Bd. of Trustees v. Coopers & Lybrand LLP
Annotate this Case
1-97-2761
SECOND DIVISION
MAY 5, 1998
BOARD OF TRUSTEES OF COMMUNITY COLLEGE, ) APPEAL FROM
DISTRICT NO. 508, COUNTY OF COOK, ) THE CIRCUIT COURT
) COOK COUNTY.
)
Plaintiff, )
)
) No. 95 L 9862
v. )
)
COOPERS AND LYBRAND LLP, ) THE HONORABLE
) DAVID G. LICHTENSTEIN
Defendant. ) JUDGE PRESIDING.
)
)
ARTHUR ANDERSEN LLP, )
)
Defendant and Third-party )
Plaintiff-Appellant; )
)
)
Ronald Gidwitz, Terry E. Newman, )
James A. Dyson, Theresa Fraga, )
Edward W. Czadowski, Ferdinand W. )
Hargrett, Ralph G. Moore, )
Michael G. Mayo, Robert M. Weissbourd, )
Robert C. Rogers, Michael Wagner and )
Gary G. Lonquist, )
)
Third-Party Defendants-Appellees). )
JUSTICE COUSINS delivered the opinion of the court:
Third-party plaintiff-appellant Arthur Anderson LLP appeals
from the lower court s dismissal of its third-party complaint for
contribution against third-party defendants-appellees who are the
individual officers and/or members of the Board of Trustees of
Community College District No. 508, County of Cook, State of
Illinois, commonly known as the City Colleges of Chicago (City
Colleges) and employees of the City Colleges. On appeal, Arthur
Anderson contends that the trial court erred in dismissing its
third-party complaint pursuant to sections 2-615 and 2-619 of the
Code of Civil Procedure (735 ILCS 5/2-615, 2-619 (West 1992))
because: (1) its claims were not barred by the Illinois Local
Governmental and Governmental Employees Tort Immunity Act (745
ILCS 10/1-101 et seq. (West 1992)); (2) the third-party
defendants are liable for the same injury as that for which the
City Colleges seeks recovery from Arthur Anderson; and (3) the
third-party defendants are not identical to the plaintiff.
BACKGROUND
On June 13, 1995, the Board of Trustees of Community College
District No. 508 (the Board) filed a complaint against its former
auditors, Arthur Anderson LLP (Arthur Anderson) and Coopers &
Lybrand LLP (Coopers & Lybrand), alleging professional
malpractice, negligent misrepresentation and breach of contract.
The Board alleged that the auditors failed to detect and/or
report that the City Colleges' treasurer was engaged in illegal,
inappropriate and highly risky trading practices and that the
treasurer's actions violated Illinois law and the Board s
investment policy. The Board further alleged that, had the
auditors reported such violations to the Board, subsequent losses
in excess of $50 million would have been avoided.
Coopers & Lybrand answered the Board s complaint and
asserted affirmative defenses. On November 30, 1995, Arthur
Andersen answered and denied the allegations of the complaint and
pled counterclaims against individual members of the Board for
contribution, breach of fiduciary duty and breach of
misrepresentation. On January 10, 1997, Arthur Andersen filed
its second amended third-party complaint seeking contribution
under the Illinois Joint Tortfeasor Contribution Act (740 ILCS
100/2(a) (West 1992)) from current board members, Ronald Gidwitz,
Terry E, Newman, James A, Dyson, Theresa Fraga, Edward W.
Czadowski, Ferdinand W. Hargrett, and Ralph G. Moore; former
board members Michael N. Mayo and Robert M. Weissbourd; current
City Colleges employees Robert C. Rogers, Michael Wagner and Gary
C. Lonquist; and former City Colleges employee Leonard Sippel.
In count I of its second amended third-party complaint,
Arthur Andersen alleged that the third-party defendants were
reckless and negligent in supervising the investment activities
of the City Colleges former treasurer. In count II, Arthur
Andersen alleged that third-party defendants Rogers and Sippel
failed to determine whether the City Colleges' investment
portfolio complied with its investment policy and applicable
Illinois laws. Arthur Andersen also alleged, in the alternative,
that the Board failed to exercise reasonable care in making its
own independent determinations as to whether the City Colleges'
investments complied with its investment policy and applicable
laws. In count III, Arthur Andersen alleged common law fraud
against third-party defendants Wagner and Lonquist.
On February 5, 1997, the third-party defendants filed a
combined motion to strike and dismiss counts I, II and III of
Arthur Andersen s second amended third-party complaint pursuant
to section 2-615 of the Illinois Code of Civil Procedure (735
ILCS 5/2-615 (West 1992))(the Code), and to dismiss counts I and
II pursuant to section 2-619 of the Code of Civil Procedure (735
ILCS 5/2-619 (West 1992)). On June 18, 1997, Arthur Andersen was
given leave to withdraw count III of its complaint.
After a hearing on the motions, the trial court mailed to
the parties a written order dated June 18, 1997, granting the
third-party defendants motion to dismiss Arthur Andersen s
third-party claims for contribution pursuant to sections 2-615
and 2-619 of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619
(West 1992)). In its order the trial court stated in pertinent
part:
"Plaintiff may not seek contribution from these third-
party defendants, for at least three separate reasons: 1)
The so-called third party defendants are not third parties
at all. They are the plaintiff. The Board acts through
its officers and employees. 2) For a contribution claim to
lie the joint tortfeasors must be liable for the same
injury . Here, the injury complained of by the plaintiff is
the failure of Andersen to detect and to bring to the
attention of the Board that State investment statutes were
being violated. This injury would exist even if the
violation of the State investment statute had caused the
Board to earn money. *** Andersen s negligence and wanton
and wilful conduct claims ignore the question of injury and
instead focus on the question of damages. This is
insufficient to state a contribution claim. [Citation.]
