Ferris, Thompson, and Zweig, LTD. v. Esposito

2014 IL App (2d) 130129, 4 N.E.3d 1126, 378 Ill. Dec. 754, 2014 WL 468237, 2014 Ill. App. LEXIS 53

• Court: Appellate Court of Illinois
• Decided: February 5, 2014
• Docket: 2-13-0129
• Status: Unpublished

Opinion

2014 IL App (2d) 130129 No. 2-13-0129 Opinion filed February 5, 2014 ______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT ______________________________________________________________________________

FERRIS, THOMPSON, AND ZWEIG, LTD., ) Appeal from the Circuit Court ) of Lake County. Plaintiff-Appellee, ) ) v. ) No. 12-SC-622 ) ANTHONY ESPOSITO, ) Honorable ) Michael J. Fusz, Defendant-Appellant. ) Judge, Presiding. ______________________________________________________________________________

JUSTICE BIRKETT delivered the judgment of the court, with opinion. Justices Hudson and Spence concurred in the judgment and opinion.

OPINION

¶1 Plaintiff, Ferris, Thompson, & Zweig, Ltd., referred to defendant, Anthony Esposito, two

workers’ compensation cases. According to the parties’ agreement, plaintiff was to receive 45%

of all attorney fees recovered in the cases, with defendant receiving the remaining 55%. When

the cases were resolved, defendant never paid plaintiff. Accordingly, plaintiff sued defendant in

the circuit court for breach of contract. Defendant moved to dismiss, arguing that the claim

should have been filed with the Workers’ Compensation Commission (Commission) and not in

the circuit court. See 735 ILCS 5/2-619(a)(1) (West 2012). The circuit court denied that motion

and, following a trial, ordered defendant to pay plaintiff the fees it was owed plus interest. On 2014 IL App (2d) 130129

appeal, defendant argues that the circuit court lacked subject matter jurisdiction over the case.

We disagree, and, thus, we affirm.

¶2 The following facts are relevant to resolving the issue raised. On February 3, 2012,

plaintiff filed its complaint for breach of contract. Plaintiff alleged that it and defendant entered

into an agreement whereby “[they] agreed to act as co-counsel in the legal representation of” two

women who were injured during their employment. The workers’ compensation cases were

settled on November 29, 2010, for a total of $4,554.19. When plaintiff asked defendant for its

share of the attorney fees, defendant refused to pay plaintiff.

¶3 Attached to plaintiff’s complaint was the attorney-client agreement plaintiff had with the

two women and defendant. According to that agreement, which plaintiff, defendant, and both

women signed, both women asserted that they had retained the services of plaintiff and

“underst[oo]d and agree[d] that [plaintiff] ha[d] contracted with [defendant] to pursue this

workers’ compensation claim on [the women’s] behalf.” The women further stated that they

understood and agreed that plaintiff would have various responsibilities and receive a portion of

any attorney fees. In that regard, the agreement provided:

“[Plaintiff] shall:

a. Assist [defendant] with initial interviews and document preparation

necessary to the [workers’ compensation] claim;

b. Be responsible for assisting [defendant] with client contact and

communication in the offices of [plaintiff], as the need arises;

c. Provide translation services as the need arises. However, translation

services performed outside of the Offices of [plaintiff] will be an expense

assessed to the client[s];

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d. Represent the client[s] in any third party action. In the event a third

party action is initiated as a result of the work-related injury, it is understood that

[defendant] will continue representing the client[s] subject to the terms and

conditions of the workers’ compensation agreement concerning this workers’

compensation case;

e. Keep a duplicate file in its office containing any correspondence or

filings associated with this claim; and

f. Receive 45% of all attorney’s fees recovered from this claim[.]”

¶4 The agreement then outlined defendant’s various duties and the attorney fees to which he

was entitled. Specifically, the agreement stated:

“[Defendant] shall:

a. Be responsible for the preparation of any necessary documents and

obtaining all necessary records necessary to the processing of this claim;

b. Represent the client[s] before the Industrial Commission and will

conduct any investigation, negotiations, and processing necessary to bring this

claim to a conclusion;

c. Forward status reports to [plaintiff], every sixty days or as significant

developments occur in connection with the handling of the claim; and

d. Receive 55% of all attorney’s fees recovered from this claim, plus

reimbursement for the cost advanced by [defendant].”

