## I L L I N O I S 

## O F F I C I A L 

## RE P O R T S Appellate Court

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

Appellate Court Caption ROBERT L OPEZ CEPERO, Plaintiff-Appellant, v. I L L I NOI S STATE BO ARD OF I

NVESTMENT, a

n Administrative Ag ency of the State of I llinois ; WIL L I

A M R. ATWOOD, Ex ecutive Direc tor of the I llinois State Boa rd of Investment; K

A T H E RI N E A

. SP I N A T O
, Deputy Direc tor of the I llinois State Boa

rd of I n vestment; J OHN W. CASEY, FRED MONTGOMERY, THOMAS E. HOF FMAN
, and MI CHEL E BU SH, Members of the Ex ecutive Commi ttee of the I llinois State Boa rd of Investment; L I

NSEY SCHOEMEL
, Hea ring Offic er of the I llinois State Boa rd of Investment; THE DEPARTMENT OF CENTRAL MANAGEMEN T SERVI CES, an Administrative Ag ency of the State of I llinois ; J AM E S P

. SL EDGE, Direc tor of the Depa rtment of Central Manag ement Service s; KI M BL OCK, Assistant Division M anage r Def err ed Compensation Staff of the Depa rtment of Central Manag ement Service s; and J ASON MUSGRAVE, Ex ecutive Secre tary Def er re d Compensation Har dship Commi ttee of the Depa rtment of Centra l Manag ement Servic es, De fenda nts-Appellee s.

District & N o. First District, Second D ivision Docke t No. 1-12-0919

Filed Marc h 5, 2013

Held (Note : This syl lab u s

con st it ut e s no par t of the opi nio n of the cour t but has bee n pre

par ed b y the Repo rt er of D e c i s i o n s f

o r t h e

c o n v e n i e n c e o

f t h e

rea der

. ) The denial of plaintiff’s reque st for a hardship withdrawa l of his defe rre d

c o mp e n s a tion acc ount was upheld, notwithstanding his contention th a t a n “unfor esee able emer g ency” arose when his wife bec ame pregnant with triplets as a result of in vitro fer tiliz ation and he would have to purcha se

a new home for his family
, since that situation di d n o t constitute an “unfor esee able emer g ency” for purposes of the provisions of the I llinois Administrative Code g overningdefe rre d compensation plans.Dec ision Under

Review Appea l from the Cir cuit Court of Cook County
, No. 11-CH-20189; the Hon. Rita Mary

Novak, Judge , presiding

.

J udg ment Affir med.

Counsel on Appea l Trac y A. Robb, of L aw Offic es o f T ra cy A. Robb, of Chicag o, for appellant.

L isa Madig an, Attorney Gene ral, of Chicag o (Mich ae l A. Scodro, Solicitor Gene ral, and Carl J

. Elitz
, Assistant Attorney Gene ral, of counsel), f

or appe llees.

Panel J USTI CE SI MON deliver ed the judg ment of the c ourt, with opinion. Presiding J ustice Har

ris and J ustice Quinn concur red in the judgme nt and opinion.

OP INION

¶ 1 P l ai n tiff Robert Cepero appea ls from an order of the circ uit court of Co o k C o u n t y aff irming the decision of the I llinois State Boa rd of Investment (B oard) to de ny his r equest for a hardship withdrawa l from his defe rre d compensation acc ount. On appea l, plaintiff contends that the denials of his hardship withdrawa l r equest by the Boa rd and the Def

err ed Compensation Ha rd s hip Commi ttee (Committ ee) are clea rly err oneous in light of

overwhelming evidenc e that he was experiencing a financ ial hardship as the conseque nce of an unfor esee able e merg ency at the time. For

the re asons that follow, we aff irm.

