Court Opinion

ID: 2679400
Source: CourtListenerOpinion
Date Created: 2014-06-19 01:24:50.049952+00
Date Added: 2024-06-11T13:11:50.460096
License: Public Domain

Illinois Official Reports

                                          Appellate Court

             Ferris, Thompson, & Zweig, Ltd. v. Esposito, 2014 IL App (2d) 130129

Appellate Court              FERRIS, THOMPSON, AND ZWEIG, LTD., Plaintiff-Appellee, v.
Caption                      ANTHONY ESPOSITO, Defendant-Appellant.

District & No.               Second District
                             Docket No. 2-13-0129

Filed                        February 5, 2014

Held                         In an action to recover the fees plaintiff law firm was owed pursuant to
(Note: This syllabus         a referral agreement under which defendant attorney was to represent
constitutes no part of the   two workers’ compensation claimants before the Workers’
opinion of the court but     Compensation Commission and plaintiff was to perform other
has been prepared by the     services, including document preparation, interviews, and translation
Reporter of Decisions        services, the trial court properly rejected defendant’s contention that
for the convenience of       the claim should have been filed with the Commission, not in the trial
the reader.)                 court, and awarded plaintiff 45% of the fees recovered according to
                             the referral agreement, notwithstanding the language of section 16a(J)
                             of the Workers’ Compensation Act suggesting that all disputes
                             regarding attorney fees shall be resolved by the Commission, since the
                             statute was referring to the fees of those representing claimants before
                             the Commission, not the breach of a referral agreement such as the
                             agreement at issue in the instant case where plaintiff did not represent
                             the claimant before the Commission, but performed ancillary tasks,
                             not services in connection with the Act.

Decision Under               Appeal from the Circuit Court of Lake County, No. 12-SC-622; the
Review                       Hon. Michael J. Fusz, Judge, presiding.
     Judgment                  Affirmed.

     Counsel on                Michael D. Furlong, of Trobe, Babowice & Associates, LLC, of
     Appeal                    Waukegan, for appellant.

                               Saul M. Ferris, of Ferris, Thompson & Zweig, Ltd., of Gurnee, for
                               appellee.

     Panel                     JUSTICE BIRKETT delivered the judgment of the court, with
                               opinion.
                               Justices Hudson and Spence concurred in the judgment and opinion.

                                                OPINION

¶1         Plaintiff, Ferris, Thompson, & Zweig, Ltd., referred to defendant, Anthony Esposito, two
       workers’ compensation cases. According to the parties’ agreement, plaintiff was to receive
       45% of all attorney fees recovered in the cases, with defendant receiving the remaining 55%.
       When the cases were resolved, defendant never paid plaintiff. Accordingly, plaintiff sued
       defendant in the circuit court for breach of contract. Defendant moved to dismiss, arguing that
       the claim should have been filed with the Workers’ Compensation Commission (Commission)
       and not in the circuit court. See 735 ILCS 5/2-619(a)(1) (West 2012). The circuit court denied
       that motion and, following a trial, ordered defendant to pay plaintiff the fees it was owed plus
       interest. On appeal, defendant argues that the circuit court lacked subject matter jurisdiction
       over the case. We disagree, and, thus, we affirm.
¶2         The following facts are relevant to resolving the issue raised. On February 3, 2012, plaintiff
       filed its complaint for breach of contract. Plaintiff alleged that it and defendant entered into an
       agreement whereby “[they] agreed to act as co-counsel in the legal representation of” two
       women who were injured during their employment. The workers’ compensation cases were
       settled on November 29, 2010, for a total of $4,554.19. When plaintiff asked defendant for its
       share of the attorney fees, defendant refused to pay plaintiff.
¶3         Attached to plaintiff’s complaint was the attorney-client agreement plaintiff had with the
       two women and defendant. According to that agreement, which plaintiff, defendant, and both
       women signed, both women asserted that they had retained the services of plaintiff and
       “underst[oo]d and agree[d] that [plaintiff] ha[d] contracted with [defendant] to pursue this
       workers’ compensation claim on [the women’s] behalf.” The women further stated that they

