The Appellate Strategist

Insights on appellate issues, trial consultations, and evaluating appeals

Illinois Supreme Court Holds Trial Courts May Consider Equity on Fact-Bound Motions for Relief from Judgments

By Kirk Jenkins on June 3, 2015 Posted in Illinois

Section 2-1401 of the Illinois Code of Civil Procedure provides that courts may grant relief from a judgment on petition made within thirty days of the original entry of the judgment. The statute further provides that the old common law writs which served similar purposes, such as writs of error coram nobis and coram vobis, bills of review and similar techniques are all abolished.

In the closing days of the May term, the Illinois Supreme Court clarified the procedure to be followed by trial courts in adjudicating such petitions, unanimously holding in Warren County Soil and Water Conservation District v. Walters that courts retained discretion to consider equitable factors, at least in fact-bound motions. Our detailed report on the underlying facts and lower court rulings in Warren County is here. Our report on the oral argument is here.

Warren County arose from a 2005 contract to log a stand of 54 trees on a plot of land in Warren County, Illinois. The defendant signed a contract with a resident of Washington State – the apparent owner of the property – to do the logging. Four years later, the plaintiff filed suit, naming the logging company and various others as defendants, claiming that it actually owned the land on which the trees had stood. The complaint purported to state claims for violations of the Wrongful Tree Cutting Act, trespass, conversion, quantum meruit and negligence.

Counsel for most of the defendants (aside from the alleged owner of the property) failed to answer the complaint. After a case management conference, which counsel for the defendants failed to attend, the court entered an order directing the defendants to answer the complaint. They failed to do so. Plaintiff moved for entry of a default judgment. Defendants failed to oppose the motion or to appear at the hearing on it. So the court entered a default.

A month later, defendants moved to set aside the default judgment under Section 2-1301(e) of the Code of Civil Procedure, 735 ILCS 5/2-1301(e). Subsequently, defendants and their counsel failed to appear for a scheduled case management conference or for the hearing on their motion to vacate. The trial court denied the motion to set aside the default.

About a year later, now represented by new counsel, defendants filed a motion for relief from the judgment under Section 2-1401 of the Code of Civil Procedure, 735 ILCS 5/2-1401. In their motion, defendants contended that they had absolute defenses to the underlying claims as bona fide purchasers for value of logging rights for the land. The trial court concluded that the alleged owner did indeed appear to own the land at issue – meaning that the defendants had viable defenses to all claims – but that People v. Vincent had expressly held that Circuit Courts may not consider equitable factors in deciding Section 2-1401 motions. Accordingly, the court denied the motion for relief from judgment. The Appellate Court affirmed over a dissent.

In an opinion by Justice Kilbride, the Supreme Court unanimously reversed. The Court held that Section 2-1401 was intended as a substitute for the old equitable common law writs for relief from judgments. As such, a petition under 2-1401 necessarily contemplates the potential for equitable relief. In Smith v. Airoom, Inc., the Court had held that three factors were relevant to such a petition: (1) a meritorious defense or claim; (2) due diligence in presenting the defense or claim; and (3) due diligence in filing the petition. The Court made it clear that although Section 2-1401 was not intended to relieve parties of their own or their counsel’s mistakes, relief could be had for excusable neglect. In Airoom, the Court recognized that the requirement of due diligence could be relaxed when equitable considerations demanded it.

Vincent came twenty-one years later. There, the Court held that a trial court was authorized to enter an order on a Section 2-1401 petition without responsive pleadings or conducting a hearing. The Court rejected abuse of discretion review, commenting that earlier cases applying the standard were based on the “erroneous belief” that a Section 2-1401 petition was directed to the court’s equitable powers.

Lower courts have struggled to reconcile Vincent and earlier authority, including Airoom, ever since. In response, the Supreme Court held that Vincent should be understood strictly in light of its facts: a purely legal challenge to the judgment, raising no factual issues at all. Under such circumstances, the trial court was entitled to dispense with a hearing, the Appellate Court applied de novo review, and equity was irrelevant.

A fact-dependent challenge to the judgment such as the one in Airoom raised very different issues, however. The Court held that such a challenge, more closely analogous to the old common law writ coram nobis, continued to be governed by the three-factor Airoom test, and the trial courts had authority to relax the due diligence standard when, in their discretion, equity seemed to demand it.

Having clarified the legal landscape and reversed the Appellate Court’s holding that the legal standard of Vincent applied, the Court declined to go further. Pointing out that the lower courts had been confused about the appropriate legal standards and plaintiff had specifically asked for an opportunity, if the Court agreed with the defendants on the meaning of Vincent, to present additional evidence on remand, the Court remanded the matter back to the Circuit Court to apply the Airoom standard.

Image courtesy of Flickr by Dejan H.

No Cause of Action for Wrongful Death by Suicide, Illinois Supreme Court Holds

By Kirk Jenkins on June 2, 2015 Posted in Illinois

In the closing days of the May term, the Illinois Supreme Court unanimously declined an invitation to create a tort cause of action for wrongful death in cases where the decedent committed suicide. Our detailed summary of the underlying facts and lower court decisions in Turcios v. The DeBruler Company is here. Our report on the oral argument is here.

Turcios arose from a dispute over an apartment in Park City, Illinois. The plaintiff and decedent allegedly entered into a year’s lease for the apartment beginning May 1, 2011, tendering the required security deposit and first month’s rent. Only ten days into the lease, the plaintiff and decedent received what purported to be a 30-days’ notice of eviction. A few days later, the couple received a demand that they vacate the apartment by June 9. They allegedly received another demand on May 31, and on June 7, purportedly received an offer to be transferred to another unit for the month of June rent free. The couple allegedly got two phone calls as well, pressuring them to move, and their tender of June rent was refused. While all this was going on, the couple sought legal advice and was told that the lease was valid and enforceable; they called an agent of the defendant and were allegedly told that the landlord had the right to cancel the lease unilaterally at any time, and the lease was no longer valid.

