The Appellate Strategist

Insights on appellate issues, trial consultations, and evaluating appeals

Too Late (Part 2): Can Your Fees Request Wait?

By Kirk Jenkins on Posted in Illinois

Earlier today, we previewed Bjork v. O’Meara, a case about the perils of challenging a will too late. Now we preview a case about timing your claim for attorneys fees: Rodriquez v. Department of Financial and Professional Regulation [pdf].

The defendant Department sued Rodriquez for violating the Medical Practice Act. The parties agreed to stay all proceedings while the defendant argued about the rules of game: he believed that the discovery and evidence rules were unlawful. In the end, he had some success: the courts refused to grant him deposition subpoenas, but struck down section 1110.220 of the Department’s rules for administrative proceedings. The Department closed the file, but the plaintiff wasn’t finished — he sued for his legal fees incurred in killing off section 1110.220.

The case turns on Section 55(c) of the Administrative Procedure Act: "In any case in which a party has any administrative rule invalidated by a court for any reason . . . the court shall award the party bringing the action the reasonable expenses of the litigation, including reasonable attorneys’ fees."

But when can such a claim be brought, the Attorney General asked — usually, attorneys’ fees claims are coupled with the underlying action. Since the administrative claim was over when the attorneys’ fees claim started, had the plaintiff waited too long?

No, the Appellate Court held. The statute said nothing about a time limit, and the claim for fees didn’t accrue until the rule was struck down anyway.  The court followed the decision in Town of Libertyville v. Bank of Waukegan, 152 Ill.App.3d 1066, 1073 (1987), holding that a claim for fees was collateral to the underlying action when it was outside the issues in the case and the authorizing statute set no time limit for the claim.

Is a claim for fees lost if it’s not coupled with a challenge to administrative rules? One can imagine an efficiency argument for answering the question "yes," despite the lack of limitations in the statute. We should learn the answer late this year or sometime in 2013 from the Illinois Supreme Court.

Too Late: Suing Over the Will

By Kirk Jenkins on Posted in Illinois

Today in our continuing series of previews for the Illinois Supreme Court, we bring you two cases on the perils of waiting too long: Bjork v. O’Meara and Rodriquez v. Department of Financial and Professional Regulation.

In Bjork [pdf], the plaintiff died, and his will was probated. Plaintiff filed an appearance in the probate proceeding, and sought issuance of citations to discover information and recover property to a certain Trust Company, arguing that she, rather than the estate, was the rightful owner of assets contained in a Trust account. She lost on all counts, and the estate was closed.

So plaintiff sued defendant for tortious interference with a testamentary expectancy, alleging that she had expected to be named pay-on-death beneficiary of the Trust bank account. The defendant cited section 8-1 of the probate Act, which requires that actions to contest the validity of a will must be filed within six months of the admission of the will to probate. 755 ILCS 5/8-1. The Circuit Court agreed and dismissed the suit, and the Appellate Court affirmed.

Bjork involves a traditional conflict of authority. On the one hand, we have Robinson v. First State Bank of Monticello, 97 Ill.2d 174 (1983), which held that an action for tortious interference with testamentary expectancy was governed by the six-month statute of limitations, since it would call into question a probated will. On the other hand, there’s In re Estate of Ellis, 236 Ill.2d 45 (2009), where the Court held that the statute of limitations was not implicated, since plaintiff could not have known he was a possible beneficiary of the will until the statute had run, and a successful will contest would not have provided full relief.

But what if the plaintiff had no claim under intestacy law, so that he or she couldn’t mount a successful will contest? The Appellate Court held it didn’t matter.   The plaintiff clearly knew about the will and her claim, so an action was "available," and even though she had no basis for a will contest, she could and should have brought her tort action while the probate action was pending. Any other result, the Court found, would destabilize wills and estates by allowing the practical invalidation of a will after it emerged from probate.

