Number 2 and Monograph - Illinois Association of Defense Trial

Transcription

IDC Quarterly
Second Quarter 2006
Second Quarter 2006
FEATURED ARTICLES
Volume 16, Number 2
IDC Approves Statement
of Core Values
Page 8
ISSN-1094-9542
Spring 2006
IDC
Examination Under Oath,
“Looks Like a Dep ...
Walks Like a Dep ...
But It’s Not Just
Another Deposition
Page 32
MONOGRAPH
The “Frequent Trespass”
Doctrine – A Rule
of Law Whose
Time has Passed?
The Illinois Association of
Defense Trial Counsel
Law, Equity, Justice
1
Illinois Association of
Defense Trial Counsel
IDC QUARTERLY EDITORIAL BOARD
Linda J. Hay, Editor-In-Chief
Alholm, Monahan, Klauke, Hay & Oldenburg, L.L.C., Chicago
[email protected]
WWW.IADTC.ORG
PRESIDENT
GLEN E. AMUNDSEN
O’Hagan, Smith & Amundsen, L.L.C.,
Chicago
PRESIDENT-ELECT
STEVEN M. PUISZIS
Hinshaw & Culbertson, Chicago
1ST VICE PRESIDENT
JEFFREY S. HEBRANK
Burroughs, Hepler, Broom, MacDonald, Hebrank & True, LLP, Edwardsville
2ND VICE PRESIDENT
GREGORY L. COCHRAN
McKenna Storer, Chicago
SECRETARY/TREASURER
RICK HAMMOND
Johnson & Bell, Ltd., Chicago
Joseph G. Feehan, Executive Editor
Heyl, Royster, Voelker & Allen, Peoria
[email protected]
Kimberly A. Ross, Associate Editor
Cremer, Kopon, Shaughnessy & Spina, Chicago
[email protected]
Al J. Pranaitis, Assistant Editor
Hoagland, Fitzgerald, Smith & Pranaitis, Alton
[email protected]
William K. McVisk, Assistant Editor
[email protected]
DIRECTORS
DAVID M. BENNETT
Pretzel & Stouffer, Chtrd., Chicago
TROY A. BOZARTH
Burroughs, Hepler, Broom, MacDonald, Hebrank & True, LLP, Edwardsville
C. WM. BUSSE, JR.
Busse & Busse, P.C., Chicago
ANDREW D. CASSIDY
Cassidy & Mueller, Peoria
JANELLE CHRISTENSEN
Tressler, Soderstrom, Maloney & Priess, Chicago
DANIEL K. CRAY
Iwan Cray Huber Horstman &
Van Ausdall, LLC, Chicago
PATRICK C. DOWD
Dowd and Dowd, Chicago
BARBARA FRITSCHE
Rammelkamp Bradney, Jacksonville
R. HOWARD JUMP
Jump and Associates, P.C., Chicago
DAVID H. LEVITT
Hinshaw & Culbertson, Chicago
KEVIN J. LUTHER
Heyl, Royster, Voelker & Allen, Rockford
JOHN P. LYNCH, JR.
Cremer, Kopon, Shaughnessy & Spina, Chicago
MATTHEW J. MADDOX
Quinn, Johnston, Henderson & Pretorius, Springfield
FRED B. MOORE
Lawrence, Moore, Ogar & Jacobs, Bloomington
ANNE M. OLDENBURG
Alholm, Monahan, Klauke, Hay
& Oldenburg, L.L.C., Chicago
MICHAEL RESIS
O’Hagen, Smith & Amundsen, Chicago
ALEEN R. TIFFANY
Aleen R. Tiffany, P.C., Crystal Lake
KENNETH F. WERTS
Craig & Craig, Mt. Vernon
EXECUTIVE DIRECTOR
Shirley A. Stevens
PAST PRESIDENTS: Royce Glenn Rowe - James Baylor - Jack
E. Horsley - John J. Schmidt -Thomas F. Bridgman - William J.
Voelker, Jr. - Bert M. Thompson - John F. Skeffington - John G.
Langhenry, Jr. - Lee W. Ensel - L. Bow Pritchett - John F. White - R.
Lawrence Storms - John P. Ewart - Richard C. Valentine - Richard
H. Hoffman - Ellis E. Fuqua - John E. Guy - Leo M. Tarpey - Willis R. Tribler - Alfred B. LaBarre - Patrick E. Maloney - Robert V.
Dewey, Jr. - Lawrence R. Smith - R. Michael Henderson - Paul
L. Price - Stephen L. Corn - Rudolf G. Schade, Jr. - Lyndon C.
Molzahn - Daniel R. Formeller - Gordon R. Broom - Clifford P.
Mallon - Anthony J. Tunney - Douglas J. Pomatto - Jack T. Riley,
Jr. - Peter W. Brandt - Charles H. Cole - Gregory C. Ray - Jennifer
Jerit Johnson - Stephen J. Heine
The IDC Quarterly is the official publication of the Illinois Association of Defense
Trial Counsel. It is published quarterly as a service to its members. Subscriptions
for non-members are $75 per year. Single copies are $20 plus $2 for postage and
handling. Requests for subscriptions or back issues should be sent to the Illinois
Association of Defense Trial Counsel headquarters in Springfield, Illinois. Subscription price for members is included in membership dues.
COLUMNISTS
Glen E. Amundsen
O’Hagan, Smith & Amundsen, L.L.C., Chicago
Edward J. Aucoin, Jr.
Pretzel & Stouffer, Chartered, Chicago
Beth A. Bauer
Burroughs, Hepler, Broom, MacDonald,
Hebrank & True, LLP, Edwardsville
James K. Borcia
Tressler, Soderstrom, Maloney & Priess, Chicago
Michael C. Bruck
Crisham & Kubes, Ltd., Chicago
Roger R. Clayton
Stacy Dolan Fulco
Cremer, Kopon, Shaughnessy
& Spina, LLC, Chicago
Brad A. Elward
Linda J. Hay
& Oldenburg, L.L.C., Chicago
Bradford B. Ingram
Kevin J. Luther
Heyl, Royster, Voelker & Allen, Rockford
John L. Morel
John L. Morel, P.C., Bloomington
Martin J. O’Hara
Quinlan & Carroll, Ltd., Chicago
James W. Ozog
Wiedner & McAuliffe, Ltd., Chicago
Robert T. Park
Snyder, Park & Nelson, P.C., Rock Island
Michael L. Resis
O’Hagan, Smith & Amundsen, L.L.C., Chicago
Kimberly A. Ross
Cremer, Kopon, Shaughnessy
& Spina, LLC, Chicago
Willis R. Tribler
Tribler Orpett & Meyer, P.C., Chicago
CONTRIBUTORS
Gregory L. Cochran
McKenna Storer, Chicago
Stephen J. Heine
Rick Hammond, CLU
Michael E. Kujawa
Judge, James & Kujawa, Park Ridge
THE ILLINOIS ASSOCIATION OF DEFENSE TRIAL COUNSEL
P.O. Box 7288 • Springfield, IL 62791
800-232-0169 • 217-636-7960 • FAX 217-636-8812
[email protected]
SHIRLEY A. STEVENS, Executive Director
TONYA M. VOEPEL, Publications Manager
215 E. Adams • Springfield, IL 62701
217-753-2603 • FAX 217-753-2602
[email protected]
In This Issue
Lead Article
Monograph M-1
The “Frequent Trespass” Doctrine – A Rule of Law Whose Time has Passed?
Section 3-102(a) of the Tort Immunity Act – How Much Immunity Did the
Legislature Intend?, by Michael Kujawa
Featured Article 8
IDC Board Approves Statement of Core Values, by Gregory L. Cochran
and Stephen J. Heine
32 Examination Under Oath, “Looks Like a Dep ... Walks Like a Dep ...
But It’s Not Just Another Deposition, by Rick Hammond, CLU
Regular Columns
56
Alternative Dispute Resolution, by John L. Morel
57 Amicus Committee Report, by Michael L. Resis
59 Appellate Practice Corner, by Brad A. Elward
23 Case Note, by Robert T. Park
25
Civil Rights Update, by Bradford B. Ingram
60 Commercial Law, by James K. Borcia
61
The Defense Philosophy, by Willis R. Tribler
5 Editor’s Note, by Linda J. Hay
16 Employment Law Issues, by Kimberly A. Ross
12 Health Law, by Roger R. Clayton
27 Medical Malpractice, by Edward J. Aucoin, Jr.
6
IDC Candidates for the Board of Directors
62
IDC New Members
63
IDC Spring Seminar Photos
4
President’s Message, by Glen E. Amundsen
49 Product Liability, by James W. Ozog
53 Professional Liability, by Martin J. O’Hara
39 Recent Decisions, by Stacy Dolan Fulco
37 Technology Law, by Michael C. Bruck
46 Supreme Court Watch, by Beth A. Bauer
14 Workers’ Compensation Report, by Kevin J. Luther
Manuscript Policy
Members and other readers are encouraged to submit manuscripts for possible publication in the IDC Quarterly, particularly articles of practical use to defense
trial attorneys. Manuscripts must be in article form. A copy of the IDC Quarterly Manuscript Guidelines is available upon request from
The Illinois Association of Defense Trial Counsel office in Springfield, Illinois. No compensation is made for articles published, and no article will be
considered that has been submitted simultaneously to another publication or published by any other publication. All articles submitted may be subjected to editing
and become the property of the IDC Quarterly, unless special arrangements are made.
Statements or expression of opinions in this publication are those of the authors and not necessarily those of the Association or Editors.
A copy of the IDC Quarterly Editorial Policy is available upon request. Letters to the Editor are encouraged and welcome, and should be sent to the
Illinois Association of Defense Trial Counsel headquarters in Springfield.
Editors reserve the right to publish and edit all such letters received and to reply to them.
IDC Quarterly, Second Quarter, 2006, Volume 16, No. 2. Copyright © 2006 The Illinois Association of Defense Trial Counsel. All rights reserved. Reproduction in whole or in
part without permission is prohibited. POSTMASTER: Send change of address notices to IDC Quarterly, The Illinois Association of Defense Trial Counsel,
P.O. Box 7288, Springfield, IL 62791. Second-Class postage paid at Springfield, IL and additional mailing offices.
This publication was printed by Gooch & Associates, Springfield, Illinois.
IDC Quarterly
President’s Message
By: Glen E. Amundsen
O’Hagan, Smith & Amundsen, L.L.C.
Chicago
Getting By With A Little
Help From My Friends
This is the last opportunity that
I have to address the membership
in the capacity of President. In that
context, I find myself reflecting on
the attributes of the IDC that, in my
experience, capture the essence of this
organization and why it has meant so
much to me. Also, I feel compelled to
make the pitch one last time about where I believe we need to
be headed in the future. As the title above implies, I hope you
will also allow me to use this space to recognize some people
who have made this year such a pleasure for me as President
and a successful one for the IDC. So, although there are many
important issues to comment on, I hope you will join me in
some deserved accolades for those who have really made this
year great.
First, let’s turn to the thanks and commendations.
Shirley Stevens is now completing her 16th year as our
Executive Director. In that time she has served the organization with tremendous skill, dedication and loyalty. She has
supported and helped guide 16 Presidents now – each with
their own foibles and skills. Somehow she has kept us all on
track and moved this train forward with her own brand of
humor, affection and persistence. I am personally indebted
to her for her support and friendship over the years and for
all she has done for the IDC.
This year our major continuing education events were
well-planned, well-executed, well-attended and profitable as
well. I owe many thanks for the trusted leadership of our Fall
Seminar Chair, Aleen Tiffany, the Co-Chairs of our Rookie
Seminar Paige Neel and Sarah Kennedy, the Chair of our
Trial Academy, Keith Fruehling and the Chair of our Spring
Defense Tactics Seminar, Mark Hansen. It was a pleasure to
work with every one of these dedicated people. Their efforts
continue the legacy of unsurpassed continuing education and
professional development opportunities for our members.
4
Linda Hay has served as Editor–in-Chief of our Quarterly
journal this year. She has received deserved compliments
for the superior content and appearance of this publication.
Only those who have edited this publication can appreciate
the hours of time devoted, the difficult decisions and policy
matters encountered and the commitment required to continue
the tradition of making this the best legal publication of any
state or local defense organization in the country. She has been
ably assisted by a great group of editors and, perhaps most
importantly, by our Publications Manager, Tonya Voepel. I
know that Tonya and Linda have worked tirelessly and very
closely over the year. I join with Linda in acknowledging
Tonya’s continued contribution to making the Quarterly a
premier legal journal.
I owe a tremendous debt of gratitude to the past Presidents
that I have served with as an officer, namely Chuck Cole,
Greg Ray, Jennifer Johnson and most especially Steve
Heine. From each of these persons I have observed their
own brand of leadership. I have seen them each motivate our
members to build a better association on the foundation of
the past successes (and some failures) that have marked our
progress for more than 40 years. I have received advice and
feedback from all of them at one time or another this year and
from my immediate predecessor in particular. I have valued
their support and assistance and have gained from watching
each do the job so well in different ways.
The Officers and Directors that I am presently serving
with have put in countless hours and have been a tremendous
sounding board and resource for me during this year. Our
Executive Committee, Steve Puiszis, Jeff Hebrank, Greg
Cochran and Rick Hammond have done a tremendous job in
a year that was full of activity, and some surprises that required
extra duty. You should be proud of every one of these fine
people who will each be taking their turn in the President’s
chair in the coming years. The future is in good hands with
them.
Of course, there are too many deserving contributors to
our collective success to thank everyone in this column. I
will try to do that in person as time and circumstances permit.
Suffice it to say that like any good organization our strength
comes from the commitment of our members who believe in
the mission and vision of what we do. The IDC is blessed in
that way.
Now that the accolades have been given, let me use this
bully pulpit one last time to emphasize what makes the IDC
such a worthwhile organization and to show what I believe
we need to keep in mind as we go forward from here.
Considering the many competing demands on our time and
(Continued on page 62)
Second Quarter 2006
By: Linda J. Hay
& Oldenburg, L.L.C.
Chicago
Over the course of my practice,
I have been an avid reader of the
IDC Quarterly. Over that time, I
developed a great respect for those
that contributed to the Quarterly,
and knew that, with every volume, I would gain new insight and
knowledge about some aspect of the
practice of law. After I accepted the
opportunity to join the Quarterly’s
Editorial Board, I gained a far better
understanding and respect for the quality and commitment
of those whose efforts make the IDC Quarterly a premier
legal journal. As I complete my term as Editor-in-Chief, I can
attest personally that the IDC Quarterly is the voice of the
defense bar in Illinois, which serves the collective business
and professional interests of its members. Those members, the
authors and contributors, are, as exemplified by their writings,
Illinois’ preeminent defense lawyers.
In this volume of the Quarterly, Greg Cochran and Steve
Heine have set forth the core values of the IDC. These values
are those that remain inherent in and through the articles and
columns published in the Quarterly. The IDC has taken great
strides to develop a long term vision to carry this organization into the future and to make it the best it can be. Glen
Amundsen has helped to develop the long range plan for the
organization and has, in his President’s message, helped to
rally the troops to move ahead within those core values, with
both a long range vision and a plan of action.
You will also find an excellent article from my predecessor, Rick Hammond. In his article, Rick provides some
sage advice to anyone dealing with examinations under oath.
Rick addresses this topic from both a historical and practical perspective. Yet another pertinent topic is addressed in
the Monograph, that of the “frequent trespasser” doctrine in
connection with the Tort Immunity Act. In the monograph,
Michael Kujawa provides an insightful analysis of the statutory, common law and policy rationale behind this doctrine.
QUARTERLY
deadlines
Editor’s Note
Finally, the Quarterly provides a number of superb regular
columns addressing new developments in the law, ranging
from new health care legislation that impacts hospital activities, collection and billing practices, to whether heart attacks
that take place in a work environment are covered under the
Workers’ Compensation Act.
It has been a pleasure serving as your Editor-in-Chief. I
could not have done this job without the dedication and assistance of my editorial board, Joe Feehan, Kimberly Ross,
Al Pranaitis, and Bill McVisk. Thank you for a job exceedingly well-done. Tonya Voepel, our publications manager, has
worked tirelessly to assist us in the preparation of this quality
journal. Her efforts and organizational qualities as always
have saved me immense time and effort. Shirley Stevens, as
she is to all IDC members, remains a rock for every member,
and even though not directly involved with my role on the
Quarterly, has answered many questions and devoted efforts
to making the Quarterly what it is today. Finally, thanks to
Glen Amundsen for being a guiding voice to the IDC and
Quarterly in terms of his vision for the future. He has been
truly a wonderful guiding voice to the Quarterly.
It has been a pleasure serving you, and best of luck to the
incoming editor, Joe Feehan, and the rest of the editorial
board.
June 27, 2006
Vol. 16, No. 3
September 26, 2006
Vol. 16, No. 4
December 26, 2006
Vol. 17, No. 1
March 27, 2007
Vol. 17, No. 2
5
Illinois Association of Defense Trial Counsel
CANDIDATES for the Board of Directors
2006-2007
R. HOWARD JUMP
are declared: “Cook County” and “Down-
R. Howard Jump is with the Chicago office of Jump & Associates, P.C. He received his B.A. in 1976 and J.D. in 1979 from
Mercer University. Mr. Jump practices in all areas of insurance
defense and coverage litigation with emphasis in the areas of
construction accidents and products liability. He was Chair of
the IDC’s Defense Tactics Seminar in
1995, served on the Board of Directors
the following year, and as a member
of the Insurance Law Committee, has
been a contributing author of articles on
insurance coverage issues for the IDC
Quarterly. He has served as Co-Chair
of the Long Range Planning Committee
and served two years on the faculty of
the Trial Academy. He has just completed his second three-year term on the Board of Directors. He
presently serves as Board Liaison to the Insurance Law Committee
and has worked most recently to establish committee forums on
the IDC’s website, for use by the membership. He is a member of
the American, Illinois and Chicago Bar Associations, as well as
the IDC and DRI.
state;” no more than four of the six direc-
Statement of Candidacy — R. Howard Jump
E
ight nominations have been re-
ceived to fill the six vacancies of terms
expiring June 2006. In accordance with
the bylaws of the Illinois Association of
Defense Trial Counsel these directors will
take office in June 2006. Also, according
to the bylaws the Board of Directors shall
be representative of all areas of the State
of Illinois, and to this end, two Districts
tors elected each year shall office within
the same District.
The nominations are listed in the
order in which they were received. New
Directors will be announced at the Annual
Meeting on June 16, 2006.
I am amazed at how fast my second term on the Board has
passed. I am pleased with the progress that has been made by
the Board towards making the IDC more beneficial to its members; however, we still have much to do. The Board has rapidly
responded to the recently adopted MCLE requirements and will
enhance its long tradition of educating and sharpening the skills
of defense lawyers in Illinois. The Board has undertaken an ambitious and aggressive campaign to make the organization a more
visible (and louder) “voice” of the defense bar in Illinois. New
efforts are underway to produce seminars for trade and insurance
industry associations and to enhance public relation efforts and
provide statewide exposure for the individual accomplishments
of members. I am proud to be part of a Board that recognizes that
for an organization to thrive, it must be relevant to and serve the
needs of its members. If re-elected, I plan to continue working
on projects to make membership in the IDC a valuable part of
daily practice and to speak for the small office, insurance defense
practice. I encourage everyone to visit the IDC’s website and use
the bulletin board forums to communicate ideas and opinions on
the law, the defense practice, the judiciary and the IDC.
FRED B. MOORE
Fred B. Moore is a partner in the Bloomington law firm of
Lawrence, Moore, Ogar & Jacobs. He is a graduate of Eastern
Illinois University and the University of Illinois College of Law.
Mr. Moore concentrates his practice in civil and appellate litigation
with an emphasis on insurance defense.
His practice is in state and federal courts
throughout central Illinois. He is a member of the McLean County and Illinois
State Bar Associations.
Mr. Moore has served two threeyear terms as a member of the Board
of the IDC and was a member of the
IDC Trial Academy Committee for 14
years, serving as the IDC Trial Academy
Co-Chair and Chair. He also has been a speaker at the IDC Fall
Seminar.
Statement of Candidacy — Fred B. Moore
The IDC, along with our profession in general, is entering into
a new era. The adoption of minimum continuing legal education
requirements poses both a challenge and an opportunity for us. As
a Board, we have already begun to address those challenges and
opportunities. The Board has recently examined what we want this
organization to be, and now we are starting to implement strategies
to reach toward the goals we have identified for the IDC.
For the past six years I have served as an IDC Board member.
It is my desire to continue in that service for an additional term.
During my thirty-five years of practice I have seen the IDC grow
and mature and become one of the finest professional organizations
in the country. The programs and publications of the IDC are high
quality and something of which we can all be proud.
We all can participate in the continuing development of our
profession. I know the sharing of ideas and experiences has helped
the growth and development of the skills and abilities of attorneys
throughout the state. It is my hope that I can further this organization’s growth and continued excellence as a member of the Board
of Directors.
JOHN P. LYNCH, JR.
John P. Lynch, Jr. is a partner in the law firm of Cremer, Kopon, Shaughnessy & Spina, LLC. He received his B.B.A. from
St. Norbert College in 1985 and his J.D. from DePaul University
in 1988. His practice is concentrated
in the defense of construction, product
liability and commercial matters. His
trial experience includes the defense of
catastrophic injury, complex commercial
and wrongful death suits. He is a member of the Defense Research Institute and
the IDC. From 1996 through 2002, Mr.
Lynch served on the IDC’s Fall Confer-
ence Committee and chaired the 2002 Fall Conference. From
1996 through 2005, he authored the “Recent Decisions Column”
of the IDC Quarterly. Mr. Lynch was elected to the IDC Board
of Directors in 2003.
Statement of Candidacy — John P. Lynch, Jr.
I am seeking a second term on the IDC Board of Directors.
My service on the Board over the past three years has confirmed
my view that the IDC is critical to defense and business interests in the State of Illinois. This organization works tirelessly
to bring fairness to our court system, educate our membership
and appropriately advance the interests of our clientele. In recent
months, the Board, along with committee chairs and other active
members, have begun an effort to increase the profile of the IDC,
expand business development opportunities for our membership
and provide a variety of opportunities for compliance with Illinois’ new continuing legal education requirements. These efforts
have been, and will continue to be, successful and will ensure
that the IDC is not only an excellent source for education but also
a source for business and professional growth. I am pleased to
say that I have played a role in this effort and hope to continue
this work in a second term.
DAVID H. LEVITT
David H. Levitt is a partner in the Chicago office of Hinshaw
& Culbertson LLP. He is a 1979 graduate of Loyola University
of Chicago Law School, and received his L.L.M. in Intellectual
Property from John Marshall Law School in 2000.
Mr. Levitt’s practice is varied, but
concentrates in the areas of intellectual
property, insurance coverage, and tort
defense (including trucking defense,
product liability and fire losses). His
practice is national in scope.
Mr. Levitt is a member of the Board
of Directors of the Illinois Association of Defense Trial Counsel. He has
served as Editor-in-Chief of the IDC Quarterly, and is active
in several other professional organizations and committees,
including editorial boards, in the areas of intellectual property
and tort law. Among others, he was one of the founders of the
Trucking Industry Defense Association. Having participated in
training in mediation from the faculty of Pepperdine University
School of Law’s Straus Institute for Dispute Resolution, he is a
Certified Mediator in the Cook County Court-Annexed Major
Case Civil Mediation Program.
Statement of Candidacy —David H. Levitt
I am seeking re-election to the Board of the Illinois Association of Defense Trial Counsel, having just finished my first term
in that position. I believe that the IDC is doing good work, and
that it is moving in the direction of doing even better work.
With the advent of mandatory continuing education, the IDC has a
special role to play in assisting all Illinois attorneys, and especially
defense attorneys, in meeting their obligations with ever-better
CLE programming. Additionally, the IDC continues to recognize
its unique role in promoting the defense perspective on the issues
facing practitioners.
I believe that I have contributed to these efforts, and would like
to continue to do so. I have served as Editor-in-Chief of the IDC
Quarterly, and have regularly contributed articles to that publication. I served as Chair of the Board’s “Relevance” Committee,
by which we began the process of developing our core values, as
well as a member of the “Core Values” Committee. Now that we
have decided on those values, I want to help in pursuing them, in
making the IDC a more powerful and respected voice on those
issues which promote fairness for all parties involved in litigation.
I hope that you will give me the opportunity to assist in moving
these issues towards fruition.
JOHN W. ROBERTSON
John Robertson is a partner in the
Galesburg firm of Stoerzbach Morrison, P.C. He was admitted to practice
in Illinois in 1975 and has represented
many insureds and insurance companies
during his practice. He has served as a
member of the Illinois Supreme Court
Committee on Civil Jury Instructions
from 1979 to 1996, has been a member
of the advisory committee for Local Rules for Procedure for
the Central District of Illinois from 1994 to the present, and is
a member of the Knox County, Illinois State and American Bar
Associations. He has been a member of the Illinois Association of
Defense Trial Counsel and a member of the Appellate Lawyer’s
Association of Illinois since 1991. Mr. Robertson’s practice involves defense of both personal injury and property damage cases,
insurance coverage litigation, and general commercial litigation
in state and federal trial and appellate courts.
Statement of Candidacy — John W. Robertson
As an IDC member since 1991, I have found the publications
and seminars provided by the Association to be invaluable in my
practice. As a Galesburg practitioner, I believe I would bring a
different perspective to the Board and will work to make the Association more responsive to the needs of small firms in downstate
communities.
EUGENA A. WHITSON-OWEN
Eugena A. Whitson-Owen is a partner in the law firm of Moore, Strickland
& Whitson-Owen. She received her J.D.
in 1996 from The John Marshall Law
School. She concentrates as a trial and
appellate attorney defending toxic torts,
construction and products liability cases.
She also represents various corporate
entities, including insurance carriers,
in commercial and insurance coverage
litigation. She has successfully argued appeals before the Illinois
Appellate and United States District Courts. She is admitted to the
Illinois Bar and the United States District Court for the Northern
District of Illinois. She is also admitted to the Federal Trial Bar.
Ms. Whitson-Owen is a member of the Illinois Association of Defense Trial Counsel, Defense Research Institute and The Women’s
Bar Association of Illinois, where she chairs the annual WBAI Golf
Outing. She was an adjunct professor at The John Marshall Law
School where she taught Legal Writing and Appellate Advocacy
for three years.
Ms. Whitson-Owen has been a member of the Illinois Association of Defense Trial Counsel since 1996. She was the
co-author of the “Civil Affairs” column for the IDC Quarterly
which focused on civility in the legal profession. She served on
the 1995 Fall Seminar Committee and participated in the 2005
Long-Range Planning Committee. She currently serves with other
IDC members on the Joint Seminar Team whose primary focus
is the development of seminars with other associations that will
benefit the IDC membership.
Statement of Candidacy — Eugena A. Whitson-Owen
Ten years ago, I was fortunate to join a defense firm that valued
the opportunities provided by the IDC membership. Not only did
the partners sponsor their associates as IDC members, but they
encouraged us to take advantage of the invaluable educational
benefits provided. Indeed, the benefits of membership in the IDC
are as vital now in my practice as they were then. Recently, I had the opportunity to participate in concerted efforts
by the Board of Directors and the IDC members to enhance the
IDC mission to be the voice of the defense bar. I was pleased by
the invitation to attend the long range planning retreat held last
August where the IDC leadership met to set goals designed to further enhance the growth and development of this highly respected
defense organization. As a member of the Joint Seminar Team, we
are working on the IDC’s initiative to co-host seminars with other
associations on topics of interest to the membership.
In my career, I have learned that leadership, professional excellence and personal dedication are key to sustaining a successful
law practice. With your support, I am committed to invest these
same qualities and skills if elected as a member of the IDC Board
of Directors.
R. MARK MIFFLIN
R. Mark Mifflin received his B.A. degree, with honors, from
Western Illinois University in 1973. He received his J.D., with
honors, from the Southern Illinois University School of Law in
1978. Mr. Mifflin was admitted to the bar of Illinois in 1978 and
is admitted to practice before the United
States Supreme Court, the Supreme
Court of Illinois, the United States Court
of Appeals for the Seventh Circuit, and
the United States District Court for the
Central District of Illinois. While in law
school, Mr. Mifflin served as an Articles
Editor for the Southern Illinois University Law Journal.
Following law school, Mr. Mifflin
served as a law clerk for Judge J. Waldo Ackerman of the United
States District Court for the Central District of Illinois and as a
law clerk to Justice Robert C. Underwood of the Supreme Court
of Illinois. Following his clerkships, Mr. Mifflin served as an Assistant United States Attorney in the Central District of Illinois. Mr.
Mifflin entered the private practice of law with the Giffin, Winning
law firm in 1982. Mr. Mifflin is a member of the Sangamon County
and Illinois State Bar Associations and the Illinois Association of
Defense Trial Counsel.
Mr. Mifflin is the co-author of the Illinois Chapter of Lobbying,
PACS and Campaign Financing, 50 State Handbook (West 2006).
He has also published an article: Open vs. Closed Primaries, A
Dilemma in the Illinois Election Process, 1977 So. Ill. U.L.J. 210.
Mr. Mifflin concentrates his practice in legislative and litigation
matters. He was an Illinois legislative staff intern on the Senate
Republican staff in 1974 and 1975 and has served as a lobbyist
in the Illinois legislature since entering private practice in 1982.
Mr. Mifflin also represents clients in matters before administrative
agencies in the executive branch of government.
Statement of Candidacy — R. Mark Mifflin
I am proud to be a long-term member of the IDC. I believe
the IDC does an excellent job of providing information and
educational opportunities to enable its members to keep abreast
of issues and changes in the practice of law in Illinois. The IDC
also plays an important role in the development of law through
Illinois’ courts, including through amicus briefs on significant
issues. I do not believe, however, that the IDC is currently taking advantage of the opportunity to play a substantial role in the
legislative process. I believe that the IDC, as an organization of
defense attorneys representing business and insurance interests
throughout Illinois, is in a unique position to play a meaningful
role in the Illinois legislative process.
In my practice, I am engaged in civil litigation and I also
represent several clients as a lobbyist before the Illinois General
Assembly. If elected as a Director, I will make every effort to
encourage the Board and the members of the IDC to become more
actively involved in representing our clients’ interests before the
Illinois legislature. With the support of the Board and the IDC
membership, I believe that the IDC can make a difference. I would
appreciate your vote and your support in this effort. Thank you.
CHRISTOPHER B. BORTZ
Christopher B. Bortz is a partner in the law firm of Neville,
Richards & Wuller, LLC, in Belleville, Illinois. He is a trial and
appellate lawyer specializing in professional liability claims,
personal injury defense and general insurance defense.
Mr. Bortz earned his undergraduate
degree in history from Purdue University (B.A. 1996). He received his law
degree from St. Louis University School
of Law (J.D. 1999). Mr. Bortz is licensed
to practice in Illinois and Missouri as
well as the United States District Court
for the Southern District of Illinois.
Mr. Bortz serves as a member of
the St. Clair County Bar Association,
Madison County Bar Association, Illinois State Bar Association,
Bar Association of Metropolitan St. Louis, the Missouri Organization of Defense Lawyers and the Illinois Association of Defense
Trial Counsel. He also serves as a mentor for students at Central
School in O’Fallon, Illinois. Mr. Bortz and his family reside in
Belleville, Illinois.
Statement of Candidacy — Christopher B. Bortz
The Illinois Association of Defense Trial Counsel is an excellent organization providing the defense lawyers in Illinois with
countless opportunities to expand their knowledge and experience
in the law. I would be honored to be elected to the Board of Directors of the IDC and help continue to provide these opportunities
to the membership.
The strength of the Illinois Association of Defense Trial Counsel lies in its membership. It is important to maintain the diverse
nature of the membership and the Board of Directors. In part,
this can be accomplished by ensuring that the Directors represent
each geographical area of our state. As a member of the Board of
Directors, I would proudly represent St. Clair County and would
be one of only three Directors from south of Springfield, Illinois.
If provided with this opportunity, I will work hard and serve
actively on the Board. I feel that I can bring a unique perspective
to the Board given my age and experience and because I predominantly practice in southern Illinois. I believe my work ethic and
devotion to the practice of law make me a good fit for this position.
Thank you very much for your time and consideration. I would
certainly appreciate your vote in the upcoming election.
IDC Quarterly
Featured Article
IDC Board
Approves Statement
of Core Values
By: Gregory L. Cochran
McKenna Storer
Chicago
Stephen J. Heine
Heyl, Royster, Voelker & Allen
Peoria
Co-Leaders - IDC Core Values Team
In his President’s Message for Fourth Quarter 2005, Glen
Amundsen reported on the long range planning meeting attended last August by many past and present IDC leaders.
This meeting resulted in the adoption of specific objectives
designed to establish the IDC as the preeminent association
of defense trial attorneys and voice of the defense bar in Illinois, and to serve the business and professional interests of
its members. These objectives included the creation of a more
specific message of the IDC’s core values and dissemination of a statement of those values to the IDC members and
the public at large. We are pleased to advise that a series of
additional meetings has culminated in approval by the IDC
Board of Directors of the following Statement of Core Values
(not stated in any particular order of importance or priority):
• IDC will promote and support a fair, unbiased and
independent judiciary
• IDC will take positions on issues of significance to
the defense bar and advocate and publicize those
positions
• IDC will promote and support the fair, expeditious
and equitable resolution of disputes, including preservation and improvement of the jury system
• IDC will provide programs and opportunities for
professional development to assist members in better
serving their clients
10
• IDC
will increase its role as the voice of the defense
bar of Illinois to make IDC more relevant to its members and the general public
• IDC will support diversity within our organization,
the defense bar and the legal profession
• IDC will promote and support civility and highest
ethical standards within the legal profession
In developing this list of core values, the Board discussed
the types of action the IDC should take in furtherance of the
designated core values. For example, in order to promote and
support a fair, unbiased and independent judiciary, the Board
concluded that the IDC should promote education of the public
regarding judicial elections and evaluations, continue to support highly qualified judicial candidates, continue to support
increased funding from the State of Illinois for our circuit
courts, promote respect for the judiciary and resist efforts
to unfairly politicize the judiciary. Likewise, in taking positions on issues of significance to the defense bar, the Board
concluded that the IDC should support a system of several
liability over the current system of joint and several liability,
About the Authors
Gregory L. Cochran is a partner with McKenna Storer in
Chicago, where he heads the toxic tort practice group. He
received his B.A. from the University of Michigan in 1977
and his J.D. from the University of Michigan in 1980. He
currently serves as the IDC Second Vice President, having
served on the IDC Board of Directors beginning in 1994
and as Chairman of the IDC Defense Trial Tactics Seminar from 1993 to 1994. Mr. Cochran is also a member of
the Federation of Defense & Corporate Counsel, for which he serves as Vice
Chair of the Toxic Tort & Environmental Law Section and Vice Chair of the
Products Liability Section.
