{ "id": 5730469, "name": "COMMUNITY UNIT SCHOOL DISTRICT 200, Plaintiff-Appellant, v. ILLINOIS INSURANCE GUARANTY FUND, Defendant-Appellee", "name_abbreviation": "Community Unit School District 200 v. Illinois Insurance Guaranty Fund", "decision_date": "2005-07-06", "docket_number": "No. 2-04-0915", "first_page": "1056", "last_page": "1063", "citations": [ { "type": "official", "cite": "358 Ill. App. 3d 1056" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "8 Ill. 2d 382", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2716778 ], "year": 1956, "pin_cites": [ { "page": "387", "parenthetical": "taxes are levied to defray the expenses of government and an unnecessary accumulation of money in the public treasury is unjust, impolitic, and against public policy" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/8/0382-01" ] }, { "cite": "28 Ill. Reg. 11699", "category": "laws:admin_register", "reporter": "Ill. Reg.", "pin_cites": [ { "parenthetical": "eff. July 29, 2004" } ], "opinion_index": 0 }, { "cite": "158 Ill. 2d 76", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 780263 ], "year": 1994, "pin_cites": [ { "page": "81" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/158/0076-01" ] }, { "cite": "193 Ill. 2d 455", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 963718 ], "weight": 2, "year": 2000, "pin_cites": [ { "page": "466" }, { "page": "466" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/193/0455-01" ] }, { "cite": "199 Ill. 2d 16", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 58955 ], "year": 2002, "pin_cites": [ { "page": "22" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/199/0016-01" ] }, { "cite": "160 Ill. App. 3d 444", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3649107 ], "year": 1987, "pin_cites": [ { "page": "452", "parenthetical": "defining net worth as \"total assets minus total liabilities\"" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/160/0444-01" ] }, { "cite": "188 Ill. App. 3d 936", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2692517 ], "year": 1989, "pin_cites": [ { "page": "945" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/188/0936-01" ] }, { "cite": "152 Ill. App. 3d 792", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3574446 ], "year": 1987, "pin_cites": [ { "page": "798" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/152/0792-01" ] }, { "cite": "227 Ill. App. 3d 772", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5796556 ], "year": 1992, "pin_cites": [ { "page": "775-76" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/227/0772-01" ] }, { "cite": "154 Ill. 2d 90", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 4820940 ], "year": 1992, "pin_cites": [ { "page": "102" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/154/0090-01" ] }, { "cite": "846 A.2d 167", "category": "reporters:state_regional", "reporter": "A.2d", "case_ids": [ 9252542 ], "year": 2004, "opinion_index": 0, "case_paths": [ "/a2d/846/0167-01" ] }, { "cite": "355 Ill. App. 3d 1", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3599911 ], "year": 2004, "pin_cites": [ { "page": "6" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/355/0001-01" ] } ], "analysis": { "cardinality": 880, "char_count": 19077, "ocr_confidence": 0.742, "pagerank": { "raw": 5.6809432255894035e-08, "percentile": 0.3575644757667339 }, "sha256": "94095a9d03d1300a2e04c391130d60f32cfa621cee192873793e7f514b2f00b4", "simhash": "1:98ac53a2010d3de4", "word_count": 3088 }, "last_updated": "2023-07-14T22:37:08.387494+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "COMMUNITY UNIT SCHOOL DISTRICT 200, Plaintiff-Appellant, v. ILLINOIS INSURANCE GUARANTY FUND, Defendant-Appellee." ], "opinions": [ { "text": "JUSTICE GROMETER\ndelivered the opinion of the court:\nThe General Assembly created the Illinois Insurance Guaranty Fund (the Fund) to assume the obligations of insolvent insurance companies. Community Unit School District No. 200 (the District) saw its workers\u2019 compensation insurer declared insolvent. It thereafter submitted three pending workers\u2019 compensation claims to the Fund for payment. The Fund declined coverage, citing a statutory provision that an entity with a net worth of more than $25 million was not entitled to coverage. The District sued the Fund, claiming that it wrongfully refused to pay the claims. The trial court granted the Fund summary judgment, and the District appeals.\nThe District raises a number of distinct issues, but they can be summarized as follows: (1) the generic definition of net worth as assets minus liabilities is unworkable when applied to a public school district; and (2) the trial court erred in determining that the District\u2019s net worth exceeds $25 million. We disagree and affirm.