Disabato v. Board of Trustees of the State Employees' Retirement System ( 1996 )

THIRD DIVISION
December 6, 1996
1-94-3649
COLUMBUS DISABATO, DONALD JOHNSON, ) Appeal from
GERALD W. JACKSON, JOHN KUCERA, ) the Circuit Court
STANLEY SHANTER, GEORGE MARCHOUS, ) Cook County
VERNON LOWE, WILLIAM KOUNTIS, )
RAYMOND WOOD, C. PANAGAKIS, )
LAWRENCE JOHNSON, RICHARD HANSEN, )
EDWARD FOLEY, JERRY HARDEN, )
WAYNE MISFELDT, JAMES THOMPSON, )
JAMES ESNER, CARMEN SARACCO, )
ROBERT CADWELL, ROBERT LEDEN, )
T. PLADIS and FRANKLIN WALKER )
)
Plaintiffs-Appellants, )
)
v. )
)
THE BOARD OF TRUSTEES OF THE )
STATE EMPLOYEES' RETIREMENT SYSTEM )
OF ILLINOIS and MICHAEL L. MORY, )
EXECUTIVE SECRETARY, ) The Honorable
) Edwin M. Berman,
Defendants-Appellees. ) Judge Presiding.
Justice Leavitt delivered the opinion of the Court:
The plaintiffs were Secretary of State investigators,
appointed pursuant to section 2-115 of the Illinois Vehicle Code.
625 ILCS 5/2-115 (West 1994). As state employees, they were
"members" of the State Employees' Retirement System (SERS) (see
40 ILCS 5/14-103.06 (West 1994), which provides retirement
benefits to a wide variety of state employees under the larger
aegis of the Illinois Pension Code. See 40 ILCS 5/1-101 to 5/18-
101. The plaintiffs believe that the statutory scheme by which
their retirement benefits are calculated is discriminatory, and
they sought to have their benefits recalculated. They now seek
administrative review of a decision by the defendant, the Board
of Trustees of SERS (the Board), denying their claims.
In 1992, after all of the plaintiffs had retired, they sent
letters to the Assistant Executive Secretary of SERS protesting
the method by which their retirement benefits were calculated.
As with all members of SERS, the plaintiffs' retirement benefits
are calculated as a percentage of their "final average
compensation." See 40 ILCS 5/14-109, 5/14-110. Section 14-
103.12(a) of the Code defines final average compensation for most
state employees, including the plaintiffs, as:
"the monthly compensation obtained by dividing the
total compensation of an employee during the period of:
(1) the 48 consecutive months of service within the
last 120 months of service in which the total
compensation was the highest, or (2) the total period
of service, if less than 48 months, by the number of
months of service in such period." 40 ILCS 5/14-
103.12(a).
The plaintiffs asked SERS to recalculate their retirement
benefits pursuant to a 1989 amendment to section 14-103.12 which
altered the basis for calculating the final average compensation
of certain State police officers:
"Notwithstanding the provisions of subsection (a),
for the purpose of calculating retirement and survivor
annuities of persons with at least 20 years of eligible
creditable service as a State policeman, 'final average
compensation' means the monthly rate of compensation
received by the person on the last day of service as a
State policeman, or the average monthly compensation
received by the person for the last 48 months of
service prior to retirement, whichever is greater." 40
ILCS 5/14-103.12(c).
The plaintiffs believed that they served the same functions as
State policemen and should, therefore, receive similar benefits.
They contended that to deny them the benefit of section 14-
103.12(c) was arbitrary and discriminatory.
In November 1992, the Executive Committee of SERS (SERS
Committee) denied the request for a recalculation. The SERS
Committee's ruling denying the plaintiffs' claims notes, as to
each plaintiff, that his claim is premised upon the ground that
section 14-103.12 is "arbitrary and discriminatory." The ruling
then states, as to each plaintiff, "This appeal is similar to the
Russell Watier case, which is currently waiting to be heard in
the circuit court." Russell Watier is not a plaintiff in this
case. The record before us contains nothing indicating what
occurred in that matter. In any event, the SERS Committee denied
each plaintiff's claim "based upon the statutory provisions
(section 14-103.12) governing the calculation of the final
average compensation." In January 1993, the Board ratified the
decision of the SERS Committee.
