People ex rel. Illinois Department of Human Services v. Youth & Adult Center

2025 IL App (1st) 240664-U

• Court: Appellate Court of Illinois
• Decided: April 9, 2025
• Docket: 1-24-0664
• Status: Unpublished

Opinion

2025 IL App (1st) 240664-U

No. 1-24-0664

Order filed April 9, 2025

THIRD DIVISION

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

THE PEOPLE OF THE STATE OF ILLINOIS ex rel. ) Appeal from ILLINOIS DEPARTMENT OF HUMAN ) the Circuit Court of SERVICES, ) Cook County. ) Plaintiff-Appellee, ) ) v. ) No. 22 M1 120430 ) YOUTH AND ADULT CENTER, ) Honorable ) Stephen A. Swedlow, Defendant-Appellant. ) Judge Presiding.

JUSTICE MARTIN delivered the judgment of the court. Justices Reyes and D.B. Walker concurred in the judgment.

ORDER

¶1 Held: We reverse the trial court’s order granting summary judgment in favor of the Illinois Department of Human Services and remand for further proceedings.

¶2 The Illinois Department of Human Services (Department) filed a complaint against the

Youth and Adult Center (YAC) in the circuit court of Cook County, pursuant to the Illinois Grant

Funds Recovery Act (Act) (30 ILCS 705/1 et seq. (West 2012)), seeking to recover $50,000 in

grant funds previously awarded to YAC. In response, YAC argued that the Department was not No. 1-24-0664

entitled to seek recovery as the Department failed to comply with the notice and hearing

requirements of the Act.

¶3 The trial court granted the Department’s motion for summary judgment and entered

judgment against YAC for $50,000. For the reasons that follow, we reverse the trial court’s order

granting summary judgment in favor of the Department and remand for further proceedings.

¶4 I. BACKGROUND

¶5 YAC is an Illinois non-profit that provides job training and employment-related services

and programs to underserved communities. In 2014, YAC applied for grant funds from the

Department. William Moore, an attorney, volunteered his services and assisted with the application

process. YAC received grant funds in the amount of $50,000 from the Department. The funds were

disbursed pursuant to a “Community Services Agreement” (Agreement) between YAC and the

Department. The Agreement ran from July 1, 2014, to the end of the Department’s fiscal year,

June 30, 2015.

¶6 Section 17.2(b) of the Agreement required YAC to submit an annual “close-out report” to

the Department within 60 days following the end of the fiscal year. The report was to be prepared

in accordance with a format prescribed by the Department, which relies on the reports to confirm

that grant funds are used for the purposes set forth in the Agreement.

¶7 On November 14, 2014, YAC submitted a document to the Department which it claimed

was its close-out report, and also submitted a final financial report on December 22, 2014. YAC

represented that it had expended the entirety of the grant funds in accordance with the terms of the

Agreement.

¶8 The Department determined that YAC’s purported close-out report was inadequate, as it

did not provide any financial information and gave only a brief narrative describing the funds’

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usage. The Department further determined that YAC’s final financial report was equally

inadequate, as it only consisted of a one-page table listing YAC’s expenses from October 10-13,

2014.

¶9 On April 30, 2015, two months before the end of the fiscal year and the expiration of the

Agreement, and without notice to the Department, YAC moved from its business address listed in

the Agreement—16148 S. Kedzie, Markham, Illinois (Markham address)—to a new business

address at 25 E. 16th Street, Chicago Heights, Illinois (Chicago Heights address).

¶ 10 Section 26.1 of the Agreement required YAC to give the Department 30 days’ prior written

notice of its intent to change its address. There is no dispute that YAC failed to give the Department

the required prior notice.

¶ 11 On May 28, 2015, the Department issued a memo to all of its grantee service providers,

including YAC, notifying them of their year-end financial reporting requirement, as detailed in

their respective Community Services Agreements. The Department also sent YAC financial

reporting forms to complete. According to the Department, these forms were part of the annual

close-out reports. The memo and forms were sent to YAC at the Markham address.

¶ 12 Warren Davis, who was serving as president and CEO of YAC, received the documents

and subsequently returned them to the Department on August 4, 2015, without completing them.

Instead, Davis forwarded a form entitled “Grant Reconciliation/Recovery Form,” wherein he

claimed that to his knowledge, all of the grant funds had been “appropriated.” Davis maintained

that he was unaware “of any funds not properly used.” He also requested an appeal of any demands

by the Department for recovery of the funds. Davis averred in his declaration that he received no

response from the Department regarding his request for an appeal.

¶ 13 Approximately three years later, on April 11, 2018, the Department sent YAC an informal

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hearing notice via certified mail, return receipt requested, at the Markham address. The notice was

directed to William Moore and incorrectly referred to him as the president of YAC. In their

respective declarations, Moore and Davis averred that they did not receive the notice.

Nevertheless, the record includes a copy of the certified mail receipt showing that someone at the

Markham address signed for the notice.

