Ardt v. State of Illinois

FOURTH DIVISION
October 30, 1997


No. 1-96-2064

EDWARD W. ARDT, ) APPEAL FROM THE
) CIRCUIT COURT OF
Plaintiff-Appellee, ) COOK COUNTY
)
v. )
)
THE STATE OF ILLINOIS and )
THE DEPARTMENT OF PROFESSIONAL REGULATION, ) HONORABLE
) ELLIS REID
Defendants-Appellants. ) JUDGE PRESIDING.

JUSTICE McNAMARA delivered the opinion of the court:
Defendants, the State of Illinois and the Department of
Professional Regulation (hereinafter together referred to as "the
Department"), appeal from an order of the circuit court of Cook
County awarding attorney fees in the amount of $58,881 to
plaintiff, Edward Ardt, under section 10-55(c) of the Illinois
Administrative Procedure Act (5 ILCS 100/10-55(c) (West 1992)).
The Department argues that the trial court erred in awarding
plaintiff all of the attorney fees he requested because the
Administrative Procedure Act allows fees to be awarded only in
limited circumstances. Specifically, the Department argues that
a portion of the attorney fees plaintiff was awarded did not
relate to the invalidation of any administrative rules. The
Department also argues that the fee award was not reasonable as
required under section 10-55(c).
Section 10-55(c) provides:
"(c) In any case in which a party has
any administrative rule invalidated by a
court for any reason, including but not
limited to the agency's exceeding its
statutory authority or the agency's failure
to follow statutory procedures in the
adoption of the rule, the court shall award
the party bringing the action the reasonable
expenses of the litigation, including
reasonable attorney's fees." 5 ILCS 100/10-
55(c) (West 1992).
Plaintiff filed his petition seeking attorney fees under
section 10-55(c) following the Illinois Supreme Court's issuance
of Ardt v. Department of Professional Regulation, 154 Ill. 2d 138, 607 N.E.2d 1226 (1992), aff'g 218 Ill. App. 3d 61, 578 N.E.2d 128 (1991). The facts and issues involved in the
administrative action brought by the Department against plaintiff
are stated in detail in these prior decisions. They will be
restated here only to the extent necessary to resolve the
Department's contentions concerning the trial court's award of
fees to plaintiff.
In 1989, the Department filed a complaint against plaintiff,
a practicing dentist, alleging that he had violated provisions of
the Illinois Dental Practice Act (Ill. Rev. Stat. 1987, ch. 111,
par. 2301 et seq.)(now 225 ILCS 25/1 et seq. (West 1992)).
Following an administrative hearing, plaintiff was found to have
violated sections 23 and 45 of the Dental Practice Act and
certain administrative regulations promulgated thereunder by
using the terms "family dentistry," "total comfort," and
"quality" in his advertising. The Department fined plaintiff
$500 and placed him on probation for two years. During that
time, plaintiff was to submit copies of all of his advertisements
to the Department and to publicly display his license, which was
stamped to indicate that he was on probation.
Plaintiff sought administrative review of the Department's
decision. Among other things, plaintiff challenged the validity
of the advertising provisions under which he was charged,
claiming that the provisions violated his first amendment right
to free speech. Plaintiff also filed a petition for a stay of
the Department's sanctions pending review. The circuit court
granted the stay, despite the Department's argument that, under
section 32 of the Dental Practice Act (Ill. Rev. Stat. 1987, ch.
111, par. 2332), "all sanctions *** shall remain in full force
and effect" during the pendency of judicial review. The circuit
court did not find section 32 unconstitutional, but held that it
should apply only where a dentist's professional competence is in
question. The court found that, in plaintiff's circumstances,
there was no potential harm to the public, and plaintiff's
practice would suffer if he were forced to display his
probationary license during the period of judicial review.
The Department filed an interlocutory appeal seeking
reversal of the stay order. That appeal was later consolidated
with plaintiff's appeal from the trial court's decision affirming
the Department's determination on the merits. In Ardt v.
Department of Professional Regulation, 218 Ill. App. 3d 61, 578 N.E.2d 128 (1991), this court found that the circuit court had
the authority to grant the stay order. Specifically, we held
that because it improperly restricted the equitable power of the
court to issue a stay where appropriate, section 32 improperly
infringed on the power of the judiciary and was unconstitutional.
