Nyhammer v. Basta

2022 IL App (2d) 200460-U

Opinion

2022 IL App (2d) 200460-U No. 2-20-0460 Order entered February 8, 2022

NOTICE: This order was filed under Supreme Court Rule 23(b) and is not precedent except in the limited circumstances allowed under Rule 23(e)(l). ______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT ______________________________________________________________________________

GRANT NYHAMMER, as Executive Director ) Appeal from the Circuit Court of the Northwestern Illinois Area Agency on ) of Winnebago County. Aging, ) ) Plaintiff-Appellant, ) ) v. ) No. 19-MR-1106 ) PAULA BASTA, In Her Official Capacity as ) Director of the Illinois Department on Aging, ) Honorable ) Donna R. Honzel, Defendant-Appellee. ) Judge, Presiding. ________________________________________________________________________

JUSTICE McLAREN delivered the judgment of the court. Presiding Justice Bridges and Justice Hutchinson concurred in the judgment.

ORDER

¶1 Held: Trial court's order affirming the Illinois Department on Aging's decisions that a petitioner did not present contested cases was vacated, and the matter was remanded to the Department, where it failed to make findings of fact and conclusions of law sufficient for appellate review on all matters before it.

¶2 After the Illinois Department on Aging (Department) denied the Northwestern Illinois Area

Agency on Aging (NIAAA) administrative hearings for two petitions, plaintiff, Grant Nyhammer,

the NIAAA’s executive director, filed a mandamus complaint seeking an order for hearings on the

petitions and other relief. The trial court dismissed plaintiff’s mandamus complaint for failure to 2022 IL App (2d) 200460-U

state a cause of action. On appeal, plaintiff argues that the trial court erred by dismissing its

complaint. For the reasons that follow, we vacate the trial court’s order and remand the matter to

the Department for rulings with findings of fact and conclusions of law regarding the NIAAA’s

two petitions.

¶3 I. BACKGROUND

¶4 A. The Parties

¶5 Defendant, Paula Basta, is the current director of the Department. The Department is

mandated by the Adult Protective Services Act to “establish, design, and manage” a protective

services program to assist eligible, adult victims of elder abuse, neglect, self-neglect, and

exploitation. 320 ILCS 20/3 (West 2018). The Department designates area agencies on aging as

regional administrative agencies. Id. § 2(i). A regional administrative agency is a public or

nonprofit agency in a planning and service area that provides regional oversight in implementing

Adult Protective Services Act programs in a geographical region of the state. See id.

¶6 The Department designated the NIAAA as the regional administrative agency for planning

and service area one. 1 The NIAAA is also the area agency on aging (AAA) for planning service

and service area one. “‘Area agency on aging’ means any public or non-profit private agency in a

planning and service area designated by the Department, which is eligible for funds available under

the Older Americans Act [42 U.S.C. § 3001 et seq.] and other funds made available by the State

of Illinois or the federal government.” 20 ILCS 105/3.07 (West 2018). Plaintiff is the executive

director of and general counsel for the NIAAA, a private nonprofit entity.

1 Area one is comprised of the counties of Jo Davies, Stephenson, Winnebago, Boone,

Carroll, Ogle, DeKalb, Whiteside, and Lee. 20 ILCS 105/3.08 (West 2018).

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¶7 Under the Older Americans Act, 42 U.S.C. §§ 3001, et seq., the federal government

distributes funds to the states each year. The states use these funds to provide a wide range of

services to their “older individual[s],” whom the statute defines as individuals “60 years of age or

older.” 42 U.S.C. § 3002(38). The Older Americans Act requires each state to designate an agency

responsible for creating a formula to determine the intrastate distribution of Older Americans Act

funds. Id. § 3025(a)(1)(A). That state agency must, in turn, divide the state into subdivisions

known as “planning and service areas,” and must designate an area agency on aging for each PSA.

