Ready v. United

Introduction:

The Illinois Supreme Court’s recent decision in Ready v. United/Goedecke Services, Inc., Docket No. 103474, 2008 Ill. LEXIS 1439 (November 25, 2008, modified on denial of rehearing on March 23, 2009) settled a long-disputed question regarding the interpretation of a provision of the Illinois Joint Tortfeasors Liability Act, 735 ILCS 5/2-1117. At issue in Ready was whether co-defendants who settle prior to trial should be included on the jury verdict form apportioning fault. The Supreme Court determined that the 2-1117 required exclusion of settling defendants from the verdict form apportioning fault as they are not “defendants sued by the plaintiff” under the statute. This article discusses the Ready decision and the strategy going forward defending tort actions with multiple defendants, including both the question Ready answered and the very important question left unanswered.

Ready v. United

In Ready, the plaintiff brought a wrongful death action on behalf of her husband’s estate against several parties hired to perform pipe-refitting work at a power plant in Joliet, Illinois. On December 23, 1999, Michael Ready was killed when a wooden truss slipped out of a sling while being lifted causing it to fall more approximately eight stories. Mr. Ready’s wife, Terry Ready, filed suit against the general contractor BMW Constructors, Inc. (“BMW”) and two subcontractors, United/Goedecke Services, Inc. (“United”) hired to perform scaffolding work and Midwest Generation, LLC (“Midwest”), owner of the power plant and the tugger which was being used to lift the wooden truss at the time of the incident. Prior to trial, the plaintiff reached settlement agreements with both BMW and Midwest for a total of $1.113 million. United did not object to the settlements and a good faith finding was entered by the trial court.

United filed several pre-trial motions in limine, among which it sought to present evidence of the conduct of the settling defendants on the issue of liability and to list BMW and Midwest on the verdict form apportioning fault among the parties, including the co-defendants. Both of these motions were denied by the trial court and the jury awarded the plaintiff $14.23 million after finding United liable for negligence. This amount was then reduced to $8.137 million after off-setting the Mr. Ready’s comparative negligence (35%) and the settlement amounts previously paid by BMW and Midwest.

United appealed arguing that the trial court erred by refusing to add BMW and Midwest to the verdict form apportioning fault among the parties. If the jury had been allowed to consider BMW and Midwest’s relative fault, United argued that it may have been found less than 25% liable and thus, under Section 2-1117, only severally liable for damages unrelated to past medical care. Section 2-1117 states as follows:

“Joing Liability. Except as provided in Section 2-1118, in actions on account of bodily injury or death or physical damage to property, based on negligence, or product liability based on strict tort liability, all defendants found liable are jointly and severally liable for plaintiff’s past and future medical and medically related expenses. Any defendant whose fault, as determined by the trial of fact, is less than 25% of the total fault attributable to the plaintiff, the defendants sued by the plaintiff, and any third party defendant who could have been sued by the plaintiff, shall be severally liable for all other damages. Any defendant whose fault, as determined by the trier of fact, is 25% or greater of the total fault attributable to the plaintiff, the defendants sued by the plaintiff, and any third party defendants who could have been sued by the plaintiff, shall be jointly and severally liable for all other damages.”

(735 ILCS 5/2-1117).¹

The appellate court reversed in relevant part finding that Section 2-1117 required that the settling defendants be listed on the verdict form apportioning fault and concluded that evidence of the culpability of the settled defendants was relevant and admissible. The Ready court found it necessary to address only the issue regarding the proper interpretation of Section 2-1117 and held that “defendants sued by the plaintiff” did not include those whom had settled prior to trial.