Even though the couple and their children were still occupying the apartment, demolition began on June 10. Five days later, the decedent committed suicide in the apartment.

The plaintiff’s amended complaint purported to state claims for intentional infliction of emotional distress, wrongful eviction, breach of contract, wrongful death and survival. The Circuit Court granted partial summary judgment dismissing the wrongful death and survival claims, holding that there was no cause of action in Illinois as a matter of law for wrongful death by suicide. The court granted Rule 304(a) language, and an interlocutory appeal was taken. The Appellate Court reversed, holding that the plaintiff could state a cause of action for wrongful death as long as the complaint adequately pled that the emotional distress deliberately caused by plaintiff was a substantial factor in the suicide.

In an opinion by Justice Theis, the Supreme Court reversed. Before the Court, the defendants argued that the concept of foreseeability, embodied in the doctrine of proximate causation, limited the liability of both negligent and intentional tortfeasors. The plaintiff responded, citing scattered cases from other jurisdictions, that where an intentional tortfeasor was a substantial factor in the suicide – in other words, a cause in fact – the defendant was responsible, regardless of whether the harm was foreseeable.

The problem, the Court found, was that if liability was divorced from foreseeability, then the defendant would necessarily face “open-ended and limitless liability for injury, no matter how abnormal, extraordinarily, irregular, or remote the injury may be.” The Court had previously rejected such a notion in Martin v. Heinold Commodities, Inc., but the Appellate Court had held that Heinold was limited to fraud, rather than all intentional torts. But there was no basis for treating intentional infliction of emotional distress any differently than fraud, the Court found.

Still, the Court didn’t slam the door shut permanently on the possibility of a cause of action for wrongful death via suicide. The Court left open the possibility that in a “rare case” a plaintiff might be able to plead facts sufficient to overcome the common law presumption that suicide is always an unforeseeable result of tortious conduct. This was not such a case, however. Therefore, the usual common law presumption applied, the suicide was unforeseeable as a matter of law, and the wrongful death and survival claims failed.

Image courtesy of Flickr by Frank Van de Velde (no changes).

Illinois Supreme Court Affirms Deed Tax, Illuminates Constitutional Tax Analysis

By Kirk Jenkins on June 2, 2015 Posted in Illinois

In the closing days of the recently concluded May term, the Illinois Supreme Court handed down its decision in Marks v. Vanderventer, unanimously upholding the constitutionality of a statewide surcharge on the recording of deeds. Our report on the oral argument in Marks is here.

As enacted in 2005, the statute challenged in Marks required the recorders of deeds around the state to collect a $10 surcharge fom any individual seeking to record a real estate-related document. Nine dollars from each surcharge was to be remitted back to the state to fund the Rental Housing Support Program, a program designed to increase the stock of affordable housing around the state. Of the remaining dollar, fifty cents was allocated for the general revenue fund of the county which collected it and the remaining fifty cents was to reimburse the county for the costs of running the program.

The plaintiffs challenged the surcharge on multiple grounds, alleging that it created an unconstitutional fee office (a government office supported, in whole or in part, by fees collected from users – something expressly barred by the Illinois Constitution) and violated the uniformity, due process and equal protection clauses. The Circuit Court granted a partial summary judgment, holding that the statute created a fee office and was therefore facially unconstitutional. Because the lower court struck down a state statute, the appeal went straight to the Supreme Court, bypassing the Appellate Court.

In an opinion by Justice Burke, the Supreme Court reversed. To begin with, the Court explained, the statute was not a violation of the fee office clause. The office which collected the $1 – the recorder of deeds – neither retained the money itself, nor had discretion about how the money was spent; the funds went straight to the county treasurer. The fee office clause does not bar sharing state revenues with local governmental units in such ways, the Court explained.

The Court turned next to the uniformity clause challenge. The Illinois uniformity clause requires that any tax (other than property taxes) must be (1) based on a real and substantial difference between the people taxed and those not taxed; and (2) bear some reasonable relationship to the object of the legislation or to public policy. The plaintiffs had insisted below that they had no more to do with the evil of unaffordable or unavailable housing than anyone else in the general public, but the Court explained that it had never required perfect reciprocity between the group taxed and the evil sought to be remedied. The question, rather, was whether the benefit of the revenue and the burden of the tax had a reasonable relationship to each other. Since persons recording deeds – i.e., the owners of real estate – could be expected to either benefit or suffer according to the level and stability of property values, which depend in part upon the availability of affordable housing, the Court concluded that the relationship between tax and benefit was sufficiently close.

Turning next to the due process challenge, the Court found that the rational basis test applied. Given the analysis in connection with the uniformity clause, the due process challenge was a foregone conclusion. The Court held that given the impact of the problem of unaffordable housing on property values, there was a rational basis for taxing deed recordation in order to fund a program aimed at rental housing.

The Court briefly commented in closing that there was no need to reach the equal protection clause. The uniformity clause was a higher hurdle for the tax to surmount than the equal protection clause, so if the statute was constitutional under the uniformity clause, it necessarily passed muster under the equal protection clause.

Image courtesy of Flickr by Meredith Harris (no changes).

The Illinois Supreme Court In 2014: A Look At The Stats

By Kirk Jenkins on May 26, 2015 Posted in Illinois

[The following post was originally published on Law360.com on February 12, 2015.]