¶ 2 BA CKGROUND ¶ 3 On J anuar

y 12, 2011, plaintiff filed a hardship withdrawa l reque st for the balanc e of his defe rre d compensation account, totaling$104,007.82, due to an unfore seea ble emer g ency

. Plaintiff asser

ted that his wife, Eliz abeth, was pregnant with triplets as a result of a

succe ssful in vitro fer

tiliz ation (IVF) and had rea ched her twenty -sec ond wee k of pregnancy

. Due to the medical complications of such a pregn an cy , Eliz abeth was require d to g o on unpaid medical leave no later than J anuar y 20, 2011, and likely could not return to work until Dec ember 19, 2011, resulting in $113,972.91 in lost wag es. Plaintiff mai n tained that the triplet pregnancy was unfore seea ble beca use he and Eliz abeth had a long history of infertility and repeat ed fa i l ed I VF attempts over the past deca de and that the pregnancy cause d a financ ial emer g ency due to the combination of Eliz abeth’ s los t wa ges and the additional

-2-costs of car ing for the tripl et s, including nece ssary 24-hour child car e assistance and

modifications to plaintiff’s loft condominium. On Fe bruar y 3, 2011, the Commi ttee denied plaintiff’s reque st for a hardship distribution beca use Eliz abeth had not y et lost any income and re quested that plaintiff notify it when Elizabeth beg an her leave of abse nce. ¶ 4 On Fe bruar

y 24, 2011, plaintiff filed a hardship withdrawa l reque st for the balanc e of his defe rre d compensa

tion acc ount for a d own pay ment on a home. Plaintiff asser ted that the purcha se of the home was nece ssitated b y t h e i mp ending birth of the triplets beca use his

curr ent co n d o m i n i um had an open floor plan and only one bedroom with four walls, the condo could not be modified to include a s econd bedroom with four walls, his reque st to construct a

temporar y bedroom ha d been reje cted by the condo association, and the size of his family would exceed the desig n capa city of the condo upon the birt h o f t h e triplets. Plaintiff maintained that he did not h av e sufficie nt funds to purcha se a home and that the need to bu y a new home was cause d by unfore seea ble circ umstances arising from events beyond his control. Plaintiff also maintained that the maxi mum occupa ncy of his condominium was three and that no rea sonable person co u l d h av e anticipated the birth of triplets beca

use the odds ag ainst such a pregnancy wer e 784-to-1 and it was unlikely that the I VF attempt would be successful where mult iple prior I VF attempts h ad failed. On Marc h 17, 2011, the C ommitt ee denied plainti ff’ s reque st for a ha rdship distribution, findi ng that his situation did not meet the criter ia for an unfore s ee ab l e emerg ency and noting that the purcha se of a

home did not qualify

as such a n emer g ency

. ¶ 5 Plaintiff appea led that decision to the Boa rd and alleg ed that the Commi ttee incorre ctly deter mined that the purcha se of a home does not qualify as an unfore seea ble emer g ency and that such an emer g ency exis ted in this case wher e Eliz ab et h ’s pregnancy with triplets and plaintiff’s inability to modify his co ndominium to acc ommodate the triplets wer e unfore seea

ble. On April 26, 2011, a hear ing was conducte d on plaintiff’s ap p ea l
, an d the hear ing office r then prepa red a repor

t of its finding s of fac t based on plaintiff’s testimony and other e vidence prese nted at the he aring