Do The Taxpayers HAVE To Pay Elected Officials’ Legal Fees?

By Kirk Jenkins on Posted in Illinois

Our second new grant of the May term at the Illinois Supreme Court is McFatridge v. Madigan [pdf]. McFatridge involves a simple question: if an elected official gets sued for his or her official actions, who pays the lawyer? Turns out, there’s conflicting statutory language on that one.

Plaintiff used to be the State’s Attorney — an elective position — in Edgar County. In 1987, he successfully prosecuted two individuals for murder. But many years later, the Federal district court granted both defendants’ habeas petitions. So they both sued the plaintiff — malicious prosecution, false imprisonment, intentional infliction of emotional distress.

Which brings us to the Illinois State Employee Indemnification Act. According to Section 2(b), although the Attorney General should, as a general matter, defend state employees sued for their acts within the scope of their employment, the Attorney General should opt out when the challenged act or omission "was intentional, willful or wanton misconduct." 5 ILCS 350/2(b).

Plaintiff repeatedly asked the Attorney General for representation. In 2005, the Attorney General said no, noting that the plaintiff had been accused of intentional, willful or wanton misconduct. In 2009, same thing. Finally, in 2010, counsel for the plaintiff demanded payment of plaintiff’s attorney’s fees. Same result: the complaint alleges intentional, willful or wanton misconduct, so you’re out of luck. The plaintiff filed a petition for writ of mandamus, asking the Circuit Court to force the Attorney General’s hand, but no luck: complaint dismissed.

The Appellate Court reversed. The Circuit Court’s error, the Court held, was not reading the second paragraph of Section 2(b), which provided that the State "shall pay" the litigation expenses and attorney’s fees of an "elected official" without limitation. So the Attorney General had no discretion, and the Court could order her to comply in mandamus.

Ultimately, the most substantial claim in McFatridge may prove to be the argument that the action was barred by the five-year statute of limitations. 735 ILCS 5/13-205. The Appellate Court held that the statute was not triggered, since the plaintiff’s earlier demands had been for representation in the suit, not payment of attorney’s fees — the first demand for payment of fees had come in 2010, not long before the suit was filed.

Perhaps the Supreme Court took McFatridge in order to adopt the holding statewide. But if the Court wants to pull the teeth of the precedent, it would not be surprising to see a holding that the action is barred by the statute of limitations.

When Can Private Security Stop and Detain?

By Kirk Jenkins on Posted in Illinois

Today we begin a new feature for Appellate Strategist — detailed previews of civil cases just granted review in the latest term of the Illinois Supreme Court. This week we will review the late May grants, and the feature will continue shortly after the end of each term of the Court.

Poris v. Lake Holiday Property Owners Association [pdf] brings several questions before the Court about the powers of private security forces. Plaintiff owns property in the Lake Holiday Development, and is a member of the defendant Association. The Association Board of Directors has adopted rules and regulations for the governance of Association property, including speed limits. The Board hired private security officers to enforce the limits, bought vehicles and equipped the vehicles with oscillating and flashing lights, radar units and audio and video recording equipment. Officers were empowered to issue citations to homeowners for violations.

Plaintiff was stopped by a security officer for speeding on Association property. The encounter played out pretty much like any traffic stop with a policeman would: officer takes driver’s license, driver waits, officer writes citation.

Plaintiff sued the Association, every member of its Board, the chief of security and the officer . Count I sought a declaratory judgment that the practices of the Association’s security department were illegal. Counts II and III alleged breach of fiduciary duty and willful and wanton conduct. Count IV alleged false imprisonment. Counts V through XII alleged breach of fiduciary duty and willful and wanton conduct by each board member, and the Chief of Security. Count XIII alleged nuisance and Count XIV sought an accounting. The Circuit Court wasn’t impressed, tossing the whole thing on summary judgment.

