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Quick takes on Thursday's Illinois Supreme Court opinions

Our panel of leading appellate attorneys review Thursday's Illinois Supreme Court opinions in the civil cases Brunton v. Kruger, Cowper v. Nyberg, Skaperdas v. Country Casualty Ins. Co. and Harris v. One Hope United, Inc and provide short summaries for In People ex rel. Madigan v. J. T. Einoder, Inc., McCormick v. Robertson and In re Parentage of Scarlett Z.-D.

CIVIL

Brunton v. Kruger

By Alyssa M. Reiter, Williams, Montgomery & John Ltd.

Finding that neither the Supreme Court nor the appellate court had ever before squarely answered the question, the Court held that the statutory accountant’s privilege belongs to the accountant and not to the client and may be asserted or waived by the accountant.  Further, as part of a legislative scheme enacted to regulate the accounting profession, the common law “testamentary exception” used to defeat the attorney-client privilege may not be used to defeat the accountant’s privilege.

The Supreme Court interpreted section 27 of the Public Accounting Act, which provides that a CPA shall not be required to divulge information which has been obtained by him in his confidential capacity as a CPA.  It held that it was notable that the accountant’s privilege is codified in the Public Accounting Act and is not part of the legislatively created body of evidentiary privileges for other professions.  The Court concluded that the accountant’s privilege was not intended to function purely as an evidentiary rule, but “also as an attribute of the accounting profession.”

After thoroughly reviewing other statutory privileges and legislative history of the Public Accounting Act, the Court held that the privilege belongs to the accountant, not the client.  However, if the client is still living, the privilege does not bar the client from voluntarily producing the information.  If the client is deceased and the accountant invokes the privilege, the information may not be available, even if highly relevant (such as in a will contest, like this case).

Here, the subpoenaed accountant waived the privilege by producing the confidential information to one party to the will contest (the Estate) and thus had to produce it to the other party (the decedents’ daughter).

Cowper v. Nyberg

By Kerry J. Bryson, Office of the State Appellate Defender

When a criminal defendant is sentenced to the Department of Corrections, 730 ILCS 5-4-1(e)(4) requires the circuit clerk to forward to IDOC the number of days, if any, which a defendant already has been in custody and for which he is entitled to credit against his prison sentence. That information is to be provided to the clerk by the sheriff.

In DeAngelo Cowper’s case, his sentencing credits were calculated incorrectly, resulting in his being wrongfully incarcerated for more than four months. Cowper filed a civil complaint against the sheriff and the circuit clerk alleging negligence.  Both defendants filed a motion to dismiss which was granted, and Cowper appealed.

The appellate court reversed the dismissal, holding that Section 5-4-1 (e)(4) implied a private right of action (even though Cowper had only pled negligence and not a statutory cause of action).  The Supreme Court declined to consider whether there was a private right of action under the statute because Cowper had not asserted a statutory cause of action.

The Court went on to consider whether Cowper had a viable negligence claim against the sheriff and clerk.  A cause of action for negligence must plead that the defendant owed a duty of care to the plaintiff, the defendant breached that duty, and the breach was the proximate cause of the plaintiff’s injury. For a public official, liability may arise from the negligent performance of a ministerial task but not a discretionary act. The calculation of credit by the sheriff and the forwarding of that calculation by the clerk are ministerial tasks involving no discretion. Thus, Cowper could plead negligence against the sheriff and clerk.

That being said, however, the Court affirmed the circuit court’s dismissal of Cowper’s complaint against the clerk because Section 5-4-1(e)(4) does not impose an independent duty on the clerk to verify the accuracy of the sheriff’s credit calculation.  The dismissal was without prejudice because it was not yet known whether the sheriff forwarded the wrong number of days to the clerk and the clerk merely passed them along or whether the sheriff forwarded the correct number of days but the clerk then forwarded an incorrect number to DOC.  Thus, Cowper could re-plead his case against the clerk to allege that the clerk received the correct calculation but forwarded the wrong number because, if such facts were proved, it would establish the clerk’s negligence.