Id. § 3025(a)(2)(A). See also 20 ILCS 105/3.07, 3.08 (West 2018). In Illinois, the state agency is

the Department. Illinois is divided into 13 planning and service areas. 20 ILCS 105/3.08 (West

2018).

¶8 B. Plaintiff’s First Petition

¶9 In June 2019, the NIAAA, through plaintiff, filed a petition for a hearing with the

Department alleging that it was responsible for complying with the Older Americans Act of 2006

(42 U.S.C. § 3001 et seq.) and that the Department improperly withheld funding to the NIAAA.

In particular, the petition alleged the following. In July 2013, plaintiff emailed defendant’s

predecessor, John Holton, stating that the Department’s Adult Protective Services Standards and

Procedures Manual (manual) was invalid because the Department enacted the manual without the

public notice and comment requirements of the Administrative Procedure Act (Act). See 5 ILCS

100 5/40 (West 2012). In October 2013, plaintiff emailed Holton again, this time attaching a draft

complaint for mandamus that NIAAA was “considering filing,” and stating, that he hoped to “find

a solution [short] of litigation.”

¶ 10 In December 2013 Holton sent plaintiff a letter stating that the Department was terminating

the NIAAA’s grant for fiscal year 2014, effective January 31, 2014, citing a provision of its grant

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agreement allowing the Department to cancel that agreement “without cause” upon 30 days’

written notice. Holton stated that, as of February 1, 2014, the Department would take over as the

regional administrative agency for area one.

¶ 11 In April 2019, plaintiff met with defendant and three Department employees including

Betsy Creamer. At the meeting Creamer told plaintiff that she was given an order to “withhold

funding from [the] NIAAA to retaliate for [the] NIAAA’s advocacy regarding the Manual.”

Although Creamer did not say who gave that order, the NIAAA alleged that the Department

awarded “$3.79 million in Other Funding” to other area agencies on aging in 2014-2015, while

the NIAAA received nothing. The NIAAA sought a hearing on the alleged order to withhold

funding, claiming that this was done in retaliation for plaintiff’s complaints about the manual.

¶ 12 The nine-count petition alleged, that (1) the Department failed to enact administrative rules

that comply with article 10 of the Illinois Administrative Hearing Act (Act) (5 ILCS 100/10-10

through § 10-75 (West 2018)), (2) the Department violated the Older Americans Act of 2006 by

withholding funds from the NIAAA without, inter alia, providing due process; (3) the Department

withheld funds from plaintiff for an improper purpose and as retaliation; (4) by withholding funds

from the NIAAA for an improper purpose, the Department violated the Older Americans Act of

2006 by failing to improve the capacity of serving older adults by concentrating resources, act in

the clients’ best interests, give preference to clients with the greatest economic need, and consider

the needs of rural clients (42 U.S.C. §§ 3021(a)(1), 3025(a)(1)(D), 3025(a)(2)(E), 3027(a)(10));

(5) Creamer, acting under the color of State law, deprived NIAAA its federal due process right by

withholding funds; (6) the Department violated Illinois law by withholding funds from the NIAAA

for the improper purpose of interfering with its State mandated advocacy responsibilities (89 Ill.

Admin. Code § 230.150); (7) the Department violated Illinois law by terminating the NIAAA in

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retaliation as the regional administrative agency (Ill. Const., Art. I, Sec. 2, 320 ILCS 2/2(i) (West

2018)); (8) the Department violated Illinois law by improperly terminating the NIAAA as the

regional administrative agency because it interfered with its state mandated advocacy

responsibilities (89 Ill. Admin. Code § 230.150); and (9) the Department violated Illinois law by

withholding funds from the NIAAA under the order given to Creamer.

¶ 13 In July 2019 the Department denied the NIAAA a hearing on its first petition, stating in an

email that the petition did not present a contested case.

