Stillo v. State Retirement Systems

Case Date: 05/21/1999
Court: 1st District Appellate
Docket No: 1-97-4630

Stillo v. State Retirement Systems, No. 1-97-4630

1st District, May 21, 1999

SIXTH DIVISION

ADAM N. STILLO and FLORENCE F. STILLO,

Plaintiffs-Appellants,

v.

STATE RETIREMENT SYSTEMS, JUDGES' RETIREMENT SYSTEM OF ILLINOIS,

Defendant-Appellee.

Appeal from the Circuit Court of Cook County.

The Honorable John K. Madden, Judge Presiding.

JUSTICE BUCKLEY delivered the opinion of the court:

Plaintiffs, Adam N. Stillo (Stillo) and his wife, Florence F. Stillo, appeal a decision by the Board of Trustees of the Judges' Retirement System of Illinois (the Board) that terminated all of Stillo's pension benefits on the basis of Stillo's conviction and subsequent sentencing on two felony charges arising out of acts committed during his employment as a circuit court judge. Mrs. Stillo received health insurance benefits because of Stillo's membership in the Judges' Retirement Systems of Illinois (the System) and was the primary beneficiary of his pension benefits. The System also terminated her benefits. The circuit court of Cook County denied plaintiffs' petition for administrative review, and this timely appeal followed.

On appeal, plaintiffs first contend that they were entitled to a presuspension hearing before their pension benefits were suspended and, second, that their pension benefits should not have been terminated prior to the exhaustion of Stillo's appeal of his criminal conviction. The System's claim for repayment of $4,483.42 paid to Stillo for the period July 11, 1994, to July 31, 1994, has not been raised on appeal or on a cross-appeal. For the reasons set forth below, we affirm the judgment of the circuit court.

BACKGROUND

In 1964, Stillo was appointed a magistrate for the circuit court of Cook County and became a participant in the System. At the time of his retirement on August 1, 1988, Stillo was serving as a circuit judge in the criminal division of the circuit court of Cook County. His monthly pension benefit at the time of retirement was in excess of $5,000.

In 1991, a federal grand jury indicted Stillo on charges of racketeering and extortion conspiracy. The charges arose out of bribery and extortion Stillo allegedly engaged in from 1976 to 1987. On July 29, 1993, at the conclusion of a jury trial in the United States District Court for the Northern District of Illinois, Stillo was found guilty on both counts of the indictment. Then, on July 11, 1994, the district court entered judgment on the convictions and sentenced Stillo to four years in prison. See United States v. Stillo, 57 F.3d 553, 556 (7th Cir. 1995). Stillo appealed to the United States Court of Appeals for the Seventh Circuit, which affirmed the conviction on June 9, 1995. Stillo, 57 F.3d 553. The United States Supreme Court subsequently denied Stillo's petition for writ of certiorari. Stillo v. United States, 516 U.S. 945, 133 L. Ed. 2d 306, 116 S. Ct. 383 (1995).

In a letter to Stillo dated January 19, 1994, Rudy J. Kink, Jr., manager of the System, informed Stillo that, in accordance with Illinois law (40 ILCS 5/18-163 (West 1994)), all benefit payments made to a member or annuitant must cease upon entry of judgment on a conviction and sentencing for a felony when the offense arose out of acts committed during the performance of official duties as a judge. Plaintiffs responded to Kink's letter on July 20, 1994, by filing a complaint for declaratory judgment and injunctive relief, and requesting the court to enjoin any termination of benefits until such time as a "full due process hearing" could be held. On July 26, 1994, Michael L. Mory, executive secretary of the System, notified Stillo that a hearing before the Board had been scheduled for August 26, 1994. The System paid Stillo his benefits through July of 1994 but suspended benefit payments for August 1994. Due to the scheduling of the Board's hearing, the circuit court dismissed Stillo's complaint for declaratory and injunctive relief. Following the August 26 hearing, the Board entered a decision and order terminating all of plaintiffs' benefits as of July 11, 1994 (the date of sentencing in the district court), and directed the System to take the necessary steps to recover an overpayment of benefits of $4,483.42 for the period of July 11, 1994, through July 31, 1994. The Board's decision was based on section 18-163 of the Illinois Pension Code (the Pension Code), which provides in relevant part: "None of the benefits herein provided shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his or her service as a judge ***." 40 ILCS 5/18-163 (West 1994). The decision was served on the plaintiffs on September 28, 1994.

The Board found that "conviction of either a state or federal felony, so long as that felony arose out of or in connection with one's employment," is sufficient to cause a forfeiture of pension benefits under the Pension Code. The Board also determined that while it is true that termination of benefits under section 18-163 of the Pension Code should not occur without a prior hearing, a hearing was provided in the instant case on August 26, 1994. Finally, the Board concluded that the System properly terminated plaintiffs' benefits, even though Stillo's appeal from the criminal conviction and sentence was still pending, because both Illinois and federal law state that pronouncement of a sentence constitutes a final judgment in a criminal proceeding. See People v. Allen, 71 Ill. 2d 378, 381 (1978); 18 U.S.C.