Taylor v. State Universities Retirement System

512 N.E.2d 399, 159 Ill. App. 3d 372, 111 Ill. Dec. 283, 1987 Ill. App. LEXIS 2975
CourtAppellate Court of Illinois
DecidedAugust 31, 1987
Docket4-86-0895
StatusPublished
Cited by12 cases

This text of 512 N.E.2d 399 (Taylor v. State Universities Retirement System) 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
Taylor v. State Universities Retirement System, 512 N.E.2d 399, 159 Ill. App. 3d 372, 111 Ill. Dec. 283, 1987 Ill. App. LEXIS 2975 (Ill. Ct. App. 1987).

Opinion

JUSTICE KNECHT

delivered the opinion of the court:

Plaintiff, an attorney, obtained an award for his client under the Workers’ Occupational Diseases Act (Diseases Act) (Ill. Rev. Stat. 1985, ch. 48, par. 172.36 et seq.). His client had received disability benefits from the defendant State Universities Retirement System (SURS). According to the terms of section 15 — 153.1(c) of the Illinois Pension Code (Ill. Rev. Stat. 1985, ch. 108½, par. 15 — 153.1(c)), SURS was entitled to reimbursement of benefits already paid out during the period covered by the Diseases Act award. Plaintiff informed SURS his efforts in pursuing a Diseases Act award had enabled SURS to reclaim the benefits and he was therefore entitled to a percentage of that recovery as his fee according to the “attorney trust fund doctrine.” When SURS disagreed, plaintiff filed suit. The circuit court of Champaign County entered judgment in plaintiff’s favor.

SURS appeals. We reverse.

Several issues are raised before us. The foremost substantive issue is whether the equitable “fund doctrine” allows for the recovery of attorney fees in this situation. SURS argues the doctrine, first announced with approval by our supreme court in Baier v. State Farm Insurance Co. (1977), 66 Ill. 2d 119, 361 N.E.2d 1100, has since been strictly limited to class actions and insurance subrogation settings only. Plaintiff in turn relies on the equitable concept behind the doctrine itself: an attorney who performs services in creating a fund should “in equity and good conscience” be allowed compensation out of the fund from those who seek its benefit. 66 Ill. 2d 119, 124, 361 N.E.2d 1100, 1102.

Other points which concern jurisdiction are also argued on appeal. They include: (1) whether the plaintiff’s complaint sounding in administrative review was timely filed; (2) whether any potential award for fees against SURS was barred because plaintiff did not bring his cause of action in the Court of Claims; and (3) whether a final administrative decision was ever even rendered.

In a footnote in its reply brief, SUES accedes to plaintiff’s view that because the finality of an administrative decision issue was not raised before the trial court, then any argument concerning that point on appeal is waived. However, our review of the record indicates SUES did set forth this contention at the trial level. SUES’s memorandum in support of its motion to dismiss, filed -with the court on February 26, 1986, asserts lack of a final agency decision as contemplated within the meaning of the Administrative Beview Law (Ill. Rev. Stat. 1985, ch. 110, par. 3 — 101 et seq.).

In any event, while as a general rule issues raised for the first time on appeal may not be considered by a reviewing court (Western Casualty & Surety Co. v. Brochu (1985), 105 Ill. 2d 486, 500, 475 N.E.2d 872, 879), an objection to jurisdiction cannot be waived by a prior failure to assert it (Carillo v. Jam Productions, Ltd. (1983), 97 Ill. 2d 371, 454 N.E.2d 649). Judicial review of administrative decisions can only be undertaken when there is a final agency determination. (See Ill. Rev. Stat. 1985, ch. 110, par. 3 — 102.) We are always obligated to consider any .court’s authority to hear a matter, so we must initially determine according to the plaintiff’s complaint whether a final agency decision amenable to judicial review has been rendered. We hold it has not.

In February of 1983, plaintiff’s client Jess Burwell applied for and was granted disability benefits from SUES due to an occupational disability incurred while he was employed by the University of Illinois. Burwell also signed an agreement in which he promised to reimburse SUES the “full amount of overpayment of benefits” should he later qualify for a Diseases Act award. He then retained the plaintiff as his attorney to pursue an action under the Diseases Act against his former employer. That action was successful after arbitration and review by the Industrial Commission.

A check representing a portion of the award covering Burwell’s claim against the University of Illinois was paid out to Burwell, the plaintiff, and SUES. In a letter dated August 15, 1985, plaintiff wrote SUES that by his efforts the University had been “forced” to pay an occupational disease award. Plaintiff notified SUES he was entitled under the “attorney’s trust fund doctrine” to collect a pro rata share of his expenses plus 20% of the total amount of disability benefits originally paid out to Burwell, now to be recovered by SUES. Plaintiff claimed this amount to be his fee in recouping the money for SUES’s benefit. Plaintiff states his authority for demanding a fee equal to 20% comes from section 16a(B) of the Diseases Act (Ill. Rev. Stat. 1985, ch. 48, par. 172.51a(B)).

David Hoffmeister, executive director of SUES, responded by letter dated August 22, 1985, that only recovery of the entire $6,954.66 paid out to Burwell in benefits would be acceptable. The letter threatened to withhold Burwell’s pension for noncompliance. Hoffmeister enclosed the check endorsed by him on behalf of SUES with a demand for full repayment pursuant to section 15 — 153.1(c) of the Illinois Pension Code (Pension Code) (Ill. Rev. Stat. 1985, ch. 108½, par. 15 — 153.1(c)). That section states:

“(c) In determining the monthly benefits payable under this Article, a deduction shall be made equivalent to any benefits payable to any employee under any State or Federal Worker’s Compensation or Occupational Diseases Acts for any period for which disability benefits are payable.” (Ill. Rev. Stat. 1985, ch. 108½, par. 15 — 153.1(c).)

This statutory right of SUES to a setoff against any workers’ compensation or Diseases Act award received by a covered employee during the same time period he also received disability benefits was upheld in Hanson v. Board of Trustees of the State Universities Retirement System (1983), 115 Ill. App. 3d 974, 451 N.E.2d 925.

By letter to Hoffmeister on August 23, 1985, plaintiff formally tendered the check fully endorsed. Plaintiff wrote that while he disagreed with SUES’s position of demanding full repayment, he would do nothing that might jeopardize his client’s pension. Plaintiff’s correspondence continued:

“By tender of this check I am in no way acquiescing to your opinion, nor am I waiving my right to a 20% attorney fee under the ‘attorney trust fund doctrine.’ I intend to pursue litigation against the [SUES] for this fee and for a pro-rata percentage of the expenses advanced.”

Plaintiff made good on that expressed intent on September 21, 1985, by filing a small claims complaint in the circuit court of Champaign County. On September 27, 1985, Hoffmeister informed plaintiff by letter his office had before it another case involving a contested entitlement to fees under the trust doctrine.

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Bluebook (online)
512 N.E.2d 399, 159 Ill. App. 3d 372, 111 Ill. Dec. 283, 1987 Ill. App. LEXIS 2975, Counsel Stack Legal Research, https://law.counselstack.com/opinion/taylor-v-state-universities-retirement-system-illappct-1987.