¶ 14 C. The NIAAA’s Second Petition

¶ 15 In August 2019, the NIAAA, through plaintiff, filed a second petition for a hearing with

the Department. This second five-count petition alleged the following. The Department designated

the NIAAA as the area on aging for planning service area one and the regional administrative

agency for the adult protective services program for area one. As the regional administrative

agency for the adult protective services program (program), the NIAAA had broad authority to

manage the program, including designating program providers. The Department rejected the

NIAAA’s designations of providers and in doing so, it improperly intruded on the NIAAA’s

authority granted by the Illinois General Assembly. In addition, the Department used conflicting

standards to govern the program by rejecting the NIAAA’s designation, and unlawfully managed

the program with invalid rules. Also, the Department had no administrative rules for hearings that

comply with the Illinois Administrative Procedure Act, which prevented the NIAAA from

receiving a fair hearing on this petition. In June 2019, the NIAAA “designated” adult protective

service providers for area one. In July 2019, the Department, through defendant, sent a letter to the

NIAAA stating that it rejected its “recommendations” of providers because of “errors in the

instructions and application used for scoring purposes.”

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¶ 16 Count one of the NIAAA’s second petition alleged that the Department violated the Adult

Protective Services Act by rejecting the NIAAA’s designation of providers in violation of section

3(b) of the Adult Protective Services Act (320 ILCS 20/3(b) (West 2018). Count two alleged that

the Department unreasonably rejected the NIAAA’s designation of providers in violation of Part

270 of the Illinois Administrative Code (Code) (89 Ill. Adm. Code 270). Count three alleged that

the Department “tainted the process” by unlawfully rejecting the NIAAA’s designation of

providers. Count five alleged that the Department did not have administrative rules for contested

hearings that comply with article 10 the Act.

¶ 17 In September 2019 the Department denied the NIAAA a hearing, again via email, stating

that the second petition “did not present a contested case that would support the right to an

adjudicatory hearing.”

¶ 18 D. Plaintiff’s Mandamus Complaint

¶ 19 On November 5, 2019, plaintiff filed a three-count mandamus action against defendant in

the trial court. Count one alleged that the Department had a legal duty to enact administrative rules

for hearings that complied with the article 10 of the Act and the defendant had not enacted such

rules. See 5 ILCS 100/10-20, 25, 30(b), 35, 40, 50, 55, 60, 63, 70, and 75 (West 2018).

¶ 20 Count two alleged that the Department had a duty to provide plaintiff with an

administrative hearing on the first petition. Plaintiff incorporated paragraphs of the first petition

into count two and attached the first petition to the complaint. The first petition alleged that in July

2013 plaintiff sent an email to the current director of the Department, John Holton. Plaintiff stated

that the Department’s new adult protective service program manual (manual) was invalid and that

it should be recalled. In October 2013, plaintiff emailed Holton stating that the NIAAA was

considering litigation regarding the manual. In December 2013 Holton sent a letter to plaintiff

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stating that the Department was terminating the NIAAA as the regional area agency on aging

effective February 1, 2014. The NIAAA received no funding from the Department for fiscal year

2014-2015. The Department improperly withheld funding for the purpose of retaliation. The first

petition also alleged that the Department failed to enact administrative rules for hearings that

complied with article 10 of the Act. See 5 ILCS 100/10-20, 25, 30(b), 35, 40, 50, 55, 60, 63, 70,

and 75 (West 2018).

¶ 21 Count three alleged that the Department had a duty to provide the NIAAA with an

administrative hearing on its second petition. Plaintiff incorporated paragraphs of the second

petition into count three and attached the second petition to the complaint.

¶ 22 On February 28, 2020, after hearing argument, the trial court dismissed plaintiff’s

complaint pursuant to section 2-615 of the Code of Civil Procedure (Code) (735 LCS 5/2-615

(West 2018)). Plaintiff filed a “motion to vacate,” which the court denied as a motion to reconsider

on July 29, 2020. Plaintiff filed a timely notice of appeal on August 17, 2020.