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     understood and agreed that plaintiff would have various responsibilities and receive a portion
     of any attorney fees. In that regard, the agreement provided:
              “[Plaintiff] shall:
                   a. Assist [defendant] with initial interviews and document preparation necessary to
              the [workers’ compensation] claim;
                   b. Be responsible for assisting [defendant] with client contact and communication
              in the offices of [plaintiff], as the need arises;
                   c. Provide translation services as the need arises. However, translation services
              performed outside of the Offices of [plaintiff] will be an expense assessed to the
              client[s];
                   d. Represent the client[s] in any third party action. In the event a third party action
              is initiated as a result of the work-related injury, it is understood that [defendant] will
              continue representing the client[s] subject to the terms and conditions of the workers’
              compensation agreement concerning this workers’ compensation case;
                   e. Keep a duplicate file in its office containing any correspondence or filings
              associated with this claim; and
                   f. Receive 45% of all attorney’s fees recovered from this claim[.]”
¶4       The agreement then outlined defendant’s various duties and the attorney fees to which he
     was entitled. Specifically, the agreement stated:
              “[Defendant] shall:
                   a. Be responsible for the preparation of any necessary documents and obtaining all
              necessary records necessary to the processing of this claim;
                   b. Represent the client[s] before the Industrial Commission and will conduct any
              investigation, negotiations, and processing necessary to bring this claim to a
              conclusion;
                   c. Forward status reports to [plaintiff], every sixty days or as significant
              developments occur in connection with the handling of the claim; and
                   d. Receive 55% of all attorney’s fees recovered from this claim, plus
              reimbursement for the cost advanced by [defendant].”
¶5       Also attached to the complaint was a letter defendant wrote to plaintiff after the agreement
     was executed. In the letter, which both parties signed, defendant asserted that “[the parties]
     have agreed that this matter has been referred to [defendant’s] office and [plaintiff] will also
     undertake representation of [these] client[s].” Defendant then, in conformity with the
     agreement, reiterated the duties each party had and the percentage of the attorney fees each
     party was entitled to recover.
¶6       Defendant moved to dismiss, arguing that the circuit court lacked subject matter
     jurisdiction over the case (see 735 ILCS 5/2-619(a)(1) (West 2012)). Citing section 16a(J) of
     the Workers’ Compensation Act (Act) (820 ILCS 305/16a(J) (West 2012)), defendant claimed
     that “ ‘[a]ny and all disputes regarding attorney’s fees’ ” had to be “ ‘heard and determined by
     the Commission.’ ” Thus, defendant argued that, because this case concerned a dispute about

