Civil Litigation Alert: Court Holds Settling Parties Should Be Included On Verdict Forms For Damage Apportionment

Attorneys: Guolee, Terrence F.

[UPDATE - the following article first appeared on shortly following the release of the discussed opinion(s). The date referenced as the "Published" date, only refers to the date this article was transferred to the current Internet server hosting Readers should review all articles and discussed cases carefully and update all research, given the potential of changes to the discussed laws and later decisions overruling or limiting earlier discussed opinions.]

In Ready v. United/Goedecke Services, Inc., 854 NE.2d 758 (Ill. App. Ct. 2006), a panel of the First District Appellate Court held that in order to give full effect to the plain language of Section 2-1117 of the Illinois Code of Civil Procedure, the names of settling defendants should be included on the verdict forms submitted to the jury.

This opinion follows the reasoning set forth in the cases of Skaggs v. Senior Services of Central Illinois, Inc., 355 Ill. App. 3d 1120 (4th Dist. 2005), and Dowe v. National R.R. Passenger Corp., 2004 U.S. Dist. LEXIS 7233 (N.D. Ill. 2004), and rejects the position of the courts in Blake v. Hy Ho Restaurant, Inc., 273 Ill. App. 3d 372 (5th Dist. 1995), and Freislinger v. Emro Propane Co., 99 F.3d 1412 (7th Cir. 1996), holding that settling defendants should not be included in the fault apportionment since the phrase "defendants sued by the plaintiff" used in 2-1117 refers only to those defendants who remain in the case when it is submitted to the jury.

In this case, Terry E. Ready, special administrator of the estate of Michael P. Ready, sued defendants United/ Goedecke Services Inc. (United), BMW Constructors, Inc. (BMW), and Midwest Generation EME, L.L.C. (Midwest), as a result of an accident where Ready was killed at Midwest's factory on December 23, 1999. Ready was a mechanic employed by Midwest Generation, LLC, whose parent company was Midwest, and was working on a pipe-refitting project at the factory. BMW was the general contractor hired by Midwest and defendant United was the scaffolding subcontractor hired by BMW to erect temporary scaffolding for the project. Ready was killed when a scaffold beam fell and struck him.

Prior to trial, plaintiff Ready settled the claims against BMW and Midwest. United, the sole remaining defendant, did not object to the settlements and the trial court entered an order finding the settlements to be in good faith.

Prior to trial, the court granted the plaintiff's motions seeking to bar introduction of any evidence relating to BMW and Midwest, finding that evidence relating to them was irrelevant because they had settled. Also, United filed a motion seeking to include BMW and Midwest on the jury verdict form for purposes of fault apportionment. The court denied the defendant's motion and determined that the jury would only apportion fault between Ready and United. United argued that these rulings prevented it from arguing that something other than its conduct caused the injury.

At the conclusion of the trial against United, the jury returned a $14,230,000 verdict for the plaintiff and the judgment was reduced to $9,250,000 after assessing Ready's contributory negligence at 35 percent. The trial court then allowed a setoff of $1,112,502.58, which was the total amount paid to the plaintiff by the settling defendants.

United appealed the verdict, raising numerous evidence issues regarding the settling defendants. United also contended that the trial court erred in excluding the settling defendants from the jury verdict form.

The appellate court first examined whether the trial court's rulings were proper. Using Lannom v. Kosco, 158 Ill. 2d 535 (1994), which held that a settling defendant and its dismissal from the case does not affect a non-settling defendant's rights under Section 2-1117 of the Code of Civil Procedure, the appellate court found that the trial court erred in holding that BMW and Midwest should not be included on the jury verdict form for fault apportionment and that a new trial was in order.

Next, the appellate court examined whether the trial court erred in excluding certain evidence regarding the settling defendants. Since the appellate court found BMW and Midwest should have been included on the jury verdict form, it ruled that any evidence necessary to determine their relative culpability is relevant and admissible on retrial.

The appellate court then addressed United's contention that the trial court erred in giving the short form of Illinois Pattern Jury Instructions, Civil, No. 12.04 (2000) and, thereby, prevented United from raising the argument that something other than its conduct caused the injury. Because it had determined that a new trial was in order, it did not address this issue. However, the appellate court held that, in the event that this issue occurred during the retrial, the trial court should determine the instruction to be given based on the evidence at retrial.

Lastly, the appellate court addressed whether the issue of damages would be revisited on retrial. The appellate court affirmed the damage award amount, stating that United failed to specifically argue that the damage award was improper and therefore waived any right to challenge the amount of damages award.

In conclusion, the appellate court found that the trial court should not have excluded the settling defendants from the jury verdict form and that a new trial as to liability only is required. Of note, the appellate court held that because the pre-amendment version of section 2-1117 was applied to this case, it would be proper to admit evidence regarding the actions of plaintiff's employer and include the plaintiff's employer, Midwest, on the verdict form on retrial.

In this respect, Section 2-1117 was amended effective June 4, 2003 to exempt employers. Thus, the likely reading of the decision is that, in cases with accidents occurring after this date, only non-employer settling defendants would be included on the verdict form. Unsettled is the question of whether evidence of fault by a settling employer would be admissible, given that in most cases this evidence would be necessary to place the actions of settling and remaining non-employer defendants in a proper context before the jury.

This decision is important in that it relieves defendants of much of the concern about being left "holding the bag" and assuming greater liability when other defendants settle out prior to trial. Likewise, it reduces the ability of plaintiff attorneys to "pick off" defendants in order to focus liability on defendants with greater assets or insurance coverage, but less potential fault when considered against all defendants or parties contributing to an injury.

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