Ardt, 218 Ill. App. 3d at 65, 578 N.E.2d at 132. This court also
held that section 421 of the Department's regulations (68 Ill.
Adm. Code 1220.421 (1988 Supp.)) was an unconstitutional
abridgement of plaintiff's freedom of speech to the extent that
it categorically barred use of the term "family dentistry," and
that a later version of section 421 could not be applied
retroactively to plaintiff. Ardt, 218 Ill. App. 3d at 67-68, 578 N.E.2d at 132. It was also determined that the Department's
outright prohibition of the terms "quality dentistry" and "total
comfort" in advertising was not unconstitutional. Ardt, 218 Ill.
App. 3d at 68, 578 N.E.2d at 132. Finally, this court rejected
plaintiff's arguments that he was denied procedural due process
and equal protection of the law. Ardt, 218 Ill. App. 3d at 69-
70, 578 N.E.2d at 132-33.
The Illinois Supreme Court affirmed the decision of this
court. Ardt v. Department of Professional Regulation, 154 Ill. 2d 138, 607 N.E.2d 1226 (1992). Like this court, the supreme
court concluded that section 32 of the Dental Practice Act was
unconstitutional in that it improperly restricted the inherent
power of the court to issue a stay where appropriate. Ardt, 154 Ill. 2d at 151, 607 N.E.2d at 1232. Moreover, though it noted
that "[t]he Department does not contest the appellate court's
conclusion," the court expressed its agreement that section 421's
total ban on the term "family dentistry" was unconstitutional and
that a 1989 version of that regulation could not be given
retroactive effect. Ardt, 154 Ill. 2d at 152-53, 607 N.E.2d at
1233. Finally, the court affirmed the determination that the
Department's ban of the terms "quality dentistry" and "total
comfort" in advertising was not an unconstitutional violation of
plaintiff's right to free commercial speech. Ardt, 154 Ill. 2d
at 155, 607 N.E.2d at 1233-35.
Following the issuance of the supreme court's opinion,
plaintiff filed in the Illinois Court of Claims a petition
seeking attorney fees under section 10-55(c) of the
Administrative Procedure Act (5 ILCS 100/10-55(c) (West 1992)).
The Court of Claims dismissed the petition for lack of
jurisdiction. Plaintiff refiled his petition in the circuit
court of Cook County. Plaintiff alleged that under section 10-
55(c), he was entitled to his litigation expenses and attorney
fees for his defense and prosecution of appeals to the circuit
court, appellate court, and the supreme court. Plaintiff
attached as an exhibit to his petition an itemized billing
statement. On May 20, 1996, the trial court awarded plaintiff
$58,881, the full amount of fees requested in his petition. The
Department appeals.
The Department contends that plaintiff was not entitled to
all of the attorney fees he incurred, but only those "which
related to the invalidation of an administrative rule, and which
were not unreasonable." The Department contends that the only
administrative rule invalidated during the extensive litigation
between the Department and plaintiff was section 421 of title 68
of the Illinois Administrative Code (68 Ill. Adm. Code 1220.421
(1988 Supp.)), and that plaintiff is entitled to only those fees
expended on that issue in the appellate court where section 421
was found unconstitutional. According to the Department,
plaintiff is not entitled to any fees incurred in the circuit
court, where the Department's sanctions were upheld. Nor is
plaintiff entitled to any fees incurred at the supreme court
level, the Department contends, because the Department did not
challenge before the supreme court the appellate court's findings
concerning section 421. The Department also argues that
plaintiff is not entitled to any fees relating to the Illinois
Supreme Court's determination that section 32 of the Dental
Practice Act was unconstitutional. According to the Department,
section 10-55(c) does not allow for fees incurred in successfully
invalidating a statutory enactment. The Department also asserts
that where plaintiff was unsuccessful in challenging the
Department's ban on the terms "quality dentistry" and "total
comfort" and failed to convince any court that he was deprived of
due process and equal protection, he should not receive an award
for all of the attorney fees he incurred. Finally, the
Department challenges the amount of fees awarded to plaintiff as
unreasonable, in that his attorney billed plaintiff for 20 to 24
hours a day on certain dates.
A party may not recover attorney fees or costs unless
provided for by statute or agreement of the parties. Gonzales-
Blanco v. Clayton, 120 Ill. App. 3d 848, 458 N.E.2d 1156 (1983).