¶ 23 II. ANALYSIS

¶ 24 A. Initial Matters

¶ 25 Initially, we address plaintiff’s motion to vacate the trial court’s dismissal of count three

based on a recently adopted regulation. See 45 Ill. Reg. 10780 (eff. Aug. 10, 2021) (amending 89

Ill. Admin. Code § 230.420(d) (West 2022)). The recently adopted amendment to section

230.420(d)(2) provides that the Department will allow appeals by “[a]ny AAA when the

Department proposes to: *** [r]eject the AAA’s recommendation to designate a service provider.”

Id. Here, there is absolutely no language overcoming the presumption of prospective, rather than,

retroactive application. See Doe Three v. Department of Public Health, 2017 IL App (1st) 162548,

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¶ 37 (the appellate court applied an administrative regulation prospectively because there was no

language suggesting retroactivity). Therefore, we deny plaintiff’s motion.

¶ 26 In a related motion, plaintiff seeks sanctions against defendant and counsel pursuant to

Illinois Supreme Court Rules 137 (eff. Jan. 1, 2018) and 361 (eff. Dec. 1, 2021), for delaying this

litigation, making false representations to this court, and concealing the implementation of the

recently adopted regulation (see 45 Ill. Reg. 10780 (eff. Aug. 10, 2021)). Plaintiff’s motion is

premised on the false belief that the recently adopted regulation applies retroactively. Because the

enactment of the regulation at issue is not retroactive, it does not affect this litigation, and thus, we

deny plaintiff’s motion for sanctions.

¶ 27 B. Standard of Review

¶ 28 Our review in this appeal is guided by the procedural context from which it arose, a motion

to dismiss under section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 2018)).

Motions to dismiss under section 2-615 challenge the legal sufficiency of a complaint based on

defects apparent on its face. Ferris, Thompson & Zweig, Ltd., v. Esposito, 2017 IL 121297, ¶ 5.

When reviewing whether a motion to dismiss under section 2-615 should have been granted, we

accept as true all well-pleaded facts and all reasonable inferences that may be drawn from those

facts. Id. The critical inquiry is whether the allegations of the complaint, when construed in the

light most favorable to the plaintiff, are sufficient to establish a cause of action upon which relief

may be granted. Id. A cause of action should not be dismissed pursuant to section 2-615 unless it

is clearly apparent that no set of facts can be proved that would entitle the plaintiff to recover. Id.

An exhibit attached to a complaint becomes part of the pleading for every purpose, including the

decision on a motion to dismiss. Invenergy Nelson LLC v. Rock Falls Township High School

District No. 301, 2020 IL App (2d) 190374 ¶ 14. Where an exhibit contradicts the allegations in a

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complaint, the exhibit controls. Id. Whether the trial court erred in granting or denying a section

2-615 motion presents a question of law and, therefore, our review is de novo. Ferris, Thompson

& Zweig, Ltd., 2017 IL 121297, ¶ 5.

¶ 29 C. Mandamus

¶ 30 Mandamus is an “extraordinary remedy” that compels a public official to perform a purely

ministerial duty that does not involve an exercise of discretion. People ex. rel. Berlin v. Bakalis,

2018 IL 122435, ¶ 16. A court will award mandamus relief only when the plaintiff “establishes a

clear right to the relief requested, a clear duty of the public official to act, and clear authority in

the public official to comply.” Id. (quoting People ex. rel. Glasgow v. Carlson, 2016 IL 120544,

¶ 15.

¶ 31 D. Administrative Review

¶ 32 With administrative cases we review the administrative agency’s decision, not the trial

court’s decision. Kildeer-Countryside School District No. 96 v. Board of Trustees of the Teachers’

Retirement System, 2012 IL App (4th) 110843, ¶ 20. The applicable standard of review depends

on whether the question presented is one of fact, one of law, or a mixed question of fact and law.