3) Notwithstanding a lot of confusing language in Illinois
case law about the contribution act [sic] applying in cases
where statutory or judicial immunities would defeat a direct
action against a party from whom contribution is sought,
[citations], public policy considerations require a
different result when officials act on behalf of the public,
as is here the case with officers and employees of the
community colleges system. [Citations.]
Arthur Andersen now appeals from the trial court s order dated
June 18, 1997.
We affirm.
OPINION
I
The trial court granted the third-party defendants motion
to dismiss Arthur Andersen s third-party claims for contribution
pursuant to sections 2-615 and 2-619 of the Code of Civil
Procedure (735 ILCS 5/2-615, 2-619 (West 1992)). We review the
trial court's ruling under both of these sections de novo. See
Weatherman v. Gary-Wheaton Bank of Fox Valley, N.A., 286 Ill.
App. 3d 48, 63, 676 N.E.2d 206 (1996); Hutson v. Hartke, 292 Ill.
App. 3d 411, 413, 686 N.E.2d 734 (1997).
Arthur Andersen contends that the trial court erred in
finding that the Illinois Local Governmental and Governmental
Employees Tort Immunity Act (745 ILCS 10/1-101 et seq. (West
1992)) (the Tort Immunity Act) applies to the third-party
defendants' conduct.
In the trial court, the third-party defendants claimed that
they were immune from suit under one or more of sections 2-201,
2-202, 2-204 and 2-205 of the Tort Immunity Act. 745 ILCS 10/2-
201, 2-202, 2-204, 2-205 (West 1992). Arthur Andersen contends
that the trial court erred in dismissing its third-party
complaint because there is nothing on the face of its third-party
complaint that demonstrates the applicability of the Tort
Immunity Act. Rather, Arthur Andersen asserts that the case
should have proceeded to trial because the affirmative defense of
statutory immunity requires proof of requisite supporting facts.
Arthur Andersen further contends that the Tort Immunity Act is
inapplicable because none of the Act's provisions apply to the
conduct alleged. Finally, Arthur Andersen argues, in the
alternative, that specific factual allegations of willful and
wanton conduct that defeat the asserted immunities were
sufficiently pled.
The trial court did not cite a specific section of the Tort
Immunity Act in its ruling dismissing Arthur Andersen's
contribution action. However, we note that the trial court's
decision to dismiss the third-party complaint can be sustained on
any ground warranted, regardless of whether the trial court
specifically relied upon such ground. Messenger v. Edgar, 157 Ill. 2d 162, 177, 623 N.E.2d 310 (1993). We believe the trial
court properly dismissed Arthur Andersen's third-party complaint
as the complaint established, on its face, that the third-party
defendants were immune from liability under section 2-201 of the
Tort Immunity Act. Furthermore, we believe that Arthur Andersen
did not sufficiently plead allegations of willful and wanton
conduct that would bar the asserted immunities.
Under section 2-201 of the Tort Immunity Act, a public
employee is immune from liability for a determination of policy
or the exercise of discretion. 745 ILCS 10/2-201 (West 1992).
Section 207 of the Tort Immunity Act provides that a public
employee is an employee of a local public entity. 745 ILCS 10/1-
207 (West 1992). The City Colleges is a local public entity
pursuant to the Illinois Public Community College Act (110 ILCS
805/1-1 et seq. (West 1992). Furthermore, as the board of a
community college district, the third-party defendants who
comprise the Board in this case constitute a local public entity
within the meaning of section 1-206 of the Tort Immunity Act.
745 ILCS 10/1-206 (West 1992). Section 2-201 of the Tort
Immunity Act provides:
"Except as otherwise provided by Statute, a public
employee serving in a position involving the determination
of policy or the exercise of discretion is not liable for an
injury resulting from his act or omission in determining
policy when acting in the exercise of such discretion even
though abused." (Emphasis added.) 745 ILCS 10/2-201 (West
1992).
When application of the doctrine of public official immunity
is urged, the critical question is whether the employee's conduct
was "discretionary" or merely "ministerial," with the employee or
government official incurring liability only where the actions at
issue were not "discretionary." McKay v. Kusper, 252 Ill. App.
3d 450, 460, 624 N.E.2d 1140 (1993). Discretionary acts are
those that require personal deliberation, decision and judgment,
while ministerial acts are those amounting to the performance of
a task in accordance with an order. Bonnell v. Regional Board of
School Trustees, 258 Ill. App. 3d 485, 489, 630 N.E.2d 547
(1994). Immunity will not attach unless the injury alleged
results from an act performed or omitted by the employee in
determining policy and in exercising discretion. Harinek v. City
of Chicago, No. 82155 (February 20, 1998).
In its third-party complaint, Arthur Andersen alleged that,
at the time the alleged conduct occurred, each third-party
defendant was either a board member or employee of the City
Colleges. In addition, Arthur Andersen alleged, inter alia, that
the third-party defendants determined that the City Colleges
should undertake an investment strategy. The complaint further
alleged that the third-party defendants "knowingly approved of
certain investments because of the greater returns they were
expected to provide," "ratified [the treasurer's] actions and
investment approach," failed to appoint a competent treasurer
with formal financial training and failed to either inform
themselves of the composition of their investment portfolio, or
failed to exercise reasonable care in making their own
independent determinations as to whether their investments
complied with the applicable laws. We believe that Arthur
Andersen's complaint established, on its face, that the third-
party defendants were public employees who were immunized from
liability under the Tort Immunity Act. In our view, the alleged
conduct describes acts and omissions of the third-party
defendants as they acted in their official capacities as public
employees for the City Colleges in determining policy and in
making discretionary decisions pursuant to that policy within the
meaning of section 2-201 of the Tort Immunity Act.
At oral argument, Arthur Andersen argued that the third-
party defendants were not immune under the Act because they were
not sued in their official capacities as public employees.