For the last two years (see here and here), we’ve taken a close statistical look at the previous year’s decisions from the Illinois Supreme Court to see what insights could be gained about the court’s voting patterns and decision-making dynamics. In 2014, the court once again achieved unanimous decisions in quite a high fraction of its civil cases. When the court was occasionally divided, it was the three Republican justices who most often formed the majority, joined by one or more of their Democratic colleagues.

For 2014, the court decided 27 civil cases, plus an additional 34 criminal and quasi-criminal, attorney discipline and mental health commitment cases. As has been the case in recent years, more than 80 percent of the civil docket arose from final judgments and orders. The court decided five cases each where the primary issue was civil procedure or government and administrative law. The court decided four cases each in tort and constitutional law, three in property law, two each relating to domestic relations and public pensions, and one each in election law and employment law.

The percentage of the court’s docket involving dissents at the appellate court dropped this past year from its recent trend; only 14.8 percent of the civil cases involved dissents below. In contrast, 23.5 percent of the court’s criminal, disciplinary and mental health commitment cases involved dissents at the appellate court level. Curiously, the percentage of the civil docket arising from unpublished Rule 23 orders at the appellate court increased significantly in the past year — up to 40.7 percent of the civil docket. The remaining docket was similar, with 32.4 percent of the criminal, disciplinary and mental health commitment cases arising from unpublished orders.

The court’s civil unanimity rate returned to something much closer to its recent trend line this past year, up from 58.8 percent in 2013 to 77.8 percent in 2014. The court’s unanimity rate in its criminal, disciplinary and mental health commitment dockets was similarly high, with 79.4 percent of all cases being decided unanimously.

Once again, the court produced decisions much more quickly in 2014 when there was no dissent. Unanimous civil decisions came down an average of 100.71 days after oral argument — down slightly from the 2013 mean lag time of 103.7 days. Cases involving dissents averaged 193.83 days after oral argument. Unanimous decisions from the court’s criminal, disciplinary and mental health commitment caseload tended to come down significantly quicker, averaging 78.19 days under submission in 2014. Nonunanimous decisions in those areas averaged 186.14 days under submission.

The court reversed in whole or in part in 77.8 percent of its civil cases in 2014. This result is significantly above the court’s trend in recent years. With the exception of 2009 and 2012, the court’s reversal rate in civil cases has fluctuated around the 50 percent mark in civil cases every year since 2000. The court’s reversal rate was significantly lower in criminal, disciplinary and mental health commitment cases in 2014: only 42.4 percent.

Once again, Chicago’s First District comprised a significant portion of the court’s civil docket — 48.1 percent. Eight of the 13 civil cases the court decided from the First District — 61.5 percent — were reversed. Reversal rates were down in civil cases from the Third and Fourth Districts, but remained relatively steady for the Second District. The Fourth District — home of the state capital of Springfield — has performed well in recent years on the court’s civil docket, with a three-year floating reversal rate of only 44.4 percent. Meanwhile, the court reversed all three civil decisions it heard from the Fifth District. Since 2012, the court has reversed 90.9 percent of the civil cases it has heard from the Fifth District.

The court’s 2014 record in criminal, disciplinary and mental health commitment cases was somewhat different. Only 28.1 percent of the docket arose from the First District, and the reversal rate for First District cases collectively was only 44.4 percent. The Second and Fourth District fared quite well this year before the court in such cases, with only 20 percent and 16.7 percent of those two courts’ decisions being reversed. The Third Circuit did nearly as well, with 40 percent of its criminal, disciplinary and mental health commitment decisions being reversed. On the other hand, 80 percent of the Fifth District’s decisions falling on this side of the docket were reversed.

Justice Anne B. Burke wrote for the court’s majority most often this past year in civil cases, with six majority opinions. Justices Robert R. Thomas and Mary Jane Theis wrote five each, Justices Charles E. Freeman, Thomas L. Kilbride and Lloyd A. Karmeier three each, and Chief Justice Garman one. Turning to the criminal, disciplinary and mental health commitment side of the docket, Chief Justice Rita B. Garman led the court with seven majority opinions. Justices Freeman, Kilbride and Thomas wrote six each, Justices Karmeier and Theis four each, and Justice Burke one.

There were comparatively few written dissents in civil cases this year. Justice Freeman led the court with three dissents in civil cases, with Justices Burke, Kilbride, Theis and Chief Justice Garman writing one each. Dissents were no more common on the other half of the docket, with Justice Burke writing four, and Justices Karmeier, Theis and Chief Justice Garman writing one each.

One way of understanding the dynamics of a court is by looking at which justices are most often in the majority when the court is divided. For 2014, Justices Thomas and Karmeier voted with the majority in every one of the court’s nonunanimous civil decisions. The chief justice was right behind, voting with the majority 83.3 percent of the time. Justice Theis voted with the majority in two thirds of divided cases, and Justices Burke, Freeman and Kilbride joined the majority in half of such cases. The pattern is confirmed by confining the sample to the most closely divided civil cases — cases with two or three dissenters. Chief Justice Garman and Justice Theis voted with the majority in three-quarters of such cases, Justice Burke in half, and Justices Freeman and Kilbride in only one-quarter.

There was evidence of a cohesive center on the other side of the docket as well. The chief justice and Justices Thomas, Karmeier and Kilbride voted with the majority in 85.7 percent of nonunanimous criminal, disciplinary and mental health commitment cases. Justice Theis was next, voting with the majority 71.4 percent of the time, with Justice Freeman (57.1 percent) and Justice Burke (42.9 percent) behind. Five members of the court — the chief justice and Justices Thomas, Karmeier, Theis and Kilbride — voted with the majority in eighty percent of the court’s two- and three-dissenter cases on the criminal and quasi-criminal side of the docket.

