{ "id": 5798653, "name": "JAMES SCHROEDER, Plaintiff-Appellant, v. MORTON GROVE POLICE PENSION BOARD et al., Defendants-Appellees", "name_abbreviation": "Schroeder v. Morton Grove Police Pension Board", "decision_date": "1991-09-09", "docket_number": "No. 1\u201490\u20141297", "first_page": "697", "last_page": "702", "citations": [ { "type": "official", "cite": "219 Ill. App. 3d 697" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "561 N.E.2d 105", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "203 Ill. App. 3d 714", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2580910 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/203/0714-01" ] }, { "cite": "511 N.E.2d 142", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1990, "opinion_index": 0 }, { "cite": "158 Ill. App. 3d 7", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3577789 ], "year": 1990, "opinion_index": 0, "case_paths": [ "/ill-app-3d/158/0007-01" ] }, { "cite": "133 Ill. App. 3d 415", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3530365 ], "weight": 2, "pin_cites": [ { "page": "417" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/133/0415-01" ] }, { "cite": "435 N.E.2d 1307", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "106 Ill. App. 3d 603", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3029952 ], "weight": 3, "year": 1982, "pin_cites": [ { "page": "607-08" }, { "page": "608" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/106/0603-01" ] }, { "cite": "479 N.E.2d 31", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "pin_cites": [ { "page": "35" } ], "opinion_index": 0 }, { "cite": "133 Ill. App. 3d 566", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3530042 ], "weight": 3, "pin_cites": [ { "page": "572" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/133/0566-01" ] }, { "cite": "390 N.E.2d 1281", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "opinion_index": 0 }, { "cite": "72 Ill. App. 3d 833", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5582712 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ill-app-3d/72/0833-01" ] }, { "cite": "139 Ill. App. 3d 456", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3569414 ], "weight": 3, "year": 1979, "pin_cites": [ { "page": "458" }, { "page": "458" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/139/0456-01" ] }, { "cite": "487 N.E.2d 1050", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "year": 1985, "opinion_index": 0 }, { "cite": "478 N.E.2d 1123", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "year": 1985, "pin_cites": [ { "page": "1125" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 522, "char_count": 10936, "ocr_confidence": 0.754, "pagerank": { "raw": 5.737608991946718e-08, "percentile": 0.3593775158320041 }, "sha256": "a24da21d07bc79dcfed6cfdfd13ac905510b2abd2af6f29d5850abd77b1ec1e8", "simhash": "1:68bd09dfebd5de5f", "word_count": 1758 }, "last_updated": "2023-07-14T21:35:35.632923+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "JAMES SCHROEDER, Plaintiff-Appellant, v. MORTON GROVE POLICE PENSION BOARD et al., Defendants-Appellees." ], "opinions": [ { "text": "JUSTICE O\u2019CONNOR\ndelivered the opinion of the court:\nJames Schroeder appeals from the trial court\u2019s order that granted the pension board summary judgment.\nOn June 3, 1973, Schroeder joined the Morton Grove police department and began making contributions to the pension fund. He continued to make contributions to the pension fund throughout his employment. On or about July 16, 1983, while on duty as a police officer, Schroeder was injured, leaving him mentally disabled. Subsequently, on July 26, 1984, the pension board awarded Schroeder a duty-related disability pension. Shortly thereafter, Schroeder filed a workers\u2019 compensation claim against the Village of Morton Grove with the Illinois Industrial Commission pursuant to the Workers\u2019 Compensation Act (Act) (Ill. Rev. Stat. 1983, ch. 48, par. 138.1 et seq.) seeking compensation for the same injury. On May 13, 1988, the Industrial Commission approved a settlement between the parties for a lump sum of $89,500. After settling the workers\u2019 compensation claim, the pension board rendered an administrative decision and order. Pursuant to section 3 \u2014 114.5 of the Pension Code (Ill. Rev. Stat. 1987, ch. \u00cdOB1^, par. 3 \u2014 114.5), the pension board reduced Schroeder\u2019s disability pension by the amount of the settlement under the Workers\u2019 Compensation Act.\nIn 1973, the Workmens\u2019 Compensation Act provided for a reduction in pension benefits by amounts received as workers\u2019 compensation (Ill. Rev. Stat. 1973, ch. 48, par. 138.1(b)(1)). Section 1(b)(1) of the Workmens\u2019 Compensation Act provided:\n\u201c[An employee] who is *** or shall be entitled to receive a pension or benefit for or on account of disability or death arising out of or in the course of his employment from a pension or benefit fund to which the State or any county, town, township, incorporated village, school district, body politic, underwriters\u2019 fire patrol or municipal corporation therein is a contributor, in whole or in part, is entitled to receive only such part of such pension or benefit as is in excess of the amount of compensation recovered and received by such employee *** under this Act.