Opinion
NO. 4-13-0842
10-30-2014
NOTICE
This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).
Appeal from Circuit Court of Sangamon County
No. 06MR294
Honorable Leo J. Zappa, Jr., Judge Presiding.
JUSTICE HOLDER WHITE delivered the judgment of the court.
Justices Harris and Steigmann concurred in the judgment.
ORDER
¶ 1 Held: The appellate court affirmed, concluding the trial court did not err in granting defendants' motion for summary judgment where plaintiff lacked standing to challenge the transfer of monies from a special fund within the state treasury to other state funds.
¶ 2 In May 2006, plaintiff, Property Casualty Insurers Association of America, an Illinois not-for-profit corporation representing the interests of numerous private insurance
agencies, filed a complaint against defendants, various state officials acting in their official capacities. The complaint alleged defendants improperly authorized the transfer of funds from the Motor Vehicle Theft Prevention Trust Fund (Trust Fund) (20 ILCS 4005/8 (West 2006)) pursuant to numerous budget-implementation bills (BIMPs), which violated both the United States and Illinois Constitutions.
¶ 3 In August 2013, the trial court granted defendants' motion for summary judgment, determining, among other findings, (1) plaintiff lacked standing, (2) plaintiff failed to demonstrate defendants violated either the United States or Illinois Constitutions, and (3) defendants were protected by sovereign immunity.
¶ 4 Plaintiff appeals, asserting the trial court erred in granting defendants' motion for summary judgment. For the following reasons, we affirm.
¶ 5 I. BACKGROUND
¶ 6 A. Illinois Motor Vehicle Theft Prevention Act
¶ 7 In 1991, the Illinois General Assembly passed the Illinois Motor Vehicle Theft Prevention Act (Act) (20 ILCS 4005/1 et seq. (West Supp. 1991)). The purpose of the Act is to "prevent, combat and reduce motor vehicle theft in Illinois; to improve and support motor vehicle theft law enforcement, prosecution and administration of motor vehicle theft laws by establishing statewide planning capabilities for and coordination of financial resources." 20 ILCS 4005/2 (West 2006)).
¶ 8 Section 8 of the Act created the Trust Fund within the state treasury and contains the following relevant provisions. First, the Act requires private insurance companies providing coverage in Illinois to pay a set amount into the Trust Fund based on the number of policies sold within the past year. 20 ILCS 4005/8(d) (West 2006). Second, the money deposited into the
Trust Fund "shall not be considered general revenue of the State of Illinois." 20 ILCS 4005/8(b) (West 2006). Third, the Act states the deposited funds "shall not be appropriated, loaned or in any manner transferred to the General Revenue Fund of the State of Illinois." 20 ILCS 4005/8(c) (West 2006). Fourth, "[i]nsurers contributing to the Trust Fund shall have a property interest in the unexpended money in the Trust Fund, which property interest shall not be retroactively changed or extinguished by the General Assembly." 20 ILCS 4005/8(f) (West 2006). Finally, in the event the General Assembly discontinued the Trust Fund or dissolved the Act, "any balance remaining therein shall be returned to the insurers writing private passenger motor vehicle insurance in proportion to their financial contributions to the Trust Fund." 20 ILCS 4005/8(g) (West 2006).
¶ 9 B. Legislative Actions
¶ 10 Beginning in 2002, the General Assembly enacted a series of fiscal-year BIMPs for the purpose of addressing the "fiscal emergency resulting from shortfalls in revenue." See, e.g., 30 ILCS 105/8.41(14) (West 2004). Those BIMPs authorized transfers from the Trust Fund as follows.
¶ 11 1. 2003 BIMP
¶ 12 In June 2002, as part of the 2003 BIMP, the General Assembly enacted section 8.41 of the State Finance Act (30 ILCS 105/1 to 40 (West 2002)). Pub. Act 92-600, § 5-10 (eff. June 28, 2002) (adding 30 ILCS 105/8.41). This provision authorized the transfer of $4 million from the Trust Fund to the General Revenue Fund. 30 ILCS 105/8.41(14) (West 2002). The Comptroller's office subsequently transferred those funds pursuant to the 2003 BIMP.