But the Appellate Court held that the driver had stated certain claims after all. The Illinois Code of Criminal Procedure, 725 ILCS 5/107-3, gives private citizens — and a private security officer is nothing more than a private citizen in this state — the authority to make an arrest when he or she has "reasonable grounds to believe than an offense other than an ordinance violation is being committed." But hold on, the Court said — the officer wasn’t stopping the plaintiff for committing an "offense" — plaintiff got stopped for violating the Association’s speeding-on-Association-property rule. So the Association’s stop-and-detain rule may be a problem.

Ever wonder who gets to flash red lights on the highways? Under Illinois law, the answer is "[v]ehicles used by a security company, alarm responder, or control agency." 625 ILCS 5/12-215(b)(13). Well, the parties agreed that the Association wasn’t an "alarm responder" or "control agency" — but the Association claimed it was a "security company." Not so fast, the Appellate Court said, quoting from the Association’s articles of incorporation. So back goes that claim too.

The Court then reviewed several less controversial claims — the Association could use its recording equipment since officers turned it off whenever anyone objected, and it could continue to use the radar gun — the Court turned to the plaintiff’s false imprisonment claim. The result of this one was pretty much a foregone conclusion after the holding on stop-and-detain — the Association clearly had a problem. And so it did: reverse with instructions to enter judgment against the Association with respect to liability.

So what comes next? It’s difficult to predict. There is no obvious conflict in authority in the Appellate Court opinion, so the Supreme Court likely concluded that this was a sufficiently common problem across the state to justify its intervention. Also, note how interconnected the claims are. Speeding is both an Association rule and a commonplace offense; if the Court blurs the distinction, the first declaration and the reversal on false imprisonment fall. Although the Association isn’t a security company, perhaps the security force is — if that’s so, then the declaration regarding those flashing red lights might be overturned too.

Florida Supreme Court Expands Physical Presence Requirement for Mediations

By on Posted in Florida

Effective January 1, 2012, the Florida Supreme Court amended the civil rule regulating mediation procedures in Florida. See In re Amends. to Florida Rule of Civil Procedure 1.720, 75 So. 3d 264 (Fla. 2011). Significantly, the Court added subparagraph c which defines the phrase “party representative having full authority to settle” found in subparagraph b. (Subparagraph b considers a party to have “appeared” at mediation only if the following individuals are physically present: (1) a party or its representative “having full authority to settle without further consultation”; (2) the party’s counsel of record; and (3) an insurer’s representative for any insured party who has full authority to settle up to the amount of plaintiff’s last demand or policy limits.). The changes to the rule are designed to promote the efficacy of mediation by requiring that all parties be represented by persons in attendance who are authorized to settle, while preserving the parties’ ability, by mutual consent, to determine their own course.

Presence of Final Decision Maker

 

The new rule now mandates that the “final decision maker” be present for mediations. Under the new rule, a final decision maker is a “party representative having full authority to settle” without further consultation from supervisory personnel at the insurance company. The party representative must also have “the legal capacity to execute a binding settlement agreement on behalf of the party.” The committee notes clarify that a party representative’s mere decision not to settle does not, in and of itself, signify the absence of full authority to settle. While this requirement may present logistical issues for large corporations and institutions that operate through boards and committees, some courts have been unsympathetic. The practical solution is for parties to recognize the problem in advance of mediation and either by agreement of counsel or application to the court, devise an appropriate resolution.

Exception

This new requirement, however, may be dispensed with by court order or by written stipulation between the parties. There is also some authority predating this rule change that a violation of subparagraph b can be waived by the opposing party proceeding with mediation once it learns of the violation.

Compliance & Sanctions

The amended rule provides an objective standard for determining compliance with the physical presence requirement. New subsection (e) requires identification of the party representative prior to the date of the mediation. It also provides that 10 days before the scheduled mediation, each party must file a written notice identifying the name of the person attending and certifying that the attendee has the legal capacity to bind the settling party. Failure to file the “certificate of authority” creates a rebuttable presumption of failing to physically appear and may subject that party to sanctions which may include an award of mediation fees, attorney’s fees, and costs.