\nThe District operates 22 facilities in the Wheaton-Warrenville area. As the School Code (105 ILCS 5/1 \u2014 1 et seq. (West 2002)) requires, the District maintains a system of distinct funds, each designated for a particular purpose. Its two general funds are the Education Fund and the Operations and Maintenance Fund. As of December 31, 2000, the Education Fund had a balance of $20,320,139. The District also maintained a Working Cash Fund with a balance of about $9 million. The total of the District\u2019s funds was $54,774,951.\nIn 2001, the District obtained workers\u2019 compensation insurance through Reliance Insurance Company. On October 3, 2001, the Commonwealth Court of Pennsylvania ordered Reliance into liquidation. See Argonaut Insurance Co. v. Safway Steel Products, Inc., 355 Ill. App. 3d 1, 6 (2004); see also Koken v. Reliance Insurance Co., 846 A.2d 167 (Pa. Commw. Ct. 2004). At about this time, three workers\u2019 compensation claims were filed against the District. The parties apparently agree that the claims will eventually total about $100,000. The District submitted them to the Fund for payment.\nThe Fund initially rejected the claims because the District had not provided an affidavit of net worth. The District resubmitted the claims with a letter from its attorney stating its position that the $25 million net-worth provision did not apply to public entities. However, the District also submitted audited financial statements. Allen Schmelter, the Fund\u2019s controller, reviewed the financial statements and concluded that the District\u2019s net worth was $243,714,243. Accordingly, the Fund again rejected the District\u2019s claims.\nThe District then filed this action, seeking a declaration that the Fund had to provide coverage for the claims. During discovery, M. Bert Neuhring, an expert retained by the Fund, examined the district\u2019s financial statements and concluded that, as of December 31, 2000, the District\u2019s net worth was approximately $86 million. The District\u2019s expert, Timothy Cole, testified at a deposition that the \u201ccommon, ordinary understanding of net worth was assets minus liabilities.\u201d Nevertheless, Cole opined that only the District\u2019s Education Fund should be considered in calculating the District\u2019s net worth, because only that fund could be used for any purpose. Cole conceded that the District had full discretion to transfer money from the Working Cash Fund to the Education Fund, where it could be used for \u201cany legal purpose.\u201d If the Working Cash Fund were added to the Education Fund, the District\u2019s discretionary funds alone would exceed the $25 million limit.\nThe parties thereafter filed cross-motions for summary judgment. The trial court granted the Fund\u2019s motion, finding that the District\u2019s net worth exceeded $25 million. The court observed that the legislature had made no provision for excluding \u201callocated funds\u201d and that applying the net-worth limit here was consistent with the statutory purpose of preserving the Fund\u2019s assets for smaller entities, which most needed them. The District timely appealed.\nSummary judgment is proper when the pleadings, depositions, and affidavits demonstrate that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2 \u2014 1005(c) (West 2002). We review de novo an order granting summary judgment. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992).\nA brief overview of the statute creating the Fund is necessary to understand the issues. The legislature created the Fund (215 ILCS 5/535 (West 2002)) to \u201cprovide a mechanism for the payment of covered claims under certain insurance policies, to avoid excessive delay in payment, [and] to avoid financial loss to claimants of policyholders because of the entry of an Order of Liquidation\u201d against an insolvent insurance company (215 ILCS 5/532 (West 2002)). The Fund\u2019s purposes are to protect the public from losses caused by insolvent insurance companies and to place claimants in the same position they would have been in had their insurance carriers not been declared insolvent. Urban v. Loham, 227 Ill. App. 3d 772, 775-76 (1992). The Fund is to pay covered claims that exist before the entry of an order of liquidation or that arise within 30 days thereafter. 215 ILCS 5/537.2 (West 2002). A covered claim is \u201can unpaid claim for a loss arising out of and within the coverage of an insurance policy\u201d to which the statute applies and that is in force at the time of the occurrence giving rise to the claim. 