Underwood v. City of Chicago

2025 IL App (1st) 231132
CourtAppellate Court of Illinois
DecidedFebruary 28, 2025
Docket1-23-1132
StatusPublished

This text of 2025 IL App (1st) 231132 (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, 2025 IL App (1st) 231132 (Ill. Ct. App. 2025).

Opinion

2025 IL App (1st) 231132

FIFTH DIVISION February 28, 2025 No. 1-23-1132

IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT Appeal from the Circuit Court MICHAEL W. UNDERWOOD, JOSEPH M. ) of Cook County. VUICH, RAYMOND SCACCHITTI, ROBERT ) McNULTY, JOHN E. DORN, WILLIAM J. ) SELKE, JANIECE R. ARCHER, DENNIS ) MUSHOL, RICHARD AGUINAGA, JAMES ) SANDOW, CATHERINE A. SANDOW, ) MARIE JOHNSTON, et al. ) ) Plaintiffs-Appellants, ) ) v. ) ) THE CITY OF CHICAGO, a Municipal ) Corporation; THE TRUSTEES OF THE ) POLICEMEN’S ANNUITY AND ) BENEFIT FUND OF CHICAGO; ) THE TRUSTEES OF THE FIREMEN’S ) No. 13 CH 17450 ANNUITY AND BENEFIT FUND OF ) CHICAGO; THE TRUSTEES OF THE ) MUNICIPAL EMPLOYEES’ ANNUITY ) BENEFIT FUND OF CHICAGO; and THE ) TRUSTEES OF THE LABORERS’ AND ) RETIREMENT BOARD EMPLOYEES’ ) ANNUNITY AND BENEFIT FUND OF ) CHICAGO, ) ) Defendants ) ) (The Trustees of the Policemen’s Annuity and ) Benefit Fund of Chicago, the Trustees of the ) Firemen’s Annuity and Benefit Fund of ) Chicago, the Trustees of the Municipal ) Employees’ Annuity and Benefit Fund of ) Chicago, and the Trustees of the Laborers’ and ) The Honorable Retirement Board Employees’ Annuity and ) Neil H. Cohen, Benefit Fund of Chicago, Defendants- ) Judge, presiding. No. 1-23-1132

Appellees). )

JUSTICE ODEN JOHNSON delivered the judgment of the court, with opinion. Justices Mitchell and Navarro concurred in the judgment and opinion.

OPINION

¶1 Plaintiffs, 1 all civic retirees, appeal the trial court’s grant, on April 24, 2023, of

summary judgment for the four defendant funds: (1) the Trustees of the Policeman’s Annuity

and Benefit Fund of Chicago, (2) the Trustees of the Fireman’s Annuity and Benefit Fund of

Chicago, (3) the Trustees of the Municipal Employees’ Annuity and Benefit fund of Chicago,

and (4) the Trustees of the Laborers’ and Retirement Board Employees’ Annuity and Benefit

Fund of Chicago (collectively, the funds).

¶2 This court previously affirmed, on December 1, 2023, the trial court’s grant of

summary judgment for the City of Chicago (City), the only other defendant besides the funds

and the sole appellee in that prior appeal. While the prior appeal concerned only the City, this

appeal concerns only the funds.

¶3 At issue in this appeal is plaintiffs’ belief that, although the funds have provided

healthcare plan options for plaintiffs, the funds’ options are insufficient. However, as Justice

Mikva previously observed on behalf of a unanimous appellate court, “[i]t 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

See the appendix to this opinion for a list of the 337 named plaintiffs listed in exhibit 23 to the 1

sixth amended complaint. Infra ¶ 60.

2 No. 1-23-1132

(Underwood III). Former appellate court Justices Cunningham and Connors concurred. For the

reasons discussed below, we affirm.

¶4 BACKGROUND

¶5 I. The Parties

¶6 Plaintiffs’ sixth amended 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.

¶7 Underwood III observed that the City is an entity that had previously “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 discourse that eventually led to the present suit.

Underwood III, 2020 IL App (1st) 182180, ¶ 9.

¶8 Regarding the funds who are defendants and the sole 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, [f]unds).” Underwood v. City of

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

3 No. 1-23-1132

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

2016 IL App (1st) 153613, ¶ 3.

¶9 II. The 1983 and 1985 Subsidies

¶ 10 In 1983, the City agreed to provide fixed-rate healthcare subsidies to retired Chicago

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

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)).

¶ 11 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; .Pub. Act 84-159, § 1 (eff. Aug. 16, 1985) (adding Ill. Rev. Stat. 1985, ch.

108½, ¶ 11-160.1)

¶ 12 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

(1st) 182180, ¶ 7.

¶ 13 III. The Korshak Litigation

¶ 14 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

4 No. 1-23-1132

pay them, which became known as the “Korshak [l]itigation.” Underwood III, 2020 IL App

(1st) 182180, ¶ 9; City of Chicago v. Korshak, No. 87 CH 10134 (Cir. Ct. Cook County).

¶ 15 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

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

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

¶ 16 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.

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Bluebook (online)
2025 IL App (1st) 231132, Counsel Stack Legal Research, https://law.counselstack.com/opinion/underwood-v-city-of-chicago-illappct-2025.