Two New Civil Opinions Coming From the Illinois Supreme Court

By Kirk Jenkins on Posted in Illinois

The Illinois Supreme Court has announced that on the morning of Thursday, May 24, it will file opinions in two civil cases [pdf]:

  • Bonhomme v. James, No. 112393 et al. — (1) Should the tort of fraudulent misrepresentation be extended to a largely personal setting on the facts pleaded? (2) Did the plaintiff plead justifiable reliance sufficient to reach a jury? See Tort Law.
  • McGrath v. McGrath, No. 112792 — Are regular withdrawals from a savings account "income" within the meaning of the Illinois Marriage and Dissolution of Marriage Act, 750 ILCS 5/505, for application of the presumptive 28% child support obligation?  See Domestic Relations Law.

The Gap Between Express and Implied Preemption Narrows In The Ninth Circuit

By on Posted in Mass Torts

The Ninth Circuit Court of Appeals recently shrank universe of state law claims pertaining to Class III medical devices that remain untouched by Riegel express preemption or Buckman implied preemption. In Stengel v. Medtronic, Inc., the Court ruled that a state law failure-to-warn claim premised on FDA regulations was impliedly preempted by the Supreme Court’s decision in Buckman, because it was analytically indistinct from the “fraud-on-the-FDA” claim with which Buckman dealt. To wit, both claims revolved around allegations that the defendant misled the FDA, whether by commission (Buckman) or omission (Stengel). When considered in conjunction with Riegel’s express preemption of state law claims that add to or change the duties of Class III medical device manufacturers under the Medical Device Amendments to the Food, Drug, and Cosmetic Act (“FDCA”), the Ninth Circuit’s robust view of Buckman implied preemption leaves very little room for a plaintiff to state a cognizable state-law cause of action against the manufacturer of a medical device cleared through the FDA’s premarket approval (“PMA”) process. The Court recognized the sharpened dilemma it left potential plaintiffs, but identified state-law manufacturing defect actions as a category of claims that had passed through the Reigel/Buckman gauntlet unscathed, at least in the Seventh Circuit, because they paralleled federal duties (and thus skirted Riegel) without resting solely on the breach of duties created by federal regulation (which would run afoul of Buckman).

Stengel follows the Ninth Circuit’s opinion in PhotoMedex, in which the Court interpreted Buckman to preempt, not only claims in which the plaintiff attempts to enforce the FDCA (because that is the exclusive jurisdiction of the FDA), but any attempt by a plaintiff to prove that a medical device manufacturer violated the FDCA – in the absence of a determination of such a violation by the FDA itself. PhotoMedex, Inc. v. Irwin, 601 F.3d 919, 928 (9th Cir. 2010). Perhaps with PhotoMedex in mind, the Stengel plaintiffs attempted to distinguish Buckman by arguing that the FDA had already determined that Medtronic had violated FDA regulations, and thus they could prove their failure-to-warn claim without second-guessing the FDA’s decision-making. The Ninth Circuit demurred, noting that Buckman was concerned not only with preserving the FDA’s exclusive jurisdiction, but also with avoiding the “extraneous pull” that state-law claims would exert on the Congressionally-mandated FDCA scheme.

The Stengel opinion explicitly acknowledged that federal appellate courts were divided on the issue of whether state law failure-to-warn claims were preempted by Buckman. Interestingly, it aligned itself with the Eighth Circuit’s view, while spending a good amount of space explaining why the Fifth Circuit’s countervailing view was unpersuasive. Whether the Supreme Court takes note of the brewing circuit split, or the Ninth Circuit’s justification of its decision, remains to be seen.