Arthur Andersen's argument is illogical and inconsistent with the
allegations made in its complaint. Throughout its pleadings and
in the briefs on appeal, Arthur Andersen never alleged or argued
that the third-party defendants acted other than in their
official capacities. For example, in paragraph 60 of its third-
party complaint, Arthur Andersen alleged: "At all relevant times,
by virtue of their positions as officers having significant
responsibility for financial matters, third-party defendants
Rogers, Lonquist and Wagner knew or recklessly failed to know the
composition of City Colleges' investment portfolio ***."
(Emphasis added.) We fail to see how the conduct alleged
occurred outside the third-party defendants' capacities as City
Colleges employees and/or board members.
Furthermore, it is our view that Arthur Andersen's
allegations that the third-party defendants acted in a willful
and wanton fashion are simply not cogent. Section 2-202 of the
Tort Immunity Act provides:
"A public employee is not liable for his act or
omission in the execution or enforcement of any law unless
such act or omission constitutes willful and wanton
conduct." (Emphasis added.) 745 ILCS 10/2-202 (West 1992).
Arthur Andersen maintains that the trial court erred in
dismissing its complaint under section 2-202. We disagree.
Section 1-210 of the Tort Immunity Act defines willful and wanton
conduct as "a course of action which shows an actual or
deliberate intention to cause harm, or if not intentional, shows
an utter indifference to or conscious disregard for the safety of
others or their property." 745 ILCS 10/1-210 (West 1992). After
reviewing Arthur Andersen's third-party complaint, it is our view
that Arthur Andersen failed to plead specific facts that show
that the third-party defendants acted intentionally, or with a
conscious disregard for the well-being of the City Colleges'
investments. Moreover, we agree with the third-party defendants
that Arthur Andersen's allegations sound more in ordinary
negligence than willful and wanton misconduct. Absent specific
claims of willful and wanton misconduct, the third-party
defendants are immune from liability for the conduct of which
Arthur Andersen complains.
II
Arthur Andersen also contends that even if the third-party
defendants' conduct is protected by the Tort Immunity Act, its
action for contribution prevails over that immunity. We
disagree.
The Illinois Supreme Court adopted the doctrine of
contribution among joint tortfeasors in Skinner v. Reed-Prentice
Division Package Machinery Co., 70 Ill. 2d 1, 374 N.E.2d 437
(1977). The Skinner decision was later codified by the
legislature in the Illinois Contribution Joint Tortfeasor
Contribution Act (740 ILCS 100/0.01 et seq. (West 1992)) (the
Contribution Act). Section 2(a) of the Contribution Act
provides:
"Except as otherwise provided in this Act, where 2 or
more persons are subject to liability in tort arising out of
the same injury to person or property, or the same wrongful
death, there is a right of contribution among them, even
though judgment has not been entered against any or all of
them." 740 ILCS 100/2(a) (West 1992).
The right to contribution is premised on the notion that a party
should not be forced to pay more than its proportionate share of
a liability shared with another culpable party. Ramsey v.
Morrison, 175 Ill. 2d 218, 224, 676 N.E.2d 1304 (1997). The
right to contribution, however, will occasionally clash with an
immunity from direct suit possessed by the party from whom
contribution is sought. Ramsey, 175 Ill. 2d at 225. For
example, in Doyle v. Rhodes, 101 Ill. 2d 1, 461 N.E.2d 382
(1984), the Illinois Supreme Court held that a party's immunity
from direct suit by the plaintiff may not necessarily immunize
that party from a contribution claim by a defendant sued by the
plaintiff. However, the supreme court later held in Ramsey v.
Morrison, 175 Ill. 2d 218, 676 N.E.2d 1304 (1997), that the right
of contribution will not always prevail over the competing
immunity. The supreme court instructed courts to balance the
policy considerations supporting contribution against those
supporting immunity to determine which doctrine should prevail in
a particular case. Ramsey, 175 Ill. 2d at 225. Accordingly,
Illinois courts have balanced such policy concerns in cases where
the law of contribution has clashed with statutory immunities
that would defeat direct actions.
In some cases, the law of contribution has prevailed over
immunity principles. See Doyle v. Rhodes, 101 Ill. 2d 1, 461 N.E.2d 383 (1984); Stephens v. McBride, 97 Ill. 2d 515, 455 N.E.2d 54 (1983); Moon v. Thompson, 127 Ill. App. 3d 657, 469 N.E.2d 365 (1984); Hartigan v. Beery, 128 Ill. App. 3d 195, 470 N.E.2d 571 (1984). However, many of these cases involved
interspousal or parent-child immunity in which the appellate
courts held that the relationships sought to be protected by the
immunity were not affected by the third-party suit to any extent
greater than that already allowed by law. See Hartigan v. Beery,
128 Ill. App. 3d 195, 470 N.E.2d 571 (1984); Moon v. Thompson,
127 Ill. App. 3d 657, 469 N.E.2d 365 (1984). For example, in
Moon v. Thompson, 127 Ill. App. 3d 657, 464 N.E.2d 365 (1984),
the appellate court held that parent-child immunity did not bar a
contribution action. There, the minor plaintiff, while riding
his bicycle, was struck by an automobile driven by the defendant.
The defendant then sought contribution from the minor's parents,
alleging that they were negligent in failing to fulfill a
statutory duty to instruct their child in regard to the laws
pertaining to the operation of a bicycle by a child under section
11-1501(b) of the Illinois Vehicle Code (Ill. Rev. Stat. 1977,
ch. 95 1/2, par. 11-1501(b)). Moon, 127 Ill. App. 3d at 658.
The parents argued that a parent's authority, discretion and
control in rearing a child should prevail over the Contribution
Act. The appellate court disagreed and held that the discretion
and control of the parents were already circumscribed by the
legislature's imposition of a specific statutory duty to oversee
their child's actions with respect to the operation of a bicycle.
The appellate court also noted that the parent-child immunity
doctrine is a doctrine that has been steadily eroded by Illinois
courts. Moon, 127 Ill. App. 3d at 661.
