Underwood v. City of Chicago

2023 IL App (1st) 211317
CourtAppellate Court of Illinois
DecidedDecember 1, 2023
Docket1-21-1317
StatusPublished
Cited by3 cases

This text of 2023 IL App (1st) 211317 (Underwood v. City of Chicago) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Underwood v. City of Chicago, 2023 IL App (1st) 211317 (Ill. Ct. App. 2023).

Opinion

2023 IL App (1st) 211317

SIXTH DIVISION December 1, 2023 No. 1-21-1317

IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT

MICHAEL W. UNDERWOOD, JOSEPH M. ) Appeal from the Circuit Court VUICH, RAYMOND SCACCHITTI, ROBERT ) of Cook County. McNULTY, JOHN E. DORN, WILLIAM J. ) SELKE, JANIECE R. ARCHER, DENNIS ) MUSHOL, RICHARD AGUINAGA, JAMES ) SANDOW, CATHERINE A. SANDOW, ) MARIE JOHONSTON, and 337 NAMED ) PLAINTIFFS LISTED IN EXHIBIT 23 TO ) THE SIXTH AMENDED COMPLAINT, ∗ ) ) Plaintiffs-Appellants, ) ) v. ) No. 13 CH 17450 ) THE CITY OF CHICAGO, a Municipal ) The Honorable Corporation; TRUSTEES OF THE ) Neil H. Cohen, POLICEMEN’S ANNUITY AND ) Judge, presiding. BENEFIT FUND OF CHICAGO; ) TRUSTEES OF THE FIREMEN’S ) ANNUITY AND BENEFIT FUND OF ) CHICAGO; TRUSTEES OF THE MUNICIPAL) EMPLOYEES’ ANNUITY AND BENEFIT ) FUND OF CHICAGO; and TRUSTEES OF ) THE LABORERS’ AND RETIREMENT ) BOARD EMPLOYEES’ ANNUNITY AND ) BENEIFT FUND OF CHICAGO, ) ) Defendants ) ) (The City of Chicago, a Municipal Corporation, ) Defendant-Appellee). )

∗ See the appendix to this opinion for a list of the 337 named plaintiffs listed in exhibit 23 to the sixth amended complaint. No. 1-21-1317

PRESIDING JUSTICE ODEN JOHNSON delivered the judgment of the court, with opinion. Justices C.A. Walker and Tailor concurred in the judgment and opinion.

OPINION

¶1 The City of Chicago (City), a defendant and the sole appellee in this appeal, filed a

motion in the trial court seeking an order dismissing the case against it with prejudice. The trial

court granted the City’s motion on September 9, 2021. In its order, the trial court quoted Justice

Mikva, who had written on behalf of a unanimous appellate court: “It is absolutely law of the

case that the plaintiffs have no right to receive—and that neither the City nor the Funds have

any obligation to provide—any additional monetary contributions or to guarantee affordable

healthcare.” Underwood v. City of Chicago, 2020 IL App (1st) 182180, ¶ 53 (Underwood III).

Then-appellate court Justices Cunningham and Connors concurred.

¶2 On this appeal, the issue is whether the trial court erred in dismissing plaintiffs’ claims

against the City seeking additional money and guarantees of health care. For the reasons

discussed below, we affirm.

¶3 BACKGROUND

¶4 I. The Parties

¶5 Plaintiffs’ sixth amended complaint (complaint) is the most recent complaint filed in

this action. It alleges that plaintiffs are 337 participants in one of the four pension funds named

as defendants. In Underwood III, this court described plaintiffs as follows: “Plaintiffs in the

present action are past or present City employees who alleged improper diminution of pension

benefits under the Illinois Constitution, breach of contract, estoppel, impairment of contract,

and denial of equal protection.” Underwood III, 2020 IL App (1st) 182180, ¶ 14. 2 No. 1-21-1317

¶6 Underwood III observed that the City, the sole defendant in the present appeal, 1 is an

entity that had “provided its retirees with fixed-rate healthcare subsidies funded by city taxes.”

Underwood III, 2020 IL App (1st) 182180, ¶ 7. However, in 1987, “the City announced that it

would stop providing the subsidies,” and this was the start of the legal troubles that eventually

led to the present suit. Underwood III, 2020 IL App (1st) 182180, ¶ 9.