We turn next to agreement rates between pairs of justices. Justices Thomas and Karmeier voted together in nearly all nonunanimous cases (100 percent civil, 71.4 percent criminal). The chief justice voted with Justice Thomas (83.3 percent/85.7 percent) and Justice Karmeier (83.3 percent/57.1 percent) most of the time as well.

As for which members of the court were most likely to vote with the three Republican justices in closely contested cases, that depended on which side of the docket one reviewed. On the civil side, Justice Theis voted with Justices Thomas and Karmeier two-thirds of the time in such cases, and with the chief justice half the time. Justices Kilbride and Freeman were not far behind Justice Theis. Both voted with the chief justice in two-thirds of nonunanimous civil cases, and with Justices Thomas and Karmeier in half. In contrast, the Democratic members voted together significantly less often. Although Justices Burke and Freeman, and Freeman and Kilbride each voted together in two-thirds of nonunanimous civil cases, Justices Burke and Kilbride agreed in only one third of such cases. Justices Burke and Theis, and Freeman and Theis, voted together in only 16.7 percent of nonunanimous civil cases.

Turning to the criminal, disciplinary and mental health commitment side of the docket, Justice Kilbride was the most likely to vote with the centrist members in closely contested cases, voting with Justice Karmeier in every case, with Justice Thomas 71.4 percent of the time, and with the chief justice 57.1 percent of the time. Justice Theis voted with Justice Karmeier in such cases nearly as often — 85.7 percent of the time — but with Justice Thomas (57.1 percent) and Chief Justice Garman (42.9 percent) less often. Justices Freeman and Burke were the least likely members to vote with the centrist bloc in such cases. Justice Freeman voted with the chief justice in such cases only 57.1 percent of the time, and with Justices Thomas and Karmeier in 42.9 percent of cases. Justice Burke voted with the chief justice 42.9 percent of the time, and with Justices Thomas and Karmeier only 28.6 percent of the time.

The court asked 760 questions during arguments of civil cases decided during 2014: 335 to appellants during their opening remarks, 328 to appellees and 97 during rebuttal. Justice Thomas asked 238 questions. Justice Burke was second with 147, and Justice Theis right behind with 145. After Justice Theis came Chief Justice Garman with 86 questions, Justice Karmeier with 73, Justice Kilbride with 49 and Justice Freeman with 37. Appellants were asked an average of 17 questions per argument, appellees 13.1. The most active arguments were WISAM 1 Inc. v. Illinois Liquor Control Commission (45 questions for the appellant), and People ex rel. Madigan v. Burge (30 questions to the appellee).

Although every appellate lawyer wants questions from the bench, once again the data suggested that all things being equal, a barrage of questions may not be a good sign. Winning appellants averaged 12.95 questions per argument, losing appellants 26.63. Winning appellees averaged 9.71 questions, losing appellees 14.94. Appellees received more questions than their opponents 11 times in 2014’s civil cases, and they lost all 11. On the other hand, appellants prevailed in five of the 13 civil cases where they received the most questions. In nonunanimous reversals, prevailing appellants received an average of 16.83 questions to 17.17 for the appellees. In unanimous reversals, appellants averages 11.15 questions to 13.73 for the appellees.

Six of the seven justices averaged more questions to appellants than to appellees. For four justices — Chief Justice Garman (1.9/1.4) and Justices Burke (3.5/2.5), Freeman (1.1/0.2) and Theis (3.5/2.0), the difference is comparatively significant; for Justices Kilbride (1.0/0.9) and Thomas, (4.7/4.4), the difference is smaller. Justice Karmeier averaged 1.4 questions to each side.

Dividing the cases into unanimous and divided opinions reveals interesting distinctions. Justices Freeman (2.7/0.7) and Karmeier (2.5/1.0) tended to ask more questions to appellants when the court was divided, while Chief Justice Garman (2.2/1.2) and Justice Thomas (7.7/3.4) asked appellees somewhat more questions on nonunanimous courts. On the other hand, Justices Thomas (5.1/3.3) and Theis (4.2/1.0) averaged more questions to appellants when the Court was unanimous.

Once again, close attention to the Justices’ questions gave hints as to how they were likely to vote. Chief Justice Garman (2.2/1.7) and Justices Burke (6.1/1.9) and Theis (6.3/1.8) averaged more questions to appellants that they ultimately voted against than appellants they voted for. Justices Burke (2.7/2.0), Thomas (6.1/1.4) and Theis (2.4/1.5) each averaged more questions to appellees they ultimately voted against. To look at the data another way, Chief Justice Garman (2.2/1.6) and Justices Burke (6.1/2.0), Freeman (0.7/0.1) and Theis (6.3/1.5) each asked more questions of appellants than appellees when they voted to affirm. Justices Burke (2.7/1.9), Thomas (6.1/3.1) and Theis (2.4/1.8) tended to ask more questions of appellees than appellants when they voted to reverse.

Our review of the data for the Illinois Supreme Court’s 2014 civil decisions suggests three lessons for counsel: (1) the court continues to achieve unanimity in a very high fraction of its cases; (2) when the court is unable to agree, the three Republican justices generally are in the majority; and (3) counsel can make educated inferences about what is likely to happen by paying close attention to the questions at oral argument.

For more of our ongoing statistical analysis of the Illinois Supreme Court’s civil decisions since 2000, join us at the Appellate Strategist‘s sister blog, the Illinois Supreme Court Review.

Image courtesy of Flickr by Dennis Van Zuijlekom (no changes).

