Hepler Broom, LLC

Shifting Attorney’s Fees Under Illinois’ Nursing Home Care Act: Another Form of Abuse

May 16, 2019

The Nursing Home Care Act (“Act”) was born of concerns about reports of inadequate or improper treatment of residents in such facilities and provided residents with a cause of action against those facilities. To encourage residents, residents’ families, and attorneys to bring claims against nursing homes, the Act originally provided that a resident whose rights were violated could recover “3 times the actual damages . . . and costs and attorney’s fees.” 210 ILCS 45/3-602. That rather draconian remedy was subsequently challenged as being unconstitutional but was ultimately upheld by the Illinois Supreme Court in Harris v. Manor Healthcare Corp., 111 Ill.2d 350 (1986). The supreme court concluded that it was reasonable for the legislature to impose treble damages and fees to encourage private enforcement, particularly where there may be “little in the way of actual monetary damages” otherwise. Id. at 369-70.

The treble damages provision was ultimately removed as a part of tort reform in 1995. However, the right of residents who bring claims under the Act to collect attorney’s fees survived and is still in place today. Indeed, even if the amount of damages recovered is small, the plaintiff may still be entitled to a substantial fee award. Berlak v. Villa Scalabrini Home for the Aged, Inc., 284 Ill.App.3d 231 (1st Dist. 1996) (Plaintiff requested more than $120,000 in fees and costs after a verdict of $11,218.44 and was awarded $85,000 in fees and costs by the court). In Berlak, the court found that “even if the monetary recovery [was] minimal,” attorney’s fees should be awarded. Id. at 237. Of great concern to nursing home operators, there was no need for the attorney’s fees to have a reasonable relationship to the damages award. According to the court in Berlak, such a requirement “would discourage private enforcement of the Act and thus defeat [its] purpose.” Id. at 237-238.

While the legislature may have had a rational purpose for maintaining the fee shifting provision, it has caused some unintended consequences in the legal market. Specifically, such a provision has created a disincentive to resolve cases at an early stage and thus may unnecessarily prolong or multiply litigation. This is particularly true in lower value cases or in cases where the nursing home is unlikely to prevail. In those cases, there may be little incentive for the plaintiff to resolve the matter because there is no real risk that the attorney will not be paid for all of their time, even if such continued legal work is not likely to yield any additional relief for their client.

The question is what can be done to reduce any improper incentive to prolong litigation under the Act. One idea may be to revise the Act to include a provision similar to Federal Rule of Civil Procedure 68, which allows a defendant to make an offer of judgment to stop the plaintiff’s counsel from attempting to later collect fees and costs incurred after the refusal of such an offer of judgment. See, e.g., Marek v. Chesny, 105 S.Ct. 3012 (1985) (prevailing plaintiffs in a civil rights action who received a verdict less than the defendant’s offer of judgment were not entitled to recover their fees and costs incurred after the offer of judgment). The benefit of such a provision would be to properly incentivize the parties to seriously attempt to resolve cases early, if possible.

Even under the current form of the Act, the fees and costs sought by a prevailing plaintiff under the Act must be reasonable. It may therefore be prudent for a nursing home to make a reasonable settlement offer at the earliest appropriate time in a case, even in the absence of a provision similar to Rule 68. If the subsequent verdict is ultimately close to, or less than, such offer, a good argument may exist that it was unreasonable for the plaintiff to continue litigating the case after the offer was made. See, e.g., Haworth v. State of Nev., 56 F.3d 1048 (9th Cir. 1995) (even when fees can be recovered after a Rule 68 offer, the court must take into consideration whether it was reasonable to continue litigating the case). Absent such a settlement offer, a nursing home can still assail the requested fees as being unreasonable because of their excessive amount or because of the limited success achieved by the plaintiff’s attorney, but that is a very uncertain position and is left solely to the discretion of the court. See Berlak, 284 Ill.App.3d at 239 (trial court denied the plaintiff more than $35,000 in fees and costs, possibly because of her limited success).

While it is unlikely that the legislature will incorporate a provision like Rule 68 into the Act, there is no harm for a nursing home to attempt to position a case to build the argument that the plaintiff’s attorney unreasonably prolonged the case. Thus, care should be given in deciding whether and when to make an appropriate settlement offer. That may be the best defense in cases where there appears to be a potential abuse of the remedies available under the Nursing Home Care Act.