Statutes that provide for an award of attorney fees and costs are
in derogation of common law and must be strictly construed.
Berrios v. Rybacki, 236 Ill. App. 3d 140, 603 N.E.2d 659 (1992);
Navarro v. Edgar, 145 Ill. App. 3d 413, 495 N.E.2d 1085 (1986);
Gonzales-Blanco, 120 Ill. App. 3d at 850, 458 N.E.2d at 1158.
Section 10-55(c), set forth above, provides for the recovery
of attorney fees in any case in which a party has an
administrative rule invalidated by a court. 5 ILCS 100/10-55(c)
(West 1992). A rule is defined as a principle, procedure, or
regulation governing conduct or action. Ackerman v. Department
of Public Aid, 128 Ill. App. 3d 982, 471 N.E.2d 931 (1984)(citing
The Random House Dictionary, Unabridged Edition (1966)). One of
the purposes behind section 10-55(c) is to provide incentive to
those subject to regulation to oppose doubtful rules where
compliance would otherwise be less costly than litigation. City
of Chicago v. Illinois Commerce Comm'n, 187 Ill. App. 3d 468, 543 N.E.2d 336 (1989); Kaufman Grain Co. v. Department of
Agriculture, 179 Ill. App. 3d 1040, 534 N.E.2d 1259 (1988); Board
of Education of School District No. 170 v. Illinois State Board
of Education, 122 Ill. App. 3d 471, 461 N.E.2d 567 (1984).
Initially, we reject the Department's argument that
plaintiff is not entitled any fees incurred in the circuit court,
where thereafter, plaintiff successfully argued to this court
that section 421's ban on the term "family dentistry" was
unconstitutional. Moreover, we disagree with the Department that
plaintiff is not entitled to any fees for work performed by his
attorney in the Department's appeal and plaintiff's cross-appeal
to the Illinois Supreme Court. Instead, we conclude that the
Illinois Supreme Court ultimately invalidated the Department's
ban on the term "family dentistry." The supreme court stated:
"The appellate court held that the
previous administrative regulation, which was
in effect when Ardt publicized his allegedly
improper advertising, was an unconstitutional
abridgement of Ardt's freedom of speech to
the extent that it categorically barred use
of the term 'family dentistry.' The court
found that the term was only potentially
misleading, as it could apply simply to the
dentist's client base rather than to a dental
specialty. We agree with the appellate court
that such a total ban of the term is
unconstitutional. [Citation.] We agree also
that the 1989 regulation should not be given
retroactive effect." Ardt, 154 Ill. 2d at
152, 607 N.E.2d at 1232.
As the Department points out, the supreme court acknowledged in
its next statement that "[t]he Department does not contest the
appellate court's conclusion." Ardt, 154 Ill. 2d at 152-53, 607 N.E.2d at 1232. Nevertheless, where plaintiff's argument
concerning section 421 was expressly adopted by the Illinois
Supreme Court, we conclude that plaintiff successfully
invalidated an administrative rule in that court.
Moreover, it is certainly arguable that the supreme court
invalidated another administrative rule in finding that section
32 of the Dental Practice Act infringed on the inherent power of
the court to issue a stay where appropriate. Clearly, the
Department's usual practice and procedure was to keep sanctions
"in full force and effect" during the period of judicial review.
Indeed, in plaintiff's case, he was to display his probationary
license during a two-year period. In requesting and successfully
securing a stay despite the Department's usual practice of
keeping sanctions in effect, plaintiff initiated the process that
ultimately resulted in the supreme court's determination that
section 32 was unconstitutional. Ackerman v. Department of
Public Aid, 128 Ill. App. 3d 982, 471 N.E.2d 931 (1984) provides
support for the assertion that this amounted to the invalidation
of an administrative rule. In Ackerman, the plaintiff sought
attorney fees after he successfully challenged the use of
telephone conference calls to conduct administrative hearings.
The Department of Public Aid argued that plaintiff was not
entitled to fees because the practice of conducting
administrative hearings by telephone conference call was never
formally adopted as a rule. This court rejected the Department's
argument, holding: "Though never formally adopted as a rule and
included in the Department's manual, the procedure nevertheless
had the effect, force and impact of a rule." Ackerman, 128 Ill.