In other cases, however, the immunity has prevailed over the
law of contribution. See Buell v. Oakland Fire Protection
District Board, 237 Ill. App. 3d 940, 605 N.E.2d 618
(1992)(holding that the public policy considerations supporting
public officials' immunity required that the immunity be applied
to bar contribution actions as well as direct actions); Stephens
v. Cozadd, 159 Ill. App. 3d 452, 512 N.E.2d 812 (1987); Lietsch
v. Allen, 173 Ill. App. 3d 516, 527 N.E.2d 978 (1988); Martin v.
Lion Uniform Co., 180 Ill. App. 3d 955, 536 N.E.2d 736 (1989).
In Buell, the appellate court held that the policies underlying
statutory immunity granted to public service rescue services
outweighed the policies supporting the law of contribution.
Buell, 237 Ill. App. 3d at 943-44.
In the case sub judice, we must balance the policy
considerations supporting immunity for government officials under
the Tort Immunity Act against the policy considerations
supporting the law of contribution. We believe Stephens v.
Cozadd, 159 Ill. App. 3d 452, 512 N.E.2d 512 N.E.2d 812 (1987),
cited by the third-party defendants, is instructive.
In Stephens, the appellate court held that the common law
public officials' immunity barred a contribution action against a
flagman on a state highway crew. The court noted that the
doctrine of immunity for public officials is based upon the
policy that public officials should be shielded from liability so
that they are free to exercise their judgment based solely on
their perception of the public's needs. Stephens, 159 Ill. App.
3d at 456. The appellate court stated:
"[P]ublic officials' immunity is grounded on the belief
that officials ought to be shielded from personal liability
for decisions made and actions taken in the performance of
their employment. If a public official is haunted by the
possibility of facing devastating personal liability for
each employment decision and action which may inadvertently
cause harm to another, employee performance will most
certainly be hampered and, indeed, it may be difficult to
find individuals willing to serve as public officials."
Stephens, 159 Ill. App. 3d at 458.
We believe that the policy considerations detailed in
Stephens are present in the instant case. The purpose of the
Tort Immunity Act is to protect local governments and their
employees from liability arising out of the operation of
government. DiMarco v. City of Chicago, 278 Ill. App. 3d 318,
322, 662 N.E.2d 525 (1996). The board members in the instant
case are public servants who serve without compensation. See
section 3-7 of the Public Community College Act (110 ILCS 805/3-7
(West 1992)). The possibility of incurring multimillion dollar
liability could chill their willingness and deter them from
providing such a service. Such public policy considerations
require that the Tort Immunity Act prevail over Arthur Andersen's
right to contribution. Therefore, we hold that the trial court
was correct in finding that the asserted immunities should
prevail and in dismissing Arthur Andersen's contribution action.
III
Arthur Andersen also argues that the trial court erred in
holding that the injury for which it seeks contribution is not
the same injury as that for which the Board seeks recovery from
Arthur Anderson. We disagree.
Section 2(a) of the Contribution Act provides that there is
a right of contribution among joint tortfeasors where "2 or more
persons are subject to liability in tort arising out of the same
injury to person or property." (Emphasis added.) 740 ILCS
100/2(a) (West 1992). Moreover, under section 2-406 of the
Illinois Code of Civil Procedure (735 ILCS 5/2-406 (West 1994)),
a third-party action cannot be used to maintain an entirely
separate and independent claim against a third party, even if
that claim arises out of the same general set of facts as the
main claim. People v. Brockman, 143 Ill. 2d 351, 364-65, 574 N.E.2d 626 (1991).
Here, the injury that the plaintiff, the Board, complains of
is the failure of Andersen to detect that state investment
statutes and the Board's investment policy were being violated.
However, Arthur Andersen seeks contribution for the alleged
failure of individual members of the Board and employees of the
City Colleges to appoint a competent treasurer, to conduct
independent review of the various investments, or to conduct
reasonable review of their investments. In our view, Arthur
Andersen improperly attempts to seek contribution for an entirely
separate and independent claim and fails to seek contribution for
a liability in tort arising out of the same injury from that
which the plaintiff seeks from Arthur Andersen, as is required
under the Contribution Act. Accordingly, the trial court was
correct in dismissing Arthur Andersen's third-party complaint on
that basis.
Arthur Andersen finally argues that the trial court erred in
ruling that the third-party defendants are identical to the
plaintiff, the Board. We see no error in the trial court's
decision.
Section 2-406 of the Code is the procedural device that
enables a defendant in a lawsuit to bring an additional party
into an action and provides as follows:
"[A] defendant may by third-party complaint bring in as
a defendant a person not a party to the action who is or may
be liable to him or her for all or part of the plaintiff's
claim against him or her." 735 ILCS 5/2-406(b) (West 1994).
A proper third-party action requires derivative liability where
the liability of the third-party defendant is dependent on the
liability of the third-party plaintiff to the original plaintiff.
Brockman, 143 Ill. 2d at 368. Accordingly, the basis for most
third-party actions has been indemnity or contribution.
Kerschner v. Weiss & Co., 282 Ill. App. 3d 497, 502, 667 N.E.2d 1351 (1996). The Contribution Act contemplates the sharing of
common liability by two or more parties who are jointly
responsible for the injury suffered by the plaintiff. Kerschner,
282 Ill. App. 3d at 505.
In the instant case, Arthur Andersen's third-party action is
not based on derivative liability because the third-party
defendants are not jointly liable in tort with Arthur Andersen
for the claims asserted by the Board in the underlying action.
There is no allegation in the third-party complaint that Arthur
Andersen and the third-party defendants, who constitute the
Board, are both responsible for the same injury to the Board.
Rather, the essence of the allegations in Arthur Andersen's
complaint is that the Board's alleged injury of $50 million
dollars is actually caused by the Board's own actions in failing
to review the actions of its treasurer. Thus, because Arthur
Andersen fails to allege joint liability among two or more
parties for a common injury, there is no right of contribution
between Arthur Andersen and the individually named board members
and employees of the City Colleges.
For the foregoing reasons, the judgment of the circuit court
is affirmed.