¶ 14 The notice informed Moore that the financial information YAC submitted to the

Department indicated that YAC had “not fully expended” the grant funds. Moore was advised that

if he “would like to discuss and exchange information related to this issue,” he would have to make

a written request for an informal hearing “within 15 calendar days after receipt of” the notice. 1

The notice stated that if the issue was not resolved or a timely request for an informal hearing was

not made, the Department would “send a Formal Notice of Intent to Recover Grant Funds letter

before the recovery process shall proceed.” YAC never requested an informal hearing.

¶ 15 On May 18, 2018, the Department sent YAC a formal hearing notice at the Markham

address. The notice was again directed to Moore and incorrectly referred to him as the president

of YAC. The notice informed Moore that the grant funds were subject to recovery since YAC had

not returned its year-end financial reporting documents to the Department. Moore was advised that

if he disagreed with the Department’s findings or had information he would like to present, he

would have to make a written request for a formal hearing “within 35 calendar days after receipt

of” the notice. 2 The notice was subsequently returned to the Department as “unclaimed.” YAC

1 Under section 7 of the Act: “Whenever a grantor agency believes that grant funds are subject to recovery, the grantor agency shall provide the grantee the opportunity for at least one informal hearing to determine the facts and issues and to resolve any conflicts as amicably as possible before taking any formal recovery actions.” 30 ILCS 705/7 (West 2020). 2 Section 8 of the Act sets out the procedural guidelines for a formal hearing. 30 ILCS 705/8 (West 2020). 4 No. 1-24-0664

never made a request for a formal hearing.

¶ 16 The following year, on September 23, 2019, the Illinois Attorney General (IAG), on behalf

of the Department, sent a letter to YAC at its Chicago Heights address. The letter stated that since

YAC had not sent the Department a close-out report, it was required to pay the Department

$50,000, the total amount awarded under the grant. 3 The IAG’s letter did not offer YAC an

opportunity for a hearing, informal or otherwise, and it did not mention the appeal requested by

Davis in 2015. The letter was also sent to Davis via email.

¶ 17 Approximately three years later, on October 14, 2022, the Department filed this action, a

one-count complaint against YAC seeking recovery of the grant funds. 4 The Department claimed

that YAC’s failure to provide it with the annual close-out report violated section 17.2(b) of the

Agreement, which thereby authorized it to commence proceedings to recover the grant funds. The

Department argued that YAC waived its defenses to a recovery proceeding under the Act when it

failed to request either an informal or formal hearing, which the Department claimed amounted to

a failure to exhaust administrative remedies.

¶ 18 The Department followed its complaint with a motion for summary judgment. In its

motion, the Department contended that after its formal hearing notice was returned “unclaimed,”

it conducted an internet search for YAC’s current address, which yielded the Markham address.

The Department maintained that it placed a call to the telephone number listed for the Markham

address, which went unanswered. According to the Department, it “was not obligated to search

further.” The Department argued that it satisfied the notice requirements necessary to initiate an

action to recover the grant funds when it mailed the informal and formal hearing notices to YAC

3 Under section 9 of the Act, the Illinois Attorney General is authorized to recover grant funds “which have been misapplied or are being improperly held[.]” 30 ILCS 705/9 (West 2020). 4 We note that this period encompassed the beginning of the COVID-19 pandemic, which may have delayed or temporarily halted court proceedings. 5 No. 1-24-0664

at the Markham address, the address listed in the Agreement.

¶ 19 In response, YAC asserted that the Department could not proceed with an action to recover

the grant funds because it failed to grant Davis’s 2015 request for an appeal. YAC claimed that the

Department could not proceed with such an action as it failed to give YAC the opportunity to

dispute the Department’s findings in either an informal or formal hearing. Further, YAC alleged

the Department could not proceed with a recovery proceeding under the Act, as no written notice

of its intent to recover the grant funds was sent to YAC’s current business address in Chicago

Heights, as required under the Act.

¶ 20 On February 28, 2024, the trial court granted the Department’s motion for summary

judgment and entered judgment against YAC for $50,000. This timely appeal followed.

¶ 21 II. ANALYSIS

¶ 22 On appeal, YAC challenges the trial court’s grant of summary judgment in favor of the

Department. YAC contends that the Department failed to give proper notice for the recovery of

funds as required by statute, thus precluding the Department’s action to recover the grant. The

issue before us turns on whether the notice mailed to YAC’s Markham address fulfilled the

statute’s requirement that notice be sent to the recipient’s “current business address.”

¶ 23 Summary judgment is appropriate where “the pleadings, depositions, and admissions on

file, together with the affidavits, if any, show that there is no genuine issue as to any material fact

and that the moving party is entitled to a judgment as a matter of law.” 735 ILC 5/2-1005(c) (West

2012). “Summary judgment is a ‘drastic means of disposing of litigation and therefore should be

allowed only when the right of the moving party is clear and free from doubt.’ ” AEB Merger, LLC

v. Azari, 2024 IL App (1st) 230975, ¶ 14 (quoting Purtill v. Hess, 111 Ill.2d 229, 240 (1986)). A

trial court’s decision on a motion for summary judgment is reviewed de novo. Cole v. Chicago

6 No. 1-24-0664

Transit Authority, 2025 IL App (1st) 230797, ¶ 31.