¶ 13 2. 2004 BIMP
¶ 14 In June 2003, as part of the 2004 BIMP, the General Assembly added section 8h to the State Finance Act, which empowered the Director of the Bureau of the Budget to authorize the Comptroller and State Treasurer to transfer from any fund held within the state treasury to the General Revenue Fund. Pub. Act 93-32, § 50-5 (eff. June 20, 2003) (adding 30 ILCS 105/8h). The Comptroller subsequently transferred $759,241 from the Trust Fund to the Audit Expense Fund (30 ILCS 105/6z-27 (West 2002)). Additionally, the General Assembly added section 8.42 of the State Finance Act, which authorized the transfer of $250,000 from the Trust Fund to the General Revenue Fund. Pub. Act 93-32, § 50-5 (eff. June 20, 2003) (adding 30 ILCS 105/8.42).
¶ 15 3. 2005 BIMP and Executive Order 2003-10
¶ 16 In 2003, then Governor Blagojevich issued executive order 2003-10, which authorized the transfer of unexpended appropriations and pending business pertaining to the "facilities management, internal auditing, and staff legal functions" of numerous state agencies to the Department of Central Management Services (CMS). In 2004, as part of the 2005 BIMP, the General Assembly added section 405-293 to the Civil Administrative Code of Illinois (20 ILCS 405/405-1 to 415 (West 2004)). Pub. Act 93-839, § 10-60 (eff. July 30, 2004) (adding 20 ILCS 405/405-293). Section 405-293 adopted executive order 2003-10 and granted the CMS Director discretion to seek reimbursement from any state agency that benefited from CMS's professional services. 20 ILCS 405/405-293 (West 2004).
¶ 17 4. 2006 BIMP
¶ 18 In 2005, as part of the 2006 BIMP, the General Assembly amended section 6z-63(e-5) of the State Finance Act, permitting the CMS Director to authorize the transfer of $9,190 from the Trust Fund to the Professional Services Fund. Pub. Act 94-91, § 20-5 (eff. July 1,
2005) (amending 30 ILCS 105/6z-63(e-5)). The General Assembly also added section 8.44 of the State Finance Act to authorize the transfer of $1,415,361 from the Trust Fund to the General Revenue Fund. Pub. Act 94-91, § 80-5 (eff. July 1, 2005) (adding 30 ILCS 105/8.44).
¶ 19 5. 2007 BIMP
¶ 20 In 2006, as part of the 2007 BIMP, the General Assembly authorized the transfer of $500,000 from the Trust Fund to the General Revenue Fund. Pub. Act 94-839, § 5-40 (eff. June 6, 2006) (adding 30 ILCS 105/8.45(a)). Additionally, the General Assembly amended section 8.44(a) of the State Finance Act to authorize the transfer of $1,415,361 from the Trust Fund to the General Revenue Fund. Pub. Act 94-839, § 5-40 (eff. June 6, 2006) (amending 30 ILCS 105/8.44(a)). Finally, the General Assembly authorized the CMS Director to have $9,200 transferred from the Trust Fund to CMS's Professional Services Fund. Pub. Act 94-839, § 5-40 (eff. June 6, 2006) (adding 30 ILCS 105/6z-63(e-7)).
¶ 21 C. Trial Court Proceedings
¶ 22 In May 2006, plaintiff filed a 46-count complaint for declaratory judgment. The complaint initially named as defendants numerous government officials holding public office at the time, including Rod R. Blagojevich, Lori G. Levin, John Filan, Paul J. Campbell, Judy Barr Topinka (in her capacity as State Treasurer), and Daniel Hynes. Those parties no longer hold the same public offices; thus, the current officeholders have been substituted as defendants as a matter of law. 735 ILCS 5/2-1008 (West 2012). The complaint, in relevant part, alleged defendants committed the following violations under the United States and Illinois Constitutions: (1) the BIMPs violated the Illinois constitution's prohibition against amendment by reference; (2) Executive Order 2003-10 violated the separation of powers set forth in the Illinois constitution; (3) the BIMPs violated the revenue article under the Illinois constitution; (4) the BIMPs violated
the takings clause under the United States and Illinois Constitutions; (5) the BIMP's violated the due-process clauses under both the United States and Illinois Constitutions; (6) the BIMPs violated the single-subject clause of the Illinois constitution; and (7) the BIMPs violated the contracts clause under the United States and Illinois Constitutions. Plaintiff sought mandamus relief, requesting the trial court compel defendants to comply with the Act. In furtherance of these assertions, plaintiff argued the money in the Trust Fund represented private funds in which the insurance companies held a present property interest, thus entitling plaintiff to the constitutional protections set forth in the complaint.