Affirmed.
SECOND DIVISION
MAY 5, 1998
BOARD OF TRUSTEES OF COMMUNITY COLLEGE, ) APPEAL FROM
DISTRICT NO. 508, COUNTY OF COOK, ) THE CIRCUIT COURT
) COOK COUNTY.
)
Plaintiff, )
)
) No. 95 L 9862
v. )
)
COOPERS AND LYBRAND LLP, ) THE HONORABLE
) DAVID G. LICHTENSTEIN
Defendant. ) JUDGE PRESIDING.
)
)
ARTHUR ANDERSEN LLP, )
)
Defendant and Third-party )
Plaintiff-Appellant; )
)
)
Ronald Gidwitz, Terry E. Newman, )
James A. Dyson, Theresa Fraga, )
Edward W. Czadowski, Ferdinand W. )
Hargrett, Ralph G. Moore, )
Michael G. Mayo, Robert M. Weissbourd, )
Robert C. Rogers, Michael Wagner and )
Gary G. Lonquist, )
)
Third-Party Defendants-Appellees). )
JUSTICE COUSINS delivered the opinion of the court:
Third-party plaintiff-appellant Arthur Anderson LLP appeals
from the lower court s dismissal of its third-party complaint for
contribution against third-party defendants-appellees who are the
individual officers and/or members of the Board of Trustees of
Community College District No. 508, County of Cook, State of
Illinois, commonly known as the City Colleges of Chicago (City
Colleges) and employees of the City Colleges. On appeal, Arthur
Anderson contends that the trial court erred in dismissing its
third-party complaint pursuant to sections 2-615 and 2-619 of the
Code of Civil Procedure (735 ILCS 5/2-615, 2-619 (West 1992))
because: (1) its claims were not barred by the Illinois Local
Governmental and Governmental Employees Tort Immunity Act (745
ILCS 10/1-101 et seq. (West 1992)); (2) the third-party
defendants are liable for the same injury as that for which the
City Colleges seeks recovery from Arthur Anderson; and (3) the
third-party defendants are not identical to the plaintiff.
BACKGROUND
On June 13, 1995, the Board of Trustees of Community College
District No. 508 (the Board) filed a complaint against its former
auditors, Arthur Anderson LLP (Arthur Anderson) and Coopers &
Lybrand LLP (Coopers & Lybrand), alleging professional
malpractice, negligent misrepresentation and breach of contract.
The Board alleged that the auditors failed to detect and/or
report that the City Colleges' treasurer was engaged in illegal,
inappropriate and highly risky trading practices and that the
treasurer's actions violated Illinois law and the Board s
investment policy. The Board further alleged that, had the
auditors reported such violations to the Board, subsequent losses
in excess of $50 million would have been avoided.
Coopers & Lybrand answered the Board s complaint and
asserted affirmative defenses. On November 30, 1995, Arthur
Andersen answered and denied the allegations of the complaint and
pled counterclaims against individual members of the Board for
contribution, breach of fiduciary duty and breach of
misrepresentation. On January 10, 1997, Arthur Andersen filed
its second amended third-party complaint seeking contribution
under the Illinois Joint Tortfeasor Contribution Act (740 ILCS
100/2(a) (West 1992)) from current board members, Ronald Gidwitz,
Terry E, Newman, James A, Dyson, Theresa Fraga, Edward W.
Czadowski, Ferdinand W. Hargrett, and Ralph G. Moore; former
board members Michael N. Mayo and Robert M. Weissbourd; current
City Colleges employees Robert C. Rogers, Michael Wagner and Gary
C. Lonquist; and former City Colleges employee Leonard Sippel.
In count I of its second amended third-party complaint,
Arthur Andersen alleged that the third-party defendants were
reckless and negligent in supervising the investment activities
of the City Colleges former treasurer. In count II, Arthur
Andersen alleged that third-party defendants Rogers and Sippel
failed to determine whether the City Colleges' investment
portfolio complied with its investment policy and applicable
Illinois laws. Arthur Andersen also alleged, in the alternative,
that the Board failed to exercise reasonable care in making its
own independent determinations as to whether the City Colleges'
investments complied with its investment policy and applicable
laws. In count III, Arthur Andersen alleged common law fraud
against third-party defendants Wagner and Lonquist.
On February 5, 1997, the third-party defendants filed a
combined motion to strike and dismiss counts I, II and III of
Arthur Andersen s second amended third-party complaint pursuant
to section 2-615 of the Illinois Code of Civil Procedure (735
ILCS 5/2-615 (West 1992))(the Code), and to dismiss counts I and
II pursuant to section 2-619 of the Code of Civil Procedure (735
ILCS 5/2-619 (West 1992)). On June 18, 1997, Arthur Andersen was
given leave to withdraw count III of its complaint.
After a hearing on the motions, the trial court mailed to
the parties a written order dated June 18, 1997, granting the
third-party defendants motion to dismiss Arthur Andersen s
third-party claims for contribution pursuant to sections 2-615
and 2-619 of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619
(West 1992)). In its order the trial court stated in pertinent
part:
"Plaintiff may not seek contribution from these third-
party defendants, for at least three separate reasons: 1)
The so-called third party defendants are not third parties
at all. They are the plaintiff. The Board acts through
its officers and employees. 2) For a contribution claim to
lie the joint tortfeasors must be liable for the same
injury . Here, the injury complained of by the plaintiff is
the failure of Andersen to detect and to bring to the
attention of the Board that State investment statutes were
being violated. This injury would exist even if the
violation of the State investment statute had caused the
Board to earn money. *** Andersen s negligence and wanton
and wilful conduct claims ignore the question of injury and
instead focus on the question of damages. This is
insufficient to state a contribution claim. [Citation.]
3) Notwithstanding a lot of confusing language in Illinois
case law about the contribution act [sic] applying in cases
where statutory or judicial immunities would defeat a direct
action against a party from whom contribution is sought,
[citations], public policy considerations require a
different result when officials act on behalf of the public,
as is here the case with officers and employees of the
community colleges system. [Citations.]