Self-Contradictory Testimony Does Not Necessarily Create A Triable Issue of Fact Requiring Denial of Summary Judgment

By Frederick Baker on Posted in Asbestos, California, Products Liability

It is not uncommon for a deposition witness testifying regarding critical events to make somewhat inconsistent statements under direct- and cross-examination.  For decades California trial courts have denied summary judgment motions on the ground that such inconsistencies create triable issues of fact that must be resolved by juries.  The lower courts cite two California Supreme Court opinions, Clemmer v. Hartford Insurance Co., 22 Cal.3d 865 (1978) and Reid v. Google, Inc., 50 Cal.4th 512 (2010), for the principle that "the task of disambiguating ambiguous utterances is for trial, not for summary judgment."

In Davis v. Foster Wheeler Energy Corp., __Cal.App.4th__, 2012 WL 1435016 (2012) [pdf], the California Court of Appeal was asked to reverse a summary judgment entered against the heirs of a refinery worker who had died of asbestos-related disease and in favor of the manufacturer of an industrial boiler that had been insulated with asbestos.  A witness who had worked with the decedent testified under examination by plaintiffs’ counsel that he had witnessed (while working nearby the decedent) the manufacturer’s employees remove asbestos insulation from pipes attached to the boiler, creating dust that was inhaled by the decedent.  Later in the deposition, while being examined by defense counsel, the witness said the opposite; only insulators hired by the refinery had applied and removed asbestos.  He denied having any knowledge that anyone associated with the manufacturer had ever applied or removed asbestos.  The trial judge, having reviewed the testimony of another percipient witness that corroborated the deponent’s second version of the relevant events, granted summary judgment for the manufacturer:  “[N]o reasonable jury considering this opposing testimony would conclude that the [Foster Wheeler] workers are the workers who removed the asbestos insulation around the Foster Wheeler boilers.”

On appeal plaintiffs argued that Clemmer and Reid required reversal.  The Court of Appeal, affirming, disagreed:  “In this case, the testimony is not ambiguous, but is contradictory, and the issue is . . . whether with [the witness’s] internally contradictory testimony plaintiffs established the existence of a triable issue of fact, and on de novo review [citation] we agree with the trial court that it did not.”

Under Davis counsel need not shy away from bringing a summary judgment motion even where there are internal inconsistencies in the testimony, especially where the testimony favorable to the client is consistent with the weight of other evidence submitted for the trial court’s evaluation.

California Plaintiffs’ Bar Seeks to Overturn Landmark Howell Decision On Medical Special Damages

By on Posted in California

Last August, the California Supreme Court issued one of those once-in-a-generation opinions that cut a wide swath across many areas of tort law. A 6-1 opinion, Howell v. Hamilton Meats held that personal injury plaintiffs are limited to recovering, as medical special damages, the amount plaintiff’s private health insurer actually paid plaintiff’s medical provider in full satisfaction of the bill for services rendered to treat the personal injury. Plaintiffs cannot recover the face amount that their providers billed if their private health insurers paid less in full satisfaction, e.g., where the health insurer and hospital have a prenegotiated contractual agreement on how much the hospital will accept. Typically, the prenegotiated “discount” – though not really a “discount” at all – is much less than the face amount of the bill.

Though the phrase “landmark decision” is often over-used, Howell is one of those rare opinions that truly deserves the label.   It applies to virtually every type of lawsuit in which the plaintiff who claims personal injury had private health insurance which picked up the tab for plaintiff’s medical services. In other words, Howell governs not merely in the traditional auto accident scenario, but any case in which plaintiff seeks to recover for medical services attributable to the injury defendant caused. Howell limits recovery to the “reasonable value” of the service, capped by the amount the provider accepted as payment in full. Some have estimated that Howell represents a net savings to defendants and their liability insurers of as much as $3 billion per year. Full disclosure: Sedgwick’s appellate department filed one of the amici curiae briefs on which the Supreme Court relied in its Howell decision.

