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                                       Appellate Court                            Date: 2017.01.18
                                                                                  11:07:09 -06'00'




                  Grady v. Illinois Department of Healthcare & Family Services,
                                     2016 IL App (1st) 152402



Appellate Court           LAURETTA GRADY, Plaintiff-Appellant, v. THE ILLINOIS
Caption                   DEPARTMENT OF HEALTHCARE AND FAMILY SERVICES
                          and JULIE HAMOS, Director, Defendants-Appellees.



District & No.            First District, Third Division
                          Docket No. 1-15-2402


Filed                     November 2, 2016



Decision Under            Appeal from the Circuit Court of Cook County, No. 14-CH-20233; the
Review                    Hon. Mary L. Mikva, Judge, presiding.



Judgment                  Reversed and remanded with directions.



Counsel on                Legal Assistance Foundation, of Chicago (Miriam Hallbauer, of
Appeal                    counsel), for appellant.

                          Lisa Madigan, Attorney General, of Chicago (Carolyn E. Shapiro,
                          Solicitor General, and Paul Racette, Assistant Attorney General, of
                          counsel), for appellees.



Panel                     JUSTICE COBBS delivered the judgment of the court, with opinion.
                          Presiding Justice Fitzgerald Smith and Justice Lavin concurred in the
                          judgment and opinion.
                                             OPINION

¶1       Plaintiff Lauretta Grady appeals from the dismissal with prejudice of her complaint
     seeking judicial review of an administrative decision nominally rendered by the Illinois
     Department of Human Services (DHS) regarding her eligibility for a Medicaid program. In her
     complaint, plaintiff named the Illinois Department of Healthcare and Family Services (DHFS)
     and its director, Julie Hamos, as defendants but not DHS or that agency’s head. On appeal,
     plaintiff contends that the trial court erred in dismissing her complaint for failure to name
     required parties, arguing that DHFS has the statutory authority to determine questions of
     Medicaid eligibility and consequently was the proper defendant. Alternatively, she contends
     that if she failed to name the proper parties she was entitled to amend her complaint to correct
     the error, pursuant to subsection 3-107(a) of the Administrative Review Law (735 ILCS
     5/3-107(a) (West 2014)). For the reasons that follow, we find plaintiff failed to name the
     proper defendant in her complaint but was entitled to amend her complaint. We reverse and
     remand.

¶2                                          BACKGROUND
¶3        Plaintiff participates in the Home Services Plan, a program intended to prevent
     unnecessary institutionalization of individuals, pursuant to the Traumatic Brain Injury
     Medicaid Waiver Program. As part of the plan, participants take part in regular reassessments
     to determine their continued eligibility and needs. Following a reassessment in June 2014,
     plaintiff was assigned a plan that granted her 155 hours of medical services per month.
¶4        Subsequently, plaintiff filed an administrative appeal of the plan, seeking additional hours
     for an assistant to aid with certain therapies prescribed by her doctor. An administrative
     hearing was held before an officer of DHS, and the officer recommended a new service plan
     with marginally increased hours. The caption atop the officer’s written decision stated
     “STATE OF ILLINOIS DEPARTMENT OF HUMAN SERVICES,” and the decision’s first
     paragraph indicated that the officer was a hearing officer for “the Department of Human
     Services *** Bureau of Hearings.” The officer later noted that “the Department of Human
     Services has jurisdiction” over the administrative appeal. The decision’s final page was signed
     by Michelle R.B. Saddler, the secretary of DHS at the time, and indicated that Saddler was
     adopting the findings and recommendations of the hearing officer. The decision was sent to
     plaintiff with a cover letter, signed by Saddler and indicating that the “Illinois Department of
     Human Services reviewed” her appeal.
¶5        Alleging that the increased hours were still insufficient, plaintiff appealed the
     administrative decision in a complaint filed in the Cook County circuit court on December 18,
     2014. The complaint did not name DHS or Saddler as defendants; instead, it named DHFS and
     its then-director, Hamos. Defendants moved to dismiss the complaint without leave to amend,
     arguing that DHS was a necessary party because it had issued the decision to be reviewed.
     Plaintiff responded that DHFS was the agency responsible under the law for rendering the
     decision to be reviewed and thus was the correct party. She also argued alternatively that the
     court was required to grant her 35 days to serve the correct defendant and that any mistake
     should be excused as a “good faith” error.
¶6        Before the trial court made its ruling on the motion to dismiss, the Appellate Court, Fourth
     District, rendered its decision in Mannheim School District No. 83 v. Teachers’ Retirement