¶5 Also attached to the complaint was a letter defendant wrote to plaintiff after the

agreement was executed. In the letter, which both parties signed, defendant asserted that “[the

parties] have agreed that this matter has been referred to [defendant’s] office and [plaintiff] will

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also undertake representation of [these] client[s].” Defendant then, in conformity with the

agreement, reiterated the duties each party had and the percentage of the attorney fees each party

was entitled to recover.

¶6 Defendant moved to dismiss, arguing that the circuit court lacked subject matter

jurisdiction over the case (see 735 ILCS 5/2-619(a)(1) (West 2012)). Citing section 16a(J) of the

Workers’ Compensation Act (Act) (820 ILCS 305/16a(J) (West 2012)), defendant claimed that

“ ‘[a]ny and all disputes regarding attorney’s fees’ ” had to be “ ‘heard and determined by the

Commission.’ ” Thus, defendant argued that, because this case concerned a dispute about

attorney fees owed in a workers’ compensation case, the matter had to be resolved by the

Commission, not the circuit court.

¶7 Plaintiff responded, claiming that the action was properly brought in the circuit court.

Plaintiff alleged that the circuit court had jurisdiction over the case, because “[t]he determination

of the amount of the fees is solely based on the referring of the case from the Plaintiff[] to the

Defendant.” In contrast, plaintiff asserted, “[the] Commission has exclusive subject matter

jurisdiction to resolve attorney’s fee disputes relating to the award of attorney fees in the case

before the Commission.” (Emphasis in original.) Because this case concerned the “enforce[ment

of] a written contract with respect to referral of a client from one attorney to another,” where

“Plaintiff[] did no work on the workers’ compensation claim and never filed any appearance

before the Industrial Commission on behalf of the clients,” plaintiff argued that defendant’s

motion to dismiss for lack of subject matter jurisdiction must be denied.

¶8 The circuit court denied defendant’s motion to dismiss, finding that section 16a(J) of the

Act did not apply to this case. Specifically, the court found that plaintiff, which was not active in

the workers’ compensation cases and never filed a fee petition with the Commission, was merely

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seeking what was owed to it pursuant to a referral-fee agreement. Defendant moved for an

interlocutory appeal, the court denied that motion, and the cause proceeded with a trial.

Following that trial, the court awarded plaintiff $4,965.25. This timely appeal followed.

¶9 At issue in this appeal is whether defendant’s motion to dismiss should have been

granted. A motion to dismiss brought pursuant to section 2-619 of the Code of Civil Procedure

(Code) (735 ILCS 5/2-619 (West 2012)) admits the legal sufficiency of the complaint and raises

defects, defenses, or other matters that serve to defeat the claim. Cohen v. McDonald’s Corp.,

347 Ill. App. 3d 627, 632 (2004). When a circuit court rules on a section 2-619 motion, it may

consider the pleadings, depositions, and affidavits filed. Id. On appeal from an order granting a

section 2-619 motion, we consider whether there exists a genuine issue of material fact that

should have precluded the dismissal or, absent such an issue of fact, whether the dismissal was

proper as a matter of law. Id. We review de novo an order granting a section 2-619 motion. See

Hagemann v. Illinois Workers’ Compensation Comm’n, 399 Ill. App. 3d 197, 207 (2010).

¶ 10 Section 2-619(a)(1) of the Code permits the dismissal of a complaint when “the court

does not have jurisdiction of the subject matter of the action.” 735 ILCS 5/2-619(a)(1) (West

2012). Whether a court has subject matter jurisdiction over a claim is determined by examining

the nature of the case and the relief sought. Cohen, 347 Ill. App. 3d at 632. Illinois circuit courts

are courts of general jurisdiction. Id. Thus, they have original jurisdiction over all justiciable

controversies except (1) cases over which the federal courts have exclusive jurisdiction, (2)

matters committed to administrative tribunals, and (3) those matters that the Illinois Constitution

indicates are within the exclusive original jurisdiction of the Illinois Supreme Court. Id. at 632-

33.

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¶ 11 The Commission is an administrative agency. See City of Chicago v. Fair Employment

Practices Comm’n, 65 Ill. 2d 108, 112-13 (1976). Thus, the Commission has the power to do

only what the Act authorizes. Business & Professional People for the Public Interest v. Illinois

Commerce Comm’n, 136 Ill. 2d 192, 243 (1989). When the Commission acts outside of what the

statute allows, it acts without jurisdiction over the subject matter. See id.

¶ 12 Accordingly, because the Commission’s authority is governed by the Act, we must

examine several provisions of the Act to determine whether the Commission or the circuit court

had jurisdiction over this case. In examining these provisions, we are guided by the well-settled

rules of statutory construction. Specifically, the primary objective in construing a statute is to

ascertain and give effect to the legislature’s intent. Blum v. Koster, 235 Ill. 2d 21, 29 (2009).

