When a defendant is sued in a civil case, an available defense is to assert that if the defendant is found liable, its fault should be shared by other defendants or others who the plaintiff could have sued. However, should the other defendant or actor settle with the plaintiff, a dispute arises between the remaining defendant(s) and the plaintiff over whether the jury should still be able to consider the percentage fault of the settling party in determining the remaining defendants' share of liability. Defendants assert, naturally, that their fault should not be considered "in a vacuum" and that settling parties' relative fault should be considered by the jury; whereas plaintiffs assert that as the remaining defendants will receive a setoff for the amount paid by the settling defendants, to consider the settling parties' fault will result in an injustice to the plaintiff.
This issue is heightened considerably in many cases where a finding that the remaining defendant is found to be less than 25% at fault for the plaintiff's injuries is possible, which under Section 2-1117 of the Code of Civil Procedure can substantially limit the damages the defendant is liable for, by making the defendant only "severally" liable for their particular percentage of fault, rather than jointly and severally liable for all damages. Moreover, in many cases, plaintiffs will seek to "pick off" and settle with certain defendants in order to focus the case and the sometimes extreme liability on a remaining defendant, hoping to leave that target defendant "holding the bag" and exposed to liability far greater than might have been assessed against it had all potential defendants' respective fault been considered by the jury. However, recent decisions of the Illinois First District Appellate Court have been very inconsistent in considering this issue.
In this respect, two recent First District Illinois Appellate Court decisions issued on successive days addressing this issue under Section 2-1117 of the Illinois Code of Civil Procedure resulted in different rulings on this issue.
First, the purpose of Section 2-1117 is to hold minimally culpable defendants minimally responsible. Unzicker v. Kraft Food Ingredients Corp., 203 Ill. 2d 64, 78-79 (2002). Section 2-1117 reads as follows:
Except as provided in Section 2-1118 [735 ILCS 5/2-1118], 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 trier 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 except the plaintiff's employer, 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 except the plaintiff's employer, shall be jointly and severally liable for all other damages.
735 ILCS 5/2-1117 (2008) (emphasis added).
In 2003, the legislature amended Section 2-1117 in response to the decision in Unzicker v. Kraft Food Ingredients Corp., which found that a plaintiff's employer should be included on the jury verdict form. 203 Ill. 2d 64 (2002). In Unzicker, the Illinois Supreme Court found that the plaintiff's employer, although immune from the suit under the Workers' Compensation Act, was still considered a "third party defendant who could be sued by the plaintiff" for purposes of apportioning fault under pre-amendment Section 2-1117. Id. at 77. The 2003 amendment substituted "any third party defendants except the plaintiff's employer" for "any third party defendants who could have been sued by the plaintiff" in order to prevent a plaintiff's employer from being considered for fault apportionment. 735 ILCS 5/2-1117 (2008), amended by Pub. Act 93-10, §5, eff. June 4, 2003.
On March 5, 2008, the Third Division of the First District Illinois Appellate Court decided Heupel v. Jenkins and held that the trial court did not err in including settling defendants on the jury verdict form. No. 1-07-1338, 2008 Ill. App. LEXIS 175, at *23 (1st Dist. Mar. 5, 2008). The court interpreted the phrase "defendants sued by the plaintiff" to mean all tortfeasors whether or when the plaintiff enters into a settlement agreement. Id. at 21. However, one day later, the Fourth Division of the First District Appellate Court in Yoder v. Ferguson found that the trial court did not err in excluding the settling defendants from the jury verdict form and that the phrase "defendants sued by the plaintiff" excluded settling defendants. Yoder v. Ferguson, No. 1-04-3214 and 1-04-3230, consolidated, 2008 Ill. App. LEXIS 186, at *51 (1st Dist. Mar. 6, 2008). Neither the Huepel nor the Yoder decisions were affected by the 2003 amendment and therefore the amendment cannot help explain the conflicting decisions in the two cases.
Up until these two decisions, the last time the First District addressed this issue was in 2006 when it decided in Ready v. United/Geodecke Services, Inc. that a settling defendant is considered a "defendant sued by the plaintiff" within the meaning of Section 2-1117 for purposes of apportioning fault. 367 Ill. App. 3d 272, 278 (1st Dist. 2006), appeal allowed, 222 Ill. 2d 600 (2006).