Arthur Andersen now appeals from the trial court s order dated
June 18, 1997.
We affirm.
OPINION
I
The trial court granted the third-party defendants motion
to dismiss Arthur Andersen s third-party claims for contribution
pursuant to sections 2-615 and 2-619 of the Code of Civil
Procedure (735 ILCS 5/2-615, 2-619 (West 1992)). We review the
trial court's ruling under both of these sections de novo. See
Weatherman v. Gary-Wheaton Bank of Fox Valley, N.A., 286 Ill.
App. 3d 48, 63, 676 N.E.2d 206 (1996); Hutson v. Hartke, 292 Ill.
App. 3d 411, 413, 686 N.E.2d 734 (1997).
Arthur Andersen contends that the trial court erred in
finding that the Illinois Local Governmental and Governmental
Employees Tort Immunity Act (745 ILCS 10/1-101 et seq. (West
1992)) (the Tort Immunity Act) applies to the third-party
defendants' conduct.
In the trial court, the third-party defendants claimed that
they were immune from suit under one or more of sections 2-201,
2-202, 2-204 and 2-205 of the Tort Immunity Act. 745 ILCS 10/2-
201, 2-202, 2-204, 2-205 (West 1992). Arthur Andersen contends
that the trial court erred in dismissing its third-party
complaint because there is nothing on the face of its third-party
complaint that demonstrates the applicability of the Tort
Immunity Act. Rather, Arthur Andersen asserts that the case
should have proceeded to trial because the affirmative defense of
statutory immunity requires proof of requisite supporting facts.
Arthur Andersen further contends that the Tort Immunity Act is
inapplicable because none of the Act's provisions apply to the
conduct alleged. Finally, Arthur Andersen argues, in the
alternative, that specific factual allegations of willful and
wanton conduct that defeat the asserted immunities were
sufficiently pled.
The trial court did not cite a specific section of the Tort
Immunity Act in its ruling dismissing Arthur Andersen's
contribution action. However, we note that the trial court's
decision to dismiss the third-party complaint can be sustained on
any ground warranted, regardless of whether the trial court
specifically relied upon such ground. Messenger v. Edgar, 157 Ill. 2d 162, 177, 623 N.E.2d 310 (1993). We believe the trial
court properly dismissed Arthur Andersen's third-party complaint
as the complaint established, on its face, that the third-party
defendants were immune from liability under section 2-201 of the
Tort Immunity Act. Furthermore, we believe that Arthur Andersen
did not sufficiently plead allegations of willful and wanton
conduct that would bar the asserted immunities.
Under section 2-201 of the Tort Immunity Act, a public
employee is immune from liability for a determination of policy
or the exercise of discretion. 745 ILCS 10/2-201 (West 1992).
Section 207 of the Tort Immunity Act provides that a public
employee is an employee of a local public entity. 745 ILCS 10/1-
207 (West 1992). The City Colleges is a local public entity
pursuant to the Illinois Public Community College Act (110 ILCS
805/1-1 et seq. (West 1992). Furthermore, as the board of a
community college district, the third-party defendants who
comprise the Board in this case constitute a local public entity
within the meaning of section 1-206 of the Tort Immunity Act.
745 ILCS 10/1-206 (West 1992). Section 2-201 of the Tort
Immunity Act provides:
"Except as otherwise provided by Statute, a public
employee serving in a position involving the determination
of policy or the exercise of discretion is not liable for an
injury resulting from his act or omission in determining
policy when acting in the exercise of such discretion even
though abused." (Emphasis added.) 745 ILCS 10/2-201 (West
1992).
When application of the doctrine of public official immunity
is urged, the critical question is whether the employee's conduct
was "discretionary" or merely "ministerial," with the employee or
government official incurring liability only where the actions at
issue were not "discretionary." McKay v. Kusper, 252 Ill. App.
3d 450, 460, 624 N.E.2d 1140 (1993). Discretionary acts are
those that require personal deliberation, decision and judgment,
while ministerial acts are those amounting to the performance of
a task in accordance with an order. Bonnell v. Regional Board of
School Trustees, 258 Ill. App. 3d 485, 489, 630 N.E.2d 547
(1994). Immunity will not attach unless the injury alleged
results from an act performed or omitted by the employee in
determining policy and in exercising discretion. Harinek v. City
of Chicago, No. 82155 (February 20, 1998).
In its third-party complaint, Arthur Andersen alleged that,
at the time the alleged conduct occurred, each third-party
defendant was either a board member or employee of the City
Colleges. In addition, Arthur Andersen alleged, inter alia, that
the third-party defendants determined that the City Colleges
should undertake an investment strategy. The complaint further
alleged that the third-party defendants "knowingly approved of
certain investments because of the greater returns they were
expected to provide," "ratified [the treasurer's] actions and
investment approach," failed to appoint a competent treasurer
with formal financial training and failed to either inform
themselves of the composition of their investment portfolio, or
failed to exercise reasonable care in making their own
independent determinations as to whether their investments
complied with the applicable laws. We believe that Arthur
Andersen's complaint established, on its face, that the third-
party defendants were public employees who were immunized from
liability under the Tort Immunity Act. In our view, the alleged
conduct describes acts and omissions of the third-party
defendants as they acted in their official capacities as public
employees for the City Colleges in determining policy and in
making discretionary decisions pursuant to that policy within the
meaning of section 2-201 of the Tort Immunity Act.
At oral argument, Arthur Andersen argued that the third-
party defendants were not immune under the Act because they were
not sued in their official capacities as public employees.
Arthur Andersen's argument is illogical and inconsistent with the
allegations made in its complaint. Throughout its pleadings and
in the briefs on appeal, Arthur Andersen never alleged or argued
that the third-party defendants acted other than in their
official capacities. For example, in paragraph 60 of its third-
party complaint, Arthur Andersen alleged: "At all relevant times,
by virtue of their positions as officers having significant
responsibility for financial matters, third-party defendants
Rogers, Lonquist and Wagner knew or recklessly failed to know the
composition of City Colleges' investment portfolio ***."
