ILLINOIS OFFICIAL REPORTS

Appellate Court

Cepero v. Illinois State Board of Investment, 2013 IL App (1st) 120919

Appellate Court

Caption

ROBERT LOPEZ CEPERO, Plaintiff-Appellant, v. ILLINOIS STATE

BOARD OF INVESTMENT, an Administrative Agency of the State of

Illinois; WILLIAMR. ATWOOD, Executive Director of the Illinois State

Board of Investment;KATHERINEA. SPINATO,DeputyDirector of the

Illinois State Board of Investment; JOHN W. CASEY, FRED

MONTGOMERY, THOMAS E. HOFFMAN, and MICHELE BUSH,

Members of the Executive Committee of the Illinois State Board of

Investment; LINSEY SCHOEMEL, Hearing Officer of the Illinois State

Board of Investment; THE DEPARTMENT OF CENTRAL

MANAGEMENT SERVICES, an Administrative Agency of the State of

Illinois; JAMES P. SLEDGE, Director of the Department of Central

Management Services; KIM BLOCK, Assistant Division Manager

Deferred Compensation Staff of the Department of Central Management

Services; and JASON MUSGRAVE, Executive Secretary Deferred

Compensation Hardship Committee of the Department of Central

Management Services, Defendants-Appellees.

 District & No. First District, Second Division

Docket No. 1-12-0919

Filed March 5, 2013

Held

(Note: This syllabus

constitutes no part of

the opinion of the court

but has been prepared

by the Reporter of

Decisions for the

convenience of the

reader.)

The denial of plaintiff’s request for a hardship withdrawal of his deferred

compensation account was upheld, notwithstanding his contention that an

“unforeseeable emergency” arose when his wife became pregnant with

triplets as a result of in vitro fertilization and he would have to purchase

a new home for his family, since that situation did not constitute an

“unforeseeable emergency” for purposes of the provisions of the Illinois

Administrative Code governing deferred compensation plans.
Decision Under 

Review

Appeal from the Circuit Court of Cook County, No. 11-CH-20189; the

Hon. Rita Mary Novak, Judge, presiding.

Judgment Affirmed.

Counsel on

Appeal

Tracy A. Robb, of Law Offices of Tracy A. Robb, of Chicago, for

appellant. 

Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro,

Solicitor General, and Carl J. Elitz, Assistant Attorney General, of

counsel), for appellees.

Panel JUSTICE SIMON delivered the judgment of the court, with opinion.

Presiding Justice Harris and Justice Quinn concurred in the judgment and

opinion.

OPINION

¶ 1 Plaintiff Robert Cepero appeals from an order of the circuit court of Cook County

affirming the decision of the Illinois State Board of Investment (Board) to deny his request

for a hardship withdrawal from his deferred compensation account. On appeal, plaintiff

contends that the denials of his hardship withdrawal request by the Board and the Deferred

Compensation Hardship Committee (Committee) are clearly erroneous in light of

overwhelming evidence that he was experiencing a financial hardship as the consequence of

an unforeseeable emergency at the time. For the reasons that follow, we affirm.

¶ 2 BACKGROUND

¶ 3 On January 12, 2011, plaintiff filed a hardship withdrawal request for the balance of his

deferred compensation account, totaling $104,007.82, due to an unforeseeable emergency.

Plaintiff asserted that his wife, Elizabeth, was pregnant with triplets as a result of a

successful in vitro fertilization (IVF) and had reached her twenty-second week of pregnancy.

Due to the medical complications of such a pregnancy, Elizabeth was required to go on

unpaid medical leave no later than January 20, 2011, and likely could not return to work until

December 19, 2011, resulting in $113,972.91 in lost wages. Plaintiff maintained that the

triplet pregnancywas unforeseeable because he and Elizabeth had a long history of infertility

and repeated failed IVF attempts over the past decade and that the pregnancy caused a

financial emergency due to the combination of Elizabeth’s lost wages and the additional

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costs of caring for the triplets, including necessary 24-hour child care assistance and

modifications to plaintiff’s loft condominium. On February 3, 2011, the Committee denied

plaintiff’s request for a hardship distribution because Elizabeth had not yet lost any income

and requested that plaintiff notify it when Elizabeth began her leave of absence.

