Dorr-Wood, Ltd. v. Department of Public Health

425 N.E.2d 499, 99 Ill. App. 3d 170, 54 Ill. Dec. 634, 1981 Ill. App. LEXIS 3137
CourtAppellate Court of Illinois
DecidedAugust 17, 1981
Docket80-897
StatusPublished
Cited by12 cases

This text of 425 N.E.2d 499 (Dorr-Wood, Ltd. v. Department of Public Health) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dorr-Wood, Ltd. v. Department of Public Health, 425 N.E.2d 499, 99 Ill. App. 3d 170, 54 Ill. Dec. 634, 1981 Ill. App. LEXIS 3137 (Ill. Ct. App. 1981).

Opinion

Mr. JUSTICE REINHARD

delivered the opinion of the court:

This is an appeal from an order denying defendants’, Illinois Department of Public Health and Illinois Department of Public Aid, petition to vacate a previously entered default judgment.' The issues raised by defendants for our review are whether the trial court lacked subject matter jurisdiction under the Administrative Review Act to enter the default judgment against the Illinois Department of Public Aid and the Illinois Department of Public Health, and whether the trial court abused its discretion in denying their section 72 (Ill. Rev. Stat. 1979, ch. 110, par. 72) petition to vacate the default judgment.

Plaintiffs, Dorr-Wood, Ltd., and Creative Health Care, Inc., d/b/a Sheltered Village (hereinafter collectively referred to as Sheltered Village), are long-term nursing care facilities that provide medical assistance to persons who are medically indigent. Sheltered Village receives financial reimbursement from the Illinois Department of Public Aid pursuant to article V of the Public Aid Code (Ill. Rev. Stat. 1979, ch. 23, par. 5 — 1 etseq.).

On May 25, 1979, the Illinois Department of Public Health informed Robert Bowman, president of Sheltered Village, that a desk audit of Sheltered Village had been performed and that a management fee paid to Mr. Bowman would be disallowed since it exceeded the maximum fee allowed to be paid to one person pursuant to an unpublished rule of the Department. Plaintiffs then appealed this decision to the Chief of Bureau Group Care of the Illinois Department of Public Aid. The appeal was denied.

Thereafter, plaintiffs filed a complaint for administrative review in the Circuit Court of McHenry County seeking a reversal of the Department’s decision. Defendants failed to file an answer before the return date, and the court entered a default judgment against defendants on September 27, 1979. The effect of the judgment was to reverse the desk audit and decision of the Department of Public Aid which denied payment of the management fees to Mr. Bowman and allowance of those fees as a reasonable expense.

On October 3, 1979, defendants filed with the clerk of the circuit court of McHenry County their appearance and a motion to dismiss setting forth that this matter was not reviewable under the Administrative Review Act. Defendants’ brief asserts, however, that neither plaintiffs’ attorney nor the clerk of the circuit court notified defendants of the default order previously entered on September 27, 1979, and that the defendants remained unaware of it for almost one year.

After learning of the default, defendants filed a petition for relief from the default judgment seeking to vacate the judgment. Count I of the petition set forth that the default judgment was void for want of subject matter jurisdiction in that the Administrative Review Act is not applicable to plaintiffs’ claim and that the Court of Claims has exclusive jurisdiction when a monetary recovery is sought from the State. Count II of the petition alleged that the defendants had set forth a meritorious defense and acted with due diligence in presenting their petition to vacate the default judgment. Also filed with the petition was an affidavit of defendants’ attorney, James C. O’Connell. The affidavit stated that, before the return date of the original complaint, plaintiffs’ attorney, James D. O’Grady, was contacted by O’Connell, a special assistant attorney general. O’Connell informed O’Grady that the Attorney General would be appearing on behalf of the defendants and requested a short extension of time to file a responsive pleading. The affidavit further stated that plaintiffs’ attorney did not inform O’Connell that he would move for a default judgment if defendants did not appear before the return date. However, an affidavit of Mr. O’Grady filed with plaintiffs’ response to defendants’ section 72 petition stated that at no time did Mr. O’Connell state that he was going to file an answer or enter an appearance in the present case. After oral argument was heard, the court on September 16, 1980, denied defendants’ petition to vacate.

Subsequently, on October 14, 1980, defendants filed a motion to vacate and reconsider. The court took defendants’ motion under advisement indicating a written memorandum would follow. On October 20, 1980, plaintiffs filed a motion to dismiss defendants’ motion, and it was denied. Although a written memorandum and order concerning defendants’ motion to vacate and reconsider has not yet been issued, this court granted defendants’ leave to appeal on December 2, 1980. See City Auto Paint & Supply, Inc. v. Brandis (1979), 73 Ill. App. 3d 863, 392 N.E.2d 703; compare Reuben H. Donnelley Corp. v. Thomas (1979), 79 Ill. App. 3d 726, 398 N.E.2d 972.

The briefs, statutes and rules of the Department of Public Aid further reveal that in order to be reimbursed on a reasonable cost-related basis, nursing care facilities must submit cost reports of the allowable costs of services provided to their nursing home residents within three months of the end of the facility’s fiscal year. Then it is analyzed at a desk audit to verify whether the costs are reasonable, allowable and therefore reimbursable. The Illinois Department of Public Health will thereafter allow or adjust the cost report and report the allowable costs to the Illinois Department of Public Aid which will determine the reimbursement rate on a prospective basis for nursing facilities providing care to Medicaid patients. The reimbursement rate is calculated from the facility’s report submitted for its fiscal year ending more than one year but less than two years prior to the beginning of the rate year after applying an inflation update. Sixty days prior to the beginning of the rate year, the Department of Public Aid notifies the facility of its new rate, and the facility may appeal to that Department. In the instant case, plaintiffs seek to judicially review the administrative decision adjusting their reimbursement rate based upon the desk audit.

First, in support of defendants’ contention that the trial court lacked subject matter jurisdiction to enter the default judgment in this case, it should be noted that lack of jurisdiction of the parties or of the subject matter can be raised at any time, in any court, either directly or collaterally. (City of Chicago v. Fair Employment Practices Com. (1976), 65 Ill. 2d 108, 112, 357 N.E.2d 1154; Home State Savings Association v. Powell (1979), 73 Ill. App. 3d 915, 917, 392 N.E.2d 598.) There can be no waiver of jurisdiction of the subject matter where the trial court lacked jurisdiction to enter the order appealed from. (Talandis Construction Corp. v. Illinois Building Authority (1978), 60 Ill. App. 3d 715, 718, 377 N.E.2d 237.) A section 72 petition is not, strictly speaking, the appropriate method for attacking a void judgment. (Ill. Rev. Stat. 1979, eh. 110, par.

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Bluebook (online)
425 N.E.2d 499, 99 Ill. App. 3d 170, 54 Ill. Dec. 634, 1981 Ill. App. LEXIS 3137, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dorr-wood-ltd-v-department-of-public-health-illappct-1981.