Commerce Bank v. Youth Services of Mid-Illinois Inc.

Case Date: 08/23/2002
Court: 4th District Appellate
Docket No: 4-01-0999 Rel

NO. 4-01-0999

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

COMMERCE BANK, Special Administrator of ) Appeal from
the Estate of LOUISE OSBORN, Deceased, ) Circuit Court of
                       Plaintiff-Appellee, ) McLean County
                       v. ) No. 94L244
YOUTH SERVICES OF MID-ILLINOIS, INC., )
                       Defendant-Appellant.  ) Honorable
) G. Michael Prall,
) Judge Presiding.

JUSTICE COOK delivered the opinion of the court:

Defendant, Youth Services of Mid-Illinois, Inc. (YouthServices), appeals from the October 22, 2001, order of the McLeanCounty circuit court denying defendant's posttrial motions forjudgment notwithstanding the verdict and for a new trial. Wereverse the order denying the motion for judgment notwithstandingthe verdict.

I. BACKGROUND

This case began on July 29, 1993, when three-year-oldLouise Osborn died while enclosed in a bedroom closet in the homeof her foster parents, Sarah and Matthew Augsburger. Accordingto the record, defendant was a private, not-for-profit corporation which was hired by the Department of Children and FamilyServices (DCFS). Defendant had placed Louise and her olderbrother with the Augsburgers the previous year. DCFS contractsout foster children to private foster agencies such as defendantto provide the services that DCFS would normally provide. In thecontext of this case, it was defendant's responsibility to findfoster parents, make sure that the foster parents and their homecomplied with DCFS' licensing requirements, and then monitor thefoster children in accordance with DCFS regulations and Illinoislaw. Defendant provided services to the children, created plans,distributed state money to the foster parents, and monitored thefoster parents, all pursuant to DCFS regulations. In otherwords, defendant acted in DCFS' place. The only duties whichDCFS reserves for itself in cases like this are the licensing ofthe foster parents and the initial removal of children from theirhome that places them into state custody. DCFS also handlescourt appearances. Plaintiff Commerce Bank, f/k/a the People'sBank, sued the Augsburgers and defendant over Louise's death onbehalf of Louise's estate.

In a previous appeal from an order granting a motion todismiss, this court ruled that the Augsburgers were immune fromsuit for any negligence in regard to their supervision of Louisebecause they were clothed with parental immunity. See CommerceBank v. Augsburger, 288 Ill. App. 3d 510, 517, 680 N.E.2d 822,827 (1997) (Commerce Bank I). Plaintiff consequently amended itscomplaint to sue only defendant for defendant's own negligence inLouise's death and the Augsburgers' negligence under the theoryof respondeat superior. The trial court dismissed plaintiff'srespondeat superior claims, but allowed the rest of the claims togo to trial. A jury ultimately found that defendant was notnegligent in Louise's death.

Plaintiff appealed, arguing only that the trial courterred when it prevented plaintiff from suing defendant under atheory of respondeat superior. This court agreed with plaintiff,and reversed and remanded the question of whether an agencyrelationship existed between the parties that would give rise tothe doctrine of respondeat superior. See Commerce Bank v. YouthServices of Mid-Illinois, Inc., No 4-98-0833 (August 10, 1999)(unpublished order under Supreme Court Rule 23) (Commerce BankII).

The case proceeded to trial against defendant onremand. A jury found that Sarah Augsburger was negligent in hersupervision of Louise, proximately causing her death, and that anagency relationship existed between Sarah Augsburger and defendant, thus making defendant vicariously liable for Louise's deathunder the doctrine of respondeat superior. The jury awardedplaintiff a total of $640,000: $400,000 on a wrongful deathclaim and $240,000 on a survival claim. Defendant filedposttrial motions for judgment notwithstanding the verdict andfor a new trial, which were denied. Defendant appeals.

II. ANALYSIS

Defendant raises several arguments in support of itscontention that the trial court should have granted either themotion for judgment notwithstanding the verdict or a new trial: (1) the evidence was insufficient to support the jury's findingthat an agency relationship existed between defendant and SarahAugsburger; (2) the evidence was insufficient to support thejury's finding that Sarah Augsburger was negligent, proximatelycausing Louise's death; (3) defendant was entitled to derivativeimmunity based upon Sarah Augsburger's parental immunity; (4) thetrial court imposed an impossible duty of constant supervision onSarah Augsburger; (5) defendant was a public entity immune fromsuit under the Local Government and Governmental Employees TortImmunity Act (Tort Immunity Act) (745 ILCS 10/1-206 (West 2000));(6) the trial court abused its discretion by refusing certainjury instructions; (7) the trial court abused its discretion byallowing evidence of abuse and neglect within the Augsburgerhome; and (8) the evidence was insufficient to support the jury'saward of $640,000 when there was no evidence of pecuniary loss orthat Louise suffered conscious pain and suffering. We find thatthe trial court erred in denying defendant's motion for judgmentnotwithstanding the verdict because the evidence was insufficientto support the jury's finding of an agency relationship. Wetherefore need not address the other issues.