The best indicator of the legislature’s intent is the statutory language, which should be given its

plain and ordinary meaning. Cinkus v. Village of Stickney Municipal Officers Electoral Board,

228 Ill. 2d 200, 216 (2008). When the statutory language is clear and unambiguous, it must be

applied as written without resorting to extrinsic aids of construction. MidAmerica Bank, FSB v.

Charter One Bank, FSB, 232 Ill. 2d 560, 565 (2009). Moreover, we will not depart from the

plain statutory language by reading into it exceptions, limitations, or conditions that conflict with

the legislature’s expressed intent. Id. at 565-66. “That is not to say, however, that we cannot

consider the purpose for enacting the statute.” In re Marriage of Earlywine, 2012 IL App (2d)

110730, ¶ 18. Rather, we may consider the reason and necessity for the statute and the evils it

was intended to remedy, and we will assume that the legislature did not intend an unjust result.

In re Marriage of Rosenbaum-Golden, 381 Ill. App. 3d 65, 72 (2008). As we review the

dismissal of a complaint pursuant to section 2-619 of the Code, we review de novo the

construction of a statute. Nelson v. County of Kendall, 2013 IL App (2d) 120635, ¶ 10.

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¶ 13 The provisions of the Act at play in this case are sections 16 and 16a (820 ILCS 305/16,

16a (West 2012)). The relevant portion of section 16 provides:

“The Commission shall have the power to determine the reasonableness and fix

the amount of any fee of compensation charged by any person, including attorneys,

physicians, surgeons and hospitals, for any service performed in connection with this Act,

or for which payment is to be made under this Act or rendered in securing any right under

this Act.” 820 ILCS 305/16 (West 2012).

¶ 14 Section 16a of the Act deals exclusively with attorney fees. In addressing that topic,

section 16a(A) (820 ILCS 305/16a(A) (West 2012)) articulates what the legislative purpose of

the section is. It states:

“In the establishment or approval of attorney’s fees in relation to claims brought under

this Act, the Commission shall be guided by *** the legislative intent, hereby declared, to

encourage settlement and prompt administrative handling of such claims and thereby

reduce expenses to claimants for compensation under this Act.” Id.

¶ 15 Section 16a(C) (820 ILCS 305/16a(C) (West 2012)) outlines how attorney fees should be

set. That is, it states:

“All attorneys’ fees in connection with the initial or original claim for compensation shall

be fixed pursuant to a written contract on forms prescribed by the Commission between

the attorney and the employee or his dependents, and every attorney, whether the

disposition of the original claim is by agreement, settlement, award, judgment or

otherwise, shall file his contract with the Chairman of the Commission who shall approve

the contract only if it is in accordance with all provisions of this Section.” Id.

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¶ 16 Section 16a(J) of the Act dictates how disputes regarding fees are handled. Specifically,

it provides:

“Any and all disputes regarding attorneys’ fees, whether such disputes relate to which

one or more attorneys represents the claimant or claimants or is entitled to the attorneys’

fees, or a division of attorneys’ fees where the claimant or claimants are or have been

represented by more than one attorney, or any other disputes concerning attorneys’ fees

or contracts for attorneys’ fees, shall be heard and determined by the Commission after

reasonable notice to all interested parties and attorneys.” 820 ILCS 305/16a(J) (West

2012).

¶ 17 Reading these provisions together, we determine that the Commission has the authority to

set the amount of fees that should be awarded to attorneys who represent claimants in claims

filed with the Commission and to resolve disputes regarding the amount of those fees. This

authority does not extend to issues concerning a breach of a referral agreement delineating the

percentage of the awarded fee that should be allotted to the attorney who represented the

claimant before the Commission and the attorney who referred the claimant to that attorney.

¶ 18 In reaching this result, we observe that section 16 indicates that the Commission has the

power to determine the amount of fees that should be awarded to an attorney who represented a

claimant in a case that was brought before the Commission. Under section 16a(C), an attorney

who represents a claimant in an action brought before the Commission must file with the

Commission a written contract, executed between the attorney and the claimant or the claimant’s

dependents, which must fix the amount of fees to which that attorney is entitled. Section 16a(J)

reveals that, when there is a dispute concerning the fees, that dispute should be brought before

the Commission.

