In Ready v. United/Goedecke Servs., Inc. et al., 2008 Ill. LEXIS 1439 (Ill. Nov. 25, 2008), the Illinois Supreme Court, in a plurality opinion, held section 2-1117 of the Illinois Code of Civil Procedure does not require good-faith settling tortfeasors who have been dismissed from the lawsuit to be included on the verdict form.
In Ready, Michael Ready, a maintenance mechanic, died in a pipe-refitting project at his workplace, Midwest Generation, LLC power plant. The general contractor of the project, BMW Constructors, Inc. (BMW), had subcontracted with United/Goedecke Services, Inc. (United), to perform the scaffolding work, including the lifting of scaffolding materials. Terry, as special administrator of Ready’s estate filed suit against Midwest, United, and BMW. The plaintiff reached good-faith settlements with BMW and Midwest, and United did not object to the settlements.
Prior to the commencement of trial, the trial court ruled in the plaintiff’s favor on multiple motions in limine, and as a result, United was not allowed to present evidence at trial regarding the conduct of the settling defendants. Additionally, the trial court denied United’s motion to include BMW and Midwest on the verdict form so that the jury could consider their allocations of fault if they found against United. The jury found United 65% liable and awarded damages totaling $14.23 million, $8.137 million of which United was responsible to pay after the judgment against United was offset by the previous settlements of BMW and Midwest.
United argued on appeal to the First District Appellate Court that if a jury could have considered the faults of BMW and Midwest, then there is a chance that United would have fallen below the 25% mark, making them severally liable under section 2-1117 and responsible for no more than $5.473 million, as opposed to the $8.137 million United ultimately paid.
Section 2-1117 establishes that all defendants are jointly and severally liable for the plaintiff’s past and future medical and medically related expenses. Additionally, a defendant whose fault is 25% or greater is jointly and severally liable for all other damages; whereas, a defendant whose fault is less than 25% is only severally liable. According to section 2-1117, the faults considered in these calculations are those of the “plaintiff, the defendants sued by the plaintiff, and any third party defendants who could have been sued by the plaintiff.” Section 2-1117. (emphasis added).
The appellate court held in favor of United and ruled BMW and Midwest should have been on the verdict form. The case was appealed to the Illinois Supreme Court to determine if good-faith settling tortfeasors are “defendants sued by the plaintiff,” according to Section 2-1117. If the court determined Section 2-1117 contemplated good-faith settling tortfeasors, then BMW and Midwest would be included on the verdict form for purposes of fault apportionment, and the jury would hear evidence related to the culpability of these settled defendants.
The supreme court found the term “defendants sued by the plaintiff” in Section 2-1117 ambiguous; therefore, the court turned to an analysis of legislative intent to determine the scope of the term. The court relied on the fact that the Illinois legislature amended section 2-1117 in 2003, but this amendment did not address the 5th District’s 1995 decision in Blake v. Hy Ho Restaurant, Inc., 273 Ill. App. 3d 372 (1995), that defendants who settled were not to be included in the apportionment of fault under section 2-1117. Thus, the court believed the legislature’s failure to amend section 2-1117 amounted to an acquiescence of the Blake holding. In conclusion, the Illinois Supreme Court held that good-faith settling tortfeasors are not “defendants sued by the plaintiff” and therefore should not be listed on the verdict form.
This decision has far-reaching practical implications, many of which were addressed by Justice Garman in his dissent, which was joined by Justice Karmeier. As Justice Garman pointed out, this decision:
invites future plaintiffs to reject reasonable settlement offers from minimally responsible defendants with ‘deep pockets’ in an effort to keep such defendants in the case until judgment.
Plaintiff’s will likely “pick off” any defendants with “shallow pockets” by settling with these defendants in order to disallow the jury from hearing any evidence regarding these defendants’ apportionment of fault. As a result, the jury may find an otherwise minimally responsible defendant more liable when it does not hear evidence of the fault of the settled defendants.
Further, Justice Garman questioned what will happen if the plaintiff settles during trial or while the jury is deliberating, since evidence of the guilt of these defendants was likely to have been introduced prior to settling. It seems unlikely the courts will require the trial to start over or declare a mistrial, and seems more likely the courts will attempt to rectify this problem through jury instructions. Nevertheless, courts must address this issue in the future.
In light of this decision, a defendant in United’s position should aggressively challenge any motions in limine which attempt to limit the evidence introduced regarding the fault of any co-defendants who may potentially settle or who may have already settled. Also, defendants must ardently attack a settlement between a plaintiff and a largely responsible co-defendant with “shallow pockets” as not being in “good faith,” in hopes of keeping these co-defendants in the case and on the verdict form. However, as established law in Illinois makes opposing settlements extremely difficult, this option caries very little in the way of protection for targeted defendants.
Additionally, a defendant would be well advised to consider the likelihood that a plaintiff may attempt to target its deep pockets, when contemplating an early settlement demand. When analyzing a settlement demand, such a defendant should factor in the assets of co-defendants and/or their liability insurance limits to predict if the plaintiff might attempt to settle with these defendants. More importantly, a minimally responsible defendant with “deep pockets” should analyze its apportionment of fault compared to that of the plaintiff only, with the assumption that the plaintiff will “pick off” the other responsible defendants with “shallow pockets.”
This forward-looking settlement analysis may prove vital to a defendant hovering below the 25% liability mark prior to any settlements, and thus, originally severally liable. A defendant presuming to be found severally liable when the faults of all defendants are considered is likely to believe a settlement demand by the plaintiff representing 25%-40% liability to be unreasonable. However, such a settlement may be advisable when one contemplates that the jury could find the defendant over 40% liable if the plaintiff strategically settles with other liable defendants.
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Christopher Harney, admitted to the bar on November 6, 2008, is a new associate in Querrey & Harrow's Chicago office. Chris previously clerked for Querrey & Harrow during law school and concentrates his practice in general litigation and currently assists in a variety of matters, including: auto liability cases, premises slip and fall claims, and drafting commercial contract provisions. We welcome Chris to our practice.
Christopher graduated Cum Laude from the University of Mississippi School of Law, following receiving a Bachelor’s Degree in Psychology from the University of Chicago as a four-year recipient of the Chicago Police and Fire Scholarship. During law school, Christopher was active on the moot court team and successfully competed in a variety of appellate competitions, including placing as a Semifinalist in the State of Mississippi Appellate Advocacy Competition. If you have any questions regarding this article, or would like copies of any of the materials cited, please contact Chris via charney@querrey.com, or via 312-540-7622.
