Under the Nursing Home Care Act (“NHCA”) a successful Plaintiff may be allowed to recover his or her attorney fees and costs. 210 ILCS 45/3-602. In a recent opinion, the First District Appellate Court in Grauer v. Clare Oaks awarded the plaintiffs’ attorney fees equal to the amount of the contingency fee that the plaintiffs had contractually agreed to pay their attorneys as well as the cost associated with prosecuting the matter. Grauer v. Clare Oaks, 2019 IL App (1st) 180835. Prior to Grauer v. Clare Oaks, a court would typically grant attorney fees under the Lodestar Method. Under this method, reasonable fees are calculated by multiplying the number of hours reasonably spent by the attorney on the litigation by a reasonable hourly rate.
In Grauer, the co-executors of the Estate of Dolores Trendel filed a lawsuit against several defendants, including Clare Oaks[1], alleging violations of the NHCA, common law negligence, and wrongful death. Id. at ¶ 1. Plaintiffs claims arose out of injuries that they allege Ms. Trendel sustained when she suffered a stroke two weeks after she stopped receiving Coumadin, a medication that reduces the risk of stroke in individuals with atrial fibrillation, while a resident at Clare Oaks, a nursing home. Id. Plaintiffs further allege Ms. Trendel died four years later to due to complications from the stroke. Id.
The jury returned a verdict in favor of the plaintiffs and against Clare Oaks and it assessed damages in the amount of $4,111,477.66. Id. at ¶ 46. Of that total, $250,000 was allocated for the damages suffered by Ms. Trendel’s next of kin under the Wrongful Death Act. Id. The trial court granted the plaintiffs’ motion to order Clare Oaks to pay their attorney fees and costs pursuant to section 3-602 of the NHCA. Id. at ¶ 3. The court awarded attorney fees to the plaintiffs in the amount of $1,370,492.55, which was one-third of the total verdict of $4,111,477.66. The court also awarded costs in the amount of $147,471.55, which represented court costs and general costs of litigation, including reimbursement for expert fees, court reporter fees, travel expenses, and mediation costs. Id. at ¶ 51. Clare Oaks appealed the award of attorney fees and costs.
On appeal, Clare Oaks argued that the trial court erred by awarding attorney fees in the amount of the one-third contingent fee because the plaintiffs failed to provide sufficient evidence that this amount constituted a reasonable fee. Id. at ¶ 124. Clare Oaks argued that the proper “starting point” was the “Lodestar” approach, in which reasonable fees are calculated by multiplying the number of hours reasonably spent by the attorney on the litigation by a reasonable hourly rate. Id. at ¶ 128. Under this approach, Clare Oaks contends, the plaintiffs must present the trial court with a properly supported fee petition that specifies what legal services were performed, by whom, the time expended, and the rate charged. Id. This would include detailed entries describing services rendered based on records maintained during the course of the litigation containing facts and computations upon which the charges are predicated. Id.
The Appellate Court affirmed awarding fees based on the contingency fee and found that the trial court appropriately determined this amount was “reasonable.” The appellate court reasoned that Section 3-602 of the NHCA provides that “[t]he licensee shall pay the actual damages and costs and attorney’s fees to a facility resident whose rights, as specified in Part 1 of Article II of this Act, are violated.” Id. at ¶ 124. Among the rights specified in part 1 of article II is a resident’s right to be free from neglect, which the jury found that Clare Oaks had violated with respect to Ms. Trendel. Id. The Appellate Court emphasized that the purpose of shifting the prevailing resident’s attorney fees to the licensee or nursing home was to encourage nursing home residents to seek legal redress against nursing homes for violations of their rights. Id. at ¶ 126.
The Appellate Court agreed with Clare Oaks that the Lodestar Method is the most useful starting point in most cases when evaluating the award of attorney fees. Id. at ¶ 128. However, the Appellate Court cautioned that Lodestar Method is not the only starting point. Id. The Court reasoned that a nothing prohibited a plaintiff, in seeking fees under a fee-shifting statute, from requesting fees in an amount equal to the contingent fee that the plaintiff had contractually agreed to pay his or her attorney for the attorney’s work on the case and establishing that such amount is reasonable. Id. at ¶ 130. Likewise, nothing prohibits a trial court from awarding statutory attorney fees in an amount equal to that contingent fee, as long as the plaintiff meets the burden of sufficiently establishing that the fees sought are reasonable. Id. Accordingly, the Appellate Court held that the Trial Court did not abuse its discretion in awarding attorney fees in an amount equal to the contingent fees that the plaintiffs had contractually agreed to pay their attorneys. Id. at ¶ 132. However, the Appellate Court found the Trial Court abused its discretion in awarding attorney fees for damages recovered under the Wrongful Death Act because attorney fees are not recoverable under the NHCA. Id. at ¶¶ 140, 141.
The Appellate Court further held that the Trial Court award of costs in the amount of $147,471.55, which included reimbursement for expert fees, court reporter fees, travel expenses, and mediation costs, was appropriate under the NHCA. Id. at ¶ 158. The Appellate Court considered the legislative intent behind the NHCA and found that when the General Assembly provided that a licensee shall pay a resident’s “costs,” it was using this term in the broader sense of what are commonly understood as “litigation costs.” Id. at ¶ 157. The Court reasoned that construing the legislative intent to include only the payment of a resident’s “court costs” would do far less to reduce a nursing home resident’s financial disincentives to engage in litigation to enforce their rights and to discourage nursing homes from violating the rights of residents. Id.
In light of the Grauer opinion, the Plaintiffs’ bar may begin routinely seeking Lodestar fees on small verdicts and contingency fees on large verdicts. Additionally, it appears the Plaintiff’s bar will also be able to seek reimbursement for general litigation costs, which also includes not only reimbursement for traditional court costs but also expert fees, court reporter fees, travel expenses, and mediation costs.
[1] The other defendants, including CRSA/LCS Employment Services, LLC, Percival Bigol, M.D., Percival A. Bigol, M.D., LTD., and Michelle Hart-Carlson either had directed verdicts entered in their favor or were found not guilty.