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¶ 19 Although section 16a(J) refers to “[a]ny and all disputes regarding attorneys’ fees” (id.),

we cannot conclude that, by this language, the Act confers on the Commission the authority to

resolve a case concerning the breach of a referral agreement in a workers’ compensation case.

“When the plain language of two statutes conflicts, [a reviewing court] will attempt to construe

them together, in pari materia, if such an interpretation is reasonable.” Abruzzo v. City of Park

Ridge, 231 Ill. 2d 324, 332 (2008). “Legislative intent remains the foremost consideration,

however.” Id. “In determining that intent, [reviewing courts] may consider the statutes in their

entirety, their purposes, the problems they target and the goals they seek to achieve.” Id. In

doing so, “[w]ords and phrases should not be interpreted in isolation, but must be construed in

light of other relevant provisions of the statute.” Id. at 333.

¶ 20 Here, reading all of the relevant parts of the Act together, we determine that, when the

legislature used the phrase “[a]ny and all disputes regarding attorneys’ fees,” it was referring to

disputes concerning the amount of fees to be awarded to those who represent clients before the

Commission (see 820 ILCS 305/16a(J) (West 2012)). If we were to say that section 16a(J) gave

the Commission jurisdiction over the breach of the referral agreement at issue in this case, we

would be ignoring not only the specific power that section 16 grants to the Commission, but also

the legislative intent of section 16a. That is, the legislature explicitly stated in section 16a(A)

that the purpose of section 16a is to handle workers’ compensation claims expeditiously so that a

claimant may recover more of the amount of compensation awarded. If we were to hold that

section 16a(J) allowed the Commission to resolve the breach of the referral agreement in this

case, that purpose would be thwarted, as resolving that issue would take more time and

potentially deplete more of the award given to the claimants.

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¶ 21 Defendant argues that the Commission had jurisdiction over this case, because (1)

plaintiff asserted in its complaint that it and defendant were to act as “co-counsel,” (2) referring

the claimants to defendant was a “service” as provided in the Act; and (3) the Act dictates how

referral agreements in workers’ compensation cases are to be executed. We find none of these

arguments availing.

¶ 22 First, the mere fact that plaintiff referred to the parties as “co-counsel” in its complaint

does not mean that they were, in fact, co-counsel before the Commission. Indeed, the documents

attached to plaintiff’s complaint reveal that the parties were not co-counsel before the

Commission. That is, according to these documents, defendant agreed that he would “[r]epresent

the client[s] before the Industrial Commission and *** conduct any investigation, negotiations,

and processing necessary to bring this claim to a conclusion.” In contrast, plaintiff was to

perform many ancillary tasks, like providing translation services, assisting with initial interviews,

and keeping duplicate records in its office. When the Act uses the phrase “any fee of

compensation charged by any person, including attorneys” (820 ILCS 305/16 (West 2012)), it

means fees charged for performing services like filing the claim, representing the claimant before

the Commission, and attempting to settle the claim, as such acts would be “service[s] performed

in connection with this Act” (820 ILCS 305/16 (West 2012)). The services that plaintiff

provided do not fall within this category.

¶ 23 Second, and similarly, referring clients to another attorney is not a “service” as that term

is used in the Act. Reading all of the provisions of the Act together, it is clear that, when the Act

refers to “service,” it means work done on the claim itself. Here, the parties agreed that

defendant would prosecute the claim. That is, the parties agreed that defendant would provide

“service” under the Act. The value of that “service” could have been an issue for the

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Commission, but whether plaintiff was owed a fee for referring the claimants to defendant for

“service” was not.

¶ 24 Third, while the Act does provide guidance for how referral agreements for workers’

compensation cases should be executed (see 820 ILCS 305/16b(a) (West 2012)); Ill. R. Prof.

Conduct (2010) R. 1.5(e) (eff. Jan. 1, 2010)), we cannot conclude, as defendant suggests, that the

Commission thus has jurisdiction over the breach of a referral agreement. Beyond the reasons

set forth above, we fail to see why the Commission would be inserted into a dispute concerning a

referral agreement executed by two attorneys. In contrast, it is quite clear why the Commission

would be involved in setting reasonable fees that an attorney may charge a claimant, as, unlike

two attorneys executing a referral agreement, an attorney and a claimant are not similarly

situated and the Commission is well placed to ensure that any agreement reached between these

parties is not unconscionable. See 820 ILCS 305/16 (West 2012) (providing that the

Commission has the power to determine the reasonableness and fix the amount of fees an

attorney charges in representing a claimant).

¶ 25 For these reasons, the judgment of the circuit court of Lake County is affirmed.

¶ 26 Affirmed.

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