P&S Grain, LLC v. Herrin Community School District No.4.

2021 IL App (5th) 210023-U
Appellate Court of Illinois·Decided October 14, 2021·No. 5-21-0023·Unpublished

Opinion

2021 IL App (5th) 210023-U NOTICE

NOTICE

Decision filed 10/14/21. The This order was filed under text of this decision may be NO. 5-21-0023 Supreme Court Rule 23 and is changed or corrected prior to the filing of a Petition for not precedent except in the

Rehearing or the disposition of IN THE limited circumstances allowed the same. under Rule 23(e)(1).

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT

P&S GRAIN, LLC, an Illinois Limited Liability ) Appeal from the Company, and RONALD OSMAN, Individually, ) Circuit Court of ) Williamson County.

Plaintiffs-Appellants, )

)

v. ) No. 10-CH-9 )

HERRIN COMMUNITY SCHOOL DISTRICT ) NO. 4, WILLIAMSON, JACKSON, AND ) FRANKLIN COUNTIES, a School District Duly ) Established and Existing in Accordance With the ) Provisions of the Illinois School Code, ) Honorable ) John W. Sanders,

Defendant-Appellee. ) Judge, presiding.

JUSTICE VAUGHAN delivered the judgment of the court.

Justices Welch and Moore concurred in the judgment.

ORDER

¶1 Held: The trial court’s order granting the defendant’s motion to strike is affirmed where an award of attorney fees pursuant to the common fund doctrine is unwarranted.

¶2 Plaintiffs, P&S Grain, LLC, and Ronald E. Osman, appeal the trial court’s order granting defendant’s motion to strike count II of their second amended complaint that requested attorney fees pursuant to the common fund doctrine because the doctrine is applicable in this case. For the following reasons, we affirm.

¶3 I. BACKGROUND

¶4 On January 30, 2010, plaintiffs filed a complaint for declaratory judgment and injunctive relief against defendant, Herrin Community School District No. 4, Williamson, Jackson, and Franklin Counties (Herrin), contending Herrin improperly used funds received pursuant to the Illinois County School Facility Occupation Tax Law (55 ILCS 5/5-1006.7 (West 2010)) towards refunding bonds.

¶5 Plaintiffs filed an amended complaint on December 9, 2015, limiting the dates of the action from October 1, 2008, to August 22, 2011, because section 5-1006.7(h) was amended by Public Act 97-542 (eff. Aug. 23, 2011) to allow expenditures of the School Facility Occupation Tax Fund toward refunding bonds. The amended complaint requested (1) a declaratory judgment finding Herrin’s expenditures towards the refunding and revenue source bonds were not for school facility purposes pursuant to the statute during the applicable period; (2) an order for an accounting by Herrin of all payments made with the School Facility Occupation Tax Fund that were related to the refunding bonds; and (3) repayment by Herrin to the School Facility Occupation Tax Fund in the amount determined by the accounting that was improperly used toward the bonds.

¶6 Following cross-motions for summary judgment, the trial court granted summary judgment for plaintiffs on the declaratory judgment action. Herrin appealed the decision, which was affirmed by this court on June 18, 2018, and remanded for further proceedings. P&S Grain, LLC v. Herrin Community School District No. 4, 2018 IL App (5th) 160428-U.

¶7 On remand, plaintiffs filed a motion for a status conference to establish a timeframe for Herrin’s court-ordered accounting. On August 8, 2019, Herrin filed a motion for final resolution advising the court that the accounting revealed $2,729,625.10 was improperly paid toward the

refunding bonds. The prayer for relief requested payment, via internal interfund transfer over the next 10 fiscal years, consisting of 10 equal installments, ending on June 30, 2029.

¶8 On September 19, 2019, plaintiffs filed a response to defendant’s motion for final resolution along with a motion for leave to file a second amended complaint. On October 22, 2019, the trial court granted plaintiffs’ motion for leave, and plaintiffs’ second amended complaint was filed. Count I requested a declaratory judgment finding that Herrin’s expenditures of the School Facility Occupation Tax Fund were not for school facility purposes as per the statute, an accounting of the improperly used funds, and entry of a judgment against Herrin in the amount of the repayment due to the School Facility Occupation Tax Fund as determined by the accounting, “assessing 6% interest on that amount pursuant to 735 ILCS 5/2-1303 until the judgment is paid in full.” Count II requested attorney fees under the common fund doctrine, contending that a judgment entered against Herrin “creates a fund for which ownership sits with all persons or entities collecting or paying sales tax in Williamson County, Illinois, during the period of October 1, 2008, to August 22, 2011.” This count further alleged that plaintiffs created the fund and no “other person or entity collecting or paying sales tax in Williamson County *** participated in the creation of this fund.” Plaintiffs claimed that “[a]ll persons or entities collecting sales tax or paying sales tax in Williamson County, Illinois,” from October 1, 2008, to August 22, 2011, would benefit from the fund “by the fact that their sales tax payments will be utilized as required by the County School Facility Occupational Tax Law.” Plaintiffs further contended that equity required that “all persons or entities collecting sales tax or paying sales tax in Williamson County *** contribute to the costs of this litigation.” Plaintiffs’ prayer for relief requested a declaratory judgment finding they were entitled to attorney fees pursuant to the common fund doctrine “from the repayment fund created in this matter” and an entry of

judgment against Herrin requiring it to pay “one-third of the repayment amount adjudged in Count I to Plaintiffs for attorney’s fees.”

¶9 On November 20, 2019, Herrin filed a motion to strike plaintiffs’ second amended complaint contending, inter alia, that the common fund doctrine was inapplicable because there was no “common fund” and a diversion of tax funds for attorney fees was prohibited based on language in Hamer v. Kirk, 64 Ill. 2d 434 (1976). Plaintiffs filed a response on December 17, 2019, again requesting statutory interest and attorney fees under the common fund doctrine. On March 9, 2020, Herrin filed a memorandum in support of its motion to strike plaintiffs’ second amended complaint, which, in addition to the prior arguments, contended that attorney fees were unrecoverable because Osman was representing himself pro se. On March 11, 2020, plaintiffs filed a “notice of filing case law” submitting copies of numerous cases with the trial court; however, no written summary of those cases was ever provided. Oral argument was held on March 11, 2020.

¶ 10 On April 14, 2020, the trial court issued an order denying Herrin’s motion to strike the request for interest in count I after finding the issue premature and granting Herrin’s motion to strike the request for attorney fees in count II. The trial court found the case was similar to Hamer, in that no new fund would be created from the litigation and, therefore, no fund would be under the court’s control.

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P&S Grain, LLC v. Herrin Community School District No.4., 2021 IL App (5th) 210023-U (Ill. Ct. App. 2021).

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