Stephen J. Heine is a partner in the Peoria firm of Heyl,
Royster, Voelker & Allen. He has tried cases in the areas of
construction, first party property claims, railroad, products
liability, professional liability, trucking and automobile. Mr.
Heine received his B.S. from Illinois State University in
1978 and his J.D. from Southern Illinois University in 1981.
He is a member of several organizations, including the
IDC, DRI, National Association of Railroad Trial Counsel,
Illinois Appellate Lawyers Association and Peoria County,
Illinois State and American Bar Associations. Mr. Heine is
also a past President of the IDC and a past Editor-in-Chief of the IDC Quarterly.
and support allocation of liability for damages based on actual
fault. In promoting and supporting the fair, expeditious and
equitable resolution of disputes, including preservation and
improvement of the jury system, the Board concluded that the
IDC should urge the Illinois Supreme Court to appoint more
defense attorneys to the IPI Committee, seek allowance of
access to all information regarding jurors summoned and excused, support initiatives by other bar associations to improve
the conduct of jury trials, support and promote voluntary ADR
in appropriate cases, promote participation of all citizens in
jury service, and support Jury Patriot Act legislation. These
are just some of the initiatives discussed by the Board.
The designated list of core values provides the IDC and its
leaders with a clear statement of our mission and a compass to
guide us in pursuing this mission. Indeed, the newly adopted
core values are strongly reflected in the President’s Message
in the IDC Quarterly, First Quarter, 2006, p. 2, entitled “The
Case Against Politicizing the Judiciary.” The core values are
likewise reflected in the IDC’s recent public stance against
the amendment of a domestic violence bill initiated in the
Illinois Senate, which converted the bill to a statutory mandate that juries not be permitted to consider any reduction in
medical costs granted by a medical care provider, and thereby
providing a windfall recovery to personal injury plaintiffs.
The Statement of Core Values defines for all IDC members
the values and objectives of our organization and hopefully
will inspire all members to become active in the IDC. By
publicizing our core values, we are telling all members of the
bar, judiciary, legislature and general public exactly who we
are and what we stand for. All of this will further the IDC’s
purpose of being the preeminent association of defense trial
attorneys and voice of the defense bar in Illinois and serving
the business and professional interests of our members.
OPPORTUNITY
to be published
Second Quarter 2006
The IDC Quarterly
Editorial Board
invites articles on a
variety of subjects.
Please direct inquiries to:
Linda Hay
IDC Quarterly Editor-In-Chief
& Oldenburg, L.L.C.
221 N. LaSalle St., #450
Chicago, IL 60601
312-704-8444
312-704-1352 Fax
E-mail: [email protected]
11
IDC Quarterly
Health Law
By: Roger R. Clayton*
Peoria
written contracts with collection agencies and attorneys that
it contracts for collection of medical debts from patients and
outlines the contract requirements.
What Benefits Will This Provide to
the Citizens of Illinois?
The legislature notes that a rising number of bankruptcies in
Illinois are directly associated with the severe financial hardship created by rising medical debts. The patients, hospitals,
and government bodies will benefit from clearly articulated
standards regarding fair billing and collection practices for
all Illinois hospitals.
What Should Practicing Attorneys Be Aware Of?
What Every Healthcare Lawyer Needs to
Know About Recent Hospital Legislation –
Illinois House Bills 4999 and 5000
The Illinois legislature is attempting to take major steps
in its effort toward patient protection. House Bills 4999 and
5000 set forth stricter limits upon hospital activities, specifically patient care, billing practices and procedure.
In addition to creating certain procedural hurdles for hospitals, the bill provides protections for medical debtors. While
the legislature appears to be working towards driving down
the number of bankruptcies in this state, the by-product may
be an effect upon healthcare’s bottom line. An attorney practicing in this area should immediately become familiar with
the requirements of this bill, since HB4999 has been passed
by the legislature and is awaiting signature by the Governor.
House Bill 4999
What Is It?
House Bill 5000
What Is It?
House Bill 4999 appears to be the Illinois Legislature’s
attempt to come to the aid of the patient amid ever-rising
medical costs. The proposed bill will effectively create the
Hospital Fair Billing and Collection Practices Act.
House Bill 5000 proposes to increase pressure upon 501(c)
(3) entities receiving tax exemptions by setting forth a baseline
for required charity care.
What Does the New Act Propose to Do?
1) This bill would require hospitals to adopt policies that
prohibit “abusive, harassing, oppressive, false, deceptive,
or misleading language or collection conduct by any entity
charged with this duty on the hospital’s behalf. (This includes:
collection agencies, attorneys retained by the hospital for
the collection of medical debt, any agent or employee of a
collection agency or attorney, or any hospital employee who
participates in the collection of medical debt from patients).
2) This bill would also ensure good behavior by hospitalaffiliated collection agencies by establishing the procedures to
be utilized by every collection agency retained by the hospital
for the collection of medical debts. The bill would establish
procedures for the submission of claims to third party payors
which prohibit hospitals from selling any debt owed to it by a
patient for medical or hospital services, except to a collection
agency. The bill would also establish hospital billing requirements whereby the hospital would be required to enter into
12
About the Authors
Roger R. Clayton is a partner in the Peoria office of
Heyl, Royster, Voelker and Allen where he chairs the firm’s
healthcare practice group. He also regularly defends physicians and hospitals in medical malpractice litigation. Mr.
Clayton is a frequent national speaker on healthcare issues,
medical malpractice and risk prevention. He received his
undergraduate degree from Bradley University and law
degree from Southern Illinois University in 1978. He is a member of the IDC,
the Illinois State Bar Association, past president of the Abraham Lincoln Inn of
Court, a board member of the Illinois Association of Healthcare Attorneys, and
the current president of the Illinois Society of Healthcare Risk Management.
* The author acknowledges the assistance of Daniel P. Hiser, a law clerk with
Heyl, Royster, Voelker & Allen in the preparation of this article.
Second Quarter 2006
What Does the New Act Propose to Do?
This bill intends to raise the threshold of care which exempt
healthcare entities must provide on a pro-bono basis. The bill
would create the Tax-Exempt Hospital Responsibility Act,
setting forth the terms under which a hospital must provide
full charity care and discounted care to Illinois residents in
order to maintain the hospital’s tax-exempt status under the
Illinois Income Tax Act, the Use Tax Act, the Service Use
Tax Act, the Service Occupation Tax Act, the Retailers’ Occupation Tax Act, and the Property Tax Code. The Bill also
amends each of those tax Acts to provide that a hospital may
qualify for an exemption from the tax imposed by the Act only
if the hospital is in compliance with the Tax-Exempt Hospital
Responsibility Act.
Technically, House Bill 5000 will require tax-exempt hospitals to furnish aggregate annual charity care in an amount
equal to at least 8% of the hospital’s total operating costs.
Oversight of this will be conducted via the Attorney General’s office, with rule making authority vested in that office.
Each tax-exempt entity will be required to submit an annual
report to the Attorney General who will be responsible for
the enforcement of the Tax-Exempt Hospital Responsibility
Act. Funds to assist in the enforcement of the Act will come
from the newly created Tax-Exempt Hospital Responsibility
Act Enforcement Fund.
The Bill will also serve to amend the Freedom of Information Act to make records of charity care applications and
determinations under the Tax-Exempt Hospital Responsibility
Act exempt from inspection and copying.
What Benefits Will This Provide to
the Citizens of Illinois?
The proposed bill in essence will set a baseline standard by
which tax-exempt entities must conduct charitable services.
Although the benefit to the public may appear obvious, one
must also examine the broader picture, namely, that an inflexible quota for charity care may pose too great a financial
burden on already cash-strapped hospitals, forcing many to
become insolvent. Thus, the Act may result in fewer hospitals
being available to the public.
What Should Practicing Attorneys be Aware of?
As this article is drafted, this bill is currently held up in
deliberations in the house. While the final draft of the bill
will certainly take on an altered form, the intent is clear, tax
exemptions for healthcare organizations come with significant
strings attached. An attorney practicing in this area should
follow the progress of this bill since it could have a drastic
impact on the financial health of hospital clients.
13
IDC Quarterly
Workers’ Compensation Report
By: Kevin J. Luther
Rockford
Appellate Court Affirms Denial
of Fatal Cardiac Event Claim
For a petitioner to obtain compensation pursuant to the
Workers’ Compensation Act, a petitioner must prove, by a
preponderance of the evidence, that he or she suffered an
injury that arose out of and in the course of his or her employment. Sisbro, Inc. v. Industrial Comm’n, 207 Ill. 2d 193,
797 N.E.2d 665, 278 Ill. Dec. 70 (2003). For a finding that an
injury “arose out of” employment, the injury must have “had
its origin in some risk connected with, or incidental to, the
employment so as to create a causal connection between the
employment and the accidental injury.” Sisbro, 207 Ill. 2d at
203. A petitioner who has a preexisting condition that makes
him or her more vulnerable to injury may obtain compensation so long as the employment was a causative factor of the
accidental injury. Sisbro, 207 Ill. 2d at 205.
In Swartz v. Industrial Comm’n, 359 Ill. App. 3d 1083, 837
N.E.2d 937, 297 Ill. Dec. 486 (3d Dist. 2005), the Illinois Appellate Court, Third District, addressed the issue of whether
a causal connection existed between the petitioner’s employment and his fatal cardiac event. In Swartz, the decedent was
53 years old at the time of his death and was employed as
an over-the-road truck driver. On February 11, 2000, he was
driving his truck on a California interstate when he suffered
some type of cardiac event, which led to his death. A witness
observed the decedent’s truck move slowly to the left lane of
the interstate and veer sharply toward the right and off the
roadway. The witness stopped to assist the decedent and found
him unconscious and not breathing.
At arbitration, the evidence presented was that the petitioner had been traveling approximately 30 miles per hour,
at night, in moderate traffic. There was a thin layer of snow
and slush covering the roadway. There is no indication that
he tried to prevent the truck from leaving the road or that he
attempted to avoid the accident by applying brakes.
14
Both the petitioner and the employer relied on expert opinions of cardiologists. Each of the experts found the presence
of severe risk factors that predisposed the decedent to the
development of a sudden and unpredictable cardiac event.
These risk factors included obesity, diabetes, hypertension,
family history, gender, and age.
The petitioner’s expert, Dr. Kamalesh, testified that although the cardiac event causing the decedent’s death could
have occurred on its own at any time, statistically it is more
likely it was precipitated by stress. Dr. Kamalesh concluded
that the decedent was under stress because he was driving.
He conceded, however, that such stress could have been the
same stress any individual would experience when driving a
vehicle. Additionally, he could not quantify the level of stress.
The employer presented Dr. Fintel, who did not believe that
the decedent’s driving exposed him to the type of stress that
could be a causal factor of a cardiac event. He determined that
the decedent’s employment bore absolutely no relationship
to his death and concluded that the death was inevitable and
would have occurred at any time with any activity.
After trial, the arbitrator issued a decision finding that the
decedent was fatally injured as a result of an accident arising
out of and in the course of his employment. The Workers’
Compensation Commission reversed the arbitrator’s decision. The Commission found that there was no indication
that because of the decedent’s employment, the decedent was
under stress greater than that to which the general public was
ordinarily exposed. The Commission specifically determined:
“If there was stress associated with decedent’s driving,***it
was legally insufficient to warrant compensation.” It noted that
the decedent’s heart condition was so far advanced that any
physical exertion on his part would have been an overexer-
About the Author
Kevin J. Luther is a partner in the Rockford firm of
Heyl, Royster, Voelker & Allen where he concentrates his
practice in areas of workers’ compensation, employer liability, professional liability and general civil litigation. He
also supervises the workers’ compensation practice group
in the Rockford office. Mr. Luther received his J.D. from
Washington University School of Law in 1984. He is a
member of the Winnebago County, Illinois State and American Bar Associations, as well as the IDC.
Second Quarter 2006
tion. The Workers’ Compensation Commission adopted the
opinions of the employer’s expert, Dr. Fintel. The circuit court
affirmed the Workers’ Compensation Commission decision.
Before the appellate court, the petitioner argued that the
Workers’ Compensation Commission’s reversal of the arbitrator’s decision was against the manifest weight of the evidence.
The appellate court noted that whether a causal connection
exists between an injury and the employment is a question
of fact for the Commission to decide, and its decision will
not be overturned unless it is against the manifest weight of
the evidence. The court also noted that the Illinois Supreme
Court previously rejected the argument that “where a causal
connection between work and a work injury has been established, it can be negated simply because the injury might also
have occurred as a result of some normal daily activity.” See
Sisbro, 207 Ill. 2d at 211; Twice Over Clean, Inc. v. Industrial
Comm’n, 214 Ill. 2d 403, 827 N.E.2d 409, 292 Ill. Dec. 880
(2005).
The appellate court reviewed the record and determined
that the Workers’ Compensation Commission decision did not
appear from the record to be erroneous. The court noted that
based on the evidence submitted at arbitration, the Workers’
Compensation Commission never found that a causal connection had been established. It determined that the Commission
did not impermissibly apply an “exception” to defeat recovery. Instead, the Commission considered appropriate factors,
weighed the evidence, and relied upon the medical testimony
it found most credible.
The petitioner filed a Petition for Leave to Appeal to the
Supreme Court of Illinois, which was recently denied. The
Swartz decision is significant for employers in the state of
Illinois who find themselves defending heart attack claims.
Following the Sisbro and Twice Over Clean decisions, advocates for petitioners in the workers’ compensation arena
argued that employers would be hard pressed to defend heart
attack claims in the state of Illinois when they occur at work.
The Swartz decision illustrates that, as in most heart attack
cases, preexisting risk factors can be accepted as the cause of
a cardiac event so as to defeat compensability.
YOU
Do
know
what
you’re
missing
?
You could be missing
out on an opportunity
to meet and work with the defense bar
throughout the State of Illinois.
Get involved with one of our
numerous committees.
Illinois Association of Defense Trial Counsel
800-232-0169 FAX 217-636-8812
www.iadtc.org
15
IDC Quarterly
Employment Law Issues
By: Kimberly A. Ross*
Cremer, Kopon, Shaughnessy & Spina, LLC
Chicago
Religious Discrimination
Company’s Refusal to Recognize any Group
Based on Religion Did Not Violate Title VII
In Moranski v. General Motors Corp., 433 F.3d 537 (7th
Cir. 2005), John Moranski brought suit against his employer,
General Motors Corp. (GM), alleging discrimination based on
his religion, in violation of Title VII of the Civil Rights Act of
1964, 42 U.S.C. §2000e, because GM refused to recognize his
Christian-based group under the company’s “Affinity Group”
program. The district court dismissed Moranski’s complaint
for failure to state a claim upon which relief could be granted.
The Seventh Circuit affirmed, holding that the GM program
treated equally all groups with religious positions.
In 1999, as an outgrowth of its efforts to support employee diversity and to improve company performance, GM
developed and instituted its Affinity Group program, which
availed company resources to recognized groups. The Affinity
Group Guidelines stated that the groups typically were based
upon aspects of common social identity that affected others’
perception of its members. Recognized groups, which were
to be open to all current, salaried, full-time employees who
shared a group’s goals, were eligible to use the company’s
equipment, facilities, and funds. GM reserved the right to approve a proposed group’s registration request, and explicitly
stated in the Guidelines that it would not recognize groups
that advocated or promoted particular religious or political
positions. GM had recognized the following Affinity Groups:
People with Disabilities, the General Motors African Ancestry
Network, GM Plus (for lesbian and gay persons), the North
American Women’s Advisory Council, the GM Mid-East/
South-East Asian Affinity Group, and the Veterans Affinity
Group.
In 2002, Moranski, a born-again Christian, applied for
Affinity Group status recognition for the “GM Christian Employee Network.” The group was to be interdenominational
16
and was not to promote any particular church or religious
denomination. GM denied the application, citing the Guideline’s preclusion of groups that advocate or promote particular
religious positions from obtaining Affinity Group status. After
the application was denied, Moranski filed a charge with the
EEOC, received a right-to-sue letter, and then filed suit in
federal court, alleging that GM had discriminated against
him on the basis of religion. The district court granted GM’s
motion to dismiss for failure to state a claim upon which relief
could be granted, and Moranski appealed.
The Seventh Circuit affirmed, noting the well-established
principle that “[t]he central question in any employmentdiscrimination case is whether the employer would have taken
the same action had the employee been of a different race
(age, sex, religion, national origin, etc.) and everything else
had remained the same.” Carson v. Bethlehem Steel Corp., 82
F.3d 157 (7th Cir. 1996). Moranski’s complaint made clear that
GM’s decision would have been the same had he maintained a
different religious position. Moranski also acknowledged that
GM had never approved an Affinity Group with a religious
position and that the Guidelines would not permit doing so.
Moranski’s position, however, was that GM’s refusal to
grant Affinity Group status to any group with a religious
position caused GM to treat “nonreligious” employees more
favorably than religious employees. The court rejected this
argument, noting that GM had never recognized any group
with a religious position, even one of religious indifference
or opposition. In fact, the Guidelines’ preclusion of groups
with any religious position would exclude groups organized
upon agnosticism, atheism, secular humanism, and even “nonreligion.” Because the Guidelines treated all religions alike
by excluding them from serving as the basis of a recognized
About the Author
Kimberly A. Ross is a partner with the law firm of Cremer,
Kopon, Shaughnessy & Spina, LLC. She received her J.D.
from DePaul University College of Law and her B.A. from
the University of Michigan. Her practice areas include
employment law and general tort litigation. Ms. Ross is an
Associate Editor of the IDC Quarterly. In addition to the
IDC, she is a member of the Defense Research Institute,
the Decalogue Society of Lawyers and the Women’s Bar
Association.
* The author acknowledges the assistance of Geoffrey M. Waguespack, an
associate with Cremer, Kopon, Shaughnessy & Spina, LLC, in the preparation
of this article.
Second Quarter 2006
Affinity Group, the program did not constitute impermissible
discrimination under Title VII and was not discrimination
“because of” religion.
The court also rejected the argument that, because GM
recognized Affinity Groups based upon the other categories
protected by Title VII, 42 U.S.C. §2000e-2(a)(1), specifically
race, color, sex, and national origin, GM’s refusal to recognize
groups based upon religion was impermissibly discriminatory.
The court found no authority for the proposition that a court
use cross-categorical comparisons when evaluating Title VII
claims. Furthermore, the court concluded, the claim that GM
must allow recognition of a group based upon an employee’s
“main identifying characteristic” had no basis in Title VII law
or in the Affinity Group Guidelines. Accordingly, the court
affirmed the district court’s dismissal of the complaint for
failure to state a claim upon which relief could be granted.
Race Discrimination
Former White Employees Presented Sufficient
Facts to Create Inference of Discrimination
in Reverse-Discrimination Case,
but Failed to Establish Employer’s Reasons
for Termination Were Pretextual
In Hague v. Thompson Distribution Co., 436 F.3d 816
(7th Cir. 2006), several former white employees brought suit
against their former employer, Thompson Distribution Co.,
alleging race discrimination in violation of 42 U.S.C. §1981,
because they were terminated and then replaced by black
workers. The district court granted summary judgment in favor
of the employer. The Seventh Circuit affirmed, holding that
the employees, while presenting basis for an inference of invidious discrimination, failed to establish that the employer’s
reasons for their termination were pretextual.
John Thompson, who is black, owned Thompson Distribution Co., which purchased the assets of Mutual Pipe & Supply
Co., Inc. (Mutual Pipe), in 2001. Thompson Distribution’s
initial labor force consisted of fourteen at-will employees,
including the plaintiffs, Mark Hague, Cynthia Hague, Mark
Brown, Bernard Dubois and Anna Perrey, as well as two other
white employees, and five other black employees, including
Thompson and his wife. Thompson Distribution’s “Employee
Handbook” provided for a 90-day probationary period for new
employees. Before the 90-day probationary period expired,
Thompson Distribution fired the five plaintiffs. Three newly
hired black employees replaced Mark Hague, Brown and
Perrey. Thompson’s wife replaced Cynthia Hague, and Dubois was not replaced. The plaintiffs then filed suit, alleging
race discrimination under 42 U.S.C. §1981 and Title VII, 42
U.S.C. §2000e, et seq., among other claims. The plaintiffs,
however, dropped their Title VII claims, because Thompson
Distribution did not meet the employee-number requirement
of 15 employees under Title VII, 42 U.S.C. §2000e(b). The
district court granted summary judgment in favor of Thompson Distribution on all counts, concluding with respect to the
§1981 claims that the plaintiffs failed to establish pretext and
that they were meeting Thompson Distribution’s business
expectations. The plaintiffs appealed only from the decision
on their §1981 counts.
On appeal, the Seventh Circuit applied the indirect burdenshifting method established in McDonnell Douglas Corp. v.
Green, 411 U.S. 792, 93 S. Ct. 1817 (1973). This method
requires plaintiffs to prove a prima facie case of discrimination by establishing that they are members of a protected class
(e.g., a racial minority), who were meeting their employer’s
business expectations, but who were nonetheless fired and
replaced by someone outside of their protected class. Because
this case involved a reverse discrimination suit, however, the
plaintiffs were required to meet a modified standard of proof,
whereby they had to “show ‘background circumstances’ sufficient to demonstrate that the particular employer has ‘reason or
inclination to discriminate invidiously against whites’ [or men]
or evidence that ‘there is something “fishy” about the facts
at hand.’” Ineichen v. Ameritech, 410 F.3d 956, 959 (7th Cir.
2005). The reason for this modification, the court explained,
is that a literal application of the McDonnell Douglas standard
in reverse-discrimination cases would prevent any plaintiff
from establishing a prima facie case, because that standard
requires the plaintiff to show membership to a racial minority.
Having set forth the modified standard, the court found
that the plaintiffs satisfied it by presenting evidence that their
black boss fired them (and they are white), replaced three of
them with three new black employees, allowed one’s duties
to be assumed by an existing black employee, and decided
not to replace the other. These circumstances, the court held,
created the same inference of discrimination that typically
flows from the more straightforward discrimination cases.
Although the plaintiffs satisfied the modified standard of
proof, Thompson Distribution argued that they failed to show
that they had met its business expectations and, alternatively,
that they failed to present any evidence that its reasons for
firing them were pretext to discrimination. Because the plaintiffs responded to these alternative positions by arguing that
Thompson Distribution was lying about both its business
expectations and the proffered reasons for their termination,
the court focused on the issue of pretext, while being mind
(Continued on next page)
17
IDC Quarterly
Employment Law Issues (Continued)
ful that the plaintiffs’ failure to present sufficient evidence
of pretext meant their simultaneous failure to show that they
were meeting their employer’s expectations. Rummery v. Ill.
Bell Tel. Co., 250 F.3d 553, 556 (7th Cir. 2001).
Because the rationale for the termination of each plaintiff
differed, the court considered each plaintiff separately. The
court’s determination with respect to each plaintiff, however,
contained a common element: that a plaintiff must do more
than attack the employer’s judgment, decisions, or honest
belief in the grounds for termination, no matter how mistaken,
ill considered, or foolish they might be. Ballance v. City of
Springfield, 424 F.3d 614 (7th Cir. 2005); Grayson v. O’Neill,
308 F.3d 808 (7th Cir. 2002); Stewart v. Henderson, 207 F.3d
374 (7th Cir. 2000); and Jordan v. Summers, 205 F.3d 337
(7th Cir. 2000).
With respect to Brown, Thompson Distribution proffered
two reasons for his termination. First, he repeatedly cursed
and yelled at his subordinates. Second, he allowed a supplier
to remove boilers that Thompson believed belonged to the
company. Holding that these reasons satisfied Thompson Distribution’s burden to produce evidence of legitimate grounds
for termination, the court shifted the burden back to Brown
to establish pretext. Brown admitted to using profanities at
work, replying that he never said anything more severe than
“hell” or “damn” and that he yelled and used “shop talk” to
motivate the newly hired individuals, whom he claimed were
inexperienced and incompetent. He also admitted to allowing
the supplier to remove the boilers because the supplier owned
them and he therefore did nothing wrong. The court held that
Brown failed to met his burden of showing that Thompson
Distribution had lied about its reasons for firing him, because
he merely asserted that Thompson Distribution was wrong
for firing him for those reasons and attacked Thompson’s
leadership and business judgment.
Thompson Distribution explained that it fired Dubois, who
was not replaced, because the sales in his area were very low.
Holding that this explanation satisfied Thompson Distribution’s burden of production, the court shifted the burden onto
Dubois to establish pretext. Dubois replied, acknowledging
that his sales were low, but claiming that the low sales were
not his fault. Rather, he explained, the low sales were attributable to Thompson’s failure to secure either the inventory or a
vendor for the sales. Stating that “simply shifting the blame
for a problem does not establish pretext.” Wohl v. Spectrum
Mfg., Inc., 94 F.3d 353, 357 (7th Cir. 1996), the court held
that Dubois presented no specific evidence from which an
inference of pretext could be inferred. Additionally, because
Dubois was not replaced, he lacked evidence of more favor18
able treatment toward a similarly situated individual outside
his protected class.
Perrey was fired for insubordination and an unwillingness to recognize Thompson as her leader, as demonstrated
by her refusal to perform tasks in the manner requested by
Thompson and by her insistence on getting approval from
Mark Hague before performing a requested task. In response,
Perrey claimed that she did not refuse to obey Thompson, but
rather that she needed to check with Mark Hague for guidance, because she did not know how to perform the requested
“Because the rationale for the
termination of each plaintiff differed,
the court considered each plaintiff
separately.”
tasks. The court found that Perrey’s reply did nothing more
than allege that Thompson was mistaken in his belief that
she was being insubordinate, and did not show that he did
not honestly believe his reason for firing her. Moreover, the
court concluded, the record supported the fact that Thompson
honestly believed his reasons, because Mark Hague’s affidavit
stated that Thompson approached him to discuss Perrey’s
refusal to follow his instructions.
Thompson explained that Cynthia Hague was fired for not
being proficient in Thompson Distribution’s accounting system and for spending office time working on tasks related to
wrapping up matters for Mutual Pipe. Cynthia Hague admitted
that she was not proficient in the accounting program, but that
Thompson knew that when he hired her. She also admitted
that she worked on closing out the books for Mutual Pipe,
but that doing so was necessary before she could input data
relative to Thompson Distribution. The court characterized
these responses as complaining about being fired for these
deficiencies and impugning Thompson’s judgment, but they
were not evidence of pretext.
Thompson Distribution proffered three reasons for the
termination of Mark Hague. First, he improperly allowed a
boiler to be returned to a vendor. Second, he sold products to
customers below the margin set by Thompson Distribution.
Third, Thompson believed that Mark Hague had told several
suppliers that Thompson Distribution would buy goods and
Second Quarter 2006
services that they had supplied to Mutual Pipe. Mark Hague
replied that the vendor owned the boiler, that he sold products
below Thompson Distribution’s margin because he would
be unable to earn sales at a higher margin, and that he did
not inform suppliers that Thompson Distribution would buy
products ordered by Mutual Pipe. The court stated that these
responses did not focus on whether Thompson Distribution’s
reasons were honest, but rather on whether Thompson Distribution was right to have fired him for those reasons. Summary
judgment, therefore, was unavoidable, because the plaintiffs
did nothing more than attack the defendant’s wisdom.
Additionally, the court held that Thompson Distribution’s
burden was the burden of production, not the burden of proof,
and thus it did not need to submit documentary support for
its reasons. Furthermore, Thompson Distribution’s failure to
follow its progressive disciplinary structure was not evidence
of pretext, because the terminations were within the 90-day
probationary period set forth in the Employee Handbook.
Finally, the court found the plaintiffs could not merely point
to the racial composition of the workforce as proof of discrimination, but rather needed to perform a statistical analysis
of all the employer’s decisions to determine whether race
made a difference, including a compilation of the number of
positions available, the number and race of the candidates for
those positions, and their relative qualifications. Consequently,
the court affirmed summary judgment in favor of Thompson
Distribution.
Employee Failed to Present Evidence
of Employer’s Discriminatory Behavior
In Johal v. Little Lady Foods, Inc., 434 F.3d 943 (7th Cir.
2006), Robin Johal sued her employer, Little Lady Foods, Inc.
(LLF), alleging discrimination based on race, color, national
origin, and sex in violation of Title VII of the Civil Rights Act
of 1964, 42 U.S.C. §2000e, et seq., as well as age discrimination in violation of the Age Discrimination in Employment
Act of 1967, 29 U.S.C. §621, et seq. The district court granted
summary judgment in favor of LLF. The Seventh Circuit,
addressing only the claims based on race, color, and national
origin, affirmed, holding that Johal failed to show that the
unpleasantness she complained of was due to her race, color,
or national origin.
Johal was born in India in 1952 and emigrated to the
United States as a teenager, earned a college degree, and began working in the first of several positions at LLF in 1992.
Originally, Johal was hired as the company’s quality assurance
manager, but when necessary she also fulfilled the role of the
company’s lead research and development position. In 2000,
after a reorganization, Johal chose to manage the company’s
research and development department. That same year, LLF
acquired H.J. Heinz as a major new client. Eventually, LLF
began receiving complaints from Heinz about Johal’s ability
to grapple with the challenges presented by their more sophisticated requirements. Early in 2001, however, Johal received a
performance review that was “positive” in its “overall tenor.”
In April 2001, during further reorganization, LLF hired a new
director of technical services, to whom Johal was to report.
In July 2001, LLF eliminated Johal’s position, distributed her
responsibilities to the corporate chef, the director of technical
services, and the lead research and development technician.
LLF then fired Johal based on her job performance and the
elimination of her position, giving her a $3500 “discretionary
bonus” at an exit meeting with the company’s president.
On appeal, Johal described herself as “an American of
Asian descent,” and pursued claims of discrimination based
on race, color, and national origin. The Seventh Circuit applied the indirect burden-shifting test set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817
(1973), as modified by the mini-reduction-in-force situation
recognized in Michas v. Health Cost Controls of Illinois, Inc.,
209 F.3d 687 (7th Cir. 2000). Under that modified approach,
the initial threshold for a plaintiff is to establish her prima
facie case of discrimination by demonstrating that: (1) she
is a member of a protected class, (2) she was performing
her job satisfactorily, (3) she suffered a materially adverse
employment action, and (4) her job duties were absorbed by
employees who were not members of her protected class. If
the plaintiff establishes her prima facie case, the burden shifts
to the defendant to demonstrate legitimate, nondiscriminatory
reasons for its conduct. If the defendant meets its burden,
the plaintiff then must show that the reasons proffered by
the defendant are pretext to its discriminatory conduct.
The court addressed only whether Johal was satisfactorily
performing her job and whether she set forth a basis for her
assertion that LLF’s reasons for her termination were pretextual. With respect to her job performance, the court rejected
Johal’s argument that the $3500 “discretionary bonus” that
she received at the time of her discharge and the positive job
review that she received six months prior to her termination
were evidence of her satisfactory job performance. The court
noted that Johal provided no evidence about the basis for the
bonus or its connection to her performance. Additionally,
the court stated that the relevant time period was the time of
her discharge, not six months prior, citing Cengr v. Fusibond
Piping Sys., Inc., 135 F.3d 445, 452-52 (7th Cir. 1998), and
Karazanos v. Navistar Int’l Transp. Corp., 948 F.2d 332, 336
(7th Cir. 1991), and that both her duties and her supervisor had
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IDC Quarterly
changed since her review. Therefore, Johal could not satisfy
the second element of the modified test.
Nonetheless, the court evaluated Johal’s arguments regarding pretext, which it rejected. The court concluded that
the record did not support an inference of pretext, but rather
showed the growing and changing demands of the company’s
business and the distribution of Johal’s responsibilities among
three other positions as a result of the company’s overall
restructuring. Therefore, the court found no basis to support
Johal’s contention that the elimination of her position was
pretext for a discriminatory discharge.
The court then addressed Johal’s arguments under the
“direct” test for discrimination, which requires a plaintiff
to present circumstantial evidence sufficient to permit an
inference of the employer’s discriminatory behavior, citing
to the case of Troupe v. May Dep’t Stores Co., 20 F.3d 734,
736 (7th Cir. 1994). The court summarily rejected each of
Johal’s contentions, finding her arguments deficient and her
evidence incomplete. Accordingly, Johal failed to provide
any circumstantial evidence of discrimination. The court
concluded that “the workplace unpleasantness” about which
Johal complained was not shown to be due to her race, color,
or national origin. Consequently, the court affirmed the district
court’s grant of summary judgment in favor of LLF.
Sexual Harassment
Fifth Circuit Clarifies That Standard
for Actionable Sexual Harassment is
Severe or Pervasive, Not Severe and Pervasive
In Harvill v. Westward Communications, L.L.C., 433
F.3d 428 (5th Cir. 2005), Molly Harvill sued her employer,
Westward Communications, L.L.C. (Westward), alleging
sexual harassment that created a hostile or abusive working
environment, constructive discharge, and retaliation under
Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e, et
seq. The district court granted summary judgment in favor of
Westward. The Fifth Circuit affirmed, but only after clarifying
the standard for an actionable sexual harassment claim under
Title VII.
In 2001, Harvill worked as an office manager for the Grand
Saline Sun newspaper, which Westward owned. When she
began her employment at the newspaper, she signed an acknowledgment form indicating that she was given a company
handbook that explained the company’s anti-harassment policies. The relevant provision of the policy directed employees
who believed that were being harassed to inform their immedi20
ate supervisor, and then the Director of Human Resources if
their supervisor did not provide sufficient recourse. In October
2001, pursuant to this direction, Harvill complained to her
immediate supervisor, Nell French, that she felt harassed by a
co-worker. French investigated the incident, and upon finding
“Harvill did not go to the Director
of Human Resources to complain
of the harassment, because she
claimed that French, at a meeting concerning an unrelated event,
told her to never go over her head
about anything.”
that the claims could not be substantiated, concluded, without
talking to the alleged offender, that further remedial steps were
unnecessary. Harvill claimed that the co-worker continued to
sexually harass her over a seven-month period beginning in
July 2001 by grabbing her, kissing her on the cheek, popping
rubber bands at her breasts, fondling her breasts numerous
times, patting her on the buttocks numerous times, coming
up behind her to rub his body against her, and commenting
about her sex life and abilities in bed. The court noted that
Harvill protested these actions and could describe and recall
the circumstances surrounding the incidents, and provided
names of witnesses to corroborate her story.
Harvill did not go to the Director of Human Resources to
complain of the harassment, because she claimed that French,
at a meeting concerning an unrelated event, told her to never
go over her head about anything. In February 2002, however,
Harvill informed Westward that she would be filing a charge
with the EEOC. At that time, Westward’s Director of Human
Resources launched her own investigation, and thereafter,
Harvill concedes, all the harassment ceased. Shortly afterwards, Harvill took medical leave, tendered her resignation,
and filed suit against Westward.