\u201d (Ill. Rev. Stat. 1973, ch. 48, par. 138.1(b)(1).)\nHowever, effective October 1, 1974, section 1(b)(1) of the Workmens\u2019 Compensation Act was repealed. In 1977, the Pension Code was amended to include section 3 \u2014 151, which provided that pension disability should be reduced by the amounts received in a claim pursuant to the Act. (Ill. Rev. Stat. 1977, ch. \u00cdOB1^, par. 3 \u2014 151.) Then, on January 1, 1985, section 3 \u2014 151 was repealed and recodified verbatim in section 3 \u2014 114.5 of the Pension Code.\nOn November 15, 1988, Schroeder filed a two-count complaint against the pension board and its five members in the United States District Court for the Northern District of Illinois. Count I alleged that reduction of his pension rights violated his right to procedural due process under 42 U.S.C. section 1983 (1988), and count II requested review of the pension board\u2019s decision to reduce his disability payments. After a lengthy discussion only with respect to whether Schroeder was denied due process, the district court captioned the following as its conclusion:\n\u201cThe Pension Board acted according to the Illinois statute which requires adjustment of pension benefits to reflect workmen\u2019s compensation awards. A review of Illinois case law indicates that the Pension Board correctly interpreted its authority under the statute. Sellard v. Board of Trustees, 478 N.E.2d 1123[.] *** Mathews indicates that in this type of case a pretermination hearing is not constitutionally necessary. Section 3 \u2014 148 of [the] Illinois Pension Code provides specific redress by which plaintiff can be made whole. See Gualano v. City of Des Plaines, 487 N.E.2d 1050 (Ill. App. 1985). Adequate state remedies are available and plaintiff has failed to exhaust these remedies or claim that the state remedial scheme violates due process. Plaintiff\u2019s complaint is dismissed.\u201d\nThereafter, on April 28, 1989, Schroeder filed a complaint for administrative review in the circuit court of Cook County. Subsequently, Schroeder and the pension board filed their respective motions for summary judgment. On May 4, 1990, the circuit court granted the pension board summary judgment. Schroeder appeals.\nInitially, we reject the pension board\u2019s argument that Schroeder\u2019s State court complaint is barred by the doctrine of res judicata because his Federal court complaint was \u201cvirtually identical\u201d and was dismissed. However, the district court\u2019s language that \u201c[adequate state remedies are available and plaintiff has failed to exhaust these remedies\u201d suggests that the court did not dismiss the case on its merits. Thus, this court may review Schroeder\u2019s appeal on its merits.\nSection 5 of article XIII of the 1970 Illinois Constitution provides that membership in a pension system of any local governmental unit in the State is \u201can enforceable contractual relationship, the benefits of which shall not be diminished or impaired.\u201d (Ill. Const. 1970, art. XIII, \u00a75.) An employee\u2019s rights in the system vest, either at the time he enters the system, e.g., making contributions, or in 1971 when the 1970 Constitution became effective, whichever is later. Gualano v. City of Des Plaines (1985), 139 Ill. App. 3d 456, 458, 487 N.E.2d 1050, citing Kraus v. Board of Trustees of the Police Pension Fund (1979), 72 Ill. App. 3d 833, 390 N.E.2d 1281.\nVesting is defined in a contractual sense. (Gualano, 139 Ill. App. 3d at 458.) The \u201ccontractual relationship\u201d between the State and the employee is formed and governed by the actual terms of the contract or pension at the time the employee initially contributes to the system. (Kraus v. Board of Trustees of the Police Pension Fund (1979), 72 Ill. App. 3d 833, 390 N.E.2d 1281.) The law which exists at the time of the contract formation is deemed to be a part of the contract as though it was expressly referred to or incorporated into it. Taft v. Board of Trustees of the Police Pension Fund (1985), 133 Ill. App. 3d 566, 479 N.E.2d 31.