Illinois Supreme Court Holds Fees and Costs Not Deductible From Health Care Lien

By Kirk Jenkins on May 22, 2015 Posted in Illinois

Yesterday, a unanimous Illinois Supreme Court resolved an important question for the health care industry. In an unanimous opinion by Justice Mary Jane Theis, the Court held in McVey v. M.L.K. Enterprises, LLC that a health care provider’s lien on a tort recovery cannot be reduced by a share of attorneys’ fees and costs before being distributed. Our detailed summary of the facts and lower court opinions in McVey is here. Our report on the oral argument is here.

McVey began when a waitress at a restaurant owned by the defendant dropped a tray of drinks on the plaintiff’s foot. Plaintiff settled the resulting lawsuit for $7,500. The plaintiff filed a petition to adjudicate liens, but ultimately only the hospital which treated the plaintiff appeared at the hearing.

Although the hospital’s lien was $2,891.64, all parties agreed that it was limited to a maximum recovery under the lien statute of $2,500 – one third of the plaintiff’s recovery. In resolving the motion to adjudicate liens, the trial court acknowledged that the Fifth District’s decision in Stanton v. Rea required that, in order to ensure that the plaintiff received the statutory minimum of 30% of the recovery, fees and costs be deducted before the judgment is allocated. However, the court concluded that Stanton was inconsistent with the Supreme Court’s decision in Wendling v. Southern Illinois Hospital, and the court declined to follow the Fifth District’s decision. The Appellate Court reaffirmed Stanton and reversed.

The Supreme Court reversed the Appellate Court. The Court emphasized that each and every time the statute described the calculation of the hospital’s lien, the statute referred to the “verdict, judgment, award, settlement or compromise” – with no mention of any deduction for fees and costs. The Court commented that its holding was consistent with Wendling, which also involved hospital liens. In Wendling, the lower courts had concluded that the hospital’s lien should be reduced by one third to account for fees and costs pursuant to the common fund doctrine. The Supreme Court held that the plaintiffs’ attorneys had not recovered the fund for the benefit of the hospital, and therefore, there was no basis for deducting fees. The same was true in McVey, the Court held – there was no basis for concluding that the plaintiff’s counsel had recovered the fund for the benefit of the hospital, so there was no reason to require the hospital to bear a portion of the costs of the suit.

Image courtesy of Flickr by Bill McChesney (no changes).

Florida High Court to Examine the Scope of a Psychotherapist’s Legal Duty to Prevent an Outpatient’s Suicide

By on May 13, 2015 Posted in Florida

The Florida Supreme Court has accepted review of Granicz v. Chirillo, 147 So. 3d 544 (Fla. 2d DCA 2014), where the Second District reversed a summary judgment in favor of a psychotherapist, finding that plaintiff’s expert testimony established that the psychotherapist owed a legal duty to prevent his outpatient’s suicide. See Chirillo v. Granicz, No. SC14-898.

This case arises from the suicide of Jacqueline Granicz, who had been treated for depression as an outpatient by Dr. Joseph S. Chirillo, Jr. beginning in 2005. In October 2008, Jacqueline called Dr. Chirillo’s office and reported that for about four months “she had not felt right”, was under mental strain and crying easily, was not sleeping well, and was having gastrointestinal problems. Jacqueline attributed these problems to her current antidepressant medication and told Dr. Chirillo’s office that she had stopped taking it. Dr. Chirillo changed Jacqueline’s medication and referred her to a gastroenterologist, but did not insist that she schedule an appointment with him. The next day Jacqueline committed suicide.

Jacqueline’s husband, Robert Granicz, as personal representative of Jacqueline’s estate, sued Dr. Chirillo, alleging that he breached his duty of care in treating Jacqueline. Dr. Chirillo moved for summary judgment arguing that he did not owe a duty to Jacqueline as a matter of law to prevent her from committing an unforeseeable suicide while not in his control. To oppose the motion, Granicz filed the depositions of two experts who testified that the standard of care required Dr. Chirillo to see Jacqueline, assess her condition to determine if she was having thoughts of suicide, and to intervene if necessary. The trial court granted entered final summary judgment against Granicz based on its finding, as a matter of law, that Dr. Chirillo did not owe a duty to prevent the unforeseeable suicide of an outpatient.

The Second District reversed. It found that the trial court in determining whether a duty was owed should have focused broadly on whether “whether the [Dr. Chirillo’s] conduct created a foreseeable zone of risk,” instead of whether Dr. Chirillo could foresee the specific injury that actually occurred. Applying this “foreseeable zone of risk” test, which derives from the Florida Supreme Court’s landmark decision in McCain v. Florida Power Corp., the Second District concluded that Granicz’s expert testimony established that Dr. Chirillo owed a legal duty to Jacqueline that precluded summary judgment. The Second District, however, recognized that its decision conflicts with that of the First District in Lawlor v. Orlando, 795 So. 2d 147 (Fla. 1st DCA 2001).

The parties have completed their briefing in the Florida Supreme Court and oral argument is scheduled for September 2, 2015.

Image Courtesy of Flickr by Sean McGrath (no changes).

Florida High Court to Decide When a Trial Court May Set Aside a Default Judgment

By on May 13, 2015 Posted in Florida

On April 9, 2015, the Florida Supreme Court held oral argument on Santiago v. Mauna Loa Investments, LLC, No. SC13-2194 (review granted May 22, 2014), which will require the Court to clarify the scope of a trial court’s review of an allegedly deficient complaint when determining whether to set aside a default judgment.