¶ 4 On February 24, 2011, plaintiff filed a hardship withdrawal request for the balance of his

deferred compensation account for a down payment on a home. Plaintiff asserted that the

purchase of the home was necessitated by the impending birth of the triplets because his

current condominium had an open floor plan and only one bedroom with four walls, the

condo could not be modified to include a second bedroom with four walls, his request to

construct a temporary bedroom had been rejected by the condo association, and the size of

his family would exceed the design capacity of the condo upon the birth of the triplets.

Plaintiff maintained that he did not have sufficient funds to purchase a home and that the

need to buy a new home was caused by unforeseeable circumstances arising from events

beyond his control. Plaintiff also maintained that the maximum occupancy of his

condominium was three and that no reasonable person could have anticipated the birth of

triplets because the odds against such a pregnancy were 784-to-1 and it was unlikely that the

IVF attempt would be successful where multiple prior IVF attempts had failed. On March

17, 2011, the Committee denied plaintiff’s request for a hardship distribution, finding that

his situation did not meet the criteria for an unforeseeable emergency and noting that the

purchase of a home did not qualify as such an emergency.

¶ 5 Plaintiff appealed that decision to the Board and alleged that the Committee incorrectly

determined that the purchase of a home does not qualify as an unforeseeable emergency and

that such an emergency existed in this case where Elizabeth’s pregnancy with triplets and

plaintiff’s inability to modify his condominium to accommodate the triplets were

unforeseeable. On April 26, 2011, a hearing was conducted on plaintiff’s appeal, and the

hearing officer then prepared a report of its findings of fact based on plaintiff’s testimony and

other evidence presented at the hearing.

¶ 6 In that report, the hearing officer related that Elizabeth gave birth to premature triplets

in April 2011, the children were in the process of being released from the hospital, and

Elizabeth had been diagnosed with a heart condition that limited her mobility and required

the hiring of a nanny, which would cost about $4,000 per month. Plaintiff lived with

Elizabeth and their four year-old daughter in a condominium, which had an open floor plan

and contained one bedroom with four walls and a lofted master bedroom. Plaintiff put his

residence on the market in December 2010 in anticipation of the birth of the triplets, but was

unable to secure a purchaser or renter for the unit. Plaintiff retained an architect to modify

the condominium to accommodate the triplets, but on January 28, 2011, the architect told

plaintiff that he could not design such a modification in compliance with the Chicago

building code. Plaintiff sought permission from the condo association to construct a

temporary bedroom in his unit, but on February 18, 2011, that request was denied. Plaintiff

contacted his current mortgage provider and learned that he would likely be required to

provide a lender with at least 25% of the purchase price of a new home as a down payment.

Plaintiff was unable to rent suitable housing because he did not have access to sufficient

funds absent the rental or sale of his current residence and the health risks associated with

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premature babies required that he reside near Northwestern Hospital and avoid subjecting

the triplets to multiple moves.

¶ 7 On May 9, 2011, the Board denied plaintiff’s request for a hardship withdrawal to

purchase a home, finding that while certain circumstances may warrant a distribution to

purchase a home, this case did not constitute an unforeseeable emergency. The Board found

that it was not unforeseeable that an IVF would result in multiple pregnancies and that

although plaintiff had experienced many failed IVF attempts in the past, the use of IVF and

the resulting pregnancy were not beyond plaintiff’s control. The Board also found that

Elizabeth’s medical condition constituted an unforeseeable emergency, but determined that

a distribution could not be granted “until either a loss of income or unreimbursed medical

expense is incurred.”

¶ 8 On June 26, 2011, plaintiff filed a petition for a writ of certiorari with the circuit court

alleging that the Board’s decision was against the manifest weight of the evidence and

contrary to fact and law and asking for judgment in his favor. On February 16, 2012, the

court conducted a hearing on the petition and affirmed the Board’s decision, finding that it

was not unforeseeable that an IVF might result in a pregnancy with triplets and that the

addition of even a single child to plaintiff’s residence would have caused difficulty for

plaintiff’s family due to the small size of his condominium.

