Illinois Supreme Court Requires Plaintiff to Apportion Settlements Among Successive Tortfeasors

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1 Illinois Supreme Court Requires Plaintiff to Apportion Settlements Among Successive Tortfeasors By: Joseph B. Carini III & Catherine H. Reiter Cole, Grasso, Fencl & Skinner, Ltd. Illinois Courts have long recognized that a plaintiff is entitled to only one satisfaction for an injury and any damages which may be awarded are properly reduced by all prior settlements received for the same injury. Dial v. City of O Fallon, 81 Ill.2d 548, 411 N.E.2d 217, 222 (1980). In a recent decision, the Illinois Supreme Court has taken this principle a step further by placing the burden upon the plaintiff to clearly apportion settlement proceeds where plaintiff has suffered separate and distinct injuries as a result of the negligence of multiple tortfeasors. If plaintiff fails to clearly apportion settlement proceeds, any damages which may be awarded against a nonsettling tortfeasor will be reduced by the full amount of all unapportioned settlements. Patton v. Carbondale Clinic, S.C., 161 Ill.2d 357, 641 N.E.2d 427 (1994). In Patton, plaintiff s minor daughter was a passenger in an automobile accident in which she suffered abdominal injuries. Plaintiff filed three separate lawsuits seeking damages from multiple tortfeasors for her daughter s injuries, death and related medical and funeral expenses. Plaintiff s first lawsuit was filed against the driver of the automobile and sought damages for her daughter s pain and suffering, death, medical expenses and funeral expenses. Plaintiff settled with the driver for $100,000 and executed a release of all claims against the driver for loss of services, personal injuries, wrongful death and any damages flowing therefrom. No allocation of the settlement proceeds was made. Plaintiff then filed a second lawsuit against the automobile manufacturer alleging that the lap belts which had restrained her daughter during the collision were unreasonably dangerous. Again, the complaint alleged damages for the daughter s personal injuries, death and medical and funeral expenses. Plaintiff settled with the automobile manufacturer for an undisclosed amount of money. Plaintiff executed a release of all claims, causes of action and damages arising from the injuries sustained as a result of the automobile accident but expressly reserved her cause of action for medical negligence against the clinic and its employees. Plaintiff stipulated in the release that the medical negligence was the cause of her daughter s death and that the prospective medical defendants were not joint tortfeasors with any other defendant. Again, no allocation was made of the settlement funds. Plaintiff subsequently filed a third cause of action against the Carbondale Clinic for the medical negligence of its employees in treating her daughter following the accident. The complaint again sought damages for the daughter s pain and suffering, wrongful death and funeral expenses. A directed verdict was entered for the plaintiff and against the Clinic on liability. A jury awarded damages to the plaintiff in the amount of $700,000; $600,000 for wrongful death, $75,000 for pain and suffering, $18,598 for miscellaneous future contributions and $6,402 for funeral expenses. The defendant filed a motion requesting a reduction of the verdict in the amount of the two prior settlements with the automobile driver and manufacturer. The trial court denied the set off finding that the present action for medical negligence sought to compensate plaintiff for an injury which was separate and distinct from the injury caused by the two previous tortfeasors. As a result, the trial court found that plaintiff was entitled to separate recoveries for each injury and defendant was not entitled to a set off. The appellate court affirmed the trial court. Defendant appealed to the Illinois Supreme Court arguing that there was only one injury, plaintiff s death, and that the Clinic was a joint tortfeasor with the automobile driver and manufacturer such that the defendant Clinic was entitled to a set off in the amount of the prior settlements. The Supreme Court agreed with the trial and appellate courts that the decedent suffered two separate and distinct injuries and plaintiff could receive separate recoveries for each. The two injuries were: 1) the transected jejunum caused by the automobile accident and 2) the injuries and death caused by the failure to timely diagnose the transected jejunum. The Supreme Court also agreed that the defendant Clinic was not a Page 1 of 5

