UPDATED: Court Dismisses Request for Criminal Restitution in 113A Lawsuit; Plaintiffs Will Refile Civilly

A lawsuit alleging concealment and illegal spending was filed against District 113A board members, administrators and the accounting firm Knutte Associates.

Updated, 10 p.m. Saturday

Plaintiffs in a lawsuit filed last year against will replead their case next month after a Cook County judge ruled they could not pursue criminal restitution from the defendants.

In a court hearing Wednesday morning, Judge Rita M. Novak dismissed complaints alleging illegal spending and concealment by former and current District 113A board members and the accounting firm Knutte Associates, according to Clint Krislov, the plaintiffs' attorney.

by the Center for Open Government at IIT Chicago-Kent College of Law on behalf of former District 113A Board Member Janet Hughes and Lemont residents Laura Reigle, Louis Emery and Duane Bradley. 

The complaints claimed District 113A board members ", and then took steps to conceal expenditures by draining funds legally appropriated for other purposes, all in violation of Illinois law," which allegedly resulted in the loss of $12 million in taxpayer money, the complaint said.

Listed as defendants in the lawsuit were Superintendent Tim Ricker; Assistant Superintendent Mary Gricus; former Business Manager Robert Beckwith; current Board Members Lisa Wright and Kevin Doherty; and former Board Members John Wood, Sue Murphy, David Leahy, Gwen O'Malley and Al Albrecht.

Also named as a defendant was Knutte Associates, an accounting firm responsible for the district's financial audits from 2007 to 2010.

The documents claimed District 113A officials "repeatedly caused monies from the district's working cash fund to be diverted or otherwise used in violation of law and without proper notice having been given to District 113A taxpayers" between 2007 and 2010.

On Wednesday, however, the judge dismissed two counts in the suit, stating that taxpayers could not pursue criminal restitution from the defendants, Krislov said.

The first count, which addresses the claims against board members and administrators, was dismissed without prejudice, with leave to refile the complaint with more particularity as to each defendant's actions, and whether they are being sued in their personal or official capacity.

"The claim, per the statute, requested some court actions that judge felt could only be asserted by the state’s attorney or attorney general," Krislov stated in an email. "However, the civil money restitution/personal liability claims were already in the complaint.  We will re-file the complaint with the particularity she directed."

Had the defendants been found guilty of business misconduct in court, they would have been forced to forfeit their positions, pay a fine of as much as $10,000 and be held liable for any sum "unlawfully diverted from the working cash fund or otherwise used."

The second count, which addresses the claim against the accountants, was dismissed with prejudice, due to the court's belief that taxpayers do not have standing to sue the accountants.

Krislov said he believes the judge misunderstood the "derivative" nature of the claim, which he said should be viewed as the taxpayers taking action for the district "to pursue the accountants for malpractice."

"We asked for the opportunity to appeal this decision right away, and we will shortly determine whether to appeal or ask for rehearing by Judge Novak, as we think the dismissal may have arisen from a misunderstanding of the nature of the claim," Krislov stated.

James Petrungaro, the attorney representing District 113A, said Thursday that he was happy with the judge's decision.

"The school district and defendants are very pleased with the court's ruling," Petrungaro said. "We maintain that there is no merit to the plaintiffs' allegations."

Wright, who was the acting president when the lawsuit was filed, echoed Petrungaro's statement in an interview Thursday evening. She called the lawsuit "a political strategy by the plaintiffs" that had "absolutely no merit."

"The bottom line is that lawsuit was dismissed, and I think I speak for the majority of the defendants that we're pleased about that," she said.

Calls to Reigle and Hughes went unreturned last week.

Krislov, however, said he intends to refile documents in Cook County Court next month.

"The ruling here had nothing to do with whether wrongdoing actually occurred," he said. "This is just a step in the legal process, so we'll file the necessary documents to move forward."

Petrungaro said once the documents are filed, the defense will start back from square one. A ruling could take months or even years, he said.

"The court is nowhere close to determining the merits of this case," he said. "It's something that's going to be determined long down the line."

Susan Antonoff August 01, 2011 at 12:08 PM
Is there a lawyer in the house? "The first count, which addresses the claims against board members and administrators, was dismissed without prejudice, with leave to refile the complaint with more particularity as to each defendant's actions, and whether they are being sued in their personal or official capacity."; taken from above. Does this mean that the judge wants the prosecuting team to list each defendant's name and what the plaintiffs think that each defendant specifically did that was criminally illegal? Why wouldn't a prosecuting team do that in the first place?


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