. ¶ 6 In that repor

t, the hearing office r related that Eliz abeth gave birth to premature triplets in April 2011, the children wer e in the p ro cess of being rele ased from the hospital, and Eliz abeth had been dia g nosed with a hear t c ondition that limit ed her mobilit y and require d
t h e hiring of a nanny , which would cost about $4,000 per month. Plaintiff lived wi t h Eliz abeth and their four y ear -old daug hter in a condominium, which had an open floor plan and contained one bedroom with four walls and a lofted m aster bedroom. P l ai n t i ff p ut his residenc e on the marke t in Dec ember 2010 in anticipation of the birth of the triplets, but was unable to secur e a purcha ser or rente r for the uni t. Plaintiff reta ined an arc hitect t o modify the condominium to acc ommodate the triplets, but on J anuar y 28, 2011, the ar ch i t ect told plaintiff that he could not desig n such a modifi ca t i o n i n compliance with the Chicag o building code. Plaintiff soug ht permission from the condo association to construct a temporar y bedroom in his unit, but on Fe bruar y 18, 2011, that reque st was denied. Plaintiff
cont ac ted his curr ent mortg ag e provider and lear ned that he would likely be require d to provide a lender with at least 25% of the purcha se price of a new home as a down pay ment. Plaintiff was unable to re n t s u itable housing beca use he did not have acc ess to sufficie nt funds absent the r ental or sale of his curr ent residence and t he health risks associate d with

-3-premature b abies require d that he reside near Northwe stern Hospital and avoid subjecting

the triplets to multi ple moves. ¶ 7 On M ay 9
, 2 0 1 1
, t h e Boa rd denied plaintiff’s reque st for a hardship withdrawal t o purcha se a home, finding that while cer tain circ umstances m ay warrant a distribution to purcha se a home, this case did not constitute an unfore seea ble emer g ency

. The Boa

rd found that it was not unfore seea ble that an I VF wo u ld result in multipl e pregnancie s and that althoug h plaintiff had experience d many failed I VF attempts in the past, the use of I VF and the resulting pregnancy wer e not bey o n d p laintiff’s control. The Boa rd also found that Eliz abeth’ s medical condition constituted an unfore seea ble emer g ency , but deter

mined that a dis tribution could not be gra nted “until either a loss of i ncome or u n re i m b ursed medical expense is incurre d.” ¶ 8 On J une 26, 2011, plaintiff filed a petition f or a writ of certiorari with the circ uit c ourt alleg ing that the Boa

rd’s decision was ag ainst t h e manifest weig ht of the evidenc e and
contra ry t o fa ct an d l aw and asking for judgme nt in his favor

. On Fe bruar y 16, 2012, the
court c onducted a

hear ing on the petition a

nd aff irmed the Boa

rd’s decision, finding that it

was not unfore seea

ble that an I VF might result in a pregnancy with t ri p l et s and that the addition of even a single child to plaintiff’s residenc e wou l d h av e cause d difficulty for plaintiff’s fa

mily due to the small size of his condominium.

¶ 9 ANALYSI S ¶ 10 On appea l, plaintiff contends that the decisions of the Boa rd and the Commi ttee to deny his hardship withdrawa l reque st are clea rly err oneous in light of overwhelming evidenc e that he was ex p er iencing a sever e financ ial hardship as the conseque nce of an unfore seea ble

emer g ency at the time of his r equest. The standards of revie w under a common law writ of certiorari are essentially the same as those under the Administrative Review L aw (735 I L CS 5/3-101 et seq. (W es t 2 010)). Hanrahan v. W illiams
, 174 I ll. 2d 268, 272 (1996). On administrat i v e review, an appellate court revie ws the final decision of the administrative
ag ency , and not the decisio n of the circ uit court. Nichols v. Chicago Transit Authority Hardship Committee
, 338 I ll. App. 3d 829, 831 (2003). T he applica ble s tandar d of review
t o ap p l y o n revie w of an administrative ag ency decision depends on whether the question
prese nted i s one of f

act, one of law, or

a mix ed question of f

act and law. Cinkus v. Vil lage of Stickney

Municipal Officers Elec toral Board , 228 I ll. 2d 200, 210 (2008). ¶ 11 The parties ag ree that the issue in this case require s an examination of the leg al eff ect of

a g iven set of fac ts and, there fore
, prese nts a mix ed question of fac t and law. As such, we will revie w the Boa

rd’s decision under a clea rly err oneous standard of re view. City of Belvide re v. Illinois State Labor Relations Board
, 181 I ll. 2d 191, 205 (1998). An ag ency ’s decision will be deeme d clea rly err oneous when the revie wing court is left with the definite and firm conviction th at a m i stake has been made. AFM Messe nger Servic e, Inc. v. Departme nt of Employment Se curity , 198 I ll. 2d 380, 395 (2001). ¶ 12 The State of I llinois Employ ees’ Def err ed Compensation Plan allows an employ ee of the State of I llinois t o d esi g nate a portion of his or her salary to be withheld eac h month and invested in a manner approve d by the Boa rd and i n compliance with section 457 of the