(Emphasis added.) We fail to see how the conduct alleged
occurred outside the third-party defendants' capacities as City
Colleges employees and/or board members.
Furthermore, it is our view that Arthur Andersen's
allegations that the third-party defendants acted in a willful
and wanton fashion are simply not cogent. Section 2-202 of the
Tort Immunity Act provides:
"A public employee is not liable for his act or
omission in the execution or enforcement of any law unless
such act or omission constitutes willful and wanton
conduct." (Emphasis added.) 745 ILCS 10/2-202 (West 1992).
Arthur Andersen maintains that the trial court erred in
dismissing its complaint under section 2-202. We disagree.
Section 1-210 of the Tort Immunity Act defines willful and wanton
conduct as "a course of action which shows an actual or
deliberate intention to cause harm, or if not intentional, shows
an utter indifference to or conscious disregard for the safety of
others or their property." 745 ILCS 10/1-210 (West 1992). After
reviewing Arthur Andersen's third-party complaint, it is our view
that Arthur Andersen failed to plead specific facts that show
that the third-party defendants acted intentionally, or with a
conscious disregard for the well-being of the City Colleges'
investments. Moreover, we agree with the third-party defendants
that Arthur Andersen's allegations sound more in ordinary
negligence than willful and wanton misconduct. Absent specific
claims of willful and wanton misconduct, the third-party
defendants are immune from liability for the conduct of which
Arthur Andersen complains.
II
Arthur Andersen also contends that even if the third-party
defendants' conduct is protected by the Tort Immunity Act, its
action for contribution prevails over that immunity. We
disagree.
The Illinois Supreme Court adopted the doctrine of
contribution among joint tortfeasors in Skinner v. Reed-Prentice
Division Package Machinery Co., 70 Ill. 2d 1, 374 N.E.2d 437
(1977). The Skinner decision was later codified by the
legislature in the Illinois Contribution Joint Tortfeasor
Contribution Act (740 ILCS 100/0.01 et seq. (West 1992)) (the
Contribution Act). Section 2(a) of the Contribution Act
provides:
"Except as otherwise provided in this Act, where 2 or
more persons are subject to liability in tort arising out of
the same injury to person or property, or the same wrongful
death, there is a right of contribution among them, even
though judgment has not been entered against any or all of
them." 740 ILCS 100/2(a) (West 1992).
The right to contribution is premised on the notion that a party
should not be forced to pay more than its proportionate share of
a liability shared with another culpable party. Ramsey v.
Morrison, 175 Ill. 2d 218, 224, 676 N.E.2d 1304 (1997). The
right to contribution, however, will occasionally clash with an
immunity from direct suit possessed by the party from whom
contribution is sought. Ramsey, 175 Ill. 2d at 225. For
example, in Doyle v. Rhodes, 101 Ill. 2d 1, 461 N.E.2d 382
(1984), the Illinois Supreme Court held that a party's immunity
from direct suit by the plaintiff may not necessarily immunize
that party from a contribution claim by a defendant sued by the
plaintiff. However, the supreme court later held in Ramsey v.
Morrison, 175 Ill. 2d 218, 676 N.E.2d 1304 (1997), that the right
of contribution will not always prevail over the competing
immunity. The supreme court instructed courts to balance the
policy considerations supporting contribution against those
supporting immunity to determine which doctrine should prevail in
a particular case. Ramsey, 175 Ill. 2d at 225. Accordingly,
Illinois courts have balanced such policy concerns in cases where
the law of contribution has clashed with statutory immunities
that would defeat direct actions.
In some cases, the law of contribution has prevailed over
immunity principles. See Doyle v. Rhodes, 101 Ill. 2d 1, 461 N.E.2d 383 (1984); Stephens v. McBride, 97 Ill. 2d 515, 455 N.E.2d 54 (1983); Moon v. Thompson, 127 Ill. App. 3d 657, 469 N.E.2d 365 (1984); Hartigan v. Beery, 128 Ill. App. 3d 195, 470 N.E.2d 571 (1984). However, many of these cases involved
interspousal or parent-child immunity in which the appellate
courts held that the relationships sought to be protected by the
immunity were not affected by the third-party suit to any extent
greater than that already allowed by law. See Hartigan v. Beery,
128 Ill. App. 3d 195, 470 N.E.2d 571 (1984); Moon v. Thompson,
127 Ill. App. 3d 657, 469 N.E.2d 365 (1984). For example, in
Moon v. Thompson, 127 Ill. App. 3d 657, 464 N.E.2d 365 (1984),
the appellate court held that parent-child immunity did not bar a
contribution action. There, the minor plaintiff, while riding
his bicycle, was struck by an automobile driven by the defendant.
The defendant then sought contribution from the minor's parents,
alleging that they were negligent in failing to fulfill a
statutory duty to instruct their child in regard to the laws
pertaining to the operation of a bicycle by a child under section
11-1501(b) of the Illinois Vehicle Code (Ill. Rev. Stat. 1977,
ch. 95 1/2, par. 11-1501(b)). Moon, 127 Ill. App. 3d at 658.
The parents argued that a parent's authority, discretion and
control in rearing a child should prevail over the Contribution
Act. The appellate court disagreed and held that the discretion
and control of the parents were already circumscribed by the
legislature's imposition of a specific statutory duty to oversee
their child's actions with respect to the operation of a bicycle.
The appellate court also noted that the parent-child immunity
doctrine is a doctrine that has been steadily eroded by Illinois
courts. Moon, 127 Ill. App. 3d at 661.