The district court granted summary judgment in favor of
Westward. On appeal, the Fifth Circuit stated that Harvill had
to establish a hostile work environment by demonstrating that
Second Quarter 2006
(1) she was a member of a protected group; (2) she was the
victim of uninvited sexual harassment; (3) the harassment was
sex-based; (4) the harassment affected a “term, condition, or
privilege” of her employment; and (5) her employer knew
or should have known of the harassment and failed to take
prompt remedial action. Woods v. Delta Beverage Group, Inc.,
274 F.3d 295, 298 (5th Cir. 2001). Only the fourth and fifth
elements were at issue on appeal.
In reviewing whether the harassment affected a term, condition, or privilege of Harvill’s employment, the court found that
the district court applied the wrong legal standard in holding
that the harassment Harvill experienced was not so severe
and pervasive that it altered the terms and conditions of her
employment. Noting that requiring a plaintiff to establish that
the reported abusive conduct be both severe and pervasive
imposes a more stringent burden than is required by law,
the court stated that a legal remedy under Title VII exists for
plaintiffs who establish that the abusive conduct was severe or
pervasive. The court observed that the U.S. Supreme Court has
ruled that isolated egregious incidents can alter the terms and
conditions of employment. Faragher v. Boca Raton, 118 S. Ct.
2275 (1998). By contrast, the conjunctive standard applied by
the district court would make infrequent egregious conduct not
actionable because it would not be “pervasive.”
Proceeding under the disjunctive standard, the court concluded that a reasonable jury could find that the harassment
suffered by Harvill was sufficiently severe or pervasive to
alter a term or condition of her employment. In support of
its conclusion, the court pointed to the seven-month period
during which the harassment occurred, the fact that certain
events occurred numerous times, and the severity of the
deliberate and unwanted touching of Harvill’s intimate body
parts. Accordingly, the court held that Harvill had established
the fourth element of her claim.
Harvill’s claim, however, failed on the fifth element, because she failed to show that Westward had not taken prompt
remedial action once it was informed of the harassment. The
court pointed to Harvill’s failure to notify the Director of Human Resources of the harassment once she was dissatisfied
with the results of her direct supervisor’s action, despite being instructed to do so under the company’s anti-harassment
policy, which she acknowledged receiving. Harvill’s reliance
on French’s instruction to never go over her head for anything,
the court concluded, unreasonably resulted in her failure to
take advantage of the corrective opportunities provided by
Westward. More importantly, once the Director of Human
Resources was informed of the harassment, she immediately
investigated it and it ceased. Consequently, the court held that
summary judgment in favor of Westward was appropriate.
The court also found that summary judgment in favor of
Westward was appropriate on Harvill’s retaliation claim,
because she failed to raise a genuine issue of material fact.
Harvill argued that she was constructively discharged after
she filed her sexual harassment complaint, because certain
circumstances combined to create intolerable working
conditions. Specifically, she contends that she heard a new
supervisor express a desire to run her off, that a bogus racial
harassment charge was levied against her, that someone had
been photographing her outside the office, and that other supervisors and coworkers treated her hostilely. The court held
that she failed to establish a prima facie case of retaliation. In
order to establish a prima facie case of retaliation based upon
constructive discharge, a plaintiff must prove the existence
of such difficult or unpleasant working conditions that a reasonable person in her position would have felt compelled to
resign. Landgraf v. USI Film Products, 968 F.2d 427, 429-30
(5th Cir. 1992). The court, however, concluded that Harvill did
not make such a proof, because her allegations were conclusory, she presented no summary judgment evidence, and she
did not allege any aggravating factors that would render the
harassment so intolerable that a reasonable person would be
compelled to resign. Accordingly, the Fifth Circuit affirmed
the district court’s decision.
Retaliation
Third Circuit Holds Retaliation Claim Predicated
On Coworker-Created Hostile Work Environment Cognizable Under 42 U.S.C. §2000e-3(a)
In Jensen v. Potter, 435 F.3d 444 (3d Cir. 2006), Anna
Jensen, a letter carrier, sued her employer, the United States
Postal Service (USPS), alleging retaliation and sex discrimination under Title VII of the Civil Rights Act of 1964, 42
U.S.C. §2000e, et seq. The district court granted summary
judgment in favor of the USPS. The Third Circuit reversed
and remanded, holding that coworker harassment can violate
42 U.S.C. §2000e-3(a).
Jensen’s problems began when, on September 15, 2001, a
supervisor who was drunk at his home called her while she
was at work, gave her directions to his house, and insisted
that she go to his house so he could make love to her all
day long. Jensen declined the supervisor’s persistent pleas,
and later reported the incident to her branch manager, Chris
Moss. The supervisor was transferred to a different branch
on September 20, 2001, and was fired in January 2002. On
September 26, 2001, supervisor Rick Honeychurch moved
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IDC Quarterly
Jansen’s workstation to her harasser’s former stand-up desk
within her harasser’s former unit, which did not provide her
with a friendly reception.
Immediately, letter carrier Joe Sickler peppered Jensen with
insults, some of which directly related to the events involving
her harasser. His offensive comments continued for about 19
months at a pace of two to three times a week. At one point,
he snuck up behind Jensen and clapped two objects together,
making her cringe with fright. Jensen asked Moss to remove
her from the unit to an available workstation, but he declined
to do so. In addition to Sickler, letter carrier Ed Jones, who
was Jensen’s friend before these events occurred, threatened
Jensen by rapidly driving carts toward her. In late 2002,
unknown vandals twice keyed, spit on, and poured coffee
on Jensen’s car. Jensen repeatedly complained to Moss and
Honeychurch about the way she was being treated. Despite
Honeychurch’s claim that he confronted Sickler about his
behavior, the conditions for Jensen did not improve until 19
months later, when she complained to a new supervisor who
took immediate action to stop the harassment. As a result of
the 19 months of harassment, Jensen experienced anxiety attacks, trips to the emergency room, and stress-induced sick
leave.
Based on the treatment she received at the hands of her coworkers, Jensen filed a retaliation claim against the USPS under Section 704(a) of Title VII, 42 U.S.C. §2000e-3(a). Under
that provision, to discriminate against an employee because
she “has made a charge, testified, assisted, or participated in
any manner in an investigation, proceeding, or hearing” under Title VII is an unlawful employment practice. 42 U.S.C.
§2000e-3(a). The threshold issue, however, was whether a
retaliation claim predicated upon a hostile work environment
was cognizable under 42 U.S.C. §2000e-3(a).
The Third Circuit noted that its sister circuits are split on
the issue. Although a majority of the circuits, including the
Seventh Circuit, citing Knox v. Indiana, 93 F.3d 1327 (7th Cir.
1996), have held that the statute prohibits severe or pervasive
retaliatory harassment, both the Fifth and the Eighth Circuits
have limited the statute to “ultimate employment decisions,”
and thus place harassment outside the statute’s reach, citing
Mattern v. Eastman Kodak Co., 104 F.3d 702 (5th Cir. 1997),
and Manning v. Metropolitan Life Ins. Co., 127 F.3d 686 (8th
Cir. 1997). Acknowledging that it had never addressed this
precise issue, the court concluded that the logic of its decision
in Robinson v. City of Pittsburgh, 120 F.3d 1286 (3d Cir. 1997),
leaned toward the majority approach. In that case, the court
held that “§2000e-3(a) prohibits a quantum of discrimination
coterminous with that prohibited by §2000e-2(a).” Jensen, 435
22
F.3d at 448, citing Robinson, 120 F.3d at 1300-01. Therefore,
because the cognizability of discrimination claims founded
upon a hostile work environment is well-established under
§2000e-2(a), and because harassment can alter the terms or
conditions of employment under that statute, then the same is
true under §2000e-3(a) and both provisions “can be offended
by harassment that is severe or pervasive enough to create a
hostile work environment.” Id. at 449. Accordingly, the court
proceeded to analyze Jensen’s claim.
Given the consistency between §2000e-2(a) and §2000e3(a), the court applied its usual hostile work environment
framework to Jensen’s retaliatory harassment claim, though
with a slightly modified first element. Specifically, Jensen was
required to prove that: (1) she suffered intentional discrimination because of her protected activity; (2) the discrimination
was severe or pervasive; (3) the discrimination detrimentally
affected her; (4) it would have detrimentally affected a reasonable person in like circumstances; and (5) a basis for employer
liability is present. Weston v. Pennsylvania, 251 F.3d 420, 426
(3d Cir. 2001).
The court found that Jensen had raised genuine issues of
material fact as to each of the required elements. Considering
the overall scenario, the first element was supportable because
Sickler’s insults were directly related to Jensen’s complaints
against her harasser and because of the temporal proximity
between Jensen’s complaints and Jones’ threatening behavior. The second, third, and fourth elements were supported
subjectively by Jensen’s physical manifestations of her stress
and anxiety, and objectively by the severity and frequency
of the insults, property damage, and harassing or threatening
incidents suffered by Jensen over the 19-month period. The
fifth element was supported by the amount of delay on behalf
of the USPS in adequately addressing Jensen’s complaints.
Accordingly, the court reversed the district court’s order
granting summary judgment for the USPS.
Second Quarter 2006
Case Note
By: Robert T. Park
Snyder, Park & Nelson, P.C.
Rock Island
Underinsured Motorist (UIM) Arbitration:
Can a Dissatisfied Party Demand
a De Novo Trial?
In a new case, Zappia v. St. Paul Fire and Marine Insurance Co.,1 the First District of the Appellate Court has made
a ruling on underinsured motorist (UIM) insurance coverage
that invites supreme court review. In order to understand why,
it’s appropriate to first review the history of litigation over the
“trial de novo clause” of UIM coverage.
The Trial De Novo Clause
When the at-fault driver is uninsured or has insufficient
policy limits to cover the full value of a claim, the injured
claimant turns to his own uninsured motorist (UM) or UIM
coverage. Disputes with respect to the value of the claim are
then submitted to arbitration, as the policy requires.
With regard to UM coverage, Section 143a of the Insurance
Code (215 ILCS 5/143a) formerly stated in pertinent part:
Any decision made by the arbitrators shall be binding
for the amount of damages not exceeding the limits for
bodily injury or death set forth in Section 7-203 of the
Illinois Vehicle Code.2
The validity of the foregoing statutory provision and UM
policy language conforming to it was unsuccessfully challenged in Reed v. Farmers Insurance Group.3 In Reed, the Illinois Supreme Court held a UM arbitration provision that was
binding only as to awards within the financial responsibility
limits did not violate public policy, and that Section 143a of
the Insurance Code, as quoted above, was not unconstitutional
on due process, equal protection, special legislation or other
grounds.4
Auto policies usually provide for UM and UIM arbitration
by a three-person panel, and may contain a clause like the
following with respect to UIM coverage:
A decision by two of the arbitrators will be binding for
amounts of damages that are up to the minimum financial responsibility limits as prescribed by Illinois law.5
In other words, if the UIM award is within the minimum
financial responsibility limits, it is binding on both parties.
On the other hand, if the arbitrators’ award is greater than the
minimum financial responsibility limits, it does not bind the
parties, and either the insured or the insurer may seek a trial
de novo regarding the value of the claim.
The Appellate UIM Case Law
Three panels of the Illinois Appellate Court have found
a trial de novo clause such as the foregoing to be invalid as
applied to UIM claims. In Fireman’s Fund Insurance Cos. v.
Bugailiskis,6 decided three years before the supreme court’s
UM holding in Reed, the court held that the subject clause
lacks mutuality of remedy, has “some earmarks” of a contract
of adhesion, extends the time consumed in resolving the controversy and thereby defeats the goals of promoting judicial
economy and respect for the judicial system.
For the foregoing reasons, the Bugailiskis court found the
clause contrary to public policy, and held that a UIM arbitration award was binding, so that the insurance company could
not reject it in favor of a de novo trial.7 The first post-Reed UIM
case was Parker v. American Family Insurance Co.8 Citing
Bugailiskis, the Third District found the insurance company
was more likely than the insured to reject an award above the
minimum limits and to demand a trial de novo. It held that a
About the Author
Robert T. Park is a principal in the firm of Snyder, Park
& Nelson, P.C. He received his B.A. and J.D. from the
University of Illinois. For 30 years, he has practiced law
in Rock Island, concentrating in defense of civil cases. Mr.
Park is a member of the DRI, ISBA and IDC, serving since
1993 as an IDC Director. He is a recent past Editor-In-Chief
of the IDC Quarterly.
23
IDC Quarterly
Case Note (Continued)
clause that favors the insurer in this way is inequitable and
against public policy. The court did not find Reed instructive
since it involved UM rather than UIM coverage.
Justice Holdridge dissented in Parker, disagreeing with
what he called the majority’s “unsupported assumption that
only the insurance company would seek to avoid an arbitration award over $20,000.”9 He suggested that a claimant who
viewed his claim as worth $100,000 would seek to avoid an
arbitration award of only $21,000 in favor of a trial de novo.10
The scenario proposed by Justice Holdridge occurred in
Kost v. Farmers Automobile Insurance Association.11 In Kost,
the insureds, faced with a $150,000 award they thought was
inadequate, sought a trial. The defendant insurer, trying to
bind the insured to the award, argued that the trial de novo
clause was against public policy, as held in Bugailiskis and
Parker.
The Fifth District disagreed with the defendant, holding
that it would be unfair to allow the insurer to place an inequitable clause in its policy and then, when its insureds invoked
that provision, argue that it was void. Thus, the claimants in
Kost were allowed to enforce the clause, reject the award and
proceed to a new determination of the value of their claims at
trial.12 The final case setting the stage for Zappia was Samek v.
Liberty Mutual Fire Insurance Co.13 Following the holdings in
Parker and Bugailiskis, the Samek majority found the trial de
novo clause violated public policy and could not be invoked
by the insurer to reject an arbitration award.
However, Justice Hoffman dissented in Samek, agreeing
with Justice Holdridge that it was just as likely that a dissatisfied insured would reject an award, as was the case in
Kost. Thus, he did not find the de novo clause to be against
public policy.14 Given the holdings in Bugailiskis, Parker, and
Samek, one might have sensed an irresistible trend finding the
de novo trial provision invalid. However, the Zappia opinion
by Justice O’Brien went contrary to the trend, disagreed with
the prior appellate holdings, and upheld the validity of the de
novo trial provisions of the defendant’s policy. In doing so, the
court reversed a circuit court ruling and allowed an insured
to demand a trial of his UIM claim.15
The Zappia court found the trial de novo provision was not
a contract of adhesion nor did it lack mutuality, since either
party could demand a trial de novo. The provision also does
not contravene the policy of binding arbitration, as Illinois
encourages even non-binding arbitration.16
Rather than refusing review, as it did in Bugailiskis, Parker,
and Samek, and assuming that the losing defendant files a
petition for leave to appeal, the supreme court should take
up the Zappia holding and decide once and for all if the UIM
24
trial de novo clause is valid and enforceable, or if it is void
and contrary to public policy.17 As things now stand, no one
can be sure of the validity of the provision.
While those in the Second and Third Districts can follow
the holdings of their respective appellate panels that the clause
is invalid, insureds, insurance companies and judges in the
First, Fourth and Fifth District will have to guess which case
or cases to follow. Such doubt does not serve the cause of
uniform justice within the state. The supreme court should
end the uncertainty, by either upholding the clause as it did
for UM coverage in Reed, or by following the majority of appellate justices and ruling definitively that the clause is void
and will not be enforced.
Endnotes
2006 WL 686182 (1st Dist. March 17, 2006).
2
625 ILCS 5/7-203 mandates minimum liability coverage of $20,000
per person and $40,000 per occurrence. 215 ILCS 5/143a was amended
effective January 1, 2004, to provide: “Any decision made by the
arbitrators shall be binding for the amount of damages not exceeding
$50,000 for bodily injury to or death of any one person, $100,000 for
bodily injury to or death of 2 or more persons in any one motor vehicle
accident, or the corresponding policy limits for bodily injury or death,
whichever is less.” This amendment applies only to UM claims. UIM
coverage is governed by 215 ILCS 5/143a2.
3
188 Ill. 2d 168, 242 Ill. Dec. 97, 720 N.E.2d 1052 (1999).
4
Justice Bilandic filed a dissent in Reed. In his view, Section 143a of
the Insurance Code was unconstitutional on due process grounds. 188
Ill. 2d 185, 242 Ill. Dec. 108, 720 N.E.2d 1063. Justices Heiple and
Harrison joined in this dissent.
5
The amendment to 215 ILCS 5/143a, effective January 1, 2004,
invalidates such a provision as to UM coverage. See note 1 above.
6
278 Ill. App. 3d 19, 22-23, 214 Ill. Dec. 989, 991-92, 662 N.E.2d
555, 557-58 (2d Dist. 1996), appeal denied 167 Ill. 2d 552.
7
Id., 278 Ill. App. 3d at 24, 214 Ill. Dec. at 992, 662 N.E.2d at 558.
8
315 Ill. App. 3d 431, 248 Ill. Dec. 375, 734 N.E.2d 83 (3d Dist.
2000), appeal denied 191 Ill. 2d 536.
9
315 Ill. App. 3d at 436, 248 Ill. Dec. at 379, 734 N.E.2d at 87.
10
Id.
11
328 Ill. App. 3d 649, 262 Ill. Dec. 756, 766 N.E.2d 676 (5th Dist.
2002).
12
13
341 Ill. App. 3d 1045, 275 Ill. Dec. 582, 793 N.E.2d 62 (1st Dist.
2003), appeal denied 205 Ill. 2d 646.
14
15
2006 WL 686182 at *4.
16
Id.
17
The situation could be addressed by legislation. Some auto policies
do not include a UIM trial de novo clause, which also avoids confusion.
1
Second Quarter 2006
Civil Rights Update
By: Bradford B. Ingram
Peoria
Domino’s a complete release. As a result, no further claims
arising out of this episode could be pursued on JWM’s behalf.
While the bankruptcy proceedings were continuing, McDonald filed the present §1981 claim against Domino’s in his
personal capacity. Since JWM was not involved in this case,
there was no occasion for the Supreme Court to determine
whether a corporation could bring suit under §1981. The
Supreme Court noted, however, that courts of appeals have
considered this issue and concluded that corporations may
raise §1981 claims.
Gist of Plaintiff’s Section 1981 Complaint
Privity of Contract Required to
State a Valid Claim Under
Section 42 U.S.C. Section 1981
The United States Supreme Court decided Domino’s Pizza
Inc., et al. v. McDonald,1 on February 22, 2006. The Supreme
Court held a plaintiff cannot state a claim under §1981,2 unless he has rights under the existing contract that he wishes to
“make and enforce.” Plaintiffs pursuing claims under §1981
must identify injuries flowing from a racially motivated breach
of their own contractual relationship, not of someone else’s
contractual relationship.
Factual Background
Mr. McDonald, a black man and sole shareholder and
president of JWM Investments, Inc. sued Domino’s under
§1981 alleging JWM and Domino’s had entered into several
contracts and Domino’s had breached those contracts because
of racial animus toward McDonald. He claimed its breach
harmed McDonald personally causing him to suffer monetary
and emotional damages. Agreements between JWM and
Domino’s involved several contracts under which JWM was
to build four restaurants in the Las Vegas area which would
be leased to Domino’s. Domino’s refused to execute appropriate estoppel certificates for JWM as required by contract to
facilitate JWM’s bank financing. The relationship between the
parties deteriorated and a dispute arose over ownership of the
land. The contract between Domino’s and JWM ultimately
remained uncompleted.
Due to the failed contracts, JWM filed for Chapter 11
bankruptcy. JWM’s bankruptcy estate initiated a lawsuit
against Domino’s for breach of contract. The trustee chose
not to assert a §1981 claim alleging Domino’s interference
with JWM’s right to make and enforce contracts. The breach
of contract claim was settled for $45,000 and JWM gave
The gist of McDonald’s complaint was that Domino’s had
breached his contract with JWM because of racial animus
toward McDonald and this had caused him damages and loss.
Domino’s filed a motion to dismiss claiming that no §1981
claim against Domino’s could be maintained because McDonald was not a party to the contract with Domino’s. The U.S.
District Court granted the motion on the basic proposition that
a corporation is a separate legal entity from its stockholders
and officers. The district court concluded that a corporation
may have standing to assert a §1981 claim, but a president or
sole shareholder may not step into the shoes of a corporation.
The Court of Appeals for the Ninth Circuit reversed and
concluded that when there are injuries distinct from that of
a corporation, a nonparty like McDonald may, nonetheless,
bring suit under §1981.
Supreme Court Analysis Section 1
of the Civil Rights Act of 1866 (14 Stat. 27)
Section 1 of the Civil Rights Act of 1866, or §1981, protects the right of all persons in the United States “to make and
enforce contracts” without regard to race.3 McDonald argued
that he made contracts on behalf of JWM, so the statute gave
him a cause of action independent of JWM. The United States
Supreme Court disagreed with this argument, and reversed
About the Author
Bradford B. Ingram is a partner with Heyl, Royster,
Voelker & Allen. His practice concentrates on the defense
of civil rights and municipal entities and the defense of
employers in all types of discrimination claims. He is a
frequent speaker before local and national bar associations
and industry groups.
25
IDC Quarterly
Civil Rights Update (Continued)
the Ninth Circuit, holding that the right to make contracts
guaranteed by §1981 is not the insignificant right to act as an
agent for someone else’s contract, but rather was the more
significant right to make and enforce contracts on one’s own
behalf, which had historically been denied to blacks.
The Supreme Court’s analysis included review of §1 of
the Civil Rights Act of 1866 (14 Stat. 27). When that Act was
drafted, a mere agent, who had no beneficial interest in the
contract he had made for his principal, could not generally
sue on that contract. As a result, the Supreme Court found
that any §1981 claim must identify an impaired contractual
relationship under which the plaintiff has rights. The Supreme
Court noted that such contractual relationships need not
already exist because §1981 protects a would-be contractor
along with those who have already made contracts.
In the instant case, McDonald’s complaint identified a
contractual relationship. It was the relationship between
Domino’s and JWM. There was no contractual relationship
between Domino’s and McDonald.
Statutory Intent: Privity of Contract
This decision puts 42 U.S.C. §1981 squarely within the
statute’s intent by holding that a plaintiff cannot state a claim,
unless he has or would have rights under the existing or pro-
“Plaintiffs have a burden of
establishing privity of contract
and cannot state a claim under
42 U.S.C. §1981, unless the plaintiff can demonstrate that his injuries flow from a racially motivated
breach of his/her own
contractual relationship and not
the contractual relationship of
Law Corporations & Agency
The Supreme Court also analyzed fundamental corporation
and agency law regarding the liability of a shareholder and
an officer of the corporation. Shareholders and officers of a
corporation have no rights under a contract undertaken by the
corporation and are not individually exposed to liability for
the corporation’s contracts. McDonald had no liability for the
contract between Domino’s and JWM. The Supreme Court
described McDonald’s claim as an effort to make light of the
law of corporations and agency by arguing that because he
negotiated, signed and performed and sought to enforce the
contract, Domino’s was wrong to insist the contract was not
his own.
Section 1981 Not an Omnibus Racial Remedy
The Supreme Court rejected a number of McDonald’s
policy arguments and noted that nothing in the text of §1981
suggests that it was meant to provide an omnibus remedy for
all racial injustice. Section 1981 is limited to situations involving one’s right to make and enforce contracts. The Supreme
Court found that trying to make §1981 a cure-all went beyond
any expression of congressional intent. Such remedy would
permit class actions by all minority employees as nonbreaching parties to a broken contract, or minority employees of any
company failing to receive a contract, alleging that the reason
for the breach and/or refusal to contract was racial animus
against them.
26
someone else.”
posed contract that he wishes to make or enforce. Plaintiffs
have a burden of establishing privity of contract and cannot
state a claim under 42 U.S.C. §1981, unless the plaintiff can
demonstrate that his injuries flow from a racially motivated
breach of his/her own contractual relationship and not the
contractual relationship of someone else.
This decision requires defense counsel to carefully review
the alleged contractual relationship to be sure the plaintiff
properly pleads and proves that the plaintiff has rights under
an existing or proposed contractual relationship and is not
acting as an agent for someone else’s contract.
Endnotes
__U.S.__, 126 S. Ct. 1246 (2006).
2
42 U.S.C. §1981.
3
Id.
1
Second Quarter 2006
Medical Malpractice
By: Edward J. Aucoin, Jr.
Pretzel & Stouffer, Chartered
Chicago
First District Explains Requirements
for Claims of Fraudulent Concealment
Under 735 5/13-215 and Reaffirms
Requirements for Pleading Duty
in Medical Negligence Action
On March 6, 2006, the Illinois Appellate Court, First District, released its opinion in Cangemi v. Advocate South Suburban Hospital, 2006 WL 539428 (Ill. App. 1 Dist. March 6,
2006), which dealt with the requirements for tolling the statute
of limitations and statute of repose in medical malpractice actions when there are claims of fraudulent concealment by the
defendants as to the existence of a cause of action. The opinion
is also helpful in supporting future motions to dismiss, as it
provides a thorough explanation of the detail required when
pleading the duty of a medical professional in a complaint.1
Justice Gordon delivered the opinion for the court.
In Cangemi, the plaintiffs, Michael Cangemi and his mother, Madeline Clement Belt, appealed the dismissal of their
first amended complaint against Advocate South Suburban
Hospital and Edgar Del Castillo, M.D. for medical negligence
in connection to injuries allegedly sustained during the delivery of Michael in 1982 and the trial court’s refusal to allow
them to file a second amended complaint. The trial court had
dismissed the action, finding that the amended complaint was
barred by the statute of limitations and that allowing the filing
of a second amended complaint could not cure the running of
the statute. On appeal, the plaintiffs alleged that the statutes
of limitation and repose normally applicable did not apply to
their action because the defendants fraudulently concealed the
existence of the causes of action. The First District rejected
these arguments and affirmed the trial court’s dismissal on
grounds other than the expiration of the statute of limitations.
On July 7, 2003, the plaintiffs filed a five-count complaint
against the defendants and four other physicians seeking
recovery for brain damage sustained by Michael prior to his
delivery via caesarean section on January 18, 1982. They also
sought other damages sustained by both Michael and Madeline
as a result of the birth. Count V of the complaint alleged that
the statutes of limitation and repose that would normally be
applicable to the action were tolled in this case because the
defendants fraudulently concealed Michael’s injuries by not
informing Madeline of the circumstances surrounding his
birth. That original complaint was dismissed by the trial court
in response to the defendants’ motion to dismiss pursuant to
735 ILCS 5/2-615 (West 2004), the circuit court finding that
the complaint was insufficient to support fraudulent concealment because no allegations were made that the defendants
acted in an affirmative manner to conceal the circumstances
around Michael’s birth. The plaintiffs were granted leave to
amend.
On March 19, 2004, the plaintiffs filed their first amended
complaint, which consisted of six counts and a “historical
and factual background” section, which contained specific
allegations of fraudulent concealment applicable to all counts.
Allegations of fraudulent concealment by the defendants
around the time of birth included: 1) the failure by Dr. Del
Castillo to inform Madeline that he had observed fetal distress
prior to the c-section delivery; 2) misrepresentations by Dr.
Del Castillo to Madeline that the c-section was necessary
to prevent injury to the baby due to the infant’s large head;
3) medical records which listed Dr. Hiatt as the delivering
physician when he actually did not arrive until after the emergency c-section was completed; 4) misrepresentations by the
nursing staff post-delivery as to Dr. Hiatt’s involvement and
Michael’s condition; 5) misrepresentations by Dr. Hiatt that
About the Author
Edward J. Aucoin, Jr. is an associate in the Chicago
firm of Pretzel & Stouffer, Chartered. He has over nine
years of experience in medical malpractice defense, commercial litigation, and contract litigation practice. Mr.
Aucoin’s substantial client base includes private hospitals
and medical practice groups, physicians and other medical
professionals, and national commercial corporations. He
has extensive experience in preparing complex litigation
for trial, and has second-chaired medical malpractice trials in Cook County
and DuPage County. Mr. Aucoin received his B.A. from Loyola University of
New Orleans and his J.D. from Loyola University of New Orleans School of
Law. He is also a member of the IDC.
27
IDC Quarterly
Medical Malpractice (Continued)
he was present for the c-section, the reason for the c-section
and regarding Michael’s condition; 6) misrepresentations by
Dr. Chavez that Dr. Hiatt had performed the c-section and as
to Michael’s condition; and 7) statements by Dr. McMann
to Madeline that her labor and delivery did not show any
problems and that Michael was very healthy.
The plaintiffs further pled that they were not aware that
Michael had suffered fetal distress prior to birth and that he
required resuscitation when born until almost 20 years later,
when Madeline requested a complete set of Michael’s medical
records to support his application for financial assistance for
college on the basis of being developmentally slow, at which
time she reviewed the Advocate Hospital chart. The defendants filed motions to dismiss the first amended complaint
pursuant to Sections 2-615 and 2-619 of the Illinois Code of
Civil Procedure. As an attachment to their response to those
motions, the plaintiffs filed numerous exhibits, including affidavits of Madeline and her attorney, several of Michael’s
hospital records, and nursing protocols. The plaintiffs also
requested leave to file a second amended complaint. The circuit court granted the defendants’ motions to dismiss, finding
the statute of limitations had expired and subsequently denied
the plaintiffs’ motion for reconsideration, which had alleged
error and the existence of new evidence.
In affirming the circuit court, the First District identified
two primary issues: 1) whether the circuit court erred in concluding that the plaintiff’s claims were barred by the statute of
limitations and not subject to the fraudulent concealment exception; and 2) whether the circuit court abused its discretion
in denying their request to file a second amended complaint to
make additional allegations based on newly discovered medical records. As to the first issue, the Hospital argued that any
fraudulent concealment perpetrated by its agent physicians
could not be attributed to it for purposes of tolling the statute
of limitations. Dr. Del Castillo argued that the plaintiffs failed
to properly allege fraudulent concealment attributable to him.
As to the second issue, the defendants argued that the plaintiffs’ proposed second amended complaint failed to remedy
the defects in the first amended complaint, and therefore, the
circuit court’s refusal to allow the second amendment was
proper.
Fraudulent Concealment
The statutes of limitation and repose applicable to the actions at issue are set out in Section 13-212 of the Illinois Code
of Civil Procedure. 735 ILCS 5/13-212 (West 2004). Since
Madeline was an adult at the time Michael was born, she
was subject to Section 13-212(a), which imposed a four-year
28
repose period running from the date of the defendants’ alleged
negligence, which cut off her claim in January of 1986. Section
13-212(b) applied to Michael, who was a minor at the time
of the alleged negligent conduct, and imposed a maximum
repose period of eight years stemming from the date of the
negligence, thereby extinguishing Michael’s claim in January
of 1990. The plaintiffs conceded that the time frames set out
in Section 13-212 were exceeded prior to the filing of their
initial complaint, but argued the exception listed in 735 ILCS
5/13-215 applied to the claims.
Section 13-215 states: “If a person liable to an action fraudulently conceals the cause of such action from the knowledge
of the person entitled thereto, the action may be commenced
at any time within 5 years after the person entitled to bring
“Section 13-215 states: ‘If a person liable to an action fraudulently
conceals the cause of such action
from the knowledge of the person
entitled thereto, the action may be
commenced at any time within
5 years after the person entitled to
bring the same discovers that he or
she has such cause of action, and
not afterwards.’”
the same discovers that he or she has such cause of action,
and not afterwards.” 735 ILCS 5/13-215 (West 2004).
As such, if the exception provided in Section 13-215 were
applied in Cangemi, the plaintiffs’ complaint would be timely
because it was filed on July 3, 2003, which was within five
years of Madeline’s alleged discovery of the cause of action
in August of 2002. The First District noted that in order to
invoke Section 13-215, the plaintiffs must demonstrate “affirmative acts by the defendant which were designed to prevent,
and in fact did prevent, the discovery of the claim. [Citations
omitted.] Mere silence of the defendant and the mere failure
Second Quarter 2006
on the part of the plaintiff to learn of a cause of action do not
amount to fraudulent concealment.” [Citations omitted.] In
addition, the court stated that fraudulent misrepresentations
that form the basis of the cause of action do not constitute
fraudulent concealment under Section 13-215 in the absence
of a showing that the misrepresentations tended to conceal
the cause of action, citing to Foster v. Plaut, 252 Ill. App. 3d
692, 699, 625 N.E.2d 198, 203 (1st Dist. 1993).
However, the First District found that the plaintiffs failed
to adequately state a cause of action against Dr. Del Castillo
for negligence and therefore could not attribute his negligence
to Advocate Hospital as a principal. The court rejected the
plaintiffs’ argument that Dr. Del Castillo fraudulently misrepresented the necessity for an emergency c-section in order to
conceal his negligence and that of the hospital in not reacting
to the fetal distress sooner. The court did so by attacking the
sufficiency of the pleadings in the complaint. Specifically, the
First District found that the first amended complaint failed
to adequately assert a duty owed by the defendants for the
alleged negligent acts.
The first amended complaint stated Dr. Del Castillo’s duty
as follows: “At all relevant times, Del Castillo, individually
and as agent of [Advocate Hospital], had a duty to possess
and apply the knowledge and use the skills and care ordinarily
used by reasonably well qualified medical practitioner [sic]
in the same or similar localities under circumstances similar
to those in this case.” The First District stated that “[s]uch a
general statement, without more, cannot stand for the specific
breaches of duty plaintiffs appear to assume Dr. Del Castillo
committed, namely, that he breached a duty to attend to Madeline earlier and a duty to further expedite the surgery after
observing a problem.” According to the court, the plaintiffs
should have alleged that Dr. Del Castillo was under a duty to
be aware of Madeline’s presence and/or that he had a duty to
perform the surgery himself. Instead, the plaintiffs failed to
allege that Dr. Del Castillo had any “additional duty beyond
calling the ‘code blue,’ scheduling the caesarean section, and
obtaining Madeline’s consent for the surgery . . .”. Therefore,
Plaintiff’s claims against Dr. Del Castillo and Advocate Hospital as his principal were legally insufficient.
The First District further stated that “fraudulent concealment, as codified in Section 13-215, is not a cause of action
in and of itself.” [emphasis added] Rather, it acts as an exception to the time limitations imposed on other underlying
causes of action such as medical negligence under 735 ILCS
5/13-212. As a result, direct acts of fraudulent concealment
are not necessarily required by a principal and the fraudulent
concealment of a cause of action by someone other than the
defendant may toll the limitations period, but “only where
the person fraudulently concealing the cause of action is in
privity with or an agent of the defendant,” citing to Serafin v.
Seith, 284 Ill. App. 3d 577, 590, 672 N.E.2d 302, 311 (1996).
Therefore, if Dr. Del Castillo were shown to be Advocate
Hospital’s agent, his acts of fraudulent concealment could “potentially act to toll the limitations period on an action against
Advocate Hospital.” However, the First District refused to
address whether the plaintiffs adequately pled fraudulent
concealment, since the court determined that the plaintiffs
had not adequately pled the duty and breach elements of the
underlying negligence cause of action against Dr. Del Castillo
to which that exception could apply.
