                                           2017 IL App (1st) 153095


                                                                                          FIRST DIVISION
                                                                       Modified Opinion filed April 10, 2017


No. 1-15-3095

BOARD OF TRUSTEES OF THE HARVEY                                 )        Appeal from the
POLICE PENSION FUND,                                            )        Circuit Court of
                                                                )        Cook County.
         Plaintiff-Appellee,                                    )
                                                                )
    v.                                                          )        No. 06 CH 15468
                                                                )
CITY OF HARVEY, an Illinois Municipal                           )
Corporation,                                                    )        Honorable
                                                                )        Kathleen M. Pantle,
          Defendant-Appellant.                                  )        Judge Presiding

          JUSTICE HARRIS delivered the judgment of the court, with opinion.
          Presiding Justice Connors 1 and Justice Simon concurred in the judgment and opinion.

                                                     OPINION

¶1        The City of Harvey appeals from a circuit court order enforcing the terms of a settlement

agreement entered into between the City of Harvey and the Board of Trustees of the Harvey

Police Pension Fund. In 2006, the Board of Trustees of the Harvey Police Pension Fund filed suit

against the City of Harvey for various violations of the Illinois Pension Code. In February 2008,

the parties entered into a settlement agreement by which the City of Harvey agreed to pay the

Harvey Police Pension Fund $551,079.83 in back property taxes the City of Harvey had

collected but failed to remit. The City of Harvey also agreed, commencing with the 2006-2007

fiscal year, to annually levy a tax upon all taxable property as required in section 3-125 of the

Illinois Pension Code. The parties agreed that the circuit court would retain jurisdiction to

enforce the agreement until the back property taxes were repaid.

1
  Justice Mikva, who was initially assigned to this case, has recused herself from any further participation in or
consideration of the case. Presiding Justice Connors has been assigned as the third panel member.
No. 1-15-3095


¶2     In December 2010, the Harvey Police Pension Fund filed a motion to compel

enforcement of the settlement agreement. It alleged the City of Harvey was failing to honor its

obligations under the settlement agreement. The City admitted it had outstanding obligations

under the settlement agreement but disputed the amount being claimed by the Harvey Police

Pension Fund. The City of Harvey filed a motion for summary judgment, alleging that the circuit

court could only enforce the provision dealing with back property taxes and not the provision

concerning the collection of taxes beginning with the 2006-2007 fiscal year. The circuit court

rejected this argument and found it could enforce the entire agreement. The court also found the

City of Harvey had failed to collect taxes beginning in 2006 but found there was a dispute as to

the amount which should have been collected.

¶3     The parties agreed to hire the actuarial firm of Foster & Foster to determine the amount

of property taxes the City of Harvey should have collected and remitted beginning in 2006. The

report was filed with the circuit court and showed what the City of Harvey should have levied

commencing in the 2006-2007 fiscal year through the 2013-2014 fiscal year. Thereafter, the City

moved for summary judgment, arguing that it owed the Harvey Police Pension Fund only the

amount listed for the 2013-2014 fiscal year and not the previous years. The circuit court rejected

this argument and entered judgment for the Pension Fund in amount of $7,334,181.88. After

additional briefing, the circuit court also awarded the Harvey Police Pension Fund attorney fees.

This timely appeal followed.

¶4     On appeal, the City of Harvey challenges the circuit court’s authority to enforce the back

property tax provision, which resulted in the majority of the money damages entered against it. It

also challenges how the circuit court calculated those damages. Finally, it challenges the award

of attorney fees in favor of the Harvey Police Pension Fund. For the reasons set forth more fully

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below, we reject the City’s arguments and affirm the judgment of the circuit court entered in

favor of the Board of Trustees of the Harvey Police Pension Fund.

¶5                                       JURISDICTION

¶6      On September 29, 2015, the circuit court entered a final judgment in favor of the Board

of Trustees of the Harvey Police Pension Fund and against the City of Harvey in the amount of

$7,334,181.88, plus $45,568.75 in attorney fees. On October 28, 2015, the City filed its notice of

appeal. Accordingly, this court has jurisdiction over this matter pursuant to Article VI, Section 6 of

the Illinois Constitution, and Illinois Supreme Court Rules 301 and 303. Ill. Const. 1970, art. VI,

§ 6; Ill. S. Ct. R. 301 (eff. Feb. 1, 1994); Ill. S. Ct. R. 303 (eff. May 30, 2008).

¶7                                        BACKGROUND

¶8      This action stems from a settlement agreement entered into by Plaintiff-Appellee, Board

of Trustees of the Harvey Police Pension Board (hereinafter “the Pension Fund”), and

Defendant-Appellant, the City of Harvey (hereinafter “the City”). On August 2, 2006, the

Pension Fund filed a complaint against the City, seeking a declaratory judgment that the City

failed to levy a tax pursuant to section 3-125 of the Illinois Pension Code. On February 2, 2008,

the parties entered into a settlement agreement (hereinafter “the Settlement Agreement”), and on

February 19, 2008, the case was dismissed.

