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O'donnell v. Sears

OPINION FILED APRIL 9, 1979.

THOMAS B. O'DONNELL, PLAINTIFF-APPELLEE,

v.

SEARS, ROEBUCK & COMPANY ET AL., DEFENDANTS-APPELLEES. — (THE DEPARTMENT OF PUBLIC AID ET AL., INTERVENORS-APPELLANTS.)



APPEAL from the Circuit Court of Cook County; the Hon. JAMES C. MURRAY, Judge, presiding.

MR. JUSTICE BUCKLEY DELIVERED THE OPINION OF THE COURT:*FN1 *FN1 THIS OPINION WAS PREPARED BY JUSTICE BUCKLEY WHILE ASSIGNED TO THE ILLINOIS APPELLATE COURT, FIRST DISTRICT.

This is an appeal from an order entered by the circuit court of Cook County on July 29, 1977, denying intervenor-appellants' motion to vacate the court's order of May 12, 1977, which: (1) approved the terms of a settlement between plaintiff and defendants; (2) ordered plaintiff to pay $1,000 to intervenor-appellants in partial payment of hospital and public aid liens; and (3) ordered that further adjudication of these liens be continued for one year.

On June 13, 1972, plaintiff Thomas O'Donnell, age 16, suffered a broken neck and was rendered quadriplegic when he dove from a water-slide into an above-ground swimming pool located in a neighbor's yard. Suit was filed on plaintiff's behalf against numerous defendants on a products liability theory. By the time the case was assigned for trial the only defendants remaining were the Goshen Manufacturing Company, Inc. (Goshen), and Sears, Roebuck and Company (Sears), the manufacturer and retailer of the slide, respectively. The answers of the defendants' denied allegations of liability and asserted affirmative defenses of assumption of the risk and misuse of the product.

Since plaintiff suffered his injury he has incurred large medical, hospital and nursing treatment charges. A large part of plaintiff's expenses, $26,985.10, were paid by intervenor-appellant, the Illinois Department of Public Aid (Department). Additionally, from March 3, 1973, until September 4, 1974, plaintiff was hospitalized at Oak Forest Hospital, an extended care facility operated by intervenor-appellant, Health and Hospitals Governing Commission of Cook County (Commission). A balance of $10,898.75 remains outstanding from that hospitalization. Pursuant to section 1 of "An Act providing for a lien for nonprofit hospitals * * *" (Ill. Rev. Stat. 1977, ch. 82, par. 97), the Commission intervened in the litigation asserting a hospital lien against all claims and causes of action arising out of plaintiff's injury. The Commission perfected its lien by sending notice by registered mail to all parties to the litigation. The Department similarly intervened and perfected its public aid lien pursuant to section 11-22 of the Public Aid Code (Ill. Rev. Stat. 1977, ch. 23, par. 11-22) by providing requisite notice to parties.

Before trial, plaintiff and defendants arrived at a settlement, whereby plaintiff agreed to discharge his claim against Sears and Goshen in exchange for defendants' agreement to pay plaintiff a lifetime annuity of $22,000 per year, with three percent increments compounded annually. The agreement provided that annuity payments were to be made in monthly installments commencing within 30 days of the execution of the agreement. The agreement further provided that plaintiff's attorney's fees would be determined by arbitration and paid by defendants. All liens of the Department and the Commission were to be satisfied solely by plaintiff.

On May 4, 1977, the first of four hearings was held concerning approval of the settlement and adjudication of the rights of the parties. (Ill. Rev. Stat. 1977, ch. 23, par. 11-22; Ill. Rev. Stat. 1977, ch. 82, par. 101.) At this hearing, plaintiff asked the Department and Commission to waive their liens. This request was declined by both lienholders and the trial court continued the cause.

On May 12, 1977, Fred Peters, a social worker from Illinois State Children's Hospital School, who was in charge of plaintiff's case, testified on plaintiff's behalf. Peters felt that plaintiff had the ability to function outside a public institution with the assistance of a home attendant and that plaintiff was capable of continuing his education. Peters further opined that plaintiff would be happier and better off at home rather than being institutionalized. He also believed that the annuity payments would be adequate to sustain plaintiff outside of an institution. Additionally, the trial court received into evidence a 1976 national insurance safety commission report containing custodial care figures for spinal cord injury victims.

Based on this evidence and testimony the circuit court entered an order which: (1) recited and approved the terms of the settlement; (2) stated that the average cost of maintaining plaintiff privately is $24,000 per year based on the national insurance safety commission report; (3) required plaintiff pay out of the first year of annuity payments $500 to the Department and $500 to the Commission; and (4) continued adjudication of the liens for one year until May 12, 1978, for the purpose of considering further evidence regarding plaintiff's ability to pay and the rights of the lienholders.

