Quick Takes on Illinois Supreme Court Opinions Issued Thursday, June 20
The Illinois Supreme Court issued five opinions on Thursday, June 20. The ISBA's panel of leading civil attorneys reviewed the opinions and provided summaries. In Nichols v. Fahrenkamp, the court took on the question of whether quasi-judicial immunity extends to court-appointed guardians ad litem in the context of the administration of funds from a personal injury lawsuit. The court dismissed a man’s class action lawsuit against Walgreens on the grounds that his claim was precluded under the voluntary payment doctrine in McIntosh v. Walgreens Boots Alliance, Inc. In County of Will v. Pollution Control Board, the court upheld the board’s determination that groundwater monitoring regulations were unnecessary to protect groundwater from clean construction and demolition debris and uncontaminated soil fill operations. In Ward v. Decatur Memorial Hospital, the court weighed in on whether res judicata bars a plaintiff from refiling an action because he voluntarily dismissed the third amended complaint after a circuit court involuntarily dismissed several counts from the original, first, and second amended complaints in the initial action. The court addressed whether a court may impose sanctions in the form of attorney fees under Illinois Supreme Court Rule 137(a) against a plaintiff to compensate an attorney defending himself against a frivolous cause of action in McCarthy v. Taylor.
By Amelia S. Buragas, Dorris Law Firm
The common law has long recognized that judges are immune from liability for the acts they perform as part of their judicial duties. The principle of quasi-judicial immunity extends this protection to other actors within the judicial process. In Nichols v. Fahrenkamp, the Illinois Supreme Court took on the question of whether quasi-judicial immunity extends to court-appointed guardians ad litem in the context of the administration of funds from a personal injury lawsuit. The plaintiff, Alexis Nichols, was 11 years old when she received money from a personal injury settlement. The probate court appointed her mother as guardian to administer her monetary estate, and appointed attorney David Fahrenkamp to serve as guardian ad litem. In 2012, Nichols, having reached the age of majority, sued her mother claiming that a portion of the settlement funds had been used for her mother’s benefit. The trial court ruled in Nichols’ favor, but found that her mother was not liable for the entire amount of misappropriated funds because there was a guardian ad litem “who approved the estimates and expenditures.” Nichols then sued Fahrenkamp for legal malpractice. Fahrenkamp filed a motion for summary judgment, which the trial court granted by finding that the attorney was immune from liability because he acted in the limited role of providing recommendations to the court regarding the minor’s best interests. The Fifth District Court, with Justice Goldenhersh dissenting, reversed, finding that immunizing guardians ad litem from tort suits would be inconsistent with the guardian’s “duty to act as an advocate on behalf of plaintiff.”
Thus, the Supreme Court’s analysis hinged on the question of whether the function of the guardian ad litem was to serve as an advocate for the minor or whether the guardian’s role was more closely associated with an impartial judicial process. Writing for a unanimous court, Justice Garman noted that while the duties of the guardian ad litem have evolved over the past 40 years and while the phrase “guardian ad litem” does not have a consistent meaning, “[m]ost Illinois cases in the twenty-first century that involve a guardian ad litem treat that guardian ad litem as a reporter or a witness and not as an advocate.” Therefore, the court held that court-appointed guardians ad litem are entitled to quasi-judicial immunity, so long as the functions actually performed are consistent with that of a witness and not an advocate. The court further concluded that the guardian ad litem in this case was appointed pursuant to the court’s inherent authority as defined in In re Mark W., 228 Ill. 2d 365 (2008), which described the role of the guardian ad litem as the “eyes and ears of the court.” The court also discussed the disparate language pertaining to guardians ad litem in the Probate Act and the Marriage Act and encouraged the General Assembly to review these acts in order to ensure consistent use of the phrase “guardian ad litem” across statutes. The court also instructed that circuit courts appointing guardians ad litem should specify the appointee’s role in the order of appointment in order to reduce the potential for misunderstandings.
By Michael T. Reagan, Law Offices of Michael T. Reagan
McIntosh v. Walgreen Boots Alliance graphically illuminates the operation of the voluntary payment doctrine. Justice Neville’s opinion for the court, with Justice Kilbride dissenting, also provides a useful reminder of the limits of a Section 2-619 motion to dismiss.
Plaintiff’s class action complaint alleged that Walgreens violated the Consumer Fraud Act by unlawfully collecting a City of Chicago tax on purchases of bottled water that were exempt from taxation under the city ordinance which established the tax. In the law, not even water is clear. Some types of bottled-water type products are exempt from taxation. The plaintiff alleges that his purchase of bottled sparkling water should have been exempt from the bottled water tax but that Walgreens improperly charged him tax, as was stated on the receipt for his purchases.