¶ 9 ANALYSIS

¶ 10 On appeal, plaintiff contends that the decisions of the Board and the Committee to deny

his hardship withdrawal request are clearly erroneous in light of overwhelming evidence that

he was experiencing a severe financial hardship as the consequence of an unforeseeable

emergency at the time of his request. The standards of review under a common law writ of

certiorari are essentially the same as those under the Administrative Review Law (735 ILCS

5/3-101 et seq. (West 2010)). Hanrahan v. Williams, 174 Ill. 2d 268, 272 (1996). On

administrative review, an appellate court reviews the final decision of the administrative

agency, and not the decision of the circuit court. Nichols v. Chicago Transit Authority

Hardship Committee, 338 Ill. App. 3d 829, 831 (2003). The applicable standard of review

to apply on review of an administrative agency decision depends on whether the question

presented is one of fact, one of law, or a mixed question of fact and law. Cinkus v. Village

of Stickney Municipal Officers Electoral Board, 228 Ill. 2d 200, 210 (2008).

¶ 11 The parties agree that the issue in this case requires an examination of the legal effect of

a given set of facts and, therefore, presents a mixed question of fact and law. As such, we

will review the Board’s decision under a clearly erroneous standard of review. City of

Belvidere v. Illinois State Labor Relations Board, 181 Ill. 2d 191, 205 (1998). An agency’s

decision will be deemed clearly erroneous when the reviewing court is left with the definite

and firm conviction that a mistake has been made. AFM Messenger Service, Inc. v.

Department of Employment Security, 198 Ill. 2d 380, 395 (2001).

¶ 12 The State of Illinois Employees’ Deferred Compensation Plan allows an employee of the

State of Illinois to designate a portion of his or her salary to be withheld each month and

invested in a manner approved by the Board and in compliance with section 457 of the

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Internal Revenue Code (26 U.S.C. § 457 (2006)). 80 Ill. Adm. Code 2700.110(a) (2009). A

distribution from an employee’s deferred compensation account shall be permitted in the

event the employee experiences an unforeseeable emergency. 80 Ill.Adm.Code 2700.740(a),

amended at 33 Ill. Reg. 13451 (eff. Sept. 14, 2009). An “unforeseeable emergency” is

defined as a severe financial hardship to the employee resulting from an unexpected illness

or accident of the employee or a dependent, loss of the employee’s property due to casualty,

“or other similar extraordinary and unforeseeable circumstances arising as a result of events

beyond the control of the [employee].” 80 Ill. Adm. Code 2700.200(a), amended at 33 Ill.

Reg. 13451 (eff. Sept. 14, 2009). Although the purchase of a home generally will not qualify

as an unforeseeable emergency, the imminent foreclosure of or eviction from the employee’s

primary residence may constitute such an emergency. 26 C.F.R. § 1.457-6(c)(2)(i) (2011).

¶ 13 Plaintiff asserts that the Committee’s decision was clearly erroneous because it was not

supported bylegal or factual analysis. The Committee is responsible for determining whether

an employee is entitled to a distribution due to an unforeseeable emergency (80 Ill. Adm.

Code 2700.320(a) (2009)), and the Board is responsible for resolving all benefit claims and

claims appeals (80 Ill. Adm. Code 2700.310(a)(8), amended at 33 Ill. Reg. 13451 (eff. Sept.

14, 2009)). Here, the Committee denied plaintiff’s request for a hardship distribution,

plaintiff appealed that denial to the Board, a hearing was conducted on plaintiff’s appeal, and

the Board resolved plaintiff’s appeal by denying his request. As such, the Board’s denial of

plaintiff’s request for a hardship withdrawal was the final administrative decision on the

matter and, as such, we will limit our review to the Board’s decision and will not consider

the decision of the Committee. Nichols, 338 Ill. App. 3d at 831.