-4-Interna l Revenue Code (26 U.S.C. § 457 (2006))

. 80 I ll. Adm. Code 2700.110(a) (2009). A

distribution from an employee’ s defe rre d compensation acc oun t shall be permitted in the
event the employ ee experience s an unfore seea ble eme r g e n c y

. 8 0 I ll

. A d

m. Co d e 2700.740(a)
, amende d at 33 I ll

. R eg. 1 3 451 (ef f. Sept. 14, 2009). An “unfor esee able emer g ency” is define d as a sever e financ ial hardship to the employ ee resulting from an unexpected illness

or acc ident of the employ ee or a depende nt, loss of the employ ee’ s proper ty due to casua lty
, “or other simil ar extraordinary and unfore seea ble circ umstances arising as a result of events beyond the control of t he [ employee].” 80 I ll

. Ad m

. C o d e 2700.200(a), amended at 33 I ll. Reg

. 13451 (ef

f. Sept. 14, 2009). Although the purcha se of a home g ener ally will not qualify

as an unfore seea

ble emer g ency , the imminent fore closure of or eviction from the employ ee’ s primary residenc e may

constitute such an e merg ency . 26 C.F.R. § 1.457-6(c )(2) (i) (2011)

. ¶ 13 Plaintiff asser ts that the Commi ttee’s decision was clea rly err oneous beca

use it was not

s upported by leg al or fac tual analy sis. The Commi ttee is responsible for deter mining wheth e r

an employ ee is entitled to a distribu t i o n due to an unfore seea ble emer g ency (80 I ll. Adm. Code 2700.320(a) (2009))
, and the Boa rd is responsible for resolving all benef it claims and claims appea ls (80 I ll. Adm. Code 2700.310(a) (8), amende d at 33 I ll. Reg

. 13451 (ef f. Sept. 14, 2009)). Her e, the Comm i t t ee d enied plaintiff’s reque st for a hardship distribution, plaintiff appea led that denial to the Boa rd, a hear ing was conducte d on plaintiff’s appea l, and the Boa rd resolved plaintiff’s appea l by denying his reque st. As such, the Boa rd’s denial of plaintiff’s reque st for a hardship withdrawa l was the final administrative decisi o n o n the
matter a nd, as such, we will lim it our review to the Board’ s decision and will not consider the dec ision of the Commi ttee. Nichols , 338 I ll. App. 3d at 831. ¶ 14 Plaintiff next asser ts that the Boa

rd’s de c is io n is clea

rly err oneous beca

use its findingthat the po s s i b i lity of multipl e pregnancie s resulting from I VF was not unfore seea ble had no evidentiar y basis wher e the odds of a pregnancy resulting in triplets wer e 784-to-1. We initially note that beca

use plaintiff’s condominium had a maxi mum occupa ncy of three and contained two bedrooms, only one of which had four walls, the birth of a single child would have cause d pl ai n t i ff’s family to exceed the condo’s maxi mum occupa ncy and that any multipl e birth, not just a birth of triplets, there fore
, would have cause d a housing crisis. Also, the odds set forth by plaintiff reg arding the chanc es of a pregnancy resulting in triplets do not

acc urate ly ref

lect the likelihood of such a development in this case beca use t hose odd s , as plaintiff states in his withdrawa l reque st, include both natura l and I VF pregnancie s. In fac t, the website cited by plaintiff relates that there is about a 19% chanc e that an I VF pregnancy will result in twi n s an d a 4% chanc e an I VF pregnancy will result in triplets (Childbirth S o l u t i o n s , F a c t S h e e t : I n V i t r o F e r t i l i z a t i o n ( I V F )
, a v a i l a b l e a t http:// childbirthsolutions .com/article s/fact- sheet-in- vitro-fe rtiliz ation-ivf (last visited Fe b. 27, 2013)), and those estimates are roug h l y consistent with the data showing that the

