Court Opinion

ID: 9520784
Source: CourtListenerOpinion
Date Created: 2023-08-07 01:49:57.468486+00
Date Added: 2024-06-11T12:46:54.739848
License: Public Domain

JUSTICE GOLDENHERSH, concurring in part and dissenting in part: I concur in the resolution of all the issues addressed in the opinion, but I respectfully dissent from the decision to not address the applicability of the common-fund doctrine. Plaintiff has raised the issue of whether defendant is responsible for attorney fees incurred in the recoupment of payments from Phelps’s insurer under the common-fund doctrine. Defendant contends this issue was waived, and the majority has declined to address the question. The rule of waiver is an admonition on the parties, however, and not a limit on the jurisdiction of the appellate court. As the applicability of the common-fund doctrine is a question of law that is essential to the trial court’s disposition of this case on remand, we should review the issue pursuant to Supreme Court Rule 366(a)(5) (155 Ill. 2d R. 366(a)(5)). See Catholic Charities of the Archdiocese v. Thorpe, 318 Ill. App. 3d 304, 311, 741 N.E.2d 651, 655 (2000); Daley v. License Appeal Comm’n, 311 Ill. App. 3d 194, 200, 724 N.E.2d 214, 220 (1999). The responsibility of the appellate court to address such unresolved questions was examined in Thorpe: “In response to Seller’s contention that Buyer’s argument from Grossinger was waived by defendant’s failure to raise this issue below, Buyer contends that the issue was raised, albeit obliquely and briefly. Buyer contends that the issue was sufficiently raised by him in response to a motion to strike affirmative defenses where he argued that ‘to be valid a provision for liquidated damages must be for a certain sum,’ apparently contending that there is uncertainty insofar as Seller attempted to preserve his right to affirmative damages alternatively to his right to liquidated damages. He further contends that he cited Grossinger below, albeit not on this issue. We do not, however, feel constrained to examine the sufficiency of Buyer’s contention, since in any event any waiver on his part is only binding on the parties and not binding on this court. Ward v. Community Unit School District No. 220, 243 Ill. App. 3d 968, 974, 614 N.E.2d 102, 107 (1993) (‘the waiver rule is a limitation only on the parties, and this court has the power to decide any issue as long as the record contains facts sufficient for resolution of the issue’). This issue raises a clear question of law, and the factual record is sufficient to permit its resolution without further input from the trial court below. Furthermore, we find that resolution of this issue is necessary to maintain a uniform body of precedent on this point. American Federation of State, County & Municipal Employees, Council 31 v. County of Cook, 145 Ill. 2d 475, 480, 584 N.E.2d 116, 118-19 (1991) (‘the responsibility of a reviewing court for a just result and for the maintenance of a sound and uniform body of precedent may sometimes override the considerations of waiver that stem from the adversarial nature of our system’).” (Emphasis added.) Thorpe, 318 Ill. App. 3d at 310-11, 741 N.E.2d at 655-56. The applicability of the common-fund doctrine, as opposed to the determination of what amount should be awarded, is purely a question of law. Defendant therefore suffered no prejudice by no further development of the issue on this record. Establishing precedent on this issue will contribute to establishing a uniform body of precedent and to the trial court’s handling of the case on remand. As such, we should address the applicability of the common-fund doctrine as a matter of law. The general rule is that, absent statutory authority or a contractual agreement between the parties, each party is to bear its own attorney fees and costs. The common-fund doctrine does not mandate a shift of fees to an adversary, but it allows a party that creates a fund from which others benefit to seek reimbursement from those other parties. Morris B. Chapman & Associates, Ltd. v. Kitzman, 193 Ill. 2d 560, 572, 739 N.E.2d 1263, 1271 (2000). The rationale behind the common-fund doctrine is that if the costs of the litigation are not spread to the beneficiaries of the fund, they will be unjustly enriched. Scholtens v. Schneider, 173 Ill. 2d 375, 385, 671 N.E.2d 657, 663 (1996). Defendant responds that the common-fund doctrine does not apply because the setoff resulting from Phelps’s payment was not a benefit for purposes of the doctrine. Defendant contends that this is different from the typical application of the common-fund doctrine. The common-fund doctrine is often applied in subrogation cases where an insurer obtains a recovery for medical payments through the plaintiffs attorney’s efforts in creating a fund that paid for medical bills. In the case at hand, defendant argues that the insurer receives no recovery. Instead, the amount paid on behalf of Phelps merely dictates the amount of underinsured-motorist coverage under statute. See 215 ILCS 5/143a — 2(4) (West 1998). The application of the common-fund doctrine is not limited to insurance subrogation cases. Kitzman, 193 Ill. 2d at 572, 739 N.E.2d at 1272. The general requirements for applying the common-fund doctrine are (1) the fund for which fees are sought was created as a result of legal services performed by the plaintiffs attorneys, (2) the claimant of the fund (defendant) did not participate in its creation, and (3) the claimant will benefit from the fund. Taylor v. State Universities Retirement System, 203 Ill. App. 3d 513, 520, 560 N.E.2d 893, 897 (1990). In Young v. Mory, 294 Ill. App. 3d 839, 690 N.E.2d 1040 (1998), this court held that the common-fund doctrine applied when a party received a setoff. In Young, the plaintiff had reached a tentative settlement of workers’ compensation claims with his employer for $100,000, of which $20,000 was for attorney fees. The plaintiff also sought occupational disability benefits from the State Employees’ Retirement System of Illinois (SERS). Prior to finalizing the settlement, the plaintiff sought a declaratory judgment to enjoin SERS from offsetting his retirement benefits by the attorney fees portion of the pending settlement. Under the Illinois Pension Code, SERS was entitled to set off any workers’ compensation award. 40 ILCS 5/14 — 129 (West 1996). SERS had adopted a regulation which provided that the amount considered for the purpose of a setoff would not be reduced by any legal expenses granted in the workers’ compensation award. Under this regulation, even though a worker would be required to file a workers’ compensation claim prior to claiming a pension from SERS, SEES could offset the portion of the award that a plaintiff was required to pay his attorney. We found that SEES clearly benefitted from the services of the plaintiffs attorney in that SEES would be able to set off the full amount of the workers’ compensation award, including the amount paid for attorney fees. As such, the common-fund doctrine applied and SEES was responsible for the fees incurred by the plaintiff in seeking the workers’ compensation claim. Defendant here, as in Young, benefits from a fund by the process of setoff. Plaintiff here was required to seek coverage under Phelps’s liability insurance before making a claim for underinsured-motorist coverage. Similar to how the amount due by SEES was determined, according to statute the amount to be paid by defendant here is determined by the setoff to be claimed from the tortfeasor’s liability insurance. Like SEES, defendant is attempting to set off the payment received from Phelps regardless of the amount of litigation expenses incurred by plaintiff. SEES received a benefit through the setoff, and so does defendant in this case. The criteria for the application of the common-fund doctrine are met: (1) the payment by Phelps was made as a result of the services provided by plaintiff’s attorneys, (2) defendant did not participate in the creation of this fund, and (3) defendant benefits from the fund, by receiving a setoff. We should instruct the trial court that the common-fund doctrine is applicable and, upon remand, a factual inquiry should be made to determine the amount to be awarded under the doctrine. For the foregoing reasons, I concur in part and dissent in part with the opinion of the majority.