In examining the relevant provision, the Ready court found that the statute was ambiguous with regard to whether it includes within its scope settling tortfeasors such as BMW and Midwest. Page 7. In reaching this conclusion, the majority² found that the phrase “defendants sued by the plaintiff” was ambiguous because it was undefined in the statute and could be read both to include and exclude settling defendants. Using principles of statutory construction, the court found that the ambiguous language was not intended to include settling defendants because: (1) the legislature did not address the appellate court’s opinion in Blake v. Hy Ho Restaurant, Inc., 273 Ill. App. 3d 372 (5th Dist. 1995), which held that settling defendants were not to be included in the apportionment of fault under Section 2-1117; and (2) the legislature attempted to amend Section 2-1117 to include settling defendants on the verdict form in the Tort Reform Act of 1995, Public Act 89-7, which was later found to be unconstitutional in Best v. Taylor Machine Works, 179 Ill. 2d 367 (1997). The latter rational is based on the rule of statutory construction that an amendment to a statute creates a presumption that the amendment was intended to change the law. The Supreme Court reasoned that since the legislature intended to include settling defendants on the verdict form by enacting the Tort Reform Act of 1995, it stands that the 1986 un-amended version did not include settling defendants on the verdict form.

[1] This language was amended in 2003 and excluded the plaintiff’s employer from the third-party defendants subject to a finding of fault. The parties to Ready agreed that the 1986 version applied to the facts of their case and is therefore cited above. The language at issue in this case is present in both versions.
[2] Justice Freeman wrote the majority opinion in which Chief Justice Fitzgerald and Justice Burke concurred. Justice Kilbride specially concurred with opinion writing that he agreed with the judgment, but felt that the legislative intent could be deduced by examining the plain meaning of the statute as a whole. Justices Garman wrote the dissent which was joined by Justice Karmeier and Justice Thomas did not take part in the consideration or decision of the case.

Also relevant to this discussion is the Supreme Court’s disposition of United’s argument that it was deprived the opportunity to present its sole proximate cause defense because the trial court refused to instruct the jury on the issue. Although the appellate court found that evidence of the settling defendant’s culpability was relevant and admissible, it also found that it need not address the issue because it reversed the trial court as to liability. Since the Supreme Court reversed the appellate court’s ruling ordering a new trial, it remanded the cause to the appellate court for resolution of this issue.

Judge Maddux weighs in

Following the Supreme Court’s ruling in Ready, the Honorable William D. Maddux, Presiding Judge of the Law Division of the Circuit Court of Cook County wrote an article analyzing the decision. Judge Maddux wrote to address the public policy reasons supporting the decision which were not addressed by the opinion. He also addressed the question left open by the opinion; whether trial courts should exclude evidence regarding the culpability of settling defendants.

Judge Maddux wrote that one of the primary reasons for the appellate court’s ruling in Blake v. Hy Ho Restaurant, Inc., which held that the culpability of settling defendants may not be examined in the jury’s apportionment of fault pursuant to Section 2-1117, was the established public policy in Illinois favoring settlements. According to Judge Maddux, had the court reached a contrary decision, the expense to settling defendants of participating in discovery would likely discourage settlement negotiations. Any equitable considerations suggesting that fault should be apportioned among all defendants are outweighed, Judge Maddux argued, by the injustice caused in allowing jurors to pass judgment on unrepresented parties, ex parte, and thwart the public policy of encouraging settlements.

Finally, Judge Maddux addressed the issue of whether evidence of the settling defendants’ culpability is admissible at trial. He began with the premise that under Illinois law, there can be more than one proximate cause of an injury and thus, evidence of another party’s contributory negligence to the plaintiff is not a defense to liability. The one exception to this rule, Judge Maddux noted, was the sole proximate cause defense in which the defendant must allege that: (1) it was not the proximate cause of the plaintiff’s injuries; and, (2) another person was the sole proximate cause of those injuries. Only then does evidence of the other person’s fault become relevant and admissible at trial. Judge Maddux ended the article predicting that the legislature may provide a clear interpretation of settling and non-settling defendants’ apportionment of fault under Section 2-1117 and that trial courts will continue to struggle with whether to exclude evidence of settling defendants conduct and jury instructions regarding the sole proximate cause defense.