1 chanc es of a multipl e pregnancy are highe r in I VF pregnancie s than in non-IVF pregnancie s (see Centers for Disease Control and Prevention, National ART Success Rates, available at

Wh il e the fa ct she et says tha t “ab out 50% ar e si nglet ons , 24% ar e twi ns and 5% ar e tr ipl et s 1

or m ore ,” it app ear s tha t tho se per cen ta ges re pre sen t pro por ti ons of a to t a l of 78% of I V F
pre gnanci es tha t r esu lt in a l ive bi rt h.

-5-htt p :/ /a p p s

. n c c d

. c d c

. g o v/a

r t/ A p p s /N a tiona lSumm ary

Report.aspx (las t v is it e d F e b

. 2 7
, 2 0 1 3 ) ; L aura A. Schieve, Her

bert B. Peterson, Susan F. Meikle, Gar y J eng , I sabella Dane l, N ancy M. Bur nett, Ly nne S. Wil cox, Live-Birth Rates and Multiple-Birth Ris k Us ing 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.jamane twork.com/ar ticle.aspx? art i cleid=192105 (last visited Fe b. 27, 2013)). Fur ther, reg ardle ss of the exact odds, it is common knowledg e that a pr eg nancy may result in twins or triplets, and we deter mine that the Boa

rd’s finding that the possibili ty of multipl e pregnancie s resultingfrom IVF w as not unfore seea ble is not clear ly

err oneous. ¶ 15 Plaintiff next asser ts that the Boa

rd’s deter mination that the use of IVF and the re sulting
pregnancy we re wi t hin his control i g nores the fac t that the emerg ency at i ssue was cause d by a multit ude of unfore see n fac tors. Plaintiff maintains that the Boa rd incorre ctly deter mined that, beca

use the decision to pursu e I VF was within plaintiff’s control, any conseque nces which flowed from that decision, no matter how unlikely
, we re not unfore seea

ble. The Boa

rd, howeve r, clea

rly stated in its decision that Eliz abeth’ s medical condition, which was a conseque nce of her pregnancy and the birth of the triplets, constituted an unforesee able emerg ency and appe ars to have subsequently grante d plaintiff a hardship withdrawa l on that basis. I n this c ase, the B oard f ound that the alleg ed housingemer g ency

was not unfore seea

ble g iven the possibili ty of multipl e births re s u lting from I VF and the small siz e of plaintiff’s condominium, and the rec ord does not support plaintiff’s claim that the B oard ig nored c erta in fac tors in rea chingits decision. ¶ 16 To the extent plaintiff further asser ts that the Boa

rd improperly found that the proposed

use of the withdrawa l to pur chase a home was a de facto bar to a hardship distribution, that claim is c ontradicte d by the rec ord. In its de cision, the Boa rd acknow ledg ed that “ther e are

cer tain circ umstances which may war rant a di s t ri b u tion in order to purcha se a home,” but found that the circ umstances in this case did not constitute an unfore seea ble emer g ency

. As such, the Boa

rd did not treat the proposed use of the funds to purcha se a home as a de facto bar to a distribution, and we conclude that the Boa rd’s denial of plai n t i ff’s reque st for a hardship withdra

wal to purc hase a

home is not clear ly

err oneous.

¶ 17 CONCLUSI ON ¶ 18 Acc ording ly , we a ffirm the judg ment of the c ircuit court of Cook County

.

¶ 19 Affir

med.

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