Anamaria Santiago leased commercial space from Mauna Loa Investments, LLC. Santiago tripped and fell on the property in 2008 and sued Mauna Loa two years later in 2010. Santiago alleged that Mauna owned, maintained and/or controlled the property at the time of her fall. Mauna’s counsel never filed a responsive pleading and the trial court entered a default against Mauna. Mauna moved to set aside the default arguing that it did not own the property on the date of Santiago’s injury. In support of its argument, Mauna noted that in 2011 Santiago sued Iberia, NV, LLC seeking damages for the same injury. In that suit, Santiago alleged that at the time of the accident, Iberia and Antonio Martinez-Marmol owned the property and that the property was conveyed to Mauna three months after the accident. Shortly after the Iberia suit was filed, the trial court consolidated the Iberia case with the Santiago case. After a jury trial on damages, the trial court entered a final judgment against Mauna for over $1 million.

Mauna appealed to the Third District. The Third District vacated the default and the final judgment and dismissed the complaint for failure to state a claim upon which relief may be granted. The Court rested its conclusions on two rules of law. First, a default judgment cannot be entered against a defendant when the complaint fails to state a cause of action. And second, a motion to set aside a default requires no showing of excusable neglect when the motion demonstrates that the allegations in the complaint do not entitle the plaintiff to relief. The facts demonstrated that Santiago had no viable claim against Mauna because the special warranty deed attached to the Iberia complaint established that Mauna did not own the property on the date of Santiago’s injury. Santiago also admitted that Iberia owned, controlled and maintained the property at that time. To view the district court decision, which is reported at 122 So. 3d 520 (Fla. 3d DCA 2013), click here.

The Florida Supreme Court accepted review because the district court’s decision conflicted with other Florida decisions. In support of conflict review, Santiago argued that the Third District’s decision ignored several fundamental principles of Florida law and procedure including: (1) a court may not look beyond the four corners of a complaint when determining whether the complaint states a cause of action; (2) in looking beyond the complaint, the Third District ignored that: (a) a plaintiff may plead claims in the alternative, and (b) consolidated actions are not merged so as to incorporate the allegations of one action into the other; and (3) the Third District granted relief based on an argument the appellant failed to argue below and presented for the first time on appeal.

At oral argument, the supreme court was troubled by the Third District’s use of the deed attached to the Iberia complaint to determine that the Santiago complaint failed to state a cause of action. The Court also repeatedly noted that the Third District’s focus on ownership alone to find that no duty existed was “fallacious” because maintenance and control could have given rise to a duty and a single deed is not conclusive proof of property ownership.

This article will be updated once the Court decides this case.

Image Courtesy of Flickr by GotCredit (no changes).

Florida High Court Set to Clarify When an Insured Is Entitled to Attorneys’ Fees When an Insurer Initially Denies a Sinkhole Claim

By on May 12, 2015 Posted in Florida

On April 15, 2015, the Florida Supreme Court accepted review of Omega Insurance Co. v. Johnson, No. 5D13-1701, 2014 WL 4375189 (Fla. 5th DCA Sept. 5, 2014), which found that an insured was not entitled to an award of attorneys’ fees under section 627.428, Florida Statutes and the confession of judgment doctrine based on an insurer’s post-suit tender of policy benefits for a sinkhole claim after the insurer initially denied the claim. See Johnson v. Omega Ins. Co., No. SC14-2124.

Omega Insurance Co. issued to Kathy Johnson a homeowner’s policy that contained a provision for sinkhole damage coverage. When Johnson noticed structural damage to her home, she filed an insurance claim with Omega, asserting that the damage was caused by sinkhole activity on the property. Omega investigated the claim in accordance with chapter 627 by retaining a professional engineering and geology firm to conduct testing. The firm’s report concluded that sinkhole activity was not a cause of the damage to Johnson’s property. Based on the report, Omega denied Johnson’s claim. Instead of availing herself of the right to participate in a neutral evaluation program, Johnson retained a civil engineering firm to evaluate the cause of the damage to her home. Johnson’s firm found that sinkhole activity did cause the structural damage.

Johnson then filed suit against Omega for failing to pay her policy benefits. Upon motion by Omega, the trial court stayed the litigation to allow a neutral evaluation to take place. The neutral evaluation report agreed with the report issued by Johnson’s firm. Upon receipt of the report, Omega paid the policy benefits. Johnson then moved for an award of attorneys’ fees under section 627.428, Florida Statutes which provides that “[u]pon the rendition of a judgment or decree . . . against an insurer and in favor of any named . . . insured . . . under a policy or contract executed by the insurer, the trial court . . . shall” award the insured its reasonable attorneys’ fees. Based upon the confession of judgment doctrine, which equates an insurer’s tender of policy benefits or a settlement agreement with a “judgment” under § 627.428, the trial court granted the motion.

Omega appealed and the Fifth District reversed, finding that Omega’s initial denial was not wrongful or unreasonable. The Court’s conclusion was buttressed by several facts: (1) Omega complied with its statutory obligations under chapter 627 by retaining an engineer to identify the cause of loss and issue a report; (2) The report, which is presumed correct by statute, found that sinkhole activity was not the cause of the damage; (3) Before filing suit, Johnson failed to present her countervailing report to Omega, failed to at least notify Omega that she disagreed with its report or failed to further attempt to discuss her claim with Omega.

This article will be updated once the Court decides this case.

Image Courtesy of Flickr by Seattle Municipal Archives (no changes).

Unanimous Illinois Supreme Court Strikes Down State Public Pension Reform Act

By Kirk Jenkins on May 8, 2015 Posted in Illinois, Pension Reform Litigation

As we predicted, the Illinois Supreme Court has unanimously struck down the state Public Pension Reform Act. The Court’s opinion was written by Justice Lloyd Karmeier.

We’ve written extensively about the background of the pension debate and the legal issues involved over the past year. For a guide to our previous posts, both here and at the Illinois Supreme Court Review, click here.