Nolan v. Weil-McLain

Although the rulings leading to the Illinois Supreme Court’s decision in Nolan v. Weil-McLain, Docket No. 103137, (April 16, 2009), occurred long before the decision in Ready, Judge Maddux’s predictions regarding the difficulty experienced in the state’s trial courts over the exclusion of settling defendants conduct and jury instructions on the sole proximate cause defense proved correct. The Nolan case addressed these issues in the context of a multi-defendant asbestos lawsuit. Clarence and Sally Nolan filed suit against 12 corporations in 2001 alleging that Clarence developed mesothelioma following negligent exposure to the defendants’ respective products during the installation, repair and removal of boilers manufactured by Weil-McLain (“Weil”). Eleven of the defendants settled or were dismissed prior to trial. In its motion in limine, Weil sought to introduce evidence that the sole proximate cause of the Mr. Nolan’s illness and subsequent death was the exposure to products of other non-parties which contained asbestos. Weil argued that the Supreme Court’s decision in Thacker v. UNR Industries, Inc., 151 Ill. 2d 343 (1992), permitted the introduction of evidence that would exclude certain exposures as “substantial contributing causes” of the plaintiff’s injury, and that if the plaintiff meets Thacker’s “frequency, regularity and proximity” test, it is then for the jury to determine whether the defendant conduct proximately caused the plaintiff’s injuries using competent and complete evidence. Relying on Leonardi v. Loyola University of Chicago, 168 Ill. 2d 83 (1995), Weil argued that evidence that a non-party was the sole proximate cause of the plaintiff’s injuries was admissible.

The trial court ruled that the defendant was barred from introducing evidence of exposure to asbestos products of non-parties. At the conclusion of the trial, the trial judge read a sole proximate cause defense instruction to the jury. The jury returned a verdict in favor of the plaintiff for $2,368,000 in damages which was reduced to $1,222,500 after offsetting amounts received from settling defendants. Weil filed a post-trial motion arguing the court erred in excluding evidence of the plaintiff’s other asbestos exposures which the judge denied in a 57 page order prefaced by stating that he was conflicted between what he felt the law should be and the “current state of the law in asbestos litigation.” The appellate court affirmed stating that once the plaintiff satisfied Thacker’s “frequency, regularity and proximity” test, a presumption arises that the defendant proximately caused the plaintiff’s asbestos injury. The appellate court also ruled that evidence of other exposures is irrelevant to the jury’s independent determination as to whether exposure to the defendant’s product was a substantial factor in causing plaintiff’s injuries.

Writing for the majority, Justice Freeman identified the issues on appeal as: (1) whether the trial court erred by excluding evidence of decedent’s exposure to asbestos products of non-parties; (2) whether this ruling deprived Weil the opportunity to present evidence in support of its sole proximate cause defense; (3) that the ruling conflicts with the Supreme Court’s decisions in Thacker and Leonardi by creating a presumption of liability thereby preventing the jury to consider and weigh the evidence; and (4) that these errors were not harmless and require a new trial so a jury may consider all of the plaintiff’s asbestos exposures. A significant portion of the court’s ruling in Nolan is devoted to the presumption issue which was limited to asbestos cases and answered in the negative. However, the first two issues identified above provide hope to a non-settling defendant wishing to pursue a sole proximate cause defense at trial.
The Nolan court ruled that the trial court committed reversible error by excluding evidence of the plaintiff’s exposure to asbestos products of non-defendants. In so ruling, the Supreme Court rejected the notion that evidence of other possible causes for a plaintiff’s claimed injury would confuse or ditract the jury’s attention from the issue of whether the named defendant caused the plaintiff’s injuries. Page 20. Rather, it reasoned, the sole proximate cause defense focuses the attention of a properly instructed jury of the plaintiff’s burden to prove that the defendant’s conduct was the proximate cause of his injuries. Id. The case was then remanded to the circuit court for a new trial.