Subsequently, the plaintiffs filed complaints in the circuit
court, later consolidated, seeking review of the Board's decision
pursuant to the Administrative Review Law. 735 ILCS 5/3-101 et
seq. (West 1992). They also sought a declaratory judgment that
section 14-103.12(c) is unconstitutional because they believed
the distinction between them and State police officers denied
them their rights to equal protection of the laws under both
Federal and State constitutional provisions; that section 14-
103.12(c) constituted an unlawful grant of a special privilege to
State police officers in violation of Article I, section 16 of
the Illinois constitution; that section 14-103.12(c) constituted
special legislation in violation of Article IV, section 13 of the
Illinois Constitution; and that section 14-103.12(c) diminished
or impaired their pension rights in violation of Article XIII,
section 5 of the Illinois Constitution. The plaintiffs premised
these constitutional claims upon the assertion that they perform
the same job as the State police.
In support of their argument that there was no significant
difference between Secretary of State investigators and State
police officers, the plaintiffs relied upon the statutory
provisions delineating the authorities and duties of each group.
They also submitted several exhibits to illustrate the job duties
of the investigators. After hearing argument, the judge issued
an order concluding that the plaintiffs were "substantially
different as a class from State police officers" and upheld both
the Board's decision and the constitutionality of the statute.
In reviewing an administrative decision, "the findings and
conclusions of the administrative agency on questions of fact
shall be held to be prima facie true and correct." 735 ILCS 5/3-
110. In this regard, "[n]o new or additional evidence in support
of or in opposition to any finding, order, determination, or
decision of the administrative agency shall be heard by the
court." 735 ILCS 5/3-110 (West 1994). We review questions of
law de novo. Villegas v. Downers Grove Board of Fire and Police
Commissioners, 266 Ill. App. 3d 202, 209, 639 N.E.2d 966 (1994),
rev'd on other grounds, 167 Ill. 2d 108, 656 N.E.2d 1074 (1995).
Regarding factual findings, our function is limited to
ascertaining whether the findings and decision of the agency are
supported by the manifest weight of the evidence. Davern v.
Civil Service Comm'n, 47 Ill. 2d 469, 269 N.E.2d 713 (1970);
Podmajersky v. Zoning Board of Appeals, 131 Ill. App. 3d 1072,
1075, 476 N.E.2d 1176 (1985); Taylor v. Police Board of the City
of Chicago, 62 Ill. App. 3d 486, 491, 378 N.E.2d 1160 (1978). A
decision is against the manifest weight of the evidence only if
"no rational trier of fact could have agreed with the agency. ***
If there is any competent evidence supporting the agency's
determination," it will be affirmed. Scadron v. Zoning Board of
Appeals, 264 Ill. App. 3d 946, 949, 637 N.E.2d 710 (1994).
Initially, we must address an issue of standing raised by
the defendants. Each of the plaintiffs retired from their
positions as investigators in 1991 or 1992 with one possible
exception. The defendants contend that the plaintiff, Edward
James Foley, retired in 1984, long before section 14-103.12(c)
was enacted, and, therefore, he lacks standing to maintain this
suit because he was not affected by the amendment. The
plaintiffs claim Foley retired on December 31, 1991. We note
that in the trial court, the defendants challenged the standing
of the plaintiffs as a group, but on an entirely different basis.
The plaintiffs cannot point to any evidence in the record to
support the assertion that Foley retired in 1991. On the other
hand, the defendants cite only the minutes of the SERS Committee
meeting, which conclude that Foley retired in 1984. However, the
record contains no evidence, documentary or otherwise, which
supports the finding of the SERS Committee. Therefore, we reject
that finding because it is not supported by the manifest weight
of the evidence.
Under Illinois law, a person who is excluded from a class
that receives favorable treatment has standing to challenge the
classification. See, e.g., Tobin v. McClure, 144 Ill. App. 3d
33, 37, 493 N.E.2d 1215 (1986). Generally, lack of standing in a
civil case is an affirmative defense which if not raised in the
trial court is waived on appeal. Jensen Disposal Co. v. Town of
Warren, 218 Ill. App. 3d 483, 486, 578 N.E.2d 605 (1991);
Olivieri v. Coronet Insurance Co., 173 Ill.App. 3d 867, 871, 528
N.E.2d 986 (1987). However, the appellee may defend the judgment
on appeal, or urge any point in support of the judgment, even
though not directly ruled on by the trial court, so long as the
factual basis for determination was before the trial court.
Jensen, 218 Ill. App. 3d at 487; Jackson v. Chicago Board of
Education, 192 Ill. App. 3d 1093, 1099, 549 N.E.2d 829 (1989).