The Court reversed the circuit court’s dismissal of the count against the sheriff because Section 5-4-1(e)(4) does impose a duty on the sheriff to transmit an accurate calculation of days in custody and Cowper pled a negligent breach of that duty directly causing him to be wrongfully incarcerated for four-plus months.

Skaperdas v. Country Casualty Insurance Company

By Michael T. Reagan, Law Offices of Michael T. Reagan, Ottawa

Skaperdas v. Country Casualty Ins. Co., No. 117021, is the supreme court’s first examination of whether both insurance agents and brokers are “insurance producers” within the meaning of 735 ILCS 5/2-2201.  That statute provides that “an insurance producer…shall exercise ordinary care and skill in renewing, procuring, binding, or placing the coverage requested by the insured or proposed insured.” Defendants, an insurer and its captive agent, contended that a captive agent is not an “insurance producer” within the meaning of that statutory duty.  The supreme court disagreed, holding that the statute applies to any person required to be licensed to sell insurance, including both agents and brokers.
 
In the course of its analysis, the court found § 2-2201 to be ambiguous.  Therefore, the court turned to the definition of “insurance producer” found in § 500-10 of the Insurance Code.  There, a producer is defined to be a person required to be licensed to sell insurance.  As a matter of statutory construction, the court noted that both statutes related to the same subject of insurance regulation, and that the definition contained in § 500-10 was in existence at the time of the passage of § 2-2201, the statute at issue.
 
The supreme court went on to discuss the nature of the duty imposed, which is tied to the statutory language.  The court stated that the statute does not require an agent to obtain the best possible coverage for a customer, but only requires the agent to exercise ordinary care in obtaining the coverage requested by the insured or proposed insured.  If a captive agent’s company does not offer the coverage requested, the duty may be satisfied by advising the customer that he or she should look elsewhere.  The court further stated that “a duty may not be imposed under § 2-2201(a) based on a vague request to make sure the insured is covered.”

Harris v. One Hope United, Inc.

By Michael T. Reagan, Law Offices of Michael T. Reagan, Ottawa

In Harris v. One Hope United, Inc., No. 117200, the court affirmed the appellate court’s refusal to recognize a new evidentiary privilege in Illinois, the self-critical analysis privilege.  The court stated that it was deferring this question of public policy to the legislature.

Defendant One Hope contracts with DCFS to provide family monitoring services, with the objective of keeping troubled families together.  This suit was brought by the administrator of the estate of a deceased 7-month-old child who drowned when left unattended during a bath while her family was participating in a One Hope program.  One Hope had prepared a report on this death as part of a quality review effort.  One Hope refused to produce the report, claiming privilege, was found in contempt, and then prosecuted this appeal.

The court traced the history of the contended-for privilege, which has primarily occurred in federal courts around the country.  The court also noted that such a privilege had been rejected in two previous Illinois appellate opinions.  The court recognized that the Illinois opinions on point found People ex rel. Birkett v. City of Chicago, 184 Ill.2d 521 (1998) to be an important aspect of the analysis.  Here, the court discussed Birkett at length.  In Birkett, the court stated that the creation of a new privilege is presumptively a legislative task, although a court may recognize an evidentiary privilege in “rare instances,” where four enumerated conditions are met.  The court found Birkett to be instructive in counseling against “judicial infringement upon what is principally a policymaking decision for the legislature,” and also instructive for “consideration of legislative enactments … before deciding whether expressions of public policy therein warrant a ‘rare’ exercise of judicial authority in furtherance thereof.”  The court refused to recognize this privilege, finding it to be more appropriately a subject for legislative action.  