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       attorney fees owed in a workers’ compensation case, the matter had to be resolved by the
       Commission, not the circuit court.
¶7         Plaintiff responded, claiming that the action was properly brought in the circuit court.
       Plaintiff alleged that the circuit court had jurisdiction over the case, because “[t]he
       determination of the amount of the fees is solely based on the referring of the case from the
       Plaintiff[ ] to the Defendant.” In contrast, plaintiff asserted, “[the] Commission has exclusive
       subject matter jurisdiction to resolve attorney’s fee disputes relating to the award of attorney
       fees in the case before the Commission.” (Emphasis in original.) Because this case concerned
       the “enforce[ment of] a written contract with respect to referral of a client from one attorney to
       another,” where “Plaintiff[ ] did no work on the workers’ compensation claim and never filed
       any appearance before the Industrial Commission on behalf of the clients,” plaintiff argued
       that defendant’s motion to dismiss for lack of subject matter jurisdiction must be denied.
¶8         The circuit court denied defendant’s motion to dismiss, finding that section 16a(J) of the
       Act did not apply to this case. Specifically, the court found that plaintiff, which was not active
       in the workers’ compensation cases and never filed a fee petition with the Commission, was
       merely seeking what was owed to it pursuant to a referral-fee agreement. Defendant moved for
       an interlocutory appeal, the court denied that motion, and the cause proceeded with a trial.
       Following that trial, the court awarded plaintiff $4,965.25. This timely appeal followed.
¶9         At issue in this appeal is whether defendant’s motion to dismiss should have been granted.
       A motion to dismiss brought pursuant to section 2-619 of the Code of Civil Procedure (Code)
       (735 ILCS 5/2-619 (West 2012)) admits the legal sufficiency of the complaint and raises
       defects, defenses, or other matters that serve to defeat the claim. Cohen v. McDonald’s Corp.,
       347 Ill. App. 3d 627, 632 (2004). When a circuit court rules on a section 2-619 motion, it may
       consider the pleadings, depositions, and affidavits filed. Id. On appeal from an order granting a
       section 2-619 motion, we consider whether there exists a genuine issue of material fact that
       should have precluded the dismissal or, absent such an issue of fact, whether the dismissal was
       proper as a matter of law. Id. We review de novo an order granting a section 2-619 motion. See
       Hagemann v. Illinois Workers’ Compensation Comm’n, 399 Ill. App. 3d 197, 207 (2010).
¶ 10       Section 2-619(a)(1) of the Code permits the dismissal of a complaint when “the court does
       not have jurisdiction of the subject matter of the action.” 735 ILCS 5/2-619(a)(1) (West 2012).
       Whether a court has subject matter jurisdiction over a claim is determined by examining the
       nature of the case and the relief sought. Cohen, 347 Ill. App. 3d at 632. Illinois circuit courts
       are courts of general jurisdiction. Id. Thus, they have original jurisdiction over all justiciable
       controversies except (1) cases over which the federal courts have exclusive jurisdiction, (2)
       matters committed to administrative tribunals, and (3) those matters that the Illinois
       Constitution indicates are within the exclusive original jurisdiction of the Illinois Supreme
       Court. Id. at 632-33.
¶ 11       The Commission is an administrative agency. See City of Chicago v. Fair Employment
       Practices Comm’n, 65 Ill. 2d 108, 112-13 (1976). Thus, the Commission has the power to do
       only what the Act authorizes. Business & Professional People for the Public Interest v. Illinois
       Commerce Comm’n, 136 Ill. 2d 192, 243 (1989). When the Commission acts outside of what