The court next addressed the plaintiffs’ argument that
they adequately pled fraudulent concealment attributable
to Advocate Hospital by way of the statements made by
the hospital’s actual or apparent agents, including Drs. Del
Castillo, Hiatt, and McMann, as well as the nurses. Advocate Hospital argued that any fraudulent concealment by an
agent cannot apply to toll the limitations period on a cause
of action against a principal unless the principal is actually
aware of the agent’s fraudulent concealment. The First District agreed with the hospital and cited Wood v. Williams,
142 Ill. 269, 31 N.E.2d 681 (1892) in support. In Wood, the
Illinois Supreme Court affirmed the dismissal of a claim on
the basis of untimeliness, quoting Section 276 of Wood on
Limitations: “[t]he fraudulent concealment must have been
that of the party sought to be charged, and a mere allegation
of proof that it was the act of his agent will not be sufficient,
unless he is in some way shown to have been instrumental
in or cognizant of the fraud.” Wood, 142 Ill. at 280-81, 31
N.E.2d at 683, (quoting H. Wood, Wood on Limitations
§276 (1882).) As the First District noted, Wood has more recently been approved of and followed by the Illinois Supreme
Court in Chicago Park District v. Kenroy Inc., 78 Ill. 2d 555,
563, 402 N.E.2d 181, 185 (1980) and by the First District in
Barbour v. South Chicago Community Hospital, 156 Ill. App.
3d 324, 325, 509 N.E.2d 558, 559 (1st Dist. 1987).
The First District rejected the plaintiff’s attempts to distinguish Wood, Kenroy, and Barbour on the basis that the agents
in those cases were not full-time employees and, thus, were
“nonservant” agents as opposed to the physicians and nurses
in the instant case. In response, the court found that the Illinois
cases that have addressed the issue have not made the degree
or scope of agency a dispositive consideration in determining
whether an agent’s fraudulent concealment can be imputed to
a defendant principal, but have rested the inquiry on whether
the defendant principal had knowledge of the fraudulent
concealment. The court stated, “while equity is clearly not
29
IDC Quarterly
Medical Malpractice (Continued)
in favor of a tortfeasor who hides his own wrongful conduct
even years after the limitations period has run, such disfavor would not necessarily attach as between an unknowing
principal defendant and a plaintiff who brings a late claim.
Courts in Illinois have decided not to extend the liability of
an unknowing principal on the basis of the fraudulent concealment of an agent.” Therefore, the First District found that
the plaintiffs’ claims against Advocate Hospital in negligence
were untimely because they had not alleged knowledge or
ratification of the agents’ alleged fraudulent concealment on
the part of Advocate Hospital. The First District affirmed the
circuit court’s dismissal of those counts on that basis.
Equitable Estoppel
The plaintiffs also argued that the doctrine of equitable
estoppel provided a reason independent from the fraudulent
concealment provision of Section 13-215 to reverse the circuit court’s dismissal of their case on the basis of timeliness.
However, the First District agreed with the defendants that
the plaintiffs waived this argument by not asserting it in the
court below, citing Central Illinois Public Service Co. v. Allianz Underwriters Insurance Co., 244 Ill. App. 3d 709, 720,
614 N.E.2d 34, 42 (1st Dist. 1993).
Plaintiffs’ Request for Leave to
File a Second Amended Complaint
The plaintiffs next argued the circuit court abused its discretion in failing to allow them to file their second amended
complaint, which made additional allegations of fraudulent
concealment and agency, raised additional causes of action
based on common law fraud, and charged the defendants
with destruction of evidence. The plaintiffs argued that these
allegations in their second amended complaint could cure an
otherwise untimely complaint. The court recognized that the
decision whether to grant a motion to amend pleadings rests
within the discretion of the circuit court, and a reviewing court
will not reverse a circuit court’s decision absent an abuse of
that discretion, citing to Lee v. Chicago Transit Authority,
152 Ill. 2d 432, 467, 605 N.E.2d 493, 508 (1992). The court
stated that the relevant factors to be considered in determining whether the circuit court abused its discretion are: “(1)
whether the proposed amendment would cure the defective
pleading; (2) whether other parties would sustain prejudice
or surprise by virtue of the proposed amendment; (3) whether
the proposed amendment is timely; and (4) whether previous
opportunities to amend the pleading could be identified,” citing to Loyola Academy v. S & S Roof Maintenance, Inc., 146
Ill. 2d 263, 273, 586 N.E.2d 1211, 1215-16 (1992), and Ku30
pianen v. Graham, 107 Ill. App. 3d 373, 377, 437 N.E.2d 774
(1st Dist. 1982). A proposed amendment must meet all four
Loyola Academy factors; however, “if [a] proposed amendment does not state a cognizable claim, and thus fails the first
factor, courts of review will often not proceed with further
analysis.” Hayes Mechanical, Inc. v. First Induscircuit, L.P.,
351 Ill. App. 3d 1, 7, 812 N.E.2d 419, 424 (1st Dist. 2004).
The First District found the plaintiffs’ proposed second
amended complaint insufficient because it still did not allege
knowledge on the part of any principal of Advocate Hospital of
the alleged acts of fraudulent concealment. Therefore, “Plaintiffs’ allegations of negligence against Advocate Hospital do
not meet the first Loyola Academy factor and the dismissal by
the circuit court of these claims did not amount to an abuse
of discretion. The court further rejected the plaintiffs’ new
proposed causes of action against Advocate Hospital and Dr.
Del Castillo based on fraud, noting that fraudulent concealment as set out in Section 13-215 does not establish an independent cause of action and an independent cause of action
for fraudulent misrepresentation is subject to the statutes of
limitations and repose in Section 13-212 , which had expired.
See 735 ILCS 5/13-212 (West 2004). Since the requirements
for tolling the limitations period for an action for fraud against
a hospital are the same as those for negligence, the plaintiffs
failure to allege that any principal of the hospital was aware
of the fraud prevents the application of Section 13-215.
The final area addressed by the First District was the portion of the plaintiffs’ proposed second amended complaint
that charged the defendants with fraudulent spoliation of
evidence in furtherance of their fraudulent concealment. Specifically, the proposed amended complaint alleged that “Dr.
Del Castillo, individually or in concert with [Advocate Hospital] have fraudulently secreted [the consultation report],”
and that Advocate Hospital “has intentionally secreted and/
or destroyed Plaintiffs’ critical medical records.” (Emphasis
added.) The court stated that while it was unclear whether
the plaintiffs were claiming negligent or intentional spoliation of evidence in the proposed second amended complaint,
they could not state a new cause of action based on spoliation
because they could not demonstrate that but for the spoliation
by the defendants, the plaintiffs likely would have prevailed
in the underlying suit, citing to Boyd v. Travelers Insurance
Co., 166 Ill. 2d 188, 196, 652 N.E.2d 267, 271 (1995). The
plaintiffs could not show such a likelihood, according the First
District, because the document they alleged was destroyed
by the defendants was provided to the plaintiffs prior to the
initiation of the suit and was made part of the record on appeal, without its authenticity having been challenged. Further,
the plaintiffs could not allege an intentional spoliation as
Second Quarter 2006
the Illinois Supreme Court in Boyd declined to specifically
recognize that cause of action as a tort in Illinois.
Conclusion
The First District’s decision in the Cangemi case clarifies
the relationship of Section 13-215 of the Illinois Code of
Civil Procedure to the statutes of limitations and repose for a
medical negligence claim, as found in Section 13-212. Indeed,
the theory of tolling the statutes of limitations and repose for
“fraudulent concealment,” as codified in Section 13-215, is
not, according to the First District, a cause of action in and
of itself. Therefore, separate counts in a complaint brought
pursuant to Section 13-215 should be subject to a motion
to dismiss. More importantly, when faced with a pleading
that alleges “fraudulent concealment” pursuant to Section
“The court stated, ‘while equity is
clearly not in favor of a tortfeasor who hides his own wrongful
conduct even years after the limitations period has run, such disfavor
tions of duty when they present their clients for depositions
and engage in other discovery prior to the disclosure of expert
witness opinions. This heightened requirement for specificity
in pleading duty in the complaint is also more consistent with
much of the case law regarding the specific requirements of
reviewing physician’s reports under 735 ILCS 5/2-622. Finally, the First District has reaffirmed that courts in Illinois will not to extend liability for the fraudulent concealment of an agent under Section 13-215 to an “unknowing”
principal. Presumably, this includes claims based on both
actual and apparent agency. The opinion does not specify
whether a principal can be imputed with knowledge of fraudulent concealment due to the presence of information in the
medical records or through information gained afterwards in
a privileged communication. However, an argument can be
made that knowledge of the fraudulent concealment at the
time the affirmative action is taken by the agent is required,
as that is the only time that the principal would be in privy
with the agent.
Endnote
This opinion has not been released for publication in the permanent
law reports as of the date that this article was submitted. Due diligence
requires confirmation that the opinion was published in the same form
as when it was released on March 6, 2006 before relying on any information therein.
1 would not necessarily attach as
between an unknowing principal defendant and a plaintiff who
brings a late claim . . . .’”
13-215, the first issue to be evaluated is whether the plaintiff
adequately pled the duty and breach elements of the underlying cause of action to which that exception would apply.
The opinion in Cangemi also supports an argument that
complaints are required to allege the duty allegedly owed
by the defendant medical practitioner with more specificity.
The First District clearly rejected the general statement of
duty which had become boilerplate for most complaints filed.
Demanding more specific allegations of duty in the complaint
could lead to more detailed insight early in a case on the areas
of negligence for each specific defendant involved. As a result,
defense counsel could be better prepared to defend the allega31
IDC Quarterly
Featured Article
(and) submit to examinations under oath and
subscribe the same. . .
Examination Under Oath
“Looks Like a Dep …
Walks Like a Dep …
But It’s Not Just
Another Deposition”
An Analysis of an Insurer’s
Right to Examine Its Insured
By: Rick Hammond, CLU
Johnson & Bell, Ltd.
Chicago
Simply, an EUO is a formal proceeding during which an
insured, while under oath and typically in the presence of a
court reporter, is questioned by a representative of the insurer
regarding the presented claim. In 1884, the Supreme Court of
the United States first dictated the purpose of an EUO:
The object of the provisions in the policies of insurance,
requiring the assured to submit himself to an examination under oath . . . was to enable the company to possess itself of all knowledge, and all information as to
other sources and means of knowledge, in regard to the
facts, material to their rights, to enable them to decide
upon their obligations, and to protect them against false
claims. Claflin v. Commonwealth Insurance Co., 110
U.S. 81, 94-95 (1884).
Before conducting an EUO, it is vitally important to review
the relevant case law and statutes in the specific jurisdiction of
inquiry. As in most areas of the law, rules unique to different
jurisdictions often govern specific procedural and substantive
issues.
Background
Experienced lawyers who approach their first examination
under oath as they would a discovery deposition typically find
themselves in for a shock. Thus, the attorney representing the
insured may find himself less than prepared to present his client for questioning; and similarly, the attorney representing
the insurer may find that she is uncertain of the scope and
depth of the insurer’s right to examine its insured.
While property insurance policies differ somewhat amongst
insurers, most policy forms provide the insurer with a right to
demand the “examination under oath” (“EUO”) of its insured,
and a right to demand records and documents in support of
the presented claim.
The standard policy provision respecting an insurer’s right
to conduct an EUO typically provides:
YOUR DUTIES AFTER LOSS.
After a loss to which this insurance may apply, you shall
see that the following duties are performed:
As often as we reasonably require:
Provide us with records and documents we request
and permit us to make copies;
32
About the Author
Rick Hammond, CLU, is a shareholder in the Chicago law
firm of Johnson & Bell, Ltd. where he concentrates his practice on first-party insurance coverage, bad faith litigation
and insurance fraud. He is an Officer and Board member
of the Illinois Association of Defense Trial Counsel, and
an Officer and Board member of the Insurance School
of Chicago. He previously served as head of the Illinois
Department of Insurance’s Chicago office and as Executive
Director of a national insurance trade association, The Insurance Committee
for Arson Control (ICAC). He now serves as General Counsel for ICAC and
Counsel for the International Association of Arson Investigator’s Foundation,
Inc. He is a member of the Federation of Defense and Corporate Counsel,
and a Vice-Chair of the Property Insurance Law Committee for the American
Bar Association. Questions or comments can be directed to Mr. Hammond at
the law firm of Johnson & Bell, Ltd., 33 West Monroe, Suite 2700, Chicago,
Illinois 60603, (312) 984-3425, or at the e-mail address of hammondr@jbltd.
com. For additional information on laws pertaining to insurance fraud, coverage
or bad faith, visit Mr. Hammond’s web site at www.InsuranceFraudLaw.com.
Second Quarter 2006
Recorded Statement Not a Substitute for an EUO
In Downie v. State Farm Fire and Cas. Co., 84 Wash. App.
577, 929 P.2d 484 (1997), the Washington Court of Appeals
examined the issue of substantial compliance and ruled that
a recorded statement is not a substitute for an EUO, and that
it does not excuse the insured from submitting to an EUO.
In that case, the insured, Thomas Downie, filed a claim for
a lost Rolex watch and a diamond ring under his State Farm
policy. Downie gave recorded statements to two different
claims representatives. Allegedly, he was further asked but
refused to sign a general authorization allowing State Farm
access to his confidential records, and he refused to submit
to an EUO.
State Farm informed Downie that it would not accept nor
deny his claim until he completed the required investigation.
Downie, thereupon, filed suit against the insurer alleging
breach of contract, bad faith and a violation of the Consumer
Protection Act. State Farm moved for summary judgment,
arguing that Downie failed to comply with the policy that
stated in part:
Suit Against Us. No action will be brought against us
unless: a. there has been compliance with the policy
provisions;
Downie argued that, notwithstanding the policy provision
barring suit, factual issues exist as to whether State Farm was
reasonable in demanding an EUO, and regarding whether he
had substantially complied with the EUO requirement by giving multiple recorded statements to the adjustors. He further
argued that an EUO would have been a useless act because it
would not reveal any new information.
The trial court, in an apparent effort to appease both parties,
ordered Downie to provide an affidavit stating that his earlier
recorded statements were under oath and that they could be
used for any purpose in the trial proceedings. Downie complied with the court by filing the required affidavit, but he
would not admit to the authenticity of the recorded statement
transcripts. The trial court, thereupon, granted State Farm’s
motion for summary judgment and Downie appealed.
A Recorded Statement is
“Fundamentally Different” than an EUO
The Washington Appellate Court acknowledged that no
prior cases in that state had directly addressed the issue of
whether an insured’s recorded statement substantially complies with the insurer’s demand for an EUO. Nevertheless,
the court ruled in favor of State Farm by determining that
a recorded statement is “fundamentally different” than an
EUO because (1) a recorded statement is unsworn when it
is made, (2) insurers in practice do not intend that recorded
statements substitute for EUOs, and (3) the policy language
allows insurers to conduct multiple interviews.
Therefore, according to the court, no substantial compliance could occur where total compliance with the EUO provision is lacking, i.e., where the insured does not submit to at
least one EUO. The appellate court also took an interesting
view of the term “reasonableness” by stating that an EUO is
a condition that must be satisfied prior to suit by an insured
regardless of reasonableness, and that the insurer must only
be reasonable in the number of EUOs it seeks.
Similarly, courts have held that an insured’s deposition,
which was provided after a lawsuit has been filed against the
insurer, does not excuse an insured’s failure to submit to an
EUO before bringing suit. Nationwide Insurance Co. v. Nilsen,
745 So.2d 264 (1998).
A Formal “Demand” is Required
An insurer’s “demand” for an EUO is generally a condition
precedent to the insured’s obligation to comply. The letter
demanding the insured’s exam must designate the time and
location of the EUO, as well as the identity of the individual
conducting the exam (See Exhibit “A”). In addition, an EUO
should be held within a reasonable distance from the insured’s
home. Weber v. General Accident Fire & Life Assurance
Corp., 10 Ohio App. 3d 305, 462 N.E.2d 422 (1983) and Huggins v. Hartford Ins. Co., 650 F. Supp. 38 (E.D.N.C. 1986).
The Weber court also held that notice must be sent not just
to the insured’s attorney, but also to the insured. Failure to
comply with these notice provisions may result in the insurer’s
waiver of its defense that the insured failed to submit to an
EUO. Weber at 424.
Who the Insurer May Demand for an Exam
In State Farm Fire & Casualty Ins. Co. v. Miceli, 164 Ill.
App. 3d 874, 518 N.E.2d 357, 363, 115 Ill. Dec. 832 (1987),
the Illinois Appellate Court (First District) held that a duty to
demand an EUO applied only to named insureds and not their
children, even though coverage extended to them. In apparent response to the court’s holding in Miceli, many insurers
revised and broadened their policy language with respect to
their right to demand an EUO. The revised policy language
now often provides:
YOUR DUTIES AFTER LOSS. After a loss to which
this insurance may apply you shall see that the following
duties are performed:
33
IDC Quarterly
Examination Under Oath (Continued)
[A]s often as we reasonably require, submit to
and subscribe, while not in the presence of any
other insured . . . , examinations under oath; and
produce employees, members of the insured’s
household or others for examination under oath to
the extent it is within the insured’s power to do so
. . . (emphasis provided).
In accordance with the above stated policy provision, an
insurer may demand the EUO of any member of the insured’s
household, and may close the exam to anyone other than the
person being examined and their legal counsel. It should also
be noted that where the insured is a corporation, its officers
and/or directors may be subject to an EUO. Ausch v. St. Paul
Fire & Marine Ins. Co., 125 A.2d 43, 511 N.Y.S.2d 919
(1987), appeal denied 516 N.E.2d 1223 (1987). In addition,
if the insured employs a public adjuster (PA) to assist with
the presentment of his/her claim, the PA, as the insured’s
“employee,” may be subject to an EUO as well.
Production of Records
Generally the insurer, in addition to a demand for an EUO,
will demand that the insured produce certain documents to
assist in substantiating their claim. Refusal to comply with
the demand to produce the requested documents, if deemed
to be material and relevant to the insurer’s investigation, will
likely result in a basis for denial of the claim.
“Courts have frequently allowed
the insurer to demand from the
insured, as part of its claims
investigation, documents such
as income tax returns and bank
statements.”
Allowable Scope of Questioning
During an EUO, all questions considered material and
relevant to the claim must be answered by the insured. The
refusal of an insured to answer such questions, whether under
advice of an attorney or not, may result in a denial of the claim.
Furthermore, courts continually reiterate the settled principle
that making a false and material statement, or failing to give
complete responses during an EUO may be sufficient to void
coverage. Wagnon v. State Farm Fire and Cas. Co., Nos. 965012, 96-5013, 96-5213, 1998 WL 199658, (10th Cir. Apr.
24, 1998); Rickert v. Travelers Insurance Co., 159 A.2d 758,
760, 551 N.Y.S.2d 985, 987 (1990).
While courts have given broad scope to what an EUO may
encompass, (see Passero v. Allstate Ins. Co., 196 Ill. App. 3d
602, 606, 554 N.E.2d 384, 387, 143 Ill. Dec. 449, 452 (1990)),
the scope has been limited to whatever is material and relevant.
Thus, the EUO may encompass any subject considered material for the purpose of determining the insurer’s liability to a
claim, and may include anything that reasonably allows the
insurer to protect itself from false claims. See Passero at 388.
For example, in a case of suspected arson, the insurer
generally may question the insured on matters relating to the
insured’s financial condition in an effort to establish whether
a motive for arson existed. Accordingly, in Gipps Brewing
Corp. v. Central Mfrs.’ Mut. Ins. Co., 147 F.2d 6 (1945), the
court allowed for a “searching exam” of the insured where
the insurer had a reasonable basis for suspecting fraud by the
insured.
34
Courts have frequently allowed the insurer to demand from
the insured, as part of its claims investigation, documents such
as income tax returns and bank statements. See U.S. Fidelity
& Guaranty Co. v. Conaway, 674 F. Supp. 1270 (N.D.Miss.
1987); Stover v. Aetna Cas. And Sur. Co., 658 F. Supp. 156
(S.D.W.Va. 1987); and Kisting v. Westchester Fire Ins. Co.,
290 F. Supp. 141 (D.C. Wis.1968), aff’d 416 F.2d 967 (7th
Cir. 1969). However, in Chavis v. State Farm Fire and Cas.
Co., 317 N.C. 683, 346 S.E.2d 496 (1986), the court qualified
the above-stated general rule and held that an insurers’ request
for financial documents must be both reasonable and specific.
Insured’s Refusal to Answer
Questions During an EUO
At least two state courts have issued contrasting opinions
regarding the right of insureds to refuse to answer questions
during an EUO. For example, in Crowell v. State Farm Fire
and Cas. Co., 259 Ill. App. 3d 456, 631 N.E.2d 418, 197
Ill. Dec. 415 (5th Dist. 1994), the Illinois Appellate Court
granted an insured the right to withhold compliance of his
duty to submit to an EUO until after suit was filed. The
court reasoned that the insured, who was suspected of arson,
should be allowed to cure the apparent breach of the policy’s
conditions by answering those questions during a deposition
that he earlier refused to answer during an EUO. Although
the insurer provided the insured with many opportunities to
Second Quarter 2006
obtain legal counsel for the EUO, the court concluded that the
insured’s refusals were allowable because legal counsel did
not represent him during the exam. It is interesting to note that
a dissenting opinion in Crowell warned that the effect of the
court’s ruling would result in an increase of non-cooperation
by insureds who may be operating under the advice of an
absentee attorney.
It should also be noted that the insurer’s attorneys in
Crowell filed a Motion for Summary Judgment. However, the
case is silent regarding whether the insurer sought an earlier
Motion to Dismiss based upon the provision in most policies
that bars suit by an insured until after they have fully complied
with all of the terms of the policy. Thus, failure by the insured
to comply with the insurer’s demand for an EUO arguably
impedes a suit against the insurer for its denial of coverage.
The applicable policy provision provides:
Suit Against Us. No action shall be brought against
us unless there has been compliance with the policy
provisions.
Converse to Crowell, in Powell v. United States Fidelity
and Guar. Co., 88 F. 3d 271 (1996), a Virginia court affirmed
an insured’s duty to submit to an EUO, and duty to supply
financial information to an insurer as a condition precedent
to coverage. In that case, the insureds refused to submit to an
EUO, refused to produce financial records, and filed a state
court action to compel the insurer to provide coverage. The
court stayed the suit and ordered the insureds to submit to
an EUO. However, during the exam the insureds allegedly
refused to answer numerous questions, including whether they
had mortgages on other real estate, the types of automobiles
owned and related debt, whether the couple was subject to
any judgments, and regarding information on recent income
from a business.
In finding for the insurer, the Powell court opined that
one of the purposes of requiring EUOs and the production of
documents is to protect the insurance company against false
claims, and that it is clear that questions about the insureds’
financial situation are relevant to the insurance company’s
investigation of a fire.
Impact of the Insured’s Failure to Comply
An insured’s failure to comply with an insurer’s demand
for an EUO generally constitutes a material breach of contract
that renders the insurer void of liability for the presented
claim. See Saucier v. U.S. Fidelity & Guar. Co., 765 F. Supp.
334 (S.D. Miss. 1991), and Stover v. Aetna Casualty, 658 F.
Supp. 156 (S.D.W.Va. 1987).
Moreover, in most cases the insurer need not show prejudice from the insured’s refusal to comply, so long as, the
refusal resulted in an unreasonable delay. U.S. Fidelity &
Guar. Co. v. Wigginton., 964 F.2d 487 (5th Cir. 1992); but
see Aetna Cas and Sur. Co. v. Murphy, 206 Conn. 409 (1988)
(finding it is the insured who must establish that his delay did
not cause prejudice to the insurer). Even a belated offer by the
insured to comply with a demand for an EUO may not excuse
its breach if, as a result of the delay, information is difficult
to recall or evidence is destroyed. Watson v. National Sur.
Corp. of Chicago, IL, 468 N.W.2d 448 (Iowa 1991); Archie v.
State Farm Fire and Cas. Co., 813 F. Supp. 1208 (S.D.Miss.
1992).
Further, if an insured makes its first offer to comply with
an insurer’s demand for an EUO while the case is on appeal,
such an offer may be viewed as insufficient to constitute
reasonable compliance and will not likely excuse the earlier
breach. Pervis v. State Farm Fire and Cas. Co., 901 F.2d 944
(11th Cir. 1990), cert. den. 498 U.S. 899 (1990). The court in
Pervis also held that the insurer was under no obligation to
repeat its formal demand for an EUO once the insured had
refused compliance. Id. at 948.
Substantial Compliance
Unlike depositions, the insurer may be allowed several
“bites at the apple,” i.e., opportunities to conduct multiple
EUOs when necessary. Thus, the policy language in many
property policies provide that an insurer may exam its insured
“as often as we reasonably require.” Therefore, if prior to
reaching a coverage decision, and subsequent to an initial
EUO, the insurer uncovers additional facts that reasonably
require further questioning of the insured, another demand
for the insured’s exam may be considered appropriate if
the contract provides accordingly. As an aside, it should be
noted that if suit is later filed respecting the presented claim,
the insurer will, in accordance with the state’s code of civil
procedure, generally be allowed to also depose the insured.
Note, however, that the court in Watson, 468 N.W.2d 448
(1991), held that the insured does not breach the policy where
the insured has substantially complied with the insurer’s
demand for an EUO. While the insurer might have to justify
the reasonableness of its policy’s requirements, generally it
is the insured that must carry the burden of showing that his
or her compliance with these requests was reasonable under
the totality of the circumstances. Brown v. Danish Mut. Ins.
Ass’n., 550 N.W.2d 171 (1996).
35
IDC Quarterly
Examination Under Oath (Continued)
Insured’s Right to Legal Counsel
Typically, an attorney is retained to represent the insurer
and will make the demand and conduct the EUO. In many
cases, the insured will likewise retain legal counsel who will
request to be present during the proceeding.
Courts have held that while an insured has a right to have
her own attorney present at an EUO, the insured’s attorney
cannot participate in the process. See Hart v. Mechanics &
Traders Ins. Co., 46 F. Supp. 166 (1942); Shelter Ins. Cos. v.
Spence, 656 S.W.2d 36 (Tenn. App. 1983). Thus, an insured
is often unable to hide behind the objections of counsel.
Furthermore, procedural and evidentiary constraints of formal legal proceedings do not generally apply to EUOs. It is
important to mention that denial of an insured’s right to legal
representation may bar the insurer from denying a claim on
the basis of the insured’s failure to comply with its demand
for an EUO.
Insured’s Right to Seek Protection
Under the 5th Amendment
Courts have held that while the insured has the right to
assert protection under the 5th Amendment, such right has
no application to a private examination arising out of a contractual relationship. In short, the 5th Amendment protections
ADDRESS
changes
ADDRESSES CHANGE . . .
36
PEOPLE MOVE
and of course we continue to
have new members.
We can all help to conserve
dollars if we remember to
advise of an address change.
Call (1-800-232-0169) or
Fax (217-636-8812) the
IDC Office with your
mailing address or phone number changes.
against self-incrimination are not an excuse for failure to
comply with an EUO. See Galante v. Steel City Nat. Bank,
66 Ill. App. 3d 476, 384 N.E.2d 57, 23 Ill. Dec. 421 (1987),
Abraham v. Farmers Home Mutual Ins. Co., 439 N.W.2d 48
(Minn. 1989), and Hickman v. London Assurance Corp., 184
Cal. 524, 18 A.L.R. 742, 195 P. 45 (1920). The court in Kisting, 290 F. Supp. 141, 149 (1968), reasoned that an insured
should not be allowed to use the 5th Amendment as both a
“shield and a sword.”
Similarly, in Baldwin v. Bankers & Shippers Ins. Co., 222
F.2d 953 (9th Cir. 1955), the court held that, so long as the request was material to the examination, an insured must reveal
its tax records even if it might subject the insured to possible
criminal prosecution. Furthermore, in Pervis, 901 F.2d 944 at
946-7, footnote 4 (11th Cir. 1990), the court stated that whether
or not the insurer knew of and cooperated with the prosecution
of the insured, the insurer was still entitled under the contract
to seek a sworn statement from the insured.
Waiver of Rights
An insurer’s right to examine its insured is a privilege
which may inadvertently be waived by the insurer. For example, a waiver of the right to examine the insured may occur
by the insurer accepting or denying liability for a claim prior
to demanding an EUO. Thus, rights under the policy may be
lost by waiver or estoppel where the conduct of an insurer
induces the insured to believe that he need not comply with
certain policy provisions or that such provisions will not be
enforced. Downing v. Wolverine Insurance Co., 62 Ill. App.
2d 305, 210 N.E.2d 603, 606 (2d Dist. 1965). In fact, the court
in Gipps Brewing, 147 F.2d 6 (1945), held that policy provisions which state that no waiver can occur without the waiver
being in writing, may still be waived by the mere conduct of
the insurer.
Conclusion
An examination under oath, effectively conducted, is a
useful and expedient method for assisting the insurer in reaching a wise and fair coverage decision respecting a claim, and
it also provides an opportunity for the insured to explain, at
length, the circumstances of the loss, and an opportunity to
substantiate the value and interest in the property claimed.
Second Quarter 2006
Technology Law
By: Michael C. Bruck
Crisham & Kubes, Ltd.
Chicago
Long Live the Tie-In!
The Supreme Court’s Decision in
Illinois Tool Works, Inc. v. Independent Ink Inc.
On March 1, 2006, the supreme court unanimously overturned 59 years of precedent. This precedent saddled patent
owners with presumptive market power if they held a patent
on a product and tied-in the sale of a non-patented product.
The supreme court ruled in an 8-0 vote that the plaintiff has
the burden to prove that a tying arrangement confers market
power by forcing buyers to do something that they would
not do in a competitive market. Illinois Tool Works, Inc. v.
Independent Ink, Inc., 126 S.Ct. 1281 (2006). Before this,
it was assumed that a patent conferred market power to its
tie-in product, despite evidence of significant marketplace
competition for the tie-in.
This determination marks a victory for patent holders.
Patent holders will now maintain more control over their
products and have the opportunity to provide appropriate
non-patented tie-in products to consumers. The ruling also
benefits customers because these promotional tie-ins provide “uniquely advantageous deals” to purchasers. Fortner
Enterprises, Inc. v. United States Steel Corp., 394 U.S. 495,
89 S.Ct. 1252 (1969) (“Fortner I”) (opinion of White, J.).
On the flip-side, consumers may have fewer choices for parts
that allow tie-ins and face higher prices. The supreme court,
however, also ruled that companies that are proven to have
market power will not be allowed to have non-patented tie-in
products. Illinois Tool Works, 126 S. Ct. at 1293.
Background on
Illinois Tool Works, Inc. v. Independent Ink, Inc.
Trident Inc. (“Trident”), a subsidiary of Illinois Tool Works,
Inc., manufactures and markets printing systems with a patented printhead and ink container as well as unpatented ink.
The company sells to equipment manufacturers who must
agree to exclusively purchase Trident’s ink. Id. at 1284-85.
Independent Ink, Inc. (“Independent Ink”), a company who
creates ink with the same chemical composition as Trident,
brought an antitrust claim against Illinois Tool Works. Independent Ink claimed that Trident unlawfully tied-in its ink
with the sale of its patented printing systems. Id. The district
court granted Illinois Tool Works’ motion for summary judgment and rejected the notion that Illinois Tool Works had a
presumed market power. Id. The Court of Appeals for Federal
Circuit then reversed and held that Illinois Tool Works made
a “fundamental error” by disregarding “the duty of a court of
appeals to follow the precedents of the supreme court until
the court itself chooses to expressly overrule them.” Illinois
Tool Works, Inc. v. Independent Ink, Inc., 396 F.3d 1342,
1351 (Fed. Cir. 2005). The court adhered to prior precedent
and determined that possessing a patent raises a rebuttable
presumption of market power. Id.
The Supreme Court’s Decision
The supreme court decided that it was time to break away
from the past and thus vacated the judgment of the Court of
Appeals. The court’s ruling determined that Congress’s 1988
amendment to the Patent Code required that tying arrangements of patented products should not be evaluated under the
per se rule, which assumed market power. Illinois Tool Works,
126 S. Ct. at 1290. Instead, a plaintiff must supply proof to
demonstrate such market power. Id. at 1291. Although the
court held that some tying-product arrangements are still unlawful, including those that are the product of a true monopoly,
the illegal tie-ins must be shown through proof of power in
the relevant market. Id.
The court relied on the fact that Congressional acts have
led patent misuse doctrine and antitrust law to have differ(Continued on next page)
About the Author
Michael C. Bruck is a partner in the Chicago law firm
of Crisham & Kubes, Ltd. He is a trial lawyer focusing
on the defense of professionals in malpractice actions,
commercial cases and intellectual property litigation. Mr.
Bruck received his B.S. from Purdue University in 1984
and his J.D. from DePaul College of Law in 1988. He is
a member of the DRI, IDC, ISBA, CBA and The Illinois
Society of Trial Lawyers.
37
IDC Quarterly
Technology Law (Continued)
ent standards regarding tying arrangements whereas the
two were previously intertwined. Id. at 1289. Initially, the
principle behind the patent misuse doctrine held that by tying
the purchase of unpatented goods to the sale of the patented
good, the patentee was “restraining competition.” Morton
Salt Co. v. G. S. Suppiger Co. 314 U.S. 488, 490, 62 S. Ct.
402 (1942). This principle applied similarly in antitrust cases
where contracts “[t]end . . . to accomplishment of monopoly.”
International Salt Co. v. United States, 332 U.S. 392, 396,
68 S. Ct. 12 (1947). Consequently, the court held at the time
that selling the license of a patented device on the condition
of using unpatented materials was per se illegal. See Illinois
Tool Works, 126 S. Ct. at 1289.
However, Congress amended the patent misuse doctrine
and excluded conduct such as “the sale of a patented product
tied to an ‘essential’ or ‘nonstaple’ product that has no use except as part of the patented product or method” from the scope
of the patent misuse doctrine. Illinois Tool Works Inc., 126
S. Ct. at 1290. In addition, Congress eliminated the “patentequals-market-power presumption” from the patent misuse
context. 35 U.S.C. §271(d)(5). The supreme court concluded
that market power presumption could not be preserved given
that Congress did away with its very foundation. Illinois Tool
Works, 126 S. Ct. at 1291.
The court’s decision reflects that the economics of tying do
not necessarily confer market power. Strong global competition and markets frequently prevent a patent holder from cornering a market. The availability of close substitutes undercuts
the idea that the existence of a patent equates to power.