¶ 23 In July 2006, defendants filed a motion to dismiss, asserting (1) plaintiff failed to state a cause of action, (2) plaintiff's claims regarding the 2003, 2004, and 2005 BIMPs were moot, (3) plaintiff lacked standing, and (4) defendants were protected by sovereign immunity. Following an October 2006 hearing, the trial court denied defendants' motion to dismiss.
¶ 24 In August 2007, plaintiff filed a motion for summary judgment. Plaintiff asserted defendants' actions in appropriating money from the Trust Fund violated (1) the takings clause of the United States and Illinois Constitutions, (2) the revenue article of the Illinois constitution, (3) the separation-of-powers clause in the Illinois constitution, (4) the due-process clauses of both the United States and Illinois Constitutions, (5) the contracts clause of the United States and Illinois Constitutions, (6) the single-subject clause of the Illinois constitution, and (7) the amendment-by-reference clause of the Illinois constitution. In a January 2008 order, the trial court denied plaintiff's motion for summary judgment, finding (1) the BIMPs represented the most recent expression of legislative intent and therefore controlled over the provisions within the Act; (2) the Act contained no express prohibition against the General Assembly authorizing a
transfer from the Trust Fund to other state funds; and (3) plaintiff's constitutional issues lacked merit.
¶ 25 Following the filing of various pretrial motions and responses, in November 2012, defendants filed a joint motion for summary judgment. In the motion, defendants argued plaintiffs argument was foreclosed by the Illinois Supreme Court's ruling in A.B.A.T.E. of Illinois, Inc. v. Quinn, 2011 IL 110611, 957 N.E.2d 876.
¶ 26 In August 2013, the trial court granted defendants' motion for summary judgment. The court ruled (1) the supreme court's rejection of the amendment-by-reference challenge in A.B.A.T.E. applied to the instant case; (2) the governor had the authority to issue executive order 2003-10; (3) the Trust Fund consisted of public funds under the purview of the General Assembly, which precluded plaintiff's takings claim; (4) plaintiff possessed no property interest in the Trust Fund that triggered a right to due process; (5) the BIMPs concerned the state budget and therefore did not violate the single-subject clause; (6) the Act did not constitute a contract entitling plaintiff to rights under the contracts clause; (7) the BIMPs superseded the Act insofar as the provisions conflicted, precluding plaintiff from obtaining mandamus relief; (8) claims against defendants were barred by sovereign immunity; and (9) plaintiff lacked standing because it could not establish equitable ownership in the Trust Fund.
¶ 27 This appeal followed.
¶ 28 II. ANALYSIS
¶ 29 On appeal, plaintiff asserts the trial court erred in granting defendants' motion for summary judgment. Specifically, plaintiff asserts the court erred in finding (1) plaintiff lacked standing, (2) defendants were protected by sovereign immunity, and (3) plaintiff failed to demonstrate defendants violated the United States or Illinois Constitutions. We begin by
analyzing whether the court erred in determining plaintiff lacked standing to challenge the transfer of money from the Trust Fund.
¶ 30 A. Standing
¶ 31 We review the trial court's order granting summary judgment based on plaintiff's lack of standing de novo. A.B.A.T.E., 2011 IL 110611, ¶ 22, 957 N.E.2d 876; Malec v. City of Belleville, 384 Ill. App. 3d 465, 468, 891 N.E.2d 1039, 1041-42 (2008). Summary judgment is appropriate where "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." 735 ILCS 5/2-1005(c) (West 2012). The evidence is viewed in the light most favorable to the nonmoving party. Simmons v. Reichardt, 406 Ill. App. 3d 317, 322, 943 N.E.2d 752, 756 (2010).
