Archive for September 2012

ARTFUL PLEADING CANNOT AVOID ILLINOIS COURT OF CLAIMS

September 14, 2012

The Illinois Appellate Court recently held that a breach of contract claim, dressed up as a request for injunctive relief, against an arm of the State of Illinois must be litigated in the Court of Claims. The appellate court held that when determining whether sovereign immunity applies to a particular case, “substance takes precedent over form.” The “prospective injunctive relief exception” to the doctrine of sovereign immunity is only properly “invoked where a plaintiff seeks to enjoin a State agency or official from taking actions in excess of his statutory or constitutional authority.”   When a state employee allegedly breaches a duty that arises solely by virtue of his state employment, sovereign immunity will bar any action in circuit court founded on that breach.

In Joseph Const. Co. v. Bd. of Trustees of Governors State Univ., 2012 IL App (3d) 110379, plaintiff Joseph Construction Company brought a claim in the Circuit Court of Will County seeking to recover a balance due under a contract for work performed for Governors State University (GSU). After the completion of the work and a nine-month inspection of any items of warranty work to be corrected, an agent for GSA sent a letter stating that GSU would withhold plaintiff’s final payment. Plaintiff alleged such actions were “outside the scope of [the agent’s] authority as a State Official” and requested the trial court grant a preliminary and permanent injunction, a declaration that GSU breached the construction contract, and damages.

The defendants filed a motion to dismiss the complaint, stating the plaintiff’s claims were barred by sovereign immunity and, that given the nature of the agent’s employment at  GSU,  both the State Lawsuit Immunity Act (745 ILCS 5/1 (West 2010)) and the Court of Claims Act (705 ILCS 505/8 (West 2010)) precluded any redress sought against the defendants in the circuit court. The trial court granted the motion to dismiss, denied the plaintiff’s motion to reconsider and leave to file an amended complaint.

The appellate court agreed with the trial court.  The appellate court acknowledged certain exceptions to the sovereign immunity rule but also stated the Court of Claims Act provides that the Court of Claims has jurisdiction to hear all claims against the State for damages in cases sounding in tort, if a like cause of action would lie against a private person or corporation in a civil suit, as well as claims against the State founded upon any contract.  Among other things, the plaintiff argued that it did not assert breach of contract claims but, instead, equitable claims seeking injunctive and declaratory relief. However, the appellate court found these claims did restate a breach of contract claim, stating courts have disfavored the used of “artful pleading” to “disguise plaintiff’s endeavors” which are “designed to cloak the cause in the attire of equity.” The court also cited that other courts have found that when “the gravamen of the complaint is breach of contract,” a “prayer for injunctive relief” is “nothing more than a thinly disguised breach of contract action.”

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