¶9      Under the terms of the Settlement Agreement, the City agreed to pay the Pension Fund

the sum of $551,079.83 as payment for property taxes levied and received by the City and not

remitted to the Pension Fund. The City also agreed to pay $6,404.21 in attorney fees. The

Settlement Agreement required the City to pay the Pension Fund $50,000 per month until the

sum of $551,079.83 was repaid. Additionally, pursuant to the Settlement Agreement, the City

agreed that beginning in the fiscal year 2006-2007, “the City shall annually levy a tax upon all

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taxable property of the City, as required in Section 3-125 of the Illinois Pension Code.” Finally,

the parties agreed that the circuit court would retain jurisdiction over the action for the purpose

of enforcing the agreement “only until the City has re-paid the Pension Fund the sum owed to it

under section A(1) of this agreement, including the attorney’s fees provided herein.”

¶ 10   On December 6, 2010, the Pension Fund filed a motion to compel enforcement of the

Settlement Agreement, alleging that the City had failed and refused to perform its obligations

under it. The motion to compel alleged that the City failed to remit approximately $494,005.84 to

the Pension Fund. On May 24, 2011, the City filed its response to the motion to compel,

admitting it owed money to the Pension Fund but denying it was the amount stated in the motion.

On May 31, 2011, the circuit court granted the Pension Fund’s motion to compel and ordered an

accounting in order to determine the exact amount owed by the City to the Pension Fund.

¶ 11   Thereafter, both parties moved for cross-summary judgment on the amount owed to the

Pension Fund. In moving for summary judgment, the City asserted, pursuant to the 2008

Settlement Agreement, the circuit court only had the authority to order the City to pay the

outstanding balance owed pursuant to section A(1) of the Settlement Agreement. Based on this

argument, the City asserted it owed only $227,812.23. The Pension Fund disagreed and asserted

in its motion for summary judgment that the City owed it money under both A(1) and A(8) of the

Settlement Agreement. The Pension Fund claimed it was entitled to $1,312,750.84. The circuit

court agreed with the Pension Fund that the City was liable under both A(1) and A(8) of the

Settlement Agreement and entered judgment in the Pension Fund’s favor on this issue. However,

the circuit court concluded there was a genuine issue of material fact as to the damages owed

under those sections, and reserved ruling on the damages issue.



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¶ 12   On June 10, 2014, the parties appeared before the circuit court and jointly agreed to hire

the actuary firm of Foster & Forster to determine the amount owed by the City. Jason Franken of

Foster & Foster performed the required actuarial calculations and issued his report (hereinafter

“the Franken Report”) on December 2, 2014. The Franken Report included a detailed actuarial

calculation of the tax levies the City should have made for each fiscal year from May 1, 2006

through April 30, 2014, as required under section A(8) of the Settlement Agreement. The

Franken Report stated that it was compiled using the calculations prescribed in the Illinois

Pension Code. The report also included the change in the Pension Code that became effective for

the May 1, 2011 fiscal year.

¶ 13   Following the issuance of the Franken Report, the City again moved for summary

judgment. In its summary judgment motion, the City argued that, pursuant to section 3-125 of the

Illinois Pension Code, the current year’s annual actuarial valuation included all amounts due to

the Pension Fund. According to this argument, the City would owe only the amount listed in the

Franken Report for the 2013-2014 year. In its response, the Pension Fund attached a letter from

Jason Franken, explaining that each fiscal year levy detailed in the Franken Report reflected the

amount the City should have collected for that year and the calculations for each successive levy

were not cumulative or inclusive of the amount which should have been collected in the previous

year. In its reply brief, the City did not challenge the levy calculation, but argued that under the

plain meaning of section 3-125 “the most recent actuarial valuation comprises the City’s total

financial obligation to the Pension Board because the valuation takes into account past liabilities

and underfunding.”

¶ 14   After hearing oral arguments from each side, the circuit court issued an order on April 3,

2015, which found that the Pension Fund was entitled to the remaining balance owed under

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section A(1) of the Settlement Agreement and prior years’ levies detailed in the Franken Report.

Thus, the circuit court entered judgment in the amount of $7,334,181.88 in favor of the Pension

Fund. The parties then briefed the issue of attorney fees and, in an order dated August 31, 2015,

the circuit court found, pursuant to the Settlement Agreement, that the Pension Fund was entitled

to $38,636.25 in attorney fees. The City moved to reconsider the April 3 order, but the motion

was denied on September 29, 2015. This timely appealed followed.