2 joint tortfeasor with the automobile driver and manufacturer but was a successive tortfeasor liable only for the damages caused by the failure to diagnose the transected jejunum. However, the Supreme Court reversed the lower courts on the issue of set off. The Supreme Court found that the prior settlements were ambiguous and appeared to have compensated plaintiff for damages caused by the negligent medical care (e.g., hospitalization expenses, wrongful death damages and funeral expenses). Thus, the Court held that the Clinic was entitled to a reduction of the verdict to the extent that the prior settlements compensated plaintiff for damages resulting from the second injury. The court cited its decision in Dial v. City of O Fallon, 81 Ill.2d 548, 411 N.E.2d 217, 222 (1980), in which the Court held that a plaintiff is entitled to only one recovery for each injury. The Court also cited the Joint Tortfeasors Contribution Act despite the finding that defendant was not a joint tortfeasor. The Court explained that it had previously held that the Joint Tortfeasors Contribution Act is not limited to joint tortfeasors but may also be applied to concurrent and successive tortfeasors. Doyle v. Rhodes, 101 Ill.2d 1, 12 (1984). The Court noted the language of the Act which states that it applies to one or more persons liable in tort and not just joint tortfeasors. The set off provision of the Act states that a release given in good faith to one tortfeasor reduces the recovery against another tortfeasor to the extent of any amount stated in the release or the amount of consideration actually paid for the release, whichever is greater. 740 ILCS 100/2(C). The Court looked to the releases in each of the prior settlements to determine the extent of the set off. Upon review of plaintiff s settlement with the automobile driver, it was clear that plaintiff had been compensated for both the personal injuries sustained in the accident (transected jejunum) as well as the damages caused by the failure to diagnose that injury. Therefore, the Court concluded that the defendant was clearly entitled to a set off of the amount paid for the failure to diagnose and resulting death. However, because the settlement had not allocated the amounts paid for each injury, the Court found it impossible for the trier of fact to determine in the present case what the amount of the set off should be. The Court determined that the defendant should not bear the burden of plaintiff s failure to allocate the prior settlement and thus held that defendant was entitled to a set off in the full amount of the prior settlement with the driver. In plaintiff s lawsuit with the automobile manufacturer, the settlement release indicated that the money was paid to plaintiff only for the first injury and not the second. However, plaintiff s complaint had sought damages for both and the manufacturer was expressly released for both injuries. Unable to determine what consideration the manufacturer paid for the release of the second injury, the Court followed the language of the Joint Tortfeasor Contribution Act which provides that a defendant is entitled to a set off of the amount allocated in the release for the injury or the consideration paid for the release, whichever is greater. Based upon this, the Court concluded that the defendant was entitled to an offset of the total amount of consideration paid for the release. The Court supported its holding by noting that it was plaintiff s choice to file separate lawsuits and the nonsettling defendant was not a party to those prior proceedings. The Court further noted that the plaintiff was in a position to avoid this problem if the settlement agreements had been properly drawn to apportion the funds received for each injury. In this case, the policy of protecting a nonsettling defendant s financial interest and limiting plaintiff to only one recovery for the same injury outweighed any negative impact upon the settlement process. Therefore, the nonsettling defendant was entitled to receive a set off of the total amount paid to the plaintiff in the prior settlements. Although the Patton decision resulted in the Supreme Court s protecting a nonsettling defendant s financial interest, the opinion indicates that the plaintiff s attorney could have avoided a set-off with a differently worded release. Had the plaintiff attributed some money to the settlement of the wrongful death claims under either action, the Supreme Court would have allowed a set off of only those proceeds attributed to said claims. This allows plaintiffs to be creative with the apportionment of settlement proceeds so as to broaden the available recovery from nonsettling parties. Defense attorneys should take care to insure that they are aware of any and all settlements and pending suits throughout the course of discovery. Interrogatories and Requests to Produce should include standard requests for the disclosure of other pending and previously resolved suits and claims. Defense attorneys should insist upon the production of all releases signed by the plaintiff from the date of the accident to the date discovery is issued, and Page 2 of 5

3 should include a request that the plaintiff supplement its answer to said request throughout the course of the suit. Defendants should object to good faith settlement findings where settling parties are apportioning settlement proceeds to one s detriment. Conducting a computer search of the plaintiff, by name, in the Daley Center computer system and collar counties should reveal any pending or previously filed suits. Such a search should be conducted as a matter of course upon opening any new file. Those cases revealed through the computer search should be reviewed with special care taken to note the language of the claim in the plaintiff s complaint, and the disposition of the claim. This information will be useful for issuing initial or supplemental discovery, and may shed some light upon any set off to which a non- settling defendant is entitled. Finally, defense attorneys should draft releases as broad as possible to protect the settling entity s interests. An improperly worded release could subject a settling entity to future action arising out of the same incident, while a broad release should eliminate this possibility and might benefit nonsettling defendants in the future as well. Further, where a plaintiff s attorney wishes to apportion a settlement, care should be taken to insure that the settling entity is protected from future claims while fairly and properly apportioning the settlement proceeds. Varelis v. Northwestern Memorial Hospital, Wrongful Death Filing After Judgment in Personal Injury Suit By: Mark R. Karpus Craig & Craig, Mattoon The First District Appellate Court reversed a summary judgment for the defendant finding that a wrongful death action can be maintained by the administrator of the decedent s estate despite the fact that the decedent and his spouse maintained a personal injury action (with an accompanying consortium claim) arising out of the same transaction and occurrence while the decedent was alive and both recovered a judgment from the defendant. Varelis v. Northwestern Memorial Hospital, 266 Ill.App.3d 578 (1st Dist. 1994). Summary of the Case The plaintiffs (husband and wife) initiated this lawsuit for personal injuries and loss of consortium as a result of an alleged magnesium sulfate overdose administered to the husband on July 5, 1987 while in the defendant hospital. With respect to the consortium claim, the jury was instructed that damages for loss of consortium should only be awarded for that period of time that the husband was likely to live. The jury returned a verdict in favor of the husband on his personal injury claim in excess of $2,000,000, and for the wife on her consortium claim for almost $600,000. During the pendency of the post-trial motions, the husband died. The judgment was eventually satisfied as to both of the plaintiffs. In the satisfactions there was language as follows: In releasing the judgment of December 14, 1988, plaintiff reserves all rights, if any, to pursue a wrongful death claim, which rights defendant denies that plaintiff has. On July 3, 1989, plaintiffs filed a wrongful death action against Northwestern. Defendant filed a motion to dismiss which asserted that since a judgment had been entered and satisfied in the personal injury action against the hospital, the decedent s dependents could not prosecute a wrongful death action arising out of that same transaction and occurrence. The defendant s motion was denied. Defendant s attempt to seek Page 3 of 5