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       System, 2015 IL App (4th) 140531, holding that subsection 3-107(a) of the Administrative
       Review Law does not require leave to amend a complaint “to include the agency that rendered
       the final decision as a defendant when an individual member of that agency was not named.”
       Id. ¶ 28. Defendants were granted leave to cite Mannheim as additional authority, and plaintiff
       responded that the case was wrongly decided. In a written order, the trial court granted the
       State’s motion to dismiss, stating that plaintiff’s failure to name DHS was fatal to her claim.
       The court also denied plaintiff leave to amend, explaining that although it agreed that
       Mannheim was wrongly decided, it was bound by the Fourth District’s holding.

¶7                                              ANALYSIS
¶8         Plaintiff first contends that defendants were properly named in her suit because the
       Administrative Review Law (735 ILCS 5/3-101 et seq. (West 2014)) requires the agency
       “having power under the law to make administrative decisions” to be named as defendant.
       Citing Gillmore v. Illinois Department of Human Services, 218 Ill. 2d 302 (2006), she argues
       that “power under the law” refers solely to power under the relevant statute and that DHFS has
       the statutory authority to determine Medicaid eligibility. Defendants respond that the
       Administrative Review Law requires that the agency that actually issued a ruling be named as
       defendant. They argue that it is clear from the record that DHS issued the determination in
       question and thus DHS should have been named as defendant.
¶9         Where the circuit court has granted a motion to dismiss filed pursuant to section 2-619 of
       the Code of Civil Procedure (735 ILCS 5/2-619 (West 2014)), as occurred in this case, our
       review is de novo. Rodriguez v. Sheriff’s Merit Comm’n, 218 Ill. 2d 342, 349 (2006). Plaintiff
       raises matters of statutory interpretation, which are similarly reviewed de novo. Skaperdas v.
       Country Casualty Insurance Co., 2015 IL 117021, ¶ 15.
¶ 10       When construing a statute, our primary objective is to ascertain and give effect to the
       legislature’s intent through giving the statutory language its plain and ordinary meaning.
       People v. Lloyd, 2013 IL 113510, ¶ 25. If the language is clear and unambiguous, a court may
       not deviate from that language by inferring exceptions or conditions that the General Assembly
       did not set forth. Wilkins v. Williams, 2013 IL 114310, ¶ 22. However, statutory interpretation
       “cannot always be reduced to ‘the mechanical application of the dictionary definitions of the
       individual words and phrases involved.’ ” People v. Wood, 379 Ill. App. 3d 705, 708-09 (2008)
       (quoting Whelan v. County Officers’ Electoral Board, 256 Ill. App. 3d 555, 558 (1994)). A
       court should not read language in an excessively literal fashion such that it produces an absurd
       construction. See id. at 709.
¶ 11       The Administrative Review Law governs all proceedings in which a party seeks judicial
       review of an administrative eligibility decision under article V of the Illinois Public Aid Code
       (305 ILCS 5/5-1 (West 2014)). Gillmore, 218 Ill. 2d at 314; see also 305 ILCS 5/11-8.7 (West
       2014). Subsection 3-107(a) of the Administrative Review Law requires that “in any action to
       review any final decision of an administrative agency, the administrative agency and all
       persons, other than the plaintiff, who were parties of record to the proceedings before the
       administrative agency shall be made defendants.” 735 ILCS 5/3-107(a) (West 2014).
¶ 12       Section 3-101 of the Administrative Review Law sets forth the applicable definitions. 735
       ILCS 5/3-101 (West 2014). “Administrative agency” is defined as “a person, body of persons,
       group, officer, board, bureau, commission or department (other than a court or judge) of the
       State, or of any political subdivision of the State or municipal corporation in the State, having