Effect

The Ready and Nolan opinions can seem at first glance inconsistent. Ready says that a jury may not consider the conduct of settling defendants when apportioning fault at trial while Nolan says a defendant may ask the jury to consider the conduct of non-parties in determining liability. However, the silver lining is that tort defendants may be able to present evidence of a settling defendant’s conduct, which relates to the apportionment of fault, so long as they dispute liability by pursuing a sole proximate cause defense. It remains to be seen whether Nolan will be limited to asbestos cases, or applied broadly to all tort actions. If applied broadly, however, the sole proximate cause defense could become as popular as the comparative negligence defense in cases with multiple defendants and become a contingency plan for tort defendants unable to settle or obtain dismissal prior to trial.

Illinois Looks Forward at Relation-Back Doctrine

The Illinois Supreme Court recently set out to shed light on the “gray area” of the relation back doctrine, codified by 735 ILCS 5/2-616(b), through their January 08 decision in Porter v. Decatur Memorial Hosp. The original complaint in Porter alleged the hospital staff was negligent for failing to report signs of diminishing neurologic status to the neurosurgeon. After some discovery, it became clear that a radiologist failed to properly read a CT scan, and the plaintiff amended the complaint to specifically include the new allegation. The Hospital claimed that the allegation regarding the CT scan should be dismissed because it was filed after the statute of limitation had run. The plaintiff maintained that the allegation related back to the original action, and the Supreme Court agreed.

The Court regaled readers with a history of the relation-back doctrine, relying on both state and federal law. The purpose of the doctrine is to preserve causes of action against technical default unrelated to the merits of the case. Ultimately, the Court used a “sufficiently close relationship” test which allows relation-back when the new claim, compared with the timely allegations, shows that the events were close in time, close in subject matter, and led to the same injury. This, the Court believes, will give defendants sufficient notice, saving them from prejudice.

Untried Allegation Laid to Rest with Res Judicata

Recently, Illinois Supreme Court decided Hudson v. City of Chicago. In November of 1998, 5 year old Hudson died of acute asthma exacerbation when a fire engine without advanced life support equipment was dispatched by the 911 operator. An ambulance with the correct equipment arrived nearly 15 minutes later. The plaintiff made claims against the city for negligence and willful and wanton conduct. The city, relying on immunity under the Emergency Medical Services System Act, successfully raised a motion to dismiss the negligence count with prejudice, and the plaintiff voluntarily dismissed the remaining charge.

Hudson re-filed the willful and wanton count. Relying on Rein v David A. Noyes & Co., 172 Ill. 2d 325 (1996), the Court found that res judicata barred not only of every matter that was actually determined in the first suit, but also every matter which might have been brought. Therefore, based upon the adjudication on the merits of the negligence count, the willful and wanton conduct count could not stand. The Court emphasized that Rein, and subsequently Hudson, stand for anti-claim splitting policy.

General Assembly is a step behind in preventing step-down provisions

Effective January 1, 2008, section 143.13a of the Illinois Insurance Code mandates that private passenger automobile liability policies must provide the same coverage limits to anyone insured under the policy, regardless of whether that person is a named insured or a permissive user. Yet the passage of this bill came too late to invalidate a hand full of Illinois Farmers Insurance “step-down” provisions which reduced policy limits to the statutory minimum for permissive users of insured vehicles. These provisions limited coverage for express or implied permissive users to $20,000 for death or injury of one person, $40,000 for death or injury of two or more persons, and $15,000 for property damage. After covering losses incurred as a result of Farmer’s step-down clauses, State Farm brought suit against Farmers for four separate incidents. State Farm claimed that the step-down clauses violated Illinois public policy, but the Appellate Court disagreed.

Armed with an amicus curiae brief from the Illinois Trial Lawyers Association, State Farm took the matter up with the Supreme Court in late September, 2007. State Farm argued that their situation was similar to other policy limit matters that had been found to run amuck of public policy including policies excluding coverage of users employed or engaged in a “car business” and car dealers denying full garage coverage to patrons test-driving vehicles. The Supreme Court did not believe those cases were on point, and instead directed attention to the clear language of the Illinois Safety and Family Financial Responsibility Law which mandated the minimum amount of coverage for private passenger automobile liability in section 7-203. The Court did not find any intent to otherwise increase minimum coverage, so because Farmers did indeed provide that amount for permissive users, the Supreme Court upheld the step-down provisions. The Illinois General Assembly was quick in step to amend their intent, creating newly effective section 143.13a.