Kouzoukas v. Retirement Board of the Policemen’s Annuity & Benefit Fund of the City of Chicago,

234 Ill. 2d 446, 463 (2009). An administrative agency’s decision on a question of law is not binding

on a reviewing court and is subject to de novo review. Engle v. Department of Financial &

Professional Regulation, 2018 IL App (1st) 162602, ¶ 29. In contrast, we will not disturb an

agency’s findings of fact unless they are against the manifest weight of the evidence. Id. ¶ 30.

Finally, an agency’s conclusion on a mixed question of fact and law is reviewed for clear error. Id.

¶ 31.

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¶ 33 Further, when, as here, an agency is subject to the Procedure Act, a final decision by the

agency “shall include findings of fact and conclusions of law, separately stated. Findings of fact,

if set forth in statutory language, shall be accompanied by a concise and explicit statement of the

underlying facts supporting the findings.” 5 ILCS 100/10-50(a) (West 2018). “Therefore, while an

agency is not required to make a finding on each evidentiary fact or claim, its findings must be

specific enough to permit an intelligent review of its decision.” Lucie B. v. Department of Human

Services, 2012 IL App (2d) 101284 ¶ 17.

¶ 34 Here, we determine that the Department’s summary dismissals of the NIAAA’s petitions

and its conclusory statements that the petitions failed to present contested cases were insufficient

for meaningful judicial review. A decision that contains no findings of facts “is simply insufficient

to permit an intelligent review of that decision.” Violette v. Department of Healthcare & Family

Services, 388 Ill. App. 3d 1108, 1112 (2009).

¶ 35 Defendant argues that the Procedure Act only requires the Department to “adopt rules

establishing procedures for contested case hearings.” See 5 ILCS 100/10-5 (West 2018).

Defendant notes that a contested case is defined as “an adjudicatory proceeding *** in which the

individual legal rights, duties, or privileges of a party are required as law to be determined by an

agency only after an opportunity for a hearing.” Id. § 1-30.

¶ 36 Both petitions alleged, inter alia, that the Department failed to comply with the Procedure

Act because it did not implement rules for administrative hearings as required in article 10 (5 ILCS

100/10-10 et seq. (West 2018)).

¶ 37 The Procedure Act’s provisions apply to the Department. 20 ILCS 105/5.02 (West 2018)

(“The Provisions of the Illinois Administrative Procedure Act [5 ILCS 100/1-1 et seq.] are hereby

expressly adopted and shall apply to all administrative rules and procedures of the Department

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under this Act[.]”). The Procedure Act provides that “each agency shall *** adopt rules of practice

setting forth the nature and requirements for all formal hearings.” 5 ILCS 100/5-10 (West 2018).

Section 10-5 of the Act states, “[a]ll agencies shall adopt rules establishing procedures for

contested case hearings.” (Emphasis added.) Id. § 10-5. Section 10-10 provides, “[a]ll agency rules

establishing procedures for contested cases shall at a minimum comply with Article 10.”

(Emphasis added.) Id. § 10-10.

¶ 38 The NIAAA alleged that defendant failed to adopt administrative rules for hearings that

complied with article 10 of the Act for:

“a. The qualifications of administrative law judges; [id. § 10-20]

b. The necessary details required in a hearing notice; [id. § 10-25]

c. The disqualification of an administrative law judge; [id. § 10-30(b)]

d. Bias or conflict of interest; [id.]

e. What must be included in the record for a contested hearing; [id. § 10-35]

f. The rules of evidence at a hearing; [id. § 10-40]

g. The proposal for decision; [id. § 10-45]

h. What must be in the decision and orders; [id. § 10-50]

i. Expenses and attorney fees in contested hearings; [id. § 10-55]

j. Ex parte communications after a notice of hearing; [id. § 10-60]

k. Staying contested hearings for military service; [id. § 10-63]

l. Waiving compliance with [the Act]; [id. § 10-70] and

m. Service by email. [id. § 10-75]”

¶ 39 Defendant argues that the Department had no obligation to enact rules pursuant to article

10 of the Procedure Act because the NIAAA had no right to hearings on its first and second

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petitions. Thus, defendant does not dispute that the Department failed to enact the rules at issue.

