Court of Appeals of Illinois, First District, Fifth Division
Appeal
from the Circuit Court of Cook County. No. 16 CH 04243
Honorable Sophia H. Hall, Judge, presiding.
JUSTICE LAMPKIN delivered the judgment of the court, with
opinion. Presiding Justice Reyes and Justice Rochford
concurred in the judgment and opinion.
OPINION
LAMPKIN JUSTICE.
¶
1 Plaintiff Elizabeth Engle filed a complaint for
administrative review, which challenged the final
administrative decision that revoked her real estate
appraiser license after a default order for failure to file
an answer was entered against her and the disciplinary board
held its deliberations on the pleadings. The circuit court
affirmed the final administrative decision against Engle.
¶
2 On appeal, Engle argues that this court should reverse the
administrative decision because she did not forfeit her right
to a hearing and the agency violated her due process rights
when it failed to consider and grant her timely motion to
vacate the default order and denied her request to conduct a
hearing on the merits. In the alternative, Engle argues that
the revocation of her license based on the default order was
improper without some type of prove-up proceeding and was an
overly harsh penalty.
¶
3 Based on the following, we reverse the circuit court's
judgment that affirmed the final administrative decision
revoking Engle's license. We remand this cause to the
agency for further proceedings consistent with this opinion.
¶
4 I. BACKGROUND
¶
5 In 2013, Engle submitted an application to defendant, the
Department of Financial and Professional Regulation
(Department), for a certified residential real estate
appraiser license. The Department, however, notified her
about alleged discrepancies in her 2013 application. Engle,
with the assistance of an attorney, engaged in meetings and
conversations with Department employees and thereafter
withdrew her 2013 application.
¶
6 On September 11, 2014, Engle submitted another application
and subsequently received her certified residential real
estate appraiser license. However, on June 29, 2015, the
Department filed a complaint containing 127 counts against
her, alleging that she failed to sufficiently explain
additional hours listed in her application, in violation of
section 15-10(a)(2) of the Real Estate Appraiser Licensing
Act of 2002 (Act) (225 ILCS 458/15-10(a)(2) (West 2014)) and
her application included false information, in violation of
sections 15-10(a)(1), (5), (10), and (26) of the Act
(Id. § 15-10(a)(1), (5), (10), (26)).
¶
7 Specifically, count I of the complaint alleged that
Engle's 2014 application included work log forms that
requested credit for 779 additional experience hours earned
between August 1, 2014, and September 10, 2014, but failed to
provide a sufficient explanation for the additional requested
hours. Furthermore, counts II through CXXVII alleged that
Engle's 2014 application included false information
because the certified number of hours worked for 126
appraisals differed from the certified number of hours worked
for those same appraisals as listed in her prior 2013
application. Based on the allegations of the complaint, the
Department requested that Engle's license be suspended or
revoked or that she be otherwise disciplined. The Department
notified Engle that she was required to file an answer within
20 days, the failure to file an answer or otherwise plead
"may result in a default being taken against [her],
" and her attendance at a July 28, 2015, preliminary
hearing was mandatory.
¶
8 On July 17, 2015, Engle's counsel, Augustine, Kern and
Levens, Ltd. (AKL), filed a motion for extension of time,
incorrectly referencing an August 4, 2015, preliminary
hearing and explaining that Jeffrey Levens, the AKL partner
who had been handling Engle's case, died unexpectedly on
July 6, 2015. On July 21, 2015, AKL partner Algis Augustine
and junior associate James Ko filed appearances on behalf of
Engle.
¶
9 On July 28, 2015, neither Engle nor her counsel appeared at
the preliminary hearing. The administrative law judge (ALJ)
ordered Engle to answer or otherwise plead by September 8,
2015, or be held in default. The ALJ set the matter for a
status hearing on September 29, 2015. The order warned that
the "[f]ailure to attend or to file an answer shall
result in the transferring of the matter to the Board on the
pleadings, and the entry of a finding in favor of the
Department on all allegations." According to documents
in the record subsequently filed by Engle's counsel, they
did not appear at the July 28 preliminary hearing because
they requested but did not receive from the Department copies
of all the pleadings and notices.