The First District found in Ready, that the settling defendants should have been included on the jury verdict form for fault apportionment purposes. In Ready, the decedent construction worker was killed when a beam of scaffolding fell on top of him and a lawsuit ensued filed by the plaintiff special administrator against the decedent's employer, the general contractor and the scaffolding subcontractor. The plaintiff settled with the employer and general contractor and the trial proceeded against the subcontractor.
The jury returned a verdict in favor of the plaintiff and against the subcontractor, assessing decedent's contributory negligence at 35%. The subcontractor appealed, arguing that the trial court erred in excluding the settling defendants from the jury verdict form for purposes of apportioning fault among all tortfeasors. The plaintiff argued that the settling defendants should not have been included on the jury verdict form for fault apportionment purposes because the term "defendants sued by the plaintiff' referred only to defendants remaining in the case when submitted to the fact finders as decided 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).
The subcontractor relied on the Fourth District’s decision in Skaggs v. Senior Services of Central Illinois, Inc. and argued that a settling defendant does not lose its status as a "defendant sued by the plaintiff" and thus should be included on the jury verdict form. 355 Ill. App. 3d 1120 (4th Dist. 2005). Ultimately, the First District found that the settling defendants should have been included on the jury verdict form for fault apportionment purposes. As a note, since the 2003 amendment was silent as to whether it applied prospectively or retrospectively and since the amendment affected the substantive rights of the parties, the court found that the amendment applied prospectively and therefore applied the pre-amendment version 2-1117 to the case in Ready.
On March 5, 2008, the First District decided Heupel v. Jenkins and was faced with a similar situation, except for the fact that the settling party was never technically named a defendant by the plaintiff as this party settled prior to the filing of the lawsuit. In Heupel, the defendant and third-party Murugenson's vehicles collided on September 7, 2004, which caused defendant's car to pin plaintiff, a pedestrian, against a wall causing extensive injuries. Prior to filing a lawsuit, the plaintiff settled with Murugenson for his insurance policy limits and then subsequently filed a lawsuit against the defendant.
After the trial, the jury returned a verdict for the defendant and the plaintiff appealed. Among the issues on appeal was whether the trial court erred in including Murugenson's name on the jury verdict form for fault apportionment purposes. Plaintiff argued that Murugenson should not have been included on the jury verdict form because plaintiff had settled her claim with Murugenson prior to filing suit and Murugenson was never made a party to the lawsuit.
This case is unique because, regardless of the settlement, technically Murugenson was never named as a defendant in the plaintiff's lawsuit and technically does not have status as a "defendant sued by the plaintiff" under Section 2-1117. However, the First District found that the legislative purpose of Section 2-1117 applied to this situation in Heupel and highlighted the Fourth District's policy analysis:
If a settling defendant may not be included under Section 2-1117, a plaintiff could sue two defendants, one who is primarily at fault but indigent and one who is minimally at fault but wealthy. By settling with the indigent defendant, the plaintiff could circumvent the application of Section 2-1117, leaving the wealthy defendant, even though minimally liable, jointly liable for all the damages because the settling defendant's portion of the fault can no longer be considered.
Skaggs, 355 Ill. App. 3d at 1128.
The First District found that the timing of Murugenson's settlement should not alter the jury's ability to apportion fault among all tortfeasors and interpreted the phrase "defendant sued by the plaintiff" to include all tortfeasors whether or when the plaintiff enters into a settlement agreement. Heupel, 2008 Ill. App. LEXIS 175, at *20 (emphasis added). There was no difference in Murugenson's non-party status as compared to a "settled defendant" just because she settled before being named a defendant. Id.
The following day, the First District decided Yoder v. Ferguson, which involved a multi-car accident on February 12, 1999 in which plaintiff Jerelyn Yoder sustained severe injuries while riding as a passenger in a vehicle driven by her husband Scott Yoder. Jerelyn filed a lawsuit for personal injuries naming as defendants the truck drivers and their employers: Ferguson, Alexander, and Knoll; the drivers of the other vehicles: Rezetko and Marshall; and her thenhusband Scott Yoder. Prior to trial, Jerelyn settled with Scott for $469,000 and Rezetko for $270,000 and the case proceeded to trial against the four remaining defendants. The court refused to include the settling defendants, Scott and Rezetko, on jury verdict forms and the jury returned a verdict in favor of Jerelyn in the amount of $38.3 million and allocated the fault among the remaining four defendants in the following manner: 30% for Ferguson, 10% for Alexander, 27% for Knoll, and 33% for Marshall. Interestingly, in Scott's consolidated case, the jury found in favor of the defendants and against Scott because the evidence showed that Scott was more than 51% at fault for his own injuries.