¶7 Regarding the four funds who are defendants but not appellees, this court has observed:

“The General Assembly created four pension funds for City employees in order to

administer and carry out the provisions of the Illinois Pension Code: (1) the

Policemen’s Annuity and Benefit Fund (Police Fund), (2) the Firemen’s Annuity and

Benefit Fund (Fire Fund), (3) the Municipal Employees’ Annuity and Benefit Fund

(Municipal Fund), and (4) the Laborers’ and Retirement Board Employees’ Annuity

and Benefit Fund (Laborers’ Fund) (collectively, Funds).” Underwood v. City of

Chicago, 2016 IL App (1st) 153613, ¶ 3 (Underwood I).

The taxpayers of the City finance the funds’ obligations “through a tax levy.” Underwood I,

2016 IL App (1st) 153613, ¶ 3. According to appellants, litigation continues in the trial court

over claims against the four funds.

¶8 II. The 1983 and 1985 Subsidies

¶9 In 1983, the City agreed to provide fixed-rate health care subsidies to retired Chicago

police officers and firefighters. Subsequently, the Illinois Pension Code was amended to

1 Plaintiffs represent in their brief to this court that litigation continues in the circuit court concerning claims against the funds. As described below in paragraph 26, the trial court granted plaintiffs’ motion for summary judgment, in part, finding that the funds had a statutory obligation under the 1983 and 1985 amendments to contract with one or more carriers to provide group health insurance for all eligible annuitants. This issue is not before us on this appeal. 3 No. 1-21-1317

include these subsidies. Underwood III, 2020 IL App (1st) 182180, ¶ 7 (citing Pub. Act 82-

1044, § 1 (eff. Jan. 12, 1983) (adding Ill. Rev. Stat. 1983, ch. 108½, ¶ 6-164.2)).

¶ 10 In 1985, the Pension Code was further amended to include subsidies to retired

municipal employees, laborers, and retirement board employees. Underwood III, 2020 IL App

(1st) 182180, ¶ 7.

¶ 11 The 1983 and 1985 “legislation contemplated that each of the funds established for

these employees”—namely, the four funds named as defendants here—“would contract with

an insurance carrier to provide a healthcare plan for its retirees.” Underwood III, 2020 IL App

(1st) 182180, ¶ 7. The funds would then “use the monthly subsidies provided by the City

toward the premiums for such coverage.” Underwood III, 2020 IL App (1st) 182180, ¶ 7. If

the premiums cost more than the subsidies, “the excess was to be deducted from a retiree’s

monthly annuity,” unless the retiree renounced the coverage. Underwood III, 2020 IL App

¶ 12 III. The Korshak Litigation

¶ 13 When the City announced in 1987 that it was going to stop paying these subsidies on

January 1, 1988, it also filed a lawsuit seeking a declaratory judgment that it did not have to

pay them, which became known as the “Korshak Litigation.” Underwood III, 2020 IL App

(1st) 182180, ¶ 9.

¶ 14 Before the merits of the Korshak litigation were decided, however, the City and the

funds reached a settlement. This settlement was not a permanent solution but merely an interim

measure, designed to give the parties more time to reach a more lasting solution. However, if

they failed to reach such a solution at the end of 10 years, the settlement returned the parties to

4 No. 1-21-1317

the same legal status that they had had on October 19, 1987, when the litigation began.

Underwood III, 2020 IL App (1st) 182180, ¶ 10.

¶ 15 Effective August 23, 1989, the Pension Code was amended, to include the terms of this

first interim settlement, including a 10-year limit. In 1997, before the time limit in the first

interim agreement expired, the parties reached a second interim agreement, which was set to

expire on June 30, 2003. On April 4, 2003, the parties reached a final settlement. Underwood

III, 2020 IL App (1st) 182180, ¶¶ 10-12.

¶ 16 IV. The Underwood Litigation

¶ 17 On July 23, 2013, plaintiffs filed a new action against the City and the four funds, which

is the present Underwood litigation. Underwood I, 2016 IL App (1st) 153613, ¶ 12.

¶ 18 Regarding the Underwood litigation, this court has observed that plaintiffs can be

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Cite This Page — Counsel Stack

Bluebook (online)
2023 IL App (1st) 211317, Counsel Stack Legal Research, https://law.counselstack.com/opinion/underwood-v-city-of-chicago-illappct-2023.