Although the trial judge requested briefing on the issue of
standing in regard to the entire group of plaintiffs, he did not
do so with regard to the issue as it is presented by the
defendants on appeal. We conclude that the issue of Foley's
standing based on the date of his retirement was not properly
raised below. Therefore, it is waived.
As to the plaintiffs' substantive claims, the SERS Committee
and the Board denied the plaintiffs' claim for recalculation of
benefits based upon the clear language of section 14-130.12(c),
under which the plaintiffs are not entitled to the calculation
they requested. It is unclear from the SERS Committee's ruling,
however, whether it made any factual findings in this regard.
Rather, it apparently adopted its findings in a similar case
involving a plaintiff named Russell Watier, findings not included
in the record before us. Nonetheless, the administrative agency
clearly considered and rejected the plaintiffs' contentions by
applying the terms of the appropriate statutory provisions. As
such, its decision is not against the manifest weight of the
evidence.
The plaintiffs' primary contention concerning their request
for a declaratory judgment is that the more favorable benefit
calculation accorded State police under section 14-103.12(c)
denies them equal protection of the laws under the United States
and Illinois constitutions. U.S. Const. Amend 14; Ill. Const
1970, Art. I, sec. 2. They argue that because there is
essentially no difference in the job duties of State police
officers and Secretary of State investigators, section 14-
103.12(c) creates an unreasonable and arbitrary classification.
If a legislative classification does not affect a
fundamental right or impact a suspect class, we will uphold the
classification unless it bears no rational relationship to a
legitimate state goal. People v. Esposito, 121 Ill. 2d 491, 500,
521 N.E.2d 873 (1988). The legislature may classify different
people differently, so long as the classification is not
arbitrary and capricious. People v. Kimbrough, 163 Ill. 2d 231,
237, 644 N.E.2d 1137 (1994).
Although the plaintiffs assert that the legislative
classification "imping[es] upon their fundamental constitutional
rights," they cite no authority to support this proposition.
Indeed, our courts have recognized that "[f]undamental interests
generally are those that lie at the heart of the relationship
between the individual and a republican form of nationally
integrated government." People ex rel. Tucker v. Kotsos, 68 Ill.
2d 88, 97, 368 N.E.2d 903 (1977). These include such interests
as the right to vote, first amendment guarantees, the right to
travel, and the right to privacy. Massachusetts Board of
Retirement v. Murgia, 427 U.S. 307, 312 n.3, 49 L. Ed. 2d 520, 96
S. Ct. 2562 (1976); Tucker, 68 Ill. 2d at 97. They do not
include the plaintiffs' claim to a particular pension benefit
calculation method. Muzquiz v. City of San Antonio, 520 F.2d
993, 1001 (5th Cir. 1975), aff'd en banc, 528 F.2d 499 (1976) and
vacated on other grounds, 438 U.S. 901, 57 L. Ed. 2d 1144, 98 S.
Ct. 3117 (1978).
Even if we agreed that the plaintiffs' duties were the same
as those of the State police, "the legislature may ***
differentiate between persons similarly situated if there is a
rational basis for doing so." Esposito, 121 Ill. 2d at 501.
Thus, the classification created by section 14-103.12(c) "'must
be upheld against challenge if there is any reasonable
conceivable state of facts that could provide a rational basis
for'" it. (Emphasis added.) Heller v. Doe, 509 U.S. 312, 320, 125
L. Ed. 2d 257, 113 S. Ct 2637 (1993); Opyt's Amoco, Inc. v.
Village of South Holland, 149 Ill. 2d 265, 595 N.E.2d 1060(1992). That basis need not be apparent from the legislation
itself, nor must the State produce evidence to support the
classification. Heller, 509 U.S. at 321. Rather, the
classification "may be [legitimately] based upon rational
speculation unsupported by evidence or empirical data." Heller,
509 U.S. at 321.
We believe the legislature has implicitly expressed the
basis for the classification at issue within the provisions of
section 14-103.12(c). That section applies only to State police
officers who have served 20 or more years on the force. The
legislature clearly made a decision to reward the service of
those officers who remain on the force. The legislature could
also have sought to entice experienced officers to remain on the
force by rewarding them with a more favorable pension. Indeed,
the legislature might have believed that it could attract better
candidates to the force by offering an attractive benefits
package unavailable to other state employees. We note that the
Pension Code classifies numerous types of state employees,
granting varying pension benefits rights to them, despite the
fact that many of their employment responsibilities may overlap.
