Sedlock v. Board of Trustees of the Police Pension Fund of the City of Ottawa

No. 3--05--0736
Filed August 22, 2006.
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 2006
DANIEL J. SEDLOCK, JR., ) Appeal from the Circuit Court
) of the 13th Judicial Circuit,
Petitioner-Appellant, ) La Salle County, Illinois
)
v. ) No. 04--MR--197
)
THE BOARD OF TRUSTEES OF THE )
POLICE PENSION FUND OF THE )
CITY OF OTTAWA, )
) Honorable William Balestri,
Respondent-Appellee. ) Judge, Presiding.
PRESIDING JUSTICE SCHMIDT delivered the opinion of the court:
This is an appeal of the trial court's dismissal of
petitioner Daniel Sedlock's complaint for declaratory judgment.
Sedlock asked the circuit court of La Salle County to declare
that the Board of Trustees of the Police Pension Fund of the City
of Ottawa (PPF) does not have the authority to make a final
salary determination for Sedlock in any sum other than
$84,338.31.
BACKGROUND
Sedlock retired as chief of police of the City of Ottawa on
September 8, 2003. Sedlock's salary, as chief of police, was
$64,000 until the city council of the City of Ottawa amended his
employment agreement on August 5, 2003, to increase his annual
salary to $84,338.31. The increase in his salary took effect on
September 1, 2003, one week before his retirement. The PPF set a
public hearing to be held on October 26, 2004, to consider what
the final salary determination should be for calculating the
future retirement pension of Sedlock.
Under section 3--111 of the Illinois Pension Code (the
Code), a police officer shall receive a pension of one-half of
the salary attached to the rank held on the last day of service.
40 ILCS 5/3--111(a) (West 2004). Pursuant to the Code, "salary"
means the annual salary, including longevity attached to the
police officer's rank, as established by the municipality's
appropriation ordinance, including any compensation for overtime
which is included in the salary established, but excluding any
"overtime pay," "holiday pay," "bonus pay," "merit pay," or any
other cash benefit not included in the salary so established. 40
ILCS 5/3--125.1 (West 2004).
On October 5, 2004, Sedlock filed a complaint for
declaratory judgment, requesting that the court enter an order
finding that the PPF has no authority under the Code to make a
final annual salary determination in any sum other than the
amount of $84,338.31. The PPF filed a motion to dismiss,
claiming that the circuit court did not have jurisdiction over
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the subject matter of the complaint because there was no actual
controversy between the parties since the PPF had not yet made a
determination as to what the salary was and no final appealable
decision by the PPF had been made. Sedlock filed a motion to
strike the PPF's motion to dismiss.
A hearing was held on both motions and, on May 31, 2005, the
court denied Sedlock's motion to strike and granted the PPF's
motion to dismiss. First, the court found that it is the PPF's
fiduciary duty to determine a police officer's salary when
calculating his pension. Then, the court found that dismissal
was appropriate because Sedlock was required to exhaust his
administrative remedies, if dissatisfied with any decision of the
PPF, before seeking judicial relief in court.
There are two issues before this court. First, whether the
PPF has the authority to determine what a police officer's
"salary" is under the Code for the purpose of calculating the
officer's pension benefit amount. The second issue is whether,
after having answered the preceding question in the affirmative,
the trial court properly dismissed the declaratory judgment
action for lack of subject matter jurisdiction.