       the statute allows, it acts without jurisdiction over the subject matter. See id.
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¶ 12        Accordingly, because the Commission’s authority is governed by the Act, we must
       examine several provisions of the Act to determine whether the Commission or the circuit
       court had jurisdiction over this case. In examining these provisions, we are guided by the
       well-settled rules of statutory construction. Specifically, the primary objective in construing a
       statute is to ascertain and give effect to the legislature’s intent. Blum v. Koster, 235 Ill. 2d 21,
       29 (2009). The best indicator of the legislature’s intent is the statutory language, which should
       be given its plain and ordinary meaning. Cinkus v. Village of Stickney Municipal Officers
       Electoral Board, 228 Ill. 2d 200, 216 (2008). When the statutory language is clear and
       unambiguous, it must be applied as written without resorting to extrinsic aids of construction.
       MidAmerica Bank, FSB v. Charter One Bank, FSB, 232 Ill. 2d 560, 565 (2009). Moreover, we
       will not depart from the plain statutory language by reading into it exceptions, limitations, or
       conditions that conflict with the legislature’s expressed intent. Id. at 565-66. “That is not to
       say, however, that we cannot consider the purpose for enacting the statute.” In re Marriage of
       Earlywine, 2012 IL App (2d) 110730, ¶ 18. Rather, we may consider the reason and necessity
       for the statute and the evils it was intended to remedy, and we will assume that the legislature
       did not intend an unjust result. In re Marriage of Rosenbaum-Golden, 381 Ill. App. 3d 65, 72
       (2008). As we review the dismissal of a complaint pursuant to section 2-619 of the Code, we
       review de novo the construction of a statute. Nelson v. County of Kendall, 2013 IL App (2d)
       120635, ¶ 10.
¶ 13        The provisions of the Act at play in this case are sections 16 and 16a (820 ILCS 305/16,
       16a (West 2012)). The relevant portion of section 16 provides:
                    “The Commission shall have the power to determine the reasonableness and fix the
               amount of any fee of compensation charged by any person, including attorneys,
               physicians, surgeons and hospitals, for any service performed in connection with this
               Act, or for which payment is to be made under this Act or rendered in securing any
               right under this Act.” 820 ILCS 305/16 (West 2012).
¶ 14        Section 16a of the Act deals exclusively with attorney fees. In addressing that topic, section
       16a(A) (820 ILCS 305/16a(A) (West 2012)) articulates what the legislative purpose of the
       section is. It states:
               “In the establishment or approval of attorney’s fees in relation to claims brought under
               this Act, the Commission shall be guided by *** the legislative intent, hereby declared,
               to encourage settlement and prompt administrative handling of such claims and thereby
               reduce expenses to claimants for compensation under this Act.” Id.
¶ 15        Section 16a(C) (820 ILCS 305/16a(C) (West 2012)) outlines how attorney fees should be
       set. That is, it states:
               “All attorneys’ fees in connection with the initial or original claim for compensation
               shall be fixed pursuant to a written contract on forms prescribed by the Commission
               between the attorney and the employee or his dependents, and every attorney, whether
               the disposition of the original claim is by agreement, settlement, award, judgment or
               otherwise, shall file his contract with the Chairman of the Commission who shall
               approve the contract only if it is in accordance with all provisions of this Section.” Id.