The Department argues only that the NIAAA was not entitled to hearings because the petitions

failed to present a contested case.

¶ 40 The NIAAA’s first petition alleged, inter alia, that the Department withdrew funding and

terminated the NIAAA as an adult service provider for an improper purpose. The NIAAA alleged

that the Department took these actions to retaliate against plaintiff after plaintiff told the

Department’s executive director that the Department’s manual was invalid because it was enacted

without the public notice and comment requirements of the Procedure Act (see 5 ILCS 100 5/40

(West 2018)).

¶ 41 The NIAAA’s second petition alleged that the Department improperly denied approval of

the NIAAA’s recommended providers. Section 270.215.(b)(1) of the Department’s regulations is

instructive. That section provides “[t]he Department reserves the right to *** reject

recommendations *** of a regional administrative agency in the designation of *** provider

agencies; however, the Department will not do so unreasonably.” (Emphasis added.) 89 Ill.

Admin. Code § 270.215(b)(1) (West 2018)). The Department’s regulations further provide that its

approval “shall not be unreasonably withheld.” (Emphasis added). Id. § 270.220(d). Generally,

whether a party acted reasonably is a question of fact. See, e.g., Cole v. Byrd, 167 Ill. 2d 128, 136-

37 (1995) (stating, whether medical expenses are reasonable is a question of fact); Wells v. State

Farm Fire & Casualty Insurance Co., 2021 IL App (5th) 190460, ¶ 37 (“whether a party has

employed *** ‘reasonable efforts’ is a question of fact”). However, here, the Department made no

findings of fact and there was no hearing to allow the presentation of evidence regarding the

allegedly unreasonable action.

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¶ 42 Here, it is patently obvious that the NIAAA was seeking a determination of its rights,

duties, or privileges by seeking a hearing with the Department. Contrary to the enunciated public

policy recognizing that there should be some form of administrative review (id. § 10-5), the

Department summarily determined that there was no need for a hearing. The Department denied

the NIAAA’s petitions without investigation, findings, or explanation, but somehow concluded

that the petitions failed to present contested cases.

¶ 43 In doing so, the Department failed and refused to provide a means for administrative review

for the determination of the NIAAA’s rights, duties, and responsibilities because it failed to grant

a hearing where findings of fact and conclusions of law were determined after an opportunity to

be heard. See 5 ILCS 100/1-30 (West 2018). The Department dismissed the petitions without

providing any means to effectively appeal or review the decisions and without enacting rules to

even validate its actions. We do not believe that the legislature ever intended a system for the

adjudication of rights, duties, or privileges as simplistic as conceived by the Department.

¶ 44 The Department was required to give the NIAAA adjudicatory hearings and determine the

merits of its petitions. It refused to do so. We determine that the Department shall grant the NIAAA

hearings and render decisions so that, if desired, administrative review may be perfected.

¶ 45 E. Delay in Proceedings

¶ 46 Finally, plaintiff argues that the trial court erred by unnecessarily causing delays in the

resolution of this matter. Because we are reversing and remanding for a hearing on plaintiff’s

petitions, we need not address this argument.

¶ 47 III. CONCLUSION

¶ 48 In conclusion, plaintiff’s first and second petitions presented contested cases. Therefore,

for the foregoing reasons, the order of the circuit court of Winnebago County is reversed, the final

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decision by the Illinois Department on Aging is vacated, and this cause is remanded to the

Department for further review, evaluation, findings, and decision consistent with this opinion.

¶ 49 Judgment reversed; final administrative decision vacated; cause remanded to the Illinois

Department on Aging.

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