The ink on Howell was hardly dry before a bill was introduced in the California Legislature to overrule it. SB 1528 was sponsored by Senate President Pro Tem Darrell Steinberg for the Consumer Attorneys of California (aka the plaintiffs’ bar.) As introduced in February, the two-paragraph bill declared that injured plaintiffs "shall be entitled to recover the reasonable value of medical services provided without regard to the amount actually paid." [pdf]  In other words, the original version was aimed squarely at legislatively-overruling Howell.

But just a few days ago, the measure took an interesting detour. Proponents deleted all of the language that would have overturned Howell, leaving only a shell that says: “it is intent of the Legislature to establish a framework for compensating persons with injuries due to the fault of third parties.”  [pdf] This, in essence, reduces the measure to a “spot bill” – one that contains no substantive provisions, a placeholder declaring the drafters’ “intent” to establish a compensation “framework” in the future. As Dan Walters, blogging for the Sacramento Bee, describes it: the remaining language is “essentially a blank slate that can move through the process and then be filled in later, perhaps in the crush of the legislative session’s final days, with or without a compromise between the warring factions.”

According to California’s official legislative website, a hearing is set for May 8, 2012.

Stay tuned to Appellate Strategist for further reports.

Why Judicial Vacancies Matter, Part II

By Kirk Jenkins on Posted in Federal

Last week, two long-standing judicial emergencies in the district courts ended with the Senate’s confirmation of Gregg Jeffrey Costa as a District Court Judge for the Southern District of Texas and David Campos Guaderrama as a District Court Judge for the Western District of Texas. Judge Costa’s seat had been vacant since June 11, 2010, and Judge Guaderrama’s since February 26, 2009. Nevertheless, judicial emergencies remain in effect with respect to thirty district court judgeships and seven Circuit Court judgeships.

These emergencies are not solely the result of a slow-moving nomination and confirmation process. Congress has failed for a generation to keep up with the fast-growing dockets in the Federal courts. In the district courts, the number of cases per judgeship increased 30% between 1993 and 2010 – from 407 cases per judgeship to 528.  In 1993, 264,038 cases were pending in the district courts; in 2010, 359,594 cases were pending. During that same period, Congress authorized 35 new permanent District Court judgeships – an increase of only 5.5 percent [pdf].

The Circuit Courts are stretched equally thin. In 1993, 48,474 cases were pending in the Circuits – an average of 290 per judgeship. In 2010, 56,790 cases were pending – an average of 340 per judgeship, and an increase of 17 percent. The number of new permanent Circuit judgeships authorized by Congress during that period? Zero [pdf].

Federal judges see the harm done by this crisis firsthand. “I have my own standards,” said Chief District Judge B. Lynn Winmill of the District of Idaho late last year, “but it’s getting very, very hard to meet my standards. I want to have my decisions out in 30 days. Historically, I’ve done OK – until last year.” “Civil litigation has ground to a halt,” said Chief Judge Michael McCuskey of the Central District of Illinois in a Wall Street Journal interview. “You’ve got a right to sue but you do not get a right to a speedy jury trial.” In 1997, Judge McCuskey’s district had 55 civil cases which had been pending more than three years. In 2010, that backlog had grown to 1,200. “Ultimately, I think people will lose faith in the rule of law,” Chief Judge Alex Kozinski of the Ninth Circuit told the Washington Post. “We as a nation believe that if you have a dispute, you go to court and within a reasonable period of time, you get a decision.” During a panel at the Brookings Institution, Judge W. Royal Furgeson voiced his frustration with his overcrowded criminal docket:

I would sometimes look out in the evening at the mass of people assembled in my courtroom and it would take me back to the days when I was a very young lawyer and my firm was assigning me to handle clients in night traffic court . . . The problem, of course, in night traffic court is if my client got fined it was going to be a couple of hundred bucks at the most, and the problem I had with the defendants before me, they were looking at years – potentially years and years in a federal prison.

The four longest-standing judicial emergencies in the Circuit Courts are:

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