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¶ 16       Section 16a(J) of the Act dictates how disputes regarding fees are handled. Specifically, it
       provides:
               “Any and all disputes regarding attorneys’ fees, whether such disputes relate to which
               one or more attorneys represents the claimant or claimants or is entitled to the
               attorneys’ fees, or a division of attorneys’ fees where the claimant or claimants are or
               have been represented by more than one attorney, or any other disputes concerning
               attorneys’ fees or contracts for attorneys’ fees, shall be heard and determined by the
               Commission after reasonable notice to all interested parties and attorneys.” 820 ILCS
               305/16a(J) (West 2012).
¶ 17       Reading these provisions together, we determine that the Commission has the authority to
       set the amount of fees that should be awarded to attorneys who represent claimants in claims
       filed with the Commission and to resolve disputes regarding the amount of those fees. This
       authority does not extend to issues concerning a breach of a referral agreement delineating the
       percentage of the awarded fee that should be allotted to the attorney who represented the
       claimant before the Commission and the attorney who referred the claimant to that attorney.
¶ 18       In reaching this result, we observe that section 16 indicates that the Commission has the
       power to determine the amount of fees that should be awarded to an attorney who represented
       a claimant in a case that was brought before the Commission. Under section 16a(C), an
       attorney who represents a claimant in an action brought before the Commission must file with
       the Commission a written contract, executed between the attorney and the claimant or the
       claimant’s dependents, which must fix the amount of fees to which that attorney is entitled.
       Section 16a(J) reveals that, when there is a dispute concerning the fees, that dispute should be
       brought before the Commission.
¶ 19       Although section 16a(J) refers to “[a]ny and all disputes regarding attorneys’ fees” (id.),
       we cannot conclude that, by this language, the Act confers on the Commission the authority to
       resolve a case concerning the breach of a referral agreement in a workers’ compensation case.
       “When the plain language of two statutes conflicts, [a reviewing court] will attempt to construe
       them together, in pari materia, if such an interpretation is reasonable.” Abruzzo v. City of Park
       Ridge, 231 Ill. 2d 324, 332 (2008). “Legislative intent remains the foremost consideration,
       however.” Id. “In determining that intent, [reviewing courts] may consider the statutes in their
       entirety, their purposes, the problems they target and the goals they seek to achieve.” Id. In
       doing so, “[w]ords and phrases should not be interpreted in isolation, but must be construed in
       light of other relevant provisions of the statute.” Id. at 333.
¶ 20       Here, reading all of the relevant parts of the Act together, we determine that, when the
       legislature used the phrase “[a]ny and all disputes regarding attorneys’ fees,” it was referring to
       disputes concerning the amount of fees to be awarded to those who represent clients before the
       Commission (see 820 ILCS 305/16a(J) (West 2012)). If we were to say that section 16a(J)
       gave the Commission jurisdiction over the breach of the referral agreement at issue in this case,
       we would be ignoring not only the specific power that section 16 grants to the Commission, but
       also the legislative intent of section 16a. That is, the legislature explicitly stated in section
       16a(A) that the purpose of section 16a is to handle workers’ compensation claims
       expeditiously so that a claimant may recover more of the amount of compensation awarded. If
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       we were to hold that section 16a(J) allowed the Commission to resolve the breach of the
       referral agreement in this case, that purpose would be thwarted, as resolving that issue would
       take more time and potentially deplete more of the award given to the claimants.
¶ 21        Defendant argues that the Commission had jurisdiction over this case, because (1) plaintiff
       asserted in its complaint that it and defendant were to act as “co-counsel,” (2) referring the
       claimants to defendant was a “service” as provided in the Act; and (3) the Act dictates how
       referral agreements in workers’ compensation cases are to be executed. We find none of these
       arguments availing.
¶ 22        First, the mere fact that plaintiff referred to the parties as “co-counsel” in its complaint does
       not mean that they were, in fact, co-counsel before the Commission. Indeed, the documents
       attached to plaintiff’s complaint reveal that the parties were not co-counsel before the
       Commission. That is, according to these documents, defendant agreed that he would
       “[r]epresent the client[s] before the Industrial Commission and *** conduct any investigation,
       negotiations, and processing necessary to bring this claim to a conclusion.” In contrast,
       plaintiff was to perform many ancillary tasks, like providing translation services, assisting with
       initial interviews, and keeping duplicate records in its office. When the Act uses the phrase
       “any fee of compensation charged by any person, including attorneys” (820 ILCS 305/16
       (West 2012)), it means fees charged for performing services like filing the claim, representing
       the claimant before the Commission, and attempting to settle the claim, as such acts would be
       “service[s] performed in connection with this Act” (820 ILCS 305/16 (West 2012)). The
       services that plaintiff provided do not fall within this category.
¶ 23        Second, and similarly, referring clients to another attorney is not a “service” as that term is
       used in the Act. Reading all of the provisions of the Act together, it is clear that, when the Act
       refers to “service,” it means work done on the claim itself. Here, the parties agreed that
       defendant would prosecute the claim. That is, the parties agreed that defendant would provide
       “service” under the Act. The value of that “service” could have been an issue for the
       Commission, but whether plaintiff was owed a fee for referring the claimants to defendant for
       “service” was not.
¶ 24        Third, while the Act does provide guidance for how referral agreements for workers’
       compensation cases should be executed (see 820 ILCS 305/16b(a) (West 2012); Ill. R. Prof.
       Conduct (2010) R. 1.5(e) (eff. Jan. 1, 2010)), we cannot conclude, as defendant suggests, that
       the Commission thus has jurisdiction over the breach of a referral agreement. Beyond the
       reasons set forth above, we fail to see why the Commission would be inserted into a dispute
       concerning a referral agreement executed by two attorneys. In contrast, it is quite clear why the
       Commission would be involved in setting reasonable fees that an attorney may charge a
       claimant, as, unlike two attorneys executing a referral agreement, an attorney and a claimant
       are not similarly situated and the Commission is well placed to ensure that any agreement
       reached between these parties is not unconscionable. See 820 ILCS 305/16 (West 2012)
       (providing that the Commission has the power to determine the reasonableness and fix the
       amount of fees an attorney charges in representing a claimant).
¶ 25        For these reasons, the judgment of the circuit court of Lake County is affirmed.

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¶ 26   Affirmed.

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