215 ILCS 5/534.3(a) (West 2002). However, a covered claim does not include a claim against an insured whose net worth exceeded $25 million on December 31 of the year before the claim arose. The insured\u2019s net worth includes \u201cthe aggregate net worth of the insured and all of its affiliates as calculated on a consolidated basis.\u201d 215 ILCS 5/534.3(b)(iv) (West 2002).\nThe statute does not define \u201cnet worth\u201d or \u201caggregate net worth.\u201d As the Fund points out, when a statute does not define a term, we should give the term its commonly understood meaning. People ex rel. Foreman v. Estate of Kawa, 152 Ill. App. 3d 792, 798 (1987). \u201cNet worth\u201d is commonly defined as \u201c[a] measure of one\u2019s wealth, usu. calculated as the excess of total assets over total liabilities.\u201d Black\u2019s Law Dictionary 1062 (7th ed. 1999); see Central Bank-Granite City v. Ziaee, 188 Ill. App. 3d 936, 945 (1989), quoting Black\u2019s Law Dictionary 939 (5th ed. 1979) (\u201c \u2018[Remainder after deduction of liabilities from assets\u2019 \u201d); Potter v. Potter, 160 Ill. App. 3d 444, 452 (1987) (defining net worth as \u201ctotal assets minus total liabilities\u201d). The District insists, however, that this \u201csimplistic\u201d definition is unworkable when applied to a public school district. The District makes several related arguments in support of this contention.\nThe District first contends that the School Code (105 ILCS 5/1 \u2014 1 et seq. (West 2002)) rigidly controls how the District manages its finances, requiring it to maintain separate funds to be used for limited purposes. See 105 ILCS 5/17 \u2014 8 (West 2002) (\u201cAny transportation operating costs incurred for transporting pupils to and from school and school sponsored activities and the costs of acquiring equipment shall be paid from a transportation fund ***\u201d). The District contends that these statutory restrictions on the use of its funds mean that the funds should not be considered assets in calculating its net worth. Second, the District argues that other statutes and administrative regulations exclude certain encumbered funds from being defined as assets. The District argues that its specific funds are similarly encumbered and thus should not he counted as assets in determining its net worth. Finally, the District contends that \u201cIllinois law and public policy\u201d prevent considering as assets property that the District acquired through taxation.\nThe simple answer to all of these contentions is that the plain language of the statute simply does not support them. Our principal duty in construing a statute is to give effect to the legislature\u2019s intent. Carroll v. Paddock, 199 Ill. 2d 16, 22 (2002). The best evidence of this intent is the language of the statute itself, and that language must be given its plain and ordinary meaning. Lulay v. Lulay, 193 Ill. 2d 455, 466 (2000). We may not, under the guise of statutory construction, add exceptions, limitations, or conditions that the legislature did not express. Solich v. George & Anna Portes Cancer Prevention Center of Chicago, Inc., 158 Ill. 2d 76, 81 (1994).\nHere, the statute\u2019s plain language refers to an entity\u2019s net worth. Nothing in the statute indicates that, by using the term \u201cnet worth,\u201d the legislature meant anything other than the commonly understood meaning of the term. The statute does not contain an exception for public entities or provide for excluding any assets from the calculation of net worth. In fact, by referring to \u201cthe aggregate net worth of the insured and all of its affiliates as calculated on a consolidated basis\u201d (215 ILCS 5/534.3(b)(iv) (West 2002)), the legislature appears to be mandating the consideration of a broad, rather than a narrow, range of assets in determining an entity\u2019s net worth.\nThe District\u2019s specific arguments to the contrary are unfounded. The District\u2019s first contention, that legislative restrictions on the use of money in its special funds means they cannot be considered assets of the District, is untenable. Initially, the District cites no authority for this contention. Virtually any entity could argue that most of its assets are not available for discretionary spending. A family may have money in individual retirement accounts or in a child\u2019s college fund. Shareholders of a closely held corporation may face severe restrictions on their ability to sell the corporation\u2019s stock. A company may hold money in a payroll account, or merely for paying bills as they become due. That does not mean that these funds are not \u201cassets.\u201d Of course, to the extent that \u201cbills\u201d represent specific obligations, they are liabilities, which are properly deducted from the value of assets in calculating net worth. However, the District does not argue that the legislative restrictions on the use of some of its funds represent specific obligations that could be considered liabilities. Merely because the District cannot spend the money in these funds any way it wants does not mean that the funds are not its assets.