In other cases, however, the immunity has prevailed over the
law of contribution. See Buell v. Oakland Fire Protection
District Board, 237 Ill. App. 3d 940, 605 N.E.2d 618
(1992)(holding that the public policy considerations supporting
public officials' immunity required that the immunity be applied
to bar contribution actions as well as direct actions); Stephens
v. Cozadd, 159 Ill. App. 3d 452, 512 N.E.2d 812 (1987); Lietsch
v. Allen, 173 Ill. App. 3d 516, 527 N.E.2d 978 (1988); Martin v.
Lion Uniform Co., 180 Ill. App. 3d 955, 536 N.E.2d 736 (1989).
In Buell, the appellate court held that the policies underlying
statutory immunity granted to public service rescue services
outweighed the policies supporting the law of contribution.
Buell, 237 Ill. App. 3d at 943-44.
In the case sub judice, we must balance the policy
considerations supporting immunity for government officials under
the Tort Immunity Act against the policy considerations
supporting the law of contribution. We believe Stephens v.
Cozadd, 159 Ill. App. 3d 452, 512 N.E.2d 512 N.E.2d 812 (1987),
cited by the third-party defendants, is instructive.
In Stephens, the appellate court held that the common law
public officials' immunity barred a contribution action against a
flagman on a state highway crew. The court noted that the
doctrine of immunity for public officials is based upon the
policy that public officials should be shielded from liability so
that they are free to exercise their judgment based solely on
their perception of the public's needs. Stephens, 159 Ill. App.
3d at 456. The appellate court stated:
"[P]ublic officials' immunity is grounded on the belief
that officials ought to be shielded from personal liability
for decisions made and actions taken in the performance of
their employment. If a public official is haunted by the
possibility of facing devastating personal liability for
each employment decision and action which may inadvertently
cause harm to another, employee performance will most
certainly be hampered and, indeed, it may be difficult to
find individuals willing to serve as public officials."
Stephens, 159 Ill. App. 3d at 458.
We believe that the policy considerations detailed in
Stephens are present in the instant case. The purpose of the
Tort Immunity Act is to protect local governments and their
employees from liability arising out of the operation of
government. DiMarco v. City of Chicago, 278 Ill. App. 3d 318,
322, 662 N.E.2d 525 (1996). The board members in the instant
case are public servants who serve without compensation. See
section 3-7 of the Public Community College Act (110 ILCS 805/3-7
(West 1992)). The possibility of incurring multimillion dollar
liability could chill their willingness and deter them from
providing such a service. Such public policy considerations
require that the Tort Immunity Act prevail over Arthur Andersen's
right to contribution. Therefore, we hold that the trial court
was correct in finding that the asserted immunities should
prevail and in dismissing Arthur Andersen's contribution action.
III
Arthur Andersen also argues that the trial court erred in
holding that the injury for which it seeks contribution is not
the same injury as that for which the Board seeks recovery from
Arthur Anderson. We disagree.
Section 2(a) of the Contribution Act provides that there is
a right of contribution among joint tortfeasors where "2 or more
persons are subject to liability in tort arising out of the same
injury to person or property." (Emphasis added.) 740 ILCS
100/2(a) (West 1992). Moreover, under section 2-406 of the
Illinois Code of Civil Procedure (735 ILCS 5/2-406 (West 1994)),
a third-party action cannot be used to maintain an entirely
separate and independent claim against a third party, even if
that claim arises out of the same general set of facts as the
main claim. People v. Brockman, 143 Ill. 2d 351, 364-65, 574 N.E.2d 626 (1991).
Here, the injury that the plaintiff, the Board, complains of
is the failure of Andersen to detect that state investment
statutes and the Board's investment policy were being violated.
However, Arthur Andersen seeks contribution for the alleged
failure of individual members of the Board and employees of the
City Colleges to appoint a competent treasurer, to conduct
independent review of the various investments, or to conduct
reasonable review of their investments. In our view, Arthur
Andersen improperly attempts to seek contribution for an entirely
separate and independent claim and fails to seek contribution for
a liability in tort arising out of the same injury from that
which the plaintiff seeks from Arthur Andersen, as is required
under the Contribution Act. Accordingly, the trial court was
correct in dismissing Arthur Andersen's third-party complaint on
that basis.
Arthur Andersen finally argues that the trial court erred in
ruling that the third-party defendants are identical to the
plaintiff, the Board. We see no error in the trial court's
decision.
Section 2-406 of the Code is the procedural device that
enables a defendant in a lawsuit to bring an additional party
into an action and provides as follows:
"[A] defendant may by third-party complaint bring in as
a defendant a person not a party to the action who is or may
be liable to him or her for all or part of the plaintiff's
claim against him or her." 735 ILCS 5/2-406(b) (West 1994).
A proper third-party action requires derivative liability where
the liability of the third-party defendant is dependent on the
liability of the third-party plaintiff to the original plaintiff.
Brockman, 143 Ill. 2d at 368. Accordingly, the basis for most
third-party actions has been indemnity or contribution.
Kerschner v. Weiss & Co., 282 Ill. App. 3d 497, 502, 667 N.E.2d 1351 (1996). The Contribution Act contemplates the sharing of
common liability by two or more parties who are jointly
responsible for the injury suffered by the plaintiff. Kerschner,
282 Ill. App. 3d at 505.
In the instant case, Arthur Andersen's third-party action is
not based on derivative liability because the third-party
defendants are not jointly liable in tort with Arthur Andersen
for the claims asserted by the Board in the underlying action.
There is no allegation in the third-party complaint that Arthur
Andersen and the third-party defendants, who constitute the
Board, are both responsible for the same injury to the Board.
Rather, the essence of the allegations in Arthur Andersen's
complaint is that the Board's alleged injury of $50 million
dollars is actually caused by the Board's own actions in failing
to review the actions of its treasurer. Thus, because Arthur
Andersen fails to allege joint liability among two or more
parties for a common injury, there is no right of contribution
between Arthur Andersen and the individually named board members
and employees of the City Colleges.
For the foregoing reasons, the judgment of the circuit court
is affirmed.
Affirmed.
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