This case is also a useful aggregation of some procedural points involved in “friendly contempt” appeals.  Defense counsel was found in contempt and fined one dollar per day.  Such an order is immediately appealable under Supreme Court Rule 304(b)(5).  On this type of appeal, the underlying discovery order is also subject to review.  On appeal, the arguments were referred to as being those of the client, even though the law firm was “technically the only appellant in the case.”  Both the appellate and supreme courts, while affirming the circuit court’s order compelling production, vacated the contempt order, acknowledging that the lack of compliance with the circuit court’s order involved a “good faith effort to secure appellate interpretation of this rather novel issue.” Brunton v. Kruger,  handed down on the same date as this case, is also a “friendly contempt” appeal on a discovery issue.

In re Parentage of Scarlett Z.-D.

By Michael T. Reagan, Law Offices of Michael T. Reagan, Ottawa

In re Parentage of Scarlett Z.-D., 2015 IL 117904, involves a very young child from Slovakia who came into the lives of the unmarried parties to this litigation, who were living together.  Maria, a Slovakian national, went to live in Slovakia in order to comply with adoption requirements.  Jim supported that effort, but was not permitted to adopt because he was neither a Slovakian national nor married to Maria.  Both parties cared for the child after she was adopted by Maria, with Jim even establishing a $500,000.00 irrevocable trust for the child.  However, Maria and Jim never married, and Jim did not pursue statutory means to assert his legal recognition as a father.  This proceeding commenced after the relationship deteriorated.  The court engaged in a very interesting discussion of various theories advanced by Jim, including functional parenthood.  However, the court found that those theories did not apply.  Notably, the court then held that the equitable adoption doctrine recognized in DeHart v. DeHart, 2013 IL 114137, was a probate concept to determine inheritance, and does not apply to proceedings for parentage, custody or visitation.

McCormick v. Robertson

By Michael T. Reagan, Law Offices of Michael T. Reagan, Ottawa

McCormick v. Robertson, 2015 IL 118230, is a custody case involving unmarried parents in which the mother moved to Nevada with the child.  Previously, the father had filed an action in Illinois under the Parentage Act to establish his relationship with the child and to obtain joint custody.  The court had entered a judgment based upon a joint agreement for parentage, custody and related matters.  After the mother’s move to Nevada, the Illinois court vacated its earlier order as being void for lack of subject matter jurisdiction based on the provisions of the Uniform Child Custody Jurisdiction and Enforcement Act, 750 ILCS 36/101 et seq.  The appellate and supreme courts agreed that the circuit court did not lack subject matter jurisdiction at the time of the entry of the first order.  The supreme court once again stated the principle that the subject matter jurisdiction of the court comes from the constitution, and not from a statute, except in the case of administrative review.  As used in the statute at issue here, “‘jurisdiction’ must be understood as simply a procedural limit on when the court may hear initial custody matters, not a precondition to the exercise of the court’s inherent authority.”  Once a court has subject matter jurisdiction, its judgment will not be rendered void merely because of an error in its determination of the facts or application of the law.

People ex rel. Madigan v. J.T. Einoder, Inc.

By Michael T. Reagan, Law Offices of Michael T. Reagan, Ottawa

In People ex rel. Madigan v. J. T. Einoder, Inc., 2015 IL 117193, the court was faced with a significant amendment to the Environmental Protection Act, 415 ILCS 5/42(e), which authorized the issuance of mandatory injunctions.  That amendment was passed after the landfill in question had ceased operation.  The primary issue before the court was whether the amended statute may be applied retroactively to permit a mandatory injunction after landfill operations had ceased.  The court once again stated that Illinois courts are to follow the approach set forth by the Supreme Court of the United States in Landgraf v. USI Film Products, 511 U.S. 244 (1994).  Here, the court found that the amendment to the Act was not merely procedural but rather “creates an entirely new type of liability – a mandatory injunction – which was not available under the prior statute.”  The court held that applying it retroactively would impose “a new liability on defendants’ past conduct.” 

Posted on March 19, 2015 by Chris Bonjean
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