It is not for this court to "second-guess" the legislature's
wisdom in this regard, and the plaintiffs must negate all of the
bases supporting the legislation in order to successfully attack
it. Heller, 509 U.S. at 321.
The only basis upon which the plaintiffs rely to negate the
legitimacy of the classification, however, is that their duties
are no different from those of State police officers and thus all
of the reasons the legislature could have for according state
police better pension benefits apply to them, as well. Even
assuming the truth of this allegation, the State may address a
problem one step at a time. Friedman & Rochester, Ltd. v. Walsh,
67 Ill. 2d 413, 421-22, 367 N.E.2d 1325 (1977); Illinois Coal
Operators Ass'n v. Pollution Control Board, 59 Ill. 2d 305, 312-
13, 319 N.E.2d 782 (1974). It may address itself first to what
it decides is the most acute need (Chicago National League Ball
Club, Inc. v. Thompson, 108 Ill. 2d 357, 371, 483 N.E.2d 1245(1985)), in this instance the recruitment and retention of
qualified and experienced State police officers.
In any event, we agree with the circuit court that the
plaintiffs are substantially different from State police
officers. The plaintiffs were employed by the Secretary of State
primarily "for the purpose of more effectively carrying out the
provisions of the laws in relation to motor vehicles." 625 ILCS
5/2-115. However, they contend that like the state police,
Secretary of State investigators have "all of the powers of
police officers." We disagree with the plaintiffs'
characterization of the statutory scheme.
Under the State Police Act (20 ILCS 2610/0.01 et seq.(West
1994)), the State police are authorized as follows regarding the
enforcement of motor vehicle laws:
"State policemen shall enforce the provisions of
The Illinois Vehicle Code *** and Article 9 of the
'Illinois Highway Code' *** and shall patrol the public
highways and rural districts to make arrests for
violations of the provisions of such Acts. They are
conservators of the peace and as such have all powers
possessed by policemen in cities, and sheriffs, except
that they may exercise such powers anywhere in this
State. The State policemen shall cooperate with the
police of cities, villages and incorporated towns, and
with the police officers of any county, in enforcing
the laws of the State and in making arrests and
recovering property." 20 ILCS 2610/16.
The State police are further authorized by section 55a of
the Civil Administrative Code (20 ILCS 2605/55a (West 1994)), to
act as general police officers. Section 55a includes 34 specific
grants of power to the State police, such as that of
investigating the criminal laws of the State of Illinois,
generally, as well as "the origins, activities, personnel and
incidents of crime and the ways to redress the victims of crimes
*** enforce all laws regulating the production, sale,
prescribing, *** delivering, distributing, or use of controlled
substances and cannabis." 20 ILCS 2605/55a(A)(4)(a) & (b). The
State police may also employ experts or additional investigators
to aid in preventing or detecting crime. 20 ILCS
2605/55a(A)(4)(c). The State police are the "central repository
and custodian" of criminal records in the State. 20 ILCS
2605/55a(A)(5)(a). They are charged with, among other things,
the responsibility of investigating racetracks, arson, child
abuse and neglect, and identifying and responding to reports of
hate crimes. 20 ILCS 2605/55a(A)(14), (17), (29) & (31).
By contrast, under the Illinois Vehicle Code, the authority
of Secretary of State investigators is much narrower:
"It shall be the duty of [the] investigators to
investigate and enforce violations of the provisions of
this Act administered by the Secretary of State and
provisions of Chapters 11, 12, 13, 14 and 15 [of this
Act]***. Such investigators shall have and may
exercise throughout the State all of the powers of
peace officers." 625 ILCS 5/2-115.
Also, Secretary of State investigators "shall cooperate with the
State Police and the sheriffs and police in enforcing the laws
regulating the operating of vehicles and the use of the
highways." 625 ILCS 5/2-116(a). Finally, they "shall
investigate and report violations of the provisions of this Act
in relation to the equipment and operation of vehicles as
provided for in section 2-115 and for such purposes these
investigators have and may exercise throughout the State all of
the powers of police officers." (Emphasis added.) 625 ILCS 5/16-
102.
Although the responsibilities of State police and Secretary
of State investigators overlap in regard to the enforcement of
provisions of the Illinois Vehicle Code, the similarity ends
there. Section 55a of the Civil Administrative Code grants the
State police broad police power not possessed by Secretary of
State investigators. Indeed, there are few limitations on the
powers of State police officers, while the powers of
investigators are, with some exceptions cited by the plaintiffs,
circumscribed to those incident to investigating and enforcing
motor vehicle laws.