\nThe District next cites particular statutory or regulatory provisions that provide for excluding \u201cencumbered\u201d assets from net worth. Generally, these provisions apply in very specific factual contexts and are not applicable here. For example, the District cites a regulation that defines the net worth of credit unions to exclude their \u201cAllowance for Loan Losses Accounts.\u201d 38 Ill. Adm. Code \u00a7 190.165(a)(3), as amended by 28 Ill. Reg. 11699 (eff. July 29, 2004). Obviously, this provision does not apply here. The District is not a credit union. It does not contend that it has an \u201cAllowance for Loan Losses\u201d account or that it is required to maintain one. Thus, even if this provision applied to the District, it would result in a deduction of $0 from its net worth.\nThe District also cites section 221.1(b)(6) of the Insurance Code, which provides that the \u201cgeneral assets\u201d of an insurance company include:\n\u201call property, real or personal, not specifically mortgaged, pledged, deposited as security or otherwise encumbered, and as to such specifically encumbered property the term includes all in excess of the amount necessary to discharge the sum or sums secured.\u201d 215 ILCS 5/221.1(b)(6) (West 2002).\nThis definition is consistent with the common definition of net worth. To say that an asset is \u201cencumbered\u201d is another way of saying that there is a specific liability attributable to that asset. See Merriam-Webster\u2019s Collegiate Dictionary 380 (10th ed. 2001) (defining \u201cencumber\u201d as \u201cto burden with a legal claim (as a mortgage)\u201d). Thus, the value of the asset is reduced by the amount of the encumbrance, as in calculating the net equity in a home. However, the statute allows a deduction only for \u201cspecifically encumbered\u201d property. It also provides that any value of the asset above the amount of the encumbrance must be counted as an asset. Here, as noted, the District does not contend that any specific spending obligations are attributable to any of its funds. Mere general restrictions on use are not encumbrances or liabilities.\nThe District finally asserts that none of its funds or real property can be considered assets, because taxing entities such as itself \u201conly have the authority to levy taxes to pay for the expenses of government, and not to accumulate funds for indefinite purposes or the enrichment of the public treasury.\u201d See People ex rel. Kramer v. Chicago, Burlington & Quincy R.R. Co., 8 Ill. 2d 382, 387 (1956) (taxes are levied to defray the expenses of government and an unnecessary accumulation of money in the public treasury is unjust, impolitic, and against public policy).\nThe District\u2019s argument is difficult to follow. The effect of the Fund\u2019s decision to exclude coverage will not be to force the District to needlessly accumulate wealth. Rather, the District will merely have to reimburse its employees who were injured on the job. Compensating injured employees is certainly a legitimate \u201cexpense[ ] of government.\u201d Simply because the District must use its funds for legitimate government purposes and not to accumulate wealth does not mean that the funds are not assets.\nThe District\u2019s second major contention is that the trial court erred in concluding that the District\u2019s net worth exceeds $25 million. The District argues that the calculation of its net worth should have included only the value of its Education Fund, which, according to the District, is the only fund available to pay the claims at issue. This argument largely overlaps the District\u2019s first contention. It, too, rests on the premise that the trial court erred in counting the District\u2019s various restricted-use funds as assets. Accordingly, much of what we said in connection with the District\u2019s first argument applies here as well.\nPut simply, the statute creating the Fund does not allow an entity to selectively count its assets. Specifically, the statute does not provide for omitting resources that have been segregated for use for a particular purpose, as are many of the District\u2019s funds. In interpreting a statute, we are restricted to giving its unambiguous terms their plain and ordinary meaning. Lulay, 193 Ill. 2d at 466.\nWe note that the District cites no authority for its argument that only the Education Fund may be considered an asset, save for a reference to its earlier discussion of section 221.1(b)(6) of the Insurance Code. We have already rejected the argument that section 221.1(b)(6) mandates the conclusion that the District\u2019s special use funds are not assets.