4 reconsideration was also unsuccessful. In fact, the circuit court even denied certifying the question under Rule 308. After the unsuccessful attempt at seeking certification under Rule 308, the parties filed cross-motions for summary judgment. The plaintiffs motion attached a copy of the death certificate and an affidavit from a hematologist which stated that the magnesium overdose was a proximate cause of the decedent s death. The trial court allowed the defendant s motion for summary judgment and denied the plaintiffs cross-motion since the plaintiffs had failed to file an affidavit establishing the cause of death. The First District Appellate Court affirmed the order denying summary judgment in favor of the plaintiffs as the affidavit of the hematologist was not filed in a timely fashion as that filing related to the proceedings which were taking place in the personal injury action and as such the affidavit and the decedent s death certificate were stricken from the record on appeal. With respect to the defendant s motion for summary judgment, on appeal, the defendant argued that the plaintiffs were essentially looking for a double recovery there could be no satisfaction of a judgment for the plaintiffs on a personal injury action and then have the representative of the decedent s estate and the beneficiaries file a wrongful death action arising out of that same transaction and occurrence. Despite this argument, the First District reversed the circuit court s order granting summary judgment in favor of the defendant. The Appellate Court drew distinctions between survival actions (for the benefit of the decedent while the decedent is alive) and wrongful death actions (which allow the beneficiaries of the decedent to recover damages for the decedent s wrongful death). The Appellate Court found all of the defendant s authorities distinguishable and relied primarily on the purposes of a survival action versus a wrongful death action noted above. The defendant also argued that the wrongful death action was merged into the personal action, citing Tunnell v. Edwardsville Intelligencer, Inc., 99 Ill.App.2d 1 (5th Dist. 1968), reversed on other grounds, 43 Ill.2d 239 (1969). However, the Appellate Court distinguished between the defamation action filed in Tunnell and the wrongful death action filed in this particular case since the defamation action was purely personal to the defamed party. Finally, in the face of the defendant s argument about a double recovery, the Appellate Court indicated that the defendant could use the affirmative defense of collateral estoppel if the plaintiffs are seeking damages which have already been litigated in the personal injury action. Comment Some very interesting problems are raised by the First District s decision in Varelis. Generally, if an injured party has a personal injury claim which is settled, the release will not only include general language releasing the injured party s claim but also any consortium claim which might or could have been filed as a result of the same transaction and occurrence. In this particular situation, the spouse of the injured party has a viable claim. However, in drafting releases for the type and kind of situation which developed in Varelis, the drafted release would not only release the injured party s personal injury claim and any consortium claim, but, if there is some suggestion that the injured party may die as a result of his or her injuries, there would also need to be a release from the representative of the estate of the injured party (despite the fact that the injured party is still alive), as well as a release of any claim any beneficiaries would have under the Wrongful Death Act. This would be true despite the fact that these people (the potential claimants under a wrongful death action) are not parties to the personal injury action. The Appellate Court s proposed solution to the double recovery argument does not provide a complete solution to the problem. If, as in Varelis, the spouse of the injured party received a large verdict on the personal injury action of her husband which was satisfied, then perhaps the affirmative defense of collateral estoppel might be of some benefit in the spouse s subsequent wrongful death action. However, if there are others who could recover under the wrongful death action who were not parties to the original personal injury Page 4 of 5

5 action, then it would appear the defendant would be back to square one with respect to having to defend a wrongful death action without the affirmative defense of collateral estoppel available to it and having already satisfied a judgment or settled the underyling personal injury action. The Supreme Court allowed Northwestern s Petition for Leave to Appeal on December 6, 1994 in Varelis. The Petition for Leave claims that there is a direct conflict with the Fourth District s case of Kessinger v. Grefco, Inc., 251 Ill.App.3d 980 (4th Dist. 1993), appeal denied, 154 Ill.2d 56 (1994). It is interesting to note that the First District s opinion in Varelis at no point mentions the Kessinger case. Page 5 of 5

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