¶ 32 Defendants challenged plaintiff's standing in their July 2006 motion to dismiss, which the trial court denied. Defendants did not raise this argument again during the summary-judgment proceedings; however, the court granted defendants' motion for summary judgment after finding, in part, plaintiff lacked standing pursuant to Barber v. City of Springfield, 406 Ill. App. 3d 1099, 1101, 943 N.E.2d 1157, 1160 (2011). On appeal, plaintiff asserts the court should not have considered the standing issue during the summary-judgment proceedings, as it had already concluded plaintiff had standing to proceed. However, a close reading of the court's order granting defendants' motion for summary judgment demonstrates the court found plaintiff lacked standing after concluding, as a matter of law, plaintiff established no right to the money contained within the Trust Fund. The court's reconsideration of the standing issue based on the legal arguments raised in defendants' motion for summary judgment fits squarely within its authority to reconsider a prior ruling. See Hernandez v. Pritikin, 2012 IL 113054, ¶ 42, 981
N.E.2d 981 ("recognizing the circuit court's inherent power to review, modify, or vacate interlocutory orders while the court retains jurisdiction"); see also Balciunas v. Duff, 94 Ill. 2d 176, 185, 446 N.E.2d 242, 246 (1983) ("an interlocutory order may be reviewed, modified or vacated at any time before final judgment"). Accordingly, the court properly reconsidered the issue of standing during the summary-judgment proceedings.
¶ 33 Based on the court's ruling, plaintiff defends its standing on appeal. Defendants did not directly address this issue on appeal. Despite defendants' lack of response to this particular issue, we will address it here.
¶ 34 The court relied on Barber in determining plaintiff lacked standing to proceed. In Barber, the appellate court held the plaintiff lacked the requisite taxpayer standing to challenge a tax increase where the plaintiff did not reside or own property in the tax district and had no obligation to replenish the City of Springfield's general revenue fund. Barber, 406 Ill. App. 3d at 1111, 943 N.E.2d at 1168-69. Because standing in this case was not predicated upon plaintiff's taxpayer status, but rather on the issue of whether the Trust Fund consisted of private funds in which plaintiff's insurers possessed a present property interest, we conclude the trial court improperly relied on Barber in determining plaintiff's standing. Nevertheless, this court reviews judgments, not reasons. Material Service Corp. v. Department of Revenue, 98 Ill. 2d 382, 387, 457 N.E.2d 9, 12 (1983). Thus, we may affirm on any basis in the record. Beacham v. Walker, 231 Ill. 2d 51, 61, 896 N.E.2d 327, 333 (2008).
¶ 35 To establish standing, a plaintiff must present (1) an actual controversy between adverse parties; (2) a personal claim, status, or right that entitles the plaintiff to relief; and (3) a distinct and palpable injury directly traceable to a defendant's actions that is substantially likely to be avoided or redressed by the requested relief. AIDA v. Time Warner Entertainment Co.,
L.P., 332 Ill. App. 3d 154, 159, 772 N.E.2d 953, 959 (2002). We begin by addressing whether plaintiff possesses a personal claim, status, or right that entitles it to relief. To resolve this question, we must analyze the extent to which (1) the Trust Fund contained private or public funds, and (2) plaintiff possessed a present property interest in the Trust Fund.
¶ 36 1. Does the Trust Fund Consist of "Private" Funds?
¶ 37 Plaintiff asserts the Trust Fund consists of private funds rather than public funds; therefore, the General Assembly lacked the authority to transfer money from the Trust Fund. The trial court rejected this assertion, relying on A.B.A.T.E., 2011 IL 110611, 957 N.E.2d 876.
¶ 38 In A.B.A.T.E., the General Assembly authorized the transfer of funds from the Cycle Riders Safety Training Fund to the General Revenue Fund notwithstanding an amendment to the Cycle Riders Safety Training Act that placed the fund " 'outside of the State treasury' " and removed language permitting the regular transfer of monies to other funds. Id. ¶¶ 7-8, 957 N.E.2d 876. The relevant statutory provisions stated the money within the trust fund " 'shall only be used' " for those expenses incurred in administering the provisions of the Cycle Riders Safety Training Act. Id. ¶ 4, 957 N.E.2d 876. The plaintiff in A.B.A.T.E. raised many of the same issues before this court, including the issue of whether the trust fund consisted of private money. Id. ¶ 26, 957 N.E.2d 876. The supreme court rejected the plaintiff's claim that the money within the trust fund consisted of private money and held those monies constituted state revenue and, therefore, public money. Id. ¶ 29, 957 N.E.2d 876. In reaching this conclusion, the supreme court noted the money in the fund came from a portion of the fees paid by motorcyclists "for the privilege of operating their motorcycles on the roadways of this state." Id. Because the supreme court found the funds at issue to be public funds, the appropriation of those funds fell within the General Assembly's purview. Id. ¶ 33, 957 N.E.2d 876.