Prior to the mid-1970s, the supreme court held to the view
that tying arrangements constituted improper extensions of
patent monopoly under the patent misuse doctrine and resulted
in unfair competition and illegal trade restrictions. See U.S.
v. Loew’s Inc., 371 U.S. 38, 83 S. Ct. 97 (1962). The court
reasoned that “the essential characteristic of an invalid tying
arrangement lies in the seller’s exploitation of its control over
the tying product to force the buyer into the purchase of a tied
product that the buyer either did not want at all, or might have
preferred to purchase elsewhere on different terms.” Jefferson
Parish Hospital Dist. No. 2 v. Hyde, 466 U.S. 2, 12, 104 S.
Ct. 1551 (1984).
However, the court’s view of tying arrangements changed
with time. Beginning as a four-judge dissent in Fortner I, the
court acknowledged that tying might serve a legitimate purpose and provide “uniquely advantageous deals.” Fortner I,
394 U.S. at 519. Later, after Fortner I was remanded, Fortner
II allowed a tie-in. The Fortner II court rejected the assumption that tying arrangements served no purpose other than
38
the suppression of competition. U.S. Steel Corp. v. Fortner
Enterprises, Inc., 429 U.S. 610, 622, 97 S. Ct. 861 (1977).
The supreme court then moved one more step forward and
rejected the notion that the tying together of non-patented
items created a per se presumption of market power. Jefferson
Parish, 466 U.S. at 45-47. Instead, the court held that the
presumption is only appropriate if the existence of forcing is
probable. Id. Finally, with the Illinois Tool Works decision, the
court has now come 180-degrees and extended that ruling to
include the tying of patented products with unpatented tie-ins.
“Initially, the principle behind
the patent misuse doctrine held
that by tying the purchase of
unpatented goods to the sale of
the patented good, the patentee
was ‘restraining competition.’ ”
Conclusion
The supreme court acknowledged that “Congress, the
antitrust enforcement agencies, and most economists have
all reached the same conclusion that a patent does not necessarily confer market power upon the patentee.” Illinois Tool
Works, 126 S. Ct. at 1293. The court’s decision was essential
to stay in tune with the current economic and political climates. Although some critics are concerned that losing the
market power presumption will allow large corporations to
dominate and make it difficult for small companies to bring
litigation, the economic realities of the market indicate that
the court’s decision will allow patent holders to benefit and
most likely consumers as well. Of course, time will tell if the
court’s predictions are correct.
Second Quarter 2006
Recent Decisions
By: Stacy Dolan Fulco
Cremer, Kopon, Shaughnessy & Spina, LLC
Chicago
FORUM NON CONVENIENS
Illinois Supreme Court Upholds
Denial Of Transfer Motion
In Langenhorst v. Norfolk Southern Railway Co., 2006
WL 487878 (Ill. S. Ct. March 2, 2006) the plaintiff sought
damages for the death of her husband following a train-motor
vehicle accident in Clinton County. The defendants moved
to transfer the action to Clinton County under the doctrine of
forum non conveniens. The circuit court denied the motion and
the appellate court affirmed the ruling. The Illinois Supreme
Court allowed the defendants’ petition for leave to appeal.
The decedent was a resident of Clinton County. The accident occurred when he was hit by a Norfolk train at a railroad
crossing in Clinton County, near the St. Clair County line.
Norfolk is a foreign corporation domiciled in Virginia and
has a registered agent in St. Clair County. Defendant Samuel
Baggett was a Norfolk employee and a resident of Patoka,
Indiana. Defendant Keith Egmon was a Norfolk employee
and a resident of Hazelton, Indiana. Defendant Jimmy Ellis
was a Norfolk employee and a resident of Decatur, Illinois
in Macon County. The decedent was transported by a New
Baden, Clinton County ambulance to St. Joseph’s Hospital
in Breese, Clinton County. According to the defendant, fire
departments from neighboring Germantown and Albers in
Clinton County responded to the accident. St. Joseph’s Hospital was not equipped to treat the decedent’s neurological
injuries and he was transported by helicopter to St. Louis
University Hospital in St. Louis, Missouri. The decedent
ultimately died shortly after arriving at St. Louis University
Hospital. Clinton County Sheriff’s Deputies investigated and
prepared an accident report. Langenhorst, 2006 WL 487878
at *1-2.
The plaintiff filed suit in St. Clair County, Illinois. The
defendants filed a motion to transfer this action to Clinton
County based on the doctrine of forum non conveniens. The
individual defendants each filed an affidavit in support of
the motion stating, “It would not be inconvenient for me to
appear in Clinton County, Illinois for the trial of this case.”
Langenhorst, 2006 WL 487878 at *3. Following arguments,
the circuit court judge stated that the factors did not strongly
favor transfer and denied the defendants’ motion to transfer
based on forum non conveniens. The appellate court affirmed
this ruling under the guidelines of Dawdy v. Union Pacific
R.R. Co., 207 Ill. 2d 167, 797 N.E.2d 687 (2003), and First
American Bank v. Guerine, 198 Ill. 2d 511, 764 N.E.2d 54
(2002). Langenhorst, 2006 WL 487878 at *4. The Illinois
Supreme Court allowed the petition for leave to appeal and
allowed the Illinois Trial Lawyers Association leave to file
an amicus brief.
The court began its analysis by noting that the venue statute,
Section 2-101 of the Code of Civil Procedure, provides: “Every action must be commenced (1) in the county of residence
of any defendant who is joined in good faith and with probable
cause for the purpose of obtaining a judgment against him
or her and not solely for the purpose of fixing venue in that
county, or (2) in the county in which the transaction or some
part thereof occurred out of which the cause of action arose.”
735 ILCS 5/2-101. The Illinois Supreme Court has recognized
that “the Illinois venue statute is designed to insure that the
action will be brought either in a location convenient to the
defendant, by providing for venue in the county of residence,
or convenient to potential witnesses by allowing for venue
where the cause of action arose.” Baltimore & Ohio R.R. Co.
v. Mosele, 67 Ill. 2d 321, 328, 368 N.E.2d 88 (1977). Despite
conceding that St. Clair County is a proper venue, the de(Continued on next page)
About the Author
Stacy Dolan Fulco is a partner at the Chicago law firm of
Cremer, Kopon, Shaughnessy & Spina, LLC. She practices
primarily in the areas of premises liability, products liability
and wrongful death defense. She received her undergraduate degree at Illinois State University and her J.D./M.B.A.
degree from DePaul University. She is a member of the IDC.
39
IDC Quarterly
Recent Decisions (Continued)
fendants asserted that the doctrine of forum non conveniens
required transfer because St. Clair County has “no practical
connection” to the parties and the location of the accident.
Langenhorst, 2006 WL 487878 at *5.
A forum non conveniens motion “causes a court to look
beyond the criterion of venue when it considers the relative
convenience of a forum.” Bland v. Norfolk & Western Ry.
Co., 116 Ill. 2d 217, 226, 506 N.E.2d 1291 (1987). The fact
that a defendant conducts business within the county is not
the only factor the court should consider in its analysis. Vinson v. Allstate, 144 Ill. 2d 306, 311, 579 N.E.2d 857 (1991).
Furthermore, forum non conveniens is an equitable doctrine
founded in consideration of fundamental fairness and the
sensible and effective administration of justice. Vinson,
144 Ill. 2d at 310, 579 N.E.2d 857. The doctrine allows a
trial court to decline jurisdiction when trial in another forum
“would better serve the ends of justice.” Vinson, 144 Ill. 2d
at 310, 579 N.E.2d 857. Langenhorst, 2006 WL 487878
at *5.
The Illinois Supreme Court has repeatedly noted that the forum non conveniens doctrine gives courts discretionary power
that should be exercised only in exceptional circumstances
when the interests of justice require a trial in a more convenient forum. See Guerine, 198 Ill. 2d at 520, 764 N.E.2d 54;
Peile v. Skelgas, Inc., 163 Ill. 2d 323, 335-36, 645 N.E.2d 184
(1994); Torres v. Walsh, 98 Ill. 2d 338, 346, 456 N.E.2d 601
(1983); Dawdy, 207 Ill. 2d at 176, 797 N.E.2d 687. However,
the plaintiff’s interest in choosing the forum receives “somewhat less deference when neither the plaintiff’s residence
nor the site of the accident or injury is located in the chosen
forum.” Guerine, 198 Ill. 2d at 517, 764 N.E.2d 54. In most
instances, the plaintiff’s initial choice of forum will prevail,
provided venue is proper and the inconvenience factors attached to such forum do not greatly outweigh the plaintiff’s
substantial right to try the case in the chosen forum. Guerine,
198 Ill. 2d at 520, 764 N.E.2d 54. In deciding a forum non
conveniens motion, a court must consider all of the relevant
factors, without emphasizing any one factor. Dawdy, 207 Ill.
2d at 175-76, 797 N.E.2d 687. Each forum non conveniens
case must be considered as unique on its facts. Satkowiak v.
Chesapeake & Ohio Ry. Co., 106 Ill. 2d 224, 228, 478 N.E.2d
370 (1985). Langenhorst, 2006 WL 487878 at *5.
In Guerine, 198 Ill. 2d 511, 764 N.E.2d 54, the Illinois
Supreme Court restated the private and public interest factors
to be considered in applying the doctrine of forum non conveniens. Private interest factors include: (1) the convenience
of the parties; (2) the relative ease of access to sources of
testimonial, documentary, and real evidence; and (3) all other
40
practical problems that make trial of a case easy, expeditious,
and inexpensive. Public interest factors include: (1) the interest
in deciding controversies locally; (2) the unfairness of imposing trial expense and the burden of jury duty on residents of
a forum that has little connection to the litigation; and (3) the
administrative difficulties presented by adding litigation to
already congested court dockets. Guerine, 198 Ill. 2d at 51617, 764 N.E.2d 54.
These factors are relevant considerations for both interstate
and intrastate forum non conveniens analysis. The burden is on
the defendant to show that relevant private and public interest
factors “strongly favor” the defendant’s choice of forum to
warrant disturbing the plaintiff’s choice. The private interest
“The burden is on the defendant
to show that relevant private and
public interest factors ‘strongly
favor’ the defendant’s choice of
forum to warrant disturbing the
plaintiff’s choice.”
factors are not weighed against the public interest factors;
rather, the trial court must evaluate the total circumstances of
the case in determining whether the defendant has proven that
the balance of factors strongly favors transfer. Guerine, 198
Ill. 2d at 518, 764 N.E.2d 54. Unless the balance of factors
strongly favor a defendant’s choice of forum, the plaintiff’s
choice of forum should rarely be disturbed. Gulf Oil Corp.
v. Gilbert, 330 U.S. 501, 67 S. Ct. 839 (1947). Langenhorst,
2006 WL 487878 at *7.
The Langenhorst court noted that in the instant case,
like Guerine, both St. Clair County and Clinton County had
significant ties to the case and the potential witnesses were
scattered throughout several counties in the state, as well as
Indiana and Missouri. The court also noted that the defendants
mischaracterized the facts. First, the defendants ignored the
fact that Norfolk, a foreign corporation, recognized St. Clair
County as an appropriate forum by designating a registered
Second Quarter 2006
agent for service. Second, the defendants ignored important
witnesses located in Belleville, St. Clair County, St. Louis,
Missouri, and Springfield, Sangamon County, Illinois. Finally,
the defendants listed ambulance personnel, hospital personnel, firefighters, and auto body repair personnel from Clinton
County as potential witnesses, but did not identify who the
people were, where they lived, or what, if any, relevant testimony they might provide. Langenhorst, 2006 WL 487878 at
*9.
In weighing the private and public interest factors, the
court concluded that the total circumstances of the case did
not strongly favor transfer to Clinton County. The court
recognized that “it is assumed on a forum non conveniens
motion that the plaintiff’s chosen forum is a proper venue for
the action” and the plaintiff’s choice of forum is entitled to
substantial deference. Guerine, 198 Ill. 2d at 521, 764 N.E.2d
54. However, neither the plaintiff’s residence nor the site of
the accident was located in St. Clair County and, therefore, the
plaintiff’s choice of St. Clair County was entitled to somewhat
less deference. Guerine, 198 Ill. 2d at 517, 764 N.E.2d 54;
Dawdy, 207 Ill. 2d at 173-74, 797 N.E.2d 687. Even so, while
the deference to be accorded to a plaintiff regarding his choice
of forum is less when the plaintiff chooses a forum other than
where he resides, the deference to be accorded is only less,
as opposed to none. Guerine, 198 Ill. 2d at 518, 764 N.E.2d
54. Langenhorst, 2006 WL 487878 at *9.
In weighing the private interest factors, the court noted that
although the accident occurred in Clinton County, a view of
the accident site is not appropriate because the record showed
that the area was substantially changed. On the other hand,
the plaintiff’s investigator, who resided in St. Clair County,
was the only witness who documented in photographs and
videotape the crossing conditions at the time of the accident.
In addition, the defendants failed to show that trial in Clinton
County was favored because it was the county where the accident occurred.
Even though the accident occurred in Clinton County, the
only eyewitnesses to the accident resided in Indiana, and it
appeared the majority of the relevant trial witnesses did not
reside in Clinton County. Langenhorst, 2006 WL 487878 at
*10.
Importantly, no affidavits were filed stating that St. Clair
County would be an inconvenient forum for any of the witnesses. Therefore, not only did the defendants not claim
any inconvenience whatsoever in trying the case in St. Clair
County, the defendants did not show any impediments to
accessing sources of testimonial, documentary, and real evidence. None of the defendants’ arguments asserted any real
inconvenience to anyone or any practical problems militating
against trying the case in St. Clair County. The court again
noted that the defendant must show that the plaintiff’s chosen
forum is inconvenient to the defendant and that another forum
is more convenient to all parties to be successful under the
doctrine of forum non conveniens. Guerine, 198 Ill. 2d at 518,
764 N.E.2d 54. Langenhorst, 2006 WL 487878 at *10.
Considering the public interest factors, Clinton County had
an interest in deciding a controversy involving an accident that
occurred in Clinton County but the facts demonstrated that St.
Clair County also had a legitimate interest in deciding a local
controversy involving one of its residents, Norfolk, a foreign
corporation that had its registered agent located in its county.
Norfolk railroad tracks traversed all of St. Clair County, with
approximately eight trains per day passing the Langenhorst
property in Clinton County and entering St. Clair County on
the same railroad line. Thus, the defendants failed to show
that St. Clair County had no connection to this litigation.
Furthermore, transfer to Clinton County was not required
by the court docket of St. Clair County, particularly when
one of the defendants was a “resident” of St. Clair County.
Moreover, in ruling on the defendants’ motion, the St. Clair
County circuit court did not note any administrative problems
in relation to its court docket or in its ability to try the case
in an expeditious manner. For these reasons, the defendants
did not show that the case would be resolved more quickly in
Clinton County than in St. Clair County. Langenhorst, 2006
WL 487878 at *11.
Thus, the court evaluated the total circumstances of the
case and concluded that the balance of private and public
interest factors did not strongly favor Clinton County over St.
Clair County. The defendants failed to meet their burden of
showing that there is “no connection” to St. Clair County, that
any of the defendants or witnesses would be inconvenienced
by a trial in St. Clair County, that trial would be impractical
in St. Clair County, or that it would be unfair to burden the
citizens of St. Clair County with trial in this case. The court
held that the trial court did not abuse its discretion in denying an intrastate forum non conveniens motion to transfer
the case to an adjacent county when, as here, most of the
potential trial witnesses are scattered and no single county
enjoys a predominant connection to the litigation. In fact, the
court noted that based on the location of the defendants and
material witnesses, as well as the location of the evidence,
St. Clair County appeared to be a more convenient forum for
the defendants as well as the plaintiff. Langenhorst, 2006 WL
487878 at *12.
41
IDC Quarterly
DUTY OF CARE
Alternative Theory to Natural
Accumulation of Ice/Snow Defense
In Radovanovic v. Wal-Mart Stores East, Inc., 2006 WL
305890 (N.D.Ill. February 2, 2006), the plaintiff filed a negligence action against the defendant Wal-Mart after he slipped
and fell on a patch of ice located on the premises of a Wal-Mart
store. After suit was filed, the matter was removed to federal
court by the defendant under a claim based on diversity as
the defendant was a foreign corporation.
The plaintiff’s incident took place on February 10, 2001.
Prior to the incident, the plaintiff was walking toward the main
entrance of the store when he noticed the gate to the store’s
garden center was open. Rather than proceeding to the store’s
main entrance, the plaintiff entered the garden center through
the open gate. After walking about four or five feet past the
gate and into the garden center, the plaintiff slipped and fell on
ice. The garden center was exposed to the open air during the
winter months and not covered with any protective covering
from the elements. The garden center was only open to the
public from March 1 until October 1 and was inaccessible to
customers during the winter months without the supervision
of a store employee. At the time of the incident, two store
employees were assisting a customer with a propane tank in
the garden center, and as a result, had left open the garden
center’s gate. Radovanovic, 2006 WL 305890 at *1.
The plaintiff initially alleged that Wal-Mart caused an unnatural accumulation of ice or snow on its premises. Under
Illinois law, a landowner is liable if an injury results from an
unnatural accumulation of ice or snow, which is an accumulation that results from an artificial cause or from the defendant’s
own creation. Smalling v. LaSalle Nat’l Bank of Chicago, 104
Ill. App. 3d 894, 433 N.E.2d 713, 715 (4th Dist. 1982); Fillpot
v. Midway Airlines, 261 Ill. App. 3d 237, 633 N.E.2d 237,
241 (4th Dist. 1994); Branson v. R & L Investment, Inc., 196
Ill. App. 3d 1088, 554 N.E.2d 624, 629 (1st Dist. 1990). The
plaintiff later conceded that the evidence precluded a finding
that the ice on which he fell was caused by an unnatural accumulation. Radovanovic, 2006 WL 305890 at *2.
The plaintiff changed his theory of liability and argued that
Wal-Mart breached its duty of care that it owed to its business
invitees. The plaintiff argued that Wal-Mart owed him a duty
of care under the Restatement (Second) of Torts, Section 343,
which provides that a possessor of land is subject to liability
for physical harm caused to his invitees by a condition on the
land if, but only if, he (a) knows or by the exercise of reasonable care would discover the condition, and should realize
42
that it involves an unreasonable risk of harm to such invitees,
and (b) should expect that they will not discover or realize
the danger, or will fail to protect themselves against it, and
(c) fails to exercise reasonable care to protect them against
the danger. Harris v. Old Kent Bank, 315 Ill. App. 3d 894,
735 N.E.2d 758, 765 (2d Dist. 2000). Under this standard, a
landlord has a duty to provide invitees with a reasonably safe
means of ingress to and egress from the premises. Id. At the
same time, under the natural accumulation rule, a landowner
has no liability for injuries resulting from ice or snow that
accumulated naturally. Bloom v. Bistro, 304 Ill. App. 3d 707,
710 N.E.2d 121, 123 (1st Dist. 1999); see Radovanovic, 2006
WL 305890 at *2.
The plaintiff in this case argued that independent of any
natural accumulation of snow or ice, Wal-Mart had a duty to
provide a safe means of ingress to and egress from its store.
See McLean v. Rockford Country Club, 352 Ill. App. 3d 229,
816 N.E.2d 403, 410 (2d Dist. 2004). Even considering this
new theory of negligence, the court determined that Wal-Mart
was entitled to summary judgment. The common law rules on
which the parties relied on were in conflict; while landowners have a duty to provide a safe means of ingress and egress
for invitees, they are not liable for injuries that result from
the natural accumulations of ice and snow. The plaintiff’s
negligence claim failed, however, because Wal-Mart satisfied
its duty of providing a reasonably safe means of ingress to
and egress from its store’s premises, its main entrance, and
because the natural accumulation rule relieved it of its duty
to remove the natural accumulation of ice from its garden
center. Radovanovic, 2006 WL 305890 at *3.
The court noted that none of the exceptions to the natural
accumulation rule were applicable to the facts of this case. The
plaintiff correctly recognized that certain cases have found
“exceptions to the ‘natural accumulations’ rule, because property owners have a duty to provide a reasonably safe means
of ingress and egress from their place of business, and this
duty is not abrogated by the presence of a natural accumulation of ice, snow, or water.” Lee v. Phillips Petroleum Co.,
No. 00 C 4070, 2001 U.S. Dist. LEXIS 7478 at *24 (N.D.Ill.
May 31, 2001). Courts have found an exception to the natural
accumulation rule when the plaintiffs suffered injuries while
using the required or “prescribed” means of ingress or egress.
See Johnson v. Abbott Labs., 238 Ill. App. 3d 898, 605 N.E.2d
1098 (2d Dist. 1992). Radovanovic, 2006 WL 305890 at *4.
Another exception to the natural accumulation rule is
found in cases in which the plaintiff alleged the existence of
a defect in the defendant’s building or an underlying hazard
or condition that caused the accumulation of ice or snow. See
Bloom, 304 Ill. App. 3d 707, 710 N.E.2d 121. This exception
Second Quarter 2006
is akin to the unnatural accumulation theory of liability, which
the plaintiff conceded. Moreover, there is no evidence in this
case that any abnormality or defective condition caused the
accumulation of ice such that it would trump the natural accumulation rule. Courts also have declined to apply the natural
“Under Illinois law, a landowner
is liable if an injury results from
an unnatural accumulation of ice
or snow, which is an accumulation that results from an artificial
cause or from the defendant’s
own creation.”
accumulation rule when it was unclear whether an accumulation of ice or snow, as opposed to poor lighting or something
else, was the proximate cause of the plaintiff’s injuries. See
Weber v. Chen, 184 Ill. App. 3d 847, 848-49, 540 N.E.2d 957,
959 (1st Dist. 1989). Radovanovic, 2006 WL 305890 at *4.
For these reasons, the natural accumulation rule was held
to apply to the plaintiff’s claim of negligence, relieving WalMart of liability for the plaintiff’s injuries. Because the natural
accumulation rule applied to the plaintiff’s claim of liability
and because Wal-Mart provided a safe means of ingress into
and egress from its store, Wal-Mart was entitled to summary
judgment. Radovanovic, 2006 WL 305890 at *4.
STATUTE OF LIMITATIONS
When Sexual Abuse Victim Should Have
Known Of Injury is Question Of Fact
In Softcheck v. Bishop Joseph L. Imesch, 2006 WL 120357
(Ill. App. 3d Dist. January 13, 2006), two cases were consolidated for appeal. The plaintiffs in both cases filed suit against
priests and the Diocese alleging sexual misconduct by the
priests many years before when the plaintiffs were young.
The defendants filed motions to dismiss based on the alleged
statute of limitations. The defendants argued that the amendments to Section 13-202.2 of the Code of Civil Procedure, the
statute applicable to childhood sexual abuse cases, became
effective in 2003 and cannot apply retroactively to these
cases. The circuit court of Will County granted the motions
to dismiss and the plaintiffs appealed.
The amendment to Section 13-202.2 became effective July
24, 2003. The statute, as amended, reads in pertinent part, as
follows; (b) Notwithstanding any other provision of law, an
action for damages for personal injury based on childhood
sexual abuse must be commenced within 10 years of the
date the limitation period begins to run under subsection (d)
or within 5 years of the date the person abused discovers or
through the use of reasonable diligence should discover both
(i) that the act of childhood sexual abuse occurred and (ii)
that the injury was caused by the childhood sexual abuse.
The fact that the person abused discovers or through the use
of reasonable diligence should discover that the act of childhood sexual abuse occurred is not, by itself, sufficient to start
the discovery period under this subsection (b). Knowledge of
the abuse does not constitute discovery of the injury or the
causal relationship between any later-discovered injury and
the abuse. 735 ILCS 5/13-202.2(b); see also, Softcheck, 2006
WL 120357 at *1.
The plaintiffs initially filed suit before the amendment to
the statutes of limitations and the complaints were dismissed
without prejudice. The plaintiffs then asked for an extension of
time to file their amended complaints and after the amendment
to Section 13-202.2 became effective, the plaintiffs filed their
amended complaints. The defendants then again filed motions
to dismiss arguing that Section 13-202.2, as amended, cannot
revive a time-barred cause of action, and even assuming that
the amended statute did apply, a reasonably diligent person
would have discovered the acts of abuse and their causal relationship to the plaintiffs’ emotional problems earlier than the
plaintiffs in this case. The circuit court granted the motions
to dismiss and the plaintiffs appealed. Softcheck, 2006 WL
120357 at *2.
The appellate court noted that to determine whether the
plaintiffs’ complaints were time barred, it must first determine
the appropriate statute of limitations applicable to the plaintiffs’ claims and whether that statute was tolled. Under the
Landgraf test, if the legislature has clearly indicated what the
temporal reach of an amended statute should be, then, absent a
constitutional prohibition, that expression of legislative intent
must be given effect. However, when the legislature has not
indicated what the reach of a statute should be, then the court
43
IDC Quarterly
must determine whether applying the statute would have a
retroactive impact, i.e., whether it would impair rights a party
possessed when he acted, increase a party’s liability for past
conduct, or impose new duties with respect to transactions
already completed. Landgraf v. USI Film Products, 511 U.S.
244 at 280, 114 S. Ct. 1483 at 1505, (1994). If there would
be no retroactive impact, as that term is defined by the court,
then the amended law may be applied. Landgraf, 511 U.S.
at 273-74, 275, 114 S. Ct. at 1501, 1502. If, however, applying the amended version of the law would have a retroactive
impact, then the court must presume that the legislature did
not intend that it be so applied. Landgraf, 511 U.S. at 280,
114 S. Ct. at 1505; Softcheck, 2006 WL 120357 at *3.
In accordance with the Landgraf test, the defendants first
argued that amended Section 13-202.2 contained no express
legislative intent that it be applied retroactively to revive previously time-barred causes of action. The defendants argued
that even if the language referring to “pending” cases was
interpreted as implying some intent that the amendment be
applied retroactively, the extent to which the statute should
be applied retroactively was nonetheless unclear because,
by “pending” cases, the legislature may have meant those
past cases where the limitations period has expired, or those
where it has not. Alternatively, the defendants argued that to
apply Section 13-202.2 retroactively would deprive them of
their right to due process, in that the defendants had a “settled
expectation” or a “vested right” in the expiration of the statute
of limitations as a defense. Softcheck, 2006 WL 120357 at
*3-4.
The plaintiffs asserted that they did not seek to take advantage of any extended time periods afforded by amended
Section 13-202.2, but merely sought to invoke “the clarifying language added concerning whether ‘discovery’ has
occurred.” To that end, the plaintiffs argued that amended
Section 13-202.2 replaced the common law discovery rule.
The appellate court did not agree. The basis for the plaintiffs’
argument that the amended Section 13-202.2 superseded
the common law discovery rule was their belief that Clay v.
Kuhl, 189 Ill. 2d 603, 727 N.E.2d 217 (2000) stood for the
proposition that “the discovery rule cannot be invoked to toll
the statute of limitations where the complaint alleges injury
contemporaneous with the wrongful conduct.” However, the
Clay court clearly stated that under the common law discovery
rule, a party’s cause of action accrues when the party knows
or reasonably should know of an injury and that the injury
was wrongfully caused.” Clay, 189 Ill. 2d at 608, 727 N.E.2d
at 220. Softcheck, 2006 WL 120357 at *5.
The court indicated that there is no essential difference
44
between the common law discovery rule and the language in
Section 13-202.2. Each requires a person to act reasonably
(compare “reasonably should know,” and “through the use of
reasonable diligence should discover”) to discover the cause
of their injuries (compare “the injury was wrongfully caused”
and “the injury was caused by the childhood sexual abuse”).
The statement in amended Section 13-202.2 that knowledge
of the abuse does not constitute discovery of the injury or the
causal relationship between any later-discovered injury and
the abuse does not change the basic inquiry. Accordingly,
“However, when the legislature has
not indicated what the reach of a
statute should be, then the court
must determine whether applying
the statute would have a retroactive
impact, i.e., whether it would impair
rights a party possessed when he
acted, increase a party’s liability for
past conduct, or impose new duties
with respect to transactions already
completed.”
the appellate court held that, while they agreed that amended
Section 13-202.2 does not apply to the plaintiffs’ complaints,
the trial court properly could have applied the discovery rule
if the plaintiffs pled sufficient facts to invoke it. Softcheck,
2006 WL 120357 at *5.
The appellate court next evaluated whether the plaintiffs
pled sufficient facts to invoke the “discovery rule.” The defendants argued that the plaintiffs reasonably should have known
or should have discovered their injuries and the causes of those
injuries no later than age 28. The plaintiffs claimed they did
not realize the wrongfulness of the defendants’ actions until
Second Quarter 2006
jury instructions
Please submit non-IPI
NON-IPI
hearing of other cases of sexual abuse against minors involving priests. The defendants asserted that it is a universal truth
that a reasonably prudent person knows, no later than age 28,
that adults do not have sex with children because it harms the
child and is a crime, or, in the alternative, that the extensive
media coverage of the issue would have caused a reasonably
prudent person to know the wrongfulness of what happened
to the plaintiffs sooner. Softcheck, 2006 WL 120357 at *5.
The issue of whether an action was brought within the
time allowed by the discovery rule is generally resolved as
a question of fact. County of Du Page v. Graham, Anderson,
Probst & White, Inc., 109 Ill. 2d 143, 153-54, 485 N.E.2d
1076 (1985). The question may be determined as a matter of
law when the answer is clear from the pleadings. If there is a
disputed question of fact about when an injured party knows
or reasonably should have known of his injury and that it was
wrongfully caused, it is to be resolved by the finder of fact.
Holladay v. Boyd, 285 Ill. App. 3d 1006, 1013, 675 N.E.2d
262, 266 (1st Dist. 1996). Here, the court determined that a
question of fact remained as to when the plaintiffs discovered,
or reasonably should have discovered, that their injuries were
caused by the alleged abuse. The court indicated that unlike in
Clay, the answer was not clear from the pleadings. Softcheck,
2006 WL 120357 at *6.
The court determined that the plaintiffs alleged they lacked
sophistication to perceive psychological or emotional harm or
injury proximately resulting from the defendants’ behavior.
The plaintiffs also alleged they did not begin to perceive the
wrongfulness of the conduct of the defendants until 2002.
While the defendants disputed the reasonableness of that assertion, in resolving a motion to dismiss, a court must assume
that all well-pled facts are true and may consider all reasonable
inferences that can be drawn from those facts. Salisbury v.
Majesky, 352 Ill. App. 3d 1188, 1190, 817 N.E.2d 1219, 1221
(3d Dist. 2004). The court commented that it did not determine
that the plaintiffs’ allegations were reasonable. It merely accepted those allegations as true, as it must, and found that the
allegations were sufficiently distinct from those in Clay that
the issue could not be resolved as a matter of law. The final
determination of the objective reasonableness of the plaintiffs’ allegations must be made by the trier of fact. For these
reasons, the appellate court held that the plaintiffs’ causes of
action were not barred by the statute of limitations because
the plaintiffs pled adequate facts to invoke the discovery rule
and the dismissal of the complaints was reversed. Softcheck,
2006 WL 120357 at *6.
jury instructions
accepted by trial
judges to a member of
the Editorial Board for
inclusion in future Jury
Instructions columns.
45
IDC Quarterly
Supreme Court Watch
By: Beth A. Bauer
Burroughs, Hepler, Broom, MacDonald, Hebrank & True, LLP
Edwardsville
On January 25, 2006, the Illinois Supreme Court granted
Petitions for Leave to Appeal in the following civil cases of
general interest.
Are Amendments to a Complaint
Without Leave of Court a Nullity?
Young v. North Shore Gas Corp., Gen. No. 101465, First
Dist. 1-04-0155
The original plaintiffs in this action filed a two-count
complaint against the original defendants for alleged mercury contamination of their homes. After one of the original
defendants was dismissed pursuant to motion, the trial court
entered an order permitting the original plaintiffs to file an
amended complaint. The original plaintiffs did so, adding
several new defendants and 46 new plaintiffs. Thirty-nine of
the newly-added plaintiffs asserted causes of action against
the original defendants. Seven of the newly-added plaintiffs
asserted causes of action against newly-added defendants.
The newly-added defendants filed separate motions to dismiss
pursuant to 735 ILCS 5/2-619, arguing that the amended
complaint added new parties without leave of court and as
such was a nullity. The trial court agreed, reasoning that adding parties in the first amended complaint without leave of
court undermined the administrative function of the court and
interfered with the newly-added defendants’ rights to receive
proper notice and to manage their responses to an individual
complaint.
The newly-added plaintiffs appealed to the First District
Appellate Court. The appellate court recognized that the First
and Second Districts had found that the addition of parties
without leave of court constitutes a jurisdictional defect and
that an amended complaint is a nullity as to the improperly46
joined parties, citing Stichauf v. Cermak Road Realty, 236
Ill. App. 3d 557, 603 N.E.2d 828 (1st Dist. 1992) and Goins
v. Mercy Center for Health Care Services, 281 Ill. App. 3d
480, 667 N.E.2d 652 (2d Dist. 1996). The appellate court also
considered the Fourth District’s decision in Fischer v. Senior
Living Properties, L.L.C., 329 Ill. App. 3d 551, 771 N.E.2d
505 (4th Dist. 2002) and the Fifth District’s decision in Savage v. Mui Pho, 312 Ill. App. 3d 553, 727 N.E.2d 1052 (5th
Dist. 2000). In each of those opinions the appellate court held
that securing leave of court to add parties is a discretionary
matter and, therefore, declined to deem a complaint a nullity
as to parties added without leave of court.
The First District declined to depart from its precedent and
affirmed the order of the trial court.
The newly-added plaintiffs now ask the Illinois Supreme
Court to review whether their complaint is a nullity. They argue that the division among the four districts of the appellate
court that have decided the issue warrants the Illinois Supreme
Court’s review and determination of the issue. Further, the
newly-added plaintiffs urge the court to follow the reasoning
of the Fourth and Fifth Districts and hold that seeking leave
to add parties is merely discretionary.
Does a Plaintiff Have a Duty to Preserve
Evidence for Her Subsequent Lawsuit?
Sublett v. Allied Health Care Products, Inc., Gen. No.
101678, Second Dist. 2-05-1214
The plaintiff claimed that her husband was injured by a
defective respiratory device, which was allegedly produced
and manufactured by the defendant. The defendant denied
all of the plaintiff’s allegations of liability and damages and
asserted affirmative defenses, averring that the plaintiff had a
About the Author
Beth A. Bauer concentrates her practice in the area of
appellate practice at Burroughs, Hepler, Broom, MacDonald, Hebrank and True in Edwardsville. She graduated
cum laude from St. Louis University School of Law in
2000 and received her B.A. with honors from Washington
University in 1997. Ms. Bauer is a member of the Illinois
and Missouri State Bar Associations and National Christian
Legal Society.
Second Quarter 2006
duty to preserve the device in question, that she breached that
duty by discarding the device, and that the plaintiff thereby
caused irreparable harm to the defendant. The defendant filed
a motion for summary judgment on its affirmative defense of
spoliation of evidence, citing the plaintiff’s testimony as to
the physical description of the device, which did not match
that of any device the defendant manufactured or distributed
in the relevant period.