The State of Illinois’ five public pension systems have been severely underfunded for generations. The problem hasn’t been caused by a shortfall in employee contributions; the General Assembly has failed, again and again, to make the required contributions. As the Court points out, the shortfalls were apparent as long ago as the Report of the Illinois Pension Laws Commission in 1917. Subsequent Commissions warned of the likely consequences of perpetual underfunding again in 1947 and 1969.

It was “[c]oncern over ongoing funding deficiencies and the attendant threat to the security” of Illinois’ public employee retirees which led directly to the adoption of the Pension Protection Clause by the 1970 Constitutional Convention. That clause provides: “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” According to the Court, the meaning of the Clause is crystal clear: “That article XIII, section 5, created an enforceable obligation on the State to pay the benefits and prohibited the benefits from subsequently being reduced was and is unquestioned.”

The General Assembly’s ongoing failure to adequately fund the pension system comes in for extended criticism in the Court’s opinion. As the Court points out, a 1982 report of the Securities and Exchange Commission characterized the legislature’s funding approach as having “no relation to actuarial calculation.” The legislature enacted another funding plan in 1989, “but it failed as well.” The legislature tried again in 1995, but that plan contained “inherent shortcomings” which led directly to the explosion in pension obligations around the time of the Great Recession. The SEC determined that the State was well aware of the adverse implications of its strategy, and the State’s chronic underfunding was the “primary driver” of an increase in the State’s unfunded liability between 1996 and 2010 of $57 billion, even though “[s]everal neighboring states” attained “far higher funding rates . . . during a similar time frame.” By July 1, 2013, the five state-funded systems contained only 41.1% of the funding needed to pay their liabilities.

The Pension Reform Act of 2013 was the legislature’s latest response to the long-running crisis. The bill attempted to reduce the unfunded liabilities in five ways: (1) delaying by up to five years the date on which employees under the age of 46 can begin receiving benefits; (2) capping the maximum salary that may be considered in calculating a retirement annuity; (3) discarding the system of automatic cost-of-living increases in favor of variable (and lesser) increases; (4) completely eliminating between one and five annual increases depending on the age of the employee; and (5) altering hiow the base annuity amount is calculated for purposes of what is known as the “money purchase” formula.

Five actions were filed challenging the constitutionality of the Act. The principal grounds cited were that the Act violated the Pension Reform Clause, but various complaints also argued that the bill violated the Contracts Clause and the Takings Clause. The Circuit Court granted the plaintiffs’ joint motion for partial summary judgment and invalidated the Act in its entirety on the grounds that it violated the Pension Protection Clause. Because the court had struck down a state statute, the appeal was taken directly to the Supreme Court pursuant to Supreme Court Rule 302.

The first issue – whether the Act violated the Pension Protection Clause – was “easily resolved,” according to the Court. The Clause “means precisely what it says,” the Court wrote: pension benefits are a contractual relationship, and they cannot be diminished. Thus, once an individual begins working for the State, subsequent changes to the Pension Code which have the effect of diminishing the benefits of membership in the Pension System cannot be applied to that individual. “[T]here is simply no way” to reconcile the Act with the Clause, the Court held. “In enacting the provisions, the General Assembly overstepped the scope of its legislative power.”

The Court then turned to the principal focus of the State’s defense of the Act, the State’s claim that the protection of the Clause was subject to an exception under the State’s police power. The Court emphatically rejected the State’s argument. As long ago as 1932, the Court pointed out, it had held that “any departure from the law is impermissible unless justification for that departure is found within the law itself. Exigent circumstances are not enough.”

The State argued that since the Clause makes membership in the Pension system a contractual relationship, benefits are subject to diminishment through the police power under the same circumstances that ordinary contracts are. The Court disagreed. First, pension benefits were not merely protected by the Contract Clause – the 1970 Constitutional Convention had rejected a proposal that pension benefits should solely be protected by the language of the Contract Clause. The Court pointed out that it had long ago rejected the proposition that there was an unstated police power exception to the Pension Clause in Felt v. Board of Trustees. Second, “legislation impairing contracts has actually been upheld against contract clause challenges only rarely.” This was particularly true, as the United States Supreme Court has recognized, when the obligation at issue was purely financial. “If a State could reduce its financial obligations whenever it wanted to spend the money for what it regarded as an important public purpose,” the court wrote, “the Contract Clause would provide no protection at all.”

Although the State had argued during the appeal that it was entitled to a remand to demonstrate the gravity of the financial emergency, the Court held that “it is manifest” that the State could not possibly make the showing which would be necessary to validate the Act, even if a police power exception existed. “[O]ur economy is and always has been subject to fluctuations,” the Court wrote. The possible consequences of chronic underfunding of the pension systems have been well known for decades. “[T]he funding problems which developed were entirely foreseeable.” The State could not claim that alternatives were unavailable; as one Senator pointed out during the debate on the Act, the State could have adopted a new schedule for amortizing the unfunded liabilities, or increased taxes. Thus, the Act wasn’t a last-ditch necessity, in the Court’s view, “it was an expedient to break a political stalemate.”

The United States Constitution forbids “Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole,” the Court wrote. The legislature made no effort in approving the Act to “distribute the burdens evenly among Illinoisans. It did not even attempt to distribute the burdens evenly among those with whom it has contractual relationships.”

The State argued that finding that the Clause is not subject to a police powers exception amounts to holding that the State has surrendered its sovereign authority, “something it may not do.” In frequently eloquent terms, the Court rejected the State’s claim. The sovereign authority rested in the people of Illinois, the Court noted (a point which Justice Karmeier alluded to during oral argument). The expression of that sovereign authority is found in the Constitution, and the legislature “cannot enact legislation that conflicts with provisions of the constitution unless the constitution specifically grants it such authority.” The people surrendered none of their sovereign authority through the Pension Protection Clause, the Court held. Rather, they “simply withheld an important part of it from the legislature because they believed, based on historical experience, that when it came to retirement benefits for public employees, the legislature could not be trusted with more.”