¶ 15                                        ANALYSIS

¶ 16   The City raises three issues on appeal: (1) whether the circuit court had the jurisdiction to

enter a damages award beyond the breach of section A(1) of the Settlement Agreement; (2)

whether the circuit court erred in granting the Pension Fund damages pursuant to section A(8) of

the Settlement Agreement; and (3) whether the circuit court erred in awarding attorney fees to

the Pension Fund.

¶ 17   On the first issue the City raises before this court, it argues that, pursuant to the

Settlement Agreement, the circuit court only has jurisdiction to enforce section A(1). Before the

circuit court, the City argued that the court only had jurisdiction to enforce section A(1) (and not

A(8)) based on the jurisdictional language found in section B(5) of the Settlement Agreement.

The circuit court rejected this argument and found it could enforce the entire Settlement

Agreement, including section A(8). Whether or not a circuit court has subject-matter jurisdiction

is an issue this court reviews de novo. In re Estate of Ahern, 359 Ill. App. 3d 805, 809 (2005).

Subject-matter jurisdiction refers to the court’s power both to adjudicate the general issues

involved and to grant the particular relief requested. In Estate of Gebis, 186 Ill. 2d 188, 192

(1999). If the court acts to resolve questions or provide relief beyond its jurisdiction, its orders

are void. Ahern, 359 Ill. App. 3d at 809.

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¶ 18   After 30 days have elapsed from the entry of a final judgment, a trial court lacks

jurisdiction to amend or modify the judgment. Director of Insurance v. A&A Midwest

Rebuilders, Inc., 383 Ill. App. 3d 721, 722 (2008). However, an Illinois trial court possesses the

power to retain jurisdiction to enforce a settlement agreement. Id. at 723. The intent of the trial

court to retain jurisdiction may be found in an express statement of retained jurisdiction. Id. at

725. An agreement to settle litigation is considered a contract, and general contract rules will

apply. Rose v. Mavrakis, 343 Ill. App. 3d 1086, 1090 (2003). “It is well settled that when parties

agree to and insert language into a contract, the presumption is that it was done purposefully and

the language employed is to be given effect.” Fidelity National Title Insurance Co. of New York

v. Westhaven Properties Partnership, 386 Ill. App. 3d 201, 215 (2007).

¶ 19   In this case, both the Settlement Agreement and the order of dismissal entered on

February 19, 2008 expressly stated that the circuit court retained jurisdiction to enforce the

Settlement Agreement. Section B(5) of the Settlement Agreement provides: “The parties agree

that the Circuit Court of Cook County, Chancery Division, shall retain jurisdiction over this

action for the purposes of enforcing the terms of this Agreement only until the City has re-paid

the Pension Fund the sum owed to it under section A(1) of this agreement, including the

attorney’s fees provided therein.” Additionally, the February 2008 order dismissing the case

pursuant to the Settlement Agreement provides: “The parties request that the Court retain

jurisdiction of this case for the sole purpose of enforcing the terms of the settlement agreement.”

¶ 20   Based on the Settlement Agreement language and the February 2008 order, the circuit

court did not err when it determined it had the jurisdiction to enforce the Settlement Agreement.

The Settlement Agreement states that the parties agree that the circuit court should retain

jurisdiction “to enforce the terms of the Agreement until the City has re-paid the Pension Fund

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the sum owed to it under section A(1) of this agreement, including the attorney’s fees provided

therein.” Based on the language agreed to by the Pension Fund and the City, the circuit court’s

jurisdiction would terminate only when both the sum under section A(1) and the attorney fees

were paid. The City admitted both to the circuit court and this court that when the Pension Fund

filed its motion to compel, the entire amount due under A(1) had not been paid. Accordingly, the

condition divesting the circuit court of jurisdiction had not occurred and the circuit court had

jurisdiction to hear the Pension Fund’s motion to compel enforcement of the Settlement

Agreement.

¶ 21   The Settlement Agreement contains no language limiting the enforcement authority of

the court to only certain sections. The February 2008 dismissal order specifically incorporates

the parties’ Settlement Agreement for the “purpose of enforcing the terms of the settlement

agreement.” The order does not contain language limiting the circuit court’s authority to only

enforce certain provisions. The language in both the Settlement Agreement and the February

2008 order expressly grants the circuit court the authority to enforce “the Agreement” and the

“terms of the Settlement Agreement.” Accordingly, the City’s argument that somehow the

language in the Settlement Agreement limited the circuit court’s authority to only enforcing

section A(1) and not A(8) has no merit.

¶ 22   The City next argues that the circuit court erred in ordering it to pay $7,033,648, which

the circuit court found to be the combined sum of the yearly taxes the City should have levied to

meet its obligations under section A(8) of the Settlement Agreement. On appeal, the City argues

that the circuit court erred in awarding this amount because such an award is contrary to its

obligation under section 5/3-125. In response, the Pension Fund asserts that circuit court's order



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is correct in its findings regarding the amount owed, because the City's obligation was controlled

by the Settlement Agreement and not section 5/3-125.