The Commission and Department filed timely post-trial motions to vacate the order of May 12, 1977. The Commission's motion alternatively sought an express, written finding by the court that its May 12 order was final and that there was no just reason for delaying enforcement or appeal pursuant to Supreme Court Rule 304(a). (Ill. Rev. Stat. 1977, ch. 110A, par. 304(a).) These motions were heard on June 21, 1977, and July 29, 1977, at which time the Commission produced Patricia Parent, manager of a nursing care service, as a witness. Parent testified that the rates for providing a full-time, live-in attendant to care for a quadriplegic would be $16,242.50 per year. Costs of education, medication, and hospitalization were not included in this figure. Parent admitted that she had never provided care or treatment for plaintiff and that having never cared for a quadriplegic, she was unfamiliar with the therapy and medication they required.

The circuit court denied the motion to vacate its order of May 12 but found that order to be final and that there was no just reason for delaying appeal. Both intervenors appeal the May 12, 1977, and July 29, 1977, orders of the circuit.

Intervenors' arguments upon appeal are substantially similar and concern settlement approval and lien adjudication. First, regarding lien adjudication, they contend the trial court erred by only partially adjudicating their liens and that the court was not authorized to reserve subject matter jurisdiction for one year. Second, with respect to approval of the settlement, intervenors contend that the trial court: (1) abused its discretion by approving an annuity settlement which did not provide for payment of their liens; (2) erred and abused its discretion since lien adjudication and settlement approval were not contemporaneous; and, (3) erred by not determining the full amount of the annuity settlement and attorney's fees prior to settlement approval. Because the Department's and Commission's liens are governed by separate statutes, we will address their contentions independently.

Department of Public Aid Lien

• 1-4 We find that this court lacks jurisdiction to consider the Department's first contention regarding lien adjudication. The claims of both lienholders remained unadjudicated due to the court's continuance of that matter. If an order provides that jurisdiction be retained for future determination of matters of substantial controversy between the parties, it is not final. (Altschuler v. Altschuler (1948), 399 Ill. 559, 78 N.E.2d 225.) Clearly, final resolution of the rights of the lienholders is an integral matter of substantial controversy. Accordingly, we agree with the trial court that the order of May 12, 1977, did not constitute a final judgment dispositive of the entire proceeding. The issue of whether the trial court properly provided partial payment to the lienholders and continued adjudication is not properly before this court. None of the parties have raised the jurisdiction of this court as an issue. However, the parties cannot confer jurisdiction where none exists. (Watson v. Hobson (1947), 396 Ill. 617, 72 N.E.2d 857; Daab v. Ritter (1938), 294 Ill. App. 203, 13 N.E.2d 636.) Pursuant to Supreme Court Rule 304(a) (Ill. Rev. Stat. 1977, ch. 110A, par. 304(a)), the circuit court found the May 12, 1977, order was final and that there was no just reason to delay enforcement or appeal. In relevant part Rule 304(a) provides:

"If multiple parties or multiple claims for relief are involved in an action, an appeal may be taken from a final judgment as to one or more but fewer than all of the parties or claims only if the trial court has made an express written finding that there is no just reason for delaying enforcement or appeal."

The trial court cannot make a non-final order appealable merely by stating the language of Supreme Court Rule 304(a). An order must be final in its character, apart from the express finding. Davis v. Childers (1965), 33 Ill.2d 297, 211 N.E.2d 364; Smith v. Lewis (1967), 85 Ill. App.2d 246, 229 N.E.2d 323.

We find that the trial court properly invoked Rule 304(a) because approval of the settlement constituted a final judgment as to fewer than all claims. Rule 304(a) is applicable wherever an order adjudicates fewer than all the rights and liabilities at issue. (Ariola v. Nigro (1958), 13 Ill.2d 200, 148 N.E.2d 787.) *fn1 The Public Aid Code grants the trial court discretion to approve settlements and in adjudicating, enforcing or reducing liens.

"On petition filed by the Illinois Department, or by the local governmental unit or county if either is claiming a charge, or by the recipient, or by the defendant, the court, on written notice to all interested parties, may adjudicate the rights of the parties and enforce the charge. The court may approve the settlement of any claim, demand or cause of action either before or after a verdict, and nothing in this Section shall be construed as requiring the actual trial or final adjudication of any claim, demand or cause of action upon which the Illinois Department, the local governmental unit or county has charge. The court may determine what portion of the recovery shall be paid to the injured person and what portion shall be paid to the Illinois Department, the local governmental unit or county having a charge against the recovery. This Section shall not affect the priority of an attorney's lien under `An Act concerning attorney's lien and for enforcement of same', filed June 16, 1909, as amended." (Ill. Rev. Stat. 1977, ch. 23, par. 11-22.)

The Department alleges injury and submits that approval of the settlement has adversely affected its lien rights in this cause and established a dangerous precedent of circumvention of legitimate State debts through annuity settlements. Lien adjudication was continued; accordingly, settlement approval constituted final adjudication of fewer than all of the rights and ...


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