“[T]here simply is no police power to disregard the express provisions of the constitution,” the Court held. Otherwise, “[n]o rights or property would be safe from the State. Today it is nullification of the right to retirement benefits. Tomorrow it could be renunciation of the duty to repay State obligations. Eventually, investment capital could be seized. Under the State’s reasoning, the only limit on police power would be the scope of the emergency.”

“Adherence to constitutional requirements often requires significant sacrifice,” the Court concludes, “but our survival as a society depends on it.” The commands of the Constitution apply just as much in times of crisis as at all other times:

Crisis is not an excuse to abandon the rule of law. It is a summons to defend it. How we respond is the measure of our commitment to the principles of justice we are sworn to uphold . . . Obliging the government to control itself is what we are called upon to do today. The Constitution of Illinois and the precedent of our court admit of only one conclusion: the annuity reduction provisions of Public Act 98-599 . . . violate article XIII, section 5.

Today’s decision, written by one of the Court’s three Republican members, is likely to create a political firestorm in Illinois.

Image courtesy of Flickr by David Wilson (no changes).

Florida High Court Overturns Summary Judgment for Defendant School Board, Deciding it Owed Common Law Duty to Student Athlete

By Erin E. Dardis on May 6, 2015 Posted in Florida

On April 2, 2015, the Florida Supreme Court quashed the Second District Court of Appeal’s decision in Limones v. School District of Lee County, 111 So. 3d 901 (Fla. 2d DCA 2013), and held that the school district owed a common law duty to supervise a student athlete who collapsed during a high school soccer game and that, once injured, the school district owed the student a duty to take reasonable measures and come to his aid to prevent aggravation of his injury. To read the opinion, click here.

This case arises from the collapse of a high school athlete, Abel Limones, on the field during a soccer game. When Abel stopped breathing and had no pulse, his coach and a nurse bystander performed CPR, but Abel was not resuscitated until emergency personnel arrived and used an automated external defibrillator (AED). Abel suffered severe and permanent brain damage and his parents sued the school district, alleging that it was negligent in failing to maintain an AED on or near the soccer field, in failing to make it available for use, and in failing to actually use an AED on Abel. The trial court determined the school district did not have a duty to make available, diagnose the need for, or use an AED and that, even if it did, the school district was statutorily immune from liability.

On appeal, the Second District affirmed the trial court’s decision, noting that while Florida courts had not addressed a school district’s duties in this context, the Fourth District in L.A. Fitness v. Mayer concluded that a business owner does not have a common law duty to provide CPR or maintain or use an AED when a business invitee collapses while exercising at the owner’s facility. The Second District therefore determined that neither the undertaker’s doctrine nor section 1006.165, Florida Statutes, imposed a duty to use an AED on Abel and found that the school district was immune from civil liability under section 768.1325(3), Florida Statutes (2008).

The Florida Supreme Court, however, rejected L.A. Fitness as controlling, finding that the adult customer and the health club stand in a far different relationship than a student and a school district. Florida has mandated the education of minor children, which creates a unique relationship and which triggers a common law duty to supervise and aid students. Furthermore, the Florida legislature has specifically mandated that high schools that participate in interscholastic athletics acquire an AED and train appropriate personnel in its use.

The Court also found that the Second District incorrectly invaded the province of the jury when it considered whether a post injury effort required the school district to make available, diagnose the need for it, or use the AED on Abel. Florida courts have recognized a special relationship between schools and their students based upon the fact that school functions at least partially in the place of parents during the school day and school sponsored activities. This duty to supervise requires teachers and other school employees to act with reasonable care under the circumstances. Therefore, it is for the jury to determine whether, under the relevant circumstances, the school employee has acted unreasonably, and therefore, breached the duty owed.

Lower courts in Florida have recognized that the duty of supervision creates the following specific duties owed to student athletes: 1) schools must adequately instruct student athletes; 2) schools must provide proper equipment; 3) schools must reasonably match participants; 4) schools must adequately supervise athletic events; and 5) schools must take appropriate measures after a student is injured to prevent aggravation of the injury.

In this case, Abel was a student who was injured while he participated in a school sponsored soccer game under the supervision of school officials. Therefore, the school district owed Abel a duty of supervision and to act with reasonable care under the circumstances; specifically, the school district owed Abel a duty to take appropriate post injury efforts to avoid or mitigate further aggravation of his injury.

Having concluded that the school district owed Abel a common law duty, the Court then looked to whether the school district was immune from suit under Florida Statutes § 768.1325. Known as the “Cardiac Arrest Survival Act,” this statute provides that “any person who uses or attempts to use an [AED] on a victim of a perceived medical emergency … is immune from civil liability for any harm resulting from the use or attempted use of such device” and that “any person who acquired the device and makes it available for use … is immune from such liability.” The Court held that this statute creates two classes of parties that may be immune from liability arising from the misuse of an AED: users (actual or attempted) and acquirers. However, acquirers are only entitled to immunity if an AED is actually used or attempted to be used. Because an AED was not used or attempted to be used in this case, the Court found that the school district was not entitled to immunity under § 768.1325. The Court quashed the decision of the Second District granting summary final judgment in favor of the school district.

Justice Canady wrote a dissenting opinion in which he stated that the Court did not have jurisdiction to review the case.

Image courtesy of Flickr by Faungg’s Photos (no changes).