Walgreens succeeded on its motion to dismiss, asserting that the claim was barred by the voluntary payment doctrine. Plaintiff’s retort was the assertion that the voluntary payment doctrine did not apply to claims brought under the Consumer Fraud Act. The appellate court reversed the order of dismissal, determining that the doctrine did not bar a Consumer Fraud Act claim, and that plaintiff had sufficiently alleged deceptive conduct to constitute a potential violation of the Consumer Fraud Act.
The Supreme Court reversed. The court first rejected plaintiff’s contention that the statutory consumer fraud claims are categorically exempt from the voluntary payment doctrine. Merely characterizing an act as illegal is insufficient to defeat its application. Further, nothing in the language of the Consumer Fraud Act reflects a legislative intent to alter the voluntary payment doctrine. “Illinois courts have limited all manner of statutes in derogation of the common law to their express language, in order to effect the least – rather than the most – alteration in the common law.” Having rejected that argument of categorical elimination of the voluntary payment doctrine, the court next decided that the complaint did not plead sufficient facts to defeat its application. The doctrine generally precludes recovery of an erroneous tax which was paid voluntarily and remitted by the retailer to the taxing authority. Although there are exceptions for compulsion, fraud, or misrepresentation of fact, none were found to apply here. The collection of the tax was plainly disclosed on the receipt. Misrepresentations or mistakes of law cannot form the basis of a claim for fraud. An erroneous conclusion as to the legal effective known facts constitutes a mistake of law, and not of fact. Where a misrepresentation of law is discoverable by the plaintiff, it cannot form the basis of an action for fraud. As in so many other instances, all persons are presumed to know the law.
Justice Kilbride’s dissent contends that “the voluntary payment doctrine … is wholly incompatible with the broad protections the legislature intended to provide by enacting the Consumer Fraud Act.” This dissent develops the position that the doctrine has become unsettled, commensurate with the rise of consumer protection statutes. In addition to a domestic analysis, he cites authority for the proposition that “60% of common-law countries have abolished the voluntary payment doctrine.”
By Michael T. Reagan, Law Offices of Michael T. Reagan
Pursuant to direction from the legislature, the Pollution Control Board adopted rules for the use of clean construction or demolition debris, as well as uncontaminated soil, as fill material at clean construction or demolition debris fill operations. The legislature stated that the rules must include “standards and procedures necessary to protect ground water,” and provided an inexhaustive list of 12 ways to accomplish that which the board could consider. One of those expressed potential ways was groundwater monitoring. The rules ultimately promulgated by the board required strong front-end testing and certification requirements for the debris and soil to be used at such sites, but did not include a back-end groundwater monitoring requirement. The Environmental Protection Agency and Will County, as proponents of a groundwater monitoring requirement, and having participated in the rule-making proceedings, unsuccessfully appealed to the Third District. Justice Wright dissented from the appellate majority’s decision that the rules and regulations were not arbitrary and capricious. The state and Will County filed petitions for leave to appeal. Here, the Supreme Court also affirmed, with Justice Kilbride dissenting.
The brevity of this summary is in inverse proportion to the lengthy and thorough opinion authored by Justice Theis for the Court. In setting out the parameters of the Supreme Court’s role, the court noted that the board was acting here in its quasi-legislative function, as opposed to its quasi-judicial function. Regulations issued by the board have the force of law, and are presumptively valid. Judicial review of the board’s adoption of regulations is necessarily limited to the question of whether the action of the board was arbitrary and capricious. In order to “cabin analytically” the challenges to the regulations, the court, in keeping with the approach of the parties, followed the three-part analysis applied in Greer v. Illinois Housing Development Authority, 122 Ill.2d 462 (1988) in determining whether agency action was arbitrary and capricious in an analogous context.
The court both opened and closed its analysis with reference to the 1970 Illinois Constitution, which established that “a foundational public policy in this State is providing and maintaining a healthy environment.” “Determining how best to do that is not the responsibility of this Court, but of the General Assembly and the Board.” The court rejected the contention that not requiring groundwater monitoring was an arbitrary and capricious action by the board. The court concluded by saying that if that action is thought by the legislature to run counter to its mandate to protect groundwater, then the legislature may act further. In addition, the parties to this action may present a written proposal to the board.
By Joanne R. Driscoll, Forde Law Offices LLP
Seven months after addressing the same-cause-of-action prong for res judicata to apply, the Supreme Court considered the finality prong. The specific question here was whether any of the circuit court’s involuntary dismissal orders directed at prior complaints (here there were three), each granting leave to amend, operated as final adjudications that barred the refiling of the plaintiff’s action after he took a voluntary dismissal on the counts that remained. Citing Richter v. Prairie Farms Dairy, Inc., 2016 IL 119518, the court, in an opinion authored by Justice Theis, with Justices Kilbride, Garman, and Burke concurring, reaffirmed that a dismissal without prejudice and with leave to amend does not terminate the litigation or firmly establish the parties’ rights and, thus, has no res judicata effect. The court also expressly overruled Kiefer v. Rust-Oleum Corp., 394 Ill. Ap. 3d 485, 495 (2009), because Kiefer failed to give dispositive weight to the inclusion of the words “leave to amend” and the absence of the words “with prejudice” in the prior orders granting involuntary dismissals.
