Madison - St. Clair Record

Sunday, October 13, 2019

Victims of Madison County bid rigging scheme cannot sue bond holder, Supreme Court rules

By Record News | Dec 4, 2016

SPRINGFIELD – Victims of bid rigging at auctions of former Madison County treasurer Fred Bathon can’t sue the holder of his $1 million surety bond, Illinois Supreme Court Justices ruled on Dec. 1.  

They affirmed lower courts that removed RLI Insurance from the roster of defendants in a class action seeking to recover proceeds of the bid rigging.  

“As the appellate court noted, the issue in this case is not whether RLI will ultimately be liable under the public official bond,” Justice James Kilbride wrote.

“Rather, the issue is whether plaintiffs have standing to pursue RLI directly under the bond.”  

He wrote that only the people of the state of Illinois could directly sue RLI.  

Bathon’s bond stated, “I do solemnly swear that I will support the Constitution of the State of Illinois, and that I will faithfully discharge the duties of the office of county collector according to the best of my ability.”  

He would void the bond if he performed all duties as the law prescribes and delivered all books, papers and money to his successor.  

From 2005 to 2009, he favored certain bidders at annual auctions of delinquent property taxes by inflating interest rates to the legal limit of 18 percent.  

He pleaded guilty in 2013, and served 17 months in federal prison.  

Tax buyers Scott McLean, John Vassen, and Barrett Rochman pleaded guilty and served sentences about as long as Bathon’s.  

The three tax buyers paid $25,000 fines, and Bathon paid $20,000.  

U.S. attorney Stephen Wigginton could have sought restitution but decided that calculation of individual damages was impracticable.  

Victims then sued the county, Bathon, auctioneer James Foley, former county clerk Mark Von Dida, ten tax buyers, and RLI Insurance.  

RLI moved to dismiss the claim against it.  

Clinton County associate judge Dennis Middendorff, who took the case as visiting judge, granted the motion in 2014.  

Fifth District appellate judges affirmed him last year.  

By then, Middendorff had retired and the case had passed to Clinton County Associate Judge William Becker.

Plaintiffs appealed to the Supreme Court, with the same result.

“The proper claimant on a statutory public official bond is the named obligee, unless the legislature has expressed in the statutory language its intent to allow others to sue directly on the bond,” Kilbride wrote.  

He wrote that the Court found nothing indicating legislative intent that private citizens might sue for damages on a public official bond.

Ralph Kooy, Tim Eaton, and Jonathan Amarilio, all of Chicago, represented RLI.

Aaron Weishaar of St. Louis represented plaintiffs.

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Illinois Supreme Court Madison County Circuit Court