¶ 14 Plaintiff next asserts that the Board’s decision is clearlyerroneous because its finding that

the possibility of multiple pregnancies resulting from IVF was not unforeseeable had no

evidentiary basis where the odds of a pregnancy resulting in triplets were 784-to-1. We

initially note that because plaintiff’s condominium had a maximum occupancy of three and

contained two bedrooms, only one of which had four walls, the birth of a single child would

have caused plaintiff’s family to exceed the condo’s maximum occupancy and that any

multiple birth, not just a birth of triplets, therefore, would have caused a housing crisis. Also,

the odds set forth by plaintiff regarding the chances of a pregnancy resulting in triplets do not

accurately reflect the likelihood of such a development in this case because those odds, as

plaintiff states in his withdrawal request, include both natural and IVF pregnancies. In fact,

the website cited by plaintiff relates that there is about a 19% chance that an IVF pregnancy

will result in twins and a 4% chance an IVF pregnancy will result in triplets (Childbirth

Solutions, Fact Sheet: In Vitro Fertilization (IVF), available at

http://childbirthsolutions.com/articles/fact-sheet-in-vitro-fertilization-ivf (last visited Feb.

27, 2013)), and those estimates are roughly consistent with the data showing that the 1

chances of a multiple pregnancy are higher in IVF pregnancies than in non-IVF pregnancies

(see Centers for Disease Control and Prevention, National ART Success Rates, available at

While the factsheet says that “about 50% are singletons, 24% are twins and 5% are triplets

1

or more,” it appears that those percentages represent proportions of a total of 78% of IVF

pregnancies that result in a live birth.

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http://apps.nccd.cdc.gov/art/Apps/NationalSummaryReport.aspx (last visited Feb. 27, 2013);

Laura A. Schieve, Herbert B. Peterson, Susan F. Meikle, Gary Jeng, Isabella Danel, Nancy

M. Burnett, Lynne S. Wilcox, Live-Birth Rates and Multiple-Birth Risk Using In Vitro

F e r t i l i z a t i o n , 2 8 2 J A M A 1 8 3 2 ( 1 9 9 9 ) , a v a i l a b l e a t

http://jama.jamanetwork.com/article.aspx?articleid=192105 (last visited Feb. 27, 2013)).

Further, regardless of the exact odds, it is common knowledge that a pregnancy may result

in twins or triplets, and we determine that the Board’s finding that the possibility of multiple

pregnancies resulting from IVF was not unforeseeable is not clearly erroneous.

¶ 15 Plaintiff next asserts that the Board’s determination that the use of IVF and the resulting

pregnancy were within his control ignores the fact that the emergency at issue was caused

by a multitude of unforeseen factors. Plaintiff maintains that the Board incorrectly

determined that, because the decision to pursue IVF was within plaintiff’s control, any

consequences which flowed from that decision, no matter how unlikely, were not

unforeseeable. The Board, however, clearly stated in its decision that Elizabeth’s medical

condition, which was a consequence of her pregnancyand the birth of the triplets, constituted

an unforeseeable emergency and appears to have subsequently granted plaintiff a hardship

withdrawal on that basis. In this case, the Board found that the alleged housing emergency

was not unforeseeable given the possibility of multiple births resulting from IVF and the

small size of plaintiff’s condominium, and the record does not support plaintiff’s claim that

the Board ignored certain factors in reaching its decision.

¶ 16 To the extent plaintiff further asserts that the Board improperly found that the proposed

use of the withdrawal to purchase a home was a de facto bar to a hardship distribution, that

claim is contradicted by the record. In its decision, the Board acknowledged that “there are

certain circumstances which may warrant a distribution in order to purchase a home,” but

found that the circumstances in this case did not constitute an unforeseeable emergency. As

such, the Board did not treat the proposed use of the funds to purchase a home as a de facto

bar to a distribution, and we conclude that the Board’s denial of plaintiff’s request for a

hardship withdrawal to purchase a home is not clearly erroneous.

¶ 17 CONCLUSION

¶ 18 Accordingly, we affirm the judgment of the circuit court of Cook County.

¶ 19 Affirmed.

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