App. 3d at 984, 471 N.E.2d at 933. Where the trial court
determined that such telephones hearings were invalid, the trial
court correctly awarded attorney fees to the plaintiff.
Ackerman, 128 Ill. App. 3d at 984, 471 N.E.2d at 933. Similarly,
in the present case, it is certainly arguable that the supreme
court invalidated an administrative rule in finding that the
usual requirement of keeping sanctions in full force and effect
infringed on the court's inherent authority to enter a stay when
appropriate.
We find it unnecessary to make this determination, however,
because we have already concluded that the supreme court
invalidated at least one administrative rule, and we further
conclude that plaintiff is entitled to reasonable fees incurred
in the entire action culminating in the supreme court's decision.
We reach this conclusion upon reviewing case law involving other
statutory fee provisions.
In federal cases, where a party seeks fees under the Civil
Rights Attorney Fees Award Act of 1976 (42 U.S.C. 1988 (1994)),
the amount of reasonable fees must be determined on the facts of
each case and is within the district court's discretion. Hensley
v. Eckerhart, 461 U.S. 424, 76 L. Ed. 2d 40, 103 S. Ct. 1933
(1983). Where a plaintiff has brought several claims, some
completely unrelated to the civil rights claim, the hours spent
on unsuccessful claims may be excluded. Yet, where multiple
claims for relief arise from a common core of facts or related
legal theories, much of counsel's time will be devoted generally
to the litigation as a whole, making it difficult to divide the
hours expended on a claim-by-claim basis. In these
circumstances, a fee award should not be reduced simply because
the plaintiff failed to prevail on every contention raised in the
lawsuit. Hensley, 461 U.S. at 434-35, 76 L. Ed. 2d. at 54-55,
103 S. Ct. at 1939-40.
Illinois courts have adopted a similar analysis in cases
involving the statutory attorney fee provisions of the Nursing
Home Care Reform Act (210 ILCS 45/3-602 (West 1994)), the
Mortgage Act (765 ILCS 905/4 (West 1994)), and the Consumer Fraud
and Deceptive Business Practices Act (Consumer Fraud Act) (815
ILCS 505/10a(c) (West 1992)). In Berlak v. Villa Scalabrini Home
for the Aged, Inc., 284 Ill. App. 3d 231, 671 N.E.2d 768 (1996),
this court held that the plaintiff's award of attorney fees under
the Nursing Home Care Act (210 ILCS 45/3-602 (West 1994)) should
not have been reduced solely because she prevailed at trial on
only one count of her complaint, where all four counts of the
plaintiff's complaint involved a common core of facts and similar
theories of liability. Since the claims were related, no
reduction of attorney fees was required due to her failure to
recover on the remaining three counts. Berlak, 284 Ill. App. 3d
at 243, 671 N.E.2d at 773. A similar determination was made in
American Garden Homes, Inc. v. Gelbart Fur Dressing, 238 Ill.
App. 3d 64, 606 N.E.2d 106 (1992), where fees were sought under
the Mortgages on Real and Personal Property Act (Ill. Rev. Stat.,
1973, ch. 95, par. 54 (now The Mortgage Act, 765 ILCS 905/4 (West
1992))).
Cases involving statutory fees under the Consumer Fraud Act
(815 ILCS 505/10a(c) (West 1992)) have reached contrasting
results. While some plaintiffs were found entitled only to those
fees incurred on their consumer fraud claims (Roche v. Fireside
Chrysler-Plymouth, Mazda, Inc., 235 Ill. App. 3d 70, 600 N.E.2d 1218 (1992); Rubin v. Marshall Field & Co., 232 Ill. App. 3d 522,
597 N.E.2d 688 (1992)), other plaintiffs were awarded fees
incurred on all claims brought, even if they were unsuccessful
(Ciampi v. Ogden Chrysler Plymouth, Inc., 262 Ill. App. 3d 94,
634 N.E.2d 448 (1994)).
Turning back to the present case, section 10-55 applies only
in cases where the action was initiated by an administrative
agency. Paragraph (a) of section 10-55 allows for an award of
litigation expenses, including fees, where the agency made an
"allegation *** without reasonable cause and found to be untrue."