The trial court granted the defendant’s motion for summary
“The trial court granted the defendant’s motion for summary judgment,
noting that a duty to preserve evidence
can arise in special circumstances and
that the plaintiff was on notice of her
potential claim.”
judgment, noting that a duty to preserve evidence can arise
in special circumstances and that the plaintiff was on notice
of her potential claim. The trial court further found that the
defendant suffered extremely severe prejudice due to the
plaintiff’s destruction of the critical evidence, which deprived
the defendant of an opportunity to defend the case.
On appeal, the Appellate Court for the Second District
reversed the trial court’s ruling and remanded the case to the
trial court. It found that no circumstance existed to create a
duty of the plaintiff to preserve the evidence at the time that
it was discarded.
The defendant argues to the Illinois Supreme Court that
the Second District misapplied the Illinois Supreme Court’s
controlling precedent, Boyd v. Travelers Insurance Co., 166
Ill. 2d 188, 652 N.E.2d 267 (1995) and Dardeen v. Kuehling,
213 Ill. 2d 329, 821 N.E.2d 227 (2004), by requiring a “special
relationship” before a duty to preserve evidence can arise in
the spoliation context. The defendant also contends that this
“special relationship” requirement conflicts with the Fifth
District Appellate Court’s decision in Jones v. O’Brien Tire
and Battery Service Center, Inc., 322 Ill. App. 3d 418, 752
N.E.2d 8 (5th Dist. 2001). In Jones the appellate court found
that a duty to preserve evidence arises when the party has
possession of the product in question and the party knew or
should have known that the product was evidence relevant to
future litigation.
Should the Bases on Which a Parent
Company May be Liable for a Subsidiary’s
Actions be Expanded?
Forsythe v. Clark USA, Inc., Gen. No. 101570, First Dist.
1-04-0448 and 1-04-0450, Consolidated
The plaintiffs’ decedents, who were killed in a workplace
accident, were employees of the defendant’s subsidiary. The
plaintiffs received the payments to which they were entitled
under the Illinois Workers’ Compensation Act. The plaintiffs,
however, filed suit against the defendant parent company for
negligence. They allege that the parent company imposed on
its subsidiary an “overall business strategy” of reducing costs
and capital expenditures, which allegedly caused the subsidiary to cut corners on safety issues. Such cuts purportedly
contributed to the accident that killed the plaintiffs’ decedents.
The circuit court granted summary judgment for the parent
company, concluding that this theory failed as a matter of law.
The First District Appellate Court reversed, holding that
the parent company’s adoption of a specific financial strategy
could be deemed “direct participation” in the subsidiary’s
allegedly negligent conduct. As such, an independent cause
of action for negligence against the parent company exists.
One justice of the appellate court dissented, arguing that the
majority had misapplied the law that precludes the imposition
of liability based on routine supervisory activity.
The parent company asserts to the Illinois Supreme Court
that the First District Appellate Court’s decision is contrary
to decades of established Illinois law, mandating respect for
the separate entities of parent and subsidiary corporations unless a plaintiff can meet the heavy burden of showing that the
corporate veil should be pierced, citing Main Bank of Chicago
v. Baker, 86 Ill. 2d 188, 427 N.E.2d 94 (1981). The parent
company further argues that the appellate court erred in finding
that the parent company’s activities in this case, such as the
right as an owner to control the subsidiary’s business strategy,
constituted “direct participation” in the subsidiary’s alleged
misconduct. According to the parent company, the appellate
court’s expansion of the direct participation doctrine is unprec(Continued on next page)
47
IDC Quarterly
Supreme Court Watch (Continued)
edented, not only in Illinois but throughout the United States.
Further, the parent company argues that such an expansion is
dangerous in that it eviscerates the concept of limited liability
on which investors in Illinois and the nation have historically
relied. Finally, the parent company contends that allowing the
expansion of the direct participation doctrine creates a gaping hole in the Workers’ Compensation Act scheme, which
is the exclusive remedy for workplace accidents. See Kotecki
v. Cyclops Welding Corp., 146 Ill. 2d 155, 585 N.E.2d 1023
(1991) (holding that an employer can be sued for contribution,
but that its liability is limited by the Workers’ Compensation
Act).
“Finally, the parent company
contends that allowing the expansion of the direct participation doctrine creates a gaping
hole in the Workers’ Compensation Act scheme, which is the
exclusive remedy for workplace
accidents.”
Is There CGL Coverage for Sending
Unsolicited Faxes?
Valley Forge Insurance Co. v. Swiderski Electronics, Inc.,
Gen. No. 101261, Second Dist. 2-04-0910
The insured defendant tendered to the plaintiffs, commercial general liability insurers, a class action complaint,
which alleged that the insured had sent unsolicited facsimile
advertisements to a class of plaintiffs in violation of the
Telephone Consumer Protection Act (“TCPA”), 47 U.S.C.
§227, et seq., and the Illinois Consumer Fraud and Deceptive
Business Practices Act, 815 ILCS 505/2. The insurers denied
48
the insured’s request for defense and indemnity, claiming
that the underlying claims did not fall within the coverage of
the general liability insurance policies at issue. The insurers
then filed the instant declaratory judgment action, seeking a
determination that they had no duty to defend or indemnify
the insured.
The policies at issue afford coverage for “damages because
of ‘personal and advertising injury’ to which this insurance
applies.” The policies expressly state that the insurance “does
not apply to . . . ‘[p]ersonal and advertising injury’ caused by
an act at the direction of the insured with the knowledge that
the act would violate the rights of another and would inflict
‘personal and advertising injury.’”
In the trial court, the parties filed cross-motions for partial
summary judgment on the duty to defend issue. The trial court
granted the insured’s motion and denied the insurers’ motion;
however, the court entered a Rule 304(a) finding, permitting
an immediate appeal of its partial summary judgment ruling.
The Appellate Court for the Second District affirmed the
trial court, following the reasoning of recent federal district
court decisions on this same issue. The Second District acknowledged recent contrary decisions by the Seventh and
Fourth Circuit Courts of Appeal in American States Insurance
Co. v. Capital Associates of Jackson County, Inc., 392 F.3d
939 (7th Cir. 2004), and Resource Bankshares Corp. v. St.
Paul Mercury Insurance Co., 407 F.3d 631 (4th Cir. 2005).
According to the insurers, both cases held that the sending of
unsolicited facsimile advertisements was not an “advertising
injury” covered under a general liability insurance policy.
The Second District Appellate Court expressly disagreed
with these decisions, holding that the average person would
reasonably understand that he would be covered under the
advertising injury provision of the policy. Further, according to the insurers, the appellate court ignored the allegation
that the facsimile sent to the class plaintiffs was part of the
insured’s policy and practice of sending unsolicited facsimiles
throughout Illinois. Instead, the appellate court concluded
that the language of the underlying complaint left open the
possibility that the insured negligently sent the facsimile to
the class plaintiffs.
The insurers ask the Illinois Supreme Court to reconcile
the division among courts applying Illinois law – the Second
District Appellate Court and the Seventh Circuit Court of Appeals. The insurers seek resolution of the question of whether
a claim under the TCPA arising out of the alleged receipt of
unauthorized facsimile advertisements constitutes an “advertising injury” under a standard general liability policy.
Second Quarter 2006
Product Liability
By: James W. Ozog
Wiedner & McAuliffe, Ltd.
Chicago
Product Liability and the
Illinois Consumer Fraud Act
Pappas v. Pella Corporation, 844 N.E. 2d 995, 300 Ill.
Dec. 552 (1st Dist. 2006)
The First District Appellate Court recently analyzed the
application of the Illinois Consumer Fraud and Deceptive
Practices Act in a consumer class action alleging a defective
product. This case affirms a liberal standard for proving product “defect” under the Act as compared to the more stringent
proof required under strict liability in tort.
The plaintiff, in Pappas, brought an action under the Illinois Consumer Fraud and Deceptive Practices Act alleging
that the manufacturer’s windows were defective and caused
the window frames to rot. The plaintiffs alleged that Pella
Corporation knew of and concealed or failed to disclose to
the plaintiffs the following facts: 1) the aluminum cladding
applied to the bottom sash of the windows was manufactured
and designed with an upwards facing seam that allowed water
to enter the space between the aluminum cladding and wooden
sash; 2) the butyl sealant applied to the upward facing seam
would prematurely deteriorate and allow water to enter the
space; 3) the preservative applied to the wooden sash failed to
prevent deterioration and wood rot; and 4) the wooden sashes
of the aluminum clad windows were deteriorating and rotting
due to water damage.
The plaintiffs alleged that all of the aluminum clad windows manufactured and sold by the defendant, including the
windows sold to the plaintiffs, had latent, undiscoverable
defects at the time of sale and that the defendant never publicized the defects, or attempted to notify customers of the
defects, or recalled the defective windows. As a direct and
proximate result of the alleged defects, the plaintiffs claimed
their windows experienced premature wood rot and deterioration. The plaintiffs alleged they would not have purchased the
windows had they known of any defects. The plaintiffs alleged
that the defendant’s concealment, suppression, or omission
of material facts constitutes unfair, deceptive, or fraudulent
business practices under the Consumer Fraud Act.
The defendant brought a 2-615 motion to dismiss, which
the trial court granted by dismissing all three counts of the
plaintiff’s complaint. The Consumer Fraud Act count was dismissed with prejudice. The trial court’s order did not address
the class action claims, but stated that the plaintiffs failed to
allege how the contract between the parties, specifically the
warranty provision, would not provided adequate relief to
the plaintiffs. The plaintiffs appealed, and the appellate court
reversed holding that the plaintiffs had stated a cause of action
for “defect” under the Act.
Illinois Consumer Fraud Act
Section 2 of the Consumer Fraud Act prohibits:
“unfair methods of competition and unfair or deceptive
acts or practices, including but not limited to the use
or employment of any deception, fraud, false pretense,
false promise, misrepresentation or the concealment,
suppression or omission of any material fact, with intent
that others rely upon the concealment, suppression or
omission of such material fact, * * * in the conduct of
any trade or commerce” 815 ILCS 505/2 (West 2002).
About the Author
James W. Ozog is a partner in the Chicago firm of
Wiedner & McAuliffe, Ltd. He received his undergraduate
degree from Northwestern University and law degree from
Washington University in 1977. Mr. Ozog concentrates his
practice in product liability defense matters and commercial
litigation. In addition to his Illinois defense practice, he is
National Trial Counsel for several product manufacturers. He has appeared as lead defense counsel in over twenty states and tried
cases to verdict in seven states besides Illinois. He also represents clients on
a regular basis in matters before the United States Consumer Products Safety
Commission. He is a member of the American Bar Association, DRI, IDC and
the Propane Gas Defense Association.
49
IDC Quarterly
Product Liability (Continued)
Section 10a(a) of the Act provides for a private cause of action
for “any person who suffers actual damage as a result of a
violation of this Act.” 815 ILCS 505/10a(a) (West 2002). To
adequately plead a cause of action under the Act, a plaintiff
must allege: 1) a deceptive act or practice by the defendant, 2)
the defendant’s intent that the plaintiff rely on the deception,
3) the occurrence of the deception in the course of conduct
involving trade or commerce, and 4) actual damage to the
plaintiff 5) proximately caused by the deception. Oliveira
v. Amoco Oil Co., 201 Ill. 2d 134, 776 N.E.2d 151, 267 Ill.
Dec. 14 (2002). A complaint alleging a violation of consumer
fraud must be plead with the same particularity and specificity
as that required under common law fraud. Connick v. Suzuki
Motor Co., Ltd., 174 Ill. 2d 482, 675 N.E.2d 584, 221 Ill.
Dec. 389 (1997).
Illinois History Under the Act
One of the leading consumer product cases under this Act
is Connick v. Suzuki Motor Co., Ltd., 174 Ill. 2d 482, 675
N.E.2d 584, 221 Ill. Dec. 389 (1997). In Connick, the plaintiffs
filed a class action lawsuit alleging that the Suzuki Samurai
vehicles they purchased were unsafe and defective due to
their excessive rollover risk. Connick, 174 Ill. 2d at 487-88.
The plaintiffs contended, among other things, that Suzuki
fraudulently concealed material facts by failing to inform
consumers of the Samurai’s rollover tendency and selling
the Samurai without disclosing the safety risks. Connick, 174
Ill. 2d at 504. The court held the plaintiffs adequately pled a
consumer fraud violation. Connick, 174 Ill. 2d at 505.
Plaintiffs alleged that Suzuki was aware of the Samurai’s
safety problems, including its tendency to roll over and
its inadequate protection for passengers. Plaintiffs further alleged that Suzuki failed to disclose these defects.
Finally, plaintiffs alleged that the safety problems of
the Samurai were a material fact in that they would not
have purchased the vehicles if Suzuki had disclosed
the Samurai’s safety risk. Connick, 174 Ill. 2d at 505.
In a similar case, Perona v. Volkswagen of America, Inc.,
292 Ill. App. 3d 59, 684 N.E.2d 859, 225 Ill. Dec. 868 (1997),
the plaintiffs alleged the defendants knowingly concealed
defects in their Audi vehicles that caused “unintended acceleration.” The plaintiffs alleged Audi was aware of the Audi
5000’s safety problems but failed to disclose those defects.
The plaintiffs further alleged the unintended acceleration was
a material fact in that they would not have purchased the Audi
5000 vehicles if Audi previously had disclosed the safety risk.
50
Perona, 292 Ill. App. 3d at 69. The court held the plaintiffs
adequately alleged a consumer fraud violation based on a
material omission by Audi. Perona, 292 Ill. App. 3d at 68.
In Pappas, the defendant attempted to rely on the recent
supreme court case of Avery v. State Farm Mutual Automobile
Insurance Co., 216 Ill. 2d 100, 835 N.E.2d 801, 296 Ill. Dec.
“Merely alleging that a defendant
failed to call its product defective, the defendant argued, did not
convert a breach of warranty into
consumer fraud. The plaintiffs’
based their claim in Avery on State
Farm’s specification of non-OEM
(‘Original Equipment Manufacturer’) replacement parts.”
448 (2005), contending that the plaintiffs were at most alleging a simple breach of warranty while refusing to pursue their
warranty remedies. Merely alleging that a defendant failed to
call its product defective, the defendant argued, did not convert
a breach of warranty into consumer fraud. The plaintiffs’ based
their claim in Avery on State Farm’s specification of non-OEM
(“Original Equipment Manufacturer”) replacement parts.
Avery, 216 Ill. 2d at 110. State Farm contended the plaintiffs’
consumer fraud count was simply a duplicate of the breach of
contract count and should be dismissed. State Farm pointed to
language in the complaint asserting that State Farm installed
inferior parts despite having “promised” to use parts of “like
kind and quality.” Avery, 216 Ill. 2d at 155-56.
The plaintiffs, in Avery, repeatedly referred to State Farm’s
violation of the express written promises in its policies and
State Farm’s failure to fulfill its contractual obligations. Avery,
Second Quarter 2006
216 Ill. 2d at 168-69. The court in Avery held that a breach
of contractual promise, without more, is not actionable under
the Consumer Fraud Act. Avery, 216 Ill. 2d at 169. “Were
our courts to accept plaintiff’s assertion that promises that
go unfulfilled are actionable under the Consumer Fraud Act,
consumer plaintiffs could convert any suit for breach of contract into a consumer fraud action.” Avery, 216 Ill. 2d at 169
(quoting Zankle v. Queen Anne Landscaping, 311 Ill. App. 3d
308, 312, 724 N.E.2d 988, 244 Ill. Dec. 100 (2000).)
In the Pappas case, the court stated that there was no
evidence that the plaintiffs’ claims were based on a simple
breach of warranty or breach of contract by the defendant.
The plaintiffs alleged that the defendant knowingly withheld
material facts about its windows and had the plaintiffs known
about the rot and deterioration, they claimed they would never
have purchased the windows. The court stated that it is not
necessary to plead the warranty provisions of the contract
would not provide adequate relief. According to the court,
there is no such requirement in the Act. A consumer fraud
action is different from a warranty action. In some cases,
courts have affirmed the dismissal of the plaintiffs’ breach of
warranty claims while allowing Consumer Fraud Act claims
to stand. See Connick, 174 Ill. 2d at 505; Perona, 292 Ill. App.
3d at 69.
The plaintiffs in Avery also contended State Farm failed to
disclose the categorical inferiority of the non-OEM parts. The
plaintiffs contended the failure to disclose constituted “the
concealment, suppression or omission of any material fact,”
in violation of the Consumer Fraud Act. Avery, 216 Ill. 2d at
178, citing 815 ILCS 505/2 (West 1998). The court rejected
the plaintiffs’ argument:
Under plaintiffs’ reasoning, it would appear that to avoid
liability under the Act, every knowing sale of a brand of
product which is not the top brand would have to carry
a disclaimer: “Notice, our brand is not, on the whole,
as good as our competitor’s .” Thus, adopting plaintiffs’
argument would appear to work a significant expansion
of liability under the Act. Avery, 216 Ill. 2d at 193.
In Pappas, the defendant contended that the allegations in
the plaintiff’s complaint were equivalent to a claim that the
defendant’s products are inferior or disappointed the plaintiff’s
commercial expectations. The defendant asserted that Avery
means the Consumer Fraud Act does not require it to proclaim
the alleged inferiority of its products.
The court in Pappas was not persuaded by the defendant’s
argument or its use of Avery. The court distinguished Avery,
stating in that case the plaintiffs did not allege any product
defect, but merely that non-OEM parts were inferior to OEM
parts. In addition, the court in Avery found that the plaintiffs
suffered no actual damage, and declined to hold that the use
of “categorically inferior” non-defective parts was fraudulent.
Avery, 216 Ill. 2d at 171.
Proof of Defect in Consumer Fraud Actions
In Pappas, the plaintiffs did not contend the defendant
should have disclosed its windows were inferior to other
windows from other manufacturers. Rather, the plaintiffs
focused on a feature of the windows that allowed water to
enter the frames and cause damage to the windows. Further, the plaintiffs alleged that they suffered actual damage
because their windows underwent rotting and deterioration.
Unlike the plaintiffs in Avery, the plaintiffs contended that the
windows they purchased contained undisclosed defects. The
plaintiff contended that under Illinois law, a product is not
“defective” unless it is “unreasonably dangerous.” See Mele
v. Howmedica, Inc., 348 Ill. App. 3d 1, 808 N.E.2d 1026, 283
Ill. Dec. 738 (1st Dist. 2004); Illinois Pattern Jury Instructions
for Strict Product Liability, Civil, No. 400.02 (2005 ed.) The
defendant argued that where an allegedly defective product
is involved, a plaintiff must plead and prove that a product is
“unreasonably dangerous” to state a claim under the Consumer
Fraud Act.
The appellate court rejected these arguments. The court
pointed out that the Mele decision concerned strict product
liability and negligent design claims, both product liability
claims. That decision made no reference to the Consumer
Fraud Act. The court held that there was no basis under Illinois law to incorporate a strict product liability standard into
the Consumer Fraud Act. While a plaintiff bringing a product
liability claim must allege that a defect renders a product
“unreasonably dangerous,” neither “defect” nor “unreasonably dangerous” are elements of a Consumer Fraud Act claim.
Rather, for a claim based on an omission, the plaintiffs are
required to allege an omission of a material fact in the conduct
of trade or commerce. Connick, 174 Ill. 2d at 504, 675 N.E.2d
584.
The court further went on to state that a defect need not
be life threatening, citing to Dewan v. Ford Motor Co., 363
Ill. App. 3d 365, 842 N.E.2d 756, 299 Ill. Dec. 719 (1st Dist.
2005). A defect could fall well short of the “unreasonably dangerous” standard yet still be serious enough that a reasonable
buyer would not purchase the product if made aware of the
defect. An omission need not concern potential bodily harm.
The Consumer Fraud Act provides remedies for omissions
51
IDC Quarterly
Product Liability (Continued)
resulting in purely economic injury. Dewan, 842 N.E.2d at 760
(“The diminished value of a product due to defects associated
with the product is a compensable injury in consumer fraud
and breach of warranty causes of action” where the value of
car was allegedly diminished due to defective front height
sensors).
Proximate Cause
The Supreme Court of Illinois has held that “in a cause
of action for fraudulent misrepresentation brought under the
Consumer Fraud Act, a plaintiff must prove that he or she was
actually deceived by the misrepresentation in order to establish
According to the court in Pappas, unlike the plaintiffs in
Avery, Shannon, Oliveira, and Zekman, the plaintiffs in Pappas did not rely on allegedly deceptive advertising in order
to establish their consumer fraud claim against the defendant.
Instead, the plaintiffs alleged that the defendant, even though
aware of a material defect, never notified its customers that
the aluminum clad wood windows were defective. In effect,
the plaintiffs alleged they relied on the defendant’s concealment by silence. In finding that the plaintiffs adequately plead
proximate cause in their complaint, the court stated that the
required allegation of proximate cause is minimal since that
determination is best left to the trier of fact. According to the
court in Pappas, requiring anything more would eviscerate
the spirit and purpose of the Consumer Fraud Act.
Conclusion
“The Supreme Court of Illinois
has held that ‘in a cause of action
for fraudulent misrepresentation
brought under the Consumer Fraud
Act, a plaintiff must prove that he
or she was actually deceived by the
misrepresentation in order
to establish the element of proximate causation.’”
the element of proximate causation.” See Avery, 216 Ill. 2d at
199. See also, Shannon v. Boise Cascade Corp., 208 Ill. 2d
517, 805 N.E.2d 213, 281 Ill. Dec. 845 (2004); Oliveira, 201
Ill. 2d 134; Zekman v. Direct American Marketers, Inc., 182
Ill. 2d 359, 695 N.E.2d 853, 231 Ill. Dec. 80 (1998).
In Shannon, Oliveira, and Zekman, the court held deceptive
advertising could not be the proximate cause of damages under
the Act unless the advertising actually deceived the plaintiffs.
Shannon, 208 Ill. 2d at 525; Oliveira, 201 Ill. 2d at 140-41,
; Zekman, 182 Ill. 2d at 375-76. In Avery, the supreme court
held the plaintiff had to establish he was actually deceived
by the defendant’s representations or omissions in order to
prove his claim. Avery, 216 Ill. 2d at 200.
52
Based on the reasoning of the Pappas court, a slight
diminution of value in a product may be enough to state a
“defect” claim under the Illinois Consumer Fraud Act. The
key to avoiding liability in these cases will be to prove that
the manufacturer had no knowledge or reason to know of the
defect prior to sale to the consumer. Thus, the actual fraud
or violation will be difficult for the plaintiffs to prove. The
Pappas case, however, makes it more unlikely that these cases
will be dismissed at the pleadings stage.
Second Quarter 2006
Professional Liability
By: Martin J. O’Hara
Quinlan & Carroll, Ltd.
Chicago
Limiting Attorneys’ Duties to Non-Clients
Practitioners in the area of legal malpractice defense undoubtedly have recognized a growing and disturbing trend in
recent years of lawsuits brought against attorneys by thirdparty nonclients. While the Illinois Supreme Court’s decision
in Pelham v. Griesheimer, 92 Ill. 2d 13, 440 N.E.2d 96, 64 Ill.
Dec. 544 (1982), eliminated privity as an element of a legal
malpractice action, the Illinois Supreme Court most certainly
did not intend to expose attorneys to unlimited claims by
third-party nonclients. A recent decision by the First District
Appellate Court reinforces that an attorney’s liability to a
non-client is quite limited. In re Estate of Lis, No. 1-04-1934,
2006 WL 845595 (1st Dist. Jan. 31, 2006).
The facts underlying Estate of Lis are somewhat convoluted. Shirley Lis died on November 11, 1999. Id. at * 1.
Subsequent to her death, it was discovered that Lis had a
profit sharing plan (“Plan”) through her former employer,
Harris Bank. Both the primary and contingent beneficiaries
designated on the Plan predeceased Lis, although Lis had
never changed the beneficiaries on the Plan. Shortly after Lis’s
death, an employee of Harris Bank wrote to Lis’s maternal
cousin, Sharon Rudnick, with respect to the Plan. The representative of Harris Bank identified the contingent beneficiary,
and requested an address for that individual. Harris Bank
was unaware at the time that the contingent beneficiary had
predeceased Lis.
In January 2001, Sharon Rudnick filed Letters of Administration, identifying her father, Kenneth Rudnick, and her
uncle, Stanley Rudnick, as heirs. The petition indicated that
other heirs were unknown. Also in January 2001, an attorney
for Owen Ward, Lis’s paternal first cousin, faxed a letter to
Sharon Rudnick’s attorney enclosing a counterpetition for Letters of Administration. Thereafter, Ward’s attorney appeared
in court to present his counterpetition, which was objected
to by Sharon Rudnick. Sharon Rudnick then filed her Letters
of Administration which identified Kenneth Rudnick, herself,
her sister Susan, and her brother Steven, as heirs, as well as
unknown other heirs. The court appointed Sharon Rudnick as
Independent Administrator, and an order declaring heirship
was entered that identified Kenneth and Stanley Rudnick as
the maternal heirs, and unknown paternal heirs.
In February 2001, Hala Souman, an attorney for Sharon
Rudnick, wrote to a benefits administrator at Harris Bank
asking that the Plan be distributed to Kenneth Rudnick. Id.
at *2. Souman also wrote to Ward’s attorney requesting that
the counterpetition be withdrawn so that the Estate would
not be depleted. Souman’s letter to Ward’s counsel further
indicated that two retirement accounts had originally been
included in the value of the Estate that did not belong to
the Estate because they had named beneficiaries. Souman
informed Ward’s attorney that the Estate was valued at approximately $75,000.00. Thereafter, Ward’s attorney agreed
to withdraw the counterpetition, and the trial court entered an
amended order declaring heirs. The order added Ward as an
heir entitled to one-half of Lis’s estate, and amended Stanley
and Kenneth’s share to one-quarter each. Subsequent to the
order being entered, Ward’s counsel again wrote to Souman
requesting information as to why the Estate had decreased in
value.
In May 2001, the Benefits Administrator for Harris Bank
wrote to Souman indicating that the Plan was worth approximately $150,000.00. The letter further indicated that because
the contingent beneficiary predeceased Lis, the next beneficiary was Kenneth, and that the Plan had been distributed to
About the Author
Martin J. O’Hara is a partner with the Chicago firm
of Quinlan & Carroll, Ltd. His practice is devoted to
litigation, including commercial cases, and the defense of
professionals in malpractice actions. Mr. O’Hara received
his B.A. from Illinois State University and J.D. with
honors from John Marshall Law School. He is a member
of DRI, IDC, ISBA and CBA.
53
IDC Quarterly
Professional Liability (Continued)
Kenneth. After receiving the letter, Souman wrote to Ward’s
attorney, again explaining that the two retirement accounts
had incorrectly been included in the Estate because they had
named beneficiaries, and their withdrawal from the Estate
was the reason it had a lesser value.
Subsequent to receiving Souman’s letter, Ward’s attorney
learned that the Plan had been distributed to Kenneth. Ward’s
attorney then moved to remove Sharon as the administrator,
alleging that she had breached her fiduciary duties to preserve
and collect the assets of the Estate, and because she had failed
to advise Harris Bank that other heirs existed. Ward’s attorney
further alleged that the Plan was part of Lis’s estate. On the
same day, Bernice Mankiwicz, another maternal cousin of
Lis’s, filed a motion to amend the heirship order, identifying
herself and six others as heirs. In response to the motions, the
trial court entered a second amended order declaring heirs,
adding Bernice and the other six individuals as heirs. The trial
court further entered an order finding that the distribution of
the Plan to Kenneth was improper, and that the Plan was to
be restored to the Estate.
Sharon filed a motion to reconsider the trial court’s order
relating to the Plan. Following a hearing on the motion, the
trial court found that the Plan was an asset of the Estate. Id.
at *3. The court further determined that Harris Bank failed to
take into consideration other heirs in making its distribution
decision. The court therefore found that the money had to be
restored to the Estate.
Subsequent to the court’s ruling on the motion to reconsider, Harris Bank filed a notice that the action had been
removed to the Federal District Court based on ERISA.
Although not clear from the opinion, it appears that while
the matter was pending in the Federal District Court, Ward
acknowledged that the Plan was not part of the Estate. Based
on this acknowledgement, Sharon filed a motion to vacate
the trial court’s prior orders that had required that the monies
from the Plan be restored to the Estate. The trial court granted
Sharon’s motion and vacated its prior orders.
Ward, Mankiwicz and the others identified by Mankiwicz
as heirs (hereinafter “Petitioners”) then filed petitions to surcharge Sharon and her attorneys based on alleged breaches on
fiduciary duty and conflicts of interest. Id. at *3-4. With regard
to Sharon’s attorneys, the Petitioners alleged that contrary to
their duty owed to the Estate and heirs, the attorneys requested
that the Plan be distributed to Kenneth even though it could
have been paid to the Estate. The Petitioners alleged damages
in the reduction in value of the Estate.
The attorneys moved to dismiss the petition asserting,
among other things, preemption by ERISA and a lack of
54
proximate cause based on Harris Bank’s independent decision
to distribute the money to Kenneth. Id. at *4. The trial court
granted the attorneys’ motion to dismiss, finding that the Plan
was subject to federal regulations and rules, and was not an
asset of the Estate. Id. at *5.
The appellate court affirmed the dismissal. While the court
“Subsequent to receiving Souman’s letter, Ward’s attorney
learned that the Plan had been
distributed to Kenneth. Ward’s
attorney then moved to remove
Sharon as the administrator, alleging that she had breached her
fiduciary duties to preserve and
collect the assets of the Estate,
and because she had failed to
advise Harris Bank that other
heirs existed.”
agreed that the Plan was never part of the Estate, the Estate of
Lis court went further to discuss the issue of duty. Specifically,
the court addressed whether the attorneys owed a duty to the
Petitioners. The Petitioners had asserted that the attorneys
owed a duty to all of the heirs because they were hired for
the benefit of the Estate.
In addressing this issue of duty, the court initially defined
the role of counsel for an executor. Id. at *9. The Estate of Lis
court noted that the purpose of administrating an Estate is to
marshal the assets of the Estate, pay the debts of the decedent
and Estate, and distribute the residue of the Estate to the legal
heirs. Id. (citing In re George’s Estate, 335 Ill. App. 509, 511,
Second Quarter 2006
82 N.E.2d 365 (1st Dist. 1948)). The court further noted that
“[t]he primary purpose of the attorney’s relationship with the
executor of an estate is to assist the executor in the proper
administration of the estate.” Id. (quoting Jewish Hospital of
St. Louis v. Boatmen’s National Bank of Belleville, 261 Ill.
App. 3d 750, 763, 633 N.E.2d 1267 (5th Dist. 1994)).
After defining the duty of the attorney for the Executor,
the Estate of Lis court analyzed Illinois case law regarding
an attorney’s duty to third-party nonclients. The court’s
analysis included a lengthy discussion of Pelham, the leading
case on the issue. The Illinois Supreme Court in Pelham had
recognized the general rule that an attorney is not liable to
third-party nonclients. However, the Pelham court held that
it did not consider privity to be an “indispensable prerequisite
to establishing a duty of care between nonclient and attorney
in suit for legal malpractice.” Pelham, 92 Ill. 2d at 18. Importantly though, the Pelham court made clear that removing
the privity requirement was not intended to broadly expose
attorneys to liability to third-party nonclients. Rather, a duty
is owed to a nonclient only where the nonclient can “allege
and prove that the intent of the client to benefit the nonclient
third party was the primary or direct purpose of the transaction
or the relationship.” Id. at 21. Such a rule would ensure that
attorneys’ liability for negligence not “extend to an unlimited
and unknown number of potential plaintiffs.” Id. at 20.
The Pelham court further found that the issue of duty was
even more important in the context of a proceeding that is
adversarial in nature. The Pelham court held, “[w]here a client’s interest is involved in a proceeding that is adversarial
in nature, the existence of a duty of the attorney to another
person would interfere with the undivided loyalty which the
attorney owes his client and would detract from achieving the
most advantageous position for his client.” Id. at 22. Thus, “[i]
n cases of an adversarial nature, in order to create a duty on
the part of the attorney to one other than a client, there must
be a clear indication that the representation by the attorney
is intended to directly confer a benefit upon the third party.”
Id. at 23.
In applying Pelham to the facts before it, the Estate of Lis
court held that the attorneys owed no duties to the Petitioners.
Estate of Lis, 2006 WL 845595 at *13. The court found that
to extend a duty to the Petitioners would be contrary to the
concern expressed in Pelham that an attorney’s liability for
negligence, or breach of fiduciary duty, should not extend to an
unlimited or unknown number of potential plaintiffs. Id. The
court noted that at the time the Plan was actually distributed to
Kenneth, the only other known heir was Ward. Id. The other
Petitioners did not become known until months later. Id.
Furthermore, the court held that there was no “clear indi-
cation,” as required in an adversarial situation, that “Sharon
retained the Attorneys with the intent to directly confer a
benefit upon petitioners, let alone any evidence that this was
their primary purpose for retention of counsel.” Id. Rather, the
court found that a primary purpose for retention of counsel was
to assist Sharon in the proper administration of Lis’s estate.
Id. Certainly, Sharon could not have retained the attorneys
to represent the interests of the Petitioners when she was not
even aware of their existence at the time the attorneys were
initially retained. Id.
It is important for practitioners to recognize that the holding
in Estate of Lis is not limited merely to malpractice claims
arising out of estate matters. Rather, the decision should be
cited and relied upon when arguing for a limitation on duties
owed by an attorney to any third-party nonclients. It is critical that this limitation continues to be upheld by the Illinois
courts. Without such a limitation, attorneys will be potentially
liable to an unlimited and often times unknown number of
potential plaintiffs. While Pelham may have removed the
privity requirement for a claim by a third-party nonclient, the
Pelham court most certainly never intended to greatly expand
attorneys’ exposure to malpractice or breach of fiduciary duty
claims.
55
IDC Quarterly
Alternative Dispute Resolution
By: John L. Morel
John L. Morel, P.C.
Bloomington
Much has been said about how the mediator should conduct
himself and what the mediation process should involve. Previous articles on alternative dispute resolution have addressed
the positives of mediation. The potential for a downside or
negative resolution exists also.
It should be obvious but participation in mediation requires
preparation, whether you are a mediator or a mediation participant. Those representing a party must visit with the client, discuss their position, and the potential settlement range
versus a jury verdict trial. The probable course of events and
how mediation differs from a trial should be discussed. The
attorney should try to eliminate any confusion or doubt the
client may have about the advantages and disadvantages of
mediation, and share background information on the mediator,
if known, and the expected goals of the mediation. If you or
your firm has experience with the mediator, share with your
client his impartiality, etc.
The attorney needs to advise the client about the process
and the potential range of settlement to expect, whether it
may be positive or negative. The attorney cannot defer to the
mediator for legal advice. Legal advice must come from the
attorney to the client.