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       power under law to make administrative decisions.” Id. The Administrative Review Law
       defines an “administrative decision” as “any decision, order or determination of any
       administrative agency rendered in a particular case, which affects the legal rights, duties or
       privileges of parties and which terminates the proceedings before the administrative agency.”
       Id.
¶ 13       The Administrative Review Law clearly requires that when an individual seeks review of
       an administrative agency decision, that agency must be named as a defendant. The only natural
       reading of subsection 3-107(a) indicates that the phrase “the administrative agency” that is the
       subject of the subsection’s requirement refers to the same entity as the phrase “an
       administrative agency,” which occurs in the prepositional phrase immediately preceding it.
       See 305 ILCS 5/11-8.7 (West 2014). We must therefore conclude that “the administrative
       agency” required by statute to be named a defendant is the agency that issued the challenged
       decision. We note that a contrary conclusion could lead to the highly impractical result of an
       agency being required to defend a decision which it took no part in making.
¶ 14       It is clear from the record that the decision plaintiff seeks to review was issued by DHS and
       not DHFS. The proceedings were held before a DHS hearing officer, and the decision itself
       clearly designated DHS as the issuing body. The decision was sent to plaintiff along with a
       letter indicating that her case had been reviewed by DHS. There is nothing in the record that
       suggests that DHFS took any part in the challenged decision. Accordingly, DHS was required
       to be named as defendant.
¶ 15       Plaintiff argues that the Administrative Review Law defines an administrative agency as
       an entity “having power under the law to make administrative decisions” and therefore the
       administrative agency referred to in subsection 3-107(a) must be an agency having power
       under the law to make the challenged administrative decisions. She then discusses at length the
       legislative history of DHFS in arguing that the agency has the power under the law to issue
       Medicaid eligibility decisions. In so arguing, plaintiff relies on our supreme court’s opinion in
       Gillmore.
¶ 16       In Gillmore, the plaintiff sought review of a DHS decision finding her eligible for
       Medicaid benefits but imposing a penalty based upon a rule promulgated by the Illinois
       Department of Public Aid (DPA), the state Medicaid agency at the time. Gillmore, 218 Ill. 2d
       at 304-06. The decision was signed by the DHS secretary and the DPA director and included a
       cover letter stating that it was the decision of DHS and DPA. Id. at 310. Before addressing the
       merits of plaintiff’s appeal, the supreme court briefly addressed DHS’s contention that the case
       must be dismissed because plaintiff had not served a copy of the complaint on DPA. Id. at
       313-15. The supreme court reviewed the Illinois Public Aid Code (305 ILCS 5/12-1 et seq.
       (West 2002)) applicable at the time and held that DHS had the power under the law to
       determine eligibility issues. Gillmore, 218 Ill. 2d at 313-15. The court explained that where
       two agencies share the power to render an administrative decision, both must be made
       defendants in a suit for judicial review. Id. at 314. However, noting that only DHS “had the
       power to decide” plaintiff’s Medicaid eligibility, the court ruled that DPA had only endorsed
       DHS’s decision pursuant to federal regulations and was therefore not a required party. Id. at
       314-15.
¶ 17       We find Gillmore distinguishable from the current case. In that case, the plaintiff had
       named only one of two agencies indicated on an administrative decision, and thus our supreme
       court considered which of the two agencies was responsible for the decision that both had