\nBased upon this division\u2019s decision in Gualano v. City of Des Plaines (1985), 139 Ill. App. 3d 456, 487 N.E.2d 1050, Schroeder argues that his pension should not have been reduced by the settlement amount. We agree. In Gualano, plaintiff Gualano joined the Des Plaines fire department in 1967. When he joined the fire department, he began contributing to the pension fund, and he continued to so contribute following the elimination of section 1(b)(1) of the Workers\u2019 Compensation Act. As a consequence of Gualano\u2019s continued contributions after section 1(b)(1) was eliminated, this court found that Gualano\u2019s contractual rights were modified and resulted in the vesting of an additional pension benefit. Following that rationale, this court determined that the subsequent enactment of a section in the Pension Code which reinstated the reduction provision could not constitutionally diminish his vested rights. Thus, the panel held that Gualano\u2019s pension benefits could not be reduced by the amount of his award pursuant to the Act.\nThe Gualano panel chose to follow the second district in Taft v. Board of Trustees of the Police Pension Fund (1985), 133 Ill. App. 3d 566, 479 N.E.2d 31. The Taft court held that plaintiff Taft\u2019s continued contributions to his pension fund after the repeal of the reduction provision of the Workers\u2019 Compensation Act increased his pension benefits and constituted the vesting of an additional right. The Taft court stated that \u201cwhere a pension system increases an employee\u2019s benefits, the employee can take advantage of a beneficial pension change where he provides consideration for the contractual modification, most often taking the form of new or continued [(emphasis omitted)] contributions to the pension system.\u201d (Emphasis added.) (Taft, 133 Ill. App. 3d at 572, 479 N.E.2d at 35, citing Kuhlmann v. Board of Trustees of the Police Pension Fund (1982), 106 Ill. App. 3d 603, 607-08.) The Taft court found Kuhlmann v. Board of Trustees of the Police Pension Fund (1982), 106 Ill. App. 3d 603, 435 N.E.2d 1307, instructive. In Kuhlmann, the court held that an employee cannot, without the payment of additional consideration {i.e., pension contributions), take the benefit of changes in the pension system enacted after he entered the system. Kulhmann, 106 Ill. App. 3d at 608.\nWhen the Gualano panel chose to follow Taft, it rejected Sellards v. Board of Trustees of the Rolling Meadows Firemen\u2019s Pension Fund (1985), 133 Ill. App. 3d 415, 478 N.E.2d 1123. We also reject Sellards, despite the pension board\u2019s reliance thereon. In Sellards, another panel from the first district rejected the argument that an employee\u2019s pension rights were increased by the elimination of section 1(b)(1) (Ill. Rev. Stat. 1973, ch. 48, par. 138.1(b)(1)), stating that an employee\u2019s pension rights are fixed at the time of vesting and \u201c[t]he Constitution does not provide that a person has a vested right in any beneficial changes in a pension system.\u201d (Emphasis added.) Sellards v. Board of Trustees of the Rolling Meadows Firemen\u2019s Pension Fund (1985), 133 Ill. App. 3d 415, 417, 478 N.E.2d 1123, 1125.\nThe third district in Carr v. Board of Trustees of the Police Pension Fund (1987), 158 Ill. App. 3d 7, 511 N.E.2d 142, also adopted the reasoning of Gualano and Taft. Thereafter, the fifth district in Fenton v. Board of Trustees (1990), 203 Ill. App. 3d 714, 561 N.E.2d 105, relied upon Gualano, Taft and Carr. The Carr and Fenton courts held that the plaintiffs acquired an additional pension benefit which could not be reduced by the amount of the plaintiffs\u2019 awards pursuant to the Act because the plaintiffs continued contributing to their respective pension funds following the repeal of section 1(b)(1).\nIn short, we follow the Gualano, Taft, Carr and Fenton rationale. Accordingly, Schroeder\u2019s pension disability should not be reduced by the amount of his workers\u2019 compensation settlement because he contributed to his pension fund before, during and after the repeal of section 1(b)(1) of the Act. Those contributions created an additional vested contract right which cannot constitutionally be diminished or impaired.\nBased upon the foregoing, the case is reversed and remanded. Thus, we need not address Schroeder\u2019s argument that the pension board violated his due process rights when the board reduced his disability pension without notice or hearing.\nReversed and remanded.\nMANNING, P.J., and BUCKLEY, J., concur.", "type": "majority", "author": "JUSTICE O\u2019CONNOR" } ], "attorneys": [ "Odelson & Sterk, Ltd., of Evergreen Park (Mark H. Sterk, Burton S. Odelson, and Keri-Lyn J. Krafthefer, of counsel), for appellant.", "Puchalski, Keenan & Reimer, of Chicago (Richard J. Puchalski, of counsel), for appellees." ], "corrections": "", "head_matter": "JAMES SCHROEDER, Plaintiff-Appellant, v. MORTON GROVE POLICE PENSION BOARD et al., Defendants-Appellees.\nFirst District (1st Division)\nNo. 1\u201490\u20141297\nOpinion filed September 9, 1991.\nOdelson & Sterk, Ltd., of Evergreen Park (Mark H. Sterk, Burton S. Odelson, and Keri-Lyn J. Krafthefer, of counsel), for appellant.\nPuchalski, Keenan & Reimer, of Chicago (Richard J. Puchalski, of counsel), for appellees." }, "file_name": "0697-01", "first_page_order": 719, "last_page_order": 724 }