¶
10 On September 8, 2015, Engle's counsel AKL filed a
motion to dismiss the complaint. One of the attorneys who
signed the motion was John Richardson, who was a partner of
Richardson Maraj, LLC. (As explained in documents
subsequently filed on Engle's behalf, Richardson shared
office space at AKL and helped after the death of Levens by
working as "of counsel" on Engle's case and
many other AKL cases.) The motion argued that the complaint
failed to allege any facts to support an inference that Engle
acted knowingly and intentionally to deceive anyone. The
motion explained that Engle withdrew her 2013 application
because Department employees informed her that she (1) could
not receive credit for 855 hours of appraisals where her
supervisor did not sign those work logs before his death and
(2) must report in her subsequent application the actual
number of hours worked despite, according to Engle, contrary
or confusing instructions on the Department's forms,
which indicated that applicants must cap their appraisal work
hours at a maximum of either 10 or 15 hours. Accordingly,
Engle had underreported her number of hours worked in her
prior 2013 application, and the certified number of hours
worked in her 2014 application was correct and complied with
the instructions of the Department's employees. Several
exhibits were attached to the motion, including
correspondence between the Department and Engle or her
attorneys, the minutes of a Department meeting, portions of
Engle's 2013 application, and her transcript and course
completion certificates. The Department responded to the
motion on September 15, and AKL filed a reply on September
29.
¶
11 On September 29, 2015, AKL filed a motion to disqualify
the Department's counsel, alleging that he was a
necessary witness in this case. The ALJ set a schedule for
the parties to file replies to the motion and continued the
matter to December 1, 2015.
¶
12 On October 14, 2015, the ALJ issued a written order
denying Engle's motion to dismiss the complaint. The ALJ
rejected Engle's argument that the complaint failed to
allege sufficient facts to form a basis for discipline. The
ALJ also ordered Engle to file her answer by November 2,
2015, and set the matter for a status hearing on December 1,
2015. The October 14 order, unlike previously served
documents, was addressed to Engle's attorney Ko instead
of the firm AKL.
¶
13 In early October 2015 (according to documents ultimately
filed on Engle's behalf), firm partner Augustine informed
attorneys Richardson and Ko that he would retire and close
the AKL firm at the end of the month. Richardson decided to
purchase AKL's pending practice. He moved to a new office
space and hired new employees. During this time, Richardson
and Ko tried to make the transition as smooth as possible and
"get up to speed" with all the cases.
¶
14 On November 10, 2015, Richardson and Ko, now of Richardson
Maraj, LLC, filed appearances on behalf of Engle. They did
not file an answer or request an extension of time to answer.
¶
15 On November 19, 2015, the ALJ denied, without prejudice,
Engle's motion to disqualify opposing counsel.
¶
16 On December 1, 2015, the ALJ issued an order holding Engle
in default for failure to file an answer and transferred the
matter to defendant, the Department's Real Estate
Appraisal Administration and Disciplinary Board (Board), for
its deliberations on the pleadings. The ALJ continued the
matter for status to January 12, 2016.
¶
17 On January 11, 2016, Engle's counsel filed a 118-page
answer to the complaint and a motion to vacate the default.
The motion petitioned the Department and the "Director
of the Division of Real Estate" to vacate the default
order. Counsel explained that AKL, Engle's previous
counsel, had closed after the retirement of partner Augustine
on October 30, 2015, which followed the death in July of
partner Levens. Counsel explained their attempts to make a
smooth transition from AKL to Richardson Maraj, LLC, despite
the difficult circumstances, and stressed the extensive
pleadings already filed in this case by AKL. Counsel stated
that they had been retained by Engle on November 1, 2015, and
urged, in the spirit of fairness, that Engle's license
should not be lost due to an oversight by counsel during the
transition from AKL to Richardson Maraj, LLC.
¶
18 On January 12, 2016, the ALJ issued an order that noted
the case had been transferred to the Board on the pleadings
and continued the matter for a status hearing on March 1,
2016.
¶
19 On January 13, 2016, the Board filed its report of
findings of fact, conclusions of law, and recommendation that
Engle's license be revoked. Specifically, the Board noted
the ALJ's December 1, 2015, default order for failure to
answer and concluded that Engle had violated the provisions
of the Act as alleged in the complaint. The Board had signed
its report on January ...