We are also unpersuaded by the exhibits submitted to the
circuit court judge, although they do demonstrate that the
plaintiffs, like all law enforcement personnel, are often called
upon to perform duties beyond the ordinary. Nevertheless, the
statutory duties of the State police are substantially broader
than those of the plaintiffs, and the legislature could
rationally seek to reward those who take on these additional
duties and who continue to perform them over a long period of
time. Given that conclusion, we hold that the classification
established by section 14-103.12(c) of SERS does not deny the
plaintiffs equal protection of the laws.
The plaintiffs next argue that section 14-103.12(c) violates
article IV, section 13, of the Illinois Constitution, which
prohibits the legislature from passing a special or local law
when a general law can be applicable. Ill. Const. 1970, Art. IV,
sec. 13. The plaintiffs contend that section 14-103.12(c)
constitutes a special law because it applies to only a portion of
a class instead of all of the class. That is, section 14-
103.12(c) applies only to State police officers when the
investigators and State police officers are part of the same
class. We have already rejected this contention. Our courts
address alleged violations of the special legislation clause of
the Illinois constitution applying the same rational basis
standard as that applicable to equal protection challenges. Pre-
School Owners Ass'n of Illinois, Inc. v. Department of Children
and Family Services, 119 Ill. 2d 268, 518 N.E.2d 1018 (1988);
Chicago National League Ball Club, 108 Ill. 2d at 368.
Therefore, we reject the plaintiffs argument in this regard, as
we have already held that section 14-103.12(c) is rationally
related to a legitimate state interest.
The plaintiffs also assert that section 14-103.12(c)
violates Article I, section 16, of the Illinois Constitution,
which provides that "No ex post facto law, or law impairing the
obligation of contracts or making an irrevocable grant of special
privileges or immunities shall be passed." Ill. Const. 1970,
Art. I, sec. 16. Like the plaintiffs' special legislation and
equal protection challenges, this contention is rejected because
there is a rational basis for the legislation. Towns v. Kessler,
10 Ill. App. 3d 356, 293 N.E.2d 761 (1973).
Finally, the plaintiffs urge that the more favorable pension
benefit calculation available to State police officers violates
article XIII, section 5, of the Illinois Constitution, which
provides:
"Membership in any pension or retirement system of
this State, any unit of local government or school
district, or any agency or instrumentality thereof,
shall be an enforceable contractual relationship, the
benefits of which shall not be diminished or impaired."
Ill. Const. 1970, Art. XIII, sec. 5.
According to the plaintiffs, the more favorable benefit
calculation available to State police officers "clearly"
diminishes and impairs their pension benefits. We disagree. In
fact, section 14-103.12(c) had no effect on the investigators'
benefits. It affected only the benefits of State police
officers, who, as a result of its enactment, enjoy a more
favorable benefit calculation.
Nevertheless, the plaintiffs contend that any change to the
pension plan in which they participated constitutes an impairment
of their benefits. Neither case law nor common sense supports
their position.
Our courts have held that a change in pension benefits
violated Article XIII, section 5, only when the facts established
an actual reduction in a plaintiff's benefits. See, e.g., Felt
v. Board of Trustees of Judges Retirement System, 107 Ill. 2d
158, 481 N.E.2d 698 (1985); Kraus v. Board of Trustees of the
Police Pension Fund of the Village of Niles, 72 Ill. App. 3d 833,
390 N.E.2d 1281 (1979). As the court stated in Kraus,
"[S]ection 5 of article XIII prohibits legislative
action which directly diminishes the benefits to be
received by those who become members of the pension
system prior to the enactment of the legislation,
though they are not yet eligible to retire.
Legislative action directed toward another aim, but
which has an incidental effect on the pensions which
employees would ultimately receive, is not prohibited."
Kraus, 72 Ill. App. 3d at 849, citing Peters v.
Springfield, 57 Ill. 2d 142, 311 N.E.2d 107 (1974).
The Kraus court explained that the mandatory retirement age may
be reduced, salary and work hours may be reduced and notice
requirements may be imposed without violation of article 13,
section 5, even though these may indirectly reduce benefits.
Kraus, 72 Ill. App. 3d at 849. Here, the plaintiffs cannot
demonstrate that section 14-103.12(c) actually reduced their
benefits, either directly or indirectly.
For all of the foregoing reasons, the judgment of the
circuit court is affirmed.
Affirmed.
Zwick, P.J., and McNamara, J., concur.