¶ 23   Based on our review of the record, we conclude the City's argument lacks merit and the

circuit court did not commit any error in awarding the Pension Fund $7,033,648 in damages.

"Settlement agreements are encouraged and should be given their full force and effect." M.H.

Detrick Co. v. Century Indem. Co., 299 Ill. App. 3d 620, 624 (1998). "A settlement agreement is

a contract, and the construction and enforcement of settlement agreements are governed by

principles of contract law. The intent of the parties must be determined from the plain and

ordinary meaning of the language of the contract, unless the contract is ambiguous." Law Offices

of Colleen M. McLaughlin v. First Star Fin. Corp., 2011 IL App (1st) 101849, ¶ 18 (internal

citations omitted). The Settlement Agreement entered into between the Pension Fund and City

provided at paragraph A(3):

       "The City agrees that in the future, any property taxes or personal property
       replacement taxes levied and received by the City on behalf of the Harvey Police
       Pension Fund which are assessed, collected and remitted to the City by the Cook
       County Treasurer's, Collector's office, and/or the Illinois Department of Revenue
       shall be paid to the Pension Fund, within thirty (30) days of the receipt by the
       City."

Paragraph A(8) provided:

       "Commencing with fiscal year 2006/2007, and continuing thereafter, the City
       shall annually levy a tax upon all taxable property of the City, as required in §
       5/3-125 of the Illinois Pension Code. The amount of tax levy shall be determined
       by an enrolled actuary employed by the Illinois Department of Insurance or by an
       enrolled actuary retained by the Pension Fund. The City agrees to accept the
       actuarial evaluation for the purpose of the annual tax levy completed by either the
       enrolled actuary employed by the Department of Insurance or the enrolled actuary
       retained by the Pension Fund."

When read it conjunction with each other, it is clear that paragraph A(8) required the City to levy

a tax each fiscal year beginning with the 2006/2007 fiscal year and paragraph A(3) required the

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City to pay that tax money to the Pension Fund within 30 days. The City's argument that

"paragraph A-8 did not require the City to pay the pension Fund the amount of the levy," is

therefore contrary to the plain language of the Settlement Agreement. Equally important, the

City agreed to accept the actuarial evaluation of either an actuary employed by the Illinois

Department of Insurance or by an enrolled actuary retained by the Pension Fund for the purpose

of calculating the annual tax levy. Based on this settlement language, regardless of how section

5/3-125 would normally require a municipal entity to calculate its obligation, the City agreed to

make a levy each year beginning with the 2006/2007 fiscal year, that such levy would be

determined by either an enrolled actuary employed by the Illinois Department of Insurance or by

an enrolled actuary retained by the Pension Fund, and those funds would be forward to the

Pension Fund within 30 days of the City receiving them.

¶ 24   In an order dated, June 10, 2014, the parties agreed to hire Foster & Foster to "determine

the amount owed by the defendant to the Harvey Police Pension Fund." Eventually, Jason

Franken, an actuary of Foster & Foster, produced what the parties refer to as the "Franken

Report." After receiving this report, the Pension Fund supplied the circuit court with an affidavit

from Jason Franken which explained that he calculated the tax levy which should have been

levied, assessed, and collected by the City for each fiscal year between the 2006/2007 tax levy

year and the 2013/2014 tax levy year. He further stated that the expected City contribution for

each successive year was not cumulative or inclusive of the prior year's amount. Because the

amounts were not cumulative, the City's damages to the Board were based on adding up each

missed year. The City did not file any type of counter affidavit or seek to depose Franken. In

fact, at a hearing on the summary judgment motions, the defendant's attorney stated "we agreed

that we would be bound by those calculations."

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¶ 25   Based on the language in the Settlement Agreement, the Franken Report, and the Franken

affidavit, we conclude that the circuit court did not err in entering summary judgment for the

Pension Fund. While section 5/3-125 may normally provide the method for a municipality to

calculate its pension obligation; by entering into the Settlement Agreement, the City agreed to

calculate its obligation in conformity with paragraphs A(3) and A(8). In entering judgment

against the City, the circuit court was merely enforcing the City's contractual obligations under

the Settlement Agreement.

¶ 26   Finally, the City argues that the circuit court erred in awarding the Pension Fund attorney

fees because it exceeded its jurisdictional authority under the terms of the Settlement Agreement.

As discussed above, the circuit court did not exceed its jurisdictional authority in enforcing the

Settlement Agreement. Accordingly, we reject this argument and affirm the award of attorney

fees in favor of the Pension Fund.

¶ 27                                    CONCLUSION

¶ 28   Based on the above, we affirm the circuit court’s entry of judgment in favor of the Board of

Trustees of the Harvey Police Pension Fund.

¶ 29   Affirmed.




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