¶ 39 Plaintiff argues we should find A.B.A.T.E. distinguishable due to the differing statutory provisions at issue. While we agree the statute in A.B.A.T.E. contains distinguishable language from the present case, that fact does not necessarily render A.B.A.T.E. inapplicable here. In support of its argument, plaintiff contends the fund at issue in A.B.A.T.E. contained state revenue, whereas, in this case, private insurance companies contributed to the Trust Fund, thus making the Trust Fund a private fund. We disagree.
¶ 40 The General Assembly ordinarily has the authority to transfer money from one government fund to another. Id. ¶ 25, 957 N.E.2d 876. However, that authority does not necessarily extend to all funds held by the state. See Shell Oil Co. v. Dep't of Revenue, 95 Ill. 2d 541, 449 N.E.2d 65 (1983) (holding the Treasurer lacked authority to transfer to the General Revenue Fund interest earned on money paid into a tax protest fund).
¶ 41 Though in this case, the contributions to the Trust Fund were made by private insurance companies, the money was placed in an account within the state treasury in order to "prevent, combat and reduce motor vehicle theft in Illinois; to improve and support motor vehicle theft law enforcement, prosecution and administration of motor vehicle theft laws by establishing statewide planning capabilities for and coordination of financial resources." 20 ILCS 4005/2 (West 2006). The monies within the Trust Fund were designated, in part, for providing financial support to (1) law enforcement, prosecutors, federal and state governments, local governments, and community and business organizations for "programs designed to reduce motor vehicle theft and to improve the administration of motor vehicle theft laws"; and (2) "conduct programs designed to inform owners of motor vehicles about the financial and social costs of motor vehicle theft and to suggest to those owners methods for preventing motor vehicle theft." 20 ILCS 4005/8(e)(2) (West 2006).
¶ 42 The Act does not provide a definition for "public funds," nor does the State Finance Act. However, under section 1 of the Public Funds Investment Act (30 ILCS 235/1 (West 2006)), "public funds" are considered those that are "current operating funds, special funds, *** and funds of any kind or character belonging to or in the custody of any public agency." See also People ex rel. Illinois Department of Labor v. E.R.H. Enterprises, Inc., 2013 IL 115106, ¶ 49, 4 N.E.3d 1. The Act clearly authorized the creation of the Trust Fund within the state treasury and placed it into the custody of a public agency, as administered by the Executive Director of the Authority at the direction of the Trust Fund's council. 20 ILCS 4005/8(a) (West 2006).
¶ 43 Plaintiff argues that funds placed in the state treasury do not necessarily constitute public funds, relying on Shell Oil, 95 Ill. 2d 541, 449 N.E.2d 65. In that case, Shell Oil disputed the state's tax assessment and, pending litigation, placed the disputed tax money in a "protest fund" within the state treasury. Id. at 544, 449 N.E.2d at 66. The circuit court eventually found the taxes were erroneously assessed and ordered the money in the protest account returned to Shell Oil. Id. at 545, 449 N.E.2d at 66. Although the money in the protest fund was returned to Shell Oil, the interest earned by the protest fund was transferred to the General Revenue Fund. Id. After reviewing the case, the supreme court determined that "[a]t no time did the protest fund become property of the State." Id. at 548, 449 N.E.2d at 68. Given this determination, the supreme court held the Treasurer's transfer of the funds to the state's general revenue fund wrongfully denied the taxpayers the interest income to which they were entitled. Id.
¶ 44 Plaintiff asks us to apply the general principles of Shell Oil to the present case. However, the case at bar does not present a situation in which plaintiff placed funds in a protest fund, nor does the statute support an interpretation that the Trust Fund was created for plaintiff's
sole benefit. In Shell Oil, the protest fund consisted of Shell Oil's money to be used solely for Shell Oil's benefit. Id. Here, plaintiff did not place money in the Trust Fund for its sole benefit. Rather, this contribution was statutorily mandated for the purpose of addressing issues regarding automobile theft. This clearly outlines a public purpose for the funds, which was not for the sole benefit of the private insurance companies contributing to the Trust Fund. As such, plaintiff's reliance on Shell Oil is unpersuasive.