Defendants Ferguson and Alexander appealed, arguing that the trial court erred by excluding the settling defendants from the jury fault allocation form pursuant to Section 2-1117. Defendants argued that the plain language of Section 2-1117, along with its case law interpretations, required the inclusion of settling defendants on jury verdict forms. Plaintiff, on the other hand, argued that the Fifth District's decision in Blake was controlling in that settling defendants are no longer "defendants sued by the plaintiff" and that only those defendants who remain in the case at the time it is submitted to the fact finder should be included on the jury verdict forms.
Furthermore, Plaintiff argued that public policy favored excluding settling defendants from jury verdict forms because, to allow otherwise, would decrease settlements. Plaintiff claimed that plaintiffs would be faced with the choice of foregoing settlement in order to avoid facing the "empty chair defense" from defendants at trial to show that the settling defendant was not more at fault than the non-settling defendants.
The First District, despite its decision in Ready, acknowledged the split of authority on this issue and noted Presiding Justice Hoffman's concurrence in Ready regarding Section 2-1117's lack of clarity and his opinion that public policy could have supported a decision either way. Therefore, in Yoder, the First District decided to adopt the Blake decision that a settling defendant loses its status as a "defendant sued by the plaintiff" for fault apportionment purposes under Section 2-1117. The First District acknowledged that the legislature's amendments to Section 2-1117 in 2003 did not modify the phrase "defendants sued by the plaintiff." The First District presumed the legislature's awareness of the Blake decision and interpreted the legislature's failure to modify the language of Section 2-1117 as the legislature's acceptance of Blake's interpretation of Section 2- 1117. Yoder, 2008 Ill. App. LEXIS 186, at *51.
However, the argument still exists that the 2003 amendment to Section 2-1117 did nothing more than prevent a plaintiff's employer from being considered for fault apportionment and the legislative purpose of protecting minimally responsible defendants from paying entire damages remained unaffected by the amendment. Skaggs, 355 Ill. App. 3d at 1120.
The Yoder decision resulted in unfairness to the remaining, non-settling defendants because Scott, who arguably bore the majority of the fault for the accident, was able to escape paying his equitable portion of the $38.3 million verdict just because he entered into a settlement agreement for his policy limits before trial for just $469,000. However, on the other hand, for example, if Scott was included on the jury verdict form and the jury apportioned 80% of the fault to Scott and only 5% to each of the four non-settling defendants, then the four non-settling defendants would only have to pay 5% of $38.3 million judgment after reduction by Scott's $469,000, or $1,891,000 each. In this instance, Scott's inclusion on the jury verdict form would result in plaintiff Jerelyn being severely under-compensated when compared to the actual judgment.
It is important to note that at the time the First District decided Yoder, the Illinois Supreme Court had taken the appeal of Ready under advisement. Clearly, the First District's decisions in Yoder and Heupel are contradictory and hopefully the Illinois Supreme Court's future decision in Ready will help clarify much of the confusion. Although Ready was decided based upon the pre-amendment version of Section 2-1117, it is anticipated that the supreme court's decision and analysis will be applicable to the facts of Yoder and Heupel because neither case involved a defendant who was also the plaintiffs' employer, the very issue the 2003 amendment intended to address.
* * *
Alexis Widlak, an associate in our Chicago office, concentrates her practice in general civil litigation. Prior to joining Querrey & Harrow, she served as Judicial Clerk to Honorable Sebastian T. Patti in the Circuit Court of Cook County and worked as a prosecutor with the City of Chicago Department of Law where she gained invaluable courtroom exposure while trying cases in the Municipal Prosecutions Division. If you have any questions regarding this article, please contact Alexis via awidlak@querrey.com, or via 312-540-7614.