The Supreme Court also offered guidance as to the manner in which courts faced with a res judicata challenges should analyze prior dismissed complaints. Rather than conduct a count-by-count examination of those complaints to determine whether the plaintiff repleaded each of the dismissed counts, the court instructed that the only consideration is “whether the order dismissing any of the complaints terminated the litigation and firmly established the parties’ right as to any cause of action.” Lastly, the court added the caveat that while the plaintiff has the absolute right to voluntarily dismiss his or her action without prejudice (735 ILCS 5/2-1009(a) (West 2016)), Illinois Supreme Court Rule 219(e) (Ill. S. Ct. R. 219(e) (eff. July 1, 2002)) strikes the delicate balance of discouraging voluntary dismissals in order to avoid circuit court orders concerning discovery and the barring of witnesses.
Chief Justice Karmeier in a specially concurring opinion, joined by Justices Thomas and Neville, opined that the majority’s reasoning was flawed with respect to three counts in the original complaint that were involuntarily dismissed without specifying whether the dismissal of those counts was without prejudice or without leave to amend. Citing Richter and Illinois Supreme Court Rule 273 (Ill. S. Ct. R. 273 (eff. Jan. 1, 1967)), Justice Karmeier stated that the court has long adhered to the rule that when an involuntary dismissal order fails to specify that it is “without prejudice” or with leave to amend, it is a final adjudication on the merits. The special concurrence opined that the substantive effect of each individual dismissal should be analyzed in order to determine whether there were any final adjudications on any of the counts. Here, because the circuit court did not “otherwise specify” as to the finality of certain counts, the dismissal of those counts should have been considered a final adjudication unless a statute provided “otherwise” or the dismissal fell within one of the exceptions identified in Rule 273. The dismissal of the three counts fell within Rule 273’s exception of lack of subject matter jurisdiction because those counts were filed against unknown employees of the defendant for which no statute conferred jurisdiction. For that reason, according to the special concurrence, there was no final adjudication of the three counts and res judicata did not apply.
By Joanne R. Driscoll, Forde Law Offices LLP
At issue in this case of first impression is the question of whether a court may impose sanctions in the form of attorney fees under Supreme Court Rule 137(a) (Ill. S. Ct. R. 137(a) (eff. July 1, 2013)) to compensate an attorney defending himself against a frivolous cause of action. The circuit court found that Rule 137 sanctions were warranted and entered a sanction award. The appellate court affirmed the circuit court’s finding of violation but vacated the monetary award.
Applying rules of statutory construction, Justice Kilbride, with Justices Thomas, Burke and Theis concurring, first examined the plain language of Rule 137 and concluded that there was nothing in that rule to preclude an award of fees in favor of a pro se attorney defending against a frivolous lawsuit. Next, the court distinguished Hamer v. Lentz, 132 Ill. 2d 49 (1989) and State ex rel. Schad, Diamond & Shedden, P.C. v. My Pillow, Inc., 2018 IL 122487, which denied fees available under fee-shifting statutes to attorneys who brought suit in their own names in order to deter abusive fee generation. In contrast, Rule 137 sanctions were meant to deter frivolous or harassing litigation, a policy that would be defeated if attorney fees to pro se attorneys defending against meritless claims were denied. On that basis, the majority affirmed the Rule 137 violation finding but reversed the appellate court’s vacatur of the monetary award with directions to reinstate that award.
Chief Justice Karmeier and Justice Garman wrote separately, each concurring in part and dissenting in part. Chief Justice Karmeier agreed with Justice Garman that there was no attorney-client relationship and, thus, no “attorney fees” were “incurred” for purposes of Rule 137. But Justice Karmeier would award fees based on a different interpretation of Rule 137 and the phrase “appropriate sanctions,” which, he said, “includes” reasonable expenses incurred and attorney fees but can also extend to the pro se defendant’s loss of income attributable to the defense of a frivolous lawsuit. Otherwise, according to Justice Karmeier, an abusive plaintiff would benefit from a defendant’s decision to proceed pro se.
Justice Garman’s concurrence in part and dissent in part criticized the majority’s departure from over 150 years of case law prohibiting pro se attorneys from obtaining attorney fees for their own work. Justice Garman also criticized the majority’s rejection of the appellate court’s reliance on cases involving fee-shifting provisions without showing why the policies discussed in those cases would not carry over to the Rule 137 context. Lastly, Justice Garman saw no reason to treat differently pro se non-attorneys, who would not be entitled to fees, and pro se lawyers, who would be entitled to fees. According to Justice Garman, other options existed for sanctioning a party who violated Rule 137 rather than awarding fees to pro se lawyers.