¶ 45 Because the money in the Trust Fund was generated through a statutorily mandated assessment in a fund within the state treasury for purposes of benefitting the public, we conclude the Trust Fund consisted of public funds.
¶ 46 Plaintiff also relies on Thompson v. Kentucky Reinsurance Ass'n, 710 S.W.2d 854 (1986), to assert private funds are not subject to the control of the General Assembly. However, as we have determined the funds contained within the Trust Fund consist of public funds, Thompson is inapplicable here.
¶ 47 2. Does Plaintiff Possess a Present Property Interest in the Trust Fund?
¶ 48 The next issue we must address to determine plaintiff's standing is whether plaintiff possesses a present property interest in the Trust Fund. Plaintiff asserts it has a present property interest in the Trust Fund based on the language of the Act, which states, "[i]nsurers contributing to the Trust Fund shall have a property interest in the unexpended money in the Trust Fund, which property interest shall not be retroactively changed or extinguished by the General Assembly." 20 ILCS 4005/8(f) (West 2006). Conversely, defendants assert plaintiff possessed a conditional property interest only in the unexpended funds within the Trust Fund. Because the monies transferred to the General Revenue Fund and other state funds were expended, defendants contend plaintiff has no property interest in those transferred funds.
¶ 49 The language of section 8(f), stating insurers "shall have a property interest," appears to unequivocally grant insurers contributing to the fund a present property interest in the Trust Fund. 20 ILCS 4005/8(f) (West 2006). However, the remainder of section 8(f) places a condition upon that property interest by extending that interest only to "unexpended money." 20 ILCS 4005/8(f) (West 2006). A "conditional right" is one "that depends on an uncertain event; a right that may or may not exist." Black's Law Dictionary 1348 (8th ed. 2004). Conversely, a "vested right", as plaintiff claims to possess, is one "that so completely and definitely belongs to a person that it cannot be impaired or taken away without the person's consent." Black's Law Dictionary 1349 (8th ed. 2004).
¶ 50 Plaintiff's assertion that insurers possess a present property interest is inconsistent with the remaining provisions of the Act. First, the money placed in the Trust Fund, which we have already concluded consists of public funds, is held for the purpose of carrying out the purposes of the Act. The Act provides insurers no authority to dictate, or even vote, how money from the Trust Fund is expended. Rather, a council, consisting of the officials specifically outlined in the statute and other appointees selected by the governor, makes those determinations. 20 ILCS 4005/4 (West 2006). As the money in the Trust Fund is for the purpose of promulgating the purposes of the Act and is expended based on the discretion of the council, plaintiff's property interest in the Trust Fund logically cannot trigger until the Trust Fund has been discontinued. At that time, plaintiff's insurers would have a property interest in those unexpended funds in proportion to their contributions over the years. 20 ILCS 4005/8(g) (West 2006). Accordingly, plaintiff possesses a conditional interest in the unexpended funds within the Trust Fund, not a present, enforceable property interest.
¶ 51 The trial court determined plaintiff lacked standing and plaintiff has not persuaded us the court acted in error. First, the money in the Trust Fund, though paid by plaintiff's insurers, consisted of public money, which precludes plaintiff from asserting a personal claim, status, or right that placed it in a position to seek relief. Second, plaintiff does not have a present property interest in the expended money in the Trust Fund, so it lacks a personal claim, status, or right to challenge the transfer of funds from the Trust Fund. Accordingly, though we do not agree with the court's reasoning in finding plaintiff's lack of standing, we conclude the court did not err in granting summary judgment based, in part, on defendant's lack of standing.
¶ 52 B. Plaintiff's Remaining Claims
¶ 53 Because we have determined plaintiff lacked standing to challenge the transfer of funds from the Trust Fund, we need not address plaintiff's remaining claims of error on appeal.
¶ 54 III. CONCLUSION
¶ 55 For the foregoing reasons, we affirm the trial court's judgment.
¶ 56 Affirmed.