\nThe District further argues that the value of its physical facilities and real property should not have been included in the calculation of its net worth. We need not really decide this question because, as the Fund points out, and as we demonstrate below, the District clearly has more than $25 million in assets available for discretionary spending, even if its real property and other tangible assets are excluded.\nIn addition to the Education Fund, the District maintains a Working Cash Fund. As of the relevant date, this fund contained more than $9 million. The School Code provides that such a fund is to be used \u201cto provide moneys with which to meet ordinary and necessary disbursements for salaries and other school purposes.\u201d 105 ILCS 5/20 \u2014 4 (West 2002). The District\u2019s expert, Tim Cole, admitted that the District had the discretion to transfer money from the Working Cash Fund to the Education Fund. See 105 ILCS 5/20 \u2014 5 (West 2002). He further admitted that, if the funds were combined, the District\u2019s discretionary assets would exceed $25 million.\nThe District points out that section 20 \u2014 4 also provides that the Working Cash Fund \u201cshall not be regarded as current assets available for school purposes.\u201d 105 ILCS 5/20 \u2014 4 (West 2002). However, we agree with the Fund that this designation is inconsequential where the District has full authority to transfer money from the Working Cash Fund to the Education Fund. The payment of the claims at issue here appears to be precisely the type of expense for which the Working Cash Fund may be used. Thus, while the fund is not to be considered an asset \u201cfor school purposes,\u201d nothing prevents it from being considered an asset for purposes of calculating the District\u2019s net worth in seeking payment of its claims from the Fund.\nMoreover, if we interpret section 20 \u2014 4 as the District suggests, then the District has another problem. The District does not cite similar language preventing any of its other funds from being considered as assets. The presence of this language in section 20 \u2014 4 shows that the legislature knew how to exclude certain items from the calculation of \u201cassets.\u201d The absence of such language relating to the District\u2019s other funds shows that the legislature intended for them to be considered assets of the District. The District acknowledges that its various funds totaled more than $56 million. Even excluding the Working Cash Fund would leave it with well in excess of $25 million in assets.\nWe note in passing that, although the District argues that its real property should not be considered \u201cassets,\u201d its financial statement, which is attached to the complaint as an exhibit, lists buildings and improvements under the heading \u201cFixed Assets.\u201d The report shows that the District has total fixed assets of $204,903,120 and, allowing for depreciation, net fixed assets of $135,045,924.\nFinally, the District argues that the trial court erred in concluding that the Fund\u2019s refusal to cover the District\u2019s claims furthered the policy behind the Fund. We need not reach this issue because we review only the trial court\u2019s judgment, not its reasoning. Because the trial court correctly applied the plain language of the statute, its statements about public policy are irrelevant.\nThe judgment of the circuit court of Du Page County is affirmed.\nAffirmed.\nMcLaren and HUTCHINSON, JJ., concur.\nThe District does not assert in its brief what percentage of its funds is derived from taxation, as opposed to private donations, investments, or other sources. However, we will assume for the sake of argument that the vast majority of the District\u2019s funds comes from taxation.", "type": "majority", "author": "JUSTICE GROMETER" } ], "attorneys": [ "John A. Relias and Dana Fattore Crumley, both of Franczek Sullivan, EC., of Chicago, for appellant.", "Rowe W Snider, Joseph A. Hinkhouse, and Sarah H. Dearing, all of Lord, Bissell & Brook, L.L.P., of Chicago, for appellee." ], "corrections": "", "head_matter": "COMMUNITY UNIT SCHOOL DISTRICT 200, Plaintiff-Appellant, v. ILLINOIS INSURANCE GUARANTY FUND, Defendant-Appellee.\nSecond District\nNo. 2\u201404\u20140915\nOpinion filed July 6, 2005.\nJohn A. Relias and Dana Fattore Crumley, both of Franczek Sullivan, EC., of Chicago, for appellant.\nRowe W Snider, Joseph A. Hinkhouse, and Sarah H. Dearing, all of Lord, Bissell & Brook, L.L.P., of Chicago, for appellee." }, "file_name": "1056-01", "first_page_order": 1074, "last_page_order": 1081 }