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       clearly approved. In this case, there is no question of which agency rendered the challenged
       decision, and therefore the analysis used by the supreme court in Gillmore is inapposite.
       Accordingly we need not consider which agency ultimately had the statutory power to address
       plaintiff’s eligibility.1
¶ 18        Plaintiff also argues that her case should not have been dismissed because DHS was acting
       as an agent of DHFS based upon an interagency delegation of power. See 735 ILCS 5/3-107(a)
       (West 2014) (“No action for administrative review shall be dismissed for lack of jurisdiction
       based upon the failure to name an *** agent ***, where the administrative agency *** has
       been named as a defendant ***.”). However, this agency argument was not raised before the
       trial court and is therefore forfeited. See Mabry v. Boler, 2012 IL App (1st) 111464, ¶ 15
       (“Generally, arguments not raised before the circuit court are forfeited and cannot be raised for
       the first time on appeal.”).
¶ 19        Plaintiff contends alternatively that the trial court erred in denying her request for leave to
       amend her complaint and add DHS as a defendant, arguing that the language of subsection
       3-107(a) of the Administrative Review Law clearly mandates that plaintiff be allowed to
       amend her complaint to add unnamed parties. Acknowledging that this argument is contrary to
       the Fourth District’s recent opinion in Mannheim, plaintiff argues that this court should reject
       the opinion as wrongly decided. The State responds that Mannheim was correctly decided and
       that the complaint could only be amended to add an agency defendant if the head of that
       agency was originally named as a defendant.
¶ 20        Subsection 3-107(a) is comprised of three paragraphs. The first, previously discussed, sets
       forth the parties that must be made defendants in an action for judicial review of an
       administrative decision, as well as the method of service required. 735 ILCS 5/3-107(a) (West
       2014). The second paragraph states:
                    “No action for administrative review shall be dismissed for lack of jurisdiction
                based upon the failure to name an employee, agent, or member, who acted in his or her
                official capacity, of an administrative agency, board, committee, or government entity,
                where the administrative agency, board, committee, or government entity, has been
                named as a defendant as provided in this Section. Naming the director or agency head,
                in his or her official capacity, shall be deemed to include as defendant the
                administrative agency, board, committee, or government entity that the named
                defendants direct or head. No action for administrative review shall be dismissed for
                lack of jurisdiction based upon the failure to name an administrative agency, board,
                committee, or government entity, where the director or agency head, in his or her
                official capacity, has been named as a defendant as provided in this Section.” Id.
       Finally, the third paragraph, at issue in the case at bar, indicates:
                    “If, during the course of a review action, the court determines that an agency or a
                party of record to the administrative proceedings was not made a defendant as required
                by the preceding paragraph, then the court shall grant the plaintiff 35 days from the date
                of the determination in which to name and serve the unnamed agency or party as a


           1
            We note, as the trial court did below, that if plaintiff truly sought to challenge defendants’ ability to
       render a decision as to her eligibility, she could have named DHS as defendant and challenged the
       decision as void. See, e.g., Crittenden v. Cook County Comm’n of Human Rights, 2013 IL 114876.

                                                         -5-
                defendant. The court shall permit the newly served defendant to participate in the
                proceedings to the extent the interests of justice may require.” Id.
¶ 21        The Appellate Court, Fourth District, recently considered subsection 3-107(a)’s third
       paragraph in Mannheim under facts similar to the case at bar. In that case, the plaintiff sought
       judicial review of a decision by the Board of Trustees of the Teachers’ Retirement System of
       Illinois but failed to name the agency or its head as defendant. Mannheim, 2015 IL App (4th)
       140531, ¶ 3. The trial court dismissed the complaint and denied the plaintiff’s motion to amend
       it to include the proper defendants. Id. ¶ 7. The Fourth District held that the plaintiff was not
       entitled to amend its complaint, finding that the “strict language” of subsection 3-107(a)
       specifies that a plaintiff is only allowed to amend in the circumstances laid out in the
       subsection’s second paragraph: “(1) the individual employee, agent, or member who acted in
       his or her official capacity can be added when the plaintiff has named the administrative
       agency, board, committee, or government entity ‘as provided in this section’; or (2) the
       administrative agency, board, committee, or government entity can be added when the plaintiff
       has named the director or agency head, in his or her official capacity, ‘as provided in this
       section.’ ” Id. ¶ 22 (quoting 735 ILCS 5/3-107(a) (West 2012)).
¶ 22        Plaintiff did not name DHS or its secretary as defendant in her complaint; thus under the
       reasoning of Mannheim, she would not be entitled to add either entity as a defendant. However,
       we decline to follow Mannheim for the following reasons.
¶ 23        First, it is clear that the Fourth District found that the reference to “the preceding
       paragraph” in subsection 3-107(a)’s third paragraph was intended to direct the reader to the
       subsection’s second paragraph because the court limited the subsection’s mandate to allow
       amendment to the circumstances described in that paragraph. Although we acknowledge that
       the court’s understanding of the phrase is a plausible reading of the statute, we do not agree that
       it is the best or most natural reading. In statutory interpretation, a reviewing court must view
       each phrase or part of the legislation in the context of the statute as a whole. Ultsch v. Illinois
       Municipal Retirement Fund, 226 Ill. 2d 169, 184 (2007). The phrase “the preceding paragraph”
       by itself could be read to mean the immediately preceding paragraph; however, the statute
       indicates that the preceding paragraph in question requires that “an agency or a party of record
       to the administrative proceedings” be made a defendant. 735 ILCS 5/3-107(a) (West 2014). Of
       the two paragraphs that precede this language, only the subsection’s first paragraph details
       which parties are required to be named defendant. Id. By contrast, the second paragraph sets
       forth no requirements but indicates two situations in which unnamed parties cannot be the
       basis for a dismissal and therefore are not required to be named. See id. Thus, we find that the
       legislature intended “the preceding paragraph” to refer to the subsection’s initial paragraph,
       despite it not being immediately prior. Consequently, the third paragraph’s mandate to allow
       amendments is not limited to the circumstances described in the second paragraph, as the
       Fourth District held.
¶ 24        This reading of “the preceding paragraph” is supported by an examination of the legislative
       history of the statute. In 1995, subsection 3-107(a) consisted of only two paragraphs, with the
       first paragraph being substantially similar to the current first paragraph’s description of
       required parties and the second paragraph being substantially similar to the current third
       paragraph. 735 ILCS 5/3-107(a) (West 1996). In 1996, the legislature amended the
       subsection’s first paragraph, adding the language that currently constitutes the subsection’s
       second paragraph; however, the subsection remained as two paragraphs. See 735 ILCS