¶ 24 Resolution of this appeal requires this court to address issues of statutory construction.

Questions of statutory construction are questions of law reviewed de novo and are appropriate for

resolution by summary judgment. See Oswald v. Hamer, 2018 IL 122203, ¶ 9 (statutory

construction presents a question of law appropriate for summary judgment). The “cardinal

principle and primary objective in construing a statute is to ascertain and give effect to the intention

of the legislature.” Cothron v. White Castle System, Inc., 2023 IL 128004, ¶ 20. The most reliable

indicator of legislative intent is the language of the statute itself, given its plain and ordinary

meaning. Rice v. Marathon Petroleum Corp., 2024 IL 129628, ¶ 34. The following sections of the

Act are relevant to our analysis.

¶ 25 Section 8(a) of the Act provides, in relevant part, that “prior to taking any action to recover

the grant funds, the grantor agency shall provide the grantee of the funds a written notice of the

intended recovery. This notice shall identify the funds and the amount to be recovered and the

specific facts which permit recovery.” 30 ILCS 705/8(a) (West 2020).

¶ 26 Pursuant to section 8(b) of the Act, “[a] grantee shall have 35 days from the receipt of the

notice required in paragraph (a) of this Section to request a hearing to show why recovery is not

justified or proper.” 30 ILCS 705/8(b) (West 2020).

¶ 27 Section 8(f) of the Act provides, in relevant part, that “[a]ny notice or mailing required or

permitted by this Section shall be deemed received 5 days after the notice or mailing is deposited

in the United States mail, properly addressed with the grantee’s current business address.” 30 ILCS

705/8(f) (West 2020).

¶ 28 The Department contends that the trial court correctly granted summary judgment in its

favor, arguing that the Markham address was YAC’s “current business address” for purpose of the

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Act, as it was the address YAC provided in the Agreement. The Department asserts that

“construing ‘current business address’ as the most recent address provided by the grantee is the

only practical interpretation that promotes the legislative purpose of enabling grantor agencies to

recover misspent funds.”

¶ 29 The Department suggests that if current business address “meant wherever a grantee moved

its offices, then grantees could avoid grant recovery notices simply by changing their office

location.” The Department adds that tying “current business address” to a grantee’s office location

could lead to arbitrary and inconsistent results when serving notices—for instance, if a grantee had

multiple offices or was incorporated at a different address from where its office was located.

¶ 30 In response, YAC relies on dictionary definitions of the word “current,” as meaning

“occurring in or existing at the present time,” or “belonging to the present time,” and argues that

at the time the Department sent out the notices, YAC’s current business address “at the present

time,” was in Chicago Heights.

¶ 31 In this case, the Department sent both the informal and formal hearing notices to YAC at

the Markham address, rather than the Chicago Heights address. In granting summary judgment in

favor of the Department, the trial court necessarily determined that although the Department failed

to address its mailings to Chicago Heights, the mailings were nonetheless sufficient to satisfy the

statute’s notice requirements. We disagree.

¶ 32 The Act does not provide that a notice is deemed received if it is sent to an address listed

in a contract or agreement. Rather, under section 8(f) of the Act, the notice must be sent to “the

grantee’s current business address” for it to be “deemed received.” This makes sense, considering

businesses sometimes relocate and change their business address, which is precisely what

happened in this case. Moreover, by the time the Department sent the hearing notices to YAC at

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the Markham address in 2018, the Agreement had been expired for three years, thereby ending

YAC’s obligation to provide the Department with any change of address.

¶ 33 The clear, plain, and unambiguous language of section 8 of the Act required the

Department to provide YAC with written notice of its intent to recover the grant funds, and the

Department was required to forward this written notice to YAC’s current business address. The

Department failed to do this and therefore failed to fulfill the statute’s notice mandate.

¶ 34 The Department’s reliance on the Agreement’s requirement that YAC notify the

Department of a change in address is misplaced. We disagree with the Department’s contention

that the Markham address was YAC’s “current business address,” since it was the address provided

in the Agreement. As previously noted, at the time the Department sent the informal and formal

hearing notices to YAC at the Markham address, the Agreement had been expired for three years,

and YAC had moved to the Chicago Heights address. Therefore, we find that the Chicago Heights

address was YAC’s current business address for purposes of the Act; and as a consequence, the

trial court erred in granting summary judgment in favor of the Department based on its

determination that mailing the hearing notices to the Markham address was sufficient to satisfy the

statute’s notice requirements.

¶ 35 As a final note, we point out that when the Attorney General’s office commenced recovery

proceedings against YAC, it mailed its notice and served the complaint at YAC’s current business

address in Chicago Heights. It would appear that the Attorney General has given the statute its

plain meaning, as do we.

¶ 36 III. CONCLUSION

¶ 37 For the foregoing reasons, we reverse the order of the trial court granting summary

judgment in favor of the Department and the judgment against YAC for $50,000, and remand the

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case for further proceedings consistent with this decision.

¶ 38 Reversed and remanded.