interpretation do not permit us to read such authorization

into the Act.

¶ 79 Therefore, we answer the second certified question in the negative, and find that the Act

did not create a private right of action allowing individual Pool participants to have standing to

pursue an action to recover from the bond.

¶ 80 CONCLUSION

¶ 81 For the foregoing reasons, we answer both certified questions in the negative. The Illinois

General Assembly did not waive sovereign immunity to allow a participant in the College Savings

Pool to initiate an action in the circuit court against the surety on the bond posted pursuant to

section 16.5(o) of the College Savings Pool Act, 15 ILCS 505/16.5(o). The College Savings Pool

Act did not create a private right of action allowing individual participants in the College Savings

Pool to have standing to pursue an action to recover from the bond.

¶ 82 Certified questions answered; cause remanded.

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