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Municipality Obligated to Pay for Officer’s PSEBA Benefits

October 6th, 2014

Village of Vernon Hills v. Heelan, 2014 IL App (2d) 130823

The Second District Appellate Court has affirmed a decision that the village continues to be obligated to pay for benefits under to the Public Safety Employee Benefits Act (“PSEBA”) for a police officer following the award of a line-of-duty disability pension.  The Village of Vernon Hills filed a complaint against Officer Heelan, seeking a ruling by the Circuit Court that the village was not obligated to pay for health insurance premiums under PSEBA for the officer and his family after the pension board awarded the officer a line-of-duty disability pension.

The Board of Trustees of the Vernon Hills Police Pension Board awarded Heelan a line-of-duty disability pension.  The Village’s complaint sought declaratory judgment that it was not obligated under Section 10 of PSEBA to pay for the health insurance premiums for Heelan, his wife, and their two children.  Heelan filed a counterclaim seeking declaratory judgment that the Village was obligated to pay for the health insurance premiums.  Heelan was awarded a line-of-duty disability pension following two hip replacement surgeries, which were necessary following his fall on some ice when responding to a panic alarm call.

In its complaint, the Village alleged that Heelan had not suffered a catastrophic injury, and that the injury had not resulted from his response to what he reasonably believed was an emergency (the requirements for the Village to pay Heelan’s health insurance premiums, under §10(b) of PSEBA).  The Village argues that a factual distinction existed between Heelan’s injury and the facts in Krohe v. City of Bloomington, (204 Ill.2d 392 (2003)), which held that an injury resulting in a line-of-duty disability pension is synonymous with a catastrophic injury.

Prior to the bench trial, Heelan filed a Motion in Limine, seeking to bar the Village from presenting an evidence or testimony on the issue of whether he had suffered a catastrophic injury under §10(a) of PSEBA.  The Circuit Court granted the motion, finding that the Village was collaterally barred from arguing that Heelan had not suffered a catastrophic injury.  Following the bench trial, the Circuit Court ruled in favor of Heelan and entered declaratory judgment that the Village was obligated under PSEBA to pay for the health insurance premiums for Heelan and his family.

Heelan also sought sanctions against the Village for filing its complaint, which acknowledged Heelan had received a line-of-duty disability pension and that he was entitled to PSEBA benefits.  The Circuit Court found in favor of the Village, holding that the Village did not act to harass Heelan and that it had not act in bad faith in bringing the complaint, which was done in an effort to bring change to the law.

The Appellate Court, in its review, noted PSEBA does not provide a definition for “catastrophic injury,” and stated that the Illinois Supreme Court has held the term “catastrophic injury” to be synonymous with an injury resulting in a line-of-duty disability under the Illinois Pension Code.  On Appeal, the Village argued “much confusion” resulted from the Supreme Court’s decision in Krohe.  The Appellate Court disagreed, finding Krohe had unequivocally resolved the question.  The Appellate Court found Krohe, Richter v. Village of Oak Brook, (2011 IL App (2d) 100114), and Nowak v. City of Country Club Hills, (2011 IL 111838), to be controlling case law, which left no ambiguity regarding the applicable definition of “catastrophic injury.”

The Appellate Court further found that the Village’s complaint and arguments were an improper collateral attack on the findings of the pension board in granting Heelan’s application for a line-of-duty disability pension.  Because the Village did not challenge the pension board’s statutory authority to render its decision, the Village’s complaint was held to be an improper collateral attack on the pension board’s decision.  In so holding, the Appellate Court determined that the Village’s due process rights had not been violated by the Circuit Court prohibiting the Village from presenting any evidence related to the nature, extent, and causes of Heelan’s injuries.  Accordingly, all evidence related to Heelan’s injuries was irrelevant.

The Appellate Court also affirmed the Circuit Court’s ruling that the Village had filed its complaint in an effort to change existing law (PSEBA) and did not act in bad faith.