The mediation is not legal if the parties can’t agree. It is the
mediator’s role to try to sound out whether common ground
exists on some of the issues. Start with the minor issues and
potential evidence and “build up” towards the major issues.
Even if beginning with the major issues, the mediator is not to
make suggestions or recommendations. Do not tell the parties/
counsel what to do. Don’t tell them what you have experienced
in the way of settlement or verdict in an analogous case.
Mediation is less expensive than a contested trial and even
less expensive than one negotiated by and between the respective lawyers. Many mediators are flexible as to the amount of
their fees. Prior to mediation, the respective counsel should
be advised of the mediator’s hourly time rate for preparation,
attendance, and travel, if involved. The respective attorneys
56
share this information with the parties and explain that the
total costs will be divided evenly.
Many mediations result in a “settlement.” Frequently the
parties achieve settlement in one day, although the length of
the day may vary. On other occasions, mediation may require
a number of sessions. That depends, of course, on how quickly
the parties are coming “closer” to the resolution of the issues.
If the mediation drags on and the mediator feels that nothing
is likely to come of the mediation, he may advise the parties
that he believes that the prospects for a resolution are slim
given their respective positions on that day. He may recommend a “recess” for a number of days to allow the respective
parties and their counsel to rethink their positions. They may
then settle between themselves or with further mediation.
Keep in mind if there isn’t any agreement, any resolution,
nothing has been lost. Participation in the mediation process
may result in either or both counsel becoming more creative
in considering alternatives.
At the outset, the mediator should advise all of those present if he has a social relationship with either counsel or the
opposing parties. The same holds true for any professional
relationship with counsel for the parties. Regardless of the
nature and extent of the relationship, it should be shared at
the outset. The better process or procedure would be for the
mediator, upon receiving materials prior to the mediation to
inform each counsel of any relationship he or his family may
have had with counsel or the parties. That will provide them,
prior to the preparation of the mediation, the opportunity to
make a decision as to whether to proceed with that mediator
or not. The same is true if the mediator is aware of any other
relationship with any of the parties to the mediation. The
mediator should advise the respective counsel/parties when
the relationship occurred. If it was a recent event, the potential
for some prejudice is greater than an occasion/incident that
About the Author
John L. Morel concentrates his practice in civil trial
and appellate practice, as well as insurance law, at his
Bloomington firm of John L. Morel, P.C. He received his
B.A. from Western Illinois University and his J.D. from
the University of Illinois. Mr. Morel is a member of the
McLean County, Illinois State, and American Bar Associations. He is also a member of the IDC, FDCC, DRI,
National Association of College and University Attorneys
and the Illinois Appellate Lawyers Association. Mr. Morel sits on the Board
of Directors for the IDC.
Second Quarter 2006
occurred years prior. Also, the mediator, prior to the hearing,
should submit to the respective counsel their current C.V.
In the pre-mediation confidential memorandum, the respective counsel should describe the incident, how it occurred,
the position of he and his client, then opposing counsel. He
should indicate the evidence they propose to introduce at the
mediation. In a motor vehicle case, this would involve the
“In the pre-mediation confidential
memorandum, the respective counsel
should describe the incident, how it
occurred, the position of he and his
client, then opposing counsel.”
police report, a diagram of the accident scene, repair costs
or an estimate for repair, pictures of the respective vehicles
if it is a collision, an itemization of the damages and a list of
witnesses that will appear at the trial. If depositions have been
taken which address the issues and would aid the mediator,
abstracts of them should be sent also. Prior to the mediation
the respective counsel should advise the mediator of the status
of any negotiations. If there have been negotiations, what is
the latest demand and offer. Liens may play an important part
in the mediation and may present settlement problems.
Each of the counsel for the parties should advise their client of the potential costs/expenses that will be incurred if the
case is not resolved through mediation. These may include
the cost of expert witnesses, transcripts, specific exhibits, and
the number of days the client will miss from work during the
expected trial time.
The respective counsel have an obligation to resolve their
client’s dispute in the most cost-effective way and in the shortest time possible. The clients must be aware of the fees and
costs of a trial and substantially abbreviated discovery, i.e.,
depositions. Finally, the client must know of the economic
and time advantages of mediation.
Amicus Committee Report
By: Michael L. Resis
O’Hagan, Smith & Amundsen, L.L.C.
Chicago
In the last issue, we reported that the Illinois Supreme Court
had granted the IDC leave to appear and file an amicus brief
in support of the defendant in Skaggs v. Senior Services of
Central Illinois, Inc., Docket No. 100423. That case was to
decide the recurring issue of whether settling defendants must
be included on the verdict form for purposes of apportioning
fault under Section 2-1117 of the Code of Civil Procedure.
Unfortunately, that case has been settled and dismissed, leaving this important issue unresolved for now.
Effective December 6, 2005, the Illinois Supreme Court
amended Supreme Court Rule 345 to require the applicant
to state how an amicus brief will assist the court. It appears
that the court will not permit the filing of briefs that do little
more than duplicate the views of the parties. Since the Illinois
Supreme Court has amended Rule 345, it has denied applicants
leave to file amicus briefs in a number of cases. In one of
those cases, the court issued an order in which it enumerated
the criteria that it will now consider useful in assessing the
propriety of an amicus brief. The court will grant permission
to file an amicus brief when: (1) a party is not competently
represented or not represented at all; (2) the would-be amicus
About the Author
Michael L. Resis is a founding partner and chairman of
O’Hagan, Smith & Amundsen’s appellate department. He
concentrates his practice in the areas of appeals, insurance coverage and toxic, environmental and mass torts.
He has practiced law in Chicago for 20 years and handled
more than 400 appeals. Mr. Resis has represented government, business and professional organizations as amicus
curiae before the Illinois Supreme Court and the Illinois Appellate Court. He
received his B.A. degree, magna cum laude, from the University of Illinois at
Champaign-Urbana in 1978, and a J.D. degree from the University of Illinois
at Champaign-Urbana in 1981. Mr. Resis currently serves on the Board of
Directors for the IDC.
57
IDC Quarterly
Amicus Committee Report (Continued)
has a direct interest in another case, and the case in which
permission to file an amicus brief is sought may, by operation
of stare decisis or res judicata, materially affect that interest;
or (3) the amicus has a unique perspective, or information,
that can assist the court beyond the help that the attorneys for
parties are able to provide.
During its November 2005 term, the Illinois Supreme
Court accepted the defendants’ petitions for leave to appeal
in Calles v. Scripto-Tokai Corp. (Docket No. 101089). That
appeal will determine whether a lighter was defective in design because it lacked child resistant features. In that case a
mother filed a wrongful death action after her three-year old
daughter got hold of a gun-shaped lighter and started a fire
in the bedroom that caused the death of the child’s sister. The
trial court granted the manufacturer and distributor summary
judgment on grounds that Illinois law imposed no duty to
make the lighter child resistant and that the defendants owed
no duty to warn the mother of the open and obvious dangers
of the lighter. The appellate court affirmed in part and reversed
in part, holding that on the strict liability claim there was a
question of fact whether the risks presented by the lighter
without child resistant features outweighed the benefits of
that design (358 Ill. App. 3d 975, 832 N.E.2d 409 (1st Dist.
2005)). The Illinois Supreme Court recently gave the IDC
leave to file the amicus brief in support of the defendants.
On behalf of the IDC, the Amicus Committee thanks
Michael L. Young and Jeffrey S. Hebrank of Burroughs,
Helper, Broom, MacDonald, Hebrank & True, L.L.P. for
taking the time from their other commitments to prepare the
amicus brief for filing.
After Rule 345 was amended, the IDC was unsuccessful
in attempting to appear and file an amicus brief in support of
the defendant in International Union of Operating Engineers,
Local 150, AFL-CIO v. Lowe Excavating Co. (Docket Nos.
101231 and 101347). In that case the Illinois Supreme Court
will review the propriety of a punitive damage award which
greatly exceeded a single-digit multiplier. The Appellate
Court, Second Judicial District, affirmed the award of punitive
damages, but reduced the award from $525,000 to $325,000
(actual damages were only $4,680) (358 Ill. App. 3d 1034,
832 N.E.2d 495 (2d Dist. 2005)). The Illinois Supreme Court
recently denied without comment a motion by the IDC for
leave to appear and file an amicus brief. Even so, the Amicus
Committee appreciates the fine efforts of James P. DeNardo
and Kristin Dvorsky Tauras of McKenna Storer for preparing an amicus brief for filing.
As a reminder for future submissions, the Amicus Committee members are:
58
First Judicial District
John J. Piegore
Sanchez & Daniels
333 W. Wacker Drive, Suite 500
Chicago, Illinois 60606
(312) 641-1555
Second Judicial District
James DeAno
Norton, Mancini, Argentati, Weiler & DeAno
109 N. Hale Street
Wheaton, Illinois 60187
(312) 668-9440
Third Judicial District
Karen L. Kendall
124 SW Adams Street
Bank One Building, Suite 600
Peoria, Illinois 61602
(309) 676-0400
Fourth Judicial District
Robert W. Neirynck
Costigan & Wolrab, P.C.
308 E. Washington Street
P.O. Box 3127
Bloomington, Illinois 61701
(309) 828-4310
Fifth Judicial District
Mr. Stephen C. Mudge
Reed, Armstrong, Gorman, Coffey, Thompson,
Gilbert & Mudge
101 North Main Street
P.O. Box 368
Edwardsville, Illinois 62025-0368
While our committee cannot prepare an amicus brief in
every case in which we are asked, we encourage your participation in making the views of our members known to the
reviewing courts on the legal issues that affect us. We need
your input and your support. If you are interested in writing
an amicus brief or submitting a case for review by the committee, please contact any of us.
Michael Resis
(312) 894-3249
[email protected]
Second Quarter 2006
Appellate Practice Corner
By: Brad A. Elward
Peoria
Recent Supreme Court Rule
Amendments Affecting Civil Appeals
On February 10, 2006, the Illinois Supreme Court entered
an administrative order amending two supreme court rules
governing appeals to the Illinois Supreme Court. Effective
July 1, 2006, amended Supreme Court Rule 315 eliminates
the requirement of filing an Affidavit of Intent and provides
in effect a tolling period for cases where the opponent files a
petition for publication and the motion is allowed. Rule 317
as amended specifies precisely what types of constitutional
issues are subject to an appeal as of right. This article examines both amendments as compared to the current versions
and explains what counsel can do to ensure compliance.
Supreme Court Rule 315
Under the current Rule 315, a party has 21 days from the
date of the decision within which to file its Rule 315 Petition
for Leave to Appeal, or in the alternative, file an affidavit of
intent. Filing the latter extended the time for filing the Petition for Leave to Appeal for another 14 days, for a total of
35 days. Amended Rule 315 eliminates the affidavit of intent
requirement and allows a full 35 days for filing a Petition for
Leave to Appeal.
The modification to Rule 315 does not change the requirement that a party file its petition for rehearing within 21 days,
nor does it in any way modify the requirement in workers’
compensation cases that the party seeking review file a request
for at least one of the justices to find that the issues involve a
substantial question warranting supreme court consideration.
Moreover, amended Rule 368(a) provides that the mandate
shall not issue following the denial of a Rule 367 petition for
rehearing until the expiration of 35 days, a change from the
seven days in the current Rule, which has long been a source
of confusion and inconsistency.
According to amended Rule 315(b), appeals are broken
into published and non-published decisions. Appeals from
published decisions of the appellate court proceed under
the straightforward rule that the party has 35 days from the
entry of the appellate decision or from the date of the denial
of a timely-filed petition for rehearing. Appeals from a Rule
23 order (unpublished decision) are the same as published
opinions, except that “if the party who prevailed on an issue
in the appellate court timely files a motion to publish [the]
Rule 23 order pursuant to Rule 23(f), and if the motion is
granted, a non-moving party may file a petition for leave to
appeal within 35 days after the entry of the order granting
the motion to publish.” The filing of a Rule 23(f) publication
motion shall not invalidate a previously filed petition for leave
to appeal.
According to the Committee Comments, a party who did
not file a timely Rule 315(a) Petition for Leave to Appeal may
still file such a petition if that party’s opponent has filed a motion for publication, which is later granted. The Committee
Comments state, “Paragraph (b) is also amended to allow a
party that may not have sought Supreme Court review of an
adverse disposition under Rule 23(b) or (c) the opportunity
to seek review of that disposition after the Appellate Court
grants a motion to publish it.”
First, amended Rule 315(b) makes any motion for an
extension of the time to file a Petition for Leave to Appeal a
full-court motion. According to the Committee Comments,
paragraph (b) was amended to dispense with the requirement
of filing an affidavit of intent and to alleviate the problems
seen in prior decisions such as A.J. Maggio Co v. Willis,
197 Ill. 2d 397, 757 N.E.2d 1267 (2001) (filing of a second
petition for rehearing did not toll time for filing affidavit of
intent); Roth v. Illinois Farmers Ins. Co., 202 Ill. 2d 490, 782
N.E.2d 212 (2002) (an ‘affidavit of intent’ that is not sworn
is not a sufficient affidavit and cannot toll the time for filing
a Rule 315(a) petition for leave to appeal), and Wauconda
About the Author
Brad A. Elward is a partner in the Peoria office of
Heyl, Royster, Voelker & Allen. He practices in the area
of appellate law, with a sub-concentration in workers’
compensation appeals and asbestos-related appeals. He
received his undergraduate degree from the University of
Illinois, Champaign-Urbana, in 1986 and his law degree
from Southern Illinois University School of Law in 1989.
Mr. Elward is a member of the Illinois Appellate Lawyers
Association, the Illinois State, Peoria County, and American Bar Associations,
and a member of the ISBA Workers’ Compensation Section Counsel.
59
IDC Quarterly
Appellate Practice Corner (Continued)
Fire Prevention District v. Stonewall Orchards, LLP, 214
Ill. 2d 417, 828 N.E.2d 216 (2005) (Court has discretion to
accept a deficient affidavit of intent after expiration of the
filing deadline). These cases will continue to apply until the
amended Rule 315(b) goes into effect in July.
Amended Rule 315 (c) modifies the presentation of the
Petition for Leave to Appeal. Rule 315(c) now requires the
petitioner to state, in the following order:
Commercial Law
By: James K. Borcia
Tressler, Soderstrom, Maloney & Priess
Chicago
(1) A prayer for leave to appeal;
(2) A statement of the date upon which judgment was
entered; whether a petition for rehearing was filed,
and the date of the denial of the petition or the date
of the judgment of rehearing;
(3) A statement of points relied upon in asking the
Supreme Court to review the judgment of the appellate court;
(4) A fair and accurate statement of the facts (with
record citations);
(5) A short argument stating why review by the Supreme Court is warranted and why the decision of
the appellate court should be reversed or modified;
and
(6) An appendix including the opinion or order of the
appellate court and any record documents necessary
for the court to consider the Petition (modifications
underlined).
Judgment in Lawsuit Filed by Limited
Partners Not Reversible for Failure to
Name Partnership as a Party
Caparos v. Morton, No. 1-04-2354 (1st Dist., 5th Div.
March 3, 2006).
In this case the First District Appellate Court recently held
that a judgment entered in favor of limited partners and against
general partners was not subject to reversal because of the
plaintiffs’ failure to join the limited partnership as a party.
The plaintiffs, the limited partners, initially brought suit
against the partnership’s general partners, claiming that the
general partners had profited from sublease agreements. The
limited partners sought damages for breach of fiduciary duty,
imposition of a constructive trust and an accounting. Later
the plaintiffs filed an amended complaint in order to assert
Supreme Court Rule 317
The amended Rule 317 clarifies the prior rule by including
the following underlined language:
Appeals from the Appellate Court shall lie to the Supreme Court as a matter of right in cases in which a
statute of the United States or of this state has been held
invalid or in which a question under the Constitution of
the United States or of this state arises for the first time
in and as a result of the action of the Appellate Court.
While there are no Committee Comments to amended Rule
317, it is clear that the additional language of the amendment
was intended to clarify what constitutional issues can be appealed as of right. Both amendments become effective on
July 1, 2006, and should simplify appellate practice before
the supreme court.
60
About the Author
James K. Borcia is a partner with the Chicago firm of
Tressler, Soderstrom, Maloney & Priess, and is active in the
firm’s litigation practice with an emphasis on commercial
and complex litigation. He was admitted to the bar in 1989
after he received his J.D. from Chicago-Kent College of
Law. Mr. Borcia is a member of the Chicago and Illinois
State Bar Associations, as well as the IDC and DRI.
Second Quarter 2006
their claims both as individuals and derivatively pursuant to
a section of the Revised Uniform Partnership Act, 805 ILCS
210/1001.
Following a bench trial, the trial court held that the general
partners had breached their fiduciary duties to their limited
partners by not disclosing how they would benefit from their
deal with an investor. The court found that the general partners
did not fully account to the limited partners for expenses and
ordered the defendants to return over $800,000 in management fees. The court also imposed a constructive trust against
$900,000 in extension fees that the defendants had received
under the contract with the investor and a constructive trust
equaling the value that the defendants had received from $3.25
million in earnest money from the investor. Additionally, the
trial court awarded $1 million in punitive damages.
The First District Appellate Court affirmed the trial court’s
ruling. One of the primary arguments on appeal was the
general partners’ argument that the limited partnership was a
necessary party to the plaintiffs’ derivative claim. Although
the appellate court noted that most courts have held a limited
partnership should be named as a party defendant to a derivative action brought by one or more of its limited partners, the
court concluded that the failure to join the limited partnership
as a party did not warrant reversal of the trial court’s judgment.
The appellate court reasoned that the suit was not materially
affected by the judgment being entered without the limited
partnership as a party, because the trial court had granted relief
to the limited partnership by ordering the general partners to
return management fees to the limited partnership. The court
noted that the party to be compensated in a derivative action
is the partnership, with the limited partners who bring the
suit acting as nominal plaintiffs. The court found that general
partners were afforded due process despite the absence of the
limited partnership. The court further found that the limited
partnership’s absence as a party did not prevent the court from
engaging in a complete determination of the controversy.
The appellate court also granted the plaintiffs’ request to
prohibit the defendants, as general partners of the partnership,
from receiving any part of the award. The court held that this
was proper because otherwise the defendants would benefit
from their own wrongdoing. As a result, the appellate court
amended the trial court’s order to state that the award should
only be distributed to the limited partners.
The Defense Philosophy
By: Willis R. Tribler
Tribler Orpett & Meyer, P.C.
Chicago
The Division of Labor
Several recent articles have analyzed why young lawyers
are becoming dissatisfied with and leaving the practice of law.
These articles caused me to consider how a law firm differs
from businesses such as manufacturing companies.
A manufacturing company usually is departmentalized,
at least into marketing, customer relations and production.
Under such a system, no one person should be involved in
all three of these aspects. The person who builds a machine
in the morning does not go out to sell it in the afternoon.
Law firms are different in that they intertwine the three
functions under the somewhat shopworn categories of Finders, Minders and Grinders.
The star marketers (Finders) must also be involved both
with client relations and the production of a quality product.
Finders must understand the importance of good client relations in keeping the clients that they bring in and must be
capable of grinding out good work when necessary. A Finder
who is unable to grind is headed for trouble.
Lawyers who primarily supervise the work of others (Minders) must be able to grind but also must keep the clients happy,
thereby increasing the amount of business from those clients
as well as obtaining referrals for new clients.
About the Author
Willis R. Tribler is a director of the firm of Tribler
Orpett & Meyer, P.C. in Chicago. He is a graduate
of Bradley University and the University of Illinois
College of Law, and served as President of the IDC in
1984-1985.
61
IDC Quarterly
The Defense Philosophy (Continued)
The lawyers who primarily produce the legal product
(Grinders) are responsible for what they do best – grinding
out a quality product. However, if they have any sense, they
will be alert to whether the client is satisfied, report to others
in the firm if the client seems dissatisfied, and be mindful of
opportunities to get new business without wasting time trying
to develop marginal clients.
This brings us back to the often-dissatisfied young law-
“The lawyers who primarily produce
the legal product (Grinders) are
responsible for what they do best –
grinding out a quality product.”
W elcome ... New IDC Members
William P. Anderson
Diver, Grach, Quade & Masini, LLP, Waukegan
Sponsored by: David R. Quade
Michael J. Chessler
Burroughs, Hepler, Broom, MacDonald, Hebrank
& True, LLP, Edwardsville
Sponsored by: Sean P. Sheehan
Christopher M. Dely
Wilson, Elser, Moskowitz, Edelman
& Dicker LLP, Chicago
Sponsored by: Nick Lykins
Robert H. Fredian
Wiedner & McAuliffe, Chicago
Sponsored by: Daniel Cray
yer. Although they usually start as Grinders, learning how
to produce a good product, young lawyers must be aware of
client satisfaction and also begin at the outset of their careers
to develop their own books of business. Otherwise, they will
become permanent Grinders. This causes dissatisfaction if
they do not want to spend their careers grinding.
The problem with this tidy arrangement is that it may clash
with a firm’s compensation system. People who manage firms
must not let this happen. Human nature being what it is, most
compensation plans favor the Finder. However, there must not
be an extreme imbalance of compensation. All three groups
contribute to the success of the firm and all three groups must
be compensated fairly.
A firm must not become Elvis Presley and a bunch of roadies. A successful firm recognizes a division of labor under
which each lawyer is valued for what he or she brings to the
firm and compensates them accordingly.
Mark Galasso
Tribler, Orpett & Meyer, P.C., Chicago
Sponsored by: David M. Lewin
Christopher Garcia
Reed, Armstrong, Gorman, Mudge
& Morrissey, P.C., Edwardsville
Sponsored by: Stephen C. Mudge
Matthew Gasaway
Chittenden, Murday & Novotny LLC, Chicago
Sponsored by: Sean P.MacCarthy
James D. Green
Thomas, Mamer & Haughes, LLP, Champaign
Sponsored by: Bianca T. Green
Gerald T. Rohrer, Jr.
Schuyler, Roche & Zwirner, Chicago
Sponsored by: Charles Cole
62
Spring Seminar Highlights
Second Quarter 2006
63
IDC Quarterly
President’s Message (Continued from page 2)
the many hats we wear in our busy professional and personal
lives, I have wondered what it is that has sustained this allvolunteer army of intrepid defense trial lawyers to grow and
prosper since November 1964. There are, of course, the fine
continuing education programs, the sharing of knowledge by
similarly situated professionals who confront like problems
for clients, opportunities to stay current with proposed legislation, and the ability to help shape the development of the
law with amicus and lobbying efforts. There are also social
opportunities, the occasional golf game or libations shared in
many corners of the State. Additionally, there is the opportunity to develop professionally by writing in peer–reviewed,
respected journals and speaking at meetings.
While these are important positive characteristics of the
IDC, my personal reflections about what has drawn me to become and stay so involved in the IDC always come down to the
simple notion that in this association I have had the privilege
to be associated with the finest trial lawyers in Illinois. As a
young lawyer in training there were two attorneys I came to
know while finishing law school that were instrumental in
my decision to concentrate my practice in the defense of civil
litigation. Besides being brilliant lawyers and great mentors,
I noticed that Jill Berkley and Vic Piekarski had at least one
other thing in common – they were members of the IDC. As I
started to practice as a fledgling coverage attorney, I attended
a lecture by Bill Tribler put on by IICLE and was amazed
at how he could make such a confusing subject for a new
attorney become much clearer. I found he too was associated
with IDC, as was the most creative defense mind I knew in
my early years of practice, John Guy.
And, although my degree of knowledge of the law has
evolved for the positive since those days (at least I like to
think so, anyway), I have learned and continue to learn from
so many of the best and brightest thinkers in our business from
all parts of Illinois because of my association with them on
committees, on the Board of Directors and now for the past
five years as an officer of this Association. In short, what
makes a difference and distinguishes this association is the
caliber and quality of the members. Because of the character
and competencies of our over 1000 members anyone who
seriously holds themselves out as a defense trial lawyer should
be a part of the group; if not, he or she is missing out.
This is also the fundamental reason that we need to find
ways to continue to integrate our collective membership and
promote the chance to realize value from the collective experiences and knowledge we share. We need to collaborate
as a type of trade association of the best defense practitioners
who, generally, serve clients with aligned interests, with the
64
goal to shape the public debate about making positive change
in the civil justice system.
That is best done through the collective voice of the lawyers
who are day in and day out confronting the legal problems that
our mutual clients face. That is best done by continuing to raise
the profile of the organization with the public, the judiciary,
Illinois legislators, our clients’ trade associations and business
organizations, the media and the others who help to shape
public policy. That is best done by setting our own agenda on
the important matters of public policy including tort reform,
judicial selection and retention, pattern jury instructions and
procedural rules that shape the outcomes of our cases. And,
that is best done by using our influence to speak out when
others attempt to tear down what is good about the system
of civil justice or threaten the independence of an unbiased
judiciary.
With all that our members have to offer there is nothing
to be gained by sitting on the sideline allowing the plaintiff’s
bar and client groups to be the sole debaters of what is in the
common good. The IDC leadership over the past years has
been committed to getting the word out and staking out the
ground we need lift up for public scrutiny. The statement of
core values that emanated from our strategic planning meeting last summer (see the article authored by Greg Cochran
elsewhere in this issue) is one clear example of that effort to
set out clearly what we believe and what we are prepared to
do to make it so. There are risks to be sure in putting forth a
vision of what we believe public policy should be. But are
those risks greater than standing silent and letting others
control the debate without input from us?
In the end, the endeavors we are trying to foster may not
entirely work out. But, to the extent our initiatives fail they
would fail twice over if we allowed ourselves permission to
lack the vision and the courage to say what we think should
be done. We should not let anyone prevent us from rising to
the challenges we and our clients face in the effort to secure
justice in our civil courts and to preserve the freedoms that
are inherent in our jury system.
Thank you all for allowing me the privilege to serve as
President of this great organization. It has been an honor I
will always cherish.
IDC MONOGRAPH — Second Quarter 2006
THE IDC MONOGRAPH:
THE “FREQUENT TRESPASS”
DOCTRINE — A RULE OF LAW
WHOSE TIME HAS PASSED?
SECTION 3-102(a) OF
THE TORT IMMUNITY ACT –
HOW MUCH IMMUNITY
DID THE LEGISLATURE INTEND?
Michael E. Kujawa
Judge, James & Kujawa, LLC
Park Ridge, Illinois
M-1
IDC Quarterly Vol. 16 No. 2
I. INTRODUCTION
This Monograph will focus on a recent First District Appellate Court decision, a case of first impression, in which the
appellate court considered two certified questions of interest
to municipal defendants. These questions concerned the open
and obvious danger rule and the scope of §3-102(a) of the Tort
Immunity Act. The article will discuss in depth the decision
in Nelson v. Northeast Illinois Regional Commuter Railroad
Corp., d/b/a METRA, the immunities and defenses afforded
local public entities under §3-102 of the Tort Immunity Act
and the open and obvious danger rule as it relates to the frequent trespass doctrine. 1, 2
In Nelson v. Metra, the plaintiff, Shanica Nelson, a 15-yearold minor, was struck by a METRA passenger train while
trespassing on METRA’s tracks. The plaintiff, Nelson, alleged
that METRA was negligent in its operation of the train and by
its failure to maintain fences or barriers to prevent trespassing
on the railroad right-of-way and train tracks.
METRA filed a motion for summary judgment arguing
two main points: 1) that METRA owed the plaintiff no duty
for the open and obvious danger of being struck by a train;
and 2) that it owed the plaintiff no duty because she was not
an intended and permitted user of the tracks. The motion for
summary judgment was denied, but two questions were certified for appeal under Supreme Court Rule 308:
1. Is the risk of crossing a railroad track on which
trains may be operating an open and obvious peril
for which a railroad/operator owes no duty of care,
regardless of the legal status of the individual crossing the track?
2. Under §3-102(a) of the Local Governmental and
Governmental Employees Tort Immunity Act (Tort
Immunity Act) does a local public entity’s duty to
exercise ordinary care to maintain its property in a
reasonably safe condition for “intended and permitted users” apply only to passive conditions of the
premises or does such duty also apply to activities
or operations conducted on the premises by the
local public entity?3
II. THE ACCIDENT IN NELSON
The plaintiff’s accident occurred on September 2, 1999,
as she walked home from Morgan Park High School after
watching her boyfriend participate in football practice after
school. The METRA tracks where the plaintiff was struck run
northbound and southbound between 119th Street and 115th
M-2
Street in Chicago. The neighborhood near Morgan Park High
School is densely populated and the tracks run adjacent to
and alongside the back yards of many single-family homes
in the area. The plaintiff and her friend took a path through a
grassy field toward the tracks and looked both ways down the
tracks. The plaintiff saw a light from a train in the distance,
but thought that it was stopped.
The plaintiff and her friend crossed the first and second set
of tracks. They continued walking on the end of the railroad
ties on the second set of tracks toward a point where the path
continued on the other side of the tracks. The plaintiff had
used this path to cross the tracks every day on her commute
to and from school. As she was walking on the ends of the
railroad ties, the plaintiff heard her friend yell, “watch out.”
The plaintiff looked over her shoulder and the train was right
there, striking her.4
III. PROCEDURAL HISTORY
The Nelson v. Metra case took an unconventional route to
its present point. METRA initially filed a motion for judgment on the pleadings, contending that §3-102(a) of the Tort
Immunity Act immunized it from liability to the plaintiff. The
trial court denied METRA’s motion, but certified the same
Question No. 2 involved in the late appeal for interlocutory
appeal pursuant to Supreme Court Rule 308. At that time,
the open and obvious danger rule was not at issue. In the first
Rule 308 appeal, the appellate court entered an order granting
leave to appeal, but later vacated the order, stating that the
resolution of the immunity issue was premature until it was
first determined whether METRA owed a duty to the plaintiff.
The case was remanded for resolution of the duty issue and,
if necessary, recertification of the immunity issue.
In remanding the matter to the trial court for resolution of
About the Author
Michael Kujawa is a partner with the firm of Judge, James
& Kujawa, LLC. He obtained his B.S. degree in Law Enforcement Administration from Western Illinois University
in 1989 and his J.D. degree from The John Marshall Law
School in 1998. While with the Park Ridge Police Department prior to law school, Mr. Kujawa worked with the
Special Operations Section. He was a hostage negotiator
prior to earning the Park Ridge Police Officer of the Year Award in 1997. He first
joined Judge & James, Ltd. as a law clerk in 1997, continuing his career as a trial
attorney in 1998 where his insurance defense practice includes governmental
entities, premises liability, civil rights and motor vehicle litigation.
the duty question in the first appeal, No. 1-02-1923, the appellate court, in an unpublished order under Supreme Court
Rule 23, stated:
Under Jakubowski, a defendant owes a minor plaintiff a
duty only if the minor plaintiff was unable to appreciate
the risk of crossing the railroad track. Such a determination is fact driven, dependent upon such matters as
Plaintiff’s mental capacity and the frequency with which
she had previously crossed the tracks and encountered
the train. The record is silent as to these facts . . . . If
the trial court, after further and complete proceedings,
determines the defendant owed plaintiff a duty of care
under Jakubowski or any other theory, then the trial court
may, of course, revisit any applicable immunities and
may recertify the question involving the applicability
of §3-102(a) or any other question it feels necessary.5
IV. CERTIFIED QUESTION NO. 1:
The Open and Obvious Danger Rule
After the case was remanded, METRA presented its motion for summary judgment, which was denied. This time,
however, the trial court certified the two questions at issue.
The Nelson court first addressed Certified Question No. 1 –
the open and obvious danger rule:
The first certified question asks whether the risk of crossing a railroad track on which trains may be operated is
an open and obvious peril for which a railroad/operator
owes no duty of care, regardless of the legal status of
the individual crossing the track.
Generally, the rule in Illinois is that a landowner owes
a trespasser only the duty to refrain from wilfully or
wantonly injuring him. Lee v. Chicago Transit Authority, 152 Ill. 2d 432, 446 (1992). Plaintiff contends,
though, that the facts as alleged in her complaint fall
within the frequent trespass exception. Under this exception, a landowner is liable for injuries to a trespasser
proximately caused by its failure to exercise reasonable
care in the course of its activities, where the landowner
knows, or should know, that trespassers habitually enter
its land at a particular point or traverse an area of small
size. McKinnon v. Northeast Illinois Regional Commuter
R.R. Corp., 263 Ill. App. 3d 774, 777 (1994).6
The appellate court in Nelson then explained METRA’s
position regarding the frequent trespass doctrine and the open
and obvious peril of trespassing on the tracks.
Defendant contends that, even assuming the frequent
trespass exception application applies, it owed no duty to
plaintiff for the open and obvious danger of being struck
by a train. In support, defendant cites the doctrine established by our supreme court in Kahn v. James Burton
Co., 5 Ill. 2d 614 (1955)(the Kahn doctrine). Under the
Kahn doctrine, a duty will be imposed on landowners or
persons in possession or control of premises for personal
injuries suffered by a child on the premises if: (1) the
landowner or other occupier of land knows or should
know that children frequent the premises; and (2) if the
cause of the child’s injury was a dangerous condition
on the premises. A dangerous condition “is one which
is likely to cause injury to the general class of children
who, by reason of their immaturity, might be incapable
of appreciating the risk involved.” The Kahn doctrine
does not impose a duty on owners or occupiers of land to
remedy conditions involving obvious risks that children
would be expected to appreciate and avoid.7
The appellate court stated that the plaintiff brought her case
under the “frequent trespasser doctrine” which is separate and
distinct from the Kahn doctrine. The court cited to Miller v.
General Motors Corp.,8 to explain the rationale behind the
frequent trespass doctrine:
This exception has developed because of the concern
that human safety ought to be more important than the
landowner’s interest in unrestricted freedom to use his
own land as he sees fit. This view is especially prevalent in cases in which the burden on the landowner and
the expense in taking precautions to prevent harm are
not great. If that burden is very slight, and if the risk of
harm to the trespasser is correspondingly very great,
some commentators have found good reason to hold
the landowner liable for injuries sustained on his land
by the trespasser. This rule applies mostly in the case of
frequent trespass upon a limited area.