Court stifles cry for expansion of affirmative duties

The Supreme Court recently considered the extension of affirmative duties to act and the alleged erosion of the “special relationship” doctrine in Iseberg v. Gross. In this case, a joint business venture left one partner financially distraught and mentally unbalanced, blaming an ex-partner, the plaintiff in the case, for his plight. The two other partners were aware that the troubled partner made numerous threats on the plaintiff’s life. He later appeared at the home of the plaintiff and fired four shots, leaving the plaintiff paralyzed. Subsequently, the plaintiff claimed that the two other partners had an affirmative duty to warn him about the troubled partner’s threats. The plaintiff gave two theories for recovery: (1) a principal-agent special relationship theory, or (2) the theory that the special relationship doctrine should be abandoned entirely because it has fallen out of favor in Illinois.

The Court upheld the decision of the Appellate Court, confirming that not only was there no special relationship warranting a duty, but the special relationship doctrine still stands strong in Illinois and, for that matter, every US jurisdiction. In the decision, the Court noted that the principal-agent “special relationship” duty to warn, outlined in section 471 of the Restatement Second of Torts, is reserved for cases where there is a risk arising from the nature of a particular employment for which the principal has superior knowledge, and affirmative duties to act can only arise from a recognized “special relationship” or a statutory obligation, found in several states.

Circuit court rule places undue burden on parties

In September 2007, a certified question was sent to the Supreme Court in Vision Point of Sale, Inc. v. Haas. The complaint alleged, among other things, violation of the Illinois Trade Secrets Act, but the Court only determined whether or not a court can consider facts and circumstance of record beyond the reason for noncompliance when determining whether good cause exists under Supreme Court Rule 183 for grant of an extension of time to remedy an unintentional noncompliance with a procedural requirement. Plaintiffs had failed to file their response to defendant’s request to admit with the clerk, as was required under local rule, so the trial court deemed the requests admitted. Later, after the defendant caused numerous procedural delays and failed to comply with several court orders, the trial court reconsidered and allowed an extension for plaintiff’s response to defendant’s request to admit. The defendant challenged this reconsideration, and the Court said that discretion may be used to extend a deadline when good cause for noncompliance is shown, but that good cause could not be shown by considering facts outside of the reason for noncompliance.

However, the Court also found that the requirement to file a response to a request to admit with the clerk, as outlined in Rule 3.1(c) of the circuit court of Cook County, was an undue burden on the parties and ran contrary to Supreme Court Rule 216, which only requires that the response is served in a timely manner. This finding allowed plaintiffs an extension regardless of the adverse answer to the certified question.

Illinois Bill may Alter Comparative Fault

Senate bill 1296 proposes to amend section 2-1117 of the Joint Liability Statute to apportion fault only to defendants still remaining in the case at the time of judgment. The fault of any defendants who have settled or been dismissed from the case would be ignored with respect to the remaining defendants’ liability.

Current case law in Illinois is split on whether or not to consider dismissals and settlements in the final apportionment of damages. The 5th District Appellate Court of Illinois and 7th Circuit US Court of Appeals align with the proposed amendment and disregard dismissed and settled defendants. These courts argue that the term “defendants sued by the plaintiff” in section 2-1117 was clearly intended to mean only defendants who remain in the case when it is submitted to the fact finder. They also claim that considering the fault of absent defendants will encourage use of “empty chair” defense.

Conversely, the 4th District Appellate Court of Illinois and 1st District Appellate Court of Illinois maintain that including settled and dismissed defendants in determination of liability promotes more equitable outcomes and prohibits plaintiffs from manipulating defendants to find the deepest pocket. A 1st District case decided along those lines is currently pending before the Illinois Supreme Court. However SB 1296 is currently waiting for a House vote, and if it is enacted, the point will be moot.