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08/31/87 John C. Taylor, v. the State Universities

August 31, 1987

JOHN C. TAYLOR, PLAINTIFF-APPELLEE

v.

THE STATE UNIVERSITIES RETIREMENT SYSTEM, DEFENDANT-APPELLANT



APPELLATE COURT OF ILLINOIS, FOURTH DISTRICT

512 N.E.2d 399, 159 Ill. App. 3d 372, 111 Ill. Dec. 283 1987.IL.1270

Appeal from the Circuit Court of Champaign County; the Hon. Jeffrey B. Ford, Judge, presiding.

APPELLATE Judges:

JUSTICE KNECHT delivered the opinion of the court. GREEN and McCULLOUGH, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE KNECHT

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 . According to the terms of section 15-153.1(c) of the Illinois Pension Code (Ill. Rev. Stat. 1985, ch. 108 1/2, 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, SURS 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 SURS did set forth this contention at the trial level. SURS'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 Review 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 SURS 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 SURS 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 SURS. In a letter dated August 15, 1985, plaintiff wrote SURS that by his efforts the University had been "forced" to pay an occupational disease award. Plaintiff notified SURS 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 SURS. Plaintiff claimed this amount to be his fee in recouping the money for SURS's benefit. Plaintiff states his authority for demanding a fee equal to 20% comes from section 16aof the Diseases Act (Ill. Rev. Stat. 1985, ch. 48, par. 172.51a).

David Hoffmeister, executive director of SURS, 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 SURS with a demand for full repayment pursuant to section 15-153.1(c) of the Illinois ...


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