The Miller court further observed: [t]his duty is imposed
because the burden of looking out for trespassers is not great. A
typical case is the frequent use of a “beaten path” that crosses
a railroad track, which is held to impose a duty of reasonable
care as to the operation of trains.9
The appellate court in Nelson stated that where a landowner
is aware of the presence of frequent trespassers, and a corresponding risk of danger to them, the landowner owes a duty
of care to prevent harm under the frequent trespass doctrine:
M-3
The frequent trespass doctrine is focused, then, not on
the trespasser’s knowledge of the risks involved, but
rather on the landowner’s knowledge of the risks. Unlike the Kahn doctrine, the issue of whether the risk was
open, obvious, and capable of being appreciated and
avoided by the trespassers is irrelevant to the analysis
under the frequent trespass doctrine; the only issue is
whether the landowner appreciated the risk and was in
a position to prevent harm.10
The appellate court referenced §334 of the Restatement
(Second) of Torts, illustration 3, as an example of when the
frequent trespass doctrine allows a plaintiff to recover:
3. The A Railway Company has knowledge of the fact
that the inhabitants of the town of X have so persistently
used a part of the right of way parallel to its track as a
means of reaching their homes that they have worn a
beaten path beside the track. This path is at a point where
the tracks curve sharply, and it is so close to the tracks
as to make its use dangerous while trains are passing. B,
one of the inhabitants of the town of X, is walking along
the path on his way home from the station. A locomotive
of the A Company is driven around the curve at a high
rate of speed in the same direction as that in which B
is walking, without a headlight and without ringing its
bell. It strikes B. The A Railway Company is subject
to liability to B.11
The appellate court dismissed METRA’s arguments that
the frequent trespass doctrine is contrary to the Trespassing
on Railroad Property Act,12 and that the frequent trespass
doctrine should be abolished. The appellate court also pointed
out that METRA cited no cases holding that an open and obvious danger negates a landowner’s duty under the frequent
trespass doctrine, although this is not unusual in a case of
first impression. The court concluded by answering the first
certified question, holding that any open and obvious risk in
crossing the railroad track could not negate METRA’s duty
toward the plaintiff under the frequent trespass doctrine.13
V. DOES THE FREQUENT TRESPASS DOCTRINE
CONDONE TRESPASSING IN VIOLATION OF
PUBLIC POLICY?
Should the “Frequent Trespass” Rule Be
Trumped by the “Open and Obvious Danger” Rule,
Just as the “Kahn Doctrine” is Trumped by the
“Open and Obvious Danger” Rule?
The Nelson decision seems to acknowledge the open and
obvious risk of trespassing on railroad tracks, but shifts the
burden of protecting against these risks by upholding a duty
owed to the trespasser under the frequent trespass doctrine.
The Nelson decision does not, unfortunately, resolve the conflict between the two rules of law: (1) the “open and obvious
danger” rule;14 and (2) the “frequent trespasser” rule .15
There appears to be a need for clarification of the “frequent
trespasser” rule because of seeming public policy concerns.
Two inconsistencies require resolution. First, the Trespassing on Railroad Property Act prohibits walking on or across
railroad tracks at non-designated pedestrian crosswalks, but
the “frequent trespasser” rule encourages persons to create
their own crosswalks, beaten paths, by frequently violating
the Act. It is not sound public policy to encourage multiple
violations of the Trespassing Act which allow children and
adults to create their own crosswalks in the form of beaten
paths which lack the protection of the railroad company’s
designed, constructed, maintained and designated crosswalks.
Indeed, it appears quite dangerous to our children for the
courts to sanction such conduct.
Second, the public policy behind a wilful and wanton
conduct standard for an “ordinary trespasser,” but an ordinary
care standard for a “frequent trespasser,” appears counterproductive by encouraging multiple violations of the law, the
Trespassing on Railroad Property Act. Seemingly, the more a
person violates the law, the more the law protects such person.
These policy concerns suggest that the open and obvious
danger of being struck and injured by a train operating on its
tracks, at a place where a pedestrian has no legal right to be
and where the Trespassing on Railroad Property Act prohibits
her presence, should bar any claim against a railroad.
The Kahn Doctrine
The “Kahn doctrine” has a rational basis for the imposition
of liability on a landowner to maintain its property in a reasonably safe condition for child trespassers: some children are
too young and immature and, therefore, unable to appreciate
the dangers on the property.16
But, when a child is old enough and mature enough (al-
M-4
lowed in public unsupervised) to appreciate the danger of
common, open and obvious conditions, the Kahn doctrine
is no longer applied, but rather, is trumped by the “open and
obvious danger” rule such that the landowner no longer owes
a duty to the trespassing child.17
In Kahn v. James Burton Co.,18 the Illinois Supreme Court
announced the “Kahn doctrine” which it defined in these
words:
[T]he Kahn principle should not be construed to impose
a duty on owners or occupiers to remedy conditions
the obvious risk of which children generally would be
expected to appreciate and avoid. Even if an owner or
occupier knows that children frequent his premises, he
is not required to protect against the ever present possibility that children will injure themselves on obvious
or common conditions. As this court has observed:
It is recognized, however, that an exception exists
where the owner or person in possession knows, or
should know, that young children habitually frequent
the vicinity of a defective structure or dangerous agency
existing on the land, which is likely to cause injury to
them because they, by reason of their immaturity, are
incapable of appreciating the risk involved, and where
the expense or inconvenience of remedying the condition is slight compared to the risk to the children. In such
cases there is a duty upon the owner or other person in
possession and control of the premises to exercise due
care to remedy the condition or otherwise protect the
children from injury resulting from it.19
It is always unfortunate when a child gets injured
while playing, but a person who is merely in
possession and control of the property cannot be
required to indemnify against every possibility
of injury thereon. The responsibility for a child’s
safety lies primarily with its parents, whose duty it
is to see that his behavior does not involve danger
to himself.
The Illinois Supreme Court has determined that the open
and obvious danger/no duty rule controls over and trumps any
duty a landowner owes to a child trespasser in several cases,
including the following:
(1) Corcoran v. Village of Libertyville, 73 Ill. 2d 316,
383 N.E.2d 177 (1978) (no duty of landowner
under Kahn doctrine to protect 3-year old who
wandered away from home into ditch because
peril was open and obvious).
(2) Cope v. Doe, 102 Ill. 2d 278, 464 N.E.2d 1023
(1984) (apartment complex owner owed no duty
under Kahn rule to protect 7-year old from drowning in retention pool because risk of drowning in
pond an open and obvious danger).
The supreme court in Corcoran v. Village of Libertyville,20
held that the landowner village owed no duty under the rule
of Kahn to protect a 3-year old from drowning in a drainage
ditch because the drainage ditch was an “open and obvious
danger” from which the landowner had no duty to protect
entrants onto its property. Explaining that the open and obvious danger rule prevailed over the Kahn doctrine, the supreme
court in Corcoran reasoned:
The law recognizes that children, especially those of
tender age, might conceivably be injured by the most
innocuous of conditions. As expressed in the comments
accompanying §339 of the Restatement (Second) of
Torts:
There are many dangers such as those of fire and
water, or of falling from a height, which under
ordinary conditions may reasonably be expected
to be fully understood and appreciated by any child
of an age to be allowed at large.21
Considering that the supreme court has held that the open
and obvious danger rule prevails over and trumps the Kahn
doctrine, it logically follows that the supreme court would
also hold that the open and obvious danger rule prevails over
and trumps the frequent trespass doctrine.
Frequent Trespass Doctrine
The “frequent trespasser” rule has developed gradually,
and its rationale has essentially gone unchallenged, even
though it has significantly less rational basis for its existence
than the “Kahn doctrine.” The rationale for the “frequent
trespasser” rule lacks the “Kahn doctrine” public policy of
protecting children from dangerous conditions that children
are too young to appreciate. That is so because the “frequent
trespasser” rule applies to both children and
adults.22
The only rationale for the “frequent trespasser” rule (although the courts have never really explained the rationale,
but instead, routinely applied the rule taking for granted that
M-5
it is supported by a strong public policy) is that it is easier
for a landowner to locate the beaten paths of frequent trespassers and to prevent the use of such beaten paths than it
is for children and adults to follow the law and refrain from
trespassing on the property. In the case of a railroad, the only
rationale for the application of the “frequent trespasser” rule is
that it is a lesser financial and personnel burden on a railroad
to inspect its miles of tracks for frequent trespasser “beaten
path” crossings and prevent their use than it is for children and
adults to comply with the no trespassing on railroad property
law found in the Trespassing on Railroad Property Act.23
The wisdom of a rule of law which encourages disregard for
the law (violating the Trespassing on Railroad Property Act)
and rewards such illegal activity by imposing a duty on the
landowner to catch and stop frequent trespassers seems contrary to public policy and is in need of serious re-examination.
In Bucheleres v. Chicago Park District, the Illinois Supreme Court set out an analysis of the rationale supporting
the open and obvious danger rule, which is a no duty rule.24
Bucheleres suggests that a condition on property which is
both dangerous and open and obvious to an entrant coming
onto the property itself cautions the entrant to appreciate and
avoid the obvious danger. In Bucheleres, the supreme court
summarized Illinois law with respect to the fact that landowners are not liable for open and obvious perils or risks of harm
on property.
Illinois law holds that persons who own, occupy, or
control and maintain land are not ordinarily required
to foresee and protect against injuries from potentially
dangerous conditions that are open and obvious. This
court has recognized,
certainly a condition may be so blatantly obvious
and in such position on the defendant’s premises
that he could not reasonably be expected to anticipate that people will fail to protect themselves
from any danger posed by that condition. Even
in the case of children on the premises, this court
has held that the owner or possessor has no duty to
remedy conditions presenting obvious risks which
children would generally be expected to appreciate
and avoid.
In cases involving obvious and common conditions,
such as fire, height, and bodies of water, the law generally assumes that persons who encounter these conditions will take care to avoid any danger inherent in such
condition. The open and obvious nature of the condition
itself gives caution and therefore the risk of harm is
M-6
considered slight; people are expected to appreciate and
avoid obvious risks.25
Under the open and obvious danger/no duty rule, the only
test to its applicability is whether a dangerous condition on
the property is open and obvious. For example, the dangers of
injury from “fire, drowning in water or falling from a height”
are so well-known and obvious that a landowner owes no duty
to protect an entrant onto property from such. Under the open
and obvious danger rule, the status of an entrant — invitee,
licensee or trespasser — is not an issue. If a condition on the
property poses an open and obvious danger, there is no duty
owed to the entrant without regard to the entrant’s status.
However, under the frequent trespasser rule, the status of
the entrant, the knowledge of the landowner of the trespassers,
the habit of persons frequently trespassing in the same area,
and the determination whether the burden on the landowner to
prevent trespassers is slight as compared to the risk of injury
to the trespassers, are all determinative factors as to whether a
duty is owed.26 These frequent trespasser elements of a cause
of action are, as the supreme court decisions in Bucheleres
v. Chicago Park District, and Mt. Zion State Bank & Trust v.
Consolidated Communications, Inc. reveal, unnecessary to be
considered if the danger is an open and obvious peril, known
and appreciated by the entrant onto property. The common
experiences of mankind reveal that the danger of being struck
and injured by a train while trespassing on railroad tracks is
just as open and obvious as the danger of injury from “fire,
drowning in water and falling from heights,” which the supreme court holds are open and obvious dangers where no
duty is owed.
In addition to the cases cited previously herein, there are
a number of open and obvious danger/no duty cases which
present factual settings in which the rule has been applied
and that support the position that no duty should be owed to a
trespasser on railroad tracks. Among those open and obvious
danger cases finding no duty to the entrant on the property of
the landowner are the following.
(1) Chareas v. Township High School District No.
214, 195 Ill. App. 3d 540, 553 N.E.2d 23 (1st Dist.
1999) (school district owed no duty to protect
plaintiff from being hit in eye with tennis ball
where plaintiff was voluntarily standing inside
fenced tennis court watching tennis match because
such was an open and obvious danger).
(2) Nally v. City of Chicago, 190 Ill. App. 3d 218, 546
N.E.2d 630 (1st Dist. 1989) (no duty owed by city
to protect telephone repairman from hearing loss
due to aircraft noise at O’Hare airport because being on the ground near airplanes presented an open
and obvious danger of exposure to loud engine
noise).
(3) Sollami v. Eaton, 201 Ill. 2d 1, 772 N.E.2d 215
(2002) (homeowner owed no duty to protect plaintiff on premises injured while rocket-jumping on
trampoline as peril of landing wrong and being
injured was an open and obvious danger).
(4) Prostran v. City of Chicago, 349 Ill. App. 3d 81,
811 N.E.2d 364 (1st Dist. 2004) (no duty owed by
city to pedestrian who observed construction in
alley between two sections of sidewalk and walked
into the construction area, fell down and sustained
injuries because the peril was an open and obvious
danger).
(5) Jakubowski v. Alden-Bennett Construction Co.,
327 Ill. App. 3d 627, 763 N.E.2d 790 (1st Dist.
2002) (no duty owed to 13-year old trespasser
on building construction site where he stepped
through the wall framing into an open stairwell
from second to first floor as such was an “open
and obvious danger” like fire, drowning in water
and falling from a height).
If watching a tennis match inside the tennis court (Chareas),
getting too close to airplane engines (Nally), rocket-jumping
on a trampoline (Sollami), walking in an alley under construction (Prostran) and walking in a building under construction
with stairwell openings (Jakubowski), were found to be open
and obvious dangers against which the landowner owed no
duty to protect entrants on the property, then the danger of
trespassing and walking on railroad tracks and being struck
by a train should likewise, be an open and obvious danger,
like fire, drowning in water and falling from a height. As such,
the railroad should not owe a trespasser a duty to protect.
The facts at issue in Jakubowski provide a helpful example
of the application of the open and obvious danger/no duty rule.
In Jakubowski, the plaintiff, Frank Jakubowski, age 13, went
onto a construction site at about 7:30 p.m. on April 30, 1997
with friends. They went up to the second floor of the building under construction to see how the work was progressing.
Frank had been chased off of the site previously by the field
superintendent. While on the second floor, he saw a police
car driving by and ducked out of sight, stepping through wall
framing and into an open stairwell, falling to the first floor
and sustaining injuries.
The trial court granted summary judgment for both defendants and the appellate court affirmed, finding that neither the
landowner nor the general contractor owed a duty to protect
the 13-year-old trespasser from the open and obvious and
common danger of an open stairwell: “[i]n the present case,
the open stairwell presented an open and obvious danger of
falling. Thus, neither Drexel Horizon nor Alden-Bennett had a
common law duty to protect Frank from the open and obvious
danger.”27
The appellate court in Jakubowski ruled that open and
obvious dangers which children, even trespassing children,
are deemed to know and appreciate do not impose liability
on a landowner. A landowner is not liable for such conditions
because they are deemed to be “non-dangerous conditions”
for child trespassers.
While certainly there are latent dangers that a child
would not appreciate due to his minority, a possessor of
land is free to rely upon the assumption that any child
old enough to be allowed at large by his parents will
appreciate certain obvious dangers or at least make his
own intelligent and responsible choice concerning them.
****
There are many dangers, such as those of fire and water
or of falling from a height, which under ordinary conditions may reasonably be expected to be fully understood
and appreciated by any child of an age to be allowed
at large.28
More recently, the appellate court has found that a bicycle
in a hallway over which the plaintiff fell, and algae on a boat
dock on which the plaintiff fell, were both open and obvious
dangers from which the landowner had no duty to protect. See
Belluomini v. Stratford Green Condominium Association, 346
Ill. App. 3d 687, 805 N.E.2d 701 (2d Dist. 2004) (bicycle in
condo hallway of which the plaintiff was aware was an open
and obvious peril and that there was no duty to protect the
plaintiff); and Bonavia v. Rockford Flotilla, 6-1, Inc., 348 Ill.
App. 3d 286, 808 N.E.2d 1131 (2d Dist. 2004) (algae growth
on dock pier on which boater who rented dock space slipped
was an “open and obvious peril” imposing no duty on dock
operator to warn of or guard against).
In order to resolve the question of whether the “open
and obvious danger no duty rule” trumps the “frequent trespasser” rule, is necessary to consider the two rules discussed
in McKinnon v. Northeast Illinois Regional Commuter R.R.
M-7
Corp. In McKinnon, METRA asserted that the plaintiff
McKinnon’s complaint, pleading a negligence theory for an
accident wherein decedent Kevin Spletter, an adult crossing
and trespassing on METRA’s tracks, was killed when struck
by a train, was insufficient. METRA contended that to state
a cause of action for the death of an adult trespasser on its
tracks, the complaint was required to plead wilful and wanton
conduct, not mere negligence, because refraining from wilful
and wanton conduct was the standard owed to adult trespassers.
The appellate court noted that there was no disagreement as
to the general rule that ordinarily the duty owed a trespasser
is to refrain from wilful and wanton conduct, “Plaintiffs also
do not dispute the general rule that ‘a railroad company owes
no duty to a trespasser except to refrain from wantonly or
willfully injuring him, and to use reasonable care to avoid
injury to him after he is discovered to be in peril.’”29
However, the appellate court found that the general rule
did not apply to the plaintiff McKinnon because his case fell
within the “frequent trespasser” exception to the general rule:
Plaintiffs argue, however, that the facts as alleged in their
complaint fall under one of three exceptions to the rule
of no duty to a trespasser which has come to be known
as the permissive use or frequent trespass exception. . . .
****
Under this exception, a landowner is liable for injuries to
a trespasser proximately caused by its failure to exercise
reasonable care in the course of its activities, where
the landowner ‘knows, or should know from the facts
within his knowledge, that trespassers are in the habit
of entering his land at a particular point or of traversing
an area of small size.’ 30
As used in McKinnon, the “frequent trespasser” exception
changes the duty a landowner owes to a trespasser from a
duty to refrain from wilful and wanton conduct to an ordinary
trespasser to a duty of ordinary care/reasonable care owed to
a frequent trespasser (a beaten path trespasser). The “frequent
trespasser” exception appears to be counter-intuitive to the
Trespassing on Railroad Property Act,31 because if enough
people decide the pedestrian crossing nearest their home is
inconvenient (too far to walk to), they can create one or any
number of “beaten paths” and compel a railroad to owe them
the same duty it owes to pedestrians using its designated crosswalks — a duty of reasonable care. Indeed, it appears that the
“frequent trespasser” rule encourages the public to ignore the
law, the Trespassing on Railroad Property Act, and engage in
M-8
dangerous conduct — creating “beaten paths” allowing them
to become “frequent trespassers” to whom the same duty as
a railroad owes to invitees on its station platforms and its
designated crosswalk areas is owed.
The courts do not explain the purpose of and the ramifications resulting from promulgation of the “frequent trespasser”
rule. The Trespassing on Railroad Property Act is designed
to prevent harm and injury to persons making it an illegal
criminal offense to trespass on railroad property. The Act
prevents accidents and injuries.
Although not intended to do so, the “frequent trespasser”
exception to the general rule and the duty to refrain from wilful and wanton conduct to trespassers on railroad property,
encourages groups of individuals to create their own railroad crossings — beaten paths. These beaten paths lack the
protections of designed, planned, maintained and protected
crosswalks provided by a railroad.
The “frequent trespasser exception” may have outlived
its usefulness. A rule that encourages groups of persons to
establish crosswalks — beaten paths — on railroad property
and requires railroads to locate such beaten paths along miles
and miles of track places an impossible burden on a railroad
and encourages persons to ignore the law and engage in the
unsafe practice of crossing railroad tracks at non-crosswalk
areas.
V. CERTIFIED QUESTION NO. 2:
Section 3-102 of the Tort Immunity Act
The Nelson court next addressed the second certified question, whether under §3-102(a) of the Tort Immunity Act, a
local public entity’s duty to exercise ordinary care to maintain its property in a reasonably safe condition for intended
and permitted users applies only to passive conditions of the
premises or does such duty also apply to activities or operations conducted on the premises by the local public entity?32
Section 3-102(a) of the Tort Immunity Act states as follows,
§3-102(a) Except as otherwise provided in this Article,
a local public entity has the duty to exercise ordinary
care to maintain its property in a reasonably safe condition for the use in the exercise of ordinary care of
people whom the entity intended and permitted to use
the property in a manner in which and at such times
as it was reasonably foreseeable that it would be used,
and shall not be liable for injury unless it is proven that
it has actual or constructive notice of the existence of
such a condition that is not reasonably safe in reasonably
adequate time prior to an injury to have taken measures
to remedy or protect against such condition.33
The appellate court in Nelson first examined §3-106 of the
Tort Immunity Act and the case of McCuen v. Peoria Park
District,
The clear language of §3-102(a) immunizes the defendant from liability to persons who are not intended
and permitted users of its property if they are injured
by a “condition [of the property] that is not reasonably
safe.” Defendant contends that the word “condition”
encompasses activities and operations conducted on the
property. We disagree. McCuen v. Peoria Park District,
163 Ill. 2d 125 (1994), is instructive. In McCuen, our
Supreme Court addressed the meaning of the word
“condition” as used in §3-106 of the Tort Immunity Act,
which immunizes local public entities for liability and
negligence based on “the existence of a condition of
any public property intended or permitted to be used for
recreational purposes.” While visiting a park owned and
operated by the Peoria Park District, McCuen was told
by a park district employee to climb onto a hayrack in
order to take a mule-drawn hayrack ride. While the employee was harnessing the mules, he slapped a strap over
one of the mules, causing the mule team to suddenly
bolt and run off with the driverless haystack. McCuen
was thrown to the ground and injured. She subsequently
brought suit against the defendant park district.
The issue on appeal was whether the driverless hayrack
was a “condition” of public property within the meaning of
section 3-106. Our supreme court held:
We do not believe that a driverless hayrack is a condition
of public property within the meaning of section 3-106.
Plaintiffs do not claim that the hayrack itself was dangerous, defective or negligently maintained, only that the
mule team was not handled properly by the park district
employee. The handling of the mule team does not relate
to the condition of the hayrack itself. If otherwise safe
property is misused so that it is no longer safe, but the
property itself remains unchanged, any danger presented
by the property is due to the misuse of the property and
not to the condition of the property.
In effect, the supreme court held that Section 3-106 immunizes defendant for liability in negligence where the property
itself is unsafe, but that Section 3-106 does not immunize
defendant for unsafe activities conducted upon otherwise safe
property.34
The appellate court in Nelson then applied the reasoning
of the supreme court in McCuen to §3-102(a),
The same analysis applies to section 3-102(a), which
provides that local public entities owe no duty (e.g.,
are immunized) for injuries arising from the unsafe
“condition” of its property where the injured party
was not an intended or permitted user of the property.
Section 3-102(a) provides no similar immunity for
persons injured by unsafe activities conducted on the
property. Thus, in answer to the certified question, section 3-102(a) immunity applies where the following two
requirements are met: (1) the injured party was not an
intended and permitted user of the property; and (2) the
injury arose from the condition of the property. Section
3-102(a) immunity does not apply where the injuries
arose from a unsafe activity conducted on otherwise
safe property.35
Finally, the appellate court in Nelson summarily dismissed
METRA’s contention that §3-102(a) applies to both conditions
of the property and the activities occurring thereon,
Defendant contends that section 3-102(a) is a codification of the common law rule requiring a municipality
to maintain its property in a reasonably safe condition,
and that the common law duty to maintain property in a
reasonably safe condition includes both the condition of
the property and the activities occurring thereon. Therefore, defendant contends that section 3-102(a) should be
construed as immunizing it for injuries to persons who
are not intended and permitted users of the property,
when those injuries arise from activities conducted on
the property. Defendant’s contention is without merit, as
section 3-102(a) expressly refers only to the “condition”
of the property, not to the activities thereon. 36
VI. DOES THE NELSON COURT’S
INTERPRETATION OF SECTION 3-102(A)
IMPROPERLY LIMIT THE IMMUNITIES
PROVIDED TO LOCAL PUBLIC ENTITIES
BY THE LEGISLATURE?
The second question in the Nelson case involves a matter
of statutory interpretation as to the meaning of the provision
in §3-102(a) of the Tort Immunity Act, which provides a local
public entity must maintain its property “in a reasonably safe
condition” for intended and permitted users. Does the phrase
“maintain its property ‘in a reasonably safe condition’” require
a local public entity to maintain both the physical conditions
and the activities thereon in reasonably safe condition for
M-9
intended and permitted users?
Indeed, as will be discussed herein, the duty provision in
§3-102(a), stating that a local public entity must maintain its
property in a reasonably safe condition, is a codification of
the very same duty existing at the common law.37 And, the
common law duty of a landowner to maintain its property in a
reasonably safe condition includes both the state or condition
of the property and the activities taking place thereon.38
Section 3-102(a) grants a local public entity immunity from
liability for injuries on the local public entity’s property if persons coming onto the property are not “intended and permitted
user” of the property. 39 Section 3-102(a)’s duty provision
stating that a local public entity must maintain its property
in a reasonably safe condition is no mystery. It is merely the
common law duty a landowner owes to someone coming onto
the premises. The meaning of this common law duty written
into §3-102(a) is well-known and well-established.
The rule that a landowner owes a duty to entrants onto the
property to maintain the property in a reasonably safe condition both as to the condition or state of the premises and as to
the acts or activities taking place on the premises is the wellknown, long-established common law rule and, as the Illinois
Supreme Court has held in a number of cases, is the source
of the provision in §3-102(a)’s duty of a local public entity
to maintain its property in “a reasonably safe condition.”40
The words in §3-102(a) state that the duty a local public
entity owes, to maintain its property in a reasonably safe condition, are a mere reiteration of the duty owed by a landowner
to entrants thereon, “to maintain its property in a reasonably
safe condition.” The immunity provided by §3-102(a) is that
its duty to maintain its property in a reasonably safe condition is owed, not to all entrants onto its property, but only
to “intended and permitted users” on its property. Thus, for
example, no duty is owed to trespassers under §3-102(a).
The supreme court in Wagner v. City of Chicago,41 stated
that, “[a]t common law, a municipality had a duty to maintain its property in a safe condition.” That duty was incorporated into §3-102(a). The Wagner court explained that
§3-102(a) and its duty of a local public entity to maintain its
property in a reasonably safe condition is merely a statutory
codification of the common law rule, “[i]n that it set forth a
municipality’s general duty at common law to maintain its
property in a reasonably safe condition.
This limitation on the scope of the duty in section
3-102(a) is in keeping with the scope of that duty as it
existed at common law. The Tort Immunity Act creates
no new duties but merely codifies those existing at com-
M-10
mon law. At common law, a municipality had a duty to
maintain its property in a safe condition.42
Wagner’s rule that §3-102(a)’s duty reflects the common
law duty owed by landowners to entrants onto the property is
reiterated more recently by the supreme court in Washington v.
City of Chicago. 43 Interpreting the duty owed by the City as to
“intended and permitted users” of its streets under §3-102(a),
the Washington court held that the city had a duty to maintain
its median strip in a reasonably safe condition. The common
law duty of a landowner is incorporated into §3-102(a), “[t]he
City is subject to the Local Governmental and Governmental
Employees Tort Immunity Act (the Act) (745 ILCS 10/3-102
(West 1994)). Section 3-102(a) of the Act states,
Except as otherwise provided in this Article, a local
public entity has the duty to exercise ordinary care to
maintain its property in a reasonably safe condition for
the use in the exercise of ordinary care of people whom
the entity intended and permitted to use the property in a
manner in which and at such times as it was reasonably
foreseeable that it would be used . . .
745 ILCS 10/3-102(a) (West 1994)
This provision does not impose any new duties on municipalities. Rather, it codifies a municipality’s general duty at
common law to maintain the property in a reasonably safe
condition.44
Both the common law and §3-102(a)’s statutory codification of the common law to the effect that a landowner owes
a duty to maintain its property in a reasonably safe condition
include the state or condition of the property itself and the
activity taking place on the property. Noting that the general
duty of a landowner is to maintain its premises in a reasonably safe condition and includes conditions existing on the
premises and activities occurring on the premises, the supreme
court in Sollami v. Eaton stated the rule in these words, “[t]
he duty owed by Eaton to Kathleen is one of reasonable care
under the circumstances regarding the state of the premises
or acts done or omitted on them.”45
The legislature, in enacting the Tort Immunity Act to protect local government from liability for certain operations
of government in the providing of a multitude of services,
intended to limit local government’s duty to maintain its property reasonably safe only for “intended and permitted users” of
the property. However, the legislature did not intend to exclude
activities taking place on local government’s property.
Finally, further support for the fact that the duty of a local
public entity to maintain its property in a reasonably safe
condition, both as to the state or condition of the property and
to the activities or acts done thereon is found in the Illinois
Premises Liability Act. (740 ILCS 130/2). The Premises Liability Act adopts the common law duty a landowner owes to
entrants onto property which is a duty of reasonable care as to
the “state of the premises or acts done or omitted on them.”
Section 2 of the Act provides as follows.
The distinction under the common law between invitees and licensees as to the duty owed by an owner or
occupier of any premises to such entrants is abolished.
The duty owed to such entrants is that of reasonable
care under the circumstances regarding the state of the
premises or acts done or omitted on them.
740 ILCS 130/2.
Endnotes
The Author’s firm, Judge, James & Kujawa, LLC, represented
METRA in Nelson v. Metra, both in the trial court and on appeal. The
petition for rehearing to the appellate court was recently denied and the
notice of intent to appeal to the Illinois Supreme Court will be on file
shortly.
1
Nelson v. Northeast Illinois Regional R.R. Corp., d/b/a METRA, No.
1-05-0002, 2006 WL 587791 (Ill. App. 1st Dist., March 10, 2006).
2
3
Nelson, 2006 WL 587791, at *2.
4
Id. at *3.
Nelson v. Northeast Illinois Regional R.R. Corp., d/b/a METRA, No.
1-02-1923, First District, Sixth Division, June 3, 2003 (unpublished
opinion under Supreme Court Rule 23).
N5
6
Nelson, 2006 WL 587791, at *3.
7
Id. at *3-4.
8
207 Ill. App.3d 148 (1980).
9
Nelson, 2006 WL 587791, at *4.
10
Id.
Restatement (Second) of Torts, §334 at 199 (1965); Nelson, 2006 WL
587791, at *4.
Therefore, it must be concluded that §3-102(a)’s duty to
maintain property in a reasonably safe condition includes
the state/condition of property and the activities occurring
thereon. This is so because §3-102(a) is a codification of the
common law rule which the supreme court holds to include
the state or condition of and the activities taking place on the
property.
11
VII. CONCLUSION
15
A rule of law that encourages or condones the violation of
a statute such as the Trespassing on Railroad Property Act,
designed to protect the public, can only promote dangerous
conduct and lead to more injury. Perhaps the frequent trespass
doctrine is a concept that should be seriously re-examined,
and possibly eliminated all together.
The legislature provided to local public entities various
immunities and defenses under the Tort Immunity Act, recognizing the multitude of services and functions performed
by local public entities, which could potentially subject
them to liability. The intent of the legislature in doing so
must be protected. As no words in §3-102(a) of the Tort Immunity Act suggest that it excludes “activities occurring on
the property” from the duty owed by local public entities, to
omit “activities occurring thereon” from the interpretation of
§3-102(a) would, in effect, rewrite §3-102(a), and would not
reflect the intent of the legislature.
12
Nelson, 2006 WL 587791, at *5.
13
Id.
Mt. Zion State Bank & Trust v. Consolidated Communications, Inc.,
169 Ill. 2d 110, 660 N.E.2d 863 (1995) (telephone company not liable
to 6-year-old who climbed on its pedestal over a fence and drowned in a
swimming pool because such was an open and obvious danger imposing
no duty to guard against).
14
McKinnon v. Northeast Illinois Regional Commuter Railroad Corp.
d/b/a METRA, 263 Ill. App. 3d 774, 635 N.E.2d 744 (1st Dist. 1994)
(railroad’s duty to adult trespasser to refrain from wilful and wanton
conduct converted to a duty of reasonable care/ordinary care under the
“frequent trespasser” rule).
Kahn v. James Burton Co., 5 Ill. 2d 614, 126 N.E.2d 836 (1955) (landowner owes duty of reasonable care to trespassing child for a dangerous
condition on property which a child is incapable of appreciating and
the burden of remedying such dangerous condition is slight compared
to the risk of injury to the child.
16
Cope v. Doe, 102 Ill. 2d 278, 464 N.E.2d 1023 (1984) (apartment
complex owner owed no duty under Kahn rule to protect 7-year old
from drowning in retention pool because risk of drowning in pond an
open and obvious danger).
17
18
Kahn v. James Burton Co., 5 Ill. 2d 614, 126 N.E.2d 836 (1955).
19
Kahn, 5 Ill. 2d at 625; 126 N.E.2d at 842.
Corcoran v. Village of Libertyville, 73 Ill. 2d 316, 383 N.E.2d 177
(1978).
20
21
Corcoran, 73 Ill. 2d at 326-27; 383 N.E.2d at 180.
d/b/a METRA, 263 Ill. App. 3d 774, 635 N.E.2d 744 (1st Dist. 1994).
22
23
625 ILCS 5/18(c) – 7503(1)(a)(i)(ii)).
M-11
Bucheleres v. Chicago Park District, 171 Ill. 2d 435, 665 N.E.2d 826
(1996).
24
Bucheleres, 171 Ill. 2d at 448; 665 N.E.2d at 832.
25
d/b/a METRA, 263 Ill. App. 3d 774, 635 N.E.2d 744 (1st Dist. 1994).
26
Sollami v. Eaton, 201 Ill. 2d 1, 772 N.E.2d 215 (2002) (duty of reasonable care owed by homeowner includes state of premises and acts
done on premises — the open and obvious danger rule trumps any duty
as to the activity of rocket-jumping on a trampoline).
38
Jakubowski, 327 Ill. App. 3d at 633-634; 763 N.E. 2d at 795.
Boub v. Township of Wayne, 183 Ill. 2d 520, 702 N.E.2d 535 (1998)
(bicyclist on township road and bridge not an “intended user,” as required
in §3-102(a) of Tort Immunity Act, and, therefore, township immune
from liability pursuant to §3-102(a) of Tort Immunity Act when bike
wheel caught in gap between wooden slats on township bridge causing
bike to flip over and cyclist to sustain serious injuries).
McKinnon, 263 Ill. App. 3d at 778; 635 N.E.2d at 748.
40
Jakubowski v. Alden-Bennett Construction Co., 327 Ill. App. 3d at
636; 763 N.E. 2d at 797.
27
28
29
Id.
30
625 ILCS 5/18(c) – 7503(1)(a)(i)(ii).
31
Nelson, 2006 WL 587791, at *5.
32
745 ILCS 10/3-102(a).
33
Nelson, 2006 WL 587791, at *5-6.
34
Nelson, 2006 WL 587791, at *6.
35
Id.
36
Washington v. City of Chicago, 188 Ill. 2d 235, 720 N.E.2d 1030
(1999) (§3-102(a) imposes no new duties upon a local public entity,
but merely is a statutory incorporation of the common law duty that a
municipality owes to maintain its property in a reasonably safe condition).
37
M-12
39
Wagner v. City of Chicago, 166 Ill. 2d 144, 651 N.E.2d 1120 (1995)
(§3-102(a)’s duty of a local public entity to maintain its property in a
reasonably safe condition is a statutory codification of the common law
rule requiring that a municipality maintain its property in a reasonably
safe condition).
41
Id.
42
Wagner, 166 Ill. 2d at 151; 651 N.E.2d at 1123.
Washington v. City of Chicago, 188 Ill. 2d 235, 720 N.E.2d 1030
(1999).
43
44
Washington, 188 Ill. 2d at 240; 720 N.E.2d at 1034.
45
Sollami v. Eaton, 201 Ill. 2d at 15; 772 N.E.2d at 223.

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