The primary issue in this case was whether SarahAugsburger was defendant's agent or merely an independent contractor. If an agency relationship existed, then defendant canbe held liable for Sarah Augsburger's negligence under thedoctrine of respondeat superior; defendant is not liable if SarahAugsburger was an independent contractor. Lang v. Silva, 306Ill. App. 3d 960, 972, 715 N.E.2d 708, 716 (1999). An independent contractor is hired to achieve a certain result but is notcontrolled in the method of reaching that result. Lang, 306 Ill.App. 3d at 972, 715 N.E.2d at 716. An agency relationship existswhen the principal has the right to control the manner in whichthe agent performs his work. Lang, 306 Ill. App. 3d at 972, 715N.E.2d at 716. In determining whether an agency relationshipexists, the following factors should be considered: the right tocontrol the manner in which the work is performed, the right todischarge, the method of payment, whether taxes are deducted fromthe payment, the level of skill required to do the work, and thefurnishing of the necessary tools, materials, and equipment. Lang, 306 Ill. App. 3d at 972, 715 N.E.2d at 716. The right tocontrol the manner of doing the work is the predominant factor. Wabash Independent Oil Co. v. King & Wills Insurance Agency, 248Ill. App. 3d 719, 723, 618 N.E.2d 1214, 1217 (1993). It doesnot matter if the right to control was not actually exercised. Ross v. Cummins, 7 Ill. 2d 595, 600, 131 N.E.2d 521, 524 (1956). The question of whether the parties' relationship is that ofprincipal and agent or independent contractor is a question offact unless the relationship is so clear that it is undisputable. Letsos v. Century 21-New West Realty, 285 Ill. App. 3d 1056,1065, 675 N.E.2d 217, 224-25 (1996).

Defendant argues that the trial court should havegranted its motion for judgment notwithstanding the verdictbecause the evidence did not support the jury's finding that aprincipal-agent relationship existed between defendant and SarahAugsburger. "'Judgment notwithstanding the verdict should not beentered unless the evidence, when viewed in the light mostfavorable to the opponent, so overwhelmingly favors the movantthat no contrary verdict based on that evidence could everstand.'[Citations.]" McClure v. Owens Corning Fiberglas Corp.,188 Ill. 2d 102, 132, 720 N.E.2d 242, 257 (1999). If reasonableminds can come to different conclusions based on the factspresented, then judgment notwithstanding the verdict is notappropriate. McClure, 188 Ill. 2d at 132, 720 N.E.2d at 257. Our review of the trial court's decision on the motion forjudgment notwithstanding the verdict is de novo. McClure, 188Ill. 2d at 132, 720 N.E.2d at 257.

Our analysis begins with this court's mandate in theprior appeal in Commerce Bank II, wherein we remanded for thetrial court to determine if an agency relationship existedbetween defendant and Sarah Augsburger:

"more precisely, whether defendant had enough control over the Augsburgers' day-to-daysupervision of Louise and her brother necessary to create an employee-employer, or master-servant, relationship that would give rise to the doctrine ofrespondeat superior." Commerce Bank II, slip order at 7.

This court noted that the First District had found that DCFS-appointed foster parents were agents of the State (see Griffin v.Fluellen, 283 Ill. App. 3d 1078, 1087, 670 N.E.2d 845, 852(1996); Nichol v. Stass, 297 Ill. App. 3d 557, 564, 697 N.E.2d758, 762-63 (1998)), but we opined as follows:

"Perhaps given the relentless, around-the-clock care parenting foster children requires, defendant would not have had thecontrol necessary for the imposition of vicarious liability for theAugsburgers' negligence." Commerce Bank II, slip order at 7-8.

Subsequent to our rulings in Commerce Bank I andCommerce Bank II, the Illinois Supreme Court reversed the FirstDistrict in Nichol and abrogated Griffin, which were the cases wecited for the proposition that it was possible for a fosterparent to be an agent of DCFS. In Nichol, foster parents werebeing sued for negligence because a foster child drowned in atoilet while in their care. The foster parents argued that theywere agents of the state and therefore cloaked with sovereignimmunity, because "they were subject to a diverse and comprehensive set of requirements concerning their care for [the] fosterchildren," such as providing closet space, adequate bedding, andregulating meals and discipline. Nichol v. Stass, 192 Ill. 2d233, 239, 735 N.E.2d 582, 587 (2000). The Illinois Supreme Courtheld that "[w]e do not believe that the preceding measures areanything more than licensing requirements or that they serve toestablish the defendants' role as state employees or agents." Nichol, 192 Ill. 2d at 239, 735 N.E.2d at 587. Therefore,pursuant to this court's mandate and the holding in Nichol, thecontrolling issue in this case is whether the evidence presentedsupports a finding that defendant had control over theAugsburgers' day-to-day supervision of Louise beyond subjectingthe Augsburgers to DCFS "licensing requirements."

There was testimony and evidence that defendant did infact have the right to control a great deal of the day-to-daysupervision and parenting of the foster children placed withinthe Augsburgers' home. Defendant could arrive at theAugsburgers' home any time, could instruct them when and howoften to feed the children, to clean up the house, to change thechildren's bed linen, where the children could sleep, and howmuch allowance the children get, could direct supervision of thechildren, and could prohibit corporal punishment, among otherthings. If the Augsburgers failed to comply with defendant'sinstructions in any respect, defendant could remove the childrenfrom the home. The right to control the manner of doing the workand the right to discharge are critical factors in determining anagency relationship. Lang, 306 Ill. App. 3d at 972, 715 N.E.2dat 716.

However, in every area where defendant could exercisecontrol over the Augsburgers, defendant was merely monitoring"licensing standards" set by DCFS regulations. See 89 Ill. Adm.Code