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06/30/87 the Department of Public v. the Department of Public

June 30, 1987




511 N.E.2d 167, 157 Ill. App. 3d 608, 110 Ill. Dec. 332 1987.IL.933

Appeal from the Circuit Court of Cook County; the Hon. Arthur L. Dunne, Judge, presiding.


JUSTICE HARTMAN delivered the opinion of the court. STAMOS and BILANDIC, JJ., concur.


Plaintiff appeals a circuit court administrative review order in No. 86 -- 1241, which reduced her medical assistance benefits eligibility period previously ordered by the court. In No. 86 -- 3144, the Department of Public Aid (Department) appeals in a consolidated case from the court's dismissal of its motion to vacate the order from which plaintiff has appealed and a previous order claiming lack of subject matter jurisdiction. The issues presented by the consolidated appeals are whether the circuit court: (1) erred in dismissing the Department's motion to vacate its previous order of administrative review for lack of jurisdiction; (2) exceeded its subject matter jurisdiction in its administrative review decision; and (3) erred in its decision under administrative review.

Plaintiff, Viola Rosecky, 64, was hospitalized for an indefinite period in May 1982, in "total need of respiratory care." She applied for medical assistance with the Department on July 13, 1982, under Aid to the Aged, Blind and Disabled . On August 19, 1982, the Department found plaintiff not disabled and consequently denied her application on August 23, 1982. The Department received additional information from plaintiff's hospital and changed its ruling on August 30, 1982, finding her disabled; nevertheless, on September 7, 1982, it denied her application because her assets exceeded the AABD limitation of $1500 by $598.05. These assets consisted of the cash value of insurance policies, and checking and savings accounts. Her medical bills exceeded $60,000 at that time.

Plaintiff's appeal to the Department after a hearing on September 14, 1982, was denied since her assets exceeded the $1500 AABD limit due to the value of her insurance policies. Plaintiff sought administrative review of that decision in the circuit court and on September 21, 1983, the circuit court remanded the action "to the Department of Public Aid for a determination of the cash surrender value of plaintiff's insurance policies."

On October 14, 1983, after remand, plaintiff's law firm notified the Department that it was representing plaintiff and requested that it receive copies of all requests and orders sent to her. The Department denied receiving this notice, but copies of the letter and its certified mail receipt are included in the record. Between November 1983 and April 1984, there was some contact between the Department and plaintiff's son, without notice to her lawyers, when the Department requested information which he, in turn, provided.

On May 16, 1984, the Department sent a request to plaintiff, in care of her son, for disclosure of her assets, again without notice to her attorneys. The son denied receiving the letter. The Department thereafter recomputed plaintiff's assets at $4,184.85, deducted a $1,000 insurance exemption, added in bank accounts totaling $757.25, finding her assets greater than $2,400 above the AABD $1,500 asset limit. Her application was denied on June 28, 1984. Whether the Department ever mailed a notice of the denial to plaintiff is disputed, her son having denied its receipt. Admittedly, no notice was sent to plaintiff's attorneys until November 28, 1984, and then only in response to a requested status report.

On December 6, 1984, plaintiff filed a petition for a rule to show cause for the Department's alleged failure to abide by the terms of the September 1983 remand. The circuit court denied her petition on January 11, 1985, and, on the same day, plaintiff filed a departmental appeal of the June 1984 denial of her AABD application. The appeal to the Department was timely filed within the 60-day Departmental appeal period if measured from the date that plaintiff's attorneys were notified of the denial, November 28, 1984, but untimely if measured from the actual date of the denial in June 1984 and the purported mailing of notice of the denial to plaintiff at that time.

At a Department hearing on May 6, 1985, it was contended that notice was sent to plaintiff on June 28, 1984. The Department conceded that plaintiff's attorneys were not notified until November 28, 1984. On May 13, 1985, the Department dismissed plaintiff's appeal for want of jurisdiction as untimely.

Plaintiff thereafter filed an amended complaint for administrative review in the circuit court contending that it was a continuation of her original 1982 complaint. On February 3, 1986, after an exchange of memoranda and arguments, the circuit court reversed the Department's decision finding the Department had notice of plaintiff's representation by attorneys; the attorneys were entitled to receive a copy of all notices sent to plaintiff; the period for filing the appeal did not begin to run until the mailing of the notice of decision to plaintiff's attorneys; and therefore plaintiff's notice of appeal was timely filed. The circuit court then addressed substantive issues not decided by the Department's decision on remand, ruling that plaintiff was entitled to be advised of the due process right to reduce assets when assets exceed the Department's eligibility standard, the Department failed to advise plaintiff of her right to reduce assets and plaintiff did reduce her assets below the Department maximum asset level in October 1982. The court then reversed the Department's "decision" and held plaintiff eligible for medical assistance under her July 1982 application and backdated coverage to include May and June 1982. A final provision stayed enforcement of the order for 30 days pending appeal and provided that "[if] after thirty days no appeal has been taken, the court shall retain jurisdiction for forty-five days thereafter."

On February 19, 1986, the Department filed a notice of appeal from the circuit court order; then, a motion to reconsider the order; and on March 18, 1986, this court granted the Department's motion to withdraw its appeal from the February 3, 1986, order.

On April 1, 1986, after an exchange of memoranda and further argument, the circuit court, acting on the Department's motion to reconsider, modified its order of February 3, 1986, ruling that plaintiff's eligibility for medical assistance benefits would begin with October 1982 instead of being backdated ...

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