5 ILCS 100/10-55(a) (West 1994). That paragraph specifies that
the award is for those expenses and fees "actually incurred in
defending against that allegation." 5 ILCS 100/10-55(a) (West
1994). Paragraph (c) states that "[i]n any case in which a party
has any administrative rule invalidated by a court for any reason
*** the court shall award the party bringing the action the
reasonable expenses of the litigation, including reasonable
attorney's fees." 5 ILCS 100/10-55(c) (West 1994). The statute
contains no limiting language as to what constitutes "reasonable
expenses of the litigation" under paragraph (c).
Upon review of the legislative debates concerning section
10-55, it becomes clear that the comments of Representative
Leinenweber, which the Department relies heavily upon, referred
to paragraph (a), not paragraph (c). Rep. Leinenweber stated,
"Now, if he's there for 15 different counts, and a 16th count is
unreasonable and untrue and he has to defend, expend money and he
can show how much he spent on that sixteenth cause, then he would
be entitled to that small portion of his attorney fees, but he's
not entitled to all of his fees based upon the very clear
language of Senate Bill 355." 82d Ill. Gen. Assem., House
proceedings, October 28, 1981 at 79 (Statements of Rep.
Leinenweber). These comments describe a hypothetical situation
falling directly under the language of paragraph (a) in that the
actual fees incurred in defending the untrue allegation, which
would be readily distinguishable and calculable, would be
awarded.
The circumstances in the present case are quite different,
we believe. First, as stated earlier, paragraph (c) applies
here, not paragraph (a). The legislative debates the Department
cites make abundantly clear that the purpose behind paragraph (c)
is to provide incentive to challenge doubtful administrative
rules where compliance would otherwise be less costly. Here,
this is exactly what plaintiff did, and his case went all the way
to the Illinois Supreme Court. All of the issues litigated
throughout the action arose from a common core of facts, those
being the advertising violations plaintiff was charged with by
the Department. In his challenges to the Department's power to
sanction him under the relevant Dental Practice Act sections and
regulations promulgated thereunder, plaintiff posed similar and
related legal theories. Though only partially successful,
plaintiff's challenges ultimately led to at least one
administrative rule being invalidated by the Illinois Supreme
Court. The issues involved in this lengthy litigation were
complex and so inextricably intertwined, we believe, that the
time plaintiff's attorney spent on each issue cannot and should
not be distinguished for the purpose of determining the
reasonable amount of fees due to plaintiff under section 10-
55(c). Where nothing in paragraph (c) expressly requires such an
approach, we decline to hold that plaintiff's fee award under
these circumstances should be reduced through the piecemeal,
claim-chopping approach that the Department advocates. Instead,
we agree with the trial court that plaintiff is entitled to all
reasonable fees incurred throughout the action culminating in the
supreme court's decision.
We do agree with the Department's argument, however, that a
remand is necessary for a more thorough reasonableness analysis
of plaintiff's fee petition. It is well settled that the
determination of whether fees are reasonable is within the trial
court's discretion. Shortino v. Illinois Bell Telephone Co., 279
Ill. App. 3d 769, 665 N.E.2d 414 (1996). It follows therefore
that a reviewing court must not conduct a de novo of the fee
petition to allow a second opportunity to question
reasonableness. Shortino, 279 Ill. App. 3d at 772, 665 N.E.2d at
416. Yet, as the Department argues, the trial court here acted
as if it had no discretion once it made the determination that
plaintiff was entitled to fees incurred up to and including the
appeal to the supreme court. At that point, the court merely
approved the fee petition as presented. The Department points to
at least four specific entries where plaintiff's counsel billed
for over 20 hours per day. Indeed, on June 21, 1992, and June
22, 1992, plaintiff's counsel billed for 24 hours each day. We
agree with the Department that the trial court should have
conducted at least some inquiry into the reasonableness of these
hours as well as the remainder of the fee petition. We therefore
find it necessary to reverse the court's award of fees and remand
for a more thorough inquiry, and if necessary, evidentiary
hearing, into the reasonableness of plaintiff's fee petition.
Accordingly, for the reasons set forth above, we affirm the
trial court's determination that plaintiff is entitled to fees
incurred throughout the administrative action. We reverse the
trial court's award of fees in the amount of $58,881, however,
and remand with instructions that the trial court conduct a more
thorough reasonableness analysis of plaintiff's fee petition.
Affirmed in part; reversed in part; remanded with
directions.
CERDA and BURKE, JJ., concur.