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       5/3-107(a) (West 1998). Thus, prior to 2008, the phrase “the preceding paragraph” clearly
       referred to the statute’s first paragraph explaining the required parties. However, in 2008, the
       legislature amended the statute again, adding two sentences regarding service to the first
       paragraph and reformatting the subsection into its current three paragraphs. See 735 ILCS
       5/3-107(a) (West 2010). This reformatting resulted in the phrase “the preceding paragraph”
       being distanced from its original referent, but there is no indication that this stylistic
       restructuring was intended to substantively alter the phrase’s meaning.
¶ 25        Moreover, we note that appellate courts are not permitted to interpret statutory language in
       a manner that renders any part of the statute “redundant” or “superfluous.” Citizens Opposing
       Pollution v. ExxonMobil Coal U.S.A., 2012 IL 111286, ¶ 29. If the phrase “the preceding
       paragraph” is read to limit the ability to amend to the situations found in the second paragraph,
       then the third paragraph is rendered superfluous. The second paragraph of the subsection states
       that naming the head of an administrative agency as a defendant “shall be deemed to include as
       defendant the administrative agency.” 735 ILCS 5/3-107(a) (West 2014). Additionally the
       second paragraph states that a case cannot be dismissed under either of the circumstances
       listed. Id. Accordingly, it would be unnecessary to add a party already “deemed” to be included
       or to amend the complaint in circumstances that cannot lead to a dismissal. If the third
       paragraph is limited by the second paragraph, as the Mannheim court found, then a plaintiff is
       only permitted to amend the complaint in situations where amendment would be unnecessary.
       Such a reading would impermissibly render the paragraph superfluous.
¶ 26        Subsection 3-107(a) mandates that if a court determines that a plaintiff has failed to name
       an agency or party of record as a defendant “then the court shall grant the plaintiff 35 days from
       the date of the determination in which to name and serve the unnamed agency or party as a
       defendant.” Id. As we find this mandate is not limited to the circumstances included in the
       subsection’s second paragraph, plaintiff was entitled to amend her complaint within 35 days
       from the date the trial court determined that DHS was a required party. We therefore reverse
       the judgment of the circuit court dismissing plaintiff’s complaint with prejudice and remand
       the case to the circuit court to allow plaintiff 35 days to amend her complaint to name the
       required defendants and serve them.

¶ 27                                       CONCLUSION
¶ 28       For the foregoing reasons, we find that plaintiff failed to name the correct parties as
       defendants in her complaint under the Administrative Review Law but was entitled to the
       opportunity to amend her complaint to name the proper parties pursuant to subsection
       3-107(a). 735 ILCS 5/3-107(a) (West 2014). Accordingly, we reverse the judgment of the
       circuit court of Cook County and remand the case to allow plaintiff to amend her complaint.

¶ 29      Reversed and remanded with directions.




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