ANALYSIS
We affirm the circuit court. First, we address whether the
court has jurisdiction to decide whether the PPF has the
authority to determine Sedlock's salary. Generally, a person
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with a claim from an administrative agency must exhaust his
administrative remedies before seeking relief from the judicial
system pursuant to the Illinois Administrative Review Law. 735
ILCS 5/3--101 et seq. (West 2004). However, the court has
recognized several exceptions to the doctrine of exhaustion of
administrative remedies, including when the agency's jurisdiction
is attacked because a party claims that it is not authorized by
statute to do something it is attempting to do, as Sedlock claims
here. Castaneda v. Illinois Human Rights Comm'n, 132 Ill. 2d
304, 309, 547 N.E.2d 437, 439 (1989); Wright v. Pucinski, 352
Ill. App. 3d 769, 773, 816 N.E.2d 808, 814 (2004). Where an
administrative assertion of authority to hear or determine
certain matters is challenged on its face as not authorized by
the enabling legislation, such a facial attack does not implicate
the exhaustion doctrine and exhaustion is not required. Wright
v. Pucinski, 352 Ill. App. 3d at 773, 816 N.E.2d at 814. The
rationalization for this exception is that when an agency's
statutory authority to exercise jurisdiction is at issue, no
questions of fact are involved. The agency's particular
expertise is not implicated in the necessary statutory
interpretation. Wright v. Pucinski, 352 Ill. App. 3d at 774, 816
N.E.2d at 814. Therefore, the trial court had jurisdiction to
decide whether the PPF had the authority to determine Sedlock's
salary for the purpose of calculating his pension under the Code.
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Next, we consider whether the PPF has authority to determine
Sedlock's "salary." We agree with the trial court's statutory
interpretation that the PPF has the authority to determine what
Sedlock's salary is under the Code for the purpose of calculating
his future pension. Section 3--132 of the Code provides that,
pursuant to section 3--131, police pension fund boards have the
exclusive control and management of the pension fund. 40 ILCS
5/3--132 (West 2004). The fundamental purpose of a police
pension fund board is to determine eligibility to participate in
the fund. Board of Trustees of the Police Pension Fund v. Human
Rights Comm'n, 141 Ill. App. 3d 447, 455, 490 N.E.2d 232, 238
(1986). Additionally, the trustees of the fund are statutorily
designated as fiduciaries. Section 1--101.2 of the Code provides
that any person who exercises any discretionary authority or
control over the money amount of a pension fund is a "fiduciary."
40 ILCS 5/1--101.2 (West 2004). As a fiduciary, each board
member is required to "discharge his or her duties with respect
to the *** pension fund solely in the interest of the
participants and beneficiaries and *** for the exclusive purpose
of *** providing benefits to participants and their
beneficiaries." 40 ILCS 5/1--109 (West 2004).
We hold that the board's statutory duties include determing
what Sedlock's annual salary should be for the purpose of
calculating his retirement benefits. Granting Sedlock's request
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could result in circuit courts being charged with making salary
determinations for thousands of public employees seeking
disability or retirement pensions each year. This is not what
the legislature intended. The board is in the best position to
determine whether Sedlock's most recent salary included overtime,
holiday, bonus, or merit pay.
Next, we consider whether the court properly dismissed the
complaint for declaratory judgment. Once the court properly
determined the scope of the PPF's authority, there was no actual
controversy between the parties since there had been no
determination by the PPF as to what the salary of Sedlock was or
what his retirement pension will be. Under section 3--128 of the
Code, all final administrative decisions of the pension board are
judicially reviewable under the provisions of the Administrative
Review Law. 40 ILCS 5/3--128 (West 2004). An administrative
decision is "any decision, order or determination of any
administrative agency rendered in a particular case, which
affects the legal rights, duties or privileges of [a party] and
which terminates the proceedings before the administrative
agency." 735 ILCS 5/3--101 (West 2004). Until there is a final
appealable decision by the PPF, any action brought before the
court is premature and the court does not have subject matter
jurisdiction. Judicial review can only be undertaken where there
is a final agency determination. Taylor v. State Universities
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Retirement System, 159 Ill. App. 3d 372, 374, 512 N.E.2d 399, 401
(1987).
Without a final decision from the PPF, there is simply
nothing for the circuit court to review. The circuit court,
therefore, correctly determined that it had no subject matter
jurisdiction on the issue of what Sedlock's salary should be.
CONCLUSION
For the foregoing reasons, the judgment of the circuit court
of La Salle County